DRAFT MINUTES OF THE AGM HELD ON 30TH SEPTEMBER 2017

DATE: 27/2 /2018

SAKET CHS LTD, THANE

DRAFT MINUTES OF THE AGM HELD ON 30^TH SEPTEMBER 2017

Due to lack of quorum at 10 am, the Chairman Mr. Hemant Hajare adjourned the AGM for half an hour and then reconvened it at 10.30 am.

Before the Chairman could start the meeting, Mr. S D Jayawant raised a point of order. He stated that the meeting was invalid because as per byelaws, the Auditors Report have to be signed before the notice of the meeting is put up. Here, the Auditor’s Report was signed on September 21, 2017 while the AGM notice was put up on September 15, 2017.

The Chairman overruled the objections and started the meeting. In the beginning, the members observed a minute silence in memory of those members who had departed from us since the last meeting and also those killed in the Elphinstone Road Station stampede.

Thereafter, the Chairman welcomed the members to the meeting. He gave the members a brief introduction about the intention of the meeting and informed them that the accounts were finalised with the help of Mr. Pradeep Gupta. He then asked the Secretary to start the proceedings.

The Secretary Mr. Dilip Kankale read out the Agenda of the meeting and the following was taken up for discussion.

I)                 To Read and approve the minutes of the last AGM held on the 25^th Sept, 2016(Adjourned) and Reconvened on 16^th Oct, 2016.

The Secretary informed the members that the minutes were circulated to all members and presumed that everyone would have read them. He then queried that if people had no observations regarding the same, then the minutes could be passed.

Mr. Jayawant raised an objection that the minutes did not include the following suggestions made by him – (1) Parking allotment was done out of turn of the Waiting list and a answer should be given why, (2) More than 2 vehicles are parked in some parking areas, and, (3) Why was the Parking Waiting list not put up on notice boards. He insisted that these 3 points be included in the minutes before they are passed.

Mr. Jayawant pointed out that as per the byelaws, the draft minutes have to be prepared within 3 months of the concluded AGM and circulated to members for their observations. Then, on receipt of the observations, the Secretary should suitably incorporate them in the minutes and then place the final draft in the next MC meeting for approval and finalisation and then distributed to all the members. He criticised that this procedure was not being followed by the committee.

Mr. Dayanand Nene said the minutes should be prepared in time and circulated in a proper manner. He added that he had written 2 letters to the Managing Committee raising objections about the minutes that they did not include his observations. The letters were not replied nor were his observations incorporated in the minutes. He also insisted that the minutes cannot be passed.

Mr. Shasi Nair inquired whether the minutes can be passed subject to corrections but Mr. Jayawant and Mr. Pradeep Gupta objected.

Mr. Nene pointed out that if the minutes are not confirmed [passed] then every decision taken in that AGM would become infructuous till the minutes are passed.

It was unanimously decided that the Minutes of the AGM dated Sept. 25 and October 16, 2016 be corrected and then represented for passing. The Secretary promised to amend the minutes and present them to members as early as possible.

The Secretary then moved to the next subject on the agenda.

II) To receive, consider and adopt the audited accounts for the financial year 1^st April, 2016 to 31^st March, 2017

Mr. Pradeep Gupta started the discussion explaining his role in assisting the Committee in preparing the accounts. But he pointed out that the Receipts and Payments statement was not there in the Secretary’s Report and as such how can they discuss the accounts.

Mr. Jayawant intervened and stated that the house should only receive and consider the accounts but not adopt them – as in view of the heavy qualifications made by the Auditor, if they adopt the accounts, the Committee will treat them as passed.

The Secretary asked the Treasurer Mr. Anil Ghodke to explain the accounts. Mr. Ghodke stated that the accounts were ready in May 2017 itself but the Committee purposely delayed the finalisation as they wanted to remove all lacunae from it and clean them up. He stated that now the accounts are perfect.

Mr. Nene opined that the Committee had not given the Audit Rectification Report for the past year. The Auditor has commented on it. He stated that the accounts are faulty and should not be approved with any ‘subject to’.

Mr. Ghodke stated that just because the Audit Rectification Report was not filed last year does not mean that it will happen again.

Mr. Nene stated that post the last year’s AGM conclusion, Mr. Pradeep Gupta had informed him that they would meet him to together rectify all discrepancies in the accounts. He stated that till today, the said meeting has not happened.

 Mr. Pakka said that in the interim period from May to September, the Secretary should have given clarifications about the qualifications and objections of the Auditor and included them in his Secretary’s Report.

Mr. Shasi Nair replied though the Accounts were ready in May, the Managing Committee wanted to rectify all mistakes in the accounts and put systems in place and hence they had invited the Auditor and asked him to give all his observations fearlessly and harshly without camaflouging anything.

The Treasurer Mr. Anil Ghodke then introduced the Auditor Mr. A.A. Mohare and stated that he will reply to members questions on accounts.

Mr. Nene stated that the Auditor was an outsider and he won’t reply to our queries. He told Mr. Ghodke that as a Treasurer he should reply to all questions on accounts.

Mr. Anil Ghodke: Auditor is part of our Account work now and he knows the summary of our accounts.

Mr. Gopal Iyer: Auditors should be an independent body he should present his audited report independently.

Mr. Gopalkrishanan Iyer concurred with Mr. Gopal Iyer. Mr. Nene then asked the Treasurer to explain how they had finalised the accounts.

Mr. Anil Ghodke replied that actual finalisation of accounts was completed on 25^th May but we decided to utilise the time available to correct discrepancies in the accounts. The Committee had also sought advice from the auditor to help out even at administrative level, he added.

He further informed that Committee members went to every defaulter’s house for maintenance collection. We have also put defaulter list on the notice boards. He added that the Committee had collected appx. Rs. 19 lakhs from most of the defaulters, which was well received by the members present.

Mr. Shivram questioned whether all systems were perfect. He asked how has the committee distributed workload amongst them. He criticised the Committee for the Rs. 46 lakhs spent on repair and maintenance, without proper approvals and sanctions and asked do committee members have the power to spend such moneys?

Mr. Shivram also raised the issue of Conflict of Interest in work allotted to members and office bearers and stated that as per the byelaws, no member of the Committee, directly or indirectly undertake any work in the society or else, he should not stay on the committee. He pointed out to the observation of the Auditor on point no. 13 of his Qualified Report with special reference to Byelaws no.156 and 157.

Mr. Gopal Iyer pointed out to various discrepancies in the accounts and questioned that if the accounts were ready in May 2017, what the Committee was doing for 4 months. He pointed out that in the past year the Committee had spent Rs. 46 lakhs on Repairs and Maintenance, which was a rise of over 250% on the year prior to that ( Rs. 13 lakhs).

Continuing the discussion, Mr. Chary congratulated the committee for reduction in the MSEDC bill; He suggested that the Committee should display the Income & Expenditure expenses on the notice board every month or quarterly, in that way members can get clear detail of the expenses. For any big repair expenditure the committee should take the approval of the AGM. In the Agenda the Budget is not included. What is the status of the FDs in the Bank. Management has changed the security without any notice about the new security agency. Also all gates were closed suddenly and members had to face problems early in the morning, as vendors were allowed to enter from certain gates. Procedure should be followed in a systematic manner. Circular should be put on the notice before any steps are taken by the Managing Committee.

Mr Chary stated that a figure of 4,23,000/- reflected in the balance sheet (to be recovered from Wescon property) and Rs. 4.14 lakhs payable to members, were written off at the time of Mr. Nene, approval was also taken in the AGM. He asked the Committee to give details about the legal cases pending against Wescon and what is the status of OC?

Mrs. Viji Iyer stated that why every year the Office bearers are changed? We don’t know the actual status of the work going in the society. Every year new rules and regulations are introduced.

Mr. Durga Misra inquired if the rotation of office bearers is permitted as per bye-laws?

Mr. Dayanand Nene then spoke in detail on the discrepancies in the accounts and stated that the accounts were wrong and faulty. He criticised the Office bearers for wasting Rs. 90,000/- of the society on Kaustubh and Co. (for writing accounts) and urged that efforts should be made to recover the amount. He stated that the Members’ dues shown as Rs. 36 lakhs in the Accounts were wrong and they would not exceed Rs. 25 lakhs.

Mr. Nene questioned how the amount of Rs. 7 lakhs was written off without giving any details. He stated that the Audit was not done properly and cited examples for the same – the Auditor, inspite of writing to him has failed to mention that the Society had failed to hold the mandatory SGM in February before Municipal Elections, inspite of a Govt. Directive that such remark should be mentioned in the Report.

Mr. Nene stated that contrary to what was mentioned in the Audit Report, the society had adopted the Model Byelaws in the last year’s AGM and that the same was also minuted and records are available in the society office. He pointed out that it was surprising that no mention is made of the Repair Fund in the Auditors Report and Accounts and even the Opening Balance of the Fund was not reflected. He pointed out that the society collects Rs. 0.45 ps psq every month as Repair Fund – a healthy Rs. 28 lakhs is gathered every year.

Mr. Nene criticised that interest on FD’s was shown as Revenue Income in the Income and Expenditure account – which was a wrong practice. He informed that even the Auditor has commented on this in his report, thus vindicating him.

Mr. Nene pointed out that in last year’s Income & Expenditure account, excess of income over expenditure was shown as Rs. 1.50 lakhs while this year, the same has been changed to Rs. 7.41 lakhs. He questioned how and why it was done.

Then, Mr. Nene pointed out to discrepancies – according to him – in the Auditor’s qualified report. He challenged the remarks that the society has no records of anything in the office. Mr. Nene answered the Auditor’s observation regarding Cash in Hand as on March 2017. He stated that the Auditors blanket remark that FDs are not earmarked against specific funds was wrong – and mentioned that had the Audit been done properly, he would have seen the markings on the FDs done by the Banks.

After Mr. Nene, Mr. Shasi Nair started replying to the points raised by Mr. Shivram and Mr. Chary. He informed that the Committee had not broken any FDs in the year under purview. Then he proceeded to reply to the questions regarding details of the Rs. 46 lakhs spent on Repairs and Maintenance. At this point Mr. Gopalkrishnan Iyer intervened and stated that the particular information was already there in the Secretary’s Report. Mr. Shivram stated that the members were concerned whether there were proper checks and balances to ensure that society’s interest were protected.

Mr. Pradeep Gupta then intervened and in the discussion and stated that there was no proper system in place. He informed that 3 Committee members had not paid their maintenance dues on time. He cited that a payment of Rs. 84,000/- was made to lift debris from the society – which belonged to a Contractor who was member of the Managing Committee. He stated that there was no proper method of entering into Contracts and cited Pest Control and CCTV contracts as an example. He informed that he had objected to the releasing of payment to our past auditor Mr. Sanjay Tupe but the committee did not listen,

He informed that the society has never tried to recover Bank Charges of cheques from members which had bounced. He informed that proper and timely bills are not sent to ICICI Bank for their ATM rent. He also informed that money is lying idle in the society savings account as it is not converted into FDs on time and society has been losing interest.

 Mr. Pradeep Gupta criticised that in no MC meetings minutes, he has seen any discussions on accounts, expenditure being incurred or sanctions ever sought. He demanded that the rebate given to members for early payment of maintenance should be stopped.

Mr. Gupta questioned as to why the Structural Audit Report of Neotech has yet not been distributed? For future improvement, he suggested that henceforth no big expenses be made without the permission of the General Body and a 5 member committee be formed to scrutinise and ensure the proper functioning of the Managing Committee.

After this, Mr. Pakka and Mr. Viswanathan took part in the debate. Mr. Pakka sought information about the treatment given to certain aspects of the accounts. Mr. Viswanathan criticised the Managing Committee for holding the meeting on the last permissible day. He said that the Managing Committee has been thoroughly exposed as inefficient. He also criticised the profit shown in the Balance Sheet as fictiticious.

After the lengthy debate, the Auditor Mr. Amit Mohare addressed the meeting.

Mr. A.A. Mohare: ( Salient points are as under)

1)      He had given a qualified report which is a completely negative report.

2)     He did not get / find any proper records or books of accounts in the society.

3)     He informed that his audit was delayed beyond July 31^st, 2017 because he did not get any information from the society on time.

4)     He said that there is no Opening Balance available to him to start his work and the society had not done the Bank reconciliation required.

5)     He stated that the society has not properly maintained the minutes of the AGM and Managing committee meetings.

6)     He informed that the method of rotation of office bearers was wrong and it should have been done with consent of the Election Officer.

7)     He further informed that though the society had adopted the new byelaws last year, the same had become infructuous as they were not submitted to the Registrar and a order obtained within 2 month of passing them.

8)    He then informed that his Special Report was a serious thing exposing faults in the functioning of the society. However, these faults can be rectified in 3 months from the date of the Audit Report, as per provisions of the MCS Act by submitting an Audit Rectification Report.

9)     He underlined the importance of maintaining records properly, because as per the MCS Act, societies have to keep records permanently.

10)   He then pointed out the serious lacunae’s in the functioning of the society.

11)  The write off of Rs. 7 lakhs without any supporting was incorrect.

12) Spending of Rs. 46 lakhs without sanctions and approvals of the General Body and Managing Committee meetings was a total violation of all laws, byelaws and the MCS act.

13)  He stated that he had pointed out 13 points to be rectified by the society in a systematic manner, in his A/B/C phased Audit Report.

14) He mentioned that the Tally balances and Manual books are not matching. So accordingly there was difference in the members account.

15)  Proper Inwards & outward register should be maintained for assets and they should be checked periodically.

16) The FD investments and their classification has to match with the Funds Register.

17)  Society should have its own IT return login ID, which is missing. Income Tax returns and other mandatory returns are not filed properly. The society had hired a tax professional to file the returns paying a huge fee, but, then too, income tax department has levied huge penalty with interest.

18) Society committee members should study and amend the Bye-Law for repairs and maintenance related expenses.

19) As per model Bye-Law each share capital should be of Rs.10/- for every member. A separate sub-committee should be formed to distribute the share certificate and verify the documentation.

20)                         The Co-operative Act should be followed by the society. We have to conduct cooperative educational seminars for the society to work properly. Educational training is compulsory for society member as per the MCS act..

21)  GST is applicable for society @18% on liability & 24% will be interest on liability if there is a delay. Society should start the process of getting the GST as early as possible from the professional firm.

22)In case of any breaches regarding submission of mandatory documents by society, the Committee can be dismissed by the Registrar and such dismissed members shall not be able to contest elections anywhere in Maharashtra.

The members then inquired what to do with the accounts, in view of the heavy qualifications by the Auditor.

Mr. Nene suggested  that we should rectify the accounts first and then call for a fresh meeting to adopt the accounts, in view of past experience when ‘ subject to’ has never been adhered to by any committee.

Mr. Mohare stated that as the society was on the last day of the time to hold the meeting, if the meeting was adjourned without adopting the accounts, the society would lose its right of appointing an auditor of their choice.

He suggested that the members adopt the accounts and rectify them within 3 months and hold a SGM again to ratify the rectification. Everyone agreed.

The Secretary then moved a resolution that the accounts for the financial year 2016-17 were adopted. Proposed by Mr. S. Jayawant, Seconded by Mr. M.K Pakka.

Mr. Nene asked for a division of votes. 20 people voted for the resolution, 4 against ( Mr. Nene, Shivram, Prasad Bedekar and Mrs. Rasika Bedekar) and 1 abstained ( Mr. Viswanathan).
The Resolution was approved by majority votes.

III) To appoint the statutory auditor for the financial year 1^st April, 2017 to 31^st March, 2018

Mr. Nene informed that he had proposed the name of M/s. SS Patwardhan & Co. as Auditors. However, they have withdrawn their name in favour of M/s. AA Mohare.

It was then resolved that Mr. A.A. Mohare be appointed as the statutory auditor for the financial year 1^st April, 2017 to 31^st March, 2018.

Proposed by Mr. SN Vishwanthan, Seconded by Mr. Shine Raj
Approved unanimously.

IV) To brief members about the changes of Transport contractor.

This point was not discussed due to the lack of time.

The meeting ended with a vote of thanks to the chair and chanting of the National Anthem.

For Saket CHS LTD.

Dilip Kankale
Hon. Secretary