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Kareems Silk International Ltd.

BSE: 503830 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Kareems Silk International Ltd. (KAREEMSSILK) - Director Report

Company director report

KAREEMS SILK INTERNATIONAL LIMITED ANNUAL REPORT 2007-2008 DIRECTOR'S REPORT To The Members of the Company: Your Directors present their Thirty First Annual Report on the business and the operations of your Company and the audited Statement of Accounts for the year ended 31st March, 2008. Share Capital: The Authorised Share Capital and the Paid-up Share Capital of the Company remained at Rs. 6.00 Crores and Rs. 2.00 Crores respectively. Financial Results: The financial results for the year under report are as follows : Rs. in Lakhs 31-03-2008 31-03-2007 Sales - - Other Income 1.16 2.22 Loss before interest and 4.53 103.66 depreciation Less: Interest - - Depreciation 8.43 8.59 Loss for the year 12.96 112.25 Add: Previous years Loss 1746.15 1633.90 Loss transferred to 1759.11 1746.15 Balance sheet Status : In view of adverse market conditions, financial difficulties and labour non co-operation, the management of your Company has declared temporary closure of the Factory until further orders vide Notice dated 30-04-2004 with effect from 30-04-2004. Board for Industrial and Financial Reconstruction (BIFR): The matter referred to the Board for Industrial and Financial Reconstruction (BIFR) is pending Reconstruction (BIFR) is pending. Claims against Cascami 1872: The claims made by the Company against Cascami 1872 consequent to the determination of collaboration agreement then subsisting between them and the Company, on 16th June, 1985, by efflux of time, has not been settled by Cascami 1872 of Italy. There has been a change in the management of Cascami 1872. There has been no response by the present management of Cascami 1872 for the claims. Your Directors are therefore of the opinion that the recovery of the said claim is doubtful considering the high cost involved in litigation in the International Courts. However the dividend due to Cascami 1872 for the years 1988-89 to 1994-95 aggregating to Rs.26,17,500.00 (Net of tax) are retained exercising the lien in respect of the claims made by the Company against them. Management: Your Directors are sorry to inform that one of their learned colleagues in the Board, Sri Hyder Ali Khan passed away on 14-04-2008. Your Directors wish to place on record their appreciation for the valuable services rendered by Sri Hyder Ali Khan. Sri Mohammed Mohsin will be retiring by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. You are requested to re-appoint him as Director of the Company. Sri Mohammed Faisal, who was appointed as an Additional Director of the Company with effect from 15-04-2008 and who holds office upto the date of the Annual General Meeting seeks re-appointment as Director of the company in the Annual General Meeting. Necessary notice under Section 257 has been received from a shareholder. Directors' Responsibility Statement: The Directors' hereby state that: (i) in the preparation of the annual accounts, the applicable accounting standards had been followed and there had been no material departures; (ii) they had 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 and of the profit or loss of the company for that period; (iii) they 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) they had prepared the annual accounts on a going concern basis. Corporate Governance : The requirement of compliance with the code of Corporate Governance as prescribed by Clause 49 of the Listing Agreement is not applicable to the Company. Reply to Auditors observations : Board's explanation to items as mentioned below of Annexure to Auditors' Reports : Item No. 8 The Company has made a reference to Honorable BIFR seeking declaration as a sick industrial unit. The matter is pending disposal. The company would formally apply to the Central Government claiming exemption from conducting cost audit. Item No. 9 Your company has not been in a position to clear the undisputed statutory dues in respect of Employees' State Insurance (ESI) contributions and Central Excise duty on account of financial difficulties as the Company has become a sick industrial company and a reference has been made to Board for Industrial and Financial Reconstructions (BIFR) seeking rehabilitation. The dues will be settled if and when BIFR or any succeeding authority sanctions a Rehabilitation Scheme for your Company. Your Company also prefers to file an appeal with the appropriate authority in respect of Central Excise duty. Item No. 11 The dues to Banks and Financial Institutions could not be paid for want of resources and reasons already stated under item reference 9. Auditors: M/s. S. Janardhan & Associates, Chartered Accountants, Bangalore appointed as Statutory Auditors at the 30th Annual General Meeting held on 29th September, 2007 retire at the conclusion of 31st Annual General Meeting and are eligible, offer themselves for re-appointment. You are requested to re- appoint them as Statutory Auditors of the Company till the conclusion of the 31st Annual General Meeting. The observation made by the Auditors are self explanatory and have been dealt within the Notes vide Schedule 'N' forming part of the account and explained further by the Board in its Report of even date. Energy, Technology and Foreign Exchange: The particulars relating to conservation of Energy, Technology Absorption and Foreign Exchange earnings and out-go as required under Section 217(i)(e) of the Companies Act, 1956 and the Companies (Disclosure of particulars in the Report of Directors) Rules, 1988 are enclosed as part of the report. Industrial Relation: Your company did not function through out the year. Acknowledgement: The management is grateful to the Financial Institutions for their continued co-operation throughout the year. On behalf of the Board of Directors A.K. ABDUL SAMAD Chairman Place: Bangalore Date : 30th July, 2008 ANNEXURE TO THE DIRECTORS' REPORT The Companies (Disclosure of particulars in the Report of Directors) Rules, 1988. A. CONSERVATION OF ENERGY The Plant at Factory has not run for the year under report and there has been no consumption of power. B. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION Not applicable for reasons stated in 'A' above. C. FOREIGN EXCHANGE EARNINGS AND OUT-GO: The Company has earned no foreign exchange. On behalf of the Board of Directors A.K. ABDUL SAMAD Chairman Place: Bangalore Date : 30th July, 2008.