Banswara Syntex Ltd.
|BSE: 503722||Sector: Industrials|
|NSE: BANSWRAS||ISIN Code: INE629D01012|
|BSE LIVE 15:40 | 19 Jan||141.55||
|NSE LIVE 15:31 | 19 Jan||141.95||
|Mkt Cap.(Rs cr)||239.64|
|Mkt Cap.(Rs cr)||239.64|
Banswara Syntex Ltd. (BANSWRAS) - Director Report
Company director report
Your Directors are pleased to present the 40th Annual Report of the Companytogether with its Audited Accounts for the year ended 31st March 2016.
Financial review (' in Lacs)
Operations & state of affairs
The production quantity during 2015-16 when compared with previous year is almost flatfor yarn increased by 2.50% for fabrics and has marginally declined in case of garments.
Your Company's net income from operations during 2015-16 has been '1265 Crores asagainst '1226 Crores during 2014-15.
The profit before interest depreciation and tax (PBIDT) during 2015-16 is '171 Croresas against ' 155 Crores during 2014-15 - up by 10%. Similarly the profit beforedepreciation and tax (PBDT) has been '101 Crores as against ' 74 Crores during 2014-15.The post tax net profit of the Company during 2015-16 at ' 27.20 crores increased by morethan 239% over the previous year.
The basic and diluted EPS for the year 2015-16 is same at ' 16.12 as against ' 5.06 and' 4.90 respectively for 2014-15.
Your Company has charged depreciation on fixed assets as per the provisions of ScheduleII of the Companies Act 2013.
The Company has obtained approval of Shareholders Secured Creditors and UnsecuredCreditors for amalgamation of Banswara Global Limited (wholly Owned subsidiary of BSL) andBanswara Fabrics Limited (an associate company of BSL) with your Company in Court convenedMeetings held on 28th March 2016. The Company has also filed Company Petitionsbefore Hon'ble Rajasthan High Court Jodhpur for approval of scheme of amalgamation.
There is no change in the nature of Company's business during the year as it remains inthe business of manufacturing and marketing of the textile products.
During the year the export turnover of the Company has been ' 580 Crores as against '526 Crores during 2014-15. The share of export turnover in the net income has increasedfrom 43% in 2014-15 to 46% during 2015-16.
During the year under report the Company's marketing as well as design and developmentteams continued to participate in the international trade fairs meetings with thecustomers abroad for regular feedback of market trends demand etc. in the internationalmarket.
Your Directors are pleased to recommend dividend of ' 2 per equity share (previous year' 1/- per share). The total dividend payout on Equity shares for the year will absorb '3.39 Crores (previous year - ' 1.64 Crores) and ' 0.69 Crore by way of tax on dividend(previous year - ' 0.33 Crore).
The Company has transferred unclaimed dividend amount to the investor Education andProtection Fund for dividend declared up to the year 2007-08.
Increase in paid-up share capital
The Board had in its meeting held on 13th November 2013 issued 1600000warrants to promoters and promoters' group convertible into an equal number of equityshares at the price of ' 41.50 per warrant including premium of ' 31.50 per share.
Out of the warrants issued to the promoters and promoters' group your directors hadconverted 1090000 warrants into equal number of Equity Shares up to 31stMarch 2015. On 8th May 2015 balance 510000 warrants were also convertedinto equal number of Equity Shares.
The Company has forfeited 27015 partly paid up Equity shares on 27th May2015 due to non payment of call money due thereon.
The paid up equity share capital of the Company has increased from ' 1643.14 lacs as on31st March 2015 to '1692.93 lacs as on 31st March 2016 due toconversion of above warrants into equity shares.
Expansion diversification and modernization
During the year the Company invested ' 30.29 Crores for acquisition of fixed assets asat 31st March 2016 the capital-work- in progress stood at ' 7.86 Crores andadvances to the capital goods' suppliers aggregated ' 3.05 Crores as against ' 10.04Crores and ' 1.85 Crores respectively at the beginning of the year.
The total production capacity of the Company as at 31st March 2016 for yarnproduction is 151672 ring spindles including 21120 spindles for worsted yarn spinning and592 Air Jet spindles 368 shuttle less looms 34 Air Jet jacquard looms 8 stenters withprocessing capacity of 5 million mtrs. per month and 3.82 lac 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 the subsidiary Joint Venture and Associate Company are not being attached with theBalance Sheet of the Company. However Pursuant to Section 129 of the Companies Act 2013the financial information of the subsidiary Company is disclosed in the Annual Report incompliance with the said circular. The Company will make available the Annual Accounts ofthe subsidiary company and the related detailed information to any member of the Companywho requests for the same. The annual accounts of the subsidiary company will also be keptopen for inspection at the Registered Office of the Company and that of the respectivesubsidiary company. The Consolidated Financial Statements presented by the Company includethe financial results of its Subsidiary J.V. and Associate Companies.
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 subsidiary joint venture andAssociate companies in Form AOC-1 is 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.
Banswara Global Ltd. (BGL) is a wholly owned subsidiary company of Banswara Syntex Ltd.
During the year Banswara Global Ltd. produced 47.15 lac mtrs. of fabric (previous year43.32 lac mtrs.) on job work basis for your Company. Total turnover of BGL during 2015-16was ' 931 lacs and the net profit after tax was ' 2.45 lacs.
Your Company holds 50% of the paid up share capital in JV company i.e. Treves BanswaraPrivate Limited. The balance 50% of share capital is held by Treves Textiles & SeatsComponents France.
During the year 2015-16 Treves Banswara Private Limited produced 4.82 lac mtrs. ofLaminated Fabric and 0.35 lac pcs. of Embossed Panels and Flex. Total turnover of this JVcompany during 2015-16 was ' 1118 lacs (previous year '622 lacs).
The Company has an associate company namely Banswara Fabrics Ltd. (BFL). Your Companyholds 39.13% of the paid up share capital of BFL.
During the year this associate company produced 10.25 lac mtrs. of fabric. Totalturnover of BFL during the year has been '322 lacs and the net profit after tax has been '16.89 lacs.
Thermal Power Plant
The two units of Captive Thermal Power Plant (33 MW) are working satisfactorily. YourCompany is consuming coal from domestic sources as well from imports.
During the year 2015-16 the Company got disbursement of long term loan of ' 4.50Crores from IDBI Bank ' 0.80 Crore from Punjab National Bank and ' 5.32 Crores from UnionBank of India for acquisition of fixed assets. The repayments of term loans made duringthe year aggregated ' 63.50 Crores.
The Company's bankers have been providing need-based working capital after the reviewof requirements from time to time.
Consolidated Financial Statements
In accordance with the (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.
Contribution to Exchequer
During the year your Company contributed ' 26.62 Crores 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 Clause 49 of the Listing Agreements with the Stock Exchanges and SEBI (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. The Company fully complies with the Corporate Governance practicesas enunciated in the Listing Agreements and SEBI (LODR) Regulations 2015 CorporateGovernance Report and Management Discussion & Analysis Report; these are annexed andform part of this report as Annexure-II.
As per the provisions of the Companies Act 2013 the Company has invited fixeddeposits from members of the Company as approved by the shareholders in their meeting heldon 12th September 2015. The Company had such deposits aggregating ' 1175 lacsas on 31st March 2016. There has been no default in repayment of deposits orinterest thereon and no deposit is unclaimed or matured but not paid as on 31stMarch 2016. The Company has duly complied with the provisions of the Companies(Acceptance of Deposits) Rules 2014.
Corporate Social Responsibility Initiatives
As a part of its initiatives under "Corporate Social Responsibility" (CSR)the Company has formed Corporate Social Responsibility Policy (CSR Policy) in terms ofwhich the Company has undertaken projects in the areas of environment women and childrenempowerment health etc. These projects are largely in accordance with Schedule VII ofthe Companies Act 2013.
As required under Section 134 (3) (o) and Rule 9 of the Companies
(Corporate Social Responsibility) Rules 2014 the annual report on CSR activitiesforming part of the Directors Report is annexed as Annexure III.
The risk assessment and minimization procedures are in place and the Board is regularlyinformed about the business risks and the steps taken to mitigate the same.
Pursuant to requirement of Clause 49 of the Listing Agreements the Company hadconstituted Risk Management Committee which was dissolved by the Board of Directors attheir Meeting held on 11th February 2016 as the same is not legally mandatoryand the matter is fairly regularly discussed at the Board level.
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 and its Subsidiary andassociate companies. Based on the reports of the internal auditors the process ownersundertake corrective actions in their respective areas and thereby strengthen thecontrols. The report on major observation of internal auditors and action taken thereon isregularly reported to Audit committee on a quarterly 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 of company's code of conduct . The details of thepolicy is explained in the Corporate Governance Report and also posted on website of theCompany at www.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 there under.
The Company has not received any complaint on sexual harassment of women at work placeduring the financial year 2015-16.
Directors and Key Managerial Personnel
During the financial year 2015-16 Shri P. K. Bhandari (DIN: 00021923) Director hasresigned from the Board of Directors of the Company. His resignation was accepted by theBoard in its Meeting held on 14th August 2015. The Board wishes to place onrecord its deep appreciation for the contribution made by Shri P. K. Bhandari during histenure as a member of the Board of Directors of the Company.
Shri Arun Agarwal (DIN: 00194010) a fellow member of Institute of Chartered Accountantsof India was appointed as an additional Director by the Board of Directors of the Companyin their Meeting held on 4th November 2015 to hold office till the next AGM.However Shri Arun Agarwal has since resigned from Directorship of the Company due to hispre- occupation with others. The Board has accepted his resignation at its meeting held on23rd May 2016.
Shri Shaleen Toshniwal (Din: 00246432) Joint Managing Director of the Company isliable to retire by rotation pursuant to provisions of the Companies Act 2013 andArticles of Association of the Company. He would retire by rotation at the ensuing AGM andbeing eligible offers himself for re-appointment. The Board has decided to re-appoint himand accordingly an agenda item has been proposed in the notice to the shareholders fortheir approval.
A brief resume and other information required under Clause 49 of the Listing Agreementsis included in the Annual Report/ Notice of Annual General Meeting. The Board recommendshis re-appointment.
The Company has formulated a policy for performance evaluation of IndependentDirectors Board Committees and individual Directors which include criteria forperformance evaluation of the non-executive independent directors and executive directors.
Declaration of Independent Directors
All Independent Directors have furnished declarations to the effect that they meet thecriteria of independence as laid down under Section 149 (6) of the Companies Act 2013Clause 49 of the Listing Agreements and SEBI( Listing Obligations and DisclosureRequirement) Regulations 2015.
Pursuant to the provisions of Companies Act 2013 and Clause 49 of the ListingAgreement with the Stock Exchanges the Board has adopted a formal mechanism for evaluatingits performance as well as that of its Committees and Individual Directors. The exercisewas carried out through structured evaluation process through a questionnaire sent to allDirectors followed by discussions in specific manner covering various aspects of theBoard's functioning such as its composition of the Board and Committees effectiveness ofthe process etc.
Separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman and Whole Time Directors on specific parameters such as attendancecontribution independent judgement safeguarding the interest of minority shareholdersetc.
The evaluation of independent Directors was carried out by the Executive Directors. TheBoard of Directors expressed its satisfaction on the evaluation process.
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for appointment of Directors Key Management personnel and SeniorManagement and as also their remuneration. The Remuneration Policy is stated in theCorporate Governance Report and also posted on the website of the Company at
Related party transactions
All related party transactions executed during the financial year were carried out onan Arms' Length basis and were carried out in the ordinary course of business.
Details of all related party transactions are reported to the Audit Committee and theBoard for approval. The approval of the shareholders for related party transactions wasalso obtained in the Annual General Meeting of the Company held on 12.9.2015. Theparticulars of the contracts or arrangement enter into with related parties referred to insub section (1) of Section 188 are indicated in Form AOC 2 which forms part of thisreport as Annexure IV.
Four meetings of the Board of Directors were held during the year i.e. on 27thMay 2015 14th August 2015 4th November 2015 and 11thFebruary 2016. Frequency and quorum etc. at these meetings were in conformity with theprovisions of the Companies Act 2013.
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 March 31 2016 theapplicable Accounting Standards have been followed and there are no material departuresfrom 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 2016 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 ended March 31 2016 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 and Clause49 of the Listing Agreements with Stock Exchanges the Board has constituted the AuditCommittee which comprises 3 (three) Independent Directors viz. Shri P. Kumar (Chairman)Shri Kamal Kishore Kacholia and Dr. S.B. Agarwal besides Shri Ravindra Kumar ToshniwalManaging Director as members.
The composition role functions and powers of the Audit Committee are in accordancewith the applicable laws and the Listing Agreements with the Stock Exchanges and arefurnished in Corporate Governance Report annexed hereto as Annexure II.
Kalani & Company Chartered Accountants Jaipur were appointed as StatutoryAuditors of the Company for 3 years i.e. 2014-15 to 2016-17 by the shareholders in theirmeeting held on 22.09.2014 subject to ratification of the appointment by the members atevery General Meeting held thereafter. Accordingly they hold office as the Auditors ofthe Company until the conclusion of the ensuing Annual General Meeting and are eligiblefor re-appointment. They have furnished a Certificate to the effect that theirre-appointment if made would fulfill the requirements under the provisions of theSections 139 and 141 of the Companies Act 2013 read with Companies (Audit and Auditors)Rules 2014.
As per the requirement of Section 44AB of the Income Tax Act 1961 M/s Kalani &Company Chartered Accountants Jaipur have been appointed as Tax Auditors of the Companyfor the year 2015-16. It is proposed to re-appoint them for the year 2016-17 and to fixtheir remuneration as per the recommendation of the Audit Committee.
The Company has re-appointed K.G. Goyal & Company Cost Accountants Jaipur asCost Auditors of the Company for the financial year 2016-17. They have furnished aCertificate to the effect that their appointment if made would be in accordance with theprovisions of Section 148 of the Companies Act 2013 read with Companies (Audit andAuditors) Rules 2014.
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 a firm of Company Secretaries in practice to undertakethe secretarial audit of the Company for the financial year ended 31st March2016. The report of the Secretarial Audit is annexed herewith as Annexure V. Asregards auditors observations these are self explanatory and do not call for anycomments.
On the recommendation of the Audit Committee the Board of Directors has reappointedV.M. & Associates to carry out secretarial audit for the year 2016-17.
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 '267.24 lacs for which the matter is under appeal before CESTAT Ahmedabadand at Rajasthan High Court Jodhpur. In addition to this non payment of Income Tax of'4.96 lacs for which the matter is under appeal with CIT (Appeals) Udaipur.
These liabilities will be met if necessary on final decision of the respectiveAppellate Authorities.
Particulars of loan given investment made guarantee 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 technology absorption foreign exchange earnings and outgo is annexed and marked AnnexureVI which forms part of this report.
All the properties including buildings plant and machinery and stocks have beenadequately 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 98.18% shares have been converted into demat form up to 31stMarch 2016 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 the executives.
The information pursuant to Section 197 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 of the employees isannexed 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 are no significant or material orders passed by the Regulators or Court thatwould impact the going concern status of the Company and its future operations.
Extract of annual return
The details forming part of the extract of the Annual Return in Form MGT 9 is annexedas Annexure IX.
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 theconfidence reposed on the Company's management.