The Directors present the Annual Report together with the Audited
Balance Sheet as at 30th September 2012 and the Statement of Profit and
Loss of CHESLIND TEXTILES LIMITED for the period ended on 30th
September 2012 (18 months).
Your Company''s performance during the financial year 2011-12 (18
months) and financial year 2010-11 is summarized below:
(18 months) (12 months)
Export 15675 10893
Domestic 9188 7604
TOTAL 24863 18497
Profit/(Loss) before Interest &
Depreciation (6) 3191
Less : Interest 1887 1083
Profit/(Loss) before Depreciation (1893) 2108
Less : Depreciation 1227 935
Profit/(Loss) before Tax and
Exceptional Items (3120) 1173
Less : Exceptional Items - -
Profit/(Loss) before Tax (3120) 1173
Less: Income Tax earlier years (33) -
Profit/(Loss) after Tax (3087) 1173
Add : Opening Balance (348) (1521)
Loss Carried Forward (3435) (348)
The year 2011-12 was a highly challenging year and the performance of
the Indian cotton textile industry got affected badly from April 2011
on account of Government policy decisions about export of cotton and
cotton yarn during FY 2010-11. International and domestic Cotton prices
crashed from the peak of Rs.62,500 per candy in March 2011 to Rs.32,000
per candy by June 2011. The Government''s ban on export of Cotton Yarn
during December 2010 to March 2011 resulted in accumulation of yarn
stocks with the mills and yarn prices got dropped by over 40% in the
first 3 months of the FY 2011-12. During the year the interest costs on
the borrowings also increased. High cost raw material stocks, drop in
yarn prices and high interest costs have led to steep fall in the
profits in the FY 2011-12.
Consequent to losses suffered during the first half of the FY 2011-12,
the Company approached financial institutions and banks for
restructuring of debt. Bankers agreed for this and debts have been
restructured under CDR Mechanism which was approved in March 2012. As
part of the CDR scheme, the promoter''s loan to the company was
converted into equity and also the promoters have brought in additional
equity as per the CDR Scheme.
The power situation in the state of Tamil Nadu remained critical
causing regular power cuts, load shedding and peak hour restrictions.
The power rate was increased from Rs.4.84 per unit to Rs.6.47 per unit
w.e.f 01.04.2012. Captive power generation become unviable due to high
HFO cost. Due to Southern Grid Corridor problem and load restrictions,
even IEX power available in Northern grid could not be bought.
The lenders have reduced the interest rates on the loans as per the CDR
Scheme. The Company also entered into an agreement with wind power
generators for a long term supply of power at competitive price. The
operational team of unit at Bagalur took various measures to
debottleneck the production process and have increased production from
21 MT per day to 23 MT per day.
All these measures lead to improvement in the performance of the
Company from April 2012.
Looking to CDR approval and its implementation, the Company decided to
extend the accounting year from 31st March 2012 to 30th September 2012,
therefore 18 months accounts have been made for the financial year
Your Directors are unable to recommend any Dividend on the Equity
Shares in view of the financial position of the Company.
Your company is committed to good Corporate Governance practices. Your
Directors Endeavour to adhere to the standards set out by the
Securities and Exchange Board of India''s (SEBI) Corporate Governance
practices and accordingly has implemented all the major stipulations
prescribed. The Practicing Company Secretary''s certificate dated 13th
October 2012 in line with Clause 49 of the Stock Exchange Listing
Agreement is attached to this report.
CONTRIBUTION TO THE EXCHEQUER
Your company has contributed an amount of Rs.246.05 lakhs in terms of
taxes and duties to the exchequer.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
- in the preparation of the Annual Accounts the applicable Accounting
Standards have been followed;
- appropriate Accounting Policies have been selected and applied
consistently and they have made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company on 30th September 2012 and of the
Profit and Loss of the Company for the period ended on that date;
- proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- the Annual Accounts have been prepared on a going concern basis.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The information required to be disclosed pursuant to Section 217(1)(e)
of the Companies Act, 1956 read with Companies (Disclosure of
Particulars in the report of Board of Directors) Rules, 1988, is given
in Annexure which forms part of the Report.
The following Directors retire by rotation and being eligible offer
themselves for re-appointment:
- Mr. Prakash Maheshwari
- Mr. S C Parasrampuria INTERNAL CONTROL SYSTEMS
The Company has in place proper, adequate and effective Internal
Control Systems commensurate with the nature and size of its
operations, to ensure that all systems and procedures are functioning
satisfactorily and all policies are being duly complied with. The
operations of the Company are regularly reviewed by the Audit
Committee, which examines and evaluates the adequacy, relevance and
effectiveness of the Internal Control Systems and its compliance with
prevailing laws and regulations. The Audit Committee makes appropriate
recommendations for improvement in efficiencies and effectiveness of
the Internal Control Systems.
PARTICULARS OF EMPLOYEES
There is no employee drawing remuneration falling within the limits
specified under Section 217(2A) of the Companies Act, 1956 hence no
statement is enclosed.
The Company''s Auditors M/s. K P Rao & Company, Chartered Accountants
and M/s. M Bhaskara Rao & Company, Chartered Accountants retire at the
conclusion of the ensuing Annual General Meeting of the Company and
being eligible, offer themselves for re- appointment.
Your Directors take this opportunity to express their gratitude and
thank the Customers, Dealers and Suppliers, Investors, Members, Banks,
Financial Institutions, Central and State Governments for their
continued support and co-operation. Your Directors also thank the
employees of the Company across all levels for the sincere and hard
work put in by them during the year under review.
For and on behalf of the Board
Place : Bangalore Ravi Jhunjhunwala
Date : 18th October 2012 Chairman