m p telelinks ltd Directors report
M.P. TELELINKS LIMITED
ANNUAL REPORT 2008-2009
DIRECTORS REPORT
Dear Members,
Your Directors are pleased to present the Fifteenth Annual Report, together
with the Audited Statement of Accounts of the Company for the year ended
31st March, 2009
FINANCIAL RESULTS:
(Rs. in Lac)
Year Ended Year Ended
Particulars 31.03.2009 31.03.2008
Gross Sales 1439.56 3537.33
Net Sales 1234.96 2993.53
Other Income 1.49 3.94
Total Expenditure 1360.23 3420.38
Operating Profit / (Loss) before
Interest, Depreciation and Tax (123.78) (422.91)
Interest Received / (Paid) (255.38) (66.99)
Gross Profit / (Loss) after Interest
but before Depreciation and Tax (379.16) (489.90)
Depreciation (126.50) (130.54)
Profit / (Loss) Before Tax (505.66) (620.44)
Provision for Tax / FBT (0.70) (0.97)
Profit / (Loss) After Tax (506.36) (621.41)
Balance brought forward from previous year (1464.53) (843.12)
Balance carried to Balance Sheet (1970.89) (1464.53)
Year in retrospect:
Your Directors regretfully place on record that the financial statement for
the year 2008-09 reflect significant decline in the sales as compared to
the last year and the bottomline reveal continuous losses due to non-
utilisation of plant capacity. The Company had to discontinue the
manufacture of PIJF Cables, in view of its low demand and unrealistic
prices, consequent to cut throat competition on account of excess capacity
amongst the cable players. It could be evidenced from the financial
statements, that the Company is incurring continuous losses during the last
5-6 years and in turn, the Company is facing severe financial difficulties
and not able to fulfill the payment of statutory dues viz. commercial tax
on time. The Company is seriously pursuing the company bankers for higher
limits of working capital facilities. On the other hand, the promoters too
are having plans to infuse additional long term funds to meet out the
financial obligations that may arise in the near future. The Audited
Balance Sheet of the Company for the financial year shows that its
accumulated losses as at the end of the financial year have exceeded its
net worth as at the same date. The Board of the Company shall consider the
said fact along with applicability of, and compliance required with the
provisions of Sick Industrial Companies (Special Provision) Act, 1985 at
its next meeting.
The Company has been laying emphasis on the products viz. Quad Cables and
Power Cables. Although, the Company could procure orders in the past, of
smaller quantities from the Railways for Quad Cables, the encouraging
factors that revealed recently, indicate that the Companys status as far
as eligibility to procure big orders are concerned, have been upgraded by
the Indian Railways and hence, in the ensuing year, the Company is
optimistic that orders for large quantity could flow in, from the
Railways. The demand of the Railways for this product is high due to
overall expansion of the railway network across the country and hence, with
the flow of valued orders, the topline is expected to scale up in the next
year. Similarly, in the Power Cables, the silver lining is that the Company
had got the approval for its status to manufacture high voltage cables in
the range of 33 KV and with this recognition in the background, the
Company would strive in the next year to procure value added orders for
Power Cables, thereby contributing to the topline growth to a level of
Rs.30-35 Crore.
Dividend:
Your Directors do not recommend dividend for the year 2008-09 in view of
continuous losses.
Corporate Governance:
Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges,
Management Discussion and Analysis, Corporate conditions of Corporate
Governance are made part of the Annual Report.
Directors Responsibility Statement:
Pursuant to Section 217 (2AA) of the Companies Act, 1956, your Directors
report as under:
(i) the applicable Accounting Standards as specified by the Institute of
Chartered Accountants of India have been followed in the preparation of the
Annual Accounts for the year ended 31st March 2009;
(ii) that the Company has selected such Accounting policies and applied
them consistently (read with Notes) and made judgements 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 31 March
2009 and of the loss for the year ended 31 March, 2009;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting. records in accordance with the
provisions of this Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; records in
accordance with the provisions of this Act 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.
Directors:
Shnd K.M. Gupta, retires by rotation at this Annual General Meeting and is
eligible for re-appointment
Shri Prahodh Mahajan, retires by rotation at this Annual General Meeting
and is eligible for re-appointment.
Auditors:
Ws V. Bapna & Co. Chartered Accountants, Auditors of the Company retires at
the ensuing Annual General Meeting and being eligible have offered
themselves for reappointment. The notes to the accounts referred to in the
Auditors Report are self-explanatory and, therefore, do not call for any
further, comments.
STATUTORY INFORMATION;
Information on Conservation of Energy Technology Absorption, Foreign,
Exchange, Earning and Outgo required to be disclosed under. Section 217 (I)
(e) of the Gwallor Companies Act, 1956 is annexed hereto arui form of the
Directors Report.
PERSONNEL;
The Board of Directors wish to express its appreciation to all the
employees of the Company for their continued contribution to the operations
of the Company during the year despite adverse conditions. Particulars; of
employees in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of the Employees)
Rules 1975 as amended, are not given, as none of the employees qualify for
such disclosure.
FIXED DEPOSITS:
The Company has not accepted any fixed deposits during the year under
review.
ACKNOWLEDGEMENT:
Your Directors wish to place on record its gratitude for the continued
support from its bankers and other Govt. Departments.
Your Directors are also grateful to members for the confidence reposed in
the Company and acknowledge their contribution.
On Behalf of the Board
KASHIRAM GUPTA
Chairman
Gwallor
April 16, 2009
ANNEXURE TO DIRECTORS REPORT
Information under Section 217 (1)(e) of the Companies Act, 1956 read with
Companies (Disclosure of Particulars in the Report of the Board of
Directors) Rules, 1988 and forming part of the Directors Report for the
year ended 31st March 2009:
(A) CONSERVATION OF ENERGY:
(i) Energy conservation measures taken:
The Companys products are material intensive. However, adequate and
appropriate measures are being taken for saving energy / reduction of
consumption of energy at floor level by adopting preventive measures. All
energy conservative measures are adopted at the time of installation of
additional machinery
(ii) Additional investments and proposals, if any, being implemented for
reduction of consumption of energy;
No major investments are envisaged / contemplated.
(iii) Impact of measures at (i) and (ii) above for reduction of energy
consumption and consequent impact on the cost of production of goods:
The above measures have resulted in savings of energy and reduction in mfg.
Cost wherever power oriented processes are involved.
(B) TECHNOLOGY ABSORPTION:
(Particulars as per form B)
Research and Development (R & D)
(1) Specific areas in which R & D carried out by the Company:
i) Import substitution of auxiliary equipment & Spares.
ii) Quality Improvement and design & development of products as per
emerging technical standards in power cables.
(2) Benefits derived as a result of the above R & D:
i) Successful launch of new products by usage of improved Production
Methods.
(ii) Reduction in operational cost,
(iii) Quality Improvement and reduction in scrap.
(3) Future plan of Action;
To strive / innovate means of production to derive maximum business
potential with judicious employment of resources, wherever necessary, with
focused strategy on growth.
(4) Expenditure on R & D : NIL
a) Capital:
Separate Account of expenditure is not maintained and the expenses are
merged with relevant heads of expenditure.
b) Recurring : NIL
c) Total : NIL
d) Total R & D Expenditure as a percentage of total Turnover : NIL
(C)TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
1) Efforts in brief, made towards technology : NIL
absorption, adaptation and innovation.
2) Benefits derived as a result of the above : NIL
efforts, e.g., Product improvements, cost
reduction, product development, import
substitution etc.
3) Information regarding imported technology
a) Technology imported : NIL
b) Year of import : NIL
c) Has technology been fully absorbed : NIL
d) If not fully absorbed, areas where this
has not taken place. : NIL
(D) FOREIGN EXCHANGE EARNINGS AND OUTGO:
a) Foreign Exchange Earned : NIL
b) Foreign Exchange Outgo : Rs.204.41 Lac
- Purchase of Raw Materials
CERTIFICATE OF COMPLIANCE WITH THE CODE OF CONDUCT:
As provided under Clause 49 of the Listing Agreement relating to Corporate
Governance with the Stock Exchanges, all the Board of Members and the
Senior Management Personnel of the Company have affirmed compliance with
the Companys Code of Conduct during the financial year 2008-09.
On Behalf of the Board
Gwalior KASHIRAM GUPTA
April 16, 2009 Chairman
MANAGEMENT DISCUSSION AND ANALYSIS
Industry Structure and Developments:
The Company was established for the manufacture of Polyethylene Insulated
Jelly Filled Telephone (PIJF) Cables. Although the business of PIJF Cables
was running on sound footing, out of the blue, there was all round
technical upgradation in the telecom industry, and the govts keenness to
introduce WLL Technology and the entry of private corporates in the mobile
phones, had rendered the PIN Cables as an obsolescent product. The
slackness of demand from the main customers viz. BSNL had further shrinked
the market demand drastically. In view of this adverse market scenario, the
Company had discontinued the manufacturing operation of PIJF Cables and
desired to penetrate into other diversified supply of cables viz, Quad /
Power Cables. basically, the Quad Cables are supplied to the Railways and
the Power Cables are supplied to private corporate utilities SEBs.
During the last few years, the Company was able to supply both Quad and
Power Cables consistently, although in limited quantity of cables. The
silver lining in the dark clouds is that due to our technical upgradation,
the railways have elevated our supplier grade and accordingly, the Company
stands eligible now, to procure for a larger quantity of Quad Cables and
this turn of event, would eventually bear fruit, enhancing the volume of
sales during the current year. Simultaneously, the management had desired
to attain optimum utilization of the existing infrastructural facilities by
way of manufacturing Power Cables, a branch line in the Cables family. The
Company have got its technical upgradation to manufacture high voltage
cable of 33 KV and consequently, this would scale up the turnover curve in
the current year, at a level Rs.30-35 Crore. It is pertinent to note that
the Central Govt., has ambitious plans in the current Five Year Plan to
allocate sizable plan outlay for the development of infrastructure
facilities that include generation / distribution / transmission of power
and to add to this, gates were opened for the private corporates to equally
participate in power line development and the overall booming industrial
development across the country would all contribute to the bright future
for the supply of Power Cables. The Company is seriously pursuing the
Company bankers to grant higher limits of working capital facilities, so
as to meet the emerging needs to service the growing Quad Cables/Power
Cables production lines. The promoters too have plans to infuse additional
funds to meet the long term requirements of the Company in the years ahead.
Financial Review:
In terms of requirements of Companies Act, 1956, the Financial Statements
have been prepared, taking cognizance of applicable Accounting Standards
issued by the Institute of Chartered Accountants of India (ICAI).
(a) The current years sales and Job work receipts of Rs.1439.56 Lac has
declined considerably, as compared to previous years sates of Rs.3537.33
lac due to global economic recession, followed by restricted quantity
requirements from the customers.
(b) Inventories amounted to Rs.183.23 lac as at 31.03.2009 as against
Rs.138.10 lac as at the previous year end. The obsolete and unserviceable
items in the inventory stock have been adequately dealt with in the
accounts.
(c) Sundry Debtors amounting to Rs.156.12 lac as at 31.03.2009 as against
Rs.1267.36 lac as at 31.03.2008. Action Plan is being enforced in the
realization of receivables within the stipulated credit period to ease out
the severe cash flow position of the Company.
(d) Cash and Bank Balances with Scheduled Banks amounted to Rs.12.20 Lac at
the year end.
(e) Loans and Advances, other than balances with excise dept / tax deducted
at source as at 31.03.2009 amounted to Rs.43.59 lac as against Rs.46.73 Lac
that represent advances paid for raw materials, stores and consumables and
advances to employees, and security deposits as well as advances to others.
(f) Current Liabilities as at 31.03.2009 include creditors for raw
materials of Rs.207.10 lac as against Rs.805.85 lac at the end of the
previous year.
Human Resource Development:
It is our strong conception that machine tools alone cannot build an
industry without coordinated application of human skills. The Management of
company encourages and support its employees at all levels so as to ensure
that their skill and efficiency are reflected in the Companys business
growth. The management strives to ensure that the quality of life of its
employees is properly taken care of, by providing safe and clean working
atmosphere.
Industrial relations have continued to be cordial and amicable through out
the year.