| THE MEMBERS OF
BLUE BIRD (INDIA) LIMITED
The Directors have pleasure in presenting the 12th Annual Report of
the Company together with the Audited Statements of Account farfhe year
ended March 31,2011.
Financial results
The Financial position of the Company as on the date of the Balance
Sheet is as follows:
(Rs. in laks)
Particulars Year ended Year ended
March 31,2011 March 31.2010
Sales & Operating Income 1080.83 43,059.71
Operating Profits (PBDIT) 31969.14 489.13
Less: Depreciation 751.77 747.39
Less: Interest 8816.75 7,782.12
Profit / (Loss) before Tax {41537.66} (8,040.38)
Less: Income, Tax -- (2,741.67)
(Including Deferred Tax and
Fringe Benefit Tax)
Net Profit/ for the year (41537.66) (5,298.71)
Balance brought forward from
previous year 3226.45 8,477.89
Less /Add; Prior Period Adjustments - 47.27
Distributable Profits (38311.21) 3,226.45
Appropriated as under:
Balance carried forward (38311.21) 3,226.45
The management m order to depict the factual position of the company
arid on the basis of the reports of the Technical and Production
Director has reduced realizable value 6f the finished goods at 40% of
net realizable value and raw materials, components, stores and spares
are valued at 60 % of purchase price and based on the case to cose
appraisal, written off debtors worth: Rs. 142.8 Crores in addition to
the provisions as made in the previous year. Due to the above the
accumulated loss of the company is now Rs. 38311.21 lacs resulting in
the erosion of the entire not worth of the company of ~ Rs. 11944.8
lacs. As per the provisions of Section 3(1) (ga) of the Sick Industrial
Companies (Special Provisions) Act 1985 the company has to report the
said erosion of the net worth to the authorities as stated m said act.
The Company has proposed the resolution for the approval of the
members, for making the reference to the Board under the provisions of
the Sick Industrial Companies (Special Provisions) Act 1985 for the
approval of a revival scheme of the company, under the said act.
DIVIDEND AND BOOK CLOSURE
In view of the lost for the current year, the Board does not recommend
any dividend for the year under review. The Register of members and the
Share Transfer Books of the Company shall remain closed from Wednesday,
September 21st, 2011 of Friday, September 30th, 2011 (both days
inclusive) as per the requirements of Clause 16 of the Listing
Agreements with Stock Exchanges,
EXTERNAL RATINGS
There are no ratings assigned as on the date of the report.
MATERIAL CHANGES AND EVENTS AFTER BALANCE SHEET DATE.
As mentioned in Note No. 11 of Schedule 21 (B) due to cash loss and
delay in recovery of dues from the customers, the Company faced a cash
crunch resulting into default in payment to lenders and other
creditors. The Company had submitted a Corporate Debt Restructuring
(COR) proposal to CDR Cell of Reserve Bank of India, seeking extension
of time for repayment & seeking certain other concessions. The proposal
was admitted by CDR cell on March 30, 2010. The said CDR proposal was
approved by the CDR cell of RBI as on January 28 ,2011 .The
implementation of the CDR cell is not yet been done, pending sanction
of few banks to be received for the said CDR proposal.
As stated in Financial review, the company is now a sick company and
its net worth has been totally eroded.
BOARD OF DIRECTORS
The Board of Directors at its meeting held on 30th June 2011
recommended the reappointment of Mr. Niranjan Phadke and Mr. Satish
Bhagwat, Directors of the Company who are liable to retire by rotation
during the year and being eligible have offered themselves for
reappointment. The Board seek your approval for their re-appointments.
Brief particulars & expertise of the directors to be
appointed/re-appointed and their other directorship and committee
membership have been given in the Corporate Governance report.
STATUTORY DISCLOSURES
None of the Directors of the Company is disqualified to be appointed as
Director under the provisions of Section 274(1 )(g) of the Companies
Act, 1956. The Directors have made necessary disclosures, as required
under various provisions of the Act and Clause 49 of the Listing
Agreement with Stock Exchange/s.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 217(2AA) of the Companies Act, 1956 in relation to
the Financial Statements for the year ended March31,2011, the Board of
Directors state that:
a) the applicable Accounting Standards have been followed in the
preparation of the financial statements and there are no material
departures from the said standards;
b) reasonable and prudent accounting policies have been used in
preparation of the financial statements and that they have been
consistently applied, so as to give true and fair view of the state of
affairs of the Company as at March 31, 2011 and of the loss for the
year ended on that date;
c) 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 irregularities.
d) the financial statements have been prepared on a going concern basis
since they are confident of successful implementation of approved CDR
proposal and successful settlement with the parties issuing notices
under section 433 & 434 of the Companies Act, 1956.
AUDITORS
M/s.Shoshank Patki & Associates, Chartered Accountants, were appointed
as the Auditors of the Company at the previous Annual General Meeting.
However, M/s Shashank Patki & Associates, Chartered Accountants
resigned from the post of the Auditors as on 12th February 2011. The
Company has now appointed M/s.Khdndelwal Gandhi & Associates as
Chartered Accountants in the meeting of the Board, of Directors held on
9th June 2011 -. M/s.Khandelwal Gandhi & Associates Chartered
Accountants retire at the ensuing Annual General Meeting and are
eligible for re-appointment as Auditors. The Audit Committee at its
meeting held on 9th June 2011 has recommended their re-appointment.
In terms of the provisions of section 224 (1B) of the Companies Act,
1956 M/s.Khandelwal Gandhi & Associates, Chartered Accountants have
furnished a certificate that their appointment, if made, will he within
the limits prescribed under section 224 (IB) of the Companies Act,
1956.
AUDITORS'REPORT (QUALIFICATIONS/COMMENTS)
Management perception of Audit Qualifications.
1. Regarding verification and valuation of Inventories.
The Company has incurred cash Loss during the year and is facing
shortage of manpower in the company, as all th# qualified staff has
left the company . The management will take the necessary steps to
improve the internal control system / internal audit after the
implementation of the CDR proposal.
2. Regarding Credit Assessment of Debtors and recovery of Debtors.
As stated above the Company is facing acute shortage of recovery staff
and due to the peculiar nature of note book and book publishers, the
previous debts are recovered when new goods are supplied. Since the
Company is not able to manufacture and supply fresh stock, debtors are
not paying old dues. In order to arrive at correct picture the Company
has written off Debts worth Rs, 142.89 crores in addition to the
provisions as made in the Previous Year and have initiated legal action
against them.
3. Regarding Reasonableness of Internal Audit System.
As stated above the Company is facing shortage of qualified staff and
after implementation of CDR, the Company will take corrective steps.
4. Regdfds to Accounts preparation on a going concern basis.
The Management feels that after implementation of CDR, infusion of
fresh capital and proposed BIFR rehabilitation scheme, the Company will
turn round the corner and become viable once again. Therefore, as per
the Management view the Company is still a going concern. Also the
Company is in negotiations with creditors for extension of time and
reduction of payables and cases filed against the Company u/s.433 and
434 of the Companies Act 1956 will be withdrawn.
5. Writing off of Debtors. Please refer Note. 2 above.
6. Significant Accounting Policies regarding Inventories.
The Company's Technical and Production Directors conducted physical
stock verification and valuation of inventories in the form of Raw
material, Components, Stores and Spares, WIP and Finished Goods. Based
on form, status and reliability of inventory, price of these are
reduced a. as regards to Raw material! by 40% > b. as regards to
Finished Goods by 60%
PUBLIC COMMITTEE
The details of the Audit Committee are given separately in the
Corporate Governance Report.
PUBLIC DEPOSITS
During the year under review, the Company has not accepted any deposits
under Section 58A of the Companies Act, 1956.
EMPLOYEES STOCK OPTIONS
The Company has not issued / granted any Employees stock options to its
employees.
PARTICULARS OF EMPLOYEES
Since there are no employees drawing remuneration in excess of the
limits as stated in under the provisions of Section 21 7(2A) of the
Companies Act, 1956, no :information is given relating to the same,
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE
EARNINGS & OUTGO
A statement containing the necessary information required under the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is annexed to this report as Annexure I.
BUY BACK OF SHARES:
The Company has not done any Buy Back of Shares during the year under
review,
APPRECIATION
Your Directors appreciate the trust reposed by various stakeholders of
the Company. The Directors are also grateful and pleased to place on
record their appreciation for the continuous and excellent support,
guidance and cooperation extended by the Company's Business Associates,
Registrar & Transfer Agent, Bankers, Financial Institutions, various
Government Regulatory Bodies, Stock Exchanges, Depositories, and
Employees.
For & On Behalf of the Board of Directors
Place: Pune Nitin Sontakke
Date : June 30, 2011 Chairman & Managing Director | 