Your Directors have pleasure in presenting their 36th Annual Report on the business andoperations of the Company and Audited Statement of Accounts for the year ended 31st March2018.
1. FINANCIAL HIGHLIGHTS
The Board's Report is prepared based on the stand alone financial statements of theCompany.
(Rs. in Lakhs)
|Particulars ||2017-18 ||2016-17 |
|1. i. Net Sales/ Income ||1930.59 ||1651.94 |
|ii. Other Income ||31.90 ||8.05 |
|Total ||1962.49 ||1659.99 |
|2. Total Expenditure || || |
|i) Cost of material consumed ||656.80 ||86.09 |
|ii) Purchase of stock ||570.90 ||959.93 |
|iii) Changes in inventories ||(78.41) ||(81.77) |
|iv) Employee benefit Expenses ||87.20 ||103.93 |
|v) Financial cost ||21.91 ||28.05 |
|vi) Depreciation & Amortization Expense ||47.26 ||48.84 |
|vii) Other Expenditure ||384.04 ||299.82 |
|Total ||1689.70 ||1444.89 |
|3. Profit Before Tax ||272.78 ||215.10 |
|4. Provision for taxation || || |
|i) Current Tax ||(81.12) ||(100.23) |
|ii) Deferred Tax ||14.32 ||5.74 |
|iii) Earlier years Tax ||- ||- |
|5. Profit After Tax ||205.98 ||120.61 |
|6. Other Comprehensive Income ||(3.68) ||- |
|7. Amount Available for Appropriation ||202.30 ||120.61 |
|8. Appropriations: || || |
|Proposed Dividend ||(70.00) ||(63.00) |
|Dividend Distribution Tax ||(14.25) ||(13.18) |
|Transferred to General Reserve ||(115.00) ||(45.00) |
|9. Balance carried to Balance Sheet ||4.76 ||1.70 |
|10. Basic and diluted EPS ||0.29 ||0.17 |
We are pleased to inform that the Board of Directors has recommended dividend of Re.0.10 per equity share of Re. 1/- each (i.e. 10 % of face value) aggregating Rs. 7000000(excluding dividend distribution tax as applicable) for the year ended on 31st March2018.
The Board of Directors has decided to transfer Rs. 11500000 to the General reserve.
During the period under review the profit after tax (PAT) stood at Rs. 205.98 Lakhs(Previous Year Rs. 120.61 Lakhs) there is an increase of 70.78%as compared to the lastfinancial year. The performance for the coming year is expected to improve upon from thelast year if right macroeconomic indicators are achieved in the future.
5. DIRECTORS' RESPONSIBILITY STATEMENT
The Directors state that-
(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 and ofthe 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 this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis;
(e) the Directors had 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 provisionsof all applicable laws and that such systems were adequate and operating effectively.
6. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Report in form MGT-9 as requiredunder Section 92(3) of the Companies Act 2013 read with rule 12(1) of the Companies(Management and Administration) Rules 2014 are included in this Report as Annexure-I andforms an integral part of this report.
7. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in sub-section (1) of section 188 of the Companies Act 2013including certain arm's length transactions under third proviso thereto is disclosed inForm No. AOC-2 as Annexure II.
8. DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENTS/ RESIGNATIONS DURING THE YEAR
|Name of the Person ||Designation ||Date of change ||Nature of Change Appointment/ Resignation |
|Mr. Piyush Shah ||Independent Director ||July 22 2017 ||Resignation |
9. PARTICULARS OF EMPLOYEES
The information required pursuant to Rule 5 (1) of Companies(Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed as Annexure III to theDirectors Report.
Particulars of employees drawing remuneration in excess of limits prescribedunder Section 134 (3)(q) read with Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014:
There are no employees drawing remuneration exceeding Rupees One crore and two Lakhsper annum if employed throughout the financial year or Rupees Eight Lakh and FiftyThousand per month if employed for part of the financial year or draws remuneration inexcess of Managing Director or Whole time Director or Manager and holds by himself oralong with his spouse and dependent children not less than two percent of the equityshares of the Company.
10. NUMBER OF MEETINGS OF BOARD
|Particulars ||No. of meetings held |
|1. Board Meetings ||Six |
|2. Audit Committee meetings ||Four |
|3. Independent Directors Meeting ||One |
11. FORMAL ANNUAL EVALUATION
Pursuant to the applicable provisions of the Act and the Listing Regulations the Boardhas carried out an annual evaluation of its own performance and working of its Committees.The Board's functioning was evaluated on various aspects including inter alia degree offulfillment of key responsibilities its structure and composition establishment anddelegation of responsibilities to various Committees. Directors were evaluated on aspectssuch as attendance and contribution at Board/ Committee Meetings and guidance/ support tothe management of the Company. Areas on which the Committees of the Board were assessedincluded degree of fulfillment of key responsibilities adequacy of Committee compositionand effectiveness of meetings.
The performance evaluation of the Independent Directors was carried out by the entireBoard excluding the Director being evaluated. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Board as a whole.
12. DECLARATION BY INDEPENDENT DIRECTORS
Declarations by the Independent Directors that they meet the criteria of independenceas provided in sub-section (6) of Section 149 of the Companies Act 2013 has been receivedby the Company.
13. REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of directors Key Managerial Personnel and Senior Management of the Company.The said policy is also uploaded on the website of the Company; i .e.www.swastivinayaka.com
14. STATUTORY AUDITORS
At the Annual General Meeting held on September 26 2015 M/s. Sanjay Raja Jain &Co. Chartered Accountants (FRN 120132W) Mumbai were appointed as statutory auditors ofthe Company to hold office till the conclusion of the Annual General Meeting to be held inthe year 2020.
In accordance with Companies (Amendment) Act 2017 the provision with regard toratification of appointment of Auditors at every Annual General Meeting prescribed underthe first proviso to sub-section (1) of section 139 of the Companies Act 2013 is omittedfrom the financial year 2018-19 onwards.
The report given by the Auditors on the financial statements of the Company is a partof the Annual Report.
The Auditors have expressed a qualified opinion that the Company has not provided forthe gratuity liability of employees in accordance with the payment of Gratuity Act 1972on accrual basis as on date of balance sheet. Accordingly the profits of the company areoverstated and the liabilities as on closing date are understated to that extent.
Company has taken note of above adverse comment and is taking steps to comply with theAS-15 with regard to provisions for Gratuity having regard to the qualification mentionedby Statutory Auditors.
15. SECRETARIAL AUDIT REPORT
In terms of Section 204 of the Companies Act 2013 and Rules made thereunder M/s.Sandeep Dar and Co. Practicing Company Secretaries have been appointed as SecretarialAuditor of the Company. The report of the Secretarial Auditor is enclosed as Annexure IVto this report. The report is self-explanatory and Company has initiated steps to complywith various non-compliances as per the provisions of various statute mentioned under theSecretarial Audit Report.
16. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Companywww.swastivinayaka.com.
17. COMPOSITION OFAUDIT COMMITTEE
Composition of Audit Committee is required under section 177 (8) of the Companies Act2013
The Composition of Audit Committee is as follows:
|1. Mr. Sanjiv Rungta - ||Chairman |
|2. Mr. Rakesh Garodia - ||Member |
|3. Mr. Dinesh Poddar - ||Member |
18. SIGNIFICANT MATERIAL CHANGES
There were no material changes and commitments which adversely affects the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.
19. RISK MANAGEMENT
The Company is periodically reviewing its risk management perception taking intoaccount overall business environment affecting/ threatening the existence of the Company.Presently board is of the opinion that such existence of risk is minimal.
20. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS:
The Board of your Company has laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and operatingeffectively. During the year such controls were tested and no reportable materialweakness in the design or operation was observed.
During the year under review the Company has not accepted any deposits within themeaning of Section 73 and 76 of Companies Act 2013 read with the Companies (Acceptanceof Deposits) Rules 2014 and as such no amount on account of principal or interest onpublic deposits was outstanding as on the date of the balance sheet.
22. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIESACT 2013
During the year under review the Company has neither given any loan nor provided anyguarantees which are governed by the provisions of Section 186 of the Companies Act 2013.However the Company has invested the funds amounting to Rs. 1.59 Crores during the Year.
23. MANAGEMENT DISCUSSION AND ANALYSIS
I. INDUSTRY STRUCTURE AND DEVELOPMENTS
The textiles sector has witnessed a spurt in investment during the last five years. Thefuture for the Indian textile industry looks promising buoyed by both strong domesticconsumption as well as export demand. High economic growth has resulted in higherdisposable income. This has led to rise in demand for products creating a huge domesticmarket. The Indian cotton textile industry is expected to showcase a stable growthsupported by stable input prices healthy capacity utilisation and steady domestic demand.
II. OPPORTUNITIES AND THREATS
Positive steps taken by the Central Government for the textile industry fromallocation of funds to giving extra rebate to exporters (mainly on made-ups) and variousother benefits are expected to improve investment in this sector and provide morebusiness opportunities in the near future. With increasing capacities of man-made fibersas compared to cotton the preferred shift of the consumer to use products of man-madefibers i.e. viscose polyester polyamide acrylic etc. and its blends is expected.Presently in India the consumption of textile products is 65% made of cotton and 35% madeof man-made fibers as against the reverse trend overseas.
IN. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE
To overcome various challenges and a highly competitive business environment we havetaken various initiatives for the development of value added products to reduceoperational costs exploring new markets and to achieve better margins. However we willcontinue to endeavor to increase our exports and we are hopeful of doing so.
In order to satisfy the taste of customers in future and focus on cost optimization weexpect the outlook to be satisfactory. Our focus remains on value added products and newproduct development to cater to the niche segment of the market.
V. RISKS AND CONCERNS
The cotton prices have increased and to a certain extent the increase has beenabsorbed in yarn sales. But due to lower demand the prices have not increased infinished fabrics made-ups and garments which is a matter of concern.
VI. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The existing internal controls are adequate and commensurate with the nature sizecomplexity of the Business and its Processes. During the year the Company has laid downthe framework for ensuring adequate internal controls and to ensure its effectivenessnecessary steps were taken by the Company.
VII. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
Your Company's total textile sales registered a growth resulting in revenue fromoperations being Rs. 1930.59 Lakhs for the financial year ended on March 31 2018 asagainst Rs. 1651.94 Lakhs in Previous year and Profit after Tax was recorded at Rs. 205.98Lakhs in the current year as against Rs. 120.61 Lakhs in the previous year.
24. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
Company has adopted a policy for prevention of Sexual Harassment of Women at workplaceas required under the Act.
The following is a summary of sexual harassment complaint received or dispose of duringthe year 2017-18.
No. of Complaint received: NIL
No. of Complaint disposed off: NIL.
25. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO PURSUANT TO PROVISIONS OF SECTION 134 OF THE COMPANIES ACT 2013 READ WITH RULE 8(3) OF COMPANIES (ACCOUNTS) RULES 2014
A) CONSERVATION OF ENERGY:
(i) The steps taken or impact on conservation of energy - Energy conservation continuesto receive priority attention at all levels by regular monitoring of all equipments anddevices which consume electricity.
(ii) The steps taken by the company for utilizing alternate sources of energy - Companyensures that the manufacturing operations are conducted in the manner whereby optimumutilization and maximum possible savings of energy is achieved.
(iii) The capital investment on energy conservation equipments - Since Company ishaving adequate equipment no capital investment on energy conservation equipments is madeduring the year.
B) TECHNOLOGY ABSORPTION:
(i) The efforts made towards technology absorption - Not Applicable
(ii) The benefits derived like product improvement cost reduction product developmentor import substitution - Not Applicable
(iii) In the case of imported technology (imported during the last three years reckonedfrom the beginning of the financial year) - Not Applicable.
(a) The details of technology imported - Not Applicable
(b) The year of import - Not Applicable
(c) Whether the technology been fully absorbed - Not Applicable
(d) If not fully absorbed areas where absorption has not taken place and the reasonsthereof - Not Applicable
(iv) The expenditure incurred on Research and Development - At present the Company doesnot have separate division for carrying out research and development work. No expenditurehas therefore been earmarked for this activity.
C) FOREIGN EXCHANGE EARNINGS AND OUTGO
There were no foreign exchange earnings and foreign exchange outgo amounted to Rs.181.50 Lakhs during the year under review.
26. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
No significant or material orders were passed by the regulators or courts or Tribunalswhich impact the going concern status and Company's' operations in future.
We record our gratitude to the Banks and others for their assistance and cooperationduring the year. We also wish to place on record our appreciation for the dedicatedservices of the employees of the Company. We are equally thankful to our esteemedinvestors for their co-operation extended to and confidence reposed in the management.
|Registered Office: ||By Order of the Board |
|J-15 M.I.D.C. Tarapur ||Swasti Vinayaka Synthetics Limited |
|Boisar Dist. Palghar || |
|Maharashtra - 401506. || |
| ||Rajesh Poddar |
|Date: May 30 2018 ||Chairman & Managing Director |
|Place: Mumbai ||DIN-00164011 |