| To The Members,
The Directors submit the 52nd Annual Report of the Company along with
the Audited Statement of Accounts for the period ended 31st December,
2012 pursuant to the Annual General Meeting which now stands adjourned
to ; 30th September, 2013.
FINANCIAL YEAR AND PERMISSIONS FORM THE REGISTRAR OF COMPANIES
The Financial Year of the Company, has been extended upto 18 months
with permission of the Registrar of Companies i.e. upto 31st December,
2012. Consequently, the Company has obtained the permission of the
Registrar of Companies for holding the Annual General Meeting on or
before 4th June, 2013. Accordingly the Annual General Meeting was
convened on 4th June, 2013. At the Annual General Meeting held on 4th
June, 2013 the following Business ! was transacted.
A) Accounts for the year ended 31st December, 2012.
B) Reappointment appointment of Director's retiring by rotation namely
Mr. M.D. Dalai, Mr. K.V.K. Murthy and Mr. K.R. Ramasubramanian
respectively.
C) Appointment of Statutory Auditor namely M/s N.M Raiji & Co.
The meeting was then adjourned sine die for approving and adopting the
Audited Statement of Accounts as at 31st December, 2012 the accounts of
the Company have since been Audited and are ready for placing before
members of the Company.
1. FINANCIAL RESULTS:
(Rs.in Lacs)
2011-2012 2010-2011
(18 months) (15 months)
Gross Profit/(Loss) before interest
& depreciation (3,466.50) 2,064.59
Interest 3,253.86 2,885.56
Depreciation 11,285.77 3,095.39
Operating Profit / ( Loss) (18,006.13) (3,916.36)
i Profit / (Loss) before tax (18,006.13) (3,919.52)
Excess Provision of earlier years (64.09)
Provision for wealth-tax 3.00 2.00
Deferred Tax Adjustment 956.87 (272.64)
Provision for taxation
< Profit / (Loss) after tax (18,968.80) (3,584.79)
Transferred from General
Reserve/Balance carried to
Balance Sheet 1,060.09
2. DIVIDEND:
Your Directors do not recommend any dividend for the period under
review due to the loss suffered by the Company.
3. OPERATIONS:
The Turnover of the Company during the 18 months period ending 31st
December, 2012 was Rs. 21,473.67 Lacs compared with Rs. 57,377.75 Lacs
during the previous period. The Company is facing severe financial
crises and suspended its operations partially in mid 2012 and further
all operations w.e.f. 19th December 2012. During the period the Company
approached its lenders inter alia for Corporate Debt Restructuring
('CDR') its debts to enable it to resume operations. We made serious
efforts to comply with the strict norms and conditions of CDR cell as
per their Letter of Approval dated 17th May, 2012. However inspite of
making serious efforts, the CDR scheme could not be put into effect
which made restarting the operations no longer possible.
The Company lost its key personnel and employees. Due to its inability
to pay for operating expenses, the labour and employees were not paid
and the Company had no power to run its computers and systems. This
prevented the company to even access its data and records from its
offices and factory, thereby halting processing its accounts.
Management perception of Audit Qualifications.
AUDITORS' REPORT (QUALIFICATIONS/ COMMENTS)
Explanations and clarifications to Auditor's Report considered by the
Board of Directors is printed below:
Auditors Report Dated 19th Aug 2013
1) Point No. 4: The accounts of the Company are made on a going concern
basis inspite of total closure of manufacturing operation is because
the Company is finalising alternate plans for the future.
2) Point No. 5: All efforts have been made to obtain confirmations form
Sundry Debtors, Creditors, Loans.
3) Point No. 6: The two banks stated in the Report are located in
places where the Company ho longer has any staff for long time. Besides
there are no operations at the said two locations and amounts lying in
these accounts are small or insignificant.
Annexure to Auditors Report Dated 19th August, 2013
1) Point No. l(a)& (b) and ii) (a): Substantial number of employees of
the Company left the organisation in early calendar year 2012. This
coupled with the fact of company's inability to pay for operating
expenses, the company had no - electricity to run its computers and
systems. This prevented the company from updating its records and data.
The company made every effort to maintain sufficient
basic and statutory records and at the same time ensuring the safety
and primary concerns of persons who retrieved the necessary record and
data.
2) Point No. (vi): The Company has already made an application to the
Hon'ble Company Law Board in matter of Fixed Deposits. While the matter
is sub judice before the Hon'ble Company Law Board, the Company has and
is making every effort to repay Fixed Deposits to its maturity and
extent.
3) Point No. (vii): The internal audit system though in place, could
not be pursued in part, due to the reasons cited above.
4) Point No. (ix): The Company has paid its dues in respect of
Provident Fund and Income Tax and ESI since then. Dues towards Service
Tax, Customs
Duty, excise duty and water charges levied by the Govt, of Maharashtra
(Irrigation Dept) are - various stages of appeals/litigations and are
being contested with concerned Hon'ble High court and/or Authorities.
Dues of wealth Tax are being paid in due course. As to the penalty
/duty imposed under the Foreign Trade (Development & Regulation) Act
1992 the same is being considered by the Board of the company.
4. SALE OF LAND, PLANT& MACHINERY ETC.:
Members have approved the sale of land, together with structures
thereon, plant & machinery in accordance with Section 293(1)(a) of the
Companies Act 1956, by way of Postal Ballot, in the month of dune/July,
2013. Your Directors expect to complete the transaction in a few
months' time.
5. SUBSIDIARY OF THE COMPANY:
The Subsidiary of the Company namely FPL Property Developers Pvt Ltd
ceased to be a Subsidiary of the Company w.e.f. 31st December, 2011.
6. FIXED DEPOSITS AND LOANS:
As on 31st December, 2012, the Company had an aggregate sum of Rs. 237.04
lacs as fixed deposits from Public / Shareholders. The total number of
depositors who have not claimed / renewed their deposits on maturity
was 116 Lacs and the amount that remained unclaimed / not renewed as on
31st December, 2012 was Rs. 31.98 Lacs of these, deposits amounting to Rs.
1.70 Lacs have since been either repaid or renewed. The Company has not
accepted any fresh deposits nor renewed any deposits during the period
under review. The company has approached the Hon'ble Company Law Board
suo moto for certain reliefs in the repayment of the Fixed Deposits of
the company. The Hon'ble Board issued orders for repayment of Fixed
Deposits of the Depositors attending, the hearings and the company has
accordingly repaid them. The Company is pursuing the application with
the Hon'ble Company Law Board.
7. INSURANCE:
Adequate insurance cover has been provided for the buildings, plant and
machinery and Inventories at the factory of the Company.
8. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:
The particulars prescribed by the Companies (Disclosure of Particulars
in the Report of Board of
Directors) Rules, 1988 are furnished in the Annexure to this Report.
9. PERSONNEL
In terms of the provisions of Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, none of the Company's employees was in receipt of remuneration
aggregating to Rs. 60,00,000/- or more per annum or Rs. 5,00,000/- or more
per month during the period under review.
10. INDUSTRIAL RELATIONS:
Industrial relations remained by and large cordial throughout the
period. A settlement is being arrived at with workmen at Chennai. The
Directors wish to place on record their appreciation for the
co-operation extended by the workmen, staff and officers at all levels.
11. DIRECTORS:
At the Annual General Meeting, held on 4th June, 2013, Mr. K. V. K.
Murthy and Mr. M.D. Dalai retired by rotation and offered themselves
for reappointment and were reappointed as Directors of the Company. Mr.
K. Ramasubramanian was appointed as Additional Director on the Board
and held office until the Annual General Meeting held on 4th June, 2013
and was appointed as Director liable to retire by rotation.
Mr. Shyam S. Sami resigned from the Board for personal reasons. The
Board places on record its appreciation and gratitude to Mr. Sami for
the contribution made during his tenure as Director.
12. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to requirements under Section 217(2AA) of the Companies Act,
1956 ("the Act") with respect to Directors' Responsibility Statement,
it is hereby confirmed that:-
1. In preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departure.
2. the Directors had 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 as at 31st December, 2012 and of the loss of the Company
for the period ended on that date.
3. The Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
4. The Directors have prepared the annual accounts on a
'going-concern' basis.
13. AUDrrORS:
M/s. N.M. Raiji & Co., Chartered Accountants, who retired at the Annual
General Meeting, held on 4th June, 2013 have been reappointed as
Statutory Auditor of the Company until the conclusion of the next
Annual General Meeting.
14. COSTAUDITOR:
The Central Government had directed that audit be carried out of the
Cost Accounts maintained by the Company in respect of polyesters by a
qualified Cost Accountant. The Directors, subject to the approval of
the Central Government, have appointed Mr. M. Krishnaswamy of Chennai
as Cost Auditor.
15. CORPORATE GOVERNANCE:
As required under Clause 49 of the Listing Agreement with the Bombay
Stock Exchange Limited, Corporate Governance and Management Discussion
and Analysis Report annexed to this report, form part of this Annual
Report.
16. COMPLIANCE CERTIFICATE:
A certificate from the statutory auditor of the Company regarding
compliance of conditions of corporate governance as stipulated under
Clause 49 of the Listing Agreement is attached to this Report.
17. ACKNOWLEDGEMENTS:
Your Directors place on record their appreciation for the continuous
support received from the shareholders. Your Directors also express
their appreciation for the assistance and co-operation received from
the Governments at the Centre as well as the States, local authorities,
Financial Institutions and Banks and employees of the Company during
the period under review.
For and on behalf of the Board of Directors
Place: Mumbai S. B. GHIA
Dated: 19th August, 2013 Chairman
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