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United Polyfab Gujarat Ltd.

BSE: 533024 Sector: Industrials
NSE: UNITEDPOLY ISIN Code: INE368U01011
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United Polyfab Gujarat Ltd. (UNITEDPOLY) - Director Report

Company director report

To

THE MEMBERS

UNITED POLYFAB GUJARAT LIMITED

Your Director has pleasure in presenting their 6th Annual Report on theBusiness and operation of the Company and the Accounts for the Financial Year ended 31stMarch 2016.

1. FINANCIAL SUMMARY OR HIGHLIGHTS / PERFORMANCE OF THE COMPANY

The Financial results for the year ended 31st March 2016 and thecorresponding figures for the last year are as under:-

PARTICULARS 2015-16 2014-15
Profit Before Interest Depreciation & Tax 35555703 28224137
Less: Finance Cost 6178660 4342283
Less: Depreciation & Amortization Expenses 17827644 17359824
Profit before Tax 11549399 6522030
Provision for Tax 2455000 1250000
Income Tax (JV) -- --
Deferred Tax 1231140 772724
Profit after Tax 7863259 4499306
Less: Proposed Dividend & Tax thereon -- --
Balance carried to Balance Sheet 7863259 4499306

2. FINANCIAL YEAR

The Company closed its Financial Year on March 31st 2016. The Financialresult for year ended 31st March 2016 has been reviewed by the Audit Committee andapproved by Board of Directors in their meetings held on 2nd May 2016.

3. BRIEF DESCRIPTION OF THE COMPANY'S WORKING

Your Directors have pleasure to inform you that the company's gross revenue increasedfrom Rs. 312148816 in F.Y- 2014-15 to Rs. 345987272 in F.Y- 2015-16 and profit aftertax increased from Rs. 4499306 in F.Y- 2014-15 to Rs. 7863259 in F.Y- 2015-16.

4. CHANGE IN THE NATURE OF BUSINESS

There is no Change in the Nature of Business of the Company done during the Year.

5. DIVIDEND

To strengthen the financial position of the Company and to augment working capital yourDirectors regret to declare any dividend.

6. FUTURE PROSPECTS

The Company is one of the leading composite units for manufacturing of Grey Cloth andFabrics and trading of Denims. The Company's work is based on end-users requirementsmarket trends newly developed raw materials and uses. Presently the yarn used for theproduction of grey cloth is purchased by the Company from the local market. Looking at thehuge opportunity and readily available customers the Company has planned to undertakebackward integration by setting up its own manufacturing plant for spinning of yarn of30's and 40's Count to sell yarn under its own brand name. The Company has set up theplant near Dholka in Gujarat which is a cotton growing and processing area. The locationof the unit is also in in close proximity to many cotton ginning units and to the majoryarn and fabric trading centre at Ahmedabad. Thus the Project is expected to have easyaccess to raw materials and a strong network of dealers for finished products. The companyis in process of executing its plan to install 20064 spindles that will produce 30'scount and 40's count yarn. The Project is expected to commence commercial operations fromJanuary 2017 i.e. in the financial year 2016-17.

7. INDUSTRIAL RELATIONS

During the Year under review Your Company enjoyed cordial relationship with workersand employees at all levels.

8. INCREASE IN AUTHORISED CAPITAL

Company's Authorised Capital increased from Rs. 30000000 (Rupees Three Crores only)to Rs. 50000000 (Rupees Five Crore only) by addition of 2000000 Equity Shares of Rs.10/- each ranking paripassu in all respects with the existing equity shares of thecompany.

9. SUBSIDIARY JOINT VENTURE AND ASSOCIATED COMPANIES.

The Company does not have any Subsidiary Joint Venture and Associated Companies.

10. MEETINGS

Thirteen Meetings of the Board of Directors were held during the Financial Year; asdetailed here under:

Sr No. Date of Meeting Total No. of Directors on the Date of Meeting No. Of Directors Attended % of Attendance
1 15-04-2015 4 4 100 %
2 02-05-2015 4 4 100 %
3 15-05-2015 4 4 100 %
4 30-06-2015 4 4 100 %
5 20-07-2015 4 4 100 %
6 05-10-2015 4 4 100 %
7 02-11-2015 4 4 100 %
8 16-11-2015 4 4 100 %
9 19-11-2015 4 4 100 %
10 24-12-2015 4 4 100 %
11 12-01-2016 6 6 100 %
12 19-01-2016 5 5 100 %
13 22-03-2016 5 5 100 %

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Following Changes took place in Directors and KMP during the year under review

Name DIN/PAN Designation at the beginning / during the financial year Date of appointment/ change in designation/ cessation Nature of change (Appointment/ Change in designation/ Cessation)
Anjali Vasudev Sangtani AXQPA3048M Company Secretary 19/11/2015 Appointment
Harshad Kumar Parmar BQNPP6520L Chief Financial Officer (CFO) 24/12/2015 Appointment
Anchit Anjani Kumar Agrawal 07379293 Director 24/12/2015 Appointment
Parth Hirenkumar Doshi 07380365 Director 24/12/2015 Appointment
Sejalben Shantilal Parmar 07401639 Director 12/01/2016 Appointment
Shilpa Gagan Mittal 03055240 Director 12/01/2016 Cessation
Neeti Hada 03055264 Director 12/01/2016 Cessation
Ritesh Hada 01919749 Director 12/01/2016 Change in Designation
Gagan Nirmal Mittal 00593377 Managing Director 16/01/2016 Change in Designation

12. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SECTION 149(6).

The Independent Directors have submitted their declarations of independence asrequired pursuant to the provisions of section 149(7) of the Act stating that they meetthe criteria of independence as provided in section 149[6].

13. COMPANY'S POLICY RELATING TO DIRECTOR'S APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES.

Company in pursuant to section 178 of the Companies Act 2013 and SEBI ListingRegulations 19 constituted Nomination and Remuneration Committee in the Board Meetingheld on January 19 2016.

The members of the Nomination and Remuneration Committee are as follows:

Name of the Directors Designation Nature of Directorship
Mr. Parth Doshi Chairman Non Executive and Independent
Mr. Anchit Agrawal Member Non Executive and Independent
Ms. SejalParmar Member Non Executive and Independent

Compliance officer will act as the secretary of the Committee.

The committee shall be governed by the "Terms of Reference" of the Nominationand Remuneration

Committee as under and will carry out the following:-

The terms of reference of the Nomination and Remuneration Committee are:

a) Formulation of the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board a policy relating to theremuneration of the directors key managerial personnel and other employees;

b) Identifying persons who are qualified to become directors and who may be appointedin senior management in accordance with the criteria laid down and recommend to the Boardof Directors their appointment and removal and shall carry out evaluation of everydirector's performance.

c) Formulation of criteria for evaluation of Independent Directors and the Board;

d) Devising a policy on Board diversity;

e) Deciding on whether to extend or continue the term of appointment of theindependent director on the basis of the report of performance evaluation of independentdirectors

f) Decide the salary allowances perquisites bonuses notice period severance feesand increment of Executive directors.

g) Define and implements the performance Linked Incentive Scheme (including ESOP of theCompany) and evaluate the performance and determine the amount of incentive of theExecutive Directors for that purpose.

h) Decide the amount of Commission payable to the Whole time Directors.

i) Review and suggest revision of the total remuneration package of the ExecutiveDirectors keeping in view the performance of the company standards prevailing in theindustry statutory guidelines etc.

j) To formulate and administer the Employee Stock Option Scheme.

k) To ensure that the relationship of remuneration to performance is clear and meetsappropriate performance benchmarks.

14. CONSTITUTION OF AUDIT COMMITTEE

Company pursuant to section 177 of the Companies Act 2013 and SEBI Listing Regulations18 constituted Audit Committee in the Board Meeting held on January 19 2016.

The members of the Audit Committee are as follows:

Name of the Directors Designation Nature of Directorship
Mr. Parth Doshi Chairman Non Executive and Independent
Mr. Anchit Agrawal Member Non Executive and Independent
Mr. Gagan Mittal Member Executive and Managing Director

Compliance officer will act as the secretary of the Committee.

The terms of reference of the Audit Committee are:

The terms of reference of Audit Committee comply with the requirements of SEBI ListingRegulations 18.

Role of Audit Committee

The scope of audit committee shall include but shall not be restricted to thefollowing:

1. Oversight of the company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statement is correct sufficient andcredible;

2. Recommending to the Board the appointment re-appointment and if required thereplacement or removal of the statutory auditor and the fixation of audit fees;

3. Approval of payment to statutory auditors for any other services rendered by thestatutory auditors;

4. Reviewing with the management the annual financial statements before submission tothe board for approval with particular reference to:

a. Matters required to be included in the Director's Responsibility Statement to beincluded in the Board's report in terms of clause (c) of sub section 3 of section 134 ofthe Companies Act 2013

b. Changes if any in accounting policies and practices and reasons for the same

c. Major accounting entries involving estimates based on the exercise of judgment bymanagement

d. Significant adjustments made in the financial statements arising out of auditfindings

e. Compliance with listing and other legal requirements relating to financialstatements

f. Disclosure of any related party transactions

g. Modified opinion(s) in the draft audit report.

5. Reviewing with the management the quarterly financial statements before submissionto the board for approval;

6. Reviewing with the management the statement of uses / application of funds raisedthrough an issue (public issue rights issue preferential issue etc.) the statement offunds utilized for purposes other than those stated in the offer document/Draftprospectus/notice and the report submitted by the monitoring agency monitoring theutilization of proceeds of a public or rights issue and making appropriaterecommendations to the Board to take up steps in this matter;

7. Review and monitor the auditor's independence performance and effectiveness of auditprocess;

8. Approval or any subsequent modification of transaction of the company with relatedparties;

9. scrutiny of inter-corporate loans and investments;

10. Valuation of undertaking or assets of the company wherever it is necessary;

11. Evaluation of internal financial controls and risk management systems;

12. Reviewing with the management performance of statutory and internal auditors andadequacy of the internal control systems;

13. Reviewing the adequacy of internal audit function if any including the structureof the internal audit department staffing and seniority of the official heading thedepartment reporting structure coverage and frequency of internal audit;

14. Discussion with internal auditors any significant findings and follow up there on;

15. Reviewing the findings of any internal investigations by the internal auditors intomatters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the board;

16. Discussion with statutory auditors before the audit commences about the nature andscope of audit as well as post-audit discussion to ascertain any area of concern;

17. To look into the reasons for substantial defaults in the payment to the depositorsdebenture holders shareholders (in case of non payment of declared dividends) andcreditors;

18. To oversee and review the functioning of the Whistle Blower mechanism in case thesame is existing;

19. Calls for comments of the auditor about the internal control systems scope ofauditing including the observations of the auditor and review of the financial statementsbefore submission to the board;

20. Approval of appointment of CFO (i.e. the whole-time Finance Director or any otherperson heading the finance function or discharging that function) after assessing thequalifications experience & background etc. of the candidate;

21. To investigate any other matters referred by any of the Board of Director

22. Carrying out any other function as is mentioned in the terms of reference of theAudit Committee.

Review of information by Audit Committee

The audit committee shall mandatorily review the following information:

1. Management discussion and analysis of financial condition and results of operations;

2. Statement of significant related party transactions (as defined by the auditcommittee) submitted by management;

3. Management letters / letters of internal control weaknesses issued by the statutoryauditors;

4. Internal audit reports relating to internal control weaknesses; and

5. The appointment removal and terms of remuneration of the Chief internal auditorshall be subject to review by the Audit Committee.

6. To submit statement of Deviations:

i. Quarterly statements of deviation(s) including report of monitoring agency ifapplicable submitted to stock exchange(s) in terms of Regulation 32(1) of SEBI ListingRegulations.

ii. Report of the monitoring agency on annual statement of funds utilised for purposesother than those stated in the offer documents in terms of Regulation 32(6) SEBI ListingRegulation if applicable

The recommendation of the Audit Committee on any matter relating to financialmanagement including the audit report is binding on the Board. If the board is not inagreement with the recommendations of the committee reason for disagreement shall beincorporated in the minutes of the board meeting and the same has to be communicate toshareholders. The Chairman of the Audit committee has to attend the Annual General Meetingof the Company to provide clarification on matter relating to the Audit.

Powers of the Audit Committee:

The audit committee shall have the powers which should include the following:

1. To investigate any activity within its terms of reference;

2. To seek information from any employees;

3. To obtain outside legal or other professional advice; and

4. To secure attendance of outsiders with relevant expertise if it considersnecessary.

Quorum and Meetings

The audit committee shall meet at least four times in a year and not more than onehundred and twenty days shall elapse between two meetings. The quorum shall be either twomembers or one third of the members of the audit committee whichever is greater but thereshall be a minimum of two Independent Directors present.

15. CONSTITUTION OF STAKEHOLDER RELATIONSHIP COMMITTEE

Company in pursuant to pursuant to section 178 of the Companies Act 2013 and SEBIListing Regulations 20 constituted Stakeholder Relationship Committee in the BoardMeeting held on January 19 2016.

The members of the Stakeholder Relationship Committee are as follows:

Name of the Directors Designation Nature of Directorship
Mr. Anchit Agrawal Chairman Non Executive and Independent
Mr. Parth Doshi Member Non Executive and Independent
Ms. Sejal Parmar Member Non Executive and Independent

Compliance officer will act as the secretary of the Committee.

The committee shall be governed by the "Terms of Reference" of theStakeholder Relationship Committee as under and will carry out the following:-

The terms of reference of the Stakeholder Relationship Committee are:

> transfer of shares; including review of cases for refusal of transfer /transmission of shares splitting of shares changing joint holding into single holdingand vice versa issue of duplicate shares in lieu of those torn destroyed lost ordefaced or where the cages in the reverse for recording transfers have been fullyutilized;

> Issue duplicate/split/consolidated share certificates;

> Review the process and mechanism of redressal of Shareholders/ Investor grievanceand suggest measures of improving the system of redressal of shareholders/ Investorgrievance.

> Redressal of shareholder and investor complaints like transfer of Sharesnon-receipt of balance sheet non-receipt of declared dividends etc.

> Oversee the implementation and compliance of the Code of conduct adopted by theCompany for prevention of Insider Trading for Listed Companies as specified in theSecurities & Exchange Board of India (Prohibition of Insider Trading) Regulation 2015as amended from time to time.

> Oversee the performance of Registrar & Share Transfer Agent and also reviewand take note of complaints directly received and resolved them.

> Any other power specifically assigned by the Board of Directors of the Companyfrom time to time by way of resolution passed by it in a duly conducted Meeting:

> Carrying out any other function contained in the equity listing agreement as andwhen amended from time to time.

Quorum and Meetings

The Stakeholder Relationship Committee shall meet at least four times a year withmaximum interval of four months between two meetings and shall report to the board on aquarterly basis regarding the status of redressal of complaints received from theshareholders of the company. The quorum should be two members present.

The quorum necessary for a meeting of the Stakeholders Relationship Committee shall betwo members or one third of the members whichever is greater.

16. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS.

During the Year following significant and material orders passed by the regulators orcourts or tribunals:-

Particulars Date of Order Authority Passing order/Granting Certificate
1 Conversion of Private Limited Company to Public Limited Company. [Pursuant to Conversion Name Changed from United Polyfab (Unit-II) Private Limited to United Polyfab (Unit-II) Limited.] Decemb er 3 2015 Mr. Rathod Kamleshkumar Gangjibhai -Assistant ROC ROC Ahmedabad.
2 Name Changed from United Polyfab (Unit-II) Limited to United Polyfab Gujarat Limited. Decemb er 112015 Mr. Vyomesh Rajeshkumar Sheth- Assistant ROC ROC Ahmedabad.

17. CHANGES IN SHARE CAPITAL

The Company has not issued any Equity Shares during the year under review.

Company is going for Initial Public Offer of 1701000 Equity Shares of Face Value ofRs. 10/- each for Cash at a price of Rs. 45 per Equity share including a share premium ofRs. 35 per Equity Share aggregating to Rs. 765.45 Lacs.

Above Issue of Shares was approved by the Shareholders in Extra Ordinary GeneralMeeting held on January 16 2016.

18. LISTING OF EQUITY SHARES ON NSE (EMERGE) PLATFORM

During the year under review your company has applied for listing of Equity Shares onthe NSE (EMERGE) PLATFORM In Principal Approval was granted to our Company vide Letterdated April 15 2016 to open proposed issue for subscription within a period of 12 Monthsfrom the date of issuance of the above Letter.

19. STATUTORY AUDITORS:

NAHTA JAIN & ASSOCIATES (106801W) Chartered Accountants Statutory Auditors theretiring auditors during the Annual General Meeting held on 30.09.2014 were appointedfor a period of 5 years until the conclusion of sixth Annual General Meeting to be heldafter that meeting subject to ratification at every Annual General Meeting in terms ofSection 139 of the Companies Act 2013. They have confirmed their eligibility andwillingness for the next term from the conclusion of ensuing annual general meeting to theconclusion of next annual general meeting. The Board of Directors therefore recommendsratification of appointment for F.Y. 2016-17 of Nahta Jain & Associates (106801W)Chartered Accountants as statutory auditors of the company for the approval ofShareholders.

20. AUDITORS' REPORT :

The Auditors' Report does not contain any qualification. Notes to Accounts andAuditors' remarks in their report are self-explanatory and do not call for any furthercomments.

21. EXTRACT OF ANNUAL RETURN

As required pursuant to Section 92(3) of the Companies Act 2013 and Rule 12 (1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT-9forms part of this Annual Report as ANNEXURE 'A'.

22. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

The details of Loans Guarantee securities and investment are provided in the notes tothe financial statement of the Company forming part of this Annual Report.

23. DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES :

No agreement was entered with related parties by the Company during the current year.

All the related party transactions were entered by the Company in ordinary course ofbusiness and were in arm's length basis. The Company presents all related partytransactions before the Board specifying the nature value and terms and conditions ofthe transaction. Transactions with related parties are conducted in a transparent mannerwith the interest of the Company and Stakeholders as utmost priority. Same details havebeen provided in AOC-2 as ANNEXURE 'B' which forms part of this Annual Report.

25. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013.

The company has in place a policy for prevention of sexual harassment in accordancewith the requirements of the Sexual Harassment of women at workplace (PreventionProhibition & Redressal) Act 2013. Internal Complaints Committee has been set up toredress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy. The Company did notreceive any complain during the year 2015-16.

26. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREGIN EXCHANGE EARNING ANDOUTGO :

Information on Conservation of Energy Technology Absorption Foreign Exchange Earningsand outgo as required to be disclosed under section 134[3][m] of the act read with theCompanies (Accounts) Rules 2014 are provided in the ANNEXURE 'C' and forms part ofthis report.

27. DIRECTORS'S RESPONSIBILITY STATEMENT:

The Directors' Responsibility Statement referred to in clause (c) of Sub- section (3)of Section 134 of the Companies Act 2013 shall state that

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) The director had selected such accounting policies and applied them consistentlyand made Judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the director had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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;

(e) the directors had devised proper system to ensure compliance with the provisions ofall applicable laws and that such system were adequate and operating effectively.

28. ACKNOWLEDGEMENTS

The Directors place on record their sincere appreciation for the assistance andco-operation extended by Bank its employees its investors and all other associates andlook forward to continued fruitful association with all business partners of the Company.

Place: Ahmedabad
Date: 2nd May 2016 By order of the Board of Directors
For UNITED POLYFAB GUJARAT LIMITED
Mr. Gagan Mittal
(Managing Director)
(DIN-00593377)