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Uniworth Textiles Ltd.

BSE: 500138 Sector: Industrials
NSE: FABWORTH ISIN Code: INE486C01019
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Uniworth Textiles Ltd. (FABWORTH) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting their 24th Annual Report on the business andoperations of the Company together with the Audited Statement of Accounts for the yearended 31st March 2016.

Financial highlights

During the year under review performance of your Company as under:

31st March 2016 31st March 2015
(Rs In Lacs) (Rs In Lacs)
sales 2692.66 2992.99
Profit/(Loss) before Interest and Depreciation & before prior period adjustment previous year 1297.24 (529.96)
Adjustment & Extra ordinary Income 125.37 34.91
Profit/(Loss) before Interest and Depreciation (1422.61) (564.87)
Less: Finance Cost 993.54 967.12
Profit / (Loss) before Depreciation (2416.15) (1531.99)
Less: Depreciation 45.29 45.76
Profit / (Loss) before Tax (2461.44) (1577.75)
Provision for taxation - -
Net Profit /(Loss) after Tax for the Year (2461.44) (1577.75)
Add: Balance b/f from the previous year (24148.26) (22570.51)
Balance carried to Balance sheet (26609.70) (24148.26)

State of company’s affairs and future outlook:

India textile Industry is one of the leading textile industries in the world. though itwas predominantly unorganized industry even a few years back but the scenario startedchanging after the economic liberalization of Indian economy in 1991. the opening up ofeconomy gave the much-needed thrust to the Indian textile industry.

The Company was incorporated in 1992 and have much market share in worsted suiting inIndia. the Company is also making fresh and enthusiastic efforts to improve itsperformance in the world market particularly Europe Japan and the Middle East Countries.

Due to continued economic recession and crisis in textile markets and as a resultthereof turnover decreases marginally to Rs. 26.93 crores as against Rs. 29.93 crores inthe previous year. However the Company’s effort over the past years to enhance itspresence in the Domestic sector bore fruit and by penetrating the Institutional segmentthere was a significant rise in Domestic Sales.

Due to overall decrease in turnover and increase in input costs the Company sufferingcash loss. During the year under Review the Company continued to be as a Sick IndustrialUndertaking as the Hon’ble High Court of Calcutta vide order dated 08.11.2013 passedin w.p. No. 31462 ( w.p.) of 2013 has held that order of abatement passed by AAIFR cannotattain finality till S.A. No. 03 of 2012 is decided by Debt Recovery tribunal Nagpur. Thematter is sub-judice before the Court of Law.

BUSINESS OUTLOOK :

The inherent strengths of the textile industry have seen the textile industry throughrough days and hard times.

The world trading system have endangered the stability of the textile industry andcreated an atmosphere of uncertainty and turbulence in the industry. But it is also a factthat turbulence is necessary for any change in the system. In a World that is fast losingits traditional boundaries and borders are becoming invisible there is need to bringabout technological improvement structural changes liberalisation from controls andregulations increased productivities of labour and machine and reliable quality assurancesystems. If there is insecurity inherent in the globalised economy there is alsoopportunity - opening up of vast markets to Indian textiles and Indian clothing that wereearlier closed or regulated and Indian textile industry is ready to take up thisopportunity of free trade and secure its well deserved position in the internationaltextile arena.

The Economic crisis is continuing to affect the order situation adversely. The on-goingcompetition with China is also making it difficult to generate fresh business. AlthoughChina is the number one apparel export country and the Chinese-made fabrics are still notsatisfactory in respect of color texture quality etc. To be more competitive in thedomestic market the management is pursuing with the Government Authorities for De-bondingof our processing unit.

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.

CHANGES IN SHARE CAPITAL :

During the Financial Year 2015-16 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.

DIVIDEND :

In view of huge accumulated losses the Directors regret their inability to recommendany dividend for the financial year 2015-16.

DEPOSITS :

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.

DIRECTORS AND KEY MANAGERIAL PERSONNEL :

Mr. N. B. Kharpkar (DIN : 06373389) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment.

Mr. Kamal sharma (DIN : 02946513) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment.

since the last Annual General Meeting Mr. Akash Ghuwalewala has been appointed asCompany secretary w.e.f. 30th May 2016 and Mr. subid Chandra Majumder has resigned asCompany secretary w.e.f. 30th May 2016.

DECLARATION BY INDEPENDENT DIRECTOR :

No Independent Director has been appointed during the year 2015-16 under section 149(6) of the Companies Act 2013.

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 onarm’s length basis and in the ordinary course of business. There were no materiallysignificant related party transactions which were in conflict of the Company.

SUBSIDIARY COMPANIES :

The Company does not have any subsidiary company.

AMOUNTS TRANSFERRED TO RESERVES :

In view of huge accumulated losses the Directors regret their inability to recommendany amount to be transferred to reserves for the Financial Year 2015-16.

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 term of section 134 (3) (n) of the Act the Board of Director has adopted acomprehensive risk management policy which include identification of element of risk itsmitigation and other related factor. The Board periodically review the same.

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 Requirements) 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 twotimes details of the meeting has been given in Corporate Governance Report which formspart of this report.

• The following are the members of the Committee at present:

Name Designation * Executive/Non-Executive/Independent
Mr. Mukesh Mandwal Member Non- Executive & Independent
Mrs. M. s. pingale Member Non- Executive & Independent
Mr. N. B. Kharpkar Member Non- Executive & Non-Independent

* Members present at the meeting elect one of themselves as Chairman of the Meeting.

CORPORATE GOVERNANCE :

As per Regulation 27 (2) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations’ 2015 with Stock Exchanges a report on Corporate Governance togetherwith the Auditors’ Certificate regarding the compliance of conditions of CorporateGovernance forms part of the Annual 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 withthe Stock Exchanges in India is presented in a separate section which forms part of theAnnual Report.

NUMBER OF BOARD MEETINGS :

During the Financial Year 2015-16 the Board of Directors of the company met five timesdetails of the meetings has been given in the Corporate Governance Report which formspart of this report.

AUDIT COMMITTEE :

The Details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which 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 OBSERVATIONS :

The observations made by Auditors with reference to notes to account are selfexplanatory and need no comments.

STATUTORY AUDITORS :

The Auditors M/s s.s. Kothari & Co. Chartered Accountants retire at the ensuingAnnual General meeting for the year 2016-17.

APPOINTMENT OF INTERNAL AUDITOR :

The Company has appointed M/s. Ganeriwala & Associates Chartered Accountants asan Internal Auditor of the Company for the financial year 2016-17. M/S. Ganeriwala &Associates placed the Internal Audit Report to the Company which is self explanatory andneed no comments.

COST AUDITOR :

Your Company had appointed M/s Manisha & Associates Cost Accountants as CostAuditors with the approval of the Central Government for audit of cost recordsmaintained by the Company for the financial year 2016-2017.

SECRETARIAL AUDITOR :

In terms of section 204 of the Companies Act 2013 the Board of Directors at theirmeeting held on 30th May 2016 have appointed M/s K K sanganeria & Associatespracticing Company secretaries as secretarial Auditor for conducting Secretarial Auditof the Company for the Financial Year 2016-17. Report of the Secretarial Auditor for thefinancial year ended 31.03.2016 is given as "Annexure I" which forms part ofthis report.

EXTRACT OF ANNUAL RETURN :

The extract of Annual Return in format MGT -9 for the Financial Year 2015-16 has beenenclosed with this report as "Annexure IN".

DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL :

No significant & material orders passed by the regulators or courts or tribunal.

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.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY :

Companies (Corporate social Responsibility policy) Rules 2014 is not applicable onthe Company. BOARDS VIEW :

During the year under Review the Company continued to be under BIFR as a sickIndustrial Undertaking. the matter is subjudice before the Court of Law. All complianceswith the stock exchanges are updated and in respect of the status of the company beingshown as "Suspended" by BSE Limited and the Calcutta stock Exchange Limited thecompany has taken up the matter with both the exchanges as the company is in compliancewith the Listing Agreement. the Company has disputed the repayment of due. the loss anddamages caused to the borrower by the lender is much more than the amount lent. Hencefigures of the borrowed amount shown in the balance sheet after due adjustments with thesaid loss and damages may result in Do Debt Due rather the borrower is entitled torecover substantial amount from the lender. Under these facts and circumstances thefigures of borrowed amount in this balance sheet cannot be considered as admission ifany of the claim of lender(s).

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.The whistle Blower policy is available on the website of the Company i.e.www.uniworthtextiles.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.

INDUSTRIAL RELATIONS :

Industrial Relations continued to remain cordial throughout the year. Your Directorswish to place on record their appreciation for dedicated and sincere services rendered bythe executives staff and workmen at all levels.

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 2016 the Company has not received anycomplaints pertaining to sexual Harassment.

FRAUD REPORTING :

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.

ACKNOWLEDGEMENT :

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
N. K. Garg Kamal sharma
Executive Director Director
Place : Nagpur DIN : 01648057 DIN :02946513
Date : 11th August 2016