DIRECTORS' REPORT Dear Shareholders, The directors are pleased to present their 33rd Annual report on the business and operations of the Company and the Audited financial accounts for the Year ended 31st March, 2015. OPERATIONAL PERFORMANCE The total revenue of the Company has increased from Rs. 39.28 Crores to Rs. 47.07 Crores. The profit before tax of the Company has also increased from Rs. 71.52 Lacs to Rs. 86.81 Lacs. The net profit after tax has decreased to Rs. 32.41 Lacs as compared to previous year's net profit of Rs. 43.00 Lacs. DIVIDEND: Keeping in view the financial results and in order to conserve financial resources for the future requirement of the fund, your directors do not recommend any dividend during the year under review. PUBLIC DEPOSITS: Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. SUBSIDIARY/JOINT VENTURE/ ASSOCIATE COMPANY: As on 31st March, 2015, Your Company has 2 associate Company. EXTRACT OF ANNUAL RETURN AS PER SECTION 92 (3) OF COMPANIES ACT 2013: The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure -A". DIRECTORS AND KEY MANAGERIAL PERSONNEL: ? In terms of Section 152 of the Companies Act, 2013, Mr. Hardik Sunil Agarwal is liable to retire by rotation at forthcoming AGM and being eligible offer himself for re-appointment. ? During the Year under review, the Board of Directors approved the appointments of Mrs. Pamitadevi Agarwal (DIN: 07135868) as an Additional Director of the Company w.e.f. 26th March, 2015 under Section 161 of Companies Act, 2013 who hold the office upto the date of ensuing Annual General Meeting. The Company has received a notice in writing under section 160 of the Companies Act, 2013 form a member proposing her appointment as Director. The Board of Directors recommends her appointment. ? During the Year under review, pursuant to the provision of section 203 of Companies Act, 2013, the Board of Directors approved the appointments of Mr. Dilip Popatlal Nirmal as a Chief Financial officer (KMP) of the Company w.e.f 9th February, 2015. ? A brief resume of directors being appointed / re-appointed with the nature of their expertise, their shareholding in the Companyas stipulated under Clause 49 of the Listing Agreement is appended to the notice of the ensuing Annual General Meeting. ? The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. ? All the directors of the Company have confirmed that they are not disqualified from being appointed as directors in terms of Section 164 of the Companies Act, 2013. MATTERS AS PRESCRIBED UNDER SUBSECTIONS (1) AND (3) OF SECTION 178 OF THE COMPANIES ACT 2013: The policy of the Company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub section (3) of Section 178 of the Companies Act, 2013, adopted by the Committee, is appended in the Corporate Governance Report. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company. AUDITORS: ? STATUTORY AUDITORS M/s. G. K. Choksi & Co., Chartered Accountant, Ahmedabad, the Statutory Auditors of the Company holds office until the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. As regards qualification in (i)(a) of Annexure of the Auditors' Report, the Directors state that the updation in respect of locations of fixed assets and additions/deletions of fixed assets for the year ended on 31/03/2015 is in process and will be completed and made available to the Auditors. As regards qualification in (i) (b) of Annexure to the Auditors' Report, Directors state that records will be compiled and updated. ? SECRETARIAL AUDITOR Amrish N Gandhi of Amrish Gandhi & Associates, Practicing Company Secretaries was appointed to conduct the secretarial audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The secretarial audit report for FY 2014-15 forms part of the Annual Report as 'Annexure B' to the Board's report. DIRECTORS RESPONSE TO SECRETARIAL AUDIT REPORT: Your Board of Directors would like to clarify the qualification remarks made in the Secretarial Audit Repost as under; 1. Company had submitted Shareholding Pattern on Quarterly basis to Stock Exchange under Clause 35. However, Company is in the process to comply with disclosures under the regulation 29(2),30(1) and 30(2) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulation,2011 & under the regulation 13(4A) of the SEBI (Prohibition of Insider Trading) Regulations,1992 in future. 2. During the current financial year the company has made sincere effort to recruit Company Secretary through advertisement in print media however the company could not found the Company Secretary and the company is still in process of appointing the same. Company will make applicable disclosures on its website. As intimated above, company had submitted Shareholding pattern on Quarterly basis to Stock Exchange under Clause 35 & company is in the process to comply with section 93 as per Companies Act, 2013 in future. 3. Regarding the Calcutta Stock Exchange, we have already mentioned this matter in our director report. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis Report, which forms part of this report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186: Details of Loans, Guarantees and Investments under the provisions of Section 186 of the Companies Act, 2013 are not applicable to the Company. AUDIT COMMITTEE: The composition and the functions of the Audit Committee of the Board of Directors of the Company is disclosed in the Report on Corporate Governance, which is forming a part of this report. RELATED PARTY TRANSACTIONS: All the related party transactions entered into during the financial year were on an arm's length basis and were in the ordinary course of business. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 is not applicable. MATERIAL CHANGES: There is no material changes and commitments, that would affect financial position of the company from the end of the financial year of the company to which the financial statements relate and the date of the directors report. RESERVES: The Company has proposed to transfer Rs. 32,40,691 of profit of the Company to the General Reserve for this year. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPOTION, FOREIGN EXCHANGE EARNINGS AND OUTGO: Additional information on Conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed under the Act, are provided in "Annexure C" to the Directors' Report and forms part of this Report. CORPORATE GOVERNANCE: As required under the Listing Agreement with stock exchanges, report on "Corporate Governance" is attached and forms a part of Directors Report. A Certificate from the Company Secretary of the Company regarding compliance of the conditions of Corporate Governance as stipulated under the Listing Agreement is annexed to this Report MANAGEMENT DISCUSSION AND ANALYSIS: Economic Scenario: In a year, world econimy continued its recovery from the recessionin the last decade: the global growth of 3.4% showed a continued path to improvement taking into account growth of 3.4% in 2013.India's economy also showed a continued cyclical upswing: in Fy2014-15 India's GDP by 7.2%, as compared to 6.9% in FY14.While these higher numbers partially reflect the change in base year used for calculation of GDP, the overall growth demonstrates a strong recovery. The prospects of long-term growth in India remain strong.However, post election there is substantially improvement in sentiments of industrialist for picking of economic activities in upward direction, which brings demands of capital goods, launching new projects in various industries and generate more employment. These cycles leads consumers spending would be increased significantly in consumers durables, automobiles, FMCG and Textile products in coming years. Industry Review: The Indian textiles industry is set for strong growth, buoyed by both strong domestic consumption as well as export demand. India has historically had a strong textile-industrial culture and a well-developed and mature textile industry that has been the back-bone of the economy. With the rise of strong textile exports over the last three decades, India is today among the leading producers of textiles in the world. However, despite this growth, India is not the lowest cost producer of textiles and lacks the benefit of scale economies especially when compared to China, Bangladesh, Vietnam and Cambodia. In an environment of volatility and intensified global competition, where price continues to dominate, due to high inflation, high interest rates and high labour cost which is affecting profitability of Indian textile industries. The sharp rise in energy/fuel price is another major concern faced by Indian textile Industry today as well as years to come. The future for the Indian Textile Industry looks promising. With consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade. India's growing population has been a key driver of textile consumption growth in the country. Changing lifestyle, rising incomes and increasing demand for quality products are set to fuel demand for Indian Textile products across the globe. Review and Future Outlook of the Company: The Company is continuously trying to accomplish the desired results. Steps have been taken for cost diminution and manufacturing quality products by various installed machineries of the Company. Various aspects of working conditions of workers, health related issues, minimizing risk of accidents at work place etc. are being taken care of by the Company. The Company will achieve more turnover by various marketing strategies, offering more quality products, launching new products etc. in coming years followed by increase in profit margin by way of various cost cutting techniques and optimum utilization of various resources of the Company. Internal Control System : The Company has proper and adequate system of Internal Control. Regular Internal Audits and Checks carried out and also management reviews the internal control system and procedures to ensure orderly and efficient conduct of business and to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposition and that transactions are authorised, recorded and reported correctly. The Company has well defined internal control system. The Company takes abundant care to design, review and monitor the working of internal control system. Internal audit in the organization is an independent appraisal activity and it measures the efficiency, adequacy and effectiveness of other controls in the organization. All significant issues are brought to the attention of the Audit Committee of the Board. Human Resources: The Company continues to lays emphasis on building and sustaining the excellent organization climate based on human performance. Performance management is the key word for the Company. Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation in the Company. The Company firmly believes that intellectual capital and human resources is the backbone of the Company's success. Cautionary Statement: This Management Discussion and Analysis statement of the Annual Report has been included in adherence to the spirit enunciated in the code of corporate governance approved by the Securities and Exchange Board of India. Statement in the Management Discussion and Analysis describing Company's objectives, projections, estimates, expectation may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual result could differ materially from those expressed or implied. Important factors that could make a difference to the Company's operation include economic conditions affecting demand/supply and price conditions in the Government regulations, tax laws and other status and other incidental factors. Further, the discussion following herein reflects the perceptions on major issues as on date and the opinion expressed here are subject to change without notice. The Company undertakes no obligations to publicly update or revise any of the opinions of forward looking statements expressed in this report, consequent to new information future events, or otherwise. Readers are hence cautioned not to place undue reliance on these statements and are advised to conduct their own investigation and analysis of the information contained or referred to this statement before taking any action with regard to specific objectives. RISK MANAGEMENT: The Board of Directors have developed & implemented a robust risk management policy which identifies the key elements of risks that threatens the existence of the Company. The Audit Committee reviews the Company's financial and risk management policies and steps taken by the Company to mitigate such risks at regular intervals. CORPORATE SOCIAL RESPONSIBILITY POLICY: This clause is not applicable. DIRECTORS' RESPONSIBILITY STATEMENT: A) that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; B) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made 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) that proper and sufficient care has been taken 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) that the annual financial statements have been prepared on a going concern basis. E) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. F) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. THE CHANGE IN NATURE OF BUSINESS: There is no any material change in the business of the Company during the year under review. PARTICULARS OF EMPLOYEES: A statement containing the names and other particulars of employees in accordance with the provisions of section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as "Annexure - D" to this report. No employee has received remuneration in excess of the limits set out in rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 during FY 2014-15. ACKNOWLEDGMENT: The Directors wish to place on record their appreciation to the devoted services of the workers, staff and the officers who largely contributed to the efficient management of the Company in the difficult times. The Directors place on record their appreciation for the continued support of the shareholders of the Company. The Directors also take this opportunity to express their grateful appreciation for assistance and cooperation received from the bankers, vendors and stakeholders including financial institutions, Central and State Government authorities, other business associates, who have extended their valuable sustained support and encouragement during the year under review. BY ORDER OF THE BOARD OF DIRECTORS FOR, RAGHUVIR SYNTHETICS LIMITED SUNIL R. AGARWAL CHAIRMAN & MANAGING DIRECTOR DIN : 00265303 Place:- Ahmedabad Date: 24/08/2015 |