Computerskill Ltd Directors Report

COMPUTERSKILL LIMITED ANNUAL REPORT 2007-2008 DIRECTORS REPORT Dear Shareholders, Your Directors wish to place before you the 20th Annual Report and Audited Accounts for the Financial Year ended on 31st March, 2008. FINANCIAL RESULTS The summarized financial results of the company have been given below: (Rs. In Lacs) PARTICULARS Current Year Previous Year Amount Rs. Amount Rs. Sales and Other Income 793.90 4472.13 Profit/(Loss) before Depreciation and Taxes (818.64) (717.96) Less: Depreciation provided during the year 473.39 1091.89 Profit/(Loss) before Tax (1292.03) (1809.85) Less: Provision for Taxation (FBT) 2.40 2.97 Provision for Deferred Tax (0.99) (85.65) Profit/(Loss) after Tax (1293.44) (1727.17) Less: Prior Period Adjustments 24.87 29.96 Net Profit/(Loss) for the Year (1318.31) (1757.13) Add: Profit/(Loss) brought forward (4153.84) (2396.71) Balance Carried to Balance Sheet (5472.15) (4153.84) COMPANYS PERFORMANCE During the Year under review, the Optical Media Division has stopped its production because of unprecedented liquidity crises of the Company as well as continuous reduction in the Selling price of Optical Media Products. Thus, the said division was unable to recover its full variable cost and accordingly, it has been decided to stop the production of Optical Media Division to arrest further losses. However, since last couple of months, the market position of the optical media products is slightly improved upon but, because of liquidity problems, the company could not commence the production of Optical Media Division. More go, the computer consumer division has also shown remarkable decline in its top line becouse of the liquidity position of the company. The conpanys reference with BIER/AAIFR is still pending. In the Financial Year 2007-08, the Company has achieved total net sales of Rs. 782.38 Lacs as against Rs. 4415.76 Lacs for the year 2006-07 In terms of Division-wise Safes,-the break-up is as under: (Rs. in lacs) % of Change Net Sales over 2006-07 2007-08 2006-07 Optical Media Division (OMD) 20.79 1897.07 (99%) Computer Consumables 761.59 2518.69 (70%) Division (CCD) Total 782.38 4415.76 FUTURE OUTLOOK Considering the government intervention for DVD-R and CD-R, anti dumping duty is imposed on Optical Media products and accordingly there is a positive impact on the demand of Optical Media products in th,: country This has also increased the net margin for Optical Media products but, due to the unprecedented liquidity crises faced by the company, your Directors could not commence the operations of the said division for the year under review. However, there are good chances that the production shall be viable in the near future and the company will be able to generate reasonable cash flow. On the other hand, the companys media and stationery division has good future outlook, becouse the company shall be able to provide cheque books to various banks as it is already registered with Reserve Bank of India as authorised printer for printing of the cheque books. Again, the financial position of the Company did not allow it to take the full advantage of its Computer Stationary Products. DIVIDEND In view of the loss incurred by the Company during the year 2007-08, your directors do not recommend any dividend on the equity share capital or preference shares of the company for the financial yea ending on 31st March, 2008. AUDITORS QUALIFICATION Auditors have qualified the report by stating that: a) No confirmation of balance: Due to the sickness of the company and inability to make the payment to the suppliers, banks and institutions, the company is unable to receive positive response and therefore, partial balance cannot be reconciled. b) No provision of Leave Encashment Your Auditors have also qualified the report by stating that the company has not provided for leave encashment as required by Accounting Standard- 15. It is to be stated that your companys following cash system for leave encashment and therefore, no provision has been made in the books of accounts. c) Classification of NPA by Bank & IDBI As your companys liquidity position has been worsened, it was difficult to make the payment to the banks and idbi and therefore, there are delays and defaults resulted in non performing assets. All other qualifications of the auditors are self explanatory. LISTING AND LISTING FEES Company has got its Equity Shares listed on Ahmedabad and Mumbai Stock Exchanges. Company has paid the listing fees. DIRECTORS Shri Ravindra B Shah and Shri Gautam D Broker, Directors of the Company retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to Directors responsibility, it is hereby confirmed i) That in the preparation of the accounts for the financial year ended 3131 March, 2008, the applicable Accounting Standards have been followed along with proper explanation relating to material departure; ii) That the Directors have selected such Accounting Policies and applied them consistently and made judgements and estimates that were 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 year and of the profit or loss of the Company for the year under review; iii) That the Directors have taken proper and sufficient care for the maintenance of adequate Accounting Record provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) That the Directors have prepared the accounts for the financial year ended 31st March, 2008 on going concern basis. CORPORATE GOVERNANCE Your Company has been duly complying with the requirements of clause 49 of the Listing Agreement dealing with Corporate Governance and details are set out in the Annexure to this Report. DEMAT OF SHARES OF THE COMPANY Company has already dematerialised its Equity Shares and as on date 65.63% of share are in demat form. Investors/shareholders are requested to make use of the facility provided by the Company for dematerialisation of shares for which arrangements have been made with M/s. Intime Spectrum Registry Pvt. Ltd. of C-13, Pannalal Silk Mill Compound, LBS Marg, Bhandup (West), Mumbai-400078, who are the connectivity agent. AUDITORS The Auditors of the Company, M/s. Parikh & Majmudar, Chartered Accountants retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a certificate that their appointment, if made shall be within the limits laid down under Section 224(1 B) of the Companies Act, 1956.Your Directors recommend the re- appointment of M/s. Parikh & Majmudar as Auditors of the Company. INFORMATION REGARDING CONSERVATION OF ENERGY ETC. AND EMPLOYEES Information required under section 217(1)(e) of the Companies Act. 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and information as per Section 217 (2A) of the Companies Act. 1956 read with the Companies (Particulars of Employees), Rules, 1975, as amended from time to time, form part of this report. However, as per the provision of Section 219(1) (b) (iv) the Report and Accounts are being sent to all the shareholders of the Company excluding the information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo and the statement of particulars of employees. Any shareholder interested in obtaining such particulars may inspect the same at the Register Office of the Company. APPRECIATION The Board of Directors wish to place on record their deep appreciation and gratitude for the services rendered by the Workers, Staff and Executives of the Company. The Board of Directors also convey their gratitude to the Investing Shareholders, Customers, Suppliers, Banks, Financial Institutions and various Private and Government Agencies for their continued co- operation and confidence reposed in the company. For and on behalf of the Board Dinker M. Broker Chairman Place: Ahmedabad Date : 28th June, 2008