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Hanung Toys & Textiles Ltd.

58888:hanun  |  IND:Others - Not Mentioned  |  ISIN code:INE648H01013  |  SECT:General

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You can view full text of the Director's Report for Hanung Toys & Textiles Ltd.
Director Report
Mar2014   Mar 2015
Dear Members,



The Directors present the 25th Annual Report of the Company together

with the standalone and consolidated audited statements of Financial

Accounts of the year ended March 31, 2015.



FINANCIAL HIGHLIGHTS:



The following table gives the financial highlights of your company on a

standalone basis according to the Indian Generally Accepted accounting

Principles (GAAP)



FINANCIAL RESULT (STANDALONE) (in Lacs)



Particulars 2014-15 2013-14



Net Sale & other Income 13642 50054



Profit / (Loss) Before Interest,

Depreciation & Tax (93314) (36237)



Financial Overheads 27173 23062



Depreciation 6236 4480



Net Profit/(Loss) Before Tax (126723) (63779)



Provision for Tax -- --



- Current -- --



- Deferred -- (11963)



- Tax for earlier years -- (2237)



Net Profit/(Loss) after Tax (126723) (49578)



Appropriations



Proposed Dividends Nil Nil



Provision for Tax for Dividends Nil Nil



Surplus carried forwards to Balance Sheet (126723) (49578)



Transfer to General Reserve --



Net Surplus carried forwards to Balance Sheet --



FINANCIAL RESULTS (Consolidated)



The following table gives the financial highlights of your company on a

consolidated basis according to the Indian Generally Accepted

Accounting Principles (GAAP).



(in Lacs)

Particulars 2014-15 2013-14



Net Sale & other Income 13642 50080



Profit / (Loss) Before Interest,

Depreciation & Tax (91363) (35326)



Financial Overheads 27174 23063



Depreciation 6237 4482



Net Profit/(Loss) Before Tax (124774) (62871)



Provision for Tax -- --



- Current -- --



- Deferred -- (11963)



- Tax for earlier years -- (2237)



Net Profit/(Loss) after tax before

Minority interest (124774) (48670)



Minority interest in income/(loss) -- 4



Net Profit /(Loss) after Tax &

Minority Interest (124774) (48666)



Appropriations



Proposed Dividends -



Provision for Tax for dividends -



Surplus carried forwards to Balance Sheet (124774) (48666)



Transfer to General Reserve -



Net Surplus carried forwards to Balance Sheet -



Erosion of Net Worth and reference to the Board for Industrial and

Financial Reconstruction (BIFR)



The operating results have been adversely affected due to adverse

market conditions, non receipt of Tuff''s subsidy and blockage of

substantial funds in slow/ non moving stocks and debtors. The Company

faced severe liquidity crunch and huge scarcity in the working capital

funds. In order to partially mitigate the working capital fund scarcity

and arrest the further deterioration in the quality of stocks, the

Company affected disposal of stocks of slow moving / non moving fabrics

and finished goods at market prices, which in most of the cases was

well below the cost, resulting in losses. The Company settled its old

debtors by allowing their pending debit notes, quality discount and /or

taking the material back, which further contributed losses to the

Company.



On accumulated losses of the Company exceeding the entire net worth,

the Company made a reference with the Board for Industrial and

Financial Reconstruction in terms of the provisions of section 15(1) of

Sick Industrial Companies (Special Provision) Act 1985, which has since

been registered by the Hon''ble BIFR as case No. 54/2015.



OVERVIEW AND REVIEW OF OPERATIONS



The Indian Toys and Textiles Industry witnessed challenging times as a

results of low growth led by issues such as high fiscal deficit, high

inflation and worsening current account balance. The slowdown in the

global growth aggravated the sluggishness in the economy. Apart from

the un-favorable demand supply scenario the industry has been also

reeling under the pressure of rising manufacturing cost.



The gross sales and other income for the financial year under review

were Rs. 13642 lacs as against Rs. 50054 lacs for the previous

financial year. During the Year under review the Company has incurred

Losses after Tax of Rs 126723 lacs as against the Losses of Rs. 49578

lacs for the previous year.



The Loss of the company has increased due to increase in finance cost

and increase in depreciation due to change in method as prescribed by

the Companies Act 2013 during the year. The Company expects to improve

its working in the next financial year.



DIVIDEND



The Board of Directors has decided not to recommend any dividend due to

non availability of profit during the year.



CORPORATE DEBT RESTRUCTURING



The Company had approached it''s lead banker and lender, i.e., Punjab

National Bank for restructuring of its debt under CDR mechanism, and

accordingly, the lead banker referred the matter to CDR Empowered Group

on 31st July, 2013. The case of the Company was admitted under CDR on

26th September, 2013, and the CDR scheme was discussed in CDR EG

meeting held on 21.04.2014, and was approved in the meeting held on

23rd May, 2014 and the same was informed to the Company on 16th June,

2014.



The main features of CDR scheme are as below:



1. Cutoff date is 1st April 2013.



2. Moratorium period will be 2 years and repayment in 8 years.



3. Rate of interest on term loan is reduced to 11% p.a.



4. Rate of interest on working capital and FITL (Funded interest Term

Loan) is reduced to 10.50%p.a.



5. Waiver of all liquidity damages and penal interest and penal

charges etc.



6. Promoter''s contribution Rs.83.68 crores to be brought in within one

year.



7. Conversion of interest for initial 24 month into FITL (Funded

interest Term Loan) with repayment period of 6 years.



BUSINESS



The Company''s main operations consist of Manufacturing of Soft Toys and

Home Furnishings.



EMPLOYEE STRENGTH



The total numbers of permanents employees on the rolls of the company

was 448 as on March 31, 2015,



PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES



In terms of the provisions of Section 197(12) of the Companies Act,

2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014, a statement showing

the names and other particulars of the employees drawing remuneration

in excess of the limits set out in the said Rules are provided in the

Annexure-B forming part of the Annual Report.



Disclosures pertaining to remuneration and other details as required

under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of

the Companies (Appointment and Remuneration of Managerial Personnel)

Rules, 2014 are provided in the Annexure-A forming part of the Annual

Report.



Having regard to the provisions of Section 136(1) read with its

relevant provisions of the Companies Act, 2013, 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 without any fee and free of

cost.



CORPORATE GOVERNANCE



Your Company is fully compliant with the Corporate Governance

guidelines, as laid out in Clause-49 of the Listing Agreement with the

Stock Exchanges. The report on Corporate Governance forms part of the

Annual Report.



The statutory auditors of the Company have examined the requirements of

Corporate Governance with reference to Clause 49 of the Listing

Agreement and have certified the compliance, as required under clause

49 of the Listing Agreement. The certificate in this regard forms part

to the Annual Report.



CONSOLIDATED FINANCIAL STATEMENTS



In accordance with Accounting Standard (AS) 21 on Consolidated

Financial Statements, the audited consolidated financial statement is

provided in the Annual Report.



SUBSIDIARIES



Pursuant to section 129(3) of the Companies Act, 2013 read with Rule 5

of the Companies (Accounts) Rules, 2014, the statement containing

salient features of the financial statements of the Company''s

subsidiaries (in Form AOC-1) is attached to the financial statement.



The Annual Accounts of the subsidiary companies and the related

detailed information are available at any time to shareholder of the

parent company and subsidiary companies and to statutory authorities.

On request, these documents will be made available for inspection at

the Company''s Corporate office.



DIRECTORS



Mr. Abhishek Monu Kaushik was appointed as an additional director

(Independent) on 9th April 2015 and Mrs. Deepika Gera appointed as an

Additional Director (Independent) on 30th June 2015. These Directors

will hold the office till the date of forthcoming Annual General

Meeting. A Notice in writing has been received from Members signifying

their intention to propose the appointment of Mr. Abhishek Monu Kaushik

and Mrs. Deepika Gera as a Director under independent Director category

at the Annual General Meeting to hold office for 5 consecutive years

with effect from their appointment without being subject to retirement

by rotation.



During the Year Mr. C.S. Batra ceased to be Director with effect from

25th Nov. 2014 and Mr. R.K. Pandey, ceased to be Director with effect

from 22nd June 2015, The Directors wish to place on record the valuable

guidance and services rendered by the independent Directors during

their tenure as Independent director of the Company.



Mr. Umesh Dhal ceased to be C.F.O with effect from 21st May 2015

Pursuant to Rule 895 (iii) of the Companies (Accounts) Rules 2014 It is

reported that other than the above there have been no changes in the

Directors or Key Managerial Personnel during the Year.



STATUTORY AUDITOR



M/s Ravindra Sharma & Associates, New Delhi has been appointed as

Statutory Auditor in place of M/s AMRG & Associates New Delhi under

section 139 (8) of the Companies Act 2013. M/s AMRG & Associates has

resigned during the year and M/s Ravindra Sharma & Associates, New

Delhi appointed to fill the casual vacancy caused by M/s AMRG &

Associates New Delhi.



M/s Ravindra Sharma & Associates, New Delhi, the Statutory Auditor have

confirmed their eligibility to the effect that their reappointment

would be within the prescribed limits under the Companies Act 2013 and

that they are not disqualified for reappointment.



The Report of the Statutory Auditors for the year ended 31st March 2015

does not contain any qualification, reservation or adverse remark.



AUDITORS QUALIFICATION SYSTEM ON ACCOUNTS



Notice to the accounts, as referred in the auditor''s report, are self-

explanatory and consistently followed and therefore do not call to any

further comments and explanations.



COST AUDITOR



In terms of the provisions of The Companies Act, The Board of Directors

of your company have on the recommendation of the Audit Committee,

Appointed M/s Chandra Sharma & Co. Vaishali, Ghaziabad as Cost Auditor

to conduct the cost audit of your company for the financial year ending

31st March 2016 subject to the approval of the Central Government.



The Audit Committee has received a certificate from the Cost Auditor

certifying their independence and arm''s length relationship with the

company.



COMPLIANCE UNDER COMPANIES ACT, 2013



Pursuant to Section 134 of the Companies Act, 2013 read with the

Companies (Accounts) Rules, 2014, your Company complied with the

compliance requirements and the detail of compliances under Companies

Act, 2013 are enumerated below:



EXTRACT OF ANNUAL RETURN



In Accordance with Section 92(3) of the Companies Act 2013 read with

Rules 12(1) of Companies (Management and Administration) Rules 2014 an

extract of the Annual Return in Form MGT-9 is attached herewith as

Annexure-E.



BOARD MEETING HELD DURING THE YEAR



During the year, 17 meetings of the Board of Directors were held. The

details of the meetings are furnished in the Corporate Governance

Report which is attached as Annexure-C to this Report.



DIRECTORS'' RESPONSIBILTY STATEMENT



To The best of our knowledge and belief and according to the

information and explanation obtained by us, your Directors make the

following statements in the terms of section 134(3)(c) of the Companies

Act, 2013:



1. in the preparation of the annual financial statements for the year

ended March 31, 2015, the applicable Accounting Standards had been

followed along with proper explanation relating to material departures.



2. for the financial year ended March 31, 2015, such accounting

policies as mentioned in the Notes to the financial statements have

been applied consistently and judgments and estimates that are

reasonable and prudent have been made so as to give a true and fair

view of the state of affairs of the Company and of the Profit and Loss

of the Company for the year ended March 31, 2015.



3. that proper and sufficient care has been taken for the maintenance

of adequate accounting records in accordance with the provisions of the

Companies Act, 2013 for safeguarding the assets of the Company and for

preventing and detecting fraud and other irregularities.



4. the annual financial statements have been prepared on a going

concern basis.



5. that proper internal financial controls were followed by the

Company and that such internal financial controls are adequate and were

operating effectively.



6. that proper systems to ensure compliance with the provisions of all

applicable laws were in place and that such systems were adequate and

operating effectively.



SECRETARIAL AUDIT



Pursuant to provisions of Section 204 of the Companies Act, 2013 read

with Rule 9 of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules 2014, your Company engaged the services of

M/s NG & Associates, New Delhi Company Secretary in practice to conduct

the Secretarial Audit of the Company for the financial year ended on

31st March 2015. The Secretarial Audit Report (in Form MR-3) is

attached as Annexure-D to this Report.



MANAGEMENT DISCUSSION AND ANALYSIS



A Management Discussion and Analysis Report, highlighting the

Performance and Prospects of the Company''s energy and environment

segments including details if subsidiaries catering to the respective

business, is attached.



LISTING OF STOCK EXCHANGES



The company''s equity shares are listed on two stock exchanges- National

Stock Exchange of India Ltd (NSE), and Bombay Stock Exchange Ltd (BSE).



PUBLIC DEPOSITS



The Company had no unpaid / unclaimed deposit(s) as on March 31, 2015.

During the year under review, your Company did not accept any deposits

within the meaning of provisions of Chapter V – Acceptance of Deposits

by Companies of the Companies Act, 2013 read with the Companies

(Acceptance of Deposits) Rules, 2014.It has not accepted any fixed

deposits during the year.



CODE OF CONDUCT COMPLIANCE



Pursuant to clause 49 of the Listing agreement entered with the Bombay

Stock Exchange Limited and the National Stock Exchange of India

Limited, the declaration signed by the Managing Director affirming

compliance with the code of Conduct by the Director''s and senior

management personnel, for the financial year 2014-2015 is annexed and

forms part of the Directors and Corporate Governance Report.



CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION



The particulars prescribed under Section 134 of the Companies Act, 2013

read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, relating

to Conservation of Energy, Technology Absorption, Foreign Exchange

Earnings and Outgo are furnished in Annexure A to this Report.



CAUTIONARY STATEMENT



Statements made in the Report, including those stated under the caption

"Management Discussion and Analysis" describing the Company''s plans,

projections and explanations may constitute "forwards looking

statement" within the meaning of applicable laws and regulations.

Actual results may differ materially from those either expressed or

implied.



REGISTRAR AND SHARE TRANSFER AGENT



M/s Karvy Computershare Private Limited, Hyderabad, is the Registrar

and Share Transfer Agent of the Company. Details of the depository

system and listing shares are given in a part of the "Additional

Shareholders Information", which forms a part of the Corporate

Governance Report and is attached with the Annual Accounts.



ACKNOWLEDGEMENTS



Your Directors would like to place on record their sincere thanks to

the Company''s clients, vendors, investors, and bankers for their

continued support to the Company during the year. The Directors wish to

place on record their appreciation of the contributions made by

employees at all levels.



We thank the Government of India, State Government and other Government

agencies for their support and look forward to their continued support

in future.



By order of the Board



For Hanung Toys and Textiles Limited



Place : Noida Ashok Kumar Bansal



Date : August 14, 2015 Chairman-cum-Managing Director

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