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Directors Report of Vishal Fabrics Ltd.

Mar 31, 2015

To,

The Members,

The Directors have pleasure in presenting the 30th Annual Report along with Audited Financial Statements for the year ended March 31, 2015.

FINANCIAL RESULTS (Rs. in Lacs)

PARTICULARS 2014-15 2013-14

Net revenue from operations 22362.65 20402.93

Profit Before Depreciation & Tax 1297.88 1023.42

Less : Depreciation 305.85 695.59

Profit Before Tax 992.03 327.83

Less : Provision for Taxation (Including Deferred Tax) 58.43 38.36

Profit After Tax 933.60 289.47

Earnings per share (in Rs) 7.85 12.91

OPERATIONS

During the year under review your Company has achieved a turnover of Rs. 22362.65 Lac as compared to a turnover of Rs. 20402.93 Lac over the previous Financial Year which shows increase of 9.61%. The Profit Before Depreciation and Tax increased by 26.82% to Rs. 1297.88 Lac as compared to Rs. 1023.42 Lac in the Financial Year 2013-14. The Profit After Tax stood at Rs. 933.60 Lac against Rs. 289.47 Lac in the previous year, recording a growth of 222.52%.

SHARE CAPITAL

The Paid Up Equity Share Capital of the Company as on 31st March, 2014 was Rs. 970 Lac. During the year under review the Company has issued 34,74,000 Equity Shares through Initial Public Offering (IPO). Subsequently the Equity Shares of the Company were listed on the SME Platform of BSE Limited. As on 31st March, 2015, the Paid Up Equity Share Capital is Rs. 1317.40 Lac

DIVIDEND

The Board of Directors has not recommended any dividend during the year under review.

PUBLIC DEPOSITS

Your company has not accepted any Deposits from the public during the year under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

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.

BOARD OF DIRECTORS

Mr. Gautam Gandhi (DIN: 00049735) and Ms. Nitika Chiripal (DIN: 00154827) resigned from the Board w.e.f. April 29, 2015 and August 17, 2015 respectively due to their personal reasons. The Board places on record its appreciation for the valuable services rendered by them during their tenure as Directors of the Company.

Mr. Amit Kadmawala (DIN: 07016454) was appointed as an Additional Director by the Board of Directors w.e.f. November 13, 2014 and who shall hold office upto the date of ensuing Annual General Meeting. The company has received a notice from a member signifying his intention to propose his candidature for the office of a Director and accordingly it is proposed to appoint him as Director of the Company. Further pursuant to the provisions of the Companies Act, 2013, the Company approves of the appointment and terms of remuneration of Mr. Amit Kadmawala as a Whole – Time Director designated as an Executive Director of the Company.

Directors retiring by rotation

In accordance with the provisions of the Companies Act, 2013 and Companies Articles of Association, Mr. Jyotiprasad Chiripal (DIN: 00155695) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Necessary resolution for his re- appointment is placed before the shareholders for approval. The Board recommends his re-appointment.

Brief resume of the Directors being appointed / reappointed as required by the Listing Agreement is provided in the Notice convening the Annual General Meeting of the Company.

Declaration from Independent Directors

Your Company has received declaration from the Independent Directors confirming that they meet the criteria of independence as prescribed under the Section 149(6) of Companies Act, 2013 read with Rules made thereunder.

Company's Policy on appointment and remuneration of Directors Appointment of Independent Directors

With the coming into force of the Companies Act, 2013, Mr. Arakhita Khandual was appointed as Independent Director at the Annual General Meeting held on September 30, 2014.

Pursuant to the provisions of Section 161(1) of the Companies Act, 2013, Ms. Dhara Shah (DIN: 06983857) and Mr. Shubhankar Jha (DIN: 07208823) were appointed as an Additional Director designated as an Independent Director w.e.f. March 05, 2015 and May 28, 2015 respectively. They shall hold office up to the date of the ensuing Annual General Meeting. However as per provisions of the Companies Act, 2013, the Independent Directors are required to be appointed by shareholders and they shall not be liable to retire by rotation. The Company has received requisite notice in writing from member proposing Ms. Dhara Shah and Mr. Shubhankar Jha for appointment as Independent Directors. The Company has also received declaration from such Independent Directors that they meet the criteria of Independence as prescribed under section 149(6) of the Companies Act, 2013. Accordingly it is proposed to appoint them for a term of five consecutive years effective from the conclusion of this Annual General Meeting.

Criteria for appointment of Independent Directors

An Independent Director shall be a person of integrity and possess appropriate balance of skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing and technical operations or any other discipline related to the Company's business.

Criteria for appointment of Managing Directors / Whole - Time Directors

The appointment is made pursuant an established procedure which includes assessment of managerial skills, professional behavior, technical skills and other requirements as may be required and shall take into consideration recommendation, if any, received from any member of the Board.

Remuneration Policy

The Company follows a policy on remuneration of Directors and Senior Management Employees, details of the same are given in the Corporate Governance Report.

Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013, the Nomination and Remuneration Committee has laid down the criteria for evaluation of the performance of individual Directors and the Board as a whole. Based on the criteria the exercise of evaluation was carried out through a structured process covering various aspects of the Board functioning such as composition of the Board and committees, experience & expertise, performance of specific duties & obligations, attendance, contribution at meetings, etc. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Director. The performance of the Independent Directors was carried out by the entire Board (excluding the Director being evaluated). The Directors expressed their satisfaction with the evaluation process.

Key Managerial Personnel

During the year under review, Mr. Jyotiprasad Chiripal – Managing Director, Mr. Mahesh Kawat – Chief Financial Officer and Ms. Poonam Pabla – Company Secretary were designated as Key Managerial Personnel pursuant to the requirements of the applicable provisions of the Companies Act, 2013 read with rules made thereunder.

SUBSIDIARY COMPANY

The Company has no subsidiaries.

EXTRACT OF ANNUAL RETURN

Extract of the Annual Return in Form MGT - 9 is annexed herewith as Annexure - I to this Report.

INSURANCE

All assets of the company including inventories, building, plant and machineries are adequately insured.

RELATED PARTY TRANSACTIONS

The Company has no material significant transactions with its related parties which may have a potential conflict with the interest of the Company at large. Transactions between related parties were performed on arm's length price. The details of transactions with the Company and related parties are given as information under notes to Accounts and Form AOC – 2 as Annexure II.

RISKS MANAGEMENT POLICY

In line with the regulatory requirements, the Company has framed a Risk Management Policy to identify and access the key business risk areas and a risk mitigation process. A detailed exercise is being carried out at regular intervals to identify, evaluate, manage and monitor all business risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has framed a Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The details of the Policy are given in the Corporate Governance Report and the Policy is posted on the Company's website.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:

(i) that in the preparation of the accounts for the financial year ended 31st March 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 under review;

(iii) that the Directors have 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;

(iv) that the Directors have prepared the accounts for the financial year on going concern basis;

(v) the Directors have laid down internal financial controls, which are adequate and were operating effectively.

(vi) 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.

AUDITORS

A. STATUTORY AUDITORS

M/s Anil S. Shah & Co, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

B. COST AUDITORS

As per the provisions of Section 148 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014 framed thereunder and the Cost Audit Orders issued from time to time, Cost Audit was not applicable to the Company for the financial year 2014- 15. The Board of Directors have appointed M/s. A.G. Tulsian and Co., Cost Accountants, as Cost Auditors to audit cost records of the Company for the financial year 2015-16. A resolution seeking members' approval for the remuneration payable to them forms part of the Notice convening the AGM. Cost Audit Report for the Financial Year 2013-14 was filed with the Central Government pursuant to Section 233B of the Companies Act, 1956.

C. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Ms. Prerna Poddar and Associates, Practising Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report is annexed herewith as Annexure - III. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

MANAGEMENT DISCUSSION AND ANALYSIS

As stipulated in Clause 52 of the Listing Agreement, the Management Discussion and Analysis Report forms part of this Annual Report.

NUMBER OF MEETINGS OF THE BOARD

The details of the number of Board Meetings of the Company held during the year under review are set out in the Corporate Governance Report which forms part of this Annual Report.

CORPORATE GOVERNANCE REPORT

A report on Corporate Governance as stipulated under clause 52 of the Listing Agreement with the Stock Exchange forms part of the Annual Report. Certificate from the Practising Company Secretary confirming compliance of the conditions of Corporate Governance as stipulated under the aforesaid clause 52 forms part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of the Companies Act, 2013 were not applicable to the Company for the Financial Year 2014-15. However as the Net Profit of the Company for the financial year 2014-15 have exceeded the limits mentioned in Section 135, the Company has constituted a Corporate Social Responsibility Committee in their Board Meeting held on May 28, 2015.

INTERNAL CONTROL SYSTEM

The details in respect of the internal financial control and their adequacy are included in Management Discussion and Analysis Report, which forms part of the report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, required to be disclosed by Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are provided in the Annexure - IV to this report.

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure V to this Report.

APPRECIATION AND ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for the assistance and co-operation received from the Banks, customers, business associates and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

For and on behalf of the Board

Date: August 17, 2015 Jyotiprasad Chiripal

Place: Ahmedabad Managing Director


Mar 31, 2014

The Members,

Vishal Fabrics Limited,

Ahmedabad

The Directors take pleasure in presenting 29th Annual Report along with Audited Financial Statements of your Company for the period from April 01, 2013 to March 31, 2014.

FINANCIAL HIGHLIGHTS (Rs. in crore)

FINANCIAL RESULTS 2013-14 2012-13

Turnover 204.03 183.25

Other income 0.08 0.10

Less : Expenditures 200.84 180.71

Exceptional items 0.01 0.04

Profit Before Tax 3.28 2.67

Less : Provision for Taxation (Including Deferred Tax) 0.38 0.61

Profit After Tax 2.89 2.07

Add : Profit Brought Forward 32.49 30.42

Less : Issue of Bonus Shares 2.69 -

Profit Carried Forward 32.70 32.49

PERFORMANCE

During the year under review your Company has achieved a turnover of Rs. 204.03 crore as compared to a turnover of Rs. 183.25 crore over the previous financial year which shows increase of 11.34%. The Profit Before Tax was 3.28 crore as against previous year Profit Before Tax of Rs. 2.67 crore. The Net Profit during the year was Rs. 2.89 crore as compared to previous year figure of Rs. 2.07 crore registering the rise of 39.61%. Your Directors expect to improve the performance during the current year looking at the overall planning and market conditions to achieve the valuable growth in the current year.

DIVIDEND

The Board of Directors has not recommended any dividend during the year under review.

PUBLIC DEPOSITS

Your company has not accepted any Deposits from the public as defined under section 58A of the Companies Act, 1956 and rules made there under.

BOARD OF DIRECTORS

In accordance with the provisions of the Companies Act, 2013, Mr. Jyotiprasad Chiripal, (DIN: 00155695) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Ms. Nitika Chiripal (DIN: 00154827) was appointed as an Additional Director by the Board of Directors w.e.f. April 4, 2014 and who shall hold office upto the date of ensuing Annual General Meeting. The company has received a notice from a member signifying his intention to propose her candidature for the office of a Director and accordingly it is proposed to appoint her as Director of the Company.

Pursuant to the provisions of Section 161 of the Companies Act, 2013, Mr. Gautam Gandhi (DIN: 00049735) and Mr. Arakhita Khandual (DIN: 00055601) was appointed as an Additional Director designated as an Independent Director w.e.f. April 4, 2014. They shall hold office up to the date of the ensuing Annual General Meeting. However as per provisions of the Companies Act, 2013, the Independent Directors are required to be appointed by shareholders and they shall not be liable to retire by rotation. The Company has received requisite notice in writing from a member proposing Mr. Gautam Gandhi and Mr. Arakhita Khandual for appointment as an Independent Director. The Company has also received declaration from such Independent Directors that they meet the criteria of Independence as prescribed under section 149(6) of the Companies Act, 2013. Accordingly it is proposed to appoint them for a term of five consecutive years commencing from September 30, 2014 to September 29, 2019.

CONVERSION TO A PUBLIC LIMITED COMPANY

Your Company was converted from a Private Limited Company to a Public Limited Company during the year under review. The Company had received a fresh certificate of Incorporation on March 31, 2014 consequent upon change of name on conversion to a Public Limited Company from Registrar of Companies, Gujarat.

INITIAL PUBLIC OFFERING

During the year under review, your Company came up with a Public Issue of 34,74,000 equity shares of Rs.10/- each at a premium of Rs. 35/- per share aggregating to the total issue size of Rs. 15.63 crore. Subsequently the shares of the company have been listed on SME Platform of BSE Limited on August 20, 2014.

SUBSIDIARY COMPANY

Before the Public Issue of the Company, your Company was a subsidiary of Chiripal Industries Limited. But after the public issue, the percentage of shareholding of Chiripal Industries Limited in your Company has reduced to such extent that your Company is no longer the subsidiary Company of Chiripal Industries Limited.

CORPORATE GOVERNANCE REPORT

A separate report on Corporate Governance and Management Discussion and Analysis together with a certificate from Practising Company Secretary confirming compliance of the conditions of Corporate Governance as stipulated under clause 52 of the Listing Agreement are being published as a part of the Annual Report of the Company.

INSURANCE

All assets of the company including inventories, building, plant and machineries are adequately insured.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956 as amended by Companies (Amendment) Act, 2000 with respect to Directors Responsibility Statement, it is hereby confirmed;

(i) that in the preparation of the accounts for the financial year ended 31st March 2014, the applicable accounting standards have been followed along with proper explanation relating to the material departures,

(ii) that 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,2014 and of the profit or loss of the company for the year under review,

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities,

(iv) that the Directors have prepared the annual accounts on a going concern basis.

AUDITORS

M/s Anil S. Shah & Co, Chartered Accountants, Ahmedabad hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received confirmation from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment. You are requested to appoint the auditors and fix their remuneration.

PARTICULARS OF EMPLOYEES

Pursuant to the provision of section 217(2A) of the Act, read with (Particulars of Employees) Rules, 1975 and amendment made thereto from time to time the names and other particulars of employees are require to be annexed to the Director''s Report. However during the year under review there were no employees drawing the salary more than the limit prescribed under the said rules. Your Directors therefore do not attach the annexure as prescribed under the provision of section 217(2A) of the Companies Act, 1956.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUT GO

Particulars as required under section 217(1)(e) of the Companies Act,1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given in the Annexure to this report.

ACKNOWLEDGEMENT

Your Directors place on records their appreciations for the contributions made by the employees at all levels for their dedicated services

enabling the Company to achieve a satisfactory performance during the year under review. Your Directors also take this opportunity to place on record the valuable co-operation and continued support extended by the Company''s Bankers, and other business associates.

For and on behalf of the Board

Date : September 3,2014 Jyotiprasad Chiripal Place : Ahmedabad Manging Director

 
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