Nahar Industrial Enterprises Ltd.
|BSE: 519136||Sector: Industrials|
|NSE: NAHARINDUS||ISIN Code: INE289A01011|
|BSE LIVE 15:28 | 21 Nov||96.05||
|NSE 15:29 | 21 Nov||96.30||
|Mkt Cap.(Rs cr)||383|
|Mkt Cap.(Rs cr)||382.66|
Nahar Industrial Enterprises Ltd. (NAHARINDUS) - Director Report
Company director report
Your directors have pleasure in presenting their 32nd Annual Report togetherwith the audited financial statements for the financial year ended 31st March2016.
1. FINANCIAL RESULTS
The Company's financial performance for the year ended 31st March 2016 issummarised below:
(Rs. in Lacs)
2. PERFORMANCE REVIEW
We would like to inform you that in view of the Accounting Standard (AS)-17 (SegmentReporting) the Company operates in two main segments i.e. Textile and Sugar.
i) Textile: The textile division accounts for 91.12% (including inter-segment)of the total turnover of the company for the year ended 31st March 2016. TheBusiness wise performance of this segment is as under:
a. Yarn: The Company has produced 73245 MTs of yarn as against 69890 MTs inthe previous year.
b. Fabric: The Company has produced 755.59 lacs meters of fabrics (both grey andprocessed) as against 702.33 lacs meters in the previous year.
The total turnover of this segment (Yarns and Fabrics) has decreased to Rs. 1611crores as against Rs. 1666.85 crores in the previous year showing a decrease of 3.35%.
ii) Sugar: The Company has produced 435350 Qtls. of sugar as against 393430Qtls. in the previous year. The total turnover of this segment is Rs. 156.18 crores asagainst Rs. 119.58 crores in the previous year showing an increase of 30.61%.
During the year under review your Company has performed reasonably well and theperformance of the Company was quite satisfactory as compared to previous year. During theyear the company has achieved operational income of Rs. 1782.64 crores as against Rs.1807.40 crores in the previous year. The company has earned Profit before finance costDepreciation and tax of Rs. 223.49 crores as against Rs. 204.88 crores in the previousyear. After providing for Finance Cost of Rs. 77.63 crores (previous year Rs. 104.88crores) Depreciation of Rs. 89.97 crores (previous year Rs. 135.24 crores) and TaxExpenses of Rs. 13 crores [previous year Rs. (7.23) crores] (inclusive of Deferred Tax)the Profit for the year comes to Rs. 42.89 crores as against loss of Rs. 28.01 crores inthe previous year.
3. TRANSFER TO RESERVES
Your Company has transferred Rs. 38.10 Crore to the General Reserve out of profitsavailable for appropriation after making a provision for dividend amounting to Rs. 4.79Crore (inclusive of Dividend Distribution Tax).
4. CREDIT RATING
The rating committee of ICRA Limited has given long term rating as [ICRA] A-(pronounced ICRA A minus). The outlook on the long term rating is stable. The ratingcommittee of ICRA has also given short term rating as [ICRA] A2+ (pronounced ICRA A twoplus).
The Board of Directors of your company has proposed dividend @ 10% (i.e. Rs. 1/- pershare) on the Paid-up Equity Share Capital of the Company for the Financial Year 2015-16.The dividend will be paid subject to the approval by the shareholders in the forthcomingAnnual General Meeting.
6. SHARE CAPITAL
The paid up Equity Share Capital as at 31st March 2016 was Rs.398351410/- divided into 39835141 Equity Shares of the face value of Rs. 10/- each.During the year under review the Company has not issued shares with differential votingrights nor has granted any stock options or sweat equity. As on 31st March2016 none of the Promoters / Directors of the Company hold instruments convertible intoequity shares of the Company.
During the year the Company has not accepted any deposit from the public. As suchthere are no outstanding deposits within the meaning of Section 73 of the Companies Act2013 read with the Companies (Acceptance of Deposits) Rules 2014.
8. PARTICULARS OF LOANS GUARANTEES OR INVESTMENT BY THE COMPANY
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Financial Statements.
9. STATUS OF DISTILLERY PROJECT
As the members are aware that the Company was diversifying its business by installing adistillery unit at Village Salana Jeon Singh Wala Tehsil Amloh District Fatehgarh Sahib.However because of strategic reason the Company has abandoned this project.
10. MATERIAL CHANGES AFFECTING FINANCIAL POSITION OF THE COMPANY
There were no material changes and commitments affecting the financial position of theCompany which have occured between the end of financial year to which the financialstatement relates and the date of this report.
Appointment and Change in Directors
Sh. Narayan Dass Jain (DIN: 00493334) a Non Executive Director of the Companywho was associated with the Company since 30.04.1999 had resigned from the directorship ofthe Company w.e.f. 11.08.2015. The Board had placed on record its appreciation for theservices rendered by him during his tenure as a director.
During the year under review Sh. Navdeep Sharma (DIN: 00454285) was appointedas an Non- Executive Director whose appointment was regularized by the Company in its 31stAnnual General Meeting held on Wednesday 30.09.2015.
In accordance with the provisions of Section 152 of the Companies Act 2013 andthe Company's Articles of Association Sh. Dinesh Gogna (DIN: 00498670) and Sh. NavdeepSharma (DIN: 00454285) Directors of the Company will be retiring by rotation at theforthcoming Annual General Meeting and being eligible offer themselves for re-appointment.
Declaration by Independent Directors Necessary declaration has been obtained fromall Independent Directors under sub-section (6) of Section 149 of the Companies Act 2013.
Number of Meetings of the Board During the year four Board Meetings were convenedand held on 30.05.2015 12.08.2015 14.11.2015 & 13.02.2016. The details thereof arealso given in the Corporate Governance Report. The intervening gap between the meetingswas within the period prescribed under the Companies Act 2013.
Pursuant to the provisions of Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company has devised a policy forperformance evaluation of the Board its committees and all the directors individually asper the criteria laid down by the Nomination and Remuneration Committee of the Company.The manner of evaluation is stated in the Corporate Governance Report forming an integralpart of this report.
Independent Directors Meeting
During the financial year 2015-16 the Independent Directors met on 5.12.2015inter-alia to discuss:-
(i) The performance of Non-Independent Directors and the Board as a whole;
(ii) The performance of the Chairman of the Company taking into account the views ofExecutive and Non Executive Directors and
(iii) To assess the quality quantity and timeliness of flow of information between thecompany management and the board that is necessary for the board to effectively andreasonably perform their duties.
12. DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134(3)(c) and (5) of the Companies Act 2013:-
a) that in the preparation of the Annual Accounts for the year ended on 31st March2016 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
b) that the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2016and of the profit of the Company for the year ended on that date;
c) 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;
d) that annual accounts have been prepared on a going concern basis;
e) that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f) that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
13. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is included in this Report as Annexure-A andforms an integral part of this Report.
14. RELATED PARTY TRANSACTIONS
During the financial year under review all transactions entered into with Relatedparties as defined under the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 were in the ordinary course of business and areat arm's length basis. The company has not entered into any contract or arrangement withRelated parties / Group companies other than in ordinary course of business. The detailsof Related Party Transactions are placed before the Audit Committee for its review andapproval on quarterly basis. These transactions were entered into as per the Company'sPolicy on Related Party Transactions and are approved by the Audit Committee Board andalso by Shareholders. The company's policy on Related Party Transactions is available atthe weblink: www.owmnahar.com/nahar_ie/pdf/RPT_Policy.pdf.The details of Related Parties transactions are given in Note No. 37 of the Notes toFinancial Statements. Pursuant to the provisions of section 134(3) Form AOC-2 is annexedherewith in Annexure-B.
15. AUDIT COMMITTEE
The Company has constituted an Audit Committee pursuant to Section 177(8) read withRule 6 of the Companies (Meetings of the Board and its Powers) Rules 2014 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 Presently the AuditCommittee consists of Sh. Dinesh Gogna and Dr. (Mrs) Harbhajan Kaur Bal as Members and Dr.Vijay Asdhir is the Chairman of the Audit Committee. The detailed information regardingAudit Committee and its terms of reference is given in Corporate Governance Report formingan integral part of the Directors Report.
16. RISK MANAGEMENT
The Company has laid down a Risk Management Policy and identified threat of such eventswhich if occurs will adversely affect the ability of company to achieve its objectives.Evaluation of business risk and managing the risk has always been an ongoing process inyour company. The Audit Committee has also been delegated the responsibility forassessment mitigation monitoring and review of all elements of risks which the Companymay be exposed to. The Board also reviews the risk management and minimization procedures.
17. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Board adopted a Vigil Mechanism/ Whistle Blower Policy as per SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and section 177 of theCompanies Act 2013 to report genuine concerns or grievances about unethical behavior ofemployees actual or suspected fraud or violation of the Company's Code of Conduct. TheCompany's Vigil mechanism/ Whistle Blower Policy is available at the Company's websitei.e. www.owmnahar.com.
18. INTERNAL FINANCIAL CONTROL
The Company is having adequate internal financial control systems and procedures whichcommensurate with the size of the Company. The Company is having Internal Audit Departmentwhich ensures optimal utilization and protection of Company's resources. The InternalAuditors monitors and evaluate the efficiency and adequacy of internal control systems inthe Company its compliance with operating systems accounting procedures and also ensuresthat the internal control systems are properly followed by all concerned departments ofthe Company. Significant audit observations and corrective actions thereon are presentedto the Audit Committee of the Board. The Company has engaged an independent agency toaccess the adequacy of the existing internal financial controls and suggest means forfurther strengthening the same.
19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators / Courts thatwould impact the going concern status of the Company and its future operations.
20. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted a Corporate Social Responsibility Committee of the Board inaccordance with section 135 of the Companies Act 2013. The Company has adopted a CSRPolicy and undertaking CSR Program/ Projects along with Group Companies under one umbrellai.e. through Oswal Foundation (OSF) which is a registered society framed in 2006 havingits charitable objects in various fields. The CSR Policy of the Company has been placed onthe Company's website at web-link
21. NOMINATION & REMUNERATION POLICY
The Board has on the recommendation of Nomination and Remuneration Committee framed apolicy for appointment and remuneration of Directors Key Managerial Personnel and SeniorManagement of the Company. This Policy also lays down criteria for determiningqualifications positive attributes independence of directors and other matters providedunder section 178 of the Companies Act 2013. The Nomination and Remuneration policy ofthe Company is elaborated in the Corporate Governance Report forming an integral part ofthis report.
i) Statutory Audit & Auditor's Report
M/s. Raj Gupta & Co. Chartered Accountants Auditors of the Company shall retireat the conclusion of the forthcoming Annual General Meeting and being eligible offerthemselves for re- appointment. They have confirmed their eligibility under Section 141 ofthe Companies Act 2013 and Rules framed there under for re-appointment as Auditors of theCompany. As required under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the auditors have also confirmed that they hold a valid certificateissued by the Peer Review Board of The Institute of Chartered Accountants of India. TheAuditor's report on the accounts of the Company is self-explanatory and requires nocomments.
ii) Cost Auditor & Cost Audit Report
Pursuant to Section 148 of the Companies Act 2013 read with Companies (Cost Records& Audit) Amendment
Rules 2014 the cost audit records maintained by the Company in respect of itstextiles and sugar segments are required to be audited. Your Directors had on therecommendation of the Audit Committee appointed M/s. Ramanath Iyer & Co. CostAccountants New Delhi to audit the cost accounts of the Company for the financial year2015-16. The cost audit report for the financial year 2014-15 was filed with the Ministryof Corporate Affairs on 26.09.2015. As required under the Companies Act 2013 theremuneration payable to the cost auditor is required to be placed before the Members in ageneral meeting for their ratification. Accordingly a resolution seeking membersRs.ratification for the remuneration payable to M/s. Ramanath Iyer & Co. CostAccountants is included in the Notice convening the Annual General Meeting.
iii) Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethere under the Company had appointed M/s. P.S. Bathla & Associates a firm ofCompany Secretaries in Practice (C.P. No. 2585) to undertake the Secretarial Audit of theCompany. The Secretarial Audit Report is attached as Annexure-D and forms anintegral part of this Report. There is no secretarial audit qualification for the yearunder review.
23. KEY MANAGERIAL PERSONNEL
As per the provisions of Section 203 of the Companies Act
2013 Sh. Kamal Oswal - Vice Chairman-cum-Managing Director Sh. Bharat Bhushan Gupta -Chief Financial Officer and Sh. Mukesh Sood- Company Secretary are the key managerialpersonnel of the Company.
24. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5(1) 5(2) & 5(3)of Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 (asamended upto date) in respect of employees of the Company forming part of theDirectorsRs. Report for the year ended 31st March 2016 is given in Annexure-E tothis Report.
25. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of Companies (Accounts) Rules
2014 is annexed herewith as Annexure-F.
26. CORPORATE GOVERNANCE REPORT
Your Company continues to follow the principles of good corporate governance. TheCorporate Governance Report along with auditor's certificate regarding compliance of theconditions of corporate governance as stipulated in SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 confirming compliance is attached herewith as Annexure-Gand forms part of this Report.
27. Subsidiary/ Associates/ Consolidated Financial statements
As on 31st March 2016 the Company had four associate companies i.e. Cotton CountyRetail Limited J L Growth Fund Limited Vardhman Investment Limited and Atam VallabhFinanciers Limited the accounts of which have been consolidated in accordance with theapplicable Accounting Standards and pursuant to Section 129(3) of the Companies Act 2013read with Companies (Accounts) Rules 2014. The Audited Consolidated Financial Statementis provided in the Annual Report. A statement containing salient features of financialstatements of Associate Companies in Form AOC-1 is annexed with the financial statements.The financials of the Associate Companies for 2015-16 are given below:
Cotton County Retail Limited (CCRL)
The Company holds 49.99% equity shares of CCRL. During the year the Revenue fromOperations of the Company was Rs. 2205.30 Lacs as compared to Rs. 3668.91 Lacs in theprevious year. The Company has incurred a net loss of Rs. 782.78 Lacs as against Rs. 133Lacs in the previous year.
Atam Vallabh Financers Limited (AVFL)
The Company holds 36.85% equity shares of AVFL. During the year the Revenue fromOperations of the Company was Rs. 35.36 Lacs as compared to Rs. 44.62 Lacs in the previousyear. The Company has earned a net profit of Rs. 26.79 Lacs as against Rs. 36.39 Lacs inthe previous year.
Vardhman Investment Limited (VIL)
The Company holds 47.17% equity shares of VIL.
During the year the Revenue from Operations of the Company was Rs. 33.23 Lacs ascompared to Rs. 49.75 Lacs in the previous year. The Company has earned a net profit ofRs. 24.83 Lacs as against Rs. 41.79 Lacs in the previous year.
J L Growth Fund Limited (JLGF)
The Company holds 41.10% equity shares of JLGF. During the year the Revenue fromOperations of the Company was Rs. 29.49 Lacs as compared to Rs. 67.21 Lacs in the previousyear. The Company has earned a net profit of Rs. 25.31 Lacs as against Rs. 69.38 Lacs inthe previous year.
During the year Amloh Industries Limited was incorporated as a wholly owned subsidiaryas special purpose company and the said company was also ceased to be the subsidiary ofthe Company. There are no financials to be reported.
28. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company is committed to create and maintain an atmosphere in which employees canwork together without any fear of exploitation. During the financial year 2015-16 thecompany has not received any complaints on sexual harassment and hence no complaintremains pending as on 31 March 2016.
29. INDUSTRIAL RELATIONS
Industrial relations throughout the year continued to be very cordial and satisfactory.
Your directors would like to express their appreciation for the assistance andco-operation received from financial institutions banks and shareholders. They also placeon record their appreciation for the co-operation of employees at all levels.