DIRECTORS' REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS Dear Shareholders, Your Directors present the Fifth Annual Report for the year ended 31st March 2008. DIVIDEND Your Directors have not recommended payment of dividend to the equity shareholders due to absence of profits. STATE OF AFFAIRS During the period under review, the company has acquired the Investment Division of KEC International Limited pursuant to a Scheme of Arrangement. SCHEME OF ARRANGEMENT A Scheme of Arrangement was proposed between National Information Technologies Limited, RPG Transmission Limited, the company and KEC International Limited and their respective shareholders envisaging interalia demerger of the Investment Division of KEC International Limited to the company. The Scheme became effective on 30th January 2008 on filing of the Orders of the Hon'ble High Courts with Ministry of Corporate Affairs. On the Scheme becoming effective, the issued, subscribed and paid-up share capital of the company as on that date, being Rs. 5 lacs divided into 50,000 equity shares of Rs. 10/- each, stood cancelled. The consideration for taking over of the Investment Division of KEC International Limited has been discharged by the company by issuing 30,14,869 fully paid-up equity shares of Rs. 10/- each to the shareholders of KEC International Limited as on 18th February 2008, the Record Date. The company has made applications to Bombay Stock Exchange Limited and National Stock Exchange of India Limited for listing of the shares, issued pursuant to the Scheme, on the said exchanges-and has received in- principle approval for listing of the said shares from Bombay Stock Exchange Limited. CHANGES IN MEMORANDUM OF ASSOCIATION Change of Name The company was incorporated under the Companies Act, 1956 as a private limited company on 24th January 2003 as MP Power Line Private Limited. The company was converted into public limited company on 2nd August 2007 and subsequently the name of the company was changed from MP Power Line Limited to Octav Investments Limited with effect from 10th January 2008 on receipt of fresh certificate of incorporation consequent upon change of name from the Ministry of Corporate Affairs. Change in Authorised Capital The company was incorporated with authorized capital of Rs. 1 Crore divided into 10,00,000 equity shares of Rs. 10/- each. The authorized capital of the company was increased to Rs. 5 Crores divided into 50,00,000 equity shares of Rs. 10/-each. Change in Objects Clause The Objects Clause of the company was changed by inserting a new clause relating to carrying on of the investments business. INDUSTRY OVERVIEW AND FUTURE OUTLOOK The Indian economy continued its "upward turn with its GDP showing consistent growth. The stock market has gone through a very volatile phase with the barometer Sensex indicators fluctuating widely throughout the year. The upward movement of the capital market indices and other similar indicators during the year was mainly driven by Indian economy growing at a faster rate, better corporate performance, mergers and acquisitions in the country and abroad by certain large corporates and increasing inflow of funds. As such, there are ample investment opportunities in the capital market in view of the growing Indian economy. OPPORTUNITIES AND THREATS The vibrant and evolving capital markets along with robust and stable economic growth has created a vast pool of opportunities that can be tapped. The company explores these opportunities to increase its area of business on making strategic investments in key sectors of the economy. RISKS AND CONCERNS The company's assets are prone to general risks associated with global and domestic economic conditions, change in Government regulations, tax regimes, other statutes, financial risks and capital market fluctuations in respect of investments held by the company. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The company maintains a system of strict-internal control, including suitable monitoring procedures. Significant issues are brought to the attention of the Audit Committee of the Directors. The internal controls existing in the company are considered to be adequate vis-a-vis the business requirements. HUMAN RESOURCES / INDUSTRIAL RELATIONS As the company does not carry out any manufacturing activity, no workmen were employed during the year. EKED DEPOSITS During the year, the company has neither accepted nor invited deposits from the public. DIRECTORS Mr. Vimal Kejriwal, Mr. Ramawtar Gupta and Mr. Ch. V. Jagannadha Rao ceased to be Directors during the year. The Board wishes to acknowledge and record its appreciation for the contributions made by Mr. Kejriwal, Mr. Gupta and Mr. Rao during their tenure as directors of the company. Mr. T. M. Elavia, Mr. Suresh Mathew and Mr. H.N. Singh Rajpoot were appointed as Directors on 6th August 2007. Mr. J. M. Kothary was appointed as a director on 31st January 2008. The term of office of Mr. T. M. Elavia, Mr. Suresh Mathew, Mr. H. N. Singh Rajpoot and Mr. J. M. Kothary expires on the date of the ensuing Annual General Meeting. The company has received notices from members under Section 257 of the Companies Act, 1956 proposing their appointment as directors of the company. In compliance with the Listing Agreement, the brief resume, expertise and details of other directorship, membership in committees of other companies and the shareholding in the company of the aforesaid Directors proposed to be appointed are attached along with the Notice to the ensuing Annual General Meeting. AUDITORS M/s. Dinesh Jain & Co., Chartered Accountants, Mumbai were appointed as the auditors of the company to hold office from the date of conclusion of the Fourth Annual General Meeting till the conclusion of the ensuing Annual General Meeting. The shareholders are requested to re-appoint M/s. Dinesh Jain .& Co., to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting and authorise the Board and Audit Committee to fix their remuneration. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The company has not carried out any manufacturing activities or activities pertaining to exports and. there was no foreign exchange earnings or outgo during the period. As such, the Directors have nothing to report in terms of the provisions of Section 217(l)(e) of the Companies Act, 1956, together with Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 regarding 'Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo. CORPORATE GOVERNANCE As required by the Listing Agreement with the Stock Exchanges, a separate section containing Corporate Governance as approved by the Board of Directors, together with a certificate from the company's auditors confirming the compliance with the requirements of Corporate Governance policies is set out in the annexure forming part of this annual report. DIRECTORS' RESPONSIBILITY STATEMENT As stipulated in Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the company hereby state and confirm that: a) The company's accounts for the financial year ended 31st March 2008 have been prepared according to the applicable Accounting Standards; b) The management has selected such accounting policies and applied them consistently and made judgments arid estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the loss of the company for the year under review; c) Sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company for preventing and detecting fraud and other irregularities; d) The accounts for the financial year ended 31st March 2008 have been prepared on a going concern basis. PARTICULARS OF EMPLOYEES No employee has drawn salary in excess of the limits specified under Section 217(2A) of the Companies Act, 1956 read with the rules made thereunder. ACKNOWLEDGEMENT The Directors acknowledge with gratitude the co-operation and assistance provided by the Company's business associates and shareholders. On behalf of the Board of Directors T.M. Elavia Chairman Mumbai 30th May 2008 |