nepc agro foods ltd Directors report
PUNJAB FIBRES LIMITED
ANNUAL REPORT 2006-2007
DIRECTORS REPORT
To
The Shareholders
Your Directors are pleased to present their 27th Annual Report with the
audited Statement of Accounts for the year ended 31st March, 2007 and the
Auditors Report thereon.
OPERATIONS:
During the past couple of years, the Indian Textile Industry had been
facing tough competition in domestic as well as the international markets.
Resultantly, the huge losses suffered by the industry had thus forced a
large number of spinning units to virtually wind up their operations.
However, the dismantling of quote regime has triggered opening up of the
market, offering newer opportunities for the Indian yarn manufacturing
industry. The Indian Textile Industry virtually is now in the grip of
globalization and is continuously on the look out to acquire sick units
even in the U.S., Europe, Middle East, and Africa and in other neighbouring
countries. According to the current trends, a strong performance of the
developing Asian suppliers of clothing to the key markets is now,
therefore, expected to continue. Thus, the company foresees a bright
business opportunity in the years ahead. Meanwhile, pending settlement, and
with a view to maintain a minimum level of operations in order to avoid any
deeper crisis, the Company continues to engage a part of its installed
capacity on a Job-Work arrangement.
FINANCIAL RESULTS:
Current Year Previous Year
Rs. Rs.
Profit/(Loss) before Financial
Expenses and Depreciation 32,44,361 65,18,670
Less : Financial Expenses 43,675 70,034
Profit/(Loss) after Financial Expenses 32,00,686 64,48,636
Less : Depreciation 1,51,95,475 2,04,43,929
Profit/(Loss) after Depreciation (1,19,94,789) (1,39,95,293)
DIVIDEND:
As there are no surplus for appropriation, your Directors are unable to
recommend dividend for the year under review.
WORKING CAPITAL:
Your Company continues to avail Working Capital Limits of Rs.775.00 lakhs
for its Unit-I at Viii. Rail Majra (Pb.) and Rs.925.00 lakhs for its Unit-
II at Surajpur (U.P.) from State Bank of Patiala in consortium with Punjab
National Bank. Meanwhile, the State Bank of Patiala had unilaterally and
arbitrarily proceeded to declare the name of the company and its directors
as the willful defaulters. Upon companys various representations to de-
categorize the name of the company from the list of willful defaulters, a
firm of Chartered Accountants appointed by the bankers carried out a
detailed examination of the books of account and other records and
reportedly concluded that in the light of the facts and circumstances, the
company can not be categorized as willful defaulter. Despite various
subsequent representations, the bankers have yet to take effective steps to
de-categorize the name of the company from the list of willful defaulters.
DIRECTORS:
Shri Sita Ram Agarwal, Director of the Company retires by rotation and
being eligible, offers himself for re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956,
your Directors confirm that:
i) In the preparation of the annual accounts the applicable accounting
standards have been followed along with proper explanations relating to
material departures;
ii) Appropriate accounting policies have been selected and have applied
them consistently and 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 at the end of the financial year 2006-2007 and the profit or loss
of the Company for that period;
iii) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act for safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities; and
iv) The annual accounts have been prepared on a going concern basis.
DEMATERIALISATION OF SHARES:
The equity shares of your Company have been included in the list in which
trading is compulsory in dematerialized form for all the shareholders of
the Company. The Companys request for dematerialization of shares has been
deferred by the National Securities Depository Limited.
COMMENTS ON AUDITORS REPORT:
Appropriate disclosures have been made in Schedule 17 under the heading
Notes to the Accounts vide Note Nos. 2 (v), (vi), (xi), (xii), (xviii)
(a) to (d) , 3(iv) (a) to (c), (v), 4, 5, 6, 7(ii), 8(ii), (iv) and 10 as
regards the qualifications made by the statutory auditors in their report
dated August 28, 2007 on the Balance Sheet and Profit & Loss of the company
for the year under review. The company has been declared a sick industrial
company during the year under review under the provisions of Sick
Industrial Companies (Special Provisions) Act, 1985. Keeping in view the
same, certain reliefs and concessions are anticipated from the concerned
lenders/Govt. departments. Thus, certain provisions relating to interest on
term loans, working capital loans, promoters loans, interest free loans
from Punjab Govt, and disputed demands of Central Excise, Customs,
Employees State Insurance Corporation, Provident Fund Organization etc.
have not been made in the Profit & Loss Account. However, the same have
been duly clarified/quantified in the Balance Sheet under Schedule 17 of
Notes to the Accounts. Further, the continued cash crunch has restricted
the company to pay the undisputed demands quantified under para 9 of the
Annexure to the Auditors Report. However, the rehabilitation/revival
scheme envisaging payment of such arrear of dues, subject, however, to
certain reliefs and concessions, is under consideration of the secured
lenders under the aegis of BIFR and the company expects their requisite
approval shortly.
STATUTORY AUDITORS:
M/s. S.C. Dewan & Company, Chartered Accountants, S.C.O. 90, 1st Floor,
Swastik Vihar, Panchkula -134109 retire and are eligible for re-appointment
as Statutory Auditors of the Company.
ACKNOWLEDGMENT:
Your Directors wish to place on record their deep gratitude to the
consumers of the Companys products for their patronage, the all India
Financial Institutions for their consistent guidance and co-operation and
to the Bankers, the Suppliers and the Trading Community for their support
and assistance as rendered to the Company from time to time.
PERSONNEL:
The relations between employees and the management have been exemplary. The
Directors record their warm appreciation for the dedication, hard work and
efficiency of all the employees. There are no employees who are in receipt
of salary exceeding the limits prescribed under Section 217(2A) of the
Companies Act, 1956.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
AND OUTGO:
The information as required to be disclosed under Section 217(l)(e) of the
Companies Act, 1956 read with the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 is given in the Annexure to
this report.
On behalf of the Board
(PADAM KUMAR JAIN)
Chairman & Managing Director
New Delhi August 28, 2007
Annexure to Directors Report
INFORMATION AS PER SECTION 217(l)(e) READ WITH COMPANIES (DISCLOSURE OF
PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988, AND FORMING
PART OF THE DIRECTORS REPORT FOR THE YEAR ENDED 31ST MARCH, 2007.
1. CONSERVATION OF ENERGY:
Energy conservation measures taken:
The Company has formed a strong technical team consisting of senior
personnel to avoid wasteful consumption and execute energy conservation
schemes.
2006-2007 2005-2006
A) Power & Fuel Consumption:
1. Electricity:
a) Purchased:
Unit (in Thousands) 10,193.88 10,377.48
Total Amount (Rs. in Lakhs) 374.45 381.38
Rate/Unit (Rs.) 3.67 3.68
b) Own Generation:
i) Through Diesel Generator Unit (in Thousands) 679.19 275.23
Unit per litter of Diesel Oil 3.40 3.40
Cost/Unit (Rs.) 9.03 7.92
ii) Through Steam Turbine/Generator Nil Nil
2. Used for Generation of steam in Boiler
i) Coal
Quantity (Tonnes) Nil Nil
Total Cost (Rs. in Lakhs) Nil Nil
Average Rate (Rs. Per Unit) Nil Nil
ii) Diesel Nil Nil
3. Others Nil Nil
B) Consumption per unit of production
Product: Cotton-Viscose-Synthetic
Blended Spun Yarn
Electricity (Unit/Kg.) 2.66 2.67
Furnace Oil (Ltrs.) Nil Nil
Coal-Steam (Kgs.) Nil Nil
2.TECHNOLOGY ABSORPTION:
The Company has no activities relating to technology absorption.
3. FOREIGN EXCHANGE EARNINGS AND OUTGO:
The details of Foreign Exchange earnings and outgo during the year are as
under.
(Rs. in Lakhs)
2006-2007 2005-2006
Earnings Nil Nil
Outgo Nil Nil
On behalf of the Board
(PADAM KUMAR JAIN)
Chairman & Managing Director
New Delhi August 28, 2007