jaybharat fabrics mills ltd Directors report

JAYBHARAT FABRICS MILLS LIMITED ANNUAL REPORT 2004-2005 DIRECTORS REPORT To The Members, Your Directors have pleasure in presenting the 29th Annual Report together with Audited Statement of Accounts of the Company for the period ended on 31st March, 2005. FINANCIAL RESULTS Current Year Previous Year 2004-2005 2003-2004 (Rs.in lacs) (Rs. in Lacs) Gross Profit/(Loss) (54.66) (7.83) Less : Depreciation & Interest 75.84 89.37 Profit/(Loss) Before Tax (130.50) (97.20) Less : Provision for Taxation - - Net Profit/(Loss) (130.50) (97.20) Less : Provision for Tax for previous years - 2.98 Profit/(Loss) after taxes (130.50) (100.18) Add: i) Profit /(Loss)from previous year brought forward (2957.01) (2856.83) Balance to be carried forward (3087.51) (2957.01) OPERATIONS The turnover and other receipts of the Company for the Year under review has resulted to Rs. 7.51 Crores as compared to Rs. 1.5 Crores for the Previous year. The (Loss) after interest, depreciation and taxation was Rs. (130.50) sacs as compared to Rs. (100.181 lacs during the previous year. The market was continuously in bad shape, however company tired its level best to earn profit and started some trading activities also. The company expects that the market should improve in the current year as well as in the years to come. DIVIDEND: As there are no profits during the year under review your directors are unable to recommend any dividend. DEPOSITS: During the period under review, your Company has not accepted/renewed any deposit, which is covered under the provisions contained in Section 58A of the Companies Act, 1956, from the public. DIRECTORS: Shri Anil Kumar A. Shukla retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. PARTICULARS OF LISTING OF SECURITIES Equity Shares of the Company are listed at Ahmedabad and Mumbai Stock Exchanges The fees for Ahmedabad Stock Exchange is in arrears for the year 2003-2004, 2004-2005 and 2005-2006. The fees for Mumbai Stock Exchange is in arrears for the year 2004-2005 and 2005-2006. PARTICULARS OF EMPLOYEES During the year under review, there was no employee in receipt of remuneration upto and more than the limits prescribed under the provisions contained in Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975. INDUSTRIAL RELATIONS The relations between the employees and the management continued to remain cordial during the year under review. The Directors hereby place on record their appreciation for the efficient and loyal services rendered by the employees of the Company at all levels. REFERENCE TO THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR) The Company has made a reference to the Board for Industrial and Financial Reconstruction (BIFR) and BIFR vide its order No. 3(J-7) BC/2001 dated 1st June, 2001, had registered the reference under sub-section (1) of section 15 of the Sick Industrial Companies (Special Provisions ) Act, 1985. as Case No. 240/2001, However the BIFR considered the said reference as non maintainable stating that the writting off an amount of Rs.473 lacs due from a body corporate cannot be taken into account for deciding sickness of the company hence the net worth of the company has not fully eroded as on 31-03-2001. The Company has already filed suit against the said body corporate for recovery of outstanding dues. The net worth of the company is continuously fully eroded as on 31-3-2003 also, even after considering the reversal of said disallowance of Rs.473 lakhs therefore a reference is again filed u/s 15(1), of the SIC (SP) Act, 1985, which has been registered with BIFR vide its order No. F 30(3) BC/2003 dated 9th July, 2003 registered as case No. 271 /2003, in view of the said reference, the Company has been declared sick by the Honourable BIFR and the company is in the process of submitting a rehabilition scheme to Operating Agency IDBI. APPOINTMENT OF AUDITORS The Auditors of the Company M/s. R. Choudhary & Associates, Chartered Accountants, Ahmedabad, retire at the conclusion of the ensuing Annual General Meeting and they are eligible to be re-appointed. The Company has received a Certificate from M/s. R. Choudhary & Associates to the effect that their re-appointment, if made, would be within the limits prescribed under Section 224(1B) of the Companies Act, 1956. The appointment of M/s. R. Choudhary & Associates is recommended by the Board. AUDITORS REPORT: The notes to accounts referred to in the Auditors Reports are self explanatory and therefore, do not call for any further comments. However it is stated that since the company is registered with BIFR and awaiting for proper package for rehabilitation of the company no interest is provided in the Profit and Loss Account during the year. The gratuity and other retirement benefits payable to employees are negligible therefore no provision is made in this regard, CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The information as required under the provisions contained in 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, with respect to conservation of energy, technology absorption and foreign exchange earnings/outgo is as per Annexure A enclosed herewith and forming part of this Report. DIRECTORS RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following Statement in terms of Section 217 (2AA) of the Companies Act, 1956: i) that in the preparation of the annual accounts, the applicable accounting standards have been followed except as indicated and subject to notes on accounts to the annual accounts; ii) that the directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 loss of the Company for the year under review; iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) that the directors have prepared the annual accounts on a going concern basis. CORPORATE GOVERNANCE Your Company is committed to benchmarking itself with global standards in all areas including incorporation of appropriate standards for Good Corporate Governance. Towards this end and in line with guidelines recommended by the SEBI Committee on Corporate Governance, adequate steps have been taken to ensure that all the provisions of clause 49 of the listing agreement are duly complied with, however there may be some short compliance due to paucity of fund and manpower. A report on Corporate Governance along with the Auditors Statement on its compliance is annexed as Annexure B and C to the Directors Report , APPRECIATION: Your Directors wish to express their deep sense of appreciation to all the employees of the Company for their excellent support and co-operation in achieving the organisational goals during the year under review. Your Directors also wish to acknowledge the co-operation and assistance received from the valued customers, suppliers, Banks, Financial Institutions and various Government, Semi-Government and other Authorities. Last but not the least, your Directors would like to place on recur d their appreciation to all the shareholders for their continued confidence in the Company. For and on behalf of the Board Ashokkumar S. Gajjar Chairman & Whole time Director Date : 1st September, 2005 Place : Ahmedabad ANNEXURE A Particulars of Conservation of Energy, Technology Absorption and foreign exchange earnings and outgo 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 forming part of the Directors Report for the Year ended 31st March, 2005. 1. CONSERVATION OF ENERGY (a) Energy Conservation Measures Taken Conservation of energy has always been an area of priority in the Companys operations. The Company could not able to focus on installation of energy efficient machinery and processes due to paucity of funds. FORM A DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY POWER & FUEL CONSUMPTION 1. Electricity : Current Year Previous Year (2004-05) (2003-04) a) Purchased Units (in lacs) 5.19 1.41 Total Amounts (Rs.) 2878903 781244 Minimum Service Charges - - Rates/Unit (Rs.) 5.55 5.53 b) Own Generation i. (Through Diesel Generator) Diesel Consumed (ltrs) NIL NIL Total Amount (Rs.) NIL NIL Cost/Ltr. (Rs.) NIL NIL ii. (Through Wind Turbine Generator) (Units in lacs) 1.59 2.55 c) Furnace Oil consumed LDO consumed (Ltrs.) NIL NIL Total Amount (Rs.) NIL NIL Cost/Ltr. (Rs.) NIL NIL FORM B II. RESEARCH & DEVELOPMENT The Company has nD specific Research and Development department. However, the Company does have a quality Control Department to keep a check and maintain the quality of different products manufactured but no new capital expenditure could be made due to financial crunch. III. TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION The Company was not able to keep itself updated with all latest technological innovations to reduce cost and to improve performance, quality as well as efficiency due to financial crunch IV. FOREIGN EXCHANGE EARNINGS/OUTGO (Rs. In Lakh) Current Year Previous Year (2004-05) (2003-2004) Foreign Exchange Earnings : NIL NIL Foreign Exchange Outgoings : (import of Chips/Poy) 415.08 NIL For and on behalf of the Board Ashokkumar S. Gajjar Chairman & Whole time Director Date : 1st September, 2005 Place : Ahmedabad