Your Directors are pleased to present the 43rd Annual Report on die business and operations of the Companv together with Audited Financial Statements for the financial year ended 31st March, 2024.
FINANCIAL SUMMERY
The summary of financial performance of the Company for the year ended 31 March, 2024 is furnished hereunder:
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(Rs. in Crores)
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Particulars
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Year ended 31/03/2024
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Year ended 31/03/2023
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Revenue from operations & other Income
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304.08
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305.31
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Profit before exceptional items & tax
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25.93
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25.37
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Exceptional items
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-
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188.75
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Profit before tax
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25.93
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214.12
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Less-Tax expenses
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0.50
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-
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Profit for the year
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25.43
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214.12
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Other Comprehensive Income
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0.35
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0.16
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Total Comprehensive Income
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25.78
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214.28
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STATE OF COMPANY’S AFFAIRS
The performance of the Woollen Division of the Company has been satisfactory over past few years During the year under review the turnover of the Woollen Division of the Company is Rs. 213.88 Crores as agamst Rs 202.92 Crores in the previous year. During the year under review the turnover of the Yam Division of the Company is Rs. 87.26 Crores as agamst Rs 99.04 Crores in the previous year. Your company has been able to generate the profit of Rs. 25.93 Crores during the year under review as against Rs. 25.37 Crores in previous year before exceptional items and tax. EXPORTS
In spite of the fact that the Geopolitical situation around the world lias been badly affected the export market, the performance of Woollen Division is satisfactory. Woollen division products are principally sold m export maikets but due to various wars around the world, cost of Energy, lower standard of livmg, increased inflation, elections m major maikets have impacted the demand of wool & blends severely. It was expected that the downtrend of Chinese economy would help India's textile growth but all textile Industries in India suffered.The effort of Indian Govt on Production linked Incentive scheme, FTA agreement yet show the fruits of its impact.
In this adverse market condition, Company changed strategy from export market orientation to Domestic high-end products & immediately adopted the product & market In export market, traceability & sustamability were given unpoitance to be present m the market with better value realization. FUTURE PROSPECTS
Situation in Europe & Asia is not promising due to complex & different political decisions & unfortunately these two area used to contribute major consumption of Woollen products. In coming year, Bulk qty business is going to be further tougli & competitive. Cost of production is expected to impact negatively. Domestic demand needs to be fulfilled with high efficiency & accuracy in order to fill the current gap of Export market till the major economies gets stable. Some infrastiuctural expansion might be needed to fulfil the customize demand.
DIVIDEND
The Company is continuously searching new or used machines to update the old machines for better quality of supplied yam and wool tops. In addition to replacement of old technology machines our aim is to increase the production through balancing of preparatory section and increase the profitability. Looking long term sustainability in market we conserve the resources of the company for expansion and modernization of old plant and machinery. Hie Board of Directors of your company have decided not to recommend any dividend on the Equity Shares of the company for the year under review.
FIXED DEPOSITS
Hie Company has neither accepted nor renewed any fixed deposits during the year under review within the meaning of Section 73 to 76 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules, 2014
FINANCE AND ACCOUNTS
As mandated by the Ministry of Corporate Affairs, the financial statements for die year ended on March 31, 2024 has been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 oftheCompanies Act, 2013 (hereinafter referred to as "The Act") readwith the Companies (Accounts) Rules, 2014 as amended from time to tune. The estmiates and judgments relating to die Financial Statements are made on a prudent basis, so as to reflect in a true and fail' manner, the fonn and substance of transactions and reasonably present the Company's state of affairs, profits and cash flows for tiie year aided March 31, 2024. The Notes to the Financial Statements form an integral part of this Report Accounting policies have been consistently apphed except where a newly issued accounting standard, if initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. Management evaluates all recently issued or revised accounting standards on an ongoing basis. Hie Company discloses financial results on a quarterly basis which are subjected to limited review.
SUBSIDLARIES, ASSOCIATES AND JOINT VENTURES COMPANIES
The Company does not have Subsidiary, Associate and Joint Venture . Company as on 31st March, 2024.
DIRECTORS AND KEY MANAGERIAL PERSONNEL The Board of Duectors consists of 6 (Six) members, of which 3 (Three) are Independent Directors and 1 (one) is Non-Executive Director. The Board also lias one woman Independent Director.
Director Retirement by rotation
Smt Yeena Jain (DIN: 07148606), Director of the Company, is liable to retire by rotation at the ensuing
AGM pursuant to the provisions of Section 152 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and, being eligible, offers himself for reappointment The Nomination and Remuneration Committee and the Board recommend her reappointment for hie consideration of the Members of the C ompany at Hie ensuing Annual General Meeting.
Key Managerial Personnel
Intenns of the provisions of section 2(51) and 203 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Slni Rajesh Ranka, Chairman & Managing Director,
Shn Ram Avvatar Kabra, Executive Director, Shn Prabodli Kumar Nahar, Chief Financial Officer and Shn Banwan Lai Sami. Company Secretary are the Key Managenal Personnel (KMP) of die Company Hie appomtment and remuneration of Directors and KMPs are as per policy of die Company. Declar ation of Independent Dir ectors
Alllndependent Directors have given declarations that diey meet the criteria of independence as laid down under Sectionl49(6) of the Companies Act, 2013 and Regulation 16 (l)(b)of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015 and confirmation tiiattheyhave complied
SHARE CAPITAL
The authorized Share Capital of the Company stood at Rs 185,00,00 000 Dinng the year under review, there was no change til paid up share capital of the Company. The paid-up Equity Share Capital as at March 31, 2024 stood at Rs. 34,77,51,600 (Rupees Thirty Four Crore Seventy Seven Lakh Fifty One Thousand Six Hundred) divided into 3,47,75,160 equity shares of Rs. 10 each.
TRANSFER TO RESERVE
The Company lias not transferred any amount to reserves during the year under review
with the Code of Independent Directors prescribed in the Schedule IV of the Companies Act, 2013. The terms and conditions for the appointment of the Independent Directors are disclosed on the website of the Company. The Board of Directors is of the opinion that all the Independent Directors of the Company hold highest standards of integrity and possess requisite expertise and experience required to fulfill their duties as Independent Directors and that all the Independent Directors fulfill the conditions specified in the SEBI Listing Regulations and are Independent of the management.
Nomination and Remuneration Policy
The Board has, on the recommendation of the Nomination and Remuneration Committee, framed the Nomination and Remuneration Policy for appointment of Directors, Key Managerial personnel & Senior Management Personnel and also their remuneration and performance evaluations. The Nomination and Remuneration Policy is available at website of the company at https://www.modemwoollens.com.
Annual Evaluation of the Performance of the Board, Its Committees and Individual Directors
Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, as amended, the Board has earned out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committee, Stakeholders' Relationship Committee and Corporate Social Responsibility Committee. Standard parameters were prepared after taking into consideration various aspects of the Board functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contnbution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contnbution and mputs in meetings, etc.
A separate exercise was carried out to evaluate the performance of individual Directors including the Chainnan of the Company, who were evaluated on parameters such as level of engagement and contribution, independence of Judgment, safeguarding the interest of the Company and its minority share holders etc. The performance evaluation of the Independent Directors was carried out by the entire Board and the performance evaluation of the Chairman and the Non-Independent Directors of the Company was earned out by the Independent Directors in a separate meeting who have expressed their satisfaction with the evaluation process.
NUMBER OF BOARD MEETINGS
The Board meets regular intervals to discuss and decide on business strategies and policies andreview the fmancialperfonnance of the Company. The notice and detailed agenda along with other material infonnation are sent in advance separately to each Directors.
Six meetings of the Board were held during the year. The detail of meetings of the Board held during the year foims part of the Corporate Governance Report.
AUDIT COMMITTEE
The Audit Committee was constituted by the Board in accordance with Section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 i_e. Listing Regulations. The composition, quorum, terms of reference, functions, powers, roles and scope are in accordance with Section 177 of the Companies Act, 2013 and the provisions of Regulations of the Listing Regulations, 2015.Allthemembersofthecommittee are financially literate and Smt. Ankita Jain, Chairman of die Committee is an Independent Director and possesses financial expertise.
The details regarding composition, terms of references, powers, functions, scope, meetings and attendance of members are mcluded in Corporate Governance Report which foims part of the Annual Report.
INFORMATION REQUIRED UNDER SEXUAL HARASSMENTOF WOMENAT WORK PLACE (PREVENT ION, PROHIBITIONAND REDRESSAL) ACT, 2013
Your Company lias complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and constituted Internal Complaints Committee as per the provisions of The Sexual Harassment of Women at Woikplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has also adopted a policy on Sexual Harassment of Women at Workplace and framewoik for employees to report sexual harassment cases at workplace and its process ensures complete anonymity and confidentiality of reformation.
Details of complaints received/disposed during the financial year 2023-24 is provided in Corporate Governance Report which forms part of the Annual Report.
DIRECTOR'S RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act, 2013, your directors would like to state and confinn that:
(a) hi the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures;
(b) They had selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a hue 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) They 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 iiregularities;
(d) They had prepared the annual accounts of the Company for the year ended on 31st March, 2024 on a going concern basis;
(e) They had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively,
(f) They had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.
AUDITORS AND AUDITORS' REPORT Statutory Auditors
S. S. Surana & Co. Chartered Accountants, Jaipur (Firm Registration No. 001079C) were appointed as Statutory Auditors of the Company in the 41st Annual General Meeting of the Company held on 30th September, 2022 for a penod of five years from the conclusion of 41st Annual General Meeting up to the conclusion of 46th Annual General Meeting of the Company.
The observations made in die Auditors' Report read together with relevant notes tiiereon are self- explanatory and hence, do not call for any fiirther comments under Section 134 of the Companies Act, 2013.
The Statutory Auditors of the Company have not reported any fraud as specified under section 143(12) of the Companies Act, 2013 in the year under review.
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Companies Act,2013 and the Companies (Appomtment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. RK. Jain & Associates, Company Secretaries, Bhilwara to undertake the Secretarial Audit of the Company for the financial year ended 31st March, 2024 The Secretarial Audit Report for the 2023-24 is attached as Annexure "A". The observations in the report are self-explanatory and therefore, do not call for any further comments.
Cost Auditors
Pursuant to the provisions of 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 every year. The Board after considering the recommendations of its Audit Committee has appointed M/s S Goyal & Company, Cost Accountants, Jaipur (Finn Registration No. 005883) as cost auditors for the financial year 2024-25, subject to the approval of the members at the ensuing Annual General Meeting.
Cost Records
The Cost accounts and records, as required to be maintained under Section 148 (1) of the Companies Act, 2013, are duly made and maintained by the Company.
Internal Auditor
Shri Nishant Surana was re-appointed as the Internal Auditor of the Company for the financial year 2024-25, on the recommendation of Audit Committee. Internal Audit Report, their significant findings and follow up actions taken by the management is renewed by the audit committee on a quarterly basis.
Tax Auditor
As per the requirement of Section 44AB of the Income Tax Act, 1961 M/S. S.S. Surana & Co., CharteredAccountants(FiimRegistrationNo. 001079C), Jaipur have been appointed as Tax Auditor for the financial year 2024-25. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED Particulars of loans given, investments made, guarantees given and securities covered under section 186 of the Companies Act, 2013 foim part of the notes to the Standalone Financial Statements of the Company. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY7
The Company has an effective internal control and risk-mitigation system, which are constantly assessed and strength with new/revised standard operating procedures. The Company's internal control system is commensurate with its size, scale and complexities of its operations. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same The Company is also initiating action for strengthening the systems and procedures to ensure effective Internal Financial Controls in accordance with Section 134(5) (e) of the Companies Act, 2013. An Internal Audit process is in place under the overall supervision of the Audit Committee of the Board, Qualified and experienced professionals are engaged to ensure effective and independent evaluation of the Internal Financial Controls. The Audit Committee of the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions are being taken.
CONSERVATION OF ENERGY7, TECHNOLOGY7 ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption, Foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules,2014 is annexed as Annexure-B to the Board's Report.
VIGIL MECHANISMAVHISTLE BLOWER POLICY7 Pursuant to the provision of Section 177(9) and (10) of the Companies Act,2013, read with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015 the Company has formulated and implemented the Whistle Blower PolicyATigil Mechanism. This has provided a mechanism for Directors and employees of the Company and other persons dealing with the Company to report genuine concerns about unethical behavior, actual or suspected fraud and violation of the Company's code of conduct and ethics. The Company has also provided adequate safeguards against victimization of employees and
Directors who express their concerns. This policy is available on the website of the company at https://www.modemwoollens.com.
CORPORATE SOCIAL RESPONSIBILITY7 (CSR)
Your Company is committed to make a positive contribution to communities where it operates. Pursuantto Section 135 of the Companies Act, 2013, the Company constituted CSR committee and formulated CSR Policy as guidmg principle for undertaking CSR activities. The Company's vision on C SR is that the Company being a responsible Corporate Citizen would continue to make a serious endeavor for improvement in quality of life and betterment of socrety through rts CSR related mrtratrves. The CSR polrcy of the Company is available on the website of the company at https:// wwwmodemwoollens.com.
During the current year, the Company has spent Rs. 43.00 Lakhs on CSR activities. The disclosures of CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of Companies (Corporate Social Responsibility) Rules, 2014 is annexed as Annexure-C hereto and form part of this report.
ANNUAL RETURN
Pursuant to the provisions of Section 92(3) of the Act, read with the Companies (Management & Administration) Rules,2014, the annual return in the prescribed fomr is available on the website of the Company at https:/ /www.modemwoollens.com.
CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
In line with the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has approved a policy on related party transactions. A policy on related party transactions has been placed on the Company's website https://www.modemwoollens.com
In accordance with the provisions of section 188 of the Companies Act, 2013 and rules made there under, aU related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. There were no materiality significant related party transactions which may have a potential conflict with the interests of the Company at large. All related party transactions are placed before the Audit Committee for approval. Omnibus approval was obtained on a yearly basis for transactions which are of repetitive nature.
The details of contracts and arrangement with related parties for the financial year ended 31st March, 2024, are given in Note No. 35 to the Financial Statements forming part of this Annual Report
Pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, infonnation in foim AOC-2 is provided as Annexure-D to the Board's Report.
CODE OF CONDUCT
A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the Board Members and Senior Management personnel, also foims part of the Annual Report.
FAYHLIARISATION PROGRAM FOR INDEPENDENT DIRECTORS
Your Company has fonnulated familiarization program for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model of the Company etc. The details of such familiarization program is available on the website of the Company at the website https://www.modemwooUens.com RISK MANAGEMENT POLICY7
The Risk Management policy is formulated and implemented by the Company in compliance with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The policy aimed at creating and protecting shareholders value by minimizing threats andlosses and identifying and maximizing opportunities. The risk management policy defines the risk management approach across the enterprise at various levels, including documentation and reporting.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with mle 5 of the Companies(Appomtment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is provided as Annexuie - E to the Boards Report.
SECRETARIAL STANDARDS
The Board of Directors has devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India (TCSI) and that such systems were adequate and operating effectively and the Company has complied with all applicable Secretarial Standards during the year under review.
CORPORATE GOVERNANCE REPORT
Your Company is committed to maintain the highest standards of Corporate Governance and adheres to the stipulations set out m the Listing Regulation and have implemented all the prescribed requirements. The Coiporate Governance Report and Certificate from practicnig company secretaries confirming compliance of conditions as required by Regulation 34(3) read with Part E of Schedule V of the Listing Regulations form paid of this Board's Report.
MANAGEMENT DISCUSSIOANND ANALYSIS REPORT
The Management Discussion and Analysis Report on the operations of die Company as requned under the SEBI (Listmg Obligations and Disclosure Requirements) Regulations, 2015, is set out asAnnexure-F to die Board's Report and forms an integral paid of the Report.
LISTING OF SFLARES
The shares of the Company are listed at BSE Limited and National Stock Exchange of India Limited (NSE) and tradmg of the shares are resumed on dated 23/01/2024.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THIS REPORT
There are no material changes or commitments affecting the financial position or business activities of the Company between the end of the Financial Year and the date of this Board's Report.
DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE
VALUATION DONE AT THE TIME OF ONETIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF
During the year under review, the Company has not entered into any onetime setdement
CHANGE IN NATURE OF BUSINESS
There is no change in the nature of business of the Company during the year under review.
INSURANCE
Your Company has taken appropriate insurance for all assets against foreseeable perils.
GENERAL DISCLOSURES
Your Directors state diat no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
a) No issue of equity shares with differential rights as to dividend, voting or otherwise;
b) No Significant and material orders were passed by the anv Regulators orCourts or Tribunals impacts the going concern status and Company's operations in future;
c) No fraud was reported by the Auditors to the Audit Committee or Board under section 143(12) of the Companies Act, 2013;
d) No application made or any proceeding pending under the Insolvency and Bankruptcy Code 2016 (31 of 2016) during the year.
ACKNOWLEDGEMENT
Your Duectors take this opportunity to thank the customers, share holders, suppliers, bankers, business pariners associates. financial institutions and Central and State Governments for their consistent Support and encouragement to the Company. Your Directors also wish to place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment.
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