FOR THE YEAR ENDED 31ST MARCH 2018
Your Directors present the 52nd Annual Report and Audited FinancialStatements of the Company for the year ended 31st March 2018.
Profit for the year was impacted due to inventory losses resulting from sudden drop inraw material prices in the first half of the year and lower margin in case of NylonFilament Yarn (NFY).
| ||This Year ||Previous Year |
|Net Revenue from Operations (Net of Excise Duty) ||141648 ||118531 |
|Profit before Depreciation Finance Cost Exceptional Item and Tax ||12946 ||19736 |
|Add/(Less) : || || |
|Depreciation ||(4194) ||(4237) |
|Finance Cost ||(340) ||(562) |
|Exceptional Item (Note 1) ||2491 ||(958) |
|Taxation (Net) ||(3894) ||(4882) |
|Net Profit ||7009 ||9097 |
Note 1: Exceptional item in this year represents profit on sale of property and inprevious year impairment loss for some polyester spinning machines.
We recommend a dividend at the rate of 70% (i.e. Rs.7.00 per Equity Share of Rs.10/-each) for the year ended 31st March 2018 (Previous year dividend at the rate of 70% i.e.Rs.7.00 per equity share of Rs.10/- each).
TRANSFER TO RESERVES
It is proposed to transfer Rs.900 lacs (previous year Rs.900 lacs) to General Reserve.
COURSE OF BUSINESS
The Management's Discussion and Analysis Report as required under the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 is forming a part of this report and gives the state of affairs of the business ofthe Company.
The business reengineering undertaken over the past few years continued this year aswell. Your Company converted polyester spinning machines into nylon spinning machines withstrong inhouse technical support. As a result your Company has emerged as a market leaderin the Nylon Filament Yarn market which is fragmented with large number of small sizespinners. Your Company is further focussing on value added products such as dope dyeddeep dyeable yarn and textured yarn and on exports to maintain its competitiveness in themarket.
Nylon Tyre Cord Fabric (NTCF) plants at both the Sites are operating at fullcapacities. The levy of antidumping duty on import of radial tyres and increase in customduty on NTCF imports have helped in stabilisation of demand for domestic NTCF Your Companyis making efforts to increase customer base including exports and diversify productportfolio by entering into Polyester Tyre Cord Fabric market thus diversifying itsproduct base.
Your Company is constantly pursuing increase in raw material supply sources to reducelead time for supply of raw material as well as insulate itself from the raw materialprice fluctuations as much as possible.
High energy cost continued to be matter of concern. Continuous efforts are made toprocure cheaper power. Your Company has concluded a long-term Open Power PurchaseAgreement effective from 6th April 2017 for its Bharuch site resulting in savings inpower cost.
EXCISE DUTY DEMAND
The Company has filed an appeal against the order of Commissioner of Central Excise forthe alleged excise duty demand of Rs.22927 lacs equal amount of penalty and interest onduty amount before Customs Excise and Service Tax Appellate Tribunal (CESTAT) Mumbaidenying benefit of Notification No. 6/2000 CE dated 01.03.2000 for specific excise duty.The appeal has been admitted and on pre-deposit of Rs.700 lacs the stay has beengranted. Your Company has been advised by the legal experts that it has a fair chance ofultimately succeeding in the matter and accordingly no provision is required to be madefor the same.
EXPANSION AND MODERNISATION
Your Company continues to enjoy its leadership in Nylon Filament Yarn in terms ofproduct range quality parameters as well as in volumes. In order to further consolidateits position into value added segments the Company proposes to install additional AirTexturising capacity. Besides it will also undertake conversion of additional polyesterspinning machines into nylon spinning machines to enhance its production capacity.
As reported last year your Company continuous to pursue diversifying its product rangeby offering dipped Polyester Tyre Cord Fabric. It is also exploring possibilities ofoffering dipping services for Rayon Tyre Cord Fabric. Your Company is also pursuing tofully integrate its NTCF capacity and shall approach the Government authorities forrequisite permissions to implement these facilities.
Your Company is constantly endeavouring to become energy efficient and has initiatedsteps to replace some of the old equipment to reduce the energy cost.
HEALTH SAFETY AND ENVIRONMENT
The report on Management's Discussion and Analysis includes observations on healthsafety and environment compliances by the Company.
Both the Plant sites of the Company are environment regulations compliant.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act2013 read with Companies (Accounts) Rules 2014 are set out in a separate statementattached hereto and forming part of the report. (Annexure-I)
Your Company reaffirms its commitment to Corporate Governance and is fully compliantwith the conditions of Corporate Governance stipulated in Clause C' of Schedule V onAnnual Report pursuant to Regulation 34(3) of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015. A separate section ofdisclosure on Corporate Governance and a Certificate from the firm of Practicing CompanySecretaries dated 3rd May 2018 in this regard are annexed hereto and formpart of the Report.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
(including criteria for determining qualification positive attributes independence ofa Director policy relating to remuneration for Directors Key Managerial Personnel andother employees).
Policy on Directors' appointment
Policy on Directors' appointment is to follow the criteria as laid down under theCompanies Act 2013 and Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. Emphasis is given to persons from diversefields or professions.
Policy on Remuneration
Guiding Policy on remuneration of Directors Key Managerial Personnel and employees ofthe Company is that -
Remuneration to unionised workmen is based on the periodical settlement with theworkmen union
Remuneration to Key Managerial Personnel Senior Executives Managers Staff andWorkmen (non Unionised) is industry driven in which it is operating taking into accountthe performance leverage and such factors so as to attract and retain quality talent
For Directors it is based on the shareholders resolutions provisions of theCompanies Act 2013 and Rules framed thereunder circulars and guidelines issued byCentral Government and other authorities from time to time.
ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE ITS COMMITTEES AND INDIVIDUALDIRECTORS
The Board of Directors of the Company has initiated and put in place evaluation of itsown performance its committees and individual directors. The results of the evaluationare satisfactory and adequate and meet the requirement of the Company.
DECLARATION OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS
Pursuant to Section 149(7) of the Companies Act 2013 Independent Directors of theCompany have made a declaration confirming the compliance of the conditions of theindependence stipulated in Section 149(6) of the Act.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements of Section 134(1) (c) of the Companies Act 2013 and onthe basis of explanation and compliance certificate given by the executives of theCompany and subject to disclosures in the Annual Accounts and also on the basis ofdiscussions with the Statutory Auditors of the Company from time to time we state asunder :
a) that in the preparation of the annual accounts the applicable accounting standardshad been followed alongwith proper explanation relating to material departure;
b) t hat the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
c) that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) t hat the directors had prepared the annual accounts on a going concern basis;
e) that the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f) that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
In accordance with the Articles of Association of the Company Mr. B.K. Birla Directorof the Company will retire by rotation and being eligible offers himself forre-appointment.
NUMBER OF MEETINGS OF BOARD OF DIRECTORS
The Board of Directors have met 5 times and Independent Directors once during the yearended 31st March 2018.
DETAILS OF COMMITTEES OF DIRECTORS
Composition of Audit Committee of Directors Nomination and Remuneration Committee ofDirectors Corporate Social Responsibility
Committee of Directors Stakeholders Relationship/Grievance Committee of Directors andShare Transfer Committee of Directors number of meetings held of each Committee ofDirectors during the financial year 2017-18 and meetings attended by each member of theCommittee as required under the Companies Act 2013 are provided in Corporate GovernanceReport and forming part of the report.
The recommendations of the Audit Committee as and when made to the Board have beenaccepted by it.
KEY MANAGERIAL PERSONNEL
Following are the Key Managerial Personnel of the Company:
Mr. O.R. Chitlange - Managing Director
Mr. K.G. Ladsaria - Chief Financial Officer (CFO)
Mr. C.B. Gagrani - Company Secretary
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
There are no transactions with Related Parties which require disclosure under Section134(3)(h) of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules2014.
LOANS INVESTMENTS AND GUARANTEES BY THE COMPANY
There are no loans given investments made guarantees given or securities provided bythe Company to any entity under Section 186 of the Companies Act 2013.
INTERNAL FINANCIAL CONTROLS
The Company is having in place Internal Financial Control System. The InternalFinancial Controls with reference to the financial statements were adequate and operatingeffectively.
Your Company has not accepted any fixed deposits from the public during the financialyear ended 31st March 2018.
COMPLIANCE OF SECRETARIAL STANDARDS
Your Company has complied with the applicable Secretarial Standards.
Your Company has developed and implemented a Risk Management Policy includingidentification of element of risk and its severity that may impact the existence of theCompany. A dedicated Risk Management Committee of Senior Executives has been appointed bythe Company to evaluate the risk and mitigation plan and monitor them. Based on theirevaluation there is no element of risk identified by the Management that may in theopinion of the Board threaten the existence of the Company.
A detailed report on significant risks and mitigation is given under the head RiskManagement in Management's Discussion and Analysis.
WHISTLE BLOWER MECHANISM
Your Company has put in place Whistle Blower Mechanism. The detailed mechanism is givenin Corporate Governance Report forming part of this report.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has formulated a policy in respect of Sexual Harassment of Women atWorkplace as per the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013. There was no complaint received bythe Company during the financial year 2017-18 under the aforesaid Act.
COROPRATE SOCIAL RESPONSIBILITY
Information on Corporate Social Responsibility (CSR) Policy and initiative taken by theCompany during the financial year 2017-18 pursuant to Section 135 of the Companies Act2013 read with Rule 8 of the Companies (CSR Policy) Rules 2014 is annexed herewith andforming part of the report. (Annexure-II)
ANALYSIS OF REMUNERATION
Pursuant to Rule 5 of the Companies (Appointment and Remuneration) Rules 2014 adisclosure on remuneration related information of employees Key Managerial Personnel andDirectors is annexed herewith and forming part of the report. (Annexure-III)
M/s. Khimji Kunverji & Co. Chartered Accountants have been appointed as theAuditors of the Company to hold office for a term of 5 (five) consecutive years from theconclusion of 50th Annual General Meeting held on 15th July 2016until the conclusion of the 55th Annual General Meeting subject to ratificationof their appointment by the members at every Annual General Meeting during the remainingterm of 5 (five) years. Accordingly being eligible their appointment is required to beratified at the ensuing Annual General Meeting.
The Cost Accounts records maintained by your Company for Nylon and Polyester Productsare subject to yearly audit by Cost Accountant in Practice. Your Company has appointedM/s. D.C. Dave & Co. a firm of Cost Auditors for conducting the audit of suchrecords for the financial year 2017-18.
SECRETARIAL AUDIT REPORT
A Secretarial Audit Report for the year ended 31st March 2018 inprescribed form duly audited by the Practising Company Secretary M/s. Sanjay Sangani& Co. is annexed herewith and forming part of the report.
PARTICULARS OF EMPLOYEES
Pursuant to the provisions of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the names and other particulars of employees are set out in aseparate statement attached herewith and forming part of the report. (Annexure-IV)
Pursuant to Section 134(3)(a) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and Administration) Rules 2014 the extract of the Annual Return isannexed herewith and forming part of the report. (Annexure-V)
| ||For and on behalf of the Board of Directors |
| ||Rajashree Birla |
| ||Vice Chairperson |
| ||(DIN: 00022995) |
| ||O.R. Chitlange |
|Place : Mumbai ||Managing Director |
|Date : 3rd May 2018 ||(DIN: 00952072) |