Directors' Report Your Directors have pleasure in presenting the Annual Report and the Audited Balance Sheet as at 31st March, 2008 the Profit and Loss Account for the year ended 31st March. 2008 and Auditors' report thereon. Audit report: The remarks made in the Auditors Report are self explanatory & do not require any further classification. General Review : The losses of Lathikata unit are mounting due to under-utilisation of capacity which is contributing to the deterioration of the financial position of the company After grueling efforts on the part of management it has been possible to chalk out a revival plan involving de-merger of Lathikata unit and merge the same with Shashwat International Limited, a company promoted by Mr. Ravin Jhunjhunwala. The fixed assets of Lathikata unit have been valued by an approved valuer. The reports have been examined by the Monitoring Agency, IDBI. The proposal of de-merger in the form of a Draft Modified Rehabilitation Scheme has been examined by Hon'ble BIFR and was circulated to all the parties as well as advertised in the newspapers as per the standard procedures adopted by it. The hearing of the Draft Modified Rehabilitation Scheme was made on the 27th March, 2008 and has been duly approved. The de-merger has been approved with effect from 1st October, 2008. Towards the consideration of de-merger Shashwat international Limited will pay Rs. 58 crores and allot 2,00,000 shares of Rs. 10 each at a premium of Rs. 50 each to the shareholders of Orissa Industries Limited. It may be noted that Rs. 39 crores has already been paid by Shashwat International Limited to Orissa Industries Limited. But, as certain formalities are remaining to be completed the necessary effect in respect of transfer of the assets and liabilities could not be given effect to in the accounts for the year ending on the 31st March, 2008, Steps are being taken to take appropriate decision In the matter. Your directors are constantly examining and monitoring the revival of the company for which support and goodwill of bankers, workers, creditors and Hon'ble BIFR are forthcoming without which it would have resulted in a lot of chaotic situation. The promoters have been supporting the survivasl of the unit against all odds. Directors' Responsibility Statement: Pursuant to sub-sec {2AA) of sec 217 of the Companies Act, 1956. based on the representation received from the operating management, directors state: • that in the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures. • that the directors have selected such accounting policies in consultation with the statutory auditors and applied them consistently and made judgments 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 loss of the company for the financial year. • that the directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 and confirm that there are adequate systems and controls for safeguarding the assets of the company and for. preventing and detecting fraud and other irregularities. •that the Annual Accounts have been prepared on a going concern basis. Conservation of Energy, Technology and foreign exchange earning & outgo: A Cost effective measures have been taken to conserve energy, to upgrade state of the art technology. The detail including foreign exchange earning & outgo is available in the schedules & notes on accounts. B. Research & Technology : 1. Due to liquidity crunch, limited R&D work is carried out by the company to upgrade the exiting products which include the following area of activities : •High Alumina Bricks •Clay body products • Effective utilization of siliceous Talbasta • Development of low BD insulation Bricks • Improvement in castable strength • Effective utilization of G.P. waste in making refractory bricks 2. Benefits derived as a result of aforesaid activities. • Longer refractory life • Cost reduction • Achieving special thermal properties of high alumina bricks • Clay body product for low temp, application etc. 3. Technology Imported : Nil 4. Expenditure on R&D : Detail has been provided in Schedule & notes on Audited Accounts 2007-08. Corporate Governance & Management discussion and analysis report: Enclosed vide Annexure-A to Directors' report. Employees None of the employees falls under the purview of sec.217 (2A) of the companies Act, 1956 read with the companies (Particulars of employees) Rules 1975. Directors Shri Praveen Reehl retires by rotation and being eligible, offers himself for re-appointment Auditors Auditors M/S. H, NAIK & Co, Chartered Accountants, retire at the conclusion of this Annual General Meeting and being eligible, offer themselves for re-appointment. Acknowledgment The Directors take this opportunity to thank the Government, Banks, Financial Institutions and employees of the company for their continued support towards the revival efforts of your company. For and on behalf of the Board of Directors Prof. S.C. Kuchhal (Chairman) Dated : 24th July, 2008 Kolkata |