Your Directors have pleasure in presenting the 7th Annual Report of your Companytogether with the Audited Financial Statement for the Financial Year ended 31st March2018.
1. FINANCIAL RESULTS:
(Amount in Rupees)
|Particulars ||Current Year ||Previous Year |
| ||2017-18 ||2016-17 |
|Income from Operations ||789424607 ||639447781 |
|Gross Receipts (including other Income) ||789799607 ||639519253 |
|Total Expenditure before Interest and || || |
| ||765905170 ||618100966 |
|Depreciation || || |
|Less: Interest and Financial Charges ||9127989 ||10627235 |
|Less: Depreciation and Amortization ||1945328 ||1497682 |
|Profit/(Loss) before taxation for the year ||12821120 ||9293370 |
|Less: Current tax Expenses ||4739859 ||3126767 |
|Less: Deferred Tax Liability/Asset ||(269895) ||128506 |
|Excess/(Shortfall) Prov. For Tax in P.Y. ||(95660) ||(459164) |
|Profit/(Loss) after taxation for the year ||8255496 ||5578933 |
2. PERFORMANCE OF THE COMPANY:
During the year under review the Company has earned sales income of Rs.789424607/-(Previous year Rs. 639447781/-) and other income Rs.375000/- (Previous year71472/-). After providing depreciation finance charges and tax the Company has earnedNet profit Rs.8255496/- (Previous year company earned Net profit Rs. 5578933/-).
In order to conserve the reserves for further expansion of business the directors donot recommend any dividend.
4. TRANSFER TO RESERVES:
The Company has not transferred any amount to reserves during the year under review.
5. BUSINESS REVIEW:
The company is making efforts to improve the business and your Directors are optimisticof better performance during the year.
6. CHANGE IN REGISTERED OFFICE ADDRESS:
The company has changed its registered office within the local limits to No.15Murthy's Plaza Karia gounder street Khaderpet Tirupur 641 602 w.e.f. 18th September2017 for administrative convenience.
7. SHARE CAPITAL:
The paid up share capital of the company stood at Rs. 26922700 . During the yearunder review the company has not altered the share capital.
As per the provision of the Companies Act 2013 Mrs. Ashmita Agarwal (DIN: 07332067)retires by rotation at the ensuing Annual General Meeting and being eligible seeksre-appointment. The Board recommends the appointment of Mrs. Ashmita Agarwal as Directorof the Company.
9. STATUTORY AUDITORS:
In terms of Proviso to Section 139 (1) of the Companies Act 2013 M/s. Balaji &Thulasiraman Chartered Accountants (Firm Registration Number: 007262S) Tirupur has beenappointed as Statutory Auditors of the Company for a term of five years from 2014-19 bymeans of ordinary resolution passed by the Members at their 3rd Annual General Meetingheld on 29th September 2014.
Your directors have provided loan/advance to the company to the tune of Rs.14513627.00/- within the meaning of the Rule 2(1)(viii) of the Companies Act 2013 ason date. Your directors have provided a declaration that the amount being funded is notout of funds borrowed or by accepting loans or deposits from others.
Your company has not accepted any deposits as defined under Companies (Acceptance ofDeposits) Rules 2014
11. EXTRACT OF THE ANNUAL RETURN:
An extract of the Annual Return as of 31st March 2018 pursuant to the sub-section (3)of Section 92 of the Companies Act 2013 in Form MGT 9 is furnished as Annexure Ato this report.
12. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:
During the year 5 (five) Board Meetings and 2 (Two) Audit Committee and 2 (Two)Nomination and Remuneration Committee meetings were held as per the details providedbelow:
|S.No Date of Board Meetings ||Date of Audit Committee Meetings ||Date of Nomination and Remuneration Committee Meetings |
|1 25.05.2017 ||25.05.2017 ||25.05.2017 |
|2 18.09.2017 ||28.10.2017 ||28.10.2017 |
|3 28.10.2017 ||- ||- |
|4 20.12.2017 ||- ||- |
|5 22.02.2018 ||- ||- |
13. STATEMENT ON DECLARATION BY INDEPENDENT DIRECTOR:
All independent Directors have given declarations that they meet the criteria ofIndependence as laid down under the provisions of the Companies Act and the SEBI (ListingObligations and Disclosure Requirements) Regulation 2015.
14. MANAGEMENT DISCUSSION AND ANALYSIS
In terms of provisions of Regulation 34 of the SEBI (Listing obligations andDisclosures Requirements) Regulation 2015 the Management's discussion and analysis isset out below:
a. Industrial Structure and developments:
The Indian Textile Industry is currently estimated at a volume of US$108 Billion(Domestic business is about 60% and exports 40%) and is expected to reach a figure ofUS$223 billion by end of 2021. This industry is the largest employer after Agriculture andemploys over 40 million people directly and over 60 million people indirectly.
The Textile Industry contributes about 5% to Gross Domestic Product and 14% to overallIndex of Industrial Production.
This industry has also been attracting a lot of FDI from world leaders in brandedgoods.
The future of the industry is looking extremely promising buoyed by strong domesticconsumption and as well as export demand. With consumerism and disposable income on therise the retail sector has experienced rapid growth.
With the introduction of GST and the company's pricing being on the lowest tax slabthe future looks promising. b. Opportunities and threats
The major opportunity for the Company is the changing trend of fashion in India fromvillage to the City. Usage of Knitwear is increasing and demand for the ready-madegarments have also put the pressure on the manufacturers to cut short the working cycleand this provides a major opportunity for the company to supply ready fabric of widevariety to smaller manufacturers.
The company's strong foothold in Domestic wholesale market gives an excellentopportunity to achieve economies of scale also for increasing the exports.
The major threat is always change in Government policy. Any adverse change will affectthe industry.
Another major threat to the Industry is the shortage of labor. Shortage of skilledlabor and the increase in demand resulting in increased wages & overhead costs.
c. Segment-wise or product-wise performance.
60% of the Companies revenue is targeted at Ladies wears like Pyjama sets Ladies andGirls Tops Leggings etc. 20% of the revenue are contributed by Kids portfolio and 20% ofrevenue from Men's/ Boys wears like T Shirts Bermudas Pyjamas Jogging pants etc.
The outlook for the industry is extremely positive. The reason being that Majority ofthe population is below the age of 35 and choice of fashionable attires among men andwomen like wear T shirts in one form or the other has been increasing. The increase indisposable income among middle income families in India for garments is increasing andcurrently it's averaged around 9% to 10%.
The overall size of readymade garment industry is almost INR 300 Thousand Crore. Thisis one of the fastest growing industries in India and contributes almost 4-5% of our GDP.This is expected to grow to about INR 500 Thousand Crore by 2021.
e. Risks and Concerns.
The major risk is change in Government policy. Any adverse change will affect theindustry. Another concern is Shortage of skilled labor and the increase in increased wages& overhead costs. f. Internal control system and their adequacy
A separate report on internal control systems and their adequacy is attached with thisreport from the statutory auditors of the Company.
g. Discussion on financial performance with respect to operational performance.
The Company has earned revenue of Rs.789424607/- as compared to Rs. 639447781/-in the Previous year an impressive growth of more than 23.45%. Your Company has made a
Net profit after providing depreciation finance charges and deferred tax the Companyof Rs. (269895)/- as compared to Rs. 128506/- in the previous year.
h. Material developments in Human Resources/industrial Relations front includingnumber of people employed.
No major challenges existed in Human resources during the current year under review
15. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY:
During the year under review the Company has not made any Loans Guarantees orInvestments within the meaning of the provisions of Section 186 of the Companies Act2013.
16. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
A) Conservation of energy:
|(i) The steps taken or impact on conservation of energy: ||Nil |
|(ii) The steps taken by the company for utilising alternate sources of energy: ||Nil |
|(iii) The capital investment on energy conservation equipment: ||Nil |
|B) Technology absorption: || |
|(i) The efforts made towards technology absorption: ||Nil |
|(ii) The benefits derived like product improvement cost reduction product development or import substitution: ||Nil |
|(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): || |
| ||Nil |
|(iv) The expenditure incurred on Research and Development: ||Nil |
C) Foreign exchange earnings and Outgo:
|Foreign exchange earnings ||: NIL |
|Foreign exchange outgo ||: Rs.658316/- |
17. PERFORMANCE EVALUATION:
SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 mandated thatthe Board shall monitor and review the Board evaluation framework.
The Companies Act 2013 states that a formal annual evaluation needs to be made by theBoard on its own performance and that of its committees and individual Directors. ScheduleIV of the Companies Act 2013 states that the performance evaluation shall be done by theentire Board of Directors excluding the Director being evaluated.
The evaluation of all the Directors and the Board as whole was conducted based on thecriteria and framework adopted by the Board.
18. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES:
The company has formulated vigil mechanism for employees including directors of thecompany to report genuine concerns.
19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
The particulars of contract or arrangements entered into by the Company with relatedparties referred to in sub-Section (1) of Section 188 of the Companies Act 2013 in FormNo. AOC -2 is furnished as Annexure B to this report.
20. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
The Company's policy on Director's appointment and remuneration and other mattersprovided in section 178 of the Companies Act 2013 has been in accordance with Nominationand remuneration policy of the company which is placed in the website of the Company under"Investor relations".
21. COST AUDITOR:
Not applicable to the Company as per the provisions of the Companies Act 2013. Howeverthe company has maintained cost records as required under the Companies (Cost Records andAudit) Rules 2014
22. RISK MANAGEMENT POLICY:
The Management has devised Risk Management Policy considering the nature of industryand associated risks pertaining to the industry. The Management is overseeing theimplementation of the Policy on regular basis.
23. INTERNAL FINANCIAL CONTROL:
The company has adequate financial control with reference to financial statements. Ourauditors has provided separate statement on adequacy of financial controls in their auditreport.
24. SECRETARIAL AUDIT REPORT:
As per the provisions of the Companies Act 2013 the Secretarial Audit for the year2017-18 has been carried out by Mr. G. Vasudevan Practicing Company Secretary andaccordingly his report is appended to Directors' Report.
25. CORPORATE SOCIAL RESPONSIBILITY:
Not applicable to the Company as per the provisions of the Companies Act 2013.
26. PREVENTION OF SEXUAL HARASSMENT AT THE WORK PLACE:
As per the requirements specified in the "The Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013" the Company hasconstituted an Internal
Complaints Committee and is committed to provide a work environment that is free fromsexual harassment.
27. MATERIAL CHANGES:
No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year as on 31.03.2018 and the date of thisReport.
28. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL:
There were no significant and material orders passed by the regulators or courts ortribunal which would impact the going concern status and the Company's operations infuture.
29. CLARIFICATION ON STATUTORY AUDITOR'S REMARK IN THEIR REPORT:
There were no remarks in the Auditor's report and hence no clarification is required
30. CLARIFICATION ON SECRETARIAL AUDITOR'S REMARK IN THEIR REPORT:
There is an observation from Secretarial auditor in his report with regard to amountwithdrawn from VVRS Chit Funds Private Limited. The company will pursue to comply with thesame.
31. COMPLIANCE WITH SECRETARIAL STANDARDS:
The company has complied with Secretarial standards 1 and 2 as stipulated by Instituteof Company Secretaries of India.
32. DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
1. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
2. the directors had 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 at the end of the financial year and ofprofit of the company for that period;
3. the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
4. the directors had prepared the annual accounts on a going concern basis; and
5. the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
33. PARTICULARS OF EMPLOYEES:
There were no employees drawing remuneration in excess of limit specified under Rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The ratio of remuneration of each director to the median of employees remuneration asper Section 197(12) of Companies Act 2013 read with Rule 5(1) of Companies Appointmentand Remuneration of Managerial Personnel ) Rules 2014 forms part of the Board report (AnnexureC)
Your Directors wish to place on record their deep gratitude and appreciation towardsthe Company's suppliers customers investors bankers Government of India StateGovernment and other regulatory authorities for their continued support during the year.Your Directors also acknowledge the commitment and the dedication of the employees at alllevels who have contributed to the growth of the Company.
For and on behalf of the Board
| ||-Sd- ||-Sd- |
|Place: Tirupur || || |
|Date: 26.05.2018 ||Prem Dinanath Aggarwal ||Shikha Aggarwal Prem |
| ||(DIN: 02050297) ||(DIN: 03373965) |
| ||Managing Director ||Whole time Director |