Directors Report of Sumeet Industries Ltd.
Mar 31, 2018
DIRECTORSâ REPORT
To The Members of
Sumeet Industries Limited
Your Directors have pleasure in presenting the 30th Annual Report and Audited Statement of Accounts for the year ended 31st March, 2018.
Your Company has delivered satisfactory performance despite considerable headwinds like GST implication, inflation etc. The Company has registered consolidated revenue of Rs. 1228.83 Crores with Net Loss of Rs.2.62 Crores.We, remained resolute and relentless in our quest for strengthening our cost-competiveness, better management of working capital and operational excellence across all businesses.
FINACIAL RESULTS
( Rs. In Lacs ) ;
|
Particulars |
Stand |
alone |
Conso |
idated |
|
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
|
Sales & Income form operation |
107081.71 |
130180.80 |
122883.11 |
150959.72 |
|
Other Income |
952.60 |
729.50 |
953.65 |
948.76 |
|
Profit before Financial cost , Depreciation |
9479.80 |
12353.68 |
9787.81 |
12803.02 |
|
and Exceptional items & Tax (EBIDTA) |
||||
|
Interest |
4917.79 |
4822.47 |
5147.08 |
5035.15 |
|
Depreciation |
5259.57 |
2046.32 |
5259.57 |
2047.13 |
|
Profit/( Loss ) before Tax |
(697.56) |
5484.89 |
(618.84) |
5720.74 |
|
Provision for Taxation |
||||
|
Current tax |
(785.20) |
1170.56 |
(795.82) |
1189.79 |
|
Mat Credit |
- |
(1014.70) |
- |
(1014.70) |
|
Deferred Tax |
1171.89 |
1656.27 |
1171.89 |
1656.27 |
|
Profit after Tax |
(310.87) |
3672.75 |
(242.77) |
3889.38 |
|
Taxation for previous year |
(13.98) |
- |
(19.19) |
- |
|
profit available for appropriation |
(324.86) |
3672.75 |
(261.96) |
3889.38 |
|
Dividend on Equity & Pref. Shares |
||||
|
Transfer to General Reserve |
(324.86) |
3672.75 |
(261.96) |
3889.38 |
OPERATIONS
Despite challenging business environment the company has posted mixed performance for the year under review. The company has produced 92607.345 Tons of Pet Chips / Polyester and Texturized Yarn and | dispatched 93259.47 Tons of Pet Chips / Polyester and Texturized yarns.
IIncome from operation (Consolidated) of the company has marginally decreased from Rs. 1509.60 Crores to Rs. 1228.83 Crores and EBIDTA has been decreased marginally from Rs. 128.03 Crores to Rs. 97.88 Crores i in comparison to last year. The company has adopted the method of charging depreciation on fixed assets from SLM Method to WDV (except vehicle) method during the year under review, resulting an excess of total amount of Rs.34.54 Crores was effected in depreciation amount. The Company has incurred net loss of Rs.2.62 Crores.
The Company is enhancing its capacity on producing specialty and value added yarns and focusing on expanding market reach both in domestically and internationally, cost optimization and elevating people potential. With rising demand in the domestic and international markets, we are hopeful that we will be able to grow more value added products in future.
A detailed analysis of the operations of your Company during the year under report is included in the Management Discussion and Analysis Report, forming part of this Annual Report.
DIVIDEND
The Board of directors do not recommended dividend for the year under review due to loss incurred by the company. No amount is being transferred to the General Reserves.
EXPANSION & MODERNISATION
The Company is cautiously watching development in synthetic yarn industries and also evaluating various options which could be available to it for its growth strategy. Over the years, we have been investing consistently in shoring our manufacturing capacities by way of expansion cum modification in its existing capacities. Presently no expansion program of the company has been envisaged by the Board.
RIGHT ISSSUE
During the year under review the company has made Right Issue of 2,48,74,173 nos. of Equity shares with a i face value of Rs. 10/- each at a price of Rs. 24/- per equity shares aggregated to Rs. 5969.80 Lacs in the ratio of 3 fully paid up Right Equity Share(s) for every 7 Fully Paid up Equity Share(s). Finally, the company has allotted 2,48,74,173 nos. of equity shares and aggregated Rs.59,69,80,152.00 . The proceeds of the Right Issues was utilized for incremental working capital and adjustment of unsecured loans given by the promoters | as declared in objects of the issue.
Category wise variation between projected utilization of funds made in offer document and the actual utilization of funds are as follow:
(Rs. in Lakh)
|
Sr. No. |
Particulars |
Projected utilization of funds as per offer document |
Actual utilization of funds till 31st March, 2018 |
|
|
1. |
Working Capital Requirements |
2300.00 |
2727.04 |
|
|
2. |
Adjustment of Unsecured Loans against the entitlement including additional subscription |
2500.00 |
2500.00 |
|
|
3. |
General Corporate purpose |
1030.00 |
615.00 |
|
|
4. |
Issue related expenses |
170.00 |
127.76 |
|
|
Total |
6000.00 |
5969.80 |
CHANGE IN THE NATURE OF BUSINESS
There were no change in the nature of the business of the Company, during the financial year under review.
MATERIAL CHANGES AND COMMITMENTS
There have not been any material changes and commitments affecting the financial position of the Company between the end of the financial year as on 31st March, 2018 and the date of this report, i. e., 22nd June ,2018.
OVERSEAS SUBSIDIARY COMPANY
The company has a wholly owned subsidiary company named âSumeet Global Pte Limitedâ in Singapore i registered with Registrar of Companies and Business, Singapore. Pursuant to Accounting Standard AS- 21 issued by the Institute of Chartered Accountants of India and the provisions of the Listing Agreement with Stock Exchanges, the company has prepared Consolidated Financial Statements of the Company and its subsidiaries are included in the Annual Report.
Pursuant to the provision of section 136 of the Act, the financial statements of the company, consolidated i financial statements along with the relevant documents and separate audited accounts in respect of Sumeet Global Pte Limited are available on the website of the company.
EXPORTS
The company has been exploring all the possibilities for exporting its products. During the year under review, i your company has exported products worth of Rs. 93.38 Crores.
At present company is exporting to Egypt, Saudi Arabia, China, Argentina, Poland, Vietnam, Philippines, Portugal, Morocco, Columbia, Bangladesh, Russia, Ethiopia, Mexico, Nepal, Brazil, Peru, Algeria, Thailand, j U.S.A, Singapore and Turkey etc. The company is weighing possibilities to export its value added newly | developed Carpet Yarns, Micro filament yarns, Dope dyed Yarns, Texturised Yarns etc. Exploring export markets has been a key area of focus for the company. Your Company expects more growth in the overall export sales in the current year also.
DEPOSITORY SYSTEM
As members are aware, the companyâs shares are compulsorily tradable in the electronic form. As on March 31, 2018 almost 96.38% of the Companyâs total paid-up capital representing 8,29,13,911 shares were in dematerialized form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories.
CREDIT RATING
The Companyâs financial discipline and prudence is reflected in the strong credit ratings ascribed by Brickwork Ratings India Limited as below :
Long Term Borrowing : BWR BBB, Outlook : Stable Short Term Borrowing : BWR A3 Outlook : Stable FIXED DEPOSITS
The Company has invited deposits from public in accordance with the Section 73 and 74 of the Companies Act, 2013 (corresponding Section 58 A of the Companies Act, 1956) to the tune of Rs. 396.14 Lacs during the financial year 2013-14. No fresh deposits have been invited and nor any deposits have been renewed in the financial year 2017-18. Total outstanding deposits after repaying on maturity as on 31.03.2018 has been remained Rs. 4,48,000/-. There were no deposits, which were claimed but not paid by the Company as on date.
DIRECTORS
Mr. Sumeet Kumar Somani (DIN No. 00318156), Executive Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment.
AUDITORS
a) Statutory Auditors
In compliance with the Companies (Audit and Auditors) Rules, 2014, the Members, at the Extra Ordinary General Meeting of the Company held on November 10, 2017 has appointed M/s. S.R. Somani & Co., Chartered Accountants (ICAI Registration no. 110367W) as Statutory Auditors of the Company to hold the office until the conclusion of the next Annual General Meeting of the Company. Later , M/s. S.R. Somani & Co. , Chartered Accountants has resigned w.e.f 01.04.2018 due to their other pre-occupied work assigned. M/s. Pamita Doshi & Co. Chartered Accountants, (ICAI Registration no.:141976W) has been appointed as Statutory Auditors of the company for the financial year 2017-18 to fill the casual vacancy up to the conclusion of the next Annual General meeting of the company in the Extra Ordinary General meeting held on 30.04.2018. Members are requested to re-appoint them at the Annual General Meeting.
b) Cost Auditors
The Company has been maintaining cost accounting records in respect of manufacture of polyester yarns pursuant to directives of the Central Government. The company has appointed M/s. V.M. PATEL & ASSOCIATES, (Firm Registration No. 10519) as Cost Auditors, for conducting the audit of cost records for the financial year 2018-19 and approval of the members is being sought for ratification of their appointment and remuneration.
c) Internal Auditors
The Board has appointed M/s. RRA & Co., Chartered Accountants (ICAI Registration Number 112115W) as Internal Auditors of your company for the financial year 2018-19. The report prepared by the Internal Auditors is to be reviewed by the Statutory Auditors & Audit Committee of the company.
d) Secretarial Auditors
Dhiren R. Dave, Practicing Company Secretaries (CP No. 2496, Membership No. 4889) were appointed as Secretarial Auditor, to conduct secretarial audit of the company for the financial year 2017-18. The Secretarial Audit Report for the financial year ended 31 March 2018 is annexed herewith and forms part of the Annual Report as Annexure-1. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
The Board has re-appointed Dhiren R. Dave, Practising Company Secretaries, as secretarial auditors of the Company for the financial year 2018-19.
MANAGEMENT DISCUSSION AND ANALYSIS
In terms of Regulations 34 of the Listing regulations, a separate section on Management Discussion and Analysis and Corporate Governance Report together with a certificate from the Companyâs Statutory Auditors confirming compliance with regulations relating to Corporate Governance of the Listing regulations are set out and forms part of this Annual report.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with provisions of sub-section (3) of Section 129 of the Act and the Listing Regulations, the consolidated Financial Statements of the company, including the financial details of the subsidiary company forms part of this Annual report. The Consolidated Financial Statements have been prepared in accordance j with the Accounting Standard s prescribed under Section 133 of the Act.
PERSONNEL AND RELATD DISCLOSURES
The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the company. Pursuant to the provisions of the Companies (Appointment & Remuneration of managerial personnel) rules 2014, no employee is drawing remuneration in excess of the prescribed limits. Your company also appreciates that revenue and profit growth cannot take place without the right equality of people. To that effect, your company has undertaken a series of measures that ensures the most appropriate people are recruited in to the organization.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure-2 forming part of the Annual Report.
INTERNAL CONTROL SYSTEM
Your Company has a well-established Internal Control system to ensure an effective internal control environment that provides assurance on the efficiency of conducting business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. The Internal Auditor certifies on the assurance of adequacy of Internal Control System on quarterly basis which are regularly reviewed by the Audit Committee. Independence of the audit is ensured by the direct reporting of | internal audit function to the Audit Committee of the Board.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility is an integral part of the Companyâs ethos and policy and it has been pursuing on a sustained basis. The Company assists schools situated at nearby villages by distributing dresses & books among poor students and computers nearby situated primary schools etc. Technical education and training are imparted to the employees through Industrial Training and Workshops. Emphasis was laid on | creation of awareness amongst the villagers about the need to protect the environment. CSR activities carried | out by the Company have strengthened the relationship with local people. The main focus areas taken in the i policy are Education, Health Care, Environment safety, contribution to any relief fund set up by Government, Semi-Governments etc.
The brief outline of the Corporate Social Responsibility (CSR) Policy of the company and the initiatives j undertaken by the company on CSR activities during the year are set out in Annexure of this Report i in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014. (Annexure - 3). The Policy is available on the website of the Company.
HUMAN RESOURCES & INDUSTRIAL RELATIONS
The Company understands that employees are vital and valuable assets. The Company recognizes people as the primary source of its competitiveness and continues its focus on people development by leveraging technology and developing a continuously learning human resource base to unlease their potential and fulfill their aspirations.
The Company continued to maintain harmonious and cordial relations with its workers in all its businesses during the year under report. Your company firmly believes that a dedicated work force constitute the primary source of sustainable competitive advantage.
PREVENTION OF SEXUAL HARASSMENT POLICY
The Company has in place Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act; 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Your Directors state that during the year under review, there were no cases filed pursuant to The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
RISK MANAGEMENT
Risk Management is the systematic process of understanding, measuring, controlling and communicating organizationâs risk exposures while achieving its objectives. Risk Management is an important business aspect | in the current economic environment and its objective is to identify, monitor and take mitigation measures on a timely basis in respect of the events that may pose risks for the business. The Companyâs risk-management strategy is to identify, assess and mitigate any significant risks. We have established processes and guidelines, along with a strong overview and monitoring framework at the Board and Senior Management levels.
The Board of Directors regularly review risks and threats and takes suitable steps to safeguard its interest and that there is no element of risk identified that may threaten the existence of the Company. The focus shifts from one area to another area depending upon the prevailing situation. The Risk Management Policy has j been reviewed and found adequate to the requirements of the Company by independent firms of Chartered Accountants and approved by the Board. A detailed report on significant risks and mitigation is forming part of Managementâs Discussion and Analysis.
INSURANCE
All the properties of the Company including buildings, plant and machineries and stocks have been adequately i insured.
LOANS, GUARANTEES OR INVESTMENT MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
The loans given, investments made and guarantees given & securities provided during the year under review, are in compliance with the provisions of the Act and rules made thereunder and details thereof are given in the notes to the Standalone Financial Statements.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL | STATEMENTS RELATE AND THE DATE OF THE REPORT.
No material changes and commitments affecting the financial position of the Company occurred from the end of the financial year 2017-18 till the date of this report. Further there was no change in the nature of business i of the Company.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION i 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT.
During the year under consideration, there were no such instances.
EMPLOYEE STOCK OPTION
The company has not issued any Employee Stock Option.
FOREIGN EXCHANGE TRANSACTIONS
In order to hedge the companyâs exposure to foreign exchange and interest rate, the company enters into forward contracts. The volatility witnessed in the global markets has reiterated the need for robust forex management systems and prudent investment practices. All forex exposures are hedged upon the occurrence of an exposure. In case of liabilities in respect of foreign currency loans obtained for acquisition of fixed assets, the variation in the liabilities arising out of exchange rates at the year-end have been capitalized during the year as per Companies (Accounting Standard) Amendment Rules, 2009.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information in accordance with the provisions of Section 134 (3) (m) of the Companies Act, 2013 regarding j conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure-4 forming part of this report.
RESEARCH & DEVELOPMENT
The Company is giving great emphasis to innovation in product and process technology and operational ; efficiencies. The company has set up a separate fully equipped well designed lab for testing of MEG and PTA and developing better quality of Pet chips and Yarns with different deniers and filaments. It has institutionalized a multiple-stage quality control system at the material handling, operations and finished goods stage. Efforts are made to explore and develop more valued added category of yarns. The enhanced quality so developed has been performing well in the domestic as well as in international market. Successful efforts are being made to re-engineer the products & process to reduce cost and optimize material consumption. The product lines of the plant are designed and re-engineered to change product with minimum changeover losses and thus meet customer requirement even for small quantities.
CONTRACTS AND ARRANGEMENT WITH RELATED PARTY
All transactions entered with Related Parties for the year under review were on armâs length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder are not attracted. Thus, disclosure in form AOC-2 in terms of Section 134 of the Companies j Act, 2013 is not required. Further, there are no material related party transactions during the year under review ; with the Promoters, Directors or Key Managerial Personnel.
All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. j Omnibus approval was obtained on a quarterly basis for transactions which are of repetitive nature. Transactions ; entered into pursuant to omnibus approval are audited by the Risk Assurance Department and a statement i giving details of all Related Party Transactions are placed before the Audit Committee and the Board for review and approval on a quarterly basis.
The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. The web-link of the same has been provided in the Corporate Governance Report. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by Securities and Exchange Board of India (âSEBIâ). A separate | report on Corporate Governance along with Certificate from M/s. Pamita Doshi & Co., Chartered Accountants i on compliance with the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is provided as part of this Annual Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 in prescribed Form MGT-9 (Annexure-5) is forming part of the Annual Report.
DIRECTORSâ RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby submits its responsibility Statement :
(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 that 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 i 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.
CODE OF CONDUCT
As prescribed under the provisions of Section 149 of the Companies Act, 2013 read with Schedule IV thereto \ and Regulation 26 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for its Board of Directors and Senior management and employees, the Company has formulated a comprehensive Code of Conduct (the Code). The Code is applicable to Directors and Senior management and employees to such extent as may be applicable to them depending upon their roles and responsibilities. The Code gives guidance and support needed for ethical conduct of business and compliance of law. The Code reflects the values of the Company viz. Customer Value, Integrity, one team and Excellence.
A copy of the Code has been uploaded on the Companyâs website www.sumeetindustries.com. The Code has been circulated to all the Directors and Management Personnel and its compliance is affirmed by them annually.
A declaration signed by the Companyâs Managing Director for the compliance of this requirements is published in this Report.
DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS
Pursuant to Section 149(6) of the Companies Act, 2013, Independent Directors of the Company have made a declaration confirming the compliance of the conditions of the independence stipulated in the aforesaid section.
WHISTLE BLOWER MECHANISM
In order to ensure that the activities of the Company and its directors , employees and Vendors are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behavior, the Company has adopted a Vigil mechanism/Whistle Blower Policy. This policy is explained in Corporate Governance Report and also uploaded on the website of the company i.e. www.sumeetindustries. com.
DISCLOSURE RELATED TO BAORD, COMMITTEES AND POLICIES
A) BOARD MEETINGS :
The Board of Directors met 15 times during the financial year ended 31st March, 2018 in accordance with ; the provisions of the Companies Act, 2013 and rules made there under. The details thereof are given in i the Corporate Governance Report forming part of the Annual report.
B) COMMITTEE MEETINGS :
AUDIT COMMITTEE
The Audit Committee of the Board comprises of Mr. Dinesh Sharan Khare (Chairman), Mr. Sumeet Kumar Somani, Member, Mr. Dipesh Dasadia, Member and Mr. Abhishek Desai, Member.
All recommendations made by the Audit Committee were accepted by the Board during the year 2017-18. ; The brief details of the Audit Committee are given in Corporate Governance Report forming part of the Annual Report.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee of the Board comprises of Mr. Dinesh Sharan Khare (Chairman), j Mr. Atma Ram Sarda, Member, Mr. Dipesh Dasadia, Member and Mr. Abhishek Desai, Member.
The Nomination and Remuneration Committee and this Policy shall be in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Listing Regulations (as may be j amended from time to time). Emphasis is given to persons from diverse fields or professionals.
The Nomination and remuneration Committee has framed the â NOMINATION & REMUNERATION AND EVALUATION POLICYâ (Annexure-6(i)) and âPOLICY ON BOARD DIVERSITYâ (Annexure-6(ii)) forming j part of the Annual Report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Committee review and ensures redressal of investor grievances. The Stakeholders Relationship Committee of the Board comprises of Mr. Dinesh Sharan Khare (Chairman), Mr. Sumeet Kumar Somani, Member, Mr. Dipesh Dasadia, Member and Mr. Abhishek Desai, Member.
The brief details of the Stakeholders Relationship Committee are given in Corporate Governance Report forming part of the Annual report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board has laid down the Companyâs policy on Corporate Social Responsibility (CSR) and the CSR activities of the company are carried out as per the instructions of the Committee.
The CSR committee of the Board comprises of Mrs. Gangadevi Somani, Chairman, Mr. Sumeet Kumar | Somani, Member and Mr. Dinesh Sharan Khare, Member.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, 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 Committee, Nomination and Remuneration Committee. ;
The evaluation process covered the aspects which included Board structure and composition, frequency of Board meetings, participation in the long term strategic planning, contribution to and monitoring of corporate governance practices and the fulfillment of Directorsâ obligation and fiduciary responsibilities, including but not limited to, active participation at the Board and committee meetings.
This evaluation is led by the Chairman of the Board Governance, Nomination and Remuneration Committee with specific focus on the performance and effective functioning of the Board.
The result of the evaluation is satisfactory and adequate and meets the requirement of the Company.
FAMILIAZATION PROGRAMME FOR INDEPENDENT DIRECTORS
A policy on familiarization program for Independent Directors has also been adopted by the Company and are put up on the website of the company www.sumeetindustries.com. All new Independent Directors (IDs) i inducted in to the Board are presented with an overview of the Companyâs business operations, products, organization structures and about the Board Constitutions and its procedures.
KEY MANAGERIAL PERSON
Pursuant to the provisions of section 203 of the Companies Act , 2013 read with rules framed thereunder the i following persons are the Key Managerial Personnel of the company.
1) Mr. Sumeet Kumar Somani, Managing Director
2) Mr. Anil Kumar Jain, Company Secretary
3) Mr. Abhishek Prasad, Chief Financial Officer
SECRETARIAL STANDARDS
The Directors state that applicable Secretarial Standards, i.e., SS-1 and SS-2, relating to Meetings of the Board of Directors and General Meetings, respectively, have been duly followed by the Company.
ACKNOWLEDGEMENT
Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your Directors wish to place on record their deep sense of appreciation for devoted services of the Executives, Staff and workers of the Company for its success.
On behalf of the Board of Directors
Sd/-
Place : Surat Shankarlal Somani
Date : 22nd June, 2018 Chairman
Mar 31, 2016
DIRECTOR''S REPORT
To The Members of Sumeet Industries Limited
The Directors have pleasure in presenting the 28th Annual Report and Audited Statement of Accounts for the year ended 31st March, 2016.
The Company has delivered a mixed performance despite considerable headwinds. The Company has registered consolidated revenue of Rs. 1235.41 Crores with Net Profit of Rs. 18.92 Crores. We, remained resolute and relentless in our quest for strengthening our cost-competiveness, better management of working capital and operational excellence across all businesses.
FINANCIAL RESULTS (R in lacs)
|
r Particulars |
Standalone |
Consolidated |
||
|
2015-16 |
2014-15 |
2015-16 |
2014-15 |
|
|
Sales & Income form operation |
105248.48 |
93103.32 |
123540.79 |
116533.33 |
|
Other Income |
542.99 |
669.22 |
572.99 |
91.85 |
|
Profit before Financial cost, Depreciation |
|
|
|
|
|
and Exceptional items & Tax ( EBIDTA ) |
9012.68 |
8011.24 |
9431.86 |
8547.42 |
|
Less : Interest |
4161.08 |
3536.00 |
4357.51 |
3708.60 |
|
Depreciation |
2013.57 |
1973.20 |
2013.57 |
1973.21 |
|
Profit before Tax |
2838.03 |
2502.04 |
3060.78 |
2865.61 |
|
Less : Provision for Taxation |
|
|
|
|
|
Current tax |
567.83 |
500.60 |
583.17 |
544.75 |
|
Mat Credit |
-525.04 |
-462.87 |
-525.04 |
-462.87 |
|
Deferred Tax |
1030.37 |
566.07 |
1030.37 |
566.07 |
|
Profit after Tax |
1764.87 |
1898.24 |
1972.28 |
2217.66 |
|
Less : Taxation for previous year |
80.41 |
52.50 |
80.41 |
52.50 |
|
profit available for appropriation |
1684.46 |
1845.74 |
1891.87 |
2165.16 |
|
Dividend on Equity & Pref. Shares |
|
|
|
|
|
Transfer to General Reserve |
1684.86 |
1845.74 |
1891.87 |
2165.16 |
OPERATIONS
Despite challenging business environment the company has posted a satisfactory performance for the year under review. The company has produced 90891.72 Tons of Pet Chips / Polyester and Texturised Yarn and dispatched 90493.18 Tons of Pet Chips / Polyester and Texturised yarns.
Income from operation (Consolidated) of the company has increased from Rs. 1165.33 Crores to Rs. 1235.41 Crores. EBIDTA has been increased from Rs. 85.47 Crores to Rs. 94.32 Crores and Net profit after Tax (Consolidated ) has been marginally decreased from Rs. 21.65 Crores to Rs. 18.92 Crores in comparison to previous year. Our earning per shares stand at Rs. 2.90 and Book Value per Shares at Rs. 42.81 (Based on equity shares) as on 31st March , 2016.
Two important factors which improved the performance of bottom-line during the year despite headwinds were : a) Saving in energy cost due to sourcing of power through open access and high sales in quantities term in the last quarter of the year under review. To further strengthen the companyâs drive on cost optimization , the company has hired the services of a well reputed consulting firm for detailed cost study.
The year 2015-16 remained one of the challenging year as the polyester industry faced several challenges. Firstly, crude prices remained decline during the year, which triggered reduction in prices for Purified Terephthalic Acid (PTA) and Mono Ethylene Glycol (MEG) (key raw materials for polyester manufacturing). Secondly, the government levied Anti-Dumping Duty on PTA imports, which resulted in an increase in raw material cost.
Your company are enhancing its capacity on producing speciality and value added yarns and focusing on expanding market reach both in domestically and internationally , cost optimization and elevating people potential.
A detailed analysis of the operations of your Company during the year under report is included in the Management Discussion and Analysis Report , forming part of this Annual Report.
DIVIDEND
The Board of directors do not recommended to declare dividend during the year due to ploughing back the profit to be utilized in the setting up new modification cum expansion programs and general corporate purposes.
EXPAINSION & MODERNISATION
The Company is cautiously watching development in synthetic yarn industries and also evaluating various options which could be available to it for its growth strategy. Until such time, it will continue to put its thrust on reengineering of its existing operations and carry on balancing investment in modification of existing equipmentâs and some fresh investments in energy conservation schemes.
During the financial year under review , the company has modified its spinning lines for improving its operational costs and efficiencies through the following strategic projects which are :-
1) Position of 4 nos. of existing FDY line has been modified for producing colour FDY Yarns.
2) Process Line of P.P. Yarn has been modifying for manufacturing Colour Polyester Yarns. After completion of this modification , the company will produce 4500 TPA Colour Polyester Yarns.
3) In old POY Plant additional 48 end winders are adding to enhance the production capacity and after completion of this modification , POY production of the company will be increased by 4500 TPA.
4) F. O. based 4.8 MW Captive Genset Power Plant has been installing to further reducing power cost . OVERSEAS SUBSIDIARY COMPANY
The company has a wholly owned subsidiary company named âSumeet Global Pte Limitedâ in Singapore registered with Registrar of Companies and Business, Singapore. Pursuant to Accounting Standard AS- 21 issued by the Institute of Chartered Accountants of India and the provisions of the Listing Agreement with Stock Exchanges, the company has prepared Consolidated Financial Statements of the Company and its subsidiaries are included in the Annual Report.
Pursuant to the provision of section 136 of the Act, the financial statements of the company, consolidated financial statements along with the relevant documents and separate audited accounts in respect of Sumeet Global Pte Limited are available on the website of the company.
EXPORTS
The company has been exploring all the possibilities for exporting its products. During the year under review, your company has exported products worth of Rs. 131.85 Crores.
At present company is exporting to Egypt, Saudi Arabia, China, Argentina, Poland, Vietnam, Philippines, Portugal, Morocco, Columbia, Bangladesh, Russia, Ethiopia, Mexico, Nepal, Brazil, Peru, Algeria, Thailand, U.S.A, Singapore and Turkey etc. The company is weighing further possibilities to export its value added newly developed Carpet Yarns. Exploring export markets has been a key area of focus for the company. Your Company expects more growth in the overall export sales in the current year also.
DEPOSITORY SYSTEM
As members are aware, the companyâs shares are compulsorily tradable in the electronic form. As on March 31, 2016 almost 94.71% of the Companyâs total paid-up capital representing 5,80,39,738 shares were in dematerialized form. In view of the numerous advantages offered by the Depository system, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories.
CREDIT RATING
The Companyâs financial discipline and prudence is reflected in the strong credit ratings ascribed by Brickwork Ratings India Limited as below :-
Long Term Borrowing : BWR BBB, Outlook : Stable
Short Term Borrowing : BWR A3
FIXED DEPOSITS
The Company has invited deposits from public in accordance with the Section 73 and 74 of the Companies Act, 2013 (corresponding Section 58 A of the Companies Act, 1956) to the tune of Rs. 396.14 Lacs during the financial year 2013-14. No fresh deposits have been invited and nor any deposits have been renewed in the financial year 2015-16. Total outstanding deposits after repaying on maturity as on 31.03.2016 has been remained Rs. 2,02,79,000/-. There were no deposits, which were claimed but not paid by the Company as on date.
DIRECTORS
Mr. Shankarlal Somani (DIN No. 00165238), Whole-time Director of the Company, retire by rotation at the ensuing Annual General Meeting and, being eligible, offer himself for re-appointment.
As per provisions of the Companies Act, 2013, Independent Director may be appointed for a term up to five years and shall not be liable to retire by rotation. Accordingly the Board recommends the appointment of Mr. Bhagchand Chordia (DIN No. 00165398) and Mr. Atmaram Sarda (DIN No. 06713264) as Independent Director of the Company for a term upto 3 (Three) consecutive years and whose office shall not be liable to retire by rotation.
The company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149 (6) the Companies Act, 2013 and SEBI (LODR) Regulation, 2015.
The details of proposal of appointment/re-appointment of Mr. Shankarlal Somani, Mr. Bhadchand Chordia and Mr. Atmaram Sharda is mentioned in the Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 of the Notice of the 28th Annual General Meeting.
AUDITORS
a) Statutory Auditors
In compliance with the Companies (Audit and Auditors) Rules, 2014, the Members, at the 27th Annual General Meeting of the Company held on September 30, 2015, appointed M/s. Pradeep Singhi & Associates, Chartered Accountants, (ICAI registration no.:108029W) as Statutory Auditors of the Company to hold the office until the conclusion of the next Annual General Meeting of the Company. Members are requested to reappoint them at the Annual General Meeting.
b) Cost Auditors
The Company has been maintaining cost accounting records in respect of manufacture of polyester yarns pursuant to directives of the Central Government. The company has been appointed M/s. V.M. PATEL & ASSOCIATES, (Firm Registration No. 10519) as Cost Auditors, for conducting the audit of cost records for the financial year 2016-17 and approval of the members is being sought for ratification of their remuneration.
c) Internal Auditors
The Board has appointed M/s. RRA & Co., Chartered Accountants (ICAI Registration Number 112115W) as Internal Auditors of your company for the financial year 2016-17. The report prepared by the Internal Auditors is to be reviewed by the Statutory Auditors & Audit Committee of the company.
d) Secretarial Auditors
M/s. Dhiren R. Dave, Practicing Company Secretaries (CP No. 2496, Membership No. 4889) were appointed as Secretarial Auditor, to conduct secretarial audit of the company for the financial year 2015-16. The Secretarial Audit Report for the financial year ended 31 March 2016 is annexed herewith and forms part of the Annual Report as Annexure-1. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
The Board has re-appointed Dhiren R. Dave, Practicing Company Secretaries, as secretarial auditors of the Company for the financial year 2016-17.
MANAGEMENT DISCUSSION AND ANALYSIS
In terms of Clause 49 (VIII) (D) of the Listing Agreement with the Stock Exchanges, the Management Discussion and Analysis Report for the FY 2015-16 duly reviewed by Audit Committee and approved by Board forms part of this Report.
PERSONNEL AND RELATED DISCLOSURES
The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the company. Pursuant to the provisions of the Companies (Appointment & Remuneration of managerial personnel) rules 2014, no employee is drawing remuneration in excess of the prescribed limits. Your company also appreciates that revenue and profit growth cannot take place without the right equality of people. To that effect, your company has undertaken a series of measures that ensures that the most appropriate people are recruited in to the organization.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure-2 forming part of the Annual Report.
INTERNAL CONTROL SYSTEM
Your Company has a well established Internal Control system to ensure an effective internal control environment that provides assurance on the efficiency of conducting business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. The Internal Auditor certifies on the assurance of adequacy of Internal Control System on quarterly basis which are regularly reviewed by the Audit Committee. Independence of the audit is ensured by the direct reporting of internal audit function to the Audit Committee of the Board.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility is an integral part of the Companyâs ethos and policy and it has been pursuing on a sustained basis. The Company assists schools situated at near by villages by distributing dresses & books among poor students and computers nearby situated primary schools etc. Technical education and training are imparted to the employees through Industrial Training and Workshops. Emphasis was laid on creation of awareness amongst the villagers about the need to protect the environment. CSR activities carried out by the Company have strengthened the relationship with local people. The short fall of Rs. 13.40 Lacs in the amount spent on CSR activities during the year ended on 31st March ,2016 is intended to be utilized in future upon identification of suitable projects within your companyâs CSR policy.
The brief outline of the Corporate Social Responsibility (CSR) Policy of the company and the initiatives undertaken by the company on CSR activities during the year are set out in Annexure of this Report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules 2014. (Annexure-3). The Policy is available on the website of the Company.
HUMAN RESOURCES & INDUSTRIAL RELATIONS
The Company has continuously adopted structures that help attract best external talent and promote internal talent to higher roles and responsibilities. Sumeet Industriesâ people centric focus providing an open work environment fostering continuous improvement and development helped several employees realize their career aspiration during the year.
The Company continued to maintain harmonious and cordial relations with its workers in all its businesses during the year under report. Your company firmly believes that a dedicated work force constitute the primary source of sustainable competitive advantage.
PREVENTION OF SEXUAL HARASSMENT POLICY
The Company has in place Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act; 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
Your Directors state that during the year under review, there were no cases filed pursuant to The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
RISK MANAGEMENT
Risk Management is the systematic process of understanding, measuring, controlling and communicating organizationâs risk exposures while achieving its objectives. The companyâs risk management policy stems from a philosophy of pursuing sustainable growth and creating economic value while calibrating and mitigating risks. Risk Management is an important business aspect in the current economic environment and its objective is to identify, monitor and take mitigation measures on a timely basis in respect of the events that may pose risks for the business.
The Board of Directors regularly review risks and threats and takes suitable steps to safeguard its interest and that there is no element of risk identified that may threaten the existence of the Company.. The focus shifts from one area to another area depending upon the prevailing situation. The Risk Management Policy has been reviewed and found adequate to the requirements of the Company by independent firms of Chartered Accountants and approved by the Board. A detailed report on significant risks and mitigation is forming part of Managementâs Discussion and Analysis.
INSURANCE
All the properties of the Company including buildings, plant and machineries and stocks have been adequately insured.
LOANS, GUARANTEES OR INVESTMENT MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
Loans, guarantees and investments covered under section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT.
No material changes and commitments affecting the financial position of the Company occurred from the end of the financial year 2015-16 till the date of this report. Further there was no change in the nature of business of the Company.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT.
During the year under consideration, there were no such instances.
EMPLOYEE STOCK OPTION
The company has not issued any Employee Stock Option.
CHANGE IN SHARE CAPITAL
During the year under review the company has issued and allotted 1,00,00,000 6% Non-Convertible Redeemable Preference Shares of Rs.10/- each at a premium of Rs. 5/- aggregating Rs. 15.00 Crores to the Promoters and Promoter group.
FOREIGN EXCHANGE TRANSACTIONS
In order to hedge the company''s exposure to foreign exchange and interest rate, the company enters into forward contracts. The volatility witnessed in the global markets has reiterated the need for robust forex management systems and prudent investment practices. All forex exposures are hedged upon the occurrence of an exposure. In case of liabilities in respect of foreign currency loans obtained for acquisition of fixed assets, the variation in the liabilities arising out of exchange rates at the year end have been capitalized during the year as per Companies (Accounting Standard) Amendment Rules, 2009.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
Information in accordance with the provisions of Section 134 (3) (m) of the Companies Act, 2013 regarding conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the Annexure-4 forming part of this report.
RESEARCH & DEVELOPMENT
The Company is giving great emphasis to innovation in product and process technology and operational efficiencies. The company has set up a separate fully equipped well designed lab for testing of MEG and PTA and developing better quality of Pet chips and Yarns with different deniers and filaments. It has institutionalized a multiple-stage quality control system at the material handling, operations and finished goods stage. Efforts are made to explore and develop more valued added category of yarns. The enhanced quality so developed has been performing well in the domestic as well as in international market. Successful efforts are being made to reengineer the products & process to reduce cost and optimize material consumption. The product lines of the plant are designed and re-engineered to change product with minimum changeover losses and thus meet customer requirement even for small quantities.
CONTRACTS AND ARRANGEMENT WITH RELATED PARTY
All transactions entered with Related Parties for the year under review were on armâs length basis and in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 and the Rules made there under are not attracted. Thus, disclosure in form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel.
All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. Omnibus approval was obtained on a quarterly basis for transactions which are of repetitive nature. Transactions entered into pursuant to omnibus approval are audited by the Risk Assurance Department and a statement giving details of all Related Party Transactions are placed before the Audit Committee and the Board for review and approval on a quarterly basis.
The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. The web-link of the same has been provided in the Corporate Governance Report. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by Securities and Exchange Board of India (âSEBIâ). A separate Report on Corporate Governance along with Certificate from M/s. Pradeep Singhi & Associates, Chartered Accountants on compliance with the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is provided as part of this Annual Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 in prescribed Form MGT-9 (Annexure-5) is forming part of the Annual Report.
DIRECTORS'' RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:
(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 that 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.
CODE OF CONDUCT
As prescribed under the provisions of Section 149 of the Companies Act, 2013 read with Schedule IV thereto and Regulation 26 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for its Board of Directors and Senior management and employees, the Company has formulated a comprehensive Code of Conduct (the Code). The Code is applicable to it''s Directors and Senior management and employees to such extent as may be applicable to them depending upon their roles and responsibilities. The Code gives guidance and support needed for ethical conduct of business and compliance of law. The Code reflects the values of the Company viz. Customer Value, Integrity, one team and Excellence.
A copy of the Code has been uploaded on the Companyâs website www.sumeetindustries.com. The Code has been circulated to all the Directors and Management Personnel and its compliance is affirmed by them annually.
A declaration signed by the Companyâs Managing Director for the compliance of this requirements is published in this Report.
DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS
Pursuant to Section 149(6) of the Companies Act, 2013, Independent Directors of the Company have made a declaration confirming the compliance of the conditions of the independence stipulated in the aforesaid section.
WHISTLE BLOWER MECHANISM
In order to ensure that the activities of the Company and its directors , employees and Vendors are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the Company has adopted a Vigil mechanism/Whistle Blower Policy. This policy is explained in Corporate Governance Report and also uploaded on the website of the company i.e. www.sumeetindustries.com
DISCLOSURE RELATED TO BAORD, COMMITTEES AND POLICIES
A) BOARD MEETINGS :
The Board of Directors met 17 times during the financial year ended 31st March, 2016 in accordance with the provisions of the Companies Act,2013 and rules made there under. The details thereof are given in the Corporate Governance Report forming part of the Annual report.
B) COMMITTEE MEETINGS :
AUDIT COMMITTEE
The Audit Committee of the Board comprises of Mr. B.C. Chordia ( Chairman ) , Mr. Sumeet Kumar Somani , Member and Mr. Atamram Sarda , Member.
All recommendations made by the Audit Committee were accepted by the Board during the year 2015-16. The brief details of the Audit Committee are given in Corporate Governance Report forming part of the Annual report .
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee of the Board comprises of Mr. B. C. Chordia (Chairman), Mr. Atamram Sarda, Member and Mr. Dinesh Sharan Khare, Member.
The Nomination and Remuneration Committee and this Policy are in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and SEBI (LODR) Regulation, 2015 (as may be amended from time to time). Emphasis is given to persons from diverse fields or professionals.
The Nomination and remuneration Committee has framed the âNOMINATION & REMUNERATION AND EVALUATION POLICY â(Annexure-6 (i)) and âPOLICY ON BOARD DIVERSITY (Annexure-6 (ii)) âforming part of the Annual Report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Committee review and ensures redressal of investor grievances. The Stakeholders Relationship Committee of the Baord comprises of Mr. B. C. Chordia (Chairman), Mr. Atamram Sarda, Member and Mr. Sumeet Kumar Somani, Member.
The brief details of the Stakeholders Relationship Committee are given in Corporate Governance Report forming part of the Annual report .
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Board has laid down the Companyâs policy on Corporate Social Responsibility (CSR) and the CSR activities of the company are carried out as per the instructions of the Committee.
The CSR committee of the Board comprises of Mrs. Gangadevi Somani, Chairman , Mr. Sumeet Kumar Somani, Member and Mr. Atmaram Sarda , Member.
PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulation, 2015, 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 Committee, Nomination and Remuneration Committee. This evaluation is led by the Chairman of the Board Governance, Nomination and Remuneration Committee with specific focus on the performance and effective functioning of the Board.
The result of the evaluation is satisfactory and adequate and meets the requirement of the Company.
KEY MANAGERIAL PERSON
Mr. Shankarlal Somani who is Managing Director (Executive), Mr. Sumeet Kumar Somani, the Executive Director and Chief Financial Officer and Mr. Anil Kumar Jain, Company Secretary who have been appointed before commencement of the Companies Act, 2013 are the Key Managerial Personnel of the company.
ACKNOWLEDGEMENT
Your Directors would like to express their grateful appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities and Shareholders during the year under review. Your Directors wish to place on record their deep sense of appreciation for devoted services of the Executives, Staff and workers of the Company for its success.
On behalf of the Board of Directors
Sd/-
Place : Surat Shankarlal Somani
Date : 4th August 2016 Chairman cum Mg. Director
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the 26th Annual Report and
Audited Statement of Accounts for the year ended 31stMarch, 2014.
The robustness of any business is effectively measured by how the
company performs in its most challenging period. The Indian economy
passed through a difficult phase with business activities showing
downsizing growth in most of sectors due to depreciation in the value
of the rupee, rising crude prices, high inflation etc. Even during an
economic slowdown, your company has continued to grow and registered
net profit of Rs. 1761.54 Lacs and Turnover of Rs. 110799.62 Lacs due
to efficient management of energy and overhead cost, general
improvement in operational efficiency and better management of
working-capital. We have further strengthen our competitive
capabilities to deliver more consistent growth focusing on cost
rationalization and consolidating capabilities.
FINANCIAL RESULTS (Rs. in lacs) (Rs. in lacs)
31-03-14 31-03-13
Gross profit before interest & 8170.69 7067.39
Depreciation
Less: Interest 3050.90 2171.88
Depreciation 2452.85 1989.86
Profit before Tax 2666.94 2905.65
Less : Provision for Taxation
Current Tax 559.00 581.34
MAT Credit (559.00) (581.35)
Deferred Tax 873.32 944.70
Profit after Tax 1793.62 1960.96
Less : Taxation of Previous Year 32.08 45.02
Profit available for appropriation 1761.54 1915.94
Dividend on Equity & Pref. Share - 269.82
and Dividend Tax
Short Prov. For Dividend for previous year - -
OPERATIONS
The company has posted a satisfactory performance for the year under
review. The company has produced 87460.918 Tons of Pet Chips /
Polyester / Polypropylene Multifilament Yarn and dispatched 78905.632
Tons of Pet Chips / Polyester / P.P. Yarns.
Income from operation of the company has marginally decreased from Rs.
1159.34 Crores to Rs. 1108.00 Crores. EBIDTA has been increased from
Rs. 70.67 Crores to Rs. 81.71 Crores and Net profit after Tax has been
marginally decreased from Rs. 19.16 Crores to Rs. 17.62 Crores in
comparison to last year.
DIVIDEND
The Board of directors do not recommended to declare dividend during
the year due to ploughing back the profit to be utilized in the setting
up new Texturising Machineries and general corporate purposes.
EXPANSION & MODERNISATION
During the year under review your company has successfully commissioned
Waste Recycling plant with 5400 TPA capacity and also efforts are being
made for increasing the capacity of recycled chips. Under this plant
company is producing chips from wastage yarns of polyester.
During the year the company has also successfully increased it''s
spinning capacity of FDY production by upgrading old eight end winders
by replacing them with twelve end high speed winders and thereby total
capacity of the FDY production has been increased from 40600 TPA to
51450 TPA.
During the year the company has also set up 66 KV Sub-station at its
plant and taking supply of power from DGVCL. The company is also
sourcing power from open access purchase through grid under open access
regulation.
NEW PROJECT
In the current financial year, the company is going to setup8(Eight)
new Texturising machineries as forward integration with total capacity
of 40 Tons per day to produce DTY yarns of varied deniers & filaments.
The company is also exploring enhancing the capacity of manufacturing
recycled chips from Waste Recycling Plant by importing some more
machinery of new technologies.
OVERSEAS SUBSIDIARY COMPANY
The company has incorporated a wholly owned subsidiary company in
Singapore registered with Registrar of Companies and Business,
Singapore. Pursuant to Accounting Standard AS- 21 issued by the
Institute of Chartered Accountants of India and the provisions of the
Listing Agreement with Stock Exchanges, the company has prepared
Consolidated Financial Statements of the Company and its subsidiaries
are included in the Annual Report.
EXPORTS
The company has been exploring all the possibilities for exporting its
products. During the year under review, your company has exported
products worth of Rs. 286.75 Crores in comparison to Rs. 122.24 Crores
in the last year showing an increase of 134% over previous year.
At present company is exporting to Bangladesh, Egypt, Saudi Arabia,
China, Argentina, Iran, Poland, Vietnam, Philippines, Israel, Morocco,
Columbia, Ethiopia, Mexico, Nepal, Brazil, U.S.A& Singapore etc.
Exploring export markets has been a key area of focus for the company.
Your Company expects more growth in the overall export sales in the
current year also.
DEPOSITORY SYSTEM
As members are aware, the company''s shares are compulsorily tradable in
the electronic form. As on March 31, 2014 almost 94.62% of the
Company''s total paid-up capital representing 5,80,39,738 shares were in
dematerialized form. In view of the numerous advantages offered by the
Depository system, members holding shares in physical mode are advised
to avail of the facility of dematerialization on either of the
Depositories.
FIXED DEPOSITS
The Company has invited deposits from public in accordance with the
section 58 A of the Companies Act, 1956 (corresponding Section 73 and
74 of the Companies Act, 2013) to the tune of Rs. 396.14 Lacs . There
were no deposits, which were claimed but not paid by the Company.
DIRECTORS
Mr. Bhagchand Chordia (DIN No. 00165398), Director of the company,
would retire by rotation at the ensuing Annual General Meeting and
being eligible, offer himself for re-appointment.
The Board of Directors at their meeting held on 28/06/2014 has
appointed Smt. Ganga Devi Somani, (DIN No.06913790) as an Additional
director of the company. Smt. Ganga Devi Somani retires by rotation at
the ensuing Annual General Meeting (AGM) and being eligible, offer
himself for re-appointment.
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 annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departure.
(ii) 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 and of the
profit or loss of the Company for the year under review.
(iii) 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.
(iv) That the directors had prepared the annual accounts on a going
concern basis.
(v) The Director, in the case of a listing Company, had laid down,
internal financial controls to be followed by the Company and that such
internal financial controls are adequate and were operating
effectively; and
(vi) 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.
AUDITORS
M/s. Pradeep Singhi & Associates, Chartered Accountants hold office
until the conclusion of the ensuing Annual General Meeting. They have
confirmed that their appointment, if made, would be within the
prescribed limits under section 224 (1-B) of the Companies Act, 1956.
Members are requested to re-appoint them at the Annual General Meeting.
COST ACCOUNTING RECORDS
The Company has maintained cost accounting records in respect of
manufacturing of Partially Oriented Yarn (POY), Fully Draw Yarn (FDY),
Polypropylene Multifilament Yarn (PPMFY) & Pet Chips as required. The
company has appointed Mr. Vipin M. Patel, Cost Accountant for
conducting the audit of such records for the financial year 2013-14.
PERSONNEL
The Board of Directors wishes to express their appreciation to all the
employees for their outstanding contribution to the operations of the
company. As required by the provisions of Section 217 (2A) of the
Companies Act, 1956 (corresponding to section 134 of the Companies Act,
2013) read with Companies (Appointment & remuneration) rules 2014, no
employee is drawing remuneration in excess of the prescribed limits.
Your company also appreciates that revenue and profit growth cannot
take place without the right equality of people. To that effect, your
company has undertaken a series of measures that ensures that the most
appropriate people are recruited in to the organization.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility is an integral part of the Company''s
ethos and policy and it has been pursuing this on a sustained basis.
The Company assists schools situated at near by villages by
distributing dresses, books among poor students etc. Technical
education and training are imparted to the employees through Industrial
Training and Workshops. Emphasis was laid on creation of awareness
amongst the villagers about the need to protect the environment. CSR
activities carried out by the Company have strengthened the
relationship with local people. During the year under report your
Company constituted CSR Committee and drawn up Company''s CSR policy to
plan and implement CSR activities as per provision of Companies Act,
2013
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 205A(5) and 205C of the Companies
Act, 1956 (corresponding to section 124 & 125 of the Companies Act,
2013) an amount of Rs. 12,81,128/- which pertains to the dividend for
the year 2006-07, and remained unpaid or unclaimed for a period of 7
years, has been transferred by the Company to the Investor Education &
Protection Fund.
INTERNAL CONTROL SYSTEM
The Company''s internal control system includes audit and verification
of compliance with defined policies and procedures by Internal Audit
Function. The internal auditors independently evaluate the adequacy of
internal controls and audit the sample of the transactions in value
terms. Independence of the audit is ensured by the direct reporting of
internal audit function to the Audit Committee of the Board.
INDUSTRIAL RELATIONS
The Company continued to maintain harmonious and cordial relations with
its workers in all its businesses during the year under report. Your
company firmly believes that a dedicated work force constitute the
primary source of sustainable competitive advantage.
RISK MANAGEMENT
Risk Management is the systematic process of understanding, measuring,
controlling and communicating organization''s risk exposures while
achieving its objectives. The company''s risk management policy stems
from a philosophy of pursuing sustainable growth and creating economic
value while calibrating and mitigating risks. The Board of Directors
regularly review risks and threats and takes suitable steps to
safeguard its interest. The focus shifts from one area to another area
depending upon the prevailing situation. During the year under review,
highest importance was given to the management of foreign currency
exchange rate fluctuation risk.
INSURANCE
All the properties of the Company including buildings, plant and
machineries and stocks have been adequately insured.
CASH FLOW ANALYSIS
The Cash Flow Statement for the year under reference in terms of Clause
32 of the Listing Agreement with the stock exchanges forms part of the
Annual Report.
FOREIGN EXCHANGE TRANSACTIONS
In order to hedge the company''s exposure to foreign exchange and
interest rate, the company enters into forward contracts. The
volatility witnessed in the global markets has reiterated the need for
robust forex management systems and prudent investment practices. All
forex exposures are hedged upon the occurrence of an exposure. In case
of liabilities in respect of foreign currency loans obtained for
acquisition of fixed assets, the variation in the liabilities arising
out of exchange rates at the year end have been capitalized during the
year as per Companies (Accounting Standard) Amendment Rules, 2009.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
The company has now set up 66 Kva Sub-Station at its plant and taking
supply of power from DGVCL. The company is sourcing power through open
access purchase from grid under open access regulation and thereby
reducing its power cost substantially in comparison to power generated
from Gas. Further this is also being resulted to the company in
utilizing stable power supply leading to higher production efficiency.
Information in accordance with the provisions of Section 217 (1) (e) of
the Companies Act, 1956 (Corresponding to section 134 of the Companies
Act, 2013), read with Companies (Disclosures of Particulars in the
Report of Board of Directors) Rules, 1988, regarding conservation of
energy, technology absorption and foreign exchange earnings and outgo
is given in the Annexure "A" forming part of this report.
RESEARCH & DEVELOPMENT
The Company is giving great emphasis to innovation in product and
process technology and operational efficiencies. The company has set up
a separate fully equipped well designed lab for testing of MEG and PTA
and developing better quality of Pet chips and Yarns with different
deniers and filaments. It has institutionalized a multiple-stage
quality control system at the material handling, operations and
finished goods stage. The enhanced quality so developed has been
performing well in the domestic as well as in international market.
Successful efforts are being made to re-engineer the products & process
to reduce cost and optimize material consumption. The product lines of
the plant are designed to change product with minimum changeover losses
and thus meet customer requirement even for small quantities.
CORPORATE GOVERNANCE
i) The Company has complied with all the mandatory provisions of Clause
49 of the Listing Agreement relating to the Corporate Governance.
ii) Pursuant to Clause 49 of the listing agreement with
Stock-Exchanges, Corporate Governance Report and Auditors Certificate
regarding compliance of conditions of Corporate Governance and a
Management Discussion and Analysis Statement forms integral part of
this Annual Report.
iii) Your Company is listed with Bombay Stock Exchange Limited and
National Stock Exchange of India Limited.
ACKNOWLEDGMENT
Your Directors would like to express their grateful appreciation for
the assistance and co-operation received from the Financial
Institutions, Banks, Government Authorities and Shareholders during the
year under review. Your Directors wish to place on record their deep
sense of appreciation for devoted services of the Executives, Staff and
workers of the Company for its success.
By order of the Board Directors
Sd/-
Place : Surat Shankarlal Somani
Date :11th August 2014 Chairman cum Mg.Director
Mar 31, 2013
TO, THE MEMBERS
The Directors have pleasure in presenting the 25th Annual Report and
Audited Statement of Accounts for the year ended 31st March, 2013.
The overall performance of the current year was satisfactory due to
efficient management of energy and overhead cost, general improvement
in operational efficiency and better management of working-capital. We
have further strengthen our competitive capabilities to deliver more
consistent growth focusing on cost rationalization and consolidation
capabilities.
FINANCIAL RESULTS
(Rs. in lacs) (Rs. in lacs)
31-03-13 31-03-12
Gross profit before interest & Depreciation 7067.39 5817.92
Less : Interest 2171.88 1081.19
Depreciation 1989.86 1201.75
Profit before Tax 2905.65 3534.98
Less: Provision for Taxation
CurrentTax 581.34 818.54
MAT Credit (581.35) (521.21)
Deferred Tax 944.70 388.07
Profit after Tax 1960.96 2485.53
Less : Taxation of Previous Year 45.02 73.53
Profit available for appropriation 1915.94 2412.00
Dividend & Dividend Dist. Tax (F.Y 2011-12) 269.82 -
Short Prov. For Dividend & Dividend
for previous year (F.Y. 2010-11) - 208.16
OPERATIONS
The company has posted a satisfactory performance for the year under
review. The company has produced 91936.934 Tons of Pet Chips /
Polyester / Polypropylene Multifilament Yarn and dispatched 86875.80
Tons of Pet Chips/Polyester/Polypropylene MultifilamentYarn.
Income from operation of the company has increased from Rs. 824.48
Crores to Rs. 1159.34 Crores. EBIDTA has been increased from Rs. 58.18
Crores to 70.67 Crores and Net profit after Tax has been decreased from
Rs. 24.12 Crores to Rs. 19.16 Crores in comparison to last year.
DIVIDEND
The Companyhasnotdeclaredanydividendforthefinancialyearended2013,dueto
ploughing backthe profits to be utilized in the proposed up-gradation
of the FDY plant.
EXPANSION & MODERNISATION
During the year under review your company has successfully commissioned
Polyester Filament yarn ( POY & FDY) a direct spinning unit through MEG
and PTA, thereby total capacity of the spinning has been increased from
53000 TPA to 82800 TPA The commercial production of the same has been
commenced since month of May, 2012.
During the current financial year the company has envisaged a plan to
increase its spinning capacity of FDY production by upgrading old eight
end winders by replacing them with twelve end high speed winders. The
total project cost of up gradation is approx Rs. 41.50 Crores and there
by total capacity of the FDY production will be increased from 40600
TPAto 51450 TPA.
NEW PROJECT
In the current financial year, the company has successfully
commissioned Wastage Recycling Plant with 5400 TPA capacity. Under this
plant company is producing chips from polyester wastage yarns. The
commercial production of the same has been commenced in the month of
June, 2013.
The company has also set up 66 KV Sub- stations at its plant and taking
supply of power from DGVCL. The company is sourcing power from open
access purchase through grid under open access regulation and thereby
reducing its power cost substantially in comparison to power generated
from Natural Gas.
OVERSEAS SUBSIDIARYCOMPANY
The company has incorporated a wholly owned subsidiary company in
Singapore registered with Registrar of Companies and Business,
Singapore. During the financial year under review, the company has not
made any investment in its subsidiary company.
EXPORTS
The company has been exploring all the possibilities for exporting its
products. During the year under review, your company has exported
products worth of Rs. 122.24 Crores in comparison to Rs. 9.08 Crores in
the lastyear.
At present company is exporting to South Africa, Bangladesh, Egypt,
Saudi Arabia, China, Peru, Argentina, Portugal, Indonesia, Iran, U.S.A&
Singapore etc. Exploring export markets has been a key area of focus
for the company. Your Company expects more growth in the overall export
sales in the current year also.
DEPOSITORYSYSTEM
As members are aware, the company''s shares are compulsorily tradable in
the electronic form. As on March 31, 2013 almost 94.17% of the
Company''s total paid-up capital representing 5,82,89,738 shares were in
dematerialized form. In view of the numerous advantages offered by the
Depository system, members holding shares in physical mode are advised
to avail of the facility of dematerialization on either of the
Depositories.
FIXED DEPOSITS
The Company has not accepted any deposits during the year under review.
DIRECTORS
Mr. Vinod Kumar Ladia, Director of the Company being retire by rotation
does not offer themselves for re-appointment. The Board of Directors
recommended the name of Mr. Atma Ram Sarda as a Director of the
company. Necessary resolution for theirappointment has been placed
inthenoticeforapproval.
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 annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departure.
(ii) 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 atthe end of the financial yearand of the
profit or lossof the Companyfortheyearunder review.
(iii) 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.
(iv) That the directors had prepared the annual accounts on a going
concern basis.
AUDITORS
M/s. Pradeep Singhi & Associates, Chartered Accountants hold office
until the conclusion of the ensuing Annual General Meeting. They have
confirmed that their appointment, if made, would be within the
prescribed limits under section 224 (1-B)of the Companies Act, 1956.
Members are requested to re-appoint them at the Annual General Meeting.
COST ACCOUNTING RECORDS
The Company has maintained cost accounting records in respect of
manufacture of Partially Oriented Yarn ( POY ), Fully Draw Yarn ( FDY
), Polypropylene Multifilament Yarn ( PPMFY ), Pet Chips as required.
The company has appointed Mr. Vipin M. Patel, Cost Accountant for
conducting the audit of such records for the financial year2012-13.
PERSONNEL
The Board of Directors wishes to express their appreciation to all the
employees for their outstanding contribution to the operations of the
company. As required by the provisions of Section 217 (2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 175 as amended, no employee is drawing remuneration in excess of
the prescribed limits. Your company also appreciates that revenue and
profit growth cannot take place without the right equality of people.
Tothat effect, your company has undertaken a series of measures which
ensures that the most appropriate people are recruited in to the
organization.
RISK MANAGEMENT
Risk Management is the systematic process of understanding, measuring,
controlling and communicating organization''s risk exposures while
achieving its objectives. The company''s risk management policy stems
from a philosophy of pursuing sustainablegrowth and creating
economicvaluewhile calibrating and mitigating risks.The Board of
Directors regularly review risks and threats and takes suitable steps
to safeguard its interest. The focus shifts from one area to another
area depending upon the prevailing situation. During the year under
review, highest importance was given to the management of foreign
currency exchange rate fluctuation risk.
INSURANCE
All the properties of the Company including buildings, plant and
machineries and stocks have been adequately insured.
FOREIGN EXCHANGE TRANSACTIONS
In order to hedge the company''s exposure to foreign exchange and
interest rate, the company enters into foiward contracts. The
volatility witnessed in the global markets has reiterated the need for
robust forex management systems and prudent investment practices. All
forex exposures are hedged upon the occurrence of an exposure. In case
of liabilities in respect of foreign currency loans obtained for
acquisition of fixed assets, the variation in the liabilities arising
out of exchange rates at the year end have been capitalized during the
year as per Companies (Accounting Standard)Amendment Rules, 2009.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
During the current year, the company has stopped captive generation of
power from gas based Genset due to steep rise in the prices of Natural
Gas. The company has now set up 66 KV Sub-Station at its plant and
taking supply of power from DGVCL. The company is sourcing power
through open access purchase from grid under open access regulation and
thereby reducing its power cost substantially in comparison to power
generated from Natural Gas. Further this is also being resulted to the
company in utilizing stable power supply leading to higher production
efficiency.
Information in accordance with the provisions of Section 217 (1) (e) of
the Companies Act, 1956, read with Companies (Disclosures of
Particulars in the Report of Board of Directors) Rules, 1988, regarding
conservation of energy, technology absorption and foreign exchange
earnings and outgo is given in the Annexure "A" forming part of this
report.
RESEARCH & DEVELOPMENT
The Company is giving great emphasis to innovation in product and
process technology and operational efficiencies. The company has set up
a separate fully equipped well designed lab for testing of MEG and PTA
and developing better quality of Pet chips and Yarns with different
deniers and filaments. It has institutionalized a multiple-stage
quality control system at the material handling, operations and
finished goods stage. The enhanced quality so developed has been
performing well in the domestic as well as in international market.
Successful efforts are being made to re-engineer the products & process
to reduce cost and optimize material consumption. The product lines of
theplantare designed to change product with minimum changeover losses
and thus meetcustomerrequirementevenforsmall quantities.
CONSTITUTION OF AUDIT COMMITTEE
Pursuant to the provisions of Sections 292A of the Companies Act, 1956,
the Board of Directors has Audit Committee comprising ofthree directors
namely Shri BhagchandChordia.Shri SumeetKumarSomani and Shri Devi
Prasad Saboo.
CORPORATEGOVERNANCE
i) The Company has complied with all the mandatory provisions of Clause
49 of the Listing Agreement relating to the Corporate Governance.
ii) Pursuant to Clause 49 of the listing agreement with
Stock-Exchanges, Corporate Governance Report and Auditors Certificate
regarding compliance of conditions of Corporate Governance and a
Management Discussion and Analysis Statement are made as a part of the
Annual Report.
iii) Your Company is listed with Bombay Stock Exchange Limited and
National Stock Exchange Limited.
ACKNOWLEDGEMENT
Your Directors would like to express their grateful appreciation for
the assistance and co-operation received from the Financial
Institutions, Banks, Government Authorities and Shareholders during the
year under review. Your directors wish to placeon record theirdeep
sense of appreciation for devoted services of the Executives, Staff and
workersoftheCompanyforitssuccess.
On behalf of the Board of Directors
Place : Surat SHANKARLAL SOMANI
Date :13th AUGUST 2013 Chairman cum Mg. Director
Mar 31, 2012
The Directors have pleasure in presenting the 24th Annual Report and
Audited Statement of Accounts for the year ended 31st March, 2012.
In the year under review, we have further strengthen our competitive
capabilities to deliver more consistent growth focusing on cost
rationalization and consolidation capabilities.
Despite rising interest rates, rupee appreciation, high inflation,
volatility in capital flows, your company has been able to earn
net-profit of Rs. 2412.00 Lacs due to efficient use of raw materials,
energy conservation, overhead cost cutting and better management of
working-capital.
FINANCIAL RESULTS
31-03-12 31-03-11
Gross profit before interest & Depreciation 5817.92 6139.39
Less: Interest 1081.19 832.14
Depreciation 1201.75 1177.60
Profit before Tax 3534.98 4129.65
Less: Provision for Taxation
Current Tax 706.17 818.54
MAT Credit 167.29 (521.21)
Deferred Tax 175.99 388.07
Profit after Tax 2485.53 3444.25
Less : Taxation of Previous Year 73.53 28.51
Profit available for appropriation 2412.00 3415.74
Divided on Pref. Share and Dividend Tax - 69.96
Equity Dividend & Dividend Dist. Tax - 466.38
Short Prov. For Dividend for previous year 2412.00 4420.51
Balance transfer to Balance sheet
OPERATIONS
The company has posted a satisfactory performance for the year under
review. The company has produced 68408.420 Tons of Pet Chips /
Polyester / Polypropylene Multifilament Yarn and dispatched 67630.95
Tons of Pet Chips / Polyester / P.P. / Poly yarns.
Income from operation of the company has increased from Rs. 820.40
Crores to Rs. 824.48 Crores. EBIDTA has been marginally decreased from
Rs. 61.39 Crores to 58.18 Crores and Net profit after Tax has been
decreased from Rs. 34.16 Crores to Rs. 24.12 Crores in comparison to
last year.
DIVIDEND
Your directors have pleasure to recommend Dividend of 4% i.e. Rs. 0.40
per share on face value of Rs. 10/- on the paid up equity share capital
of the company for the year ended 31st March, 2012. The dividend will
be free of tax in the hands of recipients.
EXPANSION & MODERNISATION
During the current financial year, your company has successfully
commissioned Polyester Filament yarn (POY & FDY) a direct spinning unit
through MEG and PTA, thereby total capacity of the spinning has been
increased from 53000 TPA to 100000 TPA. The company has also
successfully commissioned 8.6 MW Gas based Genset Power Plant, thereby
total captive power generation capacity has increased from 8.6 MW to 17
MW. The commercial production of the same has been commenced in the
month of May, 2012.
EXPORTS
The company has been exploring all the possibilities for exporting its
products. During the year under review, your company has exported Pet
Chips and Polyester Chips products of Rs. 908.63 Lacs.
At present company is exporting Pet Chips and Polyester yarns to South
Africa, Bangladesh, Egypt, Saudi Arabia, China, Peru, Argentina,
Portugal, Indonesia, Iran, U.S.A & Singapore etc. Exploring export
markets has been a key area of focus for the company. Your Company
expects reasonable growth in the overall export sales in the current
year.
QIP PLACEMENTS
During the year 2011-12, your company has made equity offering to
Qualified Institutional Buyers ("QIBs") and allotted 1,82,94,578 Nos.
of Equity shares of face value of Rs. 10/- each at a price of Rs. 30.25
(including premium of Rs.20.25 per equity share) to part finance its
Rs. 150.00 Crores expansion project for enhancing its spinning
capacity.
DEPOSITORY SYSTEM
As members are aware, the company's shares are compulsorily tradable in
the electronic form. As on March 31, 2012 almost 94.09% of the
Company's total paid-up capital representing 5,82,89,738 shares were in
dematerialized form. In view of the numerous advantages offered by the
Depository system, members holding shares in physical mode are advised
to avail of the facility of dematerialization on either of the
Depositories. '
FIXED DEPOSITS
The Company has not accepted any deposits during the year.
DIRECTORS
Mr. Devi Prasad Saboo retires by rotation and being eligible offer
himself for re-appointment.
Mr. Rajkumar Somani, Managing Director and Mr. Mangilal Lahoti,
Director have resigned from the Board. Mr. Shankarlal Somani, Chairman
of the Board appointed as Chairman cum Managing Director of the
Company, subject to the approval of the shareholders in the Annual
General Meeting (AGM).
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 annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departure.
(ii) 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 and of the
profit or loss of the Company for the year under review.
(iii) 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
(iv) That the directors had prepared the annual accounts on a going
concern basis.
AUDITORS
M/s. Pradeep Singhi & Associates, Chartered Accountants hold office
until the conclusion of the ensuing Annual General Meeting. They have
confirmed that their appointment, if made, would be within the
prescribed limits under section 224 (1-B) of the Companies Act, 1956.
Members are requested to re-appoint them at the Annual General Meeting.
COST ACCOUNTING RECORDS
The Company has maintained cost accounting records in respect of
manufacture of Partially Oriented Yarn, Polypropylene Multifilament
Yarn, Pet chips as required. The company has appointed Mr. Vipin M.
Patel, Cost Accountant for conducting the audit of such records for the
financial year 2011-12.
PERSONNEL
The Board of Directors wishes to express their appreciation to all the
employees for their outstanding contribution to the operations of the
company. As required by the provisions of Section 217 (2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 175 as amended, no employee is drawing remuneration in excess of
the prescribed limits. Your company also appreciates that revenue and
profit growth cannot take place without the right equality of people.
To that effect, your company has undertaken a series of measures which
ensures that the most appropriate people are recruited in to the
organization.
RISK MANAGEMENT
Risk Management is the systematic process of understanding, measuring,
controlling and communicating organization's risk exposures while
achieving its objectives. The company's risk management policy stems
from a philosophy of pursuing sustainable growth and creating economic
value while calibrating and mitigating risks. The Board of Directors
regularly review risks and threats and takes suitable steps to
safeguard its interest. The focus shifts from one area to another area
depending upon the prevailing situation. During the year under review,
highest importance was given to the management of foreign currency
exchange rate fluctuation risk.
INSURANCE
All the properties of the Company including buildings, plant and
machineries and stocks have been adequately insured.
FOREIGN EXCHANGE TRANSACTIONS
In order to hedge the company's exposure to foreign exchange and
interest rate, the company enters into forward contracts. The
volatility witnessed in the global markets has reiterated the need for
robust forex management systems and prudent investment practices. All
forex exposures are hedged upon the occurrence of an exposure. In case
of liabilities in respect of foreign currency loans obtained for
acquisition of fixed assets, the variation in the liabilities arising
out of exchange rates at the year end have been capitalized during the
year as per Companies ( Accounting Standard ) Amendment Rules, 2009.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
During the year 2011-12, the company has successfully commissioned 8.6
MW Gas based captive power plant and thereby increasing its total
captive capacity to 17 MW, as a result of which substantial saving in
energy costs have been accruing . Further this will also resulted to
the company in utilizing stable power supply leading to higher
production efficiency.
Information in accordance with the provisions of Section 217 (1) (e) of
the Companies Act, 1956, read with Companies (Disclosures of
Particulars in the Report of Board of Directors) Rules, 1988, regarding
conservation of energy, technology absorption and foreign exchange
earnings and outgo is given in the Annexure "A" forming part of this
report.
RESEARCH & DEVELOPMENT
The Company is giving great emphasis to innovation in product and
process technology and operational efficiencies. For its recently
commissioned Continuous Polymerization Plant (CP) and also for POY and
FDY, the company has set up a separate fully equipped well designed lab
for testing of MEG and PTA and developing better quality of Pet chips
and Yarns with different deniers and filaments. It has
institutionalized a multiple-stage quality control system at the
material handling, operations and finished goods stage. The enhanced
quality so developed has been performing well in the domestic as well
as in international market. Successful efforts are being made to
re-engineer the products & process to reduce cost and optimize material
consumption. The product lines of the plant are designed to change
product with minimum changeover losses and thus meet customer
requirement even for small quantities.
CONSTITUTION OF AUDIT COMMITTEE
Pursuant to the provisions of Sections 292A of the Companies Act, 1956,
the Board of Directors has Audit Committee comprising of three
directors namely Shri Bhagchand Chordia, Shri Sumeet Kumar Somani and
Shri Devi Prasad Saboo.
CORPORATE GOVERNANCE
(i) The Company has complied with all the mandatory provisions of
Clause 49 of the Listing Agreement relating to the Corporate
Governance.
(ii) Pursuant to Clause 49 of the listing agreement with
Stock-Exchanges, Corporate Governance Report and Auditors Certificate
regarding compliance of conditions of Corporate Governance and a
Management Discussion and Analysis Statement are made as a part of the
Annual Report.
(iii) Your Company is listed with Bombay Stock Exchange Limited and
National Stock Exchange Limited.
ACKNOWLEDGMENT
Your Directors would like to express their grateful appreciation for
the assistance and co-operation received from the Financial
Institutions, Banks, Government Authorities and Shareholders during the
year under review. Your directors wish to place on record their deep
sense of appreciation for devoted services of the Executives, Staff and
workers of the Company for its success.
On behalf of the Board of Directors
Place : Surat SHANKARLAL SOMANI
Date : 21st AUGUST 2012 Chairman
Mar 31, 2011
To The Members,
The Directors have pleasure in presenting the 23rd Annual Report and
Audited Statement of Accounts for the year ended 31st March, 2011.
Despite rising interest rates, rupee appreciation, high inflation,
volatility in capital flows, we felt consumer and business confidence
is very strong and are reasonably balanced across the country. The
confidence is supported by fast growing disposable income and corporate
earnings. Manufacturing is expected to be a major driver of growth over
the next few years. Your company has achieved Net profit of Rs. 34.44
Crores due to efficient usage of Raw material, Energy conservation,
Quality of its finished products, Overhead cost cutting and Efficient
management of working capital.
The efforts made by your Company in improving efficiencies in all areas
of operations including working capital management resulting in lower
interest cost and foreign currency risk management have contributed
greatly towards the improved performance. We trust you will be quite
satisfied with the performance of your Company.
FINANCIAL RESULTS (Rs. in Lacs) (Rs. in Lacs)
Gross profit before Interest &
Depreciation 6130.60 3100.11
Less : Interest 832.14 778.84
Depreciation 1168.81 643.20
Profit before Tax 4129.65 1678.07
Less : Provision for Taxation
Current Tax 818.54 159.28
MAT Credit (521.21) 0.00
Deferred Tax 388.07 92.41
Profit after Tax 3444.25 1105.81
Less : Taxation of Previous Year 28.51 20.95
Add : Balance Brought Forward 1541.11 927.63
Profit available for appropriation 4956.85 2012.49
Dividend on Pref. Share and Dividend Tax 69.96 3.46
Equity Dividend & Dividend Dist. Tax 466.38 467.92
Balance Transfer to General Reserve 0.00 0.00
Balance transfer to Balance sheet 4420.51 1541.11
OPERATIONS
The company has successfully commissioned expansion of 23500 TPA POY
Plant and 21000 TPA FDY Plant in the month of March,2010 and the effect
of operation of this plant has been satisfactory reflected in the
financial year under review.
The company has produced 77267.696 Tons of Pet Chips / Polyester /
Polypropylene Multifilament Yarn and dispatched 77565.130 Tons of Pet
Chips / Polyester / P.P. / Poly Yarns.
Income from operation of the company has increased by 120 % from Rs.
376.78 Crores to Rs. 828.11 Crores. EBIDTA has increased from Rs.
31.00 Crores to Rs. 61.31 Crores and Net profit after tax has increased
by 215% from Rs. 10.85 Crores to Rs. 34.16 Crores in comparison to last
year.
DIVIDEND
Your directors have pleasure to recommend Dividend of 10% i.e Rs. 1/-
per share on face value of Rs. 10/- on the paid up equity share capital
of the company for the year ended 31st March, 2011. As per current
paid-up capital, the total dividend and divided tax thereon would
absorb an apx. sum of Rs. 466.38 Lacs. The dividend will be free of tax
in the hands of recipients.
EXPORTS
The company has been exploring all the possibilities for exporting its
products. During the year under review, your company has exported Pet
Chips and Polyester Chips products of Rs. 2553.50 Lacs as compared to
Rs. 1139.77 Lacs in the last year an increase of 124% over the previous
year.
At present company is exporting Pet Chips and Polyester yarns to South
Africa, Bangladesh, Egypt, Saudi Arabia, China, Peru, Argentina,
Portugal, Indonesia, Iran, U.S.A & Singapore etc. Exploring export
markets has been a key area of focus for the company. Your Company
expects reasonable growth in the overall export sales in the current
year.
DEPOSITORY SYSTEM
As members are aware, the company's shares are compulsorily tradable in
electronic form. As on March 31, 2011 almost 91.15% of the Company's
total paid-up capital representing 3,64,55,718 shares were in
dematerialized form. In view of the numerous advantages offered by the
Depository system, members holding shares in physical mode are advised
to avail of the facility of dematerialization on either of the
Depositories.
NEW PROJECTS
In the year 2009-10, The company has successfully commissioned 100000
TPA Continuous Polymerization (C.P) Plant and 23500 TPA of POY Plant
and 21000 TPA of FDY Plant during the year under review and the plants
are running satisfactorily.
During the year, the Company has chalked out Rs. 530 Crores expansion
plan for enhancing its manufacturing capacity of both POY and FDY and
Pet Chips in two phases.
In the first phase of expansion production capacity of POY and FDY will
be increased from 53000 TPA to 100000 TPA and setting up another 8 MW
Gas based Genset Captive Power Plant with project cost of Rs.150.00
Crores. This expansion will utilize balance capacity of
Polycondensation Plant as captive consumption by manufacturing POY/FDY
directly from MEG & PTA instead of Producing PET Chips. This project
will enhance the scale of operation and improve the cost
competitiveness of company's product. After completion of this
expansion total turnover of the company will be increased by Rs. 100
Crores and EBIDTA by Rs. 40 Crores. This project is expected to be
on-stream by Apil,2012.
In the second phase of expansion new green field project of 200000 TPA
Continuous Poly Condensation ( CP ) Plant will be setup to manufacture
Bright FDY Yarns, POY Yarns, Yarn grade and Bottle grade Pet Chips and
setting up another 18 MW Gas based Genset Power Project with total
project cost of Rs. 400.00 Crores.
GAS BASED POWER PLANT
The Company has successfully commissioned 6 MW Gas based Genset Captive
Power Plant in the year 2009- 10, thereby enhancing capacity of captive
power generation by 8.5 MW at the company's plant at Karanj, Surat.
Being new expansion projects in line, the company is also in the
process of setting up another 26 MW Gas based Genset captive power
plant nearby its expansion project.
The Gas based Genset Power Plant is eligible to be registered as CDM
projects and the existing 6 MW Gas based Plant is under validation
process for getting registered with UN to be eligible to get carbon
credits.
FIXED DEPOSITS
The Company has not accepted any deposits during the year.
DIRECTORS
Mr. B. C. Chordia and Mr. Vinod Kumar Ladia retire by rotation and
being eligible offer themselves for re-appointment.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to Director's Responsibility Statement, it is
hereby confirmed:
(i) That in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departure.
(ii) 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 and of the
profit or loss of the Company for the year under review.
(iii) 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.
(iv) That the Directors had prepared the annual accounts on a going
concern basis.
AUDITORS
M/s. Pradeep Singhi & Associates, Chartered Accountants hold office
until the conclusion of the ensuing Annual General Meeting. They have
confirmed that their appointment, if made, would be within the
prescribed limits under section 224 (1-B) of the Companies Act, 1956.
Members are requested to re-appoint them at the Annual General Meeting.
COST ACCOUNTING RECORDS
The Company has maintained cost accounting records in respect of
manufacture of Partially Oriented Yarn, Polypropylene Multifilament
Yarn, Pet chips as required. The company has appointed Mr. V.
Srinivasan, Cost- Accountant for conducting the audit of such records
for the financial year 2010-11.
PERSONNEL
The Board of Directors wishes to express their appreciation to all the
employees for their outstanding contribution to the operations of the
company. As required by the provisions of Section 217 (2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 175 as amended, no employee is drawing remuneration in excess of
the prescribed limits. Your company also appreciates that revenue and
profit growth cannot take place without the right equality of people.
To that effect, your company has undertaken a series of measures that
ensures that the most appropriate people are recruited in to the
organization.
RISK MANAGEMENT
Risk Management is the systematic process of understanding, measuring,
controlling and communicating organization's risk exposures while
achieving its objectives. The company's risk management policy stems
from a philosophy of pursuing sustainable growth and creating economic
value while calibrating and mitigating risks. The Board of Directors
regularly review risks and threats and takes suitable steps to
safeguard its interest. The focus shifts from one area to another area
depending upon the prevailing situation. During the year under review,
highest importance was given to the management of Foreign currency
exchange rate fluctuation risk.
INSURANCE
All the properties of the Company including buildings, plant and
machineries & stocks have been adequately insured.
FOREIGN EXCHANGE TRANSACTIONS
In order to hedge the company's exposure to foreign exchange and
interest rate, the company enters into forward contracts. The
volatility witnessed in the global markets has reiterated the need for
robust forex management systems and prudent investment practices. All
forex exposures are hedged immediately upon the occurrence of an
exposure. In case of liabilities in respect of foreign currency loans
obtained for acquisition of fixed assets, the variation in the
liabilities arising out of exchange rates at the year end have been
capitalized during the year as per Companies ( Accounting Standard )
Amendment Rules, 2009.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
During the year 2009-10, the company has successfully commissioned 6 MW
Gas based captive power plant and thereby increasing its total captive
capacity to 8.5 MW, as a result of which substantial saving in energy
costs have been accruing. Further this will also resulted to the
company in utilizing stable power supply leading to higher production
efficiency. Under the current expansion program to meet the power
requirements, the company is also setting up another 8 MW Gas based
captive Power Plant.
Information in accordance with the provisions of Section 217 (1) (e) of
the Companies Act, 1956, read with Companies (Disclosures of
Particulars in the Report of Board of Directors) Rules, 1988, regarding
conservation of energy, technology absorption and foreign exchange
earnings and outgo is given in the Annexure "A" forming part of this
report.
RESEARCH & DEVELOPMENT
The Company is giving great emphasis to innovation in product and
process technology and operational efficiencies. For its newly
commissioned Continuous Polymerization Plant (CP) and also for POY and
FDY, the company has set up separate fully equipped well designed lab
for testing of MEG and PTA and developing better quality of Pet chips
and Yarns with different deniers and filaments . The enhanced quality
so developed has been performing well in the domestic as well as in
international market. Successful efforts are being made to re-engineer
the products & process to reduce cost and optimize material
consumption. The product lines of the plant are designed to change
product with minimum changeover losses and thus meet customer
requirement even for small quantities.
CONSTITUTION OF AUDIT COMMITTEE
Pursuant to the provisions of Sections 292A of the Companies Act, 1956,
the Board of Directors has Audit Committee comprising of three
directors namely Shri Bhagchand Chordia, Shri Sumeet Kumar Somani and
Shri Mangilal Lahoti.
CORPORATE GOVERNANCE
i) The Company has complied with all the mandatory provisions of Clause
49 of the Listing Agreement relating to the Corporate Governance.
ii) Pursuant to Clause 49 of the Listing agreement with Exchanges,
Corporate Governance Report and Auditors Certificate regarding
compliance of conditions of Corporate Governance and a Management
Discussion and Analysis Statement are made as a part of the Annual
Report.
iii) Your Company is Listed at Bombay Stock Exchange Limited and
National Stock Exchange of India Limited.
ACKNOWLEDGEMENT
Your Directors would like to express their grateful appreciation for
the assistance and co-operation received from the Financial
Institutions, Banks, Government Authorities and Shareholders during the
year under review. Your directors wish to place on record their deep
sense of appreciation for devoted services of the Executives, Staff and
Workers of the Company for its success.
On behalf of the Board of Directors
Place : Surat SHANKARLAL SOMANI
Date : 15-07-2011 Chairman
Mar 31, 2010
The Directors have pleasure in presenting the 22nd Annual Report and
Audited Statements of Accounts for the year ended 31st March, 2010. The
year was an eventful year for Indian economy. Raw Material Prices i.e
MEG , PTA have witnessed high fluctuation in their price trend in the
last financial year. Price of agricultural products, minerals and
metals, oil commodities and food stuffs were headed north and after a
long decade economy witnessing double digit inflation.
Despite these your Company has been able to earn net profit of Rs.
11.06 Crores due to efficient usage of Raw material, Energy
conservation, Quality of its finished products, Overhead Cost Cutting
and better management of Working Capital.
The efforts made by by your Company in improving efficiencies in all
areas of operations including Working capital management resulting in
lower interest cost and foreign currency risk management, have
contributed greatly towards the improved performance. We trust you will
be quite satisfied with the performance of your Company.
(Rs. in lacs) (Rs.in lacs)
FINANCIAL RESULTS
31-03-10 31-03-09
Gross profit before interest & Depreciation 3100.11 1446.68
Less: Interest 778.84 487.57
Depreciation 643.20 325.86
Profit before Tax 1678.07 633.25
Less : Provision for Taxation
Current Tax - 159.28
Deferred Tax 572.26 92.41
Profit after Tax 1105.81 381.56
Less : Taxation of Previous Year 20.95 1.84
Add : Balance Brought Forward 927.63 379.72
Profit available for appropriation 2012.49 641.23
Prov. for Divided and Dividend tax 471.38 0.00
Balance transfer to General Reserve 0.00 0.00
Balance transfer to Balance sheet 1541.11 1020.95
DIVIDEND
Your Directors have pleasure to recommend Dividend of 10% i.e. Rs. 1/-
per share on the paid up equity share capital of the company for the
year ended 31st March, 2010 . As per current paid-up capital, the total
dividend and divided tax thereon would absorb an apx. sum of Rs. 471.38
Lacs. The dividend will be free of tax in the hands of recipients.
OPERATIONS
During the year under review, the company has successfully commissioned
100000 TPA Continuous Polymerization ( C.P. ) Plant and commercial
production of the same has been started since 1st July, 2009
Another expansion of 23500 TPA POY Plant and 21000 TPA FDY Plant has
been successfully commissioned in the month of March, 2010 and the full
effect of operation of this plant will be reflected in the next
financial year.
The company has posted a satisfactory performance for the year under
review. The company has produced 39010.768 Tons of Pet Chips /
Polyester / Polypropylene Multifilament Yarn and dispatched 38986.823
Tons of Pet Chips / Polyester / P.P. / Poly yarns. The Company has
manufactured 13.66 Lacs Mtrs of Polyester Fabrics and dispatched 14.24
Lacs Mtrs of Polyester Fabrics. The company has also produced 162.680
Tons of Menthol Products.
Income from Operation of the Company has increased by 138 % from Rs.
158.26 Crores to Rs. 376.78 Crores and Net Profit After Tax has
increased by 190% from Rs. 3.82 Crores to Rs. 11.06 Crores in
comparison to last year.
EXPORTS
The company has been exploring all the possibilities for exporting its
products. During the year under review, your Company has exported
Polyester Yarns, Pet Chips and Menthol products of Rs. 1139.77 Lacs as
compared to Rs. 1119.61 Lacs in the last year.
At present company is exporting Pet Chips and Polyester yarns to South
Africa, Bangladesh, Egypt, Saudi Arabia, China, Peru, Argentina,
Portugal, Indonesia, Iran, U.S.A & Singapore etc. Exploring exports
market has been a key area of focus for the company. Your Company
expects reasonable growth in the overall export sales in the current
year.
DEPOSITORY SYSTEM
As members are aware, the companys shares are compulsorily tradable in
electronic form. As on March 31, 2010, almost 90.83% of the Companys
total paid-up capital representing 3,63,26,108 shares were in
dematerialized form. In view of the numerous advantages offered by the
Depository system, members holding shares in physical mode are advised
to avail of the facility of dematerialization on either of the
Depositories.
NEW PROJECTS
The company has successfully commissioned 100000 TPA Continuous
Polymerization ( C.P. ) Plant and 23500 TPA of POY Plant and 21000 TPA
of FDY Plant during the year under review and the plants are running
satisfactorily.
The Company has chalkout Rs. 530 Crores expansion plan for enhancing
its manufacturing capacity of both POY and FDY and Pet Chips in two
phases.
In the first phase of expansion production capacity of POY and FDY will
be increased from 53000 TPA to 100000 TPA and setting up another 8 MW
Gas based Genset Captive Power Plant with project cost of Rs.130.00
Crores. This expansion will utilize balance capacity of
Polycondensation Plant as captive consumption by manufacturing POY/FDY
directly from MEG & PTA instead of Producing PET Chips. This project
will enhance the scale of operation and improve the cost
competitiveness of companys product. After completion of this
expansion total turnover of the company will be increased by Rs. 100
Crores and EBIDTA by Rs. 40 Crores.
In the second phase of expansion new green field project of 200000 TPA
Continuous Poly Condensation ( CP ) Plant will be setup to manufacture
Bright FDY Yarns, POY Yarns, Yarn grade and Bottle grade Pet Chips and
setting up another 26 MW Gas based Genset Power Project with total
project cost of Rs. 400.00 Croes. After completion of this project ,
the company will achieve record turnover of Rs. 2500.00 Crores mark.
This expansion will be party financed by ECB/FCTL/FCCB/TERM Loans and
balance will be through internal accruals and Issue of Equity Shares by
way of FPO/Rights/ QIP/Preferential Allotment.
GAS BASED POWER PLANT
The Company has successfully commissioned 6 MW Gas based Genset Captive
Power Plant thereby enhancing capacity of captive power generation by
8.5 MW at the companys plant at Karanj, Surat.
Being new expansion projects in line , the company is also in the
process of setting up another 26 MW Gas based Genset captive power
Plant nearby its expansion project.
The Gas based Genset Power Plant is eligible to be registered as CDM
projects and the project is under validation process for getting
registered with UN to get carbon credits..
SUBSIDIARY COMPANIES
The company had a only subsidiary named Somani Industries (Nepal) Pvt.
Ltd. which has been wind up and the loss of Rs. 33.28 Lacs in
investment in the subsidiary company has been accounted for during the
year under review.
FIXED DEPOSITS
The Company has not accepted any deposits during the year.
DIRECTORS
Mr. Devi Prasad Saboo and Mr. Mangilal Lahoti retire by rotation and
being eligible offer themselves for re- appointment.
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 annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departure.
(ii) 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 and of the
profit or loss of the Company for the year under review.
(iii) 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.
(iv) That the directors had prepared the annual accounts on a going
concern basis.
AUDITORS
M/s. Pradeep Singhi & Associates, Chartered Accountants hold office
until the conclusion of the ensuing Annual General Meeting. They have
confirmed that their appointment, if made, would be within the
prescribed limits under section 224 (1-B) of the Companies Act, 1956.
Members are requested to re-appoint them at the Annual General Meeting.
COST ACCOUNTING RECORDS :
The Company has maintained cost accounting records in respect of
manufacture of Partially Oriented Yarn, Polypropylene Multifilament
Yarn, Pet chips and Menthol as required. The company has appointed Mr.
V. Srinivasan , Cost Accountant for conducting the audit of such
records for the financial year 2009-10.
PERSONNEL
The Board of Directors wishes to express their appreciation to all the
employees for their outstanding contribution to the operations of the
company. As required by the provisions of Section 217 (2A) of the
Companies Act, 1956 read with Companies (Particulars of Employees)
Rules, 175 as amended, no employee is drawing remuneration in excess of
the prescribed limits.
RISK MANAGEMENT
Risk Management is the systematic process of understanding, measuring,
controlling and communicating organizations risk exposures while
achieving its objectives. The Board of Directors regularly review risks
and threats and takes suitable steps to safeguard its interest. The
risk management policy is periodically examined and updated. The focus
shifts from one area to another area depending upon the prevailing
situation. During the year under review, highest importance was given
to the management of foreign currency exchange rate fluctuation risk.
INSURANCE
All the properties of the Company including buildings, plant and
machinery and stocks have been adequately insured.
FOREIGN EXCHANGE TRANSACTIONS:
In order to hedge the companys exposure to foreign exchange and
interest rate, the company entered into forward contracts. In case of
liabilities in respect of foreign currency loans obtained for
acquisition of fixed assets, the variation in the liabilities arising
out of exchange rates at the year end have been capitalized during the
year as per Companies ( Accounting Standard ) Amendment Rules, 2009.
ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
During the year the company has successfully commissioned 6 MW Gas
based captive power plant and thereby increasing its total captive
capacity to 8.5 MW, as a result of which substantial saving in energy
costs have been accruing. Further this will also resulted to the
company in utilizing stable power supply leading to higher production
efficiency.
Information in accordance with the provisions of Section 217 (1) (e) of
the Companies Act, 1956, read with Companies (Disclosures of
Particulars in the Report of Board of Directors) Rules, 1988, regarding
conservation of energy, technology absorption and foreign exchange
earnings and outgo is given in the Annexure ÃAÃ forming part of this
report.
RESEARCH & DEVELOPMENT
The Company is giving great emphasis to innovation in product and
process technology and operational efficiencies. For its newly
commissioned Continuous Polymerization Plant ( CP ), the company has
set up a fully equipped well designed lab for testing of MEG and PTA
and developing better quality of Pet chips and yarns with different
deniers and filaments . The enhanced quality so developed will perform
well in the domestic as well as in international market. Successful
efforts are being made to re-engineer the products & process to reduce
cost and optimize material consumption.
The product lines of the plant are designed to change product with
minimum changeover losses and thus meet customer requirement even for
small quantities. Further with commissioning of expansion project of
POY and FDY, we will be able to produce POY of varied denier range fine
to coarse.
CONSTITUTION OF AUDIT COMMITTEE
Pursuant to the provisions of Sections 292A of the Companies Act, 1956,
the Board of Directors has Audit Committee comprising of three
directors namely Shri Bhagchand Chordia, Shri Mangilal Lahoti and Shri
Devi Prasad Saboo.
CORPORATE GOVERNANCE
i) The Company has complied with all the mandatory provisions of Clause
49 of the Listing Agreement relating to
the Corporate Governance.
ii) Pursuant to Clause 49 of the listing agreement with Bombay Stock
Exchange Limited, Corporate Governance Report and Auditors Certificate
regarding compliance of conditions of Corporate Governance and a
Management Discussion and Analysis Statement are made as a part of the
Annual Report.
iii) Your Company is listed with Bombay Stock Exchange Limited.
ACKNOWLEDGEMENT
Your Directors would like to express their grateful appreciation for
the assistance and co-operation received from the Financial
Institutions, Banks, Government Authorities and Shareholders during the
year under review. Your directors wish to place on record their deep
sense of appreciation for devoted services of the Executives, Staff and
workers of the Company for its success.
On behalf of the Board of Directors
SHANKARLAL SOMANI
Chairman
Place : Surat
Date : 09-06-2010
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