abhishek industries annual report 202008 9[1]
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ABHISHEK INDUSTRIES LIMITED 19th Annual Report 2008-9
INSPIRED BYCHALLENGE
CONTENTS
2About Abhishek
3Managing Director’s Message
4Financial Highlights
6Inspired by Challenge
14Business Overview
18Directors’ Profile
20Directors’ Report
30Management’s Discussion and Analysis
38Corporate Sustainability Report
42Corporate Governance Report
60Standalone Financial Statements
89Consolidated Financial Statements
“THE TRIDENT CREDO”
In life as in business, change is the only constant. Keeping in mind
the events of the last year, Trident Group has undertaken a corporate
rebranding program with a simple philosophy – Inspired by challenge.
Three simple words, yet it has profound impact on our business and our
lives.
Throughout history we have witnessed how the world has progressed
when people challenged the status quo, questioned the conventional
wisdom and overcame the challenges to create what never existed. This
is the genesis of human progress.
What does this philosophy mean to the Trident Group? Everything.
For us it means constantly raising the bar and creating new benchmarks.
For us it means newer ways to do business and overcome any challenge
that comes in the way.
But then mere words won’t help. It is all about imbibing this credo in our
day-to-day work. It’s about internalizing the belief in our lives.
As we experienced the global downturn of 2008-9, our motto is the
need of the hour. To overcome all the challenges business throws at
us.
Mahatma Gandhi said, “One needs to be slow to form convictions,
but once formed they must be defended against the heaviest
odds.”
AT ABHISHEK, INSPIRED BY CHALLENGE IS A CONVICTION.
Abhishek Industries Limited2About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
ABOUT ABHISHEK
OUR BUSINESS
We deal in yarn, terry towels, paper and chemicals along with our energy segment which serves all
the other divisions. Therefore we exist in the segments replete with opportunities and consistent in
growth.
OUR CALLING CARD
Flagship Company of the Trident Group
Headquartered in Ludhiana
Manufacturing facilities in Barnala, Punjab and Budni, Madhya Pradesh
Listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE)
Company Identification Number (CIN) : L99999PB1990PLC010307
OUR RANKING
World’s largest wheat straw based paper manufacturer
One of the world’s largest terry towel manufacturers
One of India’s largest yarn spinners.
Recognised by the ICSI as the best Indian Company for adopting corporate governance practices
OUR VISION
Inspired by challenge, we will add value to life, and together prosper globally.
OUR VALUES
To provide customer satisfaction, through teamwork, based on honesty and integrity, for continuous growth
and development.
OUR CORPORATE PHILOSOPHY
To continue growth by leading national and international standards and ethical means, in harmony with the
environment, ensuring customer delight, stakeholders’ trust and social responsibility.
Birth of Abhishek
1990
No of employees
Over 9200
Exports across
65 countries
Net Sales growth
33 percent over
the last year
Exports growth
32 percent over
the last year
Balance Sheet Size
Rs 20,362.1 million as
on March 31, 2009
Public shareholding
36.52 percent as on
March 31, 2009
Foreign shareholding
6.32 percent as on
March 31, 2009
3Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
MANAGING DIRECTOR’S MESSAGE
Dear Shareholders
It’s always a pleasure to talk to you – our valued
shareholder. At Abhishek Industries, we have
grown through the years, by questioning existing
paradigms and by challenging assumptions. In
essence, through our unconventional wisdom,
we have prospered at every stage and gained
confidence to take on fresh challenges every day.
As you are aware, 2008-9 was a tumultuous
period. While on one hand, we have witnessed
global downturns, economic uncertainities and
stagnation; on the other we have seen geopolitical
shifts and newer challenges.
With our motto being Inspired by Challenge, we are
transforming our experiences into wisdom and are
honing our skills through learning. The challenges
of the recent past have made us that much wiser
and as a consequence we are reworking and re-
strategizing on our business premise - people,
products, processes and geo locations.
We are indeed grateful for the faith and trust
you have reposed on us and assure you that the
coming year will mark a new era in creating global
benchmarks and great economic value additions.
Wishing you a great year ahead!
Warm regards,
Rajinder Gupta
With our motto being Inspired by Challenge, we are transforming our experiences into wisdom and are honing our skills through learning
Abhishek Industries Limited4About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
FINANCIAL PERFORMANCE
(Rs million)
Period ended Mar 2005 Mar 2006 Mar 2007 Mar 2008 Mar 2009
No. of months 15 12 12 12 12
Gross Turnover 8296 8885 9860 12062 15456
Net Sales 7056 7436 8166 10487 13981
Exports 3300 4190 4352 5193 6862
Gross Profit (PBIDT) 1464 1588 1794 1818 2605
Net Profit after tax 426 568 409 400 (530)
Net Worth 3150 3585 3995 4452 4463
Fixed Assets (gross block) 8218 10074 12101 13273 21032
Current Assets (Net) 2422 2863 3372 2785 2365
FINANCIAL HIGHLIGHTS
3300
4190 4352
5193
6862
2004-5 2005-6 2006-7 2007-8 2008-9
Exports (Rs million)
8296 88859860
12062
15456
2004-5 2005-6 2006-7 2007-8 2008-9
Gross Turnover (Rs million)
14641588
1794 1818
2605
2004-5 2005-6 2006-7 2007-8 2008-9
3150
35853995
4452 4463
2004-5 2005-6 2006-7 2007-8 2008-9
Net Worth (Rs million)
5Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
KEY FINANCIAL INDICATORS
Period ended Mar 2005 Mar 2006 Mar 2007 Mar 2008 Mar 2009
No. of months 15 12 12 12 12
Gross Profit Margin (%) 21 21 22 17 19
Return on Net worth (%) 14 16 10 9 --
Export Sales/Net Sales (%) 47 56 53 50 49
Debt/equity 1.47 1.92 2.48 2.88 3.49
CEPS (Rs) 6.16 6.35 6.46 6.32 2.80
EPS (Rs) 2.19 2.93 2.11 2.06 (2.64)
Book Value/Share (Rs) 16.22 18.12 20.57 22.92 20.09
Turnover per share (Rs) 42.72 45.75 50.77 62.11 69.56
821810074
1210113273
21032
2004-5 2005-6 2006-7 2007-8 2008-9
Fixed Assets (gross block) (Rs million)
16.2218.12
20.5722.92
20.09
2004-5 2005-6 2006-7 2007-8 2008-9
Book Value/Share (Rs)
42.72 45.7550.77
62.11
69.56
2004-5 2005-6 2006-7 2007-8 2008-9
Turnover per share (Rs)
CEPS (Rs)
6.16 6.35 6.46 6.32
2004-5 2005-6 2006-7 2007-8 2008-9
Abhishek Industries Limited6About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
Our paper business witnessed a significant expansion, with the commissioning of new machine of 1,25,000 tpa.
We also added 82 looms in our terry towel business
7Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
Corporate robustness and resilience are defined not only the ability to maintain a continuum in operations during phases of economic slowdown, but actually to increase the level of engagement with the market.
We, at Abhishek have focused on enhancing
internal strengths and transforming them into
opportunities. Amid a climate of economic
adversity, we continued investing in enhancing
our capacities, and stabilizing capacities that
went on stream at the beginning of the year. We
analysed competencies, allocated resources and
re-visited our strategies to ensure that these new
capacities were not rendered idle.
The vivid reflection of our efforts has been the
Budni plant in Madhya Pradesh. The first phase
of the integrated plant was commissioned with
50,400 spindles becoming operational. The
capacity at Budni is planned on special yarns like
compact, Elli-Twist, core spun yarn and special
cottons like Supima, Organic and Giza, which would
help us differentiate our product in the market.
In the terry towel division , we added 82 looms
as part of our terry towel expansion program and
added newer and higher value added products like
super fine zero twist, anti microbial towel, super
absorbent towel, quick dry towel, organic slub
towel to name a few. In addition, we also produced
exclusive ranges for many premium private labels.
On an expanded capacity, these value added
products will result in higher contributions,
reflecting a forward-looking proactivity in
production planning and product innovation.
Our paper business witnessed a significant
expansion, with the commissioning of new
machine of 1,25,000 tpa . This machine, together
with a pulping capacity of 90,000 tpa has
significantly enhanced our capacity to service
paper demand in our market territories and has
enabled us to move up in value chain. It is also
the first agro-based paper manufacturer of India
to use Elemental Chlorine Free (ECF) technology,
considered to be the most environment friendly
paper manufacturing process.
This expansion will allow Abhishek to emerge as
an important player in the writing and printing
segment. We launched our own brand Copier
paper called ‘SPECTRATM COPIER’ and ‘MY CHOICE’,
which will help create a B-to-C brand.
Thus, we as Abhishek have endeavoured to give
a pragmatic approach to the present downturn.
By harnessing strengths and expanding, we have
made ourselves an organization that is ready to
face future challenges with aplomb.
EXPANSION AMID ADVERSITY
Abhishek Industries Limited8About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
The employees have been empowered to take decisions, experiment thereby promoting entrepreneurial mindset
9Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
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Economic adversity is often an imperative phenomenon, which brings with it related opportunity to sharpen efficiencies and build capabilities that operate at these enhanced levels. The future is subject to resources and how we use them. During periods traumatized by economic perils, it is the ability to weather abnormalities that determines sustainability.
To be resourceful enough to face a fairer and
more promising business climate, we took care
to become stronger in our people relations and
thereby worked towards an overall tightening of
our organizational people networks.
We promoted the flat organizational structure
which facilitates decision-making. The employees
have been empowered to take decisions,
experiment thereby promoting entrepreneurial
mindset. There is a fair flexibility in deciding the
career paths with growing elements of cross
functionality.
We remain committed to our philosophy of
continued operational excellence. To that effect,
the business excellence initiatives continued with
satisfying operational results.
We continued our focus on ensuring a right-fit in
each of our various functions, and recalibrated the
internal structure to match competencies with
business objectives at all levels.
And most importantly, we ensured that the team
morale remained strong and that the motivation
levels were even higher to ensure a prompt
response to market conditions.
Being stronger therefore, is the product of
active and healthy synergies. Be it the work
environment, the remuneration structures or
the zeal to recruit and retain the best talent, we
have proactively etched a path that has bravely
penetrated through the barren economic scene.
Facing challenges through internal strengths is
our simple mantra.
FOSTERING INTERNAL STRENGTH
Abhishek Industries Limited10About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
Operationally, the year witnessed nearly 70 per cent improvement in PBDITA - 2,605.3 million from
Rs 1,540.0 million in the previous year
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There is never a better time to revisit norms of prudence and control filters in an organisation than when the overall business climate is unfavourable. This allows the learnings to be applied to a higher base as and when the turnaround happens, ensuring higher value creation.
We, at Abhishek believe in a continuous process
of optimizing potential. As we await fairer
weather, we endeavour to alleviate the gloom by
taking measures which accrue to protecting and
safeguarding our hard earned successes.
During 2008-9, our functioning was impacted
by a significant foreign exchange fluctuation.
Operationally, the year witnessed nearly 70
percent improvement in PBDITA - 2,605.3 million
from Rs 1,540.0 million in the previous year,
on a 33 per cent turnover increase. However,
the severe foreign exchange impact saw this
positive operational surplus turn into a net loss of
Rs 530.4 million.
In order that such unpredictability and unrelated
skews don’t impact performance, we have invested
in creating a completely new forex strategy with a
inbuilt derisking mechanism. This will protect our
bottomline from unnatural currency fluctuations.
We believe we have insulated ourselves from any
troughs in external factor that may potentially
damage our bottomline. Internally, we also
emphasized on leveraging our efficiencies for
lower operating costs, and strengthened our
collection mechanism to ensure that our balance
sheet is always well capitalised and protected
from unpredictable fluctuations in currency rates,
and that our cash flow is positive.
Thus, being spirited enough to face a challenge
as huge as a global slowdown, requires a good
degree of prudent planning that accrues from
experience and wisdom. The business of emerging
as a competent player requires us to be financially
viable and internally strong.
PRUDENCE TO PROFITABILITY
Abhishek Industries Limited12About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
Our project of the second phase of expansion at Budni, to take the total number of spindles to 1,00, 800 involving
a total capital outlay of Rs 3737 million is on track
13Directors’ Report Corporate
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Standalone Financial Statements
Corporate Sustainability Report
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Adversity often impacts not only current productive ability but also has a destabilizing effect on plans for the future. However, a philosophy based on the principle of continuous investment often serves as a security against future downturns. It is also the clearest sign of organisational resilience.
For Abhishek, a year of economic instability and
economic downturn is seen as an aberration,
and not as a continuing reality. This inspires
us maintain the momentum of capacity and
productivity enhancement, based on a well
considered business plan.
Our strategy is based on a long-term view of the
market opportunities, and our plans are aligned
towards extracting maximum leverage from them.
Therefore, our expansion plans across each of our
business lines continued uninterrupted, even in a
difficult year, reflecting our ability to rise above
challenges and the sanctity of our own forward
planning.
Our project of the second phase of expansion
at Budni, to take the total number of spindles to
1,00,800 involving a total capital outlay of
Rs 3737 million is on track.
Similarly, in our terry towel division, we have
undertaken to upgrade the existing 18 looms
and set up 24 new looms. This investment of
almost Rs 360 million will be operationalised by
the second quarter of 2009-10, allowing us to
approach emerging demand with a larger portfolio
and greater ability to service it.
In our paper division too, we have undertaken a
debottlenecking and process streamlining project
with a capital outlay of Rs 400 million, which will
ensure that we derive maximum value from the
recent addition of a new production line.
Thus, this culture of following our viable vision and
adopted strategy is the harbinger of good tidings.
In order to keep the wheel of progress rolling,
we have constantly invested on new projects
and product innovations to broaden our product
base and enter newer markets and acquire newer
customers.
Thus, market challenges have inspired us to
continue undeterred on the path of investing in
creating an organisation relevant in the future.
INVESTING FOR A BETTER FUTURE
Abhishek Industries Limited14About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
BUSINESS OVERVIEW
CAPITAL EXPENDITURE
The Company is setting up 1,00,800 spindles at Budni, Madhya Pradesh which involves a total capital outlay
of Rs 3,737 million. This project is being implemented in phased manner. The first phase of expansion
consisting of 50,400 spindles has been completed in April 2009 and the second phase is scheduled to be
fully operational during the third quarter of financial year 2009-10.
PRODUCT BASKET
100 percent cotton yarn with count range of
Ne 13 to Ne 32 in carded yarns and Ne 12 to
Ne 40 in combed yarns
Single and TFO doubled
Hosiery and weaving (combed and carded)
Open end yarn for weaving & hosiery
Slub yarn/multi counts/compact yarn
Core spun yarns
Elli twist yarns
Yarn from imported premium cotton varieties
like supima & egyptian
Zero twist yarns
Poly cotton blended yarn
Cotton bamboo, cotton modal, cotton soya
and other blends
Certified organic cotton
Certified fair trade cotton
KEY FEATURES
Consumed captively and also marketed within
India and exported
Five units housing 1,76,352 spindles and
1920 rotors
Manufacturing value-added products like
yarn from organic yarns, fair trade cotton
yarns, egyptian/supima cotton yarns, zero
twist yarns, slub yarns, cotton bamboo yarns,
cotton modal & core spun yarn etc
Varied counts- combed and carded as
mentioned above
Focused efforts on value added products
Exports to 17 nations across the globe
Geographical diversification with expansion
of spinning capacity at Budni, Madhya
Pradesh by installing 50,400 spindles in first
phase and another 50,400 spindles are being
installed in second phase
The expanded capacity in Budni would focus
on special yarns like compact, elli-twist,
corepsun yarn and special cottons like supima,
organic and giza etc
YARN
KEY NUMBERS
2007-8 2008-9
Capacity
Cotton spindles 125952 125952
Rotors 1920 1920
Production (tonnes) 42244 40072
Revenue (Rs Million)* 4382.3 4608.4
PBIT (Rs Million) 334.6 58.4
*includes inter-segment sales
REVENUE MIX
Captive
consumption : 22%
Domestic
sales : 68%
Exports : 10%
10% 22%
68%
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BUSINESS OVERVIEW
CAPITAL EXPENDITURE
The Company has undertaken another expansion project of its terry towel division under which Company
is upgrading its existing 18 looms and 24 new looms are being set up. This project is being implemented in
textile park developed by Lotus Integrated Texpark Limited, a special purpose vehicle, with a capital outlay
of Rs 359.8 million and shall be completed by second quarter of financial year 2009-10.
PRODUCT BASKET
Terry towel and toweling products
Piece-dyed dobbies, yarn-dyed ,single and
double jacquards, unidyed jacquards, yarn-
dyed stripes, terry and velour finish, beach
towels, bath sheets, bath towels, hand
towels, guest towels, face fringes, bath mats,
kitchen towels and made ups like bath robes
and beach bags
KEY FEATURES
Integrated unit housing 350 looms
Combination of state of the art technology,
know how from the worlds leading suppliers
and vertically integrated manufacturing
infrastructure
Exports to 37 nations across the globe.
Products mainly exported to highly quality
conscious & cost competitive markets
Supplying to most of World’s reputed retail
chain stores across the globe
Increasing footprint in domestic market -
single largest supplier of towels to the five-
star hotels and resorts. Aggressively focusing
to enhance the reach to mass market through
distributors and agents. Catering to major
retail chains in India
Implementing viable vision concept in the
business based on TOC methodology
Quality control laboratory complying with the
AATCC and ISO standards
Production facility complying with CT-PAT
requirement for overseas customers
Conferred the “2006 Supplier of the Year”
award by JC Penney Corporation. Recipient of
“Wal*Mart International Supplier of the Year”
award for 4 times
More focus on innovative and value added
products; and enhancing market base
Addition of new products like super fine zero
twist, anti microbial towel, super absorbant
towel, quick dry towel , organic slub towel, etc
during the year
TERRY TOWEL
KEY NUMBERS
2007-8 2008-9
Capacity
Looms 282 350
Processed yarn (tonnes) 6825 6825
Production
Towel (tonnes) 24616 28311
Processed yarn (tonnes) 5024 5236
Revenue (Rs Million)* 6091.0 7587.5
PBIT (Rs Million) 579.0 (95.3)
*includes inter-segment sales
REVENUE MIX
Export : 92%
Domestic : 8%
92%
8%
Abhishek Industries Limited16About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
BUSINESS OVERVIEW
CAPITAL EXPENDITURE
The Company has undertaken a debottlenecking and process-streamlining project with a capital outlay of
Rs 400 million. Major areas of development would be finishing house, lime kiln and pulping section.
PRODUCT BASKETMain Products
Writing and printing paper grades Branded copier paper ‘SPECTRATM copier’ (75
GSM, 88% ISO brightness) Branded copier paper ‘My Choice’ copier (70
GSM, 87% ISO brightness) Surface size maplitho paper gold line (90% ISO
brightness), silverline (88% ISO brightness), crystalline (86% ISO brightness)
Super white maplitho Ivory white Eco print Bible printing Offset printing Cream wove Deluxe super print Trident base paper Watermark paper
Sulphuric acid Commercial grade Battery grade
By Products Caustic soda
KEY FEATURESPaper
Integrated paper & pulp plants having total capacity of paper manufacturing of 1,75,000 tpa and pulping facility of 1,25,000 tpa
Environment friendly manufacturer of a variety of papers. Among India’s lowest-cost paper producers, using agro residue as raw material
Launched ‘SPECTRATM copier’ brand and My Choice copier in copier segment. Presence in the A- grade segment of India’s paper market, with vast customer base across India & abroad
Plans to move up the value-chain by producing computerline, natureline and baseline maplitho
First agro based paper manufacturer in India to adopt Elemental Chlorine Free (ECF) technology
Exports to 22 nations across the globe
Sulphuric acid Having sulphuric acid manufacturing capacity
of 1,00,000 tpa
One of the north India’s largest manufacturer of sulphuric acid
Consumers include the detergent manufacturers, steel units, textile factories among others
Plan to add more products of sulphuric acid viz. LR grade & AR grade into product basket
Close to 75 per cent is sold within Punjab, the balance is marketed to the adjoining states
PAPER & CHEMICALS
KEY NUMBERS
2007-8 2008-9
Capacity
Paper (tpa) 40500 175000
Sulphuric acid (tpa) 100000 100000
Production
Paper (tonnes) 40832 67302
Sulphuric acid (tonnes) 68437 60968
Revenue (Rs Million)* 1758.9 3046.9
PBIT (Rs Million) 222.0 326.3
*includes inter-segment sales
REVENUE MIX
Export : 6%
Domestic : 94%
6%
94%
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BUSINESS OVERVIEW
KEY FEATURES
Having facilities for 50 MW power generation
and 338 tph of steam
Operates a co-generation power plant that
caters to the power and steam requirement
of yarn, terry towel and paper divisions
Ensures uninterrupted power supply to all
business units of the Company and helps in
cost reduction
Equipped with latest technology and multi
fuel boilers
India’s first organization to adopt fuzzy logic
for burner management in lime klin
ENERGY
KEY NUMBERS
2007-8 2008-9
Power capacity (MW) 50 50
Power generation (Mwh) 152951 274521
Consumption per unit of production (Kwh/kg)
Cotton yarn 2.43 2.38
Towel 2.49 2.51
Yarn processing 2.23 2.54
Paper 1.34 0.89
Sulphuric acid 0.07 0.07
REVENUE MIX
Captive
consumption : 100%
100%
Abhishek Industries Limited18About Abhishek Inspired by ChallengeManaging Director’s
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DIRECTORS’ PROFILE
MR RAJINDER GUPTA
(DIN 00009037)
Mr Rajinder Gupta, aged 50 years, is the founder of
Abhishek Industries Limited and has been serving
the Company as Managing Director since 1992.
Mr Gupta is a first generation entrepreneur having
rich & varied exposure of promoting industrial
ventures over the last two decades. He is the
person behind the stupendous growth of the
Trident Group Companies. He holds directorship of
various companies and is also actively associated
with several philanthropic ventures.
Mr Rajinder Gupta has been awarded with the
prestigious “Padmashree” award 2007 by Hon’ble
President of India in recognition of his distinguished
services in the field of trade and industry.
Mr Rajinder Gupta was also conferred with
the Udyog Ratna award for the year 2005
by PHD Chamber of Commerce and Industry
and PHD Chamber of Commerce Distinguished
Entrepreneurship Award, 2005 by the President
of India.
MR S K TUTEJA
(DIN 00594076)
Sh S K Tuteja, aged 64 years, is retired IAS Officer
of 1968 batch. He holds a Masters degree in
Commerce from Delhi University and is a Fellow
member of the Institute of Company Secretaries
of India. He served the government in several
key positions at the state and national level and
was secretary to the Government of India in the
Department of Food & Public Distribution at the
time of retirement. He has been a consultant to
the World Bank and UNIDO.
Mr Tuteja has rich & varied experience of 41 years.
He is also a member of the executive committee
of the International Sugar Organisation and
the International Grain Council, London. He
has contributed to a number of national and
international events in India & abroad concerning
SMEs. He was a member of Indian delegation in
the ministerial conference of WTO at Doha.
MS PALLAVI SHROFF
(DIN 00013580)
Ms Pallavi Shroff, aged 53 years, is MMS, Bachelor
of law and is lawyer by profession. She has
a vast experience of 27 years as a leading
litigation practitioner in the area of corporate
law and banking. She has been recognized by
international publications for her leading practice
in arbitration and dispute resolution. As a member
of several high powered committees, appointed
by the Government of India, she has been closely
associated with the formulation of several
important commercial statutes.
Ms Pallavi is presently a partner of M/s Amarchand
& Mangaldas & Suresh A Shroff & Co., leading
legal firm of India. She is regularly called upon
by the Government departments and ministries
to advice them on various issues. Ms Pallavi’s
area of expertise inter alia include corporate and
commercial laws, anti dumping, arbitration and
dispute resolution, competition and anti-trust,
intellectual property rights, etc.
19Directors’ Report Corporate
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MS RAMNI NIRULA
(DIN 00015330)
Ms Ramni Nirula, aged 57 years, is Senior General
Manager and Head of Corporate Banking of ICICI
Bank Limited. She holds a Masters in Business
Administration from Delhi University.
Ms Nirula has more than three decades of
experience in the financial sector. She is a part of
the senior management team at ICICI Bank and
has played an active role in its transformation
from a term-lending institution to a technology-
led, diversified financial services group. She has
previously served as the MD and CEO of ICICI
Securities Ltd. and has held leadership position
in the areas of leasing, planning, resources and
corporate banking.
MR RAJIV DEWAN
(DIN 00007988)
Mr Rajiv Dewan, aged 47 years, is a Fellow
member of the Institute of Chartered Accountants
of India and is a practising Chartered Accountant.
Mr Dewan possesses a rich and varied experience
in tax planning, management consultancy,
business restructuring, capital market operations,
SEBI related matters and other corporate laws.
Prior to starting his own practice, Mr Dewan
worked in senior positions in some of the
renowned textile companies of north India.
MR KARAN AVTAR SINGH
(DIN 01685074)
Mr Karan Avtar Singh, aged 48 years, is a B.A,
L.L.B, Ph.D (Economics) by qualification and is
an IAS officer and Managing director of PSIDC.
He joined Indian Administrative Services in the
year 1984 and since then he has been diligently
serving the Government at higher posts.
He has experience in handling various
administrative profiles as well as providing
corporate services at Board levels. He holds the
positions of Chairman, Managing director and
Director in various Companies. Apart from holding
the above stated corporate positions he has
also worked as Deputy Commissioner, Jalandhar,
Finance Secretary, Union Territory, Chandigarh,
Managing Director, Punjab Infrastructure
Development Board and Secretary to Govt. of
Punjab, Development of P.W.D (B&R).
MR RAMAN KUMAR
(DIN 00028180)
Mr Raman Kumar, aged 57 years, is Masters
in Economics and Post Graduate in Business
Management. He has also worked with
government sector in various capacities
and is presently on the Board of number of
Companies. He has rich and varied experience in
administration, liaisoning, legal and corporate
affairs. Mr Raman Kumar has been associated
with the Group since its inception and was in
charge of trust which takes care of social security
and other welfare measures of employees of the
Group.
Mr Raman Kumar can be briefly characterized as
a person with a vast working experience having
an in depth legal knowledge and a good legal
acumen, blended with sharp liaisoning skills and a
result-oriented attitude.
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DIRECTORS’ REPORT
(Rs million)
Particulars Current Year Previous Year
a) Net sales 13980.6 10486.7
b) PBIDT 2605.3 1540.0
c) Less : Interest 833.2 473.2
d) PBDT 1772.1 1066.8
e) Less : Depreciation 1159.3 863.8
f) Profit before tax 612.8 203.0
g) Less: Foreign exchange gain/(loss) (1440.7) 278.1
h) Profit/(loss) before tax after extraordinary item (827.9) 481.1
i) Less : Provision for tax (297.5) 81.6
j) Net Profit /(loss) (530.4) 399.5
k) Add : Profit brought forward 2146.7 1756.8
l) Amount carried to balance sheet 1616.3 2146.7
m) Earning per share (Rs) (2.64) 2.06
Dear ShareholdersYour Directors are pleased to present the 19th annual report and audited accounts of the Company for the
year ended March 31, 2009.
FINANCIAL RESULTS
The financial performance of your Company for the year ended March 31, 2009 is summarised below:
CORPORATE OVERVIEW
The Company operates in diversified business
segments viz. yarn, terry towel, paper and
chemical and has captive power plant to cater
to needs of it’s business segments. As on March
31, 2009, the Company is having following
manufacturing capacities installed & operational:
Textile
Yarn 1,76,352 spindles
Yarn processing 6,825 tpa
Open end yarn 1,920 rotors
Terry towels 350 looms
Paper & Chemicals
Writing & printing paper 1,75,000 tpa
Sulphuric acid 1,00,000 tpa
Caustic soda 110 tpd
Energy
Co-generation of power 50 MW
Steam 338 tph
as compared to Rs 10,486.7 million in the
previous financial year, registering a growth of
33.32 percent. The Operating profit for the year
has increased by Rs 1,065.3 million in absolute
terms, a growth of approximately 70 percent as
compared to last year and accordingly the gross
profit margin has increased by approximately 4
percent. During the year under review, Company
has incurred a net loss of Rs 530.4 million due to
volatility in foreign exchange resulting into foreign
exchange loss; and higher amount of depreciation
and interest attributable to expansion projects of
the Company.
The Company had negative earning per share
of Rs (2.64) and cash earning per share was
Rs 2.80 during the current year. Total paid up
capital of your Company has increased from
Rs 1,941.9 million to Rs 2,221.9 million.
During the year under review, your Company has
allotted 2,80,00,000 equity shares pursuant to
conversion of warrants issued on preferential
basis. More details on issued equity shares are
provided elsewhere in this annual report.
Analysis of other relevant figures of balance
RESULTS OF OPERATIONS
Financial review
The net sales of the Company for the year
under review increased to Rs 13,980.6 million
21Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
Directors’ Report (Contd.)
sheet and profit and loss account is given in
“management discussion and analysis report”
forming part of annual report.
Performance Review
A detailed discussion on performance of
operations of the Company is given elsewhere in
this annual report under “management discussion
& analysis report”.
DIVIDEND
Keeping in view the loss incurred during the year,
ongoing expansion, modernization and other
future investment possibilities in order to meet
competition, your directors have decided not
to recommend any dividend for the year under
review.
CONTRIBUTION TO THE NATIONAL
EXCHEQUER
The Company contributed a sum of Rs 249.3
million to the exchequer by way of central excise
duty in addition to other direct and indirect taxes
during the year under review.
EXPORTS
Export sales accounted for 49 percent of net
sales. During the year under review, export sales
increased by 32 percent from Rs 5,192.8 million
in the previous year to Rs 6,861.5 million in the
current year.
EXPANSIONS/MODERNISATION
Directors of the Company takes pleasure in
informing you that during the year under review,
Company has stabilized the operations and
started commercial production on newly installed
state-of-the-art pulp and paper machines after
completing, balancing and synchronization
activities. This integrated pulp and paper
expansion project of the Company involved a
capital outlay of Rs 8,250 million. The Company is
further incurring a capital expenditure of Rs 400
million for de-bottlenecking of paper project as
to enhance production level and quality of final
products. After this expansion, your Company has
emerged as World’s largest agro straw based paper
Company with a production capacity of 1,75,000
tpa of both printing & writing paper using wheat
straw as the main raw material, which saves about
5,000 trees a day. This project has enabled your
Company to penetrate into value added paper
segment and your Company has launched two
branded copier paper products – ‘Spectra’ and ‘My
Choice’ during the year under review.
As reported in our last year report, the Company
has established its first manufacturing venture
outside the State of Punjab by completing first
phase of yarn expansion project consisting
of 50,400 spindles installed in Budni, Madhya
Pradesh. The commercial production on these
spindles was started during the month of April,
2009. This project entails setting up of 1,00,800
spindles at a total capital outlay of Rs 3,737 million
in two phases. The Company has laid foundation
stone and started civil works for the second phase
consisting of another 50,400 spindles which shall
be operational by third quarter of financial year
2009-10.
During the year under review, your Company
also completed terry towel expansion plan by
installing 82 looms. Out of this, 14 looms had
already become operational during the financial
year 2007-8. The Company has commenced
commercial production on remaining looms
during the third quarter of financial year 2008-9.
This project, which involved setting of 82 looms
and balancing cum modernisation of textile
manufacturing facilities, was fully completed
with a capital investment of Rs 2,130 million.
Further, the Company has undertaken another
expansion project of its terry towel division under
which Company is upgrading its existing 18 looms
and 24 new looms are being set up. This project
is being implemented with a capital outlay of
Rs 359.8 million and is being set up in textile park
developed by Lotus Integrated Texpark Limited, a
special purpose vehicle, and shall be completed by
second quarter of financial year 2009-10.
SUBSIDIARIESAs on the last day of financial year under review,
Company had two foreign subsidiaries, i.e.
Abhishek Industries Inc, a wholly owned
subsidiary situated at USA and Abhishek Europe
SA, a subsidiary in Neuchatel; apart from one
Indian wholly owned subsidiary Abhishek Global
Ventures Limited.
The completion of Integrated paper and pulp project has enabled your Company to penetrate into value added paper segment
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However, the Company has disinvested its
entire holding in Abhishek Europe SA, Neuchatel
by way of transferring 1,000 equity shares on
May 18, 2009 and consequent to this transfer,
the Abhishek Europe SA ceased to be a Subsidiary
Company of Abhishek Industries Limited and the
Company does not hold any voting right/control
in Abhishek Europe SA from the aforesaid date of
disinvestment.
The Ministry of Corporate Affairs, Government
of India, vide its letter no. 47/251/2009-CL-3
dated May 8, 2009 has granted exemption to the
Company from attaching balance sheet, profit
& loss accounts, etc of the aforesaid subsidiary
companies to the accounts of the Company for
the financial year 2008-9. The Annual accounts
of the subsidiary companies alongwith the
reports of the Directors and Auditors thereon
and all related detailed information are open for
inspection by any investor including investor
of subsidiary companies at the head office of
the Company and of the subsidiary companies
concerned. The Company will make available
these documents to investors including investors
of subsidiary companies upon receipt of request
from them. The investors, if they desire, may write
to the Company to obtain a copy of the financials
of the subsidiary companies.
A statement giving information on the financials
of subsidiaries for the year ended March 31,
2009 and the consolidated financial statements
prepared by the Company in accordance with
Accounting Standard are given in the annual
report for the reference of the members.
DIRECTORS
During the year under review, Mr Anurag
Verma ceased to be a director of the Company
consequent to withdrawal of his nomination by
PSIDC. Mr Karan Avtar Singh was appointed as an
additional director by the Board and holds office
upto the ensuing annual general meeting.
Further, in accordance with the provisions of
Articles of Association of the Company, all the
directors, for the time being, except the Managing
directors and Whole time director, shall retire
annually and accordingly Mr S.K. Tuteja, Ms Pallavi
Shroff, Ms Ramni Nirula and Mr Rajiv Dewan,
directors are retiring at the ensuing annual general
meeting. All retiring directors, offer themselves
for re-appointment.
As per the approval of shareholders in last annual
general meeting, Mr Rajinder Gupta has been re-
appointed as Managing director of the Company
for a period of three years w.e.f. April 1, 2009.
The Board has appointed Mr Raman Kumar as
Whole time director of the Company for a period
of three years w.e.f. September 24, 2008 and
recommends his appointment alongwith
remuneration for the approval of shareholders.
FIXED DEPOSITS
During the year under review, your Company has
not accepted any fixed deposits and no amount
of principal or interest was outstanding as of
balance sheet date.
NO DEFAULT
The Company has not defaulted in payment of
interest and/or repayment of loans to any of the
financial institutions and/or banks during the year
under review.
CORPORATE GOVERNANCE
Your Company is committed to adhere to the
best practices & highest standards of corporate
governance. It is always ensured that the
practices being followed by the Company are in
alignment with its philosophy towards corporate
governance. The well-defined vision and values of
the Company drives it towards meeting business
objectives while ensuring ethical conduct with all
stakeholders and in all systems and processes.
Your Company proactively works towards
strengthening relationship with constituent of
system through corporate fairness, transparency
and accountability. In your Company, prime
importance is given to reliable financial
information, integrity, transparency, fairness,
Your Company proactively works towards strengthening relationship with constituent of system through corporate fairness, transparency and accountability
Directors’ Report (Contd.)
23Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
empowerment and compliance with law in letter
and spirit. Your Company proactively revisits its
governance principles and practices as to meet
the business and regulatory needs.
Detailed compliances with the provisions of
Clause 49 of the Listing Agreement for the year
2008-9 has been given in corporate governance
report, which is attached and forms part of this
report. The Auditors’ certificate on compliance
with corporate governance norms is also attached
thereto.
HUMAN RESOURCE DEVELOPMENT AND
INDUSTRIAL RELATIONS
The human resources development function of
the Company is guided by a strong set of values
and policies. Your Company strives to provide the
best work environment with ample opportunities
to grow and explore. Your Company maintains a
work environment that is free from physical, verbal
and sexual harassment. The details of initiatives
taken by the Company for development of human
resources are given in management discussion &
analysis report.
The Company maintained healthy, cordial and
harmonious industrial relations at all levels.
RECOGNITIONS & AWARDS
During the year under review, your Company has
been conferred Silver Trophy for outstanding
export performance for “Top Exporters –
Madeups” in the Category of “Terry Towels” for
the year 2007-8 by The Cotton Textiles Export
Promotion Council (TEXPROCIL).
AUDITORS & AUDITORS’ REPORT
M/s Deloitte, Haskins & Sells, Chartered
Accountants, Statutory Auditors of the Company,
hold office until the conclusion of ensuing
annual general meeting and are eligible for
re-appointment. The Company has received a
certificate from M/s Deloitte, Haskins & Sells,
Chartered Accountants, under Section 224(1)
of the Companies Act, 1956 confirming their
eligibility and willingness to accept the office of
the Statutory Auditors for the year 2009-10, if
re-appointed.
The Statutory Auditors of the Company have
submitted auditors’ report on the accounts of
the Company for the accounting year ended
March 31, 2009. In their report, they have made
an observation that loss on valuation of open put
derivative options could not be determined by the
Company due to certain reasons as specified in
Note 18 of the Notes to Accounts. The ultimate
outcome of these transactions and their effect
on these accounts cannot be ascertained at this
stage.
As you are aware that a major part of revenue of
your Company comes from export sales and as
such Company has foreign currency fluctuation
exposure. Your Company hedges its foreign
currency fluctuation exposure by way of foreign
currency derivative options. The Company has
taken various foreign currency options from
various banks and as at March 31, 2009, there
were certain open put options outstanding
having a maturity period up to January 2013.
These derivative options are proprietary products
of banks, which do not have a ready market and as
such are marked to a model, which is usually bank
specific instead of being marked to market. In the
view of the significant uncertainty associated
with the above derivative options whose ultimate
outcome depends on future events, the loss if
any, on such open derivative options cannot be
determined at this stage.
The other points of auditors’ report are self-
explanatory and needs no comments.
COST AUDIT
Pursuant to the provisions of Section 233B of the
Companies Act, 1956 and subject to the approval
of the Central Government, the Board of Directors
of your Company has re-appointed M/s Ramanath
Iyer & Co., Cost Accountants, New Delhi as Cost
Auditor for the accounting year 2009-10 to carry
out an audit of cost accounts of the Company in
respect of textile, paper and chemical divisions.
Directors’ Report (Contd.)
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Directors’ Report (Contd.)
CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
A statement giving details of conservation of
energy, technology absorption, foreign exchange
earnings and outgo, in accordance with Section
217(1)(e) of the Companies Act, 1956, read
with the Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988, is
given as Annexure I hereto and forms part of this
report.
DISCLOSURE ON ESOP
The Abhishek Employee Stock Options Plan, 2007
has been constituted in accordance with the
Securities and Exchange Board of India (Employee
Stock Options Scheme & Employee Stock Purchase
Scheme) Guidelines, 1999. The relevant disclosure
on Company’s stock options scheme as per these
guidelines has been provided in Annexure II hereto
and forms part of this report.
PARTICULARS OF THE EMPLOYEES
As per the provisions of Section 217(2A) of the
Companies Act, 1956, the statement of particulars
of the employees, etc forms part of this report.
However, as per the provisions of Section 219(1)
(b)(iv) of the Companies Act, 1956, the annual
report excluding the abovesaid information is
being sent to all the members and other entitled
persons. Any member interested in obtaining such
particulars may write to the Company Secretary
at the registered office of the Company.
RESPONSIBILITY STATEMENT OF
DIRECTORS
A Directors’ Responsibility Statement, setting out
the requirements pursuant to the provisions of
Section 217(2AA) of the Companies Act, 1956 is
annexed as Annexure III hereto and forms part of
this report.
ACKNOWLEDGEMENTS
It is our strong belief that caring for our business
constituents has ensured our success in the
past and will do so in future. Your Directors
acknowledge with sincere gratitude the
co-operation and assistance extended by the
Central Government, Government of Punjab,
Government of Madhya Pradesh, Financial
Institution(s), Bank(s), Customers, Dealers,
Vendors and society at large.
Your Directors also wish to convey their
appreciation for collective contribution & hard
work of employees across all level. The Board,
also, takes this opportunity to express its deep
gratitude for the continued co-operation and
support received from its valued shareholders and
their confidence in Company’s management and
look forward to their continued support in future
too.
For and on behalf of the Board
S K Tuteja Rajinder Gupta
Chairman Managing Director
Place : New Delhi
Date : July 23, 2009
25Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
Energy conservation measures taken by the Company has resulted in saving of energy and reduction in cost of production
ANNEXURE I to the Directors’ Report
1.4 Total energy consumption and consumption per unit of production as per form a of the annexure in respect of industries specified in the schedule thereto:
Particulars UnitsYear ended
31.03.2009Year ended
31.03.20081.4.1 Power and fuel consumption 1.4.1.1 Electricitya) Purchased
Units MWH 75985 86003Total amount Rs Million 328.08 372.69Rate per unit Rs/KWH 4.32 4.33
b) Own generation i) Through diesel generator
Units MWH 206 218Units/litre of diesel KWH 3.33 3.40Cost per unit Rs/KWH 9.81 8.06
ii) Through Steam turbine/generatorUnits MWH 269010 158417Units per tonne of steam KWH 148 156Cost per unit Rs/KWH 3.57 4.12
1.4.1.2 CoalQuantity MT 222118 79669Total amount Rs Million 736 319.77Average Rs/MT 3312 4014
1.4.1.3 Furnace Oil1.4.1.4 Other /Internal Generation
Information as per section 217(1) (e) read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 and forming part of the directors’ report for the year ended March 31, 2009.
1. CONSERVATION OF ENERGY 1.1 Energy conservation measures taken: 1. Reduction in power consumption by increasing flow of chilled water 2. Installation of eco ventilator in process house and sizing area 3. Optimum use of H-plant and reducing its power consumption by re-engineering 4. Maintaining the power factor 0.97 through out the year by proper utilization of capacitors
so that system loss is minimum 5. Installation of HT capacitors, Energy Monitoring Systems (EMS) and Variable Frequency
Drives (VFDs) 6. Installation of timers and stabilizers for all lighting in lighting distribution panel
1.2 Additional investments and proposals, if any, being implemented for reduction of consumption of energy
1. Installation of HPA system in humidification plant 2. Re-engineering of humidification plant and compressor line to optimize the pressure
systems 3. Reduction of unburnt carbon residue to improve boiler efficiency 4. Energy Audit for process improvements and reduce power consumption
1.3 Impact of measures taken at 1.1 and 1.2 above for reduction of energy consumption and consequent impact on the cost of production of goods:
On account of the aforesaid measures adopted by the Company, considerable saving of energy & reduction in cost of production has been achieved. However, the power consumption per kilogram as compared to the previous year in paper & yarn has increased because of new technology absorption and increase in the production of value-added products, which require a substantial amount of extra energy.
Abhishek Industries Limited26About Abhishek Inspired by ChallengeManaging Director’s
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ANNEXURE I to the Directors’ Report
2. TECHNOLOGY ABSORPTION Efforts made in technology absorption as per Form B RESEARCH & DEVELOPMENT (R & D) 2.1.1 (a) Specific areas in which R & D carried out by the Company: 1. New product development in textile - organic yarn, FLO yarn, cotton covered lycra
yarn, karded slub yarn, cotton/soya, 100 % synthetic and synthetic blended yarn in both R/F and TFO, Quick dry towel, eco friendly zero twist without using PVA, herbal dyes
2. Developing fine zero twist yarn in cotton, cotton/modal and cotton/bamboo up to 20s Ne
3. New product development in paper- Copier Paper under the name of Spectra-75 GSM and MY Choice Copier-70 GSM with the use of GCC in alkaline sizing, surface sized maplitho paper under the name of Crystaline and Silver Line Paper
4. Impact of varying chlorine dioxide dosages on optical properties and shrinkage loss of straw and wood pulps
5. Pulp characteristics & its behaviour at various PFI refining levels
2.1.1 (b) Benefits derived as a result of the above R & D: 1. Increased process flexibility for running different types of yarns 2. Increase in Revenue and EBIDTA Margin
3. Improved brand image in market 4. Improvement in runnability of paper in Multi-color Offset Printing Machine 2.1.1 (c) Future plan of action: 1. Planning for increased share of value added and innovative products 2. Accelerate safety, health, and environment programs across the organization 3. Environment friendly products
4. Optimization studies of bleaching chemicals 5. Use of drainage aid for improvement in formation of paper and dryness of paper
after press section
2.1.1 (d) Expenditure incurred on R & D: Expenses incurred on R & D are booked under respective general accounting heads and as
such no amount can be quantified separately under the head of R & D expenses
2.1.2 Technology absorption, adaptation & innovation: 2.1.2 (a) Efforts, in brief, made towards technology absorption, adaption and innovation : 1. Installation of amsler core soun yarn and caipo slub yarn technology
Particulars UnitsYear ended
31.03.2009Year ended
31.03.2008
1.4.2 Electricity consumption per unit of productionProductCotton yarn KWH/kg 2.43 2.38Towel KWH/kg 2.49 2.51Yarn processing KWH/kg 2.23 2.54Paper KWH/kg 1.34 0.89Sulphuric acid KWH/kg 0.07 0.07
New product development in paper- Copier Paper under the name of Spectra-75 GSM and MY Choice Copier-70 GSM with the use of GCC in alkaline sizing, surface sized maplitho paper under the name of Crystaline and Silver Line Paper
27Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
ANNEXURE I to the Directors’ Report (Contd.)
2. Installation of latest technology in weaving, processing, cut stitch & pack in towel division. Improved productivity per person with the new automatic machines and expansion
3. Cost optimization with improvement in quality by new technology in process house 4. The ECF technology in new paper machine 5. The fibreline system is a modern environmentally sound process utilising an oxygen
delignification and a D-Eop-D sequence for final bleaching of pulp 6. Commissioning of latest state of art technology new paper machine 7. Commissioning of pasaban sheeter for improving the sheeting quality of paper 8. Use of alkaline sizing in copier and maplitho paper for photocopying and printing
2.1.2 (b) Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product development, import substitution, etc :
The company was able to cater to a large number of customers with multiple productsportfolio and a better quality based on environment-friendly technology. The manufacturingcosts were rationalized towards optimization.
2.1.2 (c) In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), following information may be furnished :
(i) Technology imported The latest state of the art technology in TFO, sectional warping , direct warping,
sizing machine, looms, material movement trolley, knotting machines, package dyeing machines, fabric dyeing machines, length cutting , length hemming machine, automatic cross cutting & hemming machines, supersonic lobtex PP clearer for manufacturing contamination free yarn, continuous pulping digester & ECF technology from world renowned suppliers, for improving productivity and product quality, besides reducing consumption of energy and scare resources.
(ii) Year of import 2004 to 2008
(iii) Has technology been fully absorbed? Yes
(iv) If not fully absorbed, areas where this has not taken place, reasons therefore and future plans of action.
Not Applicable
3. FOREIGN EXCHANGE EARNINGS AND OUTGO
3.1 Activities relating to exports, initiatives taken to increase exports; development of new export markets for products and services; and export plans
The Company is presently exporting its products to around 65 countries across the globe. The Company is growing its market base. Consistent efforts are being made to capture new avenues for exports.
3.2 Total foreign exchange used and earned(Rs million)
Particulars Current year Previous yearEarnings (FOB value of exports) 6861.5 5192.8Outgo (CIF value of imports) 1356.4 2300.4Travelling expenses 3.2 8.8Other expenses 103.6 98.8
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ANNEXURE II to the Directors’ Report
DISCLOSURE RELATED TO EMPLOYEE STOCK OPTION SCHEME OF THE COMPANY
In financial year 2007-8, the Company had introduced Abhishek Employee Stock Options Plan, 2007. The
plan was approved by the special resolution of shareholders passed on June 29, 2007 by way of postal
ballot. As per the plan, the Board of Directors can grant maximum upto 97,01,933 options. There has
been only one grant under this scheme till March 31, 2009. The grant was made during the financial
year 2007-8 by the Compensation Committee of the Board of Directors on July 9, 2007 under which
79,01,462 options to eligible employees of the Company were allotted. The options were granted at
the latest available closing market price prior to the date of meeting. The Company calculates employee
compensation cost using the intrinsic value of option.
The relevant information with respect to Company’s stock options plan as on March 31, 2009 is given
below:
Details of Options
Total option granted 79,01,462
Exercise price Rs. 17.55
Options vested 5,85,039
Options exercised Nil
Total no. of shares arising as result of exercise of options Nil
Options lapsed * (*Lapsed options include options forfeited and options cancelled / lapse)
24,14,026
Variation in terms of options None
Money realised by exerise of options Nil
Total number of options in force 54,87,436
Employee wise details of options granted to:
- Senior managerial personnel** Name of employees are not given keeping in view the sensitivity
13,36,376
- Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year
None
- Employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding warrants and conversions) of the company at the time of grant
None
DIFFERENCE BETWEEN INTRINSIC VALUE AND FAIR VALUE OF STOCK OPTIONS AND IMPACT
OF THIS DIFFERENCE ON NET PROFIT AND EPS
Pro forma adjusted net income/(loss) and earning per share
Net Profit/(loss) as reported (Rs million) (530.4)
Add: Intrinsic value compensation cost (Rs million) 0
Less: Fair value compensation cost (Rs million) 17.7
Adjusted Pro forma net profit/(loss) (Rs million) (548.1)
EARNING PER SHARE (RS)
Basic Diluted
As reported (2.64) (2.64)
Adjusted Pro forma (2.73) (2.82)
29Directors’ Report Corporate
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Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
WEIGHTED AVERAGE EXERCISE PRICE AND WEIGHTED AVERAGE FAIR VALUE OF OPTIONS
GRANTED DURING THE YEAR(Rs)
Particular Exercise Price Fair Value
Exercise price equals market price 17.55 8.81
Exercise price is greater than market price Not applicable Not applicableExercise price is less than market price Not applicable Not applicable
DESCRIPTION OF METHOD AND SIGNIFICANT ASSUMPTIONS USED TO ESTIMATE THE FAIR
VALUE OF OPTIONSThe fair value of the options granted has been estimated using the Black-Scholes option pricing model. Each tranche of vesting have been considered as a separate grant for the purpose of valuation. For estimation of fair values of option, following weighted average values have been used for options granted:
Stock price 17.70
Volatility 63.33%Risk free rate 7.68%Exercise price 17.55Time to maturity 5.50Dividend yield 3.11%
ANNEXURE III to the Directors’ Report
Directors’ Responsibility Statement pursuant to the provisions of Section 217 (2AA) of the
Companies Act, 1956 and forming part of the Directors’ Report for the year ended March 31,
2009.
The statement of the Directors’ responsibility on the annual accounts of the company for the year ended
March 31, 2009 is provided below:
i) That in the preparation of the annual accounts, the applicable accounting standards had been followed
along with proper explanation relating to material departures.
ii) That the Directors had 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 as at March 31, 2009 and of the profit/loss of the Company for the
year ended March 31, 2009.
iii) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956 in safeguarding the assets of
the Company and for preventing and detecting fraud and other irregularities.
iii) That the Directors had prepared the annual accounts on a going concern basis.
For and on behalf of the Board
Place: New Delhi S K Tuteja Rajinder Gupta
Date: July 23, 2009 Chairman Managing Director
Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 in safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities
Abhishek Industries Limited30About Abhishek Inspired by ChallengeManaging Director’s
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MANAGEMENT’S DISCUSSION AND ANALYSIS
Through this report, the management shall look at the future, explore the different frontiers, identify the trends and present arguments on how it should gear up for the threats and advantages. This comprehensive report analyses the impact of the business environment on the Company’s performance and should be read in conjunction with the audited financial statements and notes for the year ended March 31, 2009 and the audited financial statements and notes for the year ended March 31, 2008. All references to ‘AIL’, ‘Abhishek’, ‘we’, ‘our’ or the ‘Company’ in this report refer to Abhishek Industries Limited and should be construed accordingly.
BUSINESS OVERVIEWThe Company primarily operates in textiles, papers and chemicals segment. The Company, over a period of time has added 50 MW capacities for power generation. The energy segment of the Company is presently catering to the power needs of all the three businesses of the Company.
The Company has manufacturing set up based in Barnala, Punjab and the Corporate office is located at Ludhiana, Punjab. As part of geographical derisking and diversification, the Company has set up a new yarn project at Budni, Madhya Pradesh. This is the first manufacturing venture of the Company outside the state of Punjab.
The Company is a recognized player in its respective segments and respected for its professional ethics, state of art technology, innovative concepts and quality management.
ECONOMY OVERVIEWIndia has displayed admirable fortitude in the face of the global economic crisis. As economic distress looms over US, UK, Europe and Japan, global real GDP is forecasted to decline by 0.5 percent to 1 percent as in 2009 as against a growth rate of 3.2 percent in 2008-a clear indication of challenges ahead.
After clocking an average annual growth rate of 8.9 percent during last five years i.e. 2004-5 to 2007-8, growth has stagnated in the financial year 2008-9, due to the the global financial crisis.
The global economic crisis has had quantifiable
repercussions across the primary, secondary and tertiary sectors in the economy. The industrial sector is estimated to grow by a mere 4.2 percent as compared to 7.4 per cent in 2007-8. The slowdown has been majorly attributed to the deceleration in the manufacturing sector, which is estimated to grow by a nominal 4.1 percent during 2008-9 as compared to 8.2 percent last year.
The last year had started with a strong economic performance for India, but the momentum was lost as the months passed, as India faced the ripple effects of the gloom in the global economy. The global economic crisis, took a turn for the worse in September 2008 with the collapse of several international financial institutions, including investment banks, mortgage lenders and insurance companies. India’s growth rate was less than hoped as its exports shrank at the end of 2008.
TEXTILE INDUSTRY OVERVIEWThe Indian textile industry is one of the oldest and most significant industries in the country. It accounts for around 4 per cent of the gross domestic product (GDP), 14 per cent of industrial production and over 13 per cent of the country’s total export earnings. In fact, it is the largest foreign exchange earning sector in the country. Moreover, it provides employment to over 35 million people.
The Indian textile industry is estimated to be around US$ 52 billion and is likely to reach US$ 115 billion by 2012. The domestic market is likely to increase from US$ 34.6 billion to US$ 60 billion by 2012. It is expected that India’s share of exports to the world would also increase from the current 4 per cent to around 7 per cent during this period.
India’s textile exports have shot up from US$ 19.14 billion in 2006-7 to US$ 22.13 billion in 2007-8, registering a growth of over 15 per cent.
India is facing increased business opportunities in the domestic retail sector due to skewed population towards the young, an increase in disposable incomes and a rapid growth in organised retail.
Consequently, the domestic market is estimated
The management of the Company has devised an ongoing system to assess the operations of the Company on real time basis. The Company is proactively engaged in a formulaic approach towards the handling of critical projects and is attentive to the pre requisites. The Company prioritizes opportunities, strategise decisions and embark on expansions.
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to grow to over US$ 50 billion by 2014. Significantly, the textile sector is estimated to offer an incremental revenue potential of no less than US$ 50 billion by 2014 and over US$ 125 billion by 2020.
The textile industry has attracted FDI worth US$ 850 million during August 1991 and December 2008.
India is speeding towards attaining the status of a global player in textile and apparel-sourcing with its abundant multi-fibre raw material base, well established production bases, design capability and skilled labour force.
Government InitiativesIn an effort to increase India’s share in the world textile market, the government has introduced a number of progressive steps:
100 per cent FDI allowed through theautomatic route
De-reservation of readymade garments, hosiery and knitwear from the small-scale industries sector in end-2000
Technology Mission on Cotton was launched in February 2000 to make quality raw material available at competitive prices
Technology Upgradation Fund Scheme (TUFS) which was launched to facilitate the modernisation and upgradation of the textiles industry in 1999 has been given further extension till 2011-12. A total of 18773 applications involving a project cost of US$ 24.91 billion have been sanctioned under TUFS upto March 31, 2008
40 textile parks are being set up under the Scheme for Integrated Textile Parks (SITP) which will attract an investment of US$ 4.38 billion
In the face of a global meltdown, the government has come out with an economic stimulus package for the textile industry. This includes:
Additional allocation of US$ 285.66 million to clear the entire backlog in TUFS, which would enhance cash flow of the exporters
Extension of interest rate subvention of 2 per cent on pre and post shipment credit
Additional fund of US$ 224.42 million for refund of terminal excise duty
ABHISHEK’S YARN DIVISION INITIATIVESThe Company is one of the largest yarn spinners
of India with spinning capacity of 1,25,952 spindles at single location. The Company has total spinning capacity of 1,76,352 spindles and also has 1920 rotors.
The year under review has witnessed special focus on value added products as recognized to be the major drivers of growth. To this effect, the division has undertaken modernization and expansion of capacity leading to increase in turnover.
Optimization of resources, lean manufacturing and energy saving techniques have been the cornerstones of the year improving productivities and other operational parameters.
The Company is perpetually engaged in the process of making efforts to be globally relevant in a competitive scenario and therefore is expanding the spinning capacity by 1,00,800 spindles at Budni in Madhya Pradesh. The first phase of this expansion consisting of 50,400 spindles has already been completed. The expanded capacity would concentrate on manufacturing special yarns like compact, elli-twist, corespun and special cottons like supima, organic and giza. This would foster expansion of product base with count range extending to Ne 60. The Company has adapted the latest technology, encourages better customer relationships and religiously organizes yarn dealers’ meets to the effect.
Strengths and OpportunitiesTechnology: The division has adopted state of art technology and is abreast of all the current advancements in the field due to its attempts of accumulating technological updates.Projected growth of textile industry: Considering the immense growth potential of Industry, companies like us who have implemented process and technology of global standards can live on substantial hopes of success. Access to raw materials: The major raw material, cotton is sourced locally following the Company’s principle of establishing integrated synergies in raw material sourcing, manufacturing facilities and markets, therefore helping in lean manufacturing. Geographical diversification: The Company is setting up textile facility at Madhya Pradesh for fine counts which would enhance the division’s product basket and hence increase customer base.
Challenges and ThreatsIncreased competition: The increase in
Optimization of resources, lean manufacturing and energy saving techniques have been the cornerstones of the year improving productivities and other operational parameters
Abhishek Industries Limited32About Abhishek Inspired by ChallengeManaging Director’s
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capacity in the yarn spinning industry in recent time and globalization momentum have led to manifold increase in competition internationally as well as domestic.
Cotton sourcing: Government intervention in fixing Minimum Support Price (MSP) has badly impacted international competitiveness of industry and likely to have the impact in the future as well.
Capital ExpenditureThe Company is setting up 1,00,800 spindles at Budni, Madhya Pradesh which involves a total capital outlay of Rs 3,737 million. This project is being implemented in phased manner. The first phase of expansion consisting of 50,400 spindles has been completed in April 2009 and the second phase is scheduled to be fully operational during the third quarter of financial year 2009-10.
TERRY TOWEL INDUSTRY OVERVIEWTerry towels constitute 6-9 percent of the overall Home Textile assortment. In the US market, the major market share is with the retailers (discount stores, department stores, specialty stores etc). Owing to the financial challenges and tough market scenario the towel sales registered a major reduction during the year but Abhishek was able to maintain its growth trajectory. The market is becoming more matured in terms of product needs. From a generic product market, a shift is seen towards products with functional attributes like quick dry, anti microbial etc.
India along with China, Pakistan and Brazil has major manufacturers for the terry towel industry. The industry faces major challenges due to the volatility of foreign exchange and input costs. This however is hardly unusual since any global industry would face such challenges in a bid to keep the price competitive.
ABHISHEK’S TERRY TOWEL DIVISION INITIATIVESThe Company is one of the World’s largest terry towel manufacturers. As a value added segment having a continuous growth momentum, the terry towel business is the most important source of export earnings and international recognition for the Company.
The year 2008-9 was a challenging year for the Company. In the beginning of the year, a steep rise in the commodity prices was witnessed,
which resulted in the higher manufacturing costs hitting the bottom line. However the prices were normalized towards the end of the year. Further in the current retail environment there were lesser opportunities in the market. The Company has seen very competitive prices being quoted despite the scanty opportunities in the market. This has also given an opportunity to the Company to expand in markets other than US and focus on Brand alliances.
During the year under review, the Company has added new products like super fine zero twist, anti microbial towel , super absorbant towel , quick dry towel , organic slub towel and many more. The Company is constantly expanding/modernizing its manufacturing capacities with an objective to attain increased volumes with lower overheads, better quality and replacement of old technology with the latest world class technology.
The improvement initiatives along with viable vision initiatives based on theory of constraints were continued to enhance operational efficiencies, customer satisfaction and market share.
Entering the Domestic MarketIndian market in itself offers tremendous opportunity for the Company. The growth in shopping space and need for Home textiles product has positive bearings for the Company. The Company is aggressively aiming to tap the domestic market. The Company’s prime focus is to build brand for its towels & toweling products in the national market and enlarge distribution channel for the products to reach masses. It is also working to customize products to suit all Indian needs.
Strengths and OpportunitiesTechnology: State-of-the art technology, machinery know-how from the best international suppliers and vertically integrated plants, gives the Company a very strong footprint in the industry.
Reliability: A strong client base and a great track record in terms of client servicing backed by technology, supply chain partnerships and on time delivery are key strengths.
Markets: Latin America, Middle East, Eastern European and Domestic markets are an opportunity to spread business.
Challenges and ThreatsIncreased competition: This segment faces
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competition within India and from neighboring countries. The globalization has intensified competition.
Logistics: The distance between plant and ports increases supply time and cost.
Product’s lifecycle: The long life cycle of towels could stagger fresh off take.
Agriculture based raw-material: The major raw-material is cotton yarn where prices are driven by uncertainties of weather, size of world crop and Govt. regulations on Import/Export trade.
Capital ExpenditureThe Company has undertaken another expansion project of its Terry towel division under which Company is upgrading its existing 18 looms and 24 new looms are being set up. This project is being implemented in textile park developed by Lotus Integrated Texpark Limited, a special purpose vehicle, with a capital outlay of Rs 359.8 million and shall be completed by second quarter of financial year 2009-10.
PAPER INDUSTRY OVERVIEWGlobal paper market is dominated by North America, Europe and Asia. Current global paper and paperboard consumption is around 395 million MT, which is expected to grow to 420 million MT by 2010. For the fast developing Asian markets, their share in global paper and paperboard consumption has risen to 35 per cent from the 32 per cent in the last couple of years; and expected to grow even further. The share of mature markets like North America and Europe is expected to fall to around 50 per cent by 2010.
Asia’s principal markets are China, Japan, India, Malaysia, Singapore and Thailand. India, with a per capita consumption as low as 8.2 kg, clearly has a long way to go, as compare to Japan (250 kg), China (45 kg) and the world average (56 kg). With social development in terms of increased education levels, there is considerable headroom for increasing paper consumption in India. Global demand is expected to increase at a rate of 2.4 percent and India by 6.7 percent.
In the first half of FY 2008-9, Indian paper industry was booming and demand leading the supplies and prices going up. But in second half, with the newer capacity addition, supplies started leading the demand, which started increasing pressure on prices. The scenario got worst with lot of factors
coming into play viz; industry down cycle, rate of capacity addition leading the rate of increase in demand, change in consumption pattern, cheaper imported material from China, Malaysia, Singapore, Thailand, which has lead to pressure on domestic pricing.
In these conditions, only way to survive is to control the cost of production and simultaneously build the brand through quality and increase the share in value added products like copier & business stationary.
Overall demand is expected to get steady in second quarter of FY 2009-10, and it can start catching its pace in third and fourth quarter of financial year.
ABHISHEK’S PAPER DIVISION INITIATIVESThis has been a year of expansion, growth and looking ahead into a future which promises to yield results and would take the Company to a new dimension of success. The major concern this year has been to stabilize new plant and establish the Company in the market as “A” grade mill with quality product range. This paper plant expansion at Barnala is anticipated to produce fruitful results in the field of writing & printing paper.
With completion of this expansion, the Company has emerged as first agro-based paper manufacturer of India to use Elemental Chlorine Free (ECF) technology.
The Company has launched its own brand of Copier paper called ‘SPECTRATM COPIER’ which has helped Company to move forward from commodity segment to customer oriented Organization. The Company is producing high quality paper which is getting utilized in the manufacturing of diaries, notebooks and text books. Its customer base has increased substantially with strong services & quality products.
Strengths and OpportunitiesTechnology: The Company has installed modern and hi tech paper & pulp machine with world class art of technology.
Environmental friendly: The Company has already been complying with the CREP environmental norms and saves 5,000 trees per day as compared to 100 percent wood pulp based units. Also the Company has adopted ECF technology.
Proximity to raw material: Agro residues are sourced locally leading to saving in logistics cost
A strong client base and a great track record in terms of client servicing backed by technology, supply chain partnerships and on time delivery are key strengths
Abhishek Industries Limited34About Abhishek Inspired by ChallengeManaging Director’s
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Capacity enhancement: The Company has expanded its manufacturing capacity which would enable it to widen its product basket.Better realization: Excise duty on paper has been cut from 8 percent to 4 percent, giving manufacturing companies a better realization benefit during recession.
Challenges and ThreatsCompetition: Capacity expansion by a number of players, a sign of tough competition ahead, has and will prove a deterrent. Decrease in consumption: Due to global recession, overall consumption of paper has gone down and export market is getting hit. Even imported quantities are coming in huge stocks and expected to create tough competition in market. Crop pattern: Movement for changes in crop pattern and environment factor may lead to raw material scarcity
Capital ExpenditureThe Company has recently completed its integrated state of the art paper & pulp expansion project with installing paper machine having capacity of 1,25,000 tpa; pulping facility having capacity of 90,000 tpa and a captive power plant of 20 MW with a capital investment of Rs 8,250 million. In the current year, the Company is undertaking a debottlenecking and process streamlining project with a capital outlay of Rs 400 million.
CHEMICAL INDUSTRY OVERVIEWThe chemical industry in India is well established and has recorded a steady growth in the overall Indian industrial scenario. The chemical and allied industries have been amongst the faster growing segments of the Indian industry. The chemical industry is highly heterogeneous encompassing many sectors like organic and inorganic chemicals, dyestuffs, paints, pesticides and specialty chemicals. Some of the prominent individual chemical industries are caustic soda, soda ash, carbon black, phenol, acetic acid, methanol and azo dyes.
Currently, there is tremendous scope for growth in chemical sector. The per capita consumption of chemicals in India is well below the prevailing world level.
ABHISHEK’S CHEMICAL DIVISION INITIATIVESThe Chemical Division has facility to produce 1,00,000 tonnes per annum of sulphuric acid and the Company also produces battery grade
sulphuric acid. The chemical division caters to the need of leading battery manufacturers, detergent industry, zinc sulphate industry, alum manufacturing, dyes & chemicals and fertilizer industry etc.
Marketing of sulphuric acid is strategically planned so as to utilize full potential of the installed capacity. In this direction, strategic purchase of sulphur is being done as sulphur is the main raw material and contributes to more than 50 percent cost of production.
Strengths and OpportunitiesCapacity: Maximum production capacity in entire Northern regionInventory: Low inventory carrying costs for customersValue added services: Increasing revenue & profitability from offering value added services to customers
Challenges & ThreatsRaw material: Forecasting of sulphur prices & availability of sulphurClient base: Customer retention & new customer developmentSubstitution: Alternate products available in the market wherever possible.
POWER SECTOR OVERVIEWThe power & energy infrastructure sector in India is poised for a major take-off. The present installed capacity is inadequate for the nation’s needs, and there are plans for rapid growth. The APDRP (Accelerated Power Development & Reforms Programme 2002 - 2012) has seen an addition of around 22,000 MW during last five years. And during the next five years, a capacity addition of over 78,000 MW has to be setup by 2012.
The Market potential to sustain the GDP growth rate of India @ 8 percent plus per annum needs the power sector to grow at 1.8 - 2 times the GDP rate of growth as espoused by economists, planners and industry experts. This would mean a YOY capacity addition of 18,000 - 20,000 MW to achieve this ambitious plan of moving India to a developed economy status, as an economic global powerhouse. The target mission : ‘POWER for All by 2012’ would mean achieving the target of 1000 KwHr (Units) of per capita consumption of electricity by this period. To achieve this goal, the engagement of the private sector gains significance.
The net sales of paper & chemicals division witnessed a significant increase of 75 percent in FY 2008-9 with increase in total production of paper
by 65 pecent
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The share of textile segment in external sales contributed to 78 percent, which is lower, compared to 84 percent in the preceding year. During the FY 2008-9, yarn sales grew by 15 percent over the preceding year. Yarn production decreased by 5 percent, due to change in product as well as count mix. The division during the year also concentrated on production of value added yarn. The proportion of external sales to the total sales of yarn increased from 66 percent in FY 2007-8 to 71 percent in FY 2008-9. The contribution of Yarn division to the net sales of the company decrease marginally from 28 percent in FY 2007-8 to 24 percent in FY 2008-9. Inspite of increase in revenue, the division’s PBIT registered a decline of 83 percent over the preceding year’s level due to increase in raw material prices.
The net sales of Terry towel division grew by 30 percent in FY 2008-9, whereas the total production of terry towels increased by 15 percent. The net realization per unit of sale increased by about 20 percent in FY 2008-9 owing to depreciation of Indian rupee vis-à-vis the US dollar. The contribution of the towel to the net sales of the company decreased marginally from 55 percent in FY 2007-8 to 54 percent in FY 2008-9. The Company has taken forward contracts and option deals to hedge its export sales. Due to adverse currency movements, the Company suffered losses in these hedged position, as a result the terry towel division’s PBIT decreased by 116 percent in FY 2008-9.
The net sales of Paper & chemicals division witnessed a significant increase of 75 percent in FY 2008-9 with increase in total production of
paper by 65 percent. The increase in production is in line with capacity enhancement of paper division with the state of the art technology which was stabilized and started commercial production during the Q3 of FY 2008-9. The sale of chemicals, primarily sulphuric acid, too registered a growth but this increase was more than offset by the rise in prices of raw materials including those of sulphur, which recorded a historic increase in its price in the FY 2008-9. Overall PBIT of division registered a growth of 47 percent in FY 2008-9.
ExpenditureRaw material costRaw material forms the largest component of the total expenditure incurred by the Company. The cost on this account rose by 34 percent in absolute terms in FY 2008-9 against the 43 percent increase in FY 2007-8. During the year under review, the quantity of raw material consumed went up due to increase in production by different business units and the businesses witnessed a sharp increase in prices of raw materials during the FY 2008-9. As a percentage of the net sales, cost of raw material has remained same at 51 percent in FY 2008-9. As bulk of the raw material sourced by the Company is agro-based, the Company is exposed to the resultant price fluctuations on account of monsoon and crop success.
Manufacturing expenditureThe manufacturing cost as a proportion of net sales of the Company decreased from 15 percent in FY 2007-8 to 13 percent in FY 2008-9 on account of topline growth, cost cutting measures and increase in captive consumption of power of the Company.
ABHISHEK’S ENERGY DIVISION INITIATIVESThe Company has made investment in power generation in its effort to be self reliant for its energy needs. The in-house generation of power leads to an uninterrupted supply for the smooth production process, meeting delivery schedules and cost saving.
FINANCIAL ANALYSIS WITH RESPECT TO OPERATIONAL PERFORMANCERevenuesThe net turnover of the Company increased by 33 percent to Rs 13,980.6 million in FY 2008-9. Of the total turnover, Rs 6,861.5 million was on account of income from exports. A snapshot of segmental financial performance for the FY 2008-9 and its comparison with the preceding fiscal year is tabulated below:
(Rs Million)
DivisionCurrent year Previous year Growth
Sales * PBIT Sales * PBIT Sales * PBITYarn 3397.0 58.4 2948.3 334.6 15% -83%Towels 7560.5 (95.3) 5814.1 579.0 30% -116%Paper & Chemicals 3023.1 326.3 1724.3 222.0 75% 47%* Excluding inter-segment sales
Abhishek Industries Limited36About Abhishek Inspired by ChallengeManaging Director’s
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Manpower costThe manpower cost as a proportion of net sales of the Company decreased from 12 percent in FY 2007-8 to 9 percent in FY 2008-9. Reduction in personnel cost is mainly due to capacity growth & improvement in operational efficiency in different business units.
Selling costThe Company is constantly endeavoring to bring down its distribution and supply chain management costs. The selling cost declined from 6 percent of net sales in FY 2007-8 to 5 percent in FY 2008-9.
Administrative costThere is no significant change in administrative cost from previous year as percentage of net sales. Administration cost stands at 3 percent of net sales for the year.
DepreciationA sum of Rs 1,159.3 million had been provided towards depreciation during the year under review. The cost on account of depreciation in absolute terms stands increased by 34 percent in FY 2008-9. The significant increase in depreciation is witnessed on account of new capacity of paper business & expansion in towel business of the Company.
Profits and ProfitabilityThe earnings before depreciation interest and taxation (PBDITA) increased from Rs 1,540.0 million in FY 2007-8 to Rs 2,605.3 million in FY 2008-9. The Company incurred a net loss of Rs 530.4 million during the year due to foreign exchange loss. The Company had negative earning per share as on March 31, 2009 of Rs 2.64 on face value of Rs 10.
Balance Sheet ReviewThe balance sheet size of the Company increased to Rs 2,0361.4 million in FY 2008-9 as compared to Rs 1,7952.9 million during the preceding fiscal year on account of capital expenditure incurred by the Company for augmenting its manufacturing capacities.
Share capital and equity warrantsThe total paid up share capital of the Company increased to Rs 2,221.9 million during the FY 2008-9 as compared to Rs. 1,941.9 million during the preceding fiscal year. One equity share of the Company is having a face and paid up value
of Rs 10. The book value of each share stood at Rs 20.09.
During the FY 2008-9, the Company has allotted 2,80,00,000 equity shares of Rs 10 each at a premium of Rs 11.30 per share on conversion of equivalent number of warrants issued on preferential basis. The proceeds received from this issue have been utilized towards meeting part of capital expenditure for Integrated paper and pulp project of the Company.
Reserve and surplusThe Company recorded a loss of Rs 5,30.4 million during the year under review. Thereby reserves stood at Rs 2,241.5 million as on March 31, 2009 against Rs 2,450.4 million in the preceding year.
Secured and unsecured loansThe total borrowing of the Company increased from Rs 12,855.9 million in FY 2007-8 to Rs 15,569.0 million in FY 2008-9. Secured loans, which amount to Rs 15,536.9 million, form a predominant part of the total borrowings. The Company is maintaining its basket of borrowings in such a manner, which enables it to maintain a lower cost of funding.
Fixed assets and investmentsThe Company’s gross block stood at Rs 21,032.1 million compared to Rs 13,273.2 million recorded at the end of the preceding financial year. This increase in gross block is on account of substantial enhancement in paper capacity & increase in looms in the towel division.
The Company has recently (in Q1 of FY 2009-10) completed Phase I of yarn expansion project in Budni, Madhya Pradesh wherein 50,400 spindles have been added. The expansion programme comprising of another 50,400 spindles at Budni and expansion of looms in towel division at Dhaula are at advance stage of implementation.
Working capitalThe net current assets of the Company decreased from Rs 2,784.8 million to Rs 2,363.7 million in FY 2008-9. The Company continues to purchase cotton at strategic points since it is available seasonally and is maintaining sufficient inventory levels and in turn avoid any disruption in the production of yarn. As regards other raw materials that are available throughout the year, the Company deploys just in time (JIT) method in order to minimize the carrying costs of inventory.
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The Company’s approach to leadership development, business transition, diversity, and human resource planning continued to add value to organizational effectiveness
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACYThe Company has designed an internal control system which is independent and has objective assurance and consulting activity designed to add value and improve an organization’s operations. The prime objective of internal control system is to bring a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.
The internal control and audit framework is robust and rigorous considering the size and scale of the organization, complexities faced overall risk profile of the Company. The internal auditors strive to assess the control and governance process for the organization. The Company has also retained management auditors to periodically review the adequacy of the system and refinement of processes followed.
The internal audit report along with plans, significant audit findings, compliance with accounting standards, is in turn reviewed by the Audit Committee of the Company to ensure the proper audit coverage, adequate consideration along with execution of recommendations of auditors.
IMPROVEMENT INITIATIVESThe volatile, competitive and fast paced environment continuously pushes the Company to look for opportunities for performance improvement. The Company also continued with various ongoing and adopted certain new initiatives.
During the year under review, the Company continued to strive for a cost savvy, cleaner, healthier and safer working environment. These initiatives inter-alia included viable vision, lean manufacturing, organization infrastructure review, PMS, leadership development, kaizen, 5S, six sigma, etc. Also the Company adopted daily/hourly monitoring, empowerment of middle management, dashboard, collaborative leadership; which led to tangible and intangible gains for the Company.
HUMAN RESOURCE MANAGEMENT & INDUSTRIAL RELATIONSHuman Resources, as a strategic business partner, strive to provide support to the organization through the delivery of key business outcomes.
During the year under review, the company continued to enhance its activities in all areas of human resource management and facilitation including labour relations, client services, organizational development, occupational health and total compensation.
The Company’s approach to leadership development, business transition, diversity, and human resource planning continued to add value to organizational effectiveness. HRM’s organizational strength is our people Human Resources is well positioned to assist the organization in its efforts to attract, motivate and retain a highly talented workforce.
Workforce CompositionThe company’s organizational structure is - IB, DC, Frontline Entrepreneur, Facilitators and Operatives. Towards the close of the financial year under review, the total strength of the Company was around 9200 employees. The Average age of the organization talent is 27.5, a judicious mix of youth and experience.
Management Team Institution Builder (IB) 19Development Coaches (DC) 140Frontline Entrepreneurs (FLE) 406Total 565
OUTLOOKThe Company is pretty excited in its outlook. The stabilization of paper plant coupled with operational improvement in textile plant is expected to yield handsome results. The eco-friendly technology, massive capacities, improvement initiatives, motivated manpower make our outlook pretty optimistic.
CAUTIONARY STATEMENTThis discussion contains certain forward-looking statements based on current expectations, which entail various risk and uncertainties that could cause the actual results to differ materially from those reflected in them. The actual could be materially different from the one stated herein below. Market data and product information contained in this report is gathered from published and unpublished reports and their accuracy cannot be assured.
The management reserves every right to re-visit any predictive statement as may be deemed fit.
Abhishek Industries Limited38About Abhishek Inspired by ChallengeManaging Director’s
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CORPORATE SUSTAINABILITY REPORT
ECONOMIC SUSTAINABILITY
Risk management and framework:
Since the business environment of the Company
is too competitive and uncertainties and
business risks are so intricately wrapped up,
which at times are fundamental to the Company
which necessitates structured, consistent
and continuous process applied across the
organisation for identification and assessment
of risks, control and effective monitoring. During
the year, risk management systems were further
re-structured and fine-tuned to effectively
manage the risks confronted by the company.
The key elements of framework include a risk management strategy, risk management structure, risk portfolio management and measuring, monitoring and optimising. The implementation of the framework is supported through a criterion for risk assessment and categorization, a risk escalation matrix, risk register and MIS. The Company considers risk management to be one of the most critical components of its business framework. The Company continually works towards making risks as manageable as possible by means of efficient procedures and appropriate risk awareness. The approach to Risk management adopted by the Company is :
Abhishek Industries has been consistently working towards integrating CSR into the values,
culture, operations and business decisions at all levels of the organization. The Company adopts
a business approach that creates a long term shareholder value by embracing opportunities
and managing risks deriving from economic, environmental and social developments. At
Abhishek Industries, we tend to grow without damaging prospects of future generation.
Over the years, the nature of the company’s involvement with the community has undergone a
change. It has moved away from “charity & dependence” to “empowerment & partnership”.
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1. To continuosly identify and assess the risks incurred within all important business operations using a
uniform and methodical approach
2. To monitor implementation of the measures defined to counteract risks
3. To develop and continuously maintain a risk-oriented insurance strategy as a means of risk mitigation
4. Through Internal Audit which has a comprehensive framework of measurement and monitoring risks
Categorisation of Risk: Risks are categorized taking into consideration the factors and circumstances from
which they emanate. The below are the listed risks which may arise from external factors affecting the
Company or the internal factors from within the Company.
Strategy risk
Business segments
Substitution risk
Competition risk
Concentration risk
Operational risk
Force majeure
Cost competitiveness
Quality
Obsolescence risk
Proprietary risks/contingencies
Financial risk
Funding risk
Foreign currency risk
Receivable management risk
Working capital cycle risk
Legal, regulatory and
compliance risk
Contractual risk
Compliance and regulatory risk
Human resource risk Performance and attrition risk
Technology and information
system riskStorage and safety
Corporate Sustainability Report (Contd.)
Abhishek Industries Limited40About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
Corporate Sustainability Report (Contd.)
Risk management process
The process of risk management comprises of:
Identification and assessment of risks in the
context of the Company’s risk appetite
Categorization and recording of risks, which
assists in prioritization of risks
Control and mitigation of risks keeping in
view the risk appetite and development of
action plan depending upon risk retention,
risk mitigation and risk transfer
Review of risk control and mitigation
measures in order to check its effectiveness
and updating the same, if needed
To ensure economic sustainability of the Company,
the Company has adopted a proactive approach
to identify and mitigate risks confronted by the
Company.
ENVIRONMENT SUSTAINABILTY
The Company has lived to its commitment to
community with focus not just on commercial
aspect but from ecological perspective and is
continuously going for environment friendly
process and initiatives. The Company ensures
safer, healthier and pleasant environment in
working area as well as in community it operates
into.
The Company has formed SHE (Safety, Health &
Environment) committee with three task forces,
viz Safety, Health & Environment. Environment
task force is continuously focusing on all
parameters to improve environment not only for
the employees but also to save earth.
The Company has undertaken various initiatives
in above direction which include:
1. Environment friendly product development –
Paper with ECF Technology
2. Practicing 3r (reduce, reuse and recycle) &
waste management in Industrial plants
3. Energy conservation drives by installing
power saving technology on the machines
in the industrial plants and procurement of
energy efficient machines
4. Enhance recycle & reuse of treated effluent
for purposes of plantation, maintenance
activities in various sections of the industrial
plants
5. The Company has implemented rain water
harvesting to recharge the aquifers.
6. Upgradation of effluent treatment plant
(ETP)
7. Commissioning of a water treatment plant
(WTP) resulting into the use of the surface
water by industrial plants in place of ground
water and thereby saving ground water of
the area
8. Proper treatment of sewerage water through
STP (sewerage treatment plant) and use of
treated water for plantation to reduce waste
and also reduce water consumption
9. Producing organic yarn, which is totally
environmental friendly and having zero
pesticide
10. Adoption of cost effective cleaner
technologies, waste minimization techniques
and appropriate pollution control/abatement
technologies
11. Generate wealth from waste in various
processes in the industrial plants
12. Accreditation of manufacturing facilities of
the Company to ISO 140001
We continuously improve our environmental
programs and explore inventive solutions to save
our precious environment for future generations.
SOCIAL SUSTAINABILITY:
At Abhishek, we have a value system of sharing
and paying back to society which has been
cornerstone to the success of the Company. The
Company has created organizational structures to
support a wide range of activities in such areas
as environmental protection, social contribution,
human resource development, information
disclosure and compliance.
Some of the CSR initiatives taken by the Company
are highlighted as below:
The Company has created organizational structures to support a wide range of activities in such areas as environmental protection, social contribution, human resource development, information, disclosure and compliance
41Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
1. Continuous participation in development of
Sacred Heart School at Barnala
2. Formulation of ASMITA (women empowerment
cell) to particularly address the concerns of
female members
3. Conducting free medical check up camps
to address issues like general health care,
gynecological problems, orthopedic issues
and other health problems
4. Disaster management initiatives for outside
the premises of the Company in coordination
with civil authorities
5. Provision of residential colonies for operatives
at plant sites
6. Organized blood donations camps on a
regular basis
7. Funding the rural economy on a large scale
by way of outsourcing 20 percent of its
raw material from the adjacent areas and
villages
8. Imparting education to the females of the
adjoining villages on various social issues
9. Regular contributions to provide sponsorships
to aspiring professionals with in industry
10. Provision of canteens and residential colonies
for employees
HUMAN SUBSTANTIALITY
The Company is building internal competencies;
continue investment in people and infrastructure.
The Company is committed to respect the rights
of its employees and aim to promote human rights
within its sphere of influence by:
Transparent working environment
Social security and other medical coverage
Training programs from renowned faculties
Endeavors to be ‘Great Place to Perform’
Celebration of festivals in the organization at
all locations thereby strengthening TRIDENT
PARIVAAR
Discussing major initiatives through Large
Scale Interactive Process (LSIP) with
participation of all the members
And as far as general masses are concerned, the
Company is continually transforming its portfolio
of products to keep up with growing demand for
healthier choices through:
New products and approaches
Reformulation of existing products
Eco-friendly products
Healthy environment for future generations
The Company is committed to respect the rights of its employees and aim to promote human rights within its sphere of influence
Corporate Sustainability Report (Contd.)
Abhishek Industries Limited42About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
CORPORATE GOVERNANCE REPORT
COMPANY’S PHILOSOPHY ON CORPORATE
GOVERNANCE
Corporate governance at Abhishek cares for the
overall well-being and welfare of all constituent
of the system and takes into account the
stakeholders interest at every business decision.
The Company is committed to pursue growth by
adhering to the highest national & international
standards of Corporate governance. The
Company’s philosophy on Corporate governance
is based on following principles:
Lay solid foundation for management
Structure the Board to add value
Promote ethical & responsible decision-
making
Safeguard integrity in financial reporting
Make timely & balanced disclosures
Recognize & manage business risks
Respect the rights of the shareholders
Encourage enhanced performance
Remunerate fairly & responsibly
Recognize the legitimate interest of the
stakeholders
Legal & Statutory compliances in its true
spirit
The Board of the Company has adopted ‘Combined
Code of Corporate Governance and Conduct’
based on the principles of good corporate
governance and best management practices
being followed globally besides complying with
the needs of the law of land. The Combined
Code of Corporate Governance and Conduct is
available on the official website of the Company –
www.tridentindia.com.
BOARD OF DIRECTORS
The Board comprises of seven directors, of
which more than 71 percent are Non-executive
directors and 57 percent are Independent
directors. The Company has a non-executive and
independent chairman. Moreover, the Board has
a representation of 29 percent woman directors.
Two directors on the Board are executive directors.
None of directors on the Board is Member of more
than five Board level Committees as required
under the Code except Mr S K Tuteja. However,
he is not a member of more than 10 Board level
committees as required under clause 49 of the
Listing Agreement.
Board’s Definition of Independent Director
Independent director shall mean Non-executive
director of the Company who:
a) apart from receiving director’s remuneration,
does not have any material pecuniary
relationships or transactions with the
Company, its promoters, its senior
management or its holding Company, its
subsidiaries and associated companies;
b) is not related to Promoters, Chairman,
Managing director, Whole time director,
Secretary, CEO or CFO and of any person
in the management at one level below the
board;
c) has not been an executive of the Company
in the immediately preceding three financial
years;
d) is not a partner or an executive of the
statutory audit firm or the internal audit firm
that is associated with the Company, and
has not been a partner or an executive of
any such firm for the last three years. This
will also apply to legal firm(s) and consulting
firm(s) that have a material association with
the entity.
e) is not a supplier, service provider or customer
of the Company. This should include lessor-
lessee type relationships also; and
f) is not a substantial shareholder of the
Company, i.e. owning two percent or more of
the block of voting shares.
The Board of the Company has also decided that
materiality of relationship with directors shall be
ascertained on the following basis:
The concept of materiality is relevant from
the recipient’s point of view and not from
that of Company;
The term material needs to be defined in
percentage. Ten percent (10%) or more
of recipient’s gross revenue/ receipt for
the preceding year should form a material
condition affecting independence.
43Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
Corporate Governance Report (Contd.)
Based on the above test of independence, Mr S K Tuteja, Ms Pallavi Shroff, Ms Ramni Nirula and Mr Rajiv Dewan are categorized as Independent directors. Other details relating to the Board are as follows:
Name Designation CategoryShareholding in
Company(No. of shares)
No. of Directorships
held in all public Companies #
No. of Board Committees
memberships held in all public Companies @
No. of Board Committees
Chairmanships held in all public Companies @
Mr S K Tuteja Chairman Non-Executive, Independent - 14 10 5
Mr Rajinder Gupta Managing Director Executive 588,266 7 1 -
Ms Pallavi Shroff Director Non-Executive, Independent - 7 2 -
Ms Ramni Nirula Director Non-Executive, Independent - 4 1 -
Mr Rajiv Dewan Director Non-Executive, Independent 23,290 8 5 -
Mr Karan Avtar Singh Additional Director Non-Executive - 6 - -
Mr Raman Kumar Whole Time Director Executive - 5 - -
# including Abhishek Industries Limited and excluding private and foreign companies
@ Board Committee for this purpose includes Audit Committee & Shareholders’/Investors’ Grievance Committee (including Board Committees of Abhishek Industries Limited)
GOVERNANCE STRUCTURE
Company has laid a strong foundation for making corporate governance a way of life by constituting a
Board with balanced mix of experts of eminence & integrity, forming a core group of top level executives,
inducting competent professionals across the organization and putting in place best system, process and
technology.
RoleChampioning purpose & values, challenging
assumptions, inspiring confidence & commitment
Institutional builders
Managing director
Board of Directors(Executive &
Non executive directors)
Shareholders
Management auditors & other Independent agencies
Committees of the Board1. Audit committee2. Compensation
committee3. Investors’ grievance
& share transfer committee
4. Strategy committee5. Screening committee6. Bank operation
committee
Management meetings
Discussions with middle management (followed by chain discussion)
Statutory auditors
Operatives(Delivery
on time, cost effectiveness)
Facilitators(Result
orientation, quality consciousness,
problem solving)
Front line entrepreneurs
(Innovation & growth, energy & drive,
frontline motivator)
Development coaches(Supporting &
coaching, creating contexts, linking
knowledge & practices,
relationships & reconciliations)
The Company is committed to pursue growth by
adhering to the highest national & international standards of Corporate governance
Abhishek Industries Limited44About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
Corporate Governance Report (Contd.)
MEETINGSMeeting Details – Board & CommitteesThe Company holds atleast four Board meetings in a year, one in each quarter to review the financial results and other items of the agenda and the gap between the two Board meetings do not exceed four calendar months. Apart from the four scheduled Board meetings, additional Board meetings are also convened to address the specific requirements of the Company. Urgent matters are also approved by the Board by passing resolutions through circulation. The Company also holds atleast one Audit Committee meeting in each quarter to inter-alia review financial results.
Meeting of other Committees of the Board are held whenever matters falling under their terms of reference need discussion and decision. Every Director on the Board is free to suggest any item for inclusion in the agenda for the consideration of the Board/ Committee. The information as required under Clause 49 of the Listing Agreement and Combined Code of Corporate Governance and Conduct were made available to the members of the Board/ Committee.
Following are the details of meetings of Board of Directors and Committees thereof held between April 1, 2008 and March 31, 2009
The Company Secretary while preparing the agenda and minutes of the Board/Committee meeting is required to ensure adherence to the applicable provisions of the law including the Companies Act
Sl.No
Particulars No. of Meetings held during the year
Date of Meetings
1 Board meeting 7 May 11, 2008; June 27, 2008; July 21, 2008; September 24, 2008; October 24, 2008; January 3, 2009; January 24, 2009
2 Audit committee meeting 5 May 11, 2008; June 26, 2008; July 21, 2008; October 24, 2008; January 24, 2009
3 Compensation committee 1 June 26, 2008
4 Investor grievance & share transfer committee
5 April 23, 2008; June 2, 2008; August 28,2008; December 18, 2008; February 12, 2009
5 Strategy committee 1 June 27, 20086 Screening committee 3 June 26, 2008; July 21, 2008; January 3, 2009
The maximum time gap of 70 days between two consecutive Board meetings and 94 days between two consecutive Audit Committee meetings.
ATTENDANCE OF EACH DIRECTOR AT THE MEETINGS OF THE COMPANYThe detail of attendance of each director of the Company in Board and Committee meetings held during the financial year 2008-9 is given below:
Name of DirectorBoard Audit Committee Compensation
Committee
Investors’ Grievance &
Share Transfer Committee
Strategy Committee
Screening Committee
Held* Attended Held* Attended Held* Attended Held* Attended Held* Attended Held* Attended
Mr S K Tuteja 7 6 5 4 1 1 5 5 1 1 3 3
Mr Rajinder Gupta 7 7 ~ ~ ~ ~ 5 4 1 1 3 3
Ms Pallavi Shroff 7 1 ~ ~ 1 0 ~ ~ 1 0 3 1
Ms Ramni Nirula 7 2 5 2 1 1 ~ ~ ~ ~ ~ ~
Mr Anurag Verma# 6 2 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Mr Karan Avtar Singh## 1 0 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Mr Rajiv Dewan 7 7 5 5 ~ ~ 5 5 ~ ~ ~ ~
Mr Ajay Relan^ 3 0 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
Mr Raman Kumar^^ 4 4 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~- * No. of meeting held during the tenure of respective directors.- ^ Mr Ajay Relan ceased to be a director w.e.f. September 24, 2008- ^^ Mr Raman Kumar was appointed as director w.e.f. September 24, 2008- # Mr Anurag Verma ceased to be a director w.e.f. January 03, 2009- ## Mr Karan Avtar Singh appointed additional director w.e.f. January 03, 2009- ~ Not a member of the Committee- Mr S K Tuteja, Mr Rajinder Gupta and Mr Rajiv Dewan were present in the Annual General Meeting of the Company held on September 24, 2008.- The Chairman of Audit Committee & Investors’ Grievance and Share Transfer Committee was present in Annual General Meeting of the Company
held on September 24, 2008.- Dr. M A Zahir, an HR Expert and Independent Person who is a member of Screening Committee of the Company, has attended two (out of total
three) meetings of the Committee held in the financial year 2008-9
45Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
Corporate Governance Report (Contd.)
Agenda and Minutes
All the departments in the Company communicate
to the Company Secretary well in advance with
regard to matters requiring approval of the Board/
Committees of the Board to enable him to include
the same in the agenda for the Board/Committee
meeting(s). Agenda papers are generally circulated
to the Board members well in advance before the
meeting of the Board.
The Company Secretary while preparing the
agenda and minutes of the Board/Committee
meeting is required to ensure adherence to the
applicable provisions of the law including the
Companies Act, 1956. The applicable Secretarial
Standards issued by the Institute of Company
Secretaries of India (ICSI) are also being complied
by the Company. The draft minutes of the
proceedings of each meeting duly initialed by
the Chairman of the meeting are circulated to
the members for their comments and thereafter,
confirmed by the Board/and respective Committee
in its next meeting. The Board also takes note of
the minutes of the Committee meetings duly
approved by their respective Chairman.
All material information is incorporated in the
Agenda papers for facilitating meaningful
and focused discussions at the meeting. The
information regularly supplied to the Board inter-
alia includes the following:
Annual operating plans and budgets and any
updates thereon
Capital budgets and updates
Quarterly results for the Company and its
operating divisions or business segments
Minutes of meetings of Audit Committee
and other committees of the Board
Legal compliances report and certificate
Accounts relating to the subsidiary
companies
Information on recruitment, resignation and
remuneration of senior officers
Show cause, demand, prosecution notices
and penalty notices issued against the
Company having material impact
Fatal or serious accidents, dangerous
occurrences, any material effluent or
pollution problems, if any
Any material default in financial obligations
to and by the Company, or substantial non-
recoveries against sale, if any
Any issue, which involves possible public or
product liability claims of substantial nature,
including any judgment or order which, may
have passed strictures on the conduct of the
Company or taken an adverse view regarding
another enterprise that can have negative
implications on the Company, if any
Details of any joint venture or collaboration
agreement, if any
Transactions that involve substantial
payment towards goodwill, brand equity, or
intellectual property, if any
Significant labour problems and their
proposed solutions. Any significant
development in Human Resources/ Industrial
Relations front like signing of wage
agreement, implementation of Voluntary
Retirement Scheme etc, if any
Sale of material, nature of investments,
subsidiaries, assets, which is not in normal
course of business, if any
Quarterly details of foreign exchange
exposures and the steps taken by
management to limit the risks of adverse
exchange rate movement, if material
Non-compliance of any regulatory,
statutory nature or listing requirements and
shareholders service such as delay in share
transfer etc
BOARD LEVEL COMMITTEESThe Board has constituted various Committees for smooth and efficient operation of the activities and is
responsible for constituting, assigning, co-opting and fixing the terms of reference for the committees in
line with the laws of land. The Chairman, quorum and the terms of reference of each committee have been
approved by the Board.
Abhishek Industries Limited46About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
Corporate Governance Report (Contd.)
Terms of Reference of Board Level CommitteeThe Board while approving terms of reference of Committees ensures that the same is in line with laws of land. The Board proactively reviews terms of reference of Committees and modifies the same, if necessary, to meet the strategic and business needs. Following are brief terms of reference of Board Level Committees.
AUDIT COMMITTEEThe terms of reference of Audit Committee are as per Listing Agreement and Companies Act, 1956. The broad terms of reference of audit committee as adopted by the Board are as under:
a) Oversight of the Company’s financial
reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.
b) Recommending the appointment and removal of external auditor, fixation of audit fee and also approval for payment of any other services.
c) Reviewing with management the annual financial statements before submission to the Board, focusing primarily on:
Any change in the accounting policies and practices
Major accounting entries based on exercise of judgment by management
Composition of Board Level CommitteesAudit Committee
1. Mr S K Tuteja, Independent director (Chairman of Committee)
2. Ms Ramni Nirula, Independent director
3. Mr Rajiv Dewan, Independent director
Compensation Committee1. Mr S K Tuteja,
Independent director (Chairman of Committee)
2. Ms Pallavi Shroff, Independent director
3. Ms Ramni Nirula, Independent director
Investors’ Grievance & Share Transfer Committee1. Mr S K Tuteja, Independent director (Chairman of Committee)2. Mr Rajinder Gupta, Managing director3. Mr Rajiv Dewan, Independent director
Strategy Committee1. Mr S K Tuteja,
Independent director (Chairman of Committee)
2. Ms Pallavi Shroff, Independent director
3. Mr Rajinder Gupta, Managing director
Screening Committee1. Mr S K Tuteja,
Independent director (Chairman of Committee)
2. Mr Rajinder Gupta, Managing director
3. Ms Pallavi Shroff, Independent director
4. Dr M A Zahir, HR Expert (Independent person)
Bank Operation Committee1. Mr Rajinder Gupta,
Managing Director (Chairman of Committee)
2. Mr Rajiv Dewan, Independent director
3. Mr Arun Goyal, Chief Financial Officer
47Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
Corporate Governance Report (Contd.)
Qualification on draft audit report
Significant adjustments arising out of audit
The going concern assumption
Compliance with accounting standards
Compliance with stock exchange and legal requirements concerning financial statements
Any related party transactions i.e. transaction of the Company of material nature, with promoters or the management, their subsidiaries or relatives etc that may have potential conflict with the interest of the Company at large
d) Reviewing with management, external and internal auditor, adequacy of internal control systems
e) Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit
f) Discussion with internal auditors any significant findings and follow up thereon
g) Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board
h) Discussion with external auditors before the audit commences on the nature and scope of audit as well as has post audit discussion to ascertain any area of concern
i) Reviewing the Company’s financial and risk management policies
j) To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payments of declared dividends) and creditors.
k) To approve unaudited Quarterly Financial results and publish the same as required in the Listing Agreement
Apart from above, the committee also reviews other matters as required under clause 49 of
the Listing Agreement and other laws, rules and regulations.
COMPENSATION COMMITTEEThe broad terms of reference of Compensation Committee inter-alia include determination and review of remuneration package of Executive directors/CEOs and formulation and administration of Employee Stock options plan of the Company.
INVESTORS’ GRIEVANCE AND SHARE TRANSFER COMMITTEEThe broad terms of reference of Investors’ Grievance and Share Transfer Committee inter-alia include monitoring of work related to transfer/transmission/conversion/dematerl isation/rematerlisation/subdivision/consolidation,etc of shares of the Company, approving issue of duplicate share certificate and ensuring redressal of all kinds of shareholders/investors complaints.
STRATEGY COMMITTEEThe broad terms of reference of Strategy Committee inter-alia include formulation of long-term & strategic planning as well as resources management, performance review and monitoring & review of projects.
SCREENING COMMITTEEThe broad terms of reference of Screening Committee inter-alia include determination of appropriate characteristics, skills and experience for the Board members and to make recommendation to the Board and to Shareholders on the induction of any new director.
BANK OPERATION COMMITTEEThe broad terms of reference of Bank Operations Committee inter-alia include Bank Operating Powers, changes thereon and other Banking related issues of the Company with the Banks/Financial Institutions.
DIRECTORS’ REMUNERATIONRemuneration policy of DirectorsExecutive directorThe remuneration paid to the Executive directors is recommended by the Compensation Committee and approved by the Board of Directors subject to the approval by the shareholders in the General Meeting and such authorities, as the case may be.
The Board proactively reviews terms of reference of Committees and modifies the same, if necessary, to meet the strategic and business needs
Abhishek Industries Limited48About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
Corporate Governance Report (Contd.)
Non-executive directorNon Executive Directors are paid by way of sitting fee for the meeting of Board and Committee (as the case may be), attended by them. The remuneration paid to the Non executive directors is approved by the Board of Directors, subject to the approval by the shareholders in the General Meeting.
The synopsis of approvals for the remuneration paid to Mr Rajinder Gupta, Managing director, Mr Raman Kumar, Whole time director and sitting fees paid to Non executive directors during the year ended March 31, 2009 is given hereunder:
Sr Approving Authority
Date of Approval
Executive directors
Non executive directors
Mr Rajinder Gupta
(Managing director)
Mr Raman Kumar
(Whole time director)
1 Compensation Committee 25.01.2006 09.10.2008 Not applicable2 Board of Directors 25.01.2006 24.09.2008 03.01.2009
3 Shareholders in Extraordinary General Meeting 18.03.2006 Being placed in ensuing AGM 12.12.2003
During the period 2008-9, the Company did not advance any loan to any of its Directors. No stock options have been provided to directors of the Company during the year under review.
The details of the remuneration paid to the Directors alongwith their relationships and business interests is detailed below:
RELATIONSHIPS OF DIRECTORS, THEIR BUSINESS INTERESTS AND REMUNERATION
Name of the Director
Relationship with other Directors
Business relationship with
the Company, if any
Remuneration paid/payable during the year ended March 31, 2009
Sitting feeSalary
& perks(in Rs)
Commission Total (in Rs)
Mr S K Tuteja None None 3,80,000 - - 3,80,000
Mr Rajinder Gupta None None - 2,40,00,000 - 2,40,00,000**
Ms Pallavi Shroff None PartnerAmarchand & Mangaldas & Suresh A Shroff & Co., Solicitors to the Company
20,000 - - 20,000
Ms Ramni Nirula None Nominee of ICICI, a lender to the Company
1,00,000* - - 1,00,000
Mr Rajiv Dewan None None 3,40,000 - - 3,40,000
Mr Ajay Relan# None None - - - -
Mr Raman Kumar## None None - 8,72,667 - 8,72,667
Mr Anurag Verma^ None Nominee of PSIDC, an equity investor of the Company
40,000* - - 40,000
Mr Karan Avtar Singh^^ None Nominee of PSIDC, an equity investor of the Company
- - - -
* The sitting fee has been paid to the respective nominating institutions. # Ceased to be a director w.e.f. September 24, 2008; ## Appointed as Whole Time Director w.e.f. September 24, 2008 on a remuneration of Rs 1,40,000 p.m.^ Ceased to be a director w.e.f. January 3, 2009^^ Appointed as Additional Director w.e.f .January 3, 2009** An amount of Rs 2,40,00,000 has been provided in the books of accounts in respect of salary to Mr Rajinder Gupta, Managing Director, out of which Rs 48,00,000 has been paid and Rs 1,92,00,000 has been withheld due to inadequacy of profit as computed under Section 349 of the Companies Act, 1956, for which the management is confident of obtaining Central Government approval.
The Company has also taken Director’s & Officer’s (D&O) Liability Insurance to protect its directors’ personal liability for financial losses that may arise out of their unintentional wrongful acts
49Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
Corporate Governance Report (Contd.)
The Company has also taken Director’s & Officer’s (D&O) Liability Insurance to protect its directors’ personal liability for financial losses that may arise out of their unintentional wrongful acts.
Pecuniary relationship or transaction of Non executive directors vis-à-vis the CompanyThe Company does not have any direct pecuniary relationship/transaction with any of its Non executive directors. However, a sum of Rs. 3,00,000/- has been paid to M/s Amarchand & Mangaldas & Suresh A Shroff & Co., during the financial year 2008-9 towards fees for legal services. Ms Pallavi Shroff, a Non executive director of the Company is partner of M/s Amarchand & Mangaldas & Suresh A Shroff & Co. However, the above payment does not affect independence of Ms Pallavi Shroff as the same is not material as per criteria fixed by the Board.
Criteria for payment of CommissionIn addition to the monthly remuneration, the
Managing director is also entitled to receive commission at the rate of one percent of the net profits of the Company as computed under Section 349 of the Companies Act, 1956, as per the terms of his appointment recommended by the Compensation Committee in its meeting held on January 25, 2006 and approved by the Board in its meeting held on January 25, 2006 and the shareholders in their Extraordinary General Meeting held on March 18, 2006.
Termination of Agreement with Managing director & Wholetime director and severance feesThe employment of Managing director & Wholetime director shall terminate automatically in the event of their ceasing to be a director of the Company in the General Meeting and/or in the event of their resignation as a director of the Company and subsequent acceptance of the resignation by the Board.
DIRECTORSHIPS OF BOARD MEMBERS IN OTHER COMPANIESThe directors of the Company also holds positions as directors, committee members, partners and shareholders in other reputed companies, associations and firms. The committee memberships/chairmanships held by the directors in other Corporates as on March 31, 2009 are in compliance with the Clause 49 of the Listing Agreement. Details of the same are as follows:
Name of directors Name of Companies Position held/ Interest
Mr S K Tuteja Swaraj Mazda Limited Chairman- Board, Chairman- Audit Committee, Member- Share Transfer & Investors’ Relationship Committee
Shri Renuka Infraprojects Limited Chairman- Board
Adani Logistics Limited Chairman- Board
National Bulk Handling Corporation Limited Chairman-Board
Shorab Spinning Limited Chairman-BoardShree Renuka Sugar Limited Director on the Board, Member-
Share Transfer & Investors’ Relationship Committee
Mundra Port and Special Economic Zone Limited
Director on the Board, Member- Audit Committee, Member- Share Transfer & Investors’ Relationship Committee
HMT Limited Director on the Board, Chairman- Share Transfer & Investors’ Relationship Committee
Adani Powers Limited Director on the BoardChairman- Audit Committee
Small Industries Development Bank of India Director on the Board
SVIL Mines Limited Director on the Board
Indian Energy Exchange Limited Director on the Board
Axis Private Equity Fund Director on the BoardPrecision Pipes and Profiles Co Limited Director on the Board,
Member- Audit Committee
Abhishek Industries Limited50About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
Corporate Governance Report (Contd.)
Name of directors Name of Companies Position held/ Interest
Mr Rajinder Gupta Abhishek Energy Corporation Limited Chairman- BoardShareholding > 2%
Himalayan Ayurvedic & Agro Research Centre Limited
Chairman- Board
Madhuraj Foundation Limited Chairman- BoardAbhishek Global Ventures Limited Chairman- BoardAbhishek Industries Inc. Director on the BoardTrident Infotech Inc. Director on the BoardTrinetra Technologies Limited Director on the BoardAbhishek Ventures & Projects Limited Director on the BoardPraneel Innovations Limited Shareholding > 2%Trident Towels Limited Shareholding > 2%
Ms Pallavi Shroff Maruti Suzuki India Limited Director on the BoardMember- Audit Committee
Kotak Mahindra Old Mutual Life Insurance Limited
Director on the Board
Juniper Hotels Limited Director on the BoardMember- Audit Committee
PTL Enterprises Limited Director on the BoardGIFT Collective Investment Management Company Limited
Director on the Board
Artemis Health Sciences Pvt. Limited Director on the BoardArtemis Medicare Services Pvt. Limited Director on the BoardIndusInd Bank Limited Director on the BoardM/s Amarchand & Mangaldas & Suresh A Shroff & Co.
Partner
Ms Ramni Nirula Jindal Steel & Power Limited Director on the BoardICICI Comm Trade Limited Director on the BoardHaldia Petro Chemicals Limited Director on the Board
Mr Rajiv Dewan Madhuraj Agrotech Limited Chairman- BoardMalwa Industries Limited Director on the Board
Member- Audit CommitteePunjab Communications Limited Director on the Board
Member- Audit CommitteeMember- Investors’ Grievance Committee
Malwa Millenium Designs Limited Director on the Board
Trinetra Technologies Limited Director on the Board
Abhishek Ventures & Projects Limited Director on the Board
Trident Aerospace Limited Director on the Board
R Dewan & Co. Partner Mr Karan Avtar Singh Indian Acrylics Limited Chairman – Board
Punjab Venture Investor Trust Limited Chairman – BoardMilk Specialities Limited Chairman – BoardPunjab Alkalies & Chemicals Limited Director on the BoardPunjab State Industrial Development Corporation Limited
Managing Director- Board
Mr Raman Kumar Abhishek Corporate Services Limited Director on the Board
Rainbow Retail Limited Director on the Board
Trident Cotton Limited Director on the BoardHimalayan Ayurvedic & Agro Research Centre Limited
Director on the Board
51Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
Corporate Governance Report (Contd.)
The Screening Committee & Board has recommended re-appointment of directors who are retiring and offer themselves for reappointment
A brief profile of the Directors is given elsewhere in this annual report, which forms part of the Corporate Governance Report.
MANAGEMENTThe management discussion and analysis report is given elsewhere in this annual report, which forms part of this Corporate Governance report.
SHAREHOLDERSa) Disclosures regarding appointment/re-
appointment of directors Pursuant to the Articles of Association of the
Company, all the directors for the time being except Managing director and Wholetime director shall retire annually and accordingly Mr S K Tuteja, Ms Pallavi Shroff, Ms Ramni Nirula and Mr Rajiv Dewan, directors are retiring at the ensuing Annual GeneralMeeting. All retiring directors, offer themselves for re-appointment. The Screening Committee & Board has recommended re-appointment of directors who are retiring and offer themselves for re-appointment.
Mr Karan Avtar Singh was appointed as additional director by the Board on January 3, 2009 and holds office till ensuing Annual General Meeting. The Company has received a notice under Section 257 of the Companies Act, 1956 proposing his name for appointment as director of the Company. The Screening Committee and Board has recommended appointment of Mr Karan Avtar Singh as director. Further, Mr Raman Kumar was appointed as Whole time director on September 24, 2008 and his remuneration and other terms of appointment was approved by the Compensation Committee and Board. Accordingly, The Board recommends approval of the appointment of Mr Raman Kumar as Whole time director of the Company.
The brief profile of the directors being appointed and re-appointed and other relevant Information is given elsewhere in this Annual Report, which forms part of the Corporate Governance Report.
b) Means of Communication The quarterly, half yearly and annual financial
results and quarterly shareholding pattern are posted on Company’s official website www.tridentindia.com. As per the requirements of the Listing Agreement, the Company also provides information to the Stock Exchanges and update its website on regular basis to include new developments in the Company. The quarterly, half yearly and annual results and quarterly shareholding pattern are also uploaded on the EDIFAR website of SEBI www.sebi.gov.in. The Company Secretary being the Compliance Officer ensures the correctness and authenticity of the information posted on the said website.
All material information about the Company is promptly sent through facsimile/e-mail to the Stock exchanges where the shares of the Company are listed.
Full version of the Annual Report including the Notice of Annual General Meeting, Management‘s Discussion and Analysis, Corporate Governance report, Balance Sheet, Profit & Loss Account, Cash Flow Statement alongwith the schedules and notes thereon, Directors report and Auditors report are sent to the shareholders within the stipulated time and are also uploaded on Company’s official website www.tridentindia.com.
The Company generally publishes its financial results in the Business Standard, Financial Express, and Desh Sewak. During the period under review, the Company published its financial results in the following newspapers:
Financial Results Newspapers Date of publicationUnaudited financial results for the quarter ended June 30, 2008
Business Standard Desh Sewak
22.07.200822.07.2008
Unaudited financial results for the quarter ended September 30, 2008
Business Standard Desh Sewak
25.10.200825.10.2008
Unaudited financial results for the quarter ended December 31, 2008
Financial Express Rozana Spokesman
25.01.200925.01.2009
Unaudited financial results for the quarter ended March 31, 2009
Financial Express Rozana Spokesman
16.05.200916.05.2009
c) Compliance Officer The Board has appointed following officials as Compliance Officer of the Company. 1. Mr Pawan Jain, Company Secretary (e-mail Id: pawanjain@tridentindia.com.) 2. Mr Ratnesh P Rukhariyar, Deputy Company Secretary (e-mail Id: ratneshrukhariyar@tridentindia.com) The Compliance officers can be contacted for any investor related matter relating to the Company on
contact no. +91-161-5039999, 5038888; and Fax no. is +91-161-5039900, 5038800.
Abhishek Industries Limited52About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
Corporate Governance Report (Contd.)
DISCLOSURESa) Related party transactions There was no materially significant
related party transaction, pecuniary transactions or relationships between the Company and its directors, promoters or the management that may have potential conflict with the interests of the Company at large except the details of transactions annexed to the Balance Sheet disclosed as per Accounting Standard 18 of the Institute of Chartered Accountants of India
All details relating to financial and commercial transactions, where directors may have a potential interest are provided to the Board and the interested directors neither participate in the discussion, nor do they vote on such matters. The Audit Committee of the Company also reviews related party transactions on periodical basis
b) Compliances made by the Company The Company has continued to comply
with the requirements of the stock
exchanges, SEBI and other statutory authorities on all matters related to capital market during last three years
No penalties or strictures have been imposed on the Company by the stock exchanges, SEBI or any other authority on any matter related to capital market during the last three years
CORPORATE ETHICS As a responsible corporate citizen, the Company consciously follows corporate ethics in both business and corporate interactions. The Company has framed various codes and policies, which act as guiding principles for carrying business in ethical way. Some of our policies are:
a) Code of Conduct for Prevention of Insider Trading
b) Code of Corporate Disclosure
c) Whistle Blower Policy
d) Combined Code Of Corporate Governance & Conduct
e) Safety, Health and Environment (SHE) Policy
f) Values Framework
g) Risk Management Procedure
d) Annual General Body Meetings of the Company Details of last three Annual General Meetings of the Company is given hereunder:
AGM Day Date Time Venue Special Resolutions passed
18th Wednesday September 24, 2008
10:30 AM Trident Complex, Raikot Road, Barnala
Following two special resolutions were passed:
Re-appointmet of Mr Rajinder Gupta as Mangaing director & Remuneration thereof
Appointment of Mr Abhishek Gupta, son of Managing director as an employee of the Company
17th Thursday September 27, 2007
10:30 AM Trident Complex, Raikot Road, Barnala
None
16th Wednesday September 27, 2006
10.00 AM Trident Complex, Raikot Road, Barnala
None
e) Postal ballots No resolution by way of Postal Ballot was passed during the year 2008-9. Details of resolution to be passed through Postal ballot The Company has proposed Ordinary resolution to be passed under section 293(1)(a) of the Companies
Act, 1956 by way of Postal Ballot. The Postal ballot alongwith necessary resolution and detailed procedure is being sent to shareholders separately.
The Company has continued to comply with the requirements of the stock exchanges, SEBI and other statutory authorities on all matters related to capital market during last three years
53Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
Corporate Governance Report (Contd.)
COMPLIANCE STATUS WITH MANDATORY AND NON-MANDATORY REQUIREMENTS OF CLAUSE 49 OF LISTING AGREEMENTMandatory requirementsThe Company has complied with all the mandatory requirements of clause 49 of Listing Agreements entered into with Stock Exchanges.
Non-mandatory requirementsCompliance status with non-mandatory requirements is given below:
a) Chairman of the Company is entitled to seek any advice and consultancy in relation to the performance of his duties and is also entitled to claim reimbursement of the expenses incurred in this regard and other office facilities.
Independent directors of the Company do not have a term exceeding a period of nine years in aggregate on the Board of Company.
b) Company has set up Compensation Committee comprising of three Independent directors. Details of the Committee are given in this report under the head ‘Board Level Committees.’
c) Presently, half yearly financial performance is not being sent to each household of shareholders.
d) The performance evaluation of all directors (executive and non-executive) is done by the Screening Committee, which comprises of two Independent directors, one Executive director and one independent person having expertise in Human Resources.
e) The Company has adopted ‘Whistle Blower Policy’. No personnel have been denied access to the Audit Committee.
GENERAL SHAREHOLDERS INFORMATION
The following information would be useful to our shareholders:
a) Annual General MeetingDate August 27, 2009Day ThursdayTime 10.30 AM
Venue Trident Complex, Raikot Road, Barnala -148101
b) Financial CalendarNext Financial year April 1, 2009 to March 31, 2010
c) The Financial Results will be adopted as per the following tentative schedule:For the quarter ended June 30, 2009 July 2009 (4th week)For the quarter ended September 30, 2009 October 2009 (3rd week)For the quarter and year ended December 31, 2009 January 2010 (3rd week)For the quarter & year ended March 31, 2010 May 2010 (2nd week)
d) Date of Book Closure for the purpose of Dividend and Annual General Meeting:
The Share Transfer Book and Members’ Register shall remain closed from Friday, August 21, 2009 to Thursday August 27, 2009 (both days inclusive) for the 19th Annual General Meeting of the Company.
e) Listing on Stock Exchanges
As on March 31, 2009, the equity shares of the Company are listed on the following exchanges:1 Bombay Stock Exchange Limited
Phiroze Jeejeebhoy Towers, 25th Floor, Dalal Street, Mumbai – 400 001
2 National Stock Exchange of India LimitedExchange Plaza, Plot No. C/1 G Block, Bandra Kurla Complex, Bandra (E), Mumbai – 400 051
f) Listing FeesListing fees for the year 2009-10 has been paid to the Stock Exchanges where the equity shares of
the Company are listed in the month of April, 2009 i.e. within the stipulated time.
Abhishek Industries Limited54About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
Corporate Governance Report (Contd.)
g) Stock Code
The Company’s code at the stock exchanges and news agencies are:
Sr Name of Stock Exchanges Stock code Reuters code Bloomberg
1 Bombay Stock Exchange Limited 521064 ABHP.BO ABIN IN
2 National Stock Exchange of India Limited ABSHEKINDS ABHP.NS NABIN IN
h) Market Price DataMonthly high and low prices of equity shares of Abhishek Industries Limited at the Bombay Stock Exchange Limited (BSE) and at the National Stock Exchange of India Limited (NSE) during the year under review in comparison to BSE (Sensex) and NSE (Nifty) are given hereunder:
Month
BSE NSE
Share PricesVolume
Sensex Share PricesVolume
Nifty
High Low High Low High Low High Low
April, 2008 21.00 15.85 2039989 17480.74 15297.96 21.05 16.00 2661283 5230.75 4628.75
May, 2008 20.50 17.15 1422870 17735.70 16196.02 20.30 17.10 2084896 5298.85 4801.90
June, 2008 17.60 14.65 994520 16632.72 13405.54 17.65 12.50 1493082 4908.80 4021.70
July, 2008 15.55 13.65 770331 15130.09 12514.02 15.50 13.25 1120350 4539.45 3790.20
August, 2008 16.95 13.30 689690 15579.78 14002.43 16.85 14.25 1020270 4649.85 4201.85
September, 2008 15.00 10.77 630939 15107.01 12153.55 15.30 10.60 864400 4558.00 3715.05
October, 2008 12.10 6.75 612077 13203.86 7697.39 12.35 6.70 935266 4000.50 2252.75
November, 2008 9.74 6.15 7129114 10945.41 8316.39 9.50 6.35 631108 3240.55 2502.90
December, 2008 10.20 5.95 3510738 10188.54 8467.43 9.85 5.25 1753614 3110.45 2570.70
January, 2009 8.71 6.62 461842 10469.72 8631.60 8.70 6.65 497034 3147.20 2661.65
February, 2009 7.69 6.46 351272 9724.87 8619.22 7.65 6.40 363506 2969.75 2677.55
March, 2009 7.43 6.05 484977 10127.09 8047.17 7.35 6.00 506009 3123.35 2539.45
Source: Reuters
Sensitivity at NSC
NIFTY AIL
0
5
10
15
20
25
Apr
-08
May
-08
Jun-
08
Jul-0
8
Aug
-08
Sep-
08
Oct
-08
Nov
-08
Dec
-08
Jan-
09
Feb-
09
Mar
-09
AIL
NIF
TY
Sensitivity at BSC
AIL SENSEX
0
5
10
15
20
Apr
-08
Ma
y-0
8
Jun-
08
Jul-0
8
Aug
-08
Se
p-0
8
Oct
-08
Nov
-08
Dec
-08
Jan-
09
Fe
b-0
9
Ma
r-0
9
AIL
0
5000
10000
15000
20000
SENSEX
55Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
Corporate Governance Report (Contd.)
i) Registrar & Share Transfer Agent M/s Alankit Assignments Limited, New Delhi has been appointed as the Registrar and Share Transfer
Agent of the Company for handling the share transfer work both in physical and electronic form. All correspondence relating to share transfer, transmission, dematerialization, rematerialization etc can be made at the following address:
M/s Alankit Assignments Limited (Unit: Abhishek Industries Limited) 2E/21 Jhandewalan Extension, New Delhi – 110 055 Tel : +91-11-23541234, 42541234, Fax : +91-11-41540064, E-mail: rta@alankit.com
j) Share Transfer System All physical share transfers, dematerialization etc are handled by M/s Alankit Assignments Limited,
Registrar & Share Transfer Agent of the Company at 2E/21 Jhandewala Extension, New Delhi–110 055. Share transfers are registered and returned within a period of 7 days from the date of receipt.
k) Distribution of ShareholdingAs on March 31, 2009 the distribution of shareholding was as follows:
Shareholding of nominal value in RsShareholders Shareholding
Number % age Shares % ageUpto 5000 66,818 79.69 1,35,58,624 6.10
5001 to 10000 10,291 12.28 78,96,317 3.5510001 to 20000 4,169 4.97 61,22,143 2.7620001 to 30000 1,063 1.27 27,15,994 1.2230001 to 40000 387 0.46 13,92,385 0.6340001 to 50000 361 0.43 17,14,408 0.7750001 to 100000 436 0.52 32,65,365 1.47
100001 and above 321 0.38 18,55,29,439 83.50Total 83,846 100.00 22,21,94,675 100.00
l) Category wise shareholding as on March 31, 2009Category No. of shares held % of shareholdingPromotersIndian Promoters 14,10,43,373 63.48Institutional Investors- Mutual Funds 23,398 0.01- Banks, Financial Institutions 15,07,425 0.68- FIIs 1,40,34,560 6.32Others- Corporate Bodies 2,37,01,343 10.67- Indian Public 3,95,83,952 17.81- NRIs/OCBs 22,26,953 1.00- Shares in Transit 73,671 0.03Grand Total 222,194,675 100.00
Distribution of Share Holding
0.01%
6.32%
10.67%
1.00%
17.81% 0.03%
63.48%0.68%
Promoters
Financial Institutions & Banks
Mutual Funds
Foreign Institutional Investor
Bodies Corporates
NRIs
Public
Shares In Transit
All correspondence relating to share transfer, transmission, dematerialization, rematerialization etc should be addressed to Registrar and Share Transfer Agent
Abhishek Industries Limited56About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
m) Details of shares held more than 1 percent as on March 31, 2009
Name of shareholder No. of shares held % of shareholding
Madhuraj Foundation 7,95,38,423 35.80
Citicorp Banking Corporation 1,35,95,152 6.12
Punjab State Industrial Development Corporation Limited
77,15,596 3.47
Smt Mayadevi Trust 38,79,480 1.75
Madhuraj Foundation Limited 4,93,21,608 22.20
Prudent Traders Private Limited 1,88,60,000 8.49
n) Dematerialization of SharesThe equity shares of the Company are compulsory traded and settled only in the dematerialized form under ISIN No. INE 064C01014. The details of the equity shares of the Company dematerialized as on March 31, 2009 is given hereunder:
ParticularsAs on 31.03.2009 As on 31.03.2008
No. of shares % age No. of shares % age
No of shares dematerialized 9,32,75,616 41.98 9,26,91,760 47.73
- NSDL 4,53,69,268 20.42 8,52,24,767 43.89
- CDSL 4,79,06,348 21.56 74,66,993 3.84
No. of shares in physical form 12,89,19,059 58.02 10,15,02,915 52.27
Total 22,21,94,675 100.00 19,41,94,675 100.00
o) Correspondence received/resolved
NatureNumber of letters (April 2008 – Mar 2009)
Received Attended Pending
Transfer of Shares 6 6 Nil
Dividend/Revalidation 135 135 Nil
Duplicate shares 45 45 Nil
Loss of shares 86 86 Nil
SEBI/Stock Exchange 15 15 Nil
Change of Address 463 463 Nil
Conversion 122 122 Nil
Misc. like Demat / Mandate / Nomination / POA /
Annual Report / Transmission etc.
317 317 Nil
Total 1189 1189 Nil
Corporate Governance Report (Contd.)
p) Share transfer/demat requests in process As on March 31, 2009, no request for the transfer of the shares or demat of the shares for
dematerlization was in process.
q) Warrants and Stock Options 1. The Company has granted options to its employees under Abhishek Employee Stock Options
Plan, 2007. Total 79,01,462 options were granted to eligible employees on July 9, 2007 by the Compensation Committee as per the terms & conditions of Abhishek Employee Stock Options Plan, 2007. As per the terms of the plan, the Company can allot a maximum of 99,09,733 options to eligible employees from time to time. One option entitles the participant for one equity share of the Company subject to fulfillment of vesting criteria. Since these are the options given to participants, the exact impact on the paid up capital of the Company depends on exercise of rights
Shareholders who have not yet encashed their dividend warrants for the year 2005-6 may approach the Company for re-validation, issue of duplicate warrants, etc
57Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
u) Plant LocationsThe Company’s manufacturing facilities are located at the following locations:
Yarn Division Terry Towel DivisionPaper and
Chemicals Division
Trident Complex,
Raikot Road, Barnala - 148 101
Punjab
Trident Complex, Hoshangabad Road, Budni,
Sehore-466 445
Madhya Pradesh
Trident Complex,
Mansa Road, Dhaula, Barnala - 148 107
Punjab
Trident Complex,
Mansa Road, Dhaula, Barnala - 148 107
Punjab
v) Address of Subsidiaries
US subsidiary Europe subsidiary* Indian subsidiary
Abhishek Industries Inc.
295 Fifth Avenue
Suite 909, New York
NY 10016, USA
Abhishek Europe SA
Place Pury 3
C/o Cabinet Béguin D’expertise Fiscale CBEF SA
2001 Neuchâtel, Switzerland
Abhishek Global Ventures Ltd.
Trident Complex
Raikot Road
Barnala, Punjab
* The Company disinvested its entire holding in Abhishek Europe SA and accordingly Abhishek Europe SA has cease to be a subsidiary of the Company w.e.f. May 18, 2009
w) Address for CorrespondenceAbhishek Industries LimitedE- 212, Kitchlu Nagar, Ludhiana 141 001, Punjab, IndiaPhone Nos. +91-161-5039999, 5038888; Fax No. +91-161-5039900,5038800; e-mail ID: investor@tridentindia.com; website: www.tridentindia.com
Corporate Governance Report (Contd.)
of participants to convert these options into equity shares of the Company. There has not been any exercise of option during the financial year 2008-9.
2. The outstanding two crores eighty lacs (2,80,00,000) warrants of the face value of Rs 10/- each allotted on preferential basis on July 9, 2007, have been converted into equivalent number of equity shares of the Company on January 3, 2009, for cash at a premium of Rs. 11.30/- per equity share.
The Company has no other outstanding convertible instrument.
r) Exchange of shares of erstwhile Varinder Agro Chemicals Limited with Abhishek Industries Limited
After merger of Varinder Agro Chemicals Limited (VACL) with Abhishek Industries Limited (AIL), the Company has allotted 70 fully paid equity shares of AIL for every 24 fully paid equity shares of VACL. The Company sent individual letters to all the shareholders of VACL to exchange their share certificates of VACL for share certificates of AIL.
The shareholders who are still holding shares of erstwhile VACL are requested to surrender their share certificates of VACL at the Corporate office of the Company at E - 212 Kitchlu Nagar, Ludhiana – 141001 to get the share certificates of AIL.
s) Unclaimed Dividend Shareholders who have not yet encashed their dividend warrants for the year 2005-6 may approach the
Company for re-validation, issue of duplicate warrants, etc. Dividend which remains unpaid/unclaimed over a period of 7 years shall be transferred to the Investor Education and Protection Fund as per the law.
t) Nomination Shareholders holding shares in physical form and desirous of making nomination in respect of their
shareholding in the company are requested to submit their request to Company in Form 2B.
Abhishek Industries Limited58About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
CERTIFICATE ON CORPORATE GOVERNANCE
To the Members of
Abhishek Industries Limited
We have examined the compliance of conditions of Corporate governance by Abhishek Industries Limited for the year ended March 31, 2009, as
stipulated in clause 49 of the Listing Agreements of the said Company with stock exchanges.
The Compliance of conditions of Corporate governance is the responsibility of the management. Our examination was limited to procedures
and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate governance. It is neither an
audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with
the conditions of Corporate governance as stipulated in the above mentioned Listing Agreements.
We further state that such compliance is neither as assurance as to the future viability of the Company nor the efficiency or effectiveness with
which the management has conducted the affairs of the Company.
For Deloitte Haskins & Sells
Chartered Accountants
Manjula Banerji
Place: New Delhi Partner
Date: May 15, 2009 Membership No. 086423
59Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
MANAGING DIRECTOR & CHIEF FINANCIAL OFFICER CERTIFICATION
COMPLIANCE WITH CODE OF CONDUCT
We have reviewed financial statements and cash flow statement for the year April 1, 2008 to March 31, 2009 and to the best of our knowledge
and belief:
i) These statements do not contain any materially untrue statement or omit any material fact or contain statement that might be
misleading;
ii) These statements together present a true & fair view of the Company’s affairs and are in compliance with existing accounting standards,
applicable laws and regulations;
iii) No transaction entered into by the Company during the abovesaid period which are fraudulent, illegal or violative of the Company’s Code of
Conduct.
Further, we accept that it is our responsibility to establish and maintain internal controls for financial reporting. Accordingly, we have evaluated
the effectiveness of internal control systems of the Company pertaining to financial statements and have disclosed to the auditors and Audit
Committee, wherever applicable:
a) deficiencies in the design or operation of internal controls, if any, which came to our notice and steps have been taken/proposed to be taken
to rectify these deficiencies;
b) Significant changes in internal control over financial reporting during the year;
c) Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements;
d) Instances of significant fraud of which we became aware and the involvement therein, if any, of the management or an employee having a
significant role in the Company’s internal control system over financial reporting.
Place: New Delhi (Arun Goyal) (Rajinder Gupta)
Date : May 15, 2009 Chief Financial Officer Managing Director
The Company has adopted “Combined Code of Corporate Governance & Conduct”. This code deals with the ‘Governance Practices’ which the
Company is expected to follow and ‘Code of Conduct’ for Board members and Senior Management of the Company.
It is hereby affirmed that during the year 2008-9, all the Directors and Senior Managerial personnel have complied with the Code of Conduct and
have given a confirmation in this regard.
Place: New Delhi (Pawan Jain) (Rajinder Gupta)
Date : May 15, 2009 Company Secretary Managing Director
Abhishek Industries Limited60About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
AUDITORS’ REPORT
1. We have audited the attached balance sheet of Abhishek
Industries Limited as at March 31, 2009 and also the profit
and loss account and the cash flow statement of the Company
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.
2. 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.
3. As required by the Companies (Auditor’s Report) Order, 2003,
issued by the Central Government of India in terms of Section
227(4A) of the Companies Act, 1956, we enclose in the
annexure a statement on the matters specified in paragraphs
4 and 5 of the said Order.
4. Further to our comments in the annexure referred to in
paragraph 3 above, we report that:
(a) we have obtained all the information and explanations,
which to the best of our knowledge and belief were
necessary for the purposes of our audit;
(b) 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;
(c) the balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with
the books of account;
(d) 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 Section
211(3C) of the Companies Act, 1956;
(e) on the basis of written representations received from
directors as on March 31, 2009 and taken on record by the
Board of Directors, we report that none of the directors is
disqualified as on March 31, 2009 from being appointed as
a director in terms of Section 274(1)(g) of the Companies
Act , 1956; and
(f) as indicated in note 18 in Schedule 18 the possible loss on valuation of open put derivative options, in view of the reasons stated therein could not be determined by the Company. The ultimate outcome of these transactions and their effect on these accounts cannot be ascertained at this stage.
subject to above, 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:
- in the case of the balance sheet, of the state of
affairs of the Company as at March 31, 2009;
- in the case of the profit and loss account, of the
loss of the Company for the year ended on that
date; and
- in the case of the cash flow statement, of the cash
flows for the year ended on that date.
For Deloitte Haskins & SellsChartered Accountants
Manjula BanerjiPlace: New Delhi PartnerDate: May 15, 2009 Membership No. 086423
To the Members of Abhishek Industries Limited
61Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
ANNEXURE referred to in paragraph ‘3’ of the auditors’ report to the members of Abhishek Industries Limited on the accounts for the year ended March 31, 2009.
i) a) The Company is maintaining proper records showing full
particulars including quantitative details and situation of
its fixed assets.
b) According to the information and explanations given to
us, a portion of fixed assets has been physically verified
by the management during the year in accordance with
a phased programme of verification of all assets within a
period of 3 years, adopted by the Company. In our opinion,
the frequency of verification is reasonable having regard to
the size of the Company and the nature of its fixed assets.
The discrepancies noticed on such verification were not
material and have been properly dealt with in the books of
account.
c) In our opinion and according to information and
explanations given to us, a substantial part of the fixed
assets has not been disposed off by the Company during
the year.
ii) a) According to the information and explanations given
to us, the inventories have been physically verified by
the management during the year. However, in respect
of certain items, the inventories were verified by the
management on a visual estimation which has been relied
upon by us. In our opinion, the frequency of verification is
reasonable.
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) On the basis of our examination of the records of inventories,
we are of the opinion that the Company is maintaining
proper records of inventories. The discrepancies noticed
on physical verification of inventories as compared to book
records were not material and have been properly dealt
with in the books of account.
iii) a) The Company has granted unsecured loans to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, the details of which are as under:
No of Parties
Amount involved(Rs millions)
Balance at the beginning of the year. 1 111.3Loans granted during the year including funded interest. 1 34.4Balance at the end of the year 1 145.7
b) In our opinion, the rate of interest and other terms and conditions of such loans are not, prima facie, prejudicial to the interest of the Company.
c) According to the information and explanations given to us, the loans, as referred to in paragraph (iii) (a), is repayable on demand along with interest and the same has not been recalled. Accordingly, paragraph 4(iii) (d) of the Order is not applicable.
d) According to the information and explanations given to us, the Company has, during the year, not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4 (iii) (e), (f) and (g) of the Order are not applicable.
iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instance of major weaknesses in the aforesaid internal control systems.
Auditors’ Report (Contd.)
Abhishek Industries Limited62About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
Auditors’ Report (Contd.)
b) According to the information and explanations given to us and the records of the Company examined by us, there are no disputed dues of customs duty, wealth tax and cess matters. The details of disputed sales tax, excise duty, service tax and income-tax dues which have not been deposited by the Company with the authorities as at March 31, 2009 are as follows:
(Rs million)S.No Statute Nature Forum where pending Amount
involvedAmount paid under protest
Year to which the amount relates
1 Sales Tax Act Sales Tax Deputy Commissioner Excise and Taxation 0.2 0.1 2003-04
2 Central Excise Law
Excise Duty Customs, Excise and Service Tax Appellate Tribunal
3.7 - 2002-03
3 Service Tax Act Service Tax Customs, Excise and Service Tax Appellate Tribunal
0.7 - 2004-05 and2005-06
4 Income Tax Act Income Tax Income Tax Appellate Tribunal 8.9 4.7 2002-03 and2003-04
5 Income Tax Act Income Tax Commissioner of Income Tax (Appeals) 121.0 91.0 2004-05
6 Income Tax Act Penalty Commissioner of Income Tax (Appeals) 0.2 0.1 1995-96
The following matters have been decided in favour of the Company, although the Department has preferred appeals at higher levels:
(Rs million)Statute Nature
of duesAmount Period to which amount relates Forum where Department has preferred appeals
Central Excise Law
Excise Duty 48.4 2004-05, 2005-06 and 2006-07
Customs, Excise and Service Tax Appellate Tribunal
Service Tax Act Service Tax 1.3 2004-05 and 2005-06
Customs, Excise and Service Tax Appellate Tribunal
Income Tax Act Interest 1.7 1989-90 and 1990-91
High Court
v) a) According to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.
b) In our opinion and according to the information and explanations given to us, the 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 Rs five lacs 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 except in the case of items stated to be of specialized nature for which, as informed, there are no alternate sources of supply to enable a comparison of the prices paid/ charged.
vi) According to the information and explanations given to us, the Company has not accepted deposits from the public within the meaning of Section 58A, Section 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Accordingly, paragraph 4(vi) of the Order is not applicable.
vii) In our opinion and according to the information and explanations given to us, the Company has an internal audit system commensurate with its size and the nature of its business.
viii) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government, the maintenance of cost records has been prescribed under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have however not made a detailed examination of the records with a view to determining whether they are accurate or complete.
ix) a) According to the information and explanations given to us and the records of the Company examined by us, the Company has been regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it. We are informed that there are no undisputed statutory dues as at the year end outstanding for a period of more than six months from the date they became payable other than Work Contract Tax amounting to Rs 167,676.
63Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
Auditors’ Report (Contd.)
x) The Company does not have accumulated losses as at March 31, 2009. Further, the Company has not incurred cash losses during the financial year ended March 31, 2009 and in the immediately preceding year ended March 31, 2008.
xi) According to the records of the Company examined by us and the information and explanations given to us, the Company, during the year, has not defaulted in repayment of dues to financial institutions and banks. The Company has not issued any debentures during the year.
xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.
xiii) The provisions of special statute as specified under paragraph 4(xiii) of the Order are not applicable to the Company.
xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.
xv) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the interest of the Company.
xvi) In our opinion and according to the information and explanations given to us, the term loans taken during the year have been applied for the purpose for which they were obtained.
xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that during the year short term funds have been utilized towards losses of Rs 530.4 million incurred during the year, including provision for foreign exchange losses (marked to market on forward contract) of Rs 419.0 million.
xviii) During the previous year the Company issued 28,000,000 warrants carrying an option to holder of such warrants to subscribe one equity share of Rs 10 each at a premium of Rs 11.30 per share on preferential basis in accordance with SEBI (Disclosure and Inventor Protection) Guidelines, 2000. During the year, these warrants were transferred to a Promoter Group Company, pursuant to the merger of the original allottee with the Promoter Group Company covered in the register maintained under Section 301 of the Companies Act, 1956. Pursuant to the terms of these warrants the Company has issued 17,700,000 equity shares on a preferential basis to the party covered under Section 301 of the Companies Act, 1956. In our opinion and as per the information and explanations given to us the price at which the equity shares have been issued are not prejudicial to the interest of the Company.
xix) The Company has not issued any debentures during the year.
xx) The Company has not raised money by way of public issue during the year.
xxi) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year ended March 31, 2009.
For Deloitte Haskins & Sells
Chartered Accountants
Manjula Banerji
Place: New Delhi Partner
Date: May 15, 2009 Membership No. 086423
Abhishek Industries Limited64About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
BALANCE SHEET as at March 31, 2009
(Rs million)
ParticularsSchedule
No.As at
March 31, 2009As at
March 31, 2008I SOURCES OF FUNDS
1 Shareholders' funds
a) Share capital 1 2,221.9 1,941.9
b) Reserves and surplus 2 2,241.5 2,450.5
c) Equity warrants 3 - 4,463.4 60.0 4,452.4
2 Loan funds
a) Secured loans 4 15,536.9 12,828.1
b) Unsecured loans 5 32.1 15,569.0 27.8 12,855.9
3 Deferred tax liability (Refer Note 8) 329.0 644.6
Total 20,361.4 17,952.9
II APPLICATION OF FUNDS
1 Fixed assets 6
a) Gross block 21,032.1 13,273.2
b) Less : Depreciation 6,315.2 5,201.2
c) Net block 14,716.9 8,072.0
d) Capital work in progress 7 2,093.7 16,810.6 6,338.6 14,410.6
2 Investments 8 1,187.1 757.5
3 Current assets, loans and advances 9
a) Inventories 2,110.0 2,252.1
b) Sundry debtors 602.1 386.6
c) Cash and bank balances 201.1 397.6
d) Loans and advances 1,885.1 1,554.4
4,798.3 4,590.7
Less : Current liabilities and provisions 10
a) Liabilities 2,342.1 1,699.9
b) Provisions 92.5 106.0
2,434.6 1,805.9
Net current assets 2,363.7 2,784.8
Total 20,361.4 17,952.9
Notes to the accounts 18 - -
As per our report attached For and on behalf of the Board
For Deloitte Haskins & Sells S K Tuteja Rajinder GuptaChartered Accountants Chairman Managing Director
Manjula Banerji Pawan Jain Arun Goyal Partner Company Secretary Chief Financial Officer Membership No. 086423
Place : New Delhi Place : New DelhiDate : May 15, 2009 Date : May 15, 2009
65Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
PROFIT & LOSS ACCOUNT for the year ended March 31, 2009
As per our report attached to the Balance Sheet For and on behalf of the Board
For Deloitte Haskins & Sells S K Tuteja Rajinder GuptaChartered Accountants Chairman Managing Director
Manjula Banerji Pawan Jain Arun Goyal Partner Company Secretary Chief Financial Officer Membership No. 086423
Place : New Delhi Place : New DelhiDate : May 15, 2009 Date : May 15, 2009
(Rs million)
ParticularsSchedule
No. For the year ended March 31, 2009
For the year ended March 31, 2008
INCOMEGross turnover 15,456.1 12,062.2 Less: Excise duty 249.3 195.5 Less: Inter divisional transfers 1,226.2 1,380.0 Turnover 13,980.6 10,486.7 Other income 11 79.4 160.0 Total 14,060.0 10,646.7 EXPENDITURE
Raw materials consumed 7,105.6 5,314.3 Manufacturing expenses, etc. 12 1,834.2 1,578.0 Personnel expenses 13 1,285.4 1,230.3 Administrative and other expenses 14 438.1 316.3 Selling expenses 15 716.7 675.2 (Increase)/decrease in work in process and finished goods 16 81.9 (7.3)Increase/(decrease) in excise duty on finished goods (7.2) (0.1)Total 11,454.7 9,106.7 Profit before financial expenses, depreciation & tax 2,605.3 1,540.0 Financial expenses 17 833.2 473.2 Depreciation 1,159.3 863.8
Profit for the year before extraordinary/exceptional
item and tax 612.8 203.0
Foreign exchange gain/(loss) (1,440.7) 278.1 (Loss)/Profit for the year after extraordinary/ exceptional item before tax
(827.9) 481.1
Less: Provision for taxation- Current tax - 52.3 - Deferred tax liability/(asset) (315.6) (23.6)- Fringe benefit tax 11.5 (304.1) 12.0 40.7 MAT credit entitlement - (12.6)Provision for income tax for earlier years 6.6 53.5 (Loss)/Profit after tax (530.4) 399.5 Balance brought forward from previous year 2,146.7 1,756.8 Adjustment on account of employees' benefit - (9.6)
[Net of deferred tax of Rs Nil (Previous year Rs 4.9 million)](Refer Note 8)
Balance carried to balance sheet 1,616.3 2,146.7 Earning per share(equity shares, nominal value Rs 10 each) (Note 10)
- Basic (2.64) 2.06 - Diluted (2.64) 2.02 Notes to the accounts 18
Abhishek Industries Limited66About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
CASH FLOW STATEMENT for the year ended March 31, 2009
(Rs million)Particulars Current year Previous yearA CASH FLOW FROM / (USED) IN OPERATING ACTIVITIES
Net Profit before tax (827.9) 481.1 Adjustments for:Depreciation 1,159.3 863.8 Financial expenses 833.2 473.2 Interest received on fixed deposits and from customers (35.9) (38.0)Doubtful debts/ advances written off 0.1 1.4 Provision for doubtful debts/ advances 17.3 - Provision for diminution in value of investments 81.7 32.8 Provisions no longer required written back (5.8) (10.8)Profit on sale of current investments (non trade) (8.9) (59.6)Loss on sale of current investments (non trade) 31.1 2.3 Dividend from, non-trade, unquoted, current investments (3.2) (6.9)Loss on sale of fixed assets 2.4 8.3 Profit on sale of fixed assets (3.6) 2,067.7 (51.6) 1,214.9 Operating profit before working capital changes 1,239.8 1,696.0 Adjustments for:(Increase)/decrease in trade and other receivables (520.5) (494.1)(Increase)/decrease in inventories 142.1 89.9 Increase/(decrease) in trade payables and other liabilities 975.0 596.6 147.8 (256.4)Cash generated from operations 1,836.4 1,439.6 Income tax paid (22.8) (85.3)Net cash from / used in Operating activities 1,813.6 1,354.3
B CASH FLOW FROM / (USED) IN INVESTING ACTIVITIESPurchase of fixed assets (3,904.9) (4,289.4)Sale of fixed assets 7.2 544.7 Purchase of investments (2,035.1) (2,841.1)Share application money to a wholly own subsidiary (5.0) (60.0)Share application money paid to others (31.0) - Sale of investments 1,504.8 2,572.5 Subsidy received from government 5.0 8.0 Interest received 28.8 33.9 Net cash from / used in Investing activities (4,430.2) (4,031.4)
C CASH FLOW FROM/(USED) IN FINANCING ACTIVITIESProceeds from issue of equity shares on conversion of warrants 536.4 - Proceeds from issue of equity warrants - 60.0 Proceeds from long term borrowings 2,799.9 3,829.3 Repayment of long term borrowings (1,543.8) (1,171.3)Changes in working capital loans/short term borrowings 1,457.0 298.8 Dividend paid - (0.2)Interest paid (829.4) (474.1)Net cash from/used in financing activities 2,420.1 2,542.5 Net increase/(decrease) in cash and cash equivalents (196.5) (134.6)Cash and cash equivalents as at April 1, 2008 397.6 532.2 Cash and cash equivalents as at March 31, 2009 201.1 397.6 Notes to the accounts Schedule 18
As per our report attached to the Balance Sheet For and on behalf of the Board
For Deloitte Haskins & Sells S K Tuteja Rajinder GuptaChartered Accountants Chairman Managing Director
Manjula Banerji Pawan Jain Arun Goyal Partner Company Secretary Chief Financial Officer Membership No. 086423
Place : New Delhi Place : New DelhiDate : May 15, 2009 Date : May 15, 2009
67Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULE 3 - EQUITY WARRANTS
Nil (Previous year 2,80,00,000) equity warrants, allotted on a preferential basis, carrying an
option to the holder of such warrants to subscribe to one equity share of Rs10 each at a
premium of Rs 11.30 per share for every warrant held, within 18 months from the date of
allotment (i.e. from July 9, 2007.) (Refer Note 19)
- 60.0
- 60.0
SCHEDULE 2 - RESERVES AND SURPLUS
Capital reserve
Opening balance 81.6 73.6
Addition during the year 5.0 86.6 8.0 81.6
Share premium account
Opening balance 222.2 222.2
Addition during the year (Refer Note 20) 316.4 538.6 - 222.2
Surplus, being balance in profit and loss account
Opening balance 2,146.7 1,756.8
Less: Adjustment on account of employees' benefit
(Net of deferred tax of Rs Nil (Previous year Rs 4.9 million)
- 9.6
2,146.7 1,747.2
Addition/(deduction) during the year (530.4) 1,616.3 399.5 2,146.7
2,241.5 2,450.5
SCHEDULES annexed to and forming part of the accounts
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
SCHEDULE 1 - SHARE CAPITAL
Authorised
50,00,00,000 (Previous year 50,00,00,000) Equity shares of Rs 10 each 5,000 .0 5,000.0
10,00,00,000 (Previous year 10,00,00,000) Preference shares of Rs 10 each 1,000.0 1,000.0
6,000.0 6,000.0
Issued, subscribed and paid up
22,21,94,675 (Previous year 19,41,94,675) Equity shares of Rs 10 each fully paid up. 2,221.9 1,941.9
Of the above :
3,46,29,630 Equity shares of Rs 10 each have been allotted on July 28, 1999 to the
Shareholders of the erstwhile Abhishek Spinfab Corporation Limited on
amalgamation with the Company vide Order dated May 13, 1999 of the
Hon’ble High Court for the States of Punjab and Haryana at Chandigarh,
without payment being received in cash;
9,36,97,545 Equity shares of Rs 10 each have been allotted on March 28, 2002 to
the Shareholders of the erstwhile Varinder Agro Chemicals Limited on
amalgamation with the Company vide Order dated January 3, 2002 of the
Hon’ble High Court for the States of Punjab and Haryana at Chandigarh,
without payment being received in cash; and
2,80,00,000 Equity shares issued for cash at a premium of Rs 11.30 per share during
the year, (Refer Note 19).
2,221.9 1,941.9
Abhishek Industries Limited68About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
SCHEDULES annexed to and forming part of the accounts (Contd.)
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008SCHEDULE 5 - UNSECURED LOANS
Short term deposits from customers 32.1 27.8 32.1 27.8
SCHEDULE 4 - SECURED LOANSLoans from banksTerm loans 11,382.2 10,053.3 Cash credits/working capital loans 4,008.5 2,555.8
Vehicle loans 22.2 23.9 Other loans Term loans from financial institutions 124.0 195.1
15,536.9 12,828.1 Term loansTerm loans from banks and financial institutions are secured by way of equitable mortgage created or to be created on all the present and future immovable properties including all buildings, structures and all plant and machinery attached thereon of the Company and hypothecation of all the movable properties including movable machinery spares, tools and accessories, etc., present and future, subject to prior charges created and/or to be created in favour of the Company’s bankers on stocks of raw materials, semi finished and finished goods, consumable stores and other movables, as may be required for working capital requirements in the ordinary course of business. The mortgages and charges referred to above rank pari-passu or otherwise as mentioned above. (Amount due within one year Rs 2,399.1 million; Previous year Rs 1,440.5 million)Cash credits/working capital loansCash credit/working capital loans are secured by hypothecation of raw materials, semi finished and finished goods, stock-in-process, consumable stores, other movable assets and book debts, present and future, of the Company. The limits are further secured by way of second pari passu charge on the immovable properties of the Company.Vehicles loansVehicle loans are secured by hypothecation of vehicles acquired against such loans. (Amount due within one year Rs 7.2 million; Previous year Rs 7.4 million).
SCHEDULE 6 - FIXED ASSETS(Rs million)
Gross Block Depreciation Net Block
Particulars As at
March 31,2008
Additionsduring the
year
Sales/Adjust-
ment
As atMarch 31,
2009
As atMarch 31,
2008
For theyear
Sales/Adjust-
ment
UptoMarch 31,
2009
As atMarch 31,
2009
As atMarch 31,
2008Tangible Assets Land - Freehold 438.3 94.6 - 532.9 - - - - 532.9 438.3 - Leasehold 29.3 7.7 - 37.0 3.5 0.5 - 4.0 33.0 25.8 Buildings 1,971.5* 589.4 - 2,560.9 281.3 64.8 - 346.1 2,214.8 1,690.2 Plant and machinery 10,362.1# 7,037.1 45.5 17,353.7 4,694.8 1,043.9 43.1 5,695.6 11,658.1 5,667.3 Furniture and fixtures 173.8 49.6 0.2 223.2 79.6 12.1 - 91.7 131.5 94.2 Vehicles 82.9 11.7 5.4 89.2 28.4 7.7 2.0 34.1 55.1 54.5 Computers 111.9 13.0 0.2 124.7 42.7 16.0 0.2 58.5 66.2 69.2 Intangible Assets Software 103.4 7.1 - 110.5 70.9 14.3 - 85.2 25.3 32.5 Current year 13,273.2 7,810.2 51.3 21,032.1 5,201.2 1,159.3 45.3 6,315.2 14,716.9 Previous year 12,101.0 1,711.4 539.2 13,273.2 4,375.2 863.8 37.8 5,201.2 8,072.0
Notes: 1. Additions to plant and machinery on account of exchange fluctuation in long term monetory items includes Rs 228.1 million (Previous year
Rs Nil), as a part of project and preoperative expense and Rs 78.1 million (Net of exchange gain of Rs 2.5 million for the year 2007-08) capitalised pursuant of notification issued by National Advisory Committee on Accounting Standard dated 31.03.2009 (Refer Note 21).
* Building includes Rs 16.0 million being expenses incurred by the Company towards construction of canal for sourcing of water, ownership of which belongs to Government of Punjab (Department of Irrigation), amortised over a period of five years.
# Plant and machinery includes Rs 15.5 million being expenses incurred by the Company towards laying of feeder line, ownership of which belongs to Punjab State Electricity Board, amortised over a period of five years.
69Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULES annexed to and forming part of the accounts (Contd.)
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
Non Trade
32,000 (Previous year 32,000) units of face value of Rs 1,000 each, Rs 350 per unit, paid up of Kotak India Venture Fund (Private Equity fund)
11.2 9.6
1,000 (Previous year 1,000) units of face value of Rs 1,00,000 each, Rs 3,000 per unit, paid up of Kotak India Growth Fund (Private Equity fund)
3.0 3.0
50 (Previous year 50) non convertible redeemable debentures of Citi Corp Finance, Series 195 of face value of Rs 10,00,000 each
50.0 50.0
64.2 62.6
Less: Dimunition in value of investment 28.8 -
35.4 62.6
SCHEDULE 7 - CAPITAL WORK IN PROGRESS
Building under construction 469.8 639.3
Machinery under erection 1,224.6 4,494.0
Capital advances 101.7 454.2
Project and pre-operative expenses pending allocation (Refer Note 12) 297.6 751.1
2,093.7 6,338.6
SCHEDULE 8 - INVESTMENTS (UNQUOTED, AT COST UNLESS OTHERWISE STATED)
Long Term (Trade) Subsidiaries1,000 (Previous year 1,000) equity shares of CHF 100 each fully paid up, of
Abhishek Europe SA. (A subsidiary incorporated in Switzerland) 3.6 3.6
50,000 (Previous year 50,000) equity shares of Rs 10 each fully paid up of Abhishek Global Ventures Limited
0.5 0.5
50,000 (Previous year 50,000) common stocks of USD 1 each fully paid up of Abhishek Industries Inc. (A wholly owned subsidiary, incorporated in USA)
- -
4.1 4.1
Long Term Others
Trade50,00,000 (Previous year 50,00,000) 7% Non cumulative redeemable preference
shares of Rs 10 each fully paid up of Praneel Innovations Limited (Investment in a company under same management as per Section 370 (1B) of the Companies Act, 1956)
50.0 50.0
50,00,000 (Previous year 50,00,000) 7% non cumulative redeemable preference shares of Rs 10 each fully paid up of IOL Chemicals & Pharmaceuticals Limited.
50.0 50.0
1,60,000 (Previous year 1,60,000) equity shares of Rs 10 each fully paid up of Nimbua Greenfield (Punjab) Limited
1.6 1.6
50,000 (Previous year 50,000) equity shares of Rs 10 each fully paid up of Trident Agritech Limited (formerly known as Madhuraj Agrotech Limited - Investment in a company under same management as per Section 370 (1B) of the Companies Act, 1956)
0.5 0.5
1,00,00,000 (Previous year 1,00,00,000) equity shares of Rs 10 each fully paid up of Lotus Integrated Texpark Limited
100.0 100.0
202.1 202.1
Abhishek Industries Limited70About Abhishek Inspired by ChallengeManaging Director’s
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SCHEDULE 8 - INVESTMENTS (Unquoted, at cost unless otherwise stated) (Contd.)Current (Non Trade) (Unquoted, at cost or fair value, whichever is lower)Equity linked mutual funds
10,00,000 (Previous year 10,00,000) units of face value of Rs 10 each of Kotak Dynamic Asset Allocation
10.0 9.3
10,81,410 (Previous year 10,81,410) units of face value of Rs 10 each fully paid up of Kotak Global Emerging Market Fund
10.8 10.8
9,75,073 (Previous year 9,75,073) units of face value of Rs 10 each fully paid up of JM Small & Mid Cap Fund-Regular Dividend Plan
16.1 16.1
6,29,752 (Previous year 6,29,752) units of face value of Rs 10 each fully paid up of Fidelity Intl. Opportunities Fund -Growth
7.0 7.0
4,88,998 (Previous year 4,88,998) units of face value of Rs 10 each fully paid up of JM Contra Fund Dividend plan
5.0 5.0
5,83,470 (Previous year 5,83,470) units of face value of Rs 10 each fully paid up of Principal Large Cap Fund
13.0 13.0
6,18,283 (Previous year 3,18,831) units of face value of Rs 10 each fully paid up of IDFC Premier Equity Fund -Growth** (2,99,452 units acquired during the year)
13.0 7.0
2,44,499 (Previous year 2,44,499) units of face value of Rs 10 each fully paid up of ICICI Prudential Indo Asia Equity Fund - Retail Growth
2.5 2.5
7,50,000 (Previous year 7,50,000) units of Rs 10 each fully paid up of SBI Infrastructure Fund - Growth
7.5 7.5
12,50,000 (Previous year 12,50,000) units of Rs 10 each fully paid up of SBI Infrastructure Fund - Dividend
12.5 12.5
37,217 (Previous year 37,217) units of face value of Rs 10 each fully paid up of DSP India Tiger Fund - Growth
2.0 2.0
20,00,000 (Previous year 20,00,000) units of Rs 10 each fully paid up of Sundaram BNP Paribas-Energy Opportunities Fund - Dividend
20.0 20.0
9,77,995 (Previous year 9,77,995) units of face value of Rs 10 each of Reliance Natural Resources Fund Dividend Payout
10.0 10.0
1,94,035 (Previous year 1,40,865) units of face value of Rs 10 each of Reliance Growth Fund - Dividend Plan ** (53,170 units acquired during the year)
13.0 10.0
1,50,127 (Previous year 1,50,127) units of face value of Rs 10 each of Reliance Banking Fund
10.0 10.0
Repurchase price Rs 75.9 million (Previous year Rs 127.3 million) 152.4 142.7 Less: Diminution in value of investments 76.5 20.7
75.9 122.0 Debt based mutual funds
Nil (Previous year 1,09,771) units of face value of Rs 10 each of Reliance Liquid, Plus - Institutional Option - Growth*
- 120.0
Nil (Previous year 29,79,663) units of face value of Rs 10 each of Grindlays Super Saver Income - ST Plan C Fortnightly Dividend*
- 30.0
Nil (Previous year 1,16,527) units of face value of Rs 10 each fully paid up of ICICI Prudential Liquid Plan Institutional Plus - Growth Option*
- 2.3
Nil (Previous year 2,53,896) units of face value of Rs 10 each fully paid up of IDFC Floating Rate Fund- Long Term Institutional Plan B*
- 3.2
Nil (Previous year 70,25,716) units of face value of Rs 10 each fully paid up of Magnum Insta Cash Liquid Floater-Growth*
- 98.2
3,46,35,779 (Previous year Nil) units of face value of Rs 10 each fully paid up of Magnum Insta Cash - Cash Option - Growth**
680.1 -
3,39,554 (Previous year Nil ) units of face value of Rs 10 each fully paid up of Principal Income Fund - Dividend**
4.1 -
72,55,157 (Previous year Nil ) units of face value of Rs 10 each fully paid up of Principal Floating Rate SMP - Growth**
100.0 -
Repurchase price Rs 784.5 million (Previous year Rs 253.8 million) 784.2 253.7
SCHEDULES annexed to and forming part of the accounts (Contd.)
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
71Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULES annexed to and forming part of the accounts (Contd.)
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
SCHEDULE 8 - INVESTMENTS (Unquoted, at cost unless otherwise stated) (Contd.)Investment under portfolio management services #Kotak Securities Limited
30,09,103 (Previous year Nil) units in Kotak Floater Long Term (G)** 41.3 - Nil (Previous year 2,38,649) units in K Liquid- Institutional Dividend Plan* - 2.4
Repurchase price Rs 41.8 million (Previous year Rs 2.4 million) 41.3 2.4 Equity Shares- Quoted (Non-Trade)
Nil (Previous year 39,152) equity shares of face value of Re. 1 each fully paid up of Zee Entertainment Enterprises Limited*
- 9.4
Nil (Previous year 2,032) equity shares of face value of Rs 2 each fully paid up of Larsen & Toubro Limited*
- 6.2
30,455 (Previous year 18,449) equity shares of face value of Rs 10 each fully paid up of ICICI Bank Limited** (18,449 equity shares sold and 30,455 equity shares acquired during the year)
8.3 17.6
Nil (Previous year 37,697) equity shares of face value of Rs 10 each fully paid up of GTL Limited*
- 7.0
Nil (Previous year 12,133) equity shares of face value Rs 10 each fully paid up of Bharat Petroleum Corporation Limited*
- 4.9
Nil (Previous year 19,697) equity shares of face value of Rs 10 each fully paid up of Hindustan Petroleum Corporation Limited*
- 5.8
Nil (Previous year 75,988) equity shares of face value of Rs 10 each fully paid up of Mysore Cements Limited*
- 3.5
1,82,246 (Previous year 94,530) equity shares of face value Re 1 each fully paid up of Sun Pharma Advanced Research Company Limited** (87,716 equity shares acquired during the year)
11.9 7.2
Nil (Previous year 25,964) equity shares of face value of Rs 10 each fully paid up of ING Vysya Bank Limited*
- 8.0
Nil (Previous year 26,997) equity shares of face value of Rs 10 each fully paid up of Shree Precoated Steels Limited*
- 10.2
Nil (Previous year 17,949) equity shares of face value of Rs 10 each fully paid up of Tata Tea Limited*
- 14.4
Nil (Previous year 34,248) equity shares of face value of Rs 10 each fully paid up of Tata Communications Limited*
- 16.1
1,10,390 (Previous year 62,844) equity shares of face value of Rs 10 each fully paid up of IRB Infrastructure Developers Limited** (47,546 equity shares acquired during the year)
15.8 12.4
35,353 (Previous year Nil) equity shares of face value of Rs 10 each fully paid up of Cairn India Limited**
5.6 -
4,03,487 (Previous year Nil) equity shares of face value of Rs 10 each fully paid up of Gujarat State Petronet Limited**
11.7 -
Market value Rs 50.5 million (Previous year Rs 115.7 million) 53.3 122.7 Less: Provision for diminution in value 9.2 12.1
44.1 110.6 Total 1,187.1 757.5 * Sold during the year** Acquired during the year.# Investments have been made under the Discretionay Portfolio Management Agreement
entered into between the Company and Kotak Securities Limited (Portfolio Managers) and are being held in the name of the Porfolio Manager as envisaged in the aforesaid Agreement.
Repurchase price of current unquoted investments 902.2 383.5 Aggregate book value of unquoted investments 1,143.0 646.9 Aggregate book value of current quoted investments 44.1 110.6 Market value of current quoted investments 50.5 115.7
Abhishek Industries Limited72About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
SCHEDULES annexed to and forming part of the accounts (Contd.)
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
SCHEDULE 9 - CURRENT ASSETS, LOANS AND ADVANCES
A Current assets
Inventories
Stock in trade *
- Raw materials 1,025.8 1,353.4
- Finished goods 507.3 510.5
- Work in process 357.2 304.2
Stores and Spares ** 219.7 84.0
2,110.0 2,252.1
* At cost or net realizable value, whichever is lower
** At cost or under
Sundry debtors (Unsecured)
Debts outstanding for a period exceeding six months
- Considered good 120.6 81.4
- Considered doubtful 2.1 2.0
122.7 83.4
Less: Provision for doubtful debts 2.1 120.6 2.0 81.4
Others debts considered good 481.5 305.2
602.1 386.6
Cash and bank balances
Cash in hand 20.3 15.7
Balances with scheduled banks in :
- Current accounts 43.8 30.0
- Deposits accounts (including Rs 55.2 million held as margin with banks; Previous year Rs 101.0 million)
137.0 351.9
201.1 397.6
B Loans and advances (Unsecured, considered good, unless otherwise stated)
Advances recoverable in cash or in kind or for value to be received (Note 15)
- Considered good 932.0 770.2
- Considered doubtful 16.7 -
948.7 770.2
Less: Provision for doubtful debts 16.7 932.0 - 770.2
With customs, excise and port trust authorities 560.1 540.7
Security deposits 177.4 64.1
MAT credit entitlement 76.5 76.5
Share application money to
- a wholly owned subsidiary 65.0 60.0
- others 31.0 -
Advances to a wholly owned subsidiary (Maximum balance outstanding during the year Rs 48.8 million, Previous year Rs 42.9 million)
43.1 42.9
1,885.1 1,554.4
4,798.3 4,590.7
73Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULES annexed to and forming part of the accounts (Contd.)
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
SCHEDULE 10 - CURRENT LIABILITIES AND PROVISIONS
A Current liabilities
Acceptances 500.7 488.4
Sundry creditors (Refer Note 9) 1,739.7 1,137.8
Deposits and advances 48.7 22.0
Interest accrued but not due on loans 3.1 3.8
Unclaimed dividend* 4.4 4.4
Other liabilities 45.5 43.5
2,342.1 1,699.9
* Will be credited to Investor Education and Protection Fund on the expiry of 7 years from the due date.
B Provisions
Taxation :
- Current tax ( net of advance tax of Rs 431.7 million) 45.2 49.9
- Fringe benefit tax( net of advance tax of Rs 29.8 million) 1.5 1.5
Earned leaves * (Refer Note 7) 43.8 40.0
Gratuity payable (Refer Note 7) 2.0 14.6
92.5 106.0
2,434.6 1,805.9 * Includes provision for short term compensated absences Rs 12.0 million (Previous year Rs 10.7 million).
(Rs million)
ParticularsFor the year ended
March 31, 2009For the year ended
March 31, 2008SCHEDULE 11 - OTHER INCOME
Insurance claims 5.9 23.0 Profit on sale of fixed assets 3.6 51.6 Loss on sale of fixed assets (2.4) 1.2 (8.3) 43.3 Profit on sale of current investments (non-trade) - 59.6 Less: Provision for dimunition in value of investments - (32.8)Less: Loss on sale of current investments (non-trade) - - (2.3) 24.5 Dividend from non-trade, unquoted current investments 3.2 6.9
Interest received on fixed deposits and from customers (Tax deducted at source Rs 4.2 million ; Previous year Rs 5.7 million)
35.9 38.0
Miscellaneous receipts 27.4 13.5 Provisions no longer required written back 5.8 10.8
79.4 160.0 SCHEDULE 12 - MANUFACTURING EXPENSES
Purchase for resale 4.5 6.3 Stores and spares consumed 329.6 265.7 Power and fuel 1,032.5 953.3 Repair to plant and machinery 27.3 21.7 Packing material and charges 431.3 329.2 Job charges 9.0 1.8
1,834.2 1,578.0 SCHEDULE 13 - PERSONNEL EXPENSES
Salaries, wages, bonus and allowances 1,178.7 1,120.1 Contribution to provident and other funds 89.0 77.0 Workmen and staff welfare 17.7 33.2
1,285.4 1,230.3
Abhishek Industries Limited74About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
(Rs million)
ParticularsFor the year ended
March 31, 2009For the year ended
March 31, 2008SCHEDULE 14 - ADMINISTRATIVE AND OTHER EXPENSES
Rent 12.5 17.2 Rates and taxes 8.4 15.6 Insurance 40.0 41.9 Directors' sitting fees 0.9 1.0 Travelling and conveyance 41.6 45.2 Postage and telephone 20.0 17.4 Legal and professional 72.3 93.9 Buildings repairs 1.2 2.6 General repairs 13.6 19.8 Doubtful debts and advances written off 0.1 1.4 Provision for doubtful debts/advances 17.3 - Software maintenance expenses 16.4 17.5 Electricity and water charges 2.3 7.4 Provision for dimunition in value of investments 81.7 - Loss on sale of current investments (non-trade) 31.1 - Less : Profit on sale of current investments (non-trade) (8.9) 103.9 - -
Miscellaneous (Includes exchange loss of Rs 57.9 million; Previous year Rs 6.4 million)
87.6 35.4
438.1 316.3
SCHEDULES annexed to and forming part of the accounts
(Rs million)
ParticularsFor the year ended
March 31, 2009For the year ended
March 31, 2008SCHEDULE 15 - SELLING EXPENSES
Commission 157.6 130.8 Freight, clearing and octroi charges 450.8 419.4 Rebates and discount 13.5 38.3 Advertisement 5.0 11.4 Business promotion 30.3 33.4 Others 59.5 41.9
716.7 675.2 SCHEDULE 16 - (INCREASE)/DECREASE IN WORK IN PROCESS AND FINISHED GOODS
Opening StockWork-in-process 304.2 369.6 Finished goods 510.5 814.7 437.8 807.4 Add: Stock on commissioning of new paper plant on 01.12.2008Work-in-process 60.6 - Finished goods 39.1 99.7 - - Less : Closing Stock #Work-in-process 339.3 304.2 Finished goods 493.2 832.5 510.5 814.7 (Increase) / decrease 81.9 (7.3)# Excludes production of work in process of Rs 17.9 million (Previous year Rs. Nil) and finished goods of Rs 14.1 million (Previous year Rs. Nil) under trial run for which expense are included in project and pre-operative expense.
SCHEDULE 17 - FINANCIAL EXPENSESInterest - On loans for fixed period 479.8 272.2 - Others 305.4 175.7 Bank and other charges 48.0 25.3
833.2 473.2
75Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULES annexed to and forming part of the accounts (Contd.)
SCHEDULE 18 - NOTES TO THE ACCOUNTS
1. Significant Accounting Policies
A. Accounting convention The accounts are prepared on accrual basis under the Historical Cost Convention in accordance with the Accounting Standards referred
to in sub section (3C) of Section 211 of the Companies Act, 1956 and other relevant presentational requirements of the Companies
Act, 1956.
B. Revenue recognition The revenue in respect of sales is recognized as and when the risk and reward in the goods is transferred to the buyer.
The revenue in respect of DEPB benefit is recognized on post export basis at the rate at which the entitlement accrues and is
included in the turnover.
Insurance claims are recognized when there exists no significant uncertainty with regard to the amounts to be realized and the
ultimate collection thereof.
C. Borrowing costs Borrowing costs that are attributable to acquisition or construction of a qualifying asset are capitalized as part of cost of such assets
Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are
recognized as expenses in the period in which they are incurred.
D. Government grants / subsidy Government grant / subsidy related to revenue is deducted from the related expenses.
E. Accounting for taxes on income Provision for taxation for the year is ascertained on the basis of assessable profits computed in accordance with the provisions of the
Income-tax Act, 1961.
Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income
and accounting income that originates in one period and are capable of reversal in one or more subsequent periods. In respect of carry
forward of losses and unabsorbed depreciation, deferred tax assets are recognized based on virtual certainty that sufficient future taxable
income will be available against which such deferred tax asset can be realized.
F. Employee benefits The Company has various schemes of retirement benefits such as provident fund, gratuity and leave encashment, which is dealt with as
under:
a) Contributions to provident fund are made in accordance with the provisions of Employee’s Provident Fund and Miscellaneous Provisions
Act, 1952 and are charged to revenue every year.
b) The gratuity liability in respect of employees of the Company is covered through a policy taken by a trust from Life Insurance Corporation
of India. The contributions towards the premium of the policy paid to the trust are charged to revenue every year. (Refer Note 7 also).
c) Provision for leave encashment (including long term compensated absences) is made based on actuarial valuation.
Liability attributing to the long-term period of service, comprising mainly of bonus etc., is recognized on a straight-line basis to the
period of service to which it relates.
Liability on account of short term employee benefits, comprising mainly compensated absences and performance incentives, is
recognized on an undiscounted accrual basis during the period when the employee renders services/ vesting period of the benefit.
G. Fixed assets Fixed assets are stated at cost (net of CENVAT) less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and
other incidental expenses and interest on loan taken for the acquisition of qualifying assets up to the date of commissioning of assets.
In line with Notification No. G.S.R. 225(E) dated March 31, 2009 issued by The Ministry of Corporate Affairs, Government of India, the
exchange differences arising after April 1, 2007 on reporting of long term foreign currency monetary items at rates different from those at
which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of
a depreciable capital asset, have been added to or deducted from the cost of the asset and shall be depreciated over the balance useful life
of the asset. (Refer Note 21)
H. Depreciation/amortization i. Depreciation on fixed assets [other than those referred to in (ii) to (v) below] is provided on straight line method in accordance with
Schedule XIV to the Companies Act, 1956, except in case of one of the Co-generation and Recovery Plants, in respect of which higher
Abhishek Industries Limited76About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
SCHEDULE annexed to and forming part of the accounts (Contd.)
SCHEDULE 18 - NOTES TO THE ACCOUNTS (Contd.)
depreciation is provided on the basis of technological evaluation of a Chartered Engineer and Management’s estimate of useful life of
these plants.
ii. Assets costing Rs 5,000 or less are fully depreciated in the year of purchase.
iii. The depreciable amount of intangible asset is systematically allocated over its useful life. The software acquired for internal use is amortized over a period of five years.
iv. The leasehold land is amortized over the lease period.
v. Capital expenditure in respect of assets not owned by the Company are amortized over the period of five years.
I. Investments Long-term investments are carried at cost less provision, if any, for diminution in value which is other than temporary. Current investments
are carried at lower of cost and fair value.
J. Inventories Raw materials, finished goods and work in process are valued at cost or net realizable value, whichever is lower. Stores and spares are valued
at cost or under. The cost formulas adopted in respect of inventories are as under:
Stores and spares: weighted average cost.
Raw materials: weighted average cost.
Finished goods: cost of raw materials plus conversion cost, packing cost and excise duty.
Work in process: cost of raw materials plus conversion cost depending upon the stage of completion.
K. Foreign currency transactions (i) Foreign currency transactions are recorded at the exchange rate prevailing as at the date of transactions except export sales which are
recorded at a rate notified by the customs for invoice purposes. Such rate is notified in the last week of the month and is adopted for recording export sales of the next month. The exchange fluctuation arising on billing through banker is accounted for as difference in exchange rates. The amount of such differences in exchange rate is included under turnover.
(ii) Monetary items denominated in a foreign currency are reported at the closing rate as at the date of balance sheet. Non-monetary items, which are carried at fair value denominated in a foreign currency, are reported at the exchange rate that existed when such values were determined, otherwise on historical exchange rate that existed on the date of transaction.
(iii) The exchange difference arising on the settlement of monetary items or on reporting these items at rate different from the rates at which these were initially recorded/reported in previous financial statements are recognized as income/expense in the period in which they arise except that such exchange differences which relate to fixed assets acquired up to March 31, 2004 and after April 1, 2007 are capitalized in the carrying amount of these assets and those exchange difference which relate to fixed assets acquired from outside India during April 1, 2004 to March 31, 2007 have been capitalized till March 31, 2007. Further, where foreign currency liabilities have been incurred in connection with fixed assets where the exchange difference during the construction period are adjusted in the cost of the concerned assets.
(iv) In case of forward exchange contracts, the premium or discount arising at the inception of such contracts, is amortized as income or expense over the life of the contract. Further exchange difference on such contracts i.e. difference between the exchange rate at the reporting/settlement date and the exchange rate on the date of inception of contract/the last reporting date, is recognized as income/expense for the period except that such exchange difference which relate to fixed assets acquired up to March 31, 2004 and after April 1, 2007 are capitalized in the carrying amount of these assets and those exchange differences which relate to fixed assets acquired from outside India during April 1, 2004 to March 31, 2007 have been capitalized till March 31, 2007. Further where such contracts have been entered in connection with fixed assets, the exchange differences arising during construction period are adjusted in the cost of concerned assets.
(v) The exchange differences arising on reporting of long term foreign currency monetary item related to other than acquisition of a depreciable asset are accumulated in the “Foreign Currency Monetary Item Translation Difference Account” and amortized over the life of the monetary item but not beyond March 31, 2011.
L. Impairment of assets At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication
exists, an impairment loss, i.e., the amount by which the carrying amount of asset exceeds its recoverable amount is provided in the books of account.
M. Employee share-based payments Intrinsic Value Method is used to account for share based payments to employees.
77Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULE 18 - NOTES TO THE ACCOUNTS (Contd.)
SCHEDULE annexed to and forming part of the accounts (Contd.)
2 Contingent liabilities not provided for:
(Rs million)
ParticularsAs at
March 31, 2009
As at
March 31, 2008
Claims* (excluding claims by employees where amounts are not ascertainable) not acknowledged as debt:
- Sales tax 0.3 0.3
- Service tax 0.7 -
- Excise duty 3.7 5.0
- Income tax 16.3 5.3
- Others 7.7 2.4
* All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings when ultimately concluded will not, in the opinion of the management, have a material effect on the results of operations or financial position of the Company.
- Bills discounted 801.2 630.8
- Estimated amount of contracts remaining to be executed on capital account (Net of advances) 458.5 1,286.7
- Guarantees given to bank on behalf of others - 300.0
- Amount payable under agreement 26.2 92.9
4. Auditors’ remuneration:
(Rs million)
ParticularsCurrent year(12 months)
Previous year(12 months)
As auditors (audit fee) 2.9 2.3
In other capacities
- Others 1.7 1.7
Reimbursement of expenses 0.2 0.1
3. There are no disputed dues of customs duty, wealth tax, service tax and cess matters which have not been deposited by the Company. The details of disputed sales tax, income-tax and excise duty dues as at March 31, 2009 are as follows:
(Rs million)
Statute Nature of dues Forum where pending Amount involved
Amount paid under protest
Year to which the amount
relatesSales Tax Act Sales Tax Deputy Commissioner Excise and Taxation 0.2 0.1 2003-04
Central Excise Law Excise Duty Customs, Excise and Service Tax Appellate Tribunal 3.7 - 2002-03
Service Tax Act Service Tax Customs, Excise and Service Tax Appellate Tribunal 0.7 - 2004-05 and
2005-06
Income Tax Act. Penalty Commissioner of Income Tax (Appeals) 0.2 0.1 1995-96
Income Tax Act. Income Tax Income Tax Appellate Tribunal 8.9 4.7 2002-03 and
2003-04
Income Tax Act. Income Tax Commissioner of Income Tax (Appeals) 121.0 91.0 2004-05
The following matters have been decided in favour of the Company, although the Department has preferred appeals at higher levels:
Statute Nature of dues
Amount(Rs million)
Period to which amount relates
Forum where Department has preferred appeals
Central Excise Law Excise Duty 48.4 2004-05, 2005-06 and 2006-07 Customs, Excise and Service Tax Appellate Tribunal
Service Tax Act Service Tax 1.3 2004-05 and 2005-06 Customs, Excise and Service Tax Appellate Tribunal
Income Tax Act Interest 1.7 1989-90 and 1990-91 High Court
Abhishek Industries Limited78About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
SCHEDULE 18 - NOTES TO THE ACCOUNTS (Contd.)
SCHEDULE annexed to and forming part of the accounts (Contd.)
5. Managerial remuneration paid/payable to Managing Director and Whole Time Director
(Rs million)
ParticularsCurrent year(12 months)
Previous year
(12 months)
Salary 9.9 9.6
Contribution to provident and other funds 1.7 1.6
Allowances 13.2 12.7
Insurance premium 0.1 0.1
Commission - 4.6
Total 24.9 28.6
6. Statement showing computation of net profit in accordance with section 349 read with Section 198 of the Companies Act, 1956
ParticularsCurrent year
(12 months)*
Previous year
(12 months)
Profit before tax - 481.0
Add : Managerial remuneration 28.6
Directors Fee - 1.0
Less : Profit on sale of Fixed Assets ( section 349(3)(c) of the Companies Act,1956 - 50.4
Profit under Section 349 of the Companies Act, 1956 - 460.2
Commission @ 1% of net profit as per Sec 349 - 4.6
Maximum permissible limit @ 5% - 23.0
* In view of inadequacy of profits, current year computation of profit has not been given.
The remuneration of Mr. Rajinder Gupta, Managing Director had been approved by the Shareholders in its EGM held on March 18, 2006.
An amount of Rs 24.0 million has been provided in the books of account in respect of the salary to the Managing Director, out of which
Rs 4.8 million has been paid and Rs 19.2 million has been withheld due to inadequacy of profits as computed under Section 349 of the
Companies Act, 1956, for which Management is confident of obtaining Central Government approval.
Provisions for incremental gratuity liability and leave encashment have not been considered, since the provision is based on actuarial basis
for the Company as a whole.
7. Employee benefits
(a) Defined contribution plans
The Company makes contribution towards employees’ provident fund and employees’ state insurance plan scheme. Under the schemes,
the Company is required to contribute a specified percentage of payroll cost, as specified in the rules of the schemes, to these defined
contribution schemes. The Company recognized Rs 98.2 million (Previous year Rs 77.0 million) during the year as expense towards
contribution to these plans. Out of Rs 98.2 million, Rs 9.2 million is included under Fixed assets/ Capital work in progress.
(b) Defined benefit plans
Gratuity scheme
The Company has entered into an agreement with Smt. Maya Devi Trust for the discharge of the gratuity liability to the employees of
the Company, who have acquired membership of the said Trust. The said Trust has taken a policy under Group Gratuity Scheme of the
Life Insurance Corporation and the Company is contributing to the Trust towards the payment of premium for such policy. The accrued
liability of the Company in respect of Gratuity payable to employees is covered in the manner aforesaid
(Rs million)
ParticularsCurrent year(12 months)
Previous year(12 months)
Company’s contribution to provident fund 71.1 55.7Company’s contribution to employees’ state insurance scheme 20.2 16.0Administrative charges on above 6.9 5.3
79Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULE 18 - NOTES TO THE ACCOUNTS (Contd.)
SCHEDULE annexed to and forming part of the accounts (Contd.)
Earned LeavesLong term leaves includes earned leaves and sick leaves. These have been provided on accrual basis, based on year end actuarial
valuation.(Rs million)
As at
March 31, 2009
As at
March 31, 2008
Gratuity Scheme Earned leave
and sick leave
Gratuity
Scheme
Earned leave
and sick leaveA Expenses recognized in the statement of Profit and
Loss Account for the year ended March 31, 2009
Current service cost 19.4 7.6 17.8 7.2
Interest cost 4.7 2.5 2.4 1.3
Expected return on plan assets (4.9) - (3.4) -
Actuarial (gains)/ losses (2.9) (4.0) 18.5 5.1
Total expenses 16.3 6.1 35.3 13.6B Net liabilities recognized in the balance sheet as at
March 31, 2009Present value of defined benefit obligation as at March
31, 2009
78.0 31.8 62.3 29.3
Fair value of plan assets with LIC* (65.1) - (47.7) -
Funds with Employee Trust * (10.9) - - -
Net liability as at March 31, 2009 (unfunded) 2.0 31.8 14.6 29.3C Change in the obligation during the year ended
March 31, 2009Present value of defined benefit obligation at the
beginning of the year
62.3 29.3 31.7 18.7
Current service cost 19.4 7.6 17.8 7.2
Interest cost 4.7 2.5 2.4 1.3
Actuarial (gains)/losses (2.9) (4.0) 18.5 5.1
Benefits payments (5.5) (3.6) (8.1) (3.0)
Present value of defined benefit obligation at the end of the year
78.0 31.8 62.3 29.3
D Change in assets during the year ended March 31, 2009
Plan Assets at the beginning of the year 47.7 - 27.6 -
Expected return on plan assets 4.9 - 3.4 -
Contribution by the Company 18.0 - 24.8 -
Actual benefits paid (5.5) - (8.1) -
Plan Assets at the end of the year 65.1 - 47.7 -
E Main actuarial assumptions
Discount rate 7.5% 7.5% 7.5% 7.5%
Rate of increase in compensation levels 7% 7% 7% 7%
Rate of return on plan assets 9.25% - 9.25% -
Mortality rate LIC(1994-96) Ultimate
LIC(1994-96) Ultimate
LIC(1994-96) Ultimate
LIC(1994-96) Ultimate
* The plan assets are maintained with Life Insurance Corporation of India/ Trust. The details of the investment maintained by Life Insurance Corporation of India/ Trust are not available with the Company and have not been disclosed.
Abhishek Industries Limited80About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
SCHEDULE 18 - NOTES TO THE ACCOUNTS (Contd.)
SCHEDULE annexed to and forming part of the accounts (Contd.)
8. Deferred Taxation(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008Deferred tax liability (DTL) on account of accelerated depreciation 1,093.9 715.5Less : Deferred tax asset (DTA) arising on - expenses deductible on payment. (279.7) (70.9) - unabsorbed depreciation (to the extent DTL) (485.2) -Net deferred tax liability 329.0 644.6#
10. The Earnings Per Share (EPS) disclosed in the Profit and Loss Account have been calculated as under:(Rs million)
ParticularsCurrent year(12 months)
Previous year(12 months)
Profit/Loss attributable to equity shareholders (Rs million) (A) (530.4) 399.5Weighted average number of equity shares (Nos) (B) 20,09,45,360 19,41,94,675Potential dilutive equity shares on Employee Stock Options outstanding (Nos) (C) - 14,17,927Potential dilutive equity shares on Share Warrants (Nos) (D) - 17,50,000Weighted average number of equity shares in computing diluted earning per share (E) = (B+C+D)
20,09,45,360 19,73,62,602
Basic Earnings per share (Rs per share) (face value of Rs 10 each) (A)/(B) (2.64) 2.06Diluted Earnings per share (Rs per share) (face value of Rs 10 each) (A)/(E) (2.64) 2.02
11. Borrowing cost capitalized (including capital work in progress) during the year amounts to Rs 436.7 million (Previous year Rs 342.4 million).
The Company follows Accounting Standard (AS-22) “Accounting for taxes on Income”, and in consideration of prudence and also considering the favorable trend in the textile and paper business of the Company and potential orders for exports, the management is confident that even after losses in the current year, the Company would be in a position to make adequate taxable profits in the foreseeable future. Accordingly based on future projections, the management is of the view that sufficient future taxable income would be available to set off unabsorbed depreciation and accordingly deferred tax assets of Rs 485.2 million would be realized.
# Net of deferred tax asset of Rs 4.9 million on adjustment on account of employee benefit, pursuant to adoption of Accounting Standard (AS) 15 “Employee Benefits”.
9. Sundry Creditors includes Rs 5.6 million (Previous year Rs 0.1 million) being principal amount due to suppliers covered under “The Micro,Small and Medium Enterprises Development Act, 2006” (MSMED Act) to the extent such parties have been identified from the available information.
12. Project and pre operative expenses pending allocation includes:(Rs million)
Particulars As at
March 31, 2009As at
March 31, 2008
Opening Balance 751.1 239.1Add: Expenses incurred during the year: - Project & pre-operatives expenses
Loss on foreign exchange fluctuation 285.1 - Interest expenses 167.3 342.4 Salary, wages and bonus etc. 74.4 99.8 Legal and professional 61.4 86.2 Electricity and water charges 7.4 11.2 Travelling and conveyance 6.6 4.5 Others 7.1 18.7 Bank charges 4.9 10.6 Stores and spares consumed 2.0 -
616.2 573.4 - Expenses incurred during Trial Run period
Raw material consumed 737.0 - Steam consumed 377.8 - Interest expenses 269.4 - Electricity and water charges 246.6 -
81Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
Salary, wages and bonus etc. 154.8 - Store & spares consumed 63.6 - Rebates & discount 43.8 - Freight, clearing and octroi charges 29.7 - Other selling expenses 21.7 - Commission 17.2 - Legal and professional 5.0 - Repair and maintenance 3.0 - Travelling and conveyance 1.8 - Others 16.0 -(Increase) /decrease in work in progress and finished goods (131.7) -Increase /(decrease) in Excise duty 4.5 -
1,860.2 - Less: Income earned during trial run period
Sales 1,377.8 - Other incomes 0.3 -
1,378.1 482.1 - - Grand Total 1,849.4 812.5Less: Allocated to fixed assets and capital work in progress 1,551.8 61.4Closing Balance 297.6 751.1
SCHEDULE 18 - NOTES TO THE ACCOUNTS (Contd.)
SCHEDULE annexed to and forming part of the accounts (Contd.)
12. Project and pre operative expenses pending allocation includes: (Contd.)(Rs million)
Particulars As at
March 31, 2009As at
March 31, 2008
13. The following current investments in the units of mutual funds were purchased and sold during the year:1,31,88,800 units of Rs 10 each fully paid up of Magnum Insta Cash Liquid Floater – Growth 24,33,202 units of Rs 10 each fully paid up of Magnum Insta Cash Liquid Floater – Dividend
1,06,76,224 units of Rs 10 each fully paid up of IDFC Floating Fund LT Institutional Plan B Growth 62,91,174 units of Rs 10 each fully paid up of Reliance Medium Term Fund Retail Plan Growth
8,870 units of Rs 10 each fully paid up of Grindlays Super Saver Income Fund- ST Plan C Fortnightly Dividend 82,84,798 units of Rs 10 each fully paid up of Grindlays Super Saver Income Fund- ST Plan C Growth
2,124 units of Rs 10 each fully paid up of Reliance Liquid Plus Fund - Retail Option – Growth 2,16,500 units of Rs 10 each fully paid up of HDFC FMP 90 Days Retail Plan Dividend Payout
2,85,43,014 units of Rs 10 each fully paid up of Magnum Insta Cash Fund – Cash Option 5,50,920 units of Rs 10 each fully paid up of Principal Floating Rate SMP Daily Div Reinvest
30,569 units of Rs 10 each fully paid up of Reliance Liquid Plus – Inst Growth 69,58,167 units of Rs 10 each fully paid up of Reliance Liquid Plus Cash
14. The related party disclosures as per Accounting Standard-18 are as under: i) Enterprises where control exists a) Enterprise that controls the Company - Madhuraj Foundation (directly or indirectly holds majority voting power) b) Enterprises that are controlled by the Company, i.e. subsidiary companies - Abhishek Industries Inc. - Abhishek Europe SA - Abhishek Global Ventures Limited ii) Other related parties where transactions have taken place during the year: a) Enterprises under the common control as the Company - Trident Agritech Limited (Formerly known as Madhuraj Agrotech Limited) - Madhuraj Foundation Limited - Praneel Innovations Limited - Rainbow Retail Limited (Formerly known as Abhishek Retail Limited) b) Enterprise on which Company exercises significant influence - Lotus Integrated Texpark Limited c) Key management personnel - Mr. Rajinder Gupta - Mr. Raman Kumar d) Relative of key management personnel - Mr. Abhishek Gupta
Abhishek Industries Limited82About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
Disclosure of transactions between the Company and related parties during the year and outstanding balances as on March 31, 2009.(Rs million)
Particulars
Enterprise that controls the
Company
Subsidiaries Enterprises that are under common
control as the Company
Significant Influence
Key management personnel
Relative of key management
personnel
Current year
Previous year
Current year
Previous year
Current year
Previous year
Current year
Previous year
Current year
Previous year
Current year
Previous year
Purchase of Goods/Services - Praneel Innovations Limited 22.8 28.8 - Abhishek Global Ventures Limited 3.4 26.2 - Madhuraj Foundation Limited 0.3 - - Madhuraj Foundation 0.1 - - Lotus Integrated Texpark Limited 2.3 - Sale of Goods/Services - Rainbow Retail Limited 1.2 - Rent received - Praneel Innovations Limited - 0.6 - Mr. Rajinder Gupta 0.6 0.6 - Lotus Integrated Texpark Limited 0.2 0.2 Rent paid 0.5 7.2 Security Deposit made - Madhuraj Foundation 62.5 3.6 Security Deposit received - Praneel Innovations Limited 0.2 - Remuneration paid/payable - Mr. Rajinder Gupta 24.0 28.6 (Also refer Note 5) - Mr. Raman Kumar 0.9 - - Mr. Abhishek Gupta 0.7 -Sales of Assets: - Madhuraj Foundation. - 70.0 - Abhishek Global Ventures Limited - 261.8 - Lotus Integrated Texpark Limited - 210.0 Investments made: - Abhishek Global Ventures Limited - 0.5 - Lotus Integrated Texpark Limited - 100.0 Expenses incurred on behalf of: - Rainbow Retail Limited 16.2 - - Abhishek Global Ventures Limited 0.1 - - Praneel Innovations Limited 0.3 - Loans and advances given: - Madhuraj Foundation 2.7 3.6 - Abhishek Global Ventures Limited 2.5 32.2 - Trident Agritech Limited 34.4 98.4 - Praneel Innovations Limited 13.9 6.9 Guarantees given on behalf of - Asian Trading Corporation Limited - 300.0 Balances as at March 31, 2009: Share application money paid - Abhishek Global Ventures Limited 65.0 60.0 - Lotus Integrated Texpark Limited 1.0 - - Rainbow Retail Limited 30.0 - Guarantee outstanding - Asian Trading Corporation Limited - 300.0 Amounts receivable - Trident Agritech Limited 145.7 111.3 - Lotus Integrated Texpark Limited - 5.0 - Abhishek Global Ventures Limited 42.7 42.9 - Madhuraj Foundation 0.5 2.7 - Praneel Innovations Limited 10.0 - - Rainbow Retail Limited (net of provision of Rs 10.0 million)
7.4 -
Amounts payable - Praneel Innovations Limited - 3.7 - Lotus Integrated Texpark Limited 0.8 - - Mr. Rajinder Gupta 25.4 6.1 - Mr. Raman Kumar 0.1 - - Mr. Abhishek Gupta 0.1 -
SCHEDULE 18 - NOTES TO THE ACCOUNTS (Contd.)
SCHEDULE annexed to and forming part of the accounts (Contd.)
83Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULE 18 - NOTES TO THE ACCOUNTS (Contd.)
15. Loans and advances includes amounts given to Companies under the same management referred to in Section 370 (1B) of The Companies
Act, 1956 of Rs 145.7 million (Previous year Rs 111.3 million), Rs 10.0 million (Previous year Rs Nil) and Rs Nil (Previous year Rs Nil),
recoverable from Trident Agritech Limited (formerly known as Madhuraj Agrotech Limited), Praneel Innovations Limited and Madhuraj
Foundation Limited respectively {maximum amount outstanding during the year Rs 145.7 million (Previous year Rs 112.4 million), Rs 16.2
million (Previous year Rs 2.0 million) and Rs 0.2 million (Previous year Rs Nil) respectively}.
16. Segment information:
I Segment Accounting Policies
a. The business segments comprise of the following:
• Yarn : Yarn manufacturing
• Towel : Towel, Dyed Yarn manufacturing
• Paper and Chemical : Paper and Sulphuric Acid
b. Business segments have been identified based on the nature and class of products and services, their customers and assessment
of differential risks and returns and financial reporting system within the Company
c. The geographical segments considered for disclosure are based on markets, broadly as under:
• Sale in the USA
• Sale in rest of the world
d. Segment accounting policies: In addition to the significant accounting policies, applicable to the business as set out in Note 1 of
schedule 18 “Notes to the Accounts”; the accounting policies in relation to segment accounting are as under:
i. Segment assets and liabilities:
Segment assets include all operating assets used by a segment and consist principally of cash, debtors, inventories and
fixed assets including capital work in progress, net of allowances and provisions, which are reported as direct offset in the
balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities.
ii. Segment rev enue and expenses:
Joint revenue and expenses of segments are allocated amongst them on reasonable basis. All other segment revenue and
expenses are directly attributable to the segments.
iii. Inter segment sales: Inter segment sales are accounted for at cost and are eliminated in consolidation.
SCHEDULE annexed to and forming part of the accounts (Contd.)
Abhishek Industries Limited84About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
SCHEDULE 18 - NOTES TO THE ACCOUNTS (Contd.)
II Details of primary business segments:
(Rs million)
Particulars Yarn Towel Paper &Chemical Unallocable Eliminations Consolidated
Total
CurrentYear
Pervious Year
CurrentYear
Pervious Year
CurrentYear
Pervious Year
CurrentYear
Pervious Year
CurrentYear
Pervious Year
CurrentYear
Pervious Year
1 Segment Revenue - External sales 3,397.0 2,948.3 7,560.5 5,814.1 3,023.1 1,724.3 13,980.6 10,486.7 - Inter-segment sales 1,211.3 1,363.0 1.3 8.0 13.7 9.1 (1,226.3) (1,380.1) - - - Other Income 0.2 71.0 25.7 268.9 10.1 25.5 3.4 - (4.4) (0.1) 35.0 365.3 Total Revenue 4,608.5 4,382.3 7,587.5 6,091.0 3,046.9 1,758.9 3.4 - (1,230.7) (1,380.2) 14,015.6 10,852.0
2 Segment Results 58.4 334.6 (95.3) 579.0 326.3 222.0 289.4 1,135.6 Unallocated corporate expenses (net of unallocated income)
(284.1) (181.3)
Profit before interest and tax
5.3 954.3
Interest expense (833.2) (473.2) Provision for taxation 297.5 (81.6)
3 Profit/(Loss) after tax (530.4) 399.5 4 Other Information a) Segment assets 6,797.6 5,287.2 5,797.3 5,857.9 8,891.2 8,013.9 (783.1) (1,025.7) 20,703.0 18,133.3
Unallocated corporate assets
2,093.0 1,625.5 2,093.0 1,625.5
Total assets 6,797.6 5,287.2 5,797.3 5,857.9 8,891.2 8,013.9 2,093.0 1,625.5 (783.1) (1,025.7) 22,796.0 19,758.8 b) Segment liabilities 640.8 164.6 783.6 662.0 1,635.8 1,941.2 (783.1) (1,025.7) 2,277.1 1,742.1
Unallocated corporate liabilities
20,518.9 18,016.7 20,518.9 18,016.7
Total liabilities 640.8 164.6 783.6 662.0 1,635.8 1,941.2 20,518.9 18,016.7 (783.1) (1,025.7) 22,796.0 19,758.8 Capital Expenditure 1,775.1 389.1 371.6 792.9 1,354.2 3,283.8 13.1 33.8 3,514.0 4,499.6 Depreciation 275.8 307.7 520.5 465.9 337.0 58.8 26.0 31.4 1,159.3 863.8 Non-cash expenses other than depreciation
2.4 0.2 14.0 1.1 1.1 - 81.7 32.8 99.2 34.1
III Secondary Segment – Geographical: (Rs million)
Particulars Current year Previous yearSale in USA 5,150.7 4,126.8India and other countries 8,829.9 6,359.9Total Sales 13,980.6 10,486.7Segment Assets in: USA 6.9 36.7India and other countries 21,479.2 19,122.3Capital expenditure:USA - -India and other countries 3,514.0 4,499.6
17. The foreign currency exposure of the Company as on March 31, 2009 is as under:
a) Category wise quantitative dataNos. Amounts
Current year Previous yearPut and call Option contracts 9 From USD 5.0 million to 6.4 million per
month (Total from USD 205.0 million to USD 262.3 million)
From USD 5.0 million to 6.4 million per month (Total from USD 265.0 million
to USD 339.1 million),From Euro 0.3 million to Euro 0.5
million per week (Total from Euro 19.3 million to 38.5 million)
Forward contracts against exports 152 USD 106.9 million,Euro 0.1 millionGBP 0.2 million
USD 134.0 million,Euro 13.1 million
SCHEDULE annexed to and forming part of the accounts (Contd.)
85Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULE 18 - NOTES TO THE ACCOUNTS (Contd.)
19. During the Financial year 2008-09, the Company has allotted for cash 2,80,00,000 equity shares of Rs 10 each at a premium of Rs 11.30 per share on conversion of equivalent number of warrants issued on preferential basis. The proceeds received from this issue have been utilized towards meeting part of capital expenditure for Integrated Paper and Pulp project of the Company.
20. The Board of Directors of the Company has granted options to the employees pursuant to Abhishek Employees Stock Options Plan 2007 on July 9, 2007. These options were granted at Rs 17.55 per option, being the latest available closing market price prior to the date of grant of options in accordance with SEBI guidelines. The quoted price of share on grant and the exercise price of option is equal and therefore there is no impact on profit and loss account due to Employee Share-based options as the Company is following intrinsic value method.
21. The Company has exercised the option given vide notification No. G.S.R. 225(E) dated March 31, 2009 issued by the Ministry of Corporate Affairs, Government of India and in accordance therewith, the Company has capitalized the loss aggregating to Rs 78.1 million arisen on translation of long term foreign currency monetary liabilities relating to acquisition of fixed assets, out of which Rs 0.2 million has been amortized during the year and the unamortized balance as at March 31, 2009 is Rs 77.9 million.
Had the Company not exercised the option given under the aforesaid Notification, gross fixed assets would have been Rs 20,954.0 million (as against reported figure of Rs 21,032.1 million), depreciation would have been Rs 1,159.1 million (as against reported figure of Rs 1,159.3 million), net exchange loss would have been Rs 1,36.0 million (as against reported figure of Rs 57.9 million) and loss after tax for the year would have been Rs 608.3 million (as against reported figure of Rs 530.4 million).
22. During the Financial year 2008-9, the Company completed its Integrated Paper and Pulp project. After installing and completing the project, the Company had to further incur additional capital expenditure on debottlenecking of critical processes of newly installed paper & pulp machines and finally started the commercial production w.e.f. December 1, 2008 after achieving normal level of production. The expenditure incurred on the project has been capitalized in the books of accounts.
23. Additional Information:a) Licensed and installed capacity: Annual Capacity
Particulars Unit Licensed capacity Installed capacity*As at
March 31, 2009As At
March 31, 2008As at
March 31, 2009As At
March 31, 2008Cotton spindles Nos. N A N A 125,952 125,952Rotors Nos. N A N A 1,920 1,920Processed yarn TPA N A N A 6,825 6,825Towel LOOMS N A N A 350 282Paper TPA N A N A 175,000 40,500Sulphuric acid TPA N A N A 100,000 100,000NA is not applicable* Installed capacity has been certified by the management and relied on by the auditors being a technical matter and are on annual basis.
Forward contracts against imports Nil Nil Euro 3.1 million,USD 3.4 million
b) All the derivative instruments are for hedging foreign exchange exposures against firm commitments and/or highly probable forecast transactions.
c) Foreign currency exposures remaining unhedged at the year end:Against Imports (Creditors) - Euro 2.1 million (Previous year Euro 2.1 million)
- Swedish Kroner 16.6 million (Previous year SEK 16.6 million)- USD 0.1 million (Previous year USD 0.8 million)
Against Exports (Debtors) - USD 0.6 million (Previous year USD 1.3 million)- Euro 0.2 million (Previous year Nil)- GBP 0.1 million (Previous year Nil)
Foreign Currency Loans - USD 51.3 million (Previous year USD 30.3 million)Acceptances - USD 8.8 million (Previous year USD 8.5 million)
- EUR 1.4 million (Previous year Euro 0.3 million)18. The Company hedges its foreign currency fluctuation exposure by way of foreign currency derivative options. The Company has taken various
USD/INR options from various banks and as at March 31, 2009, there are 9 open put options having a maturity period up to January 2013. These derivative options are proprietary products of banks, which do not have a ready market and as such are marked to a model, which is usually bank specific instead of being marked to market. Based on marked to a model concept the loss on valuation amounts to Rs 2,707.8 million. However, in the view of the management due to significant uncertainty associated with the above derivative options whose ultimate outcome depends on future events, the loss on such open derivative options cannot be determined at this stage.
SCHEDULE annexed to and forming part of the accounts (Contd.)
Abhishek Industries Limited86About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
SCHEDULE 18 - NOTES TO THE ACCOUNTS (Contd.)
c) Opening stock of finished goodsParticulars Unit Current year Previous year
Qty. Value (Rs million) Qty. Value (Rs million)Yarns* MT 973 104.5 1,213 108.5Processed yarn** MT 37 7.1 37 7.8Towel *** MT 1,842 361.2 1,586 314.1Paper****# MT 40 1.0 - -Sulphuric acid MT 1,968 18.8 308 0.4Others 17.9 7.0Total 510.5 437.8* Includes stock in transit 292 MT ** Includes stock in transit 7 MT *** Includes stock in transit 1217 MT **** Includes stock in transit 40 MT# Excludes opening stock of trial run production of 898 MT of Paper and Pulp expansion project as on 01.12.2008
d) Closing stock of finished goodsParticulars Unit Current year Previous year
Qty. Value (Rs million) Qty. Value (Rs million)Yarns * MT 568 63.5 973 104.5Processed yarn** MT 41 7.8 37 7.1Towel *** MT 1,854 372.6 1,842 361.2Paper MT 1,268 43.9 40 1.0Sulphuric acid MT 1,326 1.6 1,968 18.8Others 17.9 17.9Total 507.3 510.5* Includes stock in transit 110.081 MT** Includes stock in transit 5.707 MT *** Includes stock in transit 1,093.707 MT
b) Actual ProductionParticulars Unit Current year
Qty.Previous year
QtyYarn* MT 40,072 42,244Processed yarn** MT 5,236 5,024Towel*** MT 28,311 24,616Paper****# MT 67,302 40,832Sulphuric acid***** MT 60,968 68,437* Includes 11,819 MT (Previous year 14,473 MT) for captive consumption.** Includes 3,767 MT (Previous year 3,476 MT) for captive consumption.*** Includes 8 MT (Previous year 40 MT) for captive consumption. **** Includes 22 MT (Previous year 21 MT) for captive consumption. ***** Includes 4,220 MT (Previous year 1,870 MT) for captive consumption. # Excludes trial run production of 27,332 MT in Paper and Pulp expansion project
e) Turnover* Particulars Unit Current year Previous year
Qty. Value (Rs million) Qty. Value (Rs million)Yarn MT 28,658 3,155.8 28,036 2,728.4Processed yarn MT 1,465 290.6 1,548 302.1Towel** MT 28,291 7,224.4 24,319 5,184.2Paper*** MT 66,950 2,837.6 40,771 1,503.4Sulphuric acid MT 57,390 382.8 64,907 334.8Others 338.7 629.3Total 14,229.9 10,682.2* Net off inter division transfer but inclusive of excise duty.** Towel includes bathrobes, wash-mats and beach bags.***Excludes trial run sale of 26,434 MT of Paper and Pulp expansion project
SCHEDULE annexed to and forming part of the accounts (Contd.)
87Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULE 18 - NOTES TO THE ACCOUNTS (Contd.)
f) Goods purchased for resaleParticulars Unit Current year Previous year
Qty. Value (Rs million) Qty. Value (Rs million)Yarn MT - - 24 6.3Others 4.5 - -
h) CIF value of imports(Rs million)
Particulars Current year Previous yearCapital goods 795.3 2,024.8Store and spares 103.4 58.2Raw materials 457.7 217.4
i) Expenditure in foreign currency(Rs million)
Particulars Current year Previous yearTraveling 3.2 8.8Others 103.6 98.8
g) Raw material consumedParticulars Unit Current year Previous year
Qty. Value (Rs million) Qty. Value (Rs million)Cotton MT 48,266 3,026.2 51,756 2,668.3Man made fiber MT 676 116.0 519 72.7Yarn MT 21,412 2,146.2 13,104* 1,178.4Towel fabric outsourced MT - - 739 143.6Agro straw MT 115,101 207.9 80,260 155.2Wood pulp MT 2313 114.0 1,700 60.1Sulphur MT 20,829 303.5 23,676 261.2Wood & wood species MT 29,695 94.3 - -Dyes and chemicals 1,064.7 771.1Others 32.8 3.7Total 7,105.6 5,314.3* Excluding 45 MT used for captive consumption
j) Value of raw material / stores and spares consumed (Rs million)
Particulars Current year Previous yearImported Indigenous Imported Indigenous
Raw materials 433.0 6,672.6 268.9 5,045.4Percentage % 6.1 93.9 5.0 95.0Components, store and spares and packing material
103.4 657.5 58.2 536.7
Percentage % 13.6 86.4 9.8 90.2
k) Earnings in foreign exchange(Rs million)
Particulars Current year Previous yearExport of goods calculated on FOB value 6,861.5 5,192.8
24 The figures of the previous year have been rearranged/ regrouped, wherever considered necessary to facilitate comparison.25 Schedules 1 to 18 form an integral part of the accounts.
For and on behalf of the Board S K Tuteja Rajinder Gupta
Chairman Managing Director
Place : New Delhi Pawan Jain Arun Goyal Date : May 15, 2009 Company Secretary Chief Financial Officer
SCHEDULE annexed to and forming part of the accounts (Contd.)
Abhishek Industries Limited88About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
BALANCE SHEET ABSTRACT and Company’s General Business Profile
The information required as under Part IV of Schedule VI to Companies Act, 1956
I Registration Details
Registration No. 0 1 0 3 0 7 State Code 1 6
Balance Sheet Date 3 1 0 3 2 0 0 9Date Month Year
II Capital raised during the year (Amount Rs Million)
Public Issue N I L Rights Issue N I L
Bonus Issue N I L Private Placement 5 3 6 . 4
III Position of Mobilisation and Deployment of Funds (Amount Rs Million)
Total Liabilities 2 0 3 6 1 Total Assets 2 0 3 6 1
Sources of Funds
Paid - up Capital 2 2 2 2 Reserves and Surplus * 2 5 7 0
Secured Loans 1 5 5 3 7 Unsecured Loans 3 2
Application of Funds
Net Fixed Assets 1 6 8 1 0 Investments 1 1 8 7
Net Current Assets 2 3 6 4 Miscellaneous Expenditure N I L
Accumulated Losses N I L
IV Performance of Company (Amount Rs Million)
Turnover 1 4 0 6 0 Total Expenditure 1 4 8 8 8+ – + –
Profi t Before Tax 8 2 8 Profi t After Tax 5 3 0(Please tick appropriate box + for profi t – for loss)Earning per Share in Rs - 2 . 6 4 Dividend Rate (%) N I L* includes deffered tax liability
V Generic Names of Three Principal Products /Services of Company
Item Code No. 5 2 . 0 5
Product Description C O T T O N Y A R N
T E R R Y T O W E L S
Item Code No. 4 8 . 0 2
Product Description W R I T I N G A N D P R I N T I N G P A P E R
Item Code No. 2 8 . 0 7
Product Description S U L P H U R I C A C I D
For and on behalf of the Board S K Tuteja Rajinder Gupta
Chairman Managing Director
Place: New Delhi Pawan Jain Arun Goyal Date: May 15, 2009 Company Secretary Chief Financial Officer
89Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
AUDITORS’ REPORT
1. We have audited the attached consolidated balance sheet of
Abhishek Industries Limited and its subsidiaries (collectively
referred to as “the Group”) as at March 31, 2009 and also the
consolidated profit and loss account and the consolidated
cash flow statement for the year ended on that date annexed
thereto. These consolidated financial statements are the
responsibility of the management of Abhishek Industries
Limited. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.
2. We conducted our audit in accordance with generally accepted
auditing standards 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
misstatements. 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
statements presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. We did not audit the financial statements of certain subsidiaries,
whose financial statements reflect the Group’s share of total
assets of Rs 282.63 millions as at March 31, 2009, Group’s
share of total revenue of Rs 2.63 millions and net cash outflows
amounting to Rs 1.40 millions for the year ended on that date
and an associate whose financial statements reflect the Group’s
share of loss upto March 31, 2009 of Rs 0.20 million and the
group’s share of loss of Rs 0.04 million for the year ended on
that date as considered in the Consolidated Accounts. These
financial statements and other financial information have been
audited by other auditors whose reports have been furnished
to us, and our opinion is based solely on the report of other
auditors
4. We report that the consolidated financial statements have been
prepared by the Company in accordance with the requirements of
Accounting Standard 21 - “Consolidated Financial Statements”
and Accounting Standards 23 - “Accounting for Investments in
Associates in Consolidated Financial Statements” as notified by
the Companies (Accounting Standards) Rules, 2006 and on the
basis of the separate audited financial statements of Abhishek
Industries Limited, its subsidiaries and associate included in the
consolidated financial statements.
5. As indicated in note 14 of Schedule 19 the possible loss on
valuation of open put derivative options, in view of the reasons
stated therein could not be determined by the Company. The
ultimate outcome of these transactions and their effect on
these accounts cannot be ascertained at this stage.
subject to Paragraph 5 above, on the basis of the information
and explanations given to us and on the consideration of
the separate audit reports on individual audited financial
statements of Abhishek Industries Limited, its subsidiaries and
associate, in our opinion, the consolidated financial statements
give a true and fair view in conformity with the accounting
principles generally accepted in India:
(a) in the case of the consolidated balance sheet, of the
consolidated state of affairs of the Group as at March 31,
2009;
(b) in the case of the consolidated profit and loss account, of
the consolidated results of operations of the Group for the
year ended March 31, 2009; and
(c) in the case of the consolidated cash flow statement, of
the consolidated cash flows of the Group for the year
ended March 31, 2009.
For Deloitte Haskins & SellsChartered Accountants
Manjula BanerjiPlace: New Delhi PartnerDate: May 15, 2009 Membership No. 086423
REPORT OF THE AUDITORS TO THE BOARD OF DIRECTORS OF ABHISHEK INDUSTRIES LIMITED ON THE CONSOLIDATED FINANCIAL STATEMENTS OF ABHISHEK INDUSTRIES LIMITED AND ITS SUBSIDIARIES.
Abhishek Industries Limited90About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
CONSOLIDATED BALANCE SHEET as at March 31, 2009
(Rs million)
ParticularsSchedule
No.As at
March 31, 2009As at
March 31, 2008I SOURCES OF FUNDS
1 Shareholders' funds
a) Share capital 1 2,221.9 1,941.9
b) Reserves and surplus 2 2,225.9 2,437.7
c) Share application money 0.1 0.1
d) Equity warrants 3 - 4,447.9 60.0 4,439.7
2 Loan funds
a) Secured loans 4 15,537.0 13,074.3
b) Unsecured loans 5 32.1 15,569.1 27.8 13,102.1
3 Deferred tax liability (Net) (Refer Note 6) 329.0 644.6
4 Minority Interest(Current year Rs 3131, Previous year Rs 3737)
- -
Total 20,346.0 18,186.4
II APPLICATION OF FUNDS
1 Fixed assets 6
a) Gross block 21,284.9 13,525.2
b) Less : Depreciation 6,315.5 5,201.4
c) Net block 14,969.4 8,323.8
d) Capital work in progress 7 2,096.4 17,065.8 6,341.1 14,664.9
2 Investments 8 1,182.8 753.2
3 Current assets, loans and advances 9
a) Inventories 2,110.0 2,252.0
b) Sundry debtors 602.1 386.6
c) Cash and bank balances 204.0 401.9
d) Loans and advances 1,799.7 1,543.1
4,715.8 4,583.6
Less : Current liabilities and provisions 10
a) Liabilities 2,526.0 1,709.4
b) Provisions 92.5 106.0
2,618.5 1,815.4
Net current assets 2,097.3 2,768.2
4 Miscellaneous expenditure
(To the extent not written off or adjusted)
11 0.1 0.1
Total 20,346.0 18,186.4
Notes to the accounts 19
As per our report attached For and on behalf of the Board
For Deloitte Haskins & Sells S K Tuteja Rajinder GuptaChartered Accountants Chairman Managing Director
Manjula Banerji Pawan Jain Arun Goyal Partner Company Secretary Chief Financial Officer Membership No. 086423
Place : New Delhi Place : New DelhiDate : May 15, 2009 Date : May 15, 2009
91Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
CONSOLIDATED PROFIT & LOSS ACCOUNT for the year ended March 31, 2009
(Rs million)
ParticularsSchedule
No.For the year ended
March 31, 2009For the year ended
March 31, 2008INCOME
Gross turnover 15,456.1 12,062.2 Less: Excise duty 249.3 195.5 Less: Inter divisional transfers 1,226.2 1,380.0 Turnover 13,980.6 10,486.7 Other income 12 82.1 149.8 Total 14,062.7 10,636.5 EXPENDITURE
Raw materials consumed 7,105.6 5,314.3 Manufacturing expenses, etc. 13 1,837.5 1,578.0 Personnel expenses 14 1,286.0 1,230.3 Administrative and other expenses 15 439.6 317.4 Selling expenses 16 716.7 675.2 (Increase)/decrease in work in process and finished goods 17 81.9 (7.3)Increase/(decrease) in excise duty on finished goods (7.2) (0.1)Total 11,460.1 9,107.8 Profit before financial expenses, depreciation and tax 2,602.6 1,528.7 Financial expenses 18 833.2 473.2 Depreciation 1,159.4 863.9 Profit for the year before extraordinary/ exceptional item and tax
610.0 191.6
Foreign exchange gain/(loss) (1,440.7) 278.1 (Loss)/Profit for the year after extraordinary/exceptional item and before tax
(830.7) 469.7
Less: Provision for taxation- Current tax - 52.3 - Deferred tax liability/(asset) (315.6) (23.6)- Fringe benefit tax 11.5 (304.1) 12.0 40.7 MAT credit entitlement - (12.6)Provision for income tax for earlier years 6.6 53.5 (Loss)/Profit after tax (533.2) 388.1 Balance brought forward from previous year 2,133.9 1,755.4 Adjustment on account of employees' benefit(Net of deferred tax of Rs Nil; Previous year Rs. 4.9 million) (Refer Note 5)
- (9.6)
Balance carried to balance sheet 1,600.7 2,133.9 Earning per share (equity shares, nominal value Rs 10 each) (Note 8)-Basic (2.65) 2.00-Diluted (2.65) 1.97Notes to the accounts 19
As per our report attached to the Balance Sheet For and on behalf of the Board
For Deloitte Haskins & Sells S K Tuteja Rajinder GuptaChartered Accountants Chairman Managing Director
Manjula Banerji Pawan Jain Arun Goyal Partner Company Secretary Chief Financial Officer Membership No. 086423
Place : New Delhi Place : New DelhiDate : May 15, 2009 Date : May 15, 2009
Abhishek Industries Limited92About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
As per our report attached to the Balance Sheet For and on behalf of the Board
For Deloitte Haskins & Sells S K Tuteja Rajinder GuptaChartered Accountants Chairman Managing Director
Manjula Banerji Pawan Jain Arun Goyal Partner Company Secretary Chief Financial Officer Membership No. 086423
Place : New Delhi Place : New DelhiDate : May 15, 2009 Date : May 15, 2009
CONSOLIDATED CASH FLOW STATEMENT for the year ended March 31, 2009
(Rs million)Particulars Current year Previous yearA CASH FLOW FROM / (USED) IN OPERATING ACTIVITIES
Net Profit before tax (830.7) 469.7 Adjustments for:Depreciation 1,159.4 863.9 Financial expenses 833.2 473.2 Interest received on fixed deposits and from customers (35.9) (38.0)Doubtful debts/ advances written off 0.1 1.4 Provision for doubtful debts/ advances 17.3 - Provision for diminution in value of investments 81.7 32.8 Provisions no longer required written back (7.6) (10.8)Profit on sale of current investments (non trade) (8.9) (59.6)Loss on sale of current investments (non trade) 31.1 2.3 Dividend from, non-trade, unquoted, current investments (3.2) (6.9)Loss on sale of fixed assets 2.4 8.3 Profit on sale of fixed assets (3.6) 2,066.0 (41.1) 1,225.5 Operating profit before working capital changes 1,235.3 1,695.2 Adjustments for:(Increase)/decrease in trade and other receivables (453.0) (542.8)(Increase)/decrease in inventories 142.0 89.9 Increase/(decrease) in trade payables and other liabilities 1,156.2 845.2 154.9 (298.0)Cash generated from operations 2,080.5 1,397.2 Income tax paid (27.8) (85.4)Net cash from / (used) in Operating activities 2,052.7 1,311.8
B CASH FLOW FROM / (USED) IN INVESTING ACTIVITIESPurchase of fixed assets (3,905.9) (4,547.0)Sale of fixed assets 7.2 534.3 Purchase of investments (2,035.1) (2,835.8)Sale of investments 1,504.8 2,572.4 Share application money paid to others (31.5) -Subsidy received from government 5.0 8.0 Interest received 30.9 33.9 Net cash from / (used) in Investing activities (4,424.6) (4,234.2)
C CASH FLOW FROM / (USED) IN FINANCING ACTIVITIESProceeds from issue of equity shares on conversion of warrants 536.4 - Proceeds from issue of equity warrants - 60.0 Share application money - 0.1 Proceeds from long term borrowings 2,799.9 4,075.5 Repayment of long term borrowings (1,789.9) (1,171.3)Changes in working capital loans/short term borrowings 1,457.0 298.8 Dividend paid - (0.1)Interest paid (829.4) (474.1)Net cash from / (used) in financing activities 2,174.0 2,788.9 Net increase/(decrease) in cash and cash equivalents (197.9) (133.5)Cash and cash equivalents as at April 1, 2008 401.9 535.4 Cash and cash equivalents as at March 31, 2009 204.0 401.9
Notes to the accounts Schedule 19
93Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULE 3 - EQUITY WARRANTS
Nil (Previous year 2,80,00,000) equity warrants, allotted on a preferential basis, carrying an
option to the holder of such warrants to subscribe to one equity share of Rs 10 each at a
premium of Rs 11.30 per share for every warrant held, within 18 months from the date of
allotment (i.e. from July 9, 2007). (Refer Note 15)
- 60.0
- 60.0
SCHEDULE 2 - RESERVES AND SURPLUS
1 Capital reserve
Opening balance 81.6 73.6
Addition during the year 5.0 86.6 8.0 81.6
2 Share premium account
Opening balance 222.2 222.2
Addition during the year (Refer Note 15) 316.4 538.6 - 222.2
3 Surplus being balance in profit and loss account
Opening balance 2,133.9 1,755.4
Less: Adjustment on account of employees’ benefit(Net of deferred tax of Rs Nil ; Previous year Rs 4.9 million)
- 9.6
2,133.9 1,745.8
Addition/(deduction) during the year (533.2) 1,600.7 388.1 2,133.9
2,225.9 2,437.7
SCHEDULES annexed to and forming part of Consolidated Financial Statements
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
SCHEDULE 1 - SHARE CAPITAL
Authorised
50,00,00,000 (Previous year 50,00,00,000) Equity shares of Rs 10 each 5,000 .0 5,000.0
10,00,00,000 (Previous year 10,00,00,000) Preference shares of Rs 10 each 1,000.0 1,000.0
6,000.0 6,000.0
Issued, subscribed and paid up
22,21,94,675 (Previous year 19,41,94,675) Equity shares of Rs 10 each fully paid up, 2,221.9 1,941.9
Of the above :
3,46,29,630 Equity shares of Rs 10 each have been allotted on July 28, 1999 to the
Shareholders of the erstwhile Abhishek Spinfab Corporation Limited on
amalgamation with the Company vide Order dated May 13, 1999 of the
Hon’ble High Court for the States of Punjab and Haryana at Chandigarh,
without payment being received in cash;
9,36,97,545 Equity shares of Rs 10 each have been allotted on March 28, 2002 to
the Shareholders of the erstwhile Varinder Agro Chemicals Limited on
amalgamation with the Company vide Order dated January 3, 2002 of the
Hon’ble High Court for the States of Punjab and Hariyana at Chandigarh
without payment being received in cash; and
2,80,00,000 Equity shares issued for cash at a premium of Rs 11.30 per share during the year (Refer Note 15)
2,221.9 1,941.9
Abhishek Industries Limited94About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
SCHEDULES annexed to and forming part of Consolidated Financial Statements (Contd.)
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008SCHEDULE 5 - UNSECURED LOANS
Short term deposits from customers 32.1 27.8 32.1 27.8
SCHEDULE 4 - SECURED LOANSLoans from banksTerm loans 11,382.2 10,299.5 Cash credits/working capital loans 4,008.5 2,555.8 Vehicle loans 22.3 23.9 Other loans Term loans from financial institutions 124.0 195.1
15,537.0 13,074.3 Term loansTerm loans from banks and financial institutions are secured by way of equitable mortgage created or to be created on all the present and future immovable properties including all buildings, structures and all plant and machinery attached thereon of the Company and hypothecation of all the movable properties including movable machinery spares, tools and accessories, etc., present and future, subject to prior charges created and/or to be created in favour of the Company’s bankers on stocks of raw materials, semi finished and finished goods, consumable stores and other movables, as may be required for working capital requirements in the ordinary course of business. The mortgages and charges referred to above rank pari-passu or otherwise as mentioned above. (Amount due within one year Rs 2,399.1 million; Previous year Rs 1,440.5 million)Cash credits/working capital loansCash credit/working capital loans are secured by hypothecation of raw materials, semi finished and finished goods, stock-in-process, consumable stores, other asset and book debts, present and future, of the Company. The limits are further secured by way of second pari passu charge on the immovable properties of the Company. Vehicles loansVehicle loans are secured by hypothecation of vehicles acquired against such loans. (Amount due within one year Rs 7.2 million; Previous year Rs 7.4 million).
SCHEDULE 6 - FIXED ASSETS(Rs million)
GROSS BLOCK DEPRECIATION NET BLOCK
Particulars As at
March 31,2008
Additionsduring the
year
Sales/Adjust-
ment
As atMarch 31,
2009
As atMarch 31,
2008
For theyear
Sales/Adjust-
ment
UptoMarch 31,
2009
As atMarch 31,
2009
As atMarch 31,
2008Tangible Assets Land - Freehold 689.8 94.6 - 784.4 - - - - 784.4 689.8 - Leasehold 29.3 7.7 - 37.0 3.5 0.5 - 4.0 33.0 25.8 Buildings 1,971.5 * 589.4 - 2,560.9 281.3 64.9 - 346.2 2,214.7 1,690.2 Plant and machinery 10,362.2 # 7,037.7 45.5 17,354.4 4,694.6 1,044.0 43.2 5,695.4 11,659.0 5,667.6 Furniture and fixtures 174.3 49.6 0.2 223.7 79.9 12.1 - 92.0 131.7 94.4 Computer 111.9 13.0 0.2 124.7 42.8 15.9 0.2 58.5 66.2 69.1 Vehicles 82.9 11.8 5.4 89.3 28.4 7.7 1.9 34.2 55.1 54.5 Intangible Assets Software 103.3 7.2 - 110.5 70.9 14.3 - 85.2 25.3 32.4 Current year 13,525.2 7,811.0 51.3 21,284.9 5,201.4 1,159.4 45.3 6,315.5 14,969.4 Previous year 12,101.6 1,963.0 539.4 13,525.2 4,375.4 863.9 37.9 5,201.4 8,323.8
Notes:1. Additions to plant and machinery on account of exchange fluctuation in long term monetory items includes Rs 228.1 million (Previous year Rs
Nil), as a part of project and preoperative expense and Rs 78.1 million (Net of exchange gain of Rs 2.5 million for the year 2007-08) capitalised pursuant of notification issued by National Advisory Committee on Accounting Standard dated 31.03.2009 (Refer Note 17).
* Building includes Rs 16.0 million being expenses incurred by the Company towards construction of canal for sourcing of water, ownership ofwhich belongs to Government of Punjab (Department of Irrigation), amortised over a period of five years.
# Plant and machinery includes Rs 15.5 million being expenses incurred by the Company towards laying of feeder line, ownership of which belongs to Punjab State Electricity Board, amortised over a period of five years.
95Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULES annexed to and forming part of Consolidated Financial Statements (Contd.)
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
Non Trade
32,000 (Previous year 32,000) units of face value of Rs 1,000 each, Rs 350 per unit, paid up of Kotak India Venture Fund (Private Equity fund)
11.2 9.6
1,000 (Previous year 1,000) units of face value of Rs 1,00,000 each, Rs 3,000 per unit, paid up of Kotak India Growth fund (Private Equity fund)
3.0 3.0
50 Previous year 50) non convertible redeemable debentures of Citi Corp Finance, Series 195 of face value of Rs 10,00,000 each
50.0 50.0
64.2 62.6
Less: Dimunition in value of investment 28.8 -
35.4 62.6
SCHEDULE 7 - CAPITAL WORK IN PROGRESS
Building under construction 470.2 639.3
Machinery under erection 1,224.5 4,494.0
Capital advances 101.7 454.3
Project and pre-operative expenses pending allocation (Refer Note 10) 300.0 753.5
2,096.4 6,341.1
SCHEDULE 8 - INVESTMENTS (UNQUOTED, AT COST UNLESS OTHERWISE STATED)
Long Term (Trade) Associates
1,00,00,000 (Previous year 1,00,00,000) equity shares of Rs 10 each fully paid up of Lotus Integrated Texpark Limited (Includes capital reserve of Rs 29.2 million which diluted to Rs 18.3 million on further issue of share capital to third party)
100.0 100.0
Less : Group share of losses upto 31.03.2009 (0.2) (0.2)
99.8 99.8
Long Term Others
Trade
50,00,000 (Previous year 50,00,000) 7% Non cumulative redeemable preference shares of Rs 10 each fully paid up of Praneel Innovations Limited (Investment in a company under same management as per Section 370 (1B) of the Companies Act, 1956)
50.0 50.0
50,00,000 (Previous year 50,00,000) 7% non cumulative redeemable preference shares of Rs 10 each fully paid up of IOL Chemicals & Pharmaceuticals Limited
50.0 50.0
1,60,000 (Previous year 1,60,000) equity shares of Rs 10 each fully paid up of Nimbua Greenfield (Punjab) Limited
1.6 1.6
50,000 (Previous year 50,000) equity shares of Rs 10 each fully paid up of Trident Agritech Limited (formerly known as Madhuraj Agrotech Limited - Investment in a company under same management as per section 370 (1B) of the Companies Act, 1956)
0.5 0.5
102.1 102.1
Abhishek Industries Limited96About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
SCHEDULES annexed to and forming part of Consolidated Financial Statements (Contd.)
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
SCHEDULE 8 - INVESTMENTS (Unquoted, at cost unless otherwise stated) (Contd.)Current (Non Trade) (Unquoted, at cost or fair value, whichever is lower). Equity linked mutual funds
10,00,000 (Previous year 10,00,000) units of face value of Rs 10 each of Kotak Dynamic Asset Allocation
10.0 9.3
10,81,410 (Previous year 10,81,410) units of face value of Rs 10 each fully paid up of Kotak Global Emerging Market Fund
10.8 10.8
9,75,073 (Previous year 9,75,073) units of face value of Rs 10 each fully paid up of JM Small & Mid Cap Fund-Regular Dividend Plan
16.1 16.1
6,29,752 (Previous year 6,29,752) units of face value of Rs 10 each fully paid up of Fidelity Intl. Opportunities Fund - Growth
7.0 7.0
4,88,998 (Previous year 4,88,998) units of face value of Rs 10 each fully paid up of JM Contra Fund Dividend plan
5.0 5.0
5,83,470 (Previous year 5,83,470) units of face value of Rs10 each fully paid up of Principal Large Cap Fund
13.0 13.0
6,18,283 (Previous year 3,18,831) units of face value of Rs 10 each fully paid up of IDFC Premier Equity Fund -Growth** (2,99,452 units acquired during the year)
13.0 7.0 -
2,44,499 (Previous year 2,44,499) units of face value of Rs 10 each fully paid up of ICICI Prudential Indo Asia Equity Fund - Retail Growth
2.5 2.5
7,50,000 (Previous year 7,50,000) units of Rs 10 each fully paid up of SBI Infrastructure Fund - Growth
7.5 7.5
12,50,000 (Previous year 12,50,000) units of Rs 10 each fully paid up of SBI Infrastructure Fund - Dividend
12.5 12.5
37,217 (Previous year 37,217) units of face value of Rs 10 each fully paid up of DSP India Tiger Fund - Growth
2.0 2.0
20,00,000 (Previous year 20,00,000) units of Rs 10 each fully paid up of Sundaram BNP Paribas-Energy Opportunities Fund - Dividend
20.0 20.0
9,77,995 (Previous year 9,77,995) units of face value of Rs 10 each of Reliance Natural Resources Fund Dividend Payout
10.0 10.0
1,94,035 (Previous year 1,40,865) units of face value of Rs 10 each of Reliance Growth Fund - Dividend Plan ** (53,170 units acquired during the year)
13.0 10.0
1,50,127 ( Previous year 1,50,127) units of face value of Rs 10 each of Reliance Banking Fund
10.0 10.0
Repurchase price Rs 75.9 million (Previous year Rs 127.3 million) 152.4 142.7 Less: Diminution in value of investments 76.5 20.7
75.9 122.0 Debt based mutual funds
Nil (Previous year 1,09,771) units of face value of Rs 10 each of Reliance Liquid Plus - Institutional Option - Growth*
- 120.0
Nil (Previous year 29,79,663) units of face value of Rs 10 each of Grindlays Super Saver Income - ST Plan C Fortnightly Dividend*
- 30.0
Nil (Previous year 1,16,527) units of face value of Rs 10 each fully paid up of ICICI Prudential Liquid Plan Institutional Plus - Growth Option*
- 2.3
Nil (Previous year 2,53,896) units of face value of Rs 10 each fully paid up of IDFC Floating Rate Fund- Long Term Institutional Plan B*
- 3.2
Nil (Previous year 70,25,716) units of face value of Rs 10 each fully paid up of Magnum Insta Cash Liquid Floater-Growth*
- 98.2
3,46,35,779 (Previous year Nil) units of face value of Rs 10 each fully paid up of Magnum Insta Cash - Cash Option - Growth**
680.1 -
3,39,554 (Previous year Nil) units of face value of Rs 10 each fully paid up of Principal Income Fund - Dividend**
4.1 -
72,55,157 (Previous year Nil) units of face value of Rs 10 each fully paid up of Principal Floating Rate SMP - Growth**
100.0 -
Repurchase price Rs 784.5 million (Previous year Rs 253.8 million) 784.2 253.7
97Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULES annexed to and forming part of Consolidated Financial Statements (Contd.)
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
SCHEDULE 8 - INVESTMENTS (Unquoted, at cost unless otherwise stated) (Contd.)Investment under portfolio management services#Kotak Securities Limited
30,09,103 (Previous year Nil) units in Kotak Floater Long Term (G)** 41.3 - Nil (Previous year 2,38,649) units in K Liquid- Institutional Dividend Plan* - 2.4
Repurchase price Rs 41.8 million (Previous year Rs 2.4 million) 41.3 2.4 Equity Shares- Quoted
Nil (Previous year 39,152) equity shares of face value of Re. 1 each fully paid up of Zee Entertainment Enterprises Limited*
- 9.4
Nil (Previous year 2,032) equity shares of face value of Rs 2 each fully paid up of Larsen & Toubro Limited*
- 6.2
30,455 (Previous year 18,449) equity shares of face value of Rs 10 each fully paid up of ICICI Bank Limited** (18,449 equity shares sold and 30,455 equity shares acquired during the year)
8.3 17.6
Nil (Previous year 37,697) equity shares of face value of Rs 10 each fully paid up of GTL Limited*
- 7.0
Nil (Previous year 12,133) equity shares of face value Rs 10 each fully paid up of Bharat Petroleum Corporation Limited*
- 4.9
Nil (Previous year 19,697) equity shares of face value of Rs 10 each fully paid up of Hindustan Petroleum Corporation Limited*
- 5.8
Nil (Previous year 75,988) equity shares of face value of Rs 10 each fully paid up of Mysore Cements Limited*
- 3.5
1,82,246 (Previous year 94,530) equity shares of face value of Re. 1 each fully paid up of Sun Pharma Advanced Research Company Limited** (87,716 equity shares acquired during the year)
11.9 7.2
Nil (Previous year 25,964) equity shares of face value of Rs 10 each fully paid up of ING Vysya Bank Limited*
- 8.0
Nil (Previous year 26,997) equity shares of face value of Rs 10 each fully paid up of Shree Precoated Steels Limited*
- 10.2
Nil (Previous year 17,949) equity shares of face value of Rs 10 each fully paid up of Tata Tea Limited*
- 14.4
Nil (Previous year 34,248) equity shares of face value of Rs 10 each fully paid up of Tata Communications Limited*
- 16.1
1,10,390 (Previous year 62,844) equity shares of face value of Rs 10 each fully paid up of IRB Infrastructure Developers Limited** (47,546 equity shares acquired during the year)
15.8 12.4
35,353 (Previous year Nil) equity shares of face value of Rs 10 each fully paid up of Cairn India Limited**
5.6 -
4,03,487 (Previous year Nil) equity shares of face value of Rs 10 each fully paid up of Gujarat State Petronet Limited**
11.7 -
Market value Rs 50.5 million (Previous year Rs 115.7 million) 53.3 122.7 Less: Provision for dimunition in value 9.2 12.1
44.1 110.6 Total 1,182.8 753.2 * Sold during the year** Acquired during the year.# Investments have been made under the Discretionay Portfolio Management Agreement entered into between the Company and Kotak Securities Limited (Portfolio Managers) and are being held in the name of the Porfolio Manager as envisaged in the aforesaid Agreement Repurchase price of current unquoted investments 902.2 383.5 Aggregate book value of unquoted investments 1,138.7 642.6
Aggregate book value of current quoted investments 44.1 110.6 Market value of current quoted investments 50.5 115.7
Abhishek Industries Limited98About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
SCHEDULE 9 - CURRENT ASSETS, LOANS AND ADVANCES
A Current assets
Inventories
Stock in trade *
- Raw Materials 1,025.8 1,353.3
- Finished Goods 507.3 510.5
- Work in Process 357.2 304.2
Stores and Spares ** 219.7 84.0
2,110.0 2,252.0
* At cost or net realizable value, whichever is lower
** At cost or under
Sundry debtors (Unsecured)
Debts outstanding for a period exceeding six months
- Considered good 120.6 81.4
- Considered doubtful 2.1 2.0
122.7 83.4
Less: Provision for doubtful debts 2.1 120.6 2.0 81.4
Others debts considered good 481.5 305.2
602.1 386.6
Cash and bank balances
Cash in hand 20.4 16.0
Balances with scheduled banks in :
- Current accounts 46.6 34.0
- Deposits accounts (including Rs 55.2 million held as margin with banks; Previous year Rs 101.0 million)
137.0 351.9
204.0 401.9
B. Loans and advances (Unsecured, considered good, unless otherwise stated)
Advances recoverable in cash or in kind or for value to be received (Note 12)
- Considered good 954.2 861.2
- Considered doubtful 16.7 -
970.9 861.2
Less: Provision for doubtful advances (16.7) 954.2 - 861.2
With customs, excise and port trust authorities 560.1 540.7
Security deposits 177.4 64.7
MAT credit entitlement 76.5 76.5
Share application money to others 31.5 -
1,799.7 1,543.1
4,715.8 4,583.6
99Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
(Rs million)
ParticularsAs at
March 31, 2009As at
March 31, 2008
SCHEDULE 10 - CURRENT LIABILITIES AND PROVISIONS
A Current labilities
Acceptances 500.7 488.5
Sundry creditors (Refer Note 7) 1,922.8 1,145.0
Trade deposits and advances 49.2 23.8
Interest accrued but not due on loans 3.1 3.8
Unclaimed dividend* 4.4 4.4
Other liabilities 45.8 43.9
2,526.0 1,709.4
* Will be credited to Investor Education and Protection Fund on the expiry of 7 years from the due date.
B. Provisions
Taxation :
- Current tax ( net of advance tax of Rs 431.7 million) 45.2 49.9
- Fringe benefit tax ( net of advance tax of Rs 29.8 million) 1.5 1.5
Earned leaves * (Refer Note 5) 43.8 40.0
Gratuity payable (Refer Note 5) 2.0 14.6
92.5 106.0
2,618.5 1,815.4
* Includes provision for short term compensated absences Rs 12.0 million (Previous year Rs 10.7 million).
SCHEDULE 11 - MISCELLANEOUS EXPENDITURE (TO THE EXTENT NOT WRITTEN OFF OR ADJUSTED)
Preliminary expenses 0.1 0.1
0.1 0.1
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(Rs million)
ParticularsFor the year ended
March 31, 2009For the year ended
March 31, 2008SCHEDULE 12 - OTHER INCOME
Insurance claims 5.9 23.0 Profit on sale of fixed assets 3.6 41.1 Loss on sale of fixed assets (2.4) 1.2 (8.3) 32.8 Profit on sale of current investments (non-trade) - 59.6 Less: Provision for dimunition in value of investments - (32.8)Less: Loss on sale of current investments (non-trade) - - (2.3) 24.5 Dividend from non-trade unquoted current investments 3.2 6.9 Interest received on fixed deposits and from customers (Tax deducted 35.9 38.0 Rs 4.2 million (Previous year Rs 5.7 million)Exchange gain 0.2 0.3 Miscellaneous receipts 28.1 13.5 Provisions no longer required written back 7.6 10.8
82.1 149.8 SCHEDULE 13 - MANUFACTURING EXPENSES
Purchase for resale 4.5 6.3 Stores and spares consumed 330.9 265.7 Power and fuel 1,032.9 953.3 Repair to plant and machinery 27.4 21.7 Packing material and charges 431.3 329.2 Job charges 10.5 1.8
1,837.5 1,578.0 SCHEDULE 14 - PERSONNEL EXPENSES
Salaries, wages, bonus and allowances 1,179.3 1,120.1 Contribution to provident and other funds 89.0 77.0 Workmen and staff welfare 17.7 33.2
1,286.0 1,230.3 SCHEDULE 15 - ADMINISTRATIVE AND OTHER EXPENSES
Rent 12.6 17.3 Rates and taxes 8.5 15.6 Insurance 40.0 41.9 Directors' sitting fees 1.2 1.2 Travelling and conveyance 41.8 45.2 Postage and telephone 20.2 17.6 Legal and professional 72.5 94.1 Buildings repairs 1.2 2.6 General repairs 13.6 19.8 Doubtful debts and advances written off 0.1 1.4 Provision for doubtful debts/advances 17.3 - Software maintenance expenses 16.4 17.4 Electricity and water charges 2.3 7.4 Provision for dimunition in value of investments 81.7 - Loss on sale of current investments (non-trade) 31.1 - Less : Profit on sale of current investments (non-trade) (8.9) 103.9 - -
Miscellaneous (Includes exchange loss of Rs 57.9 million; Previous year Rs 6.4 million)
88.0 35.7
Loss from Associate - 0.2
439.6 317.4
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
101Directors’ Report Corporate
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Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
(Rs million)
ParticularsFor the year ended
March 31, 2009For the year ended
March 31, 2008SCHEDULE 16 - SELLING EXPENSES
Commission 157.6 130.8
Freight, clearing and octroi charges 450.8 419.4
Rebates and discount 13.5 38.3
Advertisement 5.0 11.4
Business promotion 30.3 33.4
Others 59.5 41.9
716.7 675.2
SCHEDULE 17 - (INCREASE)/DECREASE IN WORK IN PROCESS AND FINISHED GOODS
Opening Stock
Work-in-process 304.2 369.6
Finished goods 510.5 814.7 437.8 807.4
Add: Stock on commissioning of new paper plant on 01.12.2008
Work-in-process 60.6 -
Finished goods 39.1 99.7 - -
Less : Closing Stock #
Work-in-process 339.3 304.2
Finished goods 493.2 832.5 510.5 814.7
(Increase)/decrease 81.9 (7.3)
# Excludes production of work in process of Rs 17.9 million (Previous yearRs. Nil) and finished goods of Rs 14.1 million (Previous year Rs. Nil) under trial run for which expense are included in project and pre-operative expense.
::
SCHEDULE 18 - FINANCIAL EXPENSES
Interest
- On loans for fixed period 479.8 272.2
- Others 305.4 175.7
Bank and other charges 48.0 25.3
833.2 473.2
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
SCHEDULE 19 - NOTES TO THE ACCOUNTS1. Significant Accounting Policies
A Accounting convention
The accounts are prepared on accrual basis under the Historical Cost Convention in accordance with the Accounting Standards referred
to in sub section (3C) of Section 211 of the Companies Act, 1956 and other relevant presentational requirements of the Companies Act,
1956.
B Basis of consolidation
The consolidated financial statements present the consolidated accounts of Abhishek Industries Limited with its following subsidiaries.
Name of Subsidiary Country of Incorporation Proportion of ownership interest as at
March 31, 2009 March 31, 2008
Abhishek Industries Inc USA 100% 100%
Abhishek Europe SA Switzerland 99.8% 99.8%
Abhishek Global Ventures Limited India 100% 100%
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SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
SCHEDULE 19 - NOTES TO THE ACCOUNTS (Contd.)
Name of Associate Country of Incorporation Proportion of ownership interest as at
March 31, 2009 March 31, 2008
Lotus Integrated Texpark Limited India 47.5% 47.5%
In preparing consolidated financial statements, the financial statements of parent and subsidiaries are combined on a line by line basis by
adding together the book value of assets, liabilities, income and expenses. The intra-group balances and transactions and unrealised profit
and losses are fully eliminated.
Investments in associate have been accounted as per equity method whereby the investment is initially recorded at cost. Identifying any
goodwill/capital reserve arising at the time of acquisition. The carrying amount of investment is adjusted thereafter for post acquisition
change in investor’s share of net assets of investee.
C Revenue recognition
The revenue in respect of sales is recognized as and when the risk and reward in the goods is transferred to the buyer.
The revenue in respect of DEPB benefit is recognized on post export basis at the rate at which the entitlement accrues and is included
in the turnover.
Insurance claims are recognized when there exists no significant uncertainty with regard to the amounts to be realized and the ultimate
collection thereof.
D Borrowing costs
Borrowing costs that are attributable to acquisition or construction of a qualifying asset are capitalized as part of cost of such assets
Qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are
recognized as expenses in the period in which they are incurred.
E Government grants / subsidy
Government grant / subsidy related to revenue is deducted from the related expenses.
F Accounting for taxes on income
Provision for taxation for the year is ascertained on the basis of assessable profits computed in accordance with the provisions of the
Income-tax Act, 1961.
Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income
and accounting income that originates in one period and are capable of reversal in one or more subsequent periods. In respect of carry
forward of losses and unabsorbed depreciation, deferred tax assets are recognized based on virtual certainty that sufficient future taxable
income will be available against which such deferred tax asset can be realized.
G Employee benefits
The Company has various schemes of retirement benefits such as provident fund, gratuity and leave encashment, which is dealt with as
under:
(a) Contributions to provident fund are made in accordance with the provisions of Employee’s Provident Fund and Miscellaneous Provisions
Act, 1952 and are charged to revenue every year.
(b) The gratuity liability in respect of employees of the Company is covered through a policy taken by a trust from Life Insurance Corporation
of India. The Contributions towards the premium of the policy paid to the trust are charged to revenue every year. (Refer Note 5 also).
(c) Provision for leave encashment (including long term compensated absences) is made based on actuarial valuation.
Liability attributing to the long-term period of service, comprising mainly of bonus etc., is recognized on a straight-line basis to the period of
service to which it relates.
Liability on account of short term employee benefits, comprising mainly compensated absences and performance incentives, is
recognized on an undiscounted accrual basis during the period when the employee renders services/ vesting period of the benefit.
103Directors’ Report Corporate
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Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
SCHEDULE 19 - NOTES TO THE ACCOUNTS (Contd.)
H Fixed assets
Fixed assets are stated at cost (net of CENVAT) less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and
other incidental expenses and interest on loan taken for the acquisition of qualifying assets up to the date of commissioning of assets.
In line with Notification No. G.S.R. 225(E) dated March 31, 2009 issued by The Ministry of Corporate Affairs, Government of India, the
exchange differences arising after April 1, 2007 on reporting of long term foreign currency monetary items at rates different from those at
which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition
of a depreciable capital asset, have been added to or deducted from the cost of the asset and shall be depreciated over the balance useful
life of the asset. (Refer Note 17)
I Depreciation/amortisation
(i) Depreciation on fixed assets [other than those referred to in (ii) to (v) below] is provided on straight line method in accordance with
Schedule XIV to the Companies Act, 1956, except in case of one of the Co-generation and Recovery Plants, in respect of which higher
depreciation is provided on the basis of technological evaluation of a Chartered Engineer and Management’s estimate of useful life of
these plants
(ii) Assets costing Rs 5,000 or less are fully depreciated in the year of purchase.
(iii) The depreciable amount of intangible asset is systematically allocated over its useful life. The software acquired for internal use is
amortized over a period of five years.
(iv) The leasehold land is amortized over the lease period.
(v) Capital Expenditure in respect of assets not owned by the Company are amortized over the period of five years.
J Investments
Long-term investments are carried at cost less provision, if any, for diminution in value which is other than temporary. Current investments
are carried at lower of cost and fair value.
K Inventories
Raw materials, finished goods and work in process are valued at cost or net realizable value, whichever is lower. Stores and spares are valued
at cost or under. The cost formulas adopted in respect of inventories are as under:
Stores and spares: weighted average cost
Raw materials: weighted average cost
Finished goods: cost of raw materials plus conversion cost, packing cost and excise duty.
Work in process: cost of raw materials plus conversion cost depending upon the stage of completion.
L Foreign currency transactions
(i) Foreign currency transactions are recorded at the exchange rate prevailing as at the date of transactions except export sales which are
recorded at a rate notified by the customs for invoice purposes. Such rate is notified in the last week of the month and is adopted for
recording export sales of the next month. The exchange fluctuation arising on billing through banker is accounted for as difference in
exchange rates. The amount of such differences in exchange rate is included under turnover.
(ii) Monetary items denominated in a foreign currency are reported at the closing rate as at the date of balance sheet. Non-monetary items,
which are carried at fair value denominated in a foreign currency, are reported at the exchange rate that existed when such values were
determined, otherwise on historical exchange rate that existed on the date of transaction.
(iii) The exchange difference arising on the settlement of monetary items or on reporting these items at rate different from the rates at
which these were initially recorded/reported in previous financial statements are recognized as income/expense in the period in which
they arise except that such exchange differences which relate to fixed assets acquired up to March 31,2004 and after April 1, 2007 are
capitalized in the carrying amount of these assets and those exchange difference which relate to fixed assets acquired from outside
India during April 1, 2004 to March 31, 2007 have been capitalized till March 31, 2007. Further, where foreign currency liabilities have
been incurred in connection with fixed assets where the exchange difference during the construction period are adjusted in the cost of
the concerned assets.
(iv) In case of forward exchange contracts, the premium or discount arising at the inception of such contracts, is amortized as income or
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expense over the life of the contract. Further exchange difference on such contracts i.e. difference between the exchange rate at the
reporting/settlement date and the exchange rate on the date of inception of contract/the last reporting date, is recognized as income/
expense for the period except that such exchange difference which relate to fixed assets acquired up to March 31, 2004 and after April
1, 2007 are capitalized in the carrying amount of these assets and those exchange differences which relate to fixed assets acquired
from outside India during April 1,2004 to March 31,2007 have been capitalized till March 31, 2007. Further where such contracts have
been entered in connection with fixed assets, the exchange differences arising during construction period are adjusted in the cost of
concerned assets.
(v) For the purpose of financial statements, the operations of subsidiary companies are treated as integral part to the operations of the
company. All revenue transactions of foreign subsidiaries are recorded, on initial recognition at exchange rate which is average yearly
rate since it is not practicable to determine the prevailing rate as at date of transaction. Such revenue transactions are insignificant
to the total revenue transactions of the group. Monetary items thereof reported at the closing rate as on the date of balance sheet.
Non-monetary items which are carried in terms of historical costs are reported using the exchange rate at the date of transaction. Non-
monetary items which are carried at fair value are reported using the exchange rate that existed when the values were determined.
(vi) The exchange differences arising on reporting of long term foreign currency monetary item related to other than acquisition of a
depreciable asset are accumulated in the “ Foreign Currency Monetary Item Translation Difference Account” and amortized over the life
of the monetary item but not beyond March 31, 2011.
M Impairment of assets
At each balance sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication
exists, an impairment loss, i.e., the amount by which the carrying amount of asset exceeds its recoverable amount is provided in the books
of account.
N Employee share-based payments
Intrinsic Value Method is used to account for share based payments to employees.
SCHEDULE 19 - NOTES TO THE ACCOUNTS (Contd.)
2 Contingent liabilities not provided for:
(Rs million)
ParticularsAs at
March 31, 2009
As at
March 31, 2008
Claims* (excluding claims by employees where amounts are not ascertainable) not
acknowledged as debt:- Sales tax 0.3 0.3- Service tax 0.7 -- Excise duty 3.7 5.0- Income tax 16.3 5.3- Others 7.7 2.4
* All the above matters are subject to legal proceedings in the ordinary course of business. The legal proceedings when ultimately concluded
will not, in the opinion of the management, have a material effect on the results of operations or financial position of the Company.
- Bills discounted 801.2 630.8- Estimated amount of contracts remaining to be executed on capital account (Net of
advances)
458.5 1,286.7
- Guarantees given to bank on behalf of others - 300.0- Amount payable under agreement 26.2 92.9
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
105Directors’ Report Corporate
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Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
SCHEDULE 19 - NOTES TO THE ACCOUNTS (Contd.)
3. Auditors’ remuneration:
(Rs million)
ParticularsCurrent year
(12 months)
Previous year
(12 months)
As auditors (audit fee) # 3.1 2.5
In other capacities
- Others 1.7 1.7
Reimbursement of expenses 0.2 0.1
# includes remuneration of the auditors of the Company and its subsidiaries.
4. Managerial remuneration paid/payable to Managing Director and Whole Time Director
(Rs million)
ParticularsCurrent year
(12 months)
Previous year
(12 months)
Salary 9.9 9.6
Contribution to provident and other funds 1.7 1.6
Allowances 13.2 12.7
Insurance premium 0.1 0.1
Commission - 4.6
Total 24.9 28.6
(Rs million)
ParticularsCurrent year
(12 months)
Previous year
(12 months)
Company’s contribution to provident fund 71.1 55.7
Company’s contribution to employees’ state insurance scheme 20.2 16.0
Administrative charges on above 6.9 5.3
The remuneration of Mr. Rajinder Gupta, Managing Director had been approved by the Shareholders in its EGM held on March 18, 2006 . An
amount of Rs 24.0 million has been provided in the books of account in respect of the salary to the Managing Director, out of which Rs 4.8
million has been paid and Rs19.2 million has been withheld due to inadequacy of profits as computed under Section 349 of the Companies
Act, 1956, for which Management is confident of obtaining Central Government approval.
Provisions for incremental gratuity liability and leave encashment have not been considered, since the provision is based on actuarial basis for
the Company as a whole.
5. Employee Benefits
(a) Defined contribution plans
The Company makes contribution towards employees’ provident fund and employees’ state insurance plan scheme. Under the schemes,
the Company is required to contribute a specified percentage of payroll cost, as specified in the rules of the schemes, to these defined
contribution schemes. The Company recognized Rs 98.2 million (Previous year Rs 77.0 million) during the year as expense towards
contribution to these plans. Out of Rs 98.2 million, Rs 9.2 million is included under Fixed assets/ Capital work in progress.
(b) Defined benefit plans
Gratuity scheme
The Company has entered into an agreement with Smt. Maya Devi Trust for the discharge of the gratuity liability to the employees of
the Company, who have acquired membership of the said Trust. The said Trust has taken a policy under Group Gratuity Scheme of the
Life Insurance Corporation and the Company is contributing to the Trust towards the payment of premium for such policy. The accrued
liability of the Company in respect of Gratuity payable to employees is covered in the manner aforesaid.
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SCHEDULE 19 - NOTES TO THE ACCOUNTS (Contd.)
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
Earned Leaves
Long term leaves includes earned leaves and sick leaves. These have been provided on accrual basis, based on year end actuarial
valuation.
As at
March 31, 2009
As at
March 31, 2008
Gratuity
Scheme
Earned leave
and sick leave
Gratuity
Scheme
Earned leave
and sick leave
A Expenses recognized in the statement of Profit and
Loss Account for the year ended March 31, 2009
Current service cost 19.4 7.6 17.8 7.2
Interest cost 4.7 2.5 2.4 1.3
Expected return on plan assets (4.9) - (3.4) -
Actuarial (gains)/ losses (2.9) (4.0) 18.5 5.1
Total expenses 16.3 6.1 35.3 13.6
B Net liabilities recognized in the balance sheet as at
March 31, 2009
Present value of defined benefit obligation as at March
31, 2009
78.0 31.8 62.3 29.3
Fair value of plan assets with LIC* (65.1) - (47.7) -
Funds with Employee Trust* (10.9) - - -
Net liability as at March 31, 2009 (unfunded) 2.0 31.8 14.6 29.3
C Change in the obligation during the year ended
March 31, 2009
Present value of defined benefit obligation at the
beginning of the year
62.3 29.3 31.7 18.7
Current service cost 19.4 7.6 17.8 7.2
Interest cost 4.7 2.5 2.4 1.3
Actuarial (gains)/losses (2.9) (4.0) 18.5 5.1
Benefits payments (5.5) (3.6) (8.1) (3.0)
Present value of defined benefit obligation at the
end of the year
78.0 31.8 62.3 29.3
D Change in assets during the year ended March 31, 2009
Plan Assets at the beginning of the year 47.7 - 27.6 -
Expected return on plan assets 4.9 - 3.4 -
Contribution by the Company 18.0 - 24.8 -
Actual benefits paid (5.5) - (8.1) -
Plan Assets at the end of the year 65.1 - 47.7 -
E Main actuarial assumptions
Discount rate 7.5% 7.5% 7.5% 7.5%
Rate of increase in compensation levels 7% 7% 7% 7%
Rate of return on plan assets 9.25% - 9.25% -
Mortality rate LIC(1994-96)
Ultimate
LIC(1994-96)
Ultimate
LIC(1994-96)
Ultimate
LIC(1994-96)
Ultimate
* The plan assets are maintained with Life Insurance Corporation of India/Trust. The details of the investment maintained by Life
Insurance Corporation of India/Trust are not available with the Company and have not been disclosed.
107Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
6. Deferred taxation:
(Rs million)
ParticularsCurrent year
(12 months)
Previous year
(12 months)
Deferred tax liability (DTL) on account of accelerated depreciation 1,093.9 715.5
Less : Deferred tax asset (DTA) arising on
- expenses deductible on payment. (279.7) (70.9)
- unabsorbed depreciation (to the extent DTL) (485.2) -
Net deferred tax liability 329.0 644.6#
8. The earnings per share (EPS) disclosed in the profit and loss account have been calculated as under:
(Rs million)
ParticularsCurrent year
(12 months)
Previous year
(12 months)
Profit/Loss attributable to equity shareholders (Rs million) (A) (533.2) 388.1
Weighted average number of equity shares (Nos) (B) 20,09,45,360 19,41,94,675
Potential dilutive equity shares on Employee Stock Options outstanding (Nos) (C) - 14,17,927
Potential dilutive equity shares on Share Warrants(Nos) (D) - 17,50,000
Weighted average number of equity shares in computing diluted earning per share
(E) = (B+C+D)
20,09,45,360 19,73,62,602
Basic Earnings per share (Rs per share) (face value of Rs 10 each) (A)/(B) (2.65) 2.00
Diluted Earnings per share (Rs per share) (face value of Rs 10 each) (A)/(E) (2.65) 1.97
9. Borrowing cost capitalized (including capital work in progress) during the year amounts to Rs 436.7 million (Previous year Rs 342.4
million).
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
SCHEDULE 19 - NOTES TO THE ACCOUNTS (Contd.)
The Company follows Accounting Standard (AS-22) “ Accounting for taxes on Income”, and in consideration of prudence and also considering
the favorable trend in the textile and paper business of the Company and potential orders for exports, the management is confident that
even after losses in the current year, the Company would be in a position to make adequate taxable profits in the foreseeable future.
Accordingly based on future projections, the management is of the view that sufficient future taxable income would be available to set off
unabsorbed depreciation and accordingly deferred tax assets of Rs 485.2 million would be realized.
# Net of deferred tax asset of Rs 4.9 million on adjustment on account of employee benefit, pursuant to adoption of Accounting Standard
(AS) 15 “Employee Benefits”.
7. Sundry Creditors includes Rs 5.6 million (Previous year Rs 0.1 million) being principal amount due to suppliers covered under “The Micro,
Small and Medium Enterprises Development Act, 2006” (MSMED Act) to the extent such parties have been identified from the available
information.
Abhishek Industries Limited108About Abhishek Inspired by ChallengeManaging Director’s
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SCHEDULE 19 - NOTES TO THE ACCOUNTS (Contd.)
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
10. Project and pre operative expenses pending allocation includes:(Rs million)
Particulars As at As at
March 31 , 2009 March 31 , 2008
Opening Balance 753.5 239.1
Add: Expenses incurred during the year:
- Project & pre-operatives expenses
Loss on foreign exchange fluctuation 285.1 -
Interest expenses 167.3 342.4
Salary, wages and bonus etc. 74.4 102.2
Legal and professional 61.4 86.2
Electricity and water charges 7.4 11.2
Travelling and conveyance 6.6 4.5
Others 7.1 18.7
Bank charges 4.9 10.6
Stores and spares consumed 2.0 -
616.2 575.8
- Expenses incurred during Trial Run period
Raw material consumed 737.0 -
Steam consumed 377.8 -
Interest expenses 269.4 -
Electricity and water charges 246.6 -
Salary, wages and bonus etc. 154.8 -
Store & spares consumed 63.6 -
Rebates & discount 43.8 -
Freight,clearing and octroi charges 29.7 -
Other selling expenses 21.7 -
Commission 17.2 -
Legal and professional 5.0 -
Repair and maintenance 3.0 -
Travelling and conveyance 1.8 -
Others 16.0 -
(Increase) /decrease in work in progress and (131.7) -
finished goods
Increase /(decrease) in Excise duty 4.5 -
1,860.2 -
Less : Income earned during trial run period
Sales 1,377.8 -
Other incomes 0.3 -
1,378.1 482.1 - -
Grand Total 1,851.8 814.9
Less: Allocated to fixed assets and capital work in progress 1,551.8 61.4
Closing Balance 300.0 753.5
109Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
SCHEDULE 19 - NOTES TO THE ACCOUNTS (Contd.)
11. The related party disclosures as per Accounting Standard- 18 are as under: I) Enterprises where control exists a) Enterprise that controls the Company
- Madhuraj Foundation (directly or indirectly holds majority voting power)
II) Other related parties where transactions have taken place during the year:
a) Enterprises under the common control as the Company
- Trident Agritech Limited (Formerly known as Madhuraj Agrotech Limited)
- Madhuraj Foundation Limited
- Praneel Innovations Limited
- Rainbow Retail Limited (Formerly known as Abhishek Retail Limited)
b) Enterprise on which Company exercises significant influence
- Lotus Integrated Texpark Limited
c) Key management personnel
- Mr. Rajinder Gupta
- Mr. Raman Kumar
d ) Relative of key management personnel
- Mr. Abhishek Gupta
Disclosure of transactions between the Company and related parties during the year and outstanding balances as on March 31, 2009.(Rs million)
Particulars
Enterprise that controls the
Company
Enterprises that are under common
control as the Company
Significant Influence
Key management personnel
Relative of key management
personnel
Current year
Previous year
Current year
Previous year
Current year
Previous year
Current year
Previous year
Current year
Previous year
Purchase of Goods/Services- Praneel Innovations Limited 22.8 28.8 - Madhuraj Foundation Limited. 0.3 - - Madhuraj Foundation 0.1 -- Lotus Integrated Texpark Limited. 2.3 - Sale of Goods/Services - Rainbow Retail Limited 1.2 - Rent received - Praneel Innovations Limited - 0.6 - Mr. Rajinder Gupta 0.6 0.6 - Lotus Integrated Texpark Limited 0.2 0.2 Rent paid 0.5 7.2 Security Deposit made - Madhuraj Foundation 62.5 3.6 Security Deposit received - Praneel Innovations Limited 0.2 - Remuneration paid/payable - Mr Rajinder Gupta (Also refer note 4) 24.0 28.6 - Mr. Raman Kumar 0.9 - - Mr. Abhishek Gupta 0.7 -Sale of assets: - Madhuraj Foundation. - 70.0 - Lotus Integrated Texpark Limited - 210.0 Investments made: - Lotus Integrated Texpark Limited - 100.0 Expenses incurred on behalf of: - Rainbow Retail Limited 16.2 - - Praneel Innovations Limited 0.3 - Loan and advances taken- Trident Agritech Limited 190.6 -- Asian Trading Corporation Limited. - 246.2Loans and advances given: - Madhuraj Foundation 2.7 3.6 - Trident Agritech Limited - 130.9 - Praneel Innovations Limited 14.1 36.9
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SCHEDULE 19 - NOTES TO THE ACCOUNTS (Contd.)
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
Guarantees given on behalf of - Asian Trading Corporation Limited. - 300.0 Balances as at March 31, 2009: Share application money paid- Lotus Integrated Texpark Limited 1.0 -- Rainbow Retail Limited 30.0 - Guarantee outstanding - Asian Trading Corporation Limited. - 300.0 Amounts receivable - Trident Agritech Limited - 143.8 - Lotus Integrated Texpark Limited - 5.0 - Madhuraj Foundation 0.5 2.7 - Praneel Innovations Limited 30.0 30.0 - Rainbow Retail Limited (net of provision of Rs 10.0 million)
7.4 -
Amounts payable - Praneel Innovations Limited - 3.7 - Lotus Integrated Texpark Limited 0.8 - - Trident Agritech Limited 36.8 -- Mr. Rajinder Gupta 25.4 6.1 - Mr. Raman Kumar 0.1 - - Mr. Abhishek Gupta 0.1 -- Asian Trading Corporation Limited - 246.2
12. Loans and advances include amount given to Companies under the same management referred to in Section 370 (1B) of The Companies Act, 1956 of Rs Nil (Previous year Rs 143.8 million), Rs 30.0 million (Previous year Rs 30.0 million) and Rs Nil (Previous year Rs Nil), recoverable from Trident Agritech Limited (formerly known as Madhuraj Agrotech Limited), Praneel Innovations Limited and Madhuraj Foundation Limited respectively {maximum amount outstanding during the year Rs 152.5 million (Previous year Rs 112.4 million), Rs 45.3 million (Previous year Rs 30.0 million) and Rs 0.2 millions (Previous year Rs Nil) respectively}.
13. Segment information: I Segment Accounting Policies
a. The business segments comprise of the following: • Yarn : Yarn manufacturing • Towel : Towel, Dyed Yarn manufacturing • Paper and Chemical : Paper and Sulphuric Acid
b. Business segments have been identified based on the nature and class of products and services, their customers and assessment of differential risks and returns and financial reporting system within the Company
c. The geographical segments considered for disclosure are based on markets, broadly as under: • Sale in the USA • Sale in rest of the world
d. Segment accounting policies: In addition to the significant accounting policies, applicable to the business as set out in Note 1 of Schedule 19 “ Notes to the Accounts”; the accounting policies in relation to segment accounting are as under:
i. Segment assets and liabilities: Segment assets include all operating assets used by a segment and consist principally of cash, debtors, inventories and fixed assets
including capital work in progress, net of allowances and provisions, which are reported as direct offset in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities.
ii. Segment revenue and expenses: Joint revenue and expenses of segments are allocated amongst them on reasonable basis. All other segment revenue and
expenses are directly attributable to the segments. iii. Inter segment sales: Inter segment sales are accounted for at cost and are eliminated in consolidation.
Disclosure of transactions between the Company and related parties during the year and outstanding balances as on March 31, 2009 (Contd.)(Rs million)
Particulars
Enterprise that controls the
Company
Enterprises that are under common
control as the Company
Significant Influence
Key management personnel
Relative of key management
personnel
Current year
Previous year
Current year
Previous year
Current year
Previous year
Current year
Previous year
Current year
Previous year
111Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
SCHEDULE 19 - NOTES TO THE ACCOUNTS (Contd.)II Details of primary business segments: -
(Rs million)
Particulars Yarn Towel Paper &Chemical Unallocable Eliminations Consolidated
TotalCurrent
yearPrevious
yearCurrent
yearPrevious
yearCurrent
yearPrevious
yearCurrent
yearPrevious
yearCurrent
yearPrevious
yearCurrent
yearPrevious
year
1 Segment Revenue - External sales 3,397.0 2,948.3 7,560.5 5,814.1 3,023.1 1,724.3 13,980.6 10,486.7 - Inter-segment sales 1,211.3 1,363.0 1.3 8.0 13.7 9.1 (1,226.3) (1,380.1) - -- Other Income 0.2 71.0 27.5 269.2 10.1 25.5 4.1 - (4.4) (0.1) 37.5 365.6 Total Revenue 4,608.5 4,382.3 7,589.3 6,091.3 3,046.9 1,758.9 4.1 - (1,230.7) (1,380.2) 14,018.1 10,852.3
2 Segment Results 58.4 334.6 (94.2) 578.4 326.3 222.0 290.5 1,135.0
Unallocated corporate expenses (net of unallocated income) (288.0) (192.1)
Profit before interest and tax 2.5 942.9 Interest expense (833.2) (473.2)Provision for taxation 297.5 (81.6)
3 Profit/(Loss) after tax (533.2) 388.1 4 Other Information
a) Segment assets 6,748.5 5,287.2 5,800.6 5,861.8 8,886.6 8,013.9 (852.6) (1,079.1) 20,583.1 18,083.8 Unallocated corporate assets 2,381.3 1,939.9 2,381.3 1,939.9 Total assets 6,748.5 5,287.2 5,800.6 5,861.8 8,886.6 8,013.9 2,381.3 1,939.9 (852.6) (1079.1) 22,964.4 20,023.7
b) Segment liabilities 640.8 164.6 786.9 664.1 1,635.3 1,941.2 (905.8) (1,025.7) 2,157.2 1,744.2 Unallocated corporate liabilities 20,807.2 18,279.5 20,807.2 18,279.5 Total liabilities 640.8 164.6 786.9 664.1 1,635.3 1,941.2 20,807.2 1,8279.5 (905.8) (1,025.7) 22,964.4 20,023.7 Capital Expenditure 1,775.1 389.1 371.6 792.9 1,354.2 3,283.8 14.1 287.7 3,515.0 4,753.5 Depreciation 275.8 307.7 520.6 466.0 337.0 58.8 26.0 31.4 1,159.4 863.9 Non-cash expenses other than depreciation 2..4 0.2 14.0 1.1 1.1 - 81.7 32.8 99.2 34.1
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
Abhishek Industries Limited112About Abhishek Inspired by ChallengeManaging Director’s
MessageBusiness OverviewFinancial Highlights Directors’ Profi le
SCHEDULE 19 - NOTES TO THE ACCOUNTS (Contd.)
III Secondary segment – Geographical:-
(Rs million)
Particulars Current year Previous year
Sale in USA 5,150.7 4,126.8
India and other countries 8,829.9 6,359.9
Total Sales 13,980.6 10,486.7
Segment Assets in:
USA 8.2 38.2
India and other countries 21,427.5 19,124.7
Capital expenditure:
USA - -
India and other countries 3,515.0 4,753.5
14. The Company hedges its foreign currency fluctuation exposure by way of foreign currency derivative options. The Company has taken various USD/INR options from various banks and as at March 31, 2009, there are 9 open put options having a maturity period up to January 2013. These derivative options are proprietary products of banks, which do not have a ready market and as such are marked to a model, which is usually bank specific instead of being marked to market. Based on marked to a model concept the loss on valuation amounts to Rs 2,707.8 million. However, in the view of the management due to significant uncertainty associated with the above derivative options whose ultimate outcome depends on future events, the loss on such open derivative options cannot be determined at this stage.
15. During the Financial year 2008-09, the Company has allotted for cash 2,80,00,000 equity shares of Rs 10.00 each at a premium of Rs 11.30 per share on conversion of equivalent number of warrants issued on preferential basis. The proceeds received from this issue have been utilized towards meeting part of capital expenditure for Integrated Paper and Pulp project of the Company.
16. The Board of Directors of the Company has granted options to the employees pursuant to Abhishek Employees Stock Options Plan 2007 on July 9, 2007. These options were granted at Rs 17.55 per option, being the latest available closing market price prior to the date of grant of options in accordance with SEBI guidelines. The quoted price of share on grant and the exercise price of option is equal and therefore there is no impact on profit and loss account due to Employee Share-based options as the Company is following intrinsic value method.
17. The Company has exercised the option given vide notification No. G.S.R. 225(E) dated March 31, 2009 issued by the Ministry of Corporate Affairs, Government of India and in accordance therewith, the Company has capitalized the loss aggregating to Rs 78.1 million arisen on translation of long term foreign currency monetary liabilities relating to acquisition of fixed assets, out of which Rs 0.2 million has been amortized during the year and the unamortized balance as at March 31, 2009 is Rs 77.9 million.
Had the Company not exercised the option given under the aforesaid Notification, gross fixed assets would have been Rs 20,954.0 million (as against reported figure of Rs 21,032.1 million), depreciation would have been Rs 1,159.1 million (as against reported figure of Rs 1,159.3 million), net exchange loss would have been Rs 136.0 million (as against reported figure of Rs 57.9 million) and loss after tax for the year would have been Rs 608.3 million (as against reported figure of Rs 530.4 million).
18. During the Financial year 2008-09, the Company completed its Integrated Paper and Pulp project. After installing and completing the project, the Company had to further incur additional capital expenditure on debottlenecking of critical processes of newly installed paper & pulp machines and finally started the commercial production w.e.f. December 1, 2008 after achieving normal level of production. The expenditure incurred on the project has been capitalized in the books of accounts.
19. The figures of the previous year have been rearranged/ regrouped, wherever considered necessary to facilitate comparison.
20. Schedules 1 to 19 form an integral part of the accounts.
For and on behalf of the Board
S K Tuteja Rajinder Gupta Chairman Managing Director
Place : New Delhi Pawan Jain Arun GoyalDate : May 15,2009 Company Secretary Chief Financial Officer
SCHEDULE annexed to and forming part of Consolidated Financial Statements (Contd.)
113Directors’ Report Corporate
Governance Report Management’s Discussion and Analysis
Standalone Financial Statements
Corporate Sustainability Report
Consolidated Financial Statements
INFORMATION RELATED to subsidiaries for the year ended March 31, 2009
Figures in India Rupees*
Name of subsidiary Company Abhishek Industries Inc.
Abhishek Europe SA**
Abhishek Global Ventures Limited
Country of Incorporation USA Switzerland India
Financial year ended on March 31, 2009 March 31, 2009 March 31, 2009
No. of shares held in subsidiary Company 50,000 equity shares of USD 1 each
1,000 equity shares of CHF 100 each
50,000 equity shares of Rs 10 each
Extent of Holding Company’s interest (%) 100.00 99.80 100.00
Financials
a) Capital 25,36,750.00 44,35,854.00 5,00,000.00
b) Reserves (12,61,121.42) (28,72,810.01) (39,39,002.00)
c) Total Assets 13,72,025.08 20,17,077.11 6,56,64,806.00
d) Total Liabilities (excludes capital & reserves) 96,396.50 4,54,033.12 24,806.00
e) Details of Investments NIL NIL 4,75,000.00
f) Turnover NIL NIL 37,17,740.00
g) Profit before taxation 14,96,852.46 (5,07,196.96) (37,89,681.00)
h) Provision for Taxation (includes fringe benefit tax) NIL 20,806.90 29,056.00
i) Profit after taxation 14,96,852.46 (5,28,003.86) (38,18,737.00)
j) Proposed dividend NIL NIL NIL
*Exchange rate as on March 31, 2009
For Abhishek Industries Inc - 1 USD = Rs 50.735
For Abhishek Europe SA - 1 CHF = Rs 44.270
**The Company has disinvested its entire holding in Abhishek Europe SA. Accordingly Abhishek Europe SA has ceased to be a subsidiary of the
Company w.e.f. May 18, 2009.
Abhishek Industries Limited114
NOTES
115
NOTES
Abhishek Industries Limited116
NOTES
Notice is hereby given that the 19th Annual General Meeting of the Members of ABHISHEK INDUSTRIES LIMITED will be held on Thursday, the 27th day of August, 2009 at 10.30 A.M. at the Registered Offi ce of the Company at Trident Complex, Raikot Road, Barnala, Punjab to transact the following business:
ORDINARY BUSINESS1. To receive, consider and adopt the audited Balance Sheet of the
Company as at March 31, 2009; Profi t and Loss Account and Cash Flow Statement for the year ended on that date along with the Reports of the Auditors and Directors thereon.
2. To appoint a Director in place of Mr S K Tuteja, who retires and being eligible, offers himself for re-appointment.
3. To appoint a Director in place of Ms Pallavi Shroff, who retires and being eligible, offers herself for re-appointment.
4. To appoint a Director in place of Ms Ramni Nirula, who retires and being eligible, offers herself for re-appointment.
5. To appoint a Director in place of Mr Rajiv Dewan, who retires and being eligible, offers himself for re-appointment.
6. To appoint auditors to hold offi ce from the conclusion of this Annual General Meeting until the conclusion of next Annual General Meeting and to fi x their remuneration and pass following resolution thereof:
“RESOLVED that M/s Deloitte Haskins & Sells, Chartered Accountants, New Delhi, be and are hereby re-appointed as statutory auditors of the Company to hold the offi ce from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company, on such remuneration including reimbursement of traveling and other out of pocket expenses as may be fi xed by the Managing Director of the Company.”
SPECIAL BUSINESS7. Appointment of Director
To consider and, if thought fi t, to pass with or without modifi cation(s), the following resolution as an Ordinary resolution:
“RESOLVED that Mr Karan Avtar Singh, who was appointed as an Additional Director of the Company by the Board of Directors pursuant to Section 260 of the Companies Act, 1956 and holds offi ce upto the date of this Annual General Meeting, be and is hereby appointed as a Director of the Company subject to annual retirement under the Articles of Association of the Company.”
8 Appointment of Mr. Raman Kumar as Whole Time Director & payment of remuneration thereof
To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as a Special Resolution:
“RESOLVED that pursuant to the provisions of Sections 198, 269, 309 read with Schedule XIII and all other applicable provisions of the Companies Act, 1956,subject to the approval of Central Government, if so required, the
consent of the Company be and is hereby accorded to the appointment of Mr. Raman Kumar as Whole Time Director of the Company for a period of three years with effect from September 24, 2008 on the following terms and conditions, including remuneration as approved by the Compensation Committee of the Company subject to a maximum of Rs. 1,40,000/-(Rupee One lac forty thousand) per month, as are set out in the Agreement entered into by the Company with Mr Raman Kumar, which agreement is placed before the meeting and is hereby specifi cally sanctioned with liberty to the Board of Directors to alter and vary the terms and conditions of the said appointment and/or remuneration and/or agreement as may be agreed to between the Board of Directors and Mr Raman Kumar or as may be varied in the General Meeting:
1. Basic Salary: Rs. 56,000/- (Rupees fi fty six thousand only) per month
2 Perquisites and allowances: 150% of the Basic Salary
3. Other Terms:
a) The Whole Time Director shall also be entitled to the benefi ts under other benefi ts, medical reimbursement schemes, privileges and amenities,amended salary structure, in accordance with the Company’s practice and Rules & Regulations in force from time to time.
b) Apart from the above remuneration the Whole Time Director shall also be provided with a car and chauffeur as per the Company’s policy.
c) Notwithstanding anything to the contrary herein contained, where in any fi nancial year, the Company has no profi ts or its profi ts are inadequate, the Company will pay the above remuneration as minimum remuneration to the Whole Time Director.
d) The Board of Directors may increase the remuneration and perquisites of Mr Raman Kumar, Whole Time Director from time to time within the limits prescribed under the Companies Act, 1956 and such other guidelines or ceiling fi xed by the Government from time to time.”
“RESOLVED FURTHER that Board of Directors of the Company be and is hereby authorized to do all such acts, deeds, matters and things as may be necessaryand expedient for giving effect to the above resolution.”
9. Increase in remuneration of Mr. Abhishek Gupta
To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as a Special Resolution:
“RESOLVED that pursuant to provisions of Section 314(1B) of the Companies Act, 1956 and all other applicable provisions, rules, regulations and subject to approval of Central Government, if so required, the remuneration of Mr. Abhishek Gupta, son of Mr Rajinder
NOTICE
Abhishek Industries LimitedRegistered Offi ce: Trident Complex, Raikot Road, Barnala – 148 101, Punjab
114-120.indd 114114-120.indd 114 8/3/09 5:51:34 PM8/3/09 5:51:34 PM
Gupta, Managing Director of the Company be and is hereby fi xed at Rs 1,50,000 (Rupees One lac fi fty thousand) w.e.f. April 1, 2009 as per the following structure:-
Basic Salary – Rs 60,000 per month
Perquisites & Allowances – 150% of the Basic salary”
“RESOLVED FURTHER that he will also be eligible for all facilities and schemes as given to other employees of the Company under same cadre.”
“RESOLVED FURTHER that the Board of Directors of the company be and is hereby authorized to do all such acts, deeds, matters and things as may be necessary and expedient for giving effect to the above resolution.”
10. Increase in Borrowing Powers
To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as an Ordinary Resolution:
“RESOLVED that in supersession of the resolution passed by the shareholders in the Extra-Ordinary General Meeting held on March 18, 2006, the consent of the Company be and is hereby accorded under the provisions of Section 293(1)(d) of the Companies Act, 1956 to the Board of Directors of the Company for borrowing monies, from time to time, at its discretion either from the Company’s bankers or any other bank(s), fi nancial institution(s), international lending agencies or any other lending institution(s), persons, fi rms, trusts or bodies corporates by way of deposits, advances or other loans, convertible/non-convertible debentures, whether unsecured or secured directly by mortgage, charge, hypothecation or pledge of any of the Company’s assets and properties, book debts or by collateral security thereon or on such terms and conditions as may be considered suitable by the Board of Directors, even though the monies to be borrowed together with monies already borrowed by the Company, apart from temporary loans obtained from Company’s Bankers in the ordinary course of business, exceeds the aggregate paid-up capital of the Company and its free reserves i.e. reserves not set apart for any specifi c purpose provided, however, that the total amount of such borrowings shall not exceed the amount of Rs 30,00,00,00,000/- (Rupees Three thousand crores only) at any time.”
“RESOLVED FURTHER that the Board of Directors of the company be and is hereby authorized to do all such acts, deeds, matters and things as may be necessary and expedient for giving effect to the above resolution”.
11. Employee Stock Options Scheme
To consider and if thought fi t, to pass with or without modifi cation(s), the following resolution as a Special Resolution:-
“RESOLVED that pursuant to the provisions of Section 81(1A), and all other applicable provisions, if any, of the Companies Act 1956, the Memorandum and Articles of Association of the Company and subject to such other approvals, permissions and sanctions as may be necessary and subject to such conditions and modifi cations as may be prescribed or imposed while granting such approvals, permissions and sanctions, the consent of the Company be and is hereby accorded to the Board of Directors of the Company (hereinafter referred to as “the Board” which term shall be deemed to include any Committee, including the Compensation Committee/any other Committee(s) which the Board may constitute to exercise its powers, including the powers, conferred by this resolution), in addition to existing ESOP scheme of the Company, to create, offer, issue and allot at any time to or to the benefi t of such person(s) who are in permanent employment of the company, including any Director, whether whole time or otherwise (except any director who is a promoter or belongs to the promoter group or otherwise, who holds, either by himself or through his relative,
or through any body corporate, directly or indirectly, more than 10%
of the outstanding equity Shares of the Company), of the Company,
whether in India or abroad, options exercisable into shares or securities
convertible into equity shares up to 5% of paid up share capital of the
Company as on March 31, 2009, i.e. upto 1,11,09,733 equity shares
[including the quantum of shares that may be bought by an Employee
Welfare Trust (hereinafter referred to as “the Trust” which term shall
be deemed to include any Employee Welfare Trust formed for this
purpose) through any of the recognised stock exchanges where the
company’s shares are traded], under one or more employee stock
option schemes (“the Schemes”), in one or more tranches, and on such
terms and conditions as may be fi xed or determined by the Board in
accordance with the provisions of the law or guidelines issued by the
relevant Authority; each option would be exercisable for one Equity
share of a face value of Rs. 10 each fully paid-up on payment of the
requisite exercise price to the Company”.
“RESOLVED FURTHER that the Board be and is hereby authorised to
issue and allot Equity shares upon exercise of options from time to
time in accordance with the employee stock option scheme(s) and such
Equity shares shall rank pari passu in all respects with the then existing
Equity Shares of the Company”.
“RESOLVED FURTHER that in case the equity shares of the Company
are either sub-divided or consolidated, then the number of shares to
be allotted and the price of acquisition of the shares by the aforesaid
option grantees under the schemes shall automatically stand
augmented or reduced, as the case may be, in the same proportion as
the present face value of Rs. 10 per equity share bears to the revised
face value of the equity shares of the Company after such sub-division
or consolidation, without affecting any other rights or obligations of
the said allottees”.
“RESOLVED FURTHER that the Board be and is hereby authorized
to make modifi cations, changes, variations, alterations or revisions in
the said schemes as it may deem fi t, from time to time in its sole and
absolute discretion in conformity with the provisions of the Companies
Act, 1956, the Memorandum and Articles of Association of the
Company, SEBI (Employee Stock Option Scheme) Guidelines and any
other applicable laws”.
“RESOLVED FURTHER that the Board be and is hereby authorized to
take such steps for listing of the securities allotted under the schemes
on the stock exchanges where the securities of the Company are listed
as per the provisions of the listing agreement(s) with the concerned
stock exchanges, the guidelines and any other applicable laws and
regulations”.
12. To take note of the result of postal ballot conducted for creation of Mortgage
To take note of the result to be submitted by the Scrutinizer for
the Ordinary Resolution proposed to be passed separately through
postal ballot pursuant to the provisions of Section 192A and all other
applicable provisions of the Companies Act, 1956 for creation of
Charge over moveable and immoveable properties of the Company for
securing term loans and working capital facilities under section 293(1)
(a) of the Companies Act, 1956.
By Order of the Board
For Abhishek Industries LimitedRegistered Offi ce:Trident Complex
Raikot Road
Barnala-148 101, Punjab Pawan Jain
Dated: July 23, 2009 Company Secretary
114-120.indd 115114-120.indd 115 8/3/09 5:51:34 PM8/3/09 5:51:34 PM
NOTES:
i. A Member entitled to attend and vote is entitled to appoint a
proxy to attend and vote on poll instead of himself/herself and the
proxy need not be a member. Proxy form in order to be effective
must be received by the Company not less than 48 hours before
the commencement of the Meeting. A proxy so appointed shall
not have any right to speak at the meeting. The blank proxy form
is enclosed.
ii. The Register of Members and Share Transfer Books of the Company
will remain closed from Friday, August 21, 2009 to Thursday, August
27, 2009 (both days inclusive) for the purpose of Annual General
Meeting.
iii. Documents referred to in the Notice and Explanatory Statement are
open for inspection at the Registered Offi ce of the Company on all
working days, except holidays, between 11.00 A.M. to 1.00 P.M. upto
the date of the Annual General Meeting.
iv. Explanatory Statements pursuant to Section 173(2) of the Companies
Act, 1956 in respect of Item No. 7 to 11 are annexed hereto and forms
part of this Notice.
v. Members desirous of getting any information on Accounts or other items
of Agenda are requested to forward his/her queries to the Company at
least ten working days prior to the date of Annual General Meeting so
as to enable the Management to keep the information ready.
vi. Corporate members intending to send their authorized representatives
are requested to send a duly certifi ed copy of the Board resolution
authorizing their representatives to attend and vote at the Annual
General Meeting.
vii. Members are requested to notify immediately the change in their
address, if any, to the Company or its Share Transfer Agent and in case
the shares are held in dematerialized form, this information should be
passed on to their respective Depository Participants without any
delay and should always quote their folio number or DP ID & Client ID,
as the case may be, in all correspondence.
viii. Members/Proxies attending the Meeting are requested to bring their
copy of Annual Report with them at the Meeting and deliver the
enclosed attendance slip at the entrance of the meeting hall.
ix. Reappointment of Directors
Pursuant to the provisions of Articles of Association, Mr. S K Tuteja,
Ms. Pallavi Shroff, Ms. Ramni Nirula and Mr. Rajiv Dewan, Directors are
retiring at the ensuing Annual General Meeting and being eligible, offer
themselves for reappointment. The brief resumes of all these directors
and other information as per Clause 49 of the Listing Agreement with
Stock Exchanges are provided elsewhere in the Annual Report.
EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE
COMPANIES ACT, 1956
Item No. 7
Appointment of Director
Mr. Karan Avtar Singh was appointed as an Additional Director on the Board w.e.f.
January 3, 2009 in terms of Article 161 of the Articles of Association of the
Company. Pursuant to Section 260 of the Companies Act, 1956, he holds offi ce
upto the date of this Annual General Meeting and is eligible for appointment
as Director. The Company has received a notice in writing from a shareholder
under Section 257 of the Companies Act, 1956 proposing his name for the
appointment as Director of the Company. No equity share of the Company
is being held by Mr. Karan Avtar Singh. A brief profi le of Mr. Karan Avtar Singh
and other information as per clause 49 of the Listing Agreement with Stock
Exchanges are provided elsewhere in this Annual Report.
Your Directors consider that the Company would be benefi ted by the mature
advice of Mr. Karan Avtar Singh and recommend the acceptance of the
resolution.
None of the Directors is interested in the resolution except Mr. Karan Avtar
Singh, the proposed appointee.
Item No. 8
Appointment of Mr. Raman Kumar as Whole Time Director &
payment of remuneration thereof
Mr Raman Kumar was appointed as Director of the Company w.e.f. September
24, 2008 after obtaining shareholders approval in the Annual General
Meeting held on that day. The Board of Directors appointed Mr Raman Kumar
as Whole Time Director of the Company in their meeting held on September
24, 2008 for a period of three years w.e.f. September 24, 2008 and payment
of remuneration thereof as approved by the Compensation Committee of the
Company and on the terms and conditions as are set out in the resolution.
As per the provisions of the Companies Act, 1956, read with schedule XIII,
thereof, approval of shareholders is required for the purpose. Hence, the Board
recommends the resolution for your approval by way of special resolution.
The information as required under Schedule XIII of the Companies Act, 1956
is given hereunder:
I. GENERAL INFORMATION Nature of Industry
Abhishek Industries Limited is operating in three business segments
viz. Yarns, Terry Towels, Paper and Chemicals.
Commercial Production
As on March 31, 2009, the Company is having capacities for
manufacture and processing as hereunder:
SrNo
Particulars of Manufacturing/processing
Capacity
1. Yarn 1,76,352 Spindles
2. Processed Yarn 6,825 tpa
3. Open End Yarn 1,920 Rotors
4. Manufacture of Terry Towels 350 Looms
5. Writing & Printing Paper 1,75,000 tpa
6. Sulphuric Acid 1,00,000 tpa
7. Caustic Soda 110 tpd
8. Co generation of Power 50 MW
9. Steam 338 tph
The Company has recently completed its fi rst phase of Yarn expansion
project at Budni, successfully. As per fi rst phase of expansion, the
Company has set up 50,400 spindles at Budni, Madhya Pradesh which
increased the total Yarn capacity to 1,76,352 spindles & laid foundation
stone of second phase, comprising another 50,400 spindles. The Company
has started commercial production on its newly installed integrated state
of the art Paper modernisation cum expansion project. Post completion of
project, the paper manufacturing capacity of Company has increased to
1,75,000 tpa. The Terry Towel Expansion plan consists of addition of 82
looms and modernization cum balancing of textile facilities is successfully
completed & all looms were made operational during the year.
Financial performance
During the year under review, the Company has achieved a gross turnover
of Rs 15,456.1 million, Operational profi t (EBDITA) of Rs 2605.3 million.
However, due to volatility in foreign exchange the Company suffered a net
loss of Rs 530.4 million during the year under review.
Export performance and net foreign exchange
During the year ended March 31, 2009 the total exports of the
Company have been at Rs 6861.5 million and the Company has earned net foreign exchange of Rs 5398 million.
114-120.indd 116114-120.indd 116 8/3/09 5:51:35 PM8/3/09 5:51:35 PM
Foreign Investments and collaborators
The Company has established wholly owned subsidiary in USA in 2003 in the name of Abhishek Industries Inc. The fi nancial details on liabilities and assets including investments in the subsidiary are provided elsewhere in the Annual Report.
The Company has not entered into any foreign collaboration as on date.
Il INFORMATION ABOUT THE APPOINTEE Background details
Mr Raman Kumar, aged 57 years, is masters in economics and post graduate in business management. He was associated with Smt Mayadevi Trust, which takes care of the social security and other welfare measures of more than 9000 employees of the Company. He has also worked with government sector in various capacities. He has rich and varied experience in administration, liasoining, legal and corporate affairs. Mr Raman Kumar can be briefl y characterized as a person with a vast working experience having an in depth legal knowledge and a good legal acumen, blended with sharp liasoining skills and a result-oriented attitude. Apart from holding directorship of the Company, Mr Raman Kumar also holds directorship in other bodies corporate.
Past Remuneration
Prior to appointment as Director and Whole time director of the Company, Mr Raman Kumar was employed with the Company at a monthly remuneration of Rs 80,000. Further, he is also entitled to the benefi ts as are granted to the to the other executives of the Company in accordance with the Company’s practice, rules and regulations in force from time to time.
Job profi le and his suitability
Mr. Raman Kumar, Whole Time Director, shall be responsible for all the legal affairs of the Company. He is also the occupier of the Company under the Factories Act, 1948. He will be responsible for the overall well being of the employees of the Company. He has been serving the Company since 1990. Mr Raman Kumar’s rigorous approach and legal knowledge & liasoining abilities will help the Company to achieve the greater heights of success.
Remuneration proposed
Keeping in view the responsibilities assigned to Mr. Raman Kumar and his role in the legal risk management of the Company, it is proposed to appoint Mr. Raman Kumar as Whole time director of the Company on the monthly basic salary of Rs. 56,000/-(Rupees Fifty Six thousand only) plus other allowances and perquisites as specifi ed in resolution. Further, the Board of Directors shall have right to increase the basic salary of Mr Raman Kumar, Whole time director of the Company, subject to approval of shareholders, government authorities, if required.
Further, he would be entitled to the benefi ts as are granted to the Senior executives of the Company in accordance with the Company’s practice and rules and regulations in force from time to time.
Comparative remuneration profi le with respect to industry, size of the Company, profi le of the position and person
The salary structure of the managerial personnel has undergone a major change in the industry in the recent past. Keeping in view the type of the industry, size of the Company, the responsibilities and capabilities of Mr. Raman Kumar, the proposed remuneration is competitive with remuneration paid by other companies to such similar positions.
Pecuniary relationship with the Company or relationship with the managerial personnel
Mr. Raman Kumar does not have any pecuniary relationship with the
Company or relationship with the managerial personnel.
III OTHER INFORMATION Keeping the overall scenario of the industry, the operational
performance of the Company is reasonably good and has been
expanding its capacities across the segment to gain the competitive
edge. The company is strengthening its focus on supply chain
management, quality control, captive production, Kaizen, strategic
market alliances and expansions.
The above may also be treated as an abstract under of terms of
contract/agreement entered into between the Company and Mr Raman
Kumar, Wholetime Director pursuant to Section 302 of the Companies
Act, 1956.
None of the Directors is interested in the above resolution except Mr.
Raman Kumar himself.
Item No. 9
Increase in remuneration of Mr. Abhishek Gupta
Mr Abhishek Gupta has been working with Company as Deputy Manager
w.e.f. July 18, 2008 and is being paid a monthly salary of Rs 1,00,000 (all
inclusive) w.e.f. September 24, 2008 after approval of shareholders in last
Annual General Meeting. The appointment and remuneration of Mr Abhishek
Gupta has also been approved by the Central Government under sub-section
(1B) of section 314 of the Companies Act, 1956. The Central Government
while conveying its approval has allowed one increment in a year may be
granted to Mr Abhishek Gupta.
Looking at the performance of Mr Abhishek Gupta in his job profi le and recent
development in the areas of Reward and Recognitions being carried out in
the organization, the Screening Committee and Board in their meeting held
on May 15, 2009 have approved increase in remuneration of Mr Abhishek
Gupta to Rs 1,50,000 per month w.e.f. April 1, 2009 as per the structure
mentioned in the resolution.
Since, the employment of Mr Abhishek Gupta, son of Mr Rajinder Gupta is
governed by the provisions of Section 314(1B) of the Companies Act, 1956,
it is necessary to obtain the prior approval of the Company by a special
resolution for increasing the remuneration of Mr Abhishek Gupta. Hence,
the Board recommends the resolution for your approval by way of special
resolution.
None of the Directors except, Mr Rajinder Gupta, Managing Director, who is
father of Mr Abhishek Gupta, shall be deemed to be interested in the above
resolution.
Item No. 10
Increase in Borrowing Powers
Presently the Board of Directors of the Company has been authorized to
borrow upto an amount of Rs 2000 crores (Rupees two thousand crores
only). With the implementation of the expansion projects in the Yarn
Division, Terry Towel Division and Paper Division and increase in operations
& productivity, the Company has to borrow funds from time to time. It is,
therefore, proposed to increase the borrowing power of the Company upto
Rs 3000 crores (Rupees three thousand crores only).
Under Section 293(1)(d) of the Companies Act, 1956 for borrowings of more
than paid up capital and free reserves requires approval of shareholders.
Hence, the Board recommends the resolution for your approval.
None of Directors is personally interested in the resolution.
Item No. 11
Employee Stock Options Scheme
The human resource plays a vital role in growth and success of a Company..
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The growth and development of any enterprise become a reality thanks
to the contribution of its people. Employees are ‘business partners’ in
the true sense of the word. To cover more and more employees under
the ESOP scheme and with the objectives of securing greater employee
participation; motivating the employees to contribute to the growth and
profi tability of the Company; enabling them to participate in the long-term
growth and fi nancial success of the organisation, and a common objective
of maximizing the shareholder value, it is proposed to grant employee stock
options to employees through one or more employee stock option schemes
in addition to the existing ESOP scheme of the Company. This would enable
the Company to reward performance, past loyalty and to develop a greater
sense of ownership with the organisation.
The main features of the employee stock option schemes are as under:
Total number of options to be granted
Options convertible into such number of equity shares not exceeding up to
5% of the paid up share capital of the Company as on March 31, 2009 ,
i.e. upto 1,11,09,733 equity shares [including the quantum of shares that
may be bought by an Employee Welfare Trust (hereinafter referred to as “the
Trust” which term shall be deemed to include any Employee Welfare Trust
formed for this purpose) through any of the Recognised stock exchanges
where the company’s shares are traded] will be available for being granted
to eligible employees of the Company under one or more employee stock
option Schemes. Each option (after it is vested) will be exercisable for one
Equity share of Rs. 10 each fully paid-up.
Vested options that lapse due to non-exercise or unvested options that
get cancelled due to resignation of the employees or otherwise would be
available for being re-granted at a future date.
Identifi cation of classes of employees entitled to participate in the
employee stock option schemes
All permanent employees of the company including Directors (excluding
promoters and any director who holds either by himself or through his
relative, or through any body corporate, directly or indirectly, more than 10%
of the outstanding equity Shares of the Company), whether working in India
or abroad, as may be decided by the Board (Which includes any committee
thereof), from time to time, would be entitled to participate in the employee
stock option schemes.
Employees may be granted Stock Options based on performance and such
other criteria as the Board may, in its absolute discretion decide. The options
granted to an employee will not be transferable to any person and shall
not be pledged, hypothecated, mortgaged or otherwise alienated in any
manner.
Requirements of vesting and period of vesting
The Options granted shall vest so long as the employee continues to be in
the employment of the Company. Vesting of the options shall take place
over a maximum period of 4years with a minimum vesting period of 1 year
from the date of grant. The Board would determine the exact proportion and
period in which the options would vest.
The Board may, in its discretion, lay down certain performance metrics on
the achievement of which the granted options would vest, the detailed
terms and conditions relating to such performance-based vesting, and the
proportion in which options granted under the schemes would vest (subject
to the minimum vesting period as specifi ed above).
Exercise Price
The exercise price shall not be less than the face value per share per option
and shall be decided by the Board at the time of grant(s).
Exercise Period and the process of Exercise
The Exercise period would commence from the date of vesting and will
expire on completion of fi ve years from the date of vesting of options.
The options will be exercisable by the Employees by a written application to
the Company to exercise the options in such manner, and on execution of
such documents, as may be prescribed by the Board from time to time. The
options will lapse if not exercised within the specifi ed exercise period.
Appraisal Process for determining the eligibility of the employees to
ESOP
The appraisal process for determining the eligibility of the employee will
be specifi ed by the Board, and will be based on criteria such as seniority
of employee, length of service, performance record, criticality, merit of the
employee, future potential contribution by the employee and/or such other
criteria that may be determined by the Board at its sole discretion.
Maximum number of options to be issued per employee and in
aggregate
The number of options that may be granted to employees under the Scheme
shall be determined by the Compensation Committee from time to time.
However, grant of options to identifi ed employees, during any one year shall
not be equal to or exceeding 1% of the issued capital (excluding outstanding
warrants and conversions) of the company at the time of grant of options.
Disclosure and Accounting Policies
The Company shall comply with the disclosure and the accounting policies
prescribed by concerned Authorities including SEBI.
Method of option valuation
The Company shall calculate the employee compensation cost using the
intrinsic value of the options.
If the Company calculates the employee compensation cost using
intrinsic value of the stock options, the difference between the employee
compensation cost that shall have been recognized if it had used the fair
value of the options, shall be disclosed in the Directors’ Report and also the
impact of this difference on profi ts and on EPS of the Company shall also be
disclosed in the Directors’ Report.
As the employee stock option schemes provide for issue of shares to be
offered to persons other than existing shareholders of the company, consent
of the members is sought pursuant to Section 81(1A) of the Companies Act,
1956.
None of the Directors of the Company are in any way, concerned or interested
in the resolution, except to the extent of the securities that may be offered
to them under the scheme.
By Order of the Board
For Abhishek Industries LimitedRegistered Offi ce:Trident Complex
Raikot Road
Barnala-148 101, Punjab Pawan JainDated: July 23, 2009 Company Secretary
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ATTENDANCE SLIP
Member’s Folio No. :…………………………………………………….……………………………………………………………………………….……………………………………………………………………………….………………………………………………….………
Client ID No. :…………………………………………………….……………………………………………………………………………….……………………………………………………………………………….………………………………………………….………
DP ID No. :…………………………………………………….……………………………………………………………………………….……………………………………………………………………………….………………………………………………….………
Name of the Member :…………………………………………………….……………………………………………………………………………….……………………………………………………………………………….………………………………………………….………
Name of Proxy holder :…………………………………………………….……………………………………………………………………………….……………………………………………………………………………….………………………………………………….………
No. of shares held :…………………………………………………….……………………………………………………………………………….……………………………………………………………………………….………………………………………………….………
I hereby record my presence at the 19th ANNUAL GENERAL MEETING of the Company held on Thursday, the 27th day of August, 2009 at 10.30 A.M. at
Trident Complex, Raikot Road, Barnala–148 101, Punjab.
____________________________
Signature of Member/Proxy
Notes :
1. Members/Proxy holders are requested to produce the attendance slip duly signed for admission to the meeting hall.
2. Members are requested to bring their copy of Annual Report.
PROXY FORM
Member’s Folio No/Client ID: ………...............................................……………………
I/We….………………………………………………....................………………….................................………...... of ...........….…………………………………………………………......................................................................................................... in the district of
…………………………………...................................….......... being a member/members of ABHISHEK INDUSTRIES LIMITED, hereby appoint……………..............................................................………………………
………………………….......................…………… of ……….......................………………………………… in the district of ………………………................……………… or failing him/her
……………………………………… of ……………………………………………… in the district of …………………………………………… as my/our proxy to vote for me/us on my/our behalf at the 19th ANNUAL
GENERAL MEETING of the Company to be held on Thursday, the 27th day of August, 2009 at 10.30 A.M. and at any adjournment thereof.
Signed this ……………………………… day of ……………………………………………… 2009.
Note :
If it is intended to appoint a proxy, the form of proxy should be completed and deposited at the Registered Offi ce of the Company at least 48 hours before
the commencement of the meeting
Affi x Re 1Revenue Stamp
here
Abhishek Industries LimitedRegistered Offi ce: Trident Complex, Raikot Road, Barnala – 148 101, Punjab
Abhishek Industries LimitedRegistered Offi ce: Trident Complex, Raikot Road, Barnala – 148 101, Punjab
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Board of DirectorsMr Rajinder Gupta
Mr S K Tuteja
Ms Pallavi Shroff
Ms Ramni Nirula
Mr Rajiv Dewan
Mr Karan Avtar Singh
Mr Raman Kumar
Chief Financial Offi cerMr Arun Goyal
Company SecretaryMr Pawan Jain
Statutory AuditorsDeloitte Haskins & Sells
Internal AuditorsKPMG
Cost AuditorsRamanath Iyer & Co.
Tax AuditorsS C Vasudeva & Co.
BankersState Bank of India
Canara Bank
Punjab National Bank
State Bank of Patiala
Corporation Bank
Registered Offi ceTrident Complex,
Raikot Road
Barnala – 148 101
Tel: +91-1679-244700-02
Fax: +91-1679-244708
Email: corp@tridentindia.com
Corporate Offi ceE-212, Kitchlu Nagar
Ludhiana – 141 001
Tel: +91-161-5039999, 5038888
Fax: +91-161-5039900, 5038800
email: corp@tridentindia.com
US SubsidiaryAbhishek Industries Inc
444 NE Ravenna Blvd
Ste 402, Seattle
WA 98115,
USA
email: corp@tridentindia.com
Registrar & Transfer AgentAlankit Assignments Limited
(Unit: Abhishek Industries Limited)
2E/21 Jhandewalan Extension
New Delhi – 110 055
Tel: +91-11-23541234, 42541234
Fax: +91-11-42541967
email: rta@alankit.com
www.tridentindia.com
CORPORATE INFORMATION
ABHISHEK INDUSTRIES LIMITEDE-212, Kitchlu Nagar, Ludhiana - 141 001
www.tridentindia.com, email: corp@tridentindia.com
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