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Dhar Textile Mills Ltd.
|BSE: 530949||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE044B01018|
|BSE 05:30 | 01 Jan||Dhar Textile Mills Ltd|
|NSE 05:30 | 01 Jan||Dhar Textile Mills Ltd|
Dhar Textile Mills Ltd. (DHARTEXTILE) - Director Report
Company director report
THE DHAR TEXTILE MILLS LIMITED Indore
Your Board of Directors has immense pleasure in presenting the 33rd AnnualReport of your Company along with the Audited Financial Statements for the Financial Yearended on 31st March 2017. Further in compliance with the Companies Act 2013the Company has made requisite disclosures in this Board's Report with the objective ofaccountability and transparency in its operations to make you aware about its performanceand future perspective of the Company.
1.1 FINANCIAL RESULTS (STANDALONE) AND STATE OF COMPANY'S AFFAIR AND CHANGE IN THENATURE OF BUSINESS:
The Board's Report is prepared based on the stand alone financial statements of thecompany for the year ended March 31 2017 is summarized below:
(Rs. In Lacs)
The Company had started its journey as a Private Limited Company in the year 1984subsequently converted in Public Company and further infused capital through an IPO andgot listed in capital market. The company is engaged in Textile Sector and currentlyhaving Yarn Spinning Unit (Yarn Division) and Fabric Weaving and Processing Unit (FabricDivision). Company's Yarn Division is located in Industrial Area Pithampur (MP) and itsFabric Division is located in Industrial area Indore (MP). Both the Divisions and all theproducts including performance and business environment thereof have been covered indetail in the Management Discussion and Analysis Report separately which is annexed asANNEXURE II with this report and shall form part of the Board's report.
1.2 WORKING PERFORMANCE REVIEW:
During the financial year incomes of the company is decreased from Rs. 2496.84 Lacs toRs. 414.35 Lacs and resulting in loss of Rs. 6.22 Lacs against the loss of Rs. 496.33 Lacsin the previous year.
Being a Sick Company your Directors are continuously trying hard to revive it byincrease the profitability during the current financial year with dedicated efforts of themanagement and with improving ability to source raw materials required from multiplesources in a timely and cost effective manner with reduced dependence on third parties.
During the year all the revenues were generated by Yarn Division only. The FabricDivision of the Company was not in operation throughout the year. Further the detailedperformance covered in the Management Discussion and Analysis Report separately which isannexed as ANNEXURE II with this report and shall form part of the Board's report.
1.3 CHANGES IN NATURE OF BUSINESS:
There is no change in the nature of business of the Company during the financial year2016-17.
1.4 SHARE CAPITAL:
The paid up equity capital as on March 31 2017 was Rs. 630.8753 Lacs. During the yearunder review the Company has not issued shares to its shareholders. Further that none ofthe directors were holding convertible instruments as on date. Apart from that Company isalso having Preference Share Capital of Rs. 350.00 Lacs which are due for redemption.
1.5 REVISION IN FINANCIAL STATEMENTS:
In terms of section 131 of the Companies Act 2013 the Financial Statements andBoard's Report are in compliance with the provisions of section 129 or section 134 of theact and that no revision has been made during any of the three preceding financial years.
1.6 SICK INDUSTRIAL COMPANY:
The Company is a Sick Company as its net worth was completely eroded due to heavyaccumulated losses. BIFR has restored the reference of the Company in earlier year to itsoriginal number. BIFR has also directed to the Company to prepare a Draft RehabilitationScheme and submit the same to Operating Agency and the same is under process. Debt of theCompany has been taken over by the Asset Reconstruction Company (India) Limited (ARCIL)from the Bankers.
There is no transfer of any amount to reserves.
Due to loss in the year under review the Board is unable to recommend any dividend forthe year.
The Company has neither accepted nor invited any deposit from the public and hencedirectives issued by Reserve Bank of India and the provisions of Chapter V (Acceptance ofdeposits by Companies) of the Companies Act 2013 and rules framed there under are notapplicable for the year.
5. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR UPTO THE DATE OFTHIS REPORT:
No material changes and commitments affecting the financial position of the companywhich have occurred between the end of the financial year of the company to which thefinancial statements relate and the date of this report.
6. PERFORMANCE AND FINANCIAL POSITION OF ASSOCIATE COMPANIES:
As per the Companies Act 2013 and as on date the company is neither having anySubsidiary Company u/s 2(87) nor any Associate Company u/s 2(6) and hence do not call forany disclosure under this head.
7. EXTRACT OF THE ANNUAL RETURN:
In compliance with section 92(3) section 134 (3) (a) and rule 11 of the Companies(Management and Administration) Rules 2014 the extract of the annual return in Form No.MGT-9 which is annexed as ANNEXURE I with this report and shall form part of the Board'sreport.
8. COMPOSITION AND NUMBER OF MEETINGS OF THE BOARD AND COMMITTEES THEREOF:
During the year under review various meetings of the Board of Directors and theirCommittees were held for various purposes which were in compliance with the provisions ofThe Companies Act 2013 rules made there under and all applicable provisions of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.
Further below are the Compositions of the Board and its Committees alongwith thedetails of their meetings held during the year and attendance thereon:
*Resigned w.e.f. 05/11/2016.
Board Meetings and Attendance:
Particulars I 30.05.2016 13.08.2016 07.09.2016 11.11.2016 21.11.2016 02.12.201614.02.2017
Mr. Pankaj Attended Attended Attended Attended Attended Attended Attended
Mr. Manish Attended Attended Attended Attended Attended Attended Attended
Mr. Pankaj Attended Attended Attended NA NA NA NA
Mr. Sunil Attended Attended Attended Attended Attended Attended Attended
Mr. Vijay Attended Attended Attended Attended Attended Attended Attended
*Resigned w.e.f. 05/11/2016.
Audit Committee Composition:
The Audit Committee was reconstituted by the Board. The Audit Committee comprises of 3members of which two including the Chairman of the Committee are Independent Directors.Member Directors of the Audit Committee presently are as under:-
*Resigned w.e.f. 05/11/2016.
Audit Committee Meetings and Attendance:
*Resigned w.e.f. 05/11/2016.
The Board has considered all recommendations of the Audit Committee as and whenprovided during the year under review and hence do not call for any disclosure underSection 177(8) of the Companies Act 2013.
Nomination and Remuneration Committee Composition:
The Nomination and Remuneration Committee was reconstituted by the Board. TheNomination and Remuneration Committee comprises of 4 members of which two including theChairman of the Committee are Independent Directors. Member Directors of the Nominationand Remuneration Committee presently are as under
*Resigned w.e.f. 05/11/2016.
Nomination and Remuneration Committee Meetings and Attendance:
*Resigned w.e.f. 05/11/2016.
Stakeholders Relationship Committee Composition:
The Stakeholders Relationship Committee was reconstituted by the Board. TheStakeholders Relationship Committee comprises of 4 members of which two including theChairman of the Committee are Independent Directors. Member Directors of the StakeholdersRelationship Committee presently are as under :-
*Resigned w.e.f. 05/11/2016.
Stakeholders Relationship Committee Meetings and Attendance:
*Resigned w.e.f. 05/11/2016.
9. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(c) read with Section 134(5) of the Companies Act 2013 theDirectors based on representation received from the operating management and after dueenquiry confirm in respect of the audited financial accounts for the year ended March 31st2017:
a) That in preparation of the annual accounts the applicable accounting standards hadbeen followed and that there were no material departures;
b) That the Directors had in consultation with the Statutory Auditors selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company for the year ended March 31st 2017 and the profit and loss Accountof the Company for that period;
c) That the directors have 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) That the Directors had prepared the annual accounts on a going concern basis;
e) That the directors have laid down internal financial controls to be followed by thecompany and such internal financial controls are adequate and were operating effectively;and
f) That the directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and such systems were adequate and operatingeffectively.
10.1 CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:
During the year under report Mr. Manish Jajoo the Director of the Company would beretiring by rotation at the forthcoming Annual General Meeting of the Company. Proposalsfor their re-appointment have been included in the Notice of Annual General Meeting foryour approval.
Shri Pankaj Singhal Independent Director of the company has resigned w.e.f.05/11/2016.
All the intimations pertaining to the appointments and resignations if any madeduring the year has been given to Stock Exchange where the shares of the Company arelisted and also the relevant records are duly updated with the Registrar of CompaniesGwalior (M.P.) wherever required.
10.2 DECLARATION OF DIRECTORS:
As per the declaration received in Form DIR-8' pursuant to section 164(2) of theCompanies Act 2013 and Rule 14(1) of Companies (Appointment and Qualification ofDirectors) Rules 2014 none of the Directors of the Company is disqualified from beingappointment as Directors.
11.1 APPOINTMENT/RE-APPOINTMENT OF INDEPENDENT DIRECTORS:
All the Independent Directors are well appointed in the Board of the Company incompliance with the Companies Act 2013 and Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 entered into by theCompany with Stock Exchange. Further that all independent directors shall hold office fora term up to five consecutive years on the Board of a Company but shall be eligible forreappointment for next five years on passing of a special resolution by the Company anddisclosure of such appointment in the Board's report.
11.2 DECLARATION BY INDEPENDENT DIRECTORS:
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence under sub-section (6) of section149 of the Act and of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 entered into by the Company with the StockExchanges.
11.3 FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The directors will be introduced to all the Board members and the senior managementpersonnel such as Chief Financial Officer and Various Department heads individually toknow their roles in the organization and to understand the information which they may seekfrom them while performing their duties as a Director. And meeting may be arranged forIndependent Directors with aforesaid officials to better understand the business andoperation of the Company. As part of continuous updating and familiarization with theCompany every Independent Director will be taken for visits to the factory ormanufacturing units and other branch of the company where officials of various departmentsapprise them of the operational and sustainability aspects of the plants to enable them tohave full understanding on the activities of the Company and initiatives taken on safetyquality etc. The Company may also circulate news and articles related to the industry fromtime to time and may provide specific regulatory updates. The details of suchfamiliarization programmes for Independent Directors are posted on the website of theCompany and can be accessed at http:// www.dhartextile.com/. The detail of Familiarization Programme held on 02.01.2017 is given below.
11.4 SEPARATE MEETING OF INDEPENDENT DIRECTORS:
As mandated by Clause VII of Schedule IV of the Companies Act 2013 a separate meetingof Independent Directors was held on 02.01.2017.
11.5 EVALUATION BY INDEPENDENT DIRECTORS:
The Independent Directors in their meeting has reviewed the performance ofNon-Independent directors and Board as a whole including reviewing the performance of theChairperson of the company taken into account the views of Executive Directors andNon-Executive Directors. The policy on evaluation including above said criteria for theevaluation of the Board individual directors including independent directors and thecommittee of the board has been laid down under point no. 12 below.
12. DISCLOSURE IN TERMS OF NOMINATION AND REMUNERATION POLICY:
NOMINATION REMUNERATION AND EVALUATION POLICY PREFACE
The Remuneration Committee of THE DHAR TEXTILE MILLS LIMITED ("the Company")has been formed to review and make recommendations on annual salaries performancecommission perquisites and other employment conditions of the Executive Directors KeyManagerial Personnel and other employees. In order to align with the provisions of theCompanies Act 2013 and the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board changed the nomenclature of"Remuneration Committee" as "Nomination and Remuneration Committee".
The Nomination and Remuneration Committee and this Policy are in compliance withSection 178 of the Companies Act 2013 read along with the applicable rules thereto andunder the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015.
The Key Objectives of the Committee would be:
- To guide the Board in relation to appointment and removal of Directors KeyManagerial Personnel and Senior Management.
- To evaluate the performance of the members of the Board and provide necessary reportto the Board for further evaluation of the Board.
- To recommend to the Board on Remuneration payable to the Directors Key ManagerialPersonnel and Senior Management.
The definitions of some of the key terms used in this Policy are given below.
Terms not defined in the policy shall have the meaning as per the Companies Act 2013.
"Key Managerial Personnel" means -
Chief Executive Officer or the Managing Director or the Manager;
Chief Financial Officer; and
Such other officer as may be prescribed.
"Senior Management" means Senior Management means personnel of the companywho are members of its core management team excluding the Board of Directors. This wouldalso include all members of management one level below the executive directors includingall functional heads.
ROLE OF COMMITTEE:
The role of the Committee inter alia will be the following:
To formulate a criteria for determining qualifications positive attributes andindependence of a Director;
To recommend to the Board the appointment and removal of Senior Management;
To carry out evaluation of Director's performance and recommend to the Boardappointment / removal based on his / her performance;
To recommend to the Board on (i) policy relating to remuneration for Directors KeyManagerial Personnel and Senior Management and (ii) Executive Directors remuneration andincentive;
a) To make recommendations to the Board concerning any matters relating to thecontinuation in office of any Director at any time including the suspension or terminationof service of an Executive Director as an employee of the Company subject to the provisionof the law and their service contract;
b) Ensure that level and composition of remuneration is reasonable and sufficientrelationship of remuneration to performance is clear and meets appropriate performancebenchmarks;
c) To devise a policy on Board diversity;
d) To develop a succession plan for the Board and to regularly review the plan.
a) The Committee shall consist of a minimum 3 non-executive directors majority of thembeing independent.
b) Minimum two (2) members shall constitute a quorum for the Committee meeting.
c) Membership of the Committee shall be disclosed in the Annual Report.
d) Term of the Committee shall be continued unless terminated by the Board ofDirectors.
a) Chairman of the Committee shall be an Independent Director.
b) Chairperson of the Company may be appointed as a member of the Committee but shallnot be a Chairman of the Committee.
c) In the absence of the Chairman the members of the Committee present at the meetingshall choose one amongst them to act as Chairman.
d) Chairman of the Nomination and Remuneration Committee meeting could be present atthe Annual General Meeting or may nominate some other member to answer the shareholders'queries.
FREQUENCY OF MEETINGS:
The meeting of the Committee shall be held at such regular intervals as may berequired.
COMMITTEE MEMBERS' INTERESTS:
A member of the Committee is not entitled to be present when his or her ownremuneration is discussed at a meeting or when his or her performance is being evaluated.
The Committee may invite such executives as it considers appropriate to be present atthe meetings of the Committee.
The Company Secretary of the Company shall act as Secretary of the Committee.
a) Matters arising for determination at Committee meetings shall be decided by amajority of votes of Members present and voting and any such decision shall for allpurposes be deemed a decision of the Committee.
b) In the case of equality of votes the Chairman of the meeting will have a castingvote.
The duties of the Committee in relation to nomination matters include:
Ensuring that there is an appropriate induction & training programme in place fornew Directors and members of Senior Management and reviewing its effectiveness;
Ensuring that on appointment to the Board Non-Executive Directors receive a formalletter of appointment in accordance with the Guidelines provided under the Companies Act2013;
Identifying and recommending Directors who are to be put forward for retirement byrotation.
Determining the appropriate size diversity and composition of the Board;
Setting a formal and transparent procedure for selecting new Directors for appointmentto the Board;
Developing a succession plan for the Board and Senior Management and regularlyreviewing the plan;
Evaluating the performance of the Board members and Senior Management in the context ofthe Company's performance from business and compliance perspective;
Making recommendations to the Board concerning any matters relating to the continuationin office of any Director at any time including the suspension or termination of serviceof an Executive Director as an employee of the Company subject to the provision of the lawand their service contract.
Delegating any of its powers to one or more of its members or the Secretary of theCommittee;
Recommend any necessary changes to the Board.
Considering any other matters as may be requested by the Board; and
POLICY FOR APPOINTMENT AND REMOVAL OF DIRECTOR KMP AND SENIOR MANAGEMENT:
1. Appointment Criteria and Qualifications
a) The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director KMP or at Senior Managementlevel and recommend to the Board his / her appointment.
b) A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person is sufficient /satisfactory for the concerned position.
c) The Company shall not appoint or continue the employment of any person as Whole-timeDirector who has attained the age of seventy years. Provided that the term of the personholding this position may be extended beyond the age of seventy years with the approval ofshareholders by passing a special resolution based on the explanatory statement annexed tothe notice for such motion indicating the justification for extension of appointmentbeyond seventy years.
2. Term / Tenure
Managing Director/Whole-time Director:
The Company shall appoint or re-appoint any person as its Executive Chairman ManagingDirector or Executive Director for a term not exceeding five years at a time. Nore-appointment shall be made earlier than one year before the expiry of term.
An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for re-appointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board's report.
- No Independent Director shall hold office for more than two consecutive terms of uptomaximum of 5 years each but such Independent Director shall be eligible for appointmentafter expiry of three years of ceasing to become an Independent Director. Provided that anIndependent Director shall not during the said period of three years be appointed in orbe associated with the Company in any other capacity either directly or indirectly.
- At the time of appointment of Independent Director it should be ensured that numberof Boards on which such Independent Director serves is restricted to seven listedcompanies as an Independent Director and three listed companies as an Independent Directorin case such person is serving as a Whole-time Director of a listed company or such othernumber as may be prescribed under the Act.
The Committee shall carry out evaluation of performance of every Director KMP andSenior Management Personnel at regular interval (yearly).
Due to reasons for any disqualification mentioned in the Act or under any otherapplicable Act rules and regulations there under the Committee may recommend to theBoard with reasons recorded in writing removal
of a Director KMP or Senior Management Personnel subject to the provisions andcompliance of the said Act rules and regulations.
The Director KMP and Senior Management Personnel shall retire as per the applicableprovisions of the Act and the prevailing policy of the Company. The Board will have thediscretion to retain the Director KMP Senior Management Personnel in the same position/remuneration or otherwise even after attaining the retirement age for the benefit of theCompany.
The duties of the Committee in relation to remuneration matters include:
To consider and determine the Remuneration Policy based on the performance and alsobearing in mind that the remuneration is reasonable and sufficient to attract retain andmotivate members of the Board and such other factors as the Committee shall deemappropriate all elements of the remuneration of the members of the Board.
To approve the remuneration of the Senior Management including key managerial personnelof the Company maintaining a balance between fixed and incentive pay reflecting short andlong term performance objectives appropriate to the working of the Company.
To delegate any of its powers to one or more of its members or the Secretary of theCommittee.
To consider any other matters as may be requested by the Board;
Professional indemnity and liability insurance for Directors and senior management.
POLICY FOR REMUNERATION TO DIRECTORS/KMP/SENIOR MANAGEMENT PERSONNEL:
1. Remuneration to Managing/Whole-time / Executive / Managing Director KMP and SeniorManagement Personnel:
The Remuneration/ Compensation/ Commission etc. if any to be paid to Director /Managing Director etc. shall be governed as per provisions of the Companies Act 2013 andrules made there under or any other enactment for the time being in force. However noremuneration has been paid for the FY 2016-17 to any director.
2. Remuneration to Non- Executive / Independent Director:
The Non-Executive Independent Director may receive remuneration / compensation /commission as per the provisions of Companies Act 2013. The amount of sitting fees shallbe subject to ceiling/ limits as provided under Companies Act 2013 and rules made thereunder or any other enactment for the time being in force. However no remuneration has beenpaid for the FY 2016-17 to any director.
The following parameters for the purpose of evaluating the performance of the Board andthat of Committees and Individual Directors:
Evaluation of Board
Some of the specific issues and questions that should be considered in a performanceevaluation of the entire Board by the Independent Directors are set out below:
Is the composition of the board appropriate with the right mix of knowledge and skillsrequired to drive organizational performance in the light of future strategy?
Members of the board meet all applicable independence requirements.
The Board of Directors is effective in establishing a corporate environment thatpromotes timely and effective disclosure fiscal accountability high ethical standardsand compliance with applicable laws and regulations.
The Board of Directors is effective in developing a corporate governance structure thatallows and encourages the Board to fulfill its responsibilities.
5 The Company's systems of control are effective for identifying material risks andreporting material violations of policies and law and The Board is provided withsufficient information about material risks and problems that affects the Company'sbusiness and prospects.
6 The Board receives regular financial updates and takes all necessary steps to ensurethe operations of the organization are sound and reviews the organization's performance incarrying out the stated mission on a regular basis.
7 Are sufficient numbers of board meetings of appropriate length being held to enableproper consideration of issues?
8 The information provided to directors prior to Board meetings meets expectations interms of length and level of detail and Board members come prepared to meetings and askappropriate questions of management and address issues that might present a conflict ofinterest.
9 Board meetings are conducted in a manner that encourages open communicationmeaningful participation and timely resolution of issues.
10 The Chairman of the Board effectively and appropriately leads and facilitates theBoard meetings and the policy and governance work of the Board.
11 Nomination and appointment of Board members and their Remuneration follow clearlyestablished procedures using known criteria as laid down by the Nomination andRemuneration Committee.
12 The Board oversees the role of the independent auditor from selection to terminationand has an effective process to evaluate the independent auditor's qualifications andperformance (through its Audit Committee).
13 Company has a system for Corporate Social Responsibility Stakeholder Relationshipsand for prohibition of insider trading
14 Company has necessary Committees which are required and these Committees are workingeffectively
15 Adherence to Internal Policies and Procedures.
Based on the above criteria Board has to be assessed by giving a rating according tothe Rating Scale. The total number of the ratings awarded will be averaged over the numberof persons who have awarded the ratings.
The process of evaluation shall be done by Independent Directors only. Assistance inthe process will be provided by a person so authorized by the Board and for this purposethe person will report to the Board.
Evaluation of Committees
Some of the specific issues and questions that should be considered in a performanceevaluation of the Committees of the Board are set out below:
Compliance with Articles of Association Companies Act and Other applicable laws.
Compliance with Code of Conduct of the Company.
Committee's accomplishments w.r.t. performance objectives.
Adherence to Articles of Association Companies Act and Other applicable laws.
Redressal of Complaints and Grievances.
Coordination with other committees and with Board of Directors.
Fulfillment of Roles and Responsibilities in accordance to Companies Act and Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.
Adherence to Internal Policies and Procedures.
Based on the above criteria Committees has to be assessed by giving a rating accordingto the Rating Scale. The total number of the ratings awarded will be averaged over thenumber of persons who have awarded the ratings. The process of evaluation shall be doneall the Directors of the Company. Assistance in the process will be provided by a personso authorized by the Board and for this purpose the person will report to the Board.
Evaluation of Individual Directors (Independent Directors)
Some of the specific issues and questions that should be considered in the performanceevaluation of an Independent Director (the exercise in which the concerned director beingevaluated shall not be included) are set out below:
Attendance and participations in the Meetings and timely inputs on the minutes of themeetings
Adherence to code of conduct of Company and disclosure of non - independence as andwhen it exists and disclosure of interest
Raising of valid concerns to the Board and constructive contribution to resolution ofissues at meetings
Interpersonal relations with other directors and management
Objective evaluation of Board's performance rendering independent unbiased opinion
Understanding of the Company and the external environment in which it operates andcontribution to strategic direction.
Safeguarding interest of whistle-blowers under vigil mechanism and Safeguard ofconfidential information
Adherence to Internal Policies and Procedures.
Based on the above criteria each of the Independent Directors has to be assessed bygiving a rating according to the Rating Scale. The total number of the ratings awardedwill be averaged over the number of persons who have awarded the ratings.
The process of evaluation shall be done by the other directors (including otherIndependent Directors). Assistance in the process will be provided by a person soauthorized by the Board and for this purpose the person will report to the Board.
Evaluation of Individual Directors (NON - INDEPENDENT DIRECTORS / CMD / WTD)
Some of the specific issues and questions that should be considered in the performanceevaluation of a NonIndependent Director /WTD/ CMD (the exercise in which the concerneddirector being evaluated shall not be included) are set out below:
Attendance participations in the Meetings and timely inputs on the minutes of themeetings
Contribution towards growth of the Company including actual vis-a-vis budgetedperformance.
Leadership initiative like new ideas and planning towards growth of the Company andsteps initiated towards Branding of the Company
Adherence to code of conduct of Company
Team work attributes and supervising & training of staff members
Compliance with policies Reporting of frauds violation etc. and disclosure ofinterest
Safeguarding of interest of whistle blowers under vigil mechanism and Safeguard ofconfidential information
Adherence to Internal Policies and Procedures.
Based on the above criteria each of the Non - Independent Directors / CMD / WTD has tobe assessed by giving a rating according to the Rating Scale. The total number of theratings awarded will be averaged over the number of persons who have awarded the ratings.
The process of evaluation shall be done by the other directors (including other Non -Independent Directors / CMD / WTD). Assistance in the process will be provided by a personso authorized by the Board and for this purpose the person will report to the Board.
MINUTES OF COMMITTEE MEETING:
Proceedings of all meetings must be recorded in minutes and signed by the Chairman ofthe Committee at the subsequent meeting. Minutes of the Committee meetings will be tabledat the subsequent Board and Committee meeting.
REVIEW AND AMENDMENT
The Nomination and Remuneration Committee or the Board may review the Policy as andwhen it deems necessary.
The Nomination and Remuneration Committee may issue the guidelines proceduresformats reporting mechanism and manual in supplement and better implementation to thisPolicy if it thinks necessary.
This Policy may be amended or substituted by the Nomination and Remuneration Committeeor by the Board as and when required and also by the Compliance Officer where there is anystatutory changes necessitating the change in the policy.
Note: Nomination and Remuneration Policy of the Company is also available on thewebsite of the Company
i.e. www.dhartextile. com
(i) Statutory Auditors:
The appointment of M/s B. Bansal & Co. Chartered Accountants as auditors of theCompany was approved by the shareholders in the Annual General Meeting held on 30.09.2015upto the conclusion of the Annual General Meeting for the Financial Year 2016-17. Furtherthe proposals for appointment of M/s. Airen & Saluja. Chartered Accountants (ICAIFirm Registration No.: 0004588C) for Five Financial Year (From F.Y. 2017-18 to 2021-22)have been included in the Notice of Annual General Meeting for approval by Shareholder inthe ensuing Annual General Meeting and the Company has received a certificate from theauditors to the effect that if they are appointed it would be in accordance with theprovisions of Section 141 of the Companies Act 2013.
(ii) Cost Auditors:
Financial Year 2016-17:
The company does not falls within the provisions of Section 148 of Company's Act 2013read with the Companies (Cost records & Audit) Rules 2014 therefore no such recordsrequired to be maintained
(iii) Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Ms. Shiwali Jhanwar Company Secretary in Practice to undertake the SecretarialAudit of the Company. The report of the Secretarial Auditor in Form MR-3 is enclosed asAnnexure-IV with this report and shall form part of the Board's report.
(iv) Internal Auditor:
The Company has appointed M/s. JRAM & Co. Chartered Accountants Indore as theInternal Auditor of the company to do the Internal Audit function.
13.2 AUDITOR'S REPORT/ SECRETARIAL AUDIT REPORT:
The Auditors in their report have referred to the Notes forming part of the FinalAccount considering the principle of the materiality; the notes are self explanatory anddo not need any further comments under section 134 of Companies Act 2013.
Explanations for remark in Secretarial Auditor's Report:
Point No.2 (a) Due to heavy losses and sick Company status it is difficult to bearextra cost however company has placed all the information and results at BSE and its ownwebsite and has started publishing the same in newspaper also.
Point No.2 (b) Company has already applied and trying for revocation of suspension.
Point No.2 (c) The other regional stock exchanges are closed or in the process ofclosing as per SEBI order hence company has not circulating the information to them asthe shares of the Company are listed at BSE which is having national wide approach.
Point No.2 (d & e) As the Company is sick company and defaulted in the payment ofits secured debts and having negative CIBIL nobody is interested to become Director orCompany Secretary however Company is trying to comply with the requirements.
Point No.2 (f) Due to continue losses Company has become sick company. Looking intofinancial condition Company is not in position to redeem Preference Shares as per termsof the issue and pay the dividend accrued thereon. A detailed note is also provided inNotes to the Account annexed with Balance Sheet of the Company.
Point No.2 (g) Amount will be transferred at the earliest.
Point No.2 (h) Company is trying to purchase Hank Yarn Obligation to fulfill therequirement which will be done at the earliest.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
During the year under review your Company has not provided loans/guarantees and madeinvestments in terms of section 186 of the Companies Act 2013 if any.
The details regarding such transactions are given in the notes to the financialStatements
15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
During the year the Company has not entered into any material transactions withrelated parties and hence as there are no such material transactions inconsistent withsub-section (1) of section 188 of the Companies Act 2013 so no AOC-2 is required to begiven in this report. Suitable disclosure as required by the Accounting Standard (AS 18)has been made in the notes to the Financial Statements. The company has adopted a Policyon Related Party Transaction which is available on the website of the Company i.e. http://www.dhartextile.com/ . Further for all the related party transactions entered into by thecompany during the year under review kindly refer notes to Financial Statements.
16. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
(A) Conservation of energy-
(i) Company ensures that the manufacturing operations are conducted in the mannerwhereby optimum utilization and maximum possible savings of energy is achieved.
(ii) No specific investment has been made in reduction in energy consumption.
(iii) As the impact of measures taken for conservation and optimum utilization ofenergy are not quantitative its impact on cost cannot be stated accurately.
(B) Technology absorption-
(i) Company's products are manufactured mostly by using indigenous technology and nooutside technology is being used for manufacturing activities.
(ii) The company has no specific research & development expenditure during theyear;
(iii) No imported technology is installed by the company.
(C) Foreign exchange earnings and Outgo-
During the year the Company has no foreign exchange earnings and expenses.
17. BUSINESS RISK MANAGEMENT:
Your Directors have adopted a Risk Management Policy for the Company. The AuditCommittee and the Board of Directors of the Company reviewed the risks if any involvedin the Company from time to time and took appropriate measures to minimize the same. TheAudit Committee ensures that the Policy for Risk Management is adopted across the Companyin an inclusive manner.
18. CORPORATE SOCIAL RESPONSIBILITY (CSR):
In terms of the threshold limits provided under Section 135 of the Companies Act 2013and Rule 3 of the Companies (Corporate Social Responsibility Policy) Rules 2014 yourCompany has not falls in the ambit of the said section and accordingly the provisions ofthe section is not applicable to the Company.
19. FORMAL ANNUAL EVALUATION:
Pursuant to section 134 (3) (p) of the Companies Act 2013 and Rule 8(4) of Companies(Accounts) Rules 2014 and pursuant to Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Board has Carried out anevaluation of its own performance the directors individually as well as the evaluation ofits Committees as per the criteria laid down in the Nomination Remuneration andEvaluation policy. The said policy including above said criteria for the evaluation of theBoard individual directors including independent directors and the committee of the boardhas been laid down at point no. 13 above.
20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
During the year there are no significant material orders passed by the Regulators /Courts/ Tribunals impacting the going concern status of the Company and its futureoperations.
21. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has a proper internal control system which provides adequate safeguardsand effective monitoring of the transactions and ensures that all assets are safeguardedand protected against loss from unauthorized use or disposition.
The Company has an internal audit system from an outside agency which ensures that theCompany's control mechanism is properly followed and all statutory requirements are dulycomplied with.
Moreover the audit committee of the Company comprising of all independent directorsregularly reviews the audit plans adequacy of internal control as well as compliance ofaccounting standards.
Also the CFO has the responsibility for establishing and maintaining internal controlsfor financial reporting and that they also have the overall responsibility to evaluate theeffectiveness of internal control systems of the company pertaining to financial reportingand they have to disclose to the auditors and the Audit Committee deficiencies in thedesign or operation of such internal controls if any of which they are aware and thesteps they have taken or propose to take to rectify the deficiencies.
22. DISCLOSURE IN TERMS OF VIGIL MECHANISM:
The Company believes in the conduct of its affairs in a fair and transparent manner byadopting highest standards of professionalism honesty integrity and ethical behavior.The Company is committed to develop a culture in which every employee feels free to raiseconcerns about any poor or unacceptable practice and misconduct. In order to maintain thestandards has adopted lays down this Whistle Blower Policy to provide a framework topromote responsible and secure whistle blowing.
The Board of Directors of your Company has adopted the Vigil Mechanism and WhistleBlower Policy in compliance of Companies Act 2013. The said policy has been uploaded onthe website of the company i.e. http:// www.dhartextile.com/ .
We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Companies Act 2013 has mandated theformulation of certain policies for all listed companies. All our corporate governancepolices are available on our website as mentioned below .The policies are reviewedperiodically by the board and updated on need and new compliance requirement.
24. COMMISSION RECEIVED BY DIRECTORS FROM HOLDING AND SUBSIDIARY:
During the year under review neither the Managing Director nor Whole-time Director isin receipt of commission from the company and also has not received any remuneration orcommission from any holding or subsidiary company of company u/s 197(14).
25. MANAGERIAL REMUNERATION:
Disclosures Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.
1. The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;
No salary has been provided to any of the Directors during the year under review.
2. The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year;
#No salary has been provided to any of the Directors and Key Managerial Person duringthe year under review.
3. The percentage increase in the median remuneration of employees in the financialyear is 13.69
4. The number of permanent employees on the rolls of company as on 31.03.2017 are 110
5. Average Percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof;
6. It is hereby affirmed that the remuneration paid by the Company to its Employeesduring the year under review is as per the Nomination Remuneration & EvaluationPolicy of the company.
26. EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS:
The company has not issued any shares with differential voting rights and accordinglythe provisions of Section 43 read with Rule 4(4) of the Companies (Share Capital andDebentures) Rules 2014 of the Companies Act 2013 and rules framed there under are notapplicable for the year.
27. DETAILS OF SWEAT EQUITY SHARES:
The company has not issued any sweat equity shares and accordingly the provisions ofSection 54 read with Rule 8(13) of the Companies (Share Capital and Debentures) Rules2014 of the Companies Act 2013 and rules framed there under are not applicable for theyear.
28. DETAILS OF EMPLOYEES STOCK OPTION SCHEME:
The company has not granted stock options and accordingly the provisions of Section62(1)(b) read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules 2014of the Companies Act 2013 and rules framed there under are not applicable for the year.
29. DISCLOSURE OF VOTING RIGHTS NOT EXCERCISED:
The company has not made any provision of money for the purchase of or subscriptionfor shares in the company or its holding company if the purchase of or the subscriptionfor the shares by trustees is for the shares to be held by or for the benefit of theemployees of the company and accordingly the provisions of Chapter IV (Share Capital andDebentures) of the Companies Act 2013 and rules framed there under are not applicable forthe year.
Employee's relation continued to be cordial throughout the year. Your Directors wish toplace on record their sincere appreciation for the excellent spirit with which the entireteam of the Company worked at factory and office premises in such hard time of theCompany.
During the year under review none of the employee has received remuneration of Rs.8.50 Lacs per month or Rs. 1.20 Crores per year or at a rate which in the aggregate isin excess of that drawn by the managing director or whole-time director or manager andholds by himself or along with his spouse and dependent children not less than twopercent of the equity shares of the company pursuant to Section 197 (12) of the CompaniesAct 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 and hence do not call for any further details referred to in Rule5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
31. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT:
As per Regulation 15(2)(a) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the compliance with theCorporate Governance provisions as specified in Regulations 17 to 27 and clauses (b) to(i) of sub-regulation (2) of regulation 46 and para C D and E of Schedule V ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 are not applicable to the company because the paid up equity sharecapital of the company is not exceeding rupees ten crore and the net worth of the companyis not exceeding rupees twenty five crore as on the last day of the previous financialyear.
Management Discussion and Analysis Report in terms of Regulation 34 (2)(e) SecuritiesAnd Exchange Board Of India (Listing Obligations And Disclosure Requirements) Regulations2015 is annexed as ANNEXURE - II with this report and shall form part of the Board'sreport.
32. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
The Company has formed an Internal Complaints Committee where employees can registertheir complaints against sexual harassment. This is supported by the Sexual HarassmentPolicy which ensures a free and fair enquiry process with clear timelines. Further Duringthe year under review the Company has not received any complaint under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
33. PAYMENT OF LISTING FEES:
Annual listing fee for the year 2017-18 has been not paid by the Company to BSE.
34. PAYMENT OF DEPOSITORY FEES:
Annual Custody/Issuer fee for the year 2017-18 has been not paid by the Company to NSDLand CDSL.
35. DEMAT STATUS:
The company's shares are presently held in both electronic and physical modes.
36. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
The Company neither has any Subsidiary Company as defined u/s 2(87) nor any AssociateCompany as defined u/s 2(6) of Companies Act 2013 nor any Joint Ventures as on date ofthis report and further that none of such companies became or ceased to be as such duringthe year under review.
37. TRANSFER TO INVESTORS EDUCATION & PROTECTION FUND:
As per the provisions of section 125 of the Companies Act 2013 and as per rule 3 ofthe Investor Education and Protection Fund (Awareness and Protection of Investors) Rules2001 the Unclaimed Dividend is required to be transferred to the said Investor Educationand Protection Fund Account which will be deposited shortly.
38. CODE OF FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION AND CODE OFCONDUCT UNDER SEBI (PROHIBITION OF INSIDER TRADING) REGULATIONS 2015
Pursuant to Regulation 8 of Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations 2015 the Board of Directors has formulated and adopted the"Code of Practices and Procedures for Fair Disclosure of Unpublished Price SensitiveInformation" (Code of Fair Disclosure) of the Company.
The Board has also formulated and adopted "Code of Conduct for Prohibition ofInsider Trading" (Code of Conduct) of the Company as prescribed under Regulation 9 ofthe said Regulations.
39. DISCLOSURE OF FRAUDS IN THE BOARD'S REPORT U/S 143 OF THE COMPANIES ACT 2013
During the year under review your Directors do not observe any contract arrangementand transaction which could result in a fraud; your Directors hereby take responsibilityto ensure you that the Company has not been encountered with any fraud or fraudulentactivity during the Financial Year 2016-17.
Your Directors wish to place on record their appreciation for and gratitude to theBank Asset Reconstruction Company (India) Ltd. (ARCIL) and ARSEC (India) Ltd. for theirvaluable support and co-operation.
Your directors also wish to place on record their appreciation of the wholehearted andcontinued support extended by the shareholders investors employees and workers of thecompany which had always been a source of strength for the Company.