TO THE SHAREHOLDERS
Your Directors have pleasure in presenting the Eleventh (11th) Directors' Report ofyour Company along with the financial statements for the Financial Year ended 31 st March2018.
1. OPERATING RESULTS
Certain key aspects of your Company's performance during the Financial Year ended 31stMarch 2018 as compared to the previous Financial Year are summarised below: Rs. (in000)
| ||Year Ended ||Year Ended |
|Particulars || || |
| ||31.03.2018 ||31.03.2017 |
|Income for the year ||410105.71 ||494366.52 |
|Profit before Interest Depreciation and Tax ||74001.71 ||103842.88 |
|Finance Charges ||4113.13 ||6880.46 |
|Profit before Depreciation and Taxes ||69888.58 ||96962.42 |
|Depreciation & Amortisation ||44553.76 ||39465.31 |
|Provisions for Taxation/ Deferred Tax ||9267.61 ||18715.61 |
|Prior Period Items / Exceptional Items ||0 ||0 |
|Minority Interest & Profit from Associate Company ||0 ||0 |
|Net Profit for the current year ||16067.21 ||38781.50 |
|Other Comprehensive income (net of tax) ||566.51 ||(2045.49) |
|Earlier years balance brought forward ||181084.77 ||166357.56 |
|Depreciation reversed on Capital Subsidy Received ||0 ||912.02 |
|Net Profit available for Appropriation ||197718.49 ||204005.59 |
|Appropriation: || || |
|Dividend on Equity Shares ||(28565.91) ||(19043.94) |
|Dividend Distribution Tax (Net) ||(5815.36) ||(3876.88) |
|Transfer to General Reserves ||0 ||0 |
|Balance carried to Balance Sheet ||163337.22 ||181084.76 |
Your Directors recommend for approval of the Members at the ensuing Annual GeneralMeeting dividend of Rs. 1.50/- per Equity Share (i.e. 15%) of face value of Rs. 10/-each for the Financial Year ended 31st March 2018 aggregating Rs. 34437.73 (inThousands) including Rs. 5871.82 (in Thousands) dividend distribution tax as compared toprevious year's dividend of Rs. 1.50/- per Equity Share (i.e. 15%) of face value of Rs.10/- each for the Financial Year ended 31st March 2017 aggregating Rs. 34381.27 (inThousands) including Rs. 5815.36 (in Thousands) dividend distribution tax.
The total outflow for current year is based on relevant share capital as on 31 stMarch 2018. The actual dividend amount will be dependent on the relevant share capitaloutstanding as on the record date /book closure.
The dividend will be paid in compliance with the applicable Rules and Regulations.
3. SHARE CAPITAL
There was no change in the Company's share capital during the year under review.
The Company's paid up equity share capital remained at Rs. 190439390 comprising of19043939 equity shares of Rs. 10/- each.
4. OVERVIEW OF OPERATIONS
During the year under review your Company recorded a total income of Rs. 410105.71(in Thousands) as compared to last year's income of Rs. 494366.52 (in Thousands) and netprofit of Rs. 16633.72 (in Thousands) as compared to last year's Net profit of Rs.36736.01 (in Thousand). For further information kindly refer to Management Discussionand Analysis Report forming a part of this Annual Report.
5. EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as provided under Section 92(3) of the Companies Act 2013(the Act) and as prescribed in Form No. MGT-9 of the Companies (Management andAdministration) Rules 2014 is appended as Annexure I to this Report.
6. NUMBER OF MEETINGS OF THE BOARD
The Board met Five (5) times in Financial Year 2017-18 viz. on 15th May 2017 11thAugust 2017 12th September 2017 11th December 2017 and 12th February 2018. Theparticulars of meetings held and attended by each Director are detailed in the CorporateGovernance Report which forms part of this Report.
7. DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors hereby confirm that: i. In the preparation of the annual accounts forFinancial Year ended 31st March 2018 the applicable accounting standards have beenfollowed along with proper explanation relating to material departures; ii. The Directorshave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at 31st March 2018 and of the profit of the Company forthat period. iii. The Directors have taken proper and sufficient care for the maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities. iv. The Directors have prepared the annual accounts for Financial Yearended 31st March 2018 on a going concern' basis. v. The Directors have laid downinternal financial controls to be followed by the Company and that such internal financialcontrols are adequate and have been operating efficiently. vi. The Directors have devisedproper systems to ensure compliance with provisions of all applicable laws and that suchsystems were adequate and operating effectively.
8. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted the declaration of Independenceas required under
Section 149(7) of the Act confirming that they meet the criteria of independence underSection 149(6) of the Act and
Regulation 16 (1)(b) of the Securities Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations).
9. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Policy of the Company on Directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a Director and othermatters provided under sub-section (3) of
Section 178 of the Act and Regulation 19 of Listing Regulations is appended as AnnexureII to this Report.
10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
The details of Loans Guarantees and Investments covered under the provisions ofSection 186 of the Act read with Companies (Meetings of Board and Its Powers) Rules 2014are given in the notes to the Financial Statements forming part of this Annual Report.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the Financial Year 2017-18 your Company has entered into transactions withrelated parties as defined under section 2(76) of the Act and Rules made thereunderRegulation 23 of the Listing Regulations. During the Financial Year 2017-18 transactionswith related parties which qualify as material transactions as per Listing Regulations aregiven in Form AOC - 2 as per the Companies (Accounts) Rules 2014 in Annexure III to thisReport. The details of related party transactions as required under IND AS-24 are set outin notes to accounts to the Standalone Financial Statements forming part of this AnnualReport. The Policy on Related Party Transactions may be accessed on the Company's websiteat the link: http://www. arrowtextiles.com/Related-Party-Transaction-Policy.pdf
12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of the Report.
13. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO
The particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the Act read with theCompanies (Accounts) Rules 2014 is appended as Annexure IV to this Report.
14. BUSINESS RISK MANAGEMENT
The Board of Directors of the Company has constituted a Risk Management Committee toframe implement and monitor the risk management plan for the Company. The Company has arobust Risk Management framework to identify evaluate business risks and opportunities.This framework seeks to create transparency minimize adverse impact on the businessobjectives and enhance the Company's competitive advantage.
The business risk framework defines the risk identification and its management approachacross the enterprise at various levels including documentation and reporting. Theframework helps in identifying risks trend exposure and potential impact analysis on aCompany's business.
15. CORPORATE SOCIAL RESPONSIBILITY
The Board has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with Section 135 of the Act. Your Company's CSR initiatives or activitiesundertaken during the Financial Year ended 31st March 2018 forms part of Annual Report onthe CSR activities in accordance with Section 135 of the Act and Companies (CorporateSocial Responsibility Policy) Rules 2014 which is appended as Annexure V to this Report.
16. VIGIL MECHANISM
The Company has adopted Vigil Mechanism and Whistle Blower Policy for Directors andEmployees in compliance with the provisions of Section 177(10) of the Act and Regulation22 of the Listing Regulations to report genuine concerns and to provide for adequatesafeguards against victimization of persons who may use such mechanism. During the year nopersonnel of the Company was denied access to the Audit Committee. The said policy is alsoavailable on the Company's website www.arrowtextiles.com
17. ANNUAL EVALUATION OF PEFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations theBoard has carried out an annual evaluation of its own performance performance of theDirectors as well as the evaluation of the working of its Committees.
The Nomination Remuneration and Compensation Committee have defined the evaluationcriteria for the Board its Committees and Directors. The Board's functioning wasevaluated after taking inputs from the Directors on various aspects including inter aliadegree of fulfillment of key responsibilities Board structure and compositionestablishment and delineation of responsibilities to various Committees effectiveness ofBoard processes information and functioning.
The Committees of the Board were evaluated after taking inputs from the Committeemembers on the basis of criteria such as degree of fulfillment of key responsibilitiesadequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination Remuneration and Compensation Committee reviewed theperformance of the individual directors on aspects such as attendance and contribution atBoard/ Committee Meetings and guidance/ support to the management outside Board/ CommitteeMeetings. In addition the Chairman was also evaluated on key aspects of his roleincluding setting the strategic agenda of the Board encouraging active engagement by allBoard members.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non-Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole.
In a separate meeting of independent directors performance of Non-IndependentDirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors.
18. SUBSIDIARY JOINT VENTURE AND ASSOCIATE COMPANIES
The Company does not have any subsidiary. However the Company has formulated policyfor determining material subsidiary and the same is available on Company's website and thesame may be accessed at the link: http://www.arrowtextiles.com/Policy-for-Determining-Material-Subsidiaries.pdf
19. DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE ACT
The Company has neither accepted nor renewed any deposits during the Financial Year2017-18 in terms of Chapter V of the Act.
20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
21. INTERNAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference tofinancial statements.
The Company has adopted accounting policies which are in line with the IndianAccounting Standards notified under Section 133 and other applicable provisions if anyof the Act read together with the Companies (Indian Accounting Standards) Rules 2015.
The Company in preparing its financial statements makes judgments and estimates basedon sound policies and uses external agencies to verify/ validate them as and whenappropriate. The basis of such judgments and estimates are also approved by the StatutoryAuditors and Audit Committee.
The Internal Auditor evaluates the efficacy and adequacy of internal control systemaccounting procedures and policies adopted by the Company for efficient conduct of itsbusiness adherence to Company's policies safeguarding of Company's assets preventionand detection of frauds and errors and timely preparation of reliable financialinformation etc. Based on the report of internal audit function process owners undertakecorrective action in their respective areas and thereby strengthen the controls.Significant audit observations and corrective actions thereon are presented to the AuditCommittee of the Board.
22. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Section 152(6)(e) of the Act Ms. Anjali Mody(DIN: 02784924) Director of the Company will retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offers herself for re-appointment.
1. Statutory Auditor
M/s. M H S & Associates Chartered Accountants (Firm Registration No: 141079W)were appointed as Statutory Auditors of the Company at the 10th Annual General Meetingtill the conclusion of the 15th Annual General Meeting.
Your Company has received a confirmation from M/s. M H S & Associates CharteredAccountants (Firm Registration No: 141079W) to the effect that that they are notdisqualified within the meaning of Section 141 and other applicable provisions of the Actand rules made thereunder.
There are no qualifications reservations or adverse remarks or disclaimers made byStatutory Auditor of the
Company in his audit report.
2. Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhave appointed M/s. A. K. Jain & Co. Company Secretaries in Practice to undertake theSecretarial Audit of the Company for the year ended 31st March 2018. The SecretarialAudit Report is appended as Annexure VI to this Report.
No fraud has been reported by the Statutory Auditors and Secretarial Auditors to theAudit Committee or the Board.
24. CORPORATE GOVERNANCE
Pursuant to Listing Regulations the Management Discussion & Analysis Report andCorporate Governance Report from Practicing Company Secretary on compliance with theconditions of Corporate together with Certificate
Governance as laid down forms a part of this Annual Report.
25. AUDIT COMMITTEE OF THE COMPANY:
The Company's Audit Committee comprises the following Directors:
1. Mr. Aditya Mangaldas (Chairman);
2. Mr. Chand Arora;
3. Mr. Aurobind Patel
4. Dr. Vrajesh Udani
The composition of the Audit Committee is in compliance with the requirements ofSection 177 of the Act and Regulation 18 of the Listing Regulations.
26. PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 astatement showing the names and other particulars of the employees drawing remuneration inexcess of the limits set out in the said rules and disclosures pertaining to remunerationand other details as required under Section 197(12) of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are providedin Annexure VII to this Report.
27. COMPLIANCE OF THE SECRETARIAL STANDARDS
During the financial year the Company has complied with the applicable SecretarialStandards i.e SS-1 and SS-2 as issued by the Institute of the Company Secretaries ofIndia.
Your Directors express their sincere appreciation for the co-operation received fromshareholders bankers and other business constituents during the year under review. YourDirectors also wish to place on record their deep sense of appreciation for the commitmentdisplayed by all executives officers and staff resulting in the successful performanceof the Company during the year.
By Order of the Board of Directors
Chairman DIN: 00234797
Date: 10th August 2018
Plot No. 101-103 19th Street MIDC Satpur Nasik - 422 007 Maharashtra. CIN:L51494MH2008PLC178384 Email ID: email@example.com Website:www.arrowtextiles.com Tel No : 91-253-6609893