global industries ltd Management discussions


GLOBAL INDUSTRIES LIMITED ANNUAL REPORT 2004-2005 MANAGEMENT DISCUSSION AND ANALYSIS The Company started operation in July 1995. In the year 1997, there was a sudden increase in the freight charges which formed more than 50% of the total cost of production of cut flowers. Consequently, the price of cuts flowers could not be increased because of severe adverse market conditions. Thereafter the company started incurring heavy losses and could not even pay interest to the concerned financial institutions / banks, which resulted in defaults in the payment of dues to the banks and financial institutions. There were also other infrastructural bottlenecks in the floriculture industry. Tata Consultancy Services was appointed by Govt. of India. Global Industries Ltd. was selected as one of the viable unit for rehabilitation package. The Govt. of India approved the recommendations as suggested by Tata Consultancy. The company was asked to submit the rehabilitation proposal to the lead financial institution based on recommended parameters. The Company submitted its proposal with proportionate contribution from promoters to HSIDC for approval. HSIDC always rejected the various proposals of the company on one or other grounds. Ultimately HSIDC while exercising its undisputed powers auctioned the companys entire project together with land and buildings situated at Sohna, at a throwaway price of Rs.136.00 lacs.