SAURASHTRA PAPER & BOARD MILLS LIMITED
ANNUAL REPORT 2000-2001
Your Directors have pleasure to present 27th Annual report together with
the statement of accounts, for the financial period ended 30th September,
The Board of Directors do not recommend payment of dividend for the year
under consideration for both, Equity and Preference Shares.
Operations & Performance
Whilst, company's unit at Navagam is operational, the unit at Shapar is
temporarily closed since April 2000. Aside from the financial crunch, which
engulfed and diabled the company to carry out the operations at Shapar, the
draught in Saurashtra region made it very difficult in the fast two years
the availability of water that is very essential in the process of paper
The company's accumulated losses (Rs.1283.06) at the end of financial years
30.09.2000 exceeded it's net worth (Rs.864.27) and therefore the company
came within the perview of Section 3(1)(o) of Sick Industrial Companies
Act, 1985 and was declared a sick undertaking in August 2001. IDBI has been
appointed as an Operating Agency to examine the viability of the company
and submit the, Rehabilitation Scheme of the company to Hon BIFR.
During the year, the stock of raw materials amounting; to Rs. 314.25 lac,
lying at Shapar plant of the company was found to have been substantially
damaged and deteriorated. On the basis of an in house technical evaluation
made lay the company, the loss on account of this damage & deterioration
amounting to Rs. 293.08 lac has been charged to Profit & Loss account.
Incurrence of losses and subsequent declaration of Sick Undertaking has
left a deep mark on the functioning of the company. However, the management
is confident to reengineer the operations of the company and strategically
leverage to propel the company in to the good working platform. The
management is in the process of working out an effectual business plant to
translate it's vision of achieving strategic positioning and emerge as a
key player into reality.
Future Outlook And Market Scenario
The general Indian Industry was submerged under prolonged economic slump
and has started unfolding in the changing scenario in the later months of
2000. The demand for paper will continue to be good in the foreseeable
future with the expected increase in the level of literacy, standard of
living and the disposable income of the people in the coming years. Within
the paper industry, according to CRISIL INFAC, tile prospects of demand for
writing printing palter and the industrial Kraft paper, would also continue
to grow in demand in the coming years, albeit at relatively modest rates
(CAGR) of 5.9 and 6.9 respectively in the period 2001-05.
Net realisations are expected to improve in tile paper industry due to
overall favourable demand supply situation and the expected increase in the
input costs. In view of this, the company's revenue models are also
expected to witness tit upward trend.
The total amount of fixed deposits received by the company front the
shareholder and the public stood at Rs. 243.60 lass. The company has Rs.
211.25 deposit, which arc matured and claimed, but remained unpaid.
As per the directives from The Company Law Board, Western Region Bench
(Mumbai) vide order dated 10th January 2002 the repayment of deposits along
with interest to all its depositors is to be made in accordance with the
Revival Scheme which may be approved by BIFR.
The company has provided for the Restructuring of Fixed Deposits in it's
Revival Scheme submitted to IDBI (Operating Agency).
Pursuant to the newly incorporated provision of Section 274 (1)(g) of the
Companies Act, 1956 all the Directors of the company become disqualified
w.e.f. 13th December, 2001, due to Company's default in repayment of Public
Deposit. However, existing Directors of the Company can continue in their
office until the expiry of their existing term. At the forth coming Annual
General Meeting of the company term of Directors namely Shri Shectal S.
Mehta and Shri Hemant I. Shah expired and they call not be reappointed as
The company has prayed to Hon'ble BIFR in its Revival Scheme submitted to
IDBI (Operating Agency) for exempting from the applicability of provisions
of Section 274(1)(g) of the Companies Act with regard to the dis-
qualification of Directors of the company to hold the office of Director
during the operative period of the scheme.
Particulars relating to conservation of energy, technology absorption and
foreign exchange earnings and outgo are annexed hereto.
Statement pursuant to Section 217(2A) of the Companies Act, 1956 is not
With regard to the various qualifications made by Auditors in their Report,
Notes forming part of the Schedule : R of the Accounts are self
You are requested to appoint Auditors at the forthcoming Annual General
Meeting and to fix their remuneration.
Directors' Responsibility Statement
Pursuant to Section 217(2A) of the companies (Amendment) Act, 2000, the
directors confirm that:
1. In preparation of the annual accounts, applicable accounting standards
have been followed except with regards to the notes no. 3 & 9 of schedule
'R' forming part of the Accounts;
2. Appropriate accounting policies have been selected and applied
consistently and have made judgements and estimates that are reasonable and
prudent, so as to give a true and fair view of the state of the affairs of
the company as at September 30, 2001;
3. 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 fraud and other irregularities;
4. The annual accounts have been prepared on a `Going Concern' basis.
Your Directors place on record their appreciation of the unstinted support
given by the employees and the management in the conduct of business. They
also record their appreciation for co-operation received during the year
from Industrial Development Bank of India, Gujarat Industrial Investment
Corporation Ltd., State Bank of India and Bank of India. The directors also
wish to thank their Shareholders and Customers for their continued support.
For & on Behalf of Board of Directors
Place: Rajkot Shashikant K. Mehta
Date : 22.03.2002 Chairman
ANNEXURE TO THE DIRECTOR'S REPORT
Information under section 217(1)(e) of the Companies Act, 1956 read with
the Companies (disclosure of particulars in the Report of Board of
Directors) Rules 1988 and forming part of the Directors Report for the year
ended 30th September, 2000.
A. Conservation of Energy:
a) Energy conservation measures taken :
Company undertook appropriate steps to avoid undue loss of energy during;
the year by constantly monitoring energy consumption levels.
b) Additional investment proposals, if any being, implemented for reduction
of energy consumption. : Not Quantifiable
c) Impact of measures at (a) and (b) for reduction of energy consumption
and consequent impact on the cost of production of goods :
FORM- B (See Rule-2)
B. Technology Absorption
(12 Months) (9 Months)
I. RESEARCH & DEVELOPMENT (R & D)
1. Specific areas in which R & D : NIL NIL
carried out by the company
2. Benefits derived as a result of NIL NIL
the above R & D
3. Future plan of action. NIL NIL
4. Expenditure on R & D : NIL NIL
(a) Capital NIL NIL
(b) Recurring NIL NIL
(c) Total NIL NIL
(d) Total R & D expenditure as a
percentage of total turnover. NIL NIL
H. TECHNOLOGY ABSORPTION,
ADAPTATION AND INNOVATION
1. Efforts, in brief, made towards NIL NIL
technology absorption, adoption
2. Benefits derived as a result of
the above efforts, e.g. product
improvement, cost reduction,
product development; import
3. In case of imported technology (imported during the last 5 years
reckoned from the beginning of the financial year), following information
may be furnished
(a) Technology imported : Deinking and Dispersion Technology
(b) Year of import : 1995 and 1996
(c) Has technology been fully absorbed? : Yes
(d) If not fully absorbed, areas where this has not taken place, reasons
therefore and future plans of action. : N.A.
(12 Months) (9 Months)
C. Foreign Exchange Earnings and Outgo:
1. CIF value of Imports
i) Stores NIL NIL
ii) Waste paper NIL 1,68,83,737
iii) Chemicals NIL NIL
2. Expenditure incurred in foreign currency
i) Foreign Travels 3,85,145 39,002
3. Amount remitted (luring the NIL NIL
year in foreign currency
on account of dividend to
4. FOB Values of Export NIL 33,62,420
For & on Behalf of
Board of Directors
Place: Rajkot Shashikant K. Mehta
Date : 22.03.2002 Chairman