Your Directors are pleased to present the (69th) Sixty Ninth Annual Report on thebusiness and operation of the Company together with the Audited Financial Statement forthe year ended March 31st 2016. A summary of the Financial Results is given below. TheManagement discussion and analysis is also included in this report.
| || ||(Rs in Lacs) |
|FINANCIAL RESULTS ||For the year ended 31st March 2016 ||For the year ended 31st March 2015 |
|Gross Revenue ||32961.61 ||31926.57 |
|Gross Profit (before interest depreciation & tax) ||1696.86 ||1679.85 |
|Less: Interest ||853.31 ||1052.06 |
|Depreciation ||424.67 ||324.77 |
|Profit before tax & extraordinary Item ||418.88 ||303.02 |
|Less: Provision for tax || || |
|Mat Current ||(84.38) ||(60.63) |
|Deferred ||(0.00) ||(27.47) |
|Net Profit for the year ||334.50 ||214.92 |
|Appropriation : || || |
|Transfer to Reserve & Surplus ||- ||- |
|(Surplus/Deficit) in the Statement of Profit & Loss Account ||334.50 ||214.92 |
1. CORPORATE OVERVIEW
The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd. ("Your Company") isa leading and oldest Composite Textile Mill in Vidharbha Region of Maharashtra State. TheCompany has its Corporate Head Quarter at Hinganghat Dist Wardha of Maharashtra State.
2. OVERVIEW OF THE ECONOMY
The Global economy disappointed in terms of growth with deceleration of activity inkey emerging and developing economies like China Brazil Russia overshadowing a modestrecovery in major high income countries. The deceleration was accompanied by declines incommodity prices subdued global trade bouts of financial market volatility and weakeningcapital flows. India was a notable exception growing at 7.6% as per Central StatisticalOffice (CSO) estimates despite declines in exports. Inflation has come down howeverindustrial activity and consumption has not been buoyant.
Three key transitions will influence the global outlook for growth pace of rebalancingin China commodity prices and monetary policy actions in the US and other majoreconomies. For India though the long term prospects for continued growth remainundiminished actual pace will depend on revival in private investment and ruralconsumption strengthening of bank balance sheets and continued implementation of economicreforms.
3. FINANCIAL PERFORMANCE
Your Company reported a marginal top-line growth of 3.24% over the Previous Year thegross profit from operation stood at 1696.86 lacs compared with 1679.85 lacs in theprevious year. The operating profit before tax stood at 418.88 lacs as against 303.02 lacsin the previous year. The Net Profit for the year stood at 334.50 lacs as against 214.92lacs in the previous year.
4. DIVIDEND AND RESERVE
Your Directors recommends a dividend of 1% i.e. 0.10 per equity shares of face value of10 each aggregating to 14.59 lacs ( 14.59 lacs previous year). During the year underreview no amount was transferred to General Reserve.
5. SHARE CAPITAL
The paid-up Equity Share Capital as at March 31 2016 stood at 1458.94 lacs. During theyear under review Company has not issued any Sweat Equity shares Bonus shares or providesany stock option scheme to the employee none of the Directors of the Company holdinstruments convertible into equity shares of the Company. Company has not bought back anyof its securities.
6. ANALYSIS AND REVIEW Textile Industry Conditions
The Indian Textile Industry is one of the leading textile industries in the world. Itis one of the key sectors of Indias manufacturing segment as it contributessignificantly to the economy in terms of employment generation and foreign exchangerevenue.
Indian Textile and Apparel Industry contributes about 14% to industrial production 5%to GDP and 17% to countrys export earnings.
The domestic textile and apparel industry in India is estimated to reach US$ 223billion by 2021 from US$ 108 billion in 2015. The fundamental strength of this industryflows from its strong production base of wide range of fibres and yarns ranging fromnatural fibres to man-made fibres.
Opportunities and Challenges
The future for the Indian textile industry looks promising buoyed by strong domesticconsumption. The Government has introduced the Amended Technology Upgradation Fund Scheme(ATUFS) to give a further boost for technology investment in the textile industry. TheATUFS targets employment generation exports conversion of existing looms tobetter-quality technology looms and improved quality of processing industry. The ATUFS isexpected to act as a catalyst to the Governments Make in India campaignfor the textile sector. Approval has also been given for 24 new textile parks which willfurther create employment opportunities and investments. The long awaited National Textilepolicy to be announced shortly will further accelerate growth in this sector. Globallyfavourable trade policy reforms would also allow the industry to expand its tradepartners improve its export competitiveness and contribute substantially to thenations income.
However there are several challenges ahead for the Textile industry for enhancing itscompetitive strength and global positioning in terms of inflexible labour laws poorinfrastructure competition from other low cost countries which will have to be addressedto sustain the growth momentum of the industry.
STRENGTHS OF THE TEXTILE INDUSTRY
The following are few strengths of the Indian Textile Industry:
An Independent and self-reliant industry;
Large and potential domestic and international market;
Abundant Raw Material availability that helps industry to control costs andreduces the lead-time across the operation;
Availability of low cost and skilled manpower provides competitive advantage toindustry;
Availability of large varieties of cotton fiber and has a fast growing syntheticfiber industry;
Promising export potential.
WEAKNESSES OF THE TEXTILE INDUSTRY
The following are the few drawbacks of the textile industry which it has to overcome.
The Industry is a highly fragmented Industry.
It is highly dependent on Cotton.
There is lower productivity in various segments.
There is a declining Mill Segment.
Lack of Technological Development that affect the productivity and otheractivities in whole value chain.
Infrastructural Bottlenecks and Efficiency such as Transaction Time at Portsand transportation Time.
Unfavorable labour Laws.
Lack of Trade Membership which restrict to tap other potential market.
During the year under report the companys total sales registered a growth of3.24% to 32961.61 Lacs from 31926.57 Lacs in the previous Financial Year 2014-15. TheGross Profit for the financial year 2015-16 is stood at 1696.87 Lacs as compared to1679.85 Lacs for previous financial year 2014-15 and Net Profit after Tax is increased to334.50 Lacs as compared to 214.92 Lacs in the previous Financial Year
Textile fibre prices remained mostly stable for first 3 quarters of FY 2015-16 buteventually declined in the last quarter. The sharp fall of crude oil prices followed by aspectacular rally raised the level of volatility in commodity markets with textile fibresnot escaping the price variations. Cotton prices dropped whereas polyester and viscosesurged. Multiple raw material cost saving initiatives has also helped in keeping costs incontrol.
Your Company has a large retail network throughout the country. It has more than 30agents and more than 2000 retailers which helps the Company to boost its total marketingstrength throughout the country.
7. FINANCE AND ACCOUNTS
During the F.Y. 2015-16 your Company has repaid 923.52 Lacs towards Term Loan.
Your Company prepares its financial statements in compliance with the requirements ofthe Companies Act 2013 and the Generally Accepted Accounting Principles (GAAP) in India.The financial statements have been prepared on historical cost basis. The estimates andjudgements relating to the financial statements are made on a prudent basis so as toreflect in a true and fair manner the form and substance of transactions and reasonablypresent the Companys state of affairs profits and cash flows for the year endedMarch 31 2016.
There is no audit qualification in the financial statement by the statutory auditorsfor the year under review.
8. CORPORATE GOVERNANCE
As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on Corporate Governancepractices followed by the Company together with a certificate from the CompanysAuditors confirming compliance forms an integral part of this Report.
9. EXTRACT OF ANNUAL RETURN
The details as required under section 92(3) of the Companies Act 2013 read with rule12 of the Companies (Management and Administration) Rules 2014 is furnished in form MGT-9is enclosed herewith as Annexure A and forms an integral part of this Report of theDirectors.
In accordance with the provisions of section 152 of the Companies Act 2013 and theCompanys Articles of Association Shri Ranchhoddas Mohota (DIN:00247357) Directorof the company retire by rotation at the forthcoming Annual General Meeting and beingeligible offers himself for re-appointment. The Board recommends his re-appointment forthe consideration of the Members of the Company at the ensuing Annual General Meeting.
Shri Krishnakant Premkumar Tekriwal appointed on Board w.e.f. 13th April 2015. Companyat the 68th Annual General Meeting held on 30th September 2015 appointed the existingIndependent Directors Shri Girdharlal Singhee (DIN: 01479800) Shri Suresh Rathi (DIN:00474117) as independent Directors under the Companies Act 2013 for 4 consecutive yearsand Shri Krishankant Tekriwal (DIN: 00233697) and Ms. Aditi Bagri (DIN: 06943139) for 5consecutive years.
Ms. Aditi Bagri (DIN: 06943139) Director has resigned from the Board of the Companyw.e.f. 13th February 2016 due to her personal ground Vacancy of Independent Directorcaused by this resignation has been filled by Board of Directors on 13th February 2016 byappointing Smt. Ritu Kabra (DIN:07402599) as Additional Director.
As the tenure of Shri Vinod Kumar Mohota Managing Director Shri Vinay Kumar MohotaWhole Time Director and Shri Shantilal B. Singhvi Whole Time Director was ending on31.03.2016 Board of Directors in its Board Meeting held on 13th February 2016 on therecommendation of Nomination and Remuneration Committee and subject to the approval ofShareholders reappointed Shri Vinod Kumar Mohota Managing Director Shri Vinay KumarMohota Whole Time Director and Shri Shantilal B. Singhvi Whole Time Director for furtherperiod of 3 years from 01st April 2016 to 31st March 2019. The Board recommends theirre-appointment for the consideration of the Members of the Company at the ensuing AnnualGeneral Meeting.
11. KEY MANAGEMENT PERSONNEL
Company has following Key Managerial Personnel pursuant to section 203 of the CompaniesAct 2013
|Sr. No. ||Name of the Person ||Designation |
|i ||Shri Vinod Kumar Mohota ||Managing Director |
|ii ||Shri Vinay Kumar Mohota ||Whole-time Director |
|iii ||Shri Santilal B. Singhvi ||Whole-time Director |
|iv ||Shri Mukesh B. Mahajan ||Chief Financial Officer |
|v ||Shri Sachin N. Kanojiya ||Company Secretary (w.e.f. 23.06.2015) |
During the year under review Company has appointed Shri Sachin N. Kanojiya CompanySecretary as key managerial personnel of the Company pursuant to section 203 of theCompanies Act 2013. Remuneration and other details of Key Managerial Personnel for theyear ended 31st March 2016 are mentioned in the Extract of Annual Return which isattached as "Annexure A".
12. BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a structured questionnaire was preparedafter taking into consideration of the various aspects of the Boards functioningcomposition of the Board and its Committees culture execution and performance ofspecific duties obligations and governance.
The Company has received necessary declarations from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 and Regulation 16 (b) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 that the IndependentDirectors of the Company meet with the criteria of their Independence laid down in Section149(6).
The performance evaluation of the independent Directors was completed. The performanceevaluation of the Chairman and the Non-independent Directors were carried out by theindependent Directors. The Board of Directors expressed their satisfaction with theevaluation process.
13. NUMBER OF MEETINGS OF THE BOARD
During the year under consideration 9 (Nine) Board Meeting were convened and held Thedetails of the meetings of the Board and Committees held during the Financial Year2015-2016 forms part of the Corporate Governance Report.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY COMPANY
During the year under review there was no loan Guarantee or Investments made by theCompany under Section 186 of the Companies Act 2013 hence the said provision is notapplicable.
15. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has a whistle blower policy & Vigil Mechanism pursuant to theprovisions of section 177(9) & (10) of the Companies Act 2013 and as per ListingRegulation for their Directors and Employees to report their genuine concerns orgrievances. The policy has been posted on the website of the Company ( www.rsrmm.com)
16. NOMINATION AND REMUNERATION POLICY
The Company has formulated the Nomination & Remuneration policy for its Directorskey managerial personnel and other employees keeping in view the followings
the level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the company successfully;relationship of remuneration to performance is clear and meets appropriate performancebenchmarks; and remuneration to directors key managerial personnel and senior managementinvolves a balance between fixed and incentive pay reflecting short and long termperformance objectives appropriate to the working of the company and its goals:
This policy also lays down criteria for selection and appointment of Board Members.Details of this policy are explained in the Corporate Governance Report.
17. RISK MANAGEMENT POLICY
Company has developed and implements Risk Management Policy including identification ofelements of risk which in the opinion of the Board may threaten to the existence of thecompany. Board and Audit Committee periodically reviewed/evaluates the risk managementframework so that the future risk can be minimized.
18. RELATED PARTY TRANSACTION
All transactions entered with Related Parties for the year under review were onarms length basis and in the ordinary course of business and that the provisions ofSection 188 of the Companies Act 2013 are not attracted. The disclosure in form AOC-2 isattached as Annexure B. The Company has developed a Related Party Transactionsframework through Standard Operating Procedures for the purpose of identification andmonitoring of such transactions.
All Related Party Transactions are placed before the Audit Committee and also to theBoard for approval. Transactions which are of repetitive nature are reviewed on aquarterly basis and a statement giving details of all Related Party Transactions wasplaced before the Audit Committee and the Board for review and approval.
The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company. The web-link of the same has been provided in theCorporate Governance Report.
19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.
20. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of knowledge and ability hereby confirm:
(i) That in the preparation of the Annual Accounts for the year ended March 31st 2016the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
(ii) That the directors have 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 March 31st 2016and of the profit of the Company for the year ended on that date;
(iii) 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;
(iv) That the directors have prepared the annual accounts on a going concern basis;
(v) That the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(vi) That the directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
21. AUDITORS REPORT AND STATUTORY AUDIT
M/s. Batliboi & Purohit Chartered Accountant (Firm Registration Number 101048W)have been appointed as Statutory Auditors of the Company at the 67th Annual GeneralMeeting for a period of three years i.e. up to the conclusion of the Seventieth (70th) AGMof the Company to be held in the year 2017 subject to ratification by members at everyensuing AGM. Therefore ratification of appointment of Statutory Auditors is being soughtfrom the members of the Company at the ensuing Annual General Meeting as required underthe provision of section 139 of Companies Act 2013 to audit the accounts of the companyfor the FY 2016-17. The Company has received written confirmation from M/s. Batliboi &Purohit Chartered Accountants that their appointment if made would be in conformitywith limit specified in the said section.
There is no audit qualification during year under review.
The observations made in the Auditors Report are dealt with separately in theNotes to the Statement of Profit and Loss and the Balance Sheet in Note No. 23 to 39 ofthe Accounts. These are self explanatory and do not call for any further comments.
22. COST AUDITORS
As per the requirement of Central Government and pursuant to Section 148(3) of theCompanies Act 2013 and Rules 6(2) read with the Companies (Cost Records and Audit) Rules2014 as amended from time to time your Company has been carrying out audit of costrecords every year.
The Board of Directors have re-appointed M/s G. R. Paliwal & Company CostAccountants (Registration Number 100058) Nagpur as the Cost Auditors of the Companypursuant to Section 148 of The Companies Act 2013 for conducting the Cost Audit Recordsof the Company for the financial year 2016-2017 which has been approved by the CentralGovernment.
In exercise of the powers conferred by sub-sections (1) and (2) of section 469 andsection 148 of the Companies Act 2013 (18 of 2013) and in supersession of Companies (CostAccounting Records) Rules 2011; Companies (Cost Audit Report) Rules 2011 amended byCompanies (cost records and audit) Rules 2014 Cost Audit was not applicable to theTextile Industry for the year 2014-15.
23. SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethere under the Company has appointed Shri Dinesh Kumar Deora Company Secretary inPractice (Membership No. FCS 5683 C.O.P. No.4119) to undertake the Secretarial Audit ofthe Company for Financial Year 2016-17. The Secretarial Audit Report is included as AnnexureC and forms an integral part of this Report.
There is no audit qualification by the Secretarial auditor for the year under review.
24. SAFETY AND POLLUTION CONTROL
Your company accords priority to the health and safety of its employees andsurroundings. It has been taking proper care in complying with all the statutoryrequirements relating to safety environment and pollution control following are themeasures taken by your company.
1. Tree plantation in land adjacent to Mills ETP Plant.
2. Green Energy through use of Husk & Briquettes in boiler under United NationEnvironmental Programme (UNEP).
3. We have undertaken modernization on our effluent Treatment Plant. Compressed airdiffusers have been installed in dosing and aeration tanks. Results of treated effluenti.e. COD BOD pH are at par of MPCBs Norms.
4. R.O. installation work is in full swing and same will be completed within very shortperiod to recycle the water.
5. Extra bag filter installed in the boiler house to arrest even smallest emissionmaterial.
25. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with theRule 8(3) of the Companies (Accounts) Rules 2014 is given in Annexure D to thisReport.
26. PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is furnishedIn Annexure- E and forming part of the Directors Report for the year endedMarch 31 2016.
The Company at present does not have any employee drawing salary in excess of the limitspecified under section 197 of Companies Act 2013.
The company does not have any subsidiary/subsidiaries within the meaning of CompaniesAct 2013.
The Company has not accepted any deposit from public. Therefore the requirement ofChapter V of the Companies Act 2013 is not applicable to it.
29. CORPORATE SOCIAL RESPONSIBILITY (CSR)
According to the Companies Act 2013 the company is not covered under the Companies(Corporate Social Responsibility) Rules 2013.
30. SEGMENTWISE PERFORMANCE
The company has only one business segment i.e. "Textiles".
31. INTERNAL CONTROL SYSTEM AND ADEQUACY
The company has a proper and adequate internal control system to ensure that its assetsare safeguarded and protected against unauthorized use and disposition and all thetransactions are properly recorded and reported. The company also has a system ofmanagement reviews to ensure compliance with the prescribed procedures and authoritylevels.
Pursuant to section 134(5)(e) of the Companies Act 2013 company has proper andadequate internal control and Internal Financial Control system same is reviewed byCompanys Auditor together with the Risk pro (Organization of Professional withproficiency in Risk Management) the Report by auditor on the companys InternalFinancial Control System is form a part of Independent Auditors Report.
32. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION PROHIBITION & REDRESSAL) ACT 2013
The Company laid down an Anti Sexual Harassment policy in line with the requirements ofThe Sexual Harassment of Women at workplace (prevention Prohibition and Redressal) Act2013. An Internal Complaints Committee has been set up to redress complaints received inthis regard. All employees (permanent Contractual temporary trainees) are covered underthis policy.
No sexual harassment complaints were received during the year 2015-16.
33. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT
Employees are your Companys most valuable resources. Your Company continues tocreate a favorable environment at work place. The company also recognizes the importanceof training and continuously deputes its work force in various courses/seminars relatingto important management tools like Total Quality Management (TQM). Themanagement is specifically calling professionals from renowned textile research instituteslike BTRA/SITRA to train its work force. Company has taken following initiatives for skilldevelopment program for worker & staff.
1. Training to maintenance staff by qualified engineers from Voltas Ltd. MurataMachinery Saurer Schlafhorst and Toyota.
2. Shopfloor Training to technical staff on "Air Engineering" (Humidificationsystem) by B.T.R.A. a renowned Textile Research Association.
3. Training to shop floor workers/operatives by trainer from U.T.T.S. Ahmedabad whoguided them about discipline and work procedure while working on machines with propersafety for Toyota Airjet Looms.
4. Deputed staff members to attend International and National Textile Conferenceorganized by Textile Association of India.
5. Water consumption in Process reduced by 33% by adopting technical up-gradation andvalue engg.
6. Electrical power consumption reduced by 12.78% by adopting various technicalcontrols.
Following social activities held by the Company
1. Organized Blood Donation Camp on Founders Day of the Company i.e. on 29thMarch by donating 140+ bags of blood to Blood Bank.
2. During the year company organized seminar on "Stress-Management" by one ofa reputed Social and charitable Trust from Nagpur for entire staff members of the Mills.Industrial relations are cordial and satisfactory.
34. CAUTIONARY STATEMENT
Statement in this Directors Report including Management Discussion and Analysisdescribing the Companys objective projections estimates expectations orpredictions may be "forward looking statements" within the meaning of applicablesecurities laws & regulation. Actual results might differ materially from thoseexpressed or implied. Important factors that could make a difference to the companysoperations include among others economic conditions affecting demand/supply and priceconditions in the market in which the company operates changes in the Governmentregulations tax laws and other statutes and incidental factors.
The Directors wish to place on record their appreciation and gratitude for all theco-operation extended by Government Agencies Bankers Financial Institutions andShareholders. The Directors also record their sense of appreciation for the sincereservices rendered by all the Executives and Staff of the company and for their valuablecontribution in the working of the company.
| ||On Behalf of the Board |
| ||Sd/- |
|Place : Hinganghat ||Dr. Ranchhoddas Mohota |
|Dated: 30/05/2016 ||Chairman |
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso thereto
1. Details of contracts or arrangements or transactions not at arms Length Basis:Not Applicable as No contracts or arrangements or transactions entered by thecompany which not at arms Length Basis
2. Details of material contracts or arrangements or transactions at arms lengthbasis : (a) Name(s) of the related party and nature of relationship:
|Sr.No. ||Name of the related Party ||Nature of Ralationship |
|1 ||Crome Textiles Private Limited ||Directors Relatives are Directors |
|2 ||Navrang Enterprises ||Director and Relatives are Partner |
(b) Nature of contracts/arrangements/transactions:
|Sr.No. ||Name of the related Party ||Nature of Transaction ||Amount ( Rs ) |
|1 ||Crome Textiles Private Limited ||Purchase / Sales / Job Work Charges ||322531161 |
|2 ||Navrang Enterprises ||Purchase / Sales / Job Work Charges ||220084512 |
| || ||Rent ||428500 |
(c) Duration of the contracts / arrangements/transactions:
1. Except rent Transactions with party at serial no 1 & 2 are ongoing contractsand open - ended and they are terminable by mutual consent by either party.
2. Agreement with Party for Rent at serial no 2 is for the term of 3 Years renewable atthe option of Board. Board with the approval of Audit Committee renew the above agreementsfor the further term of 3 years
(d) Salient Terms of the contracts or arrangements or transactions including the valueif any: N.A.
(e) Date(s) of approval by the Board if any: transaction at sr. no 1 & 2 areapproved by Board on 30.05.2015 and by Shareholders on 30.09.2015.
(f) Amount paid as advances if any: Nil
| ||On Behalf of the Board |
| ||Sd/- |
|Place : Hinganghat ||Dr. Ranchhoddas Mohota |
|Dated: 30/05/2016 ||Chairman |
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARCH 31 2016
[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Limited Mumbai
I have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by The Rai Saheb Rekhchand MohotaSpg. & Wvg. Mills Limited (hereinafter called "the Company").Secretarial Audit was conducted in a manner that provided me a reasonable basis forevaluating the corporate conducts/ statutory compliances and expressing my opinionthereon.
Based on my verification of the Companys books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit I hereby report that in my opinion the Company has duringthe audit period covering the financial year ended March 31 2016 complied with thestatutory provisions listed hereunder and also that the Company has proper Board-processesand compliance mechanism in place to the extent in the manner and subject to thereporting made hereinafter:
I have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on March 31 2016 accordingto the provisions of:
1. The Companies Act 2013 (the Act) and the rules made thereunder;
2. The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade thereunder;
3. The Depositories Act 1996 and the Regulations and bye-laws framed thereunder;
4. Foreign Exchange Management Act 1999 and the rules and regulations made thereunderto the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial borrowings;
5. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act):-
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011; b. The Securities and Exchange Board of India (Prohibitionof Insider Trading) Regulations 2015; c. The Securities and Exchange Board of India(Registrars to an Issue and Share Transfer Agents) Regulations 1993 regarding theCompanies Act and dealing with client;
6. Provisions of the following Regulations and Guidelines prescribed under theSecurities and Exchange Board of India Act1992 (SEBI) were not applicable tothe Company under the financial year under report: try
a. The Securities and Exchange Board of India (Issue of Capital and Disclosurerequirements) Regulations 2009; b. The Securities and Exchange Board of India (EmployeeStock Option Scheme and employee Stock Purchase Scheme) Guidelines 1999; c. TheSecurities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations2008; d. The Securities and Exchange Board of India (Delisting of EquityShares) Regulations 2009; and e. The Securities and Exchange Board of India (Buyback ofSecurities) Regulations 1998; near
I further report that having regard to the compliance system prevailing in the Companyand on examination of the relevant documents and records in pursuance thereof the Companyhas complied with the following laws applicable specifically to the Company;
a Water (Prevention & Control of Pollution) Act1974; b Air (Prevention &Control of Pollution) Act1981; c Hazardous Waste ( Management & Handling )Rules1989; d The Boilers Act 1923. e Factories Act1948; f Environment (Protection)Act1986 I have also examined compliance with the applicable clauses of the following:
1. Secretarial Standards issued by The Institute of Company Secretaries of India.
2. The Listing Agreements entered into by the Company with Stock Exchanges and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
During the period under review the Company and as per the explanations given and therepresentations made by the Management the Company has generally complied with theprovisions of the Act Rules Regulations Guidelines Standards etc. mentioned abovesubject to the following observation:
(a) The Company Secretary has been appointed during the year w.e.f. 23rd June 2015
I further report that
(a) The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.
(b) Adequate notice is given to all Directors to schedule the Board Meetings agendaand detailed notes on agenda were sent at least seven days in advance and a system existsfor seeking and obtaining further information and clarifications on the agenda itemsbefore the meeting and for meaningful participation at the meeting.
(c) Decisions at the Board Meetings were taken unanimously.
(d) There are adequate systems and processes in the Company commensurate with the sizeand operations of the Company to monitor and ensure compliance with applicable lawsrules regulations and guidelines.
(e) During the audit period the Company has not undertaken event / action having amajor impact on the Companys affairs in pursuance of the above referred laws rulesregulations guidelines standards etc.
| ||Sd/- |
| ||Dinesh Kumar Deora |
| ||Practicing Company Secretary |
|Place : Mumbai ||FCS No. 5683 |
|Dated: 30/05/2016 ||C. P. No. 4119 |
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo.
The Information Under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 (3)of the Companies (Accounts) Rules 2014 for the year ended March 31st 2016 is given herebelow and forms part of the Directs Report.
I. CONSERVATION OF ENERGY
(a) Measures taken: The company is aware of the importance of conservation ofenergy and continuous efforts are being made to reduce energy cost at all levels. Specialattention is being given for the use of energy efficient equipments. During the yearfollowing majors taken by the Company.
1. Replaced the regular flurosent tube lights with new energy saver LED tube Lights atfactory
2. Up-gradation of our Effulent Treatment Plant by replacing the Air Radiator Fan withAir Blower Compressor by which power consumption reduced from 32 KW to 14 KW.
3. Converted DC motor to AC motor resulted saving of power from 11 KW to 7KW.
4. Replaced P- fan motor normal impeller to Energy efficient fan impeller in Ring Framedepartment resulting saving of approx 3.30 lacs units per year
5. Replaced old Pump with new energy efficient Pumps resulted saving of around 0.5 lacsunits per year
(b) Additional investments and proposal for reduction of consumption of energy:
The Management is committed to further identify new areas where the conventionalequipments can be replaced by latest equipments so as to reduce the consumption of varioussources of energy.
(c) Impact of the measures (a) and (b): The Company has achieved reduction inenergy costs.
Total energy consumption and consumption per unit of production in prescribed FormA is given below:
|FORM A || || |
|I. Power and Fuel Consumption ||2015-2016 ||2014-2015 |
|1. Electricity || || |
|(a) Purchased || || |
|Unit (kwh in lacs) ||213.41 ||240.67 |
|Total Amount ( In lacs) ||1431.44 ||1540.00 |
|Rate/Unit ( ) ||6.71 ||6.40 |
|(b) Own Generation (Through Diesel || || |
|Generator) || || |
|Unit (kwh in lacs) ||Nil ||Nil |
|Units per Ltr.of Diesel ||Nil ||Nil |
|Cost/Unit ( ) ||Nil ||Nil |
|2. Furnace Oil / L.S.H.S. ||N. A. ||N. A. |
|3. Rice Husk/ Coal/Briquettes (Boiler) || || |
|Quantity (M. T.) ||9938.07 ||10533.58 |
|Total Cost (Rs in Lacs) ||528.16 ||404.58 |
|Average Rate ( per M.T.) ||5314.51 ||3840.87 |
In view of composite nature of its Textile Business it is not possible to express theconsumption of power & fuel per unit of productions.
II. TECHNOLOGY ABSORPTION
Efforts made in technology absorption as per Form B is given below:
I. Research and Development (R & D)
1. Specific areas: The R & D activities of the Company are aimed atquality control and improvement/up-gradation of the product range.
2. Benefits derived: Improvement in product quality development of newvalue added products and cost effectiveness.
3. Future plan of action: Development of more value added products andmaking the product more cost effective.
4. Expenditure on R & D: Expenditure on Research & Development aredifficult to ascertain as the same staff and equipments are used for production andquality control.
II. Technology Absorption adoption and innovation:
|1. Efforts made ||: Sustained efforts are being made towards upgrading the process technology. |
|2. Benefits derived ||: The Company has been able to improve the quality of its existing products |
|3. Particulars of technology imported ||: Nil |
III. FOREIGN EXCHANGE EARNINGS AND OUTGO :
|(a) Efforts ||: Various efforts are being made to explore and secure new export market for Companys products. |
| || ||( in lacs) |
|(b) Earning and outgo : ||2015-16 ||2014-15 |
|i) Foreign Exchange earning : ||4230.71 ||6074.81 |
|ii) Foreign Exchange outgo : ||30.42 ||99.12 |
DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014
The percentage increase in remuneration of each Director Chief Financial Officer andCompany Secretary during the financial year 2015-16 ratio of the remuneration of eachdirector to the median remuneration of the employees of the company for the financial year2015-16 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under:
|Sr. No. ||Name of the Director & Key Managerial Person (KMP) and Designation ||Remuneration to Director & KMP for the Financial Year 2015-16 Amt in Rs. ||% Increase in the remuneration in the Financial Year 2015-16 ||Ratio of Remuneration of each director to median remuneration of employee ||Comparison of the remuneration of the KMP against the performance of the company |
|1 ||Shri Ranchhoddas Mohota Chairman & Non executive Director ||Nil ||-- ||-- ||-- |
|2 ||Shri Vinod kumar Mohota Managing Director ||1276800/- ||6.51% ||9.84 || |
|3 ||Shri Vinay kumar Mohota Executive Director ||1142400/- ||7.21% ||8.80 ||Profit before tax increase by 38.24% and profit after tax Increase by 55.64% in the Financial year |
|4 ||Shri Shantilal B. Singhvi Executive Director ||505400/- ||6.95% ||3.89 ||2015-16 |
|5. ||Shri G.G.Singhee Non Executive Director ||Nil ||-- ||-- || |
|6. ||Shri Suresh Rathi Non Executive Director ||Nil ||-- ||-- || |
|7. ||Krishnakant Tekriwal * Non Executive Director ||Nil ||-- ||-- || |
|8. ||Ms. Aditi Bagri * Non Executive Director ||Nil ||-- ||-- || |
|9. ||Smt. Ritu Kabra ** Non Executive Director ||Nil ||-- ||-- || |
|10. ||Mr. Mukesh B. Mahajan Chief Financial Officer ||707668/- ||16.97% ||Not Applicable ||Profit before tax increase by 38.24% and profit after tax Increase by 55.64% in the Financial year 2015-16 |
|11. ||Mr. Sachin N. Kanojiya Company Secretary & Compliance officer ||263507/- ||# ||Not Applicable || |
(ii) The median remuneration of employees of the Company during the financial year was129793/-(iii) In the financial year there was an increase of 4.84% in the medianremuneration of employees; (iv) There were 1546 permanent employees on the rolls ofcompany;
(v) Relationship between average increase in remuneration and company performance:
The Profit after Tax for the financial year ended March 31 2016 increased by 55.64%whereas the Average increase in the remuneration was 6.80%. The average increase inremuneration was in line with the performance of the Company.
(vi) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company: The total remuneration of Key Managerial Personnel Increasedby 9.41% from 33.42 Lacs (#) in 2014-15 to 36.32 Lacs in 2015-16 whereas the Profit AfterTax increased by 55.64% to 334.50 Lacs in 2015-16
( 214.92 Lacs in 2014-15).
(vii) a) Variations in the market capitalisation of the company. The marketcapitalisation as on March 31
2016 was 167.32 Crore ( 207.46 Crore as on March 31 2015)
b) Price Earnings ratio of the Company is 54.87 as at March 31 2016 and was 111.09 asat March 31
(viii) Average percentile increase made in the salaries of employees other than themanagerial personnel in the last financial year was 6.88% and the percentile increase inthe managerial remuneration was 9.41% and increase in the remuneration is based onperformance and the Remuneration policy of the company
(x) The key parameters for any variable component of remuneration availed by thedirectors are considered by Board of Directors based on the recommendations of theNomination and Remuneration Committee as per the Remuneration Policy for Directors KeyManagerial Personnel and other Employees.
(xi) The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year was 1.065: 1
(xii) It is hereby affirmed that the remuneration paid is as per the RemunerationPolicy for Directors Key Managerial Personnel and other Employees. (* Shri KrishnakantPremkumar Tekriwal appointed on Board w.e.f. 13th April 2015 and Smt. Ritu Kabraappointed on Board w.e.f. 13th February 2016.
** Ms. Aditi Bagri (DIN: 06943139) has resigned from the Board of the Company w.e.f.13th February 2016
# Details not given/Included as Mr. Sachin. N. Kanojiya was appointed on 23.06.2015 andnot employee in the Financial Year 2014-15)