The Members of E-Land Apparel Limited
Your Directors present the 20th Annual Report of the Company together withthe Audited Financial Statements for the financial year ended 31st March 2017.
The financial performance of the Company for the year ended 31st March2017is summarized below:
| || ||(Rs. In Lakhs) |
|Particulars ||Year ended 31st March 2017 ||Year ended 31st March 2016 |
|Operational & Other Income ||21611.25 ||23866.92 |
|Loss before Interest Depreciation Prior period items Exceptional Items & Tax ||(2987.39) ||(759.10) |
|Interest ||481.99 ||359.00 |
|Depreciation & Amortization ||366.49 ||258.65 |
|Loss before exceptional items and tax ||(3835.88) ||(1376.75) |
|Prior period items || ||490.37 |
|Exceptional Items || ||- |
|Loss before tax ||(3835.88) ||(1867.12) |
|Less/(Add): Provision for Taxation including prior period adjustments ||- ||- |
|Deferred Tax ||- ||- |
|Loss after tax ||(3835.88) ||(1867.12) |
OPERATIONS OF THE COMPANY / COMPANY PERFORMANCE:
The Company's total income from operations for F.Y. 2016-17 at Rs. 21534.10 Lakhs waslesser than by 8.00% over last year (Rs. 23454.56 Lakhs in F.Y. 2015-16). The totalexpenses for F.Y. 2016-17 at Rs.24965.14 Lakhs were higher by 32% over last year (Rs.24884.67 Lakhs in F.Y. 2015-16). Loss after tax for F.Y. 2016-17 stood at Rs.3835.88Lakhs as against Rs. 1867.12 Lakhs for F.Y. 2015-16 reflecting an Increase of losses by105.44%.
TRANSFER TO RESERVES:
As there are losses for the financial year 2016 2017 the Company did nottransfer any amount to reserves during the year.
As there are no profits the Board of Directors of the Company does not recommend anypayment of dividend on the shares for the financial year 2016 2017.
CORPORATE DEBT RESTRUCTURING (CDR):
In order to overcome debt repayment obligations the Company had applied for therestructuring of its debts through CDR Mechanism envisaged under the Reserve Bank of India(RBI) guidelines dated 23rd August 2001 and subsequent amendments theretowhich was approved by the CDR Cell vide their letter of approval dated 27thJune 2012 subject to the compliance of the conditions mentioned therein and theimplementation of the CDR Scheme within a period of 120 days from the issuance of theLetter of Approval. The Company has already executed Master Restructuring Agreement (MRA)and has opened the Trust and Retention Account (TRA) with SBI on the terms and conditionsset out in Trust and Retention Account Agreement. Other follow-on procedures such asSecurity creation in favour of SBICAP Trustee Ltd. as a security Trustee for beneficialinterest of all existing CDR lenders for majority of its properties is completed TheCompany has proposed an offer to the CDR lender banks on 25th January 2016 for One TimeSettlement (OTS) of all its existing debts with the banks and repayment of entireoutstanding principal and interest due and the waiver of the entire recompense portion.
The Company has submitted the proposal for One Time Settlement to all the Lender Banks/Consortium Banks on 27th June 2017 for the outstanding dues of the Company andthe Company is waiting for the approval of the Proposal submitted by the Company toConsortium Banks.
Refund of 1% Security Deposit from BSE:
During the year Company had submitted the application to SEBI on 3rdOctober2016 for refund of 1% security Deposit due from BSE and received the NOC from SEBIon 8th December 2016 vide letter OIAE/IGRD/OW33068/2016 (the same NOC haddirected to BSE to release the 1% Security deposit to the Company). The Company hadreceived the whole amount of 1% security deposit on 27th December 2016 by theBank of Maharashtra.
RBI Compounding Order:
During the year ended March 31 2014 Company had entered into a tripartite agreementwith E-Land Asia Holdings Pte Ltd its holding Company and Mr. Murarilal Agarwal Mr.Ravindra Agarwal and Mr. Vishwambharlal Bhoot (Old Promoters) whereby the loan outstandingtowards the Old promoters had been directly paid by the holding Company on behalf of theCompany. As the loan was used to meet general corporate purpose the Company had made anapplication under the applicable provisions of the Foreign Exchange Management Act("FEMA") and the rules and regulations there under for regularizing the same.Company had received approval from the Reserve Bank of India (RBI) treating the Loan asan External Commercial Borrowing subject to the applicable provisions for compoundingunder FEMA and the Regulations thereunder. Subsequently Company made Compoundingapplication with RBI. Company had received the Compounding order on 3rd Augustfrom RBI and directed the Company to pay the penalty of Rs. 740000/-. The company hadpaid the penalty on 16th August to the said authority. The Company is filingECB 2 Return by 5th of every month to State Bank of India for onwardsubmission to Reserve Bank of India.
Investigation Audit of irregularities as per letters from employee
SRBC & Co LLP the Statutory Auditors of E land Apparel Limited had received twoletters dated 21st November 2015 and dated 15th December 2015 fromthe employee Mr. Ramdarsh Singh stating certain irregularities conducted in the operationof the company. The said Letters has pointed out the following irregularities:
a. Selling of Properties below Market Price.
b. Non-payment of ESIC & PF Contribution from 2007 to 2014;
c. Non Payment of Service tax from 2007 to 2014;
On receipt of such Letters from employee referred also as "Whistle Blower"Company had planned to set up small internal team to verify all allegations made in thoseletters and status of all irregularities ( If any). However with the suggestions of theChairman of Audit Committee the Company had decided to appoint the external investigationparty to conduct investigation on the aforementioned irregularities (If any). FurtherHinesh R Doshi & Co. LLP Chartered Accountants Mumbai referred as"Investigation Agency" were also appointed by the Audit Committee in itsmeeting held on 10th February 2016 to conduct investigation on the complaintletters pertaining to point a b and c. An Interim Report was prepared and issued by theInvestigation Agency in May 2016 and Final Report was submitted dated 17thMarch 2017. In the Audit Committee Meeting held on 25th March 2017 the AuditCommittee had concluded the matter of complaint by whistle blower with the fact andfindings of Investing Agency and Legal Counsel that there were no such irregularities asalleged by the Whistle Blower and investigated by the Agency.
The Board took the Note of the Conclusion given by the Audit Committee on theInvestigation Audit of irregularities in Statutory Compliances as complaint made by theWhistle Blower Ramdarsh Singh. The same was thoroughly investigated by the InvestigatingAgency Hinesh R. Doshi & Company LLP Charted Accountants Mumbai and concluded thatall the allegations raised by Whistle Blower had been appropriately addressed andconcluded and no further action was required. The Board had advised the management tosubmit all the required documents to ESIC and PF Authorities and expedite the completionof the proceedings.
MATERIAL CHANGES AND COMMITMENTS:
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyand the date of this Report.
During the year under review your Company's Authorized Share Capital is Rs. 6001Lakhs comprising of 60010000 Equity Shares of Rs. 10/- each. The Company's paid upcapital is Rs. 4799.05 Lakhs comprising of 4 7990469 Equity Shares of Rs. 10/- eachfully paid up. During the year under review the Company has not issued any shares. TheCompany has not issued shares with differential voting rights. It has neither issuedemployee stock options nor sweat equity shares. As on March 31 2017 none of theDirectors of the Company holds shares of the Company.
SHIFTING OF REGISTERED OFFICE OF THE COMPANY
During the year under review the Board of Directors of your Company at its Meetingheld on Tuesday 14th February 2017 had decided to shift the Registered Officeof the Company from State of Maharashtra Mumbai situated at 404 4thFloor Western Edge-1 Western Express Highway Magathane Borivali (East) Mumbai-400066to State of Karnataka Bengaluru at16/2B Sri Vinayaka Industrial EstateSingasandra near Dakshin Honda Showroom Hosur Rood Bengaluru 560068'. Theapproval of Members was received through Postal Ballot result of which was declared onFriday 24th March 2017.
As the Registered Office of the Company has shifted form one state to another theapplication for the same has to submit to Regional Director of western Region through FormINC 23 and physically too. The same application has to submit to Chief Secretary ofthe State Government. The Applications to both the statutory Bodies had already beensubmitted on 30th May 2017. The Company is awaiting for the order of RegionalDirector of Western Region for the shifting of Registered Office of the Company.
The Equity Shares of the Company are listed on BSE Limited (BSE) with scrip code no.532820 and on National Stock Exchange of India Limited (NSE) with symbol as ELAND.
The listing fee for the year 2017 2018 has been paid to both the StockExchanges.
DIRECTORS & KEY MANAGERIAL PERSONNEL:
The Board of the Company comprises of Six Directors including one Managing Directorone Whole Time Director and Four Independent Directors including One Woman Director asrequired under Section 149(1) of the Companies Act 2013 as on 31st March 2017.
Mr. Kwang Hyuck Choi (having DIN 02223626) Managing Director of the Company hadresigned from Board w.e.f. 30th May 2017. Your Directors take this opportunityto express their deep sense of appreciation for the valuable services rendered by Mr.Kwang Hyuck Choi during his tenure as Managing Director.
Mr. Jae Ho Song (having DIN 7830731) the additional Director has been appointed as theManaging Director of the Company with effect from 30th May 2017 and hisappointment will be subject to the approval of the Members of the Company and the CentralGovernment if required under Section 196 197 203 read with Schedule V of the CompaniesAct 2013.
The remuneration to be paid to Mr. Jae Ho Song Managing Director had already beenapproved by the Nomination and Remuneration Committee at its meeting held on 30thMay 2017.
Mr. Supriyo Kumar Chaudhuri has been appointed as Nominee Director of State Bank ofIndia on the Board of the Company W.E.F. 30th May 2017.
In accordance with the provisions of Section 152 of the Companies Act 2013 read withCompanies (Management & Administration) Rules 2014 and Articles of Association of theCompany Mr. Jung Ho Hong is liable to retire by rotation at the ensuing Annual GeneralMeeting of the Company. Mr. Jung Ho Hong being eligible offers himself forre-appointment.
The term of appointment of Mr. Jung Ho Hong as Whole Time Director of the Company willbe expired on 29th September 2017. As recommended by the Nomination andRemuneration Committee the Board of Directors of the Company at its meeting held on 19thAugust 2017 has re-appointed him as Whole-Time Director of the Company for a furtherperiod of three years with effect from 30th September 2017 to 29thSeptember 2020 on the Board of the Company and his appointment will be subject to theapproval of the Members of the Company and the Central Government if required underSection 196 197 203 read with Schedule V of the Companies Act 2013.
Brief resume of the Directors proposed to be appointed/re-appointed as stipulated underListing Agreement with the Stock Exchanges where the shares of the Company are listed aregiven in the Notice convening 20th Annual General Meeting.
The Company had filed requisite Form MR-2 for seeking approval from Central Governmentfor appointment of Mr. Kwang Hyuck Choi as Managing Director on 06th March2017. The Company has received Central Government approval for appointment of Mr. KwangHyuck Choi vides order No. SRN G 3743372/2017 CL VII dated 28thApril 2017. The Company had received the approval from Central government forreappointment and payment of remuneration to Mr. Jung Ho Hong vides order No SRN G06002273/2016 CL VII dated 29th March 2017.
DECLARATION BY INDEPENDENT DIRECTORS:
The independent directors have submitted the Declaration of Independence as requiredpursuant to section 149(7) of the Companies Act 2013 and Regulation 16 and 25 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 stating that they meetthe criteria of independence as provided in sub-section (6).There has been no change inthe circumstances which has affected their status as independent director. Non-ExecutiveDirectors of the Company had no pecuniary relationship other than sitting fee forattending meetings.
FORMAL ANNUAL EVALUATION OF THE PERFORMANCE OF BOARD ITS COMMITTEES AND DIRECTORS:
Pursuant to the provisions of the Companies Act 2013 and the regulation 25 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 a separate meeting ofIndependent Directors was held during the year without the presence of ExecutiveDirectors. The Board has adopted a formal mechanism for evaluating various aspects of theBoard's functioning its performance and as well as that of its committee and individualdirectors. The criteria for performance evaluation of the Board include aspects likecomposition of the Board and its Committees culture execution and performance ofspecific duties obligations and governance experience competencies etc. The exercisewas carried out through a structured evaluation process covering various aspects of theBoards functioning such as composition of the Board and Committees experience andcompetencies performance of specific duties and obligations governance issues etc.Separate exercise was carried out to evaluate the performance of Individual Directors whowas evaluated on parameters such as attendance contribution at the meetings andotherwise independent judgment safeguarding of minority shareholders interest. And etc.The Board of Directors expressed their satisfaction with the evaluation process.
EXTRACT OF ANNUAL RETURN:
The extract of annual return as provided under sub-section (3) of Section 92 of theCompanies Act 2013 in the prescribed Form MGT 9 is attached as "AnnexureA" to this Report.
NUMBER OF MEETINGS OF THE BOARD:
Regular meeting of the Board are held during the year to review performance of theCompany to discuss and decide on various business strategies policies and other issues.During the year 6 meetings of the Board of Directors were convened and held on 30thMay 2016 27th June 2016 12th August 2016 14thNovember 2016 14th February 2017 and 25th March 2017. Theintervening gap between two consecutive meetings was not more than the period specified inthe Companies Act 2013 and Listing Regulations 2015.The Detailed information about thesame is given in the Corporate Governance Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report on the operations of the Company asrequired under SEBI Listing (Obligation and Disclosure Requirement) Regulations 2015 isprovided in separate section and form an integral part of this report.
CORPORATE GOVERNANCE REPORT:
As per Regulation 34 (3) and Chapter IV read with Schedule V of the SEBI Listing(Obligation and Disclosure Requirement) Regulations 2015 a separate Section on CorporateGovernance Practices followed by the Company together with a certificate from theCompany's Secretarial Auditors confirming compliances forms an integral part of thisReport
The Company has not accepted / renewed any deposits within the meaning of Section 73and Section 74 of the Companies Act 2013 and the Rules made thereunder.
DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134(3)(c) of the Companies Act 2013 yourDirectors state that:-
(1) In the preparation of the annual accounts for the year ended 31stMarch 2017 the applicable Accounting Standards have been followed and that there are nomaterial departures;
(2) Appropriate accounting policies have been selected 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 loss of the Company for the year ended 31st March 2017;
(3) Proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(4) They have prepared the annual accounts on a "Going Concern" basis.
(5) Proper internal financial controls were followed by the Company and that suchinternal financial controls are adequate and were operating effectively.
(6) Proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.
NOMINATION AND REMUNERATION POLICY:
The Board on the recommendation of the Nomination and Remuneration Committee has frameda Remuneration Policy providing
(a) criteria for determining qualifications positive attributes and independence ofdirectors and
(b) a policy on remuneration for directors key managerial personnel and otheremployees.
The detailed Nomination and Remuneration Policy is placed on Company's website athttp://www.elandapparel.com/ Nomination Remuneration Policy.pdf
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Information regarding loans guarantees and investments covered under the provisions ofSection 186 of the Companies Act 2013 are detailed in the Financial Statements.
RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business.
All Related Party Transactions upto 31st March 2017 were placed before theAudit Committee and the Board for approval. Prior omnibus approval of the Audit Committeewas obtained for Related Party Transactions for a period up to 31st March 2017and for the financial year 2016-17. The transactions entered into pursuant to the omnibusapproval so granted were audited and a statement giving details of all related partytransactions was placed before the Audit Committee for its review on a quarterly basis.The Company has obtained the approval of the shareholders by way of special resolution forthe material related party transactions. The Board of Directors and the Audit Committeehave also approved the said related party transactions.
There are material' related party transactions as defined under Regulation 23 ofthe SEBI Listing Regulations 2015 the details of the same are disclosed in Form AOC-2 inthat regard which is attached as "Annexure B" to this report.
The Policy on RPTs as approved by Board is uploaded on the Company's website athttp://www.elandapparel.com/ policy onrelatedparty.pdf
The Company undertakes the transactions of purchase and sale of goods andavailing/rendering services with E-Land Group of Companies as mentioned in point 31 inNotes to Accounts.
None of the Directors/Key Managerial Personnel has any pecuniary relationships ortransactions vis--vis the Company which may have potential conflict with the interest ofthe Company at large.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information in accordance with the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 regarding Conservation ofEnergy Technology Absorption and Foreign Exchange Earnings and Outgo is attached as"Annexure C" to this report.
RISK MANAGEMENT POLICY:
Information on the development and implementation of a Risk Management Policy for theCompany including identification therein of elements of risk which in the opinion of theBoard may threaten the existence of the Company is given in the Corporate GovernanceReport.
VIGIL MECHANISM / WHISTLE BLOWER POLICY:
In accordance with Section 177(9) and (10) of the Companies Act 2013 the Company hasestablished a Whistle Blower Policy and Vigil Mechanism. The policy is available on theCompany's website at http://www.elandapparel.com/whistle-blower-policy.pdf
CORPORATE SOCIAL RESPONSIBILITY:
As the Company does not fall under any of the threshold limits given under theprovisions of Section 135 of the Companies Act 2013 the compliances under CSR are notapplicable to the Company.
REFERENCE TO THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION ("BIFR")UNDER THE PROVISIONS OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT 1985:
The total losses of the Company as on 31st March 2017 have exceeded itsentire Net Worth. Accordingly your Company is proposing to make a reference to the BIFRunder the provisions of Section 15(1) of the Sick Industrial Companies (SpecialProvisions) Act 1985 for determination of the measures that should be adopted by yourCompany to revive the Company. Your Company is in the process of collating all therequisite data needed for making the reference to the BIFR.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The Company has an employee drawing remuneration above the limits mentioned in Section197(12) of the Companies Act 2013 read with Rules 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended from time totime the details of the same is attached in "Annexure E" to this report.
INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy against sexual harassment in line with the provisions of Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder.
During the financial year 2016 2017 the Company has not received any complaintson sexual harassment and hence no complaints remain pending as of 31st March2017.
The Company has no Subsidiary.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS & COURTS.
There were no penalties orders passed during the year.
INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY:
The Company has an internal control system commensuratewith the size scale andcomplexity of its operations. This ensures that all transactions are authorized recordedand reported correctly and assets are safeguarded and protected against loss fromunauthorized use or disposition. Your Company has adequate internal controls for itsbusiness processes across departments to ensure efficient operations compliance withinternal policies applicable laws and regulations protection of resources and assets andappropriate reporting of financial transactions.
The Company has Internal Audit function which is empowered to examine the adequacy andcompliance with policies plans and statutory requirements. It comprises of experiencedprofessionals who conduct regular audits across the Company's operations. The Company hasalso appointed a firm of Chartered Accountants as Internal Auditors who reviews thevarious functions of the Company thoroughly and report to the Audit Committee. During theyear under review the Risk Management Committee of the Company had reviewed the newrequirement of Internal Control over Financial Reporting ("ICOFR") and finalizedthe detailed analysis of key processes and these were presented for review by theStatutory Auditors. The control mechanism and the process of testing of controls werediscussed with the Statutory Auditors. The Statutory Auditors have submitted their reporton the Internal Financial Controls which forms an integral part of this Report
The adequacy of the same has been reported by the Statutory Auditors of your Company intheir report as required under the Companies (Auditor's Report) Order 2003.
Your Company considers its Human Resources as the key to achieve its objectives.Keeping this in view your Company takes utmost care to attract and retain qualityemployees. The employees are sufficiently empowered and such work environment propels themto achieve higher levels of performance. The constant commitment of the employees is thedriving force behind the Company's vision. Your Company appreciates the spirit of itsdedicated employees.
In the last Annual General Meeting (AGM) held on 30th September 2016 Deloitte Haskins& Sells LLP Chartered Accountants Mumbai having Firm Registration No.117366W/W-100018have been appointed Statutory Auditors of the Company for a period of 5 years.Ratification of appointment of Statutory Auditors is being sought from the Members of theCompany at the ensuing AGM. Further Deloitte Haskins & Sells LLP CharteredAccountants Mumbai have under Section 139(1) of the Act and the Rules framed thereunderfurnished a certificate of their eligibility and consent for appointment. They have alsoconfirmed their compliance pursuant to Regulation 33 (1) (d) of the Listing Regulations2015 in respect of "Peer Review Certificate" issued by the Peer Review Board ofICAI.
Further the report of the Statutory Auditors alongwith notes to Schedules is enclosedto this report.
There are no qualifications reservations or adverse remarks made by Deloitte Haskins& Sells LLP Chartered Accountants Mumbai Statutory Auditors of the Company in theirreport for the financial year ended 31st March 2017. The Statutory Auditorshave not reported any incident of fraud to the Audit Committee or to the Board of theCompany in the year under review.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. Shanu Matta & Associates a firm of Company Secretaries in Practice toundertake the Secretarial Audit of the Company. The Secretarial Audit Report is attachedherewith as "Annexure D".
The Secretarial Auditors has pointed out some observations in the Secretarial AuditReport and the Company's response to the same is as bellow.
|SR. No. ||Observations by Secretarial Auditor ||Company's Response |
|1. ||Intimation about closure of trading window to designated persons for the Board Meeting held on 14th November 2016 and 12th August 2016 were made on 7th November 2016 and 5th August 2016 respectively after 3.30 P.M. ||Even though the intimation of closure of trading window was made after 3.30P.M. to designated persons there were no trading in shares of the Company on the 7th November 2016 and 5th August 2016. |
|2. ||In the E Form ADT 1 filed for newly appointed Auditors Deloitte Haskins Sells & Co. LLP Chartered Accountant point No. 4(i) of the same is incorrectly filled as functioning for number of financial years is FIVE (5) ||It is Human error done unintendedly. |
|3. ||The Company has filed shareholding pattern at BSE on 11th April 2016 for the quarter ended 31st March 2016 was not filled accurately. ||The XBRL format of filing was introduced first time on BSE due to this human error was occurred at the time of filing the data. |
|4. ||The Company has not followed the procedure as provided in the Secretarial Standard 7.0 whiling preparing the Minutes of the Annual General Meeting. ||The Resolutions of the Annual General Meeting of the Company had passed through required majority by the members of the Company through e- voting as the Scrutinizer's Report. |
RECONCILIATION OF SHARE CAPITAL AUDIT:
In compliance of circular noD&CC/FITTC/CIR-16/2002 dated 31st December2002 further amended by Circular No.CIR/ MRD/DP/30/2010 dated 6th September2010 issued by the Securities and Exchange Board of India ("SEBI")Reconciliation of Share Capital Audit has being carried out at the specified intervals bya Practicing Company Secretary and have been submitted to the Stock Exchanges where theCompany is listed within due dates.
APPRECIATION / ACKNOWLEDGEMENT:
Your Directors wish to place on record their appreciation and express their gratitudefor the contribution made by the employees at all levels but for whose hardwork andsupport your Company's achievements would not havebeen possible. The Board takes thisopportunity to express its gratitude for the valuable assistance and co-operation extendedby Government Authorities Banks Corporate Debt Restructuring (CDR) Cell FinancialInstitutions Vendors Customers Advisors and other business partners.
| ||For and on behalf of the Board |
|Date: 19th August 2017 ||Jae Ho Song ||Jung Ho Hong |
|Place: Mumbai ||Managing Director ||Whole-time Director |
| ||DIN:07830731 ||DIN:02229634 |
"ANNEXURE B" TO THE DIRECTORS REPORT
FORM NO. AOC -2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014.
Form for Disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub section (1) of section 188 of theCompanies Act 2013 including certain arms length transaction under third proviso thereto.
1. Details of contracts or arrangements or transactions not at Arm's length basis:
|Name(s) of the related party and nature of relationship ||Nature of contracts / arrangements / transactions ||Duration of the contracts / Arrangements / transactions ||Salient terms of the contracts or arrangements or Transactions including the value if any ||Justification for entering into such contracts / arrangements / transactions ||Date(s) of approval by the Board ||Amount paid as advances ||Date on which special resolution was passed in General meeting |
|- ||- ||- ||- ||- ||- ||- ||- |
2. Details of contracts or arrangements or transactions at Arm's length basis:
|Name of the Related parties and Relation ||Nature of Contract ||Terms of Contract ||Monetary Value ||Actual amount of the transaction ||Date of approval bythe Board/Members ||Amount paid as advances if any |
|E-Land Fashion India Pvt. Ltd. (Fellow Subsidiary) ||a. Purchase of goods ||a. 01.04.2015 to 30.09.2019 ||UptoRs. 30 crores p.a. ||213190411 ||30th September 2016 ||NIL |
| ||b. Corporate guarantee provided by E-Land Apparel Limited ||b. Tenure of loan (i.e. upto 30th September 2022) ||UptoRs. 400 Crores ||Corporate guarantee to be executed ||30th September 2016 ||NIL |
| ||c. Corporate guarantee received by E-Land Apparel Limited ||c. Tenure of loan (i.e. upto 30th September 2022) ||UptoRs. 60 Crores ||Corporate guarantee to be executed ||30th September 2016 ||NIL |
|E-Land World Co. Ltd. (Ultimate Holding) ||a. Sale of goods ||01.04.2015 to 30.09.2019 ||UptoRs. 70 crores p.a. ||300183223 ||30th September 2016 ||NIL |
|E-Land Asia Holdings Pte. Ltd. (Holding) ||Long Term Export Agreement ||15.03.2016 to 14.03.2026 ||UptoRs. 300 crores ||to be executed ||12th March 2016 ||631456009 |
"ANNEXURE C" TO THE DIRECTORS REPORT
Information as per Section 134(3)(m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 and forming part of the Directors' Report for the yearended 31st March 2017.
1) Conservation of Energy:
(a) Energy Conservation Measures taken by the Company:
The Company has taken various steps to reduce consumption of energy like separatemeters are being installed for effectively monitoring the Section wise energy consumption.
(b) Additional Investment and proposals if any being implemented for reduction ofconsumption of energy. Re-sizing of the motors is being done to run the motors at fullload conditions.
(c) Impact of measures (a) and (b) above for reduction of energy consumption andconsequent impact on cost of production of goods. Energy conservation measures have led toreduction in the cost of production.
(d) Total energy consumption per unit of production as per Form "A".
(e) Natural ventilation equipment installed on the sheds to conserve energy.
(f) Installed power factor control/capacitor banks to conserve energy.
(g) Minimizing idle running of various type of equipment like air conditionerssubmersible pumps lights generators compressors and ceiling fans.
(h) Hot water recovering and re-utilization to the process machines like bleachingdyeing and washing process cycles.
Form for Disclosure of Particulars with respect to Conservation of Energy.
A. Power and fuel consumption
| ||Garment |
| ||Current Year ||Previous Year |
| ||(2016 2017) ||(2015 2016) |
|1. Electricity || || |
|(a) Purchased || || |
|Unit (Lakhs) ||20.33 ||20.72 |
|Total amount (Rs. Lakhs) ||151.89 ||156.77 |
|Rate/unit ||7.47 ||7.56 |
|(b) Own generation || || |
|(i) Through diesel generator || || |
|Unit (Lakhs Ltrs) ||1.52 ||1.78 |
|Total amount (Rs. Lakhs) ||88.99 ||88.97 |
|Cost/unit ||58.43 ||49.98 |
|(ii) Through steam turbine/generator ||NIL ||NIL |
|Units || || |
|Total amount (Rs. Lakhs) || || |
|Cost/units || || |
|2. Coal (specify quality and where used) ||NIL ||NIL |
|Quantity (Tonnes) || || |
|Total amount (Rs. Lakhs) || || |
|Average rate || || |
|3. Furnace oil ||NIL ||NIL |
|Quantity (K. Ltrs.) || || |
|Total amount || || |
|Average rate || || |
B. Consumption per unit of production
| ||Garment |
|Standards (if any) ||Current Year ||Previous Year |
| ||(2016-17) ||(2015-16) |
|Products unit ||49.28 Lakhs Pieces ||58.85 Lakhs Pieces |
|Electricity (Rs.) ||3.06 / Piece ||2.66 / Piece |
|Furnace oil ||NIL ||NIL |
|Coal ||NIL ||NIL |
|Others ||NIL ||NIL |
2) Technology Absorption:
I. Research and Development (R & D):
1. Specific areas in which R & D carried out by the Company:
Product and quality improvement development new designs cost control and energyconservation. Substitution of raw material with cheaper options has been undertaken. Newprocess developments and devising new innovative products are essential to improve thebottom-line of the company. New Designs for yarn dyed fabrics and up gradation to finershirting is targeted.
2. Benefits derived as a result of the above R & D:
Product quality has improved. Cost reduction methods have been devised. Further upgradation of quality and innovation will improve the profit margins.
3. Future plan of action:
The Company continues to focus its efforts on innovations in textile developmentprocesses.
4. Expenditure on R & D:
It is not possible to segregate the expenses on R & D.
II. Technology absorption adoption and innovation:
1. Efforts in brief made towards technology absorption adaptation and innovation:
The Company has been developing in-house modifications/improvements in processtechnology in its various manufacturing sections which when found suitable areintegrated into the regular manufacturing operation.
2. Benefits derived as a result of the above efforts eg. Product improvement costreduction product development import substitution etc:
High Product quality and increased business potential
3. In case of imported technology (imported during the last 5 years reckoned from thebeginning of the financial year) following information may be furnished:
|a) Technology imported || |
|b) Year of import ||Not Applicable as no Imported Technology put to use. |
|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 || |
3) Foreign Exchange Earnings & Outgo
Total foreign exchange inflow during the year was Rs. 11111.73 Lakhs (Previous periodRs. 15307.18 Lakhs) as per audited financials of 2016-17 towards Garments.
Foreign Exchange outgo during the year towards Capital Goods was Rs. 9.43 Lakhs(Previous period Rs. 327.25 Lakhs) towards Raw material was Rs. 10.63 (Previous periodRs. 80.77) towards Consumable and spares parts was Rs. 236.56 Lakhs (Previous period Rs.589.64 Lakhs) and towards Consultancy Charges was Rs. Nil (Previous Year Rs. Nil ) andtowards foreign travel was Rs. Nil (Previous Year Rs. Nil ).
"ANNEXURE E" TO THE DIRECTORS' REPORT
The ratio of the remuneration of each director to the median employee's remunerationand other details in terms of subsection 12 of Section 197 of the Companies Act 2013 readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014
i. The ratio of the remuneration of each Director/ KMP to the median remuneration ofthe employees of the Company for the financial year 2016 2017
|Name ||Designation ||Percentage Increase ||Ratio of remuneration to the median remuneration of all the employees |
|Mr. YangweonYoo ||Managing Director ||0.00% ||13.47 |
|Mr. Kwang Hyuck Choi ||Managing Director ||54.36% ||60.12 |
|Mr. Jung Ho Hong ||Whole-time Director ||-35.95% ||25.22 |
|Mr. Byounghoon Yi ||Chief Financial Officer ||0.00% ||13.93 |
|Mr. Choi Haeoi ||Chief Financial Officer ||0.00% ||0.00 |
|Mr. AshitoshSheth ||Company Secretary ||5.93% ||13.43 |
|Mr. Sunita Kanungo ||Company Secretary ||0.00% ||1.26 |
Apart from the above Directors the other directors are non-executive & independentand they do not receive any remuneration and hence the details are not furnished.
ii. The median remuneration of employees of the Company during the financial year wasRs. 116616
iii. Percentage increase in the median remuneration of employees in the financial year2016 2017 8.13%
iv. The number of permanent employees on the rolls of company: 3517.
v. The explanation on the relationship between average increase in remuneration andcompany performance:
The increase in remuneration is linked to the performance of the company as a wholethe performance of the concerned division performance of the employees and other factorslike industry trends and economic environment.
vi. Comparison of the remuneration of each of the Key Managerial Personnel against theperformance of the Company for the financial year 2016 2017
| || ||(Rs. in lakhs) |
|Remuneration paid to Key Managerial Personnel (to MD WTD CFO & CS) ||Total Turnover of the Company ||Net Loss of the Company |
|148.60 ||21534.10 ||3835.88 |
vii. Variations in the market capitalisation of the company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease over decrease in the market quotations of the shares of the company in comparisonto the rate at which the company came out with the last public offer in case of listedcompanies:
|Particulars ||2015 2016 ||2016 2017 |
|Market capitalization ||179.96 Crore ||106.06 crore |
|PE Ratio ||(9.64) ||(2.77) |
|Market Rate ||37.50 ||22.10 |
|EPS ||(3.89) ||(7.99) |
|No of Shares ||47990469 ||47990469 |
viii. Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
The percentage increase in the salaries of employees other than the managerialpersonnel in the last financial year is 8.13% as against an increase of 54.36% in thesalary of the Managing Director (managerial personnel as defined under the Act).
ix. The key parameters for any variable component of remuneration availed by thedirectors:
x. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year:
xi. Affirmation that the remuneration is as per the remuneration policy of the company:
It is affirmed that the remuneration paid is as per the Remuneration Policy forDirectors Key Managerial Personnel and other employees adopted by the Company.
xii. Details of the employees employed for full year or part of the year havingremuneration of Rs. 1.02 Crores p.a. where employed for the full year:
|Sr. No. ||Particulars ||Mr. Park In Yong |
|1 ||Designation of the Employee ||Manager |
|2 ||Remuneration received ||10483927 |
|3 ||Nature of employment whether contractual or otherwise ||Employee |
|4 ||Date of commencement of employment ||01/08/2012 |
|5 ||Age of such employee ||37 Yrs |
|6 ||Qualifications and experience of the employee ||From 2004 yr trained in Eland group as MDP managing Sourcing Merchandising and Strategy & Planning manages under Eland Group CPO. |
| || ||Qualification : |
| || ||B.A(Philosophy Psychology) |
| || ||Korea University |
|7 ||Last employment held by such employee before joining the company ||Eland world korea |
|8 ||Percentage of equity shares held by the employee in the company within the meaning of clause (iii) of sub-rule (2) above ||Non |
|9 ||Whether any such employee is a relative of any director or manager of the company and if so name of such director or manager ||Non |
Details of the employees employed for the part of the year and having salary of notless than Rs. 5 lakhs per month:
Details of the employees employed for the full year or part of the year was receipt ofremuneration in that year which in the aggregate or as the case may be at a rate which inthe aggregate is in excess of that drawn by the managing director or whole time directoror manager and holds by himself or along with his spouse and dependent children not lessthan 2% of the equity shares of the Company: