DIRECTORS' REPORT Dear Shareholders, Your Directors have pleasure in presenting the 23rd Annual Report together with the Audited Financial Statement for the year ended 31st March, 2015. PERFORMANCE REVIEW During the year under review, the Company's revenue was Rs Rs. 9525.19 lacs compared to Rs. 10054.12 lacs for the previous year. The Profit before Tax was Rs. 475.85 lacs compared to Rs. 462.44 lacs for the previous year registered growth by 2.90% The Profit After Tax was Rs. 325.22 lacs compared to Rs. 318.24 lacs for the previous year and registered growth by 2.19%. Your Company is engaged in the manufacturing of cotton yarn for different applications by Rotor Spinning. Rotor Spinning is economical, since the process is very short, consumes less energy and offer substantial cost benefits in the choice of raw material in comparison to Ring Spinning , especially in coarse counts. The Company is also engaged in generation of power through Wind Mill for captive consumption. The Indian textile industry is one the most important industries for the Indian economy. Its importance is underlined by the fact that it accounts for around 4% of GDP, 14% of the industrial production and 17% of the country's total export earnings. Besides; the textile industry is the second-largest employment generating industry in both rural and urban areas, after the agriculture industry. With rising demand in domestic and international markets, we are hopeful that we will be able to grow our business. RESERVES There is no amount proposed to be carried to any Reserve. DIVIDEND With a view of conserving resources, your Directors do not recommended any dividend for the year under review. LISTING OF THE SHARES The Equity Shares of the Company are presently listed with Bombay Stock Exchange Ltd.(BSE). Further the Company has paid listing fees to Bombay Stock Exchange Ltd. for the year 2015-2016. DIRECTORS' RESPONSIBILITY STATEMENT In terms of provisions of section 134(3) (c) read with section 134(5) of the Companies Act, 2013, your Directors state that: • in the preparation of the annual accounts for the year ended 31st March ,2015, the applicable accounting standards have been followed and there are no material departures from the same; • the Directors 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 31st March,2015 and of the profit of the Company for the year ended on that date ; • the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; • the Directors have prepared the annual accounts on a going concern basis; • the Directors, 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 • the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. DIRECTORS & KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Shri Praneet Mutha Director (DIN: 00424250), will retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for his re-appointment as Director. During the year under review, the members approved the appointments of Shri Mohan Lal Jain, Shri Subhash Kocheta , Shri Raghuram Krishnamurthy and Shri Shailendra Kumar Jain as independent directors under the Companies Act, 2013 for 5 consecutive years for a term upto the conclusion of the 27th Annual General Meeting. The Company has received declaration from all the Independent Directors of the Company confirming that they meet criteria of independence as prescribed under section 149(6) of the Companies Act, 2013. Pursuant to the provisions of the section 161(1) of the Companies Act, 2013 read with the Articles of Association of the Company, the Board of Directors has appointed Smt. Deepa Sudhir Mekal (DIN-05222280) , as a Woman Director as an Additional Director and She shall hold office only up to the date of ensuing Annual General Meeting and being eligible, offer herself for re-appointment as Director. The Company has received a proposal from shareholder of the Company proposing candidature to appoint her as a Woman Director. The Board of Directors has re- appointed Shri Mangalore Maruthi Rao as Whole Time Director for further period of two years w.e.f. 28.10.2014 and Shri Piyush Mutha (DIN: 00424206) as Managing Director for a further period of 2 years w.e.f.01.04.2015 subject to approval of Shareholders in the ensuing Annual General Meeting. During the year under review, Shri Shailendra Kumar Jain Director (Independent-Non-Executive) of the Company had resigned w.e.f 31.10.2014. During the year, Shri Jitender Kumar Yadav, Company Secretary of the Company also appointed as Chief Financial Officer of the Company pursuant to compliance of section 203 of the Companies Act, 2013, has resigned from the post of Company Secretary & Chief Financial Officer of the Company w.e.f .20.11.2014. Ms. Sanju Patel has been appointed as Company Secretary & Chief Financial Officer of the Company w.e.f. 15.01.2015. BOARD EVALUATION Pursuant to the provisions of Companies Act,2013 and clause 49 of the Listing Agreement, the Board has carried out performance evaluation of its own, the Board Committees and of the Independent Directors. Independent Directors at a separate meeting evaluated performance of the Non Independent Directors, Board as whole .The manner in which the evaluation has been carried out has been detailed in Corporate Governance Report. INSURANCE Assets of the Company are adequately insured. SUBSIDIARIES, ASSOCIATE & JOINT VENTURE COMPANIES Companies have no subsidiaries, associates Companies & joint venture companies. RELATED PARTY TRANSACTIONS There were no contracts or arrangements entered into by the Company in accordance with provisions of section 188 of the Companies Act, 2013 except payment of remuneration to Managing Director & Whole Time Director during the year. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company except payment of remuneration to Managing Director & Whole Time Director during the year. The Company has adopted a policy on Related Party Transactions & the same is displayed on the website of the Company, weblink: <http://vippyspinpro.co.in/Related-Party-Transaction-Policy.pdf> INTERNAL FINANCIAL CONTROLS The Company has in place adequate internal financial controls with reference to financial statements. All the transactions are properly authorized and recorded . The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The Internal Audit is conducted by outside auditing firms which evaluate the functioning and quality of internal controls and check; and provides assurance of its adequacy and effectiveness. The Internal Audit Reports are reviewed by the Audit Committee and adequate remedial measures, if any, are taken and in time. During the year, not reportable material weakness in the design or operation were observed. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY There are no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year of the Company i.e. 31st March, 2015 and the date of the Directors' report i.e. 25th May 2015. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY The Company has long been following the principle of risk minimization as is the norm in every industry; it has now become a compulsion. Therefore, the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the Company. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. In today's challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are: Company Assets and Property, Employees, Foreign Currency Risks, Operational Risks, Non-compliance of statutory enactments, Competition Risks, Contractual Risks, and Volatility in prices of Raw Material. The management is however, of the view that none of the above risks may threaten the existence of the Company as robust Risk mitigation mechanism is put in place to ensure that there is nil or minimum impact on the Company in case of any of these risks materialize. During the year, your directors have constituted a Risk Management Committee. MANAGEMENT DISCUSSION AND ANALYSIS REPORT In terms of Clause 49 of the Listing Agreement with Bombay Stock Exchange Ltd., Management Discussion and Analysis Report is appended to and forms part of the Annual Report. CORPORATE GOVERNANCE Your Company has always strived to maintain appropriate standards of good corporate governance. The Report on Corporate Governance as stipulated under clause 49 of the listing agreement forms part of this Report. The requisite certificate from Company Secretary in Practice confirming compliance with the conditions of corporate governance is attached to report on corporate governance . COMPANY POLICY FOR PROMOTION OF EMPLOYMENT OF YOUTH COMING FROM THE UNDER-PRIVILEGED/DISADVANTAGED SECTION OF THE SOCIETY The people are recruited in the Company on the basis of their qualification/eligibility and merits without any discrimination against their gender, religion, caste, colour, ancestry, marital status, nationality and disability, and among equally qualified individuals, preference are given to people from the disadvantaged groups. The Company also conducts training programme from time to time for up-skilling, training of employees from socially disadvantaged sections of society. ENVIRONMENT & SOCIAL CONCERN Your Company is committed to build business with save energy and save environment. Wind energy is the most mature and cost-effective renewable energy source, wind energy is generally recognized as a key solution in the fight against climate change and the desire to free society from its dependence on fossil fuels. In line of this, the Company had set up the wind mill that generates electricity and contributed to displace emissions from the nation's coal-fired power plants and eliminates the nation's major source of acid rain, reduce total emissions of CO2, and helps to reduce the spread of respiratory disease aggravated or caused by air pollution in the country. Your Company is committed to the sustainable use of all natural resources and minimizes waste at source and recycle where possible. Considering the scarcity of natural resources, the Company continue to maintain "Rain Water Harvesting System" at the factory premises at Dewas. The 8040 sq meters of roof area has been covered under the rain water harvesting and approx 4838 cubic meters of water has been collected at factory premises at Dewas, resulting in saving water and recharging the five bore wells consequently, and also the cost thereof. The Company is also continuing to generate electricity through Company's Wind Mill situated at Dewas District, Madhya Pradesh. Your Company continues to give top priority importance to pollution control and environment protection. The Company complies with various emission standards and other environmental requirements as per pollution control norms. In memory of founder Late Shri Prakash Mutha, during the year, Company has involved in inspirable activities in the area around the plant situated at Dewas such as giving awards to meritorious students and distribute bicycle, School Dress, School Bags, School Books & Education Material. Total 55 Students got such benefit during the year. The Company has provided training to women to develop their skills & quality. The Company has also organized the various health awareness programmes during the year. DISCLOSURES Particulars of Loan given, Investments made, Guarantee given and Securities provided under section 186 of the Companies Act, 2013 There are no Loans, Guarantees, Investments and Securities provided which are covered under the provisions of Section 186 of the Companies Act, 2013. Conservation of Energy, Technical Absorption and Foreign Exchange Earning & Outgo The Particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed under the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are provided in Annexure -I-to this Report. Extract of Annual Return Extract of Annual Return of the Company is annexed herewith as Annexure -II- to this Report. Meeting of Directors During the year under review, our Board met Ten (10) times. For further details please refer to Report on Corporate Governance of this Annual Report. During the year under review One(1) Board meeting of Independent Directors was held . Audit Committee The Audit Committee comprises Independent Directors namely, Shri Mohan Lal Jain (Chairman),Shri Subhash Kocheta , & Shri Raghuram Krishnamurthy , as other members. All the recommendations made by the Audit Committee were accepted by the Board. Stakeholders Relationship Committee The Stakeholders Relationship Committee comprises Independent Directors namely Shri Subhash Kocheta (Chairman) , & Shri Mohan Lal Jain as other member. Nomination & Remuneration Committee The Nomination & Remuneration Committee comprises Independent Directors namely Shri Raghuram Krishnamurthy (Chairman) ,Shri Mohan Lal Jain & Shri Subhash Kocheta , as other members. Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee adopted a Remuneration policy of the Company for Directors, Key Managerial Personnel & other employee's .The Remuneration Policy is annexed herewith as Annexure-III to this Report. Vigil Mechanism / Whistle Blower Policy Pursuant to Companies Act, 2013 & Listing Agreement with Bombay Stock Exchange Ltd., and in order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behavior, the Company has adopted a vigil mechanism policy. This policy may be accessed on the Company's website, Weblink:<http://vippyspinpro.co.in/> Whistle-Blower-Policy.pdf Particulars of employees and related disclosures Particulars of employees as required under 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)Rules,2014, is not applicable as no employee is covered under the said rules. Particulars pertaining to remuneration and other details as required under section 197(12) of the Act read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014 is annexed herewith as Annexure -IV- to this Report. GENERAL Yours Directors state that no disclosures or reporting is required in respect of the following items as there were not transactions on these items during the year under review: - details relating to deposits covered under chapter V of the companies Act, 2013 - Issue of shares during the year - no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. AUDITORS & AUDITORS' REPORT Statutory Auditors M/s. Sodani & Co., Chartered Accountants (Firm Registration No.000880C), Auditors of the Company will retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for reappointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment .The Board recommends their re-appointment to conduct audit of accounting records of the Company. There being no reservation, qualification or adverse remark in the Auditors' Report, no explanation on part of the Board of Directors is called for. Secretarial Auditors The Board has appointed M/s Shilpesh Dalal & Co. Practicing Company Secretaries, to conduct secretarial audit. The Secretarial Audit Report for the financial year ended 31.03.2015, is annexed herewith as Annexure-V The Secretarial Audit Report does not contain any reservation, qualification or adverse remark and no explanation on part of the Board of Directors is called for. PREVENTION OF SEXUAL HARASSMENT POLICY The Company has a Prevention of Sexual Harassment Policy in force in terms of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The objective of this policy is to ensure a safe, secure and friendly work environment where employees will deliver their best without any inhibition, threat of fear .During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. HUMAN RESOURCES The Company believes that human resources are valuable assets of the Company and provides them an environment, where each employee is motivated to contribute his best to achieve the Companies objective. The Company lays great emphasis on proper management of human resources and believes that this is the most important ingredient for achieving excellence in performance and sustainable growth. The Company has a progressive HR policy for helping employees to develop their organization skills, knowledge and abilities to achieve greater efficiency. The Industrial Relations of the Company with its personnel has continued to be cordial and friendly during the year. The Company has 106 employees on 31.03.2015. ACKNOWLEDGEMENTS The Board of Directors of the Company wish to place on record their thanks and appreciation to all employees for their contribution to the operation of the Company. The Directors are thankful to the Bank for its continued support to the Company. The Directors also place on record their sincere thanks to the customers, dealers, suppliers and investors for their continued support, co-operation and confidence in the Management of the Company. For and on behalf of the Board of Directors Piyush Mutha (Managing Director) Mohan Lal Jain (Director ) Place: Dewas Date : 25th May, 2015 |