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BPL Display Devices Ltd.

BSE: 517143 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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BPL Display Devices Ltd. (BPLDISPLAYDEV) - Director Report

Company director report

BPL DISPLAY DEVICES LIMITED ANNUAL REPORT 2006-2007 DIRECTOR'S REPORT To The Members, Your Directors take pleasure in presenting the Twentieth Annual Report on business and operations of the Company together with the Audited Statements of Accounts for the accounting year ended on 31st March, 2007. FINANCIAL HIGHLIGHTS (Rs. in Crores) Particulars Year ended 31st Period ended 31st March, 2007 March, 2006 (12 months) (18 months) Gross Sales 196.47 345.49 Profit/ (Loss) before Extra-ordinary Item & Depreciation (18.30) (14.55) Profit/ (Loss) before Depreciation (18.30) (14.55) Less: Depreciation 19.75 22.28 Net Profit / (Loss) for the year (38.05) (36.83) OPERATIONS The year 2006-2007 was the difficult one of your Company. The Company reported net loss of Rs. 38.05 Crore. The operations of the Company deteriorated, despite the best efforts put in by the Management. The production and sales during the year 2006-2007 was to the tune of 9,66,791 CPTs and 9,34,403 CPTs as against the last year (18 months period) figure of 14,17,956 CPTs and 14,01,117 CPTs respectively. The turnover of the Company declined to Rs. 196.47 crores from Rs. 230.32 Crores achieved during the last year (12 months period) witnessing the annualized fall of 14.70% and resulting net loss of 38.05 crores. INDUSTRIAL SCENARIO & FUTURE OUTLOOK As per report released by Federation of Indian Chamber of Commerce and Industry (FICCI) on the Indian entertainment and India industry, India is the 5 th largest market globally for CTVs. FICCI projects that the CTV market will grow at an average rate of 10% - 12% per annum reaching 15 million CTVs by 2010. The number of CTV owing households is projected to grow from 112 million currently to 130 million in 2011. With the consumer preference shifting to flatter displays, the Flat TV contribution is expected to be around 60 percent of the total market in 2007. Better technology resulting in improved Picture quality and a diminishing price difference between the traditional curved CTVs and flat TVs are the primary reasons for an increase in the latter's popularity. However, the prices of flat CPTs are consistently under pressure due to the following reasons: a) Decrease in demand for CRT based TVs across the globe and increase in demand for LCD / Plasma Displays. b) Import prices of CPTs from China and other Asian countries are consistently declining due to higher inventory at their end. c) Increase in imports due to strengthening of Rupee against Dollar. d) Low Import Duty Structure, with Nil duty under FTA with Thailand has also resulted in lower sale value of flat CPTs in India. e) Decrease in Selling Price without corresponding proportionate decrease in Raw Material Cost. Due to the above factors, gross margins of the company have considerably declined, resulting in negative cash flows and operational losses. EXPORT The Company could get only one order during the year to export 640 Colour Picture Tubes to Nepal. FUTURE PLAN In view of the present Indian market scenario, Company is evaluating the possibility of manufacturing 14' CPTs on the existing line. Company can achieve a production level of upto 7000 nos. CPTs. per day. Since manufacturing of 14' CPTs is easier in comparison of 21' Flat CPTs and resultant process wastage is lessor in the case of 14' CPTs. At present the market demand of 14' is comparatively better. Besides, regular market share of 15-17%, Tamil Nadu Government's decision to distribute 7.5 million 14' CTVs free in the State during next three years, has enhanced the demand for 14' CPTS. Since the capacity of 14' manufacturing are limited, there is a scope of ready market for 14' CPT. In view of this, Company is evaluating the possibilities of switch over to the production of 14' CPTs in place of 21' Flat CPTs. DIVIDEND In view of losses, no dividend is recommended for the year. PARTICULARS AS PER SECTION 217 OF THE COMPANIES ACT, 1956 Particulars of Employees During the year under review, none of the employee of the Company was in receipt of remuneration in excess of the limits specified under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended. Directors' Responsibility Statement Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company state * That in the preparation of accounts for the accounting year ended 3161 March, 2007, the applicable accounting standards have been followed; * That the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are 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 accounting year and of profit or loss of the Company for the year under review; * That 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; * That the Directors have prepared the accounts for the accounting year ended 31st March, 2007 on a 'going concern' basis. MATERIAL CHANGES During the year under review, the plant could run for only 248 days. Due to poor market conditions and non-availability of the order with the Company, plant has again been closed down since 12th April, 2007, which has resulted in huge financial losses. Management is exploring the possibility to revive the Plant. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo Additional Information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed in terms of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 are provided in the Annexure to this Report. CORPORATE GOVERNANCE Your company is fully committed to good Corporate Governance practices and endeavours to operate as a responsible and law abiding corporate entity. The report on the Corporate Governance has been given separately and forms part of this Annual Report. PUBLIC DEPOSITS Your Company has not accepted any deposit from the public and hence there is no amount of principal or interest outstanding as on the date of Balance Sheet. BIFR STATUS In lieu of the original sanctioned scheme of 1996, Hon'ble BIFR vide its order dated 12.03.2004 had asked the company to submit the revised rehabilitation scheme to the Monitoring Agency (ICICI Bank), for restructuring of debts. Company had submitted the revised scheme on 31 11 October, 2006 to ICICI Bank and the same is under its consideration. DIRECTORS Mr. A.M. Saleem, Director & Chief Executive Officer was re-appointed for three years with effect from 17th December, 2006. A resolution seeking confirmation of his re-appointment has been recommended for your approval. Mr. Dinesh Sharma was nominated on the Board of the Company by IFCI Limited w.e.f. 25.03.2006 in place of Mr. D.G. Chaudhary, who ceased to be nominee director w.e.f. 07.12.200!5. Nomination of Mr. Dinesh Sharma had been withdrawn by IFCI limited w.e.f. 27.12.2006 and Mr. S. K. Mandal has been nominated in his place w.e.f. 27.12.2006. Mr. A. Karati has ceased to be a Director w.e.f. 25.01.2007, Your Directors place on record their appreciation for the valuable services rendered by Mr. Dinesh Sharma and Mr. A. Karati, during their tenure as Directors of the Company Mr. Ajit G. Nambiar and Mr. Manish Bahl, Directors, retire by rotation at the ensuing Annual General Meeting and, being eligible, offer themselves for re-appointment. AUDITORS The Statutory Auditors of the Company M/s Jassal Ranganathan & Associates, Chartered Accountants, New Delhi, retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Audit Committee and the Board of Directors recommends the re- appointment of M/s Jassal Ranganathan & Associates, Chartered Accountants, as the Auditors of the Company. ACKNOWLEDGEMENTS Your directors place on record their thanks for the dedicated services rendered by the employees of the company at all levels and also acknowledge the co-operation, assistance and support extended by the Company's Banks, Financial Institutions, suppliers / vendors and shareholders. For and on behalf of the Board of Directors AJIT G NAMBIAR Vice Chairman Place : New Delhi Date : 22nd August, 2007 ANNEXURE TO THE DIRECTORS' REPORT Information under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the Directors' Report. A. CONSERVATION OF ENERGY * Boiler operation converted from liquid fuel to Natural Gas, * Compressed air Due Point reduced from - 40 degree celius to - 15 degree celius. * Lighting level in shop floor and passages reduced by 50 lux. * Number of start stops of hydrogen furnace reduced from 5 to 2 per month and speed increased. FORM - A] DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY Current Year Previous Year 2006-2007 2004-2006 (12 months) (18 months) A. POWER& FUEL CONSUMPTION 1. ELECTRICITY a) Purchased Units (KWH) 6943650 1,78,17,132 Total Amount (Rs. in lacs) 323.90 747.56 Rate/Unit (Rs.) 4.66 4.20 b) Own Generation i) Through Diesel Generator Units (KWH) 493355 1,38,17,808 Units per litre of Diesel oil (KWH LTR) 3.17 3.71 Cost/Unit [Diesel cost only (Rs.)] 9.01 7.03 ii) Through Gas Generator 1,39,55,872 24,28,353 Units Unit per scm gas 3.60 3.91 Cost/Unit (Rs.) 2.57 2.34 2. COAL Quantity (Tonnes) NIL NIL Total cost (Rs. in lacs) Average Rate (Rs.) 3. FURNACE OIL(LDO) Quantity (Litres) 1,53,624 7,00,934 Total Amount (Rs. in lacs) 42.24 175.23 Average rate (Rs./Litres) 27.50 25.00 4. OTHERS/INTERNAL GENERATION (LNG) A. LNG Quantity (Cubic meter.) 19,30,526 26,97,845 Total Cost (Rs. in lacs) 179.25 247.77 Average rate/ Unit (Rs. / Cubic meter) 9.28 9.18 B. PROPANE Quantity (Tonnes) - - Total Cost (Rs. in lacs) Average rate/ Unit (Rs. / Cubic meter) - - B. CONSUMPTION PER UNIT OF PRODUCTION Products (Nos.) Colour Picture Tubes (CPT) 9,66,791 14,17,956 Electricity (KWH) 22.13 24.27 Furnace Oil (LDO) Litres 0.16 0.50 Coal (Kg.) - - Others: (LNG) Cubic meter 2.00 2.87 Propane (Kg.) - - B. TECHNOLOGY ABSORPTION Efforts made in Technology Absorption as per Form - B are furnished below:. FORM-B DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION Research and Development (R&D) 1. Specific areas in which R&D is carried out by the Company : Development of Correction Lenses for exposure units in coating area. 2. Benefits derived as a result of the above R&D : New Lenses were developed and procured for improvement in quality of 21' Real Flat Colour Picture Tubes. 3. Future plan of action : Trying to develop 14' CPT 4 Expenditure on R&D (a) Capital : US$ 10,000/- (b) Recurring : NIL (c) Total : US $ 10,000/- (d) Total R&D expenditure as a percentage of total turnover: Insignificant Technology absorption, adaptation and innovation 1. Efforts, in brief, made towards technology absorption, adaptation and innovation 21' Pure Flat Colour Picture Tubes was developed & manufactured to full capacity. 2. Benefits derived as a result of the above. : The cost reduction by alternate sourcing was successfully carried out. 3. In case of imported technology (Imported during the last 5 years reckoned from the beginning of the financial year) : 21' pure flat colour picture tubes was designed & developed with the assistance of LG Philips, Netherlands. a) Technology Imported : 21' Purb Flat Colour Picture Tubes b) Year of Import : 2005-2006 c) Has technology been fully absorbed : Yes d) If not fully absorbed, areas where this has not taken place, future plan of action. C. FOREIGN EXCHANGE EARNINGS & OUTGO During the year under review, company earned foreign exchange of Rs. 10.79 lacs and utilised foreign exchange worth Rs. 0.79 lacs.

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