jord engineers india ltd Directors report

JORD ENGINEERS INDIA LIMITED ANNUAL REPORT 2010-2011 DIRECTORS REPORT To the Members, Your directors present this Twenty Second Annual Report together with the Audited Accounts of the Company for the Year ended 31st March 2011. FINANCIAL HIGHLIGHTS: (Rs. in Lacs) 2010-11 2009-10 Sales and other Income (Net) 11889.53 5329.99 Profit/Loss before Depreciation, Interest & Tax 692.56 (415.25) Less: Interest 478.63 116.93 Depreciation 650.51 642.65 Profit/(Loss) from Operations (436.58) (1174.83) Extra Ordinary Items 33.51 28.32 Profit/(Loss) before Tax (470.09) (1146.51) Provision for Tax/FBT 0.00 0.47 Profit/(Loss) after Tax (470.09) (1146.04) PERFORMANCE REVIEW: During the year under review, the Company has recovered business in a major way, which is mainly due to the buoyant business scenario in the capital goods sector. The Company has recorded increase in sales turnover during the last few years consistently, the previous year 2009-10, being an exception when it experienced a fall in Sales. In fact the sales during the year under review has grown by almost 123% over the previous year as compared to a decline in revenues by almost 27% during 2009-10. Though the Company has incurred a Net Loss of Rs.470.09 Lacs (Rs.1146.04 Lacs), it has earned a cash profit of Rs. 213.93 Lacs (Cash Loss of Rs.532.18 Lacs during the previous year 2009-10). Your Directors are pleased to inform you that there has definitely been improvement in the business scenario during the last year and this is steadily gaining momentum. The comparative sales during the year under review is an evidence, which shows a significant rise in sales over the previous year. The quantum of current orders in hand also shows a significant improvement from earlier figures. The quantum of business inquiries is also very encouraging. During the year under review, the focus was still on Air Cooled Heat Exchangers for the Refinery Sector and Fintubes and Harps for the Power Sector. This year, company will continue to focus in a major way in bothrthese sectors. Certain important development has also taken place which gives proper focus to the company in operations. After visualizing for quite some time, manufacture of total HRSG unit should be one of our goals, we are pleased to inform that we have received our first order for this unit in association with M/s Heat Recovery Solutions (HRS), UK from Matix Fertilizer of _ssar Group through Heurtey Petroleum. This will influence our position in the market in future for such type of equipment and will give us a foothold in the boiler segment. Another area where, along with our technical collaborator from the U K in which the company has entered is Air Cooled Condensers. Another very important area in which the company has entered into is the Solar Power Sector. We had detailed discussions with a European Company who have the necessary technology; Technical collaboration agreement is in the offing. With the technical expertise of the prospective collaborator, and our manufacturing capacity for a large number of equipment required for Solar Project, the company quite definitely aims to be a big player in this Sector. Generally, the business scenario of the Power Sector in the country in the years to come is very bright. DIVIDEND: In view of huge carried forward losses by the Company, the Directors do not recommend any Dividend. DEMATERIALISATION: Your Companys shares have been dematerialized in compliance to the mandatory guidelines issued by SEBI. Equity Shares of the Company are available for trading in Demat form under National Security Depository Ltd. (NSDL). As on date, 34.80% of the stock of the total equity has been dematerialized. FIXED DEPOSITS: The Company has not accepted any Deposits from public during the Year under review and there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) Rules, 1975. EMPLOYEES: The information required under Section 217(2A) of the Companies Act, 1956, is not being given, as there was no employee during the Year or in the part of the year whose total remuneration falls under this provision. OTHER INFORMATION: Information pursuant to Section 217 (1) (e) of the Companies Act, 1956 and the Rules framed there under is annexed hereto and forms part of the report. AUDITORS AND AUDITORS REPORT: M/s N.S. Bhatt & Co., Chartered Accountants, retire at the ensuing Annual General Meeting and being eligible, has offered themselves for re- appointment. The Auditors have not made any qualification, reservations or adverse remarks affecting the true and fair view of the accounts. The same is self-explanatory and does not require any further comments from Directors. DIRECTORS In accordance with the provisions of the Companies Act, 1956 and Article 89 of the Articles of Association of the Company, Mr. Adarsh Mohan retires by rotation atthe ensuing Annual General Meeting. He being eligible, offers himself for re-appointment. DIRECTORS RESPONSIBILITY STATEMENT Your Directors confirm: (i) That in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed; (ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that 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 2011 and that of the profit / loss of the Company for that year; (iii) That the Directors had 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; (iv) That the Directors have prepared the Annual Accounts on a going concern basis. INDUSTRIAL RELATIONS Generally the relations with the employees continued to remain cordial during the year in question. CORPORATE GOVERNANCE: In compliance to the provisions of Clause 49 of the Listing Agreement with the Stock Exchange, your Company had implemented the Corporate Governance; it has obtained a certificate from the Auditors of your Company regarding compliance of the conditions of Corporate Governance for the Year 2010-11. The detailed report on Corporate Governance, along with the certificate of the auditors of the Company is annexed herewith and form part of this Annual Report. CORPORATE SOCIAL RESPONSIBILITY (CSR): The Company has taken an initiative under its CSR Policy by adopting Industrial Training Institute (ITI), Waghodia, under Public Private Partnership (PPP) with the Govt, of Gujarat. The state-of-the-art building constructed by the PPP is planned to be inaugurated by the Labour, Finance and Employment Minister of Govt, of Gujarat-Shri Vajubhai Vala. The ITI is located in the rural area of Waghodia Taluka of Vadoadara district for imparting technical and vocational training to the local students to enable them to take up employment in the engineering industries located in and around the area. Your Company, being one of the major industrial unit in the area, provides the local students employment opportunity. Special focus is being given vocational training to the female students fortheir social and economic upliftment. STATUS OF REFERENCE TO BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR) AND REHABILITATION PROCESS: The Company has been declared sick by BIFR. The Company has submitted a fully tied-up Draft Rehabilitation Scheme (DRS) to Operating Agency appointed by BIFR.-The said DRS has been submitted by OA to BIFR for their examination and approval. The DRS has consent from 98% lenders. Pending approval of the DRS, the effect of DRS has not been given in this Balance Sheet as the same is still under examination by BIFR and its approval is awaited. The Company expects to complete this exercise in the next year and hence the effect of the same shall be given appropriately in the accounts. ACKNOWLEDGEMENT: Your Directors express their thanks for the co-operation and support received from Central and State Government authorities, Lenders, Investors and Business Associates during the Year under review. For and on behalf of Board Place: Vadodara. Rakesh Chaturvedi Dated: June 06,2011. Chairman & Managing Director ANNEXURE TO DIRECTORS REPORT (ADDITIONAL INFORMATION GIVEN IN TERMS OF NOTIFICATION NO. 1029 DATED 31ST DECEMBER 1988 ISSUED BY THE DEPARTMENT OF COMPANY AFFAIRS) 1) CONSERVATION OF ENERGY a) Energy Conservation measures taken: The energy conservation is of prime importance for the nation and the Company attaches a greater significance to this aspect. During the Year under review the measures implemented in past have yielded good results, both in consumption and financial terms. Some of the measures adopted by the company in its working on a consistent basis are: (i) Periodical preventive maintenance has ensured consumption of only rated power. (ii) Pneumatically operated devices used by company to reduce consumption considerably. (iii) Company uses a range of energy saving devices wherever possible and factory sheds are designed to have optimum use of natural light for normal lighting purposes. Auto-shutoff switches have been installed, wherever possible to prevent the continuous use of machines when these are idle. Solar lighting has also been installed by the Company, on an experimental basis. This will save electricity considerably by switching to non- conventional energy source for general lighting. b) Additional investment and proposals: During the period under review, the emphasis was placed more on strict adherence to the existing measures. During the year under review, the \ Company has implemented use of non-conventional energy source (Solar) for general lighting, which shall be fully implemented in the subsequent years. Impact of measures at (a) and (b)for reduction of energy consumption and consequent impact on the cost of production of goods: As a result of implementation of above measures, your company has achieved a reduction in the overall average power consumption bringing economy in the operations of the Company. Total Energy consumption and Energy consumption per unit: Not Applicable RESEARCH AND DEVELOPMENT AND TECHNOLOGY ABSORPTION 1.(a) We have absorbed technology fully from all our collaborators for manufacturing of High Frequency Resistant Welded Fintubes, Air-cooled Heat Exchangers (ACHE), Heat Recovery St Generators (MRSG), Vacuum Filters, Clarifiers, Pulp Washers,. (b) Under the technical collaboration entered by the Company, relevant technologies for design and manufacture of Mechanical Sugarcane Harvesters, Air-cooled Heat Exchangers, Disc Filters, Vacuum Filters, Clarifiers, Pulp Washers, High Frequency Resistant Welded Fin tubes and commercial production commenced. (c) The Company has been accredited by the American Society of Mechanical Engineers (ASME) for use of their codes and procedures, so as to achieve a high degree of precision and quality assurance in the existing line of products of the Company. 2. Benefits derived as a result of above efforts. Quality of existing range of products improved with simultaneous cost reduction to meet the requirements of the user industry. It has proved import substitute also in many cases. FOREIGN EXCHANGE EARNINGS AND OUTGO (Rs. in Lacs) Particulars 2010-11 2009-10 Foreign Exchange Used For capital goods import Nil Nil Cost of components imported 234.94 2401.20 Software Import 23.14 12.17 Travelling Expenses 11.33 10.23 Subscription/Commission Nil Nil Foreign Currency Earned 5.37 243.97 For and on behalf of Board Place: Vadodara. Rakesh Chaturvedi Dated: June 06,2011 Chairman & Managing Director