Your Directors are pleased to present the Eighteenth Annual Report on the business andoperations of the Company and the audited statement of accounts for the year ended 31stMarch, 2011.
Business Scenario and Performance
The World Economy during the year ended with shades of recession in USA, but theslowdown of economy as a result of European debt concerns further aggravated the businesssluggishness particularly in the home furnishing area due to cut back in the big ticketspending.
The Overseas silk yarn supplies have seen unprecedented cost escalation by almost100-150%. Your Directors have initiated various aggressive marketing steps like additionalproducts in different blends, domestic sales which is getting positive response and arealso hopeful of improving the performance during the coming year.
During the year under review due to steep increase in raw material cost, higherinterest rates & volatile foreign currency fluctuations the Company has reported aloss of Rs. 479.06 Lacs compared to loss ofRs. 53.61 in the previous year.
Financial Results and Appropriations
| || ||(Rs. in Lacs) |
|Particulars ||2010-11 ||2009-10 |
|Operating Profit ||(105.09) ||303.58 |
|Profit before tax ||(479.06) ||(53.61) |
|Provision for taxation ||- ||3.36 |
|Provision for deferred tax ||(180.46) ||(7.65) |
|Profit after tax ||(298.60) ||(49.32) |
|Profit brought forward from previous year ||916.70 ||966.02 |
|Profit available for appropriation ||618.09 ||916.70 |
During the year ended 31st March, 2011, the Board has not recommended any dividend forthe year under review.
In terms of provisions of the Companies Act, 1956 and Articles of Association of theCompany, Sri Sandeep Kumar Churiwala and Sri Saket Kumar Churiwala retire by rotation andbeing eligible, offer themselves for re-appointment.
Directors' responsibility statement
Pursuant to the provisions of Section 217(2AA) of the Companies Act, 1956, the Board ofDirectors confirms that:
(a) In the preparation of Annual Accounts, the applicable accounting standards havebeen followed along with proper explanation relating to material departures.
(b) Appropriate accounting policies have been selected and applied consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of the affairs of the Company at the end of the Financial Year and ofthe Profit of the Company for that period.
(c) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the Assets of the Company and for preventing and detecting fraud and otherirregularities.
(d) The annual accounts have been prepared on a going concern basis.
Your Company has consistently been complying with the Corporate Governance Codeprescribed by SEBI and a detailed report on Corporate Governance together with aCertificate of Compliance from the statutory auditors, as required by Clause 49 of theListing Agreement, forms a part of this Annual Report.
Conservation of energy, Technology absorption and Foreign exchange earnings and outgo
Information under Section 217(1)(e) read with Companies (Disclosure of particulars inthe report of Directors) Rules, 1988 is set out in Annexure - A, forming part of thisreport.
Management Discussion & Analysis Report
Management Discussion & Analysis Report is enclosed at Annexure - B to this report.
Particulars of employees
There are no employees employed during the year or part of the year who were in receiptof remuneration in excess of the limits prescribed under Section 2I7(2A) of the CompaniesAct, 1956 read with Companies (Particulars of Employees) Rules, 1975.
M/s. G. Bagrodia & Co, Chartered Accountants, Bangalore bearing Firm RegistrationNo.: 000312S, retires at the conclusion of ensuing Annual General Meeting and are eligiblefor re-appointment. Directors recommend the appointment of the retiring Auditors.
Regarding Point No.4 (a)
The Company has initiated necessary efforts with the concerned to realize/recover theadvances. Management considers all advances as good and realizable though slowly in viewof present recession.
Point No.4 (b)
The Company maintains cost records as prescribed by the central government underSection 209(1)(d) of Companies Act, 1956 and the valuation for the finished and semifinished goods are taken at the cost as certified by a Cost Accountant and others at costof procurement or realizable value whichever is less as per the normal industrialstandards.
Your Directors wish to place on record their appreciation for the excellentco-operation and assistance received from Bankers, Financial Institutions, Central andState Government. We express our wholehearted thanks to the customers and suppliers fortheir valued patronage and the shareholders for the continued confidence reposed in theCompany and its Management.
Your Directors also wish to place on record their appreciation for the total dedicationand wholehearted efforts made by employees of the Company.
| ||For and on behalf of the Board |
|Place: Bangalore ||Sushil Kumar Churiwala |
|08-08-2011 ||Chairman and Managing Director |
ANNEXURE TO THE DIRECTORS' REPORT
ANNEXURE - A
Information as required under Section 217(I)(e) read with Companies (Disclosure ofParticulars in the Report of Directors) Rules, 1988.
Conservation of Energy
A. Energy conservation measures taken.
The Company has been using the latest techniques and equipment available in the fieldof energy conservation. The Company has been using its own D.G. sets, which ensurescontinuous and quality supply of power.
B. Additional Investments and proposals, if any, being implemented for reduction ofconsumption of energy. The Company has started the process to undertake power audit toeliminate any wastages and conserve of power.
The Company has invested in the latest and best technology available so far and hencethere is no proposal to invest any further amounts.
C. Impact of the measures taken for reduction of energy consumption and consequentimpact on the cost of production.
Energy conservation measures taken so far have resulted in improved energy efficiency.This has resulted in ensuring adequate and uninterrupted supply of good quality power atthe least possible cost leading to better utilisation and low cost of production. Effortscontinue to further optimize energy productivity through ongoing and planned measures.
D. Total energy consumption and energy consumption per unit of production.
Form for disclosure of particulars with respect to Conservation.
| || ||Current Year ||Previous Year |
|A. Power & Fuel Consumption || || || |
|1. a) Electricity purchased ||Units ||12,61,887 ||10,68,538 |
|Rate/unit ||Rs. ||5.16 ||4.65 |
|Total Amount (Includes fixed demand charges) ||Rs. ||65,09,177 ||49, 63, 737 |
|b) Own Generation || || || |
|(i) Through Diesel Generator ||Units ||6,76,194 ||11,82,404 |
|Units/Ltr. of Diesel oil ||Units ||3.12 ||3.27 |
|Cost/unit ||Rs. ||13.97 ||10.90 |
|(ii) Through steam turbine/generator || ||Nil ||Nil |
|2. Coal || ||Nil ||Nil |
|3. Furnace Oil || ||Nil ||Nil |
|4. Others/Internal Generation || ||Nil ||Nil |
|B. Consumption per unit of Production || || || |
|Products units: Raw Silk Yarn ||Mtrs ||39,759 ||58,552 |
|Electricity: (units consumed/Mtrs) || ||10.03 ||8.03 |
|Furnace Oil || ||Nil ||Nil |
|Coal || ||Nil ||Nil |
|Others || ||Nil ||Nil |
Form for disclosure of particulars with respect to Absorption.
A. RESEARCH AND DEVELOPMENT (R & D)
1. Specific areas in which R & D carried out by theCompany:
(i) Quality enhancement of existing products with new and improved designs withdifferent weaves and twists,
(ii) Development and evaluation of alternate and cheaper raw materials,
(iii) New product/process developments in-house.
2. Benefits derived as a result of the above R & D efforts:
(i) Consistent quality product along with development of designs of InternationalStandards,
(ii) Lower cost of production.
3. Future plan of action:
Continuation of R& D efforts towards quality improvement, development of newdesigns and cost reduction.
4. Expenditure on R & D:
|(i) Capital : ||Nil |
|(ii) Recurring : ||Rs. 5B.76.576/- |
|(iii) Total : ||Rs. 5B.76.576/- |
|(iv) Total R& D expenditure as percentage of total turnover : ||3.58 % |
B. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
1. Efforts in brief, made toward technology absorption, adaptation and innovation:
(i) Continuous information upgradation with R& D Divisions of overseasdesigners/buyers,
(ii) Adaptation of sophisticated technologies in development of new designs/products,
(iii) Use of high tech loom technology for better and faster weaving.
2. Benefits derived as a result of the above efforts:
(i) All round quality improvement in product arid design,
(ii) Reduced cost and increased productivity.
|3. Information regarding imported technology (Imported during the last 5 years reckoned from the beginning of the financial year) ||No technology has been imported : for the last five years |
C. FOREIGN EXCHANGE EARNING AND OUTGO
|Particulars ||Year ended 31st March, 2011 ||Year ended 31st March, 2010 |
|Earning in Foreign Currency : || || |
|FOB value of exports ||14,28,72,191 ||19,19,00,157 |
|Expenditure in Foreign Currency: || || |
|GIF value of import of Raw silk yarn ||5,68,52,316 ||5,13,01,975 |
|Dyes, Chemicals and Spares & Stores ||9,00,770 ||13,80,697 |
|Other expenses ||1,09,62,671 ||1,43,31,797 |
|Import of Capital Goods || || |
| ||For and on behalf of the Board |
|Place: Bangalore ||Sushil Kumar Churiwala |
|Date: 08-08-2011 ||Chairman and Managing Director |