Shri Dinesh Mills Limited.
Your Directors have pleasure in presenting their Report together with the AnnualFinancial Statement for the year ended 31st March 2016
1. PERFORMANCE OF THE COMPANY
| || ||(Rs.in Lacs) |
|PARTICULARS ||2015 - 2016 ||2014 - 2015 |
|SALES TURNOVER (NET) ||7808.67 ||8049.08 |
|GROSS PROFIT ||994.52 ||1192.60 |
|Less: (A) Depreciation ||745.26 ||787.62 |
|(B) Provision for Taxation || || |
|(i) Current Tax ||14.04 ||45.72 |
|(ii) Deferred Tax ||(55.21) ||(94.78) |
|NET PROFIT ||290.43 ||454.04 |
|Add: Previous Year's Surplus ||183.11 ||189.22 |
|Profits available for Appropriation ||473.54 ||643.26 |
|Appropriating therefrom: || || |
|(A) Proposed Dividend ||76.27 ||91.52 |
|(B) Dividend Tax on above ||15.52 ||18.63 |
|(C) General Reserve ||0.00 ||350.00 |
|(D) Surplus carried to B/S. ||381.75 ||183.11 |
Your Directors have recommended for your consideration Dividend of Rs. 1.50 per Equityshare (Previous year Rs.1.80 per Equity share) on 5084382 equity shares of Rs.10/- eachamounting to Rs. 7626573/- for the financial year ended 31st March 2016.
3. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND(IEPF)
The Company has already transferred unclaimed dividend upto financial year 2007- 2008to IEPF during the year under review. The Dividend for the financial year 2008-2009 willbe transferred to IEPF in the current financial year i.e. 2016-2017 on due date asmentioned in the Note No. 5 of the ensuing 81st 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 sales turnover of Rs.7809/- Lacs and the net profit of Rs.290/- Lacsduring the year under review as compared to Rs.8049/- Lacs and Rs.454/- Lacs respectivelyof the previous year.
B. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONALPERFORMANCE
|Highlights || ||(Rs. in Lacs) |
|Particulars ||2015 - 2016 ||2014 - 2015 |
|1 Sales Turnover (Net) ||7809 ||8049 |
|2 Operating profit (PBDIT) ||1214 ||1464 |
|3 Depreciation ||745 ||788 |
|4 Interest ||220 ||271 |
|5 Profit before Tax ||249 ||405 |
|6 Provision for Taxation ||(41) ||(49) |
|7 Net Profit ||290 ||454 |
C. OVERALL OUTLOOK
Global slow-down and intense competition in the Domestic market would likely toadversely affect the sales turnover and profitability of the Company. However our Companyis taking appropriate steps 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 unit have remained cordial. Ason 31st March 2016 there were 974 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 2016 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 and therefore thedisclosure under the said provision is not applicable.
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 transaction aregiven in Note No. 30 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. There were no qualifications reservations or adverse remarksmade by the above referred Secretarial Auditor. The copy of the Secretarial Audit Reportis attached as Annexure - "B" to this Report.
12. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION AND
DISCHARGE 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 2015 - 2016.
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" is 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 30/05/2015 12/ 08/2015 30/09/2015 05/11/2015 05/02/2016 and 29/03/2016.
16. KEY MANAGERIAL PERSONNEL (KMP) AND REMUNERATION
Shri Bharatbhai Patel Chairman & Managing Director Shri J B Sojitra CompanySecretary and Shri M. B. Thummar Chief Financial Officer are the KMP of the Companypursuant to Section 203 of the Companies Act 2013 and the Rules made thereunder.
During the year under review Shri B. B. Patel was retired as Chief Financial Officer(CFO) of the Company w.e.f 01/02/2016 and Shri M. B. Thummar was appointed as CFO w.e.f.30th May 2016.
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 : ShriBharatbhai Patel (Chairman & Managing Director) Ratio: 70:1 (2) Name: Shri NimishbhaiPatel (Managing Director) Ratio: 70:1
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 Nimishbhai Patel - Managing Director : NIL% (3) Shri B.B. Patel - Chief Financial Officer : 6% (4) Shri J. B. Sojitra - Company Secretary : 14%
c) The percentage increase in the median remuneration of employees in the financialyear: 6%
d) The number of permanent employees on the Roll of the Company: 974 e) The explanationon the relationship between average increases in Remuneration and Company performance: TheNet Profit of the Company has been adversely affected but to retain the employees normalincrements are given also considering the inflation. However there is no increase in themanagerial remuneration of Shri Bharatbhai Patel and Shri Nimishbhai Patel ManagingDirectors 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 and profitability of the Company has beenadversely affected due to global slowdown. The Company has given normal yearly incrementto KMP (excluding the remuneration of Managing Directors).
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 2015 -2016.
During the year under review the Board of Directors appointed Mrs. Tarunaben Patel andShri Sanjiv Shah as an Additional (Independent) Directors w.e.f. 29th March 2016 andtheir appointment as an Independent Directors of the Company for a term of five years from29th March 2016 to 28th March 2021 are proposed for approval of shareholders at theirensuing 81st Annual General Meeting. The particulars of Mrs. Tarunaben Patel and ShriSanjiv Shah are given in the Notice of the ensuing 81st Annual General Meeting of themembers of the Company. During the year under review Shri H. N. Elavia and Shri JalPatel Independent Directors had resigned w.e.f. 4th March 2016 and 3rd March 2016respectively. The Board appreciates the valuable contribution and guidance given by themduring their 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 J. B. Sojitra Director of the Company would retire by rotation andbeing eligible offer himself for re-appointment. The particulars of the Director retiringby rotation and seeking re-appointment have been given in the Notice of the ensuing 81stAnnual 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 2016 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 2016 to consider thefollowing agenda:
a) Review the performance of Non-Independent Directors and the Board as a whole.
b) Review the performance of the Chairperson of the Company.
c) Asses the efficacy and adequacy of flow of information.
The Independent Directors viz. Shri Rakesh Agrawal and Shri A. T. Patel were present inthe meeting held on 29th March 2016 and they considered the above referred agenda.
23. STATUTORY AUDITORS
The tenure of M/s. Dhirubhai Shah & Doshi Chartered Accountants Ahmedabad wouldexpire on the conclusion of the ensuing 81st Annual General Meeting. The Company hasreceived a letter dated 27th April 2016 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 81st Annual General Meeting.
24. COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM
The Audit Committee consists of three Independent Directors viz.
Shri Sanjiv Shah Shri A. T. Patel and Shri T. M. Patel during the year under Review.
The Board of Directors of the Company had established the Vigil Mechanism pursuant toSection 177(9) of the Companies Act 2013 and Rules made thereunder read with Clause 49 ofthe Listing Agreement with BSE Ltd. for Directors and Employees to report their genuineconcerns. However there were no instances reported to the Chairman of the Audit Committeeduring the year under review. The Whistle Blower Policy can be viewed at Company's websitewww.dineshmills.com "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 year under review.
(d) EMPLOYEES STOCK OPTION PLAN: The Company has not provided any Stock OptionScheme to the employees during the year under review.
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 the Companies (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 2015-2016 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 andsufficient care for the maintenance of adequate Accounting records in accordance with theprovisions of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;
(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 ||BHARAT PATEL |
|Date : 30th May 2016 ||CHAIRMAN |
ANNEXURE : A
A. CONSERVATION OF ENERGY:
(a) The steps taken or impact on Conservation of Energy: None
(b) The steps taken by the Company for utilizing alternate sources of Energy: None
(c) The Capital Investments on Energy Conservation Equipments: None
B. TECHNOLOGY ABSORPTION:
As no foreign technology is imported the question of its absorption does not arise.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO:
| || ||(Rs. in Lacs) |
|Year ||Earnings ||Outgo |
|2015-2016 ||544 ||1525 |
RESEARCH & DEVELOPMENT:
The R & D department of the Company is actively involved in product & processimprovement / development as well as monitoring of Effluent Treatment Plants of theCompany.
Expenditure on R & D: Rs. 22.48 Lacs
|Place : Vadodara ||For and on behalf of the Board of Directors |
|Date : 30th May 2016 ||BHARAT PATEL |
| ||CHAIRMAN |
Secretarial Audit Report
(For the Financial year ended on 31st March 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]
SHRI DINESH MILLS LIMITED
P.O. Box No. 2501 Padra Road Vadodara - 390 020
We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practice by Shri Dinesh Mills Limited(hereinafter called "the Company"). Secretarial Audit was conducted in a mannerthat provided us a reasonable basis for evaluating the corporate conducts/ statutorycompliances and expressing our opinion thereon.
Based on our verification of the the Company's books papers minutes 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 we hereby report that in our opinion the Company hasduring the audit period covering the financial year ended on 31st March 2016 compliedwith the statutory provisions listed hereunder and also that the Company has proper Boardprocesses and compliance mechanism in place to the extent in the manner and subject tothe reporting made hereinafter:
We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March 2016according to 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 rules madethereunder;
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 and Overseas Direct Investment and ExternalCommercial Borrowings. - Not Applicable to the Company during the Audit period;
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 (Prohibition of Insider Trading)Regulations 1992;
C. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009. - Not Applicable to the Company during the Audit Period;
D. The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999. - Not Applicable to the Company duringthe Audit Period;
E. The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008.
- Not Applicable to the Company during the Audit Period;
F. The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
G. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009. - Not Applicable to the Company during the Audit Period; and
H. The Securities and Exchange Board of India (Buyback of Securities) Regulations1998. - Not Applicable to the Company during the Audit Period;
We have also examined compliance with the applicable clauses of the following: (i)Secretarial Standards issued by The Institute of Company Secretaries of India. (ii) TheListing Agreements entered into by the Company with BSE Ltd.
During the period under review the Company has complied with the provisions of theAct Rules Regulations Guidelines Standards etc. mentioned above.
Further as per representation of management letter considering its nature ofbusiness process and location the following Acts are specifically applicable to theCompany. There are adequate systems and processes in the company to monitor and ensurecompliance.
1. The Water (prevention and control of pollution) Act 1974 & Rules
2. Air (Prevention & Control of Pollution) Act 1981 & Rules
3. Environment Protection Act 1986 & Rules
4. Water Cess Act 1997 & Rules
We further report that;
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 year under review werecarried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least 7 days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
During the Audit period all the decisions were taken by the Board of Directors orCommittee of the Board without any dissent by any of the Directors of the Company asrecorded in the minutes of the meetings of the Board of Directors or Committee of theBoard as the case may be.
We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
We further report that during the audit period :
(a) The Company has passed Special Resolution under section 196 197 203 read withSchedule V of the Act for re-appointment of Mr. Nimishbhai U Patel as Managing Directorfor further period of five years from 14.01.2015 to 13.01.2020.
|For Kashyap Shah & Co. ||Place: Vadodara |
|Practising Company Secretaries ||Date: May 18 2016 |
|(Kashyap Shah) || |
|Proprietor || |
|FCS No. 7662; CP No. 6672 || |
Note: This report is to be read with our letter of even date which is annexed asAnnexure and forms an integral part of this report.
Annexure to Secretarial Audit Report
SHRI DINESH MILLS LIMITED
P.O. Box No. 2501 Padra Road Vadodara - 390 020
Our report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of thecompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and the processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and the practices we followed provideda reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company.
4. Wherever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.
|For Kashyap Shah & Co. ||Place: Vadodara |
|Practising Company Secretaries ||Date: May 18 2016 |
|(Kashyap Shah) || |
|Proprietor || |
|FCS No. 7662; CP No. 6672 || |