dewan tyres ltd Directors report

DEWAN TYRES LIMITED ANNUAL REPORT 2010-2011 DIRECTORS REPORT To, The Members, Dewan Tyres Limited Meerut Your Directors present the 27th Annual Report together with the Audited Balance Sheet and Profit & Loss Account for the year ended 31st March, 2011. Financial Results 2010-11 2009-2010 Sales & other income 1,65,000 90,000 Profit (Loss) before interest & depreciation (78,802) (2,47,322) Interest 2,87,94,843 2,91,14,843 Depreciation 78,51,829 79,58,756 Profit (Loss) before Taxes (3,67,25,474) (3,73,20,921) Tax (FBT) Profit (Loss) after Taxes (FBT) (3,67,25,474) (3,73,20,921) OPERATIONS The production activities of the Company during the year under review remained suspended and there have been income of Rs.1,65,000/- in the Company.. The Company incurred losses of Rs.3,67,25,474/-against previous years losses of Rs. 3,73,20,921/-. DIVIDEND In view of huge accumulated losses in respect of the previous years as well as for the year ended under report, your directors regret their inability to recommend the dividend. REHABILITATION SCHEME As you are aware that the company was declared to be a Sick Industrial Company under section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act,1985 by the Board For Industrial And Financial Reconstruction(BIFR) in the hearing held on 28.4.2003. I.D.B.I.was appointed as the Operating Agency by the BIFR to examine the viability of the company and prepare a report on its rehabilitation. Several hearings in the case were held in BIFR and at the last hearing held on 29.8.2011 the BIFR directed the O.A. to appoint a consultant itself or appoint a consultant suggested by the company to explore option for revival of the company and submit report. The next hearing will be held on 22.11.2011. DIRECTORS There are four directors in the company, namely Sh. Vivek Dewan (Managing Director), Sh. J.C. Dewan, Smt. Mamta Dewan and Sh. Gaurav Dewan. Smt. Mamta Dewan was appointed as Director against the casual vacancy caused by the death of Sh. V.S. Dewan. Sh. Gaurav Dewan was appointed as additional director of the Company. Due to non-availability of the Secretarial Records of the Company on account of the sealing of the premises of the company, Annual General Meetings for the years ended 31.3.2004 to 31.3.2011 of the Company could not be held. FIXED DEPOSITS The company has neither invited nor accepted any fixed deposit to which section 58A of the Companies Act, 1956 applies. AUDITORS REPORT In respect of observations made by the Statutory Auditors in their Report, your directors wish to state that the respective notes to the accounts are self explanatory and therefore do not call for any further comments. AUDITORS M/s S.S. Gupta & Company, Chartered Accountants, Meerut the retiring auditors of the company being eligible, offer themselves for re- appointment. AUDIT COMMITTEE The Company has constituted Audit Committee of the Board consisting of three directors namely Smt.Mamta Dewan,Shri Vivek Dewan and Shri Gaurav Dewan. PERSONNEL Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 as amended, is not applicable since none of the employees is drawing remuneration as prescribed in the limit laid down therein. STOCK EXCHANGE LISTINGS The Equity Shares of the Company are listed with Stock Exchanges at Kanpur, Delhi and Mumbai. The annual listing fee is pending since 1999-2000 to these stock exchanges. INDUSTRIAL RELATIONS AND HUMAN RESOURCES Your Company continued to maintain harmonious and cordial relations with its employees. The Directors wish to place on record their appreciation of the services of its employees. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the requirement u/s 217 (2AA) of the Companies Act, 1956 with respect to directors responsibility statement, the Directors of your company confirm: (i) that in the preparation of the annual accounts for the year ended 31st March, 2011, the applicable accounting standards have been followed and no material departures have been made from the same. (ii) that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as 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 loss of the company for the period. (iii) that they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and (iv) that they have prepared the accounts for the year ended 31st March, 2011on a going concern basis. LEGAL CASES Some creditors and lenders of the company have filed legal cases against the Company. The company is taking appropriate legal measures and also negotiating for sorting out the matters. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO Since there has been no production activities in the company during the year under review, the information required under Section 217 (1) (e) of the Companies Act, 1956, read with Companies (Disclosure in the report of Board of Directors) Rules, 1988 is not provided. CORPORATE GOVERNANCE The Management Discussion & Analysis and Report on Corporate Governance are annexed as part of this report. ACKNOWLEDGMENT Your Directors take the opportunity to express their deep gratitude to the Financial Institutions, Bankers, BIFR, and the shareholders for their cooperation and support. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS PLACE: MEERUT DATED: 31st AUGUST, 2011 CHAIRMAN MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY TRENDS AND ASPIRATIONS The performance of the tyre industry is linked to the automobile and transport sectors. The growth of these sectors is based on the growth of economy. The development of infrastructures and agriculture sectors is expected to boost automobile industry to create good demand of tyres. FINANCIAL The details of the financial performance of the Company are appearing in the Balance Sheet, Profit and Loss Account and other financial statements appearing separately. As you are aware that the company was declared to be a Sick Industrial Company under section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act,1985 by the Board For Industrial And Financial Reconstruction(BIFR) in the hearing held on 28.4.2003. I.D.B.I.was appointed as the Operating Agency by the BIFR to examine the viability of the company and prepare a report on its rehabilitation. Several hearings in the case were held in BIFR and the last hearing was held on 29.8.2011 and the next hearing of the case will be held on 22.11.2011. OPPORTUNITY, THREATS AND OUTLOOK - Products of good quality. - Demand of Products. - Availability of Raw Material. - Possible changes in fiscal, monetary and economic policies of the Govt. which can affect profitability. The upward trend in the prices of raw material will affect margins of the tyre industry. FUTURE OUTLOOK The continuous thrust being placed by the Government on the development of infrastructure, agriculture and manufacturing sectors which may give rise to the growth in automobile sector to create demand for tyres. However, rising trend in the cost of raw material is an area of great concern. RISKS AND CONCERNS The performance of the tyres industry has not been satisfactory due to rise in the cost of raw material as the same is largely dependent on price of raw material and demand of the products. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY The Company has proper and adequate systems of internal control in order to ensure that all assets are safeguarded against loss from unauthorized use or disposition and that all transactions are authorized recorded and reported correctly. HUMAN RESOURCES DEVELOPMENT/INDUSTRIAL RELATIONS The Company continued to maintain harmonious and cordial relations with its employees during the year under review. CAUTIONARY STATEMENT Certain statements in the management discussion and analysis report about the industry are based on expectations/predictions etc. which may be forward looking. The actual results may vary from those expressed or implied in this report due to the influence of external and internal factors which, are beyond the control of the Company. Therefore, the company does not assume any responsibility to any changes in the above statements on the basis of subsequent events and, developments etc. investors should bear the above in mind.