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Marvel Industries Ltd.

BSE: 532073 Sector: Industrials
NSE: N.A. ISIN Code: INE440D01014
BSE 05:30 | 01 Jan Marvel Industries Ltd
NSE 05:30 | 01 Jan Marvel Industries Ltd

Marvel Industries Ltd. (MARVELINDS) - Director Report

Company director report

MARVEL INDUSTRIES LIMITED ANNUAL REPORT 2008-2009 DIRECTOR'S REPORT To The Members, Your Directors hereby present their Seventeenth Annual Report on the business and operations of your company and audited statement of accounts for the year ended 31st March, 2009. FINANCIAL RESULTS: (Rs. In Lacs) Year Ended Year Ended 31.03.2009 31.03.2008 Sales & Other income 4660.48 5041.43 GP (Loss) before Interest, 471.42 351.43 Depreciation & Taxation: Interest 1185.62 1052.01 Depreciation 112.85 112.82 Profit (Loss) before tax (819.72) (1520.3) Fringe benefit tax 2.60 2.26 Profit/(Loss) after Tax (822.32) (1522.56) PROFIT & (LOSS) FOR THE YEAR (822.32) (1522.56) Appropriation (9589.16) (8066.59) Balance transferred to Balance sheet (10411.48) (9589.16) DIVIDEND: Due to loss, Directors have not recommended any Dividend for the year ended 31st March, 2009. OPERATIONS: During the year under review, the turnover of the company was Rs.4660.48 Decreased Lacs against Rs. 5041.43 Lacs in previous year 2007-2008. The loss after tax has decreased from Rs. 1522.56 in previous year 2007-2008 to Rs. 822.32 Lacs in the current year 2008-2009. EXPORT: During the period under review, your company achieved exports including third party exports of Rs.548.35 Lacs as compared to Rs. 1752.05 Lacs in the previous year. PREFERENCE SHARES: The Preference shares under Issued, Subscribed & Paid up includes shares aggregating to Rs.340 lacs are overdue and not redeemed due to absence of profits. No provision has been made for interest on overdue preference share capital. The amount in this respect has not been ascertained. REFERENCE TO HON'BLE BIFR: The Hon'ble BIFR had declared the company as Sick Industrial under section 17 of Sick Industries Companies (Special Provisions) Act, 1985. Thereafter, Hon'ble BIFR has abated the matter due to action taken by SICOM Ltd. and KOTAK MAHINDRA BANK LTD. under section 13(4) of Securitisation & Reconstruction of Financial Assets & Enforcement of securing Interest Act, 2002 (SARFAESI ACT). However company has contested the BIFR. Order in AAIFR, also in Debt Recovery Tribunal (DRT) action against of SICOM LTD. and KOTAK MAHINDRA BANK LTD. PUBLIC DEPOSITS: The company has not accepted any deposits under sectior 58A of the Companies Act, 1956 from the public during the year. INDUSTRIAL RELATIONS: The relation between the employees and the company remained largely cordial and harmonious throughout the yea except that, due to the inability of the company to accept to the demands of the Trade Union for higher increments, the relation has become somewhat strained with the workers. The Board wishes to place on record its sincere appreciation of the dedicated services rendered by the employees and the officers at all levels. CONSERVATION OF ENERGY: The Company is taking effective steps to keep power consumption to a minimum. STOCK EXCHANGE LISTINGS: Equity Shares of the Company are listed on the Bombay Stock Exchange Ltd. The Company confirms that it has paid annual listing fees to the above Exchange for the year 2009-2010. However, the trading securities of the company has been suspended form Bombay Stock Exchange Ltd. will effective from May 13, 2002 due to non-compliance of Listing Agreement clauses. In this connection, adequate steps at being taken by the company to revoke the suspension for the Bombay Stock Exchange Limited. TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT: No Technology was imported by the company since incorporation. However, there is ongoing research to Optimization various costs commensurate with appropriate product quality. PARTICULARS REGARDING EMPLOYEES: Information required to be given pursuant to the provisions, Section 217 (2A) of the Companies Act, 1956 is not applicable to the Company during the year under review. DIRECTORS: Shri Shailesh Saboo, Director retires form the Board of Directors by rotation and is eligible for reappointment. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to section 217 (2AA) of the Companies Act, 1956 the Directors' confirm that: 1. In the preparation of the annual account for the year ended 31st March, 2009, the applicable accounting standards have been followed except as stated in the Notes to Accounts attached to the Annual accounts. 2. Appropriate accounting policies have been selected and applied consistently, and have made judgements and estimates that are reasonable and prudent so as to give a True & Fair View of the state of affairs of the Company as at March, 31, 2009, and loss of the Company for the year. 3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provision's of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; 4. The annual accounts have been prepared on a going concern basis. DEPOSITORY SYSTEM: Securities & Exchange Board of India (SEBI) has made compulsory trading,of the company's Equity shares in dematerialised form mandatory. In line with this, the Company has entered into a tripartite agreement with Central Depository Services (India) Limited and Sharex Dynamic India (Pvt.) Ltd., Registrars for depository system. The company had applied for dematerialisation with National Securities Depository Ltd. (NSDL) who has refused to give nod to erosion of net worth of the company. AUDITORS: Members are requested to appoint Auditors & fix their remuneration. M/s. NGS & Co., the retiring Auditors, are eligible for re-appointment. The Company has received a Certificate from them to the effect that his appointment, if made, will be within the prescribed, limit under section 224 (1-B) of the Companies Act, 1956. AUDITORS' REPORT: The notes to the accounts referred to in the Auditors' Report are self explanatory and therefore do not call for any further explanation. SAFETY & ENVIRONMENT MANAGEMENT: With continued focus on Safety and Environment Management, your company has achieved significant progress during the year in this important key result area. Consistent high safety standards are being followed with a focus on continuous improvement. FOREIGN EXCHANGE EARNING AND OUTGO: Foreign Exchange Earnings (FOB) 548.35 Lacs Foreign Exchange outgo during 2267.51 Lacs the year (CIF) MANAGEMENT DISCUSSION AND ANALYSIS: As per Clause 49 of the Listing Agreements with Bombay Stock Exchange Ltd., your Company is required to give a note on management discussion and analysis with regards to company and industry perception. A report on the same is given separately as Annexure - I. CORPORATE GOVERNANCE: As per Clause 49 of the Listing Agreements with Stock Exchanges, your Company is required to implement the code of Corporate Governance. Accordingly, your company has complied in all material respects with the features of the said code. A report on the same is given separately as Annexure - 'II'. ACKNOWLEDGMENTS: Your Directors would like to express their grateful appreciation for the assistance and continued co-operation extended by the Financial Institutions, Banks, Government Authorities, clients and suppliers during the year under review. The Directors wish to place on record their deep. sense of commitment shown by the employees at all levels and acknowledge their contribution. For and on behalf of Board of Directors Vikram Saboo Chairman cum Managing Director Registered Office: A-6, MIDC Industrial Area, Malegaon, Sinnar, Nasik- 422 113. Place : Mumbai Date : 31.07.2009 ANNEXURE - 'I' TO THE DIRECTOR'S REPORT: MANAGEMENT DISCUSSION AND ANALYSIS REPORT: A. INDUSTRY STRUCTURE & DEVELOPMENT: Your Company is a manufacture of Polypropylene woven Sacks/Fabrics. The Industry is fragmented and there are many unorganized players in this Industry. The entry barriers in this industry are very low. The Industry mainly cater to Cement, Fertilizer, Food Grains and Exports. B. ECONOMY AND BUSINESS OUTLOOK: During the year under review the Indian economy was buoyant. Investors' confidence grew in the corporate sector, which was reflected through the stock exchange index. GDP growth was 8% percent in the year of 2008-09. Healthy foreign exchange reserves, lower interest rates, low inflation rate and fiscal deficit indicate growing confidence in the Indian economy. However this Industry is facing margin pressures due to increasing prices of raw material which could not be passed on to the customers fully. C. OPPORTUNITIES & THREATS: (I) OPPORTUNITY: With the abolition quota system your company sees lot of opportunities in USA market for its fabrics and bags. Your company has an advantage over other competitions because of its presence in USA market. Your company is making all efforts to further capture this market post quota abolition. (ii) THREAT: Since new capacities have been created by the competition, business is becoming more competitive. D. SEGMENTWISE PERFORMANCE: Your Company has operating single segment in terms of Accounting Standard 17 issued by the Institute of Chartered Accountants of India. E. RISKS & CONCERNS: BUSINESS RISK: 1. Since entry barrier are low, new capacities will emerge. 2. Your Company's business is dependant on Cement Industry, which in our country is controlled by a few companies/groups and exports are primarily to single customer. (ii) FINANCIAL RISK: (a) Foreign Currency: Any weakling of dollar against rupee would impact your company's margin adversely. (b) Leverage: Your company's debts are for in excess of its assets. Your company has already given revivals schemes before Hon'ble BIFR for their approval. Further your company is also making efforts to arrive at settlement with the Lenders so that company would be revived. (c) Statutory Risk: Your Company has system in place for statutory compliance to ensure that all the statutory requirements are complied within running business operations. F. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY: Your company has audit committee of directors, however not effective system of accounting and administrative control. Your company is making efforts now to strive link the all department and strive to make effective system of internal control. G. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE: This has been dealt with in the Directors' Report. H. HUMAN RESOURCES' INDUSTRIAL RELATIONS: Your Company has team of qualified and dedicated personnel who have contributed to the consolidation of the operations of your Company. Your Company's industrial relations continued to be harmonious during the year under review. As on March 31, 2009 the Company has 379. employees. H. CAUTIONARY STATEMENT: Statements in the Management Discussion and Analysis describing the Company's objective estimate expectations or projections may constitute 'forward looking statements', within the meaning of applicable lows and regulations. Actual results may differ material from those either expressed or implied in the statement Important factors that could make a difference to your Company's operations include economic condition affecting demand / supply and price conditions in the domestic and international markets, changes in the Government regulations, tax laws and other statutes an other incidental factors.