| Dear Members,
The Directors have pleasure in presenting their Twenty Seventh Annual
Report on the business and operations of the Company and the accounts
for the financial year ended March 31st, 2015.
1. FINANCIAL RESULTS
The Company's financial performance, for the financial year ended March
31,2015 is summarised as below:
STANDALONE
Rs (in lacs)
Revenue from operations(net) and other income 2489.13
Profit Before Tax (PBT) 81.72
Provision for tax (including previous year (20.70)
deferred tax)
Profit After Tax (PAT) 61.02
Balance brought forward from previous year 402.73
Depreciation adjustment 19.18
Profit available for appropriations 444.58
Appropriation
Proposed Equity Dividend 64.50
Taxon Proposed Equity Dividend 12.90
General Reserve 1.00
Surplus Carried to next year's account 366.18
During the year under review, the turnover of the Company registered an
increase of about 49% over the financial year 2013-2014 and 95% over
the financial year 2012-2013. In short the turnover has almost doubled
in last two years. On the other hand other income has declined due to
reasons beyond management's control.
The market in the Europe and Middle East looks brighter and the
Management's efforts to push the sales in Middle East is yielding
better results. The increased activity and tighter control over the
expenses has resulted into a net profit of Rs.81.72 lacs as against
Rs.48.41 lacs in the preceding year.
The current year has begun on a good note and the Company expects
further improvement in its performance.
2. DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 1.50 per
share. Dividend if approved by the shareholders, at the Annual General
Meeting, will absorb Rs. 64.50 Lacs.
3. RESERVES
The Board proposes to transfer Rs. 1 Lac to General Reserve.
5. CHANGE IN NATURE OF BUSINESS
The Company continues to undertake the garment activity and during the
year under review there is no change in the nature of its business.
6. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION
BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT
There have been no material changes and commitments affecting the
financial position of the Company between the end of the financial year
and the date of the report.
7. SUBSIDIARY COMPANIES
The Company does not have any subsidiary/Associate Company.
8. CORPORATE GOVERNANCE
As per Clause 49 of the Listing Agreement with the Stock Exchanges, a
separate section on corporate governance practices followed by the
Company, together with a certificate from a Company Secretary in Whole
Time Practice confirming compliance forms an integral part of this
report. Refer Annexure 'D1.
9. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the annual return in form
MGT-9, as required under Section 92 of the Companies Act, 2013, is
included in this Report as Annexure-A and forms an integral part of
this report.
10. DIRECTORS
During the year under review there is no change in directors of the
Company.
All Independent Directors have given declarations that they meet the
criteria of independence as laid down under Section 149(6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
As per provisions of Section 152 of the Companies Act, 2013, one third
of the total strength of directors is required to retire by rotation at
every Annual General Meeting and they can offer themselves for
reappointment, if eligible. At present the total strength of Board of
directors of the Company is Six Directors out of which four are
Independent Director and two are executive director. All independent
directors were appointed for a period of 5 years with effect from 1st
April 2014. The executive directors namely Mr. Umesh M. Katre was
appointed as Managing Director for a period of 3 years with effect from
1st November, 2012. Mrs. Seema U. Katre, the Whole Time Director was
appointed fora period of 3 years with effect from 11th November, 2013.
Since the Independent directors are not required to be calculated for
the purpose of determining the directors liable to retire by rotation
and the executive director are appointed for a particular period as per
the terms of employment, no directors are retiring by rotation at the
forth coming Annual General Meeting.
11. KEY MANAGERIAL PERSONNEL
During the year under review, the Company has designated / appointed
following persons as Key Managerial Personnel:
Sr. No. Name of the Person Designation
1. Mr. Umesh M. Katre Chairman & Managing Director
2. Mr. Rohan U. Katre Chief Financial Officer
3. Mr. Pravin R Kokam Company Secretary*
*Appointed with effect from 29th May, 2015
12. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, a structured questionnaire was prepared after
taking into consideration the various aspects of the Board's
functioning, composition of the Board and its Committees, execution and
performance of the specific duties obligations and governance.
The performance evaluation of the Independent Directors was completed.
The performance evaluation of the Chairman and the Non Independent
Directors was carried out by the Independent Directors. The Board of
Directors expressed their satisfaction with the evaluation process.
13. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
The details of the number of meeting of the Board held during the
financial year 2014-15 forms part of the Corporate Governance Report.
14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY
The Company has not given any loans or guarantees covered under the
provisions of section 186 of the Companies Act, 2013.
The details of the investments made by Company are given in the notes
to the financial statements.
15. WHISTLE BLOWER POLICY
The company has a whistle blower policy to report genuine concerns and
grievances. The Whistle Blower Policy has been posted on the website of
the company (www.spiceislandsapparelslimited.in).
16. REMUNERATION AND NOMINATION POLICY
The Board of Directors has framed a policy which lays down a framework
in relation to remuneration of Directors, Key Managerial Personnel and
Senior Management of the Company. This policy also lays down criteria
for selection and appointment of Board Members. The detail of this
policy is available on the website of the Company.
17. RELATED PARTY TRANSACTION
All contracts / arrangement / transactions entered by the Company during
the financial year with the related parties were in the ordinary course
of business and on an Arm's length basis. During the year, the Company
had not entered into any contract/arrangement/transaction with related
parties which could be considered material in accordance with the policy
of the Company on materiality of Related Party Transactions.
The Policy of materiality of related party transactions and dealing
with related party transactions as approved by the Board may be
accessed on Company's website (www.spiceislandsapparelslimited.in).
Your Directors draw attention of the members to Note 36 to the
financial statement which sets out related party disclosure.
18.SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators /
Courts that would impact the going concern status of the Company and
its future operations.
19. PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider
Trading with a view to regulate trading in securities by the Directors
and designated employees of the Company. The Code requires
pre-clearance for dealing in the Company's shares and prohibits the
purchase or sale of Company shares by the Directors and the designated
employees while in possession of unpublished price sensitive
information in relation to the Company and during the period when the
TradingWindow is closed. The Board is responsible for implementation of
the Code.
All Board of Directors and the designated employees have confirmed
compliance with the Code.
20. DIRECTOR'S RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the
following statements in terms of Section 134(3) (c) of the Companies
Act, 2013:
(a) that in the preparation of the Annual Accounts 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) 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 as at March 31, 2015 and of the profit
of the Company for the year ended on that date;
(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) the annual accounts have been prepared on a going concern basis;
(e) that the Directors had laid down internal financial controls to be
followed by the company and that such internal financial controls are
adequate and were operating effectively;
(f) that the Directors had devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems were
adequate and operating effectively.
21.STATUTORY AUDIT
Messrs T D Jain and D I Sakaria, Chartered Accountants, (Firm
Registration No: 002491S) who are Statutory Auditors of the Company and
holds office upto forthcoming Annual General Meeting and are
recommended for re-appointment to audit the accounts of the Company for
the financial year 2015-16. As required under the provisions of Section
139 of the Companies Act, 2013, the Company has obtained written
confirmation from Messrs TD Jain and DI Sakaria that their appointment,
if made, would be in conformity with the limits specified in the said
Section.
22.COST AUDIT
Pursuant to the provisions of Section 148 of the Companies Act, 2013,
the Company had carried out audit of cost records for the year ended
31st March, 2014 and the Cost Audit Report for the financial year
2013-14 was filed with the Ministry of Corporate Affairs on 2nd January,
2015.
The Companies (Cost Records and Audit) Rules 2014, as notified with
effect from 30th June, 2014 lays down in detail the rules for
applicability of maintenance of cost records and the audit thereof.
None of the criteria are applicable to the Company and accordingly no
audit of the cost records is carried out for the year ended 31st March,
2015.
23.SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and rules made there under, the Company has appointed Messrs Nitesh
Jain & Co., a firm of Company Secretaries in practice (C.RNo.8582) to
undertake the Secretarial Audit of the Company. The Secretarial Audit
Report is included as Annexure B and forms an integral part of the
Report. It may be noted that with effect from 29th May, 2015 the
Company has appointed Whole Time Company Secretary in terms of
provisions of section 203 of the Companies Act, 2013. This replies to
the observation of Secretarial Auditor. Except this there are no
qualifications in Secretarial Audit Report.
24.INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has in place proper and adequate internal control systems
commensurate with the nature of its business and size and complexity of
its operations. Internal control systems comprising of policies and
procedures are designed to ensure reliability of financial reporting,
timely feedback on achievement of operational and strategic goals,
compliance with policies, procedure, applicable laws and regulations,
and that all assets and resources are acquired economically, used
efficiently and adequately protected.
The Audit Committee of the Board of Directors actively reviews the
adequacy and effectiveness of the internal control systems and suggests
improvements to strengthen the same. The Company has a robust
Management Information System, which is an integral part of the control
mechanism.
25.RISK MANAGEMENT
During the year under review, steps were taken to identify and evaluate
elements of business risk. Consequently a revised robust Business risk
management framework is in place. The risk management framework defines
the risk management approach of the Company and includes periodic
review of such risks and also documentation, mitigating controls and
reporting mechanism of such risk.
Some of the risks that the Company is exposed to are;
Financial Risks
The Company's policy is to actively manage its foreign exchange risk
within framework laid down by the Company's forex policy approved by
the Board.
Given the interest rate fluctuations, the Company has adopted a prudent
and conservative risk mitigation strategy to minimize interest cost.
Commodity Price Risk
The Company is exposed to risks of price fluctuation of raw materials.
The Company proactively manages these risks through inventory
management and vendor loyalty practices. The Company's reputation for
quality, product differentiation and service mitigates the impact of
price risk on finished goods.
Regulatory Risk
The company is exposed to risks attached to various statutes and
regulations. The Company is mitigating these risks through regular
review of legal compliances carried out through internal as well as
external audits. The Company continuously reviews the policies to avoid
any statutory and regulatory risk.
Human Resources Risks
Retaining the existing talent pool and attracting new talent are major
risks. The Company has initiated various measures including training
and development activities to preserve the valuable employees and is
liberal in pay package so as to give them the safety and dedication to
the Company.
26.INFORMATION PURSUANT TO RULE 5 (2) OF COMPANIES (APPOINTMENT &
REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
The Company does not have any employee (s) who are in receipt of
remuneration exceeding the limits specified under Rule 5 (2) of
Companies (Appointment & Remuneration of Managerial Personnel) Rules,
2014.
27.CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company does not have any obligation to fulfill under corporate
social responsibility as none of the criteria are applicable to the
Company.
28.STATUTORY INFORMATION
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo pursuant to Section 134(3)(m) of
the Companies Act, 2013, read with the Rule 8(3) of the Companies
(Accounts) Rules, 2014 is given in Annexure - C to this report.
The Company has not accepted any deposits, within the meaning of
Section 73 of the Companies Act, 2013, read with the Companies
(Acceptance of Deposits) Rules, 2014.
29. GENERAL
Your Directors further state that during the year under review, there
were no cases filed pursuant to the Sexual Harassment of Women at Work
place (Prevention, Prohibition and Redressal) Act, 2013.
30. CAUTIONARY STATEMENT
Statements in the Director's Report & Management Discussion and
Analysis describing the Company's objectives, projections, estimates,
expectations or predictions may be "forward-looking statements" within
the meaning of applicable securities laws and regulations. Actual
results could differ materially from those expressed or implied.
Important factors that could make difference to the Company's
operations include raw material availability and its prices, cyclical
demand and pricing in the Company's principle markets, changes in
Government regulations, Tax regime, economic developments within India
and the countries in which the Company conducts business and other
ancillary factors.
31. ACKNOWLEDGEMENT
Your Directors would like to express their sincere appreciation for the
assistance and co-operation received from the banks, Government
authorities, customers, vendors and members during the year under
review. Your Directors also wish to place on record their deep sense of
appreciation for the committed services by the Company's executives,
staff and workers.
For and on behalf of the Board of Directors,
SPICE ISLANDS APPARELS LIMITED
PLACE : MUMBAI UMESH M. KATRE
DATE : 29th May, 2015. (Chairman & Managing Director)
|