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Directors Report of CFL Capital Financial Services Ltd.

Mar 31, 2015

The Directors hereby present their Thirtieth Annual Report together with the Audited Financial Statements of the Company for the year ended 31ot March 2015.

FINANCIAL RESULTS

(Rs. in Lakhs)

For the For the year ended year ended 31-3-2015 31-3-2014

Gross Income 108 43

Less: Expenditure 6678 5803

Less: Depreciation 5 6

Gross Profit/(Loss) (6575) (5766)

Less Exceptional items 109 50

Profit/(Loss) before tax (6466) (5716)

Tax Expense relating to earlier years 76 -

Profit/(Loss) after tax (6542) (5716)

Add Depreciation of earlier years 2 -

Profit/(Loss) after Depreciation for (6544) (5716) earlier years

Add Balance brought forward from (78640) (72924) earlier years

Loss carried to Balance Sheet (85184) (78640)

In view of the losses the question of transfer of any amount to reserves does not arise.

DIVIDEND

In view of the continued losses, your Directors regret their inability to recommend any dividend on the Preference or Equity Shares.

INDUSTRY STRUCTURE, OPERATIONS AND DEVELOPMENT

There was improvement in the economy especially due to the growth of the services sector and a moderate growth in the manufacturing sector which resulted in improved GDP compared to the previous year with the inflation in moderate terms towards the later part of the year which helped fundamentally strong financial companies to register growth.

However, your Company could not cash in on the above positive background as it could not engage in any significant business activity primarily due to the cancellation of the Certificate of Registration as a Non-Banking Financial Company by the Reserve Bank of India and difficulty in entering into new business of non- banking non finance due to lack of funds and consequently your Company does not fall under any industry structure. The Company however has financial services as its main activity in its Memorandum of Association. The Board of Directors have, in the absence of the required financial support from the Banks and also due to ongoing recovery suits filed by them before various Debt Recovery Tribunals, have not been able to implement any viable Business Plan. This has resulted in continued losses and caused a tremendous pressure on the Company to meet operational expenses and payment of liabilities.

The Debt Recovery Tribunals have passed decrees in favors of the Banks and Financial Institutions in most of the cases filed by them for realization of their outstanding dues. Pursuant thereto, Recovery Officers have taken over possession of the Company's properties, charged to these Banks and Financial Institutions and have also disposed them off except 3 properties.

OPPORTUNITIES, THREATS, RISKS, CONCERNS, PERFORMANCE AND OUTLOOK

Though there is scope and opportunity for the Company to engage in constructive and profitable business activities in view of its experience and the promising outlook in the economy but lack of financial resources is preventing it from taking up any new measures to revive it. There is therefore a great amount of uncertainly regarding future outlook of the Company though your Directors are striving hard to take effective steps. Acute shortage of funds faced by the Company in the past is likely to continue at least in the near future unless there is capital infusion coupled with a restructuring exercise. The accumulated losses is a cause for concern which dissuades stake holders from participating in a restructuring exercise

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has in place an established internal control system designed to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances. Self certification exercise is also conducted by which senior management certifies effectiveness of the internal control system of the Company. Internal Audit has been conducted throughout the organization by qualified Internal Auditors. Findings of the internal Audit Report are reviewed by the top Management and by the Audit Committee of the Board and proper follow up action are ensured wherever required. The Statutory Auditors have evaluated the system of internal controls of the Company and they have reported that the same are adequate and commensurate with the size of the Company and nature of its business.

DISCUSSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONS

Your attention is drawn specifically to the issues mentioned hereinbefore under the head 'Industry Structure, Operations and Development' and to the comments under the head 'Opportunities, Threats, Risks, Concerns, Performance and Outlook' hereinbefore. Your Company's financial position is under extreme stress and needs a concerted effort from creditors, shareholders and third parties for any significant positive turnaround to emerge in the long run.

Subsidiary Company

The Company has prepared a Consolidated Financial Statement of the Company and its subsidiary namely Samudra Securities Limited in the form and manner as that of the Company in accordance with the provisions of Section 129 (3) of the Companies Act, 2013, the Rules made there under and in compliance with the applicable accounting standards and the listing agreement with the Stock Exchanges which has been duly audited by the Statutory Auditors of the Company. The Consolidated Financial Statement form part of this Report and the same shall be laid before the Annual General Meeting while laying the financial statements of the Company. A Report on the performance and financial position of the Subsidiary Company in form AOC-1 forms a part of the Consolidated Financial Statement

In terms of Clause 49 of the Listing Agreements with the Stock Exchanges Samudra Securities Limited is a material subsidiary. As per the aforesaid Clause 49 the policy of the Company for determining material subsidiaries is posted on the website of the Company and may also be accessed at the link http://cflltd.in

Vigil Mechanism Policy/Whistle Blower Policy

In compliance with the provisions of Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has framed a vigil mechanism policy and system of vigil mechanism to deal with instances of fraud and mismanagement, if any, and concerns about violation of Company's policies. The details of the Vigil Mechanism and Whistle Blower Policy are also posted on the website of the Company and may be accessed at the link http://cflltd.in

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Considering the nature of your Company's activities during the year under review your Company did not consume energy of any significant level nor there was much scope for taking any measures for energy conservation, research and development, technology absorption, and making any additional investment for the above purposes and no comment is made in this regard. There has been no foreign exchange earnings or outgo during the year under review.

Public Deposits

The Company had repaid all deposits which were claimed by the deposit holders in terms of the Schemes sanctioned by the Hon'ble Company Law Board except 3,624 deposits with a principal amount of Rs.4,41,63,804 and a maturity amount of Rs.5,43,90,485 which were not claimed by the deposit holders in spite of the Company sending reminders to them at periodic intervals. The unclaimed deposits are being paid as and when the same are claimed and an amount of Rs.000 has been paid since 310t March, 2015.

Number of meetings of the Board of Directors

There were 6 meetings of the Board of Directors held during the financial year 2014-15 and the details are mentioned in the Corporate Governance Report attached to this Report.

Directors' Responsibility Statement

Pursuant to Section 134(3) ( c ) of the Companies Act, 2013, the Directors to the best of their knowledge and belief and according to the information and explanations obtained confirm that:

(i) in the preparation of the Annual accounts for the year ended 31ot March, 2015, the applicable accounting standards had been followed along with proper explanations relating to material departures, if any;

(ii) they had selected such accounting policies and applied them consistently and made judgments 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 loss of the Company for that period;

(iii) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Accounts had been prepared on a going concern basis;

(v) proper financial controls were in place and that the financial controls were adequate and were operating effectively and

(vi) proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Declaration by Independent Directors

Mr B N Tripathi, Mr Sujit Datta and Mr A V Sudhakaran are Independent Directors on the Board of the Company. The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Audit Committee

The Audit Committee of the Board of Directors consist of Mr Sujit Datta, Mr.B N Tripathi and Mr A V Sudhakaran and the Company Secretary is the Secretary of the Committee. The Managing Director, Chief Financial Officer and Auditors are permanent invitees to the Committee meetings. The details of terms of reference of the Committee, number and dates of meetings held and other details are given separately in the Corporate Governance Report. Your Company has a well structured internal audit system commensurate with its size and operation. During the year there was no occasion when the Board had not accepted the recommendations of the | Audit Committee

Stakeholders' Relationship Committee

The Company has a Stakeholders' Relationship Committee for reviewing the complaints of investors in the Company. The members of the Committee are Mr.Sujit Datta, Mr.H C.Mathur and Mr A V Sudhakaran The number of meetings held and other details are given separately in the Corporate Governance Report.

Corporate Social Responsibility

The provisions of the Companies Act, 2013 regarding Corporate Social Responsibility are not applicable to the Company due to continuous losses suffered by the Company.

Nomination and Remuneration Committee

The Company has a Nomination and Remuneration Committee consisting of Mr A V Sudhakaran, Mr B N Tripathi and Mr Sujit Datta as its members. The details of terms of reference of the Committee and number of meetings held and the brief outline of the remuneration policy of the Company are given separately in the attached Corporate Governance Report. The Company Secretary acts as the Secretary of the Committee.

Directors

Mr H C Mathur was re-appointed as Managing Director of the Company for a further period of one year with effect from 1ot May, 2015, subject to the approvals of the shareholders and the Central Government on the expiry of his earlier term on 30th April, 2015. Necessary Special Resolution has been proposed in the Notice of the Annual General Meeting for this purpose.

As per the provisions of the Companies Act, 2013 and the revised Corporate Governance stipulations of the Stock Exchanges it was necessary to appoint a woman director on the Board of Directors of the Company. The Board has accordingly appointed Mrs.Jostna Shrestha as an Additional Director of the Company with effect from 31st March, 2015 who will vacate her office at the ensuing Annual General Meeting pursuant to Section 161 of the Companies Act, 2013. The Company has received a notice from a member under section 160(1) of the Companies Act, 2013 proposing Mrs JostnaShreshtaas a candidate for the office of Director of the Company.

As per Section 149 and other applicable provisions of the Companies Act, 2013 your Directors are seeking re-appointment of Mrs Jostna Shreshta as an Independent Director of the Company to hold office for a term of five consecutive years up to the conclusion of Thirty-fifth Annual General Meeting of the Company. Details of the proposal for her appointment are mentioned in the Explanatory Statement set out in the annexed Notice.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and other Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Risk Management

Risk Management is the process of identification, assessment and prioritization of risks followed by coordinated efforts to minimize, monitor, mitigate and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. The procedures are reviewed to ensure that executive management controls risk through means of a well thought framework. The Company has appointed a Risk Management Committee in terms of the requirement of the provisions in the Listing Agreement with the Stock exchange regarding Corporate Governance and the members of the Committee are Mr Sujit Datta, Mr H C Mathur and Mr A V Sudhakaran.

Particulars of employees and key managerial personnel (KMP)

The following are the Key Managerial Personnel of the Company in terms of Section 203 of the Companies Act, 2013:

Pursuant to Section 134 (3) (q) read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the details of Key Managerial Personnel required to be furnished as per the said Rules are annexed to this Report. There were no employees who were drawing remuneration in excess of the limit provided in Rule 5 (2) of the aforesaid Rules

Details of significant and material orders passed by the Regulators, Courts and Tribunals

No significant and material order has been passed by any Regulator, Court or Tribunal impacting the going concern status and Company's operation in future

Particulars of Loans, Guarantee or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the financial statements.

Related Party Transactions

All related party transactions that were entered into during the financial year were on arms' length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All related party transactions are placed before the Audit Committee and given in the notes annexed to and forming part of this Financial Statement.

Extract of Annual Return

The details forming part of the extract of the Annual Return in Form MGT 9 as required under Section 92 of the Companies Act, 2013 are annexed to this Report.

Corporate Governance

In accordance with the requirements of the Listing Agreements with the Stock Exchanges, a Report on Corporate Governance along with a certificate of the Auditors confirming compliance is set out in the Annexure forming part of this Annual Report

Human Resources

The Company's relations with the employees continued to be cordial.

Efforts to maximize utilization of scarce resources was a continuous process throughout the year. The Company received some innovative ideas from a few employees for achieving greater efficiencies, cost control and recoveries and those with substance are being implemented.

Auditors and Audit Report

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed there under Messrs Tarmaster & Co., Chartered Accountants, (Firm Registration No.302016E) were appointed as the Statutory Auditors of the Company by the Shareholders on 29th September, 2014 at the Twenty ninth Annual General Meeting of the Company to hold office till the date of the Thirty second Annual General Meeting, subject to ratification of their appointment at the thirtieth and thirty first Annual General Meetings. Accordingly a Resolution seeking Members ratification for their appointment is included in item 2 of the Notice convening the Annual General Meeting.

Regarding comments of the Auditors regarding non compliance of the Non- Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms(Reserve Bank) Directions, 2007 and the Company not being able to maintain minimum Capital Risk Asset Ratio (CRAR) as prescribed by the aforesaid

Directions the comments of the Board are as under:

The Company's net worth had become negative in March, 2002 due to continued losses. Later Reserve Bank of India cancelled the NBFC Registration. Hence the maintenance of CRAR and other compliances of the Directions are no more applicable to the Company.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 Messrs Ranjit Ghosh & Co., Company Secretaries (Membership No.FCS 3724) were appointed to carry out a secretarial audit of the Company. The Secretarial Audit Report is attached in the Annexure forming part of this Annual Report. As regards the comments of the Secretarial Audit Report your Board's reply is as follows:

1) The Company could not increase the minimum public shareholding due to the distressing financial position of the Company which in turn has rendered it extremely difficult to plan any exercise in this regard due to the anticipated reluctance of the public to take up Promoters shares for divestment and the non feasibility of making a further issue of shares to the public.

2) The Company's application to National Stock Exchange of India for delisting its Equity Shares is still pending for which no reasons have been furnished to the Company in spite of numerous complaints to the Exchange and to the concerned Regulator and hence the Company has withheld the payment of listing fees to the said Exchange.

ACKNOWLEDGEMENT

Your Directors wish to record their appreciation of the encouragement, support, assistance and co-operation received from the Company's bankers, financial institutions, shareholders, depositors and employees throughout the year

For and on behalf of the Board

(H.C.Mathur) (Sujit Datta)

Managing Director Director

(DIN: 00054757) (DIN:00337464)

Kolkata

Dated: 27th May, 2015


Mar 31, 2014

Dear members,

The Directors hereby present their Twenty-ninth Annual Report together with the Audited Financial Statement of the Company for the year ended 31st March 2014.

FINANCIAL RESULTS (Rs. in Lakhs) For the For the year ended year ended 31-3-2014 31-3-2013

Gross Income 43 48

Less: Expenditure 5803 5086

Less: Depreciation 6 6

Gross Profit/(Loss) (5766) (5044)

Less Exceptional items 50 120

Profit/(Loss) before tax (5716) (4924)

Provision for tax - -

Profit/(Loss) after tax (5716) (4924)

Add Balance brought forward (72943) (68019) from earlier years

Loss carried to Balance Sheet (78659) (72943)

DIVIDEND

In view of the continued losses, your Directors regret their inability to recommend any dividend on the Preference or Equity Shares.

DIRECTORS

As per Section 149 and other applicable provisions of the Companies Act, 2013 your Directors are seeking appointment of Mr. Sujit Datta, Mr. B. N. Tripathi and Mr. A. V. Sudhakaran as Independent Directors for a term of five consequent years each upto the conclusion of thirty fourth Annual General Meeting of the Company in the calendar year 2019.Details of the proposal for their appointment are mentioned in the Explanatory Statement set out in the annexed Notice.

Particulars of Employees

The Company had no employee of the category specified under Section 217 (2A) of the Companies Act, 1956 during the year under review.

Subsidiary Company

In view of the general exemption granted by the Ministry of Corporate Affairs, Government of India vide Circular No.2/2011 dated 8th February, 2011 the Annual Report and Accounts of Samudra Securities Limited, the subsidiary of your Company, for the year ended 31st March, 2014 have not been annexed to this Report. However, the duly audited consolidated financial statements of your Company and the subsidiary prepared in strict compliance with the applicable Accounting Standards and Listing Agreements are disclosed in this Report. Your Company will make available the Accounts of the subsidiary and the related detailed information to any shareholder of the Company on request in writing. The Report and Accounts of the subsidiary will also be kept open for inspection by the shareholders of the Company at the Registered Office of the Company and that of the subsidiary.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO

Your Company did not consume energy of any significant level during the year under review and, therefore, there was not much scope for taking any measures for energy conservation and for making any additional investment for reduction of energy consumption. Further, there being no involvement of any technology in the Company''s activities during the year no comment is made in this regard.

There has been no foreign exchange earning or outgo during the year under review.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures, if any ;

(ii) they had 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 loss of the Company for that period;

(iii) they had 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; and

(iv) the Accounts had been prepared on a going concern basis.

CORPORATE GOVERNANCE

In accordance with the requirements of the Listing Agreements with the Stock Exchanges, a Report on Corporate Governance along with a certificate of the Auditors confirming compliance is attached (AnnexureA)

HUMAN RESOURCES

The Company''s relations with the employees continued to be cordial.

Efforts to maximize utilization of scarce resources was a continuous process throughout the year.The Company received some innovative ideas from a few employees for achieving greater efficiencies, cost control and recoveries and those with substance are being implemented.

AUDITORS & AUDIT REPORT

Messrs Tarmaster & Co., Chartered Accountants, the Auditors of the Company, retire at the ensuing Annual General Meeting. Pursuant to the provision of Section 139 and other applicable provisions of the Companies Act, 2013 and Rules made thereunder, Messrs Tarmaster & Co., who have been the Statutory Auditors of the Company since 1983 can hold their office only for a period of three years.

Accordingly, the Board of Directors recommend their appointment for a period of 3 years i.e. from the date of ensuing Annual General Meeting (AGM) till the date of thirty second AGM.

Regarding comments of the Auditors on the Company regarding non compliance of the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms(Reserve Bank) Directions, 2007 and the Company, not being able to maintain minimum Capital Risk Asset Ratio (CRAR) as prescribed by the aforesaid Directions, the comments of the Board are as under.

The Company''s networth had become negative in March 2002 due to continued losses. Later, Reserve Bank of India cancelled the NBFC Registration. Hence the maintenance of CRAR and other compliances of the Directions are no more applicable to the Company.

ACKNOWLEDGEMENT

Your Directors wish to record their appreciation of the encouragement, support, assistance and co-operation received from the Company''s bankers, financial institutions,shareholders,depositors and employees throughout the year

For and on behalf of the Board (H. C. Mathur) Chairman Kolkata

Dated: 30th May, 2014


Mar 31, 2013

The Directors hereby present their Twenty-eighth Annual Report together with the Audited Financial Statement of the Company for the year ended 31st March 2013.

FINANCIAL RESULTS

(Rs. in Lakhs)

For the For the year year ended ended

31-3-2013 31-3-2012

Gross Income 46 56

Less: Expenditure 5085 17121

Less: Depreciation 6 10

Gross Profit/(Loss) (5045) (17075)

Less Exceptional items 120 211

Profit/(Loss) before tax (4925) (16864)

Provision for tax -

Profit/(Loss) after tax (4925) (16864)

Add Balance brought forward from earlier years (61999) (51135)

Loss carried to Balance Sheet (66924) (61999)

DIVIDEND

In view of the continued losses, your Directors regret their inability to recommend any dividend on the Preference or Equity Shares.

DIRECTORS

Mr. A V Sudhakaran retires by rotation and, being eligible, offers himself for reappointment.

PARTICULARS OF EMPLOYEES

Mr.Amarendra Nath Misra was the only employee falling within the purview of Section 217(2-A) of the Companies Act, 1956 and his particulars are appended below:

Designation Remuneration Nature of Employment Nature of Duties (Rs.) whether contractual or otherwise

Executive Director 88,83,896 Contractual In-charge of Legal

functions and recoveries



Desigation Qualification and total Date of Age Last employment service Experience commencement held and desig nation (Years) of employ ment

Executive B.A., LL.M., Director MBA, 06.09.1995 48 Head- Legal Department PGDCS 29 Years Indo-Gulf Fertilizers & Chemicals Limited

SUBSIDIARY

In view of the general exemption granted by the Ministry of Corporate Affairs, Government of India vide Circular No.2/2011 dated 8th February, 2011 the Annual Report and Accounts of Samudra Securities Limited, the subsidiary of your Company, for the year ended 31st March, 2013 have not been annexed to this Report. However, the duly audited consolidated financial statements of your Company and the subsidiary prepared in strict compliance with the applicable Accounting Standards and Listing Agreements are disclosed in this Report. Your Company will make available the Accounts of the subsidiary and the related detailed information to any shareholder of the Company on request in writing. The Report and Accounts of the subsidiary will also be kept open for inspection by the shareholders of the Company at the Registered Office of the Company and that of the subsidiary.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO

Your Company did not consume energy of any significant level during the year under review and, therefore, there was not much scope for taking any measures for energy conservation and for making any additional investment for reduction of energy consumption. Further, there being no involvement of any technology in the Company''s activities during the year no comment is made in this regard.

There has been no foreign exchange earnings or outgo during the year under

review.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures, if any ;

(ii) they had selected such accounting policies and applied them consistently and made judgments'' 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 loss of the Company for that period;

(iii) they had 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; and

(iv) the Accounts had been prepared on a going concern basis.

CORPORATE GOVERNANCE

In accordance with the requirements of the Listing Agreements with the Stock Exchanges, a Report on Corporate Governance along with a certificate of the Auditors confirming compliance is attached (Annexure A)

HUMAN RESOURCES

The Company''s relations with the employees continued to be cordial and the number of employees at the yearend was 15.

Efforts to maximize utilization of scarce resources was a continuous process throughout the year. The Company received some innovative ideas from a few employees for achieving greater efficiencies, cost control and recoveries and those with substance are being implemented.

AUDITORS & AUDIT REPORT

Messrs Tar master & Co., Chartered Accountants, the Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for re-appointment.

Regarding Auditors'' comments on inability of the Company to maintain minimum Capital Risk Asset Ratio(CRAR) as prescribed by the Reserve Bank of India and non-compliance of the provisions of the Non-Banking Financial Companies

(Reserve Bank of India) Directions 1977 /Non-Banking Financial (deposit accepting or holding) Companies (Reserve Bank of India) Directions, 2007 the comments of the Board are as under :

Due to huge losses, the net worth of the Company is negative and hence it is not in a position to meet the requirements laid down by the Reserve Bank of India (RBI). Hence the Company cannot carry NBFC Business. However RBI has directed the Company to comply with all RBI formalities till the repayment of deposits and closing all NBFC business. The notes referred by the auditors are self explanatory.

ACKNOWLEDGEMENT

Your Directors wish to record their appreciation of the encouragement, support, assistance and co-operation received from the Company''s bankers, financial institutions, shareholders, depositors and employees throughout the year

For and on behalf of the Board

(H.C.Mathur)

Chairman

Kolkata

Dated: 30th May, 2013


Mar 31, 2012

The Directors hereby present their Twenty-seventh Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2012.

FINANCIAL RESULTS

(Rs. in Lakhs)

For the year For the year ended ended. 31-3-2012 31-3-2011

Gross Income 56 80

Less: Expenditure 17121 1159

Less: Depreciation N 10 11

Gross Profit/(Loss) (17075) (1090)

Less Exceptional items 211 83

Profit/(Loss) before tax (16864) (1007)

Provision for tax - -

Profit/(Loss) after tax (16864) (1007)

Add: Balance brought forward from earlier years (51135) (50128)

Loss carried to Balance Sheet (61999) (51135)

DIVIDEND

In view of the continued losses, your Directors express their inability to recommend any dividend on the Preference or Equity Shares.

INDUSTRY STRUCTURE, OPERATIONS AND DEVELOPMENT

The expenditure for the year was high as the Company had accounted for dues to the lenders on the basis of their claims. Earlier, the accounting was done on the basis of Company's proposal made in 1999 which had in-principle approval of most of the lenders. The change was done since the Company's appeals before the appellate authorities were dismissed and the Recovery proceedings had commenced.

Your Company's efforts for revival did not materialise due to difficulty in raising funds and the consequent inability to negotiate with creditors for payment of dues. Your Company has not been able to venture into any new/viable business despite its best efforts but it continued to carry on existing activities. However, it succeeded in realization of its dues relating to the NBFC activities carried out in the past and also disposal of assets which helped your Company in meeting its liabilities to some extent during the year under review. Like in the last few years, your Company could manage with great difficulty to pay off the instalment due to the depositors during the year 2011-12 in full compliance of the Order of the Hon'ble Company Law Board. Some of the secured creditors obtained decrees from Debt Recovery Tribunals (DRTs) for outstanding dues and some of the fixed assets given on security have been disposed off by the office of DRT. Proceedings are still continuing in respect of the unsecured creditors. Your Company has taken appropriate steps at the next higher level wherever possible for defending the proceedings.

Your Company has repaid all claimed deposits which were due during the year under review in full compliance of the Order passed by the Hon'ble Company Law Board dated 13th October, 2009. There were 4208 unclaimed deposits aggregating to Rs. 636.86 lakhs at the close of the year. Your Company has written to all these depositors on how to claim these deposits and those remaining unclaimed will be dealt with as per the relevant/applicable laws Oppurtunities.

OPPORTUNITIES, THREATS, RISKS, CONCERNS, PERFORMANCE AND OUTLOOK

Your Company's continued efforts to implement the revival plan has not materialized. In view of the mounting liabilities and losses, the outlook is hot encouraging. Your Company is still striving hard to meet some of its liabilities.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has an effective system of accounting and administrative controls supported by an internal audit system with proper and adequate system of internal checks and controls to ensure safety and proper recording of all assets of the Company and their proper and authorised utilisation.

DISCUSSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONS

Your attention is drawn specifically to the issues mentioned hereinbefore under the head 'Industry Structure, Operations and Development' and to the comments under the head 'Opportunities, Threats, Risks, Concerns, Performance and Outlook'. Your Company's financial position is under extreme stress and needs a concerted effort from creditors, shareholders and other third parties for any significant positive result to emerge in the long run.

DIRECTORS

Mr.Sudhamoy Chatterjee resigned from the Board of Directors with effect from 26th December, 2011 and the Board has placed on record its deep appreciation for the valuable services rendered by Mr. Chatterjee during the tenure of his directorship in the Company.

Mr. B.N.Tripathi retires by rotation and, being eligible, offers himself for re-appointment.

PARTICULARS OF EMPLOYEES

Pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, the particulars of employees, though forming part of this Report, is not being mailed to members pursuant to the provisions of Section 219(1) (b) (iv) of the Companies Act, 1956. However, the said information is available for inspection by members at the Registered Office during working hours upto the date of Annual General meeting. Any member interested in obtaining a copy of the said information may write to the Company Secretary at the Registered Office.

SUBSIDIARY

In view of the general exemption granted by the Ministry of Corporate Affairs vide Circular No.51/12/2007-OL-lll dated 8th February, 2011 the Annual Report and Accounts of Samudra Securities Limited, the subsidiary of your Company, for the year ended 31st March, 2012 have not been annexed to this Report. However, the duly audited consolidated financial statements of your Company and the subsidiary prepared in strict compliance with the applicable Accounting Standards and Listing Agreements are disclosed in this Report. Your Company will make available the Accounts of the subsidiary and the related detailed information to any shareholder of the Company on request in writing. The Report and Accounts of the subsidiary will also be kept open for inspection by the shareholders of the Company at the Registered Office of the Company and that of the subsidiary.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO

Your Company did not consume energy of any significant level during the year under review and, therefore, there was not much scope for taking any measures for energy conservation and for making any additional investment for reduction of energy consumption. Further, there being no involvement of any technology in the Company's activities during the year, no comment is made in this regard.

There has been no foreign exchange earning or outgo during the year under review.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures, if any;

(ii) they had 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 loss of the Company for that period;

(iii) they had 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; and

(iv) the Accounts had been prepared on a going concern basis. CORPORATE GOVERNANCE

In accordance with the requirements of the Listing Agreements with the Stock Exchanges, a Report on Corporate Governance along with a certificate of the Auditors confirming compliance is attached.

(Annexure 'A')

HUMAN RESOURCES

Your Company's relations with the employees continued to be cordial and the number of employees at the year end was 15.

Efforts to maximize utilization of scarce resources was a continuous process throughout the year. Some of the innovative ideas put in by a few employees for achieving greater efficiencies, cost control and recoveries are being implemented.

AUDITORS & AUDIT REPORT

Messrs Tarmaster & Co., Chartered Accountants, the Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for re-appointment. Regarding Auditors' comments on non-compliance of the provisions of the Non-Banking Financial (Deposit Accepting or Holding) Companies (Reserve Bank) Directions, 2007 and non-maintenance of minimum Capital Risk Asset Ratio (CRAR) as prescribed by the Reserve Bank of India, your Directors draw your attention to Note 26 forming part of the Accounts, which is self explanatory and does not warrant any further clarification or explanation.

ACKNOWLEDGEMENT

Your Directors wish to record their appreciation of the encouragement, support, assistance and co-operation received from the Company's bankers, financial institutions, shareholders, depositors and employees throughout the year.

For and on behalf of the Board

(H. C. Mathur)

Chairman

Kolkata,

Dated: 4th July, 2012

 
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