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Directors Report of Jagjanani Textiles Ltd.

Mar 31, 2014

Dear Shareholders,

We have pleasure in presenting the 17th Annual Report of the Company and the audited statement of accounts for the year ended 31st March, 2014. A summary of the financial results is given below.

FINANCIAL RESULTS

(''000) (''000) Year ended Year ended on On 31/03/2014 31/03/2013

Gross sales including other income 1,76,947 1,70,598

Gross Profit (Loss) 63.871 53,791

Depreciation 18.744 37,619

Profit/Loss for the year 45,127 20,817

MANAGEMENT DISCUSSION AND ANALYSIS

Textile industry plays a pivotal role in India''s economy. It contributes 14% to India''s industrial production, 4% to the GDP and 17% to export earnings. It provides employment to 35 million people. Recognizing such a pivotal role the Government has been taking many a steps to minimize the effect of economic slowdown faced by the industry during the year under reference.

You are aware that in spite of acute financial crisis your Company has been able to sustain its operations to avoid damage to plant and machinery. The Company has settled the accounts of all the three banks, namely IDBI Bank, Bank of Baroda and UCO Bank. The dues of IDBI Bank and Bank of Baroda have been assigned to M/s. U V Asset Reconstruction Company Limited and the dues of UCO bank have been taken over by M/s. ASREC (India) Ltd. The borrowings from Asset Reconstruction Companies (ARCs) are at higher cost and at best can be used only as a temporary means of finance.

Market conditions for cotton textiles have not been conducive during 2013-14. On account of general economic slowdown and lower GDP, the markets have been sluggish. As we have been working with heavy constraints, our operations did not yield positive results. The settlement of UCO Bank account has resulted in write back of part loans and interest and is reflected in the accounts.

Your Company also attracts provisions of Section 23 (1) (a) (i) of The Sick Industrial Companies Act, 1985 due to erosion of Net worth.

MANAGEMENT PERCEPTION OF RISK AND CONCERN

1. Agriculture in India is still dependent on rains for irrigation As agriculture contributes substantially to our GDP, any downfall in agri production affects economy. Monsoon this year has not been up to the mark and large areas particularly in cotton growing regions have not received adequate rains. It will have its impact not only on quality of cotton but also on its prices during the current year. Consumption of manmade fibres is still low in our country as compared to global standards.

2. China has been a major buyer for Indian textiles - yarn and fabrics. This year China is reported to have decided to reduce import of textiles to encourage domestic production and this decision is showing its impact on the industry

3. However, your Company is taking all possible steps to augment its production levels irrespective of general economic conditions.

INTERNAL CONTROL SYSTEM

Your Company has developed a well defined internal control system over a period which meets its requirement. The system is reviewed periodically to keep with the times and ensure optimal utilization and protection of company''s resources. Audit Committee of the Board monitors the internal control system.

HUMAN RESOURCES/INDUSTRIAL RELATIONS

Your Company encourages innovation and performance. It appreciates and values the Human asset of the Company. In spite of difficult situation on operational front, the morale of employees is high and they have been working hard to turn the tide in favour of better working of your Company. The Company has developed an environment of harmonious and cordial relations with its employees.

As the Company is in Textile business only, segment reporting is not required.

DIVIDEND

No dividend is being recommended for the year under review in view of the accumulated losses. DIRECTORS'' RESPONSIBILITY STATEMENT

On the basis of compliance certificates received from the concerned executives of the Company and subject to disclosures in the annual accounts, as also on the basis of the discussion with the Statutory Auditors of the Company from time to time, as required under Section 217(2AA) of the Companies Act 1956, the Directors hereby confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been

followed along with proper explanation relating to material departures;

ii) 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 Profit of the Company for that period ;

iii) the Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, if any ;

iv) the Directors have prepared the annual accounts on a going concern basis.

DIRECTORS

Mr.Akash B. Shah, Director, retires by rotation and being eligible, has offered himself for re-appointment.

The Board at its meeting held on 04.09.2014 recommended appointment of Mrs. Shakuntala Vyas, as non executive, non-independent Director of the Company whose period of office is liable to determination by retirement of directors by rotation and in respect of whom the Company has received a notice in writing from a member proposing her candidature for the office of Director.

The Board recommends the resolutions for your approval for the above appointments.

OTHER INFORMATION Auditors

M/s G. Dutta & Co., Chartered Accountants, (ICAI Registration No. 002136 ''C'') who are Statutory Auditors of the Company will hold office till the conclusion of the ensuing Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the Financial Year 2014-15. As required under the provisions of Section 139 of the Companies Act, 2013 the Company has obtained written confirmation from M/s G. Dutta & Co., Chartered Accountants, that their appointment, if made, would be in conformity with the limits specified in the said Section.

The observations made by the Auditors in their Report are adequately explained in the notes to the Accounts and significant Accounting Policies and need no further elaboration.

Cost Auditor & Cost Audit Report

During the year, Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, read with The Companies (Cost Accounting Records) Rules, 2011 Board appointed, Mr. Pawan Gupta & associates, Cost Auditor to conduct cost audits relating to textile products manufactured by the Company.

Information as per section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975:

None of the employee was in receipt of remuneration in excess of limit prescribed under Section 217 (2A) of the Companies Act, 1956.

Energy Conservation, Technology Absorption & Foreign Exchange

A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed and marked Annexure ''A'' and forms part of this Report

CORPORATE GOVERNANCE

A separate report on Corporate Governance is enclosed as a part of this Annual Report. A certificate from the Auditors of the Company regarding compliance with Corporate Governance norms stipulated under Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

CASH FLOW ANALYSIS

In conformity with the provisions of clause 32 of the Listing Agreement the Cash Flow Statement for the year ended 31.03.2014 is annexed hereto.

ACKNOWLEDGEMENT

The Board acknowledges with deep sense of gratitude for the valuable assistance and cooperation extended and guidance provided by Government Authorities, Banks, financial institutions, Business associates and looks forward for their continued support. Your Directors are also grateful to the customers & suppliers for their trust and support. Your Directors would like to appreciate dedication and hard work put in by every employee of your company. Last but not the least, your Directors are deeply grateful for the confidence and faith shown by the members of the Company in them.

For and on behalf of the Board, Sd/- Sd/- S.K.Singhal S.G.Vyas Director Managing Director (DIN-00075934) (DIN-01905310)

Jaipur 04.09.2014


Mar 31, 2013

The Directors present the 16th Annual Report together with Audited Accounts for the year ended 31st March, 2013.

FINANCIAL RESULTS

(Rs.000) (Rs.000) Year ended Year ended On On 31/03/2013 31/03/2012

Gross sales including other income 1,70,598 1,06,556

Gross Profit(Loss) 53,791 (87,478)

Depreciation 37,619 33,962

Profit/Loss for the year 20,817 (1,21,440)

MANAGEMENT DISCUSSION AND ANALYSIS

You are aware that for quite some time your Company has been facing acute shortage of working capital which coupled with cumulative losses has seriously affected its operations. In the year 2011-12 your Company settled the Loan account of IDBI Bank and during 2012-13 the Loan accounts of Bank of Baroda have been settled through Assignment of Debt to an Asset Reconstruction Company. Now only UCO Bank account needs to be sorted out for which efforts are going on. Once this is settled, your Company would be in normal operational position. Your Company has created state of art manufacturing facilities which have helped overcome the difficult situation on operational front. The settlement of Bank of Baroda account has resulted in write back of part loans and interest and is reflected in the accounts.

Your Company also attracts provisions of Section 23 (1) (a) (i) of The Sick Industrial Companies Act, 1985 due to erosion of Net worth. The company has incurred loss due to poor utilization of facilities on account of paucity of working capital as also substantial investment in assets which could not be operationalised namely ring Spinning Section. The interest cost of such non operational investment and consequent losses due to inadequacy of working capital has caused the loss of Net Worth.

MANAGEMENT PERCEPTION OF RISK AND CONCERN

1. Govt, policy of intervention in cotton price mechanism and export incentive system affects Textile industry in a big way. Volatile value of national currency also affects import and export decisions. Indian economy witnessed inflationary trends during 2012-13.

2. With the general economic slowdown in India and many other countries, textile industry in India faced twin hurdles of lower demand and higher costs. The euphoria of fast economic growth in India seems vanishing. Though the Govt, is aware of these developments and is trying to address the issues, it has not been able to make a big impact.

3. However, your Company is making all out efforts to keep the wheels of industry moving and settle the matter with the last one bank amicably.

INTERNAL CONTROL SYSTEM

Commensurate to the size and nature of its business your Company has developed a well defined internal control system. The Company takes abundant care to design, review and monitor the working of internal control system for optimal utilization and protection of resources. All significant issues are brought to the attention of the Audit Committee of the Board.

HUMAN RESOURCES/INDUSTRIAL RELATIONS

Though your Company is facing a difficult situation, its employees have high morale and remain motivated to steer it through. Performance management is the key word for the Company. The Company has developed an environment of harmonious and cordial relations with its employees. As the Company is in Textile business only, segment reporting is not required.

DIVIDEND

No dividend is being recommended for the year under review in view of the losses.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2 AA) of the Companies Act, the Directors hereby confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) 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 Profit of the Company for that period;

iii) the Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual accounts on a going concern basis.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company Mr. N.K. Khurana, Director of the Company retire by rotation and being eligible, offer himself for re-appointment.

OTHER INFORMATION

Information as per section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975:

None of the employee was in receipt of remuneration in excess of limit prescribed under Section 217 (2A) of the Companies Act, 1956.

Energy Conservation, Technology Absorption & Foreign Exchange

The information required under Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of Board of Director(s) Rules, 1988 with respect to Conservation of energy, technology absorption and foreign exchange eamings/outgo is appended hereto and form part of this report.

AUDITORS

M/s G. Dutta & Co., Chartered Accountants, Auditors of the Company retire and being eligible offers themselves for re-appointment.

The observations made by the Auditors in their Report are adequately explained in the notes to the Accounts and significant Accounting Policies and need no further elaboration.

CORPORATE GOVERNANCE

As per Clause 49 of the listing agreement with the Stock Exchange, a separate section on Corporate

Governance forms part of the Annual Report.

A Certificate from the Auditors of the Company confirming compliance with conditions of Corporate

Governance as stipulated under the Clause 49 of the listing agreement is annexed to this Report.

ACKNOWLEDGEMENT

The Board acknowledges the valuable assistance and cooperation received from Government Authorities and Business associates and looks forward to their continued support.

Your Directors express their deep appreciation for the commitment and hard work put in by all employees.

For and on behalf of the Board

Sd/-

(S.G.VYAS)

MANAGING DIRECTOR

Place: Jaipur

Dated: 25.08.2013


Mar 31, 2012

Dear Members,

The Directors present the 15th Annual Report together with Audited Accounts for the year ended 31st March, 2012.

FINANCIAL RESULTS

(Rs.''000) (Rs.''000) Year ended Year ended On On 31/03/2012 31/03/2011

Gross sales including other income 1,06,556 1,12,542

Gross Loss 87,478 87,520

Depreciation 33,962 34,124

Loss for the year 1,21,440 1,21,644

DIVIDEND

No dividend is being recommended for the year under review in view ofthe losses.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) ofthe Companies Act, the Directors hereby confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) 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 ofthe Company for that period ;

iii) the Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual accounts on a going concern basis.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company Mr. S.G. Vyas and Mr. S.K.Singhal, Directors of the Company retire by rotation and being eligible, offer themselves for re-appointment. Mr. R.N.Swami was appointed as Additional Director w.e.f. 19.03.2012. Mr. Swami is not seeking re appointment due to other commitments.

OTHER INFORMATION

Information as per section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975:

None of the employee was in receipt of remuneration in excess of limit prescribed under Section 217 (2A) of the Companies Act, 1956.

Energy Conservation, Technology Absorption & Foreign Exchange

The information required under Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988 with respect to Conservation of energy, technology absorption and foreign exchange earnings/outgo is appended hereto and form part of this report.

AUDITORS

M/s G. Dutta & Co., Chartered Accountants, Auditors of the Company retire and being eligible offers themselves for re-appointment.

The observations made by the Auditors in their Report are adequately explained in the notes to the Accounts and significant Accounting Policies and need no further elaboration.

CORPORATE GOVERNANCE

As per Clause 49 of the listing agreement with the Stock Exchange, a separate section on Corporate Governance forms part of the Annual Report.

A Certificate from the Auditors of the Company confirming compliance with conditions of Corporate Governance as stipulated under the Clause 49 ofthe listing agreement is annexed to this Report.

ACKNOWLEDGEMENT

The Board acknowledges the valuable assistance and cooperation received from Government Authorities and Business Constituents and looks forward to their continued support.

Your Directors express their deep appreciation for the commitment and hard work put in by all employees.

For and on behalf of the Board

Place: Jaipur (S.G.VYAS)

28.09.2012 MANAGING DIRECTOR


Mar 31, 2010

The Directors present the 13th Annual Report together with Audited Accounts for the year ended 31st March, 2010.

FINANCIAL RESULTS

(Rs.000) (Rs.000)

Year ended On Year ended On

31/03/2010 31/03/2009

Gross sales including other income 1,58,264 3,91,843

Gross Loss 1,27,494 11,288

Depreciation 34,353 34,190

Loss before tax 1,61,847 45,478

Provision for Tax - 81

Loss after tax 1,61,847 45,559





MANAGEMENT DISCUSSION AND ANALYSIS

The year 2008-09 was a difficult year for global economy due to severe recessionary trends resulting in economic crisis. However, things started looking up during 2009-10 in a cautious manner. Due to large domestic market, recovery in Indian economy has been faster than many developed economies. Textile industry has also shown signs of improvement. Investments made in earlier years, particularly under TUF scheme, have started showing results in terms of volume and quality. Increased manufacturing of textile products has also increased domestic competition particularly on account of shrinkage in overseas demand. Further the industry is facing substantial increase in input costs which is difficult to pass on to the consumers in short run. Government policy of withdrawal of export promotion benefits have also caused concern and slowed the sustained recovery.

Your Company has created world class weaving facilities but the same could not be utilized optimally due to paucity of working capital. The adverse economic conditions of earlier year caused loss to your Company and consequent erosion of working capital. Shortage of funds has compelled the Company to partly withhold the implementation of expansion project. Moreover, your Company had to repay part of its term loan even before the commissioning of expansion project. This led to severe shortage of funds. Companys request to the banks for restructuring of debt and extending further facilities has not evoked positive response so far. This has seriously hampered the working of your Company resulting in lower capacity utilization and consequent operational loss.

However, our faith in Indias textiles industry remains unshaken and we foresee a bright future for Indian textiles. Present global trends show a healthy improvement in demand for textiles from India.

MANAGEMENT PERCEPTION OFR1SKANDCONCERN

1. Textile industry is highly competitive not only for domestic market but for global trade as well. In such a scenario appreciating rupee value vis a vis U S Dollar has significant effect on our earnings.

2. With the globalization of Indian economy, cotton prices have gone up in tandem with global trends. Massive increase in Minimum Support Price of cotton by Central Govt, and uncaliberated export of this raw material has further added to the difficulties of textile industry. An integrated view need to be taken by the authorities in this regard for safeguarding the interest of industry.

3. Your Management is making all out efforts to improve productivity, control costs and produce better fabrics and yarn to fetch higher unit realization.

INTERNAL CONTROL SYSTEM

The Company has well defined internal control system commensurate to the size and nature of its business. The Company takes abundant care to design, review and monitor the working of internal control system for optimal utilization and protection of resources. All significant issues are brought to the attention of the Audit Committee of the Board.

HUMAN RESOURCES/1NDUSTRIALRELATIONS

Your Company lays emphasis on building and sustaining an excellent organization climate based on human performance. Performance management is the key word for the Company. The Company has developed an environment of harmonious and cordial relations with its employees. As the Company is in Textile business only, segment reporting is not required.

DIVIDEND

No dividend is being recommended for the year under review in view of the losses.

DIRECTORSRESPONSIBILITY STATEMENT

As required under Section 217(2 A A) of the Companies Act, the Directors hereby confirm that: i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) 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 that period;

iii) the Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the Directors have prepared the annual accounts on a going concern basis.

DIRECTORS

There was no change in composition of Board during 2009-10.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company Mr. N K Khurana and Mrs. Shakuntala Vyas, Directors of the Company retire by rotation and being eligible, offer themselves for re-appointment.

OTHER INFORMATION

Information as per section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975:

None of the employee was in receipt of remuneration in excess of limit prescribed under Section 217 (2A) of the Companies Act, 1956.

Energy Conservation, Technology Absorption & Foreign Exchange

The information required under Section 217( 1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988 with respect to Conservation of energy, technology absorption and foreign exchange earnings/outgo is appended hereto and form part of th is report.

AUDITORS

M/s G. Dutta & Co., Chartered Accountants, Auditors of the Company retire and being eligible offers^themselves for re-appointment.

The observations made by the Auditors in their Report are adequately explained in the notes to the Accounts and significant Accounting Policies and need no further elaboration.

CORPORATE GOVERNANCE

As per Clause 49 of the listing agreement with the Stock Exchange, a separate section on Corporate Governance forms part of the Annual Report.

A Certificate from the Auditors of the Company confirming compliance with conditions Of Corporate Governance as stipulated under the Clause 49 of the listing agreement is annexed to this Report.

ACKNOWLEDGMENT

The Board acknowledges the valuable assistance and cooperation received from Government Authorities, Bankers and Business Constituents and looks forward to their continued support.

Your Directors express their deep appreciation for the commitment and hard work put in by all employees.



For and on behalf of the Board

(S.G.VYAS)

MANAGING DIRECTOR

Place: Jaipur

Dated: 27.08.10





 
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