DIRECTORS' REPORT FOR THE FINANCIAL YEAR 2014-2015 To The Members, Your Directors have pleasure in presenting their 23rd Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2015. STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK : India Textile Industry is one of the leading textile industries in the world. Though it was predominantly unorganized industry even a few years back, but the scenario started changing after the economic liberalization of Indian economy in 1991. The opening up of economy gave the much-needed thrust to the Indian textile industry. The Company was incorporated in 1992 and have much market share in worsted suiting in India. The Company is also making fresh and enthusiastic efforts to improve its performance in the world market, particularly Europe, Japan and the Middle East Countries. Due to continued economic recession and crisis in Textile markets and as a result thereof, turnover decreases marginally to Rs. 29.93 crores as against Rs. 34.34 crores in the previous year. However, the Company's effort over the past years to enhance its presence in the Domestic sector bore fruit and by penetrating the Institutional segment, there was a significant rise in Domestic Sales. Due to overall decrease in Turnover and increase in input costs the Company suffering cash loss. During the year under Review the Company continued to be under BIFR as a Sick Industrial Undertaking.The matter is subjudice before the Court of Law. BUSINESS OUTLOOK : The inherent strengths of the textile industry have seen the textile industry through rough days and hard times. The World trading system have endangered the stability of the textile industry and created an atmosphere of uncertainty and turbulence in the industry. But it is also a fact that turbulence is necessary for any change in the system. In a World that is fast losing its traditional boundaries and borders are becoming invisible, there is need to bring about technological improvement, structural changes, liberalisation from controls and regulations, increased productivities of labour and machine and reliable quality assurance systems. If there is insecurity inherent in the globalised economy, there is also opportunity - opening up of vast markets to Indian textiles and Indian clothing that were earlier closed or regulated and Indian textile industry is ready to take up this opportunity of free trade and secure its well deserved position in the international textile arena. The Economic crisis is continuing to affect the order situation adversely. The on-going competition with China is also making it difficult to generate fresh business. Although China is the number one apparel export country, and the Chinese-made fabrics are still not satisfactory in respect of color, texture, quality etc. To be more competitive in the domestic market, the management is pursuing with the Government Authorities for De-bonding of our processing unit. MATERIAL CHANGE AND COMMITMENTS AFTER THE BALANCE SHEET DATE: There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the Financial Statements relate and the date of this report. DIVIDEND : In view of huge accumulated losses, the Directors regret their inability to recommend any dividend for the Financial Year 2014-15. DEPOSITS : The Company has neither invited nor accepted deposits from the public within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under. DIRECTORS' RESPONSIBILITY STATEMENT : In compliance of Section 134 (5) of the Companies Act, 2013, your Directors state as follows: a) That in the preparation of accounts, applicable accounting standards have been followed and there are no material departures ; b) That appropriate accounting policies have been selected and applied consistently with reasonable and prudent judgements and estimates so as to give true and fair view of the state of affairs of the Company ; c) That proper and sufficient care have been taken for the maintenance of adequate accounting records for safeguarding assets and for preventing fraud and other irregularities ; d) That the Annual Accounts have been prepared on a going concern basis ; e) That internal financial controls had been laid down and are adequate and operating effectively f) That proper systems had been devised to ensure compliance with the provision of all applicable laws and such systems are adequate and operating effectively ; DIRECTORS AND KEY MANAGERIAL PERSONNEL : Mr. Kamal Sharma (DIN : 02946513) retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment. Mr. N. B. Kharpkar (DIN : 06373389), retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment. During the Year 2014-2015, Mr. S. K. Rathi (DIN : 01386151 ) has been resigned as Director of the Company w.e.f. 31.03.2015. Since the last Annual General Meeting, Ms. Mohana Surendra Pingale (DIN : 07093321), and Mr. Mukesh Mandwal (DIN : 07144137) has been appointed as an Additional Directors of the Company w.e.f. 11.02.2015 and 31.03.2015 respectively. Appropriate Resolutions seeking your approval for their appointment are appearing in the Notice convening the Annual General Meeting. DECLARATION FROM INDEPENDENT DIRECTOR : The Independent Directors has submitted their Disclosures to the Board that they fulfill all the requirements as stipulated under section 149 (6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors. PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS UNDER SECTION 186: Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 forms part of the Financial Statements. TRANSACTION WITH RELATED PARTY: Related party transactions that were entered during the financial year were on arm's length basis and in the ordinary course of business. There were no materially significant related party transactions which were in conflict of the Company. AMOUNTS TRANSFERRED TO RESERVES : In view of huge accumulated losses, the Directors regret their inability to recommend any amount to be transferred to reserves for the Financial Year 2014-15. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO : The details pertaining to conservation of energy, technology, absorption, foreign exchange earnings and outgo are provided as Annexure I, which forms part of this report. RISK MANAGEMENT : A comprehensive risk management policy for the purpose of management policy in the Company for periodical review by the Board of Directors is in place. In addition, Risk Management issues are generally discussed in the Audit Committee. CORPORATE SOCIAL RESPONSIBILITIES : The provisions of Section 135 of the Act in connection with Corporate Social Responsibility are not applicable to the Company since the Company falls below the threshold limits. BOARD EVALUATION : The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49"). The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and elected Chairman of the each meeting was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. CORPORATE GOVERNANCE : As a Listed Company, necessary measures are taken to comply with Clause 49 and all other applicable provisions of Listing Agreements with the Stock Exchanges and other Company Law requirements. A report on Corporate Governance along with a certificate from the Auditors is annexed hereto and forms part of this Report. NUMBER OF BOARD MEETINGS: During the Financial Year 2014-15, the Board of Directors of the company met five times details of the meetings has been given in the Corporate Governance Report, which forms part of this report. AUDIT COMMITTEE : The Details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this report. TRANSACTION WITH RELATED PARTY: Related party transactions that were entered during the financial year were on arm's length basis and in the ordinary course of business. There were no materially significant related party transactions which were in conflict of the Company. AMOUNTS TRANSFERRED TO RESERVES : In view of huge accumulated losses, the Directors regret their inability to recommend any amount to be transferred to reserves for the Financial Year 2014-15. CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO : The details pertaining to conservation of energy, technology, absorption, foreign exchange earnings and outgo are provided as Annexure I, which forms part of this report. RISK MANAGEMENT : A comprehensive risk management policy for the purpose of management policy in the Company for periodical review by the Board of Directors is in place. In addition, Risk Management issues are generally discussed in the Audit Committee. CORPORATE SOCIAL RESPONSIBILITIES : The provisions of Section 135 of the Act in connection with Corporate Social Responsibility are not applicable to the Company since the Company falls below the threshold limits. BOARD EVALUATION : The board of directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49"). The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and elected Chairman of the each meeting was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. CORPORATE GOVERNANCE : As a Listed Company, necessary measures are taken to comply with Clause 49 and all other applicable provisions of Listing Agreements with the Stock Exchanges and other Company Law requirements. A report on Corporate Governance along with a certificate from the Auditors is annexed hereto and forms part of this Report. NUMBER OF BOARD MEETINGS: During the Financial Year 2014-15, the Board of Directors of the company met five times details of the meetings has been given in the Corporate Governance Report, which forms part of this report. AUDIT COMMITTEE : The Details pertaining to composition of Audit Committee are included in the Corporate Governance Report, which forms part of this report. NOMINATION & REMUNERATION COMMITTEE : The Details pertaining to composition of Nomination & Remuneration Committee are included in the Corporate Governance Report, which forms part of this report. STAKEHOLDERS RELATIONSHIP COMMITTEE: The Details pertaining to composition of Stakeholders Relationship Committee are included in the Corporate Governance Report, which forms part of this report. AUDITORS' REPORT : The observations of the Auditors' Report have been dealt with in the Notes to Financial Statement, and being self-explanatory, do not call for any further clarifications. AUDITORS : M/s S. S. Kothari & Co., Chartered Accountants, Auditors of the Company are retiring at the ensuing Annual General Meeting and are eligible for re-appointment. COST AUDITOR : Your Company had appointed M/s Manisha & Associates, Cost Accountants, as Cost Auditors, with the approval of the Central Government, for audit of cost records maintained by the Company for the financial year 2015-2016. SECRETARIAL AUDITOR : In terms of Section 204 of the Companies Act 2013, the Board of Directors at their meeting held on 29th May, 2015, have appointed M/s K K Sanganeria & Associates, Practicing Company Secretaries, as Secretarial Auditor, for conducting Secretarial Audit of the Company for the Financial Year 2015-16. Report of the Secretarial Auditor for the financial year ended 31.03.2015 is given as an Annexure II which forms part of this report. BOARDS VIEW : During the year under Review the Company continued to be under BIFR as a Sick Industrial Undertaking. The matter is subjudice before the Court of Law. All compliances with the stock exchanges are updated and in respect of the status of the company being shown as "Suspended" by BSE Limited and the Calcutta Stock Exchange Limited, the company has taken up the matter with both the exchanges as the company is in compliance with the Listing Agreement. The Company has disputed the repayment of due. The loss and damages caused to the borrower by the lender is much more than the amount lent. Hence, figures of the borrowed amount shown in the balance sheet after due adjustments with the said loss and damages may result in entitlement to recover substantial amount from the lender. Under these facts and circumstances, the figures of borrowed amount in this balance sheet cannot be considered as admission, if any, of the claim of lender(s). EXTRACT OF ANNUAL RETURN : As provided under Section 92 (3) of the Companies Act, 2013, the extract of Annual Return is given in Annexure III in the prescribed form MGT - 9 , which forms part of this report. POLICY ON PREVENTION OF SEXUAL HARASSMENT : The company is committed to provide a safe and conducive work environment to its employee and has formulated "Policy for Prevention of Sexual Harassment". During the financial year ended 31st March, 2015, the Company has not received any complaints pertaining to Sexual Harassment. INDUSTRIAL RELATIONS : Industrial Relations continued to remain cordial throughout the year. Your Directors wish to place on record their appreciation for dedicated and sincere services rendered by the executives, staff and workmen at all levels. ACKNOWLEDGEMENT : Your Directors acknowledge with gratitude the co-operation and assistance received from the Central and State Government, Financial Institutions, Banks, Shareholders and others during the year under review. On Behalf of the Board N. K. Garg Executive Director Kamal Sharma Director Place : Nagpur Date : 29th May, 2015 |