BOARD OF DIRECTORS Shri Shanti lal Rathi - Non Executive ... file19th ANNUAL REPORT 2011 - 2012 1...

1199tthh AANNNNUUAALL RREEPPOORRTT 22001111 -- 22001122 1

BOARD OF DIRECTORS

Shri Ram Rich Pal Nuwal - Chairman

Shri Naresh Gattani - Executive Director

Shri Shanti lal Rathi - Non Executive Director

Shri Shiv Prasad K Rathi - Non Executive Director

Smt. Ranjana Gattani - Non Executive Director

Smt. Prem Devi Gattani - Non Executive Director

Shri Harshil Nuwal - Non Executive Director

Shri Ganpat Singh Chouhan - Independent Director

Shri Hanuman Kumat - Independent Director

Shri Manish Inani - Independent Director

Shri Sanjay Kumar Jain - Independent Director

Bankers

State Bank of Bikaner & Jaipur

Industrial Estate Branch,

Pur Road, Bhilwara - 311 001(Raj.)

Auditors

M/s S. Dad & Co.,

Chartered Accountants,

44, First Floor Heera Panna Market,

Bhilwara - 311 001(Raj.)

Registered Office Shop No.2, Sangam Towers,

Near. Old RTO, Gandhi Nagar,

Pur Road,

Bhilwara - 311 001(Raj.)

Plant Village : Guwardi,

12th K.M.Stone, Chittorgarh Road

Bhilwara - 311 025 (Raj.)

ANNUAL GENERAL MEETING Thursday, 28th June 2012 at 10.00 A.M.

VENUE

SONA PROCESSORS (INDIA) LIMITED 12th K.M. Stone, Chittorgarh Road, Village : Guwardi

BHILWARA 311 025 (Raj.)

CONTENTS Page no.

NOTICE 2

DIRECTOR’S REPORT 3

AUDITOR’S REPORT 22

BALANCE SHEET 26

STATEMENT OF PROFIT & LOSS 27

CASH FLOW STATEMENT 28

SIGNIFICANT ACCONTING POLICIES 29

NOTES TO THE ACCOUNTS 31

ATTENDANCE SLIP & PROXY FORM 42


NOTICE

Notice is hereby given that the Nineteenth ANNUAL GENERAL MEETING of the members of Sona Processors

(India) Limited will be held on Thrusday, 28th June 2012 at 10.00 A.M. at the Plant Site of the Company at 12th

K.M. Stone, Chittorgarh Road, Bhilwara 311 025 to transact the following business: –

ORDINARY BUSINESS: 1. To receive, Consider and adopt the Audited Balance sheet as at March 31, 2012 and Statement of the

Profit & Loss Account for the year ended on that date together with the Reports of the Directors and the

Auditors thereon.

2. To appoint Directors in place of Shri Ganpat Singh Chouhan, Shri Hanuman Kumat, Shri Manish Inani

& Shri Sanjay Jain, Directors who retire by rotation at this meeting and being eligible, offers

themselves for reappointment.

3. To appoint M/s S. Dad & Co. Chartered Accountants, Bhilwara. as the Statutory Auditors of the

Company, to hold office from the conclusion of this Annual General Meeting until the conclusion of the

next Annual General Meeting and fix their remuneration.

By Order of the Board

NARESH GATTANI

Bhilwara, May 28, 2012 EXECUTIVE DIRECTOR

NOTES:

1. A member entitled to attend and vote at the annual general meeting is entitled to appoint a proxy to

attend and vote instead of himself/herself and proxies need not to be a member of the company. Proxies

in order to be effective must be received at the registered office of the Company not less than 48 hours

before the commencement of the meeting.

2. The register of members and share transfer books will remain closed from Wednesday, 13th day of June

2012 to Thursday the 28th day of June 2012 (both days inclusive).

3. The members are requested to notify change, if any in their address to the Company at its registered

office, quoting their folio number.

4. Members desirous of asking any questions at the Annual General Meeting are requested to send in

their questions so as to reach the Company at least 7 days before the Annual General Meeting so that

the same can be suitably replied.

5. The Ministry of Corporate Affairs (MCA) has taken a “Green initiative in the Corporate Governance” by

providing an opportunity to the shareholders to register their e-mail address with the Company and

changes therein from time to time.

The Company will send notices/documents such as Annual Reports and notices by e-mail to the

shareholders registering their e-mail address. To support this laudable move of the Government, the

members who have not registered their e-mail address, so far, are requested to do so at the earliest.

By Order of the Board

NARESH GATTANI Bhilwara, May 28, 2012 EXECUTIVE DIRECTOR


DIRECTORS’ REPORT To,

DEAR SHAREHOLDERS

Your Directors are pleased to present the Nineteenth Annual Report, together with Audited Financial

Statement of Accounts for the financial year ended March 31, 2012.

The bird eye views of the summarized financial results are depicted below:-

FINANCIAL RESULTS: (Rs.in lacs)

Current Year Previous year 31.03.2012 31.03.2011

Total Revenue 3875.91 3433.59

Profit before Depreciation, Interest & Tax (EBITD) 393.46 319.27

- Depreciation 181.58 156.02

- Finance Cost 132.88 65.77

- Provision for taxation (MAT) 15.05 18.07

- Provision for Deferred Tax Liability 09.68 15.89

Net Surplus after Tax 54.27 63.52

DIVIDEND Taking into consideration the increased need of funds for working capital and to sustain future growth of

company through more assets expansion, your Directors have decided to conserve the profit and do not

recommend any dividend for the financial year ended on March 31, 2012.

PROJECT COMPLETION AND BUSINESS PERFORMANCE Your Company, with the help of continuous expansion and modernization program with latest available

technology and with all required infrastructure facilities to process Grey fabrics at optimistic level with specific

properties addition through special treatment over fabrics, is having better edge over existing local competitors.

During the year under review company has installed one continuous pressing machine formula No.1 to improve

quality of processing as well as energy saving. This addition has resulted in value addition & increase in

processing margin. To exercise better control over effluent discharge, company has installed Reverse Osmosis

Plant having a capacity of 700m3 per day for further treatment of treated effluent to reduce the intake of fresh

water more than 85% which is working efficiently.

The Board continues to push for enhanced creation of fabric value through superior processing, governance and

healthy business practice. The operation of the company was carried out satisfactorily during the year as

reflected in the financial results given above. The job processing industry in this region is witnessing the

continuously increasing competition and even than the company achieved job processing of 344.81 lacs mtrs.

having Fabrics and processing turnover of Rs 3866.81 lacs, a rise of 12.88% over the previous year. The company

has exported fabric of Rs. 143.73 lacs. The Profit After Tax was lower at Rs. 54.27 lacs, a decrease of 14.57% as

compared to the previous year, primarily on account of higher depreciation and finance cost. The cash accrual is

Rs 245.53 Lacs during the years as against Rs 235.43 Lacs of previous year.

The Labour Shortage remained continuous phenomena as a result the production chain was not smooth which

affected the production capacity. Under the prevailing economic scenario, profit performance considered

satisfactory inspite of increase in the prices of Dyes & Chemicals, Coal & Diesel, Labour, Store & Spares etc. as

compare to marginal increase in fabric processing rates.

FUTURE EXPANSION / MODERNIZATION Board decides to install a New Boiler of 10T/hr Capacity which is capable to be operated by any type of coal i.e.

Lignite, Steam Coal or Petroleum Coke. By installing this boiler plant can run at full efficiency and steam cost

will be reduced.


DIRECTORS: In accordance with the article number 89 of Articles of Association of the Company and other applicable

provisions of the Companies Act, 1956, Shri Ganpat Singh Chouhan, Shri Hanuman Kumat, Shri Manish Inani

& Shri Sanjay Jain, retire from office by rotation at the ensuing Annual General Meeting and being eligible,

offer them selves for reappointment.

Smt. Uma Nuwal has resigned as Director of the Company effective from 19-11-2011. The Board placed on

record their appreciation for the distinguished services rendered by Smt. Uma Nuwal during her tenure with

the company.

DIRECTORS’ RESPONSIBILITY STATEMENT Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors confirm that :

a. In the preparation of the annual accounts, the applicable accounting standards have been followed and

that no material departures have been made from the same;

b. The accounting policies have been applied consistently and estimates made are reasonable and prudent,

so as to give a true and fair view of the state of affairs of the company as at the end of the financial year

and of the profit of the company for that period.

c. Proper and sufficient care has been for the taken to the best of their knowledge and information, for

maintenance of adequate accounting records in accordance with the provisions of the Companies Act,

1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other

irregularities.

d. The annual accounts have been prepared on a going concern basis.

LISTING Securities of your company continue are listed with Jaipur Stock Exchange Ltd., Jaipur.

The Delhi Stock Exchange Association Ltd. has still not initiated any action to delist the securities of the

company for the reason best known to them whereas the company has already completed all requisite

formalities of de-listing in the month of Nov., 2001 itself and not paying listing fee by last eleven years.

CORPORATE GOVERNANCE Your Company has always strived to maintain appropriate standards of good corporate governance. The report

on corporate governance as stipulated under clause 49 of the listing agreements forms part of this report. The

requisite certificate from the auditors of the company confirming compliance with the conditions of corporate

governance as stipulated under the said clause forms part of this report.

In line with the said provisions, the Company obtained certificates from the whole time Director (CEO) and

Auditors of the Company, which are annexed form part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS The Annual Report also contains a separate section on the Management Discussion and Analysis, which is a

part of the Directors’ Report.

CODE OF CONDUCT Your Company is committed to conducting its business in accordance with the applicable laws, rules and

regulations and highest standards of business ethics. In recognition thereof, the Board of Directors has

implemented a Code of Conduct for adherence by the Directors and Senior Management Personnel of the

Company. This helps in dealing with ethical issues and also in fostering a culture of accountability and

integrity.

AUDITORS The Statutory Auditors of the Company, M/s S. Dad & Co. Chartered Accountants, Bhilwara, retire at the

conclusion of the ensuing Annual General Meeting. The Statutory auditors have confirmed their eligibility and

willingness to accept the office on re-appointment. The Board recommends their re-appointment for the next

term.

AUDITORS’ REPORT AND NOTES TO ACCOUNT

The Board has duly reviewed the Statutory Auditors’ Report on the Accounts. The observation appearing in the

Auditors’ Report, including the sub-judice matter are self- explanatory and do not call for any further

explanation / clarification by the Board of Directors under Section 217(3) of the Companies Act, 1956.


COST AUDIT

The Board of Directors, in pursuance of an order under section 233B of the Companies Act, 1956 issued by the

Ministry of Corporate Affairs (MCA) has appointed M/s Avnesh Jain & Co. Jaipur as Cost Auditor of company

for conducting audit of the cost accounting records/accounts maintained by the Company in respect Processing of

Fabric & Fabric Manufacturing. The cost Audit Report for the financial year 2011-12 is yet to be placed before

the Board.

FIXED DEPOSITS During the year under review the company has not accepted any deposit from public under section 58A of the

Companies Act, 1956 and as such, no amount of principal or interest on fixed Deposits was outstanding on the

date of Balance sheet.

QUALITY, HEALTH, SAFETY & ENVIRONMENT: Quality, Health, Safety and Environment policies involve implementing benchmark standards such as AN ISO

9001 2008 identifying hazards in daily activities of the Company and mitigate their impact on personal and

environment. The Company is committed for delivering quality product with minimum adverse impact on the

environment. A well developed Environment Management System (EMS) is established in the Company. EMS is

adherent to the all possible standards of environmental management, health, safety and compliance with all

relevant environmental legislations and regulations.

INSURANCE Your Company’s Building, Plant & Machinery, Tools, Electrical Installations, Stock in Process, Finished Goods

and Raw Materials have been adequately insured.

INDUSTRIAL RELATIONS Your Directors express their appreciation for contribution made by employees for the contineous improvement in

the operations of the Company. The enthusiasm and unstinting efforts of the employees enabled the Company to

remain competitive in the industry despite of increased competition.

PARTICULARS OF EMPLOYEES Information pursuant to Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of

Employees) Amendment Rules, 2011 is not applicable as none of employees is drawing salary up to and

exceeding the limit specified in the said section during the year or part of the year.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND

FOREIGN EXCHANGE EARNING AND OUTGO

Report required to be made pursuant to Section 217 (i) (e) of Companies Act, 1956, read with the Companies

(Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are separately disclosed and forming

part of the Directors’ Report.

ACKNOWLEDGEMENT

The Boards of Directors would like to acknowledgment all its stakeholders and is grateful for the support

received from shareholders, bankers, customers, suppliers and business associates. Your Directors recognize and

appreciate the sincere and hard work, Loyalty, dedicated efforts and contribution of all the employees that

ensured sustained all round performance in a challenging business environment.

For and On behalf of the Board

NARESH GATTANI

Bhilwara, May 28, 2012 EXECUTIVE DIRECTOR


PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND

FOREIGN EXCHANGE EARNING & OUTGO

The detailed information as required under section 217 (1) (e) of the Companies Act, 1956 read with companies

(disclosure of particulars in the report of Board of Directors) Rules 1988 are as under:

(A) CONSERVATION OF ENERGY

Information required under the companies [Discloser of particulars in the Report of the Board of Directors]

Rules, 1988.

A. Conservation of Energy :

The Company continues its endeavour to improve energy conservation and utilization.

B. Technology Absorption, Research & Development (R&D) :

1. Specific areas in which R & D carried out by the company :

(a) Development of new and innovative processing to expand market.

(b) All aspects of processing chain to reduce the cost of materials, to effect import Substitution,

Process simplification and beam time reduction.

(c) Quality improvements,

2. Benefits derived as a result of the above R & D :

Development of high quality, cost effective consumer preferred processing Generation of funds to

grow the business through continuous improvement in our Manufacturing processes, by reducing

costs of raw and packaging materials, Reduction in beam cycle time.

3. Future plan of action :

The company continues to focuse on developing new, innovative and high quality processing to

meet the ever changing consumer needs and drive growth. Also focused on reducing costs to

fund the growth.

CURRENT YEAR PREVIOUS YEAR

I. POWER & FUEL 1. Electricity

(a) Purchased Unit 5925890 5508877

Total Amount (Rs.) 30141238 25309841

Rate/Unit (Rs.) 5.09 4.59

(b) Own Generation

Through Diesel Generator Unit 124225 150840

Unit/Ltr of Diesel 3.25 3.11

Cost / Unit 11.24 11.21

2. Coal & Petcock used for generation of steam in

Boiler and to heat thermic fluid oil in thermopac.

Quantity (in tones) 9102.00 11752

Total Cost 69362649 76873143

Average rate/M.T. 7621 6541

II. CONSUMPTION PER UNIT OF PRODUCTION: (Products: Synthetics Fabrics)

Electricity per meter of fabrics in unit 0.171 0.172

Fuel per meter of fabrics / kg 0.263 0.357

III. TECHNOLOGY ABSORPTION

1. Efforts, in brief, made towards technology absorption and innovation:

The technology centers involved in simplification, of fabric processing cycle exploring avenue to Reduce

cost of materials and steam cost.

2. Benefits derived as a result of the above effects:

Market expansion by increases in market size. Benefits to customers through Quality enhancement and

the reduction in cost of the processing.


IV. RESEARCH & DEVELOPMENTS Considering the absolute necessity in the long run to process customers’ fabrics with global marketability,

your company has modernized the processing plant on continuous basis & regularly upgrading the existing

Laboratory/R&D Section equipped with State of Art Infrastructure and sophisticated equipments. The said

Laboratory and R&D Cell managed by a team of qualified personnel with rich experience involved in

developing suitable recipes, shades with different fabric range in the present line of activity of your

company.

(Rs.in lacs)

2011-12 2010-11

V. FOREIGN EXCHANGE EARNING 138.41 07.38

VI. FOREIGN EXCHANGE OUTGO 251.48 92.75

MANAGEMENT DISCUSSION AND ANALYSIS

We have pleasure in submitting the Management Discussion & Analysis Report on the Company’s businesses.

We have attempted to include discussions on all specified matters to the extent relevant, or within such limits

that in our opinion are imposed by the company’s own competitive position. The Company ended the year under

review with satisfactory financial performance as a whole, despite sharp increased pressures arising due to

inflation.

We believe that our both business are backed up by necessary skills and expertise; our core competency can be

seen in the fabric process. Our financial performance is generally representative of competitiveness in our core

operations and quality of products and services.

Your company has performed satisfactorily by recording increase in turnover during the year under review. The

profit after tax & cash accrual is higher as compared to previous year.

1. COMPANY AND ITS BUSINESS STRUCTURE

Your company is mainly engaged in processing of fabrics on job basis received from its customers, Fabric

manufacturing for export & a wind power generation plant at Jaiselmer for captive consumption. At processing

stage various properties/qualities are developed which make the grey fabrics in its usable/acceptable form. Our

performance of production is mainly depends upon prevailing demand – supply ratio of Textile Commodities in

Indian as well as International market.

Our operations are focused in our segment of core competence viz. Fabric processing & Wind Power Generation.

All operating stages are kept self-sufficient managerially to perform their own duties and functions, with

support provided at a corporate level as and when required. Data on capacities, volumes and turnover are

contained in the Notes to the Accounts and a Summary is given below.

FY 2011 - 2012 FY 2010 – 2011

Particulars Production

(In Lacs)

Turn Over (Rs.in lacs)

Production

(In Lacs)

Turn Over (Rs. in lacs)

Fabric Processing Business 344.81 Mtrs 3704.17 329.07 Mtrs 3403.30

Own Fabric Sale / Export 1.77 Mtrs 149.00 0.09 Mtrs 07.02

Wind Power Generation 2.95 Units 12.88 2.80 Units 11.60

We firmly recognize that total customer satisfaction is the key to our success. Our aim is to build sound

customer relationship through creation of value for them, and in process to earn an equitable return for

ourselves. Quality is built into products through appropriate manufacturing technology and work methods.

Manufacturing at all unit is carried out by suitably qualified personnel under strict quality standards.

Continuous product development for specific applications has helped us in proactively developing technical

solutions with clearly apparent customer benefits.

2. BUSINESS OUTLOOK

The year under review saw unexpected raise in the prices of yarn during the financial year. The seasonal, textile

market which has affected the production of grey fabrics which is the main constitute of our job processing

activity. In stiff competition company has to bear the increased cost of raw material, labour, power and fuel and

is able to pass marginal burden to the customers as such.


Being equipped with modern machineries, the company’s processing of fabrics is of high quality and standard

and enjoying goodwill in the market. The medium and long-term outlook for processing business seems good.

The trust reposed by the weavers and initiative taken by the management resulted in retaining our position in

the market. Quality awareness, Pollution Control measures beside recycling of treated water is seen as driver

for sustaining the production activity in water scarcity environment.

3. RISK & CONCERNS

The risk, be it external or internal, is inherent in every business. The company has faced intense competition

resulting in higher spending on inputs with corresponding marginal increase in processing charges. The demand

pattern for fabric processing is :

• Seasonal in nature

• Affected by Government policies

• Technical obsolescence

• Customer’s expectations for better quality

• Intense competition

• Ability to offer total solution in shortest possible time

• Pollution Control measurement and water shortages.

Although the company has no control on the above external factors, which are adverse to the company’s

operations. The company’s dedicated technical team upgrades its production cycle to meet the customers’

expectations. All the above risks factors involved in the business plans and the management continuously

monitors them. Appropriate action is initiated immediately depending upon the exigencies of the situation.

4. INTERNAL CONTROL & THEIR ADEQUACY

The Company has placed adequate systems of internal control commensurate with size and the nature of its

operations. These have been designed to provide reasonable assurance with regard to recording and providing

reliable financial and operational information, complying with applicable statutes, safeguarding assets from

unauthorized use or losses, executing transactions with proper authorization and ensuring compliance of

corporate policies.

The Company has a well defined delegation of power with authority, limits for approving revenue as well as

expenditure. Processes for formulating and reviewing annual and long-term business plans have been laid down.

The Company uses a state-of-the-art ERP system to record data for accounting and management information

purposes. It has continued its efforts to align all its procedures.

M/s Arun Kabra & Co., Chartered Accountants, Bhilwara has carry out internal audit of the Company's

activities. The audit is based on an Internal Audit Plan, which is reviewed each year in consultation with the

Statutory Auditors and the Audit Committee. The planning and conduct of Internal Audit is oriented towards

the review of controls in the management of risks and opportunities in the Company's activities. The Internal

Audit process is designed to review the adequacy of internal control checks in the system and covers all

significant areas of the Company's operations such as Fabric processing, Fabric Manufacturing, accounting and

finance, procurement, employee engagement, travel, insurance, IT processes in the Company. Safeguarding of

assets and their protection against unauthorized use are also a part of these exercises.

The Company has an Audit Committee, the details of which have been provided in the Corporate Governance

Report. The Audit Committee reviews Audit Reports submitted by the Internal Auditors. Suggestions for

improvement are considered and the Audit Committee follows up on the implementation of corrective actions.

The Committee also meets the Company's statutory auditors to ascertain, inter alias, their views on the

adequacy of internal control systems in the Company and keeps the Board of Directors informed of its major

observations from time to time.

5. FINANCIAL PERFORMANCE

The Gross Turn Over of the Company during the year is Rs. 3875.91 lacs as against previous year turnover of

Rs. 3433.59 lacs. The financial performance, which has been highlighted in the Directors’ Report, needs to be

viewed in the contest of timely initiatives taken by the management under prevailing different market

condition.

6. ENVIRONMENT & SAFETY

Occupational Safety and Environment Management continues to be an important area for our company and

received focus attention throughout the year.


The only acceptable standard of safety performance for our company envision is “zero accidents”. Our company

is on a unique safety journey with an intensive focus on behavioral aspects of safety, along with continual

improvements in engineering controls and safety management system.

The company’s ongoing programs for continuous reduction of the environmental impact of operations have

further reduced the environmental load of key parameters. These continue to remain well below the statutory

requirements.

Our policy requires conduct of activities in such a way as to take foremost account of health and safety of all

concerned, besides conservation of natural resources and protection of the environment to the extent possible. In

order to achieve the said object, we have upgraded our existing ETP by using latest technologies with a

investment of Rs. 159.00 Lacs.

We are using more than 85 % recycled treated effluents water in fabric processing and other activity and

remaining treated water is used for gardening and plantation. By this way, we continue fulfilling all the

conditions as laid down by the Rajasthan State Pollution Control Board.

Company has installed a three stage R.O. Plant for further treatment water to reduce the fresh water intake. It

also helps in maintaining Zero discharge status.

The company is sending the hazardous waste (ETP Dry Sludge) to M/s Aditya Cement, Chittorgarh & Rajasthan

Waste Management Project, Udaipur where they are using it as a fuel in their Clin. Moreover, the company has

become member of Hazardous Waste Disposal Facility of Udaipur Chamber of Commerce and Industry, Udaipur

(Raj.) for disposing its ETP Sludge. The project work of the facility is almost complete.

The Company is using good quality of Dyes & Chemicals to control the involved water pollution & petro – cock

for Air Pollution.

7. INDUSTRIAL RELATIONS

Industrial Relation remained cordial through out the year. The Human Resources strategy of the company has

been focusing increasingly on the following aspects:

• Improvement in management of shop floor

• Improving competitiveness

• Driving a performance oriented culture

• Training and retraining for multi-skills.

8. CAUTIONARY STATEMENT

Statements in the Management's Discussion & Analysis Report, which seek to describe the Company's

objectives, projections, estimates, expectations or predictions, may be considered to be "forward-looking

statements" within the meaning of applicable securities laws or regulations. Actual results could differ

materially from any expressed or implied. Important factors that could make a difference to the Company's

operations include fabric demand-supply conditions, Processing Charges, type of Grey Fabrics availability for

piece dyed and fiber dyed processing, cyclical demand and pricing of the fabric in market, changes in

Government regulations, tax regimes, economic developments within India besides and such other factors &

wind power generation depends upon wind pressure, speed & direction.


NARESH GATTANI

Bhilwara, MAY 28, 2012 EXECUTIVE DIRECTOR


CORPORATE GOVERNANCE REPORT The Board of Directors of the company continues to lay great emphasis on the board principles of corporate

governance. Our Pursuit towards achieving good governance is an ongoing process. In so far as compliance with

the requirements under Clause 49 of the Stock Exchange Listing Agreement is concerned, the company is in full

compliance with the norms and disclosures that have to be made in corporate governance.

1. A Company’s Philosophy on code of governance: Corporate Governance is an integral part of the philosophy of the Company in its pursuit of excellence,

growth and value creation. The Company recognizes that strong Corporate Governance is indispensable

for safeguarding the interest of shareholders and other stakeholders.

Our philosophy on Corporate Governance is built on rich legacy of fair, transparent and effective

governance which includes strong emphasis on human values, individual dignity and adherence to

honest, ethical and professional conduct.

2. Board of Directors 1. The Company has 11 Directors including Non-Executive Chairman. Of the 10 Directors, 9 are Non-

Executive Directors and 4 are Independent Directors. The composition of the Board is in conformity

with Clause 49 of the Listing Agreements entered into with the Stock Exchanges.

2. None of the Directors on the Board is a Member of more than 10 Committees or Chairman of more

than 5 Committees across all the companies in which he is a Director. Necessary disclosures

regarding Committee positions in other public companies as on March 31, 2012 have been made by

the Directors.

Memberships of the Directors on other Boards/committees, attendance of the Directors in the Board and

AGM held during the year are given hereunder:

S.

No.

Name of the Director Category of

Director

No.of

Board

Meetings

held

No.of

Board

Meetings

attended

No.of

other

Director

Ships

Committe

e

Member-

ship

Committe

e

Chairman-

ship

Last

AGM

Attende

d

(1) (2) (3) (4) (5) (6) (7) (8) (9)

1 Shri R.R.P. Nuwal*

Chairman

Non-executive

Promoter Director

5 3 1 1 1 Yes

2 Shri Naresh Kumar

Gattani **

Whole Time Director

Executive

Promoter Director

5 5 10 3 1 Yes

3 Shri Shanti Lal

Rathi***

Non-executive

Promoter Director

5 5 4 4 0 Yes

4 Shri Shiv K Rathi*** Non-executive

Director

5 5 3 4 1 Yes

5 Smt. Uma Nuwal* Non-executive

Director

5 3 2 3 0 Yes

6 Smt. Prem Devi

Gattani**

Non-executive

Director

5 5 1 1 0 Yes

7 Smt. Ranjana

Gattani**

Non-executive

Director

5 5 10 4 0 Yes

8 Shri Hanuman Kumat Non-executive

Independents

Director

5 5 2 1 1 Yes

9 Shri Sanjay Kumar

Jain

Non-executive

Independent

Director

5 5 1 1 0 Yes

10 Shri Ganpat Singh

Chouhan

Non-executive

Independent

Director

5 5 1 1 0 Yes

11 Shri Manish Inani Non-executive

Independent

Director

5 5 0 1 0 Yes

12 Harshil Nuwal * Non-executive

Director

5 3 6 3 0 Yes


* Shri R.R.P. Nuwal, Shri Harshil Nuwal & Smt. Uma Nuwal are related to each other as Grand

Father, Grand Son & Daughter-in-Law.

** Smt. Prem Devi Gattani, Shri Naresh Kumar Gattani, & Smt. Ranjana Gattani are related to each

other as Mother, Son & Daughter-in-Law.

*** Shri S.L. Rathi & Shri Shiv K Rathi are related each other as Brother.

Meeting & Attendance

During the year ended March 31, 2012, Five Meetings of the Board of Directors were held on the

following dates:

(i) 30th May 2011 (ii) 30th July 2011 (iii) 29th October 2011 (iv) 28th Jan. 2012 (v) 16th March 2012

Previous Annual General Meeting (AGM) was held on 2nd July 2011

Director who relinquished/ceased office during the year is Smt. Uma Nuwal.

Board Meetings & Attendance S.

No.

Date of

Board

Meeting

Board’s

Strength

No. of

Directors

Present

1 30.05.2011 12 11

2 30.07.2011 12 12

3. 29.10.2011 12 12

4 28.01.2012 11 9

5 16.03.2012 11 9

Board’s Processes It has always been the company’s policy and practice that apart from matters requiring the Board’s

approval by statute, all major decisions including quarterly results of the Company as a whole and of

financial restructuring, capital expenditure proposals, sale and acquisition of material nature of assets,

mortgages, guarantees etc., are regularly placed before the Board. This is in addition to information

with regard to actual operations, major litigation feed back reports and minutes of all Committee

Meetings.

3. Disclosure

During the year material transactions with the Directors or the Management, their subsidiaries or

relatives etc. have taken place, which have no potential conflict with the interest of the company.

4. Compliance There has been no non-compliance of the provisions/requirements of Stock Exchanges. No

penalties/strictures have been imposed on the Company by the Stock Exchange or any other statutory

authority on any matter relating to Capital Market.

5. Means of Communication

Quarterly, Half-Yearly and Annual Results of the Company are published in leading National Daily

Newspapers.

6. Code of Conduct

The company has adopted a Code of Conduct specifically for the members of the Board of Directors

and/or members of the senior Management of the Company, which sets out as follows:


• To act in the best interest of, and fulfill fiduciary obligations to the Company; act honestly,

fairly, ethically and with integrity, conduct themselves in professional, courteous and

respectful manner and not taken improper advantage of the position of Director;

• To comply with all applicable laws, rules and regulations;

• To act in good faith, responsibly, with due care, competence and diligence, without allowing

their independent judgment to be subordinated;

• To act in a manner to enhance and maintain the reputation of the company;

• To disclose any personal interest that they may have regarding any matters that may come

before the Board and abstain from discussion, voting or otherwise influencing decision or any

matter in which the concerned Director has or may have such interest;

• To respect the confidentiality of information relating to the affairs of the Company acquired in

the course of their services as Directors, while continuing as such a Director and even after

ceasing to be such a Director, for a reasonable period of say two years, except when authorized

or legally required to disclose such information;

• Restrain from using the company’s property for personal gain;

• Avoid using any information or opportunity received in the capacity as Directors for personal

gain, or in a manner that would be detrimental to the Company’s interest;

• Abstain from discussion, voting or otherwise influencing decision or any matters that may come

before the Board in which they may have conflict or potential conflict of interest.

• Not to use confidential information acquired in the course of their service as Directors for their

personal advantage or for the advantage of any other entity in which they have a direct or

indirect interest, or where they occupy a position of board or executive responsibility with

influence over their decisions;

• Help create and maintain a culture of high ethical standards and commitment to compliance.

A Director who has concerns regarding compliance with this code should raise such concerns with

the Chairman of the Board who will deal with the same. No waiver or suspension of any or all

requirements of this Policy, or any modifications of this policy, shall be valid unless approved by the

Board and formally minute with reasons for such action.

7. Our Principles

Our code of business principles describes the operational standards that everyone at Sona

Processors (India) Ltd follows.

8. Code of Business Principles

Standard of Conduct

Company conduct its operations with honesty, integrity and openness, and with respect for the

human rights and interests of our employees. We shall similarly respect the legitimate interest of

those with whom we have relationships.


Obeying the Law

Company and its employees are required to comply with the laws and regulations of the country.

Employees

Company is committed to diversity in a working environment where there is mutual trust and

respect where everyone feels responsibility for the performance of reputation of our company. We

will recruit, employ and promote employees on the sole basis of the qualifications and abilities

needed for the work to be performed. We are committed to safe and healthy working conditions for

all employees. We will not use any form of forced, compulsory or child labour. We are committed to

working with employees to develop and enhance each individual’s skills and capabilities. We

respect the dignity of the individual and the right of employees to freedom of association. We will

maintain good communication with employees through company based information and

consultation procedures.

Consumers

Company is committed to providing superior quality services which consistently offer value in

terms of price and quality, and which are safe for their intended use.

Shareholders

Company will conduct its operations in accordance with internationally accepted principles of good

corporate governance. We will provide timely, regular and reliable information on our activities,

structure, financial situation and performance to all shareholders.

Business Partners

Company is committed to establishing mutually beneficial relations with its suppliers, customers

and business partners. In our business dealings we expect our partners to adhere to business

principles consistent with our own.

Community Involvement

Company strives to be a trusted corporate citizen and, as an integral part of society, to fulfill our

responsibilities to the societies and communities in which we operate.

Public Activities

Company is encouraged to promote and defend their legitimate business interests. Sona Processors

(India) Ltd. will co-operate with governments and other organizations, both directly and through

bodies such as trade associations, in the development of proposed legislation and other regulations,

which may affect legitimate business interests. Sona Processors (India) Ltd neither support

political parties nor contributes to the funds of groups whose activities are calculated to promote

party interest.

The Environment

Company is committed to making continuous improvement in the management of environmental

impact and to the longer-term goal of developing a sustainable business. Sona Processors (India)

Ltd will work in partnership with others to promote environmental care, increase understanding of

environmental issues and disseminate good practice


Innovation

In our scientific innovation to meet customer needs we will respect the concerns of our customers

and of society. We will work in the basis of sound science, applying rigorous standards of product

safety.

Competition

Company believes in vigorous yet fair competition and supports and the development of appropriate

competition laws. Sona Processors (India) Ltd and employees will conduct their operations in

accordance with the principles of fair competition and all applicable regulations.

Business Integrity

Company does not give or receive, whether directly or indirectly, bribes or other improper

advantages for business or financial gain. No employee may offer, give or receive any gift or

payment, which is or may be construed as being, a bribe. Any demand for, or offer of, a bribe must

be rejected immediately and reported to management. Sona Processors (India) Ltd accounting

records and supporting documents must accurately describe and refer the nature of the underlying

transactions. No undisclosed or unrecorded account, fund or assets will be established or

maintained.

Conflicts of Interests

All Company’s employees are expected to avoid personal activities and financial interest, which

could conflict with their responsibilities to the Company. Sona Processors (India) Ltd employees

must not seek gain for themselves or otherwise through misuse of their position.

Compliance – Monitoring – Reporting

Compliance with these principles is an essential element in our business success. The Sona

Processors (India) Ltd Board is responsible for ensuring these principles are communicated to, and

understood and observed by, all employees. Day-to-day responsibility is delegated to the senior

management. They are responsible for implementing these principles, if necessary through more

detailed guidance tailored to local needs. Assurance of compliance is given and monitored each

year. Compliance with the code is subject to review by the board supported by the audit committee

of the board and the corporate risk committee. Any breaches of the code must be reported in

accordance with the procedures specified by the Management. The Board of Sona Processors

(India) Ltd will not criticize management for any loss of business resulting from adherence to these

principles and other mandatory policies and instructions. The board expects employees to bring to

their attention, or to that of senior management any breach or suspected breach of these principles.

Provision has been made for employees to be able to report in confidence and no employee will

suffer as a consequence of doing so.

9. Committees of the Board

The Board of Directors has constituted six Committees of the Board – the Management Committee,

Banking & Finance Committee, Audit Committee, Share Transfer Committee, Investors’ Grievance

Committee & Remuneration Committee.


i) Management Committee

The Company has a Management Committee of Directors comprising of four Directors under the

Chairmanship of, and Directors Shri Naresh Kumar Gattani, Shri Shanti lal Rathi, Shri Shiv K.

Rathi & Smt. Ranjana Gattani to look after the financial, expansion, modernization & new research

and development matters specified and/delegated appropriately by Board from time to time.

During the year the committee met on 28.10.2011 & 15.03.2012 and attended by all the members.

II) Banking & Finance Committee

The Company has a Banking & Finance Committee to decide and oversee matters related to

Banking operations. The committee enjoys the delegations of Board in matters relating to the

Borrowings. The terms of reference, inter alia, include review of capital structure, distribution

policies, financial policies, risk management and insurance related policies.

The Committee comprises of Shri Naresh Kumar Gattani, Shri Harshil Nuwal, Shri Shanti lal

Rathi & Shri Shiv K Rathi. The Chairman is Shri Naresh Kumar Gattani. During the year two

meeting of the committee held on 29.07.2011 & 27.01.2012.

III) Audit Committee

The Audit Committee was constituted in August 2006. It now consists of Six members including

four independent Non-Executive Directors. The Members of the committee are well versed in

finance matters, accounts, company law and general business practices.

The Composition of the Audit Committee is as under :

A) Shri Hanuman Kumat, Chairman

B) Shri Shanti lal Rathi

C) Shri Shiv K. Rathi

D) Shri Ganpat Singh Chouhan

E) Shri Harshil Nuwal

F) Shri Sanjay Kumar Jain

G) Shri Manish Inani

The terms of reference of the Audit Committee include :

a) To review financial statement and pre-publication announcement before submission to the

Board.

b) To ensure compliance of internal control system and action taken on internal Audit reports.

c) To apprise the Board on the impact of accounting policies, accounting standards and legislation.

d) To hold periodical discussion with statutory auditors on the scope and content of the audit.

e) To review the Company’s financial and risk management policies.

During the financial year 2011.12, four Audit Committee Meetings were held on May 29, July 29,

October 28, 2011 and January 27, 2012. The Cost Auditor has also attended the meetings.

iv) Share Transfer Committee

The Share Transfer Committee of Directors entitled as “Share Allotment and Transfer Committee”

to look into various matters pertaining to share transfers, duplicate share certificates and related

matters. The Committee meets as per needs and dispose of the matters referred to it.


The members of the Committee are Shri Harshil Nuwal, Shri Naresh Kumar Gattani, & Smt.

Ranjana Gattani. The Chairman is Shri Naresh Kumar Gattani and the Quorum is any two

members present.

During the year Share Transfer Committee meeting held on 27th September 2011 & 30th March

2012.

v) Investors Grievances Committee

The Investors Grievances Committee was formed to preserve redress of shareholders’ and other

investors’ grievances. The Investors Grievances Committee comprises of 3 directors being non-

executive directors. The members of the Committee are Shri Shiv Prasad K Rathi, Smt. Prem Devi

Gattani & Smt. Ranjana Gattani.

Shri Shiv Prasad K Rathi, a non-executive Director has been appointed as the Chairman of the

Committee. The quorum for the functioning of the Committee is any two directors present. The

company attends the Investors Grievances/Correspondences expeditiously and usually reply is sent

within a period of 10 days of receipt, except in the cases that are constrained by dispute or legal

impediment.

A meeting of the Investors Grievances Committee was held on 27th Sept. 2011 & 30th March 2012.

There has been no complaint that has not been resolved to the satisfaction of the shareholders nor

are there any pending transaction.

vi. Remuneration Committee

i) The Company has a Remuneration Committee of Directors comprising of Three Directors under

the Chairmanship of Shri R.R.P. Nuwal, and Directors Smt. Ranjana Gattani, & Shri Shanti lal

Rathi.

ii) The broad terms of reference of the Remuneration Committee are as under:

a) To approve the Annual Remuneration Plan of the Company;

b) To approve the remuneration and commission/incentive remuneration payable to the

Executive Director for each financial year;

c) Such other matters as the Board may from time to time request the Remuneration Committee

to examine and recommend/approve.

Remuneration to Directors

The appointment of Executive Director is governed by resolutions passed by the Board of Directors

and shareholders of the Company, which covers the terms of such appointment, read with the

service rules of the Company. Payment of remuneration to Executive Director is governed by the

respective Agreements executed between them and the Company. Remuneration paid to Executive

Director is recommended by the Remuneration Committee, approved by the Board and is within

the limits set by the shareholders of the Annual General Meetings. The remuneration package of

Executive Director comprises of salary, perquisites and allowances and contributions to Provident

Fund and other Funds as approved by the shareholders of the Annual General Meetings. Annual

increments are linked to performance and are checked by Remuneration Committee and

recommended to the Board for approval thereof.

The remuneration policy is directed towards rewarding performance, based on review of

achievements, it is aimed at attracting and retaining high caliber talent.

Presently the company does not have a scheme for grant of stock options or performance - linked

incentives for its Directors.


10. Shri S.K. Soni is the Compliance Officer of the Company.

11. Details of Remuneration paid to the Directors during the Financial Year Ended March 31, 2012:

S.

No.

Name of the Director Salary Perquisites &

other benefits

Total

1 Shri Naresh Kumar Gattani 561000 212792 773792

Other Directors of the company have not been paid any remuneration & sitting fee.

12. Means of Communication

The quarterly results of the Company are published in regional language i.e. Hindi newspapers.

13. Details of last three Annual General Meetings:

Year Location Date Time

2011

2010

2009

12th KM Stone, Chittorgarh Road,

Guwardi, Bhilwara 311 025 (Raj.)

- do -

-do-

02.07.2011

02.07.2010

30.07.2009

10.00 A.M.

10.00 A.M

10.00 A.M.

14. Extra Ordinary General Meeting

During the year No Extra Ordinary General meeting was held.

15. Disclosures

i. There has been no non-compliance penalties/strictures imposed on the Company by the Stock

Exchange(s) or SEBI or any other statutory authority, on any matter related to capital marketing,

during the last three years.

ii. There are significant related party transactions, which may have conflict with the interest of the

Company.

iii. There may be pecuniary relationship otherwise as stated at point no. B. Page 40 among directors

non-executive independent directors in relation to transaction with the company.

16. Additional Information for Shareholders

1. Annual General Meeting:

Date 28th June 2012

Time 10.00 A.M.

Venue Mills at 12th KM Stone, Chittorgarh Road, Guwardi,

Bhilwara-311025

Book Closure Date From 13th June 2012 to 28th June 2012, both days

inclusive.


Financial Calendar

Sona Processors (India) Ltd follows the financial year April to March. The Unaudited Financial

Results for the first three quarters and the Audited Financial Results for the year ended March 31,

2012 were taken on record and approved by the Board in its meetings held on following dates:

Quarter Ended : Date of Board Meetings

June 2011

September 2011

December 2011

30.07.2011

29.10.2011

28.01.2012

Year ended

March 31, 2012 28.05.2012

2. Registrars and Share Transfer Agent (Physical Segments only)

The company has no Registrar or Share Transfer Agent and it is doing the work in-house.

3. Investors Correspondence

All queries of investors regarding the Company’s shares in physical form may be sent at the

following address:

Sona Processors (India) Limited, Shop No.2, Sangam Towers, Nr. Old RTO, Gandhi Nagar, Pur

Road, Bhilwara 311 001 (Raj.) Phone + 91 1482 - 246530

Fax + 91 1482 249044, E-Mail: [email protected]

4. Listing on Stock Exchanges

*Delisting application of Company is pending since Nov., 2001.

5. Shareholding Pattern of the Company as on 31st March, 2012

Category No. of shares held %age of shareholding

A.PROMOTOR’S HOLDING

a. NRI Promoters (Including OCBs)

b. Indian promoters, relatives and

associates

0

3855900

0

76.33

Sub Total 3855900 76.33

B.NON-PROMOTERS HOLDING

Institutional Investors:-

a. Banks & Financial Institutions

NIL

NIL

Sub Total NIL NIL

Others:

a. Corporate Bodies

b. Indian Public

517700

677800

10.25

13.42

Sub Total 1195500 23.67

GRAND TOTAL 5051400 100.00

Stock Exchange Code

Jaipur Stock Exchange Limited 998

The Delhi Stock Exchange Association Limited * 9343/NR


6. Distribution of Shareholding as on March 31, 2012

Range Shareholders Shares

No. of shares Number % to total

holders

Number % to total

holders

Upto - 500

501 - 1000

1001 - 2000

2001 - 4000

4001 - 5000

5001 - 10000

10001 - and above

836

26

8

2

2

8

25

92.17

2.87

0.88

0.22

0.22

0.88

2.76

417600

22600

12800

7010

10000

68200

4513190

8.27

0.45

0.25

0.14

0.20

1.35

89.34

Total 907 100 5051400 100.00

7. Share Transfer System

Share transfers in physical form are registered by the compliance Officers and returned to the

respective transferees within a period ranging from fifteen days to one month, provided the

documents lodged with the Company are clear in all respect.

17. Market Price Data (Rs.)

During the year no transaction has been reported through above named Stock Exchanges and

accordingly the high and low prices of the shares are not known.

18. Plant Location of the Company

12th K.M. Stone, Chittorgarh Road, Villa. Guwardi, Bhilwara 311 025, Tel. 91 - 1482 - 249040 to 249043, Fax 91-1482 - 249044

19. Unclaimed Dividends:

Pursuant to Section 205A of the Companies Act, 1956 there was no unclaimed dividend since the

company has not declared any dividend since inception.

20. Bank Details:

Share Holders holding shares in physical form are requested to notify / send the following to the

company to facilitate better services:

a) Any change in their address / bank details

b) Particulars of their Bank account.

21. Nomination Facility:

The companies Act, 1956 provides facility for making nominations by shareholders in respect of their

holdings of shares and several shareholders have opted to avail of such facility. However, a large

number of shareholders are yet to make nominations in respect of their holdings in physical form. Such

nomination generally facilitate transmission of shares from the deceased shareholder to his/her

nominee without having to go through the time consuming and cumbersome process of obtaining

Succession Certificate/Probate of the Will. It would, therefore, be in the best interest of the

shareholders holding shares in physical form as sole registered holders to make such nominations

without any delay.

Share holders holding shares in physical form and desirous of making a nomination in respect of their

shareholding in the company, as permitted under Section 109A of the Companies Act, 1956 are

requested to submit to the Company the prescribed Form 2B for this purpose.


. DECLARATION

As provided under Clause 49 of the Listing Agreement entered into with the Stock Exchange(s), it is hereby

confirmed that all the Board Members and Senior Management Personnel of Sona Processors (India) Limited

have affirmed the compliance with the Code of Conduct for the year ended March 31, 2012.

NARESH GATTANI Bhilwara, May 28, 2012 EXECUTIVE DIRECTOR

CERTIFICATE OF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

To,

THE BOARD OF DIRECTORS

SONA PROCESSORS (INDIA) LTD.

We have reviewed the financial statements, read with the cash flow statement of

SONA PROCESSORS (INDIA) LTD. for the year ended March 31, 2012 and that to the best of our knowledge

and belief, hereby certify;

1. These statements do not contain any materially untrue statement or omit any material fact or contain

statements that may be misleading;

3. These statements together present a true and fair view of the Company’s affairs and are in compliance

with current accounting standards, applicable laws and regulations.

4. To the best of our knowledge and belief, no transactions entered into by the company during the year

ended March 31, 2012 which are fraudulent, illegal or in violative of the Company’s code of conduct.

5. We accept responsibility for establishing and maintaining internal controls for financial reporting and

we have evaluated the effectiveness of internal control systems of the company pertaining to financial

reporting. We have disclosed to Auditors and the Audit Committee, deficiencies in the design or

operation of such internal controls, if any, of which we are aware and steps taken or proposed to be

taken for rectifying these deficiencies.

6. We further certify that we have indicated to the auditors and the Audit Committee:

a. Significant changes in internal control system during the year;

b. Significant changes in accounting policies during the year and that the same have been disclosed in

the notes to the financial statements;

c. Instances of significant fraud, of which we have become aware, involving Management or an

employee having a significant role in the Company’s internal control system over financial reporting.

NARESH GATTANI S.K. SONI

Bhilwara, May 28, 2012 EXECUTIVE DIRECTOR CHIEF FINANCE OFFICER


CERTIFICATE ON COMPLIANCE WITH CLAUSE 49 OF THE LISTING AGREEMENT OF

SONA PROCESSORS (INDIA) LIMITED

To,

THE MEMBERS OF


We have examined the compliance of conditions of Corporate Governance by Sona Processors (India) Limited

(the Company) for the year ended March 31,2012 as stipulated in Clause 49 of the Listing Agreement of the said

Company with the Stock Exchange in India.

The compliance of condition of corporate Governance is the responsibility of the company’s Management. Our

examination has been carried out in accordance with the Guidance Note on Certification of corporate

Governance (as stipulated in Clause 49 of the listing Agreement ), issued by the institute of Chartered

Accountants of India and was limited to procedures and implementations 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 statement of the Company.

In our opinion and to the best of our information and explanations given to us, we certify that the Company has

complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the

efficiency or effectiveness with which the Management has conduct the affairs of the Company.

For S. Dad & Co.

Chartered Accountants

(Registration No. – 007534C)

SANJAY DAD

Partner

Bhilwara, May 28, 2012 Membership No. 076334


AUDITORS' REPORT TO THE MEMBERS OF


1. We have audited the attached Balance Sheet of Sona Processors (India) Limited, as at

March 31, 2012 and the statement of Profit and Loss and Cash Flow Statement for the year ended on that

date annexed thereto, which we have singed under reference to this report. 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 (as amended) (“the order”) issued by the

Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we

enclose in the Annexure a statements 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:

i. 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;

ii. In our opinion, proper books of account as required by law have been kept by the Company, so far as

appears from our examination of those books;

iii. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are

in agreement with the books of account;

iv. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by

this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the

Companies Act, 1956.

v. On the basis of the written representations received from the directors, as on March 31, 2012, and

taken on record by the Board of Directors, we report that none of the directors is disqualified as on

March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274

of the Companies Act, 1956.

vi. In our opinion and to the best of our information and according to the explanations given to us, the said

accounts give the information required by the Companies Act, 1956, in the manner so required and give

a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2012.

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date.

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For S. Dad & Co. Chartered Accountant

(Registration No. 007534C)

SANJAY DAD

Partner



ANNEXURE TO THE AUDITOR’S REPORT (Referred to in paragraph 3 of our report of even date)

(i) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative

details and situation of fixed assets.

(b) The Company has a program for physical verification on a rotational basis, which, in our opinion,

is reasonable having regard to the size of the Company and the nature of its business. Accordingly,

fixed assets have been physically verified by the management during the year and no material

discrepancies were identified on such verification.

(c) During the year, there was no substantial disposal of fixed assets and the going concern status of

the company is not affected.

(ii) In respect of its inventories:

(a) The management has conducted physical verification of inventory at reasonable intervals during

the year.

(b) The procedures of physical verification of inventory followed by the management are reasonable

and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventory and no material discrepancies were

noticed on physical verification as compared to book records.

(iii) In respect of the loans, secured or unsecured, granted or taken by the Company to / from Companies, firms

or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

(a) The Company has not granted any loans.

(b) The Company has taken Rs.75.00 lacs loan during the year from Three Company, or other

parties covered in the Register maintained under Section 301 of the Companies Act, 1956. In our

opinion and according to the information and explanations given to us, the rate of interest, where

ever applicable and other terms and conditions are not prima facia prejudicial to the interest of the

Company.

(c) In our opinion and according to the information and explanations given to us, the rate of interest,

where ever applicable and other terms and conditions, are not prima facia prejudicial to the interest

of the Company.

(d) The principal amounts, are repayable on demand and there is no repayment schedule. The

interest, where applicable, is payable on demand.

(e) In respect of the said loans, the same are repayable on demand and therefore the question of

overdue amounts does not arise. In respect of interest, where applicable, there are no overdue

amounts.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate

internal control system commensurate with the size of the Company and the nature of its business,

for the purchase of inventory and fixed assets and for the sale of goods and services. During the

course of our audit, no major weakness has been noticed in the internal control system in respect of

these areas.


(v) (a) According to the information and explanations provided by the management, we are of the opinion

that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be

entered into the register maintained under Section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in

pursuance of such contracts or arrangements exceeding value of Rupees five lacs have been entered into

during the financial year at prices which are reasonable having regard to the prevailing market prices at

the relevant time.

(vi) The Company has not accepted any deposits from the public to which the directives issued by the Reserve

Bank of India and the provisions of Sections 58A, 58AA or any other relevant provisions of the Act and

the rules framed there under, are not applicable.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its

business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the Companies

(Cost accounting records) Rules, 2011 prescribed by the Central Government for the maintenance of cost

records 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 determine that they are accurate.

(ix) In respect of statutory dues:

(a) The Company is regular in depositing with appropriate authorities undisputed statutory dues

including provident fund, investor education and protection fund, employees’ state insurance, income-tax,

vat, wealth-tax, service tax, customs duty, excise duty, cess and other statutory dues applicable to it.

According to the information and explanations given to us, no undisputed amounts in respect of above

were in arrears as at 31st March, 2012 for a period of more than six months from the date becoming

payable.

(b) According to the records of the Company, the disputed statutory dues aggregating Rs. 130.24 lacs that

have not been deposits on account of disputed matters pending before appropriate authorities are as

follows:

Name Of The Statute Nature Of

Dues

Amount

(Rs.in lacs)

Forum Where Dispute is

Pending

Related Period

Textile Committee Act

1963

Textile Cass 34.64 H’ble High Court of Mumbai 1999 To 2004

Entry of Goods into Local

Areas Act.

Entry Tax 83.45 Hon’ ble High Court of

Rajasthan

2006-07, to 2011-12

Income Tax Act, 1961 Income Tax 12.15 CIT (Appeal)) Ajmer 2008 - 2009

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash

losses in the current and immediately preceding financial year.

(xi) Based on the information and explanations given by the management, we are of the opinion that the

Company has not defaulted in repayment of dues to bank.

(xii) According to the information and explanations given to us and based on the documents and records

produced to us, the Company has not granted loans and advances on the basis of security by way of pledge

of shares, debentures and other securities.


(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the

provisions of clause 4 (xiii) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not

applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing

in or trading in shares, securities, debentures and other investments. The Company has invested surplus

funds in mutual funds. According to the information and explanations given to us proper records have

been maintained of the transactions and contracts and timely entries have been made therein. The

mutual funds have been held by the Company, in its own name.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for

loans taken by others from bank or financial institutions.

(xvi) In our opinion, the Company has obtained new term loans and that were applied for the purposes for which

these were raised.

(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 funds raised on short-term basis have not been used for long-term

investment.

(xviii)The company has not made any preferential allotment of shares to parties or companies covered in the

register maintained under Section 301 of the Companies Act, 1956.

(xix) The Companies has not issued any debentures, consequently the provisions of clause 4(xix) of the

Companies (Auditor’s report) Order, 2003 (as amended) are not applicable to the company.

(xx) The Company has not raised any money by way of public issue during the year.

(xxi) To the best of our knowledge and according to the information and explanations given to us, there

were no frauds on or by the Company has been noticed or reported during the year.

For S. Dad & Co.


(Reg. No.- 007534C)

SANJAY DAD

Partner



Particulars Note As at

31st March, 2012

As at

31st March, 2011

EQUITY AND LIABILITIES

Shareholder's Funds

Share Capital 2 505.14 505.14

Reserves and Surplus 3 631.50 562.18

1136.64 1067.32

Non-Current Liabilities

Long-term borrowings 4 716.64 416.19

Deferred tax liabilities (Net) 5 124.30 114.62

Other Long term liabilities 6 70.00 90.00

Long term provisions 7 14.36 12.52

925.30 633.33

Current Liabilities

Short-term borrowings 8 567.48 595.56

Trade payables 9 279.14 188.10

Other current liabilities 10 249.02 139.60

1095.64 923.26

TOTAL 3157.58 2623.91

ASSETS

Non-Current Assets

Fixed assets

Tangible assets 11 1404.65 1186.99

Capital work-in-progress 12 105.05 3.43

Long term loans and advances 13 54.37 53.49

1564.07 1243.91

Current assets

Current investments 14 1.00 1.00

Inventories 15 484.96 482.43

Trade receivables 16 794.61 516.15

Cash and cash equivalents 17 81.52 19.14

Short-term loans and advances 18 231.42 361.28

1593.51 1380.00

TOTAL 3157.58 2623.91

Significant Accounting Policies. The accompaying 1

The accompaying notes are integral part of the

financial statements

As per our Report of even date

For S. Dad & Co.


(Reg. No.-07534C)

Chairman Executive Director

SANJAY DAD

Partner

M.No.076334 SHIV K. RATHI SHANTI LAL RATHI

Place:-Bhilwara

Date:- 28th May 2012

Director Director

Balance Sheet as at 31st March, 2012 (Rs. in Lacs)

FOR AND ON BEHALF OF THE BOARD

RRP NUWAL NARESH GATTANI


(Rs. in Lacs)

Particulars Note For the year ended

31st March, 2012

For the year ended

31st March, 2011

INCOME :

Revenue from operations 19 3866.81 3422.84

Other Income 20 9.10 10.75

TOTAL 3875.91 3433.59

Operating Expenditure :

Cost of materials consumed 21 2101.18 1878.38

Changes in inventories of finished goods & work-

in-progress 22 (-) 44.06 (-) 94.25

Employee benefit expenses 23 484.46 419.87

Financial costs 24 132.88 65.77

Depreciation 11 181.58 156.02

Other expenses 25 940.87 910.32

TOTAL 3796.91 3336.11

Profit before exceptional and extraordinary items

and tax 79.00 97.48

Exceptional & Extraordinary Items 0.00 0.00

Profit Before Tax 79.00 97.48

Tax expense:

Current tax (MAT) 15.05 18.07

Deferred tax 9.68 15.89

MAT credit entitlements 15.05 17.28

Profit After Tax 69.32 80.80

Earning per equity share of Rs 10/- each

Basic (in Rs.) 1.37 1.60

Significent Accounting Policies. 1

The accompaying notes are an integral part

of the financial statements

As per our Report of even date attached

FOR S. Dad & CO.


(Reg. No.-07534C)

RRP NUWAL NARESH GATTANI

Chairman Executive Director

SANJAY DAD

Partner

M.No.076334 SHIV K. RATHI SHANTI LAL RATHI

Place:-Bhilwara

Date:- 28th May 2012 Director Director

Statement of Profit and Loss for the year ended 31st March, 2012

FOR AND ON BEHALF OF THE BOARD


CASH FLOW STATEMENT (Rs.in Lacs)

A) CASH FLOW FROM OPERATING ACTIVITES 2011-2012 2010-2011 Net Profit before tax 79.00 97.48

Adjustment for :

Depreciation 181.58 156.02

Financial Cost 132.88 61.74

Other Income - 9.10 305.36 - 7.76 210.00

Operating Profit before working capital change 384.36 307.48

Adjustment for :

(Increase)/Decrease in Trade & other receivable - 149.48 -284.90

(Increase)/Decrease in inventories - 002.53 -165.92

Increase in trade & Other Payable 133.88 -18.13 72.63 -378.19

Cash Generated from Operation 366.23 -70.71

Less : Financial Cost 132.88 61.74

Less : Tax Paid 000.00 132.38 18.07 79.81

Net Cash From Operating Activities (A) -233.35 -150.52 B) CASH FLOW FROM INVESTING ACITIVITY Increase in Fixed Assets -500.86 - 372.57

Less: Other Income 9.10 7.76

Net cash used in Investing Activity (B) -491.76 - 364.81

C) CASH FLOW FROM FINANCING ACTIVITES (Increase)/Decrease in Long term loan 282.29 - 325.14

(Increase) / Decrease in Short term loan 38.50 - 202.18

Net Cash used in financing Activities(C) 320.79 527.32

Net change in Cash & Cash Equivalents (A+B+C) 62.38 11.99

Cash & Cash Equivalents - Opening Balance 19.14 7.15

Cash & Cash Equivalents - Closing Balance 81.52 19.14

Notes: 1. The Cash Flow Statements has been prepared under the Indirect method as set out in Accounting Standard-3

on Cash Flow Statements issued by The Institute of Chartered Accountants of India.

2. Previous year’s figures have been regrouped where necessary to confirm to the current year’s classification. 3. Figures in brackets represents cash outflow


RRP NUWAL SHANTI LAL RATHI NARESH GATTANI SHIV K. RATHI

Chairman Director Executive Director Director

AUDITORS CERTIFICATE

We have examined the above Cash Flow Statement of SONA PROCESSORS (INDIA) LTD. for the year ended March 31,

2012. The statement has been prepared in accordance with the requirement of Clause 32 of listing agreements with

various Stock Exchanges and in agreement with the corresponding statement of Profit & Loss Account and Balance

Sheet of the Company covered by our report of 28th May, 2012 to the Members of the Company.

For S. Dad & Co.


(Reg. No. – 007534C)

SANJAY DAD

Partner

Bhilwara, May 28, 2012 Membership No.076334


SIGNIFICANT ACCOUNTING POLICIES:

Basis of Preparation of Financial Statement:

The financial statements are prepared at historical cost convention on accrual basis of accounting and in accordance with

the standards on accounting notified by the Companies (Accounting Standards) Rules, 2006 and referred to in Section

211(3C) of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per the operating cycle criteria set out in the

Revised Schedule VI to the Companies Act, 1956.

Revenue Recognition :

a) The Processing Charges & Fabric Export is recognized when fabrics dispatched and accounted net of rebate & rate

difference etc. Carbon credit as and when receivable.

b) Insurance Claims is recognized when recoverability is certain. Insurance claims are accounted for in the year of

lodgment to the extent they are measurable and any shortfall/excess is adjusted on receipt of the final claim.

Expenses :

All expenses are recognized on accrual basis.

Use of estimates :

The preparation of financial statements in conformity with generally accepted accounting principles requires

management to make estimates and assumptions that affect the reported amounts of assets and liabilities and

disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and

expenses during the reporting period. Differences between actual results and estimates are recognized in the period in

which the results are known / materialize.

Investments :

Current Investment is stated at cost.

Fixed Assets:

a) All Fixed assets are stated at cost of acquisition or construction less depreciation and impairment loss if any. Cost

comprises the purchase price and any other attributable cost of bringing the assets to its working condition for its

intended use. Borrowing cost relating to funds borrowed for acquisition of qualifying assets for the year upto the

date the assets are put to use is included in cost.

b) The cost of leasehold land is amortized over the period of the lease.

c) Capital works in progress is stated at lost comprising of direct cost and incidental Expenditure. The advance given

for acquiring / construction of fixed assets are shown separately.

Depreciation :

a) The company is continuously providing depreciation on fixed assets by applying W.D.V. Method at the rates

prescribed by schedule XIV of the companies Act.1956, as applied consistently in previous years. Depreciation on

addition/disposal is provided pro-rata with reference to the month of addition/disposal.

b) No amount is written off against leased hold land of the company and same will be charged to profit and loss account

only in the year in which respective lease period expires.

c) The company has claimed higher depreciation on machineries covered under TUFS Scheme as per Income Tax

Provisions while computing income tax liability.

Provisions & Contingent Liability:

Provision is recognized when the Company has a present obligation as a result of past event, it is probable that an

outflow of resources embodying economic benefit will be required to settle the obligation, in respect of which a reliable

estimate can be made. Provisions except in respect of employee benefits are not discounted to its present value and are

determined based on best estimate of the expenditure required to settle the obligation at the Balance Sheet date. These

are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.

Contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is

remote.


Retirement/Post Retirement Benefit :

(a) Short term employee benefit obligations are estimated and provided for.

(b) Defined contribution plans: - Company’s contribution to provident fund, employee state insurance and other funds

are determined under the relevant schemes and/or statute and charged to the statement of Profit & Loss.

Taxes on Income :

Income –tax expenses comprises current tax and deferred tax charge or credit. The current tax is determined as the

amount of tax payable in respect of the estimated taxable income for the year. The deferred tax charge or credit is

recognized using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry

forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Other

deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. Deferred tax

assets/liabilities are reviewed at each Balance Sheet date based on development during the year available case laws, to

reassess realization/ liabilities.

Minimum Alternate Tax (MAT) Credit:

MAT is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay

normal income Tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as

an asset in accordance with the recommendations contained in the Guidance Note issued by the ICAI, the said assets is

created by way of a credit to the Statement of Profit and Loss and is shown as MAT Credit Entitlement. The Company

reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the

extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified

period.

Foreign Currency Transaction :

Foreign currency transactions are accounted for at the exchange rate prevailing at the date of transaction.

Borrowing cost:

Borrowing costs that are attributable to the acquisition / construction of qualifying assets are capitalized as part of cost

of such assets till such time, as the asset is ready for its intended use. All other borrowing costs are recognized as an

expense in the period in which they are incurred. Inventory Valuation :

Inventories are valued at lower of cost and estimated net realizable value after providing for obsolescence. The cost of

inventories is generally arrived at on the following basis:

Raw materials, packing materials, trading

Items and stores and spares: - Cost or market realizable values which is lower.

Finish goods and work-in-progress: - Absorption costing at works cost.

Store and Spares: - Cost or market realizable values which is lower.

Sundry Debtors and Receivables:

Sundry debtors and loans and advances are stated after making adequate provision for doubtful debts/advances.

Impairment of Assets:

The company identifies impair able assets at every Balance sheet for the purpose of arriving at impairment loss there on

being the difference between the book value and recoverable value of relevant assets. Impairment loss when crystallized

is charged against the revenue of the year.

Earning Per Share:

The basic earning per share is computed by dividing the net profit attributable to the equity shareholders for the year by

the number of equity shares during the reporting year. Diluted EPS is computed by dividing the net profit attributable

to the total equity shares for the year.

Perior Period Items:

Perior period expenses / income are accounted under respective heads material item, if any, are disclosed separately by

may of note.


Notes forming part of the Financial Statements

Note 2 Share Capital (Rs. in Lacs)

Particulars

Number of

shares Rs.

Number of

shares Rs.

Authorised

Equity Shares of Rs. 10/- each 5,500,000 550.00 5,500,000 550.00

Issued

Equity Shares of Rs. 10/- each 5051400 505.14 5051400 505.14

Subscribed & Paid up

Equity Shares of Rs.10 each fully paid-up 5051400 505.14 5051400 505.14

TOTAL 5,051,400 505.14 5,051,400 505.14

Number of % holding Number of % holding of

S.K.S. Securities Pvt. Ltd. 420900 8.33 420900 8.33

Brijeshwari Marketing Pvt. Ltd. 409750 8.11 409750 8.11

Infini Securities Pvt. Ltd. 586700 11.61 586700 11.61

Fate Electronic Pvt. Ltd. 447300 8.85 447300 8.85

Scorpio Agrotech Pvt. Ltd. 491000 9.72 491000 9.72

Shri Nuwal Harshil 352250 6.97 352250 6.97

As at

31st March 2012

As at

31st March 2011

Balance at the beging and end of the year 15.00 15.00

547.18 466.38

69.32 80.80

Balance at end of the year 616.50 547.18

631.50 562.18

As at 31st March, 2012 As at 31st March, 2011

Shareholder holding more than 5% Equity shares of the Company :

TOTAL

Balance at the beginning of the year

Add: Profit during the year

Name of Shareholder As at 31st March, 2012 As at 31st March, 2011

Particulars

Surplus

Note 3 Reserves and Surplus

General Reserve



As at

31st March 2012

As at

31st March 2011

611.23 372.38

30.41 17.31

75.00 26.50

716.64 416.19

As at

31st March 2012

As at

31st March 2011

Balance at beginning of the year 114.62 97.34

Add :- Provision during the year 9.68 17.28

Balance at end of the year 124.30 114.62

Defferd Tax Liability on account of timing difference of Depreciation of Rs. 515.46 Lacs (Previous year

Rs. 432.54 Lacs) less brought forward losses and available MAT credit

As at

31st March 2012

As at

31st March 2011

70.00 90.00

As at

31st March 2012

As at

31st March 2011

Gratuity 11.32 11.39

Leave Encashment 3.04 1.13

14.36 12.52 TOTAL

Note 7 Long-term Provisions

Provision for employee benefits (unfunded)

Particulars

Note 6 Other Long-term Liablities

Particulars

Deffered Trade Payables

Particulars

maturing on 01/10/2016, by repayment of Rs. 16.60 Lacs.

2. Vehicle taken from HDFC Bank including current maturity is secured by hypothecation of vehicles having

repayment Rs. 2.88 Lacs P.M. over the term of loan ranging from 1 to 3 years.

Note 5 Deferred tax liabilities

TOTAL

Notes :-1. Term Loans :-Including current maturities from State Bank of Bikaner & Jaipur are secured against all

movable and immovable properties of the company by way of First Charges created in favour of companys'

Banker & personally guaranteed by Four Directors.

As per terms of Sanction.Term Loan of Rs. 373.97 lacs bearing interest rate @ 13% P.A. repayable

in 22 equal quaterly installment maturing on 01/04/2018 by repayment of Rs. 17.60Lacs & Term loan Rs.

237.26 Lacs bearing interest rate @ 13.5% P.A.repayable in 15 equal Quarterly installment

3. Unsecured Loan from Body Corporate payable after One year or so.

from State bank of Bikaner & Jaipur

Vehicle Loan From HDFC Bank Ltd.

Unsecured Loan

Body Corporates

Note 4 Long-term borrowings (Rs. in Lacs)

Particulars

Secured

Term loans



As at

31st March 2012

As at

31st March 2011

567.48 595.56

567.48 595.56

future stocks of raw meterials semi finished,finished goods (to the extent of processing cost), stores

and spares parts,book debts, loans and advances etc.

As at

31st March 2012

As at

31st March 2011

279.14 188.10

Note 10 Other current liabilities

As at

31st March 2012

As at

31st March 2011

70.40 17.60

29.14 15.36

7.87 7.65

58.44 17.25

8.17 4.63

56.64 54.19

11.02 1.38 7.34 21.54

249.02 139.60

Contractually reimbursable expenses

Advances from customers

TOTAL

Particulars

Interest accrued but not due on borrowings

Creditors for capital Expenditure

Other payables

Statutory remittances

From State Bank of Bikaner & Jaipur

from HDFC Bank Ltd.

Particulars

Others due within normal operating cycle

from State Bank of Bikaner & Jaipur

Term Loan With Current maturity

TOTAL

Working Capital Facilities from State Bank of bikaner & Jaipur are secured by hypothecation of present and

Note 9 Trade payables

Note 8 Short-term borrowings (Rs.In lacs)

Particulars

Secured Loans

Loans repayable on demand


Note 11 Fixed Assets

GROSS BLOCK NET BLOCK

Provided

Particulars As at As at As at For the Written Upto As at As at

01.04.11 Addition Deduction 31.03.12 31.03.11 Year Back 31.03.12 31.03.12 31.03.11

Lease Hold Land 9.76 0.00 0.00 9.76 0.00 0.00 0.00 0.00 9.76 9.76

Free hold land & site

developments 8.67 0.00 0.00 8.67 0.00 0.00 0.00 0.00 8.67 8.67

Factory Building 394.41 17.44 0.00 411.85 237.50 16.72 0.00 254.22 157.63 156.91

Plant & Machinery 1876.50 332.52 36.33 2172.69 951.23 137.01 30.86 1057.38 1115.31 925.27

Office Equipments 18.30 2.00 0.00 20.30 8.56 1.58 0.00 10.14 10.16 9.74

Vehicle 128.45 55.10 12.55 171.00 63.73 23.71 8.70 78.74 92.26 64.72

Furniture & Fixture 12.11 0.34 0.00 12.45 7.70 0.83 0.00 8.53 3.92 4.41

Electrical Installation 34.23 0.00 0.00 34.23 27.86 0.88 0.00 28.74 5.49 6.37

Computers 11.03 1.16 0.00 12.19 9.89 0.85 0.00 10.74 1.45 1.14

TOTAL 2493.46 408.56 48.88 2853.14 1306.47 181.58 39.56 1448.49 1404.65 1186.99

Previous year 2371.23 443.04 320.81 2493.46 1397.36 156.02 246.91 1306.47 1186.99 973.87

Note 12 Capital work in Progress

Particulars

Building

Plant & Machinery

TOTAL

Previous year 3.43 0.00

(Rs. In Lacs)

ACCUMUCATED DEPRECIATION

As at As at

105.05 3.43

31st March,2012 31st March, 2011

91.41 3.43

13.64 0.00


Notes forming part of the financial Statements

(Rs. in Lacs)

Particulars As at

31st March, 2012

As at

31st March, 2011

Security Deposit 15.05 19.07

(Unsecured, Considered goods)

Excise Duty Receivable 39.32 34.42

(Unsecured, Considered goods)

TOTAL 54.37 53.49

Note 14 Current investments

Particulars As at

31st March 2012

As at

31st March 2011

Investment in SBI Mutual Fund 1.00 1.00

Particulars As at

31st March 2012

As at

31st March 2011

Raw Materials

Dyes & Chemicals 140.60 131.62

Coal & Fuel 22.23 69.67

162.83 201.29

Work-in-progress (To the extend of Procesing Cost) 59.52 47.69

Finished goods (To the extend of Procesing Cost) 243.58 211.35

Stores and spares 19.03 22.10

TOTAL 484.96 482.43

Particulars As at

31st March, 2012

As at

31st March, 2011

Trade receivables (outstanding for a period exceeding six months from

the date they were due for payment, Secured, Considered good)

30.37 12.81

Other Trade receivables (Secured, considered good) 764.24 503.34

TOTAL 794.61 516.15

Note 13 Long-term loans and advances

Aggregate amount of quoted investments,Market value Rs. 113400/-(Previous Year Rs. 111500/-)

Note 15 Inventories

Note 16 Trade receivables


Notes forming part of the Financial Statements (Rs. in Lacs)

Particulars As at

31st March, 2012

As at

31st March, 2011

Cash on hand 2.80 13.16

Balances with banks

In current accounts 64.50 0.76

In deposit accounts 14.22 5.22

TOTAL 81.52 19.14

Particulars As at

31st March, 2012

As at

31st March, 2011

(UnSecured, considered good)

Loans and advances to employees 2.02 2.66

Prepaid expenses 2.80 3.66

Balances with government authorities

Minimum Alternate Tax 32.34 17.28

Value Added Tax 69.50 47.52

Service Tax 0.06 0.00

Income Tax 78.90 54.67

Entry Tax 19.91 14.54

Others - Material & Services 25.89 220.95

TOTAL 231.42 361.28

Note 19 Revenue from operations

Particulars

For the year ended

31st March, 2012

For the year ended

31st March, 2011

Sale of products comprises Manufactured goods

Fabric Job Processing 3704.17 3403.30

Fabric Export Sale 149.00 7.02

Wind Power Generation 12.88 11.60

3866.05 3421.92

Other operating revenues

Fabric Waste 0.76 0.92

TOTAL 3,866.81 3,422.84

Note 17 Cash and cash equivalents

Note 18 Short-term loans and advances

Balances with banks include deposits Rs. 14.22 lacs (Prev. year Rs. 5.22 Lacs) with maturity of more than 12

Months.



Note 20 Other income (Rs. in Lacs)

Particulars

For the year ended

31st March, 2012

For the year ended

31st March, 2011Other non-operating income :

Carbon Credit 0.09 3.00

Sale of Scrap 0.80 0.30

TOTAL 9.10 10.75

Note 21 Cost of materials consumed

Particulars

For the year ended

31st March, 2012

For the year ended

31st March, 2011Opening stock 201.29 139.82

Add: Purchases 2,062.72 1,939.85

2,264.01 2,079.67

Less: Closing stock 162.83 201.29

Cost of material consumed 2,101.18 1,878.38

100% Indigenous Material consumed comprises:

Dyes & Chemicals 1,312.74 1,137.68

Synthetic Yarn 80.86 5.06

Coal & Fuel 707.58 735.64

TOTAL 2,101.18 1,878.38

Particulars

For the year ended

31st March, 2012

For the year ended

31st March, 2011

Inventories at the end of the year:

Finished goods 243.58 211.35

Work-in-progress 59.52 47.69

303.10 259.04

Inventories at the beginning of the year:

Finished goods 211.35 122.40

Work-in-progress 47.69 42.39

259.04 164.79

Net increase / (decrease) 44.06 94.25

Note 23 Employee benefits expenses

Particulars

For the year ended

31st March, 2012

For the year ended

31st March, 2011

Salaries and wages etc. 442.68 373.89

Contributions to provident and other funds 19.64 17.67

Staff welfare expenses 22.14 28.31

TOTAL 484.46 419.87

Note 22 Changes in inventories of finished goods & work-in-progress



Note 24 Finance costs (Rs. in Lacs)

Particulars

For the year ended

31st March, 2012

For the year ended

31st March, 2011

Interest expense on:

Borrowings 141.37 67.51

Financing Charges 0.12 0.12

141.49 67.63

Less:- Interest Capitalised 8.61 1.86

TOTAL 132.88 65.77

Note 25 Other expenses

Particulars

For the year ended

31st March, 2012

For the year ended

31st March, 2011

Manufacturing Expenses

Consumption of stores and spare parts 310.03 344.12

Consumption of packing materials 61.70 51.37

Power 301.41 253.10

Effluent Treatment & Water 76.77 77.99

Repairs and maintenance - Buildings 1.45 2.82

Repairs and maintenance - Machinery 27.26 38.69

Weaving Charges 14.63 0.76

793.25 768.85

Establishment Expenses

Rent 9.00 6.90

Insurance 4.83 5.79

Donation 0.69 1.15

Repairs and maintenance - Others 4.23 3.41

Communication 7.18 6.27

Travelling and conveyance 16.15 19.38

Printing and stationery 4.21 3.11

Legal and professional 4.94 5.09

Payments to auditors 0.43 0.38

Loss on fixed assets sold 0.60 2.03

Miscellaneous expenses 4.93 12.24

57.19 65.75

Selling and Distribution Expenses

Freight and forwarding 60.52 44.23

Cash discounts 29.91 31.49

90.43 75.72

TOTAL 940.87 910.32


NOTES TO THE ACCOUNTS: (Rs. in lacs)

1. Contingent Liabilities not acknowledged as debts in respect of: For Year ended For Year ended

31.03.2012 31.03.2011

A) T.C. Cess Pending under appeal 34.64 34.64

B) In respect of income tax matters under Appeal(A.Y. 2009-10) 12.15 00.00

C) Entry Tax Pending under appeal 83.45 68.61

2. Processing Charges are reported net of rates differences/adjustments etc. as and when settled.

3. Certain Debtors, Creditors, Receivables, and Unsecured Loan & Advances are subject to confirmation,

reconciliations and adjustments, if any.

4. In the opinion of the management current assets, loans and advances have a value of at least equal to the amounts

shown in the balance sheet, if realized in the ordinary course of business. The provision for all the known liabilities

is adequate and not in excess of the amount reasonably necessary. There are no contingent liabilities other than

those stated in note no. 1.

5. Purchases include insurance and all procurement expenses upto arrival of material at plan site.

6. Remunerations are paid during the year to Executive Director Rs. 7.74 lacs (Previous year Rs.6.26 lacs) and

contribution towards Provident Fund Rs.0.67 lacs (Previous year Rs.0.63 lacs).

7. Payments to Auditors: 31.03.2012 31.03.2011

a) Statutory Audit Fees 30000 28000

b) Tax Audit Fees 5000 5000

c) Certification 5000 1500

d) Out of Pocket expenses 2450 3130

42450 37630

8. The company is repaying regularly as stipulated principal amount and interest dues thereon to bank. 9. The company has initiated the process of obtaining confirmations from the suppliers who have registered themselves

under the Micro, Small and Medium Enterprises Development Act, 2006. Based on the information available with

the Company, no balance is due to Micro & Small Enterprises as defined under the Micro, Small and Medium

Enterprises Development Act, 2006 as on March 31, 2012. Further during the year no interest has been paid /

payable under the terms of the said Act, as per guideline issued by the institute of chartered accountants of India.

10. Related Party Disclosure as per accounting standard 18 issued by the ICAI are as follows:

A) (I) Entities having significant influence:

• Sona Tex Fab Pvt. Ltd. (STFPL)

• Star net Business Ltd. (SNBL)

(II) Others:

(1) Promoters :

(a) SKS Securities Pvt Ltd (SSPL)

(b) Scorpio Agrotech Pvt Ltd (SAPV)

(c) Fate Electronics Pvt. Ltd. (FEPL)

(d) Infini Securities Pvt. Ltd. (ISPL)

(e) Brijeshwari Marketing Pvt. Ltd. (BMPL)

(2) Key Management Personnel : (a) Shri Naresh Gattani, ED

(b) Shri Shanti lal Rathi

(c) Shri Shiv K. Rathi

(d) Shri Harshil Nuwal

(3) Associates :

Heritage Suppliers Pvt. Ltd. (HSPL)

Diva Industries Ltd. (DIL)

Shorya Business (India) Ltd. (SBIL)

Siddharth Tax Fab (STF)


(3) Relatives of Key Management Personnel

(a) Smt. Prem Devi Gattani, (M/o. Shri Naresh Gattani)

(b) Smt. Ranjana Gattani, (W/o. Shri Naresh Gattani)

(c) Shri Shiv Prasad K Rathi, (B/o. Shri Shanti lal Rathi)

(d) Shri Subhash Nuwal (S/o Shri RRP Nuwal)

B) Disclosure of Transactions during the period between the company and related parties and the status of

outstanding balance as on 31.03.2012:-

a) Shri Naresh Gattani has been paid office rent beside salary Rs. 1.80 lacs (Previous year Rs.1.80 Lacs)

b) Shri Ram Rich Pal Nuwal has been paid Two truck freight Rs. 2.16 Lacs (Previous year Rs.2.05 Lacs)

c) Shri Subhash Nuwal has been paid salary as an employee Rs. 4.46 Lacs (Previous year Rs. 3.70)

d) Star Net Business Ltd. Processing Charges Rs. 10.13 Lacs (Previous year Rs. 122.71 Lacs)

e) Sona Tax Fab Pvt Ltd. Processing Charges Rs. 45.61 Lacs (Previous year Rs. Nil).

F) Unsecured Loan Transaction With related parties (Body Corporate): (Rs. in Lacs)

HSPL DIL STF SBIL

Taken Current year 00.00 50.00 10.00 00.00

(Previous year) (70.00) (00.00) (00.00) (40.00)

Repaid Current year 00.00 00.00 00.00 01.50

(Previous year) (45.00) (00.00) (00.00) (38.50)

13. Figures for the previous year have been regrouped wherever necessary to conform to the current year’s

classification.

14 Figures have been rounded off to nearest thousand rupees.

15. Earning per share (EPS) –

The numerators and denominators used to calculate basic earning per share: Current Year Previous Year

Profit attributable to equity share holders Rs. 69.32 Lacs Rs. 80.80 Lacs

Basic number of shares during the year 5051400 5051400

Total Shares issued 5051400 5051400

Nominal value of Equity shares (Rs.) 10 10

Basic EPS (Rs.) 1.37 1.60

16. The Company has given Bank Guarantee & executed EPCG bond under the Export Promotion Capital Goods scheme

in favour of Commissioner of Custom, Govt. of India against import of Capital Goods at concession rate of Custom

duty, for which it has to fulfill export obligation as stipulated Rs. 448.24 lacs (Previous year Rs. 591.97 lacs)

Non fulfillment of Export obligation will attract repayment of custom duty saved along with penal interest which

may adversely affect the profitability of the Company

17. Additional information:

a. Turnover and Stocks: (Rs.in lacs)

For the year ended For the year ended

31.03.2012 31.03.2011

Opening Stock 211.35 122.40

Turnover:

Processing Charges (Job) 3704.17 3403.30

Fabric Sales 149.00 07.02

Wind Power Generation 12.88 11.60

Closing Stocks 243.58 211.35


b. Value of Raw Material, Stores and spare and Components consumed: (Rs. In Lacs)

Yarn 80.86 5.06

Dyes & Chemicals 1312.74 1137.68 Stores, Spare Parts and Component 310.03 344.12

Raw Material, Components, Stores & spare parts consumed are 99% indigenous.

c. CIF Value of imports

Components, stores and spare parts 8.13 00.00

Capital goods 243.35 88.17

d. Expenditure in foreign currency Machinery 243.35 88.17

Traveling 0.00 4.53

Store& Spares 8.13 0.00

e. Earning in foreign currency 138.41 7.38

18. Segment Accounting Policy

The company primarily operates in Textile Segment and Power Generation Reporting as required under

accounting standard 17 issued by Institute of Chartered Accountants of India is as under. There is no reportable

geographical segment either.

Segment Wise Report

(Rs In Lacs)

2011- 2012 2010 – 2011

Sr. Particulars Textile Power

Total

Consolidated Textile Power

Total

Consolidated

1 Segment Revenue 3841.57 12.88 3854.45 3411.24 11.60 3422.84

Other Income 11.60 10.75

3866.05 3433.59

2 Segment Results

Profit before tax & Interest 207.48 4.40 211.88 165.97 -2.72 163.25

Less : Interest 132.88 0.00 132.88 59.17 2.57 65.77

Total Profit before Tax 79.00 97.48

Income Tax (MAT) 15.05 18.07

Profit after Tax exl. DTL. 63.95 79.41

3 Other Information

Segment Assets 1487.69 22.01 1509.70 1159.93

30.49 1190.42

Segment Liabilities 741.18 0.00 741.18 422.65 0.00 422.65

Capital Employed 746.51 22.01 768.52 737.28

30.49 767.77

4 Depreciation 173.10 8.48 181.58 144.27 11.75 156.02

As per our report of even date For and On Behalf of the Board

For S. Dad & Co.

Chartered Accountants R.R.P. NUWAL NARESH GATTANI

(Registration No.-007534C) Chairman Executive Director

SANJAY DAD

Partner SHIV K. RATHI SHANTI LAL RATHI

M. No. 076334 Director Director

Bhilwara May 28, 2012.


SONA PROCESSORS (INDIA) LIMITED Registered Office : Shop No.2, Sangam Towers,

Near Old RTO, Gandhi Nagar, Pur Road, Bhilwara 311 001

ATTENDANCE SLIP

1. Name of the attending member ……………………………………………………………………………………………………………….

(In Block Letters)

2. Register Folio No. ……………………………………………………………………………………………………………….

3. Name of Proxy (In Block Letters) ……………………………………………………………………………………………………………….

(To be filled if the Proxy Attends instead of the member)

No of Shares held ……………...

I hereby record my presence at the NINETEENTH ANNUAL GENERAL MEETING of the company at 12th KM Stone, Chittorgarh Road,

Village Guwardi, Bhilwara-311025 on Saturday, the 28th June, 2012. at 10.00 A.M.

Member’s / Proxy’s Signature

Note:- Please fill up this attendance slip and hand it over at the entrance of the meeting hall. Members are requested to bring their copy of the

Annual Report.

SONA PROCESSORS (INDIA) LIMITED Registered Office: Shop No.2, Sangam Towers,

Near Old RTO, Gandhi Nagar, Pur Road, Bhilwara 311 001

FORM OF PROXY

Folio No. ………………… No. of Shares held ……………

I/We …………………………………………………… of …………….…………………………………….…... being a member / members

of SONA PROCESSORS (INDIA) LIMITED do hereby appoint ……………………………………………..……………………….. of

or failing him / her …………………………………… of …………………………………… as my/our proxy and to vote for me / us on my / our

behalf at the NINETEENTH Annual General Meeting of the Company to be held on Saturday, the 28th June 2012 at 10.00 A.M. and at any

adjournment thereof.

Signed ………………………

Dated ……………………… Note: The proxy form duly completed must be returned so as to reach the Registered Office of the Company not less than 48 hours before the

time of holding the aforesaid meeting. A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend, and vote

on a poll instead of himself / herself and the proxy need not be a member.

Affix Rs.1/-

Revenue

Stamp

BOARD OF DIRECTORS Shri Shanti lal Rathi - Non Executive ... file19th ANNUAL REPORT 2011 - 2012 1...

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