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Notes to Accounts of CFL Capital Financial Services Ltd.

Mar 31, 2015

Note 1.1

The Company had re-discounted the bills of its clients in the past. The Company could not pay to its discounters as the Company's clients whose bills were discounted by the Company had not paid the due amount to it. The amounts are still due.

Note 1.2

These borrowings are interest free, due on demand and subject to confirmation in many cases. Hence, there is no accrued interest.

Note 1.3 - Sundry Creditors

The amount of Rs. 3,08,13,778.93 (Previous Year Rs. 3,08,92,190.43) due to Samaudra Securities Limited (SSL), the subsidiary of the Company since 1st April, 2003 against purchase/sale of GOI securities from them prior to 2004. This amount has remained unpaid for a few years on account of Financial constraints. SSL has made a provision against the amount due to them. The Company has made no provision in its books since the value of investment would not be impaired if the dues to SSL are settled. None of the creditors have intimated their status under the Micro Small Medium Enterprises Development Act, 2006

Note 1.4 - Borrowings from Banks

i. The loans from Banks are secured by pari passu hypothecation of present and future Hire Purchase (HP) receivables and Lease rentals and the relative assets consisting of Plant and Machinery, Office Equipments, Vehicles etc. and HP/ Lease debtors including overdue interest, delayed payment charges and the assets. The loans are further secured by way of collateral security given in the form of equitable /registered mortgage of the Company' office units in Delhi and Hyderabad to all banks along with pari passu hypothecation charge on the movable assets at these premises. The security is insignificant with respect to the amount claimed.

ii. The amounts were earlier advanced by the banks as Working Capital limits and then converted into loans. Hence shown under this head.

The principal amount is as claimed by the banks in the suits filed by them before the Debt Recovery Tribunals. (DRTs). The dates of defaults areas per the dates recorded by the Mumbai Debt Recovery Tribunal. In the earlier year, the principal was considered as per Company's proposal given in 1999.

There is no change in the total liability claimed by the lenders. The Recovery officers of the Debt Recovery Tribunals have sold some of the fixed assets mortgaged to the banks as security. The net amount of Rs.2,32,02,576/- realized by them are distributed by the Recovery Officers during the year - Nil (Previous Year - Rs. 2,32,02,576/-) to the banks after deducting the expenses and adding the interest earned.

iv. The above lenders had approached the Debt Recovery Tribunals of Competent Jurisdiction.

Note 1.5 - Unpaid Debentures - Secured

i. The 19% Secured Non Convertible debentures are secured by an exclusive charge/mortgage over specific assets given on Lease /Hire Purchase and the debtors However the value of security including collateral security (one office unit at Mumbai) is insignificant with respect to amount claimed. The principal amount is shown as on the date of filing the suit before the Debt Recovery Tribunal. After the demerger of Unit Trust of India in 2002, the dues are bi-furcated between UTI Asset Management Co Ltd and the Administrator of Specified Undertaking of Unit Trust of India.

The interest is calculated at the rates as stated above from the date of filing the appeal i.e. 15-Mar-2004.

Note 1.6 - Fixed Deposits

The Company had defaulted in repaying the deposits as per the original terms of the deposits. The repayments were rescheduled by the Company Law Board's (CLB) orders dated 26.06.2001 and its subsequent modifications dated 11.09.2002, 30.04.2004, 28.02.2006, 07.02.2007 & 13.10.2009 . The Company has already paid all the claimed deposits on 29.12.2012 i.e. before 31.12.2012 the last date specified as per the last CLB order of 13.10.2009. As all Fixed Deposits have matured as per the original terms, the full amount is shown as dues to fixed depositors. The break-up of principal and interest on cumulative deposits upto the date of contracted maturity is given below.

The amount due within one year is Rs. 5,43,90,485/- (Previous Year Rs. 5,69,76,967/-)

Whereas majority of the warrants were encased within their validity period, some of the remained unencashed.

Further the Company had been regularly issuing fresh warrants or bank demand drafts, as the case may be, to the depositors, who could not encash their warrants on time as and when request for the same were received. In the process, the Company had repaid Rs. 25,86,482/- (Previous Year Rs. 56,60,448/-) to the depositors during the year under review.

Further, any request received from the deposit holders against the unencashed amount shall be duly paid till the expiry of 7 years from the respective due date whereupon the same shall be transferred to the Investor Education and Protection Fund.

Note 1.7

Disclosure required under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) are given as follows:

a. Principal amount and Interest due thereon remaining unpaid to any supplier at the end of accounting year

b. Interest paid during the year beyond the appointed day

c Amount of interest due and payable for the period of delay in making payment without adding the interest specified under the Act

d. Amount of interest accrued and remaining unpaid at the end of the year

e. Amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small

Note 1.8

All the creditors of the Company, except few corporate, banks and Financial Institutions (FIs) , have confirmed their dues to the Company as on 31st March, 2015. Further, the amount due to the banks except Vijaya Bank (VB), Bank of Rajasthan Ltd. (BR) (now merged with ICICI Bank Ltd),Federal Bank Ltd (FB) and FIs have been stated at the amount decreed by the Hon'ble Debt Recovery Tribunal (DRT) in their favour, as increased by the interest due thereon at the rate ordered by DRT in the respective decree. The dues to VB, BR, FBand FIs have been stated at the amount claimed by them in their recovery suits filed before DRT and interest due thereon up to 31st March, 2015 at the rate demanded by them in their respective recovery suits.

Notes :

1. Buildings, mostly consist of office units, some of which are yet to be recorded in Company's new name.

2. Buildings with the gross value of Rs. 1,63,64,355.68 located at New Delhi and Hyderabad are given as collateral security to Banks (Note 6.4) and the building at Mumbai valued at Rs. 48,50,000 to Debenture holders (Note 6.5)

3. Leased Assets deleted during the year represent assets removed from the books on completion of lease.

4. The assets sold / retired during the year include offices of the Company disposed off by the Recovery Officers of the Debt Recovery Tribunals.

5. Office Equipment include cost of the software embedded in the computers or were purchased /capitalized over 10 years ago and are fully depreciated.

6. In accordance with the provisions of Schedule II of the Act, in case of fixed assets having completed the useful life as at 1 st April, 2014 or have been depreciated more than the residual value, the net carrying value(net of residual value) amounting to Rs. 1.32.187.43 has been recognized in the retained earnings. No cognizance has been taken of deferred tax due to uncertainty of future taxable profits

7. In case the depreciation was provided as per provisions of Schedule XIV of the Companies Act, 2013, the depreciation would have been higher by Rs. 89.284.49/-

A. The Long Term Investments as per the Accounting Standard 13 as notified by the Companies (Accounting Standards) Rules 2006 are classified Non Current investments.

B. Provision has been made on the basis of the Non-Banking Financial (Deposits Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007.

C. The Investments are valued at Cost and provisions are made as per the directions referred in B above.

D. Shares in unlisted companies (including Subsidiary company are held in physical form while Government securities are held in electronic form.

E. In case physically held securities (except subsidiary), the changing of Company's name is under process.

F. No charge of SLR securities has been created in favors of the Public Depositors. This has been permitted by Reserve Bank of India.

G. The Investee Company's status as Listed or Unlisted is as per the Company Data on the website of Ministry of Corporate Affairs at the current year end.

H. The meaning of abbreviations is A - Active, DO - Dormant, L- Liquidated, UL - Under Liquidation, USO - Under Strike Off. These particulars are from the same data as in G above. Shares of Struk off/ Liquidated Companies , Companies under Liquidation or strike off have been written off. In case of Active companies to whom letter have been send by Registered Post and which have been returned undelivered are also written off.

I Provision on Standard Assets has been made @ 0.5% as per Reserve Bank of India's directions.

J. D indicates shares are in dematerialized form otherwise they are in physical form

K. Shares of Dormant and Under Liquidation /Liquidated Companies are removed from the Books. Some 'Active' Companies' shares have also been removed where no accounts for the last few years are available with Registrar of Companies and the Registered letters are returned undelivered

Note 1.9

A. The Current Investments are included in this Schedule as per the Accounting Standard 13 as notified by the Companies (Accounting Standards) Rules 2006 and there are restrictions on trading imposed by Reserve Bank of India.

B. * These shares have been received by the Company on removal of defects in case of bad deliveries or for lost shares. These have been accounted at the market rate. C ** The Company's application for duplicate shares / dematerialization not responded by respective Companies

D. Where the company has written off the value of a share/debenture/security due to non availably of market rate of a period exceeding six months, its value has been shown as Nil despite the quantitative number held as on the balance sheet date appearing. Others are valued at lower of cost or market value

E. Shares marked as (D) are in electronic form, others are in physical form. In case physical securities, the changing of Company's name is under process.

F. The Investee Company's status as Listed or Unlisted is as per the Company Data on the website of Ministry of Corporate Affairs at the current year end.

G. The meaning of abbreviations is A - Active, DO - Dormant, L- Liquidated, UL - Under Liquidation, USO - Under Strike Off. These particulars are from the same data as in G above. Shares of Liquidated Companies have been written off.

H. The shares of Dormant or under liquidation / dormant Companies as per website of Ministry of Corporate Affairs have been removed from the books.

Note 1.10

i. Interoperate Deposit was given in earlier years and is doubtful of recovery. No interest has been accrued as per the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007. ii. Bills Discounted are dues for bills discounted in earlier years and are doubtful of recovery. No interest has been accrued as per the Non-Banking Financial Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007. iii As per the Orders of the Debt Recovery Tribunals ordering the sale of Company's Assets, the Recovery Officers have sold certain assets and realized these amounts to be appropriated to various lenders.

NOTE 2

(1) Contingent Liabilities :

i) Dividend on 13% Redeemable Cumulative Preference Shares is in arrears- Rs. 55,22,79,000/-17 years (previous Year Rs.51,97,92,000/-16 years)

ii) Wealth Tax Rs. 3,27,843/- ( Previous Year Rs. 3,27,843-)

iii) Sales Tax Rs. 23,14,158/- ( Previous Year Rs. 23,14,158/-)

iv) Others Rs. 13,20,000/- (PY Rs. 13,20,000/-)

The above liabilities, except dividend on preference shares, are dependent upon the outcome of appeals before various authorities. The contingent liability towards dividend on Preference Shares would be payable if the Company has distributable profits.

Claims against the Company not acknowledged as debts, as the same are disputed by the Company. Others Rs. 29,35,966/- (Previous Year Rs. 23,98,362/-)

(3) CURRENTS DEFERRED TAX

There is no provision for Income Tax during the year due to loss..

The Company has not created the Deferred Taxation Asset as its utilization for set off against future taxable income is uncertain in the foreseeable future.

(4) The accumulated loss of Rs. 851,8383,069.83/- (Previous Year Rs. 7,86,40,13,154.60/- includes unabsorbed depreciation of Rs.170,19,80,477.39/- (Previous Year Rs. 1,70,14,93,343.52/-)

(5) The Company has paid an amount of Rs. 4,45,197/- (PY Rs. 7,69,866/-) towards Provident & Pension Funds and Gratuity & Superannuation Schemes. For leave benefit the Company has provided, on actuarial basis. A liability of Rs. 14,53,459/- (PYRs. 15,48,515/-) is accrued as at the year end.

The present value of obligation towards gratuity is determined based on actuarial valuation report furnished by LIC, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. It is fully funded as on the year end.

(6) Related Party Disclosures

1. Relationships

(i) Shareholders in the Company

STEL Holdings Ltd. holds 48.81% equity share capital of the Compny,

(ii) Subsidiary of the Company

Samudra Securities Ltd. (formerly Ceat Securities Limited) (iii) Other related parties

Ace Garment Export Ltd**

Indo Dean Leather Ltd**

Kaveri Polysacks Ltd.**

Spectrum Alkyd & Resins Ltd**

Ruia Hospitality Ltd**

**(The Company holds over 20% shareholding in these companies. These investments were made as Merchant Bankers. The Company does not have any significant influence over their managements and are hence not considered for related party disclosures as associates. The financial statements for the previous three years are also not available on the website Ministry of corporate Affair , (MCA) Government of India. As per MCA most of these Companies are dormant.

Even in case of "Active' Companies the letters sent to the registered offices as per MCA website were returned undelivered. These investments are also removed from the books during the year, (iv) Directors and other executives (including those who were associated for part of the period)

Mr H C Mathur - Chairman & Managing Director

Mr R C Kurup - Company Secretary

Mr Ramulu B M - Chief Financial Officer

(8) Segment Information

The Company's present activity is to take steps to close its Non Banking Financial activities. The other activities have not made any significant progress. Hence there are no segments.

(7) A sum of Rs. 50,000/-(P Y Rs. 35,103/-) is transferable to the Investors Education & Protection Fund at the end of the year.

After the year end a sum of Rs. 50,000/- ( P Y Rs. 35,103/-) have been transferred to the said Fund till the date of these statements.

(8) The Company follows the directions given by Reserve Bank of India (RBI) to Non Banking Financial Companies and maintains Statutory Liquidity Ratio (SLR) as per RBI's instructions in the matter. The Company continues to be governed by the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007. However Consequent to the Net Worth of the Company having become negative, the restrictions placed by para 16 of these norms pertaining to a minimum Capital Adequacy of 12% and Para 19 (pertaining to acquisition of land and building other than for own use) and Para 20 (pertaining to Concentration of Credit/Investment) could not be met.

(9) The details required as per Para 13 of the Non Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007 are annexed.

(10) The Company is not liable to spend any money towards Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 since it has losses u/s 197 of the said Act for all the last three financial years

(11) Disclosures required with regard to the subsidiaries and transactions with related parties in forms AOC-1 & AOC -2 are attached as Annexure.

(12) Previous Year's figures have been reclassified and /or regrouped wherever necessary to correspond with the current year's classification and disclosures.

Notes:

1 As defined in Paragraph 2(1) (xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

2 Provisioning norms shall be applicable as prescribed in the Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 2007.

3 All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/fair value/NAV in respect of unquoted investments should be disclosed irrespective of whether they are classified as long term or current in column (5) above.


Mar 31, 2014

NOTE 1

GENERAL INFORMATION COMPANY PROFILE

A. CFL Capital Financial Services Limited was incorporated in 1983 as Samudra Mahal Investments Limited as Public Company and was engaged in the business of Non Banking Financial Business under valid permission from Reserve Bank of India (RBI), granted in April 1998. Due to the poor financial condition of the Company, on account of dot.com burst of 199899 and subsequent impact thereof which lead to inter-alia Capital Risk Adequacy Ratio (CRAR) going below the prescribed limit, RBI cancelled its Certificate of Registration w.e.f 18-May-2004. The RBI also directed that the Company continues to be governed by the relevant provisions of the Act (RBI Act, 1934) and various directions/instructions issued by RBI from time to time until such time the entire amount of public deposits held by the company are repaid with interest and the entire financial assets are disposed of or the Company is converted to a non-banking non-financial Company. As per its assets and income, the Company continues to be a Non Banking Financial Company. The Company has its registered office in Kolkata, West Bengal.Its Company Identification Number as given by Registrar of Companies, West Bengal, is L67120WB1983PLC036805. Its equity shares are listed on the Bombay Stock Exchange Limited.

B. In view of the above, the Company cannot carry on any fresh Non Banking Financial activities. Hence these financial statements show the results of these operations / activities.

C. Going Concern

The net worth of the Company has become negative due to the accumulated losses in the previous years. The Company had drawn a plan to liquidate assets, borrow money including from shareholders / promoters etc. for meeting the liabilities of the financial year ending 31st March, 2014. Hence, the Accounts have been drawn up on a going concern basis. The winding up petition filed by a depositor in the previous year is pending before the Hon''ble Calcutta High Court.

However, in view of the net worth of the Company being negative and in view of the accumulated losses for the last few years aggregating to Rs. 78,640.13 lakhs till March 2014, the Company''s ability to maintain the status is dependent on concessions from stake holders'' and others'' support. Substantial support is reflected in this year''s accounts from creditors and shareholders. One of the banks has filed a Winding up petition against the Company before the Hon''ble High Court Calcutta which was dismissed by the Hon''ble Court in April, 2014.

Note 2.1

The Company had re-discounted the bills of its clients in the past.The Company could not pay to its discounters as the Company''s clients whose bills were discounted by the Company, had not paid the due amount to it. The amounts are still due.

Note 2.2

These borrowings are interest free and are due on demand. Hence, there is no accrued interest.

Note 2.3 - Sundry Creditors

The amount of Rs. 3,08,92,190.43 (Previous Year Rs. 3,04,08,208.68) is due to Samudra Securities Limited (SSL), the subsidiary of the Company since 1st April,2003 against purchase / sale of GOI securities from them prior to 2004. This amount has remained unpaid for a few years on account of financial constraints. SSL has made a provision against the amount due to them. The Company has made no provision in its books since the value of investment would not be impaired if the dues to SSL are settled. None of the creditors have intimated their status under the Micro Small Medium Enterprises Development Act, 2006

Note 2.4 - Borrowings from Banks

i. The loans from Banks are secured by pari passu hypothecation of present and future Hire Purchase (HP) receivables and Lease rentals and the relative assets consisting of Plant and Machinery, Office Equipments, Vehicles etc. and HP/ Lease debtors including overdue interest, delayed payment charges and the assets.The loans are further secured by way of collateral security given in the form of equitable / registered mortgage of the Company'' office units n Delhi and Hyderabad to all banks along with pari passu hypothecation charge on the movable assets at these premises. The security is insignificant with respect to the amount claimed.

ii. The amounts were earlier advanced by the banks as Working Capital limits and later converted into loans. Hence shown under this head.

NOTE 3

(1) Contingent Liabilities :

i) Dividend on 13% Redeemable Cumulative Preference Shares is in arrears- Rs. 51,97,92,000/-16 years (previous Year Rs.48,73,05,000/-15 years)

ii) Wealth Tax Rs. 3,27,843/- ( Previous Year Rs. 3,27,843-)

iii) Sales Tax Rs. 23,14,158/- ( Previous Year Rs. 23,14,158/-)

iv) Others Rs. 13,20,000/- (Previous Year Rs. 13,20,000/-)

The above liabilities, except dividend on preference shares, are dependent upon the outcome of appeals before various authorities. The contingent liability towards dividend on preference share would be payable, if the Company has distributable profits.

Claims against the Company not acknowledged as debts (as the same are disputed by the Company). Others - Rs. 42,49,283/- (Previous Year Rs. 39,20,191/-)

(2) CURRENT & DEFERRED TAX

There is no provision for Income Tax during the year due to loss.

The Company has not created the Deferred Taxation Asset as its utilisation for set off against future taxable income is uncertain in the forseeable future.

(3) The accumulated loss (as at 31st March, 2014) of Rs. 7,86,40,13,154.60/- (Previous Year Rs. 7,29,24,12,964.13/-) includes unabsorbed depreciation of Rs.1,70,14,93,343.52/- (Previous Year Rs. 1,70,09,26,683/-)

(4) The Company has paid an amount of Rs. 11,05,605.96/- (Previous Year Rs. 15,77,046.69/-) towards Provident & Pension Funds and Gratuity & Superannuation Schemes. For leave benefit the Company has provided, on actuarial basis, a liability of Rs. 17,36,521/- (Previous Year Rs. 16,80,063/-) as at the year end. During the year an amount of Rs. Nil (Previous Year Rs. 2,61,749/-) was paid by the Company to the Executive Provident Fund Trust due to lower income. The said Trust managing the Executive Fund was wound up as the recognition under the Income Tax Act 1961 was proposed to be withdrawn with effect from 01.04.2012 as per the proposal of the Finance Bill 2012.

(5) A sum of Rs. 35,103/-(P Y Rs. 26,350/-) is transferable to the Investors Education & Protection Fund at the end of the year.

After the year end a sum of Rs. 35,103/- ( P Y Rs. 26,350/-) have been transferred to the said Fund till the date of these statements.

(6) The Company follows the directions given by Reserve Bank of India (RBI) to Non Banking Financial Companies and maintains Statutory Liquidity Ratio (SLR) as per RBI''s instructions in the matter. The Company continues to be governed by the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007. However Consequent to the Net Worth of the Company having become negative, the restrictions placed by para 16 of these norms pertaining to a minimum Capital Adequacy of 12% and Para 19 (pertaining to acquisition of land and building other than for own use) and Para 20 (pertaining to Concentration of Credit/Investment) could not be met.

(7) The details required as per Para 13 of the Non Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007 are annexed.

(8) The disclosures required as per Section 212(3) and 212(8) of the Companies Act, 1956 are annexed.

(9) Previous Year''s figures have been reclassified and /or regrouped, wherever necessary, to correspond with the current year''s classification and disclosures.


Mar 31, 2013

A. COMPANY PROFILE

CFL Capital Financial Services Limited was incorporated in 1983 as Samudra Mahal Investments Limited as Public Company and continued to carry on Non Banking Financial Business and had the valid permissions for the same from Reserve Bank of India (RBI) and other authorities. Due to the poor financial condition of the Company, RBI cancelled its Certificate of Registration w.e.f 18-May-2004. However, the RBI has directed that the Company continues to be governed by the relevant provisions of the Act (RBI Act, 1934) and various directions/instructions issued by RBI from time to time until such time the entire amount of public deposits held by the company are repaid with interest and the entire financial assets are disposed of or the Company is converted to a non-banking non-financial company. As per its assets and income, the Company continues to be a Non Banking Financial Company. CFL has its registered office in Kolkata, West Bengal. Its Company Identification Number as given by Regiatrar of Companies, West Bengal, is L67120WB1983PLC036805. Its equity shares are listed on the Bombay Stock Exchange Limited.

B. Going Concern

The net worth of the Company has become negative due to the accumulated losses in the previous years. The Company has drawn a plan to liquidate assets, borrow money including from shareholders / promoters etc for meeting the liabilities of the financial year ending 31st March, 2014 Hence, the Accounts have been drawn up on a going concern basis. The winding up petition filed by a depositor in the previous year is pending before the Hon''ble Calcutta High Court.

The Company''s accounts have been drawn on a Going Concern basis. However, in view of the net worth of the Company being negative and in view of the accumulated losses for the last few years aggregating to Rs. 49,339.01 lakhs in all, the Company''s ability to maintain the status is dependent on concessions from creditors (which is under consideration) and shareholders'' support. Substantial support is reflected in this year''s accounts from creditors and shareholders.

C. As the net owned fund of the Company are negative, Reserve Bank of India (RBI) had cancelled the registration of the Company as Non Banking Financial Company with effect from 18th May, 2004. Accordingly the Company cannot carry on any fresh Non Banking Financial activates. Hence these financial statements show the results of these operations / activities.

The Company is contemplating to carry on Non Banking Non Financial business and the operations from this activity during this year are not significant and hence no separation is made.

Note 1.1

The Company used to re-discount the bills which it used to discount of its clients in the course of its funding business. The amount is outstanding as the recovery from the discounters is pending and other disputes with the concerned discounters.

Note 1.2

These borrowings are interest free and due on demand. Hence there is no accrued interest.

Note 1.3 - Sundry Creditors

Sundry Creditors include dues from subsidiary- - Samudra Securities Limited - Rs. 3,04,08,208.68 (Previous Year Rs. 3,05,08,208.68) Samudra Securities Limited (SSL) (formerly Ceat Securities Ltd.)has become a subsidiary of the Company with effect from 1st April, 2003 as per the scheme of amalgamation approved by the Hon. High Courts of Madras and Calcutta. An amount of Rs. 3,04,08,208.68 is due to SSL on account of GOI securities purchased from them. This amount has remained unpaid for a few years on account of Financial constraints. SSL has made a provision against the amount due to them. The Company has made no provision in its books since the value of investment would not be impaired if the dues to SSL are settled.

Note 1.4 - Borrowings from Banks

i. The loans from Banks are secured by hypothecation of present and future Hire Purchase and Leased assets and Book Debts. Specific cases of these transactions covering, Plant % Machinery, Computers, Office Equipments, Vehicles etc were provided to the specific banks. Certain buildings were also mortgaged to the banks collectively. The security is however insignificant in relation to the dues.

ii. The Company had entered into agreements with some banks for settlement of their dues and completed the settlements in earlier years. The Company is negotiating with the others including those who have initiated legal proceedings against the Company. The Adjudicating Authorities have decreed against the Company in many cases and the Recovery Officers have commenced possession and disposal of these assets given as security to the bankers. The amount shown as payable is calculated on the basis of amounts decreed by the adjudicating authorities along with the interest as decreed. In case the decree has not been passed the amount is computed on the basis of the claimed amount and with interest computed as per the claim. The amount payable as on the Balance sheet date is disclosed in notes 6.4 and 6.8 below.

iii Debt Recovery Tribunals (DRT) - I & II< Mumbai have passed decrees in favour of six banks and in pursuance thereto recovery proceedings are pending against the Company. Five more suits filed by the banks are still pending before the DRT at Mumbai, Kolkata and Chennai. Two recovery proceedings are pending before the DRT-II, Delhi pursuant to an interim and final decree for the balance amount in respect of one bank. DRT-I, Kolkata, DRT-II, Delhi and DRT-I, Mumbai have passed injunction/status quo orders in respect of mortgaged assets/properties. DRT-I, Mumbai had appointed a Receiver in respect of the mortgaged properties in one recovery proceeding. The mortgaged properties at Ahmedabad, Kanpur, Luck now, Ghaziabad have already been auctioned off by DRT-I, Mumbai in the recovery proceeding filed by Dena Bank, where some other banks have also joined themselves. The Pune property was auctioned off pursuant to recovery proceedings at DRT, Pune. The Company has also preferred six appeals before the Debt Recovery Appellate Tribunals, at Mumbai and Delhi, which are pending before the Hon''ble Appellate Tribunals. The amounts were earlier advanced by the banks as Working Capital limits and then converted into loans. Hence shown under this head.

The principal shown is as per the earlier proposal accepted in-principle by majority. The difference between the book principal and the one claimed by the banks as on the date of default is added to interest account referred in note 6.8.

The Recovery officers of the Debt Recovery Tribunals have sold some of the fixed assets mortgaged to the banks as security. The amount realized is held by the Recovery Officers on behalf of the above banks.

Note 1.5 - Unpaid Debentures

The 19% Secured Non Convertible debentures are secured by an exclusive charge/mortgage over specific assets given on Lease / Hire Purchase and the debtors However the value of security including collateral security ( one office unit) is insignificant with respect to amount due. The principal amount of Rs. 195 lakhs was payable to the lenders as per the original terms. The difference between the book principal and that claimed by lenders as on the date of default is added to the interest account referred in note 6.6 . The Company could not pay the dues as per the proposal. After the demerger of Unit Trust of India in 2002, the dues are bi-furcated between UTI Asset Management Co Ltd and the Administrator of Specified Undertaking of Unit Trust of India. The amount due as on the Balance Sheet date is disclosed below.

Note 1.6- Fixed Deposits

The Company had defaulted in repaying the deposits as per the original terms of the deposit which were rescheduled by the Company Law Board''s (CLB) orders dated 26.06.2001 and its subsequent modifications dated 11.09.2002, 30.04.2004, 28.02.2006, 07.02.2007 & 13.10.2009 The Company has already paid all the claimed deposits on 29.12.2012 as per the last CLB order. As all Fixed Deposits have matured as per the Original terms, the full amount is shown as dues to fixed depositors. The CLB has also considered the maturity amount while deciding about the amount of installments Hence entire amount of deposits is classified as due within one year is Rs 6,26,37,415/- (PY Rs. 15,99,10,994.10). The interest accrued and due on cumulative deposits and included in these amounts is Rs, 1,19,24,782/-(PY Rs. 3,75,27,370.10)

No. of Deposits Amount No. of Deposits Amount Amount unclaimed 4,180 62,637,415.00 4,208 63,685,616.00

As per the order of the Honorable Company Law Board (CLB) dated May 25, 2005, no delayed payment interest would be payable if the Company makes the payment as per its order dated April 30, 2004. The CLB has subsequently amended its orders. CLB vide its latest order dated October 13, 2009 permitted the company to pay the total dues in four annual installments by December 31 every year from 2009 to 2012. The Company has repaid all the installments before 31st December, 2012 as permitted by CLB to all the depositors who have lodged their claims for repayments. Hence the Company has no unpaid deposits. The Company issues a fresh warrant / demand draft to the depositor on receipt of the stale warrant / demand draft or proper affidavit / undertaking. The amount is transferable to Investors Education and Protection Fund as Unclaimed matured deposits. The same are not due for transfer as on Balance Sheet Date.

Interest has been provided at the rates as per the claim before DRT or as ordered by it on the principal claimed by the banks. Also refer note 6.4.

In case of most of the buildings the change to the new name of the Company in the concerned records is to be completed.

Leased Assets shown as ''Sales/Transfer/Retirement'' consist mainly of completed leases. The leased assets shown above are mainly those where there are disputes or the transfers of title are not completed.

The assets sold / retired during the year include offices of the Company disposed off by the Recovery Officers of the Debt Recovery Tribunals.

The software used for computers was embeded in them or were purchased and capitalized with them over 10 years ago and are fully depreciated. The updating has been made by the clients to whom Company provided administrative services and hence are not capitalized.

A. The Long Term Investments as per the Accounting Standard 13 as notified by the Companies (Accounting Standards) Rules 2006 are classified Non Current investments.

B. Provision has been made on the basis of the Non-Banking Financial (Deposits Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007.

C. The Investments are valued at Cost and provisions are made as per the directions referred in B above.

D. Shares in unlisted companies (including Subsidiary company are held in physical form while Government securities are held in electronic form.

E. In case physically held securities (except subsidiary), the changing of Company''s name is under process.

F. No charge of SLR securities has been created in favour of the Public Depositors. This has been permitted by Reserve Bank of India.

G. The Investee Company''s status as Listed or Unlisted is as per the Company Data on the website of Ministry of Corporate Affairs at the current year end.

H. The meaning of abbreviations is A - Active, DO - Dormant, L- Liquidated, UL - Under Liquidation, USO - Under Strike Off. These particulars are from the same data as in G above. Shares of Liquidated Companies have been written off.

I. Provision on Standard Assets has been made @ 0.5% as per Reserve Bank of India''s directions.

Note 1.a

A. The Current Investments are included in this Schedule as per the Accounting Standard 13 as notified by the Companies (Accounting Standards) Rules 2006 and there are restrictions on trading imposed by Reserve Bank of India.

B. * These shares have been received by the Company on removal of defects in case of bad deliveries or for lost shares. These have been accounted at the market rate.

C. ** The Company''s application for duplicate shares / dematerialization not responded by respective Companies

D. Where the company has written off the value of a share/debenture/security due to non availability of market rate of a period exceeding six months, its value has been shown as Nil despite the quantitative number held as on the balance sheet date appearing. Others are valued at lower of cost or market value

E. Shares marked as (D) are in electronic form, others are in physical form. In case physical securities, the changing of Company''s name is under process.

F. The Investee Company''s status as Listed or Unlisted is as per the Company Data on the website of Ministry of Corporate Affairs at the current year end.

G. The meaning of abbreviations is A - Active, DO - Dormant, L- Liquidated, UL - Under Liquidation, USO - Under Strike Off. These particulars are from the same data as in G above. Shares of Liquidated Companies have been written off.

Note 1.b

i. The above receivables are outstanding for a period exceeding six months from the date they were due for payment

ii The above do not consist of any amount due from the Directors or Officers of the Company or Firms and Companies in which they are Partners/Directors

Note 1.c

The amount in the escrow account is maintained as per the directions of the Reserve Bank of India and the amount to be utilized for the purpose of repaying the fixed deposits.

i. Inter Corporate Deposit was given in earlier years and is doubtful of recovery. No interest has been accrued as per the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007.

ii. Bills Discounted are dues for bills discounted in earlier years and are doubtful of recovery. No interest has been accrued as per the Non-Banking Financial Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007.

iii. As per the Orders of the Debt Recovery Tribunals ordering the sale of Company''s Assets, the Recovery Officers have sold certain assets and realized these amounts to be appropriated to various lenders.

Note 1.f

i The above do not consist of any amount due from the Directors or Officers of the Company or Firms and Companies in which they are Partners/Directors

Note 2.1 Interest on loans

In the earlier years, the Company was providing simple interest @ 12.50% pa as was offered by the Company in 1999 with its proposal for settlement of bank dues. In the last year the Company has provided interest retrospectively on the basis of claim made by the lenders which is in most cases on compound basis and at higher rate. The interest for the current year and last year is as under:

NOTE 3

Contingent Liabilities :

i) Dividend on 13% Redeemable Cumulative Preference Shares is in arrears- Rs. 48,73,05,000/-15 years (previous Year Rs.45,48,18,000/-14 years)

ii) Income Tax Rs Nil ( Previous Year Rs 13,78,66,110/-)

iii) Wealth Tax Rs. 3,27,843/- ( Previous Year Rs. 3,27,843-)

iv) Sales Tax Rs. 23,14,158/- ( Previous Year Rs. 23,14,158/-)

v) Custom Duty Rs. Nil (Previous Year Rs. 7,00,000/-)

vi) Others Rs. 13,20,000/- (PY Rs. 27,50,760/-)

The above liabilities are dependent upon the outcome of appeals before various authorities and future distributable profits.

In the opinion of the Management, there is no possibility of reimbursement, except to the extent of taxes paid and included under Loans & Advances.

Claims against the Company not acknowledged as debts, as the same are disputed by the Company. Others Rs. 21,20,585/- (Previous Year Rs. 17,99,596-)

NOTE 4

CURRENT & DEFERRED TAX

There is no provision for Income Tax during the year due to loss.

The Company has not created the Deferred Taxation Asset as its utilization for set off against future taxable income is uncertain in the foreseeable future.

NOTE 5

The accumulated loss of Rs. 729,26,74,837/- (Previous Year Rs. 679;99,24,828/-) includes unabsorbed depreciation of Rs.170,09,26,683/- (Previous Year Rs. 1,70,02,99,479/-)

NOTE 6

The Company has paid an amount of Rs 11,05,605.96/- (PY Rs. 15,77,046.69/- ) towards Provident & Pension Funds and Gratuity & Superannuation Schemes. It has provided on actuarial basis a liability of Rs. 17,36,521/- (PY Rs. 16,80,063/-) as at the year end on account of leave benefit due to the employees. From 1.4.2009 the Employees Provident Fund Scheme has been transferred to the Regional PF Commissioner Kolkata. Hence the Employees PF Scheme, Employees Pension Scheme and Superannuation Scheme are Defined Contribution Schemes and the same are fully funded on the Balance Sheet date as per the schemes. Executive Provident Fund managed by the Trust and Gratuity managed by Life Insurance Corporation of India are defined benefit schemes and are fully funded on the Balance Sheet date as per the requirements of AS-15. During the year and amount of Rs. Nil (PY Rs. 2,61,749/-) was paid by the Company to the Trust due to lower income. The Trust managing the Executive Fund was wound up as the recognition under the Income Tax Act 1961 was proposed to be withdrawn with effect from 01.04.2012 as per the proposal of the Finance Bill 2012. Leave Liability as on Balance Sheet date is provided as per the requirements of AS-15 on the basis of Actuarial Certificate.

NOTE 7

As per Accounting Standard 15 "Employee Benefits", the disclosures of Employee benefits as defined in the Accounting Standard are given below:-Defined Contribution Plan

The Company''s Provident Fund is exempted under para 27 of Employees'' Provident Fund Scheme, 1952.Conditions for grant of exemptions stipulates that the benefits granted by the Funds will not be less favorable than those available under statutory fund. The trust was closed since the recognition was proposed to be withdrawn from 01.04.2012 as per the proposals in the Finance Bill 2012. The employees'' gratuity fund scheme is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation report furnished by them, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized on the basis of the actuarial certificate and is not funded

The Certificate for Gratuity is as given by the Life Insurance Corporation. In case of Leave encashment, the certificate is given by an Actuary

** ( The Company holds over 20% shareholding in these companies. These investments were made as Merchant Bankers. The Company does not have any significant influence over their managements and are hence not considered as Associates for related parties disclosures.)

(iv) Directors and other executives ( including those who were associated for part of the period)

Mr. H C Mathur Chairman & Managing Director

Segment Information

The Company''s present activity is to take steps to close its Non Banking Financial activities. The other activities have not made any significant progress. Hence there are no segments

NOTE 8

A sum of Rs. 26,350/-(P Y Rs. 94,695/-) is transferable to the Investors Education & Protection Fund at the end of the year.Fund. After the year end a sum of Rs. 26,350/-( P Y Rs. 94,695/-) have been transferred to the said Fund till the date of these statements.

NOTE 9

The Company follows the directions given by Reserve Bank of India (RBI) to Non Banking Financial Companies and maintains Statutory Liquidity Ratio (SLR) as per RBI''s instructions in the matter. The Company continues to be governed by the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007. However Consequent to the Net Worth of the Company having become negative, the restrictions placed by para 16 of these norms pertaining to a minimum Capital Adequacy of 12% and Para 19 (pertaining to acquisition of land and building other than for own use) and Para 20 (pertaining to Concentration of Credit/ Investment) could not be met.

NOTE 10

The details required as per Para 13 of the Non Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007 are annexed.

NOTE 11

The disclosures required as per Section 212(3) and 212(8) of the Companies Act, 1956 are annexed.

NOTE 12

Previous Year''s figures have been reclassified and /or regrouped wherever necessary to correspond with the current year''s classification and disclosures.

Notes:

1 As defined in Paragraph 2(1) (xii) of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.

2 Provisioning norms shall be applicable as prescribed in the Non-Banking Financial Companies Pridential Norms (Reserve Bank ) Directions, 2007.

3 All Accounting Standards and Guidance Notes issued by ICAI are applicable including for valuation of investments and other assets as also assets acquired in satisfaction of debt. However, market value in respect of quoted investments and break up/ fair value/ NAV in respect of unquoted investments should be disclosed irrespective of whether they are classified as long term or current in column (5) above.


Mar 31, 2012

A CFL Capital Financial Services Limited was incorporated in 1983 as Samudra Mahal Investments Limited as Public Company and continued to carry on Non Banking Financial Business and had the valid permissions ' for the same from Reserve Bank of India (RBI) and other authorities. Due to the poor financial condition of the Company, RBI cancelled its Certificate of Registration w.e.f 18-May-2004. However, the RBI has directed that the Company continues to be governed by the relevant provisions of the Act (RBI Act, 1934) and various directions/instructions issued by RBI from time to time until such time the entire amount of public deposits held by the company are repaid with interest and the entire financial assets are disposed of or the Company is converted to a non-banking non-financial company. As per its assets and income, the Company continues to be a Non Banking Financial Company. CFL has its registered office in Kolkata, West Bengal. Its Company Identification Number as given by Regiatrar of Companies, West Bengal, is L67120WB1983PLC036805. Its equity shares are listed on the Bombay Stock Exchange Limited.

B Going Concern

The networth of the Company has become negative due to the accumulated losses in the previous years. The Company has drawn a plan to liquidate assets, borrow money including from shareholders / promoters etc for meeting the liabilities of the financial year ending 31st March, 2013 Hence, the Accounts have been drawn up on a going concern basis. The winding up petition filed by a depositor in the previous year is pending before the Hon'ble Calcutta High Court.

C As the net owned fund of the Company are negative. Reserve Bank of India (RBI) has cancelled the registration of the Company as Non Banking Financial Company with effect from 18th May, 2004. Accordingly the Company cannot carry on any fresh Non Banking Financial activites. Hence these financial statements show the continuation of earlier operations / activities.

i. Rights of equity shareholders

Equity shareholders have the rights as provided under the Companies Act, 1956 and the Memorandum and Articles of Association of the Company.

The above amounts are due for repayment after 12 months from the date of the Balance Sheet.

Note 1.1 - Borrowings from Banks

i. The loans from Banks are secured by hypothecation of specified assets present and future, owned by the Company, Hire Purchase and Leased Assets and Boot Debts. However the value of the security offered to the banks is inadequate with respect to the amount due.

ii. The Company has entered into agreements with some banks for settlement of their dues and completed the settlements in earlier years. The Company is negotiating with the others including those who have initiated legal proceedings against the Company. The Adjudicating Authorities have decreed against the Company in man} cases and the Recovery Officers have commenced possession and disposal of these assets given as security to the bankers. The amount shown as payable is calculated on the basis of amounts decreed by the adjudication authorities along with the interest as decreed. in case the decree has not been passed the amount is computed on the basis of the claimed amount and with interest computed as per the claim. In the previous year amounts shown above are the Principal outstanding and the interest accrued and due thereon are based on the principal as per the Company's calculations that are based upon the earlier proposals/agreements entered into with the banks and approved in-principle by most of them. The Company could not pay the dues as per the proposal. The amount payable as on the Balance sheet date is disclosed in note 6.7 below.

iii. "Debts Recovery Tribunals (DRT) I & II Mumbai have passed decrees in favour of six banks. These banks have filed recovery proceedings against the Company Six more suits filed by other banks are pending - 3 before DRT-1 Mumbai and one each before DRTs at Delhi, Kolkata and Chennai. DRT-II Delhi had also passed i partial Decree against the Company in favour of one of the banks and consequently another recovery proceedings is pending before the Recovery Officer of DRT-II Delhi.-DRT-I Kolkata, DRT-II Delhi and the Recovery Officer of DRT-I Mumbai have passed injuction / status quo orders in case of mortgaged assets / properties The Recovery Officer of DRT-I Mumbai has appointed a Receiver in respect of the mortgaged properies in one such recovery proceeding. Two more execution proceedings filed by one of the banks are pending before Recovery Officers at DRTs at Hyderabad and Lucknow for the said properties. The mortgaged properties a" Ahmedabad, Kanpur, Lucknow and Pune have already been auctioned off, by the Recovery Officers in two recovery proceedings. The Company has also preferrec five appeals before the Debt Recovery Appellate Tribunals, Mumbai, which are pending before the Hon'ble Appellate Tribunal. In one of such recovery proceedings pending before DRT-I Mumbai, CEAT Ltd. has filed an intervention application The amounts were earlier advances as Working Capital limits and then converted into loans. Hence shown under this head.

The above amounts are the defaulted slums claimed by the lenders before the Debt Recovery Tribunals (DRT). These are admitted by DRT" and in some cases orders passed in their favor. The Claimed amount is the Principal as per the Lenders. The principal shown year is as per Company's claim.

The Recovery officers of the Debt Recovery Tribunals have sold some of the fixed assets mortgaged to the banks as security. The amount realised is held by the Recovery Officers on behalf of the above banks.

Note 1.2

The Company used to re-discount the bills which it used to discount of its clients in the course of its funding business. The amount is outstanding as the recovery from the discounters is pending and other disputes with the concerned discounters.

Note 1.3

These are short term loans that are interest free and due on demand.

Note 1.4 Sundry Creditors

Sundry Creditors include dues from subsidiary - Samudra Securities Limited Rs. 3,05,08,208.68 (Previous Year Rs. 3,04,08,208.68) Samudra Securities Limited (SSL) (formerly Ceat Securities Ltd)has become a subsidiary of the Company with effect from 1st April, 2003 as per the scheme of amalgamation approved by the Hon. High Courts of Madras and Calcutta. An amount of Rs. 304.08 lakhs is due to CSL on account of GOI securities purchased from them. This amount has remained unpaid for a few years on account of financial constraints. SSL has made a provision against the amount due to them. The Company has made no provision in its books, since the value of the investment would not be impaired if the dues to SSL are settled.

Note 1.5 - Unpaid Debentures

The 19% Secured Non Convertible debentures are secured by an exclusive charge/mortgage over specific assets given on Lease / Hire Purchase However the value of security including colateral security is inadequate with respect to amount due. The principal amount of Rs. 195 lakhs was payable as security to the bankers. The amount shown as payable is calculated on the basis of amounts claimed before the adjudication authorities along with interest as claimed. In the previous year amounts shown above are the Principal outstanding and the interest accrued and due thereon are based on the principal as per the Company's calculations that are based upon the earlier sanction given by Unit Trust of India in 1999-2000 at the time of reschedulement. The Company could not pay the dues as per the proposal. After the demerger of Unit Trust of India in 2002, the dues are bi-furcated between UTI Asset Management Co Ltd and the Administator of Specified Undertaking of Unit Trust of India. The amount due as on the Balance Sheet date is disclosed below.

Note 1.6 - Fixed Deposits

The Company has defaulted in repaying the deposits as per the original terms of the deposit. However the Company is repaying Fixed Depositors in instalments as per the Company Law Board's (CLB) orders dated 26.06.2001 and its subsequent modifications dated 11.09.2002, 30.04.2004, 28.02.2006, 07.02.2007 & 13.10.2009

As all Fixed Deposits have matured as per the Original terms, the full amount is shown as dues to fixed depositors. The CLB has also considered the .maturity amount while deciding about the amount of instalments Amount of deposits repayable, as per CLB Order dated 13.10.2009, within one year is Rs 15,99,10,994.10 (installment plus hardship cases) (PYRs. 11,54,21,933/-)

As per the order of the Honourable Company law Board (CLB) dated May 25, 2005, no delayed payment interest would be payable if the Company makes the payment as per its order dated April 30, 2004. The CLB has subsequently amended its orders. CLB vide its latest order dated October 13, 2009 permitted the company to pay the total dues in four annual installments by December 31 every year from 2009 to 2012. During the current year, the Company has paid the installment before 31st December, 2011 as permitted by CLB to all the depositors who have lodged their claims for repayments. Hence the Company has no unpaid deposits.

In case of most of the buildings the change to the new name of the Company in the records is to be completed.

Leased Assets shown as 'Sales/Transfer/Retirement' consist mainly of completed leases. The leased assets shown above are mainly those where there are disputes or the transfers of title are not completed.

The assets sold / retired during the year include offices of the Company disposed off by the Recovery Officers of the Debt Recovery Tribunals.

The software used for computers was emmbeded in them or were purchased and capitalised with them over 10 years ago and are fully depreciated. The updation has been made by the clients to whom Company provided administrative services and hence are not capitalised.

A. The Long Term Investments as per the Accounting Standard 13 as notified by the Companies (Accounting Standards) Rules 2006 are classified Non Current investments.

B. Provision has been made on the basis of the Non-Banking Financial (Deposits Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007. C The Investments are valued at Cost and provisions are made as per the directions referred in B above.

D. Shares in unlisted companies (including Subsidiary company) are held in physical form while Government securities are held in electronic form.

E. In case physically held securities (except subsidiary), the changing of Company's name is under process.

F. No charge of SLR securities has been created in favour of the Public Depositors. This has been permitted by Reserve Bank of India.

G. The Investee Company's status as Listed or Unlisted is as per the Company Data on the website of Ministry of Corporate Affairs at the current year end.

H. The meaning of abbreviations is A - Active, DO - Dormant, L- Liquidated, UL - Under Liqidation, USO - Under Strike Off. These particulars are from the same data as in G above. Shares of Liquidated Companies have been written off.

I. Provision on Standard Assets has been made @ 0.5% as per Reserve Bank of India's directions.

Note 2.a

A. The Current Investments are included in this Schedule as per the Accounting Standard 13 as notified by the Companies (Accounting Standards) Rules 2006 and there are restrictions on trading imposed by Reserve Bank of India.

B. * These shares have been received by the Company on removal of defects in case of bad deliveries or for lost Shares. These have been accounted at the market rate.

C ** The Company's application for duplicate shares / dematerialisation not responded by respective Companies

D. Where the company has written off the value of a share/debenture/security due to non availabilty of market rate of a period exceeding six months, its value has been shown as Nil despite the quantitative number held as on the balance sheet date appearing. Others are valued at lower of cost or market value

E. Shares marked as (D) are in electronic form, others are in physical form. In case physical securities, the changing of Company's name is under process.

F. The Investee Company's status as Listed or Unlisted is as per the Company Data on the website of Ministry of Corporate Affairs at the current year end.

G. The meaning of abbreviations is A - Active, DO - Dormant, L- Liquidate UL - Under Liquidation, USO - Under Strike Off. These particulars are from the same data as in G above. Shares of Liquidated Companies have been written off.

H On reduction of Capital, one equity share of Rs. 10/- each was allotted in lieu of 10 equity shares of Rs. 10 each held earlier.

Note 2.b

The amount in the escrow account is maintained as per the directions of the Reserve Bank of India and the amount to be utilised for the purpose of repaying the fixed deposits.

Note 2.c

i. Inter Corporate Deposit was given in earlier years and is doubtful of recovery. No interest has been accrued as per the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007.

ii. Bills Discounted are dues for bills discounted in earlier years and are doubtful of recovery. No interest has been accrued as per the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007. iii As per the Orders of the Debt Recovery Tribunals ordering the sale of Company's Assets, the Recovery Officers have sold certain assets and realised these amounts to be appropriated to various lenders.

Interest on loans

In the earlier years, the Company was providing simple interest @ 12.50% pa as was offered by the Company in 1999 with its proposal for settlement of bank dues. In the current year the Company has provided interest retrospectively on the basis of claim made by the lenders which is in most cases on compound basis and at higher rate. The interest for the current year and earlier year is as under:

CURRENT & DEFERRED TAX

There is no provision for Income Tax during the year due to loss..

The Company has not created the Deferred Taxation Asset as it utilisation for set off against future taxable income is uncertain in the for seeable future.

NOTE 3

The accumulated loss of Rs.679,99,24,824/- (Previous Year Rs. 511,34,85,531 /-) includes unabsorbed depreciation of Rs. 1,70,02,99,479/- (Previous Year Rs. 169,93,22.850/- )

NOTE 4 A

The Company has paid an amount of Rs 21,21,022/- (PY Rs. 12,21,909/-) Towards Provident & Pension Funds and Gratuity & Superannuation Schemes. It has provided on actuarial basis a liability of Rs. 10,94,219/- (PY Rs. 10,55,096/-) as at the year end on account of leave benefit due to the employees. From 1.4.2009 the Employees Provident Fund Scheme has been transferred to the Regional PF Commissioner Kolkata. Hence the Employees PF Scheme, Employees Pension Scheme and Superanuation Scheme are Defined Contribution Schemes and the same are fully funded on the Balance Sheet date as per the schemes. Executive Provident Fund managed by the Trust and Gratuity managed by Life Insurance Corporation of India are defined benefit schemes and are fully funded on the Balance Sheet date as per the requirements of AS-15. During the year and amount of Rs. 2,61,749/- (PY Rs. 4,80,500) was paid by the Company to the Trust due to lower income. Leave Liability as on Balance Sheet date is provided as per the requirements of AS-15 on the basis of Actuarial Certificate."

NOTE 5

As per Accounting Standard 15 "Employee Benefits", the disclosure of Employee benefits as defines in the Accounting Standard are given below:-

Defined Contribution Plan

Contribution to Defined Contribution Plan, recognised as expense for the year are as under:

NOTE 6

Related Party Disclosures

1. Relationships

(i) Shareholders in the Company

STEL Holdings Limited holds 34.27% equity share capital of the Company.

(ii) Subsidiary of the Company ,

Samudra Securities Ltd (formerly Ceat Securities Limited)

(iii) Other related parties

Ace Garment Export Ltd**

Indo Dean Leather Ltd**

Kaveri Polysacks Ltd.**

Spectrum Alkyd & ResinsLtd"

Ruia Hospitality Ltd**

** (The Company holds over 20% shareholding in these companies. These investments were made as Merchant Bankers. The Company does not have any significant influence over their managements and are hence not considered as Associates for related parties disclosures.)

(iv) Directors and other executives (including those who were associated for part of the period)

Mr H C Mathur - Managing Director

Segment information

The Company's present activity is to take steps to close its Non Banking Financial activities. The other activities have not made any significant progress. Hence there are no segments

NOTE 7

A sum of Rs. 94,695/- (P Y Rs. 86,029/-) is transferable to the Investors Education & Protection Fund at the end of the year. After the year end a sum of Rs. 86,029/- (P Y Rs. 3,45,148/-) have been transferred to the said Fund till the date of these statements.

NOTE 8

The Company follows the directions given by Reserve Bank of India (RBI) to Non Banking Financial Companies and maintains Statutory Liquidity Ratio (SLR) as per RBI's instructions in the matter. The Company continues to be governed by the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007. However, consequent to the Net Worth of the Company having become negative, the restrictions placed by para 16 of these norms pertaining to a minimum Capital Adequacy of 12% and Para 19 (pertaining to acquisition of land and building other than for own use) and Para 20 (pertaining to Concentration of Credit/ Investment) could not be met.

NOTE 9

The details required as per Para 13 of the Non Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007 are annexed.

NOTE 10

The disclosures required as per Section 212(3) and 212(8) of the Companies Act, 1956 are annexed.

NOTE 11

The Revised Schedule Vi has become effective from 1-Apr-2011 for the preparation of the financial statements. This has significantly impacted the disclosures and presentation in the financial statements. Previous Year's figures have been reclassified and /or regrouped wherever necessary to correspond with the current year's classification and disclosures.


Mar 31, 2011

1 Going Concern

The networth of the Company has become negative due to the accumulated losses in the previous years. The Company has drawn a plan to liquidate assets, borrow money and increase the capital. The Company is in the process of implementation of the same with the support from the creditors and shareholders. Hence, the Accounts have been drawn up on a going concern basis. The winding up petition filed by one of the creditors in the previous year is pending before the Hon'ble Calcutta High Court.

2 As the net owned fund of the Company are negative, Reserve Bank of India (RBI) has cancelled the registration of the Company as Non Banking Financial Company with effect from 18th May, 2004. Accordingly the Company cannot carry on as Non Banking Financial Company and has to take steps to close NBFC activity and convert itself into a Non-NBFC Company. These accounts show the operations of this activity.

The Company is contemplating to carry on Non Banking Non Financial business and the operations from this activity during this year are not significant and hence no separation is made.

3 As per the order of the Honourable Company Law Board (CLB) dated May 25, 2005, no delayed payment interest would be payable if the Company makes the payment as per its order dated April 30, 2004. The CLB has subsequently amended its orders. CLB vide its latest order dated October 13 2009 permitted the Company to pay the total dues in four annual installments by December 31 every year from 2009 to 2012. During the current year, the Company has paid the installment before 31st December, 2011 as permitted by CLB to all the depositors who have lodged their claims for repayments.

4 Inflow / Outflow in foreign currency during the year as well as previous year are nil.

5 Confirmations from most of the debtors, discounters and other parties have not been received and the amounts appearing in these statements are as per books of account of the Company. These balances have been examined from the point of Prudential Norms prescribed from time to time by the Reserve Bank of India and necessary adjustments and provisions made as prescribed in these norms. These are therefore treated as unsecured debtors and classified as such inspite of HP / Lease agreements with them. In case o NPA accounts where installments and / or finance charges are not received regularly, the steps as considered necessary, having regard to the operations of the borrowers and overall objectives of the Company, are taken from time to time.

6 Most of the Fixed Assets of the Company are in the nature of Corporate Assets since they are given as security to Secured Creditors and not as Cash Generating Units as defined in Accounting Standard 28 as notified under the Companies (Accounting Standards) Rules, 2006. Hence in the opinion of the Management there is no impairment of these Fixed Assets of the Company.

7 Fixed Assets are shown at lower of written down value or realisable value based on the valuation reports or the best estimates by the management in this regard for considering any impairment.

The same is within the limits prescribed by the Schedule XIII of the Companies Act, 1956 and as approved by the Central Government. The shareholders have approved the same at the Annual General Meeting held on 24th July, 2009.

8 There is no provision for Income Tax during the year.

9 The Government of India had introduced a new Pension Scheme with effect from 16.11.1995. There was a lot of opposition and many extablishments had filed writ petitions in various High Courts. These matters were finally clubbed, heard and decided by the Hon. Supreme Court of India in 2002. The Company deposited the relevant contribution along with interest with the Regional Provident Fund Commissioner, Kolkata (RPFC) in June 2002.

However due to the poor condition of the Company majority of the employees left the services of the Company between 1995 and 2002.

Their dues were settled by transfer of the total employer's contribution to the new employer's Provident fund or payment to the employees as Direct Settlements as per the rules of the scheme. The RPFC contends that the part of the Company's contibution atrributable to the Pension scheme should be deposited with them even if the same has been paid to the employees directly or to their suceeding employers. The RPFC has raised a demand of Rs 75,12,301/- (P.Y. Rs. 75,12,301/- ) consisting of contribution of Rs. 35,32,735/- (P.Y. Rs. 35,32,735/-) and Rs. 39,79,566/- (P.Y. Rs. 39,79,566/-) as interest thereon.The Company is advised that the demand is likely to be set aside since the Company has settled the dues of the employees in full.

10 The accumulated loss of Rs. 511,34,84,532/- (Previous Year Rs. 501,27,54,978/-) includes unabsorbed depreciation of Rs.169,93,22,850/- (Previous Year Rs.169,82,40,098/-)

11 Contingent Liabilities :

i) Dividend on 13% Redeemable Cumulative Preference Shares is in arrears- Rs. 42,23,31,000/- (Previous Year Rs.38,98,44,000/-)

ii) IncomeTax Rs 51,68,993/- (Previous Year Rs 5168,993/-)

iii) Sales Tax Rs. 1,55,99,969/- (Previous Year Rs. 1,55,99,969/-)

iv) Custom Duty Rs. 7,00,000/- (Previous Year Rs. 7,00,000/-)

v) Pension Scheme Rs. 75,12,301/- ( Previous Year Rs. 75,12,301/-)

vi) Others Rs. 69,74,203/- (PY Rs. 14,60,000/-)

The above liabilities are dependent upon the outcome of appeals before various authorities and future distrubutable profits.

In the opinion of the Management, there is no possibility of reimbursement, except to the extent of taxes paid and included under Loans & Advances.

12 Claims against the Company not acknowledged as debts, as the same are disputed by the Company.

Amounts claimed by Banks & UTI Rs.163,96,18,918/- (Previour Year Rs. /-) Others Rs. Nil/- (Previous Year Rs. 14,55,000/-)

13 Samudra Securities Limited (SSL) (formerly Ceat Securities Ltd.)has become a subsidiary of the Company with effect from 1st April, 2003 as per the scheme of amalgamation approved by the Hon. High Courts of Madras and Calcutta. An amount of Rs. 304.08 lakhs is due to SSL on account of GO securities purchased from them. This amount has remained unpaid for a few years on account of financial constraints. SSL has made a provision against the amount due to them. The Company has made no provision in its books, since the value of the investment would not be impaired if the dues to SSL are settled.

14 The Company has paid an amount of Rs 21,21,022/- (PY Rs. 12,21,909/-) towards Provident & Pension Funds and Gratuity & Superannuation Schemes. It has provided on actuarial basis a liability of Rs. 10,94,219/- (PY Rs. 10,55,096/-) as at the year end on account of leave benefit due to the employees. From 1.4.2009 the Employees Provident Fund Scheme has been transferred to the Regional PF Commissioner Kolkata. Hence the Employees PF Scheme, Employees Pension Scheme and Superanuation Scheme are Defined Contribution Schemes and the same are fully funded on the Balance Sheet date as per the schemes. Executive Provident Fund managed by the Trust and Gratuity managed by Life Insurance Corporation of India are defined benefit schemes and are fully funded on the Balance Sheet date as per the requirements of AS-15. During the year an amount of Rs. 4,80,500/- (PY Rs. 3,83,500) was paid by the Company to the Trust due to lower income. Leave Liability as on Balance Sheet date is provided as per the requirements of AS-15 on the basis of Actuarial Certificate.

15 As per Accounting Standard 15 "Employee Benefi ts", the disclosurs of Employee benefits as defi nes in the Accounting Standard are given below:-

Defined Contribution Plan

The Company's Provident Fund is exempted under para 27 of Employees' Provident Fund Scheme, 1952.Conditions for grant of exemptions stipulates that the benefits granted by the Funds will not be less favourable than those available under statutory fund.

The employees' Gratuity Fund scheme is managed by Life Insurance Corporation of India. The present value of obligation is determined based on actuarial valuation report furnished by them, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised on the basis of the actuarial certificate and is not funded.

16 Related Party Disclosures

1. Relationships

(i) Shareholders in the Company

THarrisons Malayalam Financial Services Ltd (a subsidairy of Harrisons Malayalam Ltd) holds 34.27% equity share capital of the Company. Instant Holdings Limited held over 20% of the equity share capital of the Company for part of the year.

(ii) Subsidiary of the Company

Samudra Securities Ltd (formerly Ceat Securities Limited)

(iii) Other related parties

Indo Dean Leather Ltd**

Spectrum Alkyd & Resins Ltd**

Ruia Hospitality Ltd**

** (The Company holds over 20% shareholding in these companies. These investments were made as Merchant Bankers. The Company does not have any significant influence over their managements and are hence not considered as Associates for related parties disclosures.)

(iv)Directors and other executives (including those who were associated for part of the period)

Mr. H.C. Mathur - Managing Director

17 Segment Information

The Company's present activity is to take steps to close its Non Banking Financial activities. The other activities have not made any significant progress. Hence there are no segments

18 Deferred Taxation

The Company has not created the Deferred Taxation Asset as it utilisation for set off against future taxable income is uncertain in the forseeable future.

19 A sum of Rs. 24,80,336/-(P Y Rs. 45,78,279/-) is transferable to the Investors Education & Protection Fund at the end of the year. After the year end a sum of Rs. 3,45,148/- ( P Y Rs. 39,29,759/-) has been transferred to the said Fund till the date of these statements.

20 The Company follows the directions given by Reserve Bank of India (RBI) to Non Banking Financial Companies and maintains Statutory Liquidity Ratio (SLR) as per RBI's instructions in the matter. The Company continues to be governed by the Non-Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007. However Consequent to the Net Worth of the Company having become negative, the restrictions placed by para 16 of these norms pertaining to a minimum Capital Adequacy of 12% and Para 19 (pertaining to acquisition of land and building other than for own use) and Para 20 (pertaining to Concentration of Credit / Investment) could not be met.

21 The details required as per Para 13 of the Non Banking Financial (Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007 are annexed.

22 Previous year's figures have been regrouped or recast wherever necessary to make them comparable with current year's figures.

 
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