AFFLUENCE

DIRECTORS' REPORT

 The Members,

 Your Directors have pleasure in presenting the 38thAnnual Report together with the Audited Financial Statements for the year ended31stMarch, 2016.

1.  FINANCIAL RESULTS

The Company's financial performance, for the year ended March 31, 2016 is summarised below:-

(Rs.in Lacs) 

 2.  OPERATIONS

The company achieved a gross turnover of Rs. 70 crores during the current year as against Rs. 84 crores in the previous year. The operating levels were low during the year due to POY Division remained closed except run partially for certain period. Your company is able to reduce the net loss during the year under review even in adverse market condition. 

 Your company is relentlessly putting all its efforts to reduce the cost and improve the operating margin but profit of the company still negative. In view of accumulated loss, your Directors are unable to declare any dividend and no amount was transferred to reserves in the year under review.

 3.  EXPORTS

The worldwide recessionary trend has adversely affected the export of PFY from the country. Despite the recessionary trend prevailing in the global economic market, the company has been able to maintain export of Rs. 24 crores during the years under review, which is marginally low as compared to previous year. Your company is making all efforts to explore new market and improve its global market position.

 4.  FUTURE PROSPECTS

The current situation is expected to improve in the forth coming period due to renewed confidence in the market brought by series of economic reforms pursued by the Government. The long term outlook for Polyester Filament Dyed Yarn is encouraging in view of growing consumption in South America, African countries as well as in domestic market. As such our company is hopeful to strengthen its presence in spite of new entrants.

 5.  STATUS OF PROCEEDINGS AT BIFR AND SETTLEMENT OF REMAINING DEBTS

The Company is making continuous efforts for settlement of remaining debts. The Draft Rehabilitation Scheme submitted to the Hon'ble BIFR with copy to Operating Agency (IFCI) is under examination and consideration.

 6.  PUBLIC FIXED DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014during the year under review.In view of the petition filed by the Company, the Hon'ble Company Law Board had passed an order on 23.1.2002 that, "The repayment of Public fixed deposits shall be made by the company in accordance with the "revival scheme" as and when approved by the BIFR under the provisions of SICA". However payments on compassionate grounds are being made continuously by the Company as per the decision of the committee formed by Hon'ble CLB for this purpose.

 7.  PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the loans and investments made by Company are given in the notes to the Financial Statements.

 8.  PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under reviewyour Companyhad not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the applicable provisions of section 188(1) of the Companies Act, 2013 and Rules made thereunder.

 9.  CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 and Schedule VII of the Companies Act, 2013 regardingcorporate social responsibilityare not applicable to the Company.

 10. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint venture or Associate Company.

 11. DIRECTORS AND COMMITTEES

During the year under review, Smt. Sunita A. Sharma was appointed as an Additional Director by the Board of Directors in their meeting held on 19thMarch, 2015 has been subsequently appointed as Director liable to retire by rotation in last Annual General Meeting held on 23rdSeptember, 2015 of the Company and she is liable to retire by rotation and being eligible, offers himself for reappointment.

 In accordance with the provisions of Companies Act, 2013, Shri Kamal Ranka, Chairman and Managing Director of the Company whose term expires on 18thOctober, 2015has beenre-appointed by the Shareholders inlast Annual General Meetingheld on23rdSeptember, 2015for a period of 3 years with remuneration subject to the approval of Central Government. There was no change in the Key Managerial Personnel during the year.

 Declaration of Independent Directors

The Company has received declarations from all the Independent directors of the Company that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013and Regulation 16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

 Nomination and Remuneration Policy

Pursuant to the provisions of section 178 of the Companies Act, 2013 read with rules made there under, the Board has constituted a Nomination and Remuneration Committee. The Board on the recommendation of the Nomination and Remuneration Committee has framed a policy i.e. Nomination and Remuneration Policy for selection and appointment of Directors, senior managerial personnel and their remuneration.

 The Executive/whole time/Managing Director, Key managerial personnel and other employees shall be of requisite qualification, high integrity and have relevant expertise and experience.

 In case of appointment of Independent Directors, the committee shall satisfy itself with regard to the independence of the Directors and also ensure that the candidate identified for appointment as an Independent Director is not disqualified for appointment under Section 149 and 164 of the Companies Act, 2013.

 Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship. Standard parameters were prepared after taking into consideration inputs received from the Directors, covering 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.

 A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman 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 shareholders 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 carried out by the Independent Directors. The Directors 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 and review the financial performance of the Company. The notice and detailed agenda alongwith other material information are sent in advance separately to each Directors.

 The Board of Directors duly met four times during the financial year from 1stApril, 2015 to 31st March, 2016 i.e. 26thJune, 2015, 23rdSeptember, 2015, 29thDecember, 2015 and 28th March, 2016.The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

 Audit Committee

Audit Committee of the Board of Directors is entrusted with the responsibility to supervise the Company's internal controls and financial reporting process. The composition, quorum, powers, role and scope are in accordance with Section 177 of the Companies Act, 2013 and the provisions of Regulation 18 of the Listing Regulation. All members of the Audit Committee are financially literate and bring in expertise in the fields of Finance, Taxation, and Economics etc.. The details of Committee members are as follows:- 

Nomination and Remuneration Committee

The Board of Directors of the Company has constituted the Nomination and Remuneration Committee of Directors to act in accordance with the provisions of Section 178 of the Companies Act, 2013. The details of Committee members are as follows:- 

 12.  DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

(a)In the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures;

(b)The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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) 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;

(d)The directors have prepared the annual accounts on a going concern basis;

(e) The directors 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) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

13.  INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has an effective internal control and risk-mitigation system, which are constantly assessed and strengthened 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.

 14.  AUDITORS AND AUDITOR'S REPORT

 Statutory Auditors

M/s. T R Chadha and Co. LLP, having LLP Identification No. AAF-3926, formally known as T.R. Chadha and Co. (Firm Registration No. 006711N) Chartered Accountants, Mumbai were appointed as Statutory Auditors of the Company at the last Annual General Meeting held on 23rd September, 2015tohold office till the conclusion of the ensuing Annual General Meeting.

 The observations made in the Auditors' Report read together with relevant notes thereon are self-explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013.

 In accordance with theprovision of Section 139 and 142 of the Companies Act, 2013 and the rules made thereunder, and pursuant to the recommendations of the Audit Committee, the Board of Directorsis recommended to appointM/sT R Chadha and Co. LLP,as a Statutory Auditors of the Company from the conclusion of ensuing Annual General Meeting to conclusion of next Annual General Meeting and the Company has obtained written confirmation fromM/sT R Chadha and Co. LLP,that their appointment, if made, would be in conformity with the limits specified in the said Section.

 Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. JAKS and Associates, Company Secretaries, Jaipur to undertake the Secretarial Audit of the Company. The Secretarial Audit report of the Company is appended asAnnexure-Ato the Board's Report.

 The observations in Secretarial Audit Report which pertains mainly Listing agreement requirements, stock exchange compliances etc., it is clarified that the company will take necessary action on implementation of rehabilitation scheme pending for examination and approval of BIFR and ensures that all the provisions will be complied with the fullest extent.

 15.  EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format (MGT-9) is appended asAnnexure-Bto the Board's Report.

 16.  BUSINESS RISK MANAGEMENT

The Board of Directors of the Company formally adopted a policy i.e. Risk Management Policy for framing, implementing and monitoring the risk management plan for the Company. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. The policy establishes a structured and disciplined approach to Risk Management. In the challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks of the Company inter alia are competition, business risk, technology obsolescence, investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelity risk, legal risk. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.

 17.  CODE OF CONDUCT

The Company has a Code of Conduct which is applicable to the Board of Directors, Key Managerial Personnel and all other employees in the course of day to day business operations of the Company. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors, Key Managerial Personnel and all other designated employees of the Company in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure.

 18.  VIGIL MECHANISM

Pursuant to the provision of Section 177 (9) and (10) of the Companies Act, 2013, the Company has adopted Vigil Mechanism, which also incorporates a whistle blower policy for Directors and employees 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.

 19.  INDUSTRIAL RELATIONS andPARTICULARS OF EMPLOYEES

Your Directors sincerely appreciate the workers, staff and officers for putting their best efforts. The Company has enjoyed healthy and cordial industrial relations throughout the year except the workers in the POY section created labor unrest and the company had suspended its operation of its POY Division form 15thNovember 2012.

 The Disclosure required under Section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, will be provided upon request.In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance.

 20.  ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

 The Company has zero tolerance towards sexual harassment at the workplace and has a proper management system to prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. During the Financial Year 2015-16, the Company has not received any complaints of sexual harassment.

 21.  CORPORATE GOVERNANCE

We ensure that we evolve and follow the corporate governance and best practices not just boost shareholders value, but also respect minority rights. We consider it our inherent responsibility to disclose timely information regarding our financials and performance, as well as the leadership and governance of the Company.

 22.  ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith asAnnexure-C.

 23.  SHARE CAPITAL

The paid up Share Capital as at March 31, 2016 stood atRs. 12821.66lacs.During the financial period endedMarch 31, 2016, the Company has not issued any share capital with different voting rights, sweat equity or ESOP nor provided any money to the employees or trusts for purchase of its own shares.

 24.  MATERIAL CHANGES AND COMMITMENTS

No material changes or commitments have occurred between the end of the financial period to which the financial statements relate and the date of this report, affecting the financial position of the company.

 25.  SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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. However, members' attention is drawn to the statement on contingent liabilities, commitments in the notes forming part of the Financial Statements.

 26.  ACKNOWLEDGEMENTS

Your Directors wish to extend their sincerest thanks to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous cooperation and assistance.

ON BEHALF OF THE BOARD

Sd/- 

 (Kamal Ranka)

Chairman and Managing Director

DIN: 00934876

Place: Mumbai 

Date : 27thJune, 2016

The company achieved a gross turnover of Rs. 70 crores during the current year as against Rs. 84 crores in the previous year. The operating levels were low during the year due to POY Division remained closed except run partially for certain period. Your company is able to reduce the net loss during the year under review even in adverse market condition. Your company is relentlessly putting all its efforts to reduce the cost and improve the operating margin but profit of the company still negative. In view of accumulated loss, your Directors are unable to declare any dividend and no amount was transferred to reserves in the year under review.

Energy conservation continues to receive priority attention at all levels. All efforts are made to conserve and optimize use of energy with continuous monitoring, improvement in maintenance and distribution systems and through improved operational techniques.

Your Company is having research and development cell, headed by a senior and experienced textile technologist. The section is keeping continuous watch on the quality of the product at various stages. The R & D section also keeps a regular track on the latest advancement on the spinning and finishing technology in order to keep pace with the demand of the new products.

The Company has earned during the period foreign exchange of Rs. 2400.80 Lacs at F.O.B. price against an outgo of Rs. 59.32 Lacs.

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: (a) In the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures; (b) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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) 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; (d) The directors have prepared the annual accounts on a going concern basis; (e) The directors 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) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: (a) In the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to material departures; (b) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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) 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; (d) The directors have prepared the annual accounts on a going concern basis; (e) The directors 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) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.