| The Directors present the Twentieth Annual Report of the Company along
with Audited Accounts for the year ended March 31, 2008.
Financial Results
(Rs. in Lacs)
Particulars For the year ended
31st March, 31st March,
2008 2007
Profit (Loss) before Tax (1824.58) (481.69)
& Prior period Adjustments
Provision for Tax - -
Prior period adjustments (Net) - 14.38
Profit (Loss) after Tax (1824.58) (467.31)
Transfer from - -
Special Reserve
Balance brought forward - -
from General Reserve
Balance brought forward (29407.77) (28940.46)
from previous year
Appropriations
Adjustment against Special Reserve 276.25 -
Transfer to General Reserve
Proposed Dividend -
Dividend Tax - -
Balance remaining in the
Profit and Loss Account (30956.10) (29407.77)
(30956.10) (29407.77)
Dividend
In the absence of profit, the Directors are unable to recommend any
dividend for the financial year ended 31st March 2008.
Operations
Having regard to the fact that the company lost its "going concern"
status since a long time and that a conscious decision was taken to
stop business operations, its major activities revolved round the
expeditious realisation of the assets /receivables created and
deconstruction of the liabilities/provision contracted / made in the
past and discharging its maintenance function at low cost. As a result
income generated by the company mostly represented the interest earned
on realised funds temporarily parked with the Bank as fixed deposits
and expenses covered the truncated needs of overheads, wages etc. There
is, therefore, no performance indicator to highlight or to make any
normal inter temporal comparison of the companys working results and
other parameters from year to year. However, the net loss of the
company increased during the year from Rs4.67crores in the last year to
Rs18.25crores, as the earnings on realisations from receivables was not
as huge as it was in the previous year. The total income for the year
ended 31st March 2008 was Rs101.98 lacs. The Company paid off a sum of
Rs.5.53 crores to State Bank of India as a portion of its current
interest dues on loans taken from them.
A look at the individual items of the profit and loss account of the
company from year to year would also generally reveal a steady downward
trend indicating that the companys control over administrative
expenses had been quite strict. It would also be worth mentioning that
with a view to taking the benefit of the provisions contained in
Section 41(5) read with Section 72 of the Income Tax Act, 1961, at the
advice of the Companys tax consultants, the item of "Special Reserve"
for Rs. 276.25crores was set off against the brought forward business
loss of the Assessment year 2000-01 with the consequences that the
brought forward loss in profit and loss account was correspondingly
reduced in the current year.
Relocation of the Registered office of the Company
The companys Registered Office was shifted with the approval of the
Board from Jeevan Deep Building, 4th Floor, 1, Middleton Street,
Kolkata - 700 071 with effect from 2nd July 2007 to 4th Floor, SBI
Ballygunge Branch Premises, 50A, Gariahat Road, Kolkata 700 019, as the
space offered by the State Bank of India was urgently required by them
for their own purpose. The new space, which was warehoused by the Bank
has also been allowed to be used by The Company free of rent. The
change of address which was appropriately notified through newspaper
for public information was also advised suitably to the Registrar of
Companies, West Bengal, the Stock Exchanges, National Housing Bank
(NHB) etc.
Net Worth of the Company
The Company lost its status, as a going concern in the year 2003-04 and
there has been no change in the position since then. The net worth of
the Company stands fully eroded and it is negative at Rs29456.10 lacs
as at 31st March 2008.
Public Deposits
The Company during the year under review did not accept any deposit
from the public within the meaning of section 58A of the Companies Act,
1956 or the rules made thereunder. The Companys liabilities on account
of unclaimed public deposits including unencashed Refund/Interest
warrants stood at Rs. 305.24 lacs during the current year (reduced from
Rs. 321.08lakhs in the last year). The amount had been fully funded.
Credit Rating
Since the Public Deposits Scheme stood discontinued, credit rating
thereof was n6t required.
Various legal issues
(i) Though the Company settled all issues relating to the payment of
pension of its employees with the Regional Provident Fund Commissioner
(RPFC) on the basis of an order passed by the Honble Calcutta High
Court .during the last year the former filed a stay application against
the same order and the decision thereon is still pending. The company
feels that no liability is likely to devolve on it on this score.
(ii) Following the inspection of the companys books by the Department
of Companies Affairs under Section 209A of the Complaint Act 1956 the
Company and its Directors received show-cause notices for violation of
provisions under section 628 read with section 211, 217(3), Section
301/299,etc. The Directors filed petitions/suits under section 633 of
the Companies Act 1956, and the Calcutta High Court in term of an
order, exonerated the concerned Directors in almost all the cases.
(iii) The cases filed by the Law Enforcing Agencies viz., Police & CBI
in regard to the frauds to the extent of Rs3.90crores which took place
during the earlier years are in the various stages of evidence.
New Development
(i) The companys Patna property was offered for sale on completion of
all connected formalities in this behalf and the State Bank of India
was found to be the only intending buyer. However, State Bank of India
required that the original "Agreement for Sale" executed at the time of
acquiring the property to be converted into registered sale deed before
transferring the same to them. When the company approached the
Registrar it came to light that Income Tax authorities had clamped a
general attachment order on all properties belonging to the original
seller notwithstanding that "Agreement for Sale" was subsisting at the
material time. However, with the co- operation of the seller and with
the active assistance of SBI Patna local office, the company has been
advised that the attachment order has been vacated and arrangements are
in hand to effect transfer and registration of the property soon.
(ii) The company received a legal notice from its only secured creditor
viz., State Bank of India demanding full payment of their dues to the
latter aggregating Rs. 316.38 crores including interest upto
31.03.2008. The company sent a suitable reply stating its inability to
make refund of the entire amount because of its severe financial
distress. However, a payment of Rs. 7.00 crores on account of Interest
dues has since been made in response to the aforesaid notice.
Corporate Governance
The report on Corporate Governance as required under clause 49 of the
Listing Agreement with Stock Exchanges together with a Certificate from
the Companys Auditors confirming compliance is set out as a part of
this Annual Report.
Management Discussion & Analysis Report
As per the requirement of the Listing Agreement with Stock Exchanges, a
separate report on Management Discussion & Analysis for the year under
review is attached to this report.
Directors
During the year, Shri RK.Bhattacharjee, Chairman & Director who retired
on 18th April,2008 was re-appointed on 19th April,2008 as nominated by
State Bank of India. Shri Ashok Mukand, nominee Director of SBI
consequent upon his transfer on promotion, resigned from the Board on
the 16th January 2008 and in his stead Shri Jayanta Kumar Sinha Chief
General Manager, State Bank of India, Kolkata LHO, was nominated by SBI
as Director from 17th January 2008. The Board places on record its
appreciation for the valuable services rendered by Shri Mukand during
his tenure as Director of the Company. Shri M. K. Ray Chaudhuri who
retired by rotation on the date of the last AGM held on 6th June 2007
was reappointed as Director on the Board from the same date. Shri K.
Rama Mohan Rao Managing Director retired from the Board on 18th
December 2007 on his being repatriated to his parent Organisation i.e.,
State Bank of India and Shri G.I.Mondal on deputation from State Bank
of India has been appointed in his stead as Managing Director from 19th
December 2007.
The Board placed its appreciation for the valuable service rendered by
Shri Rao as Managing Director of the Company. None of the Directors
(both Executive and Non- Executive) are holding any shares (both own or
held by / for other persons on beneficial basis) in the Company. Except
the above, there has been no change in the composition of the Board of
Directors of the Company since the last report of the Directors on 7th
May 2007. The Directors of the Company are persons of eminence having
vast and varied experience in the field of Banking, Finance and other
allied areas.
The Board confirms that none of the Directors of the Company is
disqualified from being appointed as Director in terms of section 274
(1) (g) of the Companies Act, 1956 and necessary declaration in this
regard has been obtained from them.
Listing Particulars
The Companys shares are listed on the Stock Exchanges at Kolkata,
Mumbai and at National Stock Exchange of India Limited, Mumbai. The
annual Listing fees in respect of all the Stock Exchanges have been
paid upto date. The trading of shares continues to stand suspended by
the Stock Exchanges.
As continuation of listing of the shares with the above Stock Exchanges
yields no benefits either to the investors or to the Company, the
Directors intend delisting of the shares from these Stock Exchanges,
for which a suitable Resolution has been proposed for the Members
approval.
Directors Responsibility Statement
Pursuant to Section 217 (2AA) of the Companies Act, 1956 Directors to
the best of their knowledge and belief confirm that:
(i) in the preparation of the Annual Accounts for the financial year
ended 31st March, 2008, all the applicable accounting standards
prescribed by the Institute of Chartered Accountants of India have been
followed along with proper explanation relating to material departures,
if any.
(ii) the Directors have adopted such accounting policies and have
applied them consistently and have made judgements and estimates that
are 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 loss of the Company for that period.
(iii) the Directors have taken proper and sufficient care of 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) the Directors have prepared the accounts for the financial year
ended 31st March, 2008 on the basis of the fact that the Company is no
longer a going concern, as the operations of the Company were
discontinued in the year 2003-2004.
Investor Services
Company has an Investor Grievance Committee to specially look into the
redress of investor grievances and the queries are dealt with
expeditiously. The Company continues to be a client of National
Securities Depository Limited and Central Depository Services (India)
Limited and the ISIN no. allotted to the Companys shares is lNE 627
A01012.
Future Outlook
It is very unlikely that the Company in its present form, would be able
to rehabilitate itself in the near future. With the snowballing of the
losses from year to year and the total erosion of its net worth, the
Company lost its status as a going concern and there is every
possibility that sooner or later the Company would be taken forward to
its logical end. In the absence of any concrete plan of financial and
organisational restructuring and without any ray of hope of
recommencement of its business operations the future outlook of the
company seems bleak. The action of the creditor-bank recalling their
entire loan granted to the company also further aggravated the issue.
Auditors
The Auditors M/s S.N. Mukherji & Co. will retire at the ensuing Annual
General Meeting and being eligible, offer themselves for re-
appointment.
M/s S.N. Mukherji & Co., have informed the Company that their
appointment if made, would be in conformity with the provisions of
Section 224 (IB) of the Companies Act, 1956. The Directors recommend
their appointment.
Auditors Observations
The observations made by the Auditors in their Report have been fully
explained in the Notes to the Accounts. However, our further comments
on the Auditors Report are as under:
i) Para 3 of Auditors Report
Since the Company ceased to be operational and is also not a going
concern from the year 2003-04, the figures for "accumulated losses" and
"negative net worth" further deteriorated because of losses sustained
by the Company during the current year too, as explained in Note No. 1
(Schedule No. 13). It is not possible for the company with its current
limitation, to alter the position.
ii) Para (i) (c) of Annexure to Auditors Report
Please refer to our remarks in item (i) above. In addition, as
indicated in Note 8 of the Notes to the Accounts, the treatment of
fixed assets has been done on the basis of the fact that the Company is
not a going concern. The Auditors statement reflects the factual
position.
iii) Para (vii) of Annexure to Auditors Report
The Company stopped its operations, closed its branches, discontinued
its loans and deposits businesses by virtue of the fact that it is not
a going concern. Hence the need for putting in place a separate
internal audit system has not been felt. However, sufficient control
mechanism is in place commensurate with the present level of operations
of the Company.
iv) Para (x) of Annexure to Auditors Report
The Auditors statement reflects the factual position.
v) Para (xii) of Annexure to Auditors Report
As the Company has been incurring losses on a continuing basis and
stopped all business operations and is also not a going concern,
sufficient cash was not available to enable it to repay its dues to the
Bank fully. However the Company made part payment of interest dues of
this year from out of the tax refunds received in the previous year. In
2006-2007 the total amount of tax-refund (with interest) amounted to
Rs.25.53 corers and the interest on the loan according to our estimate
was Rs.66.74 crores. Hence, the company would not have been able to
meet the full payment obligation in any case because of shortage of
cash. Besides, a reference is invited to para (x) of the Annexure to
Auditors Report. As the Income Tax Appellate Tribunals decision in
our favour was likely to be contested in the Supreme Court with the
permission of the "Committee on Dispute" it was necessary for us to
retain some contingency fund with us in the event the former had
allowed the matter and the Supreme Court verdict went against the
Company. The amount had, however, been used to make part-payment of the
interest dues to the bank during the current year as stated earlier
after the Committee on Dispute withheld their permission. A further
amount of Rs. 7.00 crores has also been paid recent to SBI to reduce
the interest dues as stated earlier.
Statutory Information
Since the Company does not own any manufacturing facility, the
provisions of the Companies (Disclosure of Particulars in the Report of
the Board of Directors) Rules, 1988 are not applicable. There is no
foreign exchange earning and outgo.
Particulars of Employees
At present the Company does not have any employees working with them.
Appreciation
The Directors wish to place on record their appreciation for the
valuable support received from the State Bank of India. They also wish
to place on record their gratitude to the National Housing Bank for
their very valuable support to the Company. The Directors would also
like to place on record their appreciation and gratitude to its
shareholders who are with the Company during its bad days.
On behalf of the Board of Directors
Place: Kolkata P. K. Bhattacharjee
Dated: 16th July, 2008 Chairman |