DIRECTORS' REPORT TO THE MEMBERS, Company's philosophy on Code of Governance your Directors have pleasure in presenting 34th Annual Report together with the Audited Accounts for the year ended 3181 March, 2015 DIVIDEND Your Directors are not declaring any dividend as the Company has incurred loss during the financial year. REVIEW OF OPERATIONS: During the financial year under review, the company has achieved a turnover of Rs. 3971.26 lakhs against Rs.3619.26 in the previous 9 months period. The company has incurred a loss of Rs. 505.74 Lakhs against a loss of Rs.1166.78 Lakhs in the previous period. Due to lack of working capital the company carried out the operations on job work basis during the entire period under review. The Management is taking effective steps to cut the cost and improve production. TEXTILE INDUSTRY Textile is the oldest industry in the country and it is the most labour intensive industry. This sector gives direct employment to 35 million people and indirect employment to 45 million people covering mostly women and rural poor. This industry contributes for the growth of the country in terms of job creation in rural areas, export earnings, besides meeting the basic needs of the people. The capacity of the Industry is much more than the domestic requirements. The fall in exports due to recession in developed countries has resulted in poor price realization from the domestic market. The unprecedented huge price fluctuations of raw materials and demand recession for all Textile products have seriously affected and drove the industry to register huge losses during the year. Nearly 75% to 80% of the textile mills across the country have started incurring losses. In order to bail out the ailing industry the Spinning Mills Associations have approached the Textile Ministry pleading for reliefs. RBI relaxed conditions to avoid Textile units from being classified as NPAS by opting for debt restructuring. Moratorium on payment of principal and interest on term loans for a period of two years. Sanction of working capital term loan representing the uncovered portion in the cash credit loan account and Interest relief. With the reliefs that are going to be available from the Banks, now the industry is hoping to turn round. OUTLOOK ON OPPORTUNITIES, RISK AND CONCERN: The fundamental growth drivers of Indian economy remain strong despite the economic turmoil in the world. There would be growing opportunities in the international market as well as domestic market. The consumption is growing in response to growing per capita income, population and strong retail push. With regards to textile industry, there are significant opportunities in the domestic market as more consumers are buying readymade garments and also consumption of the cloth per capita continues to increase due to growth in the economy which is adding to the purchasing power of the Consumers. Macroeconomic factors increase in interest rates are the major risk factors presently for the textile industry. Increase in interest rates will affect the profitability. Since the industry is capital intensive ADEQUACY OF INTERNAL CONTROLS The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded, and protected against loss from unauthorized use of disposition, and that transactions are authorized, recorded, and reported correctly. The internal control system is supplemented by an extensive program of internal audits, review by management and documented policies, guidelines and procedures. The internal control system is designed to ensure that the financial and other records enable for preparing financial statements and other data and for maintaining accountability of assets. The audit Committee comprising independent Directors will review the internal control system on quarterly basis. EXPORTS: During the period under review there were no exports WINDMILL: During the year under review, the 1.8 M.W Wind power Mill has generated 22,65,564 units as against 16,05,427 units in the previous year. GASPOWER PROJECT The 3.2 M.W. Gas based power project of the Company has not generated power during the current year due to non-availability of Gas. FIXEDDEPOSITS: The Company has not accepted any fixed Deposits during the year. INSURANCE: The properties of the Company including its building, plant and machinery and stocks have been adequately insured. CORPORATEGOVERNANCE: The Company is in conformity with the code of Corporate Governance enunciated in clause 49of the Listing agreement with Stock Exchanges. A separate report on Corporate Governance is annexed hereto and form part of Directors' Report together with a certificate from the Auditors of the Company confirming compliance of the Conditions of Corporate Governance. DIRECTORSRESPONSIBILITY STATEMENT: Pursuant to section 134(5) of the Companies Act,2013,your Director's Confirm that: i) In the preparation of the annual accounts, the applicable accounting standards have been followed: ii) Such accounting policies have been selected 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 statement of affairs of the Company at the end of the financial year and of the loss of the Company for that year iii) Proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities: iv) The annual accounts have been prepared on a going concern basis. v) The directors had laid down internal financial control to be followed by the company and that such internal financial controls are adequate and were operating effectively. vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. DIRECTORS: 1) Mr. D.Sivayya, appointed as a director in the Annual General Meeting held on 29th September, 2014. 2) Mr.V,B.Bajaj appointed as a Director in the Annual General Meeting held on 29th September, 2014. 3) Mr.D Venkata Ratnam Director resigned as Director of the company with effect from 09.03.2015 4) Mrs. Ratnakumari Cherukuri has been appointed as additional director w.e.f. 25th March, 2015 STATUTORY AUDITORS: M/s. P. Srinivasan & Co., Chartered Accountants, the Statutory Auditors of the Company have been appointed as statutory auditors for a period of three years upto the conclusion of 36* AGM subject to ratification of Members at every AGM.As per the provisions of companies Act, 2013, it is proposed to ratify their appointment as auditors for the current year commencing from the conclusion of ensuing AGM till the conclusion of next AGM. CONSERVATION OF ENERGY: Conservation of energy, Technology Absorption & Foreign exchange outgo and earnings and information pursuant to Section217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 are annexed hereto and form part of this report PARTICULARS OF EMPLOYEES: In terms of sub section (2A) of section 217 of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules 1975 as amended, the Company has No employee drawing salary exceeding Rs. 24.00 Lakhs per annum or Rs.2.00 Lakhs per month during the year under review. HUMAN RELATIONS: During the period under review the industrial relations continued to be cordial at all the units. REFERENCETO BIFR: As required under the Sick industrial companies (special provisions) Act, 1985 the Company has made a reference to BIFR under Section 15(1) of SICA, the reference is registered as Case No. 56/2014. ACKNOWLEDGEMENT: Your Directors take this opportunity to offer their sincere thanks for continued assistance and cooperation extended to the Company by various departments of the Central and State Governments, Government Agencies, Financial Institutions, Banks, and other statutory authorities. Your Directors also take this opportunity to offer their sincere thanks to shareholders, customers, creditors and other related organizations, for their continued support and Cooperation that have helped in the Company's growth. Your Directors also wish to thank the employees at all levels for the cooperation extended by them in achieving the results. As the company has proposed a ONE TIME SETTLEMENT (OTS) to all the secured creditors which is being considered by them, no interest provision is made in the Accounts. For and behalf of the Board of Directors OK. RAO Executive Vice Chairman Place: Hyderabad Date: 13.08.2015 |