DIRECTOR'S REPORT Dear Members, 1. Your Directors are pleased to present the Thirty - Second Annual Report together with audited financial statements for the year ended March 31, 2015. 2. DIVIDEND Your Directors have recommended a final dividend of Rs. 2.25/- per equity share (i.e. 22.5%) of Rs. 10/- each (last year Rs. 1.25/- per equity share) for the financial year ended March 31, 2015, amounting to Rs. 321.73 lacs (excluding tax). The dividend payout is subject to approval of members at the ensuing Annual General Meeting. During the financial year 2014-15, your Company declared and paid an interim dividend of Rs. 2.25/- per equity share (i.e. 22.5 %) of Rs. 10/- each. The total dividend for the year ended March 31, 2015 would accordingly be 4.50/- per equity share of Rs. 10 each. The total outgo for the financial year 2014-15 will be Rs. 643.46 lacs (excluding dividend distribution tax) as against Rs. 452.72 lacs (excluding dividend distribution tax) in the previous year. Note :- In the figure of Interim Dividend of 14-15 an amount of Rs. 5,62,500/- is included which is a part of Final Dividend for 13-14 as there was conversion of warrants into Equity Shares before the book-closure and after the accounts finalization. 3. CREDIT RATING The Company's financial discipline and prudence is reflected in the strong credit ratings ascribed by ICRA Limited as given below: Instrument Rating Long Term Debt ICRA A (Stable) Short Term Debt ICRA A1 4. CONSOLIDATED FINANCIAL STATEMENT In accordance with the Companies Act, 2013 ("the Act") and Accounting Standards (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates, issued by the Institute of Chartered Accountants of India form part of this Annual Report. 5. SUBSIDIARY COMPANIES A statement containing the salient features of financial statements of the subsidiary Company of your Company forms part of consolidated financial statements in compliance with section 129 and other applicable provisions, if any, of the Companies Act, 2013. 6. CAPITAL EXPENDITURE As at 31st March, 2015 the gross fixed assets stood at Rs. 10,764.55 lacs and net fixed assets Rs. 7,840.63 lacs. Additions during the year amounted to Rs. 1,358.63 lacs which includes Rs. 95.29 lacs as capital work in progress. 7. SHARE CAPITAL The paid up Equity Share Capital as on March 31, 2015 was Rs. 1429.92 lacs. During the year under review, the Company has issued 4,50,000 Equity Shares upon exercise of option to convert equivalent number of Optionally Fully Convertible Warrants (OFCWs) into equivalent number of Equity Shares. 8. CORPORATE GOVERNANCE As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance practices followed by the Company, together with a Certificate from the S.K. Jain & Co, Practicing Company Secretary confirming compliance forms an integral part of this Report. 9. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013, and based on the representation received from the management your Directors confirm that: a. in the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same; b. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date; c. the Directors have taken proper and sufficient care 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. d. the Directors have prepared the annual accounts on a 'going concern' basis; e. the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 10. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Dr. S. K. Jain, Practicing Company Secretary to conduct the Secretarial Audit of your Company. The Report of the Secretarial Audit is placed as annexure to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. 11. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in Form MGT-9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure to this Report. 12. CORPORATE SOCIAL RESPONSIBILITY The Board of Directors at its meeting held on 27th January, 2015 approved the Corporate Social Responsibility (CSR) Policy for your Company pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, on the recommendations of the CSR Committee. The CSR Policy outlines the CSR vision of your Company. The Company has not undertaken any CSR activity during the financial year 2014-15 as the Company is in process of indentifying the best alternate for CSR spending. The Company proposes to commence CSR activity during F. Y 2015 - 16. 13. MANAGEMENT DISCUSSION AND ANALYSIS Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in the separate section forming part of Annual Report. 14. RISK MANAGEMENT Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business divisions. Risk management forms an integral part of the Company's planning cycle 15. AUDITORS Statutory Auditors The Company's Statutory Auditors M/s. Krishna R. Moondra & Associates, Chartered Accountants hold office till the conclusion of the ensuing Annual General Meeting. However, they have expressed their unwillingness to be reappointed as Statutory Auditors of the Company. M/s. G. M. Kapadia & Co., Chartered Accountants have given their consent for appointment as Statutory Auditors of the Company subject to the approval of the Shareholders at the ensuing General Meeting. M/s. G. M. Kapadia & Co., Chartered Accountants have also confirmed their eligibility to the effect that their appointment if made, could be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for appointment. 16. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly. The internal control is exercised through documented policies, guidelines and procedures. It is supplemented by an extensive program of internal audits. The audit observations and corrective action taken thereon are periodically reviewed by the audit committee to ensure effectiveness of the internal control system. The internal control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data, and for maintaining accountability of persons. 17. VIGIL MECHANISM Your company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the vigil mechanism and the Whistle Blower Policy of your Company have been outlined in the Corporate Governance Report which forms part of this report. 18. RELATED PARTY TRANSACTIONS During the financial year 2014-15, your Company has entered into transactions with related parties as defined under section 2 (76) of the Companies Act, 2013 read with Companies (Specifications of Definitions Details) Rules, 2014, which were in the ordinary course of business and on arm's length basis and in accordance with the provisions of Companies Act, 2013, Rules issued thereunder and Clause 49 of the listing agreement. During the financial year 2014-15, there were no transactions with the related parties which qualify as material transactions under Listing Agreement. The details of the related party transactions as required under Accounting Standard - 18 are set out in Note No. 2 of Part B - Other Notes to Accounts to the standalone financial statement forming part of this Annual Report. 19. ENHANCING SHAREHOLDERS VALUE Your Company believes that its Members are among its most important stakeholders. Accordingly, your Company's operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your company is continuously expanding its manufacturing base, which the company is doing with expansions in Kosamba, Gujarat by incorporating state of art technology and new looms. Your company had purchased a new factory building in Kalyan (Asmeeta Textile Park) in last year & had commenced the production from Apr, 2015 which has led to the expansion in the ribbons and made ups segment. The company has added more new machines which will increase the production capacity by 3 times. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively impact the socio-economic and environmental dimensions and contribute to sustainable growth and development. 20. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Act and the Articles of Association of the Company, Shri Varun Daga, Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment. During the Financial Year 2014-15, Shri Pardeep Khosla, was appointed as an Additional Director with effect from 18th July, 2014 he holds his office .till the conclusion of the ensuing Annual General Meeting. The Company has received a Notice in writing from a Member under Section 160 of the Companies Act, 2013 signifying his intention to propose Mr. Pardeep Khosla as candidate for the office of the Director of the Company and accordingly he is being proposed to be appointed as a Director of the Company to be designated as Designated as Independent Non-Executive Director for a five (5) consecutive years upto the conclusion of the Annual General Meeting held in the year 2020. During the year under review, the members approved the appointments of Shri Balkrishna Patil, Shri Saumil Ushakant Marfatia and Shri Gopikrishna Bilasrai Bubna as Independent Directors who are not liable to retire by rotation. The members have also re-appointed Shri Pankaj Seth as the Managing Director and Smt. Anisha Seth as Whole-Time Director for 3 (three) years commencing from 1st April, 2014 to 31st March, 2017. Your Company has received declarations from all the independent directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Clause 49 of the Listing Agreement. Your Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors. On the basis of the Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors, a process of evaluation was followed by the Board for its own performance and that of its Committees and individual Directors. Shri Pankaj Seth, Managing Director, Smt. Anisha Seth, Whole Time Director, Shri Mukesh Deopura, Chief Financial Officer and Smt. Neha Poddar, Company Secretary are the Key Managerial Personnel of your Company in accordance with the provisions of Section 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 21. EMPLOYEES' STOCK OPTION SCHEME The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees' Stock Option Scheme of the Company in accordance with the applicable SEBI Guidelines. Disclosures with respect to Employees Stock Option Scheme of the Company. Number of options granted: 1,47,000 Exercise Price: 52,000 options granted at an exercise price of Rs.69.75/- <http://Rs.69.75/-> per option, 95,000 options granted at an exercise price of Rs.342/- per option. Options vested: Nil - The options granted will vest over a period of 2 to 4 years from the date of grant. Options exercised: Nil - The options are exercisable over a period of one and half years from the date of respective vesting. 22. MEETINGS During the year Nine Board Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. 23. CONSERVATION OF ENERGY, 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 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out herewith as "Annexure" to this Report. 24. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of Directors/ employees of your Company is annexed as Annexure in this Annual Report of your Company. 25. GENERAL Your Directors state that 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: 1. Details relating to deposits covered under Chapter V of the Act. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report. 4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries. 5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. 26. ACKNOWLEDGEMENTS Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers. For and on behalf of the Board of Directors Pankaj Seth Chairman & Managing Director Place: Mumbai. Dated: 23rd June, 2015 |