Your Directors are pleased to present herewith the 5th Annual Report on the businessand operations of the Company and the Audited Accounts for the year ended 31st March2016.
1. Financial Results and Operations
The summarized financial results for the year ended 31st March 2016 as compared withthe previous year are as under:
| || ||Rs. in Lakhs |
|Particulars ||For the year 2015-16 ||For the year 2014-15 |
|a. Sales ||374.79 ||414.42 |
|b. Profit/ Loss before Interest Depreciation & Tax ||(17.37) ||22.55 |
|c. Less: Interest ||0.01 ||0.01 |
|d. Less: Depreciation ||13.58 ||13.30 |
|e. Profit before Tax ||(30.96) ||5.24 |
|f. Less: Tax || ||4.00 |
|g. Add: Deferred ||0.75 ||(2.20) |
|h. Net Loss ||(31.71) ||(0.96) |
During the year under review the company has achieved a turnover of Rs.374.79 Lakhs asagainst Rs.414.42 Lakhs in the previous year. During the Year the company incurred a Netloss before tax of Rs.30.96 Lakhs as against a profit of Rs.5.24 Lakhs in the previousyear.
Due to losses incurred the Company has not recommended any dividend for the year underreview.
The Company has not accepted any fixed deposits from the public and no amount ofprincipal or interest on public deposits was outstanding as on the balance sheet datewithin the meaning of section 73 and section 74(1) of the Companies Act 2013 and Rule2(c) of Companies (Acceptance of Deposits) Rules 2014.
4.Transfer to Reserves
No amount was transferred to the Reserves for the year ending 31.03.2016 since thecompany has incurred losses during the period.
5. Changes In MOA and AOA
During the year the Company has altered its objects and increased its Authorised ShareCapital from existing Rs.35000000 (Rupees Three Crores Fifty Lakhs) divided into3500000 (Thirty Five Lakhs) Equity Shares of Rs.10/- each to Rs.50000000 (Rupees FiveCrores) divided into 5000000 (Fifty Lakhs) Equity Shares of Rs.10/- each by creation ofadditional 1500000 (Fifteen Lakhs) Equity Shares of Rs.10/- each with the prior approvalof shareholders through Postal Ballot notice dated 17th February 2016.
Also the Company has changed its name to URBAKNITT FABS LIMITED with the prior consentof shareholders at the Extra-Ordinary General Meeting dated 09th May 2016.
6.Board of Directors
Relevant information on composition of the Board and number of meetings is provided inBoar d of Directors section of Corporate Governance Report which forms part of this AnnualReport.
During the year the Board of Directors have appointed Smt. Manju Goel as anAdditional Director of the Company in the capacity of Women Director with effect from30th March 2015 and appointed Shri Vijay Sushil Kumar Surana Shri Dilip Kumar Suranaand Shri Manoj Kumar as Additional Directors of the Company with effect from 31st March2015 and 1st July 2015 respectively.
Smt. Manju Goel in the capacity of a Non-Executive Non Independent WomenDirector Shri Vijay Sushil Kumar Surana Shri Dilip Kumar Surana and Shri Manoj Kumar inthe capacity of Independent Directors were regularised as Directors at Annual GeneralMeeting held on Monday 28th day of September 2015.
Smt. Renu M Dugar in the capacity of a Non-Executive Non Independent WomenDirector and Shri Arvind Surana in the capacity of Independent Director has been appointedas Directors through Postal Ballot held on 17th December 2015.
During the year Shri Raja Goel Shri PVR Iyengar and Shri Sandeep Gupta allIndependent directors resigned from the office on the 17th December 2015 and Smt. ManjuGoel Non executive Women Director resigned from the office of Board on 13th February2016 respectively citing personal preoccupations.
The board places on record the valuable contribution made by the directorsduring their term of office.
Statement on Declaration given by Independent Directors under sub-Section (6) ofSection 149.
The Independent Directors have submitted the Declaration of Independence as requiredpursuant to Section 149(7) of the Companies Act 2013 stating that they meet the criteriaof Independence as provided in sub-section (6).
Disclosures about receipt of any commission by MD / WTD from company or anycommission/remuneration from the subsidiaries
The Managing Director or Whole time directors are not in receipt of any commissionfrom the company or any remuneration or commission from the subsidiaries.
7. Evaluation of the Boards Performance
In compliance with the Companies Act 2013 and Clause 27 of the SEBI (ListingObligations and
Disclosure Requirements) Regulations 2015 the performance evaluation of the Board andof its Committees was carried out during the year under review. More details on the sameis in the Corporate Governance Report.
8.Familiarization Programme for Independent Directors
The company has formulated a familiarization Programme for the Independent Directors toprovide insights into the company to enable the Independent Directors to understand itsbusiness in depth and contribute significantly to the company.
9. Nomination and Remuneration Policy
The company follows a policy on remuneration of Directors and Senior ManagementEmployees. The policy is approved by the Nomination and Remuneration Committee and theBoard. More details on the same are given in the Corporate Governance Report.
10. Directors Responsibility Statement
In accordance with clause (c) of sub-section 3 of section 134 of the Companies Act2013 the Directors of the Company state:
a. That in the preparation of the accounts for the financial year ended 31st March2016 the applicable accounting standards have been followed along with proper explanationrelating to material departures.
b. That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for the year under review.
c. That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safe guarding the assets of the Company and for preventing and detecting fraud andother irregularities.
d. That the Directors have prepared the accounts for the financial year ended 31stMarch 2016 on a going concern basis.
e. That the directors have laid down internal financial controls to be followed by thecompany and that such financial controls are adequate and operating effectively.
f. The Directors had devised proper systems to ensure Compliance with the provisions ofall applicable Laws and that such systems were adequate and operating efficiently.
11. Particulars of Employees
The remuneration paid to your Directors is in accordance with the Nomination andRemuneration Policy formulated in accordance with Section 178 of the Companies Act 2013and Regulation 19 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirement) Regulations 2015 (including any statutory modification (s) orre-enactment(s) for the time being in force). The silent aspects covered in the Nominationand Remuneration Policy have been outlined in the Corporate Governance Report which formspart of this report.
The information required under Section 197 (12) of the Act read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as AnnexureI.
a) Statutory Auditors
The Statutory Auditors of the company M/s. Luharuka & Associates CharteredAccountants Hyderabad (Firm No. 01882S) retire at the ensuing Annual General Meeting andare eligible for re-appointment. Your company has received intimation to the effect thatProposed re-appointment if made would be within the Prescribed limit under Section 141 ofthe Companies Act 2013 and also in compliance with the requirements of the ListingAgreement regarding Peer Review. They have confirmed their willingness to accept officeif re-appointed.
The Board based on the recommendation of the Audit Committee recommend the appointmentof M/s. Luharuka & Associates Chartered Accountants as Statutory Auditors of theCompany.
The Auditors Report to the Shareholders for the year under review does not contain anyQualifications.
b) Internal Auditor
The Board of Directors based on the recommendation of the Audit Committee havereappointed Mr. Suresh Chandra Agarwal Chartered Accountant as the Internal Auditor ofyour Company. The Internal Auditor is submitting their reports on quarterly basis.
c) Secretarial Auditors
The Board has appointed Mr. Y Koteswara Rao Company Secretary in Practice to carrythe Secretarial Audit under the provisions of section 204 of the Companies Act 2013 forthe financial year 2015-16. The Report of the Secretarial Auditor is annexed to thisreport as Annexure - II.
13.Risk Management Policy
The company has instituted a proper mechanism for identifying and establishing controlsto effectively manage different kinds of risks. At present the threats risks and concernsbeing felt are stiff competition in the market consolidation of manufacturers who havebranded products and fluctuations in prices as well as availability of raw materials.
14. Vigil Mechanism
The Company has established a vigil mechanism and oversees through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co employees and the Company.The company has also set out a whistle blower policy in terms of the SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 so as to ensure that thebusiness is conducted with integrity and the companys financial information is accurate.
The Policy on Vigil Mechanism and whistle blower policy may be accessed on the companyswebsite.
15. Declaration about Compliance with Code of Conduct by Members of the Board andSenior Management Personnel
The company has complied with the requirements about the Code of Conduct for Boardmembers and Senior Management Personnel.
16. Disclosure under the Sexual Harassment of Women at workplace (PreventionProhibition and Re-dressal) Act 2013
The company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at workplace (Prevention Prohibition and R-edressal)Act 2013. All employees (permanent contractual temporary and trainee) are covered underthe Policy. The following is a summary of sexual harassment complaints received anddisposed off during each year:
|a) No. of Complaints Received ||: NIL |
|b) No. of Complaints Disposed off ||: NIL |
17. Conservation of Energy Technology Absorption Foreign Exchange Earning and Outgo
Particulars pursuant to the provisions of section 134 read with rule 8 of Companies(Accounts) Rules2014 of the Companies Act 2013 are given in the Annexure III forming apart of this Report.
18. Disclosures Under The Companies Act 2013
I. Extract of Annual Return
An Extract of Annual Return prepared in accordance with section 92(3) of the CompaniesAct 2013 in Form MGT-9 is annexed as AnnexureIV to this Report.
ii. Number of Board Meetings
The Board of Directors met Six (6) times during the year 2015-16. The details of BoardMeeting and attendance of Directors is provided in the Corporate Governance Report.
iii. Change in Share Capital
The Company has increased Share Capital from Rs.35000000 to Rs.50000000/- throughpostal ballot dated 17th February 2016 during the year 2015-16.
iv. Composition of Audit Committee
The Board has constituted the Audit Committee which comprises of Shri Manoj Kumar asthe Chairman and Shri Manoj Kumar Dugar Shri Vijay Sushil Kumar Surana and Shri DilipKumar Surana are the members of the committee. More details on the Committee are given inthe Corporate Governance Report forming a part of this Report.
v. Related Party Transaction
All Related Party Transactions are entered on Arms Length basis and are in complianceof the Companies Act 2013 and the Listing Agreement.
There are no materially significant related party transactions made by the company withPromoters Directors or Key Managerial Personnel etc. which may have potential conflictwith the interest of the company at large.
All Related Party Transactions are presented to the Audit Committee and the Board.Approval is obtained for transactions which are foreseeable and repetitive in nature. Astatement of all Related Party Transactions is presented before the Audit Committee onquarterly basis specifying the nature value and terms and conditions of thetransactions.
vi. Loans/ Guarantees/ Investments under section 186 of Companies Act 2013
NO Loans/ Guarantees/ Investments under section 186 of Companies Act 2013 have beenmade during the year 2015-16.
19. Corporate Governance
Pursuant to Regulation 27 of the SEBI (Listing Obligation and Disclosure Requirement)Regulations 2015 a separate report on corporate governance has been included in thisAnnual Report in Annexure V together with a certificate from the Practicing CompanySecretary regarding compliance of conditions of Corporate Governance.
All Board members and senior management personnel have affirmed compliance with theCode of Conduct for the year 2015-16. A declaration to this effect signed by the ManagingDirector of the Company is contained in this Annual Report.
20. Management Discussion and Analysis Report
Pursuant to the provisions of Clause 27 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a report on Management Discussion & Analysis isherewith annexed as Annexure VI to this report.
21. Significant and Material Orders passed by the Regulators or Courts
There are NO material significant orders passed by the Regulators or Courts which wouldimpact the going concern status of the company and its future operations.
22. Human Resource
Your company considers its Human Resources as the key to achieve its objectives.Keeping this in view your company takes utmost care to attract and retain qualityemployees. The employees are sufficiently empowered and the work environment propels themto achieve higher levels of performance. The unflinching commitment of employees is thedriving force behind the companys vision. Your company appreciates the dedication of itsemployees.
23. Details of Policy developed and implemented by the company on its Corporate SocialResponsibility initiatives
The Companies Act 2013 lays down a mandatory provision wherein every company having
Net worth of rupees five hundred crore or more or
Turnover of rupees one thousand crore or more or
Net profit of rupees five crore or more
during any financial year shall constitute a Corporate Social Responsibility Committeeof the Board consisting of three or more directors out of which at least one directorshall be an independent director.
As the said provisions are not applicable to the company it has not developed andimplemented any Corporate Social Responsibility initiatives.
24.Transfer of Unclaimed Dividend to Investor Protection Fund.
The provisions of Section 125(2) of the Companies Act 2013 do not apply as there wasno dividend declared and paid last year.
Buy back of Securities
The Company has not bought back any of its securities during the financial year underreview.
The Company has not issued any Sweat Equity Shares during the financial year underreview.
No Bonus Shares were issued during the financial year under review.
Employees Stock Option Plan
The Company has not provided for any Stock Options to its employees during thefinancial year under review.
Your Directors wish to express their appreciation for the cooperation and continuedsupport received from the Industrial Development Bank of India the Companys Bankers. YourDirectors also take this opportunity to place on record their appreciation for thededicated services rendered by the executives managers officers employees and workersfor the dedication and sense of commitment shown by the employees at all levels and theircontribution towards the performance of the Company.
| ||By Order of the Board |
| ||For Urbaknitt Fabs Limited |
| ||(Formerly known as Pankaj Polypack Limited) |
| ||Sd/- |
|Place : Secunderabad ||Manoj Kumar Dugar |
|Date : 29.08.2016 ||Chairman & Managing Director |