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Directors Report of Suryajyoti Spinning Mills Ltd.

Mar 31, 2015

Dear Members,

The Directors submit their report for the financial year ended 31.03.2015:

Financial Summary:

(Rs. in Lacs)

Year ended Year ended Particulars 31.03.2015 31.03.2014

Net Sales 41244 46110

Profit before 4698 4470 Depreciation, Interest and taxes

Interest 4470 3758

Profit before 228 712 Depreciation and taxes

Depreciation 1099 2115

Profit (Loss) (871) (1403) before tax

Provision for Tax - -

Deferred Tax - (195) Liability (Asset)

Net Profit (Loss) (871) (1208) after taxes

Operations and Performances:

Due to sluggish demand for textile in domestic and export markets for the last 4 years, the performance of the Company had been adversely affected, resulting in losses. Due to continuous losses for the past 4 years and repayment of principal for some of the term loans despite of losses the liquidity of the Company has also been affected. Due to tight working capital situation, the capacity utilization was marginally lower compared to previous year. During the FY 2014-15 under review, your company has produced 15654 MTs of yarn and 99.81 lakh meters of fabric as against 16063 MTs of yarn and 106.94 mtrs of fabric in the year 2013-14. The net sale of the company was Rs. 412.24 crs as against Rs. 461.10 crs in the previous year. The company has incurred Net Loss of Rs. 8.71 crs as against Rs. 12.08 crs in the previous year.

Exports:

During the FY 2014-15 the FOB value of the Company exports was Rs. 133.04 crs as against Rs. 164.76 crs in the previous year. The fall in exports was due to sluggish demand for yarn in International market and also due to significant drop in Chinese import of yarn from India. The cotton yarn exports from India to China dropped by nearly 23%.

Capital Expenditure:

During the year under review your Company had incurred capital expenditure of Rs. 303.20 lacs.

Board of Directors:

Relevant information on composition of the Board and number of meetings is provided in 'Board of Directors' section of Corporate Governance Report which forms part of this Annual Report.

In terms of the provisions of Section 152 of the Companies Act, 2013, Sri Arun Kumar Agarwal, Director, would retire at the ensuing Annual General Meeting. He, being eligible offers himself for re- appointment. Your Board of Directors recommends his re-appointment. Brief profile of Sri Arun Kumar Agarwal has been provided elsewhere in this Annual Report.

The Board of Directors of the Company have appointed Shri Pankaj Goel as Additional Director with effect from 11th August, 2015. Pursuant to the provisions of Section 161 of the Companies Act, 2013, Shri Pankaj Goel shall hold office up to the date of the ensuing 32nd Annual General Meeting of the Company. Considering his varied experience and expertise, your Board recommends his appointment as an Independent Director of the Company.

Shri. R. Surender Reddy and Shri. Ankit Jain have resigned from the office Director on 13th November 2014 and 1 1th August 2015 respectively due to their pre-occupation and personal grounds. The Board placed on record its deep appreciation of the contributions made by Shri.R.Surender Reddy and Shri. Ankit Jain during their tenure as Director of the Company and wished them all success, happiness and best of health in life.

Audit Committee:

Relevant information on composition of the Audit Committee and number of meetings is provided in 'Audit Committee' section of Corporate Governance Report which forms part of this Annual Report.

Changes in Share Capital

During the year under review, your Company has issued and allotted 3,07,000, 10% Cumulative Redeemable Preference shares of Rs. 100/- each to Promoters and others on a preferential basis. Consequently the paid up Capital of the Company has increased from Rs. 35.31 crs to Rs. 38.38 crs.

Directors' Responsibility Statement:

Pursuant to the requirement under section 134 (5) of the Companies Act, 2013 with respect to Directors' Responsibility statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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

(c) 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) the Directors had prepared the annual accounts on a going concern basis; and

(e) 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) 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.

Statement on declaration by Independent Directors:

All Independent Directors have given declarations 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.

Nomination & Remuneration Policy:

The company follows a policy on remuneration of Directors and Senior Management Employees. The policy is approved by the Nomination & Remuneration Committee and the Board. More details on the same are given in the Corporate Governance Report.

Whistle Blower Policy:

The Company has a Whistle Blower Policy framed to deal with instance of fraud and mismanagement, if any in the Company. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company.

Related Party Transactions:

All the related party transactions were entered on arm's length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Agreement. There are no materially significant related party transactions made by the company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the company at large. All Related Party Transactions are presented to the Audit Committee and to the Board.

Omnibus approval is obtained for the transactions which are foreseeable and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. The Related Party Transactions Policy as approved by the Board is uploaded on the company's website at the web link: http://www. suryajyoti.com/policyonrelated.pdf

Particulars of Loans, Guarantees or Investments:

No Loans/Guarantees / Investments under Section 186 of the Companies Act, 2013 have been made during the year to the parties listed therein.

Transfer to reserves:

In view of the loss incurred by the Company, no profits are transferred to reserves.

Dividend

In view of the loss incurred, the Board of Directors of the Company expresses their inability to recommend any dividend for the year under review.

Risk Management Policy:

The Company has instituted a proper mechanism for identifying and establishing controls to effectively manage different kinds of risks viz., Trend Related Risks, Raw Material Risks, Brand Technology Risks, Operational Quality Risks, Human Resources Risks, Regulatory Risks and Financial Risks. The management periodically reviews the risks and takes steps to mitigate identified risks.

Performance Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. A structured questionnaire was prepared after circulating the draft forms, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture and performance of specific duties, obligations and governance.

Familiarization Program for Independent Directors:

The Company has formulated a familiarization program for the Independent Directors to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company. The details of such program are available in the Company's website www. suryajyoti.com.

Fixed Deposits:

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.

Extract of Annual Return:

An Extract of Annual Return prepared in accordance with Section 92(3) of the Act in Form MGT-9 is annexed as Annexure - I' to this report.

Management Discussion & Analysis:

Pursuant to the provisions of Clause 49 of the Listing Agreement, a report on Management Discussion & Analysis is herewith annexed as 'Annexure - II' to this report.

Corporate Governance:

The Company has been making every endeavor to bring more transparency in the conduct of its business. As per the requirements of the Listing Agreement with the Stock Exchanges, a compliance report on Corporate Governance for the year 2014-15 and a Certificate from the Auditors of the Company are furnished which form part of this Annual Report.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Company has in place an Anti Sexual Harrasment Policy in line with the requirements of the Sexual Harrassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trained) are covered under the Policy. The following is a summary of sexual harassment complaints received and disposed off during each year:

a) No. of Complaints received - NIL

b) No. of Complaints disposed off - NIL

Human Resources:

Your Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes utmost care to attract and retain quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Company's vision. Your Company appreciates the spirit of its dedicated employees.

Significant and material orders passed by the regulators or courts:

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

Statutory Auditors:

M/s Brahmayya & Co., Chartered Accountants, the statutory auditors of the Company holds office upto the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness for re-appointment.

Internal Auditors:

The Board of Directors based on the recommendation of the Audit Committee have re-appointed M/s. K.S.Rao & Co., Chartered Accountants, Hyderabad, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on quarterly basis.

Cost Auditors:

In accordance with Section 148(3) of the Companies Act, 2013 and The Companies (Audit and Auditors) Rules, 2014, the Audit Committee has recommended and the Board of Directors had appointed M/s.S.G.Ramakrishna & Co., Cost Accountants, Hyderabad, being eligible and having sought re- appointment, as Cost Auditors of the Company, to carry out the cost audit of the products manufactured by the Company during the financial year 2015-16 on a remuneration of Rs. 19,000/- . The remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Members' ratification for the remuneration payable to M/s.S.G.Ramakrishna & Co., Cost Accountants, is included at Item No.6 of the Notice convening the Annual General Meeting.

Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mrs. N. Madhavi, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as 'Annexure - III' to this report.

Particulars of Employees:

There are no employees in the Company, particulars of whom are required to be furnished under Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The industrial relations were cordial at all units of the Company.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

The particulars as prescribed under section 134 (3) (m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are set out in 'Annexure - IV' to this report.

Acknowledgements:

Your Directors wish to place on record their appreciation for the valuable support and co- operation extended by State Bank of India, IDBI Bank, State Bank of Hyderabad, Indian Overseas Bank and State and Central Government Agencies.

Your Directors also wish to place on record their sincere appreciation of the contribution made by the employees of the Company and are thankful to the Shareholders for their continued patronage and support.

For and on behalf of the Board of Directors

R.K. AGARWAL A.K. AGARWAL Managing Director Executive Director DIN: 00011349 DIN: 00011126

Place : Secunderabad Date : 11th August, 2015


Mar 31, 2014

The Members,

The Directors have pleasure in presenting the 31st Annual Report together with the audited accounts for the financial year ended 31st March 2014.

i. Board of Directors:

Relevant information is provided in ''Board of Directors'' section of Corporate Governance Report.

In terms of the provisions of Section 152 of the Companies Act, 2013, Sri Sanjeev Mitla, Director, would retire at the ensuing Annual General Meeting. He, being eligible offers himself for re-appointment. Your Board of Directors recommends his re-appointment. Brief profile of Sri Sanjeev Mitla has been provided elsewhere in this Annual Report.

The Board of Directors of the Company have appointed Shri R. Surender Reddy as Additional Director with effect from 14th February, 2014. Pursuant to the provisions of Section 161 of the Companies Act, 2013, Shri R. Surender Reddy shall hold office up to the date of the ensuing 31st Annual General Meeting of the Company. Considering his varied experience and expertise, your Board of Directors recommends his appointment as Director of the Company.

Further the Board proposes to appoint all the existing independent Directors viz., Sri R. Surender Reddy, Sri Sanjeev Mitla and Sri K. Harishchandra Prasad each for a term of 5 years pursuant to Section 149 of the Companies Act, 2013.

Dr. A. Nageswara Rao left this mortal world on January 22, 2014. The Board places on record the valuable services rendered during his tenure as Director.

The Board also recommends the appointment of Smt. Neha Agarwal as Director of the Company.

ii. AUDIT COMMITTEE:

Relevant information is provided in ''Audit Committee'' section of Corporate Governance Report.

iii. Directors'' Responsibility Statement:

Pursuant to the requirement under section 134 (5) of the Companies Act, 2013 with respect to Directors'' Responsibility statement, it is hereby confirmed:

a) Applicable accounting standards have been followed with explanation for any material departures

b) Selected accounting policies have been applied consistently 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 and loss of the company for that period.

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities

d) The annual accounts are prepared on a going concern basis; and

e) the internal financial controls laid have been followed by the company and that such controls are adequate and are operating effectively.

f) 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.

iv. Statement on declaration by Independent Directors

The Company has received declarations from the Independent Directors stating that they fulfill the criteria of independence.

ix. Miscellaneous

a. Financial Summary/highlights

(Rs in Lacs) Particulars As at As at 31-03-2014 31-03-2013

Gross Sales 46111 40812

Net Sales 46110 40810

Profit before

Depreciation and taxes 712 5.93

Depreciation 2115 2019

Profit (Loss) before tax (1403) (2013)

Provision for Tax - -

Deferred Tax Liability

(Asset) (195) (604)

Profit (Loss) after taxes (1208) (1409)

Add: Balance brought

forward from last year 2642 4051

Add: MAT Credit

Entitlement - -

Balance carried to

Balance Sheet 1434 2642

b. Change in the nature of business - NA

c. Fixed Deposits:

The Company has not invited/accepted deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

d. Corporate Governance:

Pursuant to Clause 49 of the Listing Agreement on Corporate Governance: (a) Management Discussion and Analysis, (b) Report on the Corporate Governance and (c) Certificate from the Auditors'' of the Company regarding compliance of the Corporate Governance also forms part of this Annual Report.

e. Auditors:

M/s Brahmayya & Co., Chartered Accountants, the statutory auditors of the Company holds office upto the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness for re-appointment.

f. Cost Auditors:

Pursuant to the provisions of section 233B of the Companies Act, 1956 and with the prior approval of the Central Government Mr. S.G. Ramakrishna, Practising Cost Accountant has been appointed to conduct audit of cost records of four units of the Company for the financial year ended 31st March 2014. The Cost Audit Reports would be submitted to the Central Government within the prescribed time.

The Cost Audit Reports for the year ended 31st March, 2013 pertaining to the four units of the Company were filed with the Central Government on 23rd September 2013.

g. Particulars of Employees:

There are no employees in the Company, particulars of whom are required to be furnished

under Section 217 (2A) of the Companies Act, 1956. The industrial relations were cordial at all units of the Company.

h. Acknowledgements:

Your Directors wish to place on record their appreciation for the valuable support and co-operation extended by State Bank of India, IDBI Bank, State Bank of Hyderabad, Indian Overseas Bank and State and Central Government Agencies.

Your Directors also wish to place on record their sincere appreciation of the contribution made by the employees of the Company and are thankful to the Shareholders for their continued patronage and support.

For and on behalf of the Bo3ard of Directors R.K. AGARWAL Managing Director

Place : Secunderabad A.K. AGARWAL Date : 30 May, 2014 Executive Director


Mar 31, 2012

The Directors have pleasure in presenting the 29th Annual Report together with the audited accounts for the financial year ended 31st March 2012.

FINANCIAL RESULTS

(Rs. in Lacs)

Particulars As at As at 31-03-2012 31-03-2011

a) Gross Sales 40034.01 39428.41

b) Net Sales 40029.35 39425.60

c) Profit before Depreciation and taxes 621.56 4117.57

d) Less: Depreciation 1918.08 1884.26

e) Profit (Loss) before tax (1296.52) 2233.31

f) Provision for Tax - 475.00

g) Deferred Tax Liability (Asset) (253.72) 175.32

h) Profit (Loss) after taxes (1042.80) 1582.99

i) Add: Balance brought forward from last year 5093.77 2971.91

j) Add: MAT Credit Entitlement - 538.86

k) Balance carried to Balance Sheet 4050.97 5093.77

OPERATIONS

Production:

Your Company had produced during the year 15,906 MTs of yarn as against 16,795 MTs in 2010-11. During the year, the Company produced 85.73 lakh meters of Fabric as against 82 lakhs meters in 2010-11.

Sales:

Your Company achieved Net sales of Rs. 40,029 lakhs compared to Rs. 39426 lakhs for the year 2010-11. Company had earned a net loss of Rs. 1042.80 lakhs during the year 2011-12, when compared with a net profit after tax of Rs.1583 lakhs during the year 2010-11. The main reasons for incurring net loss are closing stock of cotton purchased at higher prices during the previous year, increase in interest costs by around 3% and steep power cuts of 3 days in a week imposed by APCPDCL during fourth quarter and purchase of power from Indian Energy Exchange at an average rate of Rs.10/- per unit which is three times per unit rate of Rs.3.25 being charged by APCPDCL.

Changes in Share Capital:

During the year, the Company has allotted 11,70,000 Equity shares of Rs.10/- each at a premium of Rs.21 per share to the Promoters on conversion of equal number of warrants.

Dividend:

In view of the loss incurred by the company during the financial year 2011-12, no dividend is recommended by your Board of Directors.

Capital Expenditure:

During the year under review your Company had incurred capital expenditure of Rs. 1965 lakhs.

Exports:

Your Company has achieved exports amounting to Rs. 17,942 lakhs, produced within its own plant. Including yarn procured from outside, your company has achieved export turnover of Rs. 17,968 lakhs when compared with the turnover of Rs. 17,863 lakhs in the previous year.

Your Company has its product presence in Latin America, Europe and Far East.

Directors:

In terms of the provisions of Section 255 and 256 of the Companies Act, 1956, Sri. Sanjeev Mitla and Sri. K. Harishchandra Prasad would retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Your Board of Directors recommends their re-appointment.

Brief profiles of Sri. Sanjeev Mitla and Sri. K. Harishchandra Prasad, the nature of their expertise in specific functional areas and the number of Companies in which they hold Directorships and memberships/Chairmanships of Committees of the Board, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, have been provided elsewhere in this Annual Report.

Directors' Responsibility Statement:

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956 with respect to Directors' Responsibility statement, it is hereby confirmed:

(i) That in the preparation of the accounts for the financial year ended 31st March 2012, the applicable accounting standards have been followed and there were no material departures;

(ii) That the directors have selected such accounting policies and applied them consistently and made judgements and estimates which 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 the year under review;

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

(iv) That the directors have prepared the accounts for the financial year ended 31st March 2012 on a 'going concern' basis.

Corporate Governance:

Pursuant to Clause 49 of the Listing Agreement on Corporate Governance: (a) Management Discussion and Analysis, (b) Report on the Corporate Governance and (c) Certificate from the Auditors' of the Company regarding compliance of the Corporate Governance also form part of this Annual Report.

Auditors:

M/s Brahmayya & Co., Chartered Accountants, who are the statutory auditors of the Company hold office upto the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness for re-appointment.

Cost Auditors:

Mr. S.G. Ramakrishna, Cost Accountant, was appointed as Cost Auditor of the Company subject to the consent of the Government of India to conduct cost audit of all the divisions of the Company for 2012-13.

Fixed Deposits:

The Company has not invited/accepted deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

The particulars as prescribed 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 are set out in Annexure I to this report.

Particulars of Employees:

There are no employees in the Company, particulars of whom are required to be furnished under Section 217 (2A) of the Companies Act, 1956. The industrial relations were cordial at all units of the Company.

Acknowledgements:

Your Directors wish to place on record their appreciation for the valuable support and co- operation extended by State Bank of India, IDBI Bank, State Bank of Hyderabad, Indian Overseas Bank and State and Central Government Agencies.

Your Directors also wish to place on record their sincere appreciation of the contribution made by the employees of the Company and are thankful to the Shareholders for their continued patronage and support.

For and on behalf of the Board of Directors

R.K. AGARWAL Managing Director

A.K. AGARWAL Executive Director

Place: Secunderabad Date : 30th May, 2012


Mar 31, 2010

The Directors have pleasure in presenting the 27th Annual Report together with the audited accounts for the financial year ended 31 st March 2010.

FINANCIAL RESULTS

(Rs.in Lacs)

As at As at 31-03-2010 31-03-2009

a) Gross Sales 26953.90 20952.76

b) Net Sales 26953.33 20952.32

c) Profit before

Depreciation and taxes 1718.17 1299.65

d) Less: Depreciation 166.49 809.89

e) Profit Before Tax 551.68 489.76

f) Provision for Tax 95.00 97.00

g) MAT Credit Entitlement 0.00 (38.35)

h) Fringe Benefit Tax 0.00 9.00

i) Deferred Tax Liability 90.92 121.58

j) Profit after taxes 365.76 300.53

k) Add: Balance brought forward from last year 2606.15 2305.62

l) Balance carried to Balance Sheet 2971.91 2606.15

OPERATIONS

Production:

Your Company had produced during the year 16975 MTs of yarn as against 16103 MTs in 2008-09 resulting an increase in production by 5%. Your Company had also processed 2552733 metres of Fabric from October 2009 to March 2010.

Sales:

Your Company achieved a turnover of Rs.26,953 lakhs compared to Rs.20,952 lakhs for the year 2008-09 representing an increase of around 29%. Your Company had earned a net profit after tax of Rs.366 lakhs during the year 2009-10, when compared with a net profit after tax of Rs.300 lakhs during the year 2008-09 resulting an increase of 22%.

Changes in Share Capital:

There are no changes in the share capital during the year.

Dividend:

In view of the necessity of ploughing back of profits to meet the repayment obligations, your Directors are unable to recommend dividend.

Modernisation and Expansion:

The forward integration project taken up by the Company to set up weaving and processing unit, to process 20 million metres Fabric per annum, at Kucherkal Village, Mahabubnagar District, A.R, had commenced Commercial Production w.e.f. 1st October 2009.

Capital Expenditure:

During the year under review your Company had incurred capital expenditure of Rs.2864 lakhs.

Exports:

Your Company has exported yarn produced within its own plant amounting to Rs. I 1,248 lakhs. Out of this, yarn valued Rs.275 lakhs was exported through third parties. Including yarn procured from outside, your company has achieved export turnover of Rs. 11,889 lakhs when compared with the turnover of Rs. 10,263 lakhs in the previous year.

Your Company has its product presence in Latin America, Europe and Far East.

Directors:

In terms of the provisions of Section 255 and 256 of the Companies Act, 1956, Sri K. Harishchandra Prasad and Sri Sanjeev Mitla would retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Your Board of Directors recommends their re-appointment.

Brief profiles of Sri K. Harishchandra Prasad and Sri Sanjeev Mitla, the nature of their expertise in specific functional areas and the number of Companies in which they hold directorships and memberships/ Chairmanships of Committees of the Board, as

stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, have been provided elsewhere in this Annual Report.

Directors Responsibility Statement:

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956 with respect to Directors Responsibility statement, it is hereby confirmed:

(i) That in the preparation of the accounts for the financial year ended 31st March 2010, the applicable accounting standards have been followed and there were no material departures;

(ii) That the directors have selected such accounting policies and applied them consistently and made judgements and estimates which 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 the year under review;

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

(iv) That the directors have prepared the accounts for the financial year ended 31 st March 2010 on a going concern basis.

Corporate Governance:

Pursuant to Clause 49 of the Listing Agreement on Corporate Governance: (a) Management Discussion and Analysis, (b) Report on the Corporate Governance and (c) Certificate from the Auditors of the Company regarding compliance of the Corporate Governance also form part of this Annual Report.

Auditors:

M/s Brahmayya & Co., Chartered Accountants, who are the statutory auditors of the Company hold office upto the conclusion of the ensuing Annual General Meeting and have confirmed their eligibility and willingness for re-appointment.

Cost Auditors:

Mr. S.G. Ramakrishna, Cost Accountant, was appointed as Cost Auditor of the Company subject to the consent of the Government of India to conduct cost audit of all divisions of the Company for 2010-11.

Fixed Deposits:

The Company has not invited / accepted deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

The particulars as prescribed under section 217 (I) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in Annexure I to this report.

Particulars of Employees:

The information required under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 given in Annexure - II. The industrial relations were cordial at all units of the Company.

Acknowledgements:

Your Directors wish to place on record their appreciation for the valuable support and co-operation extended by State Bank of India, IDBI Bank, State Bank of Hyderabad, Axis Bank Limited, Indian Overseas Bank and State and Central Government Agencies.

Your Directors also wish to place on record their sincere appreciation of the contribution made by the employees of the Company and are thankful to the Shareholders for their continued patronage and support.

For and on behalf of the Board of Directors

R.K. AGARWAL

Managing Director

Place: Secunderabad A.K. AGARWAL

Date: 29th May, 2010 Executive Director

 
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