| Our Directors have great pleasure in presenting the 28th Annual Report
of your Company alongwith the Audited Statements of Accounts for the
year ended on 31th March, 2004 and Auditors Report thereon.
FINANCIAL RESULTS
31.03.2004 31.03.2003
(Rs. in Lacs) (Rs. in Lacs)
Sales & Other Income 1414.30 1095.24
Profit/(Loss) before Financial Charges (337.07) (856.65)
& Depreciation
Finance Charges 1143.89 1010.39
Depreciation 253.47 243.72
Pre-Tax Profit (Loss) (1734.43) (2110.76)
Balance Brought Forward (6590.52) (4479.71)
Previous Year Expenses (51.54) (0.05)
Balance Carried to Balance Sheet (8376.49) (6590.52)
DIVIDEND
Your Directors regret their inability to recommend any dividend due to
non-availability of profits.
OPERATING RESULTS
During the year the total income of the company has increased due to
better market conditions but due tc shortage of working capital, units
are still operating on job work basis. During the year companys total
turnover and other income has increased from Rs. 1095.24 lacs in
previous year to Rs. 1414.30 lacs in current year which showed 29%
growth as compared to previous year. The job charges for the year
2003-2004 were Rs. 148.17 lacs as against the previous year job charges
of Rs. 228.25 lacs. Loss before financial charges and depreciation has
reduced from Rs. 856.65 lacs in 2002-2003 to Rs. 337.07 lacs in
2003-2004.
The Company is making its best efforts to reduce its cash losses by
increasing its own production & discouraging the job work, which will
reflect the better financial results during the current year.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) as inserted by Companies Amendment Act,
2000 your Directors hereby confirm.
(i) that in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures except as mentioned in Auditors
Report;
(ii) that the Company had selected such accounting policies and applied
them consistently 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 at the end of the financial year and of the profit or
loss of the company for that year.
(iii) that the Company had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with he
provisions of this Act of safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
(iv) that the Company had prepared the annual accounts on a going
concern basis.
FIXED DEPOSITS:
During the year the Company has neither accepted nor renewed Fixed
Deposits U/s 58A of the Companies Act, 1956. The Company has no overdue
deposits outstanding other than those unclaimed as on 31st March, 2004.
AUDITORS REPORT
The Auditors Report and Notes on Accounts are self explanatory and
therefore, do not call for any comments.
AUDITORS
M/s S Tandon & Associates, Chartered Accountants, Chandigarh are
retiring at the forthcoming Annual General Meeting and being eligible,
offer themselves for re-appointment.
The Company has received a consent letter Under Section 224 (1) (B)
from M/s S. Tandon & Associates, Chartered Accountants, Chandigarh to
act as Statutory Auditors of the Company for the year 2004-2005. Your
Directors recommend the appointment of M/s S. Tandon & Associates,
Chartered Accountats as Statutory Auditors of your Company for your
approval for the current financial year.
COSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information relating to conservation of energy, absorption and
foreign exchange earnings and outgo as required 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 is given
in Annexure which forms part of this Report.
DIRECTORS
Sh. Anil Jain, director who is retiring at this meeting offers himself
for reappointment. Sh. M.K. Katara have resigned from the directorship
of the company. Sh. Mahinder Jain appointed as an additional director
of the company, who will hold office till this Annual General Meeting
unless appointed as director of the company in this Annual General
Meeting by the members of the Company.
Directors place on record their gratitude for the services rendered by
Sh. M.K. Katara during his tenure as director of the company and
welcome Sh. Mahinder Jain on the Board of the company.
COST AUDITORS
M/s. Khushwinder Kumar & Associates, Chartered Accountants, Jalandhar
has been appointed as the Cost Auditors of the Company for the year
2003-2004 and their Report will be submitted to the Deptt. Of Companies
Affairs, Govt. of India in accordance with the requirement of Law.
REFERENCE TO THE BOARD FOR INDUSTRIAL & FINANCIAL RECONSTRUCTION UNDER
SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT,1985
Since the net-worth of the company was completely eroded as per the
Balance Sheet for the year ended 31.03.2001, the reference was made to
the Board for Industrial & Financial Reconstruction under the Sick
Industrial Companies (Special Provisions) Act, 1985, which was rejected
by the BIFR. The Company made an appeal (Appeal No. 259 of 2001 against
the said order before AAIFR.
The AAIFR had disposed off the appeal vide their order dated
27.11.2001. Fresh reference on the basis of Balance Sheet as on
31.03.2001 was filed which was registered with BIFR as Case No.
341/2001. The case was heard by BIFRs Bench-l on 2.9.2003 and the
Bench has reserved its orders Honble BIFR vide its order dated
16.12.2003 appointed PNB as operating agency to conduct a special
investigative audit (SIA) in the accounts of the Company and to
restructure the Balance Sheet of the Company as on 31.03.2001 as per
the direction of AAIFR. M/s M. Verma & Associates a firm of Chartered
Accountants conducted SIA into the accounts of the company and
submitted its report to PNB which was sent to BIFR and other secured
creditors for their comments. SIAs conclusion is that from the
restructured Balance Sheet as at 31.03.2001, it may be observed that
accumulated losses of the company were Rs. 2302.79 lac which still
exceeds the networth of the Company (Rs.1338.06 lacs), meaning thereby
that the company is sick as per provisions of SICA. The operating
agency has concurred with SIA conclusions.
A reference on the basis of the Balance Sheet for the year ended at
31.03.2002 has also been made before the BIFR which has been registered
as Case No. 64/2003 and is pending for hearing.
PARTICULARS OF EMPLOYEES U/S 217(2A)
The Particulars of employees as per Section 217(2A) of the Companies
Act, 1956 read with Companies (Particulars of Employees) Rules, 1975
are NIL. No employee is being paid salary more than the limits given
u/s 217(2A) of the Companies Act, 1956, read with Companies
(Particulars of Employees) Rules 1975, as amended.
ADDITIONAL INFORMATION-BALANCE SHEET ABSTRACT AND COMPANYS GENERAL
BUSINESS PROFILE
Information pursuant to Department of Company Affairs Notification
dated 15th May, 1995 relating to the Balance Sheet Abstract and
Companys General Business Profile are given in the Annual Report for
your information.
INDUSTRIAL RELATIONS
Industral relations though remained harmonious in all the Units of the
Company during the year, yet the number of workers reduced
substantially due to less capacity utilization.
COMPLIANCE OF CLAUSE 47 & 49 OF LISTING AGREEMENT:
The equity shares of the Company are listed at Ludhiana, Delhi and
Mumbai Stock Exchanges. Annual Listing Fees for the last four years
has not paid to all these Stock Exchanges due to financial constraints
being faced by the Company. Seperate Report on Corporate Governance is
annexed herewith as a part of this Report as Annexure II.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation for the continuous
cooperation of the workers, the members of the staff and the executives
of the Company. Your Directors also place on record appreciation of the
assistance and co-operation extended by all India Financial
Institutions/Investment Institutions and Banks.
For and on behalf of the Board
Sd/-
Place: LUDHIANA (N.K.OSWAL)
Date 31.08.2004 CHAIRMAN-CUM MANAGING DIRECTOR
ANNEXURE I
INFORMATION AS PER SECTION 217(1) (e) READ WITH COMPANIES (DISCLOSURE
OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND
FORMING PART OF THE DIRECTORS `REPORT FOR THE YEAR ENDED 31" MARCH,
2004.
A. CONSERVATION ENERGY:
a) The Company is aware of the importance of conservation of energy and
continuous efforts are being made to reduce energy cost at all levels.
Special attention is being given for the use of energy efficiency
equipments. During the year company reviewed and continued to pursue
the energy conservation measures taken in the previous year with a view
to further reduce the cost of energy and consequently the cost of
production.
b) The Management is committed to further identify new areas where the
convention equipments can be replaced by latest equipments so as to
reduce the consumption of various sources of energy.
B. TECHNOLOGY ABSORPTION
1. RESEARCH & DEVELOPMENT
R & d department of the Company continued to support the Companys
business by providing improved as well as new products and process to
establish market leadership.
a) Proper product development through extensive analysis of the
existing qualities of yarns have resulted in encouraging results and
are expected to yield nore benefits in future.
b) The Company will continue to given emphasis on product development
in process, product quality, cost reduction, improvement in process,
productivity, safety and pollution control
c) FUTURE PLAN OF ACTION
The Company is planning to introduce various qualities of yarns, like
blended yams to increase its overall market share, Various new and
unique coloured yams will also be launched shortly for the benefit of
the costomers at an affordable cost.
d) EXPENDITURE ON RESEARCH & DEVELOPMENT
Specific areas in which R & D activities carried out by the Company has
resulted in encouraging results and the benefits are expected in
future:
New Product/Process Development
- Technology Enhancement to active standards.
- Technology upgradation
Expenditure on Research & Development are very difficult to ascertain
as the same staff and equipments are used for production and quality
control.
2. Fechnology absorprion, adaptation and innovation :
The Company is continuing its efforts to improve the quality of its
products thereby strengthening its market share.
3. imported Technology (Imported during last 5 years) - Nil
C. FOREIGN EXCHANGE EARNINGS AND DUTGO
a) Company has successfully entered into export market by making
exports during the year. The response to its products in the
international market is encouraging and repeated export orders are
being received by the company :
b) Total Foreign Exchange used and earned:
(Rs. lacs)
2003-04 2002-03
Used 45.08 35.32
Earned 325.87 288.87
for and on behalf of the Board
Sd/-
PLACE: LUDHIANA (N.K. OSWAL)
DATE: 31.08.2004 CHAIRMAN-CUM MANAGING DIRECTOR | 