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DIRECTOR'S REPORT

Trident Ltd.

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Market Cap. (₹) 2965.85 Cr. P/BV 0.99 Book Value (₹) 58.57
52 Week High/Low (₹) 76/52 FV/ML 10/1 P/E(X) 7.98
Bookclosure 10/08/2019 EPS (₹) 7.30 Div Yield (%) 5.15
Year End :2018-03 

Directors’ Report

Dear Members,

The Directors are pleased to present the 28th Annual Report and Audited Financial Statements of the Company for the financial year ended on March 31,2018.

Financial Results

The financial performance of your Company for the year ended on March 31,2018 is summarised below:

(Rs, million)

Particulars

Previous Year

Growth(%)

Total Income

46,705.4

47,728.9

-2.1

Total Expenses

42,787.4

43,344.0

-1.3

EBITDA

9,140.3

9,919.2

-7.9

EBITDA Margin

19.6%

20.8%

-120bps

Depreciation

4,040.3

4,1 24.1

-2.0

EBIT

5,100.1

5,795.1

-12.0

Interest (Finance Cost)

1,1 82.1

1,410.1

-16.2

Profit before tax

3,918.0

4,385.0

-10.6

Tax Expenses

1,280.6

1,015.2

26.1

Profit after tax

2,637.4

3,369.8

-21.7

Other Equity

23,990.9

22,149.2

8.31

EPS (Diluted) (Rs,)

5.1

6.6

-21.7

Cash Earnings per share (Rs,)

13.1

14.7

-11.02

Dividend (%)

15

15

0.0

Corporate Overview

The Company operates in diversified business segments viz. Home Textiles, Paper and Chemicals. The Company also has a captive power plant to cater the needs of its various business segments.

Results of Operations Financial performance and review

The total income of the Company during the year under review have been Rs, 4,6705.4 million as against Rs, 4,7728.9 million in the previous financial year. The Operating Profit (EBITDA) for the year stood at Rs, 9,140.3 million as compared to Rs, 9,919.2 million in the previous financial year, a decrease of 7.9 percent. The Company has earned a net profit of Rs, 2,637.4 million as against Rs, 3,369.8 million in the previous financial year, registering a decrease of 21.7 percent. During the year under review, the additions to Other Equity amount to Rs, 1,841.7 million.

The Company’s earnings per share was Rs, 5.1 and cash earnings per share was ^ 13.10 during the current year.

A detailed discussion on financial and operational performance of the Company is given under “Management Discussion and Analysis Report” forming part of this Annual Report.

Changes in Share Capital

The changes in Share Capital of the Company during the Financial Year ended March 31, 2018 are summarized as under:

(Amount in Rs,)

Date

Particulars

No. of

shares

Nominal

Value

Premium

per

share

Total

Securities

Premium

Equity share capital

Cumulative Issued & Paid up Share Capital

April 1,2017

Opening Balance

509,579,260

5,095,792,600

5,095,792,600

May 9,2017

Allotment under ESOP scheme

16,307

10

1.20

19,568

163,070

5,095,955,670

Issued & Paid Up Share Capital as on date

5,095,955,670

Consequent to the allotment, the Paid Up Share Capital of the Company as on date stands revised to Rs, 5,095.96million comprising of 509,595,567 Equity Shares of Rs, 10/- each as compared to Rs, 5,095.79 million comprising of 509,579,260 Equity Shares of Rs, 10/-each..

Dividend

Your Company has a dividend policy that balances the dual objectives of rewarding shareholders through dividends whilst also ensuring availability of sufficient funds for growth of the Company

The dividend distribution policy is annexed as Annexure VII and is also available on the official website of the Company at the following link: http://www.tridentindia.com/report/Dividend_ Distribution_Policy.pdf

Consistent with this policy during the year under review, the Board declared two Interim Dividends - 1st Interim Dividend of Rs, 0.6/-(6%) per equity share of Rs, 10/- each and 2nd Interim Dividend of Rs, 0.6/- (6%) aggregating to Rs, 1.2/- (12%) per equity share of Rs, 10/-each in its meeting held on August 12, 2017 & January 29, 2018, respectively. Your Directors are pleased to recommend a Final Dividend ofRs, 0.3/- (3%) per equity share ofRs, 10/-each for Financial Year 2017-18, for the approval of the equity shareholders at the ensuing Annual General Meeting. If approved, the total dividend payout (interim and final dividend) for the financial year 2017-18 will be Rs, 1.5/- (15%) per equity share ofRs, 10/-each at par with the total dividend of Rs, 1.5 (15%) per equity share of Rs, 10/- paid for the previous financial year 2016-17.

Contribution to the Exchequer

The Company contributed a sum of Rs, 281.6 million to the exchequer by way of Goods and Service Tax in addition to other direct taxes during the year under review.

Also, the Company contributed a sum of Rs, 43.3 million to the exchequer by way of Central Excise Duty which was applicable till June 30,2017.

Exports

The exports of the Company accounted 55 parent of net sales. During the year under review, export sales marginally decreased toRs, 25,169 million as againstRs, 26,665 million in the previous year.

Credit Rating

The Company follows a disciplined financial approach and has been continuously working on improving its financial risk profile. Your Directors are pleased to share that CRISIL has upgraded Long Term rating of the Company to ‘CRISIL A / Stable’ from ‘CRISIL A/ Stable’ and reaffirmed the Short Term rating as ‘CRISIL A1 ’. Also, CARE has upgraded Long Term rating of the Company to ‘CARE AA-/ Stable’ from ‘CARE A ’ & Short Term rating to ‘CARE A1 ’ from ‘CARE A1 ’.

These ratings symbolize low credit risk with adequate degree of safety regarding timely servicing of financial obligations.

Expansions/Modernisations

Keeping in view the current business synergies, the Company has proposed the expansion plans in the State of Madhya Pradesh with total capital outlay in tune of Rs, 7,200 crores by 2025:

Paper:

- Paper Unit with the capacity of 500 tonne per day Textile:

- Processing & CSP capacity in Bed Sheet

- Bed Linen Unit comprising of 500 looms

- Terry Towel Unit comprising of 300 looms

- Spinning unit comprising of 3 lacs spindles & 2000 Rotors

- Technical Textile Unit

- Garments/ Rugs/Top of Bed and Fashion Bedding Utilities:

- Co-gen Power Plant/ Solar Power Plant Multi-Specialty Mini Health Centre

The aforesaid projects shall be eligible for various incentives & benefits under Mega Projects Policies of the State and Central Government and are subject to technical feasibility, financial viability and evaluation.

Further the schedule of implementation shall be in a phased manner as may be approved by the Board from time to time, after financial closure & evaluation of all opportunities that will maximize value and is in the best interest of the Company & its stakeholders.

Consolidated Financial Statements

The Audited Consolidated Financial Statements prepared by the Company, in accordance with the Indian Accounting Standards [Ind AS], are provided in the Annual Report of the Company.

Subsidiary and Associate Companies

As on the last day of financial year under review, the Company had two subsidiaries - Trident Global Corp Limited, the Indian wholly owned subsidiary and Trident Europe Limited, the overseas wholly owned subsidiary.

Trident Global Corp Limited majorly serves as the Retail Arm of the Company. It is the face of the Company in the domestic markets. Further, Trident Europe Limited provides the proximity to the European Markets & enhances the Brand Presence of the Company.

The audited accounts of the Subsidiary Companies are available on the official website of the Company at http://www. tridentindia.com/report/Audited_Financial_Statements_FY-2017-18_TGCL_Subsidiary.pdf and http://www.tridentindia. com/report/Audited_Financial_Statements_FY-2017-18_TEL_ Subsidiary.pdf

The annual accounts of the Company and of the Subsidiary Companies are open for inspection by any investor at the Registered Office of the Company. The Company will also make available copies of these documents to investors upon receipt of request from them. The investors, if they desire, may write to the Company to obtain a copy of the financial statements of the Subsidiary Companies.

The Company has adopted Policy for determining Material Subsidiary and the same is also available on the official website of the Company at the following link: http://www.tridentindia. com/report/Policy_for_Determ in ing_Material_Subsidiary.pdf Further, Trident Infotech Inc. and Trident Global Inc. are two foreign Associate Companies of the Company. Lotus Tex park Limited is an Indian Associate Company of the Company. The statement containing highlights of performance of each Subsidiary & Associate Company, salient features of their financial statements for the financial year ended on March 31, 2018 and their contribution to the over Performance of the Company is attached as Annexure ‘AOC-I’ and Note 48 to the consolidated financial statements of the Company for the reference of the members. The same is not being repeated here for the sake of brevity.

Directors

Mr Dinesh Kumar Mittal [DIN: 00040000] was appointed as an Additional Directors of the Company by the Board of Directors in their meeting held on August 12, 2017 in the category of Independent Director for a period of five years w.e.f. August 12, 2017, which was duly approved by the shareholders in the Annual General Meeting held on September 23,2017.

Pursuant to provisions of Companies Act, 2013 (Act’) and the Articles of Association of the Company, Mr Rajinder Gupta [DIN: 00009037] and Mr Deepak Nanda [DIN: 00403335], Directors of the Company, retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Nomination and Remuneration Committee and Board of Directors have recommended their re-appointment for the approval of the shareholders of the Company in the forthcoming Annual General Meeting of the Company.

Also, the Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as applicable under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [‘SEBI (LODR) Regulations, 2015’].

Number of Board Meetings

During the year under review, the Board duly met four (4) times with a maximum gap of 110 days between any two consecutive meetings. The details of the Board meeting are set out in the Corporate Governance Report which forms part of this Report.

Review of performance of the Board

The Company has duly approved Nomination and Remuneration Policy prescribing inter-alia the criteria for appointment, remuneration and performance evaluation of the directors. As mandated by Section 134 & 178 read with Schedule IV of the Act and Regulation 25 of the SEBI (LODR) Regulations, 2015 as applicable on the Company, the Independent Directors in their separate meeting held on January 29, 2018 have reviewed the performance of non-independent directors, Chairperson and Board as a whole along with review of quality, quantity and timeliness of flow of information between Board and management and expressed their satisfaction over the same. Further the Board, in its meeting held on May 7, 2018 also reviewed the performance of the Board, its committees and all Individual Directors of the Company and expressed its satisfaction over the performance of the Board, its Committees and individual Directors.

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

Energy conservation continues to be an area of major emphasis in your Company. A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, in accordance with Section 134(3)(m) of the Act, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed as Annexure I hereto and forms part of this report.

Disclosure on ES0P

The Company introduced Employees Stock Options Plan, 2007 in the financial year 2007-08, after approval by the shareholders by way of a special resolution dated June 29,2007. The Company has made two grants under the scheme till date. The first grant was made on July 9, 2007 and second grant was made on July 23, 2009 by the Nomination and Remuneration Committee (earlier known as Compensation Committee) as per the terms & conditions of Trident Employee Stock Options Plan, 2007. The options were granted at the latest available closing market price prior to the date of meeting.

The Certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the applicable SEBI Guidelines and the resolution passed by the shareholders would be placed at the Annual General Meeting for inspection by members.

The Company had also introduced Trident Employee Stock Options Scheme, 2009 and Trident Employee Stock Options Scheme, 2015, by way of trust route, after the approval of shareholders in their meeting held on August 27, 2009 and September 12, 2015, respectively. The Company has not yet implemented the said scheme and there has not been any grant under these both schemes till date. The disclosures as required under the SEBI (Share Based Employee Benefits) Regulations, 2014 has been given on the website of the Company under the following link: http://www.tridentindia.com/report/ESOP_ Disclosure_for_FY_2017-18.pdf

Responsibility Statement of Directors

Directors’ Responsibility Statement pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Act is annexed as Annexure II hereto and forms part of this report.

Nomination and Remuneration Policy

The Nomination and Remuneration Policy of the Company in compliance with Section 178 of the Companies Act, 2013, containing criteria of performance evaluation of Independent Directors, has been designed to keep pace with the dynamic business environment and market linked positioning. The Policy has been duly approved and adopted by the Board pursuant to recommendations of Nomination and Remuneration Committee of the Company and forms part of this report as Annexure III.

Familiarization Program for Independent Directors

The details of familiarization program for independent directors are available on the official website of the Company at the following I ink: http://www.tr identindia.com/report/Familiarization_ Program_for_ I nde pen dent_Di rector s_FY_2017-18.pdf

Statutory Committees

The Company has duly constituted Board level Committees as mandated by the applicable laws and as per the business requirements. The details of the same are provided in the Corporate Governance Report of the Company which forms part of this report.

Vigil Mechanism & Whistle Blower policy

The Company has implemented Vigil Mechanism 8c Whistle Blower policy and the oversight of the same is with Audit committee of the Company. The policy inter-al ia provides that any Directors, Employees, Stakeholders who observe any unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or ethics, policies, improper practices or alleged wrongful conduct in the Company may report the same to Chairman of the Audit Committee or e-mail on the email-ld : whistleblower@tridentindia.com. Identity of the Whistle Blower shall be kept confidential to the greatest extent possible.

The detailed procedure is provided in the policy and the same is available on official website of the Company at following link: http://www.tridentindia.com/report/Vigil_Mechanism_and_ Whistle_Blower_Policy.pdf

During the year under review, there were no instances of fraud reported to the Audit Committee/ Board. Further, all recommendations of the Audit Committee were accepted by the Board.

Corporate Social Responsibility (CSR) Committee & Business Responsibility Report

CSR Committee comprises of Mr Rajiv Dewan (Chairman of the Committee), Mr Raj inder Gupta and Mr Deepak Nanda, members of the Committee. The disclosure of the contents of CSR Pol icy as prescribed and amount spent on CSR activities during the year under review are disclosed in Annual Report on CSR activities’ annexed hereto as Annexure IV and forms part of this report.

The Business Responsibility Report describing the initiatives taken by them from an environmental, social and governance perspective, in the specified format is included in the Annual Report of the Company.

Risk Management Policy

The Company has adopted a Risk Management Policy with the objective of ensuring sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. The detailed Risk management framework has been provided in the Management Discussion and Analysis Report of the Company.

Internal Control

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed. The details of Internal Control System are provided in the Management Discussion and Analysis Report of the Company.

Fixed Deposits

During the year under review, your Company has neither accepted any fixed deposits nor any amount was outstanding as principal or interest as on balance sheet date and disclosures prescribed in this regard under Companies (Accounts) Rules, 2014 are not applicable.

No Default

The Company has not defaulted in payment of interest and/or repayment of loans to any of the financial institutions and/or banks during the year under review.

Corporate Governance

Your Company is committed to adhere to the best practices & highest standards of Corporate Governance. It is always ensured that the practices being followed by the Company are in alignment with its philosophy towards corporate governance. The well-defined vision and values of the Company drive it towards meeting business objectives while ensuring ethical conduct with all stakeholders and in all systems and processes.

Your Company proactively works towards strengthening relationship with constituents of system through corporate fairness, transparency and accountability. In your Company, prime importance is given to reliable financial information, integrity, transparency, fairness, empowerment and compliance with law in letter 8c spirit. Your Company proactively revisits its governance principles and practices as to meet the business and regulatory needs.

Detailed compliances with the provisions of the SEBI (LODR) Regulations, 2015 and Companies Act, 2013 for the year 2017-18 are given in Corporate Governance Report, which is attached and forms part of this report. The certificate of Practising Company Secretary on compliance with corporate governance norms is also attached thereto.

Human Resources Development and Industrial Relations

The human resources development function of the Company is guided by a strong set of values and policies. Your Company strives to provide the best work environment with ample opportunities to grow and explore. Your Company maintains a work environment that is free from physical, verbal and sexual harassment. The details of initiatives taken by the Company for development of human resources are given in Management Discussion and Analysis Report.

The Company maintained healthy, cordial and harmonious industrial relations at all levels during the year under review. Further, no case was filed under Sexual Harassment of Women at Workplace (Prevention, Prohibition 8c Redressal) Act, 2013 during the year under review.

Auditors & Auditors’ Report

During the year under review, M/s Deloitte Haskins 8c Sells, Chartered Accountants has retired as Statutory Auditors of the Company pursuant to the provisions of the Companies Act, 2013. Further, pursuant to the provisions of Section 139 of the Companies Act, 2013, the shareholders of the Company in their 27th Annual General Meeting held on September 23, 2017 have approved the appointment of M/s S.R. Batliboi 8c Co. LLR Chartered Accountants, ICAI Firm Registration No: 301003E/ E300005 as Statutory Auditors of the Company in place of M/s Deloitte Haskins 8c Sells, Chartered Accountants for a term of five consecutive years, from the conclusion of ensuing 27th Annual General Meeting until the conclusion of the 32nd Annual General Meeting of the Company subject to annual ratification by the shareholders in the Annual General Meeting. Accordingly, the appointment of M/s S.R. Batliboi 8c Co. LLR Chartered Accountants is being placed before the shareholders for ratification.

M/s S.R. Batliboi 8c Co. LLR Chartered Accountants, Statutory Auditors of the Company have submitted Auditors’ Report on the financial statements of the Company for the financial year ended on March 31, 2018 being the first year of their Audit. The Auditors’ Report for the year is self-explanatory 8c does not contain any modified opinion, hence need no comments.

Cost Audit

The Board of Directors of your Company, on the recommendations of the Audit Committee, have re-appointed M/s Ramanath Iyer 8c Co., Cost Accountants, New Delhi as cost auditors for the financial year 2018-19 to carry out an audit of cost records of the Company in respect of textiles, paper and chemical divisions. The Cost Audit Report for the financial year ended March 31, 2018 is under finalization and shall be filed with the Central Government within the prescribed time limit.

Secretarial Audit

M/s Vi nod Kothari & Co., Company Secretaries, Kolkata have conducted the Secretarial Audit of the Company for the financial year 2017-18 in accordance with the provisions of Section 204 of the Companies Act, 2013 read with the relevant rules in this regard.

The Secretarial Audit Report for the financial year ended March 31,2018 is annexed as Annexure Vand forms part of this report. The Secretarial Audit Report for the year is self-explanatory & does not contain any qualification/adverse remarks, hence need no comments.

The Board of Directorsof yourCompany,on the recommendations of the Audit Committee, have re-appointed M/s Vi nod Kothari 8c Co., Company Secretaries, Kolkata as Secretarial Auditors for the financial year 2018-19 to carry out secretarial audit of the Company.

Extract of Annual Return

The extract of annual return in Form No. MGT-9, is annexed as Annexure VI and forms part of this report.

Particulars of loans, guarantees or investments

The Particulars of loans, investments or guarantees have been disclosed in the financial statements.

Disclosures regarding Managerial remuneration and particulars of employees

In accordance with the provisions of the second proviso to Section 136(1) of the Act, the Annual Report excluding this information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including the aforesaid information is being sent electronically to all those members who have registered their email addresses and is available on the Company’s website at http://www. tridentindia.com/report/Annual_Report_FY_2017-18.pdf

Contracts or arrangements with related parties

All contracts / arrangements / transactions entered by the Company during the year under review with related parties were in the ordinary course of business and on an arm’s length basis. During the period under review, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the Policy on Materiality of and Dealing with Related Party Transactions and accordingly, the disclosures in Form No.AOC-

2 is not applicable. The related party disclosures are provided in the notes to financial statements.

The Policy on Materiality of and Dealing with Related Party Transactions as approved by the Board is available on the official website of the Company at the following link: http:// www.tridentindia.com/report/Policy_on_Materiality_of_and_ Dealing_with_Related_Party_Transactions.pdf

Secretarial standards

The Company has complied with all the applicable secretarial standards issued by the Institute of Company Secretaries of India.

Green Initiatives

Electronic copies of the full Annual Report for the financial year 2017-18 and the Notice of the 28th Annual General Meeting are sent to all the members whose email addresses are registered with the Company/ Depository Participant. For members, who have not registered their email addresses, physical copies of Abridged Annual Report are being sent in permitted mode.

General

Your Directors state that no disclosure or reporting is required with respect to the following items as there were no transactions on these items during the year under review:

1. Disclosure in respect of voting rights not exercised directly by the employees in respect of shares to which the ESOP scheme relates, as there is no provision of money by Company for purchase of its own shares by employees or by trustees for the benefit of employees.

2. Material changes and commitments after the closure of the financial year till the date of this Report, which affects the financial position of the Company.

3. Change in the nature of business of the Company.

4. Details relating to deposits covered under Chapter V of the Act.

5. Issue of equity shares with differential rights as to dividend, voting or otherwise.

6. Any remuneration or commission received by Managing Director of the Company, from any of its subsidiary.

7. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

8. No fraud has been reported by the Auditors to the Audit Committee or the Board.

Acknowledgments

It is our strong belief that caring for our business constituents has ensured our success in the past and will do so in future. Your Directors acknowledge with sincere gratitude the co-operation and assistance extended by the Central Government, Government of Punjab, Government of Madhya Pradesh, Financial Institution(s), Bank(s), Customers, Dealers, Vendors and society at large.

Your Directors a Iso wish to convey their appreciation for collective contribution 8c hard work of employees across all levels. The Board, also, takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders and their confidence in management and look forward to their continued support in future too.

For and on behalf of the Board

PaLLavi SharduL Shroff DeepakNanda

Place: New Delhi Chairperson Managing Director

Date: May 7, 2018 DIN: 00013580 DIN: 00403335

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