DIRECTORS REPORT Dear Shareholders. Your Directors are pleased to present the 39th Annual Report Of the Company together with its Audited Accounts for the year ended 31st March.2015. Operations & state of affairs The production of yam during 2014-15 has been 320 lac Kgs as against 301 lac Kgs during 2013-14 . The company has increased the own production of wool mixed yarn. It has increased by more than 50% However, production of cotton yam started Curing the year 2013-14 has been discontinued during the year 2014-15. as mis was considered unviable at 12096 spindles The Company has converted these spindles for production of synthetic blended yarn. Your Company has maintained the production of readymade garments at about 33 lac pieces However, the fabric production has been 349 toe meters as against 360 lac meters during 2013-14. Your Company's net income from operations during 2014-15 has been Rs.1225 Crores as against Rs.1212Croree during 2013-14. The profit before interest, depreciation and tax {PBIDT} during 20l4-15 is Rs. 155 Crores as against Rs.181 Crores during 2013-14. Similarly, the profit before depredation and tax (PBDT) has been Rs.74 Crores as against Rs.100 Crores during 2013-14 The post tax net profit of the Company during 2014-15 is at Rs.8.03 Crores as against Rs.26 63 Crores during 2013-14. The basic and diluted EPS for the year 2014-15 works out to Rs.5.06 and Rs. 4.90 respectively as against Rs. 1686 and Rs.16.30 respectively for 2013- 14 During 2014-15 your Company purchased additional equity from Caneman. France in Carreman Fabrics India Limited (now Banswara Global Limited). As such Banswara Global Limited (BGL) became wholly owned subsidiary Company of your Company effective from 12th Augusts 2014. Your Company has charged do precision on fixed assets as per me provisions of Companies Act. 2013. The Company has reassessed the remaining useful life of its plant & machinery and has charged the depreciation accordingly. The Board of Directors of the Company has approved the scheme of amalgamation of Banswara Fabrics Limited {BFL) an Associate Company and Banswara Global United (BGL) a wholly owned subsidiary Company with Banswara Syntax Limited There is no change in the nature of Company’s business during the year as it remains in the business of manufacturing of the textile products. Exports During the year the export turnover of the Company has been Rs.525 Crore as against Rs.605 Crores during 2013-14. The share of export turnover in the net income has reduced from 50% in 2013-14 to 43% during 2014-16. Your Company has started exporting to Japan. Free Trade Agreement of India with Japan is likely to boost up the sale in Japan. During the year under report, the Company's marketing as well as design and development team continued to participate in the international trade fairs, meetings with the customers abroad for regular feedback of market trends, demand etc m the international market Dividend DIVIDEND Your directors are pleased to recommend dividend of Rs. 1/- per equity share (previous year Rs.3/- per share). The Company is paying 3% dividend on preference shares. The total dividend payout on Equity and preference shares for the year will absorb Rs. 1.64 Crores (previous year tax on dividend Rs.0.80 Crores). The Company has transferred unclaimed dividend amount to the investor Education and Protection Fund for dividend declared up to the year 2006-07. Increase in paid-up share capital The Board, in as meeting held on 13th November. 2013. Issued 1600000 warrants to promoters and promoters' group, convertible into an equal number of equity shares, at the price of Rs.41.50 per warrant including premium of Rs.31.50 per share . Out of the warrants issued to the promoters and promoters* group, your directors have converted 170000 warrants into an equal number of Equity Shares during the year 2013-14, On 12th November. 2014. 9.20.000 warrants wore converted into an equal number of Equity Shares As on 31st March, 2015. 5.10.000 warrants were pending tor conversion. These balance warrants were converted into equal number of equity shares on 8th May. 2015. The paid up equity snare capital of the Company increased from Rs.1552.64 lacs as on 31st March. 2014 to Rs.1644.64 lacs as on 31st March, 2015 Cue to conversion of warrants into equity shares.The preferential issue was made as per the SEBI (ICDA) Regulations. 2009 Expansion, diversification and modernization During the year, the Company invested Rs.50.32 Crores for acquisition of fixed assets. As at 31st March. 2015 the capital-work-in progress stood at Rs.10.04 Crores and advances to the capital goods’ suppliers aggregated Rs.1.84 Crores. as against (Rs.8 54 Crores end Rs.4.54 Crores respectively at the beginning of the year. During the year, she Company has added 1 jacket line at its Daman Plant. The total production capacity of the Company as at 31- March 201S for yarn production Rs.151672 ring spindles including 21120 spindles for worsted yam Spinning. 592 Air Jet spindles , 378 shuttle less looms. 34 Air Jet Jacquard looms & stenters with processing capacity of 5 million mtrs. a month and 3.82 lac pieces of garments per month . Subsidiaries, Joint Ventures and Associates In accordance with the General Circular, issued by the Ministry of Corporate Affairs. Government of India. the Balance Sheet. Statement of profit and loss and other documents of the subsidiary J.V. and Associate Company are not being attached with the Balance Sheet of the Company. However. Pursuant to section 128 of the Companies Act 2013. the financial information of the subsidiary Company is disclosed in the Annual Report n compliance with the said circular. The Company will make available the Annual Accounts of the subsidiary Company and the related detailed information to any member of the Company who request for the same The annual accounts of the subsidiary Company will also be Kept open for inspection at the Registered Office of the Company and that of the respective subsidiary Company The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary J.V. and Associate Company Subsidiary Banswara Global Ltd. (BGL) earlier known as Cameman Fabrics India Limited became wholly owned subsidary Company of Banswara Syntex Ltd w e f 12th August. 2014 During the year Banswara Global Ltd. produced 43 32 lac mtrs of Fabric Total turnover of BGL during 2014-15 was Rs. 11.55 lacs and the net profit alter tax was Rs. 34 lacs. Joint Venture Your Company hotels 50% of the paid up share capital in JV Company i.e. Treves Banswara Private Limited The balance 50% share capital is held by Treves S A S France. During the year 2014-15. Treves Barvswara Private Limited produced 2.17 lac mtrs. of Laminated Fabric and 0.71 lac pcs. of Embossed panets and Flex. Tolal turnover of this JV Company during 2014-15 was Rs.622 lacs {previous year Rs.644 Jacs). Associates The Company has an Associate Company namely Banswara Fabrics Ltd (BFL) Your Company holds 37.50% of the paid up share capital of BFL During the year this associate Company proceed 18.23 lac mtrs of Fabric Total turnover of BFL during the year has been Rs.628 lacs and the net profit after tax has been Rs. 35 lacs. Thermal Power Plant The two units of Captive Thermal Power Plant (33 MW) are working satisfactorily. Your Company is consuming coal from domestic sources as well from imports. The power plants availability factor during the year 2014-15 was 98-24% as against 98.09% during 2013-14. Finance During the year 2014-15. to augment the long term resources for meeting the working capital requirements the company requested and obtained working capital term loan of Rs. 7.00Crores from Union Bank of India and Rs.3.50 Crores Irban Bank of Baroda Term Loans of Rs.9.21 Crores from Punjab National Bank Rs.10.38 Crores from Union Bank of India and Rs.3.54 Crores from Bank of Baroda got disbursed for investment in fixed assets The total repayment of term loan made during the year was Rs.53.79 Crores. The Company's bankers have been providing need based increaso(s) in working capital limits after the review of requirements from time to lime Consolidated financial statements In accordance with the Accounting Standard (AS)-21 on Consolidated Financial Statements read with A5-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interest m Joint Ventures and also as per section 129 of the Companies Act. 2013. the audited Consolidated Financial Statements are provided in the Annual Report Contribution to exchequer During the year, your Company contributed Rs. 26.95 Crores to the Government Exchequer by way of Excise Duty. Service Tax. Value Added Tax (VAT). Income Tax. Dividend Distribution Tax and ether payments. Corporate Governance / Management Discussion & Analysis Report As per Clause 49 of the Listing Agreements with the Stock Exchanges, the Company has adopted a Code of Conduct Which is applicable to the members of the Board and senior management. The Company fully complies with the Corporate Governance practices as enunciated in the Listing Agreements Corporate Governance Report and Management Discussion & Analysts Report those are annexed and marked Annexure-I and form part of this report. Fixed Deposits As per the provisions of the Companies Act. 2013 the Company has issued advertisement tor acceptance of fixed deposit from members of the Company, as approved by the shareholders in their meeting held on 22 9.2014. The Company has accepted new deposits during the year amounting to lacs as per the Act of 2013. it was outstanding on 31st March. 2015. During the year. 2014-15. the Company has repaid all the deposits accepted under the then Companies Act. 1956. There has been no default in repayment of deposit or interest thereon and also no deposit is unclaimed or matured but not paid as on 31st March. 2015 The Company has duty complied with the provisions of the Companies (Acceptance of Deposits) Rules. 2014. Corporate social responsibility initiatives As a part of its initiatives under "Corporate Social Responsibility CSR) the Company has formed Corporate Social Responsibility Policy ( CSR Policy) As per the policy the Company has undertaken projects «n the areas of environmental, women and children empowerment and health etc. These projects are largely in accordance with Schedule VII of the Companies Act. 2013. As required under section 134 (3) (o) and Rule 9 of the Compares (Corporate Sooal Responsibility) Rules. 2014 the annual report on CSR activities forming part of the Directors Report is annexed as Annexure II. Risk Management Pursuant to requirement of Clause 49 of the Listing Agreement, the Company has consulted Risk Management Committee The details of the Committee and its scope are set out in the Corporate Governance Report. Internal control system and its adequacy The Company has internal contra: system, commensurate with the size, scale and complexity of its operations. To maintain its objectively and independence the chief Internal Auditors Report to Audit committee of the Board. The internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company its compliances with the operating systems accounting procedures and policies at all locations of the Company and its subsidiaries .Based on the report of the internal auditors the process owners undertake corrective actions in their respective areas and thereby strengthern the controls. Vigil mechanism/whistle blower policy The Company has a Vigil Mechanism named Vigil Mechanism Whistle Blower Policy. The details of the policy is explained in the Corporate Governance Report and also posted on website of the Company. Directors and key managerial personnel As required, under the Companies Act. 2013 and the Listing Agreement with me Stock Exchange the Board of Directors in Its meeting held on 12th November. 2014. have appointed Dr. Vaijayanti Pandit, as an additional Director (Women Director'/on the Board of the Company Dr. Vaijayanti Pandit would hold office up to the date of ensuing Annual General Meeting. The Company has received a Notice in writing from a member along with the deposit of requisite amount under section 160 of the Act proposing her candidature for the office of Director accordingly the Resolution in the Notice to me shareholders is proposed . Shri Rakesh Mehra. Vice Chairman of the Company is liable to retire by rotation pursuant to provisions of the Companies Act. 2013 and Articles of Associate of the Company He would retire by rotation at the enduing AGM and being eligible otters himself for reappointment Based on the recommendation & the Nomination and Remuneration Committee, the Board has Decided to re-appoint him and accordingly an Agenda Item has been proposed in the Notice to the shareholders for their approval . A brief resume and other information required under clause 49 of the listing agreement are included in the Corporate Governance Report. The Board recommend for his re-appointment All Independent Directors have given Declarations that they meet the criteria of independence as laid down under section 149 (6) of the Compares Act. 2013 and Clause 49 of the Listing Agreement . The Company has devised a policy for performance evaluation of independent Directors. Board. Committees and other individual Directors which include criteria for performance evaluation of the non-executive directors and executive directors Shri J.K Jain Sr. Vice President (F & C) & Company Secretary has been appointed as CFO & CS on 13.8.2014 by the Board of Directors of the Company. Board evaluation Pursuant to provisions of the Companies Act. 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as evaluation of the Committees of the Board by sending questionnaires to all the Board and Committee members to evaluate the performance of the Board. Committees and individual Director. Remuneration policy The Board has on the recommendation of the Nomination and Remuneration Committee, framed a policy tor appointment of Directors Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. Related party transactions All related party transactions executed raring the financial year, wore on an Amis Length Bash: and were in ordinary course of business. All related party transactions are placed before the Audit Committee and me Board for approval The approval of the shareholders for 'elated party transaction was also obtained In the Annual General Meeting of the Company held on 22.9.2014 The particulars of the contracts or arrangement enter in to With rented parties retired to in sub section (1) of section 1BB is disclosed m Form AOC 2 as Annexur III. forming part of this report Board meetings Four meetings of the Board of Directors were held during the year i.e. on 24.5.2014. 13.8.2014 12.11.2014 and 13-22015. Frequency and quorum etc at these meetings were in conformity with the provisions of the Companies Act, 2013 Directors' responsibility statement As required under Section 134 (S) of the Companies Act. 2013 with respect to Directors' Responsibility Statement. it is hereby confirmed that: a) In the preparation of me annual accounts, for the year ended March 31. 2015. me applicable Accounting Standards had been followed and there are no material, departures from the same The Notes to the Accounts are self-explanatory. b) The directors have 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 as at 31 March 2015 and of the profit of me Company for the year ended on that date. c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013. for safeguarding the assets or the Company and for preventing and detecting frauds and other irregularities d) The Directors have prepared the annual accounts the Company for the year ended March 31. 2015 on a "going concern” baas e)} The Directors have laid down internal financial controls to be followed by the company and mat such Internal financial controls are adequate and were operating effectively f) The Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively Audit committee In accordance with the requirement of section 177 of the Companies Act. 2013 and Clause -49 of the Listing Agreements with Stock Exchanges, the 8oard has constituted the Audit Committee which comprises 3 (three) Independed Directors viz. Shri P. Kumar (Chairman), Shri Kamal Kishore Kacholia and Dr S.B Agarwal besides Shri Ravindra Kumar Toshniwal Managing Director, as members As required under newly enacted Companies Act 2013, the Board of Directors has redefined the terms of reference of the Audit Committee. The composition, role functions and powers of the Audit Committee are in accordance with the applicable laws and the Listing agreements with the Stock Exchanges and are given in Corporate Governance Report annexed hereto as Annexure I Auditors Statutory Auditor Kalani & company, chartered Accountants jaipur was appointed as statutory Auditors of the Company for 3 years i.e. 2014-15 to 2016-17 by the shareholders in their meeting held on 22.09.2014 subject to ratification of the appointment by the members at every General meeting held thereafter. Accordingly they hold office as the Auditors of the Company until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have furnished a certificate to the effect that their reappointment. They have furnished a certificate to the effect that their re-appointment, if made would fulfill the criteria and the provisions of the Section 139 and 141of the Companies Act2013 read with Companies (Audit and Auditors) Rules 2014. Tax Auditor As per the requirement of section 44AB of the Income Tax Act, 1961 M/s Kalani & Company, chartered Accountants, Jaipur have been appointed as Tax Auditors of the Company for the year 2014-15 it is proposed to re-appoint them for the yer 2015-16 and to fix their remuneration as per the recommendation of Audit Committee. Cost Auditor The Company has re-appointed K.G. Goyal & Company Cost Accountants Jaipur as cost Auditors of the Company for the financial year 2015-16. They have furnished a certificate to the effect that their appointment if made would be in accordance with the provisions of section 148 of the Companies Acat,2013 read with companies (Audit and Auditors) Rules 2014. Secretarial Audit Pursuant to the provisions of section 204 of the companies act 2013 and the companies (appointment andRemuneration of the Managerial Personnel) Rules 2014 the Company has appointed V.M. & Associates a limit of company secretaries in practice to undertake the secretarial audit of the company. The report of the secretarial Audit is annexed herewith as Annexure IV. As regards auditors observations are sell explanatory and do not call for any further comments. On the recommendation of the Audit Committee. The Board of Directors has reappointed V.M. & Associates to carry out secretarial audit for the year 2015-16. Auditors Report As regards the Auditors’ observations the relevant notes in significant Accounting policies. Notes on Accounts and other disclosures are self –explanatory and therefore do not call for any further comments except in the matter of nonpayment of Rs.39.37 lacs towards services Tax and cess thereon. The matters pertaining to service tax refunds taken by the company are under appeal with CESTAT New Delhi and commissioner Appeal jaipur Rajasthan in addition to this non payment of custom duty of Rs. 121.03 lacs the matter is under appeal before CESTAT Ahmedabad and at Mumbai High Court and Rs. 4.84 lacs of income tax, the matter is under appeal with CIT (Appeals) Udaipur. These liabilities will be met , if necessary on final decision of the respective Appellate Authorities. Particulars of loan given investment made guarantee given and security provided Loans, guarantees and investments covered under section 186 of the companies Act 2013. Form part of the notes to the financial statements provided in this Annual Report. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO Information pursuant to the provisions of Section 217(1)(e) of the Companies Act, 1956, in relation to conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed and marked Annexure V, which forms part of this report. DEMATERIALIZATION OF SHARES In pursuance of SEBI /Stock Exchange directions, your Company has offered demat option to its esteemed shareholders so as to enable them to trade the shares in the demat form. In response, 97.71% shares have been converted into demat form up to 31st March, 2015, The stock code number in NSDL and CDSL for equity shares of the Company is ISIN INE629D01012. PARTICULARS OF EMPLOYEES During the year under report, the relations between the Company's management and staff/workers continued to remain cordial. The Directors place on record their deep appreciation of the devoted services of the workers, staff and the executives. The information required pursuant to Section 197 read with Rule. 5 of the Companies (Appointment and Remuneration of managerial personnel} Rules. 2014 in respect of employees of the Company, will be provided upon request. In terms of section 136 of the Art. the report and accounts are being sent to the members and others entitled thereto, excluding the information the employees particulars which is available for inspection by the members at the Registered Office of the Company during business hours on the working days of the Company up to the date of ensuing Annual General Meeting ff any member is interested in obtaining a copy thereof, such member may write to the Company Secretary in this regard Extract of annual return The details forming part of the extract of the annual Return in form MGT 9 is annexed as Annexure VI. ACKNOWLEDGMENTS Your Directors wish to express their sincere appreciation for the guidance, co-operation and assistance extended to the Company by the financial institutions, banks, various Central & State Government Departments, Customers and Suppliers during the year under report. The Directors particularly wish to place on record acknowledge the continuous support and guidance of all the shareholders and, more importantly, the confidence reposed in the Company's management. For and on behalf of the Board R. L. TOSHNIWAL Chairman Place:Mumbai Date: 27th May, 2015 |