Your Directors present herewith Ninth Annual Report togetherewith
Audited Annual Statements of Accounts for the year ended 31.03.2003.
1. FINANCIAL RESULTS
During the year under review, the Company earned Turnover of Rs. 24.60
lacs as against Rs. 1094.56 lacs of previous year, whereas net loss
after Interest, Depreciation and Tax reached to Rs. 3493.72 lacs as
against Rs. 607.27 lacs of previous year.
In view of huge loss, the Company has not charged depreciation whereas
no provision for Interest on Secured Loans obtained from Banks has been
made as the quantum of Interest devolving oh the Company, could not be
estimated, due to suited against Banks.
In view of loss, the Board regrets its inability to recommend payment
3. OPERATION IN RETROSPECT
The Company which was otherwise a growing Company witnessed the year
under review, as a year of full of despair and difficulties mainly due
to illegal acts of Bankers. The Company has been penalised by its
cliental groups by non payment of sales proceeds which were earlier
realizable debtors, on the ground that the Company could not fulfill
the supply/delivery schedules of confirmed orders committed by it, with
these customers, at the time of undertaking expansion project.
Due to serious and repeated. violations by the Banks of specific laws
such as Banking secrecy laws, Negotiable Instrument Act u/s. 31, Indian
Contract Act u/s. 73, Indian Contract Act u/s. 38 by banks, for which
company had already filed suits for damages in 2001 in the Court,
Company was compelled to stop its productions. This obviously resulted
into huge failure in Companys long-term supply commitments made in
year 2000 to its prospective regular buyers. As a result these
customers had to incur huge losses by buying these huge quantities at
very high rates from apot markets; to fulfill their commitments & had
to suffer partly, for heavy production losses, where they couldnot
procure bur replacements.
Thus clearly due to violations of laws by bank. Company could not
fulfill huge supply commitments to its regular customers, hence Company
had to offer huge compensations and make necessary provisions to such
suffered customers, which us the main reason of losses. Company had
already made corresponding damages claim in court against concerned
banks as mentioned above.
4. FUTURE PROSPECTS
The Company is required to make necessary application to the Board for
Industrial and Financial Reconstruction (BIFR) for its revival and
rehabilitation under Section 15 of Sick Industrial Companies (Special
Provisions) Act, 1985, on complete erosion of its entire networth as at
31.03.2003 and necessary steps are being taken in this regard. The
Company expects that the settlement of its dues from the Banks. it
would recommence its manufacturing activities. The Company is also
actively trying other possibilities on priority basis.
5. ISSUE OF SHARES ON PREFERENTIAL BASIS
In order to reduce the financial obligation of unsecured loans lenders,
the Company has envisaged a plan to offer, issue and allot 7,00,000
Equity Shares of Rs. 10/- each at par on preferential basis subject to
the approval of the shareholders and Stock Exchanges.
6. REPORT ON CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS
Report on Corporate Governance and Management Discussion and Analysis
Report are attached herewith as Annexures A and B to this Report.
7. DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217(2AA) your directors confirm that:
i. In the preparation of the annual accounts, the applicable accounting
standards have been followed.
ii. The directors had selected such accounting; policies and applied
them consistently except non provision of Depreciation and Interest for
the reasons stated hereinunder and made judgements 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 on 31st March, 2003 and of the loss
of the Company for the year ended on that date.
iii. The directors have taken proper and sufficient care for the
maintenance of adequate accounting f 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. The directors have prepared the annual accounts on a going concern
8. FIXED DEPOSITS
Fixed deposits received and outstanding as at 31st March, 2003 stood
at Rs. 39.16 lacs. None of the deposits has remained unclaimed or
overdue as on that date.
Mrs. Nayna J. Shah who retires by rotation and being eligible offers
herself for reappointment.
M/s. Dilip K Thakkar & Co., the Chartered Accountants, Vadodara, the
Statutory Auditors of the Company, hold office upto conclusion of
ensuing Annual General Meeting, do not offer themselves for
reappointment, due to their personal reasons. However, the Company has
received a certificate from M/s. Y. K. Shah & Co., the Chartered
Accountants, stating that if their appointment as Statutory Auditors is
made, it would be well within the ceiling prescribed under Section
224(1-B) of the Companies Act, 1956.
The members are requested to consider appointment of Auditors and fix
11. AUDITORS REMARKS IN THEIR REPORT
The remarks made in Auditors Report by the Statutory Auditors read
with notes on accounts are self explanatory and do not require any
further clarification and explanation.
12. STATUTORY DISCLOSURES
The information required under Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1976 is
not furnished as no employee is covered thereunder.
The information required under Section 217(1)(e) of the Companies Act,
1956 read with Companies (Disclosure of Particulars in the Report of
the Board of Directors) Rules, 1988 is not annexed hereto as - no
manufacturing activity could be undertaken during the year under
The Board-expresses its sincere appreciations to all the concerned for
their valuable support.
For and on behalf of the Board,
Place: Vadodara J. H.SHAH
Date: 30/06/2003 Chairman & Managing Director