DIRECTORS
To the Members,
You all are aware that the Hon'ble High Court of Bombay has appointed a Special
Committee to take charge of the management and affairs of the Company vide its Order dated
12th March, 2004. With the permission of the Special Committee, your Directors
are presenting the 26th Annual Report of the Company with the Audited
Statement of Accounts for the financial year ended 31st March, 2013.
1. Financial Results
The Financial Results of the Company for the year under review are summarized for your
consideration:-
|
31.03.2013 |
31.03.2012 |
Gross Income |
143.98 |
117.65 |
Expenditure |
239.27 |
302.10 |
Write-offs |
6125.58 |
1753.59 |
Profit / (Loss) for the year before tax |
(6220.87) |
(1938.04) |
Profit / (Loss) for the year after tax |
(6220.87) |
(1938.04) |
Balance of (Loss) brought forward |
34527.34 |
32590.76 |
Income Tax refund of earlier years |
0.00 |
1.46 |
Balance of (Loss) carried forward |
(40748.21) |
(34527.34) |
2. Dividend
In view of the losses the Directors have not recommended any Dividend for the year
ended 31st March, 2013.
3. Management Discussion and Analysis
You are aware that the Company is functioning under the management of the Special
Committee appointed by the Hon'ble High Court of Bombay instead of Official Liquidator in
Company Petition No. 1017/2002 vide Order dated 12th March 2004. In pursuance
to Order dated 12th April, 2004 passed by the Hon'ble High Court of Bombay, the
Board of Directors are working under the superintendence of the Special Committee.
The major thrust of the Special Committee is to recover the dues from defaulters of the
Company, reduction of expenses and formulate scheme of the repayment to the fixed deposit
holders, other secured and unsecured creditors.
The Special Committee pursuant to the direction of the Hon'ble High Court is
concentrating on recoveries and in addition to pursuing the legal recourse, is calling the
defaulters for settlement of their dues with a view to expedite the recovery.
The Company is currently not engaged in business of Non-Banking Finance Company (NBFC)
w.e.f. 14th May, 1998 as per restrictions imposed by Reserve Bank of India and
the thrust is on recovery of its dues and repayment of its liability in a phased manner.
The Company, under the direction of the Special Committee appointed by the Hon'ble High
Court of Bombay, is complying with all the legal requirements of the various Acts
applicable including Listing Agreement, The Companies Act, 1956 and Reserve Bank of India
like submission of various forms and returns to Stock Exchanges, Registrar of Companies
and Reserve Bank of India.
The Hon'ble High Court of Bombay reviewed the working of the Company under the
management of the Special Committee and vide order dated 14th March, 2007
appraised that the Special Committee has acted in earnest and has made best possible
efforts to effectuate the purpose of the constitution of the Special Committee and that a
substantial amount of work has been done by the Special Committee towards realization of
the outstandings, settlement of dues of the Secured Creditors, Debenture holders and Fixed
deposit holders. The Special Committee comprises of Mr. Justice V. R. Datar (Retd. Judge
of High Court of Bombay) as Chairman, Mr. S. C. Malhotra I.P.S., D.G.P. (Retd.)
Maharashtra, Mr. P. K. Bansal, I.P.S., D.G.P. (Retd.), Gujarat as Members.
The Special Committee has addressed to all class of creditors i.e. Banks and Financial
Institutions, Debenture Holders and Fixed deposit holders by formulating scheme for
repayment based on the availability of funds from the debtors of the Company.
Adequacy of Internal Control:
Considering the size and nature of activities, the Company has adequate Internal
Control System covering both accounting and administrative control. In addition, the
internal audit is carried out periodically. The management is ensuring an effective
internal control system so that the financial statements and reports give a true and fair
view.
Human Resources / Industrial Relation:
Inspite of Company facing financial difficulties, the morale of the employees remained
high. The organization culture and the commitment of the Company to its people reflect in
the motivation levels and the acknowledgement of its employees.
Future Outlook:
Pursuant to the responsibility vested with Special Committee with regard to formulation
of Scheme for all class of creditors i.e. Banks and Financial Institutions, Debenture
Holders and Fixed Deposit Holders, the management is pleased to inform that under
superintendence of the Special Committee, all above referred class of creditors have been
addressed with regard to its liability as referred herein separately. The efforts are
being made to take further initiative to recover dues from debtors of company and redress
the grievances of its creditors.
4. Fixed Deposit
The Company has neither accepted fresh deposits nor renewed the existing deposits
during the year under review. Outstanding deposits from public as on 31-3-2013 stood at Rs.11.00
Crore (Previous Year Rs.111.25 Crore).
Pursuance to the responsibility vested by the Hon'ble High Court of Bombay, the Special
Committee alongwith the Learned Amicus Curiae (appointed by the Hon'ble High Court of
Bombay vide its order dated 14/03/2007), formulated comprehensive Scheme of Repayment to
all class and categories of fixed deposit holders on the basis of availability of fund and
future recoveries from the debtors of the company. The Hon'ble High Court of Bombay vide
its order dated 09th February, 2012 has sanctioned the Scheme of Repayment to
Fixed Deposit Holders. The repayment in pursuance of the scheme to the deposit holders
shall be made category-wise as under:
Principal deposit amount upto Rs.10,000/- @55%, from Rs.10,001/- to Rs.25,000/- - @45%,
Rs.25,001/- to Rs.50,000/- - @35%, Rs.50,001/- to Rs.1,00,000/- -@30% and Rs.1,00,001/-
and above - @25%.
The scheme does not provide for payment of any interest on any category of fixed
deposits. The repayment against fixed deposit shall be made only to the extent of
percentage approved by the Hon'ble High Court of Bombay after deducting any amount, if
already partly repaid. However, if any fixed deposit has been paid in excess of its
eligibility amount under the scheme, depositor shall not be paid any further amount.
The Company invited claims from Fixed Deposit Holders through an advertisement in
leading newspapers in 39 cities in 19 states. The Fixed Deposit Holders had
been advised to lodge their claims on or before 16th May, 2012. The
Special Committee has commenced payment after adjudication of claims on the basis of
availability of funds and in terms of the Scheme.
Inspite of concerted efforts under directions of Special Committee to make aware the
depositors in large about the Scheme approved by Hon'ble High Court of Bombay, the number
of claims received from depositors are much less in numbers, but are within range of funds
available. The Special Committee has also regularly informed all authorities such as RBI,
SEBI, Registrar of Companies, Ministry of Company Affairs, various courts, etc. about the
Scheme of payment to depositors approved by Hon'ble High Court of Bombay. The
communication with above authorities has enabled large number of depositors to lodge
claims with Special Committee for adjudication. The details of Scheme is also available on
website of the company under Annual Report. Eventhough the Special Committee had fixed
last date for submission of claims as 16th May, 2012, the company was directed
to accept claims for extended period. It is more than 1 (one) year of announcement of
Scheme for Fixed Deposit Holders to lodge claim, there are comparatively less number of
claims received. All claims received during the period have been paid in terms of the
Scheme.
It is pertinent to inform that pursuant to the Scheme of repayment to Fixed Deposit
Holders sanctioned by Hon'ble High Court of Bombay vide order dated 9th
February, 2012 to repay part of principal amount as enumerated above. Consequent to the
order, the principal liability of outstanding toward Fixed Deposits is reduced by Rs.63.91
crores. This amount has been transferred to Capital Reserve. The resultant liability
then was reduced to Rs.47.34 crores. After due deligence, it was observed that the claims
of large number of Fixed Deposit Holders, due from the year 1999 have not been lodged with
the company. Therefore, it is thought fit and proper to reflect the liability of Fixed
Deposit Holders within the strength and estimates of claims likely to be received and on
the basis of estimated inflow of funds. In view of this, the Fixed Deposit liability to
the tune of Rs.36.34 crores has been reduced and remitted to reserves.
5. Banks & Financial Institutions borrowings
The Directors wish to inform that only one institutional creditor i.e. Gujarat State
Financial Corporation (GSFC) has outstanding term loan amounting to Rs.670.98 lacs, for
which efforts are being made by the Special Committee to arrive at One Time Settlement in
tandem with settlement with other Banks and Financial Institutions. In view of this, the
liability of GSFC works out to Rs.60 lacs and the balance has been accordingly
transferred to remission of liabilities. The Special Committee has submitted its report on
repayment to GSFC to Hon'ble High Court of Bombay and directions of Hon'ble High Court of
Bombay are awaited.
6. Debentures
As regards the liability of Non-convertible debentures, the Hon'ble High Court of
Bombay vide its order dated 27/09/2010 in Company Petition No. 926 of 2009 u/s 391 of the
Companies Act, 1956 has approved Scheme of Compromise with Public Issue Debenture Holders.
The claims of debenture holders received so far have been satisfied as per terms and
conditions of the Scheme approved by Hon'ble High Court of Bombay.
7. Statutory Information
There were no employees during the year ended 31st March, 2013 in respect of
whom the particulars are required to be disclosed with reference to Section 217(2A) of the
Companies Act, 1956.
The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,
1988, require disclosure of particulars regarding Conservation of Energy in Form A and
Technology Absorption in Form
B prescribed by the rules. The Company, not being a manufacturing company is advised
that Form A and B are not applicable to it. The Company had no Foreign Exchange earnings
and outgoings during the year under review.
8. Directors
The Government of India, Ministry of Corporate Affairs vide letter dated 26/12/2011
approved the re-appointment of Shri Pankaj R. Desai as Managing Director for a period of 5
(five) years w.e.f. 1/11/2011 u/s 269, 198/309, 310, 387 and 637AA of the Companies
Act, 1956.
Shri Puran Chandra Soni, Director of the Company retires by rotation at the ensuing
Annual General Meeting and being eligible, offers himself for re-appointment.
9. Directors' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with
respect to Directors' Responsibility Statement, it is hereby confirmed:
(i) That in the preparation of the accounts for the financial year ended 31st
March, 2013, the applicable accounting standards have been followed along with proper
explanation relating to material departures;
(ii) That the Directors have selected such accounting policies and applied them
consistently and made judgements and estimates that were reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit or loss of the Company for the year under review;
(iii) That the Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 1956
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
(iv) That the Directors have prepared the accounts for the financial year ended 31st
March, 2013 on a going concern basis.
10. Auditors' Observations
The observations of the Auditors are in the nature of general disclosures, which read
together with the accounting policies and the relevant notes to the accounts, are
self-explanatory.
11. Auditors
The members are requested to appoint Auditors and fix their remuneration.
12. Corporate Governance
Pursuant to the revised Clause 49 of the Listing Agreement, your Company has taken
adequate steps to ensure that all mandatory provisions of Corporate Governance as
prescribed under the Listing Agreement of the Stock Exchanges with which the Company is
listed are complied with.
A separate report on Corporate Governance and the Auditor's Certificate on its
compliance are annexed hereto and forms part of this Annual Report.
13. Acknowledgement
The Board wishes to express its deep appreciation to the Banks and Financial
Institutions and various other agencies for their co-operation and to all staff members
for the efficient and loyal services rendered by them.
|
For and on behalf of the Board |
Place : Mumbai |
(Basant Bhoruka) |
Date : 14th May, 2013. |
Chairman |
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