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Directors Report of Fenoplast Ltd.

Mar 31, 2013

The Directors have pleasure in presenting the Thirty Eighth Annual Report of your Company and the audited statement of accounts for the year ended March 31, 2013.

FINANCIAL RESULTS

Rs. in Lakhs

2012-2013 2011-2012

Gross Income 21,383 21,363

Gross Income (Net of Excise Duty) 19,475 19,680

Less: Expenditure 17,656 17,863

Gross Profit 1,819 1,817

Less: Interest & Finance Charges 1,350 1,184

Less: Depreciation 212 230

Profit before Tax 257 402

Less: Current Tax 75 129

Less: Deferred Tax 17 7

Profit available for appropriations 165 267

Profit brought forward 1,865 1,598

Balance carried forward 2,030 1,865

BUSINESS REVIEW

Your Company has achieved the same revenues close to the previous year amounting to Rs.. 21383 Lakhs as against Rs.. 21361 Lakhs in previous year in-spite of the severe power shortage. As you are aware your Company has passed through tough times during the year due to power shortage and has been able to overcome by supplementing through internal generation coupled with sourcing, of power from expensive power purchase scheme envisaged by AP Transco. These efforts have enabled the Company to operate the optimum level of capacities without any interruption. However, the Profit before tax decreased from Rs..402 Lakhs in previous year to Rs.257 Lakhs mainly due to increase in Power costs by Rs.. 170 Lakhs. During the year under review the management has continued its focus on optimizing the utilization of resources and production capacities as well as on the value addition products like PVDC, Metalized & Pearlized products. Your Company envisages significant increase in revenues from both the existing and new products from next year for all the efforts that have been put in the last two years.

Your Company''s marketing strategy is to compete in market segments that are diverse yet profitable. The focus of our sales and marketing team is to establish a premium market position for all our products in general and value addition products in particular thereby increase its market share. However, the highly competitive environment and market dynamics is a constant phenomenon in any business environment and it is an imperative need to face such challenges.

Company''s LOGO:

A new Company logo was unveiled on the 28th April 2013, as the Company felt the need for a proper and better identity that symbolized the vibrancy and the growth of the Company :

OPERATIONS:

For the year under review, production of PVC Leather Cloth was 62.85 Ln. Mtrs. as against the previous year''s production of 73.77 Ln. Mtrs. Production of PVC Film was 9556.06 MT as against the previous year''s production of 10642.43 MT.

DIVIDEND:

Considering the liquidity position of the Company, the directors do not recommend dividend for the year 2012-13.

MARKETS:

The continuous growth in automobile and pharma sectors augurs well for the Company and efforts are being made to further increase the Company''s share in both these sectors.

EXPORTS:

During the year 2012-13, your Company made exports to various countries aggregating Rs.. 1635.58 lakhs as against the previous exports of Rs.. 1334.16 lakhs.

Your Company has remained a preferred source to all its customers and is constantly taking steps to mitigate risk and stay ahead of competition.

BUSINESS INITIATIVES:

Following is a list of limited but broad level initiatives that your Company has taken to improve its business effectively

- Comprehensive yet precise objectives for our employees at all levels that are aligned with the vision of the Company;

- Enhancing significantly its customer base in foreign markets since this is strategically important for the long term sustainability of the Company;

- Constant review, assessment and action plan to achieve the targets

- Use of appropriate technology and software to increase productivity and

- Improving the skills of the employees at all levels by continuous training.

FIXED DEPOSITS:

Your Company has not accepted any Fixed Deposits during the year under review and, as such, no amount of principal or interest was outstanding as on the balance sheet date.

DIRECTORS:

In accordance with the requirements of the Companies Act, 1956 and the Articles of Association of the Company, Sri P.Niroop and Sri H.Krishna Kumar, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

PERSONNEL:

Your Company''s employees are integral to the Company''s success. They have played a significant role and enabled the Company to deliver credible performance year after year. The Board of Directors acknowledges the contribution and efforts put in by the employees of the Company.

CORPORATE GOVERNANCE:

As a listed Company, necessary measures have been taken to comply with the Listing Agreements of Stock Exchanges. A report on Corporate Governance along with a certificate of compliance from the Auditors forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A report on Management Discussion and Analysis forms part of this Report.

DIRECTORS'' RESPONSIBILITY STATEMENT:

As per Section 217(2AA) of the Companies Act, 1956, we hereby state:

i. That in the preparation of the annual accounts for the year ended March 31st 2013, the applicable Accounting Standards have been followed and no material departures have been made from the same;

ii. That 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 as at March 31st, 2013 and of the profit or loss of the Company the year ended on that date;

iii. That the directors have taken proper and sufficient care 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. That the directors have prepared the annual accounts of the Company for the financial year ended 31st March, 2013 on a going concern basis.

AUDITING SYSTEM

i. The financial statements have been audited by M/s M. Anandam & Co., Chartered Accountants, the independent Auditor.

ii. The audit committee of your Company meets periodically with the internal auditor to review the performance of internal audit, to discuss the nature and scope in consultation with the statutory auditors and to ensure adequacy of the internal control and financial reporting systems. To ensure complete independence, the statutory auditor and the internal auditor have full and free access to the Members of the Audit Committee to discuss any matter of substance.

PARTICULARS REQUIRED UNDER SEC. 217(2A) OF THE COMPANIES ACT, 1956 READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975, FOR THE YEAR UNDER REVIEW ARE AS UNDER:

No employee of the Company was in receipt of remuneration, during the financial year 2012-13, in excess of the sum prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended.

MATTERS REQUIRED TO BE REPORTED AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS'' REPORT FOR THE YEAR ENDED 31st MARCH, 2013:

A. Energy Conservation: The consumption of energy in the process of manufacturing is not substantial. During the year under review, consumption of power, per Ln.Mtr. of PVC Leather Cloth was 0.17 (previous year 0.17 KWh per Ln.Mtr). The consumption of coal was 0.41 kg per Ln. Mtr. of production (previous year 0.30 kg. Per Ln.Mtr.). Power consumption for PVC film was at 0.66 KWh per Kg. (previous year 0.55 kwh Per Kg.) of production. Details are attached in Form A.

B. Technology Absorption: On the technology absorption, the Company''s employees are well conversant with the changes adopted in the production process to consume similar/ same raw material with different specifications/ parameters. The machines are being operated without any technical problems.

C. Foreign exchange earnings and Out-go: The Company used Rs.. 3520.38 Lakhs on foreign exchange for its imports during the year, against its total export earnings of Rs.. 1469.96 Lakhs. In the previous year the

Company has used Rs..4034.14 Lakhs as againstRs.. 1187.21 Lakhs earned AUDITORS:

M. Anandam & Co., Chartered Accountants retire as auditors in this General Meeting and are eligible for re-appointment and have extended their consent under section 224(1 B) of the Companies Act, 1956.

COMPANY SECRETARY CERTIFICATE:

Secretarial Compliance Certificate issued by Practicing Company Secretaries M/s.P.S.Rao & Associates is annexed to this report.

INFORMATION REQUIRED TO BE DISCLOSED UNDER CLAUSE 43A OF THE LISTING AGREEMENT:

The shares of the Company are listed on:

1. BSE Limited (BSE), Phiroze Jeejeebhoy Towers, Dalai Street, Mumbai- 400001

2. The Calcutta Stock Exchange Association Limited (CSE), #7, Lyons Range, Kolkata- 700001.

The listing fee for the year 2013-14 has been paid to both the above mentioned Stock Exchanges.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the continued patronage extended to the Company by dealers, customers, suppliers, employees and shareholders. The trust reposed in your Company by its esteemed customers helped stabilized growth during the year under review.

Your Company also acknowledges the support and guidance received from Canara Bank, State Bank of India and Syndicate Bank, other government agencies during the year under review and looks forward to their continuing support.

For and on behalf of the Board of Directors B. Kamalaker Rao

Place : Secunderabad Chairman

Date : 25.05.2013


Mar 31, 2012

To THE MEMBERS OF FENOPLAST LIMITED

The Directors have pleasure in presenting the Thirty Seventh Annual Report of your Company and the audited statement of Profit & Loss for the year ended March 31, 2012.

FINANCIAL RESULTS:

During the year under review company's total income was Rs.19,680 Lakhs as compared to Rs.17,749 Lakhs in the previous year. The financial details of the Company are as under:

Rs. in lakhs

2011-2012 2010-2011

Gross Income (Net of Excise Duty) 19680 17749

Less: Expenditure 17864 16186

Gross Profit 1816 1563

Less: Interest & Finance Charges 1184 1012

Less: Depreciation 230 178

Profit before Tax 402 373

Less: Current Tax 129 103

Less: Deferred Tax 6 21

Profit available for appropriations 267 249

Profit brought forward 1598 1349

Balance carried forward 1865 1598

BUSINESS REVIEW

Revenues increased from Rs.17749 Lakhs in the previous year to Rs 19680 Lakhs, at a growth rate of 11%. Profit before tax increased from Rs. 373 Lakhs to Rs.402 Lakhs. Growth in the profitability for this year was a result of growth in market share of existing products, and launch of products with minimal competition. Profit after tax increased from Rs.249 Lakhs to Rs.267 Lakhs.

The continuous escalation in the cost of raw- materials has affected the margins of the Company. Effective implementation of cost-saving measures and other costing systems have helped to protect the margins and to compete in the market. During the period under review the management's focus is on optimum utilization of resources and production capacities and on the implementation of the PVDC project for high value addition. Your Company added PVDC to its product lines and this is a reflection of the demand for your Company's products in the premium markets. Your Company envisages increase in customer demand and in order to facilitate manufacture of new and existing products, it is in the process of expansion.

Your Company's marketing strategy is to compete in market segments that are diverse yet profitable. The focus of our sales and marketing force is to establish a premium market position for all our products in general and value addition products in particular and to increase that share until we have cemented a majority through the product life cycle. However the highly competitive environment and market dynamics is a constant phenomenon in any business environment and it is imperative need to face such challenges.

OPERATIONS:

For the year under review, production of PVC Leather Cloth was 73.77 Ln. Mtrs. as against the previous year's production of 70.67 Ln. Mtrs. Production of PVC Film was 10642.43 MT as against the previous year's production of 10907.75 MT.

MARKETING:

The continuous growth in automobile and pharma sectors augurs well for the Company and efforts are being made to further increase the Company's share in both these sectors.

EXPORTS:

During the year 2011-2012, your Company made exports to various countries aggregating Rs. 1334.16 lakhs as against the previous exports of Rs. 1444.79 Lakhs.

Your Company has remained a preferred source to all its customers and is constantly taking steps to mitigate risk and stay ahead of competition.

Business Focus:

Following is a list of limited but broad level initiatives that your company has taken to manage business effectively

- Comprehensive yet simple objectives for our employees at all levels that are consistent with the long term vision of the company;

- Increase presence in Foreign Markets that are complex yet strategically important for the long term sustainability of the Company;

- Constant review and assessment and action plan for business improvement

- Use of appropriate technology and software for increased productivity and

- Training.

FIXED DEPOSITS:

Your Company has not accepted any Fixed Deposits during the year under review and, as such, no amount of principal or interest was outstanding as on the balance sheet date.

DIRECTORS:

In accordance with the requirements of the Companies Act, 1956 and the Articles of Association of the Company, Sri H. Narsaiah and Dr. K. Malhar Rao, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

PERSONNEL:

Your Company's employees are integral to the Company's success. They have played a significant role and enabled the Company to deliver credible performance year after year. The Board of Directors acknowledges the contribution and efforts put in by the employees of the Company.

CORPORATE GOVERNANCE:

As a listed Company, necessary measures have been taken to comply with the listing agreements of Stock Exchanges. A report on Corporate Governance along with a certificate of compliance from the Auditors forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A report on Management Discussion and Analysis forms part of this report.

DIRECTORS' RESPONSIBILITY STAETMENT:

As per Section 217(2AA) of the Companies Act, 1956, we hereby state:

i. That in the preparation of the annual accounts for the year ended 31st March, 2012, the applicable Accounting Standards have been followed and no material departures have been made from the same.

ii. That 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 and of the profit or loss of the company for that period.

iii. That the directors have taken proper and sufficient care 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. That the directors have prepared the annual accounts for the financial year ended 31st March, 2012 on a going concern basis.

Auditing System

i. The financial statements have been audited by M/s M Aanadam & Co Chartered Accountants, the independent Auditor.

ii. The audit committee of your Company meets periodically with the internal auditor to review the performance of internal audit, to discuss the nature and scope of the internal auditor's functions, and to discuss auditing, internal control and financial reporting issues. To ensure complete independence, the statutory auditor and the internal auditor have full and free access to the Members of the Audit Committee to discuss any matter of substance.

PARTICULARS REQUIRED UNDER SEC. 217(2A) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975, FOR THE YEAR UNDER REVIEW ARE AS UNDER:

No employee of the Company was in receipt of remuneration, during the financial year 2011-2012, in excess of the sum prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended.

MATTERS REQUIRED TO BE REPORTED AS PER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED 31ST MARCH, 2012:

A. Energy Conservation: The consumption of energy in the process of manufacturing is not substantial. During the year under review, consumption of power, per Ln.Mtr. of leather cloth was 0.17 KWh (previous year 0.20 KWh. Per Ln.Mtr). The consumption of coal was 0.30 kg per Ln. Mtr. of production (previous year 0.48 kg. Per Ln.Mtr.). Power consumption for PVC film has remained at 0.55 KWh per each Kg of production. Details are enclosed herewith in Form A.

B. Technology Absorption: On the technology absorption, the company's employees are well conversant with the changes adopted in the production process to consume similar/same raw material with different specifications/ parameters. The machines are being operated without any technical problems.

C. Foreign exchange earnings and out-go: The Company used Rs. 4034.14 Lakhs on foreign exchange for its imports during the year, against its total export earnings of Rs. 1187.21. Previous Year the Company has used Rs. 3714.81 Lakhs as against Rs. 1385.15 lakhs earned.

AUDITORS:

M. Anandam & Co., Chartered Accountants retire as auditors in this General Meeting and are eligible for re-appointment and extended their consent under section 224(1B) of the Companies Act, 1956.

COMPANY SECRETARY CERTIFICATE:

Secretarial Compliance Certificate issued by Practicing Company Secretaries M/s.P.S.Rao & Associates is annexed to this report.

INFORMATION REQUIRED TO BE DISCLOSED UNDER CLAUSE 43A OF THE LISTING AGREEMENT:

The shares of the Company are listed on:

1. BSE Limited (BSE), Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai- 400001

2. The Calcutta Stock Exchange Association Limited (CSE), #7, Lyons Range, Kolkata - 700001.

The listing fee for the year 2012-2013 has been paid to both the above mentioned Stock Exchanges.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the continued patronage extended to the Company by dealers, customers, suppliers, employees and shareholders. The trust reposed in your Company by its esteemed customers helped stabilized growth during the year under review.

Your Company also acknowledges the support and guidance received from Canara Bank, State Bank of India and Syndicate Bank, other government agencies during the year under review and looks forward to continuing support

For and on behalf of the Board of Directors

Sd/-

B Kamalaker Rao

Chairman

Place : Secunderabad

Date : 30.05.2012


Mar 31, 2011

The Members,

The directors are pleased to present the 36th Annual Report of the Company with Audited Balance Sheet and Statement of Accounts for the year ended 31st March 2011.

FINANCIAL RESULTS:

During the year under review company-s total income was Rs.19284.67 lakhs as compared to Rs. 15493.76 lakhs in the previous year. The financial details of the Company are as under:

2010-2011 2009-2010 Rs. in lakhs Rs. in lakhs

Income 19284.67 15493.76

Less: Excise Duty 1535.18 954.51

Less: Expenditure 16186.46 12954.69

Gross Profit 1563.03 1584.56

Less: Interest & Finance Charges 1012.33 1031.94

Less: Depreciation 177.80 219.72

Profit before Tax 372.90 332.90

Less: Current Tax 103.30 63.23

Less: Deferred Tax 20.56 49.92

Profit available for appropriations 249.04 219.75

Profit brought forward 1349.24 1129.49

Balance carried forward 1598.28 1349.24

Your Directors are pleased to inform that your Company earned a Profit before tax of Rs.372.90 lakhs during the year under review as against Rs 332.90 Lakhs in previous year. The new calendaring line has contributed significantly towards higher production of PVC Film. Efforts are being made to attain optimum capacity utilization during the current year.

OPERATIONS:

For the year under review production of PVC Leather Cloth was 70.67 Ln. Mtrs. as against the previous year-s production of 63.79 lakhs Ln. Mtrs. Production of PVC Film was 10907.75 MT as against the previous year-s production of 10309.26 MT.

MARKETING

The continuous growth in automobile and pharma sectors augurs well for the Company and efforts are being made to further increase the Company-s share in both these sectors.

EXPORTS:

During the year 2010-2011, your Company made exports to various countries aggregating to Rs. 1444.79 lakhs as against the previous exports of Rs. 1405.13 Lakhs.

FIXED DEPOSITS:

Your Company has not accepted any Fixed Deposits during the year under review and, as such, no amount of principal or interest was outstanding as on the balance sheet date.

DIRECTORS:

In accordance with the requirements of the Companies Act, 1956 and the Articles of Association of the Company, Sri B. Kamalaker Rao and Dr. H. Anuradha retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

PERSONNEL:

Your Company-s employees are integral to the Company-s success. They have played a significant role and enabled the Company to deliver credible performance year after year. The Board of Directors acknowledges the contribution and efforts put in by the employees of the Company.

CORPORATE GOVERNANCE:

As a listed Company, necessary measures have been taken to comply with the listing agreements of Stock Exchanges. A report on Corporate Governance, along with a report of compliance from the Auditors, forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A separate section on Management Discussion and Analysis Report is given elsewhere in this Annual Report.

DIRECTORS- RESPONSIBILITY STAETMENT:

As per Section 217(2AA) of the Companies Act, 1956, we hereby state:

i. That in the preparation of the annual accounts for the year ended 31st March, 2011, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

ii. That the Directors have selected such Accounting Policies and applied them consistently and made judgments and estimate 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 and of the profit or loss of the company for that period.

iii. That the directors have taken proper and sufficient care 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. That the directors have prepared the annual accounts for the financial year ended 31st March, 2011 on a going concern basis.

INFORMATION AND EXPLANATIONS REQUIRED TO BE GIVEN AS PER SEC. 217(3) OF THE COMPANIES ACT, 1956:

Your directors have taken note of the Auditors observations/qualifications like non-provision of gratuity and leave encashment on actuarial valuation and the observations/qualifications of the Auditors are explained in the appropriate notes to the accounts.

PARTICULARS REQUIRED UNDER SEC. 217(2A) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975, FOR THE YEAR UNDER REVIEW ARE AS UNDER:

No employee of the Company was in receipt of remuneration during the financial year 2010-2011, in excess of the sum prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended.

MATTERS REQUIRED TO BE REPORTED AS PER COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS- REPORT FOR THE YEAR ENDED 31ST MARCH, 2011:

A. Energy Conservation: The consumption of energy in the process of manufacturing is not substantial. During the year under review, consumption of power, per Ln.Mtr. of leather cloth was 0.20 KWh (previous year 0.20 KWh. Per Ln.Mtr). The consumption of coal was 0.44 kg per Ln Mtr of production (previous year 0.48 kg. Per Ln.Mtr.). Power consumption for PVC film has remained at 0.55 KWh per each Kg of production. Details are enclosed herewith in Form A.

B. Technology Absorption: On the technology absorption, the company-s employees are well conservant with the changes adopted in the production process to consume similar/same raw material with different specifications/ parameters. The machines are being operated without any technical problems.

C. Foreign exchange earnings and out-go: The

Company used Rs. 3714.81 lakhs on foreign exchange for its imports during the year, against its total export earnings of Rs. 1385.15 lakhs . Previous Year the Company has used Rs. 2445.17 Lakhs as against Rs. 1359.49 lakhs earned.

AUDITORS:

M. Anandam & Co., Chartered Accountants retire as auditors in this General Meeting and are eligible for re-appointment.

COMPANY SECRETARY CERTIFICATE:

Secretarial compliance certificate issued by a practicing Company Secretary is annexed to this report.

INFORMATION REQUIRED TO BE DISCLOSED UNDER CLAUSE 43A OF THE LISTING AGREEMENT:

The shares of the Company are listed on:

1. The Bombay Stock Exchange Limited (BSE), Phiroze Jeejeebhoy Towers,

Dalai Street, Mumbai- 400001

2. The Calcutta Stock Exchange Association Limited(CSE)

#7, Lyons Range, Kolkata- 700001.

The listing fee for the year 2011 -2012 has been paid to both the above mentioned Stock Exchanges.

ACKNOWLEDGEMENTS:

Your Directors place on record their sincere gratitude to Canara Bank, State Bank of India, Syndicate Bank, Corporation Bank, for their financial support extended to the Company. Your Directors place on record their appreciation of the continued patronage extended to the Company by dealers, customers, suppliers, employees and shareholders.

For and on behalf of the Board of Directors

Sd/- B Kamalaker Rao Chairman

Place : Secunderabad Date : 27.05.2011


Mar 31, 2010

The Directors are pleased to present the 35th Annual Report of the Company with Audited Balance Sheet and Statement of Accounts for the year ended 31st March 2010.

FINANCIAL RESULTS:

During the year under review companys total income was Rs. 15493.76 lakhs as compared to Rs. 12031.23 lakhs in the previous year. The Financial details of the Company are as under:



2009-2010 2008-2009

Rs. in lakhs Rs. in lakhs

Income 15493.76 12031.23

Less: Excise Duty 954.51 930.30

Less: Expenditure 12954.69 9834.31

Gross Profit 1584.56 1266.19

Less: Interest & Finance charges 1031.94 815.07

Less: Depreciation 219.72 190.54

Profit before Tax 332.90 260.58

Less: Current Tax 63.23 29.57

Less: Fringe Benefit Tax 0.00 10.31

Less: Deferred Tax 49.92 88.72

Profit available for appropriations 219.75 131.98

Profit brought forward 1129.49 997.51

Balance carried forward 1349.24 1129.49

Your Directors are pleased to inform that your Company earned a Profit before tax of Rs.332.90 lakhs during the year under review as against Rs.260.58 lakhs in previous year. The new calendaring line has contributed significantly towards higher production of PVC film. Efforts are being made to attain optimum capacity utilization during the current year.

OPERATIONS:

For the year under review production of PVC Leather Cloth was 63.79 lakhs Ln.Mtrs. as against the previous years production of 52.50 lakhs Ln.Mtrs. Production of PVC Film was 10309.26 MT as against the previous years production of 6911.71 MT

MARKETING:

The continuous growth in automobile and pharma sectors augurs well for the Company and efforts are being made to further increase the Companys share in both these sectors.

EXPORTS:

During the year 2009-2010, your Company made exports to various countries aggregating to Rs. 1405.13 lakhs as against the previous year exports of Rs.1514.65 lakhs.

FIXED DEPOSITS:

Your Company has not accepted any Fixed Deposits during the year under review and, as such, no amount of principal or interest was outstanding as on the balance sheet date.

DIRECTORS:

In accordance with the requirements of the Companies Act, 1956 and the Articles of Association of the company, Sri H. Krishna Kumar and Dr K Malhar Rao retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Mr P Niroop was co-opted as Additional Director on 13th May 2010 and as per provisions of the Companys Act, 1956 retires and offers himself for re-appointment at the ensuing Annual General Meeting.

PERSONNEL:

Your Companys employees are integral to the Companys success. They have played a significant role and enabled the company to deliver credible performance year after year. The Board of Directors acknowledges the contribution and efforts put in by the employees of the Company.

CORPORATE GOVERNANCE;

As a listed Company, necessary measures have been taken to comply with the listing agreements of Stock Exchanges. A report on Corporate Governance, along with a certificate of compliance from the Auditors, forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A separate section on Management Discussion and Analysis Report is given elsewhere in this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

As per Section 217(2AA) of the Companies Act, 1956, we hereby state:

(i) that in the preparation of the annual accounts for the year ended 31st March, 2010, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) that 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 and of the profit or loss of the company for that period;

(iii)that the directors have taken proper and sufficient care 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)that the directors have prepared the annual accounts for the financial year ended 31st March, 2010 on a going concern basis.

INFORMATION AND EXPLANATIONS REQUIRED TO BE GIVEN AS PER SEC.217 (3) OF THE COMPANIES ACT, 1956:

Your directors have taken note of the Auditors observations/qualifications like non-provision of gratuity on actuarial valuation, non-reconciliation and non-confirmation in respect of certain debtors, creditors, loans and advances and non-payment of Income Tax amounting to Rs. 90.32 lakhs, on account of various disputes. In respect of Income- tax, your Directors would like to inform that the income-tax amount will get adjusted against refunds due for the earlier year assessments.

The observations/qualifications of the Auditors are explained in the appropriate notes to the accounts.

PARTICULARS REQUIRED UNDER SEC.217 (2A) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES {PARTICULARS OF EMPLOYEES) RULES, 1975, FOR THE YEAR UNDER REVIEW ARE AS UNDER :

SI. Name of the Age Designa- Gross Qualifi- Exp. No. Employee tion Remune- cation In ration years

1. Sri H Kishen 69 Managing Rs.24,16,892 B.Com. 49 yrs Director years

Name of the Employee Dateof Previous Commence- employ- ment ment of employment

1. Sri H Kishen 16.10.1975 Textile Business

MATTERS REQUIRED TO BE REPORTED AS PER COMPANIES {DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS REPORT FOR THE YEAR ENDED 31ST MARCH, 2009:

A. Energy Conservation: The consumption of energy in the process of manufacturing is not substantial. During the year under review, consumption of power, per Ln.Mtr. of leather cloth, was 0.20 KWh (previous year 0.21 KWh per Ln.Mtr.). The consumption of coal was 0.48 Kg. per Ln.Mtr. of production (Previous year 0.48 Kg. Per Ln.Mtr.). Power consumption for PVC film has decreased from 0.64 to 0.55 KWh per each Kg of production. Details are enclosed herewith in Form A.

B. Technology Absorption: On the technology absorption, the Companys employees are well conversant with the changes adopted in the production process to consume similar/ same raw material with different specifications/ parameters. The machines are being operated without any technical problems.

C. Foreign exchange earnings and out-go: The

Company used Rs 2445.17 lakhs on foreign exchange for its imports during the year, against its total export earnings of Rs. 1359.49 lakhs. Previous year the Company has used Rs. 1549.70 lakhs as against Rs 1494.23 lakhs earned.

AUDITORS:

M. Anandam & Co., Chartered Accountants retire as Auditors in this Annual General Meeting and are eligible for reappointment.

COMPANY SECRETARY CERTIFICATE:

Secretarial Compliance Certificate issued by a practicing Company Secretary is annexed to this report.

INFORMATION REQUIRED TO BE DISCLOSED UNDER CLAUSE 43A OF THE LISTING AGREEMENT:

The Shares of the Company are listed on:

1. The Bombay Stock Exchange Limited, (BSE) Phiroze Jeejeebhoy Towers,

Dalai Street, Mumbai - 400 001.

2. The Calcutta Stock Exchange Association Limited (CSE)

# 7, Lyons Range, Kolkata - 700 001.

The Listing fees for the year 2010-2011 have been paid to both the above-mentioned Stock Exchanges.

ACKNOWLEDGEMENTS:

Your Directors place on record their sincere gratitude to Canara Bank, State Bank of India, Syndicate Bank, Corporation Bank, Union Bank of India and Lakshmi Vilas Bank Ltd for their financial support extended to the Company. Your Directors place on record their appreciation of the continued patronage extended to the Company by dealers, customers, suppliers, employees and shareholders,.

For and on behalf of the Board of Directors

B Kamalaker Rao Chairman

Place : Secunderabad

Date : 30.06.2010


Mar 31, 2009

The Directors are pleased to present the 34th Annual Report of the Company with Audited Balance Sheet and statement of Accounts for the year ended 31st March 2009.

FINANCIAL RESULTS:

During the year under review companys total income was Rs. 12031.23 lakhs as compared to Rs. 10793.43 lakhs in the previous year. The Financial details of the Company are as under: 2008-2009 2007-2008 Rs. in lakhs Rs. in lakhs

Income 12031.23 10793.43

Less: Excise Duty 930.30 1001.71

Less: Expenditure 9834.31 8818.91

Gross Profit 1266.62 972.81

Less: Interest & Finance charges 815.07 558.63

Less: Depreciation 190.54 118.76

Profit before Tax 261.01 295.42

Less: Current Tax 29.57 39.95

Less: Fringe Benefit Tax 10.31 8.59

Less : Deferred Tax 38.72 (24.14)

Prior Period adjustments 0.43 1.62

Profit available for appropriations 131.98 272.64

Profit brought forward 997.51 724.87

Balance carried forward 1129.49 997.51

Your Directors are pleased to inform that your Company earned a Profit before tax of Rs.261.01 lakhs during the year under review as against Rs.295.42 lakhs in previous year. The reduction in profit is on account of on going recession and prevailing economic scenario. The Company has taken every effort to optimize its production and reduce its overhead costs by taking various cost control measures.

OPERATIONS:

For the year under review production of PVC Leather Cloth was 52.50 lakhs Ln.Mtrs. as against the previous years production of 60.21 lakhs Ln.Mtrs as company concentrated on high margin items. Production of PVC Film was 6911.71 MT as against the previous years production of 6285.91 MT.

MARKETING:

It is heartening to state that the demand for PVC Leather Cloth and PVC Film are showing healthy signals, as both automobile and pharmaceutical industry are opening up by overcoming the recession. Efforts are being made to increase the Companys share in both these segments.

EXPORTS:

During the year 2008-2009, your Company made exports to various countries aggregating to Rs.1514.65 lakhs as against the previous year exports of Rs.1115.68 lakhs.

FIXED DEPOSITS:

Your Company has not accepted any Fixed Deposits during the year under review and, as such, no amount of principal or interest was outstanding as on the balance sheet date.

DIRECTORS:

In accordance with the requirements of the Companies act, 1956 and the Articles of Association of the company, Sri H. Narsaiah and Sri R. Shankarnarayanan retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Re-appointment of Sri H. Kishen as Managing Director and Sri H. Krishna Kumar as Whole Time Director, for a further period of 5 years, are also proposed at the ensuing Annual General Meeting.

PERSONNEL:

Your Companys employees are integral to the Companys success. They have played a significant role and enabled the company to deliver credible performance year after year. The Board of Directors acknowledges the contribution and efforts put in by the employees of the Company.

CORPORATE GOVERNANCE:

As a listed Company, necessary measures have been taken to comply with the listing agreements of Stock Exchanges. A report on Corporate Governance, along with a certificate of compliance from the Auditors, forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A separate section on Management Discussion and Analysis Report is given elsewhere in this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

As per Section 217(2AA) of the Companies Act, 1956, we hereby state:

(i) that in the preparation of the annual accounts for the year ended 31st March, 2009, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) that 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 and of the profit or loss of the company for that period;

(iii) that the directors have taken proper and sufficient care 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) that the directors have prepared the annual accounts for the financial year ended 31st March, 2009 on a going concern basis.

INFORMATION AND EXPLANATIONS REQUIRED TO BE GIVEN AS PER SEC.217 (3) OF THE COMPANIES ACT, 1956:

Your directors have taken note of the Auditors observations/qualifications like non-provision of gratuity on actuarial valuation, non-reconciliation and non-confirmation in respect of certain debtors, creditors, loans and advances and non-payment of Income Tax amounting to Rs. 106.90 lakhs, on account of various disputes. In respect of Income- tax and Fringe Benefit Tax dues, your Directors would like to inform that the Fringe Benefit Tax dues were cleared as on date and the income-tax amount will get adjusted against refunds due for the earlier year assessments.

The observations/qualifications of the Auditors are explained in the appropriate notes to the accounts.

PARTICULARS REQUIRED UNDER SEC.217 (2A) OF THE COMPANIES ACT, 1956, READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975, FOR THE YEAR UNDER REVIEW ARE AS UNDER:

No employee of the Company was in receipt of remuneration during the financial year 2008-2009, in excess of the sum prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 as amended.

MATTERS REQUIRED TO BE REPORTED AS PER COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OF THE DIRECTORS REPORT FOR THE YEAR ENDED 31ST MARCH, 2009:

A. Energy Conservation: The consumption of energy in the process of manufacturing is not substantial. During the year under review, consumption of power, per Ln.Mtr. of leather cloth, was 0.19 KWh (previous year 0.17 KWh per Ln.Mtr.). The consumption of coal was 0.48 Kg. per Ln.Mtr. of production (Previous year 0.58 Kg. Per Ln.Mtr.). Power consumption for PVC film has increased from 0.56 to 0.61 KWh per each Kg of production. Details are enclosed herewith in Form A.

B. Technology Absorption: On the technology absorption, the Companys employees are well conversant with the changes adopted in the production process to consume similar/ same raw material with different specifications/ parameters. The machines are being operated without any technical problems.

C. Foreign exchange earnings and out-go: The

Company used Rs 1565.71 lakhs on foreign exchange for its imports during the year, against its total export earnings of Rs. 1494.23 lakhs. Previous year the Company has used Rs.3539.42 lakhs as against Rs 1084.27 lakhs earned.

AUDITORS:

M. Anandam & Co., Chartered Accountants retires as Auditors in this Annual General Meeting and are eligible for reappointment.

COMPANY SECRETARY CERTIFICATE:

Secretarial Compliance Certificate issued by a practicing Company Secretary is annexed to this report.

INFORMATION REQUIRED TO BE DISCLOSED UNDER CLAUSE 43A OF THE LISTING AGREEMENT:

The Shares of the Company are listed on:

1. The Bombay Stock Exchange Limited, (BSE) Phiroze Jeejeebhoy Towers, Dalai Street, Mumbai - 400 001.

2. The Calcutta Stock Exchange Association Limited (CSE)

# 7, Lyons Range, Kolkata-700 001.

The Listing fees for the year 2008-2009 have been paid to all the above-mentioned Stock Exchanges.

ACKNOWLEDGEMENTS:

Your Directors place on record their sincere gratitude to Canara Bank, Syndicate Bank, Lakshmi Vilas Bank Limited and Union Bank of India for their financial support extended to the Company. Your Directors place on record their appreciation of the continued patronage of dealers, customers, suppliers, employees and shareholders, extended to the Company.

For and on behalf of the Board of Directors

Place : Secunderabad H. NARSAIAH

Date : 30.06.2009 Chairman

 
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