wopolin plastics ltd Directors report

WOPOLIN PLASTICS LIMITED (Formerly known as BAJAJ PLASTICS LIMITED ANNUAL REPORT 2005-2006 DIRECTORS REPORT The Directors present their Thirty-Fifth Annual Report on the affairs of the Company together with the Audited Accounts for the year ended 31st March, 2006: FINANCIAL RESULTS Rupees SALES AND OTHER INCOME 603,935,736 Gross Profit/(Loss) (40,428,914) Less: Interest 29,817,705 Depreciation 5,269,874 35,087,579 Loss before Tax 75,516,493 Provision for Fringe Benefit Tax 338,000 Loss after Tax 75,854,493 Add: Loss brought forward from previous year 1,284,724,018 Loss carried forward to Balance Sheet 1,360,578,511 DIVIDEND: Due to loss incurred by the Company, the Directors regret their inability to recommend any dividend for the year under review. WORKING & FUTURE PROSPECTS: As informed earlier, operation of the Foundry Division remains suspended. The Directors of the Company deeply regrets to inform that the operation of the Plastic Division has also been closed down. Due to labour problems and financial crunch, it was not possible to run the Company. In order to minimize the losses, the management declared lock out at the Plastic Division with effect from 28th January, 2006. Further many workers and all the supervisory staff and office staff have resigned and left the Company. As on date, the operations of both the divisions are completely closed. AUDITORS REPORT: As regards observations in Para VI of the Auditors Report, the Directors state that Note No. 6,7,8b, 10 & 11 of Schedule 14 are self explanatory. ABATEMENT OF REFERENCE FILED BY THE COMPANY WITH BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION: As informed earlier, the Honble AAIFR in its hearing held on 07th September, 2005 had remanded back the matter of the Company to Board for Industrial and Financial Reconstruction (BIFR). IDBI, ICICI, BOM and BOB assigned all their dues/rights to Asset Reconstruction Company (India) Limited (ARCIL) which amounted to 96% of the total debt of the Company. ARCIL requested Honble BIFR to abate the reference filed by the Company. On the basis of request filed by ARCIL, the Honble BIFR passed the order under which the reference in terms of the second proviso to section 15(1) of SICA stood abated. ASSIGNMENT OF DEBTS BY LENDERS TO ARCIL: As informed earlier, ICICI Bank Limited and Industrial Development Bank of India Limited (IDBI) had assigned all their dues/rights to Asset Reconstruction Company (India) Limited. In the current financial year under review, Bank of Maharashtra and Bank of Baroda has also assigned all their dues/rights to Asset Reconstruction Company (India) Limited. As on date, ARCIL holds 96% of the total debt of the Company. POSSESSION OF ASSETS OF THE COMPANY: Pursuant to the above, ARCIL has taken possession of the Companys immovable property together with all buildings, structures thereon and all the movables lying or stored therein, plant and machinery attached to the land or permanently fastened to anything attached to the land. ARCIL has started the process of realizing the Assets of the Company and has already auctioned raw material and finished goods of the Company. PARTICULARS OF EMPLOYEES: There is no employee in respect of whom particulars pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975; are required to be given. CONSERVATION OF ENERGY: The Company lays great emphasis on saving in the cost of energy consumption. Achieving reduction in the per unit consumption of energy is an ongoing exercise in the Company. Effective measures have been taken to minimise the loss of energy. TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT: The Company is always in pursuit of finding the ways and means to improve the performance, quality and cost effectiveness of its products. The technology used by the Company is updated as a continuous exercise. The Company does not have a separate Research and Development activity. FOREIGN EXCHANGE EARNINGS AND OUTGO: Details of foreign exchange earnings through exports and foreign exchange outgo on account of imports, expenditure on traveling and other matters etc. are shown in Notes No. 20, 17 & 18 respectively of Notes to Accounts. To avoid repetition members are requested to refer to these notes. DIRECTORS RESPONSIBILITY STATEMENT: As per provision of Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that: a. In the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures. b. The accounting policies have been consistently applied and reasonable and prudent judgement and estimates have been made so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2006 and the Profit and Loss Account of the Company for the period. c. Proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 has been taken for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d. The annual accounts have been prepared on a going concern basis. DIRECTORS: Shri K.V. Rathi, retire by rotation and being eligible offer himself for re-appointment. Due to the unhealthy position of the Company, all the Non Executive- Directors of the Company resigned from the Directorship of the Company. Considering the requirements of the Companies Act, 1956 the Board of Directors appointed Shri K.V. Rathi as Director of the Company. The Board places on record its appreciation for the valuable and significant contribution made by Smt. Shanta Agrawal, Shri G.R. Agarwal, Shri R.C. Sohni, Shri A.D. Bafna, Shri S.J. Daga, during their tenure as Director of the Company. AUDITORS: M/s. K.C. Agrawal & Co., Chartered Accountants, Nagpur retire at the conclusion of the ensuing Annual General Meeting and are eligible for re- appointment. LISTING OF SHARES: The Equity Shares of the Company are listed on The Stock Exchange, Mumbai and National Stock Exchange of India Limited. The annual listing fees of these stock exchanges for the financial year 2006-2007 has been paid by the Company. ACKNOWLEDGEMENT: The Directors express their thanks for the sincere and dedicated efforts put in by all the associates, workers, staff and officers during the year. For and on behalf of the Board NAGPUR H.G. BAJAJ Dated: 16th October, 2006 Chairman & Managing Director