sajjan textiles mills ltd Directors report

SAJJAN TEXTILES MILLS LIMITED ANNUAL REPORT 2000-2001 DIRECTORS REPORT To The Members, Your Directors have pleasure in presenting the 11th Annual Report of the Company together with the Audited statement of Accounts for the year ended on 31st March, 2001. DIVIDEND: In view of loss suffered by the Company during the year, the Directors regret their inability to recommend any Dividend. OPERATIONS During the year under review, the Company have started its TFO operations on job work basis and earned job charges to the tune of Rs. 43.76 Lacs. PRESENT STATUS OF REFERENCE TO B.I.F.R. As you are aware that the Board for Industrial and Financial Reconstruction has declared the unit as Sick Industrial unit under Section 3(1) (O) of Sick Industrial Companies (Special Provisions) Act, 1985 vide its Order dated 6th August 1998. The I.C.I.C.I. Ltd., has been appointed as operating Agency for Rehabilitation. The Board has directed the company to submit its Rehabilitation Scheme. On the hearing fixed on 13th October 2000, The Board directed the Operating Agency to explore the possibilities of change in the management of the Company and had also suggested to the Operating Agency to issue advertisements in two leading National Dailies for a bidder, who would submit rehabilitation proposal by 31st March, 2001. In response to the advertisements in the Economic Times on 26.12.2000 and in the Hindu on 22.12.2000, there were no bidders. In the absence of any bidders, the Company is running the unit on job work basis till today, of which the Operating Agency, Banks and Financial Institutions are fully aware of. The Company submitted to the Operating Agency its own Techno-Economic Viability Study Report on 30-11.2000 profitability Projections on 20.02.2001 and also Feasibility Study Report prepared by a conultant appointed by the Company- M/s Gherzi Eastern Ltd., on 25.8.2001. In the joint meeting held on 8.6.2001 by the operating Agency, banks and Financial Institutions, the rehabilitation package submitted by the Company has been discussed. During the discussion, the Operating Agency and other consortium members arrived at a conclusion that it is not possible for the company to bring in upfront payment - No Lien Deposit of Rs. 25 Lacs as directed by BIFR. In view of this, the Operating Agency placed before the consortium, two alternate proposals. It was also suggested in the meeting by the Operating Agency that the company will submit their own proposal for One Time Settlement (OTS) of 100% of the principal of Rs. 1078.64 Lacs in full and final settlement of dues. In response to this, the Company has now submitted the OTS proposal on 25.08.2001 to the Operating Agency, Banks and Financial Institutions towards settlement of 70% of principal dues. A decision in the matter is awaited. But due to delay in submission of rehabitation proposal, the Board directed to issue show cause Notice for winding up of the Company u/s 20 (1) of the Act. The matter will be heard on 5th October, 2001. Your directors have clear and honest intention to revive the unit. PROCESSING UNDER FERA AND DE-CAUTION LISTING The Enforcement Directorate of FERA have initiated proceedings on the Company and its Directors under Section 18(2) and 18(3) of FERA 1973 due to long outstanding of Export Bills of Basic Happy Ltd., U.K. based on a letter dated 23rd March, 1996 from Reserve Bank of India. The Enforcement Directorate examined Directors of the Company and heard their depositions and being convinced that the non realisation of export bills was beyond the control of the Company and its Directors, dropped the charges against the company and its Directors. Due to above reason, the company was put on caution list vide Reserve Bank of Indias order dated 23rd May 1996. However, the name of the Company was removed from caution list vide Reserve Bank of Indias Order dated 25th June, 1999 passed under Section 18(9) of FERA 1973. FUTURE PLANS: During the year under review, your Company have started its TFO operations on Job work basis and the same is running very well till today. Your company have also planning to start its Loom Plant subject to arrangement of working capital in near future. PUBLIC DEPOSITS The Company has not accepted any deposits from the public during the year. DIRECTORS Shri. Suresh S. Jhunjhunwala Director of the Company retires by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for re-appointment. AUDITORS The term of M/s. S. C. Mehra & Associates, Chartered Accountants, as Auditors of the Company expires at the conclusion of this Annual General Meeting and they are eligible for re-appointment. AUDITORS REPORT: The observations and remarks given by the Auditors in their Audit Report have been explained by giving suitable Notes to the Accounts and therefore in the opinion of the Directors do not require further clarifications. PARTICULARS OF EMPLOYEES The Company has not employed any employee during the year under review, whose remuneration was in excess of the limits prescribed Under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975. Therefore the details for the same is not required to be given. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information required Under Section 217 (i) (e) of the Companies Act, 1956 read with the Companies (Disclosure of the Particulars in the Report of Board of Directors) Rules, 1988 in respect of conservation of Energy, Research and development, technology absorption is not required to be given as Company did not carry out any manufacturing activity during the year ended 31st March, 2001. The Company has no incoming or outgoing of foreign exchange. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to section 217 (2AA) of the Companies Act, 1956, the Directors confirm that : i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made from the same. ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company as at March, 31, 2001 and of the profit of the Company for the said period. iii) to the best of the knowledge and information they have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and preventing and detecting fraud and other irregularities. iv) they have prepared the accounts on a going concern basis. ACKNOWLEDGEMENT: Your Directors wish to express their thanks to the Members of the Company for their continuing confidence in the Management and the Company. For and on behalf of the Board Shyamsunder B. Jhunjhunwala Chairman Place: Mumbai Date : 3rd September, 2001.