Dear Members,
We are pleased to present the 33rd Annual Report of the
Company and the audited statement of accounts for the year ended 31st March, 2023. A
summary of the financial results is given below.
SUMMARISED FINANCIAL RESULTS: (Rs. in lakhs)
INCOME |
Year ended 31.03.2023 |
Year ended 31.03.2022 |
| Revenue from operations |
3093.37 |
4347.24 |
| Other income |
470.70 |
24.95 |
| Total Income |
3564.07 |
4372.19 |
EXPENSES |
|
|
| Cost of material consumed |
755.54 |
508.57 |
| Purchase of stock-in-trade |
-- |
-- |
| Excise duty |
-- |
-- |
| Change in inventories of finished goods, work
in process and stock in trade |
411.22 |
(152.37) |
| Employees benefit expenses |
1606.54 |
1860.76 |
| Finance costs |
-- |
-- |
| Depreciation and amortisation |
1387.32 |
1486.31 |
| Other expenses |
2045.30 |
2131.59 |
| Total Expense |
6205.92 |
5834.86 |
| Profit/ (Loss) before exceptional items and
tax |
(2641.85) |
(1462.67) |
| Less: Exceptional items |
-- |
-- |
| Profit/ (Loss) before tax |
(2641.85) |
(1462.67) |
| Less/(-Add): Tax expense |
-- |
-- |
| Current tax |
-- |
-- |
| Deferred tax |
-- |
-- |
| Profit/ (Loss) after tax |
(2641.85) |
(1462.67) |
| Other comprehensive income |
-- |
65.08 |
| Total Comprehensive Income |
(2641.85) |
(1397.59) |
OPERATIONS & PERFORMANCE:
During the year under review, the Companys operations continued to be
affected due to lack of sufficient working capital funds required for operations resulting
in lower capacity utilisation and the gross margins have suffered due to high input costs
as the Company is not able to negotiate fine pricing with its suppliers. Furthermore, the
constraints of funds have effected Companys plans to undertake debottlenecking and
regular capital expenditure as per industry norms and needed for proper maintenance and
upkeep of its plant, machinery and equipment.
During the year ended 31.03.2023, the Company incurred a loss of Rs.
2641.85 lakhs in comparison to the loss of Rs. 1397.59 lakhs for the previous year ended
31.03.2022. Your Companys turnover of Rs. 3564.06 lakhs was marginally low against the
previous year turnover of Rs. 4372.19 lakhs for the aforementioned reasons. The Company
has since undertaken manufacturing for third parties on job work basis, and is able to
recover variable costs and part of fixed costs.
CLAIMS AGAINST THE COMPANY:
The Companys borrowings from certain secured lenders had been assigned
by the lending banks to Edelweiss Asset Reconstruction Company Limited (EARC), an Asset
Reconstruction Company (ARC).
EARC has claimed that it is an assignee of debt recoverable by certain
banks from the Company, and the Company has a counter claim against the claimants for the
losses caused by them to the Company which are pending adjudication before the
Honble debt Recovery Tribunal.
The actions of the Banks and EARC, amongst others, for recovery from
the Company and the petitions filed by them to initiate insolvency against the Company are
disputed by the Company, amongst other reasons, being barred by limitation. The Company
had without prejudice to its rights and without acknowledging its liability, initiated
discussions with claimants to settle the disputes, which failed.
The Financial Commissioner of the State of Punjab had determined that
the Agreements for Assignment of debt by certain lenders to the Company in favour of EARC
are insufficiently stamped, and therefore, defective. A demand of Rs. 4.46 crores
(interest and penalty not applied as yet) was raised against EARC in respect of one of the
Assignment Agreements. A writ petition filed by EARC before the Honble Punjab and
Haryana High Court at Chandigarh against the proceedings initiated by the Financial
Commissioner was allowed.
The State of Punjab and the Company have filed Letters Patent Appeal
(LPA) against the order of the Single Judge Bench of the Honble Punjab and Haryana
High Court, which is being heard. EARC acting in the matter as assignee of debt by certain
banks in case wherein the State of Punjab has held stamp duty to have been unpaid, had
Petitioned the Honble NCLT to initiate insolvency proceedings against the Company,
which was dismissed by the Honble NCLT vide its order dated 17th March 2020 as the
assignment deed was held as unenforceable. An appeal filed by EARC before the Honble
National Company Law Appellate Tribunal against the order of the Honble NCLT was
allowed and the petition was remanded back to NCLT, which is now reserved for Judgment.
The resolution of disputes was initiated by the Company without prejudice to its rights in
the matter,, and the Management does not considerthe Company to be liable to the
claimants, and the financial statements of the Company have been prepared on ‘Going
Concern basis.
Indian Overseas Bank has initiated insolvency proceedings against the
Company before NCLT which is being contested by the Company. As per information obtained
by the Company from CIBIL, (i) The Company was declared wilful defaulter more than 5 years
ago, and (ii) concurrently Mr. Manish Bagrodia, a Director of the Company, was declared
wilful defaulter. The Company has not raised any securities during the period of 5 years
from the last date of aforementioned declaration. However as per current CIBIL reports
only the Company appears as a wilful defaulter as per RBI guidelines. The promoters and
directors do not appear in the list of wilful defaulters. A vendor of the Company and a
related party has petitioned the Honble NCLT for initiation of insolvency
proceedings against the Company, which petitions are being heard and contested.
Further, the Companys net worth is eroded and will improve after debt
resolution discussions are concluded.
MSME REGISTRATION:
The Company is registered with Ministry of Micro, Small and Medium
Enterprises, Government of India as Medium Enterprise w.e.f. 18.07.2020 vide Udyam
Registration No. UDYAM-CH-01-0000261.
TRADING OF EQUITY SHARES OF THE COMPANY:
The NSE and BSE had suspended trading of the Equity shares of the
company due to delay in payment of certain amount to the BSE. The delay occurred due to a
technical glitch in the banking network where from the payment was initiated by the
Company. The Company have filed applications with BSE and NSE and submitted all required
documents for revocation of suspension of trading of equity shares of the company. The
process is under review of the both stock exchanges.
SUBSIDIARY COMPANIES:
According to the provisions of Section 129 of Companies Act, 2013, a
statement containing salient features of the financial statements of the Companys
subsidiaries in Form AOC-1 is attached to the financial statements of the Company.
As required by Indian Accounting Standard - 110 issued by the Ministry
of Corporate Affairs, the consolidated financial statements included in this Annual Report
incorporate the accounts of its subsidiary Companies, namely Winsome Yarns (Cyprus)
Limited (unaudited 31.03.2023, declared dissolved from 16.12.2022) and Winsome Yarns FZE
(unaudited 31.03.2023, ceased operations, declared defunct from 01.04.2014).
Pursuant to the provisions of Section 136 of the Companies Act, 2013,
the financial statements of the Company, consolidated financial statements along with
relevant documents and separate audited/ unaudited accounts in respect of subsidiaries are
available on web site of the Company.
The business recessionary conditions in Europe had negatively effected
the affairs of three step down subsidiaries of Winsome Yarns Cyprus Ltd., a wholly owned
subsidiary of the Company, namely, S.C. Winsome Romania, S.r.l., IMM Winsome Italia S.r.l.
and S.C. Textil, S.r.l., and these companies had been placed under liquidation. The
Balance Sheets and other financial statements of the 3 (three) companies are not
available, and accordingly, the instant consolidated financial statements of the Company
do not include the financials of the above named 3 (three) subsidiary Companies. The
Company has made necessary provisions in its books of account in respect of value of
investments of the Company in the subsidiaries. Further, Winsome Yarns FZE has been
defunct since 01.04.2014 and there are no operations. Also Winsome Yarns (Cyprus) Limited
has no operation during the year. The accounts of these companies have been prepared
accordingly.
The present status of these subsidiary companies is given as under:-
| Name of Subsidiary |
Start of liquidation process |
Present status |
| 1 IMM Winsome Italia S.r.l. |
30.09.2008 |
Under Liquidation. |
| 2 S.C. Winsome Romania S.r.l. |
26.11.2008 |
Under Liquidation. |
| 3 S.C. Textil S.r.l. |
09.02.2010 |
Under Liquidation. |
| 4 Winsome Yarns FZE |
|
Defunct since 01.04.2014 |
| 5 Winsome Yarns (Cyprus) Limited |
|
Dissolved since 16.12.2022 |
GDR ISSUE:
GDR issued earlier by the Company, listed on Luxemburg Stock Exchange,
were delisted. USD 48,19,980 (Rs. 2568.41 Lakhs without exchange adjustment) is invested
in money market instruments outside India for utilisation towards earmarked purposes
(setting up a Yarn Dying Plant). The Plant could not be implemented as requisite support
was then not extended by the lenders. SEBI vide its order dated 28 May 2021 imposed
penality of Rs.11 Crore and vide order dated 26 October 2021 restraining the commpany from
accessing the security market in any manner, whatsoever, for a period of three years from
the date of said order. Based on legal opinion that SEBI has erred in passing the orders
as it did not take into consideration full facts and circumstances of matters connected
with issue of GDR, the Company had filed Appeal against these orders before the Securities
Appellate Tribunal (SAT), Mumbai on 12.10.2021 and 24.05.2022 respectively. The Securities
Appellate Tribunal vide its order dated 19.07.2022 has reduced the penalty against the
Company to Rs.25 lakhs from Rs. 11.00 crores and vide its another order dated 19.07.2022
has reduced the debarment period of the Company from three years to one year. The company
has made the payment of Rs. 25.00 Lakhs to SEBI towards penalty. The debarment period now
stands over.
DIVIDEND:
Your Directors are unable to recommend any dividend on equity shares
for the year under review.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company is not required to undertake any activities under the CSR
as per section 135 of the Companies Act, 2013 as it does not meet applicable criteria as
defined in section 135(1) of the Act and hence there is no CSR Committee constituted.
SHARE CAPITAL:
During the financial year 2022-23, there was no change in the
securities of the Company.
DIRECTORS:
(a) Shri Manish Bagrodia, Chairman and Managing Director of your
Company, liable to retire by rotation and being eligible, offers himself for re-election.
(b) Mrs. Mridula Goyal is Non-Executive, Non-Independent Director and not liable to retire
by rotation. (c) Shri Rajiv Chadha and Shri Tilak Raj Dembla are Non-Executive,
Independent Director and not liable to retire by rotation.
(d) Mr. Pankaj Mahajan has been appointed as Additional Director in the
capacity of Independent Director of the Company w.e.f. 22.05.2023.
(e) Ms. Anupma Kashyap has been appointed as Additional Director in the
capacity of Independent Director of the Company w.e.f. 22.05.2023.
DECLARATION/ DISCLOSURES BY DIRECTORS:
The Directors have made the requisite declaration/ disclosures under
the provisions of Companies Act, 2013 and under the regulations of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015. None of the Directors are
disqualified under the provisions of Section 164(2) of the Companies Act, 2013.
BOARD EVALUATION:
Pursuant to the provisions of the Companies Act, 2013 and under the
regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, the Board has carried out an annual evaluation of its own performance, the directors
individually, as well as the evaluation of the working of its Committees. At the meeting
of the Board all the relevant factors that are material for evaluating the performance of
individual Directors, the Board and its various committees were discussed in detail. A
structured questionnaire each for evaluation of the Board, its various Committees and
individual Directors was prepared and recommended to the Board by Nomination &
Remuneration Committee for doing the required evaluation after taking into consideration
the input received from the Directors covering various aspects of the Boards functioning
and its Committees, execution and performance of specific duties, obligations and
governance etc.
A separate exercise was carried out to evaluate the performance of
individual Directors including the Chairman of the Board, who were evaluated on parameters
such as level of engagement and contribution, independence of judgement, 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. The performance evaluation
of the Chairman and Non- Independent Directors was also carried out by the Independent
Directors at their separate meeting. The Directors expressed their satisfaction with the
evaluation process.
NO. OF BOARD MEETINGS:
Four board meetings were convened and held during the financial year
2022-23. The details thereof are given in the Corporate Governance Report. The
intervening gap between the meetings was within the period prescribed under the Companies
Act, 2013/ Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
AUDITORS:
M/s. Dhana and Associates (Formerly known as M/s. Khandelia and
Sharma), Chartered Accountants (Firm Registration Number: 510525C), who are Statutory
Auditors of the Company hold office up to the forthcoming Annual General Meeting and are
recommended for re-appointment for a period of five years (second term) from conclusion of
33rd Annual General Meeting till conclusion 38th Annual General Meeting to audit the
accounts of the Company. As required under the provisions of Section 139 of the Companies
Act, 2013, the Company has obtained written confirmation from M/s. Dhana and Associates
that their re-appointment, if made, would be in conformity with the limits specified in
the said Section.
AUDITORS REPORT:
M/s. Dhana & Associates (Erstwhile- Khandelia and Sharma),
Statutory Auditors of the Company have submitted Auditors Report on the accounts of the
Company for the financial year ended March 31, 2023. The statement of Impact of Audit
Qualifications of Standalone and Consolidated Financials have been given after the
respective Auditors Reports.
THE EXPLANATION/ COMMENTS OF THE BOARD ON QUALIFICATION/ RESERVATION OR
ADVERSE REMARKS GIVEN BY AUDITORS IN ITS REPORT FOR THE FINANCIAL YEAR 2022-23:
Explanation of management on the audit qualifications contained in the Auditors Report
are given in the respective statements of impacts of audit qualifications of the
standalone and consolidated financials.
COST AUDITORS:
The Board recommended to ratify the appointment of M/s. Vijay Kumar
Mishra & Associates, Cost Accountants as Cost Auditors of the Company for the
financial year 2023-24 on a remuneration to be decided by the shareholders in their
forthcoming Annual General Meeting. The Company has received written confirmation(s) from
M/s. Vijay Kumar Mishra & Associates, Cost Accountants, to the effect that their
appointment, if made, would be in accordance with the provisions of section 148 of the
Companies Act, 2013 and that they are not disqualified for such appointment within the
meaning of section 141 of the Companies Act, 2013 read with The Companies (Audit &
Auditors) Rules, 2014.
COST AUDIT REPORT:
Pursuant to Section 148 of the Companies Act, 2013 read with The
Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records
maintained by the Company in respect of various activities are required to be audited. The
same had been audited by the Cost Auditor of the Company. The Board of Directors in their
meeting held on 14.11.2022 vide Resolution No. 186.16(1) has approved the Cost Audit
Report for the financial year 2021-22 and thereafter the cost audit report for the
financial year 2021-22 had been filed on 18.01.2023 vide SRN-F57402810.
PUBLIC DEPOSIT:
During the year, the Company has not accepted any deposits from the
public and as such. There are no outstanding deposits in terms of the Companies
(Acceptance of Deposits) Rules, 2014.
DIRECTORS RESPONSIBILITY STATEMENT:
The Board of Directors acknowledge the responsibility for ensuring
compliance with the provisions of Section 134
(3)
(c) read with Section 134
(5) of the Companies Act, 2013 in the preparation of annual accounts
for the year ended on 31st March, 2023 and state that: a) in the preparation of the annual
accounts, the applicable accounting standards had been followed along with proper
explanation relating to material departures; b) 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 at the end of the financial year and of the profit and loss of the company for
that period; c) the directors had 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 had 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; and f) 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.
KEY MANAGERIAL PERSONNEL:
Shri Manish Bagrodia, Chairman and Managing Director, Mr. Sanjay
Sharma, Chief Financial Officer and Ms. Neha Singhal, Company Secretary are the Key
Managerial Personnel of the Company.
CORPORATE GOVERNANCE:
A separate report on Corporate Governance is enclosed as a
part of this Annual Report. The certificates from the Secretarial Auditor of the Company
regarding compliance with Corporate Governance norms stipulated under the regulations of
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are annexed
to the Report on Corporate Governance.
AUDIT COMMITTEE :
The details pertaining to composition of Audit Committee and its
meetings are included in the Corporate Governance Report.
NOMINATION AND REMUNERATION COMMITTEE:
The details pertaining to composition of Nomination and Remuneration
Committee and its meetings are included in the Corporate Governance Report. The
Committee formulated Remuneration Policy which is attached as ANNEXURE ‘A
and forms a part of this Report of the Directors.
STAKEHOLDERS RELATIONSHIP COMMITTEE :
The details pertaining to composition of Stakeholders Relationship
Committee and its meetings are included in the Corporate Governance Report.
RISK MANAGEMENT COMMITTEE:
The Board of the Company has already formed a risk management committee
to implement and monitor the risk management plan for the Company. The committee is
responsible for receiving the risk management plan and ensuring its effectiveness. The
audit committee has additional oversight in the area of financial risks and controls.
Major risks identified by the businesses and functions are systematically addressed
through mitigating actions on a continuing basis. The details pertaining to composition of
Risk Management Committee and its meetings are included in the Corporate Governance
Report.
SEXUAL HARASSMENT COMMITTEE :
As required under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013, the Company has already constituted the
Internal Complaint Committees at all the work places of the Company. The composition of
which and the contact numbers of the persons to be approached have been uploaded on the
website of the company i.e. www.winsomeyarns.com and has been properly displaced on the
Notice Boards at all the premises of the company including works and head office. The
Committees have been regularly addressing the staff/ workers, particularly the female
staff/ workers to make them aware about their rights under the Act and as to how and to
whom the complaint, if any can be lodged.
WHISTLE BLOWER POLICY:
Pursuant to the provision of section 177(9) of the Companies Act, 2013
and as required under the provisions of regulations of the Listing Regulation, 2015, the
Company has adopted the ‘Whistle Blower Policy‘ and authorized to the Audit
Committee of the Board to look after all the matters relating to Whistle Blower Policy and
to submit its report to Board at regular intervals, on the receipt of any concerned
matter, for any appropriate action.
RELATED PARTY TRANSACTIONS:
All transactions entered into with related parties as defined under the
Companies Act, 2013 and under the regulations of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 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. There were no materially significant
transactions with the related parties during the financial year which were in conflict
with the interest of the Company and hence, enclosing of Form AOC-2 is not required.
Suitable disclosure as required by the Accounting Standard has been made in the notes to
the Financial Statements.
All Related Party Transactions are placed before the Audit Committee
and Board of the Company. Prior omnibus approval of the Audit Committee and Board 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 Board for their approval on a quarterly basis.
The policy on Related Party Transactions as approved by the Board is
uploaded on the Companys website (www.winsomeyarns.com). None of the Directors has
any pecuniary relationships or transactions vis-a-vis the Company.
SIGNIFICANT AND MATERIAL ORDER:
During the financial year, there was no significant and material order
passed by any Court or any Tribunal against the Company.
INTERNAL FINANCIAL CONTROLS:
The Company has in place internal financial control systems,
commensurate with the size and complexity of its operations to ensure proper recording of
financial and operational information and compliance of various internal controls and
other regulatory and statutory compliances. The internal auditor monitors and evaluates
the efficacy and adequacy of internal control systems in the Company. Based on the report
of the internal auditor, respective departments undertake corrective action in their
respective areas and thereby strengthen the controls. Significant audit observations and
corrective actions thereon are presented to the Audit Committee of the Board.
MINI HYDRO POWER PROJECTS:
There are five mini hydro power projects of the Company situated at
Sidhwan Canal, Distt. Ludhiana, Punjab. The details of the same are as under:
Site Name |
Date of Commissioning |
Installed Generated Capacity |
| Barewal |
Commissioned on 12th June, 2010 |
900 KW |
| Bharowal |
Commissioned on 12th January, 2013 |
750 KW |
| Isewal |
Commissioned on 15th July, 2011 |
900 KW |
| Mansian |
Commissioned on 22nd Sep., 2010 |
500 KW |
| Raowal |
Commissioned on 29th August, 2011 |
850 KW |
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(3) of The Companies (Accounts) Rules, 2014, is annexed herewith
as ANNEXURE ‘B.
ENERGY SAVING INITIATIVES :
The Company is continually making its best efforts to save the energy
consumption. ENVIRONMENT AND POLLUTION CONTROL:
Top priority continues to be given to preservation of the environment
by all the units of the Company. To combat pollution and strengthen the area ecology,
considerable emphasis is placed on plantation of fragrant and shady trees. We are cautious
of preserving water through recycling and rainwater harvesting to the extent possible. All
manufacturing facilities possess the required environmental clearance from the respective
Pollution Control Boards and do comply with the relevant legislation.
The Company is well aware of its responsibility towards a better and
clean environment. Our efforts in environment management go well beyond mere compliance
with statutory requirements. The Company has always maintained harmony with nature by
adopting eco-friendly technologies and upgrading the same from time to time incidental to
its growth programmes.
PARTICULARS OF EMPLOYEES:
The prescribed particulars of employees required under Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached
as ANNEXURE ‘C and forms a part of this Report of the Directors.
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return (Form
No. MGT-9) as provided under sub-section (3) of Section 92 of the Companies Act, 2013
is annexed herewith as ANNEXURE ‘D.
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
Company has appointed M/s Girish Madan & Associates, a firm of Company Secretaries in
practice (C.P. No. 3577) to undertake the Secretarial Audit of the Company for the
financial year 2023-24. The Secretarial Audit Report (MR-3) for the financial year ended
31st March, 2023 is annexed herewith as ANNEXURE E to this Report.
CASH FLOW ANALYSIS:
In conformity with the provisions of regulations of Listing
Regulations, the Cash Flow Statement for the financial year is annexed with financial
statements.
CONSOLIDATED ACCOUNTS:
In accordance with Accounting Standards AS-21 on Consolidated Financial
Statements, your Directors provide the Consolidated Financial Statement of Winsome Yarns
Limited, Winsome Yarns (Cyprus) Limited (unaudited 31.03.2023) and Winsome Yarns FZE
(unaudited 31.03.2023, ceased operations, declared defunct w.e.f. 01.04.2014) in the
Annual Report.
INSURANCE:
The properties of the Company have been adequately insured against
fire, flood, earthquake and explosive risks etc.
ACKNOWLEDGEMENTS:
Your Directors thank the various Central and State Government
Departments, Organizations and Agencies for the continued help and co-operation extended
by them. The Directors also gratefully acknowledge all stakeholders of the Company viz.
customers, members, dealers, vendors, banks and other business partners for the excellent
support received from them during the year. The Directors place on record their sincere
appreciation to all employees of the Company for their unstinted commitment and continued
contribution to the Company.
| Registered Office : |
On behalf of the Board |
| SCO 191-192, Sector 34-A |
|
| Chandigarh – 160022 |
|
|
Manish Bagrodia |
| Dated : 29.05.2023 |
|
|
Chairman & Managing Director |
+91-9892691696
