Gini Silk Mills Ltd Directors Report.

To,

The Members of GINI SILK MILLS LIMITED

Your Directors have pleasure in presenting their 38th Annual Report on the business and operations of the Company and Audited Statement of Accounts for the year ended 31st March, 2018.

1. FINANCIAL HIGHLIGHTS:

The Boards Report is prepared based on the stand alone financial statements of the Company.

(Rs. in lacs)
Particulars 2017-2018 2016-2017
1. revenue
Net Sales/ Income from operation 3942.55 3911.61
Other Income 170.55 213.23
Total 4113.10 4124.84
2. LESS: EXPENDITURE
Cost of Materials Consumed 1306.15 1595.55
Purchases of Traded Goods 197.17 186.17
(Increase)/ decrease in inventories of finished goods and Stock in Process 116.05 12.32
Employee Benefit Expenses 408.96 368.89
Financial Cost 89.92 148.08
Depreciation and Amortization Expense 97.60 96.80
Other Expenses 1610.31 1412.97
Total 3826.16 3820.78
3. Profit Before Tax 286.94 304.06
4. Provision for Taxation
i) Current Tax 75.88 81.60
ii) Deferred Tax (3.61) 10.23
iii) (Excess)/ Short provisions written back of earlier years - (25.79)
5. Profit After Tax 241.67 238.02
6. Balance carried from previous year 2653.35 2403.08
7. Amount Available for Appropriation 2868.02 2649.13
8. appropriations:
Interim Dividend - -
Proposed Dividend - -
Dividend Distribution Tax 27.96 -
Prior Period Items 5.69 -
Depreciation as per schedule II of Companies Act, 2013 - 4.22
9. Balance carried to Balance Sheet 2834.37 2653.35
Basic/ Diluted Earnings per Equity Shares 3.84 4.32

2. dividend:

We are pleased to announce that the Board of Directors has recommended Re. 0.50/- per Equity Share of Rs. 10/- each (i. e. 5% of face value) aggregating to Rs. 27,96,300 (excluding Dividend Distribution Tax as applicable) for the year ended on March 31, 2018.

3. Reserves:

No amount out of current years profits is transferred to the Reserves and Surplus.

4. OPERATIONS:

Our Revenue from operations during the period under review has increased to Rs. 3942.55 Lacs from Rs. 3911.61 Lacs in the previous year. i. e. a increase of 0.79% in the financial year 2017-18.

During the period under review the profit after tax (PAT) stood at 214.67 Lacs (Previous Year Rs. 238.02 Lacs). There is a decrease of 9.81% in net profit after tax as compared to previous year. The performance for the coming years is expected to improve upon from the last year if right macroeconomic indicators are achieved in future.

5. DIRECTORS RESPONSIBILITY STATEMENT:

The Directors confirm that—

(a) i n the preparation of the Annual Accounts, the applicable Accounting Sandards had been followed along with proper explanation relating to material departures;

(b) the Directors had 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) the Directors had 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 had prepared the Annual Accounts on a going concern basis; and

(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; and

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

6. EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Report in form MGT-9, as required under Section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies( Management and Administration ) Rules, 2014, are included in this Report as Annexure-I and forms an integral part of this report.

7. particulars of contracts or arrangements with related parties

The particulars of every contract or arrangements entered into by the Company with Related Parties referred to in subsection (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto is disclosed in Form No. AOC-2 as Annexure II.

8. DIRECTORS OR Key MANAGERIAL PERSONNEL APPOINTMENTS / RESIGNATIONS DuRING THE Year:

During the year under review there were no changes takes place in the Directors or Key Managerial Personnel Appointments / Resignations.

9. (1) particulars OF EMPLOYEES:

Sr. No. Particulars Remarks
1. The Ratio of the Remuneration of each Director to the median Remuneration of the Employees of the Company for the financial year. a) Mr. Vishwanath Harlalka, Executive Chairman - 09:25:1 b) Mr. Deepak Harlalka, Managing Director - 09:25:1
2. The percentage increase in the Remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year a) Mr. Vishwanath Harlalka- Nil
b) Mr. Deepak Harlalka- Nil
3. The percentage decrease in the median Remuneration of Employees in the financial year 11.66%
Sr. No. Particulars Remarks
4. The number of permanent Employees on the rolls of Company 117
5. Average percentile increase already made in the salaries of Employees other than Managerial personnel in the last financial year and its comparison with the percentile increase in the Managerial Remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the Managerial Remuneration. There has been no increase in the salaries of the Employees other than Managerial personnel in the last financial year.
6. Affirmation that the Remuneration is as per the Remuneration Policy of the Company. It is hereby affirmed that the Remuneration is as per the Remuneration Policy of the Company.

(2) Particulars of Employees drawing Remuneration in excess of limits prescribed under Section 134(3)(q) read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 :

There are no Employees drawing Remuneration exceeding Rupees One Crore and Two Lakhs per annum if employed throughout the financial year or Rupees Eight Lakh and Fifty Thousand per month if employed for part of the financial year or draws Remuneration in excess of Managing Director or Whole time Director or Manager and holds by himself or along with his spouse and dependent children, not less than two percent of the Equity Shares of the Company.

10. NUMBER OF MEETINGS OF BOARD DURING THE YEAR:

Sr. no Particulars No. of meetings held
1. Board meetings Six
2. Audit Committee meetings Five
3. Nomination and Remuneration Committee meeting One
4. Independent Directors Meeting One

11. FORMAL ANNUAL EVALUATION:

Pursuant to the applicable provisions of the Act and the Listing Regulations, the Board has carried out an Annual Evaluation of its own performance and working of its Committees. The Boards functioning was evaluated on various aspects, including inter alia degree of fulfillment of key responsibilities, its structure and composition, establishment and delegation of responsibilities to various Committees. Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management of the Company. Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors, who also reviewed the performance of the Board as a whole.

12. declaration by AN independent director:

Declarations by the Independent Directors, that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 has been received by the Company.

13. REMUNERATION POLICY:

The Board of Directors has framed a policy which lays down a framework in relation to Remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The remuneration policy is also uploaded on the website www.ginitex.com

14. STATUTORY AUDITORS:

At the Annual General Meeting held on August 29, 2017, M/s. Bilimoria Mehta & Co.., Chartered Accountants, (FRN 101490W), Mumbai, were appointed as statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the year 2022.

In accordance with Companies (Amendment) Act 2017, the provision with regard to ratification of appointment of Auditors at every Annual General Meeting prescribed under the first proviso to sub-section (1) of section 139 of the Companies Act, 2013 is omitted from the financial year 2018-19 onwards.

The report given by the auditors on the financial statement of the company is a part of the Annual Report. There has been no qualification, reservation, adverse remarks or disclaimer given by the auditors in their report.

15. SECRETARIAL AUDIT REPORT:

In terms of Section 204 of the Companies Act, 2013 and Rules made there under, M/s. Sandeep Dar and Co., Practicing Company Secretaries have been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditor is enclosed as Annexure III to this report. The report is self-explanatory however the Company has initiated necessary steps to comply with various non-compliances as mentioned under the Secretarial Audit Report.

16. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

The Company has a Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company at www.ginitex.com

17. Composition OF audit committee:

Composition of Audit Committee as on March 31, 2018 as required under section 177(8) of the Companies Act, 2013 read with Regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

1. Mr. Suresh Gaggar - Chairman

2. Mr. Pankajkumar Agarwal - Member

3. Mr. Ruchir Jalan - Member

18. SIGNIFICANT MATERIAL Changes:

There were no material changes and commitments, which adversely affects 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 the report.

19. RISK MANAGEMENT:

The Company is reviewing its Risk perception from time to time taking into accounts overall business environment affecting/ threatening the existence of the Company. Presently management is of the opinion that such existence of risk is minimal.

20. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has in place adequate Internal Financial controls. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

21. DEPOSITS:

During the year under review, the Company has not accepted any Deposits within the meaning of Section 73 of Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.

22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

During the period under review, Company has not given any loans to the parties.

23. CORPORATE GOVERNANCE:

Your Company believes that Corporate Governance is a code of self discipline. In the line with this policy, the Board of Directors strongly believes that it is very important that the Company follows healthy Corporate Governance practices and reports to the shareholders the progress made on the various measures undertaken.

A report on Corporate Governance, along with a certificate from the Statutory Auditors on compliance with Corporate Governance norms forms an integral part of this report.

24. MANAGEMENT DISCUSSION AND ANALYSIS:

I Industry Structure and Developments

Indian Textile industry is one of the largest in the world with large raw material base and manufacturing strength across the value chain. The uniqueness of the Industry lies in its strength both in the hand woven as well as in the capital intensive mill sector. Traditional sectors like handloom, handicrafts and small scale power-loom units are the biggest source of employment for millions of people in rural and urban area.

The Textile industry contributes to 7% industry output in value terms, 2% of Indias GDP and 15% of the countrys export earnings. With over 45 million people employed directly, the Textile industry is one of the largest sources of employment generation in the country.

ii Opportunities and Challenges

1. Shift towards the market of branded ready- made garments is being observed

2. Increase Disposable Income and Purchasing Power of Indian Customer opens New Market.

3. More number of emerging malls and retail industries are providing opportunities to industries segments like handicrafts and apparels

III. Segment-Wise or Product-Wise Performance

In textiles, our product is well very accepted by our customers & we are in the process of increasing our customer portfolio.

IV Outlook

Your Companys future growth will be driven by multiple growth driver. In the textile space, large opportunities in global textile and clothing markets are driving growth for us. Your Company will focus on its core strengths product segments. Its focus on building marketing & distribution foot-prints shall continue with renewed vigor during the coming year. On the whole, we are seeing new growth opportunities in advanced material division and the segment continues to grow at rapid pace.

V Risk and Concerns

The company has risk management framework which enable it to take certain risks to remain competitive and achieve higher growth and at the same time mitigate other risks to maintain sustainable results.

A key factor in determining a Companys capacity to create sustainable value is the risk that the Company is willing to take and its ability to manage them effectively. The Companys Risk Management processes focuses on ensuring that risks are identified on a timely basis and addressed.

Foreseeing the concerns, the Company manages to identify, evaluate, and monitor non-business risks.

VI Internal Control Systems and their Adequacy

The existing internal controls are adequate and commensurate with the nature, size, complexity of the Business and its Processes. During the year the Company has laid down the framework for ensuring adequate internal controls and to ensure its effectiveness, necessary steps were taken by the Company.

VII. Discussion on financial performance with respect to Operational Performance

During the year under review, your company has registered a turnover of 3942.55 Lacs as compared to 3911.61 Lacs in the previous year.

The sales revenue from Processing of Fabric increased from Rs. 1889.72 Lacs to Rs. 2378.69 Lacs during the year under review.

VIII. Material developments in human resources/ industrial relations front, including number of people employed

Your Company believes that its employees are one of the most valuable assets of the Company. The employees are deeply committed to the growth of the Company. With the growing requirements of the Company, Company has taken necessary initiatives to ensure not only the retention of the employees but also their growth and development.

The Company also provides various opportunities to the employees to develop their skills to take up higher responsibilities in the organization. Company also uses various communication channels to seek employees feedback about the overall working environment and the necessary tools and resources they need to perform at their best potential.

25. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Internal Complaints Committee under the Act, for implementation of said policy.

The following is a summary of sexual harassment complaint received or dispose of during the year 2017-18:

• No. of Complaint received: NIL

• No. of Complaint disposed off: NIL.

26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO PURSUANT TO PROVISIONS OF SECTION 134 OF THE COMPANIES ACT, 2013 READ WITH RULE 8 (3) OF COMPANIES (ACCOUNTS) RULES, 2014

A) CONSERVATION OF ENERGY:

(i) The steps taken or impact on conservation of energy - Energy conservation continues to receive priority attention at all levels by regular monitoring of all equipments and devices which consume electricity.

(ii) The steps taken by the Company for utilizing alternate sources of energy - Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.

(ii) The capital investment on energy conservation equipments - Since Company is having adequate equipment; no capital investment on energy conservation equipments is made during the year.

B) TECHNOLOGY ABSORPTION:

(i) The efforts made towards technology absorption - Not Applicable

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution - Not Applicable

(iii) In the case of imported technology (imported during the last three years reckoned from the beginning of the financial year) - Not Applicable.

(a) The details of technology imported - Not Applicable

(b) The year of import - Not Applicable

(c) Whether the technology been fully absorbed - Not Applicable

(d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof - Not Applicable

(iv) The expenditure incurred on Research and Development - At present the Company does not have separate division for carrying out Research and Development work. No expenditure has therefore been earmarked for this activity.

C) FOREIGN EXCHANGE EARNINGS AND OUTGO

There were no foreign exchange earnings and outgo during the year under review.

27. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

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

28. APPRECIATION:

We record our gratitude to the Banks and others for their assistance and co-operation during the year. We also wish to place on record our appreciation for the dedicated services of the employees of the Company. We are equally thankful to our esteemed investors for their co-operation extended to and confidence reposed in the management.

BY ORDER OF THE BOARD
FOR GINI SILK MILLS LIMITED
Vishwanath Harlalka
CHAIRMAN
Registered Office:
413, Tantia Jogani Industrial Estate Premises,
Opp. Kasturba Hospital, J. R. Boricha Marg,
Lower Parel (East), Mumbai-400011
Date: May 28, 2018
Place: Mumbai