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Amarjothi Spinning Mills Directors Report, Amarjothi Spin Reports by Directors
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Amarjothi Spinning Mills

BSE: 521097|NSE: AMARJOTHI|ISIN: INE484D01012|SECTOR: Textiles - Spinning - Cotton Blended
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Directors Report Year End : Mar '18    Mar 16

The Directors have pleasure in presenting the Thirtieth Annual Report together with the audited accounts of your Company for the year ended 31st March 2018.

FINANCIAL RESULTS

2017-2018 Rs.

2016-2017 Rs.

Revenue from Operations

1894514522.87

2168202787.41

Other Income

43714528.21

44713849.88

Total Revenue

1938229051.08

2212916637.29

Less: Total Expenses

1808487817.76

2001064961.97

Profit before Tax

129741233.32

211851675.32

Profit after Tax

119266233.32

137846675.32

Surplus brought forward

793306528.86

689305971.54

Amount available for appropriation

912572762.18

827152646.86

Appropriations to :

General Reserve

11927000.00

13785000.00

CSR Reserve

0.00

3562878.00

Dividend paid including Tax

16248282.00

16248282.00

Previous year Income tax adjusted

3038477.13

249958.00

Surplus carried to balance sheet

881359003.05

793306528.86

TOTAL

912572762.18

827152646.86

STATE OF COMPANY’S AFFAIRS AND FUTURE OUTLOOK:

OPERATIONS

The Company’s sales decreased by 12.62% to Rs.18945.14 Lakhs during the year under review as against Rs.21682.02 Lakhs in the previous year. Profitability of the company also decreased due to this. This reduction resulted due to local market condition.

1) YARN DIVISION

Your Directors inform you that yarn division continues to perform well. We hope that in future also our performance will improve.

2) PROCESSING UNIT

The Processing unit is fully utilized for the dyeing of material of our spinning unit. In addition to our own dyeing, we process our material in outside dyeing also.

FUTURE PROSPECTS:

The Company will continue to perform well in the domestic market. The Company is in the process of implementing several cost saving measures including modernization, which will make the product more competitive.

CHANGE IN NATURE OF BUSINESS, IF ANY:

There were no changes in Nature of Business during the year 2017-2018.

DIVIDEND

Your Directors are glad to recommend a dividend of Rs. 2.00 per share (20% on the Face value) for the year ended 31st March 2018 absorbing a sum of Rs.1,35,00,000/- for the approval of the share holders at the ensuing Annual General Meeting. The dividend will be free of tax in the hands of shareholders since the Company will be paying the Dividend Distribution Tax at the prescribed rate.

GENERALRESERVE

During the year, your Company has transferred an amount of Rs.1, 19, 27,000.00 to the General Reserve.

CHANGES IN SHARE CAPITAL:

There were no changes in Share Capital of the Company during the Financial Year 2017-2018.

DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS:

The Company has not issued any Equity Shares with Differential Rights during the Financial Year 2017-2018.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS:

The Company has not provided any Stock Option Scheme to the employees during the year Under Review.

DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES :

The Company has not issued any Sweat Equity Shares during the year under review.

EXTRACT OF ANNUAL RETURN :

As required pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in the Form MGT-9 is annexed as a part of this report vide “ANNEXURE VI”.

NUMBER OF BOARD MEETINGS:

During the Financial Year 2017-18, 4 (Four) Meetings of the Board of Directors of the company were held on as given below. The details of Board Meeting and Attendance of Directors are disclosed in the Corporate Governance Report.

Date of meetings:

29.05.2017

28.07.2017

30.10.2017

31.01.2018

PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS UNDER SECTION 186:

The Company has not provided any Loan/Guarantee during the year under review. However the Company has made investments for a sum of Rs.20,00,000 in M/s. RPJ Textiles Limited as 100% wholly owned subsidiary for the purpose of acquiring raw material and Rs. 74000 in M/s. Premchander Wind Farms Private Limited as 27% share of capital for the purpose of captive consumption of power generated by their wind mills.

RELATED PARTY TRANSACTIONS:

All transactions entered into by the Company with related parties were in the ordinary course of business and on an arm’s length basis. The Company did not enter into any material transaction with related parties, under Section 188 of the Companies Act, 2013, during the year. Form AOC-2, as required under Section 134 (3) (h) of the Act, read with Rule 8 (2) of the Companies (Accounts) Rules 2014, is attached as part of this report, vide Annexure III (i). Further, the Company’s policy on Related Party Transactions is attached as part of this report, vide Annexure III (ii).

EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS:

There are no qualifications, reservations or adverse remarks or disclaimers made by the auditors for the year.

MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report.

SECRETARIAL AUDIT:

In terms of Section 204 of the Companies Act, 2013 and the rules there under, the Company has appointed Mr. R.Ramchandar B.com, ACS, LLB as the Secretarial Auditor of the Company. Secretarial Audit Report in Form MR-3 as provided by Mr. R. Ramchandar is annexed to this Report vide “ANNEXURE V”.

REMUNERATION OF DIRECTORS & KMP:

Disclosure pursuant to Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed vide “ANNEXURE VII”.

DETAILS OF DIRECTORS & KMP APPOINTMENT AND RESIGNATION:

1) Mrs. A.Manjusri , company secretary has resigned with effect from 05.05.2017

2) Mrs. K.Mohanapriya, was appointed as Whole Time Company Secretary w.e.f 29.05.2017

DIRECTORS RETIRE BY ROTATION:

Mr. N.Radhakrishnan, retires by rotation and, being eligible, offers himself for re- election.

ANNUAL EVALUATION BY THE BOARD

The Board has made a formal evaluation of its own performance and that of its committees and individual directors as required under Section 134(3) (p) of the Companies Act, 2013.

DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL:

During the year 2017-18, no significant and material Orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and company’s operations in future

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has a well-established internal financial control and risk management framework, with appropriate policies and procedures, to ensure the highest standards of integrity and transparency in its operations and a strong corporate governance structure, while maintaining excellence in services to all its stakeholders. Appropriate controls are in place to ensure: (a) the orderly and efficient conduct of business, including adherence to policies, (b) safeguarding of assets, (c) prevention and detection of frauds / errors, (d) accuracy and completeness of the accounting records and (e) timely preparation of reliable financial information.

DEPOSITS:

The Company has neither accepted nor renewed any deposits during the year under review.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information relating to Conservation of Energy, Foreign Exchange Earning and Out Go, Technology Absorption pursuant to section 134(3) (m) of the Act, read with rule 8 sub rule 3 of the Companies (Accounts) Rules, 2014 is attached as ANNEXURE -I which forms part of the report.

RISK MANAGEMENT POLICY:

This annual report has got a detailed chapter on management discussion and analysis on risk management stating about risk management by the Company. The Company has in place a Risk Management Policy and the risk management policy is periodically reviewed by the Board. The Company’s business model has Comprehensive and integrated risk management framework that comprises a clear understanding of strategy, policy initiatives, prudential norms, proactive mitigation and structured reporting. In addition, the Board periodically reviews and discusses all assets with significant risks, including deliberating on the sector- specific and systemic risks in the business environment. Other key variables monitored for risk are market condition and product costing.

CONSOLIDATED FINANCIAL STATEMENTS:

In accordance with the provisions of Section 129 (3) of the Companies Act, 2013, the Consolidated Financial Statements, drawn up in accordance with the applicable Accounting Standards, form part of the Annual Report.

The consolidated net profit for the year was Rs.12.927 cr. as against Rs. 15.194 cr. in the previous year. The Company’s consolidated net worth stood at Rs.110.757 cr. as on 31st March 2018.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company has one wholly owned subsidiary company M/s.RPJ Textiles Ltd., in which our company holds 100% of equity shares. The details are mentioned in AOC-1.

The Company has two Associate Companies M/s.Amarjothi Power Generation & Distribution co. Ltd and M/s.Premchander Wind Farms P ltd., in which our company holds 27.06% shares for the purpose of captive consumption of wind power. The details are mentioned in AOC-1.

RECEIPT OF ANY COMMISSION BY MD/WTD FROM A COMPANY OR FOR RECEIPT OF COMMISSION/ REMUNERATION FROM ITS HOLDING OR SUBSIDIARY.

The MD/WTD has not received any commission from other company/ its subsidiary.

REAPPOINTMENT OF INDEPENDENT DIRECTOR:

As there was no vacation of office of Independent Directors, the company did not reappoint any Independent Directors.

DECLARATION BY INDEPENDENT DIRECTOR:

The Company has received necessary declaration from each Independent Director of the Company under Section 149 (7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149 (6).

BOARD & AUDIT COMMITTEE:

The details regarding number of board meetings held during the financial year and composition of Audit Committee is furnished in the Corporate Governance Report.

NOMINATION AND REMUNERATION COMMITTEE POLICY:

The details regarding Nomination and Remuneration Committee Meeting held during the financial year is annexed to the Corporate Governance Report.

DISCLOSURE ON ESTABLISHMENT OF A VIGIL MECHANISM:

During the year, the Company adopted a Whistle Blower Policy and established the necessary vigil mechanism for Directors and Employees to report concerns about unethical behavior. The mechanism provides for adequate safeguards against victimization. Further, no person has been denied access to the Audit Committee.

The Whistle Blower Policy is available under the following web site:http://www.amarjothi.net

AUDITORS:

Mr. P.S.Sitaram, B.Sc., F.C.A., Chartered Accountant, Coimbatore, (Membership No.023033), retires and is eligible for re-appointment for the term of 1 (one) year from the conclusion of 30th Annual General Meeting until the conclusion of 31th Annual General Meeting of the Company. A certificate from the Auditors that they satisfy the Eligibility conditions prescribed under the Companies Act, 2013 and the Rules made there under (including satisfaction of criteria under section 141 of the Companies Act, 2013), has been received from them.

INTERNAL AUDITORS

Mr.M.S Sivakumar, Chartered Accountant, is appointed as internal auditor of the Company. He has played an important role in strengthening the Systems and internal Controls within the Company.

DISCLOSURE OF COST AUDITOR AND COST AUDIT REPORT

As per Section 148 of the Companies Act, 2013 read with Rules framed there under, M/s. Nagarajan& Co, Practicing Cost Accountants, ( Firm’s Membership No; 000088) were appointed as Cost Auditors for the financial year 2017-2018 to conduct cost audit of the accounts maintained by the Company in respect of the various products prescribed under the applicable Cost Audit Rules. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee. The requisite resolution for ratification of remuneration of cost Auditors by members of the Company has been set out in the Notice of ensuing annual general meeting. They have also been appointed as Cost Auditors for financial year 2018-19 by the Board of Directors, upon recommendation of Audit Committee, to conduct cost audit of the accounts maintained by the Company in respect of the various products prescribed under the applicable Cost Audit Rules.

The Cost Audit Report for the financial year 2017-18, issued by M/s. Nagarajan & Co, Cost Auditors, in respect of the various products prescribed under Cost Audit Rules will be filed within the due date prescribed by the Act.

CORPORATE GOVERNANCE

A detailed report on corporate governance, together with a certificate from the Statutory Auditors, in compliance with Reg 15(2) of the SEBI (LODR) Regulations, 2015 is attached as part of this report vide “ANNEXURE II”.

CORPORATE SOCIAL RESPONSIBILITY

Based on last three years average Net Profit, the Company is required to spend a sum of Rs.30,89,798, in the year 2017-18. The Company has paid the amount to the Prime Ministers Relief fund.

List of CSR Activities and Composition of CSR Committee is annexed herewith as “ANNEXURE IV”

CORPORATE SOCIAL RESPONSIBILITY POLICY PREAMBLE

At Amarjothi, CSR policy is to reach out and contribute to the social and economic development of the underserved in which we operate.

We believe in the trusteeship concept and provide skill development, advancement of education, medical relief, research and development, relief of the poor, advancement of any other object of public.

In doing so, we build a better, sustainable way of life for the weaker sections of society and raise country’s human development index.

CORPORATE SOCIAL RESPONSIBILITY PURPOSE STATEMENT

The Company shall seek to impact the lives of the disadvantaged by supporting and engaging in activities that aim to improve their wellbeing. We are dedicated to the cause of empowering people, educating them and in improving their quality of life. While we will undertake programmes based on the identified needs of the community, education and healthcare shall remain our priority. Across the different programme areas identified by the company, it would be our endeavour to reach the disadvantaged and the marginalised sections of the society to make a meaningful impact on their lives. We are committed to identifying and supporting programmes aimed at:

- Empowerment of the disadvantaged sections of the society through education, access to and awareness about financial services and the like;

- Provision of access to basic necessities like healthcare, drinking water & sanitation and the like to underprivileged;

- Work towards eradicating hunger and poverty, through livelihood generation and skill development; Supporting environmental and ecological balance through afforestation, soil conservation, rain water harvesting, conservation of flora & fauna, and similar programme;

- Promotion of rural sports, nationally recognized sports, paralympic sports and Olympic sports through training of sportspersons;

- Undertake rural development projects;

- Any other programme that falls under CSR purpose listed in SCHEDULE VII of the Companies Act, 2013 amended from time to time which are aimed at the empowerment of disadvantaged sections of the society.

SCOPE

This policy will apply to all projects/programmes undertaken as part the Company’s Corporate Social Responsibility and will be developed, reviewed and updated periodically with reference to relevant changes in corporate governance, international standards and sustainable and innovative practices. The policy will maintain compliance and alignment with the activities listed in Schedule VII and Section 135 of the Companies Act 2013 and the rules framed there under.

GOVERNANCE

The approval of the CSR policy and oversight is the responsibility of the Company’s Board of Directors. The responsibility of the CSR committee is to formulate the policy and to administer the policy through implementing partner(s) or via self-implementation. The CSR Committee shall provide guidelines for projects/partner selection to the respective HR or CSR teams, wherever applicable. The CSR committee is to ensure that projects/programmes are compliant with regulations and are monitored and reported effectively. As the Company’s CSR activities evolve, the policy may be revised by the CSR committee and approved by the Board of Directors.

CSR EXPENDITURE

The CSR Committee shall recommend to the Board the amount of expenditure to be incurred on the CSR activities to be undertaken by the company as approved by the Board. In case of any surplus arising out of CSR projects, the same shall not form part of business profits of the Company.

IMPLEMENTATION

The Company shall undertake CSR project/programmes identified by the CSR Committee and approved by the Board of Directors in line with the CSR Policy.

The Company shall implement its CSR programmes/projects:

1) Through an implementation partner that can be a public charitable trust or a society registered under applicable Acts or a Company registered under Section 8 of the Companies Act 2013; or

2) On its own, through the relevant HR or CSR department or through its own foundation (if applicable) specifically created for implementing its CSR initiatives.

The Company may enter into partnerships or alliances with NGOs, Trusts, or other Corporate Foundations etc. to effectively implement its CSR programmes/projects.

The Company can also implement programme(s) in collaboration with other company(ies), if permissible and feasible in such a manner that the CSR Committee is in a position to report separately on such projects / programs.

The Company can contribute to the Prime Minister’s National Relief Fund.

The Company shall formulate criteria and procedure for selection, screening and due diligence of its implementing partners.

MONITORING AND REPORTING

The CSR Committee will oversee the implementation and monitoring of all CSR projects/ programmes and periodic reports shall be provided for review to the Board. The Company will institute a well-defined, transparent monitoring and review mechanism to ensure that each CSR project/programme has:

1. Clear objectives developed out of the societal needs that may be determined through need assessment studies and research (secondary or primary);

2. Clear targets, time lines and measurable indicators, wherever possible;

A progress monitoring and reporting framework that is aligned with the requirements of Section 135 of the Companies Act 2013 and the CSR Rules.

PERSONNEL

In term of the provision of Section 197(12) of Act read with rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014 a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are annexed to this report as “ANNEXURE VIII”.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints were received during the year 2017-18.

DIRECTORS'' RESPONSIBILITY STATEMENT

Your directors confirm that

1. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

2. The directors had 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 the end of the financial year and of the profit of the Company for that period;

3. The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The directors had prepared the annual accounts on a going concern basis;

5. The directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

6. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your directors gratefully acknowledge the support and co-operation extended to your Company by all the customers, shareholders and bankers.

Your directors also place on record their appreciation of the tireless efforts of Team Amarjothi, a dedicated and loyal band of people who have displayed unswerving commitment to their work in these challenging times and helped the Company deliver good results.

The Company extends its thanks to the Central and State Government authorities for their continued co-operation and assistance.

MAY LORD VENKATESWARA SHOWER HIS BLESSINGS FOR THE CONTINUED PROSPERTIY OF THE COMPANY.

By Order of the Board

Place : Tirupur (Sd/-) N. RAJAN (Sd/-) R. PREMCHANDER

Date : 30.05.2018 Chairman Managing Director

DIN: 00390813 DIN: 00390795

Source : Dion Global Solutions Limited
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