BOBSHELL ELECTRODES LIMITED
ANNUAL REPORT 2003-2004
Bobshell Electrodes Limited,
Your Directors have pleasure in presenting herewith the 10th Audited Annual
Report together with the Audited Statement of Accounts of the Company for
the year ended on 31st March, 2004.
During the financial year 2003-2004, the Financial operational results of
the Company is as follows :
(Amount in Rs.)
Particulars For the year For the year
ended on ended on
31st March, 2004 31st March, 2003
Sales & Other Income 3,46,72,027 4,39,63,091
Total Expenses 3,57,75,263 4,32,77,183
Profit/(Loss) Before Tax (10,90,742) 6,85,907
Provision for Tax Nil 52,000
Deffered Tax Assets (4,80,002) (8,79,710)
Net Profit/(Loss) for the year (6,02,740) 15,13,617
Previous Year Balance
Brought Forward 31,44,296 16,30,678
Balance Carried to
Balance Sheet 25,41,555 31,44,296
As your Company has incurred a net loss during the year under review hence
your directors regret for their inability to declare any amount as dividend
to be paid.
TRANSFER OF UNPAID/UNCLAIMED DIVIDEND:
Your Company has since incorporation not declared and paid any amount as
Dividend hence there is no amount lying with the company as Unpaid/
Unclaimed Dividend which may be required to be transferred to Investors
Education and Protection Fund as required under the provisions of Section
205C of the Companies Act 1956. There are no outside retail refund amount
or outstanding interest or principal amount of Deposits, Debentures or any
interests accrued thereon with the company. Hence no such amount are
required to be transferred with the Central Government.
SHARE CAPITAL DURING THE YEAR
During the year under review your directors have not issued any Equity or
Preference shares to any persons. There has been no change in the issued,
subscribed and paid up capital of the company during the year under review.
BUY BACK OF SHARES:
Your Directors had not declared or announced or completed any procedure for
Buy Back of its own shares during the year under review as per the
provisions of the Section 77A, 77AA and 77B of the Companies Act 1956.
Further No Buy Back of Shares if any announced in earlier years are still
pending for implementation.
YEAR UNDER REVIEW
During the year under review the sales achieved was marginally lower at Rs.
3,46,72,027 as against Rs.4,39,51,159/- in the previous year. This was
mainly due to heavy industrial recession prevailing in the Cement, Sugar
and Steel Industry. Further capital investments in the infrastructure
sector was also affected due to recent earth quake, flood, and natural
calamities recorded in the state of Gujarat. The overall scenario of
Capital Projects was itself under bearish trend hence the company's sales
were affected. During the year due to making of the provision for
Defferred Tax assets the Loss was reduced to Rs. 6,02,740.
FUTURE OUTLOOK AND PROSPECTUS
The Company's product Welding Electrodes have two major users. One Capital
Goods Industry and the other Maintainance Industry. The Company's sales are
mainly dependent upon the overall growth and development of the Core
Infrastructure industry and the Basic Industry In the country like cement,
sugar, railway etc. Due to Free Trade Policy adopted by the Country in the
almost all the products at the international level, the Country's capital
goods industry is affected and hence the ancillary and supportive industry
also as well are facing heavy recession.
But in the last quarter of the year 2003 the overall position for Indian
industry have changed the entire scenario, the process of privatisation of
public sector industries, tax and other befits given to power sector for
its overall improvement and technologies upgradation, installation of newer
systems for power systems, by products development allowed for sugar
industry for the establishment of ethanol products will increase demand for
products of the company in the next year. The Cement industry is also
showing excellant growth in the last quarter of the year 2003. This entire
benefits will be reflected in the next financial year balance sheet.
Considering the above facts the Management of the Company has now decided
to manufacture international quality goods for the maintenance industry.
All the major industries like Power, Sugar, Cement, and other
infrastructure and civil construction projects being undertaken by the
Government and the private sector will require products of the company in
large quantity. Hence, your management is at present concentrating its
marketing efforts on this areas to push up the sales.
INTERNATIONAL CERTIFICATION FOR QUALITY OF GOODS:
During the year, your company's all products and its processes are now
accredited with certificate ISO 9001-2000 by DNV Certification B.V. the
Netherlands. Hence, now your company's all products are being well accepted
by State Government owned Power Plants, Sugar Co operatives and many
multinational Companies. With the concentrated efforts put in by your
management to push up the sales in the Maintainance Industry and the
international quality goods now being manufactured by the company the
management is hopeful to achieve better results in the years to come.
INFORMATION PURSUANT TO THE LISTING AGREEMENT AND SEBI CIRCULAR NO.
SMDRP/CIR-14/98 DATED APRIL 29TH, 1998.
The Company's shares are at present Listed on Ahmedabad and Mumbai Stock
Exchanges. The Company has duly paid the annual listing fees up to and
including the year 2004-2005 i.e. upto 31.03.2005 on both the Stock
Exchanges. The Shares of the Company are freely tradable and has not been
at any time delisted or the trading thereof has not been suspended on any
of the above Stock Exchanges during the year.
DEMATERIALISATION OF SECURITIES
SEBI has identified the securities of the Company for compulsory trading in
the Dematerialised form w.e.f.26th February 2001 by all investors on all
the stock Exchanges. In compliance with the same and to facilitate the
shareholders, the Company has already made arrangements to entered into the
Triparty Agreement with NSDL and CDSL. The Investors are requested to take
a note of the same and dematerialise their holdings as early as possible.
The ISIN allotted to your company is INE 896B01011.
COMPLIANCE TO CODE OF CORPORATE GOVERNANCE
Your directors have during the year implemented the system of Corporate.
Governance wig the Organisation in due time i.e. before 31/3/2004 as
stipulated in the Listing Agreement Clause 49 partially by formation d
Audit Committee and Investors Services Committee. Further the International
Quality Certification received by your company also ensures online Audit
System and Management efficiency for overall process and control mechanism
for the entire Operations from Purchase to Manufacturing, packing, dispatch
and accounting and collection systems. The management of your company is in
further process to invite and appoint more professional directors on its
Board for expansion and to have expert advice to the company. In the
meantime your directors have already appointed Chartered Accountant and a
Company Secretary as independant professional advisor to the committees on
Corporate governance. A detailed report on Corporate Governance system is
given as ANNEXURE B attached.
The Company's manufacturing process as such does not generate any effluents
or create pollution of Air or water. There is no generation of effluents
except the water pollution by sanitation system which are properly treated
and discharged. The Company maintains high standards and working
environment and hygenic conditions for its workers.
INSURANCE AND PROTECTION OF ASSETS
The Company's all fixed assets and tangible movable assets are properly
insured against all available commercial risks like fire, flood, earthquake
and other extraneous perills from the approved insurance companies. During
the year the company has not made any insurance claims and no such claims
are pending for settlement. Your Directors are pleased to inform that none
of the fixed assets of the company have suffered any heavy loss.
During the year under review your company has neither invited nor accepted
any public deposit or deposits from the public as defined under Section 58A
of the Companies Act 1956.
There has been no changes in the constitution of the Board of Directors
during the year. Shri Rajesh G Sakpal shall retire by rotation at the
ensuing Annual General Meeting. However being eligible for reappointment
and as he has proposed to be appointed as Director, your directors
recommend to pass the said resolution.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provision contained in Section 217(2AA) of the Companies
Act, 1956, the Directors of your Company Confirm :
(A) that in the preparation of the annual accounts, the applicable
accounting standards have been followed area no material departures have
been made from the same:
(B) that they have selected such account tees and applied them consistently
and made tents and estimates that are reasonable and prudent so as to give
a true and fair view of the state of affair of the Corny at the end of the
financial year and of the profit or loss of the Company for that period;
(C) that they have taken proper and sufficient for the maintenance of
adequate accounting records in accordance with the provisions of this Act
for safeguarding assets of the Company for preventing and detecting and
(D) that they have prepared the annual accounting going concern basis.
INTERNAL AUDITORS :
The Company has appointed Ms. Falguni A Shah, Chartered Accountant as
independent Internal Auditors in a professional capacity. They are also
appointed as Advisors to Audit Committee and Investors Services Committee
formed under system for Corporate Governance. They are submitting their
report on quarterly basis which is duly considered by the board at every
meeting and any corrective actions suggested by them are taken immediately.
Doctor & Patel, Chartered Accountants, Ahmedabad the retiring Statutory
Auditors are eligible for reappointment and the Company has received a
letter of confirmation under section 224 (1B) of the Companies Act. A
resolution proposing their reappointment as the regular Auditors of the
company for the period from the conclusion of this Annual General Meeting
upto the conclusion of the next Annual General Meeting is required to be
passed. Your directors recommend to pass the said resolution.
The Observations made by the Auditors have been properly explained and
dealtwith in the relevant notes to the accounts. No specific clarifications
are required to be given as no specific observations in the auditors report
FORMATION OF AUDIT COMMITTEE IN COMPLIANCE WITH THE PROVISIONS OF SECTION
292A OF THE COMPANIES ACT 1956. In Compliance with the provisions of
Section 292A of the Companies Act 1956 your company has formed an Audit
Committee within the Organisation consisting of an independant director, an
Internal Auditor (Chartered Accountant) and Practicing Company Secretary as
advisors to the company. The area of operations and functional
responsibilities assigned to the committee are as per the guidelines
provided in Clause 49 of the Listing Agreement for implementation of code
of corporate governance. The Committee meets atleast once in a quarter and
gives its report of each meeting to the Board for its approval, record and
There are no employees of the company who were in receipt of the
remuneration of Rs.24,00,000/- in the Aggregate if employed for the year
and in receipt of the Monthly remuneration of Rs. 2,00,000/- in the
aggregate if employed for a part of the year under review. Hence the
information required under Section-217 (2A) of the Companies Act,1956 being
not applicable are not given in this report.
The Information required to be disclosed in the report of the Board of
Directors as per the provisions of Section 217 (1)(e) of the Companies Act-
1956 and the Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules 1988 regarding the conservation of energy, technology
absorption, foreign exchange earnings and outgo are given in the ANNEXURE A
as a part of this report.
No material changes have taken place since the closure of the financial
accounts upto the date of this report which may affect subtantially the
financial performance or the statement of the company.
Your Directors take this opportunity to acknowledge the trust reposed in
your company by its Shareholders, Bankers and dents. Your Directors also
keenly appreciate the dedication & Commitment of all our employees, without
which the continuing progress of the company would not have been possible.
On Behalf of the Board of Directors
of Bobshell Electrodes Limited.
Place: Ahmedabad Sd/-
Date : 14.08.2004 (Shailesh. M. Joshi)
Chairman & Managing Director.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING
As required under section 217(1)(e) of the Companies Act,1956 read with
Companies Rules, 1988, information regarding conservation of energy,
technology absorption and foreign exchange earnings and outgo are given as
POWER AND FUEL CONSUMPTION
- Purchased (Units.) 400 KVA 400 KVA
- 120 KVA 120 KVA
Total Amount Rs. 596995.44 706449.66
- Rate per unit Rs. As per Bill As per Bill
- Through Diesal Generators
- Total Amounts Rs. NIL NIL
- Rate per unit Rs. NIL NIL
RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION, ADAPTION & INNOVATION:
The Company is maintaining its own inhouse Testing Laboratory and Research
& Development Centre. All products manufactured by the company are properly
tested in the Company's own Testing Laboratory as to the quality of the
product batchwise. The Company is maintaining strict quality control right
from the selection of raw materials, consumables, manufacturing of the Flux
and other materials. The Company has also manufactured for the first time
in India, Double cotted Welding Rods. This technology is developed by the
company in its own Research & Development Centre. This product is now
marketed commercially in Local Market. This product find good market by
heavy engineering industry.
In fact now the Company's entire manufacturing process right from the
procurement of Raw materials up to the dispatch and after sales services
are now audited online and hence the company has now got the international
quality accredition of ISO 9001-2000 from DNV BV, Netherlands.
EARNINGS AND OUTGO: NIL NIL
On Behalf of the Board of Directors
of Bobshell Electrodes Limited.
Place : Ahmedabad Sd/-
Date : 14.08.2004 (Shailesh. M. Joshi)
Chairman & Managing Director.