Your Directors are pleased to present the Thirtieth Annual Report of your Company onbusiness and operations along with the audited financial statements and the auditor'sreport for the financial year ended 31st March 2019.
|Financial Results || || |
| || ||? 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 details regarding themeetings attended by the Directors form part of the Corporate Governance Report.
The composition of the Board and its Committees has also been given in detail in theReport on Corporate Governance.
In view of the accumulated losses your Directors do not propose any dividend for thefinancial year ended 31 st March 2019.
The carry forward losses are not yet fully set off in the year under review yourDirectors in compliance with Companies Act 2013 and rule made thereunder do not recommendthe payment of dividend on Cumulative Redeemable Preference Shares (CRPS) issued by theCompany and the same has been already informed by the Directors in their previous reports.Your Company would be able to wipe out the carried over losses in coming years and shallbe able to meet its obligations including arrears of dividend on CRPS.
Your Directors inform the members that during the year under review despite difficultmarket condition both domestic and international the operations of the Company showedmarked improvement. Your Company geared itself to face the challenges and made all effortsto continue its operations with full efficiency.
Due to above your Company achieved a higher Turnover at ? 757.14 Crore for the yearended 31st March 2019 against ? 640.77 Crore recorded in the previous year ended 31stMarch 2018. Further the operational profit of the Company was also higher at ? 50.65Crore as against ? 37.68 Crore achieved in the previous year. The Net profit of theCompany is also higher at ? 8.13 Crore against ? 0.99 Crore in the previous year. Duringthe period under review your Company has been able to achieve production of 18749.09 MTof grey yarn (19093 MT) 2668 MT of dyed yarn (2433 MT) 4680 MT of grey knitted fabric(4317 MT) 6121 MT of processed fabric (4742 MT) and 36.12 Lakh pieces of garments (39.46Lakh pieces) without any expansion in capacity. The fabric division of your companyreported good performance and increased its profitability significantly during the year.The Yarn division also recorded marginally higher volume and profit. The
Garment segment continued to remain sluggish due to domestic and international marketconditions and reported losses inspite of increase in turnover and production.
Your Company took various steps to overcome the situation which includedrationalisation modernisation and capex programme on need based priority. Your Directorsare hopeful that with the completion of the ongoing modernization programme your Companywould improve its performance and profitability. The Company is making all possibleefforts to improve margins.
The Indian textile industry has a noteworthy presence in both the Indian economy and inthe international textile economy. Its contribution to the Indian economy is corroboratedby its contribution to industrial production employment generation and foreign exchangeearnings.
The Textile & Garments industry in India is highly diversified wide range ofsegments ranging from products of traditional handloom handicrafts wool and silkproducts 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 the largest componentof the textiles sector. The fundamental strength of Indian textile industry is its strongproduction base with wide range of fibers/yarns. These are natural fibres as well assynthetic/man-made fibres. These materials find application for manufacturing a broadrange of conventional as well as advanced finished goods used for bedding kitchenupholstery construction transportation handbags protective medical fashion appareland clothing accessories. The CAI has estimated cotton crop for 2018-19 at 321 lakh balesof 170 kgs each which is lower by 7 lakh bales than its previous estimate of 328 lakhbales made during February 2019. The main reason for reduction in cotton crop during thisyear is the scarcity of water in some states. The CAI has estimated domestic consumptionof 316 lakh bales and exports for the season 2018-19 at 47 lakh bales which are lower by22 lakh bales compared to the export of 69 lakh bales estimated during last year.
The CAI has also projected yearly Balance Sheet for the cotton season 2018-19 whereintotal cotton supply till end of the cotton season i.e. upto September 2019 has beenestimated at 376 lakh bakes of 170 kgs each consisting of the Opening Stock of 28 lakhbales at the beginning of the cotton season cotton crop for the season estimated at 321lakh 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 ?95000 crore (US$ 14.17 billion) by 2022.
The Ministry of Textiles is encouraging investments through increasing focus on schemessuch as Technology Up-gradation Fund Scheme (TUFS). Under the Union Budget 2018-19 ?2300 (US$ 355.27 million) crore have been allocated for TUFS and ? 30 crore (US$ 4.63million) for the Scheme for Integrated Textile Parks under which there are 47 on-goingprojects. During the year the Government of India has increased the basic custom duty to20 per cent from 10 per cent on 501 textile products to boost Make in India andindigenous production. The Directorate General of Foreign Trade (DGFT) has revised ratesfor incentives under the Merchandise Exports from India Scheme (MEIS) for two subsectorsof Textiles Industry - Readymade garments and Made ups - from 2 per cent to 4 per cent.
The future for the Indian textile industry looks promising buoyed by both strongdomestic consumption as well as export demand. With consumerism and disposable income onthe rise the retail sector has experienced a rapid growth in the past decade with theentry of several international players like Marks & Spencer Guess and Next into theIndian market.
Modernization and Expansion
Your Directors in their previous report mentioned about modernization programme at acapital outlay of ? 80 Crore in spinning yarn dying and processing division as well asinstallation of Printing (Digital) Fabric dying Knitting and Enterprise ResourcePlanning and other capex. Your Directors feel pleasure in informing the members that theabove modernization and installation of capacities is nearing completion and your Companyis expected to reap the full benefits of the above plans in the current financial year.
During the year your Directors have further approved a capital expenditure of ? 55Crore to expand its product portfolio by introducing Printing technological upgradationin Spinning and replacement of few machines in Fabric Processing and Garment division.Your Directors have also approved to set up a green field project for Garmentmanufacturing at Industrial Area Smart Industrial Park near NATRIP Indore M. P.
Your Directors are hopeful that with the implementation of the above programs yourcompany shall be able to realize the full benefits of value addition and shall be able tooffer wide range of products.
Corporate Social Responsibility
Education is a social vehicle which must march ahead and be a source of new ideas.Thus MOL endeavours to provide the right opportunities and environment for thedevelopment of the student by giving education and also conserving the cultural heritageof the country.
It has always been the endeavour of the Company to be at the forefront with regard toSocial and Environmental responsibility. As a responsible corporate citizen we aim tocontribute to social and environmental causes on a regular basis. For us Corporate SocialResponsibility (CSR) is an added opportunity to bring value to our stakeholders' lives andin a small possible way bring about a difference that we all want to see and be. We havebeen contributing to society since various years.
Education represents the stepping stone to improve the quality of life especially forthe poor and the vulnerable. Access to quality education is fundamental to the growth ofIndia. The ideology behind the top corporate social responsibility initiatives ineducation this year is to transform lives through the continuous enhancement of knowledgeand empowerment. In line with this commitment the Company is continuing with its flagshipproject of providing education to the girl child in rural areas nearby it's factorylocation in the state of Madhya Pradesh by mobilizing and motivating non-school goinggirls from economically and socially backward and poor and weaker families. Your Companyfulfils the dreams of underprivileged girl child who are living with the hope that somedaysomeone would reach out to them to fulfil their dreams and aspirations. During the yearyour Company continued to provide education to nearby 900 girls' through the medium of 30learning centres.
The composition and terms of reference of the CSR Committee are given in the CorporateGovernance Report. The detail of the amount spent on the CSR activities by the Company isenclosed as Annexure - I forming part of this report.
The extract of annual return as required under Section 92(3) of the Companies Act 2013and Rule 12 of the Companies (Management and Administration) Rules 2014 is available onthe website of the Company Company and attached as Annexure II
Directors and Key Managerial Personnel
Your Directors inform the members that Shri Shantanu Agarwal Director retires byrotation 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 due for completion on25th September 2019. Your Directors upon commendation of Nomination and RemunerationCommittee propose to re-appoint Dr. Kamal Gupta and Shri Priya Shankar Dasgupta for thesecond term of 5 years w.e.f 26th September 2019. The proposal for confirmation ofre-appointment of Dr. Kamal Gupta and Shri Priya
Shankar Dasgupta as Independent Director(s) for a another term of 5 years shall be putup before the ensuing Annual General Meeting. Your Directors further inform the membersthat pursuant to the provisions of Section 149(7) of the Companies Act 2013 thedeclaration has been received from Independent Directors at the beginning of the financialyear stating that they meet the criteria of independence as specified under sub-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 the Stock 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 the Company.
None of the Directors of the Company are disqualified as per the provisions of Section164 of the Companies and material order passed by theAct 2013. Further none of Directorsof the Company are not debarred from holding the office of Director pursuant to any SEBIorder or any such authority. The Directors have made necessary disclosures as requiredunder various provisions of the Companies Act 2013.
Directors' Appointment and Remuneration Policy
Pursuant to the provision of Section 178 of the Companies Act 2013 and Schedule IIPart D the role of the Nomination and Remuneration Committee the Board of Directors onthe recommendation of Nomination and Remuneration Committee has framed a policy for theappointment of Directors and Senior Management and their remuneration. The policy formspart of the Board Report as given in
Annual Evaluation by the Board
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 annual evaluation has been done by the Boardof its own performance its Committees and the individual Directors. The manner ofevaluation is mentioned in the Nomination and Remuneration policy which forms part ofBoard Report.
Further every Independent Director of the Company is familiarized with the Companytheir roles rights responsibilities in the Company nature of the industry in which theCompany operates business model of the Company etc. through various programmes.
Particulars of Loans Guarantees or Investments
Details of loans Guarantees and Investments are given in the notes to the FinancialStatements at appropriate places.
Particulars of Contracts or Arrangements with Related Parties
All contracts / arrangements / transaction entered into by the Company during thefinancial year with related parties are on arm's length basis and in the ordinary courseof business. During the financial year there was no material contract or arrangemententered into by the Company with any of the related parties. Your Directors draw attentionof the members to note 40.2 to the financial statement which contain particulars withrespect to related parties. The policy on dealing with the Related Party Transactions asapproved by the Board of Directors is disclosed on the website of the Company under thefollowing link: http://maraloverseas.com/pdf/Policy_on_Related_Party_Transaction.pdf
Further prior omnibus approvals from the Audit Committee are obtained for thetransactions which are repetitive and normal in nature and in accordance with the RelatedParty Transaction policy. The disclosures are made to the Audit Committee and the Board ofDirectors 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 the CentralGovernment has mandated certain class of Companies to maintain cost records. Being atextile 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 RegistrationNo. 000756N) and M/s. P. K. Deora & Co.
Chartered Accountants New Delhi (Firm Registration No. 004167N) were appointed asJoint Statutory Auditors of the Company at the 28th Annual General Meeting of the Companyheld on 22nd September 2017 for a term of 5 years till the conclusion of 33rd AGM subjectto ratification by members at every subsequent Annual General Meeting.
Your Directors inform the members that in accordance with the amendment notifiedby MCAon th May 2018 the requirement of ratification of the appointment of Statutory Auditorsat every Annual
General Meeting has been omitted and is no longer required.
However The Statutory Auditors have confirmed their eligibility under section 141 ofthe Companies Act 2013 and rules framed thereunder. During the year 2019 the Auditorshad not reported any matter under Section 143 (12) of the Act; therefore no detail isrequired to be disclosed under Section 134(3) (ca) of the Act. The observations of theAuditors 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 or adverse remarkdisclaimer 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 & AssociatesChartered Accountants (LLP) and M/s. Sarat Jain & Co. as the Internal Auditors of theCompany for the financial year 2018-19.
The role of internal auditors includes but is not limited to review of internal auditobservations but monitoring of implementation of corrective actions required reviewingof various policies and ensure its proper implementation reviewing of SOPs and thereamendments if any.
Pursuant to Section 204 of the Companies Act 2013 read with The Companies (Appointmentand Remuneration of Managerial Personnel)
Rules 2014 the Company had appointed M/s. SGS Associates Company Secretaries apracticing secretaries firm as the Secretarial Auditor of the Company for the financialyear ending 31st March 2019.
The Secretarial Audit Report does not contain qualification reservation or adverseremark. The Report of Secretarial Audit is annexed as Annexure IV.
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 textile Companies are required to get their costrecords audited. In this connection the Board of Directors of the Company on thecommendation of Audit Committee had approved the appointment of
M/s K. G. Goyal & Co. as the Cost Auditor of the Company for the year ending 31stMarch 2019.
The Company has identified various risks associated with the business. The Company hasadopted a risk management policy which acts as an effective tool in mitigating the variousrisks to which the businesses are exposed. The risk management policies cover areas suchas Environment Health & Safety Statutory Compliances and Returns Energy On TimePerformance Quality Commodity Pricing Outsourcing Budgeting and Planning GovernmentPolicies etc.
The risks identified by the business are systematically addressed to the Board throughmitigating actions on a continuous basis. Further the policy aims at creating andprotecting shareholders value by minimizing threats and weaknesses and identifying andmaximizing opportunities. Pursuant to the policy your Directors periodically review therisks associated with the business or which threaten the prospects of the Company.
Good Corporate Governance is more of a priority than a mere legal obligation. Itinvolves the commitment to run the business in most ethical and transparent manner. Ithelps to build the confidence of the investors and to establish healthy relationship withall the stakeholders. Apart from mandatory practice the Company adopts various voluntarypractices to ensure transparency and accountability at highest level. The Company's visionof achieving its objectives is in line with its consideration for environment safety andpeople.
Report on Corporate Governance along with the Certificate Auditors M/s. S.S. KothariMehta & Co. and M/s. P. K. Deora & Co. Chartered Accountants confirmingcompliance of conditions of
Corporate Governance as stipulated under Point E of Schedule V of SEBI (ListingObligations and Disclosure Requirement) Regulations 2015 forms part of the AnnualReport.
Whistle Blower Policy
The Company in order to provide mechanism to disclose any unethical and improperpractices or any other alleged wrongful conduct or matter of concern in area of accountsfinance management operations employment or any other misconduct in the Company hadlaid down a Vigil Mechanism also known as Whistle Blower Policy to deal with the instanceof fraud and mismanagement if any.
The Company had appointed the nodal officer to whom the complaints can be made. Inexceptional cases an opportunity is provided to the Whistle Blower to make a direct appealto the Chairman of the Audit Committee.
The policy safeguards the whistle Blower from being victimized. The policy has beendisclosed on the website of the Company the link of which is given hereunder:http://www.maraloverseas.com/pdf/Whistle_Blower_Policy.pdf
Management Discussion and Analysis Report
Management Discussion and Analysis Report as required by Schedule V of Regulation34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations) 2015 formspart of the Annual Report.
Internal Control Systems
The Directors had laid down internal financial controls to be followed by your Companyand such policies and procedures adopted by your
Company for ensuring the orderly and efficient conduct of its business includingadherence to our Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information.
The Audit Committee reviews the Executive summary on the internal audit findings alongwith the recommendations and management comments every quarter. Further the Action TakenReport/
Compliances as discussed in the previous meeting is placed in the next meeting alongwith the detailed report. The Internal Auditors also ensure proper compliance of allpolicies and Standard Operating Procedures (SOPs) adopted by the Company. InternalAuditors report directly to the Audit Committee of the Board.
The Company's internal control systems comprise of audit and compliance by in-housestaff supplemented by internal audit checks by the Internal Auditors.
Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo
The information required to be disclosed pursuant to Section 134(3) (m) of theCompanies Act 2013 read with the Rules 8(3) of the Companies (Accounts) Rules 2014 isgiven in Annexure V forming part of this Report.
Particulars of Employeesof
The information pursuant to Section 197 read with Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the relevant statement is annexedas Annexure VI Further disclosures pursuant to Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the statement showingthe name along with the particulars of top ten employees along with the employees drawingremuneration in excess of the limits is annexed as Annexure VII.
Significant Material Changes after Balance Sheet Date Affecting Financial Position
There is no change or commitment which affects the financial position of the Companythat may have occurred between the end of the financial year of the Company to which thefinancial statements relate i. e. 31.03.2019 and the date of report 7th May 2019.
Subsidiaries Joint Ventures and Associates Companies
The Company does not have any Joint Ventures Subsidiaries and Associates Companies
Your Company has not accepted any public deposit within the meaning of provisions ofsection 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits)Rules 2014 and there is no outstanding deposit due for re-payment.
Disclosure under the Sexual Harassment Of Women At Workplace (Prevention ProhibitionAnd Redressal) Act 2013
In line with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 the Company has complied with the provisionsrelating to the constitution of Internal Complaints Committee for reporting concernsrelated to sexual harassment at workplace. Your Directors inform the members that duringthe year under review the Internal Complaint Committee did not report any complaint withregard to sexual harassment under review.
Directors' Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors state that: a.in the preparation of the Annual Accounts the applicable Accounting Standards have beenfollowed and no material departures have been made from the same; b. appropriateAccounting Policies have been applied consistently and they have made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of and Loss of the Company on 31st March 2017 and of the Profit the Companyfor the year ended on that date; c. proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies 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 in preparation ofFinancial Statement.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the financial yearunder review:
I. Issue of equity shares with differential rights as to dividend voting or otherwise.
II. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOS referred to in this Report.
III. No amount has been transferred to General Reserves during the year.
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 Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 under review.
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 Management Discussion and Analysiscontain certain statements relating to the future and therefore are forward looking withinthe meaning of applicable securities laws and regulations. Various factors such aseconomic conditions changes in government regulations tax regime other statues marketforces and other associated and incidental factors may however lead to variation in actualresults.
Your Directors place on record their acknowledgement and sincere appreciation to allour clients customers vendors dealers bankers investors other business associatesCentral and State Government for their continued support and encouragement during the yearand their confidence towards the management. Your Directors would also like to thankemployees at all levels for their hard work dedication and commitment.
For and on behalf of the Board
07th May 2019