Directors' Report Dear Shareholders, 1) The Directors take pleasure in presenting their 8th Annual Report and the Audited Financial Statements for the year ended 31st March, 2015 together with the Auditor's Report thereon. 2) SHARE CAPITAL The paid up Equity Share Capital as on 31st March, 2015 was Rs.10.90 Crore. During the year under review, the Company has neither issued any shares not granted stock options nor sweat equity. 3) DIVIDEND In view of continuous huge losses incurred, your Directors do not recommend any dividend on the Shares of the Company. 4) FIXED DEPOSITS During the year under review, the Company has not accepted or renewed any deposits. 5) PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS In the year under review, the Company has not made any investments, advanced any loans or provided any guarantee under the provisions Section 186 of the Companies Act, 2013. 6) STATE OF COMPANY'S AFFAIRS BUSINESS REVIEW The details of the Company's affairs including its operations and projects are more specifically given in the Management Discussion and Analysis Report, which is appended to this report. 7) CORPORATE SOCIAL RESPONSIBILITY The provision of Section 135 of Companies Act, 2013 and Rules made thereunder are not applicable to the Company. 8) BUSINESS RISK MANAGEMENT Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report. 9) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY The Company has an internal control system. The scope of the Internal Audit is defined in the Internal Audit Charter. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the company, its compliance with operating systems, accounting procedures and policies of the company and suitable corrective actions are taken wherever necessary. 10) VIGIL MECHANISM/WHISTLE BLOWER POLICY The Company has a vigil mechanism for Directors and Employees to report their genuine concerns about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct. The mechanism provides for adequate safeguards against victimization of Director(s) and Employee(s) who avail of the mechanism. In all cases, Directors and Employees have direct access to the Chairman of the Audit Committee. Further, no personnel have been denied access to the Chairman of the Audit Committee. The Whistle Blower Policy is available on Company's website i.e. www.integragarments.com 11) SUBSIDIARIY COMPANIES Mens Club s.p.a., the Company's subsidiary was liquidated and all the formalities with reference to the liquidation are in advance stage. 12) DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. Sridhar Rengan and Mr. Shardul Doshi were appointed as Independent Directors of the Company at the Annual General Meeting (AGM) of the Company held on 23rd September, 2014. All Independent Directors of the company 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 During the year under review, Mr. Vijay Kumar Maheshwari stepped down from the Board. The Board wishes to place on record its sincere appreciation and gratitude for the invaluable contribution made by him during his tenure with the Company. Further, Ms. Amar Deepika Kashyap was appointed as an Additional Director of the company with effect from 28th March, 2015 pursuant to provisions of Section 149, 161 and other applicable provisions, if any of the Companies Act, 2013 and Rules made thereunder, who shall hold office upto the date of forthcoming Annual General Meeting of the Company. The Company has received notice in writing from members proposing the appointment of Ms. Amar Deepika Kashyap, Additional Director of the Company, for the office of Independent Director, subject to shareholders' approval to be obtained at the ensuing Annual General Meeting of the Company. We seek your confirmation for appointment of Ms. Amar Deepika Kashyap as Independent Director for a term of five consecutive years on non-rotational basis. Mr. Jagdish Sharma was appointed as Chief Financial Officer of the Company with effect from 12th February, 2015. The Company has complied with the requirement of having Key Managerial Personnel as per the provisions of Section 203 of the Companies Act, 2013. In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Harsh A. Piramal (DIN:00044972) who is retiring by rotation at this Annual General Meeting (AGM), is eligible for re-appointment. 13) BOARD EVALUTION During the year under review, pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Board's functioning such as composition of the Board and Board Committees, experience, competencies, performance of specific duties, obligations and governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors including the Chairman who were evaluated on parameters such as attendance, contribution at the meetings and otherwise, independent judgement, etc. The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors was carried out by the Independent Directors. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees. 14) REMUNERATION POLICY The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. 15) COMMITTES AND MEETINGS OF THE BOARD During the year under review 5 (five) Board Meetings and 4 (four) Audit and Risk Mangement Committee meetings were convened and held, the details of which are given more specifically in the Corporate Governance Report. During the year, the Board has constituted several new Committees and also re- constituted some of its existing Committees in accordance with the provisions of the Companies Act, 2013 and the Listing Agreement. The details of all the Committees of the Board including the Audit and Risk Management Committee, along with their charters, composition and meetings held during the year, are provided in the Report on Corporate Governance which forms part of this Annual Report. 16) DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 134 (5) of the Companies Act, 2013 ("the Act"), we hereby 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, if any; ii. Your 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 its loss for the year ended on that date; iii. Your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. Your Directors have prepared the Annual Accounts for the year ended 31st March, 2015 on a going concern basis; v. The Directors have laid down internal financial controls which are followed by the Company and that such internal financial controls are adequate and are operating effectively. vi. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 17) REALTED PARTY TRANSACTIONS The related party transaction that was entered into during the financial year was on an arm's length basis and was in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel which may have a potential conflict with the interest of the Company at large. The policy on Related Party Transactions as approved by the Board was uploaded on the Company's website at www.integragarments.com . None of the Directors have any pecuniary relationships or transactions vis-avis the Company. 18) AUDITORS 18.1 Statutory Auditors and Audit Reports The Company's Auditors i.e. M/s. D. Dhadeech & Co., Chartered Accountants, Mumbai have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder. As required under Clause 49 of the Listing Agreement, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Audit Report to the shareholders for the year under review does not contain any qualifications. 18.2 Secretarial Audit and Secretarial Audit Report Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the company has appointed Mr. Dhrumil M Shah of M/s Dhrumil M. Shah & Co., Company Secretaries in practice to undertake the Secretarial Audit of the Company for the Financial Year 2014-2015. The Secretarial Audit report appended as "Annexure A" There were no qualifications, reservations, adverse remarks or disclaimers in the report of Statutory Auditors of the Company. 19) CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSION ANALYSIS The Corporate Governance Report and Management Discussion & Analysis Report, which form an integral part of this report, are set out as separate Annexures, together with the Certificate from Mr. Dhrumil M. Shah, Practicing Company Secretaries, (FCS No. 8021) regarding compliance with the requirement of Corporate Governance as stipulated in clause 49 of the Listing Agreement 20) EXTRACTS OF ANNUAL RETURN The details forming part of the extract of Annual Return in form MGT 9 is appended as "Annexure B" to this report. 21) PARTICULARS OF EMPLOYEES During the year under review, the Company has not paid any amount by way of remuneration, sitting fees, commission etc., to any of its Directors and hence, the provisions of Section 197(12) read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014 are not applicable to your Company. 22) ENERGY CONSERVATION AND TECHNOLOGY ABSORPTION The information on Conservation of Energy and Technology absorption under section 134(3) (m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is Annexed herewith as "Annexure C". 23) FOREIGN EXCHANGE EARNINGS AND OUTGO During the year under review, foreign exchange earnings and outgoings are Nil. 24) SIGNIFICANT AND MATERIAL ORDERS There were no significant and material order passed by any Regulators or Court or Tribunals during the year ended 31st March, 2015 impacting the going concern status and company's operations in future. 25) PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, no complaints were received for Redressal. 26) PREVENTION OF INSIDER TRADING Your Company has adopted the Code of Fair Disclosure and Code of Conduct for regulating the dissemination of Unpublished Price Sensitive Information and trading in securities by promoters, Directors and designated employees 27) ACKNOWLEDGEMENTS Your Company and its Directors wish to extend their sincere thanks to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous cooperation and assistance. For and on behalf of the Board of Directors Harsh A. Piramal Chairman 27th May, 2015 Mumbai |