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Directors Report of KG Petrochem Ltd.

Mar 31, 2014

Dear Members,

The Directors are pleased to present their 34rd Annual Report together with the Audited Statement of Accounts for financial year ended on 31st March 2014.

FINANCIAL RESULTS

The Financial performance of the Company for the year ended March 31, 2014 is summarized below:-

Particular F.Y 2013-14 F.Y 2012-13 (Rs. In lacs) (Rs. In lacs)

Sales/Income from operation 15104.95 12140.32

Add :Other Income 265.06 298.57

Less: Total Expenditure 13069.58 10667.32 (Including variation in Stock )

Profit before Interest, Depreciation & Tax 2300.43 1771.57

Less : Financial Expenses 577.43 594.97

Profit before Depreciation & Tax 1723.00 1176.59

Less : Depreciation 745.49 701.38

Add : Withdrawal from Capital Reserve 19.82 16.71

Provision for Tax (Including Deferred Tax) 312. 12 158.42

Profit after Tax 685.21 333.51

DIVIDEND

In order to conserve the resource of the company, your Directors express their inability to recommend a dividend for the financial year ended on 31st March, 2014.

RESULT OF OPERATIONS:

During Financial the year under review, The Company was able to improve its performance in revenues from operations. During Financial Year 2014, the company has performed reasonably well and grew its revenues. The revenue from operation of the company for the year ended 31st March 2014 was Rs. 15104.95 lacs as against Rs. 12140.32 lacs in F.Y. 2012-13, an increase of 24.42 % on a year to year basis. Profit after tax was Rs. 685.21 lacs as against Rs. 333.51 lacs in previous year.

Further Segment wise result of operation is as under:-

Textile Division:- During the year under review, its revenue from operations was Rs. 15004.84 lacs including export sales of Rs. 10835.35 lacs (FOB) as against Rs. 12026.17 lacs including export of Rs. 7095.65 lacs (FOB) in previous year, growth of 24.77 %. The division has performed well during the year under review. The division had also achieved its level of exports (FOB) which were higher by 52.70% at Rs. 10835.35 lacs as against Rs. 7095.65 lacs FY 2012-13. Modernization and Technology Up-gradation programme continue at unit to maintain competitiveness and achieve better quality.

Agency Division- The division has sold HDPELLDPE Granules 24679.347 Mt. amounting to Rs. 27456.93 lacs in comparison of 19151.00 Mt. amounting to Rs. 18317.81 lacs and earned commission of Rs. 100.11 lacs as compared to last year Rs. 77.21 lacs.

Garment Division: To given strength and support to textile division, garment division is still doing job work for textile division.

PERSONNEL

During the year under review, industrial relations continue to be cordial. The Board wishes to place on record its appreciation for the valuable services rendered by the entire work force, during the year under review, achieved good quality production.

There were no employees whose remuneration was in excess of the limits prescribed under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

DIRECTORS

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company Mr. Ramesh Chand Maheshwari, Director shall retire by rotation at the forthcoming Annual General Meeting and being, eligible offer himself for reappointment.

During the period Mrs. Prity Singhal has resigned from the board and Mrs. Savitri Kandoi was appointed as Additional Director with effect from 10.07.2014 under Section 161(1) of the Companies Act, 2013 and liable to hold office upto the ensuing Annual General Meeting. The Company has received necessary notice under Section 161(1) of Companies the Act, 2013 from a member proposing her appointment and the resolution for her appointment shall be placed at the annual general meeting for the approval of members Brief resume of the above appointee Director is given in the Corporate Governance Report forming part of the Annual Report.

The Company has received requisite notices in writing from members proposing Shri Nitin Jaipuria, Shri Rameshwar Pareek, Shri Kamlesh Sharma and Shri Raj Kumar Agarwal for appointment as Independent Directors.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Management continuously reviews the internal control systems and procedure for the efficient conduct of the company''s business. The Internal Auditors of the company conducts the audit on regular basis and the audit committee actively reviews internal audit reports and effectiveness of internal control systems.

AUDITORS & AUDITOR''S REPORT

The Company''s Auditors, M/s. R Sogani & Associates, Chartered Accountants, who are statutory auditor of the company hold office upto the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the company for the Financial Year 2014-15. As required under provision of the Section 141 (3) (g) of the Companies Act, 2013, the company has obtained written confirmation from M/s. R Sogani & Associates that their appointment if made, would be in conformity with the limits specified in the said Section.

PUBLIC DEPOSITS:

During the year, the Company has not accepted any deposits under Section 58A of the Companies Act, 1956.

DIRECTORS'' RESPONSIBILITY STATEMENT:

In terms of section 217 (2AA) of the Companies Act, 1956, your Directors confirm as under:-

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year as at 31st March, 2014 and of the profit of the Company for the year;

3. That the Directors have 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; and

4. That the annual accounts were prepared on a ''going-concern'' basis.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report gives a detailed account of your Company''s operations and the market in which it operates are separately given in the Annual Report and forms part of the Director Report.

CORPORATE GOVERNANCE

Your Company continues to be committed to good corporate governance and ethical corporate practices. A separate Report on Corporate Governance on compliance with the conditions of Corporate Governance as per Clause 49 of the Listing Agreement with Stock Exchanges is provided as part of this Annual Report.

COST AUDITORS:

The Cost Audit Report for the financial year 2012-13 was filed with Ministry of Corporate Affairs on October 23, 2013. The cost audit report for the year 2013-14 is in under process and will be filed in due course.

COMPLIANCE REPORT

Towards, company''s commitment to transparency and due compliance of applicable laws, the Board is pleased to enclose compliance report in annexure "A" for the year 2013-2014 as a part of the Director Report.

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

Information in accordance with Sec. 217(1)(e) of the companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rule,1988 is given in Annexure ''B'' forming part of this report.

APPRECIATION

Your Directors would like to express their appreciation for the assistance and co operation received from Central and State Government Authorities, Regulatory Bodies, Banks. The Board also recognized the contribution of the esteemed customers, vendors, bankers and business associates in the growth of the Company.

The Director also wish to acknowledge the committed and dedicated team of KG Petrochem whose unstinted hard work, efforts and ideas have taken the Company on a path of steady growth and Development. We take this opportunity to thank the employees for their contribution to the growth and success of your company. We would also like to thank all other stakeholders and business associate for their report.

For and on behalf of the Board

Place:JAIPUR (G. S. Kandoi) (Manish Singhal) Date : 10th July, 2014 Managing Director Director


Mar 31, 2013

Dear Shareholders,

The directors are pleased to present their 55th Annual Report and audited accounts for financial year ended on 31st March, 2013.

FINANCIAL RESULTS

The financial performance of the Company for the year ended March 31, 2013 is summarized below:-

(Rs. in Lacs)

Particulars 2012-2013 2011-2012 Sales/income from operation 12140.32 9704.62

Other Income 298.57 127.94

Less: Total Expenditure 10667.32 8219.33

(Including variation in stock) Profit before Interest, Depreciation & Tax 1771.57 1613.23

Less : Financial Expenses 594.97 588.91

Profit before depreciation & Tax 1176.60 1024.32

Less : Depreciation 701.38 669.36

Add : Withdrawl from Capital Reserve 16.71 15.02

Provision for Taxation (including Defferred Tax) 158.42 119.11

Profit/(Loss) after Tax 333.51 250.87



DIVIDEND

In order to conserve the resource of the company, your Directors express their inability to recommend a dividend for the financial year ended on 31st March, 2013.

RESULT OF OPERATIONS:

During the year under review, The Company was able to improve its performance in revenues from operations. Despite of challenging environment, the company has performed reasonably well and grew its revenues. The revenue from operation of the company for the year ended 31st March 2013 was Rs.12140.32 lacs as against Rs.9704.62 lacs in FY 2011-12, an increase of 25.10% on a year on year basis. Profit aftertax was Rs.333.51 lacs as against Rs.250.87 lacs in previous year..

Further Segment wise result of operation is as under- Textile Division:- During the year under review, its revenue from operations was Rs.12026.17 lacs including export sales of Rs. 7095.65 lacs (FOB) as against Rs. 8995.22 lacs including export of Rs. 4921.15 lacs (FOB) in previous year, growth of 33.70 %.The division has performed well during the year under review. The division had also achieved its level of exports (FOB) which were higher by 44.19% at Rs.7095.65 lacs as against Rs. 4921.15 lacs FY 2011-12.

Agency Division- The division has sold HDPELLDPE Granules 19151Mt. amounting to Rs.18317.81 lacs in comparison of 20911 Mt. amounting to Rs.17470.00 lacs and earned commission of Rs.77.21 lacs as compared to last year Rs. 85.51 lacs.

Woven Sacks Division:- During the year under review, its revenue from operations was Rs. 36.77 lacs only in comparison to previous yearRs. 623.89 lacs. Now the company completely phased out woven sacks division.

Garment Division: The division is in initial stage and presently doingjob work of textile division.

NETWORTH

The year saw your Company''s Net worth growing from Rs. 2058.42 lacs in the previous year to Rs. 2415.84 lacs as on 31st March, 2013.

PERSONNEL

During the year under review, industrial relations continue to be cordial. The Board wishes to place on record its appreciation for the valuable services rendered by the entire work force, during the year under review, achieved good quality production.

There were no employees whose remuneration was in excess of the limits prescribed under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

DIRECTORS:

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Nitin Jaipuria & Mr. Rameshwar Pareek, Directors, who retire by rotation at the forthcoming Annual General Meeting and being, eligible offer themselves for reappointment.

Mr. Raj Kumar Agarwal and Mrs. Prity Singhal were appointed as Additional Directors with effect from 17/06/2013 under Section 260 of the Act and liable to hold office upto the ensuing Annual General Meeting, being eligible offers them for re-appointment. The Company has received necessary notice under Section 257 of the Act. Board of Directors recommends their appointment.

Further the Board in its meeting held on 17.06.2013 appointed, Mrs.Prity Singhal as Executive Director (Whole time Director), subject to the approval of shareholders in their ensuing Annual General Meegting for three years.

Brief resume of the above appointee Directors are given elsewhere in the Annual Report.

DIRECTORS''RESPONSIBILITY STATEMENT:

In terms of section 217 (2AA) of the Companies Act, 1956, your Directors confirm as under:-

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relatingto material departures;

2. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year as at 31st March, 2013 and of the profit of the Company forthe year;

3. That the Directors have 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 preventingand detecting fraud and other irregularities; and

4. That the annual accounts were prepared on a going-concern basis.

CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS

Reports on Corporate Governance and Management Discussion and Analysis as stipulated under Clause 49 of the Listing Agreement are separately given in the Annual Report and forms part of the Director Report.

INTERNAL CONTROL SYSTEM ANDTHEIRADEQUACY

The Management continuously reviews the internal control systems and procedure for the efficient conduct of the company''s business. The Internal Auditors of the company conducts the audit on regular basis and the audit committee actively reviews internal audit reports and effectiveness of internal control systems.

AUDITORS & AUDITOR''S REPORT

The Company''s Auditors, M/s. P.C Modi & Co. Chartered Accountants, who are statutory auditor of the company hold office upto the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the company for the Financial Year 2013-14. As required under provision of the Section 224 (IB) of the Companies Act, 1956, the company has obtained written confirmation from M/s. P.C Modi & Co. that their appointment if made, would be in conformity with the limits specified in the said Section.

COST AUDITORS

The Cost Audit Report for the financial Year 2011-12, which was due to be filed with Ministry of Corporate Affairs on February 2013, was filed on 29.01.2013 by M/s. Chittora & Co; Cost Accountants. The Cost Audit Report for the year 2012-13 is under process and will be filed before the due date.

PUBLIC DEPOSITS:

During the year, the Company has not accepted any deposits under Section 58A of the Companies Act, 1956.

COMPLIANCE REPORT

Towards, company''s commitment to transparency and due compliance of applicable laws, the Board is pleased to enclose compliance report in annexure "A" for the year 2012-2013 as a part of the Director Report.

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

Information in accordance with Sec. 217(l)(e) of the companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rule,1988 is given in Annexure ''B'' forming part of this report.

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation for the assistance and co operation received from Central and State Government Authorities, Regulatory Bodies, Banks. The Board also recognized the contribution of the esteemed customers, vendors, bankers and business associates in the growth of the Company.

The Director also wish to acknowledge the committed and dedicated team of KG Petrochem whose unstinted hard work, efforts and ideas have taken the Company on a path of steady growth and Development. We take this opportunity to thank the employees for their contribution to the growth and success of your company. We would also like to thank all other stakeholders and business associate fortheir report.

For & on behalf of the Board of Director

Place:JAIPUR (G.S Kandoi)

Date : 17th June, 2013 Chairman


Mar 31, 2012

The directors are pleased to present their 32nd Annual Report and audited accounts for financial year ended on 31st March, 2012.

FINANCIAL RESULTS

The financial performance of the Company for the year ended March 31, 2012 is summarized below:-

(Rs. in Lacs) Particulars 2011-2012 2010-2011

Sales/income from operation 9704.62 7976.80

Add : Other Income 127.94 118.70

Less: Total Expenditure 8219.33 7058.21 (Including variation in stock)

Profit before Interest, Depreciation & Tax 1613.23 1037.29

Less : Financial Expenses 588.91 351.64

Profit before depreciation & Tax 1024.32 685.65

Less : Depreciation 669.36 567.41

Add : Withdrawl from Capital Reserve 15.02 41.94

Provision for Taxation (including Defferred Tax) 119.11 62.11

Profit/(Loss) after Tax 250.87 98.07

RESULT OF OPERATIONS

During the year under review the company was able to improve its performance in revenues from operations. Despite of challenging environment, the company has performed reasonably well and grew its revenues. The revenue from operation of the company for the year ended 31st March 2012 was Rs.9704.62 lacs as against Rs.7976.80 lacs in FY 2010-11, an increase of 21.66% on a year to year basis. Profit after tax was Rs.250.87 lacs as against Rs.98.07 lacs in previous year.

Further Segment wise result of operation is as under:-

Textile Division:- During the year under review, its revenue from operations was Rs. 8995.22 lacs including export sales of Rs. 4921.15 lacs (FOB) as against Rs 7239.57 lacs including export of Rs 2652.22 Lacs (FOB) in previous year, growth of 24.25 %.The division has performed well during the year under review. The division had also achieved its record level of exports (FOB) which were higher by 85.55% at Rs.4921.15 lacs as against Rs.2652.23 lacs FY 2010-11. Due to increase in demand of embroidered Towel, Company has decided to add more embroidery machine along with other Machineries.

Agency Division- The division has sold HDPE/LLDPE Granules 20911 MT amounting to Rs.17470 lacs in comparison of 16325 MT amounting to Rs. 12325 lacs and earned commission of Rs. 85.51 lacs as compared to last year Rs. 68.68 lacs.

Woven Sacks Division:- During the year under review, its revenue from operations was Rs. 623.89 Lacs in comparison to previous year Rs.668.55 Lacs i.e. decreased 6.68%. During the current financial year the company completely closed manufacturing activities of the division.

New unit: Looking at the market scenario and demand of terry garment, Board has decided to start up a new unit namely MANTIKA GARTEX at Jaipur, as woven sack division has been closed. The unit will start commercial production from November 2012 onwards.

NET WORTH

The year saw your Company's Net worth growing from Rs. 1792.28 lacs in the previous year to Rs. 2058.42 lacs as on 31st March, 2012.

PERSONNEL

During the year under review, industrial relations continue to be cordial. The Board wishes to place on record its appreciation for the valuable services rendered by the entire work force, during the year under review, achieved good quality production.

There were no employees whose remuneration was in excess of the limits prescribed under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

DIVIDEND

In order to conserve the resource of the company, your Directors express their inability to recommend a dividend for the financial year ended on 31st March, 2012.

DIRECTORS: In terms of the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Amar Chand Gupta who retire by rotation at the ensuing AGM has tendred his unwillingness to be continiued a director with effect from 18.07.2012 for reappointment.

The Company has received notice under section 257 of Companies Act,1956 from a member along-with his deposit of Rs. 500/- signifying the intention to propose Mr. Kamlesh Sharma as Independent Director of the company whose period of office is liable to retire by rotation.

Further the board in its meeting held on 21.06.2012 recommended for reappointment of Mr. G.S.Kandoi, as Chairman Cum Managing Director and Shri Manish Singhal as Executive Director subject to approval of Shareholders in their ensuing Annual General Meeting, w.e.f. 30.07.2012 respectively for further period of three years.

Brief resume of the above appointee Directors are given elsewhere in the Annual Report.

DIRECTORS'RESPONSIBILITY STATEMENT:

In terms of section 217 (2AA) of the Companies Act, 1956, your Directors confirm as under-

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year as at 31st March, 2012 and of the profit of the Company for the year;

3. That the Directors have 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; and

4. That the annual accounts were prepared on a going-concern basis.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Reports on Corporate Governance and Management Discussion and Analysis as stipulated under Clause 49 of the Listing Agreement are separately given in the Annual Report and forms part of the Director Report.

INTERNAL CONTROL SYSTEM ANDTHEIR ADEQUACY

The Management continuously review the internal control systems and procedure for the efficient conduct of the company's business. The Internal Auditors of the company conducts the audit on regular basis and the audit committee actively reviews internal audit reports and effectiveness of internal control systems.

AUDITORS & AUDITOR'S REPORT

The Company's Auditors, M/s. Kalani and Co., Chartered Accountants, Jaipur who retire at the ensuing AGM, have express their unwillingness to be reappointed as Auditor of the company.

A Special notice in terms of provision of Section 190 of the Companies Act, 1956 read with section 225 of the Act has also been received from share holders of the company for the appointment of new auditor M/s. P.C Modi & Co., Chartered Accountants in place of the retiring auditors M/S Kalani &Co., Chartered Accountant from the conclusion of ensuing AGM. M/s. P.C Modi has confirmed their eligibility under section 224 of the Companies Act, 1956 for appointment as Auditors of the company.

The auditor report is self explanatory and their observation have been substantial dealt with the notes to the accounts and do not require any further clarification.

COST AUDITORS

As per order no. F.No. 52/26/CAB-2010 dated 24.01.2012 issued by Ministry of Corporate Affairs (Cost Audit Branch ) it is necessary for the company to appoint the Cost Auditor for the financial year 2012-13.

On the recommendation of the Audit committee, the Board of Directors of the Company in their meeting held on 21.06.2012 has appointed M/s Chittora & Co., Cost Accountant as Cost Auditor of the Company to audit the cost record of the company for the financial year 2012-13.

PUBLIC DEPOSITS: During the year, the Company has not accepted any deposits under Section 58A of the Companies Act, 1956.

COMPLIANCE REPORT

Towards, company's commitment to transparency and due compliance of applicable laws, the Board is pleased to enclose compliance report in annexure "A" for the year 2011-2012 as a part of the Director Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS ANDOUTGO

Information in accordance with Sec. 217(l)(e) of the companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rule,1988 is given in Annexure 'B' forming of this report.

ACKNOWLEDGEMENTS

Your Directors would like to express their appreciation for the assistance and co operation received from Central and State Government Authorities, Regulatory Bodies, Banks. The Board also recognized the contribution of the esteemed customers, vendors, bankers and business associates in the growth of the Company.

The Director also wish to acknowledge the committed and dedicated team of KG Petrochem whose unstinted hard work, efforts and ideas have taken the Company on a path of steady growth and Development. We take this opportunity to thank the employees for their contribution to the growth and success of your company. We would also like to thank all other stakeholders and business associate fortheir report.

For & on behalf of the Board of Director

Place: JAIPUR (G.S Kandoi)

Date : 21st June, 2012 Chairman


Mar 31, 2010

The Directors take great pleasure in presenting their 30th Annual Report on the business and operations of the Company and the audited financial statements for the year ended March 31,2010

The facts and figures presented before you reflect more than just your Companys financial performance. You will also find results of your company, managements effort to take your company from strength to strength even in this highly competitive and volatile market, producing better returns in turn.

FINANCIAL RESULTS

(Rs. in Lacs)

2009-2010 2008-2009

Sales/income from operation 6189.79 5507.09

Other Income 70.66 62.20

Total Expenditure

(Including variation in stock) 5447.20 4535.33

Profit before Interest,

Depreciation & Tax 813.25 1033.96

Financial Expenses 133.16 157.43

Extraordinary Item 126.00 0.00

Profit/(Loss ) before depreciation & Tax 554.09 876.53

Depreciation 439.52 415.37

Provision for Taxation 16.04 267.35

Profit/(Loss) after Tax 98.53 193.81

Profit & Loss brought forward 898.77 704.97

Balance Carried to Balance Sheet 997.30 898.78



RESULT OF OPERATIONS

During the year the company was able to improve its performance in terms of sales, specially in Textile Division & Agency Division. The overall total income from operation had increased from Rs.5507.09 lacs to Rs.6189.79 lacs, a growth of 12.40% over the previous financial year. The Net Profit aftertax decreased from Rs 193.81 lacs to Rs.98.53 lac The decrease in the income mainly due to derivative loss and loss of health care division.

Further Segment wise result of operation is as under-Woven Sacks Division:- During the year under review, it has achieved turnover of Rs. 829.28 lacs in comparison to previous year Rs.1004.26 Lacs i.e. decreased 17.42%

Agency Division:- It earned commission of Rs. 39.77 lacs as compared to last year Rs. 34.59 lacs. The div. earned a profit of Rs.53.38 lacs as compared to previous year Rs.68.59 lacs.

Health Care Division:- The division has not achieved good performance during the year under review. It has achieved Income from operations of Rs. 22.45 lacs only in comparison to previous year Rs. 45.05 lacs i.e. decreased of 50.17%

Textile Division:- During the year under review, it has achieved income from operation of Rs. 5363.27 lacs including export sales of Rs. 2985.11 lacs as against Rs.4517.79 lacs including export of 2089.90 in previous year, growth of 18.71%.

The Company has diversified its business into four largely independent Division i.e Agency, Healthcare, Textile and Woven Sacks Division. While Health care Division phased out Completely and woven sacks is under process to phase out and Company full concentration is shifted towards textile division and agency division with a view to improve and strengthen its productivity and quality.

NET WORTH

Your company continued to perform creditability in 2009-2010, as well. The year saw your Companys Net worth growing from Rs. 1582.82 lacs in the previous year to Rs.1682.07 Lacs as on 31 st March, 2010.

MANUFACTURING AND QUALITY INITIATIVES

The Company follows the best practices for process/quality excellence. The Company also follows process/quality improvement methodologies.

In textile division your company could process 2452.97 MT yam during 2009-10 in comparison to 1971.848 MT yarn during 2008-09. The management is confident to maintain its present performance in future.

In woven sacks division your company could process 663.30 MT polymers during 2009-10 in comparison to 1180.075 MT polymers during 2008-09,as the main plant and machinery has been disposed off.

LABOUR RELATION

During the year under review, the labour relations remained satisfactory. The relations with the labours are cordial and all the workers, during the year under review, achieved good quality production.

EXPORT

The company is making efforts to export its terry towel products. This product is highly sophisticated and will enhance companys creditability in the international market. During the year under review the company made an export of its product worth Rs.2985.106 Lacs against Rs 2089.90 lacs in the year 2008-09.

DIVIDEND

Your Directors are unable to recommend any dividend during the year under review to conserve funds for expansion/diversification in new business

PROJECTS AND EXPANSIONS

Your Director are happy to report that during the year, steady progress has been made in all the ongoing expansion. In the current financial year 2010-11 would witness completion of second phase of Terry towel Division. The long term out look for terry towel is encouraging. The Company continued its emphasis on technology up gradation, modernization and product & market development. Its quality is well established and accepted in the international market. The Company started the production of embroidery terry towel which are fetching higher price realization.

As discussed in the previous annual general meeting, with the utmost zeal, the management of your company had started expansion of textile division from 3000 MTPA capacity to 6000 MTPA capacity. IDBI has sanctioned term loan of Rs.2750 lacs for the project The expansion of 1st phase almost completed and second phase expansion will be completed in the second quarter of year., and The Commercial production from the 1st phase started in the month of march 2010

The companys increased production capacity by upgraded technology and plant and machinery and product diversification upcoming with a new product shall result in improving the bottom line and company will perform better during current financial year.

DIRECTORS

In terms of the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Mr. Rameshwar Pareek retire by rotation at the ensuing AGM and is eligible for re-appointment and being eligible offer himself for reappointment. In the Annual General Meeting held on 23.09.09 Mr. Nitin Jaipuria was confirmed as Director of the Company,

DIRECTORS RESPONSIBILITY STATEMENT

In terms of section 217 (2AA) of the Companies Act, 1956, your Directors confirm as under:-

1. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

2. That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year as at 31st March, 2010 and of the profit of the Company forthe year.

3. That the Directors have 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.

4. That the annual accounts were prepared on a going-concern basis.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Reports on Corporate Governance and Management Discussion and Analysis as stipulated under Clause 49 of the Listing Agreement are separately given in the Annual Report and forms part of the Director Report.

COMMITTEES OF THE BOARD

There are following committees of the Board of Directors of the Company:-

Audit Committee

Remuneration Committee

Investor Grievance Committee

Share Transfer Committee

Finance Committee

The detailed report on the Committees, its constitution, its role/functions etc. forms part of the corporate governance report.

INTERNAL CONTROL SYSTEM

Your company maintains adequate internal control systems, which provide among other things, reasonable assurance of recording its operation in all material respect and regards against any misuse or loss of the companys assets. The Company has an internal audit team with professionally qualified financial personnel which conduct periodic audits of all businesses to maintain a proper system of checks and control.

AUDITORS

The Companys Auditors, M/s. Kalani and Co., Chartered Accountants, who retire at the ensuing AGM, and being eligible, offer themselves for re-appointment, to hold office from the conclusion of this meeting until the conclusion of the next annual general Meeting, Certificates from the Auditors has been received to the effect that their reappointment, if made .would be within the limit prescribed under section 224(1 B) of the companies act, 1956.

AUDITORSREPORT

The auditor report is self explanatory and their observation have been Substantial dealt with the notes to the accounts and do not require any further clarification

PARTICULARS OF EMPLOYEES

There were no employees whose remuneration was in excess of the limits prescribed under section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.

PUBLIC DEPOSITS

Company deposit accepted by the company are after complying with the provision of section 58A and 58AA of companies Act, 1956 and rules frame there under.

COMPANY SECREATARY CUM COMPLIANCE OFFICER

Mr. Vimal Tank has been appointed as Company Secretary with effect from 17th February, 2010 and also designated as Compliance Officer as per listing requirement with effect from 29th May,2010

COMPLIANCE REPORT

Towards, companys commitment to transparency and due compliance of applicable laws, the board is pleased to enclose compliance report in annexure "A" for the year 2009-2010 as a part of the Director Report.

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

Information in accordance with Sec.217(1)(e) of the companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of Board of Directors) Rule, 1988 is given in Annexure B forming of this report.

FORWARD LOOKING STATEMENTS

This report including Report on Corporate Governance, Management Discussion & Analysis contains forward-looking statements that involve risks and uncertainties. Your company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these statements.

ACKNOWLEDGEMENTS

The Board of Directors thanks the Companys customers, vendors, bankers and business associates for their support and assistance. The Company also expresses its gratitude to the DGFT, Ministry of Textile and various Governmental departments and organizations for their help and co-operation.

The Board places on record its appreciation to all the employees for their dedicated service. The Board appreciates and values the contributions made by every member and is confident that with their continued support the Company will achieve its objectives and emerge stronger in the coming years.

The Director also wish to acknowledge the committed and dedicated team of KG Petrochem whose unstinted hard work, efforts and ideas have taken the Company on a path of Steady growth and Development. We take this opportunity to thank the employees for their contribution to the growth and success of your company. We would also like to thank all other stakeholders and business associate for their report.

For and on behalf of the Board of Directors

Place:JAIPUR (G. S. Kandoi)

Date. 29,th MAY 2010 Chairman

 
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