SANDUR LAMINATES LIMITED
ANNUAL REPORT 2006-2007
The Directors present their Report and Accounts for the year ended 31 March
Profit/(Loss) for the year before interest and
depreciation. (0.02) 0.07
Add: Interest - (70.08)
Add: Depreciation (3.62) (3.63)
Loss before Exceptional item (3.64) (73.64)
Less: Exceptional item
Liabilities no longer required written back 333.20 -
Profit/(Loss) after Exceptional item 329.56 (73.64)
Loss brought forward from previous year (353.37) (279.73)
Deficit carried to Balance Sheet (23.81) (353.37)
During the year ended 31 March 2007,the company made a profit of Rs.329.56
crore after taking into account an exceptional item of liabilities
totalling Rs. 333.20 crore, no longer recurred and hence written back and
after charging depreciation of Rs. 3.62 crore. The capacity utilization at
the factory was nil owing, to working capital constraints.
Reference to BIFR:
The Company was declared as a 'Sick Industrial Company' by the Board for
Industrial and Financial Reconstruction (BIFR) on a reference made by the
Company when the accumulated losses exceeded the net worth. As the Company
was not able to tie up a viable rehabilitation proposal,the BIFR
recommended winding up of the Company and the matter was referred to the
Hon'ble High Court of Karnataka. Subsequently a negotiated settlement was
reached year the financial institutions and a bank and the strategic
partner having fully cleared the dues as per the negotiated settlement, the
Company has received no due certificates from these institutions and a
bank. In view of these developments, on a petition made by the Company, the
Hon'ble Karnataka High Court has remanded the winding up recommendation
back to the BIFR for 3 reconsideration of its earlier decision and
sandioning a suitable revive proposal. At its hearing geld on 14th May 2007
the BIFR directed the Company to submit revival proposal through Operating
Agency (OA)IDBI. Accordingly,the Company teas submitted a rehabilitation
proposal to the IDBI for issue of a Sanctioned Scheme.
1. As per the negotiated settlements reached with the financial
institutions and bank the strategic partner has fully cleared the dues and
obtained no due certificates. A revival proposal has already been submitted
to the Hon'ble BIER under which the Company is expected to result in
adequate cash flows. Hence the preparation of accounts on going concern
basis is in order.
2. The Company is negotiating for waiver of interest on advances received
from certain companies in view of huge losses incurred by the Company in
the past years. The Company is confident of obtaining necessary waivers
from the parties.
3. As per the revival proposal submitted to the BIFR, the Company proposes
to use the existing plant and machinery at the Company's factory premises
to produce Solar Photovoltaic Modules and generate enough returns to
justify their valuation, in the books of accounts.
In the absence of any profits, it is not possible to declare a dividend.
Shri. Mohammed Abdul Saleem was nominated by one of the promoters of the
Company viz.,The Sandur manganese & Iron Ores Limited vide its resolution
dated 28 April 2007 and accordingly tie has been co-opted on the Board of
Director at its meeting held on 30 April 2007 Further. The Company has
received a notice along with a deposit of Rupees Five Hundred proposing his
appointment as a Director in accordance with the provisions of Section 257
of the said Act.
Board of Directors commend the resolution:
Shri U.R. Acharya and Shri A G Suresh, Directors of the Company, retire by
rotation and being eligible, offer themselves for re-election.
None of the Directors are disqualified from being appointed as Directors of
the Company by virtue of the provisions of Section 274 of the Company
Act,1956, as amended by Companies Amendment Act, 2000.
M/s. A. F. Ferguson Associates, Chartered Accountants, retire and being
eligible, offer themselves for re-appointment.
Directors responsibility statement:
In accordance with the provisions of Section 217(2AA) of the Company Act,
1956, your Directors state that:
* In the preparation of accounts,the applicable accounting standards have
* Accounting policies selected were applied consistently, with reasonable
and prudent judgments being made so as to give a true and fair view of the
state of affairs of the Company as at the end of 31 march 2007 and of the
profit for the year ended on that date.
* proper and sufficient care has been taken 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 frauds and other irregularities.
* The annual accounts of the Company have been prepared on a going concern
The Directors Report on Corporate Governance is annexed to this report. The
certificate of the auditors, M/s A.F.Ferguson Associates, Chartered
Accountants, regarding compliance of conditions of Corporate Governance as
stipulated under clause 49 of the Listing Agreement with the Stock
Exchanges is also annexed hereto.
Conservation of Energy:
The particulars as prescribed under Section 217(I)(e) of the Companies Act,
1956, read with Companies (Disclosure of particulars in the report of Board
of Directors) Rules,1988,are not applicable as the factory has been closed
through out the financial year.
Foreign Exchange earnings and outgo:
During the year ended 31 March 2007, the Company had no Foreign Exchange
earnings or outgo.
During the year ended 31 March 2007, there were no employees whose
particulars are required to be disclosed under Section 217(2A.) of the
On behalf of the Board of Directors
Place: Bangalore VENKATRAO Y. GHORPADE
Date: 5 September 2007 Chairman & Managing Director
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Company's operations continued to be severely affected during the year
under review owing to working capital constraints and as a result, the
production of Copper Clad Laminates was essentially halted at the factory.
Owing to the promoter's inability to induct additional funds into the
Company or to submit a firm rehabilitation proposal, the BIFR, at its
hearing on 12 June 2003, passed orders for winding up the Company. During
the year the Company was able to make negotiated settlement with its
secured creditors under which the strategic partner has made all the
payments to the institutions and bank towards the settlement. The Company
has also filed compromise petitions with the DRT along with all the secured
creditors. Based on the managed circumstances, the High Court of Karnataka,
to whom BIFR had forwarded a copy of its order for winding up of the
Company, has now referred the matter back to BIFR for sanction of a
suitable revival package.
Outlook, risks and concerns:
The international demand for Copper Clad Laminates continues to grow,
driven by an increasing demand for electronic equipment. The pricing for
CCL has also firmed up. In the absence of a strategic partner to infuse
funds for working capital and provide economies of scale In procurement of
raw materials, the Company has not been in a position to take advantage of
the growing demand for Copper Clad Laminates.
A proposal to manufacture Photovoltaic Modules at the SLL factory utilizing
most of the equipment installed therein has been studied and found to be
technically feasible and commercially viable. With the understanding
reached with its strategic partner to commercialize this activity a
negotiated settlement has been arrived at with Financial Institutions. As
stated earlier, the Honble High Court of Karnataka has referred our case
back to the BIFR for sanctioning a suitable revival proposal.
Segment wise performance:
The Company has presently only ode segment of operations, viz., the Copper
Clad Laminates factory at Sandur, the operations of which were practically
suspended during the year for want of working capital.
Internal Control Systems and their adequacy:
The Company has well developed internal control systems and clearly defined
delegation of powers to its executives. The Company has an Internal Audit
Department which shall independently monitor the compliance with the,
approved internal control procedures and exercise of powers strictly as per
the approved delegation of powers. However, presently the Company does not
have any employees.
For the year ended 31 March 2007 Incurred a loss of Rs 364.72 lakh after
depreciation of Rs. 362.41 lakh but before considering execeptional item
relating to liabilities no longer required. The profit figure for the year
after considering the exceptional item was Rs 32955.90 lakh.
Material Development in Human Resources/ Industrial Relations:
Under the Voluntary Retirement Scheme all the employees of the Company have
retired from the services.