To The Members,
Your Directors have pleasure in presenting the 23rd Annual Report of your Companytogether with the Audited Statements of Accounts for the year ended March 31, 2010.
(Rs. in Lacs)
|Financial Results ||Year Ended 31.3.2010 ||Year Ended 31.3.2009 |
|Income ||1619.35 ||1156.36 |
|Profit before Tax & Extraordinary Items ||33.11 ||26.33 |
|Less/(Add) : Provision for Taxation ||6.70 ||(72.91) |
|Profit after Tax ||26.41 ||99.24 |
|Add : Profit/(Loss) brought forward from Previous Year ||(317.62) ||(416.86) |
|Balance candied forward ||(291.21) ||(317.62) |
In view of inadequate profit and in order to meet financial requirement to implementits future plans, your Directors do not propose any dividend for the year under review.
INDUSTRY STRUCTURE AND DEVELOPMENT
The textile industry holds significant status in the India. Textile industry providesone of the most fundamental necessities of the people. It is an independent industry, fromthe basic requirement of raw materials to the final products, with huge value-addition atevery stage of processing.
Today textile sector accounts for nearly 14% of the total industrial output. Indianfabric is in demand with its ethnic, earthly colored and many textures. The textile sectoraccounts about 30% in the total export. This conveys that it holds potential if one isready to innovate.
Textile industry is constituted of the Readymade Garments, Cotton Textiles includingHandlooms (Mill made/ Power loom/Handloom), Man-made Textiles, Silk Textiles, WoollenTextiles etc.
At present, the textile industry is undergoing a substantial re-orientation towardsother then clothing segments of textile sector, which is commonly called as technicaltextiles. It is moving vertically with an average growing rate of nearly two times oftextiles for clothing applications and now account for more than half of the total textileoutput. The processes in making technical textiles require costly machinery and skilledworkers.
OPPORTUNITIES & THREATS
It is anticipated that India's textile industry is likely to do much better. Since theconsumption of domestic fabric is low, the growth in domestic consumption in tandem isanticipated with GDP of 6 to 8 % and this would support the growth of the local textilemarket at about 6 to 7 % a year.
India can also grab opportunities in the export market. The industry has the potentialof attaining $34bn export earnings by the year 2010. The regulatory polices is helping outto enhance infrastructures of apparel parks, Specialized textile parks, EPZs and EOUs.
The Government support has ensured fast consumption of clothing as well as of fabric. Asingle rate will now be prevalent throughout the country.
The Indian manufacturers and suppliers are improving design skills, which Includedifferent fabrics according to different markets. Indian fashion industry and fashiondesigners are marking their name at International platfom. Indian silk industry that isknown for its fine and exclusive brocades, is also adding massive strength to the textileindustry.
Forecast till 2010 for textiles by the government along with the industry and ExportPromotion Councils is to attain double the GDP, and the export is likely attain $85bn. TheIndustry is anticipated to generate 12mn new jobs in various sectors.
A major loop-hole In Indian textile Industry is its huge fragmentation In industrystructure, which is led by small scale companies. Despite the government policies, whichmade this deformation, have been gradually removed now, but their impact will be seen forsome time more. Since most of the companies are small in size, the examples of industryleadership are very few, which can be inspirational model for the rest of the industry.
The uneven supply base also leads barriers In attaining integration between the linksin supply chain. This issue creates uncontrollable, unreliable and inconsistentperformance.
Political and Government Diversity:
The reservation of production for very small companies that was imposed with anintention to help out small scale companies across the country, led substantialfragmentation that distorted the competitiveness of industry. However, most of the sectorsnow have been de-reserved, and major entrepreneurs and corporate are putting-in hugeamount of money in establishing big facilities or in expansion of their existing plants.
Despite some motivating step taken by the government, other problems still sustainslike various taxes and excise Imbalances due to diversification into 35 states and UnionTerriitories. However, an outline of VAT is being implemented in place of all other taxdiversifications, which will clear these imbalances once it is imposed fully.
In India, labour laws are still found to be relatively unfavorable to the trades, withcompanies having not more than ideal model to follow a 'hire and fire' policy Even thecompanies have often broken their business down into small units to avoid any troublecreated by labour unionization.
In past few years, there has been movement gradually towards reforming labour laws, andit is anticipated that this movement will uphold the environment more favorable.
Distant Geographic Location:
There are some high-level disadvantages for India due to its geographic location. Forthe foreign companies, it has a global logistics disadvantage due the shipping cost ishigher and also takes much more time comparing to some other manufacturing countries likeMexico, Turkey China etc. The inbound freight traffic has been also low, which affectscost of shipping - though, movement of containers are not at reasonable costs.
PERFORMANCE & CURRENT YEAR PROSPECTS
The Company is one of the manufacturers of Synthetic Fabric. Although the situation hasimproved in comparison to previous financial year, but is not up to the level of industryexpectation. There was a little increase in demand of textile products but was limited dueto higher inflation rate and significant drop in the per capita income of common man. Dropin the income of common man has affected the business of entire textile industry and thesame was for the Company also. Due to the lack of consistence demand, the turnover ofCompany has not increased to the level the Company expected and thus the profit of Companyis also below expectation.
The Global situation is improving and demand is increasing slowly and the same aboutIndian textile market. Increased demand of manpower is showing some sign of improvementand looking to that the Company is hopeful to do better, both in term of turnover andprofit in current financial year 2010-11.
Your Company offers its services to customers through industry practices in Textile, byway of manufacturing Synthetic Fabric, a part of textiles products.
RISK & CONCERNS
New innovations in clothing production, manufacture and design came during theIndustrial Revolution - these new wheels, looms, and spinning processes changed clothingmanufacture forever.
There were various stages - from a historical perspective - where the textile industryevolved from being a domestic small-scale industry, to the status of supremacy itcurrently holds. The 'cottage stage' was the first stage in its history where textileswere produced on a domestic basis.
During this period cloth was made from materials including wool, flax and cotton. Thematerial depended on the area where the cloth was being produced, and the time they were beingmade.
During this era, excess cloth was bought by the merchants who visited various areas toprocure these left-over pieces. A variety of processes and innovations were implementedfor the purpose of making clothing during this time. These processes were dependent on thematerial being used, but there were three basic steps commonly employed in makingclothing. These steps included preparing material fibers for the purpose of spinning,knitting and weaving.
Today, modern techniques, electronics and innovation have led to a competitive,low-priced textile industry offering almost any type of cloth or design a person coulddesire. With its low cost labour base, China has come to dominate the global textileindustry.
All above are indications of big Risks and Concerns for the Company and change in thetechnology and trend can affect the demand and thus can affect the business of Company.Although the Company is taking care of above factors but this cannot guarantee the brightfuture of Company.
The Company is planning to counter its challenges through focused marketing, tightcontrol on liquidity and margins, cost effective sourcing of products and services andimproved quality of products through process automation. The Company has also showing itspresence in the arena of Textile market.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
TUNI has developed adequate Internal Control Systems in place to ensure a smoothfunctioning of its business.
The Control System provides a reasonable assurance of recording the transactions of itsoperations in all material aspects and of providing protection against misuse or loss ofCompany's assets.
The ICS and their adequacy are frequently reviewed and improved and are documented.
MATERIAL DEVELOPMENT IN HUMAN RESOURCES
TUNI's biggest assets are their employees. We are continuously working on innovativeinitiatives to attract, train, retain and motivate our employees. Our endeavors are drivenby a strong set of values imbibed in us and policies that we abide by. Our constant goal,and indeed our biggest strength, is a healthy, happy and prosperous work environment forall our employees. Currently staff strength of the Company is 6 Employees including senior& junior category staff and workers.
During the year under review, your Company has not accepted any deposits from thepublic within the meaning of section 58A of the Companies Act 1956 and the rules thereunder
There is no change in the composition of Board during the year under review.
In accordance with the requirements of the Companies Act, 1956 and as per theprovisions of Articles of Association of the Company, Mr. Pradeep Kr Sureka & Mr.Ashish P. Bajaj, who retires by rotation, are eligible for reappointments.
None other Directors are interested in re-appointments of Mr. Pradeep Kr Sureka &Mr Ashish P. Bajaj.
Further, non of the Directors of the Company are disqualified under section 274(1)(g)of the Companies Act 1956.
Your Company follows the principles of the effective corporate governance practices.The Clause 49 of Listing Agreement deals with the Corporate Governance requirements whichevery publicly listed Company has taken steps to comply with the requirements of therevised Clause 49 of the Listing Agreement with the Stock Exchange.
A separate section on Corporate Governance forming part of the Directors' Report andthe certificate from the Company's Auditors on Corporate Governance as stipulated inClause 49 of the Listing Agreement is included in the Annual Report.
The Company takes pride in the commitment, competence and dedication shown by itsemployees in all areas of business. Various HR initiatives are taken to align the HRpolicies to the growing requirements of the business.
The Company has a structured induction process and management development programmes toupgrade skills of managers. Objective appraisal systems are in place for senior managementsystem.
The Auditors M/s R. S. Agrawal & Associates, Chartered Accountants, Kolkata holdthe office until the conclusion of ensuing Annual General Meeting. Your Company hasreceived certificate from the Auditors U/S 224(1 B) of the Companies Act, 1956 to theeffect that their reappointment if made, will be within the limit prescribed.
The shareholders are requested to appoint the Auditors and fix their remuneration.
COMMENTS ON AUDITOR'S REPORT:
The notes referred to in the Auditor's Report are self explanatory and as such they donot call for any further explanation as required under section 217(3) of the CompaniesAct, 1956.
PARTICULARS OF EMPLOYEES
People are the backbone of our operations. It is a matter of great satisfaction for ourCompany that our employees have been very supportive of the Company's plan. By far theemployee's relations have been cordial through out the year.
The information as required by provisions of section 217(2A) of the Companies Act, 1956read with the companies (Particular of employees) amendments rules, 1988 is reported to beNIL.
PARTICULARS UNDER SECTION 217(1) (E) OF THE COMPANIES ACT, 1956
The Company is engaged In the business of manufacturing Synthetic Fabric. TheInformation regarding conservation of energy. Technology Absorption, Adoption andinnovation, the information required under section 217(1)(e) of the Companies Act, 1956read with the Companies (Disclosure of particulars in the Report of Board of Directors)Rules 1988, is reported to be as under:
|MURBAD UNIT- ELECTRICITY ||2009-2010 ||2008-2009 |
|Electricity Purchased [ Units (KWH)] ||945972 ||828576 |
|Total Amount (Rs.) ||2714510 ||2359395 |
|Average Rate (Rs.) ||2.87 ||2.85 |
|Consumption Per Unit of Production || || |
|Cloth production (Mtrs.) ||2169413 ||1122976 |
|Cost of Electricity Consumption Mtrs. (Rs.) ||1.25 ||2.10 |
The Company has not earned or used foreign exchange earnings/outgoings during the yearunder review.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000 the Directorsconfirm that:
1. In the preparation of the annuals accounts, for the year ended 31st March 2010, allthe applicable accounting standards prescribed by the Institute of Chartered Accountantsof India have been followed;
2. The Directors had adopted such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period.
3. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
4. The Directors had prepared the annual accounts on a going concern basis.
REPORT ON CORPORATE GOVERNANCE
The Company is committed to good Corporate Governance. The Company respects the rightsof its Shareholders to inform on the performance of the Company and its endeavor tomaximize the long-term value to the Shareholders of the Company. As per Clause 49 of thelisting Agreement of the Stock Exchange, a report on Corporate Governance is set outseparately, which forms part of this report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Corporate Social Responsibility (CSR) us commitment of the Company to improve thequality of the workforce and their families and also the community and society at large.The Company believes in undertaking business in such a way that if leads to overalldevelopment of all stake holders and Society.
The Board of Directors wishes to convey their appreciation to all the Company'semployees for their performance and continued support. The Directors would also like tothank all the Shareholders, Consultants, Customers, Vendors, Bankers, Service Providers,and Governmental and Statutory Authorities for their continued support.
|Mumbai, 18th August 2010 ||By order of the Board |
| ||For TUNI TEXTILE MILLS LIMITED |
|Registered Office: || |
|63/71, Dadiseth Agiary Lane ||Narendra Kumar Sureka |
|3rd Floor, Kalbadevi Road, Mumbai-400002 ||Chairman |