DIRECTORS FOR THE YEAR ENDED 31ST MARCH, 2011
To the Members,
Your Directors are pleased to present the Twenty Fourth Annual Report on the businessand operations of the Company together with the Audited Statements of Accounts for theyear ended 31st March, 2011.
FINANCIAL RESULTS:
(Rs. in Lacs)
| Particulars | 2010-2011 | 2009-2010 |
| Net sales including other Income | 10905 | 8036 |
| Profit before Interest, Depreciation and Tax | 2411 | 943 |
| Less: Interest & Financial Charges | 315 | 242 |
| Profit before Depreciation and Taxation | 2096 | 701 |
| Less: Depreciation & Amortisation | 574 | 550 |
| Profit before taxation | 1522 | 151 |
| Less: Provision for taxation | 863 | 55 |
| Net profit after taxation | 659 | 96 |
| Add/(Less) Prior period adjustments | -- | -- |
| Profit for the year | 659 | 96 |
| Balance of Profit & Loss account as per last Balance Sheet | 3540 | 1270 |
| Add: Net surplus for the year ended 31st March, 2010 transferred from Zenith Birla (India) | -- | 426 |
| Limited on account of merger of Tool Division | | |
| Add: Net surplus as per Scheme of Merger of Tool Division of Zenith Birla (India) Limited | -- | 1748 |
| Total profit available for appropriation | 4199 | 3540 |
| Appropriation: | | |
| Transferred to General Reserve | -- | -- |
| Proposed Dividend | -- | -- |
| Tax on Dividend | -- | -- |
| Balance carried to Balance Sheet | 4199 | 3540 |
PERFORMANCE REVIEW
The Sales and Other Income of the Company for the financial year 2010-11 stood at Rs.10905 lacs as against last year’s Rs. 8036 lacs. The Profit before tax is increasedto Rs. 1522 lacs as against Rs. 151 lacs of last year. Profit after tax stood at Rs. 659lacs as against Rs. 96 lacs of last year.
DIVIDEND
Your Directors have not recommended dividend for the year ended 31st March,2011 considering the fund requirement for future business expansion.
SUBSIDIARY COMPANY
Your Company does not have any Subsidiary Company.
PUBLIC DEPOSIT
Your Company has not accepted any fixed deposit from the public. As such, no amount ofprincipal or interest is outstanding as on the Balance Sheet date.
DIRECTORS
Shri Augustine Kurias, Director of the Company, retires by rotation at the ensuingAnnual General Meeting and being eligible, offers himself for re-appointment.
Shri M.S Arora was appointed as an Additional Director on 22nd October, 2008and later was regularized as a Director on 30th September, 2009. He was alsoappointed as Managing Director on 30th September, 2009 without anyremuneration.
The Remuneration Committee and the Board of Directors of the Company in their meetingheld on 11th August, 2011 have recommended paying remuneration as mentioned inthe notice of the Annual General Meeting to Shri M. S. Arora w.e.f. 11thAugust, 2011 subject to the approval of the shareholders of the Company and the CentralGovernment / other statutory authorities.
DIRECTORS RESPONSIBILITY STATEMENT
The Company is in compliance with various accounting and financial reportingrequirements in respect of the financial statement for the period under review. Pursuantto Section 217(2AA) of the Companies Act, 1956, and in respect of the annual accounts forthe period under review, the Directors hereby confirm that:
I) In the preparation of the annual accounts, the applicable accounting standards havebeen followed except for Accounting Standard -2, which has been explained in the para -“Auditors & Auditors’ Report”;
II) Appropriate accounting policies have been selected and applied consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit or loss of the Company for that period;
III) Proper and sufficient care for maintenance of adequate accounting records inaccordance with the provisions of the Companies Act, 1956 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities have beentaken to the best of their knowledge and ability;
IV) The annual accounts have been prepared on a “going concern basis”.
AUDITORS & AUDITORS’ REPORT
M/s. Chaturvedi & Shah, Chartered Accountants, Mumbai the Statutory Auditors of theCompany retire at the ensuing Annual General Meeting. They have confirmed theireligibility and willingness for re-appointment. The Directors recommend theirreappointment by the members at the forthcoming Annual General Meeting.
The Board of Directors explanation to the Auditors remark is as follows:
| Auditors Remark | Directors Explanation |
| Cost of finished goods and goods under process of Tool Division of the Company is determined by using retail method whereby the cost is computed by reducing from the sale value of the inventory, the global gross margin which is not as per Accounting Standard AS-2 on “valuation of Inventories” referred to in sub-section (3C) of Section 211 of the Act. The impact of this on the profit for the year has not been quantified. | The Tool Division of the Company has been valuing finished goods and goods under process, since inception at lower of estimated cost and net realizable value. Estimated cost is arrived at using retail method which is arrived at by adjusting the selling price by estimated gross margin, globally for all types of products. Since valuation of finished goods and goods under process is done on the same basis followed in the past, there is no effect on the profit and loss account for the year. The Tools Division is in the process of setting up a detailed valuation methodology process which will be compliant to AS 2 in the current year. |
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
Company has taken effective steps at every stage to reduce energy consumption andconserve energy in all phases of operation. Your Company has been continuously upgradingfacilities in order to minimize power consumption, maximizing on power factors at itsmanufacturing locations.
Information as per Section 217(1)(e) of the Companies Act, 1956 read with Companies(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed asAnnexure ‘A’.
PARTICULARS OF EMPLOYEES
During the year under review, there was no employee covered under the provisions ofSection 217(2A) of the Companies Act, 1956 read with the Companies (Particulars ofEmployees) Rules, 1975.
MANAGEMENT DISCUSSION & ANALYSIS REPORT & CORPORATE GOVERNANCE REPORT
Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a ManagementDiscussion and Analysis Report, Corporate Governance Report and Auditors’ certificateregarding compliance of conditions of Corporate Governance are made a part of the AnnualReport.
HUMAN RESOURCE & INDUSTRIAL RELATIONS
Industrial relations were harmonious throughout the year. The Board wishes to place onrecord their sincere appreciation to the co-operation extended by all employees inmaintaining cordial relations.
INSURANCE
All properties and insurable interests of the Company including Building and Plant& Machinery have been adequately insured.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank all investors, clients, vendors, banks,regulatory and Government authorities and stock exchange for their continued support. TheDirectors also wish to place on record their appreciation for the contribution made bybusiness partners / associates at all levels.
| For and on behalf of Board of Directors |
| Place: Mumbai | M.S. Arora | P.V.R. Murthy |
| Date: 8th September, 2011 | Managing Director | Director |
ANNEXURE TO DIRECTORS’ REPORT
(Information under Section 217 (1) (e) of the Companies Act, 1956, read with Companies(Disclosure of Particulars in Report of Board of Directors) Rules, 1988 and forming partof the Directors’ Report for the year ended 31st March, 2011).
A. CONSERVATION OF ENERGY:
a) Energy conservation measures taken.
The Company has taken following measures for energy conservation at the factories,namely:
1) Coolant treatment system started at Tool Holder division at Aurangabad where thecoolant is reused resulting in saving of coolant oil cost by approximately 25%.
b) Further R & D work is being carried on for reduction of time cycle of theProcess.
c) Impact of measures of (a) and (b) above for reduction of energy consumption andconsequent impact on the cost of production of goods.
The above measures have resulted in energy saving and consequent decrease in the costof production.
d) Details regarding Total Energy Consumption and Energy Consumption per unit ofproduction is not applicable to any units of the Company.
B. TECHNOLOGY ABSORPTION: Research & Development.
1. Specific Areas in which R& D carried out by the Company:
Development of new types of Hydraulic chucks, Sealed collects, Tap collets, precisioncomponents was undertaken during the year.
2. Benefit derived as a result of the above R&D:
Meet market demand of new generation tooling, which are import substitute items andexport products to overseas countries.
3. Future Plan of action:
Future development of products such as various types of Hydraulic Sleeves, small borecollets of different sizes, Tap adaptors being taken up.
4. Expenditure on R&D:
| a) Capital | |
| b) Recurring | Not Quantified. |
| c) Total | |
| d) Total R&D Expenditure as a Percentage of total turnover | |
5. Technology Absorption, Adaptation and innovation: Process of Technologytransfer continued in the areas mentioned above.
C. FOREIGN EXCHANGE EARNING AND OUTGO:
1. Activities relating to export, initiatives taken to increase exports:
Company exports AT3 Class Tool Holders, collets and precision components to U.S.A.,Europe & Asia Pacific Countries.
2. Total foreign exchange used and earned:
| 2010-2011 | 2009-2010 |
| (Rs. in Lacs) | (Rs. in Lacs) |
| Total Foreign Exchange Used | 2520 | 1649 |
| Total Foreign Exchange Earned | 2224 | 1450 |