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Mazda Industries Leasing Ltd.

BSE: 511045 Sector: Financials
NSE: MAZDALEASE ISIN Code: N.A.
BSE 05:30 | 01 Jan Mazda Industries Leasing Ltd
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Mazda Industries Leasing Ltd. (MAZDALEASE) - Director Report

Company director report

1994 MAZDA INDUSTRIES AND LEASING LTD. DIRECTORS' REPORT TO THE MEMBERS The Directors present their Tenth Annual Report for the financial year ended September 30, 1994. DIVIDEND Dividend declared at the Annual General Meeting held on February 23, 1994 could be paid only after receipt of the Special Court permission for opening the Bank Account as insisted by the Central Bank of India. Your Directors have recommended a Dividend for the year ended September 30, 1994 of Rs.1.10 per fully paid share of Rs.10/- each, subject to deduction of tax as applicable. OPERATIONS During the year under review, your Company could obtain Orders from the Hon'ble Special Court as under: a) to release the 8,99,960 Shares of Mazda Enterprises Limited held by the Company. b) to renounce the Rights Shares issued by Mahavir Spinning & Weaving Mills Ltd. to meet the Income-tax liability of Rs.95.45 lakhs for the Assessment Year 1994-95. c) to release requisite quantity of shares from the custody of C.B.I. to meet the liability of Rs.6.17 Crores due to the notified persons. d) to defreeze Unpaid Equity Dividend Account 1987-88 to transfer Rs.1.09 lakhs to the General Revenue Account of the Central Government u/s 205A of the Companies Act 1956. e) to defreeze various Debenture Interest Accounts with the Central Bank of India to clear off the debit balances with the Central Bank of India and to despatch the various Debenture Interest Warrants lying with the Company duly revalidated to the Debentureholders. f) to release requisite quantity of shares from the custody of C.B.I. to pay dividend for the year ended September 30, 1993 for the notified persons. g) to release the assets of the Company in the form of Shares in various companies held by the Company, but seized by the C.B.I. subject to further Orders and the undertaking given by the Company, wherever necessary. Your Company is taking requisite steps to get these released Shares registered in its name and to dispose the same as directed by the Court to liquidate various dues towards notified persons, and Income-tax Department for which the Company has given necessary undertaking to the Hon'ble Special Court. It has paid Rs.71.49 lakhs to the Custodian against Rs.6.17 Crores due to the notified persons. Apart from Rs.95.45 lakhs paid for the A.Y. 1994-95 under a Special Court Order, your Company has also paid an additional amount aggregating to Rs.345.31 lakhs towards Income Tax liabilities. Your Company has filed a representative petition for release of Shares/Debentures lodged by various Shareholders/Debentureholders for registration with the Company but seized by the C.B.I. In view of these favourable developments, your Directors hope to improve the Company's working and make every efforts to bring the Company back on the fast track. The current year resulted in a Gross Operating Profit of Rs.554.58 lakhs. The distributable surplus after providing Rs.251.65 lakhs for interest, Rs.61.67 lakhs for depreciation and Rs.120 lakhs for taxation works out to Rs.99.71 lakhs. Real Estate a) Project in Sanjan: Our project in Mazda Gardenia was held up due to MIDC Notice. Now as the MIDC Notice is withdrawn, your Company would be in a position to develop and sell the plots. b) Project at Ghorbunder: Your Company is in the process of launching a satellite township project in Ghorbunder area and has initiated action to obtain different clearances. Apart from this, your Company has already started negotiating with M/s. CONTAC of Singapore to take up the role of construction management to take care of quality control and schedule monitoring. FINANCIAL RESOURCES The financial position of your Company is indicated by the following comparative statement: DDDDDDDDDDDRs. in lakhsDDDDDDDDDD September September June 30, 1994 30, 1993 30, 1992 a) Share Capital 681.12 681.12 681.12 b) Book Value of the Share 17.57 17.21 16.87 c) Debt Equity Ratio 3.13:1 2.81:1 2.70:1 FIXED DEPOSITS 455 Deposits amounting to Rs.17.08 lakhs had matured on or before September 30.1994, out of which 157 Deposits amounting to Rs.9.19 lakhs were claimed by the depositors. Your Company has paid Rs.1.20 lakhs towards matured and claimed deposits to 23 deposit holders. Your Directors are taking effective steps to repay all matured deposits at the earliest inspite of the liquidity problems which are still being faced by the Company. FUTURE OUTLOOK You will be pleased to know that some of the problems of your Company have been sorted out through different Orders and Consent Terms from the Special Court. As per the present indications the Company would be left with the reasonable liquidity after paying back the amounts due to the Custodian, Income-tax and Banks. This would give a new platform to the Company to undertake the previous enthusiastic plans in the coming future. In near future, the Company wants to concentrate its efforts in the following activity: 1) Capital Market Operation: After release of Company's assets the Company would be in a position to increase the investment in Capital Market Operation. 2) MFS: The Company has already launched a new Partnership firm known as 'Mazda Financial Services' in joint venture with Mazda Enterprises Limited. Mazda Financial Services is offering various card schemes to individual Investors and corporate Bodies. 3) Real Estate: The Company has already launched a big project in North Bombay and is on the look out for more projects. CONVERSION OF DEBENTURES INTO EQUITY SHARES The Debentureholders and Members at their respective meetings held on December 30, 1992 had passed the resolution for conversion of Debentures into Equity Shares in the ratio of one Debenture of Rs.100/- into two Equity Shares of Rs.10/- each with a premium of Rs.40/- per share at the option of the Debentureholders. The Securities & Exchange Board of India (SEBI) has conveyed its No-objection for the proposed conversion on May 11, 1994. Since the said matter was delayed, the Lead Managers had advised to make a revised application to SEBI. The Company has submitted the revised application to the Lead Managers and the same will be taken up by the Lead Managers with SEBI for its approval shortly. Your Company has paid Debenture Interest due on October 1, 1994. AUDITORS' REPORT Though the Notes to the Accounts in Schedule 17 referred to in the Auditors' Report are self explanatory and therefore do not call for any further comments under section 217(3) of the Company's Act 1956, your Directors would like to elaborate on certain issues raised by the 'Auditors' as detailed hereunder: i) Further to Note No.4 of Schedule No.17 and with reference to Note No.4(iii) in the Auditors' Report regarding the investments aggregating to Rs.132.04 lakhs not delivered as on September 30, 1994, we have to state that the shares valued at Rs.54.43 lakhs were subsequently delivered and/or sold while shares alloted for which Certificates were yet to be delivered amounted to Rs.30.76 lakhs and balance shares arnounting Rs.46.85 lakhs are yet to be delivered. ii) Further to what is stated in Note No.7(i) & (ii) of Schedule 17 and with reference to Note No.4(vi) in the Auditors' Report regarding the accusations made in the FIR filed by the Central Bureau of Investigation, your Directors would like to state that the name of your Company does not figure anywhere in the Joint Parliamentary Committee (JPC) Report submitted to Parliament and the Company has in no way been indicted for any offence or misdemeanour. iii) Further to what is stated in Note No.13 of Schedule No.17 with reference to Note No.4(x) in the Auditors' Report, the demand raised by the Bank in pursuance to the guarantee given by the Company against loan given to Mazda Deuspa Engineering Ltd. (MDEL). Your Directors are pleased to inform that in response to the proposal made by MDEL for waiver of interest and a repayment programme stretching upto 18 months, the Bank has communicated its willingness to waive substantial portion of the interest thereby reducing the liability under this guarantee to approximately an amount of Rs.82 lakhs as against the original demand of Rs.117.05 lakhs. The Management of MDEL is pursuing negotiations and consent terms in this regard are expected to be signed shortly. The assets of MDEL are adequate to cover such reduced liability. iv) With reference to Note No.5(vii) and 5(viii) in the Auditors Report we would like to state that the payments were made to meet the exigencies in the normal course of business and the payments were paid/recovered subsequentiy. (v) With reference to Note No.5(x)(b) and 5(xv) in the Auditors' Report regarding internal control procedures related to transactions in shares and internal audit system, your Directors would like to state that the Management has taken further steps to streamline the procedure and with an intention to eliminate any drawbacks, a Management lnformation System duly approved by the Internal Auditor is being introduced. DIRECTORS In accordance with the provisions of the Companies Act,1956 and Articles of Association of the Company, Mr. H.P. Ranina and Mr. A.S. Mehta retire by rotation and being eligible, offer themselves for re-appointment. As you are aware that during the last three years, your Company was passing through a diffficult phase. Your Directors took necessary steps to vitalise your Company's operations despite various constraints and have steered well to earn sufficient profit through their expertise. Your Directors are taking active interest in the affairs of the Company and it is felt that they should be adequately compensated. Your Directors have recommended for your approval a resolution for payment of commission to the Non-Executive Directors within the limit prescribed u/s 309(4) of the Companies Act,1956, at Item No.6 of the Notice. Your Company proposes to diversify into various fields of activities which will considerably enhance the responslbililies of Mr. V.M. Mirzan, Executive Director. In keeping with this enhanced responsibilities, your Directors have decided to reappoint Mr. V.M. Mirzan as 'Managing Director' for a period of 5 years commencing from April 1, 1995 on the revised terms of remuneration and perquisites as outlined in the Ordinary Resolution at Item No.7 of the Notice and in the Explanatory Statement attached to the said Notice. Your Directors recommend the said resolution for your approval. LONG TERM RESOURCES It is proposed to issue fully Convertible Debentures not exceeding Rs.50 Crores on private placement basis to meet long term working capital requirement and for the expansion. A Special Resolution under Item No.8 of the Notice is recommended for your approval. PARTICULARS OF EMPLOYEES Information as per Section 217(2A) of the Companies Act,1956, read with Companies (Particulars of Employees) Rules 1975 is given in the Annexure, forming part of this report. PARTICULARS OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: As the Company is not engaged in any manufacturing activity, the provisions of section 217(1)(e) read with the Companies (Disclosure of Particulars) in the Report of Board of Directors Rules, 1988 are not applicable. AUDITORS M/s. Chandabhoy and Jassoobhoy, Auditors of the Company, retire as Auditors at the conclusion of the Tenth Annual General Meeting and being eligible, have given their consent for being re-appointed. The Company has received a certificate from them that their appointment, if made, would be within the prescribed limit of Section 224(1B) of the Companies Act 1956. ACKNOWLEDGEMENTS Your directors take this apportunity to thank the Members, Debentureholders, Fixed Depositholders, the Bankers and all the Employees of the Company for their unstinted co-operation received during the year under review. By and on behalf of the Board Place : Bomaby H. P. RANINA Date : March 1, 1995 Chairman