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Directors Report of Abhishek Corporation Ltd.

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting their 21th Annual Report for the year ended on 31st March 2014.

Financial Results:

The performance of the Company for the financial year ended March 31, 2014 is summarized below: in lacs PARTICULARS 2013-14 2012-13

Total Income 2249.47 2594.75

Usual Working Expenses 3580.77 3551.66

Gross Profit/(Loss)before Interest (1331.30) (956.91) and Depreciation

Less: Interest 5342.90 4186.64

Depreciation 1497.46 1503.65

Profit /(Loss)Before Tax (8171.66) (6647.20)

Less: Provision for Current Tax - -

Provision for Deferred Tax - -

Provision for Fringe Benefit Tax - -

Profit /(Loss)After Tax before Extra Ordinary & Exceptional Items (8171.66) (6647.20)

Less : Exceptional Items - -

Profit /(Loss)After Tax & After Extra Ordinary Items (8171.66) (6647.20)

before Exceptional Items

Add : Extra Ordinary Items - -

Profit /(Loss)After Tax & After Extra Ordinary & Exceptional Items (8171.66) (6647.20)

Add : Balance brought forward from last Year - -

Balance Transferred to Balance Sheet (8171.66) (6647.20)

Results of Operations

During the year under review sale has been reduced to Rs. 2241.75 lacs from Rs. 2587.50 Lacs. Company has started receiving orders gradually. But still orders are very less comparing to production capacity of the Company. Management is constantly focused on marketing. Due to lack of funds and lower orders the growth in Company''s sale is restricted.

Company has not been able to sale the Fabric of Premium Quality due to lack of demand. Premium quality fabric gives higher margins. Under utilization of capacity accompanied with higher debt cost, lower margins have resulted into the loss of Rs. 8171.66 lacs (before Extra Ordinary Item) as against the net loss of Rs. 6647.20 Lacs in previous year.

Dividend:

During the year under review the Company has not earned profit hence your Board of Directors'' do not recommend any dividend for the year.

Fixed Deposits

During the year under review the Company has not raised any amount by way of Fixed Deposits.

Industrial Relations

During the year, industrial relations have been cordial.

Directors

In accordance with the provision of section 152 of Company Act, 2013 read with Companies (Management & Administration) Rules, 2014 Mrs. Rama Jawahar Swetta, Director of the Company retires by rotation and being eligible, has offered herself for reappointment at the ensuing Annual General Meeting.

In terms of provision of Section 149 & 152 of Companies Act 2013 which become effective from 1st April 2014, an Independent Director of a Company can be appointed for a term of five consecutive years and shall not be liable to retired by rotation.

To comply with above provision it is proposed to appoint Mr. Dhananjay Charane, Mr. Manohar Dudhane as Independent Director of the Company for a period up to 31st March 2016 who shall not be liable to retire by rotation. Your board recommends their appointments.

The Company has received declaration from all the Independent Directors of the Company conforming that they meet the criteria of Independence as prescribed both under sub-sec. 149 of the Companies Act, 2013 and under clause 49 of the listing agreement with the stock exchange.

During the year Mr. Abhishek Mohite, Mr. Yashawant Shilalkar, Mr. Manohar Kanitkar has resigned from their post of Director and Mr. Manohar Dudhane was appointed as an Independent Director.

Corporate Governance

In order to maintain high standards of Corporate Governance and to be complied with the provisions of clause 49 of Listing Agreement the Company has formed following committees :

I. Audit Committee: The primary objective of Audit Committee is to monitor and effectively supervise the Company''s financial reporting process with a view to provide accurate, timely and proper disclosures and to maintain integrity and quality of financial reporting. Its Constitution, activities of this committee has been elaborated in the report of Corporate Governance. Report on Corporate Governance along with Auditors Certificate on Compliance with the conditions of Corporate Governance as stipulated in clause 49 of listing agreement is provided elsewhere in the Annual Report.

II. Share Transfer and Investor Grievance Committee : The Board of Directors'' has constituted "Share Transfer and Investor Grievance Committee" to look after all the works relating to shares and shareholders grievance i.e., approval of transfer/transmission/demat/remat of shares, issue of duplicate, split-up, consolidation, renewal of share certificate, non receipt of balance sheet, non receipt of declared dividends etc. Its constitution and activities have been elaborated in the report of Corporate Governance.

III. Remuneration Committee : The Board of Directors has constituted "Remuneration Committee" to decide and approve the terms and conditions for appointment of Executive Directors of the Company and remuneration payable to other Directors and Executives of the Company and other matters related thereto. Its constitution, activities of this committee have been elaborated in the report of Corporate Governance.

Auditors Qualification In Audit Report

Regarding the qualification of Auditor in Audit report, Directors'' state as under

Point No. [ix] a) & b) : Due to low turnover, lower capacity utilization with higher debt cost the Company is facing liquidity problem and hence there is non - payment of statutory dues in time. The Company is taking necessary steps to pay off its statutory dues.

Point No. [x] : Due to lower capacity utilization, higher debt cost and lower margin the Company has incurred cash loss of Rs. 6674.22 lacs.

Point No. [xi] : The lower sale and high fixed cost has adversely affected the liquidity/cash flows of the Company resulting into delay in payment of Interest/Installments to Banks. The Company is exploring different ways of reducing the debt burden.

Directors'' Responsibility Statement

Pursuant to requirement in respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i. In preparation of the annual audited accounts, the applicable accounting standards have been followed as per the requirement set out under Schedule VI of the Company Act, 1956 and that there are no material departures from the same;

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 March 31, 2014 and of the Loss of the Company for the year ended 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 for preventing and detecting fraud and other irregularities; and

iv. The Directors have prepared the annual accounts of the Company on a ''Going Concern'' basis.

Particulars of Employees

As per the Statement of Particulars of Employees required U/S 217(2A) Of the Company Act 1956 read with the Companies (particulars of employees)Rules 1975, limit of salary, increased up to Rs. 60 Lacs p.a., so this becomes inapplicable to our Company.

Auditors

M/s. Shrikant & Co., Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of ensuing Annual General Meeting and being eligible offered themselves for reappointment as per the section 141 of Companies Act 2013.

Members are requested to consider their reappointment and fix their remuneration.

Acknowledgment

Your Directors would like to express their grateful appreciation for assistance and co-operation received from Banks, Government Authorities, Customers, Vendors and Members during the year under review.

Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives, Staff and Workers of the Company.

For and on behalf of Board of Directors

Date : 14th August, 2014 Anasaheb R Mohite Place : Kolhapur Chairman & Managing Director (DIN : 00317676)


Mar 31, 2013

The Directors have pleasure in presenting the 20th Annual Report for the year ended on 31st March 2013. Financial Results: The performance of the company for the financial year-ended March 31, 2013 is summarized below:

(Rs. in Lacs) Particulars 2012-13 2011-12

Total Income 2594.75 2115.92

Usual Working Expenses 3551.66 3515.62

Gross Profit/(Loss)before Interest and Depreciation (956.91) (1399.70)

Less: Interest 4186.64 5132.89

Depreciation 1503.65 1571.94

Profit/(Loss)Before Tax (6647.20) (8104.53)

Less: Provision for Current Tax

Provision for Deferred Tax

Provision for Fringe Benefit Tax Profit /(Loss)After Tax before Extra Ordinary and Exceptional Items (6647.20) (8104.53)

Less: Exceptional Items

Profit /(Loss)After Tax & After Extra Ordinary Items before (6647.20) (8104.53)

Exceptional Items Add: Extra Ordinary Items

Profit /(Loss)After Tax & After Extra Ordinary & Exceptional Items (6647.20) (8104.53)

Add: Balance brought forwar from last Year

Balance Transferred to Balance Sheet (6647.20) (8104.53)

Results of Operations

During the year under review sale has been increased by 22.81% from Rs. 2106.59 Lacs in previous year to Rs. 2587.07 Lacs in the current year. Company has started receiving orders gradually. But still orders are very less comparing to production capacity of the company. Management is constantly focused on marketing. Due to lack of funds and lower orders the growth in Company''s sale is restricted.

Company has not been able to sale the Fabric of Premium Quality due to lack of demand. Premium quality fabric gives higher margins. Under utilization of capacity accompanied with higher debt cost, lower margins have resulted into the loss of Rs. 6647.20 Lacs (before Extra Ordinary Item) as against the net loss of Rs. 8104.53 Lacs in previous year.

Dividend:

During the year under review the company has not earned profit hence your Board of Directors'' do not recommend any dividend for the year.

Fixed Deposits

During the year under review the company has not raised any amount by way of Fixed Deposits.

Industrial Relations

During the year, industrial relations have been cordial

Directors

Mr. Ravi Yashwant Shiralkar, Director of the Company retires by rotation and being eligible, has offered himself for reappointment at the ensuing Annual General Meeting.

Board recommends above appointments.

Corporate Governance

In order to maintain high standards of Corporate Governance and to be complied with the provisions of clause 49 of Listing Agreement the company has formed following committees.

I. Audit Committee: The primary objective of Audit Committee is to monitor and effectively supervise the company''s financial reporting process with a view to provide accurate, timely and proper disclosures and to maintain integrity and quality of financial reporting. Its Constitution, activities of this committee has been elaborated in the report of Corporate Governance. Report on Corporate Governance along with Auditors certificate on compliance with the conditions of Corporate Governance as stipulated in clause 49 of listing agreement is provided elsewhere in the Annual Report.

II. Share Transfer and Investor Grievance Committee: The Board of Directors'' has constituted "Share Transfer and Investor Grievance Committee" to look after all the works relating to shares and shareholders grievance, i.e., approval of transfer/transmission/demat/remat of shares, issue of duplicate, split-up, consolidation, renewal of share certificate, non receipt of balance sheet, non receipt of declared dividends etc. Its constitution and activities have been elaborated in the report of Corporate Governance

III. Remuneration Committee: The Board of Directors has constituted "Remuneration Committee" to decide and approve the terms and conditions for appointment of Executive Directors of the Company and remuneration payable to other Directors and Executives of the Company and other matters related thereto. Its constitution, activities of this committee have been elaborated in the report of Corporate Governance

Auditors Qualification In Audit Report

Regarding the qualification of Auditor in Audit report, Directors'' state as under

Point No. ix a) & b) Due to low turnover, lower capacity utilization with higher debt cost the company is facing liquidity problem and hence there is non - payment of statutory dues in time. The company is taking necessary steps to pay off its statutory dues.

Point No. x : Due to lower capacity utilization, higher debt cost and lower margin the company has incurred cash loss of Rs. 5143.55 Lacs.

Point No. xi: The lower sale and high fixed cost has adversely affected the liquidity/cash flows of the company resulting into delay in payment of Interest/Installments to Banks. The company is exploring different ways of reducing the debt burden.

Directors'' Responsibility Statement

Pursuant to requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i. In preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures from the same;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the Loss of the Company for the year ended 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 for preventing and detecting fraud and other irregularities; and

iv. The Directors have prepared the annual accounts of the Company on a ''Going Concern'' basis.

Particulars of Employees

Present limit of salary, increased up to Rs. 60 Lacs p.a., so this becomes inapplicable to our Company.

Auditors

M/s. Shrikant & Co., Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of ensuing Annual General Meeting and being eligible offered themselves for reappointment.

The company has received letter from M/s. Shrikant & Co. to the effect that their reappointment if made would be within prescribed limits under section 224 (IB) of the Companies Act, 1956 and that they are not disqualified for such reappointment within the meaning of section 226 of the said Act.

Members are requested to consider their reappointment and fix their remuneration. Acknowledgement

Your Directors would like to express their grateful appreciation for assistance and co-operation received from Banks, Government Authorities, Customers, Vendors and Members during the year under review.

Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives, Staff and Workers of the company.

For and on Behalf of the Board of Directors

Anasaheb R Mohite

Chairman & Managing Director Kolhapur

August 26, 2013


Mar 31, 2012

The Directors have pleasure in presenting the 19th Annual Report for the year ended on 31st March 2012. Financial Results:

The performance of the company for the financial year ended March 31, 2012 is summarized below:

(Rs. in Lacs)

Particulars 2011-12 2010-11

Total Income 2115.92 4968.33

Usual Working Expenses 3515.62 8444.09

Gross Profit/(Loss)before Interest and Depreciation (1399.70) (3475.76)

Less: Interest 5132.89 1933.44

Depreciation 1571.94 1574.58

Profit/(Loss)Before Tax (8104.53) (6983.78)

Less: Provision for Current Tax - -

Provision for Deferred Tax - -

Provision for Fringe Benefit Tax - -

Profit /(Loss)After Tax before Extra Ordinary and Exceptional Items (8104.53) (6983.78)

Less: Exceptional Items - -

Profit /(Loss)After Tax & After Extra Ordinary Items before (8104.53) (6983.78)

Exceptional Items Add: Extra Ordinary Items - 4.01

Profit /(Loss)After Tax & After Extra Ordinary & Exceptional Items (8104.53) (6979.77)

Add: Balance brought forward from last Year - -

Balance Transferred to Balance Sheet (8104.53) (6979.77)

Results of Operations

During the year under review sale has been decreased by 57.53% from Rs. 4959.83 Lacs in previous year to Rs. 2106.59 Lacs in the current year. Company has started receiving orders gradually. But still orders are very less comparing to production capacity of the company. Management is constantly focused on marketing. Due to lack of funds and lower orders Company's sale is decreasing as compared to previous year.

Company has not been able to sale the Fabric of Premium Quality due to lack of demand. Premium quality fabric gives higher margins. Under utilization of capacity accompanied with higher debt cost, lower margins have resulted into the loss of Rs. 8104.53 Lacs (before Extra Ordinary Item) as against the net loss of Rs. 6979.77 Lacs in previous year.

Dividend:

During the year under review the company has not earned profit hence your Board of Directors' do not recommend any dividend for the year.

Fixed Deposits

During the year under review the company has not raised any amount by way of Fixed Deposits.

Industrial Relations

During the year, industrial relations have been cordial

Directors

Mr. Abhishek Anasaheb Mohite, Director of the Company retires by rotation and being eligible, has offered himself for reappointment at the ensuing Annual General Meeting.

Board recommends above appointments.

Corporate Governance

In order to maintain high standards of Corporate Governance and to be complied with the provisions of clause 49 of Listing Agreement the company has formed following committees.

I. Audit Committee: The primary objective of Audit Committee is to monitor and effectively supervise the company's financial reporting process with a view to provide accurate, timely and proper disclosures and to maintain integrity and quality of financial reporting. Its Constitution, activities of this committee has been elaborated in the report of Corporate Governance. Report on Corporate Governance along with Auditors certificate on compliance with the conditions of Corporate Governance as stipulated in clause 49 of listing agreement is provided elsewhere in the Annual Report.

II. Share Transfer and Investor Grievance Committee: The Board of Directors' has constituted "Share Transfer and Investor Grievance Committee" to look after all the works relating to shares and shareholders grievance, i.e., approval of transfer/transmission/demat/remat of shares, issue of duplicate, split-up, consolidation, renewal of share certificate, non receipt of balance sheet, non receipt of declared dividends etc. Its constitution and activities have been elaborated in the report of Corporate Governance

III. Remuneration Committee: The Board of Directors has constituted "Remuneration Committee" to decide and approve the terms and conditions for appointment of Executive Directors of the Company and remuneration payable to other Directors and Executives of the Company and other matters related thereto. Its constitution, activities of this committee have been elaborated in the report of Corporate Governance

Auditors Qualification

- In Audit Report

Regarding the qualification of Auditor in Audit report, Directors' state as under

Point No. ix a) & b) Due to low turnover, lower capacity utilization with higher debt cost the company is facing liquidity problem and hence there is non - payment of statutory dues in time. The company is taking necessary steps to pay off its statutory dues.

Point No. x: Due to lower capacity utilization, higher debt cost and lower margin the company has incurred cash loss of Rs. 6532.59 Lacs.

Point No. xi: The lower sale and high fixed cost has adversely affected the liquidity/cash flows of the company resulting into delay in payment of Interest/Installments to Banks. The company is exploring different ways of reducing the debt burden.

Directors' Responsibility Statement

Pursuant to requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is hereby confirmed that:

i. In preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures from the same;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the Loss of the Company for the year ended 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 for preventing and detecting fraud and other irregularities; and

iv. The Directors have prepared the annual accounts of the Company on a 'Going Concern' basis.

Particulars of Employees

Present limit of salary, increased up to Rs. 60 Lacs p.a., so this becomes inapplicable to our Company.

Auditors

M/s. P. M Vardhe and Co., Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of ensuing Annual General Meeting and being eligible offered themselves for reappointment.

The company has received letter from M/s. P. M. Vardhe & Co. to the effect that their reappointment if made would be within prescribed limits under section 224 (IB) of the Companies Act, 1956 and that they are not disqualified for such reappointment witfrfn the meaning of section 226 of the said Act.

Members are requested to consider their reappointment and fix their remuneration.

Acknowledgement

Your Directors would like to express their grateful appreciation for assistance and co-operation received from Banks, Government Authorities, Customers, Vendors and Members during the year under review.

Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives, Staff and Workers of the company.

For and on Behalf of the Board of Directors

Abhishek A. Mohite

July 4,2012 Director (Marketing & Strategy)


Mar 31, 2010

The Directors have pleasure in presenting the 17lh Annual Report for the year ended on 31 st March 2010.

Financial Results:

The performance of the company for the financial year ended March 31, 2010 is summarized below:

(Rs. in Lacs)

Particulars 2009-10 2008-09

Total Income 4043.37 2395.25

Usual Working Expenses 4108.97 885.63

Gross Profit/(Loss)before Interest and Depreciation (65.60) 1509.62

Less:Interest 2236.89 1267.59

Depreciation 1436.56 1126.83

Profit Before Tax (3739.05) (884.80)

Less: Provision for Current Tax - -

Provision for Deferred Tax - 389.48

Provision for Fringe Benefit Tax - 3.78

Profit After Tax before Extra Ordinary Items (3739.05) (1278.06)

Add: Extra Ordinary Items 493.28 -

Profit After Tax & After Extra Ordinary Items (3245.77)

Add: Balance brought forward from last Year 3459.53 4737.59

Balance Transferred to Balance Sheet 213.76 3459.53



Results of Operations

During the year under review sale has been increased by 67.60% from Rs. 2378.09 Lacs in previous year to Rs. 3985.71 Lacs in the current year. Though the foreign markets are showing sign of recovery but still there is brunt of post recession phase. Company has started receiving orders gradually. Management is constantly focused on marketing. Due to this only Company has made higher sale as compared to previous year. However current order position is inadequate vis a vis capacity of the Company.

Though the sale has been increased but still Company has not been able to sale the Fabric of Premium Quality due to lack of demand. Premium quality fabric gives higher margins. Under utilization of capacity accompanied with higher debt cost, lower margins have resulted into the loss of Rs. 3739.05 Lacs (before Extra Ordinary Item) as against the net loss of Rs. 1278.06 Lacs in previous year.

Dividend:

During the year under review the company has not earned profit hence your Board of Directors do not recommend any dividend for the year.

Changes in Capital Structure

Reclassification of Authorised Capital of the Company

In terms of approval of members at the Extra Ordinary General Meeting held on March 15, 2010 the company has reclassified its previous Authorized Capital of the company of Rs. 24,00,00,000/- (Rupees Twenty Four Crores Only) divided into 1,50,00,000 (One Crore Fifty Lacs) Equity shares of Rs. 10/- (Rupees Ten Only) each and 90,00,000 (Ninety Lacs) 6% Non Cumulative Redeemable Preference Shares of Rs. 10/-(Rupees Ten Only) each into 24,00,00,000/ (Rupees Twenty Four Crores Only) divided into 2,40,00,000 (Two Crores Forty Lacs) Equity shares of Rs. 10/- (Rupees Ten Only) each

Allotment of Equity Shares on Preferential Basis

In terms of approval of members at the Extra Ordinary General Meeting held on March 15, 2010 the company has allotted 20,00,000 Equity Shares of the face value Rs. 10/- each for cash at a price of Rs.25/- per share (including a premium of Rs.l5A per share) on preferential basis to Mrs Rama J. Swetta under chapter VII of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009

Fixed Deposits

During the year under review the company has not raised any amount by way of Fixed Deposits. As on March 31, 2010 no deposit or interest thereon is outstanding. During the year under review the company has repaid Deposit of Rs. 446.00 Lacs. Information, as required under the Miscellaneous Non-Banking Companies (Reserve Bank) Direc tions 1977, is annexed.

Industrial Relations

During the year, industrial relations have been cordial Directors

Shri. Ravi Y. Shiralkar, Director of the Company retire by rotation and being eligible, has offered himself for reappoint ment at the ensuing Annual General Meeting.

Shri. Shreedhar V. Padhye was appointed as a Director of the company on June 22, 2009 in the casual vacancy caused by the resignation of Mr. Shriprakash M. Dhopeshwarkar and whose term of office expires at this Annual General Meeting.

Mr. Manohar Kanitkar was appointed as an Additional Director of the company by Board with effect from May 17, 2010. His term of office expires at mis Annual General Meeting

Pursuant to section 257 (1) of the Act, the Company has received notices in writing from members along with a deposit of requisite fee proposing the candidature of Shri. Shreedhar V. Padhye & Shri. Manohar Kanitkar for the office of the Director of the company Board recommends above appointments.

Corporate Governance

In order to maintain high standards of Corporate Governance and to be complied with the provisions of clause 49 of Listing Agreement the company has formed following committees.

I. Audit Committee: The primary objective of Audit Committee is to monitor and effectively supervise the companys financial reporting process with a view to provide accurate, timely and proper disclosures and to maintain integrity and quality of financial reporting. Its Constitution, activities of this committee has been elaborated in the report of Corpo rate Governance. Report on Corporate Governance along with Auditors certificate on compliance with the conditions of Corporate Governance as stipulated in clause 49 of listing agreement is provided elsewhere in the Annual Report.

II.Share Transfer and Investor Grievance Committee: The Board of Directors has constituted "Share Transfer and Investor Grievance Committee" to look after all the works relating to shares and shareholders grievance, i.e., approval of transfer/transmission/demat/remat of shares, issue of duplicate, split-up, consolidation, renewal of share certifi cate, non receipt of balance sheet, non receipt of declared dividends etc. Its constitution and activities has been elaborated in the report of Corporate Governance

III. Remuneration Committee: The Board of Directors has constituted "Remuneration Committee" to decide and approve the terms and conditions for appointment of Executive Directors of the Company and remuneration payable to other Directors and Executives of the Company and other matters related thereto. Its constitution, activities of this committee has been elaborated in the report of Corporate Governance

Auditors Qualification

I. In Corporate Governance Certificate: As on March 31 2010 the Company complies with all the requirements of Clause 49 of Listing Agreement except provision regarding Board Composition. Pursuant to allotment of 20,00,000 shares on a preferential basis to Mrs. Rama J. Swetta on March 25, 2010, Mrs. Swetta has ceased to be independent "Director of the company from March 25, 2010. Due to this company did not comply with the requirement of having one-half of the Board of the company consists of Independent Directors. However on May 7, 2010 Mr. R. M. Mohite resigned from the Directorship of the Company. Also on May 17,2010 Board of Directors of the Company by circular resolution appointed Mr. Manohar Kanitkar, as an Additional Director of the Company. Due to these developments now (as on date of this report) the Company complies with all the provisions of Listing Agreement

II.In Audit Report

Regarding the qualification of Auditor in Audit report, Directors state as under

- Point No. ix a) & b) Due to low turnover, lower capacity utilization with higher debt cost the company is facing liquidity problem and hence there is non - payment of statutory dues in time.

- Point No. x: Due to lower capacity utilization, higher debt cost and lower margin the company has incurred loss of Rs. 3245.77Lacs. However majority portion of loss has been adjusted against previous years profits. After adjusting the loss of current year with previous Balance in Profit & Loss account still there is accumulated profit of Rs. 213.76 Lacs.

- Point No. xi: The lower sale and high fixed cost has adversely affected the liquidity/cash flows of the company resulting into delay in payment of Interest/Installments to Banks.

Directors Responsibility Statement

Pursuant to requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to Directors Responsi bility Statement, it is hereby confirmed that:

i. In preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures from the same;

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and esti mates that are reasonable and prudent so as give a true and fair view of the state of affairs of the Company as at March 31, 2010 and of the Loss of the Company for the year ended on that date.

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accor dance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

iv. The Directors have prepared the annual accounts of the Company on a Going Concern basis.

Particulars of Employees

As required under the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particu- lars of Employees) Rules 1975, as amended, the names and other particulars of employees are set out in the annexure included in this report.

Auditors

M/s. B. J. Ingrole and Co., Chartered Accountants, existing Statutory Auditors of the Company, have expressed in writing their unwillingness pursuant to section 224 (2) (b) of the Companies Act, 1956 for re-appointment as Auditors of the Company on their retirement at ensuing Annual General Meeting (AGM). Based on the recommendation of the Audit Committee, the Board of Directors of the Company proposed the appointment of M/S. Jaykumar D. Shetti & Co., Chartered Accountants, as the Auditors of the Company at the ensuing AGM.

M/S. Jaykumar D. Shetti & Co., have expressed their willingness to act as Auditors of the Company and, if appointed, have further confirmed that the said appointment would be in conformity with the provisions of Section 224 (IB) of the Companies Act, 1956

Members are requested to consider their reappointment and fix their remuneration.

Acknowledgement

Your Directors would like to express their grateful appreciation for assistance and co-operation received from Banks, Government Authorities, Customers, Vendors and Members during the year under review.

Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives, Staff and Workers of the company.

for and on Behalf of the Board of Directors

Kolhapur Anasaheb R Mohite May 27,2010 Chairman & Managing Director

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