sree uma parameswari mills ltd Directors report

SREE UMA PARAMESWARI MILLS LIMITED ANNUAL REPORT 2002-2003 DIRECTORS REPORT TO THE SHAREHOLDERS Ladies and Gentlemen, Your Directors present this 68th Annual Report together with the Audited Accounts for the year ended 31st March, 2003. FINANCIAL RESULTS FOR THE YEAR Rs. in 000 OPERATING LOSS 1,45,44 Add : Interest 1,69 GROSS LOSS 1,47,13 Add : Depreciation 1,03,68 LOSS FOR THE YEAR 2,50,81 Add : Balance brought forward 24,14,38 Bonus paid for prior years 23,66 Prior year expenses 8,96 Share issue expenses written off 2,95 27,00,76 Less: Excess Gratuity provision reversed 5,99 Balance of Loss 26,94,77 The above lose of Rs.26,94,77,000/- is to be carried forward to the Balance Sheet. Due to heavy loss incurred during the year, your Directors are unable to declare any dividend for the year. ABOUT THE INDUSTRY The Indian Textile Industry has not yet come-out of the prolonged recession. The prospects of the Industry are not encouraging. STATUS UNDER BIFR/AAIFR The Honble Board for Industrial and Financial Reconstruction (BIFR/ ordered for winding up of the Company vide its Order dated 1st April, 2003 and the Company preferred an Appeal before the Honble Appellate Authority, for Industrial and Financial Reconstruction (AAIFR). The said Appeal is registered and yet to be heard by the, Humble AAIFR. In the mean time, the Company has submitted its revised Rehabilitation proposal to the Honble AAIFR, The Industrial Development Bank of India (IDBI), the Operating Agency and the Indian Overseas Bank (IOB). REVIEW OF OPERATIONS The Company started refunctioning from 1st May, 2002. During the year under review, the Company has done conversion jobs with the Gensets. In view of the escalated SKO prices and the unremunerative conversion charges, the Company incurred the loss as above referred. AUDITORS CERTIFICATE UNDER CLAUSE 49 OF THE LISTING AGREEMENT Since the Company has gone to BIFR/AAIFR, it could not comply with the requirements of Clause 49 of tasting Agreements with the Stock Exchanges regarding Corporate Governance. OUTLOOK The Company got the E.B. connection in end April, 2003 and is paying the remaining arrears in installments. The Company is hopeful of paying the other dues from the year 2004-05 onwards. After getting the approval from the Honble AAIFR for the revised rehabilitation programme being perused by the IDBI and IOB, the Company is hopeful for its revival and to come back to normally within the projected period of 7 years. FIXED DEPOSITS 87 Fixed Deposits amounting to Rs. 20,47,000/- were remaining unclaimed as on 31st March, 2003. An amount of Rs. 11,500/- has since been paid. DIRECTORS Mr. S. Nakkiran retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. AUDITORS Mesars M.S.Jagannathan & Visvanathan, Auditors retire at the ensuing. Annual General Meeting and they are eligible for reappointment. CASH FLOW STATEMENT AND LISTING The Cash Flow Statement as required by Clause 32 of Listing Agreement is annexed. The Company could not pay the tasting Fees for the years ended 31.03.2002 and 31.65.2003 to the Coimbatore and Mumbai Stock Exchanges due to the poor financial position of the Company. The Company will pay the same once the financial position improves. EMPLOYEES Furnishing the statement showing the details of employees as required under section 217(2A) of the Companies Act, 1956 does not arise as none of the employees was in receipt of remuneration for the year exceeding the prescribed limit of Rs. 2,00,000/- per month or Rs.24,00,000/- per annum. Particulars under Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure to this Report. DIRECTORS RESPONSIBILITY STATEMENTS Your Directors report that 1) The Annual Accounts have been prepared by following the applicable standards except Accounting Standard Nos. 1 & 13. 2) The accounting policies selected have been applied consistently and judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as at the end of the financial year and of the loss of the Company for the financial year. 3) 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 the Company and for preventing and detecting-fraud and other irregularities. 4) The Annual Accounts have been prepared on a going concern basis. For and on behalf of the Board of Directors, Place : Salem, R.SUBRAMANIAM Date : 14th November, 2003. Chairman. ADDENDUM TO DIRECTORS REPORT Regarding the Auditors remarks for: 1) Non-reconciliation/ confirmation of balances of Sundry Debtors, Sundry Creditors, Loans and Advances and Financial Institution, Note No. 7 is self-explanatory. 2) Non-payment of PF and ESI dues for the year ended 31,03,2000, 31.03.2001 and 31.03.2002 amounting to Rs. 1,00,40,640/- end Rs. 28,38,204/- respectively, Note No. 8 a) is self-explanatory. 3) Non-payment of I.O.B Workers Consumer Lean up to 31.03.2003 amounting to Rs. 2,83,204/-, Note No. 8 b) is self-explanatory. 4) Non-payment of Provident Fund Loan Recovery from workers up to 31.03.2003 amounting to Rs.3,00,407/- Note No, 8 c) is self-explanatory. 5) Non-payment of LIC Salary Saving Scheme of workers and staff up to 31.03.2003 amounting to Rs.12,34.520/-, Note No. 8 d) is self-explanatory. 6) Non-provision of Carrying Charges upto 31.03.2002 amounting to Rs.87,33,609/-, Note No. 10 a) is self-explanatory. 7) Non-provision of Interest payable to Hank and Financial Institution for the year ended 31.03.2000, 31.03.2001 and 31.03.2002 amounting to Rs.4,43.25,586/-, Rs.4,63,74,315/- and Rs.4,64,86,221/- respectively, Note No. 10 b) is self-explanatory. 8) Non-provision of interest on Inter-Corporate Deposits, Directors loan and other Deposits for the year ended 31.03.2000, 31.03.2001 and 31.03.2002 amounting to Rs. 17,11,134/-, Rs.18,07,038/- and Rs. 24,65,282/- respectively, Note No. 10 c) is self-explanatory. 9) Non-provision of interest. on Hire Purchase loan for the year ended 31.03.2000 and 31.03.2001 amounting to Rs.38,81,159/- and Rs.7,04,441/- respectively, Note No. 10 d) is self-explanatory. 10) Non-provision of Bad and Doubtful Debts and Advances amounting to Rs.5,09,23 916/- and Rs.58,59,378/- respectively, Note No. 11 a) is self- explanatory. 11) Non-provision for interest on Secured Loans from Financial Institution and Bank for the year ended 31.03.2003 amounting to Rs.4,65,07,100/- Note No. 11 b) is self explanatory. 12) Non-provision of interest on Inter Corporate Deposits, Directors Loan and other deposits for the year ended 31.03.2003 amounting to Rs.27,35,831/- Note No. 11 c) is self explanatory. 13) Non-provision of minimum bonus, if any, for the year ended 31.3.2003, Note No. 12 a) is self-explanatory. 14) Non-provision of diminution in value of investments, Note No. 12 b) is self-explanatory. 15) Non-provision of Interest on Interest, Penal Interest and other charges, if any, for Bank and Financial Institutions, Note No. 12 c) is self-explanatory. 16) Non-reconciliation of Central Excise Duty accounts, Note No. 12 d) is self-explanatory. 17) Writing off of Deferred Revenue Expenditure (Public Issue expenses) amounting to Rs.2,95,250/- during the year which is 1/10th of the expenses, Note No. 13 is self-explanatory. 18) Non-remittance of Share Application Money amounting to Rs.1,47,105/- which was lying unchitned beyond 7 years to the Investor Education and Protection Fund within the due date (22.06.2002) as mentioned in the Act, Note No. 15 is self explanatory. 19) Charging of prior year expenses amounting to Rs.8,95,686/-, Note No. 19 is self-explanatory. Per and on behalf of the Board of Directors, Place : Salem, R.SUBRAMANIAM Date : 14th November, 2003. Chairman. ANNEXURE Forming part of the Report of the Board of Directors for the year ended 31st March, 2003. Particulate as required under Rule 2 of the Companies (Disclosure of Particulate in the Report of Board of Directors) Rules, 1988 made under Section 217(1)(e) of the Companies Act, 1956. FOAM Fount for disclosure of particulate with respect to Conservation of Energy. A. POWER AND FUEL CONSUMPTION Current Previous Year Year ended Year ended 1. Electricity 31.03.2883 31.03.2002 (a) Purchased Units NIL NIL Total Amount (Rs.) NIL NIL Rate per Unit (Rs.) NIL NIL (b) Own Generation (i) Through Diesel Generator Units 88,3,743 NIL Units per litre of Diesel 3.26 NIL Cost/Unit (Rs.) 4.43 NIL (ii) Through Steam Turbine/Generator NIL NIL 2, Coal NIL NIL 3. Furnace Oil NIL NIL 4. Other/Internal Generation NIL NIL B. CONSUMPTION PER UNIT OF PRODUCTIONS: Current Year Previous Years year Ended Year Ended Year Ended 31.03.2003 31.03.2002 31.03.2001 Yarn produced (Kg) 29,74,861 NIL 27,27,566 Electricity Consumed (Units) 88,63,743 NIL 75,09.895 Electricity Consumed per Kg. of Yarn (Units) 3.03 NIL 2.75 PARTICULARS OF TECHNOLOGY ABSORPTION: The Company has no R & D Division. PARTICULARS ON FOREIGN EXCHANGE AND OUTGO: NIL For and on behalf of the Board of Directors, Place : Salem, R.SUBRAMANIAM Date : 14th November, 2003. Chairman.