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Uniworth Textiles Ltd.

BSE: 500138 Sector: Industrials
NSE: FABWORTH ISIN Code: INE486C01019
BSE 05:30 | 01 Jan Uniworth Textiles Ltd
NSE 05:30 | 01 Jan Uniworth Textiles Ltd

Uniworth Textiles Ltd. (FABWORTH) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting their 28th Annual Report on the business andoperations of the Company together with the Audited Statement of Accounts for the yearended 31st March 2020.

FINANCIAL HIGHLIGHTS

During the year under review financial performance of your Company was as under:

31st March 2020 31st March 2019
(Rs. In Lakh) (Rs. In Lakh)
Sales - -
Profit/(Loss) before Interest and Depreciation & before prior period adjustment (53.11) 59.22
Previous year Adjustment & Extra Ordinary Income - 5.14
Profit/(Loss) before Interest and Depreciation (53.11) 54.08
Less: Finance Cost 1046.43 1010.86
Profit / (Loss) before Depreciation (1099.54) (956.78)
Less: Depreciation 42.64 43.16
Profit / (Loss) before Tax (1142.18) (999.94)
Provision for Taxation - -
Profit /(Loss) after Tax (1142.18) (999.94)
Other Comprehensive Income 1.14 (3.48)
Net Profit / (Loss) after tax for the year (1141.04) (1003.42)
Add : Balance b/f from previous year (32020.84) (31017.42)
Balance carried to Balance Sheet (33161.88) (32020.84)

STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK:

The Company's plants at Raipur and Nagpur continue to be under closure due to acutefinancial distress. The Company was registered as sick industrial undertaking by BIFRhowever with the introduction of Insolvency & Bankruptcy Code 2016 BIFR and AAIFRhave been abolished. During the pendency of proceedings before BIFR the secured creditorby assignment had taken symbolic possession of the secured assets followed by actualphysical possession of the secured assets situated at Nagpur. The secured creditor byassignment has agreed to sell the secured assets of the Company situated at Nagpur to abuyer and the company is exploring the possibilities and modalities of suitableresolution.. However in the meantime ARCIL has filed a Petition under Section 7 of IBC2016 which has been rejected by National Company Law Tribunal (NCLT) Kolkata.

BUSINESS OUTLOOK :

The inherent strengths of the textile industry have seen the textile industry throughrough days and hard times. The World trading system have endangered the stability of thetextile industry and created an atmosphere of uncertainty and turbulence in the industry.But it is also a fact that turbulence is necessary for any change in the system. In aWorld that is fast losing its traditional boundaries and borders are becoming invisiblethere is need to bring about technological improvement structural changes liberalisationfrom controls and regulations increased productivities of labour and machine and reliablequality assurance systems. If there is insecurity inherent in the globalised economythere is also opportunity - opening up of vast markets to Indian textiles and Indianclothing that were earlier closed or regulated and Indian textile industry is ready totake up this opportunity of free trade and secure its well deserved position in theinternational textile arena.

The Economic crisis is continuing to affect the order situation adversely. The on-goingcompetition with China is also making it difficult to generate fresh business. AlthoughChina is the number one apparel export country and the Chinese-made fabrics are still notsatisfactory in respect of color texture quality etc. To be more competitive in thedomestic market the management is pursuing with the Government Authorities for De-bondingof our processing unit.

MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

No material changes affecting the financial position of the company occurred betweenthe end of the financial year to which this financial statements relate on the date ofthis report.

CHANGES IN SHARE CAPITAL:

During the Financial Year 2019-20 there have been no changes in the share capital ofthe Company.

DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS:

The Company has not issued any Equity Shares with differential Rights during thefinancial year.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS:

The Company has not issued any Employee Stock Options during the financial year.

DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES:

The Company has not issued any Sweat Equity Shares during the financial year.

DIVIDEND:

In view of huge accumulated losses the Directors regret their inability to recommendany dividend for the Financial Year 2019-20.

DEPOSITS:

Your Company has not accepted any deposit within the meaning of deposits covered underChapter V of the Companies Act 2013.

FIXED DEPOSITS:

The Company did not accept/renew any fixed deposits from public and no fixed depositswere outstanding or remained unclaimed as on March 31 2020.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm that: i. in the preparation of the annualaccounts the applicable accounting standards have been followed and there are no materialdepartures;

ii. they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitof the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting iv. fraud and other irregularities;they have prepared the annual accounts on a going concern basis; v. they have laid downinternal financial controls to be followed by the Company and such internal financialcontrols are adequate and operating effectively except deficiencies in operatingeffectiveness in respect of old outstanding of trade receivables advances to parties andsome old creditors for expenses; vi. they have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.

COVID-19

The Pandemic "COVID-19" spread has severely impacted business around theworld including India. There has been severe disruption in regular business operations dueto lockdown and emergency measures taken by the Government. The Management has made adetailed assessment of the impact of COVID-19 pandemic and the resultant lockdown on thesignificant uncertainties involved in developing some of the estimates involved inpreparation of the financial statements including but not limited to its assessment ofliquidity and going concern recoverable values of its property plant and equipment andthe net realisable values of other assets. Based on information available as of this dateManagement believes that no further adjustments are required to the financial statements.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. Kamal Sharma(DIN: 02946513) is liable to retire by rotation and being eligible offers himself forre-appointment and the same is proposed for approval at the ensuing AGM.

During the year under review there have been no changes in the Constitution of theBoard.

Ms. Priti Mohta Company Secretary was resigned w.e.f 08.11.2019 from the Company.

DECLARATION BY INDEPENDENT DIRECTOR:

Pursuant to Section 149(7) of the Companies Act 2013 Independent Directors of theCompany have made a declaration confirming the compliance of the conditions of theindependence stipulated in Section 149(6) of the Act.

PARTICULARS OF LOAN GUARANTEES AND INVESTMENTS UNDER SECTION 186:

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 forms part of the Financial Statements.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

Related party transactions that were entered during the financial year were on arm'slength basis and in the ordinary course of business. There were no materially significantrelated party transactions which were in conflict with the interest of the Company.

SUBSIDIARY COMPANIES

The Company does not have any subsidiary company.

AMOUNTS TRANSFERRED TO RESERVES:

In view of huge accumulated losses and current year's losses your Directors wereunable to transfer any amount to the General Reserve Account.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

The details pertaining to conservation of energy technology absorption foreignexchange earnings and outgo are provided as Annexure I which forms part of this report.

RISK MANAGEMENT POLICY:

In terms of Section 134 (3) (n) of the Act the Board of Directors has adopted acomprehensive risk management policy which includes identification of element of risk itsmitigation and other related factor. The Board periodically reviews the same. In view ofParagraph 4.1 of SEBI Circular CIR/CFD/POLICY CELL/2/2014 dated 17th April 2014 no RiskManagement Committee has been constituted since it is not covered by the requirements ofthe above-mentioned Paragraph.

CORPORATE SOCIAL RESPONSIBILITIES

The provisions of Section 135 of the Act in connection with Corporate SocialResponsibility are not applicable to the Company since the Company falls below thethreshold limits.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board of Directors has carried out anannual evaluation of its own performance Board committees and individual directorspursuant to the provisions of the Act. The performance of the Board was evaluated by theBoard after seeking inputs from all the directors on the basis of the criteria such as theBoard composition and structure effectiveness of board processes information andfunctioning etc.

The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc. The Board and the Nomination and RemunerationCommittee ("NRC") reviewed the performance of the individual directors on thebasis of the criteria such as the contribution of the individual director to the Board andcommittee meetings like preparedness on the issues to be discussed meaningful andconstructive contribution and inputs in meetings etc. In addition the Chairman was alsoevaluated on the key aspects of his role.

In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the board as a whole and elected Chairman of the each meetingwas evaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors. The same was discussed in the board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its committees andindividual directors was also discussed.

The Nomination and Remuneration Committee as specified u/s 178 of the Companies Act2013 was formed with a view to reviewing and making recommendations on annual salariesperformance commissions perquisite and other employment conditions of Executives andOfficials. The Committee's also takes into consideration remuneration practices followedby leading Companies as well as information provided by reputed consultants whiledetermining the overall remuneration package.

During the year under review the Nomination and Remuneration Committee met on13.08.2019 details of the meeting have been given in Corporate Governance Report whichforms part of this report.

The following are the members of the Committee at present:

Name Designation * Executive/Non-Executive/Independent
Mr. Rajveersingh Baboosingh Jadon Chairman Non- Executive & Independent
Mr. Vivek Chaudhary Member Non- Executive & Independent
Mr. Kamal Sharma Member Non- Executive & Non-Independent

RATIO OF REMUNERATION OF EACH DIRECTOR TO THE MEDIAN REMUNERATION OF THE EMPLOYEES:

The information as required under Section 197 of the Companies Act 2013 read with Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isavailable. In terms of Section 136 (1) read with its relevant provisions of the CompaniesAct 2013 the Annual Report excluding the aforesaid information is being sent to theMembers of the Company and others entitled thereto. The said information shall be keptopen for inspection at the Registered Office of the Company on every working day of theCompany between 10 a.m. to 12 noon up to the date of the forthcoming 28th Annual GeneralMeeting.

POLICY FOR REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES:

The Company recognizes the fact that there is a need to align the business objectivewith the specific and measurable individual objectives and targets.

The remuneration policy of the company can be accessed to its website athttp://uniworthtextiles.com/other-policies/

CORPORATE GOVERNANCE REPORT:

A Report on Corporate Government together with a Certificate from the Auditors oncompliance thereof required under Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed hereto and forms a part of this report.

MANAGEMENT DISCUSSION ANALYSIS REPORT:

The Management Discussion and Analysis Report for the year under review as stipulatedunder SEBI (Listing Obligations and Disclosure Requirements) Regulations' 2015 with theStock Exchanges in India is presented in a separate section which forms part of theAnnual Report.

NUMBER OF BOARD MEETINGS:

During the Financial Year 2019-20 the Board of Directors of the company met 5 (Five)times details of the meetings has been given in the Corporate Governance Report whichforms part of this report.

AUDIT COMMITTEE:

The Details pertaining to composition of Audit Committee are included in the CorporateGovernance Report which forms part of this report.

STAKEHOLDERS RELATIONSHIP COMMITTEE:

The Details pertaining to composition of Stakeholders Relationship Committee areincluded in the Corporate Governance Report which forms part of this report.

RECEIPT OF ANY COMMISSION BY MD / WTD FROM A COMPANY OR FOR RECEIPT OF COMMISSION /REMUNERATION FROM ITS HOLDING OR SUBSIDIARY:

No receipt of any commission by MD/WTD from a Company has been made.

AUDITORS REPORT:

The observations made by Auditors in their Auditor's Report with reference to notes tofinancial statements are self explanatory and need no comments forms part of this report.

STATUTORY AUDITORS:

M/s. Khandelwal Ray & Co. Chartered Accountant (Firm Registration Number302035E) were appointed as Statutory Auditors of the Company by the members at the 25thAnnual General Meeting held on 23.09.2017 for a period of 5 consecutive years till theconclusion of 30th Annual General Meeting of the Company to be held in the financial year2022-23.

INTERNAL AUDITORS:

The Company has appointed M/s. Sakshi Aggarwal & Co. Chartered Accountants as anInternal Auditors of the Company for the financial year 2020-21.

SECRETARIAL AUDITORS:

In terms of Section 204 of the Companies Act 2013 the Board of Directors at theirmeeting held on 31st July 2020 have appointed M/s K K Sanganeria & AssociatesPracticing Company Secretaries as Secretarial Auditor for conducting Secretarial Auditof the Company for the Financial Year 2020-21. Report of the Secretarial Auditor for thefinancial year ended 31.03.2020 is given as "Annexure II" which forms part ofthis report.

EXTRACT OF ANNUAL RETURN:

The extract of Annual Return in format MGT -9 for the Financial Year 2019-20 has beenenclosed with this report as "Annexure III".

DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL:

No significant & material order has been passed by the Regulators or Courts orTribunal in any case.

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THEFINANCIAL STATEMENTS:

The company has adequate internal control procedures commensurate with the size scaleand complexity of its operations which are well supplemented by surveillance of InternalAuditors.

BOARDS VIEW :

The company has filed suit for enforcement of specific performance of the Agreement onthe same line as in the case of major lenders. The company has disputed the claims of thelenders/ creditors being unsustainable. All compliances with the stock exchanges areupdated and in respect of the status of the company being shown as "Suspended"by BSE Limited and the Calcutta Stock Exchange Limited the company has taken up thematter with both the exchanges as the company is in compliance with SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

DISCLOSURE ON ESTABLISHMENT OF A VIGIL MECHANISM

In pursuant to the provision of section 177(9) & (10) of the Companies Act 2013The Company has formulated a Whistle Blower Policy to establish a vigil mechanism forDirectors and employees of the Company to report concerns about unethical behavior actualor suspected fraud or violation of the company's code of conduct or ethics policy. TheWhistle Blower Policy is available on the website of the Company i.e.www.uniworthtextiles.com

HEALTH SAFETY AND ENVIRONMENT PROTECTION

The Company has complied with all the applicable environmental law and labour laws. TheCompany has been complying with the relevant laws and has been taking all necessarymeasures to protect the environment and maximize worker protection and safety.

INDUSTRIAL RELATIONS:

Industrial Relations continued to remain cordial throughout the year. Your Directorswish to place on record their appreciation for dedicated and sincere services rendered bythe executives staff and workmen at all levels.

POLICY ON PREVENTION OF SEXUAL HARASSMENT

The company is committed to provide a safe and conducive work environment to itsemployee and has formulated "Policy for Prevention of Sexual Harassment".

During the financial year ended 31st March 2020 the Company has not received anycomplaints pertaining to Sexual Harassment.

INDUSTRIAL RELATIONS:

Industrial Relations continued to remain cordial throughout the year. Your Directorswish to place on record their appreciation for dedicated and sincere services rendered bythe executives staff and workmen at all levels.

FRAUD REPORTING

There was no fraud reported by the Auditors of the Company under Section 143(12) of theCompanies Act 2013 to the Audit Committee or The Board of Directors during the yearunder review.

PARTICULARS OF EMPLOYEES:

During the period under review no employee of the Company drew remuneration in excessof the limits specified under the provisions of Section 197(12) of the Companies Act readwith Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and hence no disclosure is required to be made in the AnnualReport.

ACKNOWLEDGEMENT:

Your Directors acknowledge with gratitude the co-operation and assistance received fromthe Central and State Government Financial Institutions Banks Shareholders and othersduring the year under review.

On Behalf of the Board
Place : Kolkata Bahadur Ram Mallah Kamal Sharma
Date : 1st September 2020 Executive Director Director
DIN: 08035016 DIN: 02946513

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