Ras Extrusions Ltd Merged Directors Report

RAS EXTRUSIONS LIMITED ANNUAL REPORT 2009-2010 DIRECTORS REPORT TO THE MEMBERS Your Directors present before you the 22nd Annual Report and the Statement of Accounts of the Company for the Period ended September 30, 2010. (Rs. In lacs) Financial Results For the For the year ended year ended September September 30, 2010 30, 2009 (12 months) (12 months) Production (Qty. in MT) 12.80 0.00 Sales and other income 69.05 9.27 Earning Before Interest and Depreciation 55.65 (126.39) Financial Overheads (4.45) (7.23) Depreciation (26.04) (26.03) Profit/(loss) after providing for interest and depreciation (86.14) (159.65) Provision for Tax (Fringe Benefit Tax) - 0.22 Extra ordinary Income 96.57 - Profit / Loss after Tax 10.43 (159.87) Amount of profit/(loss) brought forward from previous year (1722.98) (1563.11) Balance carried to Balance Sheet (677.05) (1722.98) Dividend: In view of loss in the current year, the Directors have not recommended any dividend for the year 2009-10. Operations: During the year, the total turnover was Rs.69.05 Lacs, The production of laminated web on conversion basis was 12.80 MT. Revival of the Company & Future Prospects: The Company had made a reference to the Board for Industrial and Financial Reconstruction (BIFR) under section 15 (1) of the Sick Industrial Companies (Special Provision) Act, 1985 on 22nd November 2006. Subsequently the Company filed a rehabilitation scheme on 13-08-2007 jointly with Essel Propack Limited (EPL) who agreed to act as co-promoter for revival of the company. The Honble BIFR vide its Order dated February 17, 2009 sanctioned the Rehabilitation Scheme submitted by the Company. However due to global melt down and recessionary conditions which adversely affected the operations of the Company, there was a delay in the implementation of the Sanctioned Scheme of BIFR. The financial compliance of the sanctioned scheme is implemented and Promoters and Co-Promoters are hopeful for completing operational implementation of the revival scheme at the earliest. The Company carried out the derating of the share capital upto 95% of the share capital as envisaged in the scheme and share capital is presently Rs. 204.50 Lacs. The Promoters Associates and the Co-Promoter has infused funds by way of Equity to the tune of Rs 75 lacs each aggregating to Rs 150 Lacs and accordingly 15,00,000 new shares of Rs. 10 each have been allotted to them as per the BIFR Scheme. These funds have been utilized to pay the secured creditors and other liabilities. However as the operations were not viable and some time was taken for the rehabilitation of the company, the production will take time to scale up to its capacity. The Company also faces problem of sourcing for working capital as it has no banking assistance. The rehabilitation of the Company will be thus impacted during the time frame as per the scheme. Directors: During the year under review 2 directors, namely Dr. V.H. Kaji & Mrs. R.A. Kaji (Non-independent Directors) resigned from the Board of Company in view of their personal reasons. The company place on record the long standing valuable time given to company by them, since the incorporation of company. Mr. Roger C.B. Pereira, Director of the Company, will retire by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-appointment. Particulars of Employees: There is no employee in receipt of remuneration exceeding the limit prescribed under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975. Conservation of energy, technology absorption and foreign exchange earnings / outgo: During the period, the Company had maintained strict control on energy consumption through efficient monitoring of the energy consumed in the plant and the administrative block. The Company does not need any technology for its existing activity. The Foreign Exchange earnings and outgo for the period were placed at Rs.Nil. Auditors: The Note No. 2 in the Notes to the Accounts in Schedule 16 referred by the Auditors in their report is self-explanatory. Messers Sangani & Co., Chartered Accountants, and the Auditors of the Company, would retire at the forthcoming Annual General Meeting and are eligible for reappointment. You are requested to appoint the Auditors and to fix their remuneration. Personnel: Industrial relations continued to be cordial throughout the year. The Board places on record its appreciation for the services rendered by workmen and management staff of the Company. Appreciation: Your Directors place on record their appreciation for the ready co- operation and assistance always extended by Banks, Customers and Suppliers of the Company. Directors Responsibility Statement: The Directors state that: (I) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (II) The directors had 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 and of the loss of the company for that year; (III) 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) The directors had prepared the annual accounts on a going concern basis. Corporate Governance and Management Discussion and Analysis Report: Corporate Governance and Management Discussion and Analysis Reports are set out as separate Annexures to this Report. For and on behalf of the Board Place: Mumbai Sameer A Kaji Dated: November 15, 2010 Chairman MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY STRUCTURE AND DEVELOPMENT: The main product of the Company is multi-layer-laminated web, used for manufacturing soft squeeze laminated tubes. The Company caters to the toothpaste (oral care/dentifrice) segment. Currently even though the Industry is growing, it is the level of service, quality of web, discounts offered primarily drive the market. It is expected that once the final restructuring is completed the Company would be in a position to take advantage of the growing FMCG segment in India and abroad, with added advantage of competitive price offering and support of co-promoters , the worlds largest tube manufacturer. In addition to toothpaste, cosmetic segment has become a major contributor for growth of the tube market in India. This will help in enhancing the order book position of the Company, at a better margin for its products with higher volume of web sales. THREATS, RISKS & CONCERN: As mentioned above though the industry has started growing, after recessionary pressures on economy as a whole, it is discounts and promotions, which primarily drive it. Intense competition amongst the toothpaste majors in domestic and international market has lead to price cuts having adverse impact on the entire supply chain, as laminated tubes being an important cost-component of the toothpaste industry have come under pressure for price reductions, for the laminated web sourcing. Keeping in mind the aforesaid constraints the Company has worked out number of strategies including: * Reduction in raw material cost through efficient procurement by regularly negotiating with its key raw material suppliers for price revision and economic bulk order quantity sourcing once the restructuring is in place. OUTLOOK: The Company focuses on increase in volume, improve its efficiency by vigorously implementing cost reduction parameters viz. efficient procurement policy, applying various cost reduction methods, innovations, strengthening its quality parameters. The above steps would ultimately lead to production of quality laminate at competitive prices. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has proper and adequate control systems to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that transaction are authorized, recorded and reported correctly. These are viewed by Audit Committee and the suggestion made by them are implemented. FINANCIAL PERFORMANCE: This has been covered in the Directors report. DEVELOPMENTS ON HUMAN RESOURCE / INDUSTRIAL RELATIONS FRONT: The Company continuously monitors its manpower requirement to ensure that it has adequate human skills commensurate with its needs. Industrial relations of the Company continue to be cordial. CAUTIONARY STATEMENT: Statements in the Managements Discussion and Analysis Report describing the Companys projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that would make a difference to the companys operations include demand supply conditions, raw material prices, changes in government regulations, tax regimes, economic developments within and outside the country, implementation of BIFR scheme etc.