SFL INDUSTRIES LIMITED
Annual Report 1998-99
SFL Industries Ltd.,
Your Directors present 20th Annual Report together with Audited Balance
Sheet and Profit & Loss Account for the year ended 30th June, 1999.
In view of substantial Loss incurred during the year under review, the
Board expresses its inability to recommend any Dividend.
The production of SSP has decreased from 44538 MT during July 97 to June 98
to 23487 MT during July 98 to June 99. Similarly, sales have decreased from
44638 MT to 25092 MT during the corresponding period. The acute shortage of
funds has resulted in low production. Further, the Company has produced
32061 MT Sulphuric Acid during July 98 to June 99 in comparison to 43899 MT
during the corresponding period of previous year.
The Paper Industry as a whole is passing through unfavorable conditions on
account of forced Dumping of imported paper under liberalised Govt. Policy.
In order to avoid further losses, the Paper Plant lying closed had been
The Company in earlier years was trading in Imported DAP, Sulphur and Urea,
but during the period under review no trading could be done on account of
paucity of Funds. The opening stock of finished goods included a sum of Rs.
52.59 lacs meant for export to Bangladesh In view of Legal opinion, the
material has been destroyed/scrapped due to obsolescence factor.
REFERENCE TO BIFR
On account of huge losses suffered by the Company during 1997-98 and also
during the current year under review, its net worth had been eroded
completely during the last year itself which has further been eroded.
Accordingly, your Company has become a Sick Industrial Company in
accordance with the provisions of Sick Industrial Companies (Special
Provisions) Act, 1985. Your Directors in order to rehabilitate the Company
made reference to BIFR during last year, On the reference filed by your
Company, the Hon'ble BIFR vide its order dt. 28.07.1999 directed for
conducting special Investigation Audit (SIA) by an independent Auditor to
ascertain as to whether the company was sick or not. The Special
Investigative Audit Report (SIA) by M/s Thakur Vaidyanatha Aiyer & Co., was
received by the Company which had corroborated the facts and case of your
company and had indicted the earlier Management and the Banks for their
acts of omission and commission. Further the company had furnished its
comments/observations to BIFR on SIA Report. Your Directors are confident
that the company would be declared sick and a revival scheme would be
The Company does not have any scheme for acceptance of deposits
CONSERVATION OF ENERGY, TECHNICAL ABSORPTION, FOREIGN EXCHANGE EARNINGS AND
Particulars with respect to conservation of Energy, Technical Absorption
and Foreign Exchange Earnings and Outgo as per Section 217(i) (e) of the
Companies Act 1956 read with the Companies (Disclosure of particulars in
the Report of Board of Directors) Rules 1988 for the year ended 30th June,
1999 are annexed here to (Annexure `A').
Shri N. S. Vasant ceased to be the Chairman/Director on resignation w.e.f.
31.3.99. Further, Shri S. K. Sood and Shri B. S. Suri both Directors also
ceased to be the Directors on resignation w.e.f. 15.6.99. The Board places
on record the guidance and advice received from the Directors during their
association with the Company Shri Balbir Singh appointed on 12.3.99 as an
additional Director was subsequently appointed as Director of the Company
Shri Gian Singh, Director of the Company was re-appointed on rotation at
the Annual General Meeting on 30.12.1999.
The Auditors M/s Rajendra K. Goel & Co., Chartered Accountants Delhi were
re-appointed at the Annual General Meeting.
In pursuance of the Department of Company Affairs Orders dated 14.03.95
read with Section 233(B) of the Companies Act. M/s. R. J. Goel and Co. Cost
Accountants have been appointed the Cost Auditors for the year, 1999-2000.
The Auditors' observations in their Report are self explanatory as
mentioned in the Notes on Account and need no comments.
Industrial Relations during the year under review cordial. Your Directors
acknowledge the sincere and dedicated efforts made by the employees at al
levels and would like to record their appreciations for the same.
Particulars of the employees as required under Section 217 (2A) of the
Companies Act 1956, read with the Companies (Particulars of Employees)
Rules 1975 are annexed and form part of this Report as Annexure `B'.
As reported in the previous year, the Company was dragged into unwarranted
controversy during October, 1997 which dislocated the normal operation of
Bank Accounts. In this regard, the Company took immediate action and
cleared the matter with the Bankers. Despite this and further continued
requests upto the highest level of the Banks, have not allowed the normal
operation of Bank Accounts and the company is experiencing heavy shortage
of funds. The Company was maintaining a perfectly healthy Account with the
State Bank of India, yet the Bank chose to close our Account with assigning
any reason. The company has further been entangled in unnecessary
litigation by the Bankers.
The Company is listed on Bombay, Delhi, Ahmedabad and Ludhiana Stock
Exchanges and amount of Rs 1.23 lacs is due to the stock Exchanges towards
Your Directors express their gratitude for the assistance and cooperation
received from various Departments of Central and State Governments, Dealers
and the Shareholders during the year under review.
For AND ON BEHALF OF THE BOARD,
BALBIR SINGH RUPINDER KAUR
DIRECTOR EXECUTIVE DIRECTOR
ANNEXURE - A
INFORMATION PURSUANT TO SECTION 217 (1) (e) OF THE COMPANIES ACT, 1956 READ
WITH COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF
DIRECTORS) RULES, 1968 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE
PERIOD ENDED 30th JUNE, 1999.
A. CONSERVATION OF ENERGY:
The Company is making continuous efforts to conserve energy wherever
practicable by economising on the use of Power and Electricity in the
Factory & Offices.
B. TECHNOLOGY ABSORPTION
a) Research and Development (R&D)
The Company is carrying on routine Research and Development activities in
laboratory to bring further improvement in its products.
b) Technology Absorption
The Company has not imported any Technology for its plant.