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Directors Report of Kanpur Plastipack Ltd.

Mar 31, 2015

TO THE MEMBERS,

The Directors have pleasure in submitting the 44th Annual Report together with Audited Accounts for the year ended 31st March, 2015.

FINANCIAL RESULTS :

(Rs. in Lacs) 2014-15 2013-14

Sale of products 24600.12 21219.27

Other Income 321.78 231.85

Total Income 24921.90 21451.12

Net Profit After Tax 1144.90 1086.96

Appropriations:

Transfer to General Reserve 30.00 30.00

Transfer to Gratuity Reserve Fund - 30.00

Proposed Equity Dividend 95.51 95.51

Dividend on Preference Shares 24.00 24.00

Tax on Dividend 23.89 20.32

Balance carried to Balance Sheet 971.50 887.13

REVIEW OF OPERATIONS:

During the year under review, your Company has achieved yet another milestone by crossing a record turnover of about Rs. 250 Crores. It is a matter of great satisfaction that your Company has continued to grow steadily. The inroads made into North America have started to become steady business. Your Company continues to lay emphasis on value added products and is creating the infrastructure towards that goal.

During the year your Company successfully installed the region''s first Roof Top Solar Plant and has shown a bold initiative towards renewable energy.

Margins came under pressure during the later part of the year due to the drastic fall in value of the Euro. Accordingly, the bottom line of your Company has increased by only 5% and reached to Rs. 11.45 Crores as against Rs. 10.87 Crores in the earlier year.

The trading activities as Del Credere Associate Cum Consignment Stockist of Indian Oil Corporation Limited (IOCL) have stabilized and is showing improved performance.

CREDIT RATING ON CREDIT FACILITIES FROM BANK:

Your Company''s financial discipline and prudence is reflected in the Credit Rating affimed by the CRISIL as under: Long Term Rating : CRISIL BBB/Stable

Short Term Rating : CRISIL A3

DIVIDEND:

Your Directors have recommended a dividend @ 12% (i.e. Rs. 1.20) per Equity Share for the financial year 2014-15. Dividend on Preference Shares is being recommended @ 12% according to the terms of their issue.

PROSPECTS:

Your Company continues to expand its manufacturing facilities. Technological upgradation in its plant and machinery is an ongoing process which will further improve the performance of your Company. The management continues to lay emphasis on exports of value added products and expanding the export market is your Company''s priority.

The third Multifilament Yarn Plant has stabilized and the product has been established in the market. The management is exploring new avenues in this segment.

The outlook for the current financial year looks robust and positive. The withdrawal of Focus Product Scheme on our products in the newly announced export import policy will have only a marginal impact on the profitability of your Company due to the steps taken by the management to increase the value realization. The current year will also show increased volumes due to which the profitability is likely to improve.

DEPOSITS:

Your Company has taken Deposits from Corporates, Directors, Promoters and their relatives. The outstanding balance of which is Rs. 333.49 Lacs (including interest accrued thereon) as on 31/03/2015. In view of Section 73 to 76 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 all the deposits held by the Company are exempted deposits.

DIRECTORS:

Shri Shashank Agarwal, Director is retiring by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. In view of the valuable guidance and support received from him, your Directors recommend his re-appointment.

Dr. G. N. Mathur has vacated his office of Director w.e.f. 04/02/2015 as he could not attend the meetings of the Board for a period of 12 months. The Board acknowledges his valuable contribution and guidance during his tenure.

Dr. R. G. Bagla was appointed as Additional Director (Independent) w.e.f. 25/05/2015 and being eligible offer himself to be appointed as Director in ensuing Annual General Meeting.

During the year your Company has conducted 06 meetings of the Board of Directors. The details of the meeting and attendance therein are given under Corporate Governance Report.

DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

CORPORATE GOVERNANCE:

Pursuant to Clause 49 of the Listing Agreement, Report on Corporate Governance and Management Discussion & Analysis Report are annexed to the Annual Report as Annexure ''A'' which forms part of this Report. The Auditors'' Certificate certifying that the Company has complied with the requirements of Corporate Governance in terms of Clause 49 of the Listing Agreement is attached and forms the part of this Report.

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

Information as per Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo for the financial year 2014-15 are annexed as Annexure ''B'' which forms part of this Report.

PARTICULARS OF EMPLOYEES:

The information required under Section 197(12) of the Companies Act, 1956 read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure ''C'' which forms part of this Report.

No employee of the Company covered under any of the clauses of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration ) Rules, 2014 are furnished in Annexure ''D'' and is attached to this Report.

LISTING:

The Equity Shares of Company continue to be listed at Bombay Stock Exchange. We confirm that the Annual Listing Fees for the financial year 2015-16 has been paid.

AUDITORS:

I STATUTORYAUDITORS

M/s Pandey & Co., Chartered Accountants, were appointed as Statutory Auditors of your Company for a period of 3 years in the Annual General Meeting held on 10/09/2014. Their continuance of appointment is placed for ratification at the ensuing Annual General Meeting. The Company has received a certificate from the above Auditors to the effect that if their appointment is ratified, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

There was no qualification, reservation or adverse remark made by the Auditors in their respective report.

II COST AUDITORS

In view of the Companies (Cost Records and Audit) Rules, 2014, Cost Audit is not applicable on your Company. ID. SECRETARIALAUDITORS

The Company has appointed M/s Adesh Tandon & Associates, Practicing Company Secretaries as the Secretarial Auditors of your Company for the year 2014-15. There was no qualification, reservation or adverse remark made by the Auditor in their respective report. The Secretarial Audit Report, as placed by the Auditor is annexed with this Report as Annexure ''E''.

IV INTERNALAUDITORS:

The Company has appointed M/s Kapoor & Tandon, Chartered Accountants as the Internal Auditors of the Company for the year 2014-15. Their report is placed before the Audit Committee of the Company from time to time.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate system of internal control with reference to the financial statements. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the company checks and verifies the internal control and monitors them in accordance with policy adopted by your Company. Company ensure proper and adequate systems and procedures commensurate with its size and nature of its business.

CORPORATE SOCIAL RESPONSIBILITY

In terms of Section 135 and Schedule VII of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014 the Board of Directors of your Company has constituted a CSR Committee the details of which are given in Corporate Governance Report. CSR Committee of the Board has developed a CSR Policy which is enclosed and forms part of this report as Annexure -''F''.

Annual report on CSR as required under rule 8(1) of the Companies (Corporate Social Responsibility) Rules, 2014 is annexed with this report as Annexure ''G''.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Your Company has not made any loan or given any Guarantees or made any investment under Section 186 of the Companies Act, 2013.

VIGIL MECHANISM (WHISTLE BLOWER POLICY)

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014 and revised Clause 49 of the Listing Agreement, a Vigil Mechanism for directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company.

RISK MANAGEMENT

The Company follows the risk management policy wherein the management keeps an eagle eye view on the markets, both domestic and foreign, related to the products, the Company manufactures and the raw materials required. The management also monitors the socio-economic changes worldwide and the changes in the currency parameters viz- a-viz indian market and foreign markets inter-se, currency and socio economic parameters.

The Board members are regularly informed about the potential risks, their assessment and minimization procedures. The Board frames a plan for elimination / minimization of the risk and further lays out the steps for implementing and monitoring of the risk management plan.

There are no risks which in the opinion of the Board are of the nature that can threaten the existence of the Company. However, the risks inter-se that are generally dealt in regular course of business and have to be taken care of are fluctuations in foreign exchange rates and raw material prices.

MATERIAL CHANGES AND COMMITMENTS :

No material changes or commitments which may affect the financial position of the Company has been occurred between the end of the financial year of the Company and the date of this report.

BOARD EVALUATION:

The Board annually evaluate its performance as well as the performances of its Committees and of Directors individually.

For evaluating the performance of the Board as a whole, the Board reviews the periodical performances of the Company and the role of the Board towards achievement of the said performances and the future plans as set out from time to time.

The performance of the Whole Time Directors is evaluated by the Board by linking it directly with their devotion towards implementation and management of the growth parameters of the Company and the actual achievements of the Company.

The performance of the Non Executive / Independent Directors is evaluated on the basis of their contribution for adopting better corporate governance practices, transparency and disclosures in achieving the goal of the Company.

The performance of the various Committees of the Board is reviewed on the basis of the achievement of the work designated to the specific committee.

RELATED PARTY TRANSACTIONS:

During the year no contract or arrangement was entered by the Company in terms of the provisions of Section 188(1) of the Companies Act, 2013.

Form AOC-2 detailing the related party transactions is annexed herewith as Annexure ''H''.

The policy to deal with the related party transactions is uploaded on the company''s website. The weblink of the same is http://kanplas.com/wp-content/uploads/Policy-on-Related-Party-Transactions.pdf.

COMPANYS'' POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION:

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence

of the Board, and separate its functions of governance and management. The Company has duly constituted the Nomination and Remuneration Committee of the Board and the committee interalia periodically evaluates:

1. The need for change in composition and size of the Board;

2. Recommend/review remuneration of the Managing Director(s) and Whole-time Director(s) based on their performance.

3. Recommend the policy for remuneration of Directors, KMPs & other senior level employees of the Company and review the same in accordance with the performance of the Company and industry trend.

The Remuneration Policy is annexed herewith as Annexure ''I'' which forms part of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE.

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that:-

i) in the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

iii) the Directors had 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 the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors had prepared the Annual Accounts of the Company on a going concern basis.

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

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

ACKNOWLEDGEMENT:

Your Directors express their sincere gratitude for overwhelming cooperation and assistance received from State Bank of India, other Government Agencies and esteemed customers for their continued patronage and support during the year.

Your Directors also place on record their appreciation for the contribution made by all the Officers, Staff and Workmen. The consistent growth of your Company was made possible by their hard work, cooperation and support.

Your Directors also take this opportunity to place on record their gratitude to the Members for their continued support and confidence with the company.

For and on behalf of the Board

Place : Kanpur SHASHANK AGARWAL MANOJ AGARWAL

Date : 25th May, 2015 Director (Technical) Managing Director


Mar 31, 2014

TO THE MEMBERS,

The Directors have pleasure in submitting the 43rd Annual Report together with Audited Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS :

(Rs. in Lacs)

2013-14 2012-13

Sale of products 21219.27 17,532.12

Other Income 231.85 165.75

Total Income 21451.12 17,697.87

Net Profit After Tax 1086.96 690.37

Appropriations:

Transfer to General Reserve 30.00 20.00

Transfer to Quality Claim Reserve Fund – 13.00

Transfer to Gratuity Reserve Fund 30.00 –

Proposed Equity Dividend 95.51 79.59

Dividend on Preference Shares 24.00 24.00

Tax on Dividend 20.32 16.81

Balance carried to Balance Sheet 887.13 536.97

REVIEW OF OPERATIONS :

During the year under review, your Company has achieved a new milestone of crossing the record turnover of Rs. 200 Crores. It is a matter of great satisfaction that your Company has continued to grow steadily. The greenshoots of recovery in the Global Economy have helped your Company to improve its operations. We have made some significant inroads in USA and Canada during the year. Your Company continues to scale new landmarks in achievements having been awarded the prestigious AIB Certification for food grade bags during the year. This will help us in making inroads in the American market.

The Bottom line of your Company has remarkably increased by 57% and reached Rs. 10.87 Crores as against Rs. 6.90 Crores in the earlier year. The highlights of the performance of your Company are as under :

Sl No. Particulars Amount Percantage (Rs. in Lacs) Increase / Decrease

1. Sales 21219 by 21%

2. PBIDT 2827 by 22%

3. Net Profit 1087 by 57%

The trading activities as Del Credere Associate Cum Consignment Stockist of Indian Oil Corporation Limited (IOCL) have stabilized and is showing improved performance. During the year under review, your Company has also become

Del Credere Associate (DCA) of M/s JJ Plastalloy Private Limited. Thus, trading activities will improve in the years to come contributing to improving the bottom-line.

DIVIDEND :

In view of the better financial results, your Directors have recommended an increased level of dividend @ 12% (i.e. Rs. 1.20) per Equity Share for the financial year 2013-14. Dividend on Preference Shares is being recommended @ 12% according to the terms of their issue.

PROSPECTS :

Your Company continues to expand its manufacturing facilities. Technological upgradation in its plant and machinery is an ongoing process which will further improve its performance. The management continues to lay emphasis on exports of value added products and expanding the export market is your Company''s priority.

The second Multifilament Yarn has stabilized and as the product has been established in the market, we are planning to expand in this area. Plans are under preparation for further Capex in the current year.

The outlook for the current financial year looks robust and positive. The management is hopeful of maintaining its profitability.

DEPOSITS :

Your Company has taken the deposits from the shareholders, directors and their friends and relatives the outstanding balance of which is Rs. 322.88 Lacs (including interest accrued thereon) as on 31/03/2014. This is to confirm that the above amount of deposit is not yet due for payment and that there are no overdue, unpaid / unclaimed deposits. The interest has also been paid in time to all the deposit holders.

In view of Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014 all the deposits held with the Company are exempted deposits.

DIRECTORS :

Shri Mahesh Swarup Agarwal and Shri Sunil Mehta are the Directors retiring by rotation at the ensuing Annual General Meeting and are eligible for re-appointment. In view of the valuable guidance and support received from them, your Directors recommend their re-appointment.

The Board has re-appointed Shri Manoj Agarwal as Managing Director and Shri Sunil Mehta as Director (Operations), subject to the approval of shareholders in ensuing Annual General Meeting, for the further periods of 3 and 5 years, respectively, w.e.f. 1st September, 2014.

CORPORATE GOVERNANCE :

Pursuant to Clause 49 of the Listing Agreement, Report on Corporate Governance and Management Discussion & Analysis Report are annexed to the Annual Report as Annexure ''A'' which forms part of this Report. The Auditors'' Certificate certifying that the Company has complied with the requirements of Corporate Governance in terms of Clause 49 of the Listing Agreement is attached and forms the part of this Report.

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

Information as per Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo for the financial year 2013-14 are annexed as Annexure ''B'' which forms part of this Report.

PARTICULARS OF EMPLOYEES AS REQUIRED U/S 217(2A) OF THE COMPANIES ACT, 1956 :

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of

Employees) Rules, 1975, no employee is covered under Section 217(2A) of the Companies Act, 1956 and as such the particulars of employees are not required to be disclosed.

LISTING :

The Equity Shares of Company continue to be listed at Bombay Stock Exchange. We confirm that the Listing Fees for the financial year 2014-15 has been paid.

AUDITORS :

The Statutory Auditors, M/s Pandey & Company, Chartered Accountants are retiring at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

The Notes on Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

COST AUDITOR :

Pursuant to the direction of Ministry of Corporate Affairs Cost Audit Order No.52/26/CAB-2010 dated 24.01.2012 & 06.11.2012, read with Section 233B of the Companies Act, 1956, the Company has appointed M/s Rakesh Misra & Co., Cost Accountants, to conduct audit of cost accounting records of the Company in accordance with the said order read with the Companies (Cost Audit Report) Rules, 2011 and other statutory updates for the Financial Year 2013-14.

The due date for filing Cost Audit Report for the year 2013-14 is 27th September, 2014 which will be filed accordingly.

DIRECTORS'' RESPONSIBILITY STATEMENT :

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that :- i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the Annual Accounts of the Company on a going concern basis.

ACKNOWLEDGEMENT :

Your Directors express their sincere gratitude for overwhelming cooperation and assistance received from State Bank of India, other Government Agencies and esteemed customers for their continued patronage and support during the year.

Your Directors also place on record their appreciation for the contribution made by all the Officers, Staff and Workmen. The consistent growth of your Company was made possible by their hard work, cooperation and support.

Your Directors also take this opportunity to place on record their gratitude to the Members for their continued support and confidence with the company.

For and on behalf of the Board

Place :Kanpur SHASHANK AGARWAL MANOJ AGARWAL

Date : 12th August, 2014 Director (Technical) Managing Director


Mar 31, 2013

TO THE MEMBERS,

The Directors have pleasure in submitting the 42nd Annual Report together with Audited Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS :

(Rs. in Lacs)

2012-13 2011-12

Sale of products 17,518.42 18,362.40

Other Income 162.51 333.52

Total Income 17,680.93 18,695.92

Net Profit after tax 687.13 1,036.92

Appropriation:

Transfer to General Reserve 20.00 160.00

Transfer to Quality Claim Reserve Fund 13.00

Proposed Equity Dividend 79.59 79.59

Dividend on Preference Shares 24.00 24.00

Tax on Dividend 16.81 16.81

Balance carried to Balance Sheet 533.73 756.52

REVIEW OF OPERATIONS :

Financial Year 2012-13 proved to be a challenging year due to global economic uncertainties and disturbances which affected industries worldwide leading to a significant impact on your Company. The management has tried its best to stabilize the operations with some success. During the year some highlights of the performance of your Company are as under:

- Sales : Rs. 17,518.42 Lacs;

- PBIDT : Rs. 2,312.54 Lacs;

- Net Profit : Rs. 687.13 Lacs.

During the year your Company aggressively explored new markets with success in new territories of South America, USA and CIS.

The silver lining is the relaxation in the JPMA where 40% of sugar & 10% of food grain have been permitted to be packed in plastic bags for the first time by the Government. Your Company was well placed to take advantage of this relaxation and shipped out over 30 Lacs sugar bags and over 35 Lacs food grain bags.

The trading activities as Del Credere Associate Cum Consignment Stockist of Indian Oil Corporation Limited (IOCL) have stabilized and is showing improved performance with an increase of about 8% in sales.

DIVIDEND :

Your Directors recommend a dividend @ 10% (i.e. Rs. 1) per Equity Share for the financial year 2012-13. Dividend on Preference Shares is being recommended @ 12% according to the terms of their issue.

PROSPECTS :

While the economic situation in Europe is far from satisfactory, initiatives taken by the management to develop new markets and some specialized products will show positive results in the year 2013-14. There is strong interest from USA and early signs of recovery in Germany which will help the Company.

FIXED DEPOSITS :

The Company has total fixed deposits of Rs. 344.99 Lacs (including interest accrued thereon) as on 31st March, 2013. This is to confirm that there are no overdue, unpaid / unclaimed deposits. The interest has also been paid in time to all deposit holders.

DIRECTORS :

Shri Prem S. Khamesra and Shri P. K. Goenka are the Directors retiring by rotation at the ensuing Annual General Meeting and are eligible for re-appointment. In view of the valuable guidance and support received from them, your Directors recommend their re-appointment.

The Board re-appointed Shri Shashank Agarwal, Director Technical, subject to the approval of shareholders in ensuing Annual General Meeting, for the period from 5th June, 2013 to 31st May, 2016.

CORPORATE GOVERNANCE :

Pursuant to Clause 49 of the Listing Agreement, Report on Corporate Governance and Management Discussion & Analysis Report are annexed to the Annual Report as Annexure ''A'' which forms part of this Report. The Auditors'' Certificate certifying that the Company has complied with the requirements of Corporate Governance in terms of Clause 49 of the Listing Agreement is attached and forms the part of this Report.

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

Information as per Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo for the financial year 2012-13 are annexed as Annexure ''B'' which forms part of this Report.

PARTICULARS OF EMPLOYEES AS REQUIRED U/S 217(2A) OF THE COMPANIES ACT, 1956 :

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, no employee is covered under Section 217(2A) of the Companies Act, 1956 and as such the particulars of employees are not required to be disclosed.

LISTING :

The Equity Shares of Company continue to be listed at Bombay Stock Exchange. We confirm that the Listing Fees for the financial year 2013-14 has been paid.

AUDITORS :

The Statutory Auditors, M/s Pandey & Company, Chartered Accountants are retiring at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

COST AUDITOR :

Pursuant to the direction of Ministry of Corporate Affairs Cost Audit Order No.52/26/CAB-2010 dated 24.01.2012 &

06.11.2012, read with Section 233B of the Companies Act, 1956, the Company has appointed M/s Rakesh Misra & Co., Cost Accountants, to conduct audit of cost accounting records of the Company in accordance with the said order read with the Companies (Cost Audit Report) Rules, 2011 and other statutory updates for the Financial Year 2013-14.

The due date for filing Cost Audit Report for the year 2012-13 is 27th September, 2013 which will be filed accordingly.

DIRECTORS'' RESPONSIBILITY STATEMENT :

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that :- i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

iii) t he D irectors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the Annual Accounts of the Company on a going concern basis.

ACKNOWLEDGEMENT :

Your Directors place on record their sincere gratitude for overwhelming cooperation and assistance received from State Bank of India, other Government Agencies and esteemed customers for their continued patronage, support, cooperation and assistance during the year.

Your Directors also place on record their appreciation for the high degree of professionalism, whole-hearted commitment, sincere and dedicated efforts put in by all Officers, Staff and Workmen who through their competence, hard work and cooperation have enabled the Company to achieve consistent growth.

Your Directors also take this opportunity to place on record their gratitude to the Members for their continued support and confidence with the company.

For and on behalf of the Board

Place :Kanpur SHASHANK AGARWAL MANOJ AGARWAL

Date : 27th May, 2013 Director (Technical)

Managing Director


Mar 31, 2012

The Directors have pleasure in submitting the 41st Annual Report together with Audited Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS :

(Rs. in Lacs)

2011-12 2010-11

Sale of products 18,362.40 11,758.43

Other Income 333.52 76.74

Total Income 18,695.92 11,835.17

Net Profit after tax 1,036.92 347.27

Appropriation:

Transfer to General Reserve 160.00 -

Proposed Equity Dividend 79.59 53.06

Dividend on Preference Shares 24.00 8.00

Tax on Dividend 16.81 9.91

Balance carried to Balance Sheet 1,918.31 1,183.58

REVIEW OF OPERATIONS :

During the year, both production and sales have considerably grown, thus there is continuous improvement in the operations of the Company. The results of upgradation and modernization of Plant and Machinery are evident.

It is a matter of satisfaction that the Company has achieved an all time record in its sales and profits. The Net profit stands at Rs. 1036.92 Lacs as against Rs. 347.27 Lacs in the previous year. The improved performance was a result of favourable market conditions enabling the Company's successful entry into South American markets and better capacity utilization.

During the year Bonus Shares in the ratio of 2:1 (1Bonus Equity Share each for every 2 existing Equity Shares) were allotted to the existing shareholders. Thus Equity Share Capital of the Company stands at Rs. 79,592,470 i.e. 79,59,247 Equity Shares of Rs. 10/- each fully paid up.

The trading activities as Del Credere Associate Cum Consignment Stockist of Indian Oil Corporation Limited (IOCL) have stabilized and is showing improved performance.

DIVIDEND :

Your Directors have recommended a dividend of Rs. 1/- per Equity Share for the year 2011-12 on enhanced Equity Share Capital. Dividend on Preference Shares is being recommended @ 12% according to the terms of their issue.

PROSPECTS :

With the successful implementation of its modernization programmes and activities undertaken during the year, it is expected that your Company will continue to give improved performance in the years to come. Encouraged by the performance in the Financial Year 2011 - 2012, the Management is now focussing on further expanding its presence in the international markets. The Management hopes to undertake a major expansion in the year 2012 - 2013 to carry on the momentum of growth.

The Multifilament Yarn division has showered up opportunities in terms of value added products which the management hopes to utilize in times to come.

FIXED DEPOSITS :

The Company has total fixed deposits of Rs. 313.50 Lacs (including interest accrued thereon) as on 31/03/2012. This is to confirm that there are no overdue, unpaid / unclaimed deposits. The interest has also been paid in time to all deposit holders.

DIRECTORS :

Shri S. M. Jain and Dr G N. Mathur are the Directors retiring by rotation at the ensuing Annual General Meeting and are eligible for re-appointment. In view of the valuable guidance and support received from them, your Directors recommend their re-appointment.

Shri Mahesh Swarup Agarwal, having attained the age of 85 years has expressed his wish to be relieved from day to day operations of the Company and has tendered his resignation as Executive Chairman to be effective from 1st September, 2012. The Board acknowledges and appreciates his contributions as an able leader & valuable guide which resulted in the extraordinary growth which the Company has achieved during the last over 40 years from a SSI unit to the present status. The Board regretfully accepted his resignation but recommends that he be appointed as "Chairman Emeritus" for life on such honorarium as the members may approve so that the Company continues to obtain his valuable advice and guidance from time to time for the benefits of the Company.

CORPORATE GOVERNANCE :

Pursuant to Clause 49 of the Listing Agreement, Report on Corporate Governance and Management Discussion & Analysis Report are annexed to the Annual Report as Annexure 'A' which forms part of this Report. The Auditors' certificate certifying that the Company has complied with the requirements of Corporate Governance in terms of Clause 49 of the Listing Agreement is attached and forms the part of this Report.

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

Information as per Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption and foreign exchange earnings and outgo for the financial year 2011-12 are annexed as Annexure 'B ' which forms part of this Report.

PARTICULARS OF EMPLOYEES AS REQUIRED U/S 217(2A) OF THE COMPANIES ACT, 1956 :

In terms of the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, no employee is covered under Section 217(2A) of the Companies Act, 1956 and as such the particulars of employees are not required to be disclosed.

LISTING :

The Equity Shares of Company continue to be listed at Bombay Stock Exchange. We confirm that the Listing Fees for the financial year 2011-12 has been paid.

AUDITORS :

The Statutory Auditors, M/s Pandey & Company, Chartered Accountants are retiring at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

COST AUDITOR :

Pursuant to MCA Cost Audit Order No. 52/26/CAB-2010 dt. 24.01.2012 read with Sec. 233B of the Companies Act, 1956, the Company has appointed M/s Rakesh Misra & Co. Cost Accountants to conduct audit of Cost accounting records of the Company in accordance with the said order read with Companies (Cost Audit Report) Rules, 2011 & other statutory updates for the Financial Year 2012-13.

DIRECTORS' RESPONSIBILITY STATEMENT :

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:-

i) in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

ii) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the Annual Accounts of the Company on a going concern basis.

ACKNOWLEDGEMENT :

Your Directors place on record their sincere gratitude and are grateful for overwhelming cooperation and assistance received from State Bank of India, other Government Agencies and esteemed customers for their continued patronage, support, cooperation and assistance during the year.

Your Directors also place on record their appreciation for the high degree of professionalism, whole-hearted commitment, sincere and dedicated efforts put in by all Officers, Staff and Workmen who through their competence, hard work and cooperation have enabled the Company to achieve consistent growth.

Your Directors also take this opportunity to place on record their gratitude to the Members for their continued support and confidence with the company.

For and on behalf of the Board

Place : Kanpur MAHESH SWARUP AGARWAL

Date : 07th August, 2012 Executive Chairman

 
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