graham firth steel products india ltd Directors report

GRAHAM FIRTH STEEL PRODUCTS (INDIA) LIMITED ANNUAL REPORT 2007-2008 DIRECTORS REPORT To, The Members, Your Directors present their 48th Annual Report with the statements of the audited accounts for the year ended 31st March, 2008. (Rs. Lacs) 1. Financial Results 2007-08 2006-07 Revenue 1356.60 278.80 Operating Loss before Interestl Depreciation 165.50 109.83 Interest 0.82 0 Depreciation 10.31 9.92 Tax adjustment in respect of earlier years - - Net Loss for the year 176.63 119.75 Net Loss brought forward 402.85 283.10 Net Loss carried to Balance Sheet 579.48 402.85 2. Dividend Directors are unable to declare dividend in view of the losses. 3. Performance ISO Certifiaction The Bureau Veritas has issued the Company the ISO 9001-2000 certification. This certification would enable the Company to supply value added products to customers in such industries as auto components, automobiles, white goods and Defence. Implementation of BIFR order The company has complied with the BIFR Order as contained in the approved Rehabilitation Scheme and is implementing the same. Markets The first year after the BIFR Order has been rather eventful. For the first six months the raw material prices were stable and we had managed to reach the production of 500 MT per month. Thereafter the prices for our raw material viz. Hot Rolled Coils (HRC) kept on increasing every month. This has created tremendous pressure on the company in terms of working capital and also achieving higher and higher sales prices. Despite these and other problems the contribution has increased though the production has come down. The production has come down due to the non availability of raw material. Fund Raising The company is exploring various avenues of fund raising. As the price of HRC is stabilizing at higher level, the Company is exploring strategic tie ups for the supply of raw materials and is further looking to restructure its business. Outlook Though the outlook looks uncertain due to the increase in prices of steel, power and transportation, we are confident that due to the long standing relations with customers and quality of products of the company we would be in a position to ride through the uncertain times. 4. Directors Responsibility Statement In terms of Section 217(2AA) of the Companies Act, 1956, the Directors state that; (a) in the preparation of annual accounts, the applicable accounting standards have been followed and that there has been no material departure: (b) the Directors 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 the affairs of the Company as at 31st March, 2008 and the losses for the year ended on that date; (c) Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 as amended from time to time; (d) Directors have taken proper and sufficient care, in consonance with the financial situation of the Company, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and (e) Directors have prepared the accounts on a going concern basis. 6. Directors Mr. Dhanesh J. Mehta and Mr. Rajnesh I. Jain retire by rotation at the forth coming Annual General Meeting and being eligible, offer themselves for reappointment. With a view to further strengthen the management Mr. M. G. Mohan Kumar was invited to join the Board as an Additional Director on 30th January 2008. Mr. M. G. Mohan Kumar is a Financial Advisor and his experience would be of immense help in progress of the Company. The Company has received the necessary notice from a shareholder proposing his reappointment. 7. Auditors Report The Companys position on the Auditors qualifications has been stated in the notes attached to the accounts. Accounts have been prepared on a going concern basis in view of the scheme of rehabilitation submitted before BIFR. 8. Listing on the Stock Exchange, Mumbai The company is now in the process of regularizing all listing compliances so as to enable Bombay Stock Exchange Limited permit trading in your Companys shares. 9. Secretarial Compliance Certificate The Company has obtained the Compliance Certificate from the Practicing Company Secretary pursuant to Section 383A of the Companies Act, 1956. A copy of the said certificate is annexed. 10. Particulars of Employees There was no employee in respect of whom information is required to be disclosed as per the provisions of Section 217(2A) of the Companies Act 1956, as amended. 11. Auditors M/s. Borkar & Mazumdar, Chartered Accountants, retires at the forth coming Annual General Meeting. Members are requested to appoint the Auditors and fix their remuneration. 12. Appreciation The Board also wishes to place their deep appreciation for the patience shown and efforts put in by employees despite the poor financial situation of the Company. 22nd August, 2008 By Order of the Board Registered Office & Works: Shilpin J. Patel A-6 MIDC Industrial Area, Chikalthana Chairman of the meeting Aurangabad 431 210 ANNEXURE TO THE DIRECTORS REPORT Information as per Section 217(i) (e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors Report for the year ended 31 a March, 2008. A) CONSERVATION OF ENERGY: FORM - A Form for Disclosure of Particulars with respect to conservation of energy. Units 2007-08 2006-07 A. Power & Fuel Consumption 1. Electricity a) Purchased Kwh 9,20,832 3,49,450 Total amount Rupees 57,56,434 21,06,999 Average rate per unit Rupees 6.25 6.03 b) Own Generation - NA NA 2. Coal - NA NA 3. Furnace Oil - NA NA 4. Others (HSD) Quantity KL 67.597 1.083 Total amount Rupees 23,86,996 42,702 Average Rate Rupees 35.31 39.43 B. Production: Cold Rolled Steel Metric Tons 3650 815 1. Electricity KWH/Ton 252.28 428.77 2. Furnace Oil K.L./Ton - - 3. Coal K.L./Ton - - 4. Others (HSD) K.L./Ton - 0.001 B) TECHNOLOGY ABSORPTION: Research & Development: The Company has established development of precision medium carbon products for its export markets during the earlier years. Technology Absorption: The Company has not imported or bought any technology during the year under review. C) FOREIGN EXCHANGE EARNINGS & OUTGO: Forex Earning - Nil (Previous year Nil) Forex Outgo - Nil (Previous year Nil) 22th August, 2008 By Order of the Board Registered Office & Works: Shilpin J. Patel A-6 MIDC Industrial Area, Chikalthana Chairman of the meeting Aurangabad 431 210 COMPLIANCE CERTIFICATE To, The Members Graham Firth Steel Products (India) Limited I have examined the registers, records, books and papers of Graham Firth Steel Products (India) Limited (the Company) (as required to be maintained under the Companies Act, 1956 (the Act) and the rules made hereunder and also the provisions contained in the Memorandum and Articles of Association of the Company for the financial year ended 315 March, 2008. In my opinion and to the best of my information and according to the examinations carried out by me and explanation furnished to me by the Company, its officers and agents, I certify that in respect of the aforesaid financial year: 1. The Company has kept and maintained all registers as stated in Annexure A to this certificate, as per the provisions and the rules made hereunder and all entries therein have been duly recorded. 2. The Company has duly filed the forms and returns as stated in Annexure B to this certificate with the Registrar of Companies, Maharashtra, within the time prescribed under the Act and Rules made hereunder. The Company was not required to file any form/ return with the Regional Director, Central Government Company Law Board or other authorities. 3. The Company, being Public Limited, comments on invitation to public to subscribe for shares/debentures or acceptance to deposits as applicable to Private Limited Company is not required. 4. The Board of Directors duly met six times on 30.04.2007, 20.06.2007, 31.07.2007, 29.10.2007, 30.11.2007 and 30.01.2008 in respect of which meetings proper notices were given and the proceedings were properly recorded and signed. No circular resolution was passed during the financial year. 5. The Company closed its Register of Members from 27.12007 to 29.12.2007 (both days inclusive) and necessary compliance of Section 154 of the Act has been made except publishing notice in newspapers. 6. The Annual General Meeting for the financial year ended on 315 March, 207 was held on 29th December 2007 after giving due notices to the members of the Company and the resolutions passed there at were duly recorded in Minutes Book maintained for the purpose. 7. No Extra-ordinary General Meeting was held during the financial year. 8. The Company has not advanced any loan to its Directors and/or to persons or firms or companies referred to in the Sections 295 of the Act. 9. The Company has complied with the provisions of Section 297 of the Act in respect of contracts specified in that section, except obtaining Central Governments approval wherever required. 10. The Company has made necessary entries in the register maintained under Section 301 of the Act. 11. As there was no appointment/instance falling within the purview of Section 314 of the Act, the Company has not obtained approval from the Board of Directors, members or Central Government. 12. The Company has not issued any duplicate share certificate during the financial year. 13. (i) The Company has delivered all the certificates on allotment of shares and lodgment thereof for transfer/transmission or any other purpose in accordance with the provisions of the Act. (ii) As the Company did not declare any dividend during the financial year, the need to deposit any amount of dividend in a separate bank account did not arise. (iii) The Company was not required to post warrants to any member of the Company as no dividend was declared during the financial year. (iv) There was no such amount in unpaid dividend account, application money due for refund, matured deposits, matured debentures and interest accrued thereon which has remained unclaimed or unpaid for a period of seven years. (v) The Company has complied with the requirements of Section 217 of the Act. 14. The $oard of Directors of the Company is duly constituted and the appointment of Directors and Additional Directors has been duly made. There was no appointment of Alternate Director and Director to fill casual vacancies, during the financial year. 15. The appointment of Managing Director has been made in compliance with the provisions of Section 269 read with Schedule XIII to the Act. The appointment being within Schedule XIII, no approval of Central Government is required. The ompany has noted appointed Whole-time Director or Manager. 16. The Company has not appointed any sole selling agent during the financial year. 17. The Company was not required to obtain any approval of the Central Government, Company Law Board, Regional Director, Registrar or such other authorities as prescribed in the various provisions of the Act during the financial year. 18. The Directors have disclosed their interest in other firms/Companies to the Board of Directors. 19. The Company has issued 10,00,000 equity shares to Mr. Shilpin J. Patel on 30-01-2008, pursuant to the BIFR Order dated 29-05-2007 during the financial year. 20. The Company has not bought back any shares during the financial year ending 31st March 2008. 21. The Company has not redeemed any preference shares/deentures during the financial year. 22. The Company was not required to keep in abe ance the rights or dividend, rights shares and bonus shares pending registration of transfer of shares. 23. The Company has not invited/accepted any deposit including any unsecured loans falling within the purview of Section 58A of the Act during the financial year. 24. The amount borrowed by the Company from Directors, members, public, financial institutions, banks and other during the financial year ended 31st March 2008 are within the borrowing limits of the Company and the necessary resolution as per Section 293(1)(d) of the Act have been passed in duly convened Annual/Extraordinary General Meeting. 25. The Company has not given any loan, guarantee or provided security to nor made any other investment in other body corporate during the year under scrutiny. Hence, no comment u/s 372A as made. 26. The Company has not altered the provision of the Memorandum with respect to the situation of the Companys Registered Office from one state to another during the year under scrutiny. 27. The Company has not altered the provisions of the Memorandum with respect to the objects of the Company during the year under scrutiny. 28. The Company has not altered the provisions of the Memorandum with respect to the name of the Company during the year under scrutiny. 29. The Company has not altered the provisions of the Memorandum with respect to Share Capital of the Company during the year under scrutiny. 30. The Company has not altered its Articles of Association uring the year under scrutiny. 31. There was no prosecution initiated against or show cause notice received by the Company or any other punishment imposed on the Company during the financial year, for offences under the Act. 32. The Company has not received any money as security from its employees during the year under certification. 33. The Company has deposited both employees, and employers contribution to Provident Fund with prescribed authorities pursuant to Section 418 of the Act. Sd/- (UPENDRA C SHUKLA) Company Secretary FCS:2727/CP N0.1654 Place: Mumbai Date : 22nd August, 2008 Registers as maintained by the Company: 1) Minutes Book of the Board Meetings u/s 193 of the Act. 2) Minutes Book of the General Meeting u/s 193 of the Act. 3) Minutes Book of Share Transfer Committee Meetings. 4) Register of Members of the Company u/s 150 of the Act. 5) Share Transfer Register 6) Register of Directors u/s 303(2) of the Act. 7) Register of Directors Shareholding u/s 307 of the Act. ANIYEXURE-B Forms and returns as filed by the Company with the Registrar if Companies, Regional Director, Central Government, other authorities during the financial year ended on 31st March, 2008: 1) Form No.32 - Appointment of Mr. Teyjas Schae, as Additional Director on 05.06.2007. 2) Form DIN 3 - In respect of Mr. Shilpin J. Patel and Mr.Teyjas Schae on 04-09-2007. 3) Form No.23- Resolutions passed in Board meeting held on 31-07-200? in respect of appointment and remuneration payable to Mr. Shilpin J. Patel as Managing Director filed on 15.11.2007. 4) Form No.25C- Appointment of Mr. Shilpin J. Patel as Managing Director w.e.f.01-08-2007 filed on 15-11-2007. 5) Form No. 23AC & 23 ACA- Annual Accounts for the year ended 31.03.2007 u/s 220 filed on 29.01.2008. 6) Form No.20B - Annual Return as on 29.12.2007 filed u/s 159 on 15.02.2008 7) Form No.66 - Compliance Report for the year ended 31.03.2007 filed u/s 383A on 29.01.2008. 8) Form No.23-Resolutions passed in Annual General Meeting held on 29-12- 2007 in respect of appointment and remuneration payable to Mr. Shilpin J. Patel as Managing Director filed on 23.02.2008. 9) Form No.32 - Appointment of Mr. M.G. Mohan Kumar as an Additional Director on 30.01.2008 filed on 29-02-2008. 10) Form No. 2 - Allotment of 10,00,000 equity shares to Promoter on 30-01- 2008 in pursuant to BIFR Order dated 29-OS-2007 filed on 23-02-2008. Sd/- (UPENDRA C SHUKLA) Place: Mumbai Company Secretary Dated: 22nd August, 2008 FCS: 2727/CP NO.1654