Minaxi Textiles Ltd Directors Report.

To,

The Members,

Minaxi Textiles Ltd

Your directors have pleasure in presenting herewith their 24th Annual Report together with the Audited Statements of Accounts for the period ended on 31st March, 2019.

FINANCIAL RESULTS :

Particulars Current year Ended on Previous year Ended on
31/03/2019 31/03/2018
Rs Rs
Revenue from Operations 44,37,59,628 54,73,44,624
Other Income 9,71,752 16,79,920
Income related to earlier years 0 0
Total Expenditure 44,31,33,230 53,32,06,135
Profit Before Tax 15,98,150 1,58,18,409
Less : Current Tax 1,986,729 67,71,970
: Deferred Tax (20,02,091) 21,32,552
: Income Tax pertaining to earlier years 0 0
Profit after Tax (Transfer to General Reserve) 1,613,512 6,913,887

DIVIDEND :

Your directors do not recommend any dividend for the financial year ended on 31st March, 2019 and decided to plug in the profit in the business.

OPERATING AND FINANCIAL PERFORMANCE, INTERNAL CONTROL :

During the year under report, the company has achieved a gross turnover of Rs. 4437.59 Lacs has resulted in the net profit of Rs. 16.13 Lacs. In view of overall subdued market conditions, our company has tried their best to perform well during the year under review. Lower operating profit is mainly due to increased cost of raw material resulting into increased manufacturing cost.

The company has in place an established internal control system designed to ensure proper recording of financial and operational information and compliance of various internal controls.

CHANGE IN NATURE OF BUSINESS, IF ANY :

There is no change in the nature of the business of the company during the year under review.

ORDER OF COURTS ETC., IF ANY :

There were no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and companys operations in future.

MATERIAL CHANGES AND COMMITMENTS, IF ANY :

There were no material changes and commitments affecting the financial position of the company occurring between March 31, 2019 and the date of this report of the directors.

INFORMATION ABOUT SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANY :

The company has no subsidiaries or associate companies therefore disclosures in this regards are not provided in this report.

TRANSFER TO RESERVES IN TERMS OF SECTION 134(3)(j) OF THE COMPANIES ACT, 2013 :

Your company has earned profit of ‘16.13 Lacs and Comprehensive income of ‘4.54 Lac which has been transferred to Profit and Loss Account. For the financial year ended on 31st March, 2019, the company is not going to carry any amount to general reserve account.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no unclaimed and unpaid Dividend, the provisions of Section 125 of the Companies Act, 2013 do not apply.

CORPORATE SOCIAL RESPONSIBILITY (CSR) :

(Criteria prescribed under section 135 is not attracted)

Every Company is required to constitute / formulate CSR Committee if it gets attracted in one of the criteria prescribed in Section 135. According to Section 135 of the Companies Act, 2013, every Company having Net Worth of Rs.500 Crore or more, or Turnover of Rs.1000 Crore or more, or Net Profit of Rs.5 crore or more during any financial year shall constitute a Corporate Social Responsibility Committee and should undertake Corporate Social Responsibility as prescribed in Schedule VII.

None of the above criteria was applicable to the company for the financial year 2018-2019 and hence the company was not required to constitute CSR Committee.

FINANCE :

The Company is at present enjoying secured financial assistance in the form of working capital facilities and term loan from Bank of India, Main Branch, Bhadra, Ahmedabad. During the year under review, the company regularly paid the principal and interest to the Bank. The company has not committed any default in repayment of any of its debts (including public deposits) or debentures or interest payable thereon during the preceding financial year.

PUBLIC DEPOSIT :

The Company has neither accepted nor invited any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year under review.

CONSERVATION OF ENERGY :

The information relating to conservation of Energy as required under section 134(3)(m) of the Companies Act, 2013 read with the Rule 8 of the Companies (Accounts) Rules, 2014 is given by way of annexure attached hereto which forms part of this report. (Annexure – I)

CONSERVATION OF TECHNOLOGY ABSORPTION :

The information relating to conservation of Technology, Absorption as required under section 134(3)(m) of the Companies Act, 2013 read with the Rule 8 of the Companies (Accounts) Rules, 2014 is given by way of annexure attached hereto which forms part of this report. (Annexure – I)

CONSERVATION OF FOREIGN EXCHANGE EARNINGS / OUTGO :

The information relating to conservation of Foreign Exchange Earning / Outgo as required under section 134(3)(m) of the Companies Act, 2013 read with the Rule 8 of the Companies (Accounts) Rules, 2014 is given by way of annexure attached hereto which forms part of this report. (Annexure – I)

PARTICULARS OF EMPLOYEES :

The prescribed particulars of Employees required under section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached hereto which forms part of this report. (Annexure – II)

During the year under review none of the top ten employees of the company was in receipt of remuneration in excess of Rupees One Crore and Two Lac Rupees, if employed through out the year or in receipt of remuneration exceeding Rupees Eight Lac Fifty Thousand p.m., if employed for part of the financial year, and hence the disclosure under section 197(12) read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable.

CORPORATE GOVERNANCE : (Certain SEBI Listing Regulations are not applicable to the company)

The compliance with the Corporate Governance provisions as specified in the Regulations 17 to 27 and clauses (b) to (i) of sub-regulation(2) of Regulation 46 and paras C,D and E of Schedule V of SEBI (Listing Regulations), 2015, are not applicable to the companies having Paid up Share Capital not exceeding Rs.10 Crores and Net Worth not exceeding Rs.25 Crore, as on the last day of previous year. According to these regulations your company is not mandatorily required to comply with the provisions of these regulations, for the time being as the Paid up Share Capital of the company is not exceeding Rs.10 Crores and the Net Worth is not exceeding Rs.25 Crores, as on the last day of the previous year, however, the company has made all possible efforts to comply with the provisions of these regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the provisions of the Companies Act, 2013, during the year under review.

In order to avail the exemption to comply with the provisions of Regulation 27(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), read with Regulation 15(2) of Chapter IV of Listing Regulations, the company had submitted the Certificate for Non- Applicability of Corporate Governance Report to the BSE and hence, Corporate Governance Report is not forming part of this Annual Report. As per the BSE Circular No. LIST/COMP/12/2019-20 dtd.14/05/ 2019 on submission of Certificate for Non-Applicability of Corporate Governance Report, the company is not required to submit any other documents or disclosure for claiming exemption for Annual Secretarial Compliance Certificate.

BOARD OF DIRECTORS :

The Company has a very balanced composition of Board of Directors. As on date, the Company has Ten (10) directors with an Executive Chairman on its Board. Out of these 4 (Four),(40%) whole time / executive directors and 1 (One) (10%) Promoter and non-executive and 5 (Five), (50%) non-executive / independent directors. All Non-Executive & Independent Directors actively participate in the Board and Committee Meetings which is a great value addition in the decision making process.

The maximum tenure of the Independent Directors is in compliance with the Companies Act, 2013. All the Independent Directors have confirmed that they meet the criteria as mentioned under Section 149 of the Companies Act, 2013.

In accordance with provisions of Section 152(6)(a) of the Companies Act, 2013, Shri Bharatbhai P. Patel and Smt. Manjulaben Patel retires by rotation and being eligible offers themselves for re-appointment.

Board Evaluation and Criteria :

Pursuant to the provisions of the Companies Act, 2013, a structured questionnaire was prepared after taking into consideration the various aspects of the Boards functioning, composition of the Board and its committees. The Board has carried out an annual performance evaluation of its own performance, of the directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and Stake holder Relationship Committees. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairperson and the Non-Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process.

Remuneration Policy :

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The policy of the Company on directors appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under Section 178(3) of the Companies Act, 2013, is available on our website, at https://www.minaxitextiles.com/pdf/Corporate%20Policies%20and%20CodesPolicy%20on%20remuneration%20of%20Directors%20KMP%20and%20Senior%20Employees.pdfWe affirm that the remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

Board Meetings :

Regular meetings of the Board are held inter-alia, to review the quarterly results of the Company. Additional Board meetings are convened to discuss and decide on various business policies, strategies and other businesses.

During the FY 2018-19, the Board met Eight (8) times i.e. on 15th May, 2018, 09th July, 2018, 18th July, 2018, 13th August, 2018, 06th November, 2018, 19th November, 2018, 12th February, 2019, and 30th March, 2019. The Company has held Board Meeting at least one meeting every quarter and the maximum time gap between any two meetings was not more than 120 days.

The agenda and the papers for consideration at the Board meeting are circulated to the Directors in advance before the meeting. Adequate information is circulated as part of the Board papers and is also made available at the Board meeting to enable the Board to take informed decisions. Where it is not practicable to attach supporting/relevant document(s) to the Agenda, the same are tabled at the meeting and specific reference to this is made in the Agenda.

Independent Directors Meeting

A Separate meeting of Independent Directors held on 12th February, 2019 without the attendance of Non-Independent Directors and members of the Management. In the said meeting, Independent Directors reviewed the followings :

a) Performance evaluation of Non Independent Directors and Board of Directors as a whole;

b) Performance evaluation of the Chairperson of the Company taking into account the views of executive directors and nonexecutive directors;

c) Evaluation of the quality, quantity and timelines of flow of information between the Management and Board of Directors for effective and reasonable performance of their duties.

The Board of Directors expressed their satisfaction with the evaluation process.

Declaration of Independence from Independent Directors :

The Independent Directors have submitted the declaration of their Independence, as required pursuant to Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of independence as provided in sub-section (6) of that section. The Independent Directors have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties.

COMMITTEES :

Your Company has several Committees which have been established as part of the best Corporate Governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has following Committees of the Board :

1. Audit Committee,

2. Nomination and Remuneration committee,

3. Stakeholders and Relationship Committee and

4. Internal Complaints Committee.

Reconstitution Of Audit Committee :

The Board of directors of the company at its meeting held on 12th August, 2015 has reconstituted an Audit Committee, in line with Section 177 of the Companies Act, 2013, comprising four Directors viz. Shri. Jasvant K. Patel, Chairman (having financial and accounting knowledge), Shri. Vasudevbhai L. Patel, Shri. Ghanshyambhai C. Patel and Shri. Bharatbhai P. Patel.

The Committee periodically discussed the Financial Reporting process, reviewed the Financial Statements, and discussed the quality of the applied accounting principles and significant judgment that affected the Companys Financial Statements. Apart from presenting the audited accounts to the members of the Board, the Audit Committee recommended the appointment of the statutory auditors, secretarial auditor and internal auditor, subject to the Boards approval. The audit Committee reviewed with adequacy of internal control systems with the management, statutory and internal auditors.

The Committee met 4 (Four) times during the year 2018-2019. The dates on which the Audit Committee meetings were held are 15/05/2018, 13/08/2018, 06/11/2018 and 12/02/2019. The maximum time gap between any two meetings was not more than 120 days. Members of the Audit Committee have requisite financial and management expertise. Shri. Jasvant K. Patel has, being a Chairman of the Audit Committee, attended the last Annual General Meeting held on 28th September, 2018.

Attendance of each Member of Audit Committee meetings held during the year ended on 31st March, 2019 :

Name of Directors Category Status / Designation No. of Meeting attended
Shri. Jasvant K. Patel Non-executive / Independent Chairman 4
Shri. Vasudevbhai L. Patel Non-executive / Independent Member 4
Shri. Ghanshyambhai C. Patel Non-executive / Independent Member 4
Shri Bharatbhai P. Patel Managing Director Member 3

Re-Constitution of Nomination and Remuneration Committee (NRC) :

Pursuant to the provisions of Section 178 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014, every listed company and prescribed class of companies, shall constitute Nomination and Remuneration Committee (NRC) of the Board consisting of 3 or more non-executive directors out of which not less than shall be independent director.

In view of the above provision of law, the Board of Directors at its meeting held on 30th May, 2014 has constituted NRC committee and Re-constituted the same vide its meeting held on 12th August, 2015 which was again reconstituted on 12th November, 2016. It was further reconstituted on 13/08/2018 consisting of Shri Vasudevbhai L. Patel, Chairman of the Committee/ Independent Director, Shri. Bhavikkumar Patel, Shri Jasvant Patel, Independent Directors and Shri Dineshkumar P. Patel, Chairperson and Whole Time Director of the company, as member of the committee.

The Committee met 5 (Five) times during the year 2018-2019. The dates on which the Nomination and Remuneration Committee meetings were held are 15/05/2018, 13/08/2018 06/11/2018, 19/11/2018 AND 12/02/2019.

The Board vide its meeting held on 13.08.2018 has revised the terms of reference. The powers (terms of reference) delegated to the committee are as under :

A. To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the board of directors a policy relating to, the remuneration of the directors, key managerial personnel and other employees;

B. To formulate the criteria for evaluation of performance of independent directors and the board of directors;

C. To devise a policy on diversity of board of directors;

D. To identify persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down and recommend to the Board of directors their appointment and removal and shall specify the manner for effective evaluation of performance of Board, its committees and individual directors to be carried out either by the Board, by the Nomination and Remuneration Committee or by an independent external agency and review its implementation and compliance .

E. To extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.

While formulating the policy the committee shall ensure that –

a. The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully.

b. Relationship of remuneration to performance is clear and meets appropriate performance benchmarks, and

c. Remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the company and its goals.

F. To ensure that the remuneration policy formulated by the committee be disclosed in the Boards Report.

Attendance of each Member of Nomination and Remuneration Committee meetings held during the year ended on 31st March, 2019 :

Name of Directors Category Status / Designation No. of Meeting attended
Shri. Dharmendra N. Patel* Non-executive / Independent Chairman Resign 1
w.e.f. 31.07.2018
Shri. Bhavikkumar Patel Non-executive / Independent Member 5
Shri. Jasvant K. Patel Non-executive / Independent Member 5
Shri Dineshkumar P. Patel Chairman and Whole Time Director Member 5
Shri. Vasudevbhai L. Patel** Chairman and Non-executive / Independent Chairman w.e.f. 13.08.2018 3

* Shri Dharmendra N. Patel has resigned w.e.f. 31.07.2018

** Shri Vasudevbhai L. Patel has been appointed as Chairman of the Committee in the Board Meeting dtd.13.08.2018.

Reconstitution of Stakeholders Relationship Committee

The Board has re-constituted the Shareholders and Investors Grievance Committee vide resolution passed in its Meeting held on 29/07/2011. According to Section 177, the company is required to constitute a Stakeholders Relationship Committee consisting of a Chairman who shall be a non executive director and such other members as may be decided by the Board.

In view of the above provision, the company has altered the nomenclature of the Shareholders and Investors Grievance Committee to Stakeholders Relationship Committee. Further, the membership of the company has also changed in light of the above provisions vide its Board Meeting held on 30/05/2014. It was further reconstituted on 13/08/2018. The Stake holders Relationship committee consists of Shri. Bhavikkumar Patel, Chairman of the Committee/ Independent Director, Shri Bharatbhai P. Patel, Shri Dineshkumar P. Patel and Shri Nirmal B. Patel, as members of the committee.

CS Priyanka M. Patel has been designated as the Compliance Officer. As required by Regulation 46(2)(j) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has designated the below cited email ID of the grievance redressal division / compliance officer exclusively for the purpose of registering complaints by investors. E-Mail ID : minaxitx@yahoo.com

The total number of complaints received and replied to the satisfaction of shareholders during the year under review was NIL and outstanding complaints as on 31st March, 2019 was NIL. None of the request for transfers, dematerialization and re-materialization was pending for approval as on 31st March, 2019.

During the year the Stakeholders Relationship Committee were held on 15/05/2018, 13/08/2018, 06/11/2018, 12/02/2019 and 30/03/2019.

Attendance of each Member of Stakeholder Relationship Committee meetings held during the year ended on 31st March, 2019 :

Name of Directors Category Status / Designation No. of Meeting attended
Shri. Dharmendra N. Patel* Non-executive / Independent Chairman 1
Shri. Bharatbhai P. Patel Executive and Managing Director Member 1
Shri. Nirmal B. Patel Executive and Whole Time Director Member 5
Shri Dineshkumar P. Patel Chairman and Whole Time Director Member 5
Shri. Bhavikkumar R. Patel Non-executive / Independent Chairman 3

* Shri Dharmendra N. Patel has resigned w.e.f. 31.07.2018

*Shri. Bhavikkumar R. Patel has been appointed as Chairman vide Board Meeting dtd.13.08.18.

Disclosure under the Sexual Harrassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 :

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. The company has constituted Internal Complaints Committee (ICC) vide its Board Meeting held on 11th February, 2015 under the chairmanship of Shri Bharatbhai Patel, Managing Director to redress complaints received regarding sexual harassment. Shri Nirmal Patel and Smt. Manjulaben Patel are the other members of the committee. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year.

• No. of complaints received. - NIL

• No. of complaints disposed off – Not Applicable.

CODE OF INDEPENDENT DIRECTORS – SCHEDULE IV :

The Board has considered Code of Independent Directors as prescribed in Schedule IV of the Companies Act, 2013. The code is a guide to professional conduct for independent directors adherence to these standards by independent directors and fulfillment of their responsibility in a professional and faithful manner will promote confidence of the investment community and regulators.

The broad items for code for independent directors are :

(i) Guidelines for Professional conduct.

(ii) Role and Functions.

(iii) Duties

(iv) Manner and process of appointment.

(v) Re-appointment on the basis of report of performance evaluation.

(vi) Resignation or Removal.

(vii) Atleast one Separate meeting of Independent Directors in a year without attendance of non independent directors or members of management.

(viii) Evaluation mechanism of Independent Directors by entire Board of Directors.

The Terms and conditions for appointment of Independent Directors is posted on the website of the company. The Code of Independent Director as per Schedule IV of the Companies Act, 2013 is forming part of the Code of conduct of the company.

VIGIL MECHANISM / WHISTLE BLOWER POLICY :

The Company has adopted a Whistle Blower Policy pursuant to the requirements of the Companies Act, 2013 and the SEBI Regulations, 2015 to deal with unethical behaviour, actual or suspected fraud or violation of the Codes of conduct or policy. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and also provide for direct access to the Chairperson of the Audit Committee in exceptional cases. The details of the Policy is also posted on the website of the Company.

CODE OF PRACTICES AND PROCEDURE FOR FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION (UPSI) :

The Company has amended the policy in its Board Meeting held on 30.03.2019. The Board of Directors of Company shall inquiry in case of leak of Unpublished Price Sensitive Information(UPSI) or suspected leak of Unpublished Price Sensitive Information(UPSI). The company will inform simultaneously to SEBI of such leaks, inquiries and results of such inquiries. The details of the Policy is also posted on the website of the Company https://www.minaxitextiles.com/investor-relations/corporate-policies-and-codes/.

CEO / MD AND CFO CERTIFICATION :

The Managing Director and Chief Financial Officer also give quarterly certification on financial results while placing the financial results before the Board in terms of Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

FAMILIARIZATION PROGRAMME :

The Board members of Minaxi Textiles Limited (Independent and Non-Independent) are offered every opportunity to familiarize themselves with the Company, its management and its operations and above all the Industry perspective and issues. They are made to interact with senior management personnel and are given all the documents sought by them for enabling a good understanding of the Company, its various operations and the industry of which it is a part. The note on Familiarization Programme has been posted on the website of the company.

The independent Directors are provided with necessary documents, brochures, reports and internal policies to enable them to familiarize with the Companys procedures and practices. The Company undertook various steps to make the Independent Directors have full understanding about the Company.

STATEMENT ON DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

There is a continuous process for identifying, evaluating and managing significant risks as faced through a risk management process designed to identify the key risks facing each business.

The role of insurance and other measures used in managing risks is also reviewed. Risks would include significant weakening in demand from core-end markets, end market cyclicality, inflation certainties, energy cost and shortage of raw materials, maintenance and protection of leading technologies and adverse regulatory developments. During the year under review no major risks were noticed. The Company has laid down procedures to inform Board members about the risk assessment and minimization procedures. Audit Committee and Board Members are reviewing and updating the said procedures and plans periodically.

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT :

Managements Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) read with Schedule V(B) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of the Annual Report. (Annexure – III)

AUDITORS :

Statutory Auditor :

Pursuant to the provisions of Section 139 and 141 of the Companies Act, 2013, M/s Kewlani & Associates., Chartered Accountants, Ahmedabad (FRN 133928W) were appointed as Statutory Auditors of the Company to hold office upto 27th Annual General Meeting to be held for the financial year 2020-2021. The Auditors of the Company M/s. Kewlani & Associates, Chartered Accountants has resigned as auditors of the Company for the financial year 2019-2020 and onwards vide their letter dated 01/06/2019, on account of contemplating / probable merger with other accounting firm for restructuring of Professional Services, and therefore, they are unable to carry out the Statutory Audit of the company for the financial year 2019-2020 and onwards.

The Board of Directors vide resolution passed at its meeting on 10/06/2019 has accepted and approved the resignation of M/s. Kewlani & Associates, Chartered Accountants, from the post of auditors for the financial year 2019-2020 and onwards w.e.f. 01/06/2019. The company has appointed M/s. Manghani and Co., Chartered Accountants, Ahmedabad (FRN - 022372C), subject to the approval of the members in their general meeting pursuant to Section 139(8)(i) of the Companies Act, 2013. The members at Extra Ordinary General Meeting held on 12th July, 2019 had approved the appointment of M/s. Manghani and Co., Chartered Accountants, Ahmedabad (FRN - 022372C), to hold office until the conclusion of the next annual general meeting of the company held after their appointment.

Auditors Report :

The comments in the Auditors Report with Notes on Accounts referred to the Auditors Report are self explanatory and, therefore do not call for any further explanation.

Secretarial Auditor :

The Board has considered the recommendation of Audit Committee regarding appointment of Secretarial Auditor and necessity of Secretarial Audit Report as mandate for every listed company in Section 204 of the Act, and has appointed M/s. Ashok P. Pathak & Co., Company Secretaries, Ahmedabad as Secretarial Auditor for the financial year 2019 -2020. The Company has received consent from M/s. Ashok P. Pathak & Co., Company Secretaries to act as the auditor for conducting audit of the secretarial records for the financial year ending 31st March, 2020.

Secretarial Audit Report :

The Secretarial Audit Report for the financial year ended on 31st March, 2019 in Form MR-3 is annexed herein and forming part of the Board Report (Annexure IV).

The explanation on comments / observation(s) in the Secretarial Audit Report -

1. The company had put all efforts to appoint a qualified company secretary and ensure to make the appointment during the current year in Compliance with section 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment of Managerial Personnel) Rules, 2014. The company had appointed qualified Company Secretary as a part of Key Managerial Personnel and Compliance Officer w.e.f. 01.12.2018.

2. As per shareholding pattern submitted to stock exchange under Regulation 31(1) of the SEBI (LODR) Regulations, 2015 for the quarter ended on 31.03.2019, one persons holding 17000 equity shares (being 0.0034% of the total paid up Share Capital of the company) under the category promoter(s) were not in demat form.

The company was continuously pursuing the matter with Mr. Sujalbhai Kanubhai Patel, a Person in promoter category holding 17000 equity shares in physical mode (being 0.034% of the total paid up share capital), who is not associated with the company since long, to get his shares dematerialized at the earliest to enable the company to comply with the provisions of Sub–Regulation (2) of Regulation 31 of SEBI (LODR) Regulations,2015. The said shareholder had made an application for duplicate share certificate for this 17000 equity shares and assured the company to demat the said shares as soon as possible on receipt of Duplicate Share Certificate. The company has also received the request from Mr. Sujalbhai K. Patel on 07/05/2019 for reclassification of his shares intimation of which has been made to the BSE Ltd. on 08/05/2019. The company vide its Board Meeting held on 27.05.2019 has analyzed, considered and approved the Request of Reclassification of 95581 Equity Shares of Rs.1/- each (being 0.19% of the total share capital of the company) of Mr. Sujal Kanubhai Patel, from Promoter Category to Public Category under Regulation 31A of SEBI (LODR) Regulations, 2018, subject to the approval of the Shareholders in forthcoming Annual General Meeting and approval of BSE Ltd. within the specified time period.

3. No Dividend has been declared by the company from the Financial Year 2007-2008 and onwards. The last dividend was declared by the company in the Annual General Meeting held on 29th September, 2007 held for the financial year 2006-2007, thereafter no final or interim dividend was declared. Unclaimed dividend for the years prior to and including the financial year 2006-07 had already been transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government, as applicable and filed prescribed e-Form INV1. There was no amount of unclaimed / unpaid dividend lying with the company as on coming into effect of the newly enacted the Companies Act, 2013. There were no shareholders who have not claimed the dividends for the last seven years as no dividend declared from the financial year from 2008-09 (being the cut-off date) onwards whose shares are to be transferred to IEPF after due date of 31/10/2017.

Internal Auditor :

The Board has considered the recommendation of Audit Committee regarding appointment and necessity of Internal Auditor as mandate for every listed company in Section 138 of the Act, and has appointed M/s. Archit B. Shah & Associates, Chartered Accountants, Ahmedabad as Internal Auditor for the financial year 2019 -2020. The Internal Auditors reports and their findings on the internal audit, has been reviewed by the Audit Committee on a quarterly basis. The scope of internal audit is also reviewed and approved by the Audit Committee.

EXTRACT OF ANNUAL RETURN :

The extracts of Annual Return pursuant to the provisions of sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is annexed herewith as (Annexure V) to this Report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The company has not made any Loans and investments, and have not given any guarantees or provided any securities covered under section 186 of the Companies Act, 2013.

LISTING :

The equity shares of the company are listed in the Bombay Stock Exchange Limited which has the connectivity in most of the cities across the country.

DEMATERIALISATION OF EQUITY SHARES :

As per direction of the SEBI and the Bombay Stock Exchange Limited, the shares of the Company are under compulsory demat form. The Company has established connectivity with both the Depositories i.e. National Securities Depository Limited [NSDL] and Central Depository Services India Limited [CDSL] and the demat activation number allotted to the Company is ISIN : INE952C01028. Presently shares are held in electronic and physical mode (96.94% of shares in demat, 3.06% in physical mode.)

INDUSTRIAL RELATIONS :

The directors are happy to note that the industrial relations continued to remain cordial during the year. The directors express their appreciation towards the workers, staffs and executive staffs for their coordination, co-operation and hope for a continued harmonious relations.

DIRECTORS RESPONSIBILITY STATEMENT :

Pursuant to the requirement under Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 with respect to Directors Responsibilities Statement, it is hereby confirmed :

(i) that in the preparation of the Annual Financial Statement for the Financial Year ended 31st March, 2019, the applicable accounting standards had been followed along with proper explanation relating to material departures; if any;

(ii) that the Director had 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 Financial Year and of the Profit or Loss of the Company for the year under review;

(iii) that the Directors had 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;

(iv) that the Directors had prepared the accounts for the Financial Year ended 31st March, 2019, on a going concern basis.

(v) that the internal financial controls laid down by the company are adequate and were operating effectively.

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

RELATED PARTY TRANSACTIONS :

The company has not entered into any contract / agreement with Related Parties and have no transactions with Related Parties during the year under review. There are no materially significant related party transactions i.e. transactions of material nature, with promoters, the directors or the management, their subsidiaries or relatives etc., that may have potential conflicts with the interests of the company at large in the financial year 2018-2019. During the year under review the Company revised / reviewed its policy on dealing with Materiality of Related Party Transactions.

GENERAL DISCLOSURE :

i) System Driven Disclosures in Securities Market.

The company has appointed Central Depository Services Limited (CDSL) as Designated Depository for the purpose of System Driven Disclosures in Securities Market pursuant to Circular No. SEBI/HO/CFD/DCR1/CIR/P/2018/85 dated May 28, 2018.

ii) Foreign Investment Monitoring

The company has provided information of shares held by FPI and NRIs and other foreign investors (Repatriable) to CDSL pursuant to SEBI Circular No. IMD/FPIC/CIR/P/2018/61 dated April 05, 2018.

iii) Issue of Equity Shares with differential rights as to dividend, voting or otherwise.

During the year 2018-2019, the Company has not issued any of Equity Shares with differential rights as to dividend, voting or otherwise.

iv) Issue of shares (including sweat equity shares) to employees of the Company under any scheme and ESOS.

During the year, the Company has not issued any shares under Employee Stock Option Scheme.

v) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

There are no significant and material orders passed by the Regulators or Courts or Tribunals which could impact the going concern status and the Companys future operations.

vi) Disclosure of Secretarial Standards

Secretarial Standards issued by the Institute of Company Secretaries of India as applicable to the Company were followed and complied with during 2018-19. The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

vii) Suspension of Securities of the Company

The securities of the Company have not been suspended from trading in the Bombay Stock Exchange.

viii) Reconciliation of Share Capital Audit

The Reconciliation of Share Capital Audit of the Company prepared in terms of SEBI Circular No. D&CC/FITTC/CIR-16/ 2002 dated December 31, 2002 reconciling the total shares held in both the depositories, viz NSDL and CDSL and in physical form with the total issued / paid-up capital of the Company were placed before the Board of Directors every quarter and also submitted to the Stock Exchange(s) every quarter.

ix) The Company has complied with all the mandatory requirements of the SEBI (LODR) Regulations, 2015 subject to the observations in secretarial audit report.

ACKNOWLEDGMENT :

The Board of Directors place on record sincere gratitude and appreciation for all the employees at all levels for their hard work, cooperation and dedication during the year. The Board conveys its appreciation for its customers, shareholders, suppliers as well as vendors, bankers, business associates, regulatory and government authorities for their continued support.

ANNEXURES FORMING A PART OF THIS REPORT OF THE DIRECTORS :

The Annexure referred to in this Report and other information which are required to be disclosed are annexed herewith and form a part of this Report of the Directors :

Annexure Particulars
I Particulars of Conversion of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
II Particulars of Employees pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Managerial Remuneration) Rules, 2014.
III Management Discussion and Analysis Report
IV Secretarial Audit Report – Form MR -3
V Extract of Annual Report in Form MGT 9

 

Regd. Office :
Plot No. 3311, GIDC, Phase-IV, Chhatral On Behalf of the Board
Taluka Kalol, Dist. Gandhinagar(N.G)-382729 Gujarat For, Minaxi Textiles Ltd
Bharatbhai P. Patel Dineshkumar P. Patel
Managing Director Whole time Director
Date: 27/05/2019 DIN: 00161825 DIN: 02268757