ELECTREX (INDIA) LIMITED
ANNUAL REPORT 2005-2006
Your Directors herewith present the 22nd Annual Report and the Audited
Statement of Account for the year ended on 31st March 2006.
(Rs. in Lacs)
Particulars For the year For the Previous
ended year ended
Sales 4138.66 3155.59
Other Income 479.52 1025.15
Profit/Loss before Interest & Depreciation 454.03 568.25
Finance Charges 52.09 19.36
Depreciation 1248.60 129.05
Profit/(Loss) before Tax (846.60) (700.17)
Profit/(Loss) after Tax 649.26 (700.17)
Balance brought forward from previous year 27867.29 (27167.12)
Balance carried forward to Balance Sheet 28716.55 (27367.23)
During the year the company has achieved a turnover of Rs.4138.66 lakhs
against the previous year turnover of Rs.3155.59 lacs and there is a
substantial increase in the sales as well as in the production volumes.
On account of various measures taken by the company and the constant end
continuous effort put by the company in delivering the customer a quality
product at a competitive price has resulted in improvement in selling
The new products launched in the previous year by the company is
contributing significantly to the sales growth and the same trend is
expected to continue in the following years to came.
Status of Reference with BIFR:
As informed earlier reference made by the Company was registered with BIFR
and IFCI was appointed as Operating Agency (OA) u/s. 16(2) of SICA.
Initially the BIFR declared the Company as a sick company. After
considering the report submitted by the IFCI, the Operating Agency, the
BIFR in its subsequent order dated 21st October 2002 ordered for change of
management of the Company. The appeal filed before the Appellate Authority
for industrial and Financial Reconstruction (AAIFR) was dismissed.
Subsequently the company filed a Writ Petition before the Hon'ble High
Court of Karnataka and obtained a stay on the orders of BIFR and AAIFR.
Subsequently the Hon'ble High Court has permitted certain Banks & Financial
Institutions to initiate legal proceedings before DRT.
As the Company has incurred loss, your Directors have not recommended any
Despite the sickness of the Company and the liquidity constraints, the
Company has been able to make repayment of principal deposits of Rs.11.68
lacs for the year ended 31st March 2Q06 As on 31st March 2005. Total amount
outstanding is Rs.1278.82. (excluding interest). The Company Law Board
(CLB) in its earlier orders under Section 58AA had directed that the
Company to repay the deposits covered under its order together with the up-
to-date interest in accordance with the scheme which may be sanctioned by
BIFR. However, the Company had provided for repayments or the total fixed
deposits in the Rehabilitation cum One-Time-Settlement Scheme submitted to
Financial Institutions, Banks & BIFR. In the light of the orders of the
Hon'ble High Court of Karnataka the BIFR directed the Fixed Deposit Holders
not to take/pursue legal action against the Company, its promoters and
Directors in terms of BIFR permission granted after 29th May 2003 till
final disposal of the writ petition by the Hon'ble High Court of Karnataka.
The cases filed against the Company and Directors U/S. 138 of the
negotiable Instruments Act, 1881 for dishonour of cheques are at various
stages of hearing. The winding up petitions tiled by the creditors u/s. 433
of the Companies Act, 1956 have been stayed by the Hon'ble High Court of
Karnataka in view of the sickness of the Company. A number of cases have
been amicably settled out of court.
The Company has been making efforts to resolve outstanding issues with
banks, financial Institutions and NBFCs and creditors and has been
successful in setting with some creditors either by OTS or reschedulement
of the loan, ICICI Bank and MIZUHO Banking Corporation have assigned their
debt to Kotak Mahindra Bank Limited.
A. Auditors have observed in para 4.5 of their report that the directors
are disqualified for re-appointment under clause 1(g) of sub-section 274 of
the Companies Act, 1956. We are, however advised that the Directors are
not disqualified that the appointment/re-appointment in the case of
defaulting Company. Accordingly the Directors are eligible for re-
appointment at the ensuing Annual General Meeting.
B. The Auditors in para 4.6 of their report have made certain observations
on note No. 5, 6, 7 and 8 or schedule S which may please be referred
for more details, as the same are self-explanatory.
Debenture Redemption Reserve:
In view of the loss, no reserve has been created.
M/s. T.R. Chadha & Co., Chartered Accountants, retire at the ensuing Annual
General Meeting and are eligible for re-appointment.
Particulars of Employees:
No employee of the Company was in receipt of the remuneration beyond the
limit prescribed under section 217(2A) of the Companies Act, 1956 read with
the Companies (Particulars of Employees) Rules, 1975.
Directors' Responsibility Statement:
In terms of Section 217(2AA) of the Companies Act, 1956 inserted by the
Companies (Amendment) Act, 2000, your Directors report that:
i) In the preparation of the Annual Accounts, the applicable accounting
standards have been followed.
ii) The Directors have selected such accounting policies and applied them
consistently and made judgement and estimates that are reasonable and
prudent and 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 loss of the Company
for that period.
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities.
iv) The Directors have prepared the Annual Accounts on a going concern
Your Company had en Audit Committee and the present Audit Committee
consists of the following three Directors: Shri Anant V. Hegde (Chairman),
Shri Ajit V. Hegde and Shri. Jaidev Massnd. The recommendation of the Audit
Committee were reviewed and accepted to ensure compliance at all relevant
The Employee-relations continued to be cordial throughout the year.
The Board wishes to thank the employees at all levels for their valuable
contribution and continued commitment of the Company.
The particulars prescribed by the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 are furnished as Annexure to
The Directors wish tie place on record their sincere appreciation yet again
for the continued co-operation the Company has received from the Financial
Institutions and Banks as well as from the Customers, Dealers and Suppliers
of the Company.
For and on behalf of the Board
PLACE: BANGALORE ANANT V. HEGDE
DATED: 28TH AUGUST, 2006 Chairman & Managing Director