Shakti Met-dor Ltd Directors Report

SHAKTI MET-DOR LIMITED ANNUAL REPORT 2011-2012 DIRECTORS REPORT Your Directors have pleasure in presenting the Twenty-Fourth Annual Report of the Company together with the Audited Accounts for the year ended 31st March 2012. Operating Results: Your Companys performance during the year as compared with the previous year is summarized below: (Rs. In Lakhs) Year ended Year ended Particulars 31-03-2012 31-03-2011 Turnover (net of taxes) 8576.37 6890.50 Total Income 8626.28 6912.14 Profit Before Interest and 1440.15 947.45 Depreciation Profit after Interest and Depreciation 845.14 336.76 Less: Provision for Taxation 305.40 87.44 Profit After Taxation 539.74 249.32 Appropriations: Your Directors recommend as under: Dividend at Rs. 8/-per Equity Share 220.31 Nil Corporate Dividend Tax 35.74 Nil Transfer to General Reserve 54.00 Nil Total Appropriations 310.05 Nil Share Capital, Reserves and Surplus 5657.96 5374.27 Dividend: The performance of the Company during the year has shown improvement resulting in higher profits compared to previous year. Your Directors recommend a dividend at Rs. 8/- per Equity Share keeping in view improvement in the performance and considering that no dividend was paid last year and also to commemorate the completion of 20 years of business as a Public Limited Company. Management Discussion & Analysis Report: Review of Operations of the Company: Exports: On account of higher marketing efforts export revenue is higher at Rs.343.70 Lakhs as compared to Rs. 100.14 Lakhs during the previous year. The Company is increasing its efforts in promoting its products in the overseas markets for improved performance. Business Review and Outlook: The Company continues to face increased competition from a number of small companies and also from direct imports. With high inflationary indications, there is an increase in the cost of inputs. However, the Company expects to overcome this situation by broad basing and expanding its product lines and with an extensive thrust in expanding the marketing network in the country. The Company is also looking at improving its financial viability by optimizing its operations. Litigation: The Company has received a Show-Cause Notice dated 07.04.2010 from the Office of the Commissioner of Central Excise and Customs and Service Tax, Hyderabad. The Notice demands payment of Duty of Rs. 1955 Lakhs (P.Y. Rs.1455 Lakhs) along with applicable interest and penalty for items traded, but not manufactured by the Company. The demand is for alleged misclassification and short payment of duty, by under-valuation of excise goods by the Company. The Writ Petition filed by the Company in the High Court of Andhra Pradesh challenging the Show Cause Notice was not allowed by the High Court. Hence, the Company had to approach the Commissioner of Central Excise and Customs, Hyderabad IV Commissionerate in redressing its grievances. The Companys Managing Director and its Consultant at a personal hearing put forth its valid arguments before the Commissioner refuting the contention of the Department, with a request to drop the show cause notice. Consequent to which the Commissioner issued a Record of Personal Hearing. The Management is confident that the grounds of the show cause notice are not tenable and is taking appropriate legal recourse to get the Notice nullified/quashed and that there will not be any adverse financial impact to the Company with regard to these contentions and no adjustment has been made in these financial statements pending final resolution of the matter. Internal Control Systems: The Company has effective systems and processes in place for the smooth conduct of its businesses in SAP environment. Its internal control systems are regularly checked by both external and internal auditors, who have access to all records. Energy Conservation, Technology Absorption, and Foreign Exchange Earnings and Outgo.: Disclosures required under the provisions of Section 217(1)(e) of the Act relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo in terms of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are set out in a separate statement attached hereto and forms part of this Report Directors: Mr. U Pradeep Kumar, Director retires by rotation at the ensuing Annual General Meeting. Being eligible, he offers himself for re-appointment Auditors: M/s. Chaturvedi & Shah, Chartered Accountants, the Companys Auditors, retire at the conclusion of the Annual General Meeting. They have confirmed their eligibility for re-appointment. Directors Responsibility Statement: Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that: i) In the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures; ii) 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 as at 31st March, 2012 and of the profit of the Company for the year ended as on that date. iii) 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 preventing and detecting fraud and other irregularities; and iv) The Directors have prepared the annual accounts of the Company on a going-concern basis. Acknowledgments: Your Directors wish to place on record their appreciation of the support, co-operation and assistance received from the customers, Government authorities, banks, suppliers, and community in the vicinity of the plant. Your Directors wish to place on record their appreciation for the active encouragement and co-operation extended by its Shareholders. Your Directors also wish to place on record their appreciation for the hard work and dedicated efforts put in by the Companys employees at all levels. On behalf of the Board. SD/- M.V.S.S. Subba Raju Managing Director SD/- C. Shashidar Reddy Executive Director Place: Secunderabad Date : 3/5/2012. Information Pursuant to Section 217(1)(e) of the Companies Act, 1956 Conservation of Energy: Efforts are being made to conserve power wherever possible. Technology absorption, adaptation and innovation: Larger choices of Steel Doors for different applications are being developed to widen our market base. The Company continued to acquire certifications for more ranges of Fire Doors from Underwriters Laboratories Inc. (UL) and also from EX OVA UK Ltd. Foreign Exchange Earnings and Outgo: a) Foreign Exchange Earnings during the year are Rs. 340.95 Lakhs through Exports (Previous Year Rs. 100.14 Lakhs) b) Foreign Exchange Outgo: (in Rs. Lakhs) No. Particulars 2011-12 2010-11 1. Raw Material and Hardware Imported 513.65 366.06 2. Machinery and Tools Imported 1.98 4.37 3. Consultancy Charges, Exhibitions, etc. 1.33 22.87 4. Traveling Expenses, etc. 13.99 7.33 5. Interest 5.47 6.88 Total 536.42 407.51 Pollution Control Measures: Consent for operations obtained from A P State Pollution Control Board for a five year period from 10-6-2009. Particulars of Employees Remuneration: There is no employee in the Company whose particulars of remuneration, etc., are required to b( given pursuant to Section 217(2A) of the Companies Act, 1956. On behalf of the Board SD/- M.V.S.S. Subba Raju Managing Director SD/- C. Shashidar Reddy Executive Director Place: Secunderabad Date : 3/5/2012.