Mar 31, 2015
Dear Members,
We are pleased to present the 25th Annual Report of the Company and the
audited statement of accounts for the year ended 31st March, 2015. A
summary of the financial results is given below. The performance of the
Company during the year has been adversely affected due to higher input
costs on the one hand and pressure on selling prices on the other,
because of demand recession. Labour relations at all the plants are
cordial and an atmosphere of mutual trust and confidence prevails.
SUMMARISED FINANCIAL RESULTS:
Year ended Year ended
Financial Hilights 31.03.2015* 30.09.2014
(Rs. in lacs) (Rs. in lacs)
Revenue from Operations 20452.49 40660.72
Profit before Interest, Depreciation (3525.83) (1909.55)
& Tax
Less: Interest 275.29 6133.15
Profit /(Loss) before Depreciation (3801.12) (8042.70)
Less: Depreciation 873.59 2176.27
Profit/ (Loss) before Taxes (4674.71) (10218.97)
Exceptional items - 944.33
Less : - Current Tax - -
- Previous years Tax - -
- Deferred Tax - -
Net Profit/ (Loss) after Taxes (4674.71) (11163.30)
Add : Surplus brought forward from (19903.09) (8739.79)
previous year
Balance Carried to Balance Sheet (24577.80) (19903.09)
* Period from 01.10.2014 to 31.03.2015 (6 months)
OPERATIONS & PERFORMANCE:
During the period under review, the Company's operation remained at
near similar levels as previous year. However, due to accumulated
losses of earlier years, the Company continued to face a strain on its
working capital resources, which in turn impacted the overall
profitability and capacity utilization of the plant. Despite the
liquidity constraints the Company continued maintaining production
activity at all its facilities, and was able to retain its dealings
with suppliers and customers.
The overall performance of the Company for the period of 6 months ended
31.03.2015 was a loss of Rs. 4674.71 lacs in comparison to the net loss
of Rs. 11163.30 lacs of previous period of 12 months ended 30.09.2014.
During the period under review, your Company has achieved a turnover of
Rs. 20452.49 lacs against the previous year's (12 months) turnover of
Rs.40660.72 lacs.
During the period under review the Company was unable to fulfill its
sales commitments to its customers as no financial assistance or
utilisation of sanctioned facilities was available to the Company, and
that the latter has had to suffer losses and make provisions for loss
in value of inventories and was unable to recover full amounts from its
several customers outstanding for long. The Company expects that the
lenders will accede to its requests and permit dealings to the Company
so that business is not lost and operations stabilize at higher levels.
EROSION OF ENTIRE NET WORTH:
Consequent to accumulated losses of the Company exceeding its net worth
during the accounting period ended 30th September 2014, and the Company
having become a sick industrial company within the meaning of section
3(1) (o) of the Sick Industrial Companies (Special Provisions) Act.
1985, a Reference was filed by the Company before the Hon'ble Board for
Industrial and Financial Reconstruction (BIFR).
The Company will be proposing a comprehensive scheme for restructuring
of its business and affairs, and is keen that the said scheme is
considered and approved by all stakeholders, and sanctioned by the
Hon'ble BIFR. The scheme to be proposed by the Company will incorporate
the restructuring as may have been sanctioned by lenders and other
stakeholders by such time.
OUTLOOK:
The Company's restructuring last carried out in 2009 is no longer under
the monitoring of CDR Forum. However the Company has submitted
rehabilitation cum settlement proposal to all its lenders and is
hopeful of its early consideration.
The Management of the Company is discussing various options for
restructuring of debts and its proposal to the lenders is based,
inter-alia, on the following:
* Restructuring / realignment / re-sizing of it's the debts in
accordance with various Guidelines and precedents, which will help
reduce costs on account of interest.
* Improving operational efficiencies, and rationalization of manpower
and other costs.
* Continually developing lower cost variants of value added yarns.
* Disposal of noncore assets to generate funds to augment working
capital resources.
The Company's proposal to its lenders also envisages that petitions and
applications pending before various Courts, amongst others, under
Recovery of Debts Due to Banks and Financial Institutions Act, 1993
Securitisaiton and Reconstruction of Financial Assets and Enforcement
of Security Interest Act, 2002, will stand compromised with both
parties giving up their respective claims and the Company being
required to pay restructured amount of debt.
The lenders had appointed a Techno-Economic expert to assess viability
of the Company's plant and its operations, which report is awaited, and
a decision in the matter may emerge soon thereafter.
SUBSIDIARY COMPANIES:
According to the provisions of Section 129 of Companies Act, 2013, a
statement containing salient features of the financial statements of
the Company's subsidiaries in Form AOC-1 is attached to the financial
statements of the Company.
As required by Accounting Standard - 21 issued by the Institute of
Chartered Accountants of India the consolidated financial statements,
included in this Annual Report, incorporate the accounts of its
subsidiary Companies namely Winsome Yarns (Cyprus) Limited and Winsome
Yarns (FZE) (as at 31.03.2015, unaudited, ceased operations, declared
defunct effective 01.04.2014).
Pursuant to the provisions of Section 136 of the Companies Act, 2013,
the financial statements of the Company, consolidated financial
statements along with relevant documents and separate audited/
unaudited accounts in respect of subsidiaries are available on web site
of the Company.
The ongoing business recessionary conditions in European Countries,
caused negative effects to the three step down subsidiaries of the
Company, namely, S.C. Winsome Romania, S.r.l., IMM Winsome Italia
S.r.l. and S.C. Textil, S.r.l., which were placed under liquidation,
and therefore, their Balance Sheets and other financial statements are
not available; accordingly, the instant consolidated financial
statements of the Company do not include the financials of the above
named three subsidiary Companies
The present status of these three subsidiary companies is given as
under:-
Sr. No. Name of Subsidiary Start of liquidation process
1 IMM Winsome Italia S.r.l. 30.09.2008
2 S.C. Winsome Romania S.r.l. 26.11.2008
3 S.C. Textil S.r.l. 09.02.2010
Sr. No. Name of Subsidiary Present status
1 IMM Winsome Italia S.r.l. Under Liquidation.
2 S.C. Winsome Romania S.r.l. Under Liquidation.
3 S.C. Textil S.r.l. Under Liquidation.
ISO 9001/ 2008:
Your Directors are pleased to inform you that your Company continues to
be the holder of ISO 9001/2008 certificates.
DIVIDEND:
Your Directors are unable to recommend any dividend on equity shares
for the year under review.
SHARE CAPITAL:
During the year the company has not allotted any securities.
DIRECTORS:
(a) Ms. Ishika Aggarwal has been appointed as an Additional Director on
31.03.2015 of the Company for a period of five years pursuant to the
provisions of Sections 149, 152 and any other applicable provisions, if
any, of the Companies Act, 2013 read with Schedule IV to the Companies
Act, 2013, the rules made there under (including any statutory
modification(s) or re-enactment thereof for the time being in force).
Ms. Ishika Aggarwal is Bachelor of Science and Masters of Business
Administration. This had also fulfill the requirement of having a woman
Director on the Board of Directors under the Companies Act, 2013.
(b) Shri K. P. Ramakrishnan has been appointed as an Additional Director
on 29.11.2014 of the Company for a period of five years pursuant to the
provisions of Sections 149, 152 and any other applicable provisions, if
any, of the Companies Act, 2013 read with Schedule IV to the Companies
Act, 2013, the rules made there under (including any statutory
modification(s) or re-enactment thereof for the time being in force).
Shri K. P. Ramakrishnan is B.Tech (Metallurgy) from IIT, Chennai. He has
around 36 years of experience in Banking Sector and has worked at
various levels in different locations in India. He retired as Chief
General Manager from IDBI Bank in 2014.
(c) Shri B. M. Padha was nominated as director of the Company by Punjab
National Bank and the Board of the Company has appointed w.e.f.
18.10.2014 as Nominee Director of the Company.
(d) Shri Satish Bagrodia, Director, retires by rotation and being
eligible, offers himself for re-election.
(e) None of the Directors are disqualified under the provisions of
Section 164(2) of the Companies Act, 2013. The Directors have made the
requisite disclosures, as required under the provisions of Companies
Act, 2013 and Clause 49 of the Listing Agreement.
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 own 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 individual Directors, the Board and its various
committees were discussed in detail. A structured questionnaire each
for evaluation of the Board, its various Committees and individual
Directors was prepared and recommended to the Board by Nomination &
Remuneration Committee for doing the required evaluation after taking
into consideration the input received from the Directors covering
various aspects of the Board's functioning and its Committees,
execution and performance of specific duties, obligations and
governance etc.
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 judgement, safeguarding the interest of the Company and
its minority shareholders etc. The performance evaluation of the
independent Directors was carried out by the entire Board. 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.
NO. OF BOARD MEETINGS:
Three board meetings were convened and held during the financial year
2014-15, comprising a period of 6 months from 01.10.2014 to 31.03.2015.
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.
AUDITORS:
M/s. Lodha & Co., Chartered Accountants (Firm Registration Number:
301051E), who are Statutory Auditors of the Company hold office up to
the forthcoming Annual General Meeting and are recommended for
re-appointment to audit the accounts of the Company for the Financial
Year 2015-16. As required under the provisions of Section 139 of the
Companies Act, 2013, the Company has obtained written confirmation from
M/s Lodha & Co. that their appointment, if made, would be in conformity
with the limits specified in the said Section.
AUDITORS' REPORT:
The Statutory Auditors of the Company have submitted Auditors' Report
on the accounts of the Company for the financial year ended March 31,
2015. The explanation/ comments of the Board on every qualification/
reservation or adverse remarks given by the Auditor in its report is
annexed herewith as Annexure 'A'.
COST AUDITORS AND COST AUDIT REPORT:
Pursuant to Section 148 of the Companies Act, 2013 read with The
Companies (Cost Records and Audit) Amendment Rules, 2014, the cost
audit records maintained by the Company in respect of various
activities are required to be audited. Your Directors had, on the
recommendation of the Audit Committee, appointed M/s. Balwinder and
Associates, Cost Accountants, to audit the cost accounts of the Company
for 2015-16 on a remuneration to be decided by the Managing Director of
the Company in consultation with the Cost Auditor, subject to approval
of the shareholders of the company. The Cost Audit of Textile Industry
was not required for the financial year 2014-15.
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. Girish Madan &
Associates, a firm of Company Secretaries in practice (C.P. No. 3577)
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 'B' to this Report.
PUBLIC DEPOSIT:
During the year, the Company has not accepted any deposits from the
public and as such, there are no outstanding deposits in terms of the
Companies (Acceptance of Deposits) Rules, 2014.
DIRECTORS' RESPONSIBILITY STATEMENT:
The Board of Directors acknowledge the responsibility for ensuring
compliance with the provisions of Section 134(3)(c) 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 that:
a. in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
b. 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 and loss
of the company for that period;
c. 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. the directors had prepared the annual accounts on a going concern
basis;
e. the directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively; and
f. 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.
KEY MANAGERIAL PERSONNEL:
Shri Manish Bagrodia, Managing Director, Shri Anand Balkishan Sharma,
President (Corporate Finance) and Chief Financial Officer (CFO) and
Shri K. V. Singhal, General Manager (Legal) & Company Secretary of the
Company are the Key Managerial Personnel of the Company.
CORPORATE GOVERNANCE:
A separate report on Corporate Governance is enclosed as a part of this
Annual Report. A certificate from the Secretarial Auditor of the
Company regarding compliance with Corporate Governance norms stipulated
under Clause 49 of the Listing Agreement is annexed to the Report on
Corporate Governance.
AUDIT COMMITTEE & RISK MANAGEMENT:
The details pertaining to composition of audit committee are included
in the Corporate Governance Report.
RISK MANAGEMENT
The Board of the Company has formed a risk management committee to
frame, implement and monitor the risk management plan for the Company.
The committee is responsible for receiving the risk management plan and
ensuring its effectiveness. The audit committee has additional
oversight in the area of financial risks and controls. Major risks
identified by the businesses and functions are systematically addressed
through mitigating actions on a continuing basis.
NOMINATION AND REMUNERATION COMMITTEE:
The Nomination and Remuneration Committee of the Company comprising
Shri Pradeep Kumar as Chairman, Shri Satish Bagrodia, Shri K. P.
Ramakrishnan and Shri S. K. Singla as its Members, met two times during
the year. The Committee formulated Remuneration Policy which is
attached as Annexure 'C' and forms a part of this Report of the
Directors.
RELATED PARTY TRANSACTIONS:
All transactions entered into with related parties as defined under the
Companies Act, 2013 and Clause 49 of the Listing Agreement during the
financial year were in the ordinary course of business and on an arm's
length pricing basis and do not attract the provisions of Section 188
of the Companies Act, 2013. There were no materially significant
transactions with the related parties during the financial year which
were in conflict with the interest of the Company and hence, enclosing
of Form AOC-2 is not required. Suitable disclosure as required by the
Accounting Standard (AS 18) has been made in the notes to the Financial
Statements.
All Related Party Transactions are placed before the Audit Committee.
Prior omnibus approval of the Audit Committee is obtained for the
transactions which are of a foreseen and repetitive nature. The
transactions entered into pursuant to the omnibus approval so granted
are audited and a statement giving details of all related party
transactions is placed before the Audit Committee for their approval on
a quarterly basis.
The policy on Related Party Transactions as approved by the Board is
uploaded on the Company's website. None of the Directors has any
pecuniary relationships or transactions vis-a-vis the Company.
DECLARATION BY INDEPENDENT DIRECTORS:
Necessary declarations have been obtained from all the Independent
Directors under sub-section (7) of Section 149 of the Companies Act,
2013.
SIGNIFICANT AND MATERIAL ORDER:
During the financial year, there was no significant and material order
passed by any Court or any Tribunal against the Company.
INTERNAL FINANCIAL CONTROLS:
The Company has in place internal financial control systems,
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.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under Section 134(3)(m)
of the Companies Act, 2013 read with Rule 8(3) of The Companies
(Accounts) Rules, 2014, is annexed herewith as Annexure 'D'.
ENVIRONMENT AND POLLUTION CONTROL:
Top priority continues to be given to preservation of the environment
by all the units of the Company. To combat pollution and strengthen the
area ecology, considerable emphasis is placed on plantation of fragrant
and shady trees. We are cautious of preserving water through recycling
and rainwater harvesting to the extent possible. All manufacturing
facilities possess the required environmental clearance from the
respective Pollution Control Boards and do comply with the relevant
legislation. The Company is well aware of its responsibility towards a
better and clean environment. Our efforts in environment management go
well beyond mere compliance with statutory requirements. The Company
has always maintained harmony with nature by adopting eco-friendly
technologies and upgrading the same from time to time incidental to its
growth programmes.
PARTICULARS OF EMPLOYEES:
The prescribed particulars of employees required under Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 is attached as Annexure 'E' and forms a part of this Report of the
Directors.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return as
provided under sub-section (3) of Section 92 of the Companies Act, 2013
is annexed herewith as Annexure 'F'.
CASH FLOW ANALYSIS:
In conformity with the provisions of clause 32 of the Listing
Agreement, the Cash Flow Statement for the year ended 31.03.2015 is
annexed with financial statements.
CONSOLIDATED ACCOUNTS
In accordance with Accounting Standards AS-21 on Consolidated Financial
Statements, your Directors provide the Audited Consolidated Financial
Statement of Winsome Yarns Limited, Winsome Yarns (Cyprus) Limited and
Winsome Yarns FZE in the Annual Report.
INSURANCE
All the properties of your Company have been adequately insured against
fire, flood, earthquake and explosive risks etc.
ACKNOWLEDGEMENTS:
Your Directors thank the various Central and State Government
Departments, Organizations and Agencies for the continued help and
co-operation extended by them. The Directors also gratefully
acknowledge all stakeholders of the Company viz. customers, members,
dealers, vendors, banks and other business partners for the excellent
support received from them during the year. The Directors place on
record their sincere appreciation to all employees of the Company for
their unstinted commitment and continued contribution to the Company.
Registered Office : On behalf of the Board,
SCO 191-192, Sector 34-A
Chandigarh - 160022 Manish Bagrodia Pradeep Kumar
Dated : 28.05.2015 Managing Director Director
Sep 30, 2014
Dear Members,
The Directors have pleasure in presenting the 24th Annual Report on
the affairs of the Company together with the Audited Accounts of the
Company for the financial year ended 30th September, 2014.
Financial Highlights Year ended Year ended
30.9.2014 30.9.2013*
(Rs. in lacs) (Rs. in lacs)
Revenue from Operations 40660.72 77772.43
Profit before Interest, Depreciation
& Tax (1909.55) 8514.99
Less: Interest 6133.15 8010.31
Profit /(Loss) before Depreciation (8042.70) 504.68
Less: Depreciation 2176.27 326797
Profit/ (Loss) before Taxes (10218.97) (2763.29)
Exceptional items 944.33 3483.85
Less : - Current Tax - -
- Previous years Tax - -
- Deferred Tax - 1233.24
Net Profit/ (Loss) after Taxes (11163.30) (7480.38)
Add : Surplus brought forward from
previous year (8739.79) (1259.41)
Balance Carried to Balance Sheet (19903.39) (8739.79)
* Period from 01.04.2012 to 30-09-2013.(18 months)
Operations & Performance
During the year in retrospect, the performance of the Company continued
to be stressed. The compounded impact of earlier year''s losses as
comprehensively highlighted in the last years Report to you, caused
further erosion of working capital funds resulting in subdued
operations. The several requests to lenders for restructuring &
enhancement of need based working capital funds have not been met with.
The current period under review faced additional challenges, like
sudden glut in the domestic and international market, with abnormal
increased input cost of raw material and power, fluctuating global
commodity prices and low demand coupled with high debt, had an adverse
financial impact on the Company.
The cumulative effect of all the above mentioned factors took a heavy
toll on the overall performance and the Company for the period of 12
months ended 30.09.2014 with a loss of Rs. 11163.30 lacs in comparison
to the net loss of Rs. 7480.38 lacs of previous period of 18 months
ended on 30.09.2013. During the year under review your Company has
achieved a turnover of Rs. 40660.72 lacs against the previous year''s
(18 months) turnover of Rs. 77772.43 lacs.
During the year under review, the exceptional increase in losses of the
Company is attributed to paucity of working capital funds and
exceptional items related to provisions for doubtful debts and
advances.
Erosion of Entire Net Worth
As per the audited financial statements as at 30th September 2014, the
accumulated losses of the Company have exceeded its entire net worth
and the Company has become a Sick Industrial Company under section
3(1)(o) of the Sick Industrial Companies (Special Provisions) Act.
1985. Though, the Board of Directors of the Company had sufficient
reasons to form an opinion that the Company had become a Sick
Industrial Company, on the basis of unaudited financial statements for
the period ended June 30, 2014 and accordingly a Reference was filed
with Board for Industrial and Financial Reconstruction under section
15(1) of the SICA on October 16, 2014 and registration of the same is
awaited.
Outlook:
In order to come out of the difficult situation and explore the current
opportunities, the Management of the Company has been working on
various options and some of the steps which would have an effect on the
overall performance of the Company for consideration of lenders of the
Company are listed as under:
- To restructure/ realign / re-size its debts in terms of CDR
Guidelines with an aim to reduce costs by increasing efficiencies,
rationalization of manpower and other costs.
- To continue with an effort on development of low cost variants of
value added yarns.
- To dispose of noncore assets of the Company and the funds so
generated will be infused in the working of the Company.
- To explore and develop overseas markets as export of yarn is
profitable on account of appreciation of US dollar.
- Govt. of Punjab has fully repaired the canal on which all the five
Micro Hydel Projects of the Company are situated. With this the water
availability will be much better and Company will be able to generate
more electricity. This will reduce the power cost.
- With revival of US economy the demand of yarn will increase, which
will result in increase in better margins.
In view of the above developments, the Company has made a proposal to
all lenders in April 2014, for deep restructuring with Holding on
Operations. The Lenders and CDR EG in its meeting held on 10.06.2014
decided that TEV Study of operation of the Company to be carried out,
which was assigned to M/S Dun & Bradstreet, who submitted the Report on
23.072014, endorsing the viability of the Company. However, lenders
were not willing to support restructuring proposal and decided for
initiating recovery actions under the RDDB & SARFAESI Acts. The recall
notices are being suitably replied under the guidance of legal experts
with a request to the lenders to withdraw the same in the interest of
all stakeholders and long term viability of the Company. The Company is
continuously pursuing the lenders to reconsider their decisions and
recommend for restructuring as requested. However, the holding on
operations was permitted by the lenders to the Company in October 2014.
The Company has raised its claim on the lenders for the amount of
losses suffered by the Company to the extent it considers the losses as
attributed to the lenders.
The management of the Company is making efforts for restructuring of
its business and affairs and expects to revive itself. The current
efforts are also targeted towards increasing its sales and profit
margins by increased production/ development of value added yarns. The
Company is also launching some new products with some major retailers
in US as well as Europe and other international markets.
Subsidiary Companies & Overseas Operations
According to the provisions of Section 212 of Companies Act, 1956, the
holding Company is required to attach the balance sheet etc. of its
subsidiary companies along with its Balance Sheet. However, pursuant to
provisions of general circular no. 2/2011 issued by Ministry of
Corporate Affairs on 8th February 2011, a general exemption is granted
to attach the balance sheet of the subsidiary companies. Accordingly,
the annual accounts of Winsome Yarns (Cyprus) Limited and Winsome Yarns
FZE have not been attached in this Annual Report, but the same are
available for inspection at the registered office of the Company.
Further, due to Global recession of which European Countries are the
worst affected, the three step down subsidiaries of the Company namely;
S.C. Winsome Romania, S.r.l., IMM Winsome Italia S.r.l. and S.C.
Textil, S.r.l. are under liquidation and their Balance Sheet etc. is
not available.
The exemption from attaching the Balance Sheet etc. of these three
subsidiary companies was sought, pursuant to Section 212(8) of
Companies Act, 1956, and in response to which, Ministry of Corporate
Affairs informed that pursuant to General Circular No. 2/2011 issued by
Ministry of Corporate Affairs the approval of Ministry of Corporate
Affairs is no more required.
The present status of these three subsidiary companies is given as
under:-
Name of Subsidiary Start of liquidation Present status
process
IMM Winsome Italia
S.r.l. 30.09.2008 Liquidation process is
going on.
S.C. Winsome Romania
S.r.l. 26.11.2008 Liquidation process is
going on.
S.C. Textil S.r.l. 09.02.2010 Liquidation process is
going on.
ISO 9001/ 2008
Your Directors are pleased to inform you that your Company continues to
be the holder of ISO 9001/2008 certificates.
Dividend
Your Directors are unable to recommend any dividend on equity shares
for the year under review.
Directors
In accordance with the Company''s Articles of Association, Shri Manish
Bagrodia, Director, retires by rotation and being eligible, offers
himself for re-appointment.
During the year 2013-14, the Punjab National Bank has withdrawn the
nomination of Shri Joginder Kumar Gupta from the Board of the Company
w.e.f. 14.072014 and nominated Shri Brij Mohan Padha in place of Shri
Joginder Kumar Gupta. The Board of Directors of the Company has
approved the nomination of Shri Brij Mohan Padha, Dy. General Manager,
Punjab National Bank w.e.f. 18.10.2014 as Nominee Director of the
Company vide circular resolution dated 20.10.2014.
Shri Rohtash Kumar Kucheria has resigned from directorship of the
Company and the Board of Directors has accepted the same w.e.f.
26.09.2014 vide circular resolution dated 06.10.2014.
Further, Shri K. P Ramakrishnan was appointed as Independent
Non-executive Director of the Company with effect from 29.11.2014.
Consolidated Accounts
In accordance with Accounting Standards AS-21 on Consolidated Financial
Statements, your Directors provide the Audited Consolidated Financial
Statement of Winsome Yarns Limited, Winsome Yarns (Cyprus) Limited and
Winsome Yarns FZE in the Annual Report.
Insurance
All the properties of your Company have been adequately insured against
fire, flood, earthquake and explosive risks etc.
Public Deposit
The Company did not accept any Fixed Deposit during the year.
Auditors
M/s Lodha & Co, Chartered Accountants, Statutory Auditors of the
Company, hold office upto the conclusion of the ensuing Annual General
Meeting and are eligible for re-appointment. The Company has obtained a
Letter of Eligibility in terms of provisions of Section 139 of the
Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014
from M/s Lodha & Co., Chartered Accountants, to the effect that their
re-appointment, if made, would be in accordance of provisions of
Section 141 of the Companies Act 2013 and Rules made thereunder and
that they are not disqualified for such appointment within the meaning
of section 141 of the Companies Act, 2013, the Chartered Accountants
Act 1949 and Rules & Regulations made thereunder. Therefore, it is
proposed to re-appoint M/s Lodha & Co, Chartered Accountants, as
Statutory Auditors of the Company, for a period of three years i.e.
from the conclusion of this 24th Annual General Meeting of the Company
till the conclusion of 27th Annual General Meeting of the Company,
subject to the ratification of their appointment by the members in
every subsequent Annual General Meeting in accordance with the
provisions of Section 139 of the Companies Act 2013 read with Companies
(Audit & Auditors) Rules 2014.
Appointment of Key Managerial Persons (KMPs)
Shri Anand Balkishan Sharma, President (Corporate Finance), has been
appointed as Chief Financial Officer (CFO) of the Company by the Board
of Directors in their meeting held on 13th August, 2014 under the
provisions of Section 203 of the Companies Act 2013 read with Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Auditors'' Report
The Statutory Auditors of the Company have submitted Auditors'' Report
on the accounts of the Company for the accounting year ended September
30, 2014. This Auditors'' Report is self-explanatory and requires no
comments.
Particulars of Employees
None of the employees is covered under section 217(2A) of the Companies
Act, 1956 read with Companies (particulars of Employees) Rules, 1975 as
amended.
Management''s Discussion and Analysis Report
Management''s Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual report.
Statutory Information
(A) Directors'' Responsibility Statement
Pursuant to the requirement under section 217(2AA) of the Companies
Act, 1956 with respect to Directors'' Responsibilities Statement, it is
hereby confirmed that:
i. in the preparation of the annual accounts for the financial year
ended 30th September, 2014, the applicable accounting standards have
been followed along with proper explanation relating to material
departures;
ii. the accounting policies are applied consistently and reasonable
prudent judgment and estimates are made 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 the year under
review;
iii. 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 defecting fraud and other
irregularities;
iv. the Directors have prepared the accounts for the financial year
ended 30th September, 2014 on a going concern basis.
(B) Conservation of Energy, Technology Absorption and Foreign Exchange
earning and outgo.
Information in accordance with the provisions of section 217(1) (e) of
the Companies Act, 1956, read with the Companies (Disclosure of
particulars in the Report of Board of Directors) Rules, 1988 regarding
conservation of energy, technology absorption and foreign exchange
earnings and outgo is given in the ANNEXURE ''A'' forming part of this
Report.
Corporate Governance
During the financial year, the Company continued its commitment to the
principles of good Corporate Governance. The Company believes that best
board practices and transparent disclosures are necessary for enhancing
shareholders value.
A report on Corporate Governance, along with a Certificate of
compliance from the Auditors of the Company is attached as ANNEXURE ''B''
to this report.
Statutory Disclosures
None of the Directors are disqualified under the provisions of Section
164(2) of the Companies Act, 2013. The Directors have made the
requisite disclosures, as required under the provisions of Companies
Act, 2013 and Clause 49 of the Listing Agreement.
Sexual Harassment
Pursuant to provisions of Section 4 of the Sexual Harassment of Women
at workplace (Prevention, Prohibition and Redressal) Act, 2013, the
Board of Directors of the Company have constituted the "Internal
Complaint Committees" at the different work places of the Company.
Whistle Blower Policy
Pursuant to provision of section 177(9) of the Companies Act, 2013 and
Clause 49(II)(F) of the listing agreement, the Company has adopted the
''Whistle Blower Policy'' and authorized to the Audit Committee of the
Board to look after all the matters relating to Whistle Blower Policy
and to submit its report to Board at regular intervals, on the receipt
of any concerned matter, for appropriate action.
Next financial year of the Company
The last financial year of the Company was closed on 30th September,
2014. The period of next financial year will be decided by the Board of
Directors of the Company in times to come.
Acknowledgement
Your Directors wish to place on record their deep appreciation of the
timely support provided by the Company''s bankers, all the vendors and
the dedication and commitment of the employees at all levels. We are
sure, we will continue to dare and reach the pinnacle of our journey
called success.
Your Directors convey their grateful thanks to all the Government
Authorities and Shareholders for their continued and unstinted
assistance, co-operation and patronage.
We also take this opportunity to thank all the valued customers who
have appreciated our products and have patronized them.
For and on behalf of the Board
Pradeep Kumar Director
Place : Chandigarh Manish Bagrodia
Dated : 29.11.2014 Managing Director
Mar 31, 2012
The Directors have pleasure in presenting the 22nd Annual Report
together with the audited statement of Accounts of the Company for the
financial year ended 31st March, 2012.
Financial Highlights Year ended Year ended
31.3.2012 31.3.2011
(Rs. in lacs) (Rs. in lacs)
Revenue from Operations 43956.05 33337.31
Profit before Interest , Depreciation & Tax 2678.41 7226.46
Less: Interest 4927.09 3922.29
Profit /(Loss) before Depreciation (2248.68) 3304.17
Less: Depreciation 2296.12 2179.58
Profit/ (Loss) before Taxes (4544.80) 1124.59
Less : Current Tax -- --
Previous years Tax -- 46.13
Deferred Tax (1367.66) 467.56
Net Profit/ (Loss) after Taxes (3177.14) 610.90
Add : Surplus brought forward from previous
year 1917.73 1306.83
Balance Carried to Balance Sheet (1259.41) 1917.73
Operations & Performance
High cotton prices, coupled with fluctuating inventory, saw Textile and
Clothing (T&C) companies post a dip in bottom line by over 100 per cent
in many cases over 2011-12, says the Confederation of Indian Textile
Industry (Citi).
There is no issue with cotton prices rising, if they do so gradually.
However, from October 2010 to March 2011, prices rose from Rs 34,000
per candy (356 kg) to Rs 63,000 per candy. In the next one month, it
almost came down to where it (originally) was. Such high fluctuations
led to textile mills incurring heavy losses, during the current year.
According to data compiled by the Centre for Monitoring Indian Economy,
out of 234 Textile and Clothing (T&C) companies, 74 per cent or 174
companies saw poorer financial results for the first three quarters of
2011-12. And, of these 174, as many as 130 were net loss-making. The
Company also suffered losses on account of sale of inventory piled up
during the year due to stoppage of export by Government of India.
Your Company has achieved a turnover of Rs. 43956.05 lacs against the
previous year's turnover of Rs. 33337.31 lacs i.e registering an
increase of 31.85% (approx.). The Company has incurred a net loss
(after tax) of Rs. 3177.14 lacs against previous year's net profit
after tax of Rs. 610.90 lacs.
Expansion Projects
The management is pleased to inform you that out of five Micro Hydel
Power Projects having a total capacity to produce of 3.9 MW of
electricity, four Micro Hydel Projects have been commissioned upto 31st
March, 2012. The implementation of one Micro Hydel Power Project is at
an advanced stage and are expected to be commissioned with in current
financial year 2012-2013.
Subsidiary Companies & Overseas Operations
During the year wholly owned subsidiary of the Company, Winsome Yarns
(Cyprus) Limited has incorporated a wholly owned subsidiary in UAE
namely Winsome Yarns FZE on 11.07.2011. According to the provisions of
Section 212 of Companies Act, 1956, the holding company is required to
attach the balance sheet etc. of its subsidiary companies along with
its balance sheet. However, pursuant to provisions of general circular
no. 2/2011 issued by Ministry of Corporate Affairs on 8th February
2011, a general exemption is granted to attach the balance sheet of the
subsidiary companies. Accordingly, the annual accounts of Winsome Yarns
(Cyprus) Limited and Winsome Yarns FZE have not been attached in this
Annual Report, but the same are available for inspection at the
registered office of the company. Further due to Global recession of
which European Countries are the worst affected, the second, third and
fourth step down subsidiaries of the Company namely; S.C. Winsome
Romania, S.r.l., IMM Winsome Italia S.r.l. and S.C. Textil, S.r.l. are
under liquidation and their balance sheet etc. is not available. The
exemption from attaching the balance sheet etc. of these three
subsidiary companies was sought, pursuant to Section 212(8) of
Companies Act, 1956, and in response to which, Ministry of Corporate
Affairs informed that pursuant to General Circular No. 2/2011 issued by
Ministry of Corporate Affairs the approval of Ministry of Corporate
Affairs is no more required.
The present status of these three subsidiary companies is given as
under:-
Sr.
No. Name of Subsidiary Start of
liquidation
process Present status
1 IMM Winsome Italia
S.r.l. 30.09.2008 Liquidation process is
going on.
2 S.C. Winsome Romania
S.r.l. 26.11.2008 Liquidation process is
going on.
3 S.C. Textil S.r.l. 09.02.2010 Liquidation process is
going on.
Consolidation of equity shares from nominal value of Re. 1/- each to
Rs. 10/- each
During the year 2011-12, the company has consolidated the nominal value
of equity shares from Re. 1/- each to Rs. 10/- each on 06.08.2011 and
issued new equity shares of face value of Rs. 10/- each in place of old
equity shares of face value Re. 1/- each on 06.08.2011.
Allotment of equity shares pursuant to conversion of equivalent number
of convertible warrants
Out of total number of 2,51,00,000 convertible warrants, the company
had allotted 1,30,32,500 equity shares on 30.09.2010 and balance
1,20,67,500 equity shares on 17.08.2011 to Promoter and Strategic
Investors pursuant to conversion of equivalent number of convertible
warrants. The Company is utilising these funds for purposes as stated
in the Extraordinary Statement of General Meeting held on 05.02.2010
vide which approval of members was received for the issue of said
allotment.
ISO 9001/ 2008
Your directors are pleased to inform you that your company continue to
be the holder of ISO 9001/2008 certificates. Dividend
Your Directors are unable to recommend any dividend on Equity Shares
for the year under review.
Directors
In accordance with the Company's Articles of Association, Shri Satish
Bagrodia and Shri Brij Mohan Khanna, Directors retire by rotation and
being eligible, offer themselves for re-appointment.
During the year 2011-12, the Punjab National Bank has nominated Shri
Vinay Kumar, FGM as nominee director of the Company in place of Shri
Yashpal Barar. Board of Directors in their meeting held on 13.02.2012
appointed to Shri Vinay Kumar as Nominee Director of the Company.
Consolidated Accounts
In accordance with Accounting Standards AS-21 on Consolidated Financial
Statements, your directors provide the Audited Consolidated Financial
Statement of Winsome Yarns Limited, Winsome Yarns (Cyprus) Limited and
Winsome Yarns FZE in the Annual Report.
Insurance
All the properties of your Company have been adequately insured against
fire, flood, earthquake and explosive risks etc.
Public Deposit
The Company did not accept any Fixed Deposit during the year.
Auditors
M/s. Lodha & Co., Chartered Accountants (FRN 301051E), who are
Statutory Auditors of the Company hold office up to the forthcoming
Annual General Meeting and are recommended for re-appointment to audit
the accounts of the Company for the Financial Year 2012-13. As required
under the provisions of the Section 224(1B) of the Companies Act, 1956,
the Company has obtained written confirmation from M/s. Lodha & Co.
that their appointment, if made would be in conformity with the limits
specified in the Section.
Cost Audit
The Central Government's Cost Auditor order specified an audit of cost
accounting records of the textile Companies every year. This is
applicable to the products manufactured by the Company. The Board of
Directors, subject to approval of Central Government, appointed M/s
Aggarwal Vimal & Associates, Cost Accountants, having its office at SCO
124-125, Sector 34-A, Chandigarh to carryout the audit for the
financial year 2012-2013. Further the cost audit report for the
financial year 2010-11 had been filed on 20.09.2011 (Due date on
30.09.2011) vide SRN-B20809885. Auditors' Report
Observations made in the Auditors' Report are self-explanatory and
therefore do not call for any further explanation. Management's
Discussion and Analysis Report
Management's Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual report. Corporate Governance
During the financial year, the company has continued its commitment to
the principles of good Corporate Governance. The company believes that
best board practices and transparent disclosures are necessary for
enhancing shareholders value.
A report on Corporate Governance, along with a Certificate of
compliance from the Auditors of the Company is attached as ANNEXURE 'B'
to this report.
Statutory Information
(A) Directors' Responsibility Statement
Pursuant to the requirement under section 217(2AA) of the Companies
Act, 1956 with respect to Directors' Responsibilities Statement, it is
hereby confirmed :
i. that in the preparation of the annual accounts for the financial
year ended 31st March, 2012, the applicable accounting standards have
been followed along with proper explanation relating to material
departures;
ii. that the accounting policies are applied consistently and
reasonable prudent judgment and estimates are made 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 the year
under review;
iii. that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the company and for preventing and defecting fraud and other
irregularities;
iv. that the directors have prepared the accounts for the financial
year ended 31st March, 2012 on a going concern basis.
(B) Conservation of Energy, Technology Absorption and Foreign Exchange
earning and outgo.
Information in accordance with the provisions of section 217 (1) (e) of
the Companies Act, 1956, read with the Companies (Disclosure of
particulars in the Report of Board of Directors) Rules, 1988 regarding
conservation of energy, technology absorption and foreign exchange
earnings and outgo is given in the ANNEXURE 'A' forming part of this
report.
Statutory Disclosures
None of the Directors are disqualified under the provisions of Section
274(1)(g) of the Companies Act, 1956. The Directors have made the
requisite disclosures, as required under the provisions of Companies
Act, 1956 and Clause 49 of the Listing Agreement.
Acknowledgement
Your Directors wish to place on record their deep appreciation of the
timely support provided by the Company's bankers, all the vendors and
the dedication and commitment of the employees at all levels. We are
sure we will continue to dare and reach the pinnacle of our journey
called success.
Your Directors convey their grateful thanks to all the Government
authorities and shareholders for their continued and unstinted
assistance, co-operation and patronage.
We also take this opportunity to thank all the valued customers who
have appreciated our products and have patronised them.
For and on behalf of the Board
Place : Chandigarh Satish Bagrodia
Dated : 30.05.2012 Chairman
Mar 31, 2011
The Directors have pleasure in presenting the 21st Annual Report
together with the audited statement of Accounts of the Company for the
financial year ended 31st March, 2011.
Financial Highlights Year ended Year ended
31.3.2011 31.3.2010
(Rs.in lacs) (Rs.in lacs)
Sales 33012.56 22225.71
Profit before Interest , Depreciation
& Tax 7436.77 3394.73
Less: Interest 4132.60 3173.93
Profit /(Loss) before Depreciation 3304.17 220.80
Less: Depreciation 2179.58 2014.09
Profit/ (Loss) before Taxes 1124.59 (1793.29)
Less : - Current Tax -- --
- Previous years Tax 46.13 --
- Fringe Benefit Tax -- 0.15
- Deferred Tax Liability/ (Asset) 467.56 (586.02)
Net Profit/ (Loss) after Taxes 610.90 (1207.42)
Add : Surplus brought forward from
previous year 1306.83 2514.25
Balance Carried to Balance Sheet 1917.73 1306.83
Operations & Performance
The year under review was an extremely trying one. A runaway inflation
touching a high point of 13.9% during the year, the tight monetary
policies followed by the authorities for most of the year to control
inflation with the consequent high interest rates, the precipitous fall
in the value of the Rupee during the year, increase in cotton prices
from Rs. 29000 per candy (approximately) in May, 2010 to Rs.63000 per
candy (approximately) in March, 2011 i.e an increase of 117%, all lead
to an extremely challenging environment in which the Company had to
operate. Further the government of India restricted the total quantity
of export of cotton yarn to 720 million kgs which had an adverse impact
on the sales during the year.
During the year, there was a progressive recovery in the Textile
industry, both in India and overseas. Further, a series of planned
steps that were taken during the year ensured that the Company remains
competitive through stringent cost control and fiscal prudence. The
Constant introduction of strategic marketing without affecting the
quality of the product, enabled your company to achieve better
performance as compared to previous year. Your Company has achieved a
turnover of Rs. 33012.56 lacs against the previous years turnover of
Rs. 22225.71 lacs i.e registering an increase of 49% (approx.). The
Company has earned a net profit (after tax) of Rs. 610.90 lacs against
previous years net loss after tax of Rs. 1207.42 lacs.
During the current financial year with the improved production, it is
expected that the performance will be substantially better.
Expansion Projects
The management is pleased to inform you that out of five Micro Hydel
Power Projects having a total capacity to produce 3.9 MW of
electricity, two Micro Hydel Projects have been commissioned during the
year. The implementation of three Micro Hydel Power Projects is at an
advanced stage and are expected to be commissioned with in current
financial year 2011-2012.
Subsidiary Companies & Overseas Operations
According to the provisions of Section 212 of Companies Act, 1956, the
holding company is required to attach the balance sheet etc. of its
subsidiary companies along with its balance sheet. However, pursuant to
provisions of general circular no. 2/2011 issued by Ministry of
Corporate Affairs on 8th February 2011, a general exemption is granted
to attach the balance sheet of the subsidiary companies. Accordingly,
the annual accounts of Winsome Yarns (Cyprus) Limited has not been
attached in this Annual Report, but the same is available for
inspection at the registered office of the company. Due to Global
recession of which European Countries are the worst affected, the
second, third and fourth step down subsidiaries of the Company namely;
S.C. Winsome Romania, S.r.l., IMM Winsome Italia S.r.l. and S.C.
Textil, S.r.l. went in to liquidation and their balance sheet etc. is
not available. The exemption from attaching the balance sheet etc. of
these three subsidiary companies was sought, pursuant to Section 212(8)
of Companies Act, 1956, and in response to which, Ministry of Corporate
Affairs vide its letter no. 47/177/2011-CL-III dated 06.04.2011
informed that pursuant to General Circular No. 2/2011 issue by Ministry
of Corporate Affairs the approval of Ministry of Corporate Affairs is
no more required.
The present status of these three subsidiary companies is given as
under:-
Sr. No. Name of Subsidiary Start of liquidation
process Present status
1 IMM Winsome Italia
S.r.l. 30.09.2008 Liquidation process is
going on.
2 S.C. Winsome Romania
S.r.l. 26.11.2008 Liquidation process is
going on.
3 S.C. Textil S.r.l . 09.02.2010 Liquidation process is
going on.
Allotment of equity shares pursuant to conversion of equivalent number
of convertible warrants
During the year 2010-11, the company has allotted 130325000 equity
shares of Re. 1/- each on 30.09.2010 to promoter and Public Financial
Investors pursuant to conversion of equivalent number of convertible
warrants, out of total number of 251000000 convertible warrants issued
on 19.02.2010. The Company is utilising these funds for purposes as
stated in Notice for convening the Extraordinary General Meeting held
on 05.02.2010 vide which approval of members was received for the issue
of said allotment.
Issue of Global Depository Receipts
During the year the Company has allotted 199412500 equity shares of Re.
1/- each underlying 1994125 Global Depository Receipts (GDRs) @ US$
6.64 per GDR on 29.03.2011. Each GDR represents 100 equity shares of
the company. The total proceeds from the GDRs issue was US$ 13.24
Milion. The GDRs are listed on:
Luxembourg Stock Exchange/ LuxSE
Societe de la Bourse de Luxembourg S.A.
B.P. 165, L-2011 Luxembourg
Siege Social, 11, av de la Porte-Neuve.
Telehpone: (352) 47 79 36216, Fax: (352) 47 79 36344
After the allotment of underlying equity shares, the paid up equity
capital of the company stands increased from Rs. 386984790 to Rs.
586397290 comprising of 586397290 equity shares of Re. 1/- each.
ISO 9001/ 2008
Your directors are pleased to inform you that your company continue to
be the holder of ISO 9001/2008 certificate.
Dividend
Your Directors are unable to recommend any dividend on Equity Shares
for the year under review.
Directors
In accordance with the Companys Articles of Association, Shri Chandra
Mohan and Shri Ashish Bagrodia, Directors retire by rotation and being
eligible, offer themselves for re-appointment.
During the year 2010-11, the Punjab National Bank has nominated Shri
Yashpal Barar as nominee director of the Company in place of Shri
Gulshan Kumar Sawhney. Board of Directors in their meeting held on
17.03.2011 appointed to Shri Yashpal Barar as Nominee Director of the
Company. Shri Yashpal Barar is DGM & Circle Head of PNB, Ludhiana. The
Punjab National Bank is entitled to nominate one Director on the Board
of the Company pursuant to LOA dated 28.03.2010 in respect of
restructuring of Companys accounts under CDR mechanism.
Consolidated Accounts
In accordance with Accounting Standards AS-21 on Consolidated Financial
Statements, your directors provide the Audited Consolidated Financial
Statement of Winsome Yarns Limited and Winsome Yarns (Cyprus) Limited
in the Annual Report.
Insurance
All the properties of your Company have been adequately insured against
fire, flood, earthquake and explosive risks etc.
Public Deposit
The Company did not accept any Fixed Deposit during the year.
Auditors
M/s. Lodha & Co., Chartered Accountants (FRN 301051E), who are
Statutory Auditors of the Company hold office up to the forthcoming
Annual General Meeting and are recommended for re-appointment to audit
the accounts of the Company for the Financial Year 2011-12. As required
under the provisions of the Section 224(1B) of the Companies Act, 1956,
the Company has obtained written confirmation from M/s. Lodha & Co.
that their appointment, if made would be in conformity with the limits
specified in the Section.
Cost Audit
The Central Governments Cost Auditor order specified an audit of cost
accounting records of the textile Companies every year. This is
applicable to the products manufactured by the Company. The Board of
Directors, subject to approval of Central Government, appointed M/s V.
Kumar & Associates, Cost Accountants, having its office at SCO 124-25,
1st Floor, Sector 34-A, Chandigarh to carryout this audit for the
current year.
Auditors Report
Observations made in the Auditorsà Report are self explanatory and
therefore do not call for any further explanation.
Corporate Governance
During the financial year, the company has continued its commitment to
the principles of good Corporate Governance. The company believes that
best board practices and transparent disclosures are necessary for
enhancing shareholders value.
A report on Corporate Governance, along with a Certificate of
compliance from the Auditors of the Company is attached as ANNEXURE B
to this report.
Statutory Information
(A) Directors Responsibility Statement
Pursuant to the requirement under section 217(2AA) of the Companies
Act, 1956 with respect to Directors Responsibilities Statement, it is
hereby confirmed :
i. that in the preparation of the annual accounts for the financial
year ended 31st March, 2011, the applicable accounting standards have
been followed along with proper explanation relating to material
departures; ii. that the accounting policies are applied consistently
and reasonable prudent judgment and estimates are made 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 the
year under review; iii. that the directors have taken proper and
sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,1956 for
safeguarding the assets of the company and for preventing and defecting
fraud and other irregularities; iv. that the directors have prepared
the accounts for the financial year ended 31st March, 2011 on a going
concern basis.
(B) Conservation of Energy, Technology Absorption and Foreign Exchange
earning and outgo.
Information in accordance with the provisions of section 217 (1) (e) of
the Companies Act, 1956, read with the Companies (Disclosure of
particulars in the Report of Board of Directors) Rules, 1988 regarding
conservation of energy, technology absorption and foreign exchange
earnings and outgo is given in the ANNEXURE A forming part of this
report.
Statutory Disclosures
None of the Directors are disqualified under the provisions of Section
274(1)(g) of the Companies Act, 1956. The Directors have made the
requisite disclosures, as required under the provisions of Companies
Act, 1956 and Clause 49 of the Listing Agreement.
Acknowledgement
Your Directors wish to place on record their deep appreciation of the
timely support provided by the Companys bankers, and all the vendors
and of the dedication and commitment of the employees at all levels. We
are sure that we will continue to dare and reach the pinnacle of our
journey called success.
Your Directors convey their grateful thanks to all the Government
authorities and shareholders for their continued and unstinted
assistance, co- operation and patronage.
We also take this opportunity to thank all the valued customers who
have appreciated our products and have patronised them.
For and on behalf of the Board
Place : Chandigarh Satish Bagrodia
Dated : 12.05.2011 Chairman
Mar 31, 2010
The Directors have pleasure in presenting the 20th Annual Report
together with the audited statement of Accounts of the Company for the
financial year ended 31 st March, 2010.
Financial Highlights
Year ended
31.3.2010 Year ended
31.3.2009
(Rs.in lacs) (Rs. in lacs)
Sales 22225.71 14767.71
Profit before Interest, Depreciation & Tax 3394.73 159.96
Less: Interest 3173.93 2600.24
Profit/(Loss) before Depreciation 220.80 (2440.28)
Less: Depreciation 2014.09 1910.02
Profit/(Loss) before Taxes (1793.29) (4350.30)
Less: ÃCurrent Tax
- Credit against MAT
- Fringe Benefit Tax 0.15 10.47
- Deferred Tax Liability/(Asset) (586.02) (1577.88)
Net Profit J (Loss) after Taxes (1207.42) (2782.89)
Add: Surplus brought forward
from previous year 2514.25 5297.14
Balance carried to Balance Sheet 1306.83 2514.25
Operations & Performance
In the backdrop of the financial crisis witnessed in the previous
financial year and the subsequent fallout, FY 2010 was an extremely
challenging year for your Company. However, the resilience and inherent
strengths of your companys brands, quality manufacturing and deep
network relationships enabled your company to weather the downturn and
achieve better performance as compared to previous year. Your company
continues to be the market leader in its core business. A number of
rationalization and restructuring initiatives were taken during the
year under review to further consolidate its strengths and position
itself to take advantage of the upturn. During the year under review,
your Company has achieved a turnover of Rs. 22225.71 lacs against the
previous years turnover of Rs. 14767.11 lacs i.e registering an
increase of 50% (approx.). However the Company incurred a net loss
(after tax) of Rs. 1207.42 lacs (previous year net loss after tax Rs.
2782.89 lacs). With the increased turnover the Company managed to
reduce its net losses by 56% (approx.). The performance during the year
had been severely affected due to increase in raw material prices,
shortage of manpower and electricity. Further, the general inflationary
conditions of the country have also affected the performance of the
company.
However, during the current year the yarn markets have been bullish and
along with the improved production, your company has started to perform
better as compared to the last year. With this trend it is expected
that the current year performance will be substantially better.
Expansions
The Company had undertaken following expansion projects:
(a) Addition of 60,000 spindles in two phases at it existing Derabassi
Plant.
(b) Installation of another 180 knitting machines in three phases at
Mohali; and
(c) Implementation of 3.9 MW Micro Hydel Power Project at 5(five)
locations near Ludhiana, Punjab.
The Board is pleased to inform the members that installation of 30,000
spindles and 180 knitting machines have successfully completed. The
implementation of five mini hydel power projects to produce 3.9 MW of
electricity is underway. The first project has already commissioned on
12th June, 2010. The second is expected to be commissioned in
September, 2010. The rest three projects are at advanced stage of
implementation.
Subsidiary Companies & Overseas Operations
According to the provisions of Section 212 of Companies Act, 1956, the
holding company is required to attach the balance sheet etc. of its
subsidiary companies along with its balance sheet. Due to Global
recession of which European Countries are the worst affected, the
second, third and fourth step down subsidiaries of the Company namely;
S.C. Winsome Romania, S.r.l., IMM Winsome Italia S.r.l. and S.C.
Textil, S.r.l. went in to liquidation and their balance sheet etc. is
not available. The exemption from attaching the balance sheet etc. of
these three
subsidiary companies was sought, pursuant to Section 212(8) of
Companies Act, 1956, which has since been granted by Ministry of
Corporate Affairs, Govt, of India vide its letter no.
47/644/2010-CL-III dated 11.08.2010. The present status of these three
subsidiary companies is given as under:-
S.No. Name of Subsidiary Start of liquidation
process Present status
1. IMM Winsome Italia
S.r.l. 30.09.2008 Liquidation
process is going on.
2. S.C. Winsome
Romania S.r.l. 26.11.2008 Liquidation
process is
going on.
3. S.C. Textil S.r.l. 09.02.2010 Liquidation process
is going on.
However, as soon as the accounts of subsidiary companies, for which
exemption has been granted by Govt, of India, received by the Company,
the same shall be circulated to the shareholders of Winsome Yarns
Limited.
Sub-division of equity shares of the company
During the year the face value of equity shares of the company has been
sub-divided from Rs. 10/- each to Re. 1/-eachw.e.f. 23.01.2010.
Preferential Allotment of Convertible Warrants:
During the year, as approved by shareholders in their meeting held on
5th February, 2010, the Board of Directors have allotted 25,10,00,000
convertible warrants to promoter and strategic investors at the rate of
Re. 1.60 per warrant convertible into one equity share of Re. 1/- each.
IS/ISO 9002/ 14001
Your directors are pleased to inform you that your company continue to
be the holder of IS/ISO 9002/ 14001 certificates.
Dividend
Your Directors are unable to recommend any dividend on Equity Shares
for the year under review.
Directors
In accordance with the Companys Articles of Association, Shri Satish
Bagrodia and Shri Brij Mohan Khanna, Directors retire by rotation and
being eligible, offer themselves for re-appointment.
During the year on 30th July, 2009, Shri G.K. Sawhney had been
appointed by Punjab National Bank as Nominee Director of the Company,
who was entitled to nominate one Director on the Board of the Company
pursuant to LOA dated 28.03.2010 in respect of restructuring of
Companys debts under CDR mechanism.
Consolidated Accounts
(n accordance with Accounting Standards AS-21 on Consolidated Financial
Statements, your directors provide the Audited Consolidated Financial
Statement in the Annual Report.
Insurance
All the properties of your Company have been adequately insured against
fire, flood, earthquake and explosive risks.
Public Deposit
The Company did not accept any Fixed Deposit during the year.
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 :
i. that in the preparation of the annual accounts for the financial
year ended 31st March, 20t0, the applicable accounting standards have
been followed along with proper explanation relating to material
departures;
ii. that the accounting policies are applied consistently and
reasonable prudent judgment and estimates are made 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 the year
under review;
iii. that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act,1956 for safeguarding the assets of the
company and for preventing and detecting fraud and otter
irregularities;
iv. that the directors have prepared the accounts for the financial
year ended 31s March, 2010 on a going concern basis.
Audit
M/s. Lodha & Co., Chartered Accountants, who are Statutory Auditors of
the Company and hold office up to the forthcoming Annual General
Meeting and are recommended for re-appointment to audit the accounts of
the Company for the Financial Year 2010-11. As required under the
provisions of the Section 224(1 B) of the Companies Act, 1956, the
Company has obtained written confirmation from M/s. Lodha & Co. that
their appointment if made would be in conformity with the limits
specified in the Section.
As per the requirement of Central Government and pursuant to Section
233B of the Companies Act, 1956 your Company carries out an audit of
cost records every year.
Conservation of Energy, Technology Absorption and Foreign Exchange
earning and outgo.
Information in accordance with the provisions of section 217 (1) (e) of
the Companies Act, 1956, read with the Companies (Disclosure of
particulars in the Report of Board of Directors) Rules, 1988 regarding
conservation of energy, technology absorption and foreign exchange
earnings and outgo is given in the AIMNEXURE A forming part of this
report.
Particulars of the Employees
The Particulars of the employees as required by the provisions of
section 217 (2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules 1975 as amended, is annexed to this
report.
Auditors Report
Auditors observations regarding non provision for shortfall in
recovery (amount unascertained) against overdue debt and non provision
for diminution in the value of investment in a subsidiary company and
remuneration paid to the managing director have been explained in
detail in Note No. 16, 10B and 8 of Schedule 15(B) on Accounting
Policies and Notes on Accounts, respectively.
Corporate Governance
During the financial year, the company has continued its commitment to
the principles of good Corporate Governance. The company believes that
best board practices and transparent disclosures are necessary for
enhancing shareholders vaiue.
A report on Corporate Governance, alongwith a Certificate of compliance
from the Auditors of the Company is attached as ANNEXURE B! to this
report.
Acknowledgement
Your Directors place on record their deep appreciation of the devoted
and sincere services rendered by the officers, staff and workers who
have contributed significantly for its performance and for enhancing
the Companys inherent strength. Your Directors are also grateful for
the cooperation and assistance received from financial institutions,
banks and customers, during the year under review.
By order of the Board
Place : Chandigarh Satish Bagrodia
Dated : 24.08.2010 Chairman
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