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Directors Report of Miven Machine Tools Ltd.

Mar 31, 2012

To The Members,

The Directors wish to submit their 27th Annual Report and Audited Accounts for the year ended 31st March, 2012.

(Rs. in lakh) Year ended Year ended FINANCIAL RESULTS: 31.03.2012 31.03.2011

Gross Income 932.94 624.50

Less : Excise Duty 79.63 52.90

853.31 571.60

Profit (Loss) Before

Interest & Depreciation 8.66 14.38

Interest 81.93 73.02

Depreciation 12.50 14.86

Net Profit/(Loss) (85.77) (73.50)

Charge on account of transitional provisions for Gratuity under Accounting Standard 15 - -

Loss brought forward (641.66) (568.16)

Deficit carried, to Balance Sheet (727.43) (641.66)

OPERATIONS :

During the year under review, your company achieved a turnover of Rs. 853.31 lakhs excluding Excise Duty as against previous year's turnover of Rs. 571.60 lakhs excluding Excise Duty and suffered a loss of Rs. 85.77' lakhs as against previous year's net loss of Rs. 73.50 lakh. Your company manufactured and dispatched 18 machines during the year under report as against 13 machines during the previous year.

Your company's order book position at the beginning of the year under report consisted of 24 machines for a value of Rs. 978.39 lakhs.

During the year, your company received orders for 9 machines for a value of Rs. 366.95 lakhs.

Though there is increase in the in-house manufacturing activity during the year under report, the material consumption has increased to 74.83% as compared to that of previous year of 71.76%

DEPOSIT:

During the year under report, the company has not accepted any deposits from the public.

DIVIDEND:

In view of the loss for the year and the unabsorbed accumulated losses of the earlier years, your directors regret their inability to recommend dividend for the year under report.

PROSPECTS:

Though the overall economic outlook is satisfactory, inflationary trends and slowdown in automobile and certain sectors of the engineering industry is noticeable, the company has an encouraging order book.

However, shortage of adequate working capital and high interest rates are areas of concern.

Your company has weathered a difficult year and is considering avenues for raising sufficient funds to meet its working capital requirements which will help improve its performance during the current year.

DIRECTORS RETIRING BY ROTATION:

Shyam Sirur, Director of the Company, retires by rotation and being eligible, offers himself for re-appointment.

Mukund Muley, Director of the company, retires by rotation and being eligible, offers himself for re- appointment.

A brief profile of Directors retiring by rotation is given below:

SHYAM SIRUR

Shyam Sirur (64) holds a degree in B.E. (Elect.). He has about 42 years of experience in the field of electronics. He is the Executive Chairman of Cotmac Electronics Pvt. Ltd., Director of Cotmac Pvt. Ltd., Cotmac Electronics (Surat) Pvt. Ltd., Cotmac Telecom Pvt. Ltd., Cotmac Infotech Pvt. Ltd., Sunny Weld Pvt. Ltd., Mipro International Pvt. Ltd., N.A. Sirur (Hubli) Pvt. Ltd., Cotmac Gastech Pvt. Ltd., Sibella Pvt. Ltd., Cotmac Synergy Pvt. Ltd., Softech Controls Pvt. Ltd., Sibella Technologies (Pvt.) Ltd., Cotmac Industrial Trading Pvt. Ltd., Cotmac Precision Casting Pvt. Ltd., and Cotmac DTM EXIM Pvt. Ltd. He is also the Chairman of the Remuneration Committee and member of the Audit Committee of the Company.

MUKUND MULEY

Mukund Muley (46) holds a degree in B.E. (Elect.). He has about 24 years of experience in the field of Electronics. He is Managing Director of Cotmac Electronics Pvt. Ltd., and Director of Cotmac Electronics (Surat) Pvt. Ltd., Cotmac Telecom Pvt. Ltd., Cotmac Infotech Pvt. Ltd., Cotmac Synergy Automation Pvt. Ltd., Cotmac Gastech Pvt. Ltd., Softek Controls Pvt. Ltd., Cotmac Clasitech Singapore Pte. Ltd., Cotmac Precision Casting Pvt. Ltd., and Cotmac DTM EXIM Pvt. Ltd., and Proprietor of M & M Floriculture; Prerana Industries (Nashik) and Symo Patterns (Nashik).

Mukund Muley is a member of the Remuneration Committee of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT:

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

1. That in the preparation of the annual accounts . for the financial year ended 31st March, 2012, the applicable accounting standards had been followed along with proper explanation relating to material departures.

2. That the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were 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 loss for the year under review.

3. That the Directors had 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.

4. That the Directors had prepared the accounts for the financial year ended 31st March, 2012, on a 'Going Concern' basis.

AUDITORS:

M/s. B.K. Ramadhyani and Company, Chartered Accountants, Bangalore, the auditors of the company, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. You are requested to appoint auditors for the current year and fix their remuneration.

DISCLOSURE WITH REGARD TO CONSERVATION OF ENERGY, TECHNOLOGY OUTGO, ETC.

Information as required under Section 217(1)(e) of the Companies Act, 1956, forms part of this report and is given as an Annexure.

EMPLOYEES:

During the year under review, there was no employee who was in receipt of a remuneration, which is in excess of Rs. 5,00,000 per month or Rs. 60,00,000 per annum, and hence the particulars of the employees as required in terms of Section 217(2A) of the Companies Act, 1956, are not given in the report.

CORPORATE GOVERNANCE PROVISIONS:

Pursuant to the provisions of Clause 49 of the Listing Agreement, the company has adopted the provisions relating to Corporate Governance Code. Your company has complied with all the mandatory requirements of the said Corporate Governance provisions. Corporate Governance Report is furnished separately and forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report as per requirements under Clause-V (A) of the Corporate Governance Provisions prescribed under Clause-49 of the Listing Agreement is furnished separately and forms part of this Report.

CEO/CFO CERTIFICATION:

As required under sub Clause (V) of Clause 49 of the Listing Agreement, the Company has obtained a certificate from A.R. Menon, Executive Director and S.G. Gadagkar, Unit Manager (Accounts), confirming compliance of the aforesaid clause.

CERTIFICATE OF COMPLIANCE OF CORPORATE GOVERNANCE:

Certificate of the Auditors confirming Compliance with the provisions of Corporate Governance forms a part of this Report.

EXPLANATIONS TO THE REMARKS IN THE AUDITOR'S REPORT: SI.No.4 (a)

Legal proceedings have been initiated for recovering an amount of Rs. 14.58 lakhs. The company has a strong case and is confident of being successful. In respect of the claims made by a customer of Rs. 73.49 lakhs, the company has been advised that the claim will not stand.

IN ANNEXURE TO THE REPORT:

Re. SI.No.2 (c): The company has subsequently received the confirmations from the concerned third parties for the materials lying with them. Consequently, there is no impact on the financial statements.

Re. Sl.No.3 (a): The delay in payment of interest on loan from Holding Company was due to financial constraints. The arrears will be settled in due course.

Re. SI.No.9 (a): The company faced severe working capital crunch during the year and certain statutory payments were delayed. All the statutory over-dues have since been-settled.

Re. SI.No.9 (b) and (c): Due to financial difficulties, the payment of Fringe Benefit Tax of Rs. 2,16,976/- has been delayed. Steps will be taken to clear the same. As fully explained in Note 20(v) of the financial statements for the year ended March 31, 2012, the entire subject of payment of property tax and penalty claimed by local authorities is disputed through the Greater Hubli-Dharwad Industries Association and the matter is pending before the Government of Karnataka.

Re. SI.No.17: The Company had obtained short term facilities for its working capital requirements. However, due to financial constraints, the repayment was delayed and the character of the borrowing has changed to long term investments.

INDUSTRIAL RELATIONS:

Industrial relations with the employees of the company remained cordial, stable and satisfactory during the year under review.

ACKNOWLEDGEMENT:

Your directors wish to place on record their appreciation of the assistance and support extended by the Bankers, Financial Institutions, State and Central Governments, Customers and Suppliers to the Company. Your directors express their appreciation for the dedicated and sincere services rendered by the employees of your Company.

For and on behalf of the Board

VIKRAM SIRUR Chairman

Place: PUNE Date : 13th August, 2012


Mar 31, 2010

The Directors wish to submit their 25th Annual Report on the Audited Accounts for the year ended 31st March, 2010

(Rs. in lakh)

Year ended Year ended

FINANCIAL RESULTS : 31.03.2010 31.03.2009

Gross Income 515.50 601.34

Less : Excise Duty 30.07 64.10

485.43 537.24

Profit (Loss) Before

Interest & Depreciation (9.18) (5.12)

Interest 69.53 66.53

Depreciation 16.51 18.98

Net Profit / (Loss) (95.22) (90.63)

Provision for Fringe Benefit tax - 3.20 Charge on account of transitional

provisions for Gratuity under

Accounting Standard-15 - (3.41)

Loss brought forward 472.94 382.51

Deficit carried to Balance Sheet 568.16 472.94

OPERATIONS :

During the year under review, your company achieved a turnover of Rs.485.43 lakh excluding Excise Duty as against previous years turnover of Rs.537.24 lakh excluding Excise Duty and suffered a loss of Rs.95.22 lakh as against previous years net loss of Rs.87.22 lakh. Your company manufactured and despatched 9 machines during the year under report as against 13 machines during the previous year.

Your companys order book position at the beginning of the year under report consisted of 3 machines for a value of Rs.193.30 lakh.

During the year, your company received orders for 9 machines for a value of Rs.409.38 lakh.

Though there is increase in in-house manufacturing activity during the year under report, the material consumption has increased to 63.09% as compared to that of previous year of 60-77%.

DEPOSIT :

During the year under report, the company has not accepted any deposits from the public.

DIVIDEND :

In view of the loss for the year and the unabsorbed accumulated losses of the earlier years, your directors regret their inability to recommend dividend for the year under report.

PROSPECTS :

The continued global slowdown during the year continued to badly affect the order position of the company. The emerging scenario, especially the performance of the indian economy in the first quarter of this fisical, gives hopes of improved orders booking, especially for the large sized machines, for which we enjoy a niche position. Your company has established sound market acceptability for its product as is evidenced by the Company receiving repeat orders from existing customers despite showing competition. However, the biggest handicap faced by the company relates to large working capital requirements coupled with delayed settlement of bills, especially by big customers.

Your company is hopeful that there would be improvement in the financial performance during the ensuing fiscal year.

DIRECTORS RETIRING BY ROTATION :

1. Mr. Mukund Muley, Independent Director of the company, retire by rotation and being eligible, offers himself for re-appointment.

2. Mr. A R Menon, Executive Director of the company, retire by rotation and being eligible, offers himself for re-appointment.

A brief profile of the directors retiring by rotation is given below:

Mr. MUKUND MULEY:

Mr. Mukund Muley (44) holds degree in B.E.(Elect). He has about 24 years of experience in the field of Electronics. He is Managing Director Cotmac Electronics Pvt. Ltd., Director of Cotmac Electronics (Surat) Pvt. Ltd., Cotmac Telecom Pvt. Ltd., Cotmac Infotech Pvt. Ltd., Cotmac Electronics (Bangalore) Pvt. Ltd., Cotmac Gastech Pvt. Ltd., Softek Controls Pvt. Ltd. and proprietor of M & M Floriculture; Mr. Mukund Muley is a member of Remuneration Committee of the Company.

MR. A R MENON:

Mr. A R Menon (60) holds degree in B.Sc. (Engineering). He has been with this company since inception in various capacities. He has about 34 years of experience in the Engineering Industry. Mr. Menon is a member of the Audit Committee and Shareholders Grievance Committee of the Company.

Re-appointment of Mr. Vikram R Sirur as Executive Chairman:

At the Annual General Meeting held on 24-08-2007, Mr. Vikram R Sirur was re-appointed as Whole Time Director (Designated as Executive Vice Chairman) for a period of three years from 1st July, 2007 to 30th June, 2010. His term of office expires on 30th June, 2010.

The Remuneration Committee and the Board of Directors at their meeting held on 28th April, 2010 and 3rd May, 2010 respectively have recommended his re- appointment on the existing terms and conditions for a further period of three years from 1st July, 2010 to 30th June, 2013.

In view of his expertise and significant contribution to the management of the affairs of the Company, the Board recommends his re-appointment.

DIRECTORS RESPONSIBILITY STATEMENT :

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

i. That in the preparation of the annual accounts for the financial year ended 31st March, 2010, the applicable accounting standards had been followed along with proper explanation relating to material departures.

ii. That the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that were 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 loss for the year under review.

iii. That the Directors had 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.

iv. That the Directors had prepared the accounts for the financial year ended 31st March, 2010 on a Going Concern basis.

AUDITORS:

M/s.B K Ramadhyani & Company, Chartered Accountants, Bangalore, the auditors of the company, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. You are requested to re-appoint auditors for the current year and fix their remuneration.

DISCLOSURE WITH REGARD TO CONSERVATION OF ENERGY, TECHNOLOGY OUTGO, ETC:

Information as required under Section 217 (1) (e) of the Companies Act, 1956 forms part of this report and is given in Annexure.

EMPLOYEES:

During the year under review, there was no employee who was in receipt of a remuneration, which is in excess of Rs.2,00,000 per month or Rs.24,00,000 per annum,- and hence the particulars of the employees as required in terms of Section 217 (2A) of the Companies Act, 1956 are not given in the report.

CORPORATE GOVERNANCE PROVISIONS :

Pursuant to the provisions of Clause 49 of the Listing Agreement, the company has adopted the provisions relating to Corporate Governance Code.

Your company has complied with all the mandatory requirements of the said Corporate Governance provisions. Corporate Governance Report is furnished separately forming part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT :

The Management Discussion and Analysis Report as per requirements under Clause V (A) of the Corporate Governance Provisions prescribed under Clause 49 of the Listing Agreement is furnished separately and forms part of this Report.

CEO/CFO Certification

As required under Clause (V) of Clause 49 of the Listing Agreement, the Company has obtained a certificate from Mr. A.R.Menon, Executive Director and Mr. S.A.Joshi Manager (Accounts) and Personnel Officer confirming compliance of the aforesaid clause.

CERTIFICATE OF COMPLIANCE OF CORPORATE GOVERNANCE :

Certificate of the Auditors confirming Compliance with the provisions of Corporate Governance forms a part of this .Report.

INDUSTRIAL RELATIONS :

Industrial relations with the employees of the company remained cordial, stable and satisfactory during the year under review.

ACKNOWLEDGEMENT :

Your directors wish to place on record their appreciation of the assistance and support extended by the Bankers, Financial Institutions, State and Central Governments, Customers and Suppliers to the company. Your directors express their appreciation for the dedicated and sincere services rendered by employees of your Company.

For and on behalf of the Board

Place : HUBLI VIKRAM SIRUR

Date : 6th August, 2010 Chairman

 
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