KABRA EXTRUSION TECHNIK LIMITED
ANNUAL REPORT 2011-2012
DIRECTOR`S REPORT
To,
The Members of,
Kabra Extrusiontechnik Limited,
Mumbai.
Your Directors are pleased to present the TWENTY-NINETH ANNUAL REPORT and
the AUDITED STATEMENT OF ACCOUNTS for the year ended 31st March, 2012.
1. FINANCIAL RESULTS: (Rs. in Lacs)
PARTICULARS 2011-2012 2010-2011
(Current Year) (Previous Year)
Revenue from Operations and Other Income 19,499.70 22,610.20
Gross Profit before Interest & Depreciation 1,824.72 3,993.99
Less: Interest (Finance Cost) 100.49 88.12
Depreciation 465.31 388.23
Profit Before Tax 1,258.92 3,517.64
Less: Provision for Taxation 291.10 851.26
Provision for Deferred Tax Liabilities 43.58 84.81
Add: Excess provision of earlier years 76.47 -
Net Profit After Tax & Deferred Tax 1,000.71 2,581.57
Balance b/f from previous year 4,076.65 3,543.94
Amount available for appropriation 5,077.36 6,125.51
APPROPRIATIONS:-
Transferred to General Reserves 100.10 1,400.00
Proposed Dividend 319.02 558.29
Tax on Proposed Dividend 51.75 90.57
Surplus balance carried to Balance Sheet 4,606.49 4,076.65
5,077.36 6,125.51
2. DIVIDEND
Your Directors are pleased to recommend a dividend of Re.1/- per share of
Rs. 5/- each for the year ended 31st March, 2012 subject to the Members`
approval [Rs. 1.75 per share of Rs. 5/- each for the previous year on the
Post bonus enhanced capital].
3. OPERATION AND OUTLOOK
Your Company has achieved Operational and Other Income for the year under
review at Rs. 19,499.70 lacs as against the previous years` Operational and
Other income of Rs. 22,610.20 lacs. The profit before tax amounts to
Rs.1,258.92 lacs against the previous years` profit of Rs. 3,517.64 lacs.
Net Profit of the Company after tax, deferred tax and excess provision of
earlier year written back amounts to Rs. 1,000.71 lacs as against
Rs.2,581.57 lacs of the previous year.
Performance for the year under review was adversely affected by slowdown
witnessed in end users industries.
During the year, the Company has manufactured a Five (5) Layer Blown Film
Plant, first time in India with GEC technology at its newly developed
manufacturing set-up at Dunetha and the said plant has been successfully
supplied to a company based in Kerala to produce barrier film for edible
oil packaging.
4. EXPORTS:
Exports during the year is Rs. 6,184.54 lacs, as against previous years`
export of Rs. 6,798.79 lacs and is about 32.80% of total sales turnover.
5. DIRECTORS
In accordance with the Articles of Association of the Company and in view
of provisions of Section 255 of the Companies Act, 1956, Shri Anand
Shreevallabh Kabra and Shri Mahaveer Prasad Taparia, Directors of the
Company are retiring by rotation at the ensuing Annual General Meeting and
being eligible, seek re-appointment.
6. DIRECTORS" RESPONSIBILITY STATEMENT:
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors
hereby confirm that:
(i) in the preparation of annual accounts for the year ended 31st March,
2012, the applicable accounting standards have been followed along with
proper explanation relating to material departures, if any;
(ii) they have selected such appropriate accounting policies and applied
them consistently and made judgements and estimates that were reasonable
and prudent so as to give the true and fair view of the state of affairs of
the Company as at 31st March, 2012 and of the profits of the Company for
the said financial year;
(iii) they 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) they have prepared the said accounts on a "going concern basis".
7. STATUTORY AUDITORS:
Messers. Kirtane & Pandit, Chartered Accountants, Statutory Auditors of the
Company will retire from the office of the Auditors at the conclusion of
the ensuing Annual General Meeting and being eligible offer themselves for
re-appointment. They have furnished a certificate of their eligibility for
re-appointment u/s. 224 (1 -B) of the Companies Act, 1956 and they are not
disqualified under amended section 226(3)(e) of the said Act.
8. COST AUDITOR:
Shri A.P. Raman, a qualified Cost Accountant has been appointed as a Cost
Auditor of the Company pursuant to section 233(B)(1)&(2) of the Companies
Act, 1956 and subject to the approval of the Central Government.
In terms of order dt. 24m January 2012 issued by Ministry of Corporate
Affairs, Cost Audit Branch, his appointment is made to conduct audit of
cost accounting records of financial year from 1st April, 2012 to 31st
March, 2013 maintained by the Company in respect of its product i.e.
Plastic Processing Machinery covered by Chapter 84 of Central Excise Tariff
Act.
He has furnished certificate of his eligibility for such appointment and he
is free from any disqualification and is independent and is at arm`s length
relationship with the company.
In respect of Financial Year 2011-12, aforesaid qualified Cost Accountant
shall certify Compliance Report as prescribed under Rule 5 of (The Cost
Accounting Records) Rules, 2011.
9. LISTING FEES:
The Company confirms that the Annual Listing Fees due to BSE Ltd. and
National Stock Exchange of India Ltd. for the financial year 2012-13 have
been paid.
10. CORPORATE GOVERNANCE:
A separate section on Corporate Governance is included in this Annual
Report as required under Listing Agreement.
11. EMPLOYEES RELATIONS:
Employees relations continued to be cordial throughout the year. The
Directors appreciate the efforts put in by the employees at all the levels.
As required by the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, none of the employee draws salary in excess of Rs. 5,00,000/- per
month, hence no disclosure required to be made.
12. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORBTION:
A Statement giving details of conservation of energy, technology absorption
and foreign exchange earnings and outgo in accordance with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988
forms part of this report as ANNEXURE A.
ACKNOWLEDGEMENT
Your Directors would like to express their appreciation for the support
received from the Shareholders, Bankers, Government Authorities, Stock
Exchanges, Customers, Suppliers and Business Associates at all levels
during the year under review. Your Directors also wish to place on record
their appreciation for the committed services of the executives, staff and
workers of the Company.
For and on behalf of the Board
Place: Mumbai S.V. Kabra
Date : 29th May, 2012 Chairman & Managing Director
ANNEXURES TO DIRECTORS` REPORT
ANNEXUR - `A`.
DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO AS REQUIRED
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.
A. Conservation of Energy:
(a) Energy Conservation Measures taken: Continuous efforts are being made
by the production team for conservation of energy. Heating time for trials,
testing etc. is strictly monitored and certain savings are expected, but
total impact of this cannot be measured.
(b) Additional Investments and proposals, if any, being implemented for
reduction of consumption of energy: None.
(c) Impact of measures at (a) & (b) above, for reduction of energy
consumption and consequent impact on the cost of production of goods: With
the implementation of measures indicated in (a) above, it is expected that
there would be a corresponding favourable impact on the energy cost per
unit of production.
B. Technology Absorption:
1. Specific areas in which R&D carried out by the Company:
Following extrusion lines have been developed:
* Twin Screw-92 to process CPVC pipe with twin track for plumbing pipe
application;
* KAGE 3 layer film plant with 600 Kg/Hr output (with GEC Technology);
* KAGE 5 layer film plant with 550 Kg/Hr output (with GEC Technology);
* Automatic Surface Winder KVP-II with Pneumatic Lay on systems for
controlling winding roll hardness
* High-output Stretch Cling Film Plant for hand-wrap application at 220
Kg/Hr with 75/55/55 mm extruders and 1800mm cold parts.
2. Benefits derived as a result of the above R&D: Product range of the
Company has widened and the customers benefited by unique advantages of
highest out-put, per unit power consumption, lowest investment with regards
to output, space saving by compact design, control by automation /
electronic device and ease of operation.
3. Future plan of action: Your Company is making continuous effort to
develop new range of extrusion lines.
4. Expenditure on R & D: During the year, the Company spent recurring
amount of expenditure on R & D which have been included in the respective
expense head. No separate account head for expenditure on R & D has been
maintained.
5. Technology imported during the last 5 years:
Technology Imported Imported From Year Status
of
Import
}
Manufacture of Pipe M/s. Battenfeld April } Valid till March,
Extrusion, Profile Extrusionstechnik 2006 } 2016
Extruders, Film & GmbH, Germany** }
Sheet Extrusion and }
Planetary Roller }
Extruders. }
}
Manufacture of Pipe M/s. American April }
& Profile Extruders, Maplan 2006 }
Tooling of Extrusion Corporation, }
lines for siding, USA }
fencing and decking }
including composite }
system }
}
Manufacture of Single M/s. Battenfeld Since }
Screw Extruders Cincinnati Austria November}
including PE Pipe, Film GMBH** 2011}
& Sheet, Planetary }
Roller Extruders, Twin }
Screw Extruders for }
PVC Pipes, Profile }
Pallet and Polymer }
**Above companies are Member of Battenfeld-Cincinnati Group
C. Foreign Exchange Earnings and Outgo: 2011-2012 2010-2011
(Rs. in Lacs) (Rs. in Lacs)
Foreign Exchange Earned 6087.85 6499.34
Foreign Exchange Used 731.58 362.15
For and on behalf of the Board
Place: Mumbai S.V. Kabra
Date : 29th May, 2012 Chairman & Managing Director
MANAGEMENT DISCUSSION AND ANALYSIS
1. INDUSTRY STRUCTURE AND DEVELOPMENTS:
Kabra Extrustiontechnik (KET) is the flagship company of Kolsite group. The
latter which is in the 50th year of its operations, is one of the largest
players in the plastic extrusion machinery and plastic masterbatches market
and is known for its innovative offerings.
KET specializes in providing plastic extrusion machinery for pipe and films
manufacturing. It has plants in Daman. In line with this economic outlook,
the plastics extrusion machinery industry`s prospects too appear positive
in the longer term. As per Plastindia Foundation the growth of the plastics
industry has seen the number of processing units grow from 25,000 in 2010
to 30,000 in 2011. The exponential growth anticipated over the next three
years will see this number go up to 40,000 units. This is reflective of the
positive outlook for our sector.
2. BUSINESS OVERVIEW AND OUTLOOK:
In the year 2010-11 KET had acquired 15% stake in Gloucester Engineering
Company Inc (GEC) which will help KET to get technology and expertise in
the high-end Blown Film Plants which find application in packaging for
lamination, shrink and stretch wraps. The Company has demonstrated its
first "KAGE" 3 layer film plant at their factory in Dunetha with an output
of 600 kgs/hr on a 40 micron thick lamination film which find applications
in the food packaging industry.
In the Pipes segment, the Company is focusing on Window profile extrusion
due to increasing awareness of advantages of the PVC profiles and resultant
demand. The Company also offers cPVC pipe extrusion lines in single as well
as dual strand with AMC technology. Having established a strong presence in
the irrigation segment which continues to provide major opportunities for
growth, the Company, along with the round drip has now entered the flat
drip lines market.
The extrusion machines supplied by KET facilitate space savings, lower
energy consumption and high quality output for its customers.
The collaboration with Battenfeld, Germany, which the company has since
1983 only got stronger in the financial year 2011-12 as the technology
agreement has been amended recently to include technology from its group
member Battenfeld-Cincinnati, Austria. With this, KET will now be able to
enhance its production program.
The Company continued its focus on marketing activities and strengthening
its agent network by participating in various trade fairs and exhibitions.
It has made significant inroads in many new markets.
During the financial year 2011 -12, the Company participated in 8 national
and international exhibitions to showcase its product portfolios to
strengthen its geographical base as well as clientele.
3. KET`s COMPETITIVE POSITIONING:
KET`s competitive positioning lies in its understanding of the indigenous
markets with strong client relationships coupled with continuous efforts at
enhancing its technological expertise.
Being a market leader with close to five decades of promoter experience in
the industry, it has a strong brand loyalty and dedicated target base.
The Technological collaborations forged by Company over a period of time
have helped it to capture the import market in India and expand its
geographical base to more than 70 countries.
The company is present in extremely potent segment with huge demand
potential from the plastics industry both in the pipe and films segment.
4. SEGMENT-WISE PERFORMANCE:
Your Company is operating only in one segment i.e. Plastic Extrusion
Machinery and Allied Equipments.
5. RISKS AND CONCERNS:
Technology obsolescence, market conditions, growing competition including
imports and unorganized sector are major risks perceived by the Company
that may have adverse effect on Company`s business and its margin in
future.
The Company has deepened its association with Battenfeld Cincinnati to
include Battenfeld Cincinnati-Austria by amending its technology transfer
agreement thus getting access to technology from Austria too.
The Company strives consistently to deepen its product portfolio and offer
a complete range of offerings to its existing clients. At the same time,
the company is widening its product offerings to capture new industry
applications which are in demand due to increasing awareness and in nascent
industries.
The Commitment to technology and offering high quality machines is
reflected in the Company`s plants including the new one at Dunetha. Its
state of the art painting facilities use technology developed for the
exacting standards of the Engineering industry. This will provide the
clients with assurance of adequate corrosion protection and very fine paint
finish.
The Company continuously focuses on safety of environment and is increasing
its awareness amongst the employees of the Company. Measures are being
taken continuously to control cost on all fronts.
6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Management feels that the internal controls in place are sufficient
considering the complexity, size and nature of operations of the Company.
Internal Audit Team consists of well experienced members, who constantly
review various aspects of control systems and conduct audit under well laid
out audit programmes to ensure effectiveness of the controls.
7. FINANCIAL & OPERATIONAL PERFORMANCE:
Sr. Particulars 2011-2012 2010-2011 %
No. (Rs. in Lacs) (Rs. in Lacs) Changes
1. Income from Operations
(Net of Excise) 19,028.84 21,952.30 -13.32
2. Other Income 470.86 657.90 -28.43
3. Net Profit after Interest,
Depreciation, Tax and
Deferred Tax 1,000.71 2,581.57 -61.24
Your Company has a low debt equity ratio and is well placed to take care of
its borrowings made by way of credit facilities and term loan.
The Company`s credit terms and recovery mechanism are effective enough to
check the financial defaults by any of the customers. No financial defaults
of whatsoever nature were reported during the year under review.
8. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT,
INCLUDING NUMBER OF PEOPLE EMPLOYED:
Industrial relations during the year were cordial and peaceful without any
disruption of manufacturing activities. Programmes and conferences aiming
at leadership development and know-how upgradation with advancing
technology on all fronts were conducted during the year.
Manpower as on 31st March, 2012
including Workers, Staff and
Executives: 351
9. CAUTIONARY STATEMENT:
Actual performance may differ from projections made, as the Company`s
operations are subject to various economic conditions, government
regulations and other incidental factors.
For and on behalf of the Board
Place: Mumbai S. V. Kabra
Date : 29th May, 2012 Chairman & Managing Director |