haryana petrochemicals ltd Directors report

HARYANA PETROCHEMICALS LIMITED ANNUAL REPORT 2001-2002 DIRECTORS REPORT The Members, Your Directors present the Twentieth Annual Report and the Statement of Audited Accounts of the Company for the year ended 31st March, 2002. THE STATE OF THE COMPANY Presently winding up proceedings with respect to the Company are pending in the Honble High Court of Punjab & Haryana at Chandigarh- Official Liquidator had been appointed. Some of the creditors have also filed winding up petitions in a few courts. Various other court cases have also been filed against the Company by the financial institutions, bankers, short term lenders, old employees of the Company, Income Tax Department. Excise and Sales Tax Departments etc. which are subjudice in various courts. Discussion are in the process with IFCI Ltd. for the rehabilitation of the Company and/or appropriate restructuring of the dues of all the secured creditors and others. DIVIDEND Since the Company has incurred losses during the year under review, the Directors do not recommend any dividend for the year 2001-2002. FIXED DEPOSITS The Company has neither accepted nor invited any fixed deposits during the year under review under Section 58A of the Companies Act, 1956 and the rules framed thereunder. INSURANCE Due to financial constraints insurance cover is inadequate. AUDITORS M/S B. Gupta & Co., Chartered Accountants, Statutory Auditors of the Company, retire at the conclusion of this Annual General Meeting and being eligible, offer themselves fur reappointment. They have also conveyed their willingness and eligibility in terms of Section 224(1B) of the Companies Act, 1956. Your Directors recommend their appointment as Auditors of the Company to hold office of the Auditor from the conclusion of this Annual General Meeting upto the conclusion of next Annual General Meeting. PARTICULARS OF EMPLOYEES There has been no employee who was getting the remuneration in excess of the prescribed limits under Section 217(2A) of the Companies Act, 1956. Therefore, the information as required under Section 217(2A) of the Companies Act. 1956 read with Companies (Particulars of Employees) Rules, 1975 has not been furnished. DEMATERIALISATION OF SHARES SEBI has included the name of your Company in the compulsory Demat category and your Company has already established connectivity with both the Depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In lieu of numerous advantages of Depository System members are requested to &,,ail the facility of dematerialisation of the Companys shares on either of the Depositories. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The Company has not carried on any manufacturing activity and part of the plant of the Company has been given on lease and the manufacturing activities are being carried on by the Lessee. Therefore, the information required under Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 has not been giver. Their was no foreign exchange earnings and/or outgo during the year under raview. DIRECTORS In accordance with the Articles of Association of the Company and provisions of the Companies Act, 1956 Dr. S. Baskar, Director of the Company is due to retire by rotation and being eligible has offered himself for re-election. AUDITORS COMMENTS ON THE ACCOUNTS 1. Point No. 6 (a, c, f, h, i) of the Auditors Report : The Companys entire manufacturing activities get closed in July, 1998 due to the circumstances beyond the control of the Management. The employees of the Company left the Company in a very disorderly manner without handing over the charge of papers / documents and assets etc. due to which the functioning and operations of the Company were adversely affected on all fronts. However the Company has been carrying out various initiatives on all fronts to restore the Companys records and to streamline the functioning and operations of the Company. 2. Point No 6 (b) of the Auditors Report: The Company has been suffering continuous losses over number of years. Since the company has not been able to meet its earlier commitment of repayment of principal and interest. It would not be prudent to add further interest burden on the Company which may be subsequently unserviceable. 3. Point No 6 (e) of the Auditors Report: Since the Company had become a sick Industrial unit and the winding up proceedings are pending with the Honble High Court of Punjab & Haryana at Chandigarh, the Company has not received any confirmation of balances from institution. during the year. 4. Point No 6 (g, i, j) of the Auditors Report: The operations of the Company have been closed since July 1998. This matter would be dealt with at the time of restructuring of the debts of the Company. 5. Point No 6 (k) of the Auditors Report: Since the manufacturing activities are closed since July, 1998, the inventories have become redundant and obsolete with the passage of time. 6. The Company did not start the Internal Audit System due to financial hardship faced by the Company. 7. All other comments/qualifications on the accounts have been adequately explained in notes to accounts and no further explanations are required. LISTING OF SECURITIES The securities of the Company are listed at the Delhi Stock Exchange (Regional Stock Exchange) and The Stock Exchange, Mumbai. The listing fee has not been paid to the Stock Exchanges due to tight liquidity crunch in the Company. DIRECTORS RESPONSIBILITY STATEMENT As required under Section 217(2AA) of the Companies Act, 1956, your Directors state: (1) That in the preparation of the annual accounts, the applicable accounting standards have been followed ; (2) That the accounting policies selected and applied are consistent and the judgements and estimates made 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 and of the profit or loss of the Company for that period; (3) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of tile Company and for preventing and detecting fraud and other irregularities; (4) That the annual accounts have been prepared on a going concern basis. CORPORATE GOVERNANCE Your Company was a Sick Industrial Undertaking and the Honble Board for Industrial and Financial Reconstruction (BIFR) has recommended the winding up of the Company to the Honble High Court of Punjab & Haryana at Chandigarh. Presently the winding up proceedings are pending with the Honble High Court of Punjab and Haryana at Chandigarh- The Management is committed to implement the requirements of Corporate Governance as soon as the pending legal issues/ matters are sorted out and streamlined. ACKNOWLEDGEMENT Your Directors gratefully acknowledge the trust and confidence reposed by the esteemed Shareholders in the Company. Your Directors also place on record their sincere thanks for the efforts and co-operation put in by those persons who have contributed towards the revival of the Company. For and on behalf of the Board For HARYANA PETROCHEMICALS LIMITED Date : 24.08.2002 (RAJIV AGGARWAL) Place : New Delhi Chairman