Electrex (India) Ltd. के निदेशक की रिपोर्ट

Sep 30, 2000

The Directors herewith present the 17th Annual Report and the Audited Statement of Accounts for the financial year ended 30th September 2000.

Financial Results (Rs. in Lac)

Particulars Current Year Previous Period (12 months) (18 months)

Sales & Other Income 3693.17 8785.39

Profit/(Loss) before Interest & Depreciation (349.05) (1085.18)

Finance Charges 5180.93 6061.29

Depreciation 1236.43 1856.26

Profit/(Loss) before Tax (6766.41) (9002.73)

Profit/(Loss) after Tax (6766.41) (9002.73)

Balance brought forward from previous period (10880.45) 1429.86

Provision for Dividend Reversed - 281.63

Prior period adjustments (Net) 62.09 (3589.21)

Balance carried forward to Balance Sheet (17349.77) (10880.45)

Performance

During the year your Company has achived a turnover of Rs. 3693.17 Lac resulting into net loss of Rs. 6766.43 Lac. The loss is mainly attributable to continued higher interest burden and depreciation. The liquidity of the Company continues to be under pressure and as such Company is not able to achieve optimum production capacity though there persists ample demand for the product of the Company.

Your Directors have pleasure in informing you that your Company has successfully launched a few new models with in- house efforts. These products have good market potential and will help to improve substantially the Companys future performance.

As informed to you in the previous Directors report that in view of the dismal financial performance, the net worth of the Company has completely eroded and as such reference has been made to the Board for Industrial and Financial Reconstruction (BIFR) under section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985. Our reference has been registered by the BIFR on January 31, 2000 as case no. 49/2000. At its first hearing held on July 18, 2000, the BIFR has appointed the Industrial Finance Corporation of India Ltd as the Operating Agency (OA) under section 16(2) of the Act to prepare and submit a comprehensive report covering the various objections of the creditors and its impact on the sickness of the Company.

The BIFR has ordered that the Special Investigative Auditors (SIA) already appointed by Canara Bank should be asked to carry out further detailed audit of the Companys accounts. The SIA have submitted their report and the OA is in the process of preparing the report to call for the joint meeting of the secured lenders.

Dividend

As the Company has countinued to incur loss, your Directors are not in a position to recommend any dividend.

Fixed Deposits :

The Company has not been able to make repayment of principal deposits and payment of interest due to adverse liquidity position. As on September 30, 2000, the total overdue amount for the payment is Rs. 915.94 Lac that includes overdue interest liability of Rs. 58.39 Lac. The Company Law Board (CLB) on a batch of applications filed with it had directed the Company to repay the deposit aggregating to Rs. 26.37 Lac to 202 applicants. In view of its registration with BIFR, Company has filed an appeal in the High Court of Kamataka and obtained a stay on the Order of the CLB. In disposing another batph of 423 applications, the CLB has directed that the Company shall repay the deposits together with up-to-date interest in accordance with the Scheme which may be sanctioned by the BIFR. Legal cases

The cases filed against the Company and Directors under section 138 of the Negotiable Instruments Act, 1881 for dishonour of cheques are at various stages of hearing. The winding up petitions field by creditors under section 433 of the Companies Act, 1956 in the High Court of Karnataka have been stayed in view of the applicability of section 22 of the SICA, 1985.

Directors

a. Shri G.N. Lakshmipathi, Director who retires from the Board by rotation and being eligible offers himself for re-appointment.

b. Shri Jaidev Masand, Director who retires from the Board by rotation and being eligible offers himself for re-appointment.

c. Shri D S Lodha, Whole-time Director resigned with effect from September 2, 2000. Your Directors would like to place on record their appreciation for the contribution made by him during his tenure on the Board of the Company.

AUDITORS REPORT

a. The Auditors have observed in Para 2.5 of their report that the Directors are disqualified for appointment under clause (g) of sub-section (1) of Sec. 274 of the Companies Act, 1956. We are however advised that the provisions of Sec. 274 (1) (g) will have application after one year from the date of commencement of the Companies (Amendment) Act, 2000. Accordingly the Directors are not disqualified from being re-appointed at the ensuing Annual General Meeting.

b. The Auditors in Para 3 of their report have made certain observations on Note No. 7, 10, 11, and 12 of Schedule-S - which may please be referred for more details, as the same are self explanatory.

Debenture Redemption Reserve

In view of the inadequacy of profit, no reserve has been created.

Auditors

M/s. T. R. Chadha & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and are eligible for re- appointment.

Particulars of Employees

A Statement containing the particulars of employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with relevant Rules made thereunder, has been given in the Annexure, which forms part of this Report.

Directors Responsibility Statement.

In terms of Section 217 (2AA) of the Companies Act, 1956 inserted by the Companies (Amendment) Act, 2000, your Directors report that

i) in the preparation of the annual accounts, the applicable accounting standards have been followed.

ii) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that 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.

iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) the Directors have prepared the annual accounts on a going concern basis.

Personnel

The Board wishes to thank the employees at all levels for their valuable contribution and continued commitment to the Company.

Other Information

The particulars prescribed by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are furnished - as Annexure to this Report.

Acknowledgement

The Directors wish to place on record their sincere appreciation yet again for the continued co-operation the Company has received from the Financial Institutions and Banks as well as from the Customers, Dealers and Suppliers of the Company.

For and on behalf of the Board

BANGALORE Anant Hegde

March 22,2001 Chairman & Managing Director