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Updated:16 Aug, 2019, 15:59 PM IST

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Disclosure in board of directors report explanatory

DIRECTORS’ REPORT TO THE MEMBERS

Dear Members,

The Directors have pleasure to present the 34th Annual Report on the business and operations of Khadim India Limited (“the Company”) together with Audited Financial Statements for the Financial Year ended 31st March, 2015.

Financial Results

The Company’s financial performance for the year ended March 31st, 2015 is summarized below:–

Fig. In Rs.

2014–2015

2013–2014

Revenue from Operations (Net)

   4,60,15,75,526

   4,78,13,98,902

Other Income

        5,54,56,991

4,91,20,866

Profit before Depreciation, Interest, and Tax

    19,56,32,221

52,55,55,016

Depreciation

      19,45,31,397

      10,79,20,346

Interest

      19,21,54,105

25,60,81,421

Profit before tax

     (19,10,53,281)

      16,15,53,249

Provision for Taxation

– Current and deferred Tax

– Fringe Benefit Tax

          (44,81,829)

Nil

        5,45,36,150

Nil

Profit for the year after tax

     (18,65,71,452)

      10,70,17,099

Dividend

Considering the losses incurred by the Company during the financial year 2014–15, your Directors regret their inability to recommend any dividend.

Reserves

In view of the losses incurred by the Company this year, no amount has been transferred to the General Reserve.

Operations and State of Company’s  Affairs

Operations

The Company has incurred a loss of Rs. 18,65,71,452 during the year under report. The prime reason for the Company recording a loss in the financial year 2014–15 has been  slowdown in the retail segment whereby the sales target for the year could not be met (Actual net sales for the year was Rs.460 crores vis–à–vis budgeted sales of Rs.585 crores). The shortfall in the sales along  with a growth in the fixed overheads contributed to a major hit on the bottom line. Additionally, the Company had to run discount schemes for a major part of the last quarter of the fiscal to liquidate the stocks already piled up in view of the higher budgeted sales. During the year the Company had also opened 25 new retail outlets which were yet achieve break even in the first year of their operation which further affected the profit margins. The gold jewelry business too, was adversely affected since the yellow metal recorded lots of price fluctuation. Particularly towards the year end and thereafter gold price witnessed a steep crash and your management thought it prudent to value the stock at ‘marked to market’ price thereby taking a valuation loss in its financial statements.   Further, the new Companies Act, 2013 provided for new rates of depreciation to be charged on the fixed assets which resulted in an additional depreciation charge of Rs. 8.50 crores. All these factors together brought down the overall profit margins significantly and resulted in a loss (after taxes) of Rs.18.66 crores as aforesaid.

Your Company is taking various steps for reduction of cost which would help the Company in increasing the profit margin. Also the Company is trying to fully utilize the capacity of the Kasba and Panpur Factory. Your Company is also continuing its existing system of performance linked pay to its senior employees thereby increasing efficiency of the senior management.  

Manufacturing

 During the year under report, 53.04 lakh pairs of footwear have been produced in Panpur Factory  as against 28.10 lakh pairs in the last financial year, resulting an overall productive growth of 124% considering both the Factories. During the year, various new footwear items were introduced in PVC/DIP, Stuck–on and Hawaii (both Premium and Fabricated) categories. China Town Factory has been shifted and merged with Kasba Factory, resulting in substantial savings of cost. The Company has opened factory discounted outlet(s) to sale out the factory second products at discounted price.

Supply Chain Management

 Your Company has taken various steps in optimizing its inventory control through reducing its old footwear and accessories line, considering present market trend and demand by way of various strategies like Salesman incentive, Discount, extra margin to dealers etc. for slow/non–moving stocks. This has paved the way to reduce the old Inventories of the Company and would improve the operations of the Company in the succeeding years.

Purchase has been centralized at Bantala, Kasba and Delhi distribution Centres. The Company has taken steps to standardise its supply chain through introduction of more structured and organised Suppliers, who are capable of making supply within reasonable lead time. Your Company has relocated its Sreerampore Distribution Centre to Kasba without affecting other operations and the same resulted in space saving and remarkable variable cost savings. Your Company has taken various steps to reduce the Transit Time and Transit Loss like pilferage through incorporating DMR (Discrepancy Management Register) and GCN (Goods Consignment Notes) details through systems. Your Company has improved customer satisfaction through various measures including enhanced Quality Control.

Brand and Marketing

During the year 2014– 15, there has been a considerable focus on Brand Marketing with respect to the consumer space. Consumer schemes along with brand campaigns have helped the Company to reach out to the valued customers. In the digital market places, Flipkart and Snapdeal have further helped the Company to expand the geographies to customers beyond the reach of our retail presence. In the distribution sector, the Company has also initiated a process to make the presence felt and manifest again through our channel partners, providing them Sign boards and collaterals from the brand.

Finance

During the year 2014–15 the Finance team of your company along with one reputed external organization initiated a drive for effective and efficient cost management process across the Company and the targeted and measurable benefits in some cases have already been achieved and rest are in the process of completion.

With infusion of funds in the form of private equity, the Company was able to manage its working capital cycle more efficiently and brought down its receivable and payables level significantly. Further, with improved liquidity and better leveraging ratios, the external credit rating of the Company as assessed by CARE and ICRA was revised from BBB+ for Long term bank facilities and A3+ for short term bank facilities to A– and A2+ respectively. With an improvement in external credit rating, the Company was able to negotiate a downward revision of interest rates charged by banks to the tune of 50–75 basis points.

Internal Audit & Internal Control Systems

The Internal Audit Department of your Company has emphasized on strengthening controls mainly on Financial and Operational functions with the focus to mitigate the risk of asset and revenue loss. This initiative has been reflected as an integral part of every audit tasks on regular basis. Internal audit team is also keeping a close watch on internal control system over high risk assets in retail industry namely cash and inventory and critical operations like logistics, offered schemes and productions etc. to safeguard the assets of the Company.

Your Company has an adequate system of internal control procedures which is commensurate with the size and nature of business. All the assets are safeguarded, protected against loss and all transactions are authorized, recorded and reported correctly. The internal control systems of the Company are monitored and evaluated by internal auditors and their audit reports / observations are periodically reviewed by the Audit Committee of the Board of Directors.

Human Resource Management

Employees are the most valuable assets of your Company. Your Company believes in the quality and level of service of its employees extended towards the customers. The homely culture and reputation of your Company enables to recruit and retain the good talents across states. The talent pool is being created by recruiting from reputed colleges/universities/management institutes.

The Company in partnership with the skill developments institutes viz. IndiaCan Education, Save the Children, Dr. Reddy’s Foundation, B–Able etc. has employed BPL youths during the year.

The employees receive competitive salaries and benefits through performance linked compensation programmes that links compensation to individual performance, as well as the Company’s performance.

Your Company is focused on taking specific initiatives to recruit, retain and develop the highest quality of people regardless of race, gender, religion, age, culture, sexual orientation or background. In addition it continues to focus on enhancing service excellence delivery skills and capabilities.

Share Capital

The Company in its Extra–Ordinary General Meeting dated 4th June, 2014 has passed a special resolution for consolidation in the face value of the Equity Shares of the Company, whereby, the Authorised Share Capital of the Company is consolidated from 240,000,000 Equity Shares of Rs. 2.50/– each to 60,000,000 Equity Shares of Rs. 10/– each and the Issued, Subscribed and Paid–up capital is consolidated from 48,540,952 Equity Shares of Rs. 2.50/– each to 12,135,238 Equity Shares of Rs.10/– each.

The Company has converted 7,74,63,840 (Seven Crore Seventy Four Lacs Sixty Three Thousand Eight Hundred and Forty) zero coupon Compulsorily Convertible Debentures (Unsecured) of Rs. 10 each issued to Reliance Alternative Investment Fund– Private Equity Scheme–1 by issuance of 51,63,293 number of equity shares of Rs 10 each to the said fund at a conversion premium of Rs.140.03 per share during the year under report.

Change(s) in the nature of the business

There has been no change(s) of business of the Company or in the nature of business carried on by the Company during the financial year under review.

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

No material changes and commitments affecting the Financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and the date on which this Report has been signed.

Significant and material orders passed by the regulators/courts/tribunals impacting the going concern status and the Company’s operations in future

During the year under review, no significant and material orders have been passed by the regulators / courts / tribunals that may impact the going concern status and the operations of the Company in future.

Subsidiaries, joint ventures and associate companies

The Company does not have any subsidiary / associate / joint venture company for the year ended 31st March 2015.

Deposits

During the year under review the Company has not accepted any deposit from public within the meaning of chapter V of the Companies Act, 2013.

Corporate Social Responsibility

The provisions of the Companies Act, 2013 regarding Corporate Social Responsibility are applicable to the Company and the Company has devised a Policy in this regard. The Board of Directors of the Company has constituted CSR Committee vide its meeting held on 11th March 2014 and subsequently reconstituted the committee on 23rd May 2015. The present constitution of the committee is as follows:

Sl. No.

Name

Category

Designation

1.

Prof. A.N. Sadhu

Independent Director

Chairman

2.

Mr. Siddhartha Roy Burman

Whole Time Director

Member

3.

Ms. Tanusree Roy Burman

Whole Time Director

Member

4.

Mr. Rahul Manek

Non–Executive Director

Member

5.

Mr. Rubin Chheda

Non–Executive Director

Member

6.

Mr. Abhijit Dan^

CS & Head–Legal

Secretary

^ Mr. Abhijit Dan has been appointed as Secretary to the Committee w.e.f. 23rd May 2015 in place of Mr. Joydev Sengupta who has resigned from the Company as CS & Head Legal w.e.f.31st March 2015

However, considering the current years’ operations your Company has not been able to spend any fund on account of the CSR Activity during the year. The Company wishes to inform the members that it is well aware of its responsibility towards fulfilling its social responsibility and is hopeful that it will engage itself into the CSR Activity in the years to come.

Business Risk Management

Your Company monitors its major risks and concerns at regular intervals through effective Internal Control System. During the year, your Company has constituted a Risk Management Committee which has been entrusted, inter alia, with the responsibility of overseeing and approving the Company’s risk management framework. The risk management framework works at various levels across the organization. The Company has a robust Organizational structure for managing and reporting on risks. The Risk Management Committee is also empowered to review and recommend to the Board the modifications to the Risk Management Policy.

Vigil Mechanism and Whistle Blower Policy

In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standard of professionalism, honesty, integrity and ethical behavior the Company has adopted a Vigil Mechanism Policy during the year under report. 

Directors and Key Managerial Personnel

At the 33rd Annual General Meeting of the Company held on 29th September, 2014 the Company has appointed existing Independent Directors, viz. Dr. Indra Nath Chatterjee, Prof. Amar Nath Sadhu and Prof. Ashoke Kumar Dutta as Independent Directors under the Companies Act, 2013 for a period of 5 consecutive years from the conclusion of the 33rd Annual General Meeting. The said Directors are not liable to retire by rotation.

All Independent Directors have given the declaration that they meet the criteria of Independence as laid down under section 149 (6) of the Companies Act in accordance with the provision of Companies Act, 2013. Ms. Tanusree Roy Burman,Whole Time Director will retire by rotation and being eligible offers herself for re–appointment.

Mr. Siddhartha Roy Burman, Chairman & Managing Director and Ms. Ishani Ray, CFO have been designated  as Wholetime Key Managerial Personnel in terms of Section 203 of the Companies Act, 2013 during the year under report. Mr. Joydev Sengupta, Company Secretary & Head Legal has resigned from the service of the Company w.e.f. 31st March 2015. Mr. Abhijit Dan has been appointed as Company Secretary & Head –Legal w.e.f. 4th May 2015 in terms of Section 203 of the Companies Act, 2013.

Meetings

For the Financial Year 2014–15, five meetings of the Board of Directors were held on 4th June 2014, 31st July 2014, 1st August 2014, 14th November 2014 and 11th March 2015.

Composition of the Audit Committee

The present Composition of the Audit Committee is as under:

Sl. No.

Name

Category

Designation

1.

Prof. A.N. Sadhu

Independent Director

Chairman

2.

Dr. Indra Nath Chatterjee

Independent Director

Member

3.

Prof. Ashoke Kr. Dutta

Independent Director

Member

4.

Mr. Rahul Manek

Non–Executive Director

Member

5.

Mr. Rubin Chheda

Non–Executive Director

Member

6.

Mr. Abhijit Dan^

CS & Head–Legal

Secretary

^ Mr. Abhijit Dan has been appointed as Secretary to the Committee w.e.f. 23rd May 2015 in place of Mr. Joydev Sengupta who has resigned from the Company as Company Secretary  & Head Legal w.e.f. 31st March 2015.

Extract of Annual Return

The extract of the Annual return in the format MGT–9 for the Financial Year 2014–2015 has been enclosed with this report as Annexure “ A  ”.

Particulars of contracts and arrangement with Related Parties

During the year under report all the Transactions with the Related Parties as defined in the Companies Act, 2013 and rules framed thereunder were in the ordinary course of business and on Arm’s Length basis. No Material Related Party Transactions, i.e. transactions exceeding ten percent of the annual turnover as per the last audited financial statements, were entered during the year by your Company. Accordingly, the disclosure of Related Party Transactions to be provided under section 134(3)(h) of the Companies Act, 2013, in Form AOC – 2 is not applicable.

Secretarial Auditor

The Board has appointed Ms. BKG & Company, Practicing Company Secretary to conduct the Secretarial Audit for the Financial Year 2014–2015. The Secretarial Audit Report for the Financial Year ended March 31st, 2015 is annexed herewith, marked as Annexure–“ B” to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Directors Responsibility Statement

In terms of provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that:

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

b)       the Directors had 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 of the loss of the Company for the year ended on that date;

c)   the Directors had 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;

d)   the Directors had prepared the annual accounts on a going concern basis; and

e)   the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively during the financial year ended 31st March 2015

Statutory Auditor and Auditors’ Report

Ms. Deloitte, Haskins & Sells (Firm Registration No–302009E, Chartered Accountants) have been appointed as Statutory Auditors of the Company at the last Annual General Meeting of the Company held on 29th September, 2014 for a period of 3 years till the Financial Year 2017–2018 subject to ratification by members at every consequent Annual General meeting. They have confirmed their eligibility to the effect that ratification for their appointment, if made, would be within the prescribed limits mentioned in the Act and they are not disqualified for such ratification.

The Members are requested to ratify the appointment of the Statutory Auditors as aforesaid and fix their remuneration.

The Auditors’ Report does not contain any qualification, reservation or adverse remarks.

Cost Auditor

Although the Company is not coming under the purview of compulsory cost audit as per the Companies Act, 2013 your Company has continued with the service of the Cost Auditor for the Financial Year 2014–2015 and for the succeeding Financial Year.

Particulars of Loans, Investments, Guarantees etc.

In the Financial Year 2014–15, the Company has not made any investment, have not given any loans, have not provided any guarantees, have not provided any security in connection with any loan, have not acquired securities by way of subscription, purchase or otherwise in excess of the thresholds provided in Section 186 of the Companies Act, 2013.

Conservation of Energy, Technology absorption and Foreign exchange earnings and outgo

A) Conservation of energy

Energy conservation is an ongoing process in the Company through investments in the latest energy efficient technologies to conserve energy at all locations, plants and sites of the Company. As a part of your Company’s endeavor towards conservation of energy and prevention of energy wastage, constant steps are taken in order to conserve energy on an ongoing basis. In Manufacturing Unit at Panpur, the Factory Building has been designed by using Energy Conservation methods like use of Translucent Roofing Sheet which permit natural light inside the premises thereby reducing the need of electrical lights to a negligible level during  daytime, use of Turbo Vents and Ridge Vents and latest insulating materials for the roof and side panels for reducing the internal heat and thus keeping the temperature at a moderate level even during peak summer without use of air–conditioning. During the year under review, your Company has taken adequate measures to optimize the consumption of electricity by reducing operational losses as much as possible. Also through installation of LED Lights at various locations your Company has saved a considerable expenditure towards consumption of Electricity during the year under report.  Capital Investment of Rs. 74.40 lakhs has been made during the year for purchase of LED Lights for the purpose of energy conservation / savings. Presently your Company is not using any alternate source of energy.

 (B) Technology absorption

No specific technology was absorbed, adapted or innovated and no separate expenditure was incurred on Research and Development during the year under report. No technology was imported during last four years. However, your Company, which is present in the retail segment, understands the importance of continuous improvement of the product line and development initiatives and thus continued to carry out various design development and improvement activities not only to keep itself abreast with the market but also to stay ahead of the times.

 (C) Foreign exchange earnings and outgo

The details of foreign earnings and outgo are as follows:

                                                                                                                                       Amount in Rs.

Sl.

Particulars

2014–15

(a)

Value of import on CIF basis                            

Raw material, components & spare parts

4,26,79,704

Finished footwear

   18,17,41, 367

Capital Goods – including Moulds

     1,25,91,771

(b)

 Foreign exchange Earning

     2,50,47,936

(c)

Foreign exchange outgo

         23,39,646

(d)

Others

Nil

Particulars of Employees and related disclosures

Information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 has been enclosed with this report as Annexure “C”.

Disclosures under the Sexual Harassment of women at work place (Prevention, Prohibition & Redressal) Act, 2013

No case relating to the above has been filed during the year under report.

Nomination and Remuneration Policy

A Nomination and Remuneration Policy has been formulated pursuant to the provisions of Section 178 and other applicable provisions of the Companies Act, 2013 and Rules thereto stating therein the Company’s policy on Directors' appointment and remuneration by the Nomination and Remuneration Committee and approved by the Board of Directors of the Company.

Fraud Reporting

During the year under review, no fraud has been reported by auditors under sub–section (12) of section 143 of the Companies Act, 2013.

Acknowledgement

Your Directors would like to express their sincere appreciation for the assistance and cooperation received from the financial institution, banks, government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed service by the executives, staffs and workers of the Company.

For on behalf of the Board of Directors                                                   Place: Kolkata

                                                                                                                      Date: 31st July, 2015

Siddhartha Roy Burman

(Chairman and Managing Director)

Description of state of companies affair

Operations and State of Company’s Affairs Operations The Company has incurred a loss of Rs. 18,65,71,452 during the year under report. The prime reason for the Company recording a loss in the financial year 2014–15 has been slowdown in the retail segment whereby the sales target for the year could not be met (Actual net sales for the year was Rs.460 crores vis–à–vis budgeted sales of Rs.585 crores). The shortfall in the sales along with a growth in the fixed overheads contributed to a major hit on the bottom line. Additionally, the Company had to run discount schemes for a major part of the last quarter of the fiscal to liquidate the stocks already piled up in view of the higher budgeted sales. During the year the Company had also opened 25 new retail outlets which were yet achieve break even in the first year of their operation which further affected the profit margins. The gold jewelry business too, was adversely affected since the yellow metal recorded lots of price fluctuation. Particularly towards the year end and thereafter gold price witnessed a steep crash and your management thought it prudent to value the stock at ‘marked to market’ price thereby taking a valuation loss in its financial statements. Further, the new Companies Act, 2013 provided for new rates of depreciation to be charged on the fixed assets which resulted in an additional depreciation charge of Rs. 8.50 crores. All these factors together brought down the overall profit margins significantly and resulted in a loss (after taxes) of Rs.18.66 crores as aforesaid. Your Company is taking various steps for reduction of cost which would help the Company in increasing the profit margin. Also the Company is trying to fully utilize the capacity of the Kasba and Panpur Factory. Your Company is also continuing its existing system of performance linked pay to its senior employees thereby increasing efficiency of the senior management. Manufacturing During the year under report, 53.04 lakh pairs of footwear have been produced in Panpur Factory as against 28.10 lakh pairs in the last financial year, resulting an overall productive growth of 124% considering both the Factories. During the year, various new footwear items were introduced in PVC/DIP, Stuck–on and Hawaii (both Premium and Fabricated) categories. China Town Factory has been shifted and merged with Kasba Factory, resulting in substantial savings of cost. The Company has opened factory discounted outlet(s) to sale out the factory second products at discounted price. Supply Chain Management Your Company has taken various steps in optimizing its inventory control through reducing its old footwear and accessories line, considering present market trend and demand by way of various strategies like Salesman incentive, Discount, extra margin to dealers etc. for slow/non–moving stocks. This has paved the way to reduce the old Inventories of the Company and would improve the operations of the Company in the succeeding years. Purchase has been centralized at Bantala, Kasba and Delhi distribution Centres. The Company has taken steps to standardise its supply chain through introduction of more structured and organised Suppliers, who are capable of making supply within reasonable lead time. Your Company has relocated its Sreerampore Distribution Centre to Kasba without affecting other operations and the same resulted in space saving and remarkable variable cost savings. Your Company has taken various steps to reduce the Transit Time and Transit Loss like pilferage through incorporating DMR (Discrepancy Management Register) and GCN (Goods Consignment Notes) details through systems. Your Company has improved customer satisfaction through various measures including enhanced Quality Control. Brand and Marketing During the year 2014– 15, there has been a considerable focus on Brand Marketing with respect to the consumer space. Consumer schemes along with brand campaigns have helped the Company to reach out to the valued customers. In the digital market places, Flipkart and Snapdeal have further helped the Company to expand the geographies to customers beyond the reach of our retail presence. In the distribution sector, the Company has also initiated a process to make the presence felt and manifest again through our channel partners, providing them Sign boards and collaterals from the brand. Finance During the year 2014–15 the Finance team of your company along with one reputed external organization initiated a drive for effective and efficient cost management process across the Company and the targeted and measurable benefits in some cases have already been achieved and rest are in the process of completion. With infusion of funds in the form of private equity, the Company was able to manage its working capital cycle more efficiently and brought down its receivable and payables level significantly. Further, with improved liquidity and better leveraging ratios, the external credit rating of the Company as assessed by CARE and ICRA was revised from BBB+ for Long term bank facilities and A3+ for short term bank facilities to A– and A2+ respectively. With an improvement in external credit rating, the Company was able to negotiate a downward revision of interest rates charged by banks to the tune of 50–75 basis points. Internal Audit & Internal Control Systems The Internal Audit Department of your Company has emphasized on strengthening controls mainly on Financial and Operational functions with the focus to mitigate the risk of asset and revenue loss. This initiative has been reflected as an integral part of every audit tasks on regular basis. Internal audit team is also keeping a close watch on internal control system over high risk assets in retail industry namely cash and inventory and critical operations like logistics, offered schemes and productions etc. to safeguard the assets of the Company. Your Company has an adequate system of internal control procedures which is commensurate with the size and nature of business. All the assets are safeguarded, protected against loss and all transactions are authorized, recorded and reported correctly. The internal control systems of the Company are monitored and evaluated by internal auditors and their audit reports / observations are periodically reviewed by the Audit Committee of the Board of Directors. Human Resource Management Employees are the most valuable assets of your Company. Your Company believes in the quality and level of service of its employees extended towards the customers. The homely culture and reputation of your Company enables to recruit and retain the good talents across states. The talent pool is being created by recruiting from reputed colleges/universities/management institutes. The Company in partnership with the skill developments institutes viz. IndiaCan Education, Save the Children, Dr. Reddy’s Foundation, B–Able etc. has employed BPL youths during the year. The employees receive competitive salaries and benefits through performance linked compensation programmes that links compensation to individual performance, as well as the Company’s performance. Your Company is focused on taking specific initiatives to recruit, retain and develop the highest quality of people regardless of race, gender, religion, age, culture, sexual orientation or background. In addition it continues to focus on enhancing service excellence delivery skills and capabilities.

Details regarding energy conservation

A) Conservation of energy Energy conservation is an ongoing process in the Company through investments in the latest energy efficient technologies to conserve energy at all locations, plants and sites of the Company. As a part of your Company’s endeavor towards conservation of energy and prevention of energy wastage, constant steps are taken in order to conserve energy on an ongoing basis. In Manufacturing Unit at Panpur, the Factory Building has been designed by using Energy Conservation methods like use of Translucent Roofing Sheet which permit natural light inside the premises thereby reducing the need of electrical lights to a negligible level during daytime, use of Turbo Vents and Ridge Vents and latest insulating materials for the roof and side panels for reducing the internal heat and thus keeping the temperature at a moderate level even during peak summer without use of air–conditioning. During the year under review, your Company has taken adequate measures to optimize the consumption of electricity by reducing operational losses as much as possible. Also through installation of LED Lights at various locations your Company has saved a considerable expenditure towards consumption of Electricity during the year under report. Capital Investment of Rs. 74.40 lakhs has been made during the year for purchase of LED Lights for the purpose of energy conservation / savings. Presently your Company is not using any alternate source of energy.

Details regarding technology absorption

(B) Technology absorption No specific technology was absorbed, adapted or innovated and no separate expenditure was incurred on Research and Development during the year under report. No technology was imported during last four years. However, your Company, which is present in the retail segment, understands the importance of continuous improvement of the product line and development initiatives and thus continued to carry out various design development and improvement activities not only to keep itself abreast with the market but also to stay ahead of the times.

Details regarding foreign exchange earnings and outgo

(C) Foreign exchange earnings and outgo The details of foreign earnings and outgo are as follows: Amount in Rs. Sl.Particulars2014–15 (a)Value of import on CIF basis Raw material, components & spare parts4,26,79,704 Finished footwear 18,17,41, 367 Capital Goods – including Moulds 1,25,91,771 (b) Foreign exchange Earning 2,50,47,936 (c)Foreign exchange outgo 23,39,646 (d)OthersNil

Disclosures in director’s responsibility statement

Directors Responsibility Statement In terms of provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that: a) in the preparation of the annual accounts for the financial year ended 31st March 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) the Directors had 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 of the loss of the Company for the year ended on that date; c) the Directors had 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; d) the Directors had prepared the annual accounts on a going concern basis; and e) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively during the financial year ended 31st March 2015

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