You are here » Home » Companies » Company Overview » Rishi Techtex Ltd

Rishi Techtex Ltd.

BSE: 523021 Sector: Industrials
NSE: RISHIPACK ISIN Code: INE989D01010
BSE 09:52 | 21 May 40.00 -0.30
(-0.74%)
OPEN

40.05

HIGH

40.05

LOW

40.00

NSE 05:30 | 01 Jan Rishi Techtex Ltd
OPEN 40.05
PREVIOUS CLOSE 40.30
VOLUME 698
52-Week high 69.75
52-Week low 35.15
P/E 8.55
Mkt Cap.(Rs cr) 30
Buy Price 40.00
Buy Qty 78.00
Sell Price 41.95
Sell Qty 25.00
OPEN 40.05
CLOSE 40.30
VOLUME 698
52-Week high 69.75
52-Week low 35.15
P/E 8.55
Mkt Cap.(Rs cr) 30
Buy Price 40.00
Buy Qty 78.00
Sell Price 41.95
Sell Qty 25.00

Rishi Techtex Ltd. (RISHIPACK) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting their 34th Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended March 31 2018.

FINANCIAL SUMMARY OR HIGHLIGHTS/PERFORMANCE OF THE COMPANY

(Rs. in lakhs)
2017-18 2016-17
Total Income 6789.12 6406.98
Profit before Tax 315.58 289.32
Provision for Tax 62.67 44.33
Profit after Tax 252.91 244.99
Total Comprehensive Income for the period 240.01 244.31

DIVIDEND

To strengthen the cash flow of the Company the Directors decided not to declare anydividend in the year.

RESERVES

As on March 31 2018 the reserves and surplus has increased to ` 1489.98 lakhs ascompared to ` 1238.82 lakhs achieved during the last year.

COMPANY'S WORKING DURING THE YEAR

The company earned total income of ` 6789.12 lakhs as compared to ` 6406.98 earned inthe previous year showing increase of 5.63%. The operations during the year have resultedin a profit of ` 252.91 lakhs.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

During the year there are no material changes and commitments if any affecting thefinancial position of the company which have occurred between the end of the financialyear of the company to which the financial statements relate and the date of the report.

SIGNIFICANT AND MATERIAL ORDERS

There have been no significant and material orders passed by the Regulators or Courtsor Tribunals impacting the going concern status and the Company's operations in future.

ADOPTION OF INDIAN ACCOUTING STANDARD (IND AS)

Your Company has adopted Indian Accounting Standards ("IND AS") pursuant toMinistry of Corporate Affairs Notification dated 16th February 2015 notifying theCompanies (Indian Accounting Standard) Rules 2015. Accordingly for the first time thefinancial statements for the year under report have been prepared in compliance with INDAS. You may refer Note 41 of Standalone Financial Statement forming part of the AnnualReport for an explanation of how the transition from previous GAAP to IND AS has affectedfinancial position performance and cash flow of the Company.

SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

The Company has no subsidiary or joint venture or associate company.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Statutory Auditors of the Company in the ‘Annexure B' to the Audit Reporthave formed a disclaimer of opinion about the Internal Financial Control over financialreporting and its efficiency.

In the light of the said disclaimer of opinion we would like to state as under: TheCompany has an Internal Control System commensurate with the size scale and complexityof its operations. The Company has an Internal Auditor who reports on all internal auditfunctions as to maintain monitor and evaluate the efficiency and adequacy of internalcontrol system in the Company. Based on the report of the internal auditor; the managementundertakes corrective actions; as and when required; in their respective areas tostrengthen the internal financial control.

AUDIT OBSERVATIONS AND EXPLANATION BY THE BOARD

The Statutory Auditors of the Company in their Audit Report for the financial yearended 31st March 2018 have qualified their opinion to the extent of the matter describedin the basis for qualified opinion paragraph in the said audit report with regard tooverdue trade receivables as on 31st March 2018. The basis for qualified opinion as statedby the Statutory Auditors in their above referred Audit Report is appended herein below:

Basis for Qualified opinion:

"The confirmations related to overdue trade receivables amounting to ` 3.91 croreshave not been received by the Company. Accordingly no provision of ` 3.91 crores has beenmade for such receivables in the enclosed financial results. This has resulted in theoverstatement of Trade receivables by ` 3.91 crores and overstatement of profit by ` 3.91crores." n the light of the said basis for qualified opinion the managementI wouldlike to state as under: The trade receivables outstanding as on 31st March 2018 are goodand recoverable. The necessary letters for balance confirmation have already beenforwarded by the Company to the respective debtors and the said balances are neitherdisputed nor denied by them. In view of the same the Management has reason to believe thatthe trade receivables outstanding as on 31st March 2018 as per the books of accounts ofthe Company are true correct and recoverable. From the outstanding trade receivables ason 31st March 2018; an amount of ` 1.12 crores have already been realized in the normalcourse of business till the date of this report.

REPORTING OF FRAUDS BY AUDITORS

During the year under review neither the statutory auditors nor the secretarialauditor has reported to the audit committee under Section 143 (12) of the Companies Act2013 any instances of fraud committed against the Company by its officers or employeesthe details of which would need to be mentioned in the Board's Report.

DEPOSITS

The details relating to deposits covered under Chapter V of the Act-a) acceptedduring the year; : 10.00 Lakhs b) remained unpaid or unclaimed as at the end of the year;Nil c) whether there has been any default in repayment of deposits or payment of interestthereon during the year and if so number of such cases and the total amount involved; (i)at the beginning of the year - Nil (ii) maximum during the year - Nil (iii) at the end ofthe year - Nil The details of deposits which are not in compliance with the requirementsof Chapter V of the Act Nil

AUDITORS Statutory Auditor:

M/S. B. D. Jokhakar & Co. Chartered Accountants Mumbai (FRN: 104345W) who wereappointed as the Statutory Auditors of the Company at its 33rd Annual General Meeting havetendered their resignation vide letter dated 06th August 2018 ; due to their preoccupationin other professional work as stated therein. The said letter was received by the Companyon 08th August 2018. The Board of Directors at their meeting held on 16th August 2018appointed M/s. Attar & Associates Chartered Accountants Thane Maharshtra (FRN:116443W) as Statutory Auditors to fill the casual vacancy caused due to the resignationof M/S. B. D. Jokhakar & Co. from 16th August 2018 to the conclusion of 34th AnnualGeneral Meeting subject to the approval of members. M/s. Attar & AssociatesChartered Accountants Thane Maharashtra are eligible for appointment and have confirmedthat their appointment if approved will be in compliance with Section 141 of theCompanies Act 2013 and other applicable provisions. Your Board recommends the appointmentof M/S. Attar & Associates Chartered Accountants Thane Maharashtra (FRN : 116443W)as Statutory Auditors for a term of 5 financial years commenced from current financialyear and to hold office from the conclusion of 34th Annual General Meeting till theconclusion of the 39th Annual General Meeting of the Company.

As per the provisions of the Companies Act 2013 the Auditors Report on FinancialStatements for the year ended 31st March 2018 as issued by the Statutory Auditor M/S B. D.Jokhakar & Co. Chartered Accountants forms part of this Annual Report.

SHARE CAPITAL

During the year the 304000 equity shares of ` 10/- each were issued on part conversionof warrants at price of ` 17/- per share to promoter and promoter group. So as on 31stMarch 2018 the share capital of the Company was ` 739.10 lacs. Following two directorsare holding shares of the Company: Mr. Abhishek Patel Mr. Pranav Patel

EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure A".

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE_EARNINGS AND OUTGO

The information required to be disclosed is set out in "Annexure B"

DIRECTORS:

A. Changes in Directors and Key Managerial Personnel

There are no changes in the Board of directors of the Company. As on March 31 2018 theBoard of the Company comprises of four directors viz. Mr. Abhishek Patel ManagingDirector one Non-Executive Director and two Independent Directors.

B. Declaration by an Independent Director(s)

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 read with SEBI(LODR) Regulations 2015.

C. Formal Annual Evaluation

Pursuant to the provisions of the Companies Act 2013 and LODR the Board has carriedout the annual performance evaluation of its own performance the Directors individuallyas well as the evaluation of the working of its Audit Nomination and Remuneration andother Committees. A structured questionnaire was prepared after taking into considerationinputs received from the Directors covering various aspects of the Board's functioningsuch as adequacy of the composition of the Board and its Committees Board cultureexecution and performance of specific duties obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board. The performance evaluation of the ndependentIDirectors was carried out by the entire Board. The performance evaluation of the Chairmanwas carried out by the Independent Directors who also reviewed the performance of theSecretarial Department. The Directors expressed their satisfaction with the evaluationprocess.

FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS

During the year noIndependent director were appointed. All Independent Directorsalready on the Board are familiar with the organization.

MEETINGS OF THE BOARD OF DIRECTOR

As on March 31 2018 the board consists of four Directors out of which one is promoterdirector one non-executive director and two independent directors. There is no NomineeDirector on the Board. No Director of the Company is either member of more than tencommittees and/ or Chairman of more than five committees across all Companies in which heis Director and necessary disclosures to this effect has been received by the Company fromall the Directors. During the year in all five Board Meetings were held i.e. on 30th May2017 27th June 2017 12th September 2017 8th December 2017 and 12th February 2018.The time gap between any two meetings was not more than 120 days.

The details of Directors and their attendance record at Board Meetings held during theyear and at the last Annual General Meeting number of other directorships andchairmanships/memberships of committees and other Committees of the Company is givenbelow:

Name Category Other director- Ships in public limited Cos Committee Memberships/ Chairmanship (including RTL)# Attendance At Board Meetings Attendance at AGM Shareholding of Non-Executive Directors
Mr. Abhishek Patel Promoter/ Executive Nil 2 5 Yes N. A.
Mr. Arvind Nopany Non-Promoter/ Independent Nil 3 5 No Nil
Mr. Pranav Patel Non-Promoter/ Independent Nil 3 5 No 1767
Mrs. Sheela Ayyar Non-Promoter/ Independent 1 3 5 No Nil

# while considering the memberships/chairmanships only Audit Committee and Shareholdersand Investor Grievance Committee are considered.

Audit Committee

The Company has a Qualified Audit Committee as per the provisions of the Companies Act2013 and LODR. The composition quorum powers role and scope are in accordance withSection 177 of the Companies Act 2013 and the provisions of Regulation 18 of the ListingRegulation. The Committee consists of three Directors Mr. Arvind N. Nopany Mr. AbhishekPatel and Mrs. Sheela Ayyar out of which two are independent Directors. Mrs. Sheela Ayyaris the chairperson of the Committee.

The terms of reference to the Committee broadly are as under

1 Reviewing the quarterly and annual financial statements before submission to theBoard.

2 Recommending to the Board the appointment reappointment of the statutory auditorsand fixing their remuneration.

3 Reviewing the internal control system and internal audit function.

4 Discussing with internal auditors failure in internal control system andrecommending measures for improvement.

5 Discussing with statutory auditors about the nature and scope of audit and post auditdiscussions on any area of concern.

6 To look into any defaults in payment to depositors shareholders and creditors.

The Committee met on 29th May 2017 to consider the Annual Accounts for the year ended31.03.2017 on 26th June 2017 to consider the recommendation of appointment of StatutoryAuditor on 12th September 2017 to consider quarterly unaudited results for the quarterended 30.06.2017on 8th December 2017 to consider the quarterly unaudited results for thequarter ended 30.09.2017 and on 12th February 2017 to consider the nine months financialresults. The Meetings were attended by all the Members of the Committee.

Nomination & Remuneration Committee

The Company has a Nomination & Remuneration Committee as per the provisions of theCompanies Act 2013 and LODR. The Nomination & Remuneration committee consists ofthree Directors Mr. Pranav Patel Mr. Arvind N. Nopany and Mr. Abhishek Patel out ofwhich two are independent Directors. Mr. Arvind Nopany is chairperson of the Committee.

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. Remuneration Committee approves the remuneration payable to the ManagingDirector and senior executives. The policy is available on the website of the Company.

The terms of reference to the Committee broadly are as under: The Board has framed theRemuneration and Nomination Committee Charter which ensure effective Compliance of Section178 of the Companies Act 2013 and Regulation 19 of Listing Regulation which are asfollows:

Reviewing the overall compensation policy service agreements and other employmentconditions of Managing/Whole-time Director(s) and Senior Management (one level below theBoard):

• to help in determining the appropriate size diversity and composition of theBoard;

• to recommend to the Board appointment/reappointment and removal of Directors;

• to frame criteria for determining qualifications positive attributes andindependence of Directors;

• to recommend to the Board remuneration payable to the Directors (while fixingthe remuneration to Executive Directors the restrictions contained in the Companies Act2013 is to be considered);

• to create an evaluation framework for Independent Directors and the Board;

• to provide necessary reports to the Chairman after the evaluation process iscompleted by the Directors;

• to assist in developing a succession plan for the Board; to assist the Board infulfilling responsibilities entrusted from time-to-time;

• delegation of any of its powers to any Member of the Committee or the ComplianceOfficer.

The Managing Director is paid remuneration of ` 600000/- and is also entitled to theperquisits such as PF Gratuity and LTA.

Non-Executive Directors are paid ` 2500/- per Board Meeting attended and Rs. 2500/- perAudit Committee Meeting attended. No stock options has been issued to any Directors.

Total Remuneration received by Mr. Abhishek Patel Managing Director of the Companyduring the year 2017-2018 amounts to ` 72 lacs (excluding PF and Gratuity).

Stakeholders Relationship Committee

The Company has a Stakeholders Relationship Committee as per the provisions of theCompanies Act 2013 and LODR. The Committee consists of three directors out of which twoare independent Directors. Mr. Arvind Nopany is the Chairman of the Committee. TheCommittee has been constituted to look into redressal of shareholders complaints andcorrespondence with SEBI and the Stock Exchange.

Details of shareholders' complaints received solved and pending share transfers: Thereare no complaints pending with the company.

Vigil mechanism for directors and employees_

The Company has formulated Whistle Blower Policy as per the SEBI (LODR) Regulations2015 to enable the employees to raise any concern query and to deal with instance offraud and mismanagement. The Company has a whistle blower policy to deal with instances offraud and mismanagement if any. The Policy ensures that strict confidentiality ismaintained whilst dealing with concerns and also that no discrimination will be meted outto any person for a genuinely raised concern.

Risk Management Policy

The Company has developed a very comprehensive risk management policy under which allkey risks and mitigation plans are compiled into a Risk Matrix. The same is reviewedquarterly by senior management and periodically also by the Risk Management Committee ofthe Board.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

The Company has taken adequate care and caution in line with the requirements of TheSexual Harassment of Women at the Workplace (Prevention Prohibition & Redressal) Act2013. The Company has not received any sexual harassment complaint during the year2017-2018.

LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 CONTRACTS OR ARRANGEMENTS WITHRELATED PARTIES

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business.

Pursuant to section 134 read with rule of the Companies (Accounts) Rules 2014 thereare no transactions to be reported under section 188(1) of the Companies Act 2013. Therelated party policy as approved by the Board is available on the website of the Company.The disclosure in Form AOC-2 as per the provisions of Section 188 of the Companies Act2013 and rules made there under is not required since there are no material contracts orarrangements entered into by the Company as per the Policy of Materiality framed formingpart of Related Party Transaction policy of the Company.

Related Party Transactions as required under Accounting Standards are reported underthe notes to the financial statements.

The policy for determining material subsidiary and policy for dealing with relatedparty transaction is available on the website of the Company www.rishitechtex.com.

PARTICULARS OF EMPLOYEES

The Statement containing particulars of employees as required and the ratio ofremuneration of Managing Director to the median employees' remuneration and other detailsin terms of Section 197(12) of the Companies Act 2013 read with Rule 5(1) and (2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part ofthis report as "Annexure C".

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Sudhanwa S. Kalamkar & Associates Company Secretary in practice toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Reportis annexed herewith as "Annexure D".

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to provisions of the Companies Act 2013 it is not applicable to the Company.

STATEMENT ON SALIENT FEATURES OF FINANCIAL STATEMENT

Statement on salient features of Financial Statement in Form AOC-3 is not requiredsince Entire Annual Report is being sent to all Shareholders in the manner specified underRule 11 of the Companies (Accounts) Rules 2014.

MANAGEMENT DISCUSSION AND ANALYSIS

The management discussion and analysis on the operations of the Company is provided ina separate section and forms a part of this report.

CORPORATE GOVERNANCE REPORT

As per Regulation 27 (2) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 every listed entity is required to submit on a quarterly basis acompliance report on corporate governance to Stock Exchange(s) where its securities arelisted within fifteen days from close of the quarter.

Further the Regulation 15 (2) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 grants specific exemption from the applicability of regulations 27 tosuch entities whose paid up equity share capital does not exceed Rs. 10 Crores and networth does not exceed Rs. 25 Crores as on the last day of the previous financial year.

Since your company meets the exemption criteria as specified above the CorporateGovernance provisions as per regulation 27 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 are not applicable.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(3)(c) of the Companies Act 2013 and to theI best of theirknowledge belief and according to the information and explanations obtained by them yourDirectors make the following statements that :

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENTS

The Directors place on record their appreciation for the efficient and loyal servicesrendered by the Staff and workmen also acknowledge the help support and guidence fromthe various Statutory Bodies Government and Semi-Government Organisations and thankorcustomers suppliers investors for their continues support during the year. The Directorsalso acknowledge the help support and guidence received from Canara Bank.

By Order of the Board of Directors
For Rishi Techtex Ltd.
Place: Mumbai Abhishek Patel
Date: 16.08.2018 (Chairman of the Board)

Annexure B

The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:

A. CONSERVATION OF ENERGY

The Company has initiated various steps for conservation of energy. The Company hasreplaced old motors and connections to prevent power leakage. Additionally for heatdissemination better insulators were installed and recycling units were refurbished. Oldcomputer systems and machinery were replaced for energy efficient operations. Bypreventing heat loss the company saved on energy.

B. TECHNOLOGY ABSORPTION

The company has been constantly improving the quality of the products to suit therequirements of customers. The Company is in the process of developing its in-houseR&D Lab and upgrade the machines and instruments accordingly. The Company hasinstalled new Machines as well as modified existing machines to improve the quality of itsproducts.

TECHNOLOGY ABSORPTION ADAPTION AND INNOVATION

The Company increasing its focus of the investments in the packtech verticle tominimize human intervention to increase the efficiency of the process.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year the earning in foreign exchange on Export of bags and fabrics amountsto ` 1000.96 lakhs. Expenditure in foreign currency on account of Travelling is ` 2.51lakhs and on account of spares and components is ` 4.27 Lakhs. There was no import ofCapital Goods.

Annexure C

1. The ratio of the remuneration of each director to the median employees' remunerationfor the financial year:

Name Designation Ratio
Mr. Abhishek Patel Managing Director 44.44:1

For this purpose sitting fees paid to non-executive directors have not beenconsidered.

2. The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year: Theremuneration of Managing Director has increased by 50 percentages. The remuneration ofChief Financial Officer has increased by 47.48 percentages.

There is no change in the remuneration of the Company Secretary in the financial year.

3. The percentage increase in the median remuneration of employees in the financialyear: The increment in the median remuneration of the employees is around 10 Percentage.

4. The Number of permanent Employees on the rolls of the Company: The numbers ofon-rolls permanent employees are 192 (Excluding MD)

5. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and exceptionalcircumstances for increase in the managerial remuneration if any: The average percentileincrease in the salaries of employees other than Managerial Personnel is 12.25%.

6. Affirmation that the remuneration is as per the remuneration policy of the Company:Yes