Your Directors have pleasure to present the 26th Annual Report on the business andoperations of your Company along with the Financial Statements for the year ended 31stMarch 2018.
The Financial results of the Company's operations for the year under review and thoseof the previous year are as follows: -( Rs. in Crores)
|Particulars ||Current Year ||Previous Year |
|REVENUE FROM OPERATIONS ||1145.25 ||933.39 |
|Gross Profit Before Finance Cost Depreciation & Exceptional item. ||157.18 ||134.25 |
|Finance Cost ||29.55 ||22.27 |
|Profit before Depreciation Exceptional items and Tax ||127.63 ||111.98 |
|Depreciation ||56.19 ||41.66 |
|Exceptional items ||- ||- |
|PROFIT BEFORE TAXATION ||71.44 ||70.32 |
|Provision for Taxation- Current (Net of MAT Credit) ||15.98 ||2.33 |
|- Earlier Year ||(5.14) ||- |
|- Deferred Tax ||8.21 ||10.64 |
|PROFIT AFTER TAX ||52.39 ||57.35 |
|OTHER COMPREHENSIVE INCOME NET OF INCOME TAX ||(1.28) ||1.30 |
|TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ||51.11 ||58.65 |
Note: The Company has adopted Indian Accounting Standards (Ind AS) in place ofIGAAP as required vide Notification dtd. 16.02.2015 of the Ministry of Corporate Aff airs(MCA) and prepared the financial statements for the year ended 31st March 2018 inaccordance Ind AS for the first time. The financial statements for the year ended 31stMarch 2017 have been restated in accordance with Ind AS for comparative information. Thereconciliation and descriptions of the eff ect of the transition from IGAAP to Ind AS havebeen provided in Note No. 39 of the notes to accounts of the financial statements.
OPERATIONAL REVIEW Production
During the previous year your Company has implemented substantial capacity expansionand the same has been fully utilized as the Company has produced 47138 MT Cotton Yarn and7526 MT Knitted Fabrics in the current year against 42343 MT Cotton Yarn and 6825 MTKnitted Fabrics in the previous year.
REVENUE FROM OPERATIONS
Your Directors are pleased to inform that the Company has recorded highest ever revenueof Rs. 1145.25 Crores from operations in current year against Rs. 933.39Crores in the previous year an increase of 22.70%. The revenue of Cotton Yarn increasedby 22.62% from Rs. 706.01 Crores to Rs. 865.74 Crores whereas the revenueof Knitted Fabric increased by 12.50% from Rs. 156.52 Crores in the previous yearto Rs. 176.09 Crores during the current year. Knitted Fabric revenue constitutes15.38% of the total revenue from operations.
Exports of the Company increased significantly by 24.63% from Rs. 591.47 Croresin the previous year to
Rs. 737.12 Crores in the current year. Exports constitute 64.36% of thetotal revenue.
The year under review was a turbulent year for Textile Industry as the Industry wasreeling with the eff ect of demonetisation and implementation of GST during the year underreview caused major disruption whereby tax was levied across the entire value chain of theIndustry as against earlier regime of only Fiber stage duties and taxes. Moreover theduty drawbacks on exports were reduced leading to margin contraction Power cost alsoincreased substantially during the year as a result of levies of open access surcharge atthe end of last year. In spite of all these adverse circumstances the operating profit(EBIDTA) of the Company has increased from
Rs. 134.25 Crores in the previous year to Rs. 157.18 Crores in thecurrent year. However in percentage terms of revenue from operations it is slightly lowerto 13.72% in current year from 14.38% in previous year. The Cash Profit (PBDT) for thecurrent year was Rs. 127.63 Crores against Rs. 111.98 Crores in the previousyear. Due to implementation of expansion project in the last year the InterestCost Depreciation and Tax increased substantially because of increased loan assets baseand non availability of tax incentive which has adversely aff ected Profit after Tax as ithas decreased to Rs. 52.39 Crores in the current year from Rs. 57.35 Croresin previous year. Finally the Company has reported total comprehensive income after taxof Rs. 51.11 Crores for the current year as against Rs. 58.65 Crores duringlast year.
TRANSFER TO GENERAL RESERVE
A sum of Rs. 10 Crores has been appropriated to General Reserves out of totalcomprehensive income of Rs. 51.11 Crores for the year under review.
Your Directors are pleased to recommend Dividend of 12% i.e. Rs. 1.20 per EquityShares on the fully paid-up Equity Shares of Rs. 10/- each for the financial year2017-18 subject to approval of shareholders at the ensuing Annual General Meeting.
INSTALLATION OF INTEGRATED TEXTILE UNIT
The Company has undertaken to install Integrated Textile Unit at Bhanwaria KalanTehsil Begun in the District of Chittorgarh Rajasthan at an estimated project cost of Rs.675 Crores. The unit will be having facilities to manufacture processed fabric rightfrom fibre mainly using Cotton and Polyester as raw material. This will cater the completeneed of apparel Manufacturer. The land for the project has been purchased and buildingconstruction activity already started. The project is eligible for customized packagebenefits under the Rajasthan Investment Promotion Scheme 2014 of the Government ofRajasthan.
RAISING OF FUNDS THROUGH PREFERENTIAL ISSUE
During the year under consideration the Company has raised funds through issue of9385765 Equity Shares of Rs. 10/- each at a premium of Rs. 105/- eachaggregating to Rs. 107.94 Crores to the Qualified Institutional Buyers onpreferential basis and 332000 Equity Shares of Rs. 10/- each at a premium of Rs.110.50 each aggregating to Rs. 4.00 Crores to Promoters of the Company onpreferential basis inter-alia for repayment of debts general corporate purposes etc. Thishas strengthened long term resources of the Company and will help the Company in itsgrowth plans.
CORPORATE SOCIAL RESPONSIBILTY (CSR)
Your Company is committed to make a positive contribution to communities where itoperates. Pursuant to Section 135 of the Companies Act 2013 the Company constituted CSRcommittee and formulated CSR Policy as guiding principle for undertaking CSR activities.The Company's vision on CSR is that the Company being a responsible Corporate Citizenwould continue to make a serious endeavor for a quality and better society through its CSRrelated initiatives. During the current year the Company has incurred expenditure of Rs.131.40 Lacs on CSR activities against liability of Rs. 126.50 Lacs.Accordingly during the year there is no shortfall on CSR expenditure. The disclosures ofCSR activities pursuant to Section 134(3) of the
Companies Act 2014 read with Rule 9 of Companies (Corporate Social Responsibility)Rules 2014 is annexed hereto and form part of this report as Annexure I.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri Nitin Nolakha Director of the Company who retired and being eligible wasre-appointed at the Annual General Meeting of the Company held on 4th September 2017.Shri R. L. Nolkha Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible off er himself for re-appointment. Details of theDirector seeking re-appointment are provided in the Corporate Governance Report formingpart of this report. The Board recommends his appointment for consideration of members ofthe Company at the ensuing Annual General Meeting. No other changes have been taken placein composition of Board of Directors and Key Managerial Personnel of the Company duringthe year under review.
All Independent Directors of the Company have confirmed that they are complying withthe requirement of Section 149(6) of the Companies Act 2013 and applicable provisions ofSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015.
M/s Kalani & Co. Chartered Accountants (FRN 000722C) were appointed StatutoryAuditors for five years at the 25th Annual General Meeting held on 4th September 2017.Accordingly they shall continue to be Statutory Auditors for the 2018-19. The auditreport on the financial statements for the financial year ended on 31st March 2018issued by M/s Kalani & Co. Chartered Accountants do not contain any qualificationsreservations or adverse remarks. The Audit report is enclosed with the financialstatements in this annual report and hence do not require any further clarification.
The Board of Directors has re-appointed M/s V.M. & Associates Company Secretaries(Firm Registration No. P1984RJ039200) being eligible to conduct Secretarial Audit forthe Financial Year 2018-19 under the provisions of Section 204 of the Companies Act 2013.
The Board of Directors has appointed M/s. V. M & Associates Company Secretaries(Firm Registration No. P1984RJ039200) to conduct Secretarial Audit for the 2017-18 underthe provisions of Section 204 of the Companies Act 2013. The Report of SecretarialAuditors is enclosed herewith. The report does not contain any qualification reservationor adverse remark.
Pursuant to Section 148 of the Companies Act 2013 your Directors have appointed M/s.Vivek Laddha & Associates Cost Accountants (FRN 103465) being eligible to conductCost Audit of the Company for the Financial Year 2018-19.
The Company is committed to maintain the high standards of Corporate Governance. YourDirectors adhere to the requirements set out in Companies Act 2013 and the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 and have implemented all theprescribed requirements. In pursuant to regulation 34(3) of the SEBI (Listing Obligations& Disclosure Requirements) Regulations 2015 the Reports on Corporate Governance andManagement Discussions & Analysis have been incorporated in the Annual Report andforms an integral part of the Board Report.
AWARDS RECOGNITION & CERTIFICATIONS
Your Company has been conferred with the following awards and recognition during theyear under review :-
1. Rajasthan Export Award: During the year under review the Government ofRajasthan has selected your Company for Rajasthan Export Award for the year 2016-17.
2. UCCI Excellence Award 2018 by Udaipur Chamber of Commerce & Industryunder Large Enterprise Category.
3. Certifications :
Your Company got following certifications from British Standards Institution (BSI)during the year under review:- (a) Quality Management System - ISO 9001:2015 (b)Environmental Management System - ISO 14001:2015 (c) Energy Management System - ISO50001:2011 (d) Occupational Health & Safety Management System - OHSAS 18001:2007 (e)Social Accountability System - SA 8000:2014 With these certifications your company has allInternationally recognized certifications.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to sub-section 3 (c) of Section 134 of the Companies Act 2013 the Board ofDirectors of the Company hereby state and confirm that: (i) in the preparation of AnnualAccounts the applicable accounting standards have been followed along with properexplanation relating to material departures have been given;
(ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitor loss of the Company for that period; (iii) they have taken proper and sufficient carefor the maintenance of adequate accounting records in accordance with the provisions ofthis Act for safeguarding the assets of the Company and for preventing and detectingfrauds and other irregularities (iv) they have prepared the Annual Accounts on a goingconcern basis; (v) they have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operating effectively; and (vi) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operating effectively.
HUMAN RESOURCE DEVELOPMENT
Industrial relations continued to be cordial during the period under review. YourCompany firmly believes that a dedicated work force constitutes the primary source ofsustainable competitive advantage. Accordingly human resource development receivedfocused attention. The Company has in house skill training centre and imparts on the jobtraining to its manpower on continuous basis. Your Directors wish to place on record theirappreciation for the dedicated services rendered by the work force during the year underreview.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A Statement giving details of conservation of energy technology absorption foreignexchange earnings and outgo in accordance with Section 134(3)(m) read with the Rule 8 (3)of the Companies (Accounts) Rules 2014 is enclosed as Annexure II and formsintegral part of this Report.
OTHER DISCLOSURES UNDER COMPANIES ACT 2013 i) Number of Board Meetings :
The Board of Directors met five times in the year 2017-18. The details of number ofBoard Meetings and the attendance of the Directors are provided in the CorporateGovernance Report.
ii) Composition of Audit Committee:
The Board constituted the Audit Committee which comprises of Sh. Y. R. Shah ChairmanSmt. Aditi Mehta and Dr. R. Chattopadhyay as members. All the recommendations of AuditCommittee have been accepted by the Board. More details on the committee are given in theCorporate Governance Report.
iii) Related Party Transactions :
All the related party transactions are entered on arm's length basis and in theordinary course of business. The Company has complied with all the applicable provisionsof the Act and SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015in this regard. There is no materially significant related party transaction withPromoters Directors or Key Management Personnel which may have potential conflict withthe interest of the Company at large. During the year the Company has not entered intoany related party transactions under the Section 188 of the Companies Act 2013 and theparticulars of contracts or arrangements with related parties are Nil.
iv) Loans Guarantees or Investments:
The Company has not given any Loan Guarantee and also not made any Investments underthe Section 186 of the Companies Act 2013.
v) Fixed Deposits
The Company has not accepted or renewed any fixed deposits during the year under reviewand no fixed deposit is outstanding for payment at the year ended 31st March 2018.
vii) Vigil Mechanism/Whistle Blower Policy :
In pursuance of Section 177 (9) of the Companies Act 2013 and the regulation 22 of theSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 the Companyhas in place a Vigil Mechanism/ Whistle Blower Policy for Directors and employees toreport genuine concern. More details pertaining to the same are given in the CorporateGovernance Report.
viii) Nomination Remuneration & Evaluation Policy:
In pursuant to provisions of Section 178 of the Companies Act 2013 and SEBI (ListingObligations
& Disclosure Requirements) Regulations 2015 the Board of Directors have approvedNomination Remuneration & Evaluation Policy for appointment remuneration &evaluation of the Directors Key Management Personnel & Senior Management Personnel.The details of the Nomination and Remuneration committee Nomination Remuneration &Evaluation Policy and Annual Evaluation carried out by the Directors are given in theCorporate Governance Report.
ix) Particulars of Employees & Analysis of Remuneration:
Particulars of employees and analysis of remuneration as required under Section 197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are enclosed as Annexure - III
x) Extract of Annual Return
The extract of the Annual Return in Form MGT-9 as required under section 92(3) of theCompanies Act 2013 read with the Companies (Management and Administration Rules) 2014 isenclosed as
Annexure - IV
xi) Miscellaneous Disclosures:-
Details about risk management have been given in the Management Discussions &Analysis.
There is no material changes and commitments aff ecting the financial position of theCompany which has occurred between the end of the financial year and the date of thereport.
The Company does not have any subsidiary joint venture & associate company. Thereis no significant and material order has been passed during the year by the regulators orcourts or tribunals which can impact the going concern status and Company's operations infuture.
The Company is having adequate Internal Financial Control with reference to theFinancial Statements. During the year the Company has not received any complaint underthe Sexual Harassment of Woman at Workplace (Prevention Prohibition and Redressal) Act2013 and no complaint was pending at the beginning of the year.
Directors wish to express their grateful appreciation for assistance and co-operationreceived from various Departments of Central & State Governments and Banks during theyear under review. Your Directors also wish to place on record their appreciation for thecommitted services of all the associates and vendors of the Company.
For and on Behalf of the Board of Directors
R. L. NOLKHA
(DIN 00060746) Place : Bhilwara Dated : 10th May 2018