DIRECTORS' REPORT Dear Shareholders, Your Directors have pleasure in presenting the 30th Annual Report and Audited Accounts of the Company for the 12 months period ended 31st March 2015 (01/04/2014 to 31/03/2015). OPERATION: During the 12 months period, April 2014 to March 2015 under review, your Company recorded a turnover of Rs 74.12 crores compared to Rs 69.47 crores during the previous period of 12 months. The last 12 months period witnessed economic recession in all the countries especially in the developed countries where our products are widely exported. The regular activities of the Company during this period resulted in a Profit of Rs 203.31 lacs as against loss of Rs 73.29 lacs last year. Your company is 100% EOU facing various constraints like wide fluctuation in polymer (our R.M.) prices, steep increase in ocean freight at regular intervals, RBI/Govt. policy etc. There is no support or incentive from Govt. for increasing exports. Inspite of all odds the working result of your company is encouraging. Your company is not having banking facilities which also restricts flexibility. The future outlook for the Company is encouraging. REFERENCE UNDER SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT 1985:- Pursuant to an Order dated 18/1/2007 of the Hon'ble Bench of BIFR, the Company was declared as a sick industry and IDBI was appointed as the Operating Agency. A draft Rehabilitation Scheme has been prepared and submitted. Under the Scheme One Time Settlement of Dues with financial institutions and bankers have been envisaged. Accordingly the Company has settled and paid all its dues of IDBI, Corporation Bank and BOI Mutual Fund and the Administrator of the specified undertaking of UTI, the BHF Bank, UTI (MF) and Canara Bank. The Company is hopeful that Draft Rehabilitation Scheme will be approved by the BIFR soon, which when implemented will result in profitable revival of the Company. DIVIDEND: Owing to huge carried forward loss, your Directors do not recommend any dividend. FIXED DEPOSITS: Your Company has not accepted any fixed deposits from the Public under chapter V of the Companies Act, 2013 during the period under review. ENVIRONMENTAL PROTECTION AND INSURANCE: Top priority continues to be given to environmental protection for all the units of the Company by keeping emission levels to the minimum possible. Adequate Insurance cover has been taken for properties of the Company including Buildings, Plant & Machineries, Stocks and other assets. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO : The Company constantly takes effective steps to attain energy conservation. The Company does not employ any foreign technology which needs absorption or adaptation. The Company is the leading manufacturer and exporter of Spun Bond Polypropylene Nonwoven Fabrics & products thereof. The Company has earned foreign exchange of Rs. 4088.71 lacs during the year, and incurred expenditure of Rs.3310.20 lacs in foreign exchange. SEGMENT REPORTING UNDER ACCOUNTING STANDARDS 17: Your Company's main business is "Polymer Processing" and all other activities of the company revolve around this main business. As such there are no separate reportable segments within the Company and hence, the segment wise reporting as defined in Accounting Standards 17 is not applicable to the Company. CORPORATE GOVERNANCE: Your Company has always been conducting its business with due compliance of laws, rules, regulations and with sound internal control systems and procedures. The Company has obtaineda Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated in the Listing Agreement with the Stock Exchanges. This is annexed to the Directors Report. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION (including criteria for determining qualification, positive attributes, independence of a Director, policy relating to remuneration for Directors, Key Managerial Personnel and other employees) Policy on Directors' Appointment Policy on Directors' appointment is to follow the criteria as laid down under the Companies Act, 2013 and the Listing Agreement with Stock Exchange and good corporate practices. Emphasis is given to persons from diverse fields or professions. Policy on Remuneration Guiding Policy on remuneration of Directors, Key Managerial Personnel and employees of the Company is that - • Remuneration to unionized workmen is based on the periodical settlement with the workmen union. • Remuneration to Key Managerial Personnel, Senior Executives, Managers, Staff and Workmen (non Unionised) is industry driven in which it is operating taking into account the performance leverage and factors such as to attract and retain quality talent. • For Directors, it is based on the shareholders resolutions, provisions of the Companies Act, 2013 and Rules framed therein, circulars and guidelines issued by Central Government and other authorities from time to time. ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE, ITS COMMITTEES AND INDIVIDUAL DIRECTORS The Board of Directors of the Company has initiated and put in place evaluation of its own performance, its committees and individual directors. The results of the evaluation is satisfactory and adequate and meets the requirement of the Company. DIRECTORS AND KEY MANAGERIAL PERSONNEL: In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. G. Ravindran and Mr. Bhavesh Sheth, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for reappointment. Your Directors recommend that re-election of Mr. G. Ravindran and Mr. Bhavesh Sheth will be in the interest of the Company. During the year under review, Your Board of Directors has appointed Mrs. Soniya P. Sheth as Additional Director w.e.f. 30th March, 2015 and she shall hold office upto the date of the ensuing Annual General Meeting. The Company has received a notice in writing from a member proposing her candidature for appointment as a Director (Non Executive and Non- Independent) to comply the provisions of the Act and Listing requirement of Woman Director on the Board. Mr. P. S Krishnan on completion of his terms of appointment ceased to be a Director of the Company. Mr. P. S. Krishnan, Director liable to retirement by rotation, whose term expired on 31st July, 2015 did not offer himself for re-appointment and accordingly he was not re-appointed as a Director of the Company. He was the Executive Director of the Company since August 1999 and the Board records its appreciation of his long and valuable services rendered to the Company. During the year Mr. D. V. Naik resigned from the office of Director on 30th July, 2015. The Board records its appreciation of his long and valuable services rendered to the Company. The vacancy so caused on the Board of the Company were not filled up. During the year under review, Your Board of Directors has re-appointed Mr. Pravin V. Sheth as Chairman and Managing Director of the Company subject to approval of members at the ensuing Annual General Meeting. In terms of the Articles of Association of the Company, Mr. C. A. Rege, Mr. Bhadresh Shah and Mr. Gopalji M. Rana, Directors retire at the ensuing Annual General Meeting. The Company has received requisite notices in writing from members proposing Mr. C. A. Rege, Mr. Bhadresh Shah and Mr. Gopalji M. Rana, for appointment as Independent Directors. The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchange. During the year under review, Your Board of Directors has also appointed Mr. Abdullah Ebrahim as Chief Financial Officer of the Company w.e.f. 1st December, 2014. DIRECTORS' RESPONSIBILITY STATEMENT : Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed: ? That in the preparation of the accounts for the financial period ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures ; ? That the Directors have 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 end of the financial period and of the profit or loss of the Company for the period under review; ? That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; ? That the Directors have prepared the annual accounts for the financial period ended 31st March, 2015 on a 'going concern' basis. ? The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and ? The Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. NUMBER OF MEETINGS OF THE BOARD: Seven meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance in the Annual Report. DETAILS OF COMMITTEE OF DIRECTORS: Composition of Audit Committee of Directors, Nomination and Remuneration Committee of Directors and Stakeholders Relationship/ Grievance Committee of Directors, Number of meetings held of each Committee during the financial year 2014-15 and meetings attended by each member of the Committee as required under the Companies Act, 2013 are provided in Corporate Governance Report forming part of the report. All the recommendations made by the Audit Committee were accepted by the Board. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTY : There is no transaction with Related Party which requires disclosure under Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED: Particulars of Loans given, investments made, guarantees given and securities provided, if any, along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement forming part of this annual report. RISK MANAGEMENT: During the year, your Directors have constituted a Risk Management Committee which has been entrusted with the responsibility to assist the board in (a) Overseeing and approving the Company's risk management framework; and (b) Overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. A Group Risk Management Policy was reviewed and approved by the Committee. The Company manages, monitors and reports on the principle risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company's management systems, organisational structures, processes, standards, code of conduct and behaviors that governs how the Group conducts the business of the Company and manages associated risks. VIGIL MECHANISM: The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Task Force or the Chairman of the Audit Committee. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at the link: CORPORATE SOCIAL RESPONSIBILITY : The Company has already constituted Corporate Social Responsibility Committee. As per Section 135 of the Companies Act, 2013, the Company needs to spend 2% of Average net profit of last three years on CSR activities. The Average net profit of last three years of Company is negative therefore your Company need not require to spend any amount on CSR Activity. EXTRACT OF ANNUAL RETURN : Extract of Annual Return of the Company is annexed herewith as Annexure II to this Report. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES : In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules should be provided in the Annual Reports. None of the Company's employees were covered by the disclosure requirement. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report as Annexure I. Having regard to the provisions of the first proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is available on the Company's website. DEPOSITORY SYSTEM : Electronic trading of the Company's Equity Shares has been made compulsory by the Securities & Exchange Board of India (SEBI) from 30th October, 2000. As on 31st March, 2015, about 86.27% share holding representing 94,83,574 Equity Shares of the Company have been dematerialized. Your Company has executed agreements with both NSDL and CDSL for demat of its shares. AUDITORS AND AUDITORS' REPORT : The retiring Auditor, M/s. A.V. Jobanputra & Co., Chartered Accountant, Mumbai, are eligible for re-appointment and have indicated their willingness to act as such. In terms of Section 139 of the Companies Act, 2013, their appointment needs to be confirmed and their remuneration has to be fixed. The company has received letter from auditor to the effect that his re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for reappointment. The Company has received intimation from statutory auditor M/s. P. M. Turakhia & Associates, Chartered Accountants (Registration No. 111086W), about their unwillingness for re-appointment as statutory auditor of the Company for the coming Financial Year at ensuing AGM due to regulatory requirement. In terms of Sec.139(2) of the Companies Act, 2013, No auditor shall be appointed for more than two terms of five consecutive years. Further provided that every company existing on or before the commencement of this Act which is required to comply with provision of this sub-section shall comply with this requirement within three years from the date of commencement of this Act. M/s. P. M. Turakhia & Associates, Chartered Accountants (Registration No. 111086W) have already completed the above mentioned tenure hence shown their unwillingness to continue as statutory auditor for the coming financial year. Since the Company has M/s A. V. Jobanputra & Company Chartered Accountant (Registration No. 104314W) as statutory Auditors, it does not require to fill vacancy caused by other Auditors M/s P. M. Turakhia & Associates. The notes on financial statement referred to in the Auditors' Report are self explanatory and therefore do not call for any further explanation. The Auditor's Report does not contain any qualification, reservation or adverse remark. SECRETARIAL AUDITOR : The Board has appointed M/s. Sarita Lakhotiya & Associates, Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31,2015 is annexed herewith and forming part of this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. GENERAL : Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Issue of equity shares with differential rights as to dividend, voting or otherwise. 2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme. 3. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries. 4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. REGULATORY STATEMENT: In conformity with the provisions of clause 32 of the Listing Agreements) the Cash Flow Statement for the year ended 31.03.2015 is annexed to the Accounts. ACKNOWLEDGEMENT Yours Directors place on record their deep appreciation of the continued support received from shareholders and bankers. For and on behalf of the Board PRAVIN V. SHETH Chairman & Managing Director Registered Office: Air Port Road, Kadaiya, Nani Daman, Daman (U.T.) 396 210 CIN: L25209DD1985PLC004694 e-mail:fiberweb@fiberwebindia.com Place: Daman Date: 30th July, 2015 |