DIRECTORS' REPORT FOR THE FINANCIAL YEAR 2016-2017
Your Directors have pleasure in presenting their 29th Annual Report on the business andoperations of the Company together with the Audited Statement of Accounts for the yearended 31st March 2017
During the year under review financial performance of your Company was as under:
|Particulars ||31st March 2017 ||31st March 2016 |
| ||(Rs. In Lakh) ||(Rs. In Lakh) |
|Total Income ||11869.83 ||12637.04 |
|Profit/(Loss) before Interest and Depreciation Before prior period adjustment ||(1365.41) ||417.33 |
|Previous year adjustments & Extra Ordinary Items ||58.50 ||408.70 |
|Profit / (Loss) before Interest and Depreciation ||(1423.91) ||8.63 |
|Less : Interest for the year ||5361.16 ||5362.78 |
|Profit / (Loss) before Depreciation ||(6785.07) ||(5354.15) |
|Less: Depreciation ||449.33 ||373.69 |
|Profit /(Loss) before Tax ||(7234.40) ||(572784) |
|Profit /(Loss) from Discontinued Operation ||(108.42) ||- |
|Profit /(Loss) after Discontinued Operation ||(7342.82) ||- |
|Less : Provision for taxation ||- ||- |
|Profit / (Loss) after Tax for the year ||(7342.82) ||(5727 84) |
|Add: Balance Brought Forward from the Previous year ||(106231.09) ||(100503.25) |
|Profit/(Loss) carried to Balance Sheet ||(113573.91) ||(106231.09) |
STATE OF COMPANY'S AFFAIRS :
During the year under review total revenue reduced to Rs11869.83 Lakhs as againstRs12637.04 Lakhs in the previous year. There was a Cash loss to the tune of Rs.13.65Crores as against Cash Profit of Rs.4.17 Crores before interest & depreciation in theprevious year. Overall performance of the textile industry in India continued to be underpressure mainly due to increased prices of raw materials and other input cost whichresulted in lower Sales revenue & impact on profit.
BUSINESS/FUTURE OUTLOOK :
Demand for textile products have been stagnant on a global basis and have consequentlyaffected the Companies in India as well. Coupled with this high inflation costs andsporadic fiscal instability in certain global markets was a cause of concern. However theCompany is optimistic about the future owing to its determined efforts to make itspresence felt in the global scenario as well as to simultaneously develop domestic market.
PROCESS OF RESTRUCTURING :
Under the provisions of Securitisation and Reconstruction of Financial Assets andEnforcement of Security Interest Act 2002 (SARFAESI Act) ARCIL had taken over possessionof the secured assets of the Company's plants and has handed over the possession toIndoworth India Limited by virtue of an inter se agreement between ARCIL and IndoworthIndia Limited. Dispute arose between ARCIL and Indoworth India Limited (IWIL) which leadto filing of a Suit for specific performance by IWIL before the Hon'ble High Court ofCalcutta
wherein Company was also impleaded as a party. Besides the said Suit various otherproceedings were also initiated before the other forums. ARCIL IWIL and the Company havearrived at settlement and after making substantial payments by IWIL and the partialbalance payment to be made as per the Agreement. The said Suit has been disposed off asper term of settlement. In view of the settlement between the parties IWIL being inpossession of the assets pursuant to the Agreement between the parties is continued tohold the assets. The necessary adjustments in the financial statements if required wouldbe made upon final adjudication of the other proceedings pending adjudication before otherforum. The Company's business continued throughout the year as usual.
CHANGES IN SHARE CAPITAL :
During the Financial Year 2016-17 there have been no changes in the share capital ofthe Company.
DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS :
The Company has not issued any Equity Shares with differential Rights during thefinancial year.
DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS :
The Company has not issued any Employee Stock Options during the financial year.
DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES :
The Company has not issued any Sweat Equity Shares during the financial year.
MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY :
No material changes affecting the financial position of the Company occurred betweenthe end of the financial year to which this financial statements relate on the date ofthis report.
In view of huge accumulated losses the Directors regret their inability to recommendany dividend for the Financial Year 2016-17.
Your Company has not accepted any deposit within the meaning of deposits covered underChapter V of the Companies Act 2013.
DIRECTORS RESPONSIBILITY STATEMENT :
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:
i. in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
ii. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;
iii. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. they have prepared the annual accounts on a going concern basis;
v. they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively exceptdeficiencies in operating effectiveness in respect of old outstanding of tradereceivables advances to parties and some old creditors for expenses;
vi. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL :
Mr. T. C. Jain (DIN: 07144151) retire by rotation at the ensuing Annual GeneralMeeting and being eligible offer himself for re-appointment.
During the Financial Year 2016-17 Ms. Parinita Goenka has been appointed as CompanySecretary w.e.f. 8th February 2017 and Ms. Neha Dugar has resigned as Company Secretaryw.e.f. 8th February 2017. Since the lastAnnual General Meeting Mr S N. Shenwai (DIN:01716415) has resigned as Executive/Whole- time Director of the Company w.e.f. 14.08.2017.
Mr. Rajesh Singh (DIN: 07906684) has been appointed as an Additional Director andsubsequently designated as Executive/Whole-time Director of the Company w.e.f. 14.08.2017.Appropriate Resolution seeking your approval for his appointment is appearing in theNotice convening the Annual General Meeting.
DECLARATION BY INDEPENDENT DIRECTOR :
Pursuant to Section 149(7) of the Companies Act 2013 Independent Directors of theCompany have made a declaration confirming the compliance of the conditions of theindependence stipulated in Section 149(6) of the Act.
PARTICULARS OF LOAN GUARANTEES AND INVESTMENTS UNDER SECTION 186 :
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 forms part of the Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES :
Related party transactions that were entered during the financial year were on arm'slength basis and in the ordinary course of business. There were no materially significantrelated party transactions which were in conflict of the Company.
AMOUNTS TRANSFERRED TO RESERVES :
In view of huge accumulated losses and current year's losses your Directors wereunable to transfer any amount to the General Reserve Account.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The details pertaining to conservation of energy technology absorption foreignexchange earnings and outgo are provided as Annexure I which forms part of this report.
RISK MANAGEMENT POLICY :
In terms of Section 134 (3) (n) of the Act the Board of Directors has adopted acomprehensive risk management policy which includes identification of element of risk itsmitigation and other related factor. The Board periodically review the same. In view ofParagraph 4.1 of SEBI Circular CIR/CFD/POLICY CELL/2/2014 dated 17th April 2014 no RiskManagement Committee has been constituted since it is not covered by the requirements ofthe above-mentioned Paragraph.
CORPORATE SOCIAL RESPONSIBILITIES :
The provisions of Section 135 of the Act in connection with Corporate SocialResponsibility are not applicable to the Company since the Company falls below thethreshold limits.
BOARD EVALUATION :
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015 the Board of Directors has carried out anannual evaluation of its own performance Board committees and individual directorspursuant to the provisions of the Act. The performance of the Board was evaluated by theBoard after seeking inputs from all the directors on the basis of the criteria such as theBoard composition and structure effectiveness of board processes information andfunctioning etc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.
In a separate meeting of independent Directors performance of non-independentdirectors performance of the Board as a whole and elected Chairman of the each meetingwas evaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent Directors at which the performance of the Board its committees andindividual directors was also discussed.
The Nomination and Remuneration Committee as specified u/s 178 of the CompaniesAct 2013 was formed with a view to reviewing and making recommendations on annualsalaries performance commissions perquisite and other employment conditions ofExecutives and Officials. The Committee's also takes into consideration remunerationpractices followed by leading Companies as well as information provided by reputedconsultants while determining the overall remuneration package.
During the year under review the Nomination and Remuneration Committee met 2(two) times details of the meeting have been given in Corporate Governance Report whichforms part of this report
The following are the members of the Committee at present:
|Name ||Designation * ||Executive/Non-Executive/Independent |
|Mr. Kishore Jhunjhunwala ||Member ||Non- Executive & Independent |
|Mrs. Silpi Chakraborty ||Member ||Non- Executive & Independent |
|Mr. Tara Chand Jain ||Member ||Non- Executive & Non-Independent |
* Members present at the meeting elect one of themselves as Chairman of the Meeting.
RATIO OF REMUNERATION OF EACH DIRECTOR TO THE MEDIAN REMUNERATION OF THE EMPLOYEES
The information as required under Section 197 of the Companies Act 2013 read with Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isavailable. In terms of Section 136 (1) read with its relevant provisions of the CompaniesAct 2013 the Annual Report excluding the aforesaid information is being sent to theMembers of the Company and others entitled thereto. The said information shall be keptopen for inspection at the Registered Office of the Company on every working day of theCompany between 10 a m. to 12 noon up to the date of the forthcoming 29th Annual GeneralMeeting
CORPORATE GOVERNANCE REPORT:
A Report on Corporate Government together with a Certificate from the Auditors oncompliance thereof required under Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed hereto and forms a part of this report.
MANAGEMENT DISCUSSION ANALYSIS REPORT :
The Management Discussion and Analysis Report for the year under review as stipulatedunder SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with theStock Exchanges in India is presented in a separate section which forms part of theAnnual Report.
NUMBER OF BOARD MEETINGS :
During the Financial Year 2016-17 the Board of Directors of the Company met fivetimes details of the meetings has been given in the Corporate Governance Report whichforms part of this report.
AUDIT COMMITTEE :
The observations made by Auditors in their Auditor's Report with reference to notes tofinancial statements are self explanatory and need no comments forms part of this report.
STAKEHOLDERS RELATIONSHIP COMMITTEE :
The Details pertaining to composition of Stakeholders Relationship Committee areincluded in the Corporate Governance Report which forms part of this report.
AUDITORS' REPORT :
The observations made by Auditors in their Auditor's Report with reference to notes tofinancial statements are self explanatory and need no comments forms part of this report.
INTRODUCTION OF INDIAN ACCOUNTING STANDARDS (IND AS):
As per the Directions issued by Ministry of Corporate Affairs the companies and theirauditors shall comply with Indian Accounting standards for the accounting periodsbeginning on or after 1st April 2017 with comparatives for the periods ending on 31stMarch 2017 for companies whose equity or debt securities are listed or in the process ofbeing listed on any stock exchange in India or outside India and having networth of lessthan Rs. 500 Crores. The Company has already implemented the same.
STATUTORY AUDITORS :
The Company's auditors M/s. R B S C & Co. (formerly M/s. S. S. Kothari & Co)(Firm Registration Number 302034E) have already completed more than ten years as StatutoryAuditors of the Company.
In accordance with provisions of Section 139 of the Companies Act 2013 and theCompanies (Audit and Auditors) Rules 2014 regarding mandatory rotation of auditorrequirement it is proposed to appoint M/s. Khandelwal Ray & Co. (Firm RegistrationNumber 302035E) as Statutory Auditors for a period of 5 continuous years i.e. from theconclusion of 29th Annual General Meeting till the conclusion of 34th Annual GeneralMeeting of the Company to be held in the financial year 2022-23.
M/s. Khandelwal Ray & Co. have informed the Company that their appointment if madewould be within the limits prescribed under Section 141 of the Companies Act 2013.
M/s. Khandelwal Ray & Co. have also furnished a declaration confirming theirindependence as well as their arm's length relationship with the Company and declared thatthey have not taken up any prohibited non-audit assignments for the Company.
APPOINTMENT OF INTERNAL AUDITOR :
The Company has appointed M/S. Sakshi Aggarwal & Co. Chartered Accountants as anInternal Auditor of the Company for the financial year 2017-18.
COST AUDITOR :
Your Company had appointed M/s Sanat Joshi & Associates Cost Accountants as CostAuditors with the approval of the Central Government for audit of cost recordsmaintained by the Company for the financial year 2017-18
SECRETARIAL AUDITOR :
In terms of Section 204 of the Companies Act 2013 the Board of Directors at theirmeeting held on 30th May 2017 have appointed M/s K K Sanganeria & AssociatesPracticing Company Secretaries as Secretarial Auditor for conducting Secretarial Auditof the Company for the Financial Year 2017-18. Report of the Secretarial Auditor for thefinancial year ended 31.03.2017 is given as "Annexure II" which forms part ofthis report.
BOARDS VIEW :
The dues of the majority of lenders stands settled through Indoworth India Limited videorder of Hon'ble High Court of Calcutta while dues of other lenders are in dispute andthe matters are subjudice before the Tribunals/ Forums. The loss and damages caused to theborrower by the lender is much more than the amount lent. Hence figures of the borrowedamount shown in the balance sheet after due adjustments with the said loss and damages mayresult in entitlement to recover substantial amount from the lender. Under these facts andcircumstances the figures of borrowed amount in this balance sheet cannot be consideredas admission if any of the claim of lender(s).
EXTRACT OF ANNUAL RETURN :
The extract of Annual Return in format MGT -9 for the Financial Year 2016-17 has beenenclosed with this report as "Annexure III".
SUBSIDIARY COMPANIES :
The Company does not have any subsidiary company.
DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL :
The disputes pending under civil suit being CS No. 62 of 2003 titled as "IndoworthIndia Limited vs ICICI Bank Limited & Ors." have been settled and in accordancewith the terms of settlement judgment/decree dated 24.03.2017 was passed by the Hon'bleHigh Court of Calcutta. The suit being CS No. 62 of 2003 along with the pendingapplications has been disposed off.
Save and except above no significant & material order has been passed by theRegulators or Courts or Tribunal in any other case.
STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THEFINANCIAL STATEMENTS :
The Company has adequate internal control procedures commensurate with the size scaleand complexity of its operations which are well supplemented by surveillance of InternalAuditors.
DISCLOSURE ON ESTABLISHMENT OF A VIGIL MECHANISM :
In pursuant to the provision of Section 177(9) & (10) of the Companies Act 2013the Company has formulated a Whistle Blower Policy to establish a vigil mechanism forDirectors and employees of the Company to report concerns about unethical behavior actualor suspected fraud or violation of the company's code of conduct or ethics policy. TheWhistle Blower Policy is available on the website of the Company i.e www.uniworth.com
HEALTH SAFETY AND ENVIRONMENT PROTECTION :
The Company has complied with all the applicable environmental law and labour laws. TheCompany has been complying with the relevant laws and has been taking all necessarymeasures to protect the environment and maximize worker protection and safety.
POLICY ON PREVENTION OF SEXUAL HARASSMENT :
The Company is committed to provide a safe and conducive work environment to itsemployee and has formulated "Policy for Prevention of Sexual Harassment".
During the financial year ended 31st March 2017 the Company has not received anycomplaints pertaining to Sexual Harassment.
There was no fraud reported by the Auditors of the Company under Section 143(12) of theCompanies Act 2013 to the Audit Committee or the Board of Directors during the yearunder review.
PARTICULARS OF EMPLOYEES :
During the period under review no employee of the Company drew remuneration in excessof the limits specified under the provisions of Section 197(12) of the Companies Act readwith Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and hence no disclosure is required to be made in the AnnualReport.
Your Directors acknowledge with gratitude the co-operation and assistance received fromthe Central and State Government Financial Institutions Banks Shareholders and othersduring the year under review.
| || ||On Behalf of the Board |
| ||Rajesh Singh ||T. C. Jain |
| ||Executive Director ||Director |
| ||DIN:07906684 ||DIN:07144151 |
|Place : Kolkata || || |
|D.ate: 25th August 2017 || || |