Board of Directors
Sukumar R. Kirloskar
Chairman
Padmaja S. Kirloskar
Director
M C Jayasimha
Director
M S Srinath
Director
Ajay S. Kirloskar
Managing Director
Banks & Financial Institutions
Central Bank of India,
Bangalore
Karnataka State Financial Corporation,
State Bank of Mysore,
Auditors
Divakara & Associates
Bangalore
Solicitors
P. V. Bhat
Bangalore
Indus Law
Bangalore
B. S. Shankarnarayan
Bangalore
Registered Office
Kempapura, HAF Post
Bangalore - 560 024
Bangalore
Bangalore
NOTICE TO THE MEMBERS
NOTICE IS HEREBY GIVEN THAT THE EIGHTEENTH ANNUAL GENERAL MEETING of the Members of the
Company will be held on Thursday, September 30, 2010 at 2:00 PM at All India RMS & MMS Union Hall, 849/4,
A B l o c k , S a h a k a ra n a g a r,
Bangalore - 560 092, to transact the following business.
ORDINARY BUSINESS
1. To consider, approve and adopt the Audited Balance Sheet as on 31st March 2010, the Profit and Loss
Account for the year ended 31st March 2010 and the Reports of the Directors and Auditors of the Company.
2. To appoint Mr. Ajay S. Kirloskar, who retires by rotation and is eligible for re-appointment.
3. To appoint M/s Divakara & Associates, Chartered Accountants, Bangalore, as Auditors of the Company
to hold office from the conclusion of this Annual General Meeting until the conclusion of the ensuing Annual
General Meeting and to fix their remuneration.
By Order of the Board
Date : August 25, 2010
Place : Bangalore
Sukumar R. Kirloskar, Chairman
Notes
1.
A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE ON POLL
INSTEAD OF HIMSELF AND SUCH PROXY NEED NOT BE A MEMBER.
2.
The instrument appointing proxy should be deposited with the Company atleast 48 hours before the commencement
of the Meeting.
3.
Members are requested to notify any change in their address.
4.
The Register of Members and Share Transfer Book will remain closed from 21.09.2010 to 30.09.2010 (both days inclusive)
for the purpose of determining shareholders for sending AGM Notice.
5.
Members are requested to bring their own copies of Annual accounts already dispatched to them.
6.
For the convenience of members & proxies attending the meeting, the attendance slip and proxy forms to be used.
1
DIRECTOR’S REPORT
The Directors present the 18th Annual Report of your Company with Audited Financial Statements for the
year ended 31st March 2010 along with the Auditors’ Report.
REVIEW OF OPERATIONS
The Company had no commercial operations duing the year. There was no operational income from multimedia
publishing during the year (previous year NIL), while expenditure before interest and depreciation was at
Rs. 0.35 million (previous year Rs. 0.23 million). Overall loss for the year was at Rs. 1.17 million (previous
year Rs. 1.05 million). There is no change in the outlook with regard to the Company’s prospects for revival
in the multimedia publishing industry.
REDUCTION OF CAPITAL
Your Company’s petition for reduction of capital is pending before the Honourable High Court of Karnataka.
ENERGY, TECHNOLOGY, FOREIGN EXCHANGE
A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and
outgo as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is
annexed to this Report.
PUBLIC DEPOSITS
The Company has not accepted any deposit from the public during the year under review.
PERSONNEL
The Statement under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975, as amended is not given as there are no employees drawing remuneration as per
provisions of this Section.
DIRECTORS
Mr. Ajay S. Kirloskar retires by rotation at the ensuing Annual General Meeting and being eligible offers
himself for re-appointment.
AUDITORS
M/s Divakara & Associates, retiring Auditors, have furnished a certificate of their eligibility for re-appointment
as required under the provisions of Companies Act, 1956. The members of the Company are requested to
appoint them as statutory Auditors of the Company.
REPLY TO AUDITOR’S OBSERVATIONS
No provision has been made till date in respect of interest on the loan balance claimed by Central Bank of
India as the same has been contested by the Company and is undeterminable pending a settlement. No
provision has been made till date in respect of the claim made by Tata Finance Limited as the arbitration
award has been challenged by the Company before the City Civil Judge, Bangalore. No provision has been
made till date in respect of the claim by the Income Tax Department, as the Company has challenged the
claim. The Company does not have a formal internal audit system as the present level of operations do not
justify the cost of implementing one.
ACKNOWLEDGEMENT
Your Directors wish to place on record their sincere appreciation for the support of shareholders, bankers
and financial institutions.
For and on behalf of the Board
Date : May 31, 2010
Place : Bangalore
2
Sukumar R. Kirloskar
Chairman
I. ANNEXURE TO THE DIRECTORS’ REPORT
A. CONSERVATION OF ENERGY
The Operations of your Company are not energy intensive. Adequate measures have been taken to
reduce energy consumption. Efforts are being made on an on-going basis to conserve and optimize the
use of energy in regular operations by investments in latest techniques and equipments.
B. RESEARCH AND DEVELOPMENT
Specific areas where the company carries out R & D
Company carries out R & D in the field of multimedia content development although no R & D was carried
out during the Year.
Benefits derived
Development of new multimedia products and upgradation of existing products.
Future Plan on R & D
In view of the Company’s financial situation, no future plan on R&D is planned at present.
Expenditure on R & D
R & D is undertaken by the projects department when there are financial resources allocated and no
separate records of the expenditure incurred on R & D as such is maintained.
Technology Absorption
The Company has not absorbed any technology from foreign companies / parties.
C. FOREIGN EXCHANGE EARNING & OUTGO
The information on Foreign Exchange earning and outgo are contained in the notes to the accounts in
Schedule 11(B9&10).
II. ANNEXURE TO THE DIRECTORS’ REPORT
In compliance of Section 217(2AA) of the Companies Act, 1956 as amended by the Companies Act, 2000,
the Directors of the Company confirm:
1. That the applicable accounting standards have been followed in the preparation of final accounts and that
there are no material departures;
2. That such accounting policies have been selected and applied consistently and such judgements and
estimates made 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, 2010 and of the loss of the Company for the year ended on that date;
3. That 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. That the annual accounts have been prepared on a going concern basis.
For and on behalf of the Board
Date : May 31, 2010
Place : Bangalore
Sukumar R. Kirloskar
Chairman
3
CORPORATE GOVERNANCE REPORT
1. THE COMPANY’S CORPORATE GOVERNANCE PHILOSOPHY
Kirloskar Multimedia Limited defines Corporate Governance as a systemic process by which companies are
directed and controlled to enhance their wealth generating capacity. It is a combination of voluntary practices
adopted by a Company interwoven with laws, regulations, procedures and disclosures.
It is aimed in the long run to maximize shareholder and employee value as well as to attract, retain and
motivate employees.
Corporate Governance is, in a larger context, to be experienced as a movement throughout the Company
and not merely as an exercise or as a means to an end in complying with statutory requirements, but as
an end by itself, which transcends beyond mere disclosures and statutory compliances.
The Company has initiated the process of Corporate Governance in compliance with Clause 49 of the Listing
Agreement with The Stock Exchange, Mumbai and Clause 51 of the Listing Agreement with the Bangalore
Stock Exchange Ltd. A sincere attempt has been made to comply with Corporate Governance code and in
this regard, hereby submit a report on the matters mentioned in the said clauses and practices which are
followed by the Company.
2. BOARD OF DIRECTORS
During the year, the Board of Directors had an optimum combination of Executive and Non-Executive Directors
with not less than 50% of the Directors being Non-Executive Directors. The non-executive directors are
eminent professionals, drawn from amongst persons with experience in business/finance/law/public enterprises.
The Company is not paying sitting fees or any remuneration to the non-executive directors.
The Board had met 5 times during the year under review on the following dates : July 31, 2009; October
31, 2009; January 30, 2010; March 31, 2010 & May 31, 2010.
The following table gives details of designation, category of directors and their attendance, last AGM attended
and number of directorships held by them in other companies.
Name of the Director
Category
of Directors
No. of Board
meetings
attended
Attendance
at last
AGM
Nos. of other
Directorship
held
Mr. Sukumar R. Kirloskar
Chairman &
Non-Executive Director
5
Yes
0
Mrs. Padmaja S. Kirloskar
Non-Executive Director
5
Yes
0
Mr. Ajay S. Kirloskar
Managing Director
& Executive Director
5
Yes
2
Mr. M. C. Jayasimha
Non-Executive Director
5
No
0
Mr. M. S. Srinath
Non-Executive Director
5
No
0
None of the Directors is a member in more than 10 committees or acts as a Chairman of more than 5
committees across all companies in which he is a Director.
Disclosure regarding appointment or re-appointment of Directors Mr. Ajay S. Kirloskar, who retires by rotation at the ensuing Annual General Meeting and who is eligible for
re-appointment, is one of the Promoters of the Company.
4
Remuneration of Directors
Remuneration paid/payable to Directors for the year under review:
Director
Sitting
Fees
Salaries
& Perquisites (Rs)
Commission
Total (Rs)
Mr. Sukumar R. Kirloskar
Mrs. Padmaja S. Kirloskar
Mr. Ajay S. Kirloskar
Mr. M. C. Jayasimha
Mr. M. S. Srinath
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
NIL
3. AUDIT COMMITTEE
The Audit Committee inter alia provides assurance to the Board on the adequacy of internal control system
and financial disclosures. According to the provisions of Clause 49 of Listing Agreement with The Stock
Exchange, Mumbai and Clause 51 of Listing Agreement of the Bangalore Stock Exchange Ltd., and read with
the provisions of Section 292A of the Companies Act, 1956 as inserted by the Companies Amendment Act,
2000, the Audit Committee of your Company comprised of Mr. M. S. Srinath, Independent Director as
Chairman of the Committee and with Mr. M. C. Jayasimha, Independent Director and Mr. Ajay S. Kirloskar,
Managing Director as members.
The Audit Committee has met five times on July 31, 2009; October 31, 2009; January 30, 2010; March
31, 2010 & May 31, 2010 during the year for finalization of accounts and such other additional matters. All
the members of the Committee were present in these meetings.
4. REMUNERATION COMMITTEE
Since no remuneration is provided to any of the non-executive directors, no committee for regulating the
payment of remuneration has been formed.
5. SHARE HOLDERS COMMITTEE
Shareholders / Investors Grievance Committee
The Shareholders / Investors Grievance Commitee, consisting of Mr. M. C. Jayasimha - Independent Director,
as Chairman, and Mr. M. S. Srinath - Independent Director and Mr. Sukumar R. Kirloskar, Non-Executive
Director, as members, specifically looks into matters such as redressing of shareholder and investors
complaints.
No. of Complaints received:
No. of Complaints redressed:
No. of Pending Share Transfers:
1
1
0
Share Transfer Committee
The Company from the beginning has formed Share Transfer Committee to look into the issues like Transfer
of shares, Transmission of Shares, Splitting, Consolidation of Shares, Issue of Duplicate Share Certificates
etc., comprising of two Directors. Now that the Company is under the compulsory demat scheme, the
question of issue of duplicate for lost/mutilated certificates does not arise.
6. GENERAL BODY MEETING
Particulars of AGM/EGM held for the previous financial year:
AGM/EGM
Date
Venue
Time
17th AGM
Sep 18, 2009
All India RMS & MMS Union Hall
9.00 A.M.
No of Special
Resolutions Passed
-
7. DISCLOSURE
• There are no material transaction with its promoters, the Directors or the Management, their subsidiaries
or relatives, etc., which requires separate disclosure.
• Trading of the Company’s scrip was suspended on and by The Stock Exchange, Mumbai, as the Company
was not able to pay the listing fees due to its adverse financial position.
5
8. MEANS OF COMMUNICATION
• Half yearly report sent to each
household of shareholders
:
No
• Quarterly results
Which newspapers normally published in
:
Normally in Business Standard & Udayvani;
Could not be published due to adverse financial
condition.
• Any Web site, where displayed
:
http://www.bseindia.com/qresann/
result.asp?scripcd=32352&scripname=KIRLOSKAR+ML
• Displays official news releases and
presentations made to institutional investors
or to the analysts
:
No
• Whether Management Discussion and
Analysis report is a part of annual report or not :
Yes
9. GENERAL SHAREHOLDERS INFORMATION
• AGM : Date, time and venue
: 30 September 2010, 2.00 PM
All India RMS & MMS Union Hall, 849/4, A Block
Sahakaranagar, Bangalore - 560092
• Financial Calendar
: April to March
• Date of Book Closure
: 21.09.2010 to 30.09.2010
Both days inclusive
• Dividend Payment Date
: NA
• Listing on Stock Exchange
: Bangalore Stock Exchange Ltd.,
Stock Exchange Towers, 51, 1st Cross,
J. C. Road, Bangalore - 560 027
The Stock Exchange, Mumbai
Phiroze Jeejeebhoy Towers,
Dalal Street, Mumbai - 400 023
• Stock Code
Bangalore Stock Exchange Ltd.,
The Stock Exchange, Mumbai
: KMML
: 532352 (Demat segment)
32352 (Normal Segment)
International Securities
Identification number (ISIN)
: INE175B01010
• Market Price Date
High, Low during each month in
last financial year (At BgSE)
• Registrar and Share Transfer Agents
6
: Year 2009-10
April
May
June
July
August
September
October
November
December
January
February
March
No
No
No
No
No
No
No
No
No
No
No
No
High
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
No
No
No
No
No
No
No
No
No
No
No
No
: Karvy Computershare Pvt. Ltd.,
No.51/2, T.K.N. Complex
Vanivilas Road,Opp.National College
Basavangudi,
Bangalore - 560 004.
Low
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Trading
• Share Transfer System
: Karvy Computershare are the share transfer agents
of the company. Transfer of shares are approved by
the share transfer committee formed by the Board
in its meeting held on 28.07.2000 which meets at
frequent intervals. After approval, the Memorandum
of transfer is sent to Karvy, who will endorse the
transfer and despatch the certificates to the transferees
within 30 days from the date of receipt.
• Distribution of Share-holding
: Category
No of Shares % to Equity
Promoters
Private Corporate Bodies
Indian Public
NRI’s/OCB’s
6,609,060
1,535,525
6,441,815
13,600
45.27
10.52
44.12
0.09
• Dematerialization of shares and liquidity
: The shares are traded in demat form only.
• Outstanding GDRs/ADRs/Warrants or
any Convertible instruments
: NA
• Plant Locations
: Kirloskar Multimedia Limited
Kempapura, HAF Post
Bangalore - 560 024
• Address of Correspondence
: Kirloskar Multimedia Limited
Kempapura, HAF Post
Bangalore - 560 024
Auditors’ Certificate
To the Members:
As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we have to state
that no investor grievance is pending for a period exceeding one month against the Company as per the
records maintained by the Investor’s Grievance Committee.
For Divakara & Associates
Chartered Accountants
Place : Bangalore
Date : 31.05.2010
POLALI DIVAKAR RAO
(Proprietor)
7
MANAGEMENT DISCUSSION & ANALYSIS
Industry Structure
The multimedia products industry that the Company operates in a subset of the consumer products industry.
End consumers are reached through various channels including retail, direct marketing, affinity groups, the
internet, direct-order catalogs, etc. The Company’s products are additionally meant for the educational
market consisiting of educators, schools and learning institutions. Distribution structures are well defined
and are mature, consisting of channel specific whole-salers, distributors and retailers. The market opportunity
for the Company’s products are world-wide, and each market territory has its own unique differences for
marketing and distribution. Products to be sold to the European Union, for instance, require language
conversion and localisation for each different country. Product awareness is supported by public relations
activities that result in reviews in consumer magazines and trade journals. Purchase is typically an impulse
buy determined by attractiveness of point-of-purchase display which in most instances is the packaging
itself. Prominence in display in the retail environment is also a significant factor in product success.
Competition is intense.
Opportunities and Threats
A growing international consumer multimedia products market with new technology delivery platforms
provides opportunities for new and expanding models for the development and delivery of interactive
multimedia content. While this represents an ongoing, expanding opportunity with the possibility of significant
up-sides, the publishing model is high risk as substantial investment and lead-time is necessary for new
content development combined with brand development, marketing and distribution. Even so, product
success is dependent on consumer acceptance assuming adequate distribution exists. Established distribution
channels are extremely difficult to penetrate. Ongoing R&D, investment in product development, and
constant product technological upgradation is a necessity. Product development necessitates a large pool
of creative and technical talent supported by adequate marketing and distribution. Being adequately
capitalised in addition to having definitive and dependable product revenue streams is a prerequisite for a
healthy cash-flow that can support a publishing endeavour. The Company’s track record in building such a
publishing business is indicative of the several challenges, difficulties and risks that exist in the market.
Segment Wise Performance
The Company had no operating income from its multimedia publishing business.
Outlook
The Company has not had any past success in its efforts to build a successful multimedia products publishing
business. It has been the experience of the Company that to take on the risks posed in this industry requires
a fundamental financial base that the Company has lacked, as product development costs lead revenue
streams which have been uncertain. The Company has not had any commercial operations during the year
due to it’s financial situation. The Company’s products face technological obsolescence in the absence of
upgradation and no longer meet the latest standards for technology delivery. It is unlikely that the Company
can revive it’s multimedia products publishing business without making a completely new beginning with
new investment leading to existing product upgradation and new products, coupled with sizable investment
in marketing and distribution, which in view of the present financial condition is unlikely.
Risks and Concerns
The Company is in a dire situation consequent to it’s poor financial position. It is unlikely that the Company’s
multimedia product publishing business can be revived. The Company at present lacks the financial means
to pursue any new alternative opportunity within the multimedia industry. There are significant liabilities
that the Company still carries. Consequently, it is unlikely that the Company can be revived in its present
form.
Internal Control Systems and their Adequacy
There are reasonable internal procedures commensurate with the size of the Company and the nature of
its business with regard to purchase of plant and machinery, equipment and other assets, and sales.
Financial Performance
The Company’s financial performance has been severely affected by factors beyond its control.
Cautionary Statement
Management discussion and analysis about the Company’s objectives and expectations may be forward
looking statements subject to applicable securities laws and regulations. Actual results could differ materially
from those expressed or implied depending upon demand and supply conditions, changes in government
regulations, economic developments within India and overseas.
8
AUDITORS’ REPORT
To the Members of Kirloskar Multimedia Limited
We have audited the attached Balance Sheet of M/s. Kirloskar Multimedia Limited, Regd. Off: Kempapura,
HAF Post, Bangalore - 560 024 as at 31st March 2010 and the Profit and Loss account for the year ended
on that date together with the Schedules and Notes thereon annexed thereto. These financial statements
are the responsibility of the Management of the Company. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards in India. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are prepared, in all material respects, in accordance with an identified financial reporting framework
and are free of material mis-statements. An audit includes, examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant statements presentation. We believe that our audit provides a reasonable
basis of our opinion, and report that:
1.
As required by the Companies (Auditor’s Report) Order, 2003 (CARO - 2003) as amended by the
Companies (Auditor’s Report) Order (Amendment) 2004, issued by the Central Government of India
in terms of Sub-section (4A) of Section 227 of the Companies Act 1956, and on the basis of such
checks and verification of books and records as we considered appropriate and as per the information
and explanations given to us during the course of our audit, we report as follows on the matters
specified in paragraphs 4 & 5 of the said Order:
i a.
b.
c.
The Company has maintained proper records showing all particulars, including quantitative details
and situation of fixed assets.
According to the information and explanations given to us, the fixed assets have been physically
verified by the management at reasonable intervals which, in our opinion, is reasonable, having
regard to the size of the Company and nature of the assets. No material discrepancies were
noticed on such verification.
In our opinion, the Company has not disposed off a substantial part of its Fixed Assets during
the year and the going concern status of the Company is not affected.
ii
The Company is a Service Company, primarily rendering information technology services multimedia. Further, as informed to us, the Company does not hold any physical inventories.
Thus paragraph 4(ii) of the Order is not applicable.
iii
We are informed that the Company has not taken / granted any loans, secured or unsecured,
from/to Companies, Firms or other parties listed in the register maintained under Section 301
of the Companies Act, 1956.
iv
In our opinion, and according to the information and explanation given to us, there are adequate
internal control procedures commensurate with the size of the Company and the nature of its
business with regard to purchase of fixed assets and the sale of services. During the year, there
were neither purchase of inventories and sale of services.
v
According to the information and explanations given to us, there are no transactions and
arrangements, the particulars of which need to be entered into the Register maintained under
Section 301 of the Companies Act, 1956.
vi
The Company has not accepted any deposits from the public within the meaning of Section 58A,
58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder.
vii
The Company does not have an Internal Audit System commensurate with its size and nature
of business.
viii
The Central Government has not prescribed maintenance of cost records under Section 209(1)(d)
of the Companies Act, 1956, for the products of the Company.
xi
a. The Company is generally regular in depositing undisputed statutory dues including Provident
Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty, Cess and any other Statutory dues with the appropriate authorities, except
Rs. 82,987 being fines and penalty payable to ESIC which are outstanding as at 31.03.2010 for
a period of more than six months from the date they became payable.
b. According to the information and explanations given to us and on the basis of our examination
of the accounts, there are no disputed amounts of Income Tax / Sales Tax / Service Tax / Customs
Duty / Excise Duty / Cess as on 31 March 2010 except a claim against the Company by the
Income Tax Department towards Income Tax and Interest amounting to Rs. 3.93 Lakhs for which
the Company has not made any provision in the Books of Accounts..
x
The Company is registered for a period not less than 5 years and accumulated losses at the end
of the financial year are not less than 50% of its net worth. However, the Company has incurred
cash losses during the financial year and in the immediately preceding financial year.
xi
The Company has defaulted in the repayment of working capital facilities extended by Central
9
Bank of India and in redemption of non-convertible debentures issued to KSFC. As on 31.03.2010,
these amounts are outstanding, as disclosed in the financial statements, to the bank and financial
institution and are overdue.
xii
As the Company has not granted loans and advances on the basis of security by way of pledge
of shares, debentures and other securities, the question of reporting on Clause No. 4(xii) of the
Order does not arise.
xiii
The provisions of any special statute applicable to Chit Fund, Nidhi, Mutual Benefit Fund or
Societies are not applicable to the Company.
xiv
The Company is not dealing or trading in shares, securities, debentures and other investments.
Accordingly, Caluse 4(xiv) of the Order is not applicable.
xv
According to the information and explanations given to us, the Company has not given any
guarantee for loans taken by others from banks and other financial institutions. Accordingly,
Clause 4(xv) of the Order is not applicable.
xvi
The Company has not raised any Term Loans during the year.
xvii
According to the information and explanations given to us,and on overall examination of the
balance-sheet of the Company, we report that no funds raised on short-term basis have been
used for long-term investment of the Company.
xviii The Company has not made any preferential allotment of shares to parties and companies covered
in the register maintained under Section 301 of the Companies Act, 1956, during the year.
2.
(i)
(ii)
(iii)
xix
The Company has not issued any debentures during the year and hence the question of creating
securities for the debentures issued does not arise.
xx
The Company has not made any public issue during the year and as such, reporting on Clause
No 4(xx) of the Order does not arise.
xxi
During the course of our examination of the books and records of the Company, carried out in
accordance with the generally accepted auditing practices in India, and according to the information
and explanations given to us, we have neither come across any instance of fraud on or by the
Company, noticed and reported during the year, nor have we been informed of such case by the
Management.
Further to our report in paragraphs (1) above subject to:
Serial number B 4 of Schedule 10, regarding non provision of interest in respect of facilities from
Central Bank of India till date and its consequential effects on the losses of the Company; and
Serial number B 5 of Schedule 10, regarding non provision for the claim against the Company by Tata
Finance Limited till date and its consequential effects on the loses of the Company; and
Serial number B 6 of Schedule 10, regarding non provision for the claim against the Company by the
Income Tax Department towards Income Tax and Interest amounting to Rs. 3.93 Lakhs and its
consequential effects on the losses of the Company.
We report that,
(a) we have obtained all the information and explanations which, to the best of our knowledge and belief
were necessary for the purpose of our audit;
(b) in our opinion, proper books of account as required by law have been kept by the Company so
far as appears from our examination of the books;
(c) the Balance Sheet and the Profit and Loss Account referred to in this report are in agreement with the
books of account;
(d) In our opinion and subject to various observations made in the above paragraphs, the Balance Sheet
and Profit and Loss Account dealt with by this report have been prepared in compliance with the
applicable Accounting Standards referred to in sub-section (3C) of the Companies Act, 1956;
(e) On the basis of written representations received from the Directors of the Company as at 31st March
2010 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st
March 2010 from being appointed as Director of the Company under Clause (g), Sub-Section (i) of
Section 274 of the Companies Act, 1956.
(f)
In our opinion and to the best of our information and according to the explanations given to us, the
Balance Sheet and Profit and Loss Account read together with the Schedules and the Notes thereon
give the information required by the Companies Act of 1956 in the manner so required and give a true
and fair view:
(i)
in so far as it relates to the Balance Sheet, of the State of Affairs of the Company as at 31st
March 2010 and
(ii) in so far as it relates to the Profit and Loss Account, of the losses of the Company for the year
ended on that date.
for DIVAKARA & ASSOCIATES.,
Chartered Accountants
PLACE : Bangalore
DATE : May 31, 2010
10
POLALI DIVAKAR RAO
(Proprietor)
Membership No. 23377 Firm Regn No. 000763S
BALANCE SHEET
as at 31.03.2010
Schedule
As at
31.03.2010
(Rs.)
As at
31.03.2009
(Rs.)
Shareholders' Funds
Share Capital
1
146,000,000
146,000,000
Loan Funds
Secured Loans
2
9,934,400
9,934,400
155,934,400
155,934,400
SOURCES OF FUNDS:
TOTAL
APPLICATION OF FUNDS:
Fixed Assets
Gross Block
Less: Depreciation
Net Block
3
Investments
4
Current Assets,
Loans & Advances
Less: Current Liabilities
& Provisions
Net Current Assets
50,893,156
50,893,156
5
1,090,934
6
15,259,227
50,893,156
50,893,156
Notes to Accounts
10(B)
5,775,925
5,775,925
14,086,124
TOTAL
10(A)
0
1,077,329
Profit & Loss Account
Significant Accounting
Policies
0
-14,168,293
-13,008,795
164,326,768
163,167,270
155,934,400
155,934,400
Schedules referred to above form part of the accounts.
To be read with our report of even date
For Divakara & Associates
Chartered Accountants
POLALI DIVAKAR RAO
(Proprietor)
Membership No. 23377
For and on behalf of the Board
SUKUMAR R. KIRLOSKAR
AJAY S. KIRLOSKAR
Chairman
Managing Director
PLACE : BANGALORE
DATE : May 31, 2010
11
PROFIT & LOSS ACCOUNT
for the Year Ended 31.03.2010
Schedule
For the
Year ended
31 March 2010
For the
Year ended
31 March 2009
14,067
16,910
14,067
16,910
353,423
820,142
0
226,724
820,075
0
1,173,565
1,046,799
1,159,498
1,029,889
0
300
1,159,498
1,030,189
Add: Deficit brought down from last
Balance Sheet
163,167,270
162,137,081
Balance Carried To Balance Sheet
164,326,768
163,167,270
(0.08)
(0.08)
(0.07)
(0.07)
Income
Other Income
7
TOTAL
Expenditure
Operating & Other Expenses
Interest & Financial Charges
Depreciation
8
9
3
TOTAL
Net Loss for the year
Add: Provision for Taxes - FBT
Earnings Per Share
Basic
Diluted
Significant Accounting Policies
Notes to Accounts
10(A)
10(B)
Schedules referred to above form part of the Accounts
To be read with our report of even date
For Divakara & Associates
Chartered Accountants
POLALI DIVAKAR RAO
(Proprietor)
Membership No. 23377
PLACE
DATE
12
: BANGALORE
: May 31, 2010
For and on behalf of the Board
SUKUMAR R. KIRLOSKAR
AJAY S. KIRLOSKAR
Chairman
Managing Director
SCHEDULES ATTACHED TO AND FORMING A PART OF THE ACCOUNTS
FOR THE YEAR ENDED 31ST MARCH 2010
SCHEDULE NO. 1 – SHARE CAPITAL
Authorised Capital
15,000,000 Equity Shares of Rs. 10 / - each
(Previous Year - 15,000,000 Equity Shares of Rs. 10/- each)
Issued, Subscribed & Paid Up Capital
1,46,00,000 Equity Shares of Rs. 10 / - each fully paid
(Previous Year: 1,46,00,000 Equity Shares)
As at 31.03.2010
(Rs.)
As at 31.03.2009
(Rs.)
150,000,000
150,000,000
146,000,000
146,000,000
146,000,000
146,000,000
4,000,000
4,000,000
4,334,400
1,600,000
4,334,400
1,600,000
9,934,400
9,934,400
SCHEDULE NO. 2 – SECURED LOANS
Debentures
KSFC - NCD - secured by way of hypothecation of current
assets, semi-finished, finished goods & book debts,
machinery and equipments, both present and future
and also guaranteed by the Directors personally.
Loans & Advances from Banks :
Central Bank of India, secured by way of hypothecation
of multimedia titles and moveable property, stock-in-trade
and foreign bills to the extent of Rs. 45 Lakhs and secured
by the Directors personally
- Foreign Bills Purchased
- Packing Credit
SCHEDULE NO. 3 FIXED ASSETS
GROSS BLOCK(at cost)
Additions/
Deletions/
Transfers
during the
year
DEPRECIATION
(Straight line method)
NET BLOCK
Sl.
No Description
of Asset
As at
01-Apr-09
1 Computers
50,893,156
0 50,893,156
50,893,156
0
0
50,893,156
0
0
Total
50,893,156
0 50,893,156
50,893,156
0
0
50,893,156
0
0
Previous Year
50,893,156
0 50,893,156
50,893,156
0
0
50,893,156
0
0
As at
31-Mar-10
Upto
31-Mar-09
Transfers/
deletions
During the
year
For the
year
Upto
31-Mar-10
As at
31-Mar-10
As at
31-Mar-09
SCHEDULE NO. 4 - INVESTMENTS
Non Trade - Unquoted, Long term - at Cost
In Wholly Owned Subsidiary :
- 175,000 Equity Shares of US$ 1 each in
M/s. Kirloskar Multimedia Inc., USA
5,775,925
5,775,925
5,775,925
5,775,925
13
SCHEDULES ATTACHED TO AND FORMING A PART OF THE ACCOUNTS
FOR THE YEAR ENDED 31ST MARCH 2010
SCHEDULE NO. 5 – CURRENT ASSETS, LOANS & ADVANCES
Cash & Bank Balances
Cash on Hand
Balance with Scheduled Banks :
In Current Account
In Deposit Account
Margin Held on FBP
As at
31.03.2010
(Rs.)
As at
31.03.2009
(Rs.)
1,582
1,902
0
193,537
470,016
142
180,877
470,016
665,135
652,937
365,499
364,092
Loans & Advances
(Unsecured - Considered Good unless otherwise stated)
Advances recoverable in cash or kind or for value
to be received
Other Deposits
60,300
60,300
425,799
424,392
1,090,934
1,077,329
9,483,302
0
5,775,925
8,309,899
300
5,775,925
15,259,227
14,086,124
14,067
16,910
14,067
16,910
78,310
19,913
2,400
3,889
77,866
137,875
11,030
2,000
1,020
19,100
20
0
17,989
2,400
2,000
57,182
113,195
11,030
1,400
2,500
19,028
0
353,423
226,724
142
820,000
75
820,000
820,142
820,075
SCHEDULE NO. 6 – CURRENT LIABILITIES & PROVISIONS
Current Liabilities
Other liablilties
Provision for FBT
Provision for loss from subsidiary company
SCHEDULE NO. 7 – OTHER INCOME
Interest- Gross
SCHEDULE NO. 8 OPERATING & OTHER EXPENSES
Rates & Taxes
Printing & Stationery
Communication
Travelling & Conveyance
Legal & Professional Charges
Annual Listing Fee
Auditor’s Remuneration
AGM Expenses
Filing Fees
Postage & Courier Charges
Interest on FBT
SCHEDULE NO. 9 – BANK INTEREST & FINANCIAL CHARGES
Bank Interest & Charges
KSFC Interest
14
Notes to the Accounts for the Year Ended 31ST MARCH 2010
SCHEDULE 10 - NOTES ON ACCOUNTS
(A)
SIGNIFICANT ACCOUNTING POLICIES
i.
Accounting Conventions and Basis of Presentation for Accounting:
The Financial Statements have been prepared under the historical cost convention in accordance
with the generally accepted accounting principles in India and the provisions of the Companies
Act, 1956, and the Accounting Standards issued under the Companies (Accounting Standards)
Rules, 2006.
All income and expenditure to the extent considered receivable / payable with reasonable
certainty are accounted for on accrual basis.
ii.
Cash Flow Statement
Cash flow statement has been prepared in accordance with the indirect method prescribed in
Accounting Standard - 3 issued under the Companies (Accounting Standards) Rules, 2006 and
as required by the Securities and Exchange Board of India.
iii
Fixed Assets:
Fixed assets are stated at cost less depreciation.
iv.
Investments:
Investment in wholly-owned subsidiary is shown at cost. Provision is made for any diminution,
other than temporary in the accounts.
v.
Depreciation on Fixed Assets:
Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in
Schedule XIV to the Companies Act, 1956 as amended vide Notification No. GSR 757 (E) dated
16.12.1993 issued by the Department of Company Affairs, Government of India, New Delhi.
vi.
Revenue Recognition:
Interest income is accounted on accrual basis.
vii.
Preliminary Expenses:
Preliminary expenses are written off over a period of 10 years in equal installments.
viii. Retirement Benefits:
No provision for retirement benefits has been made as the Company does not have any
employees.
ix.
Taxes on Income:
Current Tax is determined as the amount of tax payable in respect of taxable income for the
period. Deferred tax is recognised subject to the consideration of prudence, on timing differences,
being the difference between taxable income and accounting income that originate in one
period and is capable of reversal in one or more subsequent periods.
x.
Earnings per Share (EPS):
In determining Earnings Per Share, the Company considers the net profit after tax expense.
The number of shares used in computing basic earnings per share is a weighted average
number of shares outstanding during the period. Number of shares used in computing diluted
earnings per share comprises the weighted average shares considered for deriving basic
earnings per share, and also the weighted average number of equity shares that could have
been issued on the conversion of all dilutive potential equity shares.
xi.
Prior Period, Extraordinary Items & Changes in Accounting Policies:
Prior period and extraordinary items are shown separately in the financial statements.
xii.
Contingencies and Events Occuring after the Balance Sheet date:
There are no contingencies and events occurring after the balance sheet date affecting the
financial position of the Company.
15
xiii. Provisions, Contingent Liabilities and Contingent Assets:
In preparation of accounts, the Company has made required provisions for all the liabilities,
which can be measured by using a substantial degree of estimation. The amount of Contingent
Liabilities not provided in the accounts is disclosed in the notes forming part of the accounts.
Assets in the nature of contingent assets are not recognised in the accounts.
(B)
NOTES TO ACCOUNTS
1.
Contingent Liability on account of
Current Year
Previous Year
(Rs. in Lakhs)
(Rs. in Lakhs)
Interest claimed by Central Bank of India
not acknowledged as debt by the Company
28.27
28.27
Amount claimed by Tata Finance Limited
not acknowledged as debt by the Company
7.10
7.10
Amount claimed by Income Tax Department
towards Income Tax and Interest U/s 201(1A)
and 220(2)
3.93
3.93
2.
Balances under unsecured loans, other liabilities, in deposit account with banks, margin money held
on FBP with Central Bank of India and other loans and advances are subject to confirmation wherever
applicable.
3.
The Company has made provision for interest in respect of Non-Convertible Debentures issued in
favour of Karnataka State Financial Corporation as per the sanctioned terms. The Corporation has
filed a suit against the Company for recover of the debenture redemption amount along with interest,
which the Company has contested.
4.
No provision has been made till date in respect of interest on the loan balance claimed by Central
Bank of India as the same has been contested by the Company, which is pending for settlement.
5.
No provision has been made till date in respect of the claim made by Tata Finance Limited as the
arbitration award has been challenged by the Company before the City Civil Judge, Bangalore.
6.
No provision has been made in respect of claim made by the Income Tax Department towards Income
Tax and Interest U/s 201(1A) and 220(2).
7.
There are no Micro and Small enterprises, to whom the Company owes dues, which are outstanding
for more than 45 days as at 31st March 2010. This information is required to be disclosed under the
Micro, Small and Medium Enterprises Development Act, 2006. Has been determined to the extent
such parties have been identified on the basis of information available with the Company.
8.
Managerial Remuneration: Paid/or payable during the year in respect of Directors of the Company
is Rs. NIL (Previous Year: Rs. NIL)
16
9.
Earnings / Expenditure In Foreign Currency during the year is Rs. NIL (Previous Year: Rs. NIL).
10.
Related Party Transactions: Name of the related party - Kirloskar Multimedia, Inc., - No transactions
during the year.
11.
Quantitative Details: The Company is engaged in interactive multimedia title development and
provides professional services involving skilled manpower. The development and sales of such products
cannot be expressed in any generic terms. Hence it is not possible to give quantitative details of
sales & certain information required under paragraph 3, 4C & 4D of Part II of Schedule VI of the
Companies Act, 1956.
12.
No provision has been made for taxes on income as the Company has incured losses during the year
and Deferred Tax Asset is not created in the absence of certainty of sufficient future income against
which Deffered Tax Asset can be realised.
13.
The Petition for reduction of share capital is pending before the Honourable High Court of Karnataka.
TO BE READ WITH OUR REPORT OF EVEN DATE
for Divakara & Associates
Chartered Accountants
POLALI DIVAKAR RAO
(Proprietor)
For and on behalf of the Board
SUKUMAR R. KIRLOSKAR
Chairman
AJAY S. KIRLOSKAR
Managing Director
PLACE : Bangalore
DATE : May 31, 2010
17
Balance Sheet Abstract and Company’s General Business Profile
I Registration Details
Registration No.
Balance Sheet Date
13492
31.03.2010
State Code
8
II Capital Raised during the year (Amount in Rs.)
Public Issue
Bonus Issue
Nil
Nil
Rights Issue
Private Placement
Nil
Nil
III Position of Mobilisation and Deployment of Funds (Amount in Rs.)
Source of Funds
Paid-up-Capital
Secured Loans
146,000,000
9,934,400
Unsecured Loan
Application of Funds
Net Fixed Assets
Net Current Assets
Accumulated Losses
0
-14,168,293
164,326,768
Investments
Miscellaneous Expenditure
5,775,925
0
Total Expenditure
Dividend Rate
1,173,565
Nil
Nil
IV Performance of Company (Amount in Rs.)
Turnover
Net Loss
Earning Per Share
14,067
1,159,498
-0.08
V Generic Names of the three principle products/services of company(as per monetary terms)
Item Code (ITC Code)
Product Description
8524
Development of Software/Multimedia Titles
To be read with our report of even date
For Divakara & Associates
Chartered Accountants
POLARI DIVAKAR RAO
(Proprietor)
PLACE : Bangalore
DATE : May 31, 2010
18
For and on behalf of the Board
SUKUMAR R. KIRLOSKAR
AJAY S. KIRLOSKAR
Chairman
Managing Director
CASH FLOW STATEMENT FOR THE YEAR ENDED 31.03.2010
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit/(Loss) after extra ordinary items
Adjusted for:
Depreciation
Miscellaneous Expenses
Advances/Liabilities Written off
As at
31.03.2010
As at
31.03.2009
(Rs. in Lakhs)
(Rs. in Lakhs)
(11.59)
(10.30)
0
0
Adjusted For
Trade & Other receivables
Trade payable
(0.02)
11.73
Net Flow from operating activites
B. CASH FLOW FROM INVESTING ACTIVITIES
Investment Realised
C. CASH FLOW FROM FINANCING ACTIVITIES
Increase/Decrease in Loan components
0.00
Net Increase/(Decrease in cash and
cash equivalents) ( A+B+C)
Cash and Cash equivalents (Op.Bal)
Cash and Cash equivalents (Cl.Bal)
(Proprietor)
0
0
(11.59)
(10.30)
(0.03)
10.47
11.71
10.44
0.12
0.14
0.00
0.00
0.00
0.00
0.00
0.00
0.12
6.53
6.65
For Divakara & Associates
Chartered Accountants
POLALI DIVAKAR RAO
0
0
0.00
0.14
6.39
6.53
For and on behalf of the Board
SUKUMAR R. KIRLOSKAR
AJAY S. KIRLOSKAR
Chairman
Managing Director
PLACE : Bangalore
DATE : May 31, 2010
AUDITORS’ CERTIFICATE
We have examined the attached Cash Flow Statement of Kirloskar Multimedia Limited for the period ended
31st March, 2010. The Statement has been prepared by the Company in accordance with the requirements
of listing agreements with Stock Exchanges and is based on and derived from the audited accounts of the
company for the period ended 31st March 2010.
Place
: Bangalore
DATE
: May 31, 2010
For Divakara & Associates
Chartered Accountants
Divakar
(Proprietor)
19
Statement of Subsidiary Company
KIRLOSKAR MULTIMEDIA INC - Financial Statements for the year ended 31st December, 2009
DIRECTORS’ REPORT
The Directors submit their report together with the financial statements of the Company for the period ended
31st December 2009.
BUSINESS OF THE COMPANY
During the period under review the Company has not conducted any business activity in the USA. The
Company operated a branch in London until March 31, 1996.
COUNTRY OF INCORPORATION
The Company was incorporated in USA on 30th June, 1995.
BOARD OF DIRECTORS
Mr. Ajay S. Kirloskar is the sole director of the Company.
AUDITORS
Since the Company has not conducted any business in the US during the period, the financial statements
are not required to be audited under the US Law. Hence, the auditors have not been appointed.
By order of the Board
AJAY S KIRLOSKAR
Director
Statement of Subsidiary Company (Continued)
KIRLOSKAR MULTIMEDIA INC - Financial Statements for the year ended 31st December, 2009
BALANCE SHEET AS AT 31ST DECEMBER, 2009
As at 31.12.2009
US$
As at 31.12.2008
US$
PROFIT & LOSS ACCOUNT (LOSS)
$175,000
$175,000
TOTAL
FINANCED BY
EQUITY
$175,000
$175,000
$175,000
$175,000
TOTAL
$175,000
$175,000
FIXED ASSETS
CURRENT ASSETS
LESS:CURRENT LIABILITIES
for KIRLOSKAR MULTIMEDIA, INC.
AJAY S. KIRLOSKAR
Director
REGISTERED OFFICE
C/o. 650 Page Mill Road
Palp Alto, CA 94304-1050, USA
20
KIRLOSKAR MULTIMEDIA LIMITED
Regd. Off : Kempapura, HAF Post
BANGALORE - 560 024
ATTENDANCE SLIP
THIS ATTENDANCE SLIP DULY FILLED-IN IS TO BE HANDED OVER AT
THE ENTRANCE OF THE MEETING HALL
Name of the attending Member
(In Block Letters)
Member’s Folio Number/
ID No.
No. of shares held
Name of Proxy
(in Block Letters, to be filled-in if the proxy attends instead of the member)
I hereby record my presence at the EIGHTEENTH ANNUAL GENERAL MEETING to be held at 2.00 P. M.
on Thursday, the 30th September, 2010 at All India RMS & MMS Union Hall, 849/4, A Block, Sahakaranagar,
Bangalore - 560 092.
Place
DATE
: Bangalore
: September 30, 2010
.............................................
Member’s/Proxy’s Signature
KIRLOSKAR MULTIMEDIA LIMITED
PROXY FORM
Regd. Off : Kempapura, HAF Post
BANGALORE - 560 024
I/We
of
in the district of
being a member/members of the above named Company, hereby appoint
of
or failing him/her
in the district of
of in the district of
as my/our Proxy in my/our absence to attend and vote for me/us on my/our behalf at the Fourteenth Annual
General Meeting of the Company to be held at 2.00 P. M. on Friday, the 30th September, 2010 at All India
RMS & MMS Union Hall, 849/4, A Block, Sahakaranagar, Bangalore - 560 092.
Signed this day the .....................................................2010
Affix Stamp
Note
1. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote on poll instead
of himself and such proxy need not be a member.
2. Stamp should be affixed at the place provided for the signature affixed by the member/members.
3. The proxy Form thus completed be deposited at the Registered Office of the Company, not less than 48
hours before the time for holding the meeting.