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SFL Industries Ltd.

BSE: 507725 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: N.A.
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SFL Industries Ltd. (SFLINDS) - Director Report

Company director report

SFL INDUSTRIES LIMITED Annual Report 1998-99 DIRECTORS' REPORT To The Members 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. DIVIDEND In view of substantial Loss incurred during the year under review, the Board expresses its inability to recommend any Dividend. WORKING RESULTS 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 disposed off. 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 formulated accordingly. DEPOSITS The Company does not have any scheme for acceptance of deposits CONSERVATION OF ENERGY, TECHNICAL ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO. 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'). DIRECTORS 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 on 30.12.1999. Shri Gian Singh, Director of the Company was re-appointed on rotation at the Annual General Meeting on 30.12.1999. AUDITORS 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. AUDITORS' REPORT The Auditors' observations in their Report are self explanatory as mentioned in the Notes on Account and need no comments. PERSONNEL 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'. MISCELLANEOUS 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. LISTING 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 listing fee. ACKNOWLEDGEMENTS 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 PLACE: Railmajra DATED: 12.02.2000 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.