ece industries ltd Directors report

SIL BUSINESS ENTERPRISES LIMITED ANNUAL REPORT 2011-2012 DIRECTORS REPORT Your Directors have pleasure in presenting 54th Report on the operation of your Company together with audited accounts for the year ended March 31, 2012. 1. FINANCIAL RESULTS (Rupees in Lacs) Current year Previous year Rupees Rupees Rupees Rupees Sales and Other Income 7.18 257.07 Less: Expenditure Employees Cost 5.65 186.40 Operating and Other Exp. 18.22 127.80 23.87 Operating Profit (16.69) (57.13) Extra Ordinary items - Sundry Balances written off - (33.74) - Profit/(Loss) on sale of Assets 0 611.56 - Reduction in Liabilities to FD Holders (Int.) 0 .28 .0 578.1 Profit/(Loss) before interest, (16.69) 520.97 Depreciation & Taxation amount - Interest (10.12) (.33) - Provision for Doubt full Debts 0 (13.24) - Provision for Depreciation (2.48) (49) (12.60) (62.57) he Net Profit/(Loss) for the year Amounts to (29.29) 458.40 Earlier years income/expenses Income tax earlier year - (21.35) - (12.66) Interest pertaining to earlier years (1138.91) Balance brought forward from previous year - (29.29) (714.52) Leaving a balance to be carried forward (16451.19) (15736.67) (16480.48) (16451.19) INCOME Sales and Others Income 7.18 100 257.08 100.00 EXPENDITURE Material Consumption - - - Employees Cost 5.65 78.69 186.40 72.41 Operating and Other expenses 18.22 253.76 127.80 49.71 Total Expenditure 23.87 332.45 314.20 121.12 Operating Profit (Loss) (16.69) (232.45) (57.12) (21.12) 2. DIVIDEND: In view of the loss for the period, the Directors have not recommended any dividend. 3. REVIEW OF FINANCIAL PERFORMANCE: As reported in the previous years Annual Reports, the assets of the Company had been sold by Secured Lenders. The Company is not carrying on any activity. 4. BIFR As reported in earlier Annual Reports, your Company was declared sick unit under section 3(1)(0) of the Sick Industrial Companies (Special Provisions) Act, 1985 SICA) on 5th July, 2006 by the Board for Industrial and Financial Reconstruction (BIFR). A draft Scheme was prepared and submitted by the Company to the BIFR for approval and to the Companys Bankers for their approval. At the hearing held on 05.01.2011 BIFR has dismissed the Companys application. However, the Company is yet to receive the order from BIFR to this effect. 5. OUTLOOK FOR THE CURRENT YEAR A. BUSINESS IN THE CURRENT YEAR All the mortgaged assets of the Company had been sold by the secured lenders. The said assets contained production facilities of the Company thereby completely hampering the Companys ability to manufacture goods and even doing job work. After the said sale, the Company is not having any operating assets. The Company is also not able to maintain an office and the Directors are trying to comply with formalities to the best of their personal capacities. All the employees/workers of the Company had also resigned. The Company is not carrying on any activity at present. The Company has still to pay large amount to banks and other Secured and Unsecured creditors. The Company does not have funds to maintain its office also and at the courtesy of director a postal address is maintained for collecting correspondence. It is not in a position to meet its statutory and other daily expenses. 6. AUDITORS NOTES AND OBSERVATIONS: Auditors have made certain observations in their report. These have been appropriately dealt with in the notes to accounts which are self- explanatory. 7. FIXED DEPOSITS: The outstanding fixed deposits as on March 31, 2012 aggregated to Rs.12.63 crores towards Principle and Rs. 2.47 crores towards interest. The Company has repaid fixed deposits of Rs.17 cr. approx.(7665 folios) during the period from 2002 to date due to persistent efforts of Directors. Efforts had been made to the effect that part of the funds received by the Company during the period had been used towards repayment of fixed deposits. It is the Companys intention to pay the small depositors as early as possible and the draft Scheme submitted to BIFR had been prepared with this in mind. But under the circumstances, as narrated above the task now seems impossible. 8. ADDITIONAL INFORMATION: In terms of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant information is given below: A. Conservation of Energy: The Company is not carrying on any activity at present and hence it is not applicable. B. Technology Absorption, Adaptation and Innovation: Not Applicable C. Foreign Exchange Earnings and Outgo: i) Activities relating to exports: NIL ii) Foreign Exchange earned and used: NIL 9. PARTICULARS OF EMPLOYEES: There were no employees drawing a remuneration exceeding Rs. 60 lacs per annum when employed for the whole year or Rs. 5 lacs per month when employed for part of the year and hence, no disclosure under Section 217(2A) of the Companies Act, 1956 is made. 10. DIRECTORATE: Mr. Haresh A. Bhojwani retires by rotation and being eligible offers himself for reappointment. Mr. S. R. Hemmady resigned as Whole-time Director and Secretary of the Company w.e.f.1.8.2012 but remains as a Director. 11. AUDITORS: M/s Bhangaria & Co, Chartered Accountants, the Auditors of the Company retire at the ensuing Annual General Meeting and are eligible for re- appointment. 12. DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to Section 217(2AA) of the Companies (Amendment) Act, 2000, the Board of Directors of the Company confirms: I. that in the preparation of the annual accounts, the applicable Accounting Standards have been followed and there has been no material departure; II. that the selected accounting policies were applied consistently and the directors made 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 on March 31, 2012 and of the loss of the Company for the period ended March 31, 2012. III. that proper and sufficient care has been taken 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; IV. that the annual accounts have been prepared on a going concern basis despite sale of assets of the Company by secured lenders, 13. CORPORATE GOVERNANCE: A note on Corporate Governance along with a Certificate from Auditors is annexed and forms part of the Directors Report. Registered Office: For and on behalf of the Board of Directors, Plot No.1&2, Jijamata Nagar, SIL BUSINESS ENTERPRISES LIMITED, Nashik Road-422 101. Date: August 23,2012. DIRECTORS MANAGEMENT DISCUSSION AND ANALYSIS: BUSINESS REVIEW: As explained earlier in the Directors report and in view of sale of all the assets, the Company does not foresee any fruitful business activity taking place in the near future. RISK AND OUTLOOK The Company is not very optimistic about its future. The Company has been declared a sick unit. In view of the fact that the assets of the Company had been sold by secured lenders the outlook for the Company seems to be very bleak.