You are here » Home » Companies » Company Overview »


BSE: N.A. Sector: N.A.
NSE: N.A. ISIN Code: N.A.
BSE 05:30 | 01 Jan
NSE 05:30 | 01 Jan

. () - Director Report

Company director report

EVINIX INDUSTRIES LIMITED ANNUAL REPORT 2010-2011 DIRECTOR'S REPORT Dear Members & colleagues, Your Directors have pleasure in presenting the Fifteenth Annual Report together with the Audited Statement of Accounts on the performance of the company for the financial year ended 31st March 2011. FINANCIAL RESULTS Rs in lacs Particulars Year Ended Year Ended March 31, 2011 March 31, 2010 Total Income 22469.36 16574.41 Profit before Depreciation and Interest 1563.88 1726.94 Finance Cost 966.85 771.09 Depreciation 231.07 235.67 Provision for Tax *Including FBT 37.00 51.41 Profit from Operations 365.95 720.19 Deferred Tax 65.49 (62.32) Profit after Tax 263.46 731.10 Prior Year Adjustment 4.45 4.45 Add: Surplus of last Year 3783.40 3056.76 Surplus available for appropriation 3884.58 3783.40 Appropriations General Reserve 0.00 0.00 Proposed Dividend on Equity Shares 0.00 0.00 Surplus Carried to Balance Sheet 3884.58 3783.40 Surplus available for appropriation 3884.58 3783.40 PERFORMANCE OF YOUR COMPANY Your Company is engaged in fashion accessories, apparels and fabric products. These product basket is such that all or one segment are always winning businesses across India & our traditional markets. The Company is growing on a consistent basis and year 2010-11 was not an exception to the same. The Gross income from operation was Rs. 20679.51 lacs in comparison to Rs. 16033.40 lacs during the previous year. Profit after Tax during the year decreased from Rs. 731.10 Lacs to Rs. 263.46 Lacs during the previous year. The Operating profit was lower due to increase in input costs as available across various raw material categories, higher lease rentals on expanded retail space and prolonged pressure on realized prices as well discounting to help recessionary markets in Europe & USA. This year has been year of high cost of money, i.e extended credits to buyer has also added to reduced profits. DIVIDEND Your Directors are of the view that in the current phase of expansion and the large opportunities of further growth available to the company, there will be a need to conserve the funds. Hence, your directors do not recommend dividend for the year financial year ended March 31, 2011. CAPITAL STRUCTURE: The authorised capital of the Company is Rs. 20,00,00,000/- comprising of 20,00,00,000 Equity shares having face value of Rs. 1 out of which the issued, subscribed and paid up capital is Rs. 10,70,00,000/- comprising of 10,70,00,000 Equity shares having face value of Rs. 1/- per share. DIRECTORS In accordance with the Provisions of the Companies Act, 1956, and the Articles of Association of the Company Dr. Ajeet Kumar Doshi and Mr. Mahabir Prasad Additional Directors of the company are being offered for regularization. A brief note in terms of the requirement of the Corporate Governance on the aforesaid Director has been included at Part - I of Annexure - II. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, the Members of the Board confirm that: 1. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation; 2. Prudent accounting policies have been selected and judgments and estimates have been made 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 2011 and of the Profit of the Company for financial year ended 31st March 2011; 3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; 4. Annual accounts have been prepared on a going concern basis. REGISTRAR AND SHARE TRANSFER AGENT Beetal Financial & Computer Services Private Limited is continued to act as Registrars and Share Transfer Agents as common agency both for physical and dematerialized shares as required under Securities Contract (Regulation) Act, 1956. The detail of RTA forms part of the Corporate Governance Report. CORPORATE GOVERNANCE As required under Clause 49 of the Listing Agreement, a Report on Corporate Governance along with Certificate on Corporate Governance confirming compliances with the conditions of Corporate Governance obtained from the Statutory Auditors of the Company is annexed to this Report. (Part - 2 of Annexure - II) MANAGEMENT DISCUSSION AND ANALYSIS The detailed review of operations, performance and future outlook of the Company is given separately under the head 'Management Discussion and Analysis'. (Part - 1 of Annexure - II) LISTING AT STOCK EXCHANGE The Equity Shares of the Company continue to be listed on Bombay Stock Exchange and National Stock Exchange. The Annual Listing Fees for the year 2011-12 have been paid to the Stock Exchanges. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO Information in accordance with the provisions of Section 217(1)(e) of Companies Act, 1956, read with Companies (Disclosure 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 statement annexed (Annexure - I) hereto and forms part of this report. PUBLIC DEPOSITS The Company has neither invited/ nor accepted any deposits during the year within the meaning of Section 58A of the Companies Act, 1956, read with Companies (Acceptance of Deposits) Rules, 1975. PERSONNEL Employee relations continued to be cordial during the year March 31, 2011. Your Company continued its thrust on Human Resource Department. Your Company has initiated various customized training programs viz. personality development, development of inter personal skills, communication skills, public speaking etc. for its employees that enhance both personal, as well as career growth of the employees. These programs are conducted round the year by professional trainers as well as by the human resource department of the Company. Your Company has also encouraged its employees to attend seminars and discussions conducted by professional institutions and trade bodies. The Board wishes to place on record its appreciation to all the employees in the Company for their sustained efforts and immense contribution to the high level of performance and growth of the business during the year. PARTICULARS OF EMPLOYEES As required by the provisions of section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, the name and other particular of the employee is set out in the Annexure I (Annexure to the Director's Report) AUDITORS & AUDITORS' OBSERVATIONS M/s. A.S. Patwa & Co., Chartered Accountants, the Statutory Auditors of the Company, retire at the forthcoming Annual General Meeting of the Company and have expressed their reluctance to continue, if appointed. M/s. Doggar & Company, Chartered Accountants, New Delhi have been shortlisted by the Board of Directors of the Company to take over as the Statutory Auditors of the Company for the financial Year 2011-12 .Your Directors recommend their re-appointment. Observations in the Auditors' Report are dealt with in Notes to Accounts at appropriate places and being self-explanatory need no further explanation. APPRECIATION Your Director place on record their sincere gratitude to the continuing patronage of our valued customers, bankers and financial institutions, business associates, shareholders, suppliers and other statutory authorities who have extended their valuable sustained support and encouragement to your Company. Your Directors look forward to all of your continued support and undertaking in the years to come. Your Managing Director, K. M. Gupta place special thanks to all of you associated with your company specially his colleagues, associates, bankers, statutory & regulatory authorities who have helped him in founding, promoting, steering your company to it's present position in this special categories of specially Fashion accessories. Your directors wish to place on record, their sincere appreciation to the dedication and commitment of its employees for the growth of the Company. Which has understandably, been significant for the Company's success in meeting Targets during testing times as this year. For and on behalf of the Board Sd/- Sd/- (K.M. Gupta) (Kamlesh Kumari) Managing Director Director (Commercial & Administration) Place: FARIDABAD Date : August 19, 2011 ANNEXURE - I ANNEXURE TO THE DIRECTORS' REPORT I. Statement of particulars pursuant to Companies (Disclosure of Particulars in the Report of Directors) Rules 1988. 1. Conservation of Energy a. Energy conservation measures taken : During the period under review, the company has saved energy in production process by optimizing the resources. b. Additional investments and proposals, if any, being implemented for reduction of consumption of energy. : NIL c. Impact of measures at (a) & (b) : All efforts will result in above for reduction of Energy economy of resources consumption and consequent and cost cutting. impact on the cost of production of goods. d. Total Energy Consumption and : Given in the below mentioned chart Energy Consumption per unit of production. A. POWER AND FUEL CONSUMPTION (Rs. in Lacs) PARTICULARS CURRENT YEAR PREVIOUS YEAR 2010-2011 2009-2010 1. Electricity a. Purchased Units (Nos.) 284114 737617 Total Amount (Rs.) 1599369 3855857 Rate/Unit (Rs.) 5.66 5.23 b. Own Generation i) Through Diesel Quantity (Ltr.) 96000 147703 Total Amount (Rs.) 3615360 4927680 Average Rate (Rs.) 37.66 33.36 Generate (Units) (Nos.) N.A. 1119160 Unit per-ltr of Diesel oil (Nos.) N.A. 7.58 Cost/Unit (Rs.) N.A. 5.52 ii) Through Steam Turbine N.A. N.A. 2. Coal N.A. N.A. 3. Diesel (Excluding use on Generation of Electricity) Quantity (Ltrs) 31275 41575 Total amount (Rs.) 1108699 1345788 Average Rate (Rs.) 35.45 32.37 4. Others/Internal generation N.A. N.A. B. CONSUMPTION PER UNIT OF PRODUCTION PARTICULARS ACCESSORIES (PER PIECE) CURRENT YEAR PREVIOUS YEAR 2010-2011 2009-2010 1. ELECTRICITY 0.63 0.63 (Units) 2. COAL N.A N.A 3. OTHERS N.A N.A II. TECHNOLOGY ABSORPTION: Efforts made in technology absorption as per Form-B of the Annexure to the Rules. A. RESEARCH & DEVELOPMENT (R & D) 1. Specific areas in which R&D : R & D work has already started carried out by the Company. and will continue for sometime more. 2. Benefits derived as a result of the above R&D : N.A 3. Future Plan of Action : The company is exploring new areas and new range of products. 4. Expenditure on R&D : N.A. a. Capital : NIL b. Recurring : NIL c. Total : NIL d. Total R&D Expenditure as a Percentage of total turnover : NIL B. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION 1. Efforts, in brief made towards technology absorption, : N.A adaptation and innovation. 2. Benefits derived as result of the above efforts e.g. product improvement, cost reduction, product development, import substitution etc. : N.A 3. In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished : NIL a. Technology imported : N.A. b. Year of import : N.A. c. Has technology been fully absorbed? : N.A. d. If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action. : N.A. III. FOREIGN EXCHANGE EARNINGS AND OUTGO 1. Activities relating to export : Company's export income has view initiatives taken to increase of the world. Company's Exports exports; development of new have grown considerably during export markets for products the last financial year. and services and exports plan. Company is coming out with new & innovative Export plans to further improve it during the next financial year. 2. Total Foreign exchange used : The information regarding Foreign and earned Exchange earnings and outgo are contained in Notes No. 18 & 19 in the Notes to the Accounts. MANAGEMENT DISCUSSION & ANALYSIS Industry structure and developments Its heartening to note that the Indian textile industry contributes around 14 percent to industrial production, 4 per cent of the country's Gross Domestic Product (GDP) and 17 per cent to the country's export earnings. This apart, it also provides direct employment to over 35 million people thereby emerging as the second largest provider of employment after agriculture, according to a Ministry of Textiles report. The cumulative production of cloth during April'09-March'10 has increased by 8.3 per cent as against the corresponding period of the previous year. It is during this year though many companies have shifted their focus from Clothing to other sectors, but new entrants backed by funding from FII's & Private equity shows the strength which Indian Textile sector has. It is our domestic population needs which are growing @16% annually, which enables us to grow. Opportunities and Threats India's textile industry has been on a growth trajectory since the quotas were phased out. Though not very friendly policy initiatives , capacity expansion and India's rising market share, change in products & designs or more so need to have value added hand work products, we are likely to see a rapid export growth in this sector. Changing lifestyles and accelerating preferences of the urban population for branded apparels are also some of the growth drivers. In opening of Retail sector specially Malls coming up across the country welcome new domestic & International brands. Identification of the textile sector as a priority one for 'job creation' by the government certainly augurs well for the long-term needs of trained man power. This is particularly a positive indication for players in the garmenting side, being very labor intensive. India ranks fifth in the global textile and clothing trade (exports being nearly 3% of global textile trade). The European & US brands are now setting up contract manufacturing units in India with special reference to supplies for their Indian Chain Stores. which single handedly opens up a wide array of possibilities for all the stakeholders within the textile industry. Experts believe that the golden era of Chinese textile and apparel exports is over and the production base of global textiles is gradually shifting from China to India, Pakistan and other low cost destinations. Threats are for loosing quantities supply orders to low cost neighboring countries like Bangladesh & Sri Lanka , which needs to be mitigated by shift in product lines as well up gradation of technology. Financial performance of Evinix Industries Limited (in Million) 2010-11 2009-10 Revenue 2,067.95 1,603.23 Other Income 10.59 4.39 Total Income 2,078.54 1,607.62 Expenditure -2,088.36 -1,435.37 Interest -96.68 -77.11 PBDT 59.70 95.14 Depreciation -23.11 -23.57 PBT 36.60 71.57 Tax 3.70 1.09 Net Profit 25.91 72.67 The Company has achieved a Sales Turnover of Rs. 2067.95 million in Financial Year 2010-11 as against sales revenue of Rs 1603.23 million during the previous year. The Company has recorded Profit before Depreciation, and Tax of Rs 59.70 million as against Rs 95.14 million during the year before. A higher net profit of Rs 72.67 million was registered in FY10 as against a profit of Rs 25.91 million during the previous year. Measures undertaken Evinix has started export of Polyester Cotton wraps & scarfs, bedsheet sets to African countries through India based agents and plan to undertake direct export marketing during 3rd quarter of financial year 2010 and the same has been carried on. Your company's expansion plan met with global recession and there was a downturn in retail segment. Consequently, this Strategic Business Unit (SBU) failed to match its projected sales figure and sales were managed on high discounts only. Company has already identified a loss of Rs 14.73 Crores on these retail stores. Despite generating consistent growth in its top line, company's EBIDTA level deteriorated where one of the reasons was fixed expenses incurred for running these stores; same can be depicted from following table Rs. in Crore Particulars 2007-08 2008-09 2009-10 2010-11 Net Sales 119.04 121.78 160.32 206.71 EBIDTA 22.87 15.47 17.26 15.63 EBIDTA (%) 19.21% 12.70% 10.77% 7.56% To shield its main manufacturing activity from the negative impact of its retail segmentand in absence of any hope of its revival in near future, company's management has decided to close all its present stores. As a step, leases of all company operated stores are now cleared of its lock in period of 3 years. Efforts have been undertaken to open more manufacturing locations to meet growing order book position & avoid outsourcing which shall help in improving our bottom line. Internal control systems and their adequacy. The Company maintains and proper internal controls system of internal controls. All the Company's assets are secured and protected against loss from illicit use or dispossession. All the transactions are authorized. It is ensured that Company's internal audit is being strengthened from time to time and all the financial statements and accounting records of the company are reviewed and reliable. Material developments in Human Resources/Industrial Relations front Sustained and meticulous efforts continue to be exercised by the Company at all its plants, towards greener production and environment conservation. The Company perseveres in its efforts to indoctrinate safe and environmentally accountable behavior in every employee, as well as vendors, by rigid compulsory annual training and refresher courses, as well as frequent awareness programs. Mock drills of emergency preparedness are regularly conducted at all the plants showing Company's commitment towards safety, not only of its own men and plants, but also of the society at large. The health of employees and the environment in and around the Plant area have been given due care and attention. The Company continued to comply with the prescribed industrial safety environment protection and pollution control regulation at its production plant, through periodic checks of the system involved and constant monitoring to meet the standards set by the pollution control authorities, etc. All the plants of the Company are eco-friendly and do not generate any harmful effluents. They have facilities for captive power generation as a stand-by arrangement, to meet any contingency. Safety devices have been installed wherever necessary, your companies all manufacturing locations are fully compliant to buyer norms & certified. These are inspected audited by independent third party as well buyer's auditors. Road Ahead The growth in the global textile industry is closely linked to the GDP growth of the US and the European nations. While these economies have been in turmoil in recent times, what is enthusing is the fact that with growing disposable incomes, the domestic market offers significant potential to the branded apparel players. While the shrinking capacities in the US are a positive for Indian companies, competition from low cost producers like China and India cannot be ignored. Even though experts claim that China is past its glorious days, still one needs to take China seriously because of the capability of Chinese exporters to supply quality products at cheap prices. Indian textile exporters cannot afford complacency and need to be on their toes for any changes within the international trade community. According to Ministry of Textiles, the current domestic market of textile in India is expected to increase up to US$ 60 billion by 2012 from the current US$ 34.6 billion. The share of exports is also expected to increase from 4% to 7% within 2012.' Textile Accessories are also an important part of this segment. Coming year shall see addition of Home fashion & Furnishing as another segment contributing min. 25% of revenues & margins. Your company's plans to diversify in non textile areas are on cards, sectors such as Food, Agri Commodities & Infrastructure. In these new areas while opportunities are large so are downsides, we are cautiously evaluating small proposals matching to our capabilities & risk return expectations of all stakeholders.