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Carona Ltd.

BSE: 509495 Sector: Others
NSE: N.A. ISIN Code: N.A.
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Carona Ltd. (CARONA) - Director Report

Company director report

ANNUAL REPORT 1999-2000 CARONA LIMITED 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. DIVIDEND: Owing to continued unfavourable results, the Directors regret that no dividend could be recommended by the Board for the year ended 31st March, 1999. 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 year. 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. FIXED DEPOSIT: 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 lacs. DIRECTORS: Mr. Mahenda K. Khatau, Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. PERSONNEL: 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.

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