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Directors Report of Kanco Enterprises Ltd.

Sep 30, 2014

Dear Shareholders,

The Directors present their Twenty Fourth Annual Report and Audited accounts for the year ended 30th September, 2014.

FINANCIALS

Your Company''s financial performance was as follows : Rs./lacs

Particulars 30.09.2014 30.09.2013

Profit before Interest, Depreciation and Tax 318.61 1195.88

Less: Interest 930.81 920.16

Gross Profit/ (Loss) for the Year (612.20) 275.72

Less: Depreciation 373.32 386.66

Profit/(Loss) Before Tax (985.52) (110.94)

Less : Provision for Tax - -

Profit / (Loss) After Taxation (985.52) (110.94)

Balance Brought Forward from last Account (6645.49) (6534.55)

Balance Carried to Balance Sheet (7631.01) (6645.49)



DIVIDEND

The Directors of your Company do not recommend any dividend for the year under review.

OPERATIONS

Current year started with cotton prices ruling quite high and yarn prices were not able to keep pace with increase in raw material prices. In the second half of the year, the cotton prices started to decline and the future markets indicated further decline in cotton prices and this led to sentiments of extreme weakness resulting in decline of yarn prices. The yarn prices kept pace with the cotton prices in future market, rather than the current market prices which were higher. The incentives announced by various state governments has resulted in expansion and set up of new units, which have resulted in excess supply. These factors resulted in huge losses.

FINANCE

During the year under review, the long term borrowings and short term borrowings of the Company stands at ^434.35 Lakhs and ^5573.44 Lakhs respectively as on 30th September, 2014.

REFERENCE TO THE BOARD OF INDUSTRIAL AND FINANCIAL RECONSTRUCTION

The accumulated losses of the Company at the end of financial year September 30, 2014, have resulted in erosion of 100% of its peak net worth in the current year. The Company''s reference bearing no.06/2013 filed with Board for Industrial and Financial Reconstruction under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 for the year ended 30th September, 2012 is still pending and therefore the Board has decided not to file any fresh reference under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 in the current year.

The Company''s appeal under Section 25(1) of the Sick Industrial Companies (Special Provisions) Act,1985 against the order passed by the BIFR for reference no.3/2012 filed u/s 15(1) of the SICA,1985 on 13/01/2012 is in final hearing stage.

DIRECTORS

Mr. Susanta Banerjee(DIN:01173116), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Pursuant to Section 161 (1) of the Companies Act, 2013 and Article 82 of the Articles of Association of the Company, Ms. Puja Borar (DIN: 06873157), who was appointed as an Additional Director designated as an Independent Director with effect from 12th August 2014 and shall hold office up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing Ms. Puja Borar for appointment as an Independent Director.

As per the provisions of Section 149 and other applicable provisions of the Companies Act, 2013, Mr. Krishna Kumar Gupta (DIN: 06657407) and Ms. Puja Borar (DIN: 06873157), directors of the Company, are being appointed as Independent Directors for five consecutive years from the conclusion of this Annual General Meeting not liable to retire by rotation.

Subject to the approval of the shareholders in the general meeting and the Central Government, the Board of Directors on 29th November 2014 re-appointed Mr. Umang Kanoria (DIN: 00081108), as the Managing Director of the Company for a period of three years with effect from 1st January, 2015 on the terms and conditions agreed to by the Board of Directors and Mr. Umang Kanoria.

The Company has received declarations from the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and Clause 49 of the Listing Agreement. The Company has also received intimation in Form DIR-8 under Section 164(2) of the Companies Act, 2013 read with rules made thereunder from its Directors.

Necessary resolutions for the appointment/re-appointment of the aforesaid directors have been included in the notice convening the ensuing AGM and details of the proposal for appointment / re-appointment are mentioned in the explanatory statement of the notice.

Mr. Atul Doshi has tendered his resignation from the Directorship of the Company with effect from 27th November 2014, due to his preoccupation and inability to devote time to discharge his responsibilities. The Board of Directors in their meeting took note of the same and placed their appreciation of the valuable contribution made by him.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the Annual Accounts for the financial year ended 30th September, 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures.

(ii) they have selected such Accounting Policies and applied them consistently and made judgements and estimates that they 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 Financial Year and of the profit or loss of the Company for that period.

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

(iv) they have prepared the annual accounts for 30th September, 2014 on a going concern basis.

PUBLIC DEPOSITS

The Company did not accept any deposit under Section 58A of the Companies Act 1956, during the year under review.

AUDITORS & AUDITORS'' REPORT

Messrs B. R. Shah & Associates, Chartered Accountants, (Registration No. 129053W), retire at the ensuing Annual General Meeting and being eligible, have expressed their willingness to continue as Auditors of the Company, if so appointed by the members. Your Company has received the consent and certificate from Messrs. B. R. Shah & Associates, Chartered Accountants to the effect that their re-appointment if made, would be within the limits prescribed under the Section 141 of the Companies Act, 2013 read with rules and that they are not disqualified for reappointment within the meaning of Section 141 of the Companies Act 2013. They have also confirmed that they hold a valid peer review certificate as prescribed under Clause 41(1) (h) of the Listing Agreement.

The Auditors'' have qualified their Report and the explanation in this regard forms part of the Annexure to Directors'' Report.

COST AUDIT

The Cost Audit Report for the financial year ended 30th September 2013 was filed with the Ministry of Corporate Affairs on 13th March 2014, due date being 29th March 2014.

REPORTS ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT

Your Company has fully complied with the requirements of Clause 49 of the Listing Agreement regarding Corporate Governance. Report on Corporate Governance Practices, the Auditors'' Certificate on compliance of mandatory requirements thereof and Report on Management Discussion & Analysis Report are given as annexure and forms part of this report.

EMPLOYEE PARTICULARS

The particulars of employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rule 1975, as amended by Companies(Particulars of Employees)Amendment Rules 2011, are not applicable as no employee was in receipt of remuneration to the extent laid down in the said Rules.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and forms part of this Report.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the cooperation and support extended by the Employees, Banks/ Financial Institutions and all other business partners.

For and on behalf of the Board Kolkata, U. KANORIA November 29, 2014 Chairman & Mg. Director


Sep 30, 2013

The Directors present their Twenty Third Annual Report and Audited accounts for the year ended 30th September, 2013.

FINANCIALS

Your Company''s financial performance was as follows :

Rs./lacs

30.9.2013 30.9.2012

Profit/(Loss) Before Interest, Depreciation and Tax 1195.88 295.93

Less: Interest 920.16 911.11

Gross Profit/(Loss) for the year 275.72 (615.18)

Less: Depreciation 386.66 415.32

Profit/(Loss) Before Taxation (110.94) (1030.50)

Less : Provision for Tax

Profit/(Loss) After Taxation (110.94) (1030.50)

Balance Brought Forward from Last Account (6534.55) (5504.05)

Balance Carried to Balance Sheet (6645.49) (6534.55)

DIVIDEND

The Directors of your Company do not recommend any dividend for the year under review.

OPERATIONS

The Company started the year under review under severe financial stress due to unprecedented losses incurred in the previous accounting year. Yarn realisations improved marginally from an average of Rs. 182.93 in Sept, 2012 to 204.47 in Sept, 2013. Average Cotton prices increased from an average of Rs. 34,500/ per candy in the beginning of the season to £47,000/ per candy towards the end of season. Improvement in demand and higher realizations helped in curtailing the losses. The Company''s normal operation is severely affected by liquidity crunch faced by it.

FINANCE

During the year under review, the long term borrowings and short term borrowings of the Company stands at Rs. 434.35 Lakhs and Rs. 4618.93 Lakhs respectively as on 30th September, 2013.

REFERENCE TO THE BOARD OF INDUSTRIAL AND FINANCIAL RECONSTRUCTION

The accumulated losses of the Company at the end of financial year September 30, 2013, have resulted in erosion of 100% of its peak net worth in the current year. The Company''s reference bearing no.06/2013 filed with Board for Industrial and Financial Reconstruction under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 for the year ended 30th September, 2012 is still pending and therefore the Board has decided not to file any fresh reference under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 in the current year.

The Company''s appeal under Section 25(1) of the Sick Industrial Companies (Special Provisions) Act,1985 against the order passed by the BIFR for reference no.3/2012 filed u/s 15(1) of the SICA,1985 on 13/01/2012 is in final hearing stage.

DIRECTORS

Mr. Atul Doshi, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re appointment.

During the year under review, Mr. Susanta Banerjee and Mr. Krishna Kumar Gupta were appointed as Additional Directors of your Company with effect from 26th June 2013 and 13th August 2013 respectively. They shall hold office up to the date of the ensuing Annual General Meeting of your Company. Your Company has received individual notices from Members pursuant to Section 257 of the Companies Act, 1956, signifying their intention to propose the candidatures of Mr. Susanta Banerjee and Mr. Krishna Kumar Gupta for the office of Directors. The Board recommends their appointment as Directors of your Company.

Mr. Golam Momen, Mr. Pavan Kumar Poddar and Mr. Parag Keshar Bhattacharjee have tendered their resignations and the Board in their meeting took note of the same and placed their appreciation of the valuable contributions made by them.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

(i) in the preparation of the Annual Accounts for the financial year ended 30th September, 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures

(ii) they have selected such Accounting Policies and applied them consistently and made judgements and estimates that they 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 Financial Year and of the profit or loss of the Company for that period.

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; and

(iv) they have prepared the annual accounts for 30th September, 2013 on a going concern basis.

PUBLIC DEPOSITS

The Company did not accept any deposit under Section 58A of the Companies Act 1956, during the year under review.

AUDITORS & AUDITORS'' REPORT

Messrs B. R. Shah & Associates, Chartered Accountants, (Registration No. 129053W), Statutory Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept the office of Auditors, if re appointed. Your Company has received a confirmation from Messrs B. R. Shah & Associates, Chartered Accountants to the effect that their re appointment if made, would be within the limits prescribed under Section 224(1 B) of the Companies Act 1956 and that they are not disqualified for reappointment within the meaning of Section 226 of the Act. They have also confirmed that they hold a valid peer review certificate as prescribed under Clause 41 (1) (h) of the Listing Agreement.

The Auditors'' have qualified their Report and the explanation in this regard forms part of the Annexure to Directors'' Report.

COST AUDIT

As stipulated by the Central Government and pursuant to Section 233B of the Companies Act, 1956, Cost Audit of the records relating to the Textile Business of the Company is carried out from 1998 1999 onwards. Messrs N.D. Birla & Co., Cost Accountants, of A 3, Nirant Society, Opposite Town Hall, Near Karnavati Hospital, Ellisbridge, Ahmedabad 380 006 (Registration No. of the Firm : 000028) has been re appointed as the Cost Auditor of the Company to carry out the Cost Audit for the next financial year. The Cost Audit Report for the financial year ended 30th September 2012 was filed with the Ministry of Corporate Affairs on 4th March 2013, due date being 29th March 2013. REPORTS ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT Your Company has fully complied with the requirements of Clause 49 of the Listing Agreement regarding Corporate Governance. Report on Corporate Governance Practices, the Auditors'' Certificate on compliance of mandatory requirements thereof and Report on Management Discussion & Analysis Report are given as annexure and forms part of this report.

EMPLOYEE PARTICULARS

The particulars of employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees)Rule 1975, as amended by Companies (Particulars of Employees) Amendment Rules 2011, are not applicable as no employee was in receipt of remuneration to the extent laid down in the said Rules.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and forms part of this Report.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the cooperation and support extended by the Employees, Banks/ Financial Institutions and all other business partners.

For and on behalf of the Board

Kolkata, U. KANORIA November 27, 2013 Chairman


Sep 30, 2012

Dear Shareholders,

The Directors present their Twenty Second Annual Report and Audited Accounts for the year ended 30th September, 2012.

FINANCIALS

Your Company''s financial performance was as follows :

30.9.2012 30.9.2011 (Rs. in lacs) (Rs. in lacs) (12 Months) (6 Months)

Profit/(Loss)Before Interest,Depreciationand Tax 295.93 (1307.12)

Less: Interest 911.11 340.68

Gross Profit/(Loss) for the year ( 615.18) (1647.80)

Less: Depreciation 415.32 225.36

Profit/(Loss)Before Taxation (1030.50) (1873.16)

Less : Provision for -

Net Current Tax

Deferred Tax (1300.45)

Profit/(Loss) After Taxation (1030.50) (3173.61)

Balance Brought Forward from Last Account (5504.05) (2330.44)

Balance Carried to Balance Sheet (6534.55) (5504.05)

DIVIDEND

The Directors of your Company do not recommend any dividend for the year under review.

OPERATIONS

The Company started the year under review under severe financial stress due to unprecedented losses incurred in the previous accounting year. Yarn realisations improved marginally from an average of f 178.46 in Sept, 2011 to f 182.93 in Sept, 2012. Average Cotton prices declined from a high f 46,800/- per candy to f 36,300/- per candy. The decline in raw material prices and marginal improvement in yarn realisations helped in curtailing the losses. The improvement in demand helped in better capacity utilisation. The plant is working at full capacity. The Company expects further improvement in demand leading to improved operations.

FINANCE

During the year under review, the long term borrowings and short term borrowings of the Company stands at f 471.63 Lakhs and f 2628.98 Lakhs respectively as on 30th September, 2012.

REFERENCE TO THE BOARD OF INDUSTRIAL AND FINANCIAL RECONSTRUCTION

The accumulated losses of the Company at the end of financial year September 30, 2012, have resulted in erosion of 100% of its peak net worth in the current year. The Board of Directors have formed an opinion that the Company has become a sick industrial company and therefore the Company shall make a fresh reference to the Board for Industrial and Financial Reconstruction about such erosion of net worth as envisaged under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.

The Board of Directors have decided to prefer an appeal under Section 25(1) of the Sick Industrial Companies (Special Provisions) Act,1985 against the order passed by the BIFR for reference no.3/2012 filed u/s 15(1) of the SICA,1985 on 13.01.2012.

DIRECTORS

Mr. Parag Keshar Bhattacharjee and Mr. Pavan Kumar Poddar, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and are eligible for re-election.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors state that:

- Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended 30th September, 2012 have been followed in preparation of the said accounts.

- The Directors have followed the accounting policies as described in the Schedule 23 (Significant Accounting Policies and other Notes on Accounts) and applied them consistently to facilitate true and fair view of the state of affairs of the Company.

- Sufficient care has been taken to maintain accounting records of the Company.

- The statement of accounts has been prepared on a going concern basis.

AUDITORS

Messrs B. R. Shah & Associates, Chartered Accountants (Registration No.129053W), retire at the conclusion of the 22nd Annual General Meeting and being eligible, have expressed their willingness to continue as Auditors of the Company, if so re-appointed by the members.

COST AUDIT

As stipulated by the Central Government and pursuant to Section 233B of the Companies Act, 1956, Cost Audit of the records relating to the Textile Business of the Company is carried out from 1998-1999 onwards. Messrs N.D. Birla & Co., Cost Accountants, of A-3, Nirant Society, Opposite Town Hall, Near Karnavati Hospital, Ellisbridge, Ahmedabad 380 006, has been re-appointed as the Cost Auditor of the Company to carry out the Cost Audit for the next financial year.

EMPLOYEE PARTICULARS

The particulars of employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable as no employee was in receipt of remuneration to the extent laid down in the said Rules.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and forms part of this Report.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the cooperation and support extended by the Employees, Banks/ Financial Institutions and all other business partners.

For and on behalf of the Board

U. KANORIA

Kolkata, 29th

day of November, 2012 Chairman


Mar 31, 2011

Dear Shareholders,

The Directors present their Twentieth Annual Report and Audited Accounts for the year ended 31 st March, 2011.

FINANCIALS

Your Companys financial performance was as follows :

2010-2011 2009-2010 (Rs. in lacs) (Rs. in lacs) Profit Before Interest, Depreciation and Tax 1089.44 117.81

Less: Interest 575.78 570.89

Gross Profit/(Loss) for the year 513.66 (453.08)

Less: Depreciation 453.66 497.21

Profit/(Loss) Before Taxation 60.00 (950.29) Less : Provision for -

Net Current Tax - -

Deferred Tax 48.67 (13.53)

Profit/(Loss) After Taxation 11.33 (936.76)

Balance Brought Forward from Last Account (2341.77) (1405.01)

Balance Carried to Balance Sheet (2330.44) (2341.77)

DIVIDEND

The Directors of your Company do not recommend any dividend for the year under review.

OPERATIONS

The year started on a strong note with buoyant yarn prices. The Company achieved a turnover of Rs 11989.86 Lakhs for the financial year. Average sales realisation increased by 50.76%, as compared to a 46.14% increase in average raw-material cost.

The year has seen unprecedented increase in both raw material and yarn prices. Towards the end of the year, the Government imposed restrictions on yarn exports, as a result of which sales quantity declined by 14.46% to 55.96 lakhs Kgs. in 2010-11 from 65.42 lakhs Kgs. in 2009-10.

Cotton prices moved up throughout the year. Prices moved up by approximately 109% from Rs28,500/- per candy in April 2010 to Rs 59,600/- per candy in March 2011. However due to strong demand for Yarn, both in domestic as well as export markets and improved Yarn realisations the Company was able to post vastly improved results as compared to last year.

The current year has started on a weak note with the industry carrying large stocks on account of the restrictions imposed on export of cotton yarn in the last quarter of 2010-11. The restrictions on export of cotton yarn have now been lifted but with the large stocks being carried by the industry, there is pressure on prices. It is expected to take some time before this stock is liquidated and things return to normal. The current year looks difficult and trying for the industry.

FINANCE

During the year under review, the Company repaid installments of Term Loans amounting to Rs896.40 Lakhs, falling due during the current year. The Long Term Debt of the Company stands at Rs2923.65 Lakhs as on 31st March, 2011.

PREFERENTIAL ALLOTMENT OF SHARES

During the year under review, the Board of Directors of the Company allotted 25,00,000 equity shares of Rs10/- each for a premium of Rs10A per share, aggregating Rs5,00,00,000/- on 17th of August, 2010 on Preferential basis as per SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 .

REFERENCE TO THE BOARD OF INDUSTRIAL AND FINANCIAL RECONSTRUCTION

The accumulated losses of the Company at the end of financial year March 31, 2011 have resulted in erosion of more than 50 % of its peak net worth during the immediately preceding four financial years. While the Company is taking necessary steps to protect further erosion, the Company will report to the Board for Industrial and Financial Reconstruction about such erosion of net worth as envisaged under Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985 forthwith upon finalization of audited accounts of the Company at its Annual General Meeting.

DIRECTORS

Mr. Parag Keshar Bhattacharjee and Mr. Pavan Kumar Poddar, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and are eligible for re-election. During the year, Mr. G.R. Basotia has resigned from the directorship of the Company and Mr. Atul Doshi has been inducted as an Additional Director.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS

A separate report on Corporate Governance along with Auditors Certificate on its compliance is enclosed and forms part of this Report. Management Discussion and Analysis Report forms a part of the Annexure to the Directors Report.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors state that:

- Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended 31st March, 2011 have been followed in preparation of the said accounts.

- The Directors have followed the accounting policies as described in the Schedule 19 (Notes on Accounts) and applied them consistently to facilitate true and fair view of the state of affairs of the Company.

- Sufficient care has been taken to maintain accounting records of the Company.

- The statement of accounts has been prepared on a going concern basis.

AUDITORS

Messrs B. R. Shah & Associates, Chartered Accountants, retire at the conclusion of the 20th Annual General Meeting and being eligible, has expressed their willingness to continue as Auditors of the Company, if so appointed by the members.

COST AUDIT

As stipulated by the Central Government and pursuant to Section 233B of the Companies Act, 1956, Cost Audit of the records relating to the Textile Business of the Company is carried out from 1998-1999 onwards. Messrs N.D. Birla & Co., Cost Accountants, of A-3, Nirant Society, Opposite Town Hall, Near Karnavati Hospital, Ellisbridge, Ahmedabad - 380 006, has been appointed as the Cost Auditor of the Company to carry out the Cost Audit for the year 2011 -12.

EMPLOYEE PARTICULARS

The particulars of employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable as no employee was in receipt of remuneration to the extent laid down in the said Rules.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and forms part of this Report.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the cooperation and support extended by the Employees, Banks/ Financial Institutions and all other business partners.

For and on behalf of the Board

U. KANORIA Chairman

Kolkata, 13th day of May, 2011


Mar 31, 2010

The Directors present their Nineteenth Annual Report and Audited Accounts for the year ended 31st March, 2010.

FINANCIALS

Your Companys financial performance was as follows :

2009-2010 2008-2009 (Rs.in lacs) (Rs.in lacs)

Profit Before Interest, Depreciation and Tax 117.81 (3.23)

Less: Interest 570.89 614.89

Gross Profit for the year (453.08) (618.12)

Less: Depreciation 497.21 625.00

Profit/(Loss) Before Taxation (950.29) (1243.12)

Less : Provision for -

Net Current Tax - 0.84

Fringe Benefit Tax - 5.50

- 6.34

Add/Less: Deferred Tax 13.53 430.22

Profit/(Loss) After Taxation (936.76) (819.24)

Balance Brought Forward from Last Account (1405.01) (585.77)

Balance Carried to Balance Sheet (2341.77) (1405.01)

DIVIDEND

The Directors of your Company do not recommend any dividend for the year under review.

DEMERGER

During the year under review, the Honble High Court of judicature at Calcutta has approved the Scheme of Arrangement in the nature of De-merger of the Tea Division of the Company. Accordingly the Tea Division of the Company was de- merged and vested with Dhanvaridhi Concerns Limited (since renamed as Kanco Tea & Industries Limited). The appointed date for this de-merger was closing hours of 31st March, 2009. The shares of the resulting company shall be listed on the Stock Exchanges.

REFERENCE TO THE BOARD OF INDUSTRIAL AND FINANCIAL RECONSTRUCTION

The accumulated losses of the Company at the end of financial year March 31, 2010 have resulted in erosion of more than 50 % of its peak net worth during the immediately preceding four financial years. While the Company is taking necessary steps to protect further erosion, the Company will report to the Board for Industrial and Financial Reconstruction about such erosion of net worth as envisaged under Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985 forthwith upon finalization of audited accounts of the Company at its Annual General Meeting.

OPERATIONS

The First half of the year saw the industry facing difficult times. With the progress of the year, there was an improvement with last quarter of the year witnessing fairly strong revival. In view of improved working conditions, production of yarn, increased by 28.82% from 49.46 lakhs Kgs. in 2008-09 to 63.72 lakhs Kgs. in 2009-10. The sales quantity also registered improvement of 28.37% from 50.95 lakhs Kgs. in 2008-09 to 65.42 lakhs Kgs. in 2009-10. The Company achieved a turnover of Rs.9741.12 Lakhs for the financial year.

The Cotton prices remained firm with an upward trend right through the year. However, due to strong demand for yarn and improved realization in the second half of the year, the Company was able to curtail losses compared to the previous year.

The Industry is experiencing a revival of global demand coupled with declining inventory. It is expected that the strong demand and improved realisations will enable the Company to post vastly improved results in the current year.

FINANCE

During the year under review, the Company repaid installments of Term Loans amounting to Rs.534.45 Lakhs, falling due during the current year. The Company also made fresh borrowings of Rs.1195.00 Lakhs for funding working capital requirements. Long Term debts of the Company stands at Rs.3820.05 Lakhs. The Companys proposal for restructuring of its loans has been approved by State Bank of India.

DIRECTORS

Mr. Anil Kumar Jain and Mr. Golam Momen, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and are eligible for re-election.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS

A separate report on Corporate Governance along with Auditors Certificate on its compliance is enclosed and forms part of this Report. Management Discussion and Analysis Report forms a part of the Annexure to the Directors Report.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors state that:

Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended 31st March, 2010 have been followed in preparation of the said accounts.

. The Directors have followed the accounting policies as described in the Schedule 21 (Notes on Accounts) and applied them consistently to facilitate true and fair view of the state of affairs of the Company.

. Sufficient care has been taken to maintain accounting records of the Company.

. The statement of accounts has been prepared on a going concern basis.

AUDITORS

Messrs B. R. Shah & Associates, Chartered Accountants, retire at the conclusion of the 19th Annual General Meeting and being eligible, has expressed their willingness to continue as Auditors of the Company, if so appointed by the members.

COST AUDIT

As stipulated by the Central Government and pursuant to Section 233B of the Companies Act, 1956, Cost Audit of the records relating to the Textile Business of the Company is carried out from 1998-1999 onwards. Messrs N.D. Birla & Co., Cost Accountants, Ahmedabad, has been appointed as the Cost Auditor of the Company to carry out the Cost Audit for the year 2009-10.

EMPLOYEE PARTICULARS

The particulars of employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable as no employee was in receipt of remuneration to the extent laid down in the said Rules.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and forms part of this Report.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the cooperation and support extended by the Employees, Banks/ Financial Institutions and all other business partners.

For and on behalf of the Board

U. KANORIA

Chairman

Kolkata, 21 st day of June, 2010




Mar 31, 2009

The Directors present their Eighteenth Annual Report and Audited Accounts for the year ended 31 st March, 2009.

FINANCIALS

Your Companys financial performance was as follows :

2008-2009 2007-2008 (Rs. in lacs) (Rs. in lacs)

Profit Before Interest, Depreciation and Tax (3.23) 471.45

Less: Interest 614.89 593.01

Gross Profit for the year (618.12) (121.56)

Less: Depreciation 625.00 647.64

Profit Before Tax (1,243.12) (769.20) Less : Provision for -

Net Current Tax 0.84 0.22

Fringe Benefit Tax 5.50 8.63

Taxation for Earlier Years - 6.34 0.53 9.38

Add/Less: Deferred Tax 430.22 230.44

Add/Less: MAT Credit Entitlement - 430.22 - 230.44

Profit/(Loss) After Taxation (819.24) (548.14)

Balance Brought Forward from Last Account (585.77) (37.63)

Balance Carried to Balance Sheet (1,405.01) (585.77)

DIVIDEND

In view of loss, the Directors do not recommend any dividend for the year under review.

OPERATIONS

Your Company has achieved a turnover of Rs.9393.61 Lakhs for the financial year as against Rs.10038.15 Lakhs last year. Whilst North Indian Tea prices remained buoyant, there was no significant improvement in; yarn prices. Your Company has made good progress in creating a niche market for its tea. During the year, exports of the Companys textile unit were adversely affected mainly due to higher input costs, particularly raw material, power costs & interest costs and low demand due to global recession. However, the textile division of the Company is also showing1 signs of recovery. An increase in demand and efforts by your management are expected to produce improved: results in the near future.

Tea Division

Last year witnessed a strong demand for tea in the market and as such prices were buoyant. In line with the industry, your Companys tea division also benefited from the improved prices and better quality of tea produced by it. Inspite of loss of crop, the division reported better results due to improved average realization.

During the current year,the market is buoyant and tea prices have scaled new highs. The year shows a drop in production in all tea producing countries. North India too has experienced a drought. This has resulted in a shortage of supply, resulting in escalation of prices. With steps being taken to augment the availability of labour, better field practices, a buoyant market and firm prices, the outlook for the division looks favourable.

Textile Division

The division went through one of the worst years in recent history. The first half of the year saw cotton prices going through the roof due to unbridled exports of cotton in the 2007-08 season. The country reaped a bountiful crop for the 2008-09 cotton season, for second year in running. This generated optimism amongst spinners, however the increase in MSP (Minimum Support Price) of cotton by the Government resulted in domestic prices ruling higher than international prices. This adversely affected the industrys export competitiveness.

Average sales realisation increased by,7.73 %, the improvement was more than negated by increase in average raw- material cost by 15.52%. The continuously rising raw-material costs forced the division to impose voluntary production cut. About 70 days production was lost due to voluntary production cut and power cuts.

The division & the Industry are working on negative margins. However, in the recent past, there has been a moderate increase in demand and your management is hopeful this trend will continue and curtail the losses.

The focus of the management is on cost reduction and optimizing product mix to bring the operations back on rail.

FINANCE

During the year under review, the Company repaid the installment of Term Loans amounting to Rs.552.69 lakhs, falling due during the current year. The Company has also made fresh borrowings of Rs. 1125.84 lakhs for funding capital expenditure and other working capital requirements. Long term debts of the Company stands at Rs. 3803.52 Lakhs.

DIRECTORS

Mr. P.K. Bhattacharjee and Mr. Pavan Kumar Poddar, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and are eligible for re-election.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS

A separate report on Corporate Governance along with Auditors Certificate on its compliance is enclosed and forms part of this Report. Management Discussion and Analysis Report forms a part of the Annexure to the Directors Report.

DIRECTORS RESPONSIBILITY STATEMENT

- The Directors state that:

- Appropriate Accounting Standards as are applicable to the Annual Statement of Accounts for the financial year ended 31st March, 2009 have been followed in preparation of the said accounts.

- The Directors have followed the accounting policies as described in the Schedule 19 (Notes on Accounts) and applied them consistently to facilitate true and fair view of the state of affairs of the Company.

- Sufficient care has been taken to maintain accounting records of the Company.

- The statement of accounts has been prepared on a going concern basis.

FIXED DEPOSITS

The amount outstanding as on 31st March, 2009 on account of Fixed Deposits aggregating Rs. 59.35 lacs is yet to mature and all the deposits that matured during the year were repaid with interest due thereon and nothing remains unclaimed.

AUDITORS

Messrs Jain & Co., Chartered Accountants, Auditors of the Company has expressed their inability to continue as the Statutory Auditors of the Company and had since submitted their resignation. Messrs B. R. Shah & Associates, Chartered Accountants, has expressed their willingness to take up the assignment and have submitted the certificate pursuant to Section 224(1 )(b) of the Companies Act, 1956 about their eligibility for appointment. The Company proposes to appoint Messrs B. R. Shah & Associates as the Statutory Auditors of the Company to hold office till the conclusion of next Annual General Meeting.

COST AUDIT

As stipulated by the Central Government and pursuant to Section 233B of the Companies Act, 1956, Cost Audit of the records relating to the Textile Business of the Company is carried out from 1998-1999 onwards. Messrs N.D. Birla & Co., Cost Accountants, Ahmedabad, has been appointed as the Cost Auditor of the Company to carry out the Cost Audit for the year 2008-09.

PROMOTER GROUP

In accordance with the SEBI (Substantial Acquisition and Takeovers) Regulations, 1997, details of Promoter, Promoter Group and its constituents are disclosed in a statement annexed to this Report.

EMPLOYEE PARTICULARS

The particulars of employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable as no employee was in receipt of remuneration to the extent laid down in the said Rules.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A statement pursuant to Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors), Rules, 1988 on conservation of energy, technology absorption, foreign exchange earnings and outgo is annexed to and forms part of this Report.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for the cooperation and support extended by the Employees, Banks/ Financial Institutions and all other business partners.

For and on behalf of the Board U. KANORIA Kolkata, 9th May, 2009 Chairman



 
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