The Directors are pleased to present Thirty Forth Annual Report on the performance of the company for the financial year ended on 31st March'2014.
1. FINANCIAL RESULTS
(Rs in Lacs) PARTICULARS YEAR ENDED ON YEAR ENDED ON 31.03.2014 31.03.2013
Sales and other Income 2,879.94 3109.78
Less: Operating Expenses 2,489.22 2882.25
Profit before Interest and Depreciation 390.72 227.53
Interest 460.65 419.94
Depreciation & Impairment 274.91 309.13
Operational Profit before Tax (344.85) (501.54)
Previous Year Income / Expenses 0.58 3.97
Net Profit / (Loss) (345.42) (505.51)
Extra ordinary items - Profit on Sale of Fixed Assets 177.66 0.02
Income Tax 0.00 0.00
NET PROFIT FOR THE YEAR (167.76) (505.49)
2. PERFORMANCE REVIEW
During the year under review the sales and other income has declined to at Rs.2879.94 Lacs as against Rs. 3109.78 Lacs in the previous year. The decline was mainly due to overall week domestic economy, pressure on selling prizes due to recession, shifting of customers' interest towards low cost products, unhealthy competition from unorganized sector etc. However the export sales during the year have doubled to Rs. 683.04 Lacs as against Rs. 337.36 Lacs in the year 2012-2013.
3. OPERATIONAL PERFORMANCE
In spite of decrease in sales the profit before interest and depreciation increased by 71.50% to Rs. 390.72 Lacs as against Rs. 227.53 in the previous year. This is result of well thought strategy cost reduction, optimum utilization of sources, better product mix and higher automation. The company has strengthened the domestic marketing team and installed various machines during the year, the impact of the same will be seen in the coming year.
4. NET WORTH OF THE COMPANY AND SICKNESS CRITERIA
The Company has been registered with Board of Industrial and Financial Reconstruction, New Delhi (BIFR) as a sick company as the net worth of the company turned negative as per audited balance sheet as on 31.03.2013.. Hon'ble BIFR has appointed Punjab National Bank as Operating Agency (OA). The Company is preparing the Draft Rehabilitation Scheme (DRS) for submission to the BIFR & OA.
5. CAPITAL REDUCTION AND ISSUE OF RIGHT SHARES AS PER DRS
In accordance with the DRS being prepared by the Company for submission to Operating Agency and to the BIFR, your Directors are proposing to reduce the face value of the share by 50% from the current face value of Rs.10/- per share to Rs.5/- per share. Thus the share capital would be reduced from Rs.526.35 Lacs to Rs.263.18 Lacs. This reduction in capital would help in reducing the accumulated losses to that extent, besides the face value of the share will represent its true value and would be in the larger interest of the shareholders in long run. Although the reduction of capital would also be a part of the DRS, necessary process is also being initiated under the provisions ofThe Companies Act 2013 to effectuate the said reduction. An appropriate resolution in this regard is being proposed in the ensuing Annual General Meeting for consideration of members.
6. ISSUE OF RIGHT SHARES AS PER DRS
In accordance with the Draft Rehabilitation Scheme being prepared by the Company for submission to Operating Agency and to the BIFR, your Directors are proposing for fresh issue of shares on right basis to the existing shareholders in the ratio of one equity share for every two shares held. This right issue is to meet the promoters contribution in the scheme of rehabilitation. This fresh right issue of shares will strengthen the financials of the Company and would be in the overall interest of the Company.. Although the right issue of capital would also be a part of the DRS, necessary process is also being initiated under the provisions of The Companies Act 2013 to effectuate the said issue. An appropriate resolution in this regard is being proposed in the ensuing Annual General Meeting for consideration of members.
7. DIVIDEND:
In view of unavailability of the profits, the. Board of Directors expresses its inability to declare any dividend for the year ended 31st March 2014.
8. FIXED DEPOSIT:
Your Company has not accepted any deposits under section 73 (1) of the Companies Act, 2013, from the public during the year.
9. INSURANCE:
All the properties of the Company including Plant & Machinery, Stores and Stacks, wherever necessary and to the extent required have been adequately insured. '
10. DIRECTOR
During the year Mr. Nawnit machhar, Whole Time Director of the Company resigned due to personal reasons The Company is thankful to him for his valuable contribution made to company from time to time.
Shri.B. H. Tapdiya, Director of the Company is retiring by rotation and being eligible to offer himself for re appointment. The Board recommends his re- appointment.
11. AUDITORS: '
M/s. Rathi & Bangad, Chartered Accountants, Aurangabad, the Statutory Auditors of the Company are retiring at the forthcoming annual general meeting and they are eligible for re-appointment. The Board recommends their re-appointment for next three years.
12. PARTICULARS OF EMPLOYESS:
There are no employees drawing remuneration exceeding the monetary ceiling prescribed under Section 217(2A) of the Old Companies Act,
1956 or as per New Companies Act 2013 read with the companies (Particulars of Employees) Rules 1975 old and Rule 2011.
13. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of section 134(3 & 7) of the Companies Act, 2013, the Board confirms that:
a) Applicable accounting standards have been followed with explanation for any material departures
b) Selected accounting policies have been applied consistently to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period.
c) Proper and sufficient care has been taken for the maintenance of adequate accounting records for safeguarding the assets of the company and for preventing and detecting fraudulent other irregularities
d) The annual accounts are prepared on a going concern basis;
e) Internal financial controls laid have been followed by the company and that such controls are adequate and are operating effectively.
f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
14. COMPOSITION OF AUDIT COMMITTEE
The composition of Audit committee of the company as follows:
SR NAME OF THE MEMEBR DESIGNATION NO
01. SHRI. G. M. BOTHRA CHAIRMAN (Independent Director)
02. SHRI. ARVIND MACHHAR MEMBER (Managing Director)
03. SHRI. B. H. TAPDIYA MEMBER (Independent Director)
15. INFORMATION TECHNOLOGY (IT)
The Company firmly believes that IT is the backbone of any industry in today's environment and is using it as a tool for communication; improve in production and productivity besides using it as marketing tool. The efficiency, effectiveness and reliability of the available sources of the Company is improved due to optimum use of IT. The Company has mini ERP program me at its manufacturing facility.
16. HEALTH, SAFETY AND ENVIRONMENT
The company also accords highest priority to Protection of Environment. And therefore has effective waste management systems to prevent any hazards to the environment; has taken adequate steps to prevent occurrence of any accidents; has taken measures to ensure Health and Safety of its employees and work force. The company conducts regular medical checkups and counseling to ensure fitness of its employees. The company has taken insurance policy of all of its employee.
17. EXTRACT OF ANNUAL RETURN AS PROVIDED UNDER SECTION (3) OF SECTION 92 OF THE COMPANIES ACT 2013.
Pursuant to the provisions of section (3) OF SECTION 92 of the Companies Act, 2013, the Board confirms that:
a) The company has accepted the new formats of Annual Returns for the financial year 2013 14 and contents thereof to disclose the detail information as per new form no 7.7 containing the particulars as per financial year.
b) The meetings of the Boards of the company are to be given in Corporate Governance Report of the company.
c) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for preventing and detecting fraud and other irregularities in terms of Section 149 of Companies Act, 2013.
d) The company has adopted all the provisions and procedure laid under the new companies Act 2013 for the purpose of appointment of Director, Independent Director and their remuneration including their criteria for qualification, reservation etc. as per section 178 (3) of the companies act 2013.
e) During the year company has not given any guarantee; loan to any person or body corporate; made new investment in terms of section 186 of the companies act 2013 except for advances to suppliers and employees in the normal course of business were given.
f) During the year company has complied the requirements of Section 188 of Companies Act, 2013 with respect to Related Party Transactions.
18. AUDITORS' OBSERVATIONS:
Refer Point No.1 of the Auditors Report: In respect of the accounts of the Company for the year have been prepared on Going Concern Basis', the BIFR has appointed Punjab National Bank as the operating agency. The Company has approached to sole banker Punjab National Bank for re schedulement of installments and concessions in rate of interest and bank charges. The Company is approaching to other governments for some reliefs. The Company is preparing Draft Rehabilitation Scheme for submission to OA & BIFR. "In view of above the accounts of the Period under review have been prepared on going concern basis". (Refer Note Number 35)
Refer Point No.2 of the Auditors Report: In respect of the debtors, creditors, loans and advances including inter corporate deposits (taken and given), balances with statutory / fiscal liabilities ( Assets & Liabilities) i.e. Excise & Service Tax deposits / balances, the company is following the system of perpetual confirmation and reconciliation. Accordingly, all the accounts are reconciled and adjusted as and when a note of discrepancy is received from the concerned party and in the opinion of management the ultimate difference will not be material. (Refer Note no.40)
Refer Point No.3 of the Auditors Report: -In respect of unimplemented portion of BIFR's Sanctioned scheme, the Company is making efforts legally or otherwise to get the scheme implemented. The scheme has attained finality and in the opinion of Directors, the scheme will be implemented fully. (Refer Note No.34)
19. REPORT ON CORPORATE GOVERNANCE
A report on corporate governance as required in terms of clause 49 of the Listing Agreement with the Bombay Stock Exchange, containing required details is annexed with report and forming part of this report.
20. CORPORATE SOCIAL RESPONSIBILITY
The Company has introduced the 5 S, good manufacturing practices, regular training programmes of casual workers and permanent employees. Aurangabad plant has been recently certified by ISO and ISO Certification for Haridwar plant is in process. The Company is making all efforts to improve efficiency on all fronts to sustain competition and thereby continue to keep the employment of the employees, contribute towards the exchequer by way of direct and indirect taxes, generate foreign exchange for the country through exports and remain in business.
21. RELATION WITH EMPLOYEES
The relation with the employees continued to be cordial during the year. The directors wish to place on record their sincereappreciation for the excellent team spirit with which they have worked for the progress of the Company.
22. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNIGS AND OUTGO ETC
a) Conservation of Energy: The Company consistently pursues reduction in energy consumption in its manufacturing process on an ongoing basis. The Company have been granted monetary Incentive from Govt, of Maharashtra for energy saving. At Haridwar the Company has shifted running of plant on "generating set" in case of power failures and have now taken power connection with "continuous power supply connection from Uttrakhand Power Supply Company Ltd (UPSCL) by paying 15% extra power tariff. Thus elimination of power through generator set has more than compensated us not only in power cost but also helped us in reducing the rejection.
b) Technology Absorption: The Company has not installed any new Plant or Machinery with new technology during the year.
c) Foreign Exchange Earning and OutgoForeign Exchange earning of the Company is Rs. 807.27 lacs for the year under revie w, whereas the outgo is Rs.462.48 lacs.
23. ACKNOWLEDGEMENT
The Board of Directors place on records their sincere gratitude to the employees of their hard work and would like to compliment those Executives who were involved in starting timely production at Uttarakhand plant for their all out efforts, to Punjab National Bank as sole banker, statutory Authority for their continual support and to the investors for their trust and confidence on the Management.
BY ORDER OF THE BOARD
PLACE: AURANGABAD ARVIND MACHHAR DATE: 30.05.2014 MANAGING DIRECTOR DIN:- 00251843