Ras Propack Lamipack Ltd Merged Directors Report

RAS PROPACK LAMIPACK LIMITED ANNUAL REPORT 2009-2010 DIRECTORS REPORT TO THE MEMBERS Your Directors present before you the Seventeenth Annual Report and the Statement of Accounts for the Year ended September 30, 2010. FINANCIAL RESULTS: Rs. in Lacs 2009-10 2008-09 (12 months) (12 months) Sales and Other Income 465 437 Profit/(Loss) after writing off preliminary expenses but before finance (193) 76 expenses and depreciation Add/(Less): Finance Expenses (96) (1496) Provision For Depreciation (36) (85) Provision for TAX (Fringe Benefit Tax) - (1) Profit/(Loss) for the year (325) (1505) Add/ (Less): Extra ordinary items (Net) 7682 (82) Previous Year Expenses Nil Nil Net Profit/(Loss) for the year 7357 (1588) Amount of surplus/(deficit) brought forward from previous year (15360) (13772) Balance carried to Balance Sheet (3890) (15360) Dividend: In view of loss in the current year, the Directors have not recommended and dividend for the year 2009-10. Operations: The operations during the year was on conversion basis. Total gross1 turnover during the year under report was Rs.465.20 Lacs. The number of laminated tubes produced on conversion basis during the year were 763.66 Lacs, and number of printing images produced on conversion basis were 905.38 Lacs and the number of laminated tubes converted during the year were 821.22 Lacs and number of printing images converted were 871.32 Lacs. Status of Sanctioned Scheme of BIFR: 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 7th November 2001. 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 meltdown and recessionary conditions which adversely affected the operations there was a delay in the implementation of the Sanctioned Scheme of BIFR. The Company carried out the derating of the share capital upto 95% of the equity share capital and 20 shares were consolidated into one fully paid equity share of Rs. 10 each as envisaged in the scheme and share capital is presently Rs. 1038.32 Lacs. The Promoters Associates and the Co-Promoter has infused funds by way of Equity to the tune of Rs. 410.91 Lacs each aggregating to Rs 821.82 Lacs and accordingly 82,18,200 new shares of Rs. 10/- each have been allotted to them as per the Sanctioned Scheme. These funds have been utilised to pay the secured creditors and other liabilities. However the operations are still not viable and the production will take more time to scale up to its capacity. The Company also faces problem of 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: Mr. Roger C.B. Pereira , Director of the Company, retires 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 the Companies (Particulars of Employees) Rules, 1975. Conservation of energy, technology absorption and foreign exchange earnings / outgo: During the year, the Company has maintained strict control on energy consumption through efficient monitoring of the energy consumed in the plant and the administrative block. The Company seeks need-based foreign technical assistance from its machine manufacturer. The Foreign Exchange earnings and outgo for the year under review were Rs. Nil. Auditors: The report of the Auditors of the company are self explanatory and matters pertaining to Auditors qualification are explained hereunder pursuant to Section 217(3) of the Companies Act, 1956. i) Retirement Benefits:- Gratuity has not been provided on actuarial basis and the entire amount of Gratuity payable to the employees has been fully provided for in the financial statement. This does not materially affect the accounts of the Company since the same has been already provided for. M/s N.P. Gandhi & Co., Chartered Accountants, the Auditors of the Company, retires at the forthcoming Annual General Meeting and are eligible for re- appointment. You are requested to appoint 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 staff and Managers of the Company. Appreciation: Your Directors place on record their appreciation of the ready co-operation and assistance always extended by the Financial Institutions, 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 the 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 as amended, 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 Reports: Corporate Governance and Management Discussion and Analysis Reports are set out as separate Annexures to this Report. For and on behalf of the Board Sameer A. Kaji Dated : Mumbai, November 15, 2010 Chairman & Managing Director ANNEXURE TO THE DIRECTORS REPORT: MANAGEMENT DISCUSSION AND ANALYSIS REPORT: INDUSTRY STRUCTURE, DEVELOPMENT & OPPORTUNITIES: The Company caters to the toothpaste (oral care/dentifrice) segment. This segment accounts for major tube consumption. Currently even though the Industry is facing tough times due to competition, it is the level of service, quality of tubes and discounts offered primarily which drive the market. It is expected that once the financial restructuring is complete the Company would be in a position to take advantage of the growing FMCG segment in India and abroad. In addition to toothpaste, cosmetic segment would become a major contributor for growth of the tube market. Increase of awareness and higher availability of disposable income would result in a higher demand for cosmetic products. Besides laminate tubes has found acceptance in the pharmaceutical segment for non prescription drugs. THREATS, RISKS & CONCERN: Intense competition amongst the toothpaste majors in domestic and international market has lead to price cuts having adverse impact on the entire supply chain. Laminate tubes being an important cost-component of the toothpaste industry have come under pressure for price reductions. Keeping in mind the aforesaid constraints the Company would work out number of strategies including: * Reduction in down-time by minimizing tool changes, * Reduction in raw material cost through efficient procurement by regularly negotiating with its key raw material suppliers for price reduction. 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 laminated tubes 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 reviewed by the 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 fast changing market scenario, demand and supply conditions, raw material prices, competition from un organized markets with cheaper products , changes in government regulations, tax regimes, economic developments within the country and other factors such as outcome of the BIFR implementation of scheme etc.