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Pasupati Spinning & Weaving Mills Ltd.

BSE: 503092 Sector: Industrials
NSE: PASUPATSPG ISIN Code: INE909B01020
BSE LIVE 12:35 | 25 Sep 20.00 -0.70
(-3.38%)
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20.00

HIGH

20.00

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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 20.00
PREVIOUS CLOSE 20.70
VOLUME 5
52-Week high 23.00
52-Week low 14.00
P/E 41.67
Mkt Cap.(Rs cr) 19
Buy Price 0.00
Buy Qty 0.00
Sell Price 20.00
Sell Qty 495.00
OPEN 20.00
CLOSE 20.70
VOLUME 5
52-Week high 23.00
52-Week low 14.00
P/E 41.67
Mkt Cap.(Rs cr) 19
Buy Price 0.00
Buy Qty 0.00
Sell Price 20.00
Sell Qty 495.00

Pasupati Spinning & Weaving Mills Ltd. (PASUPATSPG) - Director Report

Company director report

TO THE MEMBERS

Your Directors have pleasure in presenting their Report together with the AuditedAccounts for the year ended 31st March 2015.

FINANCIAL RESULTS

Particulars 2014-15 Rs./Lacs 2013-14 Rs./Lacs
Sales and other Income 20658.50 21093.31
Profit before Finance Costs and Depreciation 1080.88 1122.92
Financial Charges 660.66 729.74
Depreciation 402.51 335.50
Profit before Taxes 17.71 57.68
Payment/Provision for Taxation (1.09) 4.75
Profit after Taxation but before extra-ordinary items 18.80 52.93
Extra-ordinary items (99.41)
Net Profit after extra-ordinary items 18.80 (46.48)

COMPANY’S PERFORMANCE

During the year under review although the turnover of the company marginally declinedby 2.06% the profit before taxes declined to Rs.17.71 lacs from Rs. 57.68 lacs. Themarginal decline in turnover is mainly attributable to sudden decline in exports. Duringthe year under review the company made exports to the tune of Rs. 3666.24 Lacs as againstexports of Rs. 4502.40 Lacs made during previous financial year showing a decline of18.57%. The profit before taxes declined because the company’s spinning unit whichwas restarted from August 2013 incurred losses during the year. The said unit has startedgenerating cash profit only from the last quarter of the year under review.

THE MANAGEMENT DISCUSSION & ANALYSIS

Spinning Unit at Dharuhera Haryana

The production activities in this unit were re-started from 31.8.2013. However due toinitial teething troubles the production activities could be streamlined in March 2014but the unit started generating cash profit only from the last quarter of FY 2014-15. Inorder to meet the growing competition in cotton yarn market the company had decided to gofor value addition by producing doubled yarn for which the company decided to procureeight new TFOs and two Cheese Winding machines and also made advance payment to thesupplier. State Bank of Travancore (SBOT) had also sanctioned a Term Loan of Rs.180 Lacsfor purchase of these machines. However due to delay in obtaining NOC from some of theconsortium member banks the said loan could not be disbursed. As a result the machinerysupplier diverted the machine to some other supplier. Since the next delivery period ofthe machines was very long the company decided to procure/import state-of-the-artCircular Knitting Machine to manufacture fine quality fabric out of cotton yarn (i.e.forward integration) which will result in better value addition. SBOT has also approvedthe change of machine and advance to the machinery supplier has been made through partialdisbursement of loan. The machines are expected to be ready for delivery by October 2015.With the addition of the machine the profitability of the spinning unit is expected toimprove.

Knitting & Garment unit at Dharuhera Haryana

The production activities of the Fabric/Garment Division at Dharuhera are going onsmoothly. The company is achieving average monthly turnover of Rs.2 Crore from this unit.The company is supplying garments for well known brands i.e. Future Group Reliance TrendPantloon Retail Spencer and Bharti Wallmart etc. Besides the company is also exportinggarments.

Sewing Thread Unit At Kala Amb Himachal Pradesh

During the year under review the capacity utilisation remained a cause of concern dueto labour shortage problem. Although the company was able to largely overcome the labourshortage problem from January 2015 but after Holi festival the situation has againdeteriorated. The situation is gradually improving and it is expected that the situationwill be back to normal by next month. The company has been exporting significantpercentage of its production and more than 90% of the same was being exported to Turkey.However due to some internal problem in Turkey our exports have virtually stopped duringlast quarter of the year under review. Therefore the company has increased domestic salesduring the same period. However the realisation period in domestic sales ranges from 90days to 120 days which has created stress on working capital. The situation is expectedto improve gradually once the realisation cycle is complete. It is not out of place tomention here that margins in domestic market are better than export market.

DIVIDEND

In view of the requirement of fund for working capital of the company the Board ofDirectors is not in a position to recommend any dividend for the year under review.

DIRECTOR’S RESPONSIBILITY STATEMENT:

In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:

i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.

ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for the year under review.

iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.

iv) The directors have prepared the annual accounts on a going concern basis.

v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

vi) The directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.

STATUTORY AUDITORS

During the year under review the auditors need no rotation as they can continue asauditors for a period of two more years i.e. up the year 2017. M/s. B.K. Shroff & Co.Chartered Accountants who are the statutory auditors of the Company hold office till theconclusion of the forthcoming AGM and are eligible for re-appointment. Pursuant to theprovisions of Section 139 of the Companies Act 2013 and the Rules framed thereunder itis proposed to appoint M/s. B.K. Shroff & Co. as statutory auditors of the Companyfrom the conclusion of the forthcoming AGM till the conclusion of the thirty seventh AGMto be held in the year 2017 subject to ratification of their appointment at every AGM.

INTERNAL CONTROL SYSTEMS

Your Company has evolved a system of internal controls to ensure that the assets aresafeguarded and transactions are autho-rised recorded and correctly reported. Theinternal control system is supplemented by management reviews and independent periodicalreviews by the outside chartered accountancy firms which evaluate the functioning andquality of internal controls and provides assurance of its adequacy and effectiveness. Thescope of internal audit covers a wide variety of operational methods and as a minimumensures compliance with specified standards with regard to availability and suitability ofpolicies and procedures extent of adherence reliability of management information systemand authorization procedures including steps for safeguarding of assets. The reports ofinternal audit are placed before Audit Committee of the Directors and Board. AuditCommittee and board reviews such audit findings and the adequacy of internal controlsystems. The Statutory Auditors and the Internal Auditors of the Company also interactwith the Audit Committee and Board to share their findings and the status of correctiveactions under implementation.

M/s. M.C. Jain & Co. Chartered Accountants New Delhi were appointed as InternalAuditors of the Company for the Financial Year 2014-15 and their reports for the year weresubmitted to the Audit Committee and to the Board.

COST AUDIT

The Central Govt has approved the appointment of M/s Avtar Singh & Co. as costauditors for conducting Cost Audit for the Financial Year 2014-15 The report of CostAuditors in respect of audit of the cost records of the Company for the year ended 31stMarch 2015 will be submitted to the Central Government in due course.

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 Company hasappointed M/s Suchita Gupta & Co. a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit isannexed herewith as Annex-ure-A.

AUDITORS’ OBSERVATIONS

Auditors’ observations relating to Note no. 12 as contained in the Main Reportunder the para ‘Basis of Qualified Opinion’ are explained hereunder: -Althoughthe company has made representation to the competent authority for payment of compensationat market rate in respect of part of company’s factory land acquired by Government ofHaryana the company feels that final decision in this regard may take a very long timeand moreover there is uncertainty about the success of company’s representation.Hence it has been decided that its affect would be given in company’s books as andwhen actual compensation is received from Government of Haryana.

DEPOSITS

During the year the Company did not accept any deposits from the public within themeaning of Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

During the year under review company has not given any loans Guarantee or made anyinvestments covered under the provisions of Section 186 of the Companies Act 2013.

SUBSIDIARY COMPANIES:

The Company does not have any subsidiary

BUSINESS RISK MANAGEMENT

Pursuant to the requirement of Clause 49 of the Listing Agreement the Company hasconstituted a Risk Management Committee. The details of the Committee and its terms ofreference are set out in the Corporate Governance Report forming part of the Board’sReport. On the recommendation of the Risk Management Committee the Board has adopted RiskManagement Policy which outlines the program implemented by the Company to ensureappropriate risk management within its system and culture. The Risk Management Policy isalso posted on the website of the Company. The Company’s risk management programcomprises of a series of processes structures and guidelines which assist the Company toidentify assess monitor and manage its business risks including any material changes toits risk profile. To achieve this the Company has clearly defined the responsibility andauthority of the Company’s Board of Directors and of the Risk Management Committee tooversee and manage the risk management program while conferring responsibility andauthority on the Company’s senior management to develop and maintain the riskmanagement program in light of the day to day needs of the Company. Regular communicationand review of risk management practices provide the Company with important checks andbalances to ensure the efficacy of its risk management program.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/ Courts whichwould impact the going concern status of the Company and its future operations.

DIRECTORS

(i) Retirement by rotation

In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Mrs. Vrinda Jain retires by rotation and is eligible forreappointment. The brief resume(s) of the all Directors proposed to be appointed orreappointed at the ensuing AGM as required in terms of Clause 49 of the Listing Agreementwith the stock exchanges is provided in the annexure(s) to the notice of Annual GeneralMeeting.

(ii) Resignation of Director:- During the year Mr. S.K.Chaajer whole TimeDirector of the company resigned from the Board on 30-6-2014.

(iii) Declarations by Independent Directors

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Clause 49 ofthe Listing Agreement.

(iv) Board Evaluation

In compliance with the provisions of the Companies Act 2013 and Clause 49 of theListing Agreement the Board has carried out an annual performance evaluation of its ownperformance the directors individually as well as the evaluation of the working of itsNomination & Remuneration Committee. The manner in which the evaluation has beencarried out has been explained in the Corporate Governance Report.

(v) Nomination & Remuneration Policy

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a Policy for selection appointment and remuneration of Directors and KeyManagerial Personnel. More details of the same are given in the Corporate GovernanceReport.

(vi) Board Meetings

During the year four (4) Board Meetings and four (4) Audit Committee Meetings wereconvened and held. The details are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The information relating to conservation of energy technology absorption and foreignexchange earnings & outgo as required under Section 134(3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is Annexed herewith asAnnexure-B.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure-C

PARTICULARS OF EMPLOYEES

The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 requiring particulars of the employees in receipt ofremuneration in excess of Rs.60 lacs per year to be disclosed in the Report of Board ofDirectors are not applicable to the Company as none of the employees was in receipt ofremuneration in excess of Rs.60 lacs during the financial year 2014-15.

The information in accordance with the provisions of Section 197 of the CompaniesAct2013 read with rule 5 of the Companies ( Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed as Annexure-D.

CORPORATE GOVERNANCE

The Company has been in compliance with all the conditions of Corporate Governance asstipulated in Clause 49 of the Listing Agreement with Stock Exchange and a certificatefrom the Auditors to this effect is made part of the Annual Report. Committed to thepractice of good Corporate Governance the Board lays strong emphasis on transparencyaccountability and integrity with its ‘Governance Committee’ specificallyassigned the task of analysing the clause with respect to good governance practice. Interms of such sub clause (v) of Clause 49 of Listing Agreement Certificate of CEO/CFOinter alia confirming the correctness of the financial statements adequacy of theinternal control measures and reporting of matters to the Audit Committee in terms of thesaid clause is also enclosed as a part of said Report.

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

In order to prevent sexual harassment of women at work place a new act The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified on 9th December 2013. Under the said Act every company is required to setup an Internal Complaints Committee to look into complaints relating to sexual harassmentat work place of any women employee. Company has adopted a policy for prevention of SexualHarassment of Women at workplace and has set up Committee for implementation of saidpolicy. During the year Company has not received any complaint of harassment.

ACKNOWLEDGEMENT

Your Directors convey their sincere thanks to the various agencies of the CentralGovernment State Governments Banks and other concerned agencies for all the help andcooperation extended to the Company. The Directors also deeply acknowledge the trust andconfidence the shareholders and investors have placed in the Company. Your Directors alsorecord their appreciation for the dedicated services rendered by the workers staff andofficers of the Company

For And on Behalf of Board of Directors

Sd/-Ramesh Kumar Jain

Chairman & Managing

Director Place : New Delhi

Dated : 14-8-2015