Your Directors are pleased to present the 32nd Annual Report and the AuditedAccounts for the Financial Year ended 31st March 2018.
The table given below gives the financial highlights of the Company on standalone basisfor the year ended 31st March 2018 as compared to the previous financial year.
|Financial Results ||2017-18 (Rupees) ||2016-17 (Rupees) |
|Gross Revenue ||5168939844 ||5068322873 |
|Profit for the Year ||132050999 ||90824573 |
|Add: Balance Brought Forward ||762790721 ||683793831 |
|Less: Proposed Final Dividend ||10400000 ||10400000 |
|Less: Dividend Distribution Tax ||2117202 ||2117191 |
|Add: Remeaurements of Defined Benefit Plan ||325741 ||689508 |
|Balance Carried forward ||882650259 ||762790721 |
The Directors have recommended a dividend @ Rs. 0.20 Paise per equity share of Rs. 2/-each for the approval of Shareholders at the ensuing Annual General Meeting.
Management Discussion and Analysis:
a) Industry structure & Development:
The domestic textile industry in india is projected to reach uS$ 230 billion by 2020 asper recent iBeF (india Brand equity Foundation) report from estimation uS$ 150 billion inJuly 2017. Rising per capita income favorable demographics and a shift in preference tobranded products are likely to boost demand. exports have been a core feature ofindias textile sector. Textile and apparel exports from india are expected toincrease to uS$ 82 billion by 2021 from uS$ 37 billion in 2017. The indian Textileindustry contributes to around 10% of industry output in value terms 2% of IndiasGDP and to 15% of the countrys export earnings. India is also the 2nd largestproducer of man-made fibre and filament globally. india is the second largest supplycountry with a share of 11% after China with a share of 39%. over 25% of the uS importsin this industry originate from India. Mitigating the repercussions of currencyfluctuation remains a challenge.
The textile industry in general had a negative impact due to the after effects ofstructural transformation that took place in the form of implementation of demonetizationand GST. Consumers preference to go in for e-commerce / on-line sales and reductionin export benefits have reduced margins thus hindering the promotion of exports.
b) Opportunities & Threats:
Chinas slow investment in textiles and shift to high tech industries will have apositive impact on indian exports in the coming years.
Further USAs withdrawal from Trans-Pacific Partnership (TPP) and chances oftermination of North American Free Trade Agreement (NAFTA) between uSA Canada Mexico for free trade will increase their cost due to application of import dutiesamongst their countries. Consequently indian industry should have opportunity to promoteits own exports.
The indian government has come up with a number of export promotion policies for thetextiles sector. it has also allowed 100 per cent FDi in the indian textiles sector underthe automatic route. initiative will be taken into consideration by Government of india.
The Union Ministry of Textiles Government of India along with EnergyEfficiency Services Ltd (EESL) has launched a technology upgradation scheme called SAATHI(Sustainable and Accelerated Adoption of Efficient Textile Technologies to Help SmallIndustries) for reviving the powerloom sector of india.
The Gujarat government's decision to extend its textile policy by a year is set.It is believes to attract Rs 5000 crore (US$ 50 billion) of more investment in sectorsacross the value chain. The government estimates addition till now of a million units ofspindle capacity in the spinning sector and setting up of over 1000 units in technicaltextiles.
The Textile Ministry of India earmarked Rs 690 crore (US$ 106.58 million) forsetting up 21 ready made garment manufacturing units in seven states for development andmodernisation of indian Textile Sector.
india Home Textile continues to remain under the pressure of oversupply situation fromdomestic suppliers and we believe it will take some time for the industry to come up tooptimum capacity utilisation levels.
c) Segmental Review and Analysis:
The financial performance of our Company has been fair even though market conditions indomestic as well as export markets were weak.
Due to low demand and pressure on prices the margins have been under pressure. Demandfor cotton fabrics from ready-made garment manufacturers converters doing job works andsmall traders have been going down because of the cash crunch which is still persisting intextile hubs including Bhiwandi. unless the general market improves all over the countryincluding small towns the situation will remain challenging.
With a strong distribution network that addresses robust fabric demand across Tier 2cities to Tier 6 towns the business has consistently launched new products keeping inwith the customers needs and preferences. in FY 2017-18 it witnessed strong growthdriven primarily by recovery in wholesale channel post GST stabilisation and growth ininstitutional category.
While your Company is attuned to judicious capital allocation strategies andsustainable growth your Company continues to work towards achieving cost efficiencies andprovide its customers the best fabric products.
d) Risks and Concerns:
GST has led to reduction in import duties across the segments leading to a seriousthreat of imports from China indonesia Thailand and Bangladesh. Downward revision induty drawback rates has added to the woes of the indian Textile sector. The poor globalretail sales and slow down of business in the domestic market are matters of concern forthe industry.
The indian cotton textile industry is expected to showcase a stable growth inFY2017-18 supported by stable input prices healthy capacity utilisation and steadydomestic demand.
However there are several challenges ahead for the Textile industry for enhancing itscompetitive strength and global positioning in terms of inflexible labour laws poorinfrastructure competition from low cost neighbouring countries momentum of the industry.
We have taken various steps to offset the challenges in the competitive businessscenario by focusing on direct sales to brands / retailers introduction of new marketspenetration in Out to Out business module by offering niche products with sustainablefinishes product and utility costs. The focus is on cost optimization introduction ofnew markets and offering of new product development with special fiber other than cottonwith sustainable finishes.
f)?Discussion on Financial performance with respect to operational performance.
During the financial year 2017 - 2018 the company earned Total Revenue of Rs. 516.89crores as compared to Rs The Company has achieved net Profit of Rs. 13.24 Crores asagainst a net profit of Rs. 9.15 Crores in the previous year. The growth in net profit isalmost 50% as against the last year. The overall performance was good.
g) Human Resource Management
The Company has employee friendly HR policies and attracts the best talent in theindustry. The attrition rates are quite low. The Companys policy of providing on thejob training has been instrumental in developing a good work force for the Company.
Corporate Governance Report:
As per Regulation 34(3) read with Schedule V of the SeBi (Listing obligation andDisclosure Requirements) Regulations 2015 a separate section on Corporate Governancepractice followed by the Company together with certificate from the CompanysAuditors confirming compliance forms an integral part of this Report.
Directors Responsibility Statement: in terms of section 134 (3) (c) of theCompanies Act 2013 Directors state that:
1. in preparation of annual accounts for the year ended 31st March 2018 theapplicable accounting standards have been followed along with proper explanations relatingto material departures if any;
2. The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2018 and profit for theyear ended on that date;
3. The directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
4. The directors have prepared the annual accounts on a going concern basis;
5. The directors have laid down proper internal financial controls to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively and
6. The directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems were adequate and operating effectively.
Extract of Annual Return: extract of Annual return in form MGT-9 as required undersection 92 of the Companies Act 2013 is annexed as Annexure A of this report
During the financial year under report the Company has not accepted deposits within themeaning of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.
Particulars of Loans Guarantees and 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.
Mr. Ajay V. Agarwal retires by rotation at the ensuing Annual General Meeting in termsof Section 152 of the Companies Act 2013 and eligible for reappointment.
All independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(b) of the SeBi (Listing obligations and Disclosure Requirements) Regulations 2015.
Key Managerial Personnel:
The following are the Key Managerial Personnel of the Company:
1. Mr. Ashok Agarwal : Chief Financial Officer
2. Mr. Shreedhar H.: Company Secretary
Number of Meetings of the Board:
The Board of Directors has the following committees:
1. Audit Committee
2. nomination and Remuneration Committee
3. Stakeholders Relationship Committee
4. Corporate Social Responsibility Committee
5. Risk Management Committee
The details of the Committees along with their compositions number of meetings heldand attendance at the meetings are provided in the Corporate Governance Report.
Pursuant to the provisions of the Act and the Listing Regulations performanceevaluation of the Board its committees the Chairman & Managing Director and theindependent Directors were carried out. The manner in which the evaluation is carried outhas been explained in the Corporate Governance Report.
The Company has adopted a Risk Management Policy for the Company includingidentification therein the elements of risk if any which in the opinion of the Board maythreaten the existence of the Company. After identifying the risk and assessing the levelof impact controls are put in place to mitigate the risk by the concerned executives whoare responsible to control the exposure of the risk and balance the impact of risk on acontinuous basis.
Independent Directors Meeting:
During the year under review a meeting of independent Directors was held on 6thMarch 2018.
Related Party Transactions:
The Audit Committee has given prior approval for all Related Party Transactions. ThePolicy on Related Party Transactions as approved by the Board is uploaded onCompanys Website. The Board of Directors of the Company has approved the criteriafor omnibus approval of Related Party Transactions by the Audit Committee within theoverall framework of the policy.
The particulars of contracts or arrangements with Related Parties referred to inSection 188(1) of the Act provided in the prescribed Form AoC-2 annexed as Annexure Bto this Report.
M/s. Kanu Doshi Associates LLP is appointed as Statutory Auditors to hold office fromthe conclusion of 31st Annual General Meeting to the conclusion of 34th AnnualGeneral Meeting (Subject to ratification of the appointment by the members at every AnnualGeneral Meeting). The Auditors have given their eligibility certificate in terms ofSection 139 of the Companies Act 2013.
Whistle Blower Policy:
Company has a Whistle Blower Policy to report genuine concerns or grievances. The sameis explained in the Corporate Governance Report and no person has been denied access toAudit Committee.
Corporate Social Responsibility:
As a part of its initiative under the Corporate Social Responsibility (CSR)drive the Company has undertaken project in the area of rural development Promotinghealth care education etc. These projects are in accordance with Schedule Vii of theCompanies Act 2013 and the Companys CSR Policy. The report on CSR activities asrequired under Companies (Corporate Social Responsibility Policy) Rules 2014 is set outas Annexure C forming part of this report.
As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 asamended from time to time your Company has been carrying audit of cost records relatingto Textile Divisions every year. The Board of Directors on the recommendation of theAudit Committee has appointed Y. R. Doshi & Co. (Firm Registration no. 000003) CostAccountants Mumbai as Cost Auditors for undertaking Cost Audit of the Cost Recordsmaintained by the Company for the Financial Year 2018-2019. As required under theCompanies Act 2013 a resolution seeking members approval for the remuneration payable toCost Auditor forms part of the Notice convening Annual General Meeting for theirratification.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Rules madethere under the Company has appointed Mr. Yogesh Sharma a Company Secretary in Practiceto undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexedas Annexure D of this Report.
Particulars of Employees and related disclosure:
There are no employees drawing a monthly or yearly remuneration in excess of the limitsspecified by the Companies Act 2013. The Disclosure Required under Section 197(12) of theCompanies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as Annexure - E and forms an integralpart of this Report.
Energy Technology Absorption and Foreign Exchange: information required underSection 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules 2014with respect to conservation of energy technology absorption and foreign exchangeearnings/outgo is included in Annexure F
Your Directors acknowledge the support and counsel extended by the bankers governmentagencies shareholders investors employees and others associated with the Company. TheDirectors look forward the same in future also.
| ||For and on behalf of Board of Directors |
|Mumbai ||Mr. Vishwanath L. Agarwal |
|30th May 2018 ||Chairman |