Arvind Products Ltd merged Share Price directors Report
ARVIND PRODUCTS LIMITED
ANNUAL REPORT 2010-2011
DIRECTORS REPORT
To
The Members,
Your Directors are pleased to present the Annual Report alongwith the
Audited Financial Statements for the period from 1st April, 2010 to 31st
March, 2011.
1. FINANCIAL PERFORMANCE:
The highlights of the financial results are:
Rs. in lacs
Particulars 2010-2011 2009-2010
Turnover and other income 62060.51 47651.03
Profit before depreciation, interest
and taxation 5275.13 5141.54
Less: Interest & Finance Cost (Net) 2121.61 2322.24
Less: Depreciation 3113.19 3623.07
Profit / (Loss) before tax 40.33 (803.77)
Deferred Tax - (1210.49)
Profit / (Loss) for the year 40.33 406.72
Balance as per last years Balance Sheet (6320.59) (6727.31)
Balance carried to Balance Sheet (6280.26) (6320.59)
2. OPERATIONS:
A detailed discussion is carried out in the relevant section in Management
Discussion and Analysis appended elsewhere in the Annual Report.
3. DIVIDENDS:
Your Directors do not recommend dividend on Preference Shares or Equity
Shares for the period under review, considering carried forward losses of
the Company.
4. DIRECTORS:
Mr. Vinod D. Modha and Mr. K. I. Patel, the Directors of the Company retire
by rotation at the ensuing Annual General Meeting and they, being eligible,
offer themselves for reappointment.
5. CORPORATE GOVERNANCE:
Your Company is committed to the tenets of good Corporate Governance and
has taken adequate steps to ensure that the requirements of Corporate
Governance as laid down in Clause 49 of the Listing Agreement are complied
with.
A separate report on Corporate Governance and a Management Discussion and
Analysis Report are being published as a part of the Annual Report of the
Company.
The Auditors of the Company have certified that conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement are
complied by the Company and their Certificate is annexed to the Report on
Corporate Governance.
6. RESPONSIBILITY STATEMENT:
The Directors confirm that:
1. In the preparation of the annual accounts, the applicable accounting
standards have been followed. There are no material departures from the
applicable accounting standards.
2. Such accounting policies have been selected and applied consistently and
such judgments and estimates have been made as are reasonable and prudent
so as to give a true and fair view of the state of affairs of the Company
at the end of the financial year and profit of the Company for the year.
3. Proper and sufficient care have been taken for the maintenance of
adequate 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 and other irregularities; and
4. The attached statements of accounts for the period ended on 31st March,
2011 have been prepared on a going concern basis.
7. INFORMATION REGARDING CONSERVATION OF ENERGY ETC. AND EMPLOYEES:
Information required under Section 217(1)(e) of the Companies Act, 1956
read with Rule 2 of the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988 and under Section 217(2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees) Rules,
1975, as amended from time to time, form part of this report. However, as
per the provisions of Section 219(1)(b)(iv), the report and accounts are
being sent to all shareholders of the Company excluding the information
relating to conservation of energy, technology absorption and foreign
exchange earning and outgo and the statement of particulars of employees.
Any shareholder interested in obtaining such particulars may inspect the
same at the Registered Office of the Company or write to the Secretary for
a copy.
8. AUDITORS:
The Auditors, Sorab S. Engineer & Co., Chartered Accountants, retire and
offer themselves for reappointment. It is proposed that Sorab S. Engineer &
Co., Chartered Accountants, be reappointed as Auditors of the Company. You
are requested to appoint the Auditors and fix their remuneration.
The specific notes forming part of the Accounts referred to in the
Auditors Report are self-explanatory and give complete information.
9. ACKNOWLEDGMENT:
Your Directors would like to appreciate the efforts of the Companys
employees for their continued co-operation and unstinted support extended
to the Company. The support of all lenders including Financial
Institutions, Commercial Banks, Overseas Banks, Vendors and buyers has also
been invaluable and your Directors take this opportunity to appreciate it
deeply.
By Order of the Board
Place: Ahmedabad ANANG A. LALBHAI
Date : 14.05.2011 Chairman and Managing Director
MANAGEMENT DISCUSSION AND ANALYSIS
DISCLAIMER:
Readers are cautioned that this discussion and analysis contains forward-
looking statements that involve risks and uncertainties. When used in this
discussion, the words anticipate, believe, estimate, intend,
will, and expected and other similar expressions as they relate to the
Company or its business are intended to identify such forward-looking
statements. The Company undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events, or otherwise. Actual results, performances or
achievements and risks and opportunities could differ materially from those
expressed or implied in such forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements
that speak only as of their date. The following discussion and analysis
should be read in conjunction with the Companys financial statements
included herein and the notes thereto.
OVERVIEW:
The Company is a subsidiary Company of Arvind Limited, which is the largest
cotton textiles manufacturer and exporter in India and a leading player in
the branded garments in the domestic markets through its subsidiaries. Your
Companys principal businesses consist of manufacturing and marketing of
voiles fabric, bottom weights fabric and yarn. The yarn manufactured is
mainly consumed by the parent Company, Arvind Limited.
During the current financial year ended 31st March, 2011, the Company has
reported net profit of Rs. 40.33 lacs as compared to net profit of Rs.
406.72 lacs in the previous financial year ended 31st March, 2010.
FINANCIAL PERFORMANCE AND REVIEW The summarized Profit and Loss Account is
given in following table:
Rs. in lacs
Sales & Operating Income 61993.92
Other income 66.59
TOTAL INCOME 62060.51
Raw Material 31295.32
Finished Goods 1730.38
Employees Emoluments 5069.25
Power & Fuel 7795.42
Stores Consumed 4743.69
Others 8257.11
(Increase) in stock (2105.79)
TOTAL EXPENSES 56785.38
PBIDT 5275.13
Interest & Finance Charges (Net) 2121.61
PBDT 3153.52
Depreciation 3113.19
Net Profit for the year 40.33
Sales and Operating Income for the year ended 31st March, 2011 are
Rs.61993.92 lacs (Previous year Rs. 47466.08 lacs). Operating Profit
(EBIDTA) for the year is Rs. 5275.13 lacs (Previous year Rs. 5141.54
lacs). The Companys Net Profit for the year is Rs. 40.33 lacs (Previous
year Net Profit Rs. 406.72 lacs). Interest & Finance Charges are
Rs.2121.61 lacs (Previous year Rs. 2322.24 lacs) and Depreciation is
Rs.3113.19 lacs (Previous year Rs. 3623.07 lacs). The Company has made
Cash Profit of Rs. 3153.52 lacs for the year (Previous year Rs. 2819.30
lacs).
INDUSTRY:
Product Group - Voiles:
The Voiles Division of the Company is engaged in manufacturing high quality
Cotton and blended Voiles (an end product for Indian Blouse) for the
domestic and International market. A niche product, made from 2 Ply High
twisted fine yarns gives the fabric a characteristic crispy feel. In the
Middle East Countries fine Cotton Voiles are used for Guthras (head gears
for Men) and Thobes (similar to Indian Sarees for Women). Other prominent
products include Cotton and Blended shirting, Trousering material, Long
Cloth, Sarees, dress material and a wide range of Lawns, structured fabric
etc.
The Company enjoys a unique position in the 2x2 rubia segment, a market
estimated to be around 25 Million Metres per annum. The Company continues
its leadership in terms of quality and quantity, with a major 40% of Market
share within its fold. The Companys chief strength is its amazingly rich
and fancy color palette. In a business where shades reign supreme, the
Voiles Division boasts of its incredibly large shade collection - offering
perfect blends for diverse tastes, each bearing the same stamp of quality
and excellence. The ability to supply a huge range of colors in a variety
of high quality products with rigid adherence to delivery deadline has been
the key to Companys sustained growth and performance over past few years.
The Company has an impressive countrywide distribution Network comprising
of about 150 dealers, to whom goods are directly supplied. The dealers
subsequently supply the goods to the retailers. The Company has appointed
Agents who take the indenting and Del Credre responsibility. Such a
distribution network results into an unprecedented reach and deeper
penetration into hitherto unexplored markets.
With the capacity expansion in the Processing Department, the Company has
made headway into the Polyester, Viscose, Dress material segment, Cotton
and Blended Shirting fabrics to reap in higher turnovers and Market
presence in the coming years.
Product Group - Bottomweights:
Performance of Bottom weight fabric division had been satisfactory in the
current year. Capacity utilization increase and volume went up from 16.8
million meters in previous year to 18.9 million meters in the current year.
Margin continues to remain under pressure with cotton prices reaching at
the highest level and realization not increased proportionately due to
subdued demand in the developed countries. However domestic demand remains
buoyant and going forward would help the Company to improve the margins.
The Company has improved the presence in light weight market segment where
the cotton dependency in lower. The Company has been able to successfully
execute fire retardant fabric orders where the margins are comparatively
higher. The Company is also planning to set non-cotton suiting product
which would be of great advantage as the Company already has very well set
and vast retail distribution network. The Company is also aiming at
improving the presence womens wear category for which trials and product
development initiatives has shown very encouraging results.
Going forward Company is targeting improvement in margin on back of new
initiatives, expected buoyant domestic market.
INTERNAL CONTROL SYSTEMS:
The Company has well defined and institutionalized business processes with
effective control systems to ensure that assets and interests of the
Company are safeguarded.
The Company has a dedicated task force working on budgetary controls,
responsible for preparation of the budget, which is reviewed along with the
performance on monthly basis and corrective actions, wherever needed to
ensure compliance. Considering the size and nature of operations of the
Company, the overall control systems are adequate to meet the need and the
purpose. The Company has its own internal audit team comprising of
qualified professionals and has also hired services of outsourced
professional audit firm to monitor and check the efficiency of the system
and compliances.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The Company always values its human resources and believes in unlimited
potential of each employee and regularly reviews its policies and
procedures, necessitated by the fast changing macro economic factors to
make the organization high performing and successful. Industrial relations
have continued to remain cordial in all the plants of the, Company without
any disruptions of manufacturing activities.