| Dear Members,
The Directors have pleasure in presenting their 21th Annual Report for
the year ended on 31st March 2014.
Financial Results:
The performance of the Company for the financial year ended March 31,
2014 is summarized below:
in lacs
PARTICULARS 2013-14 2012-13
Total Income 2249.47 2594.75
Usual Working Expenses 3580.77 3551.66
Gross Profit/(Loss)before Interest (1331.30) (956.91)
and Depreciation
Less: Interest 5342.90 4186.64
Depreciation 1497.46 1503.65
Profit /(Loss)Before Tax (8171.66) (6647.20)
Less: Provision for Current Tax - -
Provision for Deferred Tax - -
Provision for Fringe Benefit Tax - -
Profit /(Loss)After Tax before Extra
Ordinary & Exceptional Items (8171.66) (6647.20)
Less : Exceptional Items - -
Profit /(Loss)After Tax & After Extra
Ordinary Items (8171.66) (6647.20)
before Exceptional Items
Add : Extra Ordinary Items - -
Profit /(Loss)After Tax & After Extra
Ordinary & Exceptional Items (8171.66) (6647.20)
Add : Balance brought forward from last Year - -
Balance Transferred to Balance Sheet (8171.66) (6647.20)
Results of Operations
During the year under review sale has been reduced to Rs. 2241.75 lacs
from Rs. 2587.50 Lacs. Company has started receiving orders gradually.
But still orders are very less comparing to production capacity of the
Company. Management is constantly focused on marketing. Due to lack of
funds and lower orders the growth in Company's sale is restricted.
Company has not been able to sale the Fabric of Premium Quality due to
lack of demand. Premium quality fabric gives higher margins. Under
utilization of capacity accompanied with higher debt cost, lower
margins have resulted into the loss of Rs. 8171.66 lacs (before Extra
Ordinary Item) as against the net loss of Rs. 6647.20 Lacs in previous
year.
Dividend:
During the year under review the Company has not earned profit hence
your Board of Directors' do not recommend any dividend for the year.
Fixed Deposits
During the year under review the Company has not raised any amount by
way of Fixed Deposits.
Industrial Relations
During the year, industrial relations have been cordial.
Directors
In accordance with the provision of section 152 of Company Act, 2013
read with Companies (Management & Administration) Rules, 2014 Mrs. Rama
Jawahar Swetta, Director of the Company retires by rotation and being
eligible, has offered herself for reappointment at the ensuing Annual
General Meeting.
In terms of provision of Section 149 & 152 of Companies Act 2013 which
become effective from 1st April 2014, an Independent Director of a
Company can be appointed for a term of five consecutive years and shall
not be liable to retired by rotation.
To comply with above provision it is proposed to appoint Mr. Dhananjay
Charane, Mr. Manohar Dudhane as Independent Director of the Company for
a period up to 31st March 2016 who shall not be liable to retire by
rotation. Your board recommends their appointments.
The Company has received declaration from all the Independent Directors
of the Company conforming that they meet the criteria of Independence
as prescribed both under sub-sec. 149 of the Companies Act, 2013 and
under clause 49 of the listing agreement with the stock exchange.
During the year Mr. Abhishek Mohite, Mr. Yashawant Shilalkar, Mr.
Manohar Kanitkar has resigned from their post of Director and Mr.
Manohar Dudhane was appointed as an Independent Director.
Corporate Governance
In order to maintain high standards of Corporate Governance and to be
complied with the provisions of clause 49 of Listing Agreement the
Company has formed following committees :
I. Audit Committee: The primary objective of Audit Committee is to
monitor and effectively supervise the Company's financial reporting
process with a view to provide accurate, timely and proper disclosures
and to maintain integrity and quality of financial reporting. Its
Constitution, activities of this committee has been elaborated in the
report of Corporate Governance. Report on Corporate Governance along
with Auditors Certificate on Compliance with the conditions of
Corporate Governance as stipulated in clause 49 of listing agreement is
provided elsewhere in the Annual Report.
II. Share Transfer and Investor Grievance Committee : The Board of
Directors' has constituted "Share Transfer and Investor Grievance
Committee" to look after all the works relating to shares and
shareholders grievance i.e., approval of
transfer/transmission/demat/remat of shares, issue of duplicate,
split-up, consolidation, renewal of share certificate, non receipt of
balance sheet, non receipt of declared dividends etc. Its constitution
and activities have been elaborated in the report of Corporate
Governance.
III. Remuneration Committee : The Board of Directors has constituted
"Remuneration Committee" to decide and approve the terms and conditions
for appointment of Executive Directors of the Company and remuneration
payable to other Directors and Executives of the Company and other
matters related thereto. Its constitution, activities of this committee
have been elaborated in the report of Corporate Governance.
Auditors Qualification In Audit Report
Regarding the qualification of Auditor in Audit report, Directors'
state as under
Point No. [ix] a) & b) : Due to low turnover, lower capacity
utilization with higher debt cost the Company is facing liquidity
problem and hence there is non - payment of statutory dues in time. The
Company is taking necessary steps to pay off its statutory dues.
Point No. [x] : Due to lower capacity utilization, higher debt cost and
lower margin the Company has incurred cash loss of Rs. 6674.22 lacs.
Point No. [xi] : The lower sale and high fixed cost has adversely
affected the liquidity/cash flows of the Company resulting into delay
in payment of Interest/Installments to Banks. The Company is exploring
different ways of reducing the debt burden.
Directors' Responsibility Statement
Pursuant to requirement in respect to Directors' Responsibility
Statement, it is hereby confirmed that:
i. In preparation of the annual audited accounts, the applicable
accounting standards have been followed as per the requirement set out
under Schedule VI of the Company Act, 1956 and that there are no
material departures from the same;
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 as at March 31, 2014 and of the Loss of the Company for
the year ended on that date.
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; and
iv. The Directors have prepared the annual accounts of the Company on a
'Going Concern' basis.
Particulars of Employees
As per the Statement of Particulars of Employees required U/S 217(2A)
Of the Company Act 1956 read with the Companies (particulars of
employees)Rules 1975, limit of salary, increased up to Rs. 60 Lacs p.a.,
so this becomes inapplicable to our Company.
Auditors
M/s. Shrikant & Co., Chartered Accountants, Statutory Auditors of the
Company, hold office until the conclusion of ensuing Annual General
Meeting and being eligible offered themselves for reappointment as per
the section 141 of Companies Act 2013.
Members are requested to consider their reappointment and fix their
remuneration.
Acknowledgment
Your Directors would like to express their grateful appreciation for
assistance and co-operation received from Banks, Government
Authorities, Customers, Vendors and Members during the year under
review.
Your Directors also wish to place on record their deep sense of
appreciation for the committed services of Executives, Staff and
Workers of the Company.
For and on behalf of Board of Directors
Date : 14th August, 2014 Anasaheb R Mohite
Place : Kolhapur Chairman & Managing Director (DIN : 00317676)
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