Your Directors have pleasure in presenting the Thirty Sixth Annual Report on theaffairs of the company for the financial year ended 31st March 2016.
Your Company's Financial Performance during the year is summarised below:
(Rs. In crores)
|PARTICULARS ||CURRENT YEAR ||PREVIOUS YEAR |
|Profit for the year before ||180.69 ||145.40 |
|TAX & DEPRECIATION || || |
|Less: Depreciation ||101.07 ||130.56 |
|Provision for Taxation ||29.75 ||3.35 |
|Provision for Deferred Tax ||- 1.50 ||-8.88 |
| ||129.32 ||125.03 |
|Profit/Loss after tax ||51.37 ||20.37 |
|Adjustment of Income Tax of Earlier years ||1.48 ||0.16 |
|Amount available for appropriation ||49.89 ||20.21 |
|APPROPRIATION || || |
|Proposed Dividend ||5.41 ||3.61 |
|Tax on Distributed profits ||1.10 ||0.73 |
|Transfer to General Reserve ||40.00 ||15.00 |
|Balance at the end ||3.38 ||0.87 |
| ||49.89 ||20.21 |
OPERATIONAL REVIEW AND STATE OF AFFAIRS
We would like to inform you that company's business activities falls under singlesegment i.e. "TEXTILE" as such disclosure requirements of Accounting StandardAS 17 issued by the Institute of Chartered Accountants of India New Delhi are notapplicable.
We are pleased to inform you that inspite of a challenging year for Textile Industrycompany has been able to sustain its operational performance. The slackness in Globaldemand coupled with exchange rate fluctuations severely affected company's topline and itcould achieve a revenue of Rs. 2038.25 crores as against Rs. 2149.61 crores showing amarginal decline of 5.18 %. Likewise the Export at Rs. 1277.70 crores has also shown adecline of 8.29% as compared to the previous year. Inspite of fall in revenue the companyhas improved its financial performance and earned a profit before tax and depreciation ofRs.180.69 crores as against Rs.145.40 crores showing an impressive increase of 24.27% overthe the previous year. After providing depreciation of Rs. 101.07 crores and provision fortax of Rs. 29.75 crores and provision for Deferred Tax of Rs. -1.50 crores the companyearned a net profit of Rs.51.37 crores. TRANSFER TO RESERVE
After appropriations of profit (as per details mentioned
under the head Financial Performance) an amount of Rs. 40.00 crores has beentransferred to General Reserve thereby increasing company's Reserves to Rs. 505.58 Croresas on 31st March 2016. Besides an amount of Rs. 3.38 Crores is proposed to be retainedin surplus account thereby increasing the balance of Surplus account to Rs. 55.33 Crores.
Your Directors are pleased to recommend a dividend @ 30% (i.e. Rs.1.50 per equityshares of Rs.5/- each) on the equity share capital for the financial year ended 31stMarch 2016. The total appropriation (excluding dividend distribution tax) for the currentyear is Rs. 5.41 crores as against Rs. 3.61 crores in the previous year.
The dividend if approved at the forthcoming Annual General Meeting will be paid outof the profits of the company to all those shareholders whose names shall appear in theRegister of Members on 9th September 2016 or Register of beneficial Owners maintained bythe Depositories as at the close of 9th September 2016
INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of section 205C of the Companies Act 1956 the company hastransferred an amount of Rs.1478751.00 (Rs. Fourteen Lacs Seventy Eight Thousand SevenHundred Fifty One Only) being the amount of unclaimed dividend for the year 2007-2008 tothe Investor Education and Protection Fund. Further unpaid dividend for the year2008-2009 shall be transferred to the Investor Education and Protection Fund pursuant toprovisions of the Companies Act in November 2016. The Company has also sent letter/noticeto the shareholders informing them to claim the unclaimed dividend from the Company beforetransferring the same to the Investor Education and Protection Fund.
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors have submitted their declaration to the Board that theyfulfill all the requirements as stipulated in section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the rules made thereunder.
APPOINTMENT OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of section 152(6) of the Companies Act 2013 and Article 117of Article of Association of the Company Sh. Jawahar Lal Oswal (DIN 00463866) and Sh.Satish Kumar Sharma (DIN 000402712) will be retiring by rotation at the ensuing AnnualGeneral Meeting and being eligible offer themselves for re-appointment. The Boardrecommend their re-appointment to the members of the company at the ensuring AnnualGeneral Meeting.
Besides the period of office of Sh. Dinesh Oswal Managing Director of the Companywho was appointed for a period of five years is expiring on 31st December 2016. TheBoard having regard to the overall growth of the Company under his able and dynamicleadership and on the recommendation of Nomination and Remuneration Committee has decidedto reappoint him (subject to approval of shareholders) as Managing Director for a furtherperiod of five years commencing from 1st January 2017. The resolution for the same isbeing proposed for your approval in the accompanying Notice of ensuing Annual GeneralMeeting.
Pursuant to the provisons of Section 203 of the Companies Act 2013 Mr. Dinesh OswalManaging Director Mr. Anil Garg Chief Financial Officer and Mr. Brij Sharma CompanySecretary are Key Managerial Personnel (hereinafter referred as KMP) of the company andthere has been no change in the KMP since the last fiscal year.
The provisions of the Companies Act 2013 and Regulation 17 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 mandate that a Formal AnnualEvaluation is to be made by Board of its own performance and that of its Committee andindividual Directors. Schedule IV of the Companies Act 2013 states that performanceevaluation of the Independent Director shall be done by Directors excluding the Directorbeing evaluated.
The Board carried out a formal annual performance evaluation as per thecriteria/framework laid down by the Nomination and Remuneration Committee of the companyand adopted by the Board. The evaluation was carried out through a structured evaluationprocess to evaluate the performance of individual directors including the Chairman of theBoard. They were evaluated on parameters such as their education knowledge experienceexpertise skills behavior leadership qualities level of engagement and contributionindependence of judgment decision making ability for safeguarding the interest of theCompany stakeholders and its shareholders. The performance evaluation of the IndependentDirectors was carried out by the entire board except the participation of concernedIndependent Director whose evaluation was to be done. The performance evaluation of theChairman and the Non Independent Directors was carried out by the Independent Directors.The Board was satisfied with the evaluation process and approved the evaluation resultsthereof.
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosures Requirements) Regulations 2015. As per the saidRegulations the listed companies are required
to formulate certain policies. As a good corporate entity the company has alreadyformulated several corporate policies and the same are available on the company's websitei.e. www.owmnahar.com as per the requirements of Regulations. The said policies arereviewed periodically by the Board to make them in compliance with the new Regulations/requirements.
The company has adopted certain policies the details of which are given hereunder:
|Name of the Policy ||Brief Description |
|Appointment & Remuneration Policy ||Pursuant to the provisions of Section 178 of the Companies Act 2013 read with SEBI (Listing Obligations and Disclosure Requirements) Regul-ations 2015 the Board of Directors in their meeting held on 12th November 2014 approved the Policy for Appointment and Remuneration of Directors Key Managerial Personnel and other employees as recommended by Nomination and Remuneration Committee. |
|Corporate Social Responsibility Policy ||Pursuant to the provisions of Section 135 of the Companies Act 2013 read with Companies (Corporate Social Responsibility Policy) Rules 2014 the CSR Committee formulated the CSR Policy which was adopted by the Board. The CSR Policy outlines the various programmes/projects /activities to be undertaken by the company as laid down in Schedule VII of the Companies Act 2013. |
|Whistle Blower Policy ||Pursuant to the provisions of Section 177 of the Companies Act 2 01 3 comp an y h as formulated and adopted Vigil Mechanism/Whistle Blower Policy for its directors and employees. The aim of the policy is to provide a channel to the directors and employees to report their genuine concerns about unethical behavior actual or suspected fraud or violation of the code of conduct. |
|Policy on Materiality of Related Parties Transactions and Dealing with Related Parties Transactions ||Pursuant to the requirements of regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has approved a policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions. The policy regulates the transactions between the company and its group companies and related parties. The Policy has been uploaded on the Company's website and can be accessed at www. owmnahar. com/spin ning/p df/RPT /NAHAR/SPINNING.pdf |
|Insider Trading Policy ||To provide the framework for dealing in the securities of the company by the Insiders Board has approved and adopted the following Codes in its Meeting held on 30.05.2015 under SEBI (Prohibition of Insider Trading) Regulations 2015: |
| ||i. Code of practices and procedures for fair disclosure of unpublished price sensitive information. |
| ||ii. Code of conduct to regulate monitor and report trading by insiders. |
| ||The Codes help to regulate trading in securities by the Directors and designated employees of the Company. The Codes require pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company's shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. |
|Policy for Preservation of documents ||Board of directors in their meeting held on 10th February 2016 has approved and adopted the policy for Preservation of documents. The Policy segregates the documents to be preserved permanently and documents to be preserved at least for a period of eight years as per the requirements of applicable laws. |
|Archival Policy ||Pursuant to the requirements of Regulations 30(8) of the SEBI (Listi n g Obl ig ation s an d Disclosure Requirements) Regulations 2015 the Board has approved and adopted the Archival Policy in its Meeting held on 10th February 2016. The Policy ensures protec-tion maintenance and archival of Company's disclosures documents and records that are placed on Company's website i.e. www.owmnahar.com |
|Board Diversity Policy ||The Board of Directors in their Meeting held on 12th November 2014 has approved and adopted the Board Diversity Policy as per the recommendations of the Nomination and Remuneration Committee. The policy envisages diversification of Company's Board in respect of age knowledge experience and expertise. |
APPOINTMENT AND REMUNERATION POLICY
The Board on the recommendation of the Nomination and Remuneration Committee has frameda policy for Appointment and Remuneration of Directors Senior Management and otheremployees as provided under section 178(3) of the Companies Act 2013. The Objective ofthe Policy is to have an appropriate mix of Executive Non-Executive and IndependentDirectors. The present Board consist of ten members. Sh. Jawahar Lal Oswal isnon-executive Chairman. Sh. Dinesh Oswal is a Managing Director. There are four NonExecutive Directors and five Independent Directors out of which one director namely; Dr.(Mrs.) H.K. Bal as woman director on the Board. The Company's Policy of Appointment andRemuneration includes criteria for determining Qualification Positive AttributesIndependence of Directors and other matters as required under sub section 3 of Section178 of the Companies Act 2013. The Policy also laid down the criteria for determining theremuneration of directors key managerial personnel and other employees. The Nomination& Remuneration Policy of the company is available on the Company's website and can beaccessed at www.owmnahar.com/spinning/pdf /NSMLAPPOINTMENTANDREMUNERATIOPOLICY.p df. Therehas been no change in the Policy since the last fiscal year.
SEPARATE MEETING OF INDEPENDENT DIRECTORS
The company's Independent Directors held their meeting on 04.12.2015 without theattendance of Non Independent Directors and members of the management. All IndependentDirectors were present at the meeting. At the meeting they:
I. Reviewed the performance of non-Independent directors and the Board as a whole;
ii. Reviewed the performance of the Chairperson of the Company taking into account theviews of Executive Directors and Non- Executive Directors;
iii. Assessed the quality and timeliness of the flow of information between thecompany's Management and the Board which is necessary for the Board to effectively andreasonably perform their duties.
FAMILIARISATION PROGRAMME FOR BOARD MEMBERS
The Company at the time of appointing a Director issues a formal letter of appointmentwhich inter alia explains the role functions duties and responsibilities expected fromhim/her as a Director of the Company. All Independent Directors are provided with allpolicies/ Guidelines as framed by the Company under various statutes and ListingAgreement/ SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 tofamiliarize them with Company's procedure and practices. Further to update them onregular basis the Company provides copies of all amendments in Corporate Laws CorporateGovernance Rules and Listing Agreement/SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The company also made arrangement to apprise andfamiliarize the directors regarding the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 which came into effect w.e.f 1st December2015. They werealso informed regarding the Companies Amendment Bill 2016 which is introduced in theParliament. The details of the Company's policy on Familiarisation Programs forIndependent Directors is posted on the website of the company and can be assessed athttp://www.owmnahar.com/spinning/ pdf/familiarization\program\NSML001.pdf
NO. OF BOARD MEETINGS
During the year under review the Board of Directors met five times i.e. 30th May2015 5th August 2015 10th November 2015 23rd December 2015 and 10th February 2016with a predefined agenda circulated well in advance. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
Your company is engaged in the Manufacture & Exports of Yarns and knitted garments.Because of nature of Industry sometimes sale/purchase/fabrication job transactions takesplace between the Group Companies (which are public limited companies) in the ordinarycourse of business on Arm's length basis. The transactions entered into with the groupcompanies during the year under the review has been given in the Notes to the FinancialStatements. All the transactions are on Arm's length basis and in the ordinary course ofthe business. The Company has not entered into any contract or arrangement with therelated parties as referred in Section 188(1) of the Companies Act 2013. Thus therequirement for disclosure of particulars of contracts or arrangement with related partiesreferred to in Section 188(1) is not applicable. However as per Company's policy all thetransactions with the Group Companies are placed before the Audit Committee as well as theBoard for their information and approval.
We also wish to inform you that there are no material related party transactions madeby the Company with Promoters Directors Key Managerial Personnel or other designatedpersons which may have a potential conflict with the interest of the Company at large.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATEAND THE DATE OF THE REPORT
There are no material changes and commitments affecting the financial position of theCompany occured between the end of the financial year to which these financial statementsrelate and the date of this report.
The paid up equity share capital of the Company as on 31st March 2016 is Rs. 1803.27Lacs. During the year under review Company has neither issued any shares withdifferential rights as to dividend voting or otherwise nor granted any stock options orsweat equity under any scheme.
SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant or material orders were passed by the Regulators or Courts or T ribunalswhich impact the going concern status and may affect Company's operations in future.
PARTICULARS OF LOANS INVESTMENTS GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT2013
Details of Loans Investments and Guarantees covered under the provisions of Section186 of the Companies Act 2013 form part of the Notes in the Financial Statements providedin the Annual Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per the provisions of section 135 of the Companies Act 2013 every company havingnet worth of rupees five hundred crore or more or turnover of rupees one thousand crore ormore or a net profit of rupees five crore or more during any financial year is required tospend in every financial year at least two percent of the average net profits made duringthe three immediate preceding financial years on CSR activities. Accordingly company wasrequired to spend Rs.119.25 Lacs towards CSR activities during the year under review.
As reported in our last report company adopted CSR Policy and decided to undertake cSractivities in collaboration with Group Companies under one umbrella i.e. through OswalFoundation which is a Registered Society formed in 2006 having its charitable objects invarious fields. The details of the CSR policy are available on the company's website i.e.www.owmnahar .com
We are also pleased to inform that company has utilized Rs. 120.40 Lakhs bycontributing the same to Oswal Foundation for undertaking CSR activities. The Foundationhas undertaken various CSR projects in the field of promoting education' by adoptingGovernment Schools situated at Ludhiana & SaS Nagar in the state of Punjab.They also undertook the project to maintain the quality of soil and water on SidhwanCanal Ludhiana for environmental sustainability the Foundation reconstructed theroundabout and beautified the Fountain Chowk in the main part of the Ludhiana city .
The disclosure relating to the CSR activities pursuant to section 134(3) of theCompanies Act 2013 read with Rule 9 of the Companies(Accounts) Rules 2014 and Companies(Corporate Social Responisibility) Rules 2014 is annexed hereto as "AnnexureI" and forms part of this Report.
As required under Section 177 of the Companies Act 2013 the Board of Directors havealready constituted Audit Committee consisting of three Non Executive Directors namely;Prof. K.S. Maini as Chairman Sh. Dinesh Gogna and Dr. S.K. Singla as members. Mr. BrijSharma is the Secretary of the Company. The Committee held five meetings during the yearunder review.
Pursuant to the provisions of Section 177(9) of the Companies Act 2013 read withCompanies (Meetings of Board and its Powers) Rules 2013 and Regulation 22 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Companyestablished a Vigil Mechanism process as an extension of Company's Code of Conduct wherebyany employee directors customers vendors etc. can report the genuine concerns orgrievances to the members of the Audit Committee about unethical behaviour actual orsuspected fraud or violation of Company's Code of Conduct so that appropriate action canbe taken to safeguard the interest of the Company. The Mechanism also provides foradequate safeguards against victimisation of persons who uses such mechanism. Themechanism provides direct access to the chairperson of the Audit Committee in appropriateor exceptional cases. The Whistle Blower Policy/Vigil Mechanism is also posted onCompany's Website. The Company has a dedicated e-mail address i.e. firstname.lastname@example.org for reporting the genuine concerns.
The Audit Committee regularly reviews the working of the Mechanism. No complaint wasreceived during the year under review.
SUBSIDIARIES JOINT VENTURE OR ASSOCIATES COMPANY
The Company does not have any subsidiaries joint venture or associates company duringthe year under the review.
We are pleased to inform that the Credit Rating Information Services of India Ltd.(CRISIL) vide their letter dated 22nd March 2016 has re-affirmed the credit rating"A" for long term debt instruments/ facilities and "A1" for the shortterm debt instruments/ facilities of the Company. The rating "A" indicatesstable and rating "A1" indicates very strong degree of safety regarding timelypayment of the financial obligations.
The Ministry of Corporate Affairs (MCA) has taken a "Green Initiative in theCorporate Governance" by allowing paperless compliances by the companies. Further asper the provisions of Companies Act 2013 read with Companies (Management andAdministration) Rules 2014 the Company may send financial statements and other documentsby electronic mode to its members. Your Company has decided to join the MCA in itsenviornmental friendly initiative.
Accordingly henceforth company propose to send documents such as notices of GeneralMeetings Annual Report and other communications to its shareholders via electronic modeto the registered e-mail addresses of the shareholders. To support this green initiativeof the Government in full measure shareholders are requested to register/update theirlatest e-mail addresses with their depository Participant(D.R) with whom they are havingDemat Account or send the same to the Company via e-mail at:- email@example.com orgredressal firstname.lastname@example.org. We solicit your valuable cooperation and support in ourendeavor to contribute our bit to the Enviornment.
To steamline the provisions of the Listing Agreement and its better enforceability theSecurities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI (ListingObligations and Disclosures Requirements) Regulations 2015. The said Regulation becameeffective from 1st December 2015. In compliance of the said Regulations the company hasentered into Listing Agreement with The National Stock Exchange of India Ltd and the BSELtd on 10th February 2016.
LISTING OF SECURITIES
The securities of the company are presently listed on the following Stock Exchanges:.
i. The BSE Ltd. 25th Floor Phiroze Jeejeebhoy Towers Dalal StreetMumbai.
ii. The National Stock Exchange of India Ltd. Exchange Plaza 5th FloorPlot No.C/1 G- Block Bandra Kurla Complex Bandra (E) Mumbai
The Company has paid listing fee to both the Stock Exchanges for the financial year2016-17.
DEMATERIALISATION OF SECURITIES
As the members must be aware that company's securities are tradable compulsorily inelectronic form w.e.f. 21st March 2000. Your Company has already established connectivitywith both the Depositories i.e. National Securities Depository Limited (NSDL) and CentralDepository Services (India) Limited (CDSL) to facilitate the holding and trading ofsecurities in electronic form. As on date 95.27% of the total Equity Share Capital of theCompany has been dematerialised. The shareholders who have not gone in fordematerialisation of shares till date are requested to opt for dematerialisation of theshares at the earliest.
Further as per SEBI circular no. D&CC/FITTC/CIR- 15/2002 dated 27th December 2002Company has appointed M/s Alankit Assignments Ltd. as Registrar for Share Transfer andElectronic Connectivity. Accordingly all the shareholders Investors Members of the StockExchanges Depository Participants and all other concerned are requested to send allcommunication in respect of Share Transfer Demat/Remat Change of Address etc. to ourRegistrar at below mentioned address:
M/s Alankit Assignments Limited
(Unit: Nahar Spinning Mills Limited)
Alankit House 2E/21 Jhandewalan Extension
New Delhi - 110 055
Telephone No. : (011) 42541234
Fax No. : (011) 41540064
E-mail address : email@example.com
In case any query/complaint remains unresolved with our Registrar please write toCompany Secretary at the Registered Office of the Company.
ENVIRONMENT FRIENDLY CORPORATE ENTITY As a responsible corporate entity yourcompany is sensitive to environment also and is contributing a bit to improve theecological balance by introducing Organic Cotton yarns & Fair Trade Cotton Yarnscertified by Control Union Certificate of Netherlands & F.L.O. of Germany. The companyis registered with Clean Development Mechanism (CDM) Executives Board and United NationsFramework Conventions on Climate Change (UNFCCC) Secretariat Bonn Germany.
DIRECTORS RESPONSIBILITY STATEMENT
The Directors would like to assure the Members that the financial statements for theyear under review conform in their entirely to the requirements of Companies Act 20 13.
The Directors confirm :
I) that in preparation of the Annual Accounts the applicable accounting standards hadbeen followed alongwith proper explanations relating to material departures;
II) that they had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit or loss of the company for that period;
III) that they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with provisions of this Act for safeguarding the assetsof the company and for preventing and detecting fraud and other irregularities;
IV) that they had prepared the Annual Accounts on a going concern basis.
V) that the directors in the case of a listed company had laid down internalfinancial Controls to be followed by the company and that such internal financial controlsare adequate and were operating effectively;
VI) that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
AUDITORS & AUDITOR'S INDEPENDENT REPORT STATUTORY AUDITORS
The members at the Annual General Meeting held on 30th September 2015 appointed M/sGupta Vigg and Co. Chartered Accountants (Registration No. 001393N) as Statutory Auditorsof the Company to hold office till the conclusion of 36th Annual General Meeting of theCompany. Their period of office will expire at the ensuing Annual General Meeting. Theyhave expressed their willingness for re-appointment as Auditors of the Company. They havegiven a written consent/certificate regarding eligibility for their reappointment asStatutory Auditors in accordance with the Rule 4 of the Companies (Audit and Auditors)Rule 2014 read with the provisions of section 139(2) of the Companies Act 2013
The Board on the recommendation of the Audit Committee has proposed the appointment ofM/s. Gupta Vigg & Co. as the Statutory Auditors of the Company for a period of oneyear to hold the office from the conclusion of this Annual General Meeting till theconclusion of next Annual General Meeting.
The Statutory Auditors have submitted Audit Report on the Financial Statements of theCompany for the Accounting year ended 31st March 2016. The observations and commentsgiven by Auditors in their Report read together with the Notes to the Financial Statementsare self explanatory and require no comments.
We would like to inform you that the Ministry of Corporate Affairs vide Notificationdated 31st December 2014 amended Companies (Cost Records and Audit) Rules 2014 pursuantto which the Company's business activities have been included within the purview of CostAudit requirement. Accordingly the Board of Directors on the recommendation of AuditCommittee appointed M/s Ramanathan & Iyer Cost Accountant as Cost Auditors of theCompany for financial year 2016-17 and has fixed a remuneration of Rs. 1.62 Lacs (RupeesOne Lac Sixty Two Thousand Only) subject to the ratification of the members as per theprovision of Section 148(3) of the Companies Act 2013 and Rules 14 of the Companies(Audit and Auditors) Rules 2014. A resolution for the ratification of remuneration of theCost Auditors has been proposed to the members in the accompanying Notice of the ensuingGeneral Meeting.
The Board pursuant to the provisions of Section 204 of the Companies Act 2013 readwith rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 appointed M/s. P.S. Bathla & Associates Practising Company Secretaries havingMembership No. 2585 as Secretarial Auditor to conduct Secretarial Audit for the financialyear 20152016.
M/s. P.S. Bathla & Associates Practising Company Secretaries have carried out theSecretarial Audit for the financial year ended March 312016 and their Secretarial AuditReport in Form No. MR-3 is annexed hereto as Annexure II and form part of the Report.
The Report is self explanatory and require no comments
BUSINESS RISK MANAGEMENT
The Company has laid down Risk Management Policy. The Policy aims to identify evaluatemanage and monitor all types of risks associated with the business of the Company. TheBoard as well as Audit Committee regularly overseas the risk management process in theCompany as required under 134(3)(n) of the Companies Act 2013 and SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 which came into effect from 1stDecember 2015.
Your Company is operating in Textile segment and has identified certain risks which mayaffect the performance of the Company. These are operational risks such as fluctuation incotton prices fluctuation in foreign exchange rates Labour problems regulatory risksGovernment Policy with respect to the Textile Industry etc. The Policy aims to suggeststeps to be taken to control and mitigate the risks associated with the Company's TextileBusiness. We are of the opinion that none of the identified risk is such that which maythreaten the existence of the Company.
INTERNAL FINANCIAL CONTROL AND SYSTEMS
The Company is maintaining an efficient and effective system of Internal FinancialControl for the facilitation of speedy and accurate compilation of financial statements.The Company's internal control system is designed to ensure operational efficiencyprotection and conservation of resources accuracy and promptness in financial reportingand compliance with procedures laws and regulations. The company's Internal FinancialControl System commensurate with the nature of its business and size of its operations. Inorder to further strengthen the Internal control system and to automate the variousprocesses of the business company is making use of Enterprises Resource Planning (ERP).
Pursuant to the provisions of section 138 of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 the Company has also appointed a Chartered Accountant asInternal Auditor for the financial year 2016-17. The Company is also having Internal AuditDepartment to test the adequacy and effectiveness of Internal Control Systems laid down bythe management and suggest improvement in the systems. Internal Audit Reports arediscussed with the Management and are reviewed by the Audit Committee of the Board. Duringthe year Company's Internal Controls were tested and no reportable weakness in the systemwas observed.
Apart from the above an Audit Committee consisting of three non executive directorshas been constituted. All the significant audit observations and follow up actions thereonare taken care of by the Audit Committee. The Audit Committee also oversees and reviewsthe adequacy and effectiveness of the internal control in the company. The Audit Committeemet five times during the financial year under review. The Company has also established aVigil Mechanism as per Section 177(9) of Companies Act 2013 read with Rule 7 of theCompanies (Meeting of Board and its Powers) Rules 2014.
During the year under review the Company has not accepted any Public Deposit withinthe meaning of Section 73 of the Companies Act 2013 and the rules
made thereunder. There is no outstanding/unclaimed deposit from the public. Howeverthe information as required under Rule 8 of the Companies (Accounts) Rules 2014 is givenhereunder:-
(i) Deposits accepted during the year : Nil
(ii) Deposits remained unpaid or unclaimed as at the end of the year : Nil
(iii) Default in repayment of deposits and deposits which are not in compliance withthe requirements of Chapter V of the Companies Act 2013 : N.A.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment for women at workplace and hasadopted a policy against sexual harassment in line with Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder.
During the financial year 2015-16 the Company has not received any complaints onsexual harassment and hence no complaint remains pending as on 31st March 2016.
The Extract of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and Administration) Rules 2014 for the Financial year2015-16 in the Form MGT-9 is annexed herewith as Annexure III and form part of thisreport.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of employees of the Company is annexed as "Annexure IV" and formpart of this Report.
In terms of section 197(14) of the Companies Act 2013 the Company does not have anyHolding Company.The details regarding remuneration received by Managing Director is alsogiven in point VI of the ANNEXURE IV annexed hereto and form part of this report.
During the year under review Sh. Dinesh Oswal Managing Director of the Companyreceived a remuneration of Rs. 5.75 Crores. Sh. Dinesh Oswal is 51 years of age. He iscommerce Graduate and has business experience of 31 years in Textile Industry. He isemployed on contractual basis for five years w.e.f 1st January 2012 to 31st December2016. Before joining the company he was employed with M/S. Oswal Woollen Mills Limited asCommercial Manager. He is holding 23766 equity shares of Rs. 5/- each which constitute0.07% of the equity capital of the company. Sh. Dinesh
Oswal is related to Sh. Jawahar Lal Oswal Chairman and Sh. Kamal Oswal Director of theCompany. No other employee was in receipt of remuneration exceeding the limits as providedunder Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The detailed information as required under section 134(3) of the Companies Act 2013read with Subrule 3 of the Rule 8 Companies (Accounts) Rules 2014 is enclosed as perAnnexure-V and forms part of this report.
REPORT ON THE CORPORATE GOVERNANCE
Your Company continues to follow the principles of good Corporate Governance. Thecompany has already constituted several committees of directors to assist the Board ingood Corporate Governance. The Corporate Governance Report alongwith the AuditorsCertificate regarding compliance of the conditions of the Corporate Governance asstipulated in part C of Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is attached herewith as Annexure-VI and forms part of thisreport.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulated underthe Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is enclosed as per Annexure-VII and forms part of this Report.
The industrial relations remained cordial throughout the year and the excellent resultswere achieved with the whole hearted co-operation of employees at all levels.
The Board of Directors of the company wish to place on record their thanks andappreciation to all workers staff members and executives for their contribution to theoperations of the company. The Directors are thankful to the Bankers FinancialInstitutions for their continued support to the company. The Directors also place onrecord their sincere thanks to the shareholders for their continued support co-operationand confidence in the Management of the Company.
FOR AND ON BEHALF OF THE BOARD
|PLACE: LUDHIANA ||JAWAHAR LAL OSWAL |
|DATED: 12th August 2016 ||(Chairman) |
| ||DIN: 00463866 |