1995 MAZDA TEXTILES INDUSTRIES LIMITED DIRECTORS REPORT Your Directors submit their EIGHTH Annual Report together with the audited accounts for the year ended on 31st March, 1995. 1. Operations Due to unprecedented flood situation in Surat City during September, 1994 the factory had to remain closed for nearly 3 weeks. By the time situation was returning the normal due to wide spread of epidemic of plague the upcountry workers and unskilled labourers migrated from Surat, which again forced the company to abandone the production for 6 to 8 weeks. Due to levey of excise duty at the yarn stage proposed in the Union Budget of 1994-95, texturisers in Surat had suspended the operations for 5/6 weeks in March/April, 1995. The year under review remained extremely difficult which is evident from the drastic drop in the turnover of the company which had substantially gone up the previous year. 2. Future Prospects The textile industry and particularly the texturising industry is passing through a critical phase. The levy of excise duty at the yarn stage has almost brought the industry to standstill. Over capacity in texturising industry, recessionary trend in the art silk industry of Surat and the liquidity of finance have hard hit the industry. There does not seem to be immediate improvement in the performance of company and the industry in general. 3. Directors Shri Sajay Deokar retires by rotation and being eligible offers himself for re-appointment. 4. Fixed Deposits During the year under review Company has not accepted any deposit within meaning of Section 58A of the Companies Act, 1956. 5. Personnel Industrial relations remained cordial during the year under report and the Directors take this opportunity to express their appreciation for whole hearted co-operation extended by them. 6. Insurance The properties of the Company are adequate insured. 7. Statutory Statements Company does not have any employee drawing salary as stipulated under Section 217(2A) of the Companies Act,1956 read with Companies (Particulars of Employees) Rules, 1975. The prescribed details as required under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosures of particulars in the report of Board of Directors) Rules, 1988, are given in annexure. Your Directors regret their inability to recommended any dividend in view of the losses. The company has put a rehabilitative scheme to the Union Bank of India and to the Bank of Baroda. The main features of the scheme are as under: 1. Sanction of adequate Working Capital. 2. Concessional Rate of interest by 2% below the normal rate on term loan and as well as on Working Capital. 3. Reschedulement of Repayment of Term Loan after adequate moratorium. 4. Waiver of interest. The company has become sick company as defined by Section 3(i)(o) of Sick Industrial Companies (Special Provision) Act, 1985. Steps have been taken to refer to the Board for Industrial and Financial Reconstruction as required under Section 15 of the Said Act. Regarding Item No.4(xx) of the Auditors' Report in respect of Sick Industrial Company the Explanation is already given in this report. Regarding Auditors note on non-provision of interest Rs.56,75,963/- on Secured Loan, the Company has requested in rehabilitation scheme placed before the Company's Banker for waiver hence same has not been provided. You are requested to appoint auditors and fix their remuneration. ANNEXURE TO THE DIRECTORS' REPORT Additional information as required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988. [A] CONSERVATION OF ENERGY (a) Energy conservation measures taken. (b) Additional investment and proposals, if any, being implemented for reduction of consumption of energy. (c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods. (d) Total energy consumption and energy consumption per unit of production as per form of the Annexure in respect of industries specified in the Schedule thereto. [B] TECHNOLOGY ABSORPTION (e) Efforts made in technology absorption as per Form "B" of the Annexure. [C] FOREIGN EXCHANGE EARNINGS AND OUTGO (f) Activities relating to exports, initiatives taken to increase exports, development of new export markets for products and services, and export plans. (g) Total Foreign Exchange used and earned (i) Use for Import of Raw Materials. Commission on Export and for Travelling etc. (ii) Earned from Export of manufactured goods (sanitarywares). For and on behalf of the Board Mazda Textile Industries Ltd., V.F. Patel Chairman Place: Surat, Dated: 24th July, 1995.