The Directors have pleasure in presenting the Fortieth Annual Report,
together with the Audited Accounts of the Company for the year ended
31st March, 2013.
Profit before Tax, Depreciation and
Extra Ordinary Items (447.01) (706.22)
Less: Depreciation 458.11 526.98
Profit/(Loss) before Tax and extra
ordinary items (905.12) (1233.20)
Less: IT. for earlier year 2.90
Less: Prior Period Items 0.09 0.45
ProfitV(Loss) before extra ordinary items 905.21) (1236.55)
Extra Ordinary Items 275.48
Profit/(Loss) after Tax (905.21) (1512.03)
Add: Balance brought forward
from Previous year (1436.54) 75.49
Balance in Profit & Loss Account (2341.75) (1436.54)
BUSINESS AND PERFORMANCE
The sales revenue was down at Rs. 4541.36 lacs as compared to Rs.
6163.37 lacs in the previous year. The loss before Tax, Depreciation
and Extra Ordinary item was down at Rs. 447.01 lacs as compared to Rs.
706.22 lacs in the previous year. This was because of an income of Rs.
881.42 lacs on sale of idle fixed assets during the year. The
operations of the main unit of your Company, J. J. Spectrum Silk, at
Kolkata were under suspension for nearly two and a half months during
the year due to industrial relations problem. It had an impact on the
performance of your Company.
The global recession is still continuing and there are no signs of
improvement in the demand for your Company''s product. Your Company had
to close the operations at Bangalore as the units were incurring losses
for lack of capacity utilization.
CURRENT YEAR''S OUTLOOK
Although your Directors are making all round efforts to improve the
working of your Company, the actual performance would depend on many
external factors like movement of exchange rate for Indian Rupee
vis-a-vis various foreign currencies, the revival of global economy and
improvement in the demand for your Company''s product in the foreign
countries. Your Directors have initiated various measures viz. closure
of loss making units, debonding a part of the manufacturing facilities
at the Kolkata Unit in order to utilize the idle capacity for doing job
work, diversification into other fabrics viz. linen, polyester etc. and
cost reduction exercises on a continuous basis. The operations of loss
making units have already been closed. The debonding exercise is almost
complete. The Company is in the process of tying up the funds required
for financing capital expenditure for production of polyester fabric.
DISPOSAL OF UNDERTAKINGS
Since the operations at Bangalore have been closed, your Directors have
decided to sell the Land and Building and other fixed assets viz. Plant
and Machinery, fixtures etc. of the units at Bangalore. Your Company
has already approached the members for their approval and has mailed a
Notice together with Resolution, Postal Ballot Form etc. on 7th May,
2013. The sale proceeds of these assets shall be utilized for repayment
of term loan.
OVERSEAS SUBSIDIARIES AND JOINT VENTURE
The performance of Company''s foreign subsidiaries was satisfactory
during the year.
RESTRUCTURING OF TERM LOAN AND WORKING CAPITAL FACILITIES
Because of pressure on the cash flow, your Company has approached the
term lender for restructuring of the term loan by way of deferment of
repayment instalments and funding of interest. It has also approached
the working capital lenders for conversion of a part of the working
capital outstanding into working capital term loan and sanction of some
The performance of Company''s retail showroom ''ONSET'' at Kolkata was by
and large satisfactory during the year.
Owing to loss, your Directors do not recommend any dividend for the
Mr. Arvind Kr. Thakur resigned from the Board of the Company during the
year w.e.f. 01.06.2012. Mr. A. B. Chaturvedi was appointed as an
Additional Director during the year by the Board at its meeting held on
14.08.2012. Mr. Chaturvedi will hold office upto the date of the
forthcoming Annual General Meeting. Notice from a member of the Company
has been received proposing him as a regular Director of the Company.
Mr. Chaturvedi was also appointed as Whole Time Director during the
year. Mr. P. J. Sheth has resigned from the Directorship of the
Company w.e.f. 18.05.2013.
Mr. Pradeep Kumar Singhi, Director, retires by rotation and being
eligible has offered himself for re-appointment at the ensuing Annual
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956 your
Directors hereby confirm :
i) That in the preparation of the Annual Accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures, if any;
ii) That such accounting standards have been applied consistently to
make 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 as at 31st March, 2013 and of the loss for
the year ended on that date;
iii) That proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities, if any, has
iv) That the Annual Accounts have been prepared on a ''going concern''
Your Company has consistently been complying with the Corporate
Governance Code prescribed by SEBI and a detailed report on Corporate
Governance together with a Certificate of Compliance from the Statutory
Auditors, as required by Clause 49 of the Listing Agreement, forms a
part of this Annual Report.
M/s. Salarpuria Jajodia & Co., Chartered Accountants, Kolkata, bearing
Registration No.302111E, retire at the conclusion of the ensuing Annual
General Meeting and have expressed their willingness to be
re-appointed. They have confirmed that their re- appointment, if made,
would be covered within the ceiling specified under Section 224 (1B) of
the Companies Act, 1956.
Pursuant to the Directives of the Central Government under the
provisions of Section 233B of the Companies Act, 1956, qualified Cost
Auditors have been appointed to conduct cost audit relating to the
products of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
A) Conservation of energy and technology absorption :
The particulars in respect of conservation of energy and technology
absorption are given in Annexure ''A'' forming part of this report
pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988.
B) Foreign Exchange earnings and outgo :
The information is contained in Item No.14 of Note No.23'' in notes to
The details of investments are given in Note No. ''8'' annexed to the
annual accounts of the Company.
The particulars, as required under Section 212 of the Companies Act,
1956, in respect of Company''s subsidiaries viz. Spin International
INC., OOO JJ Home and J. J. Creations S.A. are annexed.
The Government of India vide Circular No.2/2011 dt.08.12.2011 has
granted general exemption to companies from annexing the accounts of
its subsidiary companies subject to fulfilment of certain conditions.
Necessary financial details in respect of each subsidiary as stipulated
in the said exemption letter are given in a separate statement attached
elsewhere in the report.
Your Directors undertake that annual accounts of the subsidiary
companies and the related detailed information will be made available
to the holding and subsidiary company investors seeking such
information at any point of time. The annual account of the subsidiary
companies will also be kept for inspection by any investor at its head
office and that of the subsidiary company concerned.
The Company has not accepted any Fixed Deposits during the year.
Your Directors place on record their deep appreciation for the
continued assistance and co-operation extended to the Company by its
customers, investors, bankers, government agencies and its dedicated
band of employees.
Registered Office : By order of the Board
23C, Ashutosh Chowdhury
Kolkata - 700 019 S. N. Jhunjhunwala
Dated: 18th May, 2013 Executive Chairman