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DIRECTOR'S REPORT

Restile Ceramics Ltd.

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Market Cap. (₹) 23.69 Cr. P/BV -2.40 Book Value (₹) -1.00
52 Week High/Low (₹) 5/2 FV/ML 10/1 P/E(X) 0.00
Bookclosure 20/09/2019 EPS (₹) 0.00 Div Yield (%) 0.00
Year End :2018-03 

The Directors are pleased to present the 32nd Annual Report of the Company together with its Audited Financial Statements for the year ended March 31, 2018.

Financial Results

Rs. Lakhs

Particulars

2017-18

2016-17

Revenue From Operations

66.25

25.95

Other Income

42.53

2.42

EBITDA

(31.68)

(55.39)

Interest and Financial charges

0.17

3.04

Depreciation

625.95

690.44

Profit/(Loss) before taxes and Exceptional Items

(657.80)

(791.19)

Exceptional Items

349.98

42.06

Provision for taxes

(6.65)

0.00

Profit / (Loss) for the Year

(314.47)

(748.87)

Company Performance

The Company achieved a turnover of Rs.66.25 Lakhs for the period ended March 31, 2018; increased by Rs.40.30 Lakhs (155.29%) as compared to previous year.

The total expenditure for the period ended March 31, 2018 stood at Rs.765.58 Lakhs, decreased by Rs.53.99 Lakhs (6.59%) as compared to previous year.

The Loss (EBITDA) before Depreciation, Finance Cost and Tax for the year ended March 31, 2018 amounted to Rs. 31.68 Lakhs, decreased by Rs.23.71 Lakhs (42.81%) as compared to previous year.

The Loss before tax and Exceptional item(s) for the year ended March 31, 2018 amounted to Rs.657.80 Lakhs, decreased by Rs.133.39 Lakhs (16.86%) as compared to previous year.

The tax expense for the year ended March 31, 2018 was Rs.6.65 Lakhs. The Loss after tax for the year ended March 31, 2018 stood at Rs.314.47 Lakhs as against a loss of Rs.748.87 Lakhs of the previous year. No transfer was made to General reserve during the year ended March 31, 2018.

Dividends

Your directors regret to state that in view of the continuous losses suffered by the company no dividend has been recommended for the year ended March 31, 2018.

Share Capital

The Authorised Share Capital of the Company as on date of Balance Sheet is Rs.100,00,00,000/- divided into 10,00,00,000 equity shares of Rs.10/- each.

The paid up share capital of the company as on date of balance sheet is Rs.98,27,92,390/- divided into 9,82,79,239 equity shares of Rs.10/- each.

During the year under review, the company has neither increased the Authorised share capital nor allotted any equity shares

Borrowings

The Company’s borrowings as at March 31, 2018 stood at Rs.3921.74 lakhs as against Rs.4166.48 lakhs as at March 31, 2017.

Fixed Deposits

The Company has not accepted any fixed deposits, within the meaning of section 73 of the companies Act 2013, Read with the Companies (Acceptance of Deposits) Rules, 2014 during the period under review.

Information about Subsidiary / Joint Ventures

Your Company does not have any subsidiary or Joint Ventures nor is a subsidiary or Joint Venture to any other Company.

Particulars of related party contracts and other arrangements under section 188 of the company

All Related Party Transactions that were entered into during the financial year were on an arm’s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

All Related Party Transactions are placed before the Audit Committee for approval. A statement containing the details of all Related Party Transactions has been placed before the Audit Committee for its review on a quarterly basis.

The Policy on materiality of related party transactions and on dealing with related party transactions as approved by the Board may be accessed on Company’s website. There were transactions during the year which are given in Form AOC 2 as an annexure to this report.

Implementation of Risk Policy

Regulation 21 of SEBI (LODR) requires the top 100 Companies to constitute a Risk Management Committee. This regulation is not applicable to your company. The company however has appointed an internal auditor, whose terms of reference among other things include the evaluation of Internal Control Systems and inform the management of probable lapses. The Audit Committee and the Board of directors have from time to time also identified the risks and opportunities. This practice seeks to create transparency, minimize adverse impact on business objective and enhance the Company’s competitive advantage. The two key components of risks are the probability (likelihood) of occurrence and the impact (consequence) of occurrence, if the risk occurs. Risk is analyzed by combining estimates of probability and impact in the context of existing control measures.

The Company has laid down procedures to inform Audit Committee as well as the Board of Directors about the risk assessment and management procedures and status. These procedures are periodically reviewed to ensure that the executive management monitors and controls risks.

Directors and Key Managerial Personnel (KMP)

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of Independence as prescribed both under the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Mr. Tribhuvan Simh Rathod, Managing Director, Mr. M. Subba Rao, Chief Financial Officer and Ms. Rekha Singh, Company Secretary are designated as Key Managerial Personnel of the Company pursuant to Section 203 of the Companies Act, 2013.

Board and Committee Meetings

The Board of directors has met seven (7) times during the year to review and consider the quarterly financials of the Company amongst other things. Details of the composition of the Board and its Committees and of the meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Directors' Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2017-18.

Accordingly, pursuant to Section 134(3) (c) and 134(5) of the Act, the Board of Directors to the best of their knowledge and ability, confirm that:-

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

ii. they have selected such accounting policies and applied them consistently 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 March 31, 2018 and of the profit or loss of the Company for that period;

iii. they have taken proper and sufficient care for 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. they had prepared the annual accounts on a going concern basis;

v. they have laid down the internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Internal Controls and Systems

The company has an internal control system, commensurate with size and, scale and complexity of its operations.

Vigil Mechanism/Whistle Blower Policy

The Company has adopted a Whistle Blower Policy to provide a mechanism for the Directors and employees to report genuine concerns about any unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct. The provisions of this policy are in line with the provisions of Section 177 (9) of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015/Listing Agreement.

Significant and Material Orders passed by the Regulators

During the year under review, no significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and future operation of the Company.

Corporate Social Responsibly

The company has incurred loss in the current year and past 3 years also. Even though Corporate Social Responsibility is not mandatory, your Company is intrinsically associated with the society and environment by upholding its businesses with transparency and commitment.

Remuneration Policy

The Company had adopted a Remuneration Policy for the Directors, Key Managerial Persons and other employees, pursuant to the provisions of the Act.

The key principles governing the Company’s Remuneration Policy are as follows:

Remuneration for Independent Directors and Non-Independent Non-Executive Directors

- Independent Directors (ID) and Non-Independent Non-Executive Directors (NINED) may be paid sitting fees for attending the meetings of the Board and of Committees of which they may be members as recommended by the NRC and approved by the Board.

- Overall remuneration should be reasonable and sufficient to attract, retain and motivate Directors aligned to the requirements of the company; taking into consideration the challenges faced by the Company and its future growth imperatives.

- Remuneration paid should be reflective of the size of the Company, complexity of the sector/ industry/Company’s operations and the Company’s capacity to pay the remuneration and be consistent with recognized best practices.

- The aggregate commission, if any, payable to all the NEDs and IDs will be recommended by the NRC to the Board based on Company performance, profits, return to investors, shareholder value creation and any other significant qualitative parameters as may be decided by the Board. The NRC will recommend to the Board the quantum of commission for each Director based upon the outcome of the evaluation process which is driven by various factors including attendance and time spent in the Board and Committee Meetings, individual contributions at the meetings and contributions made by Directors other than in meetings.

- The remuneration payable to Directors shall be inclusive of any remuneration payable for services rendered in any other capacity, unless the services rendered are of a professional nature and the NRC is of the opinion that the Director possesses requisite qualification for the practice of the profession.

Remuneration for Managing Director (MD)/ Key Managerial Personnel (KMP)/ rest of the Employees

- The extent of overall remuneration should be sufficient to attract and retain talented and qualified individuals suitable for every role. Hence remuneration should be market competitive, driven by the role played by the individual, reflective of the size of the Company, complexity of the sector/ industry/ Company’s operations and the Company’s capacity to pay, consistent with recognized best practices and aligned to any regulatory requirements.

- Basic/ fixed salary is provided to all employees to ensure that there is a steady income in line with their skills and experience. In addition, the Company provides employees with certain perquisites, allowances and benefits to enable a certain level of lifestyle and to offer scope for savings. The Company provides retirement benefits as applicable.

It is affirmed that the remuneration paid to Directors, KMP and all other employees is as per the Remuneration Policy of the Company.

Evaluation of Board of Directors

The Board of Directors of the Company presently comprises (8) Non-Executive Directors and one Executive Director viz., the Managing Director. The Directors appointed on the Board are from diverse fields relevant to the Company’s business, having long-standing experience and expertise in their respective fields. They have considerable experience in managing large corporate and have been in public life for decades.

Non-Executive Directors add substantial value through the deliberations at the meetings of the Board and Committees thereof. To safeguard the interests of the investors, they also play a control role. In important Committees of the Board such as Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee etc., the Directors play an important role by contributing to the deliberations of the Committee Meetings. Besides contributing at the meetings of the Board and Committees, the Non-Executive Directors also have off-line deliberations with the Management of the Company and add value through such deliberations.

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 and non-executive directors.

Listing

The Equity Shares of your Company are listed at BSE Limited, Mumbai.

The Listing fees to these Stock Exchanges and custodian fees to NSDL and CDSL have been paid by the Company for the financial year 2017-18.

Auditors

i. Statutory Auditors:

M/s M.S Krishnaswami & Rajan, Chartered Accountants,(Firm Reg No.01554S), Who are statutory auditors of the company to hold office up to the forth coming Annual General Meeting and are eligible for re-appointment is recommended by the Board for re-appointment as statutory auditors to hold office till conclusion of 33rd Annual General Meeting.

Pursuant to the provisions of Sec.139 of the Companies Act, 2013 and the rules framed there-under, the company has obtained written confirmation from M.S Krishnaswami & Rajan, Chartered Accountants, (Firm Reg No.01554S) that their re-appointment, if made, would be in conformity with limits specified in the said section.

Regarding the Qualifications/Comments of auditors in their report, the directors wish to state:

In order to make companies business viable, the company has drawn plans to merge Two associate companies (Atreya Finance Private Ltd and Bell Granito Ceramica Ltd) with the company. For this purpose a modified draft merger scheme was submitted to BIFR and was pending before BIFR. However as the BIFR stands dissolved the Company plans to restart the Merger Process afresh before the NCLT.

Further in respect of qualifications/Comments of the auditor company had sought relief from BIFR in the modified draft rehabilitation scheme submitted which shall be resubmitted to NCLT (with necessary modifications). Once the approval of said Scheme is received all the qualifications/comments of auditors in their report will get cleared.

ii. Cost Audit

As per the provisions of Section 148(1) of the Companies Act, 2013, Read with Companies (Cost Records and Audit) Rules 2014, as amended from time to time, the maintenance of cost records and the requirement of audit of cost records in accordance with the applicable rules are not applicable to the company.

iii. Secretarial Audit

Pursuant to the provisions of section 204 of the companies act 2013 and rules made thereunder the company has appointed M/s N Madhavi, Practicing Company Secretary (C.P No.11732) to undertake the Secretarial Audit of the company. The secretarial audit report is included as Annexure - B and forms an integral part of this report.

Corporate Governance Report, Management Discussion & Analysis Report

As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the report on Management Discussion & Analysis, Corporate Governance as well as the Auditor’s certificate on the compliance of Corporate Governance thereon are attached and form part of the Annual Report.

Conservation of Energy, Technology Transfer and Foreign Exchange Earnings and Outgo

Particulars pursuant to the provisions of section 134(3)(m) of the Act, read with the Companies (Accounts) Rules, 2014 is furnished in the Annexure to this report.

Particulars of Employees & Remuneration

The information required under section 197(12) of the Act, read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in the Annexure 3 to this report.

The information required under Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in the Annexure forming part of the Report. In terms of the first proviso to section 136 of the Act, the Report and accounts are being sent to the shareholders excluding the aforesaid Annexure. Any shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company.

Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at its workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace.

During the Year under review the company has not received any complaints on sexual harassment.

Extract of Annual return

The details forming part of the extract of the annual return in form MGT-9 as required under section 92 of the companies Act 2013 is included in this Report as Annexure -A and forms as integral part of this Report.

Appreciation

Your director’s wish to place on record their appreciation for the contribution made by the employees at all levels but of whose hard work and support your company’s achievements would not have been possible. Your directors also wish to thank its customers, dealers, agents, suppliers, investors and bankers and various State and Central Government Agencies. The Directors also take this opportunity to thank the shareholders for their continued confidence reposed in the Management of the company.

By Order of the Board of Directors

Sd/- Sd/-

Place: Vadodara Tribhuvan Simh Rathod Narayanan Subramanian

Date: 26.6.18 (DIN 01996833) (DIN 02577983)

Managing Director Director

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