AFFLUENCE

REPORT OF THE BOARD OF DIRECTORS

To,

The Members,

Rolex Rings Private Limited,

Your Directors are pleased to present their 17th Annual Report for the financial year ended on 31st March, 2019.

FINANCIAL RESULTS:

Your Company’s performance for the year ended on 31st March, 2019, is

                                                                                 (Amt. Rupees in million)

During the year under report, total revenue (net of excise duty) from operations of business increased to INR 9043.23 millions as compared to INR 7701.53 millions of previous fiscal 2017-18 at an approximate growth of 17.42%. Further, net profit after tax of the company has decreased from INR 735.96 millions to INR 616.54 millions. But if provision of Deferred tax is put aside then the Net profit of the company has increased to INR 1103.99 millions. The Company had paid Current Tax for the fiscal 2018-19 amounting to INR 308.90 millions as compared to previous fiscal of INR 203.74 millions. The Finance cost of the company has reduced as borrowings from financial institutions have been repaid to a great extent during the fiscal year, also in March 2019, company had made advance payment of around INR 90 millions towards installment of June 2019 quarter. The management are positive in repaying all the dues regularly on time in coming years and take company further to the path of success.

DECLARATION OF DIVIDEND & TRANSFER OF AMOUNT TO RESERVES:

With a view to plough back profits and in order to conserve resources for operational purposes, your Directors do not recommend any dividend.

Further, no amount has been transferred to general reserves in the Financial Year 2018-19.

CHANGE IN NATURE OF BUSINESS:

There has been no change in nature of business of the Company during the year under Company.

SHARE CAPITAL:

The Paid up Equity share capital of the company as on 31st March, 2019 was Rs. 37,58,69,530/- of Rs. 10/- each divided into 2,39,81,090 equity shares of Rs. 10/- each and 1,36,05,863 Non-Convertible Redeemable Preference shares of Rs. 10/- each. During the year under review, the Company has not issued any share or any convertible instrument.

EXTRACT OF ANNUAL RETURN:

In terms of Section 134(3)(a) of the Companies Act, 2013, the extract of Annual Return, in format MGT -9 [as specified in Section 92(3) read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014], for the Financial Year 2018-19 has been attached to this report.

BOARD MEETINGS:

During the year under report, 06 Meetings of the Board of Directors of the Company were held on 10/04/2018, 27/07/2018, 24/09/2018, 22/10/2018, 11/01/2019 and 27/03/2019 and following Directors were granted leave of absence during the meetings mentioned herein below:

AUDIT COMMITTEE:

Though not required under the law, but as a matter of good corporate practice, the Board has formed an Audit Committee to review all financial functions of the Company. The Committee consists of Mr. Manesh Madeka, Chairman & Managing Director, CA (Mr.) Vivek Sett & Mr. Mihir Madeka, Whole-time Director, as a Member of the Audit Committee. Main functions of the Audit Committee are as under:

1)    Oversight of the Company’s financial reporting process and the disclosure of its financial information

2)    Review of Company’s financial and risk management policies,

3)    Review of accounting and financial policies and practices,

4)    Review of internal control and internal audit systems,

5)    Discussion with Internal Auditor and Statutory Auditors on any significant findings and follow – up thereon.

6)    Reviewing the Company’s financial statements and risk management policies.

During the year under report, 06 Meetings of the Audit Committee of the Board of Directors of the Company were held on 10/04/2018, 27/07/2018, 24/09/2018, 22/10/2018, 11/01/2019 and 27/03/2019 and following members were granted leave of absence during the meetings mentioned herein below:

FINANCE & BORROWING COMMITTEE:

The Board has formed Finance & Borrowing Committee to look after the borrowing requirements of the Company. The Committee consists of Mr. Manesh D Madeka, Chairman & Managing Director of the Company, Mr. Bhautik Madeka, Whole-time Director and CA Vivek Sett, Director. The Committee, on the basis of requirements of the Company for funds/borrowings, finalizes the terms & conditions of various credit facilities enjoyed by the Company. The Committee also authorizes directors to execute various security documents from time to time.

BOARD’S RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013, the Directors based on the information and representations received from the operating management confirm that:

a)   in the preparation of the annual accounts, the applicable accounting standards had been followed and there were no material departures;

b)   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;

c)   the directors had taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d)   the directors had prepared the annual accounts on a going concern basis; and

e)   directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively. The Directors would like to clarify that the Company is an unlisted Company and does not require to give any statement regarding internal financial controls in terms of Section 134(5)(e). However, the Board has voluntarily laid down such financial controls to safeguard the interest of the Company.

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

STATUTORY AUDITOR AND AUDITORS’ REPORT:

Members are aware that at the Annual General Meeting of the Company held on 30th September, 2017, the members approved appointment of S R B C & Co. LLP, Chartered Accountants (Registration No. 324982E) as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of that Annual General Meeting till the conclusion of the Annual General Meeting to be held in the year 2022, subject to ratification of their appointment by members at every Annual General Meeting if so required by the Companies Act 2013. Vide notification dated May 7, 2018, the Ministry of Corporate Affairs has done away with the requirement of seeking ratification of members for appointment of auditors at every Annual General Meeting. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at the ensuing Annual General Meeting.

Further, in terms of Section 143(3)(i) of the Companies Act, 2013 read with Rule 10A of the Companies (Audit and Auditors) Rules, 2014, Auditors have reported that the Company has adequate internal financial controls system and such system is having operating effectiveness.

As regards, Auditors’ observations related to delay in repayment of loans taken from Banks during the extent of INR 373.74 millions, the Board would like to clarify that as on date of this Report, the total outstanding arrears were paid to the respective banks and there were no delay as on 31st March, 2019. Further the company had made an advance payment towards payments to be made for June, 2019 Quarter.

COST AUDITOR:

The Board has appointed S K Rajani & Co., Cost Accountants, Bhavnagar, for carrying out Cost audit of cost accounting records maintained by the Company for the financial year 2018-19.

COST AUDIT REPORT:

The Board has yet not obtained Cost Audit report for the Financial Year 2018-19 from CMA Sunil Rajani, Proprietor, S.K. Rajani & Co., Cost Accountants, Bhavnagar.

INTERNAL AUDIT:

Since long, the Company is implementing proper and adequate systems of internal control in all areas of operations. The Company has taken all steps to strengthen IT Security, data security, improvisation of Human Resources functions such as mapping of each department, preparation of data for requirement of staff in each department.  Internal Audit has been carried out in the company for the financial year 2018-19 by PLMK & Associates, Rajkot.

RELATED PARTY TRANSACTIONS:

During the year under report, the Company has entered into transactions with related parties regarding payment of Remuneration, job work, sale of scrap and MEIS Scrip. The said transactions were carried on at arm’s length price in the ordinary course of business, which were duly approved by the Board falling within the purview and threshold limits as prescribed under Section 188 of the Companies Act, 2013 read with Rule 15 of the Companies (Meeting of Board & its Powers) Rules, 2014, as amended. The detail of Related Party Transactions is given in Annexure B to this report in prescribed Form AOC-2

PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS MADE:

During the year under report, the company has complied with the provisions of Section 185 of the Companies Act, 2013. The company had carried on transaction under provisions of Section 186 of the Companies Act, 2013 by providing Loan to Fillenpac Industries Private Limited which is within the limit as prescribed under the Act.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

In terms of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, every company having net worth of Rs. 500 Crores or more OR an annual turnover of Rs.1000 Crores or more OR net profit of Rs. 5 Crores or more, during any of three previous year (i.e. 2015-16, 2016-17 & 2017-18) is required to constitute a CSR Committee. Rolex Rings Private Limited is falling in any of the above criteria during the year 2017-18. Therefore, it is required mandatorily to carry out any CSR activities and constitute any Committees under provisions of Section 135 of the Act. The Board has constituted a CSR Committee in the Financial Year 2015-16 consisting of Mr. Manesh D. Madeka as Chairman of the committee and Mr. Bhautik D, Madeka and Mr. Mihir R. Madeka as the members of the committee. The said committee was constituted on 12th June, 2015 for monitoring Corporate Social Responsibility. The details of CSR activities is given in Annexure to this Report. Further reason for under spending CSR funds is that company is looking for prospective and better prospects for Corporate Social Responsibility and in next year it will try to help society more by fulfilling its Social Responsibility towards society.

DETAILS OF BOARD OF DIRECTORS:

Following are Directors of the Company as on 31st March, 2019:

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

a)      Conservation of Energy:

b)     Technology Absorption:

a)         Foreign Exchange Earnings/ Outgo: (Amount in INR millions)

PARTICULARS OF EMPLOYEES:

There are employees who have received remuneration of more than Rs. 8.5 lacs per month or Rs. 1.02 Crores per annum as per Rule 5 of the Companies (Appointment and Remuneration) Amendment Rules, 2016. The details are in Annexure-D forming part of this report.

SUBSIDIARIES, JOINT VENTURE OR ASSOCIATE COMPANIES:

During the year under report the Company doesn’t have any Subsidiary, Joint Venture or Associate Companies.

OTHER DISCLOSURES AS REQUIRED UNDER THE PROVISIONS OF THE COMPANIES ACT, 2013 AND RULES MADE THEREUNDER: There have been no material changes /commitments, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report; The Directors have submitted the disclosure of interest as per section 184 read with applicable Rules of the Companies Act, 2013 in the format Form MBP-1. During the year under review the company has not accepted the deposit from the public under section 73 to 76 of the Companies Act, 2013 and the Rules made there under. The Company is not covered in class of Companies as mentioned in Section 149 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended and hence it has not appointed any Independent Director, and hence, it is not required to disclose details of independence of Independent Directors. The Company is in process of developing a Risk Management Policy which safeguards the Company from all risks to the best possible manner. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company is not covered in class of Companies as mentioned in Section 178(2) of the Act read with the Companies (Accounts) Rules, 2014, as amended and hence, it is not required to give statement indicating the manner in which formal annual evaluation has been made by the Board of Directors of its own performance or its committees and individual directors of the Company. There has been no instance of any revision in the Board’s Report or the financial statement, hence disclosure under Section 131(1) of the Act. The Company has not issued any shares to any employee, under any specific scheme, and hence, disclosures under Section 67(3) are not required to be made. The Company is not covered in class of Companies as mentioned in Section 178(1) of the Act read with the Companies (Accounts) Rules, 2014, and the Companies (Meeting of Board and its powers) Rules, 2014, as amended and hence, it is not required to constitute the Audit Committee, Nomination & Remuneration Committee or Stakeholders’ Committee and therefore, requirements of disclosures of composition of these committees or its policies,  are not applicable. The Company is not covered in class of Companies as mentioned in Section 177(9) of the Act read with the Companies (Meeting of Board and its powers) Rules, 2014, as amended and hence, requirement of disclosures of vigil mechanism is not applicable. The Company, being a private limited Company, provisions of Section 197 is not applicable to it. However, it is clarified that, during the year under Report, the Company has not paid any commission to any of its Directors and hence, provision of disclosure of commission paid to any Director as mentioned in Section 197(14) is not applicable. The Company is not covered in class of Companies as mentioned in Section 204 (3) of the Act and hence, it is not required to obtain the Secretarial Audit Report from Practising Company Secretary and therefore, such report is not attached to this Report of Board of Directors. The Company has not issued (a) any share with differential voting rights (b) sweat equity shares (c) shares under any Employee Stock Option Scheme, and hence no disclosures are required to be made as per the Companies (Share Capital and Debentures) Rules, 2014.

ACKNOWLEDGEMENT:

Your directors put on record their whole hearted gratitude to bankers, employees of the Company for their sincere efforts for the Company.