mewar polytex ltd Directors report

To The Members

Your Directors have pleasure in presenting the Thirty Sixth Annual Report together with the Audited Accounts of your Company for the year ended 31^st March 2016.

FINANCIAL RESULTS

(Rs. In Lacs)

	2015-16	2014-15
Profit before interest, depreciation and taxes	629.7	414.26
Less:
Interest	22.83	51.42
Depreciation	124.57	112.82
Profit before Tax	482.30	250.02
Add: Exceptional Items	-	25.86
Less: Extraordinary Items	22.30	-
Less: Provision for taxation
Current	176.90	99.59
Deferred	(5.49)	(12.53)
Earlier Year	-	0.21
Profit after tax	288.59	188.61
Earning (Rs.) per share before Exceptional Items	8.93	5.04
Earning (Rs.) per share after Exceptional Items	8.93	5.84

The Company proposes to transfer whole amount of profit to the General Reserves.

OPERATIONS

During the year under review the Company has been able to achieve a turnover ofRs. 6816.52 Lacs as against the turnover of Rs. 5563.08 Lacs during 2014-2015, an increase of 22.53%.

The Net Profit after tax as at Rs. 288.58 Lacs (Previous Year Rs. 188.61 Lacs) is after providing for interest of Rs 22.83 Lacs (Previous Year Rs. 51.42 Lacs) and Depreciation of Rs 124.57 Lacs (Previous Year Rs. 112.82 Lacs) increases by 53.00%.

Above Net profit after tax excludes profit due to Extraordinary items i.e reversal of focus product which amounts to Rs. 22.30 lacs during financial year 15-16 (Previous Year-NIL).

EXPORT

The Company’s export was higher at Rs 3831.69 Lacs (including deemed export of Rs. 483.57 lacs) in current year as compared to Rs. 3513.49 Lacs (including deemed export of Rs. 53.11 lacs) in the previous year.

DIVIDEND

The Board of Directors is not recommending any dividend for the year 2015-16.

DIRECTORS

Mr. Vinod Bafna retires by rotation and, being eligible, offers himself for re-appointment. The Directors recommend Mr. Vinod Bafna for re-appointment.

Mr. Dinesh Mohanlal Sanghavi has tendered his resignation and therefore ceased to be director of the Company w.e.f. 31.03.2016. Board of Directors expresses their sincere thanks and gratitude for services rendered to the Company during his tenure as Director.

Declaration by Independent Directors

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 & SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015

Board evaluation

Pursuant to the provisions of the Companies Act, 2013 & SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Nomination & Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination & Remuneration Policy is stated in the Corporate Governance Report.

Meetings

During the year five Board Meetings and five Audit Committee Meetings were convened and held. The details of dates of Board meetings, Committee Meetings indicating the number of meetings attended by each director are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

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, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 and Schedule VII ofthe Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the Company. However the Board of Directors constantly reviews the areas where the social expenditures for eradicating hunger and poverty, promotion of education and medical aid can be made and will make the suitable expenditures, as may be necessary.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. This policy is also posted on the website of the Company.

Internal Control System and its Adequacy

The Company is following a proper and adequate system of internal control in respect of all its activities including safeguarding and protecting its assets against loss from unauthorized use or disposition. Further all transactions entered into by the Company are duly authorized, recorded and reported correctly.

The internal control system is supplemented by an extensive programme of audit, reviews by management and established policies, guidelines and procedures. The system are designed to ensure that the financial and other records are reliable for preparing financial statements and other data and for maintaining accountability of assets.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered during the financial year were on an arm’s length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company’s Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013, the Rules there under and the Listing Agreement.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 in annexed herewith as Annexure-B.

DEVELOPMENT AND IMPLEMENTATION OF ARISK MANAGEMENT POLICY

The Company has been addressing various risks impacting the Company and the policy of the Company on risk management is provided elsewhere in this Annual Report in Management Discussion and Analysis.

SHARE CAPITAL

The equity shares of the Company have been made available for dematerialisation under the depository system operated by NSDL with effect from 1^st November 2001 and with CDSL from 30^th October 2001. This will facilitate the shareholders to maintain their holdings in "electronic form".

The company’s shares are listed on the BSE.

CORPORATE GOVERNANCE CODE

Pursuant to SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a report on Corporate Governance, along with Auditors certificate regarding compliance of conditions of corporate governance and Management Discussion and Analysis is separately given in this report.

PARTICULARS OF EMPLOYEES

In compliance with the provisions contained in Rule 5(2) and Rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, it is stated that there was no employee in the Company drawing remuneration of Rs. 5,00,000/- or more per month, if employed for part of the year or Rs. 60,00,000/- or more, if employed for the whole year in the Company. Further the remuneration paid to all Key Managerial Personnel was in accordance with remuneration policy adopted by the company.

DETAILS PERTAINING TO REMUNERATION 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

(i) The percentage of increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the Financial Year 2015-2016, ratio of remuneration of each Director to the median remuneration of the employees of the Company for the Financial Year 2015-2016 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

SI. No.	Name	Designation	Remuneration paid (Rs. In Lacs)
			2015 2016	2014 2015	% increase in Remunerati on in the Financial Year 20142015	Ratio of remuneration of each Director / to median remuneration of employees	Comparison of the Remuneration ofthe KMP against the performance of the Company
1	B.H. Bapna	Managing Director	-	-	N.A	N.A	Profit before Tax increased by 66.74% & Profit after Tax increased by 53.00% in Financial Year 2015 -2016
2	Sandeep Bapna	Whole Time Director	-	-	N.A	N.A
3	Vinod Bafna	Whole Time Director	-	-	N.A	N.A
4	Shilpa Bapna	Director	-	-	N.A	N.A
5	Dinesh Kumar Jain	CFO	8.69	7.84	10.84%	N.A
6	Niraj Khamesra	Company Secretary	2.80	1.50	*N.A	N.A

* Mr. Niraj Khamesra, Company Secretary was appointed during the year hence comparison of the Remuneration of the KMP against the performance of the Company is not applicable.

(i) The median remuneration of the employees of the Company during the financial year was Rs.1,61,579/-

(ii) In the financial year, there was an increase of23.00% in the median remuneration of employees;

(iii) There were 92 permanent employees on the rolls of the Company as on March 31,2016;

(iv) a) Variations in the market capitalization of the Company : The market capitalization as on March 31,2016 was Rs. 2204.47 lacs(Rs. 700.91 lacs as on March 31,2015)

b) Price Earnings ratio of the Company was 7.64 as at March 31,2016 and was 3.72 as at March 31,2015

(v) Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e 2015-16 was 16.88% and percentage increase in the managerial remuneration for the same financial year was 10.84%.

(vi) The ratio of the remuneration of the highest paid director to that of employees who are not directors but receive remuneration in excess of the highest paid director during the year - Not Applicable; and

(vii) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

(a) In the preparation of the annual accounts for the year ended 31^st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the period;

(c) they 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) they have prepared the annual accounts on a going concern basis;

(e) they have laid down internal financial controls in the company that are adequate and were operating effectively;

(f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively.

SIGNIFICANT AND MATERIAL ORDERS PASSED BYTHE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

CONSERVATION OF ENERGY

The Company has taken adequate steps for energy conservation.

Since the Companies does not fall under the list of industries, which should furnish this information in Form Aannexed to the aforesaid Rules, the question of furnishing the same does not arise.

TECHNOLOGY ABSORPTION

Company is constantly taking steps to absorb better technology with a view to reduce the cost of production and improve the product quality.

FOREIGN EXCHANGE EARNINGS AND OUT GO

The Foreign Exchange Earnings and Out-go during the year has been as follows:

Earnings	:Rs. 334,812,095/- (previous yearRs. 346,037,566/-)
Outgo	:Rs. 20,222,911/- (previous year Rs. 21,383,182/-)

AUDIT OBSERVATIONS

As regards the Auditors report the points raised therein have been adequately explained in the Notes to the Accounts and as such the directors have no further comments to offer.

AUDITORS

i) Statutory Auditors:

The Auditors, M/s Om Prakash S Chaplot & Co. (Firm Regn. No. 000127C) have been appointed as statutory auditors of the company at the Annual General Meeting held on 24.09.2014 for a period of three years subject to ratification by members at every consequent Annual General Meeting. Therefore, ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing AGM.

ii) 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 P.K. Mishra & Associates (CP No. 16222), Company Secretaries to undertake the secretarial audit of the company. The Secretarial Audit Report is annexed herewith as AnnexureA.

iii) InternalAuditors:

M/s Rajesh Suthar & Associates, Chartered Accountants performs the duties of internal auditors of the company and their report is reviewed by the audit committee from time to time.

ACKNOWLEDGMENT

Your Directors take this opportunity to place on record their sincere appreciation for the cooperation received from Government and Commercial Banks. They also sincerely appreciate efficient and loyal services rendered by the Employees of the Company at all levels throughout during the year.

Registered Office:	For and on behalf ofBoard of Directors
207(A) Mewar Industrial Area
RoadNo.l 1, Madri,
Udaipur 313 003 (Raj.)	Sandeep Bapna	B.H. Bapna
Udaipur, the 28th May 2016	Director	Managing Director
	DIN-00594608	DIN-00594590