| Dear members,
The Directors have pleasure in placing before you the Annual Report
and Audited Statement of Accounts for the financial year ended on 31st
March, 2014
FINANCIAL RESULTS: (Amount in Rs)
Particulars 2013-14 2012-13
Revenue from Operations 140000.00 835000.00
Other Income 1321852.00 3934588.00
Total Expenditure 4158587.00 5567467.00
Profit/(Loss) before Tax (2696735.00) (797879.00)
Exceptional Items 111.00 50837.00
Tax Expenses (100104.00) (1328273.00)
Profit/(Loss) After Tax (2596520.00) (581231.00)
OPERATIONS:
During the year under review, the Company has reported total income of
Rs. 14.62 lacs against the total income of Rs. 47.70 lacs during the
previous year. Hence, the Company has reduced its total income in the
financial year under review compared to previous financial year. The
Company has incurred loss of Rs.25.97 Lacs during the year under
review as against Net Profit Rs. 5.81 lacs during the previous year.
DIVIDEND:
Due to Losses of the Company, Your Directors do not recommended any
dividend on Equity Shares of the Company. FIXED DEPOSITS:
The Company has not accepted/renewed any public deposits during the
year under review.
STATUS OF SICKNESS WITH BIFR/AAIFR:
The members are aware that the Company had applied to Hon'ble Board
for Industrial and Financial Reconstruction (BIFR) to declare the
Company as a sick unit and at present Company's application is pending
with Appellate Authorities for Industrial and Financial Reconstruction
(AAIFR), New Delhi. Final Decision of the Application is still pending
as on date of this report with the said authority. The Management of
the Company is very much hopeful for favorable decision.
CORPORATE GOVERNANCE REPORT:
Pursuant to clause 49 of the Standard Listing Agreement Report on
Corporate Governance is enclosed herewith as a part of Directors'
Report for the year under review.
DIRECTORS:
Mr. Harshad B Vaghela retires by rotation at the ensuing Annual
General Meeting and being eligible, offer himself for reappointment.
Pursuant to provisions of Sections 149, 150, 152 and other applicable
provisions of the Companies Act, 2013 and Rules made thereunder, your
Directors are seeking appointment of Mr. Rajesh Dhansukhlal Girishas
and Mr. Harin Kanchan Shah as an Independent Directors of the Company
for five consecutive years upto 31st March, 2019. Details of Directors
being appointed/re-appointed are given in the Explanatory Statement to
the Notice convening the Annual General Meeting. The Board of
Directors recommends their appointment/re-appointment for the approval
of the shareholders at the ensuing Annual General Meeting.
AUDITORS:
M/s. Gattani & Associates, Chartered Accountants, Ahmedabad, the
Auditors of the Company, retire at the ensuing Annual General Meeting
and being eligible, offer themselves for re-appointment (Subject to
ratification at every Annual General Meeting). The Auditors have
furnished a certificate to the effect that, if reappointed, their
appointment shall be within the limits prescribed under the Companies
Act, 2013.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under section 217(2AA) of the Companies
Act, 1956, with respect to Directors' Responsibility Statement, it is
hereby confirmed that:
(i) in the preparation of the annual accounts, the applicable
accounting standards have been followed;
(ii) the Directors have selected such accounting policies and applied
them consistently and 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 at March 31, 2014 and of the loss of the
Company for that period;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for the safeguarding the assets
of the Company and for preventing and detecting fraud and other
irregularities; and
(iv) the Directors have prepared the annual accounts of the Company on
a 'going concern' basis.
COMMENT ON AUDITORS REPORT
Company has not complied with the following Accounting Standards:
i. Non- provision for depletion in value of Investments of Rs 64.99
lacs (PY Rs 64.99 lacs), held in the companies whose net worth has
eroded, in terms of requirement of AS 13. In view of this loss for the
year is understated and investments are overstated by that amount
(refer note 13A).
ii. No provision being made for Retirement benefits payable to
employees including Gratuity and leave encashment in terms of
requirement of AS 15 resulting into overstatement of profit for the
year and understatement of current liabilities to that extent. In view
of non-availability of the relevant information, quantification of
impact thereof could not be ascertained (refer note 2.XI).
iii. The company has neither identified nor provided for loss on
impairment of assets as per the requirement of AS 28, resulting into
overstatement of fixed assets and understatement of profit for the
year. However due to non availability of required information, impact
of same could not be quantified (refer note 2.IV).
Further Company has not complied with the following:
Note 5.I.b, regarding the balances of Secured loans being subject to
confirmation and reconciliation. In view of the non-availability of
the relevant information, consequential impact thereof, on the state
of affairs of the company remains to be ascertained,
Note 5.II.b, regarding the balances stated under unsecured loans being
subject to confirmation and reconciliation. In view of the
non-availability of the relevant information, consequential impact
thereof, on the state of affairs of the company remains to be
ascertained,
Note 6 & 9, regarding various long term liabilities to refund booking
advances paid by members who cancelled their bookings as well as those
in the nature of payable in respect of supplies, expenses being
subject to confirmation and reconciliation. In view of the
non-availability of the relevant information, consequential impact
thereof, on the state of affairs of the company remains to be
ascertained,
Note 14, regarding non provision of doubtful advances and deposits out
of long outstanding advances and deposits of Rs 620.24 lacs (PY Rs
620.52 lacs). However in view of non-availability of complete
information in that respect, we are neither able to express our
opinion on realisability thereof nor able to quantify its impact on
the affairs of the company,
Note 15.a, regarding non-provision for doubtful debts out of long
outstanding debtors of Rs 57.87 lacs (PY 54.21 lacs), in respect of
the projects already completed. However in view of non-availability of
complete information in that respect, we are neither able to express
our opinion on realisability thereof nor able to quantify its impact
on the affairs of the company,
Note 15.b, regarding non-provision of Rs.6.50 lacs (PY Rs 6.50 lacs)
out of Cash balance looted in the year 199596 and not recovered so
far, due to which profit for the year and other non- current assets
both are overstated by that amount,
Note 25, regarding non provision of certain liabilities in the
accounts. In view of the non-availability of the relevant information,
consequential impact thereof, on the state of affairs of the company
remains to be ascertained, Note 25, regarding financial as well as
other impact on the state of affairs of the company due to delayed/
defective execution of contractual assignment as well as consequences
of delayed payment of statutory dues and those to Secured lenders. In
view of the non-availability of the relevant information,
consequential impact thereof, on the state of affairs of the company
remains to be ascertained.
REPLY OF COMMENT ON AUDITORS REPORT:
Answer to (i): The management is hopeful of recovery from losses in
its investments.
Answer to (ii): The Company is a SICK UNIT and Major staff is
retrenched. Management proposes to meet the liability as and when it
arises. Liabilities likely to arise in future shall not be
substantial.
Answer to (iii): The Company's operation was totally suspended from
Stock Exchange due to Impact in case of some of the assets shall be
set off against positive impact. In case of others net liability shall
not be substantial. Further:
Answer to (Note 5.I.b): The Company is not working since last few
years however referring to the secured loan acquired by the company
from G.S.F.C, since the loan account of the company with the aforesaid
institution has been classified as NPA account the management is
unable to get the confirmation for the same. The management has given
the aforesaid institution a proposal for settling the same and is
hopeful that the same shall be resolved at earliest.
Answer to (Note 5.II.b) The Company have been in process to the
respective unsecured loans. The management is hopeful of
resolving/settling the same at earliest.
Answer to Note 6 & 9: Due recession in the real estate market the
company suffered a major setback in its core business and as a result
suffered from a severe liquidity crisis owing to which the company has
been unable to launch any new projects or refund the aforesaid booking
advances paid by members as well as amounts payable in respect of
various supplies, expenses. The management is hopeful of resolving the
same at earliest.
Answer to Note 14: The Company under contracts entered into by the
company with the Delhi Development Authority (DDA) and the Central
Government Employee Housing Welfare Organization (CGEWHO). As issues
have been raised by both the institutions regarding the payables to
the company the matters pertaining to both are under arbitration in
the court of law. Hence the management shall be unable to ascertain
the realisability until the outcome of the arbitration in the
respective court of law.
Answer to Note 15.a: Recovery from the members is due and steps have
been initiated by the management for the same. Recoveries have already
started flowing in and the management is hopeful of clearing the same
at earliest.
Answer to Note 15.b: The management would like to state that in case
of the aforesaid that the Company had appealed before the Hon'ble ITAT
'A' Bench, Ahmedabad comprising of Justice H.L. Karwa, J.M. and A. N.
Pahuja, A.M. and accordingly the tribunal has decreed order on 16th
March 2009 in favor of the assessee i.e. Labh Construction and
Industries Ltd. and upon the tribunal's direction the learned
Assistant Commissioner of Income Tax, OSD(1), Range-4, Ahmedabad has
quashed the income assessed u/s. 158BD rws. 158BC dated 31/05/2005.
Answer to Note 25: As the company had been classified as sick unit by
the Hon'ble BIFR, the company has been protected from the aforesaid
liabilities. However these liabilities are contingent upon the outcome
of the litigations pending with the respective courts of law.
PARTICULARS OF EMPLOYEES:
None of the employees is drawing remuneration which is more than the
specified limit prescribed u/s. 217(2A) of the Companies Act, 1956
read with Companies (Particulars of Employees) Rules, 1975. Hence, the
information in terms of Section 217(2A) of the Companies Act, 1956
read with Companies (Particulars of Employees) Rules, 1975 are not
required to be given.
INSURANCE:
All fixed assets and movable assets of the Company are adequately
insured.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO:
1) Conservation of Energy and Technology Absorption :NA
The year under review, there are no manufacturing activities
undertaken by the Company. The main activity of the Company is land
development and construction activities and it is of such a nature
that, it requires minimum energy. In view of the aforesaid fact, there
was no scope for your Company to make any efforts for energy
conservation, research and development and technology absorption.
Hence the particulars required to be furnished in respect of the same
are not given.
2) Foreign Exchange Earnings: NIL Foreign Exchange Outgo : NIL
ACKNOWLEDGMENT:
Your Directors wish to place on record their deep sense of
appreciation for the commitment displayed by all the employees of the
Company resulting in successful performance during the year under
review. Your Directors also take this opportunity to place on record
the co-operation, assistance and continued support extended by the
Banks, Government Authorities, Vendors and Shareholders during the
year under review.
On behalf of the Board of Directors
For Labh Construction & Industries Ltd
Jayprakash J. Magtani
Place : Ahmedabad Managing Director
Date : 13/08/2014 DIN: 01639309
Reg. Off:
Shantanu, 104,
Sardar Patel Nagar,
Ellisbridge, Ahmedabad 380 006 |