Tuni Textile Mills Ltd Directors Report.

To

The Members,

Your Directors have pleasure in presenting the 31st Annual Report of your Company together with the Audited Statements of Accounts for the year ended March 31, 2018.

(Rs. in lakhs)
Financial Results Year Ended 31.03.2018 Year Ended 31.03.2017
Income 3439.11 2813.18
Profit/(Loss) before Tax & Extra-ordinary Items 20.05 (3.01)
Less : Provision for Taxation (Including Deferred Tax) 31.55 5.46
Less : Provision for Extra-Ordinary Items 2.44 (14.09)
Profit/(Loss) after Tax (13.94) 5.62
Changes due to conversion of accounts from GAAP to Ind AS (3.70) -
Add : Profit/(Loss) brought forward from Previous Year (69.32) (189.99)
Balance carried forward (86.96) (184.37)

OVERVIEW OF ECONOMY

Indias economy picked up some pace in FY 2017-18 and the gross domestic product growth was better than FY 2016-17. The structural reform of The Goods and Services Tax (GST) within a year of demonetisation is expected to provide a boost to the economic growth and investments in the long run. With an improving business ecosystem, stable macroeconomic indicators and a liberal FDI regime, foreign capital inflow has provided impetus to the domestic economy. According to World Banks Global Economic Prospects report, Indias GDP is expected to rise to 7.4% in FY 2018-19 and 7.8% in FY 2019-20.

The Indian textiles industry is among the oldest in the country. It is projected to reach USD 230 billion by 2020 from around USD 120 billion. Currently, the domestic textiles industry contributes 10% to the manufacturing output of the country, generates about 4% to its GDP and employs more than 45 million people. Importantly, the sector contributes 15% to the export earnings of India. Mitigating the repercussions of currency fluctuation remains a challenge.

Exports have been a core feature of Indias textile sector. The Indian textiles export market, estimated at $18 billion, is expected to grow at a CAGR of 4% compared to the global CAGR of 3% over 2016-26.

The fundamental strength of the textile industry is its strong production base of wide range of fibre and yarns from natural fibres like cotton, jute, silk and wool to synthetic and manmade fibres such as polyester, viscose, nylonandacrylic. The challenge here is the fluctuation in prices of the raw materials like wool and increase in oil prices which increase the input costs.

PERFORMANCE HIGHLIGHTS & OUTLOOK

The current financial year 2017-18 was difficult time for the Company due to the impact of demonetization as well as implementation of GST on Grey Cloth. The profit margin has come down drastically due to increase in cost of GST vs. selling price as well as difference in rate of GST on Grey cloth vs. finished cloth. The abnormal delay in refund of GST has made the Company difficult to manage its working capital and thus has forced to sale a part of land to have liquidity to run its manufacturing unit.

Gross revenue from operations stood at Rs. 3439.11 lakh in comparison to last years sales of Rs. 2805.42 lakh. In term of PAT, the Company has incurred a loss of Rs. 13.94 lakh in comparison to last years net profit of Rs.5.62 lakh.

During the year under review, the Company has received Rs. 96.24 lakh representing the realization value on account of sale of part of land at Murbad, Dist. Thane. The same has been taken to the books of account as an exceptional item.

The Company is into the business of manufacturing grey cloth at its unit located at Murbad, Dist. Thane, Maharashtra.

As the Govt. has started to release the refund of GST, the Company is hopeful of recovering from difficult phase and business will be as usual as the time progresses.

BUSINESS SEGMENT

During the year, the Company is into the business of fabric manufacturing i.e. manufacturing of Synthetic Fabric, a part of textile products in accordance with the Accounting Standard 17 notified by Companies (Accounting Standards) Rules 2006.

DIVIDEND AND RESERVES

In view of carried forward losses and in order to meet future challenges and financial requirements, your Directors do not propose any dividend for the year under review.

During the year under review, no amount has been transferred to General Reserves.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2018 was of Rs. 13.17925 Crore. During the year under review, the Company has not issued any share with differential voting rights nor granted stock options nor sweat equity. As on March 31, 2018, none of the Directors and/or Key Managerial Person of the Company hold instruments convertible in to Equity Shares of the Company.

FINANCE AND ACCOUNTS

As mandated by the Ministry of Corporate Affairs, the financial statements for the year ended on March 31, 2018 has been prepared in accordance with the Indian Accounting Standards (IND AS) notified Section 133 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014. The estimates and judgements relating to the Financial Statements are made on a prudent basis, so as to reflect in a true and fair manner, the form and substance of transactions and reasonably present the Companys state of affairs, profits and cash flows for the year ended March 31, 2018.

The Company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

There is no audit qualification in the standalone financial statements by the statutory auditors for the year under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments, if any, covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

SUBSIDIARY COMPANY

The Company does not have any material subsidiary as defined under the Listing Regulations. However, it has formulated a policy for determining its ‘Material Subsidiaries and the same is available on the website of the Company viz. www.tunitextiles.com.

RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Regulation 23 of Listing Regulations; during the financial year were in the ordinary course of business and on an arms length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder are not attracted and thus disclosure in term of Section 134(3)(h) r/w Rule 8(2) of the Companies (Accounts) Rules, 2014 and under Regulation 34(3) & 53(f), Para A of Schedule V of SEBI(LODR) Regulations, 2015 is attached as Annexure I. Further, there are no materially significant transactions with related parties during the financial year which were in conflict with the interest of the

Company. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements. The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website viz. www.tunitextiles.com.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis on the operations of the Company as prescribed under Part B of Schedule V read with regulation 34(3) of the Listing Regulations, 2015 is provided in a separate section and forms part of the Directors Report.

CHANGE IN NATURE OF BUSINESS, IF ANY.

There are no changes in the nature of business in the financial year 2017-18.

BOARD EVALUATION

The Board of Directors have laid down the manner for carrying out an annual evaluation of its own performance, its various Committees and individual directors pursuant to the provisions of the Act and relevant Rules and the Corporate Governance requirements are in compliance with Regulation 17 of Listing Regulations, 2015. The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of various criteria such as Board Composition, process, dynamics, quality of deliberations, strategic discussions, effective reviews, committee participation, governance reviews etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of criteria such as Committee composition, process, dynamics, deliberation, strategic discussions, effective reviews etc. The Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as transparency, analytical capabilities, performance, leadership, ethics and ability to take balanced decisions regarding stakeholders etc.

NUMBER OF MEETINGS OF THE BOARD

The details of the Board Meetings and other Committee Meetings held during the financial year 2017-18 are given in the separate section of Corporate Governance Report.

BOARD COMMITTEES

All Committees of the Board of Directors are constituted in line with the provisions of the Companies Act, 2013 and applicable regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

MANAGEMENT

There is no change in management of the Company during the year under review.

DIRECTORS

There is no change in composition of Board during the year under review.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Further, none of the Directors of the Company are disqualified under sub-section (2) of Section 164 of the Companies Act, 2013.

INDEPENDENT DIRECTORS

As per provisions of Section 149 of the 2013 Act, independent directors shall hold office for a term up to five consecutive years on the board of a company, but shall be eligible for re-appointment for another term up to five years on passing of a special resolution by the company and disclosure of such appointment in

Boards Report. Further Section 152 of the Act provides that the independent directors shall not be liable to retire by rotation in the Annual General Meeting (‘AGM) of the Company.

As per requirements of Regulation 25 of Listing Regulations, a person shall not serve as an independent director in more than seven listed entities: provided that any person who is serving as a whole time director in any listed entity shall serve as an independent director in not more than three listed entities. Further, independent directors of the listed entity shall hold at least one meeting in a year, without the presence of non-independent directors and members of the management and all the independent directors shall strive to be present at such meeting.

DETAILS OF DIRECTORS / KMP APPOINTED AND RESIGNED DURING THE YEAR

Sl. No. Name Designation Date of Appointment Date of Resignation
1. - - - -

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, TRIBUNALS OR COURTS

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT

There have been no material changes and commitments affecting the financial position of the Company between the end of Financial Year and date of the report.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of knowledge and belief and according to the information and explanations obtained, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013:

1. that in the preparation of the Annual Accounts for the year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. the directors had 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, 2018 and of the profit/(loss) of the Company for the year ended on that date;

3. that the Directors have taken proper and sufficient care for the 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;

4. the annual accounts have been prepared on a going concern basis;

5. that 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; and

6. that the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

BUSINESS RISK MANAGEMENT

Risk management is embedded in your Companys operating framework. Your Company believes that managing risks helps in maximizing returns. The Companys approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks. The risk management framework is reviewed periodically by the Board and the Audit Committee. However, provision of Regulation 21 of Listing Regulations for constitution of Risk Management Committee is not applicable to the Company.

INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

Your Company has an Internal Control System, which is commensurate with the size, scale, scope and complexity of its operations. To maintain its objectivity and independence, an independent firm of Chartered accountants has been appointed as the Internal Auditors, who report to the Chairman of the Audit Committee of the Board.

The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control system in your Company, its compliance with operating systems, accounting procedures and policies of your Company. Based on the report of the Internal Auditors placed before the Audit Committee, process owners undertake corrective action in their respective areas and thereby strengthen the controls. The internal controls have been reported by the Auditors to be adequate and effective during the year.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company i.e. www.tunitextiles.com

INFORMATION TECHNOLOGY

Innovation and Technology are synonymous with the Company. The investment in technology acts as a catalyst and enables the Company to be innovative.

RESEARCH & DEVELOPMENT

The Company believes that technological obsolescence is a reality. Only progressive research and development will help us to measure up to future challenges and opportunities. We invest in and encourage continuous innovation. During the year under review, expenditure on research and development is not significant in relation to the nature size of operations of your .

AUDITORS

Statutory Auditors

M/s. Mehta Kothari & Associates, Chartered Accountants, Mumbai (FRN : 106247W) are the statutory auditors of the Company for the year ended March 31, 2018. Their appointment as the statutory auditors will be ratified at the ensuing Annual General Meeting pursuant to the provisions of Section 139 of the Companies Act, 2013, and Rules made thereunder.

There is no audit qualification, reservation or adverse remark for the year under review.

Secretarial Auditors

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 G. S. Bhide & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company.

The Report of the Secretarial Audit Report in the form of MR-3 is annexed in this Annual Report as Annexure II.

Internal Auditors

The Company has appointed M/s D. Thakkar & Associates, Chartered Accountants, Mumbai (FRN 132824W) to undertake the Internal Audit of the Company.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, extract of the Annual Return for the financial year ended 31st March, 2018 made under the provisions of Section 92(3) of the Act is attached as Annexure III to this report.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197(12) read with Rule, 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is as under -

i the ratio of the remuneration of each Directors & KMP Ratio
director to the median remuneration of the employees of the company for the financial year; Narendra Kumar Sureka 2.21:1
Pradeep Sureka 2.21:1
Archit Sureka 1.20:1
Mamta Jain 0.68:1

1. The median remuneration of employees of the Company was Rs. 3,51,000/-

2. Figures has been rounded off wherever necessary

ii The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year; Name Designation Increase %
Narendra Kumar Sureka Managing director 29.16
Pradeep Sureka whole time director 29.16
Archit Sureka CFO 6.06
Mamta Jain CS 0.00

 

iii the percentage increase/decrease in the median remuneration of employees in the financial year; 22.62%
iv the number of permanent employees on the rolls of Company 63 employees as on 31.03.2018
v the explanation on the relationship between average increase remuneration and company performance; The profit before tax for the financial year ended March in 31, 2018 Increased by 240.61% whereas the increase in median remuneration was 18.57% in line with industry standard and the performance of the company
vi comparison of the remuneration of the Key Managerial Personnel against the performance of the company; The total remuneration of key Managerial Personnel increased by 20.37% from Rs. 22,10,000/- in 2017-18 to Rs. 18,36,000/- in 2016-17 whereas the Profit before Tax increased by 240.61% to Rs. 20,05,113/- in 2017-18 (14,25,063/- in 2016-17)

 

Particulars 31st March 2018 31st March 2017
vii variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year; Market Capitalization 640 Lakhs 640 Lakhs
Price Earnings Ratio -44.55% -54.44%
Networth of the Company 12,30,96,021/- 12,48,60,960/-
The Company has not made any public issue during the year

 

viii Average percentile increase in salaries of employees other than managerial personnel 48.62%

 

ix Comparison of each remuneration of key managerial personnel against the performance of the company Particulars 31st March 2018 Reason against performance of the company
Narendra Kumar Sureka 7,75,000/- Profit before tax decreased by 42.77% and profit after tax decreased by 64.41% in FY 2017-18
Pradeep Sureka 7,75,000/-
Archit Sureka 4,20,000/-
Mamta Jain 2,40,000/-

 

x The key parameters for any variable component of remuneration availed by the directors; None
xi The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year; None
xii Affirmation remuneration policy of the company. Remuneration paid to all Employees is in accordance with the Remuneration Policy

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT 2013 READ WITH RULES

Pursuant to the requirements of Section 22 of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013 read with Rules thereunder, the Company has not received any complaint of sexual harassment during the year under review.

PARTICULARS UNDER SECTION 134(3)(m) OF THE COMPANIES ACT, 2013

The Company is engaged in the business of manufacturing Synthetic Fabric. The information regarding Conservation of Energy, Technology Absorption, Adoption and Innovation and the information required under section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014 are reported to be as under:

MURBAD UNIT- ELECTRICITY 2017-2018 2016-2017
Electricity Purchased [Units (KWH)] 1402439 1449857
Total Amount (Rs.) 4380200 4067778
Average Rate (Rs.) 3.12 2.81
Consumption Per Unit of Production
Cloth Production (Mtrs.) 1623422 2566575
Cost of Electricity Consumption (Rs.) / Mtrs. 2.70 1.58

FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company has earned sum of Rs. 81,85,732/- (Equivalent to USD 128697.24) during the current financial year while outgo in foreign currency was Nil.

PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposits from the public within the meaning of section 73 of the Companies Act, 2013 and the rules there under.

REPORT ON CORPORATE GOVERNANCE

As per Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on corporate governance practices followed by the Company, confirming together with compliance certificate forms an integral part of this Report.

CAUTIONARY STATEMENT

Statements in this Directors Report and Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied.

APPRECIATION

Your Directors wish to place on record their appreciation towards the contribution of all the employees of the Company and their gratitude to the Companys valued customers, bankers, vendors and members for their continued support and confidence in the Company.

By order of the Board
For TUNI TEXTILE MILLS LIMITED
Mumbai, May 30, 2018
Registered Office : Narendra Kumar Sureka
63/71, Dadiseth Agiary Lane DIN : 01963265
3rd Floor, Kalbadevi Road, Mumbai-400002. Managing Director

Annexure I

DETAILS OF RELATED PARTY TRANSACTIONS

A. (Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014) All related party transactions entered during the year were in ordinary course of business and on arms length basis and the same have been disclosed under Note No.37 of the Notes to Financial Statements.

No material related party transactions arising from contracts/ arrangements with related parties referred to in the Section 188(1) of the Companies Act, 2013 were entered during the year by the Company. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

B. Disclosures pursuant to Regulation 34(3) & 53(f) and Para A of Schedule V of SEBI (LODR) Regulations, 2015

Sl. No. In the Account of Disclosures of amount at the year end and the maximum amount of loans/advances/Investments outstanding during the year.
1. Holding Company • Loans and advances in the nature of loans to subsidiaries by name and amount
• Loans and advances in the nature of loans to associates by name and amount
• Loans and advances in the nature of loans to Firms/Companies in which directors are interested by name and amount
2. Subsidiary • Loans and advances in the nature of loans to subsidiaries by name and amount Not Applicable
• Loans and advances in the nature of loans to associates by name and amount
• Loans and advances in the nature of loans to Firms/Companies in which directors are interested by name and amount
3. Holding Company • Investment by the loanee in the shares of parent Company and subsidiary Company has made a loan or advance in the nature of loan.

 

By order of the Board
For TUNI TEXTILE MILLS LIMITED
Mumbai, May 30, 2018
Registered Office : Narendra Kumar Sureka
63/71, Dadiseth Agiary Lane DIN : 01963265
3rd Floor, Kalbadevi Road, Mumbai-400002. Managing Director