TO THE SHAREHOLDERS
Your Directors have pleasure in presenting the Twelfth (12th)
Directors’ Report of your Company along with the financial statements for the
Financial Year ended 31st March, 2019.
1. OPERATING RESULTS
Certain key aspects of your Company’s performance during the Financial Year ended
31st March, 2019 as compared to the previous Financial Year are summarised
below: (Rs In ‘000)
| Particulars |
Year Ended 31.03.2019 |
Year Ended 31.03.2018 |
| Income for the year |
4,30,508.36 |
4,10,105.71 |
| Profit before Interest, Depreciation and Tax |
55,008.56 |
74,001.71 |
| Finance Charges |
2,801.86 |
4,113.13 |
| Profit before Depreciation and Taxes |
52,206.70 |
69,888.58 |
| Depreciation & Amortization |
38,571.49 |
44,553.76 |
| Provisions for Taxation/ Deferred Tax |
3,272.33 |
9,267.61 |
| Net Profit for the Current Year |
10,362.87 |
16,067.22 |
| Earlier Years Balance Brought Forward |
1,63,337.22 |
1,81,084.76 |
| Net Profit available for Appropriation |
1,73,700.09 |
1,97,151.97 |
| Appropriation : |
|
|
| Dividend on Equity Shares |
(28,565.91) |
(28,565.91) |
| Dividend Distrubution Tax (Net) |
(5,871.82) |
(5,815.36) |
| Other Comprehensive Income |
(470.81) |
566.51 |
| Transfer to / from Reserves |
0 |
0 |
| Balance carried to Balance Sheet |
1,38,791.55 |
1,63,337.22 |
2. DIVIDEND
The Directors do not recommend any dividend for the Financial Year ended 31st
March, 2019.
3. SHARE CAPITAL
There was no change in the Company’s share capital during the year under review.
The Company’s paid up equity share capital remained at 19,04,39,390 comprising of
1,90,43,939 equity shares of Rs 10/- each.
4. OVERVIEW OF OPERATIONS
During the year under review, your Company recorded a total income of Rs 4,30,508.36
(Rs In ‘000) as compared to last year’s income of Rs 4,10,105.71 (Rs In
‘000) and net profit of 10,362.88 (Rs In ‘000) as compared to last year’s
Net profit of 16,067.21 (Rs In ‘000). For further information, kindly refer to
Management Discussion and Analysis Report, forming a part of this Annual Report.
5. EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as provided under Section 92(3) of the Companies Act, 2013
(“the Act”) and as prescribed in Form No. MGT-9 of the Companies (Management and
Administration) Rules, 2014, is appended as Annexure I to this Report and is also
available on the Company’s website www.arrowtextiles.com
6. NUMBER OF MEETINGS OF THE BOARD
The Board met Six (6) times in Financial Year 2018-19 viz., on 18th May,
2018, 10th August, 2018, 19th September, 2018, 11th
October, 2018, 2nd November, 2018 and 8th February, 2019. The
details of meetings held and attended by each Director are given in the Corporate
Governance Report, which forms part of this Report.
7. DIRECTORS’ RESPONSIBILITY STATEMENT
Your Directors hereby confirm that:
i. In the preparation of the annual accounts for Financial Year ended 31st
March, 2019, the applicable accounting standards have been followed along with proper
explanation relating to material departures;
ii. Have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company at 31st March, 2019 and of the profit of
the Company for that period.
iii. Have taken proper and sufficientcare for the maintenance of adequate accounting
records in accordance with the provisions of this Act for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities.
iv. Have prepared the annual accounts for Financial Year ended 31st March,
2019 on a ‘going concern’ basis.
v. Have laid down internal financial controls to be followed by the Company and that
such internal financial controls are adequate and have been operating efficiently
vi. Have devised proper systems to ensure compliance with provisions of all applicable
laws and that such systems were adequate and operating effectively.
8. DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have submitted the declaration of independence
as required under Section 149(7) of the Act and Regulation 25(8) of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 (Listing Regulations), confirming that they meet the criteria of Independence under
Section 149(6) of the Act and Regulation 16 (1)(b) of Listing Regulations as amended from
time to time. The Independent Directors have also confirmed that they have complied with
the Company’s Code of Business Conduct & Ethics.
9. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION
The Policy of the Company on Directors’ appointment and remuneration including
criteria for determining qualifications, positive attributes, independence of a Director
and other matters provided under sub-section (3) of Section 178 of the Act and Regulation
19 of Listing Regulations is appended as Annexure II to this Report.
10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT
The details of Loans, Guarantees and Investments covered under the provisions of
Section 186 of the Act, read with Companies (Meetings of Board and Its Powers) Rules, 2014
are given in the notes to the Financial Statements forming part of this Annual Report.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the Financial Year 2018-19, your Company has entered into transactions with
related parties as defined under section 2(76) of the Act and Rules made thereunder,
Regulation 23 of the Listing Regulations. During the Financial Year 2018-19, transactions
with related parties which qualify as material transactions as per Listing Regulations are
given in Form AOC - 2 as per the Companies (Accounts) Rules, 2014 in Annexure III
to this Report.
The details of related party transactions as required under IND AS-24 are set out in
notes to accounts to the Standalone Financial Statements forming part of this Annual
Report. The Policy on Related Party Transactions may be accessed on the Company’s
website at the link: http://www.arrowtextiles.com/Related-Party-Transaction-Policy.pdf
12. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position of
the Company which have occurred between the end of the financial year of the Company to
which the financial statements relate and the date of the Report.
13. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO
The particulars in respect of conservation of energy, technology absorption and foreign
exchange earnings and outgo, as required under Section 134(3)(m) of the Act read with the
Companies (Accounts) Rules, 2014 is appended as Annexure IV to this Report.
14. BUSINESS RISK MANAGEMENT
The Board of Directors of the Company has constituted a Risk Management Committee to
frame, implement and monitor the risk management plan for the Company. The Company has a
robust Risk Management framework to identify, evaluate business risks and opportunities.
This framework seeks to create transparency, minimize adverse impact on the business
objectives and enhance the Company’s competitive advantage.
The business risk framework defines the risk identification and its management approach
across the enterprise at various levels including documentation and reporting. The
framework helps in identifying risks trend, exposure and potential impact analysis on a
Company’s business.
15. CORPORATE SOCIAL RESPONSIBILITY
The brief outline of the Corporate Social Responsibility (CSR) policy of the Company
and the initiatives undertaken by the Company on CSR activities during the year under
review are set out in Annexure V of this report in the format prescribed in The
Companies (Corporate Social Responsibility Policy) Rules, 2014.
The CSR policy is available on
https://www.arrowtextiles.com/Corporate%20Social%20Responsibility%20Policy.pdf
16. VIGIL MECHANISM
The Company has adopted Vigil Mechanism and Whistle Blower Policy for Directors and
Employees in compliance with the provisions of Section 177(10) of the Act and Regulation
22 of the Listing Regulations, to report genuine concerns and to provide for adequate
safeguards against victimization of persons who may use such mechanism. During the year no
personnel of the Company was denied access to the Audit Committee. The said policy is also
available on the Company’s website www.arrowtextiles.com
17. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD
Pursuant to the provisions of the Act and Regulation 19 of the Listing Regulations, the
Board has carried out an annual evaluation of the performance of the Board, its Committees
and Individual Directors.
The Nomination and Remuneration Committee have defined the evaluation criteria for the
Board, its Committees and Individual Directors. The Board’s functioning was evaluated
after taking inputs from the Directors on various aspects, including inter alia degree of
fulfillment of key responsibilities, Board structure and composition, establishment and
delineation of responsibilities to various Committees, effectiveness of Board processes,
information and functioning.
The Committees of the Board were evaluated after taking inputs from the Committee
members on the basis of criteria such as degree of fulfillment of key responsibilities,
adequacy of Committee composition and effectiveness of meetings.
The Board and the Nomination and Remuneration Committee reviewed the performance of the
individual directors on aspects such as attendance and contribution at Board/ Committee
Meetings and guidance/support to the management outside Board/ Committee Meetings. In
addition, the Chairman was also evaluated on key aspects of his role, including setting
the strategic agenda of the Board, encouraging active engagement by all Board members.
The performance evaluation of the Independent Directors was carried out by the entire
Board, excluding the Director being evaluated. The performance evaluation of the Chairman
and the Non-Independent Directors was carried out by the Independent Directors who also
reviewed the performance of the Board as a whole.
In a separate meeting of independent directors, performance of Non-Independent
Directors, performance of the board as a whole and performance of the Chairman was
evaluated, taking into account the views of executive directors and non-executive
directors.
18. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
The Company does not have any subsidiary, joint venture and associate companies.
However, the Company has formulated policy for determining material subsidiary and the
same is available on Company’s website and the same may be accessed at the link
http://www.arrowtextiles.com/Policy-for-Determining-Material-Subsidiaries.pdf
19. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE ACT
The Company has neither accepted nor renewed any deposits during the Financial Year
2018-19 in terms of Chapter V of the Act.
20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant material orders passed by the Regulators/Courts which would
impact the going concern status of the Company and its future operations.
21. INTERNAL CONTROL WITH REFERENCE TO FINANCIAL STATEMENTS
The Company has in place adequate internal financial control with reference to
financial statements.
The Company has adopted accounting policies which are in line with the Indian
Accounting Standards notified under Section 133 and other applicable provisions, if any,
of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015.
The Company in preparing its financial statements makes judgments and estimates based
on sound policies and uses external agencies to verify/ validate them as and when
appropriate. The basis of such judgments and estimates are also approved by the Statutory
Auditors and Audit Committee.
The Internal Auditor evaluates the efficacy and adequacy of internal control system,
accounting procedures and policies adopted by the Company for efficient conduct of its
business, adherence to Company’s policies, safeguarding of Company’s assets,
prevention and detection of frauds and errors and timely preparation of reliable financial
information etc. Based on the report of internal audit function, process owners undertake
corrective action in their respective areas and thereby strengthen the controls.
Significant audit observations and corrective actions thereon are presented to the Audit
Committee of the Board.
22. DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, Mr. Chand Arora resigned from the Directorship of the
Company with effect from 31st October, 2018. The Board places on record
its appreciation for the valuable services and guidance given by him during his tenure.
Dr. Ram H. Shroff appointed as Managing Director of the Company with effect from 1st
November, 2018. In accordance with the provisions of the Section 152(6)(e) of the Act, Dr.
Ram H. Shroff, Director of the Company will retire by rotation at the ensuing Annual
General Meeting and being eligible, offers himself for re-appointment. Pursuant to
recommendation of the Nomination and Remuneration Committee and subject to approval of
members at ensuing Annual General Meeting Mr. Aurobind Patel, Mr. Aditya Mangaldas and Dr.
Vrajesh Udani will be re-appointed as an Independent Directors on the Board of
Directors of the Company in accordance with Section 149(4) of the Act, with effect from 04th
August, 2019 to hold office for a second (2nd) term of five (5) consecutive years. Ms.
Deepika Pandey, Company Secretary and Compliance officer has resigned from the Company
with effect from 11th May, 2018. and Mr. Saurabh Gangadhare, Company Secretary
was appointed as Company Secretary designated as Key Managerial Personnel of the Company
w.e.f. 18th May, 2018.
23. AUDITORS
1. Statutory Auditor
M/s. M. H. S. & Associates, Chartered Accountants (Firm Registration No: 141079W),
were appointed as Statutory Auditors of the Company at the 10th Annual General
Meeting till the conclusion of the 15th Annual General Meeting.
Your Company has received a confirmation from M/s. M. H. S. & Associates, Chartered
Accountants (Firm Registration No: 141079W) to the effect that they are not disqualified
within the meaning of Section 141 and other applicable provisions of the Act and rules
made thereunder.
There are no qualifications, reservations or adverse remarks or disclaimers made by
Statutory Auditor of the Company, in his audit report.
2. Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company
have appointed M/s. A. K. Jain & Co., Company Secretaries in Practice to undertake the
Secretarial Audit of the Company for the year ended 31st March, 2019. The
Secretarial Audit Report is appended as Annexure VI to this Report.
There are no qualifications, reservations or adverse remarks or disclaimers made by
Secretarial Auditor of the Company, in his secretarial audit report except as stated
below:
Observation by Secretarial Auditor:
During the period under review the Company has generally complied with the provisions
of the Act, Rules, Regulations, Guidelines, standards etc. except to the observation that
the Company has not spent towards the Corporate Social Responsibility pursuant to Section
135 of the Companies Act, 2013.
Managements Reply:
The amount of Rs 2,702 (‘000) which remained unutilized for FY 2016-17 and FY
2017-18 due to unavoidable circumstances was utilised by the Company in April 2019. The
amount which remained unutilized for FY 2018-19 of Rs 1,048.77 (‘000) shall be
added to the CSR budget for the Financial Year 2019-20 and it will be the endeavor of the
company to ensure full utilization of allocated CSR budget.
24. REPORTING OF FRAUDS
There was no instance of fraud during the year under review, which required the
Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12)
of Act and Rules framed thereunder.
25. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As per Regulation 34(2) read with Schedule V of the Listing Regulations, Management
Discussions and Analysis Report is provided in a separate section and forms an integral
part of this Annual Report.
26. CORPORATE GOVERNANCE
As per Regulation 34(3) read with Schedule V of the Listing Regulations, a separate
section on corporate governance practices followed by the Company, together with a
certificate from the practicing Company Secretary confirming compliance with the
conditions of Corporate Governance forms an integral part of this Annual Report.
27. AUDIT COMMITTEE OF THE COMPANY
The Company’s Audit Committee comprises the following Directors:
1. Mr. Aditya Mangaldas (Chairman);
2. Dr. Ram H. Shroff;
3. Mr. Aurobind Patel and
4. Dr. Vrajesh Udani
The composition of the Audit Committee is in compliance with the requirements of
Section 177 of the Act, Regulation 18 of the Listing Regulations as amended from time to
time and guidance note issued by Stock Exchanges.
28. PARTICULARS OF EMPLOYEES
A statement comprising the names of top 10 employees in terms of remuneration drawn and
every persons employed throughout the year, who were in receipt of remuneration in terms
of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 is not being sent alongwith this annual report to the members of the Company
in line with the provisions of Section 136 of the Act. Members who are interested in
obtaining these particulars may write to the Company Secretary at the Registered Office
Company of the .
The disclosures in terms of the provisions of Section 197(12) of the Act, read with
Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 are provided in Annexure VI to this Report.
29. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has complied with the provisions relating to constitution of Internal
Complaints Committee and has Anti-Sexual Harassment policy pursuant to the provisions of
The Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act
2013. The Company did not receive any such complaints during the financial year 2018-19.
30. COMPLIANCE OF THE SECRETARIAL STANDARDS
During the financial year, the Company has complied with the applicable Secretarial
Standards i.e SS-1 and SS-2 as issued by the Institute of the Company Secretaries of
India.
31. SCHEME OF AMALGAMATION
The Company, as per the order of the National Company Law Tribunal, Mumbai Bench
(‘NCLT’) dated 15th March, 2019, had convened a meeting of the
members on 22nd April, 2019 wherein the members have approved the scheme of
amalgamation of Arrow Textiles Limited (‘First Transferor Company’) and MMG
India Private Limited (‘Second Transferor Company’) with Delta Magnets Limited
(Transferee Company) and their respective shareholders with requisite majority. Further
The Company has fileda petition with National Company Law Tribunal (NCLT) on 25th
April, 2019 for obtaining sanction to the Scheme pursuant to the provisions of Section 230
to Section 232 of the
Companies Act, 2013. The final hearing on the same is awaited.
32. ACKNOWLEDGEMENTS
Your Directors express their sincere appreciation for the co-operation received from
shareholders, bankers and other business constituents during the year under review. Your
Directors also wish to place on record their deep sense of appreciation for the commitment
displayed by all executives, officers and staff, resulting in the successful performance
of the Company during the year.
|
By Order of the Board of Directors, |
|
JAYDEV MODY |
|
Chairman |
|
DIN: 00234797 |
| Place: Mumbai |
|
| Date: 9th August, 2019 |
|
| Registered Office: |
|
| Plot No. 101-103, 19th Street, MIDC, Satpur, |
|
| Nasik - 422 007, Maharashtra. |
|
| CIN: L51494MH2008PLC178384 |
|
| Email ID: secretarial@arrowtextiles.com |
|
| Website: www.arrowtextiles.com |
|
| Tel No : 91-253-6609893 |
|
|