eurotex industries and exports ltd Directors report


Dear Shareholders,

Your Directors are pleased to present their 37th Annual Report on the affairs of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2023.

2022-23 2021-22
(Rs in lakhs) (Rs in lakhs)
FINANCIAL RESULTS

Profit/(Loss) before Finance Cost, Depreciation, Tax

247.07 (482.02)
Finance Cost 265.72 254.49
Profit/(Loss) before Depreciation (18.65) (736.51)
Depreciation 315.63 330.28
(334.28) (1066.79)
Tax Expenses:
Prior Years Tax Adjustments - -
Deferred Tax Charged / (Credit) (77.50) 103.35
Profit/(Loss) for the year (256.78) (1170.14)

Balance brought forward from previous year

(7097.16) (5927.02)
Transferred from OCI 0.00 0.00
Transferred from Capital Reserve 0.00 0.00
Balance Carried to Balance Sheet (7353.94) (7097.16)

PERFORMANCE REVIEW

During the year, revenue from the operations of the Company is Rs.572.40 Lakhs as compared to Rs. 225.13 Lakhs in the previous year. The operating profit of the Company is Rs.247.07 Lakhs as against operating loss of Rs.482.02 Lakhs in the previous year. The loss after finance cost and depreciation is Rs. 334.28 Lakhs as against the loss of Rs.1066.79 Lakhs in the previous year.

DIVIDEND

The Board has decided not to recommend any dividend for the financial year 2022-23.

TRANSFER TO RESERVES

There is no transfer to reserves for the financial year 2022-23.

SHARE CAPITAL

The paid-up Equity Share Capital as on 31st March, 2023 was Rs.8,74,98,650.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY

During the year, there is no Material Changes and Commitment which affects the Financial Position of the company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

In accordance with the provisions of Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, required information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgao is given in “Annexure A” to the Directors Report.

DIRECTORS & KEY MANAGERIAL PERSONNEL (KMPs)

During the Year Shri Rahul Rawat had resigned from the post of Company Secretary & Compliance Officer of the Company w.e.f. 10th February, 2023.

During the Year Ms Aisha Siraj (Membership No. A67270) had Appointed as Company Secretary & Compliance Officer w.e.f. March 01, 2023.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Shri Rajiv Patodia (DIN: 00026711) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Accordingly, his re-appointment forms part of the Notice of the ensuing Annual General Meeting. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the sub- section (7) of Section 149 of the Companies Act, 2013. The Board is of the opinion that the Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfil their duties as Independent Directors.

DIRECTORS RESPONSIBILITY STATEMENT

As required by Section 134 (3) (c) of the Companies Act, 2013, your Board of Directors hereby state:

a) that in the preparation of the Annual Accounts for the year ended 31st March, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied them consistently and 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 31st March, 2023 and of the Profit & Loss of the Company for the year ended on that date;

c) that the Directors have taken proper and sufficient care for 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; that Directors have laid down internal financial controls to be followed by the Company and such Internal Financial Controls are adequate and operating effectively; and

e) that Directors have laid down internal financial controls to be followed by the Company and such Internal Financial Controls are adequate and operating effectively; and

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out an Annual Performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its various Committees.

The Board of Directors expressed their satisfaction with the evaluation process.

The performance evaluation of the Chairperson and Non- Independent Directors was carried out by the Independent Directors at their separate meeting held on 12th August, 2022. The Independent Directors expressed their satisfaction with the evaluation process.

The performance evaluation of all the Directors, Committees and the Board was carried out by the Nomination and Remuneration Committee, Independent Directors and Board at their respective meetings.

NUMBER OF BOARD MEETINGS:

During the year 2022-23, the Board of Directors met five times on the dates as given below. The gap between two consecutive meetings was not more than one hundred and twenty days as provided in section 173 of the Companies Act, 2013.

Date of Board Meeting held During the FY 2022-23-

Sr. No.

Date of Meeting Number of Director Liable to Attend Number of Director Attend
1.

May 21, 2022

7 7
2. August 06, 2022 7 7
3. October 07, 2022 7 7
4. November 05, 2022 7 7
5. February 04, 2023 7 7

The details of the Composition of the Board of Directors are given.

Sr. No.

Name of Director

Number of Attend Number Entitled to of Meeting Attended
1. Shri Krishan Kumar Patodia 5 5
2. Shri Narayan Patodia 5 5
3. Shri Hariprasad Siotia 5 5
4. Shri V. K. Gupta 5 5
5. Shri Rajiv Patodia 5 5
6. Shri Ashwinikumar L. Dave 5 5
7. Smt. Hema Thakur 5 5

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Companys policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 is annexed hereto and forms a part of this report and is also hosted on the website of the Company www.eurotexgroup.in.

AUDITORS STATUTORY AUDITORS

The Statutory Auditors M/s. Lodha & Co., Chartered Accountants (Firms Reg. No.301051E), were appointed as Statutory Auditor for a term of five years at 36thAnnual General Meeting of the Company till the conclusion of 41stAnnual General Meeting of the Company.

COST AUDITORS

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of Cost Records relating to Textile.

MAINTENANCE OF COST RECORDS

As per Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, your Company is required to maintain cost records and accordingly, such accounts and records are maintained.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. S.K. Jain & Co., Practicing Company Secretaries, to conduct Secretarial Audit of the Company for the financial year 2022-23.

AUDITORS AND REPORTS

The matters related to Auditors and their Reports are as under:

Report of Statutory Auditor:

The Report given by the Statutory Auditors for the Financial Statements for the year ended 31st March, 2023 read with explanatory notes thereon do not call for any explanation or comments from the Board under Section 134 (3) of the Companies Act, 2013.

Report of Secretarial Auditor:

M/s. S.K. Jain & Co., Practicing Company Secretaries, was appointed to conduct Secretarial Audit of the Company for the financial year 2022-23 as required under Section 204 of the Companies Act, 2013 and the Rules there under. The Secretarial Audit Report for the financial year 2022-23 forms part of the Annual Report as “Annexure B” to the Boards Report.

CORPORATE GOVERNANCE

The Regulation 27(2)(a) of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015 regarding Corporate Governance is not applicable to the Company, as company falls under criteria of Regulation 15 (2) (a) of SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015, the paid-up capital of the company being less than Rs.10 crore and net worth being less than Rs. 25 crore, the threshold limit as prescribed therein.

AUDIT COMMITTEE

The Board has well-qualified Audit Committee with majority of Independent Directors including Chairman. They possess sound knowledge on Accounts, Audit, Finance, Taxation, Internal Controls etc. The details of the Composition of the Audit Committee are given.

Name of Person DIN Designation
Shri V. K. Gupta 00021560 Chairman
Shri Hariprasad Siotia 00015103 Member
Shri Ashwinikumar L. Dave 00126187 Member
Smt. Hema Thakur 01363454 Member

Date of Audit Committee Meeting: -.

Sr. No.

Date of Meeting Number of Director Liable to Attend Number of Director Attended
1. May 21, 2022 4 4
2. August 06, 2022 4 4
3. October 07, 2022 4 4
4. November 05, 2022 4 4
5. February 04, 2023 4 4

The Company Secretary of the Company acts as Secretary to the Committee.

During the year, there are no instances where the Board had not accepted the recommendations of the Audit Committee.

NOMINATION & REMUNERATION COMMITTEE & POLICY

The Company has duly constituted Nomination and Remuneration Committee to align with the requirements prescribed under the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of the Composition of the Nomination and Remuneration Committee are given.

NAME OF DIRECTORS DIN DESIGNATION
Shri V. K. Gupta 00021560 Chairman
Shri Hariprasad Siotia 00015103 Member
Smt. Hema Thakur 01363454 Member

The Board has framed a policy for selection and appointment of Directors, Senior Management and their Remuneration. The policy provides for determining qualifications, positive attributes, and independence of a Director.

RISK MANAGEMENT

The Company has laid down the procedures to inform the Board about the risk assessment and minimization procedures and the Board has formulated Risk management policy to ensure that the Board, its Audit Committee and its Executive Management should collectively identify the risks impacting the Companys business and document their process of risk identification and risk minimization as a part of a risk management policy/strategy.

The common risks inter alia are: Regulations, Credit Risk, Foreign Exchange and Interest Risk, Competition, Business Risk, Technology Obsolescence, Investments, Retention of Talent and Expansion of Facilities etc. Business risk, inter-alia, further includes financial risk, political risk, legal risk, etc. The Board reviews the risk trend, exposure and potential impact analysis and prepares risk mitigation plans, if necessary.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR Policy has been placed on the Companys website www.eurotexgroup.in .The Company is not required to contribute towards CSR under Section 135 of the Companies Act, 2013 read with Rules there under. The Board of Directors of your Company, however, has constituted a CSR Committee.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. Based on the report of Internal Audit function, corrective action is undertaken in the respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In line with the best Corporate Governance practices, Company has put in place a system through which the Directors and Employees may report concerns about unethical behavior, actual or suspected fraud or violation of the Companys Code of Conduct & Ethics without fear of reprisal. The Employees and Directors may report to the Compliance Officer and have direct access to the Chairman of the Audit Committee. The Whistle Blower Policy is hosted on the website of the Company i.e. www.eurotexgroup.in.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Internal Complaints Committees (ICC) have been set up to redress complaints received regarding sexual harassment and the Company has complied with provisions relating to the constitution of Internal Complaints Committee under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.

The following is a summary of Sexual Harassment complaints received and disposed off during the year: a) No. of Complaints received: Nil b) No. of Complaints disposed of: Nil

DISCLOSURE UNDER SECTION 197 (12) OF THE COMPANIES ACT, 2013

Disclosures pertaining to remuneration and other details as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a) Ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year:

Name of Director Ratio to Median Remuneration
Shri K. K. Patodia 5.13
Shri Narayan Patodia 3.66
Shri Rajiv Patodia 2.20

b) Percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary in financial year:

Name of Person

Designation % increase Remuneration
Shri. K. K. Patodia Chairman and MD 0.00
Shri. Narayan Patodia Managing Director 0.00
Shri. Rajiv Patodia Executive Director 0.00

c) Percentage increase in the median remuneration of employees in the financial year: Nil

d) The number of permanent employees on the rolls of the Company: 32 employees

e) Average percentile increases already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: Nil

f) Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the Company.

A statement comprising the names of top 10 employees in terms of remuneration drawn and every person employed throughout the year, who were in receipt of remuneration in terms of Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as “Annexure C” and forms an integral part of this Report.

The above Annexure is not being sent along with this Annual Report to the Members of the Company in line with the provision of Section 136 of the Companies Act, 2013. The aforesaid Annexure is available for inspection by Shareholders at the Registered Office of the Company, 21 days before and up to the date of the ensuing Annual General Meeting during the business hours (working days) of the Company.

None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his/her spouse and dependent children) more than two percent of the equity shares of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the Company has not given any loans and guarantees. Details of Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. There are no materially significant Related Party Transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large and hence, enclosing of Form AOC-2 is not required. All Related Party Transactions are placed before the Audit Committee as well as the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all Related Party Transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The Company has developed a Related Party Transactions Policy for the purpose of identification and monitoring of such transactions.

The policy on Related Party Transactions as approved by the Board is available on the Companys website at www.eurotexgroup.in.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Regulation 34 (2) (e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion & Analysis Report for the year under review is given under a separate section and forms part of the Annual Report.

PUBLIC DEPOSITS

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Act is not applicable.

ANNUAL RETURN

The Annual Return of the Company for the financial year ended 31st March, 2023 in Form MGT-7 as required under Section 92(3) of the Companies Act, 2013, is available on the Companys website and can be accessed at www.eurotexgroup.in.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

During the financial year 2022-23, there were no significant or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and operations of the Company in the future.

COMPLIANCE WITH SECRETARIAL STANDARDS

Your Company has complied with Secretarial Standards issued by the Institute Company Secretaries of India on Board and General Meetings.

REPORTING OF FRAUDS

There were no frauds reported by the Statutory Auditors under provisions of Section 143 (12) of the Companies Act, 2013 and Rules made there under.

OTHER DISCLOSURES

The Company has only two reportable business segment i.e. “Yarn and Real Estate Development Segment” in terms of requirement of IND AS-108 and has its operations/assets located in India.

During the year under review, the Company does not have any Subsidiary or Joint Venture or Associate Company. No application has been made under the Insolvency and Bankruptcy Code; hence the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable.

The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.

ACKNOWLEDGEMENT

Your Directors wish to place on record their appreciation and thankful acknowledgement for valuable assistance the Company received from all Customers, Agents, Suppliers, Investors and Bankers.

On behalf of the Board

K. K. PATODIA
Chairman and Managing Director
Place: Mumbai
Date : 4th August, 2023