To the Members
Your Directors have great pleasure in presenting the Twenty Eighth Annual Reporttogether with the Audited statements of Accounts of your Company for the financial yearended on 31st March 2018.
The Highlights of the financial performance of the Company during the period endedMarch 31 2018:
[Rupees in Lacs]
|Particulars ||Financial Year ||Financial Year |
| ||2017-18 ||2016-17 |
|Revenue from operations (Gross) ||22508.22 ||21452.43 |
|Less: Excise duty ||0 ||0 |
|Revenue from operations (Net) ||22508.22 ||21452.43 |
|Other income ||56.01 ||41.01 |
|Total Revenue ||22564.23 ||21493.44 |
|Expenses || || |
|(a) Cost of materials consumed ||15750.46 ||14730.99 |
|(b) Purchases of stock-in-trade ||106.28 ||52.84 |
|(c) Changes in inventories of FG WIP & Stock-in-Trade ||46.62 ||62.42 |
|(d) Employee benefits expense ||510.81 ||384.33 |
|(e) Finance costs ||741.19 ||818.33 |
|(f) Depreciation and amortization expense ||215.04 ||265.06 |
|(g) Other expenses ||5013.31 ||5097.59 |
|Total Expenses ||22383.71 ||21411.56 |
|Profit/ (Loss) before tax ||180.52 ||81.88 |
|Tax expense: || || |
|(a) Current tax expense ||39.52 ||25.69 |
|(b) Deferred tax ||9.12 ||-1.76 |
|(c) Prior Period Adjustment ||-1.99 ||0 |
|Profit / (Loss) for the year ||133.86 ||57.95 |
|Earnings per share (face value Rs.10/-) Basic & Diluted ||1.41 ||0.61 |
The Company's total revenue from operations during the financial year ended 31st March2018 were Rs. 22564.23Lacs as against Rs. 21493.44 Lacs of the previous year representingincrease of approximately about 4.98% over the corresponding period of the previous yearwith total expenses of Rs.22383.71lacs (previous year of Rs. 21411.56lacs). The Companyhas made Net Profit of Rs.133.86Lacs as against Rs. 57.95Lacs of the previous year afterconsidering Depreciation and Provision for Tax and other adjustments representing aincrease of approximately about 130.99% over the corresponding period of the previousyear.
The EPS of the Company for the year 2017-18 is Rs. 1.41. The Company is looking forwardto infuse additional working capital in the business of the Company in order to carry outthe operation of the Company smoothly.
No dividend has been recommended in respect of the financial year ended 31st March2018 and the entire surplus be ploughed back to the business to meet the needs foradditional finance for capital expenditure.
During the financial year the Company has achieved export sales of Rs. 38627058 Lacs(previous year of Rs. 19062400).
The Company has neither accepted nor invited any deposit from public falling withinthe ambit of Section 73 of the Companies Act 2013 and The Companies (Acceptance ofDeposits) Rules 2014.
During the year under review there is no change in share capital of the Company.
- The Authortised Share Capital of the Company as at 31st March 2018 stood atRs.100000000/- and
- The Paid-up Equity Share Capital of the Company as at 31st March 2018 stood atRs.95000000/-. During the year under review the Company has not issued any ShareCapital.
SUBSIDIARY JOINT VENTURE (JV) AND ASSOCIATES COMPANIES
During the year under review the Company does not have any Subsidiary Joint Venture(JV) or Associates Company.
In terms of the provision of Section 149 of the Companies Act 2013 and Regulation17(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aCompany shall have at least one Woman Director on the Board of the Company. Our Companyhas Mrs. Vaishali Soni as Director on the Board of the Company since 24.07.2015 who ispresently the Non-Executive Independent Director of our Company.
As per the provisions of Section 152 of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Purshottam Agarwal being longest in the office shallretire at the ensuing Annual General Meeting and being eligible for re-appointment offershimself for re-appointment.
Details of Director seeking re-appointment as required under the Listing Regulationsare provided in the Notice forming part of this Annual Report. Their re-appointments areappropriate and in the best interest of the Company.
All Independent Directors have given declarations that they meet the criteria ofIndependence as laid down under Section 149 (6) of the Companies Act 2013 and Regulation25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Theterms and conditions of the Independent Directors are incorporated on the website of theCompany www.shreebhavyafabrics.com
KEY MANAGERIAL PERSONNEL (KMP)
Mr. PURSHOTTAM R. AGARWAL Chairman and Managing Director Ms. Jyoti N. DevnaniCompany Secretary and Mr. Kishan M. Yadav Chief Financial Officer of the Company are theKey Managerial Personnel as per the provisions of the Companies Act 2013
NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW
Regular Board Meetings are held once in a quarter inter-alia to review the quarterlyresults of the Company. During the year under review 5 (five) Board Meetings were convenedand held on 30.05.2017 17.08.2017 14.09.2017 13.12.2017 and 14.02.2018. The interveninggap between the two meetings was within the period prescribed under the Companies Act2013. The details of the meetings are furnished in the Corporate Governance Report whichforming part of this Annual Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO
Information relating to Conservation of Energy Technology Absorption and ForeignExchange Earning and Outgo required under Section 134 (3) (m) of the Companies Act 2013forms part of this Annual Report as Annexure-I.
EXTRACT OF ANNUAL RETURN
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of Companies (Management and Administration) Rules2014 the extract of the Annual Return as on 31st March 2018 in Form MGT-9 forms part ofthis Annual Report as Annexure-II.
CORPORATE GOVERNANCE REPORT:
The Company has taken adequate steps to adhere to all the stipulations laid down underSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015. A report on Corporate Governance included as a part of this AnnualReport is given in Annexure-III.
A certificate from the Statutory Auditors of the company confirming the compliance withthe conditions of Corporate Governance as stipulated under Reg. 27 & 34 the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 is attached to this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis Report for the financial year under review asstipulated under Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 is presented in the separatesection forming part of this Annual Report.
Assets of your Company are adequately insured against various perils.
MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of financial year as on 31st March 2018 andthe date of Director's Report i.e. 14.08.2018.
LISTING WITH STOCK EXCHANGE:
The Company confirms that it has paid the Annual Listing Fees for the year 2018-2019 toBSE where the Company's Shares are listed.
COMMITTEES OF THE BOARD OF DIRECTORS
Your Company has several Committees which have been established as part of the bestCorporate Governance practices and are in compliance with the requirements of the relevantprovisions of applicable laws and statutes.
The Company has following Committees of the Board of Directors: ??Audit Committee??Stakeholder's Grievances and Relationship Committee ??Nomination and RemunerationCommittee
The details with respect to the compositions powers terms of reference and otherinformation of relevant committees are given in details in the Corporate Governance Reportwhich forms part of this Annual Report.
POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION
The Company has a Nomination and Remuneration Committee. The Committee reviews andrecommend to the Board of Directors about remuneration for Directors and Key ManagerialPersonnel and other employee up to one level below of Key Managerial Personnel. TheCompany does not pay any remuneration to the Non-Executive Directors of the Company.Sitting fee is paid as per the policy of the company for attending the Meetings of theBoard of Directors and Committees of the Board. Remuneration to Executive Directors isgoverned under the relevant provisions of the Act and approvals.
The Company has devised the Nomination and Remuneration Policy for the appointmentre-appointment and remuneration of Directors Key Managerial. All the appointmentre-appointment and remuneration of Directors and Key Managerial Personnel are as per theNomination and Remuneration Policy of the Company.
The Company has established a vigil mechanism and accordingly framed a Whistle BlowerPolicy. The policy enables the employees to report to the management instances ofunethical behavior actual or suspected fraud or violation of Company's Code of Conduct.Further the mechanism adopted by the Company encourages the Whistle Blower to reportgenuine concerns or grievances and provide for adequate safe guards against victimizationof Whistle Blower who avails of such mechanism and also provides for direct access to theChairman of the Audit Committee in exceptional cases. The functioning of vigil mechanismis reviewed by the Audit Committee from time to time. None of the Whistle blowers has beendenied access to the Audit Committee of the Board. The Whistle Blower Policy of theCompany is available on the website of the Company www.shreebhavyafabrics.com.
RISK MANAGEMENT POLICY:
The Company has a structured risk management policy. The Risk management process isdesigned to safeguard the organisation from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventoried and integrated with themanagement process such that they receive the necessary consideration during decisionmaking. It is dealt with in greater details in the management discussion and analysissection.
SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed thereunder. During the financial year2017-2018 the Company has not received any complaints on sexual harassment.
None of the Directors of the Company is disqualified for being appointed as Director asspecified in Section 164(2) of the Companies Act 2013.
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 and Regulation25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 astructured questionnaire was prepared after taking into consideration of the variousaspects of the Board's functioning Composition of the Board and Committees cultureexecution and performance of specific duties obligation and governance.
The performance evaluation of the Independent Directors was completed.
During the financial year under review the Independent Directors met on 14th February2018 inter-alia to discuss: ??Performance evaluation of Non Independent Directors andBoard of Directors as a whole; ??Performance evaluation of the Chairman of the Company;??Evaluation of the quality of flow of information between the Management and Board foreffective performance by the Board.
The Board of Directors expressed their satisfaction with the evaluation process.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The details of Loans Guarantees or Investments covered under the provisions of section186 of the Companies Act 2013 made during the year under review are disclosed in thefinancial statements.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are as follows:
Remuneration Ratio of Directors/ KMP/ Employees:
|Name ||Designation || |
| || |
| || ||FY 2017-18 (Rs.) ||FY 2016-17 (Rs.) ||Increase in remuneration from previous year (Rs.) ||Ratio/ Times per Median of employee remuneration |
|PURSHOTTAM R. AGARWAL ||CMD ||2502400 ||2404800 ||97600 ||10.43 |
|Jyoti N. Devnani ||CS ||298730 ||236280 ||62450 ||1.24 |
|Kishan M. Yadav ||CFO ||0 ||0 ||Nil ||0 |
The particulars of the employees who are covered by the provisions contained in Rule5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are as follows: a) Employed throughout the year : Nil b) Employed for part ofthe year : Nil The number of permanent employees on the rolls of Company: 114 as on 31March 2018.
The remuneration paid to all Key management Personnel was in accordance withremuneration policy adopted by the Company.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the related party transactions that were entered during the financial year were inthe Ordinary course of business of the Company and were on arm's length basis. There wereno materially significant related party transactions entered by the Company with itsPromoters Directors Key Managerial Personnel or other persons which may have potentialconflict with the interest of the Company.
All Related Party transactions are placed before the Audit Committee for approvalwherever applicable. Prior omnibus approval for normal business transactions is alsoobtained from the Audit Committee for the related party transactions which are ofrepetitive nature and accordingly the required disclosures are made to the Committee onquarterly basis in terms of the approval of the Committee. The details of Related PartyTransactions are given in the notes to the financial statements.
The policy on Related Party Transactions as approved by the Board of Directors isuploaded on the website of the Company www.shreebhavyafabrics.com The particulars ofcontracts or arrangements with related parties referred to in Section 188(1) of theCompanies Act 2013 as prescribed in Form AOC-2. Annexure IV
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has laid down the set of standards processes and structure which enablesto implement internal financial control across the Organization and ensure that the sameare adequate and operating effectively. To maintain the objectivity and independence ofInternal Audit the Internal Auditor reports to the Chairman of the Audit Committee of theBoard.
The Internal Auditor monitors and evaluates the efficacy and adequacy of internalcontrol system in the Company its compliance with the operating systems accountingprocedures and policies of the Company. Based on the report of Internal Auditor theprocess owners undertake the corrective action in their respective areas and therebystrengthen the Control. Significant audit observation and corrective actions thereon arepresented to the Audit Committee of the Board.
Statutory Auditor and their report
The observations made in their report and dealt with in the notes forming part of theAccounts at appropriate places are self-explanatory.
At 29th Annual General Meeting held on 29th September 2017 the members approvedappointment of M/s. ABISHEK KUMAR & ASSOCIATES. Chartered Accountants [FRN NO.:130052W] to hold office from the conclusion of the 29th Annual General Meeting (subject tothe ratification of the appointment by the members at every Annual General Meeeting heldafter 29th Annual General Meeting) on such remuneration as may be fixed by the Boardapart from reimbursement of out of pocket expenses as may be incurred by them for thepurpose of audit.
The Ministry of Corporate Affairs vide its notification dated 07th May 2018 hasomitted Section 139(1) first proviso regarding ratification of appointment of auditors bymembers at every Annual General. Therefore the Resolution for the ratification of M/s.ABISHEK KUMAR & ASSOCIATES. Chartered Accountants [FRN NO.: 130052W] by members at30th Annual General Meeting was not taken for approval of Shareholders in Annual GeneralMeeting.
As regards the confirmation for loans and advances the company is in process of gettingthe confirmation from the respective parties and as on date no parties has disputed theamount standing into the Book of accounts.
M/s. N.K.Shrishrimal & Co. Chartered Accountants Ahmedabad has been appointed asInternal Auditors of the Company. Internal Auditors are appointed by the Board ofDirectors of the Company on a yearly basis based on the recommendation of the AuditCommittee. The Internal Auditor reports their findings on the Internal Audit of theCompany to the Audit Committee on a quarterly basis. The scope of internal audit isapproved by the Audit Committee.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company hadappointed Mr. Mukesh H. Shah Practicing Company Secretary of Ahmedabad to undertake theSecretarial Audit of the Company for the financial year 2017-18. The Report of theSecretarial Audit is annexed to this Annual Report as Annexure-V.
Explanation to the Qualifications in Secretarial Audit Report.
|Qualification/Adverse Remark ||Explanation |
|As confirmed by the management that the company has accepted deposits by way of unsecured loan from promoters their relatives and friends in pursuance of a stipulation of the Bank. ||The company assures to repay the deposits at the earliest and will not accept it again. |
Our Company has appointed M/s. Kiran J. Mehta & Co. Cost Accountants Ahmedabad asCost Auditor of the Company to audit the cost accounts for the financial year 2018-19.
As per Section 148 read with Companies (Audit & Auditors) Rules 2014 and otherapplicable provisions if any of the Companies Act 2013 the Board of Directors of theCompany has appointed M/s. Kiran J. Mehta & Co. Cost Accountants as the Cost Auditorof the Company for the financial year 2018-19 on the recommendations made by the AuditCommittee subject to the approval of the Central Government.
The remuneration proposed to be paid to the Cost Auditors subject to the ratificationby the members at the ensuing Annual General Meeting would be Rs.50000/- (apart fromreimbursement of out of pocket expenses and applicable taxes if any).
The Cost Audit report for the financial year 2016-2017 was filed within the due date.The due date for submission of the Cost Audit Report for the financial year 2017-2018 iswithin 180 days from 31st March 2018.
Statutory Auditor's Report:
The Statutory Auditors' Report on the accounts of the Company for the accounting yearended 31st March 2018 is self-explanatory and do not call for further explanations orcomments that may be treated as adequate compliance of Section 134 of the Companies Act2013.
DIRECTORS' RESPONSIBILITY STATEMENT:
As stipulated in Section 134(3)(c) read with sub section 5 of the Companies Act 2013Directors subscribe to the "Directors' Responsibility Statement" and confirmthat: a) In preparation of annual accounts for the year ended 31st March 2018 theapplicable accounting standards have been followed and that no material departures havebeen made from the same; b) The Directors had selected such accounting policies andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company at the end ofthe financial year and of the profit or loss of the Company for that year; c) TheDirectors had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; d)The Directors had prepared the annual accounts for the year ended 31st March 2018 ongoing concern basis. e) The Directors had laid down the internal financial controls to befollowed by the Company and that such Internal Financial Controls are adequate and wereoperating effectively; and f) The Directors had devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Companies Act 2013.
2. Issue of Equity Shares with differential rights as to dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and ESOS.
4. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.
5. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
Your Directors would like to express their appreciation for the assistance andco-operation received from the financial institutions banks Government authoritiescustomers vendors and members during the year under review. Your Directors also wish toplace on record their deep sense of appreciation for the committed services by theexecutives staff and workers of the Company.
| ||For and on behalf of the Board |
| ||For SHREE BHAVYA FABRICS LIMITED |
|PLACE : AHMEDABAD ||[PURSHOTTAM R. AGARWAL] |
|DATE : 14.08.2018 ||DIN: 00396869 |