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Dhanlaxmi Fabrics Ltd.

BSE: 521151 Sector: Industrials
NSE: N.A. ISIN Code: INE953D01016
BSE LIVE 15:40 | 24 Nov 30.95 1.40
(4.74%)
OPEN

30.90

HIGH

31.00

LOW

30.85

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 30.90
PREVIOUS CLOSE 29.55
VOLUME 726
52-Week high 47.75
52-Week low 26.75
P/E 10.46
Mkt Cap.(Rs cr) 27
Buy Price 31.00
Buy Qty 75.00
Sell Price 0.00
Sell Qty 0.00
OPEN 30.90
CLOSE 29.55
VOLUME 726
52-Week high 47.75
52-Week low 26.75
P/E 10.46
Mkt Cap.(Rs cr) 27
Buy Price 31.00
Buy Qty 75.00
Sell Price 0.00
Sell Qty 0.00

Dhanlaxmi Fabrics Ltd. (DHANLAXMIFABRIC) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting their Twenty Fourth Annual Report on thebusiness operations and activities of the Company together with the Audited Accounts forthe Financial Year ended 31st March 2016.

Summarized Financial Results:

(Rs.in lacs)
Particulars Year ended 31.03.2016 Year ended 31.03.2015
Income from operations 8837.10 7837.27
Operating Profit 895.94 1051.77
Less : Interest 268.99 310.33
Less: Depreciation 484.94 488.47
Profit before tax 142.01 252.97
Less: Provision for tax 168.59 127.53
Add: /(Less) Deferred Tax Assets/(Liabilities) 88.94 63.05
Net Profit for the year 62.36 188.49

Operations:

For the financial year ended 31st March 2016 the Revenue from operation ofthe Company is of Rs.8837.10 Lacs as compared to Rs.7837.27Lacs in Previous Year. The NetProfit of the Company for the year under review is of Rs.62.36 Lacs as compared toprevious year Net Profit of Rs.188.49 Lacs.

CONSOLIDATED FINANCIAL RESULTS:

Net Sales of the Company were Rs. 10303.68 lacs as compared to Rs.9896.79 lacs in theprevious year. The net Profit was Rs.101.99 lacs as compared to Rs.220.31lacs in theprevious year.

CONSOLIDATED FINANCIAL STATEMENTS:

The Audited Consolidated Financial Statements of the Company for the financial yearended 31st March 2016 prepared in accordance with the Companies Act 2013("the Act") and Accounting Standard (AS) - 21 on Consolidated FinancialStatements is provided in the Annual Report.

TRANSFER TO RESERVES:

The Company not proposes to carry any amount to the General Reserves of the Company forthe financial year ended 31st March 2016 as per audited standalone financialstatements.

SUBSIDIARY COMPANIES:

Pursuant to the provisions of Section 129(3) of the Companies Act 2013 read with Rule5 of the Companies (Accounts) Rules 2014 a statement containing salient features of thefinancial statements of the subsidiary companies in Form AOC-1 is Annexed –I in thisBoard’s Report.

Pursuant to the provisions of Section 136 of the Companies Act 2013 the financialstatements of the Company consolidated financial statements together with relevantdocuments and separate audited accounts in respect of subsidiaries are available on thewebsite of the Company.

STATE OF AFFAIRS OF THE COMPANY:

In textile segment the company is having fabric process house and yarn dyeing unit atDombivli District Thane and weaving unit at Ichalkaranji District Kolhapur. Fabricprocess house is fully equip with latest machinery to bleach dye print& finish alltype of textile fabric. Yarn dyeing unit is also fully equip to bleach & dye the yarnrequired for fancy fabric. Weaving unit is consisting of 36 airjet looms equip to produce36 lacs mtr per year.

In power segment the company has installed Wind turbine of 1.25 MW in Dhule Maharashtraand 2.00 MW in Nettur Tamilnadu.

MANAGEMENT’S DISCUSSION AND ANALYSIS REPORT:

Management’s Discussion and Analysis Report for the year under review asstipulated under Regulation 34(3) read with Schedule Part V of the SEBI (Listingobligation and Disclosurs Requirements) Regulations 2015 with Stock Exchange in India ispresented in separate Section forming part of the Annual Report.

FUTURE OUTLOOK:

Now a days the Readymade garments and online shopping trends is increasing in India dueto this the demand of designer fancy fabrics will substancially increase. Your company isready to take advantage of this increase demand of fancy fabric with the help of itsweaving unit installed in Sep- 2013 and capable to produce all type of grey fancy fabricswhich can be process at its most modern process house.

Your Directors are hopeful for better future

CHANGE IN THE NATURE OF BUSINESS IF ANY:

There was no change in the nature of business of the Company or any of its subsidiariesduring the year.

NUMBER OF MEETINGS OF THE BOARD:

The Board met 6 times during the financial year the details of which are given in theCorporate Governance Report that forms part of this Annual Report. The intervening gapbetween any two meetings was within the period prescribed by the Companies Act 2013.

DIVIDEND

With a view for the expansion plans the Board does not recommend any dividend for theyear 2015-2016

DIRECTORS

In accordance with the provisions of the Companies Act 2013 read with Listingobligation Disclosure Requirements Regulation Mr. Ramautar S. Jhawar Non ExecutiveDirectors of the Company is liable to retire at Annual General Meeting and offered himselffor re-appointment.

PERFORMANCE OF THE BOARD AND COMMITTEES:

During the year under review the performance of the Board & Committees andIndividual Director(s) based on the below parameters was satisfactory:

(i) Most of the Directors attended the Board meeting;

(ii) The remunerations paid to executive Directors are strictly as per the company andindustry policy.

(iii) The Independent Directors only received sitting fees.

(iv) The Independent Directors contributed a lot in the Board and committeedeliberation and business and operation of the company and subsidiaries based on theirexperience and knowledge and Independent views.

(v) The Credit Policy Loan Policy and compliances were reviewed periodically;

(vi) Risk Management Policy was implemented at all critical levels and monitored by theInternal Audit team who places report with the Board and Audit committee.

MEETING OF INDEPENDENT DIRECTORS:

Pursuant of the provision of Section 149 (8) of the Companies Act 2013 read withSchedule IV and Clause 49 of the Listing Agreement the Independent Directors of theCompany reviewed the performance of Non- independent directors and the Board as a wholeincluding the Chairperson of the Company views expressed by the executive directors andnon-executive directors at various level and quantified the quality quantity andtimeliness of flow of information between the Company management and the Board andexpressed satisfaction.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION:

The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. As on 31st March 2016 the Board consists of 6 members. Out ofwhich one is the Managing Director one is Chairman of the Company Three are non ExecutiveDirector of the company and one is the women director of the company.

The policy of the Company on directors’ appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided under Sub section (3) of Section 178 of the Companies Act2013 adopted by the Board and are stated in this Board report. We affirm that theremuneration paid to the directors is as per the terms laid out in the nomination andremuneration policy of the Company.

NOMINATION AND REMUNERATION COMMITTEE

Pursuant to the Section 178 of the Companies Act 2013 the Company has set up aNomination and Remuneration Committee under the Chairmanship of the Independent DirectorMr. N. C. Sharma Mr. Durgesh Kabra and Mr. Ramautar S. Jhawar. are the members.

The Gist of the Policy of the said committee:

For Appointment of Independent Director (ID):

a. Any person who is between the age of 25 years and below 75 years eligible to becomeIndependent Director (ID);

b. He has to fulfill the requirements as per section 149 of the Companies Act 2013read with Clause 49 of the Listing Agreement;

c. Adhere to the code of conduct as per Schedule IV to the Companies Act 2013;

d. Strictly adhere to the Insider Trading Regulation of the SEBI and Insider Tradingpolicy of the Company;

e. Independent Director should have adequate knowledge and reasonably able tocontribute to the growth of the Company and stakeholders;

f. Independent Director should be able to devote time for the Board and other meetingsof the company;

g. Entitled for sitting fees and Reasonable conveyance to attend the meetings; and

h. Able to review the policy participate in the meeting with all the stakeholders ofthe company at the Annual General Meeting.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company’s policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the Internal Audit Manual. To maintain its objectivity and independence theInternal Audit function reports to the Chairman of the Audit Committee.

The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company.

Based on the report of internal audit function process owners undertake correctiveaction in their respective areas and thereby strengthen the controls. Significant auditobservations and recommendations along with corrective actions thereon are presented toBoard.

M/s. Biyani Kabra & Associates – Chartered Accountants is the internal Auditorof the Company.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the Section 134(3)(c) and Section 134 (5) of the Companies Act 2013 theBoard of Directors of the Company hereby confirm:

(i) That in the preparation of the accounts for the financial year ended 31stMarch2016 the applicable accounting standards have been followed along with proper explanationrelating to material departures;

(ii) That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for the year under review;

(iii) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(iv) That the Directors have prepared the accounts for the financial year ended 31stMarch 2016 on a ‘going concern’ basis.

(v) The internal financial controls laid and have been followed by the company and thatsuch controls are adequate and are operating effectively. Such controls means controls andpolicies and procedures adopted and adherence by the company for orderly and efficientconduct of the business for safeguarding assets prevention and detection of frauds anderrors and maintenance of accounting records and timely preparation of financialstatements and review its efficiency.

(vi) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

INDEPENDENT DIRECTORS DECLARATION:

The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Clause 49 of the ListingAgreement.

The Independent Directors under section 149(6) of the Companies Act 2013 declaredthat:

1. They are not a promoter of the Company or its holding subsidiary or associatecompany;

2. They are not related to promoters or directors in the company its holdingsubsidiary or associate company.

3. The independent Directors have /had no pecuniary relationship with company itsholding subsidiary or associate company or their promoters or directors during thetwo immediately preceding financial years or during the current financial year;

4. None of the relatives of the Independent Director has or had pecuniary relationshipor transaction with the company its holding subsidiary or associate company or theirpromoters or directors amounting to two per cent. or more of its gross turnover or totalincome or fifty lakh rupees or such higher amount as may be prescribed whichever islower during the two immediately preceding financial years or during the currentfinancial year;

5. Independent Director neither himself nor any of his relatives—

(i) holds or has held the position of a key managerial personnel or is or has beenemployee of the company or its holding subsidiary or associate company in any of thethree financial years immediately preceding the financial year in which he is proposed tobe appointed;

(ii) is or has been an employee or proprietor or a partner in any of the threefinancial years immediately preceding the financial year in which he is proposed to beappointed of—

(A) a firm of auditors or company secretaries in practice or cost auditors of thecompany or its holding subsidiary or associate company; or

(B) any legal or a consulting firm that has or had any transaction with the companyits holding subsidiary or associate company amounting to ten percent. or more of thegross turnover of such firm;

(iii) Holds together with his relatives two percent. or more of the total voting powerof the company; or

(iv) is a Chief Executive or Director by whatever name called of any nonprofitorganization that receives twenty-five percent. or more of its receipts from the companyany of its promoters directors or its holding subsidiary or associate company or thatholds two percent. or more of the total voting power of the company;

6. Independent Director possesses such qualifications as may be directed by the Board.

The Company & the Independent Directors shall abide by the provisions specified inSchedule IV of the Companies Act 2013.

BOARD EVALUATION:

SEBI (Listing obligation and Disclousers Requirements) Regulation 2015 mandates thatthe Board shall monitor and review the Board evaluation framework. The Companies Act 2013states that a formal annual evaluation needs to be made by the Board of its ownperformance and that of its committees and individual directors. Schedule IV of theCompanies Act 2013 states that the performance evaluation of independent directors shouldbe done by the entire Board of Directors excluded the director being evaluated.

The evaluation of all the directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board.The Board approved the evaluation resultsalong with the evaluation done by the Nomination and Remuneration Committee.

LISTING OF SHARES

Equity Shares of your Company are listed on Bombay Stock Exchange only and the Companyhas paid the necessory Listing Fees for the Year 2016-2017. The Company has executed a NewListing Agreement with the Bombay Stock Exchange pursuant to SEBI (LODR) Regulation 2015.

FIXED DEPOSIT

As on 31st March 2016 the Company held no deposit in any form from anyone.There was no deposit held by the Company as on 31st March 2016 which wasoverdue or unclaimed by the depositors. For the present the Board of Directors haveresolved not to accept any deposits from public shareholders and others.

AUDITORS

At the Annual General Meeting held on September 20 2014 M/s. S.G. Kabra & Co.Chartered Accountants were appointed as auditors of the Company to hold office till theconclusion of the Annual General Meeting to be held in the calendar year 2017.

In terms of the first proviso to Section 139 of the Companies Act 2013 theappointment of the auditors shall be placed for ratification at every Annual GeneralMeeting. Accordingly the appointment of M/s. S. G. Kabra & Co. Chartered Accountantsas statutory auditors of the Company is placed for ratification by the shareholders.

In this regard the Company has received a certificate from the auditors to the effectthat if they are re-appointed it would be in accordance with the provisions of Section141 of the Companies Act 2013.

AUDITORS REPORT

The Auditors have not made any qualification to the financial statement. Their reportson relevant notes on accounts are self-explanatory and do not call for any comments undersection 134 of the companies Act 2013.

COST AUDIT

The central govt. has prescribed the maintenance of Cost records under section 148 ofthe Companies Act 2013 for the year ended 31st March 2016

SECRETARIAL AUDIT REPORT

M/s. Ramesh Chandra Mishra & Associates Company Secretary in Practice wasappointed to conduct the secretarial audit of the Company for the financial year 2015-16as required under Section 204 of the Companies Act 2013 and Rules thereunder. TheSecretarial Audit Report for F.Y. 2015-16 is Annexed-II to this Board’s Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS/REGULATORS:

There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company’s operations in future.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a vigil mechanism named Fraud and Risk Management Policy (FRM) to dealwith instance of fraud and mismanagement if any in staying true to our values ofStrength Performance and Passion and in line with our vision of being one of the mostrespected companies in India the Company is committed to the high standards of CorporateGovernance and stakeholder responsibility.

A high level Committee has been constituted which looks into the complaints raised. TheCommittee reports to the Audit Committee and the Board.

The FRM Policy ensures that strict confidentiality is maintained whilst dealing withconcerns and also that no discrimination will be meted out to any person for a genuinelyraised concern.

RELATED PARTY TRANSACTIONS/CONTRACTS:

Pursuant to the Section 134(3)(h) of the Companies Act 2013 and Rule 8(2) of theCompanies (Accounts) Rules 2014 the particulars of contract or arrangement entered intoby the Company with related parties referred to in Section 188(1) in Form AOC-2 is AnnexedIII to this Board’s Report.

The details of such related party transactions are available in the Notes to theStandalone financial statements section of the Annual Report.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

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.

EXTRACT OF ANNUAL RETURNS

Pursuant to the Section 134(3)(a) of the Companies Act 2013 the details forming partof the extract of the Annual Return is Form MGT-9 is Annexed-IV in the Report.

INSURANCE OF ASSETS

All the fixed assets finished goods semi-finished goods raw material packingmaterial and goods of the company lying at different locations have been insured againstfire and allied risks.

BANK AND FINANCIAL INSTITUTIONS

Directors are thankful to their bankers for their continued support to the company.

EMPLOYER/EMPLOYEE RELATIONS

The relationship with the workers of the Company’s manufacturing units and otherstaff has continued to be cordial.

The Directors wish to put on record their sincere appreciation and gratitude for theservices rendered by the workers and staff at all levels.

HUMAN RESOURCES MANAGEMENT:

We take this opportunity to thank employees at all levels for their dedicated serviceand contribution made towards the growth of the company.The relationship with the workersof the Company’s manufacturing units and other staff has continued to be cordial.

To ensure good human resources management at the company we focus on all aspects ofthe employee lifecycle. This provides a holistic experience for the employee as well.During their tenure at the Company employees are motivated through variousskill-development engagement and volunteering programs.

As per provisions of Section 197(12) of the Companies Act 2013 read with Rule 5(1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isAnnexed V to this Board’s report.

In terms of Section 197(12) of the Companies Act 2013 read with Rule 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 noemployee(s) drawing remuneration in excess of limits set out in said rules forms part ofthe annual report.

Considering the first proviso to Section 136(1) of the Companies Act 2013 the AnnualReport is being sent to the members of the Company and others entitled thereto. The saidinformation is available for inspection at the registered office of the Company duringbusiness hours from 11 a.m to 5 p.m on working days of the Company up to the date of theensuing Annual General Meeting. Any shareholder interested in obtaining a copy thereofmay write to the Company Secretary in this regard.

CORPORATE GOVERNANCE:

A Report on Corporate Governance along with a Certificate from M/s. Ramesh ChandraMishra & Associates regarding compliance with the conditions of Corporate Governanceas stipulated under Clause 49 of the Listing Agreement with Stock Exchange forms part ofthis Report and Annexed-VI to this Board’s Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars as required under Section 134(3)(m) of the Companies Act 2013 read withthe Companies (Disclosure of particulars in the Report of the Board of Directors) Rules1988 are given is Annexed VII to this report.

CEO AND CFO CERTIFIATION :

As required under Regulations 17 (8) read with the Part B of Schedule II of the SEBI(Listing obligations and Disclousure Requirements) Regulations 2015 the CEO and CFOcertification is provided in this Annual Report.

DISCLOSURE UNDER THE SEXUAL HARASMENT OF WOMEN AT WORK PLACE (PREVENTING PROHIBITIONAND REDRESSAL ACT 2013.)

The Company has appointed health and saferty committee for the purpose.

RISK MANAGEMENT POLICY

The company has developed Risk Management Policy mainly covering the following areas ofconcerns

1. License and policy of respective government all over the world in connection withexport of goods and matter in connection with textiles and fabrics.

2. Mandatory compliance safeguards in accordance with Factories Act 1948 and otherapplicable laws and Acts &certification of manufacturing factory located at Dombivaliand Ichalkaranji.

3. Adequate policy in connection with foreign exchange management fluctuations thereofduly placed before the Board

ACKNOWLEDGEMENTS

The Directors place on record their appreciation for co-operation and support extendedby the Government Banks Shareholders and customers for their continued support extendedto the company at all times.

The Directors further express their deep appreciation to all employees for commendableteamwork high degree of professionalism and enthusiastic effort displayed by them duringthe year.

For and on behalf of the Board Of Directors
Place: Mumbai Ramautar S. Jhawar
Date: 9th August 2016 Chairman