Shri Dinesh Mills Limited.
Your Directors have pleasure in presenting their Report together with the AnnualFinancial Statement for the year ended 31st March 2017
|1. PERFORMANCE OF THE COMPANY || ||(Rs.in Lakhs) |
|PARTICULARS ||2016-2017 ||2015-2016 |
|SALES TURNOVER (NET) ||7929 ||7809 |
|PROFIT BEFORE DEPRECIATION INTEREST & TAX (PBDIT) ||1113 ||1214 |
|NET PROFIT ||244 ||290 |
Your Directors have recommended for your consideration Dividend of Rs. 1.50 per Equityshare (Previous year Rs.1.50 per Equity share) on 5084382 equity shares of Rs.10/- eachamounting to Rs. 7626573/- for the financial year ended 31st March 2017.
3. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND(IEPF)
The Company has already transferred unclaimed dividend upto financial year 2008- 2009to IEPF during the year under review. The Dividend for the financial year 2009-2010 willbe transferred to IEPF in the current financial year i.e. 2017-2018 on due date asmentioned in the Note No. 5 of the ensuing 82nd AGM Notice.
4. MANAGEMENT DISCUSSION AND ANALYSIS A. OVERALL REVIEW OF OPERATIONS
We are a composite textile sector company manufacturing woolen / worsted suiting andmachine clothing (felt). The Company manufactures and markets high quality products underthe brand name 'dinesh'. There are few organized sector companies and many companies arein un-organized sector and the Company has to face cut throat competition in the domesticand international markets. The Textile Industry is labour & capital intensive and oneof the largest employers in India and the industry has to face various internal &external challenges and our Company is not an exception to these challenges. Despitesluggish domestic & international markets and intense competition on prices ourCompany could achieve marginal increase in the sales turnover of Rs.7929/- Lakhs but thenet profit has been reduced to Rs.244/- Lakhs during the year under review as compared toRs.7809/- Lakhs and Rs.290/- Lakhs respectively of the previous year.
B. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONALPERFORMANCE
|Highlights || ||(Rs. in Lakhs) |
|Sr. No. Particulars ||2016 - 2017 ||2015 - 2016 |
|1 Sales Turnover (Net) ||7929 ||7809 |
|2 Operating profit (PBDIT) ||1113 ||1214 |
|3 Depreciation ||754 ||745 |
|4 Interest ||207 ||220 |
|5 Profit before Tax ||152 ||249 |
|6 Provision for Taxation ||(92) ||(41) |
|7 Net Profit ||244 ||290 |
C. OVERALL OUTLOOK
Demonetization of currency notes has created liquidity crisis which has adverselyaffected the sales turnover of Suiting Division. However due to increase in the salesturnover of Industrial Fabrics Sales turnover of the Company was marginally increasedduring the year under review. The Global economy is expected to be sluggish and demand fortextile products would be low. The supply of fabrics by China on very low prices wouldcontinue to put pressure on prices and profits. However our Company is taking appropriatesteps to mitigate the adverse impact to the extent possible.
The Company assumes no responsibility in respect of forward looking statements madeherein above which may substantially change based on subsequent developments eventschange in the Government policies exchange rate etc. over the globe.
D. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Internal Audit department conducts audit of all departments of the Company andplaces Audit reports/ plans before the Audit Committee which reviews adequacy of internalaudit functions audit procedures and its coverage periodically. The minutes of the AuditCommittee meetings are placed at the meetings of the Board of Directors from time to time.The Company has adopted the concept of pre-audit and therefore the mistakes if any arerectified before the transactions are finally booked in the Accounts of the Company.
E. INDUSTRIAL RELATIONS
The industrial relations both at Baroda and Ankleshwar units have remained cordial. Ason 31st March 2017 there were 930 employees in the Company.
5. MATERIAL CHANGES AND COMMITMENT IF ANY
There are no other material changes and commitments affecting the financial position ofthe Company occurred from 1st April 2017 to the date of this Report.
6. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure- "A" attached to this Report.
7. RISK MANAGEMENT
The Company has been taking appropriate actions pursuant to Risk Management Policy fromtime to time to mitigate adverse impact of various Risks which may adversely affect theperformance of the Company and may threaten the very existence of the Company. Theprovisions relating to Risk Management Committee is not applicable to the Company.
8. THE CORPORATE SOCIAL RESPONSIBILITY
As the provisions relating to the Corporate Social Responsibility (CSR) as prescribedu/s. 135 of the Companies Act 2013 along with Rules made thereunder are not applicable toour Company and therefore neither the CSR Committee nor the CSR Policy are required to beframed by the Company.
9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the year under review the Company has not given any loans guarantees or madeinvestments pursuant to Section 186 of the Companies Act 2013.
10. THE RELATED PARTY TRANSACTIONS
During the year under review the transactions with Related Parties were not materialentered into in the ordinary course of business and on Arms' length basis. However asGood Corporate Governance practice the particulars of Related Parties transactions aregiven in Note No. 31 attached to the Annual Financial Statement.
11. AUDITORS REPORTS
The Auditors' Report issued by M/s. Dhirubhai Shah & Doshi on the Accounts isself-explanatory and therefore does not call for any explanation. There were noqualifications reservations or adverse remarks made by the above referred StatutoryAuditors.
The Secretarial Audit Report issued by the Secretarial Auditor M/s. Kashyap Shah &Co. Practicing Company Secretaries Vadodara is self explanatory and therefore does notcall for any explanation except the penalty paid by the Company to the BSE Ltd. for 7 daysdelay in submission of Un-audited Financial Results for the quarter & nine monthsended 31st December 2016 due to automatic adjournment of the Board Meeting for want ofquorum from 14/02/2017 to 21/02/2017. There were no other qualifications reservations oradverse remarks made by the above referred Secretarial Auditor. The copy of theSecretarial Audit Report is attached as Annexure - "B" to this Report.
12. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES
The appointment of Directors Key Managerial Personnel (KMP) payment of remunerationand discharge of their duties are as per the Remuneration Policy framed by the Companypursuant to Section 178(3) of the Companies Act 2013. The Remuneration Policy can beviewed at Company's website www.dineshmills.com in "Investors" Section
13. WOMAN HARRASSMENT
The Company has formed the Committee to deal with the complaints if any regardingsexual harassment of woman employees and no complaint was received by the Committee duringthe financial year 2016 - 2017.
14. ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and Administration) Rules 2014 is furnished in Annexure -"C" attached to this Report.
15. THE MEETINGS OF THE BOARD OF DIRECTORS
During the year under review six meetings of Board of Directors of the Company wereheld on 30/05/2016 11/08/2016 27/09/2016 11/11/2016 21/02/2017 and 29/03/2017.
16. KEY MANAGERIAL PERSONNEL (KMP) AND REMUNERATION
Shri Bharatbhai Patel Chairman & Managing Director Shri J B Sojitra CompanySecretary and Shri Sudip Ray Chief Financial Officer are the KMP of the Company pursuantto Section 203 of the Companies Act 2013 and the Rules made thereunder.
During the year under review Shri M. B. Thummar resigned as Chief Financial Officer(CFO) of the Company w.e.f 01/02/2017 and Shri Sudip Ray has been appointed as CFO w.e.f.30th May 2017.
REMUNERATION ETC. PURSUANT TO SECTION 197(12) AND THE RULES MADE THEREUNDER ARE ASUNDER:
a) The ratio of the Remuneration of each Director to the median employee's remunerationfor the financial year and such other details as given hereunder:
(1) Name : Shri Bharatbhai Patel (Chairman & Managing Director) Ratio: 84:1 (2)Name: Shri Nimishbhai Patel (Managing Director) Ratio: 84:1
b) The percentage increase in Remuneration of each Director Chief Financial OfficerCompany Secretary during the financial year:
(1) Shri Bharatbhai Patel - Chairman & Managing Director : NIL% (2) Shri NimishbhaiPatel - Managing Director : NIL% (3) Shri M. B. Thummar-Chief Financial Officer (Upto31/01/2017): NIL% (4) Shri J. B. Sojitra - Company Secretary : 6.37%
c) The percentage increase in the median remuneration of employees in the financialyear: 3.37%
d) The number of permanent employees on the Roll of the Company: 930
e) The explanation on the relationship between average increase in Remuneration andCompany performance: The Net Profit of the Company has been adversely affected but toretain the employees normal increments are given also considering the inflation. Howeverthere is no increase in the managerial remuneration of Shri Bharatbhai Patel and ShriNimishbhai Patel Managing Directors of the Company during the year under review.
f) Comparison of the Remuneration of the Key Managerial Personnel (KMP) against theperformance of the company: The turnover has been marginally improved whereas theprofitability of the Company has been reduced from Rs. 290 Lakhs to Rs. 244 Lakhs. TheCompany has given normal yearly increment to KMP (excluding the remuneration of ManagingDirectors).
17. CORPORATE GOVERNANCE
The Report on Corporate Governance pursuant to the provisions of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 alongwith the certificate ofM/s. Dhirubhai Shah & Doshi Chartered Accountants Auditors of the Company areattached herewith as Annexure - "D" and Annexure - "E" respectively.
18. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company has only one Subsidiary Company viz. Dinesh Remedies Ltd. engaged inmanufacturing of Empty hard Gelatin Capsules Shells at Village Mahuvad Haranmal RoadPadra-Jambusar Highway Taluka Padra District Vadodara - 391 440. There are no otherJoint Ventures and Associate companies.
The Company has neither accepted nor renewed any deposits pursuant to Section 73 and 76of the Companies Act 2013 and Rules made thereunder during the financial year 2016 -2017.
During the year under review Shri A. T. Patel Independent Director and ShriUpendrabhai Patel Chairman Emeritus of the Company had resigned with effect from 31stMay 2016.
Shri Upendrabhai Patel Ex-Chairman Emeritus passed away on 14th February 2017. TheBoard appreciates the valuable contribution and guidance given by late Shri UpendrabhaiPatel during his tenure.
Pursuant to Section 149 and 152 of the Companies Act 2013 read with the Companies(Appointment and Qualification of Directors) Rules 2014 Independent Directors are notliable to retire by rotation whereas other Directors are liable to retire by rotation andaccordingly Shri Bharatbhai Patel Chairman & Managing Director of the Company wouldretire by rotation and being eligible offer himself for re-appointment. The particularsof the Director retiring by rotation and seeking re-appointment have been given in theNotice of the ensuing 82nd Annual General Meeting of the members of the Company.
21. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors have given the declaration that they meet the criteria ofindependence as provided in Section 149(6) of the Companies Act 2013 read with Rules madethereunder.
22. PERFORMANCE EVALUATION OF DIRECTORS
The performance evaluation of all the Directors including Independent Directors and theBoard as a whole which includes the Committees thereof was done on 29th March 2017 as perthe Performance Evaluation Policy of the Company.
As per provisions of the Companies Act 2013 read with Rules made thereunder aseparate meeting of the Independent Directors was held on 29th March 2017 to consider thefollowing agenda: a) Review the performance of Non-Independent Directors and the Board asa whole. b) Review the performance of the Chairperson of the Company. c) Asses theefficacy and adequacy of flow of information.
Except Mrs. Tarunaben Patel all other Independent Directors of the Company werepresent in the meeting held on 29th March 2017 and they considered the above referredagenda.
23. STATUTORY AUDITORS
The tenure of M/s. Dhirubhai Shah & Doshi Chartered Accountants Ahmedabad wouldexpire on the conclusion of the ensuing 82nd Annual General Meeting. The Company hasreceived a letter dated 15th May 2017 from the above referred Auditors to the effectthat if they are reappointed it would be in accordance with the provisions of Section141 of the Companies Act 2013. The continuance of appointment and payment of remunerationto M/ s. Dhirubhai Shah & Doshi Chartered Accountants are proposed to be approved inthe ensuing 82nd Annual General Meeting.
24. COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM
Presently the Audit Committee consists of three Independent Directors viz. Shri RakeshAgrawal Shri T. M. Patel and Shri Sanjiv Shah.
The Board of Directors of the Company had established the Vigil Mechanism pursuant toSection 177(9) of the Companies Act 2013 and Rules made for Directors and Employees toreport their genuine concerns.
However there were no instances reported to the Chairman of the Audit Committee duringthe year under review. The Whistle Blower Policy can be viewed at Company's websitewww.dineshmills.com in "Investors" Section.
(a) BUY BACK OF SECURITIES: The Company has not bought back any of itssecurities during the year under review.
(b) SWEAT EQUITY: The Company has not issued any Sweat Equity Shares during theyear under review. (c) BONUS SHARES: No Bonus Shares were issued during the yearunder review.
(d) EMPLOYEES STOCK OPTION PLAN: The Nomination Remuneration & CompensationCommittee at its meeting held on 21st February 2017 granted 54000 Options to theemployees pursuant to "Shri Dinesh Mills Ltd. - Employees Stock Option Scheme2016". The Options granted can be exercised within three months from the date ofvesting at the price of Rs.10/- per equity share as per the Vesting Schedule givenhereunder:
|Vesting Schedule: ||(1) 30% of the Options granted (i.e. 16200 Options) will be vested on 20th February 2018 |
| ||(2) 30% of the Options granted (i.e. 16200 Options) will be vested on 20th February 2019 and |
| ||(3) The balance 40% (i.e. 21600 Options) of the Options granted will be vested on 20th February 2020 |
26. EMPLOYEES' REMUNERATION:
The details of the remuneration paid to the employees during the year under review aregiven in the Annexure - "F" to this Report pursuant to Rule 5(2) of theCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014.
All the properties of the Company including buildings plant & machinery and stockshave been insured.
28. DIRECTORS RESPONSIBILITY STATEMENT
Your Directors confirm that:
(a) in the preparation of the Annual Accounts for the financial year 2016-2017 theapplicable Accounting Standards had been followed along with proper explanation relatingto material departures;
(b) 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 at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequateAccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the Directors had prepared the Annual Accounts on a going concern basis;
(e) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Board of Directors thanks all the stakeholders viz. shareholders customerssuppliers bankers employees for their support during the year under review.
| ||For and on behalf of the Board of Directors |
|Place : Vadodara || |
|Date : 30th May 2017 ||BHARAT PATEL |
| ||CHAIRMAN |