Donear Industries Ltd.
|BSE: 512519||Sector: Industrials|
|NSE: DONEAR||ISIN Code: INE668D01028|
|BSE 00:00 | 29 May||24.00||
|NSE 00:00 | 29 May||24.25||
|Mkt Cap.(Rs cr)||125|
|Mkt Cap.(Rs cr)||124.80|
Donear Industries Ltd. (DONEAR) - Director Report
Company director report
Your Directors are pleased to present the Thirty Third (33rd) Annual Reportand the audited financial statements for the financial year ended 31st March2019.
The table given below gives the financial highlights of the Company on standalone basisfor the year ended 31st March 2019 as compared to the previous financial year.
(Amt in Lakhs)
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:
Global Textile Industry Overview:
The global textile market size was valued at USD 925.3 billion in 2018 and is expectedto register a CAGR of 4.24% over the forecast years. This growth is attributed to the highdemand for apparels particularly in the developing economies including India ChinaBangladesh and Mexico as a result of growing population. Moreover rising disposableincome levels and rapid urbanization in these countries have led to the increased numberof retail outlets and supermarkets; thereby supporting overall market growth.
Indian Textile Industry Overview:
India is the world's second-largest exporter of textiles and apparels with a massiveraw material and manufacturing base. The textile industry is a significant contributor tothe economy both in terms of its domestic share and exports. It contributes about sevenper cent to industry output two per cent to the GDP and 15 per cent to the country'stotal exports earnings. The sector is one of the largest sources of job creation in thecountry employing about 45 mn people directly.
The Indian textile and apparel market was worth $ 90 bn in 2017. The market is furtherprojected to reach $198 bn by 2023 at a CAGR of around 14 per cent during 2018-2023.India is the second largest textile exporter in the world. India's share in global tradeof textiles and apparels is approximately 6 per cent. Today the textile and apparelmarket has become a vital contributor to the Indian economy. The apparel export has seen apositive trend from November 2018 onwards.
To promote exports of readymade garments and made-ups Government of India increasedMerchandise Export from India Scheme (MEIS) rates from 4 to 6 per cent under the Mid- TermReview of Foreign Policy 2015-20. The Government also launched a special package to boostinvestment employment and exports in the garments and made-up sector. The specialpackage was designed to create upto one cr jobs and boost exports by $31 bn and attractinvestment of Rs. 80000 cr in 3 years. So far it has generated additional exports of Rs.5728 cr and additional investments of Rs. 25345 cr.
The government has been implementing various policy initiatives and programmes fordevelopment of textiles and handicrafts particularly for technology infrastructurecreation skill development including:
PowerTex India Scheme
Scheme for Integrated Textile Parks
SAMARTH- scheme for capacity building in Textile Sector
Silk Samagra- integrated silk development scheme
North Eastern Region Textile Promotion Scheme (NERTPS)
National Handicraft Development Programme (NHDP)
Comprehensive Handicrafts Cluster Development Scheme (CHCDS).
Technology Up-gradation Fund Scheme (TUFS) for training workforce and toencourage private investment in the Indian textile and apparel industry.
Amended Technology Up-gradation Funds Scheme (ATUFS) for in providing bestmanufacturing and infrastructure to local artisans technology and innovation enhancingskills and strengths of the local industry.
Opportunities and Threats:
Robust Demand- Rise in income levels is expected to drive demand in textile industry.Branded segment is growing and become a preference for customers.
Competitive advantage-India has an abundant availability of raw materials such ascotton wool silk and jute. It also enjoys a comparative advantage in terms of skilledmanpower and in cost of production.
Policy support - 100 percent FDI (automatic route) is allowed in the Indian textilesector. To boost exports free trade with ASEAN is allowed. Increasing Investments - Hugeinvestments are being made by the Government under various schemes to encourage moreprivate equity and to train workforce.
Cheaper Import of goods effects adversely to the domestic market.
Growing labours cost results in increase in the cost of production.
The future for the Indian textile industry looks promising buoyed by both strongdomestic consumption as well as export demand. Due to increase in domestic consumption andentry of several international players into the Indian markets the retail sector hasexperienced a rapid growth. All this coupled with the Government initiatives throughvarious scheme is a fuel to future growth of overall Industry.
Our Company with its well-known Brands modern manufacturing facilitiesinfrastructure judicious capital allocation strategies and well penetrated marketing anddistribution network it will continues to work toward achieving cost efficiencies anddeliver the best product to its consumers.
Discussion on Financial performance with respect to operational performance:
During the financial year 2018-2019 the company has earned the Total Revenue of Rs.59694.26 Lakhs as compared to Rs. 51689.39 Lakhs in 2017-2018. The Company has achievednet Profit of Rs. 1418.41 Lakhs as against a net profit of Rs. 1320.51 Lakhs in theprevious year. The growth in net profit is 7.41% as against the last year. The overallperformance was good.
Human Resource Management:
We as HR showed a strategic and coherent approach in managing the talent and put anendeavour in employing people and developing their capacities utilizing and maintainingtheir services. Our Company continuously carries out the necessary improvements to attractand retain the best talent which results in low attrition rates. The Company's policy ofproviding on the job training has been instrumental in developing a good work force forthe Company.
Corporate Governance Report:
As per Regulation 34(3) read with Schedule V(C) of the SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 a separate section on Corporate Governancepractice followed by the Company together with a certificate from the CompanysAuditors confirming compliance forms an integral part of this Report.
Directors Responsibility Statement:
As stipulated under section 134 (3) (c) of the Companies Act 2013 Directors confirmthat:
1. I n preparation of annual accounts for the year ended 31st March 2019the applicable accounting standards have been followed along with proper explanationsrelating to 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 2019 andprofit for the year 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 under section 92 of the CompaniesAct 2013 is annexed as Annexure -A of this report. In compliance with section134(3)(a) of the Act Form MGT- 9 is uploaded on the Company's website
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.
Your Directors pay their respectful homage to late Shri. Vishwanath L. AgarwalChairman and Founder Promoter who left for his heavenly abode on 28thNovember 2018. Your Directors pay rich tribute for the inspired leadership provided bylate Shri. Vishwanath L. Agarwal under whose advice guidance and support your Company hasregistered continuous growth and profitability since incorporation of the Company. LateShri. Vishwanath L. Agarwal belonged to the genre of leadership that has left indeliblefootprints for others to follow. His knowledge wisdom dedication courage commitmentand confidence are the jewels in the crown glory of Donear. He was a great and humbleleader a respected philanthropist as well as a visionary and entrepreneur par excellence.Your Directors pray to the Almighty to grant eternal peace to his departed soul.
Directors and Key Managerial Personnel
During the year Mr. Rajagopal Sivaraj and Mr. Durgaprasad Agarwal Non-ExecutiveIndependent Directors stepped down from Board of the Company w.e.f. 14thNovember 2018 and 14th February 2019 respectively.
The Board places on record its appreciation towards valuable contribution made by themduring their tenure as Directors of the Company.
Mr. Anupkumar Singh Executive Director retires by rotation at the ensuing AnnualGeneral Meeting in terms of Section 152 of the Companies Act 2013 and eligible forreappointment. A resolution seeking shareholders' approval for his re-appointment formspart of the Notice.
Mr. Santkumar Agarwal Non-Executive Independent Directors who was appointed as anIndependent Director of the Company for a term of five years by the members at the 28thAnnual General Meeting held on 24th September 2014 in terms of Section 149 ofthe Companies Act 2013 is re-appointed by the Board in its meeting held on 10thAugust 2019 as a Non-Executive Independent Directors of the Company for a two consecutiveyears commencing from 10th August 2019 to 9th August 2021 notliable to retire by rotation.
Brief resume of Directors being appointed/ re-appointed as required by the SEBI (LODR)Regulations 2015 and Secretarial Standards on General Meetings are provided in theAnnexure to the notice convening the Annual General Meeting of the Company.
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.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company as on 31st March 2019 are: Mr. Rajendra Agarwal-Managing DirectorMr. Ajay V. Agarwal-Whole Time Director Mr. Ashok Agarwal- Chief Financial Officer andMr. Shreedhar H. Company Secretary of the Company up to 1st May 2019 (Ms.Poonam Barsaiyan-Company Secretary w.e.f 30th May 2019)
Number of Meetings of the Board:
The Board of Directors met 5(five) times during the year on 30th May 201814th August 2018 14th November 2018 5th December 2018and 14th February 2019 the details of which are provided in the CorporateGovernance Report.
Committees 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 Managing Director and the Independent Directorswere carried out. The manner in which the evaluation is carried out has been explained inthe Corporate Governance Report. Internal Control Systems and their adequacy:
Internal Audit plays a key role in providing an assurance to the Board of Directorswith respect to the Company having adequate Internal Financial Control Systems. TheInternal Financial Control systems provide among other things reasonable assurance ofrecording the transactions of its operations in all material respects and of providingprotection against significant misuse or loss of Companys assets.
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.
Related Party Transactions:
The Audit Committee has given prior approval for all Related Party Transactions. Allrelated party transactions that were entered into during the financial year were in theordinary course of business and were on an arms length basis. The particulars ofcontracts or arrangements with Related Parties referred to in Section 188(1) of the Actprovided in the prescribed Form AOC-2 annexed as Annexure -B to this Report.
The policy on Related Party Transactions as approved by the Audit Committee and Boardis uploaded on the Company's website i.e. www.donear. com
At the 31st Annual General Meeting held on 23rd September 2017the members approved the appointment of M/s. Kanu Doshi Associates LLP CharteredAccountants Mumbai (Firm Registration No.104746W/W100096) as Statutory Auditors of theCompany to hold office from the conclusion of that Annual General Meeting till theconclusion of the 34th Annual General Meeting subject to ratification of theirappointment by Members at every AGM if so required under the Act. The requirement toplace the matter relating to appointment of auditors for ratification by Members at everyAGM has been done away pursuant to amendments in Section 139 of the Companies Act 2013.
The Auditors have given their eligibility certificate in terms of Section 139 of theCompanies Act 2013.
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 the Company has been carrying audit of cost records relating toTextile Divisions every year.
The Board of Directors on the recommendation of the Audit Committee has appointed M/s.Y. R. Doshi & Co. (Firm Registration No. 000003) Cost Accountants Mumbai as CostAuditors for undertaking Cost Audit for the financial year ending 31st March2020. As required under the Companies Act 2013 a resolution seeking members approval forthe remuneration payable to Cost Auditor forms part of the Notice convening Annual GeneralMeeting for their ratification.
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 - C of this Report.
Whistle Blower Policy:
The Company has framed Whistle Blower Policy to report genuine concerns or grievances.The same is explained in the Corporate Governance Report and the Policy is posted on theCompany's website at www.donear.com
Compliance with secretarial standards on Board and Annual General Meetings:
The Company has complied with Secretarial Standards (SS) 1 and 2 issued by theInstitute of Company Secretaries of India on Board meetings and Annual General Meetings.
Significant or Material Orders:
There were no significant and material orders passed by the regulators or courts ortribunals which would impact the going concern status and the Company's operations infuture.
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 Promoting health care educationetc. These projects are in accordance with Schedule VII of the Companies Act 2013 and theCompany's CSR Policy. The report on CSR activities as required under Companies (CorporateSocial Responsibility Policy) Rules 2014 is set out as Annexure - D forming partof 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 and Rules 5(2) and 5(3) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014. The details are annexed herewith asAnnexure-E. Energy Technology Absorption and Foreign Exchange:
Information required under Section 134(3)(m) of the Act read with Rule 8(3) of theCompanies (Accounts) Rules 2014 with respect to conservation of energy technologyabsorption and foreign exchange earnings/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.