| Dear Shareholders,
We have pleasure in presenting the 17th Annual Report of the Company
and the audited statement of accounts for the year ended 31st March,
2014. A summary of the financial results is given below.
FINANCIAL RESULTS
('000) ('000)
Year ended Year ended
on On
31/03/2014 31/03/2013
Gross sales including other income 1,76,947 1,70,598
Gross Profit (Loss) 63.871 53,791
Depreciation 18.744 37,619
Profit/Loss for the year 45,127 20,817
MANAGEMENT DISCUSSION AND ANALYSIS
Textile industry plays a pivotal role in India's economy. It
contributes 14% to India's industrial production, 4% to the GDP and 17%
to export earnings. It provides employment to 35 million people.
Recognizing such a pivotal role the Government has been taking many a
steps to minimize the effect of economic slowdown faced by the industry
during the year under reference.
You are aware that in spite of acute financial crisis your Company has
been able to sustain its operations to avoid damage to plant and
machinery. The Company has settled the accounts of all the three banks,
namely IDBI Bank, Bank of Baroda and UCO Bank. The dues of IDBI Bank
and Bank of Baroda have been assigned to M/s. U V Asset Reconstruction
Company Limited and the dues of UCO bank have been taken over by M/s.
ASREC (India) Ltd. The borrowings from Asset Reconstruction Companies
(ARCs) are at higher cost and at best can be used only as a temporary
means of finance.
Market conditions for cotton textiles have not been conducive during
2013-14. On account of general economic slowdown and lower GDP, the
markets have been sluggish. As we have been working with heavy
constraints, our operations did not yield positive results. The
settlement of UCO Bank account has resulted in write back of part loans
and interest and is reflected in the accounts.
Your Company also attracts provisions of Section 23 (1) (a) (i) of The
Sick Industrial Companies Act, 1985 due to erosion of Net worth.
MANAGEMENT PERCEPTION OF RISK AND CONCERN
1. Agriculture in India is still dependent on rains for irrigation As
agriculture contributes substantially to our GDP, any downfall in agri
production affects economy. Monsoon this year has not been up to the
mark and large areas particularly in cotton growing regions have not
received adequate rains. It will have its impact not only on quality of
cotton but also on its prices during the current year. Consumption of
manmade fibres is still low in our country as compared to global
standards.
2. China has been a major buyer for Indian textiles - yarn and fabrics.
This year China is reported to have decided to reduce import of
textiles to encourage domestic production and this decision is showing
its impact on the industry
3. However, your Company is taking all possible steps to augment its
production levels irrespective of general economic conditions.
INTERNAL CONTROL SYSTEM
Your Company has developed a well defined internal control system over
a period which meets its requirement. The system is reviewed
periodically to keep with the times and ensure optimal utilization and
protection of company's resources. Audit Committee of the Board
monitors the internal control system.
HUMAN RESOURCES/INDUSTRIAL RELATIONS
Your Company encourages innovation and performance. It appreciates and
values the Human asset of the Company. In spite of difficult situation
on operational front, the morale of employees is high and they have
been working hard to turn the tide in favour of better working of your
Company. The Company has developed an environment of harmonious and
cordial relations with its employees.
As the Company is in Textile business only, segment reporting is not
required.
DIVIDEND
No dividend is being recommended for the year under review in view of
the accumulated losses. DIRECTORS' RESPONSIBILITY STATEMENT
On the basis of compliance certificates received from the concerned
executives of the Company and subject to disclosures in the annual
accounts, as also on the basis of the discussion with the Statutory
Auditors of the Company from time to time, as required under Section
217(2AA) of the Companies Act 1956, the Directors hereby confirm that:
i) in the preparation of the annual accounts, the applicable accounting
standards have been
followed along with proper explanation relating to material departures;
ii) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the Profit of
the Company for that period ;
iii) the Directors have taken proper and sufficient care to the best of
their knowledge and ability for the maintenance of adequate accounting
records in accordance with provisions of this Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other
irregularities, if any ;
iv) the Directors have prepared the annual accounts on a going concern
basis.
DIRECTORS
Mr.Akash B. Shah, Director, retires by rotation and being eligible, has
offered himself for re-appointment.
The Board at its meeting held on 04.09.2014 recommended appointment of
Mrs. Shakuntala Vyas, as non executive, non-independent Director of the
Company whose period of office is liable to determination by retirement
of directors by rotation and in respect of whom the Company has
received a notice in writing from a member proposing her candidature
for the office of Director.
The Board recommends the resolutions for your approval for the above
appointments.
OTHER INFORMATION Auditors
M/s G. Dutta & Co., Chartered Accountants, (ICAI Registration No.
002136 'C') who are Statutory Auditors of the Company will hold office
till the conclusion of the ensuing Annual General Meeting and are
recommended for re-appointment to audit the accounts of the Company for
the Financial Year 2014-15. As required under the provisions of Section
139 of the Companies Act, 2013 the Company has obtained written
confirmation from M/s G. Dutta & Co., Chartered Accountants, that their
appointment, if made, would be in conformity with the limits specified
in the said Section.
The observations made by the Auditors in their Report are adequately
explained in the notes to the Accounts and significant Accounting
Policies and need no further elaboration.
Cost Auditor & Cost Audit Report
During the year, Pursuant to the directives of the Central Government
under the provisions of Section 233B of the Companies Act, 1956, read
with The Companies (Cost Accounting Records) Rules, 2011 Board
appointed, Mr. Pawan Gupta & associates, Cost Auditor to conduct cost
audits relating to textile products manufactured by the Company.
Information as per section 217 (2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975:
None of the employee was in receipt of remuneration in excess of limit
prescribed under Section 217 (2A) of the Companies Act, 1956.
Energy Conservation, Technology Absorption & Foreign Exchange
A statement giving details of conservation of energy, technology
absorption, foreign exchange earnings and outgo, in accordance with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is annexed and marked Annexure 'A' and forms
part of this Report
CORPORATE GOVERNANCE
A separate report on Corporate Governance is enclosed as a part of this
Annual Report. A certificate from the Auditors of the Company regarding
compliance with Corporate Governance norms stipulated under Clause 49
of the Listing Agreement is annexed to the Report on Corporate
Governance.
CASH FLOW ANALYSIS
In conformity with the provisions of clause 32 of the Listing Agreement
the Cash Flow Statement for the year ended 31.03.2014 is annexed
hereto.
ACKNOWLEDGEMENT
The Board acknowledges with deep sense of gratitude for the valuable
assistance and cooperation extended and guidance provided by Government
Authorities, Banks, financial institutions, Business associates and
looks forward for their continued support. Your Directors are also
grateful to the customers & suppliers for their trust and support. Your
Directors would like to appreciate dedication and hard work put in by
every employee of your company. Last but not the least, your Directors
are deeply grateful for the confidence and faith shown by the members
of the Company in them.
For and on behalf of the Board,
Sd/- Sd/-
S.K.Singhal S.G.Vyas
Director Managing Director
(DIN-00075934) (DIN-01905310)
Jaipur
04.09.2014
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