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Majestic Industries Ltd.

BSE: 526857 Sector: Metals & Mining
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Majestic Industries Ltd. (MAJESTIND) - Director Report

Company director report

MAJESTIC INDUSTRIES LIMITED ANNUAL REPORT 2008-2009 DIRECTOR'S REPORT To The Members of MAJESTIC INDUSTRIES LIMITED Barotiwala, Teh. Kasauli, Distt. Solan (HP) Your Directors have immense pleasure in presenting the 28th Annual Report of the company for the year ended 31st March, 2009. FINANCIAL RESULTS (Rs. in lacs) Year Ended Year Ended 31st March, 2009 31st March, 2008 Sales & Other Income 33.10 7.48 Expenditure 20.26 9.21 Depreciation 0.49 0.69 Profit before Extraordinary Items and Prior Period Adjustments 12.35 (2.41) Net Profit/(Loss) before Tax (3.66) (4.26) Provision for Taxes (FBT) 0.02 0.09 Net Profit/(Loss) after Tax (3.68) (4.35) Paid-up Share Capital 963.99 963.99 REVIEW OF OPERATIONS AND FUTURE PROSPECTS: Consecutively, this year also, the company could not carry on any commercial activity except sale of certain fixed assets and writing off of unclaimed credits and irrecoverable debts. During the year under review; the company could not commence any fresh. business venture due to lack of availability of adequate finances from any Bank/Financial Institution/Other source. The party paid shareholders also did-not pay the amount in arrears in respect of their shares. The management has thus decided to dispose off apart of the land to garner some funds so as to administer the company and to embark upon some fresh & viable business proposition for which the management is making-earnest efforts. In the mean while, the management is striving hard to control and keep the administrative & fixed costs to the minimum. As the members are aware, the company became a sick industrial company within the meaning, of section 2(f)(46AA) of the Companies (Second Amendment) Act, 2002 and was subsequently declared as such under clause (o) of sub-section (1) of Section (3) of the Sick Industrial Companies (Special Provisions) Act, 1985, by Hon'ble Board for Industrial & Financial Reconstruction (BIFR) vide their order dated 09th August, 2005 on the reference of the Company made on 20th August, 2001 u/s 15(1) of the said Act and registered as case No. 39/2002. The Board also appointed Industrial Development Bank of India as Operating Agency u/s 17(3) of the Act to prepare Rehabilitation Scheme. There has been no progress till date, however, the net worth of the Company has turned positive thereafter and the company has already fully repaid all its secured lenders. There might be a ray of hope that the Government declares some incentives/benefits for revival of old and sick companies. SEGMENTAL REPORTING: Due to the sole and geographically undivided business (i.e. manufacturing & trading in C.R. Strips Sheets etc.) of the Company and in wake of no- manufacturing/trading by the Company during the year, there is nothing to report in respect of Accounting Standard AS-17 on Segmental Reporting. SHARE CAPITAL The Authorised Share Capital of the company is Rs.15,00,00,000/- divided into 1;50,00,000 equity shares of RS:10/-each. During the period under review, the said capital has not been raised by the company. The Issued, Subscribed & Paid-up Share Capital remain at Rs.12,30,00,000/-, Rs.11,54,55,800/- and Rs.9,63,99,800/- respectively. Allotment Money (Rs.7.50 per share) remained in arrears in respect of 2,540,800 Equity Shares (Rs. 2.50 paid-up per share). Forfeiture of said shares is yet to be concluded. The company did not receive any money from partly paid equity shares during the period under review. DIRECTORS The Board of Directors is duty constituted. During the period under review, there has been no change in the directorship of the company. Further as per the provisions of section 256 of the Companies Act, 1956, Sh. Balram Sharma, Director of the company is due to retire by rotation at the ensuing Annual General meeting and being eligible, your Board commends his re-appointment by the shareholders at the Annual General Meeting. CORPORATE GOVERNANCE As per schedule of implementation of Corporate Governance Code mentioned in Clause 49 of the Listing Agreement, the Company has implemented the mandatory requirements of the code. Corporate Governance and Management Discussion and Analysis Reports are set out as separate Annexure to this report. DIRECTOR'S RESPONSIBILITY STATEMENT Pursuant to the provisions of sub section (2AA) of section 217 of the Companies-Act, 1956, the Directors confirm that: i. In the preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures. ii. The Directors have selected such accounting policies and *plied 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 affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period. iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. iv. The Directors have prepared the annual accounts on a going concern basis. DIVIDEND In view of non-availability of net distributable surplus, your directors do not recommend any dividend. PUBLIC DEPOSITS The Company has neither accepted any deposit from the public nor renewed any deposit within the meaning of Section 58A of the Companies Act,1956 and the rules framed there under, during the year under review. PARTICULARS OF THE EMPLOYEES Information as per section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules, 1975 and Companies (Disclosure of particulars in the report of the Board of Directors) Rules, 1988 is not required as none of the Director/Employee was in receipt of remuneration of Rs.2,00,000/- or more per month or Rs. 24,00,000/- per annum in the aggregate. NOTES ON ACCOUNTS The observations of the auditors and notes on accounts are self-explanatory and do not call for any comments from Directors. AUDITORS M/s. Rajesh Gora lal & Co., Chartered Accountants, the existing statutory auditors who were appointed at the last Annual General Meeting have completed the audit of accounts for the financial year ended 31st March, 2009 and thereafter expressed their unwillingness for being appointed for the next financial year ending on 31st March, 2010. Therefore, your Board while considering the eligibility, recommended the appointment of M/s. Naveen Soni & Associates, Chartered Accountants, as the statutory auditors of the company for the financial year ending 31st March, 2010. PARTICULARS OF CONSERVATION OFF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO. The company did not carry out any manufacturing/production activity during the financial year ended on 31.03.2009 and thus the particulars of conservation of energy, technology absorption and foreign exchange earnings and out go, as required to be appended/given under of section 217(1)(e) of the Companies Act, 1956 are nil. CASH FLOW STATEMENT As required under clause 32 of the listing agreement, a cash flow statement is appended. INDUSTRIAL RELATIONS The overall industrial relations have remained cordial throughout the year under review. ACKNOWLEDGMENT Your Directors wish to place on record their deep gratitude to the Departments of State/Central Governments, Banks and other concerned authorities for their valuable cooperation and assistance. Yours Directors also wish to-place on record their appreciation of the whole-hearted and continued support extended by the shareholders and the employees of the company which had always been a source of strength for the company. BY ORDER OF THE BOARD OF DIRECTORS Place : Barotiwala CHAIRMAN Date : 02nd September, 2009 MANAGEMENT DISCUSSION AND ANALYSIS REPORT (MD&A) The Management Discussion and Analysis presents the industry overview, the opportunities and threats, the initiates taken by the company and overall strategy of MAJESTIC INDUSTRIES LIMITED in pursuing the business as enshrined in the main objects of the company: 1. Industry Structure and Developments The iron steel industry in India has revived, however, only those existing units located in the states of Himachal Pradesh and Uttranchal Pradesh and other states earmarked by the Central Government for availing incentives have been able to pull out of red which could able to make requisite expansion and comply with other prescribed terms & conditions. 2. Opportunities and threats During the last few years the company has been under financial crunch and has been facing a number of problems in procuring raw material from reputed suppliers mainly due to non-availability of financial assistance from any Bank/ Financial Institution. The plant & machinery also got obsolete over the time. Consequently, the Company suffered heavy losses. The management made a reference with Board for Industrial-and Financial reconstruction for availing a suitable relief package to revive the unit but to no avail. 3. Initiatives taken by the company Despite the persistent financial crunch and a number of problems being faced by the company, the management under the leadership of Sh. N.K. Gupta Managing Director has never lost heart and has always been trying its level best to bring the company on operational track, may be with some other business venture. 4. Business operations and review The company could not carry on any manufacturing activity during the year- under review. Since the company's unit is located in the state of Himachal Pradesh wherein the excise and income tax benefits are not made available to the old units. Therefore, due to price competition, it cold not be possible for the company to sustain its production level and at last it was thought prudent by the management to close the commercial operation in order to avoid operating losses. Further, due to the non-availability of Working and other capital finance, the company could not shift the plant to the other location. The Company became a sick industrial company within the meaning of section 2(f)(46AA) of the Companies (Second Amendment)Act, 2002. Board for Industrial & Financial Reconstruction (BIFR) in the order dated 09th August, 2005, on the reference of the Company made on 20th August, 2001 u/s 15(1) of the Side Industrial Companies (Special Provisions) Act, 1985 and registered as case No. 39/2002, declared-the Company as sick under clause (o) of sub-section (1) of Section (3) of the Act and appointed Industrial Development Bank of India as Operating Agency u/s 17(3) of the Act to prepare Rehabilitation Scheme. However, the net worth of the Company has turned positive thereafter Hence keeping in view the above and being there no scope-of future revival- of the unit in the state of Himachal Pradesh, your management has decided to commence the other related activities with the funds which are planned to be raised from the sale of fixed assets of the company. It is hoped that with the future plan once implemented, the company will be able to regain its past track of existence. 5. Cautionary Statement The Management Discussion and Analysis statement of the Annual Report has been included in adherence of the spirit enunciated in the code of Corporate Governance approved by the Securities and Exchange Board of India. Statement in the Management Discussion and Analysis describing the company's objectives, projects, estimates and expectations may be forward- looking statements within the meaning of applicable securities,' laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference in the company's operation include economic conditions affecting demand. Place : Barotiwala BY ORDER OF THE BOARD OF DIRECTORS Date : 02nd September, 2009 CHAIRMAN