M S SHOES EAST LTD
18TH DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 2004.
The Directors of your company have pleasure in presenting the 18th Annual
Report with the Audited Accounts of the Company for the year ended 31st
Financial Results Rs. In lacs
Particulars 31.03.2004 31.03.2003
Export turnover - -
Other income 31.83 0.32
Expenditure 217.86 265.20
(Includes depreciation) (101.17) (115.87)
Interest & Bank Charges 15419.97 14993.38
Loss for the year 15606.00 15258.26
Loss carried to Balance Sheet 15606.00 15258.26
During the period under review, no commercial activity could be taken by
the Company owing to the pre-occupancy of the Company's Directors in the
matters concerning litigation going on in respect of the suits filed by
various Banks and Financial Institutions and Hotel Projects of the Company
resulting in financial crunch.
Your Directors are unable to recommend dividend in view of the continuing
losses and current financial position of the Company.
The company has filed a suit against HUDCO, challenging the cancellations
of bids in respect of purchase of land for Four Star and Five Star projects
as illegal, null and void besides filing two criminal complaints against
HUDCO and its officers which are still pending.
Consequent upon the decree obtained by Allahabad Bank from the Debt
Recovery Tribunal for Rs. 31.91 crores. the former has recovered Rs 7.22
crores by way of auction of the Company's properties and realisation from
the Delhi Stock Exchange and the balance amount i.e. Rs. 24.69 crores is
included in unsecured loans from banks and financial institutions.
Also, consequent upon the decree obtained by Canara Bank from the Debt
Recovery Tribunal for Rs. 38.91 crores, the former has recovered Rs.17.75
lacs by way of auction of Company's stocks and machineries and the balance
amount i.e. Rs. 38.73 crores is still payable.
Also, Decree was passed by the Debt Recovery Tribunal in favour of IDBI
amounting to Rs. 88.76 crores and future interest @ 20% p.a. with quarterly
BIFR STATUS AND FUTURE OUTLOOK
Due to the huge financial losses during the last several years and
consequently the Net Worth of the Company having been eroded completely, a
reference was made u/s 15(1) of the Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA) to the Hon'ble Board of Industrial & Financial
Reconstruction (BIFR) under reference No. F-3(M-6)/BC/2002 dated 13.06.2002
and registered as case No. 237/2002.
The Company is in the process of resurrection plan to financially revive
the Company. The matter is under progress.
As there was no commercial activity during the year, the Company had not
appointed any employee.
LISTING OF SECURITIES
The securities of the company are listed on Delhi Stock Exchange. Annual
listing fees for the year upto 31.3.2005 was deducted in advance by Delhi
Mr Devender Kumar Sharma, Director of the Company retires by rotation and
being eligible offers himself for re-appointment.
During the year, the Company has not accepted any deposits within the
meaning of Section 58A of the Companies Act and rules made thereunder.
PARTICULAR OF EMPLOYEES
The Company had no employee during the year covered under Section 217(2A)
of the Companies Act, 1956.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
1. Conservation of Energy: Since the Company has not been in operation for
the last several years, therefore the information on conservation of energy
is not applicable.
2. Technology Absorption: As there were no operations during the year,
there are no particulars to be disclosed.
3. Foreign Exchange Earning and Outgo: During the year, there were no
earnings or outgo in Foreign Exchange.
DIRECTORS' RESPONSIBILITY STATEMENT
Owing to numerous litigations going on in the various Courts of Law, the
Company and its Directors are facing tremendous hardships and crises. The
Company has not been undertaking any commercial activity for the past
Under these circumstances, despite the best of their efforts. your
directors have not been able to maintain all the statutory records and
other records satisfactorily and consequently are unable to give a
satisfactory compliance report regarding fulfillment of Directors'
responsibility in the Directors' Responsibility statement under section
217(2AA) of the Companies Act, 1956.
CORPORATE GOVERNANCE CODE
As per Clause 49 of the Listing Agreement with the Stock Exchanges a
separate report on Corporate Governance alongwith a certificate from the
Company's Statutory Auditors confirming the compliance of the conditions of
Corporate Governance and Management Discussion and Analysis is annexed and
form an integral part of this report.
M/s. S.R. Khurana & Co, Chartered Accountants. New Delhi, Statutory
Auditors of the Company. retire at the conclusion of the ensuing General
Meeting and being eligible, offer themselves for reappointment and have
furnished a certificate to the effect that their appointment, if made, will
be in accordance with the provisions of the section 224(1B) of the
Companies Act, 1956.
Owing to numerous litigations going on in the various Courts of law in the
country, the Company and its Directors are facing tremendous hardships and
crises. The Company has not been undertaking any commercial activity for
the past several years and the networth of the-company has been wiped out
fully as discussed above under the head BIFR STATUS AND FUTURE OUTLOOK.
The various observations of the auditors as stated in their report are self
explanatory and therefore do not call for any further comments. However
your directors are trying their best to do the needful at the earliest