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Amarjothi Spinning Mills Ltd.

BSE: 521097 Sector: Industrials
NSE: AMARJOTHI ISIN Code: INE484D01012
BSE LIVE 11:49 | 23 Feb 149.75 0.45
(0.30%)
OPEN

145.35

HIGH

152.90

LOW

145.35

NSE LIVE 00:00 | 29 Jan Stock Is Not Traded.
OPEN 145.35
PREVIOUS CLOSE 149.30
VOLUME 560
52-Week high 168.00
52-Week low 65.00
P/E 7.38
Mkt Cap.(Rs cr) 101.08
Buy Price 148.00
Buy Qty 505.00
Sell Price 149.75
Sell Qty 90.00
OPEN 145.35
CLOSE 149.30
VOLUME 560
52-Week high 168.00
52-Week low 65.00
P/E 7.38
Mkt Cap.(Rs cr) 101.08
Buy Price 148.00
Buy Qty 505.00
Sell Price 149.75
Sell Qty 90.00

Amarjothi Spinning Mills Ltd. (AMARJOTHI) - Director Report

Company director report

AMARJOTHI SPINNING MILLS LIMITED ANNUAL REPORT 2011-2012 DIRECTOR'S REPORT TO THE MEMBERS OF AMARJOTHI SPINNING MILLS LIMITED Your Directors have pleasure in presenting the Twenty Fourth Annual Report together with the audited accounts of your Company for the year ended 31st March 2012. FINANCIAL RESULTS: 2011-2012 2010-2011 (Rupees in lacs) Sales 12956.48 12399.36 Gross Profit 2951.29 3838.25 Less: Depreciation 1322.28 1193.91 Finance costs 1207.31 1097.07 Provision for taxation (Including Deferred tax for current year) 91.62 2621.21 566.95 2857.93 Profit for the year 330.08 980.32 Add: Balance in Profit & Loss A/c 2918.54 2192.69 Surplus available for appropriation 3248.62 3173.01 APPROPRIATION: Proposed dividend (Including Dividend Tax) 117.68 156.90 Income-tax relating to earlier years 0.00 -0.47 Transfer to General Reserve 33.01 98.04 Balance carried to Balance Sheet 3097.93 2918.54 Total 3248.62 3173.01 DIVIDEND: Your Directors are glad to recommend payment of dividend of 15% on the Equity Capital. The dividend will be free of tax in the hands of shareholders since the company will be paying the Dividend Distribution Tax at the prescribed rate. OPERATIONS: The company's sales increased by 4.5% to Rs. 12956.48 Lacs during the year under review as against Rs. 12399.36 Lacs in the previous year. YARN DIVISION: Your Directors inform you that in spite of the increase in raw material prices and the power-cut imposed by the Tamil Nadu Electricity Board, the profitability of the yarn Division has not been affected much. PROCESSING UNIT: The performance of the Processing unit has improved and problems arising from the effluent Treatment plants are being sorted out. WIND MILLS: The Total Capacity of Wind Mills as on date remains at 17.60 MW, the same as in the Previous year. Your Directors are happy to inform you that the Company's Clean Development Mechanism (CDM) Project, involving the Company's Wind Mills, for the period from 2007 to 2010 has been approved by the United Nations Frame work Convention on climate change (UNFCCC) and the Company has been given credit for 44342 Numbers of Certified Emission Reductions (CERs). FINANCE: During the year under review the Company has:- a) Availed Fresh Long term loans aggregating to Rs.275 lacs for funding the purchase of Machineries and Construction of Building and Fresh Short Term Loans aggregating to Rs. 1750 lacs for Raw Material procurement. b) Discharged Long Term loans in full aggregating to Rs.90 lacs and short term loans in full aggregating to Rs.4600 lacs. The Particulars of such availement and discharges were duly filed with the Statutory Authorities. DEPOSITS: Your Company has not accepted any deposits from the Public. DIRECTORS: Sri N. Rajan and Dr. V. Subramaniam retire by rotation at this Annual General Meeting and are eligible for re-appointment. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the provisions of Sec. 217(2AA) of the Companies Act, 1956, your Directors wish to state that: i) In the preparation of the Annual Accounts for the year, all applicable accounting standards have been followed. ii) Your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2012 and of the profit of the Company for the year ended on that date. iii) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv) The Directors had prepared the Annual Accounts on a 'Going Concern' basis. AUDITORS: Sri V. Narayanaswami, M.A., F.C.A., Chartered Accountant, the Auditor of your company, retires at the conclusion of this Annual General Meeting and is eligible for re-appointment. PERSONNEL: There are no employees of the Company who come under the purview of Sec. 217(2A) of the Companies Act, 1956. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: The particulars required to be furnished in terms of Section 217(1)(e) of the Companies Act, 1956 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure-I. INDUSTRIAL RELATIONS: The industrial relations have been extremely cordial and the Management thanks all the employees for their continued contribution towards the growth of the organisation. CORPORATE GOVERNANCE: Report on Corporate Governance is furnished in the section on Corporate Governance in the Annual Report. A certificate from the Auditor of the company regarding compliance with the conditions of corporate governance as stipulated under clause 49 of the Listing Agreement is furnished in the section on Corporate Governance. MANAGEMENT'S ANALYTICAL REPORT: Management's Analytical Report as required by the listing agreement is furnished in the section on Corporate Governance. ACKNOWLEDGMENT: Your Directors would like to express their grateful appreciation for assistance and co-operation received from the bankers M/s. Bank of Baroda, Karur Vysya Bank Ltd, Punjab National Bank, State Bank of India, State Bank of Travancore, Bank of India and Axis Bank Ltd during the year under review. Your Directors wish to place on record their deep sense of appreciation for the devoted services of the staff and workers of the Company for its continuous development. The Company extends its thanks to the Central and State Government authorities for their continued co-operation and assistance. MAY LORD VENKATESWARA SHOWER HIS BLESSINGS FOR THE CONTINUED PROSPERITY OF THE COMPANY. For and on behalf of the Board of Directors Place: Tirupur N. RAJAN Date : 17.08.2012 Chairman ANNEXURE-1 TO DIRECTOR'S REPORT: The information required under Section 217(i)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of the Directors) Rules, 1988 are as follows: CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO A. CONSERVATION OF ENERGY a. Measures taken: i) Continuous monitoring of energy consumption. ii) Optimization of power parameters. iii) Improving power factor. b. Proposed measures: Shall continue to do as stated in (a) above. c. Total energy consumption and energy consumption as per Form 'A' is given here under. 1. POWER CONSUMPTION (SPINNING AND PROCESSING UNITS) Current Year Previous Year Electricity a) Purchased from TNEB: Units (KWH) 18406324 20907318 Total amount (Rs.) 95797941 97656523 Rate per unit (Rs.) 5.20 4.67 b) Own Generation: i) Through Diesel Generator Units (KWH) 2076818 1909864 Units per Itr. Of Diesel oil 3.16 3.19 Total amount (Rs.) 28099764 24231189 Rate per unit (Rs.) 13.53 12.69 ii) Through Wind Mills Units (KWH) 32509591 30681814 Current Year Previous Year 2. PRODUCTION OF YARN IN KGS. 5115304 5643589 3. POWER COST PER KG. OF YARN (Rs.) 6.10 4.15 (Includes power cost of Processing Unit and power generated by wind mills) B. RESEARCH AND DEVELOPMENT: The Company is a member of SITRA (South India Textile Research Association) and is being benefited from their R&D activities. Significant improvements have been made in the quality of the melange yarn. C. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION: a. The latest technology has been/is being adopted in various stages for improving productivity and product quality and reducing consumption of power. b. Imported Technology: None D. FOREIGN EXCHANGE EARNINGS AND OUTGO: Foreign Exchange earnings : Rs. 382.52 Lakhs Foreign Exchange outgo : Rs. 316.42 Lakhs MANAGEMENT DISCUSSION AND ANALYSIS 1. COMPANY'S BUSINESS: The Company's main business is manufacturing and marketing of Melange Yarn. 2. INDUSTRY STRUCTURE AND DEVELOPMENT: Textile industry contributes significantly to the country's total exports. The Government of India has suspended the concessional rate of interest under TUF scheme for a part of the year 2007-08 and later extended the scheme till 2013. The Government has also allowed formation of textile parks in many parts of the country. Substantial capacity expansion has taken place in the textile sector. The quantitative ceiling on export of cotton yarn to non-quota countries has been removed. TEXPROCIL endorsement for export of cotton yarn has been dispensed with import of consumable spares and purchase of machineries under the EPCGC scheme. 3. OPPORTUNITIES AND THREATS: The size of the Indian Textile industry is on the threshold of an accelerated rate of growth with the dismantling of the quota system. Due to the implementation of WTO recommendations on free trade policies, the volume of export from Tirupur is expected to increase three-fold. This Company being a major supplier of melange yarn to the Tirupur market with its local presence, there is good scope for improved turnover and profitability. The Company has been improving its share of value added yarn in the market in the form of Dyed fibre yarn, Dyed cotton yarn, PC yarn, etc. The market for these products is very good and will increase over the years. The company offers competitive price due to low power cost through windmills, low interest cost, low processing cost, etc. The Company has obtained ISO 9001:2000 Certification, MGMT.SYS RVA C 215 Certification for quality management and systems and OEKO TEX STANDARD-100 Certification for not using harmful substances in the product. The OEKO TEXT STANDARD-100 certification is a pre-requisite in the global market as the supplies are made to exporters. This will increase the trade/export opportunities to the company. Though presently there is a certain lack of clarity in the general market conditions, no unit - specific threat to the operations and performance of the company is perceived in the long run. However any major changes in export/import policies related to cotton and yarn and foreign fluctuations will have their impact on textile sector. Current Price fluctuations in yarn will affect the Market of our product in the forthcoming period. More over we are facing Labour scarcity and it will have impact on our production. The lack of clear-cut government policy and parameters in respect of pollution control is delaying the benefits that the company planned from the processing unit. 4. SEGMENT-WISE PERFORMANCE: The company operates only in one segment and the operational results are mentioned elsewhere in this report. 5. OUTLOOK: The company will continue to perform well in the domestic market. The ISO Certification is expected to improve the export potential also. The processing unit is expected to add value to the product and contribute to increased turnover and profitability. Further, the company is in the process of implementing several cost saving measures, which will make the product more competitive. 6. RISKS AND CONCERNS: Availability of quality raw material and at competitive prices continuous to be a major factor of concern because India is basically an agrarian economy depending mostly on natural resources like water for its crops. The rising interest rates, increasing fuel prices, power shortage are causes of the concern for the industry as a whole. The effluent treatment related problem faced by the Processing Division and the non-drawal of wind mill generated power by the TNEB are company-specific causes of concern. 7. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The company has adequate internal control systems and procedures commensurate with its size and nature of its business for the purchase of raw materials, plant and machinery, components and other items and for sale of goods. The adequacy of the internal control system is also periodically reviewed by the Audit Committee. 8. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE: The financial performance of the company has been discussed at length in the directors' report to the members. 9. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT: The Company has required number of skilled/semi-skilled persons and places emphasis on training for improving quality and productivity. 10. HEALTH AND SAFETY MEASURES: The company has taken medical insurance cover for all workers. Adequate safety measures have been taken in all our plants for prevention of any untoward incidents. 11. CAUTIONARY STATEMENT: Statements made in this report regarding the company's objectives, projections, expectations and predictions may be forward looking statements under the applicable securities law and regulations. Actual results could differ materially from those expressed or implied. Some of the important factors that could make a difference to the company's operations include global and domestic demand-supply conditions, finished goods prices, raw material costs and availability, interest rates, fuel prices, fluctuations in exchange rates, changes in government regulations and tax structure, economic developments in the domestic and overseas market and other incidental factors. For the Board of Directors Place: Tirupur N. RAJAN Date : 17.08.2012 Chairman