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Directors Report of Uniply Industries Ltd.

Mar 31, 2015

To All members,

The Directors have pleasure in presenting the 19th Annual Report of the company along with the Audited Statement of Accounts for the year ended 31st March, 2015.

FINANCIAL RESULTS

The highlights of the financial results of the company for the year ended 31.03.2015 as compared with the previous year are as follows:

Rs. In Lacs For the year For the year PARTICULARS ended 31.03.2015 ended 31.03.2014

Gross Turnover 12710.07 17109.20

Less: Excise Duty & Sales Tax 1973.53 2505.88

Net Turn Over 10736.54 14603.32

Operating Profit 1148.95 431.83

Less-Finance Cost 920.38 698.28

Profit/(Loss) before Depreciation & Tax 228.57 (266.45)

Less: Depreciation & Amortization expenses 182.75 160.30

Profit/(Loss) before Taxation 45.82 (426.75)

Less: Provision for Taxation Wealth Tax 0.00 0.00

Deferred Tax 6.95 (131.87)

Profit/(Loss) after Tax 38.87 (294.88)

Balance brought forward (956.58) (661.70)

Provision for Dividend and Dividend tax - -

Transfer from General Reserve - -

Balance carried forward to next year (917.71) (956.58)

PERFORMANCE REVIEW

During the year of operation, your company has achieved a net turnover of Rs. 10736.54 lacs, as against the previous year net turnover of Rs. 14603.32 lacs with a decrease of 26.47%. The main reason of fall in top line is due to reduction in face Veneer sales. However the company has posted a net profit of Rs. 38.88 lacs against a net loss of Rs. 294.88 lacs in the previous year. This is inspite of high input and borrowing cost.

DIVIDEND

Keeping in view of the accumulated losses, your Directors regret their inability to declare any dividend.

TRANSFER TO RESEVE:

Since there is an accumulated loss nothing has been transferred to General Reserve.

DIRECTORS' RESPONSIBILITY STATEMENT

In compliance with section 134(3) (c) of the Companies Act, 2013, your Directors confirm:

a. That in the preparation of Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same.

b. That they 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 and of the profit or loss of the company for that period.

c. That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,2013 for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities;

d. That they have prepared the annual accounts on a going concern basis.

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively

SHARE CAPITAL

The Authorized capital and paid up Share Capital as on 31.03.2015 was Rs.20, 00, 00,000/- and Rs. 17, 31, 37,430/- respectively. During the year under review, the Company has not increased Authorized Capital as well as Paid Up capital of the Company.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility continues to assume an important role in the activities of the Company. It encompasses much more than social outreach programs and is an integral part of the way the Company conducts its business.

STATUTORY AUDITORS

At the Annual General Meeting held on September 8, 2014, M/s. C. Ramasamy & B. Srinivasan, Chartered Accountants, were appointed as Statutory Auditors of the company to hold office till the conclusion of 21st Annual General Meeting of the Company. In terms of provision of Section 139 of the companies Act, 2013, the appointment of Auditors shall be placed at every Annual General Meeting. Accordingly, the appointment of M/s. C. Ramasamy & B. Srinivasan, Chartered Accountants, as Statutory Auditors of the company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from Auditors to the effect that if they are reappointed, it would be in accordance with provisions of Section 141 of the Companies Act, 201 3.

EXPLANATION ON QUALIFICATION MADE BY STATUTORY AUDITOR

As regards to company's default in repayment of two EMI of term loans of Rs. 20,00,000/- each as observed in para ix of the Annexure to the Auditors Report, your directors wish to inform that the default is not intentional. The delay in repayment was due to some pending rearrangement of credit facilities with the banker and the same was not materialized subsequently during renewal of credit facilities. However the said pending term loan EMIs have been paid in full.

COST AUDIT/MANTAINANCE OF COST RECORDS

Mr. R.Shankaraman, practicing Cost Accountants was appointed as Cost Auditors of the company for maintenance of Cost Record/issue of Cost Compliance Report for the financial year 2014- 2015. However, our company was not falling under criteria given for maintenance of Cost Record/ Cost Audit as per the Companies (Cost Records and Audit) Rules, 2014. Hence cost audit/ Maintenance of cost record was not conducted.

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 M/s. PK Panda & Co., Practicing Company Secretaries, Chennai to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure A". The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined by the Audit Committee and delegated to Internal Auditor to maintain its objectivity and independence. The Internal Auditor reports to the Chairman of the Audit Committee of the Board and to the Chairman & Managing Director.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and promptly informed the management on the lacking as and when required.

FINANCE

Cash and cash equivalent as at March 31, 2015 was Rs. 62.66 lacs. The Company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

FIXED DEPOSITS

The Company has neither accepted nor renewed any Fixed Deposits from the public during the year under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

UPDATE ON OPEN OFFER UNDER SEBI TAKE OVER REGULATIONS 2011

During the year under review, Mr. B.L. Bengani & M/s. Dugar Merchandise Pvt Ltd, promoters of the Company, agreed to sell their entire equity stake in the Company to Mr. Keshav Kantamneni by way of a share purchase agreement dated 16.02.2015, in terms of the provisions of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Mr. Keshav Kantamneni issued a Public Announcement on 16.02.2015 to make an open offer to the equity shareholders of the Company. Accordingly the open offer process was was approved by SEBI and completed on 10.06.2015. Mr. Keshav Kantamneni acquired all the shares as per share purchase agreement by 30.06.2015.

DIRECTORS

During the period under review, the board has re-appointed all the existing Independent Directors as per the Companies Act,2013 and 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.

Mr. B.L Bengani, Chairman & Managing Director of the company has been reappointed on 18th Annual General Meeting of the Shareholder for a further period of 3 years w.e.f. 01.04.2015.

However he has tendered his resignation from Directorship w.e.f. 10.06.2015.

Mr. Keshav Kantamneni has been appointed as an Additional Director in the Board w.e f 10.06.2015 and on the same date appointed as chairman and Managing Director of the company for a period of three years with effect from 10.06.2015 at a Gross Remuneration of Rs.5, 00,000/- PM which is subject to the approval of the shareholders at the ensuing AGM.

The Board has appointed Mrs. K. Rajeswari, as woman Director and designated her as Additional Directors of the Company in the category of Executive Director with effect from 08.09.2014 and her tenure is going to be end on the ensuing AGM.

Mr. Ramgopal Lakshmi Ratan was also appointed as an Additional Director of the company in the category of Independent Director with effect from 13.03.2015 and his tenure is going to be end on the ensuing AGM.

The Company has received notices from the Members of the company under section 260 of the Companies Act, 2013 proposing their candidatures for the office of the Directors. The Board therefore recommends the appointment of Mrs. K. Rajeswari as a director of the company whose period of office will be liable to determination by retirement of directors by rotation, Mr. Mr. Ramgopal Lakshmi Ratan as Independent Director of the Company not liable to retire by rotation and Mr. Keshav Kantamneni as Director of the Company in the ensuing Annual General meeting of the Company.

KMP & CHANGES THEREIN

During the year under review the board has appointed Mr. Antaryami Sahoo as Company Secretary of the Company with effect from 26.06.2014, re-designated Mr. Raghuram Nath as CFO of the company with effect from 28.07.2014 in Compliance with sec 203 of the Companies Act, 2013. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

NOMINATION & 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 Nomination & Remuneration Policy is stated in Annexure-B.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The company has framed Familiarization Programme for Independent Directors pursuant to Equity Listing Agreement and uploaded the same in the website of the Company. The web link to access the aforesaid programme is http://www.uniply.in/pdfexcel/INDEPEDENT_DIRECTORS_ FAMILARISATION_PROGRAMME.pdf.

MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year under review six Board Meetings, four Audit Committee Meetings and other Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings were within the period prescribed under the Companies Act, 2013.

PARTICULARS OF EMPLOYEES

None of the employees of the Company is drawing remuneration in excess of limit prescribed under Section 197 of the Companies Act,2013 read with rule 5(2) & (3) of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014 which is required to be disclosed in the board report. The Information required to be disclosed on Annual Report under section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is stated in Annexure-C.

SUBSIDIARY COMPANIES

The company is not having any subsidiary.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. The Web link for the same is http://www.uniply.in/pdf-excel/RELATED_PARTY_ TRANSACTIONS_POLICYpdf.

None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism/Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the vigil mechanism/Whistle Blower Policy is posted on the website of the Company and available in this web link: http://www.uniply.in/pdf-excel/ WHISTLE_BLOWER_POLICYpdf EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as 'Annexure D".

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure E".

ENVIORNMENT & GREEN INITAIATIVE

The Company is committed to the environment. The Company continues to upkeep effluent and chemical treatment plant besides green belt inside the factory premises. Continuous check of air and water pollution at manufacturing unit is made and monitored. Your company is certified with FSC (Forest Stewardship Council) besides an existing member of IGBC.

LISTING WITH STOCK EXCHANGES

The Equity shares of the Company were listed with Bombay Stock Exchange Ltd. (BSE) & National Stock exchange of India Limited (NSE).

FOREIGN EXCHANGE MANAGEMENT

During the year under review, the Company has incurred a forex loss of Rs. 8.85 lacs against a loss of Rs. 128.80 lacs in the previous year. The management has adopted required foreign currency hedging mechanism from time to time to safeguard from exchange loss. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

In order to prevent sexual harassment of women at work place a new act, The Sexual Harassment

of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act our company has constituted an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. During the year under review, the ICC has not received or disposed any complaints relating to sexual harassment at work place of any women employee.

HUMAN RESOURCES

Your Company treats its "human resources" as one of its most important assets.

Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

INDUSTRIAL RELATIONS

During the Year under review, Your Company enjoyed cordial relationship with workers and employees at all levels.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM (i.e. 08.09.2014), with the Ministry of Corporate Affairs.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS.

The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate sections, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement.

ACKNOWLEDGEMENTS

Your Company and its Directors wish to extend their sincerest thanks to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous cooperation and assistance.

For and on behalf of the Board of Directors

Keshav Kantamneni K. Rajeswari Managing Director Director

Place: Chennai Date: 25.07.2015


Mar 31, 2014

To All members,

The Directors have pleasure in presenting the 18th Annual Report of the company along with the Audited Statement of Accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS

The highlights of the financial results of the company for the year ended 31.03.2014 as compared with the previous year are as follows:

Rs. In Lacs

For the year For the year PARTICULARS ended ended 31.03.2014 31.03.2013

Gross Turnover 17109.20 14605.54

Less: Excise Duty and Sales Tax 2505.88 2384.15

Net Turn Over 14603.32 12221.39

Operating Profit 431.83 188.77

Less: Finance costs 698.28 631.31

Profit/(Loss) before Depreciation & Tax (266.45) (442.54)

Less: Depreciation & Amortization expenses 160.30 149.42

Profit/(Loss) before Taxation (426.75) (591.96)

Less: Provision for Taxation

Wealth Tax 0.00 0.10

Deferred Tax (131.87) (182.35)

Profit/(Loss) after Tax (294.88) (409.71)

Balance brought forward (661.70) (251.99)

Provision for Dividend and Dividend tax - -

Transfer from General Reserve - -

Balance carried forward to next year (956.58) (661.70)

PERFORMANCE REVIEW

During the year of operation, your company has achieved a net turnover of Rs. 14603.32 lacs, as against the previous year net turnover of Rs. 12243.67 lacs with a growth of 19.27%. However, The management is enduring its hard work to accomplish improved results in the years to come on all fronts like minimising operational costs, brand building and etc.

DIVIDEND

Keeping in view of the accumulated losses, your Directors regret their inability to declare any dividend.

DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance with Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (amendment) Act, 2000, your Directors confi rm:

a. That in the preparation of Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same.

b. That they 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 and of the profit or loss of the company for that period.

c. That they 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 your company and for preventing and detecting fraud and other irregularities;

d. That they have prepared the annual accounts on a going concern basis.

SHARE CAPITAL

During the year under review the Authorised share capital of the Company has been incresed from Rs. 1500,00,000 to Rs. 2000,00,000 vide shareholders resolution passed on EGM dated 19.03.2014. Paid up share capital has also been increased from Rs. 14,36,37,430 to Rs. 17,31,37,430 from same date.

PREFERENTIAL ISSUE

During the year under review, the Company has allotted 29,50,000 Equity Shares of Rs. 10/- each as fully paid up to a group of non promoters on preferential basis in accordance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. The above said Equity Shares rank pari:passu with the existing equity shares of the Company and are subject to lock-in-period of one year from the date of trading approval.

CORPORATE GOVERNANCE

Your Company is committed to business integrity, high ethical values and professionalism in all its activities. As an essential part of this commitment, the Board of Directors supports high standards in corporate governance. It is the endeavor of the Board and the executive management of your Company to ensure that their actions are always based on principles of responsible corporate management. In your company, corporate governance is seen as an ongoing process. Your Company''s Board will therefore closely follow future developments in the governance norms and will take lead in ensuring compliance with the same. A separate report on Corporate Governance along with the certifi cate of the Auditors, confi rming compliance of the conditions of corporate governance, as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges is annexed.

The Ministry of Corporate Affairs has made majority of the provisions of the Companies Act, 2013 effective from 1st April, 2014. The new act is a positive step towards strengthening corporate governance regime in the country. Your Company is already in substantial compliance of most of the governance requirements provided under the new law. Your Company has proactively adopted provisions related to formation of Nomination and Remuneration Committee and Stakeholders relationship Committee, ahead of implementation of the new law. Your Company is committed to embrace the new law in letter and spirit.

BOARD COMMITTEES

During the period under review, The Board of Directors have reconstituted and renamed all the committees to comply the provisions of the Companies Act, 2013 and Listing Agreement. Accordingly the company has now Audit Committee, Stakeholder Relationship & Grievance committee and Nomination &

Remuneration Committee. All the members of these committees are independent & non executives. The details of members of these Committees are slated in Corporate Governance Report annexed to this.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility continues to assume an important role in the activities of the Company. It encompasses much more than social outreach programs and is an integral part of the way the Company conducts its business.

STATUTORY AUDITORS

M/s. C. Ramasamy & B. Srinivasan, Chartered Accountants FRN 002957S, Statutory Auditors of the company until conclusion of 18th Annual General Meeting and recommended for reappointment upto the conclusion of 21st Annual General Meeting. The Company has received a certifi cate from them to effect that the reappointment, if appointed, would be within the limits prescribed under Companies Act, 2013.

COST AUDIT & COST AUDITOR

Mr. R. Shankaraman, practicing Cost Accountants was appointed as Cost Auditors of the company for the year 2013-14. As per various notifi cations issued by MCA from time to time and opinion sought from Cost Auditor the cost audit is not applicable to our company for the year 2013-14 and hence cost audit was not conducted.

However Company has obtained Cost Audit Compliance Certifi cate for the period ended 31.03.2014 issued by Mr. R. Shankaraman, Cost Accountant and the same shall be filed with MCA accordingly.

SECRETARIAL AUDITOR

The Board has appointed M/s. P.K. Panda & Co., Practicing Company Secretaries, Chennai as Secretarial Auditor of the Company as per Section 204 of the Companies Act, 2013 to issue Secretarial Audit Report for the financial year 2014-2015.

INTERNAL AUDITOR

The Board has appointed M/s. Prasanna Rath & Associates Cost Accountants, Chennai as Internal Auditor of the Company for the fi -nancial year 2014-2015.

DIRECTORS

The tenure of Managing Director is going to end on 31.03.2015 and Board reappointed him for a further period of 3 years w.e.f 01.04.2015 that is subject to approval of shareholders in the ensuing AGM.

Mr. R. Kuppu Rao has resigned from the Board w.e.f. 20.07.2014

Mr. Sudhir Kumar Jena, Mr. Ramakanta Panda and Mr. Shaine Sunny Mundaplakkal are going to be reappointed as Independent Directors of the Company for a term of 5 years with effect from 01.04.2014, not liable to retire by rotation in the ensuing AGM as per respective provisions and Schedule-IV of Companies Act, 2013.

FIXED DEPOSITS

The Company has neither accepted nor renewed any Fixed Deposits from the public during the year under review.

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

The statement containing the necessary information as required under Companies (Disclosure of Particulars in Report of Board of Directors) Rules 1988, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are annexed hereto and forms an integral part of this report.

ENVIORNMENT & GREEN INITAIATIVE

The Company is committed to the environment. The Company continues to upkeep effluent and chemical treatment plant besides green belt inside the factory premises. Continuous check of air and water pollution at manufacturing unit is made and monitored. Your company is certified with FSC (Forest Stewardship Council) besides an existing member of IGBC.

PARTICULARS OF EMPLOYEES PURSUANT TO THE COMPANIES ACT, 2013

None of the employees is drawing remuneration in excess of limit prescribed the companies Act, 2013 and rule thereto for which disclosures to be made.

LISTING WITH STOCK EXCHANGES

The Equity shares of the Company were listed with Bombay Stock Exchange Ltd. (BSE) & National Stock exchange of India Limited (NSE).

FOREIGN EXCHANGE MANAGEMENT

During the year under review, the Company has incurred a forex loss of Rs. 128.80 lacs against a loss of Rs. 70.00 lacs in the previous year. The management has adopted required foreign currency hedging mechanism from time to time to protect from exchange loss.

EVOTING FACILTY:

The Company has entered into a tripartite agreement with CDSL and Cameo Corporate Services Limited, RTA of the company for proving eVoting facility to the shareholders for promoting better shareholders participation on the proposed resolutions to be passed on the ensuing AGM to be held on Monday, 8th September 2014. M/s. P.K. Panda & Co, practicing Company Secretaries were appointed as the Scrutinizers for conducting the eVoting in a fair and transparent manner.

The shareholders are requested to participate in the eVoting System and helps management for taking shareholders informative decision for the betterment of the company. The eVoting facility will open for voting on 02.09.2014 at 9.00 a.m and closed at 5.00 p.m on 03.09.2014.

For and on behalf of the Board

Place: Chennai B.L. Bengani

Date: 28.07.2014 Chairman & Managing Director


Mar 31, 2013

Dear shareowners,

The Directors have pleasure in presenting the 17th Annual Report of the company along with the Audited Statement of Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

The highlights of the financial results of the company for the year ended 31.03.2013 as compared with the previous year are as follows:

(Rs in Lacs)

For the year ended For the year ended PARTICULARS 31.03.2013 31.03.2012

Net Turn Over 12221.39 12102.87

Profit before Interest, Depreciation & Tax 118.94 989.13

Less: Interest 561.48 542.33

Profit/(Loss) before Depreciation & Tax (442.54) 446.80

Less: Depreciation 149.42 144.53

Profit/(Loss) before Taxation (591.96) 302.27

Less: Provision for Taxation

Wealth Tax 0.10 0.15

Deferred Tax (182.35) 92.69

Profit/(Loss) after Tax (409.71) 209.43

Balance brought forward (251.99) (461.42)

Provision for Dividend and Dividend tax

Transfer from General Reserve

Balance carried forward to next year (661.70) (251.99)

PERFORMANCE REVIEW

During the year under review, your company had achieved a nett turnover of Rs.12221.39 lakhs as against the previous year''s nett turnover of Rs.12102.87 lakhs with a marginal growth of Rs.118.52 lakhs. The company has posted a nett loss of Rs.409.71 lakhs for the year as against a nett profit of Rs.209.43 lakhs in the previous year. The main attributing reasons for the loss was the increase in the cost of raw materials, power and fuel, manpower and transportation and could not be passed on to the customers. As a result, profitability has been impacted adversely.

DIVIDEND

Keeping in view the operational loss during the year and accumulated loss, your Directors regret their inability to recommend any dividend for the year 2012-13.

SUBSIDIARIES & ASSOCIATES

During the year under review M/s. Surge Trading Limited (STL) the Wholly Owned Subsidiary of the company in Hong Kong has recorded net revenue of Rs. 117.00 lacs (previous year Rs. 905.67 lacs). During IInd quarter of the year under review, the management had decided to close down the operation and to liquidate the said subsidiary. Accordingly the subsidiary company has been liquidated and all the credit facilities with M/s. Indian Overseas Bank, Hong Kong have been closed. The company has also repatriated the investment made in the subsidiary on 18.06. 2013.

CONSOLIDATED FINANCIAL STATEMENTS

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors'' Report, Auditors'' Report, Balance Sheet and Profit and Loss Account of its subsidiary company to its Annual Report. However the Ministry of Corporate Affairs, Government of India, vide its general circular no. 2/2011 dated 8th February, 2011, has granted exemption to all companies from attaching the above documents of subsidiary with the Annual Report of the Company from the financial year 2010-11 onwards. Accordingly, this Annual Report does not contain the report and other statement of M/s. Surge Trading Limited, the subsidiary company. The Company will make available the annual audited accounts and related detailed information of the subsidiary

company upon request by any member of the Company. These documents will also be available for inspection during business hours at the registered office of the Company.

Financial information of M/s. Surge Trading Limited, the subsidiary company, as required by the said general exemption circular of Ministry of Corporate Affairs, Government of India, is annexed else where in the report. A statement of Holding Company''s interest in subsidiary is also furnished separately.

As required by Accounting Standard – 21 and Listing Agreement with stock exchanges, the audited consolidated financial statements of the Company and its subsidiary is enclosed.

DECORATIVE PLYWOOD BUSINESS

During the year under review, there was slow and little contribution from the decorative plywood segment. Your company has moved towards product mix and high value product like decorative plywood under the brand name "ELEMENTZ". Soon, the company will enhance its portfolio in the decorative plywood segment from the current level of 150 varieties to over 200 varieties of exotic veneers. Your Directors have perceived that there shall be significant improvement in the turnover and profitability of the company on account of decorative plywood business.

DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance with Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (Amendment) Act, 2000, your Directors confirm:

a. that in the preparation of Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same.

b. that they 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 and of the loss of the company for that period.

c. that they 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 your company and for preventing and detecting fraud and other irregularities;

d. that they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Company recognizes the importance of good corporate governance. Your Company is therefore, committed to business integrity, high ethical values and professionalism in all its activities. As an essential part of this commitment, the Board of Directors supports high standards in corporate governance. It is the endeavor of the Board and the executive management of your Company to ensure that their actions are always based on principles of responsible corporate management. In your company, corporate governance is seen as an ongoing process. Your Company''s Board will therefore closely follow future developments in the governance norms and will take lead in ensuring compliance with the same. A separate report on Corporate Governance along with the certificate of the Auditors, confirming compliance of the conditions of corporate governance, as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges is annexed to this report.

AUDIT COMMITTEE /SHARE TRANSFER - INVESTOR GRIEVANCE COMMITTEES / REMUNERATION COMMITTEE

The Board of Directors have constituted three committees i.e. Audit Committee, Share Transfer & Investor Grievance committee and Remuneration Committee as per the requirement of Corporate Governance under the Listing Agreement. All the members of these committees are independent & non executives. The details of members of these Committees are given in report of Corporate Governance.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility continues to assume an important role in the activities of the Company. It encompasses much more than social outreach programs and is an integral part of the way the Company conducts its business.

COST AUDIT COMPLIANCE CERTIFICATE & COST AUDITOR

Company has obtained Cost Audit Compliance Certificate for the period ended 31.03.2013 issued by Mr. R. Sivasubramanian & Co, Cost Accountants and the same shall be filed with MCA accordingly.

Mr. R. Shankaraman practicing cost accountant, hasbeen appointed by the Board of Directors as the Cost Auditor of the Company for the Financial Year 2013-14.

FIXED DEPOSITS

The Company has neither accepted nor renewed any Fixed Deposits from the public during the year under review.

DIRECTORS

Mr. Sudhir Kumar Jena, director is retiring by rotation and being eligible offer himself for reappointment. Necessary resolution is proposed in the notice to the Annual General Meeting.

Mr. M.L.Pramod Kumar and Mr. S.P.Bhatera, Directors have resigned from the Board and Mr. Ramakanta Panda and Mr. Shaine Sunny Mundaplakkal were inducted into the Board as Additional Directors.

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

The statement containing the necessary information as required under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in Report of Board of Directors) Rules 1988, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are annexed hereto and forms an integral part of this report.

ENVIORNMENT & GREEN INITAIATIVE

The Company is committed to the environment protection. The Company continues to upkeep effluent and chemical treatment plant besides green belt inside the factory premises. Continuous check of air and water pollution at manufacturing unit is monitored. Your company is certified with FSC (Forest Stewardship Council) besides an existing member of IGBC ( Indian Green Building Council).

PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 217 (2A) OF THE COMPANIES ACT, 1956.

None of the employee is drawing remuneration in excess of limit prescribed under section 217(2A) of the companies Act, 1956 and rule thereto for which disclosure is to be made.

AUDITORS AND THEIR REPORT

M/s. C. Ramasamy & B. Srinivasan, Chartered Accountants, Auditors of the company will retire at the conclusion of the ensuing Annual General Meeting and are recommended for reappointment. The Company has received a certificate from them to effect that the reappointment, if approved, would be within the limits prescribed under section 224 (1B) of the Companies Act, 1956.

As regards to utilisaiton of short term funds for the long term purposes as observed in para 17 of the Annexure to the Auditors Report, your directors wish to inform that in the absence of any arrangement of long term funds to finance the cash losses and repayment of long term loans, the available working funds got depleted resulting in use of short term funds for long term purposes.

LISTING WITH STOCK EXCHANGES

The Equity shares of the Company are listed with Bombay Stock Exchange Limited (BSE) & National Stock Exchange of India Limited (NSE).

FOREIGN EXCHANGE MANAGEMENT

During the year under review, the Company has incurred a forex loss of Rs.70.00 lacs against a loss of Rs.227.74 lacs in the previous year. The management is adopting required foreign currency hedging mechanism from time to time.

POSTAL BALLOT

The Company has sought the approval of the shareholders for amending the main object clause of the Memorandum of Association by including new object clause vide point No.10 i.e. to deal in buying, selling, import & export of electrical and electronics items among others. The notice, vide section 192A of the Companies Act, 1956, dated 26th June 2013 along with postal ballot form and self addressed prepaid postage envelope were sent to the shareholders. Mr. Pradeep Kumar Panda, Partner, M/s.P.K.Panda & Co, practicing Company Secretaries was appointed as the scrutinizers for conducting the postal ballot in a fair and transparent manner. The shareholders are requested to return the Postal Ballot Forms duly filled in as per the instructions given and submit the same on or before 05th August 2013. The results of the same shall be declared on 08.08.2013 and shall also be put up in the notice board at the registered office of the company.

For and on behalf of the Board

Place: Chennai B.L. Bengani

Date: 27.07.2013 Chairman and Managing Director


Mar 31, 2012

The Directors have pleasure in presenting the 16th Annual Report of the company along with the Audited Statement of Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS

The highlights of the financial results of the company for the year ended 31.03.2012 as compared with the previous year are as follows:

Rs. In Lacs

For the year ended For the year ended Particulars' 31.03.2012 31.03.2011

Net Turn Over 12102.87 10263.04

Profit before Interest, Depreciation & Tax 989.13 914.87

Less: Interest 542.33 487.78

Profit/(Loss) before Depreciation & Tax 446.80 427.09

Less: Depreciation 144.53 136.08

Profit/(Loss) before Taxation 302.27 291.01

Less: Provision for Taxation

Wealth Tax 0.15 0.30

Deferred Tax 92.69 89.92

Profit/(Loss) after Tax 209.43 200.79

Balance brought forward (461.42) (662.21)

Provision for Dividend and Dividend tax - -

Transfer from General Reserve - -

Balance carried forward to next year (251.99) (461.42)

PERFORMANCE REVIEW

During the year of operation, your company has achieved a net turnover of Rs. 12102.87 lacs, an increase of 17.93 % as against the previous year net turnover of Rs. 10263.04 lacs. The operative profits stood at Rs. 989.13 lacs. The PAT stood at Rs. 209.43 lacs as against PAT of Rs. 200.79 lacs in the previous year. The main reason of declining PAT is due to loss on account of exchange difference.

DIVIDEND

Keeping in view of the accumulated losses, your Directors regret their inability to declare any dividend.

SUBSIDIARIES & ASSOCIATES

During the year under review, M/s. Surge Trading Limited (STL) your Wholly Owned Subsidiary has recorded net revenue of Rs. 905.67 lacs (previous year Rs. 857.42 lacs) an increase of about 6% with a net profit of Rs. 9.75 lacs. This company is instrumental in sourcing material for your company from abroad. Management has belief that the company will perform better in years to come.

CONSOLIDATED FINANCIAL STATEMENTS

As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors Report, Auditors Report, Balance Sheet and Profit and Loss Account of its subsidiary company to its Annual Report. The Ministry of Corporate Affairs, Government of India, vide its general circular no. 2/ 2011 dated 8th February, 2011, has granted exemption to all companies for not attaching the above documents of subsidiary with Annual Report of the Company from financial year 2010-11 onwards. Accordingly, this Annual Report does not contain the report and other statement of M/s. Surge Trading Limited the subsidiary company. The Company will make available the annual audited accounts and related detailed information of the subsidiary companies upon request by any member of the Company. These documents will also be available for inspection during business hours at the registered office of the Company.

Financial information of M/s. Surge Trading Limited, the subsidiary company, as required by the said general exemption circular of Ministry of Corporate Affairs, Government of India, is annexed to this report. A statement of Holding Company s interest in subsidiaries is also furnished separately.

As required by Accounting Standard 21 and Listing Agreement with stock exchanges, the audited consolidated financial statements of the Company and its subsidiaries are enclosed.

PREFERENTIAL ALLOTMENT OF SHARES

During the year under review, the company has issued and allotted 18,98,793 Equity Shares @ Rs. 10.77/- per share (including premium of Re. 0.77/- per share) to promoters and others on preferential basis. The objective of the issue was to provide long term funding for the ongoing business of the Company and to meet debt: equity ratio as stipulated by the lender bank. These shares were also listed with both Bombay Stock Exchange Ltd and National Stock Exchange of India Ltd and trading was started w.e.f.24.04.2012 & 25.04.2012 respectively.

DIRECTORS RESPONSIBILITY STATEMENT

In compliance with Section 217(2AA) of the Companies Act, 1956, as amended by the Companies (amendment) Act 2000, your Directors confirm:

a. That in the preparation of Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same.

b. That they 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 and of the profit or loss of the company for that period.

c. That they 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 your company and for preventing and detecting fraud and other irregularities;

d. That they have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

Your Company recognizes the importance of good corporate governance. Your Company is therefore, committed to business integrity, high ethical values and professionalism in all its activities. As an essential part of this commitment, the Board of Directors supports high standards in corporate governance. It is the endeavor of the Board and the executive management of your Company to ensure that their actions are always based on principles of responsible corporate management. In your company, corporate governance is seen as an ongoing process. Your Company s Board will therefore closely follow future developments in the governance norms and will take lead in ensuring compliance with the same. A separate report on Corporate Governance along with the certificate of the Auditors, confirming compliance of the conditions of corporate governance, as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges is annexed.

AUDIT COMMITTEE / INVESTOR GRIEVANCE COMMITTEES / REMUNERATION COMMITTEE

The Board of Directors has constituted three committees i.e. Audit Committee, Share Transfer & Investor Grievance committee and Remuneration Committee as per the requirement of Corporate Governance under the Listing Agreement. All the members of these committees are independent & non executives. The details of members of these Committees are given in Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility continues to assume an important role in the activities of the Company. It encompasses much more than social outreach programs and is an integral part of the way the Company conducts its business.

COST AUDIT COMPLIANCE CERTIFICATE

Company has obtained Cost Audit Compliance Certificate for the period ended 31.03.2012 issued by Mr. Sivasubramanian & Co, Cost Accountants and the same shall be filed with MCA accordingly.

FIXED DEPOSITS

The Company has neither accepted nor renewed any Fixed Deposits from the public during the year under review.

DIRECTORS

Mr. Satya Prathaap Bhatera, director is retiring by rotation and being eligible offer himself for reappointment. Necessary resolution is proposed in the notice to the Annual General Meeting.

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

The statement containing the necessary information as required under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in Report of Board of Directors) Rules 1988, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo are annexed hereto and forms an integral part of this report.

ENVIRONMENT & GREEN INITIATIVE

The Company is committed to the environment. The Company continues to upkeep effluent and chemical treatment plant besides green belt inside the factory premises. Continuous check of air and water pollution at manufacturing unit is made and monitored. Your company is certified with FSC (Forest Stewardship Council) besides an existing member of IGBC.

PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 217 (2A) OF THE COMPANIES ACT, 1956.

None of the employees is drawing remuneration in excess of limit prescribed under section 217(2A) of the companies Act, 1956 and rule thereto for which disclosures to be made.

AUDITORS AND THEIR REPORT

M/s. C. Ramasamy & B. Srinivasan, Chartered Accountants, auditors of the company will retire at the conclusion of the ensuing Annual General Meeting and are recommended for reappointment. The Company has received a certificate from them to effect that the reappointment, if appointed, would be within the limits prescribed under section 224 (1B) of the Companies Act, 1956.

LISTING WITH STOCK EXCHANGES

The Equity shares of the Company were listed with Bombay Stock Exchange Ltd. (BSE) & National Stock exchange of India Limited (NSE). The annual listing fee for the financial year 2012-13 was paid within the stipulated time to BSE & NSE.

FOREIGN EXCHANGE MANAGEMENT

During the year under review, the Company incurred a forex loss of 2.28 crores against a loss of 5.22 lacs in the previous year. The management is adopting required foreign currency hedging mechanism from time to time.

ANNEXURE TO THE DIRECTORS REPORT

Under The Companies (Disclosure of particulars in the report of the Board of Directors) Rules 1988 A. Conservation of Energy

The Company through continuously improving its manufacturing process and efficiency at its all plants and offices continues its endeavor to improve energy conservation and utilization. Energy conservation programs adopted by the Company are:

(i) Strict watch is kept on idle running of machine and to work the machine at full capacity

(ii) Installed frequency drivers in machines to save power

(iii) Machineries are frequently overhauled to work smoothly;

(iv) Monitoring of power factor is frequently done and we have installed automatic power control systems in the circuit.

(v) Energy consumption versus production is monitored at regular intervals to check over usage of energy.

(vi) Continuous monitoring of energy consumption.

(vii) Voltage is controlled with the installation of automatic voltage controller on transformer.

B. Research and Development (R & D)

1. Specific areas in which R & D carried out by the Company.

R&D portfolio consists of product improvement and process optimization with a view to reduce cost and introduction of new environmental friendly products and processes.

2. Benefit derived as a result of the above R & D:

The new products and process cater the needs of variety of customer segments and aim to reduce cost. Development of eco-friendly processes result in less quantity of effluent and emission. Also designing of safe i.e. non toxic products conform to Euro I Standards

3. Future Plan of action:

R&D will focus on projects leading to further cost reduction and reduced load on environment.

4. Expenditure on R & D

No capital expenditure is done towards the R&D. The Company continuously incurs expenses for improving the processes, product quality, etc they cannot be specifically identified as research & development expenses. Thus, the same has not been shown separately.

TECHNOLOGY, ABSORPTION, ADAPTATION AND INNOVATION.

1. Efforts in brief, made towards technology absorption, adaptation and innovation.

The Company absorbs the knowledge of plywood technology from various sources, such as the existing know-how, their own data bank, published literature etc. and thereafter adopts the same to the Company infrastructure, effects improvement to the products and processes of the Company including containment of pollution and control of effluents. Quality assurance managers are placed for each factory and are made independent. With this the complaints have reduced and consumers are feeling satisfied with our products.

2. Benefits derived as a result of the above efforts.

Benefits derived from these efforts include process rationalization, product quality improvement and environmental friendly product. With this our Product has got eco mark from BIS and has been referred for Green Building due to low formaldehyde emission products.

C. Foreign Exchange Earning & Outgo

During the year under review the foreign exchange earned by the company was Rs. 23.12 lacs and outgo amounted to Rs. 3611.21 lacs as against Rs. 19.61 lacs and Rs. 2861.56 lacs respectively in the previous year.

For and on behalf of the Board

B.L. Bengani M.L. Pramod Kumar

Chairman and Managing Director Whole Time Director

Place: Chennai

Date: 10.07.2012

 
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