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Safari Industries (India) Ltd.

BSE: 523025 Sector: Consumer
NSE: N.A. ISIN Code: INE429E01015
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VOLUME 31
52-Week high 1744.40
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P/E 61.49
Mkt Cap.(Rs cr) 622
Buy Price 1445.00
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Sell Price 1497.90
Sell Qty 1.00
OPEN 1441.00
CLOSE 1525.60
VOLUME 31
52-Week high 1744.40
52-Week low 855.10
P/E 61.49
Mkt Cap.(Rs cr) 622
Buy Price 1445.00
Buy Qty 2.00
Sell Price 1497.90
Sell Qty 1.00

Safari Industries (India) Ltd. (SAFARIINDS) - Director Report

Company director report

To

The Members

Your Directors are pleased to present the Thirty Sixth Annual Report on the businessand operations of the Company together with the Audited Statement of Accounts for thefinancial year ended as on 31st March 2016

1. STATE OF AFFAIRS OF THE COMPANY:

a) FINANCIAL RESULTS:

(Rs in Lacs)

Standalone

Consolidated

2015-16 2014-15 2015-16 2014-15
Total revenue 27764.86 21650.89 27890.98 21650.89
Profit before Interest Depreciation Tax Exceptional items/Extra Ordinary Items and Exchange Loss 2053.71 1309.05 2049.49 1308.17
Exchange Loss 179.65 52.12 179.65 52.12
Interest 261.91 290.91 261.91 290.91
Depreciation 406.50 289.05 407.19 289.05
Profit before Exceptional Items/Extra Ordinary Items and Tax 1205.65 676.97 1200.74 676.09
Less: Exceptional Items/Extra Ordinary Items (5.57) (95.90) (5.57) (95.90)
Profit from ordinary activities before tax 1200.08 581.07 1195.17 580.19
Tax expenses Current Tax Deferred tax (355.00)

(65.01)

(190.00)

35.96

(355.28)

(64.94)

(190.00)

35.96

Profit after Tax 780.07 427.03 774.95 426.15
Profit brought forward from previous year 577.85 398.78 576.97 398.78
Profit available for appropriation 1357.92 825.81 1351.92 824.93
Appropriations:

Transfer to General Reserve

(200.00) (200.00)
Proposed Dividend Tax on proposed dividend (49.80)

(10.14)

(39.85)

(8.11)

(49.80)

(10.14)

(39.85)

(8.11)

Balance carried to Balance sheet 1297.98 577.85 1291.98 576.97

b) PERFORMANCE REVIEW:

Standalone:

The total revenue of the Company for the financial year 2015-16 stood at ' 27764.86lacs as against last year's ' 21650.89 lacs a growth of 28.24%. Profit before interestdepreciation tax exceptional items and exchange loss was at ' 2053.71 lacs as againstlast year's ' 1309.05 lacs a growth of 56.88 %. The Profit before tax and exceptionalitems was ' 1205.65 lacs as against ' 676.97 lacs of the previous year. The Net Profitfor the year stood at ' 780.07 lacs as against ' 427.03 lacs of the previous year.

Consolidated:

In accordance with the Companies Act 2013 the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and as per Accounting Standard (AS) - 21"Consolidated Financial Statements" issued by the Institute of CharteredAccountants of India the Audited Consolidated Financial Statements together withAuditor's Report is annexed herewith.

The consolidated revenue stood at ' 27890.98 lacs as against last year's ' 21650.89lacs and the consolidated net profit stood at ' 774.95 as against last year's ' 426.15lacs.

As on 31st March 2016 the Reserves and Surplus of the Company were at '86.90 crores.

A detailed analysis on the operations of the Company during the year under report andoutlook for the current year is included in the Management Discussion and Analysis Reportforming 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 ' 81lacs and since the properties and inventories were adequately covered the insurancecompany paid a claim of ' 75 lacs towards the said loss. The balance ' 6 lacs has beenaccounted as loss due to fire under the head as per Extraordinary Items Note no. 26 to theStandalone Financial Statements. The manufacturing operations from the said machinery havebeen resumed from 15th February 2016.

2. DIVIDEND:

The Board of Directors are pleased to recommend for your consideration a dividend of'1.20 per equity share of '10/- each (previous year ' 1/- per equity share of ' 10/- each)for the financial year 2015-16. The total payout if the dividend is approved by theMembers at the Meeting will be '59.94 lacs including dividend distribution tax of '10.14lacs.

3. DEPOSITS:

During the year under review the Company has not accepted any deposits under theprovisions of Companies Act 2013 read with rules made thereunder and as such no amount onaccount of principal or interest on deposits was outstanding as on the date of the BalanceSheet.

4. TRANSFER TO INVESTORS' EDUCATION AND PROTECTION FUND:

In accordance to the provisions of Section 205A and 205C of the Companies Act 1956the relevant dividend amounts which have remained unpaid and unclaimed for a period ofseven 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 5thAugust 2015 have been uploaded on the Company's website (www.safari.in) and also on thewebsite of the Ministry of Corporate Affairs.

5. ISSUE OF FURTHER CAPITAL:

During the year under review the Company has allotted 165000 equity shares of ' 10/-each on exercise of option of 165000 convertible share warrants to Mr. Sudhir Jatia thePromoter and Managing Director of the Company. As on 31st March 2016 the Company has nooutstanding convertible warrants.

6. DIRECTORS:

a) APPOINTMENTS:

In terms of the provisions of the Companies Act 2013 and on recommendation of theNomination and Remuneration Committee it is proposed to appoint Mr. Rahul KanodiaAdditional Director (holding DIN: 00075801) of the Company as an Independent Director fora term of 5 years wef 12th August 2016 in respect of whom notice is received from amember proposing his candidature for office of a Director under Section 160 of theCompanies Act 2013 alongwith requisite deposit.

A brief profile and other related information of Mr. Rahul Kanodia has been given inthe Notice convening the Annual General Meeting.

b) RETIREMENT BY ROTATION:

In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany'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 eligibleoffers 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 theDirectors recommend the said re-appoinment for your approval.

c) INDEPENDENT DIRECTORS:

The Company has received declaration from all the Independent Directors of the Companyconfirming that they fulfill the criteria of independence specified in Section 149 (6) ofthe Companies Act 2013 and under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

Terms and conditions of appointment of Independent Directors are placed on the websiteof the Company.

d) NOMINATION AND REMUNERATION POLICY:

The Company has adopted a Policy on Directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided under Section 178 (3) of the Companies Act 2013. Theremuneration paid to the Directors is as per the terms laid out in the Nomination andRemuneration policy of the Company. The contents of the policy are stated in the CorporateGovernance Report forms part of the Annual Report.

e) MANNER OF FORMAL EVALUATION OF BOARD OF ITS OWN PERFORMANCE AND THAT OF ITSCOMMITTEES AND INDIVIDUAL DIRECTORS:

In compliance with the Companies Act 2013 performance evaluation of the Board andthat of its Committees and Individual Directors have been carried out during the yearunder review.

The performance evaluation of the Board Committees the Chairman and theNon-Independent Directors was carried as per the criteria adopted by the Board.

The performance evaluation of the Board was based on various parameters such asqualified Board Members their diversity of experience and background whether the Membersof the Board met all applicable independence requirements sufficient number of Boardmeetings and Committee meetings etc. The performance of the individual Directors wasevaluated on parameters such as qualifications experience independence participation inBoard Meetings and Committee Meetings etc.

The evaluation of the Independent Directors was carried out by the entire Boardexcluding the Independent Director being evaluated.

The Directors were satisfied with the evaluation results which reflected the overallengagement 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 theCorporate 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 followingmembers:

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 theCompany along with the reasons therefor: None

8. KEY MANAGERIAL PERSONNEL:

Mr. Virendra Gandhi the Chief Financial Officer of the Company was re-designated fromthe said position on closure of the business hours of 16th May 2016. The Board places onrecord its appreciation for the valuable services provided by Mr. Gandhi during his tenureas Chief Financial Officer.

Mr. Vineet Poddar was appointed as the Chief Financial Officer by the Board ofDirectors of the Company with effect from 17th May 2016 based on the recommendation of theNomination & Remuneration Committee and the Audit Committee. Mr. Poddar has over 20years of corporate experience in multi-disciplinary functions and multi productindustries. His expertise in corporate strategy and financial controllership will be ofimmense 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 (Appointment and Remuneration of Managerial Personnel) Rules 2014 isannexed herewith as Annexure A and forms part of this Report.

10. DIRECTORS' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 134 OF THE COMPANIES ACT2013:

The Directors hereby confirm:

a) that in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures.

b) that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period.

c) that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother 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 theCompany and that such internal financial controls are adequate and are operatingeffectively.

f) that the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

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 ensuingAnnual General Meeting. They have confirmed their eligibility to the effect that theirre-appointment if made would be within the prescribed limits under the Act and that theyare not disqualified for re-appointment.

The Directors recommend their re-appointment by the Members at the forthcoming AnnualGeneral Meeting. The Auditor's Report does not contain any qualification reservation oradverse remark.

12. INTERNAL AUDITORS:

Based on the recommendation of the Audit Committee of the Company the Board ofDirectors of the Company has appointed M/s. Ernst & Young LLP as the Internal Auditorsof the Company.

13. SECRETARIAL AUDIT REPORT FROM M/S. NINAD AWACHAT & ASSOCIATES THE SECRETARIALAUDITOR OF THE COMPANY:

In accordance to the provisions of Section 204 of the Companies Act 2013 and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s. Ninad Awachat & Associates Practicing Company Secretaries(Membership No. 26995 & C P No. 9668) to conduct Secretarial Audit for the financialyear 2015-16.

The Report of the Secretarial Auditor is annexed hereto as Annexure B. The saidReport does not contain any qualification reservation or adverse remark.

14. SUBSIDIARIES:

The Consolidated Financial Statements of the Company include the financial results ofSafari Lifestyles Ltd. for the financial year 2015-16. The annual accounts of SafariLifestyles Ltd. are available for inspection by any Member at the Registered Office ofthe Company during normal business hours (9.00 a.m. to 5.00 p.m.) on all working daysexcept Saturdays Sundays and public holidays up to the date of the Annual General Meetingof the Company. A copy of the said accounts can also be sought by any Member on making awritten request to the Secretarial Department of the Company in this regard.

During the year under review the Company did not have any joint venture/associatecompany.

The Report on the performance and financial position of the aforesaid subsidiary inForm AOC-1 pursuant to first proviso to sub-section (3) of Section 129 of the CompaniesAct 2013 and Rule 5 of Companies (Accounts) Rules 2014 is attached as Annexure C tothis Report.

15. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS ORTRIBUNALS 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 orderspassed by the Regula- tors/Courts/Tribunals which will impact the going concern status andoperations of the Company in future.

16. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS:

The Board of Directors has adopted a policy on Internal Financial Controls to ensureorderly and efficient conduct of the business of the Company including the Company'spolicies. 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 managementto:

• 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 helpaccomplish the growth plans of the Company. Accordingly various potential risks relevantto the Company has been identified by the Audit Committee. The Board reviews the sameperiodically 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 thebusiness of the Company.

19. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYWHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR & THE DATE OF REPORT:

There have not been any material changes/commitments affecting the financial positionof 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 PhirozeJeejeebhoy 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 transactionsall of which were in the ordinary course of business and on arm's length basis and inaccordance with the provisions of the Companies Act 2013 read with the Rules issuedthereunder and the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. Accordingly no transactions are being reported in Form AOC-2 in terms of Section134 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 areset 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 byadopting the highest standards of professionalism honesty integrity and ethicalbehaviour. In order to achieve the same the Company has formulated a Whistle Blowers'Policy to provide a secure environment and to encourage all employees and Directors of theCompany shareholders customers vendors and/or third party intermediaries to reportunethical unlawful or improper practices acts or activities in the Company and toprohibit managerial personnel from taking any adverse action against those employees whoreport 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 COMPANIESACT 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 FinancialStatement.

24. EXTRACT OF ANNUAL RETURN:

An extract of the Annual Return as on 31st March 2016 in terms of Section 92(3) of theCompanies 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 Earningsand 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 stipulatedunder SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 ispresented 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 aCSR Policy pursuant to the provisions of Section 135 of the Companies Act 2013 read withthe Companies (Corporate Social Responsibility Policy) Rules 2014 based on therecommendations of the CSR Committee.

The CSR Policy is available on the website of the Company. The composition of the CSRCommittee is disclosed in the Corporate Governance Report which forms part of this AnnualReport. The report on CSR activities undertaken by the Company in accordance to theCompanies (Corporate Social Responsibility) Rules 2014 is annexed to this Report at AnnexureF.

28. CORPORATE GOVERNANCE REPORT:

As per the requirements under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a Corporate Governance Report together with a Certificatefrom M/s. Ninad Awachat & Associates Practicing Company Secretaries (Membership No.26995 & C P No. 9668) confirming compliance thereto is annexed with this report as AnnexureG.

In compliance with the requirements of Regulation 17 (8) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a certificate from the ManagingDirector and Chief Finance Officer of the Company who are responsible for the financefunction was placed before the Board. The same is annexed thereto and forms part of theCorporate Governance Report.

All the Board Members and Senior Management Personnel of the Company have affirmedcompliance with the Code of Conduct for Board and Senior Management Personnel. Adeclaration to this effect duly signed by the Managing Director is annexed thereto andforms 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 (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:

In compliance with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 the Company has formed a Committee tolook into complaints of sexual harassment received from any women employee. During theyear 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 theCompany for their continuing commitment and dedication. Further the Directors would alsolike to express their gratitude for the continued support of all the stakeholders such asbanks financial institutions various State and Central Government authoritiescustomers vendors and last but not the least our valued shareholders for all theirsupport and trust reposed in the Company.

ON BEHALF OF THE BOARD OF DIRECTORS
For SAFARI INDUSTRIES (INDIA) LIMITED
SUDHIR JATIA
Chairman & Managing Director
Date: 16th May 2016 DIN: 00031969

ANNEXURES TO THE DIRECTORS' REPORT

Annexure A

Information pursuant to Rule 5(1) & 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014:

1. Ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year: 96:4

2. The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year: Theremuneration of the Managing Director increased by 210.26 %. The remuneration of ChiefFinancial Officer and Company Secretary increased by 13.68% and 17.59% respectively.

3. The percentage increase in the median remuneration of employees in the financialyear: 9.22%

4. The number of permanent employees on the rolls of company: 745 employees

5. The explanation on the relationship between average increase in remuneration andcompany performance: While the average increase in remuneration was 8.4% the increase inthe profit before tax as compared to the previous was 107%

6. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company: The total remuneration of the Key Managerial Personnel was '86.48 lacs as against the Profit before tax of ' 1200.08 lacs.

7. Variations in the market capitalization of the company price earnings ratio as atthe closing date of the current financial year and previous financial year:

The market capitalization for the year ended 31st March 2016 was ' 414.59 crores asagainst ' 319.40 crores for the year ended 31st March 2015. The PE ratio stood at 52.51 asat 31st March 2016 as against 67.87 as at 31st March 2015.

8. Percentage increase over decrease in the market quotations of the shares of thecompany in comparison to the rate at which the company came out with the last publicoffer:

The Company had come out with an initial public offer in the year 1986 at a price of'10/-. An amount of '10/- invested in the said IPO would be ' 999 as on 31st March 2016representing a compounded annual growth rate of 17%.

9. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year is 8.4% and is in line with the increasein the managerial remuneration;

10. Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the company: While the Profit Before tax of the Company for the year ended31st March 2016 stood at around ' 1200.08 lacs the remuneration drawn by the ManagingDirector Chief Financial Officer and Company Secretary was ' 40.05 lacs ' 37.87 and '8.56 lacs respectively

11. The key parameters for any variable component of remuneration availed by thedirectors: Nil

12. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year: 31:69

13. The remuneration paid to the Directors KMPs and other employees is as per theRemuneration policy of the company.

14. During the year under review there have not been any employees in the Company whoif employed throughout the financial year were in receipt of remuneration in excess of' 60lakhs pa or if employed for a part of the financial year were in receipt of remunerationfor any part of that year at a rate which in aggregate was not less than ' 5 lakhs permonth.

15. Details of employees in receipt of remuneration in excess of that drawn by theManaging Director and who held by himself or alongwith his spouse or dependent childrennot less than 2% of the equity shares of the Company: Nil

ON BEHALF OF THE BOARD OF DIRECTORS For SAFARI INDUSTRIES (INDIA) LIMITED
Place: Mumbai SUDHIR JATIA
Date: 16th May 2016 Chairman & Managing Director DIN: 00031969