malhotra steel industries ltd Directors report

MALHOTRA STEEL INDUSTRIES LIMITED DIRECTORS REPORT To the Members, Your Directors have pleasure in submitting their report along with the audited accounts for the year ended on March 31st, 1998. DIVIDEND In view of negative results, Directors have not recommended any dividends for the year ended 31st March, 1998. OPERATIONS The year 1997-98 witnessed the worst ever recession period almost all the core sectors have shown negative growth. The steel industry is passing through the difficult times due to rise in cost of input, severe competition amongst the players, recession in construction industry and low demand. Your company had suffered because of these circumstances. Further to this due to excise problem and flood at Ahmedabad Works aggrieved the situation. From 1st August, 1997, the government has changed the basis for charging excise duty on our products. The excise duty was made chargeable on the basis of production capacity of the unit and the modvat credit on purchase of raw material was totally abolished. The formula prescribed under the law for determining the production capacity was illogical and faulty, consequently the incidence of excise duty was too heavy for any re-rolling mill. The representation made to the government of India and in protest of the same all the re-rolling units includes ourselves stopped their production activity from 1st August, 1997. The Central Government has revised the formula twice by amending Hot Re-rolling Mills annual capacity determination rules 1997. The revised method of the excise duty have certain deficiencies for which the matter is pending with the Supreme Court. Due to heavy rain and flood in the month of June, 1997 in the Ahmedabad City, the factory had been closed for 10 days. DIRECTORS Shri. M.M. Singhi retires by rotation and being eligible, offers himself for re-appointment. AUDITORS REMARKS Referring to note No.4 of notes forming parts of accounts with regarding to investments of Rs.1,54,87,500/- in shares of Malhotra Steels (Bombay) Ltd. Your Directors state as under: Malhotra steels (Bombay) Ltd,. a BIFR Company under the same Management covered under SICA,1985 and has closed its manufacturing activities. Against the winding up opinion of BIFR upheld by AAIFR the Company Malhotra Steels (Bombay) Ltd. had filed writ Petition in Bombay High Court which has not been admitted. Consequently Malhotra Steels (Bombay) Ltd., had filed Special Leave Petition in the Supreme Court taking into consideration the revival scheme submitted at the time of review petition to AAIFR. to canvass the proposal contained in the said review petition The Supreme Court has ordered to issue the Notice to various parties informing that the notices should state that it is limited only to this "that the AAIFR should be permitted/authorised to consider the review petition" pending admission of the Special leave petition. On 14/08/1998. The said Special Leave Petition had came for the hearing where no admission of Special leave petition took place, however Supreme Court has given liberty to the Company and allowed the company to proceeds legally as per the Act. The Company Malhotra Steels (Bombay) Ltd. expects to have counselling with the Senior Advocates and soon to file petition for the revival of the Company with the Central and State Government in Minister of Finance Department and in Ministry of Industries Department. The Company Malhotra Steels (Bombay) Ltd. is of confident and expects positive review of the petition by the Ministries, for the revival of Malhotra Steels (Bombay) Ltd. AUDITOR Auditor of the Company M/s. Wadhawan Pandya & Co. Chartered Accountants, retire and are eligible for re-appointment. The Shareholders are requested to re-appoint the auditor and fix their remuneration. FIXED DEPOSITS. The Company has accepted deposit within the meaning of Section 58A of the Companies Act, 1956. ADDITIONAL INFORMATION. Annexure-1 to this report gives the information in respect of conservation of energy, technology absorption and foreign exchange and out go required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (disclosure of particulars in the report of the Board of Director) rules, 1988 and forms a part of the Directors Report. Annexure-2 to this report provides the particulars required under section 217(2A) of the Companies Act, 1956 read with this Companies (particulars of employees) rules, 1975 and forms part of the Directors Report. The other notes to the accounts referred to in the auditors report are self-explanatory and therefore do not call for any further explanation. APPRECIATION. The Directors wish to thank the financial institutions, banks, customers, suppliers and shareholders for their continued support. The Directors also thanks all the employees of the Company in their contribution to the Companys operation during the year under review. for and on behalf of the Board of Directors, Place: Ahmedabad. (G. D. MALHOTRA), Date : 5-10-98 Chairman & Managing Director. ANNEXURE-1 TO THE DIRECTORS REPORT A) CONSERVATION OF ENERGY a) Energy conservation measure taken: During the year under review extra care was taken by the Company to ensure optimum conservation of electricity and fuel at the plant of the Company. b) Additional investment and proposal for reduction of consumption of energy: Additional investment for reduction of consumption of energy is not significant and there is no proposal time being for any other investment for reduction of consumption of energy. c) Impact of the above measures: The impact of the measures taken have been positive. FORM B B) TECHNOLOGY ABSORPTION Disclosure of particulars with respect to Technology absorption, adaptation and innovation: 1. Efforts in brief made towards technology absorption adaptation and innovation:The Company is always undertaking regular in house efforts to improve the production. 2. Benefits derived as a result of the above efforts : Benefits will certainly keep on accruing due to above efforts. 3. Imported Technology : Imported technology not needed during the year. C) FOREIGN EXCHANGE EARNINGS AND OUTGO For the year For the year ended 31.03.98 ended 31.03.97 1) Foreign exchange earnings Nil Nil 2) Foreign exchange outgo Nil Nil for and on behalf of the Board of Directors, (G.D. MALHOTRA), Chairman & Managing Director. Place : Ahmedabad Date : 5.10.98