Mar 31, 2015
Dear members,
The Directors have pleasure in presenting their sixty-ninth Annual
Report together with the Audited Accounts of your Company for the year
ended 31st March, 2015.
FINANCIAL RESULTS
(Rs. in Lacs)
2015 2014
Profit/(Loss) before depreciation /
Exceptional items and taxation (3,411.77) (11,771.01)
Less : Depreciation 2,023.08 1,567.52
Profit/(Loss) before taxation (5,434.85) (13,338.53)
Add /(Less) : Exceptional Items 1,746.61 (306.21)
(3.688.24) (13,644.74)
Add/ (Less) : Provision for
Earlier Year Taxation - -
(3.688.24) (13,644.74)
Add/ (Less) : Deferred Tax Liability - -
Profit/(Loss) after tax (3,688.24) (13,644.74)
Add: Balance brought forward
from previous year (18,337.52) (4,692.78)
Add: Transferred from Depreciation Adjustments 75.94 -
(Less): Depreciation on Revalued Assets (817.64) -
Which the Directors have decided to
carry forward to the next year (22,767.46) (18,337.52)
PERFORMANCE REVIEW
Highlights of performance during the financial year 2014-15 are:
* Total Revenue from Operation of the Company is Rs..6,101.77 lacs as
against Rs..7,962.76 lacs in the previous year.
* Operating Profit / ((Loss) is Rs..(3,411.77) lacs as against
Rs..(11,771.01) lacs in the previous year.
* Profit / (Loss) before taxation is Rs..(5,434.85) lacs as against
Rs..(13,338.53) lacs in the previous year.
* Profit / (Loss) after Tax is Rs..(3,688.24) lacs as against of
Rs..(13,644.74) lacs in the previous year.
The performance of the Company for the year has not been very
encouraging as the markets did not support and the off-take of the
company's products also slowed down resulting in sluggish sales.
The Company is a referred company under the Sick Industrial Companies
(Special Provision) Act, 1985 (SICA) and the process of registering
the same in the Board for Industrial and Financial Reconstruction
(BIFR) is under way. The notices in respect of the same have already
been issued to all the stakeholders.
The company's main stay i.e. Silk Textiles have undergone sea change
in terms of tapering of demand on a year-to-year basis. As compared to
the previous year the sale of silk products have come down by more
than 15% - 18%. The resultant gap created is filled by low-end
products fetching a very meager realization. Your company in spite of
all the hardships and difficulties in the market has been diligently
introducing new designs and new blends and also exploring new markets.
FUTURE OUTLOOK
To bring down the cost of production, your company will have to
increase the scale of operation which requires infusion of machineries
and technology. But unfortunately, considering financial condition of
the company it may not be possible to undertake this exercise.
However, the management is doing its best by ploughing back the small
surplus created from weaving capacity and wherever re-engineering is
required, the same is being done. Within the limited scope under
restricted market condition, your management is very positively
responding to matching situation in the global market.
DIVIDEND
In view of the accumulated losses the Board of Directors does not
recommend any dividend on Equity Shares. The Board of Directors does
not also declare dividend on Redeemable Cumulative Preference Shares.
PUBLIC DEPOSIT SCHEME
During the year, your Company has not accepted any deposits. There are
no outstanding deposits as on date.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Sri G.D. Harnathka, Director of the Company retires from the office by
rotation and is eligible for re-appointment in accordance with the
provisions of the Act and Articles of Association of the Company.
The members approved the re-appointment of Sri S.S. Shah, Managing
Director for a period of 3 years effective from 1s September, 2014 to
31st August, 2017, during the year under review. Members also approved
the re-appointment of Sri. H.S. Gopalka and Sri R.S. Rungta,
Non-Executive Directors for a period of 3 years.
Requisite declarations from all the Independent Directors of the
Company confirming that they met the criteria of Independence as
prescribed both under the Act and Clause 49 of the Listing Agreement
with the NSE, Mumbai has been received.
Necessary policies and the criteria for the performance evaluation of
Directors as Individual, Board and Committees are devised by the
Company. Evaluation of Board and Committees are being done under best
practices prevalent in the Industry. The Company ensures constitution
of the Board of Directors with an appropriate composition, size,
diversified expertise and experience and commitment to discharge their
responsibilities and duties effectively. Nomination & Remuneration
Committee formulated by the Company's Board in accordance with the
provisions of Section 178 of the Companies Act, 2013 and Clause 49 of
the Listing Agreement evaluates the each individual whether they met
the specified criteria and provides valuable contribution to the
Company. At the time of appointment/re-appointment of Independent
Director, Nomination & Remuneration Committee assess the independence
of the directors as referred in Section 149(6) of the Companies Act,
2013 and Clause 49(II)(B) of the Listing Agreement and re-assess the
same when any new interest or relationships are disclosed by them. The
Independent Directors shall abide by the "Code of Independent
Directors" as specified in Schedule IV to the Companies Act, 2013.
Nomination & Remuneration Committee ensures that all the requisite and
applicable provisions of the Companies Act, 2013 rules and regulations
made thereunder and Clause 49 of the Listing Agreement as amended from
time to time are complied with.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors state that:
i) in the preparation of the annual accounts for the year ended March
31,2015, the applicable accounting standards read with requirements
set out under Schedule III to the Act, have been followed and there
are no material departures from the same;
ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
loss of the Company for the year under review.
iii) that the Directors have taken proper and sufficient care for
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
iv) that the Directors have prepared the accounts for the financial
year ended 31st March, 2015 on a going concern basis.
v) the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
vi) the Directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems are
adequate and operating effectively.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of
corporate governance and adhere to the corporate governance
requirements set out by SEBI. The report on Corporate Governance as
stipulated under the Listing Agreement forms an integral part of this
Report. The requisite certificate from the Auditors of the Company
confirming compliance with the conditions of corporate governance is
attached to the report on Corporate Governance. A separate section on
Corporate Governance and Management Discussion and Analysis together
with the Auditors' Certificate confirming the compliance of conditions
on Corporate Governance as per Clause 49 of the Listing Agreement with
the Stock Exchange form part of the Annual Report as "Annexure
II".
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company
during the financial year with related parties were in the ordinary
course of business and on an arm's length basis. During the year, the
Company had not entered into any contract / arrangement / transaction
with related parties which could be considered material in accordance
with the policy of the Company on materiality of related party
transactions.
Your Directors draw attention of the members to Note 41 to the
financial statement which sets out related party disclosures.
CORPORATE SOCIAL RESPONSIBILITY
The Company has formulated the Corporate Social Responsibility
Committee (CSRC) in consultation with the Board during the year
pursuant to introduction of Section 135 under the Companies Act, 2013.
Sri Sundeep Shah, Sri H. S. Gopalka and Sri G.D Harnathka are the
members of the CSRC. Since the Company has been incurring cash losses
in the last three preceding financial years, the Board does not
recommend any amount to be spent on the CSR activities. However the
Board ensures that once the Company will start earning profits, they
shall after taking into account the recommendations of the CSRC,
approve the Corporate Social Responsibility Policy of the Company and
shall disclose contents of such policy in its report and will also
place the same on the Company's website.
BANK LOANS
The One Time Settlement proposal given by the management to the banks
for the outstanding dues to them, have been in the process of
negotiation bilaterally with the Company. Two banks namely ICICI Bank
and State Bank of Hyderabad have settled on One Time Settlement basis.
Your management has paid the entire amount of the money to them.
Negotiation with the other banks on a bilateral basis is going on.
RISK MANAGEMENT
The Company has been addressing various risks impacting the Company
and the policy of the Company. During the year, your Directors made
sure that all the risks that the organization faces such as strategic,
financial, credit, market, liquidity, security, property, IT, legal,
regulatory, reputational and other risks have been identified and
assessed and there is an adequate risk management infrastructure in
place capable of addressing those risks.
The Company manages, monitors and reports on the principal risks and
uncertainties that can impact its strategic long term objectives. The
risk management process is reviewed periodically in order to keep it
aligned with the emerging risks across the globe. Various programmes
involve risk identification, assessment and risk mitigation planning
for strategic, operational, financial and compliance related risks
across various levels of the organization.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with
reference to financial statements. During the year, such controls were
tested and no reportable material weaknesses in the design or
operation were observed.
DISCLOSURE OF PARTICULARS
Particulars of Energy Conservation, Technology Absorption and Foreign
Exchange Earnings and Outgo required under the Companies (Accounts)
Rules, 2014 is annexed as "Annexure I":
AUDITORS
Messrs B.K. Shroff & Company, Chartered Accountants, holds office till
the conclusion of the ensuing Annual General Meeting and are eligible
for re-appointment. They have confirmed their eligibility to the
effect that their re-appointment, if made, would be within the
prescribed limits under the Act and that they are not disqualified for
re-appointment.
The remarks of the Auditors regarding losses of the company, interest
on debt outstanding, reference to BIFR, provision for bad and doubtful
debts, recognition of Net Deferred Assets have been duly explained in
Note No. 33(b), 35, 36(a) and 37 to the accounts respectively.
COST AUDITORS
Pursuant to the Companies (Cost Records And Audit) Rules, 2014
notified w.e.f 30th June, 2014 Textile Industry has been exempt from
maintaining the cost records and for conducting the audit of such
records. However Your Company is continuing its association with M/s.
N. Radhakrishnan & Co., a firm of Cost Auditors, for assisting and
directing the Company with regard to allocation of direct and indirect
costs to the various products and suggesting various measures lowering
the cost without compromising with the quality.
SECRETARIAL AUDITOR
The Board has appointed Ms. Garima Gupta, Practicing Company
Secretary, to conduct Secretarial Audit for the financial year
2014-15. The Secretarial Audit Report for the financial year ended
March 31, 2015 is annexed herewith marked as "Annexure III" to
this Report. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as
"Annexure IV" to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Your Directors appreciate the significant contribution made by the
employees to the operations of your Company during the period. In
terms of provisions of Section 197(12) of the Act read with Rules
5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, a statement showing the names and
other particulars and disclosures of the employees drawing
remuneration in excess of the limits set out in the said rules are
provided in the Annual Report.
Having regard to the provisions of the first proviso to Section 136(1)
of the Act and as advised, the Annual Report excluding the aforesaid
information is being sent to the members of the Company. The said
information is available for inspection at the registered office of
the Company during working hours and any member interested in
obtaining such information may write to the Company Secretary and the
same will be furnished on request.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
In pursuance to the provisions of section 177(9) & (10) of the
Companies Act, 2013, the Company has formulated a vigil mechanism
(whistle blower policy) for its directors and employees of the Company
for reporting genuine concerns about unethical practices and suspected
or actual fraud or violation of the code of conduct of the Company as
prescribed under the Companies Act, 2013 and Clause 49 of the Listing
Agreement. This vigil mechanism shall provide a channel to the
employees and Directors to report to the management concerns about
unethical behaviour, and also provide for adequate safeguards against
victimization of persons who use the mechanism and also make provision
for direct access to the chairperson of the Audit Committee in
appropriate or exceptional cases. The Policy is available on the
website of the Company.
GENERAL
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the period under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend,
voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme save and except ESOS referred to in this
Report.
4. Neither the Managing Director nor the Whole-time Directors of the
Company receive any remuneration or commission from any of its
subsidiaries.
5. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and
Company's operations in future.
Your Directors further state that during the year under review, there
were no cases filed pursuant to the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013.
ACKNOWLEDGEMENT
Your Directors wish to convey their appreciation for the co-operation
and assistance received from the government, financial institutions,
bankers and stakeholders of your Company. The Board wishes to place on
record its deep appreciation for the integrity and hard work of its
employees at all levels to meet challenging markets.
Registered Office: By Order of the Board
19 R. N. Mukherjee Road S. S. SHAH
Kolkata 700 001 Chairman & Managing Director
Dated: The 30th May, 2015.
Mar 31, 2014
The Directors have pleasure in presenting their sixty-eighth Annual
Report together with the Audited Accounts of your Company for the year
ended 31st March, 2014.
FINANCIAL RESULTS
(Rs. in Lacs)
2014 2013
Profit/(Loss) before depreciation /
Exceptional items and taxation (11,771.01) (9,759.52)
Less: Depreciation 1,567.52 1,782.17
Profit/(Loss) before taxation (13,338.53) (11,541.69)
Less: Exceptional Items 306.21 186.88
(13,644.74) (11,728.57)
Less/Add: Provision for Earlier
Year Taxation - 0.37
(13,644.74) (11,728.20)
Less/Add: Deferred Tax Liability - (2,193.03)
Profit/(Loss) after tax (13,644.74) (9,535.91)
Add: Balance brought forward
from previous year (4,692.78) 1,981.36
Add: Transferred from General Reserve - 5,450.00
Less: Impairment of Revalued Assets - 2,588.23
Which the Directors have decided to
carry forward to the next year (18,337.52) (4,692.78)
PERFORMANCE REVIEW
Highlights of performance during the financial year 2013-14 are:
- Total Revenue from Operation of the Company is Rs. 7,962.76 lacs as
against Rs. 7,586.10 lacs in the previous year.
- Operating Profit / (Loss) is Rs. (11,771.01) lacs as against Rs.
(9,759.52) lacs in the previous year.
- Profit / (Loss) before taxation is Rs. (13,338.53) lacs as against
Rs. (11,541.69) lacs in the previous year.
- Profit / (Loss) after Tax is Rs. (13,644.74) lacs as against ofRs.
(9,535.91) lacs in the previous year.
The Company has incurred substantial losses and the same was compounded
due to debiting of the interest for the past for Working Capital and
Term Loan for modernization coupled with bad markets resulting in poor
sales.
Further the year ended 31.03.2014 the net worth of the Company has
eroded and the Company has become Sick Industrial Company as per the
provisions of Sick Industrial Companies (Special Provision) Act, 1985
(SICA) and the Company is required to make reference with the Board for
Industrial and Financial Reconstruction (BIFR). Necessary compliances
will be made in accordance with the provision of SICA.
The markets, in which the Company operates, are undergoing serious
stagflation. In spite of the Company''s best efforts to increase its
share in the market in Europe and US, have faced serious resistance.
Your Company has more or less achieved the same level of operations by
introducing new products, new designs and new blends. Wherever offtake
in the market is low, the customers/buyers are demanding more
performance from the suppliers. This cycle of market phenomena is being
faced by us also. On standalone basis without considering any interest
and depreciation, there is a small surplus during the year.
FUTURE OUTLOOK
The outlook of the economic growth across the globe with positive
vibrations will fuel a growth and demand recovery. At the present
moment there is a lull in the market and the management is looking
forward for changing situation in the global market. While optimism
rears for new vigour and thrust like emphasis on colourways and new
designs, it is expected these changes will bring in positive response
from the overseas buyers and will trigger growth and profitability in
due course of time.
DIVIDEND
In view of the accumulated losses the Board of Directors does not
recommend any dividend on Equity Shares. The Board of Directors does
not also declare dividend on Redeemable Cumulative Preference Shares.
PUBLIC DEPOSIT SCHEME
During the year, your Company has not accepted any deposits. There are
no outstanding deposits as on date.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and Management Discussion
and Analysis together with the Auditors'' Certificate confirming the
compliance of conditions on Corporate Governance as per Clause 49 of
the Listing Agreement with the Stock Exchange form part of the Annual
Report.
DIRECTORS
Shri R.S. Rungta and Shri H.S. Gopalka, Directors of the Company retire
from the office by rotation and are eligible for re- appointment.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under provisions of Section 217 (2AA) of the Companies Act,
1956, your Directors confirm:
i) That in preparation of the annual accounts, the applicable
accounting standards have been duly followed.
ii) That the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
loss of the Company for the year under review.
iii) That the Directors have taken proper and sufficient care for
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities.
iv) That the Directors have prepared the accounts for the financial
year ended 31st March, 2014 on a going concern basis.
DISCLOSURE OF PARTICULARS
The information required under Rule 2 of the Companies Act, 1956
(Disclosure of Particulars in the Report of Board of Directors Rules,
1988) relating to conservation of energy, technology absorption,
foreign exchange earnings and outgo is annexed.
AUDITORS
Messrs B.K. Shroff & Company, Chartered Accountants, retire at the
forthcoming Annual General Meeting and being eligible, offer themselves
for re-appointment.
The remarks of the Auditors regarding losses of company, provision for
bad and doubtful debts, recognition of Net Deferred Tax Assets have
been duly explained in Note No. 35, 36 and 38 to the Accounts
respectively.
COST AUDITORS
Pursuant to the directives of the Central Government under the
provisions of Section 148 of the Companies Act, 2013 (Corresponding to
Section 233 B of the Companies Act, 1956), the Cost account records
maintained by your Company are subject to yearly audit by qualified
Cost Auditors. Your Company has appointed M/s. N. Radhakrishnan & Co.,
a firm of Cost Auditors, for conducting the audit of such records for
the financial year 2013-14.
PERSONNEL
There was no employee employed during the financial year or a part of
the financial year who was in receipt of remuneration for that year or
any part of that year at a rate prescribed under Section 217(2A) of the
Companies Act, 1956 record with the Companies (Particulars of
Employees) Rules, 1975 as amended.
ACKNOWLEDGEMENT
Your Directors wish to convey their appreciation for the co-operation
and assistance received from the government, financial institutions,
bankers and stakeholders of your Company. The Board wishes to place on
record its deep appreciation for the integrity and hard work of its
employees at all levels to meet challenging markets.
Registered Office: By Order of the Board
19, R. N. Mukherjee Road S. S. SHAH
Kolkata 700 001 Chairman & Managing Director
Dated: The 28th May, 2014
Mar 31, 2013
TO THE MEMBERS
The Directors have pleasure in presenting their sixty-seventh Annual
Report together with the Audited Accounts of your Company for the year
ended 31st March, 2013.
FINANCIAL RESULTS
(Rs.in Lacs)
2013 2012
Profit/(Loss) before
depreciation and taxation (9759.52) 932.73
Less/Add: Depreciation 1782.17 2123.45
Profit/(Loss) before taxation (11541.69) (1190.72)
Add: Exceptional Items 186.88 (10478.33)
(11728.57) (11669.05)
Less/Add: Provision for
Earlier Year Taxation 0.37 (113.84)
(11728.20) (11555.21)
Less/Add: Deferred Tax Liability (2193.03) (2394.78)
Profit/(Loss) after tax (9535.91) (9160.43)
Add: Balance brought forward
from previous year 1981.36 11141.79
Add: Transferred from General Reserve 5450.00
Less: Impairment of Revalued Assets 2588.23
Which the Directors have decided
to carry forward to the next year (4692.78) 1981.36
PERFORMANCE REVIEW
The demand for silk fabrics and made-ups tapered down both in Europe
market and US market leading to lower sales during the year. To make up
for the volume loss in the silk, the Company had to resort to
polyester, cotton, viscose and other blended fabric. Although the
volumes remain the same but the realization per unit came down
considerably which resulted in lower profit margin. The Company''s stand
alone operation without considering interest and depreciation left
small positive cash surplus. The interest in the carry over debts could
not be absorbed because of the lower turnover and stiff competition in
the market in spite of the management''s best efforts.
The conditions stipulated under the CDR mechanism which is to be
complied within 31.03.2013, were duly complied and the promoters
infused a sum of? 740.00 lakhs as their contribution.
FUTURE OUTLOOK
Going forward unless there is a recovery in the overseas markets for
the demand for silk fabrics and garments, the future outlook for the
time being looks bleak. However, the management is trying to change the
product mix and lot of emphasis is made on new designs and colourways.
It is expected that these changes will bring in additional business and
also improve the bottom line. Limited success has come in the supplies
made in the domestic market and we are expecting it to grow gradually
over the years.
DIVIDEND
In view of the accumulated losses the Board of Directors do not
recommend any dividend on Equity Shares. The Board of Directors does
not also declare dividend on Redeemable Cumulative Preference Shares.
PUBLIC DEPOSIT SCHEME
During the year, your Company has not accepted any deposits. There are
no outstanding deposits as on date.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and Management Discussion
and Analysis together with the Auditors'' Certificate confirming the
compliance of conditions on Corporate Governance as per Clause 49 of
the Listing Agreement with the Stock Exchange form part of the Annual
Report.
DIRECTORS
Shri G.D Harnathka and Shri R.S Rungta, Directors of the Company
retires from the office by rotation and are eligible for
re-appointment.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under provisions of Section 217 (2AA) of the Companies Act,
1956, your Directors confirm:
i) That in preparation of the annual accounts, the applicable
accounting standards have been duly followed.
ii) That the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
loss of the Company for the year under review.
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
iv) That the Directors have prepared the accounts for the financial
year ended 31st March, 2013 on a going concern basis.
DISCLOSURE OF PARTICULARS
The information required under Rule 2 of the Companies Act, 1956
(Disclosure of Particulars in the Report of Board of Directors Rules,
1988) relating to conservation of energy, technology absorption,
foreign exchange earnings and outgo is annexed.
AUDITORS
Messrs B.K. Shroff & Company, Chartered Accountants, retire at the
forthcoming Annual General Meeting and being eligible, offer themselves
for re-appointment.
The remarks of the Auditors regarding provision for bad and doubtful
debts, recognition of Net Deferred Tax Assets have been duly explained
in Note No. 37 and 39 to the Accounts respectively.
COST AUDITORS
Pursuant to the directives of the Central Government under the
provisions of Section 233 B of the Companies Act, 1956, the Cost
account records maintained by your Company are subject to yearly audit
by qualified Cost Auditors. Your Company has appointed M/s. N.
Radhakrishnan & Co., a firm of Cost Auditors, for conducting the audit
of such records for the financial year 2012-13.
PERSONNEL
There was no employee employed during the financial year or a part of
the financial year who was in receipt of remuneration for that year or
any part of that year at a rate prescribed under Section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended.
ACKNOWLEDGEMENT
Your Directors wish to convey their appreciation for the co-operation
and assistance received from the government, financial institutions,
bankers and stakeholders of your Company. The Board wishes to place on
record its deep appreciation for the integrity and hard work of its
employees at all levels to meet challenging markets.
Registered Office: By Order of the Board
19, R. N. Mukherjee Road S. S. SHAH
Kolkata 700 001 Chairman & Managing Director
Dated: The 29th May, 2013
Mar 31, 2012
The Directors have pleasure in presenting their sixty-sixth Annual
Report together with the Audited Accounts of your Company for the year
ended 31st March, 2012.
FINANCIAL RESULTS
(Rs in Lacs)
2012 2011
Profit / (Loss) before depreciation and taxation 932.73 (4410.42)
Less/Add : Depreciation 2123.45 (2467.22)
Profit / (Loss) before taxation (1190.72) (6877.64)
Add : Exceptional Items (10478.33) -
(11669.05) (6877.64)
Less/Add : Provision for Earlier Year Taxation (113.84) 0.37
(11555.21) (6878.01)
Less / Add : Deferred Tax Liability (2394.78) (1084.39)
Profit / (Loss) after tax (9160.43) (5793.62)
Add : Balance brought forward from previous 11141.79 16935.41
year
Which the Directors have decided _ _
to carry forward to the next year 1981.36 11141.79
PERFORMANCE REVIEW
As a consequence of downsizing of the business as decided last year,
the sales and processing income during the year was Rs 8952.29 lacs
which is not comparable with that of the last year. The net loss for
the year was Rs 9160.43 lacs.
The proposal for restructuring of debts under CDR mechanism was
approved by CDR Empowered Group at their meeting held on 20/12/2011.
The conditions as put forth in the Letter of Approval of CDR have been
complied with by the Management and a sum of Rs 734 lacs has been
brought in by the Promoters and infused in the Company. Most of the
bankers have restructured their loans.
FUTURE OUTLOOK
As planned last year, your Company has done away with outsourcing
business and is concentrating only on the in-house production
facilities. Anticipated demand recovery in the overseas markets should
act as a conduit to the Company's path of recovery. Supplies in the
domestic market have also commenced during the year, and it is expected
to grow in the coming years.
DIVIDEND
In view of the accumulated losses the Board of Directors do not
recommend any dividend on Equity Shares. The Board of Directors does
not also declare dividend on Redeemable Cumulative Preference Shares.
PUBLIC DEPOSIT SCHEME
During the year, your Company has not accepted any deposits. There are
no outstanding deposits as on date.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and Management Discussion
and Analysis together with the Auditors' Certificate confirming the
compliance of conditions on Corporate Governance as per Clause 49 of
the Listing Agreement with the Stock Exchange form part of the Annual
Report.
DIRECTORS
Shri R.S. Rungta, a Director of the Company retires from the office by
rotation and is eligible for re-appointment.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under provisions of Section 217 (2AA) of the Companies Act,
1956, your Directors confirm:
i) That in preparation of the annual accounts, the applicable
accounting standards have been duly followed.
ii) That the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs ofthe Company at the end of the financial year and of the
loss of the Company for the year under review.
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
iv) That the Directors have prepared the accounts for the financial
year ended 31s1 March, 2012 on a going concern basis.
DISCLOSURE OF PARTICULARS
The information required under Rule 2 of the Companies Act, 1956
(Disclosure of Particulars in the Report of Board of Directors Rules,
1988) relating to conservation of energy, technology absorption,
foreign exchange earnings and outgo is annexed.
AUDITORS
Messrs B.K. Shroff & Company, Chartered Accountants, retire at the
forthcoming Annual General Meeting and being eligible, offer themselves
for re-appointment.
The remarks of the Auditors regarding provision for bad and doubtful
debts, recognition of Net Deferred Tax Assets have been duly explained
in Note No. 36 and 37 of Notes on Financial Statements respectively.
COST AUDITORS
Pursuant to the directives of the Central Government under the
provisions of Section 233 B of the Companies Act, 1956, the Cost
account records maintained by your Company are subject to yearly audit
by qualified Cost Auditors. Your Company has appointed M/s. N. Radha
krishnan &Co., a firm of Cost Auditors, for conducting the audit Of
such records for the financial year 2011-12.
PERSONNEL
There was no employee employed during the financial year or a part of
the financial year who was in receipt of remuneration for that year or
any part of that year at a rate prescribed under Section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended.
ACKNOWLEDGEMENT
Your Directors wish to convey their appreciation for the co-operation
and assistance received from the Government, financial institutions,
bankers and stakeholders of your Company. The Board wishes to place on
record its deep appreciation for the integrity and hard work of its
employees at all levels to meet challenging markets.
Registered Office: By Order of the Board
19, R. N. Mukherjee Road S. S. SHAH
Kolkata 700 001 Chairman & Managing Director
Dated : 1st August 2012
Mar 31, 2011
DIRECTORS' REPORT TO THE MEMBERS
The Directors have pleasure in presenting their sixty-fifth Annual
Report together with the Audited Accounts of your Company for the year
ended 31st March, 2011.
FINANCIAL RESULTS
(Rs. in Lacs)
2011 2010
Profit/(Loss) before depreciation
and taxation (4410.42) 2219.01
Less/Add: Depreciation 2467.22 1533 58
Profit/(Loss) before taxation (6877.64) 685.43
Less: Provision for Current Taxation - 275.00
(6877.64) 410.43
Less/Add: Provision for Earlier
Year Taxation 0.37 (5.99)
(6878.01) 416.42
Less/Add: Deferred Tax Liability (1084.39) (157.35)
Profit/(Loss) after tax (5793.62) 573.77
Add: Balance brought forward from
previous year 16935.41 16702.72
11141.79 17276.49
Which the Directors have appropri
-ated as follows :
General Reserve - 100 00
Proposed Dividend On Equity Shares - 94.74
Proposed Dividend On Preference
Shares - 112.00
Corporate Dividend Tax - 34 34
Balance carried forward to next year 11141.79 16935.41
11141.79 17276.49
PERFORMANCE REVIEW
Although the sales and processing income during the year increased to
Rs.62892.52 lacs as against Rs.54393.09 lacs of the previous year,
profitability came down considerably due to high cost of raw materials,
increased interest rates, pressure on margin due to recession in
overseas markets resulting in loss during the year. Your management had
to take a decision for reworking of valuation of the closing stock of
finished goods due to lower realization and a sum of Rs.34.70 crores
was written off during the year for lower realization in the value of
stocks. This also increased the loss for the year. It was also decided
to downsize the business and only concentrate on profit making products
and do away with products with no margin or lower margin.
FUTURE OUTLOOK
The budget proposal for the year 2011-12 has rendered outsourcing
business of the Company totally unprofitable. Your management have
decided to do away outsourcing business and only concentrate on the
in-house production facilities which will result in a turnover of
approx. Rs.150 crores a year. With this change the benefits of the new
modernization and expansion programme undertaken during the year for
production of velvet fabrics and enhancing capacity of the embroidered
fabrics may be reaped during the year.
SinrP the Company's turnover would be Rs.150 crores, there will be
considerable release of current assets the value of which will be
untocked in a staggered manner over the years. To service the bank
loans the Company has filed a flash report of Corporate Debt
Restructuring with the CDR Empowered Committee and the same has been
admitted for appraisal by the Committee. The scheme envisages a period
of 8 -10 years to bring back the Company on a strong foothold.
DIVIDEND
In view of the accumulated losses the Board of Directors does not
recommend any dividend on Equity Shares. The Board of Directors does
not also declare dividend on Redeemable Cumulative Preference Shares.
PUBLIC DEPOSIT SCHEME
During the year, your Company has not accepted any deposits. There are
no outstanding deposits as on date.
CORPORATE GOVERNANCE
A seoarate section on Corporate Governance and Management Discussion
and Analysis together with the Auditors' A separate section on
corporate Governance conditions on Corporate Governance as per Clause
49 of the Listing Agreement with the Stock Exchange form part of the
Annual Report.
DIRECTORS
Shri O P Agarwaf and Shri R.L. Gaggar resigned effective from 11th
February, 2011. Shri Sunil V. Diwakar ceased to be a Director with
effect from 4th March, 2011 on withdrawl of his nomination by IL&FS
Investment (Managers) Ltd.
The Board would like to place on record the valuable contributions made
by Shri O.P. Agarwal, Shri R.L. Gaggar and Shri Sunil V. Diwakarduring
theirtenure as the Directors of the Company.
Shri G.D. Harnathka and Shri H.S. Gopalka, Directors of the Company
retire from the office by rotation and are eligible for re-
appointment.
The term of office of Shri Sundeep Shah. Executive Director of the
Company, expires on 30th August 2011. He has expressed his intension for
not to be re-appointed. He will, however, continue to act as a Promoter
Director of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under provisions of Section 217 (2AA) of the Companies Act,
1956, your Directors confirm:
i) That in preparation of the annual accounts, the applicable
accounting standards have been duly followed.
ii) That the Directors have selected such accounting policies and
applied them consistency and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
loss of the Company for the year under review.
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance ShThe
provfsions' of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
iv) That the Directors have prepared the accounts for the financial
year ended 31st, March, 2011 on a going concern basis.
DISCLOSURE OF PARTICULARS
The information required under Rule 2 of the Compnaies Act, 1956
(Disclosure of Particulars in the Report of Board of Directors Rules,
1988) relating to conservation of energy, technology absorption,
foreign exchange and outgo is annexed.
AUDITORS
Messrs B.K. Shroff & Company, Chartered Accountants, retire at the
forthcoming Annual General Meeting and being eligible, offer themselves
for re-appointment.
The Auditors have qualified that the diminution in the value of stocks
has not been fully captured in the accounts. The Auditors have taken
the value of the entire inventories as at 31st March 2011 at diminished
value, whereas the Company adopted the prudent method of only
estimating the current assets which could be sold during the next one
year and diminution of the value of such stock which worked out to
Rs.34.70 crores and hence provided in the books of accounts. Your
management believes that there is enough market value that is left in
the stock and will review the same at the end of the current year for
future write offs, if any.
The Auditors have further referred to delay in payment of statutory
dues amounting to Rs.42.93 lacs. Your Directors have to state that this
amount pertained to a demand of Income Tax for the assessment year
2007-08 and the same was adjusted by the Income Tax authorities on 28th
June 2011 against the refund due to the Company for the assessment year
2010-11.
The Auditors have also pointed out that there was delay in repayment of
term loan installment of Rs. 150 lacs and interest installment thereon
to State Bank of India and one interest installment to Exim Bank. Your
Directors have to explain that the delay in the said payments had
occurred due to liquidity crisis arising from non realization of
payments from the buyers in time.
COST AUDITORS
Pursuant to the directives of the Central Government under the
provisions of Section 233 B of the Companies Act, 1956, the Cost
account records maintained by your Company are subject to yearly audit
by qualified Cost Auditors. Your Company has appointed M/s. N.
Radhakrishnan & Co., a firm of Cost Auditors, for conducting the audit
of such records for the financial year 2010-11.
RESEARCH & DEVELOPMENT
Your Directors are pleased to inform that in house R&D unit of the
Company at both the units of Anekal, Bangalore have been accorded
recognition by the Department of Scientific and Industrial Research,
Government of India. The Company has always given due importance to the
R&D and has been investing regularly in this area. Capital expenditure
of Rs. 16.58 lacs (Previous year - Rs. 307.28 lacs) and revenue
expenditure of Rs. 259.90 lacs (Previous year - Rs. 156.77 lacs)
incurred by the Company's R&D unit constituting 0.44% (Previous year -
0.85%) of the turnover were approved by the Board of Directors of the
Company.
PERSONNEL
There was no employee employed during the financial year or a part of
the financial year who was in receipt of remuneration for that year or
any part of that year at a rate prescribed under Section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975 as amended.
ACKNOWLEDGEMENT
Your Directors wish to convey their appreciation for the oo-operation
and assistance received from the government, financial institutions,
bankers and stakeholders of your Company. The Board wishes to place on
record its deep appreciation for the integrity and hard work of its
employees at all levels to meet challenging markets.
Registered Office: By Order of the Board
19,R.N.Mukherjee Road S.S.SHAH
Kolkata 700 001 Chairman & Managing Director
Dated: The 2nd August, 2011.
Mar 31, 2010
The Directors have pleasure in presenting their sixty-fourth Annual
Report together with the Audited Accounts of your Company for the year
ended 31st March, 2010.
FINANCIAL RESULTS
(Rs. in Lacs)
2010 2009
Profit before depreciation and taxation 2219.01 3559.38
Less: Depreciation 1533.58 1647.56
Profit before taxation 685.43 1911.82
Less: Provision for Current Taxation 275.00 125.00
410.43 1786.82
Less: Provision for Earlier Year Taxation (5.99) -
416.42 1786.82
Less: Provision for Fringe Benefit Tax - 15.00
416.42 1771.82
Less/Add: Deferred Tax Liability (157.35) (149.23)
Profit after tax 573.77 1921.05
Add: Balance brought forward from
previous year 16702.74 15637.47
17276.49 17558.52
Which the Directors have appropriated as follows:
General Reserve 100.00 300.00
Preference Share Redemption Reserve - 240.00
Proposed Dividend On Equity Shares 94.74 157.91
Proposed Dividend On Preference Shares 112.00 112.00
Corporate Dividend Tax 34.34 45.87
Balance carried forward to next year 16935.41 16702.74
17276.49 17558.52
PERFORMANCE REVIEW
During the financial year 2009-10, the sales of your Company increased
to Rs.54393.09 lacs as compared to Rs.51003.75 lacs in the previous
year. Profit after tax declined to Rs.573.77 lacs as against Rs.1921.05
lacs largely on account of shift of overseas customers to different
varieties of textiles coupled with increase in input cost including Raw
Material cost.
Your Directors are pleased to inform that the EOU Status of Unit I has
been converted into Domestic Tariff Area Unit pursuant to the Company
having fulfilled the export obligation. On such debonding the old and
accumulated stocks of 1,07,319.18 mtrs of silk fabrics and other stocks
were destroyed under the order of Customs Department. The necessary
accounting entries have been passed in the books of accounts.
Due to adverse market conditions and recession in Europe, the Companys
major buyers in Italy have declined to purchase spun silk and noil yarn
manufactured at the Companys Unit 3 at Nanjangud, Karnataka. Hence
the management decided to close down the said unit, for which the
permission has been sought for from Labour Department, Government of
Karnataka. The Unit shall be revived as and when the overseas market
improves.
POST BALANCE SHEET DEVELOPMENT
The sales for the quarter ended 30th June, 2010 was Rs.132.26 crores as
against Rs.151.78 crores in the corresponding quarter last year. The
net profit was Rs.1.09 crores as against Rs.4.39 crores in the
corresponding quarter of the previous year.
DIVIDEND
Your Directors recommend payment of the following Dividends for the
year:
i) On 14,00,000 - 8% Cumulative Redeemable
Preference Shares of Rs.100/- each Rs.1,12,00,000/-
ii) On 7,89,52,620 Equity Shares of Rs.2/- each @
Rs.0.12 per share Rs.94,74,315/-
PUBLIC DEPOSIT SCHEME
During the year, your Company has not accepted any deposits. There are
no outstanding deposits as on date.
CORPORATE GOVERNANCE
A separate section on Corporate Governance and Management Discussion
and Analysis together with the Auditors Certificate confirming the
compliance of conditions on Corporate Governance as per Clause 49 of
the Listing Agreement with the Stock Exchanges form part of the Annual
Report.
DIRECTORS
Shri R.L. Gaggar and Shri R.S. Rungta, Directors of the Company retire
from the office by rotation and are eligible for re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT
As required under provisions of Section 217 (2AA) of the Companies Act,
1956, your Directors confirm:
i) That in preparation of the annual accounts, the applicable
accounting standards have been duly followed.
ii) That the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit of the Company for the year under review.
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
iv) That the Directors have prepared the accounts for the financial
year ended 31st March, 2010 on a going concern basis.
DISCLOSURE OF PARTICULARS
The information required under Rule 2 of the Companies Act, 1956
(Disclosure of Particulars in the Report of Board of Directors Rules,
1988) relating to conservation of energy, technology absorption,
foreign exchange earnings and outgo is annexed.
AUDITORS
Messrs B.K. Shroff & Company, Chartered Accountants, retire at the
forthcoming Annual General Meeting and being eligible, offer themselves
for re-appointment.
The Auditors have mentioned about the delay in the repayment of two
term loan installments of Rs.18.85 lacs each due to UCO Bank and
interest thereon aggregating to Rs.2.01 lacs. Your Directors would like
to explain that the repayment of term loan installments are normally
auto debited by the concerned bank in the current account of the
Company. The debit of these two installments were not made by the Bank
on the due date and when this was noticed, the Company made the
payment.
COST AUDITORS
Pursuant to the directives of the Central Government under the
provisions of Section 233 B of the Companies Act, 1956, qualified Cost
Auditors have been appointed to conduct Cost Audits relating to
products of the Company subject to the approval of the Central
Government.
PERSONNEL
The particulars of employees required to be furnished under Sec.
217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules 1975 as amended is as under.
Name, Age, Qualification, Designation, Nature of Employment,
Remuneration (Rs), Experience (Years), Date of Commencement of
Employment, Last Employment held, Relationship to any Director.
a) Employees employed throughout the financial year under review who
are in receipt of remuneration in the aggregate of not less than
Rs.24,00,000/- during the year:
i) S.S. Shah, 75, B.Com, LL.B., Chairman & Managing Director,
Contractual, 4032000/-, 56, 01.9.1952, Nil, Father of Sri Sundeep Shah,
Executive Director.
ii) Sundeep Shah, 48, B.Com., Executive Director, Contractual,
3513600/-, 30, 01.12.1980, Nil, Son of Sri S.S. Shah, Chairman &
Managing Director.
b) Employed for part of the year and were in receipt of remuneration at
the rate of not less than Rs.2,00,000/- per month. - NIL
ACKNOWLEDGEMENT
Your Directors wish to convey their appreciation for the co-operation
and assistance received from the government, the financial
institutions, bankers and stakeholders of your Company. The Board
wishes to place on record its deep appreciation for the integrity and
hard work of its employees at all levels to meet challenging markets.
By Order of the Board
S.S. SHAH
Chairman & Managing Director
Kolkata 700 001
Dated: the 10th August, 2010.