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Eastern Silk Industries Ltd.

BSE: 590022 | NSE: EASTSILK |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE962C01027 | SECTOR: Textiles - Synthetic & Silk

BSE Live

Oct 18, 10:37
5.28 -0.27 (-4.86%)
Volume
AVERAGE VOLUME
5-Day
193,954
10-Day
132,660
30-Day
59,025
32,309
  • Prev. Close

    5.55

  • Open Price

    5.49

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    5.28 (2279)

NSE Live

Oct 18, 10:37
5.25 -0.25 (-4.55%)
Volume
AVERAGE VOLUME
5-Day
277,176
10-Day
188,551
30-Day
106,380
60,314
  • Prev. Close

    5.50

  • Open Price

    5.50

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    5.25 (14581)

Annual Report

For Year :
2015 2014 2013 2012 2011 2010 2009 2008 2007

Director’s Report

Dear members, The Directors have pleasure in presenting their sixty-ninth Annual Report together with the Audited Accounts of your Company for the year ended 31st March, 2015. FINANCIAL RESULTS (Rs. in Lacs) 2015 2014 Profit/(Loss) before depreciation / Exceptional items and taxation (3,411.77) (11,771.01) Less : Depreciation 2,023.08 1,567.52 Profit/(Loss) before taxation (5,434.85) (13,338.53) Add /(Less) : Exceptional Items 1,746.61 (306.21) (3.688.24) (13,644.74) Add/ (Less) : Provision for Earlier Year Taxation - - (3.688.24) (13,644.74) Add/ (Less) : Deferred Tax Liability - - Profit/(Loss) after tax (3,688.24) (13,644.74) Add: Balance brought forward from previous year (18,337.52) (4,692.78) Add: Transferred from Depreciation Adjustments 75.94 - (Less): Depreciation on Revalued Assets (817.64) - Which the Directors have decided to carry forward to the next year (22,767.46) (18,337.52) PERFORMANCE REVIEW Highlights of performance during the financial year 2014-15 are: * Total Revenue from Operation of the Company is Rs..6,101.77 lacs as against Rs..7,962.76 lacs in the previous year. * Operating Profit / ((Loss) is Rs..(3,411.77) lacs as against Rs..(11,771.01) lacs in the previous year. * Profit / (Loss) before taxation is Rs..(5,434.85) lacs as against Rs..(13,338.53) lacs in the previous year. * Profit / (Loss) after Tax is Rs..(3,688.24) lacs as against of Rs..(13,644.74) lacs in the previous year. The performance of the Company for the year has not been very encouraging as the markets did not support and the off-take of the company''s products also slowed down resulting in sluggish sales. The Company is a referred company under the Sick Industrial Companies (Special Provision) Act, 1985 (SICA) and the process of registering the same in the Board for Industrial and Financial Reconstruction (BIFR) is under way. The notices in respect of the same have already been issued to all the stakeholders. The company''s main stay i.e. Silk Textiles have undergone sea change in terms of tapering of demand on a year-to-year basis. As compared to the previous year the sale of silk products have come down by more than 15% - 18%. The resultant gap created is filled by low-end products fetching a very meager realization. Your company in spite of all the hardships and difficulties in the market has been diligently introducing new designs and new blends and also exploring new markets. FUTURE OUTLOOK To bring down the cost of production, your company will have to increase the scale of operation which requires infusion of machineries and technology. But unfortunately, considering financial condition of the company it may not be possible to undertake this exercise. However, the management is doing its best by ploughing back the small surplus created from weaving capacity and wherever re-engineering is required, the same is being done. Within the limited scope under restricted market condition, your management is very positively responding to matching situation in the global market. DIVIDEND In view of the accumulated losses the Board of Directors does not recommend any dividend on Equity Shares. The Board of Directors does not also declare dividend on Redeemable Cumulative Preference Shares. PUBLIC DEPOSIT SCHEME During the year, your Company has not accepted any deposits. There are no outstanding deposits as on date. DIRECTORS AND KEY MANAGERIAL PERSONNEL Sri G.D. Harnathka, Director of the Company retires from the office by rotation and is eligible for re-appointment in accordance with the provisions of the Act and Articles of Association of the Company. The members approved the re-appointment of Sri S.S. Shah, Managing Director for a period of 3 years effective from 1s September, 2014 to 31st August, 2017, during the year under review. Members also approved the re-appointment of Sri. H.S. Gopalka and Sri R.S. Rungta, Non-Executive Directors for a period of 3 years. Requisite declarations from all the Independent Directors of the Company confirming that they met the criteria of Independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the NSE, Mumbai has been received. Necessary policies and the criteria for the performance evaluation of Directors as Individual, Board and Committees are devised by the Company. Evaluation of Board and Committees are being done under best practices prevalent in the Industry. The Company ensures constitution of the Board of Directors with an appropriate composition, size, diversified expertise and experience and commitment to discharge their responsibilities and duties effectively. Nomination & Remuneration Committee formulated by the Company''s Board in accordance with the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement evaluates the each individual whether they met the specified criteria and provides valuable contribution to the Company. At the time of appointment/re-appointment of Independent Director, Nomination & Remuneration Committee assess the independence of the directors as referred in Section 149(6) of the Companies Act, 2013 and Clause 49(II)(B) of the Listing Agreement and re-assess the same when any new interest or relationships are disclosed by them. The Independent Directors shall abide by the Code of Independent Directors as specified in Schedule IV to the Companies Act, 2013. Nomination & Remuneration Committee ensures that all the requisite and applicable provisions of the Companies Act, 2013 rules and regulations made thereunder and Clause 49 of the Listing Agreement as amended from time to time are complied with. DIRECTORS'' RESPONSIBILITY STATEMENT Your Directors state that: i) in the preparation of the annual accounts for the year ended March 31,2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; ii) that the Directors have 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 loss of the Company for the year under review. iii) that the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv) that the Directors have prepared the accounts for the financial year ended 31st March, 2015 on a going concern basis. v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance. A separate section on Corporate Governance and Management Discussion and Analysis together with the Auditors'' Certificate confirming the compliance of conditions on Corporate Governance as per Clause 49 of the Listing Agreement with the Stock Exchange form part of the Annual Report as Annexure II. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Your Directors draw attention of the members to Note 41 to the financial statement which sets out related party disclosures. CORPORATE SOCIAL RESPONSIBILITY The Company has formulated the Corporate Social Responsibility Committee (CSRC) in consultation with the Board during the year pursuant to introduction of Section 135 under the Companies Act, 2013. Sri Sundeep Shah, Sri H. S. Gopalka and Sri G.D Harnathka are the members of the CSRC. Since the Company has been incurring cash losses in the last three preceding financial years, the Board does not recommend any amount to be spent on the CSR activities. However the Board ensures that once the Company will start earning profits, they shall after taking into account the recommendations of the CSRC, approve the Corporate Social Responsibility Policy of the Company and shall disclose contents of such policy in its report and will also place the same on the Company''s website. BANK LOANS The One Time Settlement proposal given by the management to the banks for the outstanding dues to them, have been in the process of negotiation bilaterally with the Company. Two banks namely ICICI Bank and State Bank of Hyderabad have settled on One Time Settlement basis. Your management has paid the entire amount of the money to them. Negotiation with the other banks on a bilateral basis is going on. RISK MANAGEMENT The Company has been addressing various risks impacting the Company and the policy of the Company. During the year, your Directors made sure that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. The Company manages, monitors and reports on the principal risks and uncertainties that can impact its strategic long term objectives. The risk management process is reviewed periodically in order to keep it aligned with the emerging risks across the globe. Various programmes involve risk identification, assessment and risk mitigation planning for strategic, operational, financial and compliance related risks across various levels of the organization. INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. DISCLOSURE OF PARTICULARS Particulars of Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo required under the Companies (Accounts) Rules, 2014 is annexed as Annexure I: AUDITORS Messrs B.K. Shroff & Company, Chartered Accountants, holds office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The remarks of the Auditors regarding losses of the company, interest on debt outstanding, reference to BIFR, provision for bad and doubtful debts, recognition of Net Deferred Assets have been duly explained in Note No. 33(b), 35, 36(a) and 37 to the accounts respectively. COST AUDITORS Pursuant to the Companies (Cost Records And Audit) Rules, 2014 notified w.e.f 30th June, 2014 Textile Industry has been exempt from maintaining the cost records and for conducting the audit of such records. However Your Company is continuing its association with M/s. N. Radhakrishnan & Co., a firm of Cost Auditors, for assisting and directing the Company with regard to allocation of direct and indirect costs to the various products and suggesting various measures lowering the cost without compromising with the quality. SECRETARIAL AUDITOR The Board has appointed Ms. Garima Gupta, Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure III to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. EXTRACT OF ANNUAL RETURN Extract of Annual Return of the Company is annexed herewith as Annexure IV to this Report. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES Your Directors appreciate the significant contribution made by the employees to the operations of your Company during the period. In terms of provisions of Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars and disclosures of the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. VIGIL MECHANISM/ WHISTLE BLOWER POLICY In pursuance to the provisions of section 177(9) & (10) of the Companies Act, 2013, the Company has formulated a vigil mechanism (whistle blower policy) for its directors and employees of the Company for reporting genuine concerns about unethical practices and suspected or actual fraud or violation of the code of conduct of the Company as prescribed under the Companies Act, 2013 and Clause 49 of the Listing Agreement. This vigil mechanism shall provide a channel to the employees and Directors to report to the management concerns about unethical behaviour, and also provide for adequate safeguards against victimization of persons who use the mechanism and also make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. The Policy is available on the website of the Company. GENERAL Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the period under review: 1. Details relating to deposits covered under Chapter V of the Act. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report. 4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries. 5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. ACKNOWLEDGEMENT Your Directors wish to convey their appreciation for the co-operation and assistance received from the government, financial institutions, bankers and stakeholders of your Company. The Board wishes to place on record its deep appreciation for the integrity and hard work of its employees at all levels to meet challenging markets. Registered Office: By Order of the Board 19 R. N. Mukherjee Road S. S. SHAH Kolkata 700 001 Chairman & Managing Director Dated: The 30th May, 2015.

Director’s Report