CHOKSI IMAGING LIMITED
ANNUAL REPORT 2011-2012
The Members of CHOKSI IMAGING LIMITED,
The Board of Directors are pleased to present the 20th Annual Report on the
business and operations of your Company along with the financial statements
for the year ended on 31st March, 2012.
FINANCIAL RESULTS SUMMARY
During the year under review, the key financial indicators of the Company
are given below:
Particulars 2011-2012 2010-2011
(Rs. khs) (Rs. khs)
Total Revenue 18450.48 17115.11
Less: Expenses other than
Depreciation & Amortisation 18205.13 16528.42
Profit Before Depreciation,
Amortisation, Exceptional & 245.35 586.69
Extraordinary Items and Tax
Less: Depreciation and
Amortisation expense 58.72 51.68
Profit Before Exceptional &
Extraordinary Items And Tax 186.63 535.01
Add/(Less): Exceptional &
Extraordinary Items - -
Net Profit Before Tax (NPBT) 186.63 535.01
Less: Tax expenses 59.99 194.51
Net Profit After Tax (NPAT) 126.64 340.50
Add: Surplus brought forward
from previous year 1320.31 1066.03
Amount available for
Appropriations 1446.95 1406.53
Proposed Dividend 39.00 58.50
Tax on Proposed Dividend 6.33 9.72
General Reserve - 18.00
Balance carried forward to
Balance Sheet 1401.62 1320.31
The above figures have been arrived at in accordance with the Revised
Schedule VI to the Companies Act, 1956, as notified by the Ministry of
REVIEW OF PERFORMANCE
Your Company is working hard towards expanding its network throughout the
length and breadth of India and also outside India. Your Company has a
presence in every nook and corner of the country either through its Branch
offices or through its pan-India dealer network. During the year under
review, your Company earned a Total Income of Rs. 18450.48 lakhs as against
Rs. 17115.11 lakhs during the previous year. Net Profit After Tax (NPAT)
for the current year stood at Rs. 126.64 lakhs as against Rs. 340.50 lakhs
during the previous year. The main reason for decline in NPAT in the
current year is due to depreciation of the Rupee against the US Dollar.
The Directors recommend a dividend on total paid up capital of the company
at the rate of Rs. 1/- (10 per cent) per fully paid up equity share of
Rs.10/- each for the financial year ended 31st March, 2012, which would
amount to a total of Rs. 39 lakhs, exclusive of Dividend Distribution Tax.
The dividend is subject to the approval of shareholders at the ensuing
Annual General Meeting.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed report on Industry Structure and Developments, Product-wise
Performance, Business Outlook, Opportunities & Threats and Risks and
Concerns, in accordance with Clause 49 of the Listing Agreement, is
presented in a separate section forming a part of the Annual Report.
In accordance with section 256 of the Companies Act, 1956 read with the
Articles of Association of the Company, Mr. Sharadchandra Pendse and Mr.
Himanshu Kishnadwala are liable to retirement by rotation and being
eligible, offer themselves for re-appointment.
A brief resume of the Directors mentioned above has been annexed to the
notice of the 20th Annual General Meeting.
The Board recommends their re-appointment.
DIRECTORS' RESPONSIBILITY STATEMENT
As stipulated under section 217(2AA) of the Companies Act, 1956, the
Directors confirm that:
i) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
ii) 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 financial year as on 31st March, 2012 and of the
profit of the Company for that period;
iii) 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;
iv) The Directors have prepared the annual accounts on a going concern
Report on Corporate Governance of your Company for the year under review,
as per the requirement of Clause 49 of the Listing Agreement, has been
placed under a separate section and forms a part of this Annual Report.
During the year under review, your Company discontinued renewal of the
existing public deposits and acceptance of any further public deposits
under section 58A of the Companies Act, 1956. Five Deposits aggregating to
Rs. 1.80 lakhs were repaid on account of maturity. Also, your Company has
received three Deposits aggregating Rs. 1 lakh for Premature Repayments,
which were repaid as per the terms of Companies (Acceptance of Deposits)
The provisions of Section 58A of the Companies Act, 1956 with regard to
interest payment have been complied with.
The Statutory Auditors of your Company, M/s. Parikh & Amin Associates,
Chartered Accountants, Mumbai hold the office till the conclusion of the
ensuing Annual General Meeting have furnished a certificate under section
224(1B) of the Companies Act, 1956 to the effect that their appointment, if
made, would be within the prescribed limits . They have confirmed their
willingness to accept the office, if re-appointed and it is proposed that
they be re-appointed.
COST ACCOUNTING RECORDS
The Ministry of Corporate Affairs (MCA) issued notification no. GSR 429(E)
dated 3rd June, 2011 notifying The Companies (Cost Accounting Records)
Rules, 2011. According to the aforementioned notification, your Company is
now required to maintain cost records pertaining to per unit cost of
production, cost of sales and margins for each of its products to enable
company to make optimum utilisation of available resources. These records,
at the end of the financial year, are to be reconciled with the audited
financial statements and a Compliance Report is to be obtained from a Cost
Accountant and file the same with the MCA.
In compliance with the above, your Company has appointed M/s. Y.R. Doshi &
Associates, Cost Accountants, to maintain the cost records and issue
DEMATERIALISATION OF SHARES, SHARE REGISTRY AND LISTING DETAILS
Your Company has issued 39 lakh equity shares of Rs. 10 each, all of which
are listed on the Bombay Stock Exchange. Your Company has paid the annual
listing fees for the financial year 2012-13
As on 31st March, 2012 out of the total number of equity shares, 3481700
shares are held in dematerialised form, which represents 89.27 per cent of
the total listed shares of your Company.
In accordance with SEBI circular No. D&CC/FITTC/CIR-15/2002 dated 27th
December, 2002, your Company has appointed M/s. Adroit Corporate Services
Private Limited, a Category I Registrar and Share Transfer Agent registered
with SEBI, to look after works and matters related to share registry, in
coordination with the Secretarial Department of your Company.
The Directors request all the shareholders holding shares in physical form
to get their shareholding converted into dematerialised form through their
Bankers or Depository Participants at the earliest to avail benefits of
dematerialisation, as trading in the shares of your Company on the Stock
Exchange is only permitted in dematerialised form as per rules of the
Securities and Exchange Board of India (SEBI).
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
Details of energy conservation and absorption of technology along with
other information in accordance with the provisions of section 217(1)(e)
the Companies Act, 1956, read with Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988 are given in the Annexure - I
attached and forms part of this Report.
PARTICULARS OF EMPLOYEES UNDER SECTION 217(2A)
In terms of the provisions of section 217 (2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975 as amended,
during the year under review, no employees of your Company were in receipt
of remuneration exceeding Rs. 60 lakhs for the whole year or Rs. 5 lakhs
per month during any part of the year.
The total long term borrowings of your Company as on 31st March, 2012 stood
at Rs. 44.36 lakhs, Cash and Cash Equivalent stood at Rs. 173.05 lakhs and
total investments stood at NIL at the end of the year.
HEALTH AND SAFETY MEASURES
The standards of health of workers and safety measures to be taken as
provided by the Factories Act, 1948 and the rules framed there under have
been maintained by your Company.
The Directors wish to convey their appreciation to all the employees of
your Company for their enormous personal efforts as well as their
collective contribution to the performance of your Company. The Directors
would also like to place on record their sincere thanks to various
authorities of the Central Government and State Governments, Administration
of the Union Territory of Dadra and Nagar Haveli for the co-operation and
support received from them, to Bank of Baroda, official bankers of your
Company and also to the Suppliers and the Customers for their patronage of
your Company's products and to all the shareholders for their support.
For and on behalf of the Board of Directors
Date : 12th May, 2012
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)
A. CONSERVATION OF ENERGY
The rules pertaining to conservation of energy, as per the Companies
(Disclosure of Particulars in the Report of the Board of Directors) Rules,
1988, are not applicable to your Company.
B. TECHNOLOGY ABSORPTION
The particulars regarding absorption of technology is given below as per
Form B of the Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988
1. RESEARCH AND DEVELOPMENT (R&D)
1. Specific Areas of R & D The Research and Development activities of
activities your Company are mainly concentrated on
quality enhancing of its products.
2. Benefits Derived as a The Company has established itself in the
result of the R & D activity market with a pan-India network of customers.
3. Future Plan of Action The Company endeavours to make continuous
improvements to its product quality.
4. Expenditure on R & D The Company is using the existing facilities.
2. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION
1. Efforts Made The Company makes continuous efforts towards
improving the quality of films, increase in
productivity and improving its testing
2. Benefits Derived The quality of the products has improved and
productivity has increased over the course
3. Import of Technology The Company presently uses Indian Technology
and has not imported any technology during
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
The Forex market conditions were volatile during the year gone by. The
fluctuations in the market were high during mid-December, the rupee highly
depreciated against the dollar. But your Company was able to manage the
volatility in a prudent manner due to which loses were minimised.
Particulars Current year Previous Year
1. Foreign Exchange Earnings 55,328,719 33,212,709
2. Foreign Exchange Outgo:
a) Travelling Expenses 1,526,695 1,840,747
b) Equipment, Spares, X-Ray
Accessories and other
Finished Goods 1,216,075,617 1,146,704,094
For and on behalf of the Board of Directors
Date : 12th May, 2012
MANAGEMENT DISCUSSIONS AND ANALYSIS
Industry structure and developments:
Your Company is in the business of manufacturing and trading of
Photosensitised materials and other products for Healthcare Industry,
especially supplies to Hospital and Diagnostic Centres all over India.
Globally, the industry is amongst fastest growing sectors. Within this
context, India is viewed as one of the most promising markets among the
developing countries and is projected to reach USD 140 billion by 2017.
India is one of the world's most lucrative healthcare markets, and is
expanding rapidly, according to latest findings by a report published in
February 2012, by market research firm RNCOS. India is the most competitive
destination with advantages of lower cost and sophisticated treatments,
according to RNCOS report titled 'Indian Healthcare - New Avenues for
The Indian Government, on its part, is promoting this sector through
positive regulations like the introduction of the Health Bill, which
proposes to bring all independent bodies. The Government has also decided
to increase health expenditure to 2.5 per cent of the gross domestic
product (GDP) by the end of the 12th Five Year Plan, from the current 1.4
per cent. In addition a number of initiatives that have been proposed and
taken up by the Government of India (GOI) for enhancement of the healthcare
* 100 per cent Foreign Direct Investment (FDI) is permitted in health and
medical services under the automatic route
* Allocation for National Rural Health Mission (NHRM) has proposed to be
increased from Rs. 18,115 crore (US$ 3.59 billion) in 2011-12 to Rs. 20,822
crore (US$ 4.13 billion) in 2012-13
* National Urban Health Mission is being launched
* Pradhan Mantri Swasthya Suraksha Yojana, a Health Insurance Scheme for
low income group people, being expanded to cover upgradation of 7 more
Government medical colleges
The initiatives by the Government to promote Healthcare industry are in
turn more beneficial and profitable to the growth of your company. However,
due to the lack of affordability among the majority of Indians and increase
in cost structure for the segment, profitability has taken a hit. This has
in turn led to continuous demands from the end users for reduction in cost
of Medical equipments and consumables.
We still feel that this industry has tremendous potential due to the unmet
demand in the country. Also the spread of Health Insurance is a must for
the further growth and development of the Industry as a whole. Currently
hardly 5% of India's population is covered under some kind of Health
Insurance and as such the scope is huge. As the coverage of Insurance
increases the demand for Healthcare Services will increase in the country,
leading to increase in demand for our products.
Year at a Glance:
The year gone by has been a year of consolidation for your Company. The
focus had been on increasing our turnover in the various products and that
the turnover of the Company for the year under review has increased to
Rs.19528.47 lakhs. This is an increase of almost 15%. The net turnover has
increased to Rs. 18317.75 lakhs (increase of almost 8%).
However, EBIDTA of the company has decreased to Rs. 574.06 lakhs as
compared to that of Rs. 897.79 lakhs in previous year. Besides the intense
competition, another major cause for the reduction in margins is due to the
immense volatility in Foreign exchange rates during the year. Your company
has started taking steps to reduce the borrowings and the interest cost in
the coming year as the company has not invited or renewed any deposits this
Your Company primarily supplies to the Hospitals and Diagnostic Centres.
Broadly we classify the Company's products in manufacturing and trading.
During the year the manufacturing goods turnover increased from Rs.11696.05
lakhs to Rs. 12632.22 lakhs at Gross level and Rs. 10597.48 lakhs to
Rs.11421.50 lakhs at Net level. The trading goods turnover has increased
from Rs. 6221.18 lakhs to Rs. 6816.41 lakhs.
Fitch India Private Limited, a Credit Rating agency, has come out with its
report on Indian healthcare sector. In a recent report, the agency has
classified the outlook for the sector for 2012 as stable. According to the
rating agency some level of consolidation in the highly fragmented
healthcare industry along with improved occupancy rates and average
revenues per operating bed could be positive for the sector in 2012.
Fitch Ratings expects growth in Indian health care sector in 2012 to be
driven by the gap between demand and supply in health care services in the
country due to increasing lifestyle-related health problems, changing
demographics, increasing disposable income and insurance penetration, below
par healthcare infrastructure (especially in Tier II and Tier III cities,
or smaller cities), government support and increasing medical tourism.
The overall industry scenario is upbeat, propelled by a growing economy,
shifting demographics, rising disposable incomes, high incidence of
lifestyle-induced diseases, new investment avenues and a large pool of
talented and cost-effective human resource. The segments that are reaping
the most benefits are hospitals, pharmaceuticals, medical equipment
companies, pathological labs and other service providers, Going forward in
FY 2012-2013 we expect moderate growth rates. Your Company has grown
substantially over the last 6 years and has grabbed all the possible
opportunities by supplying its products to major Hospitals and Diagnostic
Centres. It is looking at adding more and more products which shall be
contributing to the Profitability of the Company. Also as a policy your
Company, always first ties up the Sales and Marketing of the products
before venturing into manufacturing.
Opportunities and Threats:
Currently approx. 5% of India population is covered under Health Insurance.
With the entry of private Health Insurance Companies, we expect a sizeable
percent of the Indian Population which is currently not able to afford
treatment would in time to come be able to avail of the same. This will
lead to increased demand for your company's products. Further your Company
being one of the few all India players, it will be able to tie up with more
Companies to sell and market their products.
The main threat for your Company is the low entry barrier in this field
wherein a lot of new players are entering the Distribution of Healthcare
products. However due to the All India infrastructure and base, your
Company is confident of growing in the increased competitive landscape.
Another major threat that the Company faces is the direct entry of
Multinational Companies in India. Even here we do not foresee much of a
threat as they eventually need an All India player like your Company to
enable them to be a have a proper Sales and Distribution Network.
Risks and Concerns:
One of the key risk and concern for your Company is the advent of Computer
Radiology in India. Though not an immediate risk, this is a matter of
concern in the long run. Your Company as a strategy has been adding more
and more products in its portfolio to negate this risk in the long run. In
fact, in spite of the advent of Computer Radiology your Company has been
able to maintain and marginally increase the turnover.
Another key risk is the extreme volatility in the Foreign Exchange rates.
This is something that is affecting majority of the Industries whether
Import or Export Based. However looking at the Global Scenario and higher
growth rates in GDP in India, we feel in the medium and long range the INR
to be range bound. Also your Company has been able to neutralise the effect
of this volatility by passing on the benefits or losses to some extent down
the chain i.e. Dealer Network.
Internal Control systems and their adequacy:
The company has instituted adequate internal control systems to
commensurate with the nature of its business and the size of its
operations. An Audit Committee consisting of four independent, non-
executive directors is in place. Internal Audit is conducted on regular
intervals at plant and office which covers key areas of operations. All
significant audit observations and follow-up actions thereon are reported
to the Audit Committee. The Company has appointed a Cost Accountant to
ensure adequate control systems and to reduce wastages in the manufacturing
process. The Cost Accountant shall be responsible for maintaining cost
records and issue Compliance Report.
The Company regards its human resource as amongst its most valuable assets
and proactively reviews policies and processes by creating a work
environment that encourages initiative, provides challenges and
opportunities and recognizes the performance and potentials of its
Total number of employees as on 31st March, 2012 stood at 167, who form the
experienced, educated and hard working pool of Human resources. Your
Company's industrial relations continued to be cordial during the year
under review. Your Company conducts regular in-house training programs for
employees at various levels. Employees are also sent for selected external
Operational Income: Your Company achieved a total operational income of
Rs.18426.63 lakhs against last year's operational income of Rs. 17083.76
lakhs which translates into a growth of about 7.86%.
EBIDTA: Your Company's EBIDTA margin stood Rs. 574.06 lakhs as compared to
Rs. 897.79 lakhs in previous year. The reduction in EBIDTA margin of 36% is
due to the immense volatility in Foreign exchange rates.
Other Income: Your Company earned other income of Rs. 23.86 lakhs as
against Rs. 31.35 lakhs in previous year.
Profit after tax: The profit after tax was Rs. 126.64 lakhs as against
Rs.340.50 lakhs in previous year.
For and on behalf of the Board of Directors
Date : 12th May, 2012