Your Directors have pleasure in presenting the 39th Annual Report togetherwith the Audited Financial Statements of the Company for the financial year ended 31stMarch 2020.
|Financial Highlights ||Year ended 31.03.2020 ||Year ended 31.03.2019 |
|Sales ||66399.94 ||72418.29 |
|Profit before Interest & Depreciation ||6680.26 ||8643.40 |
|Less:Interest ||4877.88 ||4839.25 |
|Profit/(Loss) before Depreciation ||1802.38 ||3804.15 |
|Less : Depreciation ||2245.67 ||2373.51 |
|Profit/ (Loss) before Tax ||(443.29) ||1430.64 |
|Less : Provision for Taxation - Current Tax/MAT ||- ||334.01 |
|- MAT Credit ||- ||(40.48) |
|- Deferred Tax Liability/(Assets) ||(185.26) ||(74.75) |
|- MAT Credit earlier year/Charged Earlier Year ||- ||- |
|- Tax/MAT for earlier years ||- ||- |
|- Tax Adjustment for the earlier year ||33.92 ||0.02 |
|Net Profit/ (Loss) after Tax ||(291.95) ||1211.84 |
|Add : Surplus brought from previous year ||3276.07 ||2988.97 |
|Less: Adjustments & amounts transferred to General Reserves ||- ||(1000) |
| ||3022.63 ||3276.07 |
|Appropriations : || || |
|Proposed Dividend ||NIL ||NIL |
|Corporate Dividend Tax ||NIL ||NIL |
|Surplus Carried to Balance Sheet ||3022.63 ||3276.07 |
| ||3022.63 ||3276.07 |
PERFORMANCE REVIEW/STATE OF AFFAIRS OF THE COMPANY
A. Yarn Spinning Dyeing and Fabric
During the year under review your Company has achieved a sales turnover of '66399.94lacs against sales turnover of '72418.29 lacs during the previous year a decrease of8.31% and a net loss (after tax) of '(291.95) lacs for the current year against net profit(after tax) of '1211.84 lacs during the previous year. The exports of the company for thecurrent financial year were '24828.23 lacs against '26543.83 lacs for the previousfinancial year.
During the year under review Indian Cotton prices though being the largest producerof cotton in the world remained higher than International prices of Cotton in the firsttwo quarters due to increase of MSP by the Govt. of India for the kharif crop 2018-
19 (from 1/9/19 to 31/8/20) and huge purchases by the Cotton Corporation of India. Thisincrease in domestic raw material prices for the company impacted the profitability of thecompany to some extent. The US-China trade war has also affected the sentiments in theworldwide textile markets. China's share in India's exports of yarns is almost 30% whichwas affected due to this. Yarn exports was further impacted due to the spread of theCovid-19 pandemic in China towards the end of the last calendar year whereby many textilemanufacturing units closed down in China and thereafter in the rest of the world due tothe lockdowns world over towards the end of the financial year. Large number of domestic /international orders were cancelled as retail stores remained shut and the impact ofreduced garment / retail sales had impacted the demand of yarn and its prices therebyaffecting the profitability of the Company. The Company being manufacturer of value addedyarns / fabrics
was severely impacted due to COVID-19 pandemic
B. Hydro Power Project of Company
The Company's Manuni Hydro electric Power Project (3.5 M.W.) at Dharamshala Distt.Kangra Manuni Khad (H.P.) has been synchronized with H.P.S.E.B.L. Grid on 31.03.2017.Further during the year under in the review Manuni Hydro electric Project has generatedabout 141 lacs units against 110 lacs units in the previous year.
ACCOLADES AND RECOGNITIONS
We are delighted to inform you that your Company conferred with Silver Trophy by'TEXPROCIL' for second Highest Exports of Cotton Yarn (Processed Yarns) in the Category IIfor F.Y. 2018-19. Apart from this your Company is making persistent efforts to maintainits distinguish position in the competitive environment.
modernisation & EXPANSION
During the year under review the Company has taken several progressive steps formodernization/ expansion of plants. Major details are listed below:
(a) New Auto coner X6 - 01 no state of art machine purchased with latest technologyhaving measure such as energy saving and high productivity. Besides this reduction incompressed air consumption.
(b) Company has installed TEXPART Spindle CS-1 on one Ring Frame having 1200 spindlesto enhance power saving & getting better yarn quality.
(c) Company has done conversion on R/F 09 Nos. from belt drive to tyre coupling to getsmart amount of power saving & better performance.
(d) New MBO - 01 no state of art machines purchased with latest technology havingmeasure such as energy saving and high productivity.
The paid up Equity Share Capital as at 31st March 2020 was '198200000/-(comprised of 19820000 equity shares of '10/- each). During the year under review theCompany has neither issued any shares nor granted stock options or sweat equitypreference shares and also not made any provision for purchase of its own shares byemployees or by trustees.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loan or provided any security/ guarantee as per section186 of the Companies Act 2013 during the year 2019-20. The Investments under section 186of the Act are given in the Financial Statements forming part of the Annual Report.
The Company has not accepted /renewed any deposits from the public during the FY2019-20.
DIVIDEND & RESERVES
Keeping in view to conserve the resources your Directors do not recommend any dividendfor the FY 2019-20. During the year under review Company has suffered losses so there isno amount proposed to carry from P&L account to General reserves.
During the year under review no unclaimed and unpaid dividend was pending for transferto IEPF Authority. Although the unclaimed dividend and shares already transferred to theIEPF Authority by the Company in the previous years can be claimed by the concernedshareholders by approaching the Investor Education and Protection Fund Authority.
NUMBER OF MEETINGS HELD
The details of Board and Committee Meetings are given in the Corporate GovernanceReport.
DIRECTORS/ KEY MANAGERIAL PERSONNEL
Shri Chandra Mohan an Independent Director passed away on 25.12.2019 hence ceased tobe Director of the Company. The Board places on record its deep sense of gratitude andappreciation for immense contribution strategic guidance provided by Shri Chandra Mohanduring his tenure as an Independent Director of the Company.
Shri Ashish Bagrodia Chairman & Managing Director shall be liable to retire byrotation at the ensuing General Meeting being eligible he has offered himself forre-appointment.
Furthermore the current term of appointment of Shri Ashish Bagrodia Chairman andManaging Director shall expire on 31.01.2021 and the Board has proposed hisre-appointment subject to the approval of the shareholders in the ensuing Annual GeneralMeeting.
The first term of appointment of Smt. Neena Singh as an Independent Director of theCompany shall expire on 27.09.2020 being eligible has offered herself for re-appointmentfor further term of five consecutive years.
Shri Anil Kumar Sharma have been appointed as an Additional Director- designated asExecutive Director & CEO of the Company w.e.f. 13th February 2020 subjectto the approval of Shareholders of the Company at ensuing General Meeting.
Smt. Manju Lakhanpal (DIN: 07130592) was appointed as an Additional Director witheffect from 01st April 2020 and now her
appointment as a Director is subject to the approval of Shareholders of the Company atensuing General Meeting.
Shri Arun Kumar Basu (DIN: 08747388) was appointed as an Additional Director witheffect from 29th May 2020 and now his appointment as a Director is subject tothe approval of Shareholders of the Company at ensuing General Meeting.
There was no change in the Key Managerial Personnel during the year.
ANNUAL EVALUATION OF BOARD AND ITS COMMITTEES AND OF INDIVIDUAL DIRECTORS.
As per Companies Act 2013 and Listing Regulations Board has adopted formal mechanismfor evaluating its performance and as well as that of its committees individualDirectors including the Chairman of the Board in compliance of Companies Act 2013 andListing Regulations. The exercise was carried out through a structured evaluation processcovering various aspects of the Boards functioning such as composition of the Board itscommittee & members their experience & competencies performance of specificduties & obligations governance. Broadly the performance of Non-Independent/Executive/Whole Time Director(s) was evaluated on the basis of their ownperformance expertise intelligence their qualitative & quantitative contributiontowards operational achievements organizational performance etc. The performance ofNon-Executive Independent Directors were evaluated on the basis of their constructiveparticipation's in Board/Committee/General meetings their informed & balanceddecision-making ability to monitor financial controls systems & certain alliedparameters. The annual performance evaluation of various Board Committees constitutedunder Companies Act & Listing Regulations was made on the basis of their respectiveterms of reference discharge of functions governance etc.
The separate Meeting of independent Directors was held on 13th February2020 to review the performance of Non-Independent directors including the Chairman and theBoard as a whole as per Code of Independent Directors under Companies Act 2013 and ListingRegulations. The Independent Directors also reviewed the quality content and timelinessof follow of information between Management and the Board.
The Performance Evaluation Policy of Board of Directors is uploaded on the Company'swebsite i.e. www.winsometextile.com under corporate policies.
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial PersonnelSenior Management and their Remuneration. The said policy has been uploaded on the websiteof the Company. The Key provisions of Nomination and Remuneration policy are appended asan Annexure I to the Board's report.
The company has duly constituted an Audit Committee the scope of which is quitecomprehensive and is in conformity with the provisions of the Companies Act 2013 andListing Regulations. The composition of the Audit Committee is given in CorporateGovernance Report.
All the recommendations of the Audit Committee were accepted by the Board.
DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted the Whistle Blower Policy/Vigil mechanism for directors andemployees to report concerns about unethical behavior actual or suspected fraud orviolation of the Company's Code of Conduct and Ethics. Such mechanism/ policy is alsouploaded on the website of the Company i.e. www.winsometextile.com under the head"corporate policies".
At the 36th AGM held on 04th September 2017 the Members approvedthe appointment of M/s B. Chhawchharia & Co. Chartered Accountants (Firm RegistrationNo. 305123E) as Statutory Auditors of the Company to hold office for a period of fiveconsecutive years from the conclusion of 36th AGM till the conclusion of the 41stAGM on a remuneration mutually agreed upon between the Board of Directors and theStatutory Auditors subject to ratification of their appointment by Members at every AGMif so required under the Act.
The requirement to place the matter relating to appointment of auditors forratification by Members at every AGM has been done away by the Companies (Amendment) Act2017 with effect from May 7 2018. Accordingly no resolution is being proposed forratification of appointment of statutory auditors at the ensuing AGM and a note in respectof same has been included in the Notice for this AGM.
The auditor's report is self-explanatory and requires no explanation.
COST AUDIT & AUDITORS
M/s Aggarwal Vimal & Associates Cost Accountants were appointed as Cost Auditorsof your Company for auditing the cost accounts records for the financial year 2019-20under provisions of Section 148 of the Companies Act 2013. They are likely to submit CostAudit Report within the prescribed time limit. Further the Company has made and maintainedproper cost records as specified by the central government under sub-section (1) ofsection 148 of the Companies Act 2013 for its business activities carried out during theyear.
Furthermore the Board has appointed M/s K.K. Sinha & Associates Cost Accountantsas Cost Auditors of the Company for the financial year 2020-21 on a remuneration of'75000/- (Rupees Seventy Five
Thousand Only) . The Company has received written confirmation(s) from M/s K.K. Sinha& Associates Cost Accountants to the effect that their appointment if made wouldbe in accordance of provisions of section 148 of Companies Act 2013 and that they are notdisqualified for such appointment within the meaning of section 141 of Companies Act 2013read with Companies (Audit & Auditors) Rules 2014.
SECRETARIAL AUDIT & AUDITORS
Shri Ramesh Bhatia Practicing Company Secretary was appointed to conduct thesecretarial audit of the Company for the financial year 2019-20 as required under Section204 of the Companies Act 2013 and Rules made there under. The secretarial audit reportfor FY 2019-20 is appended as an Annexure II to the Board's report. The Secretarialauditors' report for the year under review contain no adverse remarks qualificationshence no comments required.
Furthermore the Board has re-appointed Shri Ramesh Bhatia Practicing CompanySecretary as secretarial auditor of the Company for the financial year 2020-21.
ANNUAL SECERTARIAL COMPLIANCE REPORT
The Company has undertaken an audit for the financial year 201920 for all applicablecompliances as per SEBI Regulations and Circulars / Guidelines issued thereunder. TheAnnual Secretarial Compliance Report has been submitted to the stock exchanges within theprescribed limits/relaxations as provided in SEBI (LODR) Regulations 2015.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
All Related Party transactions entered during the financial year were on arm's lengthbasis and in the ordinary course of business. There were no materially significant relatedparty transactions with the Company's Promoters Directors Management or their relativeswhich could have had a potential conflict with the interests of the Company. Transactionswith related parties entered by the Company in the normal course of business areperiodically placed before the Audit Committee for its review/approval under omnibusapproved route. There was no material contract or arrangement or transactions with RelatedParty during the year. Thus disclosure in form AOC-2 is not required.
The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Companies Act 2013 therules there under and Listing Regulations. This Policy as considered and approved by theBoard has been uploaded on the website of the Company at web linkhttp://www.winsometextile.com/files/pdf/68- 63-file.pdf.
PARTICULARS OF EMPLOYEES
The information under Section 197 read with Rule 5(1) 5(2) & 5(3)
of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isappended as an Annexure III & Annexure IV to the Board Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of the Act is annexed as an Annexure V which forms an integralpart of this Report and is also available on the Company's website atwww.winsometextile.com.
The company maintained healthy cordial and harmonious industrial relations at alllevels.
DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
The Company has been addressing various risks through well- defined risk managementpolicy/procedures which in the opinion of the Board may threaten the existence of theCompany. The Company has in place a mechanism to inform the Board about the riskassessment and minimization procedures and periodical review to ensure that managementcontrols risk through means of a properly defined framework.
The Company has formulated and adopted Risk Management Policy to prescribe riskassessment management reporting and disclosure requirements of the Company. The saidpolicy is available on the website of the Company i.e. www.winsometextile.com.
INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has laid down adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no material weaknessin their operating effectiveness was observed.
Further the Company has an adequate system of internal control system in placecommensurate with its size and operations. It ensures that all transactions areauthorized recorded and reported correctly. To maintain its objectivity and independencean in-house Internal Audit Department of Company continuously monitors and evaluates theefficacy and adequacy of internal control system in the Company its compliance withoperating system accounting procedures and policies/SOP's at all the location of theCompany. Significant audit observation and corrective actions thereon are presented toAudit Committee. The Audit Committee regularly reviews the reports submitted by InternalAudit Department.
ASSOCIATES AND SUBSIDIARIES
The Company has no Associates & Subsidiaries as on 31st March 2020.
The Company has its branch office in Poland which is in operational since secondquarter of F.Y. 2018-19 and catering to textile market in central Europe.
CORPORATE GOVERNANCE AND COMPLIANCE WITH SECRETARIAL STANDARDS
As per the provisions of Listing Regulations a separate Report on Corporate Governancepractices followed by the Company together with a Certificate from the Practicing CompanySecretary confirming compliance forms part of this report. Furthermore the Company hascomplied with Secretarial Standards issued by Institute of Company Secretaries of India onBoard Meetings and General Meetings.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO
As required under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 ofCompanies (Accounts) Rules 2014 the particulars relating to conservation of energytechnology absorption and foreign exchange earnings and outgo is appended as an AnnexureVI to the Board's Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
It is the Company's intent to establish itself and remain as a responsible corporateentity conscious of its social responsibilities towards its work force society andenvironment. Corporate Social Responsibility (CSR) policy is framed under provisions ofSection 135 of Companies Act 2013 & rules made there under having following majorobjectives:
To identify and formulate projects and areas in response to the needs of societyand to implement them with full involvement and commitment in a time bound manner.
To adopt an approach that aims at achieving a greater balance between social andeconomic development.
To implement CSR Activities/CSR programmes primarily in the economic vicinity ofCompany's operations with a view to ensuring the long term sustainability of suchactivities.
Contribution to the society at large by way of socio-economic activities andsocial awareness ensuring that benefits reach the targeted beneficiaries.
To comply with the requirements of Companies Act and all other applicable ActsRules Regulations framed by the Government time to time.
The CSR activities are focused not just around units/plants and offices of the Companybut also in other geographies based on the needs of the communities/society. In pursuanceto CSR Policy Company has decided to conduct or undertake all or any of prescribedactivities/ activity/sub-activity as mentioned in Schedule VII of the Companies Act 2013and rules & regulations made there under (as amended) either directly or throughWinsome Textile Social Trust. The Winsome Textile Social Trust established by Company forcarrying out CSR
activities of the Company is as per the provisions of section 135 and Schedule VII ofthe Companies Act 2013 and rules made there under as amended and also fulfills thecriteria laid down under Companies (CSR Policy) Rules 2014. The Corporate SocialResponsibility (CSR) Committee of Company regularly monitor/review the CSR activities/ CSRprojects its mechanism & other prescribed activities/matters on quarterly basis. TheCSR policy is available on website of Company at weblink:http://www.winsometextile.com/files/pdf/68-224-file.pdf.
Annual Report on Corporate Social Responsibility [CSR] activities is appended as an AnnexureVII
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There were no significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations.
DIRECTOR'S RESPONSIBILITY STATEMENT
Pursuant to the provisions of section 134(3)(c) and 134(5) of Companies Act 2013 itis hereby confirmed that:
in the preparation of annual accounts for the financial year ended 31stMarch 2020 the applicable accounting standards have been followed and that there are nomaterial departures;
the Directors have selected such accounting policies and applied themconsistently and made judgements and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March2020 and of the profit or loss of the Company for the year ended on that date;
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;
the annual accounts have been prepared on a going concern basis;
the Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and are operatingeffectively;
the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequately and operatingeffectively.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of the Company have submitted the Declaration ofIndependence as required pursuant to provisions of section 149 of Companies Act 2013 andunder Listing Regulations
stating that they meet the criteria of independence as provided in saidsection/relevant regulation.
None of the Directors of Company are disqualified under the provisions of section 164of Companies Act 2013 & rules made there under. The Directors have made the requisitedisclosures as required under the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 ("hereinafter referred to as ListingRegulations").
INTERNAL COMPLAINT COMMITTEE (ICC)
The Company has constituted an internal Complaint Committee (ICC) in all units of thecompany including corporate office to consider and resolve all sexual harassmentcomplaints reported by any employees of the Company. The constitution of ICC is as per theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and the committee includes external members from NGOs or with relevant experience.Investigation is conducted and decisions made by ICC at respective location and seniorwoman employee is the presiding officer over every case. Half of the total members of ICCare women. The details of complaints pertaining to sexual harassment that were fileddisposed of and pending during the financial year are provided in the corporate governancereport of this Annual Report.
MATERIAL CHANGES FROM END OF FINANCIAL YEAR TILL DATE OF REPORT
The COVID-19 pandemic is the most defining global crisis in living memory. The spreadof the virus disrupted the global economy and consumer sentiment starting December 2019.The virus was declared a global pandemic by the World Health Organisation on 11th March2020.
The Company's manufacturing units were temporarily shut after 23rd March 2020 incompliance with the lockdown instructions issued by the Central and State Government dueto COVID-19 pandemic. The said units restarted their operations on 9th April 2020 afterthe issuance of relevant notifications adhering to all the safety protocols mentioned bythe Central and respective State governments. There was no pandemic impact on theoperations of the hydro power generation unit of the company since the same was coveredunder Essential services. With the evolving daily realities it is difficult to predictthe exact impact of the pandemic on the performance of the company. However the Companyhas evaluated and factored in to the extent possible the likely impact that may resultfrom COVID-19 pandemic as well as all events and circumstances up to the date of approvalthis report and annual financial statements on the carrying value of its assets andliabilities as on 31st March 2020. The impact of any events and developments occurringafter the balance sheet date on the financial results for the quarter and year ended 31st
March 2020 may differ from that estimated as at the date of approval of financialstatements and will be recognized prospectively. The Company expects the overall businessscenario to remain bleak in the short-term which the Company expects to withstand basedon its inherent strengths. More so the Company is taking all the necessary measures tominimise the impact of the COVID-19 pandemic.
DISCLOSURE REGARDING VOTING RIGHT NOT EXERCISED DIRECTLY BY THE EMPLOYEES
During the year under review there is NIL disclosure as required under provisions ofsection 67 of Companies Act 2013.
No disclosure or reporting is made in respect of the following items as there were notransactions during the year under review:
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or the Board under Section143(12) of Act and Rules framed thereunder.
Neither there is revision in the Financial Statements nor there is any change innature of business.
EQUAL OPPORTUNITY EMPLOYER
Company has always provided a congenial atmosphere for work to all employees that isfree from discrimination and harassment including sexual harassment. It has provided equalopportunities to all employees workers without regard to their caste creed colourmarital status and sex.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management discussion and analysis report as required by Listing Regulations formspart of the Annual Report.
The Directors take this opportunity to express their deep sense of gratitude to theCustomers stakeholders Central and State Governments for their continued guidance andsupport. Your Directors wish to place on record their appreciation for the supportdedication and hard work put in by every member of WINSOME Family.
| ||For and on behalf of the Board |
| ||Sd/- |
| ||Ashish Bagrodia |
|Place: Chandigarh ||Chairman & Managing Director |
|Date: 31.07.2020 ||DIN-00047021 |