INVESTMENT Examples of notes to accounts relating to investments are given below : Investment of subsidiaries ========================== 1. The accumulated losses incurred by a subsidiary company ______________ Ltd. amount to Rs. _____________ lacs. This figure is in excess of the subsidiary's capital amounting to Rs. _________ lacs. No provision has been made in the accounts for the diminution in the value of company's investment in ___________ Limited amounting to Rs. ________ lacs which continues to appear at cost as before. Attention is invited to the statement under Section 212 of the Companies Act, 1956. 2. Out of the investments made in the subsidiary company ________________ Equity Shares of the subsidiary company are in the dispute. The company has taken appropriate legal steps in the matter. 3. The company has an investment of Rs. ________ lacs in __________ Ltd., ______________. The Company has an investment of Rs. _________ lacs in ________ Both _________ and _________ have incurred substantial losses but having regard to the long term involvement of the company in _______________ and _______________, no provision has been made for possible losses which may arise on these accounts. 4. The Company has disposed of on ____________ its entire holdings except 10 shares in X Limited at Rs. __________ per shares to Shri A upon the terms and conditions approved by an Ordinary Resolution passed at the Extraordinary General meting of the company held on ______________ and consequently it has creased to be a subsidiary of the company. Share price has been since reivsed to Rs. _________ pursuant to the terms of sale. 5. The management as a measure of abundant caution considers that the investments in shares of X Limited, a subsidiary of the Company, has no realisable value and the loan given to it is doubtful of recovery. Necessary provision has been made in this respect in the accounts. 6. In the opinion of the Board, the investment of Rs. _________ (Previous Year Rs. ______________) in a subsidiary may not hav the same value on realisation in the ordinary course of business. No specific provision has been made in view of the available reserves. 7. No provision has been made in the accounts : (a) For losses incurred by the A Ltd. subsidiary up to 31st March, ____________ amounting to Rs. _________. (b) For the depletion in the value of the investments of Rs. _____ and also for the counter-guarantees given to Bankers for cash credit and bonding facilities extended to the Subsidiary company of Rs. _________. 8. The Company has an investment of Rs. ________ crore and Rs. __________ in the Share capital of ABC Limited, and XYZ Leasings Ltd., wholly owned subsidiary companies. Loans to these subsidiary companies of Rs. __________ crores and Rs. ________ Crores respectively receivable from Banks and financial institutions of Rs. __________ Crores aggregate to Rs. _________ Crores. The losses of these companies, exceed their paid up capital and reserves of the company in both the said companies, no provision has been made in the Accounts for the probable loss that may arise. Non-provision for diminution in the value of investments ======================================================== 1. No provision has been made for the diminution in the value of the investment in ________ limited shown at original cost of Rs. _________ although the accumulated losses of that company have exceeded its shareholders funds. 2. The company has an investment of Rs. ________ lacs in A, B, C Ltd. The compnay has an investment of Rs. _______ lacs in X, Y, Z Ltd. Both ABC and XYZ have incurred substantial losses but having regard to the long term involvement of the compnay in ABC and XYZ, no provision has been made for possible losses which may arise on these accounts. 3. XYZ Ltd. has upto 31st July ____________ made substantial losses exceeding its share capital and reserve. The company has investment of Rs. ___________ lacs in XYZ and __________. The company estimates that no loss will arise out of these items and, therefore, no provision has been made. 4. There is a contingency of capital loss on account of company's investment amounting to Rs.-in the Shares of A Ltd. B Limited and C Ltd. since the entire undertaking of these Companies have been nationnalised. The amount of such loss could not be ascertained and therefore not provided for. 5. The value of the company's investment in _________________ limited has considerably eroded due to continued losses of the company over the past few years. No provision has, however, been made in accounts in view of available reserves. 6. The investment has depreciated to the extent of Rs. ________ (Previous year Rs. ___________) being the difference between the cost and market price as shown in the Balance Shet for which no provision is made. 7. No provision has been made in respect of the book value and the market value of quoted investments as disclosd in schedule __________ as also for the estimated diminution of Rs. _____________ (Previous year Rs. __________) in the value of certain unquoted investment. The Directors are of the opinion that the diminution of value of quoted investment is not permanent and there is estimated appreciation of Rs. _________) (Previous year Rs._____) in the value of certain unquoted investments. Moreover, there is an amount of Rs. _______ )Previous year Rs. ______) in the Reserve for Depreciation of Investments. Investment in Partnership Firms =============================== 1. Particulars of investment in partnership firms is to be given on the balance sheet as under : ---------------------------------------------------------------------- Name of the firm Partners Share Capital ---------------------------------------------------------------------- (a) ABC Enterprises A 50% 50,000 B 25% 25,000 C 25% 25,000 (b) XYZ Enterprises D 50% 25,000 E 50% 25,000 ---------------------------------------------------------------------- 2. The Company was a partner in the firm M/s. ABC with effect from 1st January, ___________, with the other two partners, X Limited,and Y Pvt. Limited. The said two partners retired from the patnership with effect from 31st May, _________. The Company continued to carry on the business as going concern as the sole proprietor which business was carried on by partnership firm of M/s. ABC in terms of the resolution of the members passed at the Extraodinary General Meting held on 3rd June, ______. 3. Profit and Loss will be shared in proportion to agreed capital. The Company has paid Rs. _______________ towards its share of capital upto 31st March, ________. 4. The company has retired from the partnership firms of M/s. __________, in the business of __________ during the Calendar year ____________. 5. During the year, M/s. _______________ a partnership firm, in which the company was one of the partners, has been dissolved. The accounts among the partners have since been settled. 6. Share of loss (previous year profit) from partnership business for the year ended 31 December 2000 is as follows : 2000_______ 19______ Rupees Rupees From M/s. ____________ ___________ (Profit) ___________ From M/s. ____________ ___________ (Profit) ___________ 7. The Company is a partner in a partnership firm namely M/s. ABC which came into existence as per partnership Deed dated 23-3_______. 8. Information in respect of partnership Firms in which the Company is a partner : (a) ABC Co., Partnership Firm. Name of Partners Share of Profit Capital (i) _____________ Limited ______________ _______________% (ii) Shri________________ ______________ _______________% (iii) Shri________________ ______________ _______________% (iv) Shri________________ ______________ _______________% (v) Shri________________ ______________ _______________% (vi) Shri________________ ______________ _______________% (a) BC Co., Partnership Firm. (i) ________________ Ltd. ______________ _______________% (ii) Shri________________ ______________ _______________% (iii) Shri________________ ______________ _______________% (iv) Shri________________ ______________ _______________% (v) Shri________________ ______________ _______________% (vi) Shri________________ ______________ _______________% 9. The Partnership firm of M/s. ABC, Delhi wherein the company was a partner has been dissolved. The partnership firm has not done any business duirng the accounting periods ended on 30th June, __________, 30th June ________ and 30th June ________. 10. The particulars of the firm __________________ in which the company is a partner are not shown as the firm is under dissolution since 1st July, ________. Investments not transferred to company's name, pending formalities. =================================================================== 1. Share Deposits include Rs. _____________ paid to M/s. XYZ Ltd. and Rs. _______ paid to M/s. ABC Ltd. as Equity share capital contribution pending allotment of shares by the respective companies. 2. Investment are held by the companies in its own name except to the extent of exemption granted under Section 49 of the companies Act, 1956. 3.(a) Investment ___________ units of Master-gain '92 and _________ Units of SBI Magnum'93 are yet to be transfered in the name of the company. (b) _____________ Units of SBI Magnum 93 and _________ units of SBI magnum Express are under lien with state bank of India for secrity of Demand Loan. 4. Certain shares purchased in 2000_________ have not yet ben transferred to the name of the company. 5. Equity shares and Bonds of the book vlaue of Rs. ________ have not yet been registered in the name of the company as the transfers are under objection. 6. Investments include certain shares aggregating Rupees _________ crores which have not been registered in the name of the Bank due to certain disputes and in respect of which applications are being made to the Company Law Board. 7. All the Shares have been held by the Company in its own name except those shown in the Balance-sheet as lodged with the various Banks and shown in the Register maintained under-section 49 of the Companies Act. Miscellaneous ============= 1. The corporation's investment account includes Rs. _____________ in the equity sahres and preference shares of ABC Ltd. In addition, under the Loans & Advances an amount of Rs. _____________ in also outstanding in respect of transactions related thereto including Rs. ___________ paid to Sri _____________ and Rs. ___________ paid to Smt. ____________ and Sri ___________ towards purchase of shares in the Company. The Company is in the process of being wound up under the Orders passed by Board of Industrial Finance & reconstruction (BIFR). Since the company does not posses any unencumbered assets which may on realisation yield any amount for payment/return either to unsecured creditors or its contributors, it has been decided to write off the entire amount of Rs. _________. 2. During the period _________ Corporation has purchased _________ shares of Rs. ____/- each fully paid up and ____________ 13.5% Redeemable Cumulative Preference Shares of Rs. ____/- each fully paid in ABC India Ltd.from XYZ Developments Ltd. and their nominees at the rate of 10 paise per equity share of Rs. _____/- and Rs. ____/- per preference shares of Rs. ____/- at a total purchase consideration of Rs. ________ Market Value in case of investments amounting to Rs. __________ in ABC India Ltd. is not available. 3. During the year the company sold the following investments at a consideration of Rs. _______ Lacs : Book Value Rs./Lacs (a) _________ Equity shares @ Rs. ___/- each fully paid up in ACL Finance & Investments Ltd. __________ (b) _________ Ordinary shares of One-Singapore $ each fully paid in ABC East Computers Pvt.Ltd. __________ 4. The share certificates are not available for verification by the Auditors. The shares were forfeited by the company inspite of full payment. This is being pursued. 5. During the year company has purchased and sold _________ Equity shares of ABC Ltd. __________ Equity Shares of XYZ Industries Ltd. __________ Equity Shares of MNO Ltd. ________ Equity Shares of KP Industries Ltd. _____________ Equity shares of Associated Cement Co. Ltd. ____________ Equity Shares of Grasim Industries Ltd., ____________ Equity shares of Tata Iron & Steel Col. Ltd. ________ Equity shars of Dunlop India Ltd. ________ Equity shares of BFL Software Ltd., _________ Equity Shars of G.K. W. Ltd. 6. In respect of investments in XYZ Ltd. shares, the company is still to obtain duplicate share certificates in respect of _____________ equity shares of Rs. ________/- each, the original transfer deeds having been destroyed in the fire on 9th June, _______. 7. During the period _________ corporation has purchased __________ fully paid equity shres of Rs. ___/- each of ABC Ltd. from XYZ Pvt. Ltd. and its nominees at a total purchase consideration of Rs. ______. The cost of stamp papers etc. amounting to Rs. _________ has also been borne by the Corporation and the same has been debited to investment Account. 8. The details of the Company-wise investments and loans to companies are not disclosed in view of the exemption granted by the Company Law Board vide order No. ________ dated ________. *******