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1.Contingent liabilities: AS ON AS ON
31.03.2005 31.03.2004
(Rupees) (Rupees)
a) In respect of
Taxation decisions in favour of the
Company and not accepted by the Tax 68,436,387 68,436,387
Authorities
b) Claims against the Company not
acknowledged as debts for which no
provision is made.
I Taxation 33,769,670 33,371,163
II Turnover Tax 3,073,000 3,073,000
3. The Company has securitised/assigned a part of its Stock on Hire
due from its customers on the basis of recourse to the Company
amounting to Rs.Nil (Previous year Rs. 1,33,15,506/-). The amount
received on such securitisation/assignment being the discounted value
of such gross receivable (net of margin and security deposit) have been
reduced from Stock on Hire. However the Company has recourse on assets
financed including Stock on Hire. The contingent liability in respect
of the above transaction is Rs. Nil.
4. The Company has entered into arrangements with Financial
Organisations under which the Company acts as agent for sourcing of
business and guaranteed collection of defaulted Equated Monthly
Instalments (EMIs) in respect of financial facilities offered by such
Financial Organisations. In such arrangement the Financial
Organisations and/or the company hold post dated cheques from the
hirers. Respective Financial Organisations and/or the company deposit
the cheques on their due dates. Company guarantees the collection of
defaulted cheques, if any Against this payment, the company holds a
claim to the extent of defaulted EMI from the clients. In view of the
above, contingent liability, if any, is not ascertainable. In case
hirer defaults for more than 3 EMI then the respective Financial
Organisations have the right to transfer the total future receivable
from such hirers to the company and the company has to make upfront
payment to the Financial Organisation.
The amount recoverable from such outstanding hirers is Rs. 208,289,567
( Previous Year Rs 157,372,484/-) as on 31.03.2005 has been included in
Loans and Advances. The company has shown the corresponding liability
of Rs. 95,375,862 (Previous year Rs.59,664,518/-) payable to the
financial organisations against these outstanding net of the margin
money and other claims due to the company.
UTI Bank Ltd. has filed a recovery suit in the Debt Recovery Tribunal,
Mumbai against the company towards recovery of the dues for Rs.
139,126,631 In the absence of adequate information from the bank, the
extent of liability and its corresponding effect on the statement of
affairs of the company can not be ascertained.
6. During the year the company has not paid the following amounts
payable to various banks or financial institutions as appeared in the
books of accounts of the company on due dates.
Nature of Facility Amounts due but not paid
till 31.03.2005 (Rs.)
NCD 550,000,000
Term Loans 326,302,721
CC/WCDL 1,027,601,260
7. The company has received notices from some of its lenders to recall
the advances and for liquidation of the company. Suits have been filed
in Debt Recovery Tribunal, Debt Recovery Appellate Tribunal against the
company. One bank has filed a criminal ease against the company, which
is being contested.
8. The company has changed its accounting policy regarding charging of
interest on various credit facilities from accrual to payment basis.
The company has not made any provision for interest on various credit
facilities due to classification of the account as non-performing by
the lenders, therefore, the total amount payable on account of interest
and the contingent liability arising thereon to various lenders is not
ascertainable.
9. Pursuant to Circular No.9/2002 issued by the Department of Company
Affairs on the 18th of April, 2002, the Company being a Non Banking
Finance Company registered with the Reserve Bank of India is exempt
from creation of Debenture Redemption Reserve for privately placed
debentures.
10. The Company has issued 1,639,670 11% Redeemable Cumulative
Preference Shares of Rs.10/-each for a period of twenty years with a
put and call option to redeem 25% of the face value after completion of
every five years from the date of allotment. The Board of Directors may
at their discretion offer conversion of the same into such number of
Equity Shares and at such terms and conditions as deemed fit by the
Board.
11. As per the terms of offer an amount of Rs. 3,529,675/- has became
due for redemption as on 31.03.2004. The company has neither exercised
their discretion nor redeemed the preference shares.
12. The Company has not provided preference dividend amounting to
Rs.1,803,637/- for the current year. ( P.Y Rs.1,803,637/-). Cumulative
amount for the same is Rs.7,214,548/- ( P. Y. Rs. 5,410,911/-)
13. Other than the sitting fees of Rs. 15,000/- the company has not
paid any remuneration to its directors during the year.
14. Taxation
a) In the absence of taxable income, no provision for taxation has been
made in the books of accounts.
b) The Income Tax assessment has been completed up to assessment year
2002-03.
c) No deferred tax asset has been recognised since there is no
reasonable or virtual certainty that future taxable income will be
available against which such deferred tax assets can be realised.
15. The company is engaged primarily in the business of financial
services and accordingly there are not separate reportable segments as
per accounting standard 17 dealing with segment reporting.
16. The related party disclosures as required as per Accounting
Standard 18 (AS 18) issued by the Institute of Chartered Accountants of
India is as under:
A. Name of the Related Party Kinetic Engineering Limited Relationship
Promoter Company with Substantial interest Nature of Transaction Inter
corporate Deposit taken. Volume of the Transaction Rs. 43,500,000/-
B. Name of the Related Party Kinetic Motor Company Limited, Microage
Instruments Pvt. Ltd Relationship Associate Companies Nature of
Transaction Inter corporate deposit, Interest on (CDs Volume of
Transaction (Rs.) Rs. 109,756,495/-
17. Earning per Share :
AS ON AS ON
31.03.2005 31.03.2004
a) Profit/(Loss) after Tax (Rs.) (1,224,450,938) (966,486,965)
b) Weighted average number of equity
Shares (Basic) (Nos.) 12,638,748 12,638,748
c) Nominal value per equity share (Rs.) 10 10
d) Earnings per share (Basic & Diluted) (Rs.) (96.88) (76.47)
18. The management has completed the majority portion of reconciliation
of stock on hire, seized vehicles, tie up debtors, un-matured finance
charges, security deposits, advance EMI, and individual Mrer account in
institutional finance business etc. and resulting entries have been
reflected in sundry debtors account. Necessary adjustment shall be
carried out on completion of further reconciliation.
19. Sundry debtors, sundry creditors, loans and advances given and
taken, balance with banks and assets under hire purchase and lease are
subject to confirmation. The necessary effect if any shall be taken in
accounts on completion of such reconciliation.
20. The allotment money inclusive of share premium in arrears is Rs.
3,017,000/-(P.Y. Rs. 3,017,000/-).
21. The Stock on Hire is net of Unmatured Finance Charges amounting to
Rs. 570,492/- (P.Y. Rs.8,703,091/-).
22. The consumer court has passed orders to refund the security
deposits accepted by the company from hirers amounting to Rs.897,047/-
which is outstanding.
23. Fixed Deposit with Bank includes fixed deposits amounting to
Rs.2,270,500/- under lien (Previous year Rs. 10,598,106/-).
24. Some of the bank accounts are the subject matter of reconciliation.
Necessary adjustments, the impact of which is unascertainable, shall be
carried out on completion of further reconciliation.
25. Pursuant to the decision taken by the company in 2002-03, to repay
all fixed deposits, the company opened an escrow account specifically
for the purpose of this repayment with Development Credit Bank (DCB).
The bank balance in this account is Rs.141,187/- and Term deposit of
Rs. 1,000,000/- is also kept with the same bank. The company has also
kept the Govt. of India bonds with DCB amounting to Rs. 100,000/-.
26. The bank balances includes an amount of Rs. 3,408,783/- being an
amount payable towards unclaimed dividend.
27. The company has to transfer an amount of Rs. 1,201,016/- being the
amount of unclaimed dividend to Investor Education and Protection Fund.
28. The Company has no information as to whether any of its suppliers
constitute Small Scale Industrial Undertakings (SSI) and therefore, the
amount due to such suppliers has not been identified.
29. The disclosures required in terms of Paragraph 98B of the Non
Banking Financial Companies Prudential Norms (Reserve Bank) Directions,
1998 are given in the Annexure forming part of these accounts.
30. The company has transferred its rights in the own land, acquired by
the company against settlement of its claims against the settlement
with ICICI Bank towards settlement of the debentures.
31. Previous years figures have. been re-grouped and reclassified
wherever necessary.
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