To The Members,
The Directors wish to submit their 27th Annual Report and Audited
Accounts for the year ended 31st March, 2012.
(Rs. in lakh)
Year ended Year ended
FINANCIAL RESULTS: 31.03.2012 31.03.2011
Gross Income 932.94 624.50
Less : Excise Duty 79.63 52.90
Profit (Loss) Before
Interest & Depreciation 8.66 14.38
Interest 81.93 73.02
Depreciation 12.50 14.86
Net Profit/(Loss) (85.77) (73.50)
Charge on account of
transitional provisions for
Gratuity under Accounting
Standard 15 - -
Loss brought forward (641.66) (568.16)
Deficit carried, to Balance
Sheet (727.43) (641.66)
During the year under review, your company achieved a turnover of Rs.
853.31 lakhs excluding Excise Duty as against previous year''s turnover
of Rs. 571.60 lakhs excluding Excise Duty and suffered a loss of Rs.
85.77'' lakhs as against previous year''s net loss of Rs. 73.50 lakh.
Your company manufactured and dispatched 18 machines during the year
under report as against 13 machines during the previous year.
Your company''s order book position at the beginning of the year under
report consisted of 24 machines for a value of Rs. 978.39 lakhs.
During the year, your company received orders for 9 machines for a
value of Rs. 366.95 lakhs.
Though there is increase in the in-house manufacturing activity during
the year under report, the material consumption has increased to 74.83%
as compared to that of previous year of 71.76%
During the year under report, the company has not accepted any deposits
from the public.
In view of the loss for the year and the unabsorbed accumulated losses
of the earlier years, your directors regret their inability to
recommend dividend for the year under report.
Though the overall economic outlook is satisfactory, inflationary
trends and slowdown in automobile and certain sectors of the
engineering industry is noticeable, the company has an encouraging
However, shortage of adequate working capital and high interest rates
are areas of concern.
Your company has weathered a difficult year and is considering avenues
for raising sufficient funds to meet its working capital requirements
which will help improve its performance during the current year.
DIRECTORS RETIRING BY ROTATION:
Shyam Sirur, Director of the Company, retires by rotation and being
eligible, offers himself for re-appointment.
Mukund Muley, Director of the company, retires by rotation and being
eligible, offers himself for re- appointment.
A brief profile of Directors retiring by rotation is given below:
Shyam Sirur (64) holds a degree in B.E. (Elect.). He has about 42 years
of experience in the field of electronics. He is the Executive Chairman
of Cotmac Electronics Pvt. Ltd., Director of Cotmac Pvt. Ltd., Cotmac
Electronics (Surat) Pvt. Ltd., Cotmac Telecom Pvt. Ltd., Cotmac
Infotech Pvt. Ltd., Sunny Weld Pvt. Ltd., Mipro International Pvt.
Ltd., N.A. Sirur (Hubli) Pvt. Ltd., Cotmac Gastech Pvt. Ltd., Sibella
Pvt. Ltd., Cotmac Synergy Pvt. Ltd., Softech Controls Pvt. Ltd.,
Sibella Technologies (Pvt.) Ltd., Cotmac Industrial Trading Pvt. Ltd.,
Cotmac Precision Casting Pvt. Ltd., and Cotmac DTM EXIM Pvt. Ltd. He is
also the Chairman of the Remuneration Committee and member of the Audit
Committee of the Company.
Mukund Muley (46) holds a degree in B.E. (Elect.). He has about 24
years of experience in the field of Electronics. He is Managing
Director of Cotmac Electronics Pvt. Ltd., and Director of Cotmac
Electronics (Surat) Pvt. Ltd., Cotmac Telecom Pvt. Ltd., Cotmac
Infotech Pvt. Ltd., Cotmac Synergy Automation Pvt. Ltd., Cotmac
Gastech Pvt. Ltd., Softek Controls Pvt. Ltd., Cotmac Clasitech
Singapore Pte. Ltd., Cotmac Precision Casting Pvt. Ltd., and Cotmac DTM
EXIM Pvt. Ltd., and Proprietor of M & M Floriculture; Prerana
Industries (Nashik) and Symo Patterns (Nashik).
Mukund Muley is a member of the Remuneration Committee of the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT:
Pursuant to the requirement under Section 217 (2AA) of the Companies
Act, 1956, with respect to Directors'' Responsibility Statement, it is
1. That in the preparation of the annual accounts . for the financial
year ended 31st March, 2012, the applicable accounting standards had
been followed along with proper explanation relating to material
2. That the Directors had selected such accounting policies and
applied them consistently and made judgements and estimates that were
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
loss for the year under review.
3. 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
4. That the Directors had prepared the accounts for the financial year
ended 31st March, 2012, on a ''Going Concern'' basis.
M/s. B.K. Ramadhyani and Company, Chartered Accountants, Bangalore, the
auditors of the company, retire at the ensuing Annual General Meeting
and being eligible, offer themselves for re-appointment. You are
requested to appoint auditors for the current year and fix their
DISCLOSURE WITH REGARD TO CONSERVATION OF ENERGY, TECHNOLOGY OUTGO,
Information as required under Section 217(1)(e) of the Companies Act,
1956, forms part of this report and is given as an Annexure.
During the year under review, there was no employee who was in receipt
of a remuneration, which is in excess of Rs. 5,00,000 per month or Rs.
60,00,000 per annum, and hence the particulars of the employees as
required in terms of Section 217(2A) of the Companies Act, 1956, are
not given in the report.
CORPORATE GOVERNANCE PROVISIONS:
Pursuant to the provisions of Clause 49 of the Listing Agreement, the
company has adopted the provisions relating to Corporate Governance
Code. Your company has complied with all the mandatory requirements of
the said Corporate Governance provisions. Corporate Governance Report
is furnished separately and forms part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report as per requirements under
Clause-V (A) of the Corporate Governance Provisions prescribed under
Clause-49 of the Listing Agreement is furnished separately and forms
part of this Report.
As required under sub Clause (V) of Clause 49 of the Listing Agreement,
the Company has obtained a certificate from A.R. Menon, Executive
Director and S.G. Gadagkar, Unit Manager (Accounts), confirming
compliance of the aforesaid clause.
CERTIFICATE OF COMPLIANCE OF CORPORATE GOVERNANCE:
Certificate of the Auditors confirming Compliance with the provisions
of Corporate Governance forms a part of this Report.
EXPLANATIONS TO THE REMARKS IN THE AUDITOR''S REPORT: SI.No.4 (a)
Legal proceedings have been initiated for recovering an amount of Rs.
14.58 lakhs. The company has a strong case and is confident of being
successful. In respect of the claims made by a customer of Rs. 73.49
lakhs, the company has been advised that the claim will not stand.
IN ANNEXURE TO THE REPORT:
Re. SI.No.2 (c): The company has subsequently received the
confirmations from the concerned third parties for the materials lying
with them. Consequently, there is no impact on the financial
Re. Sl.No.3 (a): The delay in payment of interest on loan from Holding
Company was due to financial constraints. The arrears will be settled
in due course.
Re. SI.No.9 (a): The company faced severe working capital crunch during
the year and certain statutory payments were delayed. All the statutory
over-dues have since been-settled.
Re. SI.No.9 (b) and (c): Due to financial difficulties, the payment of
Fringe Benefit Tax of Rs. 2,16,976/- has been delayed. Steps will be
taken to clear the same. As fully explained in Note 20(v) of the
financial statements for the year ended March 31, 2012, the entire
subject of payment of property tax and penalty claimed by local
authorities is disputed through the Greater Hubli-Dharwad Industries
Association and the matter is pending before the Government of
Re. SI.No.17: The Company had obtained short term facilities for its
working capital requirements. However, due to financial constraints,
the repayment was delayed and the character of the borrowing has
changed to long term investments.
Industrial relations with the employees of the company remained
cordial, stable and satisfactory during the year under review.
Your directors wish to place on record their appreciation of the
assistance and support extended by the Bankers, Financial Institutions,
State and Central Governments, Customers and Suppliers to the Company.
Your directors express their appreciation for the dedicated and sincere
services rendered by the employees of your Company.
For and on behalf of the Board
Date : 13th August, 2012