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The Management of the Company is pleased to present its Report on Industry scenario including Companys performance during the financial year 2016-17.
Industry Structure and Developments
Indias textiles sector is one of the oldest industries in Indian economy dating back several centuries. Even today, textiles sector is one of the largest contributors to Indias exports with approximately 15 per cent of total exports. Indias share in global textiles and apparel is more than 5%. Textile contributes 14% of industrial production, 4% of GDP. Indian Textile Industry is supported by abundant availablity of raw materials such as cotton, wool, silk, jute and manmade fibers The textiles industry is labour intensive and is one of the largest employers The textile industry employs about 40 million workers and 60 million indirectly. The textile industry has two broad segments. First, the unorganised sector consists of handloom, handicrafts and sericulture, which are operated on a small scale and through traditional tools and methods. The second is the organised sector consisting of spinning, apparel, garments and technical textile segment which apply modern machinery and techniques such as economies of scale.
India accounts for 18% of worlds spindles and 9% of worlds rotors. Further the presence of entire value chain from production of fibers to the yarn, fabric and apparel gives edge to Indian Textiles in global scenario.
Opportunities and Threats
The Indian Textile industry is supported by rich resources of raw materials availability in india. It is one of the largest producers of cotton in the world and is well placed in manufacturing of fibres like polyester, silk, viscose etc. It is rich in availability of highly trained manpower and has a huge advantage due to lower wage rates. Because of low labor rates the manufacturing cost in textile automatically comes down. India is highly competitive in spinning sector and has presence in almost all processes of the value chain. Indian garment industry is very diverse in size, manufacturing facility, type of apparel produced, quantity and quality of output, cost, and requirement for fabric etc. It comprises suppliers of ready-made garments for both, domestic or Exports markets. The Chinas slow down in textiles provides a good opportunity to India. However, low cost countries like Bangladesh, Sri Lanka, Vietnam etc. are providing tough competition to India.
Segment-wise or product-wise performance
The overall business of the Company divided into two categories: one is traditional textile business which include yarn, knitted fabric and knitted garment business and second is technical textile business which include nonwoven fabric and its converted products like wet and dry wipes. The companies performance in both traditional textiles and technical textiles have improved during current year.
Risks and Concerns
The following may be considered as a risk and concerns for the Indian textile industry: Competition from low cost countries. High power cost.
Labour advantage gradually diminishing.
Low demand in International market. Low competitiveness in man-made fibres.
Internal Control System and their adequacy
The company has Internal Control System commensurate with the size, scale and complexity of its operations. The framework has been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets from unauthorized use, executing transaction with proper authorization and ensuring compliance with corporate policies. The controls, based on the prevailing business conditions and processes have been tested during the year and no reportable material weakness in the design or effectiveness was observed. The Company uses ERP platform to keep the Internal Control System framework robust and our Information Management Policy govern the platforms. The system, standard operating procedures and control are implemented by the executive leadership team and are reviewed by the internal audit team whose findings and recommendations are placed before the Audit Committee.
The scope and authority of the Internal Audit function is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Audit Function Report To The Chairman of the Audit Committee. The Internal Audit team develop an annual audit plan based on the risk profile of the business activities. The Internal Audit plan is approved by the Audit Committee, which also reviews compliance to the plan. The Internal Audit team monitors and evaluates the efficiency and adequacy of internal control system in the Company, its compliance with operating system, accounting procedures and policies at all location of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action(s) in their respective area(s) and thereby strengthenthecontrol.Significantaudit observations and corrective action(s) thereon are presented to the Audit Committee.
The Indian textile industry has a significant presence in the Indian economy as well as in to the Indian economy is manifested in terms of its contribution to the industrial production, employment generation and foreign exchange earnings. Company is optimistic that textile industry has good prospect in future.
Financial performance with respect to operational performance.
The same is referred to Audited Financial Statement which is forming part of the Annual Report of 2016-17.
Human Resources / Industrial Relations
Over the years, there has been a paradigm shift in the approach adopted by Employee Relations through different initiatives in various capacities. We drive sustainable growth and have been instrumental in bringing in thought leadership in building strong employee relations. Our Company is known for developing future leaders and having the best people practices. This coupled with the ability to attract the best talent, provide a competitive edge to the organisation. The Company had 2144 employee on its payroll on March 31, 2017.
Certain statement in the "Management Discussion and Analysis" section may be forword looking and are stated as required by applicable law and regulations. Unforseen factors may affect the actual result, which could be different from what the Management envisage in terms of fututre performance and outlook.
ANNEXURE- B NOMINATION AND REMUNERATION POLICY
1. INTRODUCTION AND OBJECTIVE
Pursuant to the provisions of Section 178 of the Companies Act, 2013 read with rules made there under and Clause 49 (IV) of the Listing Agreement, the Company has constituted Nomination and Remuneration Committee (herein after referred to as "Committee") which formulated a Nomination and Remuneration Policy to ensure that the Board and top management is appropriately constituted to meet its fiduciary obligations to stakeholders, to identify persons who are qualified management and/or as Key Managerial Personnel (KMP) of the Company in accordance with the criterias laid down, recommend to the Board the appointment, removal, remuneration of the Directors, Senior Management and KMP and evaluation of every Directors performance, in line with the provisions of the Companies Act, 2013 and rules prescribed therein and as per the Listing Agreement with Stock Exchange(s), as amended from time to time and/or such other statutory notification, amendment or modification, as may be applicable.
2. APPLICABILITY AND EFFECTIVE DATE
The Policy shall be applicable to:
1. The Board of Directors of the Company
2. KMP of the Company
3. Senior Management of the Company
4. Such other person(s) as may be prescribed by the law time being in force This policy shall be effective from May 02, 2014.
3. CRITERIA FOR IDENTIFICATION AND REMOVAL OF DIRECTORS, KEY MANAGERIAL PERSONNEL (KMPs) AND SENIOR MANAGEMENT PERSONNEL (SMPs)
Criteria for Identification:
1. The Committee shall identify and determine the integrity, qualification, expertise and experience of the person for appointment as Director, KMPs or SMPs and recommend to the Board his / her appointment.
2. The criteria for determining independence of an Independent Director and qualification of a Director shall be governed by the Companies Act, 2013 and rules made there under.
3. A person should possess requisite qualification, expertise and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether the qualification, expertise and experience possessed by a candidate are adequate for the concerned proposed position.
4. The HR policy of the Company shall be applicable to KMPs and SMPs.
5. The minimum and maximum age limit of persons shall be governed by HR policy of the Company and all applicable laws for the time being in force and may be relaxed or extended subject to compliance of applicable provisions of law / rule / regulations.
Criteria for Removal:
The Committee may recommend to the Board for:
1. removal of any Director, who is disqualified, under Companies Act, 2013 and rules made there under or due to any other reason recorded in writing. 2. removal of any KMPs / SMPs, who is disqualified due to any reason recorded in writing.
4. CRITERIA FOR EVALUATION OF DIRECTORS PERFORMANCE
The Board / Committee shall carry out need based evaluation of performance of every Director at least once in a year and Board / Committee, if required, may engage the services of any outside agency for evaluation process and cost of the same shall be borne by the Company.
For evaluation of performance of Non Executive Directors, the following criteria shall also be considered:???attendance of Director at Board and Committee meetings;???participation during discussions; and???expression of independent views; For evaluation of performance of Executive Directors, the following criteria shall also be considered:???performance in their respective area and its growth;???contribution towards growth of the business;???providing solutions for critical situation, if any; and???other notable achievements;
5. POLICY ON REMUNERATION
Remuneration to Directors:
1. The Non Executive Directors including Independent Directors shall be paid sitting fee as may be decided by the Board from time to time for attending meetings of Board and Committees thereof subject to ceiling limit as provided in Companies Act, 2013 and rules made there under. The out of pocket expenses incurred by Directors to attend the meetings shall be reimbursed. The Non Executive Directors including Independent Directors may also be paid commission in accordance with provisions of the Companies Act, 2013 and rules made there under.
2. The Executive Directors including Managing Director(s) shall be paid remuneration as recommended by Nomination and Remuneration Committee considering their qualification, experience and market condition and if such remuneration exceeds the prescribed limits under the Companies Act, 2013 and rules made there under, it shall be approved by the prescribed authorities. The remuneration payable to any one Executive Directorshallnotexceedfive profitsof the company and if therepercent thenet is more than one such Executive Director shall not exceed ten percent of the net profits of the company which shall be calculated in manner as provided in section 198 of the Companies Act, 2013. In case of no profits or inadequate profits the remuneration shall be paid in accordance with schedule V of the Companies Act, 2013.
Remuneration to KMPs / SMPs:
The KMPs / SMPs shall be paid remuneration in accordance with their term of appointment and such remuneration shall be based on total cost to company (CTC) which may include a balance between fixed and incentive pay.
The above remuneration shall be subject to annual increments which will be based on his / her performance as per annual appraisal of KMPs / SMPs in accordance with HR policy of the Company.
Any subsequent amendment/modification in the Companies Act, 2013 and rules made thereunder, listing agreement and/or other applicable laws in this regard of this Policy.
The above Nomination and Remuneration Policy was approved and adopted by Board of Directors at their Meeting held on May 2, 2014
ANNEXURE - C Form No. AOC 2 (Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8 (2) of the Companies (Accounts) Rules, 2014) Form for disclosure of particulars of contracts / arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto
|1. Details of contracts or arrangements or transactions not at arms length basis|
|(a) Name(s) of the related party and nature of relationship||Shri Yash Jaipuria|
|Shri Yash Jaipuria is son of Shri Shishir Jaipuria, Managing|
|Director of the Company and brother of Shri Saket Jaipuria,|
|Executive Director of the Company.|
|(b) Nature of contracts / arrangements / transactions||Appointment of Executive Officer of the Company|
|(c) Duration of the contracts / arrangements / transactions||3 years w.e.f. 1st January, 2018.|
|(d) Salient terms of the contracts or arrangements or transactions including the value, if any||Basic Salary 1,50,000/- per month with annual increment of|
|12,500/-, Increment will fall due on 1st January, 2019|
|(e) Justification for entering into such contracts or arrangements or transactions||The Board considered the re-appointment of Shri Yash Jaipuria as Executive Officer on the basis of his past performance in the Company. The Company was benefited from his expertise knowledge and management skill. Therefore, it was decided to re-appoint Shri Yash Jaipuria as Executive Officer of the company for further 3 years w.e.f. 1st January, 2018.|
|(f) Date(s) of approval by the Board||12th May, 2017|
|(g) Amount paid as advances, if any;||Nil|
|(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188||Not Applicable, however, it is proposed to be approved by the members at the AGM on 5th August, 2017.|
|2. Details of material contracts or arrangement or transactions at arms length basis|
|(a) Name(s) of the related party and nature of relationship|
|(b) Nature of contracts / arrangements / transactions|
|(c) Duration of the contracts / arrangements / transactions||N I L|
|(d) Salient terms of the contracts or arrangements or transactions including the value, if any:|
|(e) Date(s) of approval by the Board, if any:|
|(f) Amount paid as advances, if any:|
For & on behalf of the Board of Directors
SHISHIR JAIPURIA CHAIRMAN & MANAGING DIRECTOR
|Date||May 12, 2017|