Directors Report of Maral Overseas Ltd.
Mar 31, 2018
The Directors are pleased to present the Twenty Ninth Annual Report of your Company on business and operations along with the audited financial statements and the auditorâs report for the financial year ended 31st March, 2018.
Financial Results
Rs. In Crore
|
2017-18 |
2016-17 |
|
|
Revenue from Operation |
640.77 |
666.70 |
|
Profit before Interest & Depreciation |
37.68 |
61.03 |
|
Less: Interest/Finance Cost |
18.68 |
17.90 |
|
Profit before Depreciation & Amortisation |
19.00 |
43.13 |
|
Less: Depreciation& Amortisation |
18.40 |
22.59 |
|
Profit/(Loss) before Tax |
0.60 |
20.54 |
|
Less: |
||
|
a) Current Tax |
0.10 |
6.49 |
|
b) Mat credit entitlement |
(0.10) |
0.00 |
|
c) Deferred Tax |
0.18 |
0.46 |
|
d) Taxes for earlier (including MAT entitlement) |
(0.57) |
(0.25) |
|
Profit/(Loss) after Tax |
0.99 |
13.84 |
|
Add: Opening Balance Add: Other Comprehensive Income |
(28.87) 0.10 |
(42.40) (0.30) |
|
Balance at the end of the year |
(27.78) |
(28.87) |
Number of meetings of the Board
Particulars of the meetings held during the year along with details regarding the meetings attended by the directors form part of the Corporate Governance Report.
The composition of the Board and its committees has also been given in detail in the report on Corporate Governance.
Dividend
In view of the accumulated losses, your Directors do not propose any dividend for the financial year ended 31st March, 2018.
The carry forward losses are not yet fully set off in the year under review, your directors in compliance of the Companies Act 2013 and rule made thereunder do not recommend the payment of dividend on cumulative Redeemable Preference shares (CRPS) issued by the Company and the same has been already informed by the directors in their previous reports.
Your Company would be able to wipe out the carried over losses in coming years and shall be able to meet its obligations including arrears of dividend on CRPS.
Operations
Your Directors inform the members that during the year under review, the operations of the Company were affected due to several domestic as well as international developments. On the domestic front the new indirect Taxation system in the form of GST was implemented which led to temporary impasse in the sales due to uncertainty. Internationally also there was a slowdown in the global economic which led to decline in the margins of the Company.
The Company achieved a Turnover of Rs. 640.77 Crore for the year ended 31st March, 2018 against Rs. 666.70 Crore in the previous year ended 31st March, 2017. Further the operational profit of the Company stood at Rs. 37.68 Crore as against Rs. 61.03 Crore in the previous year.
The Net profit of the Company was recorded at Rs. 0.99 Crore against Rs. 13.83 Crore in the previous year.
During the period under review, your Company has been able to achieve production of 19093 MT of cotton yarn (18252 MT), 2433 MT of dyed yarn (2531MT), 4317 MT of grey knitted fabric (4542 MT), 4742 MT of processed fabric (5611 MT) and 39.46 Lakh pieces of garments (43.59 Lakh pieces), without any expansion in capacity.
The Yarn division of the Company despite increase in turnover and production reported lower profits. The Fabric division also recorded marginally lower volume due to market conditions. The garment segment continued to remain sluggish due to domestic and international market conditions.
Your Directors are optimistic about better economic condition in future and with the completion of the ongoing modernization programme, your Company would be able to improve its performance and profitability. The Company has initiated certain steps such as better product mix, cost rationalisation, and improving efficiency etc to enhance the performance. The Company is making all possible efforts to improve the margins.
Industry Scenario
The Textile Sector in India ranks next to Agriculture. Textile Industry is providing one of the most basic needs of people and the holds importance; maintaining sustained growth for improving quality of life. It has a unique position as a self-reliant industry, from the production of raw materials to the delivery of finished products, with substantial value-addition at each stage of processing; it is a major contribution to the countryâs economy Textile is one of Indiaâs oldest industries and has a formidable presence in the national economy. Indiaâs textile industry is also significant in a global context, ranking second to China in the production of both cotton yarn and fabric and fifth in the production of synthetic fibers and yarns. Textile industry plays a significant role in the economy. The Indian textile industry is one of the largest and most important sectors in the economy in terms of output, foreign exchange earnings and employment in India. The textile sector also has a direct link with the rural economy and performance of major fiber crops and crafts such as cotton, wool, silk, handicrafts and handlooms, which employ millions of farmers and crafts persons in rural and semi-urban areas. It has been estimated that one out of every six households in the country depends directly or indirectly on this sector. The Indian textiles industry, currently estimated at around US$ 108 billion, is expected to reach US$ 223 billion by 2021.
The CAI has estimated cotton crop for the 2017-18 season at 375.00 lakh bales of 170 kgs. each which is higher by 37.75 lakh bales compared to the previous yearâs crop of 337.25 lakh bales. The increase in crop estimated for the 2017-18 crop year is on account of the higher acreage under cotton than compared to the previous crop year. The acreage under cotton during 2017-18 is estimated to be more by about 19% than that of the previous season. The projected Balance Sheet drawn by the CAI estimates the total cotton supply for the cotton season 2017-18 at 422.00 lakh bales including the opening stock of 30 lakh bales at the beginning of the year and the imports which are estimated to be 17 lakh bales. The domestic consumption is estimated at 320 lakh bales while the exports are expected to be about 63 lakh bales.
The Government has taken various initiatives for the development of textile industry. The fund allocation for the labour-intensive textiles sector-which provides jobs to about 45 million people-in Union Budget 2018-19 increased 14.7 per cent to Rs. 7,148 crore over the previous year This is a welcome move and provides impetus for investment in the textile and apparel sector. The Indian government has come up with a number of export promotion policies for the textiles sector. The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand.
Modernization and Expansion
Your Directors in their previous report had informed the members that the approval of CDR EG for capex plan of Rs. 80 crore comprising of modernization of Spinning, yarn dyeing and processing and installation of Printing (Digital) and Fabric dyeing and Knitting, Spinning, Yarn Dyeing, Engineering and others Capex.
Your Directors feel Pleasure in informing the members that the above capex programmed had been initiated and shall be completed during the current financial year under review.
You directors are hopeful that with the implementation of the above programs, your company shall be able to realize the full benefits of value addition and shall be able to offer wide range of products. Further, your Director glad to inform you that in order to ensure effective working and seamless flow of information and improved the productivity, Company had updated its existing ERP system within the time frame.
Corporate Social Responsibility
Your Companyâs CSR initiative is not only based on the principle of obligation but a commitment as a socially responsible organization. Education is the backbone of every society in this world. Our endeavour is to spark the desire for learning and enlighten minds. Your Company undertakes to fulfill this object by way of providing quality education, initiatives to the poor and needy students, undertaking to impart vocational training, adult education programme and other related infrastructure etc.
In line with this commitment, the Company is continuing with its flagship project of providing education to girl child in the rural area nearby itâs factory location in the state of Madhya Pradesh by mobilizing and motivating non-school going girls from economically and socially backward and poor and weeks families. Your Company fulfils the dreams of underprivileged girl child who are living with the hope that someday someone would reach out to them to fulfil their dreams and aspirations. During the year, your Company continued to provide education to girl child through the medium of 30 learning centres.
The composition and terms of reference of the CSR Committee are given in the Corporate Governance Report.
The detail of the CSR spend by the Company is enclosed as Annexure - I forming part of this report.
Annual Return
Pursuant to section 92 of the Companies Act, 2013 read with Rule 12 of The Companies (Management and administration) Rules, 2014, the Annual Return is attached as Annexure - II.
Directors and Key Managerial Personnel
Your Directors inform the members that, Shri Ravi Jhunjhunwala, Director retire by rotation and being eligible offers himself for reappointment.
Your Directors further inform the members that pursuant to the provisions of Section 149(7) of the Companies Act, 2013 the declaration has been received from Independent Directors at the beginning of the financial year stating that they meet the criteria of independence as specified under sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges.
None of the Directors of the Company are disqualified as per the provisions of Section 164 of the Companies Act, 2013. The Directors have made necessary disclosures, as required under various provisions of the Companies Act, 2013.
Directorsâ Appointment and Remuneration Policy
Pursuant to the provision of Section 178 of the Companies Act, 2013 and Schedule II Part D, the role of the Nomination and Remuneration Committee, the Board of Directors on the recommendation of Nomination and Remuneration Committee has framed a policy for the appointment of Directors and Senior Management and their remuneration. The policy forms part of the Board Report as given in Annexure III.
Annual Evaluation by the Board
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, annual evaluation has been done by the Board of its own performance, its Committees and the individual Directors. The manner of evaluation is mentioned in the Nomination and Remuneration policy which forms part of Board Report.
Further, every Independent Director of the Company is familiarized with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc., through various programmes.
Particulars of Loans, Guarantees or Investments
Details of loans, Guarantees and Investments are given in the notes to the Financial Statements at appropriate places.
Particulars of Contracts or Arrangements with Related Parties
All contracts / arrangements / transaction entered into by the Company during the financial year with related parties are on armâs length basis and in the ordinary course of business. During the financial year, there was no material contract or arrangement entered into by the Company with any of the related party. Your Directors draw attention of the members to note 43 & 43.2 to the financial statement which contain particulars with respect to related parties. The policy on dealing with the Related Party Transactions as approved by the Board of Directors is disclosed on the website of the Company under the following link: http://maraloverseas.com/pdf/Policy on Related Party Transaction.pdf Further, prior omnibus approvals from the Audit Committee are obtained for the transactions which are repetitive and normal course in nature and in accordance with the Related Party Transaction policy. The disclosures are made to the Audit Committee and the Board of Directors on a quarterly basis.
Significant and Material Orders Passed by the Regulators or Courts.
There was no significant and material order passed by the regulators or courts during the year.
Auditors
Statutory Auditors
During the year under review M/s Doogar & Associates, Chartered Accountant (Firm Registration No. 000561N) and M/s Ashim & Associates, Chartered Accountant (Firm Registration No. 006064N) Joint Statutory Auditor of the Company retired at the conclusion of the 28th Annual General Meeting as they became ineligible for re-appointment pursuant to Section 139 of the Companies Act and rules made thereunder. M/s Doogar & Associates and M/s Ashim & Associates rendered their services over the years and your Board places on record its appreciation of their services as Joint Statutory Auditor of the Company.
M/s. S.S. Kothari Mehta & Co., Chartered Accountants, New Delhi (Firm Registration No. 000756N), and M/s. P. K. Deora & Co., Chartered Accountants, New Delhi (Firm Registration No. 004167N) were appointed as Joint Statutory Auditors of the Company at the 28th Annual General Meeting of the Company held on 22nd September, 2017 for a term of 5 years till the conclusion of 33rd AGM subject to ratification by members at every subsequent Annual General Meeting.
Your Directors inform the members that in accordance with the amendment notified by MCA on 7th May, 2018, the requirement of ratification of the appointment of Statutory Auditors at every Annual General Meeting has been omitted and is no longer required. Accordingly, the notice convening the ensuring Annual General Meeting does not carry resolutions with regard to ratification of appointment of Statutory Auditors. However, both the Statutory Auditors have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder.
However, The Statutory Auditors have confirmed their eligibility under section 141 of the Companies Act, 2013 and rules framed thereunder.
The observations of the Auditors, if any, are explained wherever necessary, in the appropriate notes to the accounts which are forms part of this Annual Report. The Auditorsâ Report does not contain qualification, reservation or adverse remark, disclaimer or emphasis of matter.
Internal Auditors
Pursuant to section 138 of the Companies Act, 2013 read with The Companies (Accounts) Rules, 2014, the Company has appointed M/s BGJC & Associates, Chartered Accountants (LLP) and M/s. Sarat Jain & Co. as the Internal Auditors of the Company.
The role of internal auditors includes but not limited to review of internal audit observations and monitoring of implementation of corrective actions required, reviewing of various policies and ensure its proper implementation, reviewing of SOPs and there amendments if any.
Secretarial Auditor
Pursuant to Section 204 of the Companies Act, 2013 read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. SGS Associates, Company Secretaries a practicing secretaries firm as the Secretarial Auditor of the Company for the year ending 31st March, 2018.
The Secretarial Audit Report does not contain qualification, reservation or adverse remark.
The Report of Secretarial Audit is annexed as Annexure - IV.
Cost Auditor
Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, textile Companies are required to get their cost records audited. In this connection, the Board of Directors of the Company on the commendation of Audit Committee had approved the appointment of M/s K. G. Goyal & Co. as the Cost Auditor of the Company for the year ending 31st March, 2018. The remuneration paid to the cost auditor is required to be ratified by the shareholders.
Risk Management
The Company has identified various risks associated with the business. The Company has adopted a risk management policy which acts as an effective tool in mitigating the various risks to which the businesses are exposed. The risk management policies cover areas such as Environment, Health & Safety, Statutory Compliances and Returns, Energy, On Time Performance, Quality, Commodity Pricing, Outsourcing, Budgeting and Planning, Government Policies etc. The risks identified by the business are systematically addressed to the Board through mitigating actions on a continuous basis. Further, the policy aims at creating and protecting shareholders value by minimizing threats and weaknesses and identifying and maximizing opportunities. Pursuant to the policy, your Directors periodically review the risks associated with the business or which threaten the prospects of the Company.
Corporate Governance
Good Corporate Governance is more of a priority than a mere legal obligation. It involves the commitment to run the business in most ethical and transparent manner. It helps to build the confidence of the investors and to establish healthy relationship with all the stakeholders. Apart from the mandatory practice, the Company adopts various voluntary practices to ensure transparency and accountability at highest level. The Companyâs vision of achieving its objectives is in line with its consideration for environment, safety and people.
Report on Corporate Governance along with the Certificate of Auditors, M/s. S.S. Kothari Mehta & Co. and M/s. P. K. Deora & Co., Chartered Accountants, confirming compliance of conditions of Corporate Governance as stipulated under Point E of Schedule V of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, forms part of the Annual Report.
Whistle Blower Policy
The Company, in order to provide mechanism to disclose any unethical and improper practices or any other alleged wrongful conduct or matter of concern in area of accounts, finance, management, operations, employment or any other misconduct in the Company had laid down a Vigil Mechanism also known as Whistle Blower Policy to deal with the instance of fraud and mismanagement, if any.
The Company had appointed the nodal officer to whom the complaints can be made. In exceptional cases an opportunity is provided to the Whistle Blower to make a direct appeal to the Chairman of the Audit Committee.
The policy safeguards the whistle Blower from being victimized. The policy has been disclosed on the website of the Company, the link of which is given hereunder: http://www.maraloverseas.com/pdf/Whistle Blower Policy.pdf Management Discussion and Analysis Report
Management Discussion and Analysis Report, as required by Schedule V of Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations), 2015, forms part of the Annual Report. Internal Control Systems
The Company has well placed internal control system which ensures proper safeguard of all assets prevention and detection of frauds and errors and that all the transactions are recorded and reported correctly.
The Audit committee quarterly reviews the Executive summary on the internal audit findings along with the recommendations and management comments. Further, the Action Taken Report/ Compliances as discussed in the previous meeting is placed in the next meeting along with the detailed report. The Internal Auditors also ensure proper compliance of all policies and Standard Operating Procedures (SOPs) adopted by the Company. Internal Auditors report directly to the Audit Committee of the Board.
The Companyâs internal control systems comprise of audit and compliance by in-house staff supplemented by internal audit checks by the Internal Auditors.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
The information required to be disclosed pursuant to Section 134(3) (m) of the Companies Act, 2013 read with the Rules, 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure - V forming part of this Report.
Particulars of Employees
The information pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the relevant statement is annexed as Annexure - VI.
Further, disclosures pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the statement showing the name along with the particulars of top ten employees along with the employees drawing remuneration in excess of the limits is annexed as Annexure - VII.
Significant Material Changes after Balance Sheet Date Affecting Financial Position
There are no change and commitments which affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate i e 31.03.2018 and the date of report 9th May, 2018.
Subsidiaries, Joint Ventures and Associates Companies
The Company does not have any Joint Ventures, Subsidiaries and Associates Companies.
Public Deposit
Your Company has not accepted any public deposit within the meaning of provisions of section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 and there is no outstanding deposit due for re-payment.
Directorsâ Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors state that:
a. in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;
b. appropriate Accounting Policies have been applied consistently and they have 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 on 31st March, 2017 and of the Profit and Loss of the Company for the year ended on that date;
c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities;
d. the Annual Accounts have been prepared on a going concern basis.
e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.
f. that system to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
Indian Accounting Standards (IND AS)
The Company has followed the guidelines of Accounting Standards/ IND-AS laid down by the Institute of Chartered Accountant of India in preparation of Financial Statement.
General
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the financial year under review:
i. Issue of equity shares with differential rights as to dividend, voting or otherwise.
ii. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.
iii. No amount has been transferred to General Reserves during the year.
iv. There is no change in the nature of business of the Company.
v. During the year there is no complaint(s) received under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 under review.
vi. There were no frauds found which have been reported to the Audit Committee / Board members as well as to the Central Government.
Cautionary Statement
The statements contained in the Boardâs Report and Management Discussion and Analysis contain certain statements relating to the future and therefore are forward looking within the meaning of applicable securities, laws and regulations. Various factors such as economic conditions, changes in government regulations, tax regime, other statues, market forces and other associated and incidental factors may however lead to variation in actual results.
Acknowledgements
Your Directors place on record their acknowledgement and sincere appreciation to all our clients, customers, vendors, dealers, bankers, investors, other business associates, Central and State Government for their continued support and encouragement during the year and their confidence towards the management. Your Directors would also like to thank employees at all levels for their hard work, dedication and commitment.
For and on behalf of the Board
Ravi Jhunjhunwala
Noida (U.P) Chairman
09th May, 2018 DIN -00060972
Mar 31, 2016
The Board of Directors hereby present the Twenty Seventh Annual Report on the business and operations of your Company along with the summary of the financial statements for the year ended 31st March, 2016.
Financial Results (Rs. in crore)
|
|
31.03.16 Current Year |
31.03.15 Previous Year |
|
Turnover |
618.83 |
648.43 |
|
Profit/(Loss) before Tax |
13.60 |
17.57 |
|
Less: Taxation |
3.39 |
0.87 |
|
Profit / (Loss) after Tax |
10.21 |
16.70 |
|
Add: Balance brought forward from |
(49.75) |
(64.11) |
|
previous year |
|
|
|
|
(39.54) |
(47.41) |
|
Appropriations: |
||
|
Contribution to CSR |
* |
0.10 |
|
Proposed Dividend on Preference Shares |
- |
1.87 |
|
Tax on Proposed Dividend |
- |
0.37 |
|
Balance carried to Balance Sheet |
(39.54) |
(49.75) |
*For financial Year 2015-16, expenditure on CSR of Rs. 48.31 lakh, has been charged to the Statement of Profit and Loss (Refer note 2.7.7(b) of notes to the Financial Statements).
Number of meetings of the Board
Particulars of the meetings held during the year along with the details regarding the meetings attended by the directors form part of the Corporate Governance Report.
The composition of the Board and its committees has also been given in detail in the report on Corporate Governance.
Dividend
Your Directors in their meeting held on 10th May, 2016, had recommend to the members, a preference dividend @ 8% p.a. i.e. Rs. 8/- per share on 18,85,400 Cumulative Redeemable Preference Shares (CRPS) of Rs.100/- each issued to various Banks/ Institutions upon conversion of part of their term loans as per the CDR package subject to obtaining approval under Section 462/470 of the Companies Act, 2013.
As the request to the Central Government seeking relief from the fourth proviso of Section 123(1) of the Companies Act, 2013 has not been accepted, your Directors withdraw the earlier recommendation for payment of dividend on 8% CRPS and now do not propose recommending any dividend for the financial year ended 31st March, 2016. Accordingly, the Company will make payment of dividend on all outstanding CRPS on cumulative basis once the carried over previous losses are fully set off.
Your Directors further inform that pursuant to the letter of approval issued by the CDR cell and in terms of subsequent MRA, the 18,85,400 8% Cumulative Redeemable Preference Shares (CRPS) of Rs.100 each issued on 30.09.2009 to various banks and institutions were to be redeemed in four equal annual tranches of 471350 each beginning from 31st March, 2016. Accordingly, 471350 CRPS of Rs.100 each were redeemed on 31st March, 2016. However, the dividend on the same be paid along with the remaining 8% 1414050 CRPS once the carried over previous losses are fully set off.
Operations
During the year under review, the Company has recorded satisfactorily performance keeping in view the difficult market conditions.
The Company achieved a Turnover of Rs.618.83 crore for the year ended the 31st March, 2016 against Rs.648.43 crore in the previous year, ended the 31st March, 2015. The Company achieved a net profit of Rs.10.21 crore against Rs.16.70 crore in the previous year.
During the period under review, your Company has been able to achieve production of 18596 MT of cotton yarn (17877 MT), 2402 MT of dyed yarn (1526 MT), 3726 MT of grey knitted fabric (3625 MT), 4807 MT of processed fabric (4804 MT) and 31.21 lakh pieces of garments (49.42 lakh pieces), without any expansion in capacity.
During the period under review, the garment market has been sluggish due to less orders from Europe because of global slow down/lower retail sale and less demand from Middle East due to low oil prices. However, the Company had been able to develop new customers and market to overcome the situation.
Industry Scenario
Indian textiles industry is extremely varied, with the hand-spun and hand-woven textiles sectors at the one end of the spectrum, while the capital intensive sophisticated mills sector at the other end of the spectrum. The close linkage of the textile industry to agriculture (for raw materials such as cotton) and the ancient culture and traditions of the country in terms of textiles make the Indian textiles sector unique in comparison to the industries of the other countries.
In 2016-1 7 world cotton production is projected to increase by 4% to just under 23 million tons, as the world average yield is anticipated to improve by 4%. Moreover, during 2016-17, India''s area under cotton cultivation is forecast to go up 4% to 12.4 million hectares. After, declining by 3% in 2015-16, world cotton is expected to recover by 1% to 7.5 million tons as consumption grows in import dependent countries like Vietnam and Bangladesh. During the financial year, the cotton textile segment is likely to remain stable with the growth in the cotton production and consumption.
The future of textile industry looks promising, buoyed by strong domestic consumption as well as export demand. According to Vision, strategy and action plan for Indian Textile and Apparel sector, several State Governments, considering the potential of the textile and apparel industry, have come out with their own textile policies tailored to attract investment in specific sub-segments and specific area within the State.
Modernization and Expansion
Your Directors, in their previous report, informed the members about the approval of a capital expenditure of Rs.16 crore which involved reduction in the cost of power generation, utilization of full Dye House capacity, modernization of the spinning unit and increase in capacity of Garment unit. Further, the Directors have pleasure in informing the members, about the recent modernization plan for conversion of one unit to polyester blended yarn from 100% cotton yarn along with other blends.
Your Directors have approved a capital expenditure for replacing old machines, improving waste collection system, zero liquid discharge system for effluent treatment etc. amounting Rs.80.00 crore.
No material changes and commitments have occurred between the end of the financial year till the date of the report, which will affect the financial position of the Company.
Corporate Social Responsibility
Your Company observe Corporate Social Responsibility not as an obligation but as a commitment to society. The welfare of the society is very essential for the growth of the Country as a whole. Your Company has focused on education of the girl child as it is rightly said that "educating a women is equivalent to educating the whole family" as also our Prime Ministers slogan of "Beti Baccho Beti Padao".
During the financial year 2014-15, the Company had started with the 20 learning centres. Encouraged, with the response, the Company during the financial year 2015-16, has set up 10 additional learning centres. The dedication of your Company in this front had not only brought smiles to them and their families but also shows the commitment towards the society especially in the rural backward areas.
Further, the Company during the financial year 2015-16 has added certain facilities i.e. setting up of water filtration and treatment plant, construction of class rooms, basket ball courts, repairing of building etc to Vivekanand Vidya Vihar school. These facilities will help students to also engage themselves in extracurricular activities which ultimately will help them to show their hidden talents.
The detail of the CSR spend by the Company is enclosed as Annexure - I forming part of this report.
Annual Return
Pursuant to Section 92 of the Companies Act, 2013 read with Rule 12 of The Companies (Management and administration) Rules, 2014, the Annual Return is attached as Annexure - II.
Directors and Key Managerial Personnel
During the period under review, Smt. Geeta Mathur had resigned w.e.f 29th July, 2015. The Board places on record its deep appreciation for the service rendered by Smt Geeta Mathur during her tenure.
Your Directors further inform the members that, during the year under review Smt. Archana Capoor was appointed as an Additional Director in the category of Independent Director w.e.f. 6th November, 2015. Smt. Archana Capoor brings with her vast experience in the field of Finance and Market Research.
Your Directors take this opportunity to welcome Smt. Archana Capoor on the Board of Directors. The proposal for confirmation of her appointment as an Additional Director as well as an Independent Director for a term of 5 years shall be put up before the ensuing Annual General Meeting.
Shri Ravi Jhunjhunwala, Director retires by rotation and being eligible offers himself for re-appointment.
Your Directors further inform the members that declaration has been taken from the Independent Directors at the beginning of the financial year stating that they meet the criteria of independence as specified under sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Your Directors further inform the members that Shri Shekhar Agarwal was re-appointed as Managing Director of the Company for a period of three years with effect from 1st April, 2016, subject to the approval of the members of the Company.
Directors'' Appointment and Remuneration Policy
Pursuant to the provision of Section 178 of the Companies Act, 2013 and Schedule II Part D, of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors on the recommendation of Nomination and Remuneration Committee has framed a policy for the appointment of Directors and Senior Management and their remuneration. The policy forms part of the Board Report as given in Annexure III.
Annual Evaluation by the Board
Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, annual evaluation has been done by the Board of its own performance, its Committees and the individual Directors. The manner of evaluation is mentioned in the Nomination and Remuneration policy which forms part of Board Report.
Further, every independent director of the Company is familiarized with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc., through various programmes.
Particulars of Loans, Guarantees or Investments
Details of Loans, Guarantees and Investments are given in the notes to the Financial Statements at appropriate places.
Particulars of Contracts or Arrangements with Related Parties
All contracts / arrangements / transaction entered into by the Company during the financial year with the related parties are on arm''s length basis and in the ordinary course of business. During the financial year, there was no material contract or arrangements entered into by the Company with any of the related party. Your Directors draw attention of the members to note 2.8.8 to the financial statement which contain particulars with respect to related parties. The policy on dealing with the Related Party Transactions as approved by the Board of Directors is disclosed on the website of the Company under the following link:
http://maraloverseas.com/pdf/policy_on_related_party_transaction.pdf
Significant and Material Orders Passed by the Regulators or Courts
There was no significant and material order passed by the regulators or courts during the year.
Auditors Appointment
Statutory Auditors
The Company''s Auditors M/s. Doogar & Associates (Firm Reg. No. 000561N) and M/s. Ashim & Associates (Firm Reg. No. 006064N), who retires at the conclusion of the ensuing Annual General Meeting, are eligible for re-appointment. Further, they have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed there under.
The observations of the Auditors, if any, are explained wherever necessary, in the appropriate notes to the accounts. The Auditors'' Report does not contain qualification, reservation or adverse remark.
Internal Auditors
Pursuant to Section 138 of the Companies Act, 2013 read with The Companies (Accounts) Rules, 2014, the Company has appointed M/s. P. K. Deora & Co., Chartered Accountants (Firm Reg. No. 004167N) and M/s. KRA & Associates, Chartered Accountants (Firm Reg. No. 002352N) as the internal auditors of the Company.
The role of internal auditors includes but not limited to review of internal audit observations and monitoring of implementation of corrective actions required, reviewing of various policies and ensure its proper implementation, reviewing of SOPs and there amendments, if any.
Secretarial Auditor
Pursuant to Section 204 of the Companies Act, 2013 read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Shri D. P. Gupta, Practicing Company Secretary holding Membership No. FCS 2411 and also holding Certificate of Practice No. 1509 proprietor of M/s SGS, Companies Secretaries, Delhi as the Secretarial Auditor of the Company. The Secretarial Audit Report does not contain qualification, reservation or adverse remark.
The Report of Secretarial Audit is annexed as Annexure IV.
Cost Auditor
Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules, 2014 and Notification issued by Ministry of Corporate Affairs dated 31st December, 2014, textile Companies are required to get their cost records audited from the financial year commencing on or after 1st day of April, 2015. In this connection, the Board of Directors of the Company had approved the appointment of M/s K. G. Goyal & Co. (Firm Reg. No. 000017) as the Cost Auditor of the Company for the financial year 2016-17.
Risk Management Policy
The Company has adopted a risk management policy which acts as an effective tool in mitigating the various financial risks to which the business are exposed. The risk management policies covers areas such as Environment, Health & Safety, Energy, On Time Performance, Quality, Commodity Pricing, Outsourcing, Budget and Planning, Government Policies etc. Further, the policy aimed at creating and protecting shareholders value by minimizing threats and weaknesses and identifying and maximizing opportunities. Pursuant to the policy, your Directors periodically review the risks associated with the business or which threaten the prospects of the Company.
Corporate Governance
Good Corporate Governance is the core of our decision making and control processes and ensures interest of our stakeholders and employees. The Company considers its inherent responsibility to maintain total transparency regarding financial performance and in all decisions and risk management systems. The Company''s vision of achieving its objectives is in line with its consideration for environment, safety and people.
Report on Corporate Governance along with the Certificate of Auditors, M/s. Doogar & Associates (Firm Reg. No. 000561N) and M/s. Ashim & Associates, (Firm Reg. No. 006064N) Chartered Accountants, confirming compliance of conditions of Corporate Governance as stipulated under Point E of Schedule V of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, forms part of the Annual Report.
Whistle Blower Policy
The Company has a Whistle Blower Policy to report concerns. Under this policy, provision has been made to safeguard persons who use this mechanism for victimization, unethical behavior, actual or suspected fraud or violation of Company''s Code Of Conduct or unfair trade practices. The Company had appointed the nodal officer to whom the complaints can be made. In exceptional cases an opportunity is provided to the Whistle Blower to make a direct appeal to the Chairman of the Audit Committee.
The Company has adopted a framework whereby the identity of the complainant is not disclosed. The policy has been disclosed on the website of the Company, the link of which is given hereunder:
http://www.maraloverseas.com/pdf/Whistle_Blower_Policy.pdf
Management Discussion and Analysis Report
Management Discussion and Analysis Report, as required by Schedule V of Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations), 2015, forms part of the Annual Report.
Internal Control Systems
The Company maintain an internal control system designed to provide assurance regarding safeguarding of assets of the company, compliance of all applicable laws and regulations and ensuing effectiveness of operations. The annual business plan is presented to the Audit Committee at the beginning of every financial year and regular updates are presented on a quarterly basis to the Committee. The Audit committee quarterly reviews the Executive summary on the internal audit findings along with the recommendations and management comments. Further, the Action Taken Report/ Compliances as discussed in the previous meeting is placed in the next meeting along with the detailed report.
The Company''s internal audit works independently and is responsible for evaluating and improving the effectiveness of risk management, governance and control processes and ensure management information system accuracy for Company.
The Company''s internal control systems comprise of audit and compliance by in-house staff supplemented by internal audit checks by the internal auditors.
The internal auditors independently evaluate the adequacy of internal controls and periodically audit the majority of the transactions in value terms. Internal Auditors report directly to the Audit Committee of the Board.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
The information required to be disclosed pursuant to Section 134(3) (m) of the Companies Act, 2013 read with the Rules, 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure - V forming part of this Report.
Particulars of Employees
The information pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the name along with the particulars drawing remuneration in excess of the limits of the employees is annexed as Annexure - VI
Further, disclosures pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the relevant statement is annexed as Annexure - VII.
Directors'' Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors state that:
- in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same;
- appropriate Accounting Policies have been selected and applied consistently and they have 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 on 31st March, 2016 and of the Profit and Loss of the Company for the year ended on that date;
- proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
- the Annual Accounts have been prepared on a going concern basis.
- that proper internal financial controls were in place and that the internal financial controls were adequate and were operating effectively.
- that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
Acknowledgements
Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. We would like to thank all our clients, customers, vendors, dealers, bankers, investors, other business associates, Central and State Government for their continued support and encouragement during the year and their confidence towards the management.
For and on behalf of the Board
Ravi Jhunjhunwala
Noida (U.P) Chairman
3rd August, 2016 DIN -00060972
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting the Twenty Sixth Annual
Report of the Company and the audited financial statements for the year
ended the 31st March, 2015.
Financial Results (Rs.in crore)
31.03.15 31.03.14
Current Previous
Year Year
Turnover 648.42 653.32
Profit/(Loss) before Tax 17.56 31.15
Less: Taxation 0.87 1.68
Profit / (Loss) after Tax 16.69 29.47
Add: Balance brought forward from (64.10) (91.39)
previous year
<47.41- <61.92-
Appropriations:
Contribution to CSR 0.10 -
Proposed Dividend on Preference Shares 1.87 1.87
Tax on Proposed Dividend 0.37 0.32
Balance carried to Balance Sheet (49.75) (64.11)
Number of meetings of the Board
Particulars of the meetings held during the year along with the details
regarding the meetings attended by the directors form part of the
Corporate Governance Report.
The composition of the Board and its committees has also been given in
detail in the report on Corporate Governance.
Dividend
Your Directors recommend to the members, a preference dividend @ 8%
p.a. i.e. Rs. 8/- per share on 18,85,400 Cumulative Redeemable Preference
Shares (CRPS) of Rs. 100/- each issued to various Banks/ Institutions and
@ 3% p.a. i.e. Rs. 3/- per share on 12,00,000 Cumulative Redeemable
Preference Shares (CRPS) of Rs. 100/- each issued to persons forming part
of promoter and promoter group as per the CDR package.
The aforesaid dividend on CRPS will absorb Rs. 224.19 lac (inclusive of
distribution tax). A proposal for confirmation of the dividend on CRPS
will be placed before the shareholders at the ensuing Annual General
Meeting.
In view of carried forward losses, no dividend is recommended on Equity
Shares.
Operations
Your Directors feel pleasure in informing the members that as a result
of various improvement measures undertaken by the management in the
past few years, your Company, during the year under review, recorded
satisfactory turnover and profitability.
The Company achieved a Turnover of Rs. 648.42 crores for the year ended
the 31st March, 2015 against Rs. 653.35 crores in the previous year,
ended the 31st March, 2014. The Company achieved a net profit of Rs.
16.69 crores against Rs. 29.47 crores in the previous year.
During the period under review, your Company has been able to achieve
production of 17877 MT of cotton yarn (17332 MT), 1526 MT of dyed yarn
(1406 MT), 3625 MT of grey knitted fabric (3692 MT), 4804 MT of
processed fabric (4737 MT) and 49.42 lac pieces of garments (53.35 lac
pieces), without any expansion in capacity.
Industry Scenario
India''s textiles and clothing industry is one of the mainstays of the
national economy. It is also one of the important sectors in India''s
exports contributing nearly 13.25% to the country''s total exports
basket. The textiles industry is labour intensive and is one of the
largest employers, employing nearly 35 million people.
Government of India has taken various initiatives for the development
of the textiles sector i.e 13 new textiles parks were approved which is
estimated to bring in private sector investment of about Rs. 3240 crore
and generate direct employment for about 35,000 persons over the next
three years. Further, with a vision to create friendly economy the
government introduced several initiatives i.e. duty free entitlement to
garment exporters, 24/7 customs clearance facility resulting in faster
clearance of import and export cargo etc.
Over the past few years, India has achieved significant growth in
cotton production. About a decade ago, India was barely self sufficient
to meet its requirement of cotton from domestic production but is now
poised to overtake China to become the world''s biggest producer of
cotton this year. During 2014-15, the area under cotton cultivation in
India has furthered increased to a record level of 125 lakh hectares.
India Cotton Federation (IFC) estimates a record harvest of 40 million
bales during 2014-15, a growth of about 8% over 37.5 million bales in
2013-14.
Modernization and Expansion
Your Directors, in their previous report, informed the members about
modernization plan to replace some equipment which were very old. Your
Directors have pleasure in informing the members, that a modernization
& expansion plan involving a capex of Rs. 40 crore has been completed
during the year under review. This will result in improvement in
quality and productivity leading to higher profitability.
Your Directors, in order to reduce the cost of power generation have
approved the project for a 33 KVA Dedicated Feeder line for the supply
of power directly from the Grid which involves a total cost of Rs. 103
lac. Further, in order to utilize the full Dye House capacity, your
Directors have agreed to purchase additional knitting machines
involving a total outlay of Rs. 571 lac. The purchase of additional
machines will reduce overall production costs.
Your Directors feel pleasure in informing you that the Company has
embarked upon a further modernization of the spinning unit and increase
in capacity of Garment unit involving a capital outlay of Rs. 470 lac for
Spinning Unit and Rs. 460 lac for Garment Unit to be funded through
internal accruals and loans.
No material changes and commitments have occurred between the end of
the financial year till the date of the report, which in turn affect
the financial position of the Company.
Corporate Social Responsibility
Corporate Social Responsibility (CSR) is core to our business. Your
Company always strived to achieve a balance between environment, social
imperatives and the expectations of our stakeholders. It is a
continuous journey wherein due importance is given to education
especially to the girl child, creating a healthy environment, creating
new opportunities and maintaining ethical business standard.
With the Corporate Social Responsibility now becoming a statutory
obligation, your Directors had during the year under review, formally
constituted a Corporate Social Responsibility Committee comprising of
Shri P. S. Dasgupta, Shri Shekhar Agarwal and Shri Shantanu Agarwal.
Your Directors, upon recommendation of the CSR Committee, adopted CSR
Policy during the year and initiated its implementation.
During the year the Company has identified the activity concerning the
promotion of education with special focus on girl child education.
Further, the Company is in the process of enlarging the scope of CSR
activities and other activities to be undertaken.
The detail of the CSR spend by the Company is enclosed as Annexure - I
forming part of this report.
Annual Return
Pursuant to Section 92 of the Companies Act, 2013, read with Rule 12 of
The Companies (Management and administration) Rules, 2014, the Annual
Return is attached as Annexure - II.
Directors and Key Managerial Personnel
Your Directors in their previous report informed the members about the
resignation of Shri L.N. Jhunjhunwala, Chairman-Emeritus and the
founder of the Company as well as the Group from the directorship of
the Company. Your Directors had also informed the members that Shri
L.N. Jhunjhunwala upon the unanimous request of the Board of Directors
had agreed to continue as Chairman -Emeritus. Your Directors are
thankful to Shri L.N. Jhunjhunwala for his continuous guidance to them
and the Company.
As informed to the members in the previous report by your Directors,
Dr. Kamal Gupta, Shri D.N. Davar and Shri P. S. Dasgupta, Independent
Directors were appointed for a term of 5 years by the Shareholders at
the last Annual General Meeting held on the 26th September, 2014.
Your Directors further inform the members that, during the year under
review, Shri Shantanu Agarwal was appointed as a director of the
Company. Smt. Geeta Mathur was appointed as an Additional Director in
the category of Independent Director. Smt. Geeta Mathur brings with her
vast experience in the field of Banking and Finance.
Your Directors take this opportunity to welcome Shri Shantanu Agarwal
and Smt. Geeta Mathur on the Board of Directors. The proposal for
confirmation of appointment of Smt. Geeta Mathur as an Additional
Director as well as an Independent Director for a term of 5 years shall
be put up before the ensuing Annual General Meeting.
Shri Shantanu Agarwal, Director retires by rotation and being eligible
offers himself for reappointment.
Your Directors further inform the members that declaration has been
taken from the independent directors at the beginning of the financial
year stating that they meet the criteria of independence as specified
under sub-section (6) of Section 149 of the Companies Act, 2013 and
Clause 49 of the Listing Agreement with the Stock Exchanges.
During the year, Shri Shekhar Agarwal, Managing Director & CEO of the
Company, Ms. Sweta Garg, Company Secretary of the Company and Shri P.
S. Puri, Chief Financial Officer of the Company were designated as Key
Managerial Personnel.
Directors'' Appointment and Remuneration Policy
Pursuant to the provision of Section 178 of the Companies Act, 2013 and
Clause 49 of the Listing Agreement, the Board of Directors on the
recommendation of Nomination and Remuneration Committee has framed a
policy for the appointment of Directors and Senior Management and their
remuneration. The policy forms part of the Board Report and is annexed
as Annexure - III.
Annual Evaluation by the Board
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing agreement, annual evaluation has been done by the Board of
its own performance, its Committees and the individual Directors. The
manner of evaluation is mentioned in the Nomination and Remuneration
policy forming part of this Report.
Further, every independent director of the Company is familiarized with
the Company, their roles, rights, responsibilities in the Company,
nature of the industry in which the Company operates, business model of
the Company, etc., through various programmes.
Particulars of Loans, Guarantees or Investments
Details of loans, Guarantees and Investments are given in the notes to
the Financial Statements at appropriate places.
Particulars of Contracts or Arrangements with Related Parties
All contracts / arrangements / transaction entered into by the Company
during the financial year with the related parties are on arm''s length
basis and in the ordinary course of business. During the financial
year, there was no material contract or arrangements entered into by
the Company with any of the related party. Your Directors draw
attention of the members to Note 2.8.8 to the financial statement which
contain particulars with respect to related parties. The policy on
dealing with the Related Party Transactions as approved by the Board of
Directors is disclosed on the website of the Company under the
following link:
http://maraloverseas.com/pdf/Policy_on_Related_Party_Transaction.
pdf
Significant and Material Orders Passed by The Regulators or Courts
There are no significant and material orders passed by the regulators
or courts.
Auditors Appointment Statutory Auditors
The Company''s Auditors M/s. Doogar & Associates (Firm Reg. No.
000561N) and M/s. Ashim & Associates (Firm Reg. No. 006064N), who
retire at the conclusion of the ensuing Annual General Meeting, are
eligible for re-appointment. Further, they have confirmed their
eligibility under Section 141 of the Companies Act, 2013 and the Rules
framed thereunder.
The observations of the Auditors, if any, are explained wherever
necessary, in the appropriate notes to the accounts. The Auditors''
Report does not contain qualification, reservation or adverse remark.
Internal Auditors
Pursuant to Section 138 of the Companies Act, 2013 read with The
Companies (Accounts) Rules, 2014, the Company has appointed M/s. P.K.
Deora & Co., Chartered Accountants (Firm Reg. No. 004167N) and M/s. KRA
& Associates, Chartered Accountants (Firm Reg. No. 002352N) as the
internal auditors of the Company.
Secretarial Auditor
Pursuant to Section 204 of the Companies Act, 2013 read with The
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, the Company has appointed Shri D.P. Gupta, Practicing Company
Secretary holding Membership No. FCS 2411 and Certificate of Practice
No. 1509 proprietor of M/s SGS, Company Secretaries, Delhi, as the
Secretarial Auditor of the Company. The Secretarial Audit Report does
not contain qualification, reservation or adverse remark.
The Report of Secretarial Audit is annexed as Annexure - IV.
Cost Auditor
Pursuant to Section 148 of the Companies Act, 2013 read with The
Companies (Cost Records and Audit) Rules, 2014 and Notification issued
by Ministry of Corporate Affairs dated 31st December, 2014, textile
Companies were required to get their cost records audited from the
financial year commencing on or after 1st day of April, 2015. The
Company has appointed M/s K. G. Goyal & Co. (Firm Reg. No. 000017) as
the cost auditor of the Company for the Financial Year 2015-16.
Risk Management Policy
The Company has adopted a risk management policy which aims at creating
and protecting shareholders'' value by minimizing threats and weaknesses
and identifying and maximizing opportunities. Pursuant to the policy,
your Directors periodically review the risks associated with the
business or threaten the prospects of the Company.
Corporate Governance
The Company has been practicing good Corporate Governance over a period
of time and lays emphasis on transparency, accountability and
integrity. Company conforms to the code of corporate governance as
stipulated under the Listing Agreement which is also published on the
website of the Company.
Report on Corporate Governance along with the Certificate of Auditors,
M/s. Doogar & Associates (Firm Reg. No. 000561N) and M/s. Ashim &
Associates, (Firm Reg. No. 006064N) Chartered Accountants, confirming
compliance of conditions of Corporate Governance as stipulated under
Clause 49 of the Listing Agreement, forms part of the Annual Report.
Whistle Blower Policy
With the objective of pursuing the business in a fair and transparent
manner by adopting the highest standards of professionalism, honesty,
integrity and ethical behavior and to encourage and protect the
employees who wish to raise and report their genuine concerns about any
unethical behavior, actual or suspected fraud or violation of Company''s
Code of Conduct, the Company has adopted a Whistle Blower Policy. The
Company has adopted a framework whereby the identity of the complainant
is not disclosed. The policy has been disclosed on the website of the
Company, the link of which is given hereunder:
http://www.maraloverseas.com/pdf/Whistle Blower Policy.pdf Management
Discussion and Analysis Report
Management Discussion and Analysis Report, as required by clause 49 of
Listing Agreement, forms part of the Annual Report.
Internal Control Systems
The Audit Committee, in consultation with the Board, is responsible for
establishing and maintaining adequate internal control systems in the
operations of the Company to ensure that the information, which is
provided to the management, is timely and reliable. The controls have
been designed to provide a reasonable assurance of maintaining proper
accounting controls for ensuring reliability of financial reporting,
protecting assets from unauthorized use or losses, compliances with
statutory regulations. The Company has continued its efforts to align
all its processes and controls with global best practices. These
systems ensure that transactions are executed in accordance with
specified policies and resources are deployed prudently as per the
business plan.
The annual business plan is presented to the Audit Committee at the
beginning of every financial year and regular updates are presented on
a quarterly basis to the Committee and the Board. The Action Taken
Report of the previous meeting is presented in the ensuing meeting and
members are regularly updated about the actions taken.
The Company''s internal control systems comprise of compliance by
in-house staff supplemented by internal audit checks by the internal
auditors.
The internal auditors independently evaluate the adequacy of internal
controls and periodically audit the majority of the transactions in
value terms. Internal Auditors report directly to the Audit Committee
of the Board.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
The information required to be disclosed pursuant to Section 134(3) (m)
of the Companies Act, 2013 read with the Rules, 8(3) of the Companies
(Accounts) Rules, 2014 is given in Annexure - V forming part of this
Report.
Particulars of Employees
The information pursuant to Section 197 read with Rule 5 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, a statement showing the name along with the particulars drawing
remuneration in excess of the limits of the employees is annexed as
Annexure - VI.
Further, disclosures pursuant to Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
relevant statement is annexed as Annexure - VII.
Directors'' Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors
state that:
- in the preparation of the Annual Accounts, the applicable Accounting
Standards have been followed and no material departures have been made
from the same;
- appropriate Accounting Policies have been selected and applied
consistently and they have 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 on 31st March, 2015 and of the Profit and
Loss of the Company for the year ended on that date;
- proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- the Annual Accounts have been prepared on a going concern basis.
- that proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively.
- that systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
Acknowledgements
Your Directors place on record the diligent efforts made by the
employees at all levels in discharging their responsibilities. We would
like to thank all our clients, vendors, bankers, other business
associates, Central and State Government for their continued support
and encouragement during the year and their confidence towards the
management.
The directors also thank the investors for their continued faith in the
Company.
For and on behalf of the Board
Ravi Jhunjhunwala
Noida (U.P) Chairman
5th May, 2015 DIN -00060972
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the Twenty Fifth Annual
Report of the Company and the audited financial statements for the year
ended the 31st March, 2014.
Financial Results
(Rs. in Crore)
31.03.14 31.03.13
Current Previous
Year Year
Turnover 653.32 558.90
Profit/(Loss) from operations 31.15 24.18
Less: Taxation 1.69 -
Profit / (Loss) after Tax 29.46 24.18
Add: Balance brought forward from (91.39) (112.96)
previous year
(61.93) (88.78)
Appropriations:
Proposed Dividend on Preference Shares 1.87 2.23
Tax on Proposed Dividend 0.32 0.38
Balance carried to Balance Sheet (64.12) (91.39)
Dividend
Your Directors recommend to the members, a preference dividend @ 8%
p.a. i.e. Rs. 8/- per share on 18,85,400 Cumulative Redeemable
Preference Shares (CRPS) of Rs. 100/- each issued to various Banks/
Institutions and @ 3% p.a. i.e. Rs. 3/- per share on 12,00,000
Cumulative Redeemable Preference Shares (CRPS) of Rs. 100/- each issued
to persons forming part of promoter and promoter group as per the CDR
package.
The aforesaid dividend on CRPS will absorb Rs. 218.58 lac (inclusive of
distribution tax). A proposal for confirmation of the dividend on CRPS
will be placed before the shareholders at the ensuing Annual General
Meeting.
In the light of carried forward losses, no dividend is recommended on
Equity Shares.
Operations
Your Directors feel pleasure in informing the members that as a result
of varied improvement measures undertaken by the management in the past
few years, your Company, during the year under review, recorded further
overall growth in turnover and profitability.
The Company achieved a Turnover of Rs. 653.32 crores for the year ended
the 31st March, 2014 against Rs. 558.90 crores in the previous year,
ended the 31st March, 2013. The Company achieved a net profit of Rs.
29.46 crores against Rs. 24.18 crores in the previous year.
During the period under review, your Company has been able to achieve
production of 17332 MT of cotton yarn (16852 MT), 1406 MT of dyed yarn
(1300 MT), 3692 MT of grey knitted fabric (3592 MT), 4737 MT of
processed fabric (4103 MT) and 53.35 lac pieces of garments (43.65 lac
pieces), without any expansion in capacity.
Industry Scenario
The Textile Industry in India plays a significant role in the overall
economic development of the country and is in fact, the second largest
contributor to the Gross Domestic Product after Agriculture sector. It
is also one of the largest contributing sectors to our Country''s
exports. The Cotton textile industry in India plays a global role
since ages with now a major share in the international trade of cotton
yarn.
The Industry began the year on a positive note and maintained its
momentum throughout the year. During the most part of the year China
and US remained major importers in the global market and India remained
the major exporter of Cotton Yarn which in turn led to overall increase
in the profitability of the Industry. Fluctuations in the exchange rate
also played a significant role in the fortunes of textile industry.
The year under review was generally marked by stability for the textile
industry with increase in the demand for cotton yarn. Your Directors
are looking forward to the momentum provided by the financial year
2013-14 though, the current scenario indicates a slight depression in
the demand and decline in margins. Your Directors are hopeful to meet
the challenges that may arise out of this.
Modernization and Expansion
Your Directors, in their previous report, informed the members about
implementation of the modernization programme. Your Directors have
pleasure in informing the members, that against the modernization
programme, the Company has incurred a capex of Rs. 31.55 crore during
the year under review. This has resulted in significant improvement in
quality and productivity leading to higher profitability. Your
Directors feel pleasure in informing you that the Company has embarked
upon a further modernization plan to replace some of the equipments
which are very old, to ensure further improvements in the productivity
and profitability of the Company. The modernization plan will involve a
further capex of Rs. 40.00 crores.
Your Directors further inform the members that, encouraged with the
performance of Garment Division, your Company, in order to decongest
and de-risk its operations, is shifting some of the Garment activity to
an additional location at Noida. Your Company is also planning to
install further production lines at this additional location in order
to boost production, turnover and profitability of the Garment
division.
Directors
Your Directors inform the members that Shri L. N. Jhunjhunwala,
Chairman-Emeritus and the founder of the Group expressed his desire to
relinquish the office of Director so to devote his time to
philanthropic activities where he had been deeply involved for a long
time. Your Directors respecting his desire accepted his request to
resign from the Board and urged him in all earnestness to continue as
the Chairman-Emeritus, which he has very kindly accepted. Your
Directors honour and taken pride in the contribution of Shri L. N.
Jhunjhunwala since the inception of the Company.
Shri Ravi Jhunjhunwla, Director retire by rotation and being eligible
offer himself for reappointment.
Your Directors further inform the members that in accordance with the
provisions of the Companies Act, 2013, and Clause 49 of the Listing
Agreement as per SEBI Circular dated 17th April, 2014, the Company is
required to appoint the Independent Directors on the Board to hold
office for one more term of five consecutive years and such independent
directors shall not be liable to retire by rotation. Dr. Kamal Gupta,
Shri D. N. Davar and Shri P. S. Dasgupta have been serving the Board
for more than five years. Therefore it is proposed to appoint all of
them as Independent Directors for one more term of five consecutive
years commencing from ensuing Annual General Meeting.
Shri Shantanu Agarwal was co-opted on the Board as Additional Director
with effect from 22nd April, 2014, liable to retire by rotation, and he
shall hold office up to the date of ensuing Annual General Meeting. The
Board recommends the appointment of Shri Shantanu Agarwal.
Auditors Appointment
M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered
Accountants, Auditors of the Company, retire at the conclusion of the
ensuing Annual General Meeting of the company and are eligible for
re-appointment.
The observations of the Auditors, if any, are explained wherever
necessary, in the appropriate notes to the accounts.
Corporate Governance
The Company has been practicing good Corporate Governance over a period
of time and lays emphasis on transparency, accountability and
integrity. Company conforms to the code of corporate governance as
stipulated under the Listing Agreement which is also published on the
website of the Company.
Report on Corporate Governance along with the Certificate of Auditors,
M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered
Accountants, confirming compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement,
forms part of the Annual Report.
Management Discussion and Analysis Report
Management Discussion and Analysis Report, as required by clause 49 of
listing agreement, forms part of the Annual Report.
Internal Control Systems
The systems in the operations of the Company ensure that the
information which is provided to the management is timely and reliable.
The annual business plan is presented to the Audit Committee at the
beginning of every financial year and regular updates are presented on
a quarterly basis to the Committee. The Action Taken Report of the
previous meeting is presented in the ensuing meeting and members are
regularly updated about the actions taken.
These systems also provide a robust structure which in turns help in
the compliance of various laws and statutes which automatically
translate into financial and operational discipline thereby increasing
profit margins and protecting the assets of the Company. These systems
ensure that transactions are executed in accordance with specified
policies and resources are deployed prudently as per the business plan.
The Company''s internal control systems comprise of audit and compliance
by in-house staff supplemented by internal audit checks by the internal
auditors.
The internal auditors independently evaluate the adequacy of internal
controls and periodically audit the majority of the transactions in
value terms. Internal Auditors report directly to the Audit Committee
of the Board.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars relating to conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo as required under
Section 217(1)(e) of the Companies Act, 1956, read with Companies
(Disclosure of particulars in the report of Board of Directors) Rules
1988, are given as per Annexure-I to the Directors'' Report.
Particulars of Employees
Statement of particulars of Employees as required to be furnished
pursuant to Section 217(2A) of Companies Act, 1956 read with Companies
(Particulars of Employees) Rules, 1975 is attached hereto and is given
in Annexure-II forming part of this Report.
Directors'' Responsibility Statement
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
state that:
* in the preparation of the annual accounts, the applicable accounting
standards have been followed;
* appropriate accounting policies have been selected and applied
consistently and they have 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 on 31st March, 2014, and of the profit of the
Company for the year ended on that date;
* proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
* the Annual Accounts have been prepared on a going concern basis.
Acknowledgements
The board greatly appreciates the commitment and dedication of its
employees across all levels who have contributed to the growth and
sustained success of the Company. We would like to thank all our
clients, vendors, bankers, other business associates, Central and State
Government for their continued support and encouragement during the
year.
The directors also thank the investors for their continued faith in the
Company.
For and on behalf of the Board
Ravi Jhunjhunwala
Noida (U.P) Chairman
22th April, 2014 DIN - 00060972
Mar 31, 2013
The Directors have pleasure in presenting the Twenty Fourth Annual
Report of the Company and the audited Financial Statements for the year
ended the 31st March, 2013.
financial Results
(Rs.in Crore)
31.03.13 31.03.12
Current Previous
Year Year
Turnover 558.90 535.91
Proft/(Loss) from operations 24.18 (1.95)
Less: Taxation - -
Proft / (loss) after Tax 24.18 (1.95)
Add: Balance brought
forward from (112.96) (112.96)
previous year
Add: Transfer from
General Reserve 3.71
(88.78) (111.20)
Appropriations:
Proposed Dividend
on Preference Shares 2.23 1.51
Tax on Proposed Dividend 0.38 0.25
Balance carried to
Balance Sheet (91.39) (112.96)
Dividend
Your Directors recommend to the members, a preference dividend @ 8%
p.a. i.e. Rs. 8/- per share on 18,85,400 Cumulative Redeemable Preference
Shares (CRPS) of Rs. 100/- each issued to various Banks/ Institutions and
@ 3% p.a. i.e.Rs. 3/- per share on 12,00,000 Cumulative Redeemable
Preference Shares (CRPS) of Rs. 100/- each issued to persons forming part
of promoter and promoter group, in accordance with CDR package.
Your Directors also recommend the payment of arrears of dividend for
the fnancial year 2011-12 @ 3% p.a. i.e. Rs. 3/- per share on 12,00,000
Cumulative Redeemable Preference Shares (CRPS) of Rs. 100/- each issued
to persons forming part of promoter and promoter group, which were not
paid last year due to unavailability of profts.
The aforesaid dividend on CRPS will absorb Rs. 260.70 Lacs (inclusive of
distribution tax). A proposal for confrmation of the dividend on CRPS
will be placed before the shareholders at the ensuing Annual General
Meeting.
No dividend is recommended on the Equity Shares.
Operations
Your Directors have the pleasure in informing the members that, during
the year under review, your Company made a healthy come- back by
improving its performance. Maintaining momentum provided by the last
quarter of the fnancial year 2011-12 and with several measures taken by
your Directors and top management such as cost control, quality
assurance, process optimization etc. The Company has shown improvement
in its operations as well as fnancial fgures during the year under
review.
The Company achieved a Turnover of Rs. 558.90 Crores for the year ended
the 31st March, 2013 against Rs. 535.91 Crores in the previous year ended
the 31st March, 2012. The Company achieved an operating proft of Rs.
65.74 Crores againstRs. 43.95 Crores in the previous year.
During the period under review, your Company has been able to achieve a
production of 16852 MT of cotton yarn (16004 MT), 1300 MT of dyed yarn
(1108 MT), 3592 MT of grey knitted fabric (3457 MT), 4103 MT of
processed fabric (4085 MT) and 43.65 lakhs pieces of garments (45.44
lakhs pieces).
Industry Scenario
During the year under review the textile industry showed positive trend
in contrast with the previous fnancial year i.e. 2011-12 which suffered
from high volatility in commodity prices and depleted global demand
causing pressure on realizations and margins. The year under review
showed improvement in global demand and also rupee realisations of yarn
increased partially due to rupee depreciation against the USD and Euro,
besides improvement in capacity utilization and machine effciency which
resulted in growth in revenues. The year was also marked by stability
and restoration of operating margins for textile industry across the
value chain led by steady cotton prices and improved demand for cotton
yarn.
Your Directors are looking forward to keep the momentum provided by the
fnancial year 2012-13 and hope that the current demand will continue
and that the Company would be able to sustain the trend in the ensuing
year.
Modernisation
Your Directors are pleased to inform the members that in view of the
improved cash fows from operations your Company, during the year under
review, planned a modernization programme at its Sarovar unit involving
a capital outlay of Rs. 41.20 Crores. Your Directors are hopeful that
with implementation of the aforesaid mordernisation programme the
operations of the Company shall improve signifcantly in terms of
quality, productivity as well as proftability. Your Company is expected
to reap the benefts of this mordernisation programme during the current
fnancial year onwards.
Directors
Shri L. N. Jhunjhunwala and Shri P. S. Dasgupta, Directors, retire by
rotation and being eligible, offer themselves for reappointment.
Shri Shekhar Agarwal was re-appointed as Managing Director of the
Company for a further period of three years with effect from 1st April,
2013 to 31st March, 2016, subject to the approval of the members of the
Company. The Board recommends the re-appointment of Shri Shekhar
Agarwal.
Auditors
M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered
Accountants, Auditors of the Company, retire at the conclusion of the
ensuing Annual General Meeting of the Company, and are eligible for
re-appointment.
The observations of the Auditors if any are explained wherever
necessary, in the appropriate notes to the accounts.
The Company, during the period 2008-2009, reported its potential
sickness to the Board for Industrial and Financial Reconstruction in
accordance with the Section 23(1)(a)(ii) of the Sick Industrial
Companies (Special Provisions) Act, 1985 (SICA). Your Directors further
state that with the corrective/effective measures taken your Company
has made cash profts in the fnancial year ended 31st March, 2013 and
preceding two fnancial years.
Corporate governance
Report on Corporate Governance along with the Certifcate of Auditors,
M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered
Accountants, confrming compliance of conditions of Corporate Governance
as stipulated under Clause 49 of the Listing Agreement, forms part of
the Annual Report.
Management Discussion and Analysis Report
Management Discussion and Analysis Report, as required by Clause 49 of
the Listing Agreement, forms part of the Annual Report.
Internal Control Systems
The Company has in place adequate internal control systems commensurate
with its size and nature of business. These systems not only provide a
reasonable assurance in respect of providing fnancial and operational
information but also compliance with applicable statutes and
safeguarding of assets of the Company. These systems ensure that
transactions are executed in accordance with specifed policies and
resources are deployed as per the business plan.
The Company has an in-house Internal Audit Division and the head of
internal audit function reports directly to the Audit Committee to
ensure independence of this function.
Particulars of Employees
There was no employee drawing remuneration in excess of limits
prescribed under section 217 (2A) of the Companies Act, 1956 read with
Companies (Particulars of Employees) Rules, 1975 and any amendment
thereto.
Energy Conservation, Technology Absorption and foreign Exchange
Earnings and Outgo
The particulars relating to Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo as required under
Section 217(1)(e) of the Companies Act, 1956, read with Companies
(Disclosure of particulars in the report of Board of Directors) Rules
1988, are given as per Annexure-I to the Directors'' Report.
Directors'' Responsibility Statement
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
state that:
- in the preparation of the Annual Accounts, the applicable Accounting
Standards have been followed and no material departures have been made
from the same;
- appropriate Accounting Policies have been selected and applied
consistently and they have 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 on 31st March 2013, and of the Proft or Loss
of the Company for the year ended on that date;
- proper and suffcient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- the Annual Accounts have been prepared on a Âgoing concern'' basis.
Acknowledgements
Your Directors express their gratitude to Customers, Dealers and
Suppliers, Investors, Members, Banks, Financial Institutions, Central
and State Governments for the continued support and co-operation
extended by them to the Company. Your Directors also thank the
employees of the Company across all levels for the sincere and hard
work put in by them during the year under review.
For and on behalf of the Board
Ravi Jhunjhunwala
Noida (U.P) Chairman
30th April, 2013 DIN -00060972
Mar 31, 2012
The Directors have pleasure in presenting the Twenty Third Annual
Report of the Company and the audited financial statements for the year
ended the 31st March, 2012.
financial Results
(Rs. in Crore)
31.03.12 31.03.11
Current Previous
Year
Year
Turnover 535.91 510.39
Profit/(Loss) from operations (1.95) 12.87
Less: Taxation - -
Profit / (loss) after Tax (1.95) 12.87
Add: Balance brought forward from (112.96) (123.73)
previous year
Add: Transfer from General Reserve 3.71 -
(111.20) (110.86)
Appropriations:
Proposed Dividend 1.51 1.81
Tax on Proposed Dividend 0.25 0.29
Balance carried to Balance Sheet (112.96) (112.96)
Dividend
The Company has received the approval of Ministry of Corporate Affairs
under section 205A(3) of the Companies Act, 1956 to pay the dividend
out of reserves on 8% Cumulative Redeemable Preference Shares (CRPS).
Accordingly, your Directors recommend to the Annual General Meeting, a
preference dividend @ 8% p.a. i.e Rs. 8/- per share on 18,85,400
Cumulative Redeemable Preference Shares (CRPS) of Rs. 100/- each issued
to the Banks pursuant to the Corporate Debt Restructuring (CDR) Scheme
approved by the CDR Cell under the aegis of Reserve Bank of India.
The dividend on CRPS will absorb Rs.176 Lacs (inclusive of distribution
tax). A proposal for declaration of the dividend on 8% CRPS will be
placed before the shareholders at the ensuing Annual General Meeting.
No dividend is recommended on 3% CRPS held by promoters as well as
Equity Shares of the Company.
Operations
During the year under review the operations of the Company got affected
on account of high volatility in cotton prices in the first half of the
financial year under review and unremunerative realisations. This
affected the profitability of the Company to a great extent coupled
with other factors such as increased competition from the neighbouring
Countries and recession in the global demand. The adverse results were
further affected by mark to market loss on account of foreign exchange
booking on account of export orders due to depreciation of Indian Rupee
against US dollar.
Your Directors took several measures to over come the situation by
adhering to cost cutting measures and by increasing the operational
efficiencies. Your Directors feel pleasure in informing the members
that operations of the Company showed recovery in the last quarter of
the financial year under review.
Your Directors are hopeful that the Current Financial year will reflect
positive trend in operational performance and profitability of the
Company as evident from the results for the first half of the current
financial year.
The Company achieved a Turnover ofRs. 535.91 Crores for the year ended
the 31st March, 2012 againstRs. 510.39 Crores in the previous year ended
the 31st March, 2011. The Company achieved an operating profit of Rs.
43.95 Crores against Rs. 59.42 Crores in the previous year.
During the period under review, your Company has been able to achieve a
production of 16004 MT of cotton yarn (16562 MT), 1108 MT of dyed yarn
(1117 MT), 3457 MT of grey knitted fabric (3050 MT), 4085 MT of
processed fabric (3992 MT) and 45.44 lakhs pieces of textile made-ups
(36.63 lakhs pieces). Due to adverse business condition the spinning
unit had to be partially closed for 68 days in July/August, 2011
leading to a loss in production of 524.31 MT.
Industry Scenario
With the high volatility in commodity prices, high interest rates and
power costs and slack in demand in the key export markets, the textile
and clothing industry has been facing tough times since the last one
year. On global front the economic disruptions in the US and euro-zone
on account of sustained weakness of demand sentiments, increasing
commodity prices, overheating in certain emerging markets, geopolitical
tensions and questions raised by rating agencies on the US economy
contributed to the diminished performance of the textile industry.
However, the last quarter of the year under review has brought marginal
relief to the industry due to stability in the commodity prices and a
slight improvement in global demand.
Your Directors hope that the improved market conditions and with the
necessary corrective measures being taken, Company would be able to
report improved performance in coming years.
Directors
Shri D. N. Davar and Dr. Kamal Gupta, Directors, retire by rotation and
being eligible, offer themselves for reappointment.
Auditors
M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered
Accountants, Auditors of the Company, retire at the conclusion of the
ensuing Annual General Meeting of the Company, and are eligible for
re-appointment.
The observations of the Auditors are explained wherever necessary, in
the appropriate notes to the accounts.
Upto financial year 1999-2000, the Company was treating plant &
machinery of spinning unit as continuous process plant and, was
accordingly charging depreciation based on an estimated useful life of
18 years. The estimated useful life was revised to 13 years on the
basis of the then available technology indicators. From 2008-2009,
based on usage, technology and efficiency parameters, the Company, in
order to reflect a more appropriate preparation/ presentation of
financial statements, has revised the estimated useful life of such
plant & machinery by reinstating the same to 18 years.
The Company, during the period 2008-2009, reported its potential
sickness to the Board for Industrial and Financial Reconstruction in
accordance with the Section 23(1)(a)(ii) of the Sick Industrial
Companies (Special Provisions) Act, 1985 (SICA). Your Directors further
state that with the corrective/effective measures taken your Company
has made cash profits in the financial year ended March 31, 2012 and
preceding two financial years.
Corporate governance
Report on Corporate Governance along with the Certificate of Auditors,
M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered
Accountants, confirming compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement,
forms part of the Annual Report.
Management Discussion and Analysis Report
Management Discussion and Analysis Report, as required by Clause 49 of
listing agreement, forms part of the Annual Report.
Internal Control Systems
Your Company has in place adequate systems of internal control and
procedures covering all financial and operating functions. The Audit
Committee reviews the Internal Audit Reports and ensures that the
Internal Control Systems are in place and functioning effectively in
the organization to help ensure that applicable statutes and
regulations are complied with and recommends to the Board any changes
in the system of Internal Controls, procedures and practices which they
determine to be appropriate. Details on the composition and functions
of the Audit Committee can be found in the chapter on Corporate
Governance of the Annual Report.
Particulars of Employees
There was no employee drawing remuneration in excess of limits
prescribed under section 217 (2A) of the Companies Act, 1956 read with
Companies (Particulars of Employees) Rules, 1975 and any amendment
thereto.
Energy Conservation, Technology Absorption and foreign Exchange
Earnings and Outgo
The particulars relating to conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo as required under
Section 217(1)(e) of the Companies Act, 1956, read with Companies
(Disclosure of particulars in the report of Board of Directors) Rules,
1988, are given as per Annexure - I to the Directors' Report.
Directors' Responsibility Statement
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
state that:
in the preparation of the annual accounts, the applicable accounting
standards have been followed;
appropriate accounting policies have been selected and applied
consistently and they have 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 on 31st March 2012, and of the profit or loss
of the Company for the year ended on that date;
proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; the Annual
Accounts have been prepared on a going concern basis.
Acknowledgements
Your Directors take this opportunity to express their appreciation for
the assistance and continued support of the Customers, Suppliers,
Bankers, Financial Institutions, Central and State Governments and
Shareholders. Your Directors also acknowledge the dedicated service
rendered by the Employees of the Company at all levels.
For and on behalf of the Board
Ravi Jhunjhunwala
Noida (U.P) Chairman
29th October, 2012 DIN -00060972
Mar 31, 2010
The Directors have pleasure in presenting the Twenty First Annual
Report of the Company and the audited financial statements for the Six
Months period ended the 31st March, 2010
Financial Results
(Rs in crore)
31.03.10 30.09.09
Current Previous
Year Year
(6 Months) (18 Months)
Net Turnover 199.62 518.63
Profit/(Loss) from operations 3.59 (41.47)
Less: Taxation 0.09 0.40
Profit / (Loss) after Tax 3.50 (41.87)
Add: Balance brought forward
from previous year (126.32) (84.45)
(122.82) (126.32)
Appropriations:
Proposed dividend on cumulative 0.78 -
redeemable preference shares
Tax on dividend thereon 0.13 -
Balance carried to Balance Sheet (123.73) (126.32)
Financial Year
The last financial year of the Company was extended by six months and
accordingly, ended on the 30th September, 2009 for a period of 18
months. However, the accounts of the Company for the year ended the
31st March, 2010 have been prepared for the six months period i.e. from
1st October, 2009 to 31st March, 2010.
Operations
Your Director feel pleasure in informing the members that after
successful implementation of CDR package in the previous financial year
coupled with improvement in market conditions, your Company achieved a
significant improvement in its performance during the period under
review. The Company achieved a Turnover of Rs. 199.62 Crores for the
year ended the 31st March, 2010 (six months period) against Rs. 518.63
Crores in the previous year ended the 30th September 2009 (eighteen
months period). The Company achieved an operating profit of Rs. 25.89
Crores against Rs. 29.43 Crores in the previous period.
During the period under review, your Company has been able to achieve a
production of 8452 MT (23010 MT) of cotton yarn, 548 MT (1471 MT) of
dyed yarn, 1348 MT (3687 MT) of grey knitted fabric, 2043 MT (4566 MT)
of processed fabric and 17.99 lakhs (52.01 lakhs) pieces of textile
made-ups.
Dividend
Your Directors recommend to the Annual General Meeting, a preference
dividend @ 8% p.a i.e Rs. 4/- per share on 18,85,400 Cumulative
Redeemable Preference Shares of Rs. 100/- each issued to various
Banks/Institutions; @ 3% p.a i.e Re. 0.50 per share on 6,00,000
Cumulative Redeemable Preference Shares (CRPS) of Rs.100/- each issued
to persons forming part of promoter and promoter group, in accordance
with CDR package.
The dividend on CRPS will absorb Rs. 91.74 Lacs (inclusive of
distribution tax). A proposal for confirmation of the dividend on CRPS
will be placed before the shareholders at the ensuing Annual General
Meeting.
No dividend is recommended on the Equity Shares.
Industry Scenario
The textile industry in the past two years witnessed a steep decline in
realizations and faced intense competition from low cost neighboring
countries. These margins were further reduced significantly in the wake
of world wide recession, dampened sentiments and demand. However, due
to the change in sentiments on account of partial recovery of US and
European Economies and the recovery and revival of the Countrys
economy, Textile industry started showing improvement from the second
half of previous calendar year. This has resulted in an increase in
Textile Exports from the country coupled with improved demand in the
domestic markets. However, there is a slight concern on account of
appreciation in Rupee against USD.
Your Directors sincerely hope that the current uptrend in demand will
continue to enable your Company to report further improvement in its
performance in future years.
Directors
Dr. Kamal Gupta and Mr. L.N. Jhunjhunwala, Directors, retire by
rotation and being eligible, offer themselves for reappointment.
Potentially Sick Company
Your Directors are pleased to inform that with the corrective/effective
measures taken by the Company [including implementation of Corporate
Debt Restructuring (CDR) package], the operations of the Company have
improved considerably and the Company is on revival path.
Auditors
M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered
Accountants, Auditors of the Company, retire at the conclusion of the
ensuing Annual General Meeting of the Company, and are eligible for
re-appointment.
The observations of the Auditors are explained wherever necessary, in
the appropriate notes to the accounts.
Upto financial year 1999-2000, the Company was treating plant &
machinery of spinning unit as continuous process plant and was,
accordingly charging depreciation based on an estimated useful life of
18 years. The estimated useful life was revised to 13 years on basis of
the then available technology indicators. From 2008-2009, based on
usage, technology and efficiency parameters, the Company, in order to
reflect a more appropriate preparation/ presentation of financial
statements, has revised the estimated useful life of such plant &
machinery by reinstating the same to 18 years.
The Company, during the period 2008-2009, reported its potential
sickness to the Board for Industrial and Financial Reconstruction in
accordance with the Section 23(1)(a)(ii) of the Sick Industrial
Companies (Special Provisions) Act, 1985 (SICA). Your Directors further
state that with the corrective/effective measures taken and improvement
in market conditions, the Company has made Net profit in the last
financial year ended the 31st March, 2010.
Corporate Governance
Report on Corporate Governance along with the Certificate of Auditors,
M/s. Doogar & Associates and M/s. Ashim & Associates, Chartered
Accountants, confirming compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement,
forms part of the Annual Report.
Management Discussion and Analysis Report
Management Discussion and Analysis Report, as required by clause 49 of
listing agreement, forms part of the annual report.
Internal Control Systems
Your Company has in place adequate systems of internal control and
procedures covering all financial and operating functions. The Audit
Committee reviews the Internal Audit Reports and ensures that the
Internal Control Systems are in place and functioning effectively in
the organization to help ensure that applicable statutes and
regulations are complied with and recommends to the Board any changes
in the system of Internal Controls, procedures and practices which they
determines to be appropriate. Details on the composition and functions
of the Audit Committee can be found in the chapter on Corporate
Governance of the Annual Report.
Particulars of Employees
Particulars of Employees as required to be furnished pursuant to
Section 217(2A) of Companies Act, 1956 read with Companies (Particulars
of Employees) Rules, 1975 are attached hereto and forms part of the
Report as Annexure-I.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars relating to conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo as required under
Section 217(1)(e) of the Companies Act, 1956, read with Companies
(Disclosure of particulars in the report of Board of Directors) Rules,
1988, are given as per Annexure-II to the Directors Report.
Directors Responsibility Statement
Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors
state that:
- in the preparation of the annual accounts, the applicable accounting
standards have been followed;
- appropriate accounting policies have been selected and applied
consistently and they have 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 on 31st March 2010, and of the profit or loss
of the Company for the Six months period ended on that date;
- proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
- the Annual Accounts have been prepared on a going concern basis.
Acknowledgements
Your Directors take this opportunity to express their appreciation for
the assistance and continued support of the Customers, Suppliers,
Bankers, Financial Institutions, Central and State Governments and
Shareholders. Your Directors also acknowledge the dedicated service
rendered by the Employees of the Company at all levels.
for and on behalf of the Board
Noida (U.P.) Ravi Jhunjhunwala
27th April, 2010 Chairman
DIN : 00060972
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