VIJAYA LEASING LIMITED
ANNUAL REPORT 2004-2005
Your Directors are presenting the 26th Annual Report on the business and
operations of your Company and the Audited Financial Accounts for the
Financial Year ended 31st March 2005.
The financial results of your Company for the period from 1st April, 2004
to 31st March 2005 as compared to the previous Period from 01-04-2003 to
31-03-2004 are as follows:
(Rupees in Lakhs)
Year ended Year ended
Gross Income 18.20 34.47
Profit/Loss before depreciation 7.36 (35.19)
Less: Depreciation 44.74 47.71
Profit/Loss (37.38) (82.90)
Add: Balance B/F from last year 3463.63 342.15
Add: Provisions for:
i) Prudential Norms - -
ii) Diminution in the Value of Investments (3501.01) 3515.05
Less: Transfer from:
i) Provision for Diminution in value of - -
ii) NPA Provision (8.42) 6.09
iii) Lease Balancing Provision 43.22 45.33
Balance Carried to Balance Sheet (3466.21) (3463.63)
Your Company has completely stopped lending operations after the stringent
regulations of Reserve Bank of India in January 1998 for want of financial
resources. Every rupee recovered was utilised for payment of matured
deposits and for administrative expenses. Hence the Company has been
incurring losses year after year.
The NBFC Industry in general and your Company in particular is passing
through very difficult times. Heavy defaults, due to slow down in economy
and stringent provisioning and Income recognition norms have resulted in
the Company ending up with loss for the year ending 31st March, 2005. Hence
the Directors regret that the dividend could not be declared.
Since there is no surplus, the Company could not transfer any sum to
The company having incurred losses in the last Five years the net worth has
The total Debentures outstanding as on 31.03.2005 is 310.91 Lakhs. The
Company has defaulted in redeeming debentures due to severe liquidity
INVESTMENTS AND STOCK-IN-TRADE:
The investment in Government Securities Bank Deposits and in shares stood
at Rs.159.96 Lakhs against Rs.147.11 Lakhs, of previous year.
In view of the RBI Directions, the Company is not accepting fresh deposits
and also not renewing the matured deposits.
As on 31st march 2005. the total deposits with the Company was Rs.22.18
Crores. We have submitted 8 scheme to Hon'ble Company Law Board, Southern
Bench, Chennai to repay the Deposits. in instalments and the CLB has passed
orders on 20.04.2000 to repay in installments within 39 months.
Due to liquidity problem the Company could not fully comply with the
orders. However, the Company has paid Rs. 3.42 Crores from the date of
submission of the scheme to CLB till 31.03.2005. The company is restrained
from making any payments by the Hon'ble High Court of Karnataka in its
order dated 12.09.2003.
Your Company Continues to depreciate 95% of the leased assets during the
There were 37,400 registered NBFC's in 1998 which came down drastically to
679 deposit taking NBFC~s in 2001. All the rest died being unable to cope
with stringent regulations.
All our efforts to diversify or to get new investors to revive the Company
have failed. Now the Company is exerting all its efforts to recover its
receivables and pay back creditors.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings
and outgo as per Section 217(1)(e) of the Companies Act, 1956.
The company has no activities relating to conservation of energy and
technology absorption. The Company had neither foreign exchange earnings
The Board of Directors regret to state that Sri M.S. Krishnappa. Director
and Chairman of the Company expired on 18.04.2005 and the Board placed on
record the appreciation of invaluable services rendered by Sri M.S.
Krishnappa during his tenure.
Sri C.P. Appanna, Director resigned from the Board on 17.05.2005 due to his
old age and illhealth. The Board placed on record the appreciation of
invaluable service rendered by Sri C.P. Appanna during his tenure.
Sri Girish Punja retiring by rotation in the ensuing Annual General Meeting
and being eligible offer himself for reappointment.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 217(2AA) of the Companies Act, 2000 the Directors
(i) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
(ii) Appropriate accounting policies have been selected and applied
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 as on March 31, 2005 and of the loss of the Company for the
(iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with provisions of the Companies
Act, 1956 for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities; and
(iv) The annual accounts have been prepared on a going concern basis.
(v) Corporate Governance:
The Board of Directors consists of more than 50% Non-Executive Directors.
An Audit Committee has been formed consisting of the following members:
1. George Joseph, Chairman - Non-Executive Director
2. Girish Punja, Member - Non-Executive Director
3. A.K. Shetty, Member - Managing Director
The unaudited quarterly results are sent to the Stock Exchanges where the
shares of the Company are listed as per the Clause 41 of the Listing
Agreement, after the approval of the Audit Committee.
PARTICULARS OF EMPLOYEES:
As required by Section 217(2A) of the Companies Act, 1956, none of the
employees working is in receipt of Rs. 12 Lakhs or more per annum or Rs.1
Lakh or more per month as salary and perquisites.
In pursuant of the powers delegated to the Board in the last AGM the Board
of Directors appointed M/s. J. Srinivasan, Chartered Accountants, Bangalore
as statutory auditors for a period of 1 year i.e. upto the conclusion of
this AGM on the same terms and conditions as of last year. The Board of
Directors deem fit to seek the consent of the share holders to appoint
suitable Chartered Accountant as statutory auditors for the audit of
accounts for the financial year ending 31.03.2006 and fix their
Replies to the adverse comments made by the Auditors is given below:
Para (5) of the Auditors Report:
1. Since none of the Directors was appointed afresh and these Directors
were Directors as on the date of the application of section 274(1)(G) of
the Companies Act, 1956 there is no violation of the section 274(1)(G).
Para (7) and (8) of the Auditors' Report:
2. The reconciliation mentioned in the above paras of the Auditors Report
have not been made due to closure of most of the Branches. The Management
does not expect any losses in this front.
Para (9) of the Auditors Report:
3. Most of the borrowal accounts are under Arbitration/Civil suit and a
number of them have been decreed and hence confirmation of balance could
not be obtained. In a few cases the parties are absconding and their
whereabouts are not traceable.
Para (10) of the Auditors' Report:
4. The amount not provided towards interest is negligible.
Para (11) of the Auditors Report:
5. The reduction in the amount of Public Deposits from 01.0.1.04 to
31.03.05 is on account of reconciliation entries passed and not due to any
Para (12) of the Auditors Report:
6. The Shortfall if any in provisioning for NPA as per nouns prescribed by
RBI will be taken care off in future.
RBI and Lord Krishna Bank Ltd., have filed for winding up of the Company in
the High Court of Karnataka. The Hon'ble High Court has in its interim
order dt. 12-09-2003 restrained the Company from making any payments untie
The Board of Directors takes this opportunity to express their appreciation
to the employees at all levels in the Company for their dedicated and
sincere services. The Board of Directors also places on record their thanks
to the Reserve Bank of India for their guidance and Bankers to the Company.
The Board also expresses grateful thanks to valued customer of the Company.
For and on behalf of the Board of Directors
Place: Bangalore A.K. Shetty
Date : 31-08-2005 Chairman & Managing Director