TO THE MEMBERS
For the year ended on 31st March, 2013
Your Directors present herewith their Report together with the Audited Accounts of yourCompany for the year ended 31st March 2013.
|A. FINANCIAL RESULTS & APPROPRIATIONS || ||(Rs. Lakhs) |
| || ||2012-13 |
|Gross Turnover ||: ||26952 |
|Gross Profit/(Loss) for the year ||: ||2566 |
|Less: Depreciation ||: ||640 |
|Profit/Loss after depreciation ||: ||1926 |
|Less : Finance cost ||: ||4429 |
|Profit/(Loss) before Tax ||: ||(2503) |
The performance of Cables Division of your Company in particular Shyamnagar unit, hadimproved and the operating profit before Interest, Depreciation and Tax of Cables Divisionhad registered an increase over 4% during the financial year. The performance of ProjectDivision suffered serious setback due to lack of order as it is difficult to meet thequalification criteria in most tenders due to your Companys negative net worth. Thedivision thus suffered due to its inability to participate in most public tenders of PSUsand Government bodies. Your Company had moved a Miscellaneous Application (MA) with BIFRfor formation of a Joint Venture Company with Project business between NCL and OrientalManufacturers Private Limited (OMPL) with a stake-holding of 10% and 90% respectively.BIFR on hearing of the MA directed your Company to come up with the total DraftRehabilitation Scheme (DRS) package instead of piecemeal proposals. Your Companythereafter moved an appeal with AAIFR, since time was considered as the essence for suchstrategic alliance. AAIFR hearing is still pending. As a result of all these factors yourCompany suffered losses of Rs. 2503 lacs during the year under review. The working capitalposition continued to remain short and critical throughout the year. The situation hadfurther worsened due to continuous repayment of loans as per the CDR scheme. Owing to thehigh debt burden, finance cost had further increased. The interest cost was the majorelement of cost and had off-set the savings achieved in operations and other fixed cost.The major challenge in the current year would be to restrict further increase in financecost though this would be difficult until BIFR approves the DRS.
In response to the application filed before BIFR, your Company had been declared sickby the order dated 7th September 2011 and Allahabad Bank has been appointed as theOperating Agency (OA) for your Company to work out the DRS package for submission to BIFR.In the joint lenders meeting held on 5th September 2012 Ernst & Young (E&Y) wasappointed to study the viability and assist OA and the Company to prepare a DRS Package.E&Y submitted their report along with the DRS. The lenders are now discussing the DRSpackage proposed by E&Y.
In view of the loss suffered by the Company and the accumulated losses of the previousyears, your Directors cannot recommend any dividend on Preference or Equity Shares.
C. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report as required under the listing Agreement withthe Stock Exchange is enclosed in Annexure A.
The working capital position remained critical throughout the year as a result theoverall financial result was not satisfactory. The operations suffered for want of funds.In view of the prevailing critical fund position the management of your Company initiateda few actions viz (i) to focus on high contribution products and (ii) to emphasise onreduction of operation cycle. Unfortunately the working capital gap was too large. Themanagement actions yielded some results to contain the operational loss to the presentlevel. Further delay in the decision of hiving off of Project Division by BIFR compelledyour Company to succumb to a higher loss compared to the last year. The working capitalposition in the current year would be far more critical due to the past losses. It istherefore necessary to get the DRS approved by BIFR and implemented at the earliest andyour Companys management is striving in this direction.
The installment payments for Preference Shares of WBIDC and TDB had fallen due. Due toinability to pay the installment, your Company submitted restructuring proposal to WBIDCand TDB, which is yet to be approved. However these issues are being addressed in the DRS.As per approval of BIFR, 5,50,000 of Preference Shares of Rs.100 each and 72,00,080 EquityShares of Rs.10 each of Nicco Biotech Limited, a subsidiary of NCL had been sold in thecurrent year. The proceeds amounting to Rs.11.94 crore have been kept in a no liendeposit account with Allahabad Bank. The disbursement of the said money would bedone as per the direction of BIFR. Out of the fresh funds mobilized by issue of EquityShares to Nicco Restructuring Employees Trust Fund (NRETF), the Company as per CDR schemeexpended some funds for much needed Capital Expenditure. Additional capex requirements andsource of funding have been considered in DRS prepared by E&Y.
During the year your Company has issued and allotted 1,10,00,000 Equity Shares of Rs2/- each for cash at par aggregating to Rs 2,20,00,000/- to NRETF in accordance with theCDR Approval.
E. FIXED DEPOSITS
Your Company has not accepted any fixed deposits during the period under review, assuch there are no outstanding of overdue deposits as on 31 st March, 2013.
Your Company sold off its holding in the subsidiary Company, Nicco Biotech Ltd.Subsequent to sale of shares of Nicco Biotech Limited, your Company has no subsidiary ason 31st March, 2013 as such attachment of accounts of subsidiary Company as required underSection 212 of the Companies Act, 1956 does not arise.
G. ENERGY CONSERVATION
The details relating to energy conservation requirements of section 217(1)(e) of theCompanies Act, 1956 are not applicable.
H. RESEARCH AND DEVELOPMENT
Details in regard to Research and Development are shown in Annexure B.
I. FOREIGN EXCHANGE EARNINGS AND OUTGO
Details of foreign exchange earnings and outgo are shown in Annexure B.
J. CORPORATE GOVERNANCE
Your Company has strictly observed the principles of good Corporate Governance throughaccountability and transparency.
A separate report on Corporate Governance as prescribed in the Listing Agreement of therelevant Stock Exchange forms part of the Annual Report 2012-13 along with theAuditors statement on its compliance (Annexure C).
K. TOTAL QUALITY AND ENVIRONMENT MANAGEMENT
Your Companys factories at Shamnagar and Baripada are accredited to QualityManagement System (QMS) under ISO 9001: 2008 and Environment Management System (EMS) underISO 14001:2004. Both the systems continue to be maintained through periodic Internal Auditby a team of trained Internal Auditors and by Re-Certification/Surveillance Auditsconducted by Indian Register of Quality Systems (IRQS).
L. FUTURE PROSPECTS
Your Directors are confident that through DRS a suitable revival restructuring schemewould be worked out for the revival of the Company under the auspices of BIFR.
Mr Udayan Ray, Dr Dilip Kamar Datta, Mr Sujit Poddar and Mr Shiv Siddhant Narayan Kaulretire by rotation at the forthcoming Annual General Meeting and being eligible, offerthemselves for re-appointment.
A brief resume of the Directors proposed to be appointed/re-appointed, nature of theirexpertise in specific functional areas and names of Companies in which they holdDirectorships and Memberships/Chairmanships of Board/Committees, as stipulated underclause 49(IV)(G) of the Listing Agreement with the Stock Exchange, are provided in theNotice convening the 30th Annual General Meeting of the Company.
During the year under review there had been no export.
O DIRECTORS RESPONSIBILITY PURSUANT TO SECTION 217(2AA) OF THE COMPANIES ACT,1956
Your Directors confirm :
1. that in the preparation of the Annual Accounts, the applicable Accounting Standardshave been followed;
2. that your Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of the yearended 31st March, 2013 and of the profit of the Company for that period;
3. that your Directors have taken proper and sufficient care for the maintenance ofadequate 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 andother irregularities; and
4. that your Directors have prepared the Annual Accounts on a going concern basis.
P. PARTICULARS OF EMPLOYEES
Your Company did not employ any person whose particulars are required to be attached tothis Report under Section 217(2A) of the Companies Act, 1956.
Q. TEAM OF SENIOR MANAGEMENT PERSONNEL
Apart from Managing Director, the Team of Management Personnel of the Company includeMr S K Pal, Executive Director, Mr V R Moza, President (Marketing), Mr A K Ghosh,President (Operations), Mr Kartick Chatterjee, Sr. Vice President (Corporate Affairs &Legal), Mr Prasanta Pandit, Associate Vice President (Finance & Accounts) and MrIndranil Mitra, General Manager & Company Secretary who are to be reckoned asManagerial Personnel/Officer within the meaning of Clause 49 of the Listing Agreement,SEBI (Prohibition of Insider Trading) Regulations, i992 and Section 2(30) of the CompaniesAct, 1956.
The Statutory Auditors of your Company M/s G Basu & Co., Chartered Accountants,retire at the forthcoming Annual General Meeting and, being eligible, offer themselves forre-appointment. Your Directors recommend the re-appointment of M/s G Basu & Co., asStatutory Auditors of the Company and their remuneration needs to be fixed.
S. AUDITORS REPORT
The Comments made by the Auditors in their report have been duly explained in theattached Notes to Accounts and hence do not need to be dealt with here.
T. COST AUDITORS
Pursant to the directives of the Central Government under the provisions of section233B of the Companies Act, 1956, M/s S Roy Choudhury & Co., Cost Accountants, havebeen appointed to conduct Cost Audits relating to cables manufactured by the Company.
Your Directors wish to record their sincere appreciation of the efforts put in by allthe employees and their commitment during the year. Your Directors also take thisopportunity to acknowledge the cooperation and assistance of Banks, FinancialInstitutions, Technology Development Board, the Government of India, the Government ofWest Bengal and the CDR Cell, BIFR. Finally, your Directors owe their gratitude to all theShareholders and Debenture Holders for their continued support to the Company.
| ||On behalf of the Board of Directors |
|Place : Kolkata ||RAJIVE KAUL UDAYAN RAY |
|Dated, the 12th day of August, 2013 ||Chairman Managing Director |
ANNEXURE TO THE REPORT OF THE DIRECTORS
Information under Section 217(1)(e) of the Companies Act, 1956 read with Companies(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988.
1. RESEARCH AND DEVELOPMENT
The R&D Centre of your Company has been focussing on development of products andcost effective compounds for Specialised Cables and Electron Beam Irradiated Cables. TheCompany has successfully developed certain sophisticated Special Cables for Indian Navy.
2. TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION
The Company has absorbed the updated polymer technology for development of newercompounds.
3. FOREIGN EXCHANGE EARNINGS AND OUTGO
| ||Year 2012-13 |
| ||(Rs. Lacs) |
|Export (including deemed exports) || |
|Other Foreign Exchange Earnings || |
|Foreign Exchange Outgo || |
|Import of Materials ||708.93 |
|Travelling & Others ||5.05 |
|Technical Design ||Nil |
| ||On behalf of the Board of Directors |
|Place : Kolkata ||RAJIVE KAUL ||UDAYAN RAY |
|Dated, the 12th day of August, 2013 ||Chairman ||Managing Director |