Mar 31, 2015
Dear members,
The Directors present the TENTH Annual Report together with the
Audited Statement of Accounts for the year ended 31st March, 2015
FINANCIAL RESULTS
(Rs in lacs)
PARTICULARS Year Ended
31.03.2015 31.03.2014
REVENUE
Income from operations 18598 28612
Other income 73 62
Changes in Inventories 758 (143)
Total 19429 28531
EXPENSES
a) Cost of materials 12655 19793
b) Employee benefits expense 2580 2443
c) Other expenses 3095 4001
Total 18330 26237
OPERATING PROFIT 1099 2294
Finance Costs 1089 1290
PROFIT/(LOSS) BEFORE DEPRECIATION, 10 1004
AMORTISATION & TAX EXPENSES
Depreciation and Amortisation Expenses 457 611
PROFIT/(LOSS) BEFORE TAX (447) 393
Tax Expenses
a) Current Tax (MAT) - 78
b) MAT credit entitlement - (78)
c) Deferred Taxation 141 197
PROFIT/(LOSS) AFTER TAX (306) 196
DIVIDEND
As explained in detail under performance review, your company has
incurred loss for the year and hence the Board is unable to recommend a
dividend for the financial year ended 31st March, 2015.
PERFORMANCE REVIEW
The Indian Textile Industry performed reasonably well during the fiscal
year 2013-14 and continued the trend in the first two quarters of
2014-15 also. But, from the 3rd quarter of 2014-15, the industry went
into tailspin due to a number of factors. One of the major causes was
crash in the raw material prices globally by almost 50% and the Indian
cotton prices were no exception. Spinning Mills, specially Export
Oriented Mills like ours, who are obliged to carry several months
requirement of raw cotton for quality reasons incurred substantial
value losses on such inventories. The other important factor was
significant changes in Chinese procurement policies and substantial
reduction in Chinese import of cotton yarn. Consequently, yarn prices
also fell significantly leading to lack of parity between cotton and
cotton yarn prices. The cotton yarn exports from India into China also
dropped by nearly 23%. These factors had a bearish effect on both
demand and sales realization resulting in the mills carrying large
unsold inventories and incurring losses. Moreover, the situation in
respect of fine and superfine yarns which are our company's main
product lines continues to suffer from both lack of demand and sales
realization which is below the cost of production. Salaries & Wages
continued to rise during the year besides hike in power cost, thereby
rendering the cost of manufacturing prohibitive.
Your company's total revenues sharply came down to Rs.186.71 crores
from Rs.286.74 crores in the previous year due to substantial reduction
in exports of outsourced yarns for reasons mentioned above. The
operating profit came down to Rs.10.99 crores from Rs.22.94 crores in
the previous year. After meeting finance cost of Rs.10.89 crores, the
profit before depreciation, amortization and tax expenses was at Rs.10
lacs only and net loss after provision of depreciation and deferred
taxation at Rs.3.06 crores.
As regards performance of Aluva Unit in the current year, your
Directors regret to inform that it continues to incur substantial
losses. As already informed, ever rising high cost of salaries and
wages as compared to industry norms has resulted in an unviable and
untenable situation. To ensure survival of this unit, it is imperative
that these costs are brought down to be at par with the industry.
CORPORATE GOVERNANCE REPORT, MANAGEMENT DISCUSSION AND ANALYSIS AND
OTHER INFORMATION REQUIRED UNDER THE COMPANIES ACT, 2013 AND LISTING
AGREEMENT
As per Clause 49 of the Listing Agreement entered into with the Stock
Exchanges, Corporate Governance Report with Auditors Certificate
thereon and Management Discussion and Analysis are attached and form
part of this report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134 (5) of the Act, and based on
the representations received from the management, the directors hereby
confirm that :
i) In the preparation of the annual accounts for the financial year
2014-15, the applicable accounting standards have been followed and
there are no material departures;
ii) they 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 loss of the
company for the financial year.
iii) they 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 Act. They confirm that
there are adequate systems and controls for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities.
iv) they have prepared the annual accounts on a going concern basis.
v) they have laid down internal financial controls to be followed by
the company and that such internal financial controls are adequate and
operating effectively; and
vi) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, in accordance with the provisions of the
Companies Act, 2013 and Company's Articles of Association, Shri Mahesh
C Thakker retires by rotation at the ensuing Annual General Meeting
and, being eligible, offer himself for reappointment.
The Board recommends the same for your approval.
Smt. Pamela Anna Mathew has been inducted as an Additional Director
effective from 17.03.2015 and hold office only up to the date of
forthcoming Annual General Meeting of the company. Based on the
recommendation of Nomination and Remuneration Committee, the Board
recommends and seeks shareholders approval for appointment of Smt.
Pamela Anna Mathew as an Independent Director for a period of 5 years.
Pursuant to the provisions of Section 203 of the Act, the appointment
of Shri. B.K Patodia, Chairman and Managing Director,Shri. A.K.
Warerkar Chief Financial Officer and Shri. E.K Balakrishnan, Company
Secretary were formalized by the Board at its meeting held on 15.5.2014
as the Key Managerial Personnel of the Company.
AUDITORS AND SECRETARIAL AUDIT
Pursuant to the provisions of Section 139 of the Companies Act, 2013
and the rules framed thereunder, M/s. M S Jagannathan & Visvanathan,
Chartered Accountants, Coimbatore, were appointed as Statutory Auditors
of the Company from the conclusion of the 9th Annual General Meeting
(AGM) of the Company held on 19th September, 2014 till the conclusion
of the 12th Annual General Meeting to be held in the year 2017, subject
to ratification of their appointment at every AGM
Further, pursuant to the provisions of Section 204 of the Companies
Act, 2013 and rules made thereunder, the Company has appointed Shri.
MRL Narasimha, Company Secretary in Practice to undertake the
Secretarial Audit of the Company. The same is attached as Annexure I
and forms an integral part of this Report
There are no disqualification, reservations or adverse remarks or
disclaimers in the Auditors and Secretarial Auditors Report
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information required under section 134 (3) (m) of the Companies Act,
2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given
in the Annexure II forming part of this report
CORPORATE SOCIAL RESPONSIBILITY
Even though the provisions of Companies Act, 2013 regarding Corporate
Social Responsibility are not attracted to the Company yet the company
has been, over the years, pursuing as part of its corporate philosophy,
an unwritten CSR policy voluntarily which goes much beyond mere
philanthropic gestures and integrates interest, welfare and aspirations
of the community with those of the Company itself in an environment of
partnership for inclusive development
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, a structured questionnaire was prepared after
taking into consideration of the various aspects of the Board's
functioning, composition of the Board and its Committees, culture,
execution and performance of specific duties obligations and
governance.
The performance evaluation of the Independent Directors was completed.
The performance evaluation of the Chairman and the Non Independent
Directors was carried out by the Independent Directors. The Board of
Directors expressed their satisfaction with the evaluation process.
FAMILIRISATION PROGRAMME FOR DIRECTORS
At the time of appointing a Director, a formal letter of appointment is
given to him, which interalia explains the role, function, duties and
responsibilities expected of him as a Director of the Company. The
Director is also explained in detail the Compliance required from him
under the Companies Act, 2013, Clause 49 of the Listing Agreement and
other relevant regulations and affirmation taken with respect to the
same.
The Chairman along with the Management has also one to one discussion
with the newly appointed Director to familiarize with the company's
operations.
NUMBER OF MEETINGS OF THE BOARD
The details of the number of meetings of the Board held during the
Financial Year 2014-15, forms part of the Corporate Governance Report
INDEPENDENT DIRECTORS DECLARATION
The Non Executive Independent Directors fulfill the conditions of
independence specified in Section 149 (6) of the Companies Act, 2013
and Rules made there under and meet with requirement of Clause 49 of
the Listing Agreement entered into with the stock Exchanges. A formal
letter of appointment to Independent Director as provided in Companies
Act, 2013 and the Listing Agreement has been issued and disclosed on
the website of the Company viz. www.gtntextiles.com
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY
Details of loans, guarantees and Investments covered under the
provisions of Section 186 of the Companies Act, 2013 are given in the
Notes to Financial Statements
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a vigil mechanism / whistle Blower policy for Directors
and employees to report genuine concerns or grievances. The Whistle
Blower policy has been posted on the website of the Company
(www.gtntextiles.com).
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an effective internal control and risk mitigation
system, which has consistently assessed and strengthened with standard
operating procedure. Audit Committee of the Board of Directors actively
reviews the adequacy and effectiveness of the internal control systems
and suggests improvements to strengthen the same.
The Audit Committee of the Board of Directors, statutory Auditors and
the Business Heads are periodically apprised of the internal audit
findings and corrective actions taken. To maintain its objectivity and
independence, the internal audit function reports to the Chairman of
the Audit Committee
RISK MANAGEMENT
The Risk Management is a very important part of business. The main aim
of risk management is to identify, monitor and take precautionary
measures in respect of the events that may pose risks for the business.
The Company is having a business risk management framework in place,
which defines the risk management approach of the company and includes
periodic review of such risks and mitigating controls and reporting
mechanism of such risks.
NOMINATION & REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a frame work
in relation to remuneration of Directors, Key Managerial Personnel and
Senior Management of the Company. This policy also lays down criteria
for selection and appointment of Board Members.
RELATED PARTY TRANSACTIONS
The transactions entered with related parties for the year under review
were on arm's length basis and in the ordinary course of business. The
disclosure under form AOC-2 for transactions with related party during
the year under review is attached as Annexure III.
The Company has developed a Related Party Transactions framework for
the purpose of identification and monitoring of such transaction.
A Statement giving details of Related party transactions are placed
before the Audit Committee as also to the Board for review and approval
on a quarterly basis.
DEPOSIT FROM PUBLIC
The Company has not accepted any deposits from public and as such no
amount on account of principal or interest on deposit from public was
outstanding as on the date of the Balance sheet
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in Form MGT-9 as per Section 92 (3) of the
Companies Act, 2013 and Rule 12 (1) of Companies (Management &
Administration) Rules, 2014 is annexed hereto as Annexure IV and forms
part of this report.
PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 134 (3) (q) OF THE
COMPANIES ACT, 2013 READ WITH RULE 5 (1) OF THE COMPANIES (APPOINTMENT
AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
The information required pursuant to Section 134 (3) (q) of the
Companies Act, 2013 read with Rule 5 (1) of The Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 in respect of
employees of the Company, will be provided upon request. In terms of
Section 136 of the Act, the Report and Accounts are being sent to the
Members and others entitled thereto, excluding the information on
employees' particulars which is available for inspection by the Members
at the Registered Office of the Company during business hours on
working days of the Company up to the date of the ensuing Annual
General Meeting. If any Member is interested in obtaining a copy
thereof, such Member may write to the Company in this regard
PERSONNEL & INDUSTRIAL RELATIONS
Industrial Relations were cordial and satisfactory. There were no
employees whose particulars are to be given in terms of Section
134(3)(q) of the companies Act,2013 read with Rule 5(2) and 5(3) of the
companies (Appointment and Remuneration of Managerial personnel) Rules,
2014
ACKNOWLEDGEMENT
Your Directors place on record their gratitude to Central Bank of
India, State Bank of India, Export-Import Bank of India, State Bank of
Travancore, Bank of India and Axis Bank Limited and the concerned
Departments of the State and Central Government, valuable customer,
Employees and Shareholders for their assistance, support and
co-operation to the Company.
For and on behalf of the Board
Place : Kochi, B.K PATODIA
Date : 27.5.2015 Chairman
Mar 31, 2014
To the Members,
The Directors present the NINTH Annual Report together with the
Audited Statement of Accounts for the year ended 31st March, 2014.
FINANCIAL RESULTS
(Rs in lacs)
PARTICULARS Year Ended Year Ended
31.03.2014 31.03.2013
REVENUE
Revenue from operations 28612 20939
Other income 62 35
Changes in Inventories (143) (168)
Total 28531 20806
EXPENSES
a) Cost of materials 19793 14071
b) Employee benefits expense 2443 2179
c) Other expenses 4001 3354
Total 26237 19604
OPERATING PROFIT 2294 1202
Finance Costs 1291 1072
PROFIT / (LOSS) BEFORE DEPRECIATION, 1003 130
AMORTISATION & TAX EXPENSES
Depreciation and Amortization Expenses 611 628
PROFIT/(LOSS) BEFORE TAX 392 (498)
Tax Expenses
a) Current Tax (MAT) 78 -
b) MAT Credit Entitlement (78) -
b) Deferred Tax Charge / (Credit) 197 (142)
PROFIT/(LOSS) AFTER TAX 195 (356)
DIVIDEND
In view of accumulated losses, your Directors regret their inability to
recommend dividend for the financial year ended 31st March, 2014.
PERFORMANCE REVIEW
As mentioned in the last year''s Directors report there has been steady
demand recovery in textile business from second half of FY 2012-13,
both in international as well as domestic market. Accordingly, the year
under review witnessed overall improvement in performance of your
company, with sales, operating margin and cash profit reporting
substantial increase. Exports of the Company showed handsome increase
of 66% over previous year to Rs. 179 crores, significant part of which
came from outsourced yarn business. Amongst various importing
countries, demand from China was main factor leading to export led
growth of the industry. However, of late, exports to China have been
showing a declining trend for various reasons including uncertainty
over cotton stocking policies of that country, which has direct impact
on our export prices.
Total income during the year was substantially higher at Rs. 285.31
crores as against Rs. 208.06 crores of the previous year. While
Operating profit increased to Rs. 22.94 crores from Rs. 12.02 crores,
cash profit stood at Rs. 10.03 crores as compared to Rs. 1.30 crores.
After charging depreciation of Rs. 6.11 crores, the profit before tax
was at Rs. 3.92 crores as against a loss of Rs. 4.98 crores in previous
year. After provision for deferred Tax of Rs. 1.97 crores, the Net
profit was at Rs. 1.95 crores in comparison to previous year''s Net Loss
of Rs. 3.56 crores.
As mentioned earlier, there are signs of slowdown in exports, besides
pressure on domestic prices. Other areas of concern are continued high
cost of salaries and wages as compared to Industry norms and ever
rising cost of power in Kerala. Under the circumstances, your company
will have to strive hard to maintain the current level of performance
during current financial year.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, your Directors confirm that:-
(a) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures;
(b) appropriate accounting policies have been selected and applied them
consistently and have made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of your Company at the end of the financial year and of the profit of
the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of your Company and
for preventing and detecting fraud and other irregularities.
(d) The annual accounts have been prepared on a going concern basis.
CORPORATE GOVERNANCE REPORT AND
MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT
Your Directors affirm their commitments to the Corporate Governance
Standards prescribed by the Securities and Exchange Board of India
(SEBI).
A Report on Corporate Governance with Management Discussion and
Analysis as required under Clause 49 of the Listing Agreement is
attached.
FIXED DEPOSITS
The company had no unclaimed deposits outstanding as at the close of
the financial year.
DIRECTORS
Pursuant to Section 149 of the Companies Act, 2013, the Board at its
meeting held on 30th July, 2014 recommended appointment of Shri. B. L.
Singhal, Shri. Prem Malik, and Shri. S. Sundareshan as Independent
Directors of the Company not liable to retire by rotation for a period
of 5 years from the date of its 9th Annual General Meeting subject to
approval of the members of the Company. These directors have given the
declaration to the Board that they meet the criteria of Independence as
provided under section 149 (6) of the said Act and also confirm that
they will abide by the provisions as mentioned in Schedule IV of the
Companies Act, 2013. The Board recommends the Resolutions for your
approval for the above appointments.
Shri CD. Thakker, has resigned from the Board effective from 10.10.2013
due to personal reasons. He has served as Director of the Company for a
very long period of 25 years, including erstwhile GTN Textiles Limited.
The Board places on record its profound appreciation for his valuable
contribution as a Director of the Company.
Shri Mahesh C Thakker has been inducted as an Additional Director
effective from 31.10.2013. The Board recommends and seeks shareholders
approval for appointment of Shri. Mahesh C Thakker, whose period of
office is liable to determination by retirement of Directors by
rotation.
Shri N.K. Bafna and Shri R. Rajagopalan, Directors have resigned from
the Board effective from 31.7.2014 for personal reasons.
Shri N.K. Bafna has joined the Board of the Company effective from
15.5.2008 and was member of "Audit Committee", "Stakeholders
Relationship Committee" and "Nomination and Remuneration Committee" of
the Board of Directors.
Shri R. Rajagopalan, has joined the Board of the Company effective from
31.7.2002 (erstwhile GTN Textiles Limited). He was Chairman of
"Stakeholders Relationship Committee" and member of "Audit Committee
and "Nomination and Remuneration Committee" of the Board of Directors".
The Board places on record its profound appreciation to Shri N.K. Bafna
and Shri R. Rajagopalan for their valuable contributions as Independent
Directors.
AUDITORS
M/s. M S Jagannathan & Visvanathan, Chartered Accountants, Coimbatore,
who are the Statutory Auditors of the Company, hold office till the
conclusion of the forthcoming AGM and are eligible for reappointment.
Pursuant to the provisions of Section 139 of the Companies Act, 2013
and the Rules framed thereunder, it is proposed to appoint M/s. MS
Jagannathan & Visvanathan, Chartered Accountants as Statutory Auditors
of the Company from the conclusion of the forthcoming AGM till the
conclusion of the 12th AGM to be held in the year 2017, subject to
ratification of their appointment at every AGM.
PERSONNEL & INDUSTRIAL RELATIONS
Industrial Relations were cordial and satisfactory. There were no
employees whose particulars are to be given in terms of section 217
(2A) of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Amendment Rules, 2011 dated 31st March, 2011.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information required under Section 217(1)(e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988, are set out in Annexure,
attached hereto and forms part of this report.
ACKNOWLEDGEMENT
Your Directors place on record their gratitude to Central Bank of
India, State Bank of India, Export-Import Bank of India, State Bank of
Travancore, Bank of India and Axis Bank Limited and the concerned
Departments of the State and Central Government, Valuable customers
Employees and Shareholders for their assistance, support and
co-operation to the Company.
For and on behalf of the Board
Place : Kochi, B. K. PATODIA
Date : 30th July, 2014 Chairman
Mar 31, 2013
To the Members,
The Directors present the EIGHTH Annual Report together with the
Audited Statements of Account for the year ended 31st March, 2013.
FINANCIAL RESULTS
(Rs in lacs)
PARTICULARS Year Ended Year Ended
31.03.2013 31.03.2012
REVENUE
Revenue from operations 20939 14012
Other income 35 39
Changes in Inventories (168) 1014
Total 20806 15065
EXPENSES
a) Cost of materials 14071 9409
b) Employee benefits expense 2179 2054
c) Other expenses 3354 2668
Total 19604 14131
OPERATING PROFIT 1202 934
Finance Costs 1072 951
PROFIT / (LOSS) BEFORE
DEPRECIATION, 130 (17)
AMORTISATION & TAX
EXPENSES
Depreciation and Amortization Expenses 628 632
PROFIT/(LOSS) BEFORE TAX
(498) (649) Tax Expenses
a) Current Tax (MAT)
b) Deferred Tax (142) (206)
PROFIT/(LOSS) AFTER TAX (356) (443)
DIVIDEND
As explained in detail under Performance Review, your Company has
incurred loss for the year under review, and hence the Board is unable
to recommend a Dividend.
PERFORMANCE REVIEW
Last five years beginning from 2008-09 have been the most challenging
period in the history of Indian Textile Industry, which faced
multiplicity of adverse factors. Barring the year 2010-11 which
reported exceptional recovery, rest of the period was mired in
adversities arising from global meltdown, continued slowdown in
advanced economies and weakening economic growth in India as well as
other developing countries. Business related and political factors also
took heavy toll on recovery of the textile industry which witnessed
severe power constraints, rising interest rates, wide currency
fluctuations, besides considerable mismatch in input/output costs
resulting from faulty Government Polices relating to export of cotton
and cotton yarn.
The first half of the financial year 2012-13 continued to be
affected from some of the above adverse factors, but from the second
half of the financial year there was distinct improvement. The
Government had announced series of policy measures which included
un-hindered export of cotton yarn, continuation of Textile Upgradation
Fund Scheme and announcement of Foreign Trade Policy which had many
positive features for the textile industry including incentive for
incremental exports. Simultaneously demand for cotton yarn has also
improved significantly. China became one of the major importers of
cotton yarn from India.
The cotton crop at 34 Million bales was also satisfactory to take care
of indigenous consumption and yet leave a sizable exportable surplus.
The prices of raw cotton which in the beginning of the crop were lower
have since settled down at reasonable levels. During the period under
review, 8400 spindles were converted to compact technology, thereby
taking the compact capacity to 34,896 spindles out of total capacity of
58,864 spindles.
In the year under review, your Company continued its thrust by
undertaking outsourced yarn exports to improve both the top line and
the margins. This resulted in the total revenue of the Company going
upto Rs.209 crores as against Rs.140 crores in the previous year. In
spite of increase in power tariff by 30% which resulted in higher power
cost of Rs.364 lacs, the Company could report a cash profit of Rs.130
lacs against cash loss of Rs.17 lacs in the previous year. The
operating profit went upto Rs.1202 lacs from Rs.934 lacs. At net
level, after charging depreciation of Rs.628 lacs, there is a loss of
Rs.498 lacs as against loss of Rs.649 lacs in the previous year.
Your Company is hopeful of maintaining the tempo of growth and achieve
better results in the current financial year. The areas of concern are
continued high cost of salaries & wages as compared to industry norms
and ever rising cost of power in Kerala.
PLEDGING OF SHARES
During the year under review, Patspin India Limited (PIL), has gone for
a Corporate Debt Restructuring proposal under the CDR system. Your
Company is the main promoter of PIL. The scheme has been approved by
CDR-EG, Mumbai and as per the approved scheme, your company has to
pledge 51% of its holdings in PIL, being 72,86,405 Equity Shares of Rs
10 each , in favour of PIL lenders. Accordingly, your Company has
created pledge on 14.05.2013 with the Monitoring Institution (MI) of
the CDR Scheme, viz. Central Bank of India.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, your Directors confirm that:- (a) in the preparation of the
annual accounts, the applicable accounting standards have been followed
and that there are no material departures;
(b) appropriate accounting policies have been selected and applied them
consistently and have made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of your Company at the end of the financial year and of the loss of the
Company for that period;
(c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of your Company and
for preventing and detecting fraud and other irregularities.
(d) the annual accounts have been prepared on a going concern basis.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS
STATEMENT
Your Directors affirm their commitments to the Corporate Governance
standards prescribed by the Securities and Exchange Board of India
(SEBI).
A Report on Corporate Governance with Management Discussion and
Analysis as required under Clause 49 of the Listing Agreement is
attached.
FIXED DEPOSITS
The Company had no unclaimed deposits outstanding as at the close of
the financial year.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956, and the
Company''s Articles of Association, Shri C.D Thakker and Shri N.K Bafna,
Directors, retire from Office by rotation and are eligible for
re-appointment.
STATUTORY AUDITORS
M/s. M S Jagannathan & Visvanathan, Chartered Accountants, Coimbatore,
Auditors of the Company will retire at the forthcoming Annual General
Meeting of the Company and being eligible, offer themselves for
re-appointment.
PERSONNEL & INDUSTRIAL RELATIONS
Industrial Relations were cordial and satisfactory. There were no
employees whose particulars are to be given in terms of section 217
(2A) of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Amendment Rules, 2011 dated 31st March, 2011.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information required under Section 217(1)(e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988, are set out in Annexure,
attached hereto and forms part of this Report.
ACKNOWLEDGEMENT
Your Directors place on record their gratitude to Central Bank of India
, State Bank of India, State Bank of Travancore, Bank of India , Axis
Bank Limited and Export-Import Bank of India and the concerned
Departments of the State and Central Government, valuable Customers,
Employees and Shareholders for their assistance, support and
co-operation to the Company.
For and on behalf of the Board
Place : Kochi, B.K PATODIA
Date : 30th May, 2013 Chairman
Mar 31, 2012
The Directors present the SEVENTH Annual Report together with the
Audited Statements of Account for the year ended 31st March, 2012.
FINANCIAL RESULTS
(Rs. in lacs)
Particulars Year ended
31.3.2012 31.3.2011
REVENUE
Revenue from operations 14012 14943
Other income 39 181
Changes in Inventories 1014 (48)
Total 15065 15076
EXPENSES
a) Cost of materials 9409 8726
b) Employee benefits expense 2054 1771
c) Other expenses 2668 2654
Total 14131 13151
OPERATING PROFIT 934 1925
Finance Costs 951 805
PROFIT (LOSS) BEFORE DEPRECIATION,
AMORTISATION & TAX EXPENSES (17) 1120
Depreciation and Amortisation Expenses 632 649
PROFIT/(LOSS) BEFORE TAX (649) 471
Tax Expenses
a) Current Tax (MAT) Ã Ã
b) Deferred Tax (206) 90
PROFIT/(LOSS) AFTER TAX (443) 381
DIVIDEND
As explained in detail under Performance Review, your company has
incurred loss for the year under review, and hence the Board is unable
to recommend a Dividend.
PERFORMANCE REVIEW
The textile industry has been facing a major challenge during the past
few years in coping up with uncertainties arising from unexpected
events led by external factors far beyond its control. The spinning
sector which recovered handsomely in 2010-11 after two years of
recession and adverse working, was once again plunged into yet another
crisis due to lopsided government policies in respect of exports of
cotton and cotton yarn, economic crisis in eurozone and consequent
demand recession. The Government suddenly suspended cotton yarn exports
from January to March 2011 which resulted in a huge piling up of yarn
inventory of over 500 million kgs with the Spinning Mills. Eventually
when this ill-timed ban was lifted in April 2011, there was a sudden
rush to liquidate the yarn stock at any price made from high-priced
cotton inventory. The above ban also resulted in international and
domestic cotton prices crashing from April 2011 and within a period of
3 months i.e by June 2011, the domestic cotton prices declined to
Rs.32,000 per candy for the Gujarat Shanker-6 variety from a peak of
65,000 per candy. Mills were saddled with holding high cost raw
material inventory and the yarn prices crashed due to reasons given
above, resulting in majority of the Spinning Units incurring cash
losses in FY 2011-12. Extreme volatility in the foreign exchange rates
also adversely affected the profitability.
Under the circumstances, while your company could maintain its total
revenue at Rs. 150.65 crores for the year as compared to Rs. 150.77
crores for the previous year, there was a cash loss of Rs.0.17 crores
as against cash profit of Rs.11.20 crores in the last year. As
explained earlier, unrealistically higher cotton procurement cost in
relation to subdued cotton yarn prices in the international as well as
local markets wiped out most of the operating margin. Power cost has
also been higher due to thermal surcharge levied by KSEB, besides
increase in manpower cost subsequent to settlement of long-term wage
agreement. After charging depreciation, at net level the company
incurred a loss of Rs. 6.49 crores as compared to a profit before tax
of Rs. 4.71 crores in the previous year.
To get over the crisis which are the direct result of lopsided
government policies, the industry is persuading the concerned ministry
to offer some fiscal concessions including moratorium in repayment of
term loan installments falling due in near future. Hence, for the
current year, we have to wait and watch for the situation to return to
normalcy.
MODERNISATION AND EXPANSION PLANS
During the year under review, your Board has implemented a
modernization and expansion project at a cost of Rs. 4.25 crores at its
facilities located at Aluva, Kerala under the Restructured Technology
Upgradation Fund Scheme (TUFS), Ministry of Textiles, Government of
India.
With this, the compact spindle capacity has been enhanced from 26496 to
34896, within the total installed capacity of 58,864 spindles.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, your Directors confirm that:-
(a) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures;
(b) appropriate accounting policies have been selected and applied them
consistently and have made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of your Company at the end of the financial year and of the profit of
the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of your Company and
for preventing and detecting fraud and other irregularities.
(d) The annual accounts have been prepared on a going concern basis.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS
STATEMENT
Your Directors affirm their commitments to the Corporate Governance
standards prescribed by the Securities and Exchange Board of India
(SEBI).
A Report on Corporate Governance with Management Discussion and
Analysis as required under Clause 49 of the Listing Agreement is
attached.
FIXED DEPOSITS
The Company had no unclaimed deposits outstanding as at the close of
the financial year.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956, and the
Company's Articles of Association, Shri B.L Singhal and Shri R.
Rajagopalan, Directors, retire from Office by rotation and are eligible
for re-appointment.
AUDITORS
M/s. M S Jagannathan & Visvanathan, Chartered Account- ants,
Coimbatore, Auditors of the Company will retire at the forthcoming
Annual General Meeting of the Company and being eligible, offer
themselves for re-appointment.
PERSONNEL & INDUSTRIAL RELATIONS
Industrial Relations were cordial and satisfactory. There were no
employees whose particulars are to be given in terms of section 217
(2A) of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Amendment Rules, 2011 dated 31st March, 2011.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information required under Section 217(1)(e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988, are set out in Annexure,
attached hereto and forms part of this Report.
ACKNOWLEDGEMENT
Your Directors place on record their gratitude to Central Bank of India
, State Bank of India, State Bank of Travancore, Bank of India , Axis
Bank Limited and Export-Import Bank of India and the concerned
Departments of the State and Central Government, valuable Customers,
Employees and Shareholders for their assistance, support and
co-operation to the Company.
For and on behalf of the Board
Place : Kochi, B. K. PATODIA
Date : 23rd May, 2012 Chairman
Mar 31, 2011
The Directors present the SIXTH Annual Report together with the
Audited Statements of Account for the year ended 31st March, 2011.
FINANCIAL RESULTS
(Rs. in lacs)
Particulars Year ended Year ended
31.3.2011 31.3.2010
INCOME
Net sales / Income from operations 14893 12305
Other Operating Income (Insurance Claim) 1 192
Other income 3 5
Variation in Stock (48) (987)
Total 14849 11515
EXPENDITURE
a) Cost of materials 8564 6411
b) Staff Cost 1771 1483
c) Power Cost 1172 1131
d) Other expenditure 1475 1373
Total 12982 10398
OPERATING PROFIT 1867 1117
Interest 747 760
Profit before depreciation and taxation 1120 357
Depreciation 649 678
PROFIT BEFORE TAX 471 (321)
Provision for current tax (MAT) Ã Ã
Provision for deferred tax 90 (103)
PROFIT AFTER TAX 381 (218)
Transfer from General Reserve à 218
Surplus Carried to Balance Sheet 381 Ã
DIVIDEND
Inspite of improved results, with a view to conserve available
resources, your Directors regret their inability to recommend dividend
for the financial year ended 31st March, 2011.
PERFORMANCE REVIEW
Your Directors are glad to report that performance of the Company
during the year has been impressive, led by strong demand from
international as well as domestic markets. Your Companys business was
adversely affected during 2008-09 global financial crisis. However, as
reported in the previous Directors Report, the Company witnessed
upswing in consumer demand for textile products from second half of
Fiscal 2009-10. This was possible as many of the global economies
progressed commendably, sooner than expected, leading to revival of
textile industry.
Total revenues of your company for the year increased to Rs.148.93
crores from Rs.123.05 crores. Operating Profit and Cash Profit improved
to Rs.18.67 crores and Rs.11.20 crores from Rs.11.17 crores and Rs.3.57
crores respectively in the previous year. At net level, there was a
remarkable turn around with Profit before Tax at Rs.4.71 crores as
against a loss of Rs.3.21 crores in the previous year. The year was
marked with excessive volatility in cotton prices which peaked to
historical high owing to shortfall in crop in many of the cotton
growing countries. However, your managements core competency in
procurement of cotton helped the Company in judicious and timely buying
of raw material. As a result, while the cotton cost could be averaged
out, margins could be improved through yarn prices which remained
higher in line with cotton prices. The performance could have been
still better but for loss of production during negotiation of long term
work load and wages agreement which was concluded with workmen during
January 2011.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, your Directors confirm that:-
(a) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures;
(b) appropriate accounting policies have been selected and applied them
consistently and have made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of your Company at the end of the financial year and of the profit of
the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of your Company and
for preventing and detecting fraud and other irregularities.
(d) The annual accounts have been prepared on a going concern basis.
CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS
STATEMENT
Your Directors affirm their commitments to the Corporate Governance
standards prescribed by the Securities and Exchange Board of India
(SEBI).
A Report on Corporate Governance with Management Discussion and
Analysis as required under Clause 49 of the Listing Agreement is
attached.
FIXED DEPOSITS
The Company had no unclaimed deposits outstanding as at the close of
the financial year.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956, and the
Companys Articles of Association, Shri N.K. Bafna and Shri Prem
Malik, Directors, retire from Office by rotation and are eligible for
re-appointment.
AUDITORS
M/s. M S Jagannathan & Visvanathan, Chartered Accountants, Coimbatore,
Auditors of the Company will retire at the forthcoming Annual General
Meeting of the Company and being eligible, offer themselves for
re-appointment.
PERSONNEL & INDUSTRIAL RELATIONS
Industrial Relations were cordial and satisfactory. There were no
employees whose particulars are to be given in terms of Section 217
(2A) of the Companies Act, 1956 read with the Companies (Particulars of
Employees) Amendment Rules, 2011 dated 31st March, 2011.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information required under Section 217(1)(e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988, are set out in Annexure,
attached hereto and forms part of this Report.
ACKNOWLEDGEMENT
Your Directors place on record their gratitude to Central Bank of India
, State Bank of India, State Bank of Travancore, Bank of India, Axis
Bank Limited and Export-Import Bank of India and the concerned
Departments of the State and Central Government, valuable Customers,
Employees and Shareholders for their assistance, support and
co-operation to the Company.
For and on behalf of the Board
B.K PATODIA
Chairman
Place : Kochi,
Date : 10th May, 2011
Mar 31, 2010
The Directors present the FIFTH Annual Report together with the
Audited Statements of Account for the year ended 31st March, 2010.
FINANCIAL RESULTS
(Rs. in lacs)
Year ended Year ended 31.3.2010 31.3.2009
INCOME
Net sales / Income from operations 12305 9819
Other operating income (Insurance Claim) 192 -
Other income 9 4
Variation in Stock (987) 283
Total 11519 10106
EXPENDITURE
a) Cost of materials 6411 5452
b) Staff Cost 1483 1381
c) Power Cost 1131 1092
d) Other expenditure 1379 2098
Total 10404 10023
OPERATING PROFIT 1115 83
Interest 758 743
Proft before depreciation and taxation 357 (660)
Depreciation 678 686
PROFIT BEFORE TAX (321) (1346)
Provision for current tax - -
Provision for deferred tax (103) (327)
Provision for Fringe beneft tax - 15
PROFIT AFTER TAX (218) (1034)
Balance brought forward from previous - 387
year
Transfer from General Reserve 218 647
Proft /loss available for appropriations - -
DIVIDEND
As explained in detail under Performance Review, your company has
incurred loss for the year under review, and hence the Board is unable
to recommend a Dividend.
PERFORMANCE REVIEW
The adverse effect of the global fnancial crisis, which impacted most
of the advanced economies of the world, spilled over in the year under
review. As such, the operational performance
of your company continued to be affected during the frst half of the
year. However, from the third quarter there was a revival in demand for
textile products, leading to slow but defnite improvement in capacity
utilization and fnancial performance of your company, in the second
half of the year. As a result, the turnover has substantially increased
to Rs.123.05 crores as compared to Rs.98.19 crores of the previous
year. Consequently, there has been a total turnaround from a meager
operating proft of Rs.0.83 crores to Rs.11.15 crores in the year under
review. However, due to the adverse working of the company during frst
half of the year as mentioned earlier, the year under review still
ended with substantially lower loss at Rs.3.21 crores as against
Rs.13.46 crores in the earlier year.
In the current fnancial year 2010-11, besides recovery in global
economic environment, domestic demand for textile products has been
very strong giving the much needed positive thrust to the textile
industry.
From 1st April 2010, Kerala State Electricity Board has put certain
restrictions on power consumption and also levied fuel surcharge, which
has led to increase in power cost. Besides, the government has done
away with certain incentives available to Textile Industry i.e. 7.67%
DEPB, 4% Duty Draw Back and 2% interest subvention. Inspite of above,
due to improved market conditions and higher sales realization, your
company is hopeful of showing better performance in the year 2010-11 as
well.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 217(2AA) of the Companies Act,
1956, your Directors confrm that:- (a) in the preparation of the annual
accounts, the applicable accounting standards have been followed and
that there are no material departures;
(b) they 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
your Company at the end of the fnancial year and of the proft of the
Company for that period;
(c) they have taken proper and suffcient care, for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of your Company and
for preventing and detecting fraud and other irregularities.
(d) they have prepared the annual accounts on a going concern basis.
CORPORATE GOVERNANCE
Your Directors affrm their commitments to the Corporate Governance
standards prescribed by the Securities and Exchange Board of India
(SEBI). A Report on Corporate Governance with Management Discussion and
Analysis as required under Clause 49 of the Listing Agreement is
attached.
FIXED DEPOSITS
The Company had no unclaimed deposits outstanding as at the close of
the fnancial year.
DIRECTORS
In accordance with the provisions of the Companies Act, 1956, and the
Companys Articles of Association, Shri R Rajagopalan and Shri C.D
Thakker , Directors, retire from Offce by rotation and are eligible for
re-appointment.
AUDITORS
M/s. M S Jagannathan & Visvanathan, Chartered Accountants, Coimbatore,
Auditors of the Company will retire at the forthcoming Annual General
Meeting of the Company and being eligible, offer themselves for
re-appointment.
PERSONNEL & INDUSTRIAL RELATIONS
Industrial Relations were cordial and satisfactory. A statement showing
the particulars of Employees referred to in sub section (2A) of Section
217 of the Companies Act, 1956 read with Companies (Particulars of
Employees) Rules, 1975 is given in Annexure I, forming Part of this
Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information required under Section 217(1)(e) of the Companies Act,
1956 read with Rule 2 of the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988, are set out in Annexure
II, attached hereto and forms part of this Report.
ACKNOWLEDGEMENT
Your Directors place on record their gratitude to Central Bank of India
, State Bank of India, State Bank of Travancore, Bank of India , Axis
Bank Limited, Export-Import Bank of India and IDBI Bank Limited and the
concerned Departments of the State and Central Government, valuable
Customers, Employees and Shareholders for their assistance, support and
co-operation to the Company.
For and on behalf of the Board
B K PATODIA
Chairman
Place : Kochi,
Date : 13th May, 2010