DIRECTORS' REPORT TO THE MEMBERS Your Directors have pleasure in presenting the 26th Annual Report on the affairs of your Company together with the Audited Statements of Account for the Year ended March 31, 2015 DIVIDEND Your Directors intend to plough back entire profit after tax for the year ended 31/03/2015, for meeting working capital requirement and capital expenditure on plant up gradation. As such no dividend is recommended for the year ended 31/03/2015. PERFORMANCE REVIEW The Indian Textile Industry performed reasonably well during the fiscal year 2013-14 and was expected to continue the trend in the F.Y. 2014-15 also. However the Industry could not perform as expected due to numerous reasons. The major causes were export of cotton yarn to china dropped nearly 23% due to signifcant changes in Chinese Procurement policies. There was a sharp reduction in raw material prices in line with reduction in commodity prices globally. This created expectation of lower prices in the entire chain leading to reduced prices and volumes. Consequently, yarn prices also fell significantly leading to lower sales turnover. Your Company being an Export Oriented spinning mill has to carry several months requirement of raw cotton for maintaining quality, thus incurring substantial value losses on such inventories impacting profitability of the company. Cost of Power, Salaries & Wages continued to rise during the year, the interest rates remained high thereby putting extreme pressure on margins. During the financial year under review the company's total revenues sharply came down to Rs.47252.66 lacs against Rs. 63028.47 lacs in the previous year due to substantial reduction in exports of outsourced yarns for reasons mentioned above. The profit before tax is Rs. 451.74 lacs against Rs. 1008.14 lacs in the previous year, a decrease of 55.19%. The Company's yarn dyeing and fibre bleaching facility at kagal has found good market acceptance for its products and capacity utilisation is growing. The Company is further proposing a garment unit, for supplying of readymade garments, at D-6, Roma Industrial Estate, Kanpur -208001, Uttar Pradesh. Particulars of Directors and Key Managerial Personnel Mr. Sushil Patwari, DIN 00023980, is liable to retire by rotation and being eligible offers himself to be re-appointed. The company has received declaration from the Director specifying his eligibility to be appointed as such. In accordance to the requirements of sec. 149(1) of the Companies Act, 2013, Ms. Surabhi Sanganeria, DIN 06987772, was appointed as an Additional Director in the Board Meeting dated 13th November, 2014. Her term of office expires at this ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing Ms. Surabhi Sanganeria as an Independent Director. The Company has received declaration from Ms. Sanganeria confirming that she meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. In accordance to the requirements of sec. 203 of the Companies Act, 2013, Mr. Sushil Patwari is proposed to be appointed as an Executive Chairman and consequently he shall vacate the position of Managing Director of the Company. The Board has vide its' meeting dated 28/05/2015 approved the appointment of Mr. Sushil Patwari as the Executive Chairman of the Company with effect from 01/06/2015 till 30/09/2016, subject to the approval of the Members in the ensuing Annual General Meeting. Mr. Kedar Nath Bansal was appointed as the Chief Finance Officer vide Board Meeting dated 29/05/2014. There is no other change in the office of any Key Managerial Personnel. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is disclosed in detail in the Corporate Governance Report and is attached to this report. INDEPENDENT DIRECTORS DECLARATION The Non Executive Independent Directors fulfill the conditions of independence specified in Section 149 (6) of the Companies Act, 2013 and Rules made there-under and meet with requirement of Clause 49 of the Listing Agreement entered into with the stock Exchanges. Formal letter of appointment to Independent Director as provided in Companies Act, 2013 and the Listing Agreement has been issued. MANAGEMENT DISCUSSION AND ANALYSIS As per Clause 49 of the Listing Agreement entered into with the Stock Exchanges the Management Discussion and Analysis in a separate report is annexed hereto and marked as Annexure - "B". CORPORATE GOVERNANCE & CSR As per Clause 49 of the Listing Agreement entered into with the Stock Exchanges, a separate report on Corporate Governance with Auditors Certificate thereon is enclosed as part of this annual report and marked as Annexure "C". Requisite Certificate from the Auditors of the Company, namely M/s Das & Prasad, regarding compliance of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to the report of Corporate Governance. Adequate steps to ensure compliance of all the mandatory provisions of 'Corporate Governance' as provided in the Listing Agreements of the Stock Exchanges with which the Company's Shares are listed have been taken and your company has ensured its required compliance. A detailed report under Corporate Social Responsibility (CSR) is also included in the same. Your Directors are proud to be part of such noble initiative. Number of meetings of the Board of Directors The details of the number of meeting of the Board of Directors held during the year forms part of the Corporate Governance Report. Board Evaluation As recommended by the Nomination and Remuneration Committee, an evaluation framework was adopted by the Board during the year. Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board carried out an annual performance evaluation of its own performance, the Directors individually as well as of its various committees. After taking into consideration the feedback of the Directors the overall Board Evaluation covered various aspects more fully disclosed in the Corporate Governance section. 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 director was carried out by the Independent Directors at their separate meeting. The Board of directors experssed their satisfaction with the evaluation process. Directors' Responsibility Statement Pursuant to the requirement of Section 134 (3)( c) of the Companies Act, 2013 and based on the representations received from the management, the directors hereby confirm having : (a) followed in the preparation of the annual accounts, the applicable accounting standards with proper explanation relating to material departures; (b) 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; (c) taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act. Their are adequate controls for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) prepared the annual accounts on a going concern basis; and (e) laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (f) devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND The Company transferred Rs. 2,69,855/- only on account of Unpaid/ Unclaimed Dividend of 2006-07 to the INVESTOR EDUCATION AND PROTECTION FUND in terms of section 124(6) of the Companies Act, 2013 on 12/12/2014 and complied with the statute. Material Changes effecting the Company There were no significant and material orders passed by any regulators or courts or tribunal impacting the going concern status and company's operations in future. There were no material changes and commitments effecting the financial position of the Company occurring between 31st March, 2015 and the reporting date. Deposits Your Company has not accepted any deposits during the year under review within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and accordingly no amount was outstanding as on the date of Balance Sheet. VIGIL MECHANISM / WHISTLE BLOWER POLICY In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behavior the company has adopted a vigil mechanism policy. This policy is explained in corporate governance report and also posted on the website of company. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT,2013 The company has in place an Anti Sexual Harassment Policy in line with the requirements of the "Sexual Harassment Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013". Internal Complaints Committee (ICC) has been set up to redress complaints received regarding Sexual Harassment. All employees (Permanent, Contractual, Temporary, Trainees) are covered under this Act. The following is a summary of Sexual Harassment complaints received and disposed off during the year 2014-2015: No. of Complaints received : NIL No. of Complaints disposed off : NIL PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013 The full particulars of Loans, Guarantees or Investments made under section 186 of the Companies Act, 2013 are given in the Notes to the Financial Accounts. AUDITORS AND SECRETARIAL AUDIT STATUTORY AUDITORS Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed thereunder, M/s. Das & Prasad (FRN 303054E), Chartered Accountants, Kolkata, the Auditors of the Company, retire at the ensuing Annual General Meeting and are eligible for re-appointment, for which company has received a requisite certificate to Section 139 and 141 (3)(g) of the Companies Act, 2013 from M/s. Das & Prasad, the retiring Auditors of your Company regarding their eligibility for re-appointment as Auditors, and we recommend their re-appointment. SECRETARIAL AUDITOR Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/ s M.K. Sharma & Associates, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The same is attached as Annexure "E" and forms an integral part of this Report. AUDITORS' REPORT There are no qualification, reservations or adverse remarks or disclaimers in the Auditors and Secretarial Auditors Report and, therefore, do not call for any further explanation under Section 134 of the Companies Act, 2013. COST AUDITORS M/s V. J. Talati & Co. Cost Accountants, was appointed as Cost Auditors for issuing Cost Audit Report of the Company for the F.Y 2014-15. ANNUAL RETURN EXTRACT Pursuant to sec. 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 the details forming part of extract of the annual return in Form No. MGT - 9 is Annexed herewith as Annexure "F" CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO Information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8 of Companies (Accounts) Rules, 2014 is given in Annexure -"A" to this report. PARTICULARS OF EMPLOYEES None of the employees are drawing remuneration exceeding Rs.5.00 Lacs per month or Rs.60.00 Lacs per year. Hence, details required to be furnished in accordance with Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are not applicable. The information required pursuant section 197 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of the Employees of the Company is detailed separately as Annexure D to the report. APPRECIATION We are thankful to various agencies of the Central and State Government(s) for their support and Co-operation. Your Directors are also thankful to all stakeholders including customers, bankers and suppliers for their continued assistance, co-operation and support. Your Directors wish to place on record their sincere appreciation of all employees for their commitment and contribution to the Company. The Directors are also grateful for the confidence, faith and trust reposed by the shareholders of the Company. By order of the Board Sushil Patwari Chairman & Managing Director Date: 28th May, 2015 Place: Kolkata |