Share Wealth

DIRECTORS’ REPORT

Dear Members,

The Directors have pleasure in presenting the 26^th Annual Report together with the Audited Financial Statement of the Company for the financial year ended March 31, 2018.

FINANCIAL HIGHLIGHTS (Rs, in Lakhs)

PERFORMANCE REVIEW & COMPANY AFFAIRS

During the year under review, the total revenue of the Company increased by 7.40% in comparison to previous year. The Company’s total revenue for the year under review amounted to Rs,10683.15 Lakhs as compared to Rs, 9947.42 Lakhs of the previous year. The Profit before Tax for the year under review amounted to Rs, 492.35 Lakhs as compared to Rs,467.13 Lakhs of the previous year and registered growth by 5.40%. The Profit after Tax for the year under review amounted to Rs, 342.74 Lakhs as compared to Rs, 332.26 Lakhs of the previous year and registered growth by 3.15%. The Company is engaged in the manufacturing of cotton yarn for different applications by Rotor Spinning. The Company is also engaged in generation of power through Wind Mill & Solar Panels for captive consumption.

There were fire accidents in the plant of the Company situated at 14-A, Industrial Area, A.B Road, Dewas 455001 (M.P.) on 6^th September 2017 and 13^th October 2017. Due to the same, certain fixed assets, finished goods, work in progress, stores & spare parts and packing materials etc. were impacted/destroyed. Fortunately, there has been no loss or injury to human life. The same are adequately insured, the Insurance Policy has reinstatement clause, and accordingly Company has filed insurance claim for loss of the same.

RESERVES

There is no amount proposed to be transferred to any Reserve.

DIVIDEND

With a view of conserving resources, your Directors do not recommended any dividend for the year under review. LISTING OF THE SHARES

The Equity Shares of the Company are presently listed at BSE Ltd. Further the Company has paid listing fees to BSE Ltd. for the year 2018-2019.

DIRECTORS’ RESPONSIBILITY STATEMENT

In terms of provisions of section 134(3)(c) read with section 134(5) of the Companies Act, 2013, your Directors state that:

- in the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards read with requirements set out under schedule III to the act have been followed and there are no material departures from the same;

- 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, 2018 and of the profit of the Company for the year ended on that date ;

- the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- the Directors have prepared the annual accounts on a going concern basis;

- the Directors, have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

- 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.

DIRECTORS & KEY MANAGERIAL PERSONNEL

During the year under review, the members at Annual General meeting have approved the Re-appointments of Shri Mangalore Marathi Rao (DIN- 00775060) as a Whole Time Director for a period of two (2) years w.e.f 28.10.2016.

During the year under review, the members at Annual General meeting have approved the Re-appointments of Shri Piyush Mutha (DIN-00424206) as a Managing Director for a period of two (2) years w.e.f. 01.04.2017.

During the year under review, the members at Annual General meeting have approved the appointments of Smt. Deepa Sudhir Mekal (DIN-05222280) as Independent Directors to hold office for five consecutive years for a term up to 30th March 2022.

During the year under review, Shri Sandeep Nema, Company Secretary has resigned from the post of Company Secretary of the company w.e.f. 28.09.2017.

During the year under review, Shri Satyanarayan Patidar appointed as a Company Secretary w.e.f. 13.11.2017.

During the year under review, Shri Hassan Ali, Chief Financial Officer has resigned from the post of Chief Financial Officer of the company w.e.f. 23.12.2017.

Shri Prabuddha Kumar Majumdar appointed as a Chief Financial Officer of the company w.e.f. 15.05.2018.

In accordance with the provisions of section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Shri Mangalore Maruthi Rao (DIN: 00775060), retires by rotation at the ensuing Annual General

Meeting and being eligible, offers himself for his re-appointment. The Board recommends his re-appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

Pursuant to the provisions of section 203 of the Act, the Key Managerial Personnel of the Company as on date are-Shri Piyush Mutha (Managing Director), Shri Mangalore Maruthi Rao (Whole Time Director), Shri Satyanarayan Patidar (Company Secretary), and Shri Prabuddha Kumar Majumdar (Chief Financial Officer).

DECLARATION BY INDEPENDENT DIRECTORS

The Company had received declaration from all the Independent Directors of the Company confirming that they meet criteria of independence as prescribed under section 149(6) of the Companies Act, 2013 and Regulation 16(1)

(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

BOARD EVALUATION

Pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out performance evaluation of its own, the Board Committees and of the Independent Directors. Independent Directors at a separate meeting evaluated performance of the Non Independent Directors, Board as whole. The manner in which the evaluation has been carried out has been detailed in Report on Corporate Governance.

INSURANCE

Assets of the Company are adequately insured.

SUBSIDIARIES, ASSOCIATE & JOINT VENTURE COMPANIES

Company does not have any subsidiaries, associates companies & joint venture companies.

RELATED PARTY TRANSACTIONS

All contracts / arrangements / transactions entered by the company during the financial year with related parties were in its Ordinary Course of Business and on arm’s length basis. During the year under review the Company has not entered into any contracts / arrangements with the related parties which could be considered material. The particulars of contracts / arrangements / transactions with related parties have been disclosed in the Note No 40 of the financial statements for the year under review.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. All the transactions are properly authorized and recorded. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting in financial statements. The Internal Audit is conducted by outside auditing firms which evaluate the functioning and quality of internal controls and check; and provides assurance of its adequacy and effectiveness. The Internal Audit Reports are actively reviews by the Audit Committee and adequate remedial measures, if any, are taken. The Internal Audit Reports are also reviews by the Board of Directors periodically. During the year, no reportable material weaknesses in the design or operations were observed.

DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT PLAN

In today’s challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. Your Company recognizes that the risk is an integral part of business and is committed to managing the risk in proactive and efficient manner. The Company had adopted Risk Management Policy to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management.

The management is however, of the view that none of the above risks may threaten the existence of the Company as robust Risk mitigation mechanism is put in place to ensure that there is nil or minimum impact on the Company in case of any of these risks materialize. The risk management framework is reviewed periodically by the Board and Audit Committee. The details of risks and other concerns are included in the Management Discussion and Analysis which is the part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, Management Discussion and Analysis Report is appended to and forms part of this Report.

CORPORATE GOVERNANCE

The Company has always strived to maintain appropriate standards of good corporate governance. The Report on Corporate Governance as stipulated under Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Report. The requisite certificate from Company Secretary in Practice confirming compliance of the conditions of corporate governance is attached to report on corporate governance.

DISCLOSURES

Particulars of Loan given, Investments made, Guarantee given under section 186 of Companies Act, 2013

There are no loans given, investments made, guarantee given or security provided by the Company under section 186 of the Companies Act 2013.

Conservation of Energy, Technical Absorption and Foreign Exchange Earning & Outgo

The Particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are provided in Annexure -I to this Report.

Extract of Annual Return

Pursuant to section 92(3) of the Companies Act 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return is annexed herewith and forming part of the Report as annexure - II.

Meeting of Directors

During the year under review, our Board met eleven (11) times. The details of the number of meetings of the board during the year forms part of the Report on Corporate Governance. During the year under review One (1) meeting of Independent Directors was held.

Committees of the Board

The Board of Directors has the following committees:

1. Audit Committee

2. Stakeholders Relationship Committee

3. Nomination & Remuneration Committee

The details of the committees along with their composition, number of the meetings and attendance at the meetings are provided in the Report on Corporate Governance.

Remuneration Policy

The Company has a Remuneration policy of the Company for Directors, Key Managerial Personnel & other employee’s. The Remuneration Policy is annexed herewith as Annexure-III to this Report.

Vigil Mechanism/Whistle Blower Policy

The Company has a Vigil Mechanism / Whistle Blower Policy to report genuine concerns or grievances. The vigil mechanism provides for adequate safeguards against victimization of persons who use such mechanism and make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. This policy may be accessed on the Company’s website, web link: http://www.vippyspinpro.com/Whistle-Blower-Policy.pdf

Particulars of employees and related disclosures

The information in accordance with the provisions of section 197(12) of the Companies Act, 2013 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014 is annexed herewith as Annexure -IV to this Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company does not fall under requirement of the section 135 of the Companies Act, 2013 and therefore during the year under review, Company did not carry out any CSR activities as specified under section 135 of the Companies Act, 2013, read with schedule ViI of the Act.

AUDITORS & AUDITORS’ REPORT

Statutory Auditors

M/s R.S. Bansal & Co., Chartered Accountants (Firm Registration No.000939C), was appointed as Statutory Auditors of the Company at the Annual General Meeting held on 27^th September, 2017, for a term of 5 consecutive years, subject to ratification by the members at every Annual General Meeting. They have confirmed that they are not disqualified from continuing as auditors of the Company.

In accordance with the Companies Amendment Act, 2017, enforced on 7^th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

The report given by the auditors on the financial statements of the company is part of this report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report, and no explanation on part of the Board of Directors is called for.

Cost Auditor

The Board of Directors have appointed M/s M. Goyal & Co., Cost Accountants, Jaipur, (Registration No.000051) as Cost auditors of the Company to conduct audit of the cost accounting records of the Company for the year 2018

19. In accordance with the provisions of Section 148 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor is required to be ratified by the Members of the Company. Accordingly, the Board seeks ratification at the ensuing Annual General Meeting of the remuneration payable to the cost Auditors for the Financial Year 2018-19.

Secretarial Auditor

The Secretarial Audit Report for the financial year ended 31^st March, 2018 issued by M/s Shilpesh Dalal & Co., Practicing Company Secretary is annexed herewith as Annexure-V to this report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer, and no explanation on part of the Board of Directors is called for.

The Board appointed M/s Shilpesh Dalal & Co. Practicing Company Secretary, to conduct Secretarial Audit for the year 2018-19.

Disclosure of frauds against the Company

In terms of the provisions of section 134(3)(ca) of the Companies Act, 2013, there were no fraud committed against the Company by any person under section 143(12) during the year 2017-18. Further that there were no frauds which needs to be reported by the Auditors of the Company to the Central Government.

Internal Auditor

Pursuant to the provisions of section 138 of the Companies Act, 2013 read with rule 13 of the Companies (Accounts) Rules, 2014, M/s R.K. Saklecha & Associates, Chartered Accountants was appointed as an Internal Auditor of the Company for the financial year 2018-19.

PREVENTION OF SEXUAL HARASSMENT POLICY

The Company has a Prevention of Sexual Harassment Policy in force in terms of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The objective of this policy is to ensure a safe, secure and friendly work environment where employees will deliver their best without any inhibition, threat of fear. No complaints with allegations of sexual harassment were reported during the year under review.

HUMAN RESOURCES

The Company believes that employee plays a pivotal role in achieving a competitive advantage. The Company provides them an environment, where each employee is motivated to contribute his best to achieve the Companies objective. The focus of all aspects of Human Resource Development is on developing a superior workforce so that the organization and individual employee can achieve their work goals. The Company has a progressive HR policy for helping employees to develop their organization skills, knowledge and abilities to achieve greater efficiency. The Industrial Relations of the Company with its personnel has continued to be cordial and friendly during the year. The Company has 96 permanent employees on the rolls of the Company as on 31.03.2018.

COMPANY POLICY FOR PROMOTION OF EMPLOYMENT OF YOUTH COMING FROM THE UNDER-PRIVILEGED/DISADVANTAGED SECTION OF THE SOCIETY

The people are recruited in the Company on the basis of their qualification/eligibility and merits without any discrimination against their gender, religion, caste, colour, ancestry, marital status, nationality and disability, and among equally qualified individuals, preference are given to people from the disadvantaged groups. The Company also conducts training programme from time to time for up-skilling, training of employees from socially disadvantaged sections of society.

ENVIRONMENT & SOCIAL CONCERN

Your Company is committed to build business with save energy and save environment. In line of this, the Company had set up the wind mill and solar panels that generates electricity and contributed to displace emissions from the nation’s coal-fired power plants and eliminates the nation’s major source of acid rain, reduce total emissions of CO2.

Your Company is committed to the sustainable use of all natural resources and minimizes waste at source and recycles where possible. Considering the scarcity of natural resources, the Company continue to maintain “Rain Water Harvesting System” at the factory premises at Dewas. The 8040 sq meters of roof area has been covered under the rain water harvesting and approx 5194 cubic meters of water has been collected at factory premises at Dewas, resulting in saving water and recharging the five bore wells consequently.

In memory of founder Late Shri Prakash Mutha, during the year, Company has involved in inspirable activities in the area around the plant situated at Dewas such as giving awards to meritorious students and distribute bicycle, School Dress, School Bags, School Books & Education Material. Total 44 Students got such benefit during the year.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, affecting the financial position of the Company between the end of the financial year of the Company i.e. 31^st March, 2018 and the date this report. There has been no change in the nature of the business of the Company.

GENERAL

Yours Directors state that no disclosures or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

- details relating to deposits covered under chapter V of the companies Act, 2013

- Issue of shares during the year

- no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

ACKNOWLEDGEMENTS

Your Directors would like to gratefully acknowledge all stakeholders of the Company viz: customers, dealers, suppliers, banks, shareholders and other business associates for the excellant support received from them during the year. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company’s well-being.

For and on behalf of the Board of Directors

Place: Dewas Piyush Mutha Mohan Lal Jain

26^th May 2018 Managing Director Director

(DIN-00424206) (DIN: 00395584)