movilex irrigation ltd Directors report

MOVILEX IRRIGATION LIMITED ANNUAL REPORT 2002-2003 DIRECTORS REPORT 1) FINANCIAL RESULTS (Rs. In Lakhs) Particulars Year Ending Year Ending 31.03.2003 31.03.2002 Turnover 1197.14 3300.03 Operating Profit (PBIDT) (-) 148.11 (-) 81.35 Provision For Gratuity & Nil 39.87 leave Salary for last 20 years Interest 420.02 326.60 Depreciation 88.13 88.46 Loss before Tax (-)656.26 (-)533.28 Balance brought toward (-)1493.31 (-)513.13 Provisions, written off, Tax (-)61.55 (-)473.37 and prior period adjustments Transfer from Reserves Nil 26.47 Balance Carried Forward (-)2211.12 (-)1493.31 The operation at both the unit had to be compulsorily suspended initially due to workers non-cooperation followed by erratic demands ignoring the facts of sickness of the Company. It was impossible to resume operations as entire working capital of the Company was eroded. The Company requested to both the Secured Creditors for preparing reinstallation package end submit the some to Honble BIFR to restructure the existing debt and to provide fresh commensurating working capital finance. Failing the same, the Company engaged a merchant banker, to identify a prospective investor who could arrange for the required working capital fund etc. The Company the informed that after contracting large number of players of the industry spread all over country for strategic, none of them has shown any interest. There after, in January 2003 the Company approached again to the secured creditors for one time settlement in lumb sum for there dues based on the offer received form potential investor. The Company is time end again requesting the secured creditors for decision in the matter, however the same is pending for decision till the day. 2) REFERENCE TO BIFR UNDER SICA. The Company had made reference to the Board of Industrial and Finance Reconstruction (BIFR) u/s.15 (1) of the Sick Industrial Companies (special provision) Act, 1985 (the SICA) and obtained registration as Case No.397/2001 Dt.16/10/2001. As entire net worth of the Company continued to be eroded and therefore it continued to remain SICK, on the professional advise it made another reference to BIFR all obtained registration no.3/2003 Dt.1/1/2003 as mandatory compliance under the Act. The circumstantial factors beyond the control of the Board of Directors, which contributed towards the tragic situation, are briefly once again stated as follows : Repayment of Project Finance loan together with interest to the Institution borrowed far PVC Pipe filling project, which miserably failed. Demand recession prevailing in the economy resulting in pressure an quality and operating margins and unused surplus capacities due to aimed dropping a postponing various irrigation and health mine schemes by ft side government. Failure to adjust the end product price in line with Steep fluctuations in the raw material prices. 3) PARTICULARS OF EMPLOYEES : The particulars of employees as required under Section 217 (2-A) of the Companies Act, 1958 read with the Companies (Particulars of Employees) Rules. 1975 and U/s. 217 (1) (e) of the said Act read with Companies (Disclosure of Particulars in the Report of Directors) Rules 1988 are riot given since none of the employees were in receipt of remuneration exceeding the prescribed limits. 4) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO Particulars as prescribed 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 are given in Annexure which forms a part of the Director Report. 5) AUDITORS REPORT : The Notes No. 3 appearing in the Notes to Account referred to in the Auditors Report in respect of non-provision of disputed liability of sales tax, excise duty and Notes No. 4 regarding erosion of the net worth of the Company due to continued losses and write off and Notes No. 7 regarding absence of confirmation of balances mainly from Debtors, Creditors and Deposits are self explanatory and therefore does not call for any further comments. 6) DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT. 1956. The Board of Directors of the Company confirm : i) That in the preparation of the annual accounts for the financial year ended 31st March, 2003 the applicable accounting ate have been followed along with proper exploration misting to materiel departure. The Company had made provision for gratuity and leave salary on the basis of expert labor consultant in absence of actuarial valuation and the same is paid to employees who had tendered their voluntarily resignation. ii) That the directors have selected such accounting policies and applied them consistency and judgments and estimates that are reasonable and prudent so as to give a true and fair view of the store of affairs of the Company as at March 31, 2003 and loss of the Company for the year ended on that date; iii) That the directors have taken 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 for preventing and detecting fraud and other irregularities; iv) That the Directors have prepared the accounts on going concern basis. 7) CORPORATE GOVERNANCE The Company is registered under BIFR vide Case No. 397/2001 and Case No. 3/2003 as the net worth of he Company was completely eroded, under the circumstances it is difficult to convince any eminent person to join the Board of Directors and hence it is difficult to comply with the requirement of the Corporate Governance, pursuance to Clause No. 49 of the going agreement with the Stork Exchanges, Therefore, Company has not obtained any corporate governance report from its Auditors. 8) DIRECTOR : Shri Harshed C. Shah, Director retires at the forthcoming Annual General Meeting and being eligible, offer himself for re-appointment. The Board of Directors, recommends his reappointment. 9) AUDITORS M/s. Prakash S. Doshi & Company. Chartered Accountants, retire as the Auditors of that Company at the forthcoming Annual General Meeting end being eligible, offers themselves for reappointment. 10) PERSONNEL : The Board of Directors wishes to place on record its appreciation for all the employees and all those who were associated with the Company until they voluntarily resigned and accepted their retirement dues in full and final settlement of the accounts. The Company appeals to all those employees and workers who have yet not come forward at the earliest to receive their dues failing which the Company may not be in a position to settle their dues due to paucity of funds. 11) ACKNOWLEDGMENT Your Directors place on record their deep sense of appreciation of the services of the workers, staff and executives and the professionals, who have contributed for the management of affairs of the Company. Your Directors also thank the customers, vendors, investors, financial institutions and bankers for their continuing support. By order of the Board For Movilex Irrigation Ltd. Sd/- Place: Pune Jaswant L. Sha Date: 23rd June, 2003. Chairman ANNEXURE TO THE DIRECTORS REPORT Particulars pursuant to Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1956. (A) Conservation of Energy : The factory building of the Company is designed is such a way that it does not require any Artificial lighting during the day time, thereby it conserves the energy. The efforts to conserve and optimize the use of energy though installation of state-of-the-art machinery continue to receive priority. 1. Electricity Consumption (1) Purchased Unit Rates (Rs/KWH) 4.08 Units (Lace KWH) 10.77 Total Amount (Rs.Lacs) 43.91 (ii) Own Generation through D.G.Sets Unit Rate (Rs./KWH) 6.66 Unit (KWH Lacs) 0.09 Total Amount (Rs. Lacs) 0.60 2. Coal : Not Applicable 3. Furnace Oil : Not Applicable, 4. Consumption Per Unit of Production : Electricity : 552 KWH Per Tone of Finished Products. Other Sources : Not Applicable. (B) Research & Development : During earlier years, the company had developed open able Drippers to clean choking of contaminator deposits and make them reusable. This can be used as substitute of disposable Dripper and could thereby reduce cost to the farmer. Besides the Company had also developed and obtained ISI for the Screen Type Irrigation Filters used in Drip Irrigation Systems. The Company also had developed in-house Soli and Water Testing Laboratory. (C) Technology Absorption, Adoption and Innovation : The Company has not absorbed or adopted any technology other than that provided by the equipment suppliers who themselves have designed the plants in overseas technical collaborations, for manufacturing of Rigid PVC Pipes, Drip Irrigation Laterals, PVC Houses, SWR Pipes, PVC Fittings and HDPE Pipes. Your Company has not imported and technology during last five years. (D) Foreign Exchange Earnings and Outgo : Total Foreign Exchange Earned : Rs. Nil Total Foreign Exchange Used : Rs. Nil