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Girnar Fibres Ltd.

BSE: 514252 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Girnar Fibres Ltd. (GIRNARFIBRES) - Director Report

Company director report

GIRNAR FIBRES LIMITED ANNUAL REPORT 2006-2007 DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the 17th Annual Report together with AuditedAccounts of the Company for the financial year ended 31st March, 2007. 1. FINANCIAL RESULT: The financial results of your Company for the year endel 31st March, 2007 is summarized below: (Rs. in Lacs) 2006-07 2005-2006 Profit before Financial Expenses And Depreciation 313.19 292.26 Less: Financial Expenses 298.64 299.24 Profit/Loss after Financial Expenses 14.55 6.98 Less: Depreciation 289.99 280.57 Profit/Loss after Depreciation (-) 275.44 (-) 287.55 Prior period adjustments 17.60 2.90 Provision of Fringe Benefit Tax 2.80 3.40 P/Loss after Tax (-)310.06 308.08 Provision 00 fy, 2. FINANCIAL REVIEW AND OPERATION: Production and Sales review. During the year Your Company has made production of 3809346 Kgs. Cotton hosiery, yarn of various counts and recorded a gross turnover of Rs.4119.81 lacs as compared to Rs. 4037.25 lacs in the previous year. Export: The Company has made export turnover of Rs 499.41 lacs during the current year as compared to Rs. 1137.36 lacs in the previous year. MANAGEMENT DISCUSSION AND ANALYSIS REPORT A. INDUSTRY STRUCTURE: The textile industry in India has an important place, account for 14% of total industrial production and contribute 30% of the total exports and is a largest employment generator. Providing one of the most basic needs of people and holds importance maintaining sustained growth for improving quality of life. It is a major contribution to the country's economy. Post lifting up of the import restriction of the multi-fiber arrangement,the market has become competitive and the data released by the OTEXA, USA shows that the first year of the non-quota regime for textiles has been Indian export to the US grow by 27 percent year on year to US$ 4.6 billion. Besides that the Govt. has also taken steps for the development of the textile Industry by framing textile policy for achieving target export. Inspite the performance of the Indian textile lndusty suffered from the second quarter onward of the current year because of strengthening of rupee as compared to dollars resulted in decline of export and increase in pressure on the domestic market and decline in nest sales realization, But, the global textile industry is growing faster due to ever increasing demand for cotton fibre consumption in worldwide and as a result, the Indian textile industry is also bound to grow in the international and domestic market. Secondly, the increase in per capital income is reason of increasing consumption of cotton fibres in India. Your Company is striving and making all its efforts for its revival and the CDR cell a voluntary organization under the aegis of the RBI has taken some effective steps and ordered for the re-working of its debts restructuring as per present'cash flow, so that the Company may able to derive the maximum benefit of the present scenario of open economy. Your Company has also to cope with the problem of shortage of working capital limits and increasing price of cotton the major raw material has converted the unit no.2 into Polyester/Cotton Yarn (PC). B. FINANCIAL PERFORMANCE: The turnover of the Company for the current year is Rs. 4119.81 Lacs as compared to Rs.4037.25 Lacs in the previous year and ended the year with cash profit of Rs. 14.55 Lacs as compared to cash loss of Rs. 6.98 Lacs in the previous year. C. FUTURE PROSPECTS: Your Company during the current year has taken effective steps in revival of its financial and operational strength and as above said, the CDR cell has allowed and ordered for the re-working of the debts restructuring as per the present cash flow. Although, the modernization of plant was envisaged in the earlier approved CDR package and that could not be implemented due non-availability of financial support from the Institutions. Now, therefore, the Company is stressing more on the maintenance of its old plant and machinery to achieve optimum level of production, maintaining high quality standard and working on to reduce power and other, costs. As already said the demand for the cotton fibres is growing faster in international and domestic market and your Company is manufacturer of cotton yam and with the re-working of the debt restructuring as per present cash flow the Company will start delivering improved and better results in the year to come. D. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: Commensurate with the size and operations, your Company has adequate internal control systems, which are in place. The Company regularly gets its internal control report and its suggestions are implemented as and when required. E. HUMAN RESOURCES/INDUSTRIAL RELATIONS: The Company has good industrial relations with its employees. The company has taken adequate steps to harmonize the relations with its employees and workers and also taken steps for the welfare of employees. DISCLOSURE: The disclosures are as mentioned in Clause 8 under Section of Corporate Governance. 3. DIVIDEND; The Company ended the year with a net Loss and have no surplus funds available from the earlier years and therefore, the Directors do no, recommend payment of dividend for the year under review. 4. DECLARATION BY BIFRAS SICK UNIT: The Company has been declared a Sick Unit in terms of Section 3(1)(O) of Sick Industrial Companies (Special Provision)Act, 1985 (SICA) by BIFR vide its order dated 25.04.2006 and the State Bank of India has been appointed as operating agency under Section 17(3) of the Act to examine the viability of the Company and formulate a rehabilitation Scheme. 5. REWORKING OF FINANCIAL RESTRUCTURING: The Corporate Debt restructuring cell (CDR) has earlier sanctioned a package of restructuring the debts of the Company under the CDR mechanism and according to the approved package, the Company could not able to meet targets, due to reasons beyond its control. The modernization of the plant as well as need based working capital facilities were envisaged in the approved package, but actually, in sufficient working capital facilities as well as non-sanction of funds for modernization of the plant were the major reasons for the non-achievements of specked targets. Accordingly, the Monitoring Committee constituted by the CDR cell has again allowed the revival/reworking of the package as per present cash flows. 6. DIRECTORS In accordance with the provisions of the Companies Act, 1956 and Articles of association of the Company Sh. Praful Kumar Jain, Director retire and being eligible and offer himself for reappointment. 7. DIRECTORS RESPONSIBILITY STATEMENT: Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors state: i. That in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures. ii. That your 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 that period. iii. That your Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv. That your Directors had prepared the: Annual Accounts on a going concern basis. 8. CORPORATE GOVERNANCE: The Company is following the prescribed guidelines of the Corporate Governance and a separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from theAuditors of the Company regarding compliance of they guidelines of Corporate Governance as stipulated under Corporate Governance clause of the Listing Agreement is annexed to the report on Corporate Governance. 9. AUDITORS: M/s Gupta Sanjiv & Company, Chartered Accountants, Ludhiana, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. 10. AUDITORS' REPORT: The Auditors' Report on the Accounts of the Company for the year under review is self-explanatory and need no further comments. 11. COST AUDITORS: In accordance with the provisions of Section 2938 of the Companies Act, 1956 the Board of Directors of the Company have re-appointed M/s Pawan Verma & Associates, Cost Accountants, Jalandharas Cost Auditors of the Company for the Cost Audit and the approval of the Central Government has also been received for the year 2007-2008. 12. PUBLIC DEPOSITS: During the year under review, the company has not accepted any Fixed Deposits from the public within the meaning of Section 58A of the Companies Act, 1956 ,end the rules made thereunder. 13. DEMATERIALISATION OF THE COMPANY'S SCRIPS: The Company has completed formalities relating to dematerialization of share, but the shares could not be converted in Demate form because of negative net worth of the Company. 14. CONSERVATION OF ENERGY, TECHNOLOGY,ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTDO: The Company is mainly concentrating on the conservation of Energy and striving for the minimization of the energy cost while carrying out manufacturing operations. A statement giving details of conservation of energy, technology absorption, Foreign Exchange Earning and Outgo, in accordance with Section 217(1)(e) of the Companies,1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure (11) hereto and forms part of this Report. 15. PARTICULARS OF EMPLOYEES: The statement showing the particulars of the employees as required by the provisions of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars. of Employees) Rules, 1975 as amended is not given as no employee was in receipt c f remuneration equal to or exceeding Rs 24.00 lacs per annum, if employed for the full year or Rs 2.00 lacs per month, if employed for the part of the year. 16. LISTING OF SECURITIES: The Securities of the Company are listed at the following Stock Exchange: 1. Ludhiana Stock Exchange Association Ltd. 2. Delhi Stock Exchange Association Ltd. 3. The Bombay Stock Exchange Ltd. 4. The Madhya Pradesh Stock Exchange Ltd. 5. Madras Stock Exchange Ltd. 6. The Calcutta Stock Exchange Association Ltd. The Company has paid all the pending listing fees to the above Stock Exchanges upto the year 2005-2006. ACKNOWLEDGEMENTS: Your Directors are pleased to place on record their sincere gratitude to the Financial Institution(s), Banker(s),Central/State Govt. Authority (ies), and Business Constituents and to the Shareholders of the Company for their continued and valuable cooperation and support extended to the Company during the year. Your Directors also wish to place on record and express their deep appreciation for the devoted and sincere services rendered by Workers, Staff & Executives at all levels of the operations of the Company during the year. FOR AND ON BEHALF OF THE BOARD PLACE: LUDHIANA (GULSHAN JAIN) (JATINDERJAIN) DATED: 03.09.2007. EXECUTIVE DIRECTOR MANAGING DIRECTOR