alcaste india ltd Management discussions
ALCASTE INDIA LIMITED
ANNUAL REPORT 2005-2006
MANAGEMENT DISCUSSION AND ANALYSIS
BUSINESS OPERATIONS:
During the 12 months period under review, your company achived a turnover
of Rs.161.19 lacs and incurred a loss of before depreciation to the extent
of Rs.370.43 lacs. The company as you are aware had two divisions
namely,auto component division and battery division. However, on account of
various problems on warranty, the company has closed its battery division.
In auto components division, the company was not faring well mainly due to
the parent company suffering on account of decline of orders from
M/S.Kinetic on account of stiff market competition faced by them from their
competitors. The company has also suffered on account of parent company
loosing the business of TVS Group due to TVS Company shifting their
business to their own company. Due to these factors, the parent company
could not execute orders to the expected level, resulting in reduced off
take from your company. This in turn has affected the profitability of the
company adversely and the company has declared a loss during the period
under operation.
FUTURE PLANS:
The parent company has procured orders from Greaves Cotton Limited for
manufacture of various engines. In fact, most of the components required
for manufacture of these engines are being produced in your company.
Hence,during the current year of operation the turnover of the company and
profitability of the company is expected to go up substantially. The
automobile market is slowly showing signs of improvement. In fact, the
parent company has exported its starter motors and has improved its
supplies locally, by bagging fresh orders from M/s.Royal Enfield of starter
motors for their Bullet Motor Cycle and by supplying various other auto
mobile components besides engines to Greaves Cotton Limited. The parent
company during the current year has also started supplies on full scale on
a regular basis to TVS Group as well as Kinetic Group during the current
year. Hence the future is bright for this company.
PUBLIC DEPOSITS:
Your company has not accepted any deposits from Public during the period
under review and there are no outstanding public deposits as on 31st March
2006.
FINANCE:
Your company is at present enjoying cash credit and over draft facilities
from State Bank of Travancore and Bank of India on a consortium basis.
Besides the above, Bank of India has sanctioned a term loan of Rs.5.00
Crores to the Company. The company has submitted a restructuring proposal
to both the banks, which is under consideration. All the above. facilities
are guaranteed by the holding company namely M/s.Wellwin Industry Limited,
and are further secured by personal guarantees by Mr. R. Rajagopalan,
Director of the Company and Mr. C.V. Gopalakrishnan, former Director of the
Company.
HEALTH, SAFETY AND ENVIRONMENTAL PROTECTION:
Your company has substantially complied with the all applicable
Environmental Laws and Labour Laws. It has expanded substantial resources,
both financial and managerial, in complying with the relevant laws and has
taken all reasonable measures to protect the environment, safety and health
of the workers.
PERSONNEL:
Your company has maintained cordial relationship with the employees at all
levels. Information as per Section 217(2A) of the Companies Act, 1956 read
with companies (Particular of Employees) Rules, 1975 forms part of this
report. However, as per the provisions of Section 219(1)(b)(iv) of the
companies Act, 1956 the report and accounts are being sent to all
shareholders of the Company excluding the Statement of Particular of
Employees under Section 217(2A) of the Act. Any shareholder interested in
obtaining a copy of the said statement may write to the Registered Office
of the Company for obtaining the same.