DIRECTORS' REPORT To, The Members of PAREKH PLATINUM LTD. Dear Members, Your Directors have pleasure in presenting the 27th Annual Report together with Audited Statement of Accounts for the year ended 31st March, 2010. REVIEW OF OPERATIONS The pehod under review was very difficult for the company. The Company has reported a turnover of Rs.7.05 crores during the year under review. The turnover of the company & in particular, the domestic turnover have been reduced as compared to the previous year. The profit of the company mainly consists of other income. The company's performance has been affected due to take over of physical possession of Bhat unit by IFCI Ltd coupled with lack of working capital. The company is making efforts to break the vicious cycle of mounting losses and progressively low level of operations. The Company had made a reference to the Board for Industrial and Financial Reconstruction (BIFR) and Appellate Authority for Industrial and Financial Reconstruction (AAIFR) under section 15(1) of the said Act which has however been rejected. The company has filed an appeal against this order of AAIFR before the High Court, Mumbai. The said appeal has been admitted and the matter is in progress. DIVIDEND In view of the accumulated losses and negative net worth, your Directors regret their inability to recommend any dividend to the Members of the Company for the year ended on March 2010. FLOOD INSURANCE CLAIM The insurance claim filed by the Company for the damages suffered by the Company due to flood at its Mumbai plant during July 2000, is yet pending settlement. The Company's complaint with the National Commission, New Delhi, under Consumer Protection Act, 1986 has been taken up for hearing and the matter is in progress. DEPOSITS Your Company has neither accepted nor renewed any fixed deposits from the public during the year under review under section 58A of the Companies Act, 1956. STATUTORY INFORMATION A) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO. information required under section 217(1)(e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure i to this Report. B) PARTICULARS OF EMPLOYEES. The information as required under section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975, as amended, are not given, as none of the employees qualify for such disclosure. DIRECTORS Mr. Hiten shah retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. DIRECTORS RESPONSIBILITY STATEMENT U/S 217(2AA) The Board of Directors Report: i. that in the preparation of Annual Accounts, the applicable accounting standards had been followed alongwith proper explanation relating to material departures; ii. that 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 at the end of the financial year and of the profit or loss of the company for that year; iii. that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; iv. that the directors had prepared the annual accounts on a going concern basis. CORPORATE GOVERNANCE A detailed report of the Board on Corporate Governance and a certificate from practicing Company Secretary is annexed hereto , which forms part of this Annual Report. AUDITORS The Company's Auditors M/s Kastury & Talati hold office upto the conclusion of the ensuing Annual General Meeting. The Company has received the requisite certificate pursuant to section 224 (IB) of the Companies Act, 1956, regarding their eligibility for re-appointment as Auditors of the Company. Members are requested to consider their appointment to hold office from the conclusion of the ensuing Annual General Meeting until the next Annual General Meeting and to fix their remuneration. PERSONNEL During the year under review, the company suffered loss of production due to illegal strike by employees of the Mumbai unit under the advise from Maharashtra Navnirman Kamgar Sena [MNKS]. The company had to declare a lock out and continues to remain under lock out. The Board wishes to place on record its sincere appreciation of the contribution made by the employees at ail levels despite the extremely trying times. COMMENT ON AUDITORS REPORT The auditors have commented on the take over of assets at Gandhinagar by IFCI Ltd, and sale of some of these assets. The accounting entries in this respect have not been passed. The management is unable to provide information as IFCI Ltd is not responding to the company's request for the said information. The auditors have commented on the non-provision of interest on borrowings from Banks and Financial Institutions for the period from 1.4.2005 to 31.03.2010. The management is of the view that sufficient provision is already made in the books of account to meet the liabilities of the lenders. With regard to the auditor's comments on the going concern aspect, the Management is however confident of continued operations. The auditors have commented about the realisability of dues from related parties with reference to sundry debtors, loans and advances and Deposit amounting Rs.11.97 Lacs, Rs. 6468.40 Lacs and Rs 1500.00 Lacs respectively on account of losses suffered by them and the doubtful nature of their debts and loans and advances. In the opinion of the management these debts are good debts as the same is covered by way of substantial values of tangible and intangible assets. The auditors have commented that they have not been able to obtain from the management sufficient audit evidence to provide a basis for an audit opinion and have accordingly not expressed an opinion on the financial statements. The management is unable to provide the information as IFCI Ltd is not responding to the company's request for the said information. Hence the circumstances are beyond the control of the management. OTHER MATTERS A financial institution had initiated action under SARFAESI Act, 2002 for acquisition of assets. During the quarter ended September, 2009, IFCI Ltd took forceful physical possession of the Company's manufacturing plant at Gandhinagar including the land, building, plant & machinery. It had issued a public notice for auction of these assets and eventually sold off some of the said assets. The Company has objected to the action under SARFESI Act by IFCI Ltd. in the DRT Ahmedabad. The Income tax department had already attached the property at Bhat, Gandhinagar against tax demands. The IT department has filed a writ petition against IFCI Ltd. and the Company objecting to the takeover/sale of assets. This petition is pending for disposal. Dena Bank, as a leader of Consortium bankers had appointed M/s. M.M. Nissim & Co., Chartered Accountants, Mumbai, in the year 2002, as a Special Investigative Auditor to investigate the affairs of the company. They submitted their report to the members of the consortium. This report was not made available to the Company. It was only at the instance of the BIFR that the said report was provided to us in the year 2007 for the first time and after a gap of 5 years. The company was shocked to note its contents, which were absolutely false, frivolous and malafide and a number of discrepancies were observed. Various allegations made in the report were baseless. It is observed that this report forms the basis of investigation by the Central Bureau of Investigation. The Company and its Promoters have suffered a lot, both financially and otherwise. The Company has lodged a complaint against M/s. M.M. Nissim & Company, Chartered Accountants, Mumbai with the Institute of Chartered Accountants of India, New Delhi, under section 21 of the Chartered Accountant Act, 1949 for filing incorrect, misleading and fraudulent report against the Company and its promoters. ACKNOWLEDGEMENTS The Board of Directors wishes to express its gratitude and record its sincere appreciation for the commitment and dedicated efforts put in by all the Employees. Your Directors take this opportunity to express their grateful appreciation for the co-operation and support received by the company from the customers, shareholders, business partners, suppliers, various departments of governments, financial institutions and oanks. By Order of the Board Parekh Platinum Limited. Rajesh J Parekh Chairman and Managing Director Place : Mumbai Date : 27th November ,2010 |