Your Directors are pleased to present the Thirtieth Annual Report ofyour Company on business and operations along with the audited financial statements andthe auditor's report for the financial year ended 31st March 2019.
|Financial Results || || |
| || || र In Crore |
| ||2018-19 ||2017-18 |
|Revenue from Operation ||757.14 ||640.77 |
|Profit before Interest & Depreciation ||50.65 ||37.68 |
|Less: Finance Cost ||16.98 ||18.68 |
|Profit before Depreciation & Amortisation ||33.67 ||19.00 |
|Less: Depreciation & Amortisation ||20.32 ||18.40 |
|Profit/(Loss) before Tax ||13.35 ||0.60 |
|Less: || || |
|a) Current Tax ||2.34 ||0.00 |
|b) Deferred Tax ||2.69 ||0.18 |
|c) Taxes adjustment for earlier years ||0.19 ||(0.57) |
|Profit/(Loss) after Tax ||8.13 ||0.99 |
|Add: Opening Balance ||(29.08) ||(30.16) |
|Add: Transfer from Equity Component ||4.10 ||0.00 |
|Add: Other Comprehensive Income ||(0.64) ||0.10 |
|Balance at the end of the year ||(17.48) ||(29.08) |
Number of Meetings of the Board
Particulars of the meetings held during the year along with detailsregarding the meetings attended by the Directors form part of the Corporate GovernanceReport.
The composition of the Board and its Committees has also been given indetail in the Report on Corporate Governance.
In view of the accumulated losses your Directors do not propose anydividend for the financial year ended 31 st March 2019.
The carry forward losses are not yet fully set off in the year underreview your Directors in compliance with Companies Act 2013 and rule made thereunder donot recommend the payment of dividend on Cumulative Redeemable Preference Shares (CRPS)issued by the Company and the same has been already informed by the Directors in theirprevious reports. Your Company would be able to wipe out the carried over losses in comingyears and shall be able to meet its obligations including arrears of dividend on CRPS.
Your Directors inform the members that during the year under reviewdespite difficult market condition both domestic and international the operations of theCompany showed marked improvement. Your Company geared itself to face the challenges andmade all efforts to continue its operations with full efficiency.
Due to above your Company achieved a higher Turnover at र 757.14Crore for the year ended 31st March 2019 against र 640.77 Crore recorded in theprevious year ended 31st March 2018. Further the operational profit of the Company wasalso higher at र 50.65 Crore as against र 37.68 Crore achieved in theprevious year. The Net profit of the Company is also higher at र 8.13 Crore against र 0.99 Crore in the previous year. During the period under review your Company hasbeen able to achieve production of 18749.09 MT of grey yarn (19093 MT) 2668 MT of dyedyarn (2433 MT) 4680 MT of grey knitted fabric (4317 MT) 6121 MT of processed fabric(4742 MT) and 36.12 Lakh pieces of garments (39.46 Lakh pieces) without any expansion incapacity. The fabric division of your company reported good performance and increased itsprofitability significantly during the year. The Yarn division also recorded marginallyhigher volume and profit. The
Garment segment continued to remain sluggish due to domestic andinternational market conditions and reported losses inspite of increase in turnover andproduction.
Your Company took various steps to overcome the situation whichincluded rationalisation modernisation and capex programme on need based priority. YourDirectors are hopeful that with the completion of the ongoing modernization programmeyour Company would improve its performance and profitability. The Company is making allpossible efforts to improve margins.
The Indian textile industry has a noteworthy presence in both theIndian economy and in the international textile economy. Its contribution to the Indianeconomy is corroborated by its contribution to industrial production employmentgeneration and foreign exchange earnings.
The Textile & Garments industry in India is highly diversified widerange of segments ranging from products of traditional handloom handicrafts wool andsilk products to the organized textile industry. The organized textile industry ischaracterized by the use of capital-intensive technology for mass production of textileproducts and includes spinning weaving processing apparel and garment. The Indiantextiles industry is extremely varied with hand-spun and hand-woven textiles sectors atone end of the spectrum and the capital intensive sophisticated mills sector at the otherend of the spectrum.
The decentralised power looms/ hosiery and knitting sector form thelargest component of the textiles sector. The fundamental strength of Indian textileindustry is its strong production base with wide range of fibers/yarns. These are naturalfibres as well as synthetic/man-made fibres. These materials find application formanufacturing a broad range of conventional as well as advanced finished goods used forbedding kitchen upholstery construction transportation handbags protective medicalfashion apparel and clothing accessories. The CAI has estimated cotton crop for 2018-19at 321 lakh bales of 170 kgs each which is lower by 7 lakh bales than its previousestimate of 328 lakh bales made during February 2019. The main reason for reduction incotton crop during this year is the scarcity of water in some states. The CAI hasestimated domestic consumption of 316 lakh bales and exports for the season 2018-19 at 47lakh bales which are lower by 22 lakh bales compared to the export of 69 lakh balesestimated during last year.
The CAI has also projected yearly Balance Sheet for the cotton season2018-19 wherein total cotton supply till end of the cotton season i.e. upto September 2019has been estimated at 376 lakh bakes of 170 kgs each consisting of the Opening Stock of 28lakh bales at the beginning of the cotton season cotton crop for the season estimated at321 lakh bales and imports estimated at 27 lakh bales which are higher by 12 lakh balescompared to the previous year's import estimated at 15 lakh bales. The Government hastaken various initiatives for the development of textile industry. The Government of Indiahas taken several measures including Amended Technology Up-gradation Fund Scheme (A-TUFS)scheme is estimated to create employment for 35 lakh people and enable investments worth र 95000 crore (US$ 14.17 billion) by 2022.
The Ministry of Textiles is encouraging investments through increasingfocus on schemes such as Technology Up-gradation Fund Scheme (TUFS). Under the UnionBudget 2018-19 र 2300 (US$ 355.27 million) crore have been allocated for TUFS and र 30 crore (US$ 4.63 million) for the Scheme for Integrated Textile Parks underwhich there are 47 on-going projects. During the year the Government of India hasincreased the basic custom duty to 20 per cent from 10 per cent on 501 textile productsto boost Make in India and indigenous production. The Directorate General of Foreign Trade(DGFT) has revised rates for incentives under the Merchandise Exports from India Scheme(MEIS) for two subsectors of Textiles Industry - Readymade garments and Made ups - from 2per cent to 4 per cent.
The future for the Indian textile industry looks promising buoyed byboth strong domestic consumption as well as export demand. With consumerism and disposableincome on the rise the retail sector has experienced a rapid growth in the past decadewith the entry of several international players like Marks & Spencer Guess and Nextinto the Indian market.
Modernization and Expansion
Your Directors in their previous report mentioned about modernizationprogramme at a capital outlay of र 80 Crore in spinning yarn dying and processingdivision as well as installation of Printing (Digital) Fabric dying Knitting andEnterprise Resource Planning and other capex. Your Directors feel pleasure in informingthe members that the above modernization and installation of capacities is nearingcompletion and your Company is expected to reap the full benefits of the above plans inthe current financial year.
During the year your Directors have further approved a capitalexpenditure of र 55 Crore to expand its product portfolio by introducing Printingtechnological upgradation in Spinning and replacement of few machines in Fabric Processingand Garment division. Your Directors have also approved to set up a green field projectfor Garment manufacturing at Industrial Area Smart Industrial Park near NATRIP IndoreM. P.
Your Directors are hopeful that with the implementation of the aboveprograms your company shall be able to realize the full benefits of value addition andshall be able to offer wide range of products.
Corporate Social Responsibility
Education is a social vehicle which must march ahead and be a sourceof new ideas. Thus MOL endeavours to provide the right opportunities and environment forthe development of the student by giving education and also conserving the culturalheritage of the country.
It has always been the endeavour of the Company to be at the forefrontwith regard to Social and Environmental responsibility. As a responsible corporatecitizen we aim to contribute to social and environmental causes on a regular basis. Forus Corporate Social Responsibility (CSR) is an added opportunity to bring value to ourstakeholders' lives and in a small possible way bring about a difference that we allwant to see and be. We have been contributing to society since various years.
Education represents the stepping stone to improve the quality of lifeespecially for the poor and the vulnerable. Access to quality education is fundamental tothe growth of India. The ideology behind the top corporate social responsibilityinitiatives in education this year is to transform lives through the continuousenhancement of knowledge and empowerment. In line with this commitment the Company iscontinuing with its flagship project of providing education to the girl child in ruralareas nearby it's factory location in the state of Madhya Pradesh by mobilizing andmotivating non-school going girls from economically and socially backward and poor andweaker families. Your Company fulfils the dreams of underprivileged girl child who areliving with the hope that someday someone would reach out to them to fulfil their dreamsand aspirations. During the year your Company continued to provide education to nearby900 girls' through the medium of 30 learning centres.
The composition and terms of reference of the CSR Committee are givenin the Corporate Governance Report. The detail of the amount spent on the CSR activitiesby the Company is enclosed as Annexure - I forming part of this report.
The extract of annual return as required under Section 92(3) of theCompanies Act 2013 and Rule 12 of the Companies (Management and Administration) Rules2014 is available on the website of the Company Company and attached as Annexure II
Directors and Key Managerial Personnel
Your Directors inform the members that Shri Shantanu Agarwal Directorretires by rotation and being eligible offers himself for reappointment.
Your Directors further inform the members that first term of Dr. Kamal
Gupta and Shri Priya Shankar Dasgupta as Independent Director is duefor completion on 25th September 2019. Your Directors upon commendation of Nominationand Remuneration Committee propose to re-appoint Dr. Kamal Gupta and Shri Priya ShankarDasgupta for the second term of 5 years w.e.f 26th September 2019. The proposal forconfirmation of re-appointment of Dr. Kamal Gupta and Shri Priya
Shankar Dasgupta as Independent Director(s) for a another term of 5years shall be put up before the ensuing Annual General Meeting. Your Directors furtherinform the members that pursuant to the provisions of Section 149(7) of the Companies Act2013 the declaration has been received from Independent Directors at the beginning of thefinancial year stating that they meet the criteria of independence as specified undersub-section (6) of Section 149 of the Companies Act 2013 and Regulation 16(1)(b) of SEBI(Listing
Obligations and Disclosure Requirements) Regulations 2015 with theStock Exchanges.
During the year Shri Shekhar Agarwal Managing Director & CEO
Shri Atul Kumar Jain Chief Financial Officer and Shri Virendra Kumar
Garg Company Secretary acted as Key Managerial Personnel of theCompany.
None of the Directors of the Company are disqualified as per theprovisions of Section 164 of the Companies and material order passed by theAct 2013.Further none of Directors of the Company are not debarred from holding the office ofDirector pursuant to any SEBI order or any such authority. The Directors have madenecessary disclosures as required under various provisions of the Companies Act 2013.
Directors' Appointment and Remuneration Policy
Pursuant to the provision of Section 178 of the Companies Act 2013 andSchedule II Part D the role of the Nomination and Remuneration Committee the Board ofDirectors on the recommendation of Nomination and Remuneration Committee has framed apolicy for the appointment of Directors and Senior Management and their remuneration. Thepolicy forms part of the Board Report as given in
Annual Evaluation by the Board
Pursuant to the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 annual evaluation has beendone by the Board of its own performance its Committees and the individual Directors. Themanner of evaluation is mentioned in the Nomination and Remuneration policy which formspart of Board Report.
Further every Independent Director of the Company is familiarized withthe Company their roles rights responsibilities in the Company nature of the industryin which the Company operates business model of the Company etc. through variousprogrammes.
Particulars of Loans Guarantees or Investments
Details of loans Guarantees and Investments are given in the notes tothe Financial Statements at appropriate places.
Particulars of Contracts or Arrangements with Related Parties
All contracts / arrangements / transaction entered into by the Companyduring the financial year with related parties are on arm's length basis and in theordinary course of business. During the financial year there was no material contract orarrangement entered into by the Company with any of the related parties. Your Directorsdraw attention of the members to note 40.2 to the financial statement which containparticulars with respect to related parties. The policy on dealing with the Related PartyTransactions as approved by the Board of Directors is disclosed on the website of theCompany under the following link:http://maraloverseas.com/pdf/Policy_on_Related_Party_Transaction.pdf
Further prior omnibus approvals from the Audit Committee are obtainedfor the transactions which are repetitive and normal in nature and in accordance with theRelated Party Transaction policy. The disclosures are made to the Audit Committee and theBoard of Directors on a quarterly basis.
Maintenance of Cost Records
In terms of the provisions of Section 148(1) of the Companies Act
2013 read with the Companies (Cost Records and Audit) Rules 2014 theCentral Government has mandated certain class of Companies to maintain cost records. Beinga textile Company the Company falls under the prescribed class of Companies and maintainsCost Accounts and Records which are also subject to Audit conducted by a Cost Auditor.
Significant and Material Orders Passed by the Regulators or Courts. regulatorsTherewas no significant or courts during the year.
Auditors Statutory Auditors
M/s. S.S. Kothari Mehta & Co. Chartered Accountants New Delhi(Firm Registration No. 000756N) and M/s. P. K. Deora & Co.
Chartered Accountants New Delhi (Firm Registration No. 004167N) wereappointed as Joint Statutory Auditors of the Company at the 28th Annual General Meeting ofthe Company held on 22nd September 2017 for a term of 5 years till the conclusion of 33rdAGM subject to ratification by members at every subsequent Annual General Meeting.
Your Directors inform the members that in accordance with the amendmentnotifiedby MCA on th May 2018 the requirement of ratification of the appointment ofStatutory Auditors at every Annual
General Meeting has been omitted and is no longer required.
However The Statutory Auditors have confirmed their eligibility undersection 141 of the Companies Act 2013 and rules framed thereunder. During the year 2019the Auditors had not reported any matter under Section 143 (12) of the Act; therefore nodetail is required to be disclosed under Section 134(3) (ca) of the Act. The observationsof the Auditors if any are explained wherever necessary in the appropriate notes to theaccounts which are forms part of this Annual Report. The
Auditors' Report does not contain qualification reservation oradverse remark disclaimer or emphasis of matter.
Pursuant to section 138 of the Companies Act 2013 read with The
Companies (Accounts) Rules 2014 the Company has appointed M/s BGJC& Associates Chartered Accountants (LLP) and M/s. Sarat Jain & Co. as theInternal Auditors of the Company for the financial year 2018-19.
The role of internal auditors includes but is not limited to review ofinternal audit observations but monitoring of implementation of corrective actionsrequired reviewing of various policies and ensure its proper implementation reviewing ofSOPs and there amendments if any.
Pursuant to Section 204 of the Companies Act 2013 read with TheCompanies (Appointment and Remuneration of Managerial Personnel)
Rules 2014 the Company had appointed M/s. SGS Associates CompanySecretaries a practicing secretaries firm as the Secretarial Auditor of the Company forthe financial year ending 31st March 2019.
The Secretarial Audit Report does not contain qualificationreservation or adverse remark. The Report of Secretarial Audit is annexed as AnnexureIV.
Pursuant to Section 148 of the Companies Act 2013 read with TheCompanies (Cost Records and Audit) Amendment Rules 2014 textile Companies are requiredto get their cost records audited. In this connection the Board of Directors of theCompany on the commendation of Audit Committee had approved the appointment of
M/s K. G. Goyal & Co. as the Cost Auditor of the Company for theyear ending 31st March 2019.
The Company has identified various risks associated with the business.The Company has adopted a risk management policy which acts as an effective tool inmitigating the various risks to which the businesses are exposed. The risk managementpolicies cover areas such as Environment Health & Safety Statutory Compliances andReturns Energy On Time Performance Quality Commodity Pricing Outsourcing Budgetingand Planning Government Policies etc.
The risks identified by the business are systematically addressed tothe Board through mitigating actions on a continuous basis. Further the policy aims atcreating and protecting shareholders value by minimizing threats and weaknesses andidentifying and maximizing opportunities. Pursuant to the policy your Directorsperiodically review the risks associated with the business or which threaten the prospectsof the Company.
Good Corporate Governance is more of a priority than a mere legalobligation. It involves the commitment to run the business in most ethical and transparentmanner. It helps to build the confidence of the investors and to establish healthyrelationship with all the stakeholders. Apart from mandatory practice the Company adoptsvarious voluntary practices to ensure transparency and accountability at highest level.The Company's vision of achieving its objectives is in line with its considerationfor environment safety and people.
Report on Corporate Governance along with the Certificate AuditorsM/s. S.S. Kothari Mehta & Co. and M/s. P. K. Deora & Co. Chartered Accountantsconfirming compliance of conditions of
Corporate Governance as stipulated under Point E of Schedule V of SEBI(Listing Obligations and Disclosure Requirement) Regulations 2015 forms part of theAnnual Report.
Whistle Blower Policy
The Company in order to provide mechanism to disclose any unethicaland improper practices or any other alleged wrongful conduct or matter of concern in areaof accounts finance management operations employment or any other misconduct in theCompany had laid down a Vigil Mechanism also known as Whistle Blower Policy to deal withthe instance of fraud and mismanagement if any.
The Company had appointed the nodal officer to whom the complaints canbe made. In exceptional cases an opportunity is provided to the Whistle Blower to make adirect appeal to the Chairman of the Audit Committee.
The policy safeguards the whistle Blower from being victimized. Thepolicy has been disclosed on the website of the Company the link of which is givenhereunder: http://www.maraloverseas.com/pdf/Whistle_Blower_Policy.pdf
Management Discussion and Analysis Report
Management Discussion and Analysis Report as required by Schedule V ofRegulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations)2015 forms part of the Annual Report.
Internal Control Systems
The Directors had laid down internal financial controls to be followedby your Company and such policies and procedures adopted by your
Company for ensuring the orderly and efficient conduct of its businessincluding adherence to our Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information.
The Audit Committee reviews the Executive summary on the internal auditfindings along with the recommendations and management comments every quarter. Furtherthe Action Taken Report/
Compliances as discussed in the previous meeting is placed in the nextmeeting along with the detailed report. The Internal Auditors also ensure propercompliance of all policies and Standard Operating Procedures (SOPs) adopted by theCompany. Internal Auditors report directly to the Audit Committee of the Board.
The Company's internal control systems comprise of audit andcompliance by in-house staff supplemented by internal audit checks by the InternalAuditors.
Energy Conservation Technology Absorption and Foreign ExchangeEarnings and Outgo
The information required to be disclosed pursuant to Section 134(3) (m)of the Companies Act 2013 read with the Rules 8(3) of the Companies (Accounts) Rules2014 is given in Annexure V forming part of this Report.
Particulars of Employeesof
The information pursuant to Section 197 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the relevantstatement is annexed as Annexure VI Further disclosures pursuant to Rule 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thestatement showing the name along with the particulars of top ten employees along with theemployees drawing remuneration in excess of the limits is annexed as Annexure VII.
Significant Material Changes after Balance Sheet Date AffectingFinancial Position
There is no change or commitment which affects the financial positionof the Company that may have occurred between the end of the financial year of the Companyto which the financial statements relate i. e. 31.03.2019 and the date of report 7th May2019.
Subsidiaries Joint Ventures and Associates Companies
The Company does not have any Joint Ventures Subsidiaries andAssociates Companies
Your Company has not accepted any public deposit within the meaning ofprovisions of section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014 and there is no outstanding deposit due for re-payment.
Disclosure under the Sexual Harassment Of Women At Workplace(Prevention Prohibition And Redressal) Act 2013
In line with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 the Company has complied withthe provisions relating to the constitution of Internal Complaints Committee for reportingconcerns related to sexual harassment at workplace. Your Directors inform the members thatduring the year under review the Internal Complaint Committee did not report anycomplaint with regard to sexual harassment under review.
Directors' Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directorsstate that: a. in the preparation of the Annual Accounts the applicable AccountingStandards have been followed and no material departures have been made from the same; b.appropriate Accounting Policies have been applied consistently and they have madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of and Loss of the Company on 31st March 2017 and of the Profitthe Company for the year ended on that date; c. proper and sufficient care has been takenfor the maintenance of adequate accounting records in accordance with the provisions ofthe Companies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d. the Annual Accounts have been prepared on agoing concern basis. e. that proper internal financial controls were in place and that thefinancial controls were adequate and were operating effectively. f. that system to ensurecompliance with the provisions of all applicable laws were in place and were adequate andoperating effectively.
Indian Accounting Standards (IND AS):
The Company has followed the guidelines of Accounting Standards/
IND-AS laid down by the Institute of Chartered Accountant of India inpreparation of Financial Statement.
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during thefinancial year under review:
I. Issue of equity shares with differential rights as to dividendvoting or otherwise.
II. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme save and except ESOS referred to in this Report.
III. No amount has been transferred to General Reserves during theyear.
IV. There is no change in the nature of business of the Company.
V. During the year there is no complaint(s) received under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 underreview.
VI. There were no frauds found which have been reported to the
Audit Committee / Board members as well as to the Central
The statements contained in the Board's Report and ManagementDiscussion and Analysis contain certain statements relating to the future and thereforeare forward looking within the meaning of applicable securities laws and regulations.Various factors such as economic conditions changes in government regulations taxregime other statues market forces and other associated and incidental factors mayhowever lead to variation in actual results.
Your Directors place on record their acknowledgement and sincereappreciation to all our clients customers vendors dealers bankers investors otherbusiness associates Central and State Government for their continued support andencouragement during the year and their confidence towards the management. Your Directorswould also like to thank employees at all levels for their hard work dedication andcommitment.
For and on behalf of the Board
07th May 2019