The Directors are pleased to present the 23rd Annual report together
with the audited accounts of your company for the financial year ended
31st March, 2014. The summarized consolidated and standalone financial
performance of your company is as under;
(Amount Rs. in Lacs)
SUMMARY OF THE FINANCIAL RESULTS
Particulars 2013- 14 2012-13
Total income 17049.25 16022.87
Less-expenditure 16325.25 15508.99
Profit/(Loss) Before tax and extra- 724.00 513.88
Total tax expenses 236.13 149.37
Extra-ordinary item (refer note. 2.23 - -
in consolidated financial statements).
Profit after tax and Extra-ordinary 487.87 364.51
Balance of Profit & Loss account, 2877.12 888.14
Amount transferred from FCCB 3035.26 1624.47
Amount transferred to General 36.60 -
Proposed dividend (including tax) 145.10 -
Balance carried to balance sheet 6218.55 2877.12
2013- 14 2012-13
Total Income 23170.70 20867.02
Less-Expenditure 23643.50 22540.68
Profit/Loss Before Tax and extra (472.80) (1673.66)
Total tax Expenses (892.89) 149.37
Extra ordinary item (refer note 2.23 747.63 1158.75
in consolidated financial statements).
Profit after tax and extra oridnary 1167.72 (664.28)
Balance of Profit &Loss account, (4613.58) (5573.77)
Amount transferred from FCCB 3035.26 1624.47
Amount Transferred to General Reserve 36.60 -
Proposed dividend (including tax) 145.10 -
Balance carried to blance sheet (592.30) (4613.58)
In the Granite Division, during the year 2013-14 your Company has
achieved revenues ofRs. 1,549 million and PBIT of Rs. 295 million
registering a growth of 10% and 24% respectively. Domestic Export mix
stood at Rs. 482 million & Rs. 1067 million respectively with major export
contribution coming from USA i.e., Rs. 494 million, contributing 46% to
export revenues. During the year 2013-14 your Company executed various
projects including supplies to Reliance ADAG Head Quarters - Mumbai,
Rajiv Gandhi International Airport - Hyderabad, IREO Gurgaon,
Prestige Hyderabad, Bengaluru, Chennai, One Market - USA, Barwa
Financial District - Qatar, U.S. Consulate - Indonesia.
PESL has achieved revenues ofRs. 615 million and PBIT ofRs. 98 million.
Domestic Export mix stood at Rs. 37 million & Rs. 578 million respectively
with major export contribution from USA i.e., Rs.440 million contributing
76% to export revenues. During the year 2013 -14 PESL supplied quartz
to various projects including Mumbai International Airport (T2),
Continental Hospitals - Hyderabad, Dew Flower, Sobha Developers -
Bengaluru, Arlington Downs USA, Marriott Irvine - USA, Amli Ballard -
USA, Amway Specialty Suites USA.
During the year, Apparel Division of the Company achieved revenues
ofRs.143 million and PBIT ofRs. (118) million. Entire revenue during the
year was achieved from the domestic market.
In granite business, your Company is one of the leading manufacturers &
providers of choicest and exclusive range of Indian & Imported
granites. Your Company has developed long-term relationships with
several niche customers in India & abroad. Over the years, your Company
has evolved in response to changing customer demands and aspirations.
Aggressive marketing and rational utilization of resources has helped
granite division of your Company record improved results for the year
under review. In line with outlook for the sector, your company is
contemplating undertaking an expansion programme in its granite
processing facilities and quarries.The feasibility study for the same
is under progress.
Your Company is well known in the trade for prospecting, discovering
and mining granite. Your Company has over two decades of experience in
scientific and sustainable mining, mine planning and development Your
Company-owned and/or operated mines have since its inception, met
substantial raw material needs of the Company''s granite processing
facilities. Currently, Your Company owns and/or operates granite mines
in the States of Telangana, Andhra Pradesh and Tamilnadu.Your Company''s
long-term strategy is to have greater control over raw material
resources (granite blocks) and to achieve this, your Company has also
made several applications for grant of new mining lease(s) in different
Apparel business of Your Company continues to be under pressure. In
line with the performance and near term outlook, your Company has
moderated its Stanza retail stores roll-out plan. Some of the Stanza
stores have also been resized with intent to improve store
productivity, efficiency and reducing store operation costs. At
locations that weren''t performing up to the mark, your company has
decided to rationalise spaces by reducing the area or full closure of
Going forward, we will continue to focus on long term value creation in
the businesses we know and understand better. In Granite and Quartz,
though pleased with our progress, we know there remains abundant
opportunity to expand our national and international presence, while
continuing to enhance our offering and achieve higher levels of
productivity in our operations. It remained a challenging year for your
Company''s Apparel business, which suffered from sluggish demand and
lower capacity utilization. In essence, the Company''s growth in short
to medium term will be driven by the Granite business and subsidiary''s
Quartz business will become a key contributor to earnings in future.
SUBSIDIARY & CFS
In view of the general exemption granted by the Ministry of Corporate
Affairs in 2011, the annual accounts of the subsidiary of the Company
for the financial year ended 31 March, 2014 are not being attached with
this Annual Report of the Company and certain financial highlights of
the subsidiary are disclosed in the Annual Report, as part of the
Consolidated financial statements. The audited Annual Accounts and
related information of the subsidiary will be made available, upon
request by any shareholder of the Company, for inspection at the
FOREIGN CURRENCY CONVERTIBLE BONDS (FCCB''s)
Provision has been retained towards premium payable on redemption of
FCCB''s which were matured on 29.03.2012 as per the subsisting terms and
conditions. As on date bonds have been redeemed to the extent of 9539
bonds as per the negotiated terms with the said bond holders.The gain /
benefit, cost, charges including foreign exchange gain / loss at the
close of the year are transferred to Pokarna Engineered Stone Limited
(subsidiary) as per the Scheme of Arrangement sanctioned by Hon''ble
Andhra Pradesh High Court and agreement thereto.The corresponding
receivable arising thereof is disclosed under the head''Loans and
Advances to Subsidiary''. The Company expects no further liability other
than provided for in the books.
Looking into the improved financial performance, the Board of Directors
is pleased to recommend dividend of Rs. 2.00 per equity share ofRs. 10
(20%) for the year ended 31.3.2014. The dividend payout for the year
under review, inclusive ofTax on Dividend distribution, is Rs. 145.10
Lacs, resulting in a pay-out of 29.74% of the profits of the Company on
a stand-alone basis.
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 that:
- in the preparation of the annual accounts, the applicable accounting
standards have been followed and no material departures have been made
from the same;
- such accounting policies have been selected and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give true and fair view of the state of affairs of the
company at the end of the financial year and of the profit of the
company for that period;
- proper and sufficient care have been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 and 2013 for safeguarding the assets of the company
and for preventing and detecting fraud and other irregularities;
- the annual accounts are prepared on a going concern basis.
In terms of the requirement of clause 49 of the listing agreement with
the Bombay Stock Exchange and Section 292A of the Companies Act, 1956
and Section 177 of the Companies Act, 2013, your company has
constituted Audit committee.The composition of the committee & other
details are given in the corporate governance report which forms part
of this annual report.
Your company is committed to maintain the highest standards of
corporate governance. As required under Clause 49 of the listing
agreement with the Stock exchange, a report on corporate governance as
well as Auditors certificate on the compliance of conditions on
corporate governance are annexed and form part of this annual report.
All board members and senior management personnel have affirmed
compliance with the Code of conduct for the year 2013-14. A declaration
to this effect signed by the Chairman & Managing Director of your
company is annexed to this annual report.
MANAGEMENT DISCUSSION AND ANALYSIS
''Management''s Discussion and Analysis Report'' is provided in a separate
Section and forms part of this annual report.
The Statutory Auditors of the Company, M/s. S. Daga & Co., Chartered
Accountants ( Reg. No. 000669S), retire at the conclusion of the
ensuing Annual General Meeting and being eligible offer themselves for
re-appointment as per the provisions of the Companies Act, 2013. The
Audit Committee and the Board of Directors of the Company recommend the
reappointment of S. Daga & Co., Chartered Accountants, as Statutory
Auditors of the Company.
The Board has duly reviewed the Statutory Auditors Report on the
Accounts.The Auditors without qualifying the report have made some
observations, such observations are self explanatory and therefore do
not call for any further comments or further explanation by the Board.
In terms of Cost Audit Orders issued by Ministry of Corporate Affairs
in 2012, M/s. DZR & Co., Cost Accountants were appointed as Cost
Auditors of the Company for conducting cost audit of Apparel Division
of the Company for the financial year 2013 -14, the Cost Auditor Report
for the financial year 2013 14 has been submitted to the Board on
09th August, 2014.
The due date for filing of the Cost Audit Report with the Ministry of
corporate affairs, for the financial year 2013-14 is 27th September
2014 (as per Rules, report need to be filed within 180 days from the
date of closing of respective financial year). Company will ensure that
the said report will be filed within due date.
CORPORATE SOCIAL RESPONSIBILITY
In line with the provisions of the Companies Act, 2013 and rules made
there under (the Act), a Corporate Social Responsibility (CSR)
Committee has been formed by the Board of Directors, Mr. Gautam Chand
Jain, Mr. Meka Yugandhar and Mr.Vinayak Rao Juwadi are the members of
the CSR Committee.Your Company has identified Health, Sanitation,
Education and Environment as thrust areas for CSR activities.
Ms.ApurvaJain has been appointed as the Additional Director (whole
time) of the Company with effect from August 9th, 2014 and she shall
hold office up to the date of the ensuing Annual General Meeting, The
Company has received requisite notice in writing from a member
proposing Ms.ApurvaJain for appointment as a Whole time Director.
In accordance with the provisions of the Companies Act, 2013 Mr. Rahul
Jain, Executive Director of the Company is liable to retire by rotation
at the ensuing Annual General Meeting and being eligible, offered
himself for re-appointment. Board of Directors recommends his
Further the Board of Directors recommends the re-appointment of all the
existing Independent Directors of the Company for a futher period from
15th September, 2014 to 31 March, 2019 pursuant to Section 149 of the
Companies Act, 2013.
PARTICULARS OF EMPLOYEES
None of the employees of the company was in receipt of remuneration in
excess of limits prescribed under Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 as
amended till date during the year under report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
Disclosure under Form A pursuant to Companies (Disclosure of
Particulars in the Report of the Board of Directors) Rules, 1988 are
applicable to the Apparel division of the company, hence the
information pertaining to that division is provided below:
A.Power & Fuel Consumption 2013-14 2012-13
a) Purchased power
Units 269106 303188
Total amount (In Rupees) 2950193 2362806
Rate per unit (In Rupees) 10.96 7.79
b) Own Generation Through Diesel Generator
Litres of Diesel utilized 3000 15670
Total cost of Diesel utilized (In Rupees) 171446 759513
Units per litre generated 3.69 3.69
Cost Per unit 15.49 13.12
B. Consumption per unit of production (i.e one shirt / one trouser).
Electricity (in number of units) 3.51 2.82
Note: During the year under review FSA charges ofRs. 5,27,532, have been
levied, on the apparel division of the Company.
(Disclosure of particulars with respect to technology absorption)
RESEARCH AND DEVELOPMENT (R & D)
1. Specific areas in which R&D carried out by the company Not
applicable having regard to the nature of the industry.
2. Benefits derived as a result of the above R&D Not applicable.
3. Future plan of action Not applicable.
4. Expenditure on R & D: Nil
Company maintains a high level of information flow with various
companies. Through visits of executives to developed countries, your
company keeps abreast with the advanced technological developments and
through specific program, introduces, adopts and implements them. This
has resulted in higher production, accuracy and perfection in
excavation of rough granite blocks, processing of random granite slabs,
tiles and manufacturing of apparel.
Your company generally exports granite to countries like Algeria,
Australia, Bangladesh, Belgium, Canada, China, Colombia, Croatia,
Finland, Germany, Hong Kong, Ireland, Italy, Jamacia, Jordan, Libya,
Netherlands, New Zealand, Norway, Poland, Qatar, Russia, Slovenia,
Switzerland, UK, USA andVietnam.
Your company is continuously exploring possibilities of exporting new
During the year under review, the total standalone foreign exchange
earnings was Rs. 10581.42 Lacs and expenditure of your company was Rs.
Your Directors express their appreciation for the support, trust and co
operation received from the banks, Government authorities, customers,
suppliers, shareholders and other stakeholders during the year under
review.The Board is also very thankful to the holders of Foreign
Currency Convertible Bonds for their support.
Your Directors acknowledge with gratitude the commitment and dedication
of the employees at all levels, which has contributed to the growth and
success of the company.
Your Directors look forward to the continued support from all of you in
the years to come.
For and on behalf of the Board
Place : Aliabad Gautam Chand Jain
Date : 09th August, 2014 Chairman & Managing Director
105, First Floor, Surya Towers,
S. P. Road,
Secunderabad- 500 003.
Tel: 040-27842182 Fax:040-2784 2121