Your Directors have pleasure in presenting the 28th Annual Report on thebusiness and operations of your Company together with the audited accounts for thefinancial year ended 31st March 2017.
Your Company's performance during the year is as below:
| || ||(Rs. in Lakh) |
|Particulars ||Year ended 31.03.2017 ||Year ended 31.03.2016 |
|Total Revenue ||84552.09 ||84506.54 |
|Profit before Interest Tax & Depreciation ||7282.22 ||8114.97 |
|Less: Net Interest & Finance Cost ||3763.40 ||3731.50 |
|Less: Depreciation ||3305.79 ||3064.42 |
|Profit before Exceptional Item and tax ||213.03 ||1319.02 |
|Less: Exceptional Item ||- ||473.20 |
|Profit before tax ||213.03 ||845.85 |
|Provision for Tax & Deferred tax ||94.43 ||143.20 |
|Profit for the year ||118.60 ||702.65 |
|Appropriations / Adjustments || || |
|Balance of Profit brought forward ||19427.45 ||18724.45 |
|Profit carried to Balance Sheet ||19546.05 ||19427.45 |
PERFORMANCE DURING THE YEAR
During the year under review total revenue of your Company remains almost at the samelevel of Rs. 84552.09 Lakh as against Rs. 84506.54 Lakh for the previous year. The Netprofit for the year stood at Rs. 118.60 Lakh against Rs. 702.65 Lakh in the previous year.Your Company however looks forward to further strengthen its operations by consistentlyfocusing in embarking its profits for the coming years.
Your Directors do not recommend payment of any Dividend for the Financial year ended 31stMarch 2017 in order to conserve the resources of the Company The Company will retainthe earning for use in the future operations & Projects and strive to increase the networth of stakeholders of the Company.
During the year under review the company tied up Long Term Loan of Rs. 1057.24 Lakhfrom a financial institution for the purpose of part funding of capital expenditure of thecompany.
During the year under review the company has repaid External Commercial Borrowing(ECB) of USD 2.89 million (Rs. 1740.78 Lakh) to Standard Chartered Bank (SCB) and USD 2.25Lakh million (Rs. 1552.51 Lakh) to Bank of Baroda (UAE).
RESERVES AND SURPLUS
The Company has not transferred any amount to General Reserves for the Financial Year2016-17.
The paid up Equity Share Capital as at 31st March 2017 stood at Rs.2345.98 Lakh. During the year under review the Company has neither made any issue ofequity shares with differential voting rights nor has granted any stock options or sweatequity. The Company has no scheme of provision of money for purchase of its own shares byemployees or by trustees for the benefit of employees.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS
During the financial year under review pursuant to SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015 your Company has complied with all theapplicable provision of Corporate Governance.
Separate report on Corporate Governance and Management Discussion & Analysis asrequired under the SEBI Listing Regulations are forming parts of the Annual Report.
The requisite certificate from the Practicing Company Secretary confirming thecompliance with the condition of Corporate Governance is attached to the Report onCorporate Governance.
MATERIAL CHANGES IF ANY
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial relate and the dateof this report
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
Your company has accepted/renewed the deposits aggregating to Rs. 4396.93 Lakh frompublic & Members during the year under review after complying with the provisions ofthe Companies Act 2013 and Companies (Acceptance of Deposits) Rules 2014. There has beenno default in repayment of deposits or payment of interest thereon during the year underreview. There are no deposits which are not in compliance with the requirements of ChapterV of the Companies Act 2013.
Your directors appreciate the support which the company has received from the publicand shareholders to its fixed deposit scheme.
INSURANCE AND CLAIMS
All properties and insurable interests of the company including building plant andmachinery and stocks wherever necessary and to the extent required have been adequatelyinsured.
On 20th January 2017 Oriental Insurance Company Limited has paid Rs. 6.29Crores (Rupees Six Crores Twenty Nine Lakh) and on 8th June 2017 United IndiaInsurance Company Limited has paid Rs. 6.74 Crores (Rupees Six Crores Seventy Four Crores)in full and final settlement towards Insurance claim lodged by Company with said bothInsurance Companies in respect of Fire incident happened on 1st March 2015 atVijay farm unit of the Company.
The Company has received Rs. 150.00 Lakh as an on account payment and Rs. 145.66 Lakhas full and final settlement on 14th July 2016 and 21st July 2017 respectively fromUnited India Insurance Company Limited towards insurance claim lodged by the company inrespect of fire incident occurred on 23rd October 2015 at Matoda unit of the company.
On 6th February 2017 there was a fire in Finishing and Packing Departmentof Narol Unit of the Company resulting into loss of stock ceiling and other areas of fireplaces were damaged. The carrying value of the assets destroyed in fire is estimated atRs. 60.00 Lakh.
The company has insurance policies of all affected assets so the Company has lodgedclaims with the insurance company which claims include claim towards loss of the abovestated assets.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
For all related party transactions prior omnibus approval of the Audit Committee isobtained on a yearly basis for the transactions which are of foreseen and repetitivenature and such approval is in interest of the Company. Transactions entered intopursuant to the omnibus approval so granted are audited and a statement giving details ofall related party transactions is placed before the Audit Committee and the Board ofDirectors for their approval.
A detailed report on material contracts and arrangements made during the financial year2016-17 being arm's length transactions have been reported and annexed hereto in formAOC-2 as Annexure - A forming part of this report.
There are no materially significant related party transactions made by the company withpromoters key managerial personnel or other designated persons which may have potentialconflict with interest of the company at large.
The Company has adopted a Related Party Transactions Policy. The Policy as approved bythe Board is uploaded on the Company's website at the web linkhttp://www.aarveedenims.com/wp-content/uploads/2017/02/related-party-transaction-policy.pdf
Your Company does not have any subsidiary.
Details pertaining to Composition of Audit Committee are included in CorporateGovernance Report. All recommendations made by Audit Committee were accepted by Board.
The Company has adopted a Risk Management Policy for a systematic approach to controlrisks. The Risk Management Policy of the Company lays down procedures for riskidentification evaluation monitoring review and reporting. The Risk Management Policyhas been developed and approved by the Senior Management in accordance with the businessstrategy.
INTERNAL CONTROLS SYSTEMS AND ADEQUACY
The Company has in place an adequate system of internal controls. It has documentedpolicies and procedures covering all financial and operating functions and processes.These have been designed to provide a reasonable assurance with regard to maintaining ofproper accounting controls for ensuring reliability of financial reporting monitoring ofoperations protecting assets from unauthorized use or losses and compliance withregulations.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
1) Changes in Directors and Key Managerial Personnel
Mr. Hardik Modi Company Secretary has resigned w.e.f. 4th July 2016 and inplace of him Company has appointed Mr. Sharvil B. Suthar as Company Secretary andCompliance Officer w.e.f. 29th August 2016.
Mr. Suketu Shah has resigned from his post of Chief Executive Officer (CEO) of theCompany on 30th November 2016 and in place of him Company has appointed Mr.Subhasish Bandyopadhyay as Chief Executive officer (CEO) of the Company w.e.f. 1stDecember 2016.
In accordance with the provision of Section 152 (6) of the Companies Act 2013 andArticles of Association of the Company Mr. Rajesh Arora (DIN: 00092200) Non-ExecutiveDirector shall retire by rotation at the forthcoming Annual General Meeting of the Companyand being eligible offer himself for reappointment. The Board recommends hisre-appointment.
None of the Director has resigned during the year under review.
2) Declaration by an Independent Director(s)
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 (6) of the Act and Regulation 16 (1) (b) ofthe Listing Regulations. In the opinion of the Board they fulfill the conditions ofindependence as specified in the Act and the Rules made there under and are independent ofthe management. The detail terms of Independent Directors are Disclosed on the Company'swebsite with the following linkhttp://www.aarveedenims.com/wp-content/uploads/2017/02/draft-appointment-letter-to-independent-director.pdf
3) Annual Evaluation of Board Performance and Performance of its Committees and ofDirectors
Pursuant to the applicable provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carried out anannual performance evaluation of its own performance and the Directors individually andas well as the evaluation of the working of its Committees. The criteria applied inevaluation process are explained in the Corporate Governance Report.
NUMBER OF MEETINGS OF THE BOARD
During the year under review four board meetings were convened and held the detailsof which are given in the corporate governance report. The intervening gap between themeetings was within the period prescribed under the Act and the Listing Regulations.
COMMITTEES OF BOARD OF DIRECTORS
Your Company has several Committees which have been established as part of bestcorporate governance practices and are in compliance with the requirements of the relevantprovisions of applicable laws and statutes.
The Company has following Committees of the Board:
Nomination and Remuneration Committee
Stakeholders' Grievances and Relationship Committee
Corporate Social Responsibility Committee
Share Transfer Committee
A detailed note on the committees with respect to composition meetings powers andterms of reference is provided under the corporate governance report section in thisAnnual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:
(i) in the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures;
(ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2017 and of theProfit of the Company for the year ended on that date;
(iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 andthat such internal financial controls are adequate and are operating effectively; and
(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
CORPORATE SOCIAL RESPONSIBILITY
In Accordance with section 135 of the Act and Rules framed thereunder the Company hasconstituted 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 asAnnexure-B to this report as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure.
The Company has not received any complaint of sexual harassment during the financialyear 2016-17.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013 andRegulation 22 of SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015 aVigil Mechanism or Whistle Blower Policy' for Directors employees and otherstakeholders to report genuine concern has been established. The same is uploaded on thewebsite of the Company http://www.aarveedenims.com/wp-content/uploads/2017/02/vigil-machanism.pdf It is affirmed that no personnel of the Company has been deniedaccess to the Audit Committee.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
(1) Statutory Auditors
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderM/s. Deloitte Haskins & Sells Chartered Accountants Ahmadabad (ICAI firm RegistrantNo. 17365W) and M/s. N. C. Shah & Associates Chartered Accountants Ahmedabad (ICAIfirm Registration No. 109692W) will conclude their term from the close of the forthcomingAnnual General Meeting of the Company in compliance of mandatory rotation of Auditors asper the provision of the Companies Act 2013. The Board of Directors places on record itsappreciation for the services rendered by Joint Auditors.
Subject to approval of Members the Board of Directors of the Company has recommendedthe Appointment of M/s. Shah & Shah Associates Chartered Accountant Ahmedabad (ICAIfirm registration No.113742W) as the Statutory Auditors of the Company pursuant toCompanies Act 2013. Member's attention drawn to a Resolution proposing the appointment ofM/s. Shah & Shah Associates Chartered Accountant Ahmedabad as Statutory Auditors ofthe Company which is included in item No. 3 of the Notice convening Annual GeneralMeeting.
(2) Cost Auditors
The company has received a consent letter from the cost auditors M/s. N. D. Birla andCo. Cost Accountant to the effect that their appointment if made would be within theprescribed limits under section 141(3) (g) of the Companies Act 2013 and that they arenot disqualified for appointment. The board of Directors of the company at its meetingheld on 26th May 2017 appointed M/s. N. D. Birla & Co. Cost Accountantsas the cost auditors of the Company to conduct the audit of cost records maintained by theCompany as required by the Companies (Cost Records and Audit) Rules 2014 as amended fromtime to time.
The members are requested to ratify the remuneration to be paid to the cost auditors ofthe company
(3) Secretarial Auditors
Pursuant to Section 204 of the Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed M/s. TapanShah & Co. Practising Company Secretary (COP No. 2839) for conducting SecretarialAudit of the Company for the financial year ended on 31st March 2017. TheSecretarial Audit report of M/s Tapan Shah & Co. Company Secretaries for the financialyear ended 31st March 2017 is annexed as Annexure - C.
FRAUD REPORTED BY AUDITORS UNDER SUB SECTION (12) OF SECTION 143 OTHER THAN THOSE TOREPORTABLE TO CENTARL GOVERNMENT:
During the year under review the Statutory Auditors and Secretarial Auditor have notreported any instances of fraud committed in the Company by its officers or Employees tothe Audit Committee under Section 143(12) of the Companies Act 2013
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 (3) ofThe Companies (Accounts) Rules 2014 is annexed as Annexure - D.
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 employeesof the Company is attached as Annexure E to this report.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management andAdministration) Rules 2014 the extract of Annual Return in form MGT - 9 is annexed asAnnexure - F.
The industrial relations continued to be generally peaceful and cordial.
The Equity shares of your company are listed on the BSE Limited (BSE) and the NationalStock Exchange of India Limited (NSE).
The Company has paid the listing fees for the year 2017-18 to above stock exchanges.
Your Directors thank the various Central and State Government DepartmentsOrganizations and Agencies for their continued help and co-operation extended by them. TheDirectors also gratefully acknowledge all stakeholders of the Company viz. customersmembers dealers vendors banks and other business partners for the excellent supportreceived 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 Companyfor 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 : 28/07/2017 ||DIN:00007065 |
|Registered office: || |
|191 Shahwadi || |
|Nr. Old Octroi Naka Narol - Sarkhej Highway || |
|Narol Ahmedabad - 382 405 || |
|CIN: L17110GJ1988PLC010504 || |