Parsoli Corporation Ltd. के निदेशक की रिपोर्ट

Mar 31, 2009

The Directors have pleasure in presenting the Annual Report along with the Audited Statement of Accounts of the Company for the year ended 31st March 2009.

FINANCIAL RESULTS (Rs. In Million)

2008-2009 2007-2008

Income From Operation & Other Income 25.25 157.42

(Loss)/Profit before tax, interest and depreciation (439.18) 61.98

Less: Financial charges 1.81 0.60

Depreciation 14.12 15.93 5.95 6.55

(Loss)/Profit Before Tax (455.11) 55.43

Less: Provision fo taxation

-Current year - 11.80

-Fringe Benefit Tax 0.60 00.61

-Deferred 13.88 4.92 17.33

-Short (Excess) provision of earlier years 0.58 15.06

Loss/Profit after tax (470.17) 38.10

Less: Prior period Exp. 8.13 1.06

Add: Balance brought forward from Previous year 61.63 46.24

Balance Available for appropriation (416.67) 83.28

Appropriation:

Provisions for Interim Dividend - 13.46

Provision for Tax on Dividend - 2.29

Transferred to Special Reserve 45IC of RBI Act - 4.90

Transfer to General Reserve - 1.00

Deferred Tax Liabilities

Transferred from General Reserve 24.68 -

Balance carried to Balance Sheet (391.99) 61.63

PERFORMANCE OF THE COMPANY:

The year under review was a year of tremendous challenges and difficulties for the Company. It was one of the most challenging years for the Company, due to various external and internal factors.

During the year under review, the economic conditions across the globe spiraled downwards, as the entire world had to deal with the implications of the global recession which took its toll on various leading global financial giants. However, your Company managed to survive through this tumultuous period, even as the economic downturn claimed major casualties even in India, but, we were forced to act decisively to ward off the effects of the sustained economic downturn by shutting down certain non-performing areas of our business and had to reduce our headcount and presence in certain areas.

However even amidst the economic downturn during the year under review, the Company has firmly established itself as the leading Shariah compliant financial services provider in the country. The Company during the year under review signed a Shariah services agreement with Tata-AIG Life Insurance Company (TALIC), to provide them with Shariah services for some of their equity fund schemes. This has been a very successful tie-up and has been renewed for FY 2009-10 as we1!.

But, during the year under review, the Securities Exchange Board of India (SEBI) had passed an ir& order against the Company on 20 February 2009, restraining the Company from acquiring any t clients in either its broking business or its Demat business. The interim order further restrained Company, Mr. Zafar Sareshwala and Mr. Uves Sareshwala, the Managing Director and the} Managing Director respectively of the Company from accessing the securities market till further on

The Company and your Directors feel highly aggrieved and wronged against by this Order. This O has certainly hampered the growth of the Company by restraining it from acquiring any new die: The Company has applied for Consent Order against this order and the matter is currently sub-jud so your Directors will not be able to discuss the facts and merits of the case in favour of the Comp2 in this report, but we are hopeful that justice will be served and the Consent proceedings will successfully resolved.

Further, when we had begun the exercise of expanding the product portfolio, services and i geographical reach of the Company in 2005-06, we had undertaken major marketing, advertisers and expansion initiatives, which paid fruits, in establishing the Company as a recognized player in r financial services sector and the leading player in the nascent but fast growing Shariah complia financial services segment. However, as a result of the expansion, the Company had accumulate certain debts which were deemed bad or doubtful for recovery, over the course of the years sine 2005-06 and these bad debts got further accentuated during the year under review due to the econora downturn and prolonged recessionary trend. The issue of long standing over due debts was unde consideration of Board since long. With a view to clean up the Balance sheet and in view of advic given by Statutory Auditors, the Board has resolved to write off the debts which are bad and doubtf. amounting to Rs. 28.97 crores.

Your Company has also converted the Fully Convertible Debentures (FCDs) issued to M/s BaaoV Wertpapierhandelsbank AG and M/s Oman Commercial Services LLC at a Price of Rs. 2 72/- per sha-r and accordingly has issued 10,48,417 Equity shares of RS 10 each at premium of Rs. 262/- per sharr to M/s Baader Wertpapierhandelsbank AG and 53,810 equity shares of Rs. 10Aeach at premium of R~ 262/- per share to M/s Oman Commercial Services LLC as fully paid up share. The conversion price c Rs. 272 (Rupees Two Hundred and Seventy Two only), was unanimously approved by the Board o Directors at its Board Meeting on 2nd November 2009, in the presence of the Debenture Holder Further, the conversion price is higher than the price arrived at by using SEBIs pricing method. This- has added Rs. 29.98 crores to the Share Capital of the Company.

Your Company will pursue its efforts to recover all possible dues which have been written off. However for the year under review, the write-offs have majorly impacted the bottom line of the Company along with lower revenues in its core business due to the economic downturn but the Company is confident that as the economic conditions keep improving so will its core businesses and therefore the Company is fairly certain that it will bounce back into the black very soon. Also certain cost cutting exerciser- initiated by the Company will start showing its effects in the next few quarters, aiding the Company to make a return to being profitable.

CORPORATE GOVERNANCE REPORT:

Pursuant to Clause 49 of the I isting Agreement with Stock Exchange, a compliance report on Corporate Governance has been annexed hereto as part of the Annual Report. The Company is in compliance with the requirements and di closures that have to be made in this regard. The Auditors Certificate on compliance with Corporate Governance requirements by the Company forms part of said report.

DIVIDEND:

During the year under review Company has incurred the Loss, Your Directors does not recommended any dividend in this financial Year.

DEPOSITS:

The Company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 during the year under review.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

The Managen ont Discussion and Analysis report is annexed liearto as part of the Directors Report.

DIRECTORS:

Mr. Pradeep Asrani and Mr. Mushtaq Al saleh, Directors of the Company retire by rotation at the ensuing Annual General Meeting and are eligible for reappointment. The Board recommends their reappointment.

During the year under review, Mr. Talha Sareshwala was appointed as additional Director of the company w.e.f 08th August, 2009..He hold office up to the date of ensuing Annual General meeting and is eligible for reappointment.

Your Company has received necessary notices from members, pursuant to section 257 of the Companies Act, 1956, signifying their intention to propose candidature of Mr. Talha Sareshwala for the office of the Director. Necessary Resolutions have been proposed for the approval of members at the ensuing Annual General Meeting.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 21 7(2AA) of the Companies Act, 1956 the Directors confirm that:

(1) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(2) appropriate accounting policies have been selected and applied them consistently and judgments and estimates made that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(3) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguard the assets of the Company and for preventing and detecting fraud and other irregularities ;

(4) the accounts have been prepared on going concern basis. SUBSIDIARY COMPANY:

A statement pursuant to Section 212(1)(e) of the Companies Act, 1956 in respect of the subsidiary Companies is annexed herewith.

LISTING:

The Companys securities are listed with Bombay Stock Exchange Ltd, Mumbai. The Company has paid annual listing fee for the year 2008-2009 to the said stock Exchange.

EMPLOYEES:

As required under provisions of section 217(2 A) of the Companies Act, 1956, read with the Companies (Particulars of En ployees) Rules 1975 as amended, from time to time, the requisite particulars in respect of the employees of the Company, who were in receipt of remuneration in excess of the limits specified under tl e said section are set out in the annexure herewith and form part of this report.

INSURANCE:

The Company has taken adequate insurance to cover its assets.

AUDITORS:

There is a proposal to appointment M/s. Heda & Co., Chartered Accountants, Ahmedabad as the auditors of the company in place of M/s. Chandabhoy & jassoobhoy, Chartered Accountants, Mumbai who are retiring at the forthcoming Annual General Meeting. We take this opportunity to thank M/s. Chandabhoy & Jassoobhoy, Chartered Accountants, Mumbai for their co - operation and understanding.

MANAGEMENT RESPONSE TO AUDITORS OBSERVATIONS:

In reply to the Auditors remark in their Auditors report in point no. 4. a), the management is of the view that there has been no diminution in the value of the investments in the unquoted equity shares of Parsoli (UK) Ltd. to the extent of Rs. 923.43 Lacs, Parsoli Insurance Brokers Ltd. to the extent of Rs. 18.77 Lacs and Parsoli Capital Markets Ltd. to the extent of Rs. 64.80 Lacs respectively as per Accounting Standards - 13 Accounting for Investments.

Parsoli (UK) Ltd. was wholly acquired for a total consideration of Rs. 1000 Lacs by way of Share swap in 2004. Parsoli (UK) Ltd. was valued at over £10 million at that time. Parsoli (UK) Ltd. was the sponsor of the first onshore retail Islamic Equity Fund in the UK which was regulated and registered with the FSA. The Fund itself was an Open Ended Investment Company (OEIC) and the Fund also had the tax wrapper of Individual Savings Account (ISA) and the pension wrapper of Self Invested Pension Plan (SIPP) with it making it a unique product. However, due to certain unfortunate events and incidents like 9/11 in the US the Fund was not able to take off due to the changed scenario and all the investors were paid back their investments, but the structure of the Fund was kept alive. Today the UK has become one of the major international hubs of Islamic Finance and Investment products and services, and there exists a huge and vast potential for such services. The management is hopeful of re-launching and marketing of the Fund in a big way in the near future and thus is of the view that there is no diminution in the value of its investment in the equity shares of Parsoli (UK) Ltd. as even today to create the structure of the Fund and to get approval for the same would actually cost more than what it has invested in the equity shares of Parsoli (UK) Ltd. Thus the Company believes that the price paid is lower than the opportunity cost and replacement cost that would be needed to setup a similar structure in the UK now.

Parsoli Insurance Brokers Ltd. is a subsidiary of the Company which was created specifically to start Insurance Broking business and the Company had applied to the Insurance Regulatory and Development Authority (IRDA) for its Insurance Broking license and has been corresponding with IRDA and has replied to its various queries and is still awaiting to receive approval for grant of Insurance Broking License. Once the approval is received and the Company becomes operational, the Management is of the view that there is potential for tremendous growth in this sector having already had the experience of selling third party products.

Parsoli Capital Markets Ltd. is a wholly owned subsidiary of the Company which was specifically created to demerge the broking business of the Company into Parsoli Capital Markets Ltd. For this purpose the Company is going through a court approved demerger process and has appointed KMPG as consultant for this purpose. As and when the Company receives the approval from the Court, the broking licenses and approvals will be transferred to Parsoli Capital Markets Ltd. Therefore Parsoli Capital Markets Ltd. will become in operational as soon as approvals are received for the transfer of the broking business from the respective authorities. The expenses incurred till date in Parsoli Capital Markets is only for setting up the company. Therefore the management is of the view that there has been no diminution in value of investment made in Parsoli Capital Markets Ltd. since the company is yet to become operational and once approvals are received, the profitable broking business will be transferred to it.

In reply to Point 4. b & c), the management is of the view that none of the loans and advances are doubtful as we have obtained confirmations from the respective parties and are as a consequence of normal business activities of the Company.

In reply to Point 4. d), The management has written off preliminary expenses in five equal installments and deferred revenue expenditure in ten equal installments. There are different views for treatment of preliminary expenses which includes share issue expenses and differed revenue expenditure which includes technical fees and can be write off in five to ten installments. We have verified Annual Report of various companies for the treatment of preliminary expenses and found that preliminary expenditure has been written off as per our policy.

In reply to Point 4. e), the Management would like to state that the conversion price of Rs. 272 (Rupees Two Hundred and Seventy Two only), was unanimously approved by the Board of Directors at its Board Meeting on 2nd November 2009, in the presence of the Debenture Holder. Further, the conversion price is higher than the price arrived at by using SEBIs pricing method.

In reply to Point 4. f), the Management would like to state that the Securities Exchange Board of India (SEBI) had passed an interim order against the Company on 20 February 2009, restraining the Company from acquiring any new clients in either its broking business or its Demat business. The interim order further restrained the Company, Mr. Zafar Sareshwala and Mr. Uves Sareshwala, the Managing Director and the Joint Managing Director respectively of the Company from accessing the securities market till further order.

The Management feels highly aggrieved and wronged against by this Order and that it has certainly hampered the growth of the Company. The Company has applied for Consent Order against this order and the matter is currently sub-judice so it will not be possible to discuss the facts and merits of the case in favour of the Company in this report, but we are hopeful that justice will be served and the Consent proceedings will be successfully resolved.

However, the Order only restrains the Company and its Directors from accessing the market and to buying, selling and dealing in the securities market, either directly or indirectly only till Final Order is passed or Consent terms are set and approved. The Company already has over 12,000 registered clients and is working on making all of these already registered clients as active clients and this should help the Company in mitigating the severe adverse effects of the interim order on its business going forward.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO:

The Company has no activities relating to Conservation of Energy, Technology Absorption etc. Details of foreign exchange earnings and out go are given into notes to accounts.

ACKNOWLEDGEMENT:

The Board of Directors takes this opportunity to thank the Banks and Regulatory Authority for their continued assistance and co-operation.

Your Directors wish to sincerely thank to all the shareholders for making strategic investment in the Company and the faith they have shown in the management and workings of the Company.

Your Directors recognize the patronage extended by the customers, business associates, employees and Axis Bank Ltd, HDFC Bank Limited & Canara Bank Ltd, the bankers of the company.

- BY ORDER OF THE BOARD FOR PARSOLI CORPORATION LIMITED. Place: Ahmedabad Date: 03rd November 2009

Uves Sareshwala Zafar Sareshwala jt. Managing Director Managing Director

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Mar 31, 2003

The Directors have pleasure in presenting the Annual Report together with the Audited Statement of Accounts for the year ended 31st March 2003.

FINANCIAL RESULTS :

The operating results of the Company for the year ended 31st March, 2003 are briefly indicated below:

(Rs. in Lacs)

2002-2003 2001-2002 Profit before Depreciation and Taxation 16.92 16.14

Less : Depreciation 14.74 14.68

Profit Before Taxation 2.18 1.46

Less : Provision for Taxation 0.16 0.10

Profit After Taxation 2.02 1.36

OPERATIONS :

During the year under review, your Company has earned net profit of Rs. 2,01,575/- (Previous year Rs. 1,35,524/-) after providing Depreciation of Rs.14,74,461/- (Previous year Rs. 14,68,076/-) and Provision for Tax of Rs. 16,000/- (Previous year Rs. 10,000/-).

CORPORATE GOVERNANCE REPORT

As per Clause 49 of the Listing Agreement with Stock Exchanges, your company was required to implement the Code of Corporate Governance by March 31, 2003. Accordingly, your Company has complied with all material aspects with the features of the said code. A report on the same is given separately.

DIVIDEND :

In order to conserve the resources, your Directors do not recommend any dividend for the year.

DEPOSITS :

The Company has not accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 during the year under review.

DIRECTORS :

Shri Mohd. Iqbal Hawa and Shri Habibullah Ebrahim Akudi, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Shri Uves Sareshwala has been appointed as a Managing Director of the Company w.e.f. 01-08-2003. Necessary resolution has been proposed for the approval of the members for his appointment.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, the Directors Confirm that

1. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. Appropriate accounting policies have been selected and applied them consistently and judgements and estimates made that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguard the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The accounts have been prepared on going concern basis.

LISTING :

Companys securities are listed with the Stock Exchanges at Mumbai & Ahmedabad. Company has paid listing fees to both the Exchanges.

EMPLOYEES :

As there are no employees drawing remuneration more than the limit prescribed under Section 217(2A) of the Companies Act, 1956, and the Companies (Particulars of Employees) Rules, 1975, as amended, from time to time, statement under section 217(2A) is not required.

INSURANCE:

Company has taken adequate insurance to cover its assets.

AUDITORS :

The Companys auditors M/s. Aniket Shaishav & Associates., Chartered Accountants, will retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. The Members are requested to appoint auditors for the current year and fix remuneration.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company has no activities relating to Conservation of Energy, Technology Absorption, etc. Details of foreign exchange earnings and out go are given into notes to account.

ACKNOWLEDGEMENT :

Your directors acknowledge with deep sense of gratitude for the continued support extended by customers, business associates and bankers.

FOR AND ON BEHALF OF BOARD FOR PARSOLI CORPORATION LIMITED

(YUNUS SARESHWALA) Chairman

PLACE : AHMEDABAD DATE : 16-06-2003

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Mar 31, 2002

The Directors have pleasure in presenting the Annual Report together with the audited Statement of Accounts for the year ended 31st March, 2002.

FINANCIAL RESULTS:

The operating results of the Company for the year ended 31st March, 2002 are briefly indicated below:

(Rs. in Lacs)

2001-2002 2000-2001

Profit before Depreciation and Taxation 1613600 2524752

Less: Depreciation 1468076 952168

Profit Before Taxation 145524 1572584

Provision for Taxation 10,000 11,500

Profit After Taxation 135524 1457584

OPERATIONS:

Overall recessionary trend and particularly the bearish trend in stock market operations have adversely affected the working of the Company. Brokerage income has been reduced substantially. In view of that the profit has been reduced to Rs. 1. 35 lacs has against the profit of Rs. 14. 57 lacs of previous year.

DIVIDEND:

In order to conserve then resources, your Directors do not recommend any dividend for the year.

DEPOSITS:

The Company has not accepted any deposits with in the meaning of Section 58 (A) of the Companies Act, 1956.

DIRECTORS:

Shri Yunus Sarehwala and Shri Aslam Salam, Directors of the Company are retiring by rotation and being eligible, after themselves for re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217 (2AA) of the Companies Act, the Directors Confirm that:

1. In the preparation of the annual accounts, the applicable accounting standards have been followed:

2. Appropriate accounting policies have been selected and applied consistently and judgements and estimates made that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and the profit or loss of the Company for that period:

3. Proper and sufficient care has been taken 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:

4. The accounts have been prepared on going concern basis.

LISTING:

Companys securities are listed with the Stock Exchanges at Mumbai & Ahmedabad. Company has paid listing fees to both the Exchanges.

EMPLOYEES:

As there are no employees drawing remuneration more than the limit prescribed under Section 217 (2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975, as amended, from time to time, statement under section 217 (2A) is not required.

AUDITORS:

The Companys Auditors M/s Aniket Shaishave & Associates, Chartered Accountants will retire at the ensuing Annual General Meeting but being eligible offer themselves for re-appointment. The Members are requested to appoint auditors for the current year and fix remuneration.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company has no activities relating to conservation of energy or technology absorption. The company has foreign exchanges earnings equivalent to Rs. 5. 44 lacs & there is no foreign exchange outgo during the year under review.

ACKNOWLEDGEMENT:

The Board places on record the valuable services rendered by employees at all level and support given by clients, suppliers, shareholders.

FOR AND ON BEHALF OF THE BOARD

UVES SARESHWALA (Jt. Managing Director)

PLACE: AHMEDABAD DATE : 16th August, 2002