The Directors of your Company have pleasure in presenting the 58th Annual Report of theCompany together with the Audited Accounts for the year ended 31st March 2014.
| || ||(Rs. in lacs) |
|PARTICULARS ||YEAR ENDED ||YEAR ENDED |
| ||31.03.2014 ||31.03.2013 |
| ||(12 Months) ||(15 Months) |
|Net Sales and Income ||14593.77 ||15544.43 |
|Gross Profit ||963.54 ||1948.45 |
|Less: || || |
|i) Financial Expenses ||512.31 ||744.37 |
|ii) Depreciation ||98.20 ||504.36 |
|Profit before exceptional items ||353.03 ||699.72 |
|Exceptional items ||315.81 ||0.00 |
|Profit before tax ||37.22 ||699.72 |
|Provision for tax ||0.00 ||0.00 |
|Net Profit ||37.22 ||699.72 |
During the year under report Cotton Spinning Unit of the Company produced 54.58 lacskgs of Cotton Yarn at an Avg. count of Ne 22.32 as compared to previous year production of66.59 lacs kgs. at an Avg. count of Ne 23.44. The previous year was of 15 months and yearunder report is of 12 months. So the production level has slightly improved as compared toprevious year. The Company achieved total income of Rs. 14593.77 lacs as compared to15544.43 lacs during the previous year. Gross profit was Rs. 963.54 lacs against grossprofit of Rs. 1948.45 lacs during the previous year. Company's profit before exceptionalitems is Rs. 353.03 lacs and net profit after exceptional item is Rs. 37.22 lacs againstnet profit of Rs. 699.72 lacs during the previous year. The year under report was anadverse year for Cotton Spinning Industry. The main reason was the steep hike in cottonprices during the year under report as compared to previous year. The main cause of highprices of raw cotton was the export of substantial quantities of cotton under OGL.Speculators also played their part in keeping the cotton prices high. There was muchvolatility in cotton prices. This had serious adverse effect on Cotton Spinning Industry.
On the other hand yarn prices remained subdued due to sluggish demand in theInternational market. During the year when China who is a major yarn importer stoppedimport of Cotton Yarn the yarn prices further fell. So there was quite mis-match betweenraw material cost and price realisation of finished goods. All this resulted in adversefinancial performance by the company. During the year under report prices of power andfuel and personnel expenses also increased. All these factors resulted in higher cost ofproduction and these led to adverse financial performance by the Company.
Your Company is producing high quality products conforming to international standardsand the Cotton Spinning Unit has been awarded ISO 9001-2008 certification. The Company issupplying yarns in various countries and to some of the most reputed global yarnimporters. Because of its exports performance your Company has been awarded the status ofa Star Export House by Government of India.
During the year under report the Company made an export turnover of Rs.7672.86 lacs ascompared to previous year's export turnover of Rs. 9499.61 lacs. Export Turnover wasslightly better as compared to previous year of 15 months.
CURRENT YEAR'S OUTLOOK
Your Company is manufacturing 100% grey cotton yarns for which the raw material isCotton. Due to introduction of high yielding BT Cotton raw cotton of different varietiesis abundantly available in the country.
Though there was delay in onset of monsoon in the country but subsequently monsoon hasbeen quite active in the cotton crop growing regions in the country. Areas under cropcultivation have increased as compared to previous season. The country is expecting bumpercotton crop during the ensuing season starting from September 2014.
Due to expectation of bumper cotton crop not only in India but also major cottongrowing countries like USA Pakistan China etc. the cotton prices have started declining.The Company expects to buy cotton at reasonable cost during the coming season. Demand ofcotton yarn is also picking up in the International market. Demand for cotton yarn is alsopicking up in the the International market. China is also expected to restart import ofcotton yarn. All these factors will help in increase in the price of yarn in theInternational market. Rupee-Dollar exchange rate is stable which is to the advantage ofthe Company.
Due to these factors the Company expects to show better financial performance duringthe current year as compared to that of the year under report.
Your Directors regret their inability to recommend any dividend for the year underreport with a view to conserve its resources.
Sh. Raj Paul Oswal is retiring by rotation at the ensuing Annual General Meeting and iseligible for reappointment.
Sh. Pawan Kumar Bahl Sh. Raghubir Chand Singal and Dr. Yash Paul Sachdeva are theindependent Directors of the Company. It is proposed to appoint them as independentDirectors of the Company for a term of 5 years. They will not retire by rotation.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of the Companies Act your directors confirm that:-
i) in the preparation of the accounts the applicable accounting standards have beenfollowed along with proper explanation relating to material departures if any;
ii) the Directors have selected such accounting policies and applied them consistentlyand made.
judgments and estimates that were reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2014 and of theprofit of the Company for the year ended on that date;
iii) 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) the Directors have prepared the Annual Accounts on a going concern basis.
Your Company is committed to adopt good Corporate practices that will enable it toachieve its goal of creating an organization with increasing employee and customersatisfaction and shareholders value. A separate Report on Corporate Governance is attachedas part of the Annual Report pursuant to Clause 49 of the Listing Agreement. The AuditorsCertificate is included in the said Corporate Governance Report.
AUDITORS AND THEIR OBSERVATIONS
M/s Dass Khanna & Co. Chartered Accountants Ludhiana Auditors of the Companyretire at the conclusion of the ensuing Annual General Meeting and are eligible forreappointment.
The Report of the Auditors is self explanatory and also explained in the respectiveNotes on Accounts and hence does not call for any explanation or clarification by theBoard.
The Company has appointed Sh. Rishi Mohan Bansal as Cost Auditor for the CottonSpinning Unit of the Company for the year 2014-15 and Central Government has alsoapproved his appointment.
During the year under report the Company did not invite or accept any Public Depositswithin the meaning of Section 58-A of the Companies Act 1956 and rules made there under.
As on 31st March 2014 the outstanding deposits amounted to Nil and the overdueunclaimed deposits amounted to Nil.
The securities of the Company are listed at Ludhiana Delhi Ahmadabad Mumbai andCalcutta Stock Exchanges. The Company has also applied for delisting of its shares fromthe stock exchanges at Ludhiana Delhi Calcutta and Ahmadabad and our applications arepending.
PARTICULARS OF EMPLOYEES
The information as required under the Companies Act read with the Companies(Particulars of Employees) Rules 1975 as amended is Nil.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS &OUTGO
The information pursuant to the Companies Act read with Rules made thereunder is givenin the Annexure I to this Report.
The industrial relations remained peaceful and cordial throughout the year in theCompany.
Your Directors take this opportunity to offer their sincere thanks to variousdepartments of the Central and State Governments Banks Financial Institutions MutualFunds and Investors for their unstinted support and assistance. Your Directors alsoexpress their deep appreciation for the devoted and sincere services rendered by workersstaff and executives at all levels during the year and we are confident that your Companywill continue to receive such co-operation from them in future also
| ||FOR AND ON BEHALF OF THE BOARD |
|PLACE : LUDHIANA ||RAJ PAUL OSWAL |
|DATED : 28.08.2014 ||CHAIRMAN |
INFORMATION AS PER RULES MADE THEREUNDER AND FORMING PART OF THE DIRECTORS' REPORT FORTHE YEAR ENDED 31st MARCH 2014
A. CONSERVATION OF ENERGY
Your Company has been making all out efforts to reduce energy consumption. For thispurpose it has taken the following measures:-
a) The Company is maintaining ideal power factor more than 0.99.
b) Relocation of power capacitors at load centers.
c) Conversion of metallic fans to FRP fans in Humidification plant.
d) Installation of Inverters in Autoconers for suction fan motors.
e) Application of value engineering to optimize yield of end product.
f) Optimizing use of air compressors by arresting air leakage and controlling pressureetc. Particulars with respect to consumption of energy are given in Form A attached.
B. TECHNOLOGY ABSORPTION
As per Form B attached.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
|i) Activities relating to Exports Initiative taken to increase exports Development of New Export Markets for products and export plans ||The Company has made serious and concerted efforts to export its products during the year under report. It has created new overseas markets for its product in addition to consolidating its position in the existing overseas markets. |
|ii) Total Foreign Exchange used and earned ||Current Year ||Previous Year |
| ||(Rs. In lacs) ||(Rs. In lacs) |
|(a) Foreign Exchange Earned ||7515.95 ||8665.47 |
|(b) Foreign Exchange Outgo ||51.54 ||145.86 |
DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSUMPTION OF ENERGY
|Particular ||2013-14 ||2012-13 |
| || |
|(A) POWER & FUEL CONSUMPTION || || |
|1. ELECTRICITY || || |
|a) Purchased Units (000 KWH) ||15624.61 ||20158.81 |
|Total Amount (Rs. In lacs) ||1176.62 ||1297.88 |
|Rate/Unit (Rs.) ||7.53 ||6.44 |
|2. OWN GENERATION || || |
|a) Through diesel generation || || |
|KWH (000 KWH) ||487.96 ||526.76 |
|Total Amount (Rs. In lacs) ||67.78 ||61.04 |
|Unit/Ltr. KWH ||3.56 ||3.55 |
|Cost/Unit (Rs.) ||13.89 ||11.59 |
|(B) CONSUMPTION PER UNIT OF PRODUCTION (000 KWH/MT) ||2951.83 ||3106.36 |
DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION
A. RESEARCH AND DEVELOPMENT
i) The Company has carried out Research and Development in the area of Cotton Yarn forimprovement in productivity better efficiency and quality.
ii) It has set up research and quality control facilities in Cotton Spinning Unit withequipment imported from Switzerland.
BENEFITS DERIVED AS ARESULT OF ABOVE R&D
i) Improvement in the manufacturing process.
ii) Better quality of products.
iii) Increased productivity and reduction of wastes.
EXPENDITURE ON RESEARCH & DEVELOPMENT
|a) Capital (Rs.in lacs) ||NIL |
|b) Recurring (Rs.in lacs) ||0.25 |
B. TECHNOLOGY ABSORPTION
The Company has successfully implemented its Cotton Spinning Project based on RingSpinning Technology with Plant & machinery imported from Rieter of Switzerland &Schlafhorst of Germany and it is continuously making an endeavor to adapt the process ofproduction to the state of art technology.