TRACKPARTS OF INDIA LIMITED
ANNUAL REPORT 1999-2000
The Directors present their Thirty First Annual Report on the working of
the Company together with the Audited Statement of Accounts for the year
ended 31st March, 2000.
In view of the losses incurred by your Company during the year under review
your directors do not recommend any Dividend for the year.
The total income of the Company amounted to Rs. 251.27 Lacs as against
Rs.1,269.19 lacs. The decrease was mainly due to closure of the Plastic
Division w.e.f.3.6.1998 and the hiving off of the Forge Division w.e.f.
1.1.1999 as reported in our previous report pursuant to the order dated
30.11.1999 passed by the Company Law Board in the matter of Company
Petition no. 35 of 1998. Further the reduction was compounded due to
complete withdrawal of banking facilities by the Bankers of the Company and
the Company had to operate without working capital facilities for a major
part of the year under review. The Loss before depreciation was at
Rs.653.86 Lakhs during the year as against Rs.421.67 Lakhs in previous
year. The losses of the Company continued during the year under review due
to disputes amongst two groups of directors and shareholders of the
Company. Accordingly the total assets of the Forge Division including,
fixed and current assets net of current liabilities as at 31.12.1998 are
shown as investment under the schedule of Investments as at 31.3.1999
pursuant to the order dated 30.11.1999 passed by the Company Law Board in
the matter of Company Petition no. 35 of 1998 and the said order is
operative until date. The Board has initiated steps to sell off the Plastic
Division of the Company. However, the Company is facing hurdles due to the
restraint order passed by the Appellate Court in the suit filed by Cosmos
Co-operative Bank Ltd. in which suit all the secured lenders of the Company
are parties to the suit.
In view of the reasons stated elsewhere in this report the accounts of the
Company for the year under review could not be finalised within the
statutory period and the same could be finalised together with the Accounts
for the Financial Year 1997-98 and 1998-99 only in the month of March, 2001
and that too after seeking directions and intervention from the Hon'ble
Allahabad High Court. Duly audited accounts for the year under review have
reflected a position whereby the entire net worth of the Company has been
eroded as at the end of the previous financial year under review and your
Company has become a sick Industrial Company within the meaning of Clause
(o) of subsection (1) of Section 3 of the Sick Industrial Companies
(Special Provisions) Act, 1985. Your directors shall be filing necessary
reference before the Board of Industrial and Financial Reconstruction.
The Industrial relations in all the units of the Company were cordial
during the year under report in the operational units. The Board records
its appreciation for the sincere team spirit and hard work put in by all
categories of its staff and employees during the year.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND
The information required u/s 217(1)(e) of the Companies Act, 1956 read with
the Companies (Disclosure) of Particulars in the Report of Board of
Directors) Rules, 1988 and forming part of the Directors Report, is given
in the accompanying Annexure - 1.
PARTICULARS OF EMPLOYEES:
There are no employees in respect of whom information is to be provided as
required u/s 217 (2A) of the Companies Act, 1956 read, with the Companies
(Particulars of Employees) Rules, 1975 and forming part of the Directors'
The Company has neither accepted any deposit nor any deposit is
A Fresh Board of Directors consisting of three directors namely, Shri Dilip
Bhargava, Shri Deepak Bhargava and Shri Sameer Bhargava as directors was
reconstituted on 20.01.2000 in terms of the Hon'ble Company Law Board order
The members in their Annual General Meeting held on 30th September, 1997
appointed the present Auditors, M/s B.C. Jain & Co., and their appointment
was made until the conclusion of next Annual General Meeting. Since there
has been no subsequent Annual General Meeting held for the reasons as
furnished elsewhere in this report, the present Auditors will continue to
hold their off ice as such.
The observations of the Board of Directors on the comments of the Auditors
in their Audit Report and reference to Notes on Accounts forming part of
the Financial Statement are as below :
(a) In respect of their comments under para 3.3 of their report your
directors submit that the note is self-explanatory and it is further stated
that the Company has made neither any payment nor any withdrawal during
(b) In respect of their comments under para 3.6 of their report, your
directors submit that at the time of signing of this report some
confirmations could not be obtained but continuous efforts are being made
in that regard.
(c) The rest of the comments are self-explanatory and need no further
comments from your directors.
OTHER MATERIAL INFORMATION:
The acute shortage of funds in the operations of the Plastic Division at
Mumbai and the indifferent attitude of the erstwhile directors led to its
closure w.e.f.3.6.1998. Since then the said unit continues to be closed.
The closure of this unit and matters relating to its future working led to
differences Amongst the directors and shareholders. As a consequence
thereof one set of shareholders together with some of the erstwhile
Managing and Joint Managing Directors filed few civil cases in District
Court, Kanpur and a petition before Hon'ble Company Law Board under section
397 and 398 of the Companies Act, 1956 in the month of July 1998. Various
interim orders were passed by the Company Law Board from time to time and
the matter was finally decided by it vide its order dated 30.11.1999 read
with its order dated 12.1.2000. It is pertinent to mention that until the
new Board was constituted w.e.f. 20.1.2000 in terms of the said orders of
Company Law Board, there was virtually no functional Board of Directors
since disputes arose amongst directors. The Company Law Board ordered that
the shares of petitioners, minority shareholders were to be purchased by
the Company at a value to be determined by a valuer as on 31.12.1998. The
said order further provided the division of the assets of the Company with
a cut off date of 1.1.1999 as a result of which the Forge Division of the
Company was to be sold to the petitioners accordingly at a price to be
determined by the valuer as on,date and the right to control and manage the
said unit with effect from that date independently without any
interference. The Company Law Board further directed that no general body
meeting of the Company will be convened or held either by the Company or by
any shareholder and this, part of the order is operative as on date read
with Allahabad High Court order dated 10.10.2000. It is pertinent to
mention that the respondents including your Company are contesting on the
issue of division of assets as the Forge Division is an integral part of
the manufacturing facilities of the Company and the same was set up by way
of backward integration of manufacturing facilities of your Company. The
matter is presently sub-judice before the High Court of judicature at
Allahabad. However, the Statutory Records of the Company are in the illegal
possession of the erstwhile directors of the Company. In the meantime one
of the lenders of the Company namely Cosmos Co-operative Bank Ltd. filed a
money recovery suit in co-operative court in Mumbai and obtained an ex-
parte decree in its favour. In terms of this decree the said Bank attached
the Office and Factory premises of the Plastic Division at Mumbai. In the
meantime all the Banks ceased operations in their accounts and the working
capital facilities were frozen which position continues until date.
Immediately after reconstitution the new Board of Directors took steps to
finalise the accounts of the Company starting from the financial year 1997-
98 which could not be finalised earlier in view of the aforesaid situation.
It took quite some time to get the records and Books of Accounts of the
Plastic Division from Mumbai as the said unit was attached by the Cosmos
Co-operative bank and the militancy of the erstwhile workers of the said
unit who did not allow removal of any records of the Company from its
factory. After considerable efforts your directors could get all the Books
of Accounts to the Registered Off ice of the Company. The Audit and
finalisation was further delayed as thc erstwhile Managing and Joint
Managing Directors who are illegally withholding the Statutory Records of
the Company refused to allqw inspection thereof to the Auditors and the
same could be done by the intervention of the Hon'ble Allahabad High Court
vide their order dated 11.1.2001.
The Directors wish to place on record the tremendous support extended by
the suppliers and staff of the Company who have whole heartedly extended
their fullest co-operation.
For and On behalf of the Board
Dilip Bhargava Sameer Bhargava Deepak Bhargava
Chairman Director Director
Dated: 14th March, 2001
Particulars required in accordance with the provisions of Section 217(1)(e)
of the Companies Act, 1956, read with the Companies (Disclosurs of
Particulars In the Report of Board of Directors) Rules, 1988. (A)
Conservation of Energy:
1. Measures Taken:
i) Improved lighting by providing roof lights with transparent Plastic
Sheets has resulted in practically zero use of power for lighting during
ii) Reorganised quench tank arrangements and proper agitation has resulted
in more effective cooling which will reduce reworking in heat treatment
thereby reducing our total power and oil consumption.
iii) A Spark Erosion machine was installed in the Die Shop of our Forge
Division to replace the more energy consuming hand pneumatic grinding.
2. Additional Investment/Proposals:
i) Suitable Burners will be installed on the Bogey Hearth Furnace so that
Furnace Oil could be used throughout the year instead of using more
expensive LDO during winters.
ii) Modifications in the more efficient continuous Heat Treatment Furnace
to have both water and Oil quenching arrangements so that all jobs are heat
treated there itself.
iii) Install a Heat Exchanger in the oil Quenching Circuit of the Bogey
Furnace to reduce reworking of heat treatment jobs.
3. Impact of 1 & 2:
The above,measures and proposals will definitely make considerable savings
in Fuel Oil & Electrical energy.
1. Research & Development (R & D)
The Company has its R & D unit duty recognised and registered with the
Govt. of India, Deptt. of Scientific & Industrial Research, New Delhi and
carries on regular R & D work in its own field of operations.
(a) Specific areas of R & D:
i) Develop new or modify currently manufactured products.
ii) To look for cheaper & better raw materials and/or manufacturing
processes which will overall improve quality and reliability of our
products and also reduce total costs.
iii) Study & analyse service failures/product complaints and suggest
changes in materials and/or manufacturing processes, which will avoid such
failures in future.
(b) Benefits derived by above R & D:
i) The Company has developed new products, which were hitherto imported
saving Country's foreign exchange.
ii) We have effected many cost reductions, improvement in product quality
and product life enhancing the image and reputation of the Company.
(c) Plan of action:
i) We are now preparing for ISO 9000 and hope to get the certification in
due course of time.
ii) Our Continuous efforts towards product development, quality improvement
and reduction in total costs will continue.
(d) Expenditure on R & D:
i) Capital -- --
ii) Recurring 106552 209862
iii Total 106552 209862
iv) R & D Expenditure as a % of total turnover 0.42% 0.17%
2. Technology Absorption, Adaptation & Innovation:
(a) Efforts made in brief:
New technology received through foreign collaboration has been fully
absorbed and adapted. New technology, new design ideas received from time
to time, which improve our product quality and performance, are being
adapted continuously by our design and manufacturing people.
(b) Benefits derived:
Our efforts made towards adopting new technology & new ideas have
considerably improved our product quality and performance and have also
made it possible to introduce new products at competitive cost.
3. Foreign Exchange Earnings and Outgo:
Earnings Rs. NIL Rs.5719566
Outgo Rs. 168862 Rs.3869647