The Directors have pleasure in presenting the 16th Annual Report of
the company along with the Audited Statement of Accounts for the year
ended 31st March, 2012.
The highlights of the financial results of the company for the year
ended 31.03.2012 as compared with the previous year are as follows:
Rs. In Lacs
year ended For the
Particulars'' 31.03.2012 31.03.2011
Net Turn Over 12102.87 10263.04
Profit before Interest, Depreciation & Tax 989.13 914.87
Less: Interest 542.33 487.78
Profit/(Loss) before Depreciation & Tax 446.80 427.09
Less: Depreciation 144.53 136.08
Profit/(Loss) before Taxation 302.27 291.01
Less: Provision for Taxation
Wealth Tax 0.15 0.30
Deferred Tax 92.69 89.92
Profit/(Loss) after Tax 209.43 200.79
Balance brought forward (461.42) (662.21)
Provision for Dividend and Dividend tax - -
Transfer from General Reserve - -
Balance carried forward to next year (251.99) (461.42)
During the year of operation, your company has achieved a net turnover
of Rs. 12102.87 lacs, an increase of 17.93 % as against the previous
year net turnover of Rs. 10263.04 lacs. The operative profits stood at
Rs. 989.13 lacs. The PAT stood at Rs. 209.43 lacs as against PAT of Rs.
200.79 lacs in the previous year. The main reason of declining PAT is
due to loss on account of exchange difference.
Keeping in view of the accumulated losses, your Directors regret their
inability to declare any dividend.
SUBSIDIARIES & ASSOCIATES
During the year under review, M/s. Surge Trading Limited (STL) your
Wholly Owned Subsidiary has recorded net revenue of Rs. 905.67 lacs
(previous year Rs. 857.42 lacs) an increase of about 6% with a net
profit of Rs. 9.75 lacs. This company is instrumental in sourcing
material for your company from abroad. Management has belief that the
company will perform better in years to come.
CONSOLIDATED FINANCIAL STATEMENTS
As per Section 212 of the Companies Act, 1956, the Company is required
to attach the Directors Report, Auditors Report, Balance Sheet and
Profit and Loss Account of its subsidiary company to its Annual Report.
The Ministry of Corporate Affairs, Government of India, vide its
general circular no. 2/ 2011 dated 8th February, 2011, has granted
exemption to all companies for not attaching the above documents of
subsidiary with Annual Report of the Company from financial year
2010-11 onwards. Accordingly, this Annual Report does not contain the
report and other statement of M/s. Surge Trading Limited the subsidiary
company. The Company will make available the annual audited accounts
and related detailed information of the subsidiary companies upon
request by any member of the Company. These documents will also be
available for inspection during business hours at the registered office
of the Company.
Financial information of M/s. Surge Trading Limited, the subsidiary
company, as required by the said general exemption circular of Ministry
of Corporate Affairs, Government of India, is annexed to this report. A
statement of Holding Company s interest in subsidiaries is also
As required by Accounting Standard 21 and Listing Agreement with stock
exchanges, the audited consolidated financial statements of the Company
and its subsidiaries are enclosed.
PREFERENTIAL ALLOTMENT OF SHARES
During the year under review, the company has issued and allotted
18,98,793 Equity Shares @ Rs. 10.77/- per share (including premium of
Re. 0.77/- per share) to promoters and others on preferential basis.
The objective of the issue was to provide long term funding for the
ongoing business of the Company and to meet debt: equity ratio as
stipulated by the lender bank. These shares were also listed with both
Bombay Stock Exchange Ltd and National Stock Exchange of India Ltd and
trading was started w.e.f.24.04.2012 & 25.04.2012 respectively.
DIRECTORS RESPONSIBILITY STATEMENT
In compliance with Section 217(2AA) of the Companies Act, 1956, as
amended by the Companies (amendment) Act 2000, your Directors confirm:
a. That in the preparation of Annual Accounts, the applicable
accounting standards have been followed and that no material departures
have been made from the same.
b. That they have 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
the company at the end of the financial year and of the profit or loss
of the company for that period.
c. That they have 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;
d. That they have prepared the annual accounts on a going concern
Your Company recognizes the importance of good corporate governance.
Your Company is therefore, committed to business integrity, high
ethical values and professionalism in all its activities. As an
essential part of this commitment, the Board of Directors supports high
standards in corporate governance. It is the endeavor of the Board and
the executive management of your Company to ensure that their actions
are always based on principles of responsible corporate management. In
your company, corporate governance is seen as an ongoing process. Your
Company s Board will therefore closely follow future developments in
the governance norms and will take lead in ensuring compliance with the
same. A separate report on Corporate Governance along with the
certificate of the Auditors, confirming compliance of the conditions of
corporate governance, as stipulated under Clause 49 of the Listing
Agreement entered into with the Stock Exchanges is annexed.
AUDIT COMMITTEE / INVESTOR GRIEVANCE COMMITTEES / REMUNERATION
The Board of Directors has constituted three committees i.e. Audit
Committee, Share Transfer & Investor Grievance committee and
Remuneration Committee as per the requirement of Corporate Governance
under the Listing Agreement. All the members of these committees are
independent & non executives. The details of members of these
Committees are given in Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility continues to assume an important role
in the activities of the Company. It encompasses much more than social
outreach programs and is an integral part of the way the Company
conducts its business.
COST AUDIT COMPLIANCE CERTIFICATE
Company has obtained Cost Audit Compliance Certificate for the period
ended 31.03.2012 issued by Mr. Sivasubramanian & Co, Cost Accountants
and the same shall be filed with MCA accordingly.
The Company has neither accepted nor renewed any Fixed Deposits from
the public during the year under review.
Mr. Satya Prathaap Bhatera, director is retiring by rotation and being
eligible offer himself for reappointment. Necessary resolution is
proposed in the notice to the Annual General Meeting.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The statement containing the necessary information as required under
Section 217 (1)(e) of the Companies Act, 1956 read with Companies
(Disclosure of Particulars in Report of Board of Directors) Rules 1988,
relating to conservation of energy, technology absorption, foreign
exchange earnings and outgo are annexed hereto and forms an integral
part of this report.
ENVIRONMENT & GREEN INITIATIVE
The Company is committed to the environment. The Company continues to
upkeep effluent and chemical treatment plant besides green belt inside
the factory premises. Continuous check of air and water pollution at
manufacturing unit is made and monitored. Your company is certified
with FSC (Forest Stewardship Council) besides an existing member of
PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 217 (2A) OF THE COMPANIES
None of the employees is drawing remuneration in excess of limit
prescribed under section 217(2A) of the companies Act, 1956 and rule
thereto for which disclosures to be made.
AUDITORS AND THEIR REPORT
M/s. C. Ramasamy & B. Srinivasan, Chartered Accountants, auditors of
the company will retire at the conclusion of the ensuing Annual General
Meeting and are recommended for reappointment. The Company has received
a certificate from them to effect that the reappointment, if appointed,
would be within the limits prescribed under section 224 (1B) of the
Companies Act, 1956.
LISTING WITH STOCK EXCHANGES
The Equity shares of the Company were listed with Bombay Stock Exchange
Ltd. (BSE) & National Stock exchange of India Limited (NSE). The annual
listing fee for the financial year 2012-13 was paid within the
stipulated time to BSE & NSE.
FOREIGN EXCHANGE MANAGEMENT
During the year under review, the Company incurred a forex loss of 2.28
crores against a loss of 5.22 lacs in the previous year. The management
is adopting required foreign currency hedging mechanism from time to
ANNEXURE TO THE DIRECTORS REPORT
Under The Companies (Disclosure of particulars in the report of the
Board of Directors) Rules 1988 A. Conservation of Energy
The Company through continuously improving its manufacturing process
and efficiency at its all plants and offices continues its endeavor to
improve energy conservation and utilization. Energy conservation
programs adopted by the Company are:
(i) Strict watch is kept on idle running of machine and to work the
machine at full capacity
(ii) Installed frequency drivers in machines to save power
(iii) Machineries are frequently overhauled to work smoothly;
(iv) Monitoring of power factor is frequently done and we have
installed automatic power control systems in the circuit.
(v) Energy consumption versus production is monitored at regular
intervals to check over usage of energy.
(vi) Continuous monitoring of energy consumption.
(vii) Voltage is controlled with the installation of automatic voltage
controller on transformer.
B. Research and Development (R & D)
1. Specific areas in which R & D carried out by the Company.
R&D portfolio consists of product improvement and process optimization
with a view to reduce cost and introduction of new environmental
friendly products and processes.
2. Benefit derived as a result of the above R & D:
The new products and process cater the needs of variety of customer
segments and aim to reduce cost. Development of eco-friendly processes
result in less quantity of effluent and emission. Also designing of
safe i.e. non toxic products conform to Euro I Standards
3. Future Plan of action:
R&D will focus on projects leading to further cost reduction and
reduced load on environment.
4. Expenditure on R & D
No capital expenditure is done towards the R&D. The Company
continuously incurs expenses for improving the processes, product
quality, etc they cannot be specifically identified as research &
development expenses. Thus, the same has not been shown separately.
TECHNOLOGY, ABSORPTION, ADAPTATION AND INNOVATION.
1. Efforts in brief, made towards technology absorption, adaptation
The Company absorbs the knowledge of plywood technology from various
sources, such as the existing know-how, their own data bank, published
literature etc. and thereafter adopts the same to the Company
infrastructure, effects improvement to the products and processes of
the Company including containment of pollution and control of
effluents. Quality assurance managers are placed for each factory and
are made independent. With this the complaints have reduced and
consumers are feeling satisfied with our products.
2. Benefits derived as a result of the above efforts.
Benefits derived from these efforts include process rationalization,
product quality improvement and environmental friendly product. With
this our Product has got eco mark from BIS and has been referred for
Green Building due to low formaldehyde emission products.
C. Foreign Exchange Earning & Outgo
During the year under review the foreign exchange earned by the company
was Rs. 23.12 lacs and outgo amounted to Rs. 3611.21 lacs as against
Rs. 19.61 lacs and Rs. 2861.56 lacs respectively in the previous year.
For and on behalf of the Board
B.L. Bengani M.L. Pramod Kumar
Chairman and Managing Director Whole Time Director