Decisions taken in AGM of Saket CHS Ltd. dated 27 Sept. 2015

Important decisions taken in todays AGM: 

1) The members accounts to be suitably rectified.
2) The Balance sheet to be amended by writing down the Reserves and Surplus A/c 
3) A new Society Development Fund to be constituted w.e.f. October 1, 2015 and the new incoming member to contribute ₹ 25,000/- towards it in addition to the Transfer Premium w.e.f. October1, 2015 
4) Interest on over due outstanding raised from 15% to 21% w.e.f. October 1, 2015 
5) Sec 101 notices to be sent to top 10 defaulters. 
6) Corrected accounts in be submitted by November 15, 2015. 
7) New auditor to be appointed after accounts are rectified.

Minutes of the 16^th Annual GeneralMeeting of Saket CHSL held on

September 10, 2015 at 10:30am in Society Office.

The Chairman adjourned the meeting at 10.30 am due to lack of quorum and reconvened it at 11.00 am.
The Chairman welcomed the members and read out the Leave of absence – Hemant Hajare, Manubhai Shah, Bhartesh Shetty, Gautam Mazumdar - and granted the same.
The Chairman then requested members to stand up and observe a minutes silence as obeisance and prayer in memory of those members and /or their relatives who had left us for their heavenly abode since the last meeting.

Agenda 1: To read and approve the minutes of last AGM held on 28^th September, 2014.

The Chairman then requested the Secretary to read out the minutes of last year's AGM.
The Secretary read out the minutes and put them up for approval.

Resolution 1.
Resolved that the minutes of the 15th AGM were passed and adopted.
Proposed by: Mr. SN Viswanathan
Seconded by : Mr. Prasad Bedekar

The Chairman then requested the Secretary to start the proceedings with Agenda no.2.

Agenda no. 2: To inform members the status of Income & Expenditure Accounts for the period 01.04.2014 to 31.03.2015 and accounts as on 31.03.2015.

The Secretary Mr. Bipin Kulkarni outlined the motive of the meeting and explained to members the Secretary's report in detail.
He informed members that the new Managing Committee has not approved the audited accounts submitted by our auditors for the financial year April 1, 2014 to March 31, 2015.

Mr. Kulkarni stated that the financial health of the society is absolutely hand to mouth and year on year we are facing losses on account of short receipt of contribution to routine maintenance, and then the same is being subsidized by other income and the repair fund generated by the society.

He added that one of the main reasons for this is that the Society Maintenance charges were last revised in the year 2009. Inflation and costs of every item has gone up since then but our maintenance charges remain the same even today.

Stating that our complex is more than 20 years old, the frequency of repairs and maintenance had increased and the costs rising every year, Mr. Kulkarni said that the electricity tariffs increase every year. The salaries and wages, (though ours are abysmally low) have to be revised every year. The cost of security has increased from a budgeted Rs. 16 lakhs per annum to Rs. 30 lakhs per annum in the past 6 years. The lifts in our buildings have become old and need repairs every now and then.

To sustain all this in an annual income of Rs. 87 lakhs is becoming increasingly difficult and the society management is hard pressed to deficit finance the day to day running of the society. A case in point is that in the year under purview, the Society could invest only Rs. 50,000/- in Fixed Deposits against the required Rs. 6.89 lakhs towards Sinking Fund and none against the required Rs. 20.69 lakhs towards Repair Fund – because all the money was spent on the society’s day to day maintenance. This has been the trend for the past three years and it has now become imperative that the society revise its maintenance charges adequately or else, it will be extremely difficult to run the show.

Reasons for the Managing Committee not accepting the Audited Accounts.

The Chairman Mr. Dayanand Nene then pointed out that for the past 6 years, all the Secretary’s report carried a standard point no. 3 which read as under:

(Quote): As per our knowledge the reconciliation of Members Accounts has never been documented and therefore will have to be done with retrospective effect from the very inception of the society i.e. from 1999. This being a long drawn and tedious affair will have to be entrusted to an outside agency as attempts to do it in house have failed. A decision on the same is being contemplated and will be taken shortly. (Unquote.)

The same paragraph has been repeated again and again but no action has been taken by the past committee.

Similarly, the Auditors notes to the accounts have carried this remark for the past 6 years: (Quote): Balance in member dues is as per books of account and no confirmation of balance from each member has been obtained. (Unquote).

In spite of the Auditor repeatedly passing such remark, no attempt was made to tally the members accounts as appearing in the books of accounts with those appearing in the manual registers maintained by the society office.

The result was that for the past 6 years at least, we have been approving accounts which are fallacious.

This year also the Auditor had remarked that the member’s personal accounts as appearing in the Books of Accounts are differing from the one’s appearing in the manual registers maintained by the society.

This remark made the committee look up as to how much was the difference between both the accounts – the books of accounts and the manual registers. And the picture which emerged was indeed very alarming – the Books of Accounts showed that the receivables from members was Rs. 35 lakhs as on March 31, 2015 while the society’s manual registers showed that the figure was Rs. 16 lakhs.

We then looked at the figures of the past year and found that the figures were differing there also. In the accounts for the year 2013-2014, the audited figures show NET Members Dues (Gross Dues less Advance payment of members) of Rs. 16.46 lakhs. Our manual records show the Gross Dues as Rs. 15.41 lakhs and a Advance payment by members of Rs. 3.57 lakhs (so NET Rs. 11.84 lakhs).

Actually this practice of showing the Net Outstanding is a bad accounting practice as it gives a mis-leading picture of the actual money due from members.

Mr. Nene added that the Managing Committee had a discussion with the Auditors on the subject and he opined that we may approve the accounts this year and next year we will make the requisite correction.

Mr. Nene stated that as our committee felt that since this was our first year, we should make all corrections now only and not carry any on with false and fallacious accounts. It is our committee’s view that since our member’s bills are generated on the basis of the manual registers maintained by us in the office, and since in the past 10 years, no one has challenged those figures, the manual registers should be treated as the correct position and after due verification, the Books of Accounts should be corrected accordingly.

Mr. Nene stated that there was another point on which the committee differed with the Auditors – the treatment given to the Balance Sheet.

In the Balance sheet, the Reserves and Surplus shows an amount of Rs. 2.73 crores while our actual investments were only 1.43 crores.

What has happened is that the monies have been spent over the year’s on society’s expenses e.g. since the year 2000, there have been atleast 477 first transfers of flats. It means that the society would have generated at least 1.2 crores as Transfer Premium. Where has the money gone ?

He explained that during the period 2001 - 2003, the society had done a Repairs and Renovation program. The society had then collected Rs. 52 lakhs from members as contribution towards the repairs. The actual expenditure of that program was 1.92 crores. The balance was funded through the Transfer Premium and Sinking Fund.

Mr. Nene further stated that it was our committee’s view was that as the amounts have been spent on society buildings, instead of repeatedly harping that there is a loss of Rs. 110 lakhs over the years, the Reserves and Surplus should be written down by setting off the loss of Rs. 110 lakhs against it as the amounts have already been spent on the society only.

But we shall require the sanction of the General Body to do this and rectify the accounts so that they reflect a realistic picture.

Else, if we have to recoup the loss, as suggested by the Auditor, it will mean that all members should make a one time payment of Rs. 16,500/- only to recoup the loss.

The committee leaves it to the wisdom of the members as to which option they want to select. Write down the Reserves and Surplus or recoup the loss by making a one time payment of Rs. 16,500/-. The committee will implement whatever mandate is given to it.

These were the two main reasons why your committee has not approved of the Audited Accounts.

Mr. Bipin Kulkarni, Secretary then stated that the committee is not commenting on the Income and Expenditure Accounts and Receipts and Payments and is presenting them here as given by the Auditors.

He added that our only observation of the Income and Expenditure Account is that the huge loss of Rs. 24 lakhs means that we will have to revise our Maintenance Charges immediately. Your committee is seized of the matter and shall be calling a separate SGM for the same very shortly.

Mr. Ashim Dasgupta : spoke on the methodology as to how to go about reconciling the accounts. He suggested that the society must prepare a manual for all activities and it should be followed scrupulously.

Mr. Marzi Pakka : Said that the suggestion to contribute Rs. 16500/- one time and recoup the losses was a good one and he was in favour of it.

Mr. SN Viswanathan: Cautioned the committee as to whether the Registrar will give them permission to write off such huge amount and suggested that we do it only if the bye laws permit us.

Mr. Shivram said that reconciliation of the Manual as well as the computerized accounts must be done to arrive at the correct picture.

Mr. Amit Pandya suggested that the work should be given to an independent agency and must be completed in a time bound manner.

Mr. Nene then informed the house that he had informed the Dy. Registrar and kept him in the loop.

Mr. Shirsath, Mr Kamalraj Dev, Mr DN Sawai, Mr. Sunil Shinde also participated in the debate/discussion.

Mr. Pakka then questioned the role of the current Treasurer wwho was the Jt. Treasurer in the past committee and asked as to why he could not identify the anomaly in accounts then?

Mr. Pakka also questioned as to why the Secretary’s report has stated that no information was available regarding the member’s attendance in MC meetings?

The Secretary Bipin Kulkarni then replied that this committee did not want to embarrass the old committee and hence was being discreet about many matters but the fact was that this committee does not have the record as the old committee had not given proper charge while hand over. This committee had submitted a list to the old committee of things to be handed over but did not receive any response from them.

Amit Pandya: What has the auditor said on this ? Has he passed any remarks ?

The Chairman Dayanand Nene informed that the auditor has never passed proper observations. As per the bye laws one MC meeting should be held every month. That makes 12 meetings in a year. For 5 years, the past committee held only 10 meetings in a year, But no remark. The past committee did not co-opt anybody to fill vacancies on the Managing Committee – when it is mandatory, yet no observations or remarks. It is stated in the bye laws that if a person absents himself from 3 consecutive MC meetings he ceases to be a member of the Managing Committee. The old committee flouted that norm for 5 years, it was put in their yearly reports, yet the Auditor overlooked it.

The Chairman then said that this committee had actually put its hand in a garbage bin by deciding to rectify the accounts but are doing it so that once and for all we shall have a clean slate.

The proposal to rectify the accounts and represent them to the General Body for passing the same was then put up for acceptance.

Resolution 2.

‘Resolved that in view of the grave differences in the members accounts in the Computerised vi-a-vis manual accounts, the accounts must be reconciled and rectified accordingly and then presented to members for passing’.

Proposed by : Mr. Amit Pandya

Seconded by: Mr. Chanchal Chatterjee

Passed unanimously.

Resolution 3.

It was also resolved to correct the Balance Sheet by taking appropriate action to rectify and that the loss accumulated over the years be correctly quantified post rectification and the written off / reserves written down.

Proposed by : Mr R K Salve

Seconded by : Mr D N Sawai.

Passed unanimously.

Any other matters with the permission of the Chair.

1)    The Chairman admitted a proposal of Mr. Shine Raj to increase society’s revenue.

Mr. Shine Raj : Stated that the society has to find out ways and means to increase its revenue in view of the loss incurred every year. He suggested that the Society Development Fund and charge any new incoming member a sum of Rs. 25,000/- along with the Transfer Premium.

Mr. Prasad Bedekar and Mr. Ashim Dasgupta participated in the discussion.

The Chairman stated that he agreed with Mr. Shine Raj’s suggestion of charging Rs. 25,000/- as Society Development Fund from the new incoming member.

Resolution 4.

It was resolved that a sum of Rs. 25,000/- be charged as Society Development Fund from the new incoming member along with the Transfer Premium, w.e.f. 1/10/2015.

Proposed by : Mr. Shine Raj

Seconded by : Mr. R K Salve

Passed by majority vote with Mr. Pakka objecting to the proposal.

2)    Defaulters:

The Secretary Bipin Kulkarni informed the members the status on recovery from defaulters. He suggested that the byelaws permit the society to charge 21% as penal interest. Currently, we are charging them 15% and proposed to raise it to 21%.

Mr. Hate suggested that the society should launch cases under Section 101 on defaulters. Adv RR Abhyankar, Ashim Dasgupta, Sunil Shinde supported him.

Mr. Pakka objected to the proposal stating that such proposals should not be entertained as they were not part of the agenda. The Chairman over-ruled him by stating that it was in the interest of the society.

Resolution 5.

It was then resolved that the society shall charge penal interest of 21% from defaulters w.e.f. 1/10/2015.

Proposed by: Asif Dabir

Seconded by : Ashim Dasgupta.

Passed by majority vote with Mr. Pakka dissenting.

Resolution 6.

It was resolved that the society shall launch cases of recovery under Section 101 on the top 10 defaulters.

Proposed by: Mr. Arvind Hate

Seconded by: Prasad Bedekar.

Passed unanimously.

3)    Auditors appointment.

Mr. Prasad Bedekar suggested that in view of the glaring omissions by the current auditor, the society should change him and appoint a new auditor. Mr. Ashim Dasgupta, Mr. Sunil Doshi took part in the discussion.

The Chairman informed them that we need the services of the current auditor to reconcile the accounts and shall take an appropriate decision once the rectification is completed.

4)    Energy Audit.

Mr. Vijay Kokane, Jt. Secretary, informed members about the Evergy audit done for the first time in the society.

The Chairman concluded the meeting as the agenda was over.

The meeting ended with chanting of the National Anthem.

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Minutes of the Annual General Meeting held in Society Club House on September 28, 2014.        

The AGM Of Saket CHSL was held at the Club House today morning. I am giving the gist of what happened for those who have not attended. I shall be breaking message per topic so each message becomes small and people don't miss a point.

1. The attendance was pathetic with hardly 50 members attending the AGM.

2. The Society accounts were tabled by the Chairman. Many members participated in the discussion.

3. Members wanted to know who were defaulters and urged that their names be displayed on notice boards. The Chairman tried to reason that some members may have temporary financial problems and it would not be nice to embarrass them. But many members present insisted and it was decided to display list of defaulters every quarter.

4. On the discussion on the accounts, Mr. Vishwanathan, Mishra had sent queries to which the Chairman answered that they will be answered subsequently.

5. Mr Nene pointed out mistakes in the accounts which the Chairman accepted and apologized and stated that due correction will be made. Mr. Pakka also pointed out some mistakes which were accepted.

6. Mr Nene pointed out certain entries in the accounts like the Wescon dues of Rs 4.29 lacs and Property tax receivable from members Rs 4.23 lacs - in Current assets and Rs 4.14 lacs payable to members shown as Current Liabilities. He explained the background of these entries which were non recoverable and suggested that the society should write off/back them. After deliberations, it was decided to write off/back these entries.

7. Pending rectification of all mistakes in the accounts, the Accounts were adopted and passed.

8. On the issue of appointment of Statutory Auditors for the current financial year, Mr Nene questioned the logic in changing the auditors last year from a CA to an unknown GCA. The Chairman replied why it was done and proposed to reappoint Mr Tupe as auditors and it was agreed.

9. The issue of increase in maintenance was discussed and it wasn't decided to appoint a committee to study the issue and give recommendations in a months time after which an SGM be called to take a decision.

10. A lot of discussion took place on the issue of Security and whether it was worth spending ₹ 30 lakhs on the same. Suggestions like installation of CCTV cameras and closing of gates came up. M/s Gopal Iyer, Khanvilkar, Adhikari, Chatterjee, Nene, Shinde, Mishra etc participated in the discussion. It was decided to have a separate meeting to address the issue.

11. Mr Gopal Iyer pointed out the issue regarding issuing of transport passes to Towers members. There were heated arguments for and against. Finally it was decided to honor the current commitment made by the MC and discontinue passes to Towers people afterwards.

12. Mr Nene raised the issue of OC and informed about the TMC amnesty scheme. Mr Upasani also elaborated on the need for the OC. A Madam working with TMC, whose name I cannot recollect now also informed that TMC was in process of making changes to the property tax structure and unless we apply for OC there was danger of our society declared as unauthorised. Mr Khanvilkar suggested that since there is a deadline of December 31, applying for OC should be top priority and a committee be set up to address the issue in a time bound period. Mr Upasani also recommended the same. M/s Swami, Gopal Iyer, Chatterjee and others also opined on similar lines and it was decided to appoint a committee to address the issue of OC.

The meeting ended with chanting of national anthem.

This is a gist. Detailed minutes will be circulated by society later.

For information of all members who absent themselves from General Body meetings, the new model byelaws provide that a member who has not attended at least one AGM in 5 years shall be termed as a " dormant member" and he cannot contest or vote in society elections. 

Thank you.

Dayanand Nene

A7/303.