choksi tubes company ltd Directors report

CHOKSI TUBE COMPANY LIMITED ANNUAL REPORT 2001-2002 DIRECTORS REPORT To The Members, 1. Your Directors present their Thirty Ninth Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2002. 2. DIVIDEND (a) The Directors recommend for your approval, payment of dividend on 14% Redeemable Preference Shares of Rs.500 Lacs (inclusive of Rs.150 lacs not redeemed during the year) issued to Industrial Development Bank of India on Private Placement Basis. (b) The Directors have decided not to recommend any dividend on equity shares for the year with a view to conserve the resources for future operations. 3. REVIEW OF PREVIOUS YEARS OPERATIONS (a) Overall project activity in the domestic sector continued to remain relatively low. The energy sector, however continues to remain as a potential user of the Companys product. The companys Motibhoyan plant was evaluated for approval for supply of high pressure long length feed water heater tubes for 250 MW+ power stations in India and the results are expected to be favourable. The Company has also been approached for supply of instrumentation tubes in the domestic sector for high critical industries and we are hopeful that this approval will also come through. On the export front, the markets continue to remain relatively active and the Company was able to develop newer customers in various European markets as well as in the United States. (b) The Companys Wind Mills at Navadra Bhogat Near Porbandar produced 35.62 lac units of power with an overall productivity of 25% compared to the normal standards of other mills of 14-15%. The Company was able to convince the local power authorities to permit allocation of its wind mill power for both the Vatva as well as Motibhoyan plants. This was warranted due to excess power being produced by the wind mill as well as implementation of energy saving measures in the Companys two plants. 4. CURRENT YEARS OPERATIONS AND LONG TERM OUTLOOK Since April `02, the activities in the domestic market for petroleum and power sector have started picking up with the Company booking a large order for over Rs.4 crores for supply of tubes ultimately destined for a petroleum refining project. On the export front, the imposition of anti- dumping duties on the Japanese mills for the US market is expected to enable the company to increase its share of exports to that region. However, the entirely unexpected and unwarranted civil disturbances in Gujarat in the first quarter of the new accounting year created problems in the functioning of the companys Primary plant at Motibhoyan. This has resulted in the first quarter operations being unsatisfactory and it is expected that the overall expected improvement in the economic activity will make amends for the shortfall. The Gujarat Government has announced the new wind mill policy which however is made applicable from 20.6.2002 only and that too for the wind mills installed henceforth. The Company has represented alongwith the Wind Mill Association of India to the Gujarat Energy Regulatory Commission for reinstating the changes in the wheeling power to all existing wind mill users also as per the norms set by the new wind mill policy. 5. DIRECTORS Shri Himanshu H Choksi and Shri Mahipendra Singh, Directors of your Company are retiring by rotation and being eligible, offer themselves for re- appointment. 6. DEPOSITS Deposits of Rs.3.42 Lacs due for repayment on or before 31st March, 2002 were not claimed by 30 depositors as on that date. Of these, deposits amounting to Rs.1.35 Lacs of 5 depositors have since been paid. 7. AUDITORS REPORT With regard to Qualifications contained in Para No. 5.6 of the Auditors Report, your attention is drawn to Note Nos.8 to 10 & 13 of Schedule 17B Notes to the Accounts, which are self explanatory. 8. PERSONNEL Relations with the employees were cordial throughout the year. 9. PARTICULARS OF EMPLOYEES As none, of the employees of the Company, during the year/part of the year, were, in receipt of remuneration in excess of limit specified under provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 2,000 no details have been furnished. 10. AUDITORS M/s. M.A. Parikh & Company, Chartered Accountants, Mumbai are the retiring Auditors. The said Auditors have furnished a certificate that if re- appointed, their appointment shall be within the limits prescribed under Section 224 (1-B) of the Companies Act, 1956. You are requested to re- appoint them and fix their remuneration. Form of disclosure of particulars with respect to conservation of energy. A. CONSERVATION OF ENERGY The Company has installed a brand new bright annealing furnace in the HXTD plant which has unique design features intended to reduce the energy cost for producing heat exchanger tubes. B. TECHNOLOGY ABSORPTION 1. Specific areas in which R & D carried out by the Company. (a) Development of Stainless Steel Instrumentation Tubes in continuous coils. (b) Alternative methods of Bright Annealing Furnace. 2. Benefits derived as a result of the above R & D (a) Improvement in yield. (b) Improvement in productivity. 3. Future plan of action To continue the efforts as in 1. 4. Expenditure on R & D R & D expenses are not substantial and hence not accounted separately. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION 1. Efforts in brief, towards technology absorption, adoption and innovation. : Company has successfully utilized inhouse technology to design a high speed cold pilger mill which has commenced production in its new Plant at Moti Bhoyan. 2. Benefits derived as a result of above efforts e.g. product improvements, cost reduction, product development, import substitution etc. : With the development of this technology, it is possible for the Company to make long length heat exchanger tubes at high speeds which results in improved productivity and better yield. 3. In case of imported technology (imported during last 5 years reckoned from the beginning of the financial year) following information may be furnished. (a) Technology imported - (b) Year of import - (c) Has technology been fully absorbed - (d) If not absorbed, areas where this has not taken place, reason thereof and future, plans of action -