DIRECTORS' REPORT  

TO  

THE SHAREHOLDERS

Dear Shareholder,

Your Directors have pleasure in presenting the 27th Annual Report and the audited financial statements of your company for the year ended 31st March, 2015.

OVERVIEW AND STATE OF THE COMPANY'S AFFAIRS:

During the year under review, your company has achieved revenue from operation of Rs. 11894.15 lacs as compared to Rs. 9315.50 lacs in the previous financial year registering a growth of approximately 28%. The company has earned a net profit of Rs. 62.65 lacs as against net profit of Rs. 78.19 lacs in the previous financial year.

DIVIDEND

Keeping in view the improvement and upgradation in the existing manufacturing facilities, modernization & other future investment possibilities in order to meet competition, to smoothen the liquidity position, your director have decided not to recommend any dividend for the year under review and plough back profits to be utilized for financing of aforesaid modernization expenses of the company.

SHARE CAPITAL

The paid up Share Capital of the Company as on 31st March, 2015 was Rs. 9,65,28,700 (Rs. Nine Crore sixty five lac twenty eight thousand seven hundred only). During the year under review, the Company has neither issued any shares nor granted stock options nor sweat equity. As on 31st March, 2015, the Company had no outstanding convertible instruments.

RESERVE

No amount has been transferred to any of the reserve during the year under review and profits are being retained in the profit and loss account.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company had appointed Mr. Rakesh Handa (DIN02816392), Mr. Prem Singh Paliwal (02816392) and Mr. Randhir Singh (DIN06939267) as Independent Directors under the Companies Act, 2013 for a term of five years which was also approved by the members in the Annual General Meeting held on 22nd September, 2015. Mr. Hari Prasad Joshi was appointed as Independent Director of the Company by the Board of Directors on 30.09.2014.

All Independent Directors 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.

Mr. Vinod Kumar ceased to be Director of the Company w.e.f. 28.07.2014, ceased to be Director of the due to resignation.

Mrs. Asha Garg (DIN 06987609) was appointed as a promoter woman Director of the Company w.e.f. 30.09.2014.

Mr. Ravinder Garg (DIN No. 00202164), Whole-time Director, Mr. Amit Garg (DIN No. 00202171), Managing Director and Mr. Nitin Garg (DIN No. 00202179) are the Key Managerial Personnel of the Company.

NUMBER OF BOARD MEETING

The Board of Directors met 10 (Ten) times during the year, the details of which are provided in the Corporate Governance Report.

BOARD LEVEL PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors has carried annual performance evaluation of Board, Independent Directors, Non Executive Directors, Executive Directors, and Committee. The Nomination and Remuneration Committee approved the evaluation framework and during the year, the first evaluation cycle was completed by the Company.

The evaluation framework focused on various aspects of the Board and Committees such as review, timely information from management etc. Also, the performance of individual directors was divided into Executive, Non Executive and Independent Directors and based on the parameters such as contribution, attendance, decision making, action oriented, external knowledge etc.

Board members were requested to evaluate Independent Directors, Non executive Directors, Executive Directors, Committee and Chairman of the Board. The results of evaluation were shared with the Board of Directors.

Independent Directors evaluated performance of non-independent directors in a separate meeting.

COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION

Nomination and Remuneration Committee constituted under section 178 and clause 49 of the Listing Agreement identifies persons of integrity and probity, possessing relevant expertise, experience, leadership qualities, qualification, independence and other attributes required for the position of directors and recommend their appointment.

Remuneration policy in the Company is designed to create a high performance culture and ascertain that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, Key Managerial Personnel and Senior Managerial Personnel and other employees of the quality, required to run the Company successfully. The remuneration to Directors, Key Managerial Personnel and Senior Managerial Personnel & other employees will be by way of fixed pay as per current policy of the Company and as per the provisions of Companies Act, 2013 and rules made there under.

AUDIT COMMITTEE

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

None of the criterion mentioned in section 135 of the Act relating to Corporate Social Responsibility applied to the Company during the financial year.

PARTICULARS OF EMPLOYEES

During the year under report none of the employee of the Company had no employee employed for the whole or the part of the year and was in receipt of remuneration prescribed under rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

PARTICULARS PURSUANT TO SECTION 197(12) AND THE RETEVANT RULES

In accordance with the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are as follows:

 (v)The explanation on the relationship between average increase in remuneration and Company performance:

The Turnover for the financial year ended 31st March, 2015 increased by 25.55 % whereas the increase in median remuneration was 15.65%. The average increase in median remuneration was in line with industry benchmark and performance of the Company.

(vi)comparison of the remuneration of the key managerial personnel against the performance of the Company:

The Turnover for the financial year ended 31st March, 2015 increased by 25.55% whereas the increase in remuneration of Key Managerial Personnel was 250%. The increase in remuneration was in line with industry benchmark and performance of the Company

(vii)variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

 (viii) Percent increase over/ decrease in the market quotations of the shares of the company as compared to the rate at which the company came out with the last public offer in the year-The Company has not made any public offer after initial public offer.

(ix)Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year was 15.65% and its comparison with the percentile increase in the managerial remuneration was 250% and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

It's due to managerial remuneration was very low in previous years in comparison to employees.

(x)Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company:

Same as mentioned in Para (vi) above.

(xi)The key parameters for any variable component of remuneration availed by the Directors: There was no variable component paid to the Managing Director.

(xii)The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year:

There was no employee who received remuneration in excess of directors.

(xiii)Affirmation that the remuneration is as per the Remuneration Policy of the Company: Yes

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no material weakness was observed by the internal auditor of the Company.

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

The particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are annexed herewith marked as Annexure I to this Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The details of the transactions with Related Parties to be provided in Form AOC-2 are annexed herewith as Annexure-II. Members can refer to Note to the Financial Statements which set out related party disclosures. There are no material transactions with any related party as defined under Section 188 of the Act read with Companies (Meetings of Board and its Powers) Rules, 2014. All related party transactions have been approved by the Audit Committee of your Company.

The policy on Related Party Transactions as approved by the Audit Committee and the Board is available on your Company's website.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the year under review, the Company has not made any loans, guarantees and investments which are governed by the provisions of section 186 of the Companies Act, 2013.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion Analysis as stipulated under clause 49 of the Listing Agreement with the Stock Exchange(s) forms part of the Annual Report and are referred to As Annexure III.

CORPORATE GOVERNANCE REPORT

Corporate Governance Report as stipulated under clause 49 of the Listing Agreement with the Stock Exchange(s) forms part of the Annual Report and are referred to As Annexure IV.

DIRECTORS' RESPONSIBILITY STATEMENT

As stipulated in Section 134(3)(c) of the Companies Act, 2013 "the Act", your Directors subscribe to the "Directors' Responsibility Statement" and confirm that:

a)in the preparation of the annual accounts, applicable accounting standards have been followed along with proper explanations relating to material departures;

b)the accounting policies selected have been applied consistently and judgments and estimates have been made 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 your company for that period;

c)proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your company for preventing and detecting fraud and other irregularities;

d)the annual accounts of your Company have been prepared on a going concern basis;

e)your Company had laid down internal financial controls and that such internal financial controls are adequate and were operating effectively;

f)your Company has devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

EXTRACT OF ANNUAL RETURN

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

WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy, including vigil mechanism to report genuine concerns of grievances, providing direct access to the Chairperson of the Audit Committee in appropriate and exceptional cases. The Whistle Blower Policy has been posted on the website of the Company.

FIXED DEPOSITS

During the year under review your Company has not accepted any fixed deposits and there were no unclaimed deposit or interest thereon as on 31st March, 2015.

HUMAN RESOURCES

Your Company firmly believes that people are its most valuable asset and it is ensuring that all the HR systems, processes and practices are helping people both personally and professionally. Currently, your Company is managing a pool of 187 people across all the locations.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

There has been no material changes and commitments, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report

THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There are no significant and material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.

INFORMATION ABOUT SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

No Company became or ceased to be subsidiary, joint venture or associate company during the year under review.

RISK MANAGEMENT

The Board of the Company has formed a risk management committee to frame, implement and monitor the risk management plan for the Company. The committee is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

DETAILS OF NUMBER OF CASES FILED, IF ANY, AND THEIR DISPOSAL IN TERMS OF SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

No case of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 was filed. SECRETARIAL AUDIT

M/s. KJ & Associates, Company Secretaries in Practice, have been appointed by the Company as Secretarial Auditor to undertake Secretarial Audit of the Company, pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, The Secretarial Audit Report is annexed herewith as

As regards auditors observation regarding in the Secretarial Audit Report, necessary compliance is being made by the Company.

AUDITORS

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, Midha & Khurana, Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the twenty sixth annual general meeting (AGM) of the Company held on till the conclusion of the twenty ninth AGM to be held in the year 2017, subject to ratification of their appointment at every AGM.

AUDITORS' REPORT

The auditors' report does not contain any qualifications, reservations or adverse remarks.  

COST AUDITORS

The Cost Audit Report for the financial year 2013-14 in XBRL format was submitted within due date on 29th September, 2014.

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.

ACKNOWLEDGEMENTS

The directors thank the Company's employees, customers, vendors, investors and academic institutions for their continuous support.

The directors also thank the government of various countries, government of India, the governments of various states in India and concerned government departments / agencies for their co-operation.

The directors appreciate and value the contributions made by every member of the Company.

For and on behalf of the Board of Directors

Riba Textiles Limited

Ravinder Garg  

Chairman and whole-time Director

DIN 00202164

Place : Panipat  

Date : 11.08.2015