Brabourne Enterprises Ltd merged Directors Report

BRABOURNE ENTERPRISES LIMITED ANNUAL REPORT 2007-2008 DIRECTORS REPORT Your directors present this annual report and audited statement of accounts of the Company for the year ended on March 31, 2008 and also management discussion and analysis thereon. 1. SCHEME OF ARRANGEMENT The Scheme of Arrangement between RPG Life Sciences Ltd. (formerly known as RPG Pharmaceuticals Ltd.), Instant Holdings Ltd. and Instant Trading and Investment Company Ltd. and the Company under sections 391 to 394 read with sections 100 to 103 of the Companies Act, 1956 approved by the members at the court convened meeting held on October 23, 2007 was sanctioned by the Honble Bombay High Court by order passed on December 14, 2007 and has become effective from February 5, 2008 (the Scheme). Pursuant to the Scheme: * the entire pharmaceuticals business of the Company has been sold to RPG Life Sciences Ltd. (formerly RPG Pharmaceuticals Ltd.) with effect from April 2, 2007 on going concern basis along with all assets and liabilities pertaining to the said business, at consideration of Rs. 46 crores. Consequently, the said pharmaceuticals business of the Company vests in and stands transferred to RPG Life Sciences Ltd. (formerly RPG Pharmaceuticals Ltd.) from April 2, 2007 being appointed date fixed under the Scheme. * the investments held by the Company have been sold to Instant Holdings Ltd. with effect from April 1, 2007, at consideration of Rs. 53 crores. Consequently, various investments held by the Company vests in and stands transferred to Instant Holdings Ltd. from April 1, 2007 being appointed date fixed under the Scheme. Instant Trading and Investment Company Ltd., the subsidiary of the Company, has been merged with Instant Holdings Ltd. and thus stands dissolved. * RPG Life Sciences Ltd. (formerly RPG Pharmaceuticals Ltd.) has discharged the consideration by issue of fully paid up equity shares of face value of Rs. 8 in the ratio of 1:1 at aggregate premium of Rs. 34,50,49,200 to those members of the Company whose names appeared in the register of members/who were beneficial holders of the companys shares on February 22, 2008, being record date fixed for the purpose. 1,43,68,850 equity shares so issued by RPG Life Sciences Ltd. (formerly RPG Pharmaceuticals Ltd.) have been listed and admitted for trading by Bombay Stock Exchange and National Stock Exchange w.e.f June, 10, 2008. * Instant Holdings Ltd, has discharged the consideration by issue of fully paid up 99,50,000 equity shares of face value of Rs. 10 to the Company at aggregate premium of Rs. 43.05 crores. Consequent to issue of these shares to the Company, Instant Holdings Ltd. has become subsidiary of the Company. * the Company has changed its name from RPG Life Sciences Limited to Brabourne Enterprises Limited upon fresh certificate of incorporation consequent upon change of name dated February 8, 2008 issued by the Registrar of Companies. 2. FINANCIAL RESULTS (Rs. in crores) Total Income - Expenses 0.09 Exceptional Item 27.16 Loss for the year before tax from continuing operations 0.09 Loss for the year before tax from discontinuing operations 27.16 Less: Reversal of Deferred Tax Assets 2.97 Loss for the year after tax from discontinuing operations 30.13 Loss for the year after tax 30.22 In view of sale of the Pharmaceuticals business and investments under the Scheme of Arrangement, the Company did not have any income during the year under review. The amount of net loss from discontinuing operations has been adjusted against the share premium account pursuant to provisions of the Scheme of Arrangement. The profit and loss account has balance of Rs. 1.41 crores consequent to transfer of Rs. 1.50 crores from debenture redemption reserve account. 3. DIVIDEND In view of losses during the year, the directors do not recommend any dividend for the year under review. L. RESPONSIBILITY STATEMENT The directors confirm: (i) That in the preparation of the annual accounts for the year under review, the applicable accounting standards have been followed and that no material departures have been made from the same; (ii) That they have selected appropriate accounting policies and applied them consistently and made judgments 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 March 31, 2008 and of loss for the year ended on that date; (iii) That they have taken proper and sufficient care for 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; and (iv) That they have prepared the annual accounts for the year ended on March 31, 2008 on a going concern basis. 5. CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO In view of sale of the pharmaceuticals business with effect from April 2, 2007. the Company did not have any activity during the year ended on March 31, 2008. Consequently. there is no information to furnish as required under section 217(1)(e) of the Companies Act, 1956. read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988. 6. PARTICULARS OF EMPLOYEES During the year, none of the employee of the Company was in receipt of remuneration prescribed for disclosure under section 217(2A) of the Companies Act, 1956. 7. PUBLIC DEPOSITS The public deposits held by the Company have been transferred to RPG Life Sciences Limited (formerly RPG Pharmaceuticals Ltd.) pursuant to the Scheme. Thus, there are no public deposits held by the Company. 8. SUBSIDIARY COMPANY During the year under review. Instant Holdings Ltd. has become subsidiary of the Company. However, the accounts as of March 31, 2008 and the report of the directors and auditors of Instant Holdings Limited are not attached pursuant to exemption granted by the Central Government. The members are informed that annual accounts of the said subsidiary and the related detailed information will be made available on request. The accounts of the said subsidiary for the period ended on March 31, 2008 are also open for inspection to the members at the registered office of the Company. 9. DIRECTORS Subsequent to the year under review, Mr. H.V. Goenka, Mr. C.L. Jain, Mr. Ajit Gulabchand, Mr. Niraj Bajaj, Mr. Manoj Maheshwari, Dr. Lalit S. Kanodia, Mr. Mahesh S. Gupta, Mr. P.K. Mohapatra, Mr. Dilip Sen and Mr. Arvind Vasudeva have ceased to be directors consequent to their resignation from the board of the Company. Mr. P.Sampath, Mr. Suresh Mathew, Mr. H.N. Singh Rajpoot, Mr. J.P. Mehrotra and Mr. T.M. Elavia have been appointed as directors in casual vacancy caused by resignation of Mr. Dilip Sen, Mr. Ajit Gulabchand, Mr. Mahesh S. Gupta, Mr. Niraj Bajaj and Mr. Arvind Vasudeva respectively. Mr. P. Sampath, Mr. Suresh Mathew and Mr. H. N. Singh Rajpoot hold office of director until conclusion of ensuing annual general meeting. A notice has been received under section 257 of the Companies Act, 1956 from members of the Company along with requisite deposit for appointment of Mr. Suresh Mathew and Mr. H.N.Singh Rajpoot to the office of director of the Company. The resolutions for their appointment as director of the Company at the ensuing annual general meeting, are being placed before the members for approval. None of the directors of the Company is related to any other director of the Company. 10. AUDITORS Ray & Ray, auditors of the Company, hold office until the conclusion of the ensuing annual general meeting. Ray & Ray have expressed their willingness and confirmed their eligibility for re-appointment as auditors of the Company. 11. AUDITORS REPORT As regards auditors comments vide paragraph 2 and 12 of annexure to their report, your directors have to inform you that (i) the assets given on lease could not be physically verified due to certain dispute with the lessee; and (ii) prior to the Scheme of Arrangement, the Company had internal audit system commensurate with the size and nature of the business. However, post Scheme of Arrangement, the Company is in the process of redesigning internal audit system and has also appointed a firm of Chartered Accountants as internal auditor to assist the Company in this area. 12. CORPORATE GOVERNANCE A certificate from practising company secretary on compliance of conditions of corporate governance is annexed to this report. The management discussion and analysis report and compliance report on corporate governance as required by clause 49 of the listing agreement form part of this annual report. 13. RISKS AND CONCERN In view of absence of business activity at present, there are no specific risks perceived by the Company. The recent spurt in inflation and fall in capital market remains a cause of concern. 14. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an adequate system of internal controls. The internal control system provide for clearly spelt out policy guidelines and approval procedures. To supplement internal controls, the Company has also appointed a firm of Chartered Accountants as internal auditors to carry out audits and report thereon to the audit committee. 15. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES All employees in service of the Company on February 5, 2008 have become employees of RPG Life Sciences Ltd. (formerly RPG Pharmaceuticals Ltd.) without any break in their service and on the terms and conditions not less favourable than those applicable whilst in service of the Company. For and on behalf of Board of Directors P. Sampath Chairman Place: Mumbai Date : June 30, 2008