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Trackparts of India Ltd.

BSE: 530373 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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Trackparts of India Ltd. (TRACKPARTSOFI) - Director Report

Company director report

TRACKPARTS OF INDIA LIMITED ANNUAL REPORT 1999-2000 DIRECTORS' REPORT TO THE MEMBERS, 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. DIVIDEND: In view of the losses incurred by your Company during the year under review your directors do not recommend any Dividend for the year. OPERATIONS: 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. STAFF: 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 OUTGO: 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' Report. FIXED DEPOSITS: The Company has neither accepted any deposit nor any deposit is outstanding. DIRECTORATE: 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 dated 12.01.2000. AUDITORS: 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 that period. (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. ACKNOWLEDGEMENTS: 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 Place: Kanpur Dated: 14th March, 2001 ANNEXURE-1 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 daytime. 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. FORM B TECHNOLOGY ABSORPTION: 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: 1999-2000 1998-99 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: 1999-2000 1998-99 Earnings Rs. NIL Rs.5719566 Outgo Rs. 168862 Rs.3869647