Your Directors have pleasure in presenting their 28" Annual Report togetherwith the Audited Accounts for the year ended 31st December 2012.
The Company's financial performance during the year is summarized below:
| || ||(Rs. In Cr) |
|Year Ended 31st December 2012 ||2012 ||2011 |
|Turnover & Other Income ||2586.68 ||2145.70 |
|GrOSS Profit (before Financial Charges & Depreciation) ||133.73 ||110.13 |
|Interest & Financial Charges ||46.60 ||35.65 |
|Profit before Depreciation (Cash Profit) ||87.13 ||74.48 |
|Depreciation ||27.54 ||25.84 |
|Profit for the year ||59.59 ||48.64 |
The Gross Income of the Company for the year rose to Rs. 2586.68 Crfrom Rs. 2145.70Crduring the previous yearshowing a growth of 20.55%. Gross Profit (before FinancialCharges and Depreciation) grew by 21.43% and stood at Rs. 133.73 Crfor the year comparedto Rs. 110.13 Crduring the previous year; Profit for the year grew at an impressive rateof 22.51% and was registered at Rs. 59.59 Cr against Rs. 48.64 Cr during the previousyear. The Company accordingly, exhibited an all round improved performance with handsomegrowth.
Your Directors are pleased to recommend a dividend of Rs. 0.25 per equity share of Rs.5each for the year ended 31st December, 2012 for yourconsideration.
The Dividend, if approved at the ensuing Annual General Meeting, will be paid to thoseshareholders whose names appear on the register of members of the Company as on the Bookclosure date.
The year 2012 was another year of growth for the Company. Your Company showed animprovement in business as compared to the previous year despite high raw material andfuel prices. Your Company recorded 20.55% growth in net revenue at Rs. 2586.68 Cr from Rs.2145.70 Cr last year, which enabled the Company to maintain its track record of sustainedyear-on-year growth. The growth in revenue was largely driven by higher sales volumes,aided by new capacities of POY, FDY & DTY of about 60000 MTPA which commencedcommercial production during the year.
Your Company is setting up a 2,80,000 MTPA plant comprising of ContinuousPolymerisation, Direct Melt Spinning for the manufacture of POYand FDY in the denier rangeof 30 to 500 having 12 to 578filaments in Bright, Semi-dull, Full-dull, CationicandDope-dyed yarns at new location. After the completion of the Expansion Project, Nakodawill be in a position to cater to the entire range of Polyester yarns in the domestic aswell as international market. The project is estimated to cost Rs. 1746 Cr. and isproposed to be financed by a mix of equity, internal resources and also long terms debts.The required equity for the same is already raised through GDRs and fully committedthrough preferential allotments to the promoters and strategic investors.
During the year under review, the share capital of your Company was changed/altered byfurther allotments as under:
Company has issued and allotted 4,86,00,000 equity shares of Rs. 51- each at apremium of Rs. 5/- per equity share on conversion of 97,20,000 Warrants of Rs. 50/- eachon 30.03.2013 to the Promoters' Group of the Company and Non- promoter investors.
It has also issued and allotted 2,92,00,000 Warrants of Rs. 1007-each convertible into29,20,00,000 equity shares of Rs. 5/- each at a premium of Rs. 5/- per equity share (i.e.10 Equity Shares for each Warrant allotted) within 18 months from the date of allotmenti.e. 18.01.2013 to the Promoters' Group of the Company and Non-promoterinvestors.
A statement in respect of each of the subsidiaries, giving the details of capital,reserves, total assets and liabilities, details of investment, turnover, profit beforetaxation, provision for taxation, profit after taxation and proposed dividend is attachedto this report.
Annual accounts of subsidiary companies and the related detailed information will bemade available to the holding and subsidiary company investors, seeking such information.Copies of the annual accounts of the subsidiary companies are available for inspection byany investor at the registered Office as well as the Administrative office of the companybetween 11.00 a.m. to 1.00 p.m. on all working days.
Sh. D. B. Jain is retiring by rotation at the forthcoming Annual General Meeting andbeing eligible offers himself for reappointment.
Sh. B. L. Maheshwari is retiring by rotation attheforthcomingAnnual General Meeting andbeing eligible offers himself for reappointment.
Sh. S. K. Bhoan is retiring by rotation at the forthcoming Annual General Meeting andbeing eligible offers himself for reappointment.
The Board has proposed reappointment of Sh. D. B. Jain as Joint Managing Director ofthe company for a period of five years w.e.f. 1sl July 2013.
INTERNAL CONTROL SYSTEMS
The Company has put in place adequate and effective system solutions to manage internalcontrols to ensure that all company assets and interests are safeguarded properly. Alltransactions are recorded, authorized and approved properly. Reliability and accuracy ofaccounting data are ensured with proper checks and balances for complying with variousstatutory requirements. The company has implemented SAP, a world class process tostrengthen our Information Technology system and business processes and gone live on03.01.2012. SAP is a comprehensive tool which enables the company to do the business in amore efficient and systematic manner.
In line with guidelines recommended by Securities & Exchange Board of India (SEBI),adequate steps have been taken to ensure that all the mandatory provisions of Clause 49 ofthe Listing Agreement are complied with. A separate report on Corporate Governance isincluded as part of the Annual Report. The Auditors' certificate confirming compliance ofCorporate Governance is included in the said Corporate Governance report.
SAFETY, ENVIRONMENT & POLLUTION CONTROL MEASURES
During the year, no major accident took place in plant operations at Karanj. A safetycommittee has been formed consisting of group of persons from different departments whichoverlooks safe working conditions.
The company has provided Safety Helmets, Safety belts with full attachments, Gloves,Aprons, Shoes etc as personal protective equipments, Fire alarm system is attached tosecurity office and various other measures are taken for the safety of employees. Safetytraining and awareness programes are being conducted throughouttheyear.
Your Company has complied with various emission standards and other environmentalrequirements as perpollution control norms.
Equity Shares of your Company are listed on the Mumbai Stock Exchange and NationalStock Exchange of India Ltd. Annual listing fees have been paid to the Stock Exchanges.GDRs are listed on Luxembourg Stock Exchange.
The relations with the employees have been cordial throughout the year under review.Your Directors place on record their sincere appreciation in respect of the servicesrendered by the employees of the Company at all levels.
There is no employee getting remuneration as prescribed under section 217(2A) of theCompanies (Particulars of Employees) rules, 1975 as amended.
Statutory information required under the Companies (Disclosure of Particulars in theReport of Board of Directors) Rules, 1988 applicable to the Company and forming part ofthis report are set out in Annexure to this report.
M/s. N. M. Singapuri & Co. Chartered Accountants, Surat retire at the forthcomingAnnual General Meeting, and being eligible, offer themselves for re-appointment. YourDirectors recommend their reappointment.
HUMAN RESOURCE DEVELOPMENT (HRD)
The company has a strength of 825 permanent employees. Human Resource Developmentcontinued to receive focused attention. Industrial relations continued to be cordialthroughout the year.
The Company has drawn up plans to attract and retain talent at all levels. The Companyalso keeps an eye on the attrition levels and draws up appropriate plans to ensure thatthe employees at all levels find an environment that encourages performance, andtransparency in performance appraisal.
This report contains forward looking statements. All statements that addressexpectations or projections about the future are forward-looking statements.Forward-looking statements are based on certain assumptions and expectations of futureevents. The Company cannot guarantee that these assumptions and expectations are accurateor will be realized. The Company's actual results, performances or achievements could thusdiffer materially from those projected in any such forward-looking statements.
DIRECTORS RESPONSIBILITY STATEMENT
(i) that in the preparation of the annual accounts, the applicable accounting standardshad been followed along with proper explanation relating to material departures;
(ii) that the directors had selected such accounting policies and applied themconsistently and made judgments 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 profit and loss of the Company for that period;
(iii) that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provision of the Companies Act forsafeguarding the assets of the Company and for preventing and detecting fraud andotherirregularities;
(iv) that the directors had prepared the annual accounts on a going concern basis.
We wish to express our gratitude and appreciation for the valuable support andcooperation received from our customers, business associates, banks, financialinstitutions, shareholders, various statutory authorities and agencies of Central andState Governments. We place on record our appreciation of the contribution made byemployees at all levels.
| ||For and on behalf of the Board of Directors |
|Place: Mumbai ||B. G. Jain |
|Date : 11.05.2013 ||Chairman & Managing Director |