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Directors Report of Pasupati Acrylon Ltd.

Mar 31, 2015

To the Members

The Directors have pleasure in presenting Annual Report of the Company together with the Audited Accounts for the year ended on 31st March, 2015.

FINANCIAL RESULTS

Salient financial results during the year under review as compared to the previous year are mentioned below:-

(Rs./ Crores)

2014-15 2013-14

Sales (Gross) & Other Income 595.24 591.29

Profit before Interest & Depreciation 40.18 31.95

Financial Charges 7.62 9.83

Depreciation 7.32 8.26

Profit / (Loss) before Taxes 25.25 13.86

Tax Expenses for the year :-

- Current Tax (0.31) (0.07)

- Deferred Tax Assets (6.89) (3.35)

Exceptional Items (3.47) (3.18)

Profit /(Loss) after Taxes 14.57 7.26

The Directors do not recommend dividend for the year.

RESULTS OF OPERATIONS AND STATE OF COMPANY''S AFFAIRS

The Company has recorded a production of 33628 MT and Sale of 32148 MT during the year under review as against 31814 MT and Sale of 32838 MT respectively during the previous year. The gross turnover during the year stands to Rs.587.52 Crore as against Rs.587.54 Crore in the previous year.

EXPORTS

The Company''s exports during the year under review were of Rs.124.79 Crore as compared to Rs.67.55 Crore in the previous year i.e. an increase of 84%.

DIRECTORS

Shri M M Kohli, Director of the company has passed away on 23.03.2015, Board placed its deep condolences on his sad demise and its appreciation for the valuable services rendered by him.

PICUP withdrawn nomination of Shri R K Gupta and appointed Shri D K Sharma in his place w.e.f 02.02.2015, Board placed on record its appreciation for the valuable services rendered by him.

The Board of Directors had appointed Shri D K Kapila and Smt Soma Garg as additional director of the Company in the category of Independent Directors w.e.f 25.05.2015 and 07.08.2015 respectively. They will hold office upto the date of forthcoming Annual General Meeting and is eligible for appointment as a Director.The Company has received notices in writing from members proposing their candidature for the office of Director.

The Board proposes to appoint subject to your approval Shri S C Malik a Non Executive Director of the Company in the category of Independent Director.

All independent Directors have declared that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and clause 49 of the Listing Agreement.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

The Remuneration Policy is stated in the Corporate Governance Report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 134(3) (c) of the Companies Act, 2013, your Directors to the best of their knowledge and belief and according to the information and explanations obtained by them, hereby confirm:

a) That in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) That 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 ended 31st March, 2015 and of the profit of the company for the year ended on that date;

c) That 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;

d) That the directors had prepared the annual accounts on a going concern basis;

e) That 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;

f) That 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.

CORPORATE GOVERNANCE

The company has complied with the Corporate Governance code as stipulated under the listing agreement executed with the Stock Exchanges. A separate section on Corporate Governance, along-with a certificate from the auditors of the Company is annexed and forms part of this Report

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

None of the transactions with any of the related parties were in conflict with your companies interest. Attention of members is drawn to the disclosure of transactions with related parties set out in Note No.32 of the Financial Statements forming part of this Annual Report. All related party transactions are negotiated on arm''s length basis and are intended to further your Company''s interest.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your directors have constituted the Corporate Social Responsibility Committee (CSR Committee).The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the frame work of the CSR Policy and recommending the amount to be spent on CSR Activities.

RISK MANAGEMENT

During the year, your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board to overseeing and approving the Companies Risk Management framework and all the risks that the company faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with reference to financial statements.During the year such controls were tested and no reportable material weakness in the design or operation were observed.

AUDITORS AND AUDITORS REPORT

Statutory Auditors

M/s. B. K. Shroff & Co., Chartered Accountants, New Delhi, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. They have confirmed their eligibility to the effect that their re- appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment.

The notes on financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments.The Auditors report does not contain any qualification, reservation or adverse remark.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed M/s. V.K. Sharma & Co, Practicing Company Secretaries, to undertake Secretarial Audit for the financial year 2014-15.The Secretarial Audit Report for the Financial Year ended 31st March 2015 is annexed herewith to this Report.

The Secretarial Audit Report as annexed is self-explanatory and do not call for any further comments.

DISCLOSURES:

Audit Committee

Company has an Audit Committee of the Board of Directors in place.The terms of reference of the Audit Committee are in line with Section 177of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement. Detailed information pertaining to Audit Committee has been provided in the Corporate Governance Report, which forms part of this Annual Report.All recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism

The Company has established a Vigil Mechanism policy in accordance with the provisions of the Companies Act, 2013 read with Rules there under and the Listing Agreement with the stock exchanges to deal with the instances of fraud and mismanagement. The details of the vigil mechanism are posted on the website of the Company.

Meetings of the Board

During the year four meetings of the Board of Directors were held. The maximum interval between any two Board Meeting did not exceed 120 (One hundred twenty) days.

Particulars of Loans given, Investments made, Guarantees given and Securities provided.

Particulars of Loans given, Investments made, Guarantees given and Securities provided along with the purpose for which the Loan or guarantee or security is proposed to be utilized by the Company is provided in financial statement .

Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo.

Particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo as required to be disclosed under the Act, are annexed hereto and form part of this Report.

Extract of Annual Return

A separate report on the details of the Extract of Annual Return in form MGT9 is Annexed herewith, which form part of the Director''s Report.

Particulars of Employees and related disclosures.

Provisions of Section 197 (12) of the Act read with Rules 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel ) Rules, 2014,are not attracted as none of the employees drawing excess remuneration of the limits set out in the said Rules. ISO CERTIFICATION

Your Company is an ISO 9001:2000, accredited by Bureau of Indian Standard, Rooid Voor Accreditatie, Netherland. This certification indicates our commitments in meeting global quality and standards.

FIXED DEPOSITS

The company does not accept fixed deposits.

INTERNAL CONTROL SYSTEM AND ADEQUACY

Your company has been maintaining a well-established procedure for internal control system. For the purpose of financial control, company is adequately staffed with experienced and qualified personnel at all levels and plays an important role in implementing and monitoring the statutory and internal policy control environment. There has been a review conducted on regular interval by the internal auditors about the financial and operating control at various locations of the company and any significant findings are reviewed by the Audit Committee of the Board of Directors.

ACKNOWLEDGEMENT

Your Directors wish to place on record their deep appreciation of the continued support and co-operation received from Financial Institutions, Banks and Shareholders, the State and Central Government.

Your Directors also wish to place on record their appreciation of the devoted services of the Company''s employees, who have diligently contributed to the Company''s progress.

For and on behalf of the Board

Rakesh Mundra Vineet Jain Director (Finance) Managing Director & Company Secretary

Place : New Delhi Dated : 7th August, 2015


Mar 31, 2014

To the Members

The Directors have pleasure in presenting Annual Report of the Company together with the Audited Accounts for the year ended on 31st March, 2014.

FINANCIAL RESULTS

Salient financial results during the year under review as compared to the previous year are mentioned below:-

(Rs./ Crores) 2013-14 2012-13

Sales (Gross) & Other Income 591.29 468.20

Profit before Interest & Depreciation 31.95 7.59

Financial Charges 9.83 12.71

Depreciation 8.26 4.72

Profit / (Loss) before Taxes 13.86 (9.84)

Tax Expenses for the year :-

- Current Tax 0.06 0.03

- Deferred Tax (Net of prior period effect) 3.36 (2.94)

Exceptional Items 3.18 -

Profit /(Loss) after Taxes 7.26 (6.93)

The Directors do not recommend dividend for the year.

OPERATIONS

The Company has recorded production of 31814 MT and Sale of 32838 MT during the year under review as against 29127 MT and Sale of 28977 MT respectively during the previous year, posting a strong growth of 9% and 13% respectively. The gross turnover during the year increased to Rs.587.54 Crore from Rs.463.88 Crore in the previous year, an increase of 27%

EXPORTS

The Company''s exports during the year under review were of Rs.67.55 Crore as compared to Rs.33.56 Crore in the previous year i.e. an increase of 101%. The company is exporting to Iran, China, Bangladesh, Pakistan, South America and Africa.

MANAGEMENT DISCUSSION & ANALYSIS

a) Industry Structure and Development

The Demand of Acrylic Fibre during the year was better than the previous year and your company has sold 32838 MT during the year as compared to 28977 MT during the previous year. During the current year it is expected that momentum will continue.

b) Opportunities and Threat

Principal raw material of your company is A C N which is a by-product of crude oil. The crude oil prices continue to be volatile in the international market resulting direct impact on the A CN prices. The A C N is largely imported as such the upward fluctuation in foreign exchange i.e. USD vs. INR adversely affects the margin of the Company.

Import of Acrylic Fibre at a low price from various countries more particularly from Thailand is causing serious injury to domestic Industry.

c) Segment-wise / Product-wise performance

The Company has only one segment i.e. Acrylic Fibre.

d) Risk and Concern

Since Company uses imported raw materials as such upward movement in USD and Crude oil adversely affect the margin. To derisk the company is increasing its exports. During the Financial Year 2013-14 exports have gone up to Rs.67.55 Cr. from Rs.33.56 Cr. in the Financial Year 2012-13.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE AND CORPORATE SOCIAL RESPONSIBILITY POLICY UNDER THE COMPANIES ACT 2013

In the Board Meeting held on 26th May 2014, your directors have constituted the Corporate Social Responsibility Committee comprising Shri M.M. Kohli as Chairman and Shri Vineet Jain and Shri S.C. Malik as Members.

The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the frame work of the CSR Policy and recommending the amount to be spent on CSR Activities.

ISO CERTIFICATION

Your Company is an ISO 9001:2000, accredited by Bureau of Indian Standard, Rooid Voor Accreditatie, Netherland. This certification indicates our commitments in meeting global quality and standards.

FIXED DEPOSITS

The company does not accept fixed deposits from public.

DIRECTORS

As per terms and conditions of appointment Shri Rakesh Mundra, Director retires in the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Company has received requisite notices in writing from members proposing Shri M.M. Kohli and Shri S. Sathyamoorthy for appointment as Independent Directors.

The company has received declarations from the Independent Directors, Confirming that they meet with the criteria of Independence as prescribed both under Sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

DIRECTORS'' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956.

Your Directors hereby confirm that:-

i) in the preparation of the annual accounts, the applicable accounting standards had been followed alongwith proper explanation

relating to material departures; ii) the directors had selected such accounting policies and applied them 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 at the end of the financial year and

of the profit of the company for that year; 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 on a going concern basis.

HUMAN RESOURCES/INDUSTRIAL RELATIONS

The Company valued human resources as its most valuable assets, among all other assets of the company. It has been the policy of the company to actuate the talent by providing opportunities to develop themselves within the organisation. The company continued to have a very cordial and harmonious relation with its employees.

INTERNAL CONTROL SYSTEM AND ADEQUACY

Your company has been maintaining a well-established procedure for internal control system. For the purpose of financial control, company is adequately staffed with experienced and qualified personnel at all levels and plays an important role in implementing and monitoring the statutory and internal policy control environment. There has been a review conducted on regular interval by the internal auditors about the financial and operating control at various locations of the company and any significant findings are reviewed by the Audit Committee of the Board of Directors.

EMPLOYEES

There was no employee drawing remuneration in excess of ceiling(s) prescribed under section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

CORPORATE GOVERNANCE

The company has complied with the Corporate Governance code as stipulated under the listing agreement executed with the Stock Exchanges. A separate section on Corporate Governance, alongwith a certificate from the auditors of the company confirming the compliance is annexed and forms part of this Report.

COST AUDIT

The report of Shri Satnam Singh Saggu, Cost Accountants, in respect of the Cost Accounts of the company for the year ended 31st March, 2014 will be submitted to the Central Government in due course.

AUDITORS AND THEIR REPORT

M/s. B.K.Shroff & Co., Chartered Accountants, New Delhi retires at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment. The Company has received certificates from them under Section 224(1-B) of the Companies Act, 1956.

The Auditors in the report, while referring to Schedule No.12 to Notes on Accounts, for the Financial Year 2013-14 commented on the inability to express any opinion on the future profitability projections made by the Company and their consequential impact, if any, on the Deferred Tax Assets recognized in the said accounts.

In the opinion of the Company, based on future profitability estimates in view of commissioning of new Power Plant and enhancement in capacity, the company is virtually certain that there would be sufficient taxable income available in future to claim the tax credit.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

A statement giving details of conservation of energy, technology absorption and foreign exchange earning and outgo in terms of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto and form part of this Report.

ACKNOWLEDGEMENT

Your Directors wish to place on record their deep appreciation of the continued support and co-operation received from Financial Institutions, Banks and Shareholders, the State and Central Government.

Your Directors also wish to place on record their appreciation of the devoted services of the Company''s employees, who have diligently contributed to the Company''s progress.

for and on behalf of the Board for and on behalf of the Board Rakesh Mundra Vineet Jain Director (Finance) & Company Managing Director Place : New Delhi Dated : 11th August,2014


Mar 31, 2013

To the Members

The Directors have pleasure in presenting Annual Report of the Company together with the Audited Accounts for the year ended on 31st March, 2013.

FINANCIAL RESULTS

Salient financial results during the year under review as compared to the previous period are mentioned below:-

(Rs./ Crores)

2012-13 2011-12

Sales (Gross) & Other Income 468.20 435.01

Profit before Interest & Depreciation 15.32 2.08

Financial Charges 12.71 10.23

Depreciation 4.72 2.94

Profit / (Loss) before Taxes (2.11) (11.09)

Tax Expenses for the year :-

- Current Tax 0.03 0.03

- Deferred Tax Assets 2.94 3.81

Exceptional Items — Exchange Fluctuation Loss / (gain) 7.73 14.84

Extra-ordinary Income / (Expense) - 13.45

Profit /(Loss) after Taxes (6.93) (8.70)

The Directors do not recommend dividend for the year.

OPERATIONS

The Company has recorded a production of 29127 MT and Sale of 28977 MT during the year under review as against 24718 MT and 26726 MT respectively during the previous year, posting a strong growth of 20% and 8% respectively. The gross turnover during the year increased to Rs.463.88 Crores from Rs.431.08 Crores in the previous year.

During the year under review company suffered losses as Acrylonitrile (ACN), the principal raw material witnessed volatile scenario, also USD rose sharply against INR.

During current year it is expected that demand of Acrylic Fibre both in domestic and international market shall remain strong, also the A C N prices have now stabilized. The USD also expected to move within a range as the Government is taking various steps to tackle Current Account Deficit. As such barring un- foreseen circumstances the Company shall do better in the current year.

ISO CERTIFICATION

Your Company is an ISO 9001:2000, accredited by Bureau of Indian Standard, Rooid Voor Accreditatie, Netherland. This certification indicates our commitments in meeting global quality and standards.

FIXED DEPOSITS

The company does not accept fixed deposits from public.

DIRECTORS

Mr. S. Sathyamoorthy and Mr. S.C. Malik, Directors retires by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for re-appointment.

DIRECTORS'' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956.

Your Directors hereby confirm that:-

i) in the preparation of the annual accounts, the applicable accounting standards had been followed alongwith proper explanation relating to material departures;

ii) the directors had selected such accounting policies and applied them 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 at the end of the financial year and of the loss of the company for that year;

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 on a going concern basis.

HUMAN RESOURCES/INDUSTRIAL RELATIONS

The Company valued human resources as its most valuable assets, among all other assets of the company. It has been the policy of the company to actuate the talent by providing opportunities to develop themselves within the organisation. The company continued to have a very cordial and harmonious relation with its employees.

INTERNAL CONTROL SYSTEM AND ADEQUACY

Your company has been maintaining a well-established procedure for internal control system. For the purpose of financial control, company is adequately staffed with experienced and qualified personnel at all levels and plays an important role in implementing and monitoring the statutory and internal policy control environment. There has been a review conducted on regular interval by the internal auditors about the financial and operating control at various locations of the company and any significant findings are reviewed by the Audit Committee of the Board of Directors.

EMPLOYEES

There was no employee drawing remuneration in excess of ceiling(s) prescribed under section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

CORPORATE GOVERNANCE

The company has complied with the Corporate Governance code as stipulated under the listing agreement executed with the Stock Exchanges. A separate section on Corporate Governance, alongwith a certificate from the auditors of the company confirming the compliance is annexed and forms part of this Report.

COST AUDIT

The reports of Mr. Satnam Singh Saggu, Cost Accountants, in respect of the Cost Accounts of the company for the year ended 31st March, 2013 will be submitted to the Central Government in due course.

AUDITORS AND THEIR REPORT

M/s. B.K.Shroff & Co., Chartered Accountants, New Delhi retires at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment. The Company has received certificates from them under Section 224(1-B) of the Companies Act, 1956.

The Auditors in the report, while referring to Note No.13 to Notes on Accounts, for the Financial Year 2012-13 commented on the inability to express any opinion 0n the future profitability projections made by the Company and their consequential impact, if any, on the Deferred Tax Assets recognized in the said accounts.

In the opinion of the Company, based on future profitability estimates in view of commissioning of new Power Plant and enhancement in capacity, the company is virtually certain that there would be sufficient taxable income available in future to claim the tax credit.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

A statement giving details of conservation of energy, technology absorption and foreign exchange earning and outgo in terms of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto and form part of this Report.

ACKNOWLEDGEMENT

Your Directors wish to place on record their deep appreciation of the continued support and co-operation received from Financial Institutions, Banks and Shareholders, the State and Central Government.

Your Directors also wish to place on record their appreciation of the devoted services of the Company''s employees, who have diligently contributed to the Company''s progress.

for and on behalf of the Board

Rakesh Mundra Vineet Jain

Director (Finance) & Company Secretary Managing Director

Place : New Delhi

Dated : 29th May, 2013.


Mar 31, 2012

The Directors have pleasure in presenting Annual Report of the Company together with the Audited Accounts for the year ended on 31st March, 2012.

FINANCIAL RESULTS

Salient financial results during the year under review as compared to the previous period are mentioned below:-

(Rs. in Crores)

2011-12 2010-11

Sales (Gross) & Other Income 435.01 426.28

Profit before Interest & Depreciation 2.08 13.54

Financial Charges 10.23 7.03

Depreciation 2.94 2.85

Profit / (Loss) before Taxes (11.09) 3.66 Tax Expenses for the year :-

- Current Tax 0.03 0.02

- Deferred Tax Assets 3.81 -

Exceptional Items - Exchange Fluctuation Loss / (gain) 14.84 (2.68)

Extra-ordinary Income / (Expense) 13.45 (5.85)

Profit /(Loss) after Taxes (8.70) 0.47

The Directors do not recommend dividend for the year.

OPERATIONS

The Company has recorded a production of 24718 MT and Sale of 26726 MT during the year under review as against 27863 MT and 25081 MT respectively during the previous year. The gross turnover during the year was Rs.431.08 Crores as against Rs.423.23 Crores in the previous year.

During the year under review, profitability is adversely affected due to exorbitant price increase i.e., to the tune of 30 to 50 percent by Coal India Limited. On account of such abnormal price increase, Company had to burden additional expense on power & fuel. Secondly, during the year under review due to economic upheaval in European Union / Euro zone and depleting US economy, the USD to INR rose sharply, As the company is dependent upon imports, due to this sudden sharp & unexpected increase it had to suffer significant amount of foreign exchange loss despite of its proactive approach.

The Company has written back CENVAT credit of Rs.13.45 Crores written off in earlier year in these accounts, as the custom/excise duty imbalance stands corrected and company is increasing its exports as such there is virtual certainty of its recovery.

The new power plant is commissioned during the later part of the year; it is designed to run on multi fuel i.e. coal, pet coke and rice husk.

As explained above company had to suffer heavy losses due to sharp increase of coal prices as there was no option except to use coal, but now with the commissioning of new power plant the company would be in a position to alter the fuel from coal to pet coke/ rice husk to its advantage.

Production from new line has also started during the current year, due to increase in production the company would be in a position to derive economy of scale benefit. With the commissioning of power plant and new line it is expected that cost of production shall go down, which would give competitive advantage, as such barring unforeseen circumstances the company expects to post better profitability during the current year.

ISO CERTIFICATION

Your Company is an ISO 9001:2000, accredited by Bureau of Indian Standard, Rooid Voor Accreditatie, Netherland. This certification indicates our commitments in meeting global quality and standards.

FIXED DEPOSITS

The company does not accept fixed deposits from public.

DIRECTORS

Mr.M.M. Kohli, Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for re-appointment. Mr. S.C. Malik, Director (Finance) retired on 16.01.2012. Your Directors placed on record their appreciation for the valuable services rendered by Mr. Malik during his tenure. On account of his vast experience he is inducted in the Board as Additional Director w.e.f 14.02.2012. Mr. Rakesh Mundra is appointed Director (Finance) and Company Secretary w.e.f. 14.2.2012, subject to your approval.

During the year PICUP withdrew nomination as Director Mr. K.D. Sharma and nominated Mr. Devender Singh in his place. Your Directors placed on record their appreciation for the valuable services rendered by Mr. K.D. Sharma, during his tenure.

DIRECTORS' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956.

Your Directors hereby 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 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 at the end of the financial year and of the loss of the company for that year;

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 on a going concern basis.

HUMAN RESOURCES/INDUSTRIAL RELATIONS

The Company valued human resources as its most valuable assets, among all other assets of the company. It has been the policy of the company to actuate the talent by providing opportunities to develop themselves within the organisation. The company continued to have a very cordial and harmonious relation with its employees.

INTERNAL CONTROL SYSTEM AND ADEQUACY

Your company has been maintaining a well-established procedure for internal control system. For the purpose of financial control, company is adequately staffed with experienced and qualified personnel at all levels and plays an important role in implementing and monitoring the statutory and internal policy control environment. There has been a review conducted on regular interval by the internal auditors about the financial and operating control at various locations of the company and any significant findings are reviewed by the Audit Committee of the Board of Directors.

EMPLOYEES

There was no employee drawing remuneration in excess of ceiling(s) prescribed under section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975.

CORPORATE GOVERNANCE

The company has complied with the Corporate Governance code as stipulated under the listing agreement executed with the Stock Exchanges. A separate section on Corporate Governance, along with a certificate from the auditors of the company confirming the compliance is annexed and forms part of this Report.

COST AUDIT

The Report of Mr. Satnam Singh Saggu, Cost Accountants, in respect of the Cost Accounts of the company for the year ended 31s1 March, 2012 will be submitted to the Central Government in due course.

AUDITORS AND THEIR REPORT

M/s. B.K.Shroff &¦ Co., Chartered Accountants, New Delhi retires at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment. The Company has received certificates from them under Section 224(1-B) of the Companies Act, 1956.

The Auditors in the report, while referring to Note No.13 to Notes on Accounts, for the Financial Year 2011-12 commented on the inability to express any opinion on the future profitability projections made by the Company and their consequential impact, if any, on the Deferred Tax Assets recognized in the said accounts.

In the opinion of Board of Directors, based on future profitability estimates in view of commissioning of new Power Plant and enhancement in capacity, the company is virtually certain that there would be sufficient taxable income available in future to claim the tax credit.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

A statement giving details of conservation of energy, technology absorption and foreign exchange earning and outgo in terms of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto and form part of this Report.

ACKNOWLEDGEMENT

Your Directors wish to place on record their deep appreciation of the continued support and co-operation received from Financial Institutions, Banks and Shareholders, the State and Central Government.

Your Directors also wish to place on record their appreciation of the devoted services of the Company's employees, which have in great way contributed to the Company's progress.

For and on behalf of the Board

Rakesh Mundra Vineet Jain

Director (Finance) & Company Secretary Managing Director

Place : New Delhi

Dated : 30th May, 2012


Mar 31, 2010

The Directors have pleasure in presenting Annual Report of the Company together with the Audited Accounts for the period ended on 31st March, 2010 (6 Months)

FINANCIAL RESULTS

Salient financial results during the period under review as compared to the previous period are mentioned below:-

(Rs. in Crores) 01.10.2009 to 31.03.2010 1.4.2008 to 30.09.2009

(6 Months) (18 months)

Sales (Gross) & Other Income 232.01 499.69

Profit before Interest & Depreciation 34.16 0.86

Financial Charges 3.22 12.27

Depreciation 8.62 9.06

Profit/(Loss) before Taxes , 22.32 (20.46)

Payment/Provision for Taxes 0.01 0.21

Extra-ordinary Income/ (Expense) (14.03) 17.94

Profit/(Loss) after Taxes - 8.28 (2.74)

The Directors do not recommend dividend for the period.





OPERATIONS

With a view to align the financial year with the income tax period the Board of Directors decided to move to April-March period. As such the present financial year of Company is consisting of six months i.e. from 01.10.2009 to 31.03.2010.

The Company has recorded a production of 14957 MT and a Sale of 16821 MT during the period (6 Months) under review as against 44948 MT and 43606 MT respectively during the previous period (18 Months). The gross turnover during the period was Rs.228.38 Crores (6 Months) as against Rs.496.82 Crores (18 Months) in the previous period.

The Company recorded an EBIDTA of Rs. 34.16 Crores for the period as against 0.86 Crore in the previous period. The Company could post good profits on the back of strong recovery in demand coupled with good prices.

As reported in earlier years due to inverted duty structure the Company is facing CENVAT credit accumulation, the situation is yet continuing. Though the Industry has time and again urged Government to provide relief by way of correcting the inverted duty structure but nothing has been done so far. The Company in these accounts charged Rs.13.45 Crores to Profit & Loss A/c on account of CENVAT accumulation as in the opinion of Board of Directors the Company would not be able to adjust the same against sales.

During the period under review the Company settled dues of a financial institution on one time settlement (OTS) basis. Interest waiver arising out of OTS amounting to Rs.6.37 Lacs has been credited to Profit & Loss Account and waiver in principal amounting to Rs.3.54 Lacs has been credited to Capital Reserve Account.

MANAGEMENT DISCUSSION & ANALYSIS

a) Industry Structure and Development

The Demand of Acrylic Fibre picked up during the period globally and domestically, mainly due to global recovery. During the current year the demand of Acrylic Fibre likely to remain good.

b) Opportunities and Threat

Leading international sportswear brands seeking to source their product from India as such the demand of the product is likely to remain strong. There exists scope for development of value added variants.

The Acrylic Fibre is surplus in many countries as such there are fears of dumping the same into India, though Govt of India has imposed anti dumping duty on imports from certain countries but still a lot need to be done to check the abnormal imports.

The Company is dependent on imported raw materials to a large extent and any increase in crude oil price and foreign exchange fluctuation adversely affects the prospects of the Company.

Acrylic Fibre competes with the Cotton and Polyester Fibre. The gap in the prices of Acrylic Fibre vis-a-vis cotton & polyester encourages

substitution of acrylic Fibre with these Fbres.

c) Segment-wise/Product-wise performance.

The Company has only one segment i.e. Acrylic Fibre.

d) Risk and Concern

The Company/Industry imports most of its requirement of raw-material i.e. A C N, M A, DMF etc. All these are derived from crude, as such any move upward or down ward affects the pricing of these products. But some times the prices do not move in tandem with crude as happening in recent time. For last couple of months the Crude is hovering around 75 USD Per Barrel while the A C N prices are ruling abnormally high. In such a circumstance the demand of the product affects adversely due to high selling prices, consequently the manufacturers faces inventory accumulation and consequently incurs losses. The global economic growth and trends in the coming year will also influence the Acrylic Fibre industry performance.

FUTURE OUTLOOK

The raw material prices are volatile so as the sale price. It remains to be seen as to where the raw material prices settle down. Your Company is making every effort to contain the cost and also pass on increase in cost due to increase in raw material prices to market. It will make efforts to adopt prudent and proactive measures to mitigate the situation.

EXPANSION OF CAPACITY

As reported last year your company is in the process to enhance capacity from 30000 MTPA to 42000 MTPA. The Company also plan to put up a Power Plant of 8 MW

The expanded production will add to the capabilities of the company to withstand the competition from domestic as well as international manufacturers

ISO CERTIFICATION

Your Company is an ISO 9001:2000, accredited by Bureau of Indian Standard, Rooid Voor Accreditatie, Netherland. This certification indicates our commitments in meeting global quality and standards.

FIXED DEPOSITS

The outstanding public deposits at the end of the accounting period under review amounted to Rs.Nil.

DIRECTORS

Shri M.M. Kohli and Shri S.C. Malik. Directors retires by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment. ,

DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217 (2AA) OF THE COMPANIES ACT, 1956.

Your Directors hereby confirm thar:-

i) in the preparation of the annual accounts, the applicable accounting standards had been followed alongwith proper explanation relating to material departures;

ii) the directors had selected such accounting policies and applied them 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 at the end of the financial period 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 on a going concern basis. HUMAN RESOURCES/INDUSTRIAL RELATIONS

The Company valued, human resources as its most valuable assets, among all other assets of the company. It has been the policy of the company to actuate the talent by providing opportunities to develop themselves within the organisation. The company continued to have a very cordial and harmonious relation with its employees. INTERNAL CONTROL SYSTEM AND ADEQUACY

Your company has been maintaining a well-established procedure for internal control system. For the purpose of financial control, company is adequately staffed with experienced and qualified personnel at all levels and plays an important role in implementing and monitoring the statutory and internal policy control environment. There has been a review conducted on regular interval by the internal auditors about the financial and operating control at various locations of the company and any significant findings are reviewed by the Audit Committee of the Board of Directors.

EMPLOYEES

Information under Section 217 (2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 is appended here with.

CORPORATE GOVERNANCE

The company has complied with the Corporate Governance code as stipulated under the listing agreement executed with the Stock Exchanges.

A separate section on Corporate Governance, alongwith a certificate from the auditors of the company confirming the compliance is annexed and forms part of this Report.

COST AUDIT

The reports of Mr.Satnam Singh Saggu, Cost Accountants, in respect of the Cost Accounts of the company for the period ended 31st March, 2010 will be submitted to the Central Government in due course.

AUDITORS AND THEIR REPORT

M/s. B.K.Shroff & Co., Chartered Accountants, New Delhi retires at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment. The Company has received certificates from them under Section 224(1-B) of the Companies Act, 1956.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

A statement giving details of conservation of energy, technology absorption and foreign exchange earning and outgo in terms of the Companies

(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto and form part of this Report.

ACKNOWLEDGEMENT

Your Directors wish to place on record their deep appreciation of the continued support and co-operation received from Financial Institutions,

Banks and Shareholders, the State and Central Government.

Your Directors also wish to place on record their appreciation of the devoted services of the Companys employees, which have in great way contributed to the Companys progress.

for and on behalt ot the Board

S. C Malik Vineet Jain Director (Finance) Managing Director

Place : New Delhi Dated : July 30, 2010.



 
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