Your Directors have great pleasure in presenting the 27th Annual Report together withAudited Statements of Accounts of the Company for the year ended March 31 2019.
The summarized financial results for the year ended March 31 2019 as compared to theprevious year are as follows:
(Rs in Lakhs)
|Particulars ||2018-2019 ||2017-2018 |
|Revenue from Operation ||- ||- |
|Other Income ||- ||0.19 |
|Profit before depreciation interest finance charges and tax (PBDIT) ||(296.86) ||(3306.26) |
|Less: Interest and Finance Charges ||132.25 ||86.17 |
|Less: Depreciation ||278.43 ||269.68 |
|Profit/(Loss) before Tax (PBT) ||(707.54) ||(3662.11) |
|Less : Tax Expense/Deferred Tax ||0 ||0 |
|Profit/(Loss) after Tax (PAT) ||(707.54) ||(3662.11) |
|Other Comprehensive Income ||- ||- |
|Total Comprehensive Income ||(707.54) ||(3662.11) |
FINANCIAL ANALYSIS AND PERFORMANCE REVIEW
The company's operations remain suspended during the year under review resulting in norevenue from operations.
The National Company Law Tribunal Vide its order dated 31 July 2018 approved theresolution plan as submitted by resolution applicants for the company pursuant to theCorporate Insolvency Resolution Process initiated as per the provisons of the Insolvencyand Bankruptcy code 2016.
After obtaining physical possession of the factory the company has carried out repairsand maintenance activities and started its trail production from 2 May 2019.
MANAGEMENT PERCEPTION ON OPPORTUNITIES RISKS CONCERN &OUTLOOK
The Indian government has come up with the Revised Restructured Technology Up gradationFund Scheme (RRTUFS) 10% capital subsidy to the specified technical textile machineryallowing 100% FDI in the Indian textiles sector under the automatic route may increase theprofits in the coming years the future of the Indian textile industry looks promisingbuoyed by both strong domestic consumption as well as export demand. With consumerism anddisposable income on the rise the retail sector has experienced a rapid growth in thepast decade with the entry of several international players. Further the Textile Ministryhas also introduced a new textile policy to promote value additions which sets a target ofdoubling textile exports in next 10 years.
The major factors hindering progress of the textiles industry are Increase in the powercosts higher transaction costs high cost of labour and general increase in input coststhus the industry has to concentrate on cost reduction exercises and improvement inefficiency. Another key challenge presently is the Fiber/Raw Material cost which isincreasing abruptly and increase is not fully absorbed in the yarn prices and accordinglyyarn spinners are hit the most in the entire textile chain. Due to fluctuating prices anduncertainties in the foreign exchange market increase in power cost introduction of GSTand lack of adequate working capital the EBITA levels may remain stagnant during theyear.
Further to overcome the losses promptly in this challenging scenario the Managementis keeping a close watch on various threats/risks facing the company and taking allappropriate steps to start of manufacturing unit to its full capacity.
Amit Spinning Industries Ltd. (ASIL) being a cotton yarn manufacturer has only onebusiness segment. On the basis of geographical categorization of market ASIL identifiedtwo segments i.e. exports and domestic.
During the year under review Company has not manufactured yarn.
SUBSIDIARY COMPANIES JOINT VENTURES AND ASSOCIATE COMPANIES
As there are no subsidiaries/ associates / joint ventures of the Company theprovisions contained in Companies Act 2013/SEBI (LODR) Regulations relating tosubsidiaries are not applicable.
During the year under review the Company has no distributable profits hence directorsregret their inability to recommend any dividend for financial period 2018-19.
The Company's Authorized Share Capital as on 31st March 2019 stands at Rs.250000000/- and issued & paid up capital as on 31st March 2019 stands at Rs.205848335/- divided into 41169667 fully paid up equity shares of Rs. 5/ -each.During the year under review the Company has not issued any share(s). Furtherthe Companyhas not issued any share with differential Voting Rights/Sweat Equity shares/under StockOption Scheme (ESOS) earlier and during the year. During the year under review theCompany had initiated corporate action as per approved resolution plan which includesreduction and consolidation of face value of shares Extinguishment of shares held byprevious promoters and Top 10 Shareholders and the same in process of implementation.
The Company has no scheme of provision of money for purchase of its own shares byemployees or by trustees for the benefit of employees. Hence the details under rule 16 (4)of Companies (Share Capital and Debentures) Rules 2014 are not required to be disclosed.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
(a) Change in Directors and Key Managerial Personnel
Mr. Jitendrakumar Goutamchand Chopra has been appointed as an Additional Director anddesignated as Executive Managing Director on the Board of the Company with effect from10th August 2018.
Mr. Deepak Chaganlal Choudhari has been appointed as an Additional Director anddesignated as Executive Joint Managing Director on the Board of the Company with effectfrom 10th August 2018.
Mrs. Sharmila Devi J Chopra has been appointed as a Woman Non-Executive Director on theBoard of the Company with effect from 10th August 2018.
Mr. Satish Murabatte and Mr.Amol Kanwade were appointed as Non Executive IndependentDirectors w.e.f 15 November 2018 and Mr. Mahaveer Bhandari was appointed as Non ExecutiveIndependent Director w.e.f 31 May 2019.
Mr. S P Setia Non Executive Independent Director and Mr. Vijaybhan Singh Non ExecutiveDirector resigned w.e.f 15 November 2018 and Mrs. Shivani Gupta Non Executive IndependentDirector resigned w.e.f 15 March 2019.
Mr. Aniruddha Badkatte has been appointed as a Company Secretary of the Company witheffect from 10th August 2018.
Mr. Shreyans Rajendra Choudhari has been appointed as a Chief Financial Officer of theCompany with effect from 10th August 2018.
Ms. Shifali Gupta resigned as the Compliance Officer w.e.f 3 October 2018 and Mr.Aniruddha Badkatte was appointed Compliance Officer from 4 October 2018.
Brief resume of the Directors proposed to be appointed/re-appointed nature of theirexpertise in specific functional areas and names of the companies in which they holddirectorship and membership/chairmanships of the Board or its Committees as stipulatedunder SEBI (LODR) Regulations entered into by the Company with stock exchanges in Indiais provided in the Report of Corporate Governance forming part of the Annual Report.
(b) Number of Meetings of the Board
After Commencement of CIRP Mr. Parveen Bansal was appointed as Resolutionprofessional. As per Section 17 of the Insolvency and Bankruptcy code 2016 uponappointment of IRP the powers of Board of Directors stands suspended and such powers areexercised by the RP/IRP appointed for the Company.
During the year under review and after the order of NCLT date 31 July 2018 Fivemeetings of the Board were held during the year. The detailed information regardingmeetings of the Board held during the year is mentioned in the Corporate Governance Reportwhich forms part to this report.
(c) Declaration 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 SEBI (LODR)Regulations.
(d) Annual Evaluation by the Board
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations theBoard has carried out an annual performance evaluation of its own performance thedirectors individually as well as its Committees. The manner in which the evaluation hasbeen carried out has been explained in the Corporate Governance Report.
(e) Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is enumerated in the Corporate Governance Report.During the year neither the Managing Director nor the Whole-time Directors of the Companyreceived any remuneration or commission.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(3) (c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:
(a) in the preparation of the annual accounts for the financial year ended 31st March2019 the applicable accounting standards had been followed along with proper explanationrelating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at March 312019 and of the profit andloss of the company for that period;
(c) thedirectors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
(d) the directors had prepared the annual accounts on a going concern basis; and
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
RELATED PARTY TRANSACTIONS
None of the transactions with related parties falls under the scope of section 188(1)of the Act. All related party transactions that were entered into during the financialyear were on an arm's length basis and were in the ordinary course of business. There wereno materially significant related parties transactions entered into by the Company withHolding Company/ Promoters Directors Key Managerial Personnel or other designatedpersons which may have a potential conflict with the interest of the Company at large.
Prior omnibus approval of the Audit Committee was obtained for Related PartyTransactions for the year ended 31st March 2019 and for transactions proposed to beentered into with related parties for the financial year 2019-20 were placed before thesaid committee and consent of the said committee was obtained.
The policy on Related Party Transactions as approved by the Board has been uploaded onthe website www.amitspinningindustires.com. None of the Directors has any pecuniaryrelationships or transactions vis-a-vis the Company. Since all related party transactionsentered into by the Company were in ordinary course of business and were on an arm'slength basis form AOC - 2 is not applicable to the Company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION BETWEEN THE DATE OFTHE BOARD REPORT AND END OF FINANCIAL YEAR
The Company had started trial production of manufacturing of yarn from 2 May 2019 atits factory located at Sangawade Kolhapur.
AUDITORS AND AUDITORS REPORT
(a) Statutory Auditor & Audit Report
Statutory Auditors i.e M/s Sanjay Vhanbatte have submitted Auditors' Report on theaccounts of the Company for the period ended 31st March 2019. The Auditor's Report readwith Notes to Accounts is self-explanatory and does not call for any further explanationunder Section 134 of the Companies Act 2013. Directors' response to the variousobservations of the auditors made in their report have been explained wherever necessarythrough appropriate notes to accounts.
(b) Cost Auditor:
The Company have not produced any yarn in the year 2018-19 the Companies (Cost Recordsand Audit Rules) 2014 is not applicable to the Company.
(c) Secretarial Auditor & Audit Report:
Pursuant to provisions of Section 204 of the Companies Act 2013 the Company hasappointed M/s. PPS and Associates Practicing Company Secretaries as Secretarial Auditorto carry out the secretarial audit for the financial year 2018-19.
The Secretarial Audit Report for the financial year ended March 31 2019 is annexedherewith marked as Annexure 1 to this Report.
The qualifications/observations/remarks made by the Secretarial Auditors andmanagement's view thereon are given in their Report attached hereto. New management hadtaken over the Company after the NCLT order the handover process was initiated. Due tothis their was delay in submission of Financial result for september quarter.
(d) Internal Audit
Pursuant to provisions section 138 of Companies act 2013 read with Companies (Accounts)Rules 2014 the board on recommendation of Audit Committee appointed Thigale Utturkar andAssociates Chartered Accountants as the Internal Auditor of the Company. The Managementregularly reviews the findings of the Internal Auditor and takes effective steps toimplement suggestions of the Internal Auditor.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
The Company has established adequate internal control systems commensurate with itssize and nature of business and such systems are periodically audited verified andreviewed for their validity considering the changing business scenario from time to timethe Audit Committee of the Board of Directors reviews the adequacy and effectiveness ofinternal control systems and suggests improvement for strengthening them.
EXTRACT OF THE ANNUAL RETURN
The details forming part of the extract of annual return in Form MGT-9 as requiredunder Section 92(3) of the Companies Act and Rule 12 of the Companies (Management andAdministration) Rules 2014 is available on the website www.amitspinningindustries.com.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO.
As there is no operation/production during the year under review the information asrequired to be disclosed under Section 134(3)(m)of the Companies Act 2013 read with Rule8 of the Companies (Accounts) Rules 2014 is not applicable.
PARTICULARS OF EMPLOYEES
The statement containing particulars of employees as required under section 197(12) ofthe Act read with Rule 5(2) &5(3) of the companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 as amended shall be made available to any shareholderon a specific request made by him in writing on or before 26th September 2019
The Company has not accepted or renewed any deposit during the year and there are nooutstanding and/or overdue deposits as at 31st March 2019.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of loans Guarantees and Investments covered under the provision of Section 186of the Companies Act 2013 are given in the notes to the Financial Statements.
The Company has framed and implemented a vigil mechanism named as Whistle Blower Policyto deal with instances of fraud and mismanagement if any. The details of the WhistleBlower Policy are provided in the Corporate Governance Report and also hosted on thewebsite of the Company.
During the year under review the Company has an Internal Complaint Committee asrequired under Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal)Act 2013 and there were no compliant received during the year.
HUMAN RESOURCES/INDUSTRIAL RELATIONS
A fundamental concept embodied in the company's code of conduct is to provide workingenvironment that motivate employees to be productive and innovative and provideopportunities for employee training and development to maximize personal potential anddevelop careers within the Company. The Company values the involvement of its employeesand keep them informed on matters affecting them as employees and factors relevant to thecompany's performance and other employee related issues on a non discriminatory basis.
The Board of Directors place on record the active dedicated and valuable contributionmade by employees of the Company at all levels with regard to the affairs of the Company.The Industrial relations remained cordial within the Company.
During the year Statutory Auditors has not found any instance of fraud committedagainst the Company by its employees or officers and accordingly reporting to the AuditCommittee or Central Government is not required.
Information Technology continues to be an integral part of your company's businessstrategy.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the company.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS
As stipulated under SEBI (LODR) Regulations entered into with Stock Exchanges a reporton Corporate Governance and Management Discussion Analysis is attached separately as apart of the Annual Report.
LISTING OF SHARES
Presently Company's shares are listed and traded at the BSE Limited Mumbai (BSE) andNational Stock Exchange of India Mumbai (NSE).
Your company was going through challenging and difficult period due to market andfinancial constraints. The Resolution Applicants have submitted the Resolution Plans forthe revival of the Company the same was subsequently approved by the NCLT vide its orderdated 31st July 2018. The Company have carried out repairs and Maintenance activities andwas able commence trial production on 2 May 2019. Further steps are being taken to startthe production to its full capacity. Acknowledgements
Your Directors place on record their sincere thanks to bankers financial institutionsbusiness associates consultants customers suppliers contractors and various GovernmentAuthorities for their continued support extended to your Companies activities during theyear under review. Your Directors also acknowledge gratefully the shareholders for theirsupport and confidence reposed on the Company.
| ||For & on behalf of the Board |
| ||Sd/- |
|Place : Kolhapur ||Deepak Choudhari |
|Date : 26th August 2019 ||Chairman |