thapar ispat ltd share price Directors report

THAPAR ISPAT LIMITED ANNUAL REPORT 2009-2010 DIRECTORS REPORT Dear Members, Thapar Ispat Limited The Directors present their Twenty First Annual Report and Audited Accounts for the year ended on 30th June, 2010. FINANCIAL RESULTS 2009-2010 2008-2009 (Rs.in Lacs) Turnover and other income 384.58 288.05 Profit/(Loss) before Dep. (5.46) (25.52) Less/Add: Depreciation 0.10 0.10 Net Profit/(Loss) after Dep. (5.47) (25.62) Profit/(Loss) brought forward (14711.15) (14685.52) Amount Written back on repayment of 2420.61 - Banks & Fixed Deposits Profit/(Loss) Carried over (12296.11) (14711.15) to Balance Sheet PERFORMANCE REVIEW Although the company has incurred losses during the year, the overall performance of the company has improved as is evident from reduced losses and increased turnover. The Directors of your company are continuously taking necessary steps to reduce costs and expenses. Your directors are hopeful that the company will do better in years to come. STATUS OF REFERENCE TO THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION: The references had been made before BIFR by the company under Section 15 (1) of SICA based on the accounts for the year 2000-2001 to 2008-2009 since the net worth of the company was entirely eroded. But the same have been turned down by the Honble BIFR (Board for Industrial and Financial Reconstruction) as non- maintainable. The company has made an appeal against this order before Honble AAIFR (Appellate Authority for Industrial and Financial Reconstruction). Your directors are very positive on this front and are doing their best to get the matter redressed at the earliest. EXPORTS During the year Exports Sales of the company was NIL. DIVIDEND Your directors regret their inability to recommend any dividend on shares due to non availability of profits. FIXED DEPOSITS During the year, the company has not accepted any new deposits from the public falling within the perview of Section 58 A of the Companies Act, 1956 and the rules made there under. DIRECTORS In accordance with the provisions of the Articles of Association of the Company and the Companies Act, 1956 Sh. Bhag Singh, Director retires by rotation and being eligible offers himself for reappointment. AUDITORS M/s.Vimal Dixit & Associates, Chartered Accountants holds office up to the conclusion of the forthcoming Annual General Meeting. M/s. Vimal Dixit & Associates, Chartered Accountants are eligible for reappointment and the Board of Directors has recommended for their appointment as statutory auditors for the year July- 2010 to June-2011. PARTICULARS OF EMPLOYEES Information pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended up to date is NIL. PARTICULARS U/S217(I)(e) In terms of Section 217(I)(e) of the Companies Act, 1956 (as amended)read with the Companies (Disclosure of Particulars in the Report of the Board of Directors)RuIes, 1988, the Directors furnish herein below the required additional information: 1. CONSERVATION OF ENERGY a) Energy conservation measures taken: The Company has an on-going study to identify and implement the energy saving systems. In the existing plants various energy saving devices have been installed to achieve reduction of energy inputs. b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: The Company has schemes in hand for investments in energy saving devices. c) Impact of measures taken at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods: TOTAL ENERGY CONSUMPTION AND ENERGY CONSUMPTION PER UNIT OF PRODUCTION AS PER FORM A OF THE ANNEXURE IN RESPECT OF INDUSTRIES SPECIFIED IN THE SCHEDULE THERETO. A. POWER & FUEL CONSUMPTION 2009-2010 2008-2009 1. Electricity a) Purchased Units(in lacs) 0.33 0.23 Total Amount (Rs.in lacs) 1.63 1.01 Rate/Unit (Rs.) 5.00 4.40 b) Own Generation i) Through Diesel - - Generator - - Unit(in lacs) - - Unit per ltr of HSD - - ii) Through Steam I.Gen Unit (in lacs) Units P.Ton of Steam Cost/Unit(Rs.) - - 2. Coal (used for generation of steam in boiler) Qnty. (Tones) Total Cost (Rs.in lacs) Average Rate(Rs.) 3. Furnace Oil Qnty (M.Ts) - - Total Cost(Rs.in lacs) - - Average Rate(Rs.) - - B. Consumption per Unit of Product Electricity Units/Ton - For Steel Ingots - - - For Rolled Products - - - Furnace Oil KGS/Ton - - - For Steel Ingots - - - For Rolled Products - - II. TECHNOLOGY ABSORPTION Efforts made in Technology Absorption as per Form-B of the Annexure the Rules. 1. Research & Development (R&D) a) Specific area in which R&D carried out by the Company: Research and Development has continuously been carried out in general for improving quality of existing products,development of new and improved methods of production, processes for better productivity. b) Benefits derived as a result of the ABOVE R&D: As a result of R&D the quality of products has improved. c) Future Plan of Action: Development of new and improved products for better productivity, efficiency in production and reduction in cost per tone are planned. d) Expenditure on R & D: (Rs.in Lacs) Capital Nil Recurring Nil Total R&D Expenditure as a percentage of total turnover Nil 2. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION a) Efforts,in brief,made toward technology absorption None b) Benefits derived as a result of None the above efforts, e.g.product improvement, cost reduction, production development, import substitution etc. c) In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year)following information may be furnished. i) Technology Imported Not Applicable ii) Years of Import Not Applicable iii) Has technology been absorbed Not Applicable iv) If not fully absorbed,areas, Not Applicable where this has not taken place reasons thereof and future plan of action. III. FOREIGN EXCHANGE EARNINGS AND OUT-GO: i) Earnings: NIL ii) Outgo: NIL CORPORATE GOVERNANCE Your Directors affirm their commitments to the Corporate Governance standards prescribed by the Securities and Exchange Board of India (SEBI). A Report on Corporate Governance with Management Discussion and Analysis as required under Clause 49 of the Listing Agreement is attached. COMMENTS ON AUDITORS QUALIFICATION The company had made reference to Board for Industrial and Financial Reconstruction under Section 15 (1) of SICA. However, the same was turned down as non maintainable by BIFR. Now, the company has made an appeal to honble AAIFR(Appellate Authority for Industrial and Financial Reconstruction) in this regard. Being a sick industrial company, it was not able to make timely repayments to banks and other financial institutions. INDUSTRIAL RELATIONS Industrial relations remained peaceful and cordial at all levels during the year under review. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to section 217(AA) of Companies Act, 1956, the Directors confirm; (a) That in the preparation of the annual accounts, the applicable accounting standards have been followed and that no material departures have been made for the same; (b) That they have selected such accounting policies and applied hem 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 profit or loss of the company for the period; (c) That they 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 for preventing and detecting fraud and other irregularities. (d) That they have prepared the annual accounts on going concern basis. ACKNOWLEDGEMENT: The Board acknowledges with gratitude the co operation and assistance provided by all the business constituents. The Board wishes to place on record the contribution made by employees of the company during the year. Your Directors thanks the customers, clients , vendors, dealers, distributors and business associates for their continued support at all the levels. By order of the Board For THAPAR ISPAT LIMITED Sd/- Sd/- (Damanjit Singh) (Bhag Singh) Executive Director Director PLACE: LUDHIANA DATED: 03/12/2010 MANAGEMENT DISCUSSION & ANALYSIS REPORT INDUSTRIAL AND ECONOMIC SCENARIO The fiscal year 2009-2010 begin as a difficult one. There was a significant slowdown in the growth rate in the second half of 2008-09, following the worldwide financial crisis in 2007. The growth rate of GDP in 2008-09 was 6.7%. There was apprehension that this trend would persist for some time. The real turnaround came in the second quarter of 2009-2010 when the economy grew by 7.9% with the industrial sector growing at 8.2%. the broad based nature of recovery of the economy and huge internal consumption demand. However, since December 2009, there have been signs of some respite , the industrial and economic scenario in context of Steel sector seems to be fairly good. The signs of revival of infrastructure and construction make our sector even more lucrative and the one with high growth potential. THREATS, RISKS AND CONCERNS Steel industry is highly fragmented and competitive and increased competitive pressure may adversely affect the financial results. Significant increase in prices or shortage of raw material could affect the results of operations and financial conditions of the company. Any disruption in supply, may adversely affect the operation of the company. Any variation in demand of derived industries may adversely affect the demand of the products. Most of the raw materials are procured from local producers which involve logistic issues, economic decision making into ensuring optimum inventory. Rising prices of raw material is another obstacle. As steel industry is capital and labour intensive , it involves high power and fuel consumption , so any change in the cost of capital, labour, fuel and power may adversely affect the performance of the company. Any change in tax regime, financial policies and environmental regulations by Central as well as State Government, political instability at the Central or State level may affect the financial position of the company. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY Thapar Ispat Limited has a comprehensive internal control system equipped with qualified and experienced personal.. This ensures smooth corporate functioning and astute control of quality management within the overall work ethic of the company. Your companys internal control system ensures that all transactions are duly authorized, recorded and reported. Other than that the company has put in place well defined delegation of power with authority limits for approving revenue as well as capital expenditure. The company has an Audit Committee which regularly reviews the internal control systems. HUMAN RESOURCES/INDUSTRIAL RELATIONS The industrial relations climate in the company remained harmonious and peaceful during the year. The company has been taking initiatives for harnessing the inherent strengths of its employees, and for continuous improvement in work culture and operating and maintenance practices. CAUTIONARY STATEMENT Statement in the Directors Report and Management and Discussion Analysis describing the Companys objectives, projections, estimates and expectations may be forward looking statements*. Although we believe our expectations are based on reasonable assumptions, these forward looking statements may be influenced by numerous risks and uncertainties that could cause actual outcome and results to be materially different from those expressed or implied. Important factors that could influence the companys operations include economic developments within the country, demand and supply conditions in the industry, input prices, changes in government regulations , tax laws and other factors such as litigations and industrial relations. The company takes no responsibility for any consequences of decisions made based on such statements , and holds no obligation to update these in future. By order of the Board For THAPAR ISPAT LIMITED Sd/- Sd/- (Damanjit Singh) (Bhag Singh) Executive Director Director PLACE: LUDHIANA DATED: 03/12/2010