shrishma fine chemicals karnataka ltd Directors report

SHRISHMA FINE CHEMICALS AND PHARMACEUTICALS (KARNATAKA) LIMITED ANNUAL REPORT 2004-2005 DIRECTORS REPORT Your Directors present herewith the Twenty Third Annual Report and Audited Accounts for the year ended 31st March 2005. The Companys performance has been as under: Financial Results: Rupees in lakhs 2004-05 2003-04 Sales and Income 199.00 215.11 Stock Adjustments (43.98) 14.39 Loss before Interest, Depreciation and Taxation (33.37) (2.02) Loss after Interest, Depreciation and Taxation (187.52) (158.61) Provision for Taxation 33.82 (443.54) Loss after Taxation (153.71) (602.16) Loss carried to Balance Sheet (3214.86) (3061.15) OPERATIONS: Uncertainty prevailed throughout the financial year based on the BIFR order to the Operating Agency advising for advertisement for change in management. As a result there has been further drop in the activity levels at the factory. Your management, despite the uncertain situation, ensured un-interrupted production at the factory, despite the cash losses. DIRECTORS: The office of Chairman & Managing Director and the Joint Managing Director fell vacant on completion of one years term on April 25, 2005. The Board of Directors appointed them for a further term of one year, subject to the approval of the Shareholders at the ensuing annual general meeting, on the same terms and conditions as before. Members are requested to approve their appointments. Mr. Pravin Vepari retires by rotation and is offering himself for re-appointment as Director. Mr. Walter Saldanha retires by rotation and is offering himself for re-appointment as Director. Members are requested to appoint them as Directors to retire by rotation at the annual general meeting. AUDITORS: M/S. Haribhakti & Company, Chartered Accountants, retire as Auditors of the Company and have given their consent for re-appointment. They have confirmed that their appointment will be in conformity, as far as limits are concerned, under Section 224 of the Companies Act, 1956. REMARKS OF AUDITORS: Observations of Auditors relate mainly to non provision of interest expenses, arrears of depreciation. In the earlier years interest provision were not made in the hope that the Operating agency will be able to get the rehabilitation proposal sanctioned by BIFR. Now that it has not happened and the commission has directed the Operating Agency for a change in management, the situation on these counts remains status quo. FIXED DEPOSITS: The Company did not accept or renew Fixed Deposits during the year. DISCLOSURE OF PARTICULARS: No employee was in receipt of remuneration falling within the purview of Section 217 (2A) of the Companies Act, 1956 and as such particulars of employees is not applicable. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: This has been given in Annexure A to this report. DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to section 217(2AA) of the Companies Act, 1956, your Directors, based on the representations received from the Operating Management and after due enquiry, confirm that: 1. In the preparation of annual accounts, the applicable accounting standards have been followed; 2. They have, in the selection of the accounting policies consulted the statutory auditors and these have been applied consistently and reasonable and prudent judgements and estimates have been made so as to give a true and fair view of the state of affairs of the company as at 31st March 2005, and the loss of the company for the year ended on that date; 3. Proper and sufficient care has been taken 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; 4. The annual accounts have been prepared on a going concern basis. REPORT ON CORPORATE GOVERNANCE: The Companys Board is constituted of both Executive and Independent Directors. Board Meetings are held at regular intervals with a formal agenda. During the year under review four meetings were held. Actions taken on disposing Shareholders grievances are duly reviewed by the Shareholders grievances committee. ACKNOWLEDGEMENT: The Board expresses its gratitude and appreciation to the Shareholders, Debenture Holders and Financial Institutions for their support. For and on behalf of the Board Dr. R.N. Goel Chairman & Managing Director Place: Mumbai Dated: October 24, 2005 ANNEXURE - A Form of Disclosure of Particulars with respect to Conservation of Energy: Year ended March 31, 2005 A. Power & Fuel Consumption: 1. Electricity: a) Purchase Unit KWH 228,807 Total Amount Rs. Lacs 17.74 Rate / Unit Rs 7.76 b) Own Generation - c) Through Diesel Generator Unit 5,536 Unit per litre of petrol 1.86 Cost/ unit Rs. 17.93 2. Furnace Oil Quantity kilo litre 64,867 Total Cost Rs. lacs 9.41 Average Rate Rs / litre 14.52 B. Consumption per Unit of Production Products ] Since the company manufactures several formulations Electricity ] and bulk drugs in the same factory, it is not practical Furnace Oil ] to apportion consumption of utility based on the record. Coal/Others ] Technology Absorption: Due to paucity of funds, no major thrust could be given. C. Foreign Exchange Earnings and Outgo: (Rs in lacs) 2004-05 2003-04 Earnings 0.23 13.26 Outgo 5.65 3.72 Imports 19.30 0.74