Peerless, the country's largest residuary non-banking finance company (NBFC), posted a net loss of Rs 17.80 crore for the year to March 31, 1998, against Rs 30.82 crore in 1996-97. It has reported a lower net loss after writing back provisions of Rs 35.08 crore this year. The company's total share capital is Rs 33.16 crore, while the reserves and surplus of Rs 34.87 crore have come through revaluation. The aggregate net loss for 1996-97 and 1997-98 is Rs 48.32 crore.

The company's deferred obligation liability consists of unamortised portions of deposits in respect of processing and maintenance charges. Peerless had included these fees as income between 1989-90 and 1994-95, but theReserve Bank of India (RBI) objected to this, and its view was upheld by the Supreme Court. The amount was subsequently shown as deferred liability.

In 1995-96, the liability of Rs 771 crore in this respect was to be charged to the profit & loss accounts. On certificate-wise actuarial valuation, it was bought down to Rs 650.83 crore in 1996-97. In the 1997-98 accounts, Peerless has shown a lower liability of Rs 325.68 crore on this count, citing the RBI's permission to pay holders of discontinued deposits 8 per cent instead of the earlier 10 per cent. The company has also noted that the RBI gave this relief subject to certain conditions apart from compliance with the RBI Act of 1934, the Residuary Non Banking Companies (Reserve Bank) Directions of 1987 and other RBI directives.

The company has said that it has made representations to the RBI and the apex bank's directions "as received in this respect will be followed in future years".

Statutory auditor Lodha & Co, in its report, has noted: "Pendingcomplete reconciliation and compilation of certificate-wise details, we are unable to express an opinion on the accuracy or otherwise of the liability to certificate-holders shown under the Social Welfare Scheme Fund and on the amount of Rs 32,515.18 lakh adjusted by the management as excess liability."