MANAGEMENT DISCUSSION AND ANALYSIS
To The Members of
R & B Denims Limited
The Directors take pleasure in presenting the Sixth Annual Report together with theaudited financial statements for the year ended March 31 2016. The Management Discussionand Analysis has also been incorporated into this report.
1. FINANCIAL RESULTS
| || ||(Rs. In thousands) |
|Particulars || |
|Sales/ Business Income ||1590024.32 ||1544346.65 |
|Other Income ||36437.81 ||21931.71 |
|Total Income ||1626462.13 ||1566278.36 |
|Less: Expenses (Excluding Depreciation) ||1516160.71 ||1474016.88 |
|Profit before depreciation exceptional items and taxes ||110301.42 ||92261.48 |
|Less: Depreciation ||89243.53 ||84532.69 |
|Profit before exceptional items and taxes ||21057.89 ||7728.79 |
|Less: Exceptional Items ||- ||- |
|Profit before Taxation ||21057.89 ||7728.79 |
|Less: Income Tax ||8981.19 ||1477.92 |
|Deferred Tax ||1847.89 ||3991.89 |
|MAT Credit Provision ||- ||1429.83 |
|Profit after Taxation ||13924.59 ||3688.81 |
|Balance Brought Forward ||6860.79 ||3171.99 |
|Balance Carried Down ||20785.38 ||6860.79 |
|Earnings per share (Rs.) :Basic ||0.99 ||0.27 |
|Diluted ||0.99 ||0.27 |
2. HIGHLIGHTS OF PERFORMANCE
Standalone total income for the current financial year was increased to Rs.1626462.13 (in thousands) as compared to Rs. 1566278.36 (in thousands) in 2015increased by 3.84%;
Standalone net sales for the year was Rs. 1590024.32 (in thousands) ascompared to Rs. 1544346.65 (in thousands) in 2015 a growth of 2.96%;
Standalone profit before tax for the year was Rs. 21057.89 (in thousands) ascompared to Rs. 7728.79 (in thousands) in 2015;
Standalone Profit after tax for the year was Rs. 13924.59 (in thousands) ascompared to Rs. 3688.19 (in thousands) in 2015.
3. STATE OF COMPANYS AFFAIRS
Your directors are glad to report that during the year under review your company hasposted higher income of Rs. 1626462.13 (in thousands) in the current year as compared toRs. 1566278.36 (in thousands) in the corresponding previous year. Hence your companyhas generated higher net profit of Rs. 13924.59 (in thousands) in the current year ascompared to net profit of Rs. 3688.81 (in thousands) in the corresponding previous year.
4. TRANSFER TO RESERVES IN TERMS OF SECTION 134(3)(J) OF THE COMPANIES ACT 2013
For the financial year ended on March 31 2016 the Company has proposed to carry anamount of Rs 13924.59 (in thousands) to Balance Sheet under the head "GeneralReserve Account".
In view of the requirement of the profits for strengthening of the company yourdirectors have decided to plough back the profit into the business hence no dividend couldbe recommended for the year under review.
6. MATERIAL CHANGES SUBSEQUENT TO THE CLOSE OF THE YEAR:
No material changes have been occurred between Balance Sheet date and the date on whichthe financial statement are approved by the Board of Directors.
7. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:
During the year under review there has been no such significant and material orderspassed by the regulators or courts or tribunals impacting the going concern status andcompanys operations in future.
8. SUBSIDIARY COMPANY/ASSOCIATE/JOINT VENTURE:
There has been no subsidiary/Associate/Joint Venture incorporated/ceased of yourcompany during the financial year 2015-16.
9. MANAGEMENTS DISCUSSION AND ANALYSIS REPORT
In terms of the provision of Regulation 34 of the Securities Exchange Board of India(Listing Obligation and Disclosure Requirement) Regulation 2015 the management Discussionand Analysis is a forming part of this Annual Report.
10. CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the company during the financialyear 2015-16.
11. SHARE CAPITAL
The paid up Equity Share Capital as on March 31 2016 was Rs. 139946.88 (inthousands). The Company has not issued/allotted any shares however the company has madeoffer for sale of Equity Shares during the financial year 2015-16.
Cash and cash equivalent as at March 31 2016 was Rs. 16528.32 (in thousands). TheCompany continues to focus on judicious management of its working capital. Receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.
12.1 ACCEPTANCE OF DEPOSITS
The Company has not accepted deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 and The Companies (Acceptance of Deposits) Rules2014 and any modification thereof.
12.2 PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the Notes to the financial statements provided in this Annual Report.
As per the latest GDP growth estimates Indian economy grew by 7.56% in FY16 comparedto 7.4% in FY15 mostly driven by improved economic fundamentals and revision of GDPmethodology calculation. Particularly performance of industry sector was excellent in thelast year and your company has maintained and stable at the same position in the currentyear also. The performance of your Company is highly encouraging. Your Company has closedthe financial year 2015-16 with 2.96% growth in sales and PBT (excluding Exceptionalitems) has shown a remarkable growth of 172.46% compared to the previous year. YourCompany has achieved the growth across all business segments.
14. DENIM INDUSTRY OUTLOOK AND OPPORTUNITIES
The Indian denim industry is showing continual growth trends over the years. With newerterritories technologies and trends the market is only going to see some excitingmoments ahead. Consumers especially the youth in cities beyond the metros and minimetros are growing exceptionally aspirational. With increasing globalization young Indiaprefers denims as a part of their essential daily wear. Denim Manufacturing Associationestimated that Denim manufacturing and consumption in India has grown at a compoundedannual growth rate (CAGR) of up to 15% over the last decade and is expected to grow atsimilar levels over the next few years.
Denim is of the most promising category in Indias apparel market. The globalmarket for denim is forecast to reach USD 64.1 billion by 2020. The Indian denim industryhas shown continual growth over the years and currently the country boasts of a denimmanufacturing capacity of around 1.1 billion meters per annum. Its utilization levels arepegged at 80-85%. Despite the impressive statistics the Indian denim manufacturingindustry contributes 5% to the global scenario reflecting the overall performance of thetextiles industry. However according to industry experts denim is the only segment inthe Indian textile industry that has the potential to grow manifold.
The value share of denim market is skewed in favour of mega metros and metros whichaccount for almost half of the total denim market at a share of 49 percent. Though themarkets of other urban areas and rural India contribute high in volume terms theircombined share in market value is only 51 percent.
As the penetration of denim category and the awareness of denim quality increases inthose cities and rural India their share in market value will start increasing with morenumber of consumers willing to pay premium for the quality design and fit.
In fact India has been ranked as a top destination for retail investments among 30global emerging markets. However despite the Indian denim manufacturing industrywitnessing rapid growth in the last 4-5 years.
Denim fabric production in India is concentrated in the western and a northern part ofthe country with more than 45 percent contribution coming from Gujarat is the productionhub.
The Indian denim industry stands to benefit immensely from the ambitious "Make inIndia" initiative. The vision of the programme has the potential to overhaul thesegments perception and the countrys contribution in the world denim scenario.However to turn this vision in to reality Indias denim manufacturing segment needsto be equipped with facilitating mechanisms. Even more important is the effectiveimplementation of these mechanisms. Once this is done the strength of domestic Indiandenim markets as well as its denim export capabilities will remain unparalleled.
15. COSTS-DENIM BUSINESS
During the year 2016 the economy witnessed an upward movement in the overall coststructure and the Company continued to focus on cost improvements through its excellentprograms.
15.1 Cost of materials consumed
Cost of materials consumed accounted for 78.75% of total income from operations (77.17%in 2015). Cost of material consumed increased by 5.07% in 2016 over 2015. Yarn prices wereincreased by 3.45% in 2016 as compared to 2015 while Coal/Lignite prices were decreased by7.02% in 2016 as compared to 2015. Color/Chemical prices increased by 8.32% in 2016 over2015 and stores/packing materials prices were increased by 104.21% in 2016 as compared to2015.
15.2 Power & Fuel
The power and fuel (electricity Expenses) spent was Rs. 106966.57 (in thousands) whichconstitutes 6.73% of the total income from operations of the company.
15.3 Other Expenditure
Other expenditure (exclusion of Manufacturing Expenditure) constitutes 1.32% of totalincome from operations of the Company. The increase in other expenditure (exclusion ofManufacturing Expenditure) was 84.48% in 2016 over 2015 primarily due to pollution controlexpense.
16. SUSTAINABLE DEVELOPMENT
Sustainability has been deeply embedded into the Companys business and has becomean integral part of its decision making process while considering social economic andenvironmental dimensions. During the year 2015-16 a Sustainable Development was developedwith a focus on the following areas:
16.1 Water Emissions
Our Company is a member of Gujarat Eco-Textile Park (GETP) since 2014 The Parkhelp us to reduce water pollution. The Company has also implemented various measuresacross all its operations to control fugitive emissions.
16.2 Air Emissions
Initiatives were taken to reduce air pollution causes due to productionprocesses. Company has taken license from Gujarat Pollution Control Board (GPCB). Theofficers of the board often comes on a surprise visit to our factory and verify thelevel of air pollution. The samples are tested by GPCB in their own laboratory and reportis issued to us.
17. HEALTH & SAFETY
Health & Safety (H&S) remains the Companys top priority. Our company isequipped with proper first aid facilities Medical facilities and stretchers. The shiftsupervisors have been trained in basic life support techniques.
With regard to safety two key areas of focus identified were Facility Management forthe employees and Equipment Tools & Material Management. The Facility Managementinitiative was implemented to ensure adequate welfare facilities for employees such aswashrooms with bathing facilities rest rooms proper availability of drinking water etc.The Equipment Tools & Material Management program ensured that the tools used byemployees were safe and the company provides earplugs helmet nose & face mask handgloves safety shoes to protect its employees. The process of screening of employees wasmade more stringent to ensure that the employees were aligned with the Companysobjectives.
18. HUMAN RESOURCES
Many initiatives have been taken to support business through organizational efficiencyprocess change support and various employees engagement programs which have helpedthe Organization achieve higher productivity levels. A significant effort has also beenundertaken to develop leadership as well as technical/functional capabilities in order tomeet future talent requirement.
The Companys HR processes such as hiring and on boarding fair transparentperformance evaluation and talent management process and market aligned policies havebeen seen as at good level practices in the Industry.
18.1 Employees of Choice:
The Company has positioned itself as one of the best companies to work for. Employeeshave option to work with the world class technologies and have flexibility to pursuedifferent functions. Employees are encouraged to express their views and are empowered towork independently. Employees are given the opportunity to learn through various smallprojects which make them look at initiatives from different perspectives and thus providethem with a platform to become result oriented. This has helped greatly in overalldevelopment of the employee and has significantly arrested the attrition rate.
18.2 Leadership Development:
As a part of leadership development talented employees have been seconded to thesenior leadership team to mentor them and prepare them for the next higher role. Apartfrom this a large number of senior middle and other employees are sent for leadershipprograms or are assigned to small independent projects which are planned for identifiedtalent.
18.3 Industrial Relation:
The Company shares relevant business information with the union in order to enlightenthem and make them sensitive towards business requirements. This has helped to build ahealthy relationship and resolve issue through mutual dialogue.
18.4 Individual Development Planning:
This is an annual process tied to business planning and the budget cycle whereby themanagement in our organization establishes training goals and plans for employees of theorganization.
19. CORPORATE SOCIAL RESPONSIBILITY
The Board of Directors of the Company hereby confirms that the provisions of Section135(1) of the Companies Act 2013 is not applicable to our company.
20. BUSINESS RESPONSIBILITY REPORT (BRR)
The Board of Directors of the Company hereby confirms that according to the provisionsof Regulation 34(2)(f) of the Securities Exchange Board of India (Listing Obligation andDisclosure Requirement) Regulation 2015 the give report on Business Responsibility Report(BRR) is not mandatorily applicable to our company hence not annexed with Annual Report.
21. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. To maintain its objectivity and independence the InternalAudit function reports to the Chairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company including the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial disclosure.Based on the report of internal audit function process owners undertake corrective actionin their respective areas and thereby strengthen the controls.
22. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Agreement includes an Ethics & Compliance. The Company has avigil mechanism and whistle blower policy to deal with unethical behavior fraud orviolation of the Companys code if any. Protected disclosures can be made by awhistle blower through an e-mail or dedicated telephone line or a letter to the Chairmanof the Audit Committee. The Policy on vigil mechanism and whistle blower policy may beaccessed on the Companys website at the link:http://www.rnbdenims.com/images/VIGIL%20MECHANISM%20FOR%20DIRECTORS%20AND %20EMPLOYEES.pdf
23. POLICY FOR DETERMINATION OF MATERIALITY OF EVENTS
The Policy for Determining Materiality of Information / Events for reporting to theStock Exchanges is framed pursuant to SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 which enables the investors to make well-informedinvestment decisions and take a view on the Materiality of an event that qualifies fordisclosure.
24. POLICY FOR PRESERVATION & ARCHIVAL OF DOCUMENTS
The Policy for Preservation & Archival of documents is framed pursuant toRegulation 9 & 30(8) of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 investors and concerned authority accessed preservation of documents andrecords of the Company through companys website which is required to be maintainedunder the Companies Act 2013 and Listing Regulation. Any disclosure of events orinformation which has been submitted by the Company to the Stock Exchanges will beavailable on the website of the Company for a period of 5 years from the date of itsdisclosure and shall thereafter be archived from the website of the Company for a periodof 3 years. This policy basically deals with the retention and archival of corporaterecords.
25. COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013
Your Corporation is committed to prevention of sexual harassment of women at workplaceand takes prompt action in the event of reporting of such incidents. In this regardinternal complaints committees have been constituted to deal with sexual harassmentcomplaints if any and conduct enquires.
There were no complaints received of sexual harassment during the financial year2015-16.
26. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that they meet the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
27. DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board had appointed Mrs. Jyoti Arun Agarwal as Company Secretary cum complianceofficer in the Board Meeting of the Company held on December 21 2015 pursuant to theprovisions of Section 203 and all other applicable provisions if any of the CompaniesAct 2013 with effect from December 21 2015.
Mr. Pradip Kanti Dave former Company Secretary cum compliance officer resigned from theservices of the Company with effect from July 17 2015.
The Board has placed on record its appreciation for the outstanding contributions madeby Mr. Mr. Pradip Kanti Dave during their respective tenures of office
In accordance with the provisions of the Companies Act 2013 and in terms of theMemorandum and Articles of Association of the Company Mr. Amitkumar A Dalmia (holdingDIN: 00034642) retires by rotation and is eligible for re-appointment.
27.1 Policy on directors appointment and remuneration
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.
During the year Board Meetings and Committee Meetings were convened and held. Thedetails of which are given herein below and also in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.
DETAILS OF MEETINGS HELD DURING THE F.Y. 2015-16
|Sr. No. ||Date of Meeting ||Class of Meeting ||Board Strength ||No. of Directors Present |
|1 ||13/04/2015 ||Stakeholders Relationship Committee ||3 ||3 |
|2 ||20/05/2015 ||Board of Director Meeting ||8 ||6 |
|3 ||18/06/2015 ||Board of Director Meeting ||8 ||6 |
|4 ||29/06/2015 ||Audit Committee ||4 ||4 |
|5 ||17/07/2015 ||Board of Director Meeting ||8 ||4 |
|6 ||27/07/2015 ||Stakeholders Relationship Committee ||3 ||3 |
|7 ||03/08/2015 ||Nomination & Remuneration Committee ||4 ||4 |
|8 ||24/08/2015 ||Audit Committee ||4 ||4 |
|9 ||18/10/2015 ||Audit Committee ||4 ||4 |
|10 ||10/11/2015 ||Board of Director Meeting ||8 ||8 |
|11 ||14/12/2015 ||Stakeholders Relationship Committee ||3 ||3 |
|12 ||21/12/2015 ||Board of Director Meeting ||8 ||7 |
|13 ||22/12/2015 ||Recommendations of offer price Committee ||3 ||3 |
|14 ||08/02/2016 ||Nomination & Remuneration Committee ||4 ||4 |
|15 ||25/02/2016 ||Board of Director Meeting ||8 ||8 |
|16 ||14/03/2016 ||Stakeholders Relationship Committee ||3 ||3 |
|17 ||23/03/2016 ||Audit Committee ||4 ||4 |
28. 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:
a. that in the preparation of the annual financial statements for the year ended March31 2016 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b. that such accounting policies and applied them consistently and made judgment andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the company at the end of the financial year and of the profit and loss ofthe company for that period;
c. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual financial statements have been prepared on a going concern basis;
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
29. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arms length basis. There are no materially significant related party transactionsmade by the Company with Promoters Directors Key Managerial Personnel or otherdesignated persons which may have a potential conflict with the interest of the Companyat large and the details of which is prescribed in Form AOC-2 as an "Annexure-A"attached to this report.
30.1 Statutory Auditors
The Companys Auditors Messrs Pradeep Singhi & Associates CharteredAccountants Surat hold office till the conclusion of the ensuing Annual General Meetingof the Company and are eligible for re-appointment. They have confirmed their eligibilityunder Section 141 of the Companies Act 2013 and the Rules framed thereunder forreappointment as Statutory Auditors of the Company. The auditors have also confirmed thatthey hold a valid certificate which is issued by the Peer Review Board of the Institute ofChartered Accountants of India.
30.2 Cost Auditors
Pursuant to Section 148 of the Companies Act 2013 read with The Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyin respect of its denim activity is required to be audited. Your Directors had on therecommendation of the Audit Committee appointed Messrs V. M. Patel & Associates toaudit the cost accounts of the Company for the financial year 2015-16 on a remuneration ofRs. 35000/- plus Service tax if applicable and out of pocket expenses. As required underthe Companies Act 2013 the remuneration payable to the cost auditor is required to beplaced before the Members in a general meeting for their ratification. Accordingly aResolution seeking Members ratification for the remuneration payable to Messrs V. MPatel & Associates Cost Auditors is included at Item No. 5 of the Notice conveningthe Annual General Meeting.
30.3 Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 The Board has appointedMessrs JAINAM N SHAH & CO Practicing Company Secretary Surat to conduct SecretarialAudit for the financial year 2015-16. The Secretarial Audit Report for the financial yearended March 31 2016 is annexed herewith marked as "Annexure-B" to this Report.The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
31. ENHANCING SHAREHOLDERS VALUE
Your Company believes that its Members are among its most important stakeholders.
Accordingly your Companys operations are committed to the pursuit of achievinghigh levels of operating performance and cost competitiveness consolidating and buildingfor growth enhancing the productive asset and resource base and nurturing overallcorporate reputation. Your Company is also committed to creating value for its otherstakeholders by ensuring that its corporate actions positively affect the socio-economicand environmental dimensions and contribute to sustainable growth and development.
32. CORPORATE GOVERNANCE
According to the Securities Exchange Board of India (Listing Obligation and DisclosureRequirement) Regulation 2015 a separate section on corporate governance practicesfollowed by the Company together with a certificate from the Companys Auditorsconfirming compliance forms an integral part of this Report. The Report on CorporateGovernance by Auditor is forming part of Annual Report.
33. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as"Annexure-C".
34. EXTRACT OF ANNUAL RETURN
In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in form MGT 9 is appended as "Annexure-D" to the Boardsreport.
35. PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197(12) read with Rule 5 (1) of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are providedin the "Annexure-E" of the Annual Report.
36. RISK MANAGEMENT
Our Enterprise Risk Management encompasses practices relating to the identificationanalysis evaluation treatment mitigation and monitoring of the strategic external andoperational controls risks to achieving our key business objectives. Risk Management atour company seeks to minimize the adverse impact of these risks thus enabling the Companyto leverage market opportunities effectively and enhance its long-term competitiveadvantage. Several risks can impact the achievement of a particular business objective.Similarly a single risk can impact the achievement of several business objectives. Thefocus of risk management is to assess risks and deploy mitigation measures.
Your Directors thank the various Central and State Government DepartmentsOrganizations and Agencies for the continued help and co-operation extended by them. TheDirectors gratefully acknowledge all stakeholders of the Company viz. workers staffcustomers members dealers vendors banks concerned authorities and other businesspartners for the excellent support received from them during the year. The Directors placeon record their sincere appreciation to all employees of the Company for their unstintedcommitment and continued contribution to the Company.
38. CAUTIONARY STATEMENT
Statements in the Boards Report and the Management Discussion & Analysisdescribing the Companys objectives expectations or forecasts may be forward-lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Companys operations include global and domestic demand and supplyconditions affecting selling prices of finished goods input availability and priceschanges in government regulations tax laws economic developments within the country andother factors such as litigation and industrial relations.
Certain statements in this report relating to Company's objectives projectionsoutlook expectations estimates etc may be forward looking statements within the meaningof applicable laws and regulations. Although the Company believes that the expectationsreflected in such forward looking statements are reasonable no assurance can be giventhat such expectations will prove to have been correct. Accordingly actual results orperformance could differ materially from such expectations projections etc whetherexpress or implied as a result of among other factors changes in economic conditionsaffecting demand and supply success of business and operating initiatives andrestructuring objectives change in regulatory environment other government actionsincluding taxation natural phenomena such as floods and earthquakes customer strategiesetc over which the Company does not have any direct control.
| ||For and on behalf of The Board Of Directors |
| ||R & B DENIMS LIMITED |
| ||Sd/- |
| ||Rajkumar Mangilal Borana |
|Place: SURAT ||(Chairman & Managing Director) |
|Date: 20/05/2016 ||DIN: 01091166 |
SECRETARIAL AUDIT REPORT
[Pursuant to section 204(1) of the Companies Act 2013 and rule No. 9 of the Companies(Appointment and Remuneration Personnel) Rules 2014]
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED MARCH 31 2016
The Members R & B Denims Limited
I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by R & B Denims Limited(hereinafter called "the company"). Secretarial Audit was conducted in a mannerthat provided me a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing my opinion thereon.
Based on my verification of the company books papers minute books forms and returnsfiled and other records maintained by the company and also the information provided by theCompany its officers agents and authorized representatives during the conduct ofsecretarial audit I hereby report that in my opinion the company has during the auditperiod covering the financial year ended on March 31 2016 complied with the statutoryprovisions listed hereunder and also that the Company has proper Board-processes andcompliance mechanism in place to the extent in the manner and subject to the reportingmade hereinafter:
I have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on March 31 2016 accordingto the provisions of:
(i) The Companies Act 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade thereunder
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder
(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under Securities and ExchangeBoard of India Act 1992 (SEBI Act):-
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
b. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;
c. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;
d. The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;
e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;
f. The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009; and
h. The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;
i. Employees Provident Fund and Miscellaneous Provisions Act 1952
j. Employees State Insurance Act 1948
k. Employers Liability Act 1938
l. Environment Protection Act 1986 and other environmental laws
m. Equal Remuneration Act 1976
n. Factories Act 1948
o. Hazardous Wastes (Management and Handling) Rules 1989 and Amendment Rule 2003
p. Indian Contract Act 1872
q. Income Tax Act 1961 and Indirect Tax Laws
r. Indian Stamp Act 1999 s. Industrial Dispute Act 1947
t. Maternity Benefits Act 1961
u. Minimum Wages Act 1948
v. Negotiable Instruments Act 1881
w. Payment of Bonus Act 1965
x. Payment of Gratuity Act 1972
y. Payment of Wages Act 1936 and other applicable labour laws
I have also examined compliance with the applicable clauses of the following:
i. Secretarial Standards issued by The Institute of Company Secretaries of India.
ii. The Listing Agreements entered into by the Company with Bombay Stock ExchangeLimited
During the period under review the Company has complied with the provisions of theAct Rules Regulations Guidelines Standards etc. mentioned above subject to thefollowing observations:
I further report that The Board of Directors of the Company is duly constituted withproper balance of Executive Directors Non-Executive Directors and Independent Directors.The changes in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
Majority decision is carried through while the dissenting members views arecaptured and recorded as part of the minutes.
I further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
Its seems that the company has not filed form regarding appointment of CompanySecretary (MR-1 and MGT-14) within the time prescribed
I further report that during the audit period there were no events/actions inpursuance of:
i. Public/Right/Preferential issue of shares/debentures/sweat equity etc.
ii. Redemption / buy-back of securities
iii. Major decisions taken by the members in pursuance to section 180 of the CompaniesAct 2013.
iv. Merger / amalgamation / reconstruction etc. take place
v. Foreign technical collaborations take place during the audit year
I further report that during the audit period except Offer for Sale there were noother specific events/actions in pursuance of the above referred laws rules regulationsguidelines etc. having a major bearing on the Companys affairs.
| ||Sd/- |
| ||Shah Jainam Navinchandra-Proprietor |
| ||JAINAM N SHAH & CO. |
|Place: SURAT ||M. No.:35397 |
|Date: 20/05/2015 ||C P No. 13108 |
Form for Disclosure of Particulars with respect to Conservation of Energy
| || ||(Amount in Rs.) |
| ||Current Year ||Previous Year |
|Power and fuel consumption ||2015-16 ||2014-15 |
|A. Power and fuel consumption || || |
|1. Electricity || || |
|(A) Purchased || || |
|Unit (Lacs KWH) ||16039350 ||15117088 |
|Total amount (Rs. In Lacs) ||106966570 ||95747269 |
|Rate / unit (KWH) ||6.67 ||6.33 |
|2. Coal || || |
|Quantity (tonnes) ||10468 ||13116 |
|Total cost (Rs.) ||47051503 ||50319840 |
|Average rate (Rs.) ||4495 ||3837 |
|3. Diesel oil || || |
|Quantity (k. ltrs.) ||1800 ||1600 |
|Total amount (Rs.) ||93144 ||100554 |
|Average rate (Rs.) ||51.75 ||62.85 |
|4. Gas || || |
|Quantity (Kgs) ||11655 ||- |
|Total amount (Rs.) ||824900 ||- |
|Average rate (Rs.) ||70.78 ||- |
|B. Consumption per Unit of Production ||(Unit/Mtrs) ||(Unit/Mtrs) |
|Electricity ||0.00000044 ||0.00000042 |
|Coal ||0.00029 ||0.00025 |
|Gas ||0.0000046 ||- |
|C. Actual Fabrics Produced ||(in mtrs) ||(in mtrs) |
|Fabrics produced during the year ||15331276 ||15104519 |
Note: Diesel Oil consumption is only for backup power of system and not for production.
|Foreign Exchange Inflow & Outflow: || |
|Inflow: ||NIL |
|Outflow: ||US $: 1131283.20 |
| ||Euro: 29547.52 |
| ||Yen: 39000 |