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Stiles India Ltd.

BSE: 531152 Sector: Consumer
NSE: N.A. ISIN Code: N.A.
BSE 05:30 | 01 Jan Stiles India Ltd
NSE 05:30 | 01 Jan Stiles India Ltd

Stiles India Ltd. (STILESINDIA) - Director Report

Company director report

STILES INDIA LIMITED ANNUAL REPORT 2004-2005 DIRECTOR'S REPORT To The Members of Stiles India Limited Your Directors have pleasure in presenting their Nineteenth Annual Report for the year ended 31.3.2005. FINANCIAL RESULTS Details (Rs. In Lakhs) 2004-05 2003-04 Gross Income 0.74 0.98 Loss before Finance charges and Depreciation 39.36 60.87 Less: Finance charges 40.55 62.36 Cash loss 79.91 123.23 Less: Depreciation & bad debts written off 94.31 94.43 Net loss Extraordinary items & before prior period item 174.22 217.66 Extra-ordinary items & prior period items (Net) Nil -35.33 Net loss after Extra-ordinary items 174.22 182.34 Loss carried to Balance Sheet 3872.50 3698.27 OPERATIONS During the year ended 31.03.2005 there were no operations in the factory. FINANCE The Company has formulated a Composite Scheme of Arrangement which, inter alia, involves the following steps : - Reduction of Listed and Unlisted Equity Capital of the Company by 87.5% - Conversion of reduced Unlisted Equity Capital into Redeemable Preference Shares - Consolidation of reduced Listed Equity Capital into New Equity Shares - Preferential Issue of Optional Fully Convertible - Preference Shares (Rs. 5.26 crores) - Proposal for Rights Issue (Rs. 12.49) crores By the above reduction, conversion and consolidation of equity capital as well by fresh infusion of funds into the Company, it is hoped, the operations can be recommenced and the fortunes of the Company can be revived. For each of the above steps, resolutions are being proposed at the ensuing AGM. Members are invited to study the AGM Notice and the Explanatory Statement thereto, for full details of each of the above steps. FUTURE PROSPECTS As stated above, on complete implementation of the financial restructuring envisaged under the Composite Scheme of Arrangement, it is expected that the future of the Company would be reasonably bright, although there are uncertain risks which will govern the Company's prospects. MANAGEMENT COMMITTEE A Management Committee consisting of Mr. Ch. Suresh Babu and Mr B.S. Shailender, Directors look after the day to day affairs of the Company and to ensure compliances. APPLICATION OF THE PROVISIONS OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT 1985 With the implementation of the Composite Scheme of Arrangement in full, it is expected that your Company will become outside the ambit of the above regulations. Necessary reference to BIFR will be made for the purpose after the full implementation of the above Composite Scheme of Arrangement. DEPOSITS Your Company has not accepted any Fixed Deposit from the public during the period under review. INDUSTRIAL RELATIONS Yours Directors are happy to inform that overall industrial relations is cordial. DIRECTORS Mr. Arun Santosh, Director and Mr. V. Rama Mohan Rao, Director resigned on 21.02.2005 and 06.06.2005 respectively. The Board wishes to place on record their appreciation of the services rendered by Mr. Arun Santosh and Mr. V.Rama Mohan Rao as Directors of the Company. Mr. Ch. Suresh Babu was appointed as Additional Director of the Company on 27.04.2005 and holds office till the conclusion of the ensuing AGM. The Company has received an intimation from a shareholder, along with deposit of Rs.500 as required, proposing Mr. Ch. Suresh Babu as a Director of the Company. The resolution is before the members at the ensuing AGM. Mr. B.S. Shailender was appointed as Additional Director of the Company on 27.04.2005 and holds office till the conclusion of the ensuing AGM. The Company has received an intimation from a shareholder, along with deposit of Rs. 500 as required, proposing Mr. B.S. Shailender as a Director of the Company. The resolution is before the members at the ensuing AGM. AUDITORS M/s. Brahmayya & Co, Chartered Accountants, Chennai, the Company's Auditors, who retire at the conclusion of the ensuing AGM, offer themselves for re-appointment. CORPORATE GOVERNANCE As required by the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis Report, Report on Corporate Governance, along with a Certificate from Auditors on the compliance of conditions of Corporate Governance is furnished as Annexure forming part of this Directors' Report. PARTICULARS OF EMPLOYEES There were no employees covered by Sec 217(2A) of the Companies Act, 1956 and hence no particulars are furnished. DIRECTORS' RESPONSIBILITY STATEMENT The Board of Directors report: (a) that in the preparation of Annual Accounts the applicable accounting standards had been followed along with proper explanation relating to material developments. (b) that the directors 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 and of the profit or loss of the Company for that period. (c) that the directors had taken proper and sufficient care for the 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 directors had prepared the annual accounts on a going concern basis. AUDITORS REPORT In respect of observations made by the Auditors in their Report pertaining to nonpayment of Provident Fund, Income Tax, Sales Tax etc., and default in repayment of One Time Settlement (OTS) it is stated that: (a) The Company has suspended operations since 15th February, 2002 and the factory still remains non operational and consequent to the financial problems faced by the company there were arrears in payment of provident fund dues, sales tax and TDS. However the Company is taking steps to pay and settle the arrears of provident fund dues, sales tax and TDS. (b) The default/delay in repayment of One Time Settlement (OTS) dues to the Financial Institutions and Banks is consequent to financial problems faced by the Company due to closure of factory. However the Company is taking steps to pay and settle the OTS. (c) The Company has suspended operations and there is no movement of stocks during the year hence the company is of the opinion that since there is no material change in stock position, the stocks are of non-perishable nature the valuation have not undergone any change. ACKNOWLEDGEMENT The Directors acknowledge the support received from various Government departments, Financial Institutions, Banks, Shareholders, Customers, Dealers and Employees. For and on behalf of the Board Ch. SURESH BABU Director Chennai B.S. SHAILENDER Date : 15.112005 Director ANNEXURES TO THE DIRECTORS' REPORT ANNEXURE - A Information under Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 which forms part of Directors' Report. CONSERVATION OF ENERGY : Information on Conservation of Energy is given below: FORM - A FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY Power and Fuel Consumption 2004-05 2003-2004 Electricity a) Purchase Units - - Total amount (Rs. In lacs) - - Unit Rate (Rs. / KWH) - - b) Self Generation - - Unit/Lit. of Diesel - - Cost/Units (Rs. / KWH) - - Consumption per unit of Production Electricity (KWH / Sq.M) - - L.D.O. (Ltrs / Sq.M). - - L.P.G. & S.R.C.4 (Kg / Sq.M) - - H.S.D. (Ltrs / Sq.M) - - TECHNOLOGY ABSORPTION: Information on Technology Absorption in Form - B is given Below: FORM - B Research and Development : Nil Benefits derived from R & D : Nil Future plan of action Continuous product development efforts to maintain wide range of products. FOREIGN EXCHANGE EARNINGS AND OUTGO 2004-2005 (Rs. In Lakhs) Earnings Nil Outgo Nil For and on behalf of the Board Ch. SURESH BABU DIRECTOR Chennai B.S. SHAILENDER 15.11.2005 DIRECTOR Note : Since there is no production during the year, particular's for the above format are not applicable. ANNEXURE - B MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT A. Industry Structure and Development The Company is in the business of manufacture of Ceramic Tiles. The demand for the products emanates from Construction Activities. The major users are Projects and individual users. It is both for new construction and for renovations. B. Discussion and Analysis There is a continuing boom in real estate/ construction activity. However there are price pressures and competition resulting from increase in number of players in the market place. Due to non-availability of financial resources, the operation of the Plant has been suspended. C. Outlook Due to arrangement with the Holding Company, Spartek Ceramics India Ltd., the Company has plans to manufacture Spartek Tiles on OEM basis. The demand for Spartek branded tiles is encouraging in domestic and overseas market. There is a shortfall in supply and hence, once the financial arrangements are in place, the Company does not anticipate any problem in Spartek outsourcing the Company's entire production for them. D. Risk and Concerns The environment in domestic and international economic conditions will have a bearing on the Company's performance. Your Company also faces normal risks which are met by industrial undertakings of similar size in the Construction industry. E. Internal Control System The Company has an adequate system of internal controls, designed to provide, reasonable assurance on the achievement of the objectives relating to efficiency and effectiveness of operations, reliability of financial reporting, compliance to applicable laws and regulations and for safeguarding of assets. F. Human Resources The employer-employee relationship continued to be cordial. In line with the changing business environment your Company is training and developing the Human Resources. G. Cautionary Statement Certain statements in the Management Discussion and Analysis describing the Company's views about the industry, expectations, objectives etc may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statement. Factors like supply and demand situations, input prices and their availability, changes in Government regulations, tax laws and other factors such as industrial relations and economic developments etc, may influence the Company's operations or performance.