haryana sheet glass ltd Directors report

HARYANA SHEET GLASS LIMITED ANNUAL REPORT 2004-2005 DIRECTORS REPORT To The Members, Your Directors present the 30th Annual Report of the Company together with the Audited Annual Accounts for the year ended 31st March, 2005. We apologize for the delay in holding the AGM, which was mainly due to circumstances beyond the control of Company and the Management. FINANCIAL RESULTS (Rs. in Lacs) Current Year Previous Year (2004-2005) (2003-2004) Sales & operating Income 13549.35 10422.94 Gross Profit / (Loss) for the year 10.60 (668.97) Finance Charges 235.20 223.94 Cash profit / (loss) (224.60) (892.91) Depreciation 457.52 529.14 Profit / (Loss) for the year (682.12) (1422.05) Less/Add: Provision for Deferred Tax Liability 46.63 (586.11) Provision / Adjustment for Taxation for earlier years (0.012) (12.35) : Excess / (Short) provision of Depreciation - 0.52 written back : Balance in Profit and Loss A/c brought forward (14887.63) (12867.63) Transfer from General Reserve - - Profit/(Loss) carried Forward (15523.14) (4887.63) The Finance charges and Depreciation to the extent of Rs.692.72 lacs in the current period, have caused losses for the year to the tune of Rs.682.12 lacs. The total accumulated losses have gone up to Rs.15523.14 lacs mainly on account of finance and depreciation charges. OPERATIONS AND PERFORMANCE: The year under review was another year of challenges. The Company faced the challenges and with its hard work and determination the losses for the year ended 31st March, 2005 decreased to 682 lacs from towering 1422 lacs. During the Current Financial year the Neemrana unit has been temporarily shutdown since July, 2005 DIRECTORS: Shri R.S. Rastogi and Shri Narinder Kumar, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Their brief particulars are as follows: i) Shri R.S. Rastogi, aged about 69 years, is B.Com(H), M.A (Economics). He is also serving as Director on the Board of Greenage Impex Pvt. Limited and Greenage Secon Limited. He is a member of Share Transfer Committee. ii) Shri Narinder Kumar aged about 59 years. He is a member of Audit Committee and Investor Grievance Committee. DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed - That in the preparation of the Annual Accounts, the applicable Accounting Standards, except Accounting Standard (AS-15) to the extent as referred in the Auditors Report, have been followed along with proper explanations relating to material departures; - That Directors have selected such accounting policies and applied them consistently and made judgments 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 financial year and of the loss of the Company for the period under review; - That the Directors have taken 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; - That the Directors have prepared the Annual Accounts for the year ended March 31, 2005 on a going concern basis as efforts are being made to improve operational efficiency further. BIFR REFERENCE: Reference to Board for Industrial and Financial Construction (BIFR) u/s 15(1) of the said Act was made in accordance with the provisions of that section, on the basis of Audited Annual Accounts for the year ended March 31, 2003. The reference is pending before the Honble BIFR. The earlier two references of the Company which were pending before the Honble AAIFR have been withdrawn by the Company. ONE TIME SETTLEMENT WITH IFCI: With a view to rehabilitate the Company, proposal was made to IFCI to consider the One Time Settlement (OTS) proposal at Rs.43.332 Crores. IFCI vide its letter dated April 29, 2004 accepted the OTS towards full & final payment which was however, revoked by IFCI vide its letter dated March 31, 2005. The Company has made a fresh proposal to IFCI to consider the OTS proposal which is under active consideration of IFCI. AUDITORS: The Auditors of the Company, M/s P.K. Maheshwari & Co., Chartered Accountants, New Delhi, hold office of Auditors till the conclusion of ensuing Annual General Meeting of the Company and being eligible offer themselves for re-appointment for the next year. The observations of the auditors and the relevant notes on Accounts are self-explanatory and hence, do not require any further comments. PARTICULARS OF EMPLOYEES: The Company has no employee covered under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The information relating to conservation of energy, technology absorption and Foreign Exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988, is annexed and forms part of this report. LISTING OF SHARES: The shares of your Company are listed at National, Mumbai, Indore, Rajkot, Jaipur and Vadodara Stock Exchanges. The listing fee of National and Mumbai Stock Exchanges has been paid for and up to the year ended March 31, 2006. Your Company has applied for Delisting to all Stock Exchanges except Bombay and National Stock Exchange as these two Stock Exchanges provide sufficient reach and coverage for Trading of Companys Shares anywhere. Presently the share of the Company is suspended from trading in National and Bombay Stock Exchanges due to certain non compliances of Listing Agreement which were beyond the control of the Management. The Company is in process of complying with the Listing conditions and to restore the listing at NSE and BSE. CORPORATE GOVERNANCE: Barring unforeseen circumstances, the Company has been pro-active in following the principles and practices of good Corporate Governance. The Company has taken adequate steps to the extend possible, to ensure that the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchanges are complied with. A separate section on Corporate Governance is produced as a part of the Annual Report along with the Auditors certificate on its compliance. ACKNOWLEDGEMENT: Your Directors would like to express their appreciation for the assistance and co-operation received from IFCI Ltd., Punjab National bank (PNB), Punjab & Sindh Bank (PSB), various Government Agencies, staff, workmen, valued Customers, Dealers and Shareholders and look forward to their continued support in future as well. For and on behalf of the Board Place : New Delhi (R.S. KHEMKA) Dated : December 3, 2005 Chairman Annexure to Directors Report INFORMATION AS PER SECTION 217(1)(e) READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS REPORT FOR THE YEAR ENDED 31st MARCH, 2005. I. CONSERVATION OF ENERGY: a) Energy Conservation Measures taken: No new measures were taken in the existing furnace as most of the measures available have already been adopted within six months of commissioning of the furnaces. b) Additional investment and proposals, if any, being implemented for reduction of consumption of energy: No further plans in hand for Energy Conservation in the existing furnaces. All measures available for Energy Conservation will be installed and carried out during the next repair of the respective furnaces. c) Impact of measures (a) and (b) above for reduction of consumption of energy and consequent impact on the cost of production of goods: Though no new measures were taken in the existing furnaces, attempts have been made to run the furnaces at a comparatively - lower temperature and with higher operational efficiency. II. TECHNOLOGY ABSORPTION: Efforts made in Technology Absorption as per Form-B of the Annexure to the Rules: 1. Research areas in which (R & D): (a) Specific areas in which R & D carried out by the Company: The Company as such has no separate R & D Section. Development work, however, has been carried out in all aspects of production with a view to improve productivity both in terms of quality and quantity. (b) Benefits derived as a result of the above R & D: Due to superior quality of Micro Thin Glass and other variety of Sheet Glass, the Company has continued to export its products to various Countries during the year. (c) Expenditure on R & D (Rs. in Lakhs): This has been included in the expenditure for Laboratory and other Departments and cannot be taken out separately. 2. Technology Absorption, Adaptation and Innovation: (a) Efforts : Given in (a) above (b) Benefits : Derived given in (b) above (c) Imported : Technology Not Applicable III. (a) Foreign Exchange Earnings : 114.62 Lacs (b) Foreign Exchange Outgo : 46.46 Lacs By Order of the Board of Directors Place : New Delhi R.S. Khemka Date : December 3, 2005 Chairman MANAGEMENT DISCUSSION AND ANALYSIS 1. Industry Structure and Developments: The demand for Flat Glass increased during the year under review, mainly due to massive expansion registered by main consuming sector of glass i.e. Construction and Automotive sector. 2. Opportunities and Threats: At present the MNCs have come to India in a big way with larger capacities. Even though the competition is fierce, the goodwill of the Company and the quality of its products will help to overcome these. 3. Outlook: The positive outlook in economic growth in the key sectors such as Construction, Automobiles etc. can lead to a favourable turn in the fortunes of the Company. 4. Risks and Concerns: The risks and concerns may be classified as external and internal. Any economic slowdown may adversely affect the demand supply dynamics of glass industry and potentially affect the profitability of all the glass companies in India. 5. Internal Control Systems and Adequacy: The Company has adequate internal control procedures commensurate with its size and nature of the business. These business control procedures ensure efficient use and protection of the resources and compliance with the policies, procedures and statutes. The Company has appointed two Chartered Accountant firms to conduct internal audits throughout the year except Neemrana unit. 6. Financial Performance: Your Company has achieved a turnover of Rs.13549.35 Lakhs and Net Loss for the year of Rs.682.12 Lakhs. 7. Human Resources: The Company regards its human resources amongst its most valuable assets. There is a continuous effort on the part of the Company to provide an excellent work environment that encourages initiative, provides challenges and opportunities and recognizes the performance and potential of its people. 8. Industrial Relations: Industrial relations continued to be cordial and harmonious in all the units of the Company during the year under review.