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Hindustan Photo Films Manufacturing Company Directors Report, Hindustan Photo Reports by Directors
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Hindustan Photo Films Manufacturing Company
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Hindustan Photo Films Manufacturing Company is not traded in the last 30 days
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Directors Report Year End : Mar '11    Mar 10
The Hindustan Photo Films has completed 50 years of service to the Nation
 and has completed its Golden Jubilee. Your Directors present the
 fiftieth (50th) Annual Report on the working of the Company along with
 the audited accounts for the year ended 31st March 2011, report of the
 Statutory Auditors and the comments thereon by the Comptroller and
 Auditor General of India.
 
 Corporate Performance
 
 The audited financial data for the last ten years are summarized below
 along with the Cash flow statement for 2010-11.
 
 Share Capital
 
 The Authorised and Paid up Capital of the Company as on 31st March 2011
 stood at  210 Crore sand Rs204.87 Crores respectively.
 
 Fixed Deposit
 
 No deposit has been received by the Company during the year under
 report.
 
 Corporate Results
 
 Production
 
 The production during the year was 1.61 M.Sq.m valued at Rs. 4077.59
 Lakhs as against 0.961 valued at Rs. 2625 Lakhs achieved during the
 previous year.  The item wise production is given below:
 
                                           (In Million Sq.m)
  
                                          2010-11      2009-10
                
 Cine Products                                          0.004
 
 X-Ray (Ind. Indl. X -Ray)                1.153          0.810
 
 Graphic Arts                             0.446          0.135*
 
 Others (Miscellaneous)*                  0.345          0.012
 
  Total                                   1.944          0.961
 
 -Includes job order production of        0.331          0.023
 
 Though production in the current year shows an improved trend as
 compared to the previous years, the low volume of production is
 attributable to increased raw material cost and lack of orders due to
 stiff competition from MNCs in the domestic market. The Company
 continues to explore areas for diversifying its activities. The amount
 of Rs. 30 Crores received towards Working Capital as a part of the fund
 infusion for Revival was ploughed into operations fully and it has
 helped in the increased turnover.
 
 Financial Data for the last ten 
 
 years Year ending 31st March
 
                     2002          2003       2004     2005       2006
 
 Production         2978.36      2667.32    2746.66  1519.52    1536.95
 
 Sales              2895.03      2697.80    2778.39  1738.56    1461.41
 
 Net Profit/Loss   35371.86     38539.24   44302.47 49641.27   56090.18
 Growth Rate (%)
 
 -Turnover            13.89        -6.81       2.99    37.43       5.94
 
 -Production          25.82       -10.44       2.97   -44.68       1.15 
 
 Net profit(As a % of)
 
 -Turnover         -1221.81     -1428.54   -1594.54 -2855.32   -3838.09
 
 -Capital employed''  -69.91       -79.77    -101.67  -124.68    -150.50
 
 Networth -       161088.24   -199518.26 -243506.90 93148.16 -349138.34
 
 Inter 
 Corporate loan     3607.00.     3607.00    3607.00  3607.00    3607.00
 
 Gross Block
 
 (Excluding 
 Capital WIP)      71504.98     71506.72   72062.52 72063.41   72063.70
 Gross Block
 
 (Including 
 Capital WIP)      71513.18     71514.92   72062.52 72063.41   72063.70
 
 Inventories        1683.23      1526.90    1415.02  1113.41    1201.94
 
 Depreciation       3289.70      3288.33    3386.32  3354.04    3328.61
 
 Interest          29024.34     33649.46   38835.10 44698.45   51595.13
 
 
 
 
                   2007      2008        2009      2010       2011
 
 Production      1768.22   1761.53      2409.93   2549.80   3992.46
 
 Sales           1459.64   1716.53      2618.48   2625.01   3718.32
 
 Net Profit /
 Loss           65305.92  78949.15     89026.05 100921.51 115665.42 
   
 Growth Rate (%)  
 
 Turnover           0.14     17.62        52.54      0.25     41.64 
 
 - Production      15.05      0.38        36.81      5.80     56.55
 
 Net profit
 (As a % of)  
 
 -Turnover       4475.03   4599.35      3399.91   3844.01   3110.69
 
 - Capital 
 employed*        192.51    269.87       338.11    418.00    552.81
 
 Networth      414444.27 493093.42    582019.47 682840.98 798406.40  
 
 Inter 
 Corporate 
 loan            3607.00   3607.00      3607.00   3607.00   3607.00
 
 Gross Block
 
 (Excluding 
 Capital WIP)   72.65.78  72078.91     71552.47  71566.57  71566.75
 
 Gross Block
 
 (Including 
 Capital WIP)   72.65.78  72078.91     71552.47  71566.57  71566.75
 
 Inventories     1617.27   1607.00      1411.14  13996.93   1541.50
 
 Depreciation    3323.37   3315.40       321.61   3212.35   3166.17
 
 Interest  60230.85 71820.89 83014.38 95498.84 111525.07
 
 Turnover and Loss
 
 During the year under review, the Company achieved a turnover of Rs.
 37.18 Crores as against f 26.25 Crores in the previous year. The
 Company''s .  operations resulted in a net loss of X 1156.65 Crores for
 the year as compared to a net loss of Rs. 1009.21 Crores in the previous
 year. The operating loss during the year was X 11.84 Crores as against
 Rs. 13.46 Crores during the previous year. Low capacity utilisation and
 the prevailing market scenario besides heavy interest burden continue
 to be the major factors affecting the financial position of the
 Company. The Company adopted various strategies to improve its
 operations and effected cuts in its administrative expenses. These
 processes would be pursued vigorously to improve its financial position
 and bring down the operating loss further in the coming year.
 
 MOU 2010-11
 
 We are to inform that during the year 2010-11, the Company had entered
 into a MOU with the DHI, envisaging achievement of Production of X
 77.84 Crores and Sales of X 73:51 Crores .  Amidst various constraints,
 the Company has significantly achieved production and sales of Rs. 39.92
 Crores and X 37.18 Crores respectively which is 56.55 % and 41.64 %
 growth over the previous year.
 
 Polyester Base Medical X-Ray, Industrial X-Ray and Graphic Arts Films
 Plant The Plant has produced 1.50 M.sq.m of Films during the year under
 report as against 0.923 M.sq.m during the previous year. The
 performance of the Plant is expected to improve in the coming year.
 
 Research and Development
 
 Specific Areas in which R&D was carried out by this Company,
 
 R&D activities were carried out on New Product,
 
 Development, Product/Process Improvement, Technology Up gradation,
 Import Substitution , Cost Reduction and Production Trouble Shooting
 works.
 
 Benefits derived as a result of the above R&D,
 
 Company''s requirements with respect to 13 Specialty Chemicals were met
 by manufacturing the same at Organic Synthesis Unit resulting in cost
 savings of Rs 30.88 Lakhs.
 
 Following products, for which Plant Trials are in progress, will soon
 be commercialized.
 
 - Graphic Arts Red Laser Scanner Film /Image Setter Film
 
 - Inkjet Paper
 
 - Subbing of polyesterX- ray Base
 
 - Digital X-ray Film 
 
 - Medical Imaging
 Film (Panchromatic) 
 
 - Laser Printer Film 
 
 - Acid Violet dye and KF 508
 dye (import
 substitution)
 
 Future Plan of Action
 
 Future R&D program covers Development / implementation of know-how
 For the following:
 
 a) Improvement/Cost reduction on the following products:
 
 1.  Medical X-ray Film
 
 2.  Graphic Arts Red Laser Film/Image Setter Film
 
 3.  Industrial X-ray Film
 
 4.  Medical X-ray (Ortho) Film
 
 5.  Processing Chemicals Developer and Fixer
 
 b) Developmental Work on following Products
 
 1.  Low Speed Industrial X-ray Film (IRF 100 and IRF50)
 
 2.  Indigenization and Manufacturing of Fine Chemicals
 
 3.  Acid Violet Dye(import Substitution) for Graphic Arts Gel backing
 
 4.  KF 508 Dye (Import Substitution) for Graphic Arts Products
 
 5.  Silkscreen Printing Film
 
 6.  Thermal Imaging Film
 
 7.  Thermal Paper
 
 c) Non Silver Digital Imaging Technology
 
 New Product for Non Silver Digital Imaging Technology works in
 association with M/s Techno Imaging Systems (P) Ltd., Mumbai,
 progressed well and the Company could generate job order revenue of
 several lakhs rupees
 
 Production trial of Non Silver Screen printing Film was successfully
 carried out and Non-Silver Medical Imaging Film production trial will
 be taken in association with M/s Technova
 
 R&D Expenditure ( In lakhs)
 
 a) Capital : Nil
 
 b) Recurring : 83.12
 
 c) Total : 83.12
 
 d) Total R&D expenditure as
 
 a % of total turnover 2.24%
 
 Technology absorption, adaptation and Innovation:
 
 Information regarding imported technology - Collaboration agreement
 if any - Technology import
 
 - Year of import V Nil
 
 - Has technology been fully absorbed I
 
 - If not fully absorbed, areas where it J has not taken place,
 reasons therefore
 
 Quality Assurance
 
 HPF an ISO 9001:2000 Company has now been accredited with ISO 9001:2008
 certification by the British Certifications INC under JAS-ANZ and has
 taken various steps to maintain the quality standard of its products.
 
 The Quality Assurance Department checks all incoming raw materials and
 packing materials for their suitability for use in production. Raw
 materials from new sources are also developed.  Annual vendor rating
 analysis are carried out to study the performance of suppliers of raw
 materials, chemicals and packing materials.  Sensitivity of the fresh
 and aged photographic  goods are measured. All finished goods are checked
  by QA as a first customer to see that no defective material is passed 
 on to the customer.  QA has addressed the concern of the customer at the 
 point of usage. Analysis on production/rejection performance are done and
 circulated to production division, as feedback information.
 
 QA guides Production in online corrective and preventive action, to
 realise quality target.  Statistical sampling plans are being suggested
 for new products. QA carries out the task of updating testing methods
 and revising specifications for existing products and drawing
 specifications for new products. QA has Radiographic testing
 facilities, facilities for testing of waste water, drinking water and
 process water.
 
 To keep track of performance of our products in the market customer
 complaint details are studied periodically. The quality performance
 index was within the target level of 6 sigma.
 
 Energy Conservation Electrical Energy conservation
 
 The power factor was always maintained well above 0.95 by power
 capacitors according to the requirement. Energy efficient copper chokes
 were installed and maintained. Heater and lighting loads were
 regulated. Power transformers were utilised to the optimum level.
 Preventive maintenance schedule was strictly followed to improve
 efficiency of motors and other equipments. Optimum utilization of
 process equipment was made based on production schedule. The cold
 storage compressor was effectively operated with the help of Automatic
 Control Circuit. The Plant operations were sustained with reduced level
 of maximum demand. Street lights and security lights were effectively
 utilised with the help of timer circuits.
 
 Thermal Energy Conservation
 
 Combustion control in Boiler and in Hot Water Generator was maintained
 at reduced level of excess air. The blow down level was optimized by
 monitoring the feed water and blow down water quality. The Boilers and
 Hot water generator operation was optimized by staggered production
 schedules. Strict follow-up of preventive maintenance activities was
 done.
 
 As a result of the above measures, savings to the tune of Rs. 22 Lakhs
 was achieved.
 
 Personnel
 
 The total number of permanent employees as on 31st March 2011 stood at
 731. Based on the order of the Supreme Court and approval of DHI vide
 Order No. 19(10)/2009-PE.III  20th Oct 2010, 56 persons working as
 casual workers/ NMRs were appointed as regular employees.
 
 The representation of SC and ST categories in the total employees''
 strength was as follows:
 
 Representation of SC category : 130(17.78%) Representation of ST
 category : 42(5.75%)
 
 The Company continued to follow the reservation policies in respect of
 scheduled caste and scheduled tribe communities in accordance with the
 directives issued by the Government of India from time to time.
 
 The total strength of ex-servicemen employed by the Company as on 31st
 March 2011 stood at 16 representing 2.19 % of the total strength. The
 number of physically handicapped employees stood at 22 as on 31st March
 2011 consisting of 3 blind, 9 or the handicapped and 10 deaf and dumb
 employees.
 
 With the trend of manpower rationalization continuing, 45 persons have
 been relieved on VRS during the year and the available manpower is
 being put to the best possible use.
 
 Training and Development
 
 The Company has a full-fledged Training and Development Department to
 take care of the training needs of the employees. Internal training
 programmes were conducted.
 
 Industrial Relations
 
 By and large, the Industrial Relation scenario remained cordial. The
 Industrial Relations Committee comprising of Management and Trade
 Unions representatives met and discussed from time to time to resolve
 various industrial problems.
 
 Environment
 
 For maintaining ecological balance, the Company has done some
 conservation programmes.  Effluent treatment and disposal systems have
 been fine-tuned in compliance with all the statutory rules and
 regulations. During the year under report, the Company has spent Rs. 5.57
 Lakhs in this regard.
 
 Insurance
 
 Assets of the Company were generally insured.
 
 Implementation of official language
 
 The Company continued to take effective steps for implementation of the
 provisions of the Official Language Act and the instructions received
 from the Central Government in this regard from time to time.
 
 Development of Ancillaries
 
 During the year under report, the Company purchased materials to the
 tune of rs. 195.03 Lakhs from Ancillary and SSI Units for its
 production requirements.
 
 Contribution to Exchequer
 
 During the year under review, the contribution made by the Company to
 the Exchequer - both central and State has been of the order of rs.
 572.73 Lakhs by way of Sales tax, Octopi, Customs duty and Excise duty
 etc.
 
 Vigilance Activities
 
 Vigilance Department continued to keep strict vigil within the
 Organization. The Department was engaged in activities like
 investigation of complaints from various sources, conducted surprise 
 inspections and detailed inspections of transactions. To improve Vigilance
 administration and to ensure transparency all open/limited tenders were
 put on the website of the company. Purchase Manual and Marketing Manual
 was updated in accordance with CVC guidelines. A compendium of
 vigilance guidelines framed by Chief Vigilance Officer has been
 forwarded to Head of Departments for adherence. Interactive sessions on
 vigilance with Head of Departments were also conducted by CVO.
 Deficiencies with regard to systems and procedures were pointed out for
 necessary remedial actions. The practice of opening of tenders in the
 presence of trade representatives was introduced to bring out more
 transparency in the organizational transactions. The department
 recommended for introduction of Electronic Fund transfer and
 e-tendering. Vigilance Awareness Week was observed from 25.10.10 to
 01.11.10 in a befitting manner.
 
 RTI Act
 
 The Company has implemented the provisions of the RTI Act 2005 and has
 nominated the following officials:
 
 Public Information Officer:
 
 Mr. A.B. Kumar Assistant Public Information Officer:
 
 Ms. M. Gita Appellate Authority :
 
 Mr. P. Jagadeeswaran, CMD
 
 All applications and first appeals received under RTI during the year
 2010-11, have been addressed.
 
 Particulars of Employees
 
 Information as per Sub-section 2(A) of Section 217 of the Companies Act
 1956, read with Companies (Particulars of Employees) Rules 1975, and
 forming part of Directors'' Report for the year ended 31st March 2011-
 Nil.
 
 Directors
 
 Shri. P. Jagadeeswaran, Director (Finance) continued to hold additional
 charge of the post of Chairman-cum-Managing Director- HPp.
 
 Audit Committee
 
 As on 31.3.2011, the Audit Committee comprised of the following
 members: Shri R.Subburathinam Independent Dir Chairman Shri Gautam
 Basil Independent Dir Member
 
 Shri G.R.Sundaravadivel Nominee Dir Member Shri Shashank Goel Part time
 Govt. Dir Member
 
 Shri. Shashank Goel, Government Director resigned from the Board of the
 Company with effect from 24.3.2011.
 
 Directors'' Responsibility Statement
 
 As per requirements of Section 217 (2AA) of the Companies Amendment Act
 2000, your Directors hereby declare that:
 
 i. In the preparation of the annual accounts, the applicable accounting
 standards have been followed along with proper explanation relating to
 material departures.
 
 ii. The Directors have 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 31st March 2011 and of the profit or loss
 of the Company for that period.
 
 iii. The Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities.
 
 iv. The Directors have prepared the annual accounts on a going concern
 basis.
 
 Auditors
 
 M/s. Padmanabhan Prakash & Co., Chartered Accountants, Chennai have
 been appointed by the Government of India as Auditors of the Company
 for the financial year 2010-11.
 
 Corporate Governance
 
 In compliance with the requirements of Clause 49 of the Listing
 Agreement with the Stock Exchanges, the following are annexed to this
 report:-
 
 - The Management Discussion and Analysis Report
 
 - A report on Corporate Governance
 
 - The Certificate of the Auditors on Corporate
 
 Governance
 
 Status before BIFR / AAIFR / Revival
 
 Consequent upon recommendations of BIFR and AAIFR for winding up of
 HPF, in the year 2005, the Unions, Officers Association and the Company
 had approached the Madras High Court and has obtained a stay on further
 proceedings of BIFR and AAIFR. In the meanwhile, with the approval of
 the Government, a Revised Revival Strategy for HPF was drawn up by
 Consultants, M/s Ernst & Young. The Ministry of Heavy Industries, after
 consideration of the report had forwarded the same to the BRPSE in Apr
 2008.
 
 The Revival proposal of HPF has been considered by BRPSE and
 recommended for approval to the Govt. A CCEA note was circulated by DHI
 and the recommendations were put up to the Cabinet for consideration.
 The Cabinet secretariat has reviewed the note and referred it to a
 committee of Secretaries for their views. The Company now awaits final
 nod of the Cabinet to the Restructuring Proposal, as approved by BRPSE.
 
 The Company has entered into a MOU with the Govt, for the year 2011-12
 involving production/ sales target ofRs. 81.50 Crores each. In
 anticipation of Revival, the Company is committed to achieve these
 targets in the coming year.
 
 Acknowledgement
 
 Your Directors wish to place on record their sincere thanks to the
 Government of India, particularly the Department of Heavy Industry, the
 Bankers, valued customers, for their co- operation and support. Your
 Company sincerely appreciates the valuable services rendered by the
 employees of the Company. Their efforts and support for the cause of
 revival was commendable.
 
                                For and on behalf of the 
   
                                Board of Directors
 
                                S. Girish Kumar 
   
                                Chairman-cum-Managing Director
Source : Dion Global Solutions Limited
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