ALCOBEX METALS LIMITED
ANNUAL REPORT 2009-2010
Your Director have pleasure in presenting the 40th Annual Report and
Audited Statement of Accounts of the Company for the year ended on 31st
Particulars 2009-2010 2008-2009
(Rs. in Lacs)
Loss before depreciation, interest, taxation 592.86 616.40
and extraordinary items
Add: Depreciation 138.88 141.73
Add: Interest 1347.47 1374.29
Loss 2079.21 2132.42
Add/Less: Prior Period adjustment/ 7.39 1.71
Net Loss 2086.60 2134.13
Deficit as per last year 16083.01 13777.18
Less: Provisions for Deferred Tax Assets/ (5265.65) 278.30
Less : Debenture Redemption Reserve - -
& Capital Reserve W/back
Adjusted against General Reserve - -
LOSS CARRIED TO BALANCE SHEET 23435.26 15633.01
Due to severe liquidity problems production had been falling month after
month and it had to be totally stopped from mid December, 2009 following
withdrawal of power & water supply to the company by the authorities
concerned. The company achieved a production of 410.62 M.T and a turn over
of Rs. 1396.95 Lacs during the year as against the production of 1555 M.T.
and a turn over of Rs. 6010.34 Lacs during the previous year.
The company's export during the year under report amounted to Rs. 401.84
Lacs (FOB Value) as against Rs. 3610.56 Lacs during the previous year.
Owing to the losses incurred by the company, your directors express their
inability to recommend payment of dividend on the equity shares for the
year under report.
The acute shortage of Working Capital continues to haunt the operation of
the company. The company is making serious efforts to locate a strategic
investor to finance the working capital and also make one time settlement
with its secured lenders. Future outlook of the company will depend upon
the success of company's efforts to locate a strategic investor.
Industrial relations had been generally satisfactory.
Shri S.R. Kanunga retire by rotation at the 40th Annual General Meeting and
being eligible offer themselves for reappointment.
Shri Vineet Bhandari ceased to be additional director with effect from 30th
September, 2010 Shri S.K. Singh, Nominee Director of PNB ceased to be
director consequent upon his resignation with effect from 28th April, 2010.
Shri D.K. Kankaria ceased to be director with effect from 17th June, 2010
due to his sad demise.
The profile of the Director seeking reappointment at this Annual General
Meeting is given in the Report on Corporate Governance.
The Company has provided full disclosure in the audited accounts of the
company through Notes to the accounts and accounting policies forming part
of the Balance sheet as at 31st March, 2010 in respect of qualifications
mentioned by Auditors in their Report. Further the notes to the Accounts
and Accounting Policies referred to in Auditors Report are self-explanatory
and the qualifications have been suitably explained therein. In addition to
the same, the Director would like to state that:
(a) The company has prepared accounts on the going concern basis as the
Company has partially continued with its operation and arrangements are
being made to tide over liquidity problem. Accordingly, the company is of
view that there is no impairment of assets and also accounted for deferred
(b) The company is in process of obtaining balance confirmation
certificates from various parties and also reconciling various accounts.
(c) Steps are been taken to avoid delays in payment of statutory dues.
The auditors of the company M/s Ray & Ray, Chartered Accountants, retire at
the 40th Annual General Meeting of the company and have given their consent
for reappointment. The Company has also received a certificate from them
under section 224 (IB) of the Companies Act, 1956.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to section 217 (2AA) of the Companies Act, 1956 the Directors,
1. In the preparation of the Annual Accounts, the applicable Accounting
Standards have been followed except to the extent disclosed in Significant
Accounting Policies and Notes to the Accounts (Schedule 25 & 26).
2. Appropriate accounting policies have been selected and applied
consistently and judgments and estimates that are reasonable and prudent
have been made, 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 /loss of
the Company for that period.
3. Proper and sufficient care for the maintenance of adequate accounting
record in accordance with the provisions of the Companies Act, 1956, has
been taken for safeguarding the assets of the company and prevailing and
detecting fraud and other irregularities, to the best of our knowledge and
4. The annual accounts have been prepared on a 'going concern basis.
SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985
The package earlier given by the Corporate Debt Reconstruction cell of IDBI
to the Company has since been withdrawn by it. The Honorable BIFR is
considering various issue relating to the future of the Company. A notice
has also been served to the Company under Section 13 of the SARFAESI Act by
some secured lenders seeking payment of their dues from the Company.
There was no employee of the company drawing salary in excess of the limits
prescribed under section 217 (2A) of the Companies Act, 1956.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
AND OUT GO
In accordance with the requirement 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 a statement showing particulars in
respect of above is annexed and forms part of this report.
The Report on Corporate Governance is annexed and forms part of this
The Audit Committee of the Company reviewed the financial statements for
the year under review at its meeting held on 8th September, 2010 and
recommended the same for the approval of the Board of Directors.
As per the listing agreement with the stock exchange, the Management
discussion & Analysis report, Report on Corporate Governance and Auditor's
Certificate regarding compliance of all conditions of Corporate Governance
form a part of this report.
Your Directors acknowledge with gratitude, the assistance and cooperation
provided by the Govt., of Rajasthan, the Company's bankers and financial
institutions, suppliers, customers and various other Government
For and on behalf of the Board of Directors
Place: Jaipur (G.C. Kanunga) (S.R. Kanunga)
Date : 8th September, 2010 Managing Director Director
ANNEXURE TO THE DIRECTORS' REPORT
Conservation of energy, technology absorption, foreign exchange earnings
and out go in accordance with the Companies (Disclosure of Particulars in
the report of Board of Directors) Rules, 1988].
CONSERVATION OF ENERGY
a. Energy conservation measures taken.
Efforts are continuously being made to conserve energy.
b. Proposals are under consideration for power factor improvement and
Energy conservation. Installation of additional capacitor and panel for
improvement of power factor for energy conservation as well tariff benefits
/reduction in power bill.
c. Sufficient electricity was generated on DG set by using H.S.D. which
resulted in considerable savings and helped in controlling voltage
d. Impact of the measures at (a) (b) and (c) above for reduction of energy
consumption and consequent impact on the cost of production of goods.
Continuous efforts are being made for energy conservation and for reduction
of power consumption per unit of production.
e. Total energy consumption and energy consumption per unit of production
as per Prescribed Form 'A'
f. Research & Development (R & D)
(i) Specific areas in which R&D carried out by Company
Conceptualized the minimum number of oil fire burners in all the three pre
heating billet furnaces of extrusion press. The modification had resulted
in considerable savings in furnace oil consumption.
(ii) Benefits derived as a result of above R&D Expansion of marketing areas
particularly in the export field.
Research will be carried out for new alloys and existing fluxes, filters,
SCCM, less New technical route will be being developed for modifying the
existing techniques for various copper and copper alloys/sections.
(iii) Future plan of action
To improve productivity, quality vis-a-vis energy saving additional
auxiliary equipments will be added and modified after restart of production
(iv) R & D Expenditure
a) Capital : Nil
b) Recurring : 0.32 Lacs
c) Percentage of turnover : 0.022%
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
(i) Plantation and garden have been developed in the factory to reduce the
air pollution of foundry etc. The wastewater generated is neutralised and
treated for being reused in gardening.
(ii) New alloys viz Chromium Copper, Chromium Zirconium copper, Zirconium
copper and silicon bronze and Aluminum Bronze were been developed and also
supplied to the foreign customer.
(iii) Developed pipe U-Bend for various sizes to be used in marine
(iv) Bright annealing to match International Standards & Quality of product
was achieved by shifting from the Exo-gas to Nitrogen gas being generated
(v) Customer care and satisfaction were further improved by adopting
detailed presentation of the product and its end use in number of countries
during the year.
In case of imported technology (imported during the last five years
reckoned from the beginning of the financial year), following information
may be furnished.
FOREIGN EXCHANGE EARNINGS AND OUT GO
(a) Activities relating to exports, initiative taken to increase exports,
development of new export market for products and services and export plans
The Company is continuing to export its products.
(b) Total Foreign Exchange earned and used:
(Rs. In lacs)
Foreign Exchange Earned 410.843 610.56
Foreign Exchange Used Nil 1246.84
For and on behalf of the Board of Directors
Place: Jaipur (S.R. KANUNGA) (G.C. KANUNGA)
Date : 8th September, 2010 Director Managing Director
MANAGEMENT DISCUSSION AND ANALYSIS
A. Industry Structure & Developments:
Alcobex is a leading manufacturing company in India in manufacturing of
extruded copper-based alloys such as pipes, tubes, solids, profiles and
The qualities of the company's products are well accepted in the
international market. The quality is at par with international standard and
due to this the export of the company's products is increasing and it had
touched to Rs. 401.84 lacs during the year 2009-2010.
The qualities of the company's products are well accepted internationally
and there is a good scope for higher export.
The Company has been declared as sick unit by the Board of Industrial &
Financial Reconstruction of the Sick Industrial Companies (Special
Provision) Act 1985. BIFR at is meeting held on 2nd August, 2010 directed
the company to deposit the Rs. 5 Crores with IDBI within One month and if
the Company does not deposit said amount within the stipulated time, the
IDBI could file the MA for change of management. The Company is making
efforts to arrange for funds from the Strategic Investor and also will seek
extension of time from BIFR for making such deposit, if necessary.
C. Financial Performance:
Because of inadequacy of working capital production as envisaged could not
be achieved and the company incurred loss during the year 2009-10.
D. Internal Control System:
The company has a proper and adequate system of internal controls to
provide reasonable assurance that all assets are safeguarded and protected
against loss from unauthorized use or disposition and that transaction are
authorized, recorded and reported correctly.
An external firm of Chartered Accountants appointed by IDBI is conducting
concurrent/internal audit according to terms and conditions mandated upon
Said Financial institution. The reports of concurrent auditors are
periodically reviewed by the Audit Committee, which includes independent
and Nominee directors appointed by banks and financial institutions.
E. Human Resources:
Employees' relations continued to be satisfactory during the year.
F. Cautionary Statement:
While the company formulates plans, prepares monthly and annual budgets
based on certain assumptions and expectations and makes efforts to achieve
the laid down targets, but actual results could differ materially from
those expressed or implied. Important factors that could make a difference
to the company's operations include economic conditions affecting global
and domestic demand-supply, finished goods, prices in the domestic and
overseas market in which the company operates, raw material cost and
availability, changes in Government regulations, tax regimes economic
developments within India and other factors such as litigation and
industrial relations. The company assumes no responsibility to publicly
amend modify or revise any forward looking statement on the basis of any
subsequent developments, information or events.
For and on behalf of the Board of Directors
Place: Jaipur (G.C. KANUNGA)
Dated: 08th September 2010 Managing Director