Your Directors have pleasure in presenting the 40th Annual Report togetherwith the Audited Financial Statements of the Company for the financial year ended 31stMarch 2021.
| || ||(Rs. in lacs) |
|Financial Highlights ||Year ended 1 31.03.2021 ||Year ended 31.03.2020 |
|Sales ||62378.39 ||66210.16 |
|Profit before Interest & Depreciation ||5391.49 ||6680.26 |
|Less : Interest ||3299.72 ||4877.88 |
|Profit/(Loss) before Depreciation ||2091.77 ||1802.38 |
|Less : Depreciation ||2180.25 ||2245.67 |
|Profit/ (Loss) before Tax ||(88.48) ||(443.29) |
|Less : Provision for Taxation - Current Tax/MAT ||92.46 ||- |
|- MAT Credit ||(86.46) ||- |
|- Deferred Tax Liability/(Assets) ||(101.84) ||(185.26) |
|- MAT Credit earlier year/Charged Earlier Year ||- ||- |
|- Tax/MAT for earlier years ||- ||- |
|- Tax Adjustment for the earlier year ||128.73 ||33.92 |
|Net Profit/ (Loss) after Tax ||(121.37) ||(291.95) |
|Add : Surplus brought from previous year ||3022.63 ||3276.07 |
|Less: Adjustments & amounts transferred to General Reserves ||- ||- |
| ||2955.74 ||3022.63 |
|Appropriations : || || |
|Proposed Dividend ||NIL ||NIL |
|Corporate Dividend Tax ||NIL ||NIL |
|Surplus Carried to Balance Sheet ||2955.74 ||3022.63 |
| ||2955.74 ||3022.63 |
PERFORMANCE REVIEW/STATE OF AFFAIRS OF THE COMPANY
A. Yarn Spinning Dyeing and Fabric
Inspite of the financial crisis in global economy due to Covid-19 pandemic during theyear under review your Company has achieved a sales turnover of H62378.39 lacs againstsales turnover of H66210.16 lacs during the previous year a decrease of 5.79 % and a netloss (after tax) of H (121.37) lacs for the current year against net loss (after tax) of H(291.95) lacs during the previous year. The exports of the company for the currentfinancial year were H28119.38 lacs against H24828.23 lacs for the previous financial year.
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 111 lacs units against 141 lacs units in the previous year.
During the year under review the working of company was adversely affected due toCovid- 19 outbreak which affected millions of people in India as well as world over andtook millions of precious lives. The outbreak and spread of coronavirus lead todisruptions in supply chain declining sales in domestic as well as export marketcancellation of orders which severely affected textile and apparel industry around theworld including India. After announcement of complete lockdown by the Government of Indiaoperations at plant were completely stopped and resumed partially in mid april with inhouse workers but plant utilization capacity remained extremely low. Periodic relaxationsin the form of unlocking phases announced from time to time by Government resulted inexodus of labour from unit aggravating the already precarious workers availability. We hadissues of reverse migration of labour disruptions of plant operations on multipleoccasion on orders of district administration due to detection of Covid cases andprohibition in interstate movement of workers coming from adjoining states on companytransport till the early part of 3rd quarter. Persistent efforts by company foraugmenting workforce and unlocking of Covid restrictions resulted in improved performancewith effect from Oct/ Nov 20. Massive losses suffered during the first 7/8 months were setoff during later part of 3rd quarter and 4th quarter due to improvedperformance. This has happened due to shifting of orders out of china to other countriesincluding India and increased production of value added yarns having higher contributionlevels. Going ahead due to positive environment we are confident of achieving muchbetter performance during current financial year.
ACCOLADES AND RECOGNITIONS
We are delighted to inform you that your Company conferred with Gold Trophy by'TEXPROCIL' for Highest Exports of "Processed Yarns" under Category II for F.Y2019-20. Apart from this your Company is making persistent efforts to maintain it'sdistinguish position in the competitive environment.
MODERNISATION & EXPANSION
During the year under review the new proposed projects for technology upgradationcould not be implemented due to Covid-19 lockdown/restrictions imposed by Government ofHimachal Pradesh and other States/Central Government.
The paid up Equity Share Capital as at March 31 2021 was H198200000/- (comprised of19820000 equity shares of H10/- each). During the year under review the Company hasneither issued any shares nor granted stock options or sweat equity preference shares andalso not made any provision for purchase of its own shares by employees 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 2020-21. 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 FY2020-21.
DIVIDEND & RESERVES
Keeping in view to conserve the resources your Directors do not recommend any dividendfor the FY 2020-21. 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 Ashish Bagrodia Chairman & Managing Director (DIN: 00047021) and Shri AnilKumar Sharma Executive Director and CEO (DIN: 01157106) shall be liable to retire byrotation at the ensuing General Meeting being eligible they have offered themselves forre-appointment.
Smt. Neena Singh (DIN: 00233352) was re-appointed as an Independent Director of theCompany for further term of five consecutive year's w.e.f. 28th September2020.
Shri Anil Kumar Sharma (DIN: 01157106) was appointed as an Additional Director-designated as Executive Director & CEO of the Company w.e.f. 13th February2020 and shareholders of the Company have also confirmed his appointment as ExecutiveDirector & CEO at 39th Annual General Meeting held on 23rdDecember 2020.
Smt. Manju Lakhanpal (DIN: 07130592) was appointed as an Additional Director witheffect from 01st April 2020 and shareholders of the Company have alsoconfirmed her appointment as an Independent Director for first term of five consecutiveyears w.e.f. 23rd December 2020 at 39th Annual General Meeting heldon 23rd December 2020.
Shri Arun Kumar Basu (DIN: 08747388) was appointed as an Additional Director witheffect from 29th May 2020 and shareholders of the Company have also confirmedhis appointment as an Independent Director for first term of five consecutive years w.e.f.23rd December 2020 at 39th Annual General Meeting held on 23rdDecember 2020.
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 11th February2021 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".
Statutory Auditors of the Company M/s B. Chhawchharia & Co. Chartered Accountants(Firm Registration No. 305123E) were appointed as statutory auditors of the Company forperiod of five consecutive years at the Annual General Meeting (AGM) held on 4th September2017 (subject to annual ratification by shareholders at every subsequent AGM) on aremuneration mutually agreed upon by the Board of Directors and the Statutory Auditors.
Furthermore the annual ratification by shareholders have been done away with after theCompanies Amendment Act 2017 read with Notification S.O. 1833(E) dated 7th May2018. So in View of the same ratification by the members for continuance of theirappointment at this AGM is not being sought.
The auditor's report is self-explanatory and requires no explanation.
COST AUDIT & AUDITORS
M/s K.K. Sinha & Associates Cost Accountants were appointed as Cost Auditors ofyour Company for auditing the cost accounts records for the financial year 2020-21 underprovisions of Section 148 of the Companies Act 2013. They are likely to submit Cost AuditReport 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 re-appointed M/s K.K. Sinha & Associates CostAccountants as Cost Auditors of the Company for the financial year 2021-22 on aremuneration of Rs.75000/- (Rupees Seventy Five Thousand Only) same as in the previousyear. The Company has received written confirmation(s) from M/s K.K. Sinha &Associates Cost Accountants to the effect that their re-appointment if made would bein 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 2020-21 as required under Section204 of the Companies Act 2013 and Rules made there under. The secretarial audit reportfor FY 2020-21 is appended as an Annexure II to the Board's report. The Secretarialauditor's report is self-explanatory and requires no explanation.
Furthermore the Board has re-appointed Shri Ramesh Bhatia Practicing CompanySecretary as secretarial auditor of the Company for the financial year 2021-22.
ANNUAL SECERTARIAL COMPLIANCE REPORT
The Company has undertaken an audit for the financial year 2020-21 for all applicablecompliances as per SEBI Regulations and Circulars/Guidelines issued thereunder. The AnnualSecretarial Compliance Report has been submitted to the stock exchanges within theprescribed limits.
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 is appended as anAnnexure III & Annexure IV to the Board Report.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act 2013 theAnnual Return as on March 31 2021 is available on the Company's website at web linkhttp://www. winsometextile.com/annual-return.
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 March 312021.
The Company has its branch office in Poland which is operational since second quarterof 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 Annexure Vto the Board's Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The brief outline of the corporate social responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure VI of this report in the format prescribed in the Companies (CorporateSocial Responsibility Policy) Rules 2014 as amended. For other details regarding the CSRCommittee please refer to the Corporate Governance Report which is also part of thisAnnual Report. The CSR policy is available on website of Company at web link: http://www.winsometextile.com/files/pdf/68-224-file.pdf.
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 2021 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 31stMarch 2021 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 providedin said section/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 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
Covid-19 pandemic had severe financial and operational impact on the company resultingin weakening of the company's working capital and adversely impacting its profitability.However based on future projections the company has approached its consortium memberbanks for One Time Debt Restructuring under RBI resolution framework for COVID-19 relatedstress dated 06th August 2020 with a Resolution Plan.
The Consortium member banks have invoked company's Resolution Plan on 23rdDecember 2020 and signed Inter-Creditor Agreement on 14th January 2021.Currently the said Resolution Plan is under process of approval/sanction which is to bestatutorily implemented within 180 days from date of invocation meanwhile the externalCredit Rating Agency has assigned RP4 rating to the company's resolution plan forrestructuring.
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 Section 143(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: 08.06.2021 ||DIN-00047021 |