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Bobshell Electrodes Ltd.

BSE: 526925 Sector: Engineering
NSE: N.A. ISIN Code: INE896B01011
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Bobshell Electrodes Ltd. (BOBSHELLELECT) - Director Report

Company director report

DIRECTORS

TO

THE MEMBERS

BOBSHELL ELECTRODES LIMITED

Dear Shareholders

Your directors have pleasure in presenting herewith the 20th Audited Annual Report forthe year ended on 31st March 2014 of your Company.

FINANCIAL HIGHLIGHT :

The Financial performance of the company during the year is as under:

PARTICULARS FOR THE YEAR ENDED ON 31/03/2014 FOR THE YEAR ENDED ON 31/03/2013
Income From Sales(Net) 26786479 30833565
Other Income 852679 817445
Total Income. 27639158 31651010
Total Expenses 28183401 32381709
Profit Before Tax (544243) (730699)
Depreciation 930138 790717
Adjustment For Tax 0 0
Provision for FBT. 0 0
Profit / (Loss) After Tax. (622242) (817485)
Deferred Tax (Assets) Liability 77999 86786
Net Profit / (Loss) for the Year (622242) (817485)
Previous Year Balance B/F (23620799) (22868086)
Balance Carried to Balance Sheet (25060526) (24438284)
Earning Per Share (In Rupees) (0.10) (0.14)

DIVIDEND :

Due to negative Earning Per share loss brought forward from the last year and lossafter differed tax provision your Directors do not recommend any amount to be paid as adividend.

TRANSFER OF UNPAID/ UNCLAIMED DIVIDEND :

The Company does not have any outstanding unpaid/ unclaimed dividend which is requiredto be transferred to the Investors Education and Protection funds as per the provision ofSection 205C of the Companies Act 1956. The Company does not have any outstandingliability on account of Interest and Principal on Deposits Debentures or ShareApplication Money.

BUY BACK OF SHARES :

The Company had not made any Buy Back of its paid up equity shares during the year interms of section 77A 77AA and 77B of the Companies Act 1956. Hence no specific disclosureis required to be made in this report.

SHARE CAPITAL STRUCTURE :

There was no change in total value of Authorized Issued Subscribed and Paid up ShareCapital Structure of the Company.

YEAR UNDER REVIEW :

During the year under review your company has earned a Total income of Rs 27639158(Previous Year of Rs. 31651010) After deduction of all Expenses of Rs. 28183401(Previous year Rs. 32381709) your company has incurred a net loss of Rs. 622242/-(Previous Year Operating Loss of Rs. 817485/-) which is carried to balance sheet. At theyear end total accumulated losses were at Rs. 25060526/-(Previous year were at Rs.24438284). The Company still holds positive net worth and is not a sick Industry.During the year the company has repaid all its bank’s liabilities and there is nointerest liability for next financial year. This will add the profitability of thecompany. Further the improved cash flow in the company will entitle it negotiate furtherfor raw material cost and ultimately improve the possibilities of earning profit margin onper unit of production.

COMPLIANCE TO CODE OF CORPORATE GOVERNANCE (CLAUSE 49 OF THE LISTING AGREEMENT)

The present Board of Directors consists of 4 directors out of which two are thePromoter directors and two are Independent non-executive directors. Accordingly thepresent Board of Directors now complies with the provisions of clause 49 of the ListingAgreement. The detailed report on Corporate Governance is annexed.

INFORMATION PURSUANT TO THE LISTING AGREEMENT AND SEBI CIRCULAR NO SMDRP / CIR-14 / 98DATED APRIL 29TH 1998

The Company’s shares are at present listed on Bombay Stock Exchange. The completeaddress is given elsewhere in this report. The Company has made all compliances of theListing Agreement with the Bombay Stock Exchange during the year.

DEMATERIALISATION OF THE SECURITIES OF THE COMPANY :

The company has already signed Tripartite Agreement with NSDL & CDSL forDematerializing of its Equity Shares. The Equity shares are now available forDematerialization by investors. The company has paid the dues of depositories i.e. NSDLand CDSL and Registrar and Transfer Agent up to the date.

ENVIRONMENT PROTECTION :

The Company is engaged in the business of manufacture of welding rods. The process doesnot generate any type of Air or water pollution. The water is being used only forsanitation purpose. The metal scrap is being disposed off in regular manner as perpractice prevailing in the industry. The manufacturing process does not generate any typeof pollution.

INSURANCE AND PROTECTION OF ASSETS :

The Company’s all fixed assets and tangible movable assets are properly insuredagainst all available commercial risks like fire flood earthquake and other extraneousperils from the approved and reputed insurance companies.

DEPOSITS :

During the year under review your company has neither invited nor accepted any publicdeposit or deposits from the public as defined under section 73(1) of Companies Act 2013(section 58A of Companies Act 1956).

DIRECTORS :

During the year under review Shri Shailesh M. Joshi shall retire by rotation. He iseligible for reappointment as director and has offered himself for directorship of thecompany. Your directors recommend reappointing him by passing the required resolution.Shri Manshanker T. Joshi has resigned from the post of Director w.e.f. 20/05/2014 due toold age and ill health and the Board has passed resolution on 30/05/2014 to give effect tohis resignation. Your Directors put on record the word of appreciation for the valuabletime and services provided by Shri Manshanker T. Joshi during his tenure as Director withthe company and also thank him for the valuable guidance provided by him. Except thisduring the year there was no change in the constitution of the directors.

DIRECTORS RESPONSIBILITY STATEMENT (SECTION 217(2AA)) :

Pursuant to the provision contained in section 217(2AA) of the Companies Act 1956 theDirectors of your Company Confirm :

(A) That as far as possible and except for AS-15 on making provision for retirementbenefits for Gratuity for employees in the preparation of the annual account theapplicable accounting standards have been followed and no material departures have beenmade from the same;

(B) That they have selected such accounting policies and applied them consistently andmade judgments and estimated that are reasonable and prudent so as to give a true and fairview of the state of affair of the company for that period:

(C) That they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company for preventing and detecting fraud and other irregularities.

(D) That they have prepared the annual account on a going concern basis.

(E) The Directors in the case of Listed Company had laid down internal financialcontrols to be followed by the company and that such internal financial controls areadequate and were operative effectively.

(F) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

DECLARATION AS TO INDEPENDENT DIRECTORS: (Pursuant to Provisions of section 149(6) ofthe Companies Act 2013).

All the Independent Directors of the Company do hereby declare that: (1) All theIndependent Directors of the Company are neither Managing Director nor a Whole TimeDirector nor a Manager or a Nominee Director.

(2) All the Independent Directors in the opinion of the Board are persons of integrityand possesses relevant expertise and experience.

(3) Who are or were not a Promoter of the Company or its Holding or subsidiary orassociate company.

(4) Who are or were not related to promoters or directors in the company its holdingsubsidiary or associate company.

(5) Who has or had no pecuniary relationship with the company its holding subsidiaryor associate company or their promoters or directors during the two immediately precedingfinancial years or during the current financial year.

(6) None of whose relatives has or had pecuniary relationship or transaction with thecompany its holding subsidiary or associate company or their promoters or directorsamounting to two per cent or more of its gross turnover or total income or fifty lakhrupees or such higher amount as may be prescribed whichever is lower during the twoimmediately preceding financial years or during the current financial year

(7) Who neither himself nor any of his relatives (a) Holds or has held the positionof a key managerial personnel or is or has been employee of the company or its holdingsubsidiary or associate company in any of three financial years immediately preceding thefinancial year in which he is proposed to be appointed.

(b) Is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial years in which he is proposed to beappointed of (i) A firm of auditors or company secretaries in practice or cost auditors ofthe company or its holding subsidiary or associate company; OR

(ii) Any legal or a consulting firm that has or had any transaction with the companyits holding subsidiary or associate company amounting to ten per cent or more of thegross turnover of such firm; (iii) Holds together with his relatives two per cent or moreof the total voting power of the company; OR

(iv) Is a Chief Executive or director by whatever name called or any non-profitorganization that receives twenty five per cent or more of its receipts from the Companyany of its promoters directors or its holding subsidiary or associate company or thatholds two per cent or more of the total voting power of the company; OR

(v) Who possesses such other qualifications as may be prescribed.

STATUTORY AUDITOR :

M/s. DJNV & CO. Present Statutory auditors of the company have given their letterof consent and confirmation under section 224(1B) of the Companies Act 1956 forreappointment as Statutory Auditors of the Company. The Board has now proposed to appointthe Statutory Auditors for a period of 3 years as per requirements of section 139 (1) ofthe Companies Act 2013 read with Companies (Audit and Auditors) Rules 2014. NecessaryResolution for their appointment as the Statutory Auditors and fixing their remunerationis proposed to be passed at the Annual General Meeting.

AUDITORS OBSERVATION :

The Auditor’s Report for the Year ended 31st March 2014 and the notesforming part of accounts referred to in the Auditor’s Report are self explanatory andgive complete information.

EMPLOYEES: (SECTION 217 (2A)) :

There are no employees of the company who were in receipt of the remuneration ofRs.6000000/- in the aggregate if employed for the year and in receipt of the monthlyremuneration of Rs. 500000/- in the aggregate if employed for a part of the year underreview. Hence the information required under Section 217 (2A) of the Companies Act 1956read with the Companies (Particulars of Employees) Rules 1975 and Companies (Particularsof Employees) Amendment Rules 2011 is not applicable to the Company.

FORMATION OF AUDIT COMMITTEE IN COMPLIANCE TO SECTION 292 A OF THE COMPANIES ACT 1956AND CLAUSE 49 OF THE LISTING AGREEMENT ON CORPORATE GOVERNANCE :

In Compliance with the provisions of Section 292A of the Companies Act 1956 yourcompany has formed an Audit Committee within the Organization consisting of 2 independentdirectors and one promoter director. The area of operations and functionalresponsibilities assigned to the committee are as per the guidelines provided in Clause 49of the Listing Agreement for implementation of code of corporate governance. The Committeemeets at least once in a quarter and gives its report of each meeting to the Board for itsapproval record and information purposes. The detail of powers responsibilities andsystem of functioning of this committee is given in report on Corporate Governance formingpart of this report.

MATERIAL DEVELOPMENT :

Except the information given in this report no material development has taken place inthe Company from the closure of the financial year till the date of this annual report andthe same does not have any material impact on the financial conditions or operation of theCompany.

STATUTORY INFORMATION: (SECTION 217 (1) (E)) :

The information required to be disclosed as per the provisions of Section 217 (1) (E)of the Company Act –1956 and the Companies (Disclosure of particulars in the Reportof Board of Directors) Rules 1988 are given in the annexure to this report.

APPRECIATION :

Your directors take this opportunity to acknowledge the trust reposed in your Companyby its Shareholders Bankers and Clients. Your Directors also keenly appreciate thededication & Committee of all our employees without which the continuing progress ofthe Company would not have been possible.

ON BEHALF OF THE BOARD OF DIRECTORS

OF BOBSHELL ELECTRODES LIMITED

SD/-
DATE : 27th May 2014 (SHAILESH M. JOSHI)
PLACE : AHMEDABAD CHAIRMAN AND
MANAGING DIRECTOR

ANNEXURE-A TO DIRECTORS REPORT

DETAILS ON ENERGY CONSUMPTION RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION ANDADOPTION FOREIGN EXCHANGE EARNINGS AND OUTGO.

[A] ENERGY CONSUMPTION AND CONSERVATION.

Sr. No. Particulars For the Yr. ended 31/03/2014 For the Yr. ended 31/03/2013
(1) CONSUMPTIONOF
ENERGY/POWER
(a) Electricity Purchased
No. of Units consumed 65002 68452
Total Amount of Electricity Rs.593661.52 Rs.605904.26
Cost per unit of Electricity Rs.9.13 Rs. 8.85
(b) Electricity Generated
No. of Units Generated. NIL NIL
Total Amount of Power Generation. NIL NIL
Cost per Unit of Power Generated. NIL NIL
[c] CONSUMPTIONOFFUEL
Type& Nature of Fuel Consumed
Coal/ Firewood/ Bio Mass/
Furnace Oil/Others N.A. N.A.
Total Quantity of Fuel Used N.A. N.A.
Total Amount of Fuel Used N.A. N.A.
Cost per Unit of Fuel Used N.A. N.A.
Cost per Unit of Product
Manufactured N.A. N.A.
[d] Unit of Production Kgs. Kgs.
Total Units of Products
Produced 85237 101086
Total Cost of Power/ Fuel per unit of Production. Rs.6.96 Rs.5.99

RESEARCH AND DEVELOPMENT :

The Company is running an in house small Research & Development unit for Qualitytesting of the products manufactured. In fact the Company’s entire process ofmanufacturing right from the raw material procurements to dispatch of finished goods isISO Certified. The Company is following strict quality control norms as per requirementsof ISO Certification. The ISO Certificate granting authorities are also conductingoperational audit of the Company’s entire process flow system. The Company iscontinuously making research for reduction of manufacturing cost by improvement in qualityof products flux used quality of wire bars used in manufacture of welding rods. Allsuccessful research and innovations are immediately implemented in the manufacturingprocess.

TECHNOLOGY UPGRADATION AND ADOPTION :

As stated above the Company is continuously making Research & Development withinits own Quality Control Lab. All the successful research for quality control qualityimprovement cost control measures are immediately implemented within the manufacturingunits of the Company. The results are that the Company despite continuous increase in thecost of raw materials steel prices in the world able to control the cost of operationsand has yet not drawn in to cash operational losses.

FOREIGN EXCHANGE EARNINGS AND OUTGO :

(Amount in Rupees)
Sr. No. Particulars For the Year 31/03/2014 For the year 31/03/2013
[A] FOREIGN EXCHANGE EARNED
(1) On Export of Revenue
Goods & Services NIL NIL
(2) On Export of Technology/
Research and IPRs NIL NIL
(3) On Export of Capital Goods NIL NIL
(4) On Any Other Matters NIL NIL
[A] FOREIGN EXCHANGE USED
(1) On Import of Revenue
Goods & Services NIL NIL
(2) On Import of Technology/
Research and IPRs NIL NIL
(3) On Import of Capital Goods NIL NIL
(4) On Manpower Training or
Remuneration paid to Foreign
Technicians. Etc. NIL NIL
(5) On Any other Matters NIL NIL

ON BEHALF OF THE BOARD OF DIRECTORS

OF BOBSHELL ELECTRODES LIMITED

SD/-
DATE : 27th May 2014 (SHAILESH M. JOSHI)
PLACE : AHMEDABAD CHAIRMAN AND
MANAGING DIRECTOR

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