The Directors have pleasure in presenting the Twenty Second Annual Report together with the Audited Financial Statements of the Company for the period from 1st April, 2015 to 31st March, 2016. The working and operational parameters of all the plants of the Company were quite satisfactory during the year.
Highlights of Financial Results for the year are as under: (Amounting C)
For the year ended
Revenue from operations
Less: Finance Costs
Profit before exceptional items and tax
Profit Before Tax
Less: Tax expense
Profit After Tax
AMOUNT AVAILABLE FOR APPROPRIATION
Tax on Dividend
Transfer to General Reserve
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards. It complies with the provisions of Companies Act, 2013 and guidelines issued by SEBI. Management evaluates all recently issued or revised accounting standards on an ongoing basis. Apart from this, the Company discloses Audited and Unaudited Financial Results on quarterly and annual basis as per Listing Agreement entered into with the stock exchanges and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
It is evident from the above graphs that your Company has progressed during the current period ended 31st March, 2016. It has achieved aggregate sales of C1156.72 crores as compared to sales of C1096.53 crores in last fiscal And Profit Before Tax of C88.12 crores as compared to Profit Before Tax of C71.22 crores last year.
Barring unforeseen circumstances, the Directors of your Company expect continued growth in turnover and profitability in future also.
A detailed analysis of the financial operations is given in the Management Discussion and Analysis Report which forms part of this Annual Report in terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The analysis on the Industry Scenario throws light on the important risks and concerns faced by your Company. The strategy of your Company to de-risk against these factors is also outlined in the Management Discussion and Analysis Report.
SUBSIDIARY AND ASSOCIATE COMPANIES
Nandan Denim Limited did not have any subsidiary or associate company for the year ended 31st March, 2016.
The dividend payout for the year under review is in accordance with the Company''''s policy to build long term shareholder value and considering the long term growth objectives of the Company.
The Board, at its meeting held on 12th February, 2016, declared an Interim Dividend of Re. 0.80/- (i.e. 8%) per equity share of face value of C10/- each. A second Interim Dividend of Re. 0.80/- (i.e. 8%) per equity share of face value of C10/- each was further declared at the Board Meeting held on 11th March, 2016. The total dividend for the year works out to C 1.60/- (i.e. 16%) per equity share on a face value of C10/- per share. Last year, the dividend was paid at the same rate. The Company has paid dividend distribution tax plus applicable surcharge, education cess and / or any other cess applicable on the dividend distribution tax at the time of declaration and payment of dividend.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Nandan Denim Limited has a broad-based Board of Directors, constituted in compliance with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in accordance with good corporate governance practices. The Board functions either as a full Board or through various committees constituted to oversee specific areas.
The Board of Directors at their meeting held on 29th April, 2015 approved the appointment of Dr. Yasho Verdhan Verma as Additional Director of the Company in the capacity of Independent Director. He was further regularised as Director in the Annual General Meeting of the Company held on 29th September, 2015.
On the recommendation of the Nomination and Remuneration Committee, at the Board Meeting held on 11th March, 2016, Mr. Pradeep Kumar Shrivastava and Mr. Ganesh Khawas were appointed as Additional Directors in the capacity of Whole - Time Directors. As
Additional Directors, they hold office up to the date of forthcoming Annual General Meeting and are eligible for appointment as Directors. Later, Mr. Ganesh Khawas stepped down from his position as Whole - Time Director effective from the close of business hours on 4th July, 2016 which was approved via circular resolution by the Board of Directors. The Board places on record its appreciation for his contribution towards the Company.
The Board of the Company as on 31st March, 2016 consisted of 9 Directors, out of which five were Independent Directors, two were Promoter Directors and two were Whole - Time Directors.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which have been relied on by the Company and were placed at the Board Meeting held on 28th May, 2016.
Retirement by rotation
Mr. Brijmohan Chiripal, Managing Director, is liable to retire by rotation at the ensuing AGM pursuant to the provisions of section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company and being eligible has offered himself for re-appointment. Appropriate resolutions for their re-appointment are being placed for your approval at the ensuing AGM.
Appointment/Re-appointment of Directors
In compliance with requirements of the Companies Act, Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, brief resume and expertise of persons proposed to be appointed / re-appointed as Directors is mentioned below. Details of other directorships, memberships in committees of other Companies and shareholding in the Company have been mentioned in the Annexure to the Notice.
Mr. Brijmohan Chiripal is the Managing Director of Nandan Denim Limited. Aged 55 years, he has done his Bachelors in Engineering (Chemicals) and has almost three decades of experience in the field of manufacturing, trading and export of various textile products. He takes keen interest in the marketing aspects of the Company.
Mr. Pradeep Kumar Shrivastava is the Whole Time Director of the Company. He has done his Post Graduation in Personnel Management apart from M.A. and Diploma in Social Work. He also holds degree in law. He has worked with Companies like Gujarat Ambuja Exports Limited and Modern Terry Towel Limited, amongst others. He possesses around 30 years of experience in the field of Human Resource.
In terms of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the number of Committees (Audit Committee and Stakeholders Relationship Committee) of public limited companies in which a Director is a member/chairman were within the limits provided under listing regulations, for all the Directors of the Company. The number of directorships of each independent Director is also within the limits prescribed under listing regulations.
Key Managerial Personnel
During the period under review, Mr. Sanjay Agrawal vacated office as Chief Financial Officer from the Company with effect from 31st March, 2016. The Board places on record appreciation for his valuable contribution during his association with the Company. Thereafter, Mr. Ashok Bothra was appointed as the Chief Financial Officer of Nandan Denim Limited at the Board Meeting held on 28th May, 2016 and designated as Key Managerial Personnel.
Apart from the above, Mr. Brijmohan Chiripal is the Managing Director of the Company and Ms. Purvee Roy is the Company Secretary of the Company, thereby satisfying the requirements of the provisions of sections 2(51) and 203 of the Companies Act,
2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 pertaining to Key Managerial Personnel. In addition, Mr. Deepak Chiripal serves as Chief Executive Officer of the Company.
Annual Evaluation of Board''''s Performance
As required under the provisions of Section 134(3)(p) of the Companies Act, 2013; Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Board has carried out an annual evaluation of its own performance, of its Committees and individual directors. The manner in which such performance evaluation was carried out is as under:
The performance evaluation framework is in place to seek their response on the evaluation of the entire board and individual directors. The Nomination and Remuneration Committee carries out evaluation of Director''''s performance.
The performance of the Board and Individual Directors was evaluated by the Board seeking input from all Directors. The performance of committees was evaluated by the Board seeking input from the committee members. The Nomination and Remuneration Committee reviews the performance of the Individual Directors. A separate meeting of the Independent Directors was also held to review the performance of no independent Directors; performance of the Board as a whole and performance of the Chairman of the Company, taking into account the views of executive as well as non-executive Directors.
The criteria of evaluation of Board includes mechanism for evaluating its performance as well as that of its Committees and individual Directors, including the Chairman of the Board based on the criteria laid down by Nomination and Remuneration Committee which includes attendance, contribution at the meetings and otherwise, independent judgment, safeguarding of minority shareholders interest, adherence to Code of Conduct and business ethics, monitoring of regulatory compliance, risk management and review of internal control system, etc.
Declaration of Independence
Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the schedules and rules issued there under as well as Regulation 16(1)(b) of the Listing Regulations [including any statutory modification(s) or re-enactment(s) for the time being in force] so as to qualify themselves to be appointed as Independent Directors.
The Board meets at regular intervals to discuss and decide on the Company''''s policies and strategies apart from other Board matters. The calendar depicting the tentative dates of Board and Committee Meetings is circulated in advance to facilitate the Directors to arrange their schedule and to ensure participation in the meetings.
During the financial year 2015-16, six board meetings were held on 29th April, 2015; 29th May, 2015; 5th August, 2015; 3rd November, 2015; 12th February, 2016 and 11th March, 2016 respectively. The gap between two Board Meetings did not exceed 120 days.
Details of composition of Board and its committees and of the meetings held, attendance of the Directors and other relevant details are provided in the Corporate Governance Report.
The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013; Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.
POLICY ON DIRECTOR''''S APPOINTMENT AND REMUNERATION
The Board had originally constituted its Remuneration Committee much before the coming into force of the Companies Act, 2013 as part of good corporate governance practice. The current policy is to ensure that the Board and Top Management is appropriately constituted to meet its fiduciary obligations to stakeholders, to identify persons who are qualified to become Directors or who may be appointed in senior management as / or Key Managerial Personnel of the Company and that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors and meets appropriate benchmarks.
The remuneration paid to the Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with section 178 of the Companies Act, 2013 and regulation 19 of the Listing Regulations [including any statutory modification(s) or re-enactment(s) for the time being in force]. The Managing Director and CEO do not receive remuneration from any other Company.
The Nomination & Remuneration Committee, at its sole discretion, consider the integrity, qualification, expertise and experience of the person for appointment as a Director and then recommend the Board of his/her appointment. The policy has been attached as ''''Annexure - D'''' to the Boards Report.
Your Company has four Committees of the Board, namely:
Stakeholders'''' Relationship Committee Nomination and Remuneration Committee Corporate Social Responsibility Committee
Apart from the above, a Preferential Allotment Committee was also formed to take care of matters related to preferential issue of convertible warrants and conversion thereof.
Details of all the Committees along with their composition, terms of reference and meetings held during the year are provided in detail in the ''''Corporate Governance Report'''' which forms part of the Annual Report.
EVALUATION OF THE BOARD OF DIRECTORS
The Company has devised a policy for performance evaluation of its individual directors, the Board and the Committees constituted by it, which includes criteria for performance evaluation.
In line with the requirements of the Companies Act, 2013; Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Board has carried out an annual evaluation of its own performance, working of the Committees, and the Directors individually. The Board performance was evaluated based on inputs received from all the Directors after considering criteria such as Board composition and structure, effectiveness of processes and information provided to the Board, etc.
The Nomination and Remuneration Committee has also reviewed the performance of the individual directors based on their knowledge, level of preparation and effective participation in meetings, understanding of their roles as Directors, etc.
Corporate Governance is not just a destination, but a journey to constantly improve sustainable value creation. It is an upward-moving target that we collectively strive towards achieving.
Corporate Governance encompasses a set of systems and practices to ensure that the Company''''s affairs are being managed in a manner which ensures accountability, transparency and fairness in all transactions in the widest sense. The objective is to meet stakeholders'''' aspirations and societal expectations. Good governance practices stem from the dynamic culture and positive mindset of the organization. We are committed to meet the aspirations of all our stakeholders. This is demonstrated in shareholder returns, good credit ratings, governance processes and an entrepreneurial performance focused work environment. Additionally, our customers have benefited from high quality products delivered at extremely competitive prices.
Over the years, we have strengthened governance practices. These practices define the way business is conducted and value is generated. Stakeholders'''' interests are taken into account, before making any business decision. Nandan Denim Limited has the distinction of consistently rewarding its shareholders.
It has thus become crucial to foster and sustain a culture that integrates all components of good governance by carefully balancing the complex inter-relationship among the Board of Directors, Audit Committee, Finance, Compliance and Assurance teams, Auditors and the senior management. Our employee satisfaction is reflected in the stability of our senior management, low attrition across various levels and substantially higher productivity.
In accordance with regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and listing agreement entered into with BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE), the report containing the details of Corporate Governance systems and processes at Nandan Denim Limited forms part of this Annual Report.
Further, a certificate obtained from the statutory auditors, M/s J.T. Shah & Co., Chartered Accountants, regarding compliance of conditions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been annexed as part of the Corporate Governance Report.
The Securities and Exchange Board of India (SEBI), on 2nd September, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective from 1st December, 2015. Accordingly, all listed entities were required to enter into the Listing Agreement within six months from the date of notification of the regulations. The Company entered into Listing Agreement with BSE Limited and the National Stock Exchange of India Limited during February 2016.
The paid up Equity Share Capital of the Company as on 31st March, 2016 was C45.54 crores. There has been no change in the Equity Share Capital of the Company during the year.
Nandan Denim Limited had taken shareholder''''s approval at the Annual General Meeting of the Company conducted on 29th September, 2015 for issue of 25,00,000 convertible warrants to a non - promoter entity at a conversion price of C200/- (Rupees Two Hundred only) each. Pursuant to in - principle approval received from stock exchanges, the convertible warrants were allotted on 9th November, 2015. The entire amount of C50.00 crores (Rupees Fifty crores only) was received in tranches. Thereafter, the warrants were converted into equity shares in the month of May, 2016. Listing approval and trading approval has been received from both the exchanges.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report forms an integral part of this report and gives details of the overall industry structure, economic developments, performance and state of affairs of your Company''''s business, internal controls and their adequacy, risk management systems and other material developments during the financial year 2015-16.
In accordance with Section 177 of the Companies Act, 2013; Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Whistle Blower Policy to address the genuine concerns, if any, of the employees wherein employees can raise any suspected or actual violations of the Code of Conduct. Specifically, employees can raise concerns regarding any discrimination, harassment, victimization, any other unfair practice being adopted against them or any instances of fraud by or against the Company.
The details of the same have been stated in the Report on Corporate Governance and the policy can also be accessed on the Company''''s website at http://www.nandandenim.com/Pdf/ WhistleBlowerPolicy.pdf.
CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING
The Board of Directors has adopted the Insider Trading Policy in accordance with the requirements of the SEBI (Prohibition of Insider
Trading) Regulation, 2015 for fair disclosure of unpublished price sensitive information and prevention of insider trading.
The Insider Trading Policy of the Company lays down guidelines and procedures to be followed, and disclosures to be made while dealing with shares of the Company, as well as the consequences of violation. The policy has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company securities.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors state that:
i. in the preparation of the annual financial statements for the year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. such accounting policies have been selected and applied consistently and made such 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 as at the end of the financial year 31st March, 2016 and of the profit and loss of the Company for that period;
iii. proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the annual financial statements have been prepared on a going concern basis;
v. internal financial controls have been laid down and followed by the Company and that such internal financial controls are adequate and are operating effectively; and
vi. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
During the year under review, the Company has neither accepted nor renewed any deposits from public within the meaning of Section 73 and 74 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 [including any statutory modification(s) or re-enactment(s) for the time being in force].
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under section 134(3)(M) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, has been annexed as ''''Annexure
- A'''' to this Report.
ENVIRONMENT AND POLLUTION CONTROL
Nandan Denim Limited strives to maintain good standards of environmental care and ensures that increasing level of operations do not adversely impact standards of health and environment. To combat pollution and strengthen the area ecology, considerable emphasis is placed on trees. All manufacturing facilities possess the required environmental clearance from the respective Pollution Control Boards and do comply with the relevant statutory provisions.
The Company is well aware of its responsibility towards a better and cleaner environment. Our efforts in environment management go well beyond mere compliance with statutory requirements.
HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT
Your Company attaches significant importance to continuous up gradation of Human Resources for achieving the highest levels of efficiency, customer satisfaction and growth. As part of the overall HR Strategy, training programs have been organized for employees at all levels through both internal and external faculties during the year under review. As on 31st March, 2016, the employee strength was approximately 2900.
The industrial relations during the year under review continued to be cordial. The Directors place on record their sincere appreciation for the services rendered by employees at all levels.
PARTICULARS OF EMPLOYEES
The information required pursuant to section 197(12) of the Companies Act, 2013read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 in respect of employees of the Company, will be provided upon request. In terms of section 136(1) of the Companies Act, 2013, the Report and Accounts are being sent to the shareholders and others entitled thereto, excluding the information on employees'''' particulars which is available for inspection by the shareholders at the corporate office of the Company during business hours on working days of the Company upto the date of the ensuing Annual General Meeting. If any shareholder is interested in obtaining a copy thereof, such shareholder may write to the Company Secretary in this regard.
None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his / her spouse and dependent children) more than two percent of the equity shares of the Company.
The ratio of remuneration of each director to the median of employees'''' remuneration as per Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Board''''s report.
M/s. J.T. Shah & Co., the Statutory Auditors of the Company, were appointed for a period of five years at the Annual General Meeting of the Company held on 15th September, 2014. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the Auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. J.T. Shah & Co., Chartered Accountants, as Statutory Auditors of the Company is placed for ratification by the shareholders. In this regard, the Company has received a written consent and certificate stating that they satisfy the criteria provided under section 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors), Rules, 2014 and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules issued there under. As required under the Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. J.T. Shah & Co., Chartered Accountants, have also confirmed that they hold a valid certificate issued by the Peer Review Board of Institute of Chartered Accountants of India (ICAI) as required under the Listing Regulations.
The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013 [including any statutory modification(s) or reenactments) for the time being in force].
The Auditors'''' Report for the financial year ended 31st March, 2016 does not contain any qualification, reservation or adverse remark.
The Board of Directors of the Company, on the recommendations made by the Audit Committee at its meeting held on 10th August, 2016 has approved the appointment of M/s. A.G. Tulsian & Co., Cost Accountants [Firm Registration No. 100629] as the Cost Auditor of your Company for the financial year 2016-17 to conduct the audit of the cost records of your Company. The remuneration proposed to be paid to the Cost Auditor, subject to the ratification by the members at the ensuing AGM would be not exceeding C50,000/- (Rupees Fifty Thousand Only) plus taxes and out of pocket expenses, if any.
Your Company has received consent from M/s. A.G. Tulsian & Co., Cost Accountants, to act as Cost Auditor for conducting audit of cost records for the financial year 2016-17 along with a certificate confirming their independence and arm''''s length relationship.
In terms of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of your Company at its meeting held on 10th August, 2016 has appointed Ms. Geeta Serwani of M/s. Geeta Serwani & Associates, Practicing Company Secretary [Membership No.: 24479 and Certificate of Practice No.: 8842] as the Secretarial Auditor to conduct an audit of the secretarial records for the financial year 2016-17.
The Company has received consent from Ms. Geeta Serwani to act as the auditor for conducting audit of the secretarial records for the financial year ending 31st March, 2017.
The Secretarial Audit Report for the financial year ended 31st March, 2016 is annexed herewith as Annexure - C to this report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.
DISCLOSURE UNDER SCHEDULE V(F) OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015
The Company does not have any Unclaimed Shares issued in physical form pursuant to Public Issue / Rights Issue.
RELATED PARTY TRANSACTIONS
During the financial year 2015-16, your Company has entered into transactions with related parties as defined under section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, all of which are in the ordinary course of business and on arm''''s length basis and in accordance with the provisions of the Companies Act, 2013, read with the Rules issued there under; Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, there were no transactions with related parties which qualify as material transactions under the Listing Regulations.
All transactions with related parties were reviewed and approved by the Audit Committee. Prior omnibus approval was granted by the Audit Committee for related party transactions which are of repetitive nature, entered in the ordinary course of business and are on arm''''s length basis in accordance with the provisions of Companies Act, 2013 read with the Rules issued there under; Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The details of the related party transactions as per Accounting
Standard 18 are set out in Note 39 to the Financial Statements forming part of this report.
The policy on Related Party Transactions is available on the website of the Company at http://www.nandandenim.com/Pdf/ RelatedPartyTransactionPolicy.pdf
Form AOC - 2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as Annexure - F to the Directors Report.
LOANS AND INVESTMENTS BY THE COMPANY
Details of loans, guarantees and investments under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on 31st March, 2016, are set out in Notes to the Financial Statements forming part of this report.
DETAILS OF INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS
Your Company has put in place adequate internal financial controls with reference to the financial statements.
Nandan Denim Limited has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 1956 to the extent applicable. These are in accordance with generally accepted accounting principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Statutory Auditors.
The Company operates in SAP, an ERP system and has many of its accounting records stored in an electronic form and backed up periodically. The ERP system is configured to ensure that all transactions are integrated seamlessly with the underlying books of account. The Company has automated processes to ensure accurate and timely updating of various master data in the underlying ERP system.
The management periodically reviews the financial performance of your Company against the approved plans across various parameters and takes necessary action, wherever necessary.
Your Company has a code of conduct applicable to all its employees along with a Whistle Blower Policy which requires employees to update information accurately. Any non - compliance noticed is to be reported and auctioned upon in line with the Whistle Blower Policy.
The Company gets its standalone accounts audited every quarter by its Statutory Auditors.
The Company has a well-defined risk management framework in place. Further, it has established procedures to periodically place before the Board, the risk assessment and management measures. As such, there are no risks which in the opinion of the Board threaten the existence of the Company. However, the details of the risks faced by the Company which may pose challenges and the mitigation thereof are discussed in detail in the Management Discussion and Analysis Report that forms part of the Annual Report.
POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
In order to prevent sexual harassment of women at workplace, a new legislation - The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act, every Company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at workplace of any woman employee.
Nandan Denim Limited has adopted a policy for prevention of Sexual Harassment of Women at Workplace and has constituted the Internal Complaints Committee (ICC) with an NGO as one of its Members. Our policy assures discretion and guarantees no retaliation to complainants. We follow a gender-neutral approach in handling complaints of sexual harassment and we are compliant with the law of the land wherever we operate. Further, adequate awareness programmes were also conducted for the employees of the Company.
During the financial year 2015-16, no cases in the nature of sexual harassment were reported at any workplace of Nandan Denim Limited.
CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted Corporate Social Responsibility Committee in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014. The Corporate Social Responsibility Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the activities to be undertaken by the Company. The CSR policy may be accessed on the Company''''s website at the link: http:// www.nandandenim.com/Pdf/CorporateSocialResponsibilityPolicy. pdf.
The CSR Committee of the Board consists of Dr. Yasho Verdhan Verma (Independent Director) as Chairman. Mr. Giraj Mohan Sharma (Independent Director) and Mr. Vedprakash Chiripal (Promoter Director) are its members.
Over the years, the Company has aligned its business processes and goals to make a more deep-rooted impact on the society''''s sustainable development. A detailed update on the CSR initiatives of the Company is provided in the Corporate Social Responsibility and Sustainability Report, which forms part of the Annual Report.
As a responsible corporate citizen, the Company has been implementing societal activities since many years. As per the strict interpretation of the new CSR rules, some of these initiatives may not be eligible under the 2% CSR spend. As these activities are integral to the business, the Company has decided to continue with them.
During the year, the Company was in the process of evaluating the focus areas / locations of intervention for CSR activities to cater to the pressing needs of society and deliver optimal impact. As a socially responsible Company, your Company is committed to increase its CSR impact and spend over the coming years, with its aim of playing a larger role in India''''s sustainable development by embedding wider economic, social and environmental objectives.
For the year ended 31st March, 2016, the calculated amount towards its CSR activities as required under the Act lies unspent. The reason for not spending the required amount towards CSR activities was mainly due to extraneous factors and due to better negotiation by the Company with the service providers / external agencies which resulted into savings and ultimately could not be spent as budgeted. The Company has been however extremely committed towards exercising its social responsibilities and is dedicated to spend, to achieve better results. The Company is confident about its work in the social space and is sensitive to the requirements of the Companies Act, 2013. In view of the same, your Company is confident of a turnaround as far as the CSR numbers are concerned in the next financial year.
The Annual Report on Corporate Social Responsibility u/s 135 of the Companies Act, 2013 providing necessary disclosures is annexed as Annexure - B to this Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return as on 31st March, 2016 in Form MGT - 9 in accordance with Section 92(3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure
- E to this report.
CEO & CFO CERTIFICATION
In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the certification by the Chief Executive Officer and Chief Financial Officer on the financial statements and internal controls relating to financial reporting has been obtained.
A copy of the certificate on the financial statements for the financial year ended 31st March, 2016 is annexed as Annexure to the Corporate Governance Report.
SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''''S OPERATIONS IN FUTURE
There are no significant / material orders passed by the regulators or courts or tribunals impacting the going concern status of your Company and its operations in future.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of business of the Company during the financial year ended 31st March, 2016.
During the year under review, ICRA assigned credit rating of A- for Long Term with stable outlook and A2 for Short Term for Nandan Denim Limited.
The assigned ratings take into account NDL''''s strong market position in the domestic denim industry, established distribution network and the extensive industry experience of its promoters. The rating further derives comfort from partially integrated operations of the Company and the plans for backward integration within the denim value chain which should help the Company respond to industry pressures and improve its profitability over the long term. The ratings also take into account the improving financial risk profile of NDL characterized by consistent growth in scale and profitability resulting in improvement in capital structure and debt protection metrics. ICRA further notes that company is in the midst of a large capex plan towards backward integration which will benefit from various government incentive schemes and on stabilization of the operations, should result in strengthening of the operational risk profile of Nandan Denim Ltd.
In order to save environment by cutting down the consumption of paper, the Ministry of Corporate Affairs (MCA) has introduced "Green Initiative in Corporate Governance" by allowing paperless compliance by companies under the provisions of the Companies Act, 2013. MCA had further announced that the Directors of the Company may participate in a meeting of Board or Committee of Directors, under the provisions of the Companies Act, through electronic mode. Participation of Directors in the Board or its Committee meetings through video conferencing is an approved way of attending the meetings and such participation is considered for the purposes of quorum, authority, etc. The Companies are also mandated to conduct the postal ballot through electronic means also. The facility of electronic voting was offered to the shareholders for the postal ballot process undertaken by the Company for approval of issue of shares on preferential basis in February, 2015, the issue was later on withdrawn. In future, if any requirement of passing resolutions through postal ballot, Nandan Denim Limited will conduct the ballot process in the e-voting mechanism.
NDL started sending documents like notices convening General Meetings, Financial Statements, etc. including Annual Reports in electronic form, to the email addresses made available to us by the depositories from time to time. We appreciate the initiative taken by MCA as it helps in prompt receipt of correspondence and also avoids delay or losses caused through post. Therefore, we are publishing only the statutory disclosures in the print edition of the Annual Report. Annual Report containing additional data is available on our website namely www.nandandenim.com.
Further, as a member, you will be entitled to be furnished with a copy of the above mentioned documents as required, upon receipt of a requisition any time. We would appreciate your support on our desire to participate in the green initiative.
The Company has not issued equity shares with differential voting rights as to dividend, voting or otherwise; and
The Company does not have any ESOP scheme for its Directors / employees.
Your Directors would like to express their sincere appreciation for the co-operation and assistance received from shareholders, bankers, financial institutions, regulatory bodies 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.
For and on behalf of the Board of Directors
Vedprakash Chiripal Brijmohan Chiripal
Place: Ahmedabad Chairman Managing Director
Date: 10th August, 2016 DIN: 00290454 DIN: 00290426