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Directors Report of Karur KCP Packkagings Ltd.

Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the Twenty Fourth Annual Report of your Company and the Audited Statements of Accounts for the year ended 31st March, 2014.

I. FINANCIAL RESULT:-

DESCRIPTION 2013-14 2013-14 (Rs. in Lakhs) (Rs. in Lakhs) (Standalone) (Consolidated)

SALES - Domestic 45,028 45,028

- Exports 10,908 10.908

- Trading - -

Total 55,936 55,936

Operating Profit 6,398 6,381

Less:- Financial charges 4,066 4,734 Profit Before Depreciation, Preliminary / FCCB & GDR 2,332 1,647 Expenses W/o

Depreciation, Preliminary / 2,093 2,092 FCCB & GDR Expenses W/o

Net Profit Before Tax 239 (445)

Less : Provision for Taxation (180) (180)

Less : Provision for Deferred Tax 307 307

Profit After Tax 112 (572)

Add : Balance brought forward 5,892 5,952

Profit available for appropriation 6,004 5,381

Appropriation:

Proposed Dividend - -

Corporate Dividend Tax - -

Transfer to Reserve - -

Balance Profit carried to Balance sheet 6,004 5,381

Earnings per share: (Face Value Rs. 10/-)

Basic (Rs. ) 1.00 (5.08)

Diluted (Rs. ) 0.88 (4.48)

DESCRIPTION 2012-13 2012-13 (Rs. in Lakhs) (Rs. in Lakhs) (Standalone) (Consolidated)

SALES - Domestic 38270 38,270

- Exports 8882 8,882

- Trading - 23,317

Total 47,152 70,469

Operating Profit 6,119 6,217

Less:- Financial charges 3,783 3,817 Profit Before Depreciation, Preliminary / FCCB & GDR 2,336 2,400 Expenses W/o

Depreciation, Preliminary / 1,525 1,525 FCCB & GDR Expenses W/o

Net Profit Before Tax 811 875

Less : Provision for Taxation 88 92

Less : Provision for Deferred Tax 267 267

Profit After Tax 456 516

Add : Balance brought forward 5,867 5,867

Profit available for appropriation 6,323 6,383

Appropriation:

Proposed Dividend 113 113

Corporate Dividend Tax 18 18

Transfer to Reserve 300 300

Balance Profit carried to Balance sheet 5,892 5,952

Earnings per share: (Face Value Rs. 10/-)

Basic (Rs. ) 4.05 4.59

Diluted (Rs. ) 3.62 4.09

II. PERFORMANCE:-

Standalone Performance :

* The Turnover during the year under review was Rs. 559.36 Crores as against Rs. 471.52 Crores for the previous year, a growth of 18.63% over the previous year. Increase in revenue was due to rise in volumes and prices as well. During the year under review, exports were higher by 22.81 % at Rs. 109.08 Crores.

* Profit before tax was Rs. 2.39 crore as against Rs. 8.11 Crores for the previous year, a decrease of 29.47%

* FCC Bonds which are maturing on 26th April, 2016 carrying 5%YTM. The Company is confident of generating sufficient cash flows at maturity if the bond holders opt for redemption on due date.

* The Company is having 3.30 MW Windmills capacity and 10 MW Co-gen Power Plant, and its generation is being utilised by the Company apart from its outside energy sales.

A more detailed discussion is provided in the Management Discussion and Analysis Report.

III. DIVIDEND:-

Considering the significant expansion plans of your company which require substantial investments, the Board of Directors think it prudent to conserve the resources. The Directors regret their inability to recommend any dividend.

IV. CORPORATE GOVERNANCE:-

Necessary measures have been taken to comply with the requirements of the Listing Agreements with the Stock Exchanges where the Company''s Shares are listed. The report on Corporate Governance is included as a part of the Directors'' Report.

A Certificate from the Auditors of the Company regarding Compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

V. INFORMATION PURSUANT TO SEC. 217:-

a) CONSERVATION OF ENERGY, TECHONOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO, RESEARCH AND DEVELOPMENT: -

Information under 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 and forming part of the Directors'' Report.

The Company has incurred Rs. 5.08 Lakhs (Previous Year Rs. 7.96 Lakhs) towards the recurring expenditure on Research and Development. The R & D expenditure as a % of sales is 0.009% (Previous Year 0.017%)

b) PARTICULARS OF EMPLOYEES:-

No employees of the Company was in receipt of remuneration in excess of sum prescribed under Section 217(2A) of the Companies Act, 1956 read with The Companies (Particulars of Employees) Rules, 1975, during the financial year 2013-14.

c) DIRECTORS'' RESPONSIBILITY STATEMENT: -

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors to the best of their knowledge and belief confirm that;

* In the preparation of the annual accounts for the F.Y. 2013-14, the applicable accounting standards had been followed and there are no material departures;

* Appropriate accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the Profit of the Company for the financial year ended 31st March, 2014;

* Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provi- sions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

* The financial statements have been prepared on a going concern basis.

VI. PUBLIC DEPOSITS:-

The Company had not accepted / invited or held any deposits and does not hold any deposits from the public on date.

VII. LISTING WITH STOCK EXCHANGES:-

The Shares of the Company are listed with the following Stock Exchanges:

a) Bombay Stock Exchange Limited

Phiroze Jeejeebhoy Towers, 25th Floor, Dalal Street, Mumbai - 400 001.

b) Madras Stock Exchange Limited

Exchange Building, P. B. No. 183, 11, 2nd Line Beach, Chennai - 600 001.

c) Cochin Stock Exchange Limited

MES Dr. P. K. Abdul Gafoor Memorial Cultural Complex, 36/1565, 4th Floor, Judges Avenue, Kaloor, Cochin - 682 017.

The Company has paid the annual Listing fees for the period 2014 - 2015 to Bombay Stock Exchange Limited, Madras Stock Exchange Limited, and Cochin Stock Exchange Limited except Coimbatore Stock Exchange Limited. Coimbatore Stock Exchange Limited has been allowed to exit as stock exchange vide SEBI''s order dated 03.04.2013.

The Foreign Currency Convertible Bonds and Global Depository Receipts of the Company are listed with Luxembourg Stock Exchange, R.C.B, 6222, B.P 165 L-2011, Luxembourg.

VIII. WHOLLY OWNED SUBSIDIARY COMPANY :-

The Company has a Wholly Owned Subsidiary Company in the name M/s Shriudha Ventures Pte Ltd, which has been incorporated on 9th April, 2012 in Republic of Singapore for the purpose of carrying the business of importers, exporters, whole salers and agents of Urea, Packaging materials and other general commodities.

IX. SBLC FACILITY:-

Your Company has availed Stand By Letter of Credit Facility with The Karur Vysya Bank Ltd., for USD 30 million favouring Bank of India, New York Branch on behalf its Wholly Owned Subsidiary Company M/s. Shriudha Ventures Pte Ltd., Singapore

X. DIRECTORS:-

Smt. P. Annammal retire by rotation at the ensuing Annual General Meeting and in accordance with the requirements of the Act and Articles of Association of the Company, she being eligible offer herself for reappointment, is hereby reappointed as Director of the Company.

Shri K. Palaniappan retire by rotation at the ensuing Annual General Meeting and being eligible offer himself for reappointment, is hereby reappointed as an Independent Director of the Company, pursuant to Section 149, 159 of the Companies Act, 2013 and other applicable provisions

XI. AUDITORS:-

M/s. MSS SRIRAM & Co., Chartered Accountants, Karur, the Company''s Auditors, retires at the conclusion of the forthcoming Annual General Meeting and is eligible for reappointment. They are recommended for reappointment. You are requested to appoint the Auditors and fix their remuneration.

XII. COST AUDITOR:-

Shri B. Venkateswar, Cost Accountant, had been appointed by the Company to conduct the Cost Audit in respect of Paper and Paper Products for the financial year 2013-14, whose appointment has been approved by the Central Government. The Cost Audit Report for the financial year ended 31st March, 2013 had been e-filed with the Ministry of Corporate Affairs, New Delhi, vide, SRN S28420289 dated 5th December, 2013.

XIII. BANKERS:-

The Board of Directors thank the Consortium of Bankers consisting of State Bank of India (Lead Bank), Union Bank of India, The Karur Vysya Bank Limited, IDBI Bank Limited, Canara Bank, and The Shamrao Vithal Co-Operative Bank Limited, who have supported the Company for the credit requirements.

XIV. ACKNOWLEDGEMENT:-

The Directors thank the Customers, Bankers, Suppliers and the Shareholders for their continued support and also recognize the contribution made by the employees to the Company''s progress during the year under review.

On Behalf of the Board

Place : Karur K. C. PALLANI SHAMY Date : 5th September, 2014 Chairman


Mar 31, 2012

The Directors have pleasure in presenting the Twenty Second Annual Report of your Company and the Audited Statements of Accounts for the year ended 31st March, 2012.

I. FINANCIAL RESULT:-

DESCRIPTION 2011-12 2010-11 (Rs. in Lakhs) (Rs. in Lakhs)

SALES Domestic 35851 32923

Exports 8240 6371

Total 44091 39294

Operating Profit 4075 5124

Less:- Financial charges 2663 2666

Profit Before Depreciation, 1412 2458 Preliminary/FCCB & GDR expenses W/o

Depreciation, Preliminary/FCCB 1124 1161 & GDR Expenses W/o

Profit Before Exceptional items 288 1297 Revenue/(Loss)

Exceptional Items 848 (25)

Net Profit/(Loss) Before Tax 1136 1272

Less: Provision for Taxation 199 206

Less: Provision for Deferred Tax 76 299 Profit After Tax 861 767

Add : Balance brought forward 5437 4953

Profit available for appropriation 6298 5720

Add :Transfer from subsidy reserve - 17

Appropriation:

Proposed Dividend 113 -

Corporate Dividend Tax 18 -

Transfer to Reserve 300 300

Balance Profit carried to Balance 5867 5437 sheet

Earnings per share: (Face Value Rs. 10/-)

Basic (Rs.) 7.65 7.63

Diluted (Rs.) 6.87 4.79

II. PERFORMANCE:-

- The Turnover during the year under review was Rs. 440.91 crores as against Rs. 392.94 crores for the previous year, a growth of 12.21% over the previous year. Increase in revenue was due to rise in volumes and prices as well. During the year under review, exports were higher by 29.34 % at Rs. 82.40 crores.

- Profit before tax was Rs. 11.36 crore as against Rs. 12.72 crores for the previous year, a decrease of 10.69%.

- The Company had raised funds through GDR issue during March 2011 in order to part finance the expansion plans and the size of the issue was 2.5 Million GDR @4.50 USD per GDR which was fully subscribed. The fresh infusion of funds by way of equity would lower the Debt-Equity ratio and interest cost.

- FCC Bonds which are maturing on 27th April 2011 have been extended by another 5 years to 26th April 2016. Besides, Bonds carrying 7% YTM got reduced to 5%YTM. The Company is confident of generating sufficient cash flows at maturity if the bond holders opt for redemption on due date.

- The Company has already started constructing its 10 MW captive power plant project at Pollachi, Tamilnadu, India on EPC basis through M/s Cethar Vessels Limited, Trichy, Tamilnadu, India. The power plant project is under construction and progressing well as per the plan. The project is expected to complete by September 2012. The Company's power and fuel cost will get reduced substantially once the project becomes operational.

- The Company installed 1.65 MW windmill of Vestas make at Thungavi Village, Madathukulam Taluk, Tirupur District, Tamilnadu, India during the month of October 2010. With this addition, the Company is having 3.30 MW Windmills capacity and its generation is being adjusted in its FIBC & PP Division.

- Capital Expenditure during the year 2011-12 was Rs. 62.37 crores primarily on account of installation of 10MW power plant and 60 TPD ESKP facility at Pollachi for the assets transfered from Pondicherry.

A more detailed discussion is provided in the Management Discussion and Analysis Report.

III. DIVIDEND:-

The Board of Directors recommends 10% Dividend absorbing a quantum of 112.50 lakhs on the Equity Shares for the financial year ended 31st March, 2012. As per the provisions of the Income Tax Act, 1961, no tax will be deducted at source on dividends distributed. However, the Company will bear the tax on the dividend distributed, amounting to Rs. 18.25 lakhs.

IV. DIRECTORS:-

Smt. P. Annammal, Director and Shri K. Palaniappan, Director retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

V. BANKERS:-

The Board of Directors thanks the Consortium of Bankers consisting of State Bank of India (Lead Bank), The Karnataka Bank Limited, The Karur Vysya Bank Limited, Central Bank of India, Andhra Bank, Union Bank of India, ICICI Bank Limited and The Shamrao Vithal Co-Operative Bank Limited, who have supported the Company for the Term Loan & Working Capital requirements.

VI. CORPORATE GOVERNANCE:-

Necessary measures have been taken to comply with the requirements of the Listing Agreements with the Stock Exchanges where the Company's Shares are listed. The report on Corporate Governance is included as a part of the Directors' Report.

A Certificate from the Auditors of the Company regarding Compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

VII. DIRECTORS' RESPONSIBILITY STATEMENT: -

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors to the best of their knowledge and belief confirm that;

- In the preparation of the annual accounts for the FY. 2011-12, the applicable accounting standards had been followed and there are no material departures;

- Appropriate accounting policies have been selected and applied consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at the 31st March, 2012 and of the Profit of the Company for the financial year ended 31st March, 2012;

- 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 the Company and for preventing and detecting fraud and other irregularities;

- The financial statements have been prepared on a going concern basis.

VIII. PUBLIC DEPOSITS:-

The Company had not accepted/invited or held any deposits and does not hold any deposits from the public.

IX. AUDITORS:-

M/s. MSS SRIRAM & Co., Chartered Accountants, Karur, the Company's Auditors, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. They are recommended for reappointment. You are requested to appoint the Auditors and fix their remuneration.

X. COST AUDITOR:-

The Company has appointed Sri. B. Venkateswar, Practicing Cost Accountant, as the Cost Auditor in terms of Section 233B(2) of the Companies Act, 1956 to audit the cost records and submit his compliance report for the year under review to the Central Government.

XI. LISTING WITH STOCK EXCHANGES:-

The Shares of the Company are listed with the following Stock Exchanges:

a) Bombay Stock Exchange Limited

Phiroze Jeejeebhoy Towers, 25th Floor, Dalal Street, Mumbai - 400 001.

b) Madras Stock Exchange Limited

Exchange Building, P. B. No. 183, 11, 2nd Line Beach, Chennai - 600 001.

c) Cochin Stock Exchange Limited

MES Dr. P. K.Abdul Gafoor Memorial Cultural Complex, 36/1565, 4th Floor, Judges Avenue, Kaloor, Cochin-682 017.

d) Coimbatore Stock Exchange Limited

Stock Exchange Building, 683 - 686, Trichy Road, Singanallur, Coimbatore - 640 005.

The Company has paid the annual Listing fees for the period 2012-2013 to Bombay Stock Exchange Limited, Madras Stock Exchange Limited, Cochin Stock Exchange Limited while in respect of Coimbatore Stock Exchange, fees has not been paid, since the demand notice has not been received yet.

The Foreign Currency Convertible Bonds and Global Depository Receipts of the Company are listed with Luxembourg

Stock Exchange, R.C.B, 6222, B.P 165 L-2011, Luxembourg.

XII. PARTICULARS OF EMPLOYEES:-

Statement Under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors' Report for the year ended 31st March, 2012.

Name Age Designation Remuneration (in Nature of Including years) Dues Gratuity (In Rupees) (1) (2) (3) (4)

Shri K.C. Pallanishamy 77 Chairman & 85,96,154 Managing Director

Shri K.C.P Shivraman 38 Joint Managing 85,96,154 Director

Name Experience Date of Particulars (In years) commencement of last of Employment Employment (1) (5) (6) (7)

Shri K.C.Pallanishamy 51 18-01-1991 -

Shri K.C.P Shivraman 20 18-01-1991 -

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

Information under 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 and forming part of the Directors' Report.

XIV. ACKNOWLEDGEMENT:-

The Directors thank the Customers, Bankers, Suppliers and the Shareholders for their continued support and also recognize the contribution made by the employees to the Company's progress during the year under review.

On Behalf of the Board

K. C. PALLANI SHAMY Chairman

Place : Karur Date : 21st August, 2012


Mar 31, 2011

DIRECTORS' REPORT TO THE SHAREHOLDERS

The Directors have pleasure in presenting the Twenty First Annual Report of your Company and the Audited Statements of Accounts for the year ended 31st March, 2011.

I. FINANCIAL RESULTS:-

DESCRIPTION 2010-11 2009-10

(Rs.in Lakhs) (Rs.in Lakhs)

SALES Domestic 33268.14 28819.19

Exports 6371.04 4527.62

Total 39639.18 33346.81

Operating Profit 5098.74 5295.90

Less: Financial charges 2665.97 2659.27

Profit Before Depreciation, reliminary / FCCB / 2432.77 2636.63 GDR expenses W/o

Depreciation , Preliminary / FCCB / 1160.83 1037.66 GDR Expenses W/o

Profit Before Exceptional items Revenue / 1271.94 1598.97

(Loss)

Exceptional Items - - (145.30)

Net Profit/(Loss) Before Tax 1271.94 1453.67

Less : Provision for Taxation 238.00 650.00

Less : Provision for Deferred Tax 299.34 (16.12)

Add : Excess Provision for Taxation written back 31.93 -

Profit After Tax 766.53 819.79

Add : Balance brought forward 4953.89 4766.24

Profit available for appropriation 5720.42 5586.03

Add : Transfer from subsidy reserve 16.82 _

Appropriation:

Proposed Dividend - 100.00

Corporate Dividend Tax - 16.12

Transfer to Reserve 300.00 515.53

Balance Profit carried to Balance Sheet 5437.24 4953.89

Earnings per share: (Face Value Rs.10/-) - -

Basic 7.63 8.20

Diluted 4.79 5.12

II. PERFORMANCE:-

- The Turnover during the year under review was Rs.396.39 Crore as against Rs. 333.47 Crore for the previous year, a growth of 18.87% over the previous year. Increase in revenue was due to rise in volumes and prices as well. During the year under review, exports were higher by 40.71 % at Rs. 63.71 crore.

- Profit before tax was Rs.12.72 Crore as against Rs. 14.54 Crore for the previous year, a decrease of 12.52%. The PBT in 2009-10 includes Notional Exchange Gain (Rs.5.81 Crore) & Derivative loss (Rs.1.45 Crore) of Rs.4.36 Crore. The PBT would have been at Rs. 12.23 Crore and Rs.10.18 crore respectively for the years 2010-11 & 2009-10, excluding the above two items, translating into higher PBT growth by 20.14% during the year 2010-11.

- The company had raised funds through GDR issue during March, 2011 in order to part finance the expansion plans and the size of the issue was 2.5 Million GDR @4.50 USD per GDR which was fully subscribed. The fresh infusion of funds by way of equity would lower the Debt-Equity ratio and interest cost.

- FCC Bonds (FCCB) which are maturing on 27th April, 2011 have been extended by another 5 years to 26th April, 2016. Besides, Bonds carrying 7% YTM got reduced to 5%YTM. The company is confident of generating sufficient cash flows at maturity if the bond holders opt for redemption on due date.

- During the year the company started constructing its 10 MW captive power plant project at Pollachi, Tamilnadu, India on EPC basis through M/S Cethar Vessels Limited, Trichy, Tamilnadu, India. The power plant project is under construction and progressing well as per the plan. The project is expected to complete by March, 2012. The company's power and fuel cost will get reduced substantially once the project becomes operational.

- The company installed 1.65 MW windmill of Vestas make at Thungavi Village, Madathukulam Taluk, Tirupur, Tamilnadu, India during the month of October, 2010. With this addition the company's total windmill capacity stands at 3.30 MW and its generation is being adjusted in its FIBC & PP Division.

- The company had shifted its paper bag operations from Puducherry to Pollachi in September, 2010 which had resulted lowering its paper bag production during the period of shifting and stabilization. The production and turnover of paper bag division should have been surpassed the previous year figures had it not been shifted operations. The company also decided to shift its 70 TPD ESK Paper plant located at Puducherry to Pollachi due to water scarcity and other administrative reasons.

- The 120 TPD ESKP Facilities at Pollachi had commenced its operations in January, 2011. The company is able to utilize its capacity in full only during the second half of next year mainly due to power cut and other related issues.

- Capital Expenditure during the year 2010-11 was Rs.57.65 crores primarily on account of installation of new 1.65MW windmill (Rs. 10.88 crores), 10MW power plant part payments (Rs.15 crore), 120 TPD ESKP facility (Rs.22.64 crores) at Pollachi, addition in PP & FIBC Divisions Rs.5.04 crores & other fixed assets for Rs.4.09 crores.

A more detailed discussion is provided in the Management Discussion and Analysis Report.

III. DIVIDEND:-

Considering the significant expansion plans of your company which require substantial investments, the Board of Directors think it prudent to conserve the resources. The directors regret their inability to recommend any dividend

IV. DIRECTORS:-

Dr. K. Mohan and Shri S. Murali Krishnan, Directors retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

V. BANKERS:-

The Board of Directors thanks the Consortium of Bankers consisting of State Bank of India (Lead Bank), The Karnataka Bank Limited., The Karur Vysya Bank Limited., Central Bank of India, Andhra Bank, Union Bank of India, ICICI Bank Limited and The Shamrao Vithal Co-operative Bank Limited, who have supported the company for the Term Loan & Working Capital requirements.

VI. CORPORATE GOVERNANCE:-

Necessary measures have been taken to comply with the requirements of the listing agreements with the Stock Exchanges where the Company's Shares are listed. The report on Corporate Governance is included as a part of the Directors Report.

A Certificate from the Auditors of the Company regarding Compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the listing agreement is attached to this report.

VII. DIRECTORS' RESPONSIBILITY STATEMENT -

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors to the best of their knowledge and belief confirm that;

- In the preparation of the annual accounts for the F.Y 2010-11, the applicable accounting standards had been followed and there are no material departures;

- Appropriate accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at 31st March, 2011 and of the Profit of the company for the financial year ended 31st March, 2011;

- 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 the company and for preventing and detecting fraud and other irregularities.

- The financial statements have been prepared on a going concern basis;

VIII. PUBLIC DEPOSITS:-

The Company had not accepted / invited or held any deposits and does not hold any deposits from the public.

IX.AUDITORS:-

M/s. MSS SRIRAM & Co., Chartered Accountants, Karur, the Company's Auditors, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. They are recommended for reappointment. You are requested to appoint the auditors and fix their remuneration

X. LISTING WITH STOCK EXCHANGES:-

The Shares of the Company are listed with the following Stock Exchanges:

a) Madras Stock Exchange Limited

Exchange Building, R B. No. 183, 11, 2nd Line Beach, Chennai-600 001.

b) Bombay Stock Exchange Limited

Phiroze Jeejeebhoy Towers, 25th Floor, Dalai Street, Mumbai - 400 001.

c) Coimbatore Stock Exchange Limited

Stock Exchange Building, 683 - 686, Trichy Road, Singanallur, Coimbatore - 640 005

d) Cochin Stock Exchange Limited

MES Dr. P. K. Abdul Gafoor Memorial Cultural Complex, 36/1565, 4th Floor, Judges Avenue, Kaloor, Cochin - 682 017.

The listing fees have been paid up to date.

The Foreign Currency Convertible Bonds and Global Depository Receipts of the Company are listed with Luxembourg Stock Exchange, P.O.Box 165, L-2811 Luxembourg, Europe.

XI. PARTICULARS OF EMPLOYEES:-

None of the employees was in receipt of remuneration in aggregate exceeding Rs.60.00 lakhs per annum during the year or at the rate of Rs.5.00 lakh per month, if employed for a part of the year.

No employee holding more than 2% of Equity Shares of the Company either by himself or along with his spouse and dependent children and employed throughout or for a part of the year was in receipt of remuneration which in aggregate or at a rate as the case may be in excess of the remuneration received by the Managing Director. Hence no statement in accordance with section 217 (2A) of the Companies Act, 1956 is furnished.

XII. CONSERVATION OF ENERGY, TECHONOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:-

Information under 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 and forming part of the Directors' Report.

XIII. ACKNOWLEDGEMENT: -

The Directors thank the Customers, Suppliers and the Shareholders for their continued support and also recognize the contribution made by the employees to the Company's progress during the year under review.

On Behalf of the Board

K. C. PALLANI SHAMY Chairman

Place : Karur Date : 25th August, 2011




Mar 31, 2010

The Directors have pleasure in presenting the Twentieth Annual Report of your Company and the Audited Statements of Accounts for the year ended 31st March, 2010.

DESCRIPTION 2009-10 2008-09 (Rs.in Lakhs) (Rs.in Lakhs)

SALES Domestic 28819.19 28142.75

Exports 4527.62 5260.99

Total 33346.81 33403.74

Operating Profit 5295.90 3853.21

Less: Financial charges 2659.27 2710.73

Profit Before Depreciation, Preliminary / 2636.63 1142.48 FCCB expenses W/o

Depreciation , Preliminary / FCCB 1037.66 1029.77 Expenses W/o

Profit Before Exceptional items Revenue / 1598.97 112.71 (Loss)

Exceptional Items <145.30) 1429.25

Net ProfitV(Loss) Before Tax 1453.67 1541.96

Less: Provision for Taxation 650.00 729.54

Less : Provision for Deferred Tax (16.12) (137.67)

Profit After Tax 819.79 950.09

Add: Balance brought forward 4766.24 3816.15

Profit available for appropriation 5586.03 4766.24

Appropriation:

Proposed Dividend 2009-10 100.00 0.00

Corporate Dividend Tax 16.12 0.00

Transfer to General Reserve 515.53

Balance Profit carried to Balance Sheet 4953.89 4766.24

Earnings per share: (Face Value Rs. 10/-)

Basic 8.20 9.50

Diluted 5.12 5.66

The turnover for the Current year excluding other income was Rs. 33346.81 Lakhs as against Rs. 33403.74 Lakhs for the previous year. The profit before tax of Rs. 1453.67 Lakhs for the current year is less by 5.73% compared to the Profit before tax of Rs. 1541.96 Lakhs for the previous year. A more detailed discussion is provided in the Management Discussion and Analysis Report.

The Board of Directors are pleased to recommend a Dividend @10%, for the financial year 2009-10 on the paid up share capital, absorbing a quantum of Rs. 100 Lakhs. The tax free dividend will be paid to shareholders within 30 days from the date of its declaration.

Smt. P.Annammal, Director and Shri K.Palaniappan, Director retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

Your directors invite your attention to the special business item of the agenda relating to the reappointment of the managerial personnel.

V. BANKERS:-

The Board of Directors thanks the Consortium of Bankers consisting of State Bank of India (Lead Bank), The Karnataka Bank Limited, The Karur Vysya Bank Limited, Central Bank of India, Andhra Bank, Union Bank of India, ICICI Bank* Limited and The Shamrao Vithal Co-operative Bank Limited, who have supported the company for the Term Loan & Working Capital requirements.

VI. CORPORATE GOVERNANCE:-

Necessary measures have been taken to comply with the requirements of the listing agreements with the Stock Exchanges where the Companys Shares are listed. The report on Corporate Governance is included as a part of the Directors Report.

A Certificate from the Auditors of the Company regarding Compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the listing agreement is attached to this report.

VII. DIRECTORS RESPONSIBILITY STATEMENT; -

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors to the best of their knowledge and belief confirm that;

- In the preparation of the annual accounts for the F.Y. 2009-10, the applicable accounting standards had been followed and there are no material departures;

- Appropriate accounting policies have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at the 31 st March, 2010 and of the Profit of the company for the financial year ended 31st March, 2010;

- 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 the company and for preventing and detecting fraud and other irregularities.

»- The financial statements have been prepared on a going concern basis;

VIII. PUBLIC DEPOSITS:-

The Company had not accepted / invited any deposits during the year and does not hold any deposits from the public at the end of the year.

IX. AUDITORS:-

M/s. MSS SRIRAM & Co., Chartered Accountants, Karur, the Companys Auditors, retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

X. LISTING WITH STOCK EXCHANGES:-

The Shares of the Company are listed with the following Stock Exchanges:

a) Madras Stock Exchange Limited

Exchange Building, P. B. No. 183, 11, 2nd Line Beach, Chennai -600 001.

b) Bombay Stock Exchange Limited

Phiroze Jeejeebhoy Towers, 25th Floor, Dalai Street, Mumbai - 400 001.

c) Coimbatore Stock Exchange Limited

Stock Exchange Building, 683 - 686, Trichy Road, Singanallur, Coimbatore - 640 005

d) Cochin Stock Exchange Limited

MES Dr. P. K. Abdul Gafoor Memorial Cultural Complex, 36/1565, 4th Floor, Judges Avenue, Kaloor, Cochin - 682 017.

The listing fees have been paid up to date.

The Foreign Currency Convertible Bonds of the Company are listed with Luxumberg Stock Exchange.

XI. PARTICULARS OF EMPLOYEES:-

None of the employees was in receipt of remuneration in aggregate exceeding Rs. 24.00 Lakhs per annum during the year or at the rate of Rs. 2.00 Lakh per month, if employed for a part of the year.

No employee holding more than 2% of Equity Shares of the Company either by himself or along with his spouse and dependent children and employed throughout or for a part of the year was in receipt of remuneration which in aggregate or at a rate as the case may be in excess of the remuneration received by the Managing Director. Hence no statement in accordance with section 217 (2A) of the Companies Act, 1956 is furnished.

XII. CONSERVATION OF ENERGY, TECHONOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:-

Information under 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 and forming part of the Directors Report.

XIII. ACKNOWLEDGEMENT: -

The Directors thank the Customers, Suppliers and the Shareholders for their continued support and also recognize the contribution made by the employees to the Companys progress during the year under review.

II. Technology Absorption, Adaptation and Innovation

Research and Development activities are carried out on an ongoing basis for improving the efficiency and also for improving quality of products.

On behalf of the Board

Place : Karur K. C. PALLANISHAMY

Date 2nd September, 2010 Chairman



 
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