Your Directors find pleasure in presenting the 23rd Annual Report of RushilDecor Limited (the "Company") together with the audited financial statements forthe year ended March 312017.
The financial performance of your Company for the year ended 31st March 2017 issummarized below:
(Rupees in Lakhs)
|Particulars ||2016-17 ||2015-16 |
|Net Revenue from Operations ||30595.18 ||29675.61 |
|Profits before Interests Depreciation Extra-Ordinary Items & Tax ||5057.24 ||3619.48 |
|Less: Financial Costs ||1036.35 ||1160.69 |
|Profit before Depreciation & Tax ||4020.89 ||2458.79 |
|Less: Depreciation & Amortization Expenses ||687.81 ||648.86 |
|Profit Before Tax ||3333.08 ||1809.93 |
|Provision for Tax: || || |
|Current Tax ||721.33 ||395.19 |
|Deferred Tax ||158.99 ||668.03 |
|Short Provision of Earlier Years ||-0.58 ||31.81 |
|Profit After Tax ||2453.34 ||714.90 |
|Add: Balance of Profit Brought Forward from previous year ||2463.13 ||1834.89 |
|Profit available for appropriation ||4916.47 ||2549.79 |
|Appropriation: || || |
|Interim Dividend Paid || ||72.00 |
|Tax on Interim Dividend ||- ||14.66 |
|Final Dividend Proposed ||72.00 ||- |
|Tax on Final Dividend Proposed ||14.66 ||- |
|Balance Carried over to the Balance Sheet ||4829.81 ||2463.13 |
|Basic & Diluted Earnings Per Share ||17.04 ||4.96 |
COMPANY'S FINANCIAL PERFORMANCE
Net revenue from operations increased to Rs. 30595.18 Lacs as against Rs. 29675.61 Lacsin the previous year showing a growth of 3.10%.
The Profit before Tax for the current year is Rs. 3333.08 lacs as against Rs. 1809.93lacs in the previous year showing a growth of 84.16%.
The Profit after Tax (PAT) for the current year is Rs 2453.34 lacs as against theprofit of Rs. 714.90 lacs in the previous year. The growth in PAT of current financial ismainly driven by increase in net revenue from sales of MDF Boards and softening of inputprices during the year.
The Company has inked a MOU as on 28th January 2017 with the State Government of AndhraPradesh during the 2nd sunrise Andhra Pradesh Investment Meet & 23rd edition of CIIPartnership Summit. As per MOU Company agreed for establishment of "Thin & ThickMDF Board Manufacturing Facility" in Andhra Pradesh.
Company has also planned to establish New Project of WPC Board. It belongs to the WoodPlastic Composite board. The final Product is generally used as raw material in FurnitureIndustry. Presently about 45% of the domestic demand for wood plastic composites is metthrough imports which is dominated by China. So there is huge scope to capture themarket.
Company is also planning to make expansion of the laminate sheet business with biggersize of laminate sheets. The location of the same will be at or around the existing plantsof laminate sheet in Gujarat.
Further LAOS Government has made strict rules regarding wood management wood cuttingwood relocation and wood business in LAO PDR. Still there is no new regulation whichallows conducting wood business at LAOS at this moment so at last Company decided that itwill not wait further and has put off the idea to establish the business in the CountryLAO PDR.
The Directors have recommended a final dividend of Rs. 0.50 (Fifty Paisa only) perequity share (5% on face value of Rs. 10/-) for the Financial Year ended March 31 2017subject to approval of the shareholders at the ensuing AGM. The final dividend on equityshares if approved by the members would involve a cash outflow of Rs. 86.66 Lacsincluding dividend distribution tax thereon for an amount of Rs. 14.66 Lacs. In the lastyear ended March 31 2016 total dividend declared and paid was Rs. 1.00 (Rupees One only)per share of Rs. 10/- each including interim dividend of Rs. 0.50 per share. Thus thetotal dividend on equity shares for the Financial Year 2015-16 was aggregate Rs. 173.32Lacs including dividend distribution tax thereon of Rs. 29.32 Lacs.
Company has not proposed any amount to be carried to General Reserves.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Kaushikbhai J. Thakkar Executive Director is liable to retire by rotation at theensuing AGM pursuant to Section 152 and other applicable provisions if any of theCompanies Act 2013 read with the Companies (Appointment and Qualification of Directors)Rules 2014 (including any statutory modification(s) or re-enactment(s) thereof for thetime being in force) and being eligible has offered himself for re-appointment.
Appropriate resolution for his re-appointment is being placed for the approval of theshareholders of the Company at the ensuing AGM. The brief resume of the Director and otherrelated information has been detailed in the Notice convening the ensuing AGM of theCompany. The Directors recommend his re-appointment for your approval.
The Board of Directors at their meeting held on April 29 2017 subject to the approvalof the shareholders at the ensuing AGM considered and approved the re-appointment of ShriKrupeshbhai G. Thakkar as the Managing
Director ofthe Companyfora period of5 (five) years commencing from SeptemberOI 2017.
Further the Board of Directors in the said board meeting held on April 29 2017subject to the approval of the shareholders at the ensuing AGM considered and approvedthe re-appointment of Shri Ghanshyambhai A. Thakkar
as the Whole Time Director ofthe Company for a period of 5 (five) years commencing fromSeptember 012017.
Appropriate resolutions for the reappointment of the aforesaid directors are beingmoved at the ensuing Annual General Meeting which the board recommends for your approval.
As per the provisions of Sections 2(51) and 203 of the Companies Act 2013 read withthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 ShriGhanshyambhai A. Thakkar Whole time Director
Mr. Krupesh G. Thakkar Managing Director Mr. Keyur M. Gajjar Chief ExecutiveOfficer Mr. Vipul S. Vora Chief Financial Officer and Mr. Hasmukh K. Modi CompanySecretary are the key managerial personnel ofthe Company. There has been no change in thekey managerial personnel during the year.
NUMBER OF MEETINGS OF THE BOARD AND ITS COMMITTEES
The details of the meetings of Board of directors and its Committees convened duringthe Financial Year 2016-17 are set out in the Corporate Governance Report which formspart of this Report.
DECLARATION OF INDEPENDENCE
All Independent Directors have given declarations as required under Section 149(7) ofthe Companies Act 2013 that they meet the criteria of independence as provided in Section149(6) of the Companies Act 2013 and qualify to act as Independent Director of theCompany.
EVALUATION OF THE PERFORMANCE OF THE BOARD COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to the provisions of the Companies Act 2013 read with Rules framed thereunder and in compliance with
the requirements of SEBI (LODR) Regulations 2015 the Board has carried out the annualevaluation of its own performance performance of the Directors individually as well asthe performance of the working of its Committees.
A structured questionnaire was prepared after taking into consideration the inputsreceived from the Directors covering various aspects of the Board's functioning such asadequacy of the composition of the Board and its Committees Board culture execution andperformance ofspecific duties obligations and governance.
A separate exercise was also carried out to evaluate the performance of individualDirectors including the Chairman of the Board who were evaluated on parameters such aslevel of engagement and contribution independence of judgment safeguarding the interestof the Company and its minority shareholders etc. The performance evaluation of theIndependent Directors was carried out by the entire Board excluding the director beingevaluated. The performance evaluation of the Chairman and the Non Independent Directorswas carried out by the Independent Directors. The Directors expressed their satisfactionwith the evaluation process.
AUDIT COMMITTEE COMPOSITION
The Audit Committee comprises of Mr. Shankar Prasad Bhagat Independent Director asChairman Mrs. Jingle Thakkar Independent Director Mr. Kaushikbhai J. Thakkar ExecutiveDirector and Mr. Rohitbhai B. Thakkar Independent Director as Members.
All members of the Audit Committee are financially literate and more than one-half ofthe members have expertise in accounting/financial management.
Further as per section 177(8) of the Companies Act 2013 there was no such case in theFinancial Year that any recommendation is made by the Audit Committee and the Board hasnot accepted it.
Your Company has established a Vigil Mechanism/ Whistle Blower Policy which is incompliance with the provisions of Section 177 (10) of the Companies Act 2013 andRegulation 22 of the SEBI (LODR) Regulations 2015. The policy provides for a frameworkand process whereby concerns can be raised by its directors and employees against any kindof discrimination harassment victimization or any other unfair practice being adoptedagainst them. The Policy provides adequate safeguards against victimization ofDirector(s)/ employee(s) and direct access to the Chairman of the Audit Committee inexceptional cases. The Protected Disclosures if any reported under this Policy will beappropriately and expeditiously investigated by the Chairman.
Your Company hereby affirms that no Director/ employee have been denied access to theChairman of the Audit Committee and that no complaints were received during the year.
The Whistle Blower Policy has been disclosed on the Company's website and circulated toall the Directors / employees.
RISK MANAGEMENT POLICY
Your Company has a robust Risk Management policy. The Company through Board and AuditCommittee oversees the Risk Management process including risk identification impactassessment effective implementation of the mitigation plans and risk reporting. RiskManagement forms an integral part of the Company's planning process.
There are no risks which in the opinion of the Board threaten the existence of yourCompany.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements. These controls ensure the accuracy and completeness of theaccounting records and preparation of reliable financial statements. During the yearthere was not observed any reportable material weakness in the design or operation.
DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL
In accordance with Section 178 and other applicable provisions if any of the CompaniesAct 2013 read with the Rules framed thereunder and Regulation 19 of the SEBI (LODR)Regulations 2015 the Board of Directors formulated the Remuneration Policy of yourCompany on the recommendations of the Nomination and Remuneration Committee. The salientaspects covered in the Remuneration Policy covering the policy on appointment andremuneration of Directors key managerial personnel employees and other matters have beenoutlined in the Corporate Governance Report which forms part of this Report.
PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Companies Act 2013 read withRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of Directors/employees of your Company is set out in "Annexure - "of this report.
The statement containing the information of the top ten employees in terms ofremuneration drawn as required under Section 197 of the Companies Act 2013 read with Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014will be provided to any Member on a written request to the Company Secretary. In terms ofSection 136 of the Act the Reports and Accounts are being sent to the Members and othersentitled thereto excluding the aforesaid information of top ten employees which isavailable for inspection by the members at the Registered office of the Company duringbusiness hours on working days of the Company up to the date of the ensuing Annual GeneralMeeting.
The Secretarial Audit Report in the prescribed Form No. MR - 3 for the Financial Year2016-17 is annexed herewith as "Annexure - " to this Report. The SecretarialAuditor has not reported any qualification reservation or adverse remark or disclaimer inhis report other than unspent amount of CSR expenses by the Company during the FinancialYear 2016-17. Board has explained the reasons in this report about the unspent amount ofCSR.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR initiatives of your Company during the Financial Year 2016-17 has undertakenactivities in areas of promoting education preventive health care and sanitationEradicating hunger poverty and malnutrition (food supply) plantation activity etc. Theseactivities are in accordance with Schedule VII of the Companies Act 2013 and CSR Policyof the Company.
The CSR expenditure incurred by the Company during the Financial Year 2016-17 as wellas other details of initiatives undertaken by the Company during the Financial Year in CSRhas detailed in this Annual Report. The Annual Report on CSR activities is attached asAnnexure -  to this Report.
The Policy on CSR Pursuant to Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 is hosted on the website ofthe Company.
RELATED PARTY TRANSACTIONS
During the Financial Year 2016-17 Company has entered into some transactions withrelated parties as defined under Section 2(76) of the Companies Act 2013 which were inthe ordinary course of business and at arms' length basis. Further the transactions werein accordance with the provisions of the Companies Act 2013 read with rules framed thereunder and the SEBI (LODR) Regulations 2015.
During the Financial Year 2016-17 there were no transactions with related partieswhich can be considered as material transactions as defined under the SEBI (LODR)Regulations 2015.
All transactions with related parties were entered with approval of the AuditCommittee. The Company has obtain omnibus approvals from the Audit Committee for relatedparty transactions which are of repetitive nature entered in the ordinary course ofbusiness and are on arm's length basis in accordance with the provisions of Companies Act2013 read with the Rules issued there under and the Listing Regulations.
The details of the related party transactions as required under Accounting Standard -18are set out in Notes to the financial statements.
The Form AOC- 2 pursuant to Section 134 (3) (h) of the Companies Act 2013 read withRule 8(2) of the Companies (Accounts) Rules 2014 is set out as "Annexure - "to this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of the requirements of Section 134(3)(c) read with Section 134(5) of theCompanies Act2013 Board of Directors of the Company hereby state and confirm that:
(a) in the preparation of the annual accounts for the Financial Year ended 31st March2017 the applicable accounting standards have been followed and there are no materialdepartures from the same;
(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 your
Company as at 31st March 2017 and of the profit and loss of the Company for theFinancial Year ended 31st March 2017;
(c) 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) the annual accounts have been prepared on a going concern basis;
(e) proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adequate and operating effectively;and
(f) proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems are adequate and operating effectively.
MATERIAL CHANGES AND COMMITMENTS
There are no material changes and commitments affecting the financial position of yourCompany which have occurred between the end of the Financial Year 2016-17 and the date ofthis Report. However a preferential allotment of total 106666 equity shares is made to"Suryakant Hiralal Parikh" representing to "Family Fund" aPartnership Firm out of which allotment of 80000 equity shares was done on 17.05.2017 andallotment of 26666 equity shares was done on 29.05.2017 at a price of Rs. 630 per equityshare. This was done pursuant to partial conversion of 106666 warrants out of total317460 convertible warrants issued to the allottee by your company on 04.01.2017.
During the year under review your Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014. Further Company has not any deposit which is inviolation of Chapter V of the Act.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
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. TheCompany has not provided any guarantees during the Financial Year.
M/s. Parikh &Majmudar Chartered Accountants were appointed as Statutory Auditorsof your Company at the AGM
held on September 27 2016 for second term offive consecutive years. As per theprovisions of Section 139 ofthe Companies Act the appointment of Auditors is required tobe ratified by members at every AGM. The ratification of appointment of Statutory Auditorsfor the 2nd year is being sought from the members of the Company at this AGM.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark.
EXTRACT OF ANNUAL RETURN
Extract of the Annual Return in Form No. MGT-9 forms part of the Board's Report and isannexed herewith as "Annexure - ".
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information required under section 134(3)(m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 is annexed here with as "Annexure- ".
CORPORATE GOVERNANCE REPORT
The report on Corporate Governance along with a certificate from the Practicing CompanySecretary on its compliance for the Financial Year 2016-17 as per Regulation 34(3) readwith Schedule V of the SEBI (LODR) Regulations 2015 forms part of this Annual Report andannexed to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As per requirements of Listing Regulations a detailed review of the developments inthe industry performance of the Company opportunities and risks internal controlsystems outlook etc. of the Company is given under the head Management Discussion andAnalysis Report which forms part of this Annual Report.
Pursuant to Regulation 17(8) of SEBI (LODR) Regulations 2015 the CEO and CFO of theCompany have given Certificate to the Board. The CEO and the CFO also provide quarterlycertification on Financial Results while placing the Financial Results before the Board interms of Regulation 33 of SEBI (LODR) Regulations 2015.
DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has adopted zero tolerance for sexual harassment at workplace and hasformulated a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules thereunder for preventionand redressal of complaints of sexual harassment at workplace.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant/material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.
However SEBI passed an order on 12.05.2017 in Respect of an Inquiry initiated againstthe Company for Nondisclosure of Loan details in DRHP / RHP / Prospectus in the matter ofIPO of the company in the year 2011 and SEBI levied a total penalty of Rs. 700000 /-(Rupees Seven Lakhs Only) as per SEBI order for the said nondisclosure. Consequently theCompany has paid the penalty to SEBI as per their order.
The details of litigation on tax and other relevant matters are disclosed in theAuditors' Report and Financial Statements which forms part of this Annual Report.
The Board wishes to place on record its sincere appreciation to the Company'scustomers vendors central and state government bodies auditors legal advisorsconsultants registrar and bankers for their continued support to the Company during theyear under review. The Directors also wish to place on record their appreciation for thededicated efforts of the employees at all levels. Finally the Board expresses itsgratitude to the members for their continued trust co-operation and support.
| ||For and on behalf of the Board of Directors |
| ||Ghanshyambhai A. Thakkar |
|Place : Ahmedabad ||Chairman |
|Date : 12.08.2017 ||(DIN:00208843) |