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Shamken Cotsyn Ltd.

BSE: 514209 Sector: Industrials
NSE: N.A. ISIN Code: INE352D01011
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Shamken Cotsyn Ltd. (SHAMKENCOTSYN) - Director Report

Company director report

SHAMKEN COTSYN LIMITED ANNUAL REPORT 2006-2007 DIRECTOR'S REPORT Your Directors present the Annual Report together with audited accounts of the Company for the period ended 31st March, 2007. In Rupees FINANCIAL RESULTS YEAR ENDED PERIOD ENDED 31.3.2007 31.12.2006 Sales & Other Income 35,662,851 62,095,106 Profit/ Loss After Tax (35,521,262) (69,921,973) (Loss) profit Loss B/F from previous year (427,900,448) (357,978,475) Profit/Loss available for appropriation (463,421,711) (427,900,448) Dividend: In view of the accumulated losses your Board is unable to declare any dividend for the period under review. DIRECTORS: Mr. K.P. Saxena and Mr. H.B. Chaturvedi, Directors of the Company, retire by rotation and being eligible, offer themselves for re-appointment. Your Board recommends their appointments as Directors. AUDITOR'S REPORT: The observations of the auditors in their report read with the relevant notes to accounts are self explanatory. AUDITORS: The Auditors of the Company, M/s Rakesh Chauhan & Associates, Chartered Accountants, retire at the ensuing Annual General Meeting of the Company and have given their consent for re-appointment. The Company has also received a Certificate from them under Section 224(1B) of the Companies Act, 1956. COST AUDITORS: The Central Government's cost Audit order specifies audit of Cost Accounting Records for certain specified products every year. The Board of Directors, subject to the approval of the Central Government, has appointed M/s S. K. Mittal & Co., Cost Account, to carry out the cost audit for the year under review at remuneration to be decided by the Board of Directors. CORPORATE GOVERNANCE: As required by Clause 49 of the listing agreement, the reports on Management Discussion and Analysis, Corporate Governance as well as the Certificate from the Company Secretary in Practice regarding compliance of conditions of Corporate Governance, are annexed as annexure - II, III & IV respectively and form an integral part of this report. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Information pursuant to Section 217(1)(e) of the companies Act 1956 read with the Companies (Disclosures of particulars in the report of Board of Directors) Rule, 1988 is given in the Annexure-1, forming part of this report. FIXED DEPOSITS: Your Company has been discharging payments to its deposit holders. It owns liability to the tune of Rupees 16,178,832 against a deposit holder 838. PARTICULARS OF EMPLOYEES: Information in accordance with the provisions of section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rule, 1975 as amended, there is no employee employed by the Company either for whole or part of the year drawing remuneration in excess of the limits laid down under the rules mentioned above. DIRECTOR'S RESPONSIBILITY STATEMENT: Pursuant to Section 217 (2AA) of the Companies Act, the Directors confirm that in preparation of Annual Accounts. a. That in the preparation of the accounts for the Period ended on 31st March, 2007 the applicable Accounting Standards have been generally followed. b. That such Accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent made so as to give a true and fair view of the state of affairs of the Company at the Period ended 31st March 2007. c. That proper and sufficient care has been taken for 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. d. That the accounts for the period ended 31st March 2007 have been prepared on a going concern basis. APPRECIATION: Your Directors wish to convey their thankful appreciation for the constant and enthusiastic support of the Company's Customers, Distributors, Suppliers, Bankers and Financial Institutions, and the State and Central Governments, without which the Company would not have been able to accomplish whatever it has actually attained. Your Directors also take this opportunity to express their appreciation of the earnest efforts put in by the employees, at all levels, in achieving the corporate Objectives For and on behalf of the Board For Shamken Cotsyn limited Sd/- Sd/- Sanjay Chaturvedi Amit chaturvedi Director Director Place: New Delhi Date : 30th October, 2007. ANNEXURE-I Information in accordance with the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 Statement of particulars pursuant to Companies (Disclosure of Particulars in the report of Board of Directors') Rule, 1988. PARTICULARS Year Ended Period Ended 31-03-2007 31-03-2006 (12 Months) (15 Months) A. CONSERVATION OF ENERGY a) Energy conservation measures taken : All round efforts are being made b) Additional investment and proposal, : Made for energy Conservation to if any, being implemented for reduction reduce wastage. Energy of of consumption of energy; conservation has been made a and this resulted in lower input of part of work culture c) Impact of measures at (a)and (b) above of for reduction of consumption of energy : Power for per Mtr. Of fabric d) Power & fuel Consumption : As Per form 'A' Attached B. TECHNOLOGY ABSORPTION: a) Efforts made in Technology absorption : As Per form 'B' Attached C. FOREIGN EXCHANGE EARNING AND OUTGO: a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for product and services, and export plans; : As mentioned in Directors' Report b) Total foreign exchange used and earned i) Foreign Exchange used : NIL ii) Foreign Exchange earned : NIL FORM-A: Year ended Period Ended A. POWER AND FUEL CONSUMPTION UNIT 31st March, 2007 31st March 2006 (12 Months) (15 Months) 1. Electricity: a) Purchase unit KWH 482980 635348 Total Amount Rupees 2254562 3019429 Rate/unit Rupees 4.67 4.75 b) Own Generation Through Diesel Gensets Units per liter of Diesel oil Units/Kwh 98854 117478 Cost per litre Rs./Unit 10.75 9.78 2. Other/internal Generation Boiler (a) Husk Fired Boiler: Quantity Tonnes 1691 2236 Total Amount Rupees 3983981 3886479 Average Rate Rs./Tonnes 2335 1738 (b) Oil Fired Boiler: Quantity Tonnes NIL NIL Total Amount Rupees NIL NIL Average Rate Rs./Tonnes NIL NIL B. CONSUMPTION PER UNIT OF PRODUCTION: Production Mtrs.: Electricity (includes Unit for DG Set) Unit/meter 0.21 1.46 Cost Rs./Mtr 1.20 8.09 Boiler (Husk Fired) Tonnes/Mtr Cost Rs./Mtr 1.42 7.54 Production Pcs.: Electricity (includes Unit for DG Set) Units/Mtrs NIL NIL Cost Rs./Mtrs NIL NIL Boiler(Oil Fired) Tonnes/Mtrs NIL NIL Cost Rs./Mtrs NIL NIL FORM-B: (Form for Disclosure of Particulars with respect to absorption) Research and Development (R&D): 1. Specific areas in which R&D : Improvement in methods of manufacturing Carried by the Company cost effectiveness and efficiencies. 2. Benefits derived as a result : Cost reduction & improvement in of the above R&D efficiencies 3. Future plan of action : To continues for development of better products and improvement in quality & efficiencies 4. Expenditure on R&D (a) Capital : It is an on-going process and (b) Recurring : there is no specific allocation (c) Total : and identification of expenditure (d) Total R&D expenditure as a : of R&D percentage of total turnover Technology Absorption, Adoption & Innovation: 1. Efforts, in brief, made towards The Company is regularly pursuing technology absorption, adoption the up-gradation of technology for innovation the development of new product 2. Benefits derived as a result of improvement of quality of products, the above efforts e.g. Product Improvement in manufacturing process improvement, cost reduction, resulting in cost reduction and product wastages during the manufacturing process and acceptability of the product in the international market 3. In case of imported technology Nil (imported during the last 5 years reckoned from the beginning of the financial year following information may be furnished Note: Figures have been re-arranged and re-grouped wherever required in the Directors' Report and Management Discussion and Analysis along-with annexure thereon Annexure-II MANAGEMENT DISCUSSION & ANALYSIS REPORT OPERATION & OUTLOOK: The company account forth e current year has been prepared forth e period of 12 months i.e. from 01-04-2006 to 31-03-2007. During the period under review your Company has clocked a turnover of Rs. 356.63 lacs. The company has incurred a net loss of Rs.355.21 Lacs. The Company has been able to reduce its losses significantly as net losses for the corresponding 15 months period. This depicts the overall improvement in the financials of the Company despite the Company being in red. We have resorted to the severe strict measures to revive the Company in order to put it on track as early as possible. As fine economy booming and the demands of the Company's product improving we expect to make a significant turnaround very soon. Your Company is negotiating with financial institutions, Banks, State Government to support the restructuring program formulated by the company so that the financial health of the company be put on track. SWOT ANALYSIS FOR THE COMPANY: Strengths: Your company is in the business of Processing of grey Cloths for the exporters. The company has low power &fuel cost, cheap labour and easy availability of water to carry out the process. Your Company is heavily dependent on the easy availability of raw material & to ensure its genuine supply we remain in touch with its suppliers. We have been able to procure these raw materials in constant touch with vendors. Further, your company has approached Board of industrial & financial Reconstruction for the revival of the company & expecting favourable response in the larger interest of the company & its stakeholder. Opportunities: The Indian textile market is growing considerably resulting increase in the export of garments from India. We are looking forward to avail this opportunities. ENVIRONMENT SAFETY: Your Company has installed proper plants to fulfill its obligations towards environmental safety. INTERNAL, CONTROL SYSTEM & ADEQUACY: Company has a well defined internal Control system that is adequate and Commensurate with size and nature of business. Clear roles, responsibilities and authorities, coupled with internal information Systems, and ensure appropriate information flow to facilitate effective monitoring. Expenditures on Research and Development is not separately allocated and identified. The constant endeavor to upgrade existing manufacturing facilities result in the improvement in the production. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE DISCLAIMER: Statements in this report describing the current industry, outlook, opportunities etc. reflect the estimation and opinion of the company. The same are based on certain assumptions and expectations of future events. The actual results may substantially diverge from the same as they depend upon the worldwide political, economic and social situation. Further, Government regulations, tax structure, demand & supply conditions, cost of raw materials & their availability and other related factors can also have a bearing on the above statements.