The Directors have pleasure in submitting their 25th Report together withthe Audited Accounts of your Company for the year ended March 31 2019.
The Company's financial performance for the year ended March 31 2019 is summarisedbelow:
(र In Cr.)
|Particulars ||Year ended 31/03/2019 ||Year ended 31/03/2018 |
|Revenue from Operations ||1456.05 ||1588.92 |
|Earnings Before Interest Taxes Depreciation and Amortisation ||163.23 ||225.84 |
|Less: Finance Cost ||27.00 ||57.98 |
|Less: Depreciation and Amortisation Cost ||104.41 ||120.56 |
|Profit Before Tax ||31.82 ||61.20 |
|Less: Tax Expense ||9.74 ||14.47 |
|Profit After Tax ||22.08 ||46.73 |
|Other Comprehensive Income ||(0.30) ||(0.30) |
|Total Comprehensive Income ||21.77 ||46.43 |
Company's Performance Review
The business environment for the textile industry remained sluggish during thefinancial year 2018-19 contributed by lower consumption liquidity issue and lowerlending by the financial institutions. Despite being tough situation the Company hasachieved aggregate sales of RS.1456.05 cr. marginally lower than that of previousfinancial year and Profit Before Tax of H31.82 cr.
Cost of Goods sold as a percentage to revenue from operations increased to 70% asagainst 68% in the previous year.
Employee cost as a percentage to revenue from operations increased from 5.05% (र80.30cr.) to 5.67% (र82.63 cr.) in the previous year.
Other expense as a percentage to revenue from operations increased to 13.56% (र197.46cr.) against 12.48% (र198.29 cr.) in the previous year.
The Profit Before Tax (PBT) for the current year is H31.82 cr. against H60.82 cr. inthe previous year. The Profit After Tax (PAT) declined to RS.22.08 cr. against र46.73cr. in previous year.
The finance cost (interest) for the current year is RS.27.00 cr. as compared to H58.04cr. in the previous year which is significantly reduced during the year mainly due torecognition of interest subsidy.
The Board of Directors of your Company has recommended a dividend of 5% (Re. 0.50 perequity share of RS.10/- each) on 48049056 equity shares of RS.10/- each for the year2018-19. The final dividend is subject to the approval of the Shareholders at the ensuing25th Annual General Meeting scheduled to be held on September 13 2019. This dividendalong with dividend tax will result in cash outlay of RS.28.96 Million as compared toH46.30 Million in the previous year. The Board has not recommended any transfer to generalreserves from the profits during the year under review.
The dividend declared and/or paid by the Company for the financial year 2018-19 shallbe in compliance with the Dividend Distribution Policy. The Dividend Distribution Policyis available on the website of Company at www. nandandenim.com.
Transfer To Reserves
During the year under review the Company has not transferred any amount to GeneralReserves out of the amount available for appropriation.
Subsidiary Joint Venture And Associate Companies
Nandan Denim Limited did not have any Subsidiary Joint Venture or Associate Companyfor the year ended March 31 2019.
In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred to as SEBI Listing Regulations') and Section 136 of theCompanies Act 2013 read with Rule 10 of the Companies (Accounts) Rules 2014 the AnnualReport containing the financial statements for the financial year 2018-19 along withDirectors Report Management Discussion & Analysis and Corporate Governance Report isbeing sent to all Shareholders who have registered their email address(es) for the purposeof receiving documents/communication from the Company in electronic mode. Physical copy ofthe Annual Report is being sent to all those who have not registered their email ids.Please note that the Company will make available full Annual Report either a hard or softcopy depending upon request by any member of your Company.
* The long-term and short-term ratings remain unchanged at the earlier rating of [ICRA]A/[ICRA] A1 however the outlook on the long-term rating was revised to Negative fromStable in August 2018.
The long-term and short-term ratings were revised to [ICRA] A- (Negative)/[ICRA] A2+from ICRA]A(Negative)/ [ICRA]A1 in June 2019.
Conservation Of Energy Technology Absorption And Foreign Exchange Earnings & Outgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated under section 134 of the Act read with the Companies(Accounts) Rules 2014 is set out in Annexure A to this report.
Directors And Key Managerial Personnel
Directors retiring by rotation
Mr. Vedprakash Chiripal (DIN: 00290454) Non-Executive Director of the Company aged 67years retires by rotation as a Director at the conclusion of this Annual General Meetingpursuant to the provisions of section 152 of the Companies Act 2013 read with theCompanies (Appointment and Qualification of Directors) Rules 2014 and the Articles ofAssociation of your Company and being eligible has offered himself for re-appointment.Appropriate resolution for his re-appointment is being placed for your approval at theensuing AGM.
In accordance with the provisions of the Act read with the Rules issued thereunder theSEBI Listing Regulations and the Articles of Association of the Company AdditionalDirectors and Independent Directors are not liable to retire by rotation.
Re-appointment of Independent Director
Mr. Tara Sankar Bhattacharya (DIN: 00157305) Independent Director not liable toretire by rotation (whose tenure will expire on September 14 2019) is being re-appointedfor a second term pursuant to applicable provisions of the Act read with the Rules issuedthereunder and SEBI Listing Regulations. It is proposed to re-appoint Mr. Tara SankarBhattacharya upto September 14 2022.
The aforementioned appointment is based on outcome of performance evaluation exerciseexperience and contributions made by Mr. Tara Sankar Bhattacharya in his previous tenure.The respective tenure is decided considering the year in which he attains the age of 75years.
Change in Directorate
i. Appointment and resignation of Mr. Brijmohan Chiripal (DIN: 00290426) on the Boardof Directors of the Company
The Board of Directors at their meeting held on November 3 2018 based onrecommendations of the Nomination & Remuneration Committee approved the appointmentof Mr. Brijmohan Chiripal as a Non Executive Promoter Director. He is a Chemical Engineerwith almost 20 years of business experience in Textile Processing as well as export anddomestic trading. His ability to empower people motivate them and align their tasks withthe company's goals has helped in the formation of a formidable team.
Due to his prior commitments and other professional assignments he later on resignedon February 8 2019.
ii. Resignation of Mr. Ambalal Patel (DIN: 00037870)
Mr. Ambalal Patel was appointed as Non Executive Independent Director on February 212007. His valuable contribution has been of immense benefit to the Company. His inputshave been detrimental to the success of the Company during his tenure. In order to complywith applicable regulations he tendered his resignation from close of business hours ofMarch 31 2019.
iii. Appointment and resignation of Mr. Jaiprakash Chiripal (DIN: 00155430) on theBoard of Directors of the Company
The Board of Directors at their meeting held on February 8 2019 based onrecommendations of the Nomination & Remuneration Committee approved the appointment ofMr. Jaiprakash Chiripal as a Non Executive Promoter Director. Mr. Jaiprakash D. Chiripalhas over 30 years of experience in textile and packaging industry. He is instrumental insetting up of BOPP Project of Chiripal Group. He is actively involved in ProductionMarketing Human Resource Development of various Companies of the Group. He plays a keyrole in expansion and implementation of projects. He has over three decades of experiencein driving the diversified growth of Group's business. His strength is technology peoplemanagement and execution. As the Managing Director of Chiripal Poly Films he haspositioned the Company as third largest player in the flexible packaging marketcontributing to significant turnover and bottom line of Group's business in a short spanof time. He is a core strategist and his guidance and knowledge will play a significantrole in overall growth of Nandan Denim Limited.
Later on he resigned from the position of Director from close of business hours onJune 29 2019 in order to maintain optimal composition of the Board and compliance withapplicable regulations.
Declaration of Independence
Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions ofCompanies Act 2013 read with the Schedules and Rules issued thereunder as well asRegulation 16 of the SEBI Listing Regulations [including any statutory modification(s) orre-enactment(s) for the time being in force] so as to qualify themselves to be appointedas Independent Directors
Nomination and Remuneration Policy
The Company has formulated and adopted the Nomination and Remuneration Policy inaccordance with the provisions of Companies Act 2013 read with Rules issued thereunderand the SEBI Listing Regulations.
The salient features of the Policy are set out in the Corporate Governance Report whichforms part of this Annual Report. The Policy is also available on the website of theCompany at www.nandandenim.com/policies/.
The Company's Board has formulated the criteria for performance evaluation of theDirectors as a whole which broadly covers the Board role Board/Committee membershippractice procedure and collaboration.
Pursuant to the provisions of the Companies Act 2013 and Regulation 25 of the SEBIListing Regulations Independent Directors at their meeting without the participation ofthe Non-independent Directors and Management considered/ evaluated the Boards'performance performance of the Chairman and other Non-Independent Directors
In line with the SEBI Guidance note on Board Evaluation a Board effectivenessassessment questionnaire was designed for the performance evaluation of the Board itsCommittees Chairman and individual Directors and in accordance with the criteria set andcovering various aspects of performance including structure of the Board meetings of theBoard functions of the Board role and responsibilities of the Board governance andcompliance evaluation of risks grievance redressal for investors conflict of intereststakeholder value and responsibility relationship among Directors Director competencyBoard procedures processes functioning and effectiveness. The said questionnaire wascirculated to all the Directors for the annual performance evaluation.
The Board subsequently evaluated its own performance the working of its Committees(Audit Nomination & Remuneration CSR Committee and Stakeholders RelationshipCommittee) and Independent Directors (without participation of the relevant Directors).There were a few suggestions for improving the performance of the Board viz. apprising theBoard of the latest developments from time to time from governance prospective.
Key Managerial Personnel
As per the provisions of sections 2(51) and 203 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 pertaining toKey Managerial Personnel the following officials were the Key Managerial Personnel'for the year 2018-19:
* Mr. Jyotiprasad Chiripal - Managing Director
Mr. Deepak Chiripal - Chief Executive Officer
Mr. Prakashkumar Sharma - Whole Time Director
* Mr. Ashok Bothra - Chief Financial Officer
Jfr Ms. Purvee Roy - Company Secretary
Disclosure relating to remuneration of Directors Key Managerial Personnel andParticulars of Employees
The remuneration paid to the Directors is in accordance with the Nomination &Remuneration Policy formulated in accordance with Section 178 of the Companies Act 2013and Regulation 19 of SEBI Listing Regulations [including any statutory modification(s) orre-enactment(s) thereof for the time being in force). The salient features of theNomination & Remuneration Committee has been outlined in Corporate Governance Sectionwhich forms part of this Report.
Remuneration of Directors Key Managerial Personnel and particulars of employees
The remuneration paid to the Directors is in accordance with the Nomination &Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19of the SEBI Listing Regulations [including any statutory modification(s) orre-enactment(s) thereof for the time being in force.
The information required under section 197 of the Act read with Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 [including any statutorymodification(s) or re-enactment(s) thereof for the time being in force] in respect ofDirectors/employees of the Company is set out in Annexure F to this report.
The Nomination & Remuneration Policy of the Company empowers the Nomination andRemuneration Committee to formulate a process for evaluating the performance of IndividualDirectors Committees of the Board and the Board as a whole.
The parameters for the performance evaluation of the Board inter alia includeperformance of the Board on deciding long term strategy rating the composition and mix ofBoard members discharging of governance and fiduciary duties handling critical anddissenting suggestions etc.
The parameters for the performance evaluation of the Directors include attendanceeffective participation in meetings of the Board domain knowledge vision strategy etc.
The Chairperson(s) of the respective Committees based on feedback received from theCommittee members on the outcome of performance evaluation exercise of the Committeeshares a report to the Board.
The details of the evaluation process are set out in the Corporate Governance Reportwhich forms a part of this Annual Report.
Environment And Pollution Control
Nandan Denim Limited strives to maintain good standards of environmental care andensures that increasing level of operations do not adversely impact standards of healthand environment. To combat pollution and strengthen the area ecology considerableemphasis is placed on trees. A green belt has been developed around the plant sitewherever space is available around the periphery of the plant. Other open spaces withinthe factory have been converted into green areas in the form of lawns or flowering plants.All manufacturing facilities possess the required environmental clearance from therespective Pollution Control Boards and do comply with the relevant statutory provisions.
The Company is well aware of its responsibility towards a better and cleanerenvironment. Our efforts in environment management go well beyond mere compliance withstatutory requirements.
Human Resources/Industrial Relations
Framing the human resource/employee relationship helps maintain perspective on theCompany's ultimate goal: to help employees do their best at their jobs. It is a functionwithin an organisation concentrated on recruiting managing and directing people who workin it. Human Resource Management deals with issues related to compensation performancemanagement organisation development safety wellness benefits employee motivationtraining and otheर
Your Company attaches significant importance to continuous up gradation of HumanResources for achieving the highest levels of efficiency customer satisfaction andgrowth. As part of the overall HR Strategy training programmes have been organized foremployees at various levels through both internal and external faculties during the yearunder review thereby strengthening employee engagement and learning. This has helped toensure that learning is not time bound and location bound at the same time employees haveaccess to the information.
A team of approximate 4500 passionate & motivated individuals drive Nandan DenimLimited. Your Company has taken various initiatives to engage the employees using digitaland technology platforms.
The industrial relations during the year under review continued to be cordial. TheDirectors place on record their sincere appreciation for the services rendered byemployees at all levels.
Particulars of Employees
The information required pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5(2) and 5(3) of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company will be provided uponrequest. In terms of Section 136(1) of the Companies Act 2013 the Report and Accountsare being sent to the Members and others entitled thereto excluding the information onemployees' particulars which is available for inspection by the Members at the RegisteredOffice of the Company during business hours on working days of the Company up to the dateof the ensuing Annual General Meeting. If any Member is interested in obtaining a copythereof such Member may write to the Company Secretary in this regard.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the (Appointment andRemuneration of Managerial Personnel) Rules 2014 are given in Annexure-F to this report.
* Details of the familiarization programme of the Independent Directors are availableon the website of the Company;
The Code of practices and procedures for fair disclosure of unpublished price sensitiveinformation and code of conduct for prevention of insider trading have also been uploadedon the Company's website;
* The Company does not have any scheme or provision of money for the purchase of itsown shares by employees/Directors or by trustees for the benefit of employees/Directors;
The Company has not issued equity shares with differential rights as to dividendvoting or otherwise.
The Board meets at regular intervals to discuss and decide on the Company's policiesand strategies apart from other Board matteर The tentative dates of Board and CommitteeMeetings is decided and informed well in advance to facilitate the Directors to arrangetheir schedule and to ensure participation in the meetings.
During the financial year 2018-19 four board meetings were held on May 26 2018;August 13 2018; November 3 2018 and February 8 2019 respectively. The gap between twoBoard Meetings did not exceed 120 days and a meeting was held in every quarter.
The details of the meetings of the Board of Directors and its Committees convenedduring the financial year 2018-19 are given in the Corporate Governance Report which formspart of this Report. Further the Board of Directors also confirm compliance and adherenceof the Secretarial Standard - 1 as issued by the Institute of Company Secretaries of Indiaand notified by the Ministry of Corporate Affairs with regards to Board Meeting.
Your Company has five Committees of the Board namely:
- Audit Committee
Stakeholders' Relationship Committee Nomination & Remuneration Committee
Corporate Social Responsibility Committee Management Committee
Details of all the Committees along with their composition terms of reference andmeetings held during the year are provided in detail in the Corporate Governance Reportwhich forms part of the Annual Report.
Directors Responsibility Statement
Pursuant to Section 134 of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) thereof for the time being in force) the Directors ofthe Company confirm that:
a. in the preparation of the annual accounts for the financial year ended March 312019 the applicable Accounting Standards and Schedule III of the Companies Act 2013have been followed and there are no material departures from the same;
b. the Directors have selected such accounting policies and applied them consistentlyand made judgements 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 March 31 2019 and of the Profit& Loss of the Company for the financial year ended March 31 2019;
c. proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. the annual accounts have been prepared on a going concern' basis;
e. proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adequate and operating effectively;and
f. proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems are adequate and operating effectively.
Management Discussion and Analysis
Management Discussion and Analysis as stipulated under the SEBI Listing Regulations ispresented in a separate section forming part of this Annual Report. It speaks about theoverall industry structure global and domestic economic scenarios developments inbusiness operations/performance of the Company's business and other material developmentsduring the financial year 2018-19.
Particulars of Loans Guarantees or Investments
Details of loans guarantees given and investments under the provisions of Section 186of the Companies Act 2013 read with the Companies (Meetings of the Board and its Powers)Rules 2014 as on March 31 2019 are set out in Note 37(B) to the Financial Statementsof the Company.
Corporate Governance is the application of best management practices compliance of lawin true letter and spirit and adherence to ethical standards for Effective Management anddistribution of wealth and discharge of social responsibility for sustainable developmentof all stakeholdeर Corporate governance is the system by which business corporations aredirected and controlled. The corporate governance structure specifies the distribution ofrights and responsibilities among various levels in the organisation such as the boardmanagers Shareholders and spells out the rules and procedures for making decisions oncorporate affaiर By doing this it also provides the structure through which the Companyobjectives are set and the means of attaining those objectives and monitoringperformance. The concept of corporate governance hinges on total transparency integrityand accountability of the management and the Board of Directors
The Company is committed to maintaining good standards of Corporate Governance andadhering to the Corporate Governance requirements as set out by Securities and ExchangeBoard of India (SEBI). Pursuant to Regulation 34 of the SEBI Listing Regulations aseparate section titled Report on Corporate Governance' has been included in thisReport which also contains certain disclosures required under the Companies Act 2013. TheCertificate from the Auditors of the Company confirming compliance with the conditions ofCorporate Governance as stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is also published in this Annual Report.
The paid up Equity Share Capital of the Company as on March 31 2019 was H48.05 croresdivided into 48049056 Equity Shares of RS.10 each fully paid. During the year underreview the Company has not issued shares with differential voting rights nor has grantedany stock options or sweat equity. As on March 31 2019 none of the Directors of theCompany hold instruments convertible into equity shares of the Company.
The Company's equity shares are listed on BSE Limited (BSE) and National Stock Exchangeof India Limited (NSE). The shares are actively traded on BSE and NSE and have never beensuspended from trading.
The Company has in place an Audit Committee in terms of requirements of the Act readwith rules framed thereunder and SEBI Listing Regulations. The details relating to theAudit Committee are given in the Corporate Governance Report forming part of this Report.The recommendations of Audit Committee were duly accepted by the Board of Directors
In terms of Section 139 and other applicable provisions if any of the Companies Act2013 read with the Companies (Audit and Auditors) Rules 2014 [including any statutorymodification(s) of re-enactment(s) thereof for the time being in force] M/s Samir M. Shah& Associates Chartered Accountants Ahmedabad [Firm Registration No. 122377W] wereappointed as Statutory Auditors of the Company for a term of five consecutive years fromthe conclusion of the 23rd Annual General Meeting until the conclusion of 28th AnnualGeneral Meeting of the Company to be held in the calendar year 2022 subject to annualratification by members at every Annual General Meeting on such remuneration as maybedecided by the Audit Committee of the Board. However pursuant to Section 40 of theCompanies (Amendment) Act 2017 (i.e. Section 139 of the Companies Act 2013) which wasnotified w.e.f. May 7 2018 ratification of appointment of Statutory Auditors by themembers at every AGM is no longer required. Accordingly ratification resolution is notbeing taken up at the ensuing Annual General Meeting of the Company.
The Statutory Auditors have confirmed their eligibility and qualifications requiredunder Sections 139 141 and other applicable provisions of the Companies Act 2013 andRules issued thereunder (including any statutory modification(s) or re-enactment(s)thereof for the time being in force).
The Auditors' Report for the financial year ended March 31 2019 does not contain anyqualification reservation or adverse remark. As regards the comments made in theAuditors' Report the Board is of the opinion that they are self-explanatory and does notrequire further clarification.
In terms of Section 148 of the Companies Act 2013 read with Rule 8 of the Companies(Accounts) Rules 2014 (as amended) it is stated that the cost accounts and records aremade and maintained by the Company as specified by Central Government.
The Board of Directors of the Company on the recommendations made by the AuditCommittee at its meeting held on August 12 2019 have approved the appointment of M/s.A.G. Tulsian & Co. Cost Accountants Ahmedabad [Firm Registration No. 100629] as theCost Auditor of your Company for the financial year 2019-20 to conduct the audit of thecost records of your Company. The remuneration of Cost Auditors has been approved by theBoard of Directors on the recommendation of Audit Committee. The requisite resolution forratification of remuneration of Cost Auditors by members of the Company has been set outin the Notice of ensuing Annual General Meeting. The Cost Auditors have certified thattheir appointment is within the limits of Section 141(3)(g) of the Companies Act 2013 andthat they are not disqualified from appointment within the meaning of the said Act.
Your Company has received consent from M/s. A.G. Tulsian & Co. Cost Accountantsto act as Cost Auditor for conducting audit of cost records of textiles and other productsfor the financial year 2019-20 along with a certificate confirming their independence andarm's length relationship.
M/s Sandip Sheth & Associates Company Secretaries Ahmedabad (Firm RegistrationNumber: P200IGJ041000) were appointed as Secretarial Auditors of the Company for thefinancial year 2018-19 pursuant to Section 204 of the Companies Act 2013. The SecretarialAudit Report submitted by them in the prescribed form MR- 3 is attached as Annexure- E tothis Report.
Explanation to the observations of Secretarial Audit Report:
As prescribed under section 204(1) of the Act the Company has received the SecretarialAudit Report. The observations made therein and the corresponding explanations are givenbelow:
1. The Company has filed few e Forms with required late fees as per the provisions ofthe Companies Act 2013.
The Company has filed the e Forms as required under the Companies Act 2013 and paidthe necessary statutory fees.
2. The Company has filed required return under Investor Education and Protection FundRules; however not within prescribed time.
The Company has already filed the same and it has been taken on record by authorities.
M/s Sandip Sheth & Associates Company Secretaries Ahmedabad have been appointedto conduct the Secretarial Audit of the Company for the financial year 2019-20. They haveconfirmed that they are eligible for the said appointment.
SEBI vide its Circular No. CIR/CFD/CMD1/27/2019 dated February 8 2019 read withRegulation 24(A) of the SEBI Listing Regulations directed listed entities to conductAnnual Secretarial Compliance Audit from Practicing Company Secretary of all applicableSEBI Regulations and circulars/guidelines issued thereunder. The said SecretarialCompliance Report is in addition to the Secretarial Audit Report by Practicing CompanySecretaries under Form MR-3 and is required to be submitted to Stock Exchanges within 60days of the end of financial year. The Company had engaged the services of M/s SandipSheth & Associates Secretarial Auditor of the Company for providing thiscertification. The Company is publishing the said Secretarial Compliance Report onvoluntary basis and the same has been annexed as Annexure D to the Board's Report formingpart of this Annual Report.
Auditors' certificate on corporate governance
As required by SEBI Listing Regulations the Auditors' Certificate on CorporateGovernance is enclosed as part of Annual Report. The Auditors' Certificate for fiscal 2019does not contain any qualification reservation or adverse remark.
Details in respect of frauds reported by Auditors other than those which are reportableto the Central Government
The Statutory Auditors Cost Auditors or Secretarial Auditors of the Company have notreported any frauds to the Audit Committee or to the Board of Directors under Section143(12) of the Companies Act 2013 including rules made thereunder.
Disclosure Under Schedule V (F) of The SEBI (LODR) Regulations 2015
The Company does not have any Unclaimed Shares issued in physical form pursuant toPublic Issue/Rights Issue.
Related Party Transactions
During the financial year 2018-19 your Company has entered into transactions withrelated parties as defined under section 2(76) of the Companies Act 2013 read withCompanies (Specification of Definitions Details) Rules 2014 all of which are in theordinary course of business and on arm's length basis and in accordance with theprovisions of the Companies Act 2013 read with the Rules issued thereunder and the SEBIListing Regulations. Hence approval for such related party transactions to be entered inthe financial year 2019-20 and 2020-21 is proposed for approval of members at the ensuingannual general meeting and resolution in that respect has been incorporated in the Noticecalling Annual General Meeting.
All transactions with related parties were reviewed and approved by the AuditCommittee. Prior omnibus approval was granted by the Audit Committee for related partytransactions which are of repetitive nature entered in the ordinary course of businessand are on arm's length basis in accordance with the provisions of Companies Act 2013read with the Rules issued thereunder and SEBI Listing Regulations.
The details of the related party transactions as per Accounting Standard 18 are set outin Note 35 to the Financial Statements forming part of this Report.
Form AOC - 2 pursuant to Section 134(3)(h) of the Companies Act 2013 read with Rule8(2) of the Companies (Accounts) Rules 2014 is set out as Annexure G.
The Company's Policy on dealing with Related Party Transactions is available on theCompany's website at https://nandandenim.com/wp-content/uploads/2018/03/RelatedPartyTransactionPolicy.pdf.
Policies of the Company
The Company is committed to good corporate governance and has consistently maintainedits organizational culture as a remarkable confluence of high standards of professionalismand building Shareholder equity with principles of fairness integrity and ethics. TheBoard of Directors of the Company have from time to time framed and approved variousPolicies as required by the Companies Act 2013 read with the Rules issued thereunder andthe SEBI Listing Regulations. These Policies and Codes are reviewed by the Board and areupdated as and when required.
Some of the key policies adopted by the Company are as follows:
|Sr. No. ||Name of Policy |
|1 ||Dividend Distribution Policy |
|2 ||Policy on Determination of materiality of events/ information |
|3 ||Code of Conduct for Board Members and SeniorManagement Personnel |
|4 ||Policy on Archival of Information |
|5 ||Code of Conduct for Employees |
|6 ||Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information |
|7 ||Code of Conduct to Regulate Monitor and Report trading by Insiders |
|8 ||Policy on Related Party Transactions |
|9 ||Policy on Board Diversity |
|10 ||Whistle Blower Policy |
|11 ||Corporate Social Responsibility Policy |
|12 ||Nomination and Remuneration Policy |
|13 ||Sexual Harassment Policy |
The above mentioned policies and code are available on the website of the Company.
Details Of Internal Financial Controls Related To Financial Statements
The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures.
Nandan Denim Limited has adopted accounting policies which are in line with theAccounting Standards prescribed in the Companies (Accounting Standards) Rules 2006 thatcontinue to apply under Section 133 and other applicable provisions if any of theCompanies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and relevantprovisions of the Companies Act 1956 to the extent applicable. These are in accordancewith generally accepted accounting principles in India. Changes in policies if any areapproved by the Audit Committee in consultation with the Statutory Auditoर
The Company operates in SAP an ERP system and has many of its accounting recordsstored in an electronic form and backed up periodically. The ERP system is configured toensure that all transactions are integrated seamlessly with the underlying books ofaccount. The Company has automated processes to ensure accurate and timely updation ofvarious master data in the underlying ERP system.
The management periodically reviews the financial performance of your Company againstthe approved plans across various parameters and takes necessary action wherevernecessary.
For all amendments to Accounting Standards and the new standards notified the Companycarries out a detailed analysis and presents the impact on accounting policies of theGroup the impact on financial results including revised disclosures to the AuditCommittee. The approach and changes in policies are also validated with the statutoryauditoर The Company takes steps to make these amendments as part of the underlying ERPsystems to the extent possible.
Your Company has a code of conduct applicable to all its employees along with a WhistleBlower Policy which requires employees to update accounting information accurately and ina timely manner. Any non - compliance noticed is to be reported and actioned upon in linewith the Whistle Blower Policy.
The Company gets its standalone accounts audited every quarter by its StatutoryAuditoर
The Company has a well-defined risk management framework in place. Further it hasestablished procedures to periodically place before the Board the risk assessment andmanagement measures. As such there are no risks which in the opinion of the Boardthreaten the existence of the Company. However the details of the risks faced by theCompany which may pose challenges and the mitigation thereof are discussed in detail inthe Management Discussion and Analysis Report that forms part of the Annual Report.
All properties and insurable interests of the Company including buildings plant &machinery and stocks have been adequately insured.
Policy on Prevention Prohibition and Redressal of Sexual Harassment of Women atWorkplace
The Company has in place a Policy on Prevention of Sexual Harassment at Workplace inline with the requirements of the Sexual Harassment of Women at Workplace (Prevention
Prohibition and Redressal) Act 2013 ("Prevention of Sexual Harassment of Women atWorkplace Act") and Rules framed thereunder and an Internal Complaints Committee(ICC) has also been set up to redress complaints received regarding sexual harassment atthree places i.e. Corporate Office Piplej Plant and Bareja Plant.
The Company believes in zero tolerance towards sexual harassment at workplace andmaintains itself as a safe and non - discriminatory organization. The ICC members havebeen trained in handling and resolving complaints and also meet at regular intervals.
During the financial year 2018-19 no cases in the nature of sexual harassment werereported at any workplace of Nandan Denim Limited.
Corporate Social Responsibility
During the financial year ended March 31 2019 the Company incurred CSR expenditure ofRS.1.60 cr. (Rupees One Crore and Sixty Lakh Only). The CSR initiatives of the Company ismainly under the thrust area of education.
The Company's CSR Policy statement and Annual Report on the CSR activities undertakenduring the financial year ended March 31 2019 in accordance with section 135 of theCompanies Act 2013 and Companies (Corporate Social Responsibility Policy) Rules 2014(including any statutory modification(s) or re-enactment(s) thereof for the time being inforce) is set out in Annexure C to this Report.
Extract Of Annual Return
The details forming part of the extract of the Annual Return as on March 31 2019 inForm MGT - 9 in accordance with Section 92(3) of the Companies Act 2013 read withCompanies (Management and Administration) Rules 2014 are set out herewith as Annexure -B to this Report and is also available on the website of the Company.
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Meetings of the Board of Directors and General Meetings.
During the year under review the Company has not accepted any deposits within themeaning of section 73 and 74 of the Act read with the Companies (Acceptance of Deposits)Rules 2014 [including any statutory modification(s) or re-enactment(s) thereof for thetime being in force] and Chapter V of the Companies Act 2013.
The Company has a robust vigil mechanism through its Whistle Blower Policy approved andadopted by Board of Directors of the Company in compliance with the provisions of Section177 (10) of the Act and Regulation 22 of the SEBI Listing Regulations.
The Company has developed an in-house system which can be used to inter aliareport any instances of financial irregularities breach of code of conduct abuse ofauthority disclosure of financial/price sensitive information unethical/unfair actionsconcerning company vendors /suppliers mala-fide manipulation of Company recordsdiscrimination to the Code of Conduct in an anonymous manner.
The Policy also provides protection to the employees and business associates who reportunethical practices and irregularities. Any incidents that are reported are investigatedand suitable action is taken in line with the Whistle Blower Policy. The Whistle BlowerPolicy of the Company can be accessed at website of the Company atwww.nandandenim.com/policies/.
Material Changes And Commitments
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year 2018-19 and the date ofthis report. Barring unforeseen circumstances the Directors of your Company expectcontinued growth in turnover and profitability in future.
Significant and Material Orders Passed by the Regulators or Courts
There have been no significant and material orders passed by the Regulators or Courtsor Tribunals impacting the going concern status of the Company and its operations infuture.
In order to save environment by cutting down the consumption of paper the Ministry ofCorporate Affairs (MCA) has introduced "Green Initiative in CorporateGovernance" by allowing paperless compliance by companies under the provisions of theCompanies Act. MCA had further announced that the Directors of the Company may participatein a meeting of Board or Committee of Directors under the provisions of the CompaniesAct through electronic mode. Participation of Directors in the Board or its Committeemeetings through video conferencing is an approved way of attending the meetings and suchparticipation is considered for the purposes of quorum authority etc. The Companies arealso mandated to conduct the postal ballot through electronic means. In future if thereis any requirement of passing resolutions through postal ballot Nandan Denim Limited willconduct the ballot process in the e-voting mechanism.
To preserve environment your Company regularly undertakes green initiatives which notonly reduce burden on environment but also ensure secured dissemination of information.Such initiatives include energy saving water conservation and usage of electronic mode ininternal processes & control statutory and other requirement. NDL started sendingdocuments like notices convening General Meetings Financial Statements etc. includingAnnual Reports in electronic form to the email addresses made available to us by thedepositories from time to time. We appreciate the initiative taken by MCA as it helps inprompt receipt of correspondence and also avoids delay or losses caused through post.Annual Report is also available on our website namely www.nandandenim.com.
Further as a member you will be entitled to be furnished with a copy of the abovementioned documents as required free of cost upon receipt of a requisition from you anytime. We would appreciate your support on our desire to participate in the greeninitiative.
Following statements/reports/certificates are set out as Annexures to the Directors'Report:
Energy Conservation Technology Absorption and Foreign Exchange Earnings& Outgo
Extract of Annual Return under Section 134(3)(a) of the Companies Act 2013read with Rule 12 (1) of Companies(Management & Administration) Rules 2014 in FormMGT-9.
Details of CSR activities and spends under Section 135 of the Companies Act2013.
Annual Secretarial Compliance Report pursuant to Regulation 24A of SEBIListing Regulations.
Secretarial Audit Report pursuant to Section 204 of the Companies Act 2013.
Information as per Section 197 of the Companies Act 2013
Form AOC - 2
The Board of Directors wish to convey their gratitude and place on record theirappreciation for all the employees at all levels for their hard work solidarityco-operation and dedication during the year. Further the Board sincerely conveys itsappreciation to its customers Shareholders suppliers as well as vendors bankersbusiness associates regulatory and government authorities for their continued support.
| || |
For and on behalf of the Board of Directors
| ||Vedprakash Chiripal ||Jyotiprasad Chiripal |
|Place: Ahmedabad ||Chairman ||Managing Director |
|Date: August 12 2019 ||(DIN: 00290454) ||(DIN: 00155695) |