| Disclosure in board of directors report explanatory JUGGILAL KAMLAPAT COTTON SPINNING andWEAVING MILLS CO. LTD. DIRECTORS' REPORT TO THE MEMBERS,The Directors present their 89th Annual Report together with the audited Statements of Account of the Company for the financial year ended 31st March, 2012. FINANCIAL RESULTS 2011 12(Rs/lac) 2010 11(Rs lacs)2.1 Sales 1531.82 18963.80 Profit(loss) before Finance Cost and Depreciation (1304.65) 3916.01 Finance Cost (45.57) (355.28) Profit/(Loss) before Depreciation (1350.22) 3560.73 Depreciation (41.98) (16.02) Profit/(Loss) (1392.20) 3544.71 Adjustments relating to previous years (8.10) (4.46) Balances written off (0.48) (3974.54) Liabilities Written Back Nil 26303.63 Net Profit/(Loss) (1400.78) 25869.34 Less: Provision for Taxation Current Year Nil 831.00 Tax Adjustment for Previous Year 232.43 Nil Profit/(Loss)after Tax (1633.21) 25038.34 2.2 The Directors are pleased to inform you that revenue from sales during the current year in textile unit increased to Rs.15.32 crores as compared to Rs.7.64 crores in the previous year. During the current year the Company has not taken up significant activity in Real Estate segment. The operations in the textile segment have not yet stabalised due to old age of plant and workforce resulting into low productivity, high wastage of raw material and production of damaged fabrics. Cost of production further increased during the year on account of increase in dearness allowance, power consumption, coal prices and other costs. In view of continued losses in Textile Segment, the Directors are unable to recommend any dividend. 3. REHABILITATION The rehabilitation scheme sanctioned by Hon. BIFR is under implementation. After lifting of lockout in the Mill w.e.f. 19th January, 2009, large scale maintenance and overhauling work of theMillBuildings, Plant and Machinery and Utilities has been undertaken and new machines have been procured to replace old and obsolete one. Steps have been taken for modernization and product diversification and Rs. 16.57 crores invested in Plant and Machinery during the financial year 2011 12. Period of implementation of the rehabilitation scheme has been extended upto 30th September, 2014 by Hon. BIFR.4. ASSETS SALECOMMITTEEAs per terms of the sanctioned Rehabilitation Scheme, an Assets Sale Committee (ASC) has been constituted and its meetings are held from time to time. 5. CORPORATE GOVERNANCE A report on Corporate Governance is enclosed as part of the Annual Report together with the Auditors' Certificate for compliance. 6. INSURANCE The Stocks, Buildings and Plant and Machinery have been insured against risks of fire, riot, strike etc. 7. DIRECTORS 7.1 In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Shri Govind Hari Singhania and Shri Lalit Mohan Agarwal retire by rotation and are eligible for re appointment. 7.2 Shri P.K.Saraf, ceased to be Director from the date of the Annual General Meeting held on 25th August, 2011 as he had shown his unwillingness to be reappointed as Director of the Company. The Board put on record their appreciation for the valuable services rendered by Shri P.K.Saraf during his tenure as Director of the Company. 7.3 Hob'ble BIFR has nominated Shri Anil Gupta as a Special Director of BIFR w.e.f. 15th February, 2012. Shri Gupta is a Textile Technology Graduate from TIT Bhiwani. He is Fellow of Institution of Engineers. He is awarded with Doctorate of Science in Management (accredited) by Dublin University, California, USA. He has wide experience in managing process houses and marketing of capital equipment. 7.4Shri R.K.Saxena has ceased to be Director of the Company w.e.f. 28th May, 2012 due to his resignation. The Board put on record their appreciation for the valuable services rendered by Shri R.K.Saxena during his tenure as Director of the Company. 8.CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO Particulars with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earning and outgo in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules 1988 in respect of Textile unit are annexed and form part of the Report. 9. PUBLIC DEPOSITS Your Company has not invited any deposits from public/shareholders in accordance with Section 58A of the Companies Act, 1956. 10.PARTICULARS OF EMPLOYEES There are no employees of the category mentioned in Section 217(2A) of the Companies Act, 1956. 11. AUDITORS11.1 Observations of the Auditors are explained wherever necessary in the appropriate Notes on Accounts and call for no further comments. 11.2 You are requested to appoint Auditors for the current year and to fix their remuneration. The present Auditors, M/s. P.L.Tandon and Co., Chartered Accountants, retire from their office. They are, however, eligible for re appointment and have furnished a certificate to the effect that their re appointment will be in accordance with the provisions of sub section (1B) of Section 224 of the Companies Act, 1956. 12. DIRECTORS' RESPONSIBILITY STATEMENT As mentioned in para 3 above, Rehabilitation Scheme sanctioned by Hon'ble BIFR is still under implementation. The write back of liabilities to remaining lenders would be given effect to upon final payment of OTS amount to them. Subject to this, the Directors state that: i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed except those mentioned in the notes to the Accounts. ii) |