The Directors have pleasure in presenting their Annual Report on the
affairs of the Company together with the Audited Accounts for the
financial year ended March 31, 2012.
(Rs. in lakhs)
The Financial results for
the year are as under :
PARTICULARS 2011-12 2010-11
Profit Before Depreciation,
Interest & Tax (PBDIT) 3,803.85 10,880.74
Interest / Finance Charges 2,872.03 1,975.37
Profit Before Depreciation
and Tax (PBDT) 931.82 8,905.37
Depreciation / Amortization 2,461.97 2,244.87
Profit Before Tax (PBT) (1,530.15) 6,660.50
- Current Tax 46.70 1,308.20
- Deferred Tax (650.00) (67.00)
Profit After Tax (PAT) (926.85) 5,419.30
Balance brought forward 5,567.64 2,083.15
Balance available for appropriation 4,640.79 7,502.45
Proposed Dividend on:
8% Redeemable Cumulative
Preference Shares of Rs. 100/- each 16.00 16.00
Ordinary Shares of Rs. 10/- each 106.71 960.41
Corporate Dividend Tax 19.91 158.40
Transfer to :
Preference Shares Redemption Reserve - 200.00
General Reserve - 600.00
Surplus carried to Balance
Sheet 4,498.17 5,567.64
Earnings per Ordinary Share (Rs.)
- Basic (4.43) 25.31
- Diluted (4.43) 25.31
Dividend per Ordinary Share (Rs.) 0.50 4.50
FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS
During the financial year 2011-12, your Company reported a loss of Rs.
926.85 lakhs against profit of Rs.5,419.30 lakhs during the previous
year. The loss was due to adverse economic conditions and some
unforeseen disruption of operations, which resulted in loss of
production and operational income. Operational matters have been
discussed under ''Management Discussion and Analysis,'' detailed in
appropriate part of this Report.
Your Directors recommend the following dividends:
a) Dividend @ Rs. 8/- per Share on 2,00,000 8% Redeemable Cumulative
Preference Shares of Rs. 100/- each of the Company, entailing an
outflow of Rs. 16.00 lakhs.
b) Dividend @ Re. 0.50 per Share on 2,13,42,346 fully paid up Ordinary
Shares of Rs. 10/- each of the Company, entailing an outflow of Rs.
MANAGEMENT DISCUSSION AND ANALYSIS
The industry structure, development, performance, opportunities,
threats and outlook of each activities, internal control systems and
industrial relations have been discussed in paragraphs to follow.
India was expected to achieve production of 1 billion kgs of tea in
2011, but due to early onset of winter in north-east regions, and rains
in southern regions during October to December, industry could produce
988 million kilograms (mkg) of tea in 2011, an increase of 2.3%
compared to last year.
Production in Kenya and Sri Lanka, the largest exporters, also showed a
declining trend due to adverse climatic conditions. However, exports
from India during 2011 stood at 193 mkg against 222 mkg in 2010 mainly
due to Western sanctions against Iran and political instability in West
Asia and North African countries. Increased production along with
decrease in export has created pressure on price of tea but it has been
minimized due to surge in domestic demand.
In spite of adverse impact due to labour and political unrest in the
gardens located in West Bengal, Tea Division has produced 9.15 million
kgs of Tea during the year under review, which is marginally higher
than 9.01 million kgs. during the last year. Exports were made to
countries like Sri Lanka, Dubai, Iran and Russia, which has resulted in
enhanced export sales during the year under review. Your Division is
exploring other potential markets and taking measures to strengthen the
existing market and is confident of increasing export sales in coming
Packet segment is gradually increasing its presence in markets by
strengthening branch operations, operational logistics, warehousing
facilities and is expected to further penetrate the markets in the
coming years by enhancing its marketing tools. However, decrease in
price coupled with increase in cost, including wages and other inputs,
has created pressure on profit margin of the division.
During the current year, with a minimal carry forward and increase in
demand the prices are expected to be buoyant, particularly for quality
tea. However, increase in wages and other input cost will continue to
put pressure on margin. Your Directors expects the Division to do
relatively well in the coming year.
All the tea estates of the Company are ISO 9001:2008 and Hazard
Analysis and Critical Control Points (HACCP) certified.
Engineering (MICCO) Division
This Division of your Company is mainly involved in infrastructural
work in Steel and Power Sectors. MICCO is a prestigious name in the
Steel Sector and enjoys preference as partner by national and global
players in the sector. Apart from Gas holders and Reheating Furnaces,
where this Division has created a niche, it has also established itself
as a trusted name in Casters, Mills and Coke Oven Plants.
During the year under review, the global and national economy has not
been encouraging, which resulted in slow projects execution. The
performance of your Division was also adversely affected due to fire in
one of the sites. In spite of tough market scenario, your division has
a healthy order book position.
The outlook for Steel Industry is cautious due to the markets continued
financial uncertainty and volatility. The global steel sector is
expected to grow, although at a lower rate. In India, however, demand
for steel from the domestic sector especially for infrastructure is
creating a positive outlook as India is expected to perform better than
most world economies. Power Sector is also expected to do reasonably
well in the coming year.
Your Division is continuously putting in efforts to improve the growth
trajectory through internal assessment and seeking advice from leading
consultants in the field. Steps have been taken to reorganize your
Division, establish new partners in allied fields, locate new areas of
operation and to strengthen the existing collaborations. The initial
results of such initiatives are encouraging and the division has
already entered into several tie-ups in different products and few are
in the pipeline, which shall change the range and profile of your
division for a sustainable growth in near future. MICCO Division is
equipped to harness the opportunities and expects a stable performance
in the coming year.
During the year, Spinning Industry witnessed unprecedented and one of
the worst crisis in the past several decades.
As a normal practice, the Industry built up requisite inventory of good
quality cotton during the season as good quality cotton is not
adequately available during the off season. However, the prices of raw
cotton and other fibers, which had peaked during the end of last year,
crashed during the year, resulting in huge losses on account of raw
material and finished goods inventory.
The said event also led to fall in demand for yarn both in domestic and
international markets resulting in huge inventory with the mills, which
has put tremendous pressure on yarn prices and margins.
As reported last year, the frequent changes in the policy guidelines
and intervention of the government has created an uncertainty in the
market, which is adversely affecting the outlook and growth prospect of
the industry. The Industry looks forward to the government to draw up a
long term policy guidelines taking into account the benefit of the
entire textile value chain.
Apart from the above, the performance of Textile Division was also
affected by loss of production at GIS Cotton Mill unit due to labour
unrest for two and half months. In North India Spinning Mill unit there
was total breakdown of captive power plant along with some machineries,
which took about four months to be replaced/repaired, resulting in
non-optimal use of production capacity. The production during the year
under review was 15,066 MT, which is lower than last year.
The current year also seems to be difficult due to weak global and
Indian economy. The cotton crop at 347 lakhs bales for the year 2011-12
is estimated to be higher than last year. However, due to huge exports
the carry forward stock for the next season is expected to be very low.
In spite of all odds, your Directors are hopeful of reasonable
performance in the current year.
Chemical (Waldies) Division
Waldies Division is engaged in the business of manufacture and
marketing of Lead Oxides and Stabilizers for PVC Industry.
During the year under review, the Industry witnessed uncertain market
environment and slow growth. In spite of that, this Division has
achieved satisfactory increase in profitability. Continuous efforts
are being made for further improvement in the operations of the
Division. The outlook of the performance for the coming year is
Waldies Division continues to enjoys ISO 19001 certification for its
Quality Management Systems and ISO 14001 certification for its
Environment Management Systems and OHSAS 18001 for its occupational
health and safety management systems.
During the year under review, the turnover of this Division was
marginally low compared to previous year primarily due to fall in sale
of cement paints.
Your Division now owns a Brand known by the name ''GILLARCO'' and has
plans to market and sell different products under the said Brand name
in the future. It has plans to expand its operational base by foraying
into marketing and selling of Abrasive Sheets in automotives and
decorative Segments. Your Directors expect that this Division will
yield better results in the coming year.
Increase in occupancy has yielded higher rental income for property
Division for the year under review.
Your Division has a Fire Safety Policy, which is reviewed from time to
time. Latest fire fighting equipments are in place in ''Gillander House''
and fire safety norms are strictly adhered to. Your Directors believe
that with continuous improvement of facilities and safety, this
Division will be benefitted in the long term.
Internal Control System and their adequacy
Your Company has proper and adequate system of internal controls. Audit
of various divisions, units, factories, sites, branches and its
corporate offices are conducted by Independent professional firms of
Chartered Accountants and reports thereon are reviewed and discussed by
the Audit Committee of the Board of Directors and corrective action, as
deemed necessary, are taken. Procedures have been laid down by your
Company to safeguard and protect all assets and ensure that the
transactions are authorized, recorded and reported correctly.
Human Resources and Industrial Relations
Your Company has laid down the processes for attracting, retaining and
rewarding talent as it acknowledges the importance of good Human
Resource. Congenial environment is being maintained and recreation
activities are sponsored by your Company. Industrial relations were
good except an incident of labour unrest.
Management Discussion and Analysis Report contains forward- looking
statements, which are based on certain assumptions and expectations of
future events. The Company''s actual results and performance may differ
from those projected due to unforeseen circumstances viz., political,
economic etc. The Company assumes no responsibility to publicly amend,
modify or revise any such statements on the basis of subsequent
developments, information or events. Readers are advised to apply their
own diligence and independent judgment.
During the year under review, Mr. S. Lahiri resigned from the Board
with effect from February 14, 2012. Mr. A. Mallick resigned from the
Board with effect from March 31, 2012.
The Board wishes to place on record its deep sense of appreciation and
gratitude for the valuable contribution, guidance and advice received
Mr. J. N. Godbole and Mr. A. K. Kothari retire by rotation under
Articles 109 and 110 of the Articles of Association of the Company, and
being eligible offer themselves, for re- appointment.
Mr. N. Pachisia has been appointed as an Additional Director with
effect from August 16, 2011 to hold such office till the conclusion of
the ensuing Annual General Meeting. Notice under Section 257 of the
Companies Act, 1956 has been received from a member proposing his name
for appointment as Director of your Company in the forthcoming Annual
General Meeting. The Board recommends his appointment as Director
since his appointment will be beneficial to the Company.
At the Board Meetings held on February 14, 2012 and May 29, 2012, Mr.
D. K. Sharda was re-appointed as Managing Director of the Company for a
period of one year, with effect from April 01, 2012 and designated as
Managing Director & Chief Executive Officer (CEO) of the Company
respectively. The said re- appointment is subject to the approval of
the members of the Company in the ensuing Annual General Meeting.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors'' Responsibility Statement, your
Directors confirm having:
a) Followed in the preparation of the Annual Accounts, the applicable
accounting standards with proper explanation relating to material
departures, if any;
b) Selected such accounting policies 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 state of affairs of your Company at
the end of the financial year and of the loss of your Company for that
c) Taken proper and sufficient care for the maintenance of adequate
accounting records, in accordance with the provisions of the Companies
Act, 1956, for safeguarding the assets of your Company and for
preventing and detecting fraud and other irregularities; and
d ) Prepared the Annual Accounts on a ''going concern'' basis.
Auditors'' Report to the members of the Company does not contain any
qualification or adverse remark. Financial Statements and the notes
thereon is self explanatory and need no further explanation.
Messrs. Singhi & Co., Chartered Accountants, Kolkata, who retires after
the conclusion of the forthcoming Annual General Meeting, and being
eligible, offer themselves, for re- appointment.
Messrs. Dutta, Ghosh & Associates, Chartered Accountants, Kolkata, the
Branch Auditor of the GIS Cotton Mill unit of Textile Division of the
Company, retire after the conclusion of the forthcoming Annual General
Meeting and, being eligible, offer themselves, for re-appointment.
Messrs. Bagree & Co., Chartered Accountants, Kolkata, who retires after
the conclusion of the forthcoming Annual General Meeting have sent a
letter expressing their unwillingness to be re-appointed as Branch
Auditor of Engineering (MICCO) Division of the Company. A Special
Notice has been received from a member proposing the name of Messrs.
Kothari & Company, Chartered Accountants, Kolkata, as the Branch
Auditor of Engineering (MICCO) Division of the Company in place of the
retiring Auditor in the ensuing Annual General Meeting.
A certificate under sub-section (1B) of Section 224 of the Companies
Act, 1956, has been obtained from each of them.
The Ministry of Corporate Affairs, Government of India, has approved
the re-appointment of the following Cost Auditors for conducting Cost
Audit for the financial year 2011-12:
i) Textile Division - M/s. S. Gupta & Co., Kolkata;
ii) Tea Division - M/s. B. Ray & Associates, Kolkata & M/s. DGM &
Associates, Kolkata; and
iii) Chemical (Waldies) Division - M/s. S. Gupta & Co., Kolkata.
The Report on Corporate Governance duly certified by CS Deepak Kumar
Khaitan, a practicing Company Secretary, confirming compliance with the
conditions stipulated under Clause 49 of the Listing Agreement, which
forms part of the Annual Report, is attached to this Report.
As on March 31, 2012 an amount of Rs. 2,115.04 lakhs was outstanding as
fixed deposits received from the public and shareholders of your
Company. No matured fixed deposit was unclaimed as on the said date.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Information in accordance with the provisions of Section 217(1)(e) of
the Companies Act, 1956, read with Companies (Disclosure of Particulars
in the Report of the Board of Directors) Rules, 1988 regarding
conservation of energy, technology absorption and foreign exchange
earnings and outgo is given in the statement annexed (Annexure I)
hereto forming part of the Report.
PARTICULARS OF EMPLOYEES
No employee falls under the purview of Sub-section (2A) of Section 217
of the Companies Act, 1956, read with the Companies (Particulars of
Employees) Rules, 1975, as amended.
Your Directors would like to record their appreciation for the
co-operation and support received from the employees, shareholders,
banks, Government agencies and all stakeholders.
For and on behalf of the Board
A. K. Kothari
Kolkata, May 29, 2012. Chairman