Raghav Industries Ltd Under Liquidation Directors Report

RAGHAV INDUSTRIES LIMITED ANNUAL REPORT 2010-2011 DIRECTORS REPORT Dear Members, Your Directors have great pleasure in presenting the 23rd Annual Report of your Company together with the Audited Statement of Accounts for the year ended 31st March, 2011. The Financial highlights of the Company for the year are as under: FINANCIAL RESULTS Particulars 31st March 31st March 2011 2010 (Rs.000) (Rs.000) Turnover (Sales & Services) 19,63,530 17,24,343 Less: Total Expenditure 18,46,747 16,24,052 Operating Profit 1,16,783 1,00,291 Less : Interest 61,616 53,201 Profit Before Depreciation & Taxation 55,167 47,090 Less : Depreciation 44,873 38,983 Profit Before Tax 10,294 8,107 Less : Provision for Taxation for Current Year 4,203 2,505 for Earlier Years - 2,492 91 Less : Deferred Tax Liability - 927 1,135 Profit After Taxation 9,510 4,376 Add: Brought Forward Profits 81,385 77,009 Profit Carried to Balance Sheet 90,895 81,385 BUSINESS OPERATIONS & FUTURE OUTLOOK: During the period under review, the company has been able to achieve turnover of Rs. 196.35 crores as compared to Rs. 172.43 crores in FY 2009- 10. Despite increasing competition in the market, Profit After Tax (PAT) of the company has get doubled from last year. The company has suffered the operating loss in trading segment, so your directors have decided to discontinue the same. Now the company will be focusing on its main core business and profitable segment i.e. manufacturing division. Your directors have affirmed opinion that from this year onwards, company will be having increased profitability due to discontinuation of loss generating trading segment, better production levels, and tax exemption in wind mill energy segment. DIVIDEND With a view to further strengthen the working capital resources of the company aiming at long term growth, your directors have proposed to retain in full of profit after tax. Hence no recommendation is made for payment of any dividend for the year under review. DEPOSITS The Company has not accepted any deposits from the general public. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO The particulars regarding Conservation of Energy, Technology Absorption and Foreign Exchange outgo as required by Section 217(1) (e) of Companies Act 1956 are given in the addendum to the report. ENERGY CONSERVATION Strict control was exercised during the year for economizing the use of power. TECHNOLOGY ABSORPTION Since the Company has not taken any steps regarding Research and Development, the particulars to be furnished under technology absorption are nil. The Company has not acquired any specific technologies and hence adoption of the same does not arise. AUDITORS M/s M. Agarwal & Associates, Chartered Accountants, Coimbatore the Statutory Auditors of the Company, retire and are eligible for reappointment. Your directors recommend that they be reappointed as auditors of the company. The company has received a certificate from them as required by the proviso to Sub Section-(1) of section 224 of the Companies Act, 1956, certifying that their appointment, if made, will be within the limits as specified in Section- 224 (1B). PERSONNEL Statement under section 217 (2A) of the Companies Act, 1956 has not been furnished since no employees is getting remuneration of more than Rs.2,00,000/- per month or Rs. 24,00,000/- per annum. AUDIT COMMITTEE An Audit Committee comprising of four members 1) Shri Rajendra Kumar Kanodia, 2) Shri Naresh Kumar Rateria 3) Shri Raghav Kanodia and 4) Shri. N. Nachimuthu. They formed the audit committee and headed by Shri Naresh Kumar Rateria as its Chairman. The terms of reference to the Audit Committee shall be the matters as required under sec 292A of the Companies Act 1956. The Committee acts as a liaison between the statutory auditors and the Board of Directors of the Company. The Committee met four times during the period on 26.06.2010, 02.09.2010, 14.12.2010, and 25.03.2011. INVESTMENT IN SRINIDHI INDUSTRIES LIMITED-EQUITY SHARES The company has to receive of 7330 Equity Shares of Rs. 10/- each fully paid-up of M/s. Srinidhi Industries Limited vide Board for Industrial and Financial Reconstruction (BIFR) Order No. 301/99 dated 17.06.2008 and shares are pending allotment. ACQUISITION OF FIXED ASSETS During the year under review your company has incurred capital expenditure of Rs. 188.91 lacs including machinery worth Rs.124.14 Lakhs which will enhance the production from the existing level and also sold a part of the machinery valuing Rs. 31.64 Lakhs during the year under review. PROVISION FOR GRATUITY None of the employees employed for a continuous service of five years and the provisions of Gratuity Act not applicable to the company for the year under Audit. EXPLANATIONS TO AUDITORS OBSERVATION IN THEIR REPORT a) We draw the attention to clause (iii) of the Annexure to the Auditors Report that the transaction with the companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 are not in the nature of acceptance of or granting any loans, secured or unsecured and they are relating to trading transactions and hence no interest was charged or received. b) We draw the attention to clause (v) of Annexure to the Auditors Report that the company has purchased / sold goods from / to their related parties at prevailing market price, whereas services rendered with related parties are at very competitive market trends. Your Company has obtained the approval for related party transaction from Regional Director, Department of corporate affairs for a period of five years with effect from 01.02.2009 and the particulars of related party transactions are disclosed notes on accounts. c) There is no material qualification in Auditors Report. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 217(2AA) of the Companies Act, 1956 with respect to Directors responsibility statement, it is hereby confirmed. i) Accounting Standards which are applicable to textile industry has been followed properly. There are no material departures. ii) The accounting policies are consistent and judgment & estimates made are reasonable and prudent. It reflects true and fair view of the state of affairs of the Company as at 31.03.2011, the profit & loss account of the company and cash flow statement for the period from 01.4.2010 to 31.03.2011. iii) Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv) The accounts are prepared on a going concern basis. POST BALANCE SHEET EVENTS No other matter or circumstances have arisen since the end of the financial year which significantly affected the operations of the company. ACKNOWLEDGMENT Your Directors would like to express their sincere thanks to the Financial Institutions, Banks, Govt. Authorities, Customers, Vendors, etc. for the assistance, co-operation and valuable support to the Company. Your Directors also wish to place on record their appreciation of the devoted and dedicated service rendered by all employees of your Company. For and on behalf of the Board, Rajendra Kumar Kanodia (Managing Director) Madhu Devi Kanodia Place: Coimbatore (Director) Date : 01.09.2011 ANNEXURE TO THE DIRECTORS REPORT (Additional Information given in terms of Notification No. 1029) of 31.12.1998 issued by the Company affairs). I. Conservation of Energy: a) Energy Conservation Measures taken for conservation include measures taken improved maintenance of operating system controlled on consumption and loss of electricity. b) Additional investments and proposals, if any, being Nil implemented for reduction of consumption of energy. c) Impact of measures at (a) and (b) above for reduction of energy The impact of measures for reduction consumption and consequent of energy consumption on cost of impact on cost of production of goods production is not precisely ascertainable. d) Total energy consumption As per Form A of the Annexure to the and energy consumption Rules is as under: per unit of production A. Power and Fuel Consumption 1. Electricity (Kattipalayam Unit) Current Year Previous Year a) Purchased Unit (KWH) 6526464 5327432 Total Amount (Rupees) 31169083 23677308 Average Rate Per Unit (Rupees) 4.78 4.44 b) Own Generation (Through Diesel Generators) Diesel Consumed (Liters) 434637 240847 Cost of Diesel (Rupees) 15986092 7656951 Units Produced (Kwh) 1490199 839675 Units per Liter of Diesel 3.43 3.49 Cost Per Unit (Rupees) 10.73 9.12 2. Electricity (Komarapalayam Unit) Current Year Previous Year a) Purchased Unit (KWH) 2124168 2294466 Total Amount (Rupees) 9771787 10123040 Average Rate Per Unit (Rupees) 4.60 4.41 b) Own Generation (Through Diesel Generators) Diesel Consumed (Liters) NIL 17854 Cost of Diesel (Rupees) NIL 611099 Units Produced (Kwh) NIL 44065 Units per Liter of Diesel NIL 2.47 Cost Per Unit (Rupees) NIL 13.87 3. Electricity (Ankleshwar Unit) Current Year Previous Year a) Purchased Unit (KWH) NIL NIL Total Amount (Rupees) NIL NIL Average Rate Per Unit (Rupees) NIL NIL b) Own Generation (Through Diesel & LDO Generators) Gas & LDO Consumed (Liters & Sq.Cm) 2377977 3046726 Cost of Gas & LDO (Rupees) 40351387 50873854 Units Produced (Kwh) 8843584 10869990 Units per Liter of Gas & Sq.Cm of LDO 3.72 3.57 Cost Per Unit (Rupees) 4.56 4.68 Cost Per Unit (Rupees) 4. Coal : NIL (Previous Year - NIL) 5. Furnace Oil : NIL (Previous Year - NIL) 6. Others : NIL (Previous Year - NIL) B. Consumption per unit of Production: Item Standards (if any) Current Year Previous Year Electricity N.A. 2.96 Kwh 3.35 Kwh Furnace oil N.A. N.A. N.A. Coal N.A. N.A. N.A. Others N.A. N.A. N.A. II. Technology Absorption: [Particulars as per Form B are as below] A. Research and Development (R & D): 1. Specific Areas in Process in development and optimization which R and D carried with a view to increase productivity out by the Company: improve efficiency and product quality, achieve cost reduction, etc. Development of new products and find new applications existing product. 2. Benefits derived as a result of above R and D. Increase in productivity and better consistent product quality. 3. Future Plan of Action Increased efforts for development of new quality of yarns to meet changing requirements of customers. 4. Expenditure of R and D Common equipment are used for operation as well as R & D activities. Hence no separate accounts are maintained. B. Technology absorption, adaptation and Innovation: 1. Efforts, in brief, made towards Modification of process, technology absorption, adoption and equipment and products are innovation carried out to suit changes in market requirements and to improve operational efficiency. 2. Benefits derived as a result of above efforts, e.g. product improvement, Increase in production, cost reduction, product development, development of new products and import substitution, etc. application and cost reduction. 3. In case of imported technology No imported technology involved. III. Foreign Exchange Earning and outgo. Current Year Previous Year a) Total Foreign Exchange Earned: USD 5,17,323 (Export Realisation) USD 16,56,424 (Export Realisation) b) Total Foreign Exchange Outgo: $ 2625 (Commission on Export Sales) $ 106140.30 (Commission on Export Sales) 330000 (Import of Machinery) For and on behalf of the Board, Rajendra Kumar Kanodia (Managing Director) Madhu Devi Kanodia Place: Coimbatore (Director) Date : 01.09.2011.