To the Members
The Board of Directors ('Board') are pleased to submit its report on the performance ofthe Company along with the audited standalone financial statements for the year ended 31stMarch 2020.
|Particulars ||2019-20 ||2018-19 |
|Revenue ||76792.21 ||77137.83 |
|Other income ||269.67 ||234.11 |
|Total Income ||77061.88 ||77371.94 |
|Expenses || || |
|Operating expenditure ||72494.69 ||73506.50 |
|Depreciation ||2303.83 ||1240.62 |
|Total expenses ||74798.52 ||74747.12 |
|Profit before finance cost and tax ||2263.36 ||2624.82 |
|Finance costs ||3379.85 ||1392.48 |
|Profit before Tax ||(1116.49) ||1232.34 |
|Less: Provision for Taxation || || |
|Current Tax ||0.00 ||265.55 |
|Deferred Tax ||422.49 ||395.79 |
|MAT credit entitlement ||0.00 ||(265.55) |
|Profit after Tax ||(694.00) ||836.55 |
|Add/(Less): Other Comprehensive Income (net of taxes) ||(618.53) ||25.51 |
|Total Comprehensive Income/(Expenses) for the year ||(1312.53) ||862.06 |
|Opening balance of retained earnings ||5997.13 ||5775.39 |
|Profit for the year ||(694.00) ||836.55 |
|Less: Transfer to Reserves ||200.00 ||200.00 |
|Less: Dividend paid on Equity Shares ||166.89 ||333.77 |
|Less: Dividend Distribution Tax ||34.30 ||68.61 |
|Less : Remeasurement of Defined benefit plan ||10.59 ||12.43 |
|Balance carried forward ||4891.35 ||5997.13 |
|Earnings per share (EPS) -Basic/Diluted (in Rs ) ||(2.98) ||3.76 |
During the years your Directors have not recommended the payment of any dividendbecause the Company has not earned any profit.
We would like to inform you that Company operates in a single segment i.e.TEXTILE as such disclosure requirements as per Indian Accounting Standard (IndAS) 108 issued by the Institute of Chartered Accountants of India New Delhi areapplicable. We would also like to inform you that the year gone by has been a verydifficult period for Textile Industry. The increase in the prices of raw cotton withoutthe corresponding increase in the yarn prices coupled with decline in demand for cottonyarn affected the financial performance of the Company. The exchange rate fluctuations andreduction in export incentives further aggravated the problems and affected company'sperformance during the year. Inspite of the challenges Company has been able to maintainits Topline at 767.92 crores as against Rs 771.38 Crores in the previous year. Howeverthe export at Rs 443.28 Crores has shown a decline of 10.1% as compared to previous year.The profitability of the Company was severely impacted because of the reasons mentionedabove and it suffered a loss of Rs 6.94 crores during the year under review.
In the current year the outlook for the Textile Industry seems to be Positive butCovid- 19 plays a very crucial role this year may impact the performance of sector. YourManagement expects that company will be able to put up a reasonably good performance inthe Current Year.
TRANSFER TO RESERVES
The Company proposes to transfer Rs 2.00 Crores to the General Reserve out of theamount available for appropriations and an amount of Rs 48.91 Crores is proposed to beretained in the Profit and Loss Account.
RESERVE AND SURPLUS
Reserves and Surplus stood at to Rs 98.13 Crores as at March 31 2020 compared to Rs110.10 Crores as at March 31 2019.
SHARE CAPITAL DURING THE YEAR 2019-20
During the year under review the paid up share capital has increased from Rs111258120 to Rs 116500000 in the following manner:
|Date of Allotment ||No. of shares allotted ||Mode ||Paid Up share capital (In Rs ) |
|March 262020 ||1048376 ||Preferential Issue ||116500000 |
The Company has raised funds through preferential allotment and fully utilized tillMarch 31 2020.
The Board of Directors duly met 6 times during the financial year from April 1 2019 toMarch 31 2020. The dates on which the meetings were held are as follows: May 25 2019August 13 2019 November 13 2019 February 07 2020 February 14 2020 and March262020.
POLICY ON DIRECTORS Rs APPOINTMENT AND REMUNERATION
The current policy is to have an appropriate mix of executive and independentdirectors. On March 31 2020 the Board consists of five members three of whom areexecutive directors or whole Time Director and Two are independent directors.
The policy of the Company on directors Rs appointment and remuneration includingcriteria for determining qualification positive attributes independence of director andother matters as required under sub- section (3) of Section 178 of the Companies Act2013is available on our website www.damodargroup.com. There has been no change in the policysince the last fiscal year. We affirm that remuneration paid to directors is as per theterms laid out in the nomination and remuneration policy of the company.
As per SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 thelisted Companies are required to formulate certain policies. As a good corporate entitythe Company has already formulated several corporate governance policies and the same areavailable on the Company's website i.e. www.damodargroup.com. The said policies arereviewed periodically by the Board to make them in compliance with the new Regulations/requirements.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Directors Retiring by Rotation
Pursuant to Section 152 and other applicable provisions of the Act and the Articles ofAssociation of your Company one-third of the Directors (other than Independent Directors)as are liable to retire by rotation shall retire every year and if eligible offerthemselves for re-appointment at every AGM. Consequently Mr. Ajay D. Biyani (DIN:00014896) retires by rotation and being eligible offers himself for re-appointment inaccordance with provisions of the Act.
Mr. Ketan K. Patel was appointed as an Independent Director with effective fromNovember 13 2019 and the same was approved by shareholders (vide postal ballot concludedon March 172020).
Mrs. Farida Jambusharwalla was reappointed as an Independent Director with effectivefrom March 30 2020 to March 292025 subject to approval by shareholders in the ensuingAnnual General Meeting.
The Board of Directors has appointed Mr. Pankaj Srivastava as an Additional IndependentDirector of the Company w.e.f. May 11 2020 and holds office up to this Annual GeneralMeeting and shall be eligible for appointment as Independent Director in terms of Section149 and 152 of the Act at Annual General Meeting subject to the provisions of the Actyour Company has received a notice in writing from a member proposing his candidature forthe office of Independent Directors along with the requisite deposit. He qualifies to bean Independent Director pursuant to the provisions of Section 149(6) of the Companies Act2013.
Mr. Girdharlal S. Daga an Independent Director of the Company resigned as member ofthe Board effective November 122019 due to health issue as an Independent director of theCompany and Mr. Raghavan Srinivas an Independent Director resigned as member of the Boardeffective February 122020 to expire of current term of as an Independent director of theCompany.
In terms of Section 149 of the Act and Regulation 16(1) of the Listing Regulations Mr.Ketan Patel and Mrs. Farida Bomi Jambusarwalla are the Independent Directors of theCompany as on March 31 2020. The Independent Directors have submitted a declaration thateach of them meet the criteria for independence as laid down under Section 149(6) of theAct read with Rules framed thereunder and Regulation 16 of the Listing Regulations andthat they are not aware of any circumstance or situation which exists or is anticipatedthat could impair or impact their ability to discharge their duties with an objectiveindependent judgment and without any external influence as required under Regulation 25 ofListing Regulations.
KEY MANAGERIAL PERSONNEL (KMP)
Pursuant to the provisions of Section 203 of the Act the KMP Rs s of your Company forFinancial Year 2019-20 were Mr. Ajay Biyani Managing Director Mr. R. Kumar ChiefFinancial Officer and Mr. Subodh Kumar Soni Company Secretary of the Company as on March312020.
Mr. R. Kumar Chief Financial Officer of the Company resigned with effect from May82020 due to health issue. Mr. Sheetal Prasad Singhal has been appointed as ChiefFinancial Officer of the Company with effect from July 312020.
The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Act. Theperformance of the Board was evaluated by the Board after seeking inputs from all thedirectors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc. The performance of thecommittees was evaluated by the board after seeking inputs from the committee members onthe basis of the criteria such as the composition of committees effectiveness ofcommittee meetings.
CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING
The Board of Directors has adopted the Insider Trading Policy in accordance with therequirement of the SEBI (Prohibition of Insider Trading) Regulations 2015 and the InsiderTrading Policy of the Company covering code of practices and procedures for fairdisclosure of unpublished price sensitive information and code of conduct for preventionof insider trading is available on our website www.damodargroup.com. All Directors andSenior Management Personnel have affirmed compliance with the Code. A declaration to thiseffect signed by the Managing and Chief Financial Officer of the Company appears elsewherein this Annual Report.
CHANGE IN NATURE OF BUSINESS IF ANY
During the year there was no change in the nature of business of the Company.
SHIFTING OF REGISTERED OFFICE OF THE COMPANY
The Resolution has been passed by postal Ballot concluded on March 172020 by theshareholders for the shifting of the Registered Office of the Company from Mumbai to otherstate UT. The Company has initiated the process for the same.
We are pleased to inform that the CARE Ratings Limited has re-affirmed the creditrating BBB-/Stable for long term debt instruments/ facilities A3for the short term debt instruments/ facilities. The rating BBB- indicatesstable and rating A3 indicates The rating of the Company is tempered byhigh gearing levels decline in profitability in H1FY20 with losses at PAT level projectstabilization risk susceptibility of margins to raw material price volatility and foreignexchange fluctuation geographical concentration risk in case of exports and fragmentedand cyclical nature of industry. Further the CARE Ratings Limited has re-affirmed thecredit rating BBB-/Stable for Fixed Deposits.
DIRECTOR Rs S RESPONSIBILITY STATEMENT
In terms of Section 134(3) of the Companies Act 2013 the Directors would like tostate:
(a) that in the preparation of the annual financial statements for the year ended March31 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
(b) that such accounting policies as mentioned in the Notes to the Financial Statementshave been selected and applied consistently and judgment and estimates have been made thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at March 31 2019 and of the profit of the Company for the year ended onthat date;
(c) that proper and sufficient care has been taken 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) that the annual financial statements have been prepared on a going concern basis;
(e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
(f) that systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
DETAIL OF FRAUD AS PER AUDITORS REPORT
During the year under review neither the statutory auditors nor the secretarialauditors has reported to the audit committee under section 143 (2) of the CompaniesAct2013 any instance of fraud committed against the Company by its officers or employeethe details of which would need to be mentioned in the Board Report.
COMMITTEE OF THE BOARD
The composition and terms of reference of the Audit Committee Nomination andRemuneration Committee Stakeholders Relationship Committee and CSR Committee have beenfurnished in the Corporate Governance Report forming part of this Annual Report. There hasbeen no instance where the Board has not accepted the recommendations of the AuditCommittee and Nomination and Remuneration Committee.
STATUTORY AUDITORS AND AUDITOR Rs S REPORT
M/s. Jitendra Mishra & Company Chartered Accountants (FRN No. 125334W) have beenappointed as the Statutory Auditors of the Company for an initial term of five years fromthe conclusion of the 27th Annual General Meeting till the conclusion of the 32ndAnnual General Meeting of the Company.
The Report of the Statutory Auditors along with the Notes to Schedules forms part ofthe Annual Report and contains an Unmodified Opinion without any qualificationreservation disclaimer or adverse remark.
The Statutory Auditors of the Company have not reported any fraud as specified inSection 143(12) of the Act.
M/s.Swati Kanse & Co. Chartered Accountants (FRN No. 132689W) have been appointedas the Statutory Auditors of the Company for an initial term of five years from theconclusion of the 32th Annual General Meeting till the conclusion of the 37nd AnnualGeneral Meeting of the Company subject to approval of Shareholder in ensuing AnnualGeneral Meeting of the Company.
Pursuant to the provisions of Section 204 of the Companies Act 2013 the Company hadappointed M/s. Pramod Jain and Co. Company Secretaries in Practice to undertake thesecretarial audit of the Company for the year 2019-20. The Secretarial Audit Report isannexed as Annexure I.
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD MEETINGS AND GENERAL MEETINGS
During Financial Year 2019-20 the Company has complied with the relevant provisions ofSecretarial Standards issued by the Institute of Company Secretaries of India on BoardMeetings and General Meetings.
The Board on the recommendation of the Audit Committee had appointed M/s. Dilip M.Bathija Cost Accountants (FRN No.100106) as cost auditor to conduct the audit ofCompany's cost records for the financial year ended March 31 2019. The Cost Auditors willsubmit their report for the FY 20 on or before the due date.
The Cost Audit Report for the year ended March 31 2019 was filed with the CentralGovernment within the prescribed time.
In accordance with the provisions of section 148 of the Act read with the Companies(Audit and Auditors) Rules 2014 since the remuneration payable to the Cost Auditors forFY 21 is required to be ratified by the shareholders the Board recommends the same forapproval by shareholders at the ensuing AGM.
As per requirements of Section 138(1) of the Companies Act 2013 read with rule 13 ofthe Companies (Accounts) Rules 2014 the Board of Directors of the Company had appointedMr. Vikas kakani Chartered Accountants Employee of the Company as Internal Auditor ofthe Company to conduct Internal Audit of business processes financial reporting controlscompliance with applicable laws regulations etc. for the year 2019-20.
Details relating to Fixed Deposits covered under Chapter V of the Companies Act2013as under:
|a. Accepted and renewed during the year ||: Rs 195922000/- |
|b. Remained unpaid or unclaimed as at the end of the year ||: 0.00 |
|c. Whether there has been any default in repayment of deposits or payment of interest thereon during the year ||: Nil |
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 124 and 125 of the Companies Act 2013 relevantamounts which remained unpaid or unclaimed for a period of seven years have beentransferred by the Company from to time to time on due dates to the Investor Educationand Protection Fund.
Pursuant to the provisions of Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has uploaded the details of unpaid and unclaimed amounts lying with the Company ason August 13 2019 (date of last Annual General Meeting) on the Company's website(www.damodargroup.com) as also on the Ministry of Corporate Affairs Rs website.
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.
A separate section on Corporate Governance forms part of our Report. A certificate hasbeen received from the Practicing Company Secretary regarding compliance of the conditionsof Corporate Governance as stipulated under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Both appear elsewhere in the Annual Report.
The Company has laid down Risk Management Policy. The Policy aims to identifyevaluate manage and monitor all types of risks associated with the business of theCompany. The Board as well as Audit Committee regularly overseas the risk managementprocess in the Company as required under 134(3)(n) of the Companies Act 2013 and SEBI(Listing Obligation and Disclosure Requirements) Regulations 2015. Your Company isoperating in Textile segment and has identified certain risks which may affect theperformance of the Company. These are operational risks such as fluctuation in cottonprices fluctuation in foreign exchange rates Labour problems and regulatory risks suchas change in Government Policy with respect to Textile Industry etc. The Company's RiskManagement Policy aims to suggest the steps to be taken to control and mitigate the riskassociated with the Company's Textile Business. We are of opinion that none of identifiedrisk is such that which may threaten the existence of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS:
As required under Regulation 34(2) (e) of the Securities Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations2015 the ManagementDiscussion and Analysis Report is presented in a separate section forming part of theAnnual Report.
VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES
The Company has established a vigil mechanism for directors and employees to reportgenuine concerns. The vigil mechanism provides for adequate safeguards againstvictimization of person who use vigil mechanism and also provide direct access to Chairmanof the Audit Committee and Managing Director of the Company in appropriate and exceptionalcases.
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww. damodargroup.com
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT2013
As required under the above mentioned Act we report that in the year 2019-20 no caseof sexual harassment of women was filed under the said Act.
MATERIAL CHANGES FROM END OF FINANCIAL YEAR TILL DATE OF REPORT
There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the report other than those disclosed inthe financial statements.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
During the year under review no significant material orders were passed by theRegulators or Courts or Tribunals impacting the going concern status and your Company'soperations. However Members attention is drawn to the Statement on Contingent Liabilitiesand Commitments in the Notes forming part of the Financial Statement.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO
The information required under section 134(3) (m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules2014 is given in the Annexure-II to thisreport.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form No. MGT-9 as perSections 92(3) and 134(3) of the Act read with the Rules framed thereunder are given as Annexure-IIIwhich forms part of this Report. The Annual Return for Financial Year 2018-19 is alsoavailable on the Company's website at www.damodargroup.com.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The brief outline of the CSR policy of the Company and the initiatives undertaken bythe Company on CSR activities during the year under review are set out in Annexure- IV ofthis Report in the format prescribed under the Companies (Corporate Social ResponsibilityPolicy)Rules 2014. The CSR policy is also available on the website of your Company at http://damodargroup.com/investors/policies/CSR Policy Final.pdf. For other details regarding the CSR Committee please refer tothe Corporate Governance Report which is a part of the Annual Report.
The Company's spend on the CSR activities has been less than the limits prescribedunder the Companies Act 2013. This is because the company did not find any furthersuitable projects or programs during the year to spend for achieving the prescribed limitas per the Companies Act2013. However the CSR activities are scalable which coupled withnew initiatives that may be considered in future moving forward the Company will endeavorto spend on CSR activities in accordance with the prescribed limits.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The prescribed particulars of Employee required under section 197 read with Rule 5 ofthe Companies (Appointment and remuneration of Managerial Personnel) Rules 2014 isattached as Annexure-V as form the part of Boards Report.
Having regard to the provisions of the first proviso to Section 136(1) of the Act andas advised the Annual Report excluding the aforesaid information is being sent to theMembers of the Company. The said information is available for inspection at the registeredoffice of the Company during working hours and any Member interested in obtaining suchinformation may write to the Company Secretary and the same will be furnished on request.
PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
There were no Related Party Transactions (RPTs) entered into by the company during thefinancial year which attracted the provisions of Section 188 of Companies Act 2013.However there were material RPTs which got covered as material RPTs under Regulation 23of SEBI LODR 2015. During the year 2019-20 pursuant to Section 177 of the Companies Act2013 and Regulation 23 of SEBI LODR 2015 all RPTs were placed before Audit Committee forits prior / omnibus approval and taken prior approval from shareholders. The requisitedisclosure in Form AOC-2 is furnished in Annexure-VI.
POLICY ON REMUNERATION OF DIRECTORS
Your Company has adopted a Remuneration Policy for the Directors KMP SeniorManagement and other employees pursuant to the provisions of the Act and the ListingRegulations. The key principles governing your Company's Remuneration Policy and connectedmatter as provided in section 178(3) of the Act has been disclosed in the CorporateGovernance Report which forms part of this Report. It is affirmed that the remunerationpaid to Directors KMP and all other employees is as per the Remuneration Policy of yourCompany. The Remuneration Policy for Directors KMP and other Employees is uploaded on thewebsite of your Company at http://damodargroup.com/investors/policies/remuneration_policy.pdf.
FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTOR(S):
In compliance with the requirements of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has put in place a familiarization programfor the Independent Directors to familiarize them with their role rights andResponsibilities as Directors the working of the Company nature of the industry in whichthe Company operates business model etc. The details of the familiarization program areexplained in the Corporate Governance Report and are also available on the Company'swebsite at www. damdoargroup.com.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS
According to Section 134(5)(e) of the Act the term Internal Financial Control ( Rs IFCRs ) means the policies and procedures adopted by the Company for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
The Company's internal control systems are commensurate with its size and the nature ofits operations. The Company has a strong and independent Internal Audit department. TheAudit Committee also deliberates with the members of the management considers the systemsas laid down and meets the internal auditors and statutory auditors to ascertain theirviews on the internal financial control systems. Further details are provided in theManagement Discussion and Analysis Report which forms a part of the Annual Report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
(A) Issue of share with differential rights
The Company has not issued any shares with differential rights and hence no disclosureis required as per provisions of Section 43(a) (ii) of the Act read with Rule 4(4) of theCompanies (Share Capital and Debenture) Rules 2014.
(B) Issue of Sweat Equity Shares
The Company has not issued any sweat equity shares during the year under review andhence no disclosure is required as per provisions of Section 54(1)(d) of the Act read withRule 8(13) of the Companies (Share Capital and Debenture) Rules 2014.
(C) Issue of Equity Shares Under Employee Stock Option Scheme
The Company has not issued any equity shares under Employees Stock Option Scheme duringthe year under review and hence no disclosure is required as per provisions of Section62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture)Rules 2014.
Your Directors wish to express their appreciation for the assistance and co-operationreceived from the Members Banks Government Authorities Customers SuppliersAssociates Employees and Various Authorities. The directors of the Company thank allstakeholders for their valuable sustained support and encouragement towards the conduct ofthe proficient operation of the Company and look forward to their continued support duringthe year.