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Sandur Laminates Ltd.

BSE: 531316 Sector: Engineering
NSE: N.A. ISIN Code: N.A.
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Sandur Laminates Ltd. (SANDURLAMINATES) - Director Report

Company director report

SANDUR LAMINATES LIMITED ANNUAL REPORT 2006-2007 DIRECTOR'S REPORT The Directors present their Report and Accounts for the year ended 31 March 2007. Financial Results: Rs. Crore 2006-07 2005-06 Profit/(Loss) for the year before interest and depreciation. (0.02) 0.07 Add: Interest - (70.08) Add: Depreciation (3.62) (3.63) Loss before Exceptional item (3.64) (73.64) Less: Exceptional item Liabilities no longer required written back 333.20 - Profit/(Loss) after Exceptional item 329.56 (73.64) Loss brought forward from previous year (353.37) (279.73) Deficit carried to Balance Sheet (23.81) (353.37) During the year ended 31 March 2007,the company made a profit of Rs.329.56 crore after taking into account an exceptional item of liabilities totalling Rs. 333.20 crore, no longer recurred and hence written back and after charging depreciation of Rs. 3.62 crore. The capacity utilization at the factory was nil owing, to working capital constraints. Reference to BIFR: The Company was declared as a 'Sick Industrial Company' by the Board for Industrial and Financial Reconstruction (BIFR) on a reference made by the Company when the accumulated losses exceeded the net worth. As the Company was not able to tie up a viable rehabilitation proposal,the BIFR recommended winding up of the Company and the matter was referred to the Hon'ble High Court of Karnataka. Subsequently a negotiated settlement was reached year the financial institutions and a bank and the strategic partner having fully cleared the dues as per the negotiated settlement, the Company has received no due certificates from these institutions and a bank. In view of these developments, on a petition made by the Company, the Hon'ble Karnataka High Court has remanded the winding up recommendation back to the BIFR for 3 reconsideration of its earlier decision and sandioning a suitable revive proposal. At its hearing geld on 14th May 2007 the BIFR directed the Company to submit revival proposal through Operating Agency (OA)IDBI. Accordingly,the Company teas submitted a rehabilitation proposal to the IDBI for issue of a Sanctioned Scheme. Auditors Remarks: 1. As per the negotiated settlements reached with the financial institutions and bank the strategic partner has fully cleared the dues and obtained no due certificates. A revival proposal has already been submitted to the Hon'ble BIER under which the Company is expected to result in adequate cash flows. Hence the preparation of accounts on going concern basis is in order. 2. The Company is negotiating for waiver of interest on advances received from certain companies in view of huge losses incurred by the Company in the past years. The Company is confident of obtaining necessary waivers from the parties. 3. As per the revival proposal submitted to the BIFR, the Company proposes to use the existing plant and machinery at the Company's factory premises to produce Solar Photovoltaic Modules and generate enough returns to justify their valuation, in the books of accounts. Dividend: In the absence of any profits, it is not possible to declare a dividend. Directors: Shri. Mohammed Abdul Saleem was nominated by one of the promoters of the Company viz.,The Sandur manganese & Iron Ores Limited vide its resolution dated 28 April 2007 and accordingly tie has been co-opted on the Board of Director at its meeting held on 30 April 2007 Further. The Company has received a notice along with a deposit of Rupees Five Hundred proposing his appointment as a Director in accordance with the provisions of Section 257 of the said Act. Board of Directors commend the resolution: Shri U.R. Acharya and Shri A G Suresh, Directors of the Company, retire by rotation and being eligible, offer themselves for re-election. None of the Directors are disqualified from being appointed as Directors of the Company by virtue of the provisions of Section 274 of the Company Act,1956, as amended by Companies Amendment Act, 2000. Auditors: M/s. A. F. Ferguson Associates, Chartered Accountants, retire and being eligible, offer themselves for re-appointment. Directors responsibility statement: In accordance with the provisions of Section 217(2AA) of the Company Act, 1956, your Directors state that: * In the preparation of accounts,the applicable accounting standards have been followed. * Accounting policies selected were applied consistently, with reasonable and prudent judgments being made so as to give a true and fair view of the state of affairs of the Company as at the end of 31 march 2007 and of the profit for the year ended on that date. * proper and sufficient care has been taken 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 frauds and other irregularities. * The annual accounts of the Company have been prepared on a going concern basis. Corporate governance: The Directors Report on Corporate Governance is annexed to this report. The certificate of the auditors, M/s A.F.Ferguson Associates, Chartered Accountants, regarding compliance of conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges is also annexed hereto. Conservation of Energy: The particulars as prescribed under Section 217(I)(e) of the Companies Act, 1956, read with Companies (Disclosure of particulars in the report of Board of Directors) Rules,1988,are not applicable as the factory has been closed through out the financial year. Foreign Exchange earnings and outgo: During the year ended 31 March 2007, the Company had no Foreign Exchange earnings or outgo. Employees: During the year ended 31 March 2007, there were no employees whose particulars are required to be disclosed under Section 217(2A.) of the Companies Act,1956. On behalf of the Board of Directors Place: Bangalore VENKATRAO Y. GHORPADE Date: 5 September 2007 Chairman & Managing Director MANAGEMENT DISCUSSION AND ANALYSIS REPORT: The Company's operations continued to be severely affected during the year under review owing to working capital constraints and as a result, the production of Copper Clad Laminates was essentially halted at the factory. Owing to the promoter's inability to induct additional funds into the Company or to submit a firm rehabilitation proposal, the BIFR, at its hearing on 12 June 2003, passed orders for winding up the Company. During the year the Company was able to make negotiated settlement with its secured creditors under which the strategic partner has made all the payments to the institutions and bank towards the settlement. The Company has also filed compromise petitions with the DRT along with all the secured creditors. Based on the managed circumstances, the High Court of Karnataka, to whom BIFR had forwarded a copy of its order for winding up of the Company, has now referred the matter back to BIFR for sanction of a suitable revival package. Outlook, risks and concerns: The international demand for Copper Clad Laminates continues to grow, driven by an increasing demand for electronic equipment. The pricing for CCL has also firmed up. In the absence of a strategic partner to infuse funds for working capital and provide economies of scale In procurement of raw materials, the Company has not been in a position to take advantage of the growing demand for Copper Clad Laminates. A proposal to manufacture Photovoltaic Modules at the SLL factory utilizing most of the equipment installed therein has been studied and found to be technically feasible and commercially viable. With the understanding reached with its strategic partner to commercialize this activity a negotiated settlement has been arrived at with Financial Institutions. As stated earlier, the Honble High Court of Karnataka has referred our case back to the BIFR for sanctioning a suitable revival proposal. Segment wise performance: The Company has presently only ode segment of operations, viz., the Copper Clad Laminates factory at Sandur, the operations of which were practically suspended during the year for want of working capital. Internal Control Systems and their adequacy: The Company has well developed internal control systems and clearly defined delegation of powers to its executives. The Company has an Internal Audit Department which shall independently monitor the compliance with the, approved internal control procedures and exercise of powers strictly as per the approved delegation of powers. However, presently the Company does not have any employees. Financial performance: For the year ended 31 March 2007 Incurred a loss of Rs 364.72 lakh after depreciation of Rs. 362.41 lakh but before considering execeptional item relating to liabilities no longer required. The profit figure for the year after considering the exceptional item was Rs 32955.90 lakh. Material Development in Human Resources/ Industrial Relations: Under the Voluntary Retirement Scheme all the employees of the Company have retired from the services.