DIRECTOR'S REPORT To, The Members, Your Directors have pleasure in presenting their 33rd Annual Report on the business and operations of the Company and Audited Statement of Accounts for the year ended 31st March, 2015. Dividend We are pleased to announce that the Board of Directors has recommended dividend of Re. 0.07 per equity share of Re. 1/- each (i.e. 7% of face value) aggregating Rs. 49,00,000 (excluding dividend distribution tax as applicable) for the year ended on 31st March, 2015. Reserves No amount of current year's profits was transferred to the general reserve. Extract of Annual Return The details forming part of the extract of the Annual Report in form MGT-9, as required under section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, are included in this Report as Annexure-I and forms an integral part of this report. Operations During the period under review the profit after tax (PAT) stood at 74.95 Lacs (Previous Year Rs. 47.02 Lacs), there was an increase of 59.37% as compared to last financial year. The performance for the coming year is expected to improve upon from the last year if right macro economic indicators are achieved in future. Director s Responsibility Statement The Director's state 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 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 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; (e) The Directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and (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. Directors and Key Managerial Personnel Appointments / Resignations during the year 1 The following Independent Directors were appointed during the financial year 2014-2015: 1. Mr. Sanjiv Rungta (DIN: 00381643) 2. Mr. Nirmal Jain (DIN: 00894735) 3. Mr. Piyush Shah (DIN: 02333557) 4. Mr. Rakesh Garodia (DIN: 00143438) 1 Mrs. Shilpa Poddar (DIN: 00164141) was appointed as Woman Director of the Company, in terms of provisions of Section 149(1) of the Companies Act, 2013 read with Clause 49 of the Listing Agreement. However, there were no Resignations from the Board of Directors during the financial year. Particulars of Employees The information required pursuant to Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure III to the Directors Report. Particulars of employees drawing remuneration in excess of limits prescribed under Section 134 (3)(q) read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 : There are no employees drawing remuneration exceeding Rupees 60 Lacs per annum if employed throughout the financial year or Rupees 5 Lacs per month if employed for part of the financial year or draws remuneration in excess of Managing Director or Whole time Director or Manager and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company. 10. Formal Annual Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration, Risk Management and Stakeholders Relationship Committees. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process. 11. Declaration by Independent Directors Declarations by the I ndependent Directors that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 has been received by the Company. 12. R emuneration policy The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The said policy is also uploaded on the website of the Company; i.e. www.swastivinayaka.com . 13. Auditors The Auditors, M/s. Sanjay Raja Jain & Co., Chartered Accountants, (FRN 120132W), Mumbai, will retire at the ensuing Annual General Meeting and, being eligible; offer themselves for reappointment for a period of five years from the conclusion of this Annual General Meeting [AGM] till the conclusion of Annual General Meeting [AGM] to be held in 2020. The report given by the Auditors on the financial statements of the Company is a part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. 14. Secretarial Audit Report In terms of Section 204 of the Companies Act, 2013 and Rules made thereunder, M/s. Sandeep Dar and Co., Practicing Company Secretaries have been appointed as Secretarial Auditor of the Company. The report of the Secretarial Auditor is enclosed as Annexure IV to this report. The report is self-explanatory however the Company has initiated necessary steps to comply with various non-compliances as per the provisions of various statute mentioned under the Secretarial Audit Report. 15. Vigil M echanism Pursuant to the provisions of sub-section (9) and (10) of Section 177 of the Companies Act, 2013, a Vigil Mechanism for Directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.swastivinayaka.com . 16. Composition of Audit Committee Composition of Audit Committee as required under section 177 (8) of the Companies Act, 2013. The Composition of Audit Committee is as follows: 1. Mr. Sanjiv Rungta - Chairman 2. Mr. Nirmal Jain - Member 3. Mr. Dinesh Poddar - Member 4. Mr. Piyush Shah - Member 17. There were no material changes and commitments, which adversely affects 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. 18. The Risk management Policy has been uploaded on the website of the Company at www.swastivinayaka.com <http://www.swastivinayaka.com>. There were no risk identified which would threaten the existence of the Company during the year under review. 19. Details in respect of adequacy of internal financial controls with reference to the Financial Statements The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. 20. Deposits The Company has not accepted any deposits during the year. 21. Particulars of loans, guarantees or investments under section 186 of the Companies Act, 2013 During the year under review, the Company have neither made any investments nor provided any guarantees and security which are governed by the provisions of section 186 of the Companies Act, 2013. However, the Company has given loan, the details of which are given below: 22. Particulars of contracts or arrangements with related parties The particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto is disclosed in Form AOC-2 which is enclosed as Annexure-II. 23. Corporate Governance Your Company believes that Corporate Governance is a code of self discipline. In the line with this policy, the Board of Directors strongly believes that it is very important that the Company follows healthy Corporate Governance practices and reports to the shareholders the progress made on the various measures undertaken. The Corporate Governance Certificate from Practicing Company Secretaries regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing Agreement is annexed with this report. 24. Management Discussion and Analysis a. Corporate Overview: Swasti Vinayaka Synthetics Limited (SVSL) is a leading textile and branded apparel Company having its corporate office in Mumbai. b. Overview of the Economy: As per the latest GDP growth estimates, Indian economy grew by 7.4%o in FY 15 compared to 6.9% in FY 14, mostly driven by improved economic fundamentals and revision of GDP methodology calculation. Even inflation showed signs of moderation, a welcome sign- wholesale price and consumer price inflation declined to 4.2% and 7.4% respectively, compared with last year's 6.3% to 10.1%. Reduced inflation, falling crude oil prices, stable rupee, improved purchasing power and consumer spending, higher capital inflows supported by the government policy reforms have already put India on an accelerating growth track and improved the business outlook. The Government envisages GDP growth to accelerate to 8% in FY 16 driven by strengthening macroeconomic fundamentals and implementation of policy reforms recently announced. Reforms like e-auctions of coal mines and telecom, FDI insurance, speedier regulatory approvals, etc. will be critical growth enablers to de- bottleneck stalled projects, improve the investment outlook and the ease of doing business in the country. Reforms currently underway such as GST implementation, Amendment on Land Acquistion Bill, Labour Reforms, etc. are expected to provide the requisite thrust for growth in the medium-term. c. Industry Structure and Developments: The Textile and Apparel industry contributes around 6% to India's GDP, 11% to export earnings and is the second largest employer after agriculture. The industry has shown continued growth with a potential to increase its global trade share from the current 4.5% to 8% in the next 5 years supported by a rich abundance of raw material, skilled labour and talent. In F.Y. 2015, the textile industry is estimated to have contributed USD 42 Billon (4%) to India's GDP, and 27% to the country's foreign exchange inflows. d. Business Overview: The Company deals in Textiles Fabrics, Readymade Garments and Yarn Doubling. SVSL has a very strong presence in India which can fetch viable business opportunities in the Company's business segment. The Company has launched aggressive marketing schemes and introduced variety of linen cotton and P/C shirting fabrics to cater to the demand of the RMG and Corporate sector. Company has good corporate relationship with Raymonds Ltd, Trent Limited., Future Group, Reliance Industries Limited., Arvind Lifestyle Brand Ltd., etc. and they are regular customers of the Company. There is a great potential in the Company to increase its market share in this segment as our relationship and understanding with the customers is very strong. e. Opportunities and Threats: Textile industry is one of the largest employers in India and has strong linkages with the rural economy. The growing young middle-class population is a source of great potential and provides immense opportunities to spur growth in the industry going forward. The major challenge that the textile and apparel industry is facing is rising production costs, arising out of rising wages, power and interest costs. Your Company is continuously improving its designing skills and introducing high end fabric by combination of various fibers to have an edge over its competitors. It will continue to stress on improving quality standards, reducing lead time in supplying orders, competitive pricing of product and more stress on product innovation and designing to meet the new set of challenges. f. Internal Control systems and their Adequacy: Your Company has an effective Internal control and risk-mitigation system, which is constantly assessed and strengthened with new/revised standard operating procedures. The Company has entrusted the Internal & operational audit to Messrs. Sanjay Raja Jain (Membership No. 108513), a firm of Chartered Accountants. The main thrust of the internal audit process is test and review of controls, independent appraisal of risks, business process and benchmarking internal controls with best practices. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen them. The Audit Committee of the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of Directors. g. Cautionary Statement: Statements in this Director's Report & Management Discussionafter agriculture. The industry has shown continued growth with a potential to increase its global trade share from the current 4.5% to 8% in the next 5 years supported by a rich abundance of raw material, skilled labour and talent. In F.Y. 2015, the textile industry is estimated to have contributed USD 42 Billon (4%) to India's GDP, and 27% to the country's foreign exchange inflows. 25. Obligation of Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition And Redressal) Act, 2013 Company has adopted a policy for prevention of Sexual Harassment of Women at workplace as required under the Act. The following is a summary of sexual harassment complaint received or dispose of during the year 2014-15. 1 No. of Complaint received: NIL 1 No. of Complaint disposed off: NIL. 26. Conservation of energy, technology absorption and foreign exchange earnings and outgo In the view of the nature of the Company, Rule 8 of Company (Accounts) Rules, 2014, the relevant data pertaining to conservation of energy and technology absorption are given in the Annexure forming part of this report. 27. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company s operations in future 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. 28. Listing Agreement with the Stock Exchanges Your Company continues to be listed on the Stock Exchange, Mumbai where the company's shares are being traded. The Company confirms that it has paid the Annual Listing Fees for the year 2014-2015 to Bombay Stock Exchange where the Company's Shares are listed. 29. Acknowledgement We record our gratitude to the Banks and others for their assistance and co-operation during the year. We also wish to place on record our appreciation for the dedicated services of the employees of the Company. We are equally thankful to our esteemed investors for their co-operation extended to and confidence reposed in the management. By Order of the Board Swasti Vinayaka Synthetics Limited. Ramprasad Poddar Chairman DIN :00163950 Date: May 30, 2015 Place: Mumbai Registered Office: J-15, M.I.D.C.,Tarapur, Boisar, Dist. Thane, Maharashtra - 401506. |