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BSE: 500223|NSE: JCT|ISIN: INE945A01026|SECTOR: Textiles - Composite Mills
Dec 16, 16:00
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VOLUME 68,185
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Directors Report Year End : Mar '18    Mar 16

Dear Members

The Directors present the 69thAnnual Report on the affairs of the Company together with Audited Financial Statements for the financial year ended 31st March 2018. The Management Discussion and Analysis is also included in this Report.

1. Financial Highlights

(Rs. in Lakhs)



Revenue from operations



Other Income



Profit before Finance Cost, Depreciation and Amortization Expense and Tax ,



Finance Cost



Depreciation and amortization Expense



(Loss) for the year before tax



(Loss) for the year after tax



2. Dividend

In view of the accumulated losses, the directors are unable to recommend any dividend.

3. Outlook of the Economy

The year 2017 was marked by a number of key structural initiatives to build strength across macroeconomic parameters for sustainable growth in the future. The growth in the first half of the year suffered despite global tailwinds. However, the weakness seen at the beginning of 2017 seems to have bottomed out as 2018 set in. Currently, the economy seems to be on the path to recovery, with indicators of industrial production, stock market index, auto sales and exports having shown some uptick.

Price of Crude Oil is once again making headlines and it has reached the level not seen since first quarter of 2015-16. Current increase in oil prices might have short term implications, but current macro-economic outlook of Indian Economy is very good and fundamentals are very strong to weather any storm. But any further increase in prices might destabilize not just the Indian economy but the global economy.

The International Monetary Fund (IMF) remains bullish on India’s growth potential and has retained its GDP forecast for the country at 6.7 per cent in 2017 and 7.4 per cent in 2018. In its World Economic Outlook Update, it also estimated that the Indian economy would grow by 7.8 per cent in 2019, which make the country the world’s fastest-growing economy in 2018 and 2019, the top ranking it briefly lost in 2017 to China.

Now with widening of current account deficit Indian Rupee depreciation in its value and that will have exert inflationary pressure. Indian policymakers would do well to keep a vigil on oil prices and have contingency plan proactively. We believe that India’s economic outlook remains promising for FY2017-18 and is expected to strengthen further in FY 2018-19.


Indian textiles industry is a well-established with showing strong features and a bright future. In fact, the country is the second biggest textiles manufacturer worldwide, right after China. Similar force is demonstrated in the cotton production and consumption trend where India ranks just after China and USA. The textiles manufacturing business is a pioneer activity in the Indian manufacturing sector and it has a primordial importance in the economic life of the country, which is still predominantly based on the agro-alimentary sector.

Textiles industry is not limited to manufacture and export of garments. The country is also significant textiles fiber and yarn manufacturer on the world scene, taking on its own a 12% share of the world’s production volume. India ranks on the second place as regards in production of silk and cellulose fibre and yarn whilst standing on the fifth position when it comes to synthetic fibre and yarn.

The industry is now preparing itself to take share of opportunities expected to arise out of the market freed from quota restrictions and other trade barriers. Industry operators are increasingly moving towards modernization and expansion as encouraged by the so-designated Textile Upgradation Fund Scheme implemented by Government.

The local textile sector is now at a critical stage where it should prepare itself to rise and grab the opportunities that are available through liberalization of the international market. Manufacturers however, were caught in inadvertence as new players started to creep on the market at a time when most operators had attention on imminent opportunities coming from a quota-free market. With traders realizing the threat of relying on a single manufacturing source such as China, India could do well in proposing a valuable alternative to buyers on the international scene, but this is only possible through an adequate and appropriate development strategy and macro-economic policy. In that view, many manufacturing companies in India are rushing towards expansion and modernization options. Manufacturers are having recourse to fund raising programmes pushing EPS to higher growth, dissolving equity on its way. Business collaborations with foreign players, creation of buying offices and Government’s effort to enhance quality production and export are many visible signs of Indians coming into force on the global market.

The future of the textiles industry seems to be bright in all aspects. As such Government places all its trust and relies sector for its strong ‘employment creation’ capability, more precisely in the garments manufacturing side. Lowering tax burdens on companies will play an important part in cutting down production costs and boosting competitiveness, increasing ability to tap high-volume orders from the global market. Modernization would enable companies provide quality and volume solutions which is in constant demand by international buyers.

The home textile sector is in a good position to activate and encourage developments in the overall domestic textile industry. With more emphasis on product having longer cycles than those average apparels, the home textiles manufacturing is more protected than its apparel counterparts. Those wishing to reap the benefits of opportunities have to show good preparatory dispositions as well as willingness to stay on the forefront of the global competition game without these, we could see regional competition grabbing most of the market share.

5. Business Strategy

Textile Unit:

This year again has been a challenging year and most of the companies considering GST / eWay Bill implementation which has by and large slowed down the entire business cycle. The end consumer is not sure about his own end customer buying pattern hence the Mills tend to lose in terms of continuity from there bigger domestic giants . Cash transactions could not be justified and end consumer was not sure whether or not to register and how to tackle paper work and returns. We anticipated this mind set and hence have focused on direct and deemed exports.

Company has plans to shift our base from domestic players to garment exporters and direct fabric exports so that there is enough rotation of funds which is need of the hour and in order to counter this shift and manage our cash flows keeping the capacity occupied we have also taken a conscious move and shift focus to deemed and direct exports. Although this segment is also facing challenge as duty drawbacks have been slashed to 1.3% -1.6 % but there is continuity of business and commitments are honored. Our draw back benefits have also reduced on direct fabric exports but there is immense opportunity since we are competitive against other countries on 100 % cotton and blended fabrics.

Company is now more focusing on technical Fibre fabrics, high value nylon fabrics for Defence and Export needs for parachute products, FR fabric for back packs, coated fabric and work wear segments. There is a huge potential in synthetic segment and with the strong and long term relationship one of our key customers Decathlon we intend to grow further with them. On Cotton segment, we have developed strong relationship with Shahi Exports (Fashion), Gokaldas Exports, Malcolm (Work wear) and Siggi (Garment) who are seeking more capacities and we are all set to step in. We are exploring direct fabric export business with old and new customers in US, Europe, Middle East, Turkey.

Filament Unit

Company continues to enjoy its leadership in Nylon Filament Yarn in terms of product range, quality parameters as well as in volumes. In order to further consolidate its position into value added segments, the Company proposes to install additional Air Texturising capacity. Besides, it will also undertake conversion of additional polyester spinning machines into nylon spinning machines to enhance its production capacity. As reported last year, your Company continuous to pursue diversifying its product range by offering dipped Polyester Tyre Cord Fabric. It is also exploring possibilities of offering dipping services for Rayon Tyre Cord Fabric. Your Company is also pursuing to fully integrate its NTCF capacity and shall approach the Government authorities for requisite permissions to implement these facilities. Your Company is constantly endeavoring to become energy efficient and has initiated steps to replace some of the old equipment to reduce the energy cost.



The textile unit at Phagwara, despite challenging business environment, the unit produced and sold 328.23 lakhs and 369.98 lakhs meters of fabrics respectively. The technical textiles have been well accepted by the market.

Nylon Filament Yarn:

Nylon Filament Unit has been one of the top Textile Grade Nylon Yarn manufacturers in India with installed capacity of 16000 TPA and 1000 TPA for Nylon Chips. The unit has produced and sold 11543 MT of Filament Yarn and 403 MT of Nylon Chips and sold 12657 MT and 403 MT respectively. Capacity utilization is lower on account of stiff competition and cheap imports in India through ASEAN countries.


The Company has been meeting its repayment obligation as per the terms of restructuring under CDR mechanism.

As mandated by the Ministry of Corporate Affairs, the financial statements for the year ended 31st March 2018 has been prepared in accordance with the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014. The estimates and judgments 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 reasonable present the Company’s state of affairs, profit/loss and cash flows for the year ended 31st March 2018.


Extract of Annual Return of the Company is annexed herewith in compliance with the Section 92(3) of Companies Act, 2013 and forms integral part of this Report.


To the best of knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section134 (3)(c) of the Companies Act, 2013 that;

i). in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii). 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 profit and loss of the company for that period;

iii). 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;

iv). the directors have prepared the annual accounts on a going concern basis;

v). the directors, have laid down internal financial controls which were followed by the company, such internal financial controls are adequate and operating effectively; and

vi). the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

10. Declaration by Independent Directors and reappointment, if any 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 25 of SEBI (LODR) Regulations, 2015.

11. Remuneration Policy

The Board of Directors has framed a policy, which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The details of this policy have been posted on the website of the Company viz.


Statutory Auditors

M/s Navdeep Singh & Company, Chartered Accountants (Firm Registration No.008400N) 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.

The Report given by the Auditors on the financial statements of the company is self explanatory and is a part of Annual Report. Their qualified opinion given in the Report has been fully explained in Note No. 21.2.

Cost Auditors

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to Textile & Filament Units every year. The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s Goyal, Goyal& Associates, Cost Accountants, (Firm Registration No. FRN-000100) as Cost Auditor to audit the cost records of the Company for the Financial Year 2018-19. As required under the Companies Act, 2013, a resolution seeking members’ approval for their remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting.

The Cost Audit Report for the financial year 201718 is under finalization and would be filed within the stipulated time with the Ministry of Corporate Affairs.

Secretarial Audit

In compliance with the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Board has appointed Ms. Seema Sharma, Whole Time Company Secretary in Practice (C.P No.4397) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed and forms an integral part of this Report. There is no secretarial audit qualification for the year under review.


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


All transactions entered with Related Parties were on arm’s length basis and in the ordinary course of business. There were no materially significant transactions with the related parties during the financial year, which were in conflict with the interest of the Company. Thus a disclosure in Form AOC-2 in terms of Section 134 of the Companies Act, 2013 is not required.All Related Party Transactions are placed before the Audit Committee and also before the Board for approval. The policy on related party transactions as approved by the Board has been uploaded on the website of the Company.

None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company except remuneration and sitting fees.


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.


The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies (Accounts) Rules, 2014 is annexed and forms integral part of this Report.

A statement showing the names and other particulars of the employees drawing remuneration in terms of Rule 5(2) & (3) of the of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed and forms integral part of this Report. The said statement is not being sent along with this annual report to the members of the company in line with the provision of Section 136 (1) of the Companies Act, 2013. Further, Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company. The aforesaid statement is also available for inspection by Members at the Registered Office of the Company, 21 days before and up to the date of the ensuing Annual General Meeting during the business hours on working days.

None of the employees mentioned in the said statement is a relative of any Director of the Company and none of the employees hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company.


Changes in Directors and Key Managerial Personnel

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Ms. Priya Thapar retires by rotation at the forthcoming Annual General Meeting and being eligible, offers herself for the re-appointment. The Board recommends her re-appointment. Brief profile of Ms Priya Thapar has been given in the Notice convening the Annual General Meeting.

The Board of Directors on recommendation of the Nomination and Remuneration Committee has appointed Mr. Ramswaroop Samria (DIN 00375315) as an Additional Director (Independent) with effect from 30th May 2018. In terms of Section 161 of the Companies Act, 2013, Mr. Ramswaroop Samria holds office up to the date of ensuing Annual General Meeting. Accordingly, the Board recommends the resolution in relation to appointment of Mr. Ramswaroop Samria as an Independent Director, for the approval by the shareholders of the Company for a term of five years.

Mr. Gordhan Bhojraj Kathuria (DIN No.00062088), Director (Independent) of the company, expired on 25th January 2018 and ceased to be the Director of the Company. Directors have placed their condolence on his sad demise and appreciated for his contribution, assistance and guidance during his tenure served with the company for last 19 years. Members acknowledged the contribution he made in the growth and progress of the company.

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, Regulation16(b) and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board of Directors on recommendation of the Nomination and Remuneration Committee has reappointed Mr Samir Thapar as Chairman & Managing Director and Ms Priya Thapar, -Director (Strategic Business Development) of the Company for a period of 3 (three) years with effect from 1.10.2018 and 1.12.2018, respectively subject to approval of shareholders, as their current term of office is upto 30th September, 2018 and 30th November, 2018 respectively.

Formal Annual Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 25 of SEBI (LODR) Regulations, 2015, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its constituted Committees from time to time.

Number of Meetings of Board and its Committees

The details of the number of meetings of the Board held during the financial year 2017-18 forms part of the Corporate Governance Report.


The Company has not been accepting fresh/renewals of deposits and is regular in repayment and servicing of interest on fixed deposits. Unclaimed Deposits remained on 31.03.2018 were of Rs.107.83 lacs and deposits amounting to 92.05 lakhs paid subsequently.


The Company has a well established framework of internal controls in all areas of its operations, including suitable monitoring procedures and competent personnel. In addition to statutory audit, the financial controls of the Company at various locations are reviewed by the Internal Auditors, who report their findings to the Audit Committee of the Board. The Audit Committee is headed by an Independent Director and it ensures independence of functions and transparency of the process of supervision. The Committee meets on a regular basis to review the progress of the internal audit initiatives, significant audit observations and planning and implementation of follow-up action required. The Company conducts its business with integrity and high standards of ethical behavior and in compliance with the laws and regulations that govern its business.

The Company has in place adequate internal financial control systems, commensurate with the size, scale and complexity of its operations. The Company has appropriate policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence of the Company’s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. 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.


The paid up Equity Share Capital as at March 31, 2018 stood at Rs.149.53 Crores and during the year under review, the Company has not issued shares with differential voting rights.


The outstanding amount of FCCBs of Rs. 11,022.28 lakhs (including interest of Rs.3848.28 lakhs) having fallen due on 5.12.2017 to the FCCB holders could not be paid due to cash crunch. A mutual understanding between the FCCB holders and the Company was arrived at to settle the dues by way of upfront payment of certain dues and issue of fresh equity in the Company after receipt of approval from regulatory authorities. The Company intends to pay upfront by availing fresh funds from a financial organization from whom a sanction has been received subject to approvals from the Banks of the Company. The accounting impact will be taken after execution of settlement in all respect.


In compliance with the Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015, a separate report on Corporate Governance practices followed by the Company, together with a certificate from the Company’s Auditors confirming compliance forms an integral part of this Report.


The Company has a Whistle Blower Policy to report genuine concerns or grievances for redressal. The Whistle Blower Policy has been posted on the website of the Company During the year under review no complaint was received by your company.


The Company has a Risk Management Policy for identifying, prioritizing and mitigating risks, which may impact attainment of short and long term business goals of the Company. The risk management framework is reviewed periodically by the risk management teams at all the units of the Company constituted by the Board which monitors and evaluates the effectiveness of risk management framework of the Company and strengthens it.


The Company has drafted the Corporate Social Responsibility Policy which may be accessed on the website of the Company As there is net average loss incurred by the Company during the three preceding financial years, the company need not to spent any amount towards Corporate Social Responsibility activities during the year ended 31.03.2018. The CSR Committee comprises of three members. One member of the Committee is Independent Director.


The Company firmly believes that without safe, clean environment and healthy working conditions, the overall economic growth cannot be achieved and maintained. The company also takes all possible measures to prevent accidents and occupational hazards. The manufacturing operations are conducted to ensure sensitivity towards the environment and minimize waste by encouraging “Green Initiative” practices. Efficient management and use of renewable resources are encouraged. All employees are obliged to ensure that they fully understand all policies and they fully comply with the requirements.


During the year under review, the Company has not received any complaint under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has also formed an Internal Committee for addressing the complaints received under the said Act


Statements in this Directors’ Report and Management Discussion and Analysis describing the Company’s 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. Important factors that could make difference to the Company’s operations include raw material availability and its prices, cyclical demand and pricing in the Company’s principal markets, changes in Government regulations, Tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.


The Board of Directors would like to express their sincere appreciation for the assistance and cooperation received from the, banks, Government authorities, customers, vendors and members during the year under review. The Board of Directors also wish to place on record its deep sense of appreciation for the committed services by the Company’s executives, staff and workers.

For & on behalf of the Board


Chairman and Managing Director

DIN: 00062287

Place : New Delhi

Date : 14.08.2018

Source : Dion Global Solutions Limited
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