Mar 31, 2015
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)
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the Twenty Sixth Annual
Report of the Company for the year ended 31st March, 2014.
(Rs. in lacs) (Rs. in lacs)
2013-2014 2012-2013
FINANCIAL RESULTS
Sales & Operating Income 1617.41 1231.91
Other Income 123.01 55.29
Profit (Loss) before Taxation 48.41 (70.98)
Provision for Taxation - Current 0.11 --
Year (Nett)
Short / (excess) Provision 16.71 0.60
for Tax
Deferred Tax (11.33) 4.13
Profit after Taxation 42.92 (75.71)
Add : Balance brought forward 411.11 512.97
from previous year
454.03 437.26
APPROPRIATION
General Reserve 1.00 1.00
Proposed Dividend 43.00 21.50
Tax on distribution of dividend 7.30 3.65
Balance Profit carried forward 402.73 411.11
454.03 437.26
OPERATIONS
During the year under review, the turnover of the company registered an
increase of about 31% over the previous year. Other income has also
increased by about 122% over the previous year. This has helped the
company to achieve profit of 48.41 lacs as against loss of 70.98 lacs
in the preceding period.
The turnaround was mainly on account of breakthrough in the Middle East
market as against the Company''s core market in Europe. This was first
experience in a new market and the margin has been satisfactory. Going
forward, this may turn out to be a potential growth area.
The current year has begun on a good note and the Company expects
improvement in performance.
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 1.00 per
Share. Dividend, if approved by the shareholders, at the Annual General
Meeting, will absorb Rs. 43.00 lacs.
TAXATION
Provision of Rs. 16.81 lacs is made to meet the liability for Tax
(Nett).
DIRECTORS
In accordance with the provisions of Section 149 and other applicable
provisions of the Companies Act, 2013, Your Company is seeking
appointment of Mr. Carl V. Dantas, Mr. C.G. Patankar, Mr. Ashok G.
Daryanani & Mr. Rahul L. Mehta as Independent Directors for Five
consecutive years. Details relating to their appointment are mentioned
in the Statement annexed to the Notice under Section 102 of the
Companies Act, 2013.
The Company has received declaration from all the Independent Directors
of the Company confirming that they meet with the criteria of
Independence as prescribed, both under sub-section (6) of Section 149
of the Companies Act, 2013 and under Clause 49 of the Listing Agreement
with the Stock Exchange.
Mrs. Seema Katre''s continued association as a Whole time Director is in
the interest of the Company, particularly for strengthening the back
office functions and improved coordination amongst various functional
heads. Her contribution for cost control and for improving efficiency
at all levels is immense and hence the Board recommends her
re-appointment as a WHOLE TIME DIRECTOR for a further period of three
years. Suitable resolution is proposed in the forthcoming Annual
General Meeting.
DIRECTORS RESPONSIBILITY
Pursuant to the requirements under Section 217 (2AA) of the Companies
Act, 1956 with respect to Directors'' Responsibility Statement, it is
hereby confirmed that:
1. In the preparation of the annual accounts, the applicable
Accounting Standards have been followed.
2. Appropriate accounting policies have been selected and applied
consistently, and have made judgments and estimates that are reasonable
and prudent so as to give true and Fair view of the state of affairs of
the company as at 31st March, 2014 and of the profit of the company for
the year ended on 31st March, 2014.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;
4. The annual accounts have been prepared on a going concern basis.
REPORTS ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS
The reports on Corporate Governance and Management Discussion and
Analysis for the year under review, as stipulated under Clause 49 of
the Listing Agreement form part of the Annual Report. The certificate
from the Practicing Company Secretary confirming compliance with the
conditions of corporate governance is annexed to the Corporate
Governance Report.
UNCLAIMED DIVIDEND FOR PREVIOUS YEAR''S
Pursuant to the provisions of Investor Education and Protection Fund
(Uploading of information regarding unpaid and unclaimed amounts lying
with companies) Rules, 2012, the Company has uploaded the details of
unpaid and unclaimed amounts lying with the Company as on September, 2,
2013 (date of last Annual General Meeting) on the Company''s website
(www.spiceislandsapparelslimited.in), as also on the Ministry of
Corporate Affairs, website.
DEPOSITORY SYSTEM
Trading in Equity Shares of your Company is permitted in dematerialized
form in terms of notification issued by Securities and Exchange Board
of India [SEBI]. Your Company has entered into agreements with National
Securities Depository Ltd. [NSDL] & Central Depository Services India)
Ltd. [CDSL], to enable shareholders to hold shares in dematerialized
form. Since dematerialization facilitates quick share transfers and
prevents forging of documents, those shareholders who have not opted
for this facility are advised to dematerialize their shares with either
of the Depositories.
PARTICULARS OF EMPLOYEES
The particulars required under section 217 (2A) of the Companies Act,
1956, read with the Companies (particulars of employees) Rule, 1975 are
not furnished since none of the employees of the Company are drawing
remuneration in excess of the limit laid down under the said
provisions.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The details as required under the Companies (disclosure of particulars
in the Report of Board of Directors) Rules 1988, are set out in the
annexure forming part of this Report.
COMPLIANCE CERTIFICATE
The Company has obtained Compliance Certificate pursuant to provisions
of Sec 383 A of the Companies Act, 1956 from a Secretary in Whole
Time practice, M/s. Nitesh Jain & Co., in the prescribed form regarding
the compliance of all the provisions of the said Act.
COST COMPLIANCE REPORT
As required by Notification 429E dated 3rd June 2011 issued by the
Ministry of Corporate Affairs, the Company has obtained Cost Compliance
Report from the Cost Accountants and field the same with the Central
Government.
AUDITORS COMMENTS
Independent Auditors report to the Members does not contain any adverse
remarks and as such no comments are required.
AUDITORS
Members are requested to appoint Auditors for the current year and to
authorize the Board of Directors to fix their remuneration. M/s. T D
Jain & D I Sakaria, Chartered Accountants, have furnished a certificate
of their eligibility for re- appointment under section 224 (1B) of the
Companies Act, 1956
NOMINATION
Articles of Association of the Company were suitably amended to permit
nomination facility. Members of the Company are requested to avail
themselves of the nomination facility.
COMPLIANCE WITH COMPANIES ACT, 2013
With effect from 1st April, 2014 most of the provisions of the
Companies Act, 2013 as notified by Ministry of Corporate Affairs
(''MCA'') are in force. The Statutory compliance done by the Company
under the provisions of the Companies Act, 1956 requires review /
modifications and should be made compliant with the New Companies Act.
Keeping in mind the good practices followed by the Company in earlier
years, several resolutions are proposed for approval by the members of
the Company in the Annual General Meetings the details are available in
the notice of Annual General Meeting and explanatory statement attached
thereto.
Ordinary / Special resolution''s proposed for approval of members are
detailed herein below.
SN. Particulars Remark
1. Appointment of Mr. Carl Mr. Carl V. Dantas was appointed
V. Dantas as an independent director on 4th
as an Independent November, 1995. Under provision of
Director Section 149(10) of the Companies
Act, 2013 he can hold office of
director for a further period of 5
years if approved by shareholders
of the Company. Having regard to be
valuable experience Mr. Dantas has,
it is in the interest of the Company
that he holds the directorship of the
Company for a further period of five
years.
2. Appointment of Mr. Mr. Ashok G. Daryanani was appointed
Ashok G. Daryanani as an independent director on 29th
as an Independent October, 2003. Under provision of
Director Section 149(10) of the Companies Act,
2013 he can hold office of director
for a further period of 5 years if
approved by shareholders of the
Company. Having regard to be valuable
experience Mr. Ashok G. Daryanani
has, it is in the interest of the
Company that he holds the
directorship of the Company for a
further period of five years.
3. Appointment of Mr. C. G. Mr. C.G. Patankar was appointed
Patankar as an on 30th as an Independent Director January,
independent director 2003. Under provision of Section
149(10) of the Companies Act,
2013 he can hold office of director
for a further period of 5 years if
approved by shareholders of the
Company. Having regard to be valuable
experience Mr. C.G. Patankar has, it
is in the interest of the Company
that he holds the directorship of the
Company for a further period of five
years.
4. Appointment of Mr. Mr. Rahul L. Mehta was appointed as
Rahul L. Mehta as an an independent director on 29th
Independent Director January, 2010. Under provision of
Section 149(10) of the Companies Act,
2013 he can hold office of director
for a further period of 5 years if
approved by shareholders of the
Company. Having regard to be valuable
experience Mr. Rahul L. Mehta has,
it is in the interest of the Company
that he holds the directorship of
the Company for a further period of
five years
5. Reappointment of Mrs. Mrs. Seema U. Katre is associated
Seema U. with the Company as whole time
Katre as Whole Time director for past 3 years and having
Director regard to the valuable contribution
made by her in improving efficiency
at all level she is reappointed as
whole time director for further
period of three years.
6. Authority to the Board Although the requisite authority was
of Directors to sell granted to the board by the members
/dispose off / create under provisions of section293(1)(a)
charge on the assets of the Companies Act, 1956, the
of the Company enabling resolution is proposed under
provisions of section 180(1)(a) of
the Companies Act, 2013.
7. Authority to the Board of Although the borrowing powers were
Directors to borrow in granted to the board by the
excess of paid up share members under provisions of section
capital and free 293(1)(d) of the Companies Act,
reserves 1956, the enabling resolution is
proposed under provisions of section
180(1)(c) of the Companies Act, 2013.
8. Increasing the limits to Suitable authority to the board is
makes loans / investments ought to be granted under provisions
/ provide of section 186 of the Companies Act,
guarantees 2013. This will help the board to
park the surplus fund of the Company
in a profitable manner and /
or to make strategic investment.
9. Approval of Remuneration The boards of directors have
payable to Cost Auditors appointed M/s. Moorthy & Company LLP
as Cost Auditors to conduct audit
of the cost record of the Company for
financial year ended 31.03.2014.
Specific approval from members is
required for payment of remuneration
to the cost auditors under provisions
of section 148 of Companies Act, 2013
10. Approval of Remuneration The boards of directors have
payable to Cost Auditors appointed M/s. Moorthy & Company LLP
as Cost Auditors to conduct audit of
the cost record of the Company for
financial year ending on 31.03.2015.
Specific approval from members is
required for payment of remuneration
to the cost auditors under
provisions of section 148 of
Companies Act, 2013
11. Adoption of New Articles The present Articles of Association
of Association is not in consonance with the
provisions of Companies Act, 2013.
The Article contains the
references of Companies Act 1956
it is therefore considered expedient
to wholly replace the existing
article of Association with new set
of Articles
12. Delisting of equity The equity shares of the Company
shares of the company are not at all traded in Ahmadabad &
from Ahmadabad & Pune It would therefore be advisable
Stock Exchanges. to do away with Pune Stock Exchange
the listing of equity shares from the
said stock exchange.
13. ENABLING POWERS - buy Only enabling power from shareholders
back of the Shares are sought, to permit the board
of the Company of directors to decide on buy back of
shares at an appropriate time. At
present there is no concrete plan but
in near future if opportunity
permits the board may consider buying
back some shares which will
improve the share valuation, as the
same is highly undervalued. As of
now, there is no firmed up immediate
plan to go for buy back.
Directors commend the above resolutions for approval of the
shareholders.
APPRECIATION
Your Directors acknowledge with gratitude the co-operation extended by
Bankers of the Company, Stock Exchange, SEBI, and other Government/
Semi Government Authorities.
Your Directors also wish hereby to place on record their appreciation
of the efficient and loyal services rendered by all the staff and
workmen of the company, without whose whole hearted efforts, the
overall satisfactory performance would not have been possible.
The Board also thanks the Shareholders of the Company for their whole
hearted support.
For and on behalf of the Board of Directors,
SPICE ISLANDS APPARELS LIMITED
PLACE : MUMBAI UMESH M. KATRE
DATE : 28th May, 2014. (Chairman & Managing Director)
Mar 31, 2013
To, The Members,
The Directors have pleasure in presenting the Twenty Fifth Annual
Report of the Company for the year ended 31st March, 2013.
(Rs. in lacs) (Rs. in lacs)
2012-2013 2011-2012
FINANCIAL RESULTS
Sales & Operating Income 1231.91 1381.02
Other Income 55.29 84.90
Profit (Loss) before Taxation (70.98) 38.45
Provision forTaxation
- Current Year (Nett) 4.13 18.37
Short/(excess) Provision for Tax 0.60 (0.70)
Profit after Taxation (75.71) 20.79
Add: Balance brought forward
from previous year 512.97 530.66
437.26 551.45
APPROPRIATION
General Reserve 1.00 1.00
Proposed Dividend 21.50 32.25
Tax on distribution of dividend 3.65 5.23
Balance Profit carried forward 411.11 512.97
437.26 551.44
OPERATIONS
The trend of decline in sales has continued even during the year 2012 -
13, although the percentage fall was much lower compared to the
previous year (10.79% as against 26 %). To be precise, the turnover has
declined to Rs. 1231.91 lacs as against Rs. 1381.02 lacs in the
preceding year. It was difficult to maintain the turnover as certain
factors such as prevailing economic situation in Europe, financial
health of buyers, difficult entry in the US market etc. are beyond
control of the Management. The recovery of claim amount from ECGCon
account of failure of one of the company''s main customer was not
sufficient and the company had to book bad debts of about 66.60 lacs.
Unlike last year, the benefit on account of exchange gain is marginal
as the currency has stabilized.
Thus the above factors have resulted in a net loss of 70.92 lacs as
against a profit of 38.45 lacs in 2011-12. The loss would have been
higher but for the tight control over expenses. Having regard to the
fact that the Company has incurred loss but with a view not to
disappoint shareholders in the 25th year of the Company, a modest
dividend of Rs. 0.50 per share is recommended.
The current year would certainly see an increase in turnover &
profitability, as order booking has improved.
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 0.50 per
Share. Dividend, if approved by the shareholders, at the Annual General
Meeting, will absorb Rs. 21.50 lacs.
TAXATION
Provision of Rs. 4.72 lacs is made to meet the liability for Tax.
DIRECTORS
Mr. Rahul Mehta retires by rotation and being eligible offers himself
for re-appointment.
Mr. Umesh Katre''s continued association as s Managing Director is in
the interest of the growth of the Company and suitable resolution is
proposed in the forthcoming Annual General Meeting for his
re-appointment for a further period of three years. The Board
recommendsthe resolution.
DIRECTORS RESPONSIBILITY
Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000,
the Director''s confirm that :
1. In the preparation of the annual accounts, the applicable
Accounting Standards have been followed.
2. Appropriate accounting policies have been selected and applied
consistently, and have made judgments and estimates that are reasonable
and prudent so as to give true and fair view of the state of affairs of
the company as at 31st March, 2013 and of the loss of the company for
the year ended on 31st March, 2013.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;
4. The annual accounts have been prepared on a going concern basis.
CORPORATE GOVERNANCE
A report on the Corporate Governance Code along with a certificate from
the Practicing Company Secretary of the Company regarding the
compliance of conditions of Corporate Governance as also the Management
Discussion and AnalysisReportasstipulatedunderClause49oftheListing
Agreementsare annexed to this Report.
DEPOSITORY SYSTEM
Trading in Equity Shares of your Company is permitted in dematerialised
form in terms of notification issued by Securities and Exchange Board
of India [SEBI], Your Company has entered into agreements with National
Securities Depository Ltd. [NSDL] & Central Depository Services
(India) Ltd. [CDSL], to enable shareholders to hold shares in
dematerialized form. Since dematerialization facilitates quick share
transfers and prevents forging of documents, those shareholders who
have not opted for this facility are advised to dematerialize their
shares with either of the Depositories.
PARTICULARS OF EMPLOYEES
The particulars required under section 217 (2A) of the Companies Act,
1956, read with the Companies (particulars of employees) Rule, 1975 are
not furnished since none of the employees of the Company are drawing
remuneration in excess of the limit laid down under the said
provisions.
CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The details as required under the Companies (disclosure of particulars
in the Report of Board of Directors) Rules 1988, are set out in the
annexure forming part of this Report.
COMPLIANCE CERTIFICATE
Compliance Certificate obtained pursuant to provisions of Sec 383 A of
the Companies Act, 1956 from a Secretary in Whole Time practice, M/s.
Nitesh Jain & Co., in the prescribed form regarding the compliance of
all the provisions of the said Act, is enclosed herewith.
COST COMPLIANCE REPORT
As required by Notification 429E dated 3rd June 2011 issued by the
Ministry of Corporate Affairs, the Company has obtained Cost Compliance
Report from the Cost Accountants and field the same with the Central
Government.
AUDITORS COMMENTS
Independent Auditors report to the Members does not contain any adverse
remarks and as such no comments are required. However, out of abundant
caution, the Board explains the information provided in Annexure
referred to para 1 of the said report.
a) Disputed dues (Clause 9~(c) of the Report on other legal and
regulatory requirements): The Company has challenged the various
demands at different levels with concerned authorities and is hopeful
that this will be reduced considerably once the appeal orders are
received. Besides, the Company has obtained legal opinion and at
present no provision is required for the disputed demands.
b) Cash loss (Clause 10 of the Report on other legal and regulatory
requirements):
On account of reduction in turnover and the fact that a substantially
large amount was to be provided towards bad debts, the Company did
suffer cash loss during the year under review. The issue is addressed
at a different level and attempts are being made to recover all fixed
and variable costs. The resources of the Company are judicially
utilised and the Board is of the opinion that the Company will
certainly be able to do away with cash losses during the current
financial year.
AUDITORS
Members are requested to appoint Auditors for the current year and to
authorize the Board of Directors to fix their remuneration. M/s. T D
Jain & D I Sakaria, Chartered Accountants, have furnished a certificate
of their eligibility for re- appointment under section 224 (IB) of the
Companies Act, 1956
NOMINATION
Articles of Association of the Company were suitably amended to permit
nomination facility. Members of the Company are requested to avail
themselves of the nomination facility.
APPRECIATION
Your Directors acknowledge with gratitude the co-operation extended by
Bankers of the Company, Stock Exchange, SEBI, and other Government/Semi
Government Authorities.
Your Directors also wish hereby to place on record their appreciation
of the efficient and loyal services rendered by all the staff and
workmen of the company, without whose whole hearted efforts, the
overall satisfactory performance would not have been possible.
The Board also thanks the Shareholders of the Company for their whole
hearted support.
For and on behalf of the Board of Directors,
SPICE ISLANDS APPARELS LIMITED
PLACE :MUMBAI UMESH M. KATRE
DATE : 28th May, 2013. (Chairman & Managing Director)
Mar 31, 2012
The Directors have pleasure in presenting the Twenty Fourth Annual
Report of the Company for the year ended 31st March, 2012.
(Rs. in lacs) (Rs. in lacs)
2011-2012 2010-2011
FINANCIAL RESULTS
Sales & Operating Income 1430.73 1943.40
Other Income 37.52 53.34
Profit before Taxation 38.78 176.60
Provision for Taxation -
Current Year (Nett) 18.70 66.61
Short / (excess)
Provision for Tax (0.70) 1.46
Profit after Taxation 20.79 108.53
Add : Balance brought
forward from previous year 530.66 482.27
551.45 590.80
APPROPRIATION
General Reserve 1.00 10.00
Proposed Dividend 32.25 43.00
Tax on distribution of dividend 5.23 7.14
Balance Profit carried forward 512.96 530.66
551.44 590.80
OPERATIONS
Sales & operating income has declined by about 26% over the previous
year i.e. from Rs. 1943.40 lacs to Rs. 1430.73 lacs. Restricting the
fall to his level itself was a challenge as the major customer area of
the company, the European markets as all of us are aware, are in a
state of turmoil and severe recession. Given the negative outlook, the
company found it difficult to accept business from probable customers
for want of credit worthiness or risk insurance. Under these
circumstances the Management had little choice but to restrict business
to financially healthy customers, whose own order books were slack due
to low demand and also a reluctance on their part to hold higher
inventories. We expect this type of dismal scenario to continue, if not
worsen, in the year ahead.
Resultant depression of the Western market has had its toll on retail
businesses and in one such instance, a major retail chain store client
of one of the company's UK based customer filed for liquidation which
resulted in our customer facing severe financial issues & thereby
necessitating the company of having to file its first ever insurance
claim with the Export Credit Guarantee Corporation. On account of this
filing and based on procedure, a certain percentage of the claim as
stipulated requires to be written off as bad debts. Same has been
provided for, bringing further pressure on pre and post tax
profitability.
As has been stated, the year gone by has seen severe recessionary trend
in the Western market with no positive signs of recovery in the
forthcoming year and on the other hand on the home front cost of
production is steadily rising on account of double digit inflationary
trend resulting in escalation of salaries and wages, transport cost,
energy costs all of which are key elements in our price structure. The
result of all these pressures are reflected in the lower margins and
thereby the operating results.
Given the dismal scenario, the forthcoming financial year which itself
has begun on an extremely weak note is unlikely to strengthen and
therefore the Management of your company will strive to explore new
markets and better manufacturing avenues and hope to achieve reasonable
results.
DIVIDEND
Your Directors are pleased to recommend a dividend of Rs. 0.75 per
Share. Dividend, if approved by the shareholders, at the Annual General
Meeting, will absorb Rs. 32.25 lacs.
TAXATION
Provision of Rs. 13.89 lacs is made to meet the liability for Tax.
DIRECTORS
Mr. AshokG. Daryanani retires by rotation and being eligible offers
himself for re-appointment.
DIRECTORS RESPONSIBILITY
Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000,
the Director's confirm that :
1. In the preparation of the annual accounts, the applicable
Accounting Standards have been followed.
2. Appropriate accounting policies have been selected and applied
consistently, and have made judgments and estimates that are reasonable
and prudent so as to give true and fair view of the state of affairs of
the company as at 31 st March, 2012 and of the Profit of the company
for the year ended on 31st March, 2012.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;
4. The annual accounts have been prepared on a going concern basis.
CORPORATE GOVERNANCE
A report on the Corporate Governance Code along with a certificate from
the Practicing Company Secretary of the Company regarding the
compliance of conditions of Corporate Governance as also the Management
Discussion and Analysis Report as stipulated under Clause 49 of the
Listing Agreements are annexed to this Report.
DEPOSITORY SYSTEM
Trading in Equity Shares of your Company is permitted in dematerialized
form in terms of notification issued by Securities and Exchange Board
of India [SEBI]. Your Company has entered into agreements with National
Securities Depository Ltd. [NSDL] & Central Depository Services India
Ltd. [CDSL], to enable shareholders to hold shares in dematerialized
form. Since dematerialization facilitates quick share transfers and
prevents forging of documents, those shareholders who have not opted
for this facility are advised to dematerialize their shares with either
of the Depositories.
PARTICULARS OF EMPLOYEES
The particulars required under section 217 (2A) of the Companies Act,
1956, read with the Companies (particulars of employees) Rule, 1975 are
not furnished since none of the employees of the Company redrawing
remuneration in excess of the limit laid down under the said
provisions.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The details as required under the Companies (disclosure of particulars
in the Report of Board of Directors) Rules 1988, are set out in the
annexure forming part of this Report.
COMPLIANCE CERTIFICATE
Compliance Certificate obtained pursuant to provisions of Sec 383 A of
the Companies Act, 1956 from a Secretary in Whole Time practice, Mr. P.
V. Ramaswamy, in the prescribed form regarding the compliance of all
the provisions of the said Act, is enclosed herewith.
AUDITORS
Members are requested to appoint Auditors for the current year and to
authorize the Board of Directors to fix their remuneration. M/s. T D
Jain & D I Sakaria, Chartered Accountants, have furnished a certificate
of their eligibility for re-appointment under section 224 (1B) of the
Companies Act, 1956
NOMINATION
Articles of Association of the Company were suitably amended to permit
nomination facility. Members of the Company are requested to avail
themselves of the nomination facility.
APPRECIATION
Your Directors acknowledge with gratitude the co-operation extended by
Bankers of the Company, Stock Exchange, SEBI, and other Government/Semi
Government Authorities.
Your Directors also wish hereby to place on record their appreciation
of the efficient and loyal services rendered by all the staff and
workmen of the company, without whose whole hearted efforts, the
overall satisfactory performance would not have been possible.
The Board also thanks the Shareholders of the Company for their whole
hearted support.
For and on behalf of the Board of Directors,
SPICE ISLANDS APPARELS LIMITED
PLACE : MUMBAI
UMESH M. KATRE
DATE : 30th May, 2012 (Chairman & Managing Director)
Mar 31, 2010
The Directors have pleasure in presenting the Twenty Second Annual
Report of the Company for the year ended 31st March, 2010.
(Rs. IN LACS) (Rs. IN LACS)
2009-2010 2008-2009
FINANCIAL RESULTS
Sales & Operating Income 2039.36 1441.40
Other Income 165.23 125.12
Profit before Taxation / Extra Ordinary item 390.47 191.95
Provision for Taxation - Current Year 60.92 1.46
Excess Provision for Tax (0.43) (0.50)
Profit after Taxation 329.98 193.91
329.98 193.91
APPROPRIATION
General Reserve 20.00 10.00
Proposed Dividend 64.50 43.00
Tax on distribution of dividend 10.96 7.31
Balance Profit carried forward 234.52 133.60
329.98 193.91
OPERATIONS
Continuing the trend of increase in turnover, the sales and operating
income increased by approx 42% (previous year 8%) to Rs. 2039.37 lacs
as against Rs. 1441.40 lacs in the previous year. This was achieved
despite the global downturn affecting all the markets. The main reason
towards the better results achieved by the Company purely rests on the
abilities of the overseas agents appointed and their having channelized
business of stable & profit worthy clients to the Company and at the
same time ensuring that the debtor book remains under control.
The knitwear division continues to hold the key and contributes about
72% of the turnover. With the increase in turnover, profitability has
increased more than 100% over the previous year. Prudent utilization of
resources, re-grouping of product mix coupled with apportionment of
fixed cost over greater turnover has paid rich dividends. Apart ftom
the operating profits achieved from the core business, the Company also
gainfully utilized its surplus funds in a mix of deposits and market
operations which also added a fair amount to the bottom-line.
Conservative approach of write-off of Irrecoverable advance of Rs.
68.04 lacs in the previous year has also been instrumental in uplifting
the profit as the advance are recovered in the form of shares of a
certain company. Overall, the profit before tax works out to Rs. 390.47
lacs as against Rs. 191.95 lacs in the preceding year. The profit
achieved is lower by approx Rs. 73.80 lacs as the last quarter resulted
in a forex loss of approx Rs. 31.68 lacs on account of fall in value of
foreign currency as well as the Company having paid its employees a
performance bouns of Rs. 17.12 lacs and also having given a donation of
Rs. 25 lacs for a worthy cause as per the wishes expressed by the
members in the last Annual General Meeting.
The current calendar year began with upheavals in European currencies
on account of uncertainties on the financials of three or four members
of the European Union. This has resulted in a significant downward
pressure on the two principal currencies in which your Company trades
i.e. GBP and Euro. Added to this , the last six months have seen
increased speculation in the cotton and cotton yarn markets resulting
in the yarn and fabric prices firming up by approx 20%. Thus the
downward pressure on the foreign exchange aspect with added price
increase in the principle raw material would probably lead to a
difficult year ahead in terms of margins and perhaps even in achieving
planned targets. Nevertheless the management will make all afforts in
keeping the Companys operations under control so as to reduce the
negative impact as far as possible.
In keeping with the streamlining of the Companys operations &
structure, the Board has decided to do away with the subsidiary company
as it is not contributing in any significant manner.
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.
TAXATION
Provision of Rs. 68,50,000/- is made to meet the liability for Tax.
DIRECTORS
During the year under review, Mr. Rahul Lalbhai Mehta was co-opted as
an Additional Director of the Company. The Board recommends his
appointment as a Director in the forthcoming Annual General Meeting.
Mr. Karl Dantas retires by rotation and being eligible, offers himself
for re-appointment.
Mr. Umesh Katres continued association as a Managing Director is in
the interest of the growth of the Company and suitable resolution is
proposed in the forthcoming Annual Meeting for his reappointment for a
further period of three years. The Board recommends the resolution.
DIRECTORS RESPONSIBILITY
Pursuant to Section 217 (2AA) of the Companies (Amendment) Act, 2000,
the Directors confirm that :
1. In the preparation of the annual accounts, the applicable
Accounting Standards have been followed.
2. Appropriate accounting policies have been selected and applied
consistently, and have made judgments and estimates that are reasonable
and prudent so as to give true and faire view of the state of affairs
of the company as at 31st March, 2010 and of the Profit of the company
for the year ended on 31st March, 2010.
3. Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;
4. The annual accounts have been prepared on a going concern basis.
CORPORATE GOVERNANCE
A report on the Corporate Governance Code along with a certificate from
the Auditors of the Company regarding the compliance of conditions of
Corporate Governance as also the Management Discussion and Analysis
Report as stipulated under Clause 49 of the Listing Agreements are
annexed to this Report.
DEPOSITORY SYSTEM
Trading in Equity Shares of your Company is permitted in dematerialised
form in terms of notification issued by Securities and Exchange Board
of India [SEBi]. Your Company has entered into agreements with National
Securities Depository Ltd. [NSDL] & Central Depository Services
(India) Ltd. [CDSL] to enable shareholders to hold shares in
dematerialized form. Since dematerialization facilitates quick share
transfers and prevents forging of documents, those shareholders who
have not opted for this facility are advised to dematerialize their
shares with either of the Depositories.
SUBSIDIARY COMPANY
A statement under section 212 of the Companies Act, 1956 is enclosed.
PARTICULARS OF EMPLOYEES
The particulars required under section 217 (2A) of the Companies Act,
1956, read with the Companies (particulars of employees) Rule, 1975 are
not furnished since none of the employees of the Company are drawing
remuneration in excess of the limit laid down under the said
provisions.
CONSERVATION OF ENERGY.TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNING AND OUTGO
The details as required under the Companies (disclosure of particulars
in the Report of Board of Directors) Rules 1988, are set out in the
annexure forming part of this Report.
COMPLIANCE CERTIFICATE
Compliance Certificate obtained pursuant to provisions of Sec 383 A of
the Companies Act, 1956 from a Secretary in Whole Time practice, Mr. P.
V. Ramaswamy, in the prescribed form regarding the compliance of all
the provisions of the said Act, is enclosed herewith.
AUDITORS
Members are requested to appoint Auditors for the current year and to
authorize the Board of Directors to fix their remuneration. M/s.
Ostawal & Jain, Chartered Accountants, have furnished a certificate of
their eligibility for re-appointment under section 224 (1B) of the
Companies Act, 1956.
NOMINATION
Articles of Association of the Company were suitably amended to permit
nomination facility. Members of the Company are requested to avail
themselves of the nomination facility.
APPRECIATION
Your Directors acknowledge with gratitude the co-operation extended by
Bankers of the Company, Stock Exchange, SEBI, and other Government/
Semi Government Authorities.
Your Directors also wish hereby to place on record their appreciation
of the efficient and loyal services rendered by all the staff and
workmen of the company, without whose whole hearted efforts, the
overall satisfactory performance would not have been possible.
For and on behalf of the Board of Directors,
SPICE ISLANDS APPARELS LIMITED
PLACE : MUMBAI UMESH M. KATRE
DATE :21st MAY, 2010. (Chairman & Managing Director)