Your Directors have pleasure in presenting the 29th Annual Report on thebusiness and operations of your Company together with the audited accounts for thefinancial year ended 31st March 2018.
1. FINANCIAL RESULTS
Your Company's performance during the year is as below:
|Particulars ||Year ended 31.03.2018 ||Year ended 31.03.2017 |
|Total Revenue ||82959.72 ||84614.24 |
|Profit before Interest Tax & Depreciation ||8277.93 ||7381.74 |
|Less: Net Interest & Finance Cost ||4345.97 ||3763.40 |
|Less: Depreciation ||3294.48 ||3347.86 |
|Profit before tax ||637.48 ||270.48 |
|Provision for Tax & Deferred tax ||76.62 ||94.43 |
|Profit for the year ||560.85 ||176.05 |
|Other comprehensive income ||3.95 ||(57.45) |
|Total Comprehensive Income ||564.80 ||118.60 |
2. PERFORMANCE DURING THE YEAR
During the year under review the company has achieved revenue of Rs 82959.72 Lakh ascompared to Rs. 84614.24 Lakh for the previous financial year.
The fall in revenue during the year under review was on account of introduction ofGoods & Service Tax (GST) as the domestic textile industry (especially fabric) was notprepared for the GST compliances. This led to paralyze the domestic sales market foralmost 2-3 months post GST implementation.
In this backdrop your company has delivered a growth of 12.14% in Operating Earningsbefore Interest Depreciation and Taxes (EBITDA) during FY 2017-18 and Profit after Tax(PAT) was up by more than 3 times during FY 2017-18.
Your Company looks forward to further strengthen its operations by consistentlyfocusing in embarking its profits for the coming years.
During the year ended March 31 2018 the subsidiary company has not started its'commercial operations and therefore no Statement of Profit and Loss has been prepared forsuch subsidiary for the year ended March 31 2018. On account of above standalone andconsolidated financial results of the company for year ended March 31 2018 remains same.However Consolidated Financial Statements of Assets and Liabilities as at March 31 2018of the parent company after incorporating Financial Statements of Assets and Liabilitiesas at March 31 2018 of such subsidiary has been prepared.
Your Directors do not recommend payment of any Dividend for the Financial year ended 31stMarch 2018 in order to conserve the resources of the Company The Company will retainthe earning for use in the future operations & Projects and strive to increase the networth of stakeholders of the Company.
4. INDIAN ACCOUNTING STANDARD (IND AS)
The company has adopted Indian Accounting Standards (IND AS) with effect from 1stApril 2017 pursuant to the notification of Companies (Indian Accounting Standard) Rules2015 issued by the Ministry of Corporate Affairs. Hence previous year's figures have beenregrouped and reclassified wherever considered necessary to confirm the figuresrepresented in the current period.
5. RESERVES AND SURPLUS
The Company has not transferred any amount to General Reserves for the Financial Year2017-18.
6. SHARE CAPITAL
The paid up Equity Share Capital as at 31st March 2018 stood at Rs. 2345.98Lakhs. During the year under review the Company has neither made any issue of equityshares with differential voting rights nor has granted any stock options or sweat equity.The Company has no scheme of provision of money for purchase of its own shares byemployees or by trustees for the benefit of employees.
7. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS
During the financial year under review pursuant to SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015 your Company has complied with all theapplicable provision of Corporate Governance. Separate report on Corporate Governance andManagement Discussion & Analysis as required under the SEBI Listing Regulations areforming parts of the Annual Report.
The requisite certificate from Practicing Company Secretary confirming the compliancewith the condition of Corporate Governance is attached to the Report on CorporateGovernance.
8. MATERIAL CHANGES IF ANY
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial relate and the dateof this report
9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
10. FIXED DEPOSITS
Your company has accepted/renewed the deposits aggregating to Rs. 5110.23 Lakhs frompublic & Members during the year under review after complying with the provisions ofthe Companies Act 2013 and Companies (Acceptance of Deposits) Rules 2014. There has beenno default in repayment of deposits or payment of interest thereon during the year underreview. There are no deposits which are not in compliance with the requirements of ChapterV of the Companies Act 2013.
Your directors appreciate the support which the company has received from the publicand shareholders to its fixed deposit scheme.
11. INSURANCE AND CLAIMS
All properties and insurable interests of the company including building plant andmachinery and stocks wherever necessary and to the extent required have been adequatelyinsured.
12. SUBSIDIARY COMPANIES
On November 17 2017 the company had incorporated a subsidiary company namely M/s. AyeEss Spinning Mills Private Limited Ahmedabad. There after it had acquired 100% equityshares of such company and accordingly during the year it becomes wholly ownedsubsidiary company of the company. Further during the period ended March 31 2018 thesubsidiary company has not started its' commercial operations and therefore no Statementof Profit and Loss has been prepared for such subsidiary for the year ended March 312018. On account of above standalone and consolidated financial results of the companyfor year ended March 31 2018 remains same. However Consolidated Financial Statements ofAssets and Liabilities as at March 31 2018 of the parent company after incorporatingFinancial Statements of Assets and Liabilities as at March 31 2018 of such subsidiary hasbeen prepared.
A statement in Form AOC-I pursuant to first proviso to sub-section (3) of section 129read with rule 5 of Companies (Accounts) Rules 2014 containing salient features of thefinancial statement of subsidiaries/ associate companies/joint venture is enclosed withthis report as Annexure-A.
13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
For all related party transactions prior omnibus approval of the Audit Committee isobtained on a yearly basis for the transactions which are of foreseen and repetitivenature and such approval is in interest of the Company. Transactions entered intopursuant to the omnibus approval so granted are audited and a statement giving details ofall related party transactions is placed before the Audit Committee and the Board ofDirectors for their approval.
A detailed report on material contracts and arrangements made during the financial year2017-18 being arm's length transactions have been reported and annexed hereto in formAOC-2 as Annexure - A forming part of this report.
There are no materially significant related party transactions made by the company withpromoters key managerial personnel or other designated persons which may have potentialconflict with interest of the company at large.
The Company has adopted a Related Party Transactions Policy. The Policy as approved bythe Board is uploaded on the Company's website at the web linkhttp://www.aarvee-denims.com/pdfs/related-party- transaction-policy.pdf
14. AUDIT COMMITTEE
Details pertaining to Composition of Audit Committee are included in CorporateGovernance Report. All recommendations made by Audit Committee were accepted by Board.
15. RISK MANAGEMENT
The Company has adopted a Risk Management Policy for a systematic approach to controlrisks. The Risk Management Policy of the Company lays down procedures for riskidentification evaluation monitoring review and reporting. The Risk Management Policyhas been developed and approved by the Senior Management in accordance with the businessstrategy.
16. INTERNAL CONTROLS SYSTEMS AND ADEQUACY
The Company has in place an adequate system of internal controls. It has documentedpolicies and procedures covering all financial and operating functions and processes.These have been designed to provide a reasonable assurance with regard to maintaining ofproper accounting controls for ensuring reliability of financial reporting monitoring ofoperations protecting assets from unauthorized use or losses and compliance withregulations.
17. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
1) Changes in Directors and Key Managerial Personnel
In accordance with the provision of Section 152 (6) of the Companies Act 2013 andArticles of Association of the Company Mr. Rajesh Arora (DIN: 00092200) Non-ExecutiveDirector shall retire by rotation at the forthcoming Annual General Meeting of the Companyand being eligible offer himself for re-appointment. The Board recommends hisre-appointment.
Ms. Yashree Dixit (DIN: 7775794) has fulfilled all the criteria to become anIndependent Director of the company hence Board has categorized her as an IndependentDirector w.e.f. 24.05.2018. Ms. Yashree Dixit (DIN: 7775794) is proposed to be appointedas Independent directors to hold office for five consecutive years for a term from thedate of his appointment by the Board of Directors as per the provisions of Section 149152 read with Schedule IV of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations And Disclosure Requirements) Regulations 2015.
Mr. Amol Dalal (DIN: 00458885) Mr. Arvind Sanghvi (DIN: 00435340) Mr. Ashok Gandhi(DIN: 00022507) Mr. Sanjay Majmudar (DIN: 00091305) being independent directors are noteligible for retire by rotation and hold office for five consecutive years for a term fromthe date of their appointment by the Board of Directors as per the provisions of Section149 152 read with Schedule IV of the Companies Act 2013 and Regulation 25 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
Mr. Nipun Arora (DIN: 00989835) has been appointed as an Additional Director of thecompany by Board of Directors w.e.f. 11.08.2018.
Ms. Shivani Shah (DIN: 06693408) Independent Director has resigned from the companyw.e.f. 26th February 2018.
Mr. Parmanand Arora (DIN: 00093659) has also resigned from the office of the directorof the Company with effect from 11th August 2018.
Information regarding the meeting of directors and remuneration etc. is given in theCorporate Governance report attached with the report.
The company is having following Key Managerial Personnel: -
|S. No. Key Managerial Personnel ||Designation |
|1 Mr.Vinod P. Arora DIN: 00007065 ||Chairman & Managing Director |
|2 Mr.Ashish V. Shah DIN: 00007201 ||Managing Director |
|3 Mr.Kalpesh V. Shah DIN: 00007262 ||Whole Time Director |
|4 Mr.SubhasishBandyopadhyay* ||Chief Executive Officer |
|5 Mr.Sharvil B. Suthar** ||Company Secretary |
|6 Ms.YashaswiniPandey** ||Company Secretary |
|7 Mr.Bhavik Shukla ||Chief Financial Officer |
|8 Mr. Nipun Arora*** ||Whole Time Director |
* Mr. Subhasish Bandyopadhyay has resigned as a CEO of the company w.e.f. 01.01.2018**Mr. Sharvil B. Suthar Company Secretary has resigned w.e.f. 31st March 2018 and inplace of him Company has appointed Ms. Yashaswini Pandey as Company Secretary andCompliance Officer of the company w.e.f. 11.08.2018.
***Mr. Nipun Arora has been appointed as Whole Time Director w.e.f. 11 August 2018
2) Declaration by an Independent Director(s)
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 (6) of the Act and Regulation 16 (1) (b) ofthe Listing Regulations. In the opinion of the Board they fulfill the conditions ofindependence as specified in the Act and the Rules made there under and are independent ofthe management. The detail terms of Independent Directors are disclosed on the Company'swebsite with the following link http://www.aarvee-denims.com/script-code-stock-exchanges.html
3) Annual Evaluation of Board Performance and Performance of its Committees and ofDirectors
Pursuant to the applicable provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has carried out anannual performance evaluation of its own performance and the Directors individually andas well as the evaluation of the working of its Committees. The criteria applied inevaluation process are explained in the Corporate Governance Report.
18. NUMBER OF MEETINGS OF THE BOARD
During the year under review five board meetings were convened and held the detailsof which are given in the corporate governance report. The intervening gap between themeetings was within the period prescribed under the Act and the Listing Regulations.
19. COMMITTEES OF BOARD OF DIRECTORS
Your Company has several Committees which have been established as part of bestcorporate governance practices and are in compliance with the requirements of the relevantprovisions of applicable laws and statutes.
The Company has following Committees of the Board:
a. Audit Committee
b. Nomination and Remuneration Committee
c. Stakeholders' Grievances and Relationship Committee
d. Corporate Social Responsibility Committee
e. Share Transfer Committee
A detailed note on the committees with respect to composition meetings powers andterms of reference is provided under the corporate governance report section in thisAnnual Report.
20. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:
(i) in the preparation of the annual accounts the applicable accounting standards havebeen followed and that there are no material departures;
(ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2018 and of theProfit of the Company for the year ended on that date;
(iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and
(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
21. CORPORATE SOCIAL RESPONSIBILITY
In Accordance with section 135 of the Act and Rules framed thereunder the Company hasconstituted a Corporate Social Responsibility ("CSR") Committee of Directors.The details of composition of CSR Committee are given in the Corporate Governance Report.
The details of CSR policy and CSR spending by the Company have been provided as Annexure-Cto this report as required under the Companies (Corporate Social ResponsibilityPolicy) Rules 2014.
22. POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure.
The Company has not received any complaint of sexual harassment during the financialyear 2017-18.
23. VIGIL MECHANISM/ WHISTLE BLOWER POLICY
Pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013 andRegulation 22 of SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015 aVigil Mechanism or 'Whisle Blower Policy' for Directors employees and other stakeholdersto report genuine concern has been established. The same is uploaded on the website of theCompany http://www.aarvee-denims.com/ pdfs/vigil-machanism.pdf. It is affirmed that nopersonnel of the Company has been denied access to the Audit Committee.
24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the going concern status of the Company and its futureoperations.
(1) Statutory Auditors
M/s Shah & Shah Associates Chartered Accountant Ahmedabad (Firm Registration No.113742W) Statutory Auditors of the Company were appointed in the 28th AnnualGeneral Meeting to holds office until the conclusion of the 33rd Annual GeneralMeeting going to be held in the calendar year 2022 subject to ratification of theirappointment in every annual general meeting. The Company has received a letter from theauditors to the effect that ratification of their appointment to hold office from theconclusion of this annual general meeting till the conclusion of next annual generalmeeting if made would be within the prescribed limits they fulfill the criteriaprovided in Section 141 of the Companies Act 2013 and are not disqualified for suchratification of their appointment under the Companies Act 2013 the Chartered AccountantsAct 1949 and the rules or regulations made thereunder. As per their letter there were noproceedings against them pending with respect to professional matters of conduct. Pursuantto the provisions of Section 139 of the Companies Act 2013 and rules framed there underit is therefore proposed to ratify their appointment to hold office from the conclusion ofthis Annual General Meeting till the conclusion of next Annual General Meeting.
(2) Cost Auditors
The company has received a consent letter from the cost auditors M/s. N. D. Birla andCo. Cost Accountant to the effect that their appointment if made would be within theprescribed limits under section 141(3) (g) of the Companies Act 2013 and that they arenot disqualified for appointment. The board of Directors of the company at its meetingheld on 24th May 2018 appointed M/s. N. D. Birla & Co. Cost Accountantsas the cost auditors of the Company to conduct the audit of cost records maintained by theCompany as required by the Companies (Cost Records and Audit) Rules 2014 as amended fromtime to time.
The members are requested to ratify the remuneration to be paid to the cost auditors ofthe company
(3) Secretarial Auditors
Pursuant to Section 204 of the Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed M/s. TapanShah & Co. Practicing Company Secretary (COP No. 2839) for conducting SecretarialAudit of the Company for the financial year ended on 31st March 2018. TheSecretarial Audit report of M/s Tapan Shah & Co. Company Secretaries for the financialyear ended 31st March 2018 is annexed as Annexure - D.
26. FRAUD REPORTED BY AUDITORS UNDER SUB SECTION (12) OF SECTION 143 OTHER THAN THOSETO REPORTABLE TO CENTARL GOVERNMENT:
During the year under review the Statutory Auditors and Secretarial Auditor have notreported any instances of fraud committed in the Company by its officers or Employees tothe Audit Committee under Section 143(12) of the Companies Act 2013
27. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 (3) ofThe Companies (Accounts) Rules 2014 is annexed as Annexure - E.
28. PARTICULARS OF EMPLOYEES AND REMUNERATION
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and
Remuneration of Managerial Personnel) Rules 2014 in respect of employees of theCompany is attached as Annexure - F to this report.
29. EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management andAdministration) Rules 2014 the extract of Annual Return in form MGT-9 is Annexed asAnnexed-G to this Report form MGT-9 is uploaded on the website of the Companyhttp://www.aarvee-denims.com.
30. INDUSTRIAL RELATIONS
The industrial relations continued to be generally peaceful and cordial.
31. REGULATORY STATEMENT
The Equity shares of your company are listed on the BSE Limited (BSE) and the NationalStock Exchange of India Limited (NSE).
The Company has paid the listing fees for the year 2018-19 to above stock exchanges.
Your Directors thank the various Central and State Government DepartmentsOrganizations and Agencies for their continued help and co-operation extended by them. TheDirectors also gratefully acknowledge all stakeholders of the Company viz. customersmembers dealers vendors banks and other business partners for the excellent supportreceived from them during the year and look forward to their continued support in future.The Directors place on record their sincere appreciation to all employees of the Companyfor their unstinted commitment and continued contribution to the Company.
| ||FOR AND ON BEHALF OF BOARD OF DIRECTORS |
| ||Vinod P. Arora |
|Place : Ahmedabad ||Chairman & Managing Director |
|Date : 11.08.2018 ||DIN:00007065 |
|REGISTERED OFFICE : || |
|191 Shahwadi || |
|Nr. Old Octroi Naka || |
|Narol Sarkhej Highway Narol || |
|Ahmedabad - 382 405. || |
|CIN : L17110GJ1988PLC010504 || |