DIRECTORS REPORT FOR THE FINANCIAL YEAR 2018-2019
Your Directors have pleasure in presenting their 27th Annual Report on the business andoperations of the Company together with the Audited Statement of Accounts for the yearended 31st March 2019.
During the year under review financial performance of your Company was as under:
| ||31st March 2019 ||31st March 2018 |
| ||(Rs. In Lakh) ||(Rs. In Lakh) |
|Sales ||- ||1091.63 |
|Pro t/(Loss) before Interest and Depreciation & before prior period adjustment ||59.22 ||(970.43) |
|Previous year Adjustment & Extra Ordinary Income ||5.14 ||29.73 |
|Pro t/(Loss) before Interest and Depreciation ||54.08 ||(1000.16) |
|Less: Finance Cost ||1010.86 ||954.29 |
|Pro t / (Loss) before Depreciation ||(956.78) ||(1954.45) |
|Less: Depreciation ||43.16 ||43.72 |
|Pro t / (Loss) before Tax ||(999.94) ||(1998.17) |
|Provision for Taxation ||-- || |
|Pro t /(Loss) after Tax ||(999.94) ||(1998.17) |
|Other Comprehensive Income ||(3.48) ||(1.12) |
|Net Pro t / (Loss) after tax for the year ||(1003.42) ||(1999.29) |
|Add : Balance b/f from previous year ||(31017.42) ||(29018.13) |
|Balance carried to Balance Sheet ||(32020.84) ||(31017.42) |
STATE OF COMPANYS AFFAIRS AND FUTURE OUTLOOK :
The Companys plants at Raipur and Nagpur continue to be under closure due toacute financial distress.
The Company was registered as sick industrial undertaking by BIFR however with theintroduction of Insolvency & Bankruptcy Code 2016 BIFR and AAIFR have beenabolished. During the pendency of proceedings before BIFR the secured creditor byassignment had taken symbolic possession of the secured assets followed by actual physicalpossession of the secured assets situated at Nagpur. The secured creditor by assignmenthas agreed to sell the secured assets of the Company situated at Nagpur to a buyer and thecompany is exploring the possibilities and modalities of suitable resolution. The Companyhas led a Suit inter alia for speci c performance against the lenders beforeHonble High Court of Calcutta which is subjudice. However in the meantime ARCIL hasled a Petition under Section 7 of IBC 2016 which is being contested by the company.
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 the textile industry andcreated an atmosphere of uncertainty and turbulence in the industry. But it is also a factthat turbulence is necessary for any change in the system. In a World that is fast losingits traditional boundaries and borders are becoming invisible
10 Uniworth Textiles Limited there is need to bring about technologicalimprovement structural changes liberalisation from controls and regulations increasedproductivities of labour and machine and reliable quality assurance systems. If there isinsecurity inherent in the globalised economy there is also opportunity opening upof vast markets to Indian textiles and Indian clothing that were earlier closed orregulated and Indian textile industry is ready to take up this opportunity of free tradeand secure its well deserved position in the international textile arena The Economiccrisis is continuing to affect the order situation adversely. The on-going competitionwith China is also making it dif cult to generate fresh business. Although China is thenumber one apparel export country and the Chinese-made fabrics are still not satisfactoryin respect of color texture quality etc. To be more competitive in the domestic marketthe management is pursuing with the Government Authorities for De-bonding of ourprocessing 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 2018-19 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.
In view of huge accumulated losses the Directors regret their inability to recommendany dividend for the Financial Year 2018-19.
Your Company has not accepted any deposit within the meaning of deposits covered underChapter V of the Companies Act 2013
The Company did not accept/renew any fixed deposits from public and no fixed depositswere outstanding or remained unclaimed as on March 31 2019.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability con rm that:
i. in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
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 pro tof the Company for that period;
iii. they have taken proper and suf cient 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 fraud and other irregularities;
iv. they have prepared the annual accounts on a going concern basis;
v. they have laid down internal financial controls to be followed by the Company andsuch internal financial controls are adequate and operating effectively exceptdeficiencies in operating effectiveness in respect of old outstanding of tradereceivables advances to parties and some old creditors for expenses;
vi. they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Ms. Chanchal Ashok Khandelwal (DIN: 07579349) retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers herself for re-appointment.
Appropriate Resolution seeking your approval for her re-appointment is appearing in theNotice convening the Annual General Meeting.
Since the last Annual General Meeting Mr. Mukesh Mandwal (DIN: 07144137) IndependentDirector and Ms. Mohana Surendra Pingale (DIN: 07093321) Independent Director haveresigned from the Board of Directors of the Company w.e.f. 30.03.2019.
Since the last Annual General Meeting Mr. Anil Kumar Mehrotra CFO has resignedw.e.f. 13.08.2019 and Mr. Bahadur Ram Mallah Executive Director has been appointed as CFOw.e.f. 13.08.2019.
The Board of Directors of the Company at its meeting held on 30.03.2019 on therecommendation of the Nomination & Remuneration Committee co-opted Mr. RajveersinghBaboosingh Jadon (DIN: 08396518) as an Additional Director (Non-Executive IndependentDirector) and Mr. Vivek Chaudhary (DIN: 08396579) as an Additional Director(Non-Executive Non-Independent Director) of the Company subject to the approval ofmembers at the ensuing Annual General Meeting in accordance with the provisions ofSections 149 152 161 read with Schedule IV and any other applicable provisions if anyof the Companies Act 2013 and Rules framed thereunder.
The Board on the recommendation from Nomination & Remuneration Committee proposesto the members for their approval through Ordinary Resolution to appoint Mr. Jadon and Mr.Chaudhary as Independent Directors of the Company for a period of 5 years with effect fromthe ensuing Annual General Meeting i.e. 30.09.2019. Appropriate Resolution seeking yourapproval for their appointment is appearing in the Notice convening the Annual GeneralMeeting.
DECLARATION BY INDEPENDENT DIRECTOR:
Pursuant to Section 149(7) of the Companies Act 2013 Independent Directors of theCompany have made a declaration con rming 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 onarms length basis and in the ordinary course of business. There were no materiallysignificant related party transactions which were in con ict with the interest of theCompany.
The Company does not have any subsidiary company.
AMOUNTS TRANSFERRED TO RESERVES:
In view of huge accumulated losses and current years 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.
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 Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof 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 speci ed 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 and Ofcials. The Committees 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 twice on14.08.2018 and
30.03.2019 details of the meeting have been given in Corporate Governance Reportwhich forms 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 27th 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 speci c 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 Governance 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 withthe Stock Exchanges in India is presented in a separate section which forms part of theAnnual Report.
NUMBER OF BOARD MEETINGS:
During the Financial Year 2018-19 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.
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.
The observations made by Auditors in their Auditors Report with reference tonotes to financial statements are self explanatory and need no comments forms part ofthis report.
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.
The Company has appointed M/s. Ganeriwala & Associates Chartered Accountants asan Internal Auditors of the Company for the financial year 2019-20.
In terms of Section 204 of the Companies Act 2013 the Board of Directors at theirmeeting held on 30th May 2019 have appointed M/s K K Sanganeria & AssociatesPracticing Company Secretaries as Secretarial Auditor for conducting Secretarial Auditof the Company for the Financial Year 2019-20. Report of the Secretarial Auditor for thefinancial year ended 31.03.2019 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 2018-19 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 led suit for enforcement of speci c performance of the Agreement on thesame 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 companys code of conduct or ethics policy.The Whistle 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 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 2019 the Company has not received anycomplaints pertaining to Sexual Harassment.
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 speci ed 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 Managerial Personnel) Rules 2014 and henceno disclosure is required to be made in the Annual Report.
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
| ||Bahadur Ram Mallah ||Kamal Sharma |
|Place : Kolkata ||Executive Director ||Director |
|Date : 3rd September 2019 ||DIN: 08035016 ||DIN: 02946513 |
ANNEXURE - I TO THE DIRECTORS REPORT
Particulars of Energy Conservation Technology Absorption and Foreign Exchange Earnings& Outgo required under the Companies (Accounts) Rules 2014
A. ENERGY CONSERVATION
As the cost per unit of Electricity Furnace Oil & Coal is regularly increasing itis our consistent endeavor to bring saving in energy consumption. Periodic energy auditsare conducted to improve energy performance and in line of that we have taken followingsteps to ensure conservation of the energy:
1) Changing of energy ef cient LED Lights in place of Fluorescent Lights.
2) Installation of Inverters in Ring Frame Machinery which ensures energy saving.
3) Modi cation of compressor pipe line for energy conservation.
ENERGY CONSERVATION :
|A) POWER AND FUEL CONSUMPTION ||2018-19 ||2017-18 |
|I Electricity || || |
|a) Purchase Unit (KWH in lacs) || ||6.52 |
|b) Total Amount (Rs. In lacs) || ||46.64 |
|c) Rate/KWH (In lacs) || ||7.15 |
|B) CONSUMPTION PER UNIT PRODUCTION || || |
|Production (Units in Linear Mts. In lacs) || || |
|Pure Wool Fabrics || ||0.83 |
|Polywool || ||2.63 |
|Others || ||0.00 |
|Electricity per Linear Mts. (Units) || || |
|Pure Wool Fabrics || ||0.50 |
|Polywool || ||0.50 |
|Others || ||0.50 |
B. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION
|1. ||Efforts in brief made towards technology absorption adaptation and innovation ||: ||We have updated our technical know how with latest technologies and expertise for upgradation of our product ranges. |
|2. ||Bene t derived as a result of the above efforts e.g. products improvement cost reduction product development import substitution etc. ||: ||Achieved value added products. |
| || || ||Training programmes are conducted to the employees at all levels with the help of latest techniques. |
| || || ||Both the plants of the company in Raipur as well as Nagpur are continuing with ISO 9001-2000 Certification. |
RESEARCH & DEVELOPMENT (R & D) :
|1. ||Speci ed areas in which R & D Carried out by the Company ||: ||Development of Super 150s Wool Fabric in lighter weight suit. |
| || || ||Development of Natural Stretch Fabric in Super ne wool fabric. |
| || || ||Development of Cotton Wool Fabric for Suits & Trouser. |
| || || ||Development of Wool Ramie Fabric for Trouser. |
| || || ||Development of various nishes on Fabric wrinkle resist Finish Ice touch Finish Nano nish etc. |
|2. ||Bene t derived as a result of the above R & D ||: ||The developments are successful and accepted in international market. |
| || || ||We continue to occupy the status of High quality Fabric manufacturers. |
|3. ||Future plan of action || ||We continue to occupy the status of High quality |
| || || ||Fabrics manufactures. |
|4. ||Expenditure on R & D || ||2018-2019 ||2017-2018 |
| || || ||(Rs.) ||( Rs.) |
| ||a) Capital ||: || ||10145 |
| ||b) Recurring ||: || ||400248 |
C. FOREIGN EXCHANGE EARNINGS AND OUTGO :
| ||2018-19 ||2017-18 |
| ||` ( In Lakh) ||` ( In Lakh) |
|a) Foreign Exchange Earnings || || |
|b) Foreign Exchange Outgo || || |
|i) CIF Value of Imports || || |
|Raw Material || || |
|Capital Goods || || |
|Components & Spare Parts || || |
|ii) Others || || |
| || ||On Behalf of the Board |
| ||Bahadur Ram Mallah ||Kamal Sharma |
|Place : Kolkata ||Executive Director ||Director |
|Date : 3rd September 2019 ||DIN: 08035016 ||DIN: 02946513 |