| Your directors are pleased to present the twelfth annual report along
with the audited accounts of the company for the period (18 months)
ended 30th September 2002.
FINANCIAL PERFORMANCE
2001-02 2000-01
(18 months) (12 months)
Rs. Lacs Rs. Lacs
Sales and other income 1245.38 1079.93
Loss before interest and depreciation 619.86 265.71
Interest 402.97 302.58
Depreciation 144.10 95.81
Loss for the year 1166.93 664.10
Loss brought forward 1463.84 799.74
Loss carried forward 2630.78 1463.84
OPERATIONS
The performance of the Company during the period was affected
significantly because of shortage of working capital funds resulting in
lower production and sales. The impact of the losses incurred by the
Company in the past years made. it difficult for the company to raise
any funds in the form of additional borrowings. In view of the cash
flow constraint, your company was unable to supply fasteners to its
customers on schedule resulting in cancellation of some orders.
As the members are already aware, the Board initiated steps to induct a
strategic investor to revive the Company, and with this in view, the
Board inducted a strategic investor by bringing in four additional
directors with effect from 02 May, 2002 and also the Company conducted
an Extra ordinary General Meeting of the Company on 19th June, 2002
wherein certain proposals were put forward to the members all of which
were approved by them. The proposals could not be acted upon by the
Board as the strategic investor was not acceptable to the Banks and
hence withdrew from the Company.
Your present directors are, therefore, taking steps afresh to find
another strategic investor who will bring in additional funds in the
form of equity so that liquidity position of the Company will improve.
DIVIDEND
The Directors do not recommend Dividend for the period (18 months)
ended 30th September, 2002, in view of the loss incurred by the
Company.
DIRECTORS
Mr. R. Devarajan, Director resigned from the Board effective 12th July,
2002. Mr. N. G. Krishnan, Managing Director resigned from the Board
effective 25th July, 2002 and Mr. V. Gopalan resigned from the Board
effective 07th August, 2002. Mr. D. R. Jawahar, IDBI Nominee Director
on our Board also resigned from the Board with effect from 13th
September, 2002.
Messrs. A. B. S. Reddy, C. N. Venugopal, S. Venugopal and K. P. C. Rao
were appointed as Additional Directors effective 02 May, 2002 and all
of them resigned from 25th July, 2002.
Messrs. Vepa K. Sadasivam and Mr. N. Chandrasekaran were appointed as
Additional Directors, whose term of office ceases at the ensuing Annual
General Meeting of the Company.
DIRECTORS RESPONSIBILITY STATEMENT
In compliance with Section 217 (2AA) of the Companies Act, 1956, the
Directors confirm that:
- in the preparation of annual accounts the applicable Accounting
Standards have been followed:
- 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 and fair view of the state of affairs
of the Company as at 30th September, 2002 and of the losses of the
Company for the period (18 months) ended on that date;
- proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
aforesaid Act for safeguarding the assets of the Company;
and for prevention and detection of fraud and other irregularities;
- the Annual Accounts have been prepared on a going concern basis.
AUDITORS
M/s. Revathi & Latha, Chartered Accountants, Chennai retire and are
eligible for re-appointment. They have given their consent for
re-appointment.
AUDITORS QUALIFICATIONS
(i) With reference to point no. 5 of Annexure to the Auditors report,
we have to state that the discrepancies pertain to earlier years and
detailed verification is being done by the Management.
(ii) With reference to point no. 15 of Annexure to the Auditors
report, the present Board of Directors are taking necessary steps to
appoint Internal Auditor.
CORPORATE GOVERNANCE
A detailed report on this subject forms part of this Report.
INDUSTRIAL RELATIONS
The illegal strike resorted to by the workmen during the last
accounting year continued until the first week of May 2001. The
production levels stabilised subsequently. Your Company continues to
maintain harmonious and cordial relations with its workers.
PARTICULARS OF STATUTORY STATEMENTS
(a) Particulars of Employees: No employee of the Company was paid
remuneration in excess of limits prescribed under Section 217 (2A) of
the Companies Act, 1956, read with the relevant Rules as amended.
(b) Statement pursuant to Section 217 (1) (e) of the Companies Act 1956
read with Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules 1988 is given in the annexure forming part of
this Report.
(c) The Company has not accepted any deposits which come under the
purview of Section 58A of the Companies Act, 1956.
ACKNOWLEDGMENT
The Board of Directors would like to thank the customers. Financial
Institutions, Banks, Vendors/Contractors and the shareholders for
their continued support. The Board would also take this opportunity to
commend the employees of the Company at all levels for their services
rendered to the Company.
Annexure
Information as required under Section 217 (1) (e) of the Companies Act,
1956:
A) CONSERVATION OF ENERGY:
a) Measures taken:
1. Effective elining and maintenance of furnace to avoid heat loss,
utilisation of full capacity of furnaces by proper co-ordination of
load and improvement of power factor.
2. Re-use of treated effluent resulting in reduction in water
consumption
3. Capacitors have been used for upgrading the power factor
4. Use of thermic fluid systems instead of electrical heating.
b) Additional investment and proposals, if any, for reduction of
consumption of energy:
The Company is taking steps for reducing energy consumption on a
continuous basis by adoption of energy efficient practices.
B. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
a) Specific areas:
(i) Development of new cold forged fasteners leading to import
substitution.
(ii) Surface engineering of tools to ensure consistent productivity
improvement.
(iii) Development of products for export markets with focus on value
addition.
(iv) The Company from the beginning has implemented various quality
management systems to produce `Quality Products conforming to
international Standards. This has enabled the Company to meet the
stringent ISO 9002 Standards.
(v) The Company has not taken any foreign technology. However, some
senior Company personnel were sent abroad to USA, UK, Taiwan and Japan.
They underwent training in operation and maintenance of the machines.
(vi) Improvement to Total Quality Management Systems.
b) Benefits derived as a result of the above efforts
(i) Improvement in productivity
(ii) Import substitution of fasteners
c) Future plans of action: To continuously upgrade process, technology,
productivity and improvement in overall performance, added cost
effectiveness and import substitution. Expenditure on R & D:
Expenditure on R & D, though incurred, has not been quantified as
research and development expenses.
C. Foreign Exchange Earnings & Outgo
a. Foreign Exchange Outgo:
Revenue Expenditure - Rs. 48.14 lakhs
b. Foreign Exchange earnings: Nil
(By Order of the Board)
For Dev Fasteners Limited
Place: Chennai N. Chandrasekaran
Date 11-11-2002 Director | 