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Niryat Sam Apparels (India) Ltd.

BSE: 531836 Sector: Industrials
NSE: N.A. ISIN Code: INE645D01018
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Niryat Sam Apparels (India) Ltd. (NIRYATSAMAPP) - Director Report

Company director report

NIRYAT-SAM APPARELS (INDIA) LIMITED ANNUAL REPORT 2007-2008 DIRECTORS' REPORT Your Directors have pleasure in submitting hereunder, their 14th Annual Report together with Audited Accounts of the Company for the year ended 31st March 2008. 1. FINANCIAL RESULTS: During the year 2007-2008 the Company has achieved a turnover of Rs.205.82 Lakhs and earned a profit of Rs.135.00 Lakhs. The accumulated losses of the company upto the end of this financial year are Rs.2233.77 Lakhs. The revenues of the company during the year are mainly from leasing out of immovable properties, some trading activities in apparels have also taken place during the year. This is the Third full year during which the immovable properties of the company have been given on lease. In order to meet the fixed cost and to generate funds for day to day working, in the earlier years the leasing out of the properties became inevitable and the profit derived during the year is mainly on this account. The company has Cumulative Redeemable Preference Shares of Rs.2500 lakhs, after the extension of their initial period of redemption now these are due for redemption in the year 2010. Further, due to bad financial position of the company, it was not in a position to pay preference dividend on these shares, however the preference shareholders have waived preference dividend payable on the same. 2. LISTING OF SHARES: Initially the equity shares of the Company were listed with Delhi, Mumbai, Kolkata, Ahmedabad and Jaipur Stock Exchanges. in terms of Guidelines for Delisting issued in 2003; the shareholders in the previous years decided to delist shares from all Stock Exchange. Accordingly, the board of directors filed application for delisting with stock exchanges except Mumbai Stock Exchange. Delhi, Ahmedabad & Jaipur Stock Exchanges have already delisted company's shares from their stock exchanges in earlier years. However, inspite of completing all procedures Kolkata Stock Exchange is yet to confirm delisting of shares. In respect of delisting of shares from Mumbai stock exchange suitable steps as and when found appropriate will be taken in accordance with the applicable Delisting Guidelines. The Company has already paid lasting fee due to the Mumbai stock exchange for the financial year 2007-2008. 3. INSURANCE: All the properties and insurable interests of the company including Building, Plant and Machinery, Stocks etc., are adequately insured. 4. BOARD OF DIRECTORS: The board of directors of the company comprises of the following: i) Shri S.K.Jain, Managing Director ii) Shri V P Mittal, Director iii) Shri R.S.Agarwal, Director iv) Smt. Shrija Jain, Director Shri VP.Mittal, director of the Company is retiring by rotation at the forthcoming Annual General Meeting of the Company and is eligible for re- appointment. 5. AUDITORS: M/s Shanti Prashad & Co., Chartered Accountants are the auditors of the company for FY 2007-08 and they are retiring at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re- appointment. It is proposed to appoint them as auditor of the company. The requisite certificate under Section 224 of the Companies Act, 1956 has been received from them. 6. AUDIT COMMITTEE: The membership of the Audit Committee is as under: i) Shri VP Mittal, Director ii) Shri R.S. Agarwal, Director iii) Smt. Shrija Jain, Director 7. DIRECTOR'S STATEMENT: In pursuance of Section 217 2(AA) of the Companies Act, 1956 the directors hereby confirm the following: i) That in the preparation of the annual accounts, the applicable accounting standards have been followed; ii) That they have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give 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) That they 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 f,rr preventing and detecting fraud and other irregularities; and iv) That they have prepared the annual accounts on a going concern basis. 8. BANKERS: Your Company places on record its appreciation to its Bankers and Financial Institutions for their timely assistance and co-operation. 9. PARTICULARS OF EMPLOYEES: There were no employee drawing remuneration equivalent to or exceeding the amount prescribed under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975. 10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Information in accordance with the provisions 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, regarding conservation of energy, technology absorption and foreign exchange earning and outgo are given in Annexure to Directors report. 11. PERSONAL RELATION Your directors place on record their appreciation for the dedicated services rendered by the work force of the Company. By order of the Board For NIRYAT SAM APPARELS (INDIA) LTD. Place : New Delhi (S.K. Jain) Dated : 07-06-2008 Chairman ANNEXURE TO DIRECTORS REPORT FORM - A PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY The following measures have resulted in conservation & efficient utilization of energy: i. Regular preventive maintenance of the available systems & equipment with the company; and ii. Switching off electrical load when not required. FORM B PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION In the past, the company had acquired technology from its collaborator, however, due to suspension of manufacturing operations and giving on lease the available immovable properties the technology available is not being utilized. FORM C FOREIGN EXCHANGE EARNINGS AND OUTGO: 1. Foreign Exchange earning : Rs. NIL 2. Foreign Exchange outgo : Rs. NIL MANAGEMENT DISCUSSION AND ANALYSIS 1. Industry Scenario & Financial Performance: The company is in the industry of apparels which sector has not done fairly well in the previous year. However, due to continuing losses incurred in the earlier years the manufacturing activities were suspended & plant & machinery were sold. In order to meet fixed expenses and reduce losses, the immovable properties available have been leased out. Therefore, the revenue of the company now are mainly from leasing out of the immovable properties. Long Term Fund Management: The company prepaid all its high cost long-term loans during earlier years. The prepayment was done by raising funds through the issue of Cummulative Redeemable Preference Shares. It is now a debt free company and has no major outside liabilities outstanding. Inspite of all this, the company is not in a position to pay dividend on its Cumulative Redeemable Preference Shares. Looking into the financial conditions of the company, these shareholders have decided to extend the period of redemption of these shares and have also agreed to waive the dividend due on the same till now. 3. Company's Performance: During the year the company has achieved a turnover of Rs.205.82 lakhs and has earned a net profit of Rs.135.00 lakhs, this turnover and profit is mainly from leasing of immovable properties of the company. However, the accumulated losses at the close of the financial year stand at Rs.2233.77 lakhs. A brief description about company's Assets and Liabilities is as under: a) Share Capital The authorized share capital of the company is Rs.3500 lakhs divided into equity share capital of Rs.1000 lakhs and cumulative redeemable preference shares capital of Rs.2500 lakhs. The paid up share capital of the company comprises of Rs.777.06 lakhs of equity shares capital, Rs.2500 lakhs of cumulative redeemable preference share capital and Rs.9.51 lakhs of amount forfeited on account of non payment of amount due on allotment/calls by the equity shareholders. The share capital is in the form of equity shares having a face value of Rs 10/- per share and cumulative redeemable preference shares have a face value of Rs.100/-. In an earlier years, Shri. Subodh Kumar ,lain, Managing Director has informed that he has acquired 67,04,400 equity shares (51,48,200 equity shares from M/s INOX leasing & finance Ltd., holding company & 15,56,200 equity shares from M/s Gujrat Fluorochemicals Ltd.) of the company. After compliance of all provision of law including provision of SEBI's Substantial Acquisition and Takeover Regulation, 1997 during 2006-07 these shares have been transferred in favor of Shri S.K.Jain, Managing Director of the company. b) Secured Loans & unsecured loans All the loans taken by the company from the financial Institutions and Banks have already been repaid/prepaid. Therefore, there are no secured loans as on 31.03.2008. The unsecured loan consists of Rs. Nll lakhs has been fully repaid during the year. c) Fixed Assets (Rs. in lakhs) Year Ended March 31 2008 2007 %age change Original cost of Assets 1,072.58 1,075.65 (0.28) Less Accumulated Depreciation 300.95 266.56 12.90 Net Fixed Assets 771.63 809.09 (4.62) The decrease in the fixed assets is minor which is due to sale of old car etc. d) Inventories The inventory as at 31st March 2008 was Rs.0.23 lakhs, which was Rs.1.01 lakhs at the end of previous year. As there are hardly any operations except some trading activities the inventory level is negligible. e) Sundry Debtors The total sundry debtors as on 31st March 2008 are NIL (previous year NIL). f) Cash and Bank Balances The cash and bank balance at the close of the accounting year is Rs. 46.35 lakhs (previous year Rs.13.09 lakhs). g) Loans and Advances: The loans and advances at the close of the year are Rs. 113.54 lakhs (previous year Rs.98.88 lakhs), it is the amount paid to NOIDA, UPSEB, & Tax deducted by HCL,.etc. h) Income & loss incurred: During the year the turnover of the company is Rs.205.82 Lakhs (previous year Rs.181.24 lakhs). The net Profit to the company during FY 2007-08 is Rs. 135.00 lakhs (previous year Rs.89.86 lakhs) 4. Internal control systems and their adequacy: The Company has proper and adequate systems of internal controls in order to ensure that all assets are safeguarded against loss from un-authorized use or disposition and that all transactions are authorised, recorded and reported correctly. Management continuously reviews the internal control systems and procedures to ensure orderly and efficient conduct of business. The review includes adherence to the management policies, safeguarding the assets of the Company and ensuring preparation of timely and accurate financial information. 5. Outlook: We do not expect significant revival & any material pick up in the Company's performance. Having said that, we will strive to develop new products, enter new business segment and will take initiatives to improve the performance of the company. Our outlook for growth in the Company's performance is cautious & conservative. 6. Risks & Concerns: The financial performance of the company has been a matter of concern for the board. The leasing out of immovable properties has reduced continuous accumulation of losses over the years. There is .not much risk involved in this stream of income, however all efforts are being made, including looking for other business alternatives so as to safeguard the interest of shareholders in the best possible manner. 7. Cautionary Statement: Statements in this report on Management's Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could however differ materially from those expressed or implied. Important factors that could make a difference to the Company's working include changes in Government regulations and tax structure, economic developments within India and other factors such as litigation and industrial relations, etc. The Company assumes no responsibility in respect of forward looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events. For and on Behalf of the Board of Director Place: New Delhi (S.K. Join) Date : 07-06-2008 Chairman