Your Directors are pleased to present their 35th Annual Report on the affairs of theCompany together with the Audited Statement of Accounts for the year ended 31st March2021.
| ||2020-21 ||2019-20 |
| ||(Rs in lakhs) ||(Rs in lakhs) |
|FINANCIAL RESULTS || || |
|Profit / Loss before Finance Cost || || |
|Depreciation Tax ||(519.89) ||(1362.34) |
|Finance Costs ||319.26 ||446.58 |
|Profit/(Loss) before Depreciation ||(839.15) ||(1808.92) |
|Depreciation ||365.99 ||371.04 |
| ||(1205.14) ||(2179.96) |
|Tax Expenses: || || |
|Prior Years' Tax Adjustments ||- ||- |
|Deferred Tax Charged/(Credit) ||(32.07) ||(304.44) |
|Profit/(Loss) for the year ||(1173.07) ||(1875.52) |
|Balance brought forward from previous year ||(4793.95) ||(3658.18) |
|Transferred from OCI ||- ||739.75 |
|Transferred from Capital Reserve ||40.00 ||- |
|Balance Carried to Balance Sheet ||(5927.02) ||(4793.95) |
During the year revenue from the operations of the Company is Rs.2364.48 Lakhs ascompared to Rs.4205.77 Lakhs in the previous year. The operating loss of the Company isRs.519.89 Lakhs as against operating loss of Rs.1362.34 Lakhs in the previous year. Theloss after finance cost and depreciation is Rs.1205.14 Lakhs as against the loss ofRs.2179.96 Lakhs in the previous year.
The Board has decided not to recommend any dividend for the financial year 2020-21.
TRANSFER TO RESERVES
There is no transfer to reserves for the financial year 2020-21.
The Paid up Equity Share Capital as on 31st March 2021 was Rs.87498650.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY
Due to labour problems the Plant E-23 is not in operation from 25th March 2019 totill date and the Plant E-1 came to a grinding halt w.e.f. February 2020 which hasadversely affected the Financial Position of the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
In accordance with the provisions of Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 required information relating to the Conservation ofEnergy Technology Absorption and Foreign Exchange Earnings and Outgo is given inAnnexure A to the Directors' Report.
DIRECTORS & KEY MANAGERIAL PERSONNEL (KMPs)
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Shri Narayan Patodia (DIN: 00013122) retires by rotation atthe ensuing Annual General Meeting and being eligible offers himself for reappointment.Accordingly his re-appointment forms part of the Notice of the ensuing Annual GeneralMeeting. The Company has received declarations from all the Independent Directors of theCompany confirming that they meet the criteria of independence as prescribed under thesubsection (7) of Section 149 of the Companies Act 2013. The Board is of the opinion thatthe Independent Directors of the Company hold highest standards of integrity and possessrequisite expertise and experience required to fulfil their duties as IndependentDirectors.
In terms of Section 150 of the Companies Act 2013 read with Rule 6 of the Companies(Appointment and Qualification of Directors) Rules 2014 Independent Directors of theCompany have confirmed that they have registered themselves with the databank maintainedby The Indian Institute of Corporate Affairs Manesar (IICA').
The Independent Directors are also required to undertake online proficiencyself-assessment test conducted by the IICA within a period of 2 (two) years from the dateof inclusion of their names in the data bank unless they meet the criteria specified forexemption.
The Independent Directors of the Company will be undertaking the said test in duecourse.
DIRECTORS' RESPONSIBILITY STATEMENT
As required by Section 134 (3) (c) of the Companies Act 2013 your Board of Directorshereby state:
(a) that in the preparation of the Annual Accounts for the year ended 31st March 2021the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
(b) that such accounting policies as mentioned in the Notes to the Financial Statementshave been selected and applied them consistently and judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March 2021 and of the Profit & Loss of the Company for the yearended on that date;
(c) that the Directors have taken proper and sufficient care for maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(d) that the annual accounts have been prepared on a going concern basis;
(e) that Directors have laid down internal financial controls to be followed by theCompany and such Internal Financial Controls are adequate and operating effectively; and
(f) that systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
Pursuant to the provisions of the Companies Act 2013 and
Listing Regulations the Board has carried out an Annual Performance evaluation of itsown performance the Directors individually as well as the evaluation of the working ofits various Committees.
The Board of Directors expressed their satisfaction with the evaluation process Theperformance evaluation of the Chairperson and Non-Independent Directors was carried out bythe Independent Directors at their separate meeting held on 25th July 2020. TheIndependent Directors expressed their satisfaction with the evaluation process.
The performance evaluation of all the Directors Committees and the Board was carriedout by the Nomination and Remuneration Committee Independent Directors and Board at theirrespective meetings.
During the year six Board Meetings were convened and held the details of which aregiven in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company's policy on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a Director and othermatters provided under sub-section (3) of Section 178 is annexed hereto and forms a partof this report and is also hosted on the website of the Company www.eurotexgroup.in
The Statutory Auditors M/s. SVP & Associates Chartered Accountants (Firm's Reg.No.003838N) were appointed as Statutory Auditor for a term of five years at 31st AnnualGeneral Meeting of the Company till the conclusion of 36th Annual General Meeting of theCompany.
As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 asamended from time to time your Company has been carrying out audit of Cost Recordsrelating to Textile.
The Board of Directors on the recommendation of the Audit Committee has appointedM/s. A. G. Anikhindi & Co. Cost Accountants as Cost Auditor to audit the CostAccounts of the Company for the financial year 2021-22.
As required under the Companies Act 2013 a Resolution seeking shareholder's approvalfor the remuneration payable to the Cost Auditor forms part of the Notice convening theAnnual General Meeting for their approval.
Maintenance of Cost Records
As per Section 148 of the Companies Act 2013 read with the Companies (Cost Recordsand Audit) Rules 2014 your Company is required to maintain cost records and accordinglysuch accounts and records are maintained.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board hasappointed M/s. S. K. Jain & Co. Practicing Company Secretary to conduct SecretarialAudit of the Company for the financial year 2021-22.
AUDITORS AND REPORTS
The matters related to Auditors and their Reports are as under:
1. Report of Statutory Auditor:
The Report given by the Statutory Auditors for the Financial Statements for the yearended 31st March 2021 read with explanatory notes thereon do not call for any explanationor comments from the Board under Section 134 (3) of the Companies Act 2013.
2. Report of Secretarial Auditor:
M/s. S. K. Jain & Co. Practicing Company Secretaries was appointed to conductSecretarial Audit of the Company for the financial year 2020-21 as required under Section204 of the Companies Act 2013 and the Rules thereunder. The Secretarial Audit Report forthe financial year 2020-21 forms part of the Annual Report as Annexure B tothe Boards Report and contains the following observations: There was a delay of 1 day ingiving Prior Intimation under Regulation 29(1) of SEBI (Listing Obligations DisclosuresRequirements) Regulations 2015 to BSE in respect of Board Meeting convened on 12thSeptember 2020 for consideration of Un-Audited Financial Results for the quarter ended30th June 2020 as prior intimation was given on 7th September 2020 instead of 6thSeptember 2020. However on the request of the Company BSE vide its e-mail dated 10thFebruary 2021 has waived the fine for late compliance by the Company and has advised theCompany to exercise caution while filing any documents with exchange on timely basis.
Comments of the Board of Directors on the above observation: The Company had givenprior intimation to NSE within time. The Company had also given prior intimation to BSEwithin prescribed time but due to technical issues beyond the control of the Companythere was inadvertent delay of 1 day in giving the said prior intimation to BSE.
The Company has complied with all the mandatory requirements of Corporate Governanceas stipulated in Regulation 27 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. A seperate report on Corporate Governance and aCertificate from M/s. S. K. Jain & Co. Secretarial Auditor regarding compliance withthe conditions of Corporate Governance is given in a separate section and forms part ofthe Annual Report.
The Board has well-qualified Audit Committee with majority of Independent Directorsincluding Chairman. They possess sound knowledge on Accounts Audit Finance TaxationInternal Controls etc. The details of the Composition of the Audit Committee are given inthe Corporate Governance Report.
The Company Secretary of the Company acts as Secretary of the Committee.
During the year there are no instances where the Board had not accepted therecommendations of the Audit Committee.
NOMINATION & REMUNERATION COMMITTEE & POLICY
The Company has duly constituted Nomination and Remuneration Committee to align withthe requirements prescribed under the provisions of Section 178 of the Companies Act 2013and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The Company Secretary of the Company acts as Secretary of theCommittee.
During the year there are no instances where the Board had not accepted therecommendations of the Audit Committee.
NOMINATION AND REMUNERATION COMMITTEE & POLICY
The Company has duly constituted Nomination & Remuneration Committee to align withthe requirements prescribed under the provisions of Section 178 of the Companies Act 2013and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The details of the Composition of the Nomination and RemunerationCommittee are given in the Corporate Governance Report.
The Board has framed a policy for selection and appointment of Directors SeniorManagement and their Remuneration. The policy provides for determining qualificationspositive attributes and independence of a Director. The said Policy is annexed to theCorporate Governance Report and is also available on the website of the Companywww.eurotexgroup.in
The Company has laid down the procedures to inform the Board about the risk assessmentand minimization procedures and the Board has formulated Risk Management policy to ensurethat the Board its Audit Committee and its Executive Management should collectivelyidentify the risks impacting the Company's business and document their process of riskidentification and risk minimization as a part of a Risk Management policy/strategy.
The common risks inter alia are: Regulations Credit Risk Foreign Exchange andInterest Risk Competition Business Risk Technology Obsolescence Investments Retentionof Talent and Expansion of Facilities etc. Business Risk inter-alia further includesfinancial risk political risk legal risk etc. The Board reviews the risk trendexposure and potential impact analysis and prepares risk mitigation plans if necessary.
CORPORATE SOCIAL RESPONSIBILITY(CSR)
The Company is not required to contribute towards CSR under Section 135 of theCompanies Act 2013 read with Rules thereunder.
The Board of Directors of your Company however has constituted a CSR Committee. Thedetails of the Composition of the Corporate Social Responsibility Committee are given inthe Corporate Governance Report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. Based on the report of Internal Audit function correctiveaction is undertaken in the respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board.
During the year under review no material or serious observation has been received fromthe Internal Auditors of the Company for inefficiency or inadequacy of such controls.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
In line with the best Corporate Governance practices Company has put in place a systemthrough which the Directors and Employees may report concerns about unethical behaviouractual or suspected fraud or violation of the Company's Code of Conduct & Ethicswithout fear of reprisal. The Employees and Directors may report to the Compliance Officerand have direct access to the Chairman of the Audit Committee. The Whistle Blower Policyis hosted on the website of the Company i.e. www.eurotexgroup.in
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Woman at Workplace (Prevention Prohibition and Redressal)Act 2013.
Internal Complaints Committees (ICC) have been set up to redress complaints receivedregarding sexual harassment and the Company has complied with provisions relating to theconstitution of Internal Complaints Committee under The Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013. All employees (permanentcontractual temporary trainees) are covered under this Policy.
The following is a summary of Sexual Harassment complaints received and disposed offduring the year: a) No. of Complaints received: Nil b) No. of Complaints disposed off: Nil
DISCLOSURE UNDER SECTION 197 (12) OF THE COMPANIES ACT 2013
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are given below:
a. Ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year:
|Name of Director ||Ratio to Median Remuneration |
|Shri K. K. Patodia ||17.15 |
|Shri Narayan Patodia ||7.98 |
|Shri Rajiv Patodia ||8.38 |
b. Percentage increase in remuneration of each Director Chief Executive Officer ChiefFinancial Officer Company Secretary in financial year:
|Name of Person ||Designation ||% increase in remuneration in Financial year |
|Shri K. K. Patodia ||Chairman and MD ||0.00 |
|Shri Narayan Patodia ||Managing Director ||0.00 |
|Shri Rajiv Patodia ||Executive Director ||0.00 |
|Shri Rahul Rawat ||Company Secretary ||0.00 |
c. Percentage increase in the median remuneration of employees in the financial year:8.11%
d. The number of permanent employees on the rolls of the Company: 100 employees
e. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
The average annual increase was around 6.16%. However during the course of the yearthe total increase is approximately (-)76.19% after accounting for promotions and otherevent-based compensation revisions. Increase in the managerial remuneration for the yearwas 0.00%.
f. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms remuneration is as per the remuneration policy of the Company.
A statement comprising the names of top 10 employees in terms of remuneration drawn andevery person employed throughout the year who were in receipt of remuneration in terms ofRule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed herewith as Annexure C and forms an integral part of thisReport.
The above Annexure is not being sent along with this Annual Report to the Members ofthe Company in line with the provision of Section 136 of the Companies Act 2013. Theaforesaid Annexure is available for inspection by Shareholders at the Registered Office ofthe Company 21 days before and up to the date of the ensuing Annual General Meetingduring the business hours (working days) of the Company. None of the employees listed inthe said Annexure is a relative of any Director of the Company. None of the employees hold(by himself or along with his/her spouse and dependent children) more than two percent ofthe equity shares of the Company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the year under review the Company has not given any loans and guarantees.Details of Investments covered under the provisions of Section 186 of the Companies Act2013 are given in the notes to the Financial Statements.
RELATED PARTY TRANSACTIONS
All Related Party Transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant Related Party Transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large and hence enclosing of Form AOC-2 is not required.All Related Party Transactions are placed before the Audit Committee as well as the Boardfor approval. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are of a foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted are audited and a statement giving details ofall Related Party Transactions is placed before the Audit Committee and the Board ofDirectors for their approval on a quarterly basis. The Company has developed a RelatedParty Transactions Policy for the purpose of identification and monitoring of suchtransactions. The policy on Related Party Transactions as approved by the Board isavailable on the Company's website at www.eurotexgroup.in
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to Regulation 34 (2) (e) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Management Discussion & Analysis Report for theyear under review is given under a separate section and forms part of the Annual Report.
The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014 during the year under review. Hence the requirement for furnishingof details of deposits which are not in compliance with the Chapter V of the Act is notapplicable.
The Annual Return of the Company for the financial year ended 31st March 2021 in FormMGT-7 as required under Section 92(3) of the Companies Act 2013 is available on theCompany's website and can be accessed at www.eurotexgroup.in.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
During the financial year 2020-21 there were no significant or material orders passedby the Regulators or Courts or Tribunals impacting the going concern status and operationsof the Company in the future.
COMPLIANCE WITH SECRETARIAL STANDARDS
Your Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board and General Meetings.
REPORTING OF FRAUDS
There were no frauds reported by the Statutory Auditors under provisions of Section 143(12) of the Companies Act 2013 and Rules made thereunder.
Your Directors wish to place on record their appreciation and thankful acknowledgementfor valuable assistance the Company received from all Customers Agents SuppliersInvestors and Lending Bankers.
On behalf of the Board
| ||K. K. PATODIA |
|Place : Mumbai || |
|Date : 22nd June 2021 || |
and Managing Director