DIRECTORS' REPORT Your Directors are pleased to present the 35th Annual Report on the business and operations of the Company along with audited statements of accounts for the year ended 31st March, 2015. CORPORATE REVIEW During the year under consideration the income from operations of the company is Rs. 88,79,220.00/- against Rs. 92,44,196.16/- in the last Financial Year. Other Income of the company is Rs. 1,26,38,867.00/- in comparison to Rs. 88,46,524.87/- in previous year. As reported earlier that the company has been declared as Sick by the BIFR. The management of the company has submitted its Detailed Rehabilitation Scheme (DRS) to the BIFR through the operating agency appointed by the BIFR after incorporating the changes suggested by different agencies. The BIFR has recorded its opinion against the scheme and company has filed an appeal with AAIFR in this regard. SHARE CAPITAL The paid up Equity Share Capital as on March 31, 2015 was Rs. 681.44 Lacs. During the year under review, the Company has neither issued any shares nor granted stock options and nor sweat equity. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. RESERVES & SURPLUS Rs. 31.84 lac has been transferred to reserve and surplus. DIVIDEND Due to absence of adequate profits, your Directors are unable to recommend any dividend for the year under review. DEPOSITS During the year under review the company has not accepted any deposits within the meaning of section 73 of the Companies Act, 2013 and the rules made there under. NUMBER OF MEETINGS HELD The details of Board and Committee Meetings are given in the Corporate Governance Report. DIRECTORS Sh. Rajneesh Oswal, Managing Director of the Company, is liable to retire by rotation at the forthcoming Annual General Meeting under clause 86(1) of Article of Association of the Company and being eligible, offer himself for reappointment. Dr. [Mrs.] Shalini Gupta has been appointed as Additional Director (Independent) with effect from 26th March 2015 and she shall hold office till the date of forthcoming Annual General Meeting wherein she is proposed to be appointed as an Independent director not liable for retirement by rotation. All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. BOARD EVALUATION Pursuant to provisions of the Companies Act, 2013 and Clause 49 of the listing agreement, the Board has carried out an annual performance evaluation of its own performance and the performance of the individual Directors as well as the evaluation of the working of its committees. The manner in which the evaluation was carried out has been explained in the Corporate Governance. KEY MANAGERIAL PERSONNEL Sh. Rajesh Kumar was appointed as Chief Financial Officer of the Company w.e.f. 26th May, 2014. The following employees were designated as Whole-time Key Managerial Personnel by the Board of Directors during the year under review: ? Sh. Rajneesh Oswal, Managing Director ? Sh. Rajesh Kumar, Chief Financial Officer ? Sh. Preet Kanwar Singh, Company Secretary REMUNERATION POLICY The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their Remuneration. The said policy has been uploaded on the website of the Company. The Key provisions of Nomination and Remuneration policy are appended as an Annexure I to the Board's report. AUDIT COMMITTEE The company has duly constituted Audit Committee, the scope of which is quite comprehensive and is in conformity with the provisions of the Companies Act, 2013 and revised Clause 49 of the listing Agreement. The composition of the Audit Committee is given in Corporate Governance Report. All the recommendations of the Audit Committee were accepted by the Board. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM/ WHISTLE BLOWER POLICY The Company has adopted the Whistleblower Policy/Vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Company's Code of Conduct and Ethics. Such mechanism/policy is also uploaded on the website of the Company. STATUTORY AUDITORS At the Annual General Meeting held on 13th August, 2014 M/s Dass Khanna & Company, Chartered Accountants, Ludhiana were appointed as statutory auditors of the Company to hold office till the conclusion of the 37th Annual General Meeting. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s Dass Khanna & Company, Ludhiana, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that their appointment is in accordance with the provisions of Section 141 of the Companies Act, 2013. The auditors' report on the accounts of the Company for the year under review requires no comments. COST AUDIT Cost audit for the financial year 2014-15 is not applicable to the Company as per Notification issued by the Ministry of Corporate Affairs, hence no cost auditor was appointed for cost audit purposes. SECRETARIAL AUDIT M/s P. S. Bathla & Associates, Practising Company Secretaries, Ludhiana, were 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 made there under. The secretarial audit report for FY 2014-15 is appended as an Annexure II to the Board's report. The Secretarial auditors' report for the year under review requires no comments. The Board has appointed M/s P. S. Bathla & Associates, Practising Company Secretaries, Ludhiana as secretarial auditor of the Company for the financial year 2015-16. RELATED PARTY TRANSACTIONS No Related Party transactions was entered during the financial year with the Company's Promoters, Directors, Management or their relatives. There were no material contract or arrangement or transactions with Related Party during the year. Thus, disclosure in form AOC-2 is not required. The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013, the rules there under and the Listing Agreement. This Policy was considered and approved by the Board has been uploaded on the website of the Company at http://www.adinathtextiles.com / pdf/Related Party Transaction Policy.pdf PARTICULARS OF EMPLOYEES The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as an Annexure III and forms an integral part of this report. EXTRACT OF ANNUAL RETURN In accordance with Section 134(3) (a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as an Annexure IV to the Board's report. INDUSTRIAL RELATIONS The Company maintained healthy, cordial and harmonious industrial relations at all levels. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY The Company has been addressing various risks through well defined risk management policy/procedures, which are in the opinion of the Board may threaten the existence of the Company. INTERNAL FINANCIAL CONTROL SYSTEMS The Company has laid down adequate internal financial controls with reference to financial statements. During the year such controls were tested and no material weakness in their operating effectiveness was observed. ASSOCIATES AND SUBSIDIARIES The Company has no Associates & Subsidiaries as on March 31, 2015. CORPORATE GOVERNANCE As per Clause 49 of the Listing Agreement with the Stock Exchange, a separate Report on Corporate Governance practices followed by the Company together with a Certificate from the Practicing Company Secretary confirming compliance forms part of this report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 the particulars relating to conservation of energy, technology, absorption and foreign exchange earning and outgo is appended as an Annexure V to the Board's Report. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations. DIRECTORS' RESPONSIBILITY STATEMENT In accordance with the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that: (a) in the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed and there has been no material departures; (b) 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 account of the company for that period; (c) the directors had 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 fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis; and. (e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and these were adequate and operating effectively. ACKNOWLEDGMENTS Your Directors wish to place on record their appreciation for the dedicated work and co-operation extended by all the employees. Your Directors also wish to record their gratitude to the shareholders, Customers and Suppliers for their valuable support. For and on behalf of the Board For ADINATH TEXTILES LIMITED Sd/-RAJNEESH OSWAL (MANAGING DIRECTOR) DATE : 28.05.2015 PLACE : LUDHIANA |