| Dear Members,
The Directors of your Company have pleasure in presenting the 33rd
Annual Report together with the audited statement of accounts for
the 9 Months ending 31st March, 2014.
FINALCIAL RESULTS (Rs. In Lakhs)
Current year previous year
(9 months) (15 Months)
Ended Ended
31.03.2014. 30-06-2013
1.Sales and other Income 3619.13 11873.65
2.Profit before interest
and depreciation 376.78 935.75
3.Interest and Finance
Charges 435.12 1081.09
4.Depreciation 354.87 754.62
5.Profit/(loss) after
interest and Depreciation (1166.78) (2773.80)
6.Provision for Taxation
a) Current Tax - -
b) Fringe Benefit Tax - -
c) Deferred Tax charge 00 0
7.Prior period item - -
8.Net Profit (loss) Aftertax (1166.78) (1100.00)
9.Profit and Loss A/c Balance (4870.43) (3873.80)
10.Reserves 1466.13
APPROPRIATIONS
1.Surplus carried forward to
Balance Sheet (6037.21) (4870.43)
REVIEW OF OPERATIONS:
During the 9 months period under review, the company has achieved a
turnover of Rs. 3619.13 lakhs against Rs.11876.80 in the previous
15 months period and it is not comparable due to different period.
The company has incurred a loss of Rs. 1166.78 Lakhs against a loss
of Rs. 2401.36 Lakhs in the previous period.
Due to lack of working capital the company carried out the operations
on job work basis during the entire period under review.
The Management is taking effective steps to cut the
cost and improve production.
TEXTILE INDUSTRY
A textile is the oldest industry in the country and it is the most
labor intensive industry. This sector gives direct employment to
35 million people and indirect employment to 45 million people
covering mostly women and rural poor. This industry contributes for
the growth of the country in terms of job creation in rural areas,
export earnings, besides meeting the basic needs of the people.
The capacity of the Industry is much more than the domestic
requirements. The fall in exports due to recession in developed
countries has resulted in poor price realization from the
domestic market. The unprecedented huge price fluctuations of raw
materials and demand recession for all Textile products have seriously
affected and drove the industry to register huge losses during the
year Nearly 75% to 80% of the textile mills across the country have
started incurring losses.
In order to bail out the ailing industry the Spinning Mills
Associations have approached the Textile Ministry pleading for reliefs.
Recently the Government has agreed to provide some relief which
includes: Debt Restructuring for Rs.35, 000 Crores. RBI to relax
conditions to avoid Textile units being classified as NPAS by opt for
debt restructuring. Moratorium on payment of principal and interest on
term loans for a period of two years. Sanction of working capital term
loan representing the uncovered portion in the cash credit loan account
and Interest relief.
With the reliefs that are going to be available from the Banks, now the
industry is hoping to turn around.
OUTLOOK ON OPPORTUNITIES, RISK AND CONCERN:
The fundamental growth drivers of Indian economy remain strong despite
the economic turmoil in the world. There would be growing opportunities
in the international market as well as domestic market. The consumption
is growing in response to growing per capita income, population and
strong retail push. With regards to textile industry, there are
significant opportunities in the domestic market as more consumers
are buying readymade garments and also consumption of the cloth per
capita continues to increase due to growth in the economy which is
adding to the purchasing power of the Consumers.
Macroeconomic factors increase in interest rates are the major risk
factors presently for the textile industry. Increase in interest rates
will affect the profitability. Since the industry is capital intensive.
ADEQUACY OF INTERNAL CONTROLS
The Company has a proper and adequate system of internal controls to
ensure that all assets are safeguarded, and protected against loss from
unauthorized use of disposition, and that transactions are authorized,
recorded, and reported correctly. The internal control system is
supplemented by an extensive program of internal audits, review by
management and documented policies, guidelines and procedures.
The internal control system is designed to ensure that the financial
and other records enable for preparing financial statements and other
data and for maintaining accountability of assets. The audit Committee
comprising independent Directors will review the internal control
system on quarterly basis.
EXPORTS:
During the period under review there were no exports
WIND MILL:
During the year under review, the 1.8 M.W Wind power Mill has generated
1605427 units as against 3171776 units in the previous year.
GAS POWER PROJECT
The 3.2 M.W. Gas based power project of the Company has not generated
power during the current year due to non-availability of Gas.
FIXED DEPOSITS:
The fixed Deposits outstanding as on 30.06.2014 amounted to Rs 282.62
Lakhs. The outstanding fixed deposits will be re-paid as per the
provisions in the companies Act, 2013.
INSURANCE:
The properties of the Company including its building, plant and
machinery and stocks as required have been adequately insured.
CORPORATE GOVERNANCE:
The Company is in conformity with the code of Corporate Governance
enunciated in clause 49 of the Listing agreement with Stock Exchanges.
A separate report on Corporate Governance is annexed hereto and form
part of Directors Report together with a certificate from the Auditors
of the Company confirming compliance of the Conditions of Corporate
Governance.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to section 134(5) of the Companies Act,2013, your Director's
Confirm that:
i) In the preparation of the annual accounts, the applicable
accounting standards have been followed:
ii) Such accounting policies have been selected and applied them
consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the statement of
affairs of the Company at the end of the financial year and of the
profit of the Company for that year
iii) The proper and sufficient care have been taken for the maintenance
of adequate accounting records in accordance with provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities:
iv) The annual accounts have been prepared on a going concern basis.
v) The directors incase of listed company had laid down internal
financial control to be followed by the company and that such internal
financial controls are adequate and were operating effectively.
vi) The directors had devised proper system to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
DIRECTORS:
1. Mr. D.Sivayya, appointed as a director on the Board w.e.f.17.10.2013
2 Mr. V,B.Bajaj appointed as Additional Director w.e.f.06th April, 2014
3.Mr. Govardhana Naidu, Additional Director resigned from the office
of the company 14.02.2014
4.Exim bank withdrawn Mr.David L Sinate, as nominee director on the
board of Directors of the company.W.e.f.14.02.2014
All the Independent Directors are appointing for a period of 5 year at
the AGM and also proposed to appoint Mr. Kowsalendra Rao Chrukuri as
executive vice chairman for a further period of 3 year at the AGM.
STATUTORY AUDITORS:
M/S.P.Srinivasan & Co., Chartered Accountants, theStatutory Auditors of
the Company retire at the Conclusion of the ensuing Annual General
Meeting and are eligible for re appointment. As per the
provisions of companies Act, 2013 they are proposed to be appointed
as auditors for a period of 3 years(subject to ratification by the
company at every AGM)
CONSERVATION OF ENERGY:
Conservation of energy, Technology Absorption & Foreign exchange
and outgo earnings and information pursuant to Section217(1)(e) of
the Companies Act, 1956 read with Companies (Disclosure of particulars
in the report of Board of Directors) Rules, 1988 are annexed hereto
and form part of this report.
PARTICULARSOFEMPLOYEES:
In terms of sub section (2A) of section 217 of the Companies Act, 1956
read with the Companies(Particulars of Employees) Rules 1975 as
amended,the Company has No employee drawing salary exceeding Rs. 24.00
Lakhs per annum or Rs.2.00 Lakhs per month during the year under review.
HUMAN RELATIONS:
During the period under review the industrial relations continued to be
cordial at all the units.
REFERENCE TO BIFR:
As required under the Sick industrial companies(special provisions) Act
1985 has made a referenceto BIFR under Section 15(1) of SICA. The same
is under process for registration.
ACKNOWLEDGEMENT:
Your Directors take this opportunity to offer their sincere thanks for
continued assistance and cooperation extended to the Company by various
departments of the Central and State Governments,Government Agencies,
Financial Institutions, Banks,and other statutory authorities.
Your Directors also take this opportunity to offer their sincere thanks
to shareholders, customers, creditors and other related organizations,
for their continued support and Cooperation that have helped in the
Company's growth.
Your Directors also wish to thank the employees at all levels for the
cooperation extended by them in achieving the results.
For and on behalf of the Board of Directors
Place:Hyderabad C.K.Rao D.VenkataRatnam
Date:12.08.2014 Executive Vice chairman Director |