To the Members The Directors present the Twentieth Annual Report of the Company along with Audited Accounts for the year ended March 31, 2008. Dividend In the absence of profit, the Directors are unable to recommend any dividend for the financial year ended 31st March 2008. Operations Having regard to the fact that the company lost its "going concern" status since a long time and that a conscious decision was taken to stop business operations, its major activities revolved round the expeditious realisation of the assets /receivables created and deconstruction of the liabilities/provision contracted / made in the past and discharging its maintenance function at low cost. As a result income generated by the company mostly represented the interest earned on realised funds temporarily parked with the Bank as fixed deposits and expenses covered the truncated needs of overheads, wages etc. There is, therefore, no performance indicator to highlight or to make any normal inter temporal comparison of the company's working results and other parameters from year to year. However, the net loss of the company increased during the year from Rs4.67crores in the last year to Rs18.25crores, as the earnings on realisations from receivables was not as huge as it was in the previous year. The total income for the year ended 31st March 2008 was Rs101.98 lacs. The Company paid off a sum of Rs.5.53 crores to State Bank of India as a portion of its current interest dues on loans taken from them. A look at the individual items of the profit and loss account of the company from year to year would also generally reveal a steady downward trend indicating that the company's control over administrative expenses had been quite strict. It would also be worth mentioning that with a view to taking the benefit of the provisions contained in Section 41 (5) read with Section 72 of the Income Tax Act, 1961, at the advice of the Company's tax consultants, the item of "Special Reserve" for Rs. 276.25crores was set off against the brought forward business loss of the Assessment year 2000-01 with the consequences that the brought forward loss in'.profit and loss account was correspondingly reduced in the current year. Relocation of the Registered office of the Company The company's Registered Office was shifted with the approval of the Board from Jeevan Deep Building, 4th Floor, 1, Middleton Street, Kolkata - 700 071 with effect from 2nd July 2007 to 4th Floor, SBI Ballygunge Branch Premises, 50A, Gariahat Road, Kolkata 700 019, as the space offered by the State Bank of India was urgently required by them for their own purpose. The new space, which was warehoused by the Bank has also been allowed to be used by The Company free of rent. The change of address which was appropriately notified through newspaper for public information was also advised suitably to the Registrar of Companies, West Bengal, the Stock Exchanges, National Housing Bank (NHB) etc. Net Worth of the Company The Company lost its status, as a going concern in the year 2003-04 and there has been no change in the position since then. The net worth of the Company stands fully eroded and it is negative at Rs29456.10 lacs as at 31st March 2008. Public Deposits The Company during the year under review did not accept any deposit from the public within the meaning of section 58A of the Companies Act, 1956 or the rules made thereunder/The Company's liabilities on account of unclaimed public deposits including unencashed Refund/Interest warrants stood at Rs. 305.24 lacs during the current year (reduced from Rs. 321.08lakhs in the last year). The amount had been fully funded. Credit Rating Since the Public Deposits Scheme stood discontinued, credit rating thereof was not required. . Various legal issues (i) Though the Company settled all issues relating to the payment of pension of its employees with the Regional Provident Fund Commissioner (RPFC) on the basis of an order passed by the Hon'ble Calcutta High Court .during the last year the former filed a stay application against the same order and the decision thereon is still pending. The company feels that no liability is likely to devolve on it on this score. (ii) Following the inspection of the company's books by the Department of Companies Affairs under Section 209A of the Complaint Act 1956 the Company and its Directors received show-cause notices for violation of provisions under section 628 read with section 211, 217(3), Section 301/299,etc. The Directors filed petitions/suits under section 633 of the Companies Act 1956, and the Calcutta High Court in term of an order, exonerated the concerned Directors in almost all the cases. (iii) The cases filed by the Law Enforcing Agencies viz., Police & CBI in regard to the frauds to the extent of Rs3.90crores which took place during the earlier years are in the various stages of evidence. New Development (i) The company's Patna property was offered for sale on completion of all connected formalities in this behalf and the State Bank of India was found to be the only intending buyer. However, State Bank of India required that the original "Agreement for Sale" executed at the time of acquiring the property to be converted into registered sale deed before transferring the same to them. When the company approached the Registrar it came to light that Income Tax authorities had clamped a general attachment order on all properties belonging to the original seller notwithstanding that "Agreement for Sate" was subsisting at the material time. However, with the cooperation of the seller and with the active assistance of SBI Patna local office, the company has been advised tfiat the attachment order has been vacated and arrangements are in hand to effect transfer and registration of the property soon. (ii) The company received a legal notice from its only secured creditor viz., State Bank of India demanding full payment of their dues to the latter aggregating Rs. 316.38 crores including interest upto 31.03.2008. The company sent a suitable reply stating its inability to make refund of the entire ampunt because of its severe financial distress. However, a payment of Rs. 7.00 crores on account of interest dues has since been made in response to the aforesaid notice. Corporate Governance The report on Corporate Governance as required under clause 49 of the Listing Agreement with Stock Exchanges together with a Certificate from the Company's Auditors confirming compliance is set out as a part of this Annual Report. Management Discussion & Analysis Report As per the requirement of the Listing Agreement with Stock Exchanges, a separate report on Management Discussion & Analysis for the year under review is attached to this report. Directors During the year, Shri P.K.Bhattacharjee, Chairman & Director who retired on 18th April,2008 was re-appointed on 19th April,2008 as nominated by State Bank of India. Shri Ashok Mukand, nominee Director of SBI consequent upon his transfer on promotion, resigned from the Board on the 16th January 2008 and in his stead Shri Jayanta Kumar Sinha Chief General Manager, State Bank of India, Kolkata LHO, was nominated by SBI as Director from 17th January 2008. The Board places on record its appreciation for the valuable services rendered by Shri Mukand during his tenure as Director of the Company. Shri M. K. Ray Chaudhuri who retired by rotation on the date of the last AGM held on 6th June 2007 was reappointed as Director on the Board from the same date. Shri K. Rama Mohan Rao Managing Director retired from the Board on 18th December 2007 on his being repatriated to his parent Organisation i.e., State Bank of India and Shri G.I.Mondal on deputation from State Bank of India has been appointed in his stead as Managing Director from 19th December 2007. The Board placed its appreciation for the valuable service rendered by Shri Rao as Managing Director of the Company. None of the Directors (both Executive and Non-Executive) are holding any shares (both own or held by / for other persons on beneficial basis) in the Company. Except the above, there has been no change in the composition of the Board of Directors of the Company since the last report of the Directors on 7th May 2007. The Directors of the Company are persons of eminence having vast and varied experience in the field of Banking, Finance and other allied areas. The Board confirms that none of the Directors of the Company is disqualified from being appointed as Director in terms of section 274 (1) (g) of the Companies Act, 1956 and necessary declaration in this regard has been obtained from them. Listing Particulars The Company's shares are listed on the Stock Exchanges at Kolkata, Mumbai and at National Stock Exchange of India Limited, Mumbai. The annual Listing fees in respect of all the Stock Exchanges have been paid upto date. The trading of shares continues to stand suspended by the Stock Exchanges. As continuation of listing of the shares with the above Stock Exchanges yields no benefits either to the investors or to the Company, the Directors intend delisting of the shares from these Stock Exchanges, for which a suitable Resolution has been proposed for the Members' approval. Directors' Responsibility Statement Pursuant to Section 217 (2AA) of the Companies Act, 1956 Directors to the best of their knowledge and belief confirm that: (i) in the preparation of the Annual Accounts for the financial year ended 31 st March, 2008, all the applicable accounting standards prescribed by the Institute of Chartered Accountants of India have been followed along with proper explanation relating to material departures, if any. (ii) the Directors have adopted such accounting policies and have applied them consistently and have made judgements and 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 that period. (iii) the Directors have taken proper and sufficient care of the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. (iv) the Directors have prepared the accounts'for the financial year ended 31 st March, 2008 on the basis of the fact that the Company is no longer a going concern, as the operations of the Company were discontinued in the year 2003-2004. Investor Services Company has an Investor Grievance Committee to specially look into the redress of investor grievances and the queries are dealt with expeditiously. The Company continues to be a client of National Securities Depository Limited and Central Depository Services (India) Limited and the ISIN no. allotted to the Company's shares is INE627A01012. Future Outlook It is very unlikely that the Company in its present form, would be able to rehabilitate itself in the near future. With the snowballing of the losses from year to year and the total erosion of its net worth, |