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AYM Syntex Ltd.

BSE: 508933 Sector: Industrials
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OPEN 62.55
52-Week high 101.90
52-Week low 52.55
P/E 9.09
Mkt Cap.(Rs cr) 243
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 62.55
CLOSE 63.60
52-Week high 101.90
52-Week low 52.55
P/E 9.09
Mkt Cap.(Rs cr) 243
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

AYM Syntex Ltd. (AYMSYNTEX) - Director Report

Company director report

Dear shareholders

Your Directors are pleased to present 33 rd Annual Report together with AuditedStatement of Accounts of the Company for the year ended 31st March 2016.


(Rs. in Lacs)

2015-16 2014-15
Revenue from operation ( net) 80089.02 83486.23
Other Income 292.59 310.23
Total revenue 80381.61 83796.46
EBIDTA 10850.90 8687.32
EBIDTA Margin (%) 13.50 10.37
Finance Expenses 2152.10 2391.64
Depreciation and amortisation 2407.30 2020.22
Profit before taxation 6291.50 4275.46
Current Tax 1340.00 906.49
Deferred tax 1516.35 -
MAT credit entitlement (1340.00) (906.49)
Profit after taxation 4775.15 4275.46
Earning per share (Basic & Diluted) 12.17 10.90


In order to conserve resources of the Company the Board has not recommended dividendon equity shares.


During the year under review revenue from operation (net) at Rs. 80089 Lacs was littleless as compared to previous year mainly due to reduction in prices of raw materials andfinished goods following reduction in oil price and less concentration in production ofpolyester texturised yarn.

EBIDTA margin has increased from 10.37% to 13.50% during the FY 2015-16.

Exports during the financial year 2015-16 were of Rs. 200.74 Crores as compared to Rs.192.87 Crores during the previous year.

Concentration on high margin products development of new products and production ofBCF yarn coupled with reduction in prices of raw materials following slash in price ofcrude oil has increased margin of profit.

During the year your Company's long term credit rating has been upgraded by twonotches to A and short term credit rating to A1 by CARE.

Name of the Company has been changed from Welspun Syntex Limited to AYM Syntex Limitedwith effect from 18th December 2015 and the above ratings were reaffirmed by CARE.

The Company has completed part of the expansion project at an estimated project cost ofRs.70 crores by increasing capacity of BCF yarn texturised and dyed yarn during thefinancial year 2015-16 and expects to increase capacity of nylon mother yarn by the end ofMay 2016. The Company has now undertaken expansion to increase the capacity of BCF heatsetting and cabling at an estimated project cost of Rs. 34.71 Crores.


a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year 31stMarch 2016 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 adequateaccounting records in accordance with the provisions of the Companies act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.


a. Mr. Atul Desai Mr. M. K. Tandon Ms. Mala Todarwal and Mr. K. H. Viswanathan theindependent directors have given declaration that they met the criteria of independentdirectors as provided in sub section 6 of Section 149 of the Companies Act 2013;

b. Policy on directors' appointment and remuneration including criteria for determiningqualifications positive attributes independence of a director and other matters providedunder sub-section (3) of section 178 is placed on website of the company;

c. In compliance with the Act ad SEBI (LODR) regulation 2015 the Board of directorsas per the process recommended by the Nomination and Remuneration committee has evaluatedthe effectiveness of the Board its committees and Directors and all the results weresatisfactory;

d. The CSR policy of our company as approved by the Board of directors' is hosted onthe companies website and weblink thereto is : -

Disclosure as required under Rule 9 of the Companies (Corporate social Responsibility)Rules 2014 is annexed as Annexure A;

e. Meeting of Board of directors were conducted five times during the financial year2015-16.

f. The Company is now a subsidiary of Mandawewala Enterprises Limited w. e f. 4thSeptember 2015 and earlier the Company was subsidiary of Krishiraj Trading Limited (upto 4thSeptember 2015).

g. Ratio of remuneration of Mr. B A Kale and Mr. Abhishek Mandawewala the Directors tothe median employee's remuneration and other details are as under:

(i) the ratio of the remuneration of Mr. B A Kale executive director to the medianremuneration of the employees of the company for the financial year: - 164.82 times

(ii) the ratio of the remuneration of Mr. Abhishek Mandawewala the whole time directorto the median remuneration of the employees of the company for the financial year: 85.19times

(iii) the percentage increase in remuneration of Chief Financial Officer (CFO): 15%Company Secretary: 8%.

(iv) the percentage increase in the median remuneration of employees in the financialyear: 13.81%

(v) the number of permanent employees on the rolls of company:1582

(vi) the explanation on the relationship between average increase in remuneration andcompany performance:

- Increase in remuneration is largely based on performance of individuals.

(vii) comparison of the remuneration of the Key Managerial Personnel against theperformance of the company:

- Commission to Executive Director Whole time director CFO and incentives to some ofthe executives besides fixed salary are directly related to performance of the Company

(viii) Details of variation in market capitalization P/E ratio market price and EPSis given be low:

31/03/2015 31/03/2016 Variation
Market capitalization ( I n crores) 134.79 378.47 243.68
P/E ratio 3.15 7.93 4.78
Market price per share (in Rs.) 34.35 96.45 62.10
EPS (in Rs.) 10.90 12.17 1.27

(ix) average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration - Averageincrease in remuneration of employees other than managerial personnel 13.81% and keymanagerial persons -16.61%

(x) Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the company- Commission @ 2.50% on Net Profit to Executive Director and 1%to whole time director and incentives to CFO is directly based on performance of theCompany.

(xi) the key parameters for any variable component of remuneration availed by thedirectors- 2.5% commission on Profits calculated under section 197 of the Companies act2013 to Executive director and 1% to whole time director besides fixed remuneration

(xii) the ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year- nil; and

(xiii) Affirmation that the remuneration is as per the remuneration policy of thecompany.

h. Mr. Abhishek Mandawewala whole time director and Mr. B. A. Kale executive directorof the Company have not received any remuneration from Mandawewala Enterprises Limitedthe holding company.

i. Details in respect of adequacy of internal financial controls with reference to theFinancial Statements .

Your company has designed and implemented a framework for internal finance controls andthe same are adequate and were operating effectively. The Company periodically reviews theinternal controls to align it with the changing business needs and to improve governanceand enhance compliance with evolving regulation.

j. Particulars of contracts or arrangements with related parties All related partytransactions that were entered into during the year under report were on an arm's lengthbasis and were in the ordinary course of business to serve mutual need and mutualinterest. Hence details required to be given in form AOC 2 pursuant to Section 134 (3)(h)of the Companies Act 2013 is nil. There were no materially significant related partytransactions made by your company. The Audit committee has given its omnibus approvalwhich is valid for one financial year. Your Company's policy on related party transactionsas approved by the Board is hosted on your Company's website and a weblink thereto is :


The details of the related party transactions as required under Accounting Standard -18are set out in Note 35 to the financial statements forming part of this report.

k. Particulars of loans guarantees or investments under section 186. The Company hasnot made investment

nor given loan nor provide any guarantee for repayment of loan under section 186 of theact.

l. Details of establishment of vigil mechanism for directors and employees Regulation22 of SEBI (Listing Obligations and Disclosure Requirements) 2015

The Company has a Whistle Blower Policy and Vigil Mechanism for its directors andemployees and no personnel have been denied access to the Mr. Atul Desai Chairman of theAudit Committee.

VI. Extract of Annual Return

An extract of Annual return in Form MGT 9 of the Companies Management andAdministration Rule 2014 is annexed as Annexure B.

VII. Conservation of energy technology absorption and foreign exchange earnings andoutgo

A) Conservation of energy:

(I) the steps taken or impact on conservation of energy: The company has saved1968163 units during the financial year 2015-16 at Rakholi plant.

(ii) the steps taken by the company for utilizing alternate sources of energy: TheCompany opted for alternate source of power OPEN ACCESS thereby reducing per unit cost ofpower during 2015-16 for its plant at Palghar.

(iii) the capital investment on energy conservation equipment's: Rs.28.75 lacs

(B) Technology absorption:

i. The efforts made towards technology absorption:

- The Company has installed AREL Israel technology for auto dyes dissolving andchemical dispensing in our New Automotive Dyeing plant at Palghar plant.

ii. The benefits derived like product improvement cost reduction product developmentor import substitution:

- Quality of dyed yarn has improved and cost is reduced.

iii. In case of imported technology (imported during the last three years reckoned fromthe beginning of the financial year)- The company has successfully installed AREL Israel

technology for auto dyes.

iv. Research and development expenditures:

The Company has received recognition for in-house Research and Development (R&D)units at Rakholi and Palghar from the Department of Scientific and Industrial Research(DSIR) on March 24 2015. During the year the Company has incurred a total research anddevelopment expenditure of Rs. 1998.41 lacs (Rs. 290.36 lacs) including capitalexpenditure of Rs. 1461.64 lacs (Rs.290.36 lacs). The revenue expenditure includesemployee cost material cost power cost travelling & conveyance and other expenses.The Company has considered weighted tax deduction on eligible research and developmentexpenditure of Rs. 1998.41 lacs (Rs. 290.36 lacs) under Section 35 (2AB) of the Income TaxAct 1961.

(C) Foreign exchange earnings and Outgo:

The Foreign Exchange earned in terms of actual inflows during the year and the ForeignExchange outgo during the year in terms of actual outflows.

FOB value of export -Rs.19212.24 Lacs CIF value of imports - Rs.22701.53 Lacs


Board of directors consists of seven Directors out of whom four directors areindependent directors; hence total no. of directors to retire by rotation as perexplanation of sub section 6 of Section 152 of the Companies Act 2013 are three directorsand One third of such Directors are liable to retire by rotation. Mr. B. A. Kale being thelongest in duration is liable to retire by rotation at the 33rd AGM.

Ms. Mala Todarwal's terms as an independent director is upto 31st July 2016; Board ofdirectors at their meeting held on 6th May 2016 has reappointed her as woman independentdirector.

Board has recommended re-appointment of Mr. B. A. Kale the retiring director andreappointment of Ms. Mala Todarwal as a women independent director.

There is no change in Key managerial personnel during the year under review.


Information on the Audit committee the Nomination and Remuneration committee theStakeholders Relationship the Corporate Social Responsibility committee and meetings ofthose committees held during the year is given in the Corporate Governance Report formingpart of this Report.


The Company has not accepted any deposit within the meaning of the Chapter V toCompanies Act 2013. Further no amount on

account of principal or interest on deposit was outstanding as at the end of the yearunder report.


Your Company's Auditors M/s. MGB & Co Chartered Accountants were re-appointed forthe period of three years till the conclusion of 34th Annual General meeting. Members arerequested to ratify their appointment from the conclusion of 33rd Annual General Meetingto the conclusion of 34th Annual General Meeting.


As per section 148 and other applicable provisions if any of the Act read withCompanies (Audit and Auditors) Rules 2014 and the Companies (Cost Records and Audit)Rules 2014 the Board of Directors of your company has appointed M/s. Kiran J Mehta CostAccountants as per Cost Auditors of your company for the FY 201516 and FY 2016-17 on therecommendations made by the Audit committee.

Members are requested to ratify their remuneration by passing an ordinary resolution inthe Annual General Meeting.


A separate report on Corporate Governance is annexed hereto as a part of this Report.Management Discussion and Analysis Statement is separately given in the Annual Report. Acertificate from M/s. A L Makhija & Co. Practising company Secretary regardingcompliance of conditions of Corporate Governance as prescribed under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is attached to this report.


Please refer to Auditors' Observations/ qualifications and in relation thereto theBoard of directors' state as under: Auditors have qualified report under para ''Basis forqualified opinion'' drawing attention to Note no. 30 of notes to the accounts and statethat the Company is in the process of executing document to transfer land to the name ofthe Company. The Company is in possession of land without any interference for more than12 years. Further in respect of documents of title deeds of certain residential flatsaggregating to Rs.10.65 lacs we clarify that the said flats are in the name of thecompany and the company is in the process of tracing the physical agreements of the saidflats.

In view of the above the Board is of the view that no adjustment to the amounts asmentioned in note no.30 is necessary.


A Secretarial Audit Report given by Mr. A. L. Makhija a company secretary in practiceis herewith annexed as Annexure C.


The Company has a risk management policy and identified the major risk in pricevolatility in key raw materials and foreign exchange fluctuation.


The details of familiarization program (for independent directors) is disclosed on theCompany's website and a web link thereto is


The Company has Code of Conduct for Board members and senior management personnel. Acopy of the Code has been put on the Company's website for information of all the membersof the Board and management personnel.

All Board members and senior management personnel have affirmed compliance of the same.


Details of the every employee of the Company as required pursuant to Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed asAnnexure D.


Your Directors take this opportunity to express gratitude for valuable assistance andco-operation extended to the Company by Financial Institutions Commercial Banks and otherauthorities. Your directors also wish to place on record their sincere appreciation of thededicated services hard work solidarity and profuse support by all the employees of theCompany.



Rajesh R Mandawewala




Date: 6th May 2016