MANAGEMENT DISCUSSION AND ANALYSIS
Since 2009-10 your Company has been facing acute shortage of working capital andcumulative losses since then have seriously affected the operations during the year2011-12. The Company has created excellent weaving facilities and that has enabled it todo Job Weaving for other producers. This has enabled your Company to sustain theoperations in the most difficult situations.
Your Company had moved various proposals to the banks - Bank of Baroda and UCO Bank forreviving the operations but the same have not been accepted by them. In the circumstancesthe Company could not honour its repayment obligations to the banks and the banks haveresorted to recovery proceedings under the SARFAESI Act, 1972.
Your Company also attracts provisions of Section 23 (1) (a) (i) of The Sick IndustrialCompanies Act, 1985 due to erosion of Net worth. The company has incurred loss due to poorutilization of facilities on account of paucity of working capital as also substantialinvestment in assets which could not be operationalised namely ring Spinning Section. Theinterest cost of such non operational investment and consequent losses due to inadequacyof working capital has caused the loss of Net Worth.
MANAGEMENT PERCEPTION OF RISK AND CONCERN
1. Textile industry is highly competitive not only for domestic market but for globaltrade as well. In such a scenario wide fluctuations in the value of Rupee vis a vis U SDollar has significant effect on business dealings.
2. With the economic slowdown in many Eurpoean Countires, fabric export from India hasbeen adversely affected. Though the Govt. is aware of these developments, it has not beenable to do much to support textiles industry. An integrated view need to be taken by theauthorities in this regard for safeguarding the interest of industry.
3. Your Company is making all out efforts to keep the wheels of industry moving andsettle the issues with banks amicably.
INTERNAL CONTROL SYSTEM
Commensurate to the size and nature of its business your Company has developed a welldefined internal control system. The Company takes abundant care to design, review andmonitor the working of internal control system for optimal utilization and protection ofresources. All significant issues are brought to the attention of the Audit Committee ofthe Board.
HUMAN RESOURCES/INDUSTRIAL RELATIONS
Though your Company is facing a difficult situation, its employees have high morale andremain motivated to steer it through. Performance management is the key word for theCompany. The Company has developed an environment of harmonious and cordial relations withits employees. As the Company is in Textile business only, segment reporting is notrequired.
No dividend is being recommended for the year under review in view of the losses.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 217(2AA) of the Companies Act, the Directors hereby confirmthat:
i) in the preparation of the annual accounts, the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
ii) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe Loss of the Company for that period ;
iii) the Directors have taken proper and sufficient care to the best of their knowledgeand ability for the maintenance of adequate accounting records in accordance withprovisions of this Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
iv) the Directors have prepared the annual accounts on a going concern basis.
In accordance with the provisions of the Companies Act, 1956 and the Articles ofAssociation of the Company Mr. S.G. Vyas and Mr. S.K.Singhal, Directors of the Companyretire by rotation and being eligible, offer themselves for re-appointment. Mr. R.N.Swamiwas appointed as Additional Director w.e.f. 19.03.2012. Mr. Swami is not seeking reappointment due to other commitments.
Information as per section 217 (2A) of the Companies Act, 1956 read with the Companies(Particulars of Employees) Rules, 1975:
None of the employee was in receipt of remuneration in excess of limit prescribed underSection 217 (2A) of the Companies Act, 1956.
Energy Conservation, Technology Absorption & Foreign Exchange
The information required under Section 217(1) (e) of the Companies Act, 1956 read withthe Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988with respect to Conservation of energy, technology absorption and foreign exchangeearnings/outgo is appended hereto and form part of this report.
M/s G. Dutta & Co., Chartered Accountants, Auditors of the Company retire and beingeligible offers themselves for re-appointment.
The observations made by the Auditors in their Report are adequately explained in thenotes to the Accounts and significant Accounting Policies and need no further elaboration.
As per Clause 49 of the listing agreement with the Stock Exchange, a separate sectionon Corporate Governance forms part of the Annual Report.
A Certificate from the Auditors of the Company confirming compliance with conditions ofCorporate Governance as stipulated under the Clause 49 of the listing agreement is annexedto this Report.
The Board acknowledges the valuable assistance and cooperation received from GovernmentAuthorities and Business Constituents and looks forward to their continued support.
Your Directors express their deep appreciation for the commitment and hard work put inby all employees.
| ||For and on behalf of the Board |
|Place: Jaipur ||(S.G.VYAS) |
|28.09.2012 ||MANAGING DIRECTOR |