ANNUAL REPORT 1999-2000
DIRECTORS' REPORT TO THE MEMBERS
Your Directors herewith present the 44th Annual Report ot the Company
together with the audited Statements of Accounts for he financial year
ended 31st March, 1999.
Owing to continued unfavourable results, the Directors regret that no
dividend could be recommended by the Board for the year ended 31st March,
OPERATIONS I PERFORMANCE EVALUATION / FUTURE-OUTLOOK:
Absence of industrial activity compounded by slowdown in supplies of
finished footwear have adversely affected Company s operations during the
The Company continues to be battered by severe financial constraints
compounded by host of vicious factors causing rigorous dent in its revival
efforts and hamperment of revenue generating activities. Consequently
losses have mounted and surpassed Rs.42 crores.
As already reported the Company is presently registered as a sick company
under the relevant provisions of Sick Industrial Companies Act, 1985. The
Board for Industrial & Financial Reconstruction had directed the Operating
Agency viz. Bank of India to expedite preparation of Draft Rehabilitation
Scheme after taking into account all relevant factors for revival of the
Company including repayment obligations of Creditors.
Earlier BIFR had directed the Company not to surrender any tenancy rights
against which the Company had obtained interim stay on 10.09.1999. The
Company proposes to file appropriate appeal with Appellate Authority for
Industrial and Financial Reconstruction, New Delhi as it is aggrieved by
the direction of BIFR which has not given proper weightage to its
contentions on surrender of tenancy rights, cut-off date and upfront
payment of workers dues in the absence of MOU with them.
The Companies manufacturing activities at its Aurangabad Plant remain
completely shut-down for the reasons of absence of working capital and non
payment of wages to the workers. Insurance claim lodged with United India
Insurance Company is still to be settled
The Company s interaction with Bank of India is regular so as to ensure
that a DRS is in place. Other than its capacity as an Operating Agency Bank
of India has refused to undertake any further exposure as regards working
capital and overdraft.
Clearly the Company is experiencing painful pangs of stagnation. The
Company is presently plagued with umptine problems from lack of working
capital, absence of support from trade channels, consistent riddling ot
litigations from various quarters, demotivated employees and non sanction
of revival scheme till date has furthened the crisis which the Company is
assiduously trying to overcome.
The Company s prospects of turnaround is dependant on quicker sanction and
implementation of a sound rehabilitation package. The secured creditor viz.
Bank of India will in all probability settle for their dues through the
insurance claim. The Company needs liquidity to start trade business which
can ensure sufficient revenue generation and together with support from the
revival package should enable a turnaround in the foreseeable future.
The Company has not been-able to achieve any exports during the year.
As of the date of report, the Company has unpaid fixed deposit from the
public, shareholders and employees of the Company to the tune off Rs.40.63
Mr. Mahenda K. Khatau, Director retires by rotation at the ensuing Annual
General Meeting and being eligible offers himself for re-appointment.
The Aurangabad Factory being closed since April 1998 has caused complete
breakdown in production at the only Factory. Delay in payments of wages to
workers and salaries to staff and officers at Head Office continues
unabated. Management is striving for negotiated settlement with the workers
at Aurangabad. There have been few incidents of go slow by the field staff
in Mumbai though the same is very much under control now.
The Company has not still been able to redeem its VRS liability ex!ended to
450 residual workers of the erstwhile Jogeshwari Factory.
The present strength of employees on an all India basis is 673.
Information as per Section 217(2A) of the Companies (Particulars of
Employees) Rules, 1975 and forming part of the Directors Report for the
year ended 31st March, 1999 is not furnished as no employees are in receipt
of salary specified under these rules.
The Directors wish to place on record their appreciation for the work done
by the employees of the Company, for the cooperation of the Bankers and
Financial Institutions and for the unstined support of the shareholders.
On behalf of the Board of Directors.
Place: Mumbai MAHENDRA K. KHATAU ANIL K. KHATAU
Date : 23th October, 1999 Chairman Managing Director.