| Dear Shareholders,
The Directors have pleasure to present the 75th Annual Report together
with the Audited Financial Statements of the Company for the year ended
on 31st March 2015.
1. FINANCIAL RESULTS
The Financial Results are given hereunder:
(Rs. in Lacs)
Year Year
Particulars ended on ended on
31.03.2015 31.03.2014
Total Revenue 48762 47858
Gross Profit before depreciation
& amortisation expense and
finance cost 1583 6828
Finance Cost 2492 2201
Cash Profit/(Loss) before taxes (909) 4627
Depreciation &
Amortisation Expense 2574 2980
Profit/(Loss) before
Extraordinary Items (3483) 1647
Extraordinary &
Exceptional Items 111 818
Profit/(Loss) before taxes (3372) 2465
Provision for taxes 46 494
Profit/(Loss) after tax
for the period (3418) 1971
Balance brought forward
from previous year 10839 9171
Depreciation adjustment as
per Note 7(b) of Schedule II of
the Companies Act, 2013 17 -
Profit available for appropriation 7404 11142
Appropriations:
Proposed Dividend - 259
Tax on Proposed Dividend - 44
Transferred to General Reserve - -
Balance carried to Balance Sheet 7404 10839
2. BUSINESS
During the year, your Company's turnover was marginally higher compared
to previous Financial Year.Fabric Processing Plant commissioned during
2013-14could not operate consistently throughout the year due to
operational bottlenecks. However, efforts are being made for producing
and selling for more value added product i.e. Lycra and Linen to fetch
better Unit Value Realisation (UVR). The project expansion of existing
Poplin segment was completed in the month of March, 2015 by installing
72 Toyota make Airjet Looms. This is a Strategic investment and will
help in modernising our Poplin Weaving Plants & resulting in better
quality of Fabrics & lower value & manufacturing cost.
3. BRIEF DESCRIPTION OF THE COMPANY'S WORKING DURING THE YEAR AND
FUTURE OUTLOOK
The Company's performance during the year was not satisfactory. It
incurred Cash Loss of Rs. 9.09 Crores and Net Loss of Rs. 34.18 Crores
in the year 2014-15 as against Cash Profit of Rs. 46.27Crores and Net
Profit of Rs. 19.71 Crores for the year 2013-14. The main reason of
such adverse performance was higher cost of manufacturing, poor UVR and
low plant performance due to lesser availability of skilled manpower.
The Peach finish machine and imported washing range has also been
installed during the year in the Suiting and Shirting segment to offer
better products to our customers. Likewise, old machines, which were
in production from ages and causing production troubles in the old
processing section for poplin manufacturing, have also been replaced
during the year to enhance the overall productivity with better
operational efficiency in addition to installation of 20 TPH fluidised
bed combustion steam boiler.
With all major investments on modernisation of Poplin plant,
Debottlenecking of Fabric Processing Plants completed, the company is
in a position to manufacture as per the rated capacity and sell quality
fabrics( Both Poplin & Suiting & Shirting ) and substantially improve
its performance .
4. DIVIDEND
Due to loss during the year under review, the Directors do not
recommend any dividend for the Financial Year ended on 31st March,
2015.
5. SHARE CAPITAL
The Paid up Equity Share Capital of the Company as at 31st March, 2015
is Rs. 25.92 Crores. During the year under review, the company has not
issued shares with differential voting rights nor has granted any stock
options or sweat equity as on 31st March, 2015.
6. CHANGE IN THE NATURE OF BUSINESS
During the year under review, there was no change in the nature of the
business of the Company.
7. MATERIAL CHANGES AND COMMITMENTS
There are no material changes affecting the financial position of the
company which have occurred in between the end of the financial year
2015 and the date of the report.
However Equity Shares of the Company have been delisted from BSE
Limited and The Calcutta Stock Exchange Limited w.e.f. 02-02-2015 and
27-01-2015 respectively in accordance with the provisions of the
Securities and Exchange Board of India (Delisting of Equity Shares)
Regulations, 2009.
The Company has become subsidiary of Placid Limited w.e.f.
05-01-2015due to acquisition of equity shares of the Company by Placid
Limited in Exit Offer made in accordance with the provisions of the
Securities and Exchange Board of India (Delisting of Equity Shares)
Regulations, 2009.
8. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
OR COURTS OR TRIBUNALS
During the year under review, no significant and material orders were
passed by the regulators or courts or tribunals impacting the going
concern status and company's operations in future.
Kota Establishment has been under closure since 1985 & Honourable
Supreme Court of India had upheld the closure during 2011.
Subsequently, Government initiated steps for taking over part of the
land & not strictly as per the laws of the Land. Company has challenged
the decisions of the Government for taking over part of the land.
Presently company's petition is pending before the Honourable High
Court of Rajasthan.
9. PUBLIC DEPOSITS
There are no public deposits with the Company as at 31st March, 2015.
10. SUBSIDIARIES
During the year under review, the Company had only one Subsidiary MSUM
TEXFAB LIMITED.
There has been no change in the number of subsidiaries or in the nature
of business of the subsidiaries, during the year under review. In
accordance with Section 129(3) of the Companies Act, 2013, the Company
has prepared a consolidated financial statement of the Company
consolidating its subsidiary company, which is forming part of the
Annual Report. A statement containing salient features of the financial
statements of the subsidiary company in Form AOC-1 is also attached to
the Consolidated Financial Statement and forms part of the Annual
Report.
In accordance with third proviso of Section 136(1) of the Companies
Act, 2013, the Annual Report of the Company, containing therein its
standalone and the consolidated financial statements has been placed on
the website of the Company, www.msumindia.com. Shareholders interested
in obtaining a copy of the audited annual accounts of the subsidiary
company may write to the Company Secretary at the Company's registered
office.
11. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EARNING/
OUTGO
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo required under the provision of
Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the
Companies (accounts) Rules, 2014 is set out in the Annexure A to this
Report.
12. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted a Corporate Social Responsibility (CSR)
Committee in accordance with Section 135 of the Companies Act, 2013.
The CSR Committee was constituted by the Board of Directors of the
Company at its meeting held on May 29, 2014. The Annual Report on
Corporate Social Responsibility (CSR) activities pursuant to clause (o)
of sub-section (3) of section 134 of the Companies Act, 2013 and Rule 9
of the Companies (Corporate Social Responsibility) Rules, 2014 are
given in the Annexure B to this Report. The Corporate Social
Responsibility Policy is placed on the website of the Company at
www.msumindia.com.
13. DIRECTORS
A) CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr Yogesh Bangur, director of the Company, who retires by rotation at
the ensuing annual general meeting and being eligible, offers himself
for re-appointment as director liable to retire by rotation. The Board
recommends his re-appointment at the ensuing Annual General Meeting.
During the year under review, the Board of Directors have appointed Mr.
Rajiv Kapasi as an Additional Director of the Company in the category
of Independent Director with effect from October 30, 2014. Mr. Rajiv
Kapasi holds office as Additional Director until the conclusion of the
ensuing Annual General Meeting of the Company, and is eligible for
appointment as Director .
In keeping with General Circular no. 14/ 2014 of Ministry of Corporate
Affairs, the Company is required to appoint independent director as per
the provisions of section 149 of Companies Act, 2013 read with the
allied rules and schedules.
Your Company has received requisite notice in writing from a member
proposing the appointment of Mr. Rajiv Kapasi, as an Independent
Director for a term of 5 years not liable to retire by rotation. Based
on the declaration received under section 149(7) of Companies Act, 2013
and the fact that Mr. Rajiv Kapasi is independent of management of the
Company, the Board recommends the appointment of Mr. Rajiv Kapasi as an
independent director under the provisions of Companies Act, 2013 and
allied rules for a term of 5 years i.e. from ensuing Annual General
meeting till the 80th Annual General Meeting of the Company, not liable
to retire by rotation.
Mr. Govind Ram Agarwal resigned as an Independent Director with effect
from 4th February, 2015. Mr. Swatantra Singh Kothari resigned as an
Independent Director with effect from 3rd August, 2015. The Board
places on record its warm appreciation for valuable guidance by them
during their tenure.
B) DECLARATION BY INDEPENDENT DIRECTORS
The company has received declaration from the Independent Director(s)
of the Company declaring that they meet the criteria of independence as
provided in sub-section (6) of Section 149 of the Companies Act, 2013.
C) BOARD EVALUATION
Pursuant to the provisions of Companies Act, 2013, your Company has
adopted the Remuneration Policy with comprehensive procedure on
performance evaluation.
A structured questionnaire was prepared after taking into consideration
inputs received from the Directors, covering various aspects of the
Board's functioning such as adequacy of the composition of the Board
and its Committees, Board culture, execution and performance of
specific duties, obligations, ethics and compliances, financial
reporting process and monitoring activities.
Performance parameters for the Board as a collective body, included
parameters like qualification and diversity of Board members, method
and criteria for selection of independent directors to ensure
independence, availability, appropria- teness, clarity of understanding
on risk scenarios faced by the Company, existence, sufficiency and
appropriateness of policy on dealing with potential conflicts of
interest, involvement of Board members in long - term strategic
planning etc. Based on these criteria, the performance of the Board,
various Board Committees, Chairman and Individual Directors (including
Independent Directors) was found to be satisfactory.
Independent Directors have reviewed the performance of Board, its
Committee, Chairman and individual Directors, in their separate held
meeting without the participation of other Non-Independent Directors
and members of management. Based on their review, the Independent
Directors, hold an unanimous opinion that the Non-Independent
Directors, including the Chairman to the Board are experts with
sufficient knowledge in their respective field of activities.
14. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
The Board meets at regular intervals to discuss and decide on Company
business policy and strategy apart from other Board business. However,
in case of a special and urgent business need, the Board's approval is
taken by passing resolutions through circulation, as permitted by law,
which are confirmed in the subsequent Board meeting.
The notice of Board/Committee meeting is given well in advance to all
the Directors. Usually, meetings of the Board are held in Kolkata. The
Agenda of the Board / Committee meetings is circulated at least a week
prior to the date of the meeting. The Agenda for the Board and
Committee meetings includes detailed notes on the items to be discussed
at the meeting to enable the Directors to take an informed decision.
During the year under review, the Board met 5(five) times viz., on
April 7, 2014, May 29, 2014, August 7, 2014, October 30, 2014, and
February 4, 2015. The maximum interval between any two meetings did not
exceed 120 days.
A separate meeting of Independent Directors of the Company has been
also conducted on February 4, 2015.
15. COMMITTEES OF THE BOARD
During the year, in accordance with the Companies Act, 2013, the Board
re-constituted some of its Committees and also formed a Corporate
Social Responsibility Committee. There are currently 4 (Four)
Committees of the Board, as follows:
Audit Committee
Stakeholders Relationship Committee
Nomination and Remuneration Committee
Corporate Social Responsibility Committee
A) AUDIT COMMITTEE
The Audit Committee of the Board of Directors of the Company comprises
of two Independent Directors and one Non- Executive Director. The
details are shown below:
1. Mr. Rajiv Kapasi, Independent Director
- Chairman of the Committee
2. Mr. Amitav Kothari, Independent Director -Member
3. Mrs. Alka Devi Bangur, Non Executive Director - Member
The Company Secretary is Secretary of the Committee.
During the year under review, the Committee met 4(Four) times viz., on
May 29, 2014, August 7, 2014, October 30, 2014 and February 4, 2015.
The maximum interval between any two meetings did not exceed 120 days.
All the recommendations made by the Audit Committee during the year
under review were accepted by the Board.
B) STAKEHOLDERS RELATIONSHIP COMMITTEE
The Stakeholders Relationship Committee of the Board of Directors of
the Company comprises of one Non-Executive Director, one Executive
Director and one Independent Director. The details are shown below:
1. Mrs. Alka Devi Bangur, Non Executive Director - Chairman
2. Mr. Yogesh Bangur, Executive Director - Member
3. Mr. S.S.Kothari, Independent Director - Member
During the year under review, the Committee met 4(four) times viz., on
May 29, 2014, August 7, 2014, October 30, 2014 and February 4, 2015.
The maximum interval between any two meetings did not exceed 120 days.
C) NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee of the Board of Directors of
the Company comprises of three Independent Directors. The details are
shown below:
1. Mr. S.S.Kothari - Member
2. Mr. Amitav Kothari -Member
3. Mr C V Desai - Member
During the year under review, the Committee met 3(three) times viz., on
April 7, 2014 ,May 29, 2014, and October 30, 2014. The maximum interval
between any two meetings did not exceed 120 days.
The Extract from the Nomination and Remuneration Policy of the Company,
is appended as Annexure C to this Report.
16. EXTRACT OF THE ANNUAL RETURN
The extract of the Annual Return for the Financial Year ended on March
31, 2015 in Form No. MGT - 9 is enclosed as Annexure D of this Report.
17. RISK MANAGEMENT
The Company has in place a mechanism to identify, assess, monitor and
mitigate various risks that may impact key business objectives of the
Company.
Major risks identified by the businesses and functions are
systematically addressed through mitigating actions on a continuing
basis. These are discussed at the meetings of the Audit Committee and
the Board of Directors of the Company. As on the date of the Report,
the Board has not identified any risks which may threaten the existence
of the Company.
18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place internal financial control systems,
commensurate with the size and complexity of its operations to ensure
proper recording of financial and operational information and
compliance of various internal controls and other regulatory and
statutory compliances. The internal auditor monitors and evaluates the
efficacy and adequacy of the internal control systems in the Company.
Based on the report of the internal auditor, respective departments
undertake corrective action in their respective areas and thereby
strengthen the controls. Significant audit observations and corrective
actions thereon are presented to the Audit Committee of the Board.
19. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND
EMPLOYEES
The Board of Directors of the Company has established a Vigil Mechanism
for Directors and employees and adopted the Whistle Blower Policy in
terms of Section 177 of the Companies Act, 2013 to report concerns
about unethical behaviour, wrongful conduct and violation of Company's
Code of conduct or ethics policy. The Whistle Blower Policy has also
been posted on the website of the Company viz., www.msumindia.com.
20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186
OF THE COMPANIES ACT, 2013
Details of loans, guarantees or investments covered under section 186
of the Companies Act, 2013 are given in the notes to financial
statements.
21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All contracts or arrangements or transactions entered by the Company
during the financial year with related parties were in the ordinary
course of business and on arm's length basis and are reviewed by the
Audit Committee of the Board.
During the year under review, the Company has not entered into
contracts or arrangements or transactions with related parties which
could be considered material in accordance with the policy of the
Company on materiality of related party transactions. Accordingly, no
transactions are reported in Form no. AOC - 2 in terms of Section 134
of the Companies Act, 2013 read with Rule 8 of the Companies
(Accounts), Rules, 2014.
The Policy on Related Party transactions as approved by the Board has
been posted on the website of the Company viz., www.msumindia.com.
22. STATUTORY AUDITORS
M/s BD Gargieya & Co., Chartered Accountants (Firm Regn. No.: 001072C)
who are the Statutory Auditors of the Company, hold office, in
accordance with the provisions of the Companies Act, 2013 upto the
conclusion of the forthcoming Annual General Meeting and term for
reappointment has expired pursuant to the provisions of section 139 of
the Companies Act, 2013.
The Company has received letter from M/s Singhi & Co., Chartered
Accountants (Firm Regn. No.: 302049E) giving their consent to act as
Auditors of the Company and a certificate stating that their
appointment, if made, would be in compliance with sections 139 and 141
of the Companies Act, 2013 and allied rules framed thereunder. Your
Directors recommend their appointment for a term of five years i.e.
from the conclusion of the ensuing Annual General Meeting till the
conclusion of the 80thAnnual General Meeting of the Company and also
request to fix their remuneration.
23. AUDITORS' REPORT
The Notes on Financial Statements referred to in the Auditors' Report
are self-explanatory and, therefore, do not call for further
clarification.
24. COST AUDIT
Pursuant to Section 148 of the Companies Act, 2013 read with The
Companies (Cost Records and Audit) Amendment Rules, 2014, the cost
accounting records maintained by the Company in respect of Textile Unit
are required to be audited. Your Directors had, on the recommendation
of the Audit Committee, appointed K G Goyal & Associates, Cost
Accountants, to audit the cost accounting records of Textile Unit for
the Financial Year 2015-16 on a consolidated remuneration of Rs.
35,000/- (excluding applicable taxes). As required under the Companies
Act, 2013, the remuneration payable to the Cost Auditor is required to
be placed before members in a general meeting for their ratification.
Accordingly a resolution seeking member's ratification for the
remuneration payable to K G Goyal & Associates, Cost Auditors, is
included in the notice Convening Annual General Meeting of the Company.
25. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (appointment of Managerial Personnel) Rules, 2014,
the Board of Directors of the Company has appointed M/s Vinod Kothari &
Co, Practising Company Secretaries, to conduct the Secretarial Audit
and their Report on Company's Secretarial Audit is appended to this
Report as
Annexure E.
There are no qualifications, reservations or adverse remarks or
disclaimers made by the Secretarial Auditor in the enclosed Secretarial
Audit Report for the year under review.
26. DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the
information and explanation obtained by them, your Directors make the
following statements in terms of Section 134(3)(c) of the Companies
Act, 2013:
(a) that in the preparation of the Annual Accounts for the year ended
31st March, 2015, the applicable accounting standards have been
followed along with proper explanation relating to material departures,
if any;
(b) that such accounting policies have been selected and applied
consistently and judgments and estimates have been made that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the company as at 31st March, 2015 and of the Loss of the
company for the year ended on that date;
(c) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(d) that the annual accounts have been prepared on a going concern
basis;
(e) that proper internal financial controls are in place to be followed
by the company and that such internal financial controls are adequate
and are operating effectively; and
(f) that proper systems to ensure compliance with the provisions of all
applicable laws are in place and that such systems areadequate and
operating effectively.
27. DISCLOSURES UNDER SEXUAL
HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL)
ACT, 2013
The Company is committed to provide a safe & conducive work environment
to its employees and has formulated Policy for Prevention of Sexual
Harassment to prohibit, prevent or deter any act of sexual harassment
at workplace and to provide the procedure for the redressal of
complaints pertaining to sexual harassment, thereby providing a safe
and healthy work environment. During the year under review, no case of
sexual harassment was reported.
28. ACKNOWLEDGEMENT
The Directors express their gratitude to Financial Institutions, Banks
and various other agencies for the co-operation extended to the
Company. The Directors also take this opportunity to thank all
business associates and all stakeholders for the confidence reposed by
them in the Company. The Directors place on records their sincere
appreciation to employees of the Company for their unstinted commitment
and continued contribution to the Company and hope that they will
maintain their commitment to excel in the time to come.
For and on behalf of the Board
Kolkata LN Bangur
August 03, 2015 Chairman & Managing Director |