ANNUAL REPORT 2005-2006
To the Members,
Your Directors have pleasure in submitting their 12th Annual Report
alongwith the audited accounts for the year ended 31st March, 2006 and
Auditors Report thereon.
Year ended Year ended
Gross Profit 995.11 1,076.34
Financial Expenses/Lease Rent 526.00 601.56
Profit before Depreciation 469.11 474.78
Less: Depreciation & Amortization 374.10 354.90
Profit for the year 95.01 119.88
Your Directors confirm that:
(i) in the preparation of the annual accounts the applicable accounting
standards have been followed;
(ii) the Directors have selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year under review and of the profit of
the Company for the year;
(iii) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
(iv) the Directors have prepared the annual accounts on a going concern
The Company produced 10,505 tonnes of yarn valuing Rs. 11,132 Lacs during
the period under review as against 10,191 tonnes of yarn valuing Rs. 11,487
Lacs produced during last year.
Severe competition and increase in raw material cost during year resulted
in severe pressure on sales realizations and margins. Inspite of all the
adverse conditions your Company hits earned cash profit of Rs. 469.11 Lacs
during the year under review. This has been possible due to strict control
over costs through various means.
Your Company's product is being increasingly recognised as a quality
product both in the national as well as international markets.
DIVERSIFICATION & MODERNISATION
During the year the Company has undertaken modernization of Unit No. 1
where LR6 Ring Frames have been installed replacing old Texmaco Ring
Frames. The Company has installed two new Autoconers of Savio make. To give
better quality of yarn, yarn conditioning machine has been installed.
During the year your Company exported 4,116 MTs yarn valuing Rs. 4,018 Lacs
against exports of 4,036 MTs valuing Rs. 4,140 Lacs, last year including
merchant exports of 2,904 MTs valuing Rs. 2,782 Lacs. Existing markets in
Belgium, Turkey, Germany, Italy, Kenya, and Egypt have been consolidated.
Company plans to further increase its exports to the existing markets and
also tap new markets.
PROSPECTS IN THE CURRENT YEAR
The market of textile industry is improving and there is good demand of
products, produced by the Company. However, because of increase in crude
oil prices, there is a pressure on increase in prices of raw material and
In the financial year budget 2006-07, the Government of India has reduced
duty on polyester fibre, viscose fibre and other man made fibres from 16%
to 8%. The Company shall be benefited because of this change in Central
There was no change in the authorised share capital of the Company.
The Company's shares are presently listed with Mumbai Stock Exchange and
listing fees to them stands duly paid.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
Pursuant to Companies (Disclosures of particulars in the report of the
Board of Directors) Rules, 1988, relevant details in forms A & B are
annexed and form part of this report.
During the year under Report, the relations between the Management and
Staff/Workers remained harmonious.
During the year no employee has drawn remuneration beyond the limits as
prescribed under Section 217(2A) of the Companies Act, 1956.
Shri V K.Ladia and Shri S.C. Kuchhal, Directors would retire by rotation at
AGM and being eligible they offer themselves for reappointment.
The Corporate Governance Code introduced by the Securities and Exchange
Board of India (SEBI), is being followed by your Company in terms of
Listing Agreement with the Stock Exchange. Report on the implementation of
the Code is annexed and forms part of this report.
DEMATERIALISATION OF SHARES
In pursuance of SEBI/Stock Exchange directions, your Company has already
offered the option of demat to the esteemed shareholders. Connectivity with
National Securities Depository Limited (NSDL) and Central Depository
Services (India) Limited (CDSL) has been obtained. As on 31 March, 2006,
48,22,500 equity shares representing 32.15% of total paid up share capital
have already been demated.
M/s. M.C. Bhandari & Co., Chartered Accountants, Jaipur, Auditors of the
Company will cease to hold office as Auditors at the conclusion of the
ensuing Annual General Meeting, but are eligible for reappointment. The
observations made by the Auditors are self-explanatory and have been dealt
with in Schedule No. 14 forming part of the accounts and hence do not
require any further clarification.
Your Directors take this opportunity to express their sincere thanks for
the continued support and valuable guidance and assistance provided by the
various departments of Central and State Governments, Financial
Institutions, Bankers and Business Constituents. The Board also wishes to
place on record its warm appreciation for the dedicated services rendered
by the employees of the Company. Your Directors are also grateful to the
investing public for the confidence reposed in the Company and are
confident that your Company will continue to receive such cooperation from
all in future.
For and on Behalf of the Board
Place : Udaipur V. K. Ladia
Date : 21st June, 2006 Chairman
ANNEXURE TO THE DIRECTORS' REPORT
I. CONSERVATION OF ENERGY
In order to stop wastage of energy, the company has taken various steps to
reduce consumption of energy like use of synthetic tapes,use of light
weight bobbins etc. Studies are also being conducted for more efficient use
of other utilities like steam and water. The Company has installed at
Dungarpur Heat Recovery Unit at its Power Plant to supply steam to the main
Figures given hereunder are self explanatory that steps taken by the
Company to conserve energy are giving positive response :-
A Power & Fuel Consumption
Current Year Previous Year
(a) Units Purchased
Total Amount ( in Rs.) - -
Rate / Unit / Rs. - -
(b) Own Generation
(i) Through Diesel Generator
Units 2,13,571 16,09,080
LDO, SKO & HSD Consumed ( Kgs.) 51,286 3,78,909
Unit per Kg. Of LDO/HSD 4.16 4.25
LDO, SKO & Diesel Value ( in Rs. ) 13,22,398 89,60,354
Including Electricity Duty
Cost / Unit 6.19 5.57
(ii) Through Furnance Oil Generator
Units 3,28,27,510 3,15,79,697
F.O. Consumed ( Kgs.) 73,42,330 74,36,803
Unit per Kg. Of F .O. 4.47 4.25
FO Value ( in Rs.) including
Electricity Duty 12,04,15,500 8,79,86,512
Cost / Unit 3.67 2.79
2. Coal ( Steam used for Generation
of Steam in boiler ) - -
Quantity ( in tonnes )
Total Cost ( in Rs.)
3. Furnance Oil
Furnance Oil Quantity ( in Kgs.) - -
4. Other/Internal Generation
Quantity - -
B Consumption per Unit of Production
Production in Kgs. 1,05,05,049 1,01,91,025
Electricity Unit Purchased
RSEB - -
DG Set 3,30,41,081 3,31,88,777
TOTAL 3,30,41,081 3,31,88,777
Electricity per Kg. of Yarn (Unit) 3.15 3.26
Coal per Kg. of Yarn (Kg.) - -
II. TECHNOLOGY ABSORPTION
Efforts made in technology absorption as per Form B of the Annexure to the
1. Research & Development (R & D)
a) Specific areas in which R & D carried out by the Company.
b) Benefit derived as a result of the above R & D
c) Future Plan of Action
d) Expenditure on R & D : ( Rs. In Lacs )
i) Capital 0
ii) Recurring 10.39
iii) Total 10.39
iv) Total R & D Expenditure as
a % of total turnover 0.09
2. Technology Absorption, Adaptation and Innovation:
i) Efforts, in brief, made towards technology absorption, adaptation and
ii) Benefit derived as as result of the above i.e. product improvement,
cost Reduction, product development, import substitution etc.
iii) In case of imported technology (imported during last 5 years reckoned
from the beginning of the financial year).
a) Technology imported
b) Year of Import
c) Has technology been fully absorbed
d) If not fully absorbed, areas where this has not taken
place, reasons thereof and the future plans of action.
III. FOREIGN EXCHANGE EARNINGS & OUTGO
During the year your Company exported 4,116 MTs yarn valuing Rs. 4,018 Lacs
against exports of 4,036 MTs valuing Rs. 4,140 Lacs, last year which
included merchant exports of 2,904 MTs valuing Rs. 2,782 Lacs. Existing
markets in Belgium, Turkey, Germany, Italy, Kenya, and Egypt have been
consolidated. Company plans to further increase its exports to the existing
markets and also tap new markets.
i) Total Foreign Exchange Used 3,54,41,617 2,95,37,940
ii) Total Foreign Exchange Earned 30,89,07,701 38,77,95,705
For and on behalf of the Board
Place : Udaipur (V K. Ladia)
Date : 21st June, 2006 Director.