PATHEJA FORGINGS & AUTO PARTS MANUFACTURING LIMITED
DIRECTORS' REPORT
THE MEMBERS OF
PATHEJA FORGINGS AUTO PARTS MANUFACTURERS LIMITED
Your Directors present the 29th Annual Report and the accounts for the
period ended 30th September, 1997.
Your Company has decided to change its Accounting Year from March 31st to
September 30th. Consequently, the current accounts are prepared for a
period of 18 months ( i.e. 1st April, 1996 to 30th September, 1997) as
against 12 months for the previous year. Necessary approval for extension
of the Accounting Year has been obtained from Registrar of Companies,
Maharashtra.
The Company had also obtained extension of time for holding the 29th Annual
General Meeting from the Registrar of Companies, Maharashtra, upto 31st
March, 1998. However, due to several constraints, the 29th Annual General
Meeting could not be held before 31st March, 1998.
3. DIVIDEND:
In view of the adverse financial results, the Directors regret their
inability to recommend any dividend on Equity Shares or Preference Shares
for the period ended 30th September, 1997.
The Directors also regret that the dividend for 1995-96 could not be paid
despite all the efforts, in view of the acute liquidity crunch faced by the
Company owing to several factors explained below.
4. OPERATIONS:
The Company undertook major expansion programmes in last three years in
order to expand the existing business manifold and to bring the Company to
the World Class standard by modernisation and technology upgrading. Major
expansion programmes implemented/ started in last three years are as under:
1995-96 : Expansion of forging capacities at all sites.
1996-97 : Setting up of a Gear Box line
- Total investment - Rs.301 Crores
The expansion programmes were planned to be funded through internal
accruals and term loans from Financial institutions and External Commercial
Borrowings. Though the loans were sanctioned by various financial
institutions, there was delay in release of the loans for more than a year,
which affected the implementation and project viability adversely. However
the Company pursued repaid implementation of the projects and the
requirements of funds for the projects was temporarily met out of internal
generations, affecting working capital and necessitating tapping of short
term high cost sources such as lease, hire purchase, bill discounting and
intercorporate deposits.
Further, to add to the woes of the Company, there was delay in assessment
and release of working capital requirements compounding the Company's
already overstretched finances.
Since last one year, as you may be aware, there has been general slow down
in the automobile industry, which has resulted in pile - up of inventories
sod blocking of the debtors. On export front, the Company adopted a very
aggressive attitude, which resulted in spectacular growth in exports.
However, the realisation of export dues was delayed inordinately due to
change in the design by the export customers. The overdue export
receivables of Rs.33 crores added fuel to the fire.
Under the cu-circumstances, as the loss suffered by the Company has
completely eroded the net worth of the Company, the Company has become a
Sick Company within the meaning of Sick lndustrial Companies (Special
Provisions) Act, 1985.
Accordingly, as required under the said Act, the Company will be making a
reference to the Board for Industrial Financial Reconstruction, in order
to determine the measures to be adopted with respect to the Company.
5. PUBLIC DEPOSITS:
As on 30th September, 1997 there were no overdue and unclaimed deposits
except one deposit of Rs. 2,00,00,000/- which matured on 24th June, 1997
but remained unpaid. The said deposit due to the reasons explained above is
said not paid.
6. PARTICULARS OF EMPLOYEES:
The particulars of employees as required under Section 217 (2A) of the
Companies Act, 1956, read with the Companies ( Particulars of Employees )
Rules, 1975, as amended, are annexed hereto.
7. DIRECTORS:
Mr. M. Sudhendranath, has been nominated on the Board with effect from 3rd
December, 1997 as Nominee of The Industrial Credit Investment Corporation
of India Limited (ICICI), in addition to Mr, C. L. Ghalsasi.
During the period under review, SICOM withdrew the nomination of their
Nominee Director, Mr. N.H. Bhatter, from the Board of our Company and
Consequent thereto, Mt Bhatter, relinquished ms office as Director of the
Company.
Mr.N.G. Shahane, Director retires by rotation and, being eligible offers
himself for re-appointment.
8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS
& OUTGO
The details as required under the Companies ( Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 arc annexed.
AUDITORS:
M/s. Nanda 8 Co., the retiring Auditors of the Company, being eligible are
proposed to be reappointed. The observations made by the Auditors in their
report have been adequately dealtwith under Notes forming part of Accounts
which are self-explanatory.
ACKNOWLEDGEMENT:
The Directors place on record their appreciation and acknowledge with
gradtitude the support and co-operation extended the Company's Bankers,
Financial Institutions, Shareholders, Customers and Employees at all levels
and look forward to their continued support and co-operation.
On behalf of the Board of Directors
Man Singh Patheja
Chairman
Place : Pune
Date : 25th October, 1998
ANNEXURE
I TECHNOLOGY ABSORPTION
Areas in which R & D was carried out:
1. Development of new products/processes.
2. Improvement in man/machine productivity
3. Deputation of technical personnel for training
The Company pursues its R & D efforts as a continuing programme in keeping
with latest developments from time to time.
Expenditure on R & D
(a) Capital : Nil
(b) Recurring : 2.15 lacs
(c) Total : 2.15 lacs
(d) Total R & D expenditure
as a percentage of total turnover : 0.0052%
The aforesaid expenditure represents what is directly attributable to R D.
Other incidental expenses have been reflected under appropriate heads
11 FOREIGN EXCHANGE EARNINGS AND OUTGO
In keeping with the Company's constant thrust on exports, the Company is
slowly and steadily expanding the export horizon.
Total foreign exchange used and earned:
USED : Rs. 762.96 Lacs
EARNED : Rs. 4649.19 Lacs
On behalf of the Board of Directors
Man Singh Patheja
Chairman
Pune
25th October, 1998.
|