gilt pack ltd Management discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT Financial Performance: The operations of the Company suffered due to non availability of working capital facility. During the year,Companys turnover decrease to Rs 4035.29 lacs from Rs 5475.05 lacs in the previous year. The profit before interest and depreciation is Rs 54.50 lacs as compared to Rs 14.27 lacs in the previous year. Industry Structure and Development: The Company is engaged in the manufacturing of HDPE Woven Sacks/Tarpaulin. Since your company is a BIFR company and has no working capital facility,no efforts is being made to increase the market share. Segment wise performance: The Company is operating in one segment only;hence segment wise reporting is not applicable. Adequacy of Internal Control Systems: The Company has a proper and adequate internal control system commensurate to its size and nature,to ensure that all assets are safeguarded and protected against loss,unauthorised use or disposition and to ensure that all the transactions are authorized recorded and reported correctly. Opportunity and Threats: The Company does not see much opportunities unless the order of the BIFR dated 8.7.2003 is set aside and a viable rehabilitation package is approved and the financial assistance is provided to the company. There is a serious threat that in view of the Securitisation And Reconstruction of Financial Assets And Enforcement of Security Interests Act,2002,if the Financial Institutions do not agree for rehabilitation of the Company,they could not take action against the company under the above Securitasitaion Act,in which case the Financial Institutions could not take over all the assets of the company. In view of the recent order of the BIFR there is also a threat for change of management,unless the AAIFR or any other court sets aside the order of the BIFR. Development in Human Resource and Industrial Relations: The Industrial Relations remained smooth and good through the year. Inspite of all the financial difficulties there was no industrial unrest and labour continued to support the management in smooth working of the factory. Outlook: The outlook of the company is not good,unless and until a suitable rehabilitation package is approved and financial institutions agree to give financial assistance,provided the order of the BIFR dated 8.7.2003 is set aside. Risk and Concern: There is a serious risk and concern that the financial institutions could take over the assets of the company under Securitisation And Reconstruction of Financial Assets And Enforcement of Security Interest Act,2002 and the company could wound up. Insurance: The Companys Building,Plant & machinerys,Stock,Stores and Spares are adequately insured against various risks including earthquake risk. Corporate Governance: Your Company committed to good corporate governance practices. The report on Corporate Governance stipulated by the Clause 49 of the Listing Agreement is annexed hereto and forms part of this annual report. Compliance Certificate: A certificate required under clause 49 VII of Listing Agreement,for compliance of conditions stipulated in the Listing Agreement,obtained from the auditor of the Company and annexed herewith this Annual report. Particulars of Employees: The Company does not have any employee during the year drawing remuneration attracting the Provisions of Section 217(2A) of the Companies Act read with the Companies(Particulars of Employees) Amendment Rules 2002. Public Deposits: The Company has not invited nor accepted any deposits from the public within the meaning of Section 58A of the Companies Act,1956 read with the Companies(Acceptance of Deposits) Rules,1975. Energy,Conservation,Technology Absorption and Foreign Exchange Earnings and Outgoes: Particulars as prescribed under Section 217(1)(e) of the Companies Act,1956 under Companies (Disclosures of Particulars on the Report of Board of Directors) Rules,1988,relating to Energy Conservation and Technology Absorption are not applicable to the Company. Foreign Exchange Earnings And Outgoes: Foreign exchange earning during the year was eqivalent to Rs 529.17 lacs (Previous year Rs.2106.37 lacs.) The foreign exchange outgo during the year was equivalent to Rs 11.33 lacs(Previous year Rs 433.47 lacs). Auditors Report: Comments of the Auditors in their report and notes forming parts of the Accounts,are self-explanatory and need no comments. Auditors: The retiring auditors M/s Adeshwar C.Jain & Company,Chartered Accountants of the company ,Indore will hold office till the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re- appointment. They have furnished a certificate to the effect that the re- appointment,it made will be in accordance with Sub-Section (1B) of Section 224 of the Companies Act,1956. Personnel: Yours company believes that the employees are its biggest assets and it is committed to the development of this vital resource. The board wishes to place on record its appreciation of the contribution made by all employees in ensuring the high levels of performance and growth that your company has achieved during the year. Acknowledgement: Your Directors place on record their appreciation and sincere thanks to Industrial Development Bank of India,M.P State Industrial Development Corporation Limited for the support and co-operation extended to the company and they also place on record their sincere appreciation for the dedication and team sprit shown by officers,employees and other staff at all levels throughout the year. By the order of the Board Place : Indore (P.S.KALANI) Date : 19th August,2003 Chairman