HARBOR NETWORK SYSTEMS LIMITED
ANNUAL REPORT 2003-2004
Your Directors present their Twelfth Annual Report and the audited accounts
for the period ended 31st March 2004.
OPERATION & OUTLOOK
Financial Highlight for the year
(Rs.in lakhs) (Rs.in.lakhs)
Sales nil 07.29
Increase/decrease in stock nil (6.44)
Other income 0.03 -
Total income 0.03 0.85
Expenses 15.54 51.23
Interest 0.52 0.34
Depreciation 0.07 0.85
Misc. expenses 2.66 2.74
LOSS FOR THE YEAR 18.76 54.35
PRIOR PERIOD 0.85 0.03
BALANCE BROUGHT 165.71 111.38
BALANCE CARRIED 185.32 165.71
FORWARD TO BALANCE SHEET
During the year also due to the severe recessionary trend in the economy
the company's activities could not progress satisfactorily. The company had
been looking for new avenues for Profitable ventures for the survival of
the company due to setbacks, in the previous business undertaken in the
hardware sector. Towards this end the company took steps to venture into
activities in the power sector. The company has been successful in
developing its two new products, i.e. RF-AMR (Radio Frequency Automatic
Meter Reader) and ESS (Energy Saving Streetlights). The products are in the
demonstration stage. The company is also in discussions with various
international companies for bringing new technologies in the field of solar
Thermal power generation to India. It is hoped that with the huge potential
in the energy sector and the encouragement given to the power sector by the
Government of India the company will be able to take advantage of the
opportunities and turnaround the company in the near future.
The directors do not recommend any dividend during the year.
PARTICULARS OF EMPLOYEES
During the year there were no employees drawing remuneration attracting the
provisions of section 217 (2A) of the Companies Act 1956.
The company had not accepted any fixed deposits attracting the provisions
of section 58A of the Companies Act 1956.
Ms. Kshemankari Nadgir retires by rotation and being eligible offers
herself for reappointment
M/s. Mehta & Parmar Chartered Accountants, the Company's Auditors retire at
the conclusion of the ensuing Annual General Meeting and being eligible for
re-appointment offer themselves for reappointment.
ENERGY CONSERVATION. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE & OUTGO
As the energy consumption was minimal no separate details of the energy
consumption is provided in the report. The company had accorded top most
priority in conserving the energy wherever possible. The company had not
adopted any foreign technology during the year. The company had not spent
any foreign exchange during the year.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors State that :-
1. In preparation of the Annual Accounts, the application of Accounting
Standards had been followed along with proper explanation relating to
2. That they had selected such accounting standards, 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 the financial year and of the profit and loss of the
company for that period.
3. That they had taken proper and sufficient care for the maintenance of
adequate accounting records, in accordance with the provisions of the
relevant acts for safeguarding the assets of the company and for preventing
and detecting fraud and other irregularities.
4. That they had prepared the Annual Accounts on a going concern basis.
In terms of the requirements of the Stock Exchange the company has
constituted the audit committee, shareholders grievance committee, and
It is pertinent to point out that as the company is not a profit-making
one, only one independent director was willing to get associated with the
company. Hence the constitution of the various committees are done with the
directors in the board of directors. Similarly the constitution of the
board of directors could not meet the requirement of the Corporate
Governance because of the reasons explained above.
COMMENTS ON OBSERVATION MADE BY THE AUDITORS
The various observations made by the auditors are explained in the notes to
the accounts of the company. However the following are some of our
explanations in general to the points raised by the auditors.
Regarding the non provision of the diminution of the value of investment of
Goldhammer Securities Limited, since the said Goldhammer Securities Limited
has applied for striking off the name of the company under section 560 of
the Companies Act 1956 and the said company has not received any intimation
from the Registrar Of Companies, Maharashtra to their application the said
amount has not been written of till now. As soon as any intimation is
received by the company from the said Goldhammer Securities Limited the
company would take necessary action to write off the said investment.
Regarding the non provision of interest of Rs.24,96,960/- from Punjab &
Surd Bank (PSB) and from Priya Ltd. The above mentioned parties have filed
the suit against the company. As the amount due is disputed no provision
has been made. PSB had filed suit against the Company in the Debts Recovery
Tribunal, which passed order in favour of the Company by dismissing the
Bank's suit on merits. The Bank has appealed the DRT's order and the matter
is sub judice.
In respect of item no 14 of the Annexure to the audit report, there have
been delays in the payment of the statutory dues. This has been basically
due to certain disputes in those particular returns. The company ensures
that such delays would be avoided in future.
The audit committee members consisting of Mrs. Kshemankari Nadgir,
Dr.Lakshmi Nadgir and Mr. Satish Ailawadi continued to function as the
members of the audit committee in the company.
The subsidiary company has applied for striking off its name from the
Registrar of Companies, Maharashtra and are awaiting the response from ROC.
As such no activities are conducted by the subsidiary company. The accounts
of the subsidiary company are attached with this report.
The directors thank the bankers, shareholders and its customers for the
support extended to the company.
Mumbai : On behalf of the Board
Dated : 30th October, 2004
MANAGEMENT DISCUSSION AND ANALYSIS
During the financial year 2003-2004, India continued to face power shortage
and Power Generation continued to be a high priority agenda of the
Government, which is encouraging non-conventional electricity generation,
energy conservation devices, etc. with financial incentives and
preferential treatment. Non-conventional Power generation in the field of
solar thermal and energy conservation devices continue to be a greenfield
area of business.
Outlook on Opportunities, Threats, Risk and Concerns
The Power Industry is on the threshold of explosive growth in the coming
years. The growth of the shortage of power is indicative of the growth of
ENERGY & POWER: DEMAND & SUPPLY STATISTICS
Category 2000-01* 1999-00 1998-99 1997-98 1996-97
Requirement 377680 480430 446584 424505 413490
Availability 349368 450594 420235 390330 365900
Shortage 28312 29836 26349 34175 47590
Shortage % 7.5% 6.2% 5.9% 8.1% 11.5%
Peak Demand 74216 72669 67905 65435 63853
Peak Demand Met 65628 63691 58445 58042 52376
Shortage 8588 8978 9460 7393 11477
Shortage % 11.6% 12.4% 13.9% 11.3% 18.0%
Source: Tata Statistical Outline 2001-02 *April - December ** Million.
Units (1 unit= 1 KWh)
Many opportunities exist for power conservation and renewable energy
generation. The predominant threat is cheap products available from China
and the threat of intellectual property theft. The main market for these
products is municipal corporations and utility services, i.e. institutions
and public sector organizations that tend to be slow to evolve, accept and
approve new products and technologies.
Internal Control Systems and Adequacy
The Company has adequate Internal Control procedures commensurate with its
size and nature of business. The business control procedures ensure
efficient use and protection of the resources and compliance with the
policies, procedures and statutes. As the Company is still in the take-off
stage, the Internal Control systems are not extremely detailed or
documented, but they provide for guidelines on efficient utilisation of the
The total turnover of the Company for the year under review was nil as
against a nominal turnover of Rs. 7 lacs last year. However, the company
was involved in R&D activities and successfully developed its two new
products, i.e. RF-AMR (Radio Frequency Automatic Meter Reader) and ESS
(Energy Saving Streetlights). The products are in the demo stage. The
company is also discussing with international companies for new
technologies in the field of solar thermal power generation. It is hoped
that with the huge potential in the energy sector and the encouragement
given to the power sector by the Govt. of India the company will be able to
take advantage of opportunities and turnaround the company in the near
The Company is yet to develop its human resources as it has just emerged
from the stage of R&D and has not yet embarked on the marketing of its