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Your Directors have pleasure in presenting their 31st Annual Report along with the Audited Accounts for the financial year ended 31st March, 2017.
FINANCIAL RESULTS :
The financial results for the year under review are summarized below for your perusal: (Rs. in Lakhs)
|Particulars||Financial Year Ended 31st March, 2017||Financial Year Ended 31st March, 2016|
|Expenditure other than Interest and Depreciation||3525.55||3327.07|
|Interest and Finance charges||346.44||351.46|
|Profit before Tax||53.42||63.93|
|Provision for Tax including deferred & Earlier Year taxes||19.86||1.19|
|Profit after Tax||33.56||62.74|
REVIEW OF OPERATIONS
The gross revenue of the company during the year stands at Rs. 4167.29 Lacs as against Rs. 4005.07 Lacs in the previous year. The profit before tax during the year stands at Rs. 53.42 Lacs as against Rs. 63.93 Lacs. The profit after tax during the year is Rs. 33.56 Lacs as against Rs 62.74 Lacs in the previous year.
The paid up equity capital as on March 31, 2017 was Rs.749.03 Lakhs. During the year under review the company has not issued shares with differential voting rights nor granted stock options nor sweat equity.
In order to plough back profits for future requirements of the company your Directors do not recommend any dividend for the year ended March 31, 2017.
LONG TERM AND SHORT TERM BORROWINGS
During the year under review, your Company has both long term and short term borrowings, aggregating to Rs. 1649.66 Lacs.
The 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.
Cash and cash equivalents as at March 31, 2017 was Rs. 187.91 lakhs. The company continues to focus on judicious management of its working capital, Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.
All the insurable interests of your Company including inventories, buildings, plant and machinery are adequately insured.
The Equity Shares of the Company are listed on the Bombay Stock Exchange and Calcutta Stock Exchange.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The company has not given any loans or made any investments covered under the provisions of section 186 of the Companies Act, 2013. As on date there is no Corporate Guarantee existed in the books of the Company.
During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The members at its Meeting held on September 30, 2014, had appointed Mr. Kailash Chandra Mehra, Mr. Bijoya Kumar Behra and Mr. Pramod Kumar Hari as Independent Directors of the Company for a period of five years and not liable to retire by rotation.
Mr. Inderjeet Singh Wadhwa, Chairman Managing Director, Mr. Sanjay Katyal, Chief Financial Officer and Mrs. Kavita Rani, Company Secretary are the Key Managerial Persons (KMPs) of the Company as per the provisions of the Act.
Mrs. Neelam Wadhwa, who retire by rotation at the forthcoming Annual General Meeting and being eligible, offers themselves for reappointment and your Board of Directors recommend for the same.
All the directors of the Company have confirmed that they are not disqualified from being appointed as director in terms of Section 164 of the Companies Act, 2013.
The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulations").
The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.
The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.
The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.
The Board has, on the recommendation of the Appointment & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.
During the year four Board Meetings and four Audit Committee 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. Companys policy on directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director etc. is provided in Corporate Governance Report.
DIRECTORS RESPONSIBILITY STATEMENT
In compliance with the accounting and financial reporting requirements under section 134 (3) (c) and 134 (5) of the Companies Act 2013, in respect of financial statements, your directors state and confirm that: (a) in the preparation of the annual accounts, the applicable accounting standards 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 reason able 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, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.
(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.
PARTICULARS OF EMPLOYEES
The Information as per Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report as "Annexure A".
Information as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 : NIL
The term of our Auditor M/s Anuj Garg & Co., Chartered Accountant, New Delh is expiring in this AGM hence Audit Committee has recommended the Board to appoint Rakesh Varshney & Associates, Chartered Accountants, New Delhi, as statutory Auditors of the Company.
The Company has already received a certificate from M/s Rakesh Varshney & Associates, Chartered Accountant stating that their appointment, if made will be within the limits specified in section 224(1B) of Companies Act 1956.
The Board recommends appointing of Rakesh Varshney & Associates, Chartered Accountants, New Delhi, as the Statutory Auditors of the Company in place of M/s Anuj Garg & Co., Chartered Accountants to hold office of the Auditors from the conclusion of this Annual General Meeting till the conclusion of the 36th Annual General Meeting of the Company to be held in 2022 to examine and audit the accounts of the Company at such remuneration as may be mutually agreed between the Board of Directors of the Company and the Auditors subject to the ratification by the members in every Annual General Meeting of the Company.
STATUTORY AUDITORS REPORT
The report of the Statutory Auditors along with notes to Schedules is enclosed to this report. The observations made in the Auditors Report are self-explanatory and therefore do not call for any further comments.
The Auditors Report does not contain any qualification, reservation or adverse remark.
Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed M/s Pramod Kothari & Co., a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company.
SECRETARIAL AUDITORS REPORT
As required under section 204 (1) of the Companies Act, 2013 the Company has obtained a Secretarial Audit Report for the Financial Year 2016-17. The Secretarial Audit Report is annexed herewith as "Annexure B". There are no qualifications or observations or other remarks of the Secretarial Auditors in the Report issued by them for the financial year 2016-17 which call for any explanation from the Board of Directors.
SIGNIFICANT OR MATERIAL ORDERS
There were no significant and material orders passed by the regulators or courts or tribunals, which would impact the going concern status and the Companys operations in future.
There were no material changes and commitments affecting the financial position of the Company between the end of financial year and the date of the Report.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business and that the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in form AOC-2 is not required. Further, there are no material related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee and Board for approval. The transactions entered into pursuant to the approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on quarterly basis.
The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website. None of the Directors has any pecuniary relationship on transactions vis-a-vis the Company.
The Company does not have any subsidiary.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Internal Audit plays a key role in providing an assurance to the Board of Directors with respect to the Company having adequate Internal Control Systems. The Internal Control Systems provide, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Companys assets. The details about the adequacy of Internal Financial Controls are provided in the Management Discussion and Analysis Report.
CODE OF CONDUCT
Your Company has adopted a Code of Conduct for members of the Board and the Senior Management. The Code aims at ensuring consistent standards of conduct and ethical business practices across the Company.
Your Company has received confirmations from all concerned regarding their adherence to the said Code.
As per the SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015, the Managing Director of the Company confirmed compliance with the Code by all members of the Board and the Senior Management.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
As per Sec. 177(9) of the Companies Act, 2013, applicable Rules and the SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015, the company has established a vigil mechanism (whistle blower policy) for their directors and employees to report their genuine concerns. The vigil mechanism provide for adequate safeguards against victimization of persons who avail of the vigil mechanism and also provide for direct access to the Chairperson of the Audit Committee in accordance with the Companies Act, 2013, applicable rules and SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.
All Board Directors and the designated employees have confirmed compliance with the Code.
RISK MANAGEMENT POLICY
The Company has formulated a Risk Assessment & Management Policy. The details of the Risk Management are covered in the Corporate Governance Report.
PREVENTION OF SEXUAL HARASSMENT POLICY
The Company has in place a Prevention of Sexual Harassment policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressel) Act, 2013. An Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year 2016 - 17, no complaints were received by the Company related to sexual harassment.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure C".
CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION ANALYSIS
Your Company follows principles of effective Corporate Governance. The endeavor of your Company is not only to comply with regulatory requirements but also to practice Corporate Governance principles that lay a strong emphasis on integrity transparency and overall accountability.
A separate Section on Management Discussion & Analysis and Corporate Governance is included in the Annual Report. A certificate from the Practicing Company Secretary of your Company regarding compliance with Corporate Governance norms stipulated in SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015 is also annexed to the report on Corporate Governance.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information in accordance with the provisions of section 134(3)(m) of the Companies Act, 2013, along with rules regarding the conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed to this report. (Annexure "D")
Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the Banks, Government Authorities, Customers, and shareholders during the year. Your directors also wish to take on record their deep sense of appreciation for the committed services of the employees at all levels, which has made your company successful in the business.
The statements forming part of the Directors Report may contain certain forward looking remarks within the meaning of applicable securities laws and regulations. Many factors could cause the actual results, performances or achievements of the Company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward looking statements.
|For and on behalf of the Board of Directors|
|Place : New Delhi||(Inderjeet Singh Wadhwa)|
|Dated : 14th August, 2017||Chairman & Managing Director|
ANNEXURE A FORMING PART OF DIRECTORS REPORT.
The ratio of the remuneration of each director to the median employees remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:
|1.||The ratio of remuneration of each Director to median remuneration of employees for the financial year||Mr. Inderjeet Singh Wadhwa : 24.07 X|
|Mrs. Neelam Wadwa : 15.13 X|
|2.||The Percentage increase in remuneration of each director, CFO, CS in the financial year||Except for salary increase of 6.70% in case of CFO and 8.05% in case of CS there was no increase made in the remuneration of any director during the financial year 2016-17.|
|3.||The Percentage increase in the median remuneration of employees in the financial year||The median remuneration of the employees in financial year 2016- 17 was decreased by 28.63 %.|
|4.||The numbers of permanent employees on the rolls of Company||175 as on March 31, 2017|
|5.||The explanation on the relationship between average increase in remuneration and company performance||The increase in remuneration is linked to the performance of the Company as a whole, the concerned division, the employees and other factors like industry trends and economic environment.|
|6.||Comparison of the remuneration of the key ManagerialPerson against the performance of the Company||As per the Companys policy of rewarding the employees, including Key Managerial Personnel, the increase in remuneration and variable pay is based on an individual performance rating and business unit performance and the bench mark study is also factored. Considering the performance of the KMPs in the year, they were appropriately compensated.|
|7.||Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current FY and previous FY and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer.||The market capitalization as on March 31, 2017, was Rs. 5.78 crore and Rs. 4.71 crore as on March 31, 2016. Price Earnings ratio of the Company was 17.13 times as at March 31, 2017 and was 7.49 times as at March 31, 2016. No Public offer was made by the company after the Initial Public Offer dated 11th February, 1993.|
|8.||Average percentile increase already made in the salaries of employees other than the 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; The average percentile increase in the remuneration of employees compared to increase in remuneration of Key Managerial Personnel is in line with bench mark study and the performance of the Company over a period of time. There is no exceptional increase in the Managerial Remuneration.||The average percentile increase in the remuneration of employees compared to increase in remuneration of Key Managerial Personnel is in line with bench mark study and the performance of the Company over a period of time. There is no exceptional increase in the Managerial Remuneration.|
|9.||Comparison of the each remuneration of the Key ManagerialPersonnel against the performance of the Company||Remuneration of Key Managerial Personnel is in line with the bench mark study and performance of the Company.|
|10.||The key parameters for any variable component of remuneration availed by the directors||Depends on the performance parameters set for key managerial personnel as approved by the Compensation Committee of the Board.|
|11.||The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year||Nil|
|12.||Affirmation that the remuneration is as per the remuneration policy of the Company||We confirm.|
ANNEXURE D FORMING PART OF DIRECTORS REPORT.
Information in accordance with the provisions of section 134(3)(m) of the Companies Act, 2013 read with Rules and forming part of the directors report.
|A) Conservation of energy:-|
|1. Energy conservation measures taken:||The Company has installed Energy efficient- automatic shuttle less looms (imported). However efforts are being made to conserve and save energy wherever required.|
|2. Additional Investment and proposals, if any, being implemented for reduction of consumption of energy:||N.A.|
|Impact of the measures at (1) and (2) Above for reduction of energy consumption and consequent impact on the cost of production of goods:||Continuously monitoring the energy consumed at processing plant at Barhi enabled the Company to set benchmarks for different machines which resulted in significant benefits in terms of lower cost of energy and other utilities.|
|Total Energy consumption and per unit of Production:||As per Form A|
|B) Technology Absorption:-||As per Form B|
|C) Foreign Exchange Earnings and Outgo:-|
|The foreign exchange earning/outgo during the year are as under:||(Rs./Lacs)|
|Particulars||Current Year||Previous Year|
|Foreign Exchange Earnings:||2634.23||2377.18|
|Foreign Exchange Outgo:||142.06||136.58|
Disclosure of particulars with respect to conservation of energy, power and fuel consumption:
|Particulars||Year ended 31.03.2017||Year ended 31.03.2016|
|Total Amounts (Rs. In Lacs)||115.33||133.25|
|(b) Own Generation|
|Through Diesel Generator (units)||21769||39344|
|Unit per ltr of diesel oil Costs/unit (Rs.)||27.16||16.16|
Disclosure of Particulars with respect to technology absorption research and Development (R&D):
|1.||Specific areas in which R&D Carried out by the Company:||Innovative fabrics designs and new products development.|
|2.||Benefits derived as a result of the above R&D.||Increase in acceptability of new designs.|
|3.||Future plan of action||Continue to introduce latest fabrics designs and patterns based on domestic and international market feedback.|
|4.||Expenditure on R&D|
|d. Total R&D expenditure as a percentage of total sales||NIL|
|Technology absorption, adoption and innovation:|
|1.||Efforts, in brief, made towards technology absorption, adaptation and innovation.||NIL|
|2.||Benefits derived as a result of efforts e.g. product improvement, cost reduction, product development, import substitution, etc.||NIL|
|3.||In case of improved technology imported during the last 5 years reckoned from the beginning of the financial year||NIL|