DIRECTORS' REPORT TO THE MEMBERS Your Directors are pleased to present 23rd Annual Report on the business and operations of your Company and the Audited Accounts for the year ended 31st March, 2015. OPERATIONAL REVIEW The company has recorded turnover of Rs. 616.47 Crores during the year against Rs. 488.34 Crores in previous year, an increase of 26.24%. The turnover of Knitted Fabric significantly increased by 70.45% from Rs. 70.15 Crores in the previous year to Rs. 119.57 Crores during the current year. Knitted Fabric turnover constitute 19.40% of the total turnover. The export turnover also reported double digit growth of 18.11% as it has grown from Rs. 332.05 Crores in the previous year to Rs. 392.18 Crores in the current year. The export turnover constitutes 63.62% of the total turnover. The operating profit (EBIDTA) has increased from Rs. 94.28 Crores in previous year to Rs. 104.30 Crores in current year, registering an increase of 10.63% over previous year. Finally your Company has reported Net Profit (PAT) of Rs. 40.95 Crores against Rs 34.78 Crores in the previous year and out of the Net Profit of current year a sum of Rs 7.50 Crores has been transferred to General Reserves. The year under review was a challenging year for Textiles Industry specially Cotton Textiles. Raw material Cotton prices fell sharply due to higher production and change in procurement policies of Chinese Government. Cotton Yarn prices were also reduced sharply as a result of slump in cotton prices, subdued demand from International markets, affecting turnover and profitability margins. Your Directors feel pleasure in informing that despite of the challenges, your Company has achieved highest ever turnover as well as profitability during the year under discussions as a result of increase in volumes due to expansion project, focus on niche and value added products and exploring new markets. DIVIDEND In view of the better overall performance, your Directors are pleased to recommend Dividend of 10.00% i.e. Re. 1.00 per Equity Shares on the fully paid-up Equity Shares of Rs. 10/- each for the financial year 2014-15, subject to approval of shareholders at the ensuing Annual General Meeting. The total outgo on this account including Dividend Tax shall be Rs. 551.65 Lacs. EXPANSION PROJECT The Company has successfully implemented expansion project for installation of 72480 Spindles and 19 Knitting Machines at cost of Rs. 281 Crores against envisaged project cost of Rs. 286 Crores and commercial production on expanded capacity commenced w.e.f. 09.02.2015 against projected date of31.03.2015. After implementation of this expansion project installed capacity of Company has increased to 150096 Spindles, 2936 Rotors and 49 Knitting Machines. The investments in the project are eligible for Interest subsidy and other benefits under TUF Scheme of Government of India and Rajasthan Investment Promotion Scheme, 2014. The production on expanded capacity is on full swing and your Company will get benefits of expansion for full year in the year 2015-16. CORPORATE SOCIAL RESPONSIBILTY (CSR) Your Company is committed to make a positive contribution to communities where it operates. Pursuant to Section 135 of the Companies Act, 2013, the Company has constituted CSR committee on 06.05.2014 and it comprises of Sh. R.L. Nolkha, Chairman & Managing Director, Sh. Dinesh Nolkha, Managing Director, Sh. Y.R. Shah, Independent Director and Smt. Aditi Mehta, Independent Director. In order to make positive contribution for woman empowerment your Company has identified Woman/ Girls Hostel Project at an estimated project cost of Rs. 300 Lacs at Bhilwara. This is long term project and to augment resources for the same, the Company could spend Rs. 23.64 Lacs on CSR Activities during the year against mandated expenditure of Rs. 49.33 Lacs. The shortfall in the expenditure during the current year shall be considered in the next year. The details of CSR activities in the prescribed format are enclosed as Annexure - I to this report. DIRECTORS Smt. Aditi Mehta and Dr. R. Chattopadhyay have been appointed Independent Directors for five years at the Annual General Meeting held on 11th September, 2014. The IDBI Bank Ltd. has withdrawn nomination of Sh. S.K. Chaturvedi from the Directorship of the Company and he ceased to be Director of the Company w.e.f. 10.11.2014.The board places on record its sincere appreciation for the valuable contribution made by Shri S.K.Chaturvedi during his tenure of directorship of the company. All the Independent Directors of the Company have given declaration that they are complying with the requirement of section 149(6) of the Companies Act, 2013. Shri Nitin Nolakha, Director of the Company retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. Details of the Director seeking re-appointment are provided in the Corporate Governance Report forming part of this report. AUDITORS M/s R. S. Dani & Co., Chartered Accountants and Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. Your Directors recommend for their re-appointment. In pursuance of Section 148 of the Companies Act, 2013, your Directors have re-appointed M/s V. K. Goyal & Company, Cost Accountants, being eligible, to conduct Cost Audit of the Company for the Financial Year 2015-16. The Board of Directors has re-appointed M/s V.M & Associates, Company Secretaries in Whole-Time Practice, being eligible, to conduct Secretarial Audit for the Financial Year 2015-16 under the provisions of section 204 of the Companies Act, 2013. SECRETARIAL AUDIT REPORT The Board of Directors has appointed M/s V.M & Associates, Company Secretaries in Whole-Time Practice to conduct Secretarial Audit under the provisions of section 204 of the Companies Act, 2013. The Report of Secretarial Auditors is enclosed herewith. The report does not contain any qualification. CORPORATE GOVERNANCE The Company is committed to maintain the high standards of Corporate Governance. Your Directors adhere to the requirements set out in Companies Act, 2013 and the listing Agreement with the Stock Exchanges and have implemented all the prescribed requirements. Pursuant to clause 49 of the Listing Agreement with the Stock Exchanges, the Report on Corporate Governance and Management Discussions & Analysis have been incorporated in the Annual Report and forms an integral part of the Directors' Report. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to sub-section 3 (c) of Section 134 of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that: (i) in the preparation of Annual Accounts, the applicable accounting standards have been followed and wherever required, proper explanation relating to material departures have been given; (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 at the end of the financial year and of the profit or loss 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 Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting frauds 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 that such internal financial controls are adequate and were operating effectively; and (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. HUMAN RESOURCE DEVELOPMENT Industrial relations continued to be cordial during the period under review. Your Company firmly believes that a dedicated work force constitutes the primary source of sustainable competitive advantage. Accordingly, human resource development received focused attention. Your Directors wish to place on record their appreciation for the dedicated services rendered by the work force during the year under review. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO A Statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo in accordance with the Rule 8 (3) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure - II and forms integral part of this Report. OTHER DISCLOSURES UNDER COMPANIES ACT, 2013 i) Number of Board Meetings : The Board of Directors met four times in the year 2014-15. The details of the Board Meeting and the attendance of the Directors are provided in the Corporate Governance Report. ii) Composition of Audit Committee : The Board constituted the Audit Committee which comprises of Sh. Y. R. Shah, Chairman, Dr. R. Chattopadhyay and Smt. Aditi Mehta as members. All the recommendations of Audit Committee have been accepted by the Board. More details on the committee are given in the Corporate Governance Report. iii) Related Party Transactions : All the related party transactions are entered on arm's length basis and are in compliance with the applicable provisions of the Act and Listing Agreement. There is no materially significant related party transaction with Promoters, Directors or Key Management Personnel which may have potential conflict with the interest of the Company at large. During the year, the Company has not entered into any related party transactions under the section 188 of the Companies Act, 2013 and the particulars of contracts or arrangements with related parties are Nil and Form AOC-2 is enclosed as Annexure - III iv) Loans Guarantees or Investments: The Company has not given any Loan, Guarantee and also not made any Investments under the section 186 of the Companies Act, 2013. v) Fixed Deposits : The Company has not accepted or renewed any fixed deposits during the year under review and no fixed deposit is outstanding for payment at the year ended 31st March, 2015. vi) Comments on Auditors' Reports : There is no adverse remark or comments in the Statutory Auditors' & Secretarial Auditors' Reports and therefore no comment are required in the Directors' Report. vii) Vigil Mechanism/ Whistle Blower Policy : In pursuance of section 177 (9) of the Companies Act, 2013 and the listing agreement, the Company has in place a Vigil Mechanism/ Whistle Blower Policy for Directors and employees to report genuine concern. More details pertaining to the same are given in the Corporate Governance Report. viii) Nomination, Remuneration & Evaluation Policy : In pursuant to provisions of section 178 of the Companies Act, 2013 and Listing Agreement, the Board of Directors approved Nomination, Remuneration & Evaluation Policy for appointment, remuneration & evaluation of the Directors, Key Management Personnel & Senior Management Personnel. The details of the Nomination and Remuneration committee, Nomination, Remuneration & Evaluation Policy and Annual Evaluation carried out by the Board of Directors are given in the Corporate Governance Report. ix) Particulars of Employees & Analysis of Remuneration: Particulars of employees and analysis of remuneration as required under section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure - IV x) Extract of Annual Return : The details forming part of the extract of the Annual Return is enclosed as Annexure V xi) Miscellaneous Disclosures :- The Company does not have any subsidiary, joint venture & associate company. The Company has not employed any female and therefore the Disclosure under the Sexual Harassment of Woman at workplace (Prevention, Prohibition and Redressal) Act, 2013 are nil. ACKNOWLEDGEMENTS Directors wish to express their grateful appreciation for assistance and co-operation received from various Departments of Central & State Governments and Banks during the year under review. Your Directors also wish to place on record their appreciation for the committed services of all the associates, vendors of the Company. For and on Behalf of the Board of Directors R. L. NOLKHA Chairman & Managing Director (DIN - 00060746) Date : 04.05.2015 Place : Bhilwara |