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Board of Directors
Shri Arunkumar Biyani - Executive ChairmanShri Ajay D. Biyani - Managing DirectorShri Anil D. Biyani - Executive DirectorShri Girdharlal S. Daga - Independent DirectorShri Rajendra Prasad Khator - Independent DirectorShri Ashok Kumar Damani - Independent Director
Company Secretary
Shri Abhishek Shrivastava
Auditors
M/s. A. J. Baliya & AssociatesChartered AccountantsMumbai
Bankers
Bank of Baroda
1. Mumbai Main Branch, Mumbai 400 023
2. Daman Branch Nani Daman (U.T.) 396 210
3. Silvassa Branch Dadra & Nagar Haveli (U.T.) 396 310
4. Mandarwaja Branch Surat (Gujarat)
Registered Office
A1/202, Centre Point, 243- A,N.M. Joshi Marg, Lower Parel (East), Mumbai 400013
Plant Location
Plot No. 77 to 80, 89 to 91Dabhel Industrial Co-op. Society Ltd.Nani Daman, (Union Territory) 396 210
Survey No. 265/8/2, Dadra, SilvassaDadra & Nagar Haveli (U.T.) 396 310
Registrar & Share Transfer Agent
M/s Intime Spectrum Registry LimitedC-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (W), Mumbai 400 078.Ph. 022 2596 3838 Fax : 022 2594 6969Email : [email protected]
Contents Page
Notice 2
Directors' Report 6
Report on Corporate 9Governance
Auditors' Report 15
Balance Sheet 18
Profit and Loss Account 19
Schedule forming part of 20the Balance Sheet
Schedules annexed to and 23forming part of the Profit and Loss Account
Cash Flow Statement 30
Attendance Slip and Proxy Form 32
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NOTICE TO THE MEMBERS
Notice is hereby given that the Eighteenth Annual General Meeting of the Company will be held on th
Thursday the 24 August, 2006 at 4.30 p.m. at Registered office of the Company at A1/202, Centre Point, 243- A, N.M. Joshi Marg, Lower Parel (East), Mumbai 400013 to transact the following business:
Ordinary Business:
1. To receive, consider and adopt audited Profit & Loss Account, for the year ended March 31, 2006 and the Balance Sheet as on that date together with the Reports of the Directors and Auditors thereon.
2. To declare dividend on equity shares for the financial year 2005-06.
3. To appoint a Director in place of Shri Arunkumar Biyani, who retires by rotation and being eligible, offers himself for reappointment.
4. To appoint a Director in place of Shri Rajendra Prasad Khator, who retires by rotation and being eligible, offers himself for reappointment.
5. To appoint auditors and fix their remuneration.
Special Business:
6. To consider and if thought fit, to pass with or without modification(S), the following resolution as Special Resolution:
“RESOLVED THAT in accordance with the provision of Section of Sections 16, 31 and 94 and other applicable provisions, if any, of the Companies Act, 1956, consent of the members of the Company be and is hereby accorded to the Board of Directors to increase the Authorized share capital of the Company from Rs. 5,00,00,000/- (Rupees Five Cores only) divided into 50,00,000 Equity shares of Rs. 10/- (Ten Only) each to Rs. 15,00,00,000/- (Rupees Fifteen Cores only) divided into 1,50,00,000 (One Crore Fifty Lacs Only) Equity shares of Rs. 10/- (Rupees Ten Only) each.
FURTHER RESOLVED THAT consent of the Company be and is hereby accorded to the Board of Directors to alter the Capital clause in the Memorandum of Association and Articles of Association of the Company for the purpose of giving effect to increase of the Authorized Share Capital of the Company.
FURTHER RESOLVED THAT Clause V of the Memorandum of Association of the Company be altered by substituting in its place and stead the following the new Clause V:
V.The Authorized capital of the Company is Rupees 15,00,00,000/- (Fifteen Crores only) divided into 1,50,00,000 (one Crore Fifty Lacs) Equity Shares of Rs. 10/- (Ten only) each.
FURTHER RESOLVED THAT the existing Article 3 of the Articles of Association of the Company be altered by substituting in its place and stead the following the new Article 3: The Authorised share capital of the Company is Rs. 15,00,00,000/- (Rupees Fifteen Crores) divided into 1,50,00,000 (One Crore fifty Lacs) Equity Shares of Rs. 10/- (Rupees Ten) each.
FURTHER RESOLVED THAT the Board of Directors of the company be and is hereby authorized to do all such acts, deeds, matters, things and execute all such documents, instruments and writings as may be requited in said connection and to delegate all or any of the powers therein vested in them to any duly constituted committee of directors or any director(s) to give effect to this resolution.”
7. Preferential Allotment of Equity Shares:
To consider and if thought fit, to pass with or without modification (S), the following resolution as Special Resolution:
“RESOLVED THAT in accordance with the provisions of Section 81(1A) and all other applicable provisions, if any, of the Companies Act, 1956(“the Act”) and the Guidelines of Securities and Exchange Board of India or any statutory modification(s) or re-enactment of the Act or the Guidelines, the provisions of any other applicable laws and regulations, the Articles of Association of the Company and Listing Agreements entered into by the Company with the Stock Exchanges where the securities of the Company are listed and subject
2
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to any applicable approval(s), permission(s) and sanction(s) of any authorities and subject to any condition(s) and modification(s) as may be prescribed or imposed by such authorities while granting such approval(s), permission(s) and sanction(s) and which may be agreed to and accepted by the Board of Directors of the Company (hereinafter referred to as the "Board), the consent of the Company be and is hereby accorded to the Board to issue, offer and allot as many equity shares as may be decided by the Board as it deems fit in one or more trenches, not exceeding 904300 equity shares of Rs. 10/- each at premium not less than Rs. 15/- per share and subject to such terms and conditions as the Board may deem fit to any person or persons, as may be decided by the Board whether such person or persons is/are existing member or members of the company or not”.
"RESOLVED FURTHER that the Securities to be so created, offered, issued and allotted shall be subject to the provisions of the Memorandum and Article of Association of the Company, and the new Equity Shares shall rank pari passu in all respect with the existing Equity Shares of the Company”.
RESOLVED FURTHER THAT the Board be and is hereby authorized to take necessary steps for listing of the Equity Shares allotted on the Stock Exchanges where the securities of the Company are listed as per the provisions of the Listing Agreements with the Stock Exchanges concerned, the Guidelines and other applicable laws and regulations.
RESOLVED FURTHER THAT for the purpose of giving effect to this resolution, the Board be and is hereby authorised to do all such acts, deeds, matters and things as it may, in its absolute discretion, deem necessary, expedient or proper and to settle any question, difficulties or doubts that may arise in this regard at any stage including at the time of listing of the Equity Shares without requiring the Board to secure any further consent or approval of the Members of the Company to the end and intent that they shall be deemed to have given their approval thereto expressly by the authority of this resolution.”
“RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or any of its power to any if its Director(s) or Committee of Directors to give effect to the aforesaid resolutions.”
“RESOLVED FURTHER THAT the Board be and is hereby authorized to execute all such arrangements, agreements, memorandum, documents, etc., with intermediaries.
“RESOLVED FURTHER THAT the relevant date for the purpose of issue of the shares in accordance with the th th th th
SEBI Guidelines is 25 July, 2006 being the 30 day prior to 24 August, 2006, i.e. 30 day prior to the date on which the meeting of the general body of shares holders is to be held, in terms of section 81(1A) of the Companies Act, 1956 to consider the proposed issue.
By Order of the Board
Abhishek ShrivastavaCompany Secretary
Mumbai :
June 26, 2006
Note :
(a) A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER.
(b) The Register of Members and Transfer Book of the Company will remain close from Friday, 18th August 2006 to Thursday, 24th August 2006 (both days inclusive).
(c) The dividend on equity shares, if declared, will be payable on or after 24th August 2006, to those members whose names stand on the Register of Members of the Company on the 24th August 2006.
(d) Pursuant to section 205A of the Companies Act, 1956, all unclaimed / Unpaid dividends up to the financial year 1998-99 have been transferred to the Investor Education and Protection Fund, established under section 205C(1) of the Companies Act, 1956.
(e) Members, who have not yet encashed their dividend and demand Draft(s) for the financial year ended 31.03.2004 & 31.03.05, are requested to make their claims to the Company, without any delay.
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(f) Members are requested to intimate to the Company queries, if any, regarding the accounts/notices at least ten days before the Annual General Meeting to enable the management to keep the information ready at the meeting.
ITEM No. 6 & 7
The present Authorized Share Capital of the Company is Rs. 5,00,00,000/- (Rupees Five Crores) divided into 50,00,000 (Fifty Lakhs) Equity Shares of Rs. 10/- (Ten Only) each. The paid up equity share capital of the Company is Rs. 3,09,57,000/- (Rupees Three Crores Nine Lakhs Fifty Seven Thousand Only) divided into 3095700 (Thirty Lakhs Ninety Five Thousand Seven Hundred Only) Equity Shares of Rs 10/- (Ten Only) each. In view of the expansion programme taken up by the company additional capital will have to be raised. Hence Authorised capital is being raised
Consequent to the increase in Authorized Capital of the company, it is necessary to alter the present Clause V of the Memorandum of Association and Article 3 of the Article of Association by substituting the same with the amended Clause V and Article 3 as given in the respective Special Resolution.
Copy of the Memorandum of Association and Article of Association of the Company will be available for inspection at the general meeting and is also available for inspection on all working days between 10.30 a.m. to 1.30 p.m. at the Registered Office of the Company.
The Directors of the Company recommend the passing of the aforeside Resolutions.
ITEM No. 7
The company is in the process of expansion of its activities. The funds to be raised from the proposed issue of equity shares pursuant to this resolution will be utilized for part funding of the capital expenditure for setting up of new spinning Unit at Dadra & Nagar Haveli (U.T.). Your board in its meeting held on 10th March 2006, subject to the approval by the shareholders in general meeting & receipt of requisite statutory approvals including that of reserve bank of India (RBI) where ever applicable, negotiations and executions of appropriate documentations by the parties and fulfillment of the conditions mentioned therein, has proposed to offer for subscription by way of preferential allotment upto 9,04,300 equity shares of RS. 10/- each for cash at a price not less than of Rs. 25/- per shares (i.e. premium of Rs. 15/- per share) or such other amount as per SEBI Guidelines to domestic investors and / or its affiliates including some relatives of promoters/directors or their associates. The equity shares allotted shall rank pari passu with the existing shares of the company in all respect.
The special resolution has been proposed under the provisions of section 81(1A) of the Companies Act, 1956 in view of the facts that the shares will be offered to persons who may or may not be the existing members.
A copy of the certificate M/S A. J. Baliya & Associates, Chartered Accountants, Mumbai the statutory Auditors of the Company, certifying that the issue of the shares and shares arising is being made in accordance with the requirements of the SEBI Guidelines shall be available for inspection of member at the registered office of the company between 2.00 p. m. and 4.00 p.m. on any working till the date of conclusion of the Extraordinary General Meeting and will be placed before the Shareholders at the Extraordinary General Meeting.
The Board of Director believes the issue of Securities is in the interest of the Company and therefore recommends the resolution for your approval.
Disclosures required to be made in the Explanatory Statement pursuant to the provisions of the SEBI (Disclosures and Investors Protection) Guidelines, 2000(the SEBI Guidelines) are set out below:
1. The object of the issue through preferential offer:
As mentioned above, the funds to be raised from the preferential issue of equity shares pursuant to this resolution will be utilized for part funding of the capital expenditure setting up spinning unit at Dadra & Nagar Haveli The Total cost of Project is 60 Crores. It is proposed to be financed by way of
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Term Loan of Rs. 40 Crores. Promoters contribution of Rs. 20 Crores would by way of Long Term Internal accruals & Issue of Equity shares. Thus the company proposes to issue 904300 equity shares of Rs. 10 /- each at premium of Rs. 15/- or at such higher premium as may be permissible under the SEBI Guidelines
2. Intention of the Promoters / Directors / subscribers to subscribed the offer:
The Promoters, Directors and Key management personnel are not subscribing to the preferential issue.
Identity of the Proposed Allotees:
Name of the Shareholders
Identity No of shares
held
Pre IssueProposed to be
Subscribed After Allotment
% of holding No. of shares Total No of shares held
% of holding
Sunil S Biyani Person Acting in Concert 100000 100000 2.50
Person Acting 160000 160000 4.00in Concert
Savitridevi S Biyani -do- 100000 100000 2.50
Aqua Steelwater Purity Sys P Ltd. Non Promoter 34000 34000 0.85
Rajveda Properties Pvt Ltd Non Promoter 24000 24000 0.60
Non Promoter 60000 60000 1.50
Total 7350 904300 911650
Suam Overseas Pvt Ltd
Taradevi Birla Non Promoter 30000 30000 0.75
Rajesh Birla -do- 30000 30000 0.75
Seema Ladha -do- 20000 20000 0.50
Meena Kabra -do- 20000 20000 0.50
S G Kabra -do- 20000 20000 0.50
Sitaram Agrawal -do- 1300 0.03 20000 21300 0.53
Minish Patel -do- 10000 10000 0.25
Sachin Dhoot -do- 20000 20000 0.50
Sunil Jain -do- 5000 5000 0.12
Shrikant Ladha -do- 10000 10000 0.25
B C Maheshwary -do- 3000 0.07 10000 13000 0.33
Ketan Patel -do- 1500 0.04 1300 2800 0.07
Giriraj Ladha -do- 20000 20000 0.50
Kamlesh Patel -do- 10000 10000 0.25
Pushpa Maru -do- 50000 50000 1.25
Kusian Ind Ltd.
None of the Directors of the Company is in any way concerned or interested in the said resolution save and except to the extent share allotted to persons acting in concert as shown here in above.
By Order of the Board
Abhishek ShrivastavaCompany Secretary
Mumbai :
June 26, 2006
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Directors' Report
To the Members,
Your Directors have pleasure in presenting the Eighteenth Annual Report together with audited statement of accounts for the year ended 31st March, 2006.
1. FINANCIAL RESULTS
(Rs. In Lakhs)
Particulars 2005-06 2004-05
Sales & Other income 5962.47 5232.58
Profit before Depreciation & Tax 330.49 190.89
Depreciation 50.58 35.45
Profit before Tax 279.91 145.45
Provision for Taxation including Deferred Taxes 87.17 53.25
Prior year Tax Adjustments -1.21 12.64
Profit after Tax 192.74 92.20
Profit brought forward from previous year 275.34 240.78
Profit available for appropriation 469.30 320.34
APPROPRIATION
Transfer to General Reserve 120.00 10.00
Proposed Dividend 30.96 30.96
Corporate Dividend Tax 4.34 4.05
Profit carried to Balance Sheet 314.00 275.34
2. DIVIDEND
Your Board recommends a dividend on Equity Shares of the Company @ 10% (Rs. 1/- per share) for the financial year ended 31st March, 2006.
3. EXPANSION
It may be recalled that the company has taken up expansion programme to cater to the upsurge in demand from domestic and overseas customers. The Company is setting up Spinning Plant of 14400 Spindles at Dadra & Nagar Haveli (U.T) with state of arts machines to manufacture value added yarn. It would install additional 20000 spindles later on. The Total Cost of Project would be around Rs. 6000 Lacs which would be financed by way of long-term loan and internal accruals of the Company. The Company has already acquired the land at Silvassa. Construction of factory building is expected to be completed by October 2006. Plant & Machinery is expected to be erected by February/March 2007. The Plant is expected to become operational in the financial year 2007-08.
4. DIRECTORS
Shri Arunkumar Biyani and Shri Rajendra Prasad Khator shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible, offers themselves for reappointment. Both the Directors have confirmed that they are not disqualified in terms of section 274(1)(g) of the Companies Act, 1956 from being appointed as Directors of the Company.
5. AUDITORS
M/s A. J. Baliya & Associates, Chartered Accountants, retires at the conclusion of the forthcoming annual general meeting and have given their consent for reappointment.
6. INDUSTRIAL RELATION
The management places on record its appreciation for the excellent performance put in by the employees of all cadres during the year under review. The company continues to enjoy a cordial and harmonious
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relationship with its employees and the management believes that it is this harmonious relationship that plays a pivotal role in the overall growth and development of the company.
7. INSURANCE
The properties of the Company including its building, plant and machinery and stocks wherever necessary and to the extent required have been adequately insured.
8. PARTICULARS OF EMPLOYEES
None of the employees of the Company has received remuneration exceeding the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975.
9. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGSAND OUTGO
The information pursuant to section 217(i)(e) of the Companies Act, 1956 read with the Companies (disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are annexed.
10. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to section 217(2AA) of the Companies (Amendment) Act, 2000, the Directors confirm that:
i. in the preparation of the annual accounts, the applicable accounting standard had been followed.
ii. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state affairs of the Company as at March 31, 2006 and of the Profit & Loss Account for the year ended March 31, 2006.
iii. proper and sufficient care has been taken 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 annual accounts have been prepared on a going concern basis.
11. DELISTING OF SECURITIES FROM STOCK EXCHANGE
At Present Equity shares of the Company are listed at The Sock Exchange, Mumbai (BSE) and The Calcutta Stock Exchange Association Ltd. The Company has applied for Delisting of its equity shares from the Calcutta Stock Exchange on 29th March, 2004 and application is under process. However, equity shares of the Company will continue to remain listed on The Stock Exchange, Mumbai.
12. CORPORATE GOVERNANCE REPORT
A Report on Corporate Governance along with a Certificate from the Auditors of the Company regarding compliance of the conditions of Corporate Governance Code is annexed hereto.
13. ACKNOWLEDGE
The Board acknowledges with appreciation the efforts put in by its employees during the year under review. The Company is grateful to its customers and bankers for their support and understanding and the shareholders for their faith and confidence.
For and on behalf of the Board
ARUNKUMAR BIYANIChairman
Place: Mumbai
Date: June 14, 2006
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ANNEXURE TO DIRECTORS' REPORT
CONSERVATION OF ENERGY
Total energy consumption and energy consumption per unit of production
2005-06 2004-05
[A] Power and fuel consumption
1. Electricity
A) Purchased unit 1754852 1290300
Amount (Rs.'000) 4691.65 3376.69
Rate/Unit (Rs.) 2.67 2.62
B) Own Generation
i) Through Diesel Generator Unit 89400 98668
ii) Unit/Liter of Diesel Oil 4 4
iii) Fuel cost / unit (Rs.) 8.05 6.21
[B] Electricity units Consumption in
Production of Yarn per KG. (Unit/Kg) 0.37 0.41
Production of Fabrics Per Mtr. (Unit/Mtr) 0.50
RESEARCH AND DEVELOPMENT
a. Specific areas in which R & D was carried out by the CompanyThe Company is actively engaged in product upgradation design development.
b. Benefits derived as a result of the above R & DImproved product designs resulted in higher value added products and better realisations.
c. Future plan of actionEmphasis on the above activities will be on going exercise.
d. Expenditure on R & DSince the expenditure incurred on research and development activities were not substantial, no separate account for the same were being maintained.
TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATIONSince the Company's products are being developed by an in-house R & D team, no further information
under this head is required to be given.
FOREIGN EXCHANGE EARNINGS AND OUTGO
a. Initiatives taken to increase exports and exports plansYour Company has been in constant touch with various customers around the world. We do hope that our regular follow up will result in furture orders from other countries also.
b. Development of new export markets for synthetic yarn.Your Company is consistently exploring possibilities of exporting its products to new markets. This is an on going process.
c. Total Foreign Exchange Earnings and outgo (Rs. In Lacs)
Particulars 2005-06 2004-05
Foreign Exchange outgo (used) 1.34 3.29
Earned (FOB Value of Export goods) 35.38 10.28
For and on behalf of the Board
ARUNKUMAR BIYANIChairman
Place: Mumbai
Date: June 14, 2006
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REPORT ON CORPORATE GOVERNANCE
(Annexure to the Eighteenth Directors' Report for the financial year 2005-06)
The following is a report on Corporate Governance as implemented by your Company.
1. PHILOSOPHY ON CORPORATE GOVERNANCE.
The Company's philosophy on Corporate Governance is to conduct its affairs in a manner, which is transparent, clear and evident to those having dealing with or having a stake in the company, namely shareholders, lenders, creditors and employees. The company's philosophy on Corporate Governance is thus concerned with the ethics, values and morals of the Company and its Directors, who are expected to act in the best interest of the Company and remain accountable to shareholders and other beneficiaries for their action.
2. BOARD OF DIRECTORS
(i)Composition
The Board of Damodar Threads Ltd. is comprised of 6 Directors of which three are Executive Directors and three are Independent Non-Executive Directors. None of the Directors of the Company is a member of more than 10 Committees or Chairman of more than 5 Committees (as specified in clause 49 of the Listing Agreement). The Board is primarily responsible for the overall management of Company's business. The composition of Board is as under:
SL. No.
Name of Director
Nature of Directorship
Number of Directorship of
other Public Companies
Number of Chairmanship
in Board Committees
Number of Membership
in Board Committees
1. Shri Arunkumar Biyani Executive Chairman Nil 1 Nil
2. Shri Ajay D. Biyani Managing Director Nil Nil Nil
3. Shri Anil D. Biyani Executive Director Nil Nil Nil
4. Shri Girdharlal Independent Non-S. Daga Executive Director Nil 3 2
5. Shri Rajendra Independent Non-Prasad Khator Executive Director Nil 2 1
6. Shri Ashok Independent Non-Kumar Damani Executive Director Nil 2 Nil
(ii) Brief Resume of Directors seeking appointments/reappointments
Shri Arunkumar Biyani, aged 50 years, is a Commerce Graduate and having around 28 years experience in the field of textile industry. Shri Arunkumar Biyani is the key person in setting up Company's unit and Chairman of the Company. He is also on the Board of Panna Yarn Private Limited.
Shri Rajendra Prasad Khator, aged 66 years, is B.A. (Hons.) in Economics, having 50 years experience of various industries. He was the Precedent of Bombay Oxygen Corporation Limited, Mumbai since 1985 and Joint Managing Director for 5 years from 25 th September, 1998.
He was President of All India Gases Manufacturers' Association (AIIGMA) for the year 1989 90 and 2002-03. He has been unanimously re-elected as President of AIIGMA for further two years i.e. 2004-2006. Shri Khator is a member of Power Committee of Federation of Indian Chambers of Commerce and Industry (FICCI), New Delhi, for the year 2003-04.
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(iii) Board Meetings
Sl.No.
Name of the DirectorsNo. of Board Meetings Held during the period
No. of Board Meeting
Attended
Last AGM Attended
1. Shri Ajaykumar Biyani 5 5 Yes
2. Shri Arunkumar Biyani 5 5 Yes
3. Shri Anilkumar Biyani 5 5 Yes
4. Shri Girdharlal S. Daga 5 5 Yes
5. Shri Rajendra Prasad Khator 5 5 Yes
6. Shri Ashok Kumar Damani 5 5 Yes
During the Financial year 2005-06 Five Board Meetings were held on June 23, 2005, July 30, 2005, October 31, 2005, January 19, 2006, and March 10, 2006.
3. BOARD COMMITTEES
For effective and efficient functioning of the Company the Board has formed the following Committees:
Audit Committee
Shareholders / Investors' Grievance Committee
Remuneration Committee
AUDIT COMMITTEE
The Audit Committee consists wholly of Independent Directors having knowledge of Finance, Accounts and Company Law. At present, the committee comprises of the following independent Directors:
1. Shri Girdharlal S. Daga,
2. Shri Rajendra Prasad Khator; and
3. Shri Ashok Kumar Damani.
Shri Girdharlal S. Daga, Chartered Accountant, who has good financial and accounting knowledge, is the Chairman of the Committee.
During the year under review, the committee met three times on June 23, 2005, October 31, 2005 and March 10, 2006.
The role and terms of reference of the Audit Committee covers the following areas mentioned under clause 49 of the Listing Agreement:
a) Review of the Company's financial reporting process and disclosure of its financial information.
b) Recommending the appointment and removal of Statutory Auditors, fixation of Audit fee and also approve payment for any other services.
c) Reviewing with management the annual financial statement before submission to the Board.
d) Review the adequacy of internal control systems with the Management, Statutory and Internal Auditors.
e) Review the Company's financial and risk management policies.
SHAREHOLDER'S / INVESTOR'S GRIEVANCE COMMITTEE:
The Shareholders' Investors' Grievance Committee comprises of Shri Girdharlal S. Daga and Shri Arunkumar Biyani, Directors of the Company. Shri Girdharlal S. Daga, Independent Non-Executive Director, is the Chairman of the Committee. The Committee looks into the redressing of shareholders and investor complaints like transfer of shares, non-receipt of Balance sheet, non-receipt of declared dividend etc.
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REMUNERATION COMMITTEE
The Remuneration Committee consists of three Independent Directors. The Committee comprises of Shri Rajendra Prasad Khator, Shri Girdharlal S. Daga and Shri Ashok Kumar Damani, all Independent Non Executive Directors of the Company. Shri Rajendra Prasad Khator is the Chairman of the Committee.
The remuneration Committee is primarily responsible for implementing the remuneration policy of the Company.
The Remuneration policy of the Company for managerial personnel is primarily based on the following:-
· to address the policy on remuneration packages for Executive Directors and their Service Contracts;
· to prepare performance link Remuneration package and retiral benefits;
· to Track record, potentials and performance of individual managers; and
· to prepare policy for training, development, job rotation and delegation as important tools for optimum utilization of available man power resources.
· to formalize guidelines for out sourcing skills and capabilities for new opportunities from the External competitive environment.
The Board of Directors will decide remuneration to non-executive Directors. The company is not paying any commission to its Non-Executive Directors.
Directors' Remuneration & Sitting Fee
a) The details of remuneration paid to Directors during the Financial Year 2005-06 as approved by the Board and shareholders:
Sl. No.
Name of Directors Salary Provident Fund
Perquisites & Allowances
Total
1. Shri Arunkumar Biyani 840000 9360 146702 996062
2. Shri Ajay D. Biyani 840000 9360 - 849360
3. Shri Anil D. Biyani 840000 9360 145025 994385
TOTAL 2520000 28080 291727 2839807
b) Details of payment for sitting fee during the Period are as under:
Sl. No.
Name of Directors Sitting fees
1. Shri Girdharlal S. Daga 5000
2. Shri Rajendra Prasad Khator 5000
3. Shri Ashok Kumar Damani 5000
4. DISCLOSURES
Related Party Transactions
The Company has entered into transaction with the related parties that may not have any potential conflict with the interests of the Company. The details of such transactions are already given in Para 10 to the notes of Accounts in Schedule P.
Compliances by the Company
During the financial year 2005-06, no penalties or strictures have been imposed on the Company by the Stock Exchanges or SEBI for any matter. The Company has fairly complied with the requirements of the Stock Exchanges and SEBI.
5. MEANS OF COMMUNICATION
· Full annual report is sent to shareholders every year at their registered address regularly.
· Company has been regularly sending quarterly/half-yearly/annual financial results to Stock Exchanges. These results are also sent to those shareholders who request for the same.
· The quarterly results are published regularly in an English Newspaper having circulation all over India and in a Marathi Newspaper having circulation in Mumbai.
· The quarterly financial results and Annual Report are also sent to Financial Institutions / Analysts / Institutional Investors on demand.
6. SHAREHOLDERS' MEETINGS
Details of the location of the last three AGMs and the details of the resolutions passed or to be passed by Postal Ballot.
a. Particulars of last three years Annual General Meetings
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AGM Year Venue Date Time th
17 2005 Maheshwary Bhavan, 603, Chira Bazar (J S Road), Mumbai 400 002 02/09/2005 4.30 P.M.
th16 2004 Maheshwary Bhavan, 603, Chira Bazar (J S Road), Mumbai 400 002 09/09/2004 4.30 P.M.
th15 2003 Maheshwary Bhavan, 603, Chira Bazar
(J S Road), Mumbai 400 002 13/09/2003 11.30 A.M.
b. No resolution requiring Postal Ballot as recommended under clause 49 of the Listing Agreement have been placed for shareholders' approval at the meeting.
7. GENERAL SHAREHOLDER INFORMATION
• Annual General Meeting
Annual General meeting for the year 2006- Date and time : Thursday, 24th August, 2006 - at 4.30 P.M.- Place : A1/202, Centre Point, 243- A, N.M. Joshi Marg, Lower Parel (East), Mumbai 400013
• Financial CalendarQuarterly Results Date of Reporting
Quarter ended June 30, 2005 : 30th July 2005
Quarter ended September 30, 2005 : 31st October 2005
Quarter ended December, 31, 2005 : 19th January 2006
Quarter and year ended 31st March 2006 : 14th June 2006
• Dates of Book closure : 18/08/2006 to 24/08/2006 (Both days inclusive)
• Listing on Stock Exchange:
The Equity Shares of the company are listed at following two stock exchanges:
a. The Stock Exchange, Mumbai (BSE)b. Calcutta Stock Exchange Association Ltd. (CSE)
The Annual Listing Fee for the year 2005-2006 has been paid to the BSE. The Company has applied to CSE for delisting of its shares, which is under process.
• Scrip Code at the Stock Exchange, Mumbai 521220
• Market price data :
Monthly high and low quotation of shares traded on The Stock Exchange, Mumbai during the Financial Year 2005-06:
13
Months High (Rs.) Low (Rs.)
April, 2005 25.50 18.75
May, 2005 42.70 21.75
June, 2005 34.90 28.00
July, 2005 41.50 27.05
August, 2005 50.10 28.20
September, 2005 44.35 30.00
October, 2005 34.25 23.00
November, 2005 30.80 25.00
December, 2005 28.55 24.55
January, 2006 35.10 26.10
February, 2006 30.80 26.50
March, 2006 39.00 26.05
• Registrars & Transfer Agents
Intime Spectrum Registry Ltd., C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup (W) Mumbai 400 078.Ph : 022 2596 3838Fax : 022 2594 6969email: [email protected]
• Share Transfer System
A shareholder's request is normally attended and reply is sent in 10-20 days time and the certificates after transfer of shares are returned within one-month period except in the cases that are constrained for technical reasons. Shares are being transferred and demat option letter in their respect are dispatched within 15 days from the date of receipt, so long as the documents have been clear in all respects.
The Board of Directors has delegated the power of share transfer to the M/s Intime Spectrum Registry Ltd., Registrar and Share Transfer Agent of the Company. Share Transfer Agent attends to share transfer formalities once in a fortnight.
• Compulsory Dematerialised Trading
As the shareholders are aware the Securities and Exchange Board of India (SEBI), has included equity shares of the company for compulsory dematerialised trading for all investors with effect from 24th July, 2000. The Company has already entered into agreements with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) to enable members of the company to select the depository of their choice for holding and dealing in shares in electronic form. The shareholders may also note that around 42.44% holding of the company has already been dematerialised. The shareholders are requested to make use of such facility for maximizing their convenience in the dealing of Company's shares. The ISIN (International Securities Identification Number) of the Company is INE 497D01014.
14
• Distribution Of Shareholders
Distribution of shareholding as on 31st March, 2006
Slab of sharesNumber of
ShareholdersPercentage of shareholders
Number of shares
Percentage of shareholding
1 - 500 4291 90.815 601247 19.422
501 - 1000 219 4.635 162820 5.260
1001 - 2000 110 2.328 163698 5.288
2001 - 3000 20 0.4230 50376 1.627
3001 - 4000 21 0.4440 76160 2.460
4001 - 5000 8 0.1690 37354 1.207
5001 - 10000 18 0.3810 134305 4.338
Above 10000 38 0.8040 1869740 60.398
4725 100 3095700 100.000
Shareholding Pattern as on 31st March, 2006
Sl. No
Category of ShareholdersNo. of Shares
held%age of
Shareholding
1. Promoters, Directors & Relatives 1561868 50.45
2. Associate Body Corporates 160400 5.18
3. Banks and Financial Institutions 700 0.02
4. FIIs -- --
5. NRIs/OCBs 1586 0.05
6. Private Corporate Bodies 241924 7.82
7. Indian Public 1117020 36.08
8. Clearing Members 12202 0.39
TOTAL 3095700 100.00
• Plant Location : 77-80, Dabhel Indl Co-op Society,
Dabhel, Nani Daman - 396210
Ph. 0260-2243386 Fax : 0260-2244628
• Compliance Officer : Shri Abhishek Shrivastava
Ph: 0260-2243386 Fax : 0260-2244628
email: [email protected]
INVESTOR RELATIONS
All complaints received from shareholders have been cleared within the financial year. The complaints are
generally replied to within 10 days from their lodgments with the Company.
For and on behalf of the Board
ARUNKUMAR BIYANIChairman
Place: Mumbai
Date: June 14, 2006
AUDITOR'S REPORT
To the Members of DAMODAR THREADS LTD.
We have audited the attached Balance Sheet of Damodar Threads Limited as at March 31, 2006 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.
1. We conducted our audit in accordance with auditing standards generally accepted in India Those Standards require that we-plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
2. As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditors Report)(Amendment) Order, 2004 (together the Order') issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we set out in the Annexure a statement on the matters specified in enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.
3. Further to our comments in the Annexure referred to above, we report that :
(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;
(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the hooks of accounts;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;
4 On the basis of written representation received front the director, as on March 31, 2006 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 3 I. 2006 from being appointed as a director in terms of Clause (g) of sub-section (I) of Section 274 of the Companies Act, 1956,
A) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2006
(b) In the case of Profit and Loss Account, of the Profit for the year ended on that date; and
(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.
15
For A.J.BALIYA & ASSOCIATES Chartered Accountant
Place: Mumbai
Date: June 14, 2006
(A. J. Baliya)PartnerMembership No. FCA 35989
ANNEXURE TO AUDITOR'S REPORT
(Referred to in paragraph 2 of our report of even date
(1) (a) The Company has maintained proper record showing full particulars including quantitative details and situation of fixed assets.
(b) As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable having regard to the size of Company and nature of its assets No material discrepancies were noticed on such physical verification.
(c) In our opinion the Company has nol disposed off substantial part of fixed assets during the year and the going concern status of the Company is not affected.
(2) In respect of its inventories :
(a) As explained to us, inventories have been physically verified by the management at regular intervals during the year.
(b) In our opinion and according to the information and explanations given to us, the ' procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) The Company has maintained proper records of inventories As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.
(3) (a) During the year the Company has taken unsecured loans aggregating to Rs.3,33,86,064/- during the from Directors and Rs. 23,70,499/- from a company, covered in the Register maintained under section 301 of the Companies Act, 1956 The maximum outstanding balance against the parties was aggregating to Rs.3,72,25,686/- during the year. The outstanding balance at the end of the year was Rs.3,72,25,686/-.
` (b) The Company has not granted any loan to any party covered in the register maintained under section 301 of the Companies Act. 1956
(c) In our opinion the rate of interest and other terms and condition on which the loan taken from the Directors and Company listed in the Register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the Company.
(d) The Company is regular in repaying the principal amounts of loan as stipulated and has been regular in payment of interest in respect of such loans.
(e) There is no overdue amount of loans taken as referred to in (a)
(4) In our opinion and according lo the information and explanations given lo us, there are adequate internal control procedures commensurate with the size of the Company and the nature its business for the purchase of inventory- fixed assets and also for the sale of goods. During the course of our audit, we have not observed any major weaknesses in internal control.
(5) (a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that transactions that need to be entered into the register maintained under Section 301 of the Companies Act 1956, have been so entered.
(b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act 1956, and exceeding the value of Rupees Five Lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available.
(6) The Company has not accepted any deposits form the public
(7) In our opinion, the internal audit system of the Company is commensurate with its size and nature of its business.
16
(8) We have broadly reviewed the books of account maintained by the Company in respect of manufacture of Synthetic yarn pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 209 ( I ) (d) of the Companies Act, 1 956 and are of the opinion, that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete.
(9) In respect of statutory dues :
(a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Sales-Tax, Wealth Tax, Customs Duty, Excise Duty, Service Tax , Cess and other Statutory Dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March. 2006 for a period of more than six months from the date of becoming payable.
(b) According to the information and explanations given to us, there are no dues in respect of Income-Tax, Sales-Tax, Custom Duty, Wealth-Tax, Excise Duty, Service Tax or Cess outstanding on account of any dispute.
10) The Company has no accumulated losses at the end of the financial year and it has not curred any cash losses in the current and immediately preceding financial year.
11) According to the information and explanations given to us and the records examined by us, Company has not defaulted in repayment of dues to any financial institution or bank.
(12) In our opinion and according and explanation given to no loans and advances have been granted by the Company on the basis o! security by way of pledge of shares, debenture ami other securities.
(13) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order 2003 is not applicable to the Company.
(14) In our opinion and according to the information and explanations given to us , the Company is not dealing in or trading in shares, securities, debentures and other invest mails. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.
(15) According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from banks and financial institutions.
(16) The Company has taken term loan of Rs 71,91,000/- Term loan outstanding at the beginning of the year was Rs Nil. Term Loan outstanding at the end of the year was Rs.58.28,791/-
(17) In our opinion and according to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long term investment and vice-versa.
(18) The Company has not made any preferential allotment of shares during the year.
(19) The Company has not issued any debentures during the year.
(20) The Company has not raised any money by public issue during the year.
(21) In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year, that causes the financial statements to be materially misstated.
17
For A.J.BALIYA & ASSOCIATES Chartered Accountant
Place: Mumbai
Date: June 14, 2006
(A. J. Baliya)PartnerMembership No. FCA 35989
18
BALANCE SHEET AS AT 31ST MARCH 2006
Schedule 2004-05Rs.
2005-06Rs.
(A. J. Baliya)PartnerPLACE : MUMBAIDATED : 14th JUNE, 2006
For A.J.BALIYA & ASSOCIATESChartered Accountant
Managing Director(Ajay D. Biyani)(Arunkumar Biyani)
Chairman
For and On behalf of the Board
A
B
C
D
DEFERRED TAX LIABILITIES (Net)
TOTAL
E
F
G
H
TOTAL
P
a) Gross Block
APPLICATION OF FUNDS :
SHAREHOLDERS FUND :
SOURCES OF FUNDS :
Reserves & Surplus
Share Capital
LOAN FUND :
Unsecured Loan
Secured Loans
FIXED ASSETS :
c) Net Block
b) Less: Depreciation
INVESTMENTS
d)Capital Work-in-progress
CURRENT ASSETS,
LOANS & ADVANCES
(b) Sundry Debtors
(a) Inventories
(d) Loans & Advances
(c) Cash & Bank Balances
& PROVISIONS
(a) Current Liabilities
or adjusted)
(To the extent not written off
Share Issue Expenses
NOTES ON ACCOUNTS
As per our report of even date
MISCELLANEOUS EXPENDITURE
Less : CURRENT LIABILITIES
(b) Provisions
31,835,175
3,529,872
80,934,553
164,617,048
58,269,530
30,957,000
42,681,711
87,846,364
27,195,838
97,686,601
62,554,146
1,329,175
3,047,126
28,305,303
132,781,873
3,517,746
89,226,530
223,272,351
130,528,075
53,738,715
231,182
36,520,581
-
223,272,351
(0)
22,093,992
3,500,269
42,403,754
30,957,000
3,931,219
58,709,869
64,916,669
22,422,391
68,726,697
44,158,857
3,312,324
3,051,341
119,249,219
18,593,723
73,360,754
62,641,088
139,862,725
42,494,278
-
213,220
-
97,155,227
139,862,725
3,860,883
P
M
Schedule2005-06
Rs.
I
J
L
K
N
E
O
Deferred Tax
PROFIT AFTER TAX
Current Provision
As per our report of even date
Transfer to General Reserve
Administrative Expenses
Selling & Distribution Expenses
INCOME :
Other Income
Sales
Materials Cost
EXPENDITURE :
Employees Remuneration
Manufacturing Expenses
Depreciation
Interest
Less: Provision For Tax
PROFIT FOR THE YEAR
Less: Prior Years Tax Adjustments
Fringe Benefit Tax
Balance brought forward
BALANCE AVAILABLE FOR APPROPRIATION
NOTES ON ACCOUNTS
Balance Carried to Balance Sheet
Appropriation
Proposed Dividend
Tax On Dividend
8,877,000
(343,137)
11,808,161
2,792,720
593,454,354
596,247,074
437,349,271
14,167,476
86,990,388
6,662,658
6,219,588
568,255,968
5,058,426
27,991,106
183,000
19,395,648
19,274,243
27,533,854
46,929,502
12,000,000
31,399,630
46,929,502
3,095,700
434,172
(121,405)
2004-05Rs.
-
661,585
522,470,158
787,995 523,258,153
451,597,780 21,916,417
8,659,787
11,411,025
6,634,367
4,949,328
3,544,609
508,713,313
14,544,840
4,663,000
9,220,255
7,956,203
24,077,920
32,034,123
1,000,000
27,533,854
32,034,123
1,264,052
3,095,700
404,569
19
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2006
(A. J. Baliya)PartnerPLACE : MUMBAIDATED : 14th JUNE, 2006
For A.J.BALIYA & ASSOCIATESChartered Accountant
Managing Director(Ajay D. Biyani)(Arunkumar Biyani)
Chairman
For and On behalf of the Board
20
Rs.
2004-05
SCHEDULE - A
SHARE CAPITAL
Authorised :
SCHEDULE - B
RESERVES & SURPLUS :
Add:Transfer
SCHEDULE - C
SECURED LOANS :
Term Loan From Bank of Baroda
Loan from Life Insurance Corporation of India
(Against Keyman Insurance Policies taken on
three Directors)
SCHEDULE - D
UNSECURED LOANS :
Motor Car Loan From ICICI Bank Ltd.
(Secured by Hypothecation of a Motor car)
Motor Car Loan From Sheba Properties Ltd.
50,00,000 Equity Shares of Rs. 10/- each
(Of the above 4,00,000 Equity Shares
each fully paid up
Issued, Subscribed & Paid-up :
30,95,700 Equity Shares of Rs. 10/-
in Profit & Loss Account)
shares by capitalisation of balance
were allotted as fully paid-up Bonus
& personal guarantees of three Directors)
Share Premium
General Reserve
Balance in Profit & Loss Account
Working Capital Loan from Bank of Baroda
(Secured by hypothecation of Stocks, Debtors
(Secured by Hypothecation of Mini Truck (Tata-709)
From Directors
(Secured by hypothecation of Specific Machinery,
Stocks ,Debtors and Stores & Spares )
From Inter-Corporate
2005-06Rs.
3,000,000
12,000,000
303,132
913,776
89,346,364
10,216,524
42,681,711
79,986,682
50,000,000
30,957,000
32,465,187
5,848,791
2,293,983
2,000,000
1,000,000
-
1,267,130
58,709,869
-
57,442,739
30,957,000
50,000,000
3,931,219
-
3,931,219
58,269,530
31,399,630
11,869,900
15,000,000
27,533,854
42,403,754
3,000,000
11,869,900
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH 2006
SCHEDULE - F
342 (Previous Year Nil) Equity Shares of
Bank of Baroda of Rs.10/- each
100 Equity Shares of Padmini
Quoted (fully paid-up)
Rs.2004-05
Rs.2005-06
Technologies Ltd. of Rs.10/- each
200(Previous Year -500) Equity Shares of
Reliance Capital Ltd. of Rs. 10/- each
800 Equity Shares of Color Chip (I)
Ltd. of Rs. 10/- each
Electronics Ltd. of Rs.10/- each
100 Equity Shares of Bharat
35 Equity Shares of DSQ
Software Ltd. of Rs.10/- each
40 Equity Shares of Penta Media
Graphics Ltd. of Rs.10/- each
Aggregate Market Value of Quoted Investment
NON-TRADE INVESTMENT (AT COST)
78,660
18,458
40,464
41,284
7,270
36,747
8,299
231,182
-
18,458
101,163
41,284
7,270
36,747
8,299
213,220
164,760 323,000
1521
SCHEDULE - E FIXED ASSETS
As at Addition As at Up to For the Deduction/ Up to As at As at
01/04/2005 31/03/2006 31/03/2005 year Adjustment 31/03/2006 31/03/2006 31/03/2005
FREEHOLD LAND
RESIDENTIAL FLATS
BUILDING
PLANT & MACHINERY
ELECTRICAL INSTALATION.
FURNITURE & FIXTURES
VEHICLES
AIR CONDITIONERS
GENERATORS
WEIGHING SCALE
OTHER EQUIPMENTS
COMPUTORS
OFFICE PREMISES
FURNITURE WIP
Total
Previous Year
579,100
213,555
15,808,589
31,136,041
4,221,736
1,646,704
3,039,677
461,332
1,647,095
105,288
1,889,951
2,509,870
1,540,140
117,591
64,916,669
46,550,161 515,827
10,622,600
-
1,341,292
145,600
1,058,831
1,891,453
1,964,128
315,990
-
40,403
114,054
487,772
-
-
17,982,123
18,882,335
Deduction
-
-
-
-
-
-
306,508
-
-
-
-
-
1,540,140
117,591
1,964,239
11,201,700
213,555
17,149,881
31,281,641
5,280,567
3,538,157
4,697,297
777,322
1,647,095
145,691
2,004,005
2,997,642
-
-
80,934,553
64,916,669
-
17,405
4,293,738
12,267,526
1,366,928
277,041
1,150,741
99,056
506,828
18,189
686,588
1,738,351
-
-
22,422,391
19,007,904
-
3,481
546,808
3,219,962
237,284
150,651
352,358
30,234
78,237
5,597
93,407
340,407
-
-
5,058,426
3,544,609
-
-
-
-
-
-
284,979
-
-
-
-
-
-
-
284,979
130,122
-
20,886
4,840,546
15,487,488
1,604,212
427,692
1,218,120
129,290
585,065
23,786
779,995
2,078,758
-
-
27,195,838
22,422,391
Capital Work -in-Progress
11,201,700
192,669
12,309,335
15,794,153
3,676,355
3,110,465
3,479,177
648,032
1,062,030
121,905
1,224,010
918,884
-
-
53,738,715
42,494,278
36,520,581
579,100
196,150
11,514,851
18,868,515
2,854,808
1,369,663
1,888,936
362,276
1,140,267
87,099
1,203,363
771,519
1,540,140
117,591
42,494,278
-
FIXED ASSETS
GROSS BLOCK DEPRECIATION NET BLOCK
NOTES: a) Capital Work-in-Progress includes : (I) Rs.1,27,11,480/- on account of cost of construction materials at site. (ii) Rs. 4,26,185/- on account of electrical materials at site. (iii) Rs. 2,33,82,916/- on account of advance against capital expenditure.
SCHEDULE - G
Current Assets :
Inventories :
(As per inventory taken, valued
and certified by a Chairman)
Raw Materials
Work in Process
Finished Goods
Packing Materials
Sundry Debtors :
(Unsecured, considered good)
Outstanding for a period
Exceeding six months
Others (net of advances received
Cash & Bank Balances :
Cash on hand
Balances with Scheduled banks :
in current account
In Dividend A/c 2003-04
Loans and Advances :
(Unsecured, considered good)
Advances recoverable in cash or in
kind or for value to be received
Deposits
Advance Income Tax(Net of Provision)
DEPB
Rs.
2004-05
Rs.
CURRENT ASSETS, LOANS & ADVANCES
2005-06
Stores & Spares
from customers)
In fixed deposits including accrued interest
(1,485,998)
2,102,181
710,740
8,760,045
17,899,055
35,044,626
729,970
120,450
62,554,146
94,606,408
3,080,193
97,686,601
1,027,019
91,554
1,742,033
186,520
3,047,126
1,329,175
2,252 172,548
2,301,583
3,312,324
427,641
410,552
9,183,739
7,756,089
26,863,351
75,340
280,338
44,158,857
21,682,256
47,044,441
68,726,697
702,437
714,629
197,480
1,436,795
3,051,341
SCHEDULES FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH 2006
22
Rs.
2005-06 2004-05
Rs.
SCHEDULE - H
CURRENT LIABILITIES & PROVISIONS
Current Liabilities :
Sundry Creditors :
For Goods
For Expenses
Other Liabilities
Dividend payable
PROVISIONS
Proposed Dividend
Tax on Dividend
SCHEDULE - I
OTHER INCOMES :
DEPB
SCHEDULE - J
MATERIALS COST :
Raw Material Consumption :
Opening Stock
ADD: Purchases
LESS: Closing Stock
Opening Stock of :
Work-In-Process
Finished Goods
Less : Closing Stock
Work-In-Process
Finished Goods
-
-
Profit on Sale of Fixed Assets 2,529,331
Profit on Sale of Investments 101,810
172,548
197,480
SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED 31ST MARCH 2006
1,500 1,450 Dividend
8,615,192 3,608,264
8,365,785
1,980,419 6,422,194
16,023,172
18,593,723 26,805,303
321,000
82,161 292,997 Interest (TDS Rs.16,858/-,Previous Year Rs.61,266/-)
- Rent (TDS Rs.Nil, Previous Year Rs.67,121/-)
787,995 2,792,720
9,183,739 9,424,264
464,433,557 478,217,155
455,249,818 468,792,891
446,534,502 469,033,416
17,899,055 9,183,739
7,756,089 4,149,378
34,619,440 17,183,804
26,863,351 13,034,426
8,760,045 7,756,089
43,804,671 34,619,440
35,044,626 26,863,351
(17,435,636)
437,349,271 451,597,780
(9,185,231)
3,095,700
434,172 404,569
186,520
3,500,269
77,918
3,529,872
3,095,700
23
SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2006
Rs.Rs.
2005-06 2004-05
SCHEDULE - K
MANUFACTURING EXPENSES :
Stores & Spares
Packing Materials
Power & Fuel
Repairs & Maintenance :
Factory Rent
SCHEDULE - L
EMPLOYEE'S REMUNERATION :
Salaries, Wages & Bonus
Staff Welfare & Perquisites
Contribution to Provident Fund
Exgratia
Gratuity
House Rent
Building
Others
Plant & Machinery
Job Work Charges
55,666
6,372,718
6,013,409
2,208,586
621,800
830,503
202,395
69,288,977
1,654,698
86,990,388
12,900,100
340,574
576,722
284,364
10,050
14,167,476
1,452,000 -
110,303
2,265,805
1,174,031
4,272,249
921,683
507,064
52,334
1,481,081
12,723,251
21,916,417
7,456,490
561,475
311,699
19,190
200,630
8,659,787
24
SCHEDULES FORMING PART OF THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2006
SCHEDULE - M
ADMINISTRATIVE EXPENSES :
Directors Remuneration
Directors House Rent/ Allowances
Directors Medical Allowances
Electricity Charges
Insurance
Postage & Telephone
Printing & Stationery
Professional & consultancy Charges
Security Charges
Advertisement
Bank Charges
Rent, Rates & Taxes
Sundry Expenses
Travelling & Conveyance
Vehicles Expenses
Repair & Maintenance :
Vehicles
Listing Fees
Directors Sitting Fees
Loss on Sale of Fixed Assets
Auditors Remuneration :
Audit Fees
Tax Audit
Service Tax
Share issue expenses written off
SCHEDULE - N
SELLING & DISTRIBUTION EXPENSES :
Sales Promotion
Brokerage & Commission
Sample Expenses
Freight, Forwarding & Transport
Godown Rent
SCHEDULE - O
INTEREST :
Bank
Others (Net)
2004-05
Rs.
2005-06
Rs.
292,300
15,000
60,000
6,219,588
1,414,294
-
11,727
2,520,000
2,251,321
280,000
315,516
1,242,007
668,322
505,220
506,339
465,275
391,907
979,819
994,642
202,636
10,000
-
50,000
10,000
11,808,161
-
41,831
4,678,407
335,081
768,060
96,130
396,209
5,248,364
6,662,658
490,249
387,539
208,479
692,086
2,130,000
1,105,218
11,622
207,086
224,646
67,288
55,100 5,100
2,283,224
1,090,182
353,185
1,143,177
235,046
16,300
58,169
18,000
42,500
7,500
274,429
11,411,025
85,352
1,299,645
248,350
6,634,367
4,741,200
259,820
4,875,411
73,917
4,949,328
360,000
25
4) Opening Stock :Qty. Rs. Qty. Rs.
Synthetic Yarn Kgs. 25,278,612.00 13,034,426.00
Fabric Mtr. 24,380.60 1,584,739.00 - -
Packing Material 75,340.00
80,765.00
Store & Spares 280,338.00 328,820.00
Not Ascertainable
Not Ascertainable
Not Ascertainable
Not Ascertainable
2005-2006 2004-2005
151,783.32 103,491.27
SCHEDULE -P 2005-06
NOTES ON ACCOUNTS
1) Significant Accounting Policies:
i) Basis of Accounting :
All Income and expenditure items having a material bearing on the financial statements are recognised on accrual basis, except the items in respect of which it is not possible to ascertain with reasonable accuracy the quantum thereof.
ii) Fixed Assets :
Fixed Assets are stated at cost of acquisition and installation.
iii) Depreciation :
Depreciation on Fixed Assets is provided on Straight Line method at the rate and in the manner specified under Schedule XIV of the companies Act, 1956.
iv) Investments :
Investments are stated at cost. Dividend is accounted for when received.
v) Inventories :
Inventories are valued at the lower of cost or net realisable value.
vi) Share Issue Expenses :
Share Issue Expenses are being written off in equal installments over a period of ten financial years.
vii) Gratuity:
Gratuity liability is accounted as per the actuarial contribution demanded by Life Insurance Corporation of India.
viii) Sales :
Sales includes interest from debts. Sale of Wastage, Job work charges but net of Sales discount and Sales returns. Sales excludes excise duty.
ix) Deferred Tax
Deferred Tax is accounted for by computing the the tax effect of timing differences which arise during the year and reverse in subsequent periods.
2) There was no amount due to small scale industrial undertaking at the close of the year. This disclosure is based on the document/information available to the Company regarding their status of the small scale undertakings.
3) Licensed, Installed Capacities & Actual Production :(As certified by the management)
Class of Goods Units of
Measure31/03/2006 31/03/2005 31/03/2006 31/03/2005 31/03/2006
Synthetic Yarn Kgs. N.A. N.A. Not Ascertainable Not Ascertainable
Job Work(Yarn) Kgs. N.A. N.A. Not Ascertainable Not Ascertainable
Fabric Mtr. N.A. N.A. Not Ascertainable Not Ascertainable
Job Work (Fabric) Mtr. N.A. N.A. Not Ascertainable Not Ascertainable
Licensed Capacity Installed Capacity
3,767,508.07
347,422.48
880,886.69
9,609.90
Actual Production
31/03/2005
3,384,751.41
628,972.00
80,306.90
-
26
Raw Material, Stores & Spare parts etc. consumed :
% Quantity Rs. % Quantity
Yarn ( in Kgs)
Indigenous 99.24 4,055,960.69 442,507,161.00 100.00 3,492,330.29
0.76 31,056.00 4,027,341.00 - -
100.00 4,087,016.69 446,534,502.00 100.00 3,492,330.29
Stores & Spares Indigenous Not Ascertainable 6,372,718.00 Not Ascertainable
Packing Materials Indigenous Not Ascertainable 2,208,586.00 Not Ascertainable
Rs.
469,033,416.00
-
469,033,416.00
2,265,805.00
1,174,031.00
Closing Stock :
Synthetic Yarn Kgs. 31,160,926.00
Mtr. 59,749.25 3,883,701.00 24,380.60
Packing Material 120,450.00
Store & Spares 729,970.00
Synthetic Yarn Kgs. 531,984,034.00
Mts. 58,446,307.00
Job Work(Yarn) 347,422.48 2,919,518.00 628,972.00
Job Work (Fabric) 104,495.00
229,164.33
Not Ascertainable
Not Ascertainable
151,783.32
Not Ascertainable
Not Ascertainable
3,690,127.06 3,336,459.36
844,259.04 55,926.30
9,609.90 -
25,278,612.00
1,584,739.00
75,340.00
280,338.00
513,119,767.00
3,445,952.00
5,904,439.00
-
5)
Fabric
6) Sales :
Fabric
7)
Imported
Total
The Company is engaged in manufacturing and sale of Textile Products, which is the only reportable segment.
Related Party Disclosures
Key Managerial Personnel :
Designation
Shri Arun Kumar Biyani Chairman & Director
Shri Ajay D. Biyani Managing Director
Shri Anil D. Biyani Whole - Time Director
Associates & Relatives :
M/s. Damodar Overseas - Associates k. Mrs. Kanta Biyani
M/s. Aman Industries - Associates l. Mr. Aman Biyani
M/s. Syam Carriers - Associates m. Mr. Aditya Biyani
M/s. Aditya Transporters - Associates n. Mr. Abhishek Biyani
M/s. Arnar Synthetics Pvt. Ltd. - Associates o. Mr. Akshay Biyani
M/s. Aman Synthetics Pvt. Ltd. - Associates p. Mrs. Manju Biyani
M/s. Shree Damodar Silk Mills Pvt.Ltd. - Associates q. Mrs. Sanju Biyani
Ajay Biyani HUF - Associates r. M/s. Samm Silk Mills
Arun Kumar Biayni HUF - Associates s. M/s. Panna Yarns Pvt. Ltd.
M/s. Suam Overseas Pvt. Ltd. - Associates t. M/s. CSS Mercantiles Pvt. Ltd.
- Relatives
- Relatives
- Relatives
- Relatives
- Relatives
- Relatives
- Relatives
- Associates
- Associates
- Associates
8)
9)
Name
a.
b.
c.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
27
(in Rs.) (in Rs.)
11) Remuneration to Directors 2005-06 2004-05
Salary 2,520,000
2,130,000
Medical Allowances 11,727
11,622
House Rent /Allowances 280,000
360,000
12) FOB Value Of Exports 3,538,170
1,028,429
13) C I F Value of Imports
Yarn 4,027,341
-
14) Expenditure In Foreign Currency
Travelling 134,520
264,485
Sales Promotion -
65,039
Deferred tax Current year Deferred taxliability/asset charge/(credit) liability/assetas at as at
01/04/05 31/03/2006
Rs. Rs. Rs.
3,860,883
(343,138)
3,517,745
(A) 3,860,883
(343,138)
3,517,745
-
-
-
(B) -
-
-
(A) - (B)3,860,883
(343,138)
3,517,745
10) Deferred Tax Liabilities(net)
Deferred tax liabilities
i) Depreciation
Deferred tax assets
i) Unabsorbed losses
Deferred tax liability (net)
The impact of Deferred Tax Liability of Rs. (343,138/-) for the year ended 31.3.2006 has been Credited to Profit and
Loss Account.
37,225,686
111,051
12,884,823
31,822,101
-
310,993,544
-
-
-
-
748,800
80,000
1,568,434
37,225,686 2,920,000
111,051 541,589
- -
12,884,823 7,095,888
- -
31,822,101 35,747,280
- 292,997
- -
310,993,544 432,989,942
186,064 -
2,520,000 2,130,000
280,000 360,000
11,727 11,622
748,800 657,000
80,000 96,000
1,568,434 3,001,632
2006 2005
Transactions during the year with related parties :
Unsecured Loans 2,920,000 - -
Sundry Debtors 541,589 - -
Current Liabilities
Sundry Creditors 7,095,888 - -
Income
Sales 35,747,280 - -
Interest 292,997 - -
Expenditure
a) Purchase (including Job work) 432,989,942 - -
b) Interest on Loan - 186,064 -
c) Directors Remuneration - 2,520,000 2,130,000
d) Directors House Rent/ Allowance - 280,000 360,000
e) Directors Medical Allowance - 11,727 11,622
f) Employees Remuneration 657,000 - -
g) Office Rent 96,000 - -
h) Freight, Forwarding & Transport 3,001,632 - -
Total (Amt. In Rs.)As of March 31
2006 2005
Key Management PersonnelAs of March 31
2006 2005
Associates & RelativesAs of March 31
15) As the market value of quoted investments fluctuates regularly, the diminution in the value of investment has not been considered of the permanent nature and hence no provision of the same amounting to Rs. Nil/- (previous year Rs. 89,866/-) has been made in
16) Earning Per Share : 2005-06 2004-05
Basic 6.27 2.57
Diluted 6.27 2.57 28
17)
18) Comparative figures for previous year have been regrouped / rearranged wherever necessary.
19) Additional informaton as required under Part IV of Schedule VI to the Companies Act, 1956.
Balance Sheet Abstract and Company General Business Profiles :
I. Registration Details :
Registration No. 45575
State Code 011
Balance Sheet Date 31/03/2006
II. Capital Raised during the year (Amt.in Rs.)
Public Issue Nil
Rights Issue Nil
Bonus Issue Nil
Private Placement (Promotor) Nil
Balance in respect of Unsecured loans. Sundry Creditors, Sundry Debtors and Loans & Advances are subject to confirmation by respective parties.
III. Position of Mobilisation and Development of Funds : (Amt.in Thousand)
Total Liabilities 255,107.53
Total Assets 255,012.53
Sources of Funds :
Paid up capital 30,957.00
Reserves & Surplus 58,269.53
Secured Loans 87,846.36
Unsecured Loans 42,681.71
Deferred Tax Liabilities 3,517.75
Application of Funds :
Net Fixed Assets 53,738.71
Capital Work in Progress 36,520.58
Investments 231.18
Net Current Assets 132,781.87
IV. Performance of Company (Amt.in Thousand)
Turnover (Gross Revenue) 596,247.07
Total Expenditure 568,255.97
Profit Before Tax 27,991.11
Profit After Tax 19,395.65
Earning per Shares (Rs.) 6.27
V. Generic Terms of Three Principal Products/Services of Company
(As per monetary terms)
Item Code No. : (ITC Code) 540233
Product Description Multiple folded fancy yarn and fabrics.
Signatories to Schedules A to PAs per our report of even date
For A.J.BALIYA & ASSOCIATESChartered Accountant
(A. J. Baliya)Partner
PLACE : MUMBAIDATED :14th JUNE, 2006
(Arunkumar Biyani) (Ajay D. Biyani)
Chairman Managing Director
For and On Behalf of the Board
29
Profit On Sale Of Fixed Assets
Profit on sale of Investments
Adjustment for :
Purchases of Fixed Assets including Capital Work-in-Progress
Dividend (3,106,660)
Loss on Sale of Fixed Assets -
(2,529,331)
(101,810)
(14,292,613)
(6,662,658)
2004-05
Rs. Rs. Rs. Rs.
2005-06
Adjustment for :
27,991,106
Interest 6,662,658
Depreciation 5,058,426
Dividend (1,500)
9,088,443
-
37,079,549
Trade & Other Receivable (30,764,336)
Trade Payable 9,722,540
Inventories (18,395,289)
(39,437,085)
Cash generated from Operations (2,357,536)
(14,171,208)
Sale of Fixed Assets 4,091,000
(54,385,113)
Dividend Received 1,500
(Purchase)/Sale of Investments 83,848
(50,208,765)
64,375,758
3,051,341
3,047,126
(4,215)
Net Profit Before Tax & Extra-ordinary Items
(5,272,419)
Net increase in cash and cash equivalents (A+B+C)
Closing Balance of Cash & Cash Equivalents
Net Cash used in Investing Activities B
C. CASH FLOW FROM FINANCING ACTIVITIES
Net Cash used in Financing Activities C
Tax on Dividend (404,569)
Proceeds from Borrowings 67,886,987
Direct Tax paid(net)
Prior Years Tax Adjustments
Interest paid
Opening Balance of Cash & Cash Equivalents
B. CASH FLOW FROM INVESTING ACTIVITIES :
A. CASH FLOW FROM OPERATING ACTIVITIES
121,405
Share Issue Expenses Written off
Operating Profit Before Working Capital Changes
Cash flow before Extra-Ordinary Items
Net Cash from Operating Activities A
14,544,840
8,825,085
23,369,925
(4,796,164)
(7,793,662)
15,576,263
(4,949,328)
5,821,097
(18,553,348)
2,447,519
3,051,341
603,822
13,336,074
(9,674)
5,830,771
-
-
(2,898,220)
4,949,328
3,544,609
(1,450)
58,169
274,429
(2,200,403)
11,547,945
(17,141,204)
44,410
(18,599,208)
1,450
-
(386,963)
16,621,257
CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH 2006
(A. J. Baliya)PartnerPLACE : MUMBAIDATED : 14th JUNE, 2006
For A.J.BALIYA & ASSOCIATESChartered Accountant
Managing Director(Ajay D. Biyani)(Arunkumar Biyani)
Chairman
For and On behalf of the Board
30
AUDITORS CERTIFICATE
TO
The Board of Directors
M/S Damodar Threads Limited ,
A-1/202 ,Centre Point,
243-A, N. M. Joshi Marg,
Lower Parel (E),
Mumbai - 400 013
We have examined the attached Cash Flow statement of Damodar Threads Limited for the year
ended 31st March, 2006. The Statement has been prepared by the Company in accordence with the
requirements of the Clause 32 of Listing Agreement with the Stock Exchanges and is based on and in
agreement with the corresponding Profit & Loss Account and Balance Sheet of the company covered by our
report of even date to the members of the Company.
For A.J.BALIYA & ASSOCIATES Chartered Accountant
(A. J. Baliya) Partner PLACE : MUMBAI DATED : 14th JUNE, 2006
31
DAMODAR THREADS LIMITEDRegistered Office : A1/202, Centre Point, 243- A, N.M. Joshi Marg, Lower Parel (East), Mumbai 400013
Please complete the attendance slip and hand it over at the entrance of the Meeting hall.Please also bring your copy of the enclosed Annual Report.
DAMODAR THREADS LIMITEDRegistered Office: A1/202, Center Point, 243- A, N.M. Joshi Marg, Lower Parel (East), Mumbai 400013
PROXY FORM
REGD. FOLIO NO./DPID NO. ....................... NO. OF SHARES...................................
I/We .......................................Of ........................................... being a member/members
of the above Company, hereby appoint Mr./Mrs. ....................................................................
of ......................................... or failing him / her Mr./Mrs...........................................as
my/our proxy to attend and vote for me/us and on my/our behalf at the 18th Annual General Meeting of
the Company to be held on Thursday, 24th August, 2006 and at any adjournment thereof.
AS WITNESS my/our hand at …………………………….on this……………………….day of………………………2006.
Signed by the said________________________________________________
Note: The proxy must be deposited at the Registered Office of the Company not less than 48 hours before the time for holding the meeting.
ATTENDANCE SLIP
I hereby record my presence at the 18th ANNUAL GENERAL MEETING of the Company to be held on Thursday the 24th August, 2006 at 4.30 p.m. at Registered office of the Company at A1/202, Centre Point, 243- A, N.M. Joshi Marg, Lower Parel (East), Mumbai 400013
REGD. FOLIO NO./DPID NO. __________________ NO. OF SHARES____________
Name of the Shareholder (in block capitals)____________________________________________
Signature of the Shareholder or proxy________________________________________________
Revenue Stamp
32
If undelivered please return to :
DAMODAR THREADS LTD.A1/202, Centre Point, 243-A, N. M. Joshi Marg,
Lower Parel (East), Mumbai- 400 013.
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