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To The Members of
R & B Denims Limited
The Directors take pleasure in presenting the Eight Annual Report together with the audited financial statements for the year ended March 31, 2018. The Management Discussion and Analysis has also been incorporated into this report.
1. FINANCIAL RESULTS
(Rs. in Lakhs except per share data)
|Sales/ Business Income||21,735.91||20,775.50|
|Less: Expenses (Excluding Depreciation)||20,704.59||19,688.68|
|Profit before depreciation, exceptional items and||1346.6||864.61|
|Profit before exceptional items and taxes||702.21||45.96|
|Less: Exceptional Items||-||-|
|Profit before Taxation||702.21||45.96|
|Less: Income Tax||156.64||185.74|
|MAT Credit Provision||-|
|Profit after Taxation||584.34||(45.34)|
|Balance brought forward||159.91||207.85|
|Profit for the year||584.34||(45.34)|
|Other Comprehensive Income||4.02||(2.60)|
|Total Retained Earnings||748.27||159.91|
|Available Profit & (transfers) dealt as under:|
|Transfer to/(from) General Reserve||588.36||(47.94)|
|Balance carried forward||748.27||159.91|
|Earnings per share (Rs.) :Basic||4.20||0.00|
2. HIGHLIGHTS OF PERFORMANCE
Standalone total income for the current financial year was increased to Rs. 22,051.19 (in lakhs) as compared to Rs. 20,553.29 (in lakhs) in 2017, increased by 7.29%;
Standalone net sales for the year was Rs. 21,735.91 (in lakhs) as compared to Rs. 20,775.50 (in lakhs) in 2017, a growth of 4.62%;
Standalone profit before tax for the year was Rs. 702.21 (in lakhs) as compared to Rs. 45.96 (in lakhs) in 2017, a remarkable growth of 1427.92%;
Standalone Other Comprehensive Income (OCI) for the year was Rs. 4.02 (in lakhs) as compared to Rs. (2.60) (in lakhs) in 2017, positive growth of 2.54 times;
Standalone Profit after tax for the year was Rs. 588.36 (in lakhs) as compared to Loss of Rs. 47.94 (in lakhs) in 2017, an enormous positive growth.
3. STATE OF COMPANYS AFFAIRS
Your directors are glad to report that during the year under review your company has posted higher income of Rs. 22,051.19 (in lakhs) in the current year as compared to Rs. 20,553.29 (in lakhs) in the corresponding previous year. During the current year your company has shown a remarkable profit of Rs. 584.34 (in lakhs) as against to the net loss of Rs. 45.34 (in lakhs) in the corresponding previous year.
4. TRANSFER TO RESERVES IN TERMS OF SECTION 134(3)(J) OF THE COMPANIES ACT, 2013
For the financial year ended on March 31, 2018, the Company has proposed to carry an amount of Rs 584.34 (in lakhs) to Balance Sheet under the head other Equity.
In view of the requirement of the profits for strengthening of the company, your directors have decided to plough back the profit into the business hence no dividend could be recommended for the year under review.
6. MATERIAL CHANGES SUBSEQUENT TO THE CLOSE OF THE YEAR:
No material changes have occurred between Balance Sheet date and the date on which the financial statement are approved by the Board of Directors.
7. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:
During the audit period, the company has settled the case regarding non-compliance of Regulation 30(2) read with 30(3) of the Substantial Acquisition of Shares and Takeover Regulation, 2011 by promoters of the company for the year ended March, 2015 by paying settlement fees of Rs. 200,000/- which is recommended by High Powered Advisory Committee
(HPAC) and subsequently approved by the panel of Whole Time members of SEBI and received the Settlement order from Adjudicating Officer dated 30/10/2017.
8. SUBSIDIARY COMPANY/ASSOCIATE/JOINT VENTURE:
There has been no subsidiary/Associate/Joint Venture incorporated/ceased of your company during the financial year 2017-18.
9. MANAGEMENTS DISCUSSION AND ANALYSIS REPORT
In terms of the provision of Regulation 34 of the Securities Exchange Board of India (Listing Obligation and Disclosure Requirement) Regulation 2015, the management Discussion and Analysis is a forming part of this Annual Report.
10. CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the company during the financial year 2017-18.
11. SHARE CAPITAL
The paid up Equity Share Capital as on March 31, 2018 was Rs. 1399.46 (in lakhs). The Company has not issued/allotted any during the financial year 2017-18.
The Cash and cash equivalent as at March 31, 2018 was Rs. 12.51 (in lakhs). The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.
12.1 ACCEPTANCE OF DEPOSITS
The Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014 and any modification thereof.
12.2 PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.
13. Quality initiatives
The Company continues its commitment to the highest levels of quality, superior service management, robust information security practices and mature business continuity management. In FY18, The Company has obtained two ISO Certificates namely ISO 9001:2015 and ISO 14001:2015 for Quality Management System and Environmental Management System respectively from TUV SUD South Asia Private Limited.
14. CORPORATE SOCIAL RESPONSIBILITY
The Company has not earned average profits over the three previous years 2014-2015, 2015-2016 & 2016-2017 and thus the requirement of expenditure of 2% of average net profits under section 198 over the last three years, is thus not applicable. However, since the Company had crossed the threshold for net profits computed under section 198 of the Companies Act, 2013 as on March 31, 2018, the CSR Committee will constitute in compliance with the provisions of the Act. The Committee would frame the CSR Policy for the Company in accordance with the terms of reference.
15. BUSINESS RESPONSIBILITY REPORT (BRR)
The Board of Directors of the Company hereby confirms that, according to the provisions of Regulation 34(2)(f) of the Securities Exchange Board of India (Listing Obligation and Disclosure Requirement) Regulation 2015 and amended thereof, the report on Business Responsibility Report (BRR) is not mandatorily applicable to our company, hence not annexed with Annual Report.
16. ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF DIRECTORS
The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act, SEBI Listing Regulations and the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.
The Nomination and Remuneration Committee has defined evaluation criteria, procedure and time schedule for Performance Evaluation process for the Board, its Committees and Directors.
The Boards functioning was evaluated on various aspects, including inter alia degree of fulfilment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.
The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Managing Director.
The performance evaluation of Independent Directors was carried out by entire Board, excluding Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by Independent Directors who also reviewed performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed performance of the Board, its Committees and of Directors.
The Companys policy on directors appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which is a part of this report.
17. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has in place a vigil mechanism for Directors and Employees, to report genuine concerns about any wrongful conduct with respect to the Company or its business or affairs. This policy covers malpractices, misuse or abuse of authority, fraud, violation of the Companys policies or Rules, manipulations, negligence causing danger to public health and safety, misappropriation of monies, and other matters or activity on account of which the interest of the Company is affected or is likely to be affected and formally reported by whistle blowers. The Policy provides for adequate safeguards against victimization of employee who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.
The Policy on vigil mechanism and whistle blower policy may be accessed on the Companys website at the link: http://www.rnbdenims.com/investor/VIGIL%20MECHANISM%20FOR%20DIRECTORS%20AND%20EM PLOYEES.pdf?
18. POLICY FOR DETERMINATION OF MATERIALITY OF EVENTS
The Policy for Determining Materiality of Information / Events for reporting to the Stock Exchange is framed pursuant to SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 which enables the investors to make well-informed investment decisions and take a view on the Materiality of an event that qualifies for disclosure.
The Policy for Determining Materiality of Information / Events may be accessed on the Companys website at the link: http://www.rnbdenims.com/investor/POLICY%20FOR%20DETERMINIMG%20MATRIALITY%20OF%20 INFORMATION.pdf?
19. POLICY FOR PRESERVATION & ARCHIVAL OF DOCUMENTS
The Policy for Preservation & Archival of documents is framed pursuant to Regulation 9 & 30(8) of SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015, investors and concerned authority accessed preservation of documents and records of the Company through companys website, which is required to be maintained under the Companies Act, 2013 and Listing Regulation. Any disclosure of events or information which has been submitted by the Company to the Stock Exchanges will be available on the website of the Company for a period of 5 years from the date of its disclosure and shall thereafter be archived from the website of the Company for a period of 3 years. This policy basically deals with the retention and archival of corporate records.
The Policy for Preservation & Archival of documents may be accessed on the Companys website at the link: http://www.rnbdenims.com/investor/PRESERVATION%20OF%20DOCUMENTS%20&%20ARCHIVAL% 20POLICY.pdf?
20. COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
Your Company has zero tolerance for Sexual Harassment at workplace. Your Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.
There were no complaints reported for sexual harassment during the financial year 2017-18.
21. DECLARATION BY INDEPENDENT DIRECTORS
Pursuant to the provisions of Section 149 of the Act, Mr. Dharmesh Prafulchandra Mehta, Mr. Girish Kumar Kalawatia, Mr. Manak Lal Tiwari, and Mrs. Anita Pankaj Jain are Independent Directors of the Company. They have submitted a declaration that each of them meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). There has been no change in the circumstances affecting their status as an Independent Director during the year.
During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.
22. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mrs. Prerna Vikas Jain, Women & Independent Director retired with effect from December 01, 2017. The Board places on record its appreciation for her invaluable contribution and guidance provided by her.
Mrs. Anita Pankaj Jain was appointed as Additional Director and designated as Women & Independent Director with effect from December 27, 2017.
Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2018 are: Mr. Rajkumar Mangilal Borana, Managing Director, Mr. Amitkumar Anandbhai Dalmia, Whole-time Director, Mr. Deepak A Dalmia, Whole-time Director, Mr. Ankur Mangilal Borana, Whole-time Director, and Mrs. Jyoti Arun Agarwal, Company Secretary.
In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr. Deepak A. Dalmia (holding DIN: 00050547) retires by rotation and is eligible for re-appointment.
22.1 Policy on directors appointment and remuneration
The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior
Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.
During the year, Board Meetings and Committee Meetings were convened and held. The details of which are given herein below and also in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
DETAILS OF MEETINGS HELD DURING THE F.Y. 2017-18
|Sr. No.||Date of Meeting||Class of Meeting||Board Strength||
No. of Directors Present
|1||10-04-2017||Stakeholders Relationship Committee|
|3||27-05-2017||Board of Director Meeting|
|4||24-07-2017||Stakeholders Relationship Committee|
|5||05-08-2017||Nomination & Remuneration Committee|
|7||06-09-2017||Board of Director Meeting|
|8||27-09-2017||Board of Director Meeting|
|10||13-11-2017||Board of Director Meeting|
|11||27-11-2017||Stakeholders Relationship Committee|
|12||27-12-2017||Board of Director Meeting|
|13||16-01-2018||Nomination & Remuneration Committee|
|15||05-03-2018||Stakeholders Relationship Committee|
|16||31-03-2018||Board of Director Meeting|
23. DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
a. that in the preparation of the annual financial statements for the year ended March 31,
2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. that the directors had selected such accounting policies and applied them consistently and made judgment 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. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
24. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on an arms length basis. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large and the details of which is prescribed in Form AOC-2 as an "Annexure-A" attached to this report.
25.1 Statutory Auditors
The Statutory Auditors, M/s. Pradeep Singhi & Associates, Chartered Accountants of Surat have indicated that due to the provision of section 139(2) of the Companies Act 2013, our firm is not eligible to re-appoint as a Statutory Auditor of your company. M/s. Pamita Doshi & Co., Chartered Accountants of Surat have submitted a written consent that they are eligible to hold office as Statutory Auditors of the Company in terms of Section 139 of the Act and that they satisfy the criteria provided in Section 141 of the Act. The Board recommends the appointment of M/s Pamita Doshi & Co., Chartered Accountants of Surat as Statutory Auditors of the Company to hold office from the conclusion of the ensuing Annual General Meeting till the conclusion of the Annual General Meeting of the Company to be held for the financial year 2022-23. The necessary resolution is being placed for consideration of the members at the ensuing Annual General Meeting. The auditors have also confirmed that they hold a valid certificate which is issued by the Peer Review Board of the Institute of Chartered Accountants of India.
25.2 Cost Auditors
Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its denim activity is required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed Messrs V. M. Patel & Associates to audit the cost accounts of the Company for the financial year 2018-19 on a remuneration of Rs. 35,000/- plus Service tax, if applicable and out of pocket expenses. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Members ratification for the remuneration payable to Messrs V. M. Patel & Associates, Cost Auditors is included at Item No. 5 of the Notice convening the Annual General Meeting.
25.3 Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 The Board has appointed Messrs JAINAM N SHAH & CO, Practicing Company Secretary, Surat, to conduct the Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report for the financial year ended March 31, 2018 is annexed herewith marked as "Annexure-B" to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
26. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders.
Accordingly, your Companys operations are committed to the pursuit of achieving high levels of operating performance and cost competitiveness, consolidating and building for growth, enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its other stakeholders by ensuring that its corporate actions positively affect the socio-economic and environmental dimensions and contribute to sustainable growth and development.
27. CORPORATE GOVERNANCE
As per SEBI Listing Regulations, the Corporate Governance Report with the Auditors Certificate thereon, and the Management Discussion and Analysis are attached, which forms part of this report.
28. ENERGY CONSERVATION, 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 Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure-C".
29. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in form MGT 9 is appended as "Annexure-D" to the Boards report.
30. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) read with Rule, 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the "Annexure-E" of the Annual Report.
31. SECRETARIAL STANDARDS
The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to Meetings of the Board of Directors and General Meetings, respectively, have been duly followed by the Company.
32. INTERNAL FINANCIAL CONTROLS
Internal Financial Controls are an integrated part of the risk management process, addressing financial and financial reporting risks. The internal financial controls have been documented, digitised and embedded in the business processes.
Assurance on the effectiveness of internal financial controls is obtained through management reviews, control self-assessment, continuous monitoring by functional experts as well as testing of the internal financial control systems by the internal auditors during the course of their audits. We believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.
33. RISK MANAGEMENT
Our Enterprise Risk Management encompasses practices relating to the identification, analysis, evaluation, treatment, mitigation and monitoring of the strategic, external and operational controls risks to achieving our key business objectives. Risk Management at our company seeks to minimize the adverse impact of these risks, thus enabling the Company to leverage market opportunities effectively and enhance its long-term competitive advantage. Several risks can impact the achievement of a particular business objective. Similarly, a single risk can impact the achievement of several business objectives. The focus of risk management is to assess risks and deploy mitigation measures.
The Board would like to place on record its sincere appreciation to Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them and also gratefully acknowledge for the wholehearted support and contribution made by its customers, its shareholders as well as the various workers, staff, members, Distributors, Suppliers, Banks, concerned authorities and other business partners, towards the conduct of efficient and effective operations of your Company. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.
35. CAUTIONARY STATEMENT
Statements in the Boards Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.
Certain statements in this report relating to Companys objectives, projections, outlook, expectations, estimates, etc may be forward looking statements within the meaning of applicable laws and regulations. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, actual results or performance could differ materially from such expectations, projections, etc whether express or implied as a result of among other factors, changes in economic conditions affecting demand and supply, success of business and operating initiatives and restructuring objectives, change in regulatory environment, other government actions including taxation, natural phenomena such as floods and earthquakes, customer strategies, etc over which the Company does not have any direct control.
|For and on behalf of The Board Of Directors,|
|R & B DENIMS LIMITED|
|Place: Surat||Rajkumar Mangilal Borana|
|Date: 28/05/2018||(Chairman & Managing Director)|