Shamken Multifab Ltd Directors Report

SHAMKEN MULTIFAB LIMITED ANNUAL REPORT 2007-2008 DIRECTORS REPORT To The Members Dear Shareholders, Your Directors are pleased to present their 20th Annual Report together with Audited Accounts of the Company for the year ended 31st March, 2008. Rupees in lacs FINANCIAL HIGHLIGHTS Year Ended Year Ended 31-03-2008 31-03-2007 Sales & Other Income 2494.15 3660.20 Profit/Loss before Tax (1221.40) (1085.94) Profit/Loss after & Tax (1225.70) (1092.57) Loss B/F from previous year (7815.24) (6722.68) Profit/Loss available for appropriation (9040.94) (7815.24) CURRENT DEVELOPMENT: The Arrangement Scheme Under Section 391-394 of the Companies Act, 1952 filed by the Company with honble High Court of Allahabad at Allagabad. The meeting of the secured creditors will be held on 6th September, 2008 at Coshi, Mathura (U.P.) to approve the Scheme of Arrangement. DIVIDEND: In view of the accumulated losses your Board is unable to declare any dividend for the year under review. DIRECTORS: Mr. Amit Chatunredi and Mr. K.P. Saxena, Directors of the Company, retire by rotation and being eligible, offer themselves for re-appointment. Your Board recommends their re-appointments as Director. AUDITORS REPORT: The observations of the auditors are self explanatory and therefore, do not call for any further comments. AUDITORS: The Auditors of the Company, M/s. J.P. Chaturvedi & Associates, Chartered Accountants, the present auditors, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Your Company has received a certificate from them stating that the re- appointment, if made, will be in conformity with the limit specked under Section 224(1 B) of the Companies Act, 1956. COST AUDITORS: The Central Governments Cost Audit order specifies audit of Cost Accounting Records for certain specified products every year. The Board of Directors, subject to the approval of the Central Government, has appointed M/s S.K. Mittai & Co., Cost Accountants, to carry out the Cost Audit for the year under review at remuneration to be decided by the Board of Directors. CORPORATE GOVERNANCE: As required by Clause 49 of the listing agreement, the reports on Management Discussion and Analysis, Certificate from the Company Secretary in Practice regarding compliance of conditions of Corporate Governance, & Corporate Governance Report are annexed as annexure - II, III & IV respectively and form an integral part of this report. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the report of Board of Directors) Rule, 1988 is given in the Annexure-I, forming part of this report. FIXED DEPOSITS: Your Company has been effectively discharging payments to its deposit holders as per the Direction given by the Company Law Board. It owns liability to the tune of Rs.229.07 Lacs against 1365 number of Deposit Holders. PARTICULARS OF EMPLOYEES: Information in accordance with the provisions of section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rule, 1975 as amended, there is no employee employed by the Company either for whole or part of the year drawing remuneration in excess of the limits laid down under the rules mentioned above. DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to Section 217(2AA) of the Companies Act, the Directors confirm: a. That in the preparation of the accounts for the year ended on 31st March, 2008 the applicable Accounting Standards generally have been followed. b. That such Accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the period ended 31st March 2008. c. That proper and sufficient care has been taken for 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. d. That the accounts for the period ended 31 March, 2008, have been prepared on a going concern basis. APPRECIATION: Your Directors wish to convey their thankful appreciation for the constant and enthusiastic support of the Companys Customers, Distributors, Suppliers, Bankers and Financial Institutions and the State and Central Governments, without which the Company would not have been able to accomplish whatever it has actually attained. Your Directors also take this opportunity to express their appreciation of the earnest efforts put ire by the employees, at all levels, in achieving the corporate objectives. For and on behalf of the Board For Shamken Multifab Limited Sd/- Sd/- Sanjay Chaturvedi Amit chaturvedi Place : New Delhi Director Joint Managing Director Date : 25th August, 2008 ANNEXURE-I: Information in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rule, 1988. Statement of particulars pursuant to Companies (Disclosure of Particulars in the report of Board of Directors) Rule, 1988. PARTICULARS Year Ended Year Ended 31-03-2008 31-03-2007 A. CONSERVATION OF ENERGY: a) energy conservation measures : all round efforts are being made taken b) additional investment and : made for energy conservation to proposal, if any, being implemented reduce wastage. Energy for reduction of consumption of conservation has been made a part energy; of work culture c) impact of measures at (a)and (b) : Power for per Mtr. of fabric above of for reduction of consumption of energy d) Power & fuel Consumption : As Per form A Attached B. TECHNOLOGY ABSORPTION: a) efforts made in Technology : As Perform B Attached absorption C. FOREIGN EXCHANGE EARNING AND OUTGO : a) activities relating to exports, : As mentioned in Directors Report, initiatives taken to increase exports, development of new export markets for product and services, and export plans; b) total foreign exchange used and earned: i) Foreign Exchange used : 9,245,074 14,799,090 ii) Foreign Exchange earned : NIL NIL FORM - A: A. POWER AND FUEL Year ended Year ended CONSUMPTION 31st March 2008 31st March 2007 1. Electricity: a) Purchase unit KWH 485998 1286561 Total Amount Rupees 2238933 8871876 Rate/unit Rupees 4.60 6.90 b) Own Generation through Diesel Gensets unit 1459375 147944 Units per liter of Diesel Units/Ltr 2.83 2.6 oil Cost per Unit Rs./Unit 7.48 13.53 2. Other/Internal Generation Boiler: Quantity: Ltrs (Diesal) 45874 26795 KG (Wood) 3477122 4707699 Total Amount Rupees 12172442 12180813 Average Rate Rs/Ltrs. 3.45 2.57 B. CONSUMPTION PER UNIT OF PRODUCTION: Velvet/Fabric Mtr. 770656 941458.57 Coir Nos. 5117 7244 Electricity includes Unit/meter 0.9 0.78 Unit for DG Set Unit/Coir/No. 05 1.35 Cost Rs./Mtr. 7.2 4.89 Rs./Coir/No. 12.40 10.18 Boder (Diesel) Ltrs/Mtr 0.06 0.02 Cost Rs./Mtr 1.99 0.66 Dyeing Production Kg. 410044 635742 Electricity KWH/Kg 3.02 1.07 Cost Rs./Kg. 18.41 9.74 Boiler (WOOD) Unit/Kg. 8.47 7.40 Coot Rs./Kg. 25.93 16.00 Water Charges Rs. 634189 357959 FORM-B: (Form for Disclosure of Particulars with respect to absorption): Research and Development (R&D): 1. Specific areas in which R&D : Improvement in methods of manufacturing Carried by the Company cost effectiveness and efficiencies. 2. Benefits derived as a result : Newer & improved methods of of the above R&D manufacturing yarn, cost reduction, improvement in efficiencies. 3. Future plan of action : To continues for development of better products and improvement in quality & efficiencies. 4. Expenditure on R&D } : It is an on-going process and there is } no specific allocation and } identification of expenditure of R&D } (a) Capital } : } (b) Recurring } : } (c) Total } : } (d) Total R&D expenditure as a } : percentage of total turnover } Technology Absorption, Adoption & Innovation: 1. Efforts, in brief, made : The Company is regularly pursuing the towards technology absorption, up-gradation of technology for the adaption innovation development of new product. 2. Benefits derived as a result : Improvement of quality of products, of the above efforts e.g. improvement in manufacturing process product improvement, cost resulting in cost reduction and reduction. wastages during the manufacturing process and acceptability of the product in the international market 3. In case of imported technology : Nil (imported during the last 5 years reckoned from the beginning of the financial year) Note: Figures have been re-arranged and re-grouped wherever required in the Directors Report and management Discussion and analysis along with annexure thereon. MANAGEMENT DISCUSSION & ANALYSIS REPORT: Annexure-II: OPERATIONS & OUTLOOK: The Companys Accounts for the current year has been prepared far the year of 12 Months i.e. from 01-04-2007 to 31-03-2008. During the year under review your Company has clocked a turnover of Rs. 2483.80 Lacs excluding increase in Stocks & other income. The Company has incurred a net loss of Rs.1225.70 Lacs after providing a depreciation of Rs. 1108.22 Lacs. This is attributed to the severe strict measures to revive the Company in order to put it on track as early as possible. As the economy booming and the demands of the Companys product improving we expect to make a significant turn around very soon. Your Company is negotiating with Financial Institutions, Banks, State Government to support the restructuring program formulated by the Company so that the financial health of the Company be put on track. SWOT ANALYSIS FOR THE COMPANY: Strengths: Your Company is one of the leading producer of automobile fabric & matrac for original cars, having command over one third of automobile fabric market. Your Company has tied-up with liziong Ltd., Korea & Sumino textile, Japan for supply of necessary know-how to produce world class automobile fabric in India at competitive prices. This will lead to gain in significant market share in automobile fabric market. Weaknesses & Threat: Your Company is heavily dependent on the supply of raw materials like; Air texture yams, polyster yams and fancy yarns. To ensure supply of these raw materials your Company is in constant touch with the vendors. Further, your Company has approached Board of Financial & Industrial Reconstruction for the revival of the Company and expecting favourable response in the larger interest of the Company and its stakeholders. Opportunities: The Indian Automobile Fabric market is going paces with the steep rise in the production of cars with estimated production of around four million cars per year by 2010. This gives us immense opportunity to grow in this field. ENVIRONMENT SAFETY: Your Company has it stalled proper plants to fulfill its obligations towards environmental safety. INTERNAL CONTROL SYSTEM & ADEQUACY: The Company has a well defined internal control, System that is adequate and commensurate with size and nature of business. Clear roles, responsibilities and authorities, coupled with internal information systems, and ensure appropriate information flow to facilitate effective monitoring. RESEARCH & DEVELOPMENT: Expenditures on Research and Development is not separately allocated and identified. The recent technological tie-up with the Korean and Japanese firm will lead to overall quality improvement. DISCLAIMER: Statements in this report describing the current industry, outlook, opportunities etc. reflect the estimation and opinion of the Company. The same are based on certain assumptions and expectations of future events. The actual results may substantially diverge from the same as they depend upon the worldwide political, economic and social situation. Further, Government regulations, tax structure, demand & supply conditions, cost of raw materials & their availability and other related factors can also have a bearing on the above statements. For and on behalf of the Board For Shamken Multifab Limited Sd/- Sd/- Place : New Delhi Sanjay Chaturvedi Amit chaturvedi Date : 25th August, 2008 Director Joint Managing Director