Directors Report of Banswara Syntex Ltd.
Mar 31, 2018
Dear Shareholders,
The Directors are pleased to present the 42nd Annual Report of the Company together with its Audited Financial Statements for the year financial ended 31st March, 2018.
(Rs. in Lakhs)
|
Financial review |
Current year 2017-18 |
Previous year 2016-17 |
|
Gross Income |
1,29,508 |
1,25,449 |
|
Net Income |
1,29,299 |
1,24,433 |
|
Profit before interest, depreciation & tax |
12,756 |
14,608 |
|
Profit before depreciation & tax |
6,843 |
8,305 |
|
Less: Depreciation |
5,757 |
5,763 |
|
Profit before tax |
1,086 |
2,542 |
|
Tax Expenses |
295 |
643 |
|
Profit after Tax |
792 |
1,899 |
|
Other comprehensive Income |
194 |
(28) |
|
Total comprehensive Income |
985 |
1,871 |
|
Dividend on Equity Shares (for 2017-18 proposed) |
171 |
171 |
|
Tax on Dividend |
35 |
35 |
|
Earnings per share (Rs.) : Basic |
4.63 |
11.09 |
|
Diluted |
4.63 |
11.09 |
Operations & state of affairs
The production of yarn during 2017-18 has been 298 lakh kgs. as against 302 lakh kgs. during 2016-17, while the production of fabric was 349 lakh mtrs. during 2017-18 as against 342 lakh mtrs. during 2016-17. The garment production has increased by 9.35% from 36.15 lakh Pieces to 39.42 lakh pieces over the period.
Your Company''s net income from operations during 2017-18 has been Rs.1293 crore as against Rs.1244 crore during 2016-17.
The profit before interest, depreciation and tax (PBIDT) during 2017-18 is Rs.127 crore as against '' 146 crore during
2016-17. The profit before depreciation and tax (PBDT) has been Rs.68 crore as against Rs.83 crore during 2016-17. The post tax net profit of the Company during 2017-18 was at Rs.7.92 crore.
The basic and diluted EPS for the year 2017-18 is Rs.4.63 as against Rs.11.09 for the year 2016-17.
Your Company has charged depreciation on property, plant and equipment as per the provisions of Schedule II of the Companies Act, 2013.
There has been no change in the nature of Company''s business during the year as it remains in the business of manufacturing and marketing of the textile products.
The Company has prepared its Financial Statements as per applicable provisions of Ind-AS (Indian Accounting Standards) for the year 2017-18.
Exports
During the year, the export turnover of the Company has been Rs.570 crore as against Rs.568 crore during 2016-17. The 44 % share of export turnover in the net income for the year 2017-18, has been maintained at same level as previous year.
During the year under report, the Company''s marketing as well as design and development teams continued to participate in the international trade fairs and meetings with the customers abroad for regular feedback of market trends, demand, etc. in the international market.
Dividend
Your Directors are pleased to recommend dividend of Rs.1/per equity share i.e. @ 10% (previous year ''1/- per share) for the financial year 2017-18. The total dividend payout on equity shares for the year will absorb Rs.1.71 crore (previous year - Rs.1.71 crore) with outgo of ''0.35 crore by way of tax on dividend (previous year - Rs.0.35 crore).
The dividend, when paid, will be charged to Profit & Loss account of financial year 2017-18 in compliance of amended provisions of Ind-AS 10.
The Company has transfered unclaimed Dividend amount upto the year 2009-10 and interim dividend for 2010-11to the IEPF.
Share capital
There has been no change in share capital of the Company during the year 2017-18.
Expansion, diversification and modernization
During the year, the Company invested Rs.32.21 crore for acquisition of property, plant and equipment. As at 31st March, 2018, the capital-work-in progress stood at Rs.5.36 crore and advances to the capital goods'' suppliers aggregated Rs.2.11 crore, as against Rs.4.00 crore and Rs.3.44 crore respectively at the beginning of the year.
The total production capacity of the Company as at 31st March, 2018 for yarn is 159144 ring spindles, including 21120 spindles for worsted yarn spinning, 592 Air Jet spindles, 421 shuttle less looms, 34 Air Jet jacquard looms, 10 stenters with processing capacity of 5 million mtrs. per month and 4.09 lakhs pieces of garments per month.
Subsidiaries, Joint Ventures and Associates
In accordance with the General Circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of Joint Venture Company are not being attached with the Annual Report of the Company. However, pursuant to Section 129 of the Companies Act, 2013, the financial information of Tesca Textiles & Seat Components (India) Pvt. Ltd. (formerly Known as Treves Banswara Private Limited), the Joint Venture Company, is disclosed in the Annual Report in compliance with the provisions of the said circular. The Company will make available the Annual Financial Statements of the Joint Venture Company and the related detailed information to any member of the Company who requests for the same. The Annual Financial Statements of the Joint Venture Company will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial Statements for financial year ended 31st March, 2018 presented by the Company include the Financial Statements of its Joint Venture Company. Pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, the salient features of the financial statements, performance and financial position of the Joint Venture Company in Form AOC-1 is furnished as Annexure - I to this Report.
The Company has framed a policy for determining Material Subsidiaries, which has been uploaded on the Company''s weblink- http://banswarasyntex.com/financials/policy detm materiality.pdf
Subsidiary
During the financial years Company had no any subsidiary Company.
Joint Venture
Your Company holds 50% of the paid up share capital of Joint Venture Company i.e. Tesca Textiles & Seat Components (India) Private Limited (formerly Known as Treves Banswara Private Limited). The balance 50% of share capital is held by Treves Textiles & Seats Components, France.
During the financial year 2017-18, Tesca Textiles & Seat Components (India) Private Limited (formerly Known as Treves Banswara Private Limited) produced 5.05 Lakh mtrs. of Laminated Fabric and 250661 pcs. of Embossed Panel parts and Flex. Total turnover of this JV Company during financial year 2017-18 was Rs.2506.04 lakh (previous year Rs.1445 lakh) with net profit of Rs.101.28 lakh as against Rs.28 lakh in the previous year.
Associates
During the financial years Company had no any Associate Company.
Consolidated Financial Statements
In accordance with Ind-AS 110 on Consolidated Financial Statements read with Ind-AS 28 on Accounting for Investments in Associates & Joint Venture and also as per Section 129 of the Companies Act, 2013, the audited Consolidated Financial Statements are furnished in the Annual Report.
Thermal Power Plant
Both units of Captive Thermal Power Plant (33 MW) are working satisfactorily. Your Company is meeting its requirements of coal from domestic sources as well from imports.
Finance
During the year 2017-18, the Company got disbursements of long term loan of Rs.19.63 crore from Union Bank of India and Rs.1.32 crore from IDBI Bank for acquisition of fixed assets and financing working capital requirements. The repayments of term loans made during the year aggregated Rs.59.98 crore.
The Company''s bankers have been providing need-based working capital after the review of its requirements from time to time.
Contribution to Exchequer
During the year, your Company contributed Rs.24.86 crore to the Government Exchequer by way of Excise Duty, Service Tax, Goods & Services Tax, Value Added Tax (VAT), Income Tax, Dividend Distribution Tax and other payments.
Corporate Governance/Management Discussion & Analysis Report
As per the requirements of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 "SEBI (LODR)", the Company has adopted a Code of Conduct which is applicable to the members of the Board, Key Managerial Personnel and Senior Management Staff. The Company fully complies with the Corporate Governance practices as enunciated in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Corporate Governance Report and Management Discussion & Analysis Report which form part of this report are annexed as Annexure - II.
Fixed Deposits
As per the provisions of the Companies Act, 2013, the Company accepts fixed deposits from members of the Company as approved by the shareholders in their meeting held on 27th August, 2016. During the year 2017-18, the Company accepted deposits of Rs.1777 lakh, payment made Rs.529 lakh and had such deposits aggregating standing Rs.2855 lakh as on 31st March, 2018. There has been no default in repayment of deposits or interest thereon and no deposit was unclaimed or matured but not paid as on 31st March, 2018. The Company has duly complied with the provisions of the Companies (Acceptance of Deposits) Rules, 2014.
The Company has obtained Credit Rating for Fixed deposits from CRISIL Rating Agency and also opened the Fixed Deposits Repayment Reserve Account with a schedule Bank for fixed deposits maturing during the financial years 2018-19 and 2019-20.
Corporate Social Responsibility Initiatives
As a part of its initiatives under "Corporate Social Responsibility", the Company has framed Corporate Social Responsibility Policy (CSR Policy) in terms of which, the Company has undertaken projects in the areas of environment, women and children empowerment, health care, etc. These projects are largely in accordance with Schedule VII of the Companies Act, 2013.
As required under Section 134 (3)(o) and Policy Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR activities, forming part of the Directors'' Report, is annexed as Annexure-III.
Risk Management
The risk assessment and minimization procedures are in place and the Board is kept regularly informed about the business risks and the steps taken to mitigate the same. The risk management is reviewed periodically by the Audit Committee and Board of Directors.
Internal Control System and its adequacy
The Company has Internal Control System commensurate with the size, scale and complexity of its operations. To maintain the objectivity and independence of the audit, the Chief Internal Auditor reports to the Audit Committee of the Board. The internal control system and its adequacy has been audited by M/s Kalani & Co., a reputed firm of Chartered Accountants, Jaipur.
The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism.
The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with the operating systems, accounting procedures and policies at all locations of the Company. Based on the reports of the internal auditors, the process owners undertake corrective actions in their respective areas and thereby strengthen the controls. The report on major observation of internal auditors and action taken thereon is regularly reported to Audit Committee on a quarterly basis.
Vigil Mechanism/Whistle Blower Policy
The Company has adopted a Vigil Mechanism/Whistle Blower Policy to provide a mechanism to its Directors and employees to report their concerns about unethical, behavior, actual or suspected trend to Company''s Code of Conduct, During the year, no such event was reported. It also provides for adequate safeguards against the victimization of employees who avail of the mechanism, and allows direct access to the chairperson of the audit committee in exceptional cases. The details of the policy are explained in the Corporate Governance Report and also posted on website of the Company at http://banswarasyntex.com/financials/VIGIL MECH WB POLICY.pdf
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has zero tolerance policy for sexual harassment of women at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder. As required under law, an Internal Compliance Committee has been constituted for reporting and conducting inquiry into the complaints made by the victim on the harassment at the work place.
The Company has not received any complaint on sexual harassment of women at work place during the financial year 2017-18.
Directors
a) Retirement by rotation and subsequent re-appointment:
Shri Rakesh Mehra Vice Chairman of the Company is liable to retire by rotation at the ensuing AGM pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualifications of Directors) Rules, 2014 and being eligible offers himself for reappointment. Appropriate resolution for his re-appointment is being placed for the approval of the shareholders of the Company at the ensuing AGM. The Brief profile of Shri Rakesh Mehra and other related information required under Regulation 36 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been detailed in the Notice convening the 42nd AGM of your Company.
b) Re-appointment of Independent Directors:
The term of office of Shri Kamal Kishore Kacholia, Shri P. Kumar, Shri D. P. Garg, Shri Vijay Mehta, Dr. S.B. Agarwal and Shri Vijay Kumar Agarwal, as Independent Directors expires on 31st March, 2019. The Board of Directors based on performance evaluation of all the above Independent Directors, recommends their reappointment to the shareholders for further second term of five (5) consecutive years commencing from 1st April, 2019. Brief profile of all the above Independent Directors and other related information required under Regulation 36 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been detailed in the Notice convening the 42nd AGM of your Company.
Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
In the opinion of the Board, Independent Directors fulfill the conditions specified in Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are independent from Management.
The Company has formulated a policy for performance evaluation of Independent Directors, Board, Committees and individual Directors including the Chairman and executive Directors.
Key Managerial Personnel
There has been no change in the Key Managerial Personnel of the Company during the year 2017-18.
Declaration of Independent Directors All Independent Directors have furnished declarations to the effect that they meet the criteria of independence as laid down in Section 149 (6) of the Companies Act, 2013 and Regulation 16 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Board Evaluation
Pursuant to the provisions of Section 134 of Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has adopted a formal performance evaluation of the Board, Committees and Individual Directors including the Chairman. The exercise was carried out through a structured evaluation process starting with a questionnaire sent to all Directors followed by discussions in specific manner covering various aspects such as composition of the Board and its Committees, effectiveness of the process, and actual functioning, etc.
The performance of individual Directors was reviewed on the basis of criteria such as the contribution of the individual Director in the Board and Committee meetings. Performance of non Independent Directors and the Board as a whole was evaluated in a specifically convened meeting of Independent Directors followed by deliberations in Nomination and Remuneration Committee meeting taking account the view of the Executive Directors.
Separate exercises were carried out to evaluate the performance of individual Directors, including the Chairman and Whole Time Directors, on specific parameters such as attendance, contribution, independent judgment, safeguarding the interest of minority shareholders etc, in the specifically convened meetings of Independent Directors and Nomination and Remuneration Committee before consideration by the Board. The Chairpersons of the respective Committees, shared their reports with the Board. The Directors express their satisfaction on implementation of evaluation process.
Nomination and Remuneration Policy The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for appointment of Directors, Key Managerial personnel and Senior Management Staff as also their remuneration. The Nomination and Remuneration Policy is and also posted on the website of the Company at http://banswarasyntex. com/financials/NOMINATION POLICY.pdf.
Familiarization Programme of the Independent Directors
The Familiarization programme of the Independent Directors was conducted twice during the year 2017-18. For details of the familiarization programme for Independent Directors, details are furnished in Corporate Governance Report annexed hereto as Annexure-II.
Related Party Transactions
All related party transactions executed during the financial year 2017-18 were carried out on an Arm''s Length basis and carried out in the ordinary course of business.
Details of all related party transactions are reported to the Audit Committee for scrutiny / review and to refer for approval of the Board. The particulars of the contracts or arrangements entered into with related parties referred to in sub section (1) of Section 188 of the Companies Act, 2013 are indicated in Form AOC-2 which forms part of this report as Annexure-IV.
Board Meetings
Four meetings of the Board of Directors were held during the financial year i.e. on 25th May, 2017, 8th September, 2017, 12th December, 2017 and 14th February, 2018. Frequency and quorum, etc. at these meetings were in conformity with the provisions of the Companies Act, 2013, the "SEBI (LODR)" and Secretarial Standard-1, details are furnished in Corporate Governance Report annexed hereto as Annexure-II.
Directors'' responsibility statement
As required under Section 134 (5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:
(a) In the preparation of the annual accounts for the year ended 31st March, 2018, the applicable Accounting Standards have been followed and there are no material departures from the same.
(b) 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 as at 31st March, 2018 and of the profit of the Company for the year ended on that date.
(c) The Directors have taken proper and sufficient care 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 frauds and other irregularities.
(d) The Directors have prepared the annual accounts of the Company for the year on a "going concern" basis.
(e) The Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating effectively.
(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and have been operating effectively.
Audit Committee
In accordance with the requirement of Section 177 of the Companies Act, 2013 and provisions of Regulation 18 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has constituted the Audit Committee which comprises 4 (Four) Members viz. Shri P. Kumar (Chairman), Shri Kamal Kishore Kacholia and Dr. S. B. Agarwal, Independent Directors and Shri Ravindra Kumar Toshniwal, Managing Director.
The composition, role, functions and powers of the Audit Committee are in accordance with the applicable laws and provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are furnished in Corporate Governance Report annexed hereto as Annexure-II.
Auditors
Statutory Auditor
M/s. K. G. Somani & Co., Chartered Accountants, New Delhi (Firm Registration No. 006591N), were appointed as Statutory Auditors of the Company, for 5 years i.e. from 2017-18 to 2021-22, by the shareholders in their meeting held on 14th September, 2017. Accordingly, they hold office as the Auditors of the Company until the conclusion of the 46th Annual General Meeting. They have furnished a Certificate to the effect that they fulfill the requirements under the provisions of the Sections 139 and 141 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.
Statutory Auditors'' report
As regards the Statutory Auditors'' Observations, the relevant Notes on Significant Accounting Policies, Notes on Accounts and, other disclosures are self-explanatory and, therefore, do not call for any further comments, except in the matter of non- payment of Custom Duty of Rs.298.13 Lakh for which the matter is under appeal before CESTAT, Ahmedabad and at Hon''ble Rajasthan High Court, Jodhpur and non-payment of Income Tax of ''587.61 lakh for which the matter is under appeal with CIT (Appeals), Udaipur. These liabilities will be met, if necessary, on final decisions of the respective Appellate Authorities.
Tax Auditor
As per the requirement of Section 44AB of the Income Tax Act, 1961, M/s Kalani & Company, Chartered Accountants (Registration No.000722C), Jaipur, had been appointed as Tax Auditors of the Company for the financial year 2017-18. M/s Kalani & Co. have been re-appointed for the financial year 2018-19 and their remuneration fixed as per the recommendation of the Audit Committee.
Cost Auditor
M/s. K.G. Goyal & Company, Cost Accountants (Registration No. 000017) carried out the cost audit for applicable businesses during the year. The Company has re-appointed M/s. K.G. Goyal & Company, Cost Accountants (Registration No. 000017), as Cost Auditors of the Company for the financial year 2018-19. They have furnished a Certificate to the effect that their appointment, if made, would be in accordance with the provisions of Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.
As required under the Companies Act, 2013, a resolution seeking members'' approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.
The Companies (Accounts) Amendment Rule, 2018 mandate the company to disclose maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, and accordingly such accounts and records, are made and maintained by the Company.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of the Managerial Personnel) Rules, 2014, the Company had appointed V.M. & Associates (FRN: P1984RJ039200) Jaipur, a firm of Company Secretaries in practice, to undertake the secretarial audit of the Company for the financial year ended 31st March, 2018. The report of the Secretarial Audit is annexed as Annexure-V. As regards the auditors'' observations, these are self explanatory and do not call for any comments.
On the recommendation of the Audit Committee, the Board of Directors has re-appointed V.M. & Associates as Secretarial Auditors to carry out secretarial audit for the financial year 2018-19 also.
Particulars of loans given, investments made, guarantees given and security provided
The Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.
Energy conservation, technology absorption & foreign exchange earnings and outgo
Information pursuant to the provisions of Section 134 (3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in relation to conservation of energy consumption, technology absorption, foreign exchange earnings and outgo, is annexed and marked as Annexure-VI, which forms part of this report.
Insurance
All the properties of the Company including buildings, plant and machinery and stocks have been adequately insured. Dematerialization of shares
In pursuance of SEBI /Stock Exchange directions, your Company has offered demat option to its esteemed shareholders so as to enable them to trade the shares in the demat form. In response, 98.22% shares have been converted into demat form up to 31st March, 2018, The stock code number in NSDL and CDSL for equity shares of the Company is ISIN - INE 629 D01012.
Particulars of employees
During the year under report, the relations between the Company''s management and staff/workers continued to remain cordial. The Directors place on record their deep appreciation of the devoted services of the workers, staff and executives.
The information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, pertaining to the employees is annexed as Annexure-VII.
Further, pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the relevant statement is annexed as Annexure-VIII.
Significant and material orders passed by the Regulators or Courts
There have been no significant or material orders passed by the Regulators or Court/Tribunal, during the year under report that would impact the going concern status of the Company and its future operations.
Extract of Annual Return
An extract of Annual Return for the financial year ended 31st March, 2018 as required under Section 92(3) of the Companies Act, 2013, in Form MGT-9 is annexed as Annexure-IX.
Material changes and commitments
There were no material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report which can affect the financial position of the company.
Acknowledgments
Your Directors wish to express their gratitude for the guidance and co-operation received by the Company from the financial institutions, banks, various Central & State Government Departments and Customers and Suppliers during the year under report. The Directors, particularly, wish to acknowledge and place on record the continuous support and guidance of all the shareholders and, more importantly, for the confidence reposed in the Company''s management.
For and on behalf of the Board
Banswara Syntex Limited
R. L. TOSHNIWAL
Place: Mumbai CHAIRMAN
Dated: 13th August, 2018 DIN: 00106933
Mar 31, 2016
Dear Shareholders,
The Directors are pleased to present the 40th Annual Report of the Company together with its Audited Accounts for the year ended 31st March, 2016.
Financial review (Rs, in Lacs)
|
Current year 2015-16 |
Previous year 2014-15 |
|
|
Gross Income |
127099 |
123565 |
|
Net Income |
126465 |
122616 |
|
Profit before interest, extraordinary items, depreciation & tax |
17136 |
15454 |
|
Profit before depreciation & tax |
10137 |
7385 |
|
Less: Depreciation |
5754 |
5939 |
|
Profit before tax |
4383 |
1446 |
|
Tax Expenses |
1663 |
643 |
|
Profit after Tax |
2720 |
803 |
|
Dividend on Equity Shares |
339 |
164 |
|
Tax on Dividend |
69 |
33 |
|
Earnings per share (Rs) : Basic |
16.12 |
5.06 |
|
Diluted |
16.12 |
4.90 |
Operations & state of affairs
The production quantity during 2015-16, when compared with previous year is almost flat for yarn, increased by 2.50% for fabrics and has marginally declined in case of garments.
Your Company''s net income from operations during 2015-16 has been Rs,1265 Crores as against Rs,1226 Crores during 2014-15.
The profit before interest, depreciation and tax (PBIDT) during 2015-16 is Rs,171 Crores as against Rs, 155 Crores during 2014-15 - up by 10%. Similarly, the profit before depreciation and tax (PBDT) has been Rs,101 Crores as against Rs, 74 Crores during 2014-15. The post tax net profit of the Company during 2015-16 at Rs, 27.20 crores increased by more than 239% over the previous year.
The basic and diluted EPS for the year 2015-16 is same at Rs, 16.12 as against Rs, 5.06 and Rs, 4.90 respectively for 2014-15.
Your Company has charged depreciation on fixed assets as per the provisions of Schedule II of the Companies Act, 2013.
The Company has obtained approval of Shareholders, Secured Creditors and Unsecured Creditors for amalgamation of Banswara Global Limited (wholly Owned subsidiary of BSL) and Banswara Fabrics Limited (an associate company of BSL) with your Company in Court convened Meetings held on 28th March, 2016. The Company has also filed Company Petitions before Hon''ble Rajasthan High Court, Jodhpur, for approval of scheme of amalgamation.
There is no change in the nature of Company''s business during the year as it remains in the business of manufacturing and marketing of the textile products.
Exports
During the year, the export turnover of the Company has been Rs, 580 Crores as against Rs, 526 Crores during 2014-15. The share of export turnover in the net income has increased from 43% in 2014-15 to 46% during 2015-16.
During the year under report, the Company''s marketing as well as design and development teams continued to participate in the international trade fairs, meetings with the customers abroad for regular feedback of market trends, demand, etc. in the international market.
Dividend
Your Directors are pleased to recommend dividend of '' 2 per equity share (previous year Rs, 1/- per share). The total dividend payout on Equity shares for the year will absorb Rs, 3.39 Crores (previous year - Rs, 1.64 Crores) and Rs, 0.69 Crore by way of tax on dividend (previous year - Rs, 0.33 Crore).
The Company has transferred unclaimed dividend amount to the investor Education and Protection Fund for dividend declared up to the year 2007-08.
Increase in paid-up share capital
The Board had, in its meeting held on 13th November, 2013, issued 16,00,000 warrants to promoters and promoters'' group, convertible into an equal number of equity shares, at the price of '' 41.50 per warrant including premium of '' 31.50 per share.
Out of the warrants issued to the promoters and promoters'' group, your directors had converted 10,90,000 warrants into equal number of Equity Shares up to 31st March, 2015. On 8th May, 2015, balance 5,10,000 warrants were also converted into equal number of Equity Shares.
The Company has forfeited 27,015 partly paid up Equity shares on 27th May, 2015 due to nonpayment of call money due thereon.
The paid up equity share capital of the Company has increased from Rs, 1643.14 lacs as on 31st March, 2015 to Rs,1,692.93 lacs as on 31st March, 2016 due to conversion of above warrants into equity shares.
Expansion, diversification and modernization
During the year, the Company invested Rs, 30.29 Crores for acquisition of fixed assets as at 31st March, 2016, the capital-work-in progress stood at Rs, 7.86 Crores and advances to the capital goodsRs, suppliers aggregated Rs, 3.05 Crores, as against Rs, 10.04 Crores and Rs, 1.85 Crores respectively at the beginning of the year.
The total production capacity of the Company as at 31st March, 2016 for yarn production is 151672 ring spindles including 21120 spindles for worsted yarn spinning and 592 Air Jet spindles, 368 shuttle less looms, 34 Air Jet jacquard looms, 8 stenters with processing capacity of 5 million mtrs. per month and 3.82 lac pieces of garments per month.
Subsidiaries, Joint Ventures and Associates
In accordance with the General Circular, issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary, Joint Venture and Associate Company are not being attached with the Balance Sheet of the Company. However, Pursuant to Section 129 of the Companies Act, 2013, the financial information of the subsidiary Company is disclosed in the Annual Report in compliance with the said circular. The Company will make available the Annual Accounts of the subsidiary company and the related detailed information to any member of the Company who requests for the same. The annual accounts of the subsidiary company will also be kept open for inspection at the Registered Office of the Company and that of the respective subsidiary company. The Consolidated Financial Statements presented by the Company include the financial results of its Subsidiary, J.V. and Associate Companies.
Pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 and Rules 5 and 8(1) of the Companies (Accounts) Rules, 2014, the salient features of the financial statements, performance and financial position of the subsidiary, joint venture and Associate companies in Form AOC-1 is furnished as Annexure I to this Report.
The Company has framed a policy for determining Material Subsidiaries, which has been uploaded on the Company''s website.
Subsidiary
Banswara Global Ltd. (BGL) is a wholly owned subsidiary company of Banswara Syntex Ltd.
During the year, Banswara Global Ltd. produced 47.15 lac mtrs. of fabric (previous year 43.32 lac mtrs.) on job work basis for your Company. Total turnover of BGL during 2015-16 was Rs, 931 lacs and the net profit after tax was Rs, 2.45 lacs.
Joint Venture
Your Company holds 50% of the paid up share capital in JV company i.e. Treves Banswara Private Limited. The balance 50% of share capital is held by Treves Textiles & Seats Components, France.
During the year 2015-16, Treves Banswara Private Limited produced 4.82 lac mtrs. of Laminated Fabric and 0.35 lac pcs. of Embossed Panels and Flex. Total turnover of this JV company during 2015-16 was Rs, 1118 lacs (previous year Rs,622 lacs).
Associates
The Company has an associate company namely Banswara Fabrics Ltd. (BFL). Your Company holds 39.13% of the paid up share capital of BFL.
During the year, this associate company produced 10.25 lac mtrs. of fabric. Total turnover of BFL during the year has been Rs,322 lacs and the net profit after tax has been Rs, 16.89 lacs.
Thermal Power Plant
The two units of Captive Thermal Power Plant (33 MW) are working satisfactorily. Your Company is consuming coal from domestic sources as well from imports.
Finance
During the year 2015-16, the Company got disbursement of long term loan of Rs, 4.50 Crores from IDBI Bank, Rs, 0.80 Crore from Punjab National Bank and Rs, 5.32 Crores from Union Bank of India for acquisition of fixed assets. The repayments of term loans made during the year aggregated Rs, 63.50 Crores.
The Company''s bankers have been providing need-based working capital after the review of requirements from time to time.
Consolidated Financial Statements
In accordance with the (AS)-21 on Consolidated Financial Statements read with AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures and also as per Section 129 of the Companies Act, 2013, the audited Consolidated Financial Statements are furnished in the Annual Report.
Contribution to Exchequer
During the year, your Company contributed Rs, 26.62 Crores to the Government Exchequer by way of Excise Duty, Service Tax, Value Added Tax (VAT), Income Tax, Dividend Distribution Tax and other payments.
Corporate Governance/Management Discussion & Analysis Report
As per Clause 49 of the Listing Agreements with the Stock Exchanges and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Code of Conduct which is applicable to the members of the Board, Key Managerial Personnel (KMP) and Senior Management. The Company fully complies with the Corporate Governance practices as enunciated in the Listing Agreements and SEBI (LODR) Regulations, 2015, Corporate Governance Report and Management Discussion & Analysis Report; these are annexed and form part of this report as Annexure-II.
Fixed Deposits
As per the provisions of the Companies Act, 2013, the Company has invited fixed deposits from members of the Company as approved by the shareholders in their meeting held on 12th September, 2015. The Company had such deposits aggregating Rs, 1175 lacs as on 31st March, 2016. There has been no default in repayment of deposits or interest thereon and no deposit is unclaimed or matured but not paid as on 31st March, 2016. The Company has duly complied with the provisions of the Companies (Acceptance of Deposits) Rules, 2014.
Corporate Social Responsibility Initiatives
As a part of its initiatives under ''''Corporate Social Responsibility" (CSR), the Company has formed Corporate Social Responsibility Policy (CSR Policy) in terms of which, the Company has undertaken projects in the areas of environment, women and children empowerment, health, etc. These projects are largely in accordance with Schedule VII of the Companies Act, 2013.
As required under Section 134 (3) (o) and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014, the annual report on CSR activities, forming part of the Directors Report, is annexed as Annexure III.
Risk Management
The risk assessment and minimization procedures are in place and the Board is regularly informed about the business risks and the steps taken to mitigate the same.
Pursuant to requirement of Clause 49 of the Listing Agreements, the Company had constituted Risk Management Committee which was dissolved by the Board of Directors at their Meeting held on 11th February, 2016 as the same is not legally mandatory and the matter is fairly regularly discussed at the Board level.
Internal Control System and its adequacy
The Company has internal control system commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence of the audit, the Chief Internal Auditor reports to the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with the operating systems, accounting procedures and policies at all locations of the Company and its Subsidiary and associate companies. Based on the reports of the internal auditors, the process owners undertake corrective actions in their respective areas and thereby strengthen the controls. The report on major observation of internal auditors and action taken thereon is regularly reported to Audit committee on a quarterly basis.
Vigil Mechanism/Whistle Blower Policy
The Company has adopted a Vigil Mechanism/Whistle Blower Policy to provide a vigil mechanism to its Directors and employees to report their concerns about unethical, behavior, actual or suspected trend of company''s code of conduct . The details of the policy is explained in the Corporate Governance Report and also posted on website of the Company at www.banswarasyntex.com
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has zero tolerance policy for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed there under.
The Company has not received any complaint on sexual harassment of women at work place during the financial year 2015-16.
Directors and Key Managerial Personnel
During the financial year 2015-16, Shri P. K. Bhandari (DIN: 00021923), Director, has resigned from the Board of Directors of the Company. His resignation was accepted by the Board in its Meeting held on 14th August, 2015. The Board wishes to place on record its deep appreciation for the contribution made by Shri P. K. Bhandari during his tenure as a member of the Board of Directors of the Company.
Shri Arun Agarwal (DIN: 00194010) a fellow member of Institute of Chartered Accountants of India was appointed as an additional Director by the Board of Directors of the Company, in their Meeting held on 4th November, 2015, to hold office till the next AGM. However, Shri Arun Agarwal has since resigned from Directorship of the Company due to his pre- occupation with others. The Board has accepted his resignation at its meeting held on 23rd May, 2016.
Shri Shaleen Toshniwal (Din: 00246432), Joint Managing Director of the Company is liable to retire by rotation pursuant to provisions of the Companies Act, 2013 and Articles of Association of the Company. He would retire by rotation at the ensuing AGM and being eligible offers himself for re-appointment. The Board has decided to re-appoint him and, accordingly, an agenda item has been proposed in the notice to the shareholders for their approval.
A brief resume and other information required under Clause 49 of the Listing Agreements is included in the Annual Report/ Notice of Annual General Meeting. The Board recommends his re-appointment.
The Company has formulated a policy for performance evaluation of Independent Directors, Board, Committees and individual Directors which include criteria for performance evaluation of the non-executive independent directors and executive directors.
Declaration of Independent Directors
All Independent Directors have furnished declarations to the effect that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013, Clause 49 of the Listing Agreements and SEBI( Listing Obligations and Disclosure Requirement) Regulations, 2015.
Board evaluation
Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges the Board has adopted a formal mechanism for evaluating its performance as well as that of its Committees and Individual Directors. The exercise was carried out through structured evaluation process through a questionnaire sent to all Directors followed by discussions in specific manner covering various aspects of the Board''s functioning such as its composition of the Board and Committees, effectiveness of the process etc.
Separate exercise was carried out to evaluate the performance of individual Directors including the Chairman and Whole Time Directors on specific parameters such as attendance, contribution, independent judgment, safeguarding the interest of minority shareholders etc.
The evaluation of independent Directors was carried out by the Executive Directors. The Board of Directors expressed its satisfaction on the evaluation process.
Remuneration Policy
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for appointment of Directors, Key Management personnel and Senior Management and as also their remuneration. The Remuneration Policy is stated in the Corporate Governance Report and also posted on the website of the Company at www.banswarasyntex.com.
Related party transactions
All related party transactions executed during the financial year were carried out on an Arms'' Length basis and were carried out in the ordinary course of business.
Details of all related party transactions are reported to the Audit Committee and the Board for approval. The approval of the shareholders for related party transactions was also obtained in the Annual General Meeting of the Company held on 12.9.2015. The particulars of the contracts or arrangement enter into with related parties referred to in sub section (1) of Section 188 are indicated in Form AOC 2 which, forms part of this report as Annexure IV.
Board Meetings
Four meetings of the Board of Directors were held during the year i.e. on 27th May, 2015, 14th August, 2015, 4th November, 2015 and 11th February, 2016. Frequency and quorum, etc. at these meetings were in conformity with the provisions of the Companies Act, 2013.
Directors'' responsibility statement
As required under Section 134 (5) of the Companies Act, 2013 with respect to Directors'' Responsibility Statement, it is hereby confirmed that:
(a) In the preparation of the annual accounts for the year ended March 31, 2016, the applicable Accounting Standards have been followed and there are no material departures from the same. The Notes to the Accounts are self-explanatory.
(b) 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 as at 31st March, 2016 and of the profit of the Company for the year ended on that date.
(c) The Directors have taken proper and sufficient care 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 frauds and other irregularities.
(d) The Directors have prepared the annual accounts of the
Company for the year ended March 31, 2016 on a "going concern" basis.
(e) The Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and have been operating effectively.
(f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and have been operating effectively.
Audit Committee
In accordance with the requirement of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreements with Stock Exchanges, the Board has constituted the Audit Committee which comprises 3 (three) Independent Directors viz. Shri P. Kumar (Chairman), Shri Kamal Kishore Kacholia and Dr. S.B. Agarwal besides Shri Ravindra Kumar Toshniwal, Managing Director, as members.
The composition, role, functions and powers of the Audit Committee are in accordance with the applicable laws and the Listing Agreements with the Stock Exchanges and are furnished in Corporate Governance Report annexed hereto as Annexure II.
Auditors
Statutory Auditor
Kalani & Company, Chartered Accountants, Jaipur, were appointed as Statutory Auditors of the Company, for 3 years
i.e. 2014-15 to 2016-17, by the shareholders in their meeting held on 22.09.2014 subject to ratification of the appointment by the members at every General Meeting held thereafter. Accordingly, they hold office as the Auditors of the Company until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a Certificate to the effect that their re-appointment, if made, would fulfill the requirements under the provisions of the Sections 139 and 141 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.
Tax Auditor
As per the requirement of Section 44AB of the Income Tax Act, 1961, M/s Kalani & Company, Chartered Accountants, Jaipur, have been appointed as Tax Auditors of the Company for the year 2015-16. It is proposed to re-appoint them for the year 2016-17 and to fix their remuneration as per the recommendation of the Audit Committee.
Cost Auditor
The Company has re-appointed K.G. Goyal & Company, Cost Accountants, Jaipur, as Cost Auditors of the Company for the financial year 2016-17. They have furnished a Certificate to the effect that their appointment, if made, would be in accordance with the provisions of Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of the Managerial Personnel) Rules, 2014, the Company had appointed V.M. & Associates, a firm of Company Secretaries in practice to undertake the secretarial audit of the Company for the financial year ended 31st March, 2016. The report of the Secretarial Audit is annexed herewith as Annexure V. As regards auditors observations, these are self explanatory and do not call for any comments.
On the recommendation of the Audit Committee, the Board of Directors has reappointed V.M. & Associates to carry out secretarial audit for the year 2016-17.
Auditors'' report
As regards the Statutory Auditors'' observations, the relevant Notes on Significant Accounting Policies, Notes on Accounts and other disclosures are self-explanatory and therefore, do not call for any further comments, except in the matter of nonpayment of Custom Duty of ''267.24 lacs for which the matter is under appeal before CESTAT, Ahmadabad and at Rajasthan High Court, Jodhpur. In addition to this, nonpayment of Income Tax of ''4.96 lacs for which the matter is under appeal with CIT (Appeals), Udaipur.
These liabilities will be met, if necessary, on final decision of the respective Appellate Authorities.
Particulars of loan given, investment made, guarantee given and security provided
Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.
Energy conservation, technology absorption & foreign exchange earnings and outgo
Information pursuant to the provisions of Section 134 (3) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 in relation to conservation of energy, technology absorption, foreign exchange earnings and outgo, is annexed and marked Annexure VI, which forms part of this report.
Insurance
All the properties including buildings, plant and machinery and stocks have been adequately insured.
Dematerialization of shares
In pursuance of SEBI /Stock Exchange directions, your Company has offered demat option to its esteemed shareholders so as to enable them to trade the shares in the demat form. In response, 98.18% shares have been converted into demat form up to 31st March, 2016, The stock code number in NSDL and CDSL for equity shares of the Company is ISIN - INE 629 D01012. Particulars of employees
During the year under report, the relations between the Company''s management and staff/workers continued to remain cordial. The Directors place on record their deep appreciation of the devoted services of the workers, staff and the executives.
The information pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, of the employees is annexed as Annexure - VII.
Further pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the relevant statement is annexed as Annexure - VIII.
Significant and material orders passed by the Regulators or Courts
There are no significant or material orders passed by the Regulators or Court that would impact the going concern status of the Company and its future operations.
Extract of annual return
The details forming part of the extract of the Annual Return in Form MGT 9 is annexed as Annexure IX.
Acknowledgements
Your Directors wish to express their sincere appreciation for the guidance, co-operation and assistance extended to the Company by the financial institutions, banks, various Central
& State Government Departments, Customers and Suppliers during the year under report. The Directors, particularly, wish to acknowledge and place on record the continuous support and guidance of all the shareholders and, more importantly, the confidence reposed on the Company''s management.
For and on behalf of the Board
R. L. TOSHNIWAL
Place: Mumbai CHAIRMAN
Date: 23rd May, 2016 DIN: 00106933
Mar 31, 2014
Dear Shareholders,
The Directors are pleased to present the 38th Annual Report of the
Company together with its Audited Accounts for the year ended 31st
March, 2014.
FINANCIAL REVIEW
(Rs. in Lacs)
This year Previous year
2013-14* 2012-13
Gross lncome 123076 113044
Net Income 121220 109632
Profit before Interest, extra- 18131 15507
ordinary items, depreciation & tax
Prof it before depreciation & tax 10001 7277
Less: Depreciation 5196 5168
Prof it before tax 4805 2109
Tax on Income 2142 902
(a) Current Tax
(Net of MAT Credit of (112.27 lacs)
(previous year Rs. 142 lacs) 1458 323
(b) Deferred Tax 625 559
(c) Prior period tax 59 20
Profit after Tax 2663 1207
Dividend on Equity and Preference Shares 470.53 226.31
Tax on Dividend 79.96 36.71
Earning per share (Rs. ): Basic 16.86 8.14
Diluted 16.30 8.14
Rs. 1000 Lacs (Previous Year Rs. 500 Lacs) have been transferred to
General Reserve out of Surplus.
*Stand alone working performance of the Company (without
consolidation), there was no subsidiary company in 2012-13.
OPERATIONS
The production of yarn during 2013-14 has been 301 lac kgs. as against
310 lac Kgs. during 2012-13. During the year, the Company started
production of cotton yarn and produced 18.73 lac Kgs. The production of
worsted yarn has increased from 10.19 lac kgs. in 2012-13 to 11.19 lac
kgs. in 2013-14. Your Company has almost maintained the fabric
production at around 360 lac mtrs. while the garment production has
increased by 28% over the year.
During the year, your Company''s net income from operations aggregated
Rs. 1212 crore as against Rs. 1096 crore in 2012-13- an increase of
11%. The Company''s turnover in value terms has increased by 1 % for
yarn, 9% for fabric and 39% lor garments. This confirms Company''s
major thrust on sale of value added fabrics and the readymade garments.
Your Company has earned profit before interest, depreciation and tax
(PBIDT) at Rs. 181 crore as against Rs. 155 crore during 2012-13.
Similarly, the profit before depreciation and tax (PBDT) has been Rs.
100 crore as against Rs. 73 crore for the previous year. The post tax
net profit of the company at Rs. 26,63 crore was higher by 121% over
Rs. 12.07 crore for 2012-13 during the year, The basic and diluted EPS
for the year 2013-14 works out to Rs. 16.86 and Rs. 16.30 respectively
as against Rs. 8.14. (basic and diluted) for 2012-13.
EXPORTS
During the year, the export turnover of the company has been Rs. 605
crore as against Rs. 599 crore during 2012-13. Although the Company
recorded export growth of 14% in fabric and 29% in garments.
During the year under report, the Company''s marketing as well as design
and development team continued to participate in the international
trade lairs, meetings with the customers abroad for regular feed back
of trends, demand etc. in the international market. The Company has
added some more new customers Worldwide. Its design studio for fabric
and garments continued to help the Company to penetrate in the new
areas/customers, both domestically and internationally.
DIVIDEND
Your Directors are pleased to recommend dividend of Rs. 3.00 per equity
share. The Company has to make payment of 3% dividend on preference
shares. The total dividend payout on Equity and Preference shares for
the year will absorb Rs. 4.71 crore (previous year: Rs. 2.26 crore)
besides Rs. 0.80 crore previous year Rs. 0.37 crore by way of tax on
dividend.
INCREASE IN AUTHORIZED SHARE CAPITAL
The Board of Directors of the Company issued 600000 equity shares of
Rs. 10/- each at a premium of Rs. 31.50 per share to a foreign company,
on preferential basis, on 13th November, 2013. The Board, in the same
meeting, also issued 1600000 warrants to promoters and promoters''
group, convertible into an equal number of equity shares, at the price
of Rs. 41.50 per warrant including premium of Rs. 31.50 per share.
Out of the warrants issued to the promoters and promoters'' group, your
directors have converted 170000 warrants into an equal number of Equity
Shares on 12th February, 2014. As on date. 1430000 warrants still
remain to be converted into an equal number of equity shares before
11.05.2015.
The paid up equity share capital of the Company stands increased from
Rs. l475.64 lacs as on 31st March 2013 to Rs. 1552.64 lacs as on 31st
March, 2014 due to issuance of these shares.
Both the above mentioned preferential issues were made as per the SEBI
(ICDR) Regulations, 2009.
EXPANSION, DIVERSIFICATION AND MODERNIZATION
During the year, the Company invested Rs. 53.30 crore for acquisition
of fixed assets;. As at 31st March, 2014 the capital- work-in progress
stood at Rs. 8.54 crore and advances to the capita! goods'' suppliers
aggregated Rs. 4.54 crore, as against Rs. 7.77 crore and Rs. 4.32 crore
respectively as at the beginning of the year. Capacity expansion has
taken place by adding 30 looms in weaving section and one line for
trousers in garment division. Similarly, in the fabric processing unit,
few more balancing machines viz. one continuous scouring and bleaching
range, one continuous crabbing machine, one stenter of 8 chambers and
one padding machine have been added.
The total production capacity of the Company as at 31st March, 2014 for
yarn production is 151672 ring spindles including 21120 spindles for
worsted yam spinning, 12096 spindles for cotton yarn, 592 Air Jet
spindles, 380 shuttle less looms, 33 Air Jet jacquard looms, 8 stenters
with processing capacity of 5 million mtrs. a month and Rs. 3,75 lac
pieces of garments per month.
The Company has plans to invest about Rs. 25 crore for expansion and
modernization of the plant during the year 2014-15. This would mainly
add 4 lines for trousers and one line for jackets for garment section,
modernization of inspection and packing for fabric, besides balancing
equipment in dye house and spinning sections.
JOINT VENTURE
The Company has a Joint Venture namely Treves Banswara Private Limited
with Treves S.A. France. The Company holds 50% of the share capital in
the joint venture.
During the year Treves Banswara Private Limited, produced 2.49 lac
mtrs. of Laminated Fabric. The JV company has also started produdion of
Cut Panels, Embossed Panels and Flex and has produced 24200 pcs. of
these qualities during 2013-14; total turnover of the JV company during
the year aggregated Rs. 645 lacs.
The Company had another joint venture with Carreman, France. Both the
Companies had 50;50 Equity Share in Carreman Fabrics India Limited
CFIL. The Joint venture agreement dated 17th February, 2006 was
terminated vide JV termination agreement dated 06.08.2013. Your company
has purchased 60% of the equity shares held by Carreman, France. As
such CFIL has become subsidiary company w.e.f. 19.10.2013. The Board of
Directors of CFIL has since changed its name to Banswara Global
Limited.
THERMAL POWER PLANT
The Company''s both units of Captive Thermal Power Plant (33 MW) are
working satisfactorily. Your Company is consuming coal from domestic
sources as well from imports. The power plants availability factor
during the year 2013-14 was 98.09% as against 97.70% during 2012-13.
FINANCE
During the year 2013-14, to augment the long term resources for meeting
the Working Capital requirements, the Company requested and obtained
Working Capital Term Loan of Rs. 21 crore from Punjab National Bank and
Rs. 6.85 crore from Exim Bank. Term Loans of Rs. 18.91 crore got
disbursed for investment in fixed assets. The total repayment of term
loan got during the year was Rs. 45.62 crore.
Your Company is now engaged in balancing of its existing production
capacities to achieve higher production with improvement in quality and
has therefore, applied for a term loan of Rs. 10 crore from Punjab
National Bank; the sanction is awaited. The Company''s bankers have
been providing need based increase(s) in working capital limits based
on review of requirements from time to time.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the Accounting Standard (AS)-21 on Consolidated
Financial Statements, read with AS-23 on Accounting for Investments in
Associates and AS-27 on Financial Reporting of Interest in Joint
Ventures, the audited Consolidated Financial Statements are provided in
the Annual Report.
SUBSIDIARIES
In accordance with the general circular issued by the Ministry of
Corporate Affairs, Government of India, the Balance Sheet, Statement of
Profit and Loss and other documents of the subsidiary Company are not
being attached with the Balance Sheet of the Company. However, the
financial information of the subsidiary Company is disclosed in the
Annual Report in compliance with the said circular. The Company will
make available the Annual Accounts of the subsidiary company and the
related detailed information to any member of the Company who may be
interested in obtaining the same. The annual accounts of the subsidiary
company will also be kept open for inspection at the Registered Office
of the Company and that of the respective subsidiary company. The
Consolidated Financial Statements presented by the Company include the
financial results of its subsidiary company.
Details of the subsidiary Company and its business operations during
the year under review are covered in the Management Discussion and
Analysis Report.
CONTRIBUTION TO EXCHEQUER
During the year, your Company contributed RS. 34.96 crore to the
Government Exchequer by way of Excise Duty, Service Tax, Value Added
Tax (VAT), Income Tax, Dividend Distribution Tax and other payments.
CORPORATE GOVERNANCE / MANAGEMENT DISCUSSION & ANALYSIS REPORT
As per Clause 49 of the Listing Agreements with the Stock Exchanges,
the Company has adopted a Code of Conduct which is applicable to the
members of the Board and senior management. The Company fully complies
with the Corporate Governance practices as enunciated in the Listing
Agreements; Corporate Governance Report and Management Discussion &
Analysis Report are annexed and marked Annexure-I, which form part of
this report.
FIXED DEPOSITS
The Company has not issued any advertisement inviting fixed deposits
from the public. However, it continues to accept deposits from public.
As on 31st March, 2014, the Company had such deposits aggregating Rs.
1353.70 lacs. Deposits which matured during the year were either
renewed or repaid. All the interest and principal dues are being paid
regularly. The Company has duly complied with the provisions of the
Companies (Acceptance of Deposits) Rules, 1975.
The provisions relating to the acceptance of fixed deposit have been
changed by the Companies Act, 2013 and, accordingly, now, before
accepting any deposit from member of the Company or from public, the
Company must comply with the provisions of the new Act, which includes
shareholders'' approval, issuance of circular to its members obtaining
credit rating from independent agency etc. The Company shall comply
with these requirements before acceptance of new deposits.
DIRECTORS
During the year, the Export Import Bank of India has withdrawn the
nomination of Shri C. P. Ravindranath from the Board. The tenure of
Shri R. L. Toshniwal, Chairman, Shri Ravindra Kumar Toshniwal, Managing
Director, Shri Rakesh Mehra, Vice Chairman and Shri Shaleen Toshniwal,
Jt. Managing Director is expiring on 31st December, 2014. Based on the
recommendation of the Nomination and Remuneration Committee, the Board
has decided to re-appoint them for a further period of 3 years from 1st
January 2015 to 31st December, 2017 subject to approval of the
shareholders in the Annual General Meeting.
Shri R.L. Toshniwal, Chairman of the Company whose period of office is
liable to retire by rotation pursuant to provisions of Company Act,
2013 and Articles of Association of the Company retires by rotation at
the ensuring AGM and being eligible offers himself for re-appointment.
Further, Shri P. Kumar, Shri A.N. Jariwala, Shri Kamal Kishore
Kacholia, Shri Vijay Mehta, Shri D.P. Garg, Dr. S.B. Agarwal, Shri
Vijay Kumar Agarwal and Shri P.K. Bhandari who were appointed as a
Director liable to retire by rotation and whose term expires at this
Annual General Meeting, seek your support in confirming their
appointment as independent Directors of the Company not liable to
retire by rotation and to hold office for a term of five years
commencing from 1st April, 2014 upto 31st March, 2019.
A brief resume and other information required under clause 49 of the
listing agreement is included in the Annual Report/Notice of Annual
General Meeting. The Board recommends their re- appointment.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act, 1956, with
respect to Directors'' Responsibility Statement, it is hereby confirmed
that:
I. In the preparation of the annual accounts for the year ended March
31, 2014, the applicable Accounting Standards have been followed and
there are no material departures from the same. The Notes to the
Accounts are self-explanatory.
II. The Directors have selected such Accounting Policies and applied
them consistently and made judgments and estimates, that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31st March 2014 and of the profit of the Company
for the year ended on that date.
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 detecting frauds and other
irregularities.
IV. The Directors have prepared the annua! accounts of the Company for
the year ended March 31, 2014 on a "going concern" basis.
AUDIT COMMITTEE
In accordance with the requirement of Clause 49 of the Listing
Agreements with Stock Exchanges, the Board has constituted the Audit
Committee which comprises 3 (three) Independent Directors viz. Shri P.
Kumar (Chairman), Shri Kamal Kishore Kacholia and Dr. S.B. Agarwal
besides Shri Ravindra Kumar Toshniwal, Managing Director, as members.
The composition, role, functions and powers of the Audit Committee are
in accordance with the applicable laws and the Listing Agreements with
the Stock Exchanges.
AUDITORS
Statutory Auditor
Kalani & Company, Chartered Accountants, Jaipur, hold office as the
Auditors of the Company until the conclusion of the ensuing Annual
General Meeting and are eligible for re- appointment. They have
furnished a Certificate to the effect that then re-appointment, if
made, would fulfill the criteria and the provisions of the Section 139
and 141 of the Companies Act, 2013 read with Companies (Audit and
Auditors) Rules, 2014. Tax Auditor As per the requirement of Section
44AB of the Income Tax Act, 1961. M/s Kalani & Company. Chartered
Accountants, Jaipur, have been appointed as Tax Auditors of the Company
lor the year 2013-14. It is proposed to re-appoint them for the year
2014-15 and to fix their remuneration as per the recommendation of
Audit Committee.
Cost Auditor
The Central Government has approved the appointment of K.G. Goyal &
Company, Cost Accountants, Jaipur for conducting Cost Audit of the
company for the financial Year 2013-14.
The Cost Audit Report for the year 2013-14 shall become due for filing
on 27th September, 2014. The audit work is in progress, The Company has
re-appointed K.G. Goyal & Company, Cost Accountants, Jaipur, as Cost
Auditors of the Company lor the financial year 2014-15. They have
furnished a Certificate to the effect that their appointment, if made,
would be in accordance with the provisions of Section 148 of the
Companies Act, 2013 read with Companies (Audit and Auditors) Rules,
2014.
AUDITORS'' REPORT
As regards the Auditors'' observations, the relevant Notes in
Significant Accounting Policies. Notes on Accounts and other
disclosures are self-explanatory and, therefore, do not call for any
further comments, except in the matter of non payment of Rs. 42.03 lacs
towards Service Tax and Cess thereon. The matters pertaining to service
tax refunds availed by the Company are under appeal with CESTAT, New
Delhi and Commissioner Appeal, Jaipur, Rajasthan. In addition to this
the issues of non payment of Excise duty of Rs. 209.75 lacs and custom
duty of Rs. 1.70 lacs are under appeal before CESTAT, New Delhi,
Commissioner appeal, Jamnagar. Gujarat and at Mumbai High Court.
These liabilities will be met, if necessary, on final decision of the
respective Appellate
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS
AND OUTGO
Information pursuant to the provisions of Section 217(1 )(e) of the
Companies Act, 1956, in relation to conservation of energy, technology
absorption, foreign exchange earnings and outgo, in accordance with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is annexed and marked Annexure '' II'', which
forms part of this report.
DEMATERIALIZATION OF SHARES
In pursuance of SEBI /Stock Exchange directions, your Company has
offered demat option to its esteemed shareholders so as to enable them
to Irade the shares in the demat form. In response, 97.71% shares have
been converted into demat form up to 31st March, 2014, The stock code
number in NSDL and CDSL for equity shares of the Company is ISIN INE
629 D01012.
PARTICULARS OF EMPLOYEES
During the year under report, the relations between the Company''s
management and staff/workers continued to remain cordial. The Directors
place on record their deep appreciation of the devoted services of the
workers, staff and the executives.
As required under the provisions of Section 217 (2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the particulars of employees of the Company who were
in receipt of remuneration of Rs. 5,00,000/- per month or more are
annexed and marked Annexure ''III,'' which forms part of this report.
ACKNOWLEDGMENTS
Your Directors wish to express their sincere appreciation for the
guidance, co-operation and assistance extended to the Company by the
financial institutions, banks, various Central & State Government
Departments, Customers and Suppliers during the year under report. The
Directors particularly wish to place on record acknowledge the
continuous support and guidance of all the shareholders and, more
importantly, the confidence reposed in the Company''s management.
For and on Behalf of the Board
Place:Mumbai R.L.TOSHNIWAL
Date:24th May, 2014 Chairman
DIN:00106933
Mar 31, 2013
Dear Shareholders,
The Directors are pleased to present the 37th Annual Report of the
Company together with its Audited Accounts forthe year ended 31s''March,
2013.
FINANCIAL REVIEW
(Rs. in Lacs)
This year Previous year
2012-13 2011-12
Grosslncome 1,13,044 96,727
Net Income 1,09,632 92,384
Profit before Interest, extra-
ordinary items, depreciation
& tax 15,507 13,561
Profit before depreciation & tax 7,277 6,041
Less: Depreciation 5,168 4,311
Profit before tax 2,109 1,730
Tax on Income 902 241
(a) Current Tax 323
(Net of MAT Credit of Rs. 142 lacs)
(Previous Year Rs. 349.34 lacs)
(b) Deferred Tax 559 241
(c) Prior period tax 20
Profit after Tax 1,207 1,489
Dividend on Equity and
Preference Shares 226.31 226.31
Tax on Dividend 36.71 36.71
Earning per share(Rs.): Basic & Diluted 8.14 10.06
Rs. 500 Lacs ( Previous Year Rs. 1500 Lacs)
have been transferred to
General Reserve out of Surplus
OPERATIONS
During the year, the production of Synthetic yarn increased to 301 lac
Kgs, up by 8%; however, due to demand recession for worsted fabric, the
worsted yarn production reduced by 27% in comparison to the year
2011-12. Production of garments increased by 17% to 25.55 lac pieces.
During the year, the Company produced more of value added fabric and
technical textiles. The production of fabric increased by 16% to 360
lac meters. The Company has started production of cotton yarn, cotton
yarn dyed shirting and piece-dyed suiting fabric also.
During the year, the Company''s net income from operations aggregated
Rs.1096 crores as against Rs.924 crore in 2011-12-an increase of 19%. The
Company''s turnover in value terms has increased by 16% for yarn, by 20%
for fabric and by 27% for garments. This confirms the Company''s major
thrust on value- added fabrics and the readymade garments.
During the year, the textile industry continued to face global
recession but your company''s profit before interest, depreciation and
tax (PBIDT) for 2012-13 improved to Rs.155 crore as against Rs.136 crore in
2011-12. Similarly, the profit before depreciation and tax (PBDT) was
higher at Rs.73 crore as against previous year''s Rs.60 crore, mainly due to
increased production and sales. However, inspite of better performance
at PBT level, the net profit of Company at Rs. 12.07 crore during 2012-13
is lower than Rs. 14.89 crore achieved in the year 2011-12, mainly
because of higher provision for tax liability.
The basic and diluted earnings per share works out to Rs.8.14 for the
year 2012-13 as against previous year''s EPS at Rs. 10.06.
EXPORTS
During the year, the export turnover was at Rs.599 crore was up by about
13% over Rs.531 crore during 2011-12. The growth happened in all the 3
segments viz. yarn, fabric and garments.
During the year under report, the Company''s marketing as well as design
and development team continued to collect the feed- back in the
international market by participation in the international trade fairs,
meetings with the customers, etc. The Company has added some more new
customers Worldwide. Its design studio for fabric and garments helped
the Company to penetrate in the new areas/customers, both domestically
and internationally.
DIVIDEND
Your Directors are pleased to recommend dividend of Rs.1.50 per equity
share i.e. the same as for the previous year. The total dividend payout
on Equity and Preference shares for the year will absorb Rs.2.26 crore
(previous year: Rs.2.26 crore) besides Rs.0.37 crore by way of tax on
dividend. The Company has to make payment of 3% dividend on preference
shares.
INCREASE IN AUTHORIZED SHARE CAPITAL
There has been no increase in equity and preference share capital
during the year.
EXPANSION, DIVERSIFICATION AND MODERNIZATION
During the year, the Company has invested Rs.79.50 crore for acquisition
of fixed assets including the capital-work-in progress at Rs.7.77 crores
and advances aggregating Rs.4.32 crore as at 31st March, 2013 to the
capital goods'' suppliers. Capacity expansion has taken place in all the
areas of operations. The worsted spinning capacity increased by 8256
spindles besides addition of 19 looms in weaving section, and one line
each for trousers and jackets production in garment division.
Similarly, in the fabric processing unit also, few more balancing
machines viz. one mercerizing, 6 jet and jiggars, one calendar, and one
sizing machine have been added.
The total production capacity of the Company as at 31st March, 2013 for
yarn production is 151672 ring spindles including 21120 spindles for
worsted yarn spinning, 592 Air Jet spindles, 359 shuttle less looms, 32
Air Jet jacquard looms, 7 stenters with processing capacity of 5.0
million meters a month and 3.45 lac pieces of garments per month.
The Company has plans to invest about Rs.20 crore for expansion and
modernization of the plant during the year 2013-14. This would add 21
looms and balancing equipment. Under the plan, the Company has
proposed to replace 1 stenter in finishing unit which will increase
fabric finishing capacity by 4 lac meters a month.
JOINT VENTURE
The Company has two Joint Ventures with two French Companies i.e.
Carreman and Treves S.A. The Company holds 50% share capital both in
Carreman Fabrics India Limited and Treves Banswara Private Limited.
Carreman Fabrics India Limited has a Weaving Unit doing Fabric
Production on job work basis for your Company. It has woven 54.76 lac
meters during 2012-13 as against 62.77 lac meters during 2011 -12. The
production is low due to reduction in looms and lower utilization of
available looms capacity.
Treves Banswara Private Limited manufactures Laminated, Knitted and
Woven Textiles for internal furnishing of Trains, Buses and other
Automobiles. 2012-13 was its first year of operation. The Company
produced 1.52 lac meters laminated fabric and achieved turnover of 7633
lac during the year.
THERMAL POWER PLANT
The Company''s both units of Captive Thermal Power Plant (33 MW) are
working satisfactorily. Your Company is consuming imported coal,
Lignite, Petcoke and Indian coal. The power plant availability factor
during the year 2012-13 was 97.70% as against 95.01 % during 2011 -12.
FINANCE
During the year 2012-13, the IDBI Bank Ltd. sanctioned Term Loans
aggregating 719.20 crore (Disbursed so far- 714.95 crore) to part
finance the Company''s expansion- cum-modernization project of 724.62
crore. The Export Import Bank of India and Bank of Baroda have also
disbursed balance amounts of 77.60 crore and 77.15 crore out of their
Term Loans of 729 crore and 744 crore respectively. The Company has
also applied for another term loan of 716 crore from Bank of Baroda to
part finance its proposed expansion-cum- modernization project of 720
crore.
The Company''s bankers have provided the need-based increased working
capital limits during the year.
CONTRIBUTION TO EXCHEQUER
During the year, your Company contributed 747.60 crore to the
Government Exchequer by way of Excise Duty, Service Tax, Value Added
Tax (VAT), Income Tax, Dividend Distribution Tax and other payments.
SUBSIDIARY COMPANY
The Company did not have any subsidiary as on 31" March, 2013. However,
it has 50% stake in equity capital of Carreman Fabrics India Ltd. and
Treves Banswara Pvt. Ltd., Joint Venture Companies with Carreman and
Treves S.A., both of France.
CORPORATE GOVERNANCE / MANAGEMENT DISCUSSION & ANALYSIS REPORT
As per Clause 49 of the Listing Agreements with the Stock
Exchanges, the Company has adopted a Code of Conduct which is
applicable to the members of the Board and senior management. The
Company fully complies with the Corporate Governance practices as
enunciated in the Listing Agreements; Corporate Governance Report and
Management Discussion & Analysis Report are annexed and marked
Annexure-I, which form part of this report.
FIXED DEPOSITS
The Company has not issued any advertisement inviting fixed deposits
from the public. However, it continues to accept deposits from public.
As on 31 *" March, 2013, the Company had such deposits aggregating
71249.60 lacs. Deposits which matured during the year were either
renewed or repaid. All the interest and principal dues are being paid
regularly. The Company has duly complied with the provisions of the
Companies (Acceptance of Deposits) Rules, 1975.
DIRECTORS
In accordance with the provisions of Articles of Association of the
Company, Shri P. Kumar, Shri P.K. Bhandari and Shri D.P. Garg are
retiring by rotation and, being eligible, offer themselves for
re-appointment.
DIRECTORS'' RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act, 1956, with
respect to Directors'' Responsibility Statement, it is hereby confirmed
that:
I. In the preparation of the annual accounts for the year ended March
31,2013, the applicable Accounting Standards have been followed and
there are no material departures from the same. The Notes to the
Accounts are self-explanatory.
II. The Directors have selected such Accounting Policies and applied
them consistently and made judgments and estimates, that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31sl March, 2013 and of the profit of the Company
for the year ended on that date.
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 detecting frauds and other
irregularities.
IV. The Directors have prepared the annual accounts of the Company for
the year ended March 31, 2013 on a "going concern" basis.
AUDIT COMMITTEE
In accordance with the requirement of Clause 49 of the Listing
Agreements with Stock Exchanges, the Board has constituted the Audit
Committee which comprises 3 (three) Independent Directors viz. Shri P.
Kumar (Chairman), Shri Kamal Kishore Kacholia and Shri S.B. Agarwal
besides Shri Ravindra Kumar Toshniwal Managing Director as members.
The composition, role, functions and powers of the Audit Committee are
in accordance with the applicable laws and the Listing Agreements with
the Stock Exchanges.
AUDITORS
Statutory Auditor
Kalani & Company, Chartered Accountants, Jaipur, hold office as the
Auditors of the Company until the conclusion of the ensuing Annual
General Meeting and are eligible for re- appointment. They have
furnished a Certificate to the effect that the re-appointment, if made,
would be within the limits prescribed under Section 224(1-B) of the
Companies Act, 1956.
Cost Auditor
The Central Government has approved the appointment of K.G. Goyal &
Company, Cost Auditors, for conducting Cost Audit for the financial
Year 2012-13.
The Cost Audit Report for the year 2012-13 shall become due for filing
on 27* September, 2013. The audit work is in progress.
The Company has appointed K.G. Goyal & Company, Cost Accountants,
Jaipur, as Cost Auditors of the Company for the financial year 2013-14.
They have furnished a Certificate to the effect that their appointment,
if made, would be within the limits prescribed under Section 224(1-B)
of the Companies Act, 1956.
AUDITORS'' REPORT
As regards the Auditors'' observations, the relevant Notes in
Significant Accounting Policies, Notes on Accounts and other
disclosures are self-explanatory and, therefore, do not call for any
further comments, except in the matter of non payment of Rs.27.05 lacs
towards Service Tax and Cess thereon. The matter pertaining to service
tax refunds taken by the Company are under appeal with CESTAT, New
Delhi and Commissioner Appeal, Jaipur, Rajasthan.
These liabilities will be met, if necessary, on final decision of the
respective Appellate Authorities.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS
AND OUTGO
Information pursuant to the provisions of Section 217(1)(e) of the
Companies Act, 1956, in relation to conservation of energy, technology
absorption, foreign exchange earnings and outgo, in accordance with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is annexed and marked Annexure ''II'', which forms
part of this report.
DEMATERIALIZATION OF SHARES
In pursuance of SEBI /Stock Exchange directions, your Company has
offered demat option to its esteemed shareholders so as to enable them
to trade the shares in the demat form. In response, 97.49% shares have
been
converted into demat form up to 31s'' March, 2013, The stock code number
in NSDL and CDSL for equity shares of the Company is ISIN - INE 629
D01012.
PARTICULARS OF EMPLOYEES
During the year under report, the relations between the Company''s
management and its staff/workers continued to remain cordial. The
Directors place on record their deep appreciation of the devoted
services of the workers, staff and the executives.
As required under the provisions of Section 217 (2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the particulars of employees of the Company who were
in receipt of remuneration of 5,00,000/- per month or more are annexed
and marked Annexure ''III,'' which forms part of this report.
ACKNOWLEDGEMENTS
Your Directors wish to express their grateful appreciation for the
guidance, co-operation and assistance extended to the company by the
financial institutions, banks, various Central & State Government
Departments, Customers and Suppliers during the year under report. The
Directors particularly acknowledge the continuous support and guidance
of all the shareholders and, more importantly, for the confidence
reposed in the Company''s management.
For and on behalf of the Board
Place: Mumbai R. L. TOSHNIWAL
Date: 24th May, 2013 Chairman
Mar 31, 2012
The Directors are pleased to present the 36th Annual Report of the
Company together with its Audited Accounts for the year ended 31st
March, 2012.
FINANCIAL REVIEW
The financial performance of the Company for the year ended 31st March,
2012 is summarized below.
(Rs. in Lacs)
This year Previous year
2011-12 2010-11
Gross Income 96,728 83,805
Net Income 92,384 80,850
Profit before Interest, extra-
ordinary items, depreciation & tax 13,561 13,899
Profit before extra-ordinary items,
depreciation & tax 6,041 9,509
Profit before depreciation & tax 6,041 9,653
Less: Depreciation 4,311 3,402
Profit before tax 1,730 6,251
Tax on Income 241 1,558
(a) Current Tax - 1,264
(Net of MAT Credit of Rs. 349.34 lacs)
(Previous Year Rs. 35.71 lacs)
(b) Deferred Tax 241 294
Profit after Tax 1,489 4,693
Dividend on Equity and Preference Shares 226 788
Tax on Dividend 37 72
Earning per share (Rs): Basic 10.06 32.05
Diluted 10.06 31.79
Rs.1500 Lacs (Previous Year Rs. 3500 Lacs) have been transferred to
General Reserve out of Surplus
OPERATIONS
During the year 2011-12, the production of Synthetic yarn increased to
279 lac Kgs, up by 2% and that of worsted yam increased to 14.02 lac
Kgs, up by 16%. Production of garment increased by 7% to 21.93 lac
pieces. During the year the Company produced more of value added
fabrics and technical textiles. However, the overall production of
fabric at 311 lac meters was down by 4%. Over the previous year the
Company has started production of shirting fabric also.
During the year the Company's net income from operations at Rs. 924
crore recorded growth of 14% over Rs. 809 crore in 2010-11. The
Company's turnover in value for yarn increased by 13%, fabric by 14%
and garments by 29%. This confirms the Company's thrust on
value-added fabrics and readymade garments.
During the year, the textile industry faced global recession and the
Indian currency witnessed sharp fluctuations in its valuation against
US Dollars. The finance cost during the year also increased
substantially. The profit before interest, depreciation and tax for
F.Y. 2011-12 was Rs. 136 crore as against Rs. 139 crore
in 2010-11. The profit before depreciation and tax has been Rs. 60 crore
as against previous year's Rs. 97 crore. The reduction is mainly
attributed to the additional finance cost. In the wake of higher
quantum and increase in interest rate on borrowings besides withdrawal
of subvention. The net profit after tax at Rs. 14.89 crore is almost one
third of Rs. 46.93 crore for 2010-11. The Company has paid 1349 lacs,
(Previous Year Rs. 1,300 lacs) as income tax besides providing Rs.241 lacs
as deferred tax liability for the year under report.
The basic and diluted earnings for the year 2011 -12 works out to Rs.
10.06 per share as against previous year's EPS at Rs. 32.05 and Rs. 31.79
respectively.
EXPORTS
During the year, the export turnover excluding export benefits was at Rs.
472 crores as against Rs. 461 crores during 2010-11, up by about 2.37%.
The growth took place in all the 3 segments of yarn, fabric and
garments. The export performance of the Company was adversely affected
by the sharp fluctuations in exchange rate of Indian rupee against US
Dollar.
During the year under report, the Company's marketing as well as
design and development teams collected the feed-back in the
international market by participation in the international trade fairs,
meetings with the customers, etc. The Company has added few more new
customers World wide. Its design studio for fabric and garments helped
the Company to penetrate in the new areas/customers domestically and
internationally.
DIVIDEND
Your Directors now pleased to recommend dividend of Rs. 1.50 per equity
share against the previous year's total dividend of Rs.5/- per equity
share of Rs. 10/- each. The total dividend payout for the year will absorb
Rs. 221 lacs (Previous Year Rs. 733.45 lacs) besides Rs. 36.71 lacs by way of
tax on dividend. The Company is also to pay 3% dividend on preference
shares.
INCREASE IN AUTHORIZED SHARE CAPITAL
There has been no increase in equity and preference share capital
during the year.
EXPANSION, DIVERSIFICATION AND MODERNIZATION
During the year the Company has invested Rs. 82.64 crore for acquisition
of fixed assets, besides the capital-work-in progress at Rs. 25.67 crore
and advances to the capital goods' suppliers at Rs. 7.76 crore as at
31st March, 2012. Capacity expansion has taken place in all the areas
of operations. The ring spinning capacity increased by 2004 spindles,
besides addition of 112 looms in weaving section; one mercerizing
machine and one Raising machine have been installed in finishing house
and one line each has been added for production of Trousers and
Jackets. The Company discarded/sold 4908 spindles, 144 Airjet spindles
and 12 looms during the year.
The total production capacity of the Company as at 31M March, 2012 for
yarn production is 143416 ring spindles including 14400 spindles for
worsted yarn spinning, 592 Air Jet spindles, 340 shuttle less looms,
28 Air Jet jacquard looms, 7 stenters with processing capacity of
5 million meters a month and 2.95 lac pieces of garments per month.
The Company has plans to invest about Rs. 34 crore for expansion and
modernization of the plant during the year 2012-13. This would add
8256 ring spindles, 6720 worsted spindles, 30 looms and some yarn
dyeing machines to increase yarn dying capacity by 2 MT per day.
JOINT VENTURE
Carreman Fabrics India Ltd. the Joint Venture (JV) Company has a
weaving unit having installed capacity of 60 Rapier Looms of its own
along with 17 additionally installed looms of your Company in its
premises. Your Company has 50% stake In JV's equity share capital
with an equal stake of Carreman, France.
During the year 2011-12, JV Company produced 62.77 lacs meters of gray
fabric as against 64.83 lacs meters in the previous year. The net
profit during the year 2011-12 increased to Rs. 29.21 lacs as against
Rs. 24.13 lacs up by 21%.
Your Company, as a measure of further diversification of business, has
entered into another Joint Venture agreement with Treves S.A., France
with 50:50 partnership and incorporated a Special Purpose Vehicle (SPV)
to be known as "Treves Banswara Pvt. Ltd." The JV Company will produce
laminated knitted and woven textiles for internal furnishing of trains,
buses and other automobiles.
POWER PLANT
The Company's two units of Captive Thermal Power Plant of 33 MW
capacity are working satisfactorily. The Company is mainly consuming
imported Coal for these power plants. It has also signed a fuel supply
agreement with South Eastern Coalfields Limited (SECL) for purchase of
Indian Coal. The Company has also purchased lignite from Rajasthan
State Mines and Minerals Corporation Limited (RSMM) and GMDC, Gujarat.
The purchase of this coal has reduced the cost of power generation. The
Company's application for sanction of Government Coal Quota for 2nd
Unit of its power plant is under consideration with Ministry of
Coal/Power.
FINANCE
During the year 2011 -12, the Company availed Term Loans aggregating
Rs. 63.28 crore from Banks and Financial Institutions. The Company has
applied for additional term loan of Rs. 19.20 crore from IDBI Bank to part
finance its expansion-cum- modernization project of Rs. 34 crore.
The Company's bankers have provided the need base increased working
capital limits during the year.
CONTRIBUTION TO EXCHEQUER
During the year, your Company contributed Rs. 5,810.73 lacs to the
Government Exchequer by way of Excise Duty,
Service Tax, Value Added Tax (VAT), Income Tax, Dividend Distribution
Tax and other payments.
SUBSIDIARY COMPANY
The Company did not have any subsidiary as on 31st March, 2012.
However, it has 50% stake in equity capital of Carreman Fabrics India
Ltd. and Treves Banswara Pvt. Ltd., Joint Venture Companies with
Carreman and Treves S.A., both of France.
CORPORATE GOVERNANCE / MANAGEMENT DISCUSSION & ANALYSIS REPORT
As per Clause 49 of the Listing Agreements with the Stock Exchanges,
the Company has adopted a Code of Conduct which is applicable to the
members of the Board and senior management. The Company fully complies
with the Corporate Governance practices as enunciated in the Listing
Agreements; Corporate Governance Report and Management Discussion &
Analysis Report are annexed and marked Annexure-I, which form part of
this report.
FIXED DEPOSITS
The Company has not issued any advertisement inviting fixed deposits
from the public. However, it continues to accept deposits from public.
As on 31st March, 2012, the Company had such deposits aggregating
Rs. 939.95 lacs. Deposits which matured during the year were either
renewed or repaid. All the interest and principal dues are being paid
regularly. The Company has duly complied with the provisions of the
Companies (Acceptance of Deposits) Rules, 1975.
DIRECTORS
Export Import Bank of India (EXIM Bank) has withdrawn the nomination of
Dr. R. Swaminathan from the Board of the Company from 18.04.2012 and,
in his place, nominated Shri C.P. Ravindranath as their Nominee
Director on the Board of Directors of the Company. The Board wishes to
place on record its deep appreciation of the contribution made by
Dr.Swaminathan during the deliberations in Board meetings.
In accordance with the provisions of Articles of Association of the
Company, Shri Vijay Kumar Agarwal, Shri Kamal Kishore Kacholia and Shri
Vijay Mehta are retiring by rotation and, being eligible, offer
themselves for re-appointment.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act, 1956, with
respect to Directors' Responsibility Statement, it is hereby
confirmed that:
I. In the preparation of the annual accounts for the year ended March
3,1,2012, the applicable Accounting Standards have been followed and
the Notes to the Accounts are self- explanatory.
II. The Directors have selected such Accounting Policies and applied
them consistently and made judgments and estimates, that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31a March, 2012 and of the profit of the Company
for the year ended on that date.
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 detecting frauds and other
irregularities.
IV. The Directors have prepared the annual accounts of the Company for
the year ended March 31, 2012 on a going concern basis.
AUDIT COMMITTEE
In accordance with the requirement of Clause 49 of the Listing
Agreements with Stock Exchanges, the Board has constituted (the Audit
Committee which comprised as at 31.03.2012, 3(three) Independent
Directors viz. Shri P. Kumar (Chairman), Shri Kamal Kishore Kacholia
and Shri S.B. Agarwal as members. Shri Ravindra Kumar Toshniwal,
Managing Director has been included into the committee w.e.f. 2131 May,
2012.
The composition, role, functions and powers of the Audit Committee are
in accordance with the applicable laws and the Listing Agreements with
the Stock Exchanges.
AUDITORS
Statutory Auditor
Kalani & Company, Chartered Accountants, Jaipur, hold office as the
Auditors of the Company until the conclusion of the ensuing Annual
General Meeting and are eligible for re-appointment. They have
furnished a Certificate to the effect that the re-appointment, if made,
would be within the limits prescribed under Section 224(1-B) of the
Companies Act, 1956.
Cost Auditor
The Central Government has approved the appointment of the K.G. Goyal &
Company, Cost Auditors for conducting Cost Audit for the financial year
2011-12.
The Cost Audit Report for the year 2011 -12 shall become due for filing
on 27th September, 2012. The audit work is under process.
K.G. Goyal & Company, Cost Accountants, Jaipur, have been appointed as
Cost Auditors of the Company for the financial year 2012-13. They have
furnished a Certificate to the effect that their appointment, if made,
would be within the limits prescribed under Section 224(1-B) of the
Companies Act, 1956.
AUDITORS'REPORT
As regards the Auditors' observations, the relevant Notes on Account
are self-explanatory and, therefore, do not call for any further
comments, except in the matter of non payment of Service Tax and Cess
thereon of Rs. 27.05 lacs and disputed liabilities of Rs. 1.96 lacs towards
the excise duty. The matter pertaining to service tax refunds taken by
the Company are under appeal with CESTAT, New Delhi and Commissioner
Appeal, Jaipur, Rajasthan. Excise duty demand is under appeal with
Hon'ble High Court, Rajasthan & Joint Secretary, Govt, of India.
Income Tax demand of Rs. 26.35 lacs on account of additions and
disallowances made in the Assessment by the authority against which
appeal has been filed before Commissioner of Income Tax (Appeals) Udaipur.
These liabilities will be met, if necessary, on final decision of the
respective Appellate Authorities.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS
AND OUTGO
Information pursuant to the provisions of Section 217(1)(e) of the
Companies Act, 1956, in relation to conservation of energy, technology
absorption, foreign exchange earnings and outgo, in accordance with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is annexed and marked Annexure 'II', which
forms part of this report.
DEMATERIALIZATION OF SHARES
In pursuance of SEBI / Stock Exchange directions, your Company offered
demat option to its esteemed shareholders so as to enable them to trade
the shares in the demat form. In response, 97.41% shares have been
converted into demat form up to 3181 March, 2012. The stock code number
in NSDL and CDSL for equity shares of the Company is ISIN INE
629D01012.
PARTICULARS OF EMPLOYEES
During the year under report, the relations between the Company's
management and its staff/workers continued to remain cordial. The
Directors place on record their deep appreciation of the devoted
services of the workers, staff and the executives.
As required under the provisions of Section 217(2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the particulars of employees of the Company who were
in receipt of remuneration of Rs. 5,00,000/- per month or more are annexed
and marked Annexure 'III,' which forms part of this report.
ACKNOWLEDGEMENT
Your Directors wish to express their grateful appreciation for the
co-operation and assistance extended to the company by the financial
institutions, banks, various Central & State Government Departments,
Customers and Suppliers during the year under review. The Directors
thankfully acknowledge the continuous support and guidance of all the
shareholders and, more importantly, for the confidence reposed in the
Company's management.
For and on behalf of the Board
Place:Mumbai R. L. TOSHNIWAL
Date: 21st May,2012 Chairman
Mar 31, 2011
Dear Shareholders,
The Directors are pleased to present the 35th Annual Report of the
Company together with its Audited Accounts forthe year ended 31st
March, 2011.
FINANCIAL REVIEW
(Rs. in Lacs)
This year Previous year
2010-11 2009-10
Gross Income 83,801 64,683
Net Income 80,845 63,097
Profit before exceptional
items, depreciation & tax 10,140 6,799
Profit before extra-ordinary
items, depreciation & tax 9,509 6,799
Profit before depreciation
& tax 9,653 7,407
Less: Depreciation 3,402 3,073
Profit before tax 6,251 4,334
Tax on Income 1,558 1,246
(a) Current Tax 1,300 736
(b) Deferred Tax 294 530
1,594 1,266
Less: MAT Credit
Entitlement 36 20
Profit after Tax 4,693 3,088
Balance brought forward 1,044 536
Excess Dividend Amount
Written Back 38 -
Amount available for
appropriation 5,775 3,623
Appropriations:
Interim Dividend and
Tax thereon
(paid during the year) 344 229
Proposed Dividend on
Preference Shares 5.19 5,19
Proposed Final Dividend
on Equity Shares 439 295
Tax on Dividend 72 50
Transferto General
Reserve 3,500 2,000
Balance Carried to
Balance Sheet 1,415 1,044
Earning per share
(Rs): Basic : 32.05 23.56
Diluted: 31.79 20.92
OPERATIONS
During the year 2010-11, your Company's performance in all the areas of
operations has improved significantly. Production of synthetic yarn
increased to 274 Lac Kgs., up by 7%, and that of worsted yarn increased
to 12.13 Lac Kgs., up by 92%. Similarly, the production of suitings at
324 Lac Mtrs. went up by 26%. The Company's garment production also
increased by about 30% to 20.45 Lac pes. The Company also made its
forays in the production of technical textiles.
During the year 2010-11, the Company's net income from operations at
Rs.808 Crores recorded a growth of 28% over Rs.631 Crores in 2009-10.
The Company's turnover of yarn increased by 18%, fabric by 37% and
garments by 36% as compared to previous year. This conforms to the
Company's future business plan for a major thrust on value- added
fabric and garment business.
The profit before depreciation and tax for the year 2010-11 at Rs.96.53
Crores recorded an impressive growth of about 30%.
The profit before tax and net profit for the year at Rs.62.51 Crores
and Rs.46.93 Crores were up by 44% and 52% respectively over the
previous years to gives. During the current financial year, the Company
has provided forthe liability of entry tax and interest thereon
pertaining to the financial years from 2006-07 to 2010-11. The Company
has paid Rs.1300 Lacs as income tax besides providing Rs.294 Lacs as
deferred tax liability forthe year under report.
The basic and diluted earning per share for the year 2010-11 works out
to Rs.32.05 and Rs.31.79 respectively. (Previous year Rs.23.56 and
Rs.20.92).
EXPORTS
During the year 2010-11, the export turnover at Rs.461 Crores, as
against Rs.367 Crores during 2009-10, recorded an increase of 26%. Your
Company recorded export growth in yarn by 31 % and fabric by 27%. The
Company has maintained 65% share of export sales in the total turnover.
During the year under report the Company's marketing as well as design
and development teams collected the feed-back in the international
market by participation in the international trade fairs, meeting with
the customers etc. The Company has added few more new customers World
wide. Its design studio for fabric and garments helped the Company to
penetrate in the new areas/customers domestically and internationally.
DIVIDEND
The Company has already paid interim dividend of Rs.2.00 per equity
share in November, 2010. Your Directors are now pleased to recommend
final dividend of Rs.3.00 per equity share. Thus, the total dividend is
Rs.5.00 per equity share (Previous Year- Rs.3.50 per equity share) of
Rs. 10/- each of the Company. The dividend payout for the year would
aggregate Rs.733.45 Lacs besides dividend tax of Rs.120.13 Lacs. The
Company has also paid 3% dividend on preference shares.
INCREASE IN AUTHORIZED SHARE CAPITAL
During the year 2010-11, the authorized share capital of the Company
was increased from Rs.25 Crores divided into 2 Crores equity shares of
Rs.10/- each and 5 Lacs Redeemable Preference shares of Rs.100/- each
to Rs.50 Crores divided into Four Crores Fifty Lacs Equity Shares of
Rs.10/- each and Five Lacs Redeemable Preference Shares of Rs.100/-
each.
On 27.04.2010, the Company has converted 16,50,000 warrants (issued on
preferential basis to persons other than promoters @ Rs.41/- per
warrant) into equal number of equity shares. In view of this issued
share capital has increased from Rs.1,310.64 Lacs to Rs. 1,475.64 Lacs.
In addition, during the year, 19160 partly paid up shares were made
fully paid up, on receipt of allotment money from the concerned
shareholders. In view of conversion of the above warrants and partly
paid up shares into fully paid up shares, Paid up capital has increased
from Rs.1,308.14 Lacs to Rs.1,474.09 Lacs.
EXPANSION, DIVERSIFICATION AND MODERNIZATION
During the year the Company has invested Rs.149.91 Crores for
acquisition of fixed assets besides the capital work in progress at
Rs.16.16 Crores and advances to the capital goods' suppliers of Rs.7.65
Crores as at 31st March, 2011. Capacity expansion has taken place in
all the areas of operations. The Ring spinning capacity increased by
7824 spindles, Air Jet spinning by 160 spindles, besides addition of 66
looms in weaving section, 2 stenters in finishing house and 3 No. lines
of production of Trousers & Jackets. The Company discarded 3768
spindles and 22 looms, 2 looms were sold during the year. Besides this,
the Company's 2"" unit of Captive Thermal Power Plant of 15 MW capacity
was also commissioned in March, 2011.
The total production capacity of the Company as at 31st March, 2011 for
yarn production is 141412 ring spindles including 14400 spindles for
worsted yarn spinning, 736 Air Jet spindles, 248 shuttle less looms, 20
Air Jet jacquard looms, 7 stenters with processing capacity of 5
million meters a month and 2.70 Lac pieces of garments per month.
The Company has plans to invest about Rs.80 Crores for expansion and
modernization of the plant during the year 2011-12. This would add
18432 ring spindles, 96 looms and 2 No. lines for garments.
JOINT VENTURE
The Joint Venture (JV) Company, Carreman Fabrics India Ltd., has a
fabric weaving plant of 60 Rapier Looms of its own along with 17
additionally installed looms of your Company in its premises. Your
Company has 50% stake in JV's equity share capital. The JV Company
manufactures fabric on job work basis for your Company, the total
production during the year 2010-11 being Rs.64.83 Lacs grey meters as
against Rs.65.65 Lacs grey meters in the year 2009-10. The JV Company
earned net profit of Rs.24.13 lac during 2010-11 as against Rs.46.87
Lacs during 2009-10; the shortfall in the profitability is attributed
to lower productivity, increase in manufacturing expenses, repairs and
employee cost.
POWER PLANT
The 2nd unit of Captive Thermal Power Plant of 15 MW capacity started
generation of power from 9th March, 2011. The 1st unit of Captive
Thermal Power Plant is also working satisfactorily. The total power
generation capacity of the Company is now 33 MW. During the year, the
Company purchased coal from South Eastern Coalfields Ltd. (SECL)
against the Fuel Supply Agreement. The coal purchases from SECL have
reduced the cost of power generation. The Company has also applied for
sanction of Govt, coal quota for the second unit of its Power Plant.
FINANCE
During the year 2010-11, the Company availed Term Loans aggregating
Rs.94.67 Crores from Banks and Financial Institutions. The Company has
applied for additional term loan of Rs.29 Crores to Exim Bank to part
finance company's expansion cum modernization project of Rs.36.25
Crores.
The Company's bankers has provided the need base increase working
capital limit during the year.
CONTRIBUTION TO EXCHEQUER
During the year, the Company contributed Rs.4,720 Lacs to the
Government Exchequer by way of Excise Duty, Service Tax, Value Added
Tax (VAT), Income Tax, Dividend Distribution Tax and other payments.
SUBSIDIARY COMPANY
The Company did not have any subsidiary as on 31st March, 2011.
However, it has 50% stake in equity capital of Carreman Fabrics India
Ltd., a Joint Venture Company between Banswara Syntex Ltd. and
Carreman, France.
CORPORATE GOVERNANCE / MANAGEMENT DISCUSSION & ANALYSIS REPORT
As per Clause 49 of the Listing Agreements with the Stock Exchanges,
the Company has adopted a Code of Conduct which is applicable to the
members of the Board and senior management. The Company fully complies
with the Corporate Governance practices as enunciated in the Listing
Agreements; Corporate Governance Report and Management Discussion &
Analysis Report are annexed and marked Annexure-I, which form part of
this report.
FIXED DEPOSITS
The Company has not issued any advertisement inviting fixed deposits
from the public. However, it continues to accept deposits from public.
As on 31st March, 2011, the Company had such deposits aggregating
Rs.793.64 Lacs. Deposits which matured during the year were either
renewed or repaid. All the interest and principal dues are being paid
regularly. The Company has duly complied with the provisions of the
Companies (Acceptance of Deposits) Rules, 1975.
DIRECTORS
The Board of Directors has, in its meeting held on 6th February, 2011
appointed Shri P.K. Bhandari as an additional Director. He holds office
until the conclusion of ensuing Annual General Meeting. A proposal for
his re-appointment is being placed before the Annual General Meeting
for approval by the shareholders.
In accordance with the provisions of Articles of Association of the
Company, Shri D.P. Garg, Shri A. N. Jariwala and Shri S.B. Agarwal,
are retiring by rotation and, being eligible, offer themselves for
re-appointment.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act, 1956, with
respect to Directors' Responsibility Statement, it is hereby confirmed
that:
I. In the preparation of the annual accounts for the year ended 31st
March, 2011 the applicable Accounting Standards have been followed and
the Notes to the Accounts are self-explanatory.
ii. The Directors have selected such Accounting Policies and applied
them consistently and made judgments and estimates, that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31st March, 2011 and of the profit of the Company
for the year ended on that date.
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 detecting frauds and other
irregularities.
iv. The Directors have prepared the annual accounts of the Company for
the year ended 31st March, 2011 on a going concern basis.
AUDIT COMMITTEE
In accordance with the requirement of Clause 49 of the Listing
Agreements with Stock Exchanges, the Board has constituted the Audit
Committee which presently comprises three independent Directors viz.
Shri P. Kumar (Chairman), Shri Kamal Kishore Kacholiaand Shri S. B.
Agarwal as members. The composition, role, functions and powers of the
Audit Committee are in accordance with the applicable laws and the
Listing Agreements with the Stock Exchanges.
AUDITORS
Statutory Auditor
M/s. Kalani & Company, Chartered Accountants, Jaipur, hold office as
the Auditors of the Company until the conclusion of the ensuing Annual
General Meeting and are eligible for re- appointment. They have
furnished a Certificate to the effect that the re-appointment, if made,
would be within the limits prescribed under Section 224(1 -B) of the
Companies Act, 1956.
Cost Auditor
The Central Government has approved the appointment of the M/s. K.G.
Goyal & Company, Cost Accountants, Jaipur, as Cost Auditors for
conducting Cost Audit for the financial Year 2010-11. The Cost Audit
Report for the year 2010-11 shall become due for filing on 27th
September, 2011. The report is under process. M/s. K.G. Goyal &
Company, Cost Accountants, Jaipur, have been appointed Cost Auditors of
the Company for the financial year 2011 -12. They have furnished a
Certificate to the effect that their appointment, if made, would be
within the limits prescribed under Section 224(1 -B) of the Companies
Act, 1956.
AUDITORS'REPORT
As regards the Auditors' observations, the relevant Notes on Accounts
are self-explanatory and, therefore, do not call for any further
comments, except in the matter of non payment of Service Tax and Cess
thereon of Rs.26.20 Lacs and disputed liabilities of Rs.11.74 Lacs
towards the excise duty and Rs.631.56 Lacs towards entry tax. The
matter pertaining to service tax refunds taken by the Company are under
appeal with CESTAT, New Delhi and Commissioner Appeal, Jaipur,
Rajasthan. Excise duty demand is under appeal, with Hon'ble High Court
Rajasthan & Joint Secretary Govt, of India while the Entry Tax case is
pending with Hon'ble High Court, Rajasthan. The Company has paid
Rs.201.81 Lacs on 11.04.2011 against Entry Tax Dues. The Company has
also given Solvent Security Undertaking of Rs.315.28 Lacs to Commercial
Taxes Department.
These liabilities will be met, if necessary, on final decision of the
respective Appellate Authorities.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS
AND OUTGO
Information pursuant to the provisions of Section 217 (1) (e) of the
Companies Act, 1956, in relation to conservation of energy, technology
absorption, foreign exchange earnings and outgo, in accordance with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is annexed and marked Annexure 'II', which forms
part of this report.
DEMATERIALIZATION OF SHARES
In pursuance of SEBI / Stock Exchange directions, your Company offered
demat option to its esteemed shareholders so as to enable them to trade
the shares in the demat form. In response, 97.25% shares have been
converted into demat form up to 31st March, 2011. The stock code number
in NSDL and CDSL for equity shares of the Company is ISIN - INE 629
D01012.
PARTICULARS OF EMPLOYEES
During the year under report, the relations between the Company's
management and its staff/workers continued to remain cordial. The
Directors place on record their deep appreciation of the devoted
services of the workers, staff and the executives.
As required under the provisions of Section 217 (2A) of the Companies
Act, 1956, read with the Companies (Particulars of Employees) Rules,
1975, as amended, the particulars of employees of the Company who were
in receipt of remuneration of Rs.5,00,000/- per month or more are
annexed and marked Annexure 'III,' which forms part of this report.
ACKNOWLEDGMENT
Your Directors wish to express their grateful appreciation for the
co-operation and assistance extended to the company by the financial
institutions, banks, various Central & State Government Departments,
Customers and Suppliers during the year under review. The Directors
thankfully acknowledge the continuous support and guidance of all the
shareholders and, more importantly, for the confidence reposed in the
Company's manaqement.
For and on behalf of the Board
R.L.TOSHNIWAL
Chairman & Managing Director
Place: Mumbai
Date : 16th May, 2011
Mar 31, 2010
The Directors are pleased to present the 34th Annual Report
of the Company together with its Audited Accounts for the
year ended 31st March, 2010.
FINANCIAL REVIEW
(Rs. in Lacs)
This year Previous year
2009-201 2008-2009
Gross Income 64,683 55,895
Net Income 63,097 54,894
Profit before extra-ordinary items,
depreciation & tax 6,799 4,822
Profit before depreciation & tax 7,407 4,069
Less: Depreciation 3,073 2,939
Profit before tax 4,334 1,129
Tax on Income 1,246 170
(a) Current Tax 736 128
(b) Deferred Tax 530 140
(c) Fringe Benefit Tax _ 30
1,266 298
Less : MAT Credit Entitlement 20 128
Profit after Tax 3,088 959
Balance brought forward 536 608
Profit available for appropriation 3,623 1,567
Appropriations :
Interim Dividend and Tax thereon
(paid during the year) 230 -
Proposed Final Dividend 300 241
Tax on Dividend 50 41
Transfer to General Reserve 2,000 750
Balance Carried to Balance Sheet 1,044 536
Earning Per Share (Rs) : Basic 23 7.29
Diluted 20.92 7.29
OPERATIONS
During the year 2009-10, your Companys performance realed new heights,
both in terms of gross income and profitability. The net income from
operations during the year at Rs.631 crores went up by 15% over Rs.549
crores achieved in 2008-09. The production of yarn increased by 11%,
fabrics by 15% and garments by 45%. The Company also started production
of technical fabrics during the year. There is good scope for further
increase in production all along the value chain.
Profit before depreciation and tax for the year 2009-10 at Rs.7,407
lacs recorded in impressive growth of 82% over Rs.4,069 lacs of
2008-09. The profit before tax and net profit for the year worked out
to Rs.4,334 lacs and Rs.3,088 lacs, i.e. up by 284% and 222%
respectively over the previous year. The Company has paid Rs.736 lacs
as income tax besides providing Rs.530 lacs as deferred tax liability
for the year under report.
The basic and diluted Earning Per Share (EPS) for the year 2009-10
works out to an all time high of Rs.23.56 and Rs.20.92 respectively.
EXPORTS
During the year 2009-10, the export turnover at Rs.36,674 lacs as
against Rs.32,759 lacs during 2008-09, recorded an increase of 12%
mainly due to increase of 15% in yarn exports. The Company has
increased production and export of readymade garments and as such the
export growth in garments was more than 48% over the year 2008-09.
During the year under report, your Company added few more important
customers of world repute. The Companys marketing as well as, design
and development teams participated in the international trade fairs to
acquaint themselves with the latest market trends and acquire better
understanding of the customers requirements. The Company has developed
a design studio for fabrics and garments to boost the export sales by
introducing new designs. It is continuously making efforts to attract
the new customers domestically and internationally.
DIVIDEND
The Company has already paid interim dividend of Rs.1.50 per equity
share in January, 2010. Your Directors are now pleased to recommend
final dividend of Rs.2.00 per equity share. Thus, the total dividend is
Rs.3.50 per equity share (previous year- Rs.1.80 per equity share) of
Rs.10/- each of the Company. The dividend payout for the year would
aggregate Rs.490.85 lacs besides dividend tax of Rs.82.29 lacs. The
Company has also paid 3% dividend on preference shares.
INCREASE IN SHARE CAPITAL
During the year 2009-10, the Company issued 16,50,000 warrants on
preferential basis to persons other than promoters @ Rs.41 per warrant
based on the prevailing rules and regulations.
The Board of Directors, in its meeting held on 27th April, 2010 has
converted these warrants into an equal number of equity shares, as per
the terms of issue of these warrants. Accordingly, the equity share
capital of the Company has increased to 1,47,56,361 equity shares of
Rs.10/- each.
EXPANSION, DIVERSIFICATION AND MODERNIZATION
During the year under review, the Company has added fixed assets of
Rs.4,585 lacs besides-the-capital work-in-progress of Rs.828 lacs and
advances to capital goods suppliers of Rs.1,622 lacs as at 31.03.10.
These expenses were incurred on expansion, diversification and
modernization of all the areas of its operations viz. spinning,
weaving, finishing and readymade garments.
The Company has made investment of Rs.2,280 lacs in spinning for
modernization and replacement of spindles, Rs.447 lacs on fabric
weaving for replacing 20 looms, and Rs.951 lacs on fabric processing
facility adding various value adding machines suitable for technical
fabrics and increase in the processing capacity by about one million
meter a month besides Rs.907 lacs in readymade garments division for 4
additional lines for trousers and 1 line for production of Jackets at
Daman and Surat.
The total production capacity of the Company as at 31s March, 2010 for
yarn production is 133588 ring spindles, including 14400 spindles for
worsted yarn spinning, 576 air jet spindles, 190 shuttleless looms, 12
air jet jacquard looms, 5 stenters with processing capacity of 4
million meters a month and 2.50 lac pieces of garments per month.
The Company has arranged the requisite funds for the expansion,
diversification and modernization schemes through term loans from banks
and financial institutions as well as ploughing back of internal
accruals of the Company. The term loans availed during the year
aggregate Rs.3,541 lacs out of which Rs.2,964 lacs were under TUFS.
The Companys ongoing expansion plan i.e. 2nd unit of captive Thermal
Power Plant of 15/18 MW capacity and increase in production capacities
in all the areas of its operations is under implementation. Further
capital outlay expected during 2010-11 is Rs.90 crores. The means of
financing the same have been fully tied up.
JOINT VENTURE
The Joint Venture Company Carreman Fabrics India Ltd., has a fabric
weaving plant of 60 Rapier Looms. Your Company has 50% stake in JVs
equity share capital. The JV Company manufactures fabric on job work
basis for your Company, the total production during the year 2009-10
being 65.65 lac meters as against 62.35 lac meters in the year 2008-09.
The JV Company earned net profit of Rs.46.87 lac during 2009-10 as
against Rs.95.22 lac in the previous year; the shortfall in
profitability is attributed to increasing power maintenance and
employees cost.
POWER PLANT
The 1st unit of captive Thermal Power Plant of 15/18 MW capacity is
working satisfactorily. The Companys power requirement has increased
on account of expansion of capacity of various division at Banswara
over the years. The Company is in the process of installation of 2nd
unit of coal based Thermal Power Plant of the same capacity, which is
expected to become operational in the last quarter of the current
financial year, 2010-11. The Company has also signed a fuel supply
agreement for purchase of coal from South Eastern Coalfields Ltd. The
availability of Indian Coal at Government supply rates will reduce the
cost of power generation. The Government coal supply is expected to
commence from June/ July, 2010.
FINANCE
During the year 2009-10, the Company availed term loans aggregating
Rs.3,541 lacs from Banks and Financial Institutions. It also received
increase in need based working capital from all the bankers of the
Company.
CONTRIBUTION TO EXCHEQUER
During the year, your Company contributed Rs.2,478 lacs to the
Government Exchequer by way of Excise Duty, Service Tax, Value Added
Tax (VAT), Income Tax, Dividend Distribution Tax and other payments.
SUBSIDIARY COMPANY
The Company did not have any subsidiary as on 31st March, 2010.
However, it has 50% stake in equity capital of Carreman Fabrics India
Ltd., a Joint Venture Company between Banswara Syntex Ltd. and
Carreman, France.
CORPORATE GOVERNANCE/MANAGEMENT DISCUSSION & ANALYSIS REPORT
As per Clause 49 of the Listing Agreements with the Stock Exchanges,
the Company has adopted a Code of Conduct
applicable to the members of the Board and senior management. The
Company fully complies with the Corporate Governance practices as
enunciated in the Listing Agreements; Corporate Governance Report and
Management Discussion & Analysis Report are annexed and marked
Annexure-I, which form part of this report.
FIXED DEPOSITS
The Company has not issued any advertisement inviting fixed deposits
from the public. However, it continues to accept deposits from public.
As on 31s March, 2010, the Company had such deposits aggregating
Rs.743.17 lacs. Deposits which matured during the year were either
renewed or repaid. All the interest and principal dues are being paid
regularly. The Company has duly complied with the provisions of the
Companies (Acceptance of Deposits) Rules, 1975.
DIRECTORS
Appointment of Shri Shaleen Toshniwal as a Whole-time Director is
expiring on 30th September, 2010. The Board of Directors, in its
meeting held on 27th April, 2010 has re-appointed Shri Shaleen
Toshniwal as Whole-time Director for further period of 3 years from 1st
October, 2010 to 30th September, 2013. Necessary resolution for
appointment of Shri Shaleen Toshniwal shall be placed before the
shareholders at the forthcoming Annual General Meeting for their
approval.
In accordance with the provisions of Articles of Association of the
Company, Shri Kamal Kishore Kacholia, Shri Vijay Mehta and Shri P.
Kumar, Directors, are retiring by rotation and, being eligible, offer
themselves for re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act, 1956, with
respect to Directors Responsibility Statement, it is hereby confirmed
that:
I. In the preparation of the annual accounts for the year ended 31st
March, 2010 the applicable Accounting Standards have been followed and
the Notes to the Accounts are self-explanatory.
II. The Directors have selected such Accounting Policies and applied
them consistently and made judgements and estimates, that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as at 31st March, 2010 and of the profit of
the Company for the year ended on that date.
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 detecting frauds and other
irregularities.
IV. The Directors have prepared the annual accounts of the Company for
the year ended 31st Marcri, 2010 on a going concern basis.
AUDIT COMMITTEE
In accordance with the requirement of Clause 49 of the Listing
Agreements with Stock Exchanges, the Board has constituted the Audit
Committee which presently comprises three independent Directors viz.
Shri P. Kumar, (Chairman), Shri Kamal Kishore Kacholia and Shri S.B.
Agarwal as members.
The composition, role, functions and powers of the Audit Committee are
in accordance with the applicable laws and the Listing Agreements with
the Stock Exchanges.
AUDITORS
M/s. Kalani & Company, Chartered Accountants, Jaipur, hold office as
the Auditors of the Company until the conclusion of the ensuing Annual
General Meeting and are eligible for re-appointment. They have
furnished a Certificate to the effect that the re-appointment, if made,
would be within the prescribed limits under Section 224(1-B) of the
Companies Act, 1956.
AUDITORS REPORT
As regards Auditors observations, the relevant Notes on account are
self-explanatory and, therefore, do not call for any further comments,
except in the matter of non payment of Service Tax and Cess thereon of
Rs. 19.10 lacs and disputed liabilities of Rs.11.75 lacs towards the
excise duty and Rs.403.61 lacs towards entry tax. While the matter
pertaining to Excise duty refunds taken by the Company are under appeal
with Joint Secretary, Govt, of India, Service Tax demand with CESTAT,
New Delhi and Entry Tax is pending with Honble High Court, Rajasthan.
These liabilities will be met if necessary on final decision of the
respective Appellate Authorities.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS
AND OUTGO
Information pursuant to the provisions of Section 217 (1) (e) of the
Companies Act, 1956, in relation to conservation of energy, technology
absorption, foreign exchange earnings and outgo, in accordance with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is annexed and marked Annexure II, which forms
part of this report.
DEMATERIALIZATION OF SHARES
In pursuance of SEBI / Stock Exchange directions, your Company offered
demat option to its esteemed shareholders so as to enable them to trade
the shares in the demat form. In response, 95.60% shares have been
converted into demat form up to 31st March, 2010. The stock code number
in NSDL and CDSL for equity shares of the Company is (SIN - INE 629
D01012.
PARTICULARS OF EMPLOYEES
During the year under report, the relations between the Companys
management and its staff/workers continued to remain cordial. The
Directors place on record their deep appreciation of the devoted
services of the workers, staff and the executives.
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, the particulars of employees of the Company who were in
receipt of remuneration of Rs.2,00,000/- per month or more are annexed
and marked Annexure III, which forms part of this report.
ACKNOWLEDGEMENT
Your Directors wish to express their grateful appreciation for the
co-operation and assistance extended by the financial institutions,
banks, various Central & State Government Departments, Customers and
Suppliers during the year under review. The Directors thankfully
acknowledge the continuous support and guidance of all the shareholders
and, more importantly, for the confidence reposed in the Companys
management.
For and on behalf of the Board
Place : Mumbai R.L. TOSHNIWAL
Date : 2691 May, 2010 Chairman & Managing Director
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