Your Directors have pleasure in presenting the Twenty Second Annual Report togetherwith the Audited Financial Statements of the Company for the period from 1st April 2015to 31st March 2016. The working and operational parameters of all the plants of theCompany were quite satisfactory during the year.
|Highlights of Financial Results for the year are as under: || |
(Amount in Rs.)
|Particulars || |
For the year ended
| ||31.03.2016 ||31.03.2015 |
|Revenue from operations ||11567254246 ||10965333603 |
|EBITDA ||1911440057 ||1654429970 |
|Less: Finance Costs ||411714806 ||377085653 |
|Less: Depreciation ||659985984 ||595503285 |
|Profit before exceptional items and tax ||881283985 ||712263781 |
|Exceptional Items ||Nil ||Nil |
|Profit Before Tax ||881283985 ||712263781 |
|Less: Tax expense ||248061835 ||197926223 |
|Profit After Tax ||633222150 ||514337558 |
|AMOUNT AVAILABLE FOR APPROPRIATION ||1707966845 ||1293425130 |
|Dividend: Interim ||72878490 ||27329434 |
|Proposed Final ||Nil ||45549056 |
|Tax on Dividend ||14836348 ||13917353 |
|Transfer to General Reserve ||13000000 ||13000000 |
The financial statements of the Company have been prepared in accordance with theGenerally Accepted Accounting Principles in India (Indian GAAP) to comply with theAccounting Standards. It complies with the provisions of Companies Act 2013 andguidelines issued by SEBI. Management evaluates all recently issued or revised accountingstandards on an ongoing basis. Apart from this the Company discloses Audited andUnaudited Financial Results on quarterly and annual basis as per Listing Agreement enteredinto with the stock exchanges and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
It is evident from the above graphs that your Company has progressed during the currentperiod ended 31st March 2016. It has achieved aggregate sales of C1156.72 crores ascompared to sales of C1096.53 crores in last fiscal And Profit Before Tax of C88.12 croresas compared to Profit Before Tax of C71.22 crores last year.
Barring unforeseen circumstances the Directors of your Company expect continued growthin turnover and profitability in future also.
A detailed analysis of the financial operations is given in the Management Discussionand Analysis Report which forms part of this Annual Report in terms of the provisions ofRegulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The analysis on the Industry Scenario throws light on the important risks andconcerns faced by your Company. The strategy of your Company to de-risk against thesefactors is also outlined in the Management Discussion and Analysis Report.
SUBSIDIARY AND ASSOCIATE COMPANIES
Nandan Denim Limited did not have any subsidiary or associate company for the yearended 31st March 2016.
The dividend payout for the year under review is in accordance with the Companyspolicy to build long term shareholder value and considering the long term growthobjectives of the Company.
The Board at its meeting held on 12th February 2016 declared an Interim Dividend ofRe. 0.80/- (i.e. 8%) per equity share of face value of C10/- each. A second InterimDividend of Re. 0.80/- (i.e. 8%) per equity share of face value of C10/- each was furtherdeclared at the Board Meeting held on 11th March 2016. The total dividend for the yearworks out to C1.60/- (i.e. 16%) per equity share on a face value of C10/- per share. Lastyear the dividend was paid at the same rate. The Company has paid dividend distributiontax plus applicable surcharge education cess and / or any other cess applicable on thedividend distribution tax at the time of declaration and payment of dividend.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Nandan Denim Limited has a broad-based Board of Directors constituted in compliancewith the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and in accordance with good corporate governance practices. The Boardfunctions either as a full Board or through various committees constituted to overseespecific areas.
The Board of Directors at their meeting held on 29th April 2015 approved theappointment of Dr. Yasho Verdhan Verma as Additional Director of the Company in thecapacity of Independent Director. He was further regularised as Director in the AnnualGeneral Meeting of the Company held on 29th September 2015.
On the recommendation of the Nomination and Remuneration Committee at the BoardMeeting held on 11th March 2016 Mr. Pradeep Kumar Shrivastava and Mr. Ganesh Khawas wereappointed as Additional Directors in the capacity of Whole Time Directors. AsAdditional Directors they hold office up to the date of forthcoming Annual GeneralMeeting and are eligible for appointment as Directors. Later Mr. Ganesh Khawas steppeddown from his position as Whole Time Director effective from the close of businesshours on 4th July 2016 which was approved via circular resolution by the Board ofDirectors. The Board places on record its appreciation for his contribution towards theCompany.
The Board of the Company as on 31st March 2016 consisted of 9 Directors out of whichfive were Independent Directors two were Promoter Directors and two were Whole Time Directors.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 of the Companies Act 2013 and Regulation 16of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 which havebeen relied on by the Company and were placed at the Board Meeting held on 28th May 2016.
Retirement by rotation
Mr. Brijmohan Chiripal Managing Director is liable to retire by rotation at theensuing AGM pursuant to the provisions of section 152 of the Companies Act 2013 read withthe Companies (Appointment and Qualification of Directors) Rules 2014 and the Articles ofAssociation of your Company and being eligible has offered himself for re-appointment.Appropriate resolutions for their re-appointment are being placed for your approval at theensuing AGM.
Appointment/Re-appointment of Directors
In compliance with requirements of the Companies Act Listing Agreement and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 brief resume andexpertise of persons proposed to be appointed / re-appointed as Directors is mentionedbelow. Details of other directorships memberships in committees of other Companies andshareholding in the Company have been mentioned in the Annexure to the Notice.
Mr. Brijmohan Chiripal is the Managing Director of Nandan Denim Limited. Aged 55 yearshe has done his Bachelors in Engineering (Chemicals) and has almost three decades ofexperience in the field of manufacturing trading and export of various textile products.He takes keen interest in the marketing aspects of the Company.
Mr. Pradeep Kumar Shrivastava is the Whole Time Director of the Company. He has donehis Post Graduation in Personnel Management apart from M.A. and Diploma in Social Work. Healso holds degree in law. He has worked with Companies like Gujarat Ambuja Exports Limitedand Modern Terry Towel Limited amongst others. He possesses around 30 years of experiencein the field of Human Resource.
In terms of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the number of Committees (Audit Committee andStakeholders Relationship Committee) of public limited companies in which a Director is amember/chairman were within the limits provided under listing regulations for all theDirectors of the Company. The number of directorships of each independent Director is alsowithin the limits prescribed under listing regulations.
Key Managerial Personnel
During the period under review Mr. Sanjay Agrawal vacated office as Chief FinancialOfficer from the Company with effect from 31st March 2016. The Board places on recordappreciation for his valuable contribution during his association with the Company.Thereafter Mr. Ashok Bothra was appointed as the Chief Financial Officer of Nandan DenimLimited at the Board Meeting held on 28th May 2016 and designated as Key ManagerialPersonnel.
Apart from the above Mr. Brijmohan Chiripal is the Managing Director of the Companyand Ms. Purvee Roy is the Company Secretary of the Company thereby satisfying therequirements of the provisions of sections 2(51) and 203 of the Companies Act 2013 readwith Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014pertaining to Key Managerial Personnel. In addition Mr. Deepak Chiripal serves as ChiefExecutive Officer of the Company.
Annual Evaluation of Boards Performance
As required under the provisions of Section 134(3)(p) of the Companies Act 2013;Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Board has carried out an annual evaluation of its own performance of itsCommittees and individual directors. The manner in which such performance evaluation wascarried out is as under:
The performance evaluation framework is in place to seek their response on theevaluation of the entire board and individual directors. The Nomination and RemunerationCommittee carries out evaluation of Directors performance.
The performance of the Board and Individual Directors was evaluated by the Boardseeking input from all Directors. The performance of committees was evaluated by the Boardseeking input from the committee members. The Nomination and Remuneration Committeereviews the performance of the Individual Directors. A separate meeting of the IndependentDirectors was also held to review the performance of non-independent Directors;performance of the Board as a whole and performance of the Chairman of the Company takinginto account the views of executive as well as non-executive Directors.
The criteria of evaluation of Board includes mechanism for evaluating its performanceas well as that of its Committees and individual Directors including the Chairman of theBoard based on the criteria laid down by Nomination and Remuneration Committee whichincludes attendance contribution at the meetings and otherwise independent judgementsafeguarding of minority shareholders interest adherence to Code of Conduct and businessethics monitoring of regulatory compliance risk management and review of internalcontrol system etc.
Declaration of Independence
Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions ofCompanies Act 2013 read with the schedules and rules issued thereunder as well asRegulation 16(1)(b) of the Listing Regulations [including any statutory modification(s) orre-enactment(s) for the time being in force] so as to qualify themselves to be appointedas Independent Directors.
The Board meets at regular intervals to discuss and decide on the Companyspolicies and strategies apart from other Board matters. The calendar depicting thetentative dates of Board and Committee Meetings is circulated in advance to facilitate theDirectors to arrange their schedule and to ensure participation in the meetings.
During the financial year 2015-16 six board meetings were held on 29th April 2015;29th May 2015; 5th August 2015; 3rd November 2015; 12th February 2016 and 11th March2016 respectively. The gap between two Board Meetings did not exceed 120 days.
Details of composition of Board and its committees and of the meetings held attendanceof the Directors and other relevant details are provided in the Corporate GovernanceReport.
The intervening gap between the meetings was within the period prescribed under theCompanies Act 2013; Listing Agreement and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The Board had originally constituted its Remuneration Committee much before the cominginto force of the Companies Act 2013 as part of good corporate governance practice. Thecurrent policy is to ensure that the Board and Top Management is appropriately constitutedto meet its fiduciary obligations to stakeholders to identify persons who are qualifiedto become Directors or who may be appointed in senior management as / or Key ManagerialPersonnel of the Company and that the level and composition of remuneration is reasonableand sufficient to attract retain and motivate Directors and meets appropriate benchmarks.
The remuneration paid to the Directors is in accordance with the Nomination andRemuneration Policy formulated in accordance with section 178 of the Companies Act 2013and regulation 19 of the Listing Regulations [including any statutory modification(s) orre-enactment(s) for the time being in force]. The Managing Director and CEO do not receiveremuneration from any other Company.
The Nomination & Remuneration Committee at its sole discretion consider theintegrity qualification expertise and experience of the person for appointment as aDirector and then recommend the Board of his/her appointment. The policy has been attachedas Annexure D to the Boards Report.
Your Company has four Committees of the Board namely:
Stakeholders Relationship Committee
Nomination and Remuneration Committee
Corporate Social Responsibility Committee
Apart from the above a Preferential Allotment Committee was also formed to take careof matters related to preferential issue of convertible warrants and conversion thereof.
Details of all the Committees along with their composition terms of reference andmeetings held during the year are provided in detail in the Corporate GovernanceReport which forms part of the Annual Report.
EVALUATION OF THE BOARD OF DIRECTORS
The Company has devised a policy for performance evaluation of its individualdirectors the Board and the Committees constituted by it which includes criteria forperformance evaluation.
In line with the requirements of the Companies Act 2013; Listing Agreement and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board hascarried out an annual evaluation of its own performance working of the Committees andthe Directors individually. The Board performance was evaluated based on inputs receivedfrom all the Directors after considering criteria such as Board composition and structureeffectiveness of processes and information provided to the Board etc.
The Nomination and Remuneration Committee has also reviewed the performance of theindividual directors based on their knowledge level of preparation and effectiveparticipation in meetings understanding of their roles as Directors etc.
Corporate Governance is not just a destination but a journey to constantly improvesustainable value creation. It is an upward-moving target that we collectively strivetowards achieving.
Corporate Governance encompasses a set of systems and practices to ensure that theCompanys affairs are being managed in a manner which ensures accountabilitytransparency and fairness in all transactions in the widest sense. The objective is tomeet stakeholders aspirations and societal expectations. Good governance practicesstem from the dynamic culture and positive mindset of the organisation. We are committedto meet the aspirations of all our stakeholders. This is demonstrated in shareholderreturns good credit ratings governance processes and an entrepreneurial performancefocused work environment. Additionally our customers have benefited from high qualityproducts delivered at extremely competitive prices.
Over the years we have strengthened governance practices. These practices define theway business is conducted and value is generated. Stakeholders interests are takeninto account before making any business decision. Nandan Denim Limited has thedistinction of consistently rewarding its shareholders.
It has thus become crucial to foster and sustain a culture that integrates allcomponents of good governance by carefully balancing the complex inter-relationship amongthe Board of Directors Audit Committee Finance Compliance and Assurance teams Auditorsand the senior management. Our employee satisfaction is reflected in the stability of oursenior management low attrition across various levels and substantially higherproductivity.
In accordance with regulations of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and listing agreement entered into with BSE Limited (BSE)and the National Stock Exchange of India Limited (NSE) the report containing the detailsof Corporate Governance systems and processes at Nandan Denim Limited forms part of thisAnnual Report.
Further a certificate obtained from the statutory auditors M/s J.T. Shah & Co.Chartered Accountants regarding compliance of conditions of Corporate Governance asstipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 hasbeen annexed as part of the Corporate Governance Report.
The Securities and Exchange Board of India (SEBI) on 2nd September 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Agreement for different segmentsof capital markets to ensure better enforceability. The said regulations were effectivefrom 1st December 2015. Accordingly all listed entities were required to enter into theListing Agreement within six months from the date of notification of the regulations. TheCompany entered into Listing Agreement with BSE Limited and the National Stock Exchange ofIndia Limited during February 2016.
The paid up Equity Share Capital of the Company as on 31st March 2016 was C45.54crores. There has been no change in the Equity Share Capital of the Company during theyear.
Nandan Denim Limited had taken shareholders approval at the Annual GeneralMeeting of the Company conducted on 29th September 2015 for issue of 2500000convertible warrants to a non promoter entity at a conversion price of C200/-(Rupees Two Hundred only) each. Pursuant to in principle approval received fromstock exchanges the convertible warrants were allotted on 9th November 2015. The entireamount of C50.00 crores (Rupees Fifty crores only) was received in tranches. Thereafterthe warrants were converted into equity shares in the month of May 2016. Listing approvaland trading approval has been received from both the exchanges.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report forms an integral part of this report andgives details of the overall industry structure economic developments performance andstate of affairs of your Companys business internal controls and their adequacyrisk management systems and other material developments during the financial year 2015-16.
In accordance with Section 177 of the Companies Act 2013; Listing Agreement and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasformulated a Whistle Blower Policy to address the genuine concerns if any of theemployees wherein employees can raise any suspected or actual violations of the Code ofConduct. Specifically employees can raise concerns regarding any discriminationharassment victimisation any other unfair practice being adopted against them or anyinstances of fraud by or against the Company.
The details of the same have been stated in the Report on Corporate Governance and thepolicy can also be accessed on the Companys website athttp://www.nandandenim.com/Pdf/ WhistleBlowerPolicy.pdf.
CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING
The Board of Directors has adopted the Insider Trading Policy in accordance with therequirements of the SEBI (Prohibition of Insider Trading) Regulation 2015 for fairdisclosure of unpublished price sensitive information and prevention of insider trading.
The Insider Trading Policy of the Company lays down guidelines and procedures to befollowed and disclosures to be made while dealing with shares of the Company as well asthe consequences of violation. The policy has been formulated to regulate monitor andensure reporting of deals by employees and to maintain the highest ethical standards ofdealing in Company securities.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors state that:
i. in the preparation of the annual financial statements for the year ended 31st March2016 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
ii. such accounting policies have been selected and applied consistently and made suchjudgements and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at the end of the financial year 31stMarch 2016 and of the profit and loss of the Company for that period;
iii. proper and sufficient care have been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
iv. the annual financial statements have been prepared on a going concern basis;
v. internal financial controls have been laid down and followed by the Company and thatsuch internal financial controls are adequate and are operating effectively; and
vi. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
During the year under review the Company has neither accepted nor renewed any depositsfrom public within the meaning of Section 73 and 74 of the Companies Act 2013 read withCompanies (Acceptance of Deposits) Rules 2014 [including any statutory modification(s) orre-enactment(s) for the time being in force].
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under section 134(3)(M) of the Companies Act 2013 readwith the Companies (Accounts) Rules 2014 has been annexed as Annexure A to this Report.
ENVIRONMENT AND POLLUTION CONTROL
Nandan Denim Limited strives to maintain good standards of environmental care andensures that increasing level of operations do not adversely impact standards of healthand environment. To combat pollution and strengthen the area ecology considerableemphasis is placed on trees. All manufacturing facilities possess the requiredenvironmental clearance from the respective Pollution Control Boards and do comply withthe relevant statutory provisions.
The Company is well aware of its responsibility towards a better and cleanerenvironment. Our efforts in environment management go well beyond mere compliance withstatutory requirements.
HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT
Your Company attaches significant importance to continuous up gradation of HumanResources for achieving the highest levels of efficiency customer satisfaction andgrowth. As part of the overall HR Strategy training programs have been organised foremployees at all levels through both internal and external faculties during the year underreview. As on 31st March 2016 the employee strength was approximately 2900.
The industrial relations during the year under review continued to be cordial. TheDirectors place on record their sincere appreciation for the services rendered byemployees at all levels.
PARTICULARS OF EMPLOYEES
The information required pursuant to section 197(12) of the Companies Act 2013readwith Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company will be provided uponrequest. In terms of section 136(1) of the Companies Act 2013 the Report and Accountsare being sent to the shareholders and others entitled thereto excluding the informationon employees particulars which is available for inspection by the shareholders atthe corporate office of the Company during business hours on working days of the Companyupto the date of the ensuing Annual General Meeting. If any shareholder is interested inobtaining a copy thereof such shareholder may write to the Company Secretary in thisregard.
None of the employees listed in the said Annexure is a relative of any Director of theCompany. None of the employees hold (by himself or along with his / her spouse anddependent children) more than two percent of the equity shares of the Company.
The ratio of remuneration of each director to the median of employeesremuneration as per Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part ofthe Boards report.
M/s. J.T. Shah & Co. the Statutory Auditors of the Company were appointed for aperiod of five years at the Annual General Meeting of the Company held on 15th September2014. In terms of the first proviso to Section 139 of the Companies Act 2013 theappointment of the Auditors shall be placed for ratification at every Annual GeneralMeeting. Accordingly the appointment of M/s. J.T. Shah & Co. Chartered Accountantsas Statutory Auditors of the Company is placed for ratification by the shareholders. Inthis regard the Company has received a written consent and certificate stating that theysatisfy the criteria provided under section 141 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 and that the appointment if made shall be inaccordance with the applicable provisions of the Companies Act 2013 and rules issuedthereunder. As required under the Listing Agreement and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 M/s. J.T. Shah & Co. CharteredAccountants have also confirmed that they hold a valid certificate issued by the PeerReview Board of Institute of Chartered Accountants of India (ICAI) as required under theListing Regulations.
The Statutory Auditors of the Company have not reported any fraud as specified underthe second proviso of Section 143(12) of the Companies Act 2013 [including any statutorymodification(s) or re-enactment(s) for the time being in force].
The Auditors Report for the financial year ended 31st March 2016 does notcontain any qualification reservation or adverse remark.
The Board of Directors of the Company on the recommendations made by the AuditCommittee at its meeting held on 10th August 2016 has approved the appointment of M/s.A.G. Tulsian & Co. Cost Accountants [Firm Registration No. 100629] as the CostAuditor of your Company for the financial year 2016-17 to conduct the audit of the costrecords of your Company. The remuneration proposed to be paid to the Cost Auditor subjectto the ratification by the members at the ensuing AGM would be not exceeding C50000/-(Rupees Fifty Thousand Only) plus taxes and out of pocket expenses if any.
Your Company has received consent from M/s. A.G. Tulsian & Co. Cost Accountantsto act as Cost Auditor for conducting audit of cost records for the financial year 2016-17along with a certificate confirming their independence and arms length relationship.
In terms of Section 204 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Board of Directors of yourCompany at its meeting held on 10th August 2016 has appointed Ms. Geeta Serwani of M/s.Geeta Serwani & Associates Practicing Company Secretary [Membership No.: 24479 andCertificate of Practice No.: 8842] as the Secretarial Auditor to conduct an audit of thesecretarial records for the financial year 2016-17.
The Company has received consent from Ms. Geeta Serwani to act as the auditor forconducting audit of the secretarial records for the financial year ending 31st March2017.
The Secretarial Audit Report for the financial year ended 31st March 2016 is annexedherewith as Annexure Rs. to this report. The Secretarial Audit Report does notcontain any qualifications reservations or adverse remarks.
DISCLOSURE UNDER SCHEDULE V(F) OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSUREREQUIREMENTS) REGULATIONS 2015
The Company does not have any Unclaimed Shares issued in physical form pursuant toPublic Issue / Rights Issue.
RELATED PARTY TRANSACTIONS
During the financial year 2015-16 your Company has entered into transactions withrelated parties as defined under section 2(76) of the Companies Act 2013 read withCompanies (Specification of Definitions Details) Rules 2014 all of which are in theordinary course of business and on arms length basis and in accordance with theprovisions of the Companies Act 2013 read with the Rules issued thereunder; ListingAgreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.Further there were no transactions with related parties which qualify as materialtransactions under the Listing Regulations.
All transactions with related parties were reviewed and approved by the AuditCommittee. Prior omnibus approval was granted by the Audit Committee for related partytransactions which are of repetitive nature entered in the ordinary course of businessand are on arms length basis in accordance with the provisions of Companies Act2013 read with the Rules issued thereunder; Listing Agreement and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
The details of the related party transactions as per Accounting Standard 18 are set outin Note 39 to the Financial Statements forming part of this report.
The policy on Related Party Transactions is available on the website of the Company athttp://www.nandandenim.com/Pdf/ RelatedPartyTransactionPolicy.pdf.
Form AOC 2 pursuant to Section 134(3)(h) of the Companies Act 2013 read withRule 8(2) of the Companies (Accounts) Rules 2014 is set out as Annexure F to theDirectors Report.
LOANS AND INVESTMENTS BY THE COMPANY
Details of loans guarantees and investments under the provisions of Section 186 of theCompanies Act 2013 read with the Companies (Meetings of Board and its Powers) Rules2014 as on 31st March 2016 are set out in Notes to the Financial Statements formingpart of this report.
DETAILS OF INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS
Your Company has put in place adequate internal financial controls with reference tothe financial statements.
Nandan Denim Limited has adopted accounting policies which are in line with theAccounting Standards prescribed in the Companies (Accounting Standards) Rules 2006 thatcontinue to apply under Section 133 and other applicable provisions if any of theCompanies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and relevantprovisions of the Companies Act 1956 to the extent applicable. These are in accordancewith generally accepted accounting principles in India. Changes in policies if any areapproved by the Audit Committee in consultation with the Statutory Auditors.
The Company operates in SAP an ERP system and has many of its accounting recordsstored in an electronic form and backed up periodically. The ERP system is configured toensure that all transactions are integrated seamlessly with the underlying books ofaccount. The Company has automated processes to ensure accurate and timely updation ofvarious master data in the underlying ERP system.
The management periodically reviews the financial performance of your Company againstthe approved plans across various parameters and takes necessary action wherevernecessary.
Your Company has a code of conduct applicable to all its employees along with a WhistleBlower Policy which requires employees to update information accurately. Any non compliance noticed is to be reported and actioned upon in line with the Whistle BlowerPolicy.
The Company gets its standalone accounts audited every quarter by its StatutoryAuditors.
The Company has a well-defined risk management framework in place. Further it hasestablished procedures to periodically place before the Board the risk assessment andmanagement measures. As such there are no risks which in the opinion of the Boardthreaten the existence of the Company. However the details of the risks faced by theCompany which may pose challenges and the mitigation thereof are discussed in detail inthe Management Discussion and Analysis Report that forms part of the Annual Report.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN ATWORKPLACE
In order to prevent sexual harassment of women at workplace a new legislation - TheSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013has been notified on 9th December 2013. Under the said Act every Company is required toset up an Internal Complaints Committee to look into complaints relating to sexualharassment at workplace of any woman employee.
Nandan Denim Limited has adopted a policy for prevention of Sexual Harassment of Womenat Workplace and has constituted the Internal Complaints Committee (ICC) with an NGO asone of its Members. Our policy assures discretion and guarantees non-retaliation tocomplainants. We follow a gender-neutral approach in handling complaints of sexualharassment and we are compliant with the law of the land wherever we operate. Furtheradequate awareness programmes were also conducted for the employees of the Company.
During the financial year 2015-16 no cases in the nature of sexual harassment werereported at any workplace of Nandan Denim Limited.
CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted Corporate Social Responsibility Committee in compliancewith the provisions of Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014. The Corporate Social Responsibility Committee hasformulated a Corporate Social Responsibility Policy (CSR policy) indicating the activitiesto be undertaken by the Company. The CSR policy may be accessed on the Companyswebsite at the link: http:// www.nandandenim.com/Pdf/CorporateSocialResponsibilityPolicy.pdf.
The CSR Committee of the Board consists of Dr. Yasho Verdhan Verma (IndependentDirector) as Chairman. Mr. Giraj Mohan Sharma (Independent Director) and Mr. VedprakashChiripal (Promoter Director) are its members.
Over the years the Company has aligned its business processes and goals to make a moredeep-rooted impact on the societys sustainable development. A detailed update on theCSR initiatives of the Company is provided in the Corporate Social Responsibility andSustainability Report which forms part of the Annual Report.
As a responsible corporate citizen the Company has been implementing societalactivities since many years. As per the strict interpretation of the new CSR rules someof these initiatives may not be eligible under the 2% CSR spend. As these activities areintegral to the business the Company has decided to continue with them.
During the year the Company was in the process of evaluating the focus areas /locations of intervention for CSR activities to cater to the pressing needs of society anddeliver optimal impact. As a socially responsible Company your Company is committed toincrease its CSR impact and spend over the coming years with its aim of playing a largerrole in Indias sustainable development by embedding wider economic social andenvironmental objectives.
For the year ended 31st March 2016 the calculated amount towards its CSR activitiesas required under the Act lies unspent. The reason for not spending the required amounttowards CSR activities was mainly due to extraneous factors and due to better negotiationby the Company with the service providers / external agencies which resulted into savingsand ultimately could not be spent as budgeted. The Company has been however extremelycommitted towards exercising its social responsibilities and is dedicated to spend toachieve better results. The Company is confident about its work in the social space and issensitive to the requirements of the Companies Act 2013. In view of the same yourCompany is confident of a turnaround as far as the CSR numbers are concerned in the nextfinancial year.
The Annual Report on Corporate Social Responsibility u/s 135 of the Companies Act 2013providing necessary disclosures is annexed as Annexure B to this Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return as on 31st March 2016 inForm MGT 9 in accordance with Section 92(3) of the Companies Act 2013 read withCompanies (Management and Administration) Rules 2014 are set out herewith as Annexure E to this report.
CEO & CFO CERTIFICATION
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the certification by the Chief Executive Officer and Chief Financial Officer on thefinancial statements and internal controls relating to financial reporting has beenobtained.
A copy of the certificate on the financial statements for the financial year ended 31stMarch 2016 is annexed as Annexure to the Corporate Governance Report.
SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTINGTHE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE
There are no significant / material orders passed by the regulators or courts ortribunals impacting the going concern status of your Company and its operations in future.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during the financial yearended 31st March 2016.
During the year under review ICRA assigned credit rating of A- for Long Term withstable outlook and A2+ for Short Term for Nandan Denim Limited.
The assigned ratings take into account NDLs strong market position in thedomestic denim industry established distribution network and the extensive industryexperience of its promoters. The rating further derives comfort from partially integratedoperations of the Company and the plans for backward integration within the denim valuechain which should help the Company respond to industry pressures and improve itsprofitability over the long term. The ratings also take into account the improvingfinancial risk profile of NDL characterised by consistent growth in scale andprofitability resulting in improvement in capital structure and debt protection metrics.ICRA further notes that company is in the midst of a large capex plan towards backwardintegration which will benefit from various government incentive schemes and onstabilisation of the operations should result in strengthening of the operational riskprofile of Nandan Denim Ltd.
In order to save environment by cutting down the consumption of paper the Ministry ofCorporate Affairs (MCA) has introduced "Green Initiative in CorporateGovernance" by allowing paperless compliance by companies under the provisions of theCompanies Act 2013. MCA had further announced that the Directors of the Company mayparticipate in a meeting of Board or Committee of Directors under the provisions of theCompanies Act through electronic mode. Participation of Directors in the Board or itsCommittee meetings through video conferencing is an approved way of attending the meetingsand such participation is considered for the purposes of quorum authority etc. TheCompanies are also mandated to conduct the postal ballot through electronic means also.The facility of electronic voting was offered to the shareholders for the postal ballotprocess undertaken by the Company for approval of issue of shares on preferential basis inFebruary 2015 the issue was later on withdrawn. In future if any requirement of passingresolutions through postal ballot Nandan Denim Limited will conduct the ballot process inthe e-voting mechanism.
NDL started sending documents like notices convening General Meetings FinancialStatements etc. including Annual Reports in electronic form to the email addresses madeavailable to us by the depositories from time to time. We appreciate the initiative takenby MCA as it helps in prompt receipt of correspondence and also avoids delay or lossescaused through post. Therefore we are publishing only the statutory disclosures in theprint edition of the Annual Report. Annual Report containing additional data is availableon our website namely www.nandandenim.com.
Further as a member you will be entitled to be furnished with a copy of the abovementioned documents as required upon receipt of a requisition any time. We wouldappreciate your support on our desire to participate in the green initiative.
The Company has not issued equity shares with differential voting rights as todividend voting or otherwise; and
The Company does not have any ESOP scheme for its Directors / employees.
Your Directors would like to express their sincere appreciation for the co-operationand assistance received from shareholders bankers financial institutions regulatorybodies and other business constituents during the year under review. Your Directors alsowish to place on record their deep sense of appreciation for the commitment displayed byall executives officers and staff resulting in the successful performance of the Companyduring the year.
| ||For and on behalf of the Board of Directors || |
| ||Vedprakash Chiripal ||Brijmohan Chiripal |
|Place: Ahmedabad ||Chairman ||Managing Director |
|Date: 10th August 2016 ||DIN: 00290454 ||DIN: 00290426 |
Annexure A To The Boards Report
Enery conservation technology absorption and foreign exchange earnings and outgo
A. CONSERVATION OF ENERGY:
(a) ENERGY CONSERVATION:
1. Reduce the pressure drop across of compressor & dryer currying out modificationof dryer
2. Conversion stenters heating fuel from gas to coal
3. Reduction in compressed air consumption by reducing leakages in plant
4. Reduction in compressed air consumption on Loom by carrying out maintenance andstandardising the setting of Looms
5. Reduction in consumption of steam by carrying out automation on machine
(b) WATER CONSERVATION:
1. Recycling of ETP treated water for Toilets and Gardening
2. Recycling finishing water in process
B. ADDITIONAL INVESTMENTS AND PROPOSALS
We are installing heat recovery system on our compressors after success of which firstheat recovery system to compressor will be installed. Hot water generated To Compressorwill be used in power plant.
C. Impact of measures at (a) and (b) above for reduction of energy consumption andconsequent impact on the cost of production of goods:
1. With implementation of all above work we have reduced cost by app. C150 Lac/Annum
2. By recycling water we have reduced ground water consumption by 100 M3/Day
D. Total Energy Consumption and energy consumption per Unit of Production:
I. POWER & FUEL CONSUMPTION:
|Power and Fuel Consumption: || |
|1. Electricity || || |
|(a) Purchased || || |
|Unit (kwh) || |
|Total Amount || |
|Rate / Unit (C) || |
|(b) Own Generation: || || |
|i. Through Diesel Generator || || |
|Unit (kwh) || |
|Units per ltr of Fuel Oil / Gas || |
|Cost / Unit (C) || |
|ii. Through Steam Turbine / Generator || || |
|Unit (kwh) || |
|Units per ltr of Fuel Oil / Gas || |
|Cost / Unit (C) || |
|2. LIGNITE || || |
|Quantity (Tones) / Day || |
|Total Cost (C) || |
|Average Rate (C) || |
|Power and Fuel Consumption: ||31.03.2016 ||31.03.2015 |
|3. COAL || || |
|Quantity (Tones) / Day ||529.95 ||233.48 |
|Total Cost (C) ||703825766 ||308575363 |
|Average Rate (C) ||3639 ||3621 |
|4. FURNACE OIL (Used in Generation of Steam) || || |
|Quantity (Litres) ||NIL ||NIL |
|Total Amount (C) ||NIL ||NIL |
|Average Rate (C) ||NIL ||NIL |
|5. OTHERS LSHS (Low Sulpher High Stock) || || |
|(Used in Generation of Steam) || || |
|Quantity (Tones) ||NIL ||NIL |
|Total Cost (C) ||NIL ||NIL |
|Rate / Unit (C) ||NIL ||NIL |
II. CONSUMPTION PER METER OF PRODUCTION:
| ||31.03.2016 ||31.03.2015 |
|Electricity (KWH) Per Meter ||1.31 ||1.67 |
|Coal (Specified Quality) ||2.48 ||1.21 |
|Lignite (KG) Per Meter ||0.02 ||1.90 |
E. TECHNOLOGY: RESEARCH AND DEVELOPMENT (R&D)
1. Specific Area in which R&D is carried out by the Company
Specilised high value yarn development in spinning
New shade with new colour
Special fancy dobby weave
New over dyeing shade
New special finish
2. Benefits derived as a result of the Above R & D
All the new R&D works are resulting in innovating products.
Better sales realisation.
Better brand image of the Company
Acquisition of new customer
Increase in sales volume
3. Future Plan of Action
More new fancy yarn development.
New weave development
New special shade development
Value added finish development
F. TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION
Added New contamination clears in Blow room machine & Winding
New & Different color in Denim added
Develop Fiber dyed Yarn
Added Laser Ingraving Product
Added sueding Product
Added new over dyed product
G. FOREIGN EXCHANGE EARNINGS AND OUTGO:
a. The Company has taken various steps to increase exports of products during the year.
b. Foreign exchange earning and outgo during the year:
| || || |
(Rs. in crores)
|Particulars ||31.03.2016 ||31.03.2015 |
|(a) Foreign Exchange Earnings: ||136.56 ||133.31 |
|(b) Foreign Exchange Outgo: ||5.59 ||3.94 |