SAMRAT SPINNERS LIMITED
ANNUAL REPORT 2000-2001
Your Directors' have the pleasure to present their NINETEENTH ANNUAL REPORT
of your company for the period ended March 31, 2001.
The Directors are pleased to report that during the year under review, the
spinning operations of the Company has significantly improved and earned
cash profit of Rs.120.12 lakhs as against cash profit of Rs.61.74 lakhs
earned during 1999-2000. The company earned an income of about Rs.180 lakhs
towards sale of teak plants during current year. Company has concentrated
on export market by producing finer counts of yarn, which have contributed
to the profitability of the company. Textile industry is still reeling
under recession. In order to counter the recessionary trend and to face the
competition, company has to upgrade the facilities by suitable
modernisation. Company's application for financial assistance to modernise
its plant is pending with IDBI. In order to conserve the resources, no
dividend is proposed for the year under review.
Andhra Bank has filed a case in Debts Recovery Tribunal, Hyderabad to
recover outstanding working capital facilities, due to change in company's
management. The present management is making its efforts to impress upon
Andhra Bank to review their stand.
The company is contemplating to modernise the unit during the current
financial year, with the support to be received from IDBI. Once the unit is
modernised, company could produce international quality standard yarn and
could secure orders from high-end buyers. The contribution for the yarn
produced after modernisation will be substantial and it will definitely
improve the bottom line of the company.
Shri A Subramanyam resigned as a Director due to his pre-occupation. Board
would like to place on record their appreciation for the excellent support
by Shri A Subramanyam during his tenure as a Director of the Company.
Shri Y Venkat Rao & Shri K S Raju are retiring by rotation at the
Nineteenth Annual General Meeting in accordance with the Article 48 of
Memorandum & Articles of Association of the company and being eligible
offers themselves for reappointment.
Shri C Niranjan and Shri Narinder Anand were appointed as Additional
Directors in the Board Meetings held on 28/10/2000 and 14/6/2001
respectively will be retiring at the ensuing Annual General Meeting.
Necessary resolutions are placed before the Annual General Meeting for
their appointment as Directors of the Company.
EXPORT ORIENTED UNIT
The spinning unit of the company has been converted into 100% EOU w.e.f.
30/3/2000 in terms of sanction received form VEPZ. As per the sanctioned
terms, the unit has to export entire production. However as per the current
Exim policy, the unit can sell upto 50% of FOB value of the export in
Domestic Tariff Area. Company has obtained advance DTA sale permission from
VEPZ and effected local sales. As on 31/3/2001 the company has sold excess
quantity in DTA amounting to Rs.316 lakhs than its entitlement mainly due
to delay in modernisation / upgradation of the manufacturing facilities.
However as per the agreement entered with VEPZ, company has to fulfil the
obligations of export over a period of 5 years ending 31/3/2005. Your
company is hopeful to export the required quantities in the ensuing period
to fulfil its export obligations.
CONSTITUTION OF AUDIT SUB COMMITTEE
To comply with recent amendments to the Companies Act 1956, the Board of
Directors in their meeting held on 27/1/01 have constituted an Audit Sub-
Committee with the following Directors as its members :-
1) Dr A G Prasad
2) Shri K S Raju and
3) Shri C Niranjan
M/s.C K S Associates, the auditors of the company retire at the conclusion
of the Nineteenth Annual General Meeting and are eligible for re-
The industrial relations continued to be cordial during the year under
Disclosures in terms of Companies (Disclosure of particulars in the report
of the Board of Directors) Rules 1988 in respect of Conservation of Energy,
Technology absorption, Earnings and Outgo of Foreign Exchange are attached
and form part of this report.
There are no employees who are drawing a salary of Rs.1 lakh per month /
Rs.12 lakhs per annum to be declared U/S.217(2A) of the Companies Act 1956.
Directors Responsibility statement u/s 217 (2AA) is as follows:
i) That in the preparation of Annual accounts, the applicable accounting
standards have been followed.
ii) That Directors had selected such accounting policies and applied them
consistently and made judgements & estimates that are reasonable and
prudent so as to give a true & 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 Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities.
iv) That the Directors had prepared the "Annual Accounts" on a going
Your Directors gratefully acknowledge for the continued support and
guidance received from the Industrial Development Bank of India, Andhra
Bank and other Financial Institutions.
Your Directors commend the dedication of the employees and thank the
shareholders for the confidence they have reposed in the company.
For and on behalf of the Board
Secunderabad T Devendar Reddy
14th June, 2001 Managing Director
ANNEXURE TO DIRECTORS' REPORT FOR THE PERIOD ENDED 31ST MARCH, 2001
RESEARCH & DEVELOPMENT
1. Specified areas in which R & D is carried : Nil
out by the Company
2. Benefits derived as a result of the
above R & D : Not Applicable
3. Future plan of action :
The Company has been constantly striving to improve its technology
available and used in the process
4. Expenditure on R & D technology absorption, adaptation and innovation:
1. Efforts, in brief, made towards : No technology has been imported.
technology absorption, adaptation
2. Benefits derived as a result of
the above : Not Applicable
3. Imported Technology : Not Applicable
PARTICULARS OF FOREIGN EXCHANGE EARNINGS AND OUTGO
A. Activities relating to exports, initiatives taken to increase exports;
development of new export markets for products and services, export plan:
The Company has converted itself into an 100% EOU w.e.f.30/3/2000. The
company plans to further upgrade its machinery to meet export quality
standards. Exports to Thailand, Italy and Indonesea had already commenced
and other European and Asian markets are also being explored.