Sales during the financial year for eighteen months ended 30th September, 2010 hasincreased to Rs.3205.47 million from Rs. 1435.25 million in the previous year. The Companyhas incurred a net loss of Rs. 5125.95 million as against the net loss of Rs. 3166.76million in the previous year. Stiff market competition from multinationals, nonavailability of adequate working capital, high cost borrowing from Banks and FinancialInstitutions and loss on account of sale of investments held by the Company in itssubsidiary HFCL Infotel Ltd. are the main factors which have resulted into the losses ofthe Company. During the year under Report, the Board of Directors of the Company hasextended its financial year by six months from 31st March, 2010 to 30th September, 2010.In this connection Company has obtained necessary approval from the Registrar ofCompanies, Punjab, Himachal Pradesh & Chandigarh as required under Section 210(4) ofthe Companies Act, 1956.
Capital Restructuring and Amalgamation
During the year under report, the Honble High Court of Himachal Pradesh at Shimlahas sanctioned the Composite Scheme of Arrangement and Amalgamation between SunvisionEngineering Company Private Limited (SECPL), its Shareholders & Optionally ConvertibleDebenture Holder ("OCD Holder") and Himachal Futuristic Communications Limited(HFCL) and its Shareholders vide its Order passed on 5th January, 2011. Pursuant toaforesaid Order, SECPL stands amalgamated into HFCL w.e.f.
1st January, 2010 i.e. "Appointed Date". Consequent upon the Amalgamation,SECPL stands dissolved without process of winding up w.e.f. 14th January, 2011("effective date") i.e. the date on which Registrar of Companies (RoC), Punjab,Himachal Pradesh & Chandigarh has registered the aforesaid Court Order.
Consequent upon Sanctioning of Composite Scheme of Arrangement and Amalgamation by theHonble High Court of Himachal Pradesh at Shimla vide its Order passed on 5thJanuary, 2011, the Companys issued, subscribed and paid-up equity share capitalstands reduced from Rs. 462,79,36,970/- divided into 46,27,93,697 equity shares of Rs.10/- each to Rs. 46,27,93,697/- divided into 46,27,93,697 equity shares of Re.1/- each byreduction in face value and paid-up value from Rs. 10/- per share to Re.1/- per share.Accordingly Central Depository Services (I) Limited (CDSL) and National SecuritiesDepository Limited (NSDL) have credited same number of shares of Re.1/- each fully paid-upon 25th February, 2011 and 26th February, 2011, respectively held by the beneficiaries inCDSL and NSDL as on 9th February, 2011 i.e. "Record Date" fixed for reduction ofequity share capital against the shares of Rs.10/- each fully paid up. The shareholderswho were holding equity shares of Rs.10/- fully paid up in physical form have been sentstickers on 21st February, 2011 to be affixed on Share Certificate to indicate that theface value and paid up value of equity shares have been reduced from Rs.10/- per share toRe.1/- per share. Consequent upon Amalgamation of SECPL into HFCL, the Board of Directorsof the Company at its meeting held on 10th February, 2011 has issued and allotted47,00,00,000 and 5,96,01,640 equity shares ofRe.1/-eachcreditedasfullypaid-uptotheShareholders and Optionally Convertible DebentureHolders respectively of erstwhile SECPL. Accordingly the issued, subscribed and paid-upequity share capital of the Company has increased to Rs. 99,23,95,337/-
OVERVIEW OF TELECOM GROWTH IN INDIA
The Indian telecommunication industry is one of the fastest growing in the world, withthe focus shifting from voice-centric to one that is data-oriented. It has become possibleand the preferred option to provide a complete communications services packageto the end-customer, instead of having multiple services from possibly separate serviceproviders. As per TRAI report, the number of telephone subscribers (fixed and mobile) inthe country reached 621 million in March 2010 implying a tele-density of 52.7%. Wirelesssubscribers have increased to 584 million by the end of March 2010 with wirelesstele-density at 49.6%. This achievement has exceeded the target of 500 million subscribersin 2010.
The Broadband Policy 2004 envisaged 40 million internet subscribers and 20 millionbroadband subscribers by year ending 2010. The growth of broadband subscriber base inIndia has hitherto been below expectations. The broadband subscribers were 8.75 million ason March 2010 with broadband penetration rate is just 0.74% when compared withtele-density of 52.7%. The internet usage in India is also low by world standards. In2010, the estimated number of internet users was about 81 million which is about 6.9% ofestimated population of 1.173 billion.
Wireless broadband market in India, is available on three types of networks namely,Wi-MAX, EVDO and 3G HSPDA. Currently BSNL has Wi-Max in select locations and the rollouthas been slow in the franchise model. Broadband on EVDO is being provided by Tata, BSNL,and RCom and on 3G-HSPDA by BSNL and MTNL and some private telecom operators. The growthof wireless broadband has been slow mainly because of the absence of compellingapplications for the end users.
As per TRAI Consultation Paper No. 09/2010, the desirable targets for broadband usershas been kept at 100 million connections by 2014 which are based on 20% and 40% householdshaving broadband connections by 2012 and 2014 respectively.
The Companys core business being telecom products and services, it is expected togrow at a rapid pace due to the projected high growth rate of the Indian telecommunicationsector. There is an addition of about 10 million mobile subscribers every month by mobileoperators which is perhaps the highest addition per month in the world. With the award of3G and BWA licenses and increased focus by the government for broadband up to villages,there is huge potential of business both in equipment and services as during the next 2-3years there will be rollout of 5-6 pan India wireless broadband networks. With majorbroadband applications being IP based, the networks will see big deployment and thereforethe huge opportunity for the Company, for IP technology based products like CarrierEthernet, IP Radios, GPON, LTE and 3G and the related customer premises equipment.
For such rapid expansion of new networks, large infrastructure requirements for towerconstruction, equipments, power supplies and installations will be generated for whichyour Company is focused. Moreover, the private operators are now outsourcing the operationand maintenance of their network for which your Company is eminently suitable as it hasall the necessary qualifications. Your Company is well placed with its various services inline with the telecom market through its site infra services, RF planning services andtelecom equipment installation and commissioning services. Your Company has already takenleadership position in providing these services with well entrenched contract withoperators and telecom OEMs in various circles of India.
The Company has excellent manufacturing facilities and these have not been wellutilised over past few years as the telecom equipment manufacturing industry as a wholesaw a downturn. With government new policies related to security concerns and promotion oflocal manufacturing, we see huge potential for the Contract Manufacturing activities bythe company. Your Company has signed contract manufacturing agreement with Dragon WaveInc., a Canadian radio manufacturing company.
The two main Govt. Telecom PSUs are BSNL and MTNL, who have large expansion plans. Theshift in demand from voice to data domination and from wireline to wireless, hasrevolutionized the very nature of the network. BSNL has already set in place severalmeasures that would enable it to evolve into a fully integrated multi-operator by massiveprocurements of the required IP based products and systems by tenders in which yourCompany is likely to participate.
The Indian economy is expected to grow at around 8% until 2020 and is poised to becomesecond biggest economy of the world by 2050. With increase of 10 million subscribers everymonth for the next two to three years making Indian telecom network to have 700 millionsubscribers and tele density of over 60% by 2012. The rollout of 3G & BWA networkswill provide large opportunities for supply of equipments and services. As the technologyis changing very fast the Company has decided to partner with some large internationalcompanies for technology transfer and manufacturing in the Company. The partnership can bein the form of Joint Ventures or technology transfer. The advantage is regular upgradationof technology as per market needs, without our investment in high technology R & D.The Company is in active discussions for Technology co-operation in the field of DWDM,Carrier Ethernet, GPON, IP Radios & 3G/LTE devices which will enable competitiveparticipation in various tenders and provide solutions.
Your Company has a wide range of services offerings to cater to the wireline andwireless services. Some of the services being provided by the Company are RF services,Telecom equipment installation and commissioning services, telecom site infrastructuresupply and services, optical services, AMC and Facility management services, operationsand management services, DWDM & SDH network implementation. With all these, theoutlook for the Company appears to be good. The company will focus on telecom equipmentmanufacturing, telecom infrastructure services, operation and maintenance of networks andother related services.
THREATS, RISKS & CONCERNS
The telecommunication market in India is among the most competitive markets. TheCompany faces intense competition from other companies in the same domain. The equipmentbusiness mostly is tender based with short delivery time. There is risk of delay in supplyof equipment and related penalties because of increasing lead time in purchase of somecritical components. The presence of many small companies, doing installation andcommissioning job, is going to put strain on the margins on turnkey activities of theCompany. There is also some concern related to delay in rollout of new 3G / BWA networkswhere the Company is expecting turnkey business and supply of some equipment.
ADEQUACY OF INTERNAL CONTROL
HFCL has a proper and adequate system of internal controls to ensure that all assetsare safeguarded and protected against loss from unauthorized use or disposition and thosetransactions are authorized, recorded and reported correctly. HFCL has adequate internalaudit system, covering on a continuous basis, the entire gamut of operations and servicesspanning all locations, businesses and functions.
HUMAN RESOURCE DEVELOPMENT (HRD)
HFCL has a team of experienced and competitive professionals. In the ever changingtelecom scenario, we recognize the need for training and retaining the talent pool of theCompany. Hence, the Company has taken various initiatives in that direction. Employeeshave undergone technical trainings to further enhance their skills. Performance reviews ofemployees are conducted on a regular basis to motivate and reward the performers. Thetotal employee strength of HFCL as on 30th September, 2010 was 600. Due to slow down inthe market, Company has reduced the manpower so as to bring down the wage bill andadministrative overheads.
M/s. HTL Ltd. and M/s Moneta Finance (P) Ltd., continue to be the subsidiaries of yourCompany. During the year, the Company has sold 32,67,05,000 equity shares and 65,00,000Cumulative Redeemable Preference Shares (CRPS) held by it in HFCL Infotel Ltd. (HITL) andaccordingly w.e.f. 31st March, 2010 HFCL Infotel Ltd. ceases to be the subsidiary of theCompany. Infotel Tower Infrastructure Pvt. Ltd. (ITIPL) became the subsidiary of the HFCLInfotel Ltd. which itself was a subsidiary of the Company. Since HITL ceases to be thesubsidiary of the Company, ITIPL also ceases to be the subsidiary of the Company w.e.f.31st March, 2010.
As required under Section 212 of the Companies Act, 1956 the audited statements ofaccounts, along with the reports of the Directors and the Auditors thereon ofthe above subsidiaries for the year ended 31st March, 2010 are not annexed as the Companyhas obtained the approval under Section 212 (8) of the Companies Act, 1956 from theMinistry of Corporate Affairs exempting the requirements of attaching the annual accountsof the above mentioned subsidiaries. However the Company has annexed consolidatedfinancial statements to the Annual Report wherein the audited financial statements ofMoneta Finance (P) Ltd. made up to 30th September, 2010 have been considered. The auditedfinancial statements of HTL Ltd. as on 31st March, 2010 together with significanttransactions/events up to 30th September, 2010 have been taken into consideration whilepreparing consolidated accounts. The financial statements of HITL and ITIPL, which ceasedto be subsidiaries of the Company w.e.f. 31st March, 2010, have been included only in theconsolidated statements of Profit and Loss accounts up to the date of cessation ofrelationship.
However, any shareholder desirous of obtaining the Annual Accounts and relatedinformation of the above subsidiary companies may write to the Company Secretary at M/sHimachal Futuristic Communications Ltd., 8, Commercial Complex, Masjid Moth, GreaterKailash II, New Delhi - 110 048 and the same shall be sent by post.
The Annual Accounts of the subsidiary companies are kept open for inspection for theMembers at the Registered Office and Corporate Office of the Company as well as at theRegistered Office of concerned subsidiary companies between 10:00 A.M. to 1:00 P.M. on allworking days except Saturday up to the date of AGM.
Statements in the managements discussions and analysis describing theCompanys projections, estimates, expectations or predictions may be forwardlooking statements within the meaning of applicable securities laws and regulations.Actual results could differ materially from those expressed or implied. Important factorsthat would make a difference to the Companys operations include demand-supplyconditions, raw material prices, changes in government regulations, tax regimes andeconomic developments within the country and abroad and such other factors.
The Company has not accepted any Deposits during the year.
Shri Arvind Kharabanda and Shri Y L Agarwal, Directors retire by rotation at thisAnnual General Meeting and being eligible, offer themselves for reappointment. During theyear under review Shri Y S Choudhary has resigned from the position of Director(Operations) and ceased to be a Director of the Company w.e.f. 30th May, 2009. However heis continuing with the Company as a Chief Executive Officer of the Company w.e.f. 1stJune, 2009.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956 withrespect to Directors Responsibility Statement, it is hereby confirmed:
1. That in the preparation of the accounts for the financial year ended 30th September,2010, the applicable accounting standards have been followed along with properexplanations relating to material departures;
2. That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the loss of the Company for the year under review;
3. That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act,1956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
4. That the Directors have prepared the accounts for the financial year ended 30thSeptember, 2010 on a going concern basis.
M/s. Khandelwal Jain & Company, Chartered Accountants, Auditors of the Companyretire at the conclusion of the ensuing Annual General Meeting and being eligible, offerthemselves for re-appointment.
The information and explanation on qualifications/ observations in the AuditorsReport are given in Annexure - I.
In terms of provisions of Section 217(2A) of the Companies Act, 1956 read with theCompanies (Particulars of Employees) Rules, 1975, the names and other particulars ofemployees are set out in the Annexure to the Directors Report. However having regardto provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Reportexcluding the aforesaid information is being sent to all the members of the Company andother entitled thereto. Any member interested in obtaining such particulars may write toCompany Secretary, at the Corporate Office/ Registered Office of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/ OUTGO
The information required under Section 217 (1)(e) of the Companies Act, 1956, read withthe Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules,1988 with respect to these matters is set out in the Annexure-II and forms part of thisReport.
The Companys scrip have come under compulsory dematerialisation w.e.f. 29thNovember, 1999 for Institutional Investors and w.e.f. 17th January, 2000 for allinvestors. So far 99.78% of the shares have been dematerialised. The new ISIN no. allottedto the equity shares of the Company after the reduction of equity share capital isINE548A01028.
A separate statement on Corporate Governance along with the Auditors Certificateon its compliance is given as a part of the Annual Report.
VOLUNTARY DELISTING OF SECURITIES
As approved by the Shareholders at their Annual General Meeting held on 29th September,2008, Company has filed necessary application for delisting of its equity shares fromDelhi Stock Exchange Ltd. (DSE), The Calcutta Stock Exchange Association Ltd. (CSE),Jaipur Stock Exchange Ltd. (JSE) & Ludhiana Stock Exchange Ltd. (LSE) and preferenceshares from LSE. The Company has already obtained the delisting approval from all theabove Stock Exchanges.
The Directors thank the Central Government, Government of Himachal Pradesh, Governmentof Goa, Industrial Development Bank of India, State Bank of India, Oriental Bank ofCommerce, Unit Trust of India, Punjab National Bank, Bank of Baroda, Union Bank of India,Centurian Bank of Punjab Ltd. (now merged with HDFC Bank Ltd.) and other Banks andInstitutions for all co-operation, facilities and encouragement they have extended to theCompany. Your Directors acknowledge the continued trust and confidence you have reposed inthis Company. The Directors also place on record their deep appreciation for the servicesrendered by the officers, staff and workers of the Company at all levels and for theirdedication and loyalty.
| ||For and on behalf of the Board |
|Place: New Delhi ||M P Shukla |
|Date: 28th February, 2011 ||Chairman |
ANNEXURE - I TO THE DIRECTORS REPORT
INFORMATION AND EXPLANATION ON QUALIFICATIONS/ OBSERVATIONS IN THE AUDITORSREPORT
A. OBSERVATIONS IN THE MAIN AUDITORS REPORT
1. Para 4: a) As stated in Note 13 of Schedule 19, the Company has accounted forthe impact of modified CDR package after complying with most of the terms and conditionsstipulated therein, however compliance of some of them are still in process. The companyis also not regular in payment of its dues including interest thereon to the lenders andmay be liable to consequential withdrawal of any of the reliefs granted earlier.
The Company has complied with most of conditions as stipulated in CDR package. Due tocontinued cash losses and acute liquidity crisis, the Company could not meet its interestand repayment obligations towards its lenders under CDR package. The Company has submittedfresh re-structuring proposal to the lenders which is under their consideration. In viewof this, Company does not expect withdrawal of any relief granted by the lenders underexisting CDR package.
2. Para 4:
b) As stated in Note 15 of Schedule 19, the Company has, in terms of the CDR package,provided for interest on ballooning basis at the rate specified for the period which ishigher then the rate on YTM basis i.e. @ 8.5% per annum, resulting in the higher loss forthe period by Rs. 172.60 millions. Had the interest been provided on YTM basis, thecumulative provision for interest and accumulated losses up to 30th September2010 would have been higher by Rs. 46.35 millions.
The provision of interest has been made according to CDR Package approved by the CDREmpowered Group. The contingency of charging of interest on YTM basis would arise only ifthe Company makes pre-payment of debts.
3. Para 4:
(c) With regard to the sundry debtors outstanding for a long period as stated in Note19 of Schedule 19, we are unable to comment on the extent of realisability andconsequently on the adequacy of provision for doubtful debts made by the Company. Impactthereof on the loss for the period, if any, is unascertainable.
The Company has made adequate provisions for doubtful debts based on its assessment.
4. Para 4:
(d) As stated in Note 23 of Schedule 19, balances of some of the sundry debtors,creditors, lenders and loans and advances are subject to confirmations, reconciliation andadjustments, if any.
The Company obtains the confirmations in ordinary course of business from time to timeand no major variations were found.
5. Para 4:
(e) As stated in Note 9 of Schedule 19, the Company has paid remuneration to managerialpersonnel during the period for which approval of central government is pending.
The Company has received necessary approval from the Central Government for there-appointment and payment of remuneration to Wholetime Directors for the financial year2007-08, 2008-09 and part financial year of 2009-10 for Rs.2,74,63,608/-. However for thisperiod, the Company has paid Rs.4,69,17,326/- as remuneration to Wholetime Directors.Since the approval of Central Government received is for lesser amount than the actualremuneration paid for the aforesaid period, the excess remuneration of Rs.1,94,53,718/-paid continues to be shown as recoverable. The Company is in the process of makingrepresentation to the Central Government for seeking their approval to the balanceremuneration of Rs.1,94,53,718/-. The Company has also filed the necessary applicationswith the Central Government seeking their approval for re-appointment and payment ofremuneration to Wholetime Directors for financial year 2009-10 and onwards which is undertheir consideration.
6. Para 4:
(f) As stated in Note 21 of Schedule 19, the Company is in process of determining theimpairment loss, if any, on its assets as per Accounting Standard - 28 "Impairment ofAssets" issued by The Institute of Chartered Accountants of India and will giveeffect thereto upon such determination. As such we are unable to express any opinion as tothe effect thereof on the value of Assets and loss for the period.
The effect of items mentioned at paragraph 4(a), (c), (d), (e) and (f) above isunascertainable, and hence the consequential cumulative effect thereof on loss for theperiod, assets, liabilities and reserves is unascertainable. If the observation atparagraph 4(b) above had been considered, the loss for the period would have been lower byRs. 172.60 millions and accumulated losses up to 30th September, 2010 and thecurrent liabilities and provisions would have been higher by Rs. 46.35 millions.
As stated in note 20 of the Schedule 19, the management has appointed an outside agencyfor conducting an exercise of identifying the assets that may have been impaired. Sincethe exercise is still under process, the effect of diminution in value of assets due toimpairment if any, shall be given in the accounts upon such determination as requiredunder Accounting Standards (AS-28) issued by the Institute of Chartered Accountants ofIndia. The reply to the later para above, has been given in Para 2 of this annexure.
B. OBSERVATIONS IN ANNEXURE TO THE AUDITORS REPORT
7. Para (vii):
The Company is having internal audit system which needs to be strengthened further tomake it commensurate with the size of the Company and nature of its business.
The management will take necessary measures in future to make the internal control andinternal audit system more extensive and effective commensurate to the operations of theCompany.
8. Para (ix):
(a) According to the information and explanations given to us and records examined byus, the Company has not been regular in depositing undisputed statutory dues with theappropriate authorities in respect of provident fund, employees state insurance,income tax deduced at source, income tax, wealth tax, excise duty, service tax and salestax/works contract tax. According to information and explanations given to us noundisputed arrears of statutory dues were outstanding as at 30th September, 2010 for aperiod of more than six months from the date they became payable.
Due to financial crunch, the statutory dues could not be deposited in time. The abovedues have been deposited since then. In future, the management will make all efforts todeposit the same in time.
9. Para (x):
The accumulated losses of the Company, after giving effect of the Composite Scheme ofArrangement and Amalgamation between Sunvision Engineering Company Private Limited (SECPL)and the Company, are not more than fifty percent of its net worth at the end of thefinancial period. The Company has incurred cash loss during the period. In theimmediately preceding financial year also, the Company had incurred cash loss.
After the Composite Scheme of Arrangement and Amalgamation ("Scheme")becoming effective, Company has opened a "Business Reconstruction Account" andbooks of account has been reconstructed and accordingly debit balance of profit and lossaccount up to 30.09.2010 i.e. Rs.20,024.97 million has been adjusted against the creditsin Business Reconstruction Account and as on the Balance Sheet Date, there is no balancepertaining the accumulated losses is appearing in the Balance Sheet. As at the BalanceSheet date, the Companys networth stood positive. The cash loss for the current yearand previous year has arisen mainly due to stiff market competition and low margins.
10. Para (xi):
According to the information and explanations given to us and records examined by us,the Company has defaulted in repayment of dues to financial institution or banks inrespect of the following:-
|Name of Lender ||Nature of the Dues ||Period of Default/ delay || |
Maximum Overdue during the period
Overdue Amount as on 30.09.10
| || || || |
(Rs. In millions)
(Rs. In millions)
|ARCIL (ICICI) ||Principal ||Sept, 2010 || |
|ARCIL (ICICI) ||Interest ||April, 2005 to Sept, 2010 || |
|OBC (eGTBL) ||Principal ||April, 2007 to Sept, 2010 || |
|OBC (eGTBL) ||Interest ||February, 2004 to Sept, 2010 || |
|IDBI ||Principal ||April, 2007 to Sept, 2010 || |
|IDBI ||Interest ||April, 2007 to Sept, 2010 || |
|Bank of Baroda ||Principal ||April, 2007 to Sept, 2010 || |
|Bank of Baroda ||Interest ||April, 2007 to Sept, 2010 || |
|Union Bank of India ||Principal ||January, 2009 to Sept, 2010 || |
|Union Bank of India ||Interest ||January, 2009 to Sept, 2010 || |
|State Bank of India ||Principal ||October, 2008 to Sept, 2010 || |
|State Bank of India ||Interest ||October, 2008 to Sept, 2010 || |
Note: In view of the One Time Settlement (OTS) with some of the lenders, as explainedin note no 13(f) and (g) of schedule 19, the Company has not defaulted in repayment ofdues to said lenders as on Balance Sheet Date
Due to liquidity crisis, the repayments to the Financial Institutions/Banks could notbe made so far. However the Company has made One Time Settlement (OTS) with some of thelenders viz. The Jammu & Kashmir Bank Ltd., HDFC Bank Ltd.(formerly known as CenturianBank of Punjab Ltd.) and accordingly has not made default in re-payment of dues to saidlenders. The Company has also made One Time Settlement (OTS) with ARCIL.
11. Para (xix):
The Company has not issued any secured debentures during the period. The Company hascreated securities/ charges in respect of 15,704,000 Zero Coupon Premium Bonds (ZCPBs) ofRs. 100 each issued under the CDR package approved on 6th April 2004. However, nosecurities/charges is created in respect of 10,937,000 ZCPBs of Rs. 100 each issued underthe said CDR package, as the status-quo on the existing security is maintained by eachlender for its exposure.
Since the lenders have agreed among themselves to maintain the status quo on theexisting securities, the Company is not required to create further charge/ security.
ANNEXURE-II TO THE DIRECTORS REPORT
INFORMATION REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OFBOARD OF DIRECTORS) RULES, 1988
CONSERVATION OF ENERGY
The Companys operation involves low energy consumption. Nevertheless, energyconservation measures have already been taken wherever possible. Efforts to conserve andoptimise the use of energy through improved operational methods and other means willcontinue.
ABSORPTION OF TECHNOLOGY, RESEARCH AND DEVELOPMENT
As required under Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988, the details pertaining to technology absorption are as under:
RESEARCH AND DEVELOPMENT (R&D) CARRIED OUT DURING THE YEAR UNDER REVIEW
|1. Specific Area in which R&D carried out by the Company ||: - |
|2. Benefits derived as a result of the above R&D ||: - |
|3. Future plan of action ||: - |
|4. Expenditure on R&D || |
|(a) Capital ||: NIL |
|(b) Recurring (excluding depreciation) ||: NIL |
|(c) Total ||: NIL |
|(d) Total R&D expenditure as a percentage of total turnover ||: NIL |
|TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION || |
|1. Efforts, in brief, made towards technology absorption, adaptation and innovation. ||: The Technology of the products have been absorbed substantially in earlier years. |
|2. Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution, etc. ||: As a result of technology absorption, Company has been able to reduce product cost and save foreign exchange flow. |
|3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished: || |
|(a) Technology Imported ||: N.A. |
|(b) Year of Import ||: N.A. |
|(c) Has Technology been fully absorbed ||: Technology has been absorbed almost in all the areas of the Companys operation. |
|d) If not fully absorbed, areas where this has not taken place, reasons therefor and future plans of actions. ||: -. |
FOREIGN EXCHANGE EARNINGS AND OUTGO
During the year under review the Company had made an export of Rs.8.57 million. Nofresh initiatives were undertaken by the Company to increase and develop new export marketfor products and services as there is hardly any scope of export for the products andservices in which the Company is engaged. The details of foreign exchange earnings andoutgo are as under:
| || ||(Rs. in million) |
|Total Foreign Exchange earnings and outgo ||Financial Year ended 30th September, 2010 ||Financial year ended 31st March, 2009 |
|FOB Value of Exports ||8.58 ||54.06 |
|Value of Imports ||405.25 ||162.94 |
|Expenditure in foreign currency ||14.97 ||2.41 |
|For and on behalf of the Board || |
|Place: New Delhi ||M P Shukla |
|Date: 28th February, 2011 ||Chairman |