The Directors present the Company's Seventeenth Annual Report and the
Audited Accounts for the year ended March 31, 2000.
The financial result for the year under report are as under :
Rs. in Lakhs
Gross Income 1191.15
Gross Profit/(Loss) (187.04)
Add : Depreciation 730.28
Add : Miscellaneous & Preliminary Expenses Written off 5.75
Profit/(Loss) before tax (923.07)
Provision for tax 0.00
Profit/(Loss) after Tax (923.07)
Add : Surplus / (Deficit) of previous year (5452.11)
Add : Prior period / other adjustments 0.00
Surplus / (Deficit) carried to Balance Sheet (6375.19)
Major Industries like Engineering, Textiles, Cement and Steel to which
the company has exposure did not show any signs of revival and thus
recoveries from the said sectors continued to be sluggish. The real
estate market in Bangalore. Mysore and Goa also did not show any signs
of revival. In the meantime, due to negative sentiments against the
NBFCs pressure on repayment of deposits continued to buildup thus
stretching tight liquidity conditions faced by the company resulting in
default in repayment of deposits by the company.
As a result, the Reserve Bank of India (RBI) during August, 199
prohibited the company from acceptance of public deposits. Further,
the RBI vide letter dated August 13, 1999 directed the company not to
sell, transfer, create charge or mortgage or deal in any manner with
its properties and assets without prior permission of the RBI. The
said directions have been extended until further orders by RBI vide
letter dated August 12, 2000.
The RBI in September, 1999, rejected the Company's Application for
registration as a Non-Banking Financial Institution. The Company has
however appealed to the Central Government, having been aggrieved by
the order of rejection by the RBI. The appeal has been admitted and is
pending disposal. In the meantime, the company has not been able to
carry on its normal business activities of Lease / Hire Purchase etc.
during the year.
Further the RBI has appointed a Special Officer with effect from
September 1, 1999 for the purpose of overseeing the activities of the
Company, ensuring compliance with the statutory requirements and also
to prevent the affairs of the Company from deteriorating further.
Consequent to the rejection of the application for registration and the
prohibition imposed on acceptance of public deposits, RBI filed a
petition in the High Court of Karnataka seeking winding up of the
Company. The Hon'ble High Court of Karnataka has however, stayed the
Windingup Petition filed by the RBI.
In order to make repayment of deposits, the company filed a Scheme for
reschedulement of deposits, in response to the applications filed by
the Depositories with the Company Law Board (CLB) Southern Bench,
Chennai. The Hon'ble Southern Regional Bench of the Company Law Board,
Chennai passed an order during March 2000 relating to the scheme of
repayment to the depositories. The Company after having considered
various aspects of the Order of the CLB, filed an application seeking
clarification/modification to the orders in respect of rate of interest,
repayment period and such other matters. The CLB however, returned the
application of the company saying that CLB had no inherent powers for
review of its own order. In view of this, the company field an appeal
in the High Court of Karnataka seeking revision/modification of the CLB
Order, with regard to rate of interest, period of repayment, etc. which
has been admitted and the matter is likely to be listed for final
In the meantime, Bank of India and other Members of the Consortium of
Banks, filed an petition, before the Hon'ble High Court of Judicature
at Chennai seeking stay of the Order passed by the Southern Regional
Bench, Company Law Board, Chennai. The High Court of Judicature at
Chennai has dismissed the said petition as not maintenance.
Simultaneously, an appeal was also filed in the High Court of
Karnataka, by the United Western Bank Ltd (Consortium Member) seeking
stay of the CLB Order. The Hon'ble High Court of Karnataka has, since,
stayed the CLB Order. The matter however is likely to be listed for
The Consortium of Banks have also filed an application before the Debt
Recovery Tribunal seeking repayment of their dues.
Certain aggrieved depositors have also sought remedy under the Consumer
Protection Act in respect of non-repayment of deposits.
Despite the adverse conditions as stated above and the difficult
financial conditions, the company has commenced revival efforts.
During the year recoveries from the Property Development division out
of projects at Bangalore, Mysore and Goa amounted to Rs. 1.90 crores.
The properties worth about Rs. 1 crore have been completed based on
agreements with Civil Contractors keeping deployment of funds to the
minimum. 72 flats amounting to about 1,00,000 sq.ft has been completed
and handed over.
In view of the restriction on the company as to carrying on of business
activities, a proposal ha been made for completion of the incomplete
projects on joint venture basis subject to the approval of RBI. This
would enable the company to complete the projects while releasing cash
flows for repayment of deposits. In response, the RBI has informed the
company, that permission of the High Court of Karnataka be sought for
implementation of the proposal and sale of the estate projects in
During the financial year the company has been successful in achieving
recoveries of about Rs. 15 crores form corporates who have availed
Lease, Hire Purchase and other facilities.
The Directors recognise that while effective recovery of NPAs is
important, commencing new activity which will improve the overall cash
flows of the company is very crucial. Accordingly, consequent to the
amendments of the main objects of the company steps have also been
initiated for entry into I.T. enabled services. An MOU has been
entered into with an overseas company for development of the Company's
Property at Pune into an Intelligent I.T. Centre. The company is also
examining proposals both for trading and development of software.
Arrangements are also being finalised with leading mutual funds and
finance companies for distribution of their financial products like
bonds, mutual fund units, Auto and home Loans etc. The commencement of
the new activity is subject to the approval of the Reserve Bank of
During the year Public Deposits to the tune of Rs. 830.72 lakhs were
repaid and outstanding liabilities stood at Rs. 9755.15 lakhs as of 31st
March, 2000. The repayment of deposits shall be subject to the order
passed b y the Company Law Board, Chennai which has been stayed by the
High Court of Karnataka on a petition filed by the United Western Bank
In view of the losses for the year under report, the Directors do not
recommend any dividend on the Equity Share Capital.
In view of the operating losses, no dividends are recommended on the
Redeemable Cumulative Preference Shares for the year ended March 31,
2000. The dividends, however, stand accumulated.
Sri. Manohar Singh Rathore retires by rotation and being eligible
offers himself for re-appointment.
Pursuant to Section 212 of the Companies Act, 1956, the Annual Accounts
of Kirloskar Developers and Builders Limited, Bangalore for the year
ended March 31, 2000 is attached.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The details relating to conservation of energy, etc. are set out in the
Annexure forming a part of this report pursuant to Section 217 (1)(e)
of the Companies Act, 1956.
PARTICULARS OF EMPLOYEES
Particulars of Employees in terms of the requirement of Section 217(2A)
of the Companies Act, 1956, are set out in the Annexure forming part of
M/s. Pipara & Co., Chartered Accountants, Ahmedabad retire and are
eligible for re-appointment. A certificate has been furnished by them
to the effect that their appointment, if made, would be within the
limits prescribed under Section 224 (1-B) of the Companies Act, 1956.
Securities and Exchange Board of India has brought the trading of the
Company's shares under Compulsory Dematerialised Trading by all
investors with effect from 8.5.2000 obligating shareholders to exercise
demat option to derive the benefits of scripless trading.
DISCLOSURE UNDER CLAUSE 49 OF LISTING AGREEMENT
Information as required under Clause 49 of the Listing Agreement is set
out hereunder :
1. The Company's securities have not been de-listed by any of the Stock
Exchanges during the year.
2. The securities of the Company are presently listed with the
following Stock Exchanges :
A. THE BANGALORE STOCK EXCHANGE LTD
Stock Exchange Towers
51, 1st Cross, J C Road
Bangalore - 560 027
b. THE STOCK EXCHANGE, MUMBAI
Phiroze Jeejeebhoy Towers,
Mumbai - 400 001
3. The Company has paid the annual listing fees to each of the above
Information as per Section 217 (1)(e) of the Companies Act, 1956 read
with the Companies (Disclosure of Particulars in the report of the
Board of Directors) Rules 1988 of the year ended 31st March, 2000.
A. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
The Company has no activities relating to Conservation of Energy or
B. FOREIGN EXCHANGE EARNINGS AND OUTGO - NIL