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Your Directors have pleasure to present the 26th Annual Report on the business and operations of your Company along with the Financial Statements for the year ended 31st March, 2018.
The Financial results of the Companys operations for the year under review and those of the previous year are as follows: -( Rs. in Crores)
|Particulars||Current Year||Previous Year|
|REVENUE FROM OPERATIONS||1,145.25||933.39|
|Gross Profit Before Finance Cost, Depreciation & Exceptional item.||157.18||134.25|
|Profit before Depreciation, Exceptional items and Tax||127.63||111.98|
|PROFIT BEFORE TAXATION||71.44||70.32|
|Provision for Taxation- Current (Net of MAT Credit)||15.98||2.33|
|- Earlier Year||(5.14)||-|
|- Deferred Tax||8.21||10.64|
|PROFIT AFTER TAX||52.39||57.35|
|OTHER COMPREHENSIVE INCOME NET OF INCOME TAX||(1.28)||1.30|
|TOTAL COMPREHENSIVE INCOME FOR THE PERIOD||51.11||58.65|
Note: The Company has adopted Indian Accounting Standards (Ind AS) in place of IGAAP as required vide Notification dtd. 16.02.2015 of the Ministry of Corporate Aff airs (MCA) and prepared the financial statements for the year ended 31st March, 2018 in accordance Ind AS for the first time. The financial statements for the year ended 31st March, 2017 have been restated in accordance with Ind AS for comparative information. The reconciliation and descriptions of the eff ect of the transition from IGAAP to Ind AS have been provided in Note No. 39 of the notes to accounts of the financial statements.
OPERATIONAL REVIEW Production
During the previous year your Company has implemented substantial capacity expansion and the same has been fully utilized as the Company has produced 47,138 MT Cotton Yarn and 7,526 MT Knitted Fabrics in the current year against 42,343 MT Cotton Yarn and 6,825 MT Knitted Fabrics in the previous year.
REVENUE FROM OPERATIONS
Your Directors are pleased to inform that the Company has recorded highest ever revenue of Rs. 1,145.25 Crores from operations in current year against Rs. 933.39 Crores in the previous year, an increase of 22.70%. The revenue of Cotton Yarn increased by 22.62% from Rs. 706.01 Crores to Rs. 865.74 Crores, whereas the revenue of Knitted Fabric increased by 12.50% from Rs. 156.52 Crores in the previous year to Rs. 176.09 Crores during the current year. Knitted Fabric revenue constitutes 15.38% of the total revenue from operations.
Exports of the Company increased significantly by 24.63% from Rs. 591.47 Crores in the previous year to
Rs. 737.12 Crores in the current year. Exports constitute 64.36% of the total revenue.
The year under review was a turbulent year for Textile Industry as the Industry was reeling with the eff ect of demonetisation and implementation of GST during the year under review caused major disruption whereby tax was levied across the entire value chain of the Industry as against earlier regime of only Fiber stage duties and taxes. Moreover, the duty drawbacks on exports were reduced leading to margin contraction, Power cost also increased substantially during the year as a result of levies of open access surcharge at the end of last year. In spite of all these adverse circumstances the operating profit (EBIDTA) of the Company has increased from
Rs. 134.25 Crores in the previous year to Rs. 157.18 Crores in the current year. However, in percentage terms of revenue from operations it is slightly lower to 13.72% in current year from 14.38% in previous year. The Cash Profit (PBDT) for the current year was Rs. 127.63 Crores against Rs. 111.98 Crores in the previous year. Due to implementation of expansion project in the last year the Interest Cost, Depreciation and Tax increased substantially because of increased loan, assets base and non availability of tax incentive which has adversely aff ected Profit after Tax as it has decreased to Rs. 52.39 Crores in the current year from Rs. 57.35 Crores in previous year. Finally, the Company has reported total comprehensive income after tax of Rs. 51.11 Crores for the current year as against Rs. 58.65 Crores during last year.
TRANSFER TO GENERAL RESERVE
A sum of Rs. 10 Crores has been appropriated to General Reserves out of total comprehensive income of Rs. 51.11 Crores for the year under review.
Your Directors are pleased to recommend Dividend of 12% i.e. Rs. 1.20 per Equity Shares on the fully paid-up Equity Shares of Rs. 10/- each for the financial year 2017-18 subject to approval of shareholders at the ensuing Annual General Meeting.
INSTALLATION OF INTEGRATED TEXTILE UNIT
The Company has undertaken to install Integrated Textile Unit at Bhanwaria Kalan, Tehsil Begun in the District of Chittorgarh, Rajasthan at an estimated project cost of Rs. 675 Crores. The unit will be having facilities to manufacture processed fabric right from fibre mainly using Cotton and Polyester as raw material. This will cater the complete need of apparel Manufacturer. The land for the project has been purchased and building construction activity already started. The project is eligible for customized package benefits under the Rajasthan Investment Promotion Scheme, 2014 of the Government of Rajasthan.
RAISING OF FUNDS THROUGH PREFERENTIAL ISSUE
During the year under consideration the Company has raised funds through issue of 93,85,765 Equity Shares of Rs. 10/- each at a premium of Rs. 105/- each aggregating to Rs. 107.94 Crores to the Qualified Institutional Buyers on preferential basis and 3,32,000 Equity Shares of Rs. 10/- each at a premium of Rs. 110.50 each aggregating to Rs. 4.00 Crores to Promoters of the Company on preferential basis inter-alia for repayment of debts, general corporate purposes etc. This has strengthened long term resources of the Company and will help the Company in its growth plans.
CORPORATE SOCIAL RESPONSIBILTY (CSR)
Your Company is committed to make a positive contribution to communities where it operates. Pursuant to Section 135 of the Companies Act, 2013, the Company constituted CSR committee and formulated CSR Policy as guiding principle for undertaking CSR activities. The Companys vision on CSR is that the Company being a responsible Corporate Citizen would continue to make a serious endeavor for a quality and better society through its CSR related initiatives. During the current year, the Company has incurred expenditure of Rs. 131.40 Lacs on CSR activities against liability of Rs. 126.50 Lacs. Accordingly, during the year there is no shortfall on CSR expenditure. The disclosures of CSR activities pursuant to Section 134(3) of the
Companies Act, 2014 read with Rule 9 of Companies (Corporate Social Responsibility) Rules, 2014 is annexed hereto and form part of this report as Annexure I.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri Nitin Nolakha, Director of the Company who retired and being eligible, was re-appointed at the Annual General Meeting of the Company held on 4th September, 2017. Shri R. L. Nolkha, Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, off er himself for re-appointment. Details of the Director seeking re-appointment are provided in the Corporate Governance Report forming part of this report. The Board recommends his appointment for consideration of members of the Company at the ensuing Annual General Meeting. No other changes have been taken place in composition of Board of Directors and Key Managerial Personnel of the Company during the year under review.
All Independent Directors of the Company have confirmed that they are complying with the requirement of Section 149(6) of the Companies Act, 2013 and applicable provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
M/s Kalani & Co., Chartered Accountants (FRN 000722C) were appointed Statutory Auditors for five years at the 25th Annual General Meeting held on 4th September, 2017. Accordingly, they shall continue to be Statutory Auditors for the 2018-19. The audit report on the financial statements for the financial year ended on 31st March, 2018, issued by M/s Kalani & Co., Chartered Accountants, do not contain any qualifications, reservations or adverse remarks. The Audit report is enclosed with the financial statements in this annual report and hence do not require any further clarification.
The Board of Directors has re-appointed M/s V.M. & Associates, Company Secretaries (Firm Registration No. P1984RJ039200), being eligible, to conduct Secretarial Audit for the Financial Year 2018-19 under the provisions of Section 204 of the Companies Act, 2013.
The Board of Directors has appointed M/s. V. M & Associates, Company Secretaries (Firm Registration No. P1984RJ039200), to conduct Secretarial Audit for the 2017-18 under the provisions of Section 204 of the Companies Act, 2013. The Report of Secretarial Auditors is enclosed herewith. The report does not contain any qualification, reservation or adverse remark.
Pursuant to Section 148 of the Companies Act, 2013, your Directors have appointed M/s. Vivek Laddha & Associates, Cost Accountants (FRN 103465), being eligible, to conduct Cost Audit of the Company for the Financial Year 2018-19.
The Company is committed to maintain the high standards of Corporate Governance. Your Directors adhere to the requirements set out in Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and have implemented all the prescribed requirements. In pursuant to regulation 34(3) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Reports on Corporate Governance and Management Discussions & Analysis have been incorporated in the Annual Report and forms an integral part of the Board Report.
AWARDS, RECOGNITION & CERTIFICATIONS
Your Company has been conferred with the following awards and recognition during the year under review :-
1. Rajasthan Export Award: During the year under review, the Government of Rajasthan has selected your Company for Rajasthan Export Award for the year 2016-17.
2. UCCI Excellence Award 2018 by Udaipur Chamber of Commerce & Industry under Large Enterprise Category.
3. Certifications :
Your Company got following certifications from British Standards Institution (BSI) during the year under review:- (a) Quality Management System - ISO 9001:2015 (b) Environmental Management System - ISO 14001:2015 (c) Energy Management System - ISO 50001:2011 (d) Occupational Health & Safety Management System - OHSAS 18001:2007 (e) Social Accountability System - SA 8000:2014 With these certifications your company has all Internationally recognized certifications.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to sub-section 3 (c) of Section 134 of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that: (i) in the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures have been given;
(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 at the end of the financial year and of the profit or loss of the Company for that period; (iii) they 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 frauds 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 were operating eff ectively; and (vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating eff ectively.
HUMAN RESOURCE DEVELOPMENT
Industrial relations continued to be cordial during the period under review. Your Company firmly believes that a dedicated work force constitutes the primary source of sustainable competitive advantage. Accordingly, human resource development received focused attention. The Company has in house skill training centre and imparts on the job training to its manpower on continuous basis. Your Directors wish to place on record their appreciation for the dedicated services rendered by the work force during the year under review.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A Statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo in accordance with Section 134(3)(m) read with the Rule 8 (3) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure II and forms integral part of this Report.
OTHER DISCLOSURES UNDER COMPANIES ACT, 2013 i) Number of Board Meetings :
The Board of Directors met five times in the year 2017-18. The details of number of Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.
ii) Composition of Audit Committee:
The Board constituted the Audit Committee which comprises of Sh. Y. R. Shah, Chairman, Smt. Aditi Mehta and Dr. R. Chattopadhyay as members. All the recommendations of Audit Committee have been accepted by the Board. More details on the committee are given in the Corporate Governance Report.
iii) Related Party Transactions :
All the related party transactions are entered on arms length basis and in the ordinary course of business. The Company has complied with all the applicable provisions of the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 in this regard. There is no materially significant related party transaction with Promoters, Directors or Key Management Personnel which may have potential conflict with the interest of the Company at large. During the year, the Company has not entered into any related party transactions under the Section 188 of the Companies Act, 2013 and the particulars of contracts or arrangements with related parties are Nil.
iv) Loans, Guarantees or Investments:
The Company has not given any Loan, Guarantee and also not made any Investments under the Section 186 of the Companies Act, 2013.
v) Fixed Deposits
The Company has not accepted or renewed any fixed deposits during the year under review and no fixed deposit is outstanding for payment at the year ended 31st March, 2018.
vii) Vigil Mechanism/Whistle Blower Policy :
In pursuance of Section 177 (9) of the Companies Act, 2013 and the regulation 22 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has in place a Vigil Mechanism/ Whistle Blower Policy for Directors and employees to report genuine concern. More details pertaining to the same are given in the Corporate Governance Report.
viii) Nomination, Remuneration & Evaluation Policy:
In pursuant to provisions of Section 178 of the Companies Act, 2013 and SEBI (Listing Obligations
& Disclosure Requirements) Regulations, 2015, the Board of Directors have approved Nomination, Remuneration & Evaluation Policy for appointment, remuneration & evaluation of the Directors, Key Management Personnel & Senior Management Personnel. The details of the Nomination and Remuneration committee, Nomination, Remuneration & Evaluation Policy and Annual Evaluation carried out by the Directors are given in the Corporate Governance Report.
ix) Particulars of Employees & Analysis of Remuneration:
Particulars of employees and analysis of remuneration as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed as Annexure - III
x) Extract of Annual Return
The extract of the Annual Return in Form MGT-9 as required under section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration Rules), 2014 is enclosed as
Annexure - IV
xi) Miscellaneous Disclosures:-
Details about risk management have been given in the Management Discussions & Analysis.
There is no material changes and commitments aff ecting the financial position of the Company which has occurred between the end of the financial year and the date of the report.
The Company does not have any subsidiary, joint venture & associate company. There is no significant and material order has been passed during the year by the regulators or courts or tribunals which can impact the going concern status and Companys operations in future.
The Company is having adequate Internal Financial Control with reference to the Financial Statements. During the year, the Company has not received any complaint under the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and no complaint was pending at the beginning of the year.
Directors wish to express their grateful appreciation for assistance and co-operation received from various Departments of Central & State Governments and Banks during the year under review. Your Directors also wish to place on record their appreciation for the committed services of all the associates and vendors of the Company.
For and on Behalf of the Board of Directors
R. L. NOLKHA
(DIN 00060746) Place : Bhilwara Dated : 10th May, 2018