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Donear Industries Ltd.

BSE: 512519 Sector: Industrials
NSE: DONEAR ISIN Code: INE668D01028
BSE LIVE 15:40 | 15 Dec 74.55 3.30
(4.63%)
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74.80

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74.80

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NSE 15:28 | 15 Dec 73.05 3.45
(4.96%)
OPEN

73.05

HIGH

73.05

LOW

73.05

OPEN 74.80
PREVIOUS CLOSE 71.25
VOLUME 85758
52-Week high 89.65
52-Week low 51.10
P/E 44.91
Mkt Cap.(Rs cr) 388
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 74.80
CLOSE 71.25
VOLUME 85758
52-Week high 89.65
52-Week low 51.10
P/E 44.91
Mkt Cap.(Rs cr) 388
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Donear Industries Ltd. (DONEAR) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 30th Annual Report on thebusiness and operations of the Company for the Financial Year ended 31st March2016.

Financial Highlights

The table given below gives the financial highlights of the Company for the year ended31st March 2016 as compared to the previous financial year.

Financial Results 2015-16 2014-15
(Rupees) (Rupees)
Gross Revenue 5211134761 5210384278
Net Profit for the Year 56299836 77348503
Add: Balance Brought Forward 265959190 201127878
Less: Proposed Final Dividend 10400000 10400000
Less: Dividend Distribution Tax 2117191 2117191
Amount Transferred to General Reserve Nil Nil
Balance Carried forward 309741836 265959190

Dividend:

The Directors have recommended a dividend @ ' 0.20 per equity share of ' 2/- each forthe approval of Shareholders at the ensuing Annual General Meeting.

Management Discussion and Analysis:

(a) Industrial Structure and developments:

The Indian Economy is on a steady growth trajectory. If some estimates are to bebelieved the Indian Economy is said to be at a much sweeter spot when compared to therest of the world. In the IMF Estimates of GDP growth among big economies all over theworld India for the first time ever tops the chart. And the road ahead looks good forIndia as an emerging Economy.

According to the UNIDO's (United Nations Industrial Development Organization)industrial statistics 2016 India has climbed up three positions to become the sixthlargest industrial country in the world during 2015 up from ninth position in theprevious year.

Riding on strong macroeconomic fundamentals favourable business sentiments anddownward trend in interest rates the Confederation of Indian Industry (CII) expects theIndian economy to grow at around 8% in 2016-17. Even the Reserve Bank of India hasforecast a GDP growth of 7.6% for 2016-17.

The CSO data has also projected a growth of 7.6% for 2015-16 (Chart 2) despite growthdeceleration to 7.3% in the quarter ended December 2015.

The textile industry plays a vital role through its contribution to industry output andemployment generation and the export earnings of the country. Globally India is the 2ndlargest producer of textiles and garments with the leading position occupied by China. Itis likely to overtake China in terms of size by 2022-23. Unlike China India has apredominantly cotton based textile industry.

The government under the dynamic leadership of the Hon'ble Prime Minister of India hasendeavoured to make the textile sector more vibrant through several initiatives. Thecentral focus of these initiatives has been on increasing textile manufacturing bybuilding the best in class manufacturing infrastructure up gradation of technologyfostering innovation and enhancing skill in the textile sector.

(b) Opportunities and Threats:

The future for the Indian textile industry looks promising buoyed by strong domesticconsumption. The Government has introduced the Amended Technology Upgradation Fund Scheme(ATUFS) to give a further boost for technology investment in the textile industry. TheATUFS targets employment generation exports conversion of existing looms to better-qualitytechnology looms and improved quality of processing industry. The ATUFS is expected to actas a catalyst to the Government's ‘Make in India' campaign for the textile sector.Approval has also been given for 24 new textile parks which will further create employmentopportunities and investments. The long awaited National Textile policy to be announcedshortly will further accelerate growth in this sector.

However there are several challenges ahead for the Textile industry for enhancing itscompetitive strength and global positioning in terms of inflexible labour laws poorinfrastructure competition from low cost neighbouring countries which will have to beaddressed to sustain the growth momentum of the industry.

(c) Segment wise or Product wise performance:

The Company has two reportable primary business segment viz. Manufacturing and Dealingin Textiles and Rental Property. The same has been reported in the notes to the accounts.

(d) Discussion on Financial performance with respect to operational performance:

The company reported a turnover of ' 51728.76 Lacs during the year 2015-16 against aturnover of ' 51633.07 Lacs in the previous year. There was a growth of 0.19% in therevenues of the Company as compared to previous year. The Company clocked in a PBT of '935.08 Lacs during the year 2015-16 resulting in a growth of 73.42% as compared toprevious year.

(e) Human Resource Management:

The Company has employee friendly HR policies and attracts the best talent in theIndustry. The attrition rates are quite low. The Company's policy of providing on the jobtraining has been instrumental in developing a good work force for the Company.

Corporate Governance Report:

A detailed report on Corporate Governance Report forms part of this Report. AuditorsCertificate on compliance with Corporate Governance requirements by the Company isattached also forms part of this report.

Directors' Responsibility Statement:

In terms of section 134 (3) (c) of the Companies Act 2013 your Directors state that:

1. In preparation of annual accounts for the year ended 31st March 2016 theapplicable accounting standards have been followed along with proper explanations relatingto material departures if any;

2. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 31st March 2016 and profit for the yearended on that date;

3. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

4. They have prepared the annual accounts ongoing concern basis;

5. They have laid down proper internal financial controls to be followed by the Companyand they were adequate and operating effectively and

6. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems were adequate and operating effectively.

Extract of Annual Return :

Extract of the Annual Return in Form No. MGT-9 as required under section 92 of theCompanies Act 2013 is annexed herewith as Annexure - A to this Report.

Deposits:

During the financial year under report the Company has not accepted deposits within themeaning of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.

Particulars of Loans Guarantees and Investments:

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

Directors:

Mr. Rajendra Agarwal retires by rotation at the ensuing Annual General Meeting in termsof Section 152 of the Companies Act 2013. The Act provided that Independent Directors arenot subject to retirement by rotation.

During the year under report Mrs. Neena Agarwal resigned as Director of the Companyw.e.f. 14th November 2015 on personal grounds.

The Board of Directors has appointed Mr. Anup Kumar Singh (DIN 07343361) as Director on19th November 2015.

Familiarization Programme for Directors:

At the time of appointment a Director a formal letter of appointment is given tohim/her. The Director is also explained in detail the role function duties andresponsibilities expected from him/her and also compliance required from him/her under theCompanies Act 2013 Listing Agreement with stock exchanges. Further the Chairman andManaging Director also will have one to one discussion with the newly appointed Directorto familiarize with the Company's operation.

Performance of Board Evaluation:

Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out annual performance evaluation of its mownperformance the Directors individually as well as the evaluation of the working of itscommittees. A structured questionnaire is prepared after taking into consideration inputsreceived from the directors covering various aspects of the Board's functioning.

The evaluation was done on various parameters like vision and strategy Boardparticipation disclosure of interest review of risk management policies leadershipskills good governance marketing and corporate communications etc.

Risk Management:

The Company has adopted a Risk Management Policy for the Company includingidentification therein the elements of risk if any which in the opinion of the Board maythreaten the existence of the Company. After identifying the risk and assessing the levelof impact controls are put in place to mitigate the risk by the concerned executives whoare responsible to control the exposure of the risk and balance the impact of risk on acontinuous basis.

Independent Directors Meeting:

During the year under review a meeting of Independent Directors was held on 4thMarch 2016.

Related Party Transactions:

All related party transactions that were entered into during the financial year were inthe Ordinary course of business and were on an arm's length basis. There are no materialsignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other related parties which may have potential conflict with theinterest of the Company at large.

All related party transactions for the year are placed before the Audit Committee aswell as before the Board for approval. The transactions entered into with related partiesare reviewed on a quarterly basis by the Audit Committee.

The Policy on Related Party Transactions as approved by the Audit Committee and Boardis uploaded on the Company's website at the link http://www.donear.com/donear2006/downloads/RelatedPartvTransactionsPolicv.pdf

The details of the transactions with Related Parties to be provided in Form AOC-2 areannexed herewith as Annexure B.

Members can refer Note No. 30 to the financial statements which set out related partydisclosures.

Auditors:

M/s. M.L.Bhuwania& Co. are appointed as Statutory Auditors to hold office from theconclusion of 28th Annual General Meeting to the conclusion of 31stAnnual General Meeting (Subject to ratification of the appointment by the members at everyAnnual General Meeting). A proposal for ratification of the appointment of StatutoryAuditors for the financial year 2016-17 is placed before the members at the ensuing AnnualGeneral Meeting. The Auditors have given their eligibility certificate in terms of Section139 of the Companies Act 2013.

Whistle Blower Policy:

Company has a Whistle Blower Policy to report genuine concerns or grievances. The sameis explained in the Corporate Governance Report No person has been denied access to AuditCommittee.

Corporate Social Responsibility:

As a part of its initiative under the ‘Corporate Social Responsibility' (CSR)drive the Company has undertaken project in the area of rural development Promotinghealth care education etc.. These projects are in accordance with Schedule VII of theCompanies Act 2013 and the Company's CSR Policy. The report on CSR activities as requiredunder Companies (Corporate Social Responsibility Policy) Rules 2014 is set out as Annexure- C forming part of this report.

Secretarial Audit:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Rules madethere under the Company has appointed Mr. Yogesh Sharma a Company Secretary in Practiceto undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexedherewith as Annexure D.

Energy Conservation Technology Absorption:

Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings & Outgoings.

A. Conservation of Energy:

(a) Energy conservation measures taken Regular monitoring of consumption optimization of production facility proper maintenance of machines
(b) Additional investments and proposals if any being implemented for reduction of consumption of energy Nil
(c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods. Improvement in quality and efficiency in production.
(d) Total energy consumption in units Total Energy Consumption of 29248282 Units.
(e) Consumption per unit of production as per Form A of the Annexure in respect of industries specified in the Schedule thereto. 0.62 per unit of Fabric Production 1.25 per unit of Yarn Dyeing Production 0.18 per unit of Fabric Processing

B. Technology absorption:

(a) Efforts made in technology absorption as per Form B of the Annexure At present notrequired.

C. Foreign exchange earnings and outgoing:

(a) Activities relating to exports initiatives taken to increase exports development of new export markets for production and services and export plans. The Company is regularly developing new designer suiting and shirting fabrics as per latest trends in markets to export all over the world especially to the new markets. The Company has also taken initiative in exporting cotton fabrics.
(b) Total foreign exchange used and earned Used :
C.I.F. value of imports ' 45546872
Expenses in foreign currency ' 31417001
Earned :
FOB ' 530094463

Form for Disclosure of Particulars with respect to Conservation of Energy

A) Power and fuel consumption

Particulars Current Year Previous Year
1. Electricity
a) Purchased Units 27945429 28455496
Total amount 209694784 198975525
Rate/Unit (?) 7.50 6.99
b) Own generation
i) Through diesel generator
Unit 71192 60736
Units per Liters of diesel oil 3.12 3.08
Cost/Unit (?) 15.97 19.02
ii) Through steam turbine/generator
Unit Nil Nil
Units per Ltr. of diesel oil/gas Nil Nil
Cost/Unit (?) Nil Nil
iii) Through Gas Generator :
Units 489500 732050
Units per CM3 of Gas 2.34 3.50
Cost/Unit (?) 14.59 11.69
2. Coal (specify quality and where used)
Quantity (Tones) 19301.06 23938.07
Total Cost (?) 81245861 93592530
Average Rate per Ton (?) 4209 3910
(Imported and Lignite used in Boiler for Steam Generation)
3. Furnace Oil
Quantity (Tones) Nil Nil
Total Cost (?) Nil Nil
Average Rate per Ton (?) Nil Nil
4. Others/internal generation (please give details)
Quantity (Tones) Nil Nil
Total Cost (?) Nil Nil
Average Rate per Ton (?) Nil Nil

B) Consumption per Unit of Production:

Products Unit Standard (If Any) Current Year Previous Year
1 Fabrics Produced Metre 28511066 27632331
Electricity consumed for Fabrics Units 17301014 18444085
Electricity Consumed for Fabrics Unit/Mtr 0.61 0.67
2 Yarn Dyeing Production Kgs 3473456 3252900
Electricity consumed for yarn dyeing Units 4336518 4286594
Electricity consumed for yarn dyeing Unit/Kg 1.25 1.32
3 Fabric Processing Production Metre 38146625 42241527
Electricity consumed for Fabric processing Units 6868588 6517603
Electricity consumed for Fabric processing Unit/Mtr 0.18 0.15
4 Furnace Oil Nil Nil
5 Coal Nil Nil
6 Others Nil Nil

Form for disclosure of particulars with respect to absorption A) Research andDevelopment (R & D)

1. Specific areas in which R & D carried out by the Company None
2. Benefits derived as a result of the above R & D Not Applicable
3. Future plan of action To install additional capacity at surat plant.
4. Expenditure on R & D Not Applicable
a. Capital
b. Recurring
c. Total
d. Total R & D expenditure as a percentage of total turnovers.

B) Technology absorption adaptation and innovation

1. Efforts in brief made towards technology absorption adaptation and innovation None
2. Benefits derived as a result of the above efforts e.g. product improvement cost reduction product development import substitution etc. Not Applicable
3. In case of imported technology (imported during the last five years reckoned from the beginning of the financial year) Not Applicable
a) Technology imported
b) Year of import
c) Has technology been fully absorbed ?
d) If not fully absorbed areas where this has not taken place reasons therefore and future plans of action.

Particulars of Employees and related disclosure:

There are no employees drawing a monthly or yearly remuneration in excess of the limitsspecified by the Companies Act 2013 and Rules 5(2)and 5(3) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014. The details annexed herewith as AnnexureE.

Acknowledgement:

Your Directors acknowledge the support and counsel extended by the bankers governmentagencies shareholders investors employees and others associated with the Company. TheDirectors look forward the same in future also.

For and on behalf of Board of Directors

Mr. Vishwanath L. Agarwal

Chairman

Mumbai

30th May 2016