Your Directors have pleasure in presenting the 28th Annual Report together with theaudited accounts for the financial year ended 31st March 2011.
| ||(Rs.in Lacs) |
| ||As at 31-03-2011 ||As at 31-03-2010 |
|a) Gross Sales ||39428.41 ||26953.90 |
|b) Net Sales ||39425.60 ||26953.33 |
|c) Profit before Depreciation and taxes ||4117.57 ||1718.17 |
|d) Less: Depreciation ||1884.26 ||1166.49 |
|e) Profit Before Tax ||2233.31 ||551.68 |
|f) Provision for Tax ||475.00 ||95.00 |
|g) Deferred Tax Liability ||175.32 ||90.92 |
|h) Profit after taxes ||1582.99 ||365.76 |
|i) Add: Balance brought forward from last year ||2971.91 ||2606.15 |
|j) Add: MAT Credit Entitlement ||538.86 || |
|k) Balance carried to Balance Sheet ||5093.76 ||2971.91 |
Your Company had produced during the year 16,795 MTs of yarn as against 16,975 MTs in2009-10. During the year, the Company produced 82 lakh meters of Fabric as against 25.52lakhs meters from October, 2009 to March, 2010.
Your Company achieved a turnover of Rs. 39428 lakhs compared to Rs. 26953 lakhs for theyear 2009-10 representing an increase of around 46%. Your Company had earned a net profitafter tax of Rs. 1583 lakhs during the year 2010-11, when compared with a net profit aftertax of Rs.366 lakhs during the year 2009-10 resulting an increase of 333%.
Changes in Share Capital
The Authorized Share Capital of the Company was increased to Rs.35 crores from Rs.25crores. The new Capital of the Company is divided into 2,50,00,000 Equity Shares of Rs10/- each aggregating to Rs. 25,00,00,000 and 10,00,000 Preference Shares of Rs.100/- eachaggregating to Rs.10,00,00,000.
During the year, the Company has converted Foreign Currency Convertible Bonds (FCCBs)of USD 500,000 into 5,23,509 Equity shares of Rs.10/- each at a premium of Rs.32.11 pershare. The Company has also allotted 18,30,000 Equity shares of Rs.10/-each at a premiumof Rs.21 per share to the Promoters on conversion of equal number of warrants. 5,64,250Preference Shares of Rs.100/- each were also allotted to the Promoters.
In view of the necessity of ploughing back of profits to meet the repayment of termloan obligations, your Directors unable to recommend dividend.
During the year under review your Company had incurred capital expenditure of Rs. 530lakhs.
Your Company has achieved exports amounting to Rs. 15,503 lakhs, produced within itsown plant. Out of this, yarn valued Rs. 492 lakhs was exported through third parties.Including yarn procured from outside, your company has achieved export turnover ofRs.17,863 lakhs when compared with the turnover of Rs. 11,889 lakhs in the previous year.
Your Company has its product presence in Latin America, Europe and Far East.
In terms of the provisions of Section 255 and 256 of the Companies Act, 1956, Dr.Akkineni Nageswara Rao and Sri Ankit Jain would retire at the ensuing Annual GeneralMeeting and being eligible offer themselves for re-appointment. Your Board of Directorsrecommends their re-appointment.
Brief profiles of Dr. Akkineni Nageswara Rao and Sri Ankit Jain, the nature of theirexpertise in specific functional areas and the number of Companies in which they holddirectorships and memberships/ Chairmanships of Committees of the Board, as stipulatedunder Clause 49 of the Listing Agreement with the Stock Exchanges, have been providedelsewhere in this Annual Report.
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 March2011, the applicable accounting standards have been followed and there were no materialdepartures;
(ii) That the directors have selected such accounting policies and applied themconsistently and made judgements and estimates which are 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 profit of the Company for 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 Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) That the directors have prepared the accounts for the financial year ended 31stMarch 2011 on a `going concern' basis.
Pursuant to Clause 49 of the Listing Agreement on Corporate Governance: (a) ManagementDiscussion and Analysis, (b) Report on the Corporate Governance and (c) Certificate fromthe Auditors' of the Company regarding compliance of the Corporate Governance also formpart of this Annual Report.
M/s Brahmayya & Co., Chartered Accountants, who are the statutory auditors of theCompany hold office upto the conclusion of the ensuing Annual General Meeting and haveconfirmed their eligibility and willingness for re-appointment.
Mr. S.G. Ramakrishna, Cost Accountant, was appointed as Cost Auditor of the Companysubject to the consent of the Government of India to conduct cost audit of all thedivisions of the Company for 2011-12.
The Company has not invited / accepted deposits from the public within the meaning ofSection 58A of the Companies Act, 1956.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:
The particulars as prescribed under section 217 (1) (e) of the Companies Act, 1956 readwith the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988 are set out in Annexure I to this report.
Particulars of Employees:
There are no employees in the Company, particulars of whom are required to be furnishedunder Section 217(2A) of the Companies Act, 1956. The industrial relations were cordial atall units of the Company.
Your Directors wish to place on record their appreciation for the valuable support andnco-operation extended by State Bank of India, IDBI Bank, State Bank of Hyderabad, IndianOverseas Bank and State and Central Government Agencies.
Your Directors also wish to place on record their sincere appreciation of thecontribution made by the employees of the Company and are thankful to the Shareholders fortheir continued patronage and support.
| ||For and on behalf of the Board of Directors |
| ||R.K. AGARWAL |
| ||Managing Director |
|Place: Secunderabad ||A.K. AGARWAL |
|Date: 30th May, 2011 ||Executive Director |
ANNEXURE-1 TO THE DIRECTORS' REPORT
Details as required under Companies (Disclosure of particulars in the Report of Boardof Directors) Rules, 1988, read with clause (e) of Subsection (1) of Section 217 of theCompanies Act, 1956.
I. Conservation of Energy
The Company is making necessary efforts for conservation of energy. To reduce theenergy cost, energy efficient equipments were used and the effect of the same has beenfelt.
FORM - A
Form for disclosure of particulars with respect to conservation of energy
| ||2010-2011 ||2009-2010 |
|A. POWER AND FUEL CONSUMPTION || || |
|1. Electricity || || |
|a. Purchased Unit (Nos.) ||6,66,78,209 ||6,04,29,675 |
|Total amount (Rs.) ||21,90,03,344 ||17,15,86,136 |
|Rate / Unit (Rs.) ||3.28 ||2.84 |
|b. Own Generation || || |
|i) Through Diesel Generator || || |
|Unit (Nos.) ||99,967 ||1,63,024 |
|Unit per Ltr. Of Oil ||2.95 ||2.93 |
|Cost / Unit (Rs.) ||21.43 ||12.80 |
|ii) Through Steam Turbine / Generators ||- NIL - ||- NIL - |
|2. Coal ||- NIL - ||- NIL - |
|3. Furnace Oil ||- NIL - ||- NIL - |
|4. Other / Internal Generation ||- NIL - ||- NIL - |
B. CONSUMPTION PER UNIT OF PRODUCTION (Kg.)
|Consumption per Kg. of Production ||Current Year ||Previous Year |
|Electricity (No. of Units) || || |
|Yarn (kgs) ||3.30 ||3.95 |
|Fabric (Mtrs) ||1.35 ||1.91 |
|Furnace Oil ||Nil ||Nil |
|Coal ||Nil ||Nil |
|Others ||Nil ||Nil |
FORM - B
A. Form for disclosure of particulars with respect to Technology absorption, Researchand Development (R&D)
|1. Specific areas in which R & D carried out by the Company ||: ||The Company is having R&D in introduction and development of value added products. |
|2. Benefits derived as a result of the above R & D ||: ||New value added products were developed. |
|3. Future Plan of action ||: ||To further develop more value added products and improve the quality of the products. |
|4. Expenditure on R & D ||: ||Expenditure on in-house R&D has been shown under respective heads of expenditure in the profit and loss account as no separate account is maintained. |
|B. Technology absorption, adaptation and innovation || || |
|1. Efforts, in brief, made towards technology ||: ||The company had adopted Absorption, adaptation an innovation indigenous technology and innovated upon the same. |
|2. Benefits derived as a result of the above efforts e.g. product improvement, cost reduction, substitution etc. ||: ||Product improvement, increase in yield and quality resulted increase in Turnover. |
|3. In case of imported technology (imported during the 5 years reckoned from the beginning of the financial year) following information may be furnished ||: ||No technology has been imported during the last 5 years. |
|(a) Technology imported ||: ||Nil |
|(b) Year of import ||: ||N.A. |
|(c) Has technology been fully absorbed ||: ||N.A. |
|(d) If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action ||: ||N.A. |
|C. Foreign Exchange Earnings and Outgo : || || |
|(a) Activities relating to exports, initiatives taken to increase Exports, development of new export markets for production and service, and export plans. ||: ||The information on foreign Exchange Earnings and out-go is furnished in Items 8, 9& 10 in Notes to accounts. |
| ||For and on behalf of the Board of Directors |
| ||R.K. AGARWAL |
| ||Managing Director |
|Place : Secunderabad ||A.K. AGARWAL |
|Date : 30th May, 2011 ||Executive Director |