The Directors submit their Report and the Audited Accounts for the
financial year ended 31st March, 2008.
FINANCIAL RESULTS As at 31st As at 31st
March, 2008 March, 2007
(Rs. in Lacs) (Rs. in Lacs)
Gross Revenue 15542.93 12736.96
Gross Profit (before interest,
depreciation and tax) 814.08 1067.42
Less: Interest 410.08 263.99
Depreciation 500.51 486.21
Profil/(Loss) before Tax (96.51) 317.22
Less: Provision for Taxation
Current - 35.00
Deferred (25.70) (18.86)
Fringe Benefit Tax (2.30) 2.35
for earlier year - 15.65
Net Profit/(Loss) available
for appropriation (124.51) 283.08
Transfer to General Reserve (124.51) 283.08
In view of the loss during the year, the Board of Directors has not
recommended any Dividend on the paid up Equity share Capital of the
company for the year.
During the financial year under review, your Companys turnover has
increased to Rs.15482 lacs from Rs.l2662 lacs in the corresponding
previous year mainly oa account of increased export of yarn as Merchant
Exporter. However, company has incurred Net loss of Rs.124.51 due to
substantial increase in raw material price mainly VSF, Cotton, Stores
spares cost and continuous hike in interest rate both on Working
capital and term loan. Again, due to unprecedented strengthening of
rupee against dollar, export demand dwindled which in turn resulted in
flood of supply in domestic market resulting in lower realization.
The Companys export during the year calculated on FOB basis amounted
to Rs.62.66 crore as against Rs.34.06 crore in the immediately
preceding year, registering robust growth of 80%.
CURRENT AND FUTURE OUTLOOK
Though 2007-08 was a challenging year for your Company, but current
year 2008-09 seems to be more challenging and difficult one. A host of
domestic as well as global factors viz. high inflation, spiralling
crude prices, high interest rates, slow down in US as well as in India
too, tremendous increase in raw material price viz. Cotton, PSF,
increase in Dyes and Chemical Cost and power tariff, increased wages
due to inflation, volatility in foreign currency exchange rates
vis-a-vis Indian rupees etc. are going to put pressure on Companys
performance. In such an unpredictable environment, it is very difficult
on your Companys part to make a decision regarding further expansion
or downsizing the ongoing expansion project under TUFS at Burkoni.
MODERNISATION / EXPANSION UNDER TUFS
Your Company has incurred capital expenditure of Rs.2843.67 lacs on
establishing a new state of the art Airjet Weaving Unit at village -
Burkoni, Tah. - Hinganghat and for modernization / upgradation of
existing Hinganghat unit and it has been financed through internal
accruals and term loan to the extent of Rs.2398 lacs taken from SB1 &
BOI under TUFS.
CDM PROJECT ACTIVITY
In the previous year, company has installed Biomass (Rice Husk) fed
boilers in view of availing Carbon Credit by meeting the requirements
of CDM (Clean Development Mechanism) of the UNFCCC. The CDM is a global
mechanism under the Kyoto Protocol that enables the project developer
to receive Carbon Credit towards their Green House Gas Emission
reduction initiatives. This project activities is almost completed and
due for registration. Your company hopes to generate substantial
revenue in future from sale of CER Certificate.
The Company has accepted Deposits U/s 58A of the Companies Act, 1956
and are within the rules as prescribed under the Companies (Acceptance
of Deposit) Rules, 1975.
In accordance with the provisions of the Companies Act, 1956 and the
Companys Articles of Association, Shri Vinay Kumar Mohota and Shri
Shantilal B. Singhavi, Directors of your company, retire by rotation
at the forthcoming Annual General Meeting and being eligible offer
themselves for re-appointment.
Your Companys Auditor, M/s. Batliboi & Purohit, Chartered Accountants,
Mumbai retire at the ensuing annual general meeting and being eligible,
offer themselves for re-appointment.
The observations made in the Auditors Report are dealt with separately
in the Notes to the Profit and Loss Account and the Balance Sheet in
Schedule Q of the Accounts. These are self explanatory and do not
call for any further comments.
The Board of Directors have re-appointed M/s. G. R. Paliwal & Co., Cost
Accountants, Nagpur as the Cost Auditor of the Company under Section
233B of the Companies Act, 1956 for the year 2008-09.
SAFETY AND POLLUTION CONTROL
Your company accords priority to the health and safety of its employees
and surroundings. It has been taking proper care in complying with all
the statutory requirements relating to safely, environment and
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 217 (2AA) of the Companies
Act, 1956 as amended by companies (Amendment) Act, 2000, your Directors
a) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanations
relating to material departures;
b) that the directors 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 ended on
31.03.2008 and of the profit of the company for the year ended on
c) that 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;
d) that the directors have prepared the annual accounts on a going
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
Information required under Section 217(1 )(e) of the Companies Act,
1956 read with rule 2 of the Companies (Disclosure of particulars in
the Report of Board of Directors) Rules, 1988 is given in the Annexure
I which forms an integral part of this report.
Pursuant to clause 49 of the Listing Agreement, the Report on the
Corporate Governance, together with Auditors Certificate thereon an
annexed to this report are Annexure II & III respectively.
The company as at present does not have any employee drawing salary in
excess of the limits specified under Section 217 (2A) of the Companies
Act, 1956 read with rules thereunder.
The Directors wish to place on record, their appreciation and gratitude
for all the co-operation extended by Government Agencies, Bankers,
Financial Institutions and Shareholders. The Directors also record
their sense of appreciation for the sincere services rendered by all
the Executives and staff of the company and for their valuable
contribution in the working of the company.
By the order of the Board
Place: HINGANGHAT Dr. RANCHHODDAS MOHOTA
Dated: 30.06.2008 CHAIRMAN