BOARDS REPORT To, The Members The Directors are pleased to present the Thirtieth Annual Report and the Company's Audited Financial Statement for the financial year ended March 31, 2015 Financial Performance The Company continued to maintain its upward trend by registering Sales of Rs. 65626.64 lacs as against Rs. 61246.64 lacs in the previous year. However, Profit before Finance Costs, Depreciation, and Tax has decreased from Rs. 7230.24 lacs to Rs. 6384.49 lacs. After providing for finance costs and Depreciation amounting to Rs. 4258.73 lacs and Rs. 645.05 lacs respectively and giving effect of extraordinary items arising due to change in depreciation owing to change in useful life of Assets amounting to Rs. 92.43 lacs, the Profit before Tax for the year under review has amounted to Rs. 1573.14 lacs as compared to Rs 2121.88 lacs in the previous year. Net profit after tax for the year is Rs. 1170.35 lacs as compared to Rs 1565.01 lacs in the previous year. Listing information During the year under review the equity shares of the Company are also listed and admitted to dealing on the National Stock Exchange of India Limited (NSE) with effect from 13th March, 2015 along with the BSE Limited. Change In The Share Capital The authorized share of the Company as on 31st March, 2015 is Rs. 50.00/- Crores. During the year under review the Company has increased the authorized share capital from Rs. 35.00 crores( Rupees Thirtyfive Crores only) to Rs. 50.00 crores (Rupees Fifty Crores only) divided into 3,00,00,000 (Three Crores) equity shares of Rs.10/-(Rs. Ten only) each, 50,00,000 (Fifty Lakhs) 5% Non-Cumulative Redeemable Preference Shares of Rs.10 (Rs. Ten only) each and 1,50,00,000 (One Crore Fifty Lacs) 2% Non-convertible Non-Cumulative Redeemable Preference Shares of Rs.10 (Rs. Ten only) each. The paid up share capital of the Company is Rs. 39,58,70,000/ divided into 2,91,87,000 Equity shares of Rs.10 each fully paid up, 50,00,000 5% Non Convertible, Non Cumulative Redeemable Preference Shares of Rs.10 each fully paid up AND 54,00,000 2% Non Convertible, Non Cumulative Redeemable Preference Shares of Rs.10 each fully paid up. During the year under review the Company has issued 54,00,000 2% Non-convertible Non-cumulative Redeemable Preference Shares of Rs. 10/- each at the price of Rs.50 per share (including premium of Rs. 40 per share) on private placement basis to the selected group of investors. Your Board of directors has recommended for sub-division of Equity Shares of Rs. 10/- each into Ten Equity Shares of Rs.1/- each which was approved by the Shareholders through postal ballot and e-voting on 24th July, 2015. Accordingly, the 1 (One) Equity Shares of face value of Rs. 10/- each will be sub-divided into 10 (Ten) Equity Shares of face value of Rs. 1/- each by way of corporate action to the shareholders who held the shares on the Record Date dated 19th August, 2015. Dividend With a view of augmenting the financial resources for generating stable growth the Board of Directors of the company has decided to carry forward entire profit and hence they did not propose any dividend for the financial year on equity shares. Transfer of unclaimed dividend to investor education and protection fund Pursuant to the provisions of section 125 of the Companies Act, 2013, amount lying unclaimed in the unpaid dividend accounts of the Company, is required to be transferred to the Investor Education and Protection Fund (IEPF) of the Central Government after such amount has remained unclaimed or unpaid for a period of seven years from the date of transfer to the unpaid dividend account. During the year, the Company transferred an amount of Rs. 367,462/- to the IEPF being the unclaimed dividend for the financial period ended 31st March, 2007. The Company shall transfer the unpaid divided to the IEPF of the Central Government after 7 years from the date of transfer to the unpaid divided from the year 2007-08 and onward. The Shareholders are requested to encase their unpaid dividend warrants or approach to the company for renewal thereof immediately. Susbsidiaries, Joint Ventures and Associate Companies Pursuant to the provisions of section 2(6), 2(87) the Company was not having any subsidiary, associate or joint venture company at the beginning orduring the financial year as well as at the end of the financial year 2015. Directors Responsibility Statement Your Directors state that: a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with 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 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 as at March 31, 2015 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 Act 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 that such internal financial controls are adequate and are operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Management Discussion and Analysis Report The Management Discussion and Analysis forms an integral part of this Report and gives detail of the overall industry structure, developments, performance and state of affairs of the Company's various businesses viz., the decorative business international operations, industrial and home improvement business, internal controls and their adequacy, risk management systems and other material developments during the financial year (Annexure I). Corporate Governance Corporate Governance is an ethically driven business process that is committed to values aimed at enhancing an organizations brand and reputation. The Companies Act, 2013 and amended Listing Agreement have strengthened the governance regime in the country. The Company is in compliance with the governance requirements provided under the new law and had proactively adopted many provisions of the new law, ahead of time. The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. A separate report on Corporate Governance (Annexure-II) is provided together with a Certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Equity Listing Agreement with the Stock Exchange(s) (Annexure-III). A Certificate of the MD and CFO of the Company in terms of sub-clause IX of Clause 49 of Equity Listing Agreement, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed. (Annexure IV) Fixed Deposits During the financial year 2014-15, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014 and there is no outstanding amount of deposits as at 31st March, 2015. Further that the Company has not accepted any deposits in contravention of the provisions of the Companies Act, 2013. Contracts and Arrangements with Related Parties During the financial year 2014-15, the Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, which were in the ordinary course of business and on arms' length basis and in accordance with the provisions of the Companies Act, 2013, Rules issued there under and Clause 49 of the Listing Agreement. During the financial year 2014-15, there were no transactions with related parties which qualify as material transactions under the Listing Agreement and the Companies Act. In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement, the Company has formulated a Policy on Related Party Transactions which is also available on Company's website at www.groupsignet.com/investorrelations/ /> Policies. The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and Related Parties. Therefore the Company is not required to furnish any particulars in the Form AOC-2. Corporate Social Responsibilty 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 details of the same are attached as Annexure-V in the report. 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. Internal Financial Control According to Section 134(5) (e) of the Companies Act, 2013 the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The 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 Directors Appointment During the financial year 2014-15 Mrs. Nishtha Neema and Mr. Akhilesh Gupta were appointed as Additional director in the category of Independent Directors of the Company at the meeting of the Board of Directors of the Company held on 13th August, 2014 and 14th February, 2015 respectively. Subsequently Mrs. Nishtha Neema was appointed as an Independent Director by the shareholders at the AGM held on 30th September, 2014. Mrs. Nishitha Neema was also considered as the Women Director as required under section 149 read with the Clause 49 of the Listing Agreement. The Independent directors have submitted a declaration as required under section 149(6) confirming that they fulfill the criteria of independence and in accordance with the opinion of the Board, all the independent directors are eligible to hold the said position. Resignation Shri Ankit Bhandari and Shri Deepak Mehta, Independent Directors have resigned from the Board w.e.f. 13th August, 2014 due to their pre-occupations accordingly they were stepped down from the Board of Directors of the Company w.e.f. 13th August, 2014. The Board places on record its appreciation for their valuable contribution during their association with the Company. Mr. Saurabh Sangla (DIN: 00206069) will retire by rotation at ensuing Annual General Meeting and being eligible, offer himself for re-appoint. Annual Evaluation of Board's performance: In terms of the provisions of the Companies Act, 2013 read with Rules issued there under and Clause 49 of the Listing Agreement, the Board of directors on recommendation of the Nomination and Remuneration Committee, have evaluated the effectiveness of the Board/ Director(s) for the financial year 2014-15. Key Managerial Personnel The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 are as follows: Mr. Mukesh Sangla: Managing Director (DIN: 00189676) Mr. Sumit Jamad: Chief Financial Officer Mrs. Preeti Singh: Company Secretary & Compliance Officer During the year there was no change (appointment or cessation) in the office of any KMP. Number of Meetings of the Board The details of the number of Board and Audit Committee meetings of the Company are set out in the Corporate Governance Report which forms part of this Report. Disclosure Relating to Remuneration of Directors, Key Managerial Personnel And Particulars of Employees In terms of the provisions of the Companies Act, 2013 read with Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the remuneration of Managerial personal is set out in the 'Annexure VI' which forms part of this report. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, and Redressal) Act, 2013 In accordance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made there under, the Company formulated an internal policy on Sexual Harassment at workplace (Prevention, Prohibition and Redressal) which is also available on Company's website at www.groupsignet.com/investorrelations/ Policiesduring the year under review. The policy aims at educating employees on conduct that constitute sexual harassment, ways and means to prevent occurrence of any such incident, and the mechanism for dealing with such incident, and the mechanism for dealing with such incident in the unlikely event of its occurrence. The Company has also constituted an Internal Committee as required under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made there under. The Company has zero tolerance on Sexual Harassment at workplace. During the year under review, no complaints were received against the sexual harassment at workplace. Auditors & their Report A. Statutory Auditors: The Company's Auditors M/s Ashok Khasgiwala & Co., Chartered Accountants (F.R.No. 000743C), who are the statutory auditors of the Company, hold office till the conclusion of the forthcoming AGM and being eligible have consented and offered them-selves for re-appointment. Pursuant to the provisions of section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint M/s Ashok Khasgiwala & Co., Chartered Accountants (F.R.No. 000743C) as statutory auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the 32nd AGM to be held in the year 2017, subject to ratification of their appointment at every AGM. The Notes on financial Statement for the year 2014-15 referred to in the Auditor's Report are self-explanatory and do not call for any further comments. The Auditor's report does not contain any qualification, reservation or adverse remark. B. Cost Auditors: Pursuant to provisions of section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, amended time to time, the Company has appointed Cost Auditor M/s A.K.Jain& Associates for the year 2015-16 on the total remuneration of Rs.60,000/- and has filed the Form CRA-2 to the Central Government. Your directors proposes to approve their remuneration at the forthcoming annual general meeting. 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 M. Maheshwari& Associates Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Auditors in their report for the year 2014-15 has confirmed the compliances of by the Company as covered in their report. The Report of the Secretarial Audit for the year 2014-15 in the Form MR-3 is annexed herewith as "Annexure VII ". There is no qualification, reservation or adverse remark or disclaimer in Secretarial Audit Report except the following: 1. Company has not filed Form 5 INV Pursuant to rule 3 of the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012] and not uploaded on its own website. 2. MGT 10 under Section 93 of Companies Act, 2013 not filed during the financial year On above stated para of Secretarial Audit Report, our explanation or comment as follows:- 1. With regard to not filing of Form 5INV to rule 3 of the Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012]the information regarding the unpaid and unclaimed amounts has not been received from Banks. 2. Further due to the uncertainty of calculation of 2% of the respective promoter or top 10 shareholders we are not able to file the Form MGT 10. The Company was in process of filing MGT 10. D. Disclosure for frauds against the Company: In terms of the provisions of section 134(3)(ca) of the Companies Act, 2013, there were no fraud committed against the Company by any person under section 143(12) during the year 2014-15. Further that there were no frauds which needs to be reported by the Auditors of the Company to the Central Government. Extract of Annual Return In accordance with the provisions of Section 134 (3) (a) of the Companies Act, 2013, the extract of Annual Return as on March 31, 2015 in the prescribed Form MGT-9, pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is attached herewith as 'Annexure ViIi' and forms part of this Report. Vigil Mechanism The Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement which is also available on Company's website at www.groupsignet.com/investorrelations/ Policies The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the vigil mechanism and the Whistle Blower Policy of the Company have been outlined in the Corporate Governance Report which forms part of this report. Particulars of Loans Given, Investments Made, Guarantees Given and Securities Provided Pursuant to Section 134(3)(g) of the Companies Act, 2013 particulars of loans, guarantees or investments provided by the Company under Section 186 of the Act as at end of the Financial Year 2014-15 are disclosed in the Note to the Financial Statement attached with the Board Report. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out herewith as "Annexure IX" to this Report. 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. Acknowledgement The Directors of the Company wish to convey their gratitude and place on record their appreciation for all the employees at all levels for their hard work, solidarity, cooperation and dedication during the year. The Directors sincerely convey their appreciation to customers, shareholders, vendors, bankers, business associates, regulatory and the Government authorities for their continued support. For and on behalf of the Board Mukesh Sangla Chairman & Managing Director DIN : 00189676 Place: Indore Dated: 7th August, 2015 |