DIRECTORS' REPORT [(Disclosure under Section 134(3) of The Companies Act, 2013) {Read With Companies (Accounts) Rules, 2014}] TO THE MEMBERS, The Directors have pleasure in presenting the 31st Annual Report of your Company and the Audited Accounts for the year ended 31st March 2015. 2. PERFORMANCE: During the year under review, the Company's revenue from operations stood at Rs. 7,227.69 Lacs as against Rs. 6,604.38 Lacs in the previous year. The Company has earned a Net profit after Tax of Rs. 1,205.50 Lacs as compared to the Net Profit after Tax of Rs. 812.33 Lacs during the previous accounting year. The management continues to pursue its efforts to further improve its capacity utilization, operating efficiencies and cost competitiveness to improve its international performance in the further year through increase in turnover, improved penetration in domestic market and strong inroads on export front along with appropriate restructuring of products and procedures. 3. DIVIDEND: Your Directors are pleased to recommend payment of Dividend of Rs. 2.70 per share on fully paid shares of 10/-each. Total cash outflow on account of this dividend payment including distribution tax will be Rs. 105.66 Lacs. The Dividend after approval by the shareholders at the forthcoming AGM will be paid to the eligible shareholder before 30th September2015. The dividend, if declared at the AGM, would be paid/ dispatched within thirty days from the date of declaration of dividend to those persons or their mandates: • whose names appear as beneficial owners as at the end of the business hours on 25th August 2015 in the list of the Beneficial Owners to be obtained from the Depositories i.e. National Securities Depository Limited [NSDL] and Central Depository Services (India) Limited [CDSL], in respect of the shares held in electronic/ dematerialized mode; and • whose names appear as Members in the Register of Members of the Company as on 25th August 2015, after giving effect to valid share transfers in physical forms lodged with the Company/ Registrar & Share Transfer Agents, in respect of the shares held in physical mode. 4. RESERVES: As per recommendation by Board of Directors, an amount of Rs. 121 Lacs, is transferred to General reserve as per provisions of transfer to Reserve rules. 5. LOANS, GUARANTEE & INVESTMENTS: Details of Loans, Guarantee and Investment covered under the provision of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 6. MATERIAL CHANGES AND COMMITMENTS: Your Directors further states that there are no material changes have taken place affecting the financial position of the Company from the date of closure of financial year till the signing of Accounts. 7. DEPOSITS: The details relating to deposits, covered under Chapter V of the Act- (a) accepted during the year Rs. 487.00 Lacs (b) remained unpaid or unclaimed as at the end of the year; Nil (c) whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved- (i) at the beginning of the year; Nil (ii) maximum during the year; Nil (iii)at theend of the year; Nil 8. AUDITORS: M/s. S.P Jain & Associates, Chartered Accountants, Mumbai being eligible offer themselves for re-appointment. If re-appointed, it will be within the prescribed limits specified in Section 139 of the Companies Act, 2013. Members are requested to appoint the auditors and to fix their remuneration . SECRETARIAL AUDIT: The Board of Directors have appointed M/s. Sanjay Dholakia & Associates, Practising Company Secretaries to conduct Secretarial Audit for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and the rules framed thereunder. The Secretarial Audit Report for the financial year 2014-15 forms part of the Directors' Report as Annexure IV. 10. OBSERVATIONS - AUDITOR & SECRETARIAL AUDITOR: Statutory Auditor: Auditors Qualification: During the year, the Company has accepted deposit from relatives of Directors, Associate Enterprise amounting to Rs. 487.00 Lacs in contravention with the provision of Section 73 to 76 of the Companies Act, 2013. The same has been fully repaid within the current year and the outstanding balance as on 31st March 2015 is Rs. NIL. The Company has neither complied with the provision of section 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 nor with the directives issued by the Reserve Bank of India with regard to such deposits. As informed to us, there is no order passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or court or any other tribunal in respect of the said matter. The Company has accepted loans from Directors and their relatives during the year under review and has repaid the same as on 311 March, 2015. These funds are required by the Company purely for working capital and were temporary in nature and hence the provisions related to Section 73and the Rules made there under were not followed. The Company is taking necessary steps for the same. Secretarial Auditor: 1. Fixed Deposit- The Company has accepted loans from Directors and their relatives during the year under review and has repaid the same as on 31st March 2015. These funds are required by the Company purely for working capital and were temporary in nature and hence the provisions related to Section 73 and the Rules made thereunder were not followed. The Company is taking necessary steps for the same. 2. Company Secretary- The Company has appointed Company Secretary on 30th March 2015 and could not complete the formalities of her appointment as she left the services effective from 8th April 2015. In view of the same, the necessary Forms and Returns were not filed with Registrar of Companies and also no intimation was given to BSE Limited. 3. Woman Director -The Company has appointed Woman Director with effective from 10th April, 2015 and thus complied with the provision of the same. 11. BOARD MEETINGS: During the year under review, the Company has conducted 5 Board Meetings on 26th May 2014,14th August 2014,15th November2014,13th February2015. 12. DIRECTORS' RESPONSIBILITY STATEMENT: The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) shall state that- (i) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (ii) The directors had 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 at the end of the financial year and of the profit and loss of the company for that period; (iii)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; (iv)The directors had prepared the annual accounts on a going concern basis; (v)The directors, further state that they have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (vi)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. 13. DIRECTORS AND KEY MANAGERIAL PERSONNEL: A) Changes in Directors and Key Managerial Personnel Mr. Ashok Bhagwandas Harjani, (DIN 00725890) Managing Director of the Company, who is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, seek reappointment pursuant to Section 152 of the Companies Act, 2013. Further, there were no changes in Directors by way of appointment, re-designation, death or disqualification, variation made or withdrawn B) Declaration by Independent Director The Company has received necessary declarations from each independent director under section 149(7) of the Companies Act, 2013 that he meets the criteria of Independence laid down in section 149(6) of the Companies Act, 2013 and clause 49 of Listing agreement. 14. RISK MANAGEMENT POLICY: During the year, the Board of Directors have seeing 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. The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its objectives. 15. RELATED PARTYTRANSACTIONS: All transactions entered into with related party as defined under Section 188(3) of the Companies Act, 2013 and Clause 49 of the Listing agreement during the financial year were in the Ordinary course of business and on arms length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. Suitable disclosure as required by the Accounting Standards (AS 18) has been made in the notes to the Financial Statements and in prescribed Form No. AOC -2, is appended asAnnexure Vtothe Board's Report. 16. EXTRACT OF ANNUAL RETURN: The extract of Annual Return in Form No. MGT -9, as provided under sub-section (3) of Section 92 of the Companies Act, 2013,annexed as Annexure III to the Board report. 17. AUDIT COMMITTEE: The Audit Committee comprises of 2 Non Executive Directors and 1 Executive Director namely Mr. Devendra K. Shah (Chairman)and Mr. Rajesh M. Mahtaniand Mr. Lokesh Harjani Executive Director as other members. All the recommendations made by the Audit Committee were accepted by the Board. 18. NOMINATION AND REMUNERATION COMMITTEE: The Company has constituted a Nomination and Remuneration Committee pursuant to Section 178(1) of the Companies Act, 2013 which comprises of Mr. Devendra K. Shah (Chairman), Mr. Ashok B. Harjani and Rajesh M. Mahtani as members and has defined the policy on Director's appointment and payment of remuneration including criteria for determining qualifications, positive attributes, independence of a Director. 19. CORPORATE SOCIAL RESPONSIBILITY COMMITTEE: The Corporate Social Responsibility (CSR) Committee comprises of Mr. Devendra K. Shah (Chairman) and Mr. Ashok B. Harjani and Mr. Lokesh Harjani as members. The financial data pertaining to company's CSR policy and disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 as annexed herewith Board Report(Annexure 1). 20. SIGNIFICANT AND MATERIAL ORDERS: There are no Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. 21. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: Pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Directors state that during the year under review there were no cases filed/pending. 22. INTERNAL FINANCIAL CONTROLS: The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation 23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION ETC. & FOREIGN EXCHANGE EARNINGS AND OUTGOINGS: The information as required under Section 134(3)(m)of The Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014 with respect to conservation of energy, technology absorption and foreign exchange earnings is given below: A. Conservation of energy: (I) The steps taken or impact on conservation of energy The Company is not a major user of energy. Due to increase in capacity utilisation and expansion of new factory unit at vapi the energy consumption in absolute units and value have increased vis-a-vis earlieryears. However, the measures taken up the Company have resulted in improvement and saving of power. Regular preventive maintenance is carried out andthis has enhanced productivity and efficiency of the equipments resulting in considerable power saving Powertoall major equipment and lighting in work-areas is put off when not required, (ii) The steps taken by the company for utilising alternate sources of energy The Company's present outlay does not recommend for alternate source of energy as the company has DG-Sets to operate during emergency and the existing power cost is well below the average industry norms. (Mi) The capital investment on energy conservation equipments As explained in point No.(ii) above the Company do not propose any major capital investment on energy conservation equipments because the existing arrangement are sufficient to cater the company need and are cost effective. B. Technology absorption: (i) The efforts made towards technology absorption. Continuous efforts are made to absorb new technology and modification in machineries, introducing new technology which results in Improvement in productivity, Quality, Cost reduction, Reduction in waste etc. (ii) The benefits derived like product improvement, cost reduction, product development or import substitution The company has introduced air splicing system replacing hand knotting resulting in significant improvement in quality and loom productivity. The company has developed a joints counting attachment (In house) resulting in better method of packing and positive feed arrangement on the looms which resulted in even density tape production, which has reduced customercomplaints. (Mi) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-(a) The details of technology imported High speed Muller machines - This is the best technology available for weaving elastic tapes. The company has imported 2 Muller machines which can weave wider width tapes replacing old looms. The company had also imported higher hook J/Q machines to weave wider J/Q designs where the market is improving. These J/Q swill manufacture . PERFORMANCE EVALUATION OF BOARD: The Company has made and devised the policy for evaluation of Board of Directors and found to be satisfactory, (the structure of Board, Operations, focus on R & D, performance & contribution by individual & committee in aligned to discharge their roles and responsibility in an effective manner) 25. MANAGERIAL REMUNERATION: A) Details of the ratio of the remuneration of each director to the median employee's remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 Notes:- 1. The number of permanent employees as on 31st March, 2015 was 167. 2. No employee's remuneration for the year 2014-2015 exceeded the remuneration of any Directors. 3. The remuneration of the Directors, Key Managerial Personnel and other employees is in accordance with remuneration Policy of the Company provided under the Report. 4. Chief Financial Officer was appointed on 13th Feb 2015. B)Details of the every employee of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 1. No employee's remuneration throughout the year 2014-2015 exceeded remuneration aggregating Rs. 60Lacsormore perannum. 2. No employee employed for a part of the year is in receipt of remuneration aggregating Rs. 5 Lacs or more per month. No employee's remuneration was in excess of the remuneration drawn by the managing director or whole-time director or manager and does not holds by himself or along with his spouse and dependent children, any equity shares more than 2% of the of the company. 26. DETAILS OF SUBSIDIARY/JOINT VENTURES/ ASSOCIATE COMPANIES: The Company does not have Joint Ventures/Associate Companies. The Company in its Board Meeting held on April 20, 2015 decided to incorporate foreign subsidiary in Vietnam with a paid up capital of USD 10,00,000/- in which Premco Global Limited will hold 85%. 27. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORSAND EMPLOYEES: 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 Chairman of the Audit Committee. 28. CORPORATE GOVERNANCE: The Company is adhering to good corporate governance practices in every sphere of its operations. The Company has taken adequate steps to comply with the applicable provisions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement entered into with the Stock Exchanges. A separate report on Corporate Governance is enclosed as a part of this Report along with the Certificate from the Practicing Company Secretary confirming compliance with the conditions of Corporate Governance 29. MANAGEMENT DISCUSSION AND ANALYSIS REPORT: Management Discussion and Analysis Report for the financial year under review as stipulated in Clause 49 of the Listing Agreement entered into with the Stock Exchanges is set out in a separate section forming part of this Report as Annexure II. 30. ACKNOWLEDGEMENT: Your Directors wish to place on record their appreciation for the co-operation extended by all the employees, Bankers, Financial Institutions, various State and Central Government authorities and stakeholders. For & On behalf of Board of Directors Ashok B.Harjani. Chairman & Managing Director DIN-00725890 Place: Mumbai Date: 28th May 2015 |