| Dear Shareholders,
The Directors present their Twenty Fourth Annual Report and Audited
accounts for the year ended 30th September, 2014.
FINANCIALS
Your Company's financial performance was as follows : Rs./lacs
Particulars 30.09.2014 30.09.2013
Profit before Interest, Depreciation
and Tax 318.61 1195.88
Less: Interest 930.81 920.16
Gross Profit/ (Loss) for the Year (612.20) 275.72
Less: Depreciation 373.32 386.66
Profit/(Loss) Before Tax (985.52) (110.94)
Less : Provision for Tax - -
Profit / (Loss) After Taxation (985.52) (110.94)
Balance Brought Forward from
last Account (6645.49) (6534.55)
Balance Carried to Balance Sheet (7631.01) (6645.49)
DIVIDEND
The Directors of your Company do not recommend any dividend for the
year under review.
OPERATIONS
Current year started with cotton prices ruling quite high and yarn
prices were not able to keep pace with increase in raw material prices.
In the second half of the year, the cotton prices started to decline
and the future markets indicated further decline in cotton prices and
this led to sentiments of extreme weakness resulting in decline of yarn
prices. The yarn prices kept pace with the cotton prices in future
market, rather than the current market prices which were higher. The
incentives announced by various state governments has resulted in
expansion and set up of new units, which have resulted in excess
supply. These factors resulted in huge losses.
FINANCE
During the year under review, the long term borrowings and short term
borrowings of the Company stands at ^434.35 Lakhs and ^5573.44 Lakhs
respectively as on 30th September, 2014.
REFERENCE TO THE BOARD OF INDUSTRIAL AND FINANCIAL RECONSTRUCTION
The accumulated losses of the Company at the end of financial year
September 30, 2014, have resulted in erosion of 100% of its peak net
worth in the current year. The Company's reference bearing no.06/2013
filed with Board for Industrial and Financial Reconstruction under
Section 15(1) of the Sick Industrial Companies (Special Provisions)
Act, 1985 for the year ended 30th September, 2012 is still pending and
therefore the Board has decided not to file any fresh reference under
Section 15(1) of the Sick Industrial Companies (Special Provisions)
Act, 1985 in the current year.
The Company's appeal under Section 25(1) of the Sick Industrial
Companies (Special Provisions) Act,1985 against the order passed by the
BIFR for reference no.3/2012 filed u/s 15(1) of the SICA,1985 on
13/01/2012 is in final hearing stage.
DIRECTORS
Mr. Susanta Banerjee(DIN:01173116), Director of the Company, retires by
rotation at the ensuing Annual General Meeting and being eligible,
offers himself for re-appointment.
Pursuant to Section 161 (1) of the Companies Act, 2013 and Article 82
of the Articles of Association of the Company, Ms. Puja Borar (DIN:
06873157), who was appointed as an Additional Director designated as an
Independent Director with effect from 12th August 2014 and shall hold
office up to the date of the ensuing Annual General Meeting. The
Company has received requisite notice in writing from a member
proposing Ms. Puja Borar for appointment as an Independent Director.
As per the provisions of Section 149 and other applicable provisions of
the Companies Act, 2013, Mr. Krishna Kumar Gupta (DIN: 06657407) and
Ms. Puja Borar (DIN: 06873157), directors of the Company, are being
appointed as Independent Directors for five consecutive years from the
conclusion of this Annual General Meeting not liable to retire by
rotation.
Subject to the approval of the shareholders in the general meeting and
the Central Government, the Board of Directors on 29th November 2014
re-appointed Mr. Umang Kanoria (DIN: 00081108), as the Managing
Director of the Company for a period of three years with effect from
1st January, 2015 on the terms and conditions agreed to by the Board of
Directors and Mr. Umang Kanoria.
The Company has received declarations from the Independent Directors of
the Company confirming that they meet with the criteria of independence
as prescribed both under sub-section (6) of Section 149 of the
Companies Act, 2013 read with the Companies (Appointment and
Qualification of Directors) Rules, 2014 and Clause 49 of the Listing
Agreement. The Company has also received intimation in Form DIR-8 under
Section 164(2) of the Companies Act, 2013 read with rules made
thereunder from its Directors.
Necessary resolutions for the appointment/re-appointment of the
aforesaid directors have been included in the notice convening the
ensuing AGM and details of the proposal for appointment /
re-appointment are mentioned in the explanatory statement of the
notice.
Mr. Atul Doshi has tendered his resignation from the Directorship of
the Company with effect from 27th November 2014, due to his
preoccupation and inability to devote time to discharge his
responsibilities. The Board of Directors in their meeting took note of
the same and placed their appreciation of the valuable contribution
made by him.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 217(2AA) of the Companies Act, 1956, your Directors
confirm that:
(i) in the preparation of the Annual Accounts for the financial year
ended 30th September, 2014, the applicable accounting standards have
been followed along with proper explanation relating to material
departures.
(ii) they have selected such Accounting Policies and applied them
consistently and made judgements and estimates that they are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of Financial Year and of the profit or loss
of the Company for that period.
(iii) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of your Company and for preventing and
detecting fraud and other irregularities; and
(iv) they have prepared the annual accounts for 30th September, 2014 on
a going concern basis.
PUBLIC DEPOSITS
The Company did not accept any deposit under Section 58A of the
Companies Act 1956, during the year under review.
AUDITORS & AUDITORS' REPORT
Messrs B. R. Shah & Associates, Chartered Accountants, (Registration
No. 129053W), retire at the ensuing Annual General Meeting and being
eligible, have expressed their willingness to continue as Auditors of
the Company, if so appointed by the members. Your Company has received
the consent and certificate from Messrs. B. R. Shah & Associates,
Chartered Accountants to the effect that their re-appointment if made,
would be within the limits prescribed under the Section 141 of the
Companies Act, 2013 read with rules and that they are not disqualified
for reappointment within the meaning of Section 141 of the Companies
Act 2013. They have also confirmed that they hold a valid peer review
certificate as prescribed under Clause 41(1) (h) of the Listing
Agreement.
The Auditors' have qualified their Report and the explanation in this
regard forms part of the Annexure to Directors' Report.
COST AUDIT
The Cost Audit Report for the financial year ended 30th September 2013
was filed with the Ministry of Corporate Affairs on 13th March 2014,
due date being 29th March 2014.
REPORTS ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS
REPORT
Your Company has fully complied with the requirements of Clause 49 of
the Listing Agreement regarding Corporate Governance. Report on
Corporate Governance Practices, the Auditors' Certificate on compliance
of mandatory requirements thereof and Report on Management Discussion &
Analysis Report are given as annexure and forms part of this report.
EMPLOYEE PARTICULARS
The particulars of employees pursuant to Section 217 (2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rule 1975, as amended by Companies(Particulars of Employees)Amendment
Rules 2011, are not applicable as no employee was in receipt of
remuneration to the extent laid down in the said Rules.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
A statement pursuant to Section 217(1) (e) of the Companies Act, 1956
read with the Companies (Disclosure of Particulars in the Report of
Directors) Rules, 1988 on conservation of energy, technology
absorption, foreign exchange earnings and outgo is annexed to and forms
part of this Report.
ACKNOWLEDGEMENT
Your Directors place on record their appreciation for the cooperation
and support extended by the Employees, Banks/ Financial Institutions
and all other business partners.
For and on behalf of the Board
Kolkata, U. KANORIA
November 29, 2014 Chairman & Mg. Director
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