MIRA INFORM REPORT

 

 

Report Date :

22.03.2012

 

IDENTIFICATION DETAILS

 

Name :

HSBC INVESTDIRECT SECURITIES (INDIA) LIMITED (w.e.f 15.07.2009)

 

 

Formerly Known As :

IL AND FS INVESTSMART SECURITIES LIMITED

 

 

Registered Office :

HSBC Umang, Fifth Floor, Mind Space, Link Road, Malad (West), Mumbai – 400 064, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2011

 

 

Date of Incorporation :

23.02.2006

 

 

Com. Reg. No.:

11-159988

 

 

Capital Investment / Paid-up Capital :

Rs.1303.109 millions

 

 

CIN No.:

[Company Identification No.]

U67120MH2006PLC159988

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

MUMI07259A

 

 

PAN No.:

[Permanent Account No.]

AABCI4793G

 

 

Legal Form :

A Closely Held Public Limited Liability Company

 

 

Line of Business :

Provides Online Trading, share broking services, wealth management etc with the latest online trading platforms.

 

 

No. of Employees :

Not divulged by management

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba (43)

 

RATING

STATUS

 

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

USD 3223000

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Usually correct

 

 

Litigation :

Clear

 

 

Comments :

Subject is a subsidiary of HSBC InvestDirect (India) Limited.

 

There appears to be accumulated losses recorded by the company. Profitability of the company is under pressure. However, trade relations are fair. Payments are reported to be usually correct and as per commitments.

 

In view of strong holding, the company can be considered normal for business dealings at usual trade terms and conditions.

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

INFORMATION DECLINED

 

Unable to contact

 

LOCATIONS

 

Registered Office :

HSBC Umang, Fifth Floor, Mind Space, Link Road, Malad (West), Mumbai – 400 064, Maharashtra, India

Tel. No.:

91-22-67897777

Fax No.:

91-22-67897968

E-Mail :

sneha.doshi@hsbcinv.com

tax@hsbcinv.com

sachin.due@hsbcinv.com

porusvazifdar@hsbc.co.in

snehadoshi@hsbc.co.in

Website :

www.hsbcinvestdirect.co.in

 

 

DIRECTORS

 

As on 21.09.2011

 

Name :

Dr. Ajay Kumar Dua

Designation :

Chairman

Address :

B-3, Defence Colony, New Delhi – 110 024, India

Date of Birth/Age :

15.07.1947

Qualification :

Ph. D; University of Mumbai, M Sc (Econ), London School of Economics and Politics, U.K., B.A. Honours Economics, St. Stephens College, Delhi University, Diploma in Business Management, Mumbai, Diploma in Marketing Management, Mumbai

Date of Appointment :

11.12.2008

DIN No. :

02318948

 

 

Name :

Mr. Hardeep Singh

Designation :

Director

Address :

608-A, The Aralias, DLF Golf Course, DLF Phase 5, Gurgaon – 122 009, Haryana, India

Date of Birth/Age :

08.09.1954

Qualification :

Graduate, BA Hons, A E P (Kellogg)

Date of Appointment :

11.12.2008

DIN No. :

00088096

 

 

Name :

Mr. Manasije Mishra

Designation :

Director

Address :

3/7, Sarvpriya Vihar, New Delhi – 110 016, India

Date of Birth/Age :

31.07.1965

Qualification :

Graduate, BA (Hons) Economics, MBA Marketing and Finance

Date of Appointment :

30.01.2009

DIN No. :

01854071

 

 

Name :

Mr. Porus Fredy Vazifdar

Designation :

Director

Address :

1101, Safal Heights, Opposite Union Bank, Chembur, Mumbai - 400 071, Maharashtra, India

Date of Birth/Age :

30.01.1967

Qualification :

B.Com, ACA

Date of Appointment :

18.02.2009

DIN No. :

02403394

 

 

Name :

Ms. Kashmira Joji Mathew

Designation :

Director

Address :

Flat No. G 1, Merwanjee Cama Park, Cama Road, Andheri (West), Mumbai – 400 058, Maharashtra, India

Date of Birth/Age :

14.12.1970

Qualification :

B.Com, ACS

Date of Appointment :

18.02.2009

DIN No. :

02341875

 

 

Name :

Mr. Kapil Deepak Seth

Designation :

Director

Address :

B-61, Cozihom Co-Operative Housing Society, Pali Hill Road, Bandra (West), Mumbai – 400 057, Maharashtra, India

Date of Birth/Age :

15.01.1974

Date of Appointment :

13.09.2011

DIN No. :

03596866

 

 

Name :

Mr. Prasanna Bhalchandra Padhye

Designation :

Director

Address :

A-61, Ultra Society, Dilip Gupte Road, Mahim, Mumbai – 400 016, Maharashtra, India

Date of Birth/Age :

28.03.1964

Date of Appointment :

13.09.2011

DIN No. :

03596869

 

 

KEY EXECUTIVES

 

Name :

Ms. Sneha Doshi

Designation :

Company Secretary

Address :

502, Rajyog, Old Nagardas Road, Next to BJP Shivsena Office, Andheri (East), Mumbai – 400 069, Maharashtra, India

Date of Birth/Age :

13.02.1980

Date of Appointment :

01.12.2010

PAN No.:

BAXPS4021H

 

 

Name :

Mr. Ashish Kumar Mishra

Designation :

Manager

Address :

Flat # 102, Kadambari Apartments, Plot #22, Sector 1, Sanpada (East), Navi Mumbai – 400 705, Maharashtra, India

Date of Birth/Age :

23.03.1977

Date of Appointment :

01.04.2010

PAN No. :

AHYPM1872F

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

As on 21.09.2011

 

Names of Shareholders (Equity Shares)

 

 

No. of Shares

HSBC InvestDirect (India) Limited, India (Formerly known as IL and FS Investsmart Limited)

 

43310877

HSBC InvestDirect (India) Limited, India jointly with Manasije Mishra

 

1

HSBC InvestDirect (India) Limited, India jointly with Porus Vazifdar

 

1

HSBC InvestDirect (India) Limited, India jointly with Kishore Dalwani

 

1

HSBC InvestDirect (India) Limited, India jointly with Kashmira Mathew

 

1

HSBC InvestDirect (India) Limited, India jointly with Dilip Mehta

 

1

HSBC InvestDirect (India) Limited, India jointly with Chandrasekaran Diwakar

 

1

Total

 

43310883

 

 

Names of Shareholders (0.001% Compulsory Convertible Preference Shares)

 

No. of Shares

HSBC Securities and Capital Markets (India) Private Limited, India

 

8700000

Total

 

8700000

 

As on 21.09.2011

 

Equity Share Breakup

 

Percentage of Holding

Category

 

 

Bodies corporate

 

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Provides Online Trading, share broking services, wealth management etc with the latest online trading platforms.

 

 

Services :

Stock Broking and Related Services

 

 

GENERAL INFORMATION

 

No. of Employees :

Not divulged by management

 

 

Bankers :

Not Available

 

 

Facilities :

Secured Loans

31.03.2011

Rs. In Millions

31.03.2010

Rs. In Millions

Loans taken for other fixed assets secured

0.000

200.000

Total

0.000

200.000

 

Unsecured Loans

31.03.2011

Rs. In Millions

31.03.2010

Rs. In Millions

Working capital loans others unsecured

604.900

434.900

Total

604.900

434.900

 

Banking Relations :

--

 

 

Auditors :

 

Name :

BSR and Company

Chartered Accountants 

Address :

Lodha Excelus, 1st Floor, Apollo Mills Compound, N.M. Joshi Marg, Mahalakshmi, Mumbai – 400 011, Maharashtra, India

PAN No.:

AAAFB9852F

 

 

Holding Company :

HSBC InvestDirect (India) Limited, India

CIN No.: U67120MH1997PLC110386

 

 

Enterprises that have Control over the Company :

 

v      HSBC Securities and Capital Markets (India) Private Limited

v      HSBC Holdings Plc

v      HSBC Finance (Netherlands)

v      HSBC Holdings BV

v      HSBC Investment Bank Holdings BV

v      HSBC Violet Investments (Mauritius) Limited

v      The Hongkong and Shanghai Banking Corporation Limited, Hongkong

v      The Hongkong and Shanghai Banking Corporation Limited, India Branch

v      HSBC Asia Holdings BV

v      HSBC Asia Holdings (UK)

 

 

Fellow Subsidiaries :

v      HSBC InvestDirect Academy for Insurance and Finance (India) Limited

v      HSBC InvestDirect Distribution Services (India) Limited

v      Investsmart Financial Services Limited

v      IL and FS Investsmart Asia Pacific Private Limited, Singapore

 

 

CAPITAL STRUCTURE

 

After 21.09.2011

 

Authorised Capital : Rs.1920.000 millions

 

Issued, Subscribed & Paid-up Capital : Rs.1303.109 millions

 

As on 21.09.2011

 

Authorised Capital :

No. of Shares

Type

Value

Amount

60000000

Equity Shares

Rs.10/- each

Rs.600.000 millions

9000000

Preference Shares

Rs.100/- each

Rs.900.000 millions

 

Total

 

Rs.1500.000 millions

 

 

 

 

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

43310883

Equity Shares

Rs.10/- each

Rs.433.109 millions

8700000

Preference Shares

Rs.100/- each

Rs.870.000 millions

 

Total

 

Rs.1303.109 millions

 

 

 

 

 


 

FINANCIAL DATA

[all figures are in Rupees Millions]

                                                                                                                                

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2011

31.03.2010

31.03.2009

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

1303.109

1252.327

337.500

2] Share Application Money

0.000

0.000

430.000

3] Reserves & Surplus

1600.891

1001.672

909.500

4] (Accumulated Losses)

(2098.339)

(1502.774)

(1009.891)

NETWORTH

805.661

751.225

667.109

LOAN FUNDS

 

 

 

1] Secured Loans

0.000

200.000

200.000

2] Unsecured Loans

604.900

434.900

288.000

TOTAL BORROWING

604.900

634.900

488.000

DEFERRED TAX LIABILITIES

0.000

0.000

0.000

 

 

 

 

TOTAL

1410.561

1386.125

1155.109

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

309.395

389.604

452.424

Capital work-in-progress

6.876

3.161

5.716

 

 

 

 

INVESTMENT

0.000

0.000

0.000

DEFERRED TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories

0.000
0.000

7.204

 

Sundry Debtors

544.022
877.302

307.881

 

Cash & Bank Balances

246.737
938.127

743.804

 

Other Current Assets

28.902
36.846

27.860

 

Loans & Advances

1094.967
967.423

757.771

Total Current Assets

1914.628
2819.698

1844.520

Less : CURRENT LIABILITIES & PROVISIONS

 

 

 

 

Sundry Creditors

708.397

1643.239

950.525

 

Other Current Liabilities

74.618
115.643

97.833

 

Provisions

37.323
67.456

99.193

Total Current Liabilities

820.338
1826.338

1147.551

Net Current Assets

1094.290
993.360

696.969

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

1410.561

1386.125

115.109

 

 


PROFIT & LOSS ACCOUNT

 

 

PARTICULARS

31.03.2011

31.03.2010

31.03.2009

 

SALES

 

 

 

 

 

Operating Revenue

980.619

1212.532

962.407

 

 

Other Income

26.854

1.574

9.314

 

 

TOTAL                                     (A)

1007.473

1214.106

971.721

 

 

 

 

 

Less

EXPENSES

 

 

 

 

 

Employee related expenses

656.776

632.332

703.493

 

 

Administrative selling other expenses

695.639

856.008

1013.781

 

 

Prior period items

0.000

0.213

0.000

 

 

TOTAL                                     (B)

1352.415

1488.553

1717.274

 

 

 

 

 

Less

PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B)      (C)

(344.942)

(274.447)

(745.553)

 

 

 

 

 

Less

INTEREST FINANCIAL EXPENSES                    (D)

98.308

61.232

92.407

 

 

 

 

 

 

PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D)                               (E)

(443.250)

(335.679)

(837.960)

 

 

 

 

 

Less/ Add

DEPRECIATION/ AMORTISATION                     (F)

151.705

156.665

177.126

 

 

 

 

 

 

PROFIT/ (LOSS) BEFORE TAX (E-F)                  (G)

(594.955)

(492.344)

(1015.086)

 

 

 

 

 

Less

TAX                                                                  (H)

0.609

0.539

22.632

 

 

 

 

 

 

PROFIT/ (LOSS) AFTER TAX (G-H)                   (I)

(595.564)

(492.883)

(1037.718)

 

 

 

 

 

Add

PREVIOUS YEARS’ BALANCE BROUGHT FORWARD

(1502.774)

(1009.891)

27.827

 

 

 

 

 

 

BALANCE CARRIED TO THE B/S

(2098.338)

(1502.774)

(1009.891)

 

 

 

 

 

 

EARNINGS IN FOREIGN CURRENCY

 

 

 

 

 

Other Income

NA

0.000

2.809

 

TOTAL EARNINGS

NA

0.000

2.809

 

 

 

 

 

 

Earnings/ (Loss) Per Share (Rs.)

 

 

 

 

- Basic

(15.23)

(13.17)

(62.11)

 

- Diluted

(15.23)

(13.17)

(62.11)

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2011

31.03.2010

31.03.2009

PAT / Total Income

(%)

(59.11)

(40.60)

(106.79)

 

 

 

 

 

Net Profit Margin

(PBT/Sales)

(%)

(60.67)

(40.60)

(105.47)

 

 

 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)

(26.75)

(15.34)

(44.19)

 

 

 

 

 

Return on Investment (ROI)

(PBT/Networth)

 

(0.74)

(0.66)

(1.52)

 

 

 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 

1.77

3.28

2.45

 

 

 

 

 

Current Ratio

(Current Asset/Current Liability)

 

2.33

1.54

1.61

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Details of Sundry Creditors:

 

Particulars

 

31.03.2011

(Rs. in millions)

31.03.2010

(Rs. in millions)

31.03.2009

(Rs. in millions)

Sundry Creditors

 

 

 

- Creditors due small micro enterprises

--

--

--

- Creditors due others

708.397

1643.239

950.525

Total

708.397

1643.239

950.525

 

BACKGROUND

 

The Company is a registered Stock Broker, Merchant Banker and Portfolio Manager registered with Securities and Exchange Board of India (‘SEBI’). The Company was incorporated on 23rd February 2006 and is a 100% subsidiary of HSBC InvestDirect (India) Limited (formerly known as IL and FS Investsmart Limited).

 

The Company provides stock broking services, predominantly to retail investors, which include broking services on security trading on recognised stock exchanges in India and distribution of financial products, such as units of mutual funds, Initial public offerings, bonds etc. The Company also provides Portfolio management services. The Company holds a Category I Merchant Banking license.

 

During the current year, the Company discontinued its Institutional broking business.

 

OPERATIONS AND OUTLOOK FOR THE CURRENT YEAR:

 

During the financial year 2010-11, the gross income from operations of the Company reduced to Rs.986.000 Millions as compared to Rs.1214.000 Millions in the previous year and the Company incurred a loss before prior period items and tax of Rs.595.000 Millions for the year ended March 31, 2011 as compared to Rs.492.000 Millions incurred in the previous year.

 

Revenues earned out of Equity broking reduced by 13% from Rs.867.000 Millions during financial year 2009-10 to Rs.752.000 Millions during the financial year 2010-11 and income earned from distribution of financial products reduced from Rs.117.000 Millions to Rs.63.000 Millions during the same period. The overall revenues from the retail business have fallen by 13% from Rs.1114.000 Millions to Rs.975.000 Millions. The Company has opened 17,677 new Trading accounts during the year taking the total customers base to 1,57,286 and has also opened 11,050 Depository Participant accounts during the same period.

 

In order to develop centre of excellence in dealing, improved client engagement and providing segmented services, the Company has set up 10 Central Dealing Rooms (CDRs) across the country. In order to pilot the transition from a monoline retail broker to a preferred wealth management service provider for premium customers, the Company has set up 3 LITE Branches in Mumbai. The LITE branch is a branch with no dealing set up and is a sales outlet which will focus on customer acquisition, Sales of wealth products, Sales and referrals of NBFC products, Mortgages.

 

INCREASE IN PAID UP SHARE CAPITAL:

 

During the year, the Company issued 5,078,125 Equity shares of Rs.10 each at a premium of Rs.118/- per share aggregating to Rs.650.000 Millions to HSBC InvestDirect (India) Limited, the Holding Company resulting in increase of equity paid up share capital of the Company from Rs.382.330 Millions to 433.110 Millions.

 

FIXED ASSETS:

Tangible Assets:

v      Leasehold Improvements

v      Office Equipments

v      Data Processing Equipment

v      Electrical Installations

v      Furniture and Fixtures

v      Vehicles

Intangible Assets:

v      Purchased Software

v      Internally Generated Software

v      Trademark Arrangement

v      Goodwill on Business Acquisition

 

 


CMT REPORT (Corruption, Money Laundering & Terrorism]

 

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

 

1]         INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

 

2]         Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

 

3]         Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

 

4]         Record on Financial Crime :

            Charges or conviction registered against subject:                                                  None

 

5]         Records on Violation of Anti-Corruption Laws :

            Charges or investigation registered against subject:                                                          None

 

6]         Records on Int’l Anti-Money Laundering Laws/Standards :

            Charges or investigation registered against subject:                                                          None

 

7]         Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

 

8]         Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

 

9]         Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

 

10]        Press Report :

            No press reports / filings exists on the subject.

 


 

CORPORATE GOVERNANCE

 

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

 

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

 

 

CONTRAVENTION

 

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

 

 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.50.59

UK Pound

1

Rs.80.34

Euro

1

Rs.67.14

 


 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

5

PAID-UP CAPITAL

1~10

5

OPERATING SCALE

1~10

5

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

5

--PROFITABILIRY

1~10

5

--LIQUIDITY

1~10

5

--LEVERAGE

1~10

4

--RESERVES

1~10

5

--CREDIT LINES

1~10

4

--MARGINS

-5~5

--

DEMERIT POINTS

 

 

--BANK CHARGES

YES/NO

NO

--LITIGATION

YES/NO

NO

--OTHER ADVERSE INFORMATION

YES/NO

NO

MERIT POINTS

 

 

--SOLE DISTRIBUTORSHIP

YES/NO

NO

--EXPORT ACTIVITIES

YES/NO

NO

--AFFILIATION

YES/NO

YES

--LISTED

YES/NO

NO

--OTHER MERIT FACTORS

YES/NO

YES

TOTAL

 

43

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 


 

RATING EXPLANATIONS

 

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

-

NB

                                       New Business

-

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.