Your Directors are pleased to present the Twenty Third Annual Report and AuditedStatements of Accounts for the financial year ended 31st March, 2013.
| || || || ||(Rs. in lacs) |
| ||2012-13 ||2011-12 ||2012-13 ||2011-12 |
|Particulars ||Consolidated ||Consolidated ||Standalone ||Standalone |
|1 Revenue from Operations (Net) ||499,009 ||635,526 ||339,588 ||351,146 |
|2 Other Income ||964 ||904 ||161 ||138 |
|3 Profit/(Loss) from Operations (PBIDT) ||91,010 ||134,855 ||57,178 ||77,655 |
|(-) Finance Costs ||73,609 ||53,486 ||53,031 ||40,510 |
|(-) Depreciation and Amortisation Expenses ||16,922 ||14,777 ||12,877 ||9,222 |
|4 Profit/(Loss) before Tax and Exceptional Items ||479 ||66,592 ||(8,730) ||27,923 |
|(-) Exceptional (Expenses)/ Incomes ||(32,415) ||- ||(32,415) ||- |
|5 Profit/ (Loss) before ||(31,936) ||66,592 ||Tax (41,145) ||27,923 |
|6 (-) Provision for Taxation ||3,459 ||19,508 ||271 ||9,966 |
|7 Profit/ (Loss) After Tax ||(35,395) ||47,084 ||(41,416) ||17,957 |
|(-) Minority Interest * ||1,557 ||7,590 ||- ||- |
|8 Amount Available for Appropriation ||(36,952) ||39,494 ||(41,416) ||17,957 |
|9 Balance b/f from Previous Year ||80,689 ||57,401 ||17,360 ||17,421 |
|Appropriations: || || || || |
|10 Transfer to Debenture Redemption Reserve ||- ||203 ||- ||203 |
|11 Transfer to Capital Redemption Reserve ||475 ||- ||475 ||- |
|12 Balance in Restructured Financial Cost written Off ||- ||16,288 ||- ||14,310 |
|13 Reversal of Proposed Preference & Equity Dividend and Tax ||(3,505) ||- ||(3,505) ||- |
|14 Provision for Preference Dividend ||- ||32 || ||32 |
|15 Tax on Preference Dividend ||- ||5 || ||5 |
|16 Proposed Equity Dividend || ||2,974 || ||2,974 |
|17 Tax on Proposed Equity Dividend ||- ||494 || ||494 |
|18 Surplus/ (Deficit) carried to Balance Sheet ||46,767 ||76,899 ||(21,026) ||17,360 |
*The minority interest pertains to investment in Companys subsidiary, Reid &Taylor (India) Ltd.
In view of the Losses incurred during the year, your Directors are unable to recommenddividend on Equity Shares and Preference Shares for the year ended 31st March,2013.
YEAR IN RETROSPECT
The year witnessed several challenges in the operating and business environment. Evenas the global economic environment continued to be subdued, there was a significantslowdown in economic growth in India. While Indias long-term economic fundamentalsand growth potential are strong, the current challenges have had implications on businesssentiment and corporate profitability. Economic slowdown and the accompanying slackness indemand have taken a heavy toll on several Indian companies.
These global uncertainties also adversely affected your Companys growth momentum.Your Companys turnover came down by about 3% on a standalone basis. For the firsttime in years, the Company incurred a substantial loss as reflected Highlights. Besidesthe economic environment and demand contraction, other contributory factors for theadverse results were inadequacies of working capital and cessation of activities at yourCompanys UK and US subsidiaries owing mainly to unfavorable market conditions in avolatile economy. As a result, your Company experienced severe cash crunch, on account ofwhich it could not keep up with meeting interest payment to lenders and some statutoryliabilities.
Earnings of garment and textile manufacturers have been under pressure over the pastfew years owing to higher raw material costs and sluggish domestic and foreign demand.Costs are rising and margins are getting squeezed. It is hoped that a good festive season,encouraged by a strong monsoon and an increase in rural demand will make things turnaround.
The Indian textile and clothing industry is sized at around $80 billion of which around$35 billion is exports. Volatility in raw material prices and expensive as well as limitedcredit have strained mills finances, while the economic crisis in the US and the EU,which together account for 65% of Indias supplies, has adversely affected demand,reinforcing fears that the overall textile export growth could be the lowest in five yearsand the shipment target of $40.59 billion for this fiscal is all set to be missed. Thereis a slowdown in the US and much of Europe, which has resulted in a dip in supplies acrossmost segments.
Your company is predominantly a domestic player. It was able to manage exports of Rs.436 Lacs as against Rs. 6,692 Lacs in the previous year. Additionally, exports from theCompanys subsidiary Reid & Taylor (India) Ltd. reached Rs. 2,416 Lacs (previousyear Rs. 3,747 Lacs).
Demand seems to be returning now after a tepid start in this fiscal and may finallyshow a marginal uptick in full year exports.
CURRENT BUSINESS OUTLOOK AND PLANS
Demand for textile and apparel industry in India continues to be sluggish on account ofa recessionary trend in the economy. Belmonte in Consumer Textiles andReid & Taylor in Luxury Textiles segment continue to remain keycontributors to the overall performance of the Company. It is hoped that conditions maystart improving in the rest of the year so that with adequate working capital sourcing,your Company would be able to operate its plants at higher capacities and with highermargins. Until maximum utilization of Companys plants is reached, there are no plansfor capacity expansion in the coming year.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company is committed to support CSR initiatives and contribute towards the welfareand social upliftment of the community.
EMPLOYEES STOCK OPTION SCHEME (ESOP)
As the employees of the Company did not exercise the option under ESOP scheme, theCompany cancelled / withdrew 546,060 nos of ESOPs granted under Employees Stock OptionScheme. There were 365,760 nos. of options in force as at 31st March, 2013.
Your Company recognizes that employees play a key role in making our businesssuccessful and we achieve that through empowering our employees. Your Company maintainedan environment dedicated to maintaining high employees sense of pride, morale andteamwork. The Human Resource Development activities focused on multi-skills training andperformance management workshops. The functioning and activities were further aligned toCompanys business objectives. The ongoing thrust on rationalization of manpower withfocus on proper utilization continued with implementation of Zero-base manpower budget.
To comply with the conditions of Corporate Governance, pursuant to Clause 49 of theListing Agreement with the Stock Exchange, a separate section on Management Discussion andAnalysis and Corporate Governance together with a certificate from a Practising CompanySecretary confirming compliance is included in the Annual
Your Company was in the process of implementing Enterprise Resource Planning (ERP), butwas obliged to go slow on account of funding problems and had to defer completion of theprogramme to a later date.
Vide letter dated 5th November, 2012, IDBI Bank Limited appointed Smt.Ranjitha Godbole as Nominee Director in place of Smt. Amita Narain. The Boardplaced on record the guidance, advice and support extended by Smt. Amita Narain during hertenure as a Director. We look forward to the guidance and experience of Smt. RanjithaGodbole to help the Company in achieving its objectives.
India Debt Management Pvt. Ltd. (IDM) appointed Shri Navin Sambtani in place of ShriAlexander Shaik as an Alternate Director to Shri Denys Firth with effect from 10thNovember, 2012. Vide letter dated 10th January, 2013, IDM withdrew thenomination of Shri Susheel Kak, Shri Denys Firth and Shri Navin Sambtani (Alternate toShri Denys Firth) as Director.
Shri Jagadeesh S. Shetty, Director - Finance & Group CFO was appointed as anAdditional Director on the Board with effect from 10th November, 2012 pursuantto Section 260, 264 of the Companies Act, 1956. The Company has received the requisitenotice from a member pursuant to Section 257 of the Companies Act, 1956 proposing thecandidature of Shri Jagadeesh S. Shetty for the office of Director.
Various reasons such as preoccupation, family commitment, time constraints, increasedwork load and advancing age led to the resignation of some Directors from the Board. viz.
Smt Jyoti N. Kasliwal with effect from 24th August, 2012
Shri M. Damodaran with effect from 8th October, 2012
Shri Suresh N. Talwar with effect from 26th November, 2012
Shri Dara D. Avari with effect from 1st March, 2013
Shri Jitender Balakrishnan with effect from 28th March, 2013
The Board placed on record the invaluable contribution to the deliberations, advice andguidance given by all the Directors during their tenure as Directors.
In accordance with the Companies Act, 1956 and the Companys Articles ofAssociation, Shri Vijay Kalantri retires by rotation and being eligible, offers himselffor re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them, your Directors make the following statement in terms ofSection 217(2AA) of the Companies Act, 1956:
1) that in preparation of the Annual accounts the applicable Accounting Standards havebeen followed along with proper explanations relating to material departures, if any;
2) that such Accounting Policies have been selected and applied consistently, andjudgements and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31st March,2013 and of the Statement of Profit and Loss of the Company for the year ended on thatdate;
3) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
4) that the Annual accounts have been prepared on a going concern basis.
Fixed Deposits received from the shareholders and the public stood at Rs. Nil as on 31stMarch, 2013 (Previous year Rs. Nil).
There is no deposit or interest claimed but remained unpaid. All the claimed depositswith interest have been repaid in time.
Members are aware that the fixed deposit schemes have been discontinued with effectfrom 1st April, 2001, as benefits were not commensurate with administrative costs.
FINANCE AND ACCOUNTS
The observations made by the Auditors in their Report and included in the relevantnotes to Financial Statements are self explanatory.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements have been prepared by your Company in accordancewith the applicable Accounting Standards (AS 21, AS 23 and AS 27) issued by the Instituteof Chartered Accountants of India and the same together with Auditors Report thereon formpart of the Annual Report.
The statement pursuant to Section 212 of the Companies Act, 1956 containing the detailsof the Companys subsidiaries is attached. Pursuant to direction under section 212(8)of the Companies Act, 1956 by Government of India, Ministry of Corporate Affairs, NewDelhi vide General Circular No. - 2/2011 No. 51/12/2007-CL-III dated 8thFebruary, 2011, the Board of Directors, by passing resolution on 16th July,2013, gave consent for not publishing / attaching copies of the Balance Sheets, Statementof Profit & Loss,
Reports of the Board and the Auditors of all the Subsidiary Companies with the auditedfinancial statements of the Company as at 31st March, 2013.
The annual accounts of the subsidiary companies are kept for inspection by anyshareholder at the registered office of the Company and shall be made available toshareholders seeking such information at any point of time.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Additional information required under the Companies (Disclosure of Particulars in theReport of the Board of Directors) Rules, 1988 in respect of Conservation of Energy andTechnology Absorption is given in the prescribed forms which are given in Annexure1 to the Directors Report.
PARTICULARS OF EMPLOYEES
Information as per Section 217 (2A) of the Companies Act, 1956 read with Companies(Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, asper the provisions of Section 219 (1) (iv) of the Companies Act, 1956, the Report andAccounts are being sent to all shareholders of the Company excluding the statement ofparticulars of employees under Section 217 (2A) of the Companies Act. Any shareholderinterested in obtaining a copy of the said statement may write to the Company Secretary atthe Registered Office of the Company.
M/s. Haribhakti & Co., Chartered Accountants, Mumbai, (bearing firm registrationno. 103523W), existing Statutory Auditors of the Company were re-appointed by theShareholders of the Company at the Annual General Meeting held on Thursday, 27thSeptember, 2012, who hold the office upto the conclusion of the ensuing Annual GeneralMeeting. Since M/s. Haribhakti & Co. Statutory Auditors will be completing 10 years ofstatutory audit of the Company, as per the requirements of the proposed provisions of theCompanies Act, 2013 have offered to make way for the Company to appoint another firm ofChartered Accountants as Statutory Auditors of the Company at the ensuing Annual GeneralMeeting.
The Board, on the recommendation of the Audit Committee has proposed that M/s. ShyamMalpani & Associates, Chartered Accountants, Mumbai to be appointed as StatutoryAuditors to hold office till the conclusion of the next Annual General Meeting of theCompany. M/s. Shyam Malpani & Associates have expressed their willingness to act asStatutory Auditors of the Company, ifappointed,andhaveconfirmed would be in conformitywith the provisions of Section 224(1B) of the Companies Act, 1956.
In respect of observations made by the auditors, please refer to notes to financialstatements, note no. 31,33(a), (b), 35 in respect of Standalone Financial Statements andnotes no. 31, 33(a) &(b),35, 37 (b) in respect of Consolidated Financial Statementswhich are self explanatory and hence in the opinion of Directors, do not require anyfurther explanation.
The Cost Audit for the financial year ended 31st March 2013 was conducted byM/s. D.H. Zaveri & Associates., Cost Accountants, Mumbai. In terms of the provisionsof Section 233B of the Companies Act, 1956, the Board of Directors of your Company have onthe recommendation of the Audit Committee, appointed M/s. D.H. Zaveri &Associates.,Cost Accountants, Mumbai as Cost Auditors to conduct the cost audit of yourCompany for the financial year ending 31st March, 2014.
Your Directors wish to place on record the support, assistance and guidance provided bythe financial institutions, banks, customers, suppliers and other business associates.Thanks are also due to your Companys employees for their tireless efforts and highdegree of commitment and dedication. Your Directors especially appreciate the continuedunderstanding and confidence of the Members.
By Order of the Board
For S. KUMARS NATIONWIDE LIMITED
Nitin S. Kasliwal
Chairman & Managing Director
Place : Mumbai
Date : 16th July, 2013
ANNEXURE (1) TO THE DIRECTORS REPORT
A. CONSERVATION OF ENERGY
a) Energy Conservation measures taken
Energy resources are essential part of our life and its availability is alsoinadequate. We are committed for most advantageous utilization of various forms of energyin cost effective method for conservation of the precious energy resources.
We are continuously committed to adopt Energy Conservation measures and practices inall our processes, activities, products and services.
We believe in investing energy efficient technology with newer & efficient methods.
Practicing continuous implementation of energy conservation measures has resulted in asteady decline of specific Energy consumption.
Some major energy conservation measures carried out during the year are as under:
1. Baruche Superfine Cotton (BSFC) Division, at Jhagadia, Gujarat:
1.1) Modification of Gas burner width
We had modifiedOsthoff Singeing machine Gas Burner width from 3,600 mm to 2,000 mm, toreduce gas consumption in narrow width fabric processing. Capital investment was aroundRs. 5.3 Lacs and saving expected per annum is around Rs. 7.2 Lacs .
1.2) Installation of Variable frequency drive (VFD) in ETP Centrifuge
Variable frequency drive has been installed in ETP Centrifuge (11 KW) to control thespeed of Centrifuge drive motor. We will be able to run centrifuge with required lowerflow .
Total Power consumption are
|Earlier (Without VFD) ||200 Kwh per day |
|Now (With VFD) ||100 Kwh per day |
Saving in power consumption is 100 units per day i.e 36,000 units per Year.
1.3) Rain Water Harvesting
We have set up water harvesting system in the plant, whereby we collect whole rainwater & use the same in manufacturing process.
Total quantity collected during season was over 15,000 KL.
1.4) Fuel conversion in Thermax Steam Boiler
We had switched over to Natural Gas (NG) instead of Furnace Oil (FO) for Thermax SteamBoiler. NG is a Environmental friendly cleaner fuel as compared to FO and hence hasdrastically reduced Stack Emission level (Air pollution). Boiler efficiency also improvedby 2 % with NG as compared to FO.
1.5) Optimization of Yarn dyeing Process
Optimized Yarn dyeing process cycles and reduce water consumption. Water consumptionwas reduced by 25 Lts/Kg of yarn dyed. This has also resulted in reduction of Steamby and power consumption per Kg of yarn dyed.
Considering average Yarn dyeing production of 120 Ton/Month, Water saving is around3,000 Kl/Month.
1.6) Heater modification in Packing m/c
Heater system has been modified in Packing m/c. Earlier power consumption was 30 KW/Hr. After modification power consumption was reduced to 20 KW/Hr. Total saving per annumis around 72,000 units.
1.7) Steam control system for Vertical Drying Range
Control system has been installed for Steam flow in VerticalDrying Range for processingmachine Control valve adjusts the steam flow based on temperature feedback. Average savingin steam consumption is 0.2 Kg / KG of fabric. Over all saving in steam consumption isestimated at around 432 Tons / Year.
B. TECHNOLOGY ABSORPTION
Efforts made in Technology Absorption - As per Form "B" given below:
Research & Development (R & D)
1. Specific areas in which R&D carried out by the Company:
Focus is given on Continual Product development and research. Further, we are workingon
a) Yarn Dyeing vessel re-engineering.
b) Product Development of Stretch & Linen Yarn Dyed shirting fabrics.
c) Green Earth by using various Enzyme in processing in place of chemicals.
2. Benefits derived as a result of the above R & D
As a result we are able to cater high end market, improved the product quality andcustomer are satisfactied.
3. Future plan of action
Same as above along with Product Development having finishes like Bio Polish, AntiMicrobial, Fire retardant & Soil repellent.
4. Research and Development
Technology Absorption, Adoption and Innovation
The Company has absorbed the technology of manufacturing exclusive high value superfine cotton shirting fabric
1. Efforts, in brief, made towards technology absorption, adoption and innovation:
Latest state of the art technology machines and testing equipments have been importedfrom Western Europe, which give consistent high value end product and are being tested andmaintained regularly for consistent quality.
Additional Equipments for testing and new product developments have been installed forfaster and accurate product manufacturing.
2. Benefits derived as a result of the above efforts:
With continuous product and design developments, two new complete product range of Highvalue added Shirting is being offered to high end brands.
3. Information regarding Imported Technology:
All testing and manufacturing equipments have been imported from Europe. Latesttechnology machinery with automation has been adopted.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
a) Activities relating to export, initiatives to increase exports, Developments of newexport markets for Products and Services and Export Plan:
The Company has continued to maintain focus on and avail of export opportunities basedon economic consideration During the year the Company has exports (FOB value) worth Rs.436.48 lacs.
b) Total Foreign exchange earned and used:
(Rs. in lacs)
| ||Current Year 2012-13 ||Previous Year 2011-12 |
|a. Total Foreign Exchange earned ||436.48 ||6,692.53 |
|b. Total savings in foreign exchange through products manufactured by the Company and deemed exports ||- ||- |
|Sub Total (a + b) ||436.48 ||6,692.53 |
|c. Total Foreign Exchange used ||2,130.73 ||7,149.14 |
FORMING PART OF ANNEXURE (1)
Form for Disclosure of particulars with respect to Conservation of Energy
Part A - POWER AND FUEL CONSUMPTION
|ELECTRICITY ||Current Year ||Previous Year |
|A) Purchase: || || |
|Units (in lacs) ||276.24 ||275.30 |
|Total Amount (Rs. in lacs) ||1,657.66 ||1,566.46 |
|Rate / Units ( Rs. ) ||6.00 ||5.69 |
|B) Own Generation || || |
|Through Diesel Generator || || |
|Units (D.G. Units) (in lacs) ||3.85 ||4.52 |
|Unit/Ltr of Diesel Oil ||5.85 ||4.79 |
|Cost/Unit ( Rs. ) ||6.06 ||5.97 |
Part B - CONSUMPTION PER UNIT OF PRODUCTION
|ELECTRICITY ||Current Year ||Previous Year |
|Electricity per meter of fabrics (units) (in lacs) ||0.30 ||0.32 |