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Directors Report of Malwa Cotton Spinning Mills Ltd.

Mar 31, 2015

Dear Members,

The Directors of your Company are pleased to present their 39th Annual Report on the business of the Company together with the Audited Accounts of the Company for the year ended on 31st March, 2015.

1. FINANCIAL RESULTS

The Company's financial performance for the year under review along with previous years are given hereunder:

(Rs Lacs)

Particulars' 2014-15 2013-14

TotalRevenues" 11201.69 18904.94

Profit/(loss) before interest & depreciation (3403.16) (4485.94)

Less :Financial Expenses 27.00 48.39

Profit/(loss) before depreciation (3430.16) (4534.33)

Less: Depreciation 257.50 331.34

Profit after depreciation and interest (3687.66) (4865.67)

Net profit/(loss) after tax (3687.66) (4865.67)

Amount transferred to General Reserve -- --

Earning per Share (Basic) (50.37) (65.16)

Earning per Share (Diluted) (20.32) (42.59)

2. YEAR IN RETROSPECT

M/s Malwa Cotton Spinning Mills Ltd (MCSML), based on its audited balance sheet as at 31st March,2013 had filed a reference under Sick Industrial Companies (Special provisions) Act 1985 and the reference was registered on 24th May, 2013 with Board for Industrial & Financial Reconstruction (BIFR).

The Company has recorded net loss before depreciation, interest & tax of Rs 3403.16 lac as compared to previous year loss before depreciation, interest & tax of Rs.4485.94 lac.

The performance of the Company deteriorated due to volatility and uncertainty in cotton prices, sudden glut in the synthetic yarn market , closure of dyeing units resulting in accumulation of fabric stock and above all undue delay in disbursing of need based funds by lenders in the past proved fatal & detrimental. Poor export demand and excess spinning capacity further resulted in accumulation of stock, hence crash of prices in the domestic market. Increase in power cost, high cost of labour and general increase in input costs resulted in poor performance of the company. These factors adversely affected the capacity utilization of the Company.

During the year, the Company has achieved total production of 36.59 lac kgs for all types of yarns compared to previous year's production of 66.48 lac kgs. The Cotton Yarn production was 4.63 lac kgs against 8.56 lac kgs in the previous year and other yarns production was 31.96 lac kgs against 57.92 lac kgs. in the previous year. Thread production of 10.71 lac kgs was also achieved by the company against 19.57 lac kgs in the previous year.

TURNOVER

During the year, your Company has recorded gross sales of Rs 11071.25 lac against Rs. 18838.16 lac in the previous year. The Company has achieved Yarn sale of Rs 5667.41 lac, Thread sale of Rs 5080.38 lac and others of Rs 323.46 lac in the current year ended on 31st March, 2015 against sale of Yarn Rs. 10306.65 lac , Thread Rs.7893.91 lac and others Rs. 637.60 lac in the previous year. Export of Yarn was at Rs.754.39 lac (CIF) against Rs. 677.56 lac (CIF) in the previous year.

BARNALA UNIT

The Barnala unit has achieved production of 18.37 lac kgs of Yarn and capacity utilization at minimal levels in the current year.

PAONTA SAHIB UNIT

The Paonta Sahib unit was operating at low capacity utilization and had production of 8.97 lac kgs of yarns.

MACHHIWARA UNIT

The Worsted Unit had achieved production of 9.25 lac kgs during the year and the unit was operating at low capacity utilization .

3. SHARE CAPITAL

The paid up Equity Share Capital as on 31st March,2015 was Rs 790.29 lacs and Preference Share Capital was Rs.2724.61 lacs. During the year under review, the Company has not:

a) bought back any of its securities

b) issued any Sweat Equity Shares

c) issued any Bonus Shares to the existing shareholders of the Company

d) issued any Equity Shares under the Employees Stock Option Plan during the year under review

4. DIVIDEND

No Dividend was declared for the current financial year due to loss incurred by the Company and accumulated losses.

5. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND

The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend declared and paid last year.

6. DEPOSITS

The Company has not accepted any deposits from the public during the year under review and as such, there are no outstanding deposits in terms of the Companies (Acceptance of Deposits) rules, 2014.

7. DIRECTORS

a) Mr. Rishi Oswal & Mr. Rahul Oswal retire at the ensuing Annual General Meeting and are eligible for re- appointment as Directors subject to retirement by rotation. They offer themselves for the re-appointment.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its performance, the directors individually, as well as the evaluation of the working of its Committees. At the meeting of the Board all the relevant factors that are material for evaluating the performance of the individual Directors, the Board and its various committees were discussed in detail.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Chairman and non-independent directors was also carried out by the independent Directors at their separate meeting. The Directors expressed their satisfaction with the evaluation process.

b) Meetings

During the year four Board Meetings were convened and held. The details thereof are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

8. KEY MANAGEMENT PERSONNEL

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as an Annexure -I and forms an integral part of this report.

9. REMUNERATION POLICY

The Board on the recommendation of the Nomination and Remuneration Committee shall review and approve the remuneration payable to the Directors ,Key Managerial Personnel and Senior Management. The key provisions of Nomination and Remuneration policy are appended as an Annexure-II to the Board's report.

10. STATUTORY AUDITORS

M/s. S.C.VASUDEVA & Co.,( Firm Registration Number: 000235N) Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment. As required under the provision of Section 139 of the Companies Act, 2013, the Company has obtained a written confirmation from M/s. S.C.VASUDEVA & Co., and received a certificate from the above Auditors to the effect that their appointment, if made, would be in conformity with the limits specified in the said section.

11. AUDITORS' REPORT

The Auditors' Report on the Accounts is self-explanatory and required no comments except (i) non- disclosure of segment results separately in respect of sewing thread segment in accordance with Accounting Standard (AS)-17. Results of the operations of the sewing thread segment is compiled to the extent it could be computed from the books of account however results of the textile segment (yarn & sewing thread ) is disclosed as per Accounting Standard (AS-17) (ii) Due to recession there is delay in realization of debtors and the Company is settling with parties for its recovery and confident of recovery of debtors in respect of which balances were not confirmed and however the company has made a provision for doubtful debts for Rs.1691.28 lac in respect of these debtors during the year.

12. COST AUDIT

Cost audit for the financial year 2014-15 is not applicable to the Company as per Notification No.G.S.R.425[E] dated 30th June2014 issued by the Ministry Of Corporate Affairs, hence no cost auditor was appointed for cost audit purpose.

13. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act,2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed M/s Rajeev Bhambri & Associates, a firm of Company Secretaries in practice (C.P.No 9491 ) to undertake the Secretarial Audit of the Company. The Secretarial audit report for the financial year ended 31st March, 2015 is annexed herewith as Annexure-III to this report. The Secretarial Audit report does not contain any qualification, reservation and adverse remarks.

14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

15. DIRECTORS' RESPONSIBILITY STATEMENT

The Board Of Directors acknowledge the responsibility for ensuring compliance with the provisions of Section 134(3) read with Section 134(5) of the Companies Act, 2013 in the preparation of annual accounts for the year ended on 31st March,2015 and state :

a) That in preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

b) That the Directors had selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profit or Loss of the Company for that period.

c) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) That the Directors have prepared the Annual Accounts on a going concern basis.

e) That the Directors had laid down internal financial controls to be followed by the company and such internal financial controls are adequate and operating effectively. That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement, a separate Report on Corporate Governance together with Management Discussion and Analysis and certificate from Company's Auditors is annexed and forms part of the report.

17. AUDIT COMMITTEE & RISK MANAGEMENT

The company has duly constituted Audit Committee, the scope of which is quite comprehensive and is in conformity with the provisions of the Companies Act, 2013 and revised clause 49 of the listing agreement. The composition of the Audit Committee is given in Corporate Governance Report.

All the recommendations of the Audit Committee were accepted by the Board.

RISK MANAGEMENT

The Audit Committee has also been assigned the responsibility for monitoring, and reviewing risk management. The Committee identifies, review and mitigate all elements of risks which the Company may be exposed to. The Board also reviews the risk management assessment and minimization procedures.

18. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has adopted Whistle Blower Policy/vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Company's Code of Conduct and Ethics.

19. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable.

20. RELATED PARTY TRANSACTIONS

There was no contract or arrangement made with related parties as defined under Section 188 of the Companies Act, 2013 during the year under review.

21. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There are no significant orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

22. DECLARATION BY INDEPENDENT DIRECTORS

Necessary declarations have been obtained from the Independent Directors under Section 149(7) of the Companies Act, 2013 except Mr Arun Kumar Ahluwalia.

23. INTERNAL FINANCIAL CONTROL SYSTEM

The Company has in place internal financial control system, commensurate with the size and complexity of its operations to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances. The internal auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company. Based on the report of the internal auditor, respective departments undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

24. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure-IV.

26. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

The Company has shut down the production activity during the year at Paonta Sahib unit.

Except closure of Paonta Sahib unit, No material changes and commitments affecting the financial position of the Company occurred between the ends of the financial year to which these financial statements relate on the date of this report.

27. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of Annual Return in form MGT-9 is annexed herewith as Annexure -V

28. ACKNOWLEDGEMENTS

The Board of Directors place on record its appreciation for the valuable assistance, support and guidance extended to the Company by the various Government Departments, Organisations and Agencies. The Company also acknowledges the support and co-operation received from dealers, Retailers, agents and other business partners for excellent support received from them. The Board also wishes to express its deep gratitude for the continued support from its shareholders and the employees and appreciate the co-operation and unstinted support extended to the Company.

Place: Ludhiana For and on behalf of Board Date : 30.05.2015

JANGI LAL OSWAL Chairman-cum-Managing Director


Mar 31, 2014

Dear Members,

The Directors of your Company are pleased to present their 38th Annual Report on the business of the Company together with the Audited Accounts of the Company for the year ended on 31st March, 2014.

(Rs Lacs)

FINANCIAL RESULTS 2013-14 2012-13

Profit/(Loss) before Financial Expenses & Depreciation (4485.94) (12489.14)

Financial Expenses 48.39 3295.43

Depreciation 331.34 387.10

Profit/(Loss) before tax (4865.67) (16171.67)

Profit/(Loss) for the year after tax adjustments (4865.67) (16171.67)

YEAR IN RETROSPECT

The net worth of the company has been eroded due to continuous losses suffered by the company and there was negative net worth as at 31st March, 2013 resulting in the Sickness of the company. M/s Malwa Cotton Spinning Mills Ltd (MCSML), based on its audited balance sheet as at 31st March, 2013 had filed a reference under Sick Industrial Companies (Special provisions) Act 1985 and the reference was registered on 24th May, 2013 with Board for Industrial & Financial Reconstruction (BIFR).

The Company has recorded net loss before depreciation, interest & tax of Rs 4485.94 lac as compared to previous year loss before depreciation, interest & tax of Rs.12489.14 lac.

Due to sluggish demand in domestic and export markets for the last 3-4 years, the performance of the company deteriorated resulting in losses of the Company. There was delay in realization of old debtors due to prevailing recession in the market, thus affecting the liquidity and working capital cycle. Due to high inflation, the disposable income skewed and lesser consumption pattern is being formed and resulting tight money market conditions. These factors adversely affected the capacity utilization of the Company which fell to 23.79% during the year 2013-14. The company could not absorb its fixed manufacturing cost due to lower capacity utilization which adversely affected the efficiency of the company.

During the year, the Company has achieved total production of 66.48 lac kgs for all types of yarns compared to previous year''s production of 102.02 lac kgs. The Cotton Yarn production was 8.56 lac kgs against 35.75 lac kgs in the previous year and other yarns production was 57.92 lac kgs against 66.27 lac kgs. in the previous year. Thread production of 19.57 lac kgs was also achieved by the company against 21.14 lac kgs in the previous year.

TURNOVER

During the year, your Company has recorded gross sales of Rs 18838.16 lac against Rs. 31324.25 lac in the previous year. The Company has achieved Yarn sale of Rs 10306.65 lac, Thread sale of Rs 7893.91 lac and others of Rs 637.60 lac in the current year ended on 31st March, 2014 against sale of Yarn Rs. 19092.02 lac , Thread Rs.8569.82 lac and others Rs. 3662.41lac in the previous year. Export of Yarn was at Rs.677.56 lac (CIF) against Rs. 1058.65 lac (CIF) in the previous year.

BARNALA UNIT

The Barnala unit has achieved production of 23.88 lac kgs of Yarn and capacity utilization of 6.77% in the current year.

PAONTA SAHIB UNIT

The Paonta Sahib unit was operating at capacity utilization of 48.11 %and had production of 37.22 lac kgs of yarns.

MACHHIWARA UNIT

The Worsted Unit had achieved production of 5.38 lac kgs during the year and the unit was operating at capacity utilization of 21.51 %.

FIXED DEPOSITS

The Company has not accepted/renewed any deposits from the public during the year under review under section 58A of the Companies Act, 1956.

INDUSTRIAL RELATIONS

Human Resources is the most significant and valuable assets of the company. Industrial relations at all units of the company remain cordial and in harmony during the year. The Company is very thankful to its employees for the wholehearted support during the year.

COMPLIANCE OF LISTING AGREEMENT

The Equity Shares of the Company are listed on Bombay Stock Exchange and National Stock Exchange of India Ltd. The Company will pay Annual Listing Fee to both the Exchanges in due course.

CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement, a separate Report on Corporate Governance together with Management Discussion and Analysis and certificate from Company''s Auditors is annexed and forms part of the report.

AUDITORS

M/s. S.C.VASUDEVA & Co., Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment.

COST AUDITORS

The due date of filing Cost Audit Report is as under:

i) For the year 2012-13 on 27th September, 2013 and was filed on 21st Sept, 2013.

ii) For the year 2013-14 on 27th September, 2014 and is expected to be filed in due course of time.

AUDITORS'' REPORT

The Auditors'' Report on the Accounts is self-explanatory and required no comments except i) non-disclosure of segment results separately in respect of sewing thread segment in accordance with Accounting Standard (AS)-17. Results of the operations of the sewing thread segment is compiled to the extent it could be computed from the books of account however results of the textile segment (yarn & sewing thread ) is disclosed as per Accounting Standard (AS-17)

ii) Due to recession there is delay in realization of debtors and the Company is settling with parties for its recovery and confident of recovery of debtors in respect of which balances were not confirmed and however the company has made a provision for doubtful debts for Rs.1017.51 lac in respect of these debtors during the year.

DIRECTORS'' RESPONSIBILITY STATEMENT

Directors'' Responsibility Statement pursuant to the provisions of section 217(2A) of the Companies Act, 1956 is attached as per Annexure ''C'' and forms part of the report.

DIRECTORS

Mr. Rishi Oswal & Mr. Rahul Oswal retire at the ensuing Annual General Meeting and are eligible for re-appointment as Directors subject to retirement by rotation. They offer themselves for the re-appointment.

Mr. Atul Saxena , nominee of IFCI Ltd. and Mr.Sanjay Kumar suroya (Nominee of IDBI) ceased to be Director of the Company w.e.f. 25.09.2013 and 24.09.2013 respectively. The Board places on record its appreciation for their services rendered during their tenure as Directors of the Company.

ACKNOWLEDGEMENT

The Board of Directors place on record its appreciation for the valuable assistance, support and guidance extended to the Company by the Financial Institutions and Banks. The Company also acknowledges the support and co-operation received from dealers, retailers and agents for promoting various products of the Company. The Board also wishes to express its deep gratitude for the continued support from its shareholders and the employees and appreciate the co- operation and unstinted support extended to the Company.

DISCLOSURE OF PARTICULARS

Statement of particulars of employees pursuant to Section 217(2A) of the Companies Act, 1956 is attached as per Annexure ''A''.

Information as per the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earning and outgo is given in Annexure ''B'' forming part of this Report.

ANNEXURE ''A'' TO THE DIRECTORS'' REPORT

PARTICULARS OF EMPLOYEES

Statement of Particulars of Employees under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and forming part of Directors'' Report for the year ended 31.03.2013

1. The appointment of Mr. Jangi Lal Oswal is on contractual basis.

2. Mr. Jangi Lal Oswal is related to Mr. Rishi Oswal and Mr. Rahul Oswal, Directors of the Company.

3. The remuneration is upto 31-12-2013 includes salary, cash allowances and/or perquisite value of other non cash perquisites.

Directors'' Responsibility Statement

Pursuant to the provisions of section 217(2AA) of the Companies Act, 1956 it is hereby confirmed:

1. That in preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

2. That the Directors had selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profit or Loss of the Company for that period.

3. That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. That the Directors have prepared the Annual Accounts on a going concern basis.



Place: Ludhiana For and on behalf of Board

Date : 30.05.2014

JANGI LAL OSWAL Chairman-cum-Managing Director


Mar 31, 2013

Dear Members,

The Directors of your Company are pleased to present their 37th Annual Report on the business of the Company together with the Audited Accounts of the Company for the year ended on 31st March, 2013.

(Rs. Lacs) FINANCIAL RESULTS 2012-13 2011-12

ProfitV(Loss) before Financial Expenses & Depreciation (12489.14) 2919.65

Financial Expenses 3295.43 3241.58

Depreciation 387.10 434.32

Profit/(Loss) before tax (16171.67) (756.25)

Prof it/(Loss) for the year after tax adjustments (16171.67) (756.25)

YEAR IN RETROSPECT

The Company has recorded net loss before depreciation, interest & tax of Rs 12489.14 lac as compared to previous year profit before depreciation, interest & tax of Rs. 2919.65 lac. The year 2012-13 was very erratic both on demand front and price front in the international and domestic market. Global economic slowdown has adverse impact on the performance of the company. Also volatile & high raw material cost, power cost, labour cost, forex movements and financial cost have given negative impact on the profitability of the company. The company incurred net loss of Rs. 16171.67 lac during the year and net worth of the company was eroded and there was negative networth of Rs. 13504.88 Lac resulting in the Sickness of the Company. During the year the company had sold old items of inventories and slow moving not useable and not readily saleable items of inventories at loss. The net worth has been eroded due to continuous losses suffered by the company. The financial performance of the company over the year has shown declining trend. The performance of the company deteriorated as selling prices decrease was more than the decrease in raw material prices and also due to prevailing recession in global market, weak export market, labour shortage, high financial and power cost etc. Due to recession in the market, there is delay in realization of old debtors and affecting liquidity and working capital cycle and the company is in the process of settling disputes with parties and hopeful of recovery.

During the year, the Company has achieved total production of 102.02 lac kgs for all types of yarns compared to previous year''s production of 116.45 lac kgs. The Cotton Yarn production was 35.75 lac kgs against 38.73 lac kgs in the previous year and other yarns production was 66.27 lac kgs against 77.72 lac kgs in the previous year. Thread production of 21.14 lac kgs was also achieved by the company against 20.83 lac kgs in the previous year.

TURNOVER

During the year, your Company has recorded gross sales of Rs 31324.25 lac against Rs. 39823.24 lac in the previous year. The Company has achieved Yarn sale of Rs. 18787.84 lac, Thread sale of Rs 8569.82 lac and others of Rs. 3966.59 lac in the current year ended on 31st March, 2013 against sale of Yarn Rs. 25012.93 lac , Thread Rs. 8793.49 lac and others Rs.6016.82 lac in the previous year. Export of Yarn was at Rs.1058.65 lac (CIF) against Rs. 2540.17 lac (CIF) in the previous year. BarnalaUnit

The Barnala unit has achieved production of 43.92 lac kgs of Yarn and capacity utilization of 27.27% in the current year. Paonta Sahib Unit

The Paonta Sahib unit was operating at capacity utilization of 49.55% and had production of 39.27 lac kgs of yarns. Machhiwara Unit

The unit had achieved production of 18.83 lac kgs of value added products during the year.

The Worsted unit was operating at capacity utilization of 21.35%.

FIXED DEPOSITS

The Company has not accepted/renewed any deposits from the public during the year under review under section 58A of the Companies Act, 1956. INDUSTRIAL RELATIONS

Human Resources is the most significant and valuable asset of the company. Industrial relations at all units of the company remain cordial and in harmony during the year. The Company is very thankful to its employees for the wholehearted support during the year.

COMPLIANCE OF LISTING AGREEMENT The Equity Shares of the Company are listed on Bombay Stock Exchange and National Stock Exchange of India Ltd. The Company will pay Annual Listing Fee to both the Exchanges in due course. CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement, a separate Report on Corporate Governance together with Management Discussion and Analysis and certificate from Company''s Auditors is annexed and forms part of the report. AUDITORS

M/s. S.C.VASUDEVA&Co., Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offered themselves for re- appointment. COST AUDITORS

M/s KHUSHWINDER KUMAR & Co., Cost Auditors of the Company whose term of office has expired on 31-03-2013, being eligible for re-appointment offered themselves for the same and are re-appointed as Cost Auditors of the Company for the year 2013-14.

The due date of filing Cost Audit Report is as under:

i) For the year 2011-12 was 28th February, 2013 and was filed on 20th February, 2013. ii) For the year 2012-13 is 27th September, 2013 and is expected to be filed in due course of time.

AUDITORS'' REPORT

The Auditors'' Report on the Accounts is self-explanatory and required no comments except i) non-disclosure of segment results separately in respect of sewing thread segment in accordance with Accounting Standard (AS-17). Results of the operations of the sewing thread segment is compiled to the extent it could be computed from the books of account however results of the textile segment (yarn & sewing thread) is disclosed as per Accounting Standard (AS-17). ii) The slow moving items of inventories to the tune of Rs. 236.14 lac have been valued at cost as the market value is not ascertainable iii) Due to recession there is delay in realization of debtors and the Company is settling with parties for its recovery and confident of recovery of debtors in respect of which balances were not confirmed and therefore, no provision has been made for doubtful debts in respect of these debtors as doubtful amount can not be ascertained at this stage. DIRECTORS'' RESPONSIBILITY STATEMENT Directors'' Responsibility Statement pursuant to the provisions of section 217(2A) of the Companies Act, 1956 is attached as per Annexure ''C and forms part of the report. DIRECTORS

Mr. Surinder Kumar Vig & Mr. Gyaneshwar Bansal retire at the ensuing Annual General Meeting and are eligible for re- appointment as Directors subject to retirement by rotation.

They offer themselves for the re-appointment. Mr. Surendra Prasad Bhatt, nominee of IFCI Ltd. and Mr.Yashpal Barar, nominee of PNB ceased to be Director of the Companyw.e.f. 14.02.2013 and20.10.2012respectively.The Board places on record its appreciation for their services rendered during their tenure as Directors of the Company. Mr. Arun Kumar Ahluwalia, nominee of PNB, and Mr. Atul Saxena, nominee of IFCI Ltd., were appointed as Director on the Board of the Company w.e.f 20.10.2012 and 14.02.2013 respectively. They are welcome on the Board.

ACKNOWLEDGEMENT

The Board of Directors place on record its appreciation for the valuable assistance, support and guidance extended to the Company by the Financial Institutions and Banks. The Company also acknowledges the support and co-operation received from dealers, retailers and agents for promoting various products of the Company. The Board also wish to express its deep gratitude for the continued support from its shareholders and the employees and appreciate the co- operation and unstinted support extended to the Company.

By order of the Board

PLACE :LUDHIANA POOJA DAMIRMIGLANI

DATED: 15.04.2013 Company Secretary


Mar 31, 2012

Dear Members,

The Directors of your Company are pleased to present their 36th Annual Report on the business of the Company together with the Audited Accounts of the Company for the year ended on 31st March, 2012.

(Rs. Lacs)

FINANCIAL RESULTS 2011-12 2010-11

Profit/(Loss) before Financial

Expenses & Depreciation 2919.65 3747.35

Financial Expenses 3241.58 2911.33

Depreciation 434.32 473.31

Profit/(Loss) before tax (756.25) 362.71

Profit/(Loss) for the year after tax adjustments (756.25) 362.71



YEAR IN RETROSPECT

The Company has recorded profit/(loss) before depreciation, interest & tax of Rs. 2919.65 lac as compared to previous year Rs. 3747.35 lac.

Cotton Textile Industry is obsessed with many problems. Outdated machinery, low labor productivity and slowdown of global economic scenario has adversely affected the Indian Textile Industry. This has made textile mills inefficient and uneconomic due to which many units became sick and were closed down.

During the year, the Company has achieved total production of 116.45 lac kgs for all types of yarns compared to previous year's production of 200.71 lac kgs. The Cotton Yarn production was 38.73 lac kgs against 107.05 lac kgs in the previous year and other yarns production was 77.72 lac kgs against 93.66 lac kgs. in the pervious year. Thread production of 20.83 lac kgs was also achieved by the company against 28.67 lac kgs in the previous year.

TURNOVER

During the year, your Company has recorded gross sales of Rs 39823.24 lac against Rs. 45504.28 lac in the previous year. The Company has achieved Yam sale of Rs 25012.93 lac, Thread sale of Rs.8793.49 lac and others of Rs. 6016.82 lac in the current year ended on 31st March, 2012 against sale of Yarn Rs. 31509.09 lac, Thread Rs. 9829.63 lac and others Rs. 4165.56 lac in the previous year. Export of Yarn was at Rs.2540.16 lac (CIF) against Rs. 4095.00 lac (CIF) in the previous year.

Barnala Unit

The Barnala unit has achieved production of 52.92 lac kgs of Yams and capacity utilization of 43.14% in the current year. The plant is equipped with latest technology machines to meet the demand of Domestic as well as International Markets.

Paonta Sahib Unit

The Paonta Sahib unit was operating at capacity utilization of 46.16% and had production of 45.60 lac kgs of yarns.

Machhiwara Unit

The Company's strength lies in value added products. The unit had achieved production of 20.83 lac kgs of value added products during the year.

The Worsted unit was operating at capacity utilization of 35.25% and had production of 17.93 lac kgs of yarns.

FIXED DEPOSITS

The Company has not accepted/renewed any deposits from the public during the year under review under section 58A of the Companies Act, 1956. INDUSTRIAL RELATIONS

Your Company has cotdra A vetetoris with employees ar- rro man-day was lost during the year. The Company is very thankful to its employees for the wholehearted support in achieving optimum level of efficiency. COMPLIANCE OF LISTING AGREEMENT The Equity Shares of the Company are listed on Bombay Stock Exchange and National Stock Exchange of India Ltd. The Company has paid Annual Listing Fee to both the Exchanges for the Financial Year 2012-13 and have fully complied with the clauses of Listing Agreement.



CORPORATE GOVERNANCE

As per Clause 49 of the Listing Agreement, a separate Report on Corporate Governance together with Management Discussion and Analysis and certificate from Company's Auditors is annexed and forms part of the report.

AUDITORS

M/s. S.C. Vasudeva & Co., Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offered themselves for re- appointment.

COST AUDITORS

M/s Khushwinder Kumar & Co., Cost Auditors of the Company, being eligible for re-appointment offered them self for same and are reappointed as Cost Auditors of the Company for the year2012-13.

The due date of filing Cost Audit Report is as under: i) For the year 2010-11 was on 28th September, 2011 and was filed on 28th August, 2011. ii) For the year 2011-12 is on 27th September, 2012 and is expected to be filed in due course of time.

AUDITORS'REPORT

The Auditors' Report on the Accounts is self-explanatory and required no comments except i) non-disclosure of segment results separately in respect of sewing thread segment in accordance with Accounting Standard (AS-17). Results of the operations of the sewing thread segment is compiled to the extent it could be computed from the books of account however, results of the textile segment (yarn & sewing thread) is disclosed as per Accounting Standard (AS-17). ii) The slow moving items of inventories to the tune of Rs.2198 lac have been valued at cost as the market value is not ascertainable iii) The Company is confident of recovery of debtors in respect of which balances were not confirmed and therefore, no provision has been made for doubtful debts in respect of these debtors as doubtful amount can not be ascertained at this stage.

DIRECTORS' RESPONSIBILITY STATEMENT

Directors' Responsibility Statement pursuant to the provisions of section 217(2A) of the Companies Act 1956 is attached as per Annexure 'C and forms part of the report.

DIRECTORS

Mr. Rishi Oswal & Mr. Rahul Oswal retire at the ensuing Annual General Meeting and are eligible for re-appointment as Directors subject to retirement by rotation They offer themselves for the re-appointment.

Mr. T. Harikrishnan. nominee of IFCI Ltd. ceased to be Director of the Company w.e.f 14.02.2012. The Board places on record its appreciation for his services rendered during his tenure as Director of the Company.

Mr Surendra Prasad Bhatt, nominee of IFCI Ltd., was appointed as Director on the Board of the Company. He is welcome on the Board.

ACKNOWLEDGEMENT

The Board of Directors place on record its appreciation for the valuable assistance, support and guidance extended to the Company by the Financial Institutions and Banks. The Company also acknowledges the support and co-operation received from dealers, retailers and agents for promoting various products of the Company. The Board also wish to express its deep gratitude for the continued support from its shareholders and the employees and appreciate the co- operation and unstinted support extended to the Company.

DISCLOSURE OF PARTICULARS

Statement of particulars of employees pursuant to Section 217(2A) of the Companies Act, 1956 is attached as per Annexure 'A'.

Information as per the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earning and outgo is given in Annexure 'B' forming part of this report

ANNEXURE A' TO THE DIRECTORS' REPORT

PARTICULARS OF EMPLOYEES

Statement of Particulars of Employees under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 and forming part of Directors' Report for the year ended 31.03.2012



Name Age Date of Qualifi- No. of Designation & Employment cation Years of Nature of Duties Experience

Mr. Jangi 60 09 4 1980 B.AIInd 42 Chairman-cum- Lal Oswal Year Managing Director



Name Remunaration Last Designation Period of (In Lacs) Employment With Last Service Employer With Last Empolyer Mr.Jangi 25.94 Oswal Woollen Commercial 9 Lal Oswal Mills Ltd. Manager



1. The appointment of Mr. Jangi Lai Oswal is on contractual basis.

2. Mr. Jangi Lai Oswal is related to Mr. Rishi Oswal and Mr. Rahul Oswal, Directors of the Company.

3. The remuneration includes salary, cash allowances and perquisite value of other non cash perquisites.

For and on behalf of the Board PLACE: LUDHIANA JANGI LAL OSWAL

DATED: 30.05.2012 Chairman-cum-Managing Director


Mar 31, 2010

The Directors of your Company are pleased to present their 34th Annual Report on the business of the Company together with the Audited Accounts of the Company for the year ended 31st March, 2010.

(Rs. Lac)

FINANCIAL RESULTS 2009-10 2008-09

Profit/(Loss) before financial 1707.08 (477.89) expenses & depreciation

Financial expenses 2855.33 3007.71

Depreciation 581.22 738.07

Profit/(Loss)before tax (1729.47) (4223.67)

Profit/(Loss) for the year after (1724.98) (4371.88) tax adjustments

YEAR IN RETROSPECT

The company has recorded profit/(loss) before depreciation, interest & tax of Rs. 1707.08 lac as compared to previous year Rs. (477.89) lac.

Indian textile industry is passing through difficult period due to global recession, reductions in inventories by global retail giants, less export orders, higher price of raw materials like cotton and infrastructure bottlenecks such as power, transportation and higher financial cost etc. Due to global financial meltdown, growth of the Indian textile industry was adversely affected and sustainability is the need of the hour in the times of adversity. Exporters were finding it difficult to convert inquiries into orders as they have been adversely hit by rising raw material prices and the rupee appreciation. The Board is pleased to inform that the restructuring proposal sanctioned under Corporate Debt Restructuring is implemented, but there was delay in the release of additional funds as per restructuring scheme. Profitability of your company has improved in comparison to previous year, but capacity utilization and production has decreased due to delay in release of funds as per scheme, power cuts, labour shortage and adverse textile scenario. During the year, the company has achieved total production of 205 lac kgs for all types of yarns compared to previous years production of 222 lac kgs. The cotton yam production was 114 lac kgs against 121 lac kgs in the previous year and other yarns production was 91 lac kgs against 101 lac kgs. in the pervious year. Thread production was 34 lac kgs against 40 lac kgs in the previous year.

TURNOVER

During the year, your company has recorded gross sales of Rs.43241 lac against Rs. 45890 lac in the previous year. The company has achieved yarn sale of Rs. 23344 lac, Thread sale of Rs. 10850 lac and others of Rs.9047 lac in the current year ending 31st March, 2010 against sale of yarn Rs. 25245 lac, Thread Rs.11226 lac and others Rs.9419 lac respectively in the previous year. Export of yarn was at Rs. 4312 lac (CIF) against Rs.9371 lac (CIF) in the previous year.

BARNALAUNIT

The Barnala unit has achieved production of 111.37 lac kgs of Yarn and capacity utilization of 85% in the current year. The plant is equipped with latest technology machines to meet the demand of domestic as well as international markets.

PAONTA SAHIB UNIT

The Paonta Sahjb unit was operating at capacity utilization of 86 % and had production of 81.65 lac kgs of yarns.

MACHHIWARAUNIT

The companys strength lies in value added products. The unit had achieved production of 34 lac kgs of value added products during the year.

The capacity utilisation of Worsted unit was 35% and is below the optimum level due to seasonality of the products, shortage of labour, power, tight liquidity and low demand. The unit had achieved production of 11.97 lac kgs of yam.

FIXED DEPOSITS

The Company has not accepted/renewed any deposits from the public during the year under review under section 58A of the Companies Act, 1956.

INDUSTRIAL RELATIONS

Your company has cordial relations with employees and no man-day was lost during the year. The company is very thankful to its employees for the wholehearted support in achieving optimum level of efficiency.

COMPLIANCE OF LISTING AGREEMENT

The equity shares of the Company are listed at The Bombay Stock Exchange and National Stock Exchange.The Company has paid annual listing fee up to 31st March, 2011,

CORPORATE GOVERNANCE

As per Clause 49 of the Listing agre< a separate Report

on Corporate Governance together with Management Discussion and Analysis and certificate from Companys Auditors is annexed and forms part of the report.

AUDITORS

M/s. S.C.Vasudeva & Co., auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and being eligible, offered themselves for re-appointment.

AUDITORS REPORT

The Auditors Report on the Accounts is self-explanatory and required no comments except i) non-disclosure of segment results separately in respect of sewing thread segment in accordance with Accounting Standard (AS)-17. Results of the operations of the sewing thread segment is compiled to the extent it could be computed from the books of account, however results of the textile segment (yarn & sewing thread) is disclosed as per Accounting Standard (AS)-17. ii) the company is confident of recovery of debtors in respect of which balances were not confirmed and therefore, no provision has been made for doubtful debts in respect of these debtors as doubtful amount can not be ascertained at this stage.

DIRECTORS RESPONSIBILITY STATEMENT

Directors Responsibility Statement pursuant to the provision of section 217(2AA) of the Companies Act, 1956 is attached as per Annexure C and forms part of the report.

DIRECTORS

Sh. Rishi Oswal and Rahul Oswal retire at the ensuing Annual General Meeting and are eligible for appointment as Directors subject to retirement by rotation. They offer themselves for the re-appointment.

Sh.Rattan Singh, nominee of IFCI Ltd ceased to be Directorof the company. The Board places on record its appreciation for the services rendered during his tenure as Director of the Company.

Sh. T.Hari Krishnan, nominee of IFCI Ltd, was appointed as Director on the Board of the company. He is welcome on the board.

Sh.Satish Kumar Mohla, nominee of PNB ceased to be Director of the company. The Board places on record its appreciation for the services rendered during his tenure as Director of the Company.

Sh. Nem Chand Jain, nominee of PNB, was appointed as Director on the Board of the company. He is welcome on the board.

ACKNOWLEDGEMENT

The Board of Directors place on record its appreciation for the valuable assistance, support and guidance extended to the company by the Financial Institutions and Banks. The company also acknowledges the support and co-operation received from dealers, retailers and agents for promoting various products of the company. The Board also wish to express its deep gratitude for the continued support from its shareholders and the employees and appreciate the cooperation and unstinted support extended to the company.

DISCLOSURE OF PARTICULARS

Statement of particulars of employees pursuant to Section 217(2A) of the Companies Act, 1956 is attached as per Annexure A

Information as per the Companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 relating to conservation of energy, technology absorption, foreign exchange earning and outgo is given in Annexure B forming part of this Report.

For and on behalf of the Board JANGI LAL OSWAL

Place : Ludhiana Chairman-cum-Managing Director Dated : 28.05.2010

 
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