1.  COMPANY OVERVIEW
 
 JRG Securities Limited (JRG or the Company) was incorporated on 17
 October 1994. The Company is primarily engaged in the business as
 brokers for securities trading in various stock exchanges and to act as
 a depository participant.
 
 a) Terms / rights attached to equity shares
 
 The Company has only one class of shares of equity share having a par
 value of Rs.10 per share. Each holder of the equity share is entitled
 to one vote per share. The Company declares and pays dividends in
 Indian rupees. The dividend proposed (if any) by the Board of Directors
 is subject to the approval of the shareholders in the ensuing Annual
 General Meeting.
 
 In the event of liquidation of the Company, the holders of equity
 shares will be entitled to receive any of the remaining assets of the
 company, after distribution of all preferential amounts. However, no
 such preferential amounts exist currently. The distribution will be in
 proportion to the number of equity shares held by the shareholders.
 
 b) Details of the shares reserved for issue under options
 
 The Company issued options under the Employees stock option plan 2005
 (2005 Plan) in the financial year 2005-2006. The 2005 Plan covers all
 non- promoter directors and employees of the Company (collectively
 referred to as eligible employees) and its subsidiaries. Under the
 plan, the Company granted 179,100 options on 3 September 2005. The
 Compensation Committee granted the options on the basis of performance,
 criticality and potential of the employees as identified by management.
 
 The Company had computed the fair value of the options for the purpose
 of accounting of employee compensation cost/ expense over the vesting
 period of the options. The estimated fair value of each stock option
 granted on 3 September 2005 was Rs.0.28. This has been calculated based
 on independent valuation report, which has been estimated under the
 Black Scholes option pricing model. The exercise price for these
 options granted is Rs.10. The inputs were the share price at grant date
 of Rs.10.67, exercise price of Rs.10, expected volatility of 0% ( the
 Company was not listed at the time of grant of options), expected
 dividends 7.5%, contractual life of 4.05 years, and a risk-free
 interest rate of 6.59%. The vesting period for these options granted
 under the 2005 plan varies from 12 months to 36 months. Out of the
 179,100 options granted on 3 September 2005, 50,220 options were
 forfeited and 110,005 options were exercised up to 31 March 2010.
 
 During the financial year 2007-2008, the 2005 plan was merged with JRG
 Employee Stock option plan 2008 (2008 Plan). The 2008 Plan was
 approved on 15 July 2008 at the annual general meeting of shareholders
 and was effective from the same date. The objective of this 2008 Plan
 is to encourage ownership of the Company''s equity by its employees on
 an ongoing basis. The ESOP 2008 is intended to reward the employees for
 their contribution to the successful operation of JRG Securities
 Limited and to provide an incentive to continue contributing to the
 success of the company. The new plan provides that the lock-in period
 and other terms and conditions of this scheme shall apply ipso facto as
 they applied to the options issued under 2005 Plan.
 
 2.1 Contingent liabilities and commitments (All amounts are in Indian
 Rupees except share data or as stated)
 
 Particulars                         March 31, 2012   March 31, 2011
 
 I.  Contingent liabilities
 
 a) Guarantees
 
 - Guarantee issued by the bank         117,500,000      252,500,000
 
 - Guarantees on behalf of 
 subsidiary companies                   120,000,000      120,000,000
 Other money for which the 
 company is contingently liable
 
 - Income tax matters                    13,638,660       10,319,170
 
 b) Claims against the company 
 not acknowledged as debt                10,671,264       10,259,025
 
 c) In addition to above, the 
 Company is also in the process 
 of replying / has responded to 
 show cause notices and queries 
 from regulatory authorities 
 including Securities and Exchange 
 Board of India , which arise in 
 the ordinary course of the business. 
 However there are no such matters 
 pending that the Company expects 
 to be material in relation to
 its business.
 
 II.  Commitments
 
 Estimated amount of contracts 
 remaining to be executed on capital
 account and not provided for            10,868,095       513,446
 
 Other commitments                          272,882          -
 
 * Includes interest payable to the extent of Rs.4,060,263 as at
 31-March-12 ** Includes interest outstanding of Rs.2,668,348 as at
 31-March-12
 
 # The remuneration payable to the former managing director of the
 Company was in excess of the limits approved by the share holders at
 the Annual General Meeting by Rs.490,500. The excess amount of
 Rs.490,500 paid to him has been shown as recoverable under loans and
 advances.
 
 2.2 Segment reporting
 
 a) Primary segment information (by business segments)
 
 The Company is engaged in the business of providing broking and broking
 related services i.e. depository participant services to predominantly
 retail clients. Accordingly the primary segments have been identified
 as broking (including broking related services) Thus, it operates in a
 single primary segment.
 
 b) Secondary segment reporting (by geographical segments)
 
 The Company caters only to the needs of the domestic market. Hence
 there are no reportable geographical segments.
 
 2.3 Security margins from clients.
 
 In order to secure the performance by the clients of their obligations,
 commitments and liabilities to the Company, securities etc are placed
 as margins by creation of pledge in favor of/transfer to the Company''s
 depository account. Such securities etc are held by the Company in a
 fiduciary capacity on behalf of its clients and are not recognized in
 the financial statements. In case such margins are received in cash,
 the same are disclosed under current liabilities.
 
 * In the Annual General meeting of the Company held on 25 July 2009,
 the shareholders had consented for the change in the utilization of the
 aforesaid monies totaling to Rs.366.66 lakhs, raised by the Company
 during the IPO of its shares, from those specified in the object clause
 in the prospectus, inter alia to utilize for expansion activities of
 the Company in India for opening new branches, infrastructure
 development for I-Trade and other infrastructural requirements.
 
 Amount pending utilization as on 31 March 2012 has been maintained in
 fixed deposits with the banks.
 
 2.4 Micro, Small and Medium Enterprises Development Act, 2006
 
 The management has identified enterprises which have provided goods and
 services to the Company and which qualify under the definition of
 Micro and Small Enterprises as defined under Micro, Small and Medium
 Enterprises Development Act, 2006 (the Act). Accordingly, based on the
 information received and available with the Company ,there are no
 amounts payable to such enterprises as at 31 March 2012.
 
 2.5 On 7 June 2010, Mr. Regi Jacob, Mr. Giby Mathew and Mr. Jiji
 Antony (Original Promoters) filed a petition under Section 397 and
 Section 398 of the Companies Act before the Company Law Board (CLB)
 to prevent the misuse of management powers by the Company and prayed
 for an injunction to stop the Company from going ahead with a proposed
 rights issue. The Original Promoters alleged that the Company is
 proposing the rights issue to bring the shareholding of the Original
 Promoters below the prescribed limits so that their special rights
 cease to exist while they continue to remain obligated to not compete.
 The Original Promoters also alleged that the resolution approving the
 proposed rights issue dated 25 May 2010 was in contravention of the
 Articles of Association, oppressive, invalid, null and void.
 
 The Company denied the allegations in entirety and filed its
 comprehensive response to the CLB. The CLB granted stay on the matter
 on 6 July 2010 (Interim Injunction). The CLB, vide order dated 11
 October 2010, vacated the Interim Injunction and allowed the Company to
 proceed with the rights issue specifically mentioning that the veto
 power of the Original Promoters is not applicable in the case of rights
 issue (the Order).
 
 Aggrieved by the Order, the Original Promoters appealed before the High
 Court of Kerala on 19 October 2010 (Appeal). The Court vide order
 dated 1 December 2010, disposed off the Appeal and directed the
 Original Promoters to approach CLB with a direction to the CLB to
 dispose of the matter within three months. Such order passed by CLB was
 further upheld by Hon''ble Kerala High Court.  The Original Promoters
 filed an amended petition under Section 397/398. The Company and the
 other respondents filed a reply to the amended petition under Section
 397/398 of the Companies Act, 1956 on 26 April 2012. The matter is now
 listed on 28 June 2012 for filing of rejoinder and arguments with the
 CLB.
 
 2.6 JRG ESOP Trust
 
 As per the requirements of Securities Exchange Board of India (Employee
 Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999
 (''SEBI guidelines''), since the stock option plan is administered
 through a trust, the accounts of the Company are prepared as if the
 Company itself is administering the employee stock option plan.
 Pursuant to such requirement of the SEBI guidelines the equity shares
 issued to the JRG ESOP Trust and not exercised by the employees as on
 31 March 2012 have been presented as a deduction from the share
 capital. The bank balance of the JRG ESOP Trust as on 31 March 2012 net
 of the loan granted and capital contribution to the JRG ESOP Trust by
 the Company has been presented as bank balance of the Company.
 
 2.7 Exceptional item represents expenses incurred in relation to the
 deferred rights issue of equity shares.
 
 2.8 Prior year comparatives
 
 Till the year ended 31 March 2011, the company was using pre-revised
 Schedule VI to the Companies Act 1956, for preparation and presentation
 of its financial statements. During the year ended 31 March 2012, the
 revised Schedule VI notified under the Companies Act 1956, has become
 applicable to the company. The company has reclassified previous year
 figures to conform to this year''s classification. The adoption of
 revised Schedule VI does not impact recognition and measurement
 principles followed for preparation of financial statements. However,
 it significantly impacts presentation and disclosures made in the
 financial statements, particularly presentation of balance sheet.