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Surat Trade and Mercantile Ltd.
BSE CODE: 530185   |   NSE CODE: NA   |   ISIN CODE : INE936A01025   |   22-Nov-2024 Hrs IST
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March 2015

DIRECTORS' REPORT & MANAGEMENT DISCUSSION AND ANALYSIS 

Dear Shareholders,

Your Directors have the pleasure of presenting the Sixty-ninth Annual Report on the business and operations of the Company, together with the Audited Statements of Accounts for the year ended 31st March, 2015.

Review of Operations 

 Your Company achieved turnover of Rs.127.55 crore as compared to Rs.181.51 crore in the previous year. The decline in turnover was primarily on account of lower capacity utilization, over supply situation in the domestic market and lower demand growth.

Our focus on operational efficiency with better working capital management and better network helped us to remain competitive and improve our EBIDTA.

Profit before interest, depreciation and tax was higher at Rs.5.54 crore as compared to Rs.4.36 crore thereby registering a growth of about 27%. The profit after tax was also higher at Rs.2.56 crore as compared to the profit of Rs.1.16 crore in the previous year.

During the FY 2014-15, your Company faced several challenges. Crude prices saw a sharp decline which triggered reduction in prices of PTA and MEG prices. This resulted in inventory losses. Moreover, demand for polyester was subdued in the domestic as well as global markets. The operating margins were adversely affected owing to oversupply of finished product, more particularly in polyester chips and yarn segments resulting in lower margins and capacity utilization.

The sale of chips was lower at 9034 MT for the year 2014-15 as compared to 13064 MT in the previous year. The total sale of polyester filament yarn (PFY) was lower at 1861 MT as compared to 3429 MT in the previous year.

The overall production of Chips was at 10062 MT during the year 2014-15 as compared to 15363 MT achieved in the previous year. Whereas the production of PFY during the year remained lower at 1682 MT as compared to 3314 MT in the previous year. The Company had to curtail the production during the year due to volatility of raw material prices and to reduce the inventory loss.

Your Company also focused on margin improvement by optimum allocation of its resources through cost reduction at manufacturing level. The operating margins, however, remained under pressure.

The Company during the last quarter of the FY 2014-15 discontinued the manufacturing activity at its Synthetic Fibre Spinning (SFS) plant at Village Vareli, Taluka Palsana, Dist. Surat, which had become unviable due to competitive market conditions

Dividend

In order to strengthen the reserves of the Company, your directors consider it prudent to plough back the profits and not to recommend any dividend for the financial year 2014-15.

Transfer to Reserve

It is not proposed to transfer any amount to reserves out of the profits earned during the financial year 2014-15.

Nature of Business

The Company is engaged in the business of manufacturing polyester chips and differentiated partially oriented yarn (POY). The Company is a regular supplier of bright, cationic, micro denier, and fine denier yarns in the market.

During the year under review, there was no change in the nature of business of the Company.

Share Capital

The Issued, Subscribed and Paid-up equity share capital as on 31st March, 2015 was Rs.2220.64 Lacs. During the year under review, the Company has not issued shares with differential voting rights, nor granted stock options nor sweat equity. As on 31st March, 2015, none of the Directors of the Company holds equity shares in the Company.

Disclosures in respect of voting rights not directly exercised by employees

There are no shares held by trustees for the benefit of employees and hence no disclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.

Directors and Key Managerial Personnel

Pursuant to the provisions of Section 149 of the Companies Act, 2013, which came into effect from 1st April, 2014, Shri Harishchandra Bharucha was appointed as an independent director at the 68th Annual General Meeting of the Company on 23rd July, 2014. The terms and conditions of appointment of Shri Bharucha as an independent director are as per Schedule IV of the Companies Act, 2013. Shri Bharucha has submitted a declaration that he meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and there has been no change in the circumstances which may affect his status as independent director during the year. 

Shri Yogesh C. Papaiya was appointed as the Whole-time Director designated as Executive Director & Chief Financial Officer (CFO) of the Company for a period of 5 (five) years with effect from 11th August, 2014, subject to the approval of the members.

Shri Ketan Jariwala and Smt. Anita Mandrekar were appointed as Additional Directors (Independent) on the Board with effect from 11th August, 2014 and 28th May, 2015 respectively.

The Company has received notice under Section 160 of the Companies Act, 2013 along with the requisite deposit proposing the appointment of Shri Ketan Jariwala and Shri Anita Mandrekar.

The resolutions seeking approval of the Members for the appointment of Shri Yogesh C. Papaiya, Shri Ketan Jariwala and Smt. Anita Mandrekar have been incorporated in the Notice of the ensuing Annual General Meeting of the Company along with brief details about them.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Shri Yogesh C. Papaiya (DIN: 00023985), Director, retires by rotation at the forthcoming Annual General Meeting, and being eligible offers himself for re-appointment.

During the year, the non-executive directors of the Company have no pecuniary relationship of transactions with the Company.

Shri M. R. Momaya, Managing Director, Shri Yogesh C. Papaiya, Wholetime Director and CFO and Ms. Hanisha Arora, Company Secretary and Compliance Officer were designated as "Key Managerial Personnel" of the Company pursuant to Section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Familiarisation programme for Independent Directors

Pursuant to the provisions of Clause 49 of the Listing Agreement, the Company has formulated a programme for familiarizing the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc. through various initiatives. The details of the aforementioned programme is available on the Company's website www.surattextilemillsltd.com .

Declaration by Independent Directors

Declaration given by Independent Directors meeting the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 is received and taken on record.

Finance

Your Company has repaid Secured Rupee Term Loan from banks to the tune of Rs.47.05 Lacs during the year. No fresh Term Loan was availed by the Company during the year.

Corporate Governance

Your Company is fully compliant with the Corporate Governance guidelines, as laid out in Clause 49 of the Listing Agreement. All the Directors (and also the members of the Senior Management) have affirmed in writing their compliance with and adherence to the Code of Conduct adopted by the Company. The details of the Code of Conduct are furnished in the Corporate Governance Report attached as Annexure G to this Report. The statutory auditors of the Company have examined the requirements of Corporate Governance with reference to Clause 49 of the Listing Agreement and have certified the compliance, as required under Clause 49 of the Listing Agreement. The Certificate in this regard is attached to this Report.

Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors of the Company, to the best of their knowledge and ability, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there no material departures;

ii. They 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 the end of the financial year and of the profit of the Company for that period;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Policy on directors' appointment and remuneration

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Director, Senior Management and their remuneration.

The Company does not pay any remuneration to the Non-Executive / Independent Directors of the Company other then sitting fees for attending the meetings of the Board and Committees of the Board. Remuneration to the Whole-time Director is governed by the relevant provisions of the Act and approvals.

The details pertaining to criteria for determining qualifications, positive attributes, independence of a Director, remuneration policy and other related matters have been provided in the Corporate Governance Report. The Company has displayed the remuneration policy on its website www.surattextilemillsltd.com in terms of Clause 49(VIII)(C)(3) of the Listing Agreement.

The Disclosures pursuant to sub-rule (1) of Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are set out in Annexure C and forms part of the Board's Report.

Nomination and Remuneration Committee

A nomination and Remuneration Committee is in existence in accordance with the provisions of sub-section (3) of Section 178 Kindly refer section on Corporate Governance, under the head, 

'Nomination and Remuneration Committee' for matters relating to constitution, meeting, functions of the Committee and the remuneration policy formulated by this Committee.

Audit Committee

An Audit Committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. Kindly refer to the section on Corporate Governance, under the head, Audit Committee' for matters relating to constitution, meetings and functions of the Committee. During the year there were no instances where the Board had not accepted the recommendation of the Audit Committee.

Internal Auditors

Pursuant to the provisions of Section 138 of the Companies Act,2013, the Board of Directors of the Company has appointed M/s Aadil Aibada & Associates, Chartered Accountant as Internal Auditors of the Company, for the financial year 2015-16.

Statutory Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s Natvarlal Vepari & Co., Chartered Accountants, were appointed as the statutory auditors of the Company from the conclusion of the 68th annual general meeting of the Company held on 23rd July, 2014 till the conclusion of the Seventy-one annual general meeting to be held in the year 2017, subject to ratification of their appointment at every annual general meeting.

The appointment of M/s Natvarlal Vepari & Co. Chartered Accountants will be placed before the members at this Annual General Meeting for ratification.

Secretarial Audit

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Shri Kunjal Dalal, Proprietor K. Dalal & Co., Practicing Company Secretaries, Surat to conduct the Secretarial Audit of the Company for the financial year ended 31st March, 2015.

The Secretarial Audit Report (in Form MR-3) is attached as Annexure-D to this Report.

Auditors Report

As regards the comments in the Auditors' Report, the relevant notes to the Accounts are self explanatory and may be treated as information / explanation submitted by the Board as contemplated under provisions of the Companies Act, 2013.

The report of the Statutory Auditor and Secretarial Auditor does not contain any adverse observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

Cost Auditors

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules,

2014, as amended by notifications / circulars issued by the Ministry of Corporate Affairs from time to time and as per the recommendation of the Audit Committee, the Board of Directors at their meeting dated 31st May, 2014, appointed M/s P. M. Nanabhoy & Co., Cost Accountants, as the Cost Auditors of the Company for the Financial Year 2014-15.

In respect of Financial Year 2015-16, the Board, based on the recommendation of the Audit Committee, has approved the appointment of M/s P. M. Nanabhoy & Co., Cost Accountants, as the Cost Auditors of the Company on a remuneration of Rs.60,000. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member's ratification for the remuneration payable to M/s P. M. Nanabhoy & Co., Cost Auditors is included at item No.7 of the Notice convening the Annual General Meeting.

Particulars of Employees and Related disclosure

During the financial year 2014-15, none of the employees of the Company are in receipt of remuneration prescribed in terms of the provision of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014. There were 81 permanent employees as on 31st March, 2015.

Public Deposits

During the year under review, your Company did not accept any deposits in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014. As on April 1, 2014, no amounts were outstanding which were classified 'Deposits' under the applicable provisions of Companies Act, 1956 and hence the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Companies Act, 2013 is not applicable.

Conversation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The Company continued its efforts towards effective utilization of energy for reduction in power consumption. The Company is constantly exploring the use of alternate sources of energy that are commensurate with the scale of present operation and the type of product being manufactured. During the year under review, there was no major capital investment on energy conservation equipment.

Information required pursuant to the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are set out in the Annexure A forming part of this Report.

Adequacy of Internal Financial Control

The Company has in place adequate internal financial controls with reference to financial statements. Periodic audits are undertaken on continuous basis covering all the major operations. Reports of internal auditors are reviewed by management from time to time and desired actions are initiated to strengthen the control and effectiveness of the system. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. 

The Internal Financial Control with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency of such controls.

Risk Management Policy

The Board of Directors of the Company has formed a risk management policy to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for reviewing the risk management plan and ensuring its effectiveness. It regularly analyses and takes corrective actions for managing / mitigating the same. The audit committee has additional oversight in the area of financial risks and controls. Your Company's risk management framework ensures compliance with the provisions of Clause 49 of the Listing Agreement. The details of Risk Management as practiced by the Company forms part of this Report.

Corporate Social Responsibility (CSR) Initiatives

As required under Section 135 of the Companies Act, 2013 the CSR committee comprising Shri Ketan Jariwala, Independent Director as the Chairman of the Committee, Shri Harishchandra Bharucha, Independent Director and Shri Yogesh C. Papaiya, Whole-time Director as its members.

The CSR committee has laid down the policy which includes the activities covered under the Companies (Corporate Social Responsibility Policy) Rules, 2014.

The main focus areas covered in the policy includes Education, Health care, social welfare and environment safety etc. The details of amount spent on CSR activity undertaken during the year by the Company are given in the Annexure B to this Report. The CSR policy of the Company is also hosted on the website of the Company, www.surattextilemillsltd.com.

Particulars of contracts or arrangements with related parties

All transactions entered by the Company with Related Parties during the financial year 2014-15 were in the Ordinary Course of Business and at Arm's Length pricing basis. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a conflict with the interest of the Company at large. All Related Party Transactions are placed on a quarterly basis before the Audit Committee for approval and before the board for consideration and noting. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.

Pursuant to section 134 of the Companies Act, 2013 and Rules made there under, particulars of transactions with related parties as required under section 188(1) of the Companies Act, 2013, read with Rule 8(2) of Companies (Accounts) Rules, 2014 is annexed with this Report in Form AOC-2 as Annexure E Suitable disclosures as required under AS-18 have been made in Note 28 of the Notes to the financial statements.

The policy on related party transactions as approved by the Board is uploaded on the Company's website www.surattextilemillsltd. com . The Company's management ensures total adherence to the approved Policy on Related Party Transactions to establish Arm's Length Basis without any compromise.

Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, Board committee and individual directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49").

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 committee was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committee, effectiveness of committee meetings, etc.

The board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual directors to the Board and committee meetings. In addition, the Chairman of the Board was also evaluated on the key aspects of his role.

The details of the policy on evaluation of Board's performance is available on the Company's website www.surattextilemillsltd.

Meetings of the Board

During the year, 5 Board Meetings and 4 Audit Committee Meetings were convened and held. Directors actively participated in the meetings and contributed valuable inputs on the matters brought before the Board of Directors from time to time.

The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and as per Clause 49 of the Listing Agreement. The details of the meetings are furnished in the Corporate Governance Report.

Independent Directors' Meeting

In compliance with the requirements of Schedule IV of the Companies Act, 2013 and Clause 49(II)(B)(6) of the Listing Agreement a meeting of the Independent Directors was held on 23rd March, 2015, without the participation of the Executive Directors or management personnel. The independent Directors carried out performance evaluation of Non-Independent Directors and the Board of Directors as a whole, performance of Chairman of the Board, the quality, content and timelines of flow of information between the Management and Board, based on the performance Evaluation framework of the Company.

The criteria for performance evaluation have been detailed in the Corporate Governance Report forming part of this report.

Vigil Mechanism / Whistle Blower Policy

Pursuant to Section 1//(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement, the Board of Directors has adopted vigil mechanism in the form of Whistle Blower Policy through which its Directors, Employees and Stakeholders can report their genuine concerns about unethical behaviours, actual or suspected fraud or violation of the Company's code of conduct or ethics policy. The said Policy provides for adequate safeguards against victimization and also direct access to the higher levels of supervisors.

Your Company hereby affirms that no Director / employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. Brief details about the policy are provided in the Corporate Governance Report, forming part to this Report.

Extract of Annual Return

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return in Form MGT-9, for the financial year ended 31st March, 2015 made under the provisions of Section 92(3) of the Act is attached as Annexure F which forms part ofthis Report.

Disclosuresunder Section 134(3)(I) of the Companies Act, 2013

There were no material changes and commitment which could affect the Company's financial position has occurred between the end of financial year of the Company and the date ofthis Report.

Disclosure of orders passed by the regulators or courts or tribunal

No significant and material orders have been passed by any Regulators or Court or Tribunal which can have an impact on the going concern status and the Company's operations in future.

Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013

The Company has not granted any loans, guarantees and investments in the financial year ended 31st March, 2015.

Material Subsidiary

During the year ended 31st March, 2015, the Company does not have any material listed / unlisted subsidiary companies as defined in Clause 49 of the Listing Agreement. The details of the policy on determining material unlisted subsidiary of the Company is available on the Company's website www. surattextilemillsltd.com.

Disclosure under the Sexual Harassment 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. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The Company has constituted an Internal Complaint Committee ('ICC') as required by the said Act with 3 members including 1 member representing Non Governmental Organisation (NGO). The Company is strongly opposed to sexual harassment and employees are made aware about the consequences of such acts and about the constitution of ICC. During the year under review, no complaints were filed with the Committee under the provisions of the said Act. Service of documents through electronic means

All documents, including the Notice and Annual Report shall be sent through electronic transmission in respect of members whose email IDs are registered in their demat account or are otherwise provided by the members. A member shall be entitled to request for physical copy of any such documents.

Indian Economy & Industry Scenario

According to the latest world economic outlook of IMF, India will surpass China in terms of growth to become the fastest growing large economy in the world.

The Mid-year update of the UN World Economic Situation and Prospects (WESP), related recently said, India's economy is projected to grow by 7.6 per cent this year and 7.7 per cent in 2016, overtaking China. China is projected to grow by 7 per cent in 2015 and 6.8 per cent next year.

India's growth is expected to be at least 8 per cent in the current financial year on account of initiative taken by the government to boost investment and growth. With India's economy mostly domestic driven, internal risks far outweigh external risks.

The Indian economy is showing signs of turnaround. The Indian economy is coming out of some tough times in recent years with a steep decline in growth, stubbornly high inflation and a wide current account deficit, but the situation is now improving.

Key reforms in the business environment, to labour market and to infrastructure will bring economic growth back to the higher levels seen in the recent past, create good jobs and improve well-being for all Indians.

While lower crude oil prices would ensure saving on input cost like MEG and PTA, which are the derivatives of crude oil, the poor demand is likely to restrict revenue growth.

Stronger rupee against most other currencies over the previous year will negatively impact the international operations like export of goods / import of raw materials.

Polyester markets faced challenges during the year because of raw material price volatility and over-capacity situation in the industry. Steep decline in raw material prices during the third quarter, put pressure on the margins.

The outlook for the industry for the coming year looks positive as the demand growth is expected to slowly catch-up with the supply.

Risk and concerns

The PFY industry is very competitive with players ranging from large vertically integrated players with very low variable costs to small flexible players who can rapidly respond to market changes in terms of both price and product mix.

An economic slow down- both domestic and global - may have adverse effect on the growth of the PFY industry. Raw material prices fluctuate in line with international prices and will continue to have an impact on the company's performance as raw materials constitute about 75 percent of the Company's net sales. Increased differentiated products as well as a reduced working capital facilitywill help reduce risks. 

Large capacity addition by new and existing players may out-pace demand growth which will lead to price instability and pressure on profit margins. Yet, as demand growth resumes its historical trajectory it is a matter of time before healthy margins are restored.

Your company, like any other enterprise, is exposed to business risk which can be an internal as well as external risk. One of the key risks faced by the company in present scenario is the wide and frequent fluctuations in the prices of its raw materials. Major raw materials i.e. PTA and MEG are the derivative of crude and Crude Oil remain highly volatile whole year on account of various international political and economical reasons which are beyond our control.

Inflationary tendency in the economy and deterioration of macro economic indicators, coupled with below normal rain can impact the spending power of the consumer which can affect the volume of business as well as the operating performance of the Company.

Business Outlook:

The growth in demand is expected in the medium term to rely on high consumption in the domestic market. Your Company is committed to build business with long term goal based on your Company's intrinsic strength in terms of product quality and customer network.

Large additions to PTA capacity are expected this financial year that should result in more competitive PTA costs that will improve both domestic and export sales and margins, other things being sanr^

The introduction of GST should see a level playing field between your Company and other companies which are tax exempt. This should further improve margins for your Company in the long run, other things being same.

The Company will continue to focus on specialty and differentiated products in yarn and chips segment.

Internal Control System and their Adequacy

The Internal Control System provides for well documented policies / guidelines, authorizations and approval procedures. Considering the nature of its business and size of operations, your Company through its Internal Auditors carries out periodic audit based on the plan approved by the Audit Committee. The summary of the Internal Audit observations and status of implementation are submitted to the Audit Committee. The status of implementation of the recommendations is reviewed by the Audit Committee on a regular basis and desired actions are initiated to strengthen the control and effectiveness of the system. Concerns, if any, are reported to the Board. Health, safety and environment

Your Company continued its focus in creating an aesthetic, environment-friendly industrial habitat in its factory units, mobilizing support and generating interest among staff and labour for maintaining hygienic and green surrounding. The Company continues to focus on maintenance and performance improvement of related pollution control facility at its manufacturing locations. Your Company recognizes protection and management of environment as one of its highest priority and every effort is made to conserve and protect the environment.

Industrial Relation / Human Resources

The Company continuously works to nurture this environment to keep its employees highly motivated, result oriented and adaptable to changing business environment. Your Company's value proposition is based on providing value to our customer, through innovation and by consistently improving efficiency at all levels.

Your Company maintained healthy, cordial and harmonious industrial relations at all levels during the year under review. Your Directors wish to place on record their appreciation for the dedicated and commendable services rendered by the employees of the Company. There were 81 permanent employees as on 31st March, 2015.

CAUTIONARY STATEMENTS

Statements made in this report forming part of the disclosure related to Management, Discussion and Analysis describing the Company's objectives, projections, estimates and expectations may be 'forward-looking statements' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Company's operations include economic developments within the country, demand and supply conditions in the industry, input prices, changes in government regulations, tax laws, and other factors such as litigation and industrial relations.

Acknowledgement

The Directors of the Company wish to express their appreciation for the continued co-operation of the Central and State Governments, bankers, financial institutions, customers, dealers and suppliers and all the valuable assistance received from the shareholders. The Directors also wish to thank all the employees of the Company for their contribution, support and continued co­operation through out the year.

For and on behalf of the Board 

 M. R. Momaya

Managing Director 

Surat 28th May,2015