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JMP Castings Ltd.

BSE: 531159 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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JMP Castings Ltd. (JMPCASTINGS) - Director Report

Company director report

JMP CASTINGS LIMITED ANNUAL REPORT 2005-2006 DIRECTOR'S REPORT Dear Members, The directors of your Company wish to present the 16th Annual Report on the Company together with Audited Statement of Accounts and Auditors' Report thereon for the year ended 31st March, 2006. The financial year 2005-06 has ended by leaving a profit of Rs.10.42 Lakhs as against last year profit of Rs.0.95 lakhs. Though there is decrease in production, but margin decline in sales due to change in product mix, being more emphasis on production of motor vehicle parts. THE YEAR IN REVIEW: PRODUCTION: Product Name 2005-06 2004-05 C.I Castings 63 152 SG Iron Castings 55 283 M.V. Parts 1042 1017 Total (MT) 1160 1452 Sale: The sales during the current year was Rs.594.00 Lakhs (previous year Rs.610.08 Lakhs). The company is in negotiation with more customers in castings and M.V. component segment as a result of which the sales are likely to improve in next year. FINANCIAL: Your Company is now a debt free company as there are no liabilities towards any financial Institute. FUTURE OUTLOOK: Despite of the adverse market scenario, as aforesaid, your Company proposes to increase the business of castings, machined castings and M.V. Parts by exploring new more customers and new areas for which, steps have already been taken up. Thus, a increase in business of your company is anticipated in the next financial year. STOCK EXCHANGES & LISTING FEES: The shareholder may note that your company is listed with Ludhiana Stock Exchange. The Stock Exchange. Mumbai. The Ahmedabad Stock Exchange. Calcutta Stock Exchange and Delhi Stock Exchange. The arrears of listing fees shall be paid in short time. DIVIDEND: In view of marginal profit to the company, the Board of Directors have not recommended payment of dividend this year. ENERGY CONSERVATION AND TECHNOLOGY ABSORPTION: Due importance has been given to energy conservation and development programs. The statutory details in respect of energy conservation and foreign exchanges outgo pursuant to Rule 2 of Companies (Disclosure of Particulars in Report of Directors) Rule 1988 are annexed to the Report. DIRECTORS: In accordance with the provisions of Companies Act, 1956 and Company's Articles of Association, S/Sh. Rajinder Kapoor, Jatinder Kapoor & Mrs. Nirmala Kapoor directors of the Company are to retire by rotation and being eligible has offered themselves for reappointment. MANAGMENTS' CONDUCT: During the financial year, all the members of the board & the members of the senior Management had complied with the code of conduct formulated by the Board. The declaration for the same has been given by the Managing Director of the Company and is annexed herewith as Annex-1. OPPORTUNITY AND THREATS: With the increase in demand of castings and auto components sector the company is getting inquiries of its products from all segments especially tractor, automobile and pipe fitting industry. So, the company is looking for a better future. The products of the company are highly price sensitive due to great fluctuations in the prices of raw materials and electricity prices against the upward trend of costs, your company is not getting the price to substantiate this increase in cost. However, your company is striving for cutting in the costs wherever best can be possible. RISKS AND CONCERNS: The volatility in raw material, electricity and wages rates in the state as well as in the country has a bearing on the profitability of the company. Finished goods prices are not increasing in direct relation to the increase in costs However, the company negotiates on red intervals with its customers to increase prices of finished goods. Your company has made a move through the chamber of commerce and industry to the central government to reduce the customs duty on imported scraps and pig iron to overcome this problem. RESPONSIBILITY STATEMENT: In compliance of recently introduced Section 217(2AA) in the Companies Act, 1956, your directors state that: i. In the preparation of the annual account, the applicable accounts standards had been followed along with proper explanation to material departures; ii. The Directors had selected such accounting policies and applied them consistently and made judgments 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 financial year and of the profit of the company for the period; iii. The Directors had 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; and iv. That the Directors had prepared the annual accounts on a going concern basis. ADEQUACY OF INTERNAL CONTROLS: Your company has installed adequate internal controls system in combination with the delegation of powers The control systems are also supported by internal audits and management reviews with documented policies and procedures. CORPORATE GOVERNANCE: The Company has complied with the requirements regarding Corporate Governance as required under Clause 49 of the Listing Agreement entered into with the Stock Exchanges, where the Company's shares are listed. A report oil the Corporate Governance in this regard is made a part of this Annual Report and a Certificate from the Company Secretary of the Company regarding compliance of the conditions of the Corporate Governance is attached to this report. INDUSTRIAL RELATIONS AND PARTICULARS OF EMPLOYEES: The Company continues to maintain good industrial relations with the employees. The Board places on record its appreciation of their devotion to the Company's objectives. None of the Company's employee comes under the provisions of Section 217(2A) of the Companies Act read with the Companies (Particulars of Employees) Rules 1975, as amended. The number of employees as on 31.03.2006 were 98. AUDITORS: M/s. Ashwani Gupta and Associates, Chartered Accountants, Jalandhar will hold office until the conclusion of 15th Annual General Meeting Being eligible they offered themselves for reappointment. So, they are recommended for reappointment from the conclusion of the 16th Annual General Meeting to the 17th Annual General Meeting. The certificate with regards to their appointment has been received so far and the appointment, it made, would be within the limits prescribed under section 224(1B) of the Companies Act, 1956. AUDITORS' REPORT The observation and suggestions pointed out by the auditors in their report for this period are of routine nature the need no special explanation thereto. DEMATERIALIZATION OF SECURITIES: Securities & Exchange Board of India has directed that dematerialization of the equity shares of your company is compulsory for listing of shares. Therefore, your Company has already submitted an application to NSDL and CDSL and is in process for executing necessary agreement and for has appointed Registrar & Transfer Agent for dematerialization of its securities. ACKNOWLEDGEMENT: Your Directors wish to record the shareholders, banks government authorities and to the staff for the continued support and good will. For & on behalf of the Board Place: Jalandhar Rajinder Kapoor Date : July 28, 2006. Mg. Director ANNEXURE TO THE DIRECTOR'S REPORT A. CONSERVATION OF ENERGY: a. Energy Conservation measures taken: Capacitor Bank has been installed to improve the power factor. b. Additional investment and proposal, if any, being implemented for reduction of consumption of energy: No additional investment is proposed for time being. c. Impact of measure at above (a) & (b) for reduction of energy consumption and consequent impact on the cost of production of goods: Energy consumption and the cost of production has been reduced. d. Total energy consumption & energy consumption per unit of production: As per Form-'A' attached. B. TECHNOLOGY ABSORPTION: a) Efforts made in technology absorption: As per Form-`B' annexed. C. FOREIGN EXCHANGE EARNING AND OUT GO: a. Activities relating to exports, development of new export markets for product and services, an export plans: The Company has made export. b. Total foreign exchange earned and used: Current Year Previous Year Earned$ 3054.20 0.00 Used 0.00 0.00 FORM-`A' (See Rule 2) None for disclosure of particulars with respect to conservation of energy: A. POWER AND FUEL CONSUMPTION: Year Ended Year Ended 31.03.2006 31.03.2005 1. Electricity: a. Purchased: Units(Kwh) 2360240 3149261 Total Amount (Rs. Lakhs) 99.07 118.86 Rate/Unit (Rs.) 4.38 3.75 b. Owns Generation: 1. Through Diesel generator Units (Kwh) 27147 3230 Unit per liter of diesel oil 32.00 25.00 Cost/Unit (Rs.) 5.18 4.56 Through Steam Turbine generator Units 0.00 0.00 Unit per liter of fuel oil/gas 0.00 0.00 Cost/Unit (Rs.) 0.00 0.00 2. Coal (Specify quality and where used): Quantity (tons) 0.00 0.00 Total Cost (Rs. Lakhs) 0.00 0.00 Average Rate 0.00 0.00 3. Furnace Oil: Quantity (K. Liters) 120 114 Total Amount (Rs. Lakhs) 276 13.36 Average Rate 23 12.84 4. Other/Internal Generation: (please give details) Quantity 0.00 0.00 Total Cost (Rs. Lakhs) 0.00 0.00 Rate/Unit (Rs.) 0.00 0.00 B. CONSUMPTION PER UNIT OF PRODUCTION: Particulars Unit Standard Year Ended Year Ended (if any) 31.03.2006 31.03.2005 Raw Materials Ton. N.A. 1.002 1.002 Electricity Kwh. N.A. 2034.6897 2168.904 Furnace Oil Litre N.A. 95.28 78.729 Coal (Specify Kgs. N.A. 0.000 0.0050 quality) Others N.A. N.A. 0.000 0.0000 (Specify) FORM-`B' (Form for disclosure of particulars with respect to technology absorption) RESEARCH AND DEVELOPMENT: 1. Specific Areas in which R&D carried out by the Company: 2. Benefits derived as a result of above R&D: Quality improvement. 3. Future Plans of action: The company proposes to acquire metal refining technology based on computer controlled systems. 4. Expenditure on R&D: a. Capital Rs. 0.00 b. Recurring Rs.45735.00 c. Total Rs.45735.00 d. Total R&D Expenditure as a total % of the Turnover % 0.07 TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION: 1. Efforts, in brief, made towards technology absorption, adaptation and innovation: Only available technology is being used so far. 2. Benefits derived as a result of above efforts e.g. product improvement, cost reduction and import substitution etc.: Product Improvement 3. In case of technology imported during the last years (reckoned from the beginning of financial year), following information may be furnished: Not Applicable. a. Technology imported Not Applicable b. Year of import Not Applicable c. Has technology absorbed. Area where this Not Applicable has taken place. Reasons therefore and future plan of action. Place: Jalandhar. For & on Behalf of Board Date : 28.7.2006 Rajinder Kapoor, MD.