PAL Credit & Capital Limited (The Company) (formerly known as PAL Hire Purchase Limited) was promoted in 1962 by the Premier Limited (formerly known as The Premier Automobiles Limited) for financing the vehicles manufactured by Premier under hire purchase scheme. The Company was wholly owned subsidiary of Premier till 1992. Consequent upon the public issue of Fully Convertible Debentures of Rs.8.25 crores in December, 1992, its shares were listed on Bombay Stock Exchange. Thus, it became a listed Company. It was then also decided to expand the activities of the Company for financing all makes of vehicles, plant & equipments etc and intensified its Lease Business. In 1995, the Company made a Right Issue of Cumulative Preference Shares of Rs.17.50 crores, which got converted into equity shares at par in 1996.
Upon raising financial resources through right issue besides providing finance for all makes of vehicles, the Company engaged in a wide spectrum of activities like Equipment Leasing, Bill Discounting, Merchant Banking, Securities Trading etc.
The financial institutions and foreign Bank as also Private Banks having an access to low cost funds entered into retail car financing led to a cut throat competition. The Company like many other NBFCs had to face rough weather. The Banks / Financial Institutions also were shy of providing additional funds especially after July 1999.
Thus, on account of drying up of working capital, carrying high interest cost, coupled with stiff competition from financial institutions, foreign banks and private sector Banks, the Company had no alternative but to suspend the fresh business activities from 1999.
Besides, various corporate(s), to which lease finance was provided, became sick and the Company therefore was unable to recover its dues from these Companies. These bad advances resulted into gradual erosion of Company's entire net worth. The Company has not entered into any further material transaction after 1999.
In spite of all adversities, the Company has been able to maintain its status as "going concern." Its shares continue to be listed on Bombay Stock Exchange. It also has valid registration as NBFC with RBI.
Company is not accepting Fixed Deposits from public and accordingly Company has got its RBI Registration converted as Category 'B' Company, i.e. Non Deposit Accepting Company.
Company had dues to Financial Institution / Banks. Over a period of time, OTS was arrived at with each of them and paid from the funds raised by disposal of the assets of the Company. At present Company has no borrowing from any Bank or financial Institution or other liability and Company is Debt Free.
At the 50th Annual General Meeting of the Members of the company held on 26th September, 2012 the Scheme of Reduction of Capital was approved. As per the scheme, face value of Equity Share was to be reduced from Rs. 10 per share to Re. 1 per share and Rs. 9 per share was to be cancelled and adjusted against accumulated losses. In addition Capital Reserve of Rs.4,99,83,201.34 and Share Premium of Rs. 2,67,57,601.11 total amounting Rs. 7,67,40,802.45 were also to be adjusted against accumulated losses. After obtaining 'No Objection Certificate' from Bombay stock Exchange (BSE) the Company Petition was filed with the High Court, Bombay and the same is approved by the Hon'ble High Court, Bombay and the orders of the Court dated 9th May, 2013 and 18th June, 2013 is registered with the Registrar of Companies, Mumbai on 17th July, 2013. The same is incorporated and inserted in the Books of Accounts on 29th July, 2013. With this, Paid up Share Capital of the company is reduced from Rs. 21,60,02,560/- divided into 2,16,00,256 equity shares of Rs. 10/- each to Rs. 2,16,00,256 divided into 2,16,00,256 equity shares of Rs. 1/- each on 29th July, 2013. Paid Up Share Capital of the Company of Rs. 19,44,02,304.00 is cancelled. Cancelled Paid up Share Capital, Capital Reserve and Share Premium totally of Rs. 27,11,43,106.45 are adjusted against the accumulated losses.
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