THE MEMBERS OF
AMARJOTHI SPINNING MILLS LIMITED
Your Directors have pleasure in presenting the Twenty NinethAnnual Report together with the audited accounts of your Company for the year ended 31stMarch 2017.
| ||2016-2017 ||2015-2016 |
| ||Rs. ||Rs. |
|Revenue from Operations ||2168202787.41 ||1941350801.71 |
|Other Income ||44713849.88 ||24757156.00 |
|Total Revenue ||2212916637.29 ||1966107957.71 |
|Less: Total Expenses ||2001064961.97 ||1873228523.71 |
|Profit before Tax ||211851675.32 ||92879434.00 |
|Profit after Tax ||137846675.32 ||86099434.00 |
|Surplus brought forward ||673057689.54 ||614766921.54 |
|Amount available for appropriation ||810904364.86 ||700866355.54 |
|Appropriations to : || || |
|General Reserve ||13785000.00 ||8610000.00 |
|CSR Reserve ||3562878.00 ||3362626.00 |
|Previous year Income tax arrear paid ||249958.00 ||0 |
|Proposed Dividend - Including Dividend Tax ||16248282.00 ||15836040.00 |
|Surplus carried to balance sheet ||777058246.86 ||673057689.54 |
|TOTAL ||810904364.86 ||700866355.54 |
STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK:
The Company's sales increased by 11.68% to Rs.21682.03 Lakhsduring the year under review as against Rs.19413.50 Lakhs in the previous year.Profitability of the company also increased.
i) YARN DIVISION
Your Directors inform you that yarn division continues to performwell. We hope that in future also our performance will improve.
ii) PROCESSING UNIT
The Processing unit is fully utilized for the dyeing of materialof our spinning unit. In addition to our own dyeing we process our material in outsidedyeing also.
The Company will continue to perform well in the domestic market.The Company is in the process of implementing several cost saving measures includingmodernization which will make the product more competitive.
CHANGE IN NATURE OF BUSINESS IF ANY:
There were no changes in Nature of Business during the year2016-2017.
Your Directors are glad to recommend a dividend of Rs. 2.00 pershare (20% on the Face value) for the year ended 31st March 2017 absorbing a sum ofRs.13500000/- for the approval of the share holders at the ensuing Annual GeneralMeeting. The dividend will be free of tax in the hands of shareholders since the Companywill be paying the Dividend Distribution Tax at the prescribed rate.
During the year your Company has transferred an amount ofRs.13785000.00 to the General Reserve.
CHANGES IN SHARE CAPITAL:
There were no changes in Share Capital of the Company during theFinancial Year 20162017.
DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIALRIGHTS:
The Company has not issued any Equity Shares with DifferentialRights during the Financial Year2016-2017.
DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS:
The Company has not provided any Stock Option Scheme to theemployees during the year Under Review.
DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES :
The Company has not issued any Sweat Equity Shares during theyear under review.
EXTRACT OF ANNUAL RETURN :
As required pursuant to Section 92 (3) of the Companies Act 2013and Rule 12 (1) of the Companies (Management and Administration) Rules 2014 an extractof Annual Return in the Form MGT-9 is annexed as a part of this report vide "ANNEXUREVI".
NUMBER OF BOARD MEETINGS:
During the Financial Year 2016-17 4 (Four) Meetings of the Boardof Directors of the company were held on as given below. The details of Board Meeting andAttendance of Directors are disclosed in the Corporate Governance Report.
Date of meetings:
|27.05.2016 ||29.07.2016 ||29.10.2016 ||30.01.2017 |
PARTICULARS OF LOAN GUARANTEES AND INVESTMENTS UNDER SECTION186:
The Company has not provided any Loan/Guarantee during the yearunder review. During the year the Company has made investments for a sum of Rs.2705400each in the partnership firms Southwest Wind Farms and Northeast Wind Farms as 27% shareof capital for the purpose of captive consumption of power generated by their wind mills.
RELATED PARTY TRANSACTIONS:
All transactions entered into by the Company with related partieswere in the ordinary course of business and on an arm's length basis. The Company did notenter into any material transaction with related parties under Section 188 of theCompanies Act 2013 during the year. Form AOC-2 as required under Section 134 (3) (h) ofthe Act read with Rule 8 (2) of the Companies (Accounts) Rules 2014 is attached as partof this report vide Annexure III (i). Further the Company's policy on Related PartyTransactions is attached as part of this report vide Annexure III (ii).
EXPLANATION OR COMMENTS ON QUALIFICATIONS RESERVATIONS ORADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS:
There are no qualifications reservations or adverse remarks ordisclaimers made by the auditors for the year.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESEFINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financialposition of the Company occurred between the end of the financial year to which thisfinancial statements relate and the date of this report.
In terms of Section 204 of the Companies Act 2013 and the rulesthere under the Company has appointed Mr. R.Ramchandar B.com ACS LLB as the SecretarialAuditor of the Company. Secretarial Audit Report in Form MR-3 as provided by Mr. R.Ramchandar is annexed to this Report vide "ANNEXURE V".
REMUNERATION OF DIRECTORS & KMP:
Disclosure pursuant to Rule 5 (1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed vide "ANNEXUREVII".
DETAILS OF DIRECTORS APPOINTMENT AND RESIGNATION:
(i) Mr. Rajan Premchander Managing Director (DIN : 00390795)whose term of office expired on 31.08.2016. He was reappointed as Managing Director of theCompany for tenure of 5 years term with effect from 01.09.2016.
(ii) Mr. Rajan Jaichander Whole Time Director (DIN : 00390836)whose term of office expired on 30.11.2016. He was reappointed as Whole Time Director ofthe Company for tenure of 5 years term with effect from 01.12.2016.
DIRECTORS RETIRE BY ROTATION:
Mr. M. Moorthi retires by rotation and being eligible offershimself for re- election. ANNUAL EVALUATION BY THE BOARD
The Board has made a formal evaluation of its own performance andthat of its committees and individual directors as required under Section 134(3) (p) ofthe Companies Act 2013.
DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THEREGULATORS OR COURTS OR TRIBUNAL:
During the year 2016-17 no significant and material Orders werepassed by the Regulators or Courts or Tribunals impacting the going concern status andcompany's operations in future
STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLWITH REFERENCE TO THE FINANCIAL STATEMENTS:
The Company has a well-established internal financial control andrisk management framework with appropriate policies and procedures to ensure the higheststandards of integrity and transparency in its operations and a strong corporategovernance structure while maintaining excellence in services to all its stakeholders.Appropriate controls are in place to ensure: (a) the orderly and efficient conduct ofbusiness including adherence to policies (b) safeguarding of assets (c) prevention anddetection of frauds / errors (d) accuracy and completeness of the accounting records and(e) timely preparation of reliable financial information.
The Company has neither accepted nor renewed any deposits duringthe year under review.
RECEIPT OF ANY COMMISSION BY MD/WTD FROM A COMPANY OR FOR RECEIPTOF COMMISSION/ REMUNERATION FROM ITS HOLDING OR SUBSIDIARY.
Not applicable as there is no holding subsidiary for thisCompany and the MD/WTD has not received any commission from other company.
REAPPOINTMENT OF INDEPENDENT DIRECTOR:
As there was no vacation of office of Independent Directors thecompany did not reappoint any Independent Directors.
DECLARATION BY INDEPENDENT DIRECTOR:
The Company has received necessary declaration from eachIndependent Director of the Company under Section 149 (7) of the Companies Act 2013 thatthe Independent Directors of the Company meet with the criteria of their Independence laiddown in Section 149 (6).
BOARD & AUDIT COMMITTEE:
The details regarding number of board meetings held during thefinancial year and composition ofAudit Committee is furnished in the Corporate GovernanceReport. NOMINATION AND REMUNERATION COMMITTEE POLICY:
The details regarding Nomination and Remuneration CommitteeMeeting held during the financial year is annexed to the Corporate Governance Report.
DISCLOSURE ON ESTABLISHMENT OF A VIGIL MECHANISM:
During the year the Company adopted a Whistle Blower Policy andestablished the necessary vigil mechanism for Directors and Employees to report concernsabout unethical behavior. The mechanism provides for adequate safeguards againstvictimization. Further no person has been denied access to the Audit Committee.
The Whistle Blower Policy is available under the following website: http://www.amarjothi.net AUDITORS:
Mr. V.Narayanaswami M.A. F.C.A. Chartered Accountant Coimbatore(Member ship. No: 023661) is the statutory auditor of our company. He retires atthe conclusion of this Annual General Meeting . According to Section 139 of Companies Act2013 and Rule 6 of the Companies (Audit and Auditors)Rules 2014 Mr. P.S.Sitaram B.Sc.F.C.A. Chartered Accountant Coimbatore (Membership No.023033) is appointed for theterm of 1 (one) year from 29th Annual General Meeting to until the conclusionof 30th Annual General Meeting of the Company. A certificate from the Auditorsthat they satisfy the Eligibility conditions prescribed under the Companies Act 2013 andthe Rules made there under (including satisfaction of criteria under section 141 of theCompanies Act 2013) has been received from them. Necessary Resolutions have been passedby the Board Of Directors of the Company and has also been placed in the Audit Committeeand the same has been approved. The Necessary resolution is being brought before you foryour approval. Your Directors recommend the same.
Mr.M.S Sivakumar Chartered Accountant is appointed as internalauditor of the Company.
He has played an important role in strengthening the Systems andinternal Controls within the Company.
DISCLOSURE OF COST AUDITOR AND COST AUDIT REPORT
As per Section 148 of the Companies Act 2013 read with Rulesframed there under M/s. Nagarajan& Co Practicing Cost Accountants (Firm'sMembership No; 000088) were appointed as Cost Auditors for the financial year 2016-2017 toconduct cost audit of the accounts maintained by the Company in respect of the variousproducts prescribed under the applicable Cost Audit Rules. The remuneration of CostAuditors has been approved by the Board of Directors on the recommendation of AuditCommittee. The requisite resolution for ratification of remuneration of cost Auditors bymembers of the Company has been set out in the Notice of ensuing annual general meeting.They have also been appointed as Cost Auditors for financial year 2017-18 by the Board ofDirectors upon recommendation of Audit Committee to conduct cost audit of the accountsmaintained by the Company in respect of the various products prescribed under theapplicable Cost Audit Rules.
The Cost Audit Report for the financial year 2016-17 issued byM/s. Nagarajan& Co Cost Auditors in respect of the various products prescribed underCost Audit Rules will be filed within the due date prescribed by the Act.
A detailed report on corporate governance together with acertificate from the Statutory Auditors in compliance with Reg 15(2) of the SEBI (LODR)Regulations 2015 is attached as part of this report vide "ANNEXURE II".
CORPORATE SOCIAL RESPONSIBILITY
Based on last three years average Net Profit the Company isrequired to spend a sum of Rs.3562878 in the year 2016-17. The Company is working outfor schemes that could result in enduring benefits to the community at large. The Companyshall find out ways and means to spend the same in the coming months and shall submit therelevant report in the ensuing year. The Company has paid to The Prime Minister's NationalRelief Fund.
List of CSR Activities and Composition of CSR Committee isannexed herewith as "ANNEXURE IV"
CORPORATE SOCIAL RESPONSIBILITY POLICY PREAMBLE
At Amarjothi CSR policy is to reach out and contribute to thesocial and economic development of the underserved in which we operate.
We believe in the trusteeship concept and provide skilldevelopment advancement of education medical relief research and development relief ofthe poor advancement of any other object of public.
In doing so we build a better sustainable way of life for theweaker sections of society and raise country's human development index.
"We have provided for the required amount. However we couldnot start spending on any specific project. The amount will be spent on the projects asper CSR Committee's suggestions in the ensuing year."
CORPORATE SOCIAL RESPONSIBILITY PURPOSE STATEMENT
The Company shall seek to impact the lives of the disadvantagedby supporting and engaging in activities that aim to improve their wellbeing. We arededicated to the cause of empowering people educating them and in improving their qualityof life. While we will undertake programmes based on the identified needs of thecommunity education and healthcare shall remain our priority. Across the differentprogramme areas identified by the company it would be our endeavour to reach thedisadvantaged and the marginalised sections of the society to make a meaningful impact ontheir lives. We are committed to identifying and supporting programmes aimed at:
Empowerment of the disadvantaged sections of the societythrough education access to and awareness about financial services and the like;
Provision of access to basic necessities like healthcaredrinking water & sanitation and the like to underprivileged;
Work towards eradicating hunger and poverty throughlivelihood generation and skill development; Supporting environmental and ecologicalbalance through afforestation soil conservation rain water harvesting conservation offlora & fauna and similar programme;
Promotion of rural sports nationally recognized sportsparalympic sports and Olympic sports through training of sportspersons;
Undertake rural development projects;
Any other programme that falls under CSR purpose listed inSchedule VII of the Companies Act 2013 amended from time to time which are aimed at theempowerment of disadvantaged sections of the society.
This policy will apply to all projects/programmes undertaken aspart the Company's Corporate Social Responsibility and will be developed reviewed andupdated periodically with reference to relevant changes in corporate governanceinternational standards and sustainable and innovative practices. The policy will maintaincompliance and alignment with the activities listed in Schedule VII and Section 135 of theCompanies Act 2013 and the rules framed there under.
The approval of the CSR policy and oversight is theresponsibility of the Company's Board of Directors. The responsibility of the CSRcommittee is to formulate the policy and to administer the policy through implementingpartner(s) or via self-implementation. The CSR Committee shall provide guidelines forprojects/partner selection to the respective HR or CSR teams wherever applicable. The CSRcommittee is to ensure that projects/programmes are compliant with regulations and aremonitored and reported effectively. As the Company's CSR activities evolve the policy maybe revised by the CSR committee and approved by the Board of Directors.
The CSR Committee shall recommend to the Board the amount ofexpenditure to be incurred on the CSR activities to be undertaken by the company asapproved by the Board. In case of any surplus arising out of CSR projects the same shallnot form part of business profits of the Company.
The Company shall undertake CSR project/programmes identified bythe CSR Committee and approved by the Board of Directors in line with the CSR Policy.
The Company shall implement its CSR programmes/projects:
a) Through an implementation partner that can be a publiccharitable trust or a society registered under applicable Acts or a Company registeredunder Section 8 of the Companies Act 2013; or
b) On its own through the relevant HR or CSR department orthrough its own foundation (if applicable) specifically created for implementing its CSRinitiatives.
The Company may enter into partnerships or alliances with NGOsTrusts or other Corporate Foundations etc. to effectively implement its CSRprogrammes/projects.
The Company can also implement programme(s) in collaboration withother company(ies) if permissible and feasible in such a manner that the CSR Committee isin a position to report separately on such projects / programs.
The Company shall formulate criteria and procedure for selectionscreening and due diligence of its implementing partners.
MONITORING AND REPORTING
The CSR Committee will oversee the implementation and monitoringof all CSR projects/ programmes and periodic reports shall be provided for review to theBoard. The Company will institute a well-defined transparent monitoring and reviewmechanism to ensure that each CSR project/programme has:
1. Clear objectives developed out of the societal needs that maybe determined through need assessment studies and research (secondary or primary);
2. Clear targets time lines and measurable indicators whereverpossible;
A progress monitoring and reporting framework that is alignedwith the requirements of Section 135 of the Companies Act 2013 and the CSR Rules.
In term of the provision of Section 197(12) of Act read withrules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerialpersonnel) Rules 2014 a statement showing the names and other particulars of theemployees drawing remuneration in excess of the limits set out in the said rules areannexed to this report as "ANNEXURE VIM".
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in linewith the requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013. All employees (permanent contractual temporarytrainees) are covered under this policy. No complaints were received during the year2016-17.
DIRECTORS' RESPONSIBILITY STATEMENT
Your directors confirm that
1. In the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;
2. The directors had selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the company at the end ofthe financial year and of the profit of the Company for that period;
3. The directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
4. The directors had prepared the annual accounts on a goingconcern basis;
5. The directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and
6. The directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.
Your directors gratefully acknowledge the support andco-operation extended to your Company by all the customers shareholders and bankers.
Your directors also place on record their appreciation of thetireless efforts of Team Amarjothi a dedicated and loyal band of people who havedisplayed unswerving commitment to their work in these challenging times and helped theCompany deliver good results.
The Company extends its thanks to the Central and StateGovernment authorities for their continued co-operation and assistance.
MAY LORD VENKATESWARA SHOWER HIS BLESSINGS FOR THE CONTINUEDPROSPERTIY OF THE COMPANY.
By order of the board
|Place : Tirupur ||(Sd/-) N.RAJAN ||(Sd/-) R.PREMCHANDER |
|Date : 28.07.2017 ||Chairman ||Managing Director |
| ||DIN:00390813 ||DIN: 00390795 |