Modern Syntex (India) Ltd Directors Report.
Your Directors have pleasure in presenting the 37th Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2015.
I. FINANCIAL RESULTS
The Companys financial performance, for the year ended March 31,2015 is summarised below:
(Rs. in Lacs)
|Particulars||Year ended 31.03.2015||Year ended 31.03.2014|
|Net Turn over and other lncome||8476.82||9418.99|
|Profit/(Loss) before Interest and Depreciation||(305 37)||(217.81)|
|Profit/(Loss) Before Depreciation||(1112.82)||(1063.72)|
|Balance brought forward from previous year||(54422,91)||(52233.49)|
|Balance carried forward to Balance Sheet||(56115.30)||(54422.91)|
The year under review the polyester scenario continue to remain in pressure due to weak domestic textile market. This has resulted into severe pressure in profit margins. The unprecedented fluctuation in oil price leading to abnormal fluctuation in the price of raw material, viz PTA and MEG which are based on crude oil prices. The polyester industries in India particularly has been suffering for incessant capacity in past few years in market, which was already over supplied. It has put pressure on profitability of your company during the year under review.
The company achieved a gross turnover of Rs. 84 crores during the current years as against Rs. 93 crores in the previous year. The operating levels were low during the year also due to POY Division remained closed except certain line restarted at the end of December 14 to the extent of captive consumption. Your company is not able to reduce the net loss during the years under review due to adverse market condition.
Your company is relentlessly putting all its efforts to reduced the cost and improve the operating margin but profit of the company still negative. In view of accumulated loss, your Directors are unable to declare any dividend in the year under review.
The world wide recessionary trend has adversely affected the export of PFY from the country. Despite the recessionary trend prevailing in the global economic market, the company has been able to maintain export of Rs. 27 crores during the years under review, which is almost same as of in the previous year. Your company is making all efforts to explore new market and improve its global market position.
4. FUTURE PROSPECTS
The current situation is expected to continue during the financial year 201516. Market is expected to improve slowly during the second half of the 201516 due to renewed confidence in the market brought by a series of economic reforms pursued by the government. With the inventory available on the ground, the selling prices will be under pressure. Further, the increase in the cost of power and consumables will have an impact on the margin, due to power not available through open access at cheaper rate than the company has no option but to purchase power from state Electricity Board at a higher cost. With the expectations of improvement in the market condition during the year, the company will endeavor to perform better than last year.
5. STATUS OF PROCEEDINGS AT BIFR AND SETTLEMENT OF REMAINING DEBTS
The Company is making continuous efforts for restructuring / settlement of remaining dues. The Draft Rehabilitation Scheme submitted to the Honble BIFR with copy to Operating Agency (IFCI) in February, 2013 is under examination and consideration,
6. PUBLIC FIXED DEPOSITS
Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year under review In view of the petition filed by the Company, the Honble Company Law Board had passed an order on 23.1.2002 that, "The repayment of Public fixed deposits shall be made by the company in accordance with the "revival scheme" as and when approved by the BIFR under the provisions of SICA". However payments on compassionate grounds are being made continuously by the Company as per the decision of the committee formed by Honble CLB for this purpose.
7. DIRECTORS AND COMMITTEES
During the year under review, Shri Niraj Rathore and Shri R. Venugopal was appointed as an Independent Directors of the Company for a period of five consecutive years upto 31st March, 2019 and Smt. Sunita A. Sharma was appointed as an Additional Director of the Company with effect from 19st March, 2015.
In accordance with the provisions of Companies Act, 2013, Shri (Carnal Ranka, Chairman & Managing Director of the Company whose term expires on 18th October, 2015 and re-appointed by the Board of Directors in their meeting held on 26th June, 2015 for a period of 3 years with remuneration subject to the approval of shareholders in ensuing Annual General Meeting and further approval of C entral Government, if required.
Declaration of Independent Directors
The Company has received declarations from all the Independent directors of the Company that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Clause 49 of the ListingAgreement.
Policy on Directors Appointment and Remunerations
The Board has, on the recommendation of the Nomination & Remuneration Committee framed and adopted a policy for nomination, remuneration and evaluation of Directors, Key Managerial Personnel (KMP) and other employees of the Company.
Criteria for Selection/Appointment
The Non-Executive/Whole-time/Managing Director, Key Managerial Personnel (KMP) and other employees shall be of high integrity, qualification with relevant expertise and experience.
In case of appointment of Independent Directors, the Committee shall satisfy itself with regard to the independent nature of the Directors and also ensure that the candidate identified for appointment as an Independent Director is not disqualified for appointment under Section 149 and 164 of the Companies Act, 2013.
The Whole time Director/Managing Director/Key Managerial Personnel (ICMP) and other employees shall be entitled to receive remuneration/ compensation/commission etc. as per the provisions of the Companies Act, 2013andrules made there under or any other enactment for the time being in force.
The Non-Executive Directors and Independent Directors shall be entitled to receive remuneration by way of sitting fees, reimbursement of expenses for participation in the Board meetings within the overall limits prescribed under the Companies Act, 2013 and rules made there under or any other enactment forthe time being in force.
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship. A structured parameters was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Company, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board and the performance evaluation of the Chairman and the Non Independent Directors of the Company was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.
Number of Board Meetings
The Board of Directors duly met four times during the financial year from 1st April, 2014 to 31st March, 2015 i.e. 27th June, 2014, 26th September, 2014, 23rd December, 2014 and 19th March, 2015. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.
The Board of Directors of the Company has constituted the Audit Committee of Directors to act in accordance with the terms of reference specified by the Board as stipulated in Section 177 of the Companies Act, 2013. The details of Committee members are as follows: -
|Name of Director||Designation||Category|
|Shri Niraj Rathore||Chairman||Independent Director|
|Shri R. Venugopal||Member||Independent Director|
|Shri Hiralal Sharma||Member||Non-Executive Director|
Nomination and Remuneration Committee
The Board of Directors of the Company has constituted the Nomination and Remuneration Committee of Directors to act in accordance with the provisions of Section 178 of the Companies Act, 2013. The details of Committee members are as follows:-
|Name of Director||Designation||Category|
|Shri Hiralal Sharma||Chairman||Non-Executive Director|
|Shri R. Venugopal||Member||Independent Director|
|Shri Niraj Rathore||Member||Independent Director|
8. DIRECTORS RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:
(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period; j
(c) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) The directors have prepared the annual accounts on a going concern basis;
(e) The directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.
9. AUDITORS AND AUDITORS REPORT
M/s T.R. Chadha & Co. (Firm Regn. No. 00671 IN), Chartered Accountants, Mumbai were appointed as Statutory Auditors of the Company at the last Annual General Meeting held on 26th September, 2014 to hold office till the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.
The observations made in the Auditors Report read together with relevant notes thereon are self-explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013. SecretarialAuditors
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. JAKS & Associates, Company Secretaries, Jaipur to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as Annexure-A. The observations in Secretarial Audit Report which pertains mainly Listing agreement requirements, stock exchange compliances etc., it is clarified that the company will take necessary action on implementation of rehabilitation scheme pending for examination and approval of BIFR.
10. PARTICULAR OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not given any guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the loans and investments made by Company are given in the notes to the Financial Statements.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review your Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the applicable provisions of the Companies Act, 2013 and Rules made thereunder. ,
12. CORPORATE SOCIAL RESPONSIBILITY
The provisions of Section 135 and Schedule VII of the Companies Act, 2013 regarding corporate social responsibility are not applicable to the Company.
13. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations to safeguard and protect from loss, unauthorized use or disposition of its assets. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system of the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. All the transactions are properly authorized, recorded and reported to the Management of the Company. Significant audit observations and recommendations along with corrective actions taken by the management thereon are presented to the Audit Committee meetings and thereafter Board Meetings.
14. BUSINESS RISK MANAGEMENT
In accordance with Clause 49 of the Listing Agreement, the . Board of Directors of the Company formally adopted a policy i.e. Risk Management Policy for framing, implementing and monitoring the risk management plan for the Company. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. The policy establishes a structured and disciplined approach to Risk Management. In the challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks of the Company inter alia are: competition, business risk, technology obsolescence, investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelity risk, legal risk. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.
15. CODE OF CONDUCT
The Company has a Code of Conduct which is applicable to the Board of Directors, Key Managerial Personnel and all other employees in the course of day to day business operations of the Company. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors, Key Managerial Personnel and all other designated employees of the Cdmpany in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure.
16. VIGIL MECHANISM
Pursuant to the provision of Section 177 (9) and (10) of the Companies Act, 2013, the Company has adopted Vigil Mechanism, which also incorporates a whistle blower policy for Directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud and violation of the Companys code of conduct and ethics. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns.
17. INDUSTRIAL RELATIONS AND PARTICULARS OF EMPLOYEES
Your Directors sincerely appreciate the workers, staff and officers for putting their best efforts. The Company has enjoyed healthy and cordial industrial relations throughout the year except the workers in the POY section created labor unrest and the company has declared lock out in its POY Division form 15th November, 2012.
The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance.
18. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary, Joint venture or Associate Company.
19. EXTRACT OF ANNUAL RETURN
In accordance with Section 134 (3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format (MGT-9) isappended as Annexure-B to the Boards Report.
20. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as Annexure-C.
Your Directors state that no disclosures or reporting are required in respect of the following items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend, voting or otherwise.
2. No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relate and the date of this report.
3. No significant or material orders were passed by the regulators or Courts or Tribunals which impact the going concern status and Companys Operations in future.
Your Directors wish to extend their sincerest thanks to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous cooperation and assistance.
|ON BEHALF OFTHE BOARD|
|Date: 26th June, 2015||Chairman & Managing Director|