| 1. The Company has stopped its operation, closed all the Branches,
assigned its loan assets to SBI in 2003-04 and utilized the amount to
repay its dues. The NHB has cancelled the certificate of Registration
in August 2005 and the same was surrendered to them. The Bankers have
also recalled the credit facilities. The other factors viz. loss of Rs.
1824.58 lacs incurred during the year, accumulated loss of Rs.30956.10
lacs as on 31st March 2008, the negative Net Worth of Rs.29456.10 lacs
as on 31.03.2008 have been considered and in the opinion of the
management, the Company lost its status as a going concern. Hence, the
recorded amounts in the financial statements and the classification of
assets and liabilities as on 31st March, 2008 have been adjusted as per
the provisions of Auditing and Assurance Standard (AAS) 16, "Going
Concern" issued by the Institute of Chartered Accountants of India. The
income from operations represents the interest income on fixed deposits
held with Bank. As the Company is not a going concern, generation of
future taxable income is not possible and hence the carrying amount of
deferred tax assets as per Accounting Standard (AS-22) "Accounting for
Taxes on Income", issued by the Institute of Chartered Accountants of
India stands nil as on 31-03-2008.
2. The Company after having prepaid all its deposit liabilities is now
left with the liability of Rs. 305.24 lacs (Previous year Rs 321.08
lacs) representing unclaimed/ unencashed deposits and warrants. The
amount has been fully funded and would be paid as and when claimed by
the depositors.
3. Regarding reconciliation difference of Rs217.33lacs in the old
warrants accounts included in other liabilities account till the year
2006-07, it is felt by the Management that no liability had existed
towards depositors and the difference was on account of inclusion of
cancelled / adjusted warrants the effects of which were considered in
the accounts but continued to appear in the deposit database as
unclaimed. Further there were no claims on the account for the past
three years. Hence the matter was examined and the said liability has
been written off and booked as "Other Income" in the accounts for the
current year 2007-08.
4. The advance tax of Rs. 13.37 crores paid by the Company for the
A.Ys 1995-96 and 1996-97 was refunded together with the interest
thereon of Rs. 12.16 crores by the Income Tax Department consequent of
finalisation of the relative assessments and the same was adjusted in
the books of account of the Company due to last financial year 2006-07.
Out of this total refund amount of Rs. 25.53 crores a sum of Rs. 20
crores was paid to SBI towards part discharge of its interest dues in
the financial year 2006-07. The balance refund amount of Rs. 5.53
crores was paid to SBI towards part discharge of its interest dues in
the current financial year.
5. Suit filed against M/s Acropolis Foundation Pvt. Ltd. in the City
Civil Court at Chennai in June 2003 for recovery of Rs 6.09 lacs
(Including interest of Rs. 2.98 lacs) for non refund of security
deposit in respect of their premises taken on lease by the Company
previously, for housing their erstwhile Chennai Office. The case, which
was originally decreed ex-party, has been restored at the request of
the Defendants. A Counter- Affidavit was filed and the evidences on
behalf of the Company were recorded on 22nd October 2007. Judgment
awaited. An irrevocable power of attorney was given to SBI during the
year 2004-05 to pursue the suit and appropriate the amount against the
Companys dues to the Bank, when the relative decree is obtained.
6. The possession of the office premises at Patna was handed over to
SBI on rent-free basis pending completion of sale formalities. All the
municipal taxes and maintenance charges payable on the building are
borne by SBI. This arrangement was allowed keeping in view the fact
that the Company is using some portion of SBIs office space in Kolkata
for accommodating its head office, for which no rent is charged to the
Company.
7. The Regional Provident Fund Commissioner filed an application
before the Honble Calcutta High Court for stay of operation of the
order passed by them on 4th March 2005 covering settlement of all
issues relating to pension to the employees of the Company. The
application is pending before the Honble High Court. The matter is
sub-judice and as per the managements perception no liability may
devolve on the Company.
8. The fixed assets shown in Schedule-3 representing movable assets at
head office of the company and the premises owned by the Company at
Patna, have been shown under the head "Current Assets, Loans and
Advances", considering the fact that the company is not a going
concern. Old and worn out fixed assets having NIL Book value and no
realizable value discarded / disposed off stands adjusted from gross
block, accumulated depreciation and provision for diminution in the
value of fixed assets.
9. An amount of Rs.4.03 lacs representing credit / excess payments of
EMI in individual loan account (closed accounts) and remittances made
by the branches without full particulars were being held in Unadjusted
Receipts from Borrowers (URB) Account for over three years. Hence, the
Management felt that it is not necessary to keep the said amount in URB
account and the same has been booked as "Other Income".
10. A Special Reserve of Rs.276.25 lacs was created in the books of
the Company in the year 1996-97 (Assessment Year 1997-98) in accordance
with the law laid down in Section 36(1)(viii) of the Income Tax Act,
1961. The said amount of Special Reserve was not
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