podar mills ltd Management discussions

THE PODAR MILLS LIMITED ANNUAL REPORT 2007-2008 MANAGEMENT DISCUSSION AND ANALYSIS WORKING DURING THE YEAR: During the year under report the company had a turnover of Rs. 2015 lacs, which includes turnover of Rs. 2000 lacs in Real Estate Business. The Real Estate market is showing a recessionery trend and hence there is are very little business activities during current year. The various complex issues arising out of provisions of Textile Undertakings (Taking Over of Management) Act, 1983 and Textile Undertakings (Nationalization) Act, 1995 are not yet sorted out. It has not been possible to determine several legal and accounting issues as yet. Your Directors are making all efforts, under advice, to resolve the same. However, the company has made full provision toward diminution in the value of Assets of the Two Textile undertaking which has been Nationalised by the Central Government. The Company has challenged the constitutional validity of the Textile Undertakings (Nationalization) Act, 1995 and of the compensation amount provided under the said Act for the acquisition of the Companys assets, as the same is too low considering the value of the said assets. The commissioner of payments appointed by the Central Government under the provisions of Textile Undertakings (Nationalization Act 1995) has started the process of adjudication of various claims in respect of Companys Textile Undertaking. However, the said adjudication process is stayed by the Honble Bombay High court on an application by the company, as the Nationalisation Act itself is under challenge by the company. The Company continued the business of running small scale textile unit. INSURANCE: In view of the provisions of the Textile Undertakings (Nationalization) Act, 1995, insurance in respect of the Undertakings, which are nationalized, is not being taken out by the Company. All other Fixed Assets are adequately insured. WINDING UP PETITION UNDER SECTION 433/434: Winding up petition have been filed against the Company by some of the Creditors. The Company has been advised that under the provisions of the Textile Undertakings (Taking Over of Management) Act, 1983/Textile Undertakings (Nationalization) Act, 1995, no proceedings for the winding up of the Company or for the appointment of a Liquidator or Receiver in respect thereof can lie in any Court, except with the consent of the Central Government.