| Dear Members,
The Directors are pleased to present their 29th Annual Report on the
affairs of the Company together with the Audited Statement of Accounts
for the year ended 31st March, 2015.
2014-15 2013-14
(Rs. in lacs) (Rs. in lacs)
FINANCIAL RESULTS
Profit before Finance
Cost,Depreciation, Tax 993.58 2,896.49
Less: Finance Costs 868.31 911.52
Profit/(Loss) before 125.27 1,984.97
Depreciation
Less: Depreciation 462.26 960.10
(336.99) 1,024.87
Less: Provision for - 475.84
Income Tax
Less: Prior Years'
Tax Adjust- ments (Net) - 13.26
Add: Deferred Tax Assets 14.44 21.45
Profit/(Loss) for the year (322.55) 557.22
Balance brought forward
from previous year 1,664.35 1,158.31
Less: Additional Depreciation
dueto change in life of
Assets net ofDeferred
Tax Asset Rs.86.48 Lakhs
consequent to enactment of
Companies Act, 2013 169.26 -
Amount available for 1,172.54 1,715.53
appropriation
Less: Appropriations
during the year
Proposed Dividend - 43.75
Corporate Dividend Tax - 7.43
Balance Carried to
Balance Sheet 1,172.54 1,664.35
performance review
During the year revenue from the operations of the Company is Rs.280.65
Crores as compared to Rs.344.29 Crores in the previous year. The
operating profits of the Company is Rs.9.93 Crores as against Rs.28.96
Crores in the previous year. The loss after finance cost and
depreciation is Rs.3.37 Crores as against the profit of Rs.10.25 Crores
in the previous year.
This year exports of cotton yarn from India to China dropped by a
whopping 23%. The main reason for the fall in sales of the Company is
due to substantial reduction in exports and reduction in price of yarns.
Our exports during the year is Rs.197.24 Crores as against Rs.244.88
Crores in the previous year. The reasons for drop in operating profits
are mainly due to fall in exports and increase in man power cost.
DIVIDEND
The Board has decided not to recommend any dividend for the Financial
Year 2014-15.
SHARE CAPITAL
The paid up Equity Share Capital as on 31st March, 2015 was
Rs.8,74,98,650. During the year under review, the Company has not
issued any shares with differential rights as to dividend, voting or
otherwise or convertible debentures.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION
OF THE COMPANY
No material changes and commitments affecting the Financial Position of
the Company which have occurred between the end of the Financial year
of the Company to which the Financial Statement relate and the date of
this report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
In accordance with the provisions of Section 134 of the Companies Act,
2013 read with the Companies (Accounts) Rules, 2014, required
information relating to the Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo is given in the
"Annexure A" to the Directors' Report.
EXPANSION OF BUSINESS
The Company has surplus parcels of land at Kolhapur. The Board of
Directors of the Company are of the opinion that since the Real Estate
sector is doing well, the Company can profitably diversify its business
into Real Estate. Keeping this in view, the Company has altered the
Main Object of the Memorandum of Association of the Company to include
Real Estate business.
DIRECTORS / KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act, 2013 and the
Articles of Association of the Company, Shri Hari Prasad Siotia (DIN:
00015103) retires by rotation at the ensuing Annual General Meeting and
being eligible offers himself for reappointment. Accordingly, his
re-appointment forms part of the Notice of the ensuing Annual General
Meeting.
Smt. Hema Thakur (DIN: 01363454) was appointed as an Additional
Independent Director on the Board of the Company on 14th February,
2015. In accordance with the requirements of Section 149 and 152 of the
Companies Act, 2013 and Clause 49 of the Listing Agreement, her
continuation as an Independent Director on the Board of the Company
will have to be approved by the Members of the Company.
In accordance with provisions of Section 149 of the Companies Act, 2013
and the Listing Agreement with the Stock Exchanges, Smt. Hema Thakur
(DIN: 01363454) has given a declaration to the Company that she meets
the criteria of independence as mentioned in Section 149 (6) of the
Companies Act, 2013 read with Clause 49 of the Listing Agreement. The
details of the proposal for appointment of Independent Director is
mentioned in the statement under Section 102 of the Companies Act,
2013, annexed to the notice of the 29th Annual General Meeting of the
Company.
Shri Rajiv Patodia (DIN: 00026711) has been appointed as Chief
Financial Officer of the Company in the Board Meeting held on 8th
November, 2014.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
independence as prescribed under the sub-section (7) of Section 149 of
the Companies Act, 2013 and Clause 49 of the Listing Agreement with the
Stock Exchanges.
DIRECTORS' RESPONSIBILITY STATEMENT
As required by Section 134 (3) (c) of the Companies Act, 2013, your
Board of Directors hereby state:
(a) that in the preparation of the Annual Accounts for the year ended
31st March, 2015, the applicable accounting standards have been
followed along with proper explanation relating to material departures,
if any;
(b) that such accounting policies as mentioned in the Notes to the
Financial Statements have been selected and applied them consistently
and judgments and estimates are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company as at 31st
March, 2015 and of the Profit & Loss of the Company for the year ended
on that date;
(c) that the Directors have taken proper and sufficient care for
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
(d) that the annual accounts have been prepared on a going concern
basis;
(e) that Directors have laid down Internal Financial Controls to be
followed by the Company and such Internal Financial Controls are
adequate and operating effectively;
(f) that systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an Annual Performance
evaluation of its own performance, the Directors individually as well
as the evaluation of the working of its various Committees.
A separate exercise was carried out to evaluate the performance of
individual Directors including the Chairman of the Board, who were
evaluated on parameters such as level of engagement and contribution,
independence of judgement, safeguarding the interest of the Company and
its minority shareholders etc. The performance evaluation of the
Independent Directors was carried out by the entire Board excluding the
Directors being evaluated. The performance evaluation of the Chairman
and Non-Independent Directors was carried out by the Independent
Directors at their separate meeting.
BOARD MEETINGS
During the year, four Board Meetings were convened and held, the
details of which are given in the Corporate Governance Report. The
intervening gap between the Meetings was within the period prescribed
under the Companies Act, 2013.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company's policy on Director's Appointment and Remuneration
including criteria for determining qualifications, positive attributes,
independence of a Director and other matters provided under sub-section
(3) of Section 178 of the Companies Act, 2013 is annexed hereto and
forms a part of this report.
AUDITORS
Statutory Auditors
M/s. Lodha & Co., Chartered Accountants (Firm's Reg. No. 301051E), who
are the Statutory Auditors of the Company, hold office in accordance
with the provisions of the Companies Act, 2013 up to the conclusion of
the Annual General Meeting of the Company scheduled to be held in the
calendar year 2017, subject to ratification by Members every year and
are eligible for re- appointment.
They have confirmed their eligibility under Section 141 of the
Companies Act, 2013 and the Rules framed thereunder for re-appointment
as Auditors of the Company. The Board, based on recommendation of Audit
Committee, recommends the appointment of M/s. Lodha & Co. as the
Statutory Auditors of the Company.
Necessary Resolution for ratification of appointment of the said
Auditors is included in the Notice of AGM for seeking approval of
Members.
Cost Auditors
Pursuant to the provisions of Section 148 and all other applicable
provisions of the Companies Act, 2013 and the Companies (Audit and
Auditors) Rules, 2014, on recommendations of Audit Committee, your
Directors had appointed M/s. A. G. Anikhindi & Co. to audit the Cost
Records of the Company for the Financial year ending 31st March, 2016
on a remuneration of Rs. 1,00,000/- (Rupees One Lakh only) plus
applicable taxes. As required under the Companies Act, 2013, the
remuneration payable to the Cost Auditors is required to be placed
before the Members in Annual General Meeting for their ratification.
Accordingly, a Resolution seeking Member's ratification is included in
the Notice convening the Annual General Meeting.
Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Board has appointed M/s. S. K. Jain & Co.,
Practising Company Secretary, to conduct Secretarial Audit of the
Company for the Financial year 2014-15.
AUDITORS AND REPORTS
The matters related to Auditors and their Reports are as under:
1. Statutory Auditor and their Report:
At the Annual General Meeting held on 6th September, 2014, M/s Lodha &
Co., Chartered Accountant, were appointed as Statutory Auditors of the
Company to hold office till the conclusion of Annual General Meeting to
be held in the calendar year 2017. In terms of the first proviso to
Section 139 of the Companies Act, 2013, the appointment of the Auditors
is to be placed for ratification at every Annual General Meeting.
Accordingly the appointment of M/s Lodha & Co., Chartered Accountant, as
Statutory Auditors of the Company is placed for ratification by the
Shareholders. In this regard the Company has received a Certificate from
the Auditors to the effect that if they are appointed it would be in
accordance with the provision of Section 141 of the Companies Act, 2013.
The Report given by the Statutory Auditors for the Financial Statements
for the year ended 31st March, 2015 read with explanatory notes thereon
do not call for any explanation or comments from the Board under
Section 134(3) of the Companies Act, 2013.
2. Secretarial Auditor & his Report:
M/s. S. K. Jain & Co., (Proprietor Dr. S. K. Jain) Practicing Company
Secretary, was appointed to conduct Secretarial Audit of the Company
for the financial year 2014-15 as required under Section 204 of the
Companies Act, 2013 and the Rules thereunder. The Secretarial Audit
report for the financial year 2014-15 forms part of the Annual Report
as "Annexure B" to the Boards Report. The said report does not contain
any observation or qualification requiring explanation or comments from
the Board under Section 134(3) of the Companies Act, 2013.
CORPORATE GOVERNANCE
The Company has complied with all the mandatory requirements of
Corporate Governance, as stipulated in Clause 49 of the Listing
Agreement with the Stock Exchanges. A separate report on Corporate
Governance and a Certificate from M/s. Lodha & Co., Statutory Auditors,
regarding compliance with the conditions of Corporate Governance is
given in a separate section and forms part of the Annual Report.
AUDIT COMMITTEE
The Board has well-qualified Audit Committee with majority of
Independent Directors including Chairman. They possess sound knowledge
on Accounts, Audit, Finance, Taxation, Internal Controls etc. The
details of the Composition of the Audit Committee are given in the
Corporate Governance Report.
The Company Secretary of the Company acts as Secretary of the
Committee.
During the year, there are no instances where the Board had not
accepted the recommendations of the Audit Committee.
NOMINATION & REMUNERATION COMMITTEE & POLICY
The Company has duly constituted Nomination & Remuneration Committee to
align with the requirements prescribed under the provisions of the
Companies Act, 2013 and the revised Clause 49 of the Listing Agreement.
The details of the Composition of the Nomination & Remuneration
Committee are given in the Corporate Governance Report.
The Board has framed a policy for selection and appointment of
Directors, Senior Management and their Remuneration. The policy
provides for determining qualifications, positive attributes, and
independence of a Director.
RISK MANAGEMENT
The Company has laid down the procedures to inform to the Board about
the risk assessment and minimization procedures and the Board has
formulated Risk Management policy to ensure that the Board, its Audit
Committee and its Executive Management should collectively identify the
risks impacting the Company's business and document their process of
risk identification and risk minimization as a part of a Risk
Management policy / strategy.
The common risks inter alia are: Regulations, Credit Risk, Foreign
Exchange and Interest Risk, Competition, Business Risk, Technology
Obsolescence, Investments, Retention of Talent and Expansion of
Facilities etc. Business Risk, inter-alia, further includes financial
risk, political risk, legal risk, etc. The Board reviews the risk
trend, exposure and potential impact analysis and prepares risk
mitigation plans, if necessary.
Further, in accordance with Clause 49 of the Listing Agreement, a Risk
Management Committee has also been formed which also oversees the Risk
Management of the Company.
The details of the Composition of the Risk Mnagement Committee are
given in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company is not required to contribute towards CSR under Section 135
of the Companies Act, 2013 read with Rules thereunder.
The Board of Directors of your Company, however, has constituted a CSR
Committee. The details of the Composition of the Corporate Social
Responsibility Committee are given in the Corporate Governance Report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations.
Based on the report of Internal Audit function, corrective action are
undertaken in the respective areas and thereby strengthen the controls.
Significant audit observations and corrective actions thereon are
presented to the Audit Committee of the Board.
During the year under review, no material or serious observation has
been received from the Internal Auditors of the Company for
inefficiency or inadequacy of such controls.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In line with the best Corporate Governance practices, Company has put
in place a system through which the Directors and Employees may report
concerns about unethical behaviour, actual or suspected fraud or
violation of the Company's Code of Conduct & Ethics without fear of
reprisal. The Employees and Directors may report to the Compliance
Officer and have direct access to the Chairman of the Audit Committee.
The Whistle Blower Policy is placed on the website of the Company.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORK- PLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an Anti Sexual Harassment Policy in line with
the requirements of the Sexual Harassment of Woman at Workplace
(Prevention, Prohibition and Redressal) Act, 2013. All woman employees
(permanent, contractual, temporary and trainee) are covered under this
Policy.
The following is a summary of Sexual Harassment complaints received and
disposed off during the year:
a) No. of Complaints received: Nil
b) No. of Complaints disposed off: Nil
DISCLOSURE UNDER SECTION 197 (12) OF THE COMPANIES ACT, 2013
The Company has not employed any individual whose remuneration falls
within the purview of the limits prescribed under the provisions of
Section 197 of the Companies Act, 2013, read with Rule 5(2) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014.
Disclosures pertaining to remuneration and other details as required
under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 are given below:
a. Ratio of the remuneration of each Director to the median
remuneration of the employees of the Company for the financial year:
Name of Ratio to Median
Director Remuneration
Shri K. K. Patodia 30.52:1
Shri Narayan Patodia 16.41:1
Shri Rajiv Patodia 15.69:1
b. Percentage increase in remuneration of each Director, Chief
Executive Officer, Chief Financial Officer, Company Secretary in
financial year:
Name of Person Designation % increase
in remune-
ration in
financial
yeaR
Shri K. K. Patodia Chairman and MD -
Shri Narayan Patodia Managing Director -
Shri Rajiv Patodia Executive Director -
and CFO
Shri Rahul Rawat Company Secretary 28.17
c. Percentage increase in the median remuneration of employees in the
financial year:
4.91%
d. The number of permanent employees on the rolls of the Company:
1,095 employees
e. Explanation on the relationship between average increase in
remuneration and Company performance:
On an average, employees received an annual increase of 6.45%. The
individual increments varied from 2.13% to 30.61%, based on individual
performance.
The increase in remuneration is in line with market trends. In order to
ensure that remuneration reflects Company performance, the performance
pay is also linked to organizational performance, apart from
individual's performance.
f. Comparison of the remuneration of the key managerial personnel
against the performance of the Company:
Aggregate remuneration of key
managerial personnel (KMP) in
FY 2014 - 2015 (Rs. in Lakhs) 97.26
Revenue (Rs. in Lakhs) 28,064.83
Remuneration of KMPs
(as % of revenue) 0.35
Profit Before Tax (PBT) (Rs. in Lakhs (336.99)
Remuneration of KMPs (as % of PBT) -
g. Variations in the market capitalization of the Company, price
earnings ratio as at the closing date of the current financial year and
previous financial year:
Particulars As at As at %
31/03/2015 31/03/2014 Change
Market Capitalisa-
tion (Rs. Lakhs) 1,723.72 1,671.22 3.14
Price Earnings
Ratio (3.69) 6.37 (157.93)
h. Percentage increase over decrease in the market quotations of the
shares of the Company in comparison to the rate at which the Company
came out with last public offer:
Particulars As at As at %
31/03/2015 31/03/1993* Change
Market Price (BSE) 19.70 21.54 (8.54)
Market Price (NSE) 20.05 21.54 (6.92)
* Adjusted for rights issue of 20,19,815 shares of face value Rs. 10
issued at Rs. 60 in the financial year 1992-1993.
i. Average percentile increase already made in the salaries of
employees other than the managerial personnel in the last financial
year and its comparison with the percentile increase in the managerial
remuneration and justification thereof and point out if there are any
exceptional circumstances for increase in the managerial remuneration:
The average annual increase was around 6.45% in the salaries of
employees.
Increase in the managerial remuneration for the year was 2.44%.
j. Comparison of each remuneration of the key managerial personnel
against the performance of the Company:
Name of Shri K. K. Shri Shri Shri
Person Patodia Narayan Rajiv Rahul
Patodia Patodia Rawat
Designation Chairman Managing Executive Company
and MD Director Director & Secretary
CFO
Remunera-
tion in FY
2014-2015
(Rs. in
Lakhs) 47.40 25.48 24.37 6.37
Revenue
(Rs. in
Lakhs) 28,064.83 28,064.83 28,064.83 28,064.83
Remunera-
tion as %
of revenue 0.17 0.09 0.09 0.02
Profit Before
Tax (PBT)
(Rs. in
Lakhs) (336.99) (336.99) (336.99) (336.99)
Remunera-
tion as %
of PBT - - - -
k. The key parameters for any variable component of remuneration
availed by the Directors:
None
l. The ratio of the remuneration of the highest paid Director to that
of the employees who
are not Directors but receive remuneration in excess of the highest
paid Director during the year:
None
m. Affirmation that the remuneration is as per the remuneration policy
of the Company:
The Company affirms remuneration is as per the remuneration policy of
the Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
During the year under review, the Company has not given any loans and
guarantees. Details of Investments covered under the provisions of
Section 186 of the Companies Act, 2013 are given in the notes to the
Financial Statements.
RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during the
Financial year were on an arm's length basis and were in the ordinary
course of business. There are no materially significant Related Party
Transactions made by the Company with Promoters, Directors, Key
Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large and hence,
enclosing of Form AOC-2 is not required. All Related Party Transactions
are placed before the Audit Committee as well as the Board for
approval. Prior omnibus approval of the Audit Committee is obtained for
the transactions which are of a foreseen and repetitive nature. The
transactions entered into pursuant to the omnibus approval so granted
are audited and a statement giving details of all Related Party
Transactions is placed before the Audit Committee and the Board of
Directors for their approval on a quarterly basis. The Company has
developed a Related Party Transactions Policy for the purpose of
identification and monitoring of such transactions.
The policy on Related Party Transactions as approved by the Board is
uploaded on the Company's website at www.eurotexgroup.com.
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Clause 49 of the Listing Agreement with the Stock
Exchanges, the Management Discussion & Analysis Report for the year
under review is given under a separate section and forms part of the
Annual Report.
PUBLIC DEPOSITS
The Company has not accepted or renewed any amount
falling within the purview of provisions of Section 73 of the Companies
Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014
during the year under review. Hence, the requirement for furnishing of
details of deposits which are not in compliance with the Chapter V of
the Act is not applicable.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134 (3) (a) of the Companies Act,
2013, Extract of the Annual Return for the financial year ended 31st
March, 2015 made under
the provisions of Section 92(3) of the Companies Act, 2013 in Form
MGT-9 is annexed herewith as "Annexure C".
ACKNOWLEDGEMENT
Your Directors wish to place on record their appreciation and thankful
acknowledgement for valuable assistance the Company received from all
Lending Bankers.
On behalf of the Board
K. K. PATODIA
Place: Mumbai Chairman
Date : 23rd May, 2015 and Managing Director |