AEC ENTERPRISES LIMITED
The Shareholders of AEC Enterprises Limited,
The Directors have pleasure in placing before you the 19th Annual Report
and the Audited Accounts of the Company for the 15 months' period ended
June 30, 1998.
Due to losses incurred by the Company, your Directors are unable to
recommend payment of any dividend during the current year.
2. TAKE OVER BID LAUNCHED ON THE COMPANY
The Company had availed an Inter Corporate Deposit facility of Rs.100.00
lacs from M/s Peacock Chemicals Pvt Ltd (PCPL) and as a matter of providing
security towards the repayment of the said ICD, the holding Companies had
pledged some shares held by them in the Company with PCPL. PCPL attempted
to take over the company by way of making a public offer in terms of SEBI
Takeover Regulations. The Company filed an application with Hon'ble High
Court of Delhi for granting permanent injunction on the take over bid. The
Hon'ble High Court of Delhi has granted permanent injunction vide its order
dated August 31, 1998. However, PCPL have preferred an appeal with the
Hon'ble High Court of Delhi which is yet to be admitted. The next date of
hearing has been fixed for January 08. 1999.
3. OPERATION 8 FUTURE OUTLOOK
M/s. Trenewan Investments Pvt Ltd, Mauritius who are the majority
shareholders in AEC Holdings Pvt Ltd, AEC Capital Market Ltd and AEC
Investments Ltd, nave appointed Mr.V.Swaminathan and Mr.Navneet Kampani as
their representatives on the Board of the Company at the meeting of Board
of Directors held on August 18,1998. Further, it has also been decided
that the day to day operations of the Pithampur unit will be looked after
directly by these two Directors. Therefore, currently the operations of the
Pithampur unit are being monitored by these two Directors.
Industrial Products Division
The performance of the Industrial Products Division of the Company has been
severely affected by the on going recession in the economy in general,
resulting in lower sales and profits consequently. The future outlook of
the Division will depend on lifting of recessionary conditions and
improvement in business environment.
Acrylic Blankets Unit
The domestic market offers tremendous potential which the company proposes
to capitalise upon. However, being an Export Oriented Unit the Company has
limitation of selling only 25% of its exports in the domestic market. With
a view to increase the profitability of the company, the Board of Directors
have decided to explore the possibility of converting this unit from an EOU
to Zero Duty EPCG Unit. The requisite application for this purpose has been
filed and final clearance is awaited.
The export markets continue to be marked by very low price realisations
ruling in the Middle East, which is the major market for the company's
products due to severe competition in this market segment from Korea and
China. The Company is in the process of exploring new markets like Europe,
Canada, Australia and New Zealand.
4.1 ILFS Venture Capital Fund Ltd (Formerly Credit capital Venture Fund
(India) Ltd) who have been holding 7,50,000 Equity Shares in the Company
and in terms of shareholders agreement, have withdrawn the nomination of
Shri Rahul D.Shah as their Nominee Director on the Board of the Company.
The Board place on record its deep sense of appreciation for the services
rendered by Shri Rahul Shah.
4.2 Shri C.K.Park and Smt. Deepa S.Apte, Directors of the Company have
resigned and have requested to be relieved. The Board of Directors would
like to place on record its deep sense of appreciation for the services
rendered by the two Directors.
4.3 Shri R.K.Garg, Director of the Company expired on October 07,1997. The
Board place on records its sense of appreciation for the valuable services
rendered by Shri R.K.Garg.
4.4 Shri V.Swaminathan and Shri Navneet Kampani have been appointed as
Directors on the Board of the Company as representatives of holding
Companies of your Company. Their office is liable to retire by rotation and
they are also eligible for re-election.
4.5 Shri G.P.Sharma,Dy General Manager, MPSIDC has been nominated as its
Nominee Director on the Board of the Company in place of Shri J.R.Verma.
The Board places on record its deep Sense of appreciation for the services
rendered by Shri J.R. Verma.
4.6 In accordance with the provisions of Section 255 of the Companies Act,
1956 and the Company's Articles of Association Shri Sanjeev R.Apte and Shri
Vasantlal D.Mehta Directors of the Company retire by rotation and are not
The Auditors, M/s V.V.Kale 8 Co., Chartered Accountants, retire at the
conclusion of the forthcoming Annual General Me-eting and being eligible
offer themselves for re-appointment. They have furnished a certificate to
the effect that the re-appointment, if made, will be in accordance with
sub-section (1B) of Section 224 of the Companies Act, 1956.
6. FIXED DEPOSITS
During the period under report, your company has not accepted any Fixed
Deposit within the meaning of Section 58(A) of the Companies Act, 1956 and
the rules made thereunder.
7. PARTICULARS OF EMPLOYEES
Information in accordance with the provisions of Section 217 (2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975, are annexed and forms part of this report.
8. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNING AND OUTGO:
Information as per Section 217 (i)(e) read with Companies Disclosure of
particulars in the report of Board of Directors Rules 1988 is given below
Foreign Exchange Earning Rs.652.60 lacs
Foreign Exchange Used Rs.629.56 lacs
9. PARTICULARS OF ENERGY CONSERVATION
A) Conservation of Energy
Since during the period under report, the Acrylic Blankets unit of the
company has not functioned to the optimum capacity, the company could not
implement full fledged measures for conservation of energy at the
manufacturing unit. However, every effort is being made to conserve the
energy during the manufacturing process.
B) Technology Absorption
The Company has successfully completed the technology absorption process.
However, continuous efforts ar being made to improve the productivity and
remove all the bottlenecks in the process.
10. As regards the Auditors observations, they are self explanatory and do
not require our further comments.
The Directors express their appreciation for the dedicated and committed
hard work of the company's personnel, at all levels.
Your Directors also wish to thank the company's bankers, financial
institutions, shareholders and business associates for their continued
support and co-operation.
FOR AND ON BEHALF OF THE BOARD
R. D. APTE
CHAIRMAN & MANAGING DIRECTOR
PLACE: NEW DELHI
DATE : 24-11-98