Shukun Construction Ltd.
||ISIN Code: INE171E01021
05:30 | 01 Jan
Shukun Construction Ltd
05:30 | 01 Jan
Shukun Construction Ltd
Shukun Construction Ltd. (SHUKUNCONSTRN) - Director Report
Company director report
SHUKUN CONSTRUCTION LIMITED
ANNUAL REPORT 2004-2005
Your Directors have great pleasure to present the Eleventh Annual Report
together with Audited Financial Accountants for the year ended 31st March,
Particulars (Rs. In Million)
Income from Operations 20.84 3.25
Other Income 60.72 1.13
Total Income 81.56 4.38
Total Expenditure 20.10 3.7
Operating Profits 61.46 0.68
Less: Interest NIL NIL
Gross Profits 61.46 0.68
Less: Depreciation 0.21 0.09
Profits Before Tax 61.25 0.59
Less: Provision for Taxation 0.42 NIL
Net Profits of the year 60.83 0.59
No dividend is declared or recommended by the Board of Directors of the
company during the year.
REVIEW & PROSPECTS:
Though market was not active for the whole year, demand for the company's
business was seen rising for the last six months especially for the last
quarter of the year. Changed policies and taxes by budget will make the
things more costly. Firstly indirect taxes on steel are raised and secondly
service tax net was widened bringing construction services in respect of
commercial or industrial buildings or civil structures into it. Again
percentage of service tax was raised from current 8% to 10%. This will add
to company's costs and similarly price offered to customers.
(1) FIXED DEPOSITS:
During the year, no public deposits have been accepted by the company
within the meaning of Section 58-A of the COMPANIES Act, 1956 and the rules
made there under.
There is no employee of the company whose remuneration is covered under the
provisions of the section 214(2-A) of the Companies Act, 1956.
The industrial relations continue to be generally peaceful and cordial.
(3) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND EXPENDITURE:
(Information as per Section 217(1)(e) of the Companies Act, 1956 read with
the Companies (Disclosure of particulars in the report of the Board of
Directors) Rules, 1988.
i. Energy Conservation Measures Taken:
Energy efficient motors are included in the purchase specifications and are
put to use.
ii. Impact of measures taken for reduction of energy consumption and
consequent impact on the cost of production of goods:
Decrease in overall energy consumption due to adoption of energy efficient
No technology was absorbed and No Foreign Exchange was earned by the
Company during the Year hence not given. The Company has not expended any
sum in Foreign Exchange.
M/s Khese Associates, Chartered Accountants, Statutory Auditors of the
company will be reappointed from conclusion of this AGM to conclusion of
The comments in the Auditor's Report with Notes of Accounts-and Schedules
Mr. Aman Mehta is due to retire by rotation and offers himself for
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to provisions of Sec. 217(2AA) of the Companies Act, the Directors
(i) That in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures.
(ii) That they had selected such accounting policies and applied 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 2003-04 and of the profit earned
for that year.
(iii) That they have taken proper and sufficient care for the maintenance
of adequate accounting records in accordance with the provisions of
Companies act for safeguarding the assets of the company and for preventing
and detecting fraud and other irregularities.
(iv) That the annual accounts are prepared on a going concern basis.
Your Directors appreciate the contribution made by the employees of the
company. Directors also hereby wish to place on record co-operation made by
banks, various Govt. Department and Regulatory bodies, financial
institutions, members and clients.
For and on behalf of the Board
Place : Ahmedabad
Date : 25th July, 2005
MANAGEMENT DISCUSSION AND ANALYSIS
There is a pronounced tendency for all construction companies to bid at
extremely fine rates. Lower margins, per se, would not have been a cause of
concern had there been very significant increase in the volume of projects.
Infrastructure growth is on the upswing and lower margins will be partly
compensated by higher volumes. Due to sustained thrust on improvement in
the operational efficiency coupled with better product mix and management.
It is evident from the above that your company is not only committed to
achieve customer satisfaction but is also committed to take care of the
surrounding and the community. Having said this, it is necessary to high
light the fact that the year has seen a growth in margin pressures through
out the industry.
Well equipment, skilled manpower and expertise in various area is well
positioned to take advantage of growth. During the year the Company had
propelled to a new growth path. Company's competitive drive to get greater
business than merely riding on an overall economic upswing. The Company has
increased its revenue growth in a period when the industry witnessed a
decrease in growth. Power is the other area where there ought to be
considerable scope in the future. Supply outstripped demand and intense
competition drove down price of works. There is a distinct change in the
type of projects on offer. Construction companies have been adversely
affected by the steep increase in steel prices.
Recognizing that the external environment will continue to exert pressure
oil margins, the company focuses on growth and continuous improvements in
productivity and operational efficiencies. There is an increasing need to
become more capital intensive and adopt stringent quality control. Since
steel is a major raw material in the construction industry this has
adversely affected the operations of the Company.
The Company intends to maintain its existing capital assets at optimum
levels. The company is exploring this opportunity by forming strategic
joint ventures. It is necessary to secure new projects across various area
to ensure that assets are not underutilized and adequate returns are
maintained on these investments.
As we approach higher thresholds of growth, explore new avenues and expand
operations it has become imperative to sustain and enhance our human
resource competencies. The Company has been working towards creating a
culture of togetherness and teamwork amongst employees. The company
believes in protecting the interest of all its stakeholders.
Management Discussion and Analysis under specific heads is as under.
(a) Industry Structure and Development
The Construction industry in which your company is engaged is going through
the crucial stage of sluggish demand.
(b) Opportunities and Threats
The demand was thin for initial period of the year however it improved in
later part of the year. The competition which is already stiff has become
caviar due to increased number of competitors in the market.
(c ) Segment-wise or product-wise performance
An average Indian family so far accustomed for living together has now
almost changed to nuclear family concept.
Small scale business units are also increasing adding to demand for
(d) Risk and Concern
The budget presented by P. Chidambaram, Hon. Finance Minister has made
steel costly and again service tax net has been widened besides increase in
services tax rate with additional education cess.
(e) Internal Control Systems and their adequacy
In an effort to control costs the company has put checks everywhere
possible. Keeping in view the principles of financial management the
company has improved on costs cutting.
(f) Material Development in Human Resources / Industrial Relations front
During the year under review the relations with staff had been very
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