Shri Dinesh Mills Limited.
Your Directors have pleasure in presenting their Report together with the AnnualFinancial Statement for the year ended 31st March 2021
1. PERFORMANCE OF THE COMPANY
| || ||(Rs. In Lakhs) |
|PARTICULARS ||20202021 ||20192020 |
|Revenue from Operations ||4912 ||4681 |
|Profit before Depreciation Interest & Tax (PBDIT) ||1424 ||676 |
|Net Profit ||881 ||173 |
Your Directors have recommended for your consideration Dividend of Rs. 5.00 per Equityshare (50%) (Previous year Rs.3.00 per Equity share i.e. 30%) on 5600582 equity sharesof Rs.10/- each amounting to Rs. 28002910/- plus applicable Dividend Distribution Taxthereon subject to approval of shareholders of the Company at their ensuing 86th AnnualGeneral Meeting.
3. TRANSFER TO RESERVES
The Company has not transferred any amount to General Reserve.
4. TRANSFER OF UNCLAIMED DIVIDEND & EQUITY SHARES TO INVESTOR EDUCTION ANDPROTECTION FUND AUTHORITY (IEPF AUTHORITY)
The Company has transferred unclaimed dividend for the financial year 20122013and also transferred 12350 equity shares of Rs.10/- each to the IEPF Authority.
5. CHANGES IN THE NATURE OF BUSINESS
There is no change in the nature of business during the year under review.
6. MANAGEMENT DISCUSSION AND ANALYSIS
A. OVERALL REVIEW OF OPERATIONS
During the year under review the Company could achieve the Revenue from its Operationsof Rs. 4912 Lakhs as compared to Rs. 4681 Lakhs of the corresponding period of theprevious year despite disruption due to COVID-19 pandemic especially due to concentratedmarketing efforts. The net profit of the Company has been substantially increased fromRs.173 Lakhs to Rs.881 Lakhs mainly due to discontinuation of Woolen & Worsted fabricsbusiness and also controlling various costs.
The Company manufactures Felts (i.e. Technical Textiles) which is Capital & Labourintensive. The quality of the product is well established in the markets and our
Company is a debt free company with no pledge of shareholding of Promoters Group andhaving sufficient liquidity we expect to contain adverse impact due to second wave ofCOVID pandemic to some extent.
B. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL
PERFORMANCE (Rs. In Lakhs)
|Sr. No. Particulars ||2020 2021 ||2019 2020 |
|1 Revenue from Operations ||4912 ||4681 |
|2 Operating profit (PBDIT) ||1424 ||676 |
|3 Depreciation ||423 ||543 |
|4 Interest ||20 ||21 |
|5 Profit before Tax ||981 ||112 |
|6 Provision for Taxation ||100 ||(61) |
|7 Net Profit ||881 ||173 |
C. OVERALL OUTLOOK
Considering uncertain nature of COVID-19 its continuity over the globe shortage ofvaccines and also looking to the unexpected swing in the domestic & internationalmarkets the turnover and profitability of our Company may be affected during the currentfinancial year but it is very difficult to judge accurately the impact due to second waveof COVID pandemic at this stage.
The Company assumes no responsibility in respect of forward looking statements madeherein above which may substantially change based on subsequent developments eventschange in the Government policies exchange rate and improvement in present economicscenario etc. over the globe.
D. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Internal Audit Department conducts audit of all departments of the Company andplaces Audit reports/plans before the Audit Committee which reviews adequacy of internalaudit functions audit procedures and its coverage periodically. The minutes of the AuditCommittee meetings are placed at the meetings of the Board of Directors from time to time.The Company has adopted the concept of pre-audit and therefore the mistakes if any arerectified before the transactions are finally booked in the Books of Accounts of theCompany.
E. INDUSTRIAL RELATIONS
During the year under review the industrial relations both at Baroda and Ankleshwarunits have remained cordial. There were 324 employees in the Company as at 31st March2021.
7. MATERIAL CHANGES AND COMMITMENT IF ANY
There are no material changes and commitments affecting the financial position of theCompany occurred from 1st April 2021 to the date of this Report.
8. SIGNIFICANT AND MATERIAL ORDERS IF ANY
During the year under review no significant and material orders passed by theRegulators or Courts or Tribunals impacting the going concern status of the Company.
9. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure "A" attached to this Report.
The Company has been taking appropriate actions pursuant to Risk Management Policy fromtime to time to mitigate adverse impact of various Risks which may adversely affect theperformance of the Company and may threaten the very existence of the Company. Theprovisions relating to Risk Management Committee is not applicable to the Company.
11. THE CORPORATE SOCIAL RESPONSIBILITY
As the net profit of the Company was less than Rs.5 Crores during F.Y. 20192020provisions relating to the Corporate Social Responsibility (CSR) as prescribed u/s. 135 ofthe Companies Act 2013 along with Rules made thereunder were not applicable to ourCompany and therefore neither the CSR Committee nor the CSR Policy was framed by theCompany. However net profit of the Company exceeds Rs.5 Crores during the F.Y. 2020 2021 the Board of Directors of the Company at their meeting held on 31st May2021 framed the CSR Policy.
12. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the year under review the Company has not given any loans guarantees pursuantto Section 186 of the Companies Act 2013 except the investment made in 350000 0.01%Optionally Convertible Non-Cumulative Preference Shares of Rs.10/-each in the Right Issueof Wholly Owned Subsidiary company viz. Fernway Textiles Limited amounting to Rs.35/-Lakhs.
13. AUDITORS REPORTS
The Auditors' Report issued by M/s. Dhirubhai Shah & Co. LLP on the Accounts isself-explanatory and therefore does not call for any explanation. There were noqualifications reservations or adverse remarks made by the above referred StatutoryAuditors.
The Secretarial Audit Report issued by the Secretarial Auditor M/s. Kashyap Shah &Co. Practicing Company Secretaries Vadodara is self-explanatory and therefore do notcall for any explanation. The copy of the Secretarial Audit Report is attached as
During the year under review no fraud has been reported to the Audit Committee of theCompany by the above referred Statutory Auditors and Secretarial Auditor.
14. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF
REMUNERATION AND DISCHARGE OF THEIR DUTIES
The appointment of Directors Key Managerial Personnel (KMP) payment of remunerationand discharge of their duties are as per the Remuneration Policy framed by the Companypursuant to Section 178(3) of the Companies Act 2013. The Remuneration Policy can beviewed at Company's website www.dineshmills.com in "Investors" Section
15. SEXUAL HARRASSMENT OF WOMAN EMPLOYEES
The Company has constituted "Internal Complaints Committee" pursuant to theprovisions of the Sexual Harassment of Woman at work place (prevention prohibition &redressal) Act 2013 and no complaint has been received by the Committee during thefinancial year 2020 2021.
16. ANNUAL RETURN
The extracts of Annual Return pursuant to Rule 12 of the Companies (Management andAdministration) Rules 2014 is furnished in Annexure "C" attachedto this Report.
17. COMPLIANCE OF SECRETARIAL STANDARDS
The Company has complied with the Secretarial Standard 1 (SS-1) relating to themeetings of the Board of Directors and Secretarial Standard 2 (SS-2) relating to theGeneral meetings issued by the Institute of Company Secretarial of India and approved bythe Central Government.
18. THE MEETINGS OF THE BOARD OF DIRECTORS
During the year under review five meetings of Board of Directors of the Company wereheld on 30/06/2020 14/08/2020 11/11/2020 12/02/2021 and 15/03/2021.
19. KEY MANAGERIAL PERSONNEL (KMP) AND REMUNERATION
During the year under review Shri Bharatbhai Patel Chairman & Managing DirectorShri J B Sojitra Company Secretary and Shri Apurva Shah Chief Financial Officer were theKMP of the Company pursuant to Section 203 of the Companies Act 2013 and the Rules madethereunder.
REMUNERATION ETC. PURSUANT TO SECTION 197(12) AND THE RULES MADE THEREUNDER ARE ASUNDER: a) The ratio of the Remuneration of each Director to the median employee'sremuneration for the financial year and such other details are given hereunder: (1) Name :Shri Bharatbhai Patel (Chairman & Managing Director) Ratio: 65:1 (2) Name: ShriNimishbhai Patel (Managing Director) Ratio: 65:1 b) The percentage increase inRemuneration of each Director Chief Financial Officer Company Secretary during thefinancial year: (1) Shri Bharatbhai Patel Chairman & Managing Director : NIL
(2) Shri Nimishbhai Patel Managing Director : NIL
(3) Shri Apurva Shah (Upto 04/02/2021) Chief Financial Officer: NIL (4) Shri J.B. Sojitra Company Secretary : NIL
c) The percentage increase in the median remuneration of employees in the financialyear: 4% d) There are 324 permanent employees on the Roll of the Company.
e) The explanation on the relationship between average increases in Remuneration andCompany performance: The Company has given normal increments to the employees for the yearended 31st March 2021. f) Comparison of the Remuneration of the Key ManagerialPersonnel (KMP) against the performance of the company: Considering the performance of theCompany and also considering the qualifications experience long association untiringefforts and their contribution to the Company the remuneration paid to KMP is quitereasonable.
20. CORPORATE GOVERNANCE
The Report on Corporate Governance pursuant to the provisions of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 along with the certificate ofM/s. Dhirubhai Shah & Co. LLP Chartered Accountants Auditors of the Company areattached herewith as Annexure "D" and Annexure "E" respectively.
21. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
Dinesh Remedies Ltd. a subsidiary of the Company is engaged in manufacturing of Emptyhard Gelatin Capsules Shells at Village Mahuvad Haranmal Road Padra JambusarHighway Taluka Padra District Vadodara 391 440.
Fernway Technologies Ltd. and Fernway Textiles Ltd. are wholly owned subsidiarycompanies. However these subsidiary companies have yet to start the business.
The financial statements of the above referred subsidiary companies are consolidatedand the separate statement containing the salient features of the financial statement ofthese subsidiary companies has also been attached to the financial statement of theCompany pursuant to the provisions of the Companies Act 2013 read with the Companies(Indian Accounting Standards) Rules 2015 (i.e. Ind AS).
The Company has neither accepted nor renewed any deposits pursuant to Section 73 and 76of the Companies Act 2013 and Rules made thereunder during the financial year 2020 2021.
Pursuant to Section 149 and 152 of the Companies Act 2013 read with the Companies(Appointment and Qualification of Directors) Rules 2014 Independent Directors are notliable to retire by rotation whereas other Directors are liable to retire by rotation andaccordingly Shri Nimishbhai Patel Managing Director of the Company would retire byrotation and being eligible offer himself for re-appointment.
During the year under review Ms. Reshma S. Patel was appointed as an Independent(Woman) Director of the Company for a period of five years w.e.f. 15th March2021 and therefore the Board recommends her appointment as Independent (Woman) Directorof the Company in the ensuing 86th Annual General Meeting (AGM) of the Company.
During the year under review Mrs. Tarunaben Patel had resigned as an IndependentDirector w.e.f. 8th June 2020 and thereafter she was appointed asNon-Executive Director w.e.f. 30th June 2020. The information as requiredunder Regulation 36(3) of the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 relating to Shri Nimishbhai Patel and Ms. Reshma S. Patel are given inthe Notice of ensuing 86th AGM of the Company.
24. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors have given the declaration that they meet the criteria ofindependence as provided in Section 149(6) of the Companies Act 2013 read with Rules madethereunder and Clause (6) of sub-regulation (i) of Regulation 16 of SEBI (LODR) Regulation2015.
25. CERTIFICATE OF NON DISQUALIFICATION OF DIRECTORS
The Certificate of Non Disqualification of Directors issued by Ms. Nilesh Savaliya& Associates Practicing Company Secretaries pursuant to SEBI (Listing Obligations& Disclosures Requirements) Regulations 2015 is attached as Annexure "F".
26. PERFORMANCE EVALUATION
The performance evaluation of all the Directors including Independent Directors and theBoard as a whole which includes the Committees thereof was done on 12th February2021 considering various criteria and also seeking inputs from all the Directors as perthe Performance Evaluation Policy of the Company.
A separate meeting of Independent Directors was also held on 12th February2021 and reviewed the performance of Non Independent Directors performance of the Boardas whole and performance of the Chairperson of the Company taking into account the viewsof Executive and Non- Executive Directors pursuant to the Performance Evaluation Policy ofthe Company.
27. STATUTORY AUDITORS
The Statutory Auditors M/s. Dhirubhai Shah & Co. LLP would hold the Office tillthe conclusion of 86th AGM pursuant to the provisions of Section 139 of theCompanies Act 2013 read with Rules made thereunder and therefore M/s. R. K. Doshi &Co. LLP having Firm Registration No. 102745W/W100242 is appointed as Statutory Auditorsfor a term of five years from F.Y. 20212022 to F.Y. 20252026 for auditing theAccounts of the Company subject to approval of shareholders of the Company.
28. COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM
The Audit Committee consists of three Independent Directors viz. Shri Rakesh AgrawalShri T. M. Patel and Shri Sanjiv Shah and one Non-Executive Director Mrs. Tarunaben Patel.
The Board of Directors of the Company had established the Vigil Mechanism pursuant toSection 177(9) of the Companies Act 2013 and Rules made for Directors and Employees toreport their genuine concerns. However there were no instances reported to the Chairmanof the Audit Committee during the year under review. The Whistle Blower Policy can beviewed at Company's website www.dineshmills.com in "Investors" Section.
(a) BUY BACK OF SECURITIES: The Company has not bought back any of itssecurities during the year under review.
(b) SWEAT EQUITY: The Company has not issued any Sweat Equity Shares during theyear under review.
(c) BONUS SHARES: No Bonus Shares were issued during the year under review. (d) EMPLOYEESSTOCK OPTION PLAN (ESOP): The disclosure required pursuant Regulation 14 of SEBI(Share Based Employee Benefits) Regulations 2014 is attached as Annexure "G".
(e) PREFERENTIAL ALLOTMENT: The Company had allotted 500000 ConvertibleWarrants of Rs.10/- each with a premium of Rs.140/- each to the Promoter Group onpreferential basis on 20th February 2019 which is convertible at the option ofthe warrant holders at any time within 18 months from the date of allotment in one ormore tranche(s) and accordingly the balance 300000 warrants have been converted into300000 equity shares of Rs.10/- each with a premium of Rs.140/- each during the yearunder review and no convertible warrants are outstanding as at 31st March2021.
The funds received under the preferential allotment are utilized for existing businesspurpose as stated in the Notice of Extra Ordinary General Meeting held on 7th February2019.
30. EMPLOYEES' REMUNERATION:
The details of the remuneration paid to the employees during the year under review aregiven in the Annexure "H" to this Report pursuant Section 197(12)of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointment &Remuneration of Managerial Personnel) Rules 2014. A statement showing remuneration paidto top 10 employees of the Company are available at the Company and the same will beprovided to the members upon request for the same.
All the properties of the Company including buildings plant & machinery and stockshave been insured.
32. CONTRACTS / ARRANGEMENT WITH THE RELATED PARTIES
During the year under review no contracts / arrangements are entered with the RelatedParties pursuant to Section 188 of the Companies Act 2013. However the transactions withRelated Parties are given in Note No. 38 attached to the Annual Financial Statement asGood Corporate Governance practice and also disclosed in Form AOC 2 attachedas Annexure "I" to this Report.
33. DIRECTORS RESPONSIBILITY STATEMENT:
Your Directors confirm that:
(a) in the preparation of the Annual Accounts for the financial year 20202021the applicable Accounting Standards had been followed along with the proper explanationrelating 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 the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(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.
Your Board of Directors thanks all the stakeholders' viz. shareholders customerssuppliers bankers employees for their support during the year under review.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
| ||Sd/- |
|Place: Vadodara ||BHARAT PATEL |
|Date: 31st May 2021 ||CHAIRMAN |
| ||DIN: 00039543 |