Dear Members,
Your Directors are pleased to present the 38th Annual Report of Blue Chip
Tex Industries Limited (“your Company” or “the Company”) along with
the Audited Financial Statements for the Financial Year (“FY”) ended 31st
March, 2023.
FINANCIAL PERFORMANCE:
The financial performance of your Company for the FY ended 31st March, 2023,
is summarized below:
' In Lakhs
Particulars |
FY 2022-23 |
FY 2021-22 |
Revenue from Operations |
25,272.40 |
24,308.25 |
Other Income |
49.82 |
66.82 |
Total Income |
25,322.22 |
24,375.07 |
Expenses |
|
|
Expenses except depreciation & amortization expense |
24,946.59 |
23,665.34 |
Depreciation & amortization expense |
257.14 |
264.97 |
Total Expenses |
25,203.73 |
23,930.31 |
Profit before depreciation & amortization expense |
375.63 |
709.73 |
Less: Depreciation & amortization expense |
257.14 |
264.97 |
Profit before Tax |
118.49 |
444.76 |
Less: Tax Expenses |
|
|
Current tax for the current year |
48.05 |
132.00 |
Current tax related to earlier years |
(4.33) |
(0.47) |
Deferred tax |
(16.43) |
(8.52) |
Profit after tax |
91.20 |
321.75 |
Other Comprehensive income |
2.10 |
(2.92) |
Total income for the year |
93.30 |
318.83 |
Earnings per share (in ' ) (Basic and Diluted) |
4.63 |
16.33 |
Amount transferred to Retained Earnings |
93.30 |
318.83 |
Transfer to General Reserve |
- |
- |
The above mentioned financial performance highlights are an abstract of the Financial
Statements of your Company for the FY 2022-23. The detailed Financial Statements forms
part of this Annual Report and are also uploaded on website of your Company i.e.
www.bluechiptexindustrieslimited.com.
1. Performance Highlights:
The revenue from operations for the financial year 2022-23 was up by 3.97% and stood at
' 25,272.40 lakhs compared to ' 24,308.25 lakhs in the previous financial year. The Profit
after tax for the financial year 2022-23 was ' 91.20 lakhs as compared to ' 321.75 lakhs
in previous financial year.
2. Dividend:
Your Directors are pleased to recommend a dividend of ' 2/- per equity share of ' 10/-
each for the FY 2022-23.
In accordance with the provisions of the Income Tax Act, 1961 as amended by and read
with the provisions of the Finance Act, 2020, with effect from 1st April, 2020,
dividend declared and paid by any Company is taxable in the hands of shareholders. Your
Company shall, therefore, be required to regulate deduction of tax at source
(“TDS”) at the time of payment of dividend in accordance with the provisions of
the Income Tax Act, 1961 read with the Finance Act, 2020 and at the applicable rates of
taxes. The TDS rate may vary depending upon the residential status of the shareholder and
the documents submitted to your Company.
Your Company will also be sending communication to the shareholders informing them to
submit the necessary documents to enable your Company to calculate the amount of tax
required to be deducted from the proposed dividend in respect of each eligible
shareholders. The aforesaid communication will be sent to those shareholders whose name
appears in the Register of Members as on 31th August, 2023 via email to those
shareholders who have registered their email id with your Company.
3. Transfer to Reserves:
Your Company did not transfer any sum to the General Reserve for the Financial Year
under review.
4. Annual Return:
Pursuant to Section 134(3)(a) of the Companies Act, 2013 (“the Act”), the
draft annual return for Financial Year 2022-23 prepared in accordance with Section 92(3)
of the Act is made available on the website of the Company i.e. www.bluechiptexindustrieslimited.com
under ‘Annual Report' section.
5. Details of Frauds reported by the Auditors under Section 143(12) of Companies Act,
2013:
There are no frauds reported by the Auditor which are required to be disclosed under
Section 143(12) of the Act.
6. Board Meetings:
The Board met four times through video conferencing during the FY 2022-23 on 26th May
2022, 9th August 2022, 8th November 2022 and 13th
February 2023. The necessary quorum was present for all the Meetings. Also, the Board of
Directors of your Company passed a Resolution by Circulation on 22nd June 2022,
6th September 2022, 15th September 2022, 5th January
2023, 23rd January 2023 and 27th January 2023.
7. Changes in Directors and Key Managerial Personnel:
During the year under review Ms. Shraddha M. Teli (DIN No: 06976334), the Non-Executive
Independent Director of the Company, resigned from the Board of the Company and its
Committees thereof with effect from 28th August, 2022. Further, Ms. Tanya M.
Singh (DIN No: 09731390) was appointed as Non-Executive Independent Director of the
Company from 21st October 2022.
During the year, Mr. Bhumit M. Dharod (ACS No: 51555), Company Secretary &
Compliance Officer of the company resigned with effect from 17th Feb 2023.
Further, Mr. Durgesh S. Shirsate (ACS No: 69724) was appointed as Company Secretary &
Compliance Officer of the company with effect from 25th April 2023.
In accordance with the provisions of Section 152 of the Act Mr. Siddharth .A. Khemani,
Director (DIN No : 08842398) of your Company retires by rotation at the ensuing Annual
General Meeting and being eligible, offers himself for reappointment.
8. Independent Directors:
Pursuant to Section 134(3)(d) of the Act, Company confirms having received necessary
declarations from all the Independent Directors under Section 149(7) of the Act and
Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 (“the Listing Regulations”) declaring that they meet the
criteria of independence laid down under Section 149(6) of the Act and Regulation 16(1)(b)
of the Listing Regulations. All the Independent Directors of Company have complied with
the provisions of sub rule (1) and (2) of Rule 6 of the Companies (Appointment and
Qualification of Directors) Rules, 2014 by registering themselves under data bank of
Independent Director.
All Independent Directors are familiarized with your Company, their roles, rights and
responsibilities in your Company, nature of the industry in which Company operates,
business model, strategy, operations and functions of your Company through its Executive
Directors and Senior Managerial Personnel.
Company's Independent Directors meet at least once in every financial year without the
presence of the Executive Directors of your Company. During the year under review, one
Meeting of Independent Directors was held on 16th January, 2023.
During the year under review, Company did not have any pecuniary relationship or
transactions with any of its Independent Directors, other than payment of sitting fees.
In the opinion of the Board, the Independent Directors of the Company meet the
requirements of integrity, expertise and experience as required by the Company and have
the Proficiency required for their appointment as an Independent Director on the Board of
the Company.
9. Particulars of Remuneration to Directors and Employees:
The statement containing particulars in terms of Section 197(12) of the Act read with
rule 5(1), Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is annexed herewith as “Annexure IV”.
10. Performance Evaluation:
Pursuant to the applicable provisions of the Companies Act, 2013, the Board has carried
out an Annual Evaluation of its own performance, performance of the Individual Directors,
Key Managerial Personnel and Committees of Board, based
on the evaluation criteria defined by Nomination and Remuneration Committee
(“NRC”) for performance evaluation process of the Board, its Committees,
Directors and Key Managerial Personnel. All the evaluation is carried out at Board of
Director's Meeting, Independent Director's Meeting and NRC Meeting. Having regard to the
industry, size and nature of business your Company is engaged and the evaluation
methodology adopted is in the opinion of the Board, sufficient, appropriate and is found
to be serving the purpose.
Performance evaluation of Independent Directors was conducted by the Board of
Directors, excluding the Director being evaluated. The criteria for performance evaluation
of Independent Directors laid down by the Nomination and Remuneration Committee include
ethics, knowledge and proficiency, diligence, efforts for personal development,
independence in decision making, etc. Similarly, performance evaluation of the
Non-Independent Directors was carried out by the Independent Directors of your Company at
its separate Meeting. Your Directors also expressed their satisfaction with the evaluation
process.
11. Auditors:
(i) Statutory Auditors and their Report
At the 37th Annual General Meeting held on 27th September, 2022, M/s. D K P
& Associates, Chartered Accountants, (Firm Registration No. 126305W) were appointed as
the Statutory Auditors of your Company to hold office for a term of 5 years commencing
from the conclusion of 37th Annual General Meeting till the conclusion of 42nd
Annual General Meeting subject to ratification by Members in each Annual General Meeting.
However, as per the Companies (Amendment) Act, 2017, provisions of Section 139 of the Act
have been amended, wherein, the requirement of ratification of appointment of Statutory
Auditors at every Annual General Meeting has been done away with. Accordingly, the Audit
Committee and the Board of Directors of your Company during their respective Meetings held
on 26th May, 2022 have considered and approved the re-appointment of M/s. D K P
& Associates, Chartered Accountants, (Firm Registration No. 126305W) as the Statutory
Auditors of your Company, for further period of 5 years i.e. from the conclusion of the 37th
Annual General Meeting until the conclusion of the 42nd Annual General Meeting
of your Company to be held in the year 2027.
The Notes on financial statements referred to in the Auditors' Report are
self-explanatory and do not call for any further comments. The Auditors' Report does not
contain any qualification(s), reservation(s) or adverse remark(s).
(ii) Secretarial Auditors and their Report
In terms of Section 204 of the Act, the Board of Directors of your Company on the
recommendation of the Audit Committee have re-appointed M/s. Pramod .S. Shah and
Associates, Practicing Company Secretaries, Mumbai as the Secretarial Auditors of your
Company to carry out Secretarial Audit for the financial year 2023-24. Your Company has
obtained Secretarial Audit Report for the Financial Year 2022-23 in the prescribed Form
MR-3 from M/s Pramod .S. Shah and Associates, Practicing Company Secretaries, which forms
part of the Annual Report and is annexed as “Annexure I” to this Report. The
report does not contain any qualification(s), reservation(s) or adverse remark(s) which
calls for any explanation from your Board of Directors.
(iii) Cost Auditors and their Report
In terms of the provisions of Section 148 of the Act read with the Companies (Cost
Records and Audit) Rules, 2014, as amended from time to time, the Board of Directors,
based on the recommendation of the Audit Committee, have re-appointed M/s. NKJ &
Associates, Practicing Cost Accountants, Mumbai (Registration No. 101893), as Cost Auditor
of the Company for conducting the Cost Audit for the Financial Year 2023-24, on a
remuneration as mentioned in the Notice of 38th Annual General Meeting. A
Certificate from M/s. NKJ & Associates, Practicing Cost Accountants, has been received
to the effect that their appointment as Cost Auditor of the Company, if made, would be in
accordance with the limits specified under Section 141 of the Act and Rules framed
thereunder. A resolution seeking Member's ratification for the remuneration payable to the
Cost Auditor forms part of the Notice of 38th Annual General Meeting and the
same is recommended for your consideration and ratification. The Cost Audit Report for the
FY 2022-23, does not contain any qualification(s), reservation(s) or adverse remark(s)
which calls for any explanation from your Board of Directors.
(iv) Internal Auditors
In terms of the provisions of Section 138 of the Act read with the Companies (Accounts)
Rules, 2014, as amended from time to time, the Board of Directors, based on the
recommendation of the Audit Committee, have re-appointed M/s. Raju Gupta & Associates,
Chartered Accountants, Mumbai (Registration No. 108477W), as the Internal Auditor of the
Company for the FY 2023-24. The Internal Audit Report for the FY 2022-23, does not contain
any qualification(s), reservation(s) or adverse remark(s) which calls for any explanation
from your Board of Directors.
12. Transfer to Investor Education and Protection Fund:
Transfer of Equity Shares: Pursuant to the provisions of Section 124(6) of the
Companies Act, 2013 and the Investor Education and Protection Fund Authority (Accounting,
Audit, Transfer and Refund) Rules, 2016 notified by the Ministry of Corporate Affairs on 7th
September, 2016 and subsequently amended vide notification dated 28th February,
2017, all the equity shares of the Company in respect of which dividend amounts have not
been paid or claimed by the shareholders for seven consecutive years or more are required
to be transferred to demat account of the Investor Education and Protection Fund (IEPF)
Authority.
Accordingly, 7,400 shares of 54 members of your Company were transferred to Demat
Account of IEPF Authority on 14th September, 2022. Your Company had sent
individual notice to all the members whose email ids were available with Company and has
also published the notice in the leading English and Gujarati newspapers. The details of
the aforesaid members are available on website of your Company i.e.
www.bluechiptexindustrieslimited.com.
Transfer of Unclaimed/ Unpaid Dividend: Further, pursuant to the provisions of Section
124(5) of the Act, the dividend which remained unclaimed/ unpaid for a period of seven
years from the date of transfer to unpaid dividend account is required to be transferred
to the Investor Education and Protection Fund (IEPF) established by the Central
Government. As a result, the unclaimed/ unpaid dividend for the year 2014-15 which
remained unclaimed and unpaid for a period of 7 years has been transferred by your Company
to the IEPF.
Your Company has uploaded the details of unclaimed/ unpaid dividend for the FY 2014-15
onwards on its website viz., www.bluechiptexindustrieslimited.com and on website of the
Ministry of Corporate Affairs viz., www.mca.gov.in and the same gets revised / updated
from time to time.
Further, the unpaid Dividend amount pertaining to the FY 2015-16 will be transferred to
IEPF during the FY 2023-24.
13. Deposits:
The Company has not accepted any deposits covered under the provisions of the Act and
the Rules made thereunder.
14. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and
Outgo as per Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the
Companies (Accounts) Rules, 2014:
A. Conservation of Energy:
(i) The steps taken or impact on conservation of energy:
Constant efforts in continuing all previous conservation measures and increasing
awareness of energy management amongst employees have continued which should enable
further savings going forward. The Company had installed solar plant for energy
conservation in March, 2020. Also Company had installed LED lights in place of existing
lighting system in March, 2020. Installation of solar plant and LED lights helped in
reducing the energy bill and creating higher productivity.
(ii) The steps taken for utilizing alternate sources of energy:
The Company had installed solar plant for energy conservation in March, 2020. Also
Company had installed LED lights in place of existing lighting system in March, 2020.
(iii) The capital investment on energy conservation equipment:
No capital investment has been made during the year under review.
B. Technology absorption:
(i) The efforts made towards technology absorption:
The Textile business environment is becoming more and more challenging and competitive,
thus in current scenario, it becomes the key to survival. We follow strategy of Innovation
and Sustainability and research is being done to keep business predictable, sustainable
and profitable and to de-risk our product portfolio.
(ii) The benefits derived like product improvement, cost reduction, product development
or import substitution:
The Company keeps itself abreast of the technical development and innovation in its
line of products and tries to bring improvements in the product for better yield, quality
and cost effectiveness etc. Continuous efforts are being made in the areas of quality
improvements, waste reduction, process capability and cost minimization to specially
improve the market acceptance of the product.
(iii) In case of imported technology (imported during the last three years reckoned
from the beginning of the financial year) -
(a) the details of technology imported: Not Applicable
(b) the year of import: Not Applicable
(c) whether the technology been fully absorbed: Not Applicable
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons
thereof: Not Applicable
(iv) the expenditure incurred on Research and Development - NIL
C. Foreign exchange earnings and Outgo: NIL
15. Material Changes and Commitment, if any, affecting the financial position of the
Company from the end of the financial year till the date of this report:
No material changes and commitments which could affect your Company's financial
position have occurred between the end of the FY 2022-23 and to the date of this report.
16. Significant and Material Orders passed by the Regulators or Courts:
There are no significant and material orders passed by any Regulator/Court that would
impact the going concern status of your Company and its future operations.
17. Details of Subsidiary Company / Associate Company / Joint Ventures:
Company does not have any Subsidiary Company or Associate Company or Joint Venture.
18. Change in the Nature of Business:
There has been no change in the nature of business of the Company during the year ended
31st March, 2023.
19. Change in the Capital Structure:
There has been no change in the capital structure of the Company during the year ended
31st March, 2023.
20. Accounting Treatment:
The Company followed the applicable Accounting Standards in the preparation of its
Financial Statements.
21. Compliance with the applicable Secretarial Standards:
The Company has complied with the applicable secretarial standards for the FY 2022-23.
22. Adequacy of Internal Financial Controls with reference to the financial statements:
The Company has adequate and effective control systems, commensurate with its size and
nature of business, to ensure that assets are efficiently used and the interest of the
Company is safe guarded. Checks and balances are in place to determine the accuracy and
reliability of accounting data.
23. Risk Management Committee:
As per Regulation 21 of Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulation, 2015, the Board of Directors of the top 1000 listed
entities needs to constitute a Risk Management Committee. As the Company does not falls
into the aforesaid category, the Board has not constituted Risk Management Committee.
24. Particulars of Loans, Guarantees and Investments:
Company has not provided any loans or guarantees which are covered under the provisions
of Section 186 of the Act. The details of investments covered under the provisions of
Section 186 of the Act are given in the Notes to the Financial Statements forming part of
Annual Report.
25. Related Party Transactions:
All Related Party Transactions entered into during the financial year under review,
were on an arm's length basis, and in the ordinary course of business and are in
compliance with the applicable provisions of the Act.
Prior omnibus approval of the Audit Committee is obtained for the transactions which
are repetitive in nature or when the need for these transactions cannot be foreseen in
advance. Details of transactions with Related Parties as required under Section 134(3)(h)
of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed herewith
as “Annexure II” in form AOC-2.
The Policy on materiality of related party transactions and dealing with related party
transactions as approved by the Board may be accessed from your Company's website at
www.bluechiptexindustrieslimited.com.
Attention of Members is also drawn to Note 31 to the financial statements for the year
ended 31st March, 2023 which sets out the related party disclosures as per the
Indian Accounting Standard.
26. Corporate Social Responsibility (CSR):
Your Company has been a firm believer that each and every individual including an
artificial person owe something to the society at large.
Your Company for the FY 2022-23 was required to spend an amount of ' 9.70 Lakhs (2% of
the average net profits of last three financial years) towards Corporate Social
Responsibility (CSR) activities. Further previously excess paid amount of ' 0.50 Lakhs
towards Corporate Social Responsibility (CSR) can be availed as set-off from ' 9.70 Lakhs
as per Sec.135 of Companies act 2013 & Companies (Corporate Social Responsibility
Policy) Rules 2014.Therefor amount required to be spend on CSR activities for Fy 2022-23
was ' 9.20 Lakhs. However due to unavoidable circumstances if business, your company was
not able to spend Rs.9.20 lakhs towards Corporate Social Responsibility (CSR) activities.
Further in order to comply with the provisions of the Sec.135 of Companies Act 2013,
your company will be transferring the said amount of ' 9.20 Lakhs to any Fund specified in
Schedule VII of Companies act 2013 & Companies (Corporate Social Responsibility
Policy) Rules 2014, before 30th September,2023.
The Annual Report on CSR activities that includes details about brief outline on CSR
Policy developed and implemented by your Company and CSR initiatives taken during the FY
2022-23 in accordance with Section 135 of the Act and other details required to be
disclosed as per the latest format prescribed under the Companies (Corporate Social
Responsibility Policy) Rules, 2014 as amended by the Companies (Corporate Social
Responsibility Policy) Amendment Rules, 2021 dated 22nd January, 2021 is
annexed herewith as “Annexure III” to this Report.
Details about the CSR Policy adopted and formulated by your Company can be accessed
from your Company's website at www.bluechiptexindustrieslimited.com.
The Annual Action Plan for the FY 2022-23 as approved by the Board of Directors of your
Company at its Meeting held on 26th May, 2022 has also been uploaded on your
Company's website at www.bluechiptexindustrieslimited.com.
27. Committees of Board:
I. Nomination and Remuneration Committee:
The Nomination and Remuneration Committee (“NRC”) has been constituted by the
Board in compliance with the requirements of Section 178 of the Act. The NRC consists of
following three non-executive Directors:
1. Mr. Rohit .P. Bajaj |
- Chairman (Independent Director) |
2. Mr. Abhishek S Kamdar |
- Member (Independent Director) |
3. Mr. Siddharth .A. Khemani |
- Member (Non-Executive, Non-Independent Director) |
Terms of Reference of NRC: The role and terms of reference of the Committee are in line
with the provisions of Section 178 of the Companies Act, 2013. The Committee is empowered
to do the following:
a. Formulation of the criteria for determining qualifications, positive attributes and
independence of a director and recommend to the Board of Directors a policy relating to
the remuneration of the directors, key managerial personnel and other employees;
b. Formulation of criteria for evaluation of performance of Independent Directors and
the Board of Directors;
c. Identifying persons who are qualified to become Directors and who may be appointed
in Senior Management in accordance with the criteria laid down, and recommend to the Board
of Directors their appointment and removal;
d. Whether to extend or continue the term of appointment of the Independent Director,
on the basis of the report of performance evaluation of Independent Directors;
e. Recommend to the Board, all remuneration, in whatever form, payable to Senior
Management.
The Company's Nomination and Remuneration Policy for Directors, Key Managerial
Personnel and other employees is annexed herewith as “Annexure V”. Further, the
Company has devised a Policy for performance evaluation of Independent Directors, Board,
Committees and other individual Directors & Key Managerial Personnel's. The Company's
Nomination and Remuneration Policy is directed towards rewarding performance based on
review of achievements periodically. The Nomination and Remuneration Policy is in
consonance with the existing industry practice.
II. Audit Committee:
The Audit Committee has been constituted by the Board in compliance with the
requirements of Section 177 of the Act. The Audit Committee consists of following three
Directors with the Chairman being Independent Director.
1. Mr. Rohit .P. Bajaj |
- Chairman (Independent Director) |
2. Mr. Abhishek S. Kamdar |
- Member (Independent Director) |
3. Mr. Rahul .A. Khemani |
- Member (CFO & Director) |
Terms of Reference of the Audit Committee: The terms of reference of the Audit
Committee of your Company are in accordance with Section 177 and other applicable
provisions of the Act and the Rules framed thereunder, which inter alia include the
following:
a. Recommendation for appointment, remuneration and terms of appointment of auditors of
the Company;
b. Review and monitor the auditor's independence and performance, and effectiveness of
audit process;
c. Examination of the financial statement and limited review / auditors' report
thereon;
d. Approval or any subsequent modification of transactions of the Company with related
parties;
e. Scrutiny of inter-corporate loans and investments;
f. Valuation of undertakings or assets of the Company, wherever it is necessary;
g. Evaluation of internal financial controls and risk management systems;
h. Discussion with Internal Auditors of any significant findings and follow up there
on;
i. Review the functioning of the Whistle Blower mechanism or Vigil mechanism; etc.
III. Stakeholders Relationship Committee:
The Stakeholders' Relationship Committee (“SRC”) has been constituted by the
Board in compliance with the requirements of Section 178 (5) of the Act. The SRC comprises
of following four directors with the Chairman being Independent Director:
1. Mr. Rohit .P. Bajaj |
- Chairman (Independent Director) |
2. Mr. Shahin .N. Khemani |
- Member (Managing Director) |
3. Mr. Rahul .A. Khemani |
- Member (CFO & Director) |
4. Mr. Siddharth .A. Kheman |
i - Member (Non-Executive, Non-Independent Director) |
The terms of reference of the SRC, inter-alia are as follows:
a. Resolving the grievances of the security holders of the Company including complaints
related to transfer/ transmission of shares, non-receipt of annual report, non-receipt of
declared dividends, issue of new/ duplicate certificates, General Meetings etc.;
b. Review of measures taken for effective exercise of voting rights by shareholders;
c. Review of adherence to the service standards adopted by the Company in respect of
various services being rendered by the Registrar & Share Transfer Agent;
d. Review of the various measures and initiatives taken by the Company for reducing the
quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual
reports/ statutory notices by the shareholders of the Company;
28. Whistle Blower Policy / Vigil Mechanism:
Your Company has a Vigil Mechanism in place which includes a Whistle Blower Policy for
Directors and Employees of your Company to provide a mechanism which ensures adequate
safeguards to Employees and Directors from any victimization on raising of concerns of any
violations of legal or regulatory requirements, incorrect or misrepresentation of any
financial statements and reports etc.
The Vigil Mechanism/Whistle Blower Policy of your Company can be accessed from your
Company's website at www.bluechiptexindustrieslimited.com.
29. Disclosure under the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013:
Your Company has framed ‘Sexual Harassment Policy' and has constituted an Internal
Complaints Committee as per the requirement of Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder. No
complaints with allegations of any sexual harassment were reported during the year under
review.
30. Corporate Governance Report:
In terms of Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulation, 2015, please note that compliance with the corporate governance
provisions as specified in regulations 17, 17A, 18, 19, 20, 21,22, 23, 24, 24A, 25, 26, 27
and clauses (b) to (i) and (t) of sub-regulation (2) of regulation 46 and para C , D and E
of Schedule V shall be applicable to the company, in respect of a listed entity having
Paid Up Equity Share Capital exceeding Rupees Ten Crore and Net Worth exceeding Rupees
Twenty Five Crore, as on the last day of the previous financial year. Since your Company's
Paid Up Equity Share Capital and Net Worth as on FY 2022-23 are exceeding the above
mentioned figures, the Corporate Governance Report for the FY 2022-23 as required under
para C of Schedule V is attached.
31. Management Discussion And Analysis:
The global economy is gradually recovering from the impact of pandemic and at the same
time facing new challenges emerging from Russia's invasion of Ukraine. Tightening of
monetary policy by most Central Banks is expected to have a positive impact. Despite
monetary tightening, inflation is persistent in many key economies and it is anticipated
that global inflation will fall from 8.7% last year to 7% this year and settle at around
5% in the year 2024.
INDIAN ECONOMIC OVERVIEW & OUTLOOK
The Indian Economy continues to show resilience amid Global Uncertainties. Despite
significant challenges in the global environment, India was one of the fastest growing
economies in the world. India's overall growth remains robust and is estimated to be 6.9%
for the financial year 2022-23. Growth was driven by strong investment activity augmented
by the government's capex push and buoyant private consumption. Structural reforms like
the National Infrastructure Pipeline and National Monetization Plan by the Government is
expected to further boost infrastructure development. It is paving the path for further
development and continues to encourage projects across sectors, including reforms for
improving labour laws. V-shaped economic recovery is due to mega vaccination drive, robust
recovery in the services sector and growth in consumption and investment. This is being
demonstrated in high frequency indicators such as power demand, rail freight, GST
collection etc. Almost all emerging economies are reeling under external shocks, but
India's underlying economic fundamentals are strong and despite the short-term headwinds,
the impact on the longterm outlook is expected to be marginal. Inflation remained high,
averaging around 6.7% in FY 2022-23 but the current- account deficit narrowed in Q3 on the
back of strong growth in service exports and easing global commodity prices. Dwelling on
the outlook for FY2023-24, the Economic Survey 2022-23 issued by Ministry of Finance
projects that, India's recovery from the pandemic was relatively quick, and growth in the
upcoming year will be supported by solid domestic demand and a pickup in capital
investment. It further affirms that aided by healthy financials, incipient signs of a new
private sector capital formation cycle are visible and more importantly, compensating for
the private sector's caution in capital expenditure, the government raised capital
expenditure substantially. Explaining the economic outlook factoring global rudiments, the
slowdown in global growth and economic output coupled with increased uncertainty is likely
to dampen global trade growth. Strong domestic demand amidst high commodity prices will
raise India's total import bill and contribute to unfavourable developments in the current
account balance. These may be exacerbated by plateauing export growth on account of
slackening global demand. Should the current account deficit widen further, the currency
may come under depreciation pressure. Also, entrenched inflation may prolong the
tightening cycle, and therefore, borrowing costs may stay ‘higher for longer'. In
such a scenario, global economy may be characterised by low growth in FY24. However, the
scenario of subdued global growth presents two silver linings - oil prices will stay low,
and India's CAD will be better than currently projected. The overall external situation is
expected to remain manageable for India.
The global textile market grew from about $573 billion in 2022 to about US$ 610 billion
in 2023 at a compound annual growth rate (CAGR) of 6.6%.
The Russia- Ukraine war has led to an increase in commodity prices and supply chain
disruptions, causing inflation across goods and services impacting economies across the
globe. The textile market is however expected to grow to about US$ 755 billion in 2027 at
a CAGR of 5.5%. The COVID-19 pandemic and the Russia - Ukraine war had challenged the
textile industry drastically which is now on a recovery stage. Increasing demand for
apparel from the fashion industry coupled with the growth of e-commerce platforms is
expected to drive the market growth over the next few years.
The textile industry is an ever-growing market, with key competitors being China, the
European Union, the United States, and India. China is the world's leading producer and
exporter of both raw textiles and garments. India is among the top five textile
manufacturing country and is responsible for more than 6% of the total textile production,
globally. The rapid industrialization in the developed and developing countries and the
evolving technology are helping the textile industry to have modern installations which
are capable of high-efficient fabric production. Indian Textile Industry India is the
world's second-largest producer of textiles and garments. It is also the sixth-largest
exporter of textiles spanning apparel, home and technical products. The Indian textile and
apparel industry is expected to grow at 10% CAGR from 2019-20 to reach US$ 190 billion by
2025-26. India has a 4% share of the global trade in textiles and apparel. The textiles
industry contribute 2.3% to the country's GDP, 13% to industrial production and 12% to
exports. The textile industry has around 45 million of workers employed in the textiles
sector, including 3.5 million handloom workers.
The Textile market is poised to grow, led by boost in demand and the government support
in form of attractive schemes such as Production Linked Incentive (PLI), Mega Investment
Textile Parks (MITRA) will further drive the way for the US$ 250 billion target. Another
step taken by the Ministry of Textiles towards positioning India as a global leader in
technical textiles manufacturing is the invitation of Research proposals for Funding for
Design, Development and Manufacturing of Machinery, Tools, Equipment, and Testing
Instruments under NTTM.
Industry Information:
India's textiles sector is one of the oldest industries in the Indian economy, dating
back to several centuries. The industry is extremely varied, with hand-spun and hand-woven
textiles sectors at one end of the spectrum, with the capital-intensive sophisticated
mills sector on the other end. The decentralised power looms/ hosiery and knitting sector
forms the largest component in the textiles sector. The close linkage of textiles industry
to agriculture (for raw materials such as cotton) and the ancient culture and traditions
of the country in terms of textiles makes it unique in comparison to other industries in
the country. India's textiles industry has a capacity to produce a wide variety of
products suitable for different market segments, both within India and across the world.
Opportunities and Threats:
The Government has launched various support schemes and policies for the textiles
industry to enhance its global competitiveness. These schemes focus on export promotion,
infrastructure development, and technology upgradation, among other areas. These
initiatives aim to provide necessary support to the companies within the textiles
industry, while empowering them to enhance their global competitiveness.
Accelerated reopening of activities have re-opened opportunities for the textile market
which were quiet for a long time. Further, China plus one policy by USA and Europe will
lead to increase in demand for the Indian Market. With an added advantage of high quality
standards, our Company will be forging ahead with its sustainability vision to build
potential so as to grab opportunities coming its way.
The current disruptions caused by high fuel costs, port bottlenecks, and inflationary
pressures are expected to persist in the near future. These challenges create an
opportunity for fashion companies that have local and integrated supply chains to
strengthen their position by catering to customer demands in their respective regions of
operation.
Currently the biggest threat is the increase in prices of coal, dyes, chemicals, input
cost and raw materials which is making the industry non-competitive.
Outlook:
The Company expects to be on a profitable growth momentum. In the Domestic Market, the
overall consumer sentiments are positive. The Company is focused on liquidity management
through cost reduction initiatives and working capital optimization with an aim of
becoming a net debt-free Company in next 3 years.
Risks and Concerns:
The broader trends in the economy are expected to have a direct impact on your
Company's growth prospects as well. Inflation is expected to remain elevated for the
foreseeable future, driven by war-induced commodity price increases and broadening price
pressures.
In these circumstances, the ability to successfully navigate cost pressures would have
a significant bearing on the overall performance of your Company. Diminishing purchasing
power and demand due to the economic circumstances could result in fundamental shifts in
consumer behaviour and adversely impact the market for textiles.
Risk Management
The Company has a comprehensive Risk Management framework for the timely and effective
identification, assessment, monitoring and mitigation of potential risks that may impact
its business. It has robust mitigation strategies to overcome
adverse situations which may arise on account of foreseeable risks. The key risks and
their corresponding mitigation measures are depicted below:
The Company operates in diverse markets and is exposed to adverse macroeconomic
conditions, country-specific changes to the operating, regulatory and political
environment, natural disasters, global health emergencies or civil unrest that may impact
consumer demand, disrupt operations, lead to increased operational costs and impact
profitability. Geopolitical tensions, supply chain disruptions, higher inflation, monetary
tightening and global economic slowdown may reduce consumer spending and impact the growth
of the Company.
Mitigation
The Company continually monitors external macroeconomic and regulatory changes and is
supported by insights from the treasury and strategy teams into macroeconomic trends.
Moreover, it is focussed on increasing its geographical footprint, e-commerce expansion,
and producing innovative products to strengthen its position in the market.
The Company's Financial Performance:
The highlights of the Company's financial performance for the year ended 31st
March, 2023 is given at the start of the Directors Report.
Internal Control and Management Systems:
Your company has an adequate internal control system. There is a system of continuous
internal audit which aims at ensuring effectiveness and efficiency of systems and
operations. Your company has the benefit of internal control systems which have been
developed over the years and which has ensured that all transactions are satisfactorily
recorded and reported and all assets are protected against loss from unauthorised use or
otherwise. The process of Internal control and systems, statutory compliance, risk
analysis and its management and information technology are taken together to provide a
meaningful support to the management process. Also continuous efforts are being made to
strengthen the system.
Human Resource and Industrial Relations:
The Company believes that Human Resources play a significant role in achieving its
business vision. Hence, the Company continues to invest on hiring the best talent,
developing and retaining the available talent to ensure a sustainable talent supply within
the organization. The Company provides various opportunities to the employees to develop
their skills to take up higher responsibilities in the organization. The Company uses
various communication channels to seek employees' feedback about the overall working
environment and the necessary tools and resources they need to perform at their best
potential. The Company's employee strength stood at 144 as on 31st March, 2023.
Health, Safety and Security Measures:
The Company continues to accord the highest priority to health and safety of its
employees and communities it operates in. The Company has been fully committed to comply
with all applicable laws and regulations and maintains the highest standard of
Occupational Health and Safety and ensures safer plants by conducting safety audits, risk
assessments and periodic safety awareness training to employees. We believe in good health
of our employees.
Cautionary Statement:
Readers are cautioned that this discussion and analysis contains forward-looking
statements that involve risks and uncertainties. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. Actual results, performances or achievements,
risks and opportunities could differ materially from those expressed or implied in these
forward-looking statements. Readers are cautioned not to place undue reliance on these
forward-looking statements as these are relevant at a particular point of time &
adequate restrain should be applied in their use for any decision making or formation of
an opinion.
The above discussion and analysis should be read in conjunction with the Company's
financial statements included herein and the notes thereto.
32. Directors' Responsibility Statement:
In terms of Section 134(5) of the Companies Act, 2013, in relation to the Audited
Financial Statements of your Company for the financial year ended 31st March,
2023, the Board of Directors hereby confirm that:
a) in the preparation of the annual accounts for the financial year ended 31st
March, 2023, the applicable accounting standards read with the requirements set out under
Schedule III to the Act have been followed and there are no material departures from the
same;
b) the Directors have selected such accounting policies and applied them consistently
and made judgements 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 31st March, 2023 and of
the profit of the Company for the year ended on that date;
c) the Directors have 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;
d) the Directors have prepared the annual accounts on a going concern basis;
e) the Directors have laid down internal financial controls to be followed by the
Company and such internal financial controls are adequate and were operating effectively
and
f) the Directors have devised proper systems to ensure compliance with the provisions
of all applicable laws and such systems are adequate and operating effectively.
33. Disclosure on Insolvency and Bankruptcy Code, 2016:
There are no proceedings initiated / pending against your Company under the Insolvency
and Bankruptcy Code, 2016.
34. Acknowledgement:
Your Directors take this opportunity to thank the employees, customers, vendors,
investors of the Company and the
communities in which the Company operates, for their unstinted co-operation and
valuable support extended during the
year.
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For and on behalf of the Board of Directors |
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For Blue Chip Tex Industries Limited |
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Shahin .N. Khemani |
Rahul .A. Khemani |
|
Managing Director |
CFO & Director |
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DIN: 03296813 |
DIN: 03290468 |
Place: Mumbai |
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Date: 9th August, 2023 |
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