BOARD'S REPORT To the Members, Your Directors have pleasure in presenting their 35th Annual Report on the business and operations of the company along with the audited Financial Statements for the year ended 31st March,2015 and Auditor's Report thereon. FINANCIAL PERFORMANCE During the year under review your Company has showed improvement in its performance and were able to handle thevarious market conditions in both the domestic and export market. The sales turnover of the company was Rs. 30198.87 lacs ascompared to Rs. 29010.67 lacs of previous year. The Profit (before interest, depreciation & tax) amounted to Rs. 2137.89 lacs ascompared to Rs. 2591.79 lacs as compared to previous year whileProfit/(loss) after tax (PAT) amounted to Rs (141.77) lacs as compared to profit of Rs. 61.31 lacs in previous year. Your Directors & Management along with the entire team is taking all possible action to ensure that we are able to sustain our financial growth and business operational developments inspite of all adverse external conditions & competition. OPERATIONS The business operations of the company during the year under review has been satisfactory as compared to previous year. TheCompany produced 17098 tonnes of yarn valuing Rs.29935 lacs during the period under review as against 15954 tonnes of yarn valuing Rs. 29214 lacs produced during the last year. The performance of the Company is analyzed in detail in the Management Discussions and Analysis Report annexed to this report. EXPORTS During the year the Company had export of Rs. 3234.04 lacs against export of Rs. 2685.13 lacs during the previous year. The exportconstituted 10.71% of the total turnover of the Company. The Company has exported its spun yarn mainly in the established markets in Algeria, Indonesia, Singapore Germany, Egypt, Italy, Belgium, Morocco, Turkey, and Hong Kong. The Company plans to further increase its exports to the existing markets and also tap potential export markets for which emphasis is being made on new and better quality products. DIVIDEND For retention of funds / reserves in the company your directors do not recommend any dividend for the year 2014-15. TRANSFER TO RESERVES Due to inadequacy of profits, no amount has been transferred to the Reserves account for the year 2014-15. CAPITAL PROJECTS Normal Capital Expenditure In all the divisions of the Company, provisions have been made for capital expenditure of Rs. 50 lacs each unit. These are regular capital expenditure which shall be funded from internal accruals of the Company. PUBLIC FIXED DEPOSITS Your Company has not accepted any fixed deposits from the public during the financial year ended 31st March, 2015. Fixed deposits accepted from the public/non members before the commencement of Companies Act, 2013 and outstanding as on 31st March, 2014 have been repaid during the financial year ended 31st March, 2015. The company has issued the DPT-1,circular or circular in the form of advertisement inviting deposits from the members only by passing special resolution in its last Annual General Meeting held on 17th September 2014 in compliance with the provisions of section 73 of the Companies Act, 2013 read with rules 4(1) & 4(2) of The Companies (Acceptance of Deposits) Rules, 2014. Further, in order to accept the unsecured Fixed Deposits for the year 2014-15 from the members of the company, your company have taken all the required steps pursuant to compliance of section 73 of the Companies Act, 2013 including credit rating from the "CARE" (CREDIT ANALYSIS AND RESEARCH LIMITED), the details of which are given in the explanatory statement of the Notice of this Annual Report. The particulars related to Unsecured Public fixed Deposits u/s 73, covered under Chapter V of the Companies Act, 2013 as on 31stMarch 2015 are as under: (a) Unsecured Public Fixed Deposits : Rs. 73,33,000/- accepted during the year (b) Outstanding Unsecured Public Fixed : Rs. 48,83,000/-Deposits as on 31st March, 2015 (c) Unclaimed Fixed Deposits as on 31st : Rs. 19,000/-March, 2015 (d) There has been any default in repayment : NIL of the deposit or payment of interest thereon during the year & if so, number of such cases & the total amount involved. DIRECTORS AND KEY MANAGERIAL PERSONNEL In accordance with the provisions of the Companies Act, 2013 Mr. Anubhav Ladia (DIN: 00168312) will retire by rotation at the ensuing Annual General Meeting of the Company & being eligible have offered himself for re-appointment. During the year under review, Mr. R.K. Pandey ceased to be director w.e.f. 17th September, 2014 due to relinquishment .The Board of Directors have expressed their sincere gratitude towards the valuable guidance & services rendered by Mr.R.K.Pandey during his tenure of Directorship. Further, due to the resignation of Mrs. Amita Narain (DIN- 00017703) w.e.f. 12th February 2015, Mrs. Neelima Khetan (DIN:05113000) was appointed as an Additional Director whose tenure expires at the ensuing Annual General Meeting & in respect of whom the Company has received necessary notice under Section 161(1) of the Companies Act, 2013 in writing from member(s) along-with the deposit(s) of requisite amount under Section 160 of the Act proposing her candidature as Non-Executive Independent Women Director of the Company, who is not liable to retire by rotation. Further, during the year, Mr. Naval Kishore Soni was designated as Chief Financial Officer, Key Managerial Personnel w.e.f. 12th February, 2015. As on 31st March 2015, the Key Managerial Personnel of the Company consists of Mr. V. K. Ladia and Mr. Vikas Ladia, Whole Time Director, not liable to retire by rotation, Mr. Anubhav Ladia,Whole Time Director, liable to retire by rotation, Mrs. Bhanupriya Mehta Jain, Company Secretary and Mr. Naval Kishore Soni, Chief Financial Officer. INDEPENDENT DIRECTORS In compliance with the provision of Section 149 &152 and schedule IV and other applicable provision, if any, of the Companies Act, 2013 read with (Appointment and Qualification of Directors) rules 2014, Mr. Raj Singh Nirwan, Mr. Sunil Goyal, Mr. N.N. Agrawala, Mr. Ravinder Narain, Mr. Susheel Jain, Mrs. Amita Narain were appointed as Independent Directors at the 34th Annual General Meeting for a term of 5 years upto 31st March, 2015. DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under sub section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. FORMAL ANNUAL EVALUATION The evaluation/assessment of the Directors, KMPs and the senior officials of the Company is to be conducted on an annual basis to satisfy the requirements of the Companies Act, 2013. The Company has devised a Policy for performance evaluation of Independent Director, Board, Committees & other Individual Directors which includes criteria for performance evaluation of the Board as a whole. The Company's Nomination & Remuneration policy which includes the Director's appointment & remuneration including criteria for determining qualifications, positive attributes, independence of the director & other matters is attached as Annexure-I. AUDITORS & AUDITOR'S REPORT Statutory Auditors The Company had appointed M/s. M.C. Bhandari & Co, Chartered Accountants, Jaipur (Firm Registration No. 303002-E), as Statutory Auditors of the Company to conduct audit of the Financial Statements for the year ended March 31, 2015. Their term of appointment expires at the conclusion of 37th Annual General Meeting (subject to ratification of their appointment by Shareholders at every AGM). Therefore, being eligible, the Board of Directors have offered for the ratification of their appointment to the Shareholders. As required under the provisions of Section 139 of the Companies Act, 2013, the company has obtained a written certificate from the above mentioned Auditors to the effect that they confirm with the limits specified in the said Section and they had also given their eligibility certificate stating that they are not disqualified for appointment within the meaning of Section 141 of Companies Act, 2013. The observations made by the Auditors are self explanatory and have been dealt with in Independent Auditors Report & its annexures forming part of this Annual Report and hence do not require any further clarification. Cost Auditors & Cost Audit Report Pursuant to the orders of the Central Government under Section 148 and all other applicable provisions of the Companies Act, 2013 read with The Companies (Audit and Auditors) Rules, 2014 the Board of Directors had appointed M/s K.G. Goyal & Co, Cost Auditor, Jaipur (Firm Registration No.000017) for conducting the Audit of cost records maintained by the Company for the financial year 2014-15 & passed the ordinary resolution in the 34th AGM of the company for the approval of shareholders for the payment of remuneration to the cost auditors .Your company has received the Cost auditors report for the year 2014-15 within the prescribed time limits. Further in line with the aforesaid compliance, the Board of Directors has appointed M/s K.G. Goyal & Co, Cost Auditor, Jaipur (Firm Registration No.000017) in its meeting held on 22.05.2015 for conducting the Audit of cost records maintained by the Company for the financial year 2015-16.The Remuneration proposed to be paid to them requires ratification by the shareholders of the Company. In view of this, your ratification for payment of remuneration for the year 2015-16 to the Cost Auditors is being sought at the ensuing AGM. Secretarial Auditor and Secretarial Audit report Pursuant to Provision of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board had appointed M/s V.M. & Associates, Company Secretaries, Jaipur (FRN : P1984RJ039200) to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure-II to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. MEETINGS OF THE BOARD The Board of Directors met five times during the year on 22.05.2014, 14.08.2014, 12.11.2014, 12.02.2015 & 23.03.2015. Frequency and quorum at these meetings were in conformity with the provisions of the Companies Act, 2013 and the Listing Agreement entered into by the company with the Stock Exchanges. For further details, please refer report on Corporate Governance of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013. AUDIT COMMITTEE The Audit Committee's composition meets with the requirement of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Members of the Audit Committee possesses financial / accounting expertise / exposure. As on March 31, 2015 the Audit Committee comprises of 5 Directors, Mr. R.S. Nirwan, Mr. V.K. Ladia, Mr. Sunil Goyal, Mr. R.L. Kunawat, and Mr. N.N. Agrawala out of which 4 are Non Executive Directors. Mr. R.S. Nirwan is the Chairman of the Committee. Further, during the year,the Board has accepted all the recommendations made by the audit committee from time to time in compliance of Companies Act, 2013 & Clause 49 of the Listing Agreement SOCIAL OBLIGATIONS The Company continued its efforts for the betterment and upliftment of the living standards of Scheduled Castes and Scheduled Tribes dwelling in the adjoining areas of Dungarpur by providing them training and employment. The Company through its Charitable Trust and Educational Society is providing education to the Children of people of Dungarpur at Dungarpur Public School. About 1000 Children are given good quality of education in English medium through trained teachers. During the year Company has undertaken various social works for the benefit of local population of Dungarpur. PARTICULARS OF THE EMPLOYEES Pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a detailed statement is attached as Annexure-III. Further, with respect to Rule 5(2), no employee of the company is drawing salary as specified in the rule Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In terms of Section 136 of the Act, the Annual Report and Accounts are being sent to the Members & others entitled thereto. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO. Pursuant to section 134 (3) (m)of the Companies Act 2013 read with rule 8(3)of The Companies (Accounts ) Rules, 2014, relevant details of energy conservation, technology absorption and foreign exchange earnings and outgo are attached as Annexure-IV which forms a part of this Report. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT The operations of the company are reviewed in detail in the Management Discussions and Analysis Report (Annexure-V) and forms a part of this Report. CONTRACTS & ARRANGEMENTS WITH THE RELATED PARTY All Contracts/ arrangements/ transactions that were entered by the Company during the Financial Year are done on Arm's length basis. Disclosure of particulars of contract/arrangements entered into by the company with Related Parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 are attached herewith as Annexure-VI which forms a part of this report. The policy on related party transaction are put up on the website of the company at the link http://www.srsl.in/documents/RPT.POLICY.pdf. CORPORATE GOVERNANCE The Company has complied with the corporate governance requirements as stipulated under the listing agreement with the stock exchanges. A detailed compliance report on Corporate Governance along with certificate from the Statutory Auditors regarding the compliance with the Clause 49 of the Listing Agreement is given in the Annexure-VII which forms a part of this report. EXTRACT OF ANNUAL REPORT Extract of Annual Return in Form MGT-9 containing details as on the financial year ended 31st March, 2015 as required under Section 92(3) of the Companies Act, 2013 read with The Companies (Management and Administration) Rules 2014 is annexed herewith as Annexure-VIII which forms a part of this report. WHISTLE BLOWER POLICY / VIGIL MECHANISM The Company promotes ethical behaviors in all its business activities and has put in place a mechanism of reporting illegal or unethical behavior. The Company has a whistle blower policy wherein the directors and employees are free to report violations of law, rules, regulations or unethical conduct, actual or suspected fraud to their immediate supervisor or provide direct access to the Chairman of the Audit Committee in exceptional cases or such other persons as may be notified by the Board. The confidentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice.The details of the whistle blower policy/vigil mechanism is given in the corporate governance annexed to this report. RISK MANAGEMENT POLICY The Company operates in conditions where economic,environment and social risk are inherent to its businesses. In managing risk, it is the Company's practice to take advantage of potential opportunities while managing potential adverse effects.The Securities and Exchange Board of India (SEBI) under Clause 49 of the Listing Agreement requires that all listed Companies shall lay down the procedure towards risk assessment. It also requires that the company must frame, implement and monitor the risk management plan of the Company. To overcome this and as per the requirement of Clause 49 of the listing agreement, Board has framed a very comprehensive Risk Management policy to oversee the mitigation plan for the key risks faced by the Company. The objective of the policy is to make an effective risk management system to ensure the long term viability of the company's business operations. The same is reviewed quarterly by senior management and periodically also by the Board of Directors. For a detailed discussion, please refer to corporate Governance annexed to this report. COMPLIANCE Material changes and commitments, if any, 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: During the year there were no material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report like settlement of tax liabilities, operation of patent rights, depression in market value of investments,institution of cases by or against the company, sale or purchase of capital assets or destruction of any assets etc. Details in respect of adequacy of internal financial controls. For detail discussion with reference to adequacy of internal financial controls, please refer to Management Discussions and Analysis Report annexed with this report. Details of Subsidiary/Joint Ventures/Associate Companies/ & its Performance. Your company have no Subsidiary/Joint Ventures/Associate Companies. DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 134 (5) Your Directors hereby confirm that: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the Directors have 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 and loss of the company for that period; (c) the Directors had taken proper and sufficient care 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) the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate & were operating effectively. (f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. ACKNOWLEDGMENTS Your Directors are happy to place on record their sincere appreciation of the dedicated services rendered by officers, staff and workers and their contribution towards successful performance of the Company during the year. Your Directors would also like to express their sincere thanks to the Company's Bankers, Financial Institutions, Shareholders and Fixed Deposit Holders for the continued cooperation and support and confidence reposed by them in the Company. By order of the Board For Shree Rajasthan Syntex Limited (V.K. LADIA) CHAIRMAN & MANAGING DIRECTOR DIN: 00168257 Place: New Delhi Date: 8th August, 2015 |