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Tuni Textile Mills Ltd.

BSE: 531411 Sector: Industrials
NSE: N.A. ISIN Code: INE560D01027
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NSE 05:30 | 01 Jan Tuni Textile Mills Ltd
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VOLUME 28000
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P/E 19.00
Mkt Cap.(Rs cr) 2
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Buy Qty 26000.00
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Sell Qty 26000.00
OPEN 0.19
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VOLUME 28000
52-Week high 0.49
52-Week low 0.19
P/E 19.00
Mkt Cap.(Rs cr) 2
Buy Price 0.19
Buy Qty 26000.00
Sell Price 0.19
Sell Qty 26000.00

Tuni Textile Mills Ltd. (TUNITEXTMILLS) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting the 31st Annual Report of yourCompany together with the Audited Statements of Accounts for the year ended March 312018.

(Rs. in lakhs)
Financial Results Year Ended 31.03.2018 Year Ended 31.03.2017
Income 3439.11 2813.18
Profit/(Loss) before Tax & Extra-ordinary Items 20.05 (3.01)
Less : Provision for Taxation (Including Deferred Tax) 31.55 5.46
Less : Provision for Extra-Ordinary Items 2.44 (14.09)
Profit/(Loss) after Tax (13.94) 5.62
Changes due to conversion of accounts from GAAP to Ind AS (3.70) -
Add : Profit/(Loss) brought forward from Previous Year (69.32) (189.99)
Balance carried forward (86.96) (184.37)

OVERVIEW OF ECONOMY

India's economy picked up some pace in FY 2017-18 and the gross domestic product growthwas better than FY 2016-17. The structural reform of The Goods and Services Tax (GST)within a year of demonetisation is expected to provide a boost to the economic growth andinvestments in the long run. With an improving business ecosystem stable macroeconomicindicators and a liberal FDI regime foreign capital inflow has provided impetus to thedomestic economy. According to World Bank's Global Economic Prospects report India's GDPis expected to rise to 7.4% in FY 2018-19 and 7.8% in FY 2019-20.

The Indian textiles industry is among the oldest in the country. It is projected toreach USD 230 billion by 2020 from around USD 120 billion. Currently the domestictextiles industry contributes 10% to the manufacturing output of the country generatesabout 4% to its GDP and employs more than 45 million people. Importantly the sectorcontributes 15% to the export earnings of India. Mitigating the repercussions of currencyfluctuation remains a challenge.

Exports have been a core feature of India's textile sector. The Indian textiles exportmarket estimated at $18 billion is expected to grow at a CAGR of 4% compared to theglobal CAGR of 3% over 2016-26.

The fundamental strength of the textile industry is its strong production base of widerange of fibre and yarns from natural fibres like cotton jute silk and wool to syntheticand manmade fibres such as polyester viscose nylonandacrylic. The challenge here is thefluctuation in prices of the raw materials like wool and increase in oil prices whichincrease the input costs.

PERFORMANCE HIGHLIGHTS & OUTLOOK

The current financial year 2017-18 was difficult time for the Company due to the impactof demonetization as well as implementation of GST on Grey Cloth. The profit margin hascome down drastically due to increase in cost of GST vs. selling price as well asdifference in rate of GST on Grey cloth vs. finished cloth. The abnormal delay in refundof GST has made the Company difficult to manage its working capital and thus has forced tosale a part of land to have liquidity to run its manufacturing unit.

Gross revenue from operations stood at Rs. 3439.11 lakh in comparison to last years'sales of Rs. 2805.42 lakh. In term of PAT the Company has incurred a loss of Rs. 13.94lakh in comparison to last years' net profit of Rs.5.62 lakh.

During the year under review the Company has received Rs. 96.24 lakh representing therealization value on account of sale of part of land at Murbad Dist. Thane. The same hasbeen taken to the books of account as an exceptional item.

The Company is into the business of manufacturing grey cloth at its unit located atMurbad Dist. Thane Maharashtra.

As the Govt. has started to release the refund of GST the Company is hopeful ofrecovering from difficult phase and business will be as usual as the time progresses.

BUSINESS SEGMENT

During the year the Company is into the business of fabric manufacturing i.e.manufacturing of Synthetic Fabric a part of textile products in accordance with theAccounting Standard 17 notified by Companies (Accounting Standards) Rules 2006.

DIVIDEND AND RESERVES

In view of carried forward losses and in order to meet future challenges and financialrequirements your Directors do not propose any dividend for the year under review.

During the year under review no amount has been transferred to General Reserves.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31 2018 was of Rs. 13.17925 Crore. Duringthe year under review the Company has not issued any share with differential votingrights nor granted stock options nor sweat equity. As on March 31 2018 none of theDirectors and/or Key Managerial Person of the Company hold instruments convertible in toEquity Shares of the Company.

FINANCE AND ACCOUNTS

As mandated by the Ministry of Corporate Affairs the financial statements for the yearended on March 31 2018 has been prepared in accordance with the Indian AccountingStandards (IND AS) notified Section 133 of the Companies Act 2013 read with the Companies(Accounts) Rules 2014. The estimates and judgements relating to the Financial Statementsare made on a prudent basis so as to reflect in a true and fair manner the form andsubstance of transactions and reasonably present the Company's state of affairs profitsand cash flows for the year ended March 31 2018.

The Company continues to focus on judicious management of its working capitalreceivables inventories and other working capital parameters were kept under strict checkthrough continuous monitoring.

There is no audit qualification in the standalone financial statements by the statutoryauditors for the year under review.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of Loans Guarantees and Investments if any covered under the provisions ofSection 186 of the Companies Act 2013 are given in the notes to the Financial Statements.

SUBSIDIARY COMPANY

The Company does not have any material subsidiary as defined under the ListingRegulations. However it has formulated a policy for determining its ‘Material'Subsidiaries and the same is available on the website of the Company viz.www.tunitextiles.com.

RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties as defined under the Companies Act2013 and Regulation 23 of Listing Regulations; during the financial year were in theordinary course of business and on an arm's length pricing basis and do not attract theprovisions of Section 188 of the Companies Act 2013 and the Rules made thereunder are notattracted and thus disclosure in term of Section 134(3)(h) r/w Rule 8(2) of the Companies(Accounts) Rules 2014 and under Regulation 34(3) & 53(f) Para A of Schedule V ofSEBI(LODR) Regulations 2015 is attached as Annexure I. Further there are no materiallysignificant transactions with related parties during the financial year which were inconflict with the interest of the

Company. Suitable disclosure as required by the Accounting Standards (AS18) has beenmade in the notes to the Financial Statements. The policy on Related Party Transactions asapproved by the Board is uploaded on the Company's website viz. www.tunitextiles.com.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis on the operations of the Company as prescribedunder Part B of Schedule V read with regulation 34(3) of the Listing Regulations 2015 isprovided in a separate section and forms part of the Directors' Report.

CHANGE IN NATURE OF BUSINESS IF ANY.

There are no changes in the nature of business in the financial year 2017-18.

BOARD EVALUATION

The Board of Directors have laid down the manner for carrying out an annual evaluationof its own performance its various Committees and individual directors pursuant to theprovisions of the Act and relevant Rules and the Corporate Governance requirements are incompliance with Regulation 17 of Listing Regulations 2015. The performance of the Boardwas evaluated by the Board after seeking inputs from all the Directors on the basis ofvarious criteria such as Board Composition process dynamics quality of deliberationsstrategic discussions effective reviews committee participation governance reviews etc.The performance of the Committees was evaluated by the Board after seeking inputs from theCommittee members on the basis of criteria such as Committee composition processdynamics deliberation strategic discussions effective reviews etc. The Nomination andRemuneration Committee reviewed the performance of the individual Directors on the basisof the criteria such as transparency analytical capabilities performance leadershipethics and ability to take balanced decisions regarding stakeholders etc.

NUMBER OF MEETINGS OF THE BOARD

The details of the Board Meetings and other Committee Meetings held during thefinancial year 2017-18 are given in the separate section of Corporate Governance Report.

BOARD COMMITTEES

All Committees of the Board of Directors are constituted in line with the provisions ofthe Companies Act 2013 and applicable regulations of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

MANAGEMENT

There is no change in management of the Company during the year under review.

DIRECTORS

There is no change in composition of Board during the year under review.

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 Regulation16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

Further none of the Directors of the Company are disqualified under sub-section (2) ofSection 164 of the Companies Act 2013.

INDEPENDENT DIRECTORS

As per provisions of Section 149 of the 2013 Act independent directors shall holdoffice for a term up to five consecutive years on the board of a company but shall beeligible for re-appointment for another term up to five years on passing of a specialresolution by the company and disclosure of such appointment in

Board's Report. Further Section 152 of the Act provides that the independent directorsshall not be liable to retire by rotation in the Annual General Meeting (‘AGM') ofthe Company.

As per requirements of Regulation 25 of Listing Regulations a person shall not serveas an independent director in more than seven listed entities: provided that any personwho is serving as a whole time director in any listed entity shall serve as an independentdirector in not more than three listed entities. Further independent directors of thelisted entity shall hold at least one meeting in a year without the presence ofnon-independent directors and members of the management and all the independent directorsshall strive to be present at such meeting.

DETAILS OF DIRECTORS / KMP APPOINTED AND RESIGNED DURING THE YEAR

Sl. No. Name Designation Date of Appointment Date of Resignation
1. - - - -

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS TRIBUNALS OR COURTS

There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND DATE OF REPORT

There have been no material changes and commitments affecting the financial position ofthe Company between the end of Financial Year and date of the report.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanationsobtained your Directors make the following statement in terms of Section 134(3)(c) of theCompanies Act 2013:

1. that in the preparation of the Annual Accounts for the year ended March 31 2018the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;

2. 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 31 2018 and of theprofit/(loss) of the Company for the year ended on that date;

3. that the Directors have taken proper and sufficient care for the 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;

4. the annual accounts have been prepared on a going concern basis;

5. that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

6. that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

BUSINESS RISK MANAGEMENT

Risk management is embedded in your Company's operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Company's approach toaddressing business risks is comprehensive and includes periodic review of such risks anda framework for mitigating controls and reporting mechanism of such risks. The riskmanagement framework is reviewed periodically by the Board and the Audit Committee.However provision of Regulation 21 of Listing Regulations for constitution of RiskManagement Committee is not applicable to the Company.

INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

Your Company has an Internal Control System which is commensurate with the sizescale scope and complexity of its operations. To maintain its objectivity andindependence an independent firm of Chartered accountants has been appointed as theInternal Auditors who report to the Chairman of the Audit Committee of the Board.

The Internal Auditors monitor and evaluate the efficacy and adequacy of internalcontrol system in your Company its compliance with operating systems accountingprocedures and policies of your Company. Based on the report of the Internal Auditorsplaced before the Audit Committee process owners undertake corrective action in theirrespective areas and thereby strengthen the controls. The internal controls have beenreported by the Auditors to be adequate and effective during the year.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Company i.e.www.tunitextiles.com

INFORMATION TECHNOLOGY

Innovation and Technology are synonymous with the Company. The investment in technologyacts as a catalyst and enables the Company to be innovative.

RESEARCH & DEVELOPMENT

The Company believes that technological obsolescence is a reality. Only progressiveresearch and development will help us to measure up to future challenges andopportunities. We invest in and encourage continuous innovation. During the year underreview expenditure on research and development is not significant in relation to thenature size of operations of your .

AUDITORS

Statutory Auditors

M/s. Mehta Kothari & Associates Chartered Accountants Mumbai (FRN : 106247W) arethe statutory auditors of the Company for the year ended March 31 2018. Their appointmentas the statutory auditors will be ratified at the ensuing Annual General Meeting pursuantto the provisions of Section 139 of the Companies Act 2013 and Rules made thereunder.

There is no audit qualification reservation or adverse remark for the year underreview.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s G. S. Bhide & Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company.

The Report of the Secretarial Audit Report in the form of MR-3 is annexed in thisAnnual Report as Annexure II.

Internal Auditors

The Company has appointed M/s D. Thakkar & Associates Chartered AccountantsMumbai (FRN 132824W) to undertake the Internal Audit of the Company.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 extract ofthe Annual Return for the financial year ended 31st March 2018 made under theprovisions of Section 92(3) of the Act is attached as Annexure III to this report.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197(12) read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company is as under -

i the ratio of the remuneration of each Directors & KMP Ratio
director to the median remuneration of the employees of the company for the financial year; Narendra Kumar Sureka 2.21:1
Pradeep Sureka 2.21:1
Archit Sureka 1.20:1
Mamta Jain 0.68:1

1. The median remuneration of employees of the Company was Rs. 351000/-

2. Figures has been rounded off wherever necessary

ii The percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year; Name Designation Increase %
Narendra Kumar Sureka Managing director 29.16
Pradeep Sureka whole time director 29.16
Archit Sureka CFO 6.06
Mamta Jain CS 0.00

 

iii the percentage increase/decrease in the median remuneration of employees in the financial year; 22.62%
iv the number of permanent employees on the rolls of Company 63 employees as on 31.03.2018
v the explanation on the relationship between average increase remuneration and company performance; The profit before tax for the financial year ended March in 31 2018 Increased by 240.61% whereas the increase in median remuneration was 18.57% in line with industry standard and the performance of the company
vi comparison of the remuneration of the Key Managerial Personnel against the performance of the company; The total remuneration of key Managerial Personnel increased by 20.37% from Rs. 2210000/- in 2017-18 to Rs. 1836000/- in 2016-17 whereas the Profit before Tax increased by 240.61% to Rs. 2005113/- in 2017-18 (`1425063/- in 2016-17)

 

Particulars 31st March 2018 31st March 2017
vii variations in the market capitalisation of the company price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies and in case of unlisted companies the variations in the net worth of the company as at the close of the current financial year and previous financial year; Market Capitalization 640 Lakhs 640 Lakhs
Price Earnings Ratio -44.55% -54.44%
Networth of the Company 123096021/- 124860960/-
The Company has not made any public issue during the year

 

viii Average percentile increase in salaries of employees other than managerial personnel 48.62%

 

ix Comparison of each remuneration of key managerial personnel against the performance of the company Particulars 31st March 2018 Reason against performance of the company
Narendra Kumar Sureka 775000/- Profit before tax decreased by 42.77% and profit after tax decreased by 64.41% in FY 2017-18
Pradeep Sureka 775000/-
Archit Sureka 420000/-
Mamta Jain 240000/-

 

x The key parameters for any variable component of remuneration availed by the directors; None
xi The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year; None
xii Affirmation remuneration policy of the company. Remuneration paid to all Employees is in accordance with the Remuneration Policy

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013 READ WITH RULES

Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 read with Rules thereunder the Companyhas not received any complaint of sexual harassment during the year under review.

PARTICULARS UNDER SECTION 134(3)(m) OF THE COMPANIES ACT 2013

The Company is engaged in the business of manufacturing Synthetic Fabric. Theinformation regarding Conservation of Energy Technology Absorption Adoption andInnovation and the information required under section 134(3)(m) of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014 are reported to be as under:

MURBAD UNIT- ELECTRICITY 2017-2018 2016-2017
Electricity Purchased [Units (KWH)] 1402439 1449857
Total Amount (Rs.) 4380200 4067778
Average Rate (Rs.) 3.12 2.81
Consumption Per Unit of Production
Cloth Production (Mtrs.) 1623422 2566575
Cost of Electricity Consumption (Rs.) / Mtrs. 2.70 1.58

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has earned sum of Rs. 8185732/- (Equivalent to USD 128697.24) during thecurrent financial year while outgo in foreign currency was Nil.

PUBLIC DEPOSITS

During the year under review your Company has not accepted any deposits from thepublic within the meaning of section 73 of the Companies Act 2013 and the rules thereunder.

REPORT ON CORPORATE GOVERNANCE

As per Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on corporate governancepractices followed by the Company confirming together with compliance certificateforms an integral part of this Report.

CAUTIONARY STATEMENT

Statements in this Directors' Report and Management Discussion and Analysis describingthe Company's objectives projections estimates expectations or predictions may be"forward-looking statements" within the meaning of applicable securities lawsand regulations. Actual results could differ materially from those expressed or implied.

APPRECIATION

Your Directors wish to place on record their appreciation towards the contribution ofall the employees of the Company and their gratitude to the Company's valued customersbankers vendors and members for their continued support and confidence in the Company.

By order of the Board
For TUNI TEXTILE MILLS LIMITED
Mumbai May 30 2018
Registered Office : Narendra Kumar Sureka
63/71 Dadiseth Agiary Lane DIN : 01963265
3rd Floor Kalbadevi Road Mumbai-400002. Managing Director

Annexure I

DETAILS OF RELATED PARTY TRANSACTIONS

A. (Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2)of the Companies (Accounts) Rules 2014) All related party transactions entered during theyear were in ordinary course of business and on arm's length basis and the same have beendisclosed under Note No.37 of the Notes to Financial Statements.

No material related party transactions arising from contracts/ arrangements withrelated parties referred to in the Section 188(1) of the Companies Act 2013 were enteredduring the year by the Company. Accordingly the disclosure of related party transactionsas required under Section 134(3)(h) of the Companies Act 2013 in Form AOC-2 is notapplicable.

B. Disclosures pursuant to Regulation 34(3) & 53(f) and Para A of Schedule V ofSEBI (LODR) Regulations 2015

Sl. No. In the Account of Disclosures of amount at the year end and the maximum amount of loans/advances/Investments outstanding during the year.
1. Holding Company • Loans and advances in the nature of loans to subsidiaries by name and amount
• Loans and advances in the nature of loans to associates by name and amount
• Loans and advances in the nature of loans to Firms/Companies in which directors are interested by name and amount
2. Subsidiary • Loans and advances in the nature of loans to subsidiaries by name and amount Not Applicable
• Loans and advances in the nature of loans to associates by name and amount
• Loans and advances in the nature of loans to Firms/Companies in which directors are interested by name and amount
3. Holding Company • Investment by the loanee in the shares of parent Company and subsidiary Company has made a loan or advance in the nature of loan.

 

By order of the Board
For TUNI TEXTILE MILLS LIMITED
Mumbai May 30 2018
Registered Office : Narendra Kumar Sureka
63/71 Dadiseth Agiary Lane DIN : 01963265
3rd Floor Kalbadevi Road Mumbai-400002. Managing Director