DIRECTORS' REPORT: TO THE MEMBERS, Your Directors have pleasure in presenting the 37th Annual Report along with Audited Financial Statements for the year ended 31st March, 2015 OPERATIONS: During the year under review, the Total Income of your Company rose to Rs.1,52,653 Lacs from Rs.1,31,920 Lacs in the previous year, reflecting a growth of 15.72%. The net profit after tax stood at Rs.7,879 Lacs against Rs.6,357Lacs in the previous year, recording a growth of 23.94%. DIVIDEND: Your Directors are pleased to recommend a Dividend of Rs.10 /- (previous year Rs.8/-) per Equity Share of Rs.10/- each for the year 2014-15, with a total payout of Rs. 1,128 Lacs including Tax on Dividend as against Rs.877 Lacs including Tax on Dividend in the previous year. SHARE CAPITAL: The paid up Share Capital of the Company as on 31st March, 2015 was Rs. 937.40 Lacs. During the year under review the Company has not issued shares with deferential voting rights nor granted stock options nor sweat equity. As on 31st March, 2015, none of the Directors of the Company hold convertible instruments. RESERVES: The Company proposes to transfer Rs.17,500 Lacs to General Reserves. MANAGEMENT DISCUSSION AND ANALYSIS: Current Year Review During the year under review, macro economic fundamentals were set to improve under the stable government at the Centre. Inflation continued to haunt the economy forcing Reserve Bank of India (RBI) to follow tighter monetary policy. Government continued its path towards putting economy on the path of growth trajectory. But the results have yet not percolated to the grass root level and will require some more time for the off-shoots of growth to appear on the economic ground. World economies continue to face the vagaries of VUCA (Volatility, Uncertainty, Complexity and Ambiguity) world. Pull back of quantitative easing (QE III) and issues in European economies veiled the economic prospects all over the world at large. On the other hand, downward commodity and energy prices provided boosts and banes to different economies. Falling crude prices is a case to the point. While providing a boost to the developing power hungry economies like that of India, it played devastating effect on economies like Russia's. While service sector grew, manufacturing did not. Against this backdrop, your Company continued its path on growth trajectory. Revenue increased by 15.72% and net profit by 23.94%. largely through the excellent support provided by all its stakeholders. Future Outlook Make in India campaign is expected to benefit the textile sector as the government undertakes sector specific initiatives and implement policies and programs to improve overall business climate and investments. This measure is likely to increase, thanks to reduced competition from China. Revival of economy will also boost domestic consumption, leading to widening growth prospects for this industry. However, intensifying competition from neighbouring countries like Bangladesh, Pakistan, Vietnam, etc., may be challenging. Vagaries of commodity prices, exchange rate fluctuations and delayed economic revival may act as negatives to the growth prospects for this industry. Your Company is geared up to exploit the opportunities and challenges that arise in such conditions. Its strong distribution network, wider product range, responsiveness to the changing market conditions and resilient work force, all this can help your Company to pursue its path of future growth. On an overall basis, your Company expects a better performance in the ensuing year as well. Forward Looking Statements Statement in the Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company's operations include raw material availability and prices, cyclical demand and pricing in the Company's principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factors. VIGIL MECHANISM / WHISTLE BLOWER POLICY: The Company has framed a Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The details of the Policy are given in the Corporate Governance Report and the Policy is posted on the Company's website. CORPORATE GOVERNANCE: A report on Corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchange(s) forms part of the Annual Report. Certificate from the Auditors of the Company confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid clause 49 forms part of the Annual Report. EXTRACT OF ANNUAL RETURN: Extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-I to this Report. NUMBER OF BOARD MEETING: The Board of Directors met 4(four) times in the year, the details of which are provided in the Corporate Governance Report. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS: During the year under review, the Company has not made any loans, guarantees and investments which are governed by the provisions of section 186 of the Companies Act, 2013. Details of outstanding Loans granted under the provisions of the Companies Act, 1956, are provided in the notes to the Financial Statements. RELATED PARTY TRANSACTIONS: All related party transactions that were entered into during the financial year were in the ordinary course of business and were on an arm's length basis. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other related parties which may have a potential conflict with the interest of the Company at large. All related party transactions for the year are placed before the Audit Committee as well as before the Board for approval. The transactions entered into with related parties are reviewed on a quarterly basis by the Audit Committee. The policy on Related Party Transactions as approved by the Audit Committee and Board is uploaded on the Company's website at the link <http://www.siyaram.com/> Communications.html. The details of the transactions with Related Parties to be provided in Form AOC-2 is annexed herewith as Annexure-II. Members can refer to Note No. 32 to the Financial Statements which set out related party disclosures. RISK MANAGEMENT: In line with the regulatory requirements, the Company has framed a Risk Management Policy to identify and access the key business risk areas and a risk mitigation process. A detailed exercise is being carried out at regular intervals to identify, evaluate, manage and monitor all business risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS: There are no significant and material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations. INTERNAL CONTROL SYSTEM: Your Company has adequate system of internal controls to ensure that all the assets are safeguarded and are productive. Necessary checks and controls are in place to ensure that transactions are properly verified, adequately authorized, correctly recorded and properly reported. The Internal Auditors of the Company conducts Audit of various departments to ensure that internal controls are in place and submit quarterly and yearly Reports to the Audit Committee. The Audit Committee regularly reviews these Reports and the Company when needed takes corrective actions. HUMAN RESOURCES: Your Company treats its human resources as its important asset and believes in its contribution to the all round growth of your Company. Your Company takes steps, from time to time, to upgrade and enhance the quality of this asset and strives to maintain it in agile and responsive form. Your Company is an equal opportunity employer and practices fair employment policies. Your Company is confident that its Human Capital will effectively contribute to the long term value enhancement of the organization. Your Directors further state that 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. SUBSIDIARY COMPANIES: The Company has no subsidiaries. FIXED DEPOSITS: During the year under review, your Company has not accepted any fixed deposits and there were no unclaimed deposits or interest thereon as on 31st March, 2015. DIRECTORS: Directors retiring by rotation Shri. Gaurav P. Poddar and Shri. Ashok M. Jalan, Directors, retire by rotation and being eligible, offer themselves for reappointment. Necessary resolution for their re-appointment is placed before the shareholders for approval. Your Directors commend the resolutions. Brief resume of Directors being appointed/ re-appointed as required by Clause 49 of the listing agreement is provided in the Annexure to the notice convening the Annual General Meeting of the Company. Declaration from Independent Directors All Independent Directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Company's Policy on appointment and remuneration of Directors Appointment of Independent Directors With the coming into force of the Companies Act, 2013, the Board on the recommendation of the Nomination and Remuneration Committee appointed all the existing Independent Directors viz. Shri. Harish Motiwalla, Shri. Mangesh Teli, Shri. Dileep Shinde, Shri. Pramod Jalan, Shri. Shailesh Vaidya and Shri. Ashok Garodia for a period of 5 years upto 31st July, 2019 and Shri. Tarun Kumar Govil upto 29th July, 2019, as Independent Directors under section 149 of the Companies Act, 2013, subject to approval of the shareholders. The shareholders at the 36th AGM held on 27th September, 2014, approved their appointment. Criteria for appointment of Independent Directors The Independent Directors shall be of high integrity with relevant expertise and experience with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management, so as to have a diverse Board. Criteria for appointment of Managing Directors/ Whole Time Directors The Nomination and Remuneration Committee shall identify persons of integrity who possess relevant expertise and experience particularly in the Textile Industry, leadership qualities required for the position and shall take into consideration recommendation, if any, received from any member of the Board. Remuneration Policy The Company follows a policy on remuneration of Directors and Senior Management Employees, details of the same are given in the Corporate Governance Report. Performance Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Nomination and Remuneration Committee has laid down the criteria for evaluation of the performance of individual Directors, the Board as a whole and also the Secretarial Department. Based on the criteria the exercise of evaluation was carried out through a structured process covering various aspects of the Board functioning such as composition of the Board and committees, experience & expertise, performance of specific duties & obligations, governance & compliance issues, attendance, contribution at meetings, etc. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Director at a separately convened meeting at which the performance of the Board as a whole was also evaluated and the performance of the Secretarial Department was also reviewed. The performance of the Independent Directors was carried out by the entire Board (excluding the Director being evaluated). The Directors expressed their satisfaction with the evaluation process. DIRECTORS' RESPONSIBILITY STATEMENT: As stipulated under Section 134(3)(c) of the Companies Act, 2013, your Directors confirm as under:-i) that in the preparation of the accounts for the financial year ended 31st March 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 the year under review; iii) that the Directors have taken proper and sufficient care for 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; iv) that the Directors have prepared the accounts for the financial year on going concern basis. v) the Directors have laid down internal financial controls, which are adequate and were operating effectively. vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. INDUSTRIAL RELATIONS: Industrial relations with staff and workmen during the year under review continued to be cordial. PARTICULARS OF EMPLOYEES: The information required pursuant to Section 197(12) of the Companies Act, 2013, read with rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, will be provided upon request in terms of section 136 of the Act, the Report is being sent to all the shareholders of the Company and others entitled thereto, excluding the information. The said information is available for inspection by the Members at the corporate office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Members interested in obtaining a copy thereof, may write to the Company Secretary in this regard. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is given in Annexure -III to this report. AUDITORS: a. Statutory Auditors. In the last AGM held on 27th September, 2014, M/s. Jayantilal Thakkar & Co., Chartered Accountants, have been appointed Statutory Auditors of the Company for a period of 3(three) years. Resolution for the ratification, of their appointment, to hold office from the conclusion of this AGM till the conclusion of the next AGM, is placed before the members of the Company at the ensuing AGM. As required under section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. Jayantilal Thakkar & Co., Chartered Accountants, that their appointment, if made, would be in conformity with the limits specified in the said section. Members are requested to ratify their appointment as Auditors and to fix their remuneration. Further, the Report of the Statutory Auditors forms part of the Annual Report. The observations made in the Auditors' Report are self explanatory and therefore do not call for any further comments. b. Cost Auditors: The Board of Directors at their Meeting held on 25th May, 2013 appointed M/s. Bhuta & Associates, as Cost Auditors for the financial year 2013-14, which was approved by the Central Government. The Cost Audit Report for the financial year 2013-14 in XBRL format was submitted within due date on 19th August, 2014. As per the provisions of section 148 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014 framed there under and the Cost Audit Orders issued from time to time, Cost Audit was not applicable to the Company for the financial year 2014-15. The Board of Directors, have appointed Shri. Yogesh Bhuta, Proprietor of M/s. Bhuta & Associates, Cost Accountants, as Cost Auditors to audit cost records of the Company for the F.Y. 2015-16. A resolution seeking members approval for the remuneration payable to them forms part of the Notice convening the AGM. c. Secretarial Auditors. Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed M/s. J. H. Fatehchandka & Co., Company Secretaries in Practice to undertake Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure - IV. CORPORATE SOCIAL RESPONSIBILITY: As part of its initiatives under Corporate Social Responsibility (CSR) the Company has undertaken projects which are largely in accordance with Schedule VII of the Companies Act, 2013. The Annual Report on CSR activities is annexed herewith as Annexure - V APPRECIATION: Your Company is grateful for the continued co-operation and support extended to it by the Government and Semi-Government Authorities, Shareholders, Financial Institutions and Banks. Your Directors also express their warm appreciation for the dedicated and sincere services rendered by the Employees of the Company. For and on behalf of the Board of Directors RAMESH D. PODDAR Chairman and Managing Director Place : Mumbai Dated : 9th May, 2015. |