Mar 31, 2015
Corporate Information:
The Registered Office of the Company is at Manipal (State: Karnataka).
The Company had commenced its business as Non- Banking Financial
Company registered with Reserve Bank of India as "Hire Purchase &
Leasing Company". However the Reserve Bank of India has since cancelled
the registration of the Company. The Company has stopped activities of
accepting deposits from public/debentures/subordinated debts, extending
loans, Hire Purchase and leasing activities since 1st day of July,
2002. The present activity of the Company is being mainly restricted to
recovery of dues and repayment of the debts. The other necessary
details are being given under note 5.01.
Note 1: Rights, Preferences and Restrictions attached to Shares
Equity Shares:
The equity shares having a par value of Rs.10 per share. Each
shareholder is eligible for one vote per each share held. The dividend
if any, proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting, except in
the case of interim dividend. In the event of liquidation, the equity
shareholders are eligible to receive the remaining assets of the
Company (after distribution of all preferential amounts including
payment to the preference shareholders) in proportion to their
shareholding.
SHARE CAPITAL
Preference Shares:
Non-Cumulative Redeemable Preference Shares shall be redeemable at par
after the expiry of 12 months but not later than 20 years from the
respective dates of allotment at the option of the holders of such
Shares by giving 3 months notice or at the discretion of the Board of
Directors. The shares are entitled for preferential right over dividend
(before the equity shareholders) at the rate of 11%, which is to be
proposed by the Board of Directors, which is subject to the approval of
the shareholders, in the ensuing Annual General Meeting, except in the
case of payment of dividend as "interim dividend". However the shares
are Non- Cumulative and therefore the shareholders are not entitled to
carry forward the dividend of a year to the forthcoming year/s, in case
the same is not declared in a year. In the event of liquidation, the
such shareholders are eligible to receive the face value (after
distribution of all preferential amounts) before the distribution of
assets to the equity shareholders. In case the assets available are not
sufficient to cover up the face value, then the same will be
distributed in proportion to their shareholding, if the surplus
available, after distribution of all preferential amounts.
Note 2: The Company during the year with a view towards
restructuring its liabilities has settled deposits/debentures/
subordinated debts at discounted rates. The same has been done with due
consent of the parties to deposits, debentures and debts. The interest
write back pertaining to deposits/debentures/subordinated debts Rs. 522
thousands (P. Y. Rs. 367 thousands) is treated as Extraordinary Income
in the Profit and Loss Account. Principal write back arising out of
such settlement Rs. 22,72 Thousands (P. Y. Rs. 14,96 thousands) is
considered as capital receipt and taken directly to Capital Reserve
(viz: Capital Reserve 2) as above. This has been done as per the
accounting policy followed by the Company, as stated in Note No. 23.01
(J). The Company had made similar settlements during the earlier years
also, by giving the similar accounting treatment.
Note 3 Special reserve was created during earlier year/s, pursuant
to Reserve Bank of India (Amendment) Act, 1997
Note 4. Advance for Sale of Property as disclosed above represents
amount received in advance in respect of the immovable property
(Land and Building Free Hold) agreed to be sold. The proceeds of the
Advance amount has been utilised by the Company to reduce its debts.
Note 5.The breakup lease security deposit(premises) is as follows:
due to related parties Rs. 75,00 thousands, (P.Y. Rs. 75,00
thousands), due to others Rs. 29,12 thousands (P.Y. Rs. 25,03
thousands).
Note 6: The liability in respect of leave encashment, provision made
on an estimated basis, considering the fact the amount involved therein
is not material.
Note 7: The Company has made the provision of Rs. 353 thousands towards
gratuity in respect of deficit of Present value of obligations over the
fair value of Plan Assets, during the year ending 31st March, 2009. The
Management is of the opinion that the provisions so made is adequate,
considering the fact that "Fair value of Plan Assets" is more than the
"deficit of Present value of obligations" as on 31st March, 2015.
Note 8: The Company has stopped accepting/renewing deposits,
debentures and subordinated debts with effect from 1st day of July,
2002. Therefore and also considering the fact that the public deposits
accepted by the Company are fully matured, the Company has not created
the floating charge in favour of the depositors, on the statutory
liquid assets invested in terms of directives issued by Reserve Bank of
India.
During the year ending 31st March, 2005 the Scheme of Compromise and
Arrangement under Section 391 of the Companies Act, 1956 to effect the
restructure of Company's debts particularly Debentures and Subordinated
Debts of the Company was framed and presented before the Honorable High
Court of Karnataka accordingly the meeting of the Shareholders,
Debentures Holders and Subordinated Debt holders were held on 20th
April, 2005. The scheme as proposed had provided for payment of
principal in a phased manner over 60 months from the effective date and
payment of interest accrued till 30th June, 2002, within 72 months from
the effective date. The scheme as proposed, do not provide for accrual
of interest after 30th June, 2002. (For the above purpose the effective
date means the date on which the Order of the High Court of Karnataka
sanctioning the Scheme of Arrangement is filed with the Registrar of
Companies in Karnataka.)
On 10th July, 2009, Honorable High Court of Karnataka has directed the
Company to submit the details of payments made to Non Convertible
Debenture holders and subordinated debt holders from 1st April, 2005.
Accordingly the details were furnished to Honorable Court. It was
submitted before the Honorable Court that the Company has settled
substantial portion of Non Convertible Debentures and subordinated
Debts and it was therefore felt that the scheme requires to be changed
having regard to the settlements already made and quantum of non
convertible debentures and subordinated debts remaining to be settled.
Therefore the Company had proposed to withdraw the scheme of
arrangement from the Honorable High Court of Karnataka, with an option
to present a new scheme of arrangement. The Honorable High Court of
Karnataka has permitted the Company to withdraw the petition, with
liberty to file a fresh petition, vide its order dated 28th October,
2009. Accordingly the Company is exploring the possibility of proposing
a fresh petition to be filed before the Honorable High Court of
Karnataka.
The total of the principal sum and interest due in respect of Public
deposits/debentures/subrodinated debts as on 31st March, 2002 (i.e. as
on the last date of the financial year, immediately preceding the year
in which the Company has stopped payment of its debts) was Rs.
1,07,44,26 thousands. The Company has settled the major portion of the
aforesaid dues from time to time, at the discounted rates (which
includes settlement of principal at discounted rates and partial/full
waiver of interest). Out of the aforesaid amount, a sum of Rs.
27,23,91 thousands (P.Y. Rs. 27,79,40 thousands) is remained unpaid as
on the date of the Balance Sheet, thereby the liability of the Company
reduced considerably over the period of time.
Further there are many instances, where the Company has received the
orders from various Consumer Courts (including the Appellate
Authorities/Courts acting under the Consumer Protection Act), regarding
the repayment or proceeds of debentures/debts/deposits with interest
and other costs. However the many of such depositors/debenture
holders/debt holders have approached the Company and Company has
settled their dues at the mutually agreed rates, which also includes
settlement at discounted rates. Many of the remaining such customers
have approached the Company for settlement.
The Company is continuing to put more efforts on realisation of the
dues, sale of assets etc., so that its debts can be settled at the
earliest possible date. The remaining depositors/debenture holders/debt
holders have approached the Company for settlement of their dues and
the Company is in the process for the same. Considering the above
facts, the Company has not provided/recognised for interest after 30th
June, 2002, on deposits/debentures/subordinated debts and interest on
advances taken on such instruments. All the aforesaid
deposits/debentures/subordinated debts are fully matured for repayment.
Any interest paid over and above the provision made till 30th June,
2002, charged to statement of profit and loss as Finance cost under
Note No.17.
Considering the facts that the Company has settled the dues of
depositors/debenture holders/debt holders at the discounted rates as
stated above, that the remaining customers have approached the Company
for settlement of their dues, that the orders issued by the various
consumer courts including the appellate authorities/courts therein,
that the Company has settled the many of such consumer court cases,
that the total debts of the Company reduced considerably because of
settlement as aforesaid and that the Company is exploring the
possibility of framing the new scheme of arrangement, it is not
feasible for the Company to ascertain accurately its liability on any
given date.
The Company has In view of the above and also considering the fact that
there are no unclaimed liabilities, the matured debentures, matured
deposits, matured subordinated debts and interest payable including
unencashed interest cheques on such deposits/debentures/debts has been
considered as "not due to be transferred to Investor Education and
Protection Fund".
Other items include balance lying unpaid after adjusting deposits with
loans borrowed against it. For the reasons as given above, the same has
not been considered as amount due to Investor Education and Protection
Fund.
Note 9: Unpaid Secured Non-convertible Debentures are secured by
mortgage on Land & Buildings (Free Hold and Lease Hold) situated at
Udupi District of State of Karnataka, State of Goa, Nasik District &
Mumbai in State of Maharashtra and floating charge on receivables and
book debts. The debentures were redeemable at par. The whole of the
debentures are matured for repayment. Further the Company has not
provided any interest on such debentures after 1st day of July, 2002,
as detailed in Note 5.01 above. Therefore the question of disclosure as
to rate of interest etc. does not arise. In the opinion of the
Management, the Market Value of the security after considering
provisions made in the books and also the property agreed to be sold as
detailed in note 3.01, offered to the holders of the aforesaid
Debenture is sufficient to cover the liability.
Note 10: The balances held under "unpaid matured unsecured public
deposits", "unpaid matured secured non- convertible debentures",
"unpaid unsecured subordinated debts", interest accrued on the
aforesaid deposit/ debenture/subordinated debts and "Other Payables"
are subject to confirmation.
Note 11: The Company has not received information from vendors
regarding their status under Micro, Small and Medium Enterprises
Development Act, 2006 and hence disclosure relating to amounts unpaid
as at the year end together with interest paid/payable under the
aforesaid Act has not been given.
Note 12. Other item also includes balance lying unpaid after
adjusting deposits with loans borrowed against it, tax deducted at
source remitted subsequently, other amounts received in the ordinary
course of business, which are not material in nature etc.
Note 13: The Inventories are valued at lower of cost and net
realisable value except in the case of unquoted shares. Unquoted Shares
held as inventories valued at lower of cost and breakup value. The list
of Shares held as stock in trade is as below:
Note 14: Cash and Cash equivalents does not include Term Deposits kept
with a maturity period of beyond 3 months, earmarked balances with banks
and bank deposits held as margin money or security against borrowings
etc. The same are being disclosed in Note No. 7 or 12 as the case may
be, as detailed in note no. 10.02 below.
Note 15: The details of total cash and bank balances is as below
(including earmarked bank balances, bank deposits held as security etc.)
Note 16:The Company had assigned under an assignment deed certain debts
& recoverable consisting inter-alia stock on hire along with equal
liabilities of the Company to the extent of Rs. 26,62,92 thousand on
30.09.1998 to Vedachala Electronics & Financial Services Private Limited
(VEFSPL). The company had discharged the assigned liabilities of VEFSPL
on its failure to service the same in terms of the Assignment deed,
which has resulted in Rs. 21,13,32 thousand (P.Y. Rs. 21,13,25
thousands) receivable from VEFSPL. The company based on the estimated
recovery has made a provision of Rs. 21,13,32 thousand (P.Y. Rs.
21,13,25 thousands) against the receivables of VEFSPL. The unsecured
Loans as disclosed in the above schedule includes this amount.
Note 17: The balances in Secured Loans, Unsecured Loans and Other
Loans & Advances as above are subject to confirmation.
Note 18: Other Loans and advances represents departmental deposit,
tour advances, and other petty advances made in the ordinary course of
business.
Note 19: Other receivables represents sundry amounts due from
borrowers, hirers etc., which are not material in nature.
Note 20: There are no purchases/sales of stock in trade during the
year and also during the immediate previous year.
Note 21: Disclosure as required under Accounting Standard 15 i.e.
Employee benefits, given under Note No. 23.09.
Note 22: Note No. 5.01 forms part of this note, which may also be
referred to.
Note 23: Depreciation as above comprises of depreciation on the
assets of which the useful life is determined to be Nil as on 1st
April, 2014 Rs. 14985 thousands and depreciation for the year Rs. 1320
thousands.
Note 24: The present activity of the Company is being restricted to
recovery of dues and repayment of the debts. Accordingly the income of
the Company depends upon the recoveries made during the period, which
varies substantially on year to year basis. Therefore the Company has
disclosed the amount of Bad debts recovered, reversal of provisions for
NPA and Bad debts written off under the head "Exceptional Item".
Mar 31, 2014
Note 1.02: Rights, preferences and restrictions attached to shares
Equity Shares:
The equity shares having a par value of Rs. 10 per share. Each
shareholder is eligible for one vote per each share held. The dividend
proposed if any, by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting, except in
the case of interim dividend. In the event of liquidation, the equity
shareholders are eligible to receive the remaining assets of the
Company (after distribution of all preferential amounts including
payment to the preference shareholders) in proportion to their
shareholding.
Preference Shares:
Non-Cumulative Redeemable Preference Shares shall be redeemable at par
after the expiry of 12 months but not later than 20 years from the
respective dates of allotment at the option of the holders of such
Shares by giving 3 months notice or at the discretion of the Board of
Directors. The shares are entitled for preferential right over dividend
(before the equity shareholders) at the rate of 11%, which is to be
proposed by the Board of Directors, which is subject to the approval of
the shareholders, in the ensuing Annual General Meeting, except in the
case of payment of dividend as "interim dividend". However the shares
are Non-Cumulative and therefore the shareholders are not entitled to
carry forward the dividend of a year to the forthcoming year/s, in case
the same is not declared in a year. In the event of liquidation, the
such shareholders are eligible to receive the face value (after
distribution of all preferential amounts) before the distribution of
assets to the equity shareholders. In case the assets available are not
sufficient to cover up the face value, then the same will be
distributed in proportion to their shareholding, if the surplus
available, after distribution of all preferential amounts.
Note 2.01: The Company during the year with a view towards
restructuring its liabilities has settled deposits/
debentures/subordinated debts at discounted rates. The same has been
done with due consent of the parties to deposits, debentures and debts.
The interest write back pertaining to deposits/debentures/ subordinated
debts Rs. 367 thousands (P.Y. Rs. 197 thousands) is treated as
Extraordinary Incpme in the Profit and Loss Account. Principal write
back arising out of such settlement Rs. 14,96 Thousands (P.Y. Rs. 61,94
thousands) is considered as capital receipt and taken directly to
Capital Reserve (viz: Capital Reserve 2) as above. This has been done
as per the accounting policy followed by the Company, as stated in note
no. 24.01 (J). The Company had made similar settlements during the
earlier years also, by giving the similar accounting treatment.
Note 2.02: Special reserve was created during earlier year/s, pursuant
to Reserve Bank of India (Amendment) Act, 1997. .
Note 3.01: Advance for Sale of Property as disclosed above represents
amount received in advance in respect of the immovable property (Land &
Building - Free Hold) agreed to be sold.
Note 3.02: The breakup lease security deposit (premises) is as follows:
due to related parties Rs. 75,00 thousands, (P.Y. Rs. 75,00 thousands),
due to others Rs. 25,03 thousands (P.Y Rs. 30,00 thousands).
Note 4.01: The liability in respect of leave encashment, provision made
on an estimated basis., considering the fact the amount involved
therein is not material.
Note 4.02: The Company has made the provision of Rs. 353 thousands
towards gratuity in respect of deficit of Present value of obligations
over the fair value of Plan Assets, during the year ending 31st March,
2009. The Management is of the opinion that the provisions so made is
adequate, considering the fact that "Fair value of Plan Assets is more
than the Present value of obligations" as on 31st March, 2014.
Note 5.01: The Company has stopped accepting/renewing deposits,
debentures and subordinated debts with effect from 1st day of July,
2002. Therefore and also considering the fact that the public deposits
accepted by the Company are fully matured, the Company has not
created the floating charge in favour of the depositors, on the
statutory liquid assets invested in terms of directives issued by
Reserve Bank of India.
During the year ending 31 st March, 2005 the Scheme of Compromise and
Arrangement under Section 391 Of the Companies Act, 1956 to effect the
restructure of Company''s debts particularly Debentures and Subordinated
Debts of the Company was framed and presented before the Honorable High
Court of Karnataka Accordingly the meeting of the Shareholders,
Debentures Holders and Subordinated Debt holders were held on 20th
April, 2005. The scheme as proposed had provided for payment of
principal in a phased manner over 60 months from the effective date and
payment of interest accrued till 30th June, 2002, within 72 months from
the effective date. The scheme as proposed, do not provide for accrual
of interest after 30th June, 2002. (For the above purpose the effective
date means the date on which the Order of the High Court of Karnataka
sanctioning the Scheme of Arrangement is filed with the Registrar of
Companies in Karnataka.)
On 10th July, 2009, Honorable High Court of Karnataka has directed the
Company to submit the details of payments made to Non-Convertible
Debenture holders and subordinated debt holders from 1st April, 2005.
Accordingly the details were furnished to Honorable Court. It was
submitted before the Honorable Court that the Company has settled
substantial portion of Non-Convertible Debentures and Subordinated
Debts and it was therefore felt that the scheme requires to be changed
having regard to the settlements already made and quantum of non
convertible debentures and subordinated debts remaining to be settled.
Therefore the Company had proposed to withdraw the scheme of arrangement
from the Honorable High Court of Karnataka, with an option to present
a new scheme of arrangement. The Honorable High Court of Karnataka has
permitted the Company to withdraw the petition, with liberty to file a
fresh petition, vide its order dated 28th October, 2009. Accordingly
the Company is exploring the possibility of proposing a fresh petition
to be filed before the Honorable High Court of Karnataka.
The total of the principal sum and interest due in respect of Public
deposits/debentures/subordinated debts as on 31st March, 2002 (i.e. as
on the last date of the financial year, immediately preceding the year
in which the Company has stopped payment of its debts) was Rs.
1,07,44,26 thousands. The Company has settled the major portion of the
aforesaid dues from time to time, at the discounted rates (which
includes settlement of principal at discounted rates and partial/full
waiver of interest). Out of the aforesaid amount, a sum of Rs. 27,79,40
thousands (P,Y. Rs. 28,19,89 thousands) is remained unpaid as on the
date of the Balance Sheet, thereby the liability of the Company reduced
considerably over the period of time.
Further there are many instances, where the Company has received the
orders from various Consumer Courts (including the Appellate
Authorities/Courts acting under the Consumer Protection Act), regarding
the repayment or proceeds of debentures/debts/deposits with interest
and other costs. However the many of such
depositors/debentureholders/debt holders have approached the Company
and Company has settled their dues at the mutually agreed rates, which
also includes settlement at discounted rates. Many of the remaining
customers have approached the Company for settlement. The Company is
continuing to put more efforts on realisation of the dues, sale of
assets etc., so that its debts can be settled at the earliest possible
date. Many of the remaining depositors/debenture holders/debt holders
have approached the Company for settlement of their dues and the
Company is in the process for the same. ''
Considering the above facts, the Company has not provided/recognised
for interest after 30th June, 2002, on deposits/debentures/subordinated
debts and interest on advances taken on such instruments. All the
aforesaid deposits/debentures/subordinated debts are fully matured for
repayment. Considering the facts that the Company has settled the dues
of depositors/debenture holders/debt holders at the discounted rates as
stated above, that the many of the remaining customers have approached
the Company for settlement of their dues, that the orders issued by the
various consumer courts including the appellate authorities/courts
therein, that the Company has settled the many of such consumer court
cases, that the total debts of the Company reduced considerably because
of settlement as aforesaid and that the Company is exploring the
possibility of framing the new scheme of arrangement, it is not
feasible for the Company to ascertain accurately its liability on any
given date. The Company has. in view of the above and also considering
the fact that there are no unclaimed liabilities, the matured
debentures, matured deposits, matured subordinated debts and interest
payable including unencashed interest cheques on such
deposits/debentures/debts has been , considered as "not due to be
transferred to Investor Education and Protection Fund".
Note 5.02: Other Payables include balance lying unpaid after adjusting
deposits with loans borrowed against it and unencashed stale interest
cheques. Pending reconciliation of the same for which the Company has
initiated a process and also for reasons as given in note 5.01 above,
the same has not been considered as amount due to Investor Education
and Protection Fund.
Note 5.03: Unpaid Secured Non-convertible Debentures are secured by
mortgage on Land & Buildings (Free hold and Lease Hold) situated at
Udupi District of State of Karnataka, State of Goa, Nasik District &
Mumbai in State of Maharashtra and floating charge on receivables and
book debts. The debentures- were redeemable at par. The whole of the
debentures are matured for repayment. Further the Company has not
provided any interest on such debentures after 1st day of July, 2002,
as detailed in Note 5.01 above. Therefore the question of disclosure as
to rate of interest etc. does not arise. In the opinion of the
Management, the Market Value of the security after considering
provisions made in the books and also the property agreed to be sold as
detailed in note 3.01, offered to the holders of the aforesaid
Debenture is sufficient to cover the liability.
Note 5.04: The balances held under "unpaid matured unsecured public
deposits", "unpaid matured secured non-convertible debentures",,
"unpaid unsecured subordinated debts", interest accrued on the
aforesaid deposit/debenture/subordinated debts and "Other Payables" are
subject to confirmation.
Note 5.05: The Company has not received information from vendors
regarding their status under Micro, Small and Medium Enterprises
Development Act, 2006 and hence disclosure relating to amounts unpaid
as at the year end together with interest paid/payable under the
aforesaid Act has not been given.
Note 5.06: Other Payable represents balance lying unpaid after
adjusting deposits with loans borrowed against it, tax deducted at
source remitted subsequently, other amounts received in the ordinary
course of business, which are not material in nature etc.
Note 6.01: The Company had revalued its Land and Buildings as at
01.10.1998 by approved valuer and the resultant increase of Rs 3,93,71
thousand was credited to Revaluation Reserve. Incremental depreciation
on revaluation is transferred to Profit and Loss Account. Accordingly
the whole value of lease hold land Rs. 22,620 thousands represents
revalued portion, which has not been amortised till the date of Balance
Sheet. Accordingly the revalued portion of lease hold land still stands
to the credit of "Revaluation Reserve", which would be adjusted on
termination of the lease. .
Note 6.02: Land and Building (freehold) also includes the property
agreed to be sold, as detailed in Note No. 3.01.
Note 6.03: Note 24.07, with regard to impairment of Assets, also forms
part of this Note, which may be referred to.
Note 9.01: The Inventories are valued at lower of cost and net
realisable value except In the case of unquoted shares. Unquoted Shares
held as inventories valued at lower of cost and breakup value. The list
of Shares held as stock in trade is as below: ''
Aggregate Value of 1. Unquoted Shares Rs. 91,43 thousands (P.Y. Rs.
91,43 thousands).
2. Quoted Shares Rs. 1 thousands (P.Y. Rs. 1 thousands). Market value
of quoted Shares Rs. 1 thousands (P.Y. Rs. 1 thousands).
Note 7.01: Cash and Cash equivalents does not include Term Deposits
kept with a maturity period of beyond 3 months, earmarked balances with
banks and bank deposits held as margin money or security against
borrowings etc. The same are being disclosed in Note No. 8 or 13 as the
case may be, as detailed in note no. 11.02 below.
Note 7.02: The details of total cash and bank balances is as below
(including earmarked bank balances, bank deposits held as security
etc.)
Note 8.01: The Company had assigned under an assignment deed certain
debts & recoverable consisting inter alia stock on hire along with
equal liabilities of the Company to the extent of Rs. 26,62,92 ,
thousand on 30.09.1998 to Vedachala Electronics & Financial Services
Private Limited (VEFSPL).
The company had discharged the assigned liabilities of VEFSPL on its
failure to service the same in terms of the Assignment deed, which has
resulted in Rs. 21,13,25 thousand (P.Y. Rs. 21,13,15 thousands)
receivable from VEFSPL. The company based on the estimated recovery has
made a provision of Rs. 21,13,25 thousand (P.Y. Rs. 21,13,15 thousands)
against the receivables of VEFSPL. The unsecured Loans as disclosed in
the above schedule includes this amount.
Note 8.02: The balances in Secured Loans, Unsecured Loans and Other
Loans & Advances as above are subject to confirmation. .
Note 8.03: Other Loans and advances represents departmental deposit,
tour advances, and other petty advances made in the ordinary course of
business.
Note 9.01: Disclosure as required under Accounting Standard 15 i.e.
Employee benefits, given under . Note No. 24.09.
Note 10.01: Note No. 5.01 forms part of this note, which may also be
referred to.
Note 11.01: The present activity of the Company is being restricted to
recovery of dues and repayment of the debts. Accordingly the income of
the Company depends upon the recoveries made during the period, which
varies substantially on year to year basis. Therefore the Company has
disclosed the amount of Bad debts recovered, reversal of provisions for
NPA and Bad debts written off under the head "Exceptional Item".
Note 11.02: Prior Period Adjustments (Expenses) of previous year has
arisen on account of settlement of debts done during the earlier
year/s.
11.03: The company has been incurring substantial losses over the last
few years and major portion of its funds are blocked in non-performing
assets. In view of the same there is considerable uncertainty that the
company will continue as a going concern and meet its commitments to
its creditors. The accounts however have been prepared on the going
concern basis in view of management''s efforts, to settle the
liabilities with the debenture holders and subordinated debt holders by
exploring the possibility of submitting a new scheme as detailed in
Note No. 5.01 and the management is being hopeful of recovery of dues
from borrowers so that dues of creditors can be settled.
11.04: The company has not recognised the net deferred tax asset which
constitutes mainly of carry forward losses, excess depreciation claimed
in Income Tax and Provisions for doubtful debts, as a matter of
prudence.
11.05: Disclosures in respect of related parties with whom transactions
have taken place during the year:
A. Key Management Personnel and his relatives Sri T. Narayan M. Pai,
Sri T. Sanjay Pai
11.05: Contingent & other Liabilities ;
a. Liability on debentures assigned to Vedachala Electronics and
Financial Services Private Limited inclusive of interest accrued is Rs.
17,99 thousand (P.Y. Rs. 17,95 thousand.), without considering interest
due on or after 1st day of July, 2002.
b. Liability in respect of damages and others in respect of suits
against the Company before various Courts, Consumer Courts etc. (in
respect of repayment of deposits/debentures/debts with interest & other
costs) has not been quantified and provided, due to lack of information
with the company and also considering the fact that many of such
customers have approached the Company for settlement at discounted
rates. The collection of information is under process.
c. No provision made for disputed income tax liability for various
years wherever department has preferred an appeal before the Tribunal,
High Court. The question of quantification of liability thereon, does
not arise, for the reason that the cases were allowed in favour of the
Company, by the lower appellate authorities.
11.06: The Management of the Company is of the opinion that the
director of the Company are not disqualified u/s 274(1) (g) of
Companies Act, 1956, [in spite of the fact that the Company has stopped
repaying matured Debentures/debts/deposits and interest thereon as
detailed in Note No. 5.01], for the reason that the Company is
exploring the possibility of presenting a new scheme of arrangement, as
detailed in the aforesaid note.
The Director of the Company Sri Chandappa R. Sherigar is the director
of another Company. As evident from the records/documents produced
before the Company, the another company has also stopped payment of
matured deposits/debentures and interest thereon after 30th June, 2002.
The Company has received a letter from him that he is not disqualified
u/s 274(1) (g) of Companies Act, 1956 for the reason that the another
Company is exploring the possibility of making an application before
the Honourable High Court of Karnataka U/S 391 of the Companies Act,
1956 for restructuring of its debts.
11.07: The assets of the Company are not valued, considering the cost
involved therein. However the management is of the opinion that the
carrying cost of the asset (including that of leased assets after
considering the Lease equalization Charge) does not exceed its
recoverable value. Further the Company does not have any information
whether internal or external, that indicates that "impairment loss may
have occurred". Accordingly the question of impairment of assets does
not arise.
11.08: The Company has not carried on any non banking business other
than repayment of liability out of recoveries. All the payments have
been centralized in head office. Powers are not given to the Branches
to incur the expenses. In the prevailing circumstances there is no need
for internal audit either at the H O level or at the Branch Level.
Therefore the management has took a decision not to have internafaudit
system.
11.09: Employee Benefits:
Brief description of the Plans:
a) The Company has two schemes for long term benefits such as provident
fund and gratuity. In case of funded schemes, the funds are recognized
by the Income tax authorities and administered through trustees/
appropriate authorities. The Company''s defined contribution plan is
employees'' provident fund (under the provisions of the Employees''
Provident Funds and Miscellaneous Provisions Act, 1952) wherein the
Company has no further obligation beyond making the contributions.
The Company is also contributing towards Employee State Insurance Plan,
as per statutory requirements, wherein the Company has no further
obligation beyond making the contributions.
The Company is also providing employee benefit by way of encashment of
earned leave. The provision for the same has been made on estimated
basis. The amount involved therein is not material, considering the
size of the Company. The Company has not opted for actuarial valuation,
considering the cost involved and also the concept of materiality.
The Company''s defined benefit plan is gratuity.
b) Charge to the Profit and Loss Account based on contributions:
The Company''s contribution to Provident Fund charged to Statement of
Profit and Loss during the year is Rs. 58 thousands (P.Y. Rs. 56
thousands).
The Company''s Contribution to Employee State Insurance Plan charged to
Statement Profit and Loss during the year is Rs. 20 thousands (P.Y. Rs.
17 thousands).
The Companies liability towards gratuity to employees covered by group
gratuity policy with LIC of India. Premium paid on this account is Rs.
36 thousands (P.Y. Rs. 36 thousands)!
The detail of provision for leave encashment is as under: Provision as
on 1st April, 2013 Rs. 88 thousands (P.Y. Rs. 1,09 thousands) Amount
charged to the Statement profit & loss during the year Rs. Nil (P.Y.
Rs. Nil). Actual payment during the year is NIL (P.Y, Rs. 21
thousands). Provision as on 31st March, 2014 Rs. 88 thousands (P.Y. Rs.
88 thousands). -
c) Disclosures for defined gratuity benefit plans based on actuarial
reports obtained from Life Insurance Corporation of India as on 31st
March, 2014:
Valuation Method: Projected Unit Credit Method.
(*) The Life Insurance Corporation of India has not given these
information.
The Company has written to Life Insurance Corporation of India to
furnish information of the Defined Gratuity Benefit Plan, in the manner
required under Accounting Standard 15. Accordingly the Life Insurance
Corporation of India has given the information as given above, which
has been relied by the Auditors.
(#) The Company has made the provision of Rs. 353 thousands in
respect of deficit of Present value of obligations over the fair value
of Plan Assets, during the year ending 31st March, 2009 and therefore
the question of making further provision does not arise.
12.1: In the opinion of the Board of Directors, the assets listed
under the head Non Current Assets & Current Assets (other than Fixed
Assets and Non Current Investments) in the Balance Sheet (viz: assets
covered under Note No. 8 to 13), have a value on realisation in the
ordinary course of business at least equal to the amount at which they
are stated.
12.2: The Company has earned profit during the financial year i.e.
year ending 31st March, 2014, due to Exceptional Income as stated in
Note 21 and Extraordinary Income as stated in Note 22. The Company
would have incurred loss, if the income as aforesaid were not earned.
12.3: The Company is operating under one Geographical and Business
segment. Therefore the question of making disclosures as required under
Accounting Standard 17 does not arise.
12.4 Previous Year''s amounts are regrouped/reclassified/rearranged,
wherever necessary.
Notes:
1. Previous Year''s figures are regrouped, rearranged and reclassified
wherever necessary.
2. Cash Flow statement is being prepared under "Indirect -Method" as
laid down under Accounting Standard 3 of, Companies (Accounting
Standards) Rules 2006.
3. Cash and Cash equivalents does not include term deposit kept with
Banks which are kept for maturity period beyond 3 months/earmarked bank
balances. These are disclosed in Note No. 8 & 13 of Balance Sheet.
Mar 31, 2013
Note 1.01: The present activity of the Company is being restricted to
recovery of dues and repayment of the debts. Accordingly the income of
the Company depends upon the recoveries made during the period, which
varies substantially on year to year basis. Therefore the Company has
disclosed the amount of Bad debts recovered, reversal of provisions for
NPA and Bad debts written off under the head "Exceptional Item".
Note 1.02: Prior Period Adjustments has arisen on acocunt of
settlement of debts done during the earlier year/s.
2.01 The company has been incurring substantial losses over the last
few years and major portion of its funds are blocked in non-performing
assets. In view of the same there is considerable uncertainty that the
company will continue as a going concern and meet its commitments to
its creditors. The accounts however have been prepared on the going
concern basis in view of management''s efforts to settle the liabilities
with the debenture holders and subordinated debt holders by exploring
the possibility of submitting a new scheme as detailed in Note No. 5.01
and the management is being hopeful of recovery of dues from borrowers
so that dues of creditors can be settled.
2.02 The company has not recognised the net deferred tax asset which
constitutes mainly of carry forward losses, excess depreciation claimed
in Income Tax and Provisions for doubtful debts, as a matter of
prudence.
2.03 Disclosures in respect of related parties with whom transactions
have taken place during the year:
A. Key Management Personnel and his relatives Sri T. Narayana M. Pai
Sri T. Sanjay Pai
B. Associate Companies
Vedachala Electronics and Financial Services Pvt. Limited Manipal
Housing Finance Syndicate Limited
2.04 Contingent & other Liabilities :
a. Liability on debentures assigned to Vedachala Electronics and
Financial Services Private Limited inclusive of interest accrued is
Rs.17,99 thousand. (P.Y. Rs.18,11 thousand), without considering
interest due on or after 1st day of July, 2002.
b. Liability in respect of damages and others in respect of suits
against the Company before various Courts, Consumer Courts etc. (in
respect of repayment of deposits/debentures/debts with interest & other
costs) has not been quantified and provided, due to lack of information
with the company and also considering the fact that many of such
customers have approached the Company for settlement at discounted
rates. The collection of information is under process.
c. No provision made for disputed income tax liability for various
years wherever department has preferred an appeal before the Tribunal,
High Court. The question of quantification of liability thereon, does
not arise, for the reason that the cases were allowed in favour of the
Company, by the lower appellate authorities.
2.05 The Management of the Company is of the opinion that the
directors of the Company are not disqualified u/s 274(1) (g) of
Companies Act, 1956, [in spite of the fact that the Company has stopped
repaying matured Debentures/debts/deposits and interest thereon as
detailed in Note No. 5.01], for the reason that the Company is
exploring the possibility of presenting a new scheme of arrangement, as
detailed in the aforesaid note.
The Director of the Company Sri Chandappa R. Sherigar is the directors
of another Company. As evident from the records/documents produced
before the Company, the another company has also stopped payment of
matured deposits/debentures and interest thereon after 30th June, 2002.
The Company has received a letter from him that he is not disqualified
u/s 274(1) (g) of Companies Act, 1956 for the reason that the another
Company is exploring the possibility of making an application before
the Honourable High Court of Karnataka u/s 391 of the Companies Act,
1956 for restructuring of its debts.
2.06 The assets of the Company are not valued, considering the cost
involved therein. However the management is of the opinion that the
carrying cost of the asset (including that of leased assets after
considering the Lease equalization Charge) does not exceed its
recoverable value. Further the Company does not have any information
whether internal or external, that indicates that "impairment loss may
have occurred". Accordingly the question of impairment of assets does
not arise.
2.07 The Company has not carried on any non-banking business other
than repayment of liability out of recoveries. All the payments have
been centralized in head office. Powers are not given to the Branches
to incur the expenses. In the prevailing circumstances there is no need
for internal audit either at the H.O. level or at the Branch Level.
Therefore the management has took a decision not to have internal audit
system. ''
2.08 Employee Benefits:
Brief description of the Plans :
a) The Company has two schemes for long-term benefits such as provident
fund and gratuity. In case of funded schemes, the funds are recognized
by the Income tax authorities and administered through trustees /
appropriate authorities. The Company''s defined contribution plan is
employees'' provident fund (under the provisions of the Employees''
Provident Funds and Miscellaneous Provisions Act, 1952) wherein the
Company has no further obligation beyond making the contributions.
The Company is also contributing towards Employee State Insurance Plan,
as per statutory requirements, wherein the Company has no further
obligation beyond making the contributions.
The Company is also providing employee benefit by way of encashment of
earned leave. The provision for the same has been made on estimated
basis. The amount involved therein is not material, considering the
size of the Company. The Company has not opted for actuarial valuation,
considering the cost involved and also the concept of materiality.
The Company''s defined benefit plan is gratuity.
b) Charge to the Profit and Loss Account based on contributions:
The Company''s contribution to Provident Fund charged to Statement of
Profit and Loss during the year is Rs.56 thousands. (P.Y.: Rs.58
thousands)
The Company''s Contribution to Employee State Insurance Plan charged to
Statement Profit and Loss during the year is Rs.17 thousands (P.Y.
Rs.18 thousands)
The Companies liability towards gratuity to employees covered by group
gratuity policy with LIC of India. Premium paid on this account is
Rs.36 thousands (P.Y. Rs.1,67 thousands).
The detail of provision for leave encashment is as under: Provision as
on 1s'' April, 2012 Rs.1,09 thousands (P.Y. Rs.1,09 thousands). Amount
charged to the Statement profit & loss during the year Rs. Nil (P.Y.
Rs. Nil). Actual payment during the year Rs.21 thousands (P.Y. Rs.
Nil). Provision as on 31s1 March, 2013 Rs.88 thousands (P.Y. Rs.1,09
thousands).
2.09 In the opinion of the Board of Directors, the assets listed under
the head Non Current Assets & Current Assets (other than Fixed Assets
and Non-Current Investments) in the Balance Sheet (viz. assets covered
under Note No. 8 to 13), have a value on realisation in the ordinary
course of business at least equal to the amount at which they are
stated.
2.10 The Company has earned profit during the immediate previous
financial year i.e. year ending 31s'' March, 2012, mainly due to
Exceptional Income as stated in Note 21 and Extra Ordinary Income as
stated in Note 22.
2.11 The Company is operating under one Geographical and Business
segment. Therefore the question of making disclosures as required under
Accounting Standard 17 does not arise.
2.12 Previous Year''s amounts are regrouped/reclassified/rearranged,
wherever necessary.
Mar 31, 2012
Note 1.02: Rights, preferences and restrictions attached to shares
Equity Shares:
The equity shares having a par value of Rs. 10 per share. Each
shareholder is eligible for one vote per each share held. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting, except in the case
of interim dividend. In the event of liquidation, the equity
shareholders are eligible to receive the remaining assets of the
Company (after distribution of all preferential amounts including
payment to the preference shareholders) in proportion to their
shareholding.
Preference Shares:
Non-Cumulative Redeemable Preference Shares shall be redeemable at par
after the expiry of 12 months but not later than 20 years from the
respective dates of allotment at the option of the holders of such
Shares by giving 3 months notice or at the discretion of the Board of
Directors. The shares are entitled for preferential right over dividend
(before the equity shareholders) at the rate of 11%, which is to be
proposed by the Board of Directors, which Is subject to the approval of
the shareholders, in the ensuing Annual General Meeting, except In the
case of payment of dividend as "interim dividend". However the
shares are Non-Cumulative and therefore the shareholders are not
entitled to carry forward the dividend of a year to the forth coming
year/s, in case the same is not declared in a year. In the event of
liquidation, the such shareholders are eligible to receive the face
value (after distribution of all preferential amounts) before the
distribution of assets to the equity shareholders. In case the assets
available are not sufficient to cover up the face value, then the same
will be distributed in proportion to their shareholding, if the surplus
available, after distribution of all preferential amounts.
Note 2.01: The Company during the year with a view towards
restructuring its liabilities has settled deposits/
debentures/subordinated debts at discounted rates without interest. The
same has been done with due consent of the parties to deposits,
debentures and debts. The interest write back pertaining to
deposits/debentures/subordinated debts Rs.41,25 thousands (P Y Rs.36,91
thousands) is treated as Extra-Ordinary Income in the Profit and Loss
Account. Principal write back arising out of such settlement Rs.1,67,11
thousands (P Y Rs. 1,46,31 thousands) is considered as capital receipt
and taken directly to Capital Reserve (viz: Capital Reserve 2) as
above. This has been done as per the accounting policy followed by the
Company, as stated in Note No. 24.01 (J).
Note 2.02 Special reserve was created during earlier year/s, pursuant
to Reserve Bank of India (Amendment) Act 1997.
Note 3.01: Advance for Sale of Property as disclosed above represents
amount received in advance in respect of the immovable property agreed
to be sold. This immovable property is being charged to debentures as
detailed in note no.5.03 and therefore will be transferred at a future
date, after obtaining the necessary approvals from the appropriate
authorities.
3.02: The break-up lease security deposit (premises) is as follows: due
to related parties Rs.75,00 thousands, (P Y Rs.75,00 thousands), due to
others Rs.30,00 thousands (P Y Rs.30,00 thousands).
Note 4.01: The liability in respect of leave encashment, provision made
on an estimated basis., considering the fact the amount involved
therein is not material.
4.02: The Company has made the provision of Rs.353 thousands towards
gratuity in respect of deficit of Present value of obligations over the
fair value of Plan Assets, during the year ending 31st March 2009.
Note 5.01: During the year ending 31st March 2005 the Scheme of
Compromise and Arrangement under Section 391 of the Companies Act 1956
to effect the restructure of Company's debts particularly Debentures
and subordinated debts of the Company was framed and presented before
the Honorable High Court of Karnataka. Accordingly the meeting of the
Shareholders, Debenture Holders and Subordinated Debt holders were held
on 20th April, 2005. The scheme as proposed had provided for payment of
principal in a phased manner over 60 months from the effective date and
payment of interest accrued till 30lfl June 2002, within 72 months from
the effective date. The scheme as proposed, do not provide for accrual
of interest after 30th June 2002. (For the above purpose the effective
date means the date on which the Order of the High Court of Karnataka
sanctioning the Scheme of Arrangement is filed with the Registrar of
Companies in Karnataka.)
On 10th July 2009, Honorable High Court of Karnataka has directed the
Company to submit the details of payments made to Non Convertible
Debenture holders and subordinated debt holders from 1st April 2005.
Accordingly the details were furnished to Honorable Court. It was
submitted before the Honorable Court that the Company has settled
substantial portion of Non Convertible Debentures and Subordinated
Debts and It was therefore felt that the scheme requires to be changed
having regard to the settlements already made and quantum of non
convertible debentures and subordinated debts remaining to be settled.
Therefore the Company had proposed to withdraw the scheme of
arrangement from the Honorable High Court of Karnataka, with an option
to present a new scheme of arrangement. The Honorable High Court of
Karnataka has permitted the Company to withdraw the petition, with
liberty to file a fresh petition, vide its order dated 28th October
2009. Accordingly the Company is exploring the possibility of proposing
a fresh petition to be filed before the Honorable High Court of
Karnataka.
"Considering the above, the Company has not provided/recognized for
interest after 30th June 2002, on debentures/subordinated debts and
interest on advances taken on such instruments. Pending presentation of
fresh proposal as aforesaid and final outcome of the new Scheme (to be
prepared and presented), the contingent Liability on account of
Interest on Deposits/Debentures etc. accruing after30th June 2002,is
not quantifiable.
The public deposits accepted by the Company are fully matured. The
Company has not provided for interest on these deposits after 3Oth June
2002. The interest not so provided for is not accurately quantifiable.
In view of the above and also considering the fact that there are no
unclaimed liabilities, the matured debentures, matured deposits,
matured subordinated debts and interest payable including unencashed
interest cheques on such deposits/debentures/debts has been considered
as "not due to be transferred to Investor Education and Protection
Fund".
The Company has stopped accepting/renewing deposits, debentures and
subordinated debts with effect from 1st day of July 2002. Therefore and
also considering the fact that the public deposits accepted by the
Company are fully matured, the Company has not created the floating
charge in favour of the depositors, on the statutory liquid assets
invested in terms of directives issued by Reserve Bank of India.
5.02 Other Payables include balance lying unpaid after adjusting
deposits with loans borrowed against it and unencashed stale interest
cheques. Pending reconciliation of the same for which the Company has
initiated a process and also for reasons as given in note 5.01 above,
the same has not been considered as amount due to Investor Education
and Protection Fund.
5.03 Unpaid Secured Non-convertible Debentures are secured by mortgage
on Land - Freehold & Buildings - Freehold, as disclosed in Note No.6
and floating charge on receivables and book debts. The debentures were
redeemable at par. The whole of the debentures are matured for
repayment. Further the Company has not provided any interest on such
debentures after 1st day of July 2002, as detailed in Note 5.01 above.
Therefore the question of disclosure as to rate of interest etc. does
not arise. In the opinion of the Management, the Market Value of the
security after considering provisions made in the books and also the
property agreed to be sold as detailed in note 3.01, offered to the
holders of the aforesaid Debenture is sufficient to cover the
liability.
5.04 The balances held under "unpaid matured unsecured public
deposits", "unpaid matured secured non- convertible debentures",
"unpaid unsecured subordinated debts", interest accrued on the
aforesaid deposit/debenture/subordinated debts and "Other Payables" are
subject to confirmation.
5.05 The Company has not received information from vendors regarding
their status under Micro, Small and Medium Enterprises Development Act,
2006 and hence disclosure relating to amounts unpaid as at the year end
together with interest paid/payable under the aforesaid Act has not
been given.
5.06 Other Payable represents balance lying unpaid after adjusting
deposits with loans borrowed against it, tax deducted at source
remitted subsequently, other amounts received in the ordinary course of
Note 6.01: The Company had revalued its Land and Buildings as at
01.10.1998 by approved valuer and the resultant increase of Rs.3,93,71
thousand was credited to Revaluation Reserve. Incremental depreciation
on revaluation is transferred to Profit and Loss Account. Accordingly
the whole value of leasehold land Rs.22620 thousands represents
revalued portion, which has not been amortized till the date of Balance
Sheet. Accordingly the revalued portion of leasehold land still stands
to the credit of "Revaluation Reserve", which would be adjusted on
termination of the lease.
Note 6.02: Land and Building (freehold) also includes the property
agreed to be sold, as detailed in note no. 3.01.
Note 7.01: Cash and Cash equivalents does not include Term Deposits
kept with a maturity period of beyond 3 months, earmarked balances with
banks and bank deposits held as margin money or security against
borrowings etc. The same are being disclosed in Note No.8 or 13 as the
case may be, as detailed in note no. 11.02 below.
Note 8.01: The Company had assigned under an assignment deed certain
debts & recoverable consisting inter alia stock on hire along with
equal liabilities of the Company to the extent of Rs. 26,62,92 thousand
on 30.09.1998 to Vedachala Electronics & Financial Services Private
Limited (VEFSPL). The company had discharged the assigned liabilities
of VEFSPL on its failure to service the same in terms of the Assignment
deed, which has resulted in Rs. 21,13,03 thousand (P Y Rs. 21,36,74
thousands) receivable from VEFSPL. The company based on the estimated
recovery has made a provision of Rs.21,13,03 thousand (P Y Rs.21,36,74
thousands) against the receivables of VEFSPL. The unsecured Loans as
disclosed in the above schedule includes this amount.
8.02 The balances in Secured Loans, Unsecured Loans and Other Loans &
Advances as above are subject to confirmation.
8.03 Other Loans and advances represents departmental deposit, tour
advances, and other petty advances made in the ordinary course of
business.
Note 9.01: The present activity of the Company is being restricted to
recovery of dues and repayment of the debts. Accordingly the income of
the Company depends upon the recoveries made during the period, which
varies substantially on year to year basis. Therefore the Company has
disclosed the amount of Bad debts recovered, reversal of provisions for
NPA and Bad debts written off under the head "Exceptional Item".
9.02 The company has been incurring substantial losses over the last
few years and major portion of its funds are blocked in non-performing
assets. In view of the same there is considerable uncertainty that the
company will continue as a going concern and meet its commitments to
its creditors. The accounts however have been prepared on the going
concern basis in view of management's efforts to settle the
liabilities with the debenture holders and subordinated debt holders by
exploring the possibility of submitting a new scheme as detailed in
Note No. 5.01 and the management is being hopeful of recovery of dues
from borrowers so that dues of creditors can be settled.
9.03 The company has not recognized the net deferred tax asset which
constitutes mainly of carry forward losses, excess depreciation claimed
in Income Tax and Provisions for doubtful debts, as a matter of
prudence.
9.04 Contingent & Other Liabilities:
a. Liability on debentures assigned to Vedachala Electronics and
Financial Services Private Limited inclusive of interest accrued is Rs.
16,41 thousand. (P.Y. Rs. 22,23 thousand.), without considering
interest due on or after 1st day of July 2002.
b. Liability in respect of damages and others in respect of suits
against the Company before various Courts, Consumer Courts etc. (in
respect of repayment of deposits/debentures/debts with interest & other
costs) has not been quantified and provided, due to lack of information
with the company. The collection of information is under process.
c. No provision made for disputed income tax liability for various
years wherever department has preferred an appeal before the Tribunal,
High Court for the reason that the appeal preferred before CIT
(Appeals) and Tribunal were allowed in favour of the company. The
amounts involved there in are not quantifiable.
9.05 The Management of the Company is of the opinion that the
directors of the Company are not disqualified u/s 274(1) (g) of
Companies Act, 1956 [in spite of the fact that the Company has stopped
repaying matured Debentures/debts/deposits and interest thereon as
detailed in note no. 5.01], for the reason that the Company is
exploring the possibility of presenting a new scheme of arrangement, as
detailed in the aforesaid note.
The Managing Director of the Company Sri T. Narayan M. Pai & the other
director Sri Chandappa R. Sherigar are the directors of another
Company. As evident from the records/documents produced before the
Company, the another company has also stopped payment of matured
deposits/debentures/debts and interest thereon after SO"1 June 2002.
The Company has received a letter from them that they are not
disqualified u/s 274(1) (g) of Companies Act, 1956 for the reason that
the another Company is exploring the possibility of making an
application before the Honourable High Court of Karnataka U/s 391 of
Companies Act,1956 for restructuring of its debts.
9.06 The assets of the Company are not valued, considering the cost
involved therein. However the management is of the opinion that the
carrying cost of the asset (including that of leased assets after
considering the Lease Equalization Charge) does not exceed its
recoverable value. Further the Company does not have any information
whether internal or external, that indicates that "impairment loss
may have occurred". Accordingly the question of impairment of assets
does not arise.
9.07 The Company has not carried on any non-banking business other
than repayment of liability out of recoveries. All the payments have
been centralized in head office. Powers are not given to the Branches
to incur the expenses. In the prevailing circumstances there is no need
for internal audit either at the H.O. level or at the Branch Level.
Therefore the management has took a decision not to have internal audit
a) The Company has two schemes for long-term benefits such as provident
fund and gratuity. In case of funded schemes, the funds are recognized
by the Income tax authorities and administered through trustees /
appropriate authorities. The Company's defined contribution plan is
employees' provident fund (under the provisions of the Employees'
Provident Funds and Miscellaneous Provisions Act, 1952) where in the
Company has no further obligation beyond making the contributions.
The Company is also contributing towards Employee State Insurance Plan,
as per statutory requirements, wherein the Company has no further
obligation beyond making the contributions. The Company is also
providing employee benefit by way of encashment of earned leave. The
provision for the same has been made on estimated basis. The amount
involved therein is not material, considering the size of the Company.
The Company has not opted for actuarial valuation, considering the cost
involved and also the concept of materiality.
b) Charge to the Profit and Loss Account based on contributions:
The Company's contribution to Provident Fund charged to Statement of
Profit and Loss during the year is Rs.58 thousands. (P Y : Rs.67
thousands).
The Company's Contribution to Employee State Insurance Plan charged to
Statement of Profit and Loss during the year is Rs.18 thousands (P Y
Rs.20 thousands).
The Companies liability towards gratuity to employees covered by group
gratuity policy with LIC of India. Premium paid on this account is
Rs.1,67 thousands ( P Y Rs. 1,72 thousands).
The detail of provision for leave encashment is as under: Provision as
on 1st April 2011 Rs. 1,09 thousands ( P Y Rs.1,09 thousands). Amount
charged to the Statement of Profit & Loss during the year Rs. Nil (P Y
Rs. Nil). Actual payment during the year Rs. Nil. (P Y Rs.Nil).
Provision as on 31st March 2012 Rs. 1,09 thousands (P Y Rs.1,09
thousands).
(*) The Life Insurance Corporation of India has not given these
in formations.
The Company has written to Life Insurance Corporation of India to
furnish information of the Defined Gratuity Benefit Plan, in the manner
required under Accounting 15. Accordingly the Life Insurance
Corporation of India has given the information as given above, which
has been relied by the Auditors.
(#) The Company has made the provision of Rs.353 thousands in respect
of deficit of Present value of obligations over the fair value of Plan
Assets, during the year ending 31st March 2009 and therefore the
question of making further provision does not arise.
9.8 The Company has incurred the profit during the year under audit
mainly due to Exceptional income as stated in Note No. 21, extra
ordinary income as stated in Note No.22 and also considering the fact
that the revenue from operations earned on settlement with the borrower
customers. The Company would have incurred loss, if the income as
aforesaid were not earned.
9.9 In the opinion of the Board of Directors, the assets listed under
the head Non-Current Assets & Current Assets (other than Fixed Assets
and Non-Current Investments) in the Balance Sheet (viz: assets covered
under Note No.8 to 13), have a value on realization in the ordinary
course of business at least equal to the amount at which they are
stated.
9.10 The Company is operating under one Geographical and Business
segment. Therefore the question of making disclosures as required under
Accounting Standard 17 does not arise.
9.11 Consequent to the notification of Revised Schedule VI under the
Companies Act, 1956, the Balance Sheet & Statement of Profit and Loss
for the year ended 31st March 2012 are prepared as per revised Schedule
VI. The Company has prepared the aforesaid statements under pre-revised
Schedule VI for the year ended 31st March 2011. Therefore for the
purpose of disclosing the previous year's amounts (for the year ended
31st March 2011) in this financial statement, the Company has
regrouped/reclassified the accounts of that year as per revised
Schedule VI.
Mar 31, 2010
1. During the year ending 31st March, 2005 the Scheme of Compromise and
Arrangement under Section 391 of the Companies Act, 1956 to effect the
restructure of Companys debts particularly Debentures and subordinated
debts of the Company was framed and presented before the Honorable High
Court of Karnataka Accordingly the meeting of the Shareholders,
Debentures Holders and Subordinated Debt holders were held on 20th
April, 2005. The scheme as proposed had provided for payment of
principal in a phased manner over 60 months from the effective date and
payment of interest accrued till 30th June, 2002, within 72 months from
the effective date. The scheme as proposed, do not provide for accrual
of interest after 30th June, 2002. (For the above purpose the
effective date means the date on which the Order of the High Court of
Karnataka sanctioning the Scheme of Arrangement is filed with the
Registrar of Companies in Karnataka.)
On 10th July, 2009, Honorable High Court of Karnataka has directed the
Company to submit the details of payments made to Non Convertible
Debenture holders and subordinated debt holders from 1st April, 2005.
Accordingly the details were furnished to Honorable Court. It was
submitted before the Honorable Court that the Company has settled
substantial portion of Non Convertible Debentures and Subordinated
Debts and it was therefore felt that the scheme requires to be changed
having regard to the settlements already made and quantum of non
convertible debentures and subordinated debts remaining to be settled.
Therefore the Company had proposed to withdraw the scheme of
arrangement from the Honorable High Court of Karnataka, with an option
to present a new scheme of arrangement. The Honorable High Court of
Karnataka has permitted the Company to withdraw the petition, with
liberty to file a fresh petition, vide its order dated 28th October,
2009.
Accordingly the Company is exploring the possibility of proposing a
fresh petition to be filed before the Honorable High Court of
Karnataka.
Considering the above, the Company has not provided/recognised for
interest after 30th June, 2002, on debentures/subordinated debts and
interest on advances taken on such instruments. Pending presentation of
fresh proposal as aforesaid and final outcome of the new Scheme (to be
prepared and presented), the contingent Liability on account of
Interest on Deposits/Debentures etc. accruing after 30th June, 2002,
is not quantifiable.
The public deposits accepted by the Company are fully matured. The
Company has not provided for interest on these deposits after 30th
June, 2002. The interest not so provided for is not accurately
quantifiable.
In view of the above and also considering the fact that there are no
unclaimed liabilities, the matured debentures, matured deposits,
matured subordinated debts and interest payable including unencashed
interest cheques on such deposits/debentures/debts has been considered
as "not due to be transferred to Investor Education and Protection
Fund".
The Company has stopped accepting/renewing deposits, debentures and
subordinated debts with effect from 1sl day of July, 2002. Therefore
and also considering the fact that the public deposits accepted by the
Company are fully matured, the Company has not created the floating
charge in favour of the depositors, on the statutory liquid assets
invested in terms of directives issued by Reserve Bank of India.
2. The company has been incurring substantial losses over the last few
years and major portion of its funds are blocked in non-performing
assets. In view of the same there is considerable uncertainty that the
company will continue as a going concern and meet its commitments to
its creditors. The accounts however have been prepared on the going
concern basis in view of managements efforts to settle the liabilities
with the debenture holders and subordinated debt holders by exploring
the possibility of submitting a new scheme as detailed in Note No. 1
above and the management is being hopeful of recovery of dues from
borrowers so that dues of creditors can be settled.
3. The Company had assigned under an assignment deed certain debts &
recoverable consisting inter alia stock on hire along with equal
liabilities of the Company to the extent of Rs. 26,62,92 thousand on
30-09-1998 to Vedachala Electronics & Financial Services Private
Limited (VEFSPL). The company had discharged the assigned liabilities
of VEFSPL on its failure to service the same in terms of the Assignment
deed, which has resulted in Rs. 21,36,03 thousand (P.Y. Rs. 22,26,73
thousands) receivable from VEFSPL. The company based on the estimated
recovery has made a provision of Rs.19,71,99 thousand (P.Y. Rs.16,95,36
thousands) against the receivables of VEFSPL.
4. The Company has not made provision for Non Performing Assets to the
extent of Rs.1,70,00 thousands (P.Y. Rs. 5,41,82 thousands) including
balance due from VEFSPL as required under RBI norms.
5. The Company during the year with a view towards restructuring its
liabilities has settled deposits/debentures/ subordinated debts at
discounted rates without interest. The same has been done with due
consent of the parties to deposits, debentures and debts. The interest
write back pertaining to deposits/debentures/ subordinated debts
Rs.71,27 thousands (P.Y. Rs. 66,91 thousands) is treated as
Extra-Ordinary Income in the Profit and Loss Account. Principal write
back arising out of such settlement Rs.3,79,11 Thousands (P.Y. Rs.
3,48,62 thousands) is considered as capital receipt and taken directly
to Capital Reserve in the Balance Sheet. This has been done as per the
accounting policy followed by the Company, as stated in Note No. I (j)
above.
6. Sundry Creditors include balance lying unpaid after adjusting
deposits with loans borrowed against it and unencashed stale interest
cheques. Pending reconciliation of the same for which the Company has
initiated a process and also for reasons as given in para II (1) of
this notes, the same has not been shown under Investor Education
Protection Fund.
7. Debentures are secured by mortgage on immovable property and
floating charge on receivables and book debts other than those
specifically charged. The debentures are redeemable at par. In the
opinion of the Management, the Market Value of the security after
considering provisions made in the books and also the property agreed
to be sold as detailed in Note No. Il(8) below, offered to the holders
of the Secured Non-Convertible Debenture is sufficient to cover the
liability. However the debentures are classified as Current
Liabilities, for the reason that all such debentures are matured for
repayment.
8. Advance for Sale of Property as disclosed in Schedule G of the
Balance Sheet Rs.266 thousands (P.Y. Rs. 266 thousands), represents
amount received in advance in respect of the immovable property agreed
to be sold. This immovable property is being charged to debentures as
detailed in Note No. II (7) above and therefore will be transferred at
a future date, after obtaining the necessary approvals from the
appropriate authorities.
9. Balances considered good under sundry debtors, unsecured loans,
advances include accounts classified as Non Performing Assets and also
where suits have been filed in the ordinary course of business. The
management is of the opinion that the same are good and recoverable and
are of the value stated.
10. Balances in Non Scheduled Bank comprises of Manipal Co-operative
Bank Ltd. Rs. 41 (P.Y. Rs. 341). Maximum balance outstanding during
the year Rs. 341 (P.Y. Rs. 341).
11. The Company had revalued its Land and Buildings as at 01-10-1998
by approved valuer and the resultant increase of Rs. 3,93,71 thousand
was credited to Revaluation Reserve. Incremental depreciation on
revaluation is transferred to Profit and Loss Account. The revalued
portion of lease hold land amounting to Rs. 22620 thousands (P.Y. Rs.
22620 thousands) has not been amortized and accordingly the revalued
portion of land still stands to the credit of "Revaluation Reserve".
The same would be adjusted to the revaluation reserve on termination of
the lease.
12. The balances of various parties in Hire purchase, Lease rent
receivables, Bills purchased, Loans, Advances, Debtors, Deposits,
Debentures, Subordinated Debts and Creditors are subject to
confirmation.
13. Remuneration paid to the Managing Director during the year: Rs.
Nil (RY. Rs. Nil).
14. The company has not recognised the net deferred tax asset which
constitutes mainly of carry forward losses, excess depreciation claimed
in Income Tax and Provisions for doubtful debts, as a matter of
prudence.
15. Disclosures in respect of related parties with whom transactions
have taken place during the year:
A. Key Management Personnel and his relatives
Sri T. Narayan M. Pai
Sri T. Sanjay Pai
B. Associate Companies
Vedachala Electronics and Financial Services Pvt. Limited
Manipal Housing Finance Syndicate Limited
16. Contingent and other Liabilities and liability towards retirement
benefits:
a) Liability on debentures assigned to Vedachala Electronics and
Financial Services Private Limited inclusive of interest accrued is Rs
22,48 thousand. (P.Y. Rs. 22,48 thousand), without considering interest
due on or after 1st day of July, 2002.
b) Liability in respect of damages and others in respect of suits
against the Company before various Courts, Consumer Courts etc. (in
respect of repayment of deposits/debentures/debts with interest & other
costs) has not been quantified and provided, due to lack of information
with the company. The collection of information is under process.
c) No provision made for disputed income tax liability for various
years wherever department has preferred an appeal before the Tribunal,
High Court for the reason that the appeal preferred before CIT
(Appeals) and Tribunal were allowed in favour of the company. The
amounts involved there in are not quantifiable.
d) In respect of Gratuity, Companys liability is covered by Group
Liability Policy of LIC of India. The Company has made the provision of
Rs. Nil (P.Y.: Rs. 3,53,465/-), being the deficit in Present Value of
Gratuity obligations over the Fair value of the Plan Assets held by
LIC. The information as aforesaid has been obtained from M/s Life
Insurance Corporation of India.
e) The liability in respect of leave encashment (if any) are provided
on an estimated basis., considering the fact the amount involved
therein is not material.
17. The Management of the Company is of the opinion that the directors
of the Company are not disqualified u/s 274(1) (g) of Companies Act,
1956, [in spite of the fact that the Company has stopped repaying
matured Debentures/debts/deposits and interest thereon as detailed in
Note 11(1)], for the reason that the Company is exploring the
possibility of presenting a new scheme of arrangement, as detailed in
Note No. 11(1).
The Managing Director of the Company Sri T. Narayan M. Pai & the other
director Sri Chandrappa R. Sherigar are the directors of another
Company. As evident from the records/documents produced before the
Company, the another company has also stopped payment of matured
deposits/debentures/debts and interest thereon after 30th June, 2002.
The Company has received a letter from them that they are not
disqualified u/s 274(1) (g) of Companies Act, 1956 for the reason that
the another Company is exploring the possibility of making an
application before the Honourable High Court of Karnataka U/s 391 of
Companies Act, 1956 for restructuring of its debts.
18. The assets of the Company are not valued, considering the cost
involved therein. However the management is of the opinion that the
carrying cost of the asset (including that of leased assets after
considering the Lease equalization Charge) does not exceed its
recoverable value. Therefore the assets are not impaired during the
year.
19. The Company has not received information from vendors regarding
their status under Micro, Small and Medium Enterprises Development Act,
2006 and hence disclosure relating to amounts unpaid as at the year end
together with interest paid/payable under this Act and also as required
under Schedule VI to the Companies Act 1956, have not been given.
20. The Company has not carried on any non-banking business other than
repayment of liability out of recoveries. All the payments have been
centralized in head office. Powers are not given to the Branches to
incur the expenses. In the prevailing circumstances there is no need
for internal audit either at the HO level or at the Branch Level.
Therefore internal audit is not found necessary.
21. Employee Benefits:
Brief description of the Plans:
a) The Company has two schemes for long-term benefits such as provident
fund and gratuity. In case of funded schemes, the funds are recognized
by the Income tax authorities and administered through trustees/
appropriate authorities. The Companys defined contribution plan is
employees provident fund (under the provisions of the Employees
Provident Funds and Miscellaneous Provisions Act, 1952) wherein the
Company has no further obligation beyond making the contributions.
The Company is also contributing towards Employee State Insurance Plan,
as per statutory requirements, wherein the Company has no further
obligation beyond making the contributions.
The Company is also providing employee benefit by way of encashment of
earned leave. The provision for the same has been made on estimated
basis. The amount involved therein is not material, considering the
size of the Company. The Company has not opted for actuarial valuation,
considering the cost involved and also the concept of materiality.
The Companys defined benefit plan is gratuity.
b) Charge to the Profit and Loss Account based on contributions: The
Companys contribution to Provident Fund charged to Profit and Loss
Account during the year is Rs.74 thousands. (P.Y.: Rs. 112 thousands)
The Companys Contribution to Employee State Insurance Plan charged to
Profit and Loss Account during the year is Rs. 19. Thousands (P.Y. Rs.
49 thousands).
The Companies liability towards gratuity to employees covered by group
gratuity policy with LIC of India.
Premium paid on this account is Rs. 47 thousands (P.Y. Rs. 195
thousands) and provisions made in respect of deficit of Present value
of obligations over the fair value of Plan Assets Rs. Nil thousands
(P.Y. Rs. 353 thousands) charged to profit and loss account during the
year.
The detail of provision for leave encashment is as under: Provision as
on 1st April, 2009 Rs. 1,09 thousands (P.Y. Rs. 109 thousands). Amount
charged to the Profit & Loss Account during the year Rs. Nil (P.Y. Rs.
Nil).
Actual payment during the year Rs. NiL (P.Y. Rs. Nil). Provision as on
31st March, 2010 Rs. 1,09 thousands (P.Y. Rs. 1,09 thousands).
The Company has written to Life Insurance Corporation of India to
furnish information of the Defined Gratuity Benefit Plan, in the manner
required under Accounting 15. Accordingly the Life Insurance
Corporation of India has given the information as given above, which
has been relied by the Auditors.
(#) The Company has made the provision of Rs.353 thousands in respect
of deficit of Present value of obligations over the fair value of Plan
Assets , during the year ending 31st March, 2009 and therefore the
question of making further provision does not arise.
22. In the opinion of Board of Directors, Current Assets and Loans and
Advances unless stated otherwise are of the value stated, if realized
in the ordinary course of business, provisions for all known
liabilities are adequate.
23. The Company is operating under one Geographical and Business
segment. Therefore the question of making disclosures as required under
Accounting Standard 17 does not arise.
24. Figures for the previous year are regrouped, rearranged and
reclassified wherever necessary.