Home  »  Company  »  Pranavaditya Spi  »  Quotes  »  Directors Report
Enter the first few characters of Company and click 'Go'

Directors Report of Pranavaditya Spinning Mills Ltd.

Mar 31, 2016

Dear Members,

The Directors have pleasure in presenting the 26th Annual Report on the business and operations of your Company together with the

Audited Financial Statements and the Auditors'' Report for the financial year ended 31st March, 2016. _ _ _

In lac, except EPS)

Particulars

2015-16

2014-15

Total Revenue

6082.44

6584.82

EBIDTA

101.28

204.28

Less : Interest

17.57

29.96

Less : Depreciation

65.13

56.60

Profit before Tax

18.57

117.73

Tax Expense

11.49

34.85

Net Profit

7.08

82.88

EPS (Rs.)

0.04

0.43

Cash Profit

74.96

150.77

Appropriations

Net Profit for the year

7.08

82.88

Add: Balance in Profit & Loss Account

506.85

426.69

Sub-total

513.93

509.57

Less: Adjustment on account of depreciation

-

(2.71)

Balance carried to Profit & Loss Account

513.93

506.86

Operational and Financial Performance Overview

During the financial year under review, the Company achieved total revenue of Rs. 6082.44 Lacs as compared to Rs. 6584.82 Lacs in the previous year. EBIDTA reduced from Rs. 204.28 Lacs to Rs. 101.28 Lacs as compared to previous year. Net profit for the year under review decreased from Rs. 82.88 Lacs to Rs. 7.08 Lacs as compared to the previous year.

Performance for the year under review was affected as the Spinning Industry faced many challenges due to economic slowdown. Yarn prices remained low on account of reduced demand in both export as well as domestic markets. The policy changes by Chinese Government on usage of their cotton reserves and reduction of import of cotton made a major impact on cotton yarn exports and hence on yarn price.

Management Discussion and Analysis Industry structure and developments

India is one of the world''s largest producers of textiles. Abundant availability of raw materials such as cotton, man-made fibers, wool, silk and jute as well as skilled workforce have made the country a sourcing hub. It is the world’s second largest exporter of textiles and clothing in the world. India accounts 63 per cent of the market share of textiles and garments.

The Indian Textile Industry: India’s Textile Scenario:

Indian textile industry is one of the key sectors of the economy in terms of contribution to the economic activity, employment generation, external trade and foreign exchange earnings. In value terms, the industry constitutes about 14 per cent of the manufacturing sector, 5 percent of the GDP and 12 per cent of India''s total export earnings. It generated direct and indirect employment for 105 million people, 2nd largest after agriculture.

Globally, India is the 2nd largest producer of textiles and garments with the leading position occupied by China. It is likely to overtake China in terms of size by 2022-23. Unlike China, India has a predominantly cotton based textile industry. The MMF textiles and clothing exports accounted for 80 per cent and cotton textiles for 20 per cent in China, while in case of India cotton textile and garments contributed a much higher percentage.

In FY 2015-16, in line with the overall decline in exports from India, exports from the sector are expected to decline to about US$ 40 billion as compared to US$ 41.4 billion in FY 2014-15. However, government has taken certain measures in FY 201516 to improve the competitiveness of Indian textile exports.

As per the recent data from OTEXA, total textile and apparel imports to USA have grown at a rate of 7.0% in volume terms in 2015 vs. 2014, whereas imports from India have grown by 7.2% for the same period. In the same period, imports of ‘Made Ups/ Misc’ to US increased at a higher rate of 8.3% with India’s contribution going up from 22.6% to 23.8%, with growth of 12.3%. China, which is the largest exporter to US for Textiles &

Apparels, in the same period grew its exports of ‘Made Ups/ Misc’ by 2.6% only.

Cotton Scenario:

India is expected to be the largest cotton producer in the world at the end of the cotton marketing year 2015-16, which starts from August 1. It will be closely followed by China and United States in the 2nd and 3rd place respectively. Together, the three countries produce nearly 2/3rd of world’s total cotton production. In FY 2015-16, the worlds total cotton production is expected to fall by 15.9% to 100.22 million bales.

All major cotton producing countries were expected to show a Y-o-Y decline in production in FY 2015-16 due to inclement weather, especially in Pakistan, India and United States. In China, withdrawal of government support and major reduction in price realizations, led to a 22.7% decline in area under cultivation. This figure, i.e. decline in land area under cotton cultivation, for India was 7.1%. Hence, production in India has been estimated to decline by 9.2% to 26.8 million bales. However, all other top 5 producers except Brazil, would see a decline of more than 15% in FY 2015-16.

Opportunities and threats

India is one of the most efficient and competitive spinning industries of the world. India is the second largest textile manufacturing infrastructure in the world after China. Indian Textile Industry accounts for about 24% of the world’s spindle capacity and 8% of global rotor capacity, Production of spun yarn registered impressive growth during the last 12 years and cotton yarn accounted for over 2/3rd of production throughout the period. Consumption of yarn and its exports also increased during the period. China reducing its spinning activities, India will have a growing opportunity in the global markets in this segment in the coming years. Yarn exports, therefore, need to be encouraged.

Cotton is one of the principle crops of the country and is the major raw material for domestic textile industry. It provides sustenance to millions of farmers and also the workers involved in cotton industry, right from processing to trading of cotton. The Indian textile industry consumes a diverse range of fibres and yarn, but is predominantly cotton based. Indian Textile Industry has an overwhelming presence in the economic life of the country.

According to the Ministry of Textiles, the domestic textile and apparel industry in India is estimated to reach US$ 141 bn by 2021 from US$ 58 bn in 2011. Apparel exports from India are expected to increase to US$ 82 bn by 2021 from US$ 31 bn in 2011. Total cloth production in India is expected to grow to 112 bn square meters by FY 2017 from 62 bn square meters in FY 2011.

Risks and concerns

Raw Cotton, an agricultural product, is the key raw material used for the manufacture of cotton yarn. Almost 65% of area under cotton cultivation is rain-fed and hence is dependent on vagaries of monsoon. Adequate availability of raw cotton at right prices is crucial for the Company. Any disruption in the supply and/or changes in the cost structure would affect the profitability of the Company. Any adverse measures in terms of tariff and non-tariff barriers, even in a comparative sense with respect to competing countries, affected by the Company’s target markets are likely to pose a serious threat to its business.

Outlook

Indian Textile Industry has a good opportunity as share of exports of textiles from China is going down. Indian Textile Industry can expect good growth in domestic consumption. The likely stability in the cotton prices and adequate availability of cotton will be beneficial for the industry. Moreover, with expected stability in the cotton prices, limited possibility of change in China''s policy on import of cotton and cotton yarn in the near term with import of cotton yarn remaining duty free and continued dependence of China on imports to meet its requirement, the yarn export volumes are likely to sustain which will support the capacity utilization and thereby the profit margin of the spinning mills in coming years.

However, the above assumption is contingent upon export demand sustaining, given the high export dependence of the domestic spinning industry. Any decline in the export demand will immediately result in shift of the export supply to the domestic market, which will impact the utilization levels and profit margins of the spinning mills.

Dividend

In order to conserve the resources, the Board of Directors of the Company has not recommended any dividend on equity shares of the Company for the financial year under review.

Segment

The Company is engaged only in one segment i.e. Textile Segment.

Directors and Key Managerial Personnel (KMP)

Pursuant to the provisions of Section 152 of Companies Act 2013, Mr. Anil Kumar Jain (DIN: 00086106) Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Board recommends his re-appointment. As required under provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (“SEBI (LODR) Regulations, 2015”) and Companies Act, 2013, brief profile and other details of Mr. Anil Kumar Jain are provided in the Notice of Annual General Meeting.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act, 2013 and Regulation 16 (1) (b) of SEBI (LODR) Regulations, 2015.

During the year under review, Mr. Abhishek Thareja resigned from the position of Company Secretary and Compliance Officer of the Company w.e.f 14th August, 2015. Further, Mrs. Amruta Avasare was appointed as the Company Secretary and Compliance Officer of the Company w.e.f 9th February, 2016. Mr. Ashok G. Halasangi was the Compliance Officer of the Company during the period of vacancy in the position of Company Secretary.

As on 31st March, 2016, pursuant to Section 203 of the Companies Act, 2013, Mr. Ashok G. Halasangi, Chief Executive Officer, Mr. R. Sundaram, Chief Financial Officer and Mrs. Amruta Avasare, Company Secretary are Key Managerial Personnel (KMP) of the Company.

During the year under review, 5 Board Meetings were held viz on 9th May, 2015, 30th June, 2015, 31st July, 2015, 20th October, 2015 and 6th February, 2016, the details of which are given in the Corporate Governance Report.

Directors’ Responsibility Statement

In terms of Section 134 (3) (c) of the Companies Act, 2013, your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, state that:

a. in the preparation of the Annual Financial Statements for the year ended 31st March, 2016, the applicable Accounting Standards have been followed along with proper explanations relating to material departures, if any;

b. such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit of the Company for the year ended on that date;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the Annual Financial Statements have been prepared on a going concern basis;

e. proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f. systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Audit Committee

As on 31st March, 2016, the Audit Committee comprises of Mr. S. K. Agrawal (Chairman), Mr. P. N. Shah, Mr. R. Anand and Mr. Kamal Mitra. All the recommendations made by the Audit Committee were accepted by the Board.

Company’s policy on appointment and remuneration of Directors

The Company has been following well laid down policy on appointment and remuneration of Directors, KMP and Senior Management personnel.

The appointment of Directors is made pursuant to the recommendation of Nomination and Remuneration Committee (NRC).

The remuneration of Non-Executive Directors comprises of sitting fees in accordance with the provisions of Companies Act, 2013 and reimbursement of expenses incurred in connection with attending the Board Meetings, Committee Meetings, General Meetings and in relation to the business of the

A brief extract of the Remuneration Policy on appointment and remuneration of Directors, KMP and Senior Management is provided in the Corporate Governance Report.

Performance Evaluation of Directors

Criteria of performance evaluation of the Board of Directors including Independent Directors are laid down by Nomination and Remuneration Committee of the Company. Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the Board has carried out the annual performance evaluation of the entire Board, Committees and all the Directors based on the parameters specified in the Corporate Governance Report. The parameters of performance evaluation were circulated to the Directors in the form of questionnaire.

Vigil Mechanism / Whistle Blower Policy

Pursuant to the provisions of Section 177 (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, the Company has established a vigil mechanism / Whistle Blower Policy. The details of vigil mechanism are provided in the Corporate Governance Report. The Vigil Mechanism / Whistle Blower Policy may be accessed on the Company’s website at www.pranavaditya.com.

Obligation of Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

In order to prevent sexual harassment of women at workplace, the Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to look into complaints relating to sexual harassment at workplace of any woman employee. During the year under review, the Company has not received any complaint under the said policy.

Statutory Auditors

At the Annual General Meeting of the Company held on 23rd August, 2014, M/s. B. K. Shroff & Co., Chartered Accountants, were appointed as Statutory Auditors of the Company for a period of 3 years to hold office from the conclusion of the 24th Annual General Meeting till the conclusion of the 27th Annual General Meeting of the Company, subject to ratification by the members at each Annual General Meeting.

The Audit Committee and the Board of Directors of the Company have recommended to the members of the Company, ratification of appointment of M/s. B. K. Shroff & Co., Chartered Accountants, as Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of the 27th Annual General Meeting of the Company. The Company has received a letter from B. K. Shroff & Co. confirming that they are eligible for ratification of their appointment.

Auditors’ Report

The Auditors’ Report on Standalone financial statements forms part of the Annual Report. The Auditors’ Report does not contain any qualification, reservation, adverse remark, disclaimer or emphasis of matter. Notes to the Financial Statements are self-explanatory and do not call for any further comments.

The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143 (12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment for the time being in force).

Internal Audit

M/s. Suresh Kumar Mittal & Co., Chartered Accountants are appointed as Internal Auditors of the Company and their report is reviewed by the Audit Committee from time to time.

Related Party Transactions

All Related Party Transactions entered during the financial year under review were on an arm’s length basis and in the ordinary course of business. Note No. 27 to the Financial Statements contains details of Related Party Transactions. No Related Party Transaction was in conflict with the interest of the Company. No materially significant Related Party Transaction was made by the Company with the Key Managerial Personnel. As prescribed by Section 134 (3) (h) of the Companies Act, 2013 and Rule 8 (2) of the Companies (Accounts) Rules, 2014, particulars of contracts / arrangements with Related Parties are given in Form AOC-2, annexed as “Annexure 1” to this Report.

The policy on Related Party Transactions has been uploaded on the Company’s website and can be accessed at http://www.pranavaditya.com/admin/uploads/pdf/PSML%20Pol icy%20on%20Related%20Party%20Transactions.pdf

Extract of Annual Return

Pursuant to Section 92(3) of the Companies Act, 2013, Extract of the Annual Return of the Company in Form MGT-9 is annexed as “Annexure 2” to this Report.

Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed S. Anantha Rama Subramanian, Proprietor of S. Anantha & Co., Practising Company Secretaries to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report issued by him is annexed herewith as ‘Annexure 3’. The Secretarial Audit Report does not contain any qualification, reservation, disclaimer or adverse remark.

Corporate Governance

In terms of SEBI (LODR) Regulations, 2015, a Corporate Governance Report along with Statutory Auditor’s Certificate confirming its compliance is provided separately and forms integral part of this Report.

Particulars of Loans given, Investments made, Guarantees given and Securities provided

During the year under review, pursuant to Section 186 of the Companies Act, 2013, no Loans were given nor any Guarantees or securities were provided. Details of investments made by the Company are provided in Note No. 10 to the Financial Statements.

Human Resources

Your Company has always provided a congenial atmosphere for work to its employees. Your Company is an equal opportunity employer and offers opportunities to all without regard to their caste, religion, colour, marital status and sex. During the year under review, industrial relations remain cordial.

Particulars of Employees and other related disclosures

During the year 2015-16, there are no employees who draw remuneration in excess of the limits prescribed under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The Disclosure pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in “Annexure 4” to this Report.

Conservation of Energy, Technology Absorption & Foreign Exchange Earnings & Outgo

Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo required under Section 134 (3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in “Annexure 5” forming part of this Report.

Internal control systems and their adequacy

The Company maintains adequate internal control system and procedures commensurate with its size and nature of operations. The internal control systems are designed to provide a reasonable assurance over reliability in financial reporting, ensure appropriate authorization of transactions, safeguarding the assets of the Company and prevent misuse / losses and legal compliances.

The Internal Audit reports are periodically reviewed by the Management and the Audit Committee and necessary improvements are undertaken, if required.

Risk Management

The Company has in place Risk Management System which takes care of risk identification, assessment and mitigation. There are no risks which, in the opinion of the Board, threaten the existence of the Company.

Deposits

During the year under review, no deposits were accepted by the Company under Chapter V of the Companies Act, 2013.

Significant or Material orders passed by Regulators / Courts

During the year under review, 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 state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Cost Audit

2. Corporate Social Responsibility

3. Issue of equity shares with differential rights as to dividend, voting or otherwise or issue of Sweat Equity Shares.

4. The Company does not have any subsidiaries or joint ventures or associate companies as defined under Companies Act, 2013.

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2015-16 and the date of this report.

Our growth has been made possible because of our culture of professionalism, integrity and continuous evolvement.

Your Directors take this opportunity to thank Central and State Governments, our customers, suppliers, investors and bankers for their consistent support and co-operation to the Company. We place on record our appreciation for the contribution made by employees at all levels.

For On behalf of Board of Directors

S. K. AGRAWAL

CHAIRMAN

DIN:00400892

Dated: 8th June, 2016

Place: Mumbai


Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting their 25th annual report on the business and operations of your Company together with the audited financial statements and the Auditor's Report for the financial year ended March 31,2015.

(Rs. In lac, except EPS)

Financial Results 2014-15 2013-14

Revenue 6584.82 7305.18

EBIDTA 204.28 451.76

Less: Interest 29.96 25.82

Less: Depreciation 56.60 45.88

Less: Exceptional Item - -

Profitbefore Tax 117.72 380.06

Provisionfor Tax 34.85 123.57

Net Profit 82.87 256.54

EPS (Rs.) 0.43 1.33

Cash Profit 150.77 349.81

Net Profit for the year 82.87 256.54

Add: Balance in Profit & Loss Account 426.69 170.15

Sub-total 509.56 426.69

Less: Adjustment on account of depreciation (2.71) -

Balance carried to Profit & Loss Account 506.85 426.69

Operational and financial performance overview

During the financial year under review, the Company achieved revenue of Rs. 6584.82 lac as compared to Rs. 7305.18 lac in the previous year. There has been a drop in the EBIDTA from Rs. 451.76 lac to Rs. 204.28 lac. Net profit during the year is Rs. 82.87 lac as compared to Net profit of Rs.256.54 lac in the previous year.

The Company performed reasonably during the fiscal year 2013- 14. Performance for the year under review was affected as the Spinning Industry went into tailspin due to a number of factors. The majorcauses were:

* Raw cotton prices crashed globally by almost 50% and the benchmark New York Futures plunged from over 90 cents a pound in July 2014 to below 60 cents by Oct l Nov 2014. Indian cotton prices were no exception and crashed steeply.

* Spinning Mills, were left with high-priced cotton, with resultant value losses.

* The major factor in causing cotton price crash was significant changes in Chinese Cotton Procurement policies, which in the past had kept the global prices buoyant.

The reduced demand of Cotton from China, negatively impacted the cotton prices. The cotton prices fell below the Minimum Support Prices and Government of India started procuring cotton at minimum support price through Cotton Corporation of India (CCI), which resulted in non-availability of cotton to the Spinning Mills at reasonable price.

The fall in prices of yarn in export market due to sluggish demand for yarn in the China, Europe, Japan and other major yarn importing Countries from India negatively impacted the profitability of the Company.

Consequently, yarn prices also fell significantly leading to lack of parity between cotton and cotton yarn prices. The cotton yarn exports from India into China also dropped by nearly 23%.

These factors had a bearish effect on both demand and sales realization in the international as well as domestic market. Salaries & Wages continued to rise during the year besides hike in power cost, thereby impacting the manufacturing margins.

Corporate Governance

In terms of Clause 49 of the Listing Agreement with the Stock Exchanges, a separate report on Corporate Governance along with Auditor's Certificate confirming its compliance is annexed and forms integral part of this Report.

Related Party Transactions

All related party transactions entered into during the financial year were on an arm's length basis and in the ordinary course of business. Note 29 to the financial statement sets out related party disclosure. No related party transaction was in conflict with the interest of the Company. No materially significant related party transaction was made by the Company with the Key Managerial Personnel. As prescribed by Section 134(3)(h)ofthe Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, particulars of related party transactions are given in Form AOC-2, as "Annexure 1" to this Report. Company has adopted a policy on Related Party Transactions as approved by the Board.

Vigil Mechanism / Whistle Blower Policy

The Company has a vigil mechanism to deal with instance of fraud and mismanagement, if any. The details of vigil mechanism are explained in the Corporate Governance Report.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board carries out performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees. The manner in which the evaluation is carried out has been explained in the Corporate Governance Report.

Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

Extract of Annual Return

Extract of the Annual Return of the Company in form MGT 9 is appended as "Annexure 2" to this Report".

Secretarial Audit Report

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 had appointed C V Kulkarni & Co., (CP No. 2792, FCS: 3342),Company Secretaries to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report is annexed herewith as 'Annexure 3'. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Internal Audit

M/s. Suresh Kumar Mittal & Co., Chartered Accountants performs the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time.

Obligation of Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.

Company has adopted a policy for prevention of Sexual Harassment at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint.

Particulars of Employees

The table containing the names and other particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as "Annexure 4" to the Board's Report.

A statement containing the names of every employee employed throughout the financial year and in receipt of remuneration of Rs. 60 lac or more, or employed for part of the year and in receipt of Rs. 5 lac or more a month, under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not provided, as none of the employees have been paid remuneration beyond the said limits.

Meetings

During the year 4 Board Meetings, 1 Independent Directors' meeting, 4 Audit Committee Meetings, 1 Nomination & Remuneration Committee Meeting and 1 Stakeholders' Relationship Committee, were held. The details of the meetings are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

Particulars of Loans given, Investments made, Guarantees given and Securities provided are provided in the financial statement (Please refer to Note 29 to the financial statement).

Directors' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a. that in the preparation of the annual financial statements for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Auditors

M/s. B K Shroff & Co., Chartered Accountants, have been appointed as Auditor of the Company for a period of 3 years to hold office from the conclusion of the 24th Annual General Meeting to the conclusion of the 27th Annual General Meeting of the Company, subject to ratification by the members at each Annual General Meeting.

The Audit Committee and the Board of Directors have recommended to the members of the Company, ratification of appointment of M/s. B KShroff& Co., Chartered Accountants, as Auditor to hold office from the conclusion of the ensuing Annual General Meeting to the conclusion of the 26th Annual General Meeting of the Company.

Auditors' Report

The Auditors' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self- explanatory and do not call for any further comments.

Conservation of Energy, Technology Absorption & Foreign Exchange Earning & Outgo

Information required under Section 134(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in "Annexure 5" forming part of this Report.

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 year 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. Mr. Anil Kumar Jain & Mr. Kamal Mitra who are Non- Executive Directors of the Company are executive directors of Indo Count Industries Limited (Holding Company) in the capacity of Chairman & Managing Director and Director (Works), respectively.

4. 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.

Acknowledgements

Our growth has been made possible because of our culture of professionalism, integrity and continuous evolvement.

Your Directors take this opportunity to thank Central and State Governments, our customers, suppliers, investors and bankers for their consistent support and co-operation to the Company. We place on record our appreciation of the contribution made by employees at all levels, without whose whole-hearted efforts, the overall performance would not have been possible.

Your Directors look forward to the long term future with confidence.

On behalf of Board of Directors

S. K. AGARWAL CHAIRMAN

Mumbai, 9th May, 2015 DIN:00400892


Mar 31, 2013

The directors are pleased to present the TWENTY THIRD ANNUAL REPORT together with the audited fnancial statements and auditors'' report for the fnancial year ended 31st March 2013.

(Rs. in Lacs)

Financial Results Current Year Previous Year change

Revenue 6076.30 4,774.29 27%

1. EBIDTA 509.73 (215.70) 236%

2. Less: Interest 34.39 32.87

3. Cash Proft 420.84 (248.57)

Less: Depreciation 39.56 57.73

4. Proft before tax 435.71 (306.29) 142%

5. Provision for Taxation 147.79 95.39

6. Net Proft/(loss) After Taxation 287.99 (210.90)

Dividend

Your Directors intend to plough back available resources for fnancial requirements and express their inability to recommend any dividend for the year under review.

PERFORMANCE REVIEW

During the year under review, the Company has achieved a revenue of about Rs. 61 crores as against about Rs. 48 crores in the previous year, thereby registering a growth of over 27%. EBIDTA during the above period stands increased from about Rs. (2.16) crores to about Rs. 5.10 crores, a growth of over 236%.

Business Outlook

Cotton yarn manufacturers to beneft from slow but steady pick- up in International/domestic demand and likely higher demand of cotton yarn from China and improving margins on account of low cotton prices and frm cotton yarn prices. Stability in cotton prices will enable spinning mills to better plan the inventory buying. However, spinners in Southern India and Gujarat continue to under utilise capacity due to power shortage or incur high cost of self-generated power.

With the recovery in the US and European economies, the International Market for your Company''s product will be cheered up in the years to come. The prices of raw cotton and yarn have started scaling up, which augurs well for the industry. Considering the better prospects for the Textile business, your Company has increased production capacities. The Company is scouting for Term Loan facility to expand the spindlage to take advantage of the situation for Indian Textile Industry.

Corporate Governance

The corporate governance report together with a certifcate from the Company''s auditors confrming compliance of guidelines are made part of this Report as per clause 49 of the listing agreement entered into with the Stock Exchanges.

Directors'' Responsibility Statement

Pursuant to the requirement under section 217 (2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confrmed:

- that in the preparation of the accounts for the fnancial year ended on 31st March 2013, the applicable accounting standards have been followed and there are no material departures.

- 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 fnancial year and of the Proft of the Company for the year under review.

- that the Directors have taken proper and suffcient 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.

- that the Directors have prepared the annual accounts ended on 31st March 2013 on a ''going concern'' basis.

Directors

In accordance with the provisions of the Companies Act, 1956, Mr. Anil Kumar Jain and Mr. R. Anand, retire by rotation and being eligible, offer themselves for reappointment.

Auditors

M/s. B K Shroff and Co., Chartered Accountants retire at the end of this Annual General Meeting and are eligible for reappointment as auditors.

Conservation of Energy, Technology Absorption & Foreign Exchange Earning & Outgo

Statement required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure "A" forming part of this Report.

Acknowledgements

Your directors are grateful to the customers, suppliers and employees for their Co-operation and assistance during the year under review.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Company''s objectives, projections, estimates, expectations may be ''forward-looking statements'' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could infuence the Company''s operations include economic developments outside the country, global demand and supply conditions in the industry, input prices, changes in government regulations, tax laws and other factors such as litigation and industrial relations.

On behalf of Board of Directors ANIL KUMAR JAIN

Mumbai, 24th May 2013 DIRECTOR


Mar 31, 2010

The Directors have pleasure in presenting the Twenty First ANNUAL REPORT and the Audited Statement of accounts of the year ended 31st March 2010.

FINANCIAL RESULTS

(Rs. in Crore)

Particulars Current Previous Year Year

TOTAL INCOME 396.99 290.23

Gross Operating Profit (before

exceptional items) 28.92 37.15

Less: Interest 27.32 21.43

Profit/(loss) before Depreciation,

Taxation and exceptional items 1.60 15.72

Less: Depreciation 18.09 18.53

Profit/llossl Before Tax (16.49) (2.81)

Exceptional item - Exchange gain/doss) (11.52) (67.72)

Provision for Taxation 9.40 18.02

Net Profit/doss) After Taxation (18.61) (52.51)

Balance Brought Forward (15.67) (11.99)

Less: Transfer from General Reserve 0.00 48.83

Surplusl(deficit) Carried to Balance Sheet (34.28) (15.67)



Performance Review

Company as a Whole

During the year under review, the Company has earned a total income of Rs 396.99 crore as against Rs 290.23 crore during the previous year registering a growth of about 37%

Textile Division

During the year under review, this Division has recorded a sales turnover of Rs. 349.24 crore as against Rs. 278.58 crore in the previous year, registering about 25% growth.

The operating profit of the Division remained moderate, despite sharp appreciation in the cost of basic inputs like Cotton, Yarn, Power, Labour etc.

At this back drop, we are privileged to inform you that during the year under review, your Company was conferred with the following prestigious awards by an apex Textile Institution in India viz. TEXPROCIL :-

1. Silver Trophy for Second highest Exports of other Cotton Made- Ups and

2. Bronze Trophy for Third highest Exports of Bed Linen/ Bed Sheets/Quilts.

Electronic/Consumer durable goods Division

During the year under review Electronic Division has scaled up its operations since August 2009 and has registered a sales turnover of Rs 47.75 Crore as against Rs 11.65 Crore during the previous year, registering an excellent growth of 312%.

Business Outlook

Textile Division

Stiff competition from China, prevailing in the Export market had made Indian Exports to strive more to keep their presence in the International market. However, Indian Textile Exporter will have a sharp edge over Chinese Market, as Chinas problems are surging raw material prices, high labour costs. The Global economy is improving, in general, which influenced the markets of USA and Eurpoe, and these markets are on the recovery path. Management hopes that the recessionary trend will not last long and there is promising future for the Indian Textile Industry.

Costs of the major inputs have continued to escalate, exerting pressure on the margins, coupled with steep appreciation of Indian Rupee. Of late price realization of Yarn and Made Ups have started improving.

Steep rise in the Exports of cotton has caused price spiral in raw cotton and Yarn this year. Considering phenomenal increase in the costs of Raw Material and in order to boost the local sale of Yarn, the Government of India has withdrawn facility of DEPB and Duty Drawback on exports of Cotton Yarn (both for grey and dyed) with effect from 21-04-2010 and 29-04-2010, respectively, which might impact the margins of the Company in the days to come.

Your Companys Products are well accepted in the Export Market. Your Company has become a fully integrated unit having facilities from Spinning to Finished ready to use consumer goods, which is expected to create substantial value addition. Your Company believes that its scale of operations and integration across the Textile chain will, in future, offer significant advantages in both cost and revenue.

The demand for the Companys products, both from domestic and international markets is growing. The management hopes that Marketing initiatives across the world have both de-risked your Company as well as contributed healthy order book, which will enable your Company to carve out a niche market for its products in the coming years. To take advantage of this growing domestic/international markets, your Company is also planning to establish Office/Showroom/warehouses in and outside India, which would help to dent new markets for the Companys Product.

To conclude, Indo Count withstand good preparatory dispositions and determination to stay on the forefront of global competition game in reaping benefits of the opportunities.

Electronic Division

The Consumer durable goods/Electronic Goods industry has witnessed a phenomenal growth over the past few years which can be attributed to the increasing effect of state of the art electronic devices in the market. The introduction of new technology has resulted in lower prices affordable to the masses.

Dividend

Due to losses, the Directors regret their inability to recommend dividend for the year.

Management & Discussion Analysis

Report of MDA is given in Annexure B forming part of this Report.

Segment

The Company is engaged in the manufacture and export of cotton yarn, grey knitted fabrics and cotton made ups, which are governed by the same set of risks and returns and as such are in the same segment.

The performance of the Electronic/consumer durable goods Division is reported as a separate segment.

Segment reporting as per AS 17 has been complied with.

Accounts

The Company has recognized in its books of accounts Deferred Tax Asset arising on account of tax effects of timing differences between the income tax and book depreciation. Your Directors expect that adequate profits will accrue in the future years from Companys business which will utilize the deferred tax asset fully.

Internal control systems and their adequacy

The Company has in place an elaborate internal control system to ensure proper authorization and accounting of transactions as also for safeguarding and protecting Companys assets against loss. The internal auditors check the controls periodically and their report is reviewed by the management and the Audit Committee from time to time. The management feels that the system of internal controls is adequate considering the size of operations of the Company.

Human Resources

During the year, labour relations continued to be cordial.

Development of employee skills and imparting knowledge on social compliance audits, quality assurance are very important to the business, for which training is conducted regularly.

Particulars of employees in accordance with the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, are not given, as none of the employees qualify for such disclosure.

Corporate Governance

The Corporate Governance report together with a certificate from the Companys Auditors confirming compliance of guidelines are made part of this Report as per Clause 49 of the Listing Agreement entered into with the Stock Exchanges.

Directors Responsibility Statement

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed:

a) that in the preparation of the accounts for trie financial year ended on 31s1 March 2010, the applicable Accounting Standards have been followed and there are no material departures.

b) 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.

c) 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.

d) that the Directors have prepared the Annual Accounts ended on 31st March 2010, on a going concern basis.

Directors

In accordance with the provisions of the Companies Act, 1956, Mr. R N Gupta, Mr. P N Shah, and Mr. Kamal Mitra retire by rotation and being eligible, offer themselves for reappointment.

Mr. R G Kelkar, Nominee of Union Bank of India, joined the Board of the Company with effect from 30-09-2009. Mr. Prem Malik has been appointed as an additional Director an the Board of the Company with effect from 30-10-2009.

Auditors

M/s. B K Shroff and Co., Chartered Accountants retire at the end of this Annual General Meeting and are eligible for reappointment as auditors.

The observations of Auditors on MTM losses on outstanding derivative contracts, as referred in Auditors Report are suitably explained in the Notes on Accounts. It is pertinent to mention that these losses are notional until they are crystallized on due dates.

Your Directors feel that the Company can meet its obligations arising out of these contracts.

Cost Auditor

Pursuant to the directives of the Central Government under the provisions of Section 233B of the Companies Act, 1956, and subject to the approval of the Central Government, M/s S N Bawadekar & Co., Cost Accountants, Mumbai, have been appointed as Cost Auditor to conduct cost audit relating to the products manufactured by your Company.

Companys Subsidiary

Pursuant to the provisions of Section 212 of the Companies Act, 1956, information on Companys Subsidiary viz. Pranavaditya Spinning Mills Ltd., has been attached forming part of Annual Report of the Company.

Conservation of Energy, Technology Absorption & Foreign Exchange Earning & Outgo

Statement required under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure "A" forming part of this Report.

Acknowledgements

Your Directors are grateful to the customers, suppliers, banks, financial institutions and employees for their co- operation and assistance during the year under review.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic developments outside the country, global demand and supply conditions in the industry, input prices, changes in government regulations, tax laws and other factors such as litigation and industrial relations.



On behalf of Board of Directors

Place: Mumbai Anil Kumar Jain

Date: 1st June 2010 Chairman and Managing Director

Find IFSC