DIRECTORS' REPORT The Members, 1. Your Directors have pleasure in presenting their 37th Annual Report together with the audited accounts for the financial year ended 31st March, 2014. 2. OPERATIONS During the year under review, the turnover of the Company was Rs. 36 Crores as compared to Rs. 56 Crores in previous financial year due to financial constraints which your Company is facing and trying hard to overcome the situation. Due to fluctuation of yarn and cotton prices and as a result of highly volatile international markets, profit margins of the Company continuously suffered a set back. The Company has suffered a net loss of Rs. 3.80 crores during the year as against Rs. 2.66 crores in previous year. The Company is making all efforts to eliminate liquidity crunch and to sustain the production. Your directors are unable to declare any dividend for the year under review due to inadequacy of profits. 3. EXPORTS & FUTURE PROSPECTS From last few years, the towel industry is suffering from poor sales realization, escalation in input cost, sluggish demand etc. As a result, the exports of the Company declined during the year under review as compared to previous year. The future of industry as a whole will be challenging. However, the long-term outlook for terry towels market has always been encouraging but the financial pressure and other constraints never allowed Company to capitalize it. Your Company's product quality is well established and accepted in the domestic as well as in the international market. Your Company is making all efforts in cost reduction, quality management, better product mix etc. so as to improve the efficiencies which in turn will help the Company in meeting the challenges ahead. 4. SANCTION OF REVIVAL AND AMALGAMATION SCHEME BY HON'BLE BIFR The Rehabilitation Scheme which inter alia includes amalgamation of the Company with Modern Insulators Limited w.e.f. 1.1.2008 under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 is under consideration before the Hon'ble BIFR for approval. This merger/amalgamation will help the Company to eliminate the financial crunch and technological up gradation for future growth opportunities. 5. PUBLIC FIXED DEPOSIT In view of petition filed by the Company, the Hon'ble Company Law Board has passed an order on 17/4/2002 that "The repayment of fixed deposits shall be made by the Company in accordance with "revival scheme" as and when approved by the Hon'ble BIFR under the provisions of SICA". However payments on compassionate ground are continued to be made as per the decision of the committee formed by the Hon'ble Company Law Board for this purpose. 6. DIRECTORS During the year under review, Shri Sanjay Baijal was appointed as Director & President of the Company with effect from 01.07.2013. Shri H.L. Sharma, Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. In compliance with the provisions of Section 149 and other applicable provisions of the Companies Act, 2013, Shri P.K. Rao and Shri S.K. Sharma, Directors of the Company are proposed to be appointed as Independent Directors of the Company for five consecutive years for a term upto March 31,2019. Appropriate resolutions for the appointment/ re-appointment of the aforesaid Directors are being moved at the ensuing Annual General Meeting, which the Board recommends for your approval. 7. AUDITORS M/s J.T. Shah & Co., Chartered Accountants, statutory auditors of the Company retires at the forthcoming Annual General Meeting. Your Directors recommend their re-appointment to audit the accounts of the Company. As required under the provision of the Section 139 of the Companies Act, 2013 the company has obtained written confirmation from M/s J.T. Shah & Co., Chartered Accountants, that their re-appointment, if made, would be in conformity with the limits specified in the said section. The observations made by the Auditors are self explanatory and have been dealt with in the notes forming part of the financial statements and hence need no further clarifications. 8. INDSUTRIAL RELATIONS & PARTICULARS OF EMPLOYEES Your Directors sincerely appreciate the workers, staff and officers for putting in their best efforts. The Company has enjoyed healthy and cordial industrial relations throughout the year under review. There is no employee getting remuneration as prescribed under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended. 9. DIRECTOR'S RESPONSIBILITY STATEMENT Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:- i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review; iii)the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) the annual accounts have been prepared on a going concern basis. 10. PARTICULARS OF ENERGY CONSERVATION-TECHNOLOGY ABSORPTION AND FOREIGN EXCHNAGE OUTGO The statement of particulars relating to energy conservation, technology absorption and foreign exchange earnings and outgo as required in accordance with Section 217 (l)(e) of the Companies Act, 1956 read with Rule 2(A), 2(B) and 2(C) of the Companies (Disclosures of particulars in the report of Board of Directors) Rules, 1988 is annexed hereto and forms part of this report. 11. CONSTITUTION OF AUDIT COMMIITTEE The Board of Directors has constituted the Audit Committee of Directors to exercise powers and discharge functions as stipulated in section 177 of the Companies Act, 2013. The present Audit Committee consists of member directors as follows:- Shri H.L. Shanna (Non-Executive Director) - Chairman Shri P.K.. Rao (Independent Director) Shri S.K. Sharma (Independent Director) 12. ACKNOWLEDGEMENTS The Board places on record its sincere thanks and gratitude for the assistance and continued co-operation that the company has been receiving from its employees, suppliers, bankers, business associates and Central as well as State Government. ON BEHALF OF THE BOARD (SACHIN RANKA) Chairman Place :Jaipur Date :19th June, 2014 |