To the Members of Volant Textile Mills Ltd.
Your Directors have pleasure in presenting the Eighteenth Annual Report for the yearended 31st March, 2013.
| || ||(Rs. in lacs) |
| ||Current Year ||Previous Year |
|Gross profit/ (loss) before || || |
|Interest depreciation & exceptional/ Extra ordinary items ||54.36 ||193.62 |
|Less: Financial charges ||(27.06) ||(33.33) |
|Profit before Depreciation ||27.30 ||160.29 |
|Less: Depreciation ||(119.32) ||(118.99) |
|Net Profit/(Loss) ||(92.02) ||41.30 |
In view of accumulated losses, your directors do not recommend any dividend for theyear under review.
The Company is exploring opportunities for manufacturing niche products. During theyear due to volatility of cotton yarn, the company's profitability has been hampered,however this is a temporary phenomenon and growth and profitability of the company shouldbe intact in the coming year.
The total sale during the year was Rs. 3,024.10 lacs (Rs. 2,176.10 lacs). This includesdirect export sales of Rs 46.39 lacs (Rs. 219.07) and Rs.NIL lacs (Rs. 12.69 lacs) madethrough merchant exporters.
Your Company has been certified for ISO 9001:2008 Quality Management Systems by GLSystems Certification. The certification is valid till 23rd February, 2015.
The company has also received Trade Marks registration certificate from 08th July 2013and this would help the company to create its brand value.
REVIEW AND FUTURE PROSPECTS
The company was declared a sick industrial unit under section 3(1)(O) of SICA, 1985, byBIFR in case no. 322/02 in March, 2006, and Bank of Baroda was appointed the OperatingAgency. The Hon'ble BIFR held a hearing on 31st May, 2012 and has asked the Company tosubmit an updated scheme with the cut-off date as 31st March, 2012. The revised updatedscheme of Rehabilitation is submitted to the OA. Creditors' meeting was conducted on 17thSeptember, 2012. The revised Draft Rehabilitation Report is submitted to the Hon'ble BIFR.The company has proposed the merger with another unit for manufacturing of technicaltextile products and the said merger is part of the rehabilitation scheme submitted to theOA & Hon'ble BIFR. The OA is to incorporate the provisional figures of March 2013 andresubmit the scheme to the Hon'ble BIFR. All necessary permission and approval for thesame would be taken by the company at the appropriate time.
The merger of the Company would bring about better synergies and value addition of itsproducts. This would enable the company to enhance operations, improve efficiencies,provide economies of scale, open up new and potential markets and thus unlock synergies toderive maximum valuation for all stakeholders. Imposition of added tax burdens throughLBT, Service Tax etc. may hamper growth. Under the circumstances, the company remainscontinuously optimistic of future business prospects.
Unprecedented fluctuation in cotton and cotton yarn prices affected the working of theCompany.
Assuming the inflation is brought under control and input prices revert to a moremoderate level, the domestic market is expected to continue to deliver a healthy growth.The raw material prices are expected to stabilize due to good cotton production. Thedemand growth is likely to push up due to overall economic recovery. The directors arevery optimistic of the textile trade and feel that with the pro-active governmentpolicies, the Indian textile industry can have a dominant share in the world trade afterChina. We are taking a long term view of the industry and hope to increase turnover andmargins from the current position. Simultaneously the company is exploring opportunitiesto venture into manufacturing of niche products, strengthen the quality of its productsand reduce the conversion cost. These initiatives are expected to positively influence theworking of the company. However rising energy prices and increase in labour costs due tohike in minimum wages will lead to increase in manufacturing costs. The depreciation ofRupee will make India more competitive in the export market, and has an opportunity to bethe textile suppliers to the world.
At the ensuing Annual General Meeting, Mr. D. A. Tare and Mr. Atul B. Raval Directorsof the Company, retires by rotation and being eligible offers himself for re-appointment.Mr. D. A. Tare and Mr. Atul B. Raval are Directors of the Company having vast experiencein industry and administration in their respective field.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 withrespect to the Director's Responsibilities Statement, it is hereby confirmed:
That in the preparation of the annual accounts, the applicable accounting standardshave been followed.
That the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year on 31stMarch 2013 and of the profit/loss of the Company for that period;
That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; and
That the Directors have prepared the annual accounts on a going concern basis as theCompany has started generating profits.
M/s Shah, Patani & Associates, Chartered Accountants, Mumbai, have requested not tobe reappointed for the F.Y. 2013-14, hence M/s P.C. Ghadiali & Co. are been appointedas Statutory Auditors of the Company. Accordingly, a resolution proposing theirappointment is being submitted in the ensuing Annual General Meeting. The members arerequested to consider their appointment for the current financial year 2013-14.
The Notes on accounts, referred to in the Auditor's Report are self explanatory andtherefore, do not call for any further comments under Section 217(3) of the Companies Act,1956.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
As required under Section 217(1)(e) of the Companies Act, 1956 read with rule 2 of theCompanies (Disclosure of particulars in the report of Board of Directors) Rules, 1988,information relating to Conservation of Energy, Technology Absorption and Foreign ExchangeEarnings and Outgo is annexed as Annexure "A" to Directors Report.
The Company has not accepted any deposit from the public within the meaning of Section58A of the Companies Act, 1956 and the Rules made thereunder.
A separate section on Corporate Governance and a certificate from the Auditor of theCompany regarding compliance of conditions of Corporate Governance as stipulated underclause 49 of the Listing Agreement with Stock Exchanges, form part of the Annual Report.
The Company had applied to get the shares delisted from Ahmedabad and Jaipur StockExchanges in the year 1999 in view of the nil trading there, but the delisting procedurehas not been completed. The Company hopes to get their shares delisted from Ahmedabad andJaipur Stock Exchanges as per the provisions of SEBI (Delisting of Securities Guidelines),2003, the Listing Agreement for which a Special Resolution was passed at the 12th AnnualGeneral Meeting of the Company. The company hopes that the Ahmedabad and Jaipur stockexchange would assist the company in delisting its shares from their respective stockexchanges.
Today's business environment, remains challenging for the Corporate World and riskmanagement retains its high position on every organizations agenda. The Company hasseveral risk factors which could potentially impact its business objectives, if notperceived and mitigated in a timely manner. The senior management team sets the overalltone and risk culture of the orgnisation through defined and communicated corporatevalues, clearly assigned risk responsibilities, appropriately delegated authority, and aset of process and guidelines. The Company has laid down procedures to inform the Boardmembers about the risk assessment and risk minimization procedures. As an organization, itpromotes strong ethical values and high levels of integrity in all its activities, whichin itself is a significant risk mitigator.
With the growth strategy in place, risk management holds a key to the success of itsjourney of continued competitive sustainability in attaining its desired businessobjectives.
PARTICULARS OF EMPLOYEES
There are no employees covered under the provisions of Section 217 (2A) of theCompanies Act, 1956, read with the Companies (particulars of the Employees) Rules, 1975 asamended.
In its endeavor to improve investor services, your Company has created an investorsection on the website www.volant-textile.com and has provided a dedicated email id forthe members to lodge their complaints or suggestions.
Your Directors are pleased to place on record their sincere gratitude to financialinstitutions and business constituents for their continued valuable co-operation andsupport to the Company during the year.
Your Directors thank the Shareholders, Banks, Customers, Vendors and other businessassociates for their confidence in the Company and its management and look forward totheir continued support.
Your Directors also wish to place on record their appreciation for the dedication withwhich the employees at all levels performed their duties and for their cooperation andsupport in stabilizing the production and quality.
| ||On behalf of the Board of Directors |
|Place: Mumbai, ||Rajesh Somani |
|Date: 14th August, 2013 ||(Chairman) |
ANNEXURE "A" TO DIRECTORS REPORT
Information as per Section 217(1)(e) of the Companies Act, 1956, read with Companies(Disclosure of Particulars in the Report of Board of Directors) Rules 1988 and formingpart of the Director's Report for the year ended 31st March 2013.
I. CONSERVATION OF ENERGY
1) The company has made efforts to incorporate energy conservation measures in theinstallation stage itself.
|2) ||Current Year ||Previous Year |
|Power & Fuel Consumption || || |
|Electricity: || || |
|Purchased Units (KWH) ||12,35,750 ||13,97,195 |
|Total amount (Rs. In lacs) ||60.14 ||53.55 |
|Rate/Unit (Rs.) ||4.87 ||3.83 |
|Generated Power: || || |
|Diesel Consumption (Ltrs) ||NIL ||NIL |
|Total amount (Rs. In lacs) ||NIL ||NIL |
|Total Units Generated ||NIL ||NIL |
|Cost per unit (Rs.) ||NIL ||NIL |
3) Continuously prefer for Improvement in power factor.
4) The Company has been using low wattage tubes and electronic ballast in its shedresulting in energy savings.
II. TECHNOLOGY ABSORPTION
Research and Development (R&D)
1) Specific areas in which R&D carried out by the Company
Process parameter control through Quality Assurance by various testing methodsto improve productivity and fabric quality.
Strict quality control in grey fabric inspection area.
Process optimization/ recipe modification/ introduction of new chemicals forcost economy .
Process standardization for consistent quality and meeting customerrequirements.
New process development to overcome working problems in production departmentand meeting marketing needs.
New product development for improved marketability of products.
New design development of creating facilities for providing world class designsof products for the matress ticking sector.
2) Benefits derived as a result of above R&D
Improvement in product marketability and business viability through consistentquality, lower cost and newer products.
Meeting customer needs and in turn customer satisfaction.
Introduction of new design development providing a larger product range,targeting different market segments, better marketability and sale ability.
3) Future plan of action
New product development in Industrial market segment.
New marketing initiatives in technical textiles.
Exploring possibilities for getting its fabric processed outside and to developmarketing in processed fabric which would lead to higher margins.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION
1) Efforts in brief, made towards technology absorption, adaptation and innovation:
Obtained ISO 9001:2008 certifications from GL Systems Certification.
Development of designs and creating of sample bank for its jacquard looms.
2) Benefits to be derived as a result of the above efforts:
Quality consistency due to process standardization/ optimization.
Cost reduction arising from process/ recipe modification in various operations.
Newer products and product range.
Improved customer care and satisfaction.
III. FOREIGN EXCHANGE EARNINGS AND OUTGO
Direct Foreign exchange earnings is Rs. 46.39 Lacs (219.07) and Third Party Exports isof the value of Rs. NIL Lacs (12.69 Lacs). Outgo in current year is Nil (Nil).
| ||On behalf of the Board of Directors |
|Place: Mumbai ||Rajesh Somani |
|Date: 14th August, 2013. ||(Chairman) |