PUNJAB WOOLCOMBERS LIMITED
ANNUAL REPORT 2003-2004
Punjab Woolcombers Limited
Your Directors have great pleasure in presenting the 28th Annual Report of
your Company alongwith the Audited Statements of Accounts for the year
ended on 31st March, 2004 and Auditors Report thereon.
(Rs. in Lacs) (Rs. in Lacs)
Sales & Other Income 1414.30 1095.24
Profit/(Loss) before Financial Charges (337.07) (856.65)
Finance Charges 1143.89 1010.39
Depreciation 253.47 243.72
Pre-Tax Profit (Loss) (1734.43) (2110.76)
Balance Brought Forward (6590.52) (4479.71)
Previous Year Expenses (51.54) (0.06)
Balance Carried to Balance Sheet (8376.49) (6590.52)
Your Directors regret their inability to recommend any dividend due to non-
availability of profits.
During the year the total income of the company has increased due to better
market conditions but due to shortage of working capital, units are still
operating on job work basis. During the year company's total turnover and
other income has increased from Rs. 1095.24 lacs in previous year to
Rs.1414.30 lacs in current year which showed 29% growth as compared to
previous year. The job charges for the year 2003-2004 were Rs.148.17 lacs
as against the previous year job charges of Rs.228.25 lacs. Loss before
financial charges and depreciation has reduced from Rs. 856.65 lacs in
2002-2003 to Rs.337.07 lacs in 2003-2004.
The Company is making its best efforts to reduce its cash losses by
increasing its own production & discouraging the job work, which will
reflect the better financial results during the current year.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 217 (2AA) as inserted by Companies Amendment Act, 2000
your Directors hereby confirm.
(i) That in the preparation of the annual accounts, the applicable-
accounting standards had been followed along with proper explanation
relating to material departures except as mentioned in Auditor's Report;
(ii) That the Company had selected such accounting policies and applied
them consistently and made judgements 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 profit or loss of the
company for that year.
(iii) That the Company had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with he provisions
of this Act of safeguarding the assets of the company and for preventing
and detecting fraud and other irregularities.
(iv) That the Company had prepared the annual accounts on a going concern
During the year the Company has neither accepted nor renewed Fixed Deposits
U/s 58A of the Companies Act, 1956. The Company has no overdue deposits
outstanding other than those unclaimed as on 31st March, 2004.
The Auditors' Report and Notes on Accounts are self explanatory and
therefore, do not call for any comments.
M/s S. Tandon & Associates, Chartered Accountants, Chandigarh are retiring
at the forth coming Annual General Meeting and being eligible, offer
themselves for re-appointment.
The Company has received a consent letter Under Section 224(1)(B) from M/s
S. Tandon & Associates, Chartered Accountants, Chandigarh to act as
Statutory Auditors of the Company for the year 2004-2005. Your Directors
recommend the appointment of M/s S. Tandon & Associates, Chartered
Accountants, Chandigarh to act as Statutory Auditors of your Company for
your approval for the current financial year.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
The information relating to conservation of energy, absorption and foreign
exchange earnings and outgo as required under section 217(1)(e) of the
Companies Act, 1956 read with Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 is given in Annexure which forms
part of this Report.
Sh. Anil Jain, director who is retiring at this meeting offers himself for
re-appointment. Sh. M.K. Katara have resigned from the directorship of the
company. Sh. Mahinder Jain appointed as an additional director of the
company, who will hold office till this. Annual General Meeting unless
appointed as director of the company in this Annual General Meeting by the
members of the Company.
Directors place on record their gratitude for the services rendered by Sh.
M.K. Katara during his tenure as director of the company and welcome Sh.
Mahinder Jain on the Board of the company.
M/s. Khushwinder Kumar & Associates, Chartered Accountants, Jalandhar has
been appointed as the Cost Auditors of the Company for the year 2003-2004
and their Report will be submitted to the Deptt. Of Companies Affairs,
Govt. of India in accordance with the requirement of Law.
REFERENCE TO THE BOARD FOR INDUSTRIAL & FINANCIAL RECONSTRUCTION UNDER SICK
INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985:
Since the net-worth of the company was completely. eroded as per the
Balance Sheet for the year ended 31.03.2001, the reference was made to the
Board for Industrial & Financial Reconstruction under the Sick Industrial
Companies (Special Provisions) Act, 1985, which was rejected by the BIFR.
The Company made an appeal (Appeal No.259 of 2001 against the said order
The AAIFR had disposed of the appeal vide their order dated 27.11.2001.
Fresh reference on the basis of Balance Sheet as on 31.03.2001 was filed
which was registered with BIFR as Case No. 341/2001. The case was heard by
BIFR's Bench-I on 2.9.2003 and the Bench has reserved its orders.
Hon'ble BIFR vide its order dated 16.12.2003 appointed PNB as operating
agency to conduct a special investigative audit (SIA) in the accounts of
the Company and to restructure the Balance Sheet of the Company as on
31.03.2001 as per the direction of AAIFR. M/s M. Verma & Associates a firm
of Chartered Accountants conducted SIA into the accounts of the company and
submitted its report to PNB which was sent to BIFR and other secured
creditors for their comments. SIA's conclusion is that from the
restructured Balance Sheet as at 31.03.2001, it may be observed that
accumulate4 losses of the company were Rs.2302.79 lac which still exceeds
the networth of the Company (Rs.1338.06 lacs), meaning thereby that the
company is sick as per provisions of SICA. The operating agency has
concurred with SIA conclusions.
A reference on the basis of the Balance Sheet for the year ended at
31.03.2002 has also been made before the BIFR which has been registered as
Case No.64/2003 and is pending for hearing.
PARTICULARS OF EMPLOYEES U/S 217(2A):
The Particulars of employees as per Section 217(2A) of the Companies Act,
1956 read with Companies (Particulars of Employees) Rules, 1975 are NIL. No
employee is being paid salary more than the limits given u/s 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees) Rules
1975, as amended.
ADDITIONAL INFORMATION-BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL
Information pursuant to Department of Company Affairs Notification dated
15th May, 1995 relating to the Balance Sheet Abstract and Company's General
Business Profile are given in the Annual Report for your information.
Industrial relations though remained harmonious in all the Units of the
Company during the year, yet the number of workers reduced substantially
due to less capacity utilization.
COMPLIANCE OF CLAUSE 47 & 49 OF LISTING AGREEMENT:
The equity shares of the Company are listed at Ludhiana, Delhi and Mumbai
Stock Exchanges. Annual Listing Fees for the last four years has not paid
to all these Stock Exchanges due to financial constraints being faced by
the Company. Separate Report on Corporate Governance is annexed herewith
as a part of this Report as Annexure -II.
Your Directors place on record their appreciation for the continuous
cooperation of the workers the members of the staff and the executives ,of
the Company. Your Directors also place on record appreciation of the
assistance and co-operation extended by,all India Financial Institutions/
Investment Institutions and Banks.
For and on behalf of the Board
Place: LUDHIANA (N.K. OSWAL)
Date : 31.08.2004 CHAIRMAN-CUM MANAGING DIRECTOR
ANNEXURE - I
INFORMATION AS PER SECTION 217(1) (e) READ WITH COMPANIES (DISCLOSURE OF
PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING
PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED 31st MARCH, 2004.
A. CONSERVATION ENERGY:
a) The Company is aware of the importance of conservation of energy and
continuous efforts are being made to reduce energy cost at all levels.
Special attention is being given for the use of energy efficiency
equipments. During the year company reviewed and continued to pursue the
energy conservation measures taken in the previous year with a view to
further reduce the cost of energy and consequently the cost of production.
b) The Management is committed to further identify new areas where the
convention equipments can be replaced by latest equipments so as to reduce
the consumption of various sources of energy.
c) Total energy consumption and energy consumption per unit of production
are as under:
a) Power and Fuel Consumption: Current Year Previous Year
a) Purchased Units(lacs) 34.89 47.68
Total Amount (Rs. lac) 139.98 179.82
Rate/Unit (Rs.) 4.01 3.77
b) Own Generation Through
D.G.Set Units (lacs) 0.30 0.78
Total Amount (Rs. lacs) 1.85 4.66
Cost/ Unit (Rs.) 6.17 5.98
2) Steam Coal Quantity (Tonnes) - -
Total Cost (Rs. lacs) - -
Avg. Rate/Tonne (Rs.) - -
3) Rice Husk Quantity (Tonnes) 7.08 26.65
Total Cost (Rs. lacs) 11.30 56.64
Avg. Rate/Tonne (Rs.) 1596 2125
Consumption per Kg. Of Production:
Wool/ Woolen/ Worsted
Synthetic Tops Yarn Yarn
Curr. Prev. Curr. Prev. Curr. Prev.
Year Year Year Year Year Year
a) Electricity (Unit) 6.40 12.54 4.35 12.55 9.46 12.56
b) Coal (Kgs.) - - - - - -
c) Husk (Kgs.) 18.35 22.02 - - - -
B. TECHNOLOGY ABSORPTION:
1. RESEARCH & DEVELOPMENT:
R&d department of the Company continued to support the Company's business
by providing improved as well as new products and process to establish
a) Proper product development through extensive analysis of the existing
qualities of yams have resulted in encouraging results and are expected to
yield nore benefits in future.
b) The Company will continue to given emphasis on product development in
process, product quality, cost reduction, improvement in process
productivity, safety and pollution control.
c) FUTURE PLAN OF ACTION:
The Company is planning to introduce various qualities of yarns, like
blended yarns to increase its overall market share, Various new and unique
coloured yams will also be launched shortly for the benefit of the
customers at an affordable cost.
d) EXPENDITURE ON RESEARCH & DEVELOPMENT:
Specific areas in which R&D activities carried out by the Company has
resulted in encouraging results and the benefits are expected in future:
- New Product/Process Development
- Technology Enhancement to active standards.
- Technology upgradation
Expenditure on Research & Development are very difficult,to ascertain as
the same staff and equipments are used for production and quality control.
2. Technology absorption, adaptation and innovation:
The Company is continuing its efforts to improve the quality of its
products thereby strengthening its market share.
3. Imported Technology (Imported during last 5 years) - Nil
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
a) Company has successfully entered into export market by making exports
during the year. The response to its products in the international market
is encouraging and repeated export orders are being received by the company
b) Total Foreign Exchange used and earned:
Used 45.08 35:32
Earned 325.87 288.87
for and on behalf of the Board
PLACE: LUDHIANA (N.K. OSWAL)
DATE : 31.08.2004 CHAIRMAN-CUM MANAGING DIRECTOR