| The Directors have pleasure in presenting Annual Report and audited
accounts for the financial year ended on March 31, 2012.
1. FINANCIAL RESULTS
(Rs. In crores)
2011-12 2010-11
Net Profit for the year before
exceptional items 1.29 3.08
Exceptional items - 69.94
Net profit after exceptional items 1.29 73.02
2. OPERATIONS
During the financial year, the Company has achieved a turnover of about
Rs. 167 crores as against Rs. 143 crores during the previous financial
year. With the entry of new manufacturers and additions to the
capacities by all the major producers of denim in the country, there
has been surplus in the market with the average realizations declined
during the year under review. Company is facing acute shortage of
working capital which has impacted profitability of the Company for the
year. Production cost pushed up due to exorbitant increase in power and
other input cost. Inspite of difficult business conditions prevailing
in the domestic textile market and continued recessionary trend
prevailing in global textile markets, your Company has been able to
generate net profit of about Rs. 1.29 crores as against net profit of
Rs. 3.08 crores in previous year. The exports of Denim are not
remunerative due to world wide competition in the global market of
Denim Industry, flooding of cheaper denim fabric by China, East Asian
Countries & Pakistan. However, the Company is continuing its efforts to
explore opportunities for its products in overseas markets and could
export the Denim Fabrics of about Rs. 2 crores during the year under
review. Your Company has also taken several remedial steps to meet the
challenges viz. measures of saving in cost at all fronts of operation,
optimize use of available resource etc. Your Directors regret their
inability to recommend any dividend for year under review in absence of
net profits.
3. FUTURE PROSPECTS
Since last few years the Denim Industry is passing through difficult
business conditions. Due to change in fashion the demand of denim
fabric has declined world over resulting into over supply situation.
Over supply situation coupled with lower demand have squeezed the
margins not only of your Company but almost of every leading houses in
denim segment of textiles. The substantial increase in the number of
players in denim sector is a cause of worry and may lead to further
glut in the market. Domestic demand is expected to grow at 20-25%
whereas supply growth is expected to be in excess of 50%. The long term
success is possible only when the product mix is diversified. However
such diversification will need large investment which is not possible
for your Company as we have shortage of funds. Thus prospects of Denim
industry remains uncertain.
4. RESTRUCTURING OF DEBTS & REFERENCE TO BIFR
The company is making continuous efforts for settlement of dues of the
secured lenders. Once settlement with the remaining secured lenders are
completed, company will file fully tied up Draft Rehabilitation Scheme
with Operating Agency & Hon'ble BIFR.
5. PUBLIC FIXED DEPOSIT
In view of petition filed by the Company, the Hon'ble Company Law Board
has passed an order on 21/12/2001 that "The repayment of fixed deposits
shall be made by the Company in accordance with "revival scheme" as and
when approved by BIFR under the provision of SICA". However payments on
compassionate ground are continued to be made as per the decision of
the committee formed by Hon'ble Company Law Board for this purpose.
6. DIRECTORS
Shri RR. Maheshwari is liable to retire by rotation and being eligible,
offers himself for re-appointment. Appropriate resolution for the
re-appointment of the aforesaid Director is being moved at the ensuing
Annual General Meeting, which the Board recommends for your approval.
7. AUDITORS
M/s. J. T. Shah & Co., Chartered Accountants, Ahmedabad retires at the
forthcoming Annual General Meeting. Your Directors recommend their
re-appointment as Auditor of the Company for the year 2012-13. The
observations made by the Auditors are self explanatory and have been
dealt with in the notes forming part of the financial statements and
hence need no further clarifications.
8. INDUSTRIAL RELATIONS & PARTICULARS OF EMPLOYEES
Your Directors sincerely appreciate the workers, staff and officers for
putting in their best efforts. The Company has enjoyed healthy and
cordial industrial relations throughout the year under review. There is
no employee getting remuneration as prescribed under Section 217 (2A)
of the Companies Act, 1956 read with Companies (Particulars of
Employees) Rules, 1975 as amended.
9. DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to sub-section (2AA) of Section 217 of the Companies Act,
1956, the Board of Directors of the Company hereby state and confirm
that:-
i) in the preparation of the Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
ii) 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 and of the profit or
loss of the Company for the year under review;
iii) the Directors 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
the Company and for preventing and detecting fraud and other
irregularities;
iv) the Directors have prepared the annual accounts on a going concern
basis.
10. PARTICULARS OF ENERGY CONSERVATION. TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE OUTGO
The statement of particulars relating to energy conservation,
technology absorption and foreign exchange earnings and outgo as
required in accordance with Section 217 (1) (e) of the Companies Act,
1956 read with Rule 2 (A), 2(B) and 2 (C) of the Companies (Disclosures
of particulars in the report of Board of Directors) Rules, 1988 is
annexed hereto and forms part of this report.
11. CONSTITUTION OF AUDIT COMMITTEE
The Board of Directors has constituted the Audit Committee of Directors
to exercise powers and discharge functions as stipulated in section
292A of the Companies Act, 1956. The present Audit Committee consists
of member directors as follows:-
Shri H. L. Sharma, Chairman
Shri B. L. Verma
Shri R.R. Maheshwari (From 22nd March, 2012)
12. ACKNOWLEDGEMENTS
The Board places on record its sincere thanks and gratitude for the
assistance and continued co-operation that the Company has been
receiving from the financial institutions, banks, employees,
shareholders and Central as well as State Government.
ON BEHALF OF THE BOARD
(SACHIN RANKA)
Chairman & Managing Director
Place: Mumbai
Date : 29th June, 2012
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