To, The Members, Your Directors have pleasure in presenting the Twenty Sixth Annual Report and the Audited Accounts of the Company for the year ended 31st March 2008, together with Auditors Report thereon: OPERATIONS The Company's turnover and other income during the current year was Rs.5492 .Lacs as against Rs. 5588 Lacs for the previous year. The loss for the year was Rs.523 Lacs (after providing for Rs653 Lacs towards depreciation) as against Rs. 386 Lacs in the previous year. In view of the losses, the company has not provided interest for the year. Overall performance of the Company has been affected due to non-availability of sufficient funds for working capital and for Captive Power. REFERENCE TO THE HON'BLE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR) The Company has become sick Company in accordance with the clause (O) of subsection (i) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 and the same has been declared as a Sick Unit by the Hon'ble BIFR vide its order dated 21.03.2001. The Hon'ble BIFR on 17.04.2007 has directed the Operating Agency to submit revival scheme of the Company, accordingly Debt Rehabilitation Scheme (DRS) has been filed with BIFR on 17.11.2007. The Hon'ble BIFR directed the Operating Agency to call a meeting of all creditors and submit its report in the next hearing fixed on 27.02.2008. The Operating Agency conducted the meeting of all creditors on 08.02.2008 and forwarded its minutes to the Hon'ble BIFR. The hearing of 27.02.2008 was adjourned to 24.04.2008 which has been further adjourned. ARCIL The financial assistance granted by Financial Institutions and Banks (ICICI/IDBI/SBI) have been assigned to Asset Reconstruction Company (India) Ltd. (ARCIL). ARCIL has agreed to the scheme of repayment of secured loans of the Company acquired by it. The scheme will be implemented by way of scheme of arrangement u/s. 391 of the Companies Act 1956 to be filed in High Court, Gujarat at Ahmedabad. The Company has so far paid Rs. 217.72 Lacs to ARCIL by way of part payments of installments under the Scheme of Arrangement. Since the Company could not make payment as per terms of scheme due to shortfall of funds, the scheme is being restructured again and it will be finalized shortly. Effect of the Scheme of Arrangement on the accounts shall be given on approval of the same by the Ahmedabad High Court. FIXED DEPOSIT The Company has not accepted / renewed any Deposits during the year. DIRECTORS Shri G. Balakrishnan Iyer and Shri Bharat Bhushan, Directors retire by rotation, pursuant to Article 126 of the Articles of Association of the Company and, being eligible, offer themselves for reappointment. DIRECTORS'RESPONSIBILITY STATEMENT The Board of Directors of your Company state that - i) in the preparation of the annual accounts, the applicable accounting standards had been followed; ii) the directors had selected such accounting policies 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 that period; iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; iv) the directors had prepared the annual accounts on a going concern basis. MANAGEMENT'S DISCUSSION AND ANALYSIS The Company is a Sick Company as has been declared by the Hon'ble Board for Industrial and Financial Reconstruction (BIFR) under Section 3(1) (o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) vide its Order dated 21.03.2001. The Financial Institutions and Banks have transferred their security interest to Asset Reconstruction Company (India) Ltd. (ARCIL) and ARCIL has agreed to the scheme of repayment of secured loans of the Company acquired by it. The Company has been making part payments towards the scheme which is being restructured again as the Company could not make payments as per terms of the scheme due to shortfall of funds with the Company. The turnover of the Company has been nearly same as compared to previous year. However Loss incurred during the year has gone up slightly as compared to previous year. Lack of sufficient working capital and captive power, high crude prices competition, etc. has adversely affected the Company's working. The Company is making all efforts to prdduce more and more own production and reduce cost of power consumption which shall result in higher profit. The Company has proper and adequate system of Internal Control to ensure that all the assets are safeguarded from loss, damage or disposition. Checks & balances are in place to ensure that transactions are adequately authorized and recorded, and that they are reported correctly. The Company is operating in one segment only, which is manufacture of Polyester/Viscose yarns. CORPORATE GOVERNANCE Your company has implemented all the stipulations on Corporate Governance prescribed by Clause 49 of the Listing Agreement. The certificate of Auditor is annexed to and forms part of the Directors' Report. AUDITORS M/s. Dinesh S Agarwal & Associates, Chartered Accountants, retire and being eligible, offer themselves for reappointment. The observations in the Auditors Report are dealt with in the Notes to Accounts at appropriate places and are self-explanatory. PERSONNEL Relations between the employees and management remained cordial during the year. The Directors wish to express their appreciation for the efficient and loyal sen/ices rendered by the Company's employees and for their outstanding contribution for betterment of the Company during the year. There is no employee covered under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of the Employees) Rules, 1975. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO Information with respect to conservation of energy, technology absorption, foreign earnings and outgo, pursuant to Section 217 (1) (e) of the Companies Act, 1956, is set out in Annexure, forming part of this report. ACKNOWLEDGEMENT The Board expresses its deep gratitude to the All India Financial Institutions, ARCIL, Company's Bankers, i.e. State Bank of India, Canara Bank, Dena Bank and Induslnd Bank and the State and Central Government for their support and cooperation. For and on behalf of the Board of Directors GSL (INDIA) LIMITED D. P. Agarwal Director B. Bhushan Director Place: Mumbai Date: 30.06.2008 |