Mar 31, 2010
The Directors submit the 50th Annual Report of the Company along with the Audited Statement of Accounts for the year ended 31st March, 2010.
1. FINANCIAL RESULTS:
(Rupees in Lacs)
Gross Profit before
interest & depreciation 3,071.39 3,197.98
Interest 2,267.96 2,736.36
Depreciation * 2,227.88 1,943.43
Operating Profit/(Loss) (1,424.45) (1,481.81)
Profit/(Loss) before tax (1,426.56) (1,486.89)
Excess Provision of earlier years (5.90) -
Provision for Fringe benefit tax - 23.00
Provision for wealth-tax 2.50 2.00
Deferred Tax Adjustment (36.29) (575.36)
Provision for taxation - -
Profit/(Loss) after tax - (1,386.87) (936.53)
Balance of Profit brought
forward from previous year 1,255.82 2,192.35
Balance carried to Balance Sheet (131.05) 1,255.82
Your Directors do not recommend any dividend for the year under review due to the fosses suffered by the Company.
The turnover of the company during the year ended 31st March 2010 was Rs. 414.34 Crores compared with Rs. 423.14 Crores during the previous year. This marginal fall in turnover was mainly due to reduction in excise duty applicable during 2009-10. Fibre business showed better realization per kg due to the companys continued thrust in colour / speciality fibres. Polymer business showed over 17% growth in volume due to marginal recovery of global economy and improved domestic markets.
The company suffered an operating loss of Rs. 14.24 crores compared with Rs. 14.82 crores during the previous year. Interest burden was less at Rs.22.68
crores (previous year Rs.27.36 crores) due to better working capital management and reduction in borrowing. The cost of power increased substantially compared with previous year due to continuous power cut in the state of Tamilnadu forcing the company to buy power from third parties at a higher cost.
The Net loss for the year stood at Rs.13.87 Crores against Rs.9.37 crores of previous year.
Polyester Staple Fibre business continues to be steady due to the companys thrust on speciality products. Exports did suffer due to lack of orders. Domestic demand however, resulted in better realization.
Polyester resin segment showed substantial increase in volumes of over 17% compared to previous year, predominantly in the domestic market. Exports too showed.marginal increase of 10% due to improved signs of moderate recovery in the global economy.
The company is confident to meet the challenges posed by both commodity and speciality players by its continued thrust on development of niche and specialty products.
Preform division showed reduction in volume due to increased tolling contract resorted to MNCs as well as the companys thrust in reducing its dependence on commodity performs.
Biomass and heater project commenced in 2007-08 continues to help the company in cutting the cost of steam generation and thermic fluid heating.
The companys initiative on cost reduction of utilities, efforts on Safety, Health and environment and human resources development and training are on track.
4. RIGHTS ISSUE OF EQUITY SHARES:
The Board of Directors of the Company decided not to proceed with the proposed Rights Issue of Equity shares due to unfavourable market conditions. However, the promoters have brought in substantial funds to finance Companys needs.
5 FIXED DEPOSITS AND LOANS:
As on 31st March, 2010, the Company had an aggregate sum of Rs.425.79 lacs as fixed deposits from Public / Shareholders, The total number of depositors who have not claimed / renewed their . deposits on maturity was 74 and the amount that remained unclaimed / not renewed as on 31st March, 2010 was Rs. 13,49,000/-; of these, deposits amounting to Rs. 1.06 lacs have since been either repaid or / renewed.
Adequate insurance cover.has been provided for the buildings, plant and machinery and Inventories at the factory of the Company.
7. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:
The particulars prescribed by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are furnished in the Annexure to this report.
In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees are set out in the annexure to the Directors Report. However, having regard to the provisions of Section 219(l)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company.
9. INDUSTRIAL RELATIONS:
Industrial relations remained by and large cordial throughout the year. The Directors wish to place on record their appreciation for the co-operation extended by the workmen, staff and officers at all levels.
Mr. K. V. K. Murthy, Director is retiring by rotation at the forthcoming Annul General Meeting and being eligible offers himself for reappointment. A brief profile of Mr. K.V.K. Murthy is given in the* explanatory statement annexured to the Notice of the Annual General Meeting.
Mr. Viren Raheja is, retiring by rotation, but is not seeking re-election. It is not proposed to fill this vacancy.
11. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to requirements under Section 217(2AA) of the Companies Act, 1956 ("the Act") with respect to Directors Responsibility Statement, it is hereby confirmed that:-
1. In preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure.
2. the Directors had selected such accounting policies and applied them consistently and made judgements 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 31st March, 2010 and of the loss of the Company for the year ended on that date.
3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
4. The Directors have prepared the annual accounts on a going-concern basis.
You are requested to appoint auditors for the current year. M/s. N.M. Raiji & Co., Chartered Accountants, who retire at the ensuing Annual General Meeting, are eligible for reappointment.
13. COST AUDITOR:
The Central Government had directed that audit be carried out of the Cost Accounts maintained by the Company in respect of Polyesters by a qualified Cost Accountant. The Directors, subject to the approval of the Central Government, have appointed Mr. M. Krishnaswamy of Chennai as Cost Auditor. Ã
14. CORPORATE GOVERNANCE;
As required under Clause 49 of the Listing Agreement with the Bombay Stock Exchange Limited, Corporate Governance and Management
Discussion and Analysis Report annexed to this report, form part of this Annual Report.
15. COMPLIANCE CERTIFICATE:
A Certificate from the auditors of the Company regarding compliance of conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.
Your Directors place on record their appreciation for the continuous support received from the Shareholders. Your Directors also express thpir appreciation for the assistance and co-operation received from the Governments at the Centre as well as the States, local authorities, Financial Institutions and Banks and employees of the Company during the period under review.
For and on behalf of the Board
Place: Mumbai S. B. GHIA
Date: 11th August, 2010 Chairman