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Pacific Cotspin Ltd.

BSE: 531118 Sector: Industrials
NSE: N.A. ISIN Code: INE034C01017
BSE LIVE 16:00 | 06 Jun Stock Is Not Traded.
NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 0.54
PREVIOUS CLOSE 0.56
VOLUME 10701
52-Week high 0.58
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 2
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 0.54
CLOSE 0.56
VOLUME 10701
52-Week high 0.58
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 2
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Pacific Cotspin Ltd. (PACIFICCOTSPIN) - Director Report

Company director report

PACIFIC COTSPIN LIMITED ANNUAL REPORT 2006-2007 DIRECTORS' REPORT DEAR MEMBERS Your Directors have pleasure in presenting the 12th Annual Report together with the Audited Statement of Accounts for the year ended, 31st March, 2007. FINANCIAL RESULTS Your Company's performance during the year is summarized below: (Rs.in lacs) For the period ended 31st March,2007 March,2006 (for 12 months) (for 9 months) Gross income 14265.14 11654.41 Gross Piofit/(Loss) 719.91 897.54 Less: Depreciation 614.20 455.15 Profit/(Loss)before Tax 105.71 442.59 Add/(Less) Deferred Tax Assets (0.57) 8.32 105.14 450.71 Less: Prior Period Adj.(Net) - 31.34 Fringe Benefit Tax 4.12 7.00 Net Profii/(Loss)AfterTax 101.02 412.37 Add:Profit/(Loss/brought forward from previous year 445.20 32.83 balance Profit, (Loss) Carried Forward 546.22 445.20 DIVIDEMD Your board of Directors docs not recommend any Dividend on equity shares and preference shares in order to conserve the resources. PERFORMANCE AND OUTLOOK The performance of the company has been in line with the industry trend. To encash the growing opportunities arising out of resuttanTopeiT free Trade due to dismantling of Quotas for Indian Textile exports to U.S.A and EU. in the post W.T.O. Global Scenario and to avail of 5% interest Subsidy benefits under the Govt, sponsored Textile Up gradation Fund Scheme (TUFS), the Company has under taken phase II Expansion plan with a capacity of 25200 spindles on adjacent land ol tin- existing plant at a cost of lis. 7250.00 lacs. Total Term loan requirement ol 50 crores for the said project has been fully tied up with Allahabad bank. United bank of India. Vijaya bank and Lord Krishna bank. According to reports, cotton yarn demand is expected to grow at a Compounded Annual Growth Kate of about 7% mainh on account of India being the lowest cotton cost producing country in the world and thai Garment exports froth India arc pro jec.ted to grow at She Compounded Annual Growth rate of 15%. further the Company plans to enter into the non - cotton sector with strategic buy bach arrangement with major players in polyester industry. The Company also plans to enter with the retailing sector in suitable location in up coming cities and steps are likely to be taken in this regard after weighing all available options and opportunities. DIRECTORS Shri Mukesh C. Gandhi Director of the company retire by rotation and being eligible offer them selves for reappointment. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 2I7(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, it is herein confirmed: i) That in the preparation of the accounts not the year ended 31st March,2007 The applicable accounting standards have been followed along with proper explanation relating to material departures. ii) That the Directors have selected such accounting policies and applied them consist entry and made judgments and estimates that are reasonable and prudent so as to give a true and fair vie of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review. iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1950 for sale-guarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv) That the Directors have prepared the accounts for the financial year ended 31st 2007 on a going concern basis. CORPORATE GOVERNANCE Your Directors affirm their commitments to the corporate governance standards prescribed by the securities and Exchange Board of India (SEBO). A Report on corporate Governance alongwith certificate from Company Secretaries for its compliance and management discussion and analysis as required under clause 49 of the listing agreement is attached. VOLUNTARY DELISTING OF THE COMPANY'S EQUITY SHARES At Present, the Equity shares of the compary are listed on the Stock Exchanges at Kolkata and Mumbai. As per decision of the members the last Annual General Meeting to delist the Equity Shares from Culcata Stock Exchange, the Company has made application or delisting of Shares from that Exchange, The Equity Shares ol the Company will continue to remain listed on Bombay Stock Exchange and no investors Share holders including the Investors Share-holders of the regions where the said Exchange is situated will be adversely affected. COST AUDITORS: The Board of Dircetors has approved Mr Napendra Nath Das Cost Accountant, as cost Auditors of the company for the years in 2002-2004 and 2004-2005 under section 233B of the companies Act,1956 which has been approved by the Central Goverment. ISSUE OF SHARES: 15,00,000 Equity Shares of Rs 10/- each have been aJlotted to promoters of the Company at par on Preferential Basis on 18.04.2007. The sum so collected shall be used for working Capital of the Company. DEMATERIALISATION Your Company's Shares arc being traded in the dematerialized form and over 91.63% of the Shares of the Company have been dematerialized. AUDITORS: The Auditors of the Company, M/s. Agarwal Modi, Chartered Accountants, retire at the conclusion of the ensuing Annual General Meeting. They have signified their willingness to accept reappointment and have confirmed their eligibility under section 224(1B) of the Companies Act, I956. Your Directors recommend their reappointment. The Notes on Accounts referred to in the Auditors' Report are self explanatory and therefore do not call for any further comments. STATUTORY REQUIREMENTS: The information under Section 217(2A) of the Companies Act, 1956 has been given in Annexure A forming part of this Report. The Company has not accepted and/or renewed any deposits from the public and/or shareholders during the period under review. information regarding conservation of energy, etc. as required u/s 217(1)(e) of the Companies Act, 1956 read with companies (Disclosures of Particulars in the Reports of Directors) Rules 1988, is given below: CONSERVATION OF ENERGY: There is a conscious and concentrated drive to wards conservation of energy in all its forms, strict vigilance is maintained over usage of energy by constant monitoring and educating the need to conserve energy. Replacement of worn out wires, control of idle running machines, plugging of leakage and putting off power to all major equipment at non- working time are some of the measures taken to conserve energy during the year. Total energy consumption and energy consumption per unit. Electricity For the year For the Period ended 31,03.2007 ended 31.03.2006 (For 12 months) (For 9 months) Purchased Units 1,83,27,350 1,33,47,473 Total amount (Rs. in lacs) 564.74 338.78 Rate/Unit (Rs.) 3.08* 2.538* * Power cost after concession allowed as per provisions of West Bengal incentive to Power intensive Industries Scheme, 2005. TECHNOLOGY ABSORPTION, ADAPTION AND INNOVATION: Research and Development (R&D) The Company has not obtained any technology from outside parties either from India or abroad nor entered into any technical collaboration agreement with any party from abroad. Experienced and qualified staff are engaged to look into Research and Development. The Company keeps abreast with the technology development and introduces, adopts and absorbs those sophisticated technologies, wherever suitable. Technology Absorption, Adoption and Innovation: To improve the quality of the product, the Company is keeping a regular track on latest advancement on the spinning technology. Company's senior and experienced textile technologists are keeping continuous watch on the quality of the product at various stages. In house training is being imparted to the employees to improve the working on the plant. FOREIQN EXCHANQE EARNINQS AND OUT GO: For the year ended For the period ended 31st March, 2007 31st March,2006 (For 12 months) (For 9 months) a) Earnings (Rs. in lacs) 4046.78 3525.56 b) Expenditure (Rs. in lacs) 445.26 355.10 ACKNOWLEDGEMENT: Your Directors sincerely acknowledge the co-operation and assistance received from the Financial Institutions, Bankers, WBIDC, WBSEB, all State Government Departments/agencies and thanks them for their continued support and valuable assistance. Your Directors would also like to acknowledge the continued support of the Company's Shareholders. In conclusion, your Directors would like to record their deep appreciation of the dedicated support, hard work and services rendered throughout the year by Company's personnel at all levels. ON BEHALF OF THE BOARD Place: Calcutta C.F. MEMRA Date : 1st September, 2007 MANAGING DIRECTOR MANAGEMENT DISCUSSION AND ANALYSIS A. INDUSTRY STRUCTURE & DEVELOPMENT The Textile Industry plays an important role in the Indian Economy, it Contributes around 14% of the total Industrial of the Country. It is the second largest after agriculture and provides employment to around 20% of the total work force. Its contribution to Foreign Exchange earnings is around 17%. As of end December 2005, the world's total installed spindle age was around 100 million. With 37 million spindles, India accounted for 20% of the world's spindle age. As of February 2007 , India's installed spindle age expanded to 39.3 million. In fact, after the expiry of Agreement on Textiles and clothing, a number of existing units have undertaken significant expansion of their spinning capacity. This apart, hew spinning units have come into existence. The Indian Textiles industry is now in a much stronger position than what it was in the past. This could happen due to buoyant domestic and international demand, conducive Government policies, rationlization of fiscal duties, subsidised interest on loans granted under Technology Upgradation fund Scheme etc. In Textile industry, India and China may compete with each other, but ultimately they would drive global economy In future. The production for the year 2006-07 has been projected at around 3730 million kgs i.e., a growth of over 0% as compared to last year. The share of cotton yarn accounts for 72% of total spun yarn. It is expected that growth of the total market for textile and garments will increase from 53 billion USD in 2006 to 110 billion USD by March,2012. To achieve this, it is estimated that 29 million additional spindles would by required. Therefore, the future scope for capacity expansion and modernization is promising in the long run. COTTON SCENARIO As per Cotton Advisory Board the yield of Indian Cotton crop would be at 270 lakh, bales in the year 2006 - 07 against 240 lakh, bales In year 2005- 06. The yield per hectare is also estimated to Increase from 478 Kgs in the year 2005 - 06 to 503 kgs. in the year 2006 - 07. The Cotton prices have also shown the firm trend in line with Inter National Cotton Price. According to International Cotton Advisory Committee (ICAC), the global cotton production is estimated at 25.31 million tons for the year 2006-07 and 25.22 million tons for the year 2007-00. The world cottton consumption is estimated at 26.19 million tons in 2006-07 and 26.70 million tons in 2007-08. Since the consumption is expected to be more than the supply, it is likely that cotton price for the year 2007-08 will be marginally higher. However, the recent strengthening of rupee against USD will also make imported cotton cheaper in Indian scenario. MARKETING India continues to be a dominant supplier of cotton yarn in the world. During the year 2004-05, the cotton yarn exports from the country was around 440 Million Kg. which increased to 552 Million kgs. In 2005-06. Exports of cotton yarn is projected at 600 Million kgs. during the year 2006 - 07. Indian exports may face tough competition in international market due to unprecedented strengthening of rupee against USD. It is expected that rupee will further strengthen in which may place the Indian exporter to look at the reduction of overall cost of production to remain competitive in the international market. Pacific Cotspin Ltd , continues to maintain its leadership in exports of coarse and medium counts of combed cotton yarn. Apart from predominant exports of cotton yarn to South Korea and Bangladesh, Company's yarn has also been well accepted in other countries viz. Srilanka, Egypt and Mauritius. The Company enjoys excellent relations with all of its customers, which have been painstakingly built over the years by strictly adhering to delivery schedules and maintaining consistent quality. B. OPPORTUNITIES AND THREATS The future of Indian Textile Industry is highly depending on availability of raw material at a competitive price. With the introduction of Hybrids and I3T Cotton, the cotton production in India is increasing every year. The government is making efforts to supply proper quality seeds at a reasonable price to the Growers and it is expected that the supply of quality cotton will be comfortable. In the past, the textile industry did not develop in an organised manner and the policy favoured fragmentation resulting in organized players suffered heavily because of the distorted fiscal structure, fortunately, in the last few years, the Government has now provided level playing field to all the sectors of textiles industry and therefore, large investments are coming in the textile industry. Government has also given very good incentive under Technology Up gradation Fund and also benefits to the processing sector which will give boost to (he Industry. C. RISKS ADD CONCERNS The dismantling of quota regime from 1st January,2006, has resulted in open global competition and every country has to become cost competitive and efficient. India suffers on account of high transaction cost, poor infrastructure, uncertainly about continuation of export incentives, high cost of labour and power. However, the government is aware of all these issues and the same are being addressed. It is hoped that government will make its best efforts to provide competitive environment to the textile industry. Raw cotton, used for the manufacture of cotton yarn, being an agricultural product is the key Raw material and is dependent on monsoon. Availability of adequate Raw Cotton at the right prices is crucial for the company. Any disruption in the supply and / or Volatile changes in the cost structure could affect the profitability of the Company. The Present inflationary conditions in the county has resulted in unprecedented increase in the rate of interest on borrowings from the Banks and financial Institutions. Continuing such increase in the interest rate has created an element of uncertainty in the interest cost. Volatility in foreign currency exchange rates vis-a-vis Indian rupee is another area of concern. The Company's production is predominantly exported and as such its profitability, to some extent depends on movement in exchange rates 57 various currency. D. SEGMENT - WISE OR PRODUCT - WISE PERFORMANCE The Company is mainly engaged in the business of manufacture and export of cotton yarn and accordingly this is the only Single Reportable Segment. E. OUTLOOK The Company continues to be a significant player in the coarser and medium segment of the world cotton yarn market with strong emphasis on product and market development,Customer services and technology up-gradation. Your Company is also continuously improving its operation efficiency, productivity and cost control which alone can Improve the bottom line in future in a highly competitive environment. The demand for good quality yarn is going up in the domestic market and there is a huge investments in the downstream products like weaving, knitting, garmenting etc. in the Industry. There are good prospects for increasing exports of cotton yarn to Asian countries including China. The company is also making efforts to explore many new markets apart from current markets. F. INTERNAL CONTROL SYSTEMS ADD THEIR ADEQUACY The Company has a proper and adequate internal control system to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that transactions arc authorized, recorded and reported correctly. The internal control is supplemented by an extensive programme of internal audits, review by management and documented policies, guidelines and procedures. The internal control is designed to ensure that the financial and at thier records are reliable for preparing financial statements and other data, and for maintaing accountability of assets. Q. FINANCIAL AND OPERATIONAL PERFORMANCE Please refer Board's Report on performance review. H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING! NUMBER OF PEOPLE EMPLOYED The company recognizes the importance and contribution of its human resources for its growth and development and is committed to the development of its people. The company has been adopting methods and practices for Human Resources Development. With utmost respect to human values, company served its human resources with integrity, through a variety of services by using appropriate training, motivation techniques and employee welfare activities. Industrial relations were cordial and satisfactory. As on 31st March, 2007 the company has about 454 employees in Its various Offices and Plants. I. CAUTIONARY STATEMENT Statements made in this report describing the Company's projections, estimates, expectations or predictions may be forward looking predictions' within the meaning of applicable securities laws and regulations. Actual results may differ from such estimates, projections etc. whether expressed or implied, Factors which would make significant difference to the Company's operations include availability of quality raw cotton, market prices in the domestic and overseas market, changes in Govt, regulations and tax laws, economic conditions affecting demand/supplies and other environmental factors over which the company does not have any control.