Mahalaxmi Rubtech

The Directors have pleasure in presenting herewith the Directors
 Report, along with the Audited Balance Sheet and Profit & Loss Account
 for the year ended 31st March, 2008.
 
 FINANCIAL RESULTS:                                  2007-08  2006-07
                                             (Rs. in Lacs) (Rs. in Lacs)
 
 Sales & Other Income                          1738.13         1009.26
 Profit before Depreciation                     344.69          210.87
 Less: Depreciation                             115.65           68.83
 Profit before Tax                              229.04          142.04
 Less: Provision for Taxation                    66.00           35.70
 Less: Provision for deferred Taxation            7.48           20.20
 Profit after Tax                               155.56           86.14
 
 OPERATION AND REVIEW:
 
 Leveraging the opportunities provided by the growing economy, your
 Company continues to see healthy growth in its activities. The total
 income increased to Rs.
 
 1738.13 lacs from Rs. 1009.26 lacs in the previous year, at a growth
 rate of 72.22%. Our Textile business aggregated Rs. 1219.11 lacs, up by
 128.18% from Rs.  534.28 lacs in the previous year. The Gross profit
 amounted to Rs. 229.04 lacs as against Rs. 142.04 lacs in the previous
 year. 
 
 We continue to ripe the benefits of economies of scale. We have
 increased the numbers of Looms during the previous year. Further to
 expand our business of rubber printing blankets, we have imported wider
 width machine, which is under erection, after it becomes operative, we
 will have more benefit of economies of scale. The net profit after tax
 and exceptional item was Rs. 155.56 lacs as against Rs. 86.14 lacs in
 the previous year. We continue to invest and reap benefits through
 quality initiatives.  
 
 DIRECTORS:
 
 Shri Nehal M. Shah, liable to retire by rotation at the ensuing Annual
 General Meeting and being eligible offer himself for reappointment.
 
 DIRECTORS RESPONSIBILITY STATEMENT:
 
 In accordance with the provisions of Section 217(2AA) of the Companies
 Act, 1956 as amended by Companies (Amendment) Act, 2000, your Directors
 state: 
 
 (i) that in the preparation of the annual accounts, the applicable
 accounting standards have been followed along with proper explanation
 relating to material departures; 
 
 (ii) that the directors have selected such accounting polices 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 ended on
 31.03.2008 and of the profit of the Company for the year ended on
 31.03.2008;
 
 (iii) that the directors have 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; (iv) that the directors have prepared annual accounts
 on a going concern basis.
 
 CORPORATE GOVERNANCE:
 
 Your company has complied with the requirements regarding Corporate
 Governance as required under Clause 49 of the Listing Agreement entered
 into with the Stock Exchange, where the Companys shares are listed
 over the year and it is a continuous and ongoing process. A Report on
 the Corporate Governance in this regard is made a part of this Annual
 Report and a Certificate from the Auditors of the Company regarding
 compliance of the conditions of the Corporate Governance is attached to
 this report.
 
 MANAGING DISCUSSION AND ANALYSIS:
 
 
 A.  Business Overview
 
 The Companys turnover at Rs. 1722 lacs, has recorded an increase of
 about 71.95% compared to the previous year. Meanwhile the Net Profit
 for the year (before depreciation and tax) recorded increase of about
 63.46% compared to the previous year. This is attributed due to
 increase in both domestic as well as Export sales and also due to
 increase in revenue from the Textile division. The profit before tax,
 after absorbing depreciation, for the year stands at Rs. 229.04 lacs.
 
 Your company has continued to put in all possible efforts to boost
 exports, during the year under review and the same have translated in
 enhanced earning of valuable foreign exchange from Export sales, which
 is to the tune of Rs. 199.28 lacs.
 
 B.  Industry Structure and Development:
 
 Mahalaxmi Rubtech Limited (MRT) is active in two segments namely,
 Rubber and Textiles. Its success over the last few years has been due
 to the combination of many factors like, its aggressive expansion
 plans, product innovations, its global reach, and its strong presence
 within the domestic market. The above factors have led to accelerated
 growth in 2007-08 both in revenues and profit. Rubber divisions
 primary product comprises Textile Printing Blankets, which are widely
 used in the textile screen printing industry. MRT is one of the largest
 players in this segment and holds more than 50% share in the domestic
 market. It also has a fairly widespread global presence with exports to
 more than 25 countries, with major countries of export being China,
 Pakistan, Brazil, Colombia, Thailand and Indonesia.  Apart from
 Printing Blankets, MRTalso manufactures Polymer Coated Engineered
 Fabrics, which has diverse end-uses in products like defense equipment,
 safety & protective clothing, gaskets, diaphragms, bellows, expansion
 joints and many more.  
 
 In Rubber division, MRT also manufactures Air Cell, a value added
 product used in oil filled transformers and supplied to transformer
 manufacturers. Your Company also manufactures value-added hydraulic
 seals and spares, supplied to manufacturers and users of hydraulic
 equipments.  
 
 In order to grow beyond the obvious, MRT is aggressively pursuing a
 policy of expansion. As a measure of the same, the Company has imported
 a complete plant 11 from France, for manufacturing of wide width
 Textile Printing Blankets. The said plant is under erection and would
 be operational within the current financial year. MRT has plans to
 expand its ambit and scope of activities in the technical textile
 space. The diversification and expansion is planned with a special
 focus on Coated and Laminated Textiles and Polymer Coated Engineered
 Composites. Some of the emerging areas of technical textiles which the
 company plans to explore are in the field of Geotextiles, Healthcare,
 Safety, Industrial, Aerospace, Marine and Military sector.  
 
 In the textile segment, its unit Maheeka Textech continued to focus on
 enhancing its revenue from the sales of Grey and Finished Fabrics. The
 company has also developed and started manufacturing speciality fabrics
 used for the technical textiles. Maheeka Textech is a high-tech weaving
 unit which includes warping, sizing and world-class automatic rapier
 looms.
 
 C.  Research & Development:
 
 Increased globalization has made the sale of products and retaining of
 customers highly competitive. To overcome a significant volatility in
 the market, the need of the hour is high customer satisfaction and
 value for money from the product. Keeping the above objective as
 paramount, the research and development activities were focused into
 attending major customer complaints/suggestions in order to improve
 customer satisfaction. Your Directors are pleased to inform that the
 above efforts have lead to considerable reduction of customer
 complaints. Your company has successfully launched products of better
 quality with new aesthetic look as per customer requirements.  
 
 D. Internal Control System:
 
 The Company has an adequate system of internal control implemented by
 the management towards achieving efficiency in operations, optimum
 utilization of resources and effective monitoring thereof and
 compliance with applicable laws.
 
 E. Human Resources:
 
 The Company attaches priority to human resource development, with focus
 on regular up-gradation of the knowledge and skills of our employees
 and equipping them with the necessary expertise to meet the challenges
 of change and growth successfully.
 
 F. ISO 9001:2000 Certification:
 
 We wish to inform you that your company has obtained the ISO 9001:2000
 Certification, Accredited by TUV South Asia Private Limited, covering
 all major criteria Development and Manufacturing of Rubber Products
 such as Textile Printing Blankets, Rubber Coated Fabrics, Precision
 Rubber Moulded Parts, Flexible Separators and Hydraulic Seals.
 
 Throughout our corporate career, your company has been quality-focused
 and technology-driven. From our inception, these were the factors that
 enabled us to manufacture truly world class Textile Rubber Printing
 Blankets and Rubberised Textile Fabrics, through in-house R&D, and
 successfully market them around the world.
 
 G. Cautionary Statement:
 
 Statements in the Management Discussion and Analysis describing the
 Companys objectives, expectations or predictions may be forward
 looking within the meaning of applicable securities, law and
 regulations. Actual results may differ materially from those expressed
 in the statement. Important factors that could influence the Companys
 operations include global and domestic supply and demand conditions
 affecting selling prices of finished goods, input availability and
 prices, changes in government regulations, tax laws, economic
 developments within the country and outside the country and other
 factors such as litigation and industrial relations.
 
 AUDITORS:
 
 M/s. Bhanwar Jain & Co. .Chartered Accountants, Ahmedabad, Auditors of
 the company retires, and being eligible, offer themselves for
 reappointment.
 
 FIXED DEPOSITS:
 
 The company has not accepted any deposits from public within the
 meaning of provisions of section 58A and 58AA of the Companies Act,
 1956 and the rules framed there under and the directives issued by the
 Reserve Bank of India.
 
 BONUS ISSUE:
 
 During the year under review, on May 1, 2007 Your Company has allotted
 Bonus shares in the ratio of 1 new Equity share for every 4 Equity
 shares held in the Company. The Bonus shares were listed on the Bombay
 Stock Exchange Limited, and the Exchange has granted trading permission
 for the same w.e.f. May 21, 2007.
 
 AMALGAMATION:
 
 During the year under review, the Board of Directors of the Company has
 approved the Scheme of Amalgamation of Mahalaxmi Fabric Mills Pvt. Ltd.
 (a closely held group Company) with the Company, in Board Meeting held
 on February 19, 2008. The Company has received No Objection to the
 Scheme form the Bombay Stock Exchange Limited, on May 6, 2008.The
 Company has already filed an application before Honble High Court of
 Gujarat, for approval of the Scheme, the Court has ordered to convene
 the Extra ordinary General Meeting of the Members of the Company, on 8
 July, 2008 for approval of the Scheme. On approval from the Honble
 High Court of Gujarat, Amalgamation will take effect from the Appointed
 date as mentioned in the Scheme of Amalgamation, 1st April, 2007.
 
 DIVIDEND:
 
 Your directors have pleasure to recommend Dividend at the rate of 5%
 (Rs. 0.50 per Share) (Last year 5%) on paid up Share Capital of the
 Company, amounting to Rs. 25,86,938/-. The Shares issued as Bonus are
 also eligible for dividends.
 
 INSURANCE:
 
 All the assets of the company including the inventories, Building,
 Plant and Machineries are adequately insured.
 
 COMPULSORY TRADING IN DEMAT:
 
 Trading of the equity shares of your Company are being traded
 compulsorily in DEMAT FORM from 23/03/2001 pursuant to circular of
 SEBI.
 
 EMPLOYEES:
 
 The information required under sub section (2A) of section 217 of the
 Companies Act, 1956 in respect of certain employees of the company are
 as under:
 
 (a) Employees employed throughout the year and who were in receipt of
 remuneration of not less than Rs.24,00,000/•¦ per annum in terms of
 section 217 (2A) (a) (i)-None.
 
 (b) Employees employed for the part of the year and who were in receipt
 of remuneration of not less than Rs.2,00,000/- per month in terms of
 section 217(2A) (a) (ii)-None.
 
 (c) None of the employees is covered under section 217 (2A) (a) (iii).
 
 CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:
 
 The information required under section 217 (1) (e) of the Companies
 Act, 1956 read with the companies (Disclosures of Particulars in the
 report of the board of Directors) Rules, 1988 is annexed hereto and
 forms part of this report.
 
 APPRECIATION:
 
 We thank our customers, vendors, investors and bankers for their
 continued support during the year. We place on record our appreciations
 for the contribution made by employee at all levels. Our consistent
 growth was made possible by their hard work, solidarity, cooperation
 and support. We look forward for their continued support in the future.
 
                                             For and behalf of the Board
                                          For, MAHALAXMI RUBTECH LIMITED
                                                        S/d-
                                                  JEETMALB.PAREKH
                                                  (CHAIRMAN)
 Place:  Ahmedabad.
 Date :  23rd June, 2008