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Micro Forge (India) Ltd.

BSE: 522298 Sector: Engineering
NSE: N.A. ISIN Code: INE550E01018
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Micro Forge (India) Ltd. (MICROFORGEI) - Director Report

Company director report

MICRO FORGE (INDIA) LIMITED ANNUAL REPORT 2007-2008 DIRECTOR'S REPORT To The Members Micro Forge (India) Ltd. The Directors of the company hove pleasure in presenting their TWENTIETH ANNUAL REPORT together with the Audited Statement of Accounts of your Company for the Financial Year ended on 31st March, 2008. I. Financial performance: Financial year Ended on 31.03.2008 31.03.2007 Export Sales Incentives Domestic sales and other Income 4680.27 2667.91 Total Sales & Income 7916.05 7974.13 Profit Before Depreciation -1701.08 502.64 Profit After Depreciation -1722.40 476.98 Provisions for Taxes 1.25 166.93 Profit/Loss after Taxes -1723.66 310.04 The company figs incurred heavy loss during the year due to quality parameter failure in one product of stainessless steel which failed in quality parameter. The material war purchased on high value while realisation value determined only scrap value. Due to such heavy loss, entire capital was crroded during the year and company become a Sick Industrial Unit as per provision of the Sick Industrial Company (Special). 2. Dividend: The Board of Directors of the company do not recommends dividend for the year 2007-2008 due to heavy losses. 3. Directors During the Year Shri Jagneshwar Das, Shri Himmat R. Parmar and Shri Ramdeo Choudhry had resigned and vacate their office from the directorship of the Company. 4. Auditors: The Statutory Auditors M/s. M.B. Thummar & Co, Chartered Accountants, shall retire at the conclusion of the ensuing Annual General Meeting and being eligible. 5. Particulars of Employees: There are no Employees, whose details are required to be ma toned as per section 217(2A) of the Companies Ad, 1956. 6. Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo: In terms of the provisions of Section-217 (f) (e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the report of the Board of Directors) Rules 1988, the details cue given in Annexure-I and forms a part of this Report 7. Audit Committee: In compliance of the provisions of the Section-292A of the Companies Act, 1956 and the Listing Agreement with the Stock Exchanges, he Audit Committee discharges its functions in accordance with the provisions of the Listing Agreement and Companies Act, 1956 in absesnce of independent directors. The Audit Committee of the company comprises of the following Directors Shri Shivabhai Patel Shri Rasikbhai Patel 8. Responsibility Statement: As required under Section-217 (2AA) of the Companies Act, 1956, the Directors of the company hereby state and confirm. i. That in the preparation of the annual accounts, the applicable accounting standards so far as possible had been followed along with proper explanation relating to material departure; ii. That 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 the affairs of the company at the end of the financial year and of tire profits of the company for What period; iii. That the Directors had taken proper and sufficient case for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act. 1956 for safeguarding the asses of the company and for preventing and detecting fraud and order irregularities: iv. That the Directors had prepared the annual accounts on a going concerns basis. 9. Corporate Governance Your company has been practicing the principles of good Corporate Governance over the years and it is continuous process. A detailed report on Corporate Governance along with Auditor's Certificate on its compliance is attached herewith as a part of the Annual Report. 10. Management Discussion and Analysis Report: a. Industry Structure & Development: The company's business relates to the forging of steel products. The Indian forging industry is trade up of 330 player having production capacity of approximate 1 million tonne p.a. Industry's exports recorded a growth of almost 24% in 2005-06 and have reached level of US$ 310 million. The targeted exports of auto components industry is US$ 1.2 billion by 2015. h. Opportunity. Threats and Outlook Risk & Concerns: The increase competition among forging players and high volume transactions in the products limits the increments in service prices and improvement in profits. However, we continuously strive to differentiate ourselves from the competitors and to innovate the services model. Failure on quality parameter may reverse the result of the company. c. Segment/Product wise perfortnance: The company's operation falls under single segment namely, 'Forging of steel products'. Hence, segment wise performance is not furnished. d. Internal control systems and their adequacy: The Company has in place an moderate Internal Control System. The team ensures an appropriate information flow and effective monitoring. e. Discussion on financial performance with respect to operational performance: The Financial Performance of the company, during the year under review, has been given separately in the Directors' Report. f. Material development in Human resources/Industrial relation front, Including number of people employed: The Industrial Relations of the company are amicable and peaceful. 11. Appreciation Your Directors take this opportunity to thank all investors. banks, regulatory, governmental authorities for their continued oo-operation during the year. Your Directors sincerely acknowledged the significant contribution made by all the emploees for their dedicated services to the Company. For, and on behalf of the Board of Director Shivabhai G. Patel Chairman date : 11.05.2008 Place: Rajkot ANNEXURE-I ANNEXURE TO DIRECTORS' REPORT INFORMATION UNDER SECTION 217 (1) (C) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF DIRECTORS' REPORT. FORM - A [A] CONSERVATION OF ENERGY: 1. POWER AND FUEL CONSUMPTION i. ELECTRICITY CONSUMPTION Current year Previous year 31.03.2008 31.03.2007 a) Consumed Units 2,079,545 2,629,379 b) Total Amount (Rs.) 9,831,058 10,894,996 c) Average rate per Unit (Rs.) 4.73 4.14 ii. FUEL OIL a) Total Amount Rs. 17,982,628 15,024,077 b) Consumption MT-/kg 868.357 909.208 c) Average rate per MT. (Rs.) 20708.80 16524.36 2) CONSUMPTION FOR UNIT OF PRODUCTION: CURRENT YEAR PREVIOUS YEAR 31.03.2008 31.03.2007 PER M.T. PER M.T. Electricity FUEL Electricity FUEL Forged Articles Units MT./kg Units MT 162.30 0.068 195.40 0.068 FORM B: [B] TECHNOLOGY ABSORPTION: No such expenses incurred for the Research and Development during the year under review. Similarly, no such expenses incurred for Technology, Absorption, Adoption and Innovation during the year. [C] FOREIGN EXCHANGE EARNINGS AND OUTGO: Current Year Previous Year 31.03.2007 31.03.2006 Total Foreign Exchange Earned (FOB) 287444770 392322055 Total Foreign Exchange Outgo NIL NIL FOR AND ON BEHALF OF THE BOARD OF DIRECTORS, Sd/- DATE : 11.05.2008 SHIVABHAI G. PATEL PLACE: RAJKOT CHAIRMAN