To the Members
Your directors are pleased to present their 32nd Annual Report together with
the audited accounts of the Company for the financial year ended 31st March
2017.
FINANCIAL RESULTS
(Rs. lakhs)
| Particulars |
2016-17 |
2015-16 |
| Income from Operations |
840.70 |
415.85 |
| Other Income |
1.28 |
2.26 |
| Total Income |
841.98 |
418.11 |
| Profit before Tax |
27.92 |
29.64 |
| Provision for Current Tax |
12.30 |
9.60 |
| Prior year Tax |
7.83 |
0.00 |
| Provision for Deferred Tax |
1.34 |
0.91 |
| Profit after Tax |
9.13 |
20.95 |
| Add: Opening balance in Profit and Loss account |
190.05 |
169.10 |
| Balance available for appropriations |
199.18 |
190.05 |
DIVIDEND
Your board has not declared any dividend during the year under review. OPERATIONS
During the year, the Company reported a Profit after Tax (PAT) of Rs. 9.13 lakhs as
against Rs. 20.95 lakhs for the previous year. During the year under review, the sales and
other income were at Rs. 841.98 lakhs as against Rs. 418.11 lakhs for the previous year.
GARMENTS UNIT
Your Company has successfully completed its Third year of operations with manufacturing
of garments which has huge potential on export target of textiles set by the Government of
India. The Management is confident by bagging new orders from Direct buyers, which will
contribute higher margin on our exports by improving capacity utilization of units during
the financial year 2017-18.
DEPOSITORY SYSTEM
As the members are aware, the Companys shares are compulsorily tradable in electronic
form. As on 31st March 2017, 87.26% of the Companys total paid-up Capital
representing 872590 Shares is in dematerialised form. In view of the numerous advantages
offered by the Depository system, members holding shares in physical mode are advised to
avail of the facility of dematerialization from either of the Depositories.
DEPOSITS
The Company has not accepted any deposit from the public within the meaning of Section
73 of the Companies Act, 2013 for the year ended 31st March 2017.
SUBSIDIARY COMPANIES
Particulars as required under section 129(3) of the Companies Act, 2013 in respect of
subsidiary companies are furnished in the annexure to this report in Form AOC-1.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to section 129 (3) of the Companies Act, 2013, Consolidated Financial
Statements of the company and its subsidiary company have been prepared and attached to
this Annual Report
STATUTORY DISCLOSURES
Conservation of Energy and others:- The particulars required to be included in terms of
Section 134 (3) (m) of the Companies Act, 2013 read with rule 8(3) of the Companies
Accounts) rules 2014 for the year ended 31.03.2017 relating to conservation of energy etc
is enclosed as Annexure 1.
Remuneration of directors and other details:-
The company has no employees in receipt of remuneration exceeding the limits prescribed
under section 197(12) of the Companies Act, 2013 read with Companies (Appointment and
remuneration of Managerial Personnel) Rules, 2014.
CORPORATE GOVERNANCE REPORT
In line with requirements of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 your company is committed to the
principles of good Corporate Governance and continues to adhere good Corporate
Governance practice consistently.
Additional disclosures as stipulated under regulations 34(3) read with Schedule V of
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have been
given appropriate places and forms part of this Annual Report.
As the Companys paid up equity share capital is not exceeding Rs. 10 Crore and net
worth of the company was not exceeding Rs. 25 Crore, as on previous financial year
(31.03.2017), regulations 17 to 27 and clauses
(b) to (i) of sub-regulations (2) of regulation 46 and paras C,D and E of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 are not applicable to the
company.
DIRECTORS RESPONSIBILITY STATEMENT
As stipulated in Section 134 (5) of the Companies Act, 2013 your directors confirm
that:
a) Your Directors have followed in the preparation of the annual accounts, the
applicable accounting standards with proper explanation relating to material departures;
b) Your 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 at the end of the financial year and of
the profit and loss of the Company for that period;
c) Your Directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
d) Your Directors have prepared the annual accounts on a going concern basis;
e) Your 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;
DIRECTORS
Sri K. Dhanakumar (DIN: 00048730), Director retires from the Board by rotation and is
eligible for re-appointment at the ensuing Annual General Meeting.
The profile of the director seeking reappointment, as required under regulation 36(3)
of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 are given in the
Annexure to the Notice of the Annual General Meeting.
During the year under review, the company has appointed Mr.Vaibhav Duvvur (DIN
03477028) and Mrs. Manonmani Kandavel (DIN 07143912) as Independent directors of the
company for the period of five years with effect from the date of ensuing Annual General
Meeting.
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.
AUDIT COMMITTEE
The Audit Committee consists of three Non-Executive Directors out of which two are
Independent Directors. The present members of the Committee are Sri Vaibhav Duvvur, Sri K
Dhanakumar, Smt. Manonmani Kandavel and Sri Vaibhav Duvvur is the Chairman of Audit
Committee.
The board has implemented the suggestions made by the auditor committee from time to
time.
AUDITORS
In terms of Section 139 of the Companies Act, 2013
M/s. S. Lakshminarayanan Associates, Chartered Accountants, Coimbatore, the existing
statutory auditor of the company, the appointment periods expires at the ensuing Annual
General Meeting. Your board has received necessary consent from Mr. R. Natarajan,
Chartered Accountant, bearing Registration No. 24306 to be appointed as a statutory
auditor of the company at the ensuing Annual General Meeting for a period of five years.
Your board has placed necessary resolution in this regard for the approval of members.
The Company has received a certificate from the auditor to the effect that he is
eligible to be appointed and he is not disqualified for reappointment.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY
OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE
AND THE DATE OF THE REPORT
No material changes and commitments affecting the financial position of the Company
occurred between the end of the financial year to which this financial statement relate
and on the date of this report
THE EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as required under section 92(3) of the Companies Act, 2013
read with rule 12(1) of the Companies (Management and Administration) Rules, 2014, in Form
MGT-9 is given in Annexure 2.
KEY MANAGERIAL PERSONNEL
The company has the following Key Managerial Person as on 31.03.2017. 1. Sri T.
Rajkumar: Managing Director
EVALUATION OF BOARD OF DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and the rules made there under,
independent directors at their meeting without participation of non-independent directors
and management considered and evaluated the boards performance, performance of the
chairman and Managing Director.
The board has carried out an annual evaluation of its own performance, of the
individual directors as well as the Committees of directors.
BOARD MEETINGS
During the year under review, 4 board meetings were conducted. (30.05.2016, 13.08.2016,
14.11.2016 and 13.02.2017)
The details of the attendance of the directors are given below:
| Name of the Directors |
No. of meetings attended |
| Mr. T. Rajkumar |
4 |
| Mr. K. Dhanakumar |
4 |
| Mr. Vaibhav Duvvur |
4 |
| Mrs. Manonmani Kandavel |
4 |
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES
ACT, 2013
During the year under review, the company has not made any investment and no loan or
guarantee was given or security was provided by the company covering under Section 186 of
the Companies Act, 2013.
ESTABLISHMENT OF VIGIL MECHANISM/WHISTLE BLOWER POLICY
The company has established a vigil mechanism for directors and employees to report
concern about unethical behavior, actual or suspected fraud or violation of the companys
code of conduct or ethics. The policy has been posted in the website of the company.
POLICY ON NOMINATION AND REMUNERATION COMMITTEE
The board of directors have framed a policy setting out the framework for payment of
remuneration to directors, Key Managerial Personnel and Senior Management Personnel of the
company. The policy is explained as part of the Corporate Governance report. The committee
ensures that:
a. The level and composition of remuneration is reasonable and sufficient to attract,
retain and motivate Directors of the quality required to run the Company successfully
b. Relationship of remuneration to performance is clear and meets appropriate
performance benchmarks and
c. Remuneration to Directors, Key Managerial Personnel and senior management involves a
balance between fixed and incentive pay reflecting short and long term performance
objectives appropriate to the working of the Company and its goals.
RELATED PARTY TRANSACTIONS
All the related party transactions that were entered into during the financial year in
the ordinary course of business and the prices were at arms length basis. Hence, the
provisions of Section 188 of the Companies Act, 2013 are not attracted. Further no
materially significant related party transactions were made by the Company with Promoters,
Directors, Key Managerial Personnel or other designated persons which may have potential
conflict with interest of the company at large. Hence reporting in
AOC-2 is not made. Approval of Audit Committee was obtained for transactions of
repetitive nature on annual basis. All related party transactions are placed before the
Audit Committee and Board of Directors for their review. The policy on Related Party
Transactions is available in the website of the company.
Additional disclosures as required under Schedule V of the SEBI (Listing obligations
and Disclosure requirements)
| Name of the Subsidiary |
Nature |
Balance at the end of the year |
Maximum amount outstanding |
| Sri Arumuga |
Investments |
Rs. 10 Crore |
Rs. 10 Crore |
| Cottspin Pvt Ltd |
Loans and Advances |
Rs. 60,99,331/- |
|
| Sri Mahasakthi |
Investments |
Rs. 10 Crore |
Rs. 10 Crore |
| Mills Ltd |
Loans and Advances |
Rs. 55,63,360/- |
|
SECRETARIAL AUDIT REPORT
Secretarial Audit Report for the year under 31st March, 2017, as required
under section 204 of the Companies Act, 2013 and the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, is enclosed and your board has
separately replied for the observations / qualifications of the Secretarial Audit Report
made in his report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size, scale and
complexity of its operations. The scope and authority of the Internal Audit function is
defined in the Internal Audit Manual. To maintain its objectivity and independence, the
Internal Audit function reports to the Chairman of the Audit Committee & to the
Chairman and Managing Director.
The Company has an Internal Audit Department which monitors and evaluates the
efficiency and adequacy of internal control system in the Company, its compliance with
operating systems, accounting procedures and policies at all locations of the Company.
Based on the report of internal audit function, corrective actions are taken in the
respective areas and thereby strengthen the controls. Significant audit observations and
recommendations along with corrective actions thereon are presented to the Audit Committee
of the Board.
STATEMENT ON RISK MANAGEMENT POLICY
Pursuant to Section 134(3) (n) of the Companies Act, 2013, the Company has developed a
Risk Management Committee. The committee has developed a risk Management policy and
implemented the same. The board is of the opinion that there is no threaten to the
existence of the company.
CORPORATE SOCIAL RESPONSIBILITY:
As your company is not covered under any of the conditions prescribed under Section 135
of the Companies Act, 2013, the Company is not required to develop and implement any
Corporate Social Responsibility initiatives, during year ended 31st March, 2016.
DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS /COURTS/ TRIBUNAL
IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE.
There were no significant material orders passed by the Regulators/ Courts/Tribunal
which would impact the going concern status of the company and its future operations.
The Stock Exchange has suspended trading of Companys securities with effect from
02.08.2016 due to non compliance of certain provisions of SEBI regulations. However, the
said order does not affect the ongoing concern status of the Companys operation in
future.
MANAGEMENT DISCUSSION AND ANALYSIS DISCLOSURE AS STIPULATED UNDER SCHEDULE V OF THE
SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS)
Industry Structure and Development
The spinning industry is continuously expanding in South Asia and China in the last few
years and is becoming growth engine of these economics.
At present the contribution of the Indian Textile Industry to its GDP is about 4.8%.
Role of Textile Industry in India GDP has been quite beneficial in the economic life of
the country. The worldwide trade of textiles and clothing has boosted up the GDP of India
to a great extent as this sector has brought in a huge amount of revenue in the country.
Opportunities and Threats
Indias textile industry is one of the leading textile industries in the world,
exporting to over 100 countries. It contributes a significant 17 percent to Indias
overall export earnings and employs over 35 million people directly, making it the second
largest source of employment after agriculture
After the removal of quotas by European Union in 2005 and because of Textile
Upgradation Fund (TUF) interest susbsidy, huge capacity expansions have taken place in
Textile Industry in India.
The government has set huge the target for textile exports for the current year.
Policies of Government of India provides opportunities for the Indian Textile Export
during the current year.
Segment-wise or Product Wise Performance and Financial performance with respect to
operational performance
The company deals with only one product i.e Garments. The disclosure of the performance
has been given in the financial statement.
Outlook
The outlook for Textile Industry in India is optimistic. It is expected that Indian
Textile Industry would continue to grow at an impressive rate. The fundamental strength of
this industry flows from its strong production base of wide range of fibres/ yarns from
natural fibres like cotton, jute, silk and wool to synthetic / man-made fibres like
polyester, viscose, nylon and acrylic. In fact, apart from China, no other country can
boast of such strong and diverse base in textile fibres/ yarns. The complex and varied
structure of industry coupled with Indias close linkage with culture and multi-fibre raw
material base enables it to produce variety of products for varying consumer needs and
preferences. The growth pattern of the Indian Textile Industry in the last decade has been
considerably more than the previous decades, primarily on account of liberalization of
trade and economic policies initiated by the Indian Government in the 1990s.
The inherent strengths of the Textile Industry have seen the Textile Industry through
rough days and hard times. There have been many periods of adversity, when growth charts
have dipped and it has appeared that misfortune will overtake. But like phoenix, the
Textile Industry has risen each time from the ashes.
Risk & Concerns
High volatility of cotton, yarn prices, rupee exchange rate, high attrition and
shortage of work force are the major concerns for us. In order to mitigate the above
risks, we have been taking several initiatives like lowering inventory levels, reducing
manpower requirement by modernization of machines, application of autonomous maintenance
philosophy, rationalization of workforce, Employee training and development, etc.
Internal Controls
There is proper and adequate system of Internal Controls to ensure that all assets are
safeguarded and protected against loss from unauthorized use or disposition and that all
transactions are authorized recorded and reported correctly. The internal control systems
are supplemented by Internal Audits and review of the same by Audit Committee at corporate
level.
Material developments in Human Resources/Industrial Relations front, including number
of people employed.
The companys industrial relations are cordial. There was no significant changes in the
human resources during the period under review. The total number of people employed during
the year was twenty five (including temporary employees).
Disclosure of Accounting Treatment as stipulated under Schedule V of the SEBI (Listing
obligations and Disclosure requirements)
The company has prepared financial statements prescribed accounting standard has been
following and there was no deviation in the treatment.
Disclosure of demat suspense account/unclaimed suspense account as stipulated under
Schedule V of the SEBI (Listing obligations and Disclosure requirements)
Details of shares in the demat suspense/unclaimed suspense account:
(a) Aggregate number of shareholders and the outstanding shares in the suspense account
lying at the beginning of the year (01.04.2016): Nil
(b) Number of shareholders who approached the company for transfer of shares from
suspense account during the year (201617) : Nil
(c) Number of shareholders to whom shares were transferred from
suspense account during the year (2016-17) : Nil
(d) Aggregate number of shareholders and the outstanding shares in the suspense account
lying at the end of the year (31.03.2017) : Nil
ACKNOWLEDGEMENTS
Your Directors wish to place on record the valuable assistance and cooperation extended
by the members and other stakeholders.
|
For and on behalf of the Board |
|
| 28.02.2018 |
T.Rajkumar |
|
| Coimbatore |
Chairman & Managing |
Director |
|
DIN: 00048665 |
|
Addendum to observations/qualifications made in the Secretarial Audit Report for the
year ended 31st March, 2017.
1. The Company is taking steps to appoint a qualified whole time Company Secretary.
2. The essential data stored in a computer data were corrupted and it took substantial
time to retrieve. Due to this unexpected situation, the company could not send documents
to hold Annual General Meeting for the year ended 31st March, 2016. However,
the Annual General Meeting was held belatedly on 29th May, 2017.
3. Steps are being taken to file the resolutions passed by the board of directors
approving the financial statements and boards report for the year ended 31st
March, 2016 with required additional fees.
4. Arrangements are being made to pay listing fees.
5. Due to lack of sufficient staff, the company could not submit the periodical
financial results and shareholding pattern within the due date with Stock exchange.
Effective steps are being taken to file the above said documents and also to publish the
results in news papers within the time.
6. Necessary steps are being taken to submit copies of Annual Report and proceedings of
the Annual General Meeting for the year ended
31st March, 2016 as required under regulation 34 of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015
7. Steps are being taken to file the compliance certificate to the exchange as required
under regulation 7(3) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 for the half year ended 31st March, 2017.
8. Steps are being taken to update the companys website (arumugaenterprise.com) as
required under regulation 46 of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015
9. The company has belatedly filed the annual forms (consisting AOC-4 and MGT 7) for
the financial year ended 31.03.2016 with Registrar of Companies, with required additional
fee.
10. Steps are being taken to file the proceedings of the Annual General Meeting with
Registrar of Companies as required under 121 of the Companies Act, 2013.
|
For and on behalf of the Board |
| 28.02.2018 |
T.Rajkumar |
| Coimbatore |
Chairman & Managing Director |
|
DIN: 00048665 |
+91-9892691696
