sun polytron industries ltd Directors report

SUN POLYTRON INDUSTRIES LIMITED ANNUAL REPORT 2002-2003 DIRECTORS REPORT To The Members, Your Directors present the Twenty-second Annual Report together with the Adited Accounts of the Company for the financial year ended 31st March 2003 and the Auditors Report thereon. Financial Result : (Rs. In Lakhs) Years ended on Years ended on PARTICULARS 31-03-2003 31-03-2003 Sales and Other income 6651.85 4946.31 Profit before Interest, Depreciation and Tax 385.83 451.07 Less : Interest 1220.21 850.30 Depreciation 642.55 551.33 Profit Before Tax -1476.94 -950.56 Less : Prior Period Adjustment Add : Surplus bought forward from earlier years 1860.70 2924.29 Profit available for appropriation 383.76 1973.73 Less : Amount Transferred to General Reserve Debenture Redemption Reserve 113.03 113.03 Proposed Dividend - - Provision for Tax on Dividend - - Balance carried to Balance Sheet 270.73 1860.70 Operations The performance of your Company continued to be less than satisfactory during the year under review. The Net Loss of your Company increased to Rs. 1476.94 lacs during the current year from Net Loss of Rs. 950.56 lacs during the year 2001-02. Though there has been a rise in sales to Rs. 6651.85 lacs from Rs.4946.31 lace but due to non-optimal product mix the desired profitability is not achieved. Your Companys efforts to improve its performance are continuing and are expected to fructify in the future. As reported earlier, your Company has undertaken financial restructuring to bring down the interest burden and subsequently increase the overall financial health. The effort in this direction are continuing and the completion of the financial restructuring will result in the revival of health of your Company. Dividend The Directors to not recommend any dividend for the year in view of the ongoing losses. Business Plan Your Company has converted the Silvassa Unit to 100% Export Oriented Unit (EOU). During the current year the Company is focusing on further improving the cost competitiveness of the plant with respect to energy saving, waste reduction, input/output ratio improvement so as to be increasingly competitive with export markets. During the year under review your Company has added new product line by installing Knitted Fabric Machines to tap the potentials in export markets. Directors Shri Minesh Shah has been appointed as director with effect from 31.07.2003 and shall hold office upto the ensuing Annual General Meeting. The Company has received notice from member pursuant to Section 257 of the Companies Act, 1956 indicating his intension to propose the candidature of Shri Minesh Shah. The industrial Development Bank of India (IDBI) had nominated Shri Ravisekhar as a nominee Director on the Board of the Company in place of Smt. Savita S. Sinha with effect from 30.04.2003. The Board places on record its appreciation for the valuable services rendered by Smt. Savita S. Sinha during her tenure as Director. The IFCI Limited had nominated Smt. Prabha Bangia as a Nominee Director on the Board of the Company in Place of Shri Naresh Saluja with effect from 08.09.2003. The Board Places on record its appreciation for the valuable service rendered by Sri Naresh Saluja during his tenure as Director. In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company Shri Dharmesh S. Keswani and Shri Santosh P. Keswani Directors, retire by rotation and being eligible offer themselves for re-appointment. Directors Responsibility Statement Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with regard to Directors Responsibility Statement, it is hereby confirmed 1. That in the preparation of the annual accounts, the applicable accounting Standards have been followed along with proper explanation relating to material departures; 2. That the Directors have selected such accounting policies and applied them consistently and made judgdements and estimates that were responsible 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 profit or loss of the Company for the year under review; 3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, and for preventing and detecting fraud and other irregularities and; 4. That the Directors have prepared the annual accounts for the financial year ended 31st March 2003 on a going concern basis. Fixed Deposit During the year under reference, the Company has not invited and/ or accepted any Fixed Deposit from the Public. There is no unclaimed and/or unpaid deposits lying with the Company. Auditors : M/s Rohit Chandan & Co., Chartered Accountants hold office of the Auditors of the Company until the conclusion of the ensuing Annual General Meeting. However, they have expressed their inability to continue in the office and have resigned as Auditors of the Company. Special Notice from a Member of the Company has been received for appointment of M/s Kamal & Associates, Chartered Accountants as Auditors of the Company. They being eligible for appointment, the Directors recommend and request the members to appoint them as Auditors and fix their remuneration. Corporate Governance: Your Company is unable to comply with the Corporate Governance Code as stipulated under Listing Agreement with the Stock Exchange as the sufficient number of representative directors is not available on the board. However. The Company is in the process of complying with the norms at the earliest opportune time. Dematerialization of Shares The Companys shares are traded compulsorily in dematerialized from. In this connection, the Company has already entered into agreement with National Securities Depository Limited (NSDL) and Central Depository Service (India) Limited (CDSL) and the Companys ID is INE 396E01016. The member are requested to dematerialize their physical holding in view of various advantages of holding the shares in dematerialize from Particulars of Employees None if the employee of the Company is covered under the provisions of Section 217 (2A) of the Companies Act, 1956. Particulars of energy conservation, technology absorption, foreign exchange earnings and outgo Information in accordance with the provision of Section 217 (1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in the Annexure forming part of this report. Industrial Relations Industrial Relation continues of be cordial. The Board wishes to take on record its appreciation to the entire workforce for their commendable teamwork commitment and contribution during the year. Acknowledgement Your Director would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institution including IFCI, IDBI, UTI, Syndicate Bank, various Government Departments, Suppliers and Customers for their valuable support during the year under review. By Order of the Board of Director Dharmesh S. Keswan Executive Director Mumbai Dated : 8th day of September, 2003 ANNEXURE TO THE DIRECTORS REPORT Information pursuant to Section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988. Conservation of Energy The Company has adopted various measure to conserve energy thereby achieved reduction the cost of production. The Companys own Technical staff have identified future areas of energy reduction and based on their recommendation the Company has engaged the service of professionals, who are trained and expert in energy/fuel oil conservation In yarn Texturising, Twisting and Dyeing plant. Details regarding the present energy consumption including captive generation are furnished in Annexure Form A as per the requirements of the Companies (Disclosure of particulars in the report to Board of Directors) Rules, 1988. A. Power and Fuel Consumption PARTICULARS Current Year Previous Year 1. Electricity a. Purchased Units 385064 2951872 Total Amount (Rs.) 2016415 9395025 Rate Unit (Rs.) 5.25 3.18 b. Own Generation N.A. N.A. 2. Furnace Oil Quantity (Ltrs.) 231010 86065 Total Amount (Rs.) 4619382 1085104 Average Rate (Rs.) 19.99 12.61 B. Consumption Per Unit of Production Production Yarn (Kgs) 4512110 5608377 Electricity (Units) 0.09 0.53 Furnace Oil (Ltrs.) 0.05 0.02 Technology Absorption A. Research and Development i) Specific Areas in which R & D carried out by the Company. a) Study of process Parameters b) Studies experiments and reduction of wastage of yarn through better handling of raw materials and doffing system. c) Hose knitting and dyeing of polyester yarn for controlling shade variations. d) Development of Centrifugal System for Yarn Dyeing, which reduces cost of dyeing. e) Development of many new shades suitable for domestic/export market. ii) Benefits derived as a result of above R &D ; a) Quality Upgradation b) Cost Reduction c) Energy Savings iii) Future Plan of Action Continuous efforts to improve quality and reduce cost. iv) Expenditure on R &D: PARTUCLUARS Current Year Previous Year a) Capital NIL NIL b) Recurring 342156 214852 c) Total 342156 214852 Total R & D Expenditure as percentage of 0.05% 0.04% B) Technology Absorption i) Efforts made towards technology absorption, and innovation and benefits derived as a result thereof: a) The Companys own Technical staff has experimented a studied Centrifugal Technology, which results in saving power. b) The Company experimented new winding Technology, which reduces cost of winding. ii) Details of Imported Technology: Not Applicable iii) Foreign exchange Earnings and outgo: There was no foreign exchange earning during the year. The total Foreign exchange outgo during the year was of Rs. 2,63,612/-