GUJARAT CYPROMET LIMITED
ANNUAL REPORT 2002-2003
Your Directors present the Eleventh Annual Report together with the
Statement of Accounts for the 9 month period ended March 31, 2003.
The working results of the Company for the period ended on 31st March, 2003
show a net loss of Rs. 1656.15 lacs after providing for financial changes
of Rs. 1038.89 lacs and depreciation of Rs. 122.39 lacs.
During the 9 months under review on an annualized basis when compared to
the operational figures for the previous 15 months, the sales have
decreased by 4.76% from Rs. 5842.61 lac to Rs. 3338.91 lacs, and the
operating profit before interest, depreciation and taxes has decreased from
Rs. 107.88 lacs to Rs. (-) 331.60 lacs.
STATUS OF BIFR:
The Company had made reference to B.I.F.R. for determining the the measures
which should be adopted with respect of the Company to make the net worth
positive and the same has been registered with them under case no. 371/2003
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
In accordance with the requirements of section 217(i)(e) of the Companies
Act, 1956 read with the Companies (Disclosure of Particulars in the Report
of Board of Directors Rules, 1988, statement sharing particulars with
respect to conservation of energy, technology absorption and foreign
exchange earnings and outgo is given the Annexure.
The equity shares of the Company are listed on the Mumbai, Ahmedabad,
Chennai, Delhi and Notional Stock Exchanges.
Shri Narendra P.Mehta who retired by rotation at the Elewenth Annual
General Meeting of the Company field on September 30, 2003 end was re-
DIRECTORS' RESPONSIBILITY STATEMENT:
The Directors hereby assure that:
i) in 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 judgments and estimates that ore reasonable and
prudent so as to give a true and fair view of the state of pairs of the
Company at the end of the financial year and of the loss of the Company for
iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safe guarding 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
PARTICULARS OF EMPLOYEES:
The Company does not have any employee whose particulars are required to be
given pursuant to the provisions of Section 217 (2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975.
Pursuant to clause 49 of the Listing Agreement with the Stock Exchanges,
Reports on Management Discussion & Analysis and on Corporate Governance
along with a certificate from the Auditors forms part of this report.
The note nos. 14 and 12 of schedule 14 referred by the Auditors in their
report, are self-explanatory. In view of financial constraints, statutory
dues hove not been deposited on time. The reference made by the Auditors in
respect of doubtful debts is self explanatory.
M/s Naimish K Shah & Co, Chartered Accountants, the Auditors of the company
would retire of the adjourned Annual General Meeting and they are eligible
You are requested to appoint Auditors and to fix their remuneration.
The Board would like to thank Industrial Development Bank of India, Union
Bank of India, The Development Crudit Bank Limited, Gujarat State Financial
Corporation and the co-promoters Gujarat Industrial Investment Corporation
for their continued support. The contribution and selfless hard work put in
by the employees, deserves special mention. The Board would also like to
express its appreciation to the shareholders for the confidence reposed by
them in the Company.
For and on behalf of the Board,
N. R Mehta
Mihir T. Choksi
May 2, 2004
ANNEXURE TO DIRECTORS' REPORT
Information pursuant to the Companies (Disclosure of Particulars in the
report of the Board of Directors) Rules, 1988.
1. CONSERVATION OF ENERGY:
A. Power and Fuel consumption
Units (KWH) : 1824480
Total Amount (Rs.) 11115906.22
Rata/Unit (Rs.) 6.09
B. Generated Power
6736 LTS Purchase (Litres)
Total Units Generated (KWH) 24269
Total Amount (Rs.) 161664.00
Cost per unit (Rs.) 6.66
B. TECHNOLOGY ABSORPTION:
The Company has not imported any technology during the period under report.
3. FOREIGN EXCHANGE EARNINGS AND OUTGO:
The Company has earned on amount of Rs.45.89 lacs.
Foreign Exchange outgo was Rs. 99.36 lacs.
For and on behalf of Board
N. P Mehta
Mihir T. Choksi
Management Reports & Analysis:
We have pleasure in submitting the management discussion and analysis
report on the company's area of activities. We have attempted to include
discussion and analysis on all matters to the extent relevant or within
such limits that in our opinion are imposed by the companies own
competitive position. The company completed the year with adverse financial
and operating results in view of the recessionary trends in the Domestic &
Global Markets and also the pressure on margins in certain product lines,
coupled with substantial increases in raw material prices. On an Annualized
basis, during the 9 months under review, when compared to the operational
figures for the previous 15 months, the sales have decreased by 4.76% from
Rs.5842.61 lacs to Rs.3338.91 lacs, and the operating profit before
interest, depreciation and taxes has decreased from Rs. 107.88 lacs to
Rs.(-) 331.60 lacs.
Industry Structure & Development:
The operations of your company are structured into three separate segments.
(1) Manufacturing Sales
(2) Reprocessing Sales
(3) Trading Sales
All these segments relate to the business of Metals & Metals Products, in
the form of raw materials, semi finished & finished Goods.
Details of capacity & Turn Over referred to in the notes to the accounts,
are summarised as below:
Segments Quantity in MT Sales
Rs. in tars
(1) Manufacturing Sales 903 656.67
(2) Trading/Reprocessing Sales 918 2564.99
Total 1821 3331.66
The figures of manufacturing sales also includes sales on conversion basis
of Rs. 82.31 lacs.
The figures of trading sales, includes safe of 491 MT of reprocessed goods
amounting to Rs.1429.87 lacs.
The Industry structure in the field of manufacturing of Copper & Copper
Alloy products in India is spread wide, from minuscule to fairly large
capacities, with products ranging from ingots/billets to semi finished
items like tubes, rotted products, sheets and flats. While there is no
direct co relation in term of size v/s profitability, oil existing
manufacturers have worked out their own viable economic and product mix
depending upon various factors ranging from the alloys handled to the group
of customers services. In addition, in view of the large number alloys and
the product groups each manufacturer has established their own specialty
and growth areas.
However, there are very few large scale and modern manufacturing capacities
in the Country catering to the demand for sophisticated tube products, end
your company today, as one of the finest Copper & Copper Alloy facility in
the Country. The company today is a major supplier of condenser and Sugar
Bross Tubes to power equipment manufacturers, Condenser & Heat Exchanger
Manufactures, Sugar Mills & Sugar Equipment manufacturers in the country.
The company proposes to stabilizes its product mix in their specific
areas/customers, which con generate medium to high value addition and
towards this end, it aims to be the leading producer of products such as
condenser tubes, used in areas/applications like power, petrochemicals,
refineries and ship building.
On, an overall basis, the operations of the company ore substantially
capital intensive, with raw material and power, constituting the larger
proportion cost and increases in cost of any of these inputs, have a
substantial bearing on the profitability of the operations. Access to
working capital limits and continuous cash flows, are also an important
aspect of the industry and can contribute to efficient procurement of raw
In addition to the quest for higher capacity utilisation, we also firmly
recognise that customer satisfaction and relationship earned through good
quality products and timely deliveries, is a key to our success. Quality
has been built into products through appropriate manufacturing methods and
the process adopted and continuous development in areas of quality are
While the company is in process of obtaining certification under the ISO
9000 standards, currently, the manufacturing facility is approved by all
the major Government and Domestic Quality Control Agencies.
Operating in a value added segment with niche products,
State of the Art Plant incorporating latest technology and fully integrated
Successful and rapid penetration in an extremely demanding and
Easy availability of raw material
Flexibility of manufacturing within a given product mix and ability to
handle a large number of alloys.
Delay in implementation of Phase II, stagnating production of high value
export oriented products.
Fairly large level of borrowings and high cost of those debts.
Working capital constraints leading to low capacity utilisation.
Emerging overseas markets for sophisticated tube products and acceptability
of Indian manufactured products in the International Market. Turn around in
the domestic industry with substantial demand from core industries such as
power, refineries, petro chemicals etc.
New product lines in non-traditional applications providing marketing
opportunities untapped till today.
Emergence of new segments in the domestic market due to change in buying
power and increasing quality consciousness, in areas such as Copper Tubes
The raw material used by the company are commodities in nature and subject
to continuous fluctuations in prices. Current prices of raw materials are
of their highest in a decade and such levels will affect the demand of
products as well as hamper utilization, in view of increased requirement of
Reduction of custom duties on metal products imported from SAARC Countries,
leading to unremunerative prices for many product lines.
Environment & Safety:
We firmly believe that safe and healthy working conditions in factories and
other premises arts as necessary and important as production, productivity
and quality. Our policy requires conduct of activities in such a way as to
take for most account of health and safety of oil concerned, besides
conservation of natural resources and protection of the environment to the
We recognise that employees represent our greatest asset and potential. It
is only through motivated, creative and business-minded employees that we
can achieve our aims involvement, commitment, teamwork and continuous
updating of skills and knowledge are integral to our objectives of
advancing a highly professional, productive culture. Permanent employment
totals 218 of which officers and staff account for 36, and workmen for the
balance (last year 241 and 39 respectively).
Outlook, Risk & Concerns:
There are no further or typical areas of risks or concerns outside the
usual course of business foreseeable of this time. Internal current
systems are improving. Our team is committed to the Board's dictates on
standards of conduct as well as good governance and exercise of due
diligence, We have taken all care to diligently comply with all applicable
lows and regulations. The overall financial performance is in line with and
reflective of operational performance, liquidity constraints with customers
still impose cash flow and interest burdens on the businesses. Our outlook
continues to remain positive and we face challenges with sincerity. Our
sincere thanks to all employees and teammates whose dedicated and hard work
allowed level of operations/sales to be achieved. We are grateful to our
Bankers and concerned authorities for their continued support, and to all
our customers for their faith and confidence. We remain committed to
fullest customer satisfaction.
Statements in the Management's Discussion & Analysis Report which seek to
describe the Company's objectives, projections, estimates, expectations or
predictions may be considered to be "forward-looking statements" within the
meaning of applicable securities laws or regulations, Actual results could
differ materially from any expressed or implied. Important factors that
could make a difference to the Company's operations include global and
Indian demand-supply conditions, finished goods prices, feedstock
availability and prices, cyclical demand and pricing in the Company's
markets, changes in Government regulations, tax regimes economic
developments within India and countries with which the Company conducts
business besides other factors, such as litigation and labour