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Directors Report of Arex Industries Ltd.

Mar 31, 2015



Dear Members,

The Directors are pleased to present their 26th Annual Report together with the Audited Statement of Accounts of the Company for the year ended on 31st March, 2015.

FINANCIAL RESULTS

(Amount in Rupees)

31.03.2015 31.03.2014

Revenue from Operations (Net of Excise 330365500 316942802 Duty)

Profit before Depreciation & Amortisation 78932669 84112162 Expenses and Finance Cost

Less : Finance Cost 7653810 10695341

Depreciation & Amortisation Expenses 31343450 40497611

Profit before Tax 39935409 32919210

Tax Expenses - Current Taxation 16200000 17300000

Deferred Tax (3270000) (6600000)

Add/(Less) : MAT Credit Entitlement (Excess)/Short Provision of tax of 133850 244809 earlier years

Profit for the year 26871559 21974401

Surplus brought forward from previous year 101931974 84125906

Profit available for Appropriation 128803533 106100307

Proposed Dividend 3562830 3562830

Tax on Proposed Dividend 712360 605503

Balance Carried to Balance Sheet 124528343 101931974

OPERATION

During the year under review, the performance of the Company has been satisfactory despite adverse market conditions. However, your Company continued to enjoy market reputation and sustained its growth. The Company's sales was increased by 4.21% over the previous year's sales. The Company also continued to explore overseas market opportunities and received good response. The exports amounted to Rs. 1,30,34,892/- i.e. increase of 30% over the previous year's exports. There was heavy fluctuation in foreign exchange rates with a gain of Rs. 59,600/-. The raw material prices, fuel charges and other overheads continued to increase. However, the Company has sustained its earnings of Rs. 2,68,71,559/i.e. increase of about 22.29% over the previous year's profit.

The Company has undertaken capacity expansion project with modernization, upgradation, installation of high tech machineries and supporting systems for total outlay of about Rs. 12.50 Crores, in view the prospective markets. This project is under implementation and is expected to be completed by September, 2016.

DIVIDEND

Your Directors are pleased to recommend dividend at 9% (i.e. Re.0.90 per share) out of the current profits and balance out of the surplus in the profit and loss Account, subject to approval of the members in their ensuing Annual General Meeting. The final dividend, if declared, will absorb an outflow of Rs.35,62,830/- towards dividend amount and Rs 7,12,360/- towards dividend distribution tax. The requisite provision for dividend has been made in the accounts for the year ended 31st March, 2015.

FINANCE

The Company continued to avail financial assistance to finance its present and expansion on hand.

PUBLIC DEPOSITS

The Company has not accepted any deposit within the meaning of the provisions of Section 2(31) and 73 to 76 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014. There is no deposit outstanding as on the commencement of the said Act.

INSURANCE

All the assets of the Company including buildings, plant and machineries and stocks are adequately insured

DIRECTORATE/KMPs

Shri Dinesh A Bilgi (DIN:00096099) has been appointed as Managing Director cum Chief Financial Officer, Shri Neel D Bilgi (DIN:00096180) and Shri Chirag D Bilgi (DIN:02094970) have been appointed as Managing Directors and Shri Pragnesh K Shah (DIN:00228223) has been appointed as Whole Time Director of the Company.

Shri Vasant R Shah (DIN:00371634) and Shri Pragnesh K Shah (DIN:00228223) are due to retire by rotation as Directors at the ensuing Annual General Meeting and are eligible for re-appointments. They have also offered themselves for re-appointments.

Smt Kairavi Neel Bilgi, Company Secretary of the Company having Membership No. A21519 has resigned with effect from 19th May, 2015.

INDEPENDENT DIRECTORS

As per the provisions of Section 149 of the Companies Act, 2013, the Independent Directors have confirmed and declared that they are not disqualified to act as independent directors and the Board is also of the opinion that the Independent Directors fulfill all the conditions specified in the Companies Act, 2013 making them eligible to act as Independent Directors. One separate meeting of the Independent Directors was held on 23.12.2014.

BOARD EVALUATION

Pursuant to the provisions of Section 134 of the Companies Act, 2013, a structured questionnaire was prepared after taking into account various aspects like- company performance, contribution of individual directors, composition of Board and committees, performance of duties, culture, obligations, risk management etc. for evaluation process. The Board noted that all directors have understood the opportunities and risks to the Company's strategy with good balance between the core values of the Company and the interest of the stakeholders. The Board also evaluated performance of the various committees and concluded with satisfaction. The Board expressed their satisfaction for the above evaluation process.

PARTICULARS OF EMPLOYEES

There was no employee covered under the purview of Section 134(3)(q) of the Companies Act, 2013 read with the Companies (Companies Appointment and Remuneration of Managerial Personnel) Rules, 2014, except Managerial Personnel. Information required under the provisions of Section 197(12) of the Companies Act, 2013 read with the Companies (Companies Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given by way of an Annexure to this Report.

CHANGES IN NATURE OF BUSINESS

There is no change in the nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(3)(c) of the Companies Act, 2013, the Directors hereby state that:

i) in the preparation of annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the 31st March, 2015 and of the profits of the Company for the year ended on that date;

iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the directors have prepared the annual accounts on a going concern basis.

v) the directors had laid down internal controls to be followed and such internal controls are adequate and were operating effectively.

vi) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ORDERS BY REGULATORS, COURTS OR TRIBUNALS

No significant and/or material orders were passed by any Regulator, Court or Tribunal impacting the going concern status and the Company's operations in future.

COMPANY'S POLICIES

Code of Conduct

All Directors, Key Managerial Personnel and Senior Management of the Company have confirmed compliance with the code of conduct applicable to the Directors and employees of the Company. The Directors have confirmed compliance with the provisions of Section 164 of the Companies Act, 2013.

Other Policies

Company's Policy on Remuneration, Whistle Blower, Risk Management, Corporate Social Responsibility (CSR) are finalized in accordance with applicable laws. The Company has voluntarily donated Rs. 1,00,000/- to Hare Krishna Movement, Ahmedabad (Charitable Trust) and Rs. 30,000/ - for miscellaneous charitable activities

BOARD MEETINGS

The details regarding Board Meetings are given in the Report on Corporate Governance forming part of this Report.

INTERNAL FINANCIAL CONTROLS

The Company has a proper and adequate internal control system to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly.

EXTRACT OF ANNUAL RETURN

As required under the provisions of Section 92 (3) of the Companies Act, 2013, an extract of Annual Return in Form MGT-9 is given by way of an Annexure forming part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

The Company has been taking steps for optimum utilisation of power and fuel. The information as required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is given by way of Annexure forming part of this Report.

MANAGEMENT DISCUSSION ANALYSIS AND CORPORATE GOVERNANCE

The Company focuses on good Corporate Governance. The Company has implemented a combination of mandatory & voluntary conditions of Clause 49 of the Listing Agreement of the BSE Ltd, Mumbai pertaining to Corporate Governance. A detailed note on Corporate Governance and Auditor's Certificate confirming compliance of the Corporate Governance requirements by the Company are given by way of an annexure forming part of this Report.

RELATED PARTY TRANSACTIONS

All the transactions entered with related party during the year under review were on arm's length basis and in the ordinary course of business. Hence these transactions were outside the purview of the provisions of Section 188 of the Companies Act, 2013. However, details of such transactions i.e. purchases, lease, services, etc. are given in the Notes to the Financial Statements for the year ended on 31st March, 2015.

LOANS, GUARANTEES AND INVESTMENT

The Company has not granted any inter-corporate loan, given guarantee or provided any security for availing loan by other Company. However, the Company has made investments in other Companies aggregating to Rs. 2,60,600/- as per the Note No.10 to the Financial Statement for the year ended on 31st March, 2015.

ENVIRONMENT AND SAFETY

The Company is conscious of importance of clean and safe mode of operations. Further, as required under the provisions of Sexual Harassment (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at workplace. There is no such complaint lodged during the year.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, a Secretarial Audit Report is given by way of an annexure forming part of this Report.

AUDITORS

M/s C R Sharedalal & Co., Chartered Accountants, Ahmedabad retires as the Statutory Auditors at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment and have indicated their willingness to act as Auditors, if appointed. The Company has obtained written consent and certificate as required under the provisions of Section 139 of the Companies Act, 2013. You are requested to consider their re-appointment.

The Auditors observations read with the notes to the Accounts are self-explanatory.

ACKNOWLEDGEMENTS

The Board of Directors of the Company appreciates the continuous & comprehensive support and cooperation by the Company's bankers, shareholders, customers, suppliers and other business associates.

Your Directors place on record their deep appreciation for contribution and devoted services of the employees at all levels.

Regd Office: For and on behalf of the Board

612, GIDC Estate Chahtral, Tal : Kalol Dinesh A Bilgi Dist : Gandhinagar-382 729 Mg Director/CFO Date : 10th August, 2015 DIN:00096099


Mar 31, 2014

The Members,

The Directors are pleased to present their 25th Annual Report together with the Audited Statement of Accounts of the Company for the year ended on 31st March, 2014.

FINANCIAL RESULTS

(Amount in Rs.)

31.03.2014 31.03.2013

Revenue from Operations (Net of Excise Duty) 316942802 259828294

Profit before Depreciation & Amortisation Expenses and Finance Cost 84112162 68503317

Less: Finance Cost 10695341 13764811

Depreciation & Amortisation Expenses 40497611 44360679

Profit before Tax 32919210 10377827

Tax Expenses- Current Taxation 17300000 11100000

Deferred Tax (6600000) (7590000)

Add/(Less): MAT Credit Entitlement - -

(Excess)/Short Provision of tax of earlier years 244809 (272203)

Profit for the year 21974401 7140030

Surplus brought forward from previous year 84125906 81126686

Profit available for Appropriation 106100307 88266716

Proposed Dividend 3562830 3562830

Tax on Proposed Dividend 605503 577980

Balance Carried to Balance Sheet 101931974 84125906

OPERATION

During the year under review, the performance of the Company has continued to be excellent despite adverse market conditions and your Company reported a top line growth of about 22% over the previous year''s sales. The Company also continued to explore overseas market opportunities and received good response. The exports amounted to Rs. 1,00,23,387/- as against Rs. 80,83,993/- for the previous year''s exports. There was heavy fluctuation in foreign exchange rates and the loss amounted to Rs. 22,15,296/-. The raw material prices, fuel charges and other overheads were also increased. However, the Company has earned profit of Rs. 8,41,12,162/- as against Rs. 6,85,03,317/- i.e. increase of about 23% over the previous year''s profit worked out before providing depreciation and finance cost.

During the year, the Company has successfully installed two sets of MEI International heavy duty shuttleless airjet weaving machines (loom) with total outlay of Rs. 2,86,43,303/- for better productivity and production. The Board of Directors is hereby pleased to state that their working is found satisfactory.

DIVIDEND

Your Directors are pleased to recommend dividend at 9% (i.e. Re.0.90 per share) out of the current profits and balance out of the surplus in the profit and loss Account, subject to approval of the members in their ensuing Annual General Meeting. The final dividend, if declared, will absorb an outflow of Rs. 35,62,830/- towards dividend amount and Rs. 6,05,503/- towards dividend distribution tax. The requisite provision for dividend has been made in the accounts for the year ended 31st March, 2014.

FINANCE

The Company continued to avail financial assistance for its activities from the State Bank of India.

PARTICULARS OF EMPLOYEES

There was no employee covered under the purview of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. Hence, particulars are not given.

INSURANCE

All the assets of the Company including buildings, plant and machineries and stocks are adequately insured.

DIRECTORATE/KMPs

Shri Neel Dinesh Bilgi (DIN:00096180) and Shri Laxman Chetandas Tilani (DIN:00532516) are due to retire by rotation as Directors at the ensuing Annual General Meeting and are eligible for re-appointments. They have also offered themselves for re-appointments.

Independent Director/Woman Director:

Smt Harsha Hemantkumar Parikh (DIN:06931405) is appointed as an Additional Director with effect from 1st August, 2014 for appointment as Woman Director and Independent Director of the Company with effect from 12th September, 2014. In terms of Section 161 of the Companies Act, 2013, she holds office only upto the date of the ensuing Annual General Meeting. The Company received requisite notice in writing from a member proposing her name for the office of Director. Shri Dinesh Harishchandra Pande (DIN:03147549) and Shri Balkrishna Ishwarlal Makwana (DIN:00287931) were also proposed to be appointed as Independent Directors for five years with effect from 12th September, 2014 in accordance with the provisions of the Companies Act, 2013. The Board hereby confirmed the criteria and conditions laid down under the provision of Section 149 of the Companies Act, 2013 for appointment of the above directors as Independent Directors. The necessary resolutions are proposed for your approval at the ensuing annual general meeting.

Working Directors:

In terms of the provisions of Section 203 and other applicable provisions, if any of the Companies Act, 2013 and the Rules made thereunder, Shri Dinesh Apparao Bilgi (DIN:00096099) opted to re-designate himself as Managing Director cum Chief Financial Officer. The Board of Directors considered his request and appointed him as a Managing Director for a period of three years with revised terms with effect from 1st August, 2014. The Board of Directors also considered the valuable contribution given by Shri Neel Dinesh Bilgi (DIN:00096180) and Shri Chirg Dinesh Bilgi (DIN:02094970) and upon recommendation of the Nomination and Remuneration Committee, promoted them as Managing Directors for a period of three years with revised terms with effect from 1st August, 2014. The necessary resolutions are proposed for your approval at the ensuing annual general meeting.

The tenure of Shri Pragnesh Kantilal Shah (DIN:00228223) as Executive Director expires on 31st October, 2014 and the Board of Directors considered his re-appointment for a further period of three years with effect from 1st November, 2014. The necessary resolutions are proposed for your approval at the ensuing annual general meeting.

Smt Kairavi Neel Bilgi, a qualified Company Secretary having Membership No. ACS21519 has been appointed as Company Secretary & Compliance Officer of the Company with effect from 30th July, 2014. She is wife of Shri Neel Dinesh Bilgi (DIN:00096180)

COMPLIANCE CERTIFICATE

As required under the provisions of Section 383A of the Companies Act, 1956 and the rules made thereunder, a certificate for the year ended on 31st March, 2014 is attached herewith and the same forms part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

i) in the preparation of annual accounts for the financial year ended March 31, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that 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 as at 31st March, 2014 and the profits of the Company for the year under review;

iii) the directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the directors have prepared the accounts for the financial year ended 31st March, 2014 on a "going concern" basis.

PUBLIC DEPOSITS

During the year, the Company has not invited nor accepted any deposit within the meaning of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposit) Rules, 1975 during the year ended on 31st March, 2014.

The Company has not accepted any deposit within the meaning of the provisions of Section 2(31) of the Companies Act, 2013 and read with the Companies (Acceptance of Deposits) Rules, 2014. There is no deposit outstanding as on the commencement of the said Act.

AUDITORS

M/s C R Sharedalal & Co., Chartered Accountants, Ahmedabad retires as the Statutory Auditors at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment and have indicated their willingness to act as Auditors, if appointed. The Company has obtained written consent and certificate as required under the provisions of Section 139 of the Companies Act, 2013. You are requested to consider their re-appointment.

The Auditors observations read with the notes to the Accounts are self-explanatory.

Cost Audit

As required under the provisions of Section 233B of the Companies Act, 1956 and notification and circulars issued thereunder, the Company has been carrying out an audit of cost records relating to the products of the Company. The Company has appointed Mr Manish B Analkat, Practising Cost Accountant, Ahmedabad to conduct Cost Audit for the year ended on 31st March, 2015, in respect of the products, wherever applicable. The necessary resolution is proposed for your approval at the ensuing annual general meeting for payment of remuneration to the said Cost Auditors.

The Cost Audit Report for the financial year 2012-13 was filed by the said Auditors with the Ministry of Corporate Affairs on 14.09.2013.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

The Company has been taking steps for optimum utilisation of power and fuel. The information as required under Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given by way of Annexure- "A" forming part of this Report.

CORPORATE GOVERNANCE

The Company focuses on good Corporate Governance. The Company has implemented a combination of mandatory & voluntary conditions of Clause 49 of the Listing Agreement of the BSE Ltd, Mumbai pertaining to Corporate Governance. A detailed note on Corporate Governance and Auditor''s Certificate confirming compliance of the Corporate Governance requirements by the Company are annexed.

ACKNOWLEDGEMENTS

The Board of Directors of the Company appreciates the continuous & comprehensive support and cooperation by the Company''s bankers, shareholders, customers, suppliers and other business associates.

Your Directors place on record their deep appreciation for contribution and devoted services of the employees at all levels.

Regd Office: For and on behalf of the Board

612, GIDC Estate

Chahtral,Tal: Kalol Dinesh A Bilgi

Dist : Gandhinagar-382 729 Mg Director

Date : 30th July, 2014 DIN:00096099


Mar 31, 2012

The Directors are pleased to present their 23rd Annual Report together with the Audited Statement of Accounts of the Company for the year ended on 31st March, 2012.

FINANCIAL RESULTS

(Amount in Rupees)

31.03.2012 31.03.2011

Revenue from Operations (Net of Excise Duty) 21,93,12,663 25,06,11,707

Profit before Depreciation & Amortisation Expenses and

Finance Cost 6,43,60,753 9,59,88,628

Less: Finance Cost 1,57,75,312 1,72,76,147

Depreciation & Amortisation Expenses 4,82,61,169 5,62,48,628

Profit before Tax 3,24,272 2,24,63,853

Provision for Taxation 42,42,689 45,81,595

Provision for Deferred Tax (75,50,000) 21,20,000

Profit after Tax 36,31,583 1,57,62,258

Surplus brought forward from previous year 8,41,47,453 6,99,86,416

Add/(Less): Tax Adjustment (25,11,540) 25,53,359

Profit available for

Appropriation 8,52,67,496 8,83,02,033

Proposed Dividend 35,62,830 35,62,830

Tax on Proposed Dividend 5,77,980 5,91,750

Balance Carried to Balance Sheet 8,11,26,686 8,41,47,453

OPERATION

The year under review was very turbulent affecting the business operations of the Company. The Company's poor performance was due to various constraints, challenging environment and lower economic growth coupled with pressure of hikes in raw materials, fuel charges and other overheads. The global economic environment was also confronted with geo-political instability, Eurozone sovereign debt crisis, fluctuating global commodity prices and heavy fluctuations in foreign exchange rates. The Company's export was also adversely affected. The Company has achieved sales of Rs. 21,93,12,663/- i.e. 12.5% lower as compared to the previous year's sales. Further, the Company has incurred undertaken major repairs to the Plant and Machineries aggregating to Rs. 1,51,19,064/-. The Company has earned Rs. 6,43,60,753/- as against profit of Rs. 9,59,88,628/- earned during the previous year before providing Depreciation and Finance Cost. Your Directors hope revival of the market conditions and better performance of the Company in the coming years.

DIVIDEND

Your Directors are pleased to recommend dividend at 9% (i.e. Rs. 0.90 per share) out of the current profits and balance out of the surplus in the profit and loss Account, subject to approval of the members in their ensuing Annual General Meeting. The final dividend, if declared, will absorb an outflow of Rs. 35,62,830/- towards dividend amount and Rs. 5,77,980/- towards dividend distribution tax. The requisite provision for dividend has been made in the accounts for the year ended 31st March, 2012.

FINANCE

The Company continued to avail financial assistance to part finance its activities from the State Bank of India.

PARTICULARS OF EMPLOYEES

There was no employee covered under the purview of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. Hence, particulars are not given.

INSURANCE

All the assets of the Company including buildings, plant and machineries and stocks are adequately insured.

DIRECTORATE

Shri Dinesh H Pande, Shri Laxman C Tilani and Shri Neel D Bilgi are liable to retire by rotation as Directors at the ensuing Annual General Meeting and are eligible for re-appointments. They have also offered themselves for re-appointments.

COMPLIANCE CERTIFICATE

As required under the provisions of Section 383A of the Companies Act, 1956 and the rules made thereunder, a certificate is attached herewith and the same forms part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

i) in the preparation of annual accounts for the financial year ended March 31, 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that 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 as at 31st March, 2012 and the profits of the Company for the year under review;

iii) the directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the directors have prepared the accounts for the financial year ended 31st March, 2012 on a "going concern" basis.

PUBLIC DEPOSITS

The Company has not accepted any deposit from the public during the year within the meaning of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposit) Rules, 1975.

COST AUDIT

As per the provisions of Section 209(1)(d) and 233B of the Companies Act, 1956 and the Rules made, notifications and circulars issued thereunder, the Company has to submit Compliance Report certified by a Cost Accountant for the year ended on 31st March, 2012. The Company has also appointed Mr Manish B Analkat, Practising Cost Accountant of Ahmedabad to conduct cost audit for the year 2012-13 in respect of the products of the Company.

AUDITORS

M/s C R Sharedalal & Co., Chartered Accountants, Ahmedabad retires as the Statutory Auditors at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment and have indicated their willingness to act as Auditors, if appointed. You are requested to consider their re-appointment.

The Auditors observations read with the notes to the Accounts are self-explanatory.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

The Company has been taking steps for optimum utilisation of power and fuel. Information as required under Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given by way of Annexure - "A" forming part of this Report.

CORPORATE GOVERNANCE

The Company focuses on good Corporate Governance. The Company has implemented a combination of mandatory & voluntary conditions of Clause 49 of the Listing Agreement of the Bombay Stock Exchange Limited, Mumbai pertaining to Corporate Governance. A detailed note on Corporate Governance and Auditor's Certificate confirming compliance of the Corporate Governance requirements by the Company are annexed.

ACKNOWLEDGEMENTS

The Board of Directors of the Company appreciates the continuous & comprehensive support and cooperation by the Company's bankers, shareholders, customers, suppliers and other business associates.

Your Directors place on record their deep appreciation for contribution and devoted services of the employees at all levels.

For and on behalf of the Board

Dinesh A Bilgi Chairman & Mg Director

Regd Office: 612, GIDC Estate Chahtral, Tal: Kalol Dist: Gandhinagar-382 729

Date: 31st July, 2012


Mar 31, 2011

The Directors are pleased to present their 22nd Annual Report together with the Audited Statement of Accounts of the Company for the year ended on 31st March, 2011.

FINANCIAL RESULTS (Amount in Rupees) 31.03.2011 31.03.2010

Sales (Net) 25,06,11,707 21,42,58,947

Profit before depreciate & Interest 9,59,88,628 7,34,64,041

Less Interest 1,72,76.147 1,32,40,073

Depreciation 5,62.48,628 4,09,44,167

Profit before Tax 2,24,63,853 1,92,79,801

Provision for Taxation 48,00,000 33,00.000

Provision for Deferred Tax 21,20,000 64,00,000

Profit after Tax 1,55,43,853 95,79,801

Surplus brought forward from previous year 6,99,86,416 6,45,14,987

Add: Tax Adjustment 27,71,764 59,968

Profit available for Appropriation 8,83,02,033 7,41,54,756

Proposed Dividend 35,62,830 35,62,830

Tax on Proposed Dividend 5,91,750 6,05,510

Balance Carried to Balance Sheet 8,41,47,453 6,99,86,416

OPERATIONS

Your Directors have to report that the industry faced imposition of excise duty during the last quarter of the year The Company continued to enjoy good market response and maintained its growth. The Company has achieved sales of Rs 25,06,11,707/-, i.e. 17% increase over the previous year s sales. The Company has undertaken expansion plans with major capital expenditure for efficiency and better productivity The Company has also explored overseas market with export turnover of Rs. 99,02,808/-. The Company has earned profit of Rs. 9,59,88,628/-, i.e. an increase of 30.66% over the previous year's profit before providing interest and depreciation.

DIVIDEND

Your Directors are pleased to recommend dividend at 9% (i.e. Re 0. 90 per share) subject to approval of the members in their ensuing Annual General Meeting. The final divided declared will absorb an outflow of Rs.35,62 830/- towards dividend and Rs. 5,91,750/- towards dividend distribution lax. The requisite provision for dividend has been made in accounts for the year ended 31st March, 2011.

FINANCE

The Company's expansion project has been financed partly out of borrowings from the Company's bankers, namely the State Bank of India.

PARTICULARS OF EMPLOYEES

There was no employee covered under the purview of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. Hence, particulars are not given.

INSURANCE

All the assets of the Company including buildings, plant & machineries and stocks are adequately insured.

DIRECTORAAATE

Shri Balkrishna I Makwana, Shri Pragnesh K Shah and Shri Chirag D Bilgi are liable to retire by rotation as Directors at the ensuing Annual General Meeting and are eligible for re- appointment. They have also offered themselves for re- appointments.

COMPLIANCE CERTIFICATE

As required under the provisions of Section 383A of the Companies Act, 1956 and the rules made there under, a certificate is attached herewith and the same forms part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that.

i) in the preparation of annual accounts for the financial year ended March 31, 2011, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year as at 31st March, 2011 and the profits of the Company for the year under review;

iii) the directors have taken proper and sufficient care to the best of their knowledge and ability 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;

iv) the directors have prepared the accounts for the financial year ended 31st March, 2011 on a "going concern" basis.

PUBLIC DEPOSITS

The Company has not accepted any deposit from the public during the year within the meaning of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposit) Rules, 1975.

AUDITORS

M/s C R Sharedalal & Co., Chartered Accountants, Ahmedabad retires as the Statutory Auditors at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment and have indicated their willingness to act a Auditors, if appointed. You are requested to consider their re-appointment. The Auditors observations read with the notes to the Accounts are self - explanatory.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

The Company has been taking steps for optimum utilisation of power and fuel. Information as required under: Sect on 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given by way of Annexure-"A" forming part of this Report.

CORPORATE GOVERNANCE

The Company has been proactive in adhering to the principles and practices of good Corporate Governance. As required by Clause 49 of the Listing Agreement with the Bombay Stock Exchange Ltd, Mumbai, a detailed note on Corporate Governance is annexed to this Report. The Auditor's Certificate confirming compliance of the Corporate Governance requirements by the Company is attached to the Report on Corporate Governance.

ACKNOWLEDGEMENTS

The Board of Directors of the Company hereby convey their sincere appreciation for the continuous support and co-operation extended by the State Bank of India, the Company's bankers, shareholders, customers, suppliers and other business associates.

For and on behalf of the Board

Regd Office:

612, GEDC Estate, Chhatral Dinesh A Bilgi

Tal: Kalol, Chairman & Mg Director

Dist: Gandhinagar-382 729

Date: 3rd August, 2011


Mar 31, 2010

The Directors are pleased to present their 21st Annual Report together with the Audited Statement of Accounts of the Company for the year ended on 31st March, 2010.

FINANCIAL RESULTS (Amount in Rupees)

31.03.2010 31.03.2009

Sales (Net) 21,42,58,947 16,53,73,907

Profit before depreciation 6,02,23,968 4,02,75,474

Less: Depreciation 4,09,44,167 3,13,55,065

Provision for Taxation 33,00,000 29,50,000

Provision for Deferred Tax 64,00,000 (1,00,000)

Provision for Fringe Benefit Tax - 3,70,000

Profit after Tax 95,79,801 57,00,409

Surplus brought forward

from previous year 6,45,14,987 6,29,82,918

Add: Tax Adjustment 59,968 NIL

Profit available for

Appropriation 7,41,54,756 6,86,83,327

Proposed Dividend 35,62,830 35,62,830

Tax on Proposed Dividend 6,05,510 6,05,510

Balance Carried to

Balance Sheet 6,99,86,416 6,45,14,987

OPERATIONS

The Company has made a turnaround in its performance during the year under review. The Company has secured sales of Rs. 2142.59 lacs, i.e. an increase of 29.56% over the perivous years sales of Rs. 1653.74 lacs. Export of the Company has seen a boost up. The Company has made major capital expenditure for installation of WTG for captive consumption and plant and machineries for expansion on hand. The manufacturing and other overheads were also increased. The Company has earned profit of Rs. 602.24 lacs, i.e. an increase of 49.53% over the previous years profits before providing depreciation and taxes.

DIVIDEND

Your Directors are pleased to recommend dividend at 9% (i.e. Re. 0.90 per share) subject to approval of the members in their ensuing Annual General Meeting. The final dividend, if declared will absorb an outflow of Rs.35,62,830/- towards dividend and Rs. 6,05,510/- towards dividend tax. The requisite provision for dividend has been made in the accounts for the year ended 31st March, 2010.

FINANCE

The Companys expansion project has been financed partly out of borrowings from the Companys bankers, namely the State Bank of India.

PARTICULARS OF EMPLOYEES

There was no employee covered under the purview of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975. Hence, particulars are not given.

INSURANCE

All the assets of the Company including buildings, plant & machineries and stocks are adequately insured.

DIRECTORATE

Shri Laxman C Tilani and Shri Vasant R Shah are liable to retire by rotation as Director at the ensuing Annual General Meeting and are eligible for re-appointment. They have also offered themselves for re-appointments.

Shri Pragnesh K Shah was as an Executive Director of the Company for a period of five years from lst November, 2009 and Shri Neel D Bilgi, relative of Directors was re-appointed as an Executive Director of the Company for a further period of five years from Ist August, 2010 by the Board of Directors on recommendation of the Audit Committee. You are requested to consider both the appointments.

Shri Dinesh H Pande was appointed as an Additional Director of the Company with effect from 1st August, 2010 to strengthen the present Board of Directors. He has a vast experience in Marketing for over three decades. He is a Independent Director. He holds office upto the date of this ensuing Annual General Meeting. The Board recommends his appointment.

Shri Chirag D Bilgi, an Executive Officer of the Company was promoted and appointed as an Additional and Executive Director of the Company with effect from 1st August, 2010. He has provided valuable services to the Company and the Audit Committee also recommended his appointment. He holds office upto the date of this ensuing Annual General Meeting. The Board recommends his appointment. RESOLUTIONS BY POSTAL BALLOT Your Directors are pleased to inform that the Company has passed resolutions through Postal Ballots on 11.12.2009 for (1) Alteration of the Main Objects Clause III of the Memorandum of Association by insertion of new Sub Clauses A(6) and A(7), (2) increasing borrowing powers of the Company upto Rs. 200 crores in view of the proposed expansion projects and (3) authorising the Company to sell, lease, mortgage or create charge over the assets of the Company for securing the borrowings.

WTG PROJECT

Your Directors have pleasure to inform you that the Company has installed 1.6MW Wind Turbine Generators at Samana, Jamnagar District with total outlay of Rs. 880 lacs. The WTGs are also operative from 31st December, 2009. These WTGs are installed for captive consumption and would result in the reduction of the power cost which in turn would be beneficial to the Company.

COMPLIANCE CERTIFICATE

As required under the provisions of Section 383A of the Companies Act, 1956 and the rules made there under, a certificate is attached herewith and the same forms part of this Report.

DIRECTORS RESPONSINILITY STATEMENT

Pursuant to the requirements of Section 217(2AA) of the Companies Act, 1956, the Directors hereby confirm that:

i) in the preparation of annual accounts for the financial year ended March 31, 2010, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that 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 as at 31st March, 2010 and the profits of the Company for the year under review;

iii) the directors have taken proper and sufficient care to the best of their knowledge and ability 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;

iv) the directors have prepared the accounts for the financial year ended 31st March, 2010 on a "going concern" basis.

PUBLIC DEPOSITS

The Company has not accepted any deposit from the public during the year within the meaning of Section 58A of the Companies Act, 1956 read with the Companies (Acceptance of Deposit) Rules, 1975.

AUDITORS

M/s C R Sharedalal & Co., Chartered Accountants, Ahmedabad retires as the Statutory Auditors at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment and have indicated their willingness to act as Auditors, if appointed. You are requested to consider their re-appointment. The Auditors observations read with the notes to the Accounts are self - explanatory.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

The Company has been taking steps for optimum utilisation of power and fuel. Information as required under Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is given by way of Annexure- "A" forming part of this Report.

CORPORATE GOVERNANCE

The Company has been proactive in adhering to. the principles and practices of good Corporate Governance. As required by Clause 49 of the Listing Agreement with the Bombay Stock Exchange Ltd, Mumbai, a detailed note on Corporate Governance is annexed to this Report. The Auditors Certificate confirming compliance of the Corporate Governance requirements by the Company is attached to the Report on Corporate Governance.

ACKNOWLEDGEMENTS

The Board of Directors of the Company hereby express their sincere appreciation for the excellent support and co-operation extended by the State Bank of India, the Companys bankers, shareholders, customers, suppliers and other business associates. Your Directors place on record their deep appreciation for contribution of the Employees at all levels.

For and on behalf of the Board

Regd Office:

612, GIDC Estate, Chhatral

Tal: Kalol, Dist:

Gandhinagar-382 729 DineshA Bilgi

Date: July 29, 2010 Chairman & Mg Director

 
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