Your Directors are pleased to present the 101 Annual Report of your Company togetherwith the Audited Financial Statements for the year ended 31 March 2017.
1. Financial Results
The financial performance of the Company for the year ended 31 March 2017 issummarized below:
|Particulars ||For the year ended ( Rs In Lakhs) |
| ||31 March 2017 ||31 March 2016 |
|1. Total Revenue ||21977 ||22907 |
|2. Finance Costs ||1064 ||1305 |
|3. Depreciation and Amortization Expense ||1447 ||1956 |
|4. Profit before Tax ||4642 ||5004 |
|5. Provision for Tax including Current Tax adjustments of Earlier Years. ||886 ||926 |
|6. Provision for Deferred Tax ||(94) ||(151) |
|7. Profit after Tax Prior period and Exceptional Items ||3756 ||4078 |
2. STATE OF COMPANY'S AFFAIR
i) Textiles and Real Estate Division
The revenue from the textiles activity was Rs. 17500 Lakhs as compared to Rs. 18080Lakhs in the previous year. The operating profit for the year was Rs. 2382.44 Lakhsagainst Rs. 2455.91 Lakhs in the previous year. The lower turnover and operating profitwas due to slackless due demonetisation and uncertainty and lack of clarity on theprovisions and implementation of Goods and Service Tax Act (GST). There was disruption ofoperations due to Power shut down by Maharashtra State Electricity Board (MSEB) on 07February 2017 pursuant to Maharashtra Pollution Control Board (MPCB) instructions due tonon-operation of Common Effuelent Treatment Plant (CETP).
The revenue from real estate activity was Rs. 2715.54 Lakhs as compared to Rs.3176.01 Lakhs in the previous year. The operating profit for the year was Rs. 2313.27Lakhs as against Rs. 2715.01 Lakhs in the previous year.
ii) Land Development at Dadar
The construction of office building structure is complete as per approved plan underthe earlier Development Control Rules (DCR). The State Government has notified modifiedDevelopment Control Rules in 2012 wherein plans approved under the old Development ControlRules have an option to comply with the new DCR. The Company has filed its application forOccupancy Certificate for the balance floors which is being processed by the MunicipalCorporation.
Your Directors have after assessing the need for corporate requirement recommended adividend at the rate of 35 % i.e of Rs. 1.75 (One Rupee Seventy Five paise) per share on16720000 equity shares of Rs. 5/- each aggregating to Rs. 292.60 lakhs.
The dividend will be paid after your approval at the ensuing Annual General Meeting.The aggregate outflow on account of the equity dividend for the year would be Rs. 352.17lakhs including tax on dividend.
4. TRANSFER TO RESERVES:
No amount has been transferred to General Reserve.
5. REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES
During the year under review your Company did not have any subsidiary associate orjoint venture company.
6. PUBLIC DEPOSITS
The Company has not accepted deposits from the public within the meaning of Section 73of the Companies Act 2013 and rules framed there under.
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Appointment / Reappointment / Re-designation
Shri Viraj Manharlal Shah Managing Director will retire by rotation and being eligiblefor reappointment and not being disqualified under Section 164 of the Companies Act 2013offer himself for re-appointment. The Board recommends his reappointment.
Shri Hiren M. Shah was re-designated as Executive Chairman of the Company with effectfrom 10 November 2016 for the remaining period ending on 31 March 2019 on the same termsand conditions.
Shri Bharat M. Shah was re-designated as Managing Director of the Company with effectfrom 10 November 2016 for the remaining period ending on 31 March 2019 on the same termsand conditions.
Shri Viraj M. Shah was re-designated as Managing Director of the Company with effectfrom 10 November 2016 for the remaining period ending on 31 March 2019 on the same termsand conditions.
With a view for smooth transition to the next generation and in order to groom andtrain the next generation Shri. Manharlal C.
Shah resigned from the Board with effect from 10 November 2016. The Company expressesit sincere gratitude towards Shri Manharlal C. Shah's invaluable contribution towards thegrowth of the Company. He has since been appointed as Chairman Emeritus and continues tolead the team as an advisor with same responsibilities and duties.
Shri. Jimmy D. Masani who was appointed as Independent Director of the Company expiredon 24 March 2017. The Directors express their deep sorrow on the sad demise of Shri. JimmyD. Masani. May almighty God grant peace to his soul.
Except above there are no changes in the composition of the Board of Directors.
(ii) Key Managerial Personnel
The Board on the recommendation of Nomination and Remuneration Committee appointedShri. Nikhil Sankpal as the Company Secretary and Compliance officer of the Companyeffective from 23 January 2017.
Shri. Purav H. Shah was appointed as Chief Executive Officer (CEO) of the Company witheffect from 10 November 2016 by the Board on the recommendation of Nomination andRemuneration Committee.
(iii) Declaration by Independent Directors
The Company has received the necessary declarations from each of Independent Directorsof the Company pursuant to Section 149(7) and provisions of Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 each of themmeets the criteria of independence laid down in Section 149(6) of the Companies Act 2013and Regulations of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 and there has been no change in thecircumstances which may affect their status as independent director during the year.
(iv) Annual Evaluation of Board
Pursuant to the provisions of the Companies Act 2013 and relevant Regulations ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has carried out the annual performance evaluation of its ownperformance and other Directors. A structured questionnaire was prepared after taking intoconsideration inputs received from the Directors covering various aspects of the Board'sfunctioning such as adequacy of the composition of the Board and its Committees Boardculture execution and performance of specific duties obligations and governance. Aseparate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment.
Performance evaluation of independent directors was done by the entire board excludingthe independent director.
In a separate Meeting of Independent Directors held on 06 March 2017 performance ofnon-independent directors performance of the board as a whole and performance of theChairman was reviewed and evaluated taking into account the views of executive directorsand non-executive directors. The same was discussed in the board meeting that followed themeeting of the independent directors.
v) Number of Board Meetings
During the Financial year 2016-17 total 6 (Six) meetings of the Board of Directorswere held on 30 May 2016 4 August 2016 19 September 2016 10 November 2016 23January 2017 and 8 February 2017 respectively. For details of the meetings of the boardplease refer to the Corporate Governance Report which forms part of this report.
8. DIRECTOR'S RESPONSIBILITY STATEMENT
The Board of Directors acknowledge the responsibility for ensuring compliance with theprovisions of Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 in thepreparation of the annual accounts for the year ended on 31 March 2017 and state that:-
i. In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
ii. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31 March 2017 and of the profit ofthe Company for the year on that date;
iii. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
iv. The Directors had prepared the annual accounts on a going concern basis; and
v. The Directors had laid down proper systems of internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.
vi. The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively
9. NOMINATION AND REMUNERATION POLICY
The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence of a Director and policy relating toremuneration for Directors Key Managerial Personnel and other employees. The policy ofwhich has been uploaded on the Company's website at the followinglink-http://www.rubymills.com/investors/policies/nomination-cum-remuneration-policy.
10. AUDIT COMMITTEE:
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.
11. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES
The Company promotes ethical behavior in all its business activities and has put inplace a mechanism for reporting illegal and unethical behavior.
The Board of Directors of the Company has pursuant to the provisions of Section 177 (9)of the Companies Act 2013 read with Rule 7 of the Companies (Meetings of Board and itsPowers) Rules 2014 framed "Vigil Mechanism Policy" for Directors and employeesof the Company to provide a mechanism which ensures adequate safeguards to employees andDirectors from any victimization on raising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc. which has been uploaded on the Company's website at the followinglink-http://www.rubymills.com/investors/policies/vigil-mechanismwhistle-blower-policy
The employees of the Company have the right/option to report their concern/grievance tothe Chairman of the Audit Committee. The Company is committed to adhere to the higheststandards of ethical moral and legal conduct of business operations.
During the year under review no employee was denied access to the Chairman of the AuditCommittee.
12. RISK MANAGEMENT
The Board of Directors of the Company during the financial year 2014-15 has designedRisk Management Policy and Guidelines to avoid events situations or circumstances whichmay lead to negative consequences on the Company's businesses and has defined astructured approach to manage uncertainty and to make use of these in their decisionmaking pertaining to all business divisions and corporate functions. Key business risksand their mitigation are considered in the annual/strategic business plans and in periodicmanagement reviews. At present there is no identifiable risk which in the opinion of theBoard may threaten the existence of the Company.
13. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo arefurnished in "Annexure A" which forms part of this Report.
14. EXTRACT OF ANNUAL RETURN:
Extract of the Annual Return in form MGT-9 for the financial year ended 31 March 2017made under the provisions of Section 92(3) of the Act is attached as "AnnexureB" which forms part of this Report.
15. CORPORATE SOCIAL RESPONSIBILITY:
The Annual Report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014 on CSR activities is attached as "Annexure C"and forms a part of this Report. For other details regarding the CSR Committee pleaserefer to the Corporate Governance Report which forms part of this report. The CorporateSocial Responsibility policy of which has been uploaded on the Company's website at thefollowinglink-http://www.rubymills.com/investors/policies/corporate-social-responsibility-philosophy.
16. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
During the year under review no significant and material orders were passed by theregulators or courts or tribunals impacting the going concern status and the Company'soperations.
(i) Statutory Auditors
M/s. B.S. Mehta & Co. Chartered Accountants (Firm Registration No. 106190W)Statutory Auditors of the Company hold office until the conclusion of the ensuing AnnualGeneral Meeting and are not eligible for re-appointment. The Company has received a letterfrom M/s. CNK & Associates LLP (Firm Registration No. 101961W) Chartered Accountantsto the effect that their appointment if made would be within the prescribed limits underSection 139 (1) of the Companies Act 2013 read together with Rule 4 of Companies (Auditand Auditors) Rules 2014.
Members are requested to appoint M/s. CNK & Associates LLP Chartered Accountantsas the Statutory Auditors of the Company.
(ii) Secretarial Auditor
The Board has appointed M/s. Vikas R. Chomal & Associates Company Secretaries inPractice to undertake the Secretarial Audit of the Company for the financial year2016-2017. The Report of the Secretarial Audit Report is annexed herewith as"Annexure D".
(iii) Cost Auditor and Cost Audit Report
During the year under review Shri. Dakshesh H. Zaveri Cost Accountant has beenappointed as Cost Auditor of the Company for the F.Y. 2016-2017 to carry out the CostAudit for auditing cost accounting Records in respect of the Textile Segment of theCompany and to submit Cost Audit Report to the Board as required under Section 148 of theCompanies Act 2013 and the Companies (Cost Records and Audit) Amendment Rules 2014.
(iv) VAT Auditor
The Board has appointed M/s. Hemant V. Shah Chartered Accountants as the VAT Auditorto conduct the VAT Audit for the F.Y. 2016-17.
18. (i) Green Initiatives
Pursuant to Sections 101 and 136 of the Companies Act 2013 the Company will be sendingAnnual Report through electronic mode i.e. email to all the shareholders who haveregistered their email addresses with the Company or with the Depository to receive AnnualReport through electronic mode and initiated steps to reduce consumption of paper.
(ii) Human Resources
Employees are considered to be team members being one of the most critical resources inthe business which maximize the effectiveness of the Organization. Human resources buildthe Enterprise and the sense of belonging would inculcate the spirit of dedication andloyalty amongst them towards strengthening the Company's Polices and Systems. The Companymaintains healthy cordial and harmonious relations with all personnel and therebyenhancing the contributory value of the Human Resources.
(iii) Environment and Safety
The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances environmental Regulations and preservation ofnatural resources. There was no major accident during the year.
19. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
No material changes and commitments which could affect the Company's financial positionhave occurred between the end of the financial year of the Company and date of thisreport.
20. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
There are adequate internal financial controls in place with reference to the financialstatements. During the year under review these controls were evaluated and no significantweakness was identified either in the design or operation of the controls.
21. PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
All Related Party Transactions entered into by your Company during the Financial Year2016-17 were on arm's length basis and in the ordinary course of business. There are nomaterial significant Related Party Transactions entered into by the Company withPromoters Directors Key Managerial Personnel or other Designated Persons which may havea potential conflict with the interest of the Company. Prior approval of the AuditCommittee and the Board of Directors of the Company was obtained for all the Related PartyTransactions. Accordingly the disclosure of Related Party Transactions as required underSection 134(3)(h) of the Companies Act 2013 in Form AOC-2 is not applicable. Attention ofShareholders is also drawn to the disclosure of transactions with related parties as setout in Note No. 33 of Financial Statements forming a part of the Annual Report.
22. PARTICULARS OF EMPLOYEES:
The prescribed particulars of employees required under Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is attached as"Annexure E" and forms a part of this Report of the Directors.
There were no employees except the Executive Chairman Managing Directors of theremuneration of Rs. One Crore and Two Lakhs per annum or more or Rs. Eight Lakhs FiftyThousand per month or more during the year under review. However Shri Manharlal Shahdrew a total remuneration of Rs. 15000000 of which Rs. 9144854 as Executive Chairmanand Rs. 5855146 as Chairman Emeritus of the Company.
23. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013.
The Company has set up an Internal Complaints Committee (ICC) for providing a Redressalmechanism pertaining to Sexual harassment of women employees at workplace. There was nocases/ complaint received during the year under review.
24. PARTICULARS OF LOANS GUARANTEE OR INVESTMENTS UNDER SECTION 186:
Loans guarantees and investments covered under Section 186 of the Companies Act 2013forms part of the notes to financial statements provided in this Annual Report.
25. DISCLOSURE REQUIREMENTS:
As per relevant regulations of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 Corporate Governance Reportwith auditor's certificate thereon and Management Discussion and Analysis are attachedwhich form part of this Annual Report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
I. The Company has not issued any shares with differential rights and hence noinformation as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of theCompanies (Share Capital and Debenture) Rules 2014 is furnished.
II. The Company has not issued any sweat equity shares during the year under review andhence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13)of the Companies (Share Capital and Debenture) Rules 2014 is furnished.
III. The Company has not issued any equity shares under Employees Stock Option Schemeduring the year under review and hence no information as per provisions of Section62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture)Rules 2014 is furnished.
IV. During the year under review there were no instances of non-exercising of votingrights in respect of shares purchased directly by employees under a scheme pursuant toSection 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures)Rules 2014 is furnished.
V. No orders have been passed by any Regulator or Court or Tribunal which can have animpact on the going concern status and the Company's operations in future.
27. CHANGE IN THE NATURE OF BUSINESS:
There was no change in the nature of Company's business during the year under review.
The Company has two segments namely Textile and Real Estate. The Statement of accountsprepared and submitted are therefore of two segments.
Your Directors thank all the shareholders all employees of the Company customerssuppliers Government Authorities Financial Institutions and bankers for their continuedsupport.
You Directors look forward to their continued support in future.
| ||For and on behalf of the Board |
| ||For The Ruby Mills Limited |
| ||Hiren M. Shah |
|Place: Mumbai ||Executive Chairman |
|Dated: 14 August 2017 ||DIN: 00071077 |