DIRECTORS
Your directors have pleasure in submitting the Forty fifth Annual Report together withthe Audited Accounts for the year ended 31st March, 2010.
1. FINANCIAL RESULTS
Rs. In Lacs
| 2009-2010 | 2008-2009 |
| NET SALES & OTHER INCOME | 893.24 | 706.19 |
| PROFIT / LOSS (- ) BEFORE FINANACIAL | 97.59 | -123.62 |
| CHARGES AND DEPRECIATION | | |
| LESS: FINANCIAL CHARGES | 4.73 | 3.62 |
| DEPRECIATION | 39.63 | 47.99 |
| PROFIT / ( - ) LOSS FOR THE YEAR | 53.23 | -175.23 |
| LESS /ADD:ADJUSTMENT RELATING TO | | |
| PRIOR YEARS - OTHERS | 24.24 | 1.48 |
| BALANCE PROFIT / (- ) LOSS | 77.47 | -173.75 |
| LOSS BROUGHT FORWARD | 10112.97 | 9939.22 |
| ACCUMULATED LOSS | 10035.50 | 10112.97 |
2. PERFORMANCE
The turnover for the year under review, mainly conversion charges and other income wasRs. 893.24 Lacs compared to the turnover of Rs.706.19 lacs for the year 2008-09.TheCompany’s operations resulted in a net profit of Rs. 53.23 Lacs in the year 2009-10compared to the net loss of Rs.175.23 lacs in the year 2008-09.
Due to non availability of adequate working capital finance, the Company could not haveown production, and therefore the Company had to continue taking conversion works to keepthe Mill working. However the Company made net profit in the year.
3. DIVIDEND
Due to accumulated losses, your directors are unable to recommend any dividend for theyear under review.
4. FINANCIAL POSITION
The Company continues to face critical financial position, due to accumulated loss andthe non availability of sufficient working capital funds. The Company has been declared"Sick Industrial Company" by Honb’le BIFR and rehabilitation process is inprogress. The Company is hopeful that the Rehabilitation Scheme will be finalized soon andthe operations will improve.
5. MANAGEMENT DISCUSSION AND ANALYSIS OF THE OPERATIONS
The management discussed and analysed the operational results for 2009-2010 andcritically studied the factors that affected production, sales and profit. The managementwas satisfied with the efforts taken by the Company in the situation prevailed during theyear 2009-10.
6. FUTURE TRENDS
Positive trends are noticed in the Textile Industry and the yarn market is good andimproving. The Company will be able to show improvements during the current year,depending on the continuance of positive changes in the Textile Industry and power cutposition. However, availability of the sufficient working capital funds and finalizationof viable Rehabilitation Scheme are the key factors that are essential for improving theoperations in the coming years.
7. DIRECTORS
During the year under review there was no change in the Board of Directors.
At this Annual General Meeting, Sri B. Venkatesan is retiring by rotation and he beingeligible, offers himself for re-appointment.
8. AUDITORS
The retiring auditors M/s. Elangovan & Natarajan, Chartered Accountants areeligible for reappointment.
9 . DIRECTORS' RESPONSIBILITY STATEMENT
In compliance of Section 217(2AA) of the Companies Act 1956 as amended by Companies(Amendment) Act 2000, the Directors of your Company confirm that
a) In the preparation of the annual accounts, the applicable accounting standards hadbeen followed and there are no material departures.
b) The directors have selected such accounting polices and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe Profit of the Company for the year ended on 31.03.2010.
c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
d) The annual accounts have been prepared on a going concern basis.
10. STOCK EXCHANGES
The Company’s equity shares are listed at the Bombay Stock Exchange Ltd, Mumbaiand Madras Stock Exchange Ltd, Chennai. The Company has been paid Annual Listing Fee toboth these Stock Exchanges for the Financial Year 2009-2010.
11. DISCLOSURES
(i) During the year, there were no transactions of material nature with the Directors,Management, Subsidiaries or their relatives etc., that had potential conflict with theinterests of the Company at large. (ii) There were no instances of non-compliance by theCompany, penalties, strictures imposed on the Company by Stock Exchanges or SEBI or anyother Statutory Authority on any matter related to the Capital Markets, during the lastthree years.
12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTOIN AND FOREIGN EXCHANGE EARNING ANDOUTGO.
Information pursuant to Section 217(1)(e) of the Companies Act, 1956 is given inAnnexure I and form part of this report.
13. PARTICULARS OF EMPLOYEES
The Company had no employees during the year who were in receipt of remunerationprescribed u/s 217(2A) of the Companies Act, 1956.
14. ACKNOWLEDGMENT
Your Directors wish to thank the employees at all ranks for the co-operation anduntiring efforts given for running the Company.
| Place : Attur | On behalf of the Board |
| Date : 07.08.2010 | |
| R.PRABAKARAN |
| Managing Director |
| B.VENKATESAN |
| Director |
ANNEXURE - I TO THE DIRECTORS' REPORT
STATEMENT CONTAINING PARTICULARS PURSUANT TO THE COMPANIES (DISCLOSURE OF PARTICULARSIN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF DIRECTORS' REPORT.
A. CONSERVATION OF ENERGY
The Company is continuing its thrust on energy conservation by taking suitablemeasures.
REQUISITE DATA IN RESPECT OF ENERGY CONSUMPTION ARE GIVEN BELOW: POWER AND FUELCONSUMPTION
I. ELECTRICITY
| | 2009-2010 | 2008-2009 |
| a Purchased Units | KW in lacs | 62.77 | 64.13 |
| Total Amount | Rs.in lacs | 281.99 | 291.72 |
| Rate/ Unit | Rs/KW | 4.49 | 4.55 |
| b Own Generation through Diesel | KW in Lacs | 2.57 | 2.27 |
| Generator Unit/Ltr | KW | 3.27 | 3.23 |
| Cost per Unit | Rs/KW | 10.48 | 10.63 |
II. CONSUMPTION PER KG OF PRODUCTION
| | 2009-2010 | 2008-2009 |
| Total Units | KW in lacs | 65.34 | 66.40 |
| Production | Kgs.in lacs | 13.25 | 14.52 |
| Unit/Kg | KW | 4.93 | 4.57 |
B. TECHNOLOGY ABSORPTION
In view of paucity of funds we have not carried out any technology upgradation work.Only routine and required maintenance works were carried out.
C. FOREIGN EXCHANGE EARNING AND OUTGO - NIL
| On behalf of the Board |
| R.PRABAKARAN |
| Place: Attur | Managing Director |
| Date: 07.08.2010 | |
| B.VENKATESAN |
| Director |
ADDENDUM TO DIRECTOR'S REPORT
The Auditors comments in the Auditors Report dated 07.08.2010 for the year ended 31stMarch 2010 and the Board's reply are given below :-
| Sl.No | Auditors' Comment | Boards' Reply |
| in Audit ors Repor t annex ure | | |
| iii (d). | The Company is not regular in the repayment of principal of Loans. | The processing of rehabilitation scheme is in progress. The repayment of loans will be made as per the scheme to be approved. |
| vi. | The Company has not accepted any deposits from the Public from 01.04.1998.However in respect of deposits accepted before 01.04.1998 the Company has not complied with the provisions of section 58A of the Companies Act ,1956 and the Companies (Acceptance of Deposits) Rules 1975 with regard to the repayment of deposits and payment of interest. With regard to the repayment of small deposits, the Company has intimated to the Company Law Board as per the provisions of Section 58 AA of the Companies Act and also complied with the requirements of the Order passed by the Company Law Board. | The Company has incurred huge loss in the earlier years. The net worth of the Company is fully eroded and has become negative. The reference made by the Company to the BIFR has been registered with BIFR and the Company is declared as a "Sick Industrial Company" under the Sick Industrial Companies (Special Provisions) Act 1985 by BIFR and rehabilitation process is in progress. The Company is unable to comply with the provisions of Companies Act 1956 regarding repayment of public deposits. With regard to matured, unpaid small deposits, the Company has intimated to the Hon’ble Company Law Board, Chennai complying with the Provision of Sec.58AA of the Companies Act 1956.Also the Company has not accepted any deposits from 01.01.1998. |
| ix a. | In our opinion and according to the information and explanations given to us, undisputed statutory current dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Excise Duty, Cess etc. have been regularly deposited with the appropriate authorities. There are arrears of statutory dues as at 31.03.2010 for a period of more than six months from the date they became payable. | The Company has been paying arrears of Statutory dues depending on funds position from time to time, so as to clear the arrears at the earliest. |
| xi | According to the information and explanations given to us, the Company has defaulted in repayment of dues to Financial Institutions, Banks and Debenture Holders. | The processing of rehabilitation scheme is in progress. The repayment of loans will be made as per the scheme to be approved. |
| On behalf of the Board |
| Place: Attur | |
| Date: 07.08.2010 | |
| R.PRABAKARAN |
| Managing Director |
| B.VENKATESAN |
| Director |