Aarvee Denims & Exports Ltd Directors Report.
(CIN: L17110GJ1988PLC010504) To, The Members,
Your Directors have pleasure in presenting the 30th Annual Report on the business and operations of your Company together with the audited accounts for the financial year ended 31st March, 2019.
1. FINANCIAL RESULTS
Your Companys performance during the year is as below:
|(Rs. in Lakh)|
|Particulars||Year ended 31.03.2019||Year ended 31.03.2018|
|Profit before Interest, Tax & Depreciation||8500.12||8277.93|
|Less: Net Interest & Finance Cost||4929.59||4,345.97|
|Profit before tax||172.66||637.48|
|Provision for Tax & Deferred tax||63.78||76.63|
|Profit for the year||108.88||560.85|
|Other comprehensive income||34.87||3.95|
|Total comprehensive income||143.75||564.80|
2. PERFORMANCE DURING THE YEAR
During the year under review, the company has achieved revenue of Rs 75434.03 Lakh as compared to Rs. 82,959.72 Lakh for the previous financial year. The Net profit for the year stood at Rs. 143.75 Lakh against Rs. 564.80 Lakh in the previous year.
Your Company looks forward to strengthen its operations by curtailing expenditure, aggressive export marketing etc. This would help the Company to improve its results and profitability.
Your Directors do not recommend payment of any Dividend for the Financial year ended 31st March, 2019, in order to conserve the resources of the Company, The Company will retain the earning for use in the future operations & Projects and strive to increase the net worth of stakeholders of the Company.
4. INDIAN ACCOUNTING STANDARD (IND AS)
The company has adopted Indian Accounting Standards (IND AS) with effect from 1st April, 2017, pursuant to the notification of Companies (Indian Accounting Standard) Rules, 2015 issued by the Ministry of Corporate Affairs. Hence, previous years figures have been regrouped and reclassified, wherever considered necessary to confirm the figures represented in the current period.
5. RESERVES AND SURPLUS
The Company has not transferred any amount to General Reserves for the Financial Year 2018-19.
6. SHARE CAPITAL
The paid up Equity Share Capital as at 31st March, 2019 stood at Rs. 2345.98 Lakhs. During the year under review, the Company has neither made any issue of equity shares with differential voting rights nor has granted any stock options or sweat equity. The Company has no scheme of provision of money for purchase of its own shares by employees or by trustees for the benefit of employees.
7. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS
During the financial year under review pursuant to SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 your Company has complied with all the applicable provision of Corporate Governance.
Separate report on Corporate Governance and Management Discussion & Analysis, as required under the SEBI Listing Regulations are forming parts of the Annual Report.
The requisite certificate from Practicing Company Secretary confirming the compliance with the condition of Corporate Governance is attached to the Report on Corporate Governance.
8. MATERIAL CHANGES, IF ANY
No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial relate and the date of this report
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
10. FIXED DEPOSITS
Your company has accepted/renewed the deposits aggregating to Rs. 6954.18 Lakhs from public & Members during the year under review after complying with the provisions of the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014. There has been no default in repayment of deposits or payment of interest thereon during the year under review. There are no deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.
Your directors appreciate the support which the company has received from the public and shareholders to its fixed deposit scheme.
11. INSURANCE AND CLAIMS
All properties and insurable interests of the company including building, plant and machinery and stocks wherever necessary and to the extent required have been adequately insured.
12. SUBSIDIARY COMPANIES
On November 17, 2017, the company had incorporated a subsidiary company namely M/s. Aye Ess Spinning Mills Private Limited, Ahmedabad. There after it had acquired 100% equity shares of such company and accordingly, during the year, it becomes wholly owned subsidiary company of the company.
Further, during the period ended March 31, 2019 the subsidiary company has not started its commercial operations and therefore no Statement of Profit and Loss has been prepared for such subsidiary for the year ended March 31, 2019. On account of above, standalone and consolidated financial results of the company for year ended March 31, 2019 remains same. However, Consolidated Financial Statements of Assets and Liabilities as at March 31, 2019 of the parent company after incorporating Financial Statements of Assets and Liabilities as at March 31, 2019 of such subsidiary has been prepared.
A statement in Form AOC-I pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014 containing salient features of the financial statement of subsidiaries/ associate companies/joint venture is enclosed with this report as Annexure- A.
The board of directors of the company in its meeting held on 10.08.2019 has approved the striking off its wholly owned subsidiary company named M/s. Aye Ess Spinning Mills Private Limited, Ahmedabad
13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
For all related party transactions prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of foreseen and repetitive nature and such approval is in interest of the Company. Transactions entered into, pursuant to the omnibus approval so granted, are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval.
A detailed report on material contracts and arrangements made during the financial year 2018-19, being arms length transactions have been reported and annexed hereto in form AOC-2 as Annexure -B forming part of this report.
There are no materially significant related party transactions made by the company with promoters, key managerial personnel or other designated persons which may have potential conflict with interest of the company at large.
The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Companys website at the web link http://www.aarveedenims.com/investors/corporate-governance/
14. AUDIT COMMITTEE
Details pertaining to Composition of Audit Committee are included in Corporate Governance Report. All recommendations made by Audit Committee were accepted by Board.
15. RISK MANAGEMENT
The Company has adopted a Risk Management Policy for a systematic approach to control risks. The Risk Management Policy of the Company lays down procedures for risk identification, evaluation, monitoring, review and reporting. The Risk Management Policy has been developed and approved by the Senior Management in accordance with the business strategy.
16. INTERNAL CONTROLS SYSTEMS AND ADEQUACY
The Company has in place an adequate system of internal controls. It has documented policies and procedures covering all financial and operating functions and processes. These have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations, protecting assets from unauthorized use or losses and compliance with regulations.
17. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
1) Changes in Directors and Key Managerial Personnel
In accordance with the provision of Section 152 (6) of the Companies Act, 2013 and Articles of Association of the Company, Mr. Rajesh Arora (DIN: 00092200), Non-Executive Director shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible offer himself for re-appointment. The Board recommends his re-appointment.
Mr. Amol Dalal (DIN: 00458885), Mr. Arvind Sanghvi (DIN: 00435340), Mr. Ashok Gandhi (DIN: 00022507), Mr. Sanjay Majmudar (DIN: 00091305) being independent directors are not eligible for retire by rotation and hold office for five consecutive years for a term from the date of their appointment by the Board of Directors as per the provisions of Section 149, 152 read with Schedule IV of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Ms. Yashree Dixit (DIN: 7775794) Independent director of the Company has resigned w.e.f. 10th August, 2019.
Information regarding the meeting of directors and remuneration etc. is given in the Corporate Governance report attached with the report.
The company is having following Key Managerial Personnel: -
|Key Managerial Personnel||Designation|
|1 Mr. Vinod P. Arora, DIN: 00007065||Chairman & Managing Director|
|2 Mr. Ashish V. Shah, DIN: 00007201||Managing Director|
|3 Mr. Kalpesh V. Shah, DIN: 00007262||Whole Time Director|
|4 Mr. Nipun Arora, DIN: 00989835||Whole Time Director|
|5 Mr. Bhavik Shukla||Chief Financial Officer|
|6 Ms. Yashaswini Pandey*||Company Secretary|
*Ms. Yashaswini Pandey Company Secretary of the company has resigned w.e.f. 18.08.2019.
2) Declaration by an Independent Director(s)
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Regulation 16 (1) (b) of the Listing Regulations. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management. The detail terms of Independent Directors are disclosed on the Companys website with the following link http://www.aarvee-denims.com/script-code-stock-exchanges.html
3) Annual Evaluation of Board Performance and Performance of its Committees and of Directors
Pursuant to the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board has carried out an annual performance evaluation of its own performance and, the Directors individually and as well as the evaluation of the working of its Committees. The criteria applied in evaluation process are explained in the Corporate Governance Report.
18. NUMBER OF MEETINGS OF THE BOARD
During the year under review, four board meetings were convened and held, the details of which are given in the corporate governance report. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations.
19. COMMITTEES OF BOARD OF DIRECTORS
Your Company has several Committees which have been established as part of best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.
The Company has following Committees of the Board:
a. Audit Committee
b. Nomination and Remuneration Committee
c. Stakeholders Grievances and Relationship Committee
d. Corporate Social Responsibility Committee
e. Share Transfer Committee
A detailed note on the committees with respect to composition, meetings, powers, and terms of reference is provided under the corporate governance report section in this Annual Report.
20. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;
(ii) they 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, 2019 and of the Profit of the Company for the year ended on that date;
(iii) they have 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;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and (vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
21. CORPORATE SOCIAL RESPONSIBILITY
In Accordance with section 135 of the Act and Rules framed thereunder, the Company has constituted a Corporate Social Responsibility ("CSR") Committee of Directors. The details of composition of CSR Committee are given in the Corporate Governance Report.
The details of CSR policy and CSR spending by the Company have been provided as Annexure-C to this report, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014.
22. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.
The Company has not received any complaint of sexual harassment during the financial year 2018-19.
23. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, a Vigil Mechanism or Whisle Blower Policy for Directors, employees and other stakeholders to report genuine concern has been established. The same is uploaded on the website of the Company http://www.aarvee-denims.com/ pdfs/vigil-machanism.pdf. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.
24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.
(1) Statutory Auditors
M/s Shah & Shah Associates, Chartered Accountant, Ahmedabad (Firm Registration No. 113742W), Statutory Auditors of the Company were appointed in the 28th Annual General Meeting to holds office until the conclusion of the 33rd Annual General Meeting going to be held in the calendar year 2022.
(2) Cost Auditors
The company has received a consent letter from the cost auditors M/s. N. D. Birla and Co., Cost Accountant to the effect that their appointment, if made, would be within the prescribed limits under section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for appointment. The board of Directors of the company at its meeting held on 23rd May, 2019 appointed M/s. N. D. Birla & Co., Cost Accountants as the cost auditors of the Company to conduct the audit of cost records maintained by the Company as required by the Companies (Cost Records and Audit) Rules 2014 as amended from time to time.
The members are requested to ratify the remuneration to be paid to the cost auditors of the company
(3) Secretarial Auditors
Pursuant to Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Tapan Shah & Co., Practicing Company Secretary (COP No. 2839) for conducting Secretarial Audit of the Company for the financial year ended on 31st March, 2019. The Secretarial Audit report of M/s Tapan Shah & Co. Company Secretaries for the financial year ended 31st March, 2019, is annexed as Annexure - D.
26. FRAUD REPORTED BY AUDITORS UNDER SUB SECTION (12) OF SECTION 143 OTHER THAN THOSE TO REPORTABLE TO CENTARL GOVERNMENT:
During the year under review, the Statutory Auditors and Secretarial Auditor have not reported any instances of fraud committed in the Company by its officers or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013
27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 (3) of The Companies (Accounts) Rules, 2014, is annexed as Annexure - E.
28. PARTICULARS OF EMPLOYEES AND REMUNERATION
The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is attached as Annexure - F to this report.
29. EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in form MGT - 9 is annexed as annexure- G to this report. Form- MGT-9 is uploaded on the website of the Company http://www.aarvee-denims.com.
30. INDUSTRIAL RELATIONS
The industrial relations continued to be generally peaceful and cordial.
31. REGULATORY STATEMENT
The Equity shares of your company are listed on the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE).
The Company has paid the listing fees for the year 2018-19 to above stock exchanges.
Your Directors thank the various Central and State Government Departments, Organizations and Agencies for their continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year and look forward to their continued support in future. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.
|FOR AND ON BEHALF OF BOARD OF DIRECTORS|
|Vinod P. Arora|
|Place : Ahmedabad||Chairman & Managing Director|
|Date : 10.08.2019||DIN:00007065|
|REGISTERED OFFICE :|
|Nr. Old Octroi Naka,|
|Narol Sarkhej Highway, Narol,|
|Ahmedabad - 382 405.|
|CIN : L17110GJ1988PLC010504|