Your Directors are pleased to present the 41st Annual Report of the Companytogether with its Audited Accounts for the year ended 31st March 2017.
|Financial review ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
| ||Current year 2016-17 ||Previous year 2015-16 |
|Gross Income ||125449 ||127099 |
|Net Income ||124433 ||126465 |
|Profit before interest depreciation & tax ||14359 ||17136 |
|Profit before depreciation & tax ||8056 ||10137 |
|Less: Depreciation ||5765 ||5754 |
|Profit before tax ||2291 ||4383 |
|Tax Expenses ||633 ||1663 |
|Profit after Tax ||1658 ||2720 |
|Dividend on Equity Shares (for 2016-17 proposed) ||171 ||339 |
|Tax on Dividend ||35 ||69 |
|Earnings per share (') : Basic ||9.69 ||16.12 |
|Diluted ||9.69 ||16.12 |
Operations & state of affairs
The production of yarn during 2016-17 has been 302 lakhs kgs. as against 321 lakhs kgs.during 2015-16 while the production of fabric was 342 lakhs mtrs. during 2016-17 asagainst 358 lakhs mtrs. during 2015-16. The garment production has increased by 11 % from32.41 lakhs Pieces to 36.15 lakhs Pieces over the period.
Your Company's net income from operations during 2016-17 has been '1244 Crores asagainst ' 1265 Crores during 2015-16.
The profit before interest depreciation and tax (PBIDT) during 2016-17 is '143 Croresas against '171 Crores during 2015-16. The profit before depreciation and tax (PBDT) hasbeen ' 80 Crores as against ' 101 Crores during 2015-16. The post tax net profit of theCompany during 2016-17 was at '17 Crores.
The fall in production as well as profit in the year as compared under report toprevious year was mainly due to labour absenteeism on account of demonetization and otherfactors.
The basic and diluted EPS for the year 2016-17 is ' 9.69 as against ' 16.12 for theyear 2015-16.
Your Company has charged depreciation on fixed assets as per the provisions of ScheduleII of the Companies Act 2013.
There has been no change in the nature of Company's business during the year as itremains in the business of manufacturing and marketing of the textile products.
During the year the export turnover of the Company has been ' 568 Crores as against '580 Crores during 2015-16. The 46% share of export turnover in the net income for the year2016-17 has been maintained at same level as previous year.
During the year under report the Company's marketing as well as design and developmentteams continued to participate in the international trade fairs and meetings with thecustomers abroad for regular feedback of market trends demand etc. in the internationalmarket.
Your Directors are pleased to recommend dividend of ' 1/- per equity share @ 10%(previous year ' 2/- per share) for the financial year 2016-17. The total dividend payouton equity shares for the year will absorb ' 1.71 Crores (previous year - ' 3.39 Crores)with outer of ' 0.35 Crore by way of tax on dividend (previous year - ' 0.69 Crore).
The dividend when paid will be charged to Profit & Loss account of financial year2017-18 in compliance of amended provisions of AS 14.
The Company has transferred unclaimed dividend amount up to the year 2008-09 andinterim dividend for 2009-10 to the Investor Education and Protection Fund (IEPF).
Increase in paid-up share capital
The Board of Directors in its meeting held on 10th February 2017 allotted186696 equity shares of ' 10/- each to the shareholders of Banswara Fabrics Limited interms of Scheme of Amalgamation and arrangement between Banswara Global Limited andBanswara Fabrics Limited with the Company as approved by Hon'ble High Court of Rajasthanat Jodhpur.
The paid up equity share capital of the Company has increased from ' 1692.93 lakhs asat 31st March 2016 to ' 1711.60 lakhs as at 31st March 2017 dueto allotment of these 186696 equity shares.
Expansion diversification and modernization
During the year the Company invested ' 67 Crores for acquisition of fixed assets. Asat 31st March 2017 the capital-work-in progress stood at ' 4.00 Crores andadvances to the capital goods' suppliers aggregated ' 3.44 Crores as against ' 7.86Crores and ' 3.04 Crores respectively at the beginning of the year.
The total production capacity of the Company as at 31st March 2017 for yarnproduction is 157672 ring spindles including 21120 spindles for worsted yarn spinning and592 Air Jet spindles 436 shuttle less looms 34 Air Jet jacquard looms 9 stenters withprocessing capacity of 5 million mtrs. per month and 3.81 lakhs pieces of garments permonth.
Subsidiaries Joint Ventures and Associates
In accordance with the General Circular issued by the Ministry of Corporate AffairsGovernment of India the Balance Sheet Statement of Profit and Loss and other documentsof Joint Venture Company are not being attached with the Annual Report of the Company.However Pursuant to Section 129 of the Companies Act 2013 the financial information ofTreves Banswara Private Limited the Joint Venture Company is disclosed in the AnnualReport in compliance with the said circular. During the financial year 2016-17 BanswaraGlobal Limited Subsidiary Company and Banswara Fabric Limited Associate Company mergedwith
Banswara Syntex Limited as per Scheme of Amalgamation approved by Hon'ble High Court ofRajasthan at Jodhpur. The Company will make available the Annual Financial Statements ofthe Joint Venture Company and the related detailed information to any member of theCompany who requests for the same. The Annual Financial Statements of the Joint VentureCompany will also be kept open for inspection at the Registered Office of the Company. TheConsolidated Financial Statements for financial year ended 31st March 2017presented by the Company include the Financial Statements of its Associate Company andSubsidiary Company which have since been merged with the Company.
Pursuant to the first proviso to Section 129(3) of the Companies Act 2013 and Rules 5and 8(1) of the Companies (Accounts) Rules 2014 the salient features of the financialstatements performance and financial position of the Joint Venture Company in Form AOC-1is furnished as Annexure - I to this Report.
The Company has framed a policy for determining Material Subsidiaries which has beenuploaded on the Company's website- www.banswarasyntex.com
Banswara Global Limited (BGL) a wholly owned Subsidiary Company of Banswara SyntexLimited has been amalgamated with Company by the order of Hon'ble High Court of Rajasthanwith effect from 31st August 2016.
Your Company holds 50% of the paid up share capital of Joint Venture Company i.e.Treves Banswara Private Limited. The balance 50% of share capital is held by TrevesTextiles & Seats Components France.
During the financial year 2016-17 Treves Banswara Private Limited produced 3.36 Lakhsmtrs. of Laminated Fabric and 47065 pcs. of Embossed Panels and Flex. Total turnover ofthis JV Company during financial year 2016-17 was ' 1145 Lakhs (previous year ' 1118lakhs) with net profit of ' 28 lakhs as against a loss of '2.12 Lakhs in the previousyear.
During the financial year 2016-17 the Associate Company i.e. Banswara Fabrics Limitedpursuant to Scheme of amalgamation and in terms of orders passed by Hon'ble High Court ofRajasthan at Jodhpur has been amalgamated with Banswara Syntex Limited.
Consolidated Financial Statements
In accordance with AS-21 on Consolidated Financial Statements read with AS-23 onAccounting for Investments in Associates and AS-27 on Financial Reporting of Interest inJoint Ventures and also as per Section 129 of the Companies Act 2013 the auditedConsolidated Financial Statements are furnished in the Annual Report.
Thermal Power Plant
Both units of Captive Thermal Power Plant (33 MW) are working satisfactorily. YourCompany is meeting its requirements of coal from domestic sources as well from imports.
During the year 2016-17 the Company got disbursements of long term loan of ' 12.05Crores from IDBI Bank and ' 33.97 Crores from Union Bank of India for acquisition of fixedassets and financing working capital requirements. The repayments of term loans madeduring the year aggregated ' 63.94 Crores.
The Company's bankers have been providing need-based working capital after the reviewof its requirements from time to time.
Contribution to Exchequer
During the year your Company contributed ' 30.90 Crore to the Government Exchequer byway of Excise Duty Service Tax Value Added Tax (VAT) Income Tax Dividend DistributionTax and other payments.
Corporate Governance/Management Discussion & Analysis Report
As per the requirements of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Company has adopted a Codeof Conduct which is applicable to the members of the Board Key Managerial Personnel (KMP)and Senior Management Staff. The Company fully complies with the Corporate Governancepractices as enunciated in the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015. Corporate Governance Report and ManagementDiscussion & Analysis Report are form part of this report annexed as Annexure-II.
As per the provisions of the Companies Act 2013 the Company accepts fixed depositsfrom members of the Company as approved by the shareholders in their meeting held on 27thAugust 2016. During the year 2016-17 the Company accepted deposits of ' 469 lakhs and hadsuch deposits aggregating ' 1607 lakhs as on 31st March 2017. There has beenno default in repayment of deposits or interest thereon and no deposit was unclaimed ormatured but not paid as on 31st March 2017. The Company has duly complied withthe provisions of the Companies (Acceptance of Deposits) Rules 2014.
Corporate Social Responsibility Initiatives
As a part of its initiatives under ''Corporate Social Responsibility" (CSR) theCompany has framed Corporate Social Responsibility Policy (CSR Policy) in terms of whichthe Company has undertaken projects in the areas of environment women and childrenempowerment health care etc. These projects are largely in accordance with Schedule VIIof the Companies Act 2013.
As required under Section 134 (3) (o) and Rule 9 of the Companies (Corporate SocialResponsibility) Rules 2014 the Annual Report on CSR activities forming part of theDirectors' Report is annexed as Annexure III.
The risk assessment and minimization procedures are in place and the Board is keptregularly informed about the business risks and the steps taken to mitigate the same.
Internal Control System and its adequacy
The Company has Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence of the auditthe Chief Internal Auditor reports to the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with the operating systemsaccounting procedures and policies at all locations of the Company. Based on the reportsof the internal auditors the process owners undertake corrective actions in theirrespective areas and thereby strengthen the controls. The report on major observation ofinternal auditors and action taken thereon is regularly reported to Audit Committee on aquarterly basis.
Vigil Mechanism/Whistle Blower Policy
The Company has adopted a Vigil Mechanism/Whistle Blower Policy to provide a vigilmechanism to its Directors and employees to report their concerns about unethicalbehavior actual or suspected trend to Company's Code of Conduct and during the year nosuch Whistle Blower event was reported. The details of the policy are explained in theCorporate Governance Report and also posted on website of the Company atwww.banswarasyntex.com
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has zero tolerance policy for sexual harassment at workplace and hasadopted a Policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules framed thereunder.
The Company has not received any complaint on sexual harassment of women at work placeduring the financial year 2016-17.
Directors and Key Managerial Personnel
During the financial year 2016-17 Shri A. N. Jariwala (DIN: 00024008) Directorresigned from the Board of Directors of the Company. His resignation was accepted by theBoard in its Meeting held on 8th August 2016. The Board wishes to place onrecord its deep appreciation for the contribution made by Shri A. N. Jariwala during histenure as a member of the Board of Directors of the Company.
Shri J. M. Mehta (DIN: 00847311) was appointed as an additional Director by the Boardof Directors of the Company in their Meeting held on 27th October 2016 tohold office till the conclusion of next Annual General Meeting. The Board recommended hisappointment as an Independent Director.
Shri R. L. Toshniwal (DIN: 00106933) Chairman of the Company is liable to retire byrotation pursuant to provisions of the Companies Act 2013 and Articles of Association ofthe Company. He would retire by rotation at the ensuing AGM and being eligible offershimself for re-appointment. The Board has decided to re-appoint him and accordingly anagenda item has been proposed in the notice to the shareholders for their approval.
A brief resume and other information required under Regulation 36 of the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 is included in the Corporate Governance Report at Annexure II of this AnnualReport/ Notice of Annual General Meeting. The Board recommends his re-appointment.
Tenure of office of all four Whole Time Directors is expiring on 31stDecember 2017. The Nomination and Remuneration Committee has recommended theirre-appointment for a further period of 3 years up to 31st December 2020. TheBoard has reappointed all the four Whole Time Directors subject to approval ofshareholders in its ensuing Annual General Meeting.
During the year there is change in post of Company Secretary Shri HP Kharwal wasappointed as Company Secretary on 10th February 2017 and Shri JK Jain resignedfrom the post of Company Secretary due to his pre occupation and before this he was ChiefFinancial Officer and Company Secretary Shri J.K. Jain will continue to work as ChiefFinancial Officer of the Company.
The Company has formulated a policy for performance evaluation of IndependentDirectors Board Committees and individual Directors including the Chairman and executiveDirectors.
Declaration of Independent Directors
All Independent Directors have furnished declarations to the effect that they meet thecriteria of independence as laid down in Section 149 (6) of the Companies Act 2013 andRegulation 16 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.
Pursuant to the provisions of Section 134 of Companies Act 2013 and Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the Board has adopted a formal mechanism for evaluating its own performance as wellas that of its Committees and Individual Directors including the Chairman. The exercisewas carried out through a structured evaluation process starting with a questionnaire sentto all Directors followed by discussions in specific manner covering various aspects suchas composition of the Board and its Committees effectiveness of the process and actualfunctioning etc.
The performance of individual Directors was reviewed on the basis of criteria such asthe contribution of the individual Director in the Board Meeting and Committee Meetings.Performance of non Independent Directors and the Board as a whole is evaluated in aspecifically convened meeting of Independent Directors followed by deliberation inNomination and Remuneration Committee taking account the view of the Executive Directors.
Accordingly separate exercises were carried out to evaluate the performance ofindividual Directors including the Chairman and Whole Time Directors on specificparameters such as attendance contribution independent judgment safeguarding theinterest of minority shareholders etc in the specifically convened meetings ofIndependent Directors and Nomination and Remuneration Committee before consideration bythe Board.
The Directors expressed their satisfaction on its implementation of evaluation process.
Nomination and Remuneration Policy
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for appointment of Directors Key Management personnel and SeniorManagement Staff as also on their remuneration. The Nomination and Remuneration Policy isstated in the Corporate Governance Report and also posted on the website of the Company atwww.banswarasyntex.com.
Related party transactions
All related party transactions executed during the financial year 2016-17 were carriedout on an Arm's Length basis and carried out in the ordinary course of business.
Details of all related party transactions are reported to the Audit Committee forscrutiny / review and to refer for approval of the Board. The particulars of the contractsor arrangements entered into with related parties referred to in sub section (1) ofSection 188 of the Companies Act 2013 are indicated in Form AOC-2 which forms part ofthis report as Annexure IV.
Four meetings of the Board of Directors were held during the financial year i.e. on 23rdMay 2016 8th August 2016 27th October 2016 and 10thFebruary 2017. Frequency and quorum etc. at these meetings were in conformity with theprovisions of the Companies Act 2013 the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 and Secretarial Standard - 1.
Directors' responsibility statement
As required under Section 134 (5) of the Companies Act 2013 with respect to Directors'Responsibility Statement it is hereby confirmed that:
(a) In the preparation of the annual accounts for the year ended 31st March2017 the applicable Accounting Standards have been followed and there are no materialdepartures from the same. The Notes to the Accounts are self-explanatory.
(b) The Directors have selected such Accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2017 and ofthe profit of the Company for the year ended on that date.
(c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities.
(d) The Directors have prepared the annual accounts of the Company for the year ended31st March 2017 on a "going concern" basis.
(e) The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and have been operatingeffectively.
(f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and have been operatingeffectively.
In accordance with the requirement of Section 177 of the Companies Act 2013 andprovisions of Regulation 18 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has constituted theAudit Committee which comprises 4 (Four) Members viz. Shri P. Kumar (Chairman) Shri KamalKishore Kacholia Dr. S.B. Agarwal Independent Directors and Shri Ravindra KumarToshniwal Managing Director.
The composition role functions and powers of the Audit Committee are in accordancewith the applicable laws and provisions of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 and are furnished inCorporate Governance Report annexed hereto as Annexure II.
M/s Kalani & Co. Chartered Accountants the statutory auditors of the Company holdoffice till the conclusion of the 41st Annual General Meeting of the Company.Under Section 139 of the Companies Act 2013 and the rules made there-under it ismandatory to rotate the auditors on completion of the maximum term permitted under thesaid section. Based on the recommendation of the Audit Committee the Board has proposedthe appointment of M/s. K.G. Somani & Co. Chartered Accountants (RegistrationNo.006591N) as the statutory auditors of the Company in place of M/s Kalani & Co.Chartered Accountants (Registration No.000722C) for a term of five consecutive yearsfrom the conclusion of the 41st Annual General Meeting of the Company scheduledto be held on 14th September 2017 till the conclusion of the 46thAnnual General Meeting to be held in the year 2022 for approval of shareholders of theCompany The first year of Audit will be of the financial statements for the year ending31st March 2018 which will include the audit of the quarterly financialresults for the year.
As required under the provisions of Section 139 of the Companies Act 2013 the Companyhas obtained a written certificate from M/s K.G. Somani & Co. the Auditors to theeffect that they conform to the limits specified in the said Section and that they are notdisqualified for appointment within the meaning of Section 141 of the said Act.
The Board of Directors recommends the appointment of M/s K.G. Somani & CoChartered Accountants as Statutory Auditors of the Company for the term of 5 yearssubject to a yearly ratification of such appointment by shareholders at the Annual GeneralMeetings."
As per the requirement of Section 44AB of the Income Tax Act 1961 M/s Kalani &Company Chartered Accountants (Registration No.000722C) Jaipur had been appointed asTax Auditors of the Company for the financial year 2016-17. M/s Kalani & CompanyChartered Accountants (Registration No.000722C) has been re-appointed for the financialyear 2017-18 and fixed their remuneration as per the recommendation of the AuditCommittee.
The Company has re-appointed K.G. Goyal & Company Cost Accountants (RegistrationNo. 000017) Jaipur as Cost Auditors of the Company for the financial year 2017-18. Theyhave furnished a Certificate to the effect that their appointment if made would be inaccordance with the provisions of Section 148 of the Companies Act 2013 read withCompanies (Audit and Auditors) Rules 2014. As required under the Companies Act 2013 aresolution seeking member's approval for the remuneration payable to the Cost Auditorforms part of the Notice convening the Annual General Meeting for their ratification.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of the Managerial Personnel) Rules 2014 the Company hadappointed V.M. & Associates (FRN: P1984RJ039200) Jaipur a firm of Company Secretariesin practice to undertake the secretarial audit of the Company for the financial yearended 31st March 2017. The report of the Secretarial Audit is annexed as AnnexureV. As regards the auditors' observations these are self explanatory and do not callfor any comments except expense on CSR activities below the prescribed limit.
On the recommendation of the Audit Committee the Board of Directors has re-appointedV.M. & Associates as Secretarial Auditors to carry out secretarial audit for thefinancial year 2017-18 also.
As regards the Statutory Auditors' observations the relevant Notes on SignificantAccounting Policies Notes on Accounts and other disclosures are self-explanatory andtherefore do not call for any further comments except in the matter of non payment ofCustom Duty of ' 282.69 Lakhs for which the matter is under appeal before CESTATAhmedabad and at High Court of Rajasthan at Jodhpur and non-payment of Income Tax of '589.36 Lakhs for which the matter is under appeal with CIT (Appeals) Udaipur. Theseliabilities will be met if necessary on final decision of the respective AppellateAuthorities.
Particulars of loans given investments made guarantees given and security provided
Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.
Energy conservation technology absorption & foreign exchange earnings and outgo
Information pursuant to the provisions of Section 134 (3) of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014 in relation to conservation ofenergy consumption technology absorption foreign exchange earnings and outgo is annexedand marked as Annexure VI which forms part of this report.
All the properties of the Company including buildings plant and machinery and stockshave been adequately insured.
Dematerialization of shares
In pursuance of SEBI /Stock Exchange directions your Company has offered demat optionto its esteemed shareholders so as to enable them to trade the shares in the demat form.In response 97.55% shares have been converted into demat form up to 31stMarch 2017 The stock code number in NSDL and CDSL for equity shares of the Company isISIN - INE 629 D01012.
Particulars of employees
During the year under report the relations between the Company's management andstaff/workers continued to remain cordial. The Directors place on record their deepappreciation of the devoted services of the workers staff and executives.
The information pursuant to Section 197 of the Companies Act 2013 read with Rule 5(1)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014pertaining to the employees is annexed as Annexure - VII.
Further pursuant to Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the relevant statement is annexed as Annexure -VIII.
Significant and material orders passed by the Regulators or Courts
There have been no significant or material orders passed by the Regulators orCourt/Tribunal during the year under report that would impact the going concern status ofthe Company and its future operations.
Extract of annual return
An extract of Annual Return as on the financial year ended 31st March 2017as required under Section 92(3) of the Companies Act 2013 in Form MGT 9 is annexed as AnnexureIX
Your Directors wish to express their sincere appreciation for the guidanceco-operation and assistance extended to the Company by the financial institutions banksvarious Central & State Government Departments Customers and Suppliers during theyear under report. The Directors particularly wish to acknowledge and place on recordthe continuous support and guidance of all the shareholders and more importantly for theconfidence reposed in the Company's management.
| ||For and on behalf of the Board |
| ||R. L. TOSHNIWAL |
|Place: Mumbai ||CHAIRMAN |
|Date: 25th May 2017 ||DIN: 00106933 |