Responsive Industries Ltd.
|BSE: 505509||Sector: Industrials|
|NSE: RESPONIND||ISIN Code: INE688D01026|
|BSE 00:00 | 22 May||88.30||
|NSE 00:00 | 22 May||88.40||
|Mkt Cap.(Rs cr)||2,357|
|Mkt Cap.(Rs cr)||2356.73|
Responsive Industries Ltd. (RESPONIND) - Director Report
Company director report
Your Directors have pleasure in presenting this Thirty Sixth Annual Report on thebusiness and operations of your Company with the Audited Financial Statements for the yearended March 31 2018.
1. FINANCIAL PERFORMANCE
2. OPERATIONS & STATE OF COMPANYS AFFAIRS
Your Company earned total revenue of Rs. 10985.18 Million for the year ended 31stMarch 2018 as compared to Rs. 18406.50 Million in the previous financial year. TheCompany recorded a Net Profit after Tax of Rs.130.75 Million for the year ended 31stMarch 2018. The Net Profit after Tax for the financial year ended 31st March 2017 wasRs. 193.88 Million. There was no change in nature of business of the Company during theyear under review.
Your Directors recommend Dividend of 10% i.e. Re.0.10 per Equity share of face value ofRe.1/- each fully paid up aggregating to Rs. 26.69 Million for the year ended 31st March2018.
4. TRANSFER TO RESERVES
The Board of Directors has not recommended transfer of any amount to reserves.
4. SHARE CAPITAL
The paid up Equity Share Capital as at March 31 2018 stood at 266.91 Million. Duringthe year under review the Company has not issued shares with differential voting rightsnor granted any stock options or sweat equity shares. As on March 31 2018 none of theDirectors of the Company hold instruments convertible into equity shares of the Company.During the year under review there were no instances of non-exercising of voting rightsin respect of shares purchased directly by employees under a scheme pursuant to Section67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules2014.
5. SUBSIDIARIES ASSOCIATES & JOINT VENTURES
The Company has one material non listed Indian Subsidiary Company i.e. Axiom CordagesLimited. It also has one Hong Kong based subsidiary Responsive Industries Limited and onestep down subsidiary Axiom Cordages Limited incorporated on 02 June 2017. The policy fordetermining material subsidiaries of the Company is available on the website of theCompany i.e. www.responsiveindustries.com.Responsive International Limited a wholly owned subsidiary of the Company is being Nonoperative since inception. The Company does not have any associate Company & Jointventure.
Performance of Axiom Cordages Limited is as follows:
The total revenue net of excise of Axiom Cordages Limited stood at Rs.2017.29 Million(Previous year 2194.02 Million). Profit after tax for the year stood at Rs. (35.32)Million (Previous year -108.24 Million).
The requirement of appointing Independent Director of the Company on the Board ofDirectors of the subsidiary Company has been duly complied with. The requirements ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 ("SEBI Listing Regulations") with regard to subsidiary companyhave been complied with. Statement containing salient features of the financial statementof Subsidiary Companies in Form AOC-1 forms part of this Annual Report.
7. CONSOLIDATED FINACIAL STATEMENT
The Consolidated Financial Statements of the Company and of its Subsidiaries AxiomCordages Limited are prepared in compliance with applicable provisions of the CompaniesAct 2013 and "Ind AS" issued by the Institute of Chartered Accountants ofIndia as well as Listing Regulations as prescribed by the Securities and Exchange Board ofIndia (SEBI). The Financial Statements of Hong Kong based subsidiary Responsive IndustriesLimited and Axiom Cordages Limited. are prepared in accordance with the Small and Mediumsized Entity Financial Reporting Standard (SME-FRS) issued by the Hong Kong Institute ofCertified Public Accountants (HKICPA) and in Compliance with the Hong Kong CompaniesOrdinance.
8. CORPORATE GOVERNANCE
The Company has complied with all the mandatory requirements of Corporate Governance. Aseparate report on Corporate Governance and a certificate from M/s. P. P. Shah & Co.
Practicing Company Secretaries regarding compliance with the conditions of CorporateGovernance is given in a separate section and forms part of the Annual Report. Further adeclaration affirming compliance with the code of conduct by all the Board members andsenior management personnel along with certificate under Regulation 17(8) of the SEBIListing Regulations is also given in this Annual Report.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Rajesh Pandey (DIN 00092767) retires by rotation at theensuing Annual General Meeting and being eligible offers himself for re-appointment.Accordingly his re-appointment forms part of the notice of the ensuing Annual GeneralMeeting.
Mr. Rishab Agarwal is appointed as Managing Director of the Company w.e.f. 02 May 2018by the Board of Directors of the Company for a term of 5 years subject to the approval ofshareholders. Accordingly his appointment forms part of the Notice of this ensuing AnnualGeneral meeting. Mrs. Rohini Agarwal is appointed as Additional Director on the Boardw.e.f. 02 May 2018 by the Board of Directors of the Company. Accordingly her appointmentas a Director of the Company forms part of the Notice of this ensuing Annual Generalmeeting of the Company.
Mr. Jagannadham Thunuguntla and Mrs. Jyoti Rai were appointed as Independent Directorat the Annual General Meeting held on 22nd September 2015 for a period of 3 years andtheir tenure expires in this ensuing Annual General meeting. They are proposed to bere-appointed as an Independent Director for another term of five consecutive years for aterm up to the conclusion of the 41st Annual General meeting to be held in the calendaryear 2023. Accordingly their re-appointment forms part of the notice of the ensuingAnnual General Meeting.
Mr. S.S. Thakur was reappointed as Independent Director at the Annual General meetingheld on 29th September 2017 for another term of 5 consecutive years. All IndependentDirectors have given declaration that they meet the criteria of independence as laid downunder Section 149 (6) of the Companies Act 2013 and SEBI Listing Regulations. During theyear non executive directors of the Company had no pecuniary relationship or transactionswith the Company.
10. DIRECTORS RESPONSIBILITY STATEMENT
Your Directors state that:
(a) in the preparation of the annual financial statements for the year ended March 312018 the applicable accounting standards have been followed and there are no materialdepartures;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2018 and of the Profit& loss of the Company for the year ended on that date;
(c) the Directors have taken proper and sufficient care for maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 f<safeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the annual accounts have been prepared on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and operating effectively; and
(f) the Directors have devised proper system to ensure compliance with the provisions oall applicable laws and that such system are adequate and operating effectively.
11. PLEDGE OF SHARES
None of the equity shares of the Directors of the Company are pledged with any banks orfinancial institutions.
12. PUBLIC DEPOSITS
The Company has not accepted or renewed any amount falling within the purview ofprovisions of Section 73 of the Companies Act 2013 ("the Act") read with theCompanies (Acceptance of Deposit) Rules 2014 during the year under review. Hence therequirement for furnishing details of deposits which are not in compliance with theChapter V of the Act is not applicable.
13. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT 2013
No material changes and commitments which could affect the Companys financialposition have occurred between the end of the financial year of the Company and date ofthis report.
14. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion & Analysis Report for the year under review is attached whicforms part of the Annual Report.
15. PROPOSAL OF EMPLOYEE STOCK OPTION SCHEME:
Equity based compensation is considered to be an integral part of employee compensationacross sectors which enables alignment of personal goals of the employees withorganizational objectives by participating in the ownership of the Company through sharebased compensation scheme/plan. Your Company believes in rewarding its employees includingDirectors of the Company for their continuous hard work dedication and support which hasled the Company on the growth path.
The Company intends to implement the RESPONSIVE INDUSTRIES LIMITED Employees StockOption Scheme 2018 (RESPONSIVE ESOS 2018) with a view to attract and retain key talentsworking with the Company by way of rewarding their performance an
and had replaced the earlier Securities and Exchange Board of India (Employee StockOption Scheme and Employee Stock Purchase Scheme) Guidelines 1999 (SEBI ESOPGuidelines 1999). All listed companies having existing schemes to which the SEBIRegulations apply were required to comply with the same in their entirety.
Accordingly it is proposed to adopt a new scheme under the SEBI SBEB Regulationsunder the name and style RESPONSIVE ESOS 2018 for the purposes of grantingoptions to the Employees/Directors of the Company and its subsidiaries as applicable.
The Resolutions contained in the AGM notice to the Members seeks their approvalto authorise the Board of Directors of the Company to create issue offer and allotequity shares from time to time to employees/Directors of the Company and itssubsidiaries under this Scheme.
A copy of the proposed RESPONSIVE ESOS Scheme 2018 will also be available forinspection at the Registered Office and Corporate Office of the Company between 10:00 a.m.to 1:00 p.m. on all working days up to the last date of the AGM. Also main feature of ESOPare also included in the explanatory Statement to the notice of AGM.
16. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
In accordance with the provisions of Section 134 of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 required information relating to the conservation ofenergy technology absorption and foreign exchange earnings and outgo is given in the"Annexure A" to the Directors Report.
Pursuant to intimation from the promoters the names of the promoters & entitiescomprising the "Group" are disclosed in the Annual report for the purpose ofSEBI (Substantial Acquisition of Shares & Takeovers) Regulations 2011 in "AnnexureB".
18. CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company has developed a CSR Policy which indicates the activities to be undertakenby the Company as specified in Schedule VII of the Companies Act 2013. The CSR Policy hasbeen uploaded on the website of the Company. The Annual Report on CSR activities isannexed as "Annexure C" and forms a part of this Report.
19. EXTRACT OF ANNUAL RETURN
20.1 Statutory Auditors
Pursuant to the provisions of Section 139 of the Act and rules framed thereunder M/s.SGCO & Co. LLP Chartered Accountants (Firm Reg. No: 112081W/W100184) were appointedas Statutory Auditors of the Company from the conclusion of the Thirty Fifth AnnualGeneral Meeting (AGM) of the Company held on 29th September 2017 till the conclusion ofAGM to be held in the calendar year 2022 subject to ratification of their appointment atevery AGM. Accordingly resolution seeking members approval for ratification of theappointment of SGCO & Co. LLP Chartered Accountants as Statutory Auditors forms partof the Notice convening the Annual General Meeting.
They have confirmed their eligibility and submitted the Certificate in writing thattheir appointment if made would be within the prescribed limit under the Act and theyare not disqualified for appointment.
The Auditors Report for the f.y. ended 31st March 2018 does not contain anyqualification reservation or adverse remark and is prepared as per "Ind AS"
20.2 Cost Auditors
Pursuant to Section 148 of Companies Act 2013 read with Companies (Cost Records andAudit) Rules 2014 as amended from time to time on recommendations of Audit Committeeyour Directors has appointed M/s. S.K. Agarwal & Associates to audit the cost accountsof the Company for the financial year 2018-19.
A Resolution seeking members approval for the remuneration payable to the CostAuditor forms part of the Notice convening the Annual General Meeting.
20.3 Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the rules madethereunder the Company has appointed M/s. P.P. Shah & Co. a firm of CompanySecretaries in Practice to undertake the Secretarial Audit of the Company. The SecretarialAudit Report in Form MR-3 is annexed herewith as "Annexure E". It doesnot contain any qualification reservation or adverse remark except for Non-appointment ofChief Financial Officer (CFO) and partial spending of amount towards Corporate SocialResponsibility (CSR) by the Company.
As per the provision of section 203(1) of the Companies Act 2013 the Company isrequired to appoint CFO. The Company is in process of finding suitable person as its ChiefFinancial Officer. The Company has been working on identifying the other projects apartfrom already taken for carrying out CSR activities; this has taken more than the estimatedtime looking at the total spending requirement.
21. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the year under review werein the ordinary course of business and on arms length basis. The Company has notentered into any contract/arrangement/transaction with related parties which could beconsidered material in nature. All Related Party Transactions are placed before the AuditCommittee and Board for approval. Prior omnibus approval of the Audit Committee isobtained for the transactions
which are of a foreseen and repetitive in nature. Your Directors draw attention of themembers to note no.33 to the standalone financial statement which sets out related partydisclosures.
The Company has developed a Related Party Transactions Policy which has been uploadedon the website of the Company and web-link thereto has been provided in the CorporateGovernance report.
22. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013.
The Company has set up an Internal Complaints Committee (ICC) for providing redressalmechanism pertaining to Sexual harassment of women employees at workplace. The Company hasnot received any compliant pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
23. RISK MANAGEMENT
The Company has laid down the procedures to inform the Board about the risk assessmentand minimization procedures and the Board has formulated Risk Management Policy to ensurethat the Board its Audit Committee and its management should collectively identify therisks impacting the Company's business and document their process of risk identificationrisk minimization risk optimization as a part of a risk management policy/ strategy. Atpresent there is no identifiable risk which in the opinion of the Board may threaten theexistence of the Company.
24. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isalso defined. To maintain its objectivity and independence the Internal Audit functionreports 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 and its subsidiaries. Based on thereport of internal audit function corrective action are undertaken in the respectiveareas and thereby strengthen the controls. Significant audit observations and correctiveactions thereon are presented to the Audit Committee of the Board.
Internal Financial Control
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors including audit of internal financial controls over financialreporting and the reviews performed by management and the audit committee the Board isof the opinion that the Companys internal financial controls were adequate andoperating effectively as at March 31 2018.
During the year under review no material or serious observation has been observed forinefficiency or inadequacy of such controls.
25. VIGIL MECHANISM / WHISTLE BLOWER POLICY
In line with the best Corporate Governance practices Company has put in place a systemthrough which the Directors and employees may report concerns about unethical behaviouractual or suspected fraud or violation of the Company's Code of Conduct & Ethicswithout fear of reprisal. The employees and directors may report to the Compliance officerand have direct access to the Chairman of the Audit Committee. The Whistle blower Policyis placed on the website of the Company.
26. BOARD MEETINGS
During the year 4 (Four) Board Meetings were held on 30th May 2017 10th August 201714th November 2017 and 14th February 2018. The intervening gap between the meetings waswithin the period prescribed under the Companies Act 2013.
As stipulated by code of Independent Director under the Companies Act 2013. A separatemeeting of the Independent Director of the Company was held on 14th February 2018 toreview the performance of Non Independent Directors Chairman and the Board as a whole.
27. AUDIT COMMITTEE
The Board has well-qualified Audit Committee with majority of Independent Directorsincluding Chairman. As on date it comprises of Mr. S. S. Thakur - Chairman of CommitteeMr. Rajesh Pandey Mr. Jagannadham Thunuguntla and Ms. Jyoti Rai as member. The CompanySecretary of the Company acts as a Secretary of the Committee.
28. NOMINATION & REMUNERATION POLICY
The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence of a Director and policy relating toremuneration for Directors Key Managerial Personnel and other employees. The detail ofthe same has been disclosed in the Corporate Governance Report.
29. BOARD EVALUATION
Pursuant to the provisions of the Companies Act 2013 and SEBI Listing Regulationsperformance evaluation of Board and that of its Committees and Individual Directors wascarried out. A structured questionnaire was prepared after taking into considerationinputs received from the Directors covering various aspects of the Boardsfunctioning such as adequacy of the composition of the Board and its Committees Boardculture execution and performance of specific duties obligations and governance. Aseparate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment participation by all directors anddeveloping consensus amongst the directors for all decisions. The Chairman was evaluatedon the key aspects of his role.
In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a whole and performance of the Chairman wasevaluated taking into account the view of the Executive Directors and Non-ExecutiveDirectors.
30. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators/Courts/tribunalswhich would impact the going concern status of the Company and its future operations.
31. PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES
During the year under review the Company has not given any loan or guarantee orprovided security in connection with loan to any other body corporate or person asspecified in Section 186 of the Companies Act 2013. For information pertaining toInvestments kindly refer notes to financial statements.
32. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURESAS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION OF MANAGERIAL PERSONNEL) RULES2014
There were no employees of the Company drawing remuneration exceeding the specifiedlimit during the year under consideration hence the details prescribed under Section197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are not applicable.
Details pertaining to remuneration as required under Section 197 (12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment & Remuneration ofManagerial Personnel) Rules 2014:
(i) The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year 2017-18 and
(ii) The percentage increase in remuneration of each Director and Company Secretary inthe financial year 2017-18.
* Details not given for Mr. Rajesh Pandey as he did not receive any remuneration fromthe Company.
** Remuneration of Ms. Alpa Ramani is for the month of April and May 2017.
She resigned w.e.f 30 May 2017.
(iii) The Median Remuneration of employees of the Company for the financial year2017-18 is Rs. 0.32 Million and there was a decrease of 3.03 % compared to theprevious financial year.
(iv) The number of permanent employees on the rolls of the Company is 264 for thefinancial year ended March 31 2018.
(v) Average percentage decrease in the salaries of employees other than the keymanagerial personnel for the financial year 2017-18 was approx. 4.30%. The decrease in theremuneration of key managerial personnel was approx. 31.23%. The remuneration isdetermined based on the performance of the employees of the company.
(vi) The remuneration of Whole-Time Director of the Company does not include anyvariable component. The key parameters for the variable component of remuneration availedby Independent Non-Executive Directors is based on their attendance and contribution atthe Board and Committee Meetings.
(vii) It is hereby affirmed that the remuneration is as per the Remuneration Policy ofthe Company.
34. HUMAN RESOURCES
The industrial relations at the manufacturing facilities of your Company have beencordial during the year. Employees are considered to be team members being one of the mostcritical resources in the business which maximize the effectiveness of the Organization.Human resources build the Enterprise and the sense of belonging would inculcate the spiritof dedication and loyalty amongst them towards strengthening the Companys Policesand Systems. The Company maintains healthy cordial and harmonious relations with allpersonnel and thereby enhancing the contributory value of the Human Resources.
35. ENVIRONMENT AND SAFETY
The Company is conscious of the importance of environmentally clean and safeoperations. The Companys policy requires conduct of operations in such a manner soas to ensure safety of all concerned compliances of environmental regulations andpreservation of natural resources.
36. 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 achieving highlevels of operating performance and cost competitiveness consolidating and building forgrowth enhancing the productive asset and resource base and nurturing overall corporatereputation. Your Company is also committed to creating value for its other stakeholders byensuring that its corporate actions positively impact the socio-economic and environmentaldimensions and contribute to sustainable growth and development.
Your Directors gratefully acknowledge the support given by the Customers DealersDistributors Suppliers Bankers various departments of the Central and StateGovernments Local Authorities and members of the Company.
Your Directors would further like to record their appreciation for the unstinted effortput by all Employees of the Company during the year.
ANNEXURE TO THE DIRECTORS REPORT
Conservation of Energy Technology Absorption and Foreign Exchange Earnings & OutgoPursuant to Provisions of Section 134 of the Companies Act 2013 read with the Companies(Accounts) Rules 2014.
A) CONSERVATION OF ENERGY:
a) Energy conservation measures taken N.A.
b) Additional investments proposal if any being implemented for reduction ofconsumption
of energy N.A.
c) Impact of the measures at (a) and (b) above for reduction of energy consumption and
consequent impact on the cost of production of goods N.A.
d) Total energy consumption
Persons constituting group coming within the definition of "Group" for thepurpose of Regulation 10 (a) of the Securities and Exchange Board of India (SubstantialAcquisition of Shares and Takeovers) Regulations 2011 include the following: