samrat spinners ltd Directors report

SAMRAT SPINNERS LIMITED ANNUAL REPORT 2000-2001 DIRECTORS REPORT Your Directors have the pleasure to present their NINETEENTH ANNUAL REPORT of your company for the period ended March 31, 2001. The Directors are pleased to report that during the year under review, the spinning operations of the Company has significantly improved and earned cash profit of Rs.120.12 lakhs as against cash profit of Rs.61.74 lakhs earned during 1999-2000. The company earned an income of about Rs.180 lakhs towards sale of teak plants during current year. Company has concentrated on export market by producing finer counts of yarn, which have contributed to the profitability of the company. Textile industry is still reeling under recession. In order to counter the recessionary trend and to face the competition, company has to upgrade the facilities by suitable modernisation. Companys application for financial assistance to modernise its plant is pending with IDBI. In order to conserve the resources, no dividend is proposed for the year under review. Andhra Bank has filed a case in Debts Recovery Tribunal, Hyderabad to recover outstanding working capital facilities, due to change in companys management. The present management is making its efforts to impress upon Andhra Bank to review their stand. FUTURE OUTLOOK The company is contemplating to modernise the unit during the current financial year, with the support to be received from IDBI. Once the unit is modernised, company could produce international quality standard yarn and could secure orders from high-end buyers. The contribution for the yarn produced after modernisation will be substantial and it will definitely improve the bottom line of the company. DIRECTORS Shri A Subramanyam resigned as a Director due to his pre-occupation. Board would like to place on record their appreciation for the excellent support by Shri A Subramanyam during his tenure as a Director of the Company. Shri Y Venkat Rao & Shri K S Raju are retiring by rotation at the Nineteenth Annual General Meeting in accordance with the Article 48 of Memorandum & Articles of Association of the company and being eligible offers themselves for reappointment. Shri C Niranjan and Shri Narinder Anand were appointed as Additional Directors in the Board Meetings held on 28/10/2000 and 14/6/2001 respectively will be retiring at the ensuing Annual General Meeting. Necessary resolutions are placed before the Annual General Meeting for their appointment as Directors of the Company. EXPORT ORIENTED UNIT The spinning unit of the company has been converted into 100% EOU w.e.f. 30/3/2000 in terms of sanction received form VEPZ. As per the sanctioned terms, the unit has to export entire production. However as per the current Exim policy, the unit can sell upto 50% of FOB value of the export in Domestic Tariff Area. Company has obtained advance DTA sale permission from VEPZ and effected local sales. As on 31/3/2001 the company has sold excess quantity in DTA amounting to Rs.316 lakhs than its entitlement mainly due to delay in modernisation / upgradation of the manufacturing facilities. However as per the agreement entered with VEPZ, company has to fulfil the obligations of export over a period of 5 years ending 31/3/2005. Your company is hopeful to export the required quantities in the ensuing period to fulfil its export obligations. CONSTITUTION OF AUDIT SUB COMMITTEE To comply with recent amendments to the Companies Act 1956, the Board of Directors in their meeting held on 27/1/01 have constituted an Audit Sub- Committee with the following Directors as its members :- 1) Dr A G Prasad 2) Shri K S Raju and 3) Shri C Niranjan AUDITORS M/s.C K S Associates, the auditors of the company retire at the conclusion of the Nineteenth Annual General Meeting and are eligible for re- appointment. INDUSTRIAL RELATIONS The industrial relations continued to be cordial during the year under review. DISCLOSURE Disclosures in terms of Companies (Disclosure of particulars in the report of the Board of Directors) Rules 1988 in respect of Conservation of Energy, Technology absorption, Earnings and Outgo of Foreign Exchange are attached and form part of this report. There are no employees who are drawing a salary of Rs.1 lakh per month / Rs.12 lakhs per annum to be declared U/S.217(2A) of the Companies Act 1956. Directors Responsibility statement u/s 217 (2AA) is as follows: i) That in the preparation of Annual accounts, the applicable accounting standards have been followed. ii) That Directors had selected such accounting policies and applied them consistently and made judgements & estimates that are reasonable and prudent so as to give a true & fair view of the state of affairs of the company at the end of the financial year and of the profit or loss of the company for that period. iii) That Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. iv) That the Directors had prepared the "Annual Accounts" on a going concern basis. ACKNOWLEDGEMENT Your Directors gratefully acknowledge for the continued support and guidance received from the Industrial Development Bank of India, Andhra Bank and other Financial Institutions. Your Directors commend the dedication of the employees and thank the shareholders for the confidence they have reposed in the company. For and on behalf of the Board Secunderabad T Devendar Reddy 14th June, 2001 Managing Director ANNEXURE TO DIRECTORS REPORT FOR THE PERIOD ENDED 31ST MARCH, 2001 FORM B RESEARCH & DEVELOPMENT 1. Specified areas in which R & D is carried : Nil out by the Company 2. Benefits derived as a result of the above R & D : Not Applicable 3. Future plan of action : The Company has been constantly striving to improve its technology available and used in the process 4. Expenditure on R & D technology absorption, adaptation and innovation: 1. Efforts, in brief, made towards : No technology has been imported. technology absorption, adaptation and innovation 2. Benefits derived as a result of the above : Not Applicable 3. Imported Technology : Not Applicable PARTICULARS OF FOREIGN EXCHANGE EARNINGS AND OUTGO A. Activities relating to exports, initiatives taken to increase exports; development of new export markets for products and services, export plan: The Company has converted itself into an 100% EOU w.e.f.30/3/2000. The company plans to further upgrade its machinery to meet export quality standards. Exports to Thailand, Italy and Indonesea had already commenced and other European and Asian markets are also being explored.