BOARD REPORT TO THE MEMBERS, Your Directors have pleasure in submitting their 24th Annual Report of the Company together with the Audited Statements of Accounts for the year ended March 31 , 2015. 2. DIVIDEND The strength of the Company lies in identification, execution and successful implementation of business projects. To strengthen the long term prospectus and sustainable growth in assets and revenue, it is important for the company to evaluate various opportunities in the different business vertical in which Company operates. The Board of Directors considers this to be in the strategic interest of the company and believe that this will greatly enhance the long term shareholder value. The Company expects better results for the coming year. In order to fund this development and implementation projects, conservation of fund is of vital importance. Therefore, your Directors have not recommended any dividend for the financial year 2014-15. 3. TRANSFERTO RESERVES The company has not transferred any amount of the current year profits to general reserve. 4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS Your Directors wish to present the details of Business operations done during the year under review: a. Profitability During the year the profit of the Company has increased from Rs. 705.05 Lacs to Rs. 716.29 Lacs as compared to last year 2013-14. b. Sales Inspite of adverse market condition the company has sustained its turnover and further has increased it from Rs. 35188.36 Lacs to Rs. 35425.69 Lacs as compared to last year 2013-14. c. Marketing and Market environment Your Company's textiles operations have shown encouraging growth. Your Company believes that its scale of operations and integration across the textile chain will, in future, offer significant advantages in both cost and revenue. Your Company is making efforts to generate new Customers and penetrate into new International markets, including Argentina, Brazil, Egypt, Israel, Jordan, Kenya, Mexico, Morocco and Thailand. Your Company work hard to meet the competition as well as to enable to maintain long standing business relationship. d. Future Prospects including constraints affecting due to Government policies We expect the textile segments to turn favorable and based on the various factors like macro economy condition, the Company is hopeful of significantly improved financial performance in the coming year and hope to provide booming results. 5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE ANDTHE DATE OFTHE REPORT No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report. 6. SIGNIFICANT AND MATERIAL ORDERS PASSED BYTHE REGULATORS OR COURTS There are no significant and material orders passed by the regulators / courts that would impact the going concern status of the Company and its future operations. 7. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT Management's Discussion and Analysis Report for the year ended March 31, 2015 as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges in India, is presented in the separate section forming a part of this Annual Report. 8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 'A' and is attached to this report. 9. RISK MANAGEMENT POLICY Risk management includes identifying types of risks and its assessment, risk handling and monitoring and reporting. The Company has laid down a well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitor the principal risks that can impact its ability to achieve its strategic objectives. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework. In line with the new regulatory requirements, the Company has formally framed a Risk Management Policy to identify and assess the key risk areas, monitor and report compliance and effectiveness of the policy and procedure. The Risk Management Policy is available on web link http : // www. shekhawatiyarn.com/ Companypolicies.html. A Risk Management Committee under the Chairmanship of Mr. Sushil Kumar Poddar, Independent Director, has also been constituted to oversee the risk management process in the Company. 10. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES Pursuant to Section 135 of the Companies Act, 2013 and the relevant rules, the Board has constituted Corporate Social Responsibility (CSR) Committee under the Chairmanship of Mr.Sushil Kumar Poddar. The other members of the Committee are Mr. Mukesh Ruia and Mr. Rohit Chandgothia. The Board of Directors, based on the recommendations of the Committee, formulated a CSR Policy. The Company is finding out suitable ways and means to undertake CSR activities. The Company could not undertake CSR activities before finalising this report as the time was too short to identify suitable projects in line of the CSR policy and Company's philosophy regarding responsibility as Corporate citizen. The detailed CSR Policy is available on web link <http://> www.shekhawatiyarn.com/Companypolicies.html Annual report on CSR as required under Companies (Corporate Social Responsibility Policy) Rules 2014 is furnished in Annexure 'B' and forms part of this report. 11. DISCLOSURE UNDER THE SEXUAL HARASSEMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has been employing woman employees in various cadres within its office and factory premises. The Company has in place a policy against Sexual Harassment in line with the requirements of the Sexual Harassment of woman at work place (Prevention, Prohibition and Redressal ) Act, 2013. Internal Complaint Committee is set up at shop floor level to redress any complaints received and are monitored by woman line supervisors. All employees are covered under the policy. There was no complaint received from any employee during the financial year 201415 and hence no complaint is outstanding as on March 31, 2015 for redressal. 12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013 There was no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable. 13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADEWITH RELATED PARTIES The particulars of Contracts or Arrangements made with related parties made pursuant to Section 188 is furnished in Annexure 'C' and is attached to this report. All related party transactions that were entered into during the year under report were on an arm's length basis and in ordinary course of business. The policy on the materiality of the Related Party Transactions and also on dealing with the Related Party Transactions as approved by the Audit Committee and Board of Directors is available on the web link <http://> www.shekhawatiyarn.com /Companypolicies.html. 14. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS There was no qualifications, reservations or adverse remarks made by the either by the Auditors or by the Practicing Company Secretary in their respective reports. 15. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OFTHEIR DUTIES The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, including criteria for determining Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure 'D' and is attached to this report. 16. ANNUAL RETURN The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in Annexure 'E' and is attached to this Report. 17. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES The Company does not have any Subsidiary, Joint venture or Associate Company. 18. DEPOSITS The Company has neither accepted nor renewed any deposits during the year under review. 19. MEETINGS OFTHE DIRECTORS The Board met 11 (Eleven) times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the periods prescribed by the companies Act, 2013 and listing agreement entered into with the stock exchanges. 20. DIRECTORS RESPONSIBILITY STATEMENT In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:— a) Applicable accounting standards have been followed with explanation for any material departures b) Selected accounting policies have been applied 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. c) Proper and sufficient care has been taken for the maintenance of adequate accounting records for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. d) The annual accounts are prepared on a going concern basis and e) Internal financial controls laid have been followed by the company and that such controls are adequate and are operating effectively. Explanation clarifies that such controls means policies and procedures adopted and adherence by the company for orderly and efficient conduct of business for safeguarding assets, prevention and detection of frauds and errors and maintenance of accounting record and timely preparation of financial statements and review its efficacy. f) 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. 21. DIRECTORS AND KEY MANAGERIAL PERSONNEL During the year following Directors appointed / reappointed and resigned in the Company. Appointments Ms. Jyoti Thakkar who was appointed as an Additional Woman Independent Director by the Board of Directors on the recommendation of Remuneration and Nomination Committee on May 30, 2015, holds the said office till the date of the ensuing Annual General Meeting. The Company has received a notice as per the provisions of Section 160(1) of the Companies Act, 2013, from a member proposing her candidature for reappointment to hold office upto five consecutive years. Ms. Swati Sahukara who was appointed as an Additional Independent Director by the Board of Directors on the recommendation of Remuneration and Nomination Committee on August 14, 2015, holds the said office till the date of the ensuing Annual General Meeting. The Company has received a notice as per the provisions of Section 160(1) of the Companies Act, 2013, from a member proposing her candidature for reappointment to hold office upto five consecutive years. Re-appointments As per the provisions of Section 152(6) the companies Act, 2013 Mr. Ravi Jogi, Whole-Time Director retires at the ensuing Annual General Meeting and being eligible, offfer himself for re-appointment. The Board recommends his re-appointment. Resignations Mr. Rohit Chandgothia, Independent Director and Mrs. Rekha Somani, Independent Director have resigned from the Directorship of the Company w.e.f May 30, 2015 due to the pre-occupation. The Board places on record its appreciation for the services rendered by Mr. Rohit Chandgothia and Mrs. Rekha Somani during their tenure with the Company. Appointment / Resignations of the Key Managerial Personnel During the period under review the Company has appointed the following personnel as Key Managerial Personnel of the Company: Board Evaluation Pursuant to the provisions of the Act, and Clause 49 of the Listing Agreement, a separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board who were evaluated on parameters such level of engagement and contribution and independence of judgement thereby safeguarding the interests of the Company. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The board also carried out annual performance evaluation of the working of its Audit, Nomination and Remuneration as well as Stakeholder Relationship Committee. The Directors expressed their satisfaction with the evaluation process. Familiarization Programme The Company have conducted various session during the financial year to familiarize Independent Directors with the Company, their roles, responsibilities in the Company, and the technology and the risk management system of the Company. Further, the Directors are encouraged to attend to the training programmes being organized by various regulators/bodies/Institution on above matters. 22. DECLARATION OF INDEPENDENT DIRECTORS The company has received necessary declaration from each Independent Director under section 149(7) of the Companies Act, 2013,that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The above composition of the Audit Committee consists of independent Directors viz., Mr. Sushil Kumar Poddar and Mr. Rohit Chandgothia who form the majority. More details on the Committee are given in the Corporate Governance Report which forms part of this Annual Report. The Company has established a vigil mechanism and overseas through the committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of Company employees and the Company. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and is also displayed on the website of the Company. 24. AUDITORS STATUTORY AUDITORS The term of office of M/s S G C O & Co., Chartered Accountants having firm Registration No.112081W as Statutory Auditors of the Company will expire with the conclusion of ensuing Annual General Meeting of the Company. The Board of directors of the company have, subject to the approval of members, decided to make a change in the Statutory Auditors M/s. Ajay Shobha & Co., Chartered Accountants, having firm registration No. 317031E pursuant to Section 139 of the Companies Act, 2013 are proposed to be appointed as Statutory Auditors for a period of 5 years from the conclusion of 24th AGM till the conclusion of 29th AGM subject to ratification by members in every AGM held after the AGM in which such appointment is made. A resolution proposing such their appointment forms part of the Notice. The Company has received a certificate from the above Auditors to the effect that if they are appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. M/s. S G C O & Co. over many years, have successfully met the challenge that the size and scale of the Company's operations pose for auditors and have maintained the highest level of governance, rigour and quality in their audit. The Board place on record its appreciation for the services rendered by M/s. S G C O & Co. as the Statutory Auditors of the Company. COST AUDITORS As per the requirement of Section 148 of the Act, read with the companies (Cost Record and Audit) Rules, 2014, the Audit of Cost Account related to Textile product is being carried out every year. The Board of Directors have, based on the recommendation of the Audit Committee, appointed M/s. N. Ritesh & Associates, Cost Accountant, Mumbai (Membership No. M/26963) to audit the cost accounts of the Company for the year 2015-16 from April 1, 2015 to March 31, 2016 on a remuneration of Rs. 90,000/-. As required under the Act, necessary resolution seeking member's ratification for the remuneration payable to M/s. N. Ritesh & Associates is included as item Number 6 of the Notice convening 24th Annual General Meeting. The Cost Audit report for the F.Y. 2014-15 will be filed on or before the due date. SECRETARIAL AUDITORS Mr. Vishal Manseta, Practicing Company Secretaries, was appointed to conduct the secretarial audit of the company for the Financial Year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules there under. The secretarial audit report for F.Y. 2014-15 forms part of the Annual Report as Annexure 'F' to the Board Report. INTERNAL FINANCE CONTROL The Board has adopted the policies and procedure for ensuring the orderly and efficient conduct of its business, including adherence to the Company's Policies, the safeguarding of its assets, the prevention and detection of fraud and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. 25. HUMAN CAPITAL AND PARTICULARS OF EMPLOYEES Your company had 469 employees as on March 31, 2015. The statement containing the particulars of employees as required under Section 197(12) of the Companies Act, 2013 read along with Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to the company as no employees were in receipt of remuneration above the limits specified in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The ratio of remuneration of each Director to the median employee's remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read along with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure 'G' and forms part of this annual report. 26. INCREASE IN AUTHORISED SHARE CAPITAL During the year the Company has increased its Authorized Share Capital of the Company, from Rs. 28,00,00,000/-(Rupees Twenty Eight Crores Only) (divided into 28,00,00,000 Equity Shares of Re.1/- each) to Rs. 40,00,00,000/-(Rupees Forty Crores Only) (divided into 40,00,00,000 Equity Shares of Re.1/- each) by the creation of additional 12,00,00,000 Equity Shares of Re. 1/- each ranking paripassu with the existing Equity Shares of the Company." 27. SHARES a. BUY BACK OF SECURITIES The Company has not bought back any of its securities during the year under review. b. SHARES WITH DIFFERENTIAL VOTING RIGHTS The company has not issued equity shares with differential voting rights during the period under review. c. SWEAT EQUITY The Company has not issued any Sweat Equity Shares during the year under review. d. BONUS SHARES No Bonus Shares were issued during the year under review. e. EMPLOYEES STOCK OPTION PLAN The Company has not provided any Stock Option Scheme to the employees. f. PREFERENTIAL ISSUE OF WARRANTS CONVERTIBLE INTO EQUITY SHARES During the year the company has issued and allotted 17,98,89,330 warrants on preferential basis carrying an option/entitlement to subscribed to equivalent number of Equity Shares at a price of Rs. 3.06 (Including premium of Rs. 2.06/- each and face value of Re. 1/- each) to Promoters and Non-Promoters of the Company. 28. CORPORATE GOVERNANCE Your Company has complied with the Corporate Governance requirements as per the revised Clause 49 of the Listing Agreement with the stock exchanges. A separate report on Corporate Governance along with a Certificate of Compliance from the Auditors forms a part of this annual report. 29. ACKNOWLEDGMENTS Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Sd/- Mukesh Ruia Chairman & Managing Director (DIN : 00372083 ) Sd/- Ravi Jogi Whole-Time Director (DIN : 06646110 ) Date: August 14, 2015 Place: Mumbai |