| Dear members,
The Directors present their 24th Annual Report and the Audited
Statement of Accounts for the year ended 31 st March 2014.
Particulars As on As on
31.03.2014 31.03.2013
(Rs. Lakhs) (Rs. Lakhs)
Total Income 578.49 408.28
Total Expenditure 494.64 323.12
Profit before interest & depreciation 83.85 85.16
Less :
Interest __ __
Depreciation 19.39 20.53
Net Profit 64.46 64.63
I. PERFORMANCE:
The year 2013-14 has been very eventful one with negative growth for
the manufacturing sector. While the economy being on a slow growth, the
cost pull inflation affected the manufacturing sector especially the
distillery industry which had few avenues to pass the cost increase to
the consumers due to strict government restriction on price increase.
Thus, liquor industry particularly in Kerala suffered unprecedented
losses.
Our Company though no exception to the said circumstances, however
continued to make profits albeit in small way due to our policy of
primarily concentrating on providing bottling services rather than
investing in unprofitable brand marketing. Even though overall
productivity and revenue increased by 42 % over the last financial
year, the net profits were more or less same as of last year at
Rs.83.85 lakhs before depreciation and Rs, 64.46 lakhs net after
depreciation. The profit margins would have been higher but for the
extra cost especially incurred on implementing the Minimum Wages Act
which was made effective from June 2013. Though the Company has
willingly abided to this increased cost as being welfare measure to our
workers, the government refused to increase the selling prices of IMFL
products. Hence, this increased expense without price increase reduced
the margins, as we were unable to demand corresponding increase in
bottling fees from ourclients.
II. OVERALL VIEW
Being in alcoholic industry in Kerala where the governmental control is
significant, our flexibility to react to market dynamics is rather
limited if not curtailed. Hence, the Company continued to operate as
contract bottlers for the time being which has given somewhat better
results even under the adverse circumstances. Under the emerging
scenario, diversification into other areas by our company is becoming
imperative and the directors are actively considering this matter as
the long term business strategy while continuing present operations to
the near future i.e as service provider to other liquor marketing
companies to full fill the obligations as part of rehabilitation
process.
The company is still under the process of Rehabilitation stage and is
under the purview of Hon. BIFR. The Operating Agencies (OA) have
submitted a DRS (Draft Rehabilitation Scheme) and presently is in final
stages with few more clarifications to be addressed satisfactorily.
III. CORPORATE GOVERNANCE
The requirement of compliance with code of Corporate Governance as per
clause 49 of the listing Agreement has been duly complied with. The
Company has an "Audit Committee" of independent Directors with
Mr.M.P.Gopalakrishnan (Chairman), Mr. N. Muralidhar Nair, Mr. K.V.
Viswamohan Menon and Mr. K. Rajkumar as members and a report showing
the details of Corporate Governance is enclosed.
IV. PERSONNEL
None of the employees of the Company was in receipt of remuneration in
excess of the limits prescribed under Section 217(2A) of the Companies
Act 1956 read with Companies (Particulars of Employees) Rules, 1975 as
amended. Directors are not paid any remuneration nor sitting fees for
the board meetings.
V. CONSERVATION OF ENERGY
Since the main distillery division is not functioning, only IMFL
bottling division is presently operated, the consumption of energy /
power therefore is insignificant.
VI. LISTING PARTICULARS
The Company's shares are suspended from trading in the Bombay Stock
Exchange Ltd., until the company comes out of its sickness. After this
the company can recommence the trading of its shares.
VII. DIRECTORS
The Board of Directors, at their meeting held on 12th February, 2014,
have appointed Mr.Nottiyath Muralidhar Nair as an Additional Director
of the Company and he holds office upto the date of the ensuing Annual
General Meeting. The Board recommends the appointment of Mr.Nottiyath
Muralidhar Nair as an Independent Director of the Company for a period
of 5 consecutive years and accordingly, necessary Resolution has been
included in the Agenda of the Notice convening the Annual General
Meeting.
Further, the Board of Directors, at their meeting held on 13th August,
2014, have recommended the appointment of Mr. Muthiyil Pathayapura
Gopalakrishnan, as an Independent Director of the Company for a period
of 5 consecutive years and accordingly, necessary' Resolution proposing
his appointment has been included in the Agenda of the Notice convening
the Annua! General Meeting.
Mr. Krishnan Nair Rajkumar, Director of the Company, retires by
rotation and being eligible, offers himself for re-appointment.
VIII. AUDIT
Messers. Varma & Varma, (having Firm Registration NO.004532S),
Chartered Accountants, Kozhikode, Statutory Auditors of the Company
retires at the ensuing Annual General Meeting. Being eligible for
re-appointment, in accordance with the provisions of Section 139, 142
and other applicable provisions, if any, of the Companies Act, 2013 the
Board of Directors have recommended the appointment of Messers. Varma &
Varma, (having Firm Registration No.004532S), Chartered Accountants,
Kozhikode as the Statutory Auditors of the Company for a period of 3
consecutive years from the conclusion of the ensuing Annual General
Meeting till the conclusion of 27th Annual General Meeting which ought
to be held during the year 2017, subject to ratification by the members
annually.
IX. COST COMPLIANCE
The Cost Compliance Report for the financial year ended 31 st March
2013 was submitted to the Central Government in the prescribed form on
25th September, 2013 vide SRN:S22522338.
Further, in accordance with Section 209(1 )(d) of the Companies Act,
1956 read with Rule 5 of the Companies (Cost Accounting Records) Rules,
2011, the Cost Compliance Report for the financial year ended 31st
March 2014 will be submitted to the Central Government within the
prescribed time.
X. DIRECTOR'S RESPONSIBILITY STATEMENT
The Directors hereby state:
i) That in the preparation of the annual accounts, the applicable
accounting standards have been followed and that there are no material
departures.
ii) That they have selected such accounting policies, consulted the
Statutory Auditors and have applied them consistently and made
judgments and estimates that are reasonable arid prudent so as to give
a true and fair view of the state of affairs of the Company at the end
of the financial year on 31.03.2014 and of the profit of the Company
for the period.
iii) That they have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities.
iv) That they have prepared the annual accounts on a going concern
basis.
XI. ACKNOWLEDGMENT
The Directors thank all the bottling business partners for their
continued faith in the Company as they contributed substantially to the
gainful operations of our company. Our directors would also like to
thank the fellow directors, executives and employees without whose
untiring work the Company would not have achieved the good results
inspite of the adverse business environment. Your directors would also
like to thank all the shareholders for their continued confidence in
the Company.
On behalf of the Board of Directors
K. V. Viswamohan Menon
Chairman & Wholetime Director
Palakkad
13.08.2014
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