Your Directors present their 30th Annual Report of the Company for the financial year2011-12 together with the Balance Sheet as at 31st March 2012 and the Profit & LossAccount for the year ended on that date.
|Particulars ||2011-12 ||2010-11 |
|Total Income ||1908.99 ||2521.71 |
|Profit before Depreciation & Interest for the year ||(178.47) ||283.07 |
|Depreciation for the year ||77.04 ||78.84 |
|Interest & Bank charges ||12.30 ||36.38 |
|Deferred Tax Liability / (Asset) ||(66.09) ||45.34 |
|Net Profit / (Loss) ||(201.72) ||122.51 |
Your Company has earned total income of Rs.1908.99 Lakhs and suffered loss of Rs.201.72Lakhs due to fluctuation in cotton and yarn price, as compared to the turnover ofRs.2521.71 Lakhs and profit of Rs. 122.51 Lakhs during the preceding year.
The last quarter of 2011-12 has been encouraging and the Company has achieved theprofit during the said quarter due to stability in price of cotton yarn. Your Directorsexpect to continue the same in the coming year given the favourable market conditions.
On account of accumulated losses your Directors are unable to recommend dividend.
The Company has not accepted any fixed deposits and hence there are no unclaimeddeposits as on 31.03.2012.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The demand for cotton yarn during the year was on downward trend and uncertain. Thecotton price had come down steeply due to global price pressure and reduced domesticdemand. Consequently, yarn prices have also dropped considerably and became a majorconcern for textile industry.
During the period, domestic and international cotton prices fell steadily from the peaklevels seen during March 2011. As a result of this, the prices of cotton stocks held bythe Company were higher than the market prices. This trend remained till December 2011,which had adversely affected the operating margins of industry as a whole and the Companyin specific.
Opportunities and Threats
The Textile industry is much dependent upon the availability of quality raw materialssuch as hybrid cotton and traditional cotton. There is lot of fluctuations in the price ofraw materials, which influence the profitability of the Company. Power shortage and labourshortage also affects the operations of the Company. There is high labour demand in theCompany.
Segment or Product-wise performance
The entire operations of the Company relate to only one segment viz Textiles.Therefore, segment/product-wise details are not applicable.
During the current year there is an improvement in the demand for the Company'sproducts. The forthcoming monsoon season shows hope for higher production of cotton andconsequently lower price. Therefore, there is an encouraging climate for the business ofthe Company in the coming year.
Risks and Concerns
The machines in the Company are more than 18 years old on an average, which needsreplacement. The yarn produced by the Company is mainly supplied to hank market forhandloom purpose.
Statements in the Management Discussion and Analysis are purely forward lookingstatements based on certain assumptions, projections, estimates and expectations. Actualresults may vary due to various external factors, which are directly not under the controlof the Company.
Erosion of Networth
As on 31st March 2012 your Company had a negative net worth of Rs. 138.50 lakhs. YourDirectors believe that the Company's networth could be positive if the favourable businesstrend continues for few years. Therefore, the sickness status has not been referred toBIFR.
Sri CSK Prabhu, Director of the Company retires by rotation and being eligible offershimself for re-appointment.
M/s S.Murali Dharan & Co, the Auditors of the Company retire at the ensuing AnnualGeneral Meeting and have given their consent for reappointment.
Pursuant to the provisions of Section 233B of the Companies Act, 1956, the Board ofDirectors of your Company have re-appointed M/s S. Mahadevan & Co as Cost Auditors,subject to the approval of the Central Government for the financial year 2012-2013.
Directors' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 withrespect to Directors' Responsibility Statement, it is hereby confirmed:
i) That in the preparation of the accounts for the financial year ended 31st March2012, the applicable accounting standards have been followed.
ii) That the Directors have selected such accounting policies and applied themconsistently and made judgements and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the loss suffered by the Company during the year under review.
iii) That the Directors have taken proper and sufficient care for the maintenance ofadequate 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 andother irregularities.
iv) That the Directors have prepared the accounts for the financial year ended 31stMarch 2012 on a going concern basis.
Employer-Employee relations remained cordial during the year under review. Informationpursuant to Section 217(2A) of the Companies Act, 1956, is not furnished, as there were noemployees covered by the said provisions.
Internal control systems and their adequacy
The Internal Auditor appointed, conducts regular audit of the. internal control systemsand reports to the Audit Committee, which reviews the performance and adequacy of internalcontrol systems on a quarterly basis and recommends improvements to the same, whereverfound necessary.
Your Directors place on record the sincere appreciation of the contribution made by theemployees of the Company at all levels. Your Directors further wish to place on recordtheir appreciation for the invaluable support given by various authorities to the Company.
| ||On behalf of the Board |
| ||Sumanth Ramamurthi |
| ||Managing Director |
|Coimbatore ||Dr I Venkat Rao |
|24th May, 2012 ||Director |
Annexure to Directors' Report
A. Energy conservation measures :
Certain energy conservation measures have been taken during the year 2011-2012 in orderto reduce the energy consumption.
B. Research & Development : Nil
C. Technology absorption, Adaptation and Innovation:
The Company has no activity relating to technology absorption
D. Foreign exchange earnings & outgo :
Foreign exchange earnings for the year Rs. Nil Foreign exchange utilized during theyear Rs. Nil
Form for disclosure of particulars with respect to conservation of energy
|POWER & FUEL CONSUMPTION || ||31.03.2012 ||31.03.2011 |
|1. ELECTRICITY: || || || |
|a) PURCHASE || || || |
|Units in Lakhs ||(KWH) ||46.80 ||71.77 |
|Total Amount in Lakhs ||(Rs.) ||205.80 ||284.61 |
|Rate/Unit ||(Rs.) ||4.40 ||3.97 |
|b) OWN GENERATION THROUGH || || || |
|DIESEL GENERATOR || || || |
|Units in Lakhs ||(KWH) ||0.21 ||0.44 |
|Units Per Ltr. Of Diesel Oil ||(KWH) ||3.00 ||3.00 |
|Cost/Unit ||(Rs.) ||15.17 ||13.91 |
|2. HUSK: || || || |
|Quantity ||(Kgs) ||Nil ||Nil |
|Total Cost ||(Rs.) ||Nil ||Nil |
|Average Cost ||(Rs.) ||Nil ||Nil |
|3. CONSUMPTION PER UNIT OF PRODUCTION: || || || |
|Cotton Yarn (production of various counts has been converted to the standard count of 40s) in Lakhs ||(Kgs.) ||10.76 ||17.61 |
|Electricity consumed (Units in Lakhs) ||(KWH) ||47.01 ||72.21 |
|Consumption per Unit of Production ||(KWH) ||4.37 ||4.10 |
| || ||On behalf of the Board |
|Coimbatore ||Sumanth Ramamurthi ||Dr I Venkat Rao |
|24th May, 2012 ||Managing Director ||Director |