Directors' Report including the Management Discussion and Analysis Report To The Members of Sanghi Polyesters Limited, Your Directors take pleasure in presenting the Twenty Second Annual Report of your Company along with the audited Financial Statements for the period ended 31st March, 2009 Operations: During the year under review, the company has achieved a sales turnover of Rs.39860.52 lacs with a production volume of 55085 Metric Tons. The company has reported a net loss of Rs.4554.26 lacs during the year under review, whereas during the previous year the Company made a loss of Rs.4638.68 lacs, which was adjusted against an extraordinary income of Rs.4712.76 lacs resulting in a Net Profit of Rs.74.08 lacs. Corporate Governance Report: A separate report on Corporate Governance is furnished as part of the Annual Report and the certificate from the company's Auditors regarding compliance with the said Corporate Governance Code is annexed to the said Report. Director's Responsibility Statement: Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 with respect to the Directors' Responsibility Statement, it is hereby confirmed that- a) in the preparation of the accounts for the accounting period ended 31st March, 2009, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were responsible and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the accounting period and of the profit or loss of the Company for the period under review; c) 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; d) the Directors have prepared the accounts for the accounting period ended 31 st March 2009 on a going concern basis. Deferred Tax: Your Directors have reviewed the requirements of AS-22 issued by the ICAI which are applicable to your Company during this period, to recognise Deferred Tax Assets and Liabilities. Taking in to account the quantum of current and unabsorbed losses and the present status of the industry, the Directors feel that the Company need not recognize Deferred Tax Assets in respect of past and current losses which, it is understood, is in accordance with Accounting Standards. Explanation to the qualifications made in the Auditors' report: As regards One Time Settlement (OTS), it is being informed to you that your Directors are still negotiating with the Banks and Financial Institutions and also trying for a tie-up with a suitable partner to pay off the lenders of the Company on terms and conditions in the interest of the Company. Further, in this context, no interest on term loans has been provided for the financial year 2008-09. Regarding provision of gratuity not based on actuarial valuation in the books of account, you Company has already approached the actuarial valuer for doing the valuation and the report is awaited. Directorate: Shri Anand Prakash Sanghi, Director, retires by rotation and is eligible for re-appointment. Shri T.M. Jagan Mohan is retiring by rotation at the ensuing Annual General Meeting and he has not offered himself for reappointment. Sri Amit Sanghi, has been co-opted as Additional Director (to be designated as Executive Director) with effect from 31st July, 2008. Sri M K Agarwal, Sri M LAgarwal, Sri O P Jalan and Sri C T Siva Muthy have been coopted as Additional Directors on the Board with effect from 31st July, 2008 Sri Siddharth Sanghi, Executive Director of the Company, has been redesignated as Joint Managing Director of the Company with effect from 30th July, 2009 by the Board of Directors in their meeting held on 30th July, 2009. Auditors: M/s. Jayant & Sadashiv, the Company's retiring auditors, being eligible, offer themselves for reappointment. Cost Audit: With the approval of the Ministry of law, Justice & Company Affairs, D.C.A., Mr. S.G.Ramakrishna Cost Accountant, has been appointed as the Cost Auditor of the Company to audit the Cost Accounts of the Company for the accounting period ended 31st March, 2009. Personnel: The information about employees pursuant to Section 217 (2A) of the Companies Act., 1956 forming part of this Report is annexed to this Report by way of Annexure -1. Energy Conservation: Your Company continues its policy of giving priority to energy conservation measures including regular review of energy generation and consumption and effective control on utilization is achieved from the design stage of plant itself and is then maintained and improved in the normal plant operations. Continuous updating of energy conservation efforts is achieved by frequent energy audits at operating levels. Please see the details of Energy Conservation attached to this Report by way of Annexure - II. Technology Absorption Adaptation & Innovation: As reported in the past, your Company has adopted and fully absorbed the technology provided by M/s Kohap Limited of South Korea. Further dependence of foreign technology has been avoided as the Company has been able to evolve on its own various strategic measures to improve efficiencies, upgrade qualities and increase production with simultaneous cost reduction. Foreign Exchange Earnings & Outgo: Particulars with regard to Foreign Exchange Earnings and Outgo are set out in Note No. 7 in Schedule 14 to the Accounts. Environmental & Pollution Control: Your Company on an ongoing basis is monitoring environment and pollution parameters at its plant at Sanghinagar. The Company has adopted several measures like smoke precipitators, effluent treatment plants, planting of trees etc., to keep the environment healthy, a matter of global concern now. The actual values of parameters achieved by the plant are substantially better than those specified by the pollution control authorities. Your Company is determined to maintain and improve these parameters in the years to come. Industrial Relations: The industrial relations continued to be cordial throughout the year. Your Directors wish to place on record their appreciation for the excellent team work with which the workers and officers of the company at all levels have contributed individuality and collectively to the impressive performance of the Company. Acknowledgements: Your Directors would like to thank the shareholders, customers, suppliers, financial institutions and banks, State and Central Government Agencies for the support they have given to the Company and confidence which they have reposed in its management. On behalf of the Board of Directors Chairman Hyderbad, 29th August, 2009 |