Your Directors present the 17th Annual Report together with the Audited
Balance Sheet and Profit & Loss Account for the year ended 31st March,
(Rs. in Lakhs)
(12 Months) (9 Months)
Sales & other income 4692.5 3675.9
Gross Profit (Loss) before interest
& depreciation (813.7) (219.6)
Interest 3504.7 2524.9
Depreciation 6.36.4 470.3
Profit/(Loss) before tax (4954.8) (3214.7)
Prior period adjustments 7.7 460.1
Profit/(Loss) after tax (4962.5) (3674.8)
Transfer from investment allowance
reserve (utilized) - 80.1
Balance of Profit & Loss Account brought
forward (12286.3) (8691.5)
(Loss) carried forward to Balance Sheet (17248.8) (12286.3)
In view of the poor performance of the Company, your Directors are
unable to recommend any dividend for the year 2001-2002.
The year under review continued to be a difficult one for the Company.
The company could achieve a turnover of Rs. 46.92 Crores during the
year as against the previous years turnover of Rs. 36.76 Crores of
nine months. The Company suffered net loss of Rs. 49.54 Crores as
compared to net loss of Rs. 32.14 Crores during the last period. The
low volume of sales continued due to non availability of adequate
working capital facilities leading to underutilisation of the
manufacture facilities. The management has been making its sincere
efforts to arrange funds for revival/settlement of outstanding dues and
has submitted proposals to Banks and Financial Institutions but the
efforts of the management have not yet been materialised in arranging
the funds. Your Directors are confident for the revival of the Company
and are making sincere efforts to raise the required finances.
REFERENCE TO BIFR
As the members are aware that due to complete erosion of its entire net
worth as on 31st March, 2001, a reference was made on 17.07.2001 to the
Board for Industrial and Financial Reconstruction (BIFR) under proviso
to sub section (1) of Section 15 of the Sick Industrial Companies
Provisions) Act, 1985 for determination of measures for the
rehabilitation of the company. Proceedings before the BIFR have already
been started and the BIFR in their hearing held on 30.07.2002 has
appointed IFCI Ltd. as the Operating Agency u/s 16(2) of the Act for
conducting an inquiry into the Sickness of the Company and other
related aspects by getting a Special Investigative Audit (SIA) of the
Companys Accounts done by reputed firm of Chartered Accountants. The
Company is proposing to file an appeal against some of the directions
contained in BIFRS Orders dated 30.07.2002.
The company has not invited/accepted any fresh deposit from public
during the year ended 31st March, 2002 under section 58A of the
Companies Act, 1956.
Since the last Annual General Meeting, the following changes have taken
place in the Board of Directors of your Company.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the company, Shri V. S. Dewan and Shri J. C.
Dewan retire by. rotation and being eligible offer themselves for
re-appointment. Further, the nominations of Shri A. K. Sharma and Shri
Devender Singh have been withdrawn from the Board by the IFCI Ltd. and
M/s Ashok & Co., Chartered Accountants, auditors of the company was to
be retired at the ensuing Annual General Meeting. However, due to
sudden sad demise of Sh. Ashok Kumar, Chartered Accountant, Proprietor
of M/s Ashok & Co., the Board of Directors has appointed M/s Gupta
Pramod & Co., Chartered Accountants, Meerut as auditors of the Company
to fill the vacancy caused by the sudden death of the existing Auditor
of the Company. M/s Gupta Pramod & Co. will be retiring at the ensuing
Annual General Meting and being eligible, offer themselves for
The notes to the accounts referred to in the Auditors Report are
self-explanatory and therefore do not call for any further explanation.
The Audit Committee was re-constituted on 30.10.2002 consisting of
three members viz. S/Sh. S. K. Verma, V. S. Dewan and K. R. Gupta. Sh.
V. S. Dewan is the Chairman of the Audit Committee.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement u/s 217(2AA) of the Companies Act, 1956,
with respect to directors responsibility statement, the Directors of
your company confirm:
i. that in the preparation of the annual accounts for the year ended
31st March, 2002, the applicable Accounting Standards have been
followed and no material departures have been made from the same.
ii. that they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the company at the end of the financial year and of the loss of the
company for the year.
iii. that they have taken proper and sufficient care 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
iv. Since the net worth of the Company has been completely eroded as on
31.3.2001 and accordingly a reference was made before the Honble BIFR
under proviso to sub section (i) of Section 15 of Sick Industrial
Companies (Special Provisions) Act, 1985 for determination of measures
for the rehabilitiation of the Company, the accounts of the Company for
the year ended 31st march, 2002 have been prepared on a going concern
Some creditors of the company have filed winding up petitions against
the company in the High Court. Some of the creditors have also
initiated legal proceedings in various Courts/Tribunals for recovery of
their dues. Your company is taking appropriate steps to defend the said
proceedings and is also negotiating with the parties for sorting out
the matters amicably and on terms favourable to the Company.
Annexure to this report gives the information in respect of
conservation of energy, technology absorption and Foreign Exchange
earnings and outgo, required under section 217(1)(e) of the Companies
Act, 1956, read with the companies (Disclosure of particulars in the
report of the Board of Directors) Rules, 1988 and forms a part of the
None of the employees was in receipt of remuneration of Rs. 2,00,000 or
more per month and hence the provisions of section 217(2A) of the
Companies Act, 1956 are not applicable.
The equity shares of the company are presently listed with the Stock
Exchanges at Kanpur, Delhi, Mumbai, Ahemdabad and Kolkata. The
shareholders in their meeting held on 15.03.2001 had approved
de-listing of equity shares of the company from stock exchanges at
Ahemdabad and Kolkata. The Annual listing fee amounting to Rs. 5.62
lakhs is pending to the various stock exchanges.
In order to raise funds by issue of shares to increase the business
activities of the Company, the Company increased its Authorised Capital
from Rs. 25 Crores to Rs. 50 Crores during 1996. However, due to
adverse capital market conditions and present financial health of the
Company, it is no longer appropriate for the Company to come out with
an issue in the next few years and hence, it has been decided to
reinstate the authorised capital of the Company from Rs. 50.00 Crores
to Rs. 25,00 Crores.
In the 11th Annual General meeting held on 27.03.1997, the Company
declared dividend @ 20% pro-rata to its shareholders for the year
1995-96. The financial position of the Company deteriorated day by day
and the Company could not make the payments of the Dividend within
stipulated time. Since the liquidity position of the company has also
been adversely affected due to continuous heavy losses in the
subsequent years and the company has become Sick Industrial Company u/s
3(1)(o) of SICA, 1985, it has been decided to revoke dividend for the
year 1995-96 subject to the approval of the shareholders in the ensuing
Annual General Meeting.
The Report on Corporate Governance is annexed as part of this report.
Your Directors appreciate the valuable co-operation extended by the
Central and State Government Authorities and are grateful to the
financial institutions and bankers for their continued assistance,
guidance and support.
Your Directors place on record their appreciation of the contribution
made by the employees of the company at all levels, the shareholders,
suppliers, dealers, customers and public for their support and
confidence reposed in the management.
ANNEXURE TO DIRECTORS REPORT
PARTICULARS UNDER COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF
BOARD OF DIRECTORS) RULES 1988.
A. CONSERVATION OF ENERGY
Energy Conservation Measures taken:
a) Energy conservation is receiving high priority, and major steps
towards energy conservation are being taken by the company on a
1. Closely monitors energy consuming equipments, company surrendered
the sanctioned load of 3252 KVA over a period of three years and
started the generation of power from its own generator sets.
2. Maintains close liaison between energy generating centres and
b) Additional investments and proposals being implemented for reduction
of consumption of energy.
The management endeavours to reduce consumption of energy and
explorations/research in new areas for reduction in energy consumption.
c) Impact of measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods.
The measures taken above for reduction in energy consumption will help
to reduce the dependency on State Supplied power and stabilization of
production with the reduction in cost of production.
d) Total energy consumption and energy consumption per unit of
production as per Form A of the Annexure to the Rules:
B. CONSUMPTION PER UNIT OF PRODUCTION:
There is no specific standard for the per unit consumption of
electricity, as the consumption per unit depends on the production, and
product mix, as the energy consumption per unit varies in accordance
with the change in product mix.
1. RESEARCH & DEVELOPMENT:
i) Specific areas in which R&D carried out by the Company:
The company has installed proper laboratories at its various plants for
the better study of its products quality.
ii) Benefits derived as a result of the above R&D:
Reduction in cost of out-put, improvement of quality, better
iii) Future Plan of Action:
The above activities shall continue and more efforts in this direction
will be made.
iv) Expenditure on R&D:
No System of separate maintenance of R&D records has yet developed. The
expenditure is merged with various other heads of expenses.
2. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
i) The efforts in brief towards technology absorption, adaptation and
The plants are based on indigenous technology. Every effort is made to
know the latest development in technology in India as well as abroad.
ii) Benefits derived as a result of the above efforts e.g. Output
improvement, cost reduction, product development, import substitution.
It has helped the company to improve the quality of products according
to the need of the market.
iii) Details of Imported Technology: NOT APPLICABLE
3. FOREIGN EXCHANGE USED AND EARNED:
(12 Months) (9 Months)
(Rs. in Lakhs) (Rs. in Lakhs)
i) Foreign Exchange earned including
Direct and indirect Exports 3437.31 2460.06
ii) Foreign Exchange used 52.75 28.93
For and on Behalf of the Board of Directors
PLACE: MEERUT V. S. DEWAN
DATED: 30.10.2002 CHAIRMAN