Mar 31, 2014
NOTE 1.1 : OTHER ASSETS
a) The inventory has turned NPA hence the same is treated as
Non-Current Asset.
b) Other Assets including some bank balances which are disputed /
inaccessible have been treated as non-current.
c) Police has submitted a charge-sheet with the criminal court against
fraud perputuated by two employees in 2008-09 involving an amount of
Rs. 140.62 lakhs. However full provisions has been made against the
amount.
d) On recommendation from Registrar of Companies, Kolkata, Ministry of
Corporate Affairs, Government of India directed Serious Fraud
Investigation Office (SFIO) to carry out investigation against the
company under section 235 of the Companies Act, 1956 which has been
partially completed and follow up action in respect of them has been
initiated.
e) Positive balance lying in the current accounts with the members of
the consortium bank, i.e. Rs.162.11 Lacs (P.Y. Rs.162.11 Lacs) in UCO
Bank, Rs.0.19 Lacs (P.Y. Rs.0.19 Lacs) in Bank of Baroda, Rs.3.01 Lacs
(P.Y. Rs.3.01 Lacs) in Canara Bank, Rs.0.10 Lacs (P.Y. Rs.0.10 Lacs) in
Central Bank of India, Rs.0.01 Lacs (P.Y. Rs.0.01 Lacs) in United Bank
of India, Rs.42.53 Lacs (P.Y. Rs.42.53 Lacs) in Indian Overseas Bank,
Rs.0.05 Lacs (P.Y. Rs.0.05 Lacs) in State Bank of Mysore, Rs.0.20 Lacs
(P.Y. Rs.0.20 Lacs) in State Bank of Travancore amounting in total Rs
208.20 Lacs (P.Y. Rs 208.20 Lacs) remain unconfirmed and inaccessible
for the reasons stated in Note 2.3.ix.
f) Balance of Rs.2.20 Lacs (P.Y Rs 2.20 Lacs) from other Banks also
remain unconfirmed.
g) Fixed deposit made by the company with the members of the consortium
bank, i.e. Rs.13.46 Lacs (P.Y. Rs.13.46 Lacs) with Bank of Baroda,
Rs.0.05 Lacs (P.Y. Rs.0.05 Lacs) in Indian Overseas Bank and with other
bank amounting to Rs.0.25 Lacs (P.Y. Rs.0.25 Lacs) amounting in total
Rs 13.76 Lacs (P.Y. Rs 13.76 Lacs) remain unconfirmed and accordingly
was provided for.
h) Other receivable forming part of other current assets represents
dues from Managing Director (Rs. 7.23 Lakhs).
i) Adequate provisions is lying in the books against all doubtful
assets.
2.1 : FINANCE COST
a) Subsequent to cessation of SWAP agreement with UCO Bank, foreign
currency loan has been valued at the rate prevailing as at close of
31.03.2014 and exchange difference arising from foreign currency
borrowing to the extent that they are regarded as an adjustment to
interest cost shown above.
2.2 RBI has cancelled the Certificate of Registration of the Company
to carry out Non-Banking Financial activities of the Company vide
it''s order dated 31st March, 2005 against which Company has preferred
an appeal before appellate authority for NBFC, Joint Secretary,
Ministry of Finance, Govt. of India, New Delhi which is also pending.
In view of the above, the accounts of the company has been prepared on
going concern concept based on the legal opinion obtained.
2.3 The Company has complied with the guidelines issued by the Reserve
Bank of India in respect of Prudential Norms for income recognition,
accounting standards, provisions/ write-downs of bad and doubtful debts
unless mentioned otherwise except for maintaining excess provision
against Non Performing Assets (NPA) to cover any future eventualities.
2.4 Disclosure regarding Contingent Liabilities :
a) Claims/Disputed liabilities not acknowledged as debt
The Company has received the following demands which are disputed by
the Company and are not provided for:
Nature of Contingent Status of the As at As at
liability case 31st March 31st March
2014 2013
(Rs. in lacs) (Rs. in lacs)
Contingent liability The disputed
w.r.t Central demand is pending
and State Sales Tax before W.B.Comm
(A.Y. 1995-1996 ercial Taxes
to 2004-2005) Appellate &
Revisional Board. 27.50 27.50
Total 27.50 27.50
b) Advance paid / Bank Guarantee of Rs.26.53 lacs (Previous Year
Rs.26.53 lacs) was issued in favour of Assistant Commissioner of
Commercial Tax, Bangalore against an appeal preferred by the company
and pending before the Karnakata Appellate Tribunal for Commercial Tax
at Bangalore.
c) UTKAL Auto has filed a claim against the company before Arbitrator
at Cuttack amounting to Rs.76.90 lacs (Previous Year Rs. 76.90 Lacs)
against which the company filed a counter claim of Rs.482.74 lacs
against UTKAL Auto before the Arbitrator. An award was passed on 31st
December, 2011 and the claim is partly accepted amounting to Rs.2.78
lacs with interest at the rate 12% from 1st September, 2006 and the
counter claim was rejected. An appeal has been filed in the Hon''ble
High Cort of Calcutta against the said order which was admitted on 15th
May, 2012 by the Hon''ble High Court.
2.5 No exercise of impairment was undertaken as authorised under para
vi of AS 28.
2.6 Segement Reporting as per Accounting Standard - 17 prescribed
under the Act.
The company is primarily engaged in the business of Hire Purchase and
Leasing. Revenue from sale of power has not exceeded 10% of total
revenue including write back. Hence, there is no other reportable
segment as defined under the Accounting Standard 17 "Segment
Reporting" issued by The Companies (Accounting Standards) Rules,
2006.
2.7 Disclosure for Lease under Accounting Standard (AS-19)
All the Lease deals of the company has already been matured. Hence, no
separate disclosure under AS-19 is required.
2.8 Information pursuant to Accounting Standard (AS-22)
In view of uncertainty of future profits net deferred tax asset arising
as at 31.03.2014 has not been recognized in the books of accounts.
2.9 Related Party disclosures
Related party disclosures as required under Accounting Standard (AS) -
18 on ''related party disclosures'' issued by the Institute of
Chartered Accountants of India are given below :
Nature of Relationship Name of the Party
1. Subsidiary Company Nicco Insurance Agents & Consultants Ltd.
2. Associates Alliance Management & Fiscal Services Ltd.
3. Key Management personnel L. N. Kaul - Managing Director
J. Mukherjee - Chief Financial Officer
S. S. Majumdar - Company
Secretary
2.10 Other receivable Rs. 7.23 Lacs - Key Management Personnel.
F. The plan assets created against the Gratuity and Leave Encashment
liability of the company wholly comprised of the rights under insurance
policies taken from the LICI.
G. Super Annuation Fund - The entitlement of pension accrues to the
eligible employee after completion of 15 years of service beyond a
specific grade at normal retirement age. As total service period as on
31.03.2014 is less than 15 years for the concerned employees of the
company there is no eligibility for pension as on date.Upto date
shortfall, if any, as per actuarial valuation, in respect of
contribution towards such fund is yet to be identified. However,
contribution to the super annuation fund amounting to Rs.1.36 Lacs
(P.Y. Rs.1.30 Lacs) was made as per the service rules of the company
for the eligible employees and was debited to ''Expenses on Employees''.
H. In respect of Provident funds for eligible employees maintained by a
trust, in the nature of defined benefit plan, upto date shortfall, if
any, as per actuarial valuation, in respect of contribution towards
such fund is yet to be identified. However contribution to those
provident funds amounting to Rs.0.95 Lacs during the year (P.Y. Rs.
0.98 Lacs) is recognised as expenses and included in ''Employee
Benefit Expenses''. Shortfall of Rs. 0.03 (P.Y. Rs. 0.25 ) in
contribution to such provident funds has been provided to the extent of
the information available with the company.
2.11 Reserve Bank of India vide Notification No. DNBS.167/CGN
(OPA)-2003 dt. March 29,2003 has directed that every NBFC shall append
to its balance sheet prescribed under the Companies Act 1956, the
particulars in the format as set out in the schedule annexed, which has
been complied with.
2.12 A fire broke out at the Registered office of the company at Nicco
House on 27th March, 2009 affecting the operations of the company apart
from causing damage to Building, Furniture & Fixture, Computer system,
certain records for earlier years. General Diary for fire was lodged by
the company and insurance claims was received in earlier years in full
and final settlement to the satisfaction of the company which was
utilised for repair, renovation and rehabilitation work in the office
premises.
2.13 The areas have been identified where there is a scope of
improvement for internal control system and steps have been taken for
the said improvement.
2.14 Land & Building (in excess of its own use) & shares (unquoted
shares other than of subsidiary companies or company in the same group)
amounting to Rs. 292.85 lacs & 6.80 lacs respectively held by the
company in contravention of Para 19 of Non Banking Financial ( Deposit
accepting or holding) Companies, Prudential Norms, (Reserve Bank)
directions, 2007 in regards to Restriction on investment in land and
building and unquoted shares.
However most of such assets are charged with Bank and Financial
Institutions and cannot be liquidated to bring the same within limits
of prudential norms as mentioned above.
2.15 A writ petition has been filed by the company before Hon''ble
Calcutta High Court against the decision of the MINISTRY OF CORPORATE
AFFAIRS inrespect of extension of period of appointment of Mr. L. N.
Kaul, Managing Director. Pending further development, as a matter of
abundant precaution, the amount paid to him between 15.04.13 and
31.03.14 against his emoluments has been shown under other receivables.
2.16 The previous year figures have been regrouped / restated wherever
considered necessary.
Mar 31, 2013
1.1 Disclosure regarding Contingent Liabilities:
a) Claims/Disputed liabilities not acknowledged as debt
The Company has received the following demands which are disputed by
the Company and are not provided for:
Nature of Contingent liability Status of the case
As at 31st March As at 31st March
2013
(Rs. in lacs) 2012 (Rs. in lacs)
Contingent liability w.r.t
Central The disputed demand
is pending and State Sales
Tax before W.B.Commercial Taxes
(A.Y. 1995-1996to2004-2005)
Appellate & Revisional Board. 27.50 27.50
Total 27.50 27.50
b) Advance paid / Bank Guarantee of Rs.26.53 lacs (Previous Year
Rs.26.53 lacs) was issued in favour of Assistant Commissioner of
Commercial Tax, Bangalore against an appeal preferred by the company
and pending before the Karnakata Appellate Tribunal for Commercial Tax
at Bangalore.
c) UTKAL Auto has filed a claim against the company before Arbitrator
at Cuttack amounting to Rs.76.90 lacs (Previous Year Rs. 76.90 Lacs)
against which the company filed a counter claim of Rs.482.74 lacs
against UTKAL Auto before the Arbitrator. An award was passed on 31st
December, 2011 and the claim is partly accepted amounting to Rs.2.78
lacs with interest at the rate 12% from 1st September, 2006 and the
counter claim was rejected. An appeal has been filed in the Hon''ble
High Cort of Calcutta against the said order which was admitted on 15th
May, 2012 by the Hon''ble High Court.
1.2 There being no indication of decline in net realizable market
value below it''s carrying cost as per valuation made in the year 2006-
07, impairment of the assets of the company coming under the purview in
terms of Accounting Standard 28 has not been considered.
1.3 Segement Reporting as per Accounting Standard -17 prescribed under
the Act.
The company is primarily engaged in the business of Hire Purchase and
Leasing. Revenue from sale of power has not exceeded 10% of total
revenue including write back. Hence, there is no other reportable
segment as defined under the Accounting Standard 17 "Segment Reporting"
issued by The Companies (Accounting Standards) Rules, 2006.
1.4 Disclosure for Lease under Accounting Standard (AS-19)
All the Lease deals of the company has already been matured. Hence, no
separate disclosure under AS-19 is required.
1.5 Information pursuant to Accounting Standard (AS-22)
In view of uncertainty of future profits net deferred tax asset arising
as at 31.03.2013 has not been recognized in the books of accounts.
Ml Remuneration to Managing Director was paid in excess by Rs. 0.27
Lacs (P.Y. Rs. 0.27 Lacs) in reference to remuneration approved by
Central Government and has been shown under the heading "Employee
Benefit Expenses" (P.Y. "Other Current Assets"). However, the same
have since been recovered.
Following adjustments relating to employee benefits have been made in
these accounts in keeping with the requirements of Accounting Standard
15 (Revised) on "Employee Benefits" issued by The Companies (Accounting
Standards) Rules, 2006.
a) Expenses under defined contribution plan with the following break up
has been recognised during the year. Details are given below: -
F. The plan assets created against the Gratuity and Leave Encashment
liability of the company wholly comprised of the rights under insurance
policies taken from the LICI.
G. Super Annuation Fund - The entitlement of pension accrues to the
eligible employee after completion of 15 years of service beyond a
specific grade at normal retirement age. As total service period as on
31.03.2013 is less than 15 years for the concerned employees of the
company there is no eligibility for pension as on date. Upto date
shortfall, if any, as per actuarial valuation, in respect of
contribution towards such fund is yet to be identified. However,
contribution to the super annuation fund amounting to Rs.1.30 lacs (
P.Y. Rs.1.30 lacs) was made as per the service rules of the company for
the eligible employees and was debited to ''Expenses on Employees''.
H. In respect of Provident funds for eligible employees maintained by a
trust, in the nature of defined benefit plan, upto date shortfall, if
any, as per actuarial valuation, in respect of contribution towards
such fund is yet to be identified. However contribution to those
provident funds amounting to Rs. 0.98 Lacs during the year ( P.Y. Rs.
0.92 Lacs ) is recognised as expenses and included in ''Employee Benefit
Expenses''. Shortfall of Rs. 0.25 ( P.Y. Rs. Nil) in contribution to
such provident funds has been provided to the extent of the information
available with the company.
1.6 Reserve Bank of India vide Notification No. DNBS.167/CGN
(OPA)-2003 dt. March 29,2003 has directed that every NBFC shall append
to its balance sheet prescribed under the Companies Act 1956, the
particulars in the format as set out in the schedule annexed, which has
been complied with.
1.7 A fire broke out at the Registered office of the company at Nicco
House on 27th March, 2009 affecting the operations of the company apart
from causing damage to Building, Furniture & Fixture, Computer system,
certain records for earlier years. General Diary for fire was lodged by
the company and insurance claims was received in earlier years in full
and final settlement to the satisfaction of the company which was
utilised for repair, renovation and rehabilitation work in the office
premises.
1.8 The areas have been identified where there is a scope of
improvement for internal control system and steps have been taken for
the said improvement.
1.9 Land & Building (in excess of its own use) & shares (unquoted
shares other than of subsidiary companies or company in the same group)
amounting to Rs.292.85 lacs & 6.80 lacs respectively held by the
company in contravention of Para 19 of Non Banking Financial (Deposit
accepting or holding) Companies, Prudential Norms, (Reserve Bank)
directions, 2007 in regards to Restriction on investment in land and
building and unquoted shares.
However most of such assets are charged with Bank and Financial
Institutions and cannot be liquidated to bring the same within limits
of prudential norms as mentioned above.
1.10 The previous year figures have been regrouped / restated wherever
considered necessary.
Mar 31, 2012
A) The break-up of equity share subscribed and fully paid-up,
subscribed but not fully paid-up could not be furnished in absence of
proper details regarding Calls in Arrear, available at present
b) The company has one class of issued shares i.e. equity shares having
par value of Rs. 10/- per share. Each hoider of ordinary shares is
entitled to one vote per share and equal right for dividend.
c) There has been no change/movements in number of shares outstanding
at the beginning and at the end of the reporting period.
d) The Company does not have any holding company/ultimate holding
company.
e) Details of shareholders holding more than 5% shares in the company:
Notes to Financial Statements for the year ended 31st March, 2012
h) No calls are unpaid by any Director and Officer of the Company
during the year.
i) No shares have been alloted or has been bought back by the company
during the period of 5 years preceding the date as at which the Balance
Sheet is prepared.
j.i) Equity shares issued for consideration other than cash include
9,60,000 Equity shares of Rs.10/- each allotted pursuant to
amalgamation of Sanpaola Hambro Nicco Finance Ltd.
j.ii) 4,00,000 Equity Shares of Rs.10/- each alloted pursuant to
amalgamation of Nicco Investments Ltd.
j.iii) 19,72,560 Equity Shares of Rs.10/- each issued as free share in
the ratio 1:7 due as per scheme of merger approved by Hon'ble Calcutta
High Court on 21st April, 1999.
j.iv) 1,38,66,687 Equity Shares of Rs. 10/- each issued to the share
holders of Alliance Credit & investments Limited as per scheme of
amalgamation approved by Hon'ble Calcutta High Court on 21st April,
1999.
j.v) 1,05,00,000 Equity Shares of Rs.10/- each issued to the
shareholders of Overseas Sanmar Financial Limited as per scheme of
amalgamation approved by Hon'ble Calcutta High Court on 20th April,2000
and Hon'ble Chennai High Court on 10th May, 2000.
i.a) Rupee Loans from Banks consist of loans from: UCO Bank (Mehta
Transport), UTI Bank.
j.b) Nature of Secuity: For Uco Bank (Mehta Transport) - By an
agreement for hypothecation of movable plant and machinery to secure a
term loan by the company on November 17, 2000. the company hypothecated
the following vehicles as security for the repayment of the said term
loan facility availed of by itfrom the applicant bank being the 50
number of Ashok Leyland Tusker Turbo tractors along with new chasis
lent under Hire Purchse to M/s Mehta Transport Services (I) Ltd.
Further the company hypothecated to and charged in favour of the
applicant bank as and by way of first charge thereon:
(i) all the goods described in general terms in the schedule written
thereunder being 50 numbers of trailers to be purchased under the term
loan and is to be lent under hire purchase agreement.
(ii) all the company's present and future book debts, outstanding
monies, receivables, claims, bills, contracts etc.
i.c) Nature of Secuity: For UTI Bank: The facility is secured against
assignment of receivable of the selected pool together with the entire
interest, ownership and clear title and rights to the assets provided
in the hire purchase agreements and also against cash collateral.
i.d) Foreign Currency Loan consists of IFC-Washington, IFCI.
i.e) Nature of Security - For IFC Washington: The company hypothecated
and charged as and by way of first fixed and exclusie charge and lien
to and / or in favour of the trustee in for the benefit of the
corporation, certain properties and assets given on lease or hire
purchase or acquired by the company out of finances.
if) Nature of Secuity: For IFCI - The company hypothecated on 29th
April. 1999 in tavour of the applicant by virture of which the whole of
the spcific Industrial Assets, equipments, plant, machinery and other
assets together with its spares, tools and other accerrories acquired
/to be acquired, were more particularly described below to the
application were hypothecated in favour of the applicant as security
for the term loan
Particulars of the equipments, plant, machinery, and other assets
acquired by the company out of loan :
1. TIL make Cranes
All the movable properties and immovable properties of the company
wherever lying and wherever situated.
ii) All loans have turned Non-Performing Assets in the books of the
lenders and the same have been recalled by them and at present
being contested in Debt Recovery Tribunals and High Court at Calcutta.
Hence, the clause relating to disclosure of terms of repayment of loans
in such cases has become inapplicable.
iii) The details of default given below showing dates and amount
(Principal and Interest) referring note no. 2.3.iii is as furnished by
the management.
iv.a) UCO Bank has filed application in DRT -1 to recover Rs.327 lacs
(previous year Rs.327 lacs) on account of term loan, matter is pending.
iv.b) IFCI has filed an application in DRT -1 to recover Rs.62.91 lacs
( previous year Rs.62.91 lacs ), matter is pending.
iv.c) Indus Ind Bank has filed an application in DRT, Chennai to
recover Rs. 164.46 lacs (previous year Rs. 164.46 lacs) on account of
Securitisation loan which is being contested.
iv.d) Axis Bank has filed an application in DRT, Chennai to recover
Rs.1368 lacs (previous year Rs.1368 lacs) which is also being
contested.
iv.e) International Finance Corporation Washington initiated a suit in
the Hon'ble High Court at Calcutta for recovery of a sum of US$
26,82,877.73 ( previous year US$ 26,82,877.73) with further interest
against the company. The case is being contested.
iv.f) UCO Bank has taken measures under section 13(4) of the SARFAESI
Act against the company. The company filed an application under section
17(1) of the said Act.
In the Sarfaesi proceedings against the company by UCO Bank, being
aggrieved by DRAT's Order, company filed a Writ Petition before Hon'ble
High Court, Calcutta and due to some deficiency in the procedure
followed by UCO Bank and Others., High Court Ordered that no coercive
steps should be taken by Bank. Bank has appealed against this order.
v) Persuant to an application dated 17.03.2008 made by the company u/s
391 and 394 of the Companies Act, 1956 before the Hon'ble High Court,
Calcutta to reduce the paid up equity share capital from Rs. 10 to Rs.2
each and issue new equity shares of Rs.2 each to the fixed deposit
holders to the extent of their pricipal amount due in the company as on
01.04.2007 at a price in conformity with SEBI ( Disclosure and Investor
Protection Guidelines 2000).Seperate meetings of shareholders and fixed
deposit holders were convened as per the order of the Hon'ble High
Court, Calcutta under the chairmanship of seperate court appointed
chairperson and the scheme was duly approved with requisite majority in
both the meetings. The matter is pending before the Hon'ble High Court,
Calcutta.
vi) Company has obtained an interim stay order from Hon'ble High Court
Calcutta vide order dated 15th February, 2008 restraining deposit
holders from initiating any proceedings against the company and stayed
the proceedings already initiated till disposal of the application made
by the company u/s 391 and 394 of the Companies Act, 1956 pending
before Hon'ble High Court, Calcutta.
vii) Networth of the company has completely been eroded due to large
provisioning and huge loss suffered and consequently outstanding
balance of fixed deposit has exceeded the ceiling fixed by Reserve Bank
of India.
viii) The Company has paid to a number of depositors on hardship cases
on settlement basis based on principal amount outstanding.
ix) The entire secured loan accounts of the company amounting to
Rs.121.35 crores (previous year Rs.120.14 crores) except interest
accrued and due, has become NPA in the books of the lenders. The
banks/Financial Institutions have stopped giving statements and
confirmations. Interest on these accounts have been provided as per the
last agreed rates. However, the said accounts remain unconfirmed.
x) Honorable Company Law Board Eastern Region Bench had passed an order
vide it's order dated 22nd March, 2005 against ... Company's petition
No. 641(58AA)/ERB/2004 for rescheduling the repayment of Company's
Fixed Deposit liability including interest accrued thereon u/s 45QA of
the RBI Act. The company had filed an application before CLB in the
month of February, 2007 to extend the period of payment of these dues
and CLB has modified the order dated 22nd March, 2005 vide their order
dated 28.06.2007 granting an extension of six months on payment of
deposit from the date of maturity of deposits from March, 2007 and
onwards. The said order also stipulates that no interest need to be
paid along with the last instalement as directed in the original scheme
and the question of payment of interest shall be deceided later and
accordingly interest provided at contracted rate and as per CLB order
on outstanding Fixed Deposit liability has been shown as 'interest
accrued but not due' under Other Current Liability. Refer note 2.7 -
Interest Accrued and not due.
xi) Entire amount of Fixed Deposits amounting to Rs 1205.07 lacs
(previous Year 1982.04 Lacs) has matured and is due for payment.
i) UCO Bank, the leader of the consortium of bankers, moved an
application in the Debt Recovery Tribunal on 29.11.2005 to recover the
outstanding dues amounting to Rs. 119.23 crores ( previous year Rs.
119.23 crores ) pending against the company which the company has
contested. The learned D.R.T has passed an order on 01.12.2005 that
till disposal of the prayer for interim relief, the company will not
deal with or transfer or dispose off any of it's secured properties.
However, the company shall carry on it's business as usual.
ii.A) Nature of Security: The company extended a joint deed of
hypothecation in favour of consortium of bankers headed by UCO bank
whereby the company hypothecated as and by way of first charge its
entire tangible properties and assets both present and future including
plant and machinery and /or other assets purchased and / or acquired
for its hire pirchase/leasing business/operations and all relative
lease rentals, hire charges receivables, both present and future.
ii.B) The company further created equitable mortgage in favour of the
applicant banks in respect of the properties by way of deposit of /
original title deeds on June 20, 2001:
a) Office Space at Nicco House, 2nd Floor, 2 Hare Street, Kolkata-700
001;
b) Flat at 718, Dalmal Towers, Nariman Point, Mumbai - 400 021;
c) Flat no. 3 at 9, South North nRoad, Juhu Ville Parle Development
Scheme, Mumbai-400 049;
d) Premises at 93/4, Karaya Road, 4th Floor Kolkata - 700 019;
e) 0.65 acre, 2.92 acres, 1.70 acres, 0.95 acre, 0.85 acre and 5.90
acres of land at Poolavadi, Coimbatore, Tamil Nadu;
f) 142kenels, 17marlasoflandinkhewatnos. 16,37,38,61 &79, khatonlnos.
21 mln, 143min,44min,83min, 108min respectively at Village-Salhawas,
Tehsil-Rewari, District-Rewari, Haryana.
iii) All loans have turned Non-Performing Assets in the books of the
lenders and the same have been recalled by them and at present being
contested in Debt Recovery Tribunals. Hence, the clause relating to
disclosure of terms of repayment of loans in such cases has become
inapplicable.
iv) Refer Note 2.3.ix
v) The details of default given below showing dates and amount
(Principal and Interest) referring note no. 2.5.V is as furnished by
the
a) The unclaimed deposit has been arrived at based on such depositor
who had not claimed their deposit amount by surrendering the deposit
receipt with the Company though they have matured and also payable as
per CLB Order. Many depositors amongst them are traceable but despite
request not surrendering their deposit receipt becuase they are
treating FDR as basic proof of deposit of money and willing to part
with it only if deposit amount is paid in one lump sum. Company is
unable to pay to deposoitor due to the precarious financial condition
but settling with such depositors who are approaching the company under
hardship condition. Besides, a Scheme of Compromise with fixed
depositors under Section 391 and 394 of the Comapnies Act, 1956 is
pending before Hon'ble High Court, Calcutta which covers these
depositors also.
b) In the view of the critical financial conditions which the company
is facing, it could not transfer an amount of Rs. 6,31,535/- (previous
year Rs. 1,647,712 ) to 'Investors Education and Protection Fund'.
b) Advance paid / Bank Guarantee of Rs.26.53 lacs (Previous Year
Rs.26.53 lacs) was issued in favour of Assistant Commissionerë'"/* of
Commercial Tax, Bangalore against an appeal preferred by the company
and pending before the Kamakata Appellate Tribunal for Commercial Tax
at Bangalore.
c) UTKALAuto has filed a claim against the company before Arbitrator at
Cuttack amounting to Rs.76.90 lacs (Previous Year Rs 76.90 .. v Lacs)
against which the company filed a counter claim of Rs.482.74 lacs
against UTKAL Auto before the Arbitrator. An award was passed on 31st
December,2011 and the claim is partly accepted amounting to Rs.2.78
lacs with interest at the rate 12% from 1st September, 2006 and the
counter claim was rejected. An appeal has been filed in the Hon'ble
High Cort of Calcutta against the said order which was admitted on 15th
May,2012 by the Hon'ble High Court.
1.1 There being no indication of decline in net realizable market
value below it's carrying cost as per valuation made in the year 2006-
07, impairment of the assets of the company coming under the purview in
terms of Accounting Standard 28 has not been considered.
1.2 Segement Reporting as per Accounting Standard -17 prescribed under
the Act.
The company is primarily engaged in the business of Hire Purchase and
Leasing. Revenue from sale of power has not exceeded 10% of total
revenue including write back. Hence, there is no other reportable
segment as defined under the Accounting Standard 17 "Segment Reporting'
issued by the Institute of Chartered Accountants of India.
1.3 Disclosure for Lease under Accounting Standard (AS-19)
All the Lease deals of the company has already been matured. Hence, no
separate disclosure under AS-19 is required.
1.4 Information pursuant to Accounting Standard (AS-22)
In view of uncertainty of future profits for reasons stated in note no
2.23, 2.5 (a) and 2.3.iv.(a) to 2.3.iv.(f), net deferred tax asset
arising as at 31.03.2012 has not been recognized in the books of
accounts.
b) Basic/diluted earning per share.as required by Accounting Standard
(AS-20)" Earning per share", of Rs. -9.94 (previous year Rs.- 10.04)
has been calculated by dividing the net loss after taxation for the
year as per the accounts which is attributable to equity shareholder by
4,01,46,773 being the weighted average number of equity shares
outstanding during the year.
1.5 Employee Benefits:
Following adjustments relating to employee benefits have been made in
these accounts in keeping with the requirements of Accounting Standard
15 (Revised) on "Employee Benefits" issued by the Institute of
Chartered Accountants of India.
A. The plan assets created against the Gratuity and Leave Encashment
liability of the company wholly comprised of the rights under insurance
policies taken from the LICI.
B. Super Annuation Fund - The entitlement of pension accrues to the
eligible employee after completion of 15 years of service beyond a
specific grade at normal retirement age. As total service period as on
31.03.2012 is less than 15 years for the concerned employees of the
company there is no eligibility for pension as on date.Upto date
shortfall, if any, as per actuarial valuation, in respect of
contribution towards such fund is yet to be identified. However,
contribution to the super annuation fund amounting to Rs.1.30 lacs (
previous year Rs:1.30 lacs ) was made as per the service rules of the
company for the eligible employees and was debited to 'Expenses on
Employees'.
C. In respect of Provident funds for eligible employees maintained by a
trust, in the nature of defined benefit plan, upto date shortfall, if
any, as per actuarial valuation, in respect of contribution towards
such fund is yet to be identified. However contribution to those
provident funds amounting to Rs.0.98 lacs during the year (previous
year Rs.1.07 lacs) is recognised as expenses and included in 'Expenses
on Employees'. Shortfall of Rs. Nil ( previous year Rs.0.09 lacs ) in
contribution to such provident funds has been provided to the extent of
the informatiorf available with the company.
1.7 Reserve Bank of India vide Notification No. DNBS. 167/CGN
(OPA)-2003 dt. March 29,2003 has directed that every NBFC shall d yv
append to its balance sheet prescribed under the Companies Act 1956,
the particulars in the format as set out in the schedule annexed, which
has been complied with.
1.8 A fire broke out at the Registered office of the company at Nicco
House on 27th March, 2009 affecting the operations of the company apart
from causing damage to Building, Furniture & Fixture, Computer system,
certain records for earlier years. General Diary for fire was lodged by
the company and insurance claims was received in earlier years in full
and final settlement to the satisfaction of the company which was
utilised for repair, renovation and rehabilitation work in the office
premises.
1.9 The areas have been identified where there is a scope of
improvement for internal control system and steps have been taken for
the said improvement.
1.10 The previous year figures have been regrouped / restated wherever
considered necessary to conform to the current year's classification.
Mar 31, 2011
1. The Company has complied with the guidelines issued by the Reserve
Bank of India in respect of Prudential Norms for income recognition,
accounting standards, provisions/ write-downs of bad and doubtful
debts.
2. Contingent Liabilities
a) Claims/Disputed liabilities not acknowledged as debt.
The Company has received the following demands which are disputed by
the Company and are not provided for:
Nature of Status of the case As at As at
Contingent 31st March 31st March
liability 2011 (Rs. 2010
in lacs) (Rs. in lacs)
Contingent
liability w.r.t
Central The disputed demand
is pending
and State
Sales Tax before W.B.
Commercial Taxes
(A.Y. 1995-1996
to 2004-2005) Appellate &
Revisional Board. 27.50 27.50
Total 27.50 27.50
b) Advance paid / Bank Guarantee of Rs. 26.53 lacs (Previous Year Rs.
26.53 lacs) was issued in favour of Assistant Commissioner of
Commercial Tax, Bangalore against an appeal preferred by the company
and pending before the Karnakata Appellate Tribunal for Commercial Tax
at Bangalore.
3. (b) Remuneration paid to Managing Director in the financial year
2007-08 was in excess by Rs. 2.72 lacs in reference to the remuneration
approved by the Central Government. An appeal was made to the Central
Government to approve this payment.
The Managing Director of the Company was reappointed for a period of
two years i.e. from 15th April' 2008 to 14th April' 2010 and again
reappointed for a period of three years i.e from 15th April' 2010 to
14th April' 2013.
Further for the F/Y 2008-09,2009-10 and 2010-11 company has received
approval from the Central Government for paying him Rs. 8.26 lacs p.a.
Actual payment crossed the above limit fixed by the Central Government
in the above mentioned four years by Rs. 3.75 lacs. However the entire
amount of such excess remuneration paid to him has since been refunded
back to the Company.
4. Subsequent to cessation of SWAP agreement with UCO Bank, foreign
currency loan has been valued at the rate prevailing as at close of
31.03.2011 and Rs. 9.04 lacs ( previous year foreign currency
fluctuation gain of Rs. 107.51 lacs, refer Schedule 11) has been taken
into profit & loss account as foreign currency fluctuation gain (refer
Schedule 11).
5. Related Party disclosures
Related party disclosures as required under Accounting Standard (AS)
-18 on 'related party disclosures' issued by the Institute of Chartered
Accountants of India are given below :
Name of the Party Nature of Relationship
1. Subsidiary Company Nicco Insurance Agents & Consultants Ltd.
2. Associates Alliance Management & Fiscal Services Ltd.
3. Key Management
personnel Hon'ble Justice N K Bhattacharyya
(Retired)
Chairman (upto 30th May '2010)
D. D. Saila - Chiarman
(from 31st May '2010)
L. N. Kaul - Managing Director &
Company Secretary
J. Mukherjee - Chief Financial Officer
S. K. Saha - Deputy General
Manager upto 31.12.10
6. Disclosure for Lease under Accounting Standard (AS-19)
All the Lease deals of the company has already been matured. Hence, no
separate disclosure under AS-19 is required.
7. Information pursuant to Accounting Standard (AS-22)
In view of uncertainty of future profits for reasons stated in note no.
10 and 11 of Schedule 15B, net deferred tax asset arising as at
31.03.2011 has not been recognized in the books of accounts.
8. The company is primarily engaged in the business of Hire Purchase
and Leasing. Revenue from sale of power has not exceeded 10% of total
revenue including write back. Hence, there is no other reportable
segment as defined under the Accounting Standard 17 "Segment Reporting"
issued by the Institute of Chartered Accountants of India.
9. There being no indication of decline in net realizable market value
below it's carrying cost as per valuation made in the year 2006- 07,
impairment of the assets of the company coming under the purview in
terms of Accounting Standard 28 has not been considered.
10. RBI has cancelled the Certificate of Registration of the Company
to carry out Non-Banking Financial activities of the Company vide it's
order dated 31st March, 2005 against which Company has preferred an
appeal before appellate authority for NBFC, Joint Secretary, Ministry
of Finance, Govt, of India, New Delhi which is also pending. In view of
the above, the accounts of the company has been prepared on going
concern concept based on the legal opinion obtained.
11. a) UCO Bank, the leader of the consortium of bankers, moved an
application in the Debt Recovery Tribunal on 29.11.2005 to recover the
outstanding dues amounting to Rs. 119.23 crores (previous year Rs.
119.23 crores) pending against the company which the company has
contested. The learned D.R.T has passed an order on 01.12.2005 that
till disposal of the prayer for interim relief, the company will not
deal with or transfer or dispose off any of it's secured properties.
However, the company shall carry on it's business as usual.
b) UCO Bank has filed another application in DRT -1 to recover Rs. 327
lacs ( previous year Rs. 327 lacs ) on account of term loan, matter is
pending.
c) IFCI has filed an application in DRT -1 to recover Rs. 62.91 lacs (
previous year Rs. 62.91 lacs ), matter is pending.
d) Indus Ind Bank has filed an application in DRT, Chennai to recover
Rs. 164.46 lacs ( previous year Rs. 164.46 lacs ) on account of
Securitisation loan which is being contested.
e) Axis Bank has filed an application in DRT, Chennai to recover Rs.
1368 lacs ( previous year Rs. 1368 lacs) which is also being contested.
f) International Finance Corporation initiated a suit in the Hon'ble
High Court at Calcutta for recovery of a sum of US$ 26,82,877.73 (
previous year US$ 26,82,877.73) with further interest against the
company. The case is being contested.
g) UCO Bank has taken measure under section 13(4) of the SARFESI Act
against the company. The company filed an application under section
17(1) of the said Act.
In the Sarfesi proceedings against the company by UCO Bank, being
aggrieved by DRAT's Order, company filed a Writ Petition before Hon'ble
High Court, Calcutta and due to some deficiency in the procedure
followed by UCO Bank and Others., High Court Ordered that no coercive
steps should be taken by Bank. Bank has appealed against this order.
h) UTKAL Auto has filed a claim of Rs. 76.90 lacs (previous year 76.90
lacs) against the company before Arbitrator at Cuttack. The company
has filed a counter claim of Rs. 482.74 lacs ( previous year Rs. 482.74
lacs ) against UTKAL Auto before the Arbitrator, which is pending.
Necessary action, if any, will be taken on disposal of the arbitration
proceedings.
12. (a) The entire secured loan accounts of the company ( except
interest accrued and due (amounting to Rs. 120.14 crores ( previous
year Rs. 120.23 crores) has become NPA in the books of the lenders. The
banks/Financial Institutions have stopped giving statements and
confirmations. Interest on these accounts have been provided as per the
last agreed rates. However, the said accounts remain unconfirmed.
(b) Positive balance lying in the current accounts with the members of
the consortium bank, i.e. Rs. 162.11 lacs ( previous year Rs. 162.11
lacs ) in UCO Bank, Rs. 0.19 lacs ( previous year Rs. 0.19 lacs ) in
Bank of Baroda, Rs. 3.01 lacs ( previous year Rs. 3.01 lacs ) in Canara
Bank, Rs. 0.10 lacs ( previous year Rs. 0.10 lacs ) in Central Bank of
India, Rs. 0.01 lacs ( previous year Rs. 0.01 lacs ) in United Bank of
India, Rs. 42.53 lacs ( previous year Rs. 42.53 lacs ) in Indian
Overseas Bank, Rs. 0.05 lacs ( previous year Rs. 0.05 lacs ) in State
Bank of Mysore, Rs. 0.20 lacs ( previous year Rs. 0.20 lacs ) in State
Bank of Travancore remain unconfirmed and inaccessable for the reasons
stated in point no. 12(a) above.
(c) Balance of Rs. 1.05 lacs from other Banks also remain unconfirmed.
(d) Fixed deposit made by the company with the members of the
consortium bank, i.e. Rs.13.46 lacs ( previous year Rs.13.46 lacs) with
Bank of Baroda, Rs. 0.05 lacs ( previous year Rs. 0.05 lacs ) in Indian
Overseas Bank and with other bank amounting to Rs. 0.25 lacs ( previous
year Rs. 0.25 lacs ) remain unconfirmed and accordingly was provided
for.
13. Employee Benefits :
b) Particulars in respect of post retirement benefit under defined
benefit plans are as follows :
F. The plan assets created against the Gratuity and Leave Encashment
liability of the company wholly comprised of the rights under insurance
policies taken from the LICI.
G. Implementation of revised AS-15 has resulted change in treatment of
defined benefit plan which has contributed to increase in defined
benefit obligation by Rs. 1.00 lac (previous year decrease of Rs. 1.91
lacs) with corresponding increase in loss by Rs. 1.00 lac (previous
year decrease of Rs. 1.91 lacs).
H. The entitlement of pension accrues to the eligible employee after
completion of 15 years of service beyond a specific grade at normal
retirement age. As total service period as on 31.03.2011 is less than
15 years for the concerned employees of the company there is no
eligibility for pension as on date. Upto date shortfall, if any, as per
actuarial valuation, in respect of contribution towards such fund is
yet to be identified. However, contribution to the super annuation fund
amounting to Rs. 1.30 lacs ( previous year Rs. 1.51 lacs ) was made as
per the service rules of the company for the eligible employees and was
debited to 'Expenses on Employees'.
I. In respect of Provident funds for eligible employees maintained by a
trust, in the nature of defined benefit plan, upto date shortfall, if
any, as per actuarial valuation, in respect of contribution towards
such fund is yet to be identified. However contribution to those
provident funds amounting to Rs. 1.07 lacs during the year ( previous
year Rs. 1.11 lacs ) is recognised as expenses and included in
'Expenses on Employees'. Shortfall of Rs. 0.09 lacs ( previous year Rs.
0.64 lacs ) in contribution to such provident funds has been provided
to the extent of the information available with the company.
14. (a) Honourable Company Law Board Eastern Region Bench had passed an
order vide it's order dated 22nd March, 2005 against Company's petition
No. 641(58AA)/ERB/2004 for rescheduling the repayment of Company's
Fixed Deposit liability including interest accrued thereon u/s 45QA of
the RBI Act. The company had filed an application before CLB in the
month of February, 2007 to extend the period of payment of these dues
and CLB has modified the order dated 22nd March, 2005 vide their order
dated 28.06.2007 granting an extension of six months on payment of
deposit from the date of maturity of deposits from March, 2007 and
onwards. The said order also stipulates that no interest need to be
paid along with the last instalement as directed in the original scheme
and the question of payment of interest shall be decided later and
accordingly interest provided at contracted rate and as per CLB order
on outstanding Fixed Deposit liability has been shown as 'interest
accrued but not due' under current liability.
(b) Pursuant to an application dated 17.03.2008 made by the company u/s
391 and 394 of the Companies Act, 1956 before the Hon'ble High Court,
Calcutta to reduce the paid up equity share capital from Rs. 10 to Rs.
2 each and issue new equity shares of Rs. 2 each to the fixed deposit
holders to the extent of their principal amount due in the company as
on 01.04.2007 at a price in conformity with SEBI ( Disclosure and
Investor Protection Guidelines 2000). Separate meetings of shareholders
and fixed deposit holders were convened as per the order of the Hon'ble
High Court, Calcutta under the chairmanship of separate court appointed
chairperson and the scheme was duly approved with requisite majority in
both the meetings. The matter is pending before the Hon'ble High Court,
Calcutta.
(c) Company has obtained an interim stay order from Hon'ble High Court
Calcutta vide order dated 15th February, 2008 restraining deposit
holders from initiating any proceedings against the company and stayed
the proceedings already initiated till disposal of the application made
by the company u/s 391 and 394 of the Companies Act, 1956 pending
before Hon'ble High Court, Calcutta.
(d) Entire amount of Fixed Deposits ( principal value excluding
interest ) amounting to Rs. 1982.04 lacs (previous year Rs. 2363.60
lacs) has matured and is due for payment as on 31st March, 2011.
15. (a) Networth of the company has completely been eroded due to
large provisioning and huge loss suffered and consequently outstanding
balance of fixed deposit has exceeded the ceiling fixed by Reserve Bank
of India.
(b) The unclaimed deposit has been arrived at based on such depositor
who had not claimed their deposit amount by surrendering the deposit
receipt with the Company though they have matured and also payable as
per CLB Order. Many depositors amongst them are traceable but despite
request not surrendering their deposit receipt because they are
treating FDR as basic proof of deposit of money and willing to part
with it only if deposit amount is paid in one lump sum. Company is
unable to pay to depositor due to the precarious financial condition
but settling with such depositors who are approaching the company under
hardship condition. Besides, a Scheme of Compromise with fixed
depositors under Section 391 and 394 of the Companies Act, 1956 is
pending before Hon'ble High Court, Calcutta which covers these
depositors also.
In the view of the critical financial conditions which the company is
facing , it could not transfer an amount of Rs 1,647,712 ( previous
year Rs. 1,370,384 ) to 'Investors Education and Protection Fund'.
16. Basic/diluted earning per share, as required by Accounting
Standard (AS-20)" Earning per share", of Rs. -10.04 ( previous year Rs.
-8.77 has been calculated by dividing the net loss after taxation for
the year as per the accounts which is attributable to equity
shareholder by 40146773 being the weighted average number of equity
shares outstanding during the year.
17. Disclosure as per Accounting Standard - 29 regarding Provisions,
Contingent Liabilities and Contingent Assets :
Interim stay has been vacated by the Hon'ble High Court of Madras which
was granted earlier against the applicability of Service Tax on Lease
and Hire Purchase transaction and the matter is pending before Supreme
Court. Based on the interim stay, Service Tax on financial transaction
amounted to Rs. Nil (previous year(s) Rs. 29.33 lacs which has already
been provided for).
18. Reserve Bank of India vide Notification No. DNBS.167/CGN
(OPA)-2003 dt. March 29,2003 has directed that every NBFC shall append
to its balance sheet prescribed under the Companies Act 1956, the
particulars in the format as set out in the schedule annexed, which has
been complied with.
19. A fire broke out at the Registered office of the company at Nicco
House on 27th March, 2009 affecting the operations of the company apart
from causing damage to Building, Furniture & Fixture, Computer system,
certain records for earlier years. General Diary for fire was lodged by
the company and 'on account' payment of Rs. 10 lacs was received in the
previous year which was utilised for repair, renovation and
rehabilitation work in the office premises. The said amount was
received against claim under relevant policies which was lodged with
the Insurance Company and a further payment of Rs. 6.19 lacs was
received during the year as full and final settlement amount, which was
also utilised for the said purpose.
20. It has been observed by the management that a fraud had been
perpetrated by a few employees of the company during the F.Y 2008 - 09
and 2009-10. The matter was referred to Deputy Commissioner ( Detective
Department) Kolkata Police, Lalbazar for further investigation. Two
employees were identified as perpetrator of fraud against whom
necessary action was taken by police. Investigation is still in
progress, impact of which could be ascertained on completion of the
investigation. However, based on the prima facie investigation made by
the management a sum of Rs. 140.62 lacs has appeared to have been
misappropriated by the employees which has been shown under the head "
Accounts Receivable - Others " in Schedule 7(c) and has been provided
for.
21. On recommendation from Registrar of Companies, Kolkata, Ministry
of Corporate Affairs, Government of India directed Serious Fraud
Investigation Office to carry out investigation against the company
under section 235 of the Companies Act, 1956 which is under progress.
22. (i) Interest cost includes provision of Rs. 2.08 lacs ( previous
year Rs. 1.57 lacs ) towards penal interest levied by RBI for shortfall
in maintenance of SLR.
(ii) Interest expense is net of Rs. 37.76 lacs ( Previous year Rs.
87.78 lacs ) being interest earned on deposit and others.
23. Other receipts include Rs. 1.25 lacs (previous year Rs. 1.25 lacs)
from rent HP income includes Rs. Nil (previous year Rs. 3.63 lacs)
recovered from NPA parties.
24. Based on the informations available with the company, there are no
dues towards Micro, Small and Medium Enterprises as on 31.03.2011.
25. The Company has paid to a number of depositors on hardship cases
on settlement basis based on principal amount outstanding.
26. The process of preparation of Fixed Asset register destroyed in
the fire has been initiated. However, the W.D.V of assets (i.e
furniture, computers etc.) destroyed in fire is not significant.
27. All assets financed through Hire Purchase / Lease have turned Non
Performing Assets (N.P.A) in the books of the Company and have been
provided for. List of such inventories are available excepting a few
cases where financing were made through dealer which is not
substantial.
28. The areas have been identified where there is a scope of
improvement for internal control system and steps have been taken for
the said improvement.
29. The initiation has been taken to complete the process of transfer
of shares where ever possible and to update the records.
30. The investigation for the fraud committed by two employees in the
FY. 2008-09 and thereafter is on the verge of completion and amount
will be finally ascertained on receipt of final report from Kolkata
Police.
31. The previous year figures have been regrouped / restated wherever
considered necessary to conform to the current year's classification.
Mar 31, 2010
1. The Company has complied with the guidelines issued by the Reserve
Bank of India in respect of Prudential Norms for income recognition,
accounting standards, provisions/ write-downs of bad and doubtful
debts.
2. Contingent Liabilities
a) Claims/Disputed liabilities not acknowledged as debt.
The Company has received the following demands which are disputed by
the Company and are not provided for:
Nature of Contingent
liability Status of the case As at 31st
March As at 31st
March
2010
(Rs. lacs) 2009
(Rs. lacs)
Contingent liability
w.r.t Central The disputed demand
is pending
and State Sales Tax before W.B.Comme-
rcial Taxes
(A.Y. 1995-1996 to
2004-2005) Appellate & Revisi-
onal Board. 27.50 27.50
Contingent liability
w.r.t Income The disputed demand
was pending
Tax (A.Y. 2000-01,
2001-02 & before Commissioner
2003-04) (Appeals)-VI - 114.01
Total 27.50 141.51
b) Advance paid / Bank Guarantee of Rs. 26.53 lacs (Previous Year Rs.
26.53 lacs) was issued in favour of Assistant Commissioner of
Commercial Tax, Bangalore against an appeal preferred by the company
and pending before the Karnakata Appellate Tribunal for Commercial Tax
at Bangalore.
c) In respect of certain future hire purchase instalments of Rs. nil
lacs (Previous Year Rs. 2.27 lacs) against securitisation with bank and
financial institution.
3. (a) Wholetime Directors including Managing Directors Remuneration
(Minimum)
(b) The Managing Director was paid overall remuneration within the
sanctioned scale of pay approved by the shareholders at the Annual
General meeting held on 28th September, 2005 and subsequently approved
by Central Government on 7th August, 2006. However payments made during
the FY 2007-08 in terms of the scale approved for the first year
crossed the permissible limit by Rs. 2.72 lacs under section 198(4) of
the Companies Act, 1956 for which the company has sought the required
approval of the Central "Government.
The Managing Director of the Company was re appointed for a period of
two years, i.e. from 15th April 2008 to 14th April, 2010. His
reappointment alongwith salary and perquisites amounting to Rs. 9.00
lacs per annum were approved by the Board of Directors in its meeting
held on 12th April, 2008 and subsequently by the shareholders of the
company on 26th September, 2008 in the Annual General Meeting of the
company. Approval from Central Government vide letter dated 14th May,
2010 has- been received reducing the remuneration to Rs. 8.26 lacs per
annum. Board has decided to appeal to Central Government to reconsider
the decision and to follow up the pending approval for the excess
remuneration paid in the year 2007-08.
4. Subsequent to cessation of SWAP agreement with UCO Bank, foreign
currency loan has been valued at the rate prevailing as at close of
31.03.2010 and Rs. 107.51 Lacs (previous year foreign currency
fluctuation loss of Rs. 205.79 Lacs, refer Schedule 13) has been taken
into profit & loss account as foreign currency fluctuation gain (refer
Schedule 11).
6. Disclosure for Lease under Accounting Standard (AS-19)
All the Lease deals of the company has already been matured. Hence, no
separate disclosure under AS-19 is required.
7. Information pursuant to Accounting Standard (AS-22)
In view of uncertainty of future profits for reasons stated in note no.
10 and 11 of Schedule 15B, net deferred tax asset arising as at
3.1.03.2010 has not been recognized in the books of accounts.
8. The company is primarily engaged in the business of Hire Purchase
and Leasing. Revenue from sale of power has not exceeded 10% of total
revenue including write back. Hence, there is no other reportable
segment as defined under the Accounting Standard 17 "Segment Reporting"
issued by the Institute of Chartered Accountants of India.
9. There being no indication of decline in net realizable market value
below its carrying cost as per valuers report obtained by the company,
impairment of the assets of the company coming under the purview in
terms of Accounting Standard 28 has not been considered.
10. RBI has cancelled the Certificate of Registration of the Company
to carry out Non-Banking Financial activities of the Company vide its
order dated 31st March, 2005 against which Company has preferred an
appeal before appellate authority for NBFC, Joint Secretary, Ministry
of Finance, Govt, of India, New Delhi which is also pending. In view of
the above, the accounts of the company has been prepared on going
concern concept based on the legal opinion obtained.
11. a) Uco Bank, the leader of the consortium of bankers, moved an
application in the Debt Recovery Tribunal on 29.11.2005 to recover the
outstanding dues amounting to Rs. 119.23 crores (previous year Rs.
119.23 crores) pending against the company which the company has
contested. The learned D.R.T has passed an order on 01.12.2005 that
till disposal of the prayer for interim relief, the company will not
deal with or transfer or dispose of any of its secured properties.
However, the company shall carry on its business as usual.
b) Uco Bank has filed another application in DRT -1 to recover Rs. 327
lacs (previous year Rs. 327 lacs) on account of term loan, matter is
pending.
c) IFCI has filed an application in DRT - I to recover Rs. 62.91 lacs
(previous year Rs. 62.91 lacs), matter is pending.
d) Indus Ind Bank has filed an application in DRT, Chennai to recover
Rs. 164.46 lacs (previous year Rs. 164.46 lacs) on account of
Securitisation loan which is being contested.
e) Axis Bank has filed an application in DRT, Chennai to recover Rs.
1368 lacs (previous year Rs. Nil) which is also being contested.
f) International Finance Corporation initiated a suit in the Honble
High Court at Calcutta for recovery of a sum of US$ 26,82,877.73
(previous year US$ 26,82,877.73) with further interest against the
company. The case is being contested.
g) UCO Bank has taken measure under section 13(4) of the SARFESI Act
against the company. The company filed an application under section
17(1) of the said.Act.
In the Sarfesi proceedings against the company by UCO Bank, being
aggrieved by DRATs Order, company filed a Writ Petition before Honble
High Court, Calcutta and due to some deficiency in the procedure
followed by UCO Bank and Ors., High Court Ordered that no coercive
steps should be taken by Bank. Bank has appealed against this order.
h) UTKAL Auto has filed a claim of Rs. 76.90 lacs against the company
before Arbitrator at Cuttack. The company has filed a counter claim of
Rs. 482.74 lacs against UTKAL Auto before the Arbitrator, which is
pending. Necessary action, if any, will be taken on disposal of the
arbitration proceedings.
12. (a) The loan accounts of the company amounting to Rs. 120.23
crores (previous year Rs. 121.30 crores) has become NPA in the books of
the lenders. The banks/ Financial Institutions have stopped giving
statements and confirmations. Interest on these accounts have been
provided as per the last agreed rates. However, the said accounts
remain unconfirmed.
(b) Positive balance lying in the current accounts with the members of
the consortium bank, i.e, Rs. 162.11 lac (previous year Rs. 162.11
lacs) in UCO Bank, Rs. 0.19 lac (previous year Rs. 0:19 lacs) in Bank
of Baroda, Rs. 3.01 lac (previous year Rs. 3.01 lacs) in Canara Bank,
Rs. 0.10 lac (previous year Rs. 0.10 lacs) in Central Bank of India,
Rs. 0.01 lac (previous year Rs. 0.01 lacs) in United Bank of India, Rs.
42.53 lac (previous year Rs. 42.53 lacs) in Indian Overseas Bank, Rs.
0.05 lac (previous year Rs. 0.05 lacs) in State Bank of Mysore and Rs.
0.20 lac (previous year Rs. 0.20 lacs) in State Bank of Travancore
remain unconfirmed and unaccessable for the reasons stated in point no.
12(a) above. -
(c) Balance of Rs. 1.07 lac (previous year Rs. 0.95 lac) from other
Banks also remain unconfirmed.
(d) Fixed deposit made by the company with the members of the
consortium bank, i.e, Rs. 13.46 lac (previous year Rs. 13.46 lacs) with
Bank of Baroda, Rs. 0.05 lac (previous year Rs. 0.05 lac) in Indian
Overseas Bank and with other bank amounting to Rs. 0.25 lac (previous
year Rs. 0.25 lac) remain unconfirmed and accordingly was provided for.
13. Employee Benefits :
Following adjustments relating to employee benefits have been made in
these accounts in keeping with Accounting Standard 15 (Revised) issued
by the Institute of Chartered Accountants of India.
F. The plan assets created against the Gratuity and Leave Encashment
liability of the company wholly comprised of the rights under insurance
policies taken from the LICI.
G. Implementation of revised AS-15 has resulted change in treatment of
defined benefit plan which has contributed to decrease in defined
benefit obligation by Rs. 1.91 lacs with corresponding decrease in loss
by Rs. 1.91 lacs.
H. The entitlement of pension accrues to the eligible employee after
completion of 15 years of service beyond a specific grade at normal
retirement age. As total service period as on 31.03.2010 is less than
15 years for the concerned employees of the company there is no
eligibility for pension as on that date and hence accrued pension as at
31.03.2010 was not valued during actuarial valuation of superannuation
fund. However, contribution to the super annuation fund amounting to
Rs. 1.51 lacs (previous year Rs. 1.27 lacs) was made as per the service
rules of the company for the eligible employees and was debited to
Expenses on Employees.
I. In respect of Provident funds in the matter of defined benefit plan,
in the absence of issuance of Guidance Note from the Actuarial Society
of India, it is difficult to get it reliably measured. Therefore,
contribution to those provident funds amounting to Rs. 1.11 lacs
(previous year Rs. 1.06 lacs) during the year is recognised as expenses
and included in Expenses on Employees. Shortfall of Rs. 0.64 lacs
(previous year Rs. nil) in contribution to. the provident funds in the
nature of defined benefit plans is provided to the extent of the
information available with the company.
4. Honorable Company Law Board Eastern Region Bench had passed an order
vide its order dated 22nd March, 2005 against Companys petition No.
641 (58AA)/ERB/2004 for rescheduling the repayment of Companys Fixed
Deposit liability including interest accrued thereon u/s 45QA of the
RBI Act. The company had filed an application before CLB in the month
of February 2007 to extend the period of payment of these dues and CLB
has modified the order dated 22nd March, 2005 vide their order dated
28.06.2007 granting an extension of six months on payment of deposit
from the date of maturity of deposits from March 2007 and onwards. The
said order also stipulates that no interest need to be paid alongwith
the last instalment as directed in the original scheme and the æ
question of payment of interest shall be deceided later and accordingly
interest provided at contracted rate and as per CLB order on
outstanding fixed Deposit liability has been shown as interest accrued
but not due under current liability.
Persuant to an application made by the company u/s 391 and 394 of the
Companies Act, 1956 before the Honble High Court, Calcutta to reduce
the share capital of the company and issue equity share to the fixed
deposit holders in lieu of their outstanding principal as at
01.04.2007, seperate meetings of shareholders and fixed deposit holders
were convened as per the order of the Honble High Court, Calcutta
under the chairmanship of seperate court appointed chairperson and the
scheme was duly approved with requisite majority in both the meetings.
The matter is pending before the Honble High Court, Calcutta.
Company has obtained an interim stay order from Honble High Court
Calcutta vide order dated 15th February, 2008 restraining deposit
holders from initiating any proceedings against the company and stayed
the proceedings already initiated till disposal of the application made
by the company u/s 391 and 394 of the Companies Act, 1956 pending
before Honble High Court, Calcutta.
As against the outstanding dues of Rs. 2547.91 lacs payable upto
31.03.2010 as per CLB order, the company has paid / adjusted Rs. 532.06
lacs towards Fixed Deposit.
15. Networth of the company has completely been eroded due to large
provisioning and huge loss suffered and consequently outstanding
balance of fixed deposit has exceeded the ceiling fixed by Reserve Bank
of India.
16. Basic/diluted earning per shares.as required by Accounting
Standard (AS-20)" Earning per share", of Rs. -8.77 (previous year Rs.
-10.14) has been calculated by dividing the net loss after taxation for
the year as per the accounts which is attributable to equity
shareholder by 40146773 being the weighted average number of equity
shares outstanding during the year.
17. Disclosure as per Accounting Standard - 29 regarding Provisions,
Contingent Liabilities and Contingent Assets :
Interim stay has been vacated by the Honble High Court of Madras which
was granted earlier against the applicability of Service Tax on Lease
and Hire Purchase transaction and the matter is pending before Supreme
Court. Based on the interim stay, Service Tax on financial transaction
amounting to Rs.29.33 lacs which was not paid earlier at Southern
Division of the comapny has now being provided for.
18. Reserve Bank of India vide Notification No. DNBS.167/CGN
(OPA)-2003 dt. March 29, 2003 has directed that every NBFC shall append
to its balance sheet prescribed under the Companies Act, 1956, the
particulars in the format as set out in the schedule annexed, is
complied with.
19. A fire broke out at the Registered office of the company at Nicco
House on 27th March, 2009 affecting the operations of the company apart
from causing damage to Building, Furniture & Fixture, Computer system,
certain records for earlier years. General Diary for fire was lodged by
the company and on account payment of Rs. 10 lacs was received which
was utilised for repair, renovation and rehabilitation work in the
office premises. The said amount was received against claim under
relevant policies which was lodged with the Insurance Company awaiting
settlememt and the amount of settlement will be adjusted in the year of
settlement as the amount is unascertained.
20. It has been observed by the management that a fraud had been
perpetrated by a few employees of the company during the FY. 2008-09
and thereafter. The matter was referred to Deputy Commissioner (
Detective Department) Kolkata Police, Lalbazar for further
investigation. Two employees were identified as perpetrator of fraud
against whom necessary action was taken by police. Investigation is
still in progress, impact of which could be ascertained on completion
of the investigation. However, based on the prima facie investigation
made by the management a sum of Rs. 140.62 lacs has appeared to have
been misappropriated by the employees which has been shown under the
head " Accounts Receivable - Others " in Schedule 7(c) and has been
provided for.
Further an amount of Rs. 4.33 lacs and Rs. 2.60 lacs, debited and
credited respectively by bank has not been responded in the absence of
proper details.
21. On recommendation from Registrar of Companies, Kolkata, Ministry
of Corporate Affairs, Government of India directed Serious Fraud
Investigation Office to carry out investigation againt the company
under section 235 of the Companies Act, 1956 which is under progress.
22. (i) Interest cost includes provision of Rs. 1.57 lacs (previous
year Rs. 29.39 lacs) towards penal interest levied by RBI for shortfall
in maintenance of SLFi.
(ii) Interest is net of Rs. 87.78 lacs (previous year Rs. 24.05 lacs)
being interest earned on deposit and others.
23. Other receipts include Rs. 1.25 lacs from rent. HP income includes
Rs. 3.63 lacs recovered from NPA parties.
24. Based on the informations available with the company, there are no
dues towards Micro and Small Enterprises as on 31.03.2010.
25. The previous year figures have been recast / restated wherever
necessary to conform to the current years classification.
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