ventron polymers ltd Directors report

VENTRON POLYMERS LIMITED ANNUAL REPORT 2001-2002 DIRECTORS REPORT To, The Members VENTRON POLYMERS LIMITED Mumbai. Your directors have pleasure in presenting their 9th Annual Report and Audited Accounts of your company for the year ended 31st March 2002. Working Results of the Company The Company has achieved a net turnover of Rs. 298.10 Lac as against Rs. 319.65 Lac (9 Mths.) during the preceding year. The loss of the company increased from Rs. 288.03 Lac in the previous year to Rs. 347.65 Lac during the year. During the turnover of the current period under review, sales of Telecom Cable were reduced due to a sharp decline in selling prices. This was a result of reduction in selling prices of Telecom .Cables by DoT. Moreover, due to increasing competition and escalating raw material prices, there has been a further reduction in the selling prices and consequently profit margins of these products. The company is already exploring other lines of products using the existing plant and machinery which can increase its turnover and wipe out the losses. As stated in the previous years report, the company had made an appeal to the Appellate Authority against the decision of BIFR which was rejected. The company has had further losses in the following year, and has again applied to the BIFR under laws of SICA The same is under consideration with BIFR. Dena Bank has applied to the Debts Recovery Tribunal for winding up the company. The management has taken more measures to further reduce the overheads of the company and this alongwith additional product sales should in the coming years improve the cash liquidity and profitability of the company. These factors alongwith the support of the companys bankers and financial institution will definitely ensure availability of opportunities to the company to turnaround as well as to emerge as a profitable venture in the very near future. Dividends In view of the loss made by the company during the year 2001 2002 and the accumulated losses brought forward from the earlier years, your directors do not recommend any dividend for the year. Dividend was not declared for the previous year also. Human Resources Information in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of the Employees) Rules, 1975, as amended, regarding employees is not being furnished herewith as none of the employees are drawing remuneration exceeding Rs. 24 Lac per annum or Rs. 2 Lac per month for part of the year. Directors Mr. A. Kishore retires as director at the ensuing Annual General Meeting of the Company pursuant to Section 256 of the Companies Act, 1956 and being eligible, offers himself for reappointment. Environmental Issues The company is operating in accordance with the environmental compliance with regard to the statutory norms. The company has currently law wastages and no effluents are discharged into the air or water. Besides this, the company has developed systems and processes (including recycling of certain chemicals) to minimise the wastages arising from production. Information pursuant to section 217(1)(e)ofthe Companies Act.1956. Details on Conservation of Energy, Research and Development, Technology Absorption, Adaptation and Innovation, and Foreign Exchange Earnings and Outgo are given separately in Annexure. Directors Responsibility Statement . Pursuant to the requirements of section 217 (2AA) of the Companies Act, 1956, with respect to the Directors Responsibility Statement, it is hereby confirmed: - i. That in the preparation of accounts for the financial year ended 31" March 2002, the applicable accounting standards have been followed. ii. That such accounting policies have been selected which have been applied consistently and judgements and estimates made 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 31st March 2002 and of the loss of the company for the year under review. iii. That 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 have been taken. iv. That the annual accounts for the year ended 31st March 2002 have been prepared on a going concern basis. Corporate Governance Report Under the listing Agreement with the Stock Exchanges; the provisions of clause 49 dealing with Corporate Governance are applicable to the Company, effective 31st March 2002. As required by Corporate Governance Report, along with a Certificate of Compliance from the Auditors is attached and forms part of the Annual Report to you as Shareholders, of which this report is also a part. The attached Corporate Governance Report, including Management Discussion and Analysis Report, as identified by the Company Secretary has been approved by the Board. Industrial Relations The industrial relations continued to be cordial throughout the year. Your directors wish to place on record their sincere appreciation for excellent team work with which the workers and officers of the company at all levels contributed for the improved performance. Auditors M/s. Naresh Sharma & Co., Chartered Accountants, Auditors:of the company retire at the conclusion of this Annual General Meeting and being eligible offer themselves for re-appointment. Appreciation Your directors wish to place on record their appreciation for the wholehearted and continued support extended by Karnataka Bank Ltd, Fort Branch, Dena Bank, Industrial Finance Branch and the Industrial Finance Corporation of India, which have always been a source of strength to the Company. For and do behalf of the Board For VENTRON POLYMERS LTD. Dr. N. Kishore (Chairman) Place : Mumbai Date : 30th August 2002 ANNEXURE TO THE DIRECTORS REPORT DATED 30TH AUGUST 2002 FORM B 1. RESEARCH AND DEVELOPMENT Specific areas in which R & D carried out by the Company Improvements in the Quality and Yield of the product. 2. Benefits derived as a result of above R & D Improvements in Process Efficiency. 3. Future Plans of Action Improvements in existing product performance based on assessment of customers requirements. 4. Expenditure on R & D A Capital NIL B Recurring NIL Total NIL C Total R D Expenditure as percentage of total turnover TECHNOLOGY ,ABSORPTION ADAPTATION AND INNOVATION 1. New ideas and techniques were evaluated and implemented for quality and productivity improvement. C) FOREIGN EXCHANGE EARNINGS AND OUTGO a Activities relating to exports, initiatives taken to increase exports, development of new export markets for power and services and export plants. b Total Foreign exchange used and earned . Rs.in Lac 2001-02 2000-01 (9 Mths.) Foreign Exchange Earned Nil Nil Foreign Exchange Used 0.93 1.50 For and On behalf of the Board For VENTRON POLYMERS LTD. Place : Mumbai Dr. N. Kishore Date : 30th August 2002 (Chairman) MANAGEMENT DISCUSSION AND ANALYSIS REPORT The report is in compliance with Para V of Clause 49 of the listing Agreement with the Stock Exchanges, titled Corporate Governance which is required to be part of this Annual Report to the shareholders. As the Shareholders are aware, the management of the Company comprises of the Board of Directors and the Management Team. They are required to analyse the Industry in which the Company operates, the prevalent business climate, the economic situation, both international, and domestic, the position of the competitors, the demand and supply situation; quality perception, requirements of the Customers and discuss how the Company can proactively retain and create customers for its products with constant and ongoing qualitative improvements to meet their rising expectations. These discussions and analysis would also cover Companys marketing strategies, cost optimisation measures and project planning through interaction arid meetings of management teams under the supervisory role and direction of the Board of Directors to which regular reports are placed. The Shareholders will, therefore appreciate that these discussions and analysis and the reports thereon are to be treated as Classified Information and should be accessed within the Organisation only on need to know basis and cannot be apart of this Report, keeping the interest of the company in view vis-a-vis the competition. This is the limitation, which has to lie placed on publishing the content of the Management and Discussion Analysis, which takes place within the organisation. Accordingly with this limitation, the following information is being furnished under the respective heads, as provided in para V of clause 49 of the Listing Agreement. INDUSTRY STRUCTURE AND DEVELOPMENTS Your company is part of jelly & lubricants industry. The Telecom Cable manufactured and sold by it are industrial products. The range includes all types of jellies sack as Filling & Flooding used in Optical as well as Copper Telecom Cables, used in various industries. The demand and use of the jellies (which constitute the main product line) are dependent upon tire needs of the Telecom Cable Industry, which fluctuate ar,cording try the: Tenders, and demand of the Department of Telecommunications (DoT). The tenders :warded to our customers by the DoT plays a significant factor for generation of demand of our Jellies. The major players in the Telecom Cable Jelly Industry are Savita Chemicals Ltd, Khukhri and Frontline Industries. OPPORTUNITIES AND THREATS With too many players in the Indian Market, an imbalance has. been created in the demand and supply situation with supplies outstripping the demand. This has been further aggravated by the recessionary trends in the economy and reducing prices of final Telecom Cables by DoT, resulting in a crash in selling prices of Telecom Cable Jellies. With signs of recovery in the economic environment, the company is positioning itself for further push forward with additions in its product line, increase in production, especially in high value products. The marketing initiatives have been helped by improvements in quality of products and services and introduction of new products. PRODUCTWISE PERFORMANCE The company manufactures different types of Jellies for different types of Telecom Cables that are mainly categorized as Filling and Flooding types. In both the segments, the company has reduced production and sales due to drastic reduction in selling prices and increased credit periods resulting from prices squeeze on finished Telecom Cables by DoT. OUTLOOK There is cautious optimism in the economy, which is showing improvement. With its increased production (especially of new product lines), and resultant of economies of scale, marketing initiative, cost rationalization and improvement in quality, the company is positioning itself to emerge as a viable and profitable venture in the coming years. RISKS AND CONCERNS There are no risks and concerns other than those, which are: common such as raw material prices and availability, availability of credit downturn in economy, civil disturbances arid warlike situations. INTERNAL CONTROL SYSTEM AND ADEQUACY The Company has established an Internal Control System commensurate with the size and operations of the company which includes proper monitoring of all activities. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE The company is exercising optimum financial controls in all its activities in order to minimize all kinds of costs and losses. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES /INDUSTRIAL RELATIONS FRONT The management is having cordial relationship with the employees of the company and continues to do so. CAUTIONARY STATEMENT As stated in the beginning, this Report to the Shareholders is in compliance with the Corporate Governance Standard incorporated in the listing Agreement with the Stock Exchanges and as such cannot be construed as holding out of any forecasts, projections, expectations, invitations, offers etc. within the meaning of applicable securities, laws and regulations. This report basically seeks to furnish information, as laid down within the different headings provided under the sub-head Management Discussion and Analysis to meet the Listing Agreement requirements. Identified as having been approved by the Board of Directors of VENTRON POLYMERS LTD. sd/- S. Dand Company Secretary.