DIRECTORS' REPORT To The Members, Your Directors are pleased to present the Thirty Sixth Annual Report on the business and operations of the Company together with the Audited Statement of Accounts for the financial year ended as on 31st March, 2016 1. STATE OF AFFAIRS OF THE COMPANY a) PERFORMANCE REVIEW: Standalone: The total revenue of the Company for the financial year 2015-16 stood at Rs. 27,764.86 lacs as against last year's Rs. 21,650.89 lacs, a growth of 28.24%. Profit before interest, depreciation, tax, exceptional items and exchange loss was at Rs. 2,053.71 lacs as against last year's Rs. 1,309.05 lacs, a growth of 56.88 %. The Profit before tax and exceptional items was Rs. 1,205.65 lacs as against Rs. 676.97 lacs of the previous year. The Net Profit for the year stood at Rs. 780.07 lacs as against Rs. 427.03 lacs of the previous year. Consolidated: In accordance with the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as per Accounting Standard (AS) - 21, "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India, the Audited Consolidated Financial Statements together with Auditor's Report is annexed herewith. The consolidated revenue stood at Rs. 27,890.98 lacs as against last year's Rs. 21,650.89 lacs and the consolidated net profit stood at Rs. 774.95 as against last year's Rs. 426.15 lacs. As on 31st March 2016, the Reserves and Surplus of the Company were at Rs.86.90 crores. A detailed analysis on the operations of the Company during the year under report and outlook for the current year is included in the Management Discussion and Analysis Report, forming part of this Annual Report. Fire: During the year, there was a fire at the Halol plant of the Company and Properties & Inventories lying there were damaged. The loss due to the fire was assessed at Rs. 81 lacs and since the properties and inventories were adequately covered, the insurance company paid a claim of Rs. 75 lacs towards the said loss. The balance Rs. 6 lacs has been accounted as loss due to fire under the head as per Extraordinary Items Note no. 26 to the Standalone Financial Statements. The manufacturing operations from the said machinery have been resumed from 15th February 2016. 2. DIVIDEND: The Board of Directors are pleased to recommend for your consideration, a dividend of Rs. 1.20 per equity share of Rs.10/- each (previous year Rs. 1/- per equity share of Rs. 10/- each) for the financial year 2015-16. The total payout, if the dividend is approved by the Members at the Meeting, will be Rs.59.94 lacs, including dividend distribution tax of Rs.10.14 lacs. 3. DEPOSITS: During the year under review, the Company has not accepted any deposits under the provisions of Companies Act, 2013 read with rules made thereunder and as such no amount on account of principal or interest on deposits was outstanding as on the date of the Balance Sheet. 4. TRANSFER TO INVESTORS' EDUCATION AND PROTECTION FUND: In accordance to the provisions of Section 205A and 205C of the Companies Act, 1956, the relevant dividend amounts which have remained unpaid and unclaimed for a period of seven years have been transferred to the Investor Education and Protection Fund. Details of the unpaid and unclaimed dividend amount lying with the Company as on 5th August 2015 have been uploaded on the Company's website (www.safari.in ) and also on the website of the Ministry of Corporate Affairs. 5. ISSUE OF FURTHER CAPITAL: During the year under review, the Company has allotted 1,65,000 equity shares of Rs. 10/- each on exercise of option of 1,65,000 convertible share warrants to Mr. Sudhir Jatia, the Promoter and Managing Director of the Company. As on 31st March 2016, the Company has no outstanding convertible warrants. 6. DIRECTORS: a) APPOINTMENTS: In terms of the provisions of the Companies Act, 2013 and on recommendation of the Nomination and Remuneration Committee, it is proposed to appoint Mr. Rahul Kanodia, Additional Director (holding DIN: 00075801) of the Company, as an Independent Director for a term of 5 years wef 12th August 2016, in respect of whom notice is received from a member proposing his candidature for office of a Director under Section 160 of the Companies Act, 2013 along with requisite deposit. A brief profile and other related information of Mr. Rahul Kanodia has been given in the Notice convening the Annual General Meeting. b) RETIREMENT BY ROTATION: In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's Articles of Association, Mr. Hetal Gandhi, Director of the Company (holding DIN: 00106895), retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment for your approval. The aforesaid re-appointment with a brief profile and other related information of Mr. Hetal Gandhi forms part of the Notice convening the Annual General Meeting and the Directors recommend the said re-appoinment for your approval. c) INDEPENDENT DIRECTORS: The Company has received declaration from all the Independent Directors of the Company confirming that they fulfill the criteria of independence specified in Section 149 (6) of the Companies Act, 2013 and under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Terms and conditions of appointment of Independent Directors are placed on the website of the Company. d) NOMINATION AND REMUNERATION POLICY: The Company has adopted a Policy on Directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178 (3) of the Companies Act, 2013. The remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration policy of the Company. The contents of the policy are stated in the Corporate Governance Report forms part of the Annual Report. e) MANNER OF FORMAL EVALUATION OF BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS: In compliance with the Companies Act, 2013, performance evaluation of the Board and that of its Committees and Individual Directors have been carried out during the year under review. The performance evaluation of the Board, Committees, the Chairman and the Non-Independent Directors was carried as per the criteria adopted by the Board. The performance evaluation of the Board was based on various parameters such as qualified Board Members, their diversity of experience and background, whether the Members of the Board met all applicable independence requirements, sufficient number of Board meetings and Committee meetings etc. The performance of the indi-vidual Directors was evaluated on parameters such as qualifications, experience, independence, participation in Board Meetings and Committee Meetings, etc. The evaluation of the Independent Directors was carried out by the entire Board excluding the Independent Director being evaluated. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company. f) NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS DURING THE YEAR: During the year under review, the Board of Directors has held four (4) Board meetings. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report forms part of the Annual Report. 7. COMPOSITION OF AUDIT COMMITTEE: The Audit Committee of the Board of Directors of the Company comprises of the following members: Sr no. Name of Member Category 1 Dr. Shailesh Mehta- Chairman Independent 2 Mr. Punkajj Lath Independent 3 Mr. Hetal Gandhi Non-Executive Non-Independent 4 Mr. Dalip Sehgal (w.e.f 3rd November 2015) Independent Recommendations of the Audit Committee not accepted by the Board of Directors of the Company, along with the reasons therefor: None 8. KEY MANAGERIAL PERSONNEL: Mr. Virendra Gandhi, the Chief Financial Officer of the Company was re-designated from the said position on closure of the business hours of 16th May 2016. The Board places on record its appreciation for the valuable services provided by Mr. Gandhi during his tenure as Chief Financial Officer. Mr. Vineet Poddar was appointed as the Chief Financial Officer by the Board of Directors of the Company with effect from 17th May 2016 based on the recommendation of the Nomination & Remuneration Committee and the Audit Committee. Mr. Poddar has over 20 years of corporate experience in multi-disciplinary functions and multi product industries. His expertise in corporate strategy and financial controllership will be of immense benefit to the Company. 9. PARTICULARS OF EMPLOYEES: Information pursuant to Section 197 of the Companies Act 2013 and Rule 5(1) & (2) of the Companies (Appoinment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure A and forms part of this Report. 10. DIRECTORS' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 134 OF THE COMPANIES ACT, 2013: The Directors hereby confirm: a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures. b) that 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 of the Company for that period. c) that the Directors have taken proper and sufficient care 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 Directors have prepared the annual accounts on a going concern basis. e) that 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. f) that 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. 11. AUDITORS: M/s. Bansi S. Mehta & Co., Chartered Accountants, Mumbai, (Firm Registration no. 100991W) the Statutory Auditors of the Company hold office till the conclusion of ensuing Annual General Meeting. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act and that they are not disqualified for re-appointment. The Directors recommend their re-appointment by the Members at the forthcoming Annual General Meeting. The Auditor's Report does not contain any qualification, reservation or adverse remark. 12. INTERNAL AUDITORS: Based on the recommendation of the Audit Committee of the Company, the Board of Directors of the Company has appointed M/s. Ernst & Young LLP as the Internal Auditors of the Company. 13. SECRETARIAL AUDIT REPORT FROM M/S. NINAD AWACHAT & ASSOCIATES, THE SECRETARIAL AUDITOR OF THE COMPANY: In accordance 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. Ninad Awachat & Associates, Practicing Company Secretaries (Membership No. 26995 & C P No. 9668) to conduct Secretarial Audit for the financial year 2015-16. The Report of the Secretarial Auditor is annexed hereto as Annexure B. The said Report does not contain any qualification, reservation or adverse remark. 14. SUBSIDIARIES: The Consolidated Financial Statements of the Company include the financial results of Safari Lifestyles Ltd., for the financial year 2015-16. The annual accounts of Safari Lifestyles Ltd., are available for inspection by any Member at the Registered Office of the Company, during normal business hours (9.00 a.m. to 5.00 p.m.) on all working days except Saturdays, Sundays and public holidays up to the date of the Annual General Meeting of the Company. A copy of the said accounts can also be sought by any Member on making a written request to the Secretarial Department of the Company in this regard. During the year under review, the Company did not have any joint venture/associate company. The Report on the performance and financial position of the aforesaid subsidiary in Form AOC-1 pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 and Rule 5 of Companies (Accounts) Rules, 2014 is attached as Annexure C to this Report. 15. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBU-NALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE: During the year under review, there have not been any significant and material orders passed by the Regulators/Courts/Tribunals which will impact the going concern status and operations of the Company in future. 16. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS: The Board of Directors has adopted a policy on Internal Financial Controls to ensure orderly and efficient conduct of the business of the Company including the Company's policies. The said Policy is adequate and is operating effectively. 17. RISK MANAGEMENT POLICY: The Company is committed to high standards of business conduct and good risk management to: > Protect the Company's assets > Achieve sustainable business growth > Avoid major surprises relating to overall control environment > Safeguard shareholder investment > Ensure compliance with applicable legal and regulatory requirements. The Board has adopted a policy on risk management to mitigate inherent risks and help accomplish the growth plans of the Company. Accordingly, various potential risks relevant to the Company has been identified by the Audit Committee. The Board reviews the same periodically and suggests measures to mitigate and control these risks. 18. CHANGE IN NATURE OF BUSINESS, IF ANY: During the year under review, there has not been any change in the nature of the business of the Company. 19. MATERIAL CHANGES AND COMMITMENTS, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR & THE DATE OF REPORT: There have not been any material changes/commitments affecting the financial position of the Company from the end of the financial year till the date of this Report. 20. LISTING OF SHARES: The equity shares of the Company are listed on the BSE Ltd, situated at Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai 400 001. The Company has paid the necessary listing fees to the BSE Ltd as prescribed under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. 21. PARTICULARS OF CONTRACTS WITH RELATED PARTIES: During the year under review, the Company has entered into related party transactions, all of which were in the ordinary course of business and on arm's length basis and in accordance with the provisions of the Companies Act, 2013, read with the Rules issued thereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. The details of the transactions with Related Parties as per Accounting Standard 18 are set out in Note no. 33 to the Standalone Financial Statements. 22. VIGIL MECHANISM-WHISTLE BLOWER'S POLICY: The Company believes in conducting its affairs in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour. In order to achieve the same, the Company has formu-lated a Whistle Blowers' Policy to provide a secure environment and to encourage all employees and Directors of the Company, shareholders, customers, vendors and/or third party intermediaries to report unethical, unlawful or improper practices, acts or activities in the Company and to prohibit managerial personnel from taking any adverse action against those employees who report such practices in good faith. The Policy has been uploaded on the website of the Company. 23. PARTICULARS OF LOAN, GUARANTEE & INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT 2013: During the year under review, the Company has not given any loans or guarantees. Details of investments made are given in Note no. 11 and 13 of the Standalone Financial Statement. 24. EXTRACT OF ANNUAL RETURN: An extract of the Annual Return as on 31st March 2016 in terms of Section 92(3) of the Companies Act, 2013 read with rule 12(1) of the Companies (Management and Administration) Rules, 2014 is annexed herewith as Annexure D. 25. CONSERVATION OF ENERGY, ETC.: Details on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, etc. are given in the Annexure E hereto and forms part of this Report. 26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT: Management Discussion and Analysis Report for the year under review, as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate Section forming part of this Annual Report. 27. CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES: During the year under review, the Company has constituted a CSR Committee and adopted a CSR Policy pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, based on the recommendations of the CSR Committee. The CSR Policy is available on the website of the Company. The composition of the CSR Committee is disclosed in the Corporate Governance Report which forms part of this Annual Report. The report on CSR activities undertaken by the Company in accordance to the Companies (Corporate Social Responsibility) Rules, 2014 is annexed to this Report at Annexure F. 28. CORPORATE GOVERNANCE REPORT: As per the requirements under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Corporate Governance Report together with a Certificate from M/s. Ninad Awachat & Associates, Practicing Company Secretaries (Membership No. 26995 & C P No. 9668) confirming compliance thereto is annexed with this report as Annexure G. In compliance with the requirements of Regulation 17 (8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a certificate from the Managing Director and Chief Finance Officer of the Company, who are responsible for the finance function, was placed before the Board. The same is annexed thereto and forms part of the Corporate Governance Report. All the Board Members and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct for Board and Senior Management Personnel. A declaration to this effect duly signed by the Managing Director is annexed thereto and forms part of the Corporate Governance Report. 29. INDUSTRIAL RELATIONS: Industrial relations remained cordial throughout the year under review. 30. INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013: In compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressai) Act, 2013, the Company has formed a Committee to look into complaints of sexual harassment received from any women employee. During the year under review, no such complaints have been filed with the Committee. 31. ACKNOWLEDGEMENT: Your Directors wish to place on record their sincere thanks to all the employees of the Company for their continuing commitment and dedication. Further, the Directors would also like to express their gratitude for the continued support of all the stakeholders such as banks, financial institutions, various State and Central Government authorities, customers, vendors and last but not the least our valued shareholders, for all their support and trust reposed in the Company. ON BEHALF OF THE BOARD OF DIRECTORS For SAFARI INDUSTRIES (INDIA) LIMITED SUDHIR JATIA Chairman & Managing Director DIN: 00031969 Date: 16th May, 2016 |