krishna engineering works ltd Directors report

DIRECTORS

Dear Members,

We are delighted to present the 28th Annual Report on the affairs of the company for the year ended 31st March, 2011.

FINANCIAL RESULTS

The financial results for the year are as under:

Sr.No.	Particulars	31.03.2011	31.03.201090
		(Rs. in Lac)	(Rs. in Lac)
1.	Sales	6006.13	2334.07
2.	Other Income	663.57	190.78
3.	Total Expenses Before Interest, Depreciation & Taxes	6548.89	3152.77
4.	Profit/(Loss) Before Interest & Depreciation	120.81	(627.91)
5.	Depreciation	251.49	315.30
6.	Interest	19.76	1.80
7.	Net Profit/(Loss) Before Tax	(150.44)	(945.01)
8.	Provision For Tax	NIL	NIL
9.	Net Profit After Tax	(150.44)	(945.01)
	Add
10.	Brought Forward
	Previous Year	(10614.35)	(9669.33)
11.	Add. Fringe Benefit Tax	00	00
12.	Balance Carried Forward	(10764.79)	(10614.35)

During the year under review the sales of the company has increased nearly 157% of the previous years. With this, the company earned profit of Rs. 120.81 lacs before interest and depreciation against the previous years figures loss of Rs. (627.91) lacs. Net Profit after tax has been reduced to Rs. 150.44 lacs against the previous year figures of Rs. (945.01) lacs. Your directors are trying hard to overcome these losses and earn profits.

1. DIVIDENDS

Keeping in view of the position of the company and non availability of profits, your directors do not recommend any dividend on equity shares for the year ended 31st March, 2011.

2. FIXED DEPOSITS

The Company did not accept any deposits from the public in terms of the provisions of Section

58A of the Companies Act, 1956 during the year ended March, 2011.

3. DIRECTORS

The Board inducted Sh. Sunil Kumar Sharma to the Board. We seek members support in confirming his appointment as director liable to retire by rotation. Brief resume of Sh. Sunil Kumar Sharma is given in notice of the Annual General Meeting.

Major General T V Manoharan (Retd) will retire by rotation and being eligible, offers himself for reappointment. His resume is given in notice of Annual General Meeting.

Sh. R.K Bhandari was nominee director of Punjab State Industrial Development Corporation on the Board till 12.05.2011. PSIDC vide its letter No. PSIDC SL. 8283 nominated Sh. Y K Goel- Senior General Manager PSIDC as a director on the Board of the company in place of Sh. R K Bhandari. The Board of Directors in its meeting held on 13th May, 2011 took note of the PSIDCs letter and approved the nomination of Sh. Y K Goel as nominee director. The Board of Directors place on record the valued contribution of Sh. R K Bhandari during his association with the company.

Sh. Gurabchan Junejas term as Managing Director of the company is going to expire. Hence members approval is sought for his reappointment as Chairman cum Managing Director of the company.

4. AUDITORS

The auditors, M/s Brij Aggarwal & Associates, Chartered Accountants, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if reappointed. The Company has received a certificate from the Auditors to the effect that their appointment, if made, would be in accordance with Section 224(1-B) of the Companies Act, 1956. The Board recommends their re-appointment.

5. COMMENTS ON AUDITORS REPORT

Point wise reply of Auditors Observation in Auditors Report:

4(iv) The company has adopted the policy to pay gratuity on cash basis. Thus no provision has been made.

4(vii) (a) Non provision of interest has been there, in the Draft Rehabilitation Scheme itself which is pending with operating agency for finalization.

4(vii)(b) Number of items used in respect of trading and material consumed for manufacturing process can not be distinguished precisely. Due to peculiar nature of business, specific record can not be presented separately. Otherwise the company is maintaining all the applicable records.

Point No. 5 of Annexure: The company is maintaining register u/s 301 of the Companies Act, 1956. However there were no entries to be recoded as applicable during the year.

Point No. 9 of Annexure: Statutory due payments have been taken in to account in the Draft Rehabilitation Scheme.

Point No. 11of Annexure: Due payments to Banks, FIs and Debenture Holders have been incorporated in the Draft Rehabilitation Scheme, which has been presented to the Auditors. Auditors Qualification on Research and Development Section.

The Draft Rehabilitation Scheme is under consideration with Operating Agency which would cover the settlement amount , waiver of interest, liquidated damages, penalties and other expenses. Accordingly, confirmation from the lenders is not possible till the Rehabilitation Scheme is sanctioned.

6. PARTICULARS OF EMPLOYEES

The information in respect of particulars of employees u/s 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 may be treated as NIL.

7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars in respect of conservation of energy and technology absorption and foreign exchange earnings and out go as required under section 217(1) (e) of the Companies Act. 1956 are provided as under:

a) Conservation of Energy.

Power & fuel expenses incurred by the company during the year amounted to Rs. 51264633/- as compared to expenses of Rs. 39309382/- incurred during the previous year.

b) Technology absorption, Adaptation & Innovation.

The company is committed to the process involving industry knowledge, training and adoption.

c) Foreign exchange earning & outgo (Rs. in Lac):

There was no Foreign Exchange earnings and outgo during the year under review.

8. CORPORATE GOVERNANCE

As required under Clause 49 of the Listing Agreement with the Stock Exchanges, the report on Management Discussion and Analysis and Corporate Governance forms a part of the Annual Report. The requisite certificate from the Auditors of the company confirming compliance with the conditions of Corporate Governance as per Clause 49 of the Listing Agreement is attached to this Report.

9. Listing

The equity shares of the Company are listed with National Stock Exchange of India Limited (NSE), Bombay Stock Exchange (BSE), The Delhi Stock Exchange Limited(DSE) , Calcutta Stock Exchange Association Limited (CSE), The Ludhiana Stock Exchange Limited (LSE) and The Stock Exchange, Ahmedabad.

10. BIFR Status

The company is a sick industrial company and is registered with BIFR under SICA ( Sick Industrial Companies Act, 1985). The Company has filed the appeal before AAIFR against the BIFR order for change of management and has obtained stay against the said order. Further the company has submitted Draft Rehabilitation Scheme with the Operating Agency. The AAIFR has adjourned the case and next date of hearing is 21-09-2011. The company is in the process of settling the dues with Bank/Financial Institutions individually.

11. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that :

i) In preparation of the Annual Accounts, applicable accounting standards have been followed and there are no material departures;

ii) Such accounting policies have been selected and applied consistently subject to such adjustments and estimates have been made for preparation of accounts 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 ended on 31st March 2011 and the profit of the company for the year.

iii) Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the company and to prevent fraud and other irregularities;

iv) Statement of accounts have been prepared on a going concern basis.

12. ACKNOWLEDGMENT

The Directors wish to convey their appreciation to business associates for their support and contribution during the year. The Directors would also like to thank the employees, shareholders, customers, suppliers and bankers for the continued support given by them to the Company and their confidence reposed in the management.

	For and on behalf of the Board of directors
Place : Jalandhar	Gurbachan Juneja
Dated : 12th August, 2011	(Managing Director)