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Eastern Silk Industries Ltd.

BSE: 590022 Sector: Industrials
NSE: EASTSILK ISIN Code: INE962C01027
BSE LIVE 15:40 | 17 Aug 6.59 6.59
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NSE 15:22 | 17 Aug 6.25 -0.30
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OPEN 6.59
PREVIOUS CLOSE 0.00
VOLUME 135
52-Week high 9.19
52-Week low 2.00
P/E
Mkt Cap.(Rs cr) 52
Buy Price 0.00
Buy Qty 0.00
Sell Price 6.59
Sell Qty 44385.00
OPEN 6.59
CLOSE 0.00
VOLUME 135
52-Week high 9.19
52-Week low 2.00
P/E
Mkt Cap.(Rs cr) 52
Buy Price 0.00
Buy Qty 0.00
Sell Price 6.59
Sell Qty 44385.00

Eastern Silk Industries Ltd. (EASTSILK) - Director Report

Company director report

DIRECTORS

TO THE MEMBERS

Your Directors have pleasure in presenting their sixty-seventh Annual Report togetherwith the Audited Accounts of your Company for the year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs. in Lacs)

2013 2012
Profit/(Loss) before depreciation and taxation (9759.52) 932.73
Less/Add: Depreciation 1782.17 2123.45
Profit/(Loss) before taxation (11541.69) (1190.72)
Add: Exceptional Items 186.88 (10478.33)
(11728.57) (11669.05)
Less/Add: Provision for Earlier Year Taxation 0.37 (113.84)
(11728.20) (11555.21)
Less/Add: Deferred Tax Liability (2193.03) (2394.78)
Profit/(Loss) after tax (9535.91) (9160.43)
Add: Balance brought forward from previous year 1981.36 11141.79
Add: Transferred from General Reserve 5450.00
Less: Impairment of Revalued Assets 2588.23
Which the Directors have decided
to carry forward to the next year (4692.78) 1981.36

PERFORMANCE REVIEW

The demand for silk fabrics and made-ups tapered down both in Europe market and USmarket leading to lower sales during the year. To make up for the volume loss in the silk,the Company had to resort to polyester, cotton, viscose and other blended fabric. Althoughthe volumes remain the same but the realization per unit came down considerably whichresulted in lower profit margin. The Company's stand alone operation without consideringinterest and depreciation left small positive cash surplus. The interest in the carry overdebts could not be absorbed because of the lower turnover and stiff competition in themarket in spite of the management's best efforts.

The conditions stipulated under the CDR mechanism which is to be complied within31.03.2013, were duly complied and the promoters infused a sum of Rs. 740.00 lakhs astheir contribution.

FUTURE OUTLOOK

Going forward unless there is a recovery in the overseas markets for the demand forsilk fabrics and garments, the future outlook for the time being looks bleak. However, themanagement is trying to change the product mix and lot of emphasis is made on new designsand colourways. It is expected that these changes will bring in additional business andalso improve the bottom line. Limited success has come in the supplies made in thedomestic market and we are expecting it to grow gradually over the years.

DIVIDEND

In view of the accumulated losses the Board of Directors do not recommend any dividendon Equity Shares. The Board of Directors does not also declare dividend on RedeemableCumulative Preference Shares.

PUBLIC DEPOSIT SCHEME

During the year, your Company has not accepted any deposits. There are no outstandingdeposits as on date.

CORPORATE GOVERNANCE

A separate section on Corporate Governance and Management Discussion and Analysistogether with the Auditors' Certificate confirming the compliance of conditions onCorporate Governance as per Clause 49 of the Listing Agreement with the Stock Exchangeform part of the Annual Report.

DIRECTORS

Shri G.D Harnathka and Shri R.S Rungta, Directors of the Company retires from theoffice by rotation and are eligible for re-appointment.

DIRECTORS' RESPONSIBILITY STATEMENT

As required under provisions of Section 217 (2AA) of the Companies Act, 1956, yourDirectors confirm:

i) That in preparation of the annual accounts, the applicable accounting standards havebeen duly followed.

ii) That the Directors have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the loss of the Company for the year under review.

iii) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act, 1956for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.

iv) That the Directors have prepared the accounts for the financial year ended 31stMarch, 2013 on a going concern basis.

DISCLOSURE OF PARTICULARS

The information required under Rule 2 of the Companies Act, 1956 (Disclosure ofParticulars in the Report of Board of Directors Rules, 1988) relating to conservation ofenergy, technology absorption, foreign exchange earnings and outgo is annexed.

AUDITORS

Messrs B.K. Shroff & Company, Chartered Accountants, retire at the forthcomingAnnual General Meeting and being eligible, offer themselves for re-appointment.

The remarks of the Auditors regarding provision for bad and doubtful debts, recognitionof Net Deferred Tax Assets have been duly explained in Note No. 37 and 39 to the Accountsrespectively.

COST AUDITORS

Pursuant to the directives of the Central Government under the provisions of Section233 B of the Companies Act, 1956, the Cost account records maintained by your Company aresubject to yearly audit by qualified Cost Auditors. Your Company has appointed M/s. N.Radhakrishnan & Co., a firm of Cost Auditors, for conducting the audit of such recordsfor the financial year 2012-13.

PERSONNEL

There was no employee employed during the financial year or a part of the financialyear who was in receipt of remuneration for that year or any part of that year at a rateprescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies(Particulars of Employees) Rules, 1975 as amended.

ACKNOWLEDGEMENT

Your Directors wish to convey their appreciation for the co-operation and assistancereceived from the government, financial institutions, bankers and stakeholders of yourCompany. The Board wishes to place on record its deep appreciation for the integrity andhard work of its employees at all levels to meet challenging markets.

Registered Office: By Order of the Board
19, R. N. Mukherjee Road S. S. SHAH
Kolkata 700 001 Chairman & Managing Director
Dated: The 29th May, 2013

ANNEXURE TO DIRECTORS' REPORT

Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with theCompanies (Disclosure of particulars in the Report of Board of Directors) Rules 1988,forming part of Directors' Report :

CONSERVATION OF ENERGY :

The Company has developed a continuous process of energy conservation through improvedoperational and maintenance practices.

FORM A

(A) Power and Fuel Consumption

1. Electricity Current Year Previous Year
(a) Purchased Units 30,83,301 29,81,557
Total Amount Rs. 1,93,89,568 1,80,90,354
Rate/Unit Rs. 6.29 6.07
(b) Own Generation through
Diesel Generator Units 1,81,481 1,50,550
Total Amount Rs. 27,38,737 20,29,952
Cost/Unit Rs. 15.09 13.48
2. (a) Briquettes
Quantity Kgs. 9,58,400 12,69,729
Total Amount Rs. 42,36,298 53,50,189
Cost/Unit Rs. 4.42 4.21
(b) Fire Wood
-
Quantity Kgs. 5,37,470
-
Total Amount Rs. 20,93,262
-
Cost/Unit Rs. 3.89
(B) Consumption per unit of products:
Silk Fabrics Mtrs 5,25,779.30 5,15,237.80
Electricity Rs. 36.88 35.11
Briquettes Rs. 8.06 10.38
Fire wood Rs. 3.98 -
Diesel Rs. 5.21 3.94

TECHNOLOGY ABSORPTION

FORM B

Research & Development
1. Specific areas in which R&D carried out by the Company R&D activities are concentrated on development of new fabrics and new designs.
2. Benefits derived as a result of above R&D Higher product value, better realization and repeat orders.
3. Future plan of action Further improvement in quality parameters of finished products.
4. Expenditure on R & D
Capital Rs. Nil
Recurring Rs. 59.09 lakhs
R&D Expenditure as a percentage of turnover 0.80%

Technology Absorption, Adaptation & Innovation

1. Efforts in brief, made towards technology Absorption, adaptation and innovation Latest technologies are used to develop value added products with innovative designs.
2. Benefits derived as a result of the above Minimum wastage and reduced sampling cost.
3. Details of imported technology Not Applicable.
FOREIGN EXCHANGE EARNINGS & OUTGO
(a) Activities relating to exports, initiatives taken to increase exports, development of new export markets for product and services and export plans. Participating in the international trade fairs to showcase the Company's new developments and also invite the different Company's selling agents as well as customers to provides a platform of interaction in order to procure orders for the Company's products as well as scout for new customers.
Travelling expenses in respect of such activities are also expensive. Travelling by the sales personnel also brings in orders for the Company's products.
(b) (I) Overseas Travelling The information on foreign exchange earnings and outgo is contained in Note No. 48 & 49 of Notes on Financial Statements.
(ii) Commission to Agents
(iii) Consultation Fees
(iv) Others

 

By Order of the Board
Kolkata 700 001 S. S. SHAH
Dated : The 29th May 2013 Chairman & Managing Director