Mar 31, 2010
The Directors have pleasure in presenting the 11 Annual Report of the Company together with the Audited Statements of Account for the year ended March 31, 2010.
The Financial position of the Company as on the date of the Balance Sheet is as follows: (Rs. in Lacs,)
Particulars Year ended Year ended
March 31, 2010 March 31, 2009
Sales & Operating Income 43,059.71 50,446.51
Operating Profits (PBDIT) 489.13 9,452.78
Less: Depreciation 747.39 681.63
Less: Interest 7,782.12 6,453.84
Profit / (Loss) before Tax (8,040.38) 2,317.31
Less: Income Tax (2,741.67) 847.02
(Including Deferred Tax and Fringe Benefit Tax)
Net Profit / (Loss) for the year (5,298.71) 1,470.29
Balance brought forward from previous year 8,477.89 7,073.49
Less/Add: Prior Period Adjustments 47.27 (5.89)
Less: Statutory Reserves 0.00 0.00
Distributable Profits 3,226.45 8,537.89
Appropriated as under:
Transfer to General Reserve 0.00 60.00
Balance carried forward 3,226.45 8,477.89
DIVIDEND AND BOOK CLOSURE
In view of the loss for the current year, the Board does not recommend any dividend for the year under review. The Register of members and the Share Transfer Books of the Company shall remain closed from Tuesday, September 21, 2010 to Thursday, September 30, 2009 (both days inclusive) as per the requirements of Clause 16 of the Listing Agreements with Stock Exchanges.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis, forming part of this report, as required under Clause 49(IV)(F) of the Listing Agreement with the stock exchanges is attached separately in this Annual Report.
The ratings assigned to Company by Credit Analysis and Research Limited (CARE) during the previous year as CARE B for its long term bank facilities and PR4 for its short term debt were suspended during the year. At present the Company does not have any external ratings assigned.
MATERIAL CHANGES AND EVENTS AFTER BALANCE SHEET DATE
As mentioned in Note no. 11 of Schedule 19(B), due to cash loss and delay in recovery of dues from the customers, the Company faced a cash crunch resulting into default in payment to lenders and other creditors. The Company had submitted a Corporate Debt Restructuring (CDR) proposal to CDR Cell of Reserve Bank of India, seeking extension of time for repayment & seeking certain other concessions. The proposal was admitted by CDR cell on March 30, 2010. The requisite number of banks have communicated their consent to CDR cell for approval of the proposal. Order of CDR cell approving the proposal and making it effective would be received in due course of time.
The operations of the Company have severely been affected due to a substantial number of marketing personnel leaving the job. The Company is taking steps to restore the position post CDR approval.
BOARD OF DIRECTORS
The Board of Directors at its meeting held on June 09, 2010 recommended the reappointment of Mr. Santosh Dhankude and Mr. Nandkishor Lahoti, Directors of the Company who are liable to retire by rotation during the^year and being eligible have offered themselves for reappointment. The Board seek your approval for their re- appointments.
On April 18, 2010 Mr. Vitthal M. Bachal, an independent Director resigned as Director. The Company places its appreciations towards the contributions made by him in the development of the company during his tenure as Director.
Brief particulars & expertise of the directors to be appointed/re-appointed and their other directorship and committee membership have been given in the Corporate Governance report as attached to this Directors Report.
None of the Directors of the Company is disqualified to be appointed as Director under the provisions of Section 274(1 )(g) of the Companies Act, 1956. The Directors have made necessary disclosures, as required under various provisions of the Act and Clause 49 of the Listing Agreement with Stock Exchange/s.
As required by Clause 49 of the listing agreement with the stock exchange, a separate report on Corporate Governance forms part of the Annual Report. A report from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance is also a part of this Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 217(2AA) of the Companies Act, 1956 in relation to the Financial Statements for the year ended March 31,2010, the Board of Directors state that:
a) the applicable Accounting Standards have been followed in the preparation of the financial statements and there are no material departures from the said standards;
b) reasonable and prudent accounting policies have been used in preparation of the financial statements and that they have been consistently applied, so as to give true and fair view of the state of affairs of the Company as at March 31,2010 and of the loss for the year ended on that date;
c) 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) the financial statements have been prepared on a going concern basis since they are confident of successful implementation of approved CDR proposal and successful settlement with the parties issuing notices under section 433 & 434 of the Companies Act, 1956.
M/s Jayant V. Kolapkar & Co., Chartered Accountants and M/s Shashank Patki & Associates, Chartered Accountants, were appointed as the Joint Auditors of the Company at the previous Annual General Meeting. However, M/s Jayant V. Kolapkar & Co., Chartered Accountants resigned on November 4, 2009. M/s Shashank Patki & Associates, Chartered Accountants retire at the ensuing Annual General Meeting and are eligible for re-appointment as Auditors. The Audit Committee at its meeting held on August 31,2010 has recommended their re-appointment.
In terms of the provisions of section 224 (1B) of the Companies Act, 1956 M/s Shashank Patki & Associates, Chartered Accountants have furnished a certificate that their appointment, if made, will be within the limits prescribed under section 224 (1B) of the Companies Act, 1956.
AUDITORS REPORT (QUALIFICATIONS/ COMMENTS)
As mentioned in para 2(f) of the Auditors Report and in para 4,9(a), 11 and 16 of the Annexure to the AuditorsReport
As mentioned in the Notes on Account, the Company incurred cash loss during the year. Also, the Company could not recover dues from its customers. Due to this, the Company defaulted in payment of interest and instalments to lenders, dues to the Creditors, Statutory dues^tc. As mentioned earlier in this Directors Report, CDR proposal submitted by the Company (which envisages regularization of Term Loans, extension of time for repayment of dues etc.) is in process of final approval. The Company is taking steps to strengthen the overall internal control procedures. The Company is in negotiations with the parties issuing notices under section 433 and 434 of the Companies Act, 1956 for withdrawal of the notices. Post CDR approval, the management is confident of regularizing all the aspects qualified by the Auditors.
The details of the Audit Committee are given in the Corporate Governance Report as attached separately in this Annual Report.
During the year under review, the Company has not accepted any deposits under Section 58A of the Companies Act, 1956.
EMPLOYEES STOCK OPTIONS
The Company has not issued / granted any Employees stock options to its employees.
PARTICULARS OF EMPLOYEES
The annexure containing information required under the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975 forms part of this report. However, as permitted by section 219(l)(b)(iv) of the Companies Act, 1956, this Annual Report is being sent to all shareholders excluding the said Annexure. Any shareholder interested in obtaining the particulars may obtain it by writing to the Company Secretary, at the Registered Office of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO
A statement containing the necessary information required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed to this report as Annexure I.
BUY BACK OF SHARES:
The Company has not done any Buy Back of Shares during the year under review.
Your Directors appreciate the trust reposed by various stakeholders of the Company. The Directors are also grateful and pleased to place on record their appreciation for the continuous and excellent support, guidance and cooperation extended by the Companys Business Associates, Registrar & Transfer Agent, Bankers, Financial Institutions, various Government Regulatory Bodies, Stock Exchanges, Depositories, and Employees.
For & On Behalf of the Board of Directors
Place: Pune Nitin Sontakke
Date: August31, 2010 Chairman & Managing Director