Your Directors sincerely regrate to present 22nd Annual Report on the
business and operations of your Company together with the Audited
Accounts for the year ended 31st March, 2003.
1) FINANCIAL RESULTS :
(Rs. In Lakhs)
Particulars Year Ending Year Ending
Turnover 1197.14 3300.03
Operating Profit(PBIDT) (-) 148.11 (*) 81.35
ProvisionFor Gratuity & Nil 36.87
Leave Salary for last 20 years:
Interest 420.02 326.60
Depreciation 88.13 88.46
Loss before Tax (-)656.26 (-)533.28
Balance brought forward (-)1493.31 (-)513.13
Provisions, Written off, Tax (-)61.55 (-)473.37
and prior period adjustments
Transfer from Reserves Nil 26.47
Balance Carried Forward (-)2211.12 (-)1493.31
The operations at both the unit had to be compulsorily suspended
initially due to workers non-cooperation followed by erratic demands
ignoring the facts of sickness of the Company, it was impossible to
resume operations as entire working capital of the Company was eroded.
The Company requested to both the Secured Creditors for preparing
rehabilitation package and submit the same to Honble BIFR to restruc-
ture the existing debt and to provide fresh commensurating working
capital finance. Failing the same, the Company engaged a merchant
banker, to identify a prospective investor who could arrange for the
required working capital fund etc. The Company was informed that after
contracting large number of players of the industry spread all over
country for strategic, none of them has shown any interest.
There after, in January 2003 the Company approached again to the
secured creditors for one time settlement in lumb sum for there dues
based on the offer received form potential investor. The Company is
time and again requesting the secured creditors for decision in the
matter, however the same is pending for decision till the day.
2) REFERENCE TO BIFR UNDER SICA.
The Company had made reference to the Board of Industrial and Finance
Reconstruction (BIFR) u/s.15 (1) of the Sick Industrial Companies
(special provision) Act, 1985 (the SICA) and obtained registration as
Case No.397/2001 Dt. 16/10/2001. As entire net worth of the Company
continued to be eroded and therefore it continued to remain SICK, on
the professional advise it made another reference to BIFR and obtained
registration no.3/2003 Dt.1/1/2003 as mandatory compliance under the
The circumstantial factors beyond the control of the Board of
Directors, which contributed towards the tragic situation, are briefly
once again stated as follows :
* Repayment of Project Finance loan together with interest to the
Institution borrowed for PVC Pipe fitting project, which miserably
* Demand recession prevailing in the economy resulting in pressure on
quality and operating margins and unused surplus capacities due to
either dropping or postponing various irrigation and health care
schemes by the state government.
* Failure to adjust the end product price in line with Steep
fluctuations in the raw material prices.
3) PARTICULARS OF EMPLOYEES :
The particulars of employees as required under Section 217 (2-A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 and u/s. 217 (1) (e) of the said Act read with Companies
(Disclosure of Particulars in the Report of Directors) Rules 1988 are
not given since none of the employees were in receipt of remuneration
exceeding the prescribed limits.
4) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNING AND OUTGO :
Particulars as prescribed under Section 217 (1) (e) of the Companies
Act, 1956 read with Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988 are given in Annexure which forms a
part of the Directors Report.
5) AUDITORS REPORT :
The Notes No.3 appearing in the Notes to Account referred to in the
Auditors Report in respect of non-provision of disputed liability of
sales tax, excise duty and Note No.4 regarding erosion of the net worth
of the Company due to continued losses and write offs and Note No.7
regarding absence of confirmation of balances mainly from Debtors,
Creditors and Deposits are self explanatory and therefore does not call
for any further comments.
6) DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF
THE COMPANIES ACT, 1956.
The Board of Directors of the Company confirm :
i) That in the preparation of the annual accounts for the financial
year ended 31st March.2003 the applicable accounting standards have
been followed along with proper explanation relating to material
departure. The Company had made provision for gratuity and leave salary
on the basis of expert labor consultant in absence of actuarial
valuation and the same is paid to employees who had tendered their
ii) That the directors have selected such accounting policies and
applied them consistently and 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 as at March 31, 2003 and loss of the Company
for the year ended on that date;
iii) That the directors 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 for preventing and detecting fraud and other
iv) That the directors have prepared the accounts on going concern
7) CORPORATE GOVERNANCE :
The Company is registered under BIFR vide Case No. 397/2001 and Case
No.3/2003 as the net worth of the Company was completely eroded, under
the circumstances it is difficult to convince any eminent person to
join the Board of Directors and hence it is difficult to comply with
the requirement of the Corporate Governance, pursuance to Clause No.49
of the listing agreement with the Stock Exchanges. Therefore, Company
has not obtained any corporate governance report from its Auditors.
8) DIRECTOR :
Shri Harshad C. Shah, Director retires at the forthcoming Annual
General Meeting and being eligible, offer himself for reappointment.
The Board of Directors, recommends his reappointment.
9) AUDITORS :
M/s. Prakash S. Doshi & Company, Chartered Accountants, retire as the
Auditors of the Company at the forthcoming Annual General Meeting and
being eligible, offers themselves for reappointment.
The Board of Directors wishes to place on record its appreciation for
all the employees and ad those who were associated with the Company
until they Voluntarily resigned and accepted their retirement dues in
full and final settlement of the accounts. The Company appeals to all
those employees and workers who have yet not come forward at the
earliest to receive their dues failing which the Company may not be in
a position to settle their dues due to paucity of funds.
11) ACKNOWLEDGMENT :
Your directors place on record their deep sense of appreciation of the
services of the workers, staff and executives and the professionals,
who have contributed for the management of affairs of the Company.
Your directors also thank the customers, vendors, investors, financial
institutions and bankers for their continuing support.
By order of the Board
For Movilex Irrigation Ltd.
Place: Pune. Sd/-
Date: 23rd June, 2003. Jaswant L. Shah
ANNEXURE TO THE DIRECTORS REPORT.
Particulars pursuant to Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988
(A) Conservation of Energy :
The factory building of the Company is designed is such a way that it
does not require any artificial lighting during the day time, thereby
it Conserves the energy. The efforts to conserve and optimize the -use
of energy through installation of state-of-the-art machinery continue
to receive priority.
1. Electricity Consumption :
Unit Rates (Rs./KWH) 4.08
Units (Lacs KWH) 10.77
Total Amount (Rs.Lacs) 43.91
(ii) Own Generation through D.G.Sets
Unit Rate (Rs./KWH) 6.66
Unit (KWH Lacs) 0.09
Total Amount (Rs. Lacs) 0.60
2. Coal Not Applicable.
3. Furnace Oil Not Applicable.
4. Consumption Per Unit of Production :
Electricity : 552 KWH per Tone,of Finished Products.
Other Sources : Not Applicable.
(B) Research & Development :
During earlier years, the Company had developed open able Drippers to
clean choking of contaminator deposits and make them reusable. This can
be used as substitute of disposable Dripper and could thereby reduce
cost to the farmer.
Besides the Company had also developed and obtained ISI for the Screen
Type Irrigation Filters used in Drip Irrigation Systems. The Company
also had developed in-house Soil and Water Testing Laboratory.
(C) Technology Absorption, Adoption and Innovation :
The Company has not absorbed or adopted any technology other than that
provided by the equipment suppliers who themselves have designed the
plants, in overseas technical collaborations, for manufacturing of
Rigid PVC Pipes, Drip Irrigation Laterals, PVC Houses, SWR Pipes, PVC
Fittings and HDPE Pipes. Your Company has not imported and technology
during last five years.
(D) Foreign Exchange Earnings and Outgo :
Total Foreign Exchange Earned : Rs. Nil
Total Foreign Exchange Used : Rs. Nil
By order of the Board
For Movilex Irrigation Ltd.
Place: Pune. Sd/-
Date: 23rd June, 2003. PRAKASH S. DOSHI & COMPANY
22, Gurukul Chambers,
Road, Mumbai - 400002.