Mar 31, 2018
DIRECTORSâ REPORT:
Dear Shareholders,
The Directors have pleasure in presenting the Twenty Seventh Annual Report of the Company together with the Audited Balance Sheet as at 31st March, 2018 and the Profit and Loss Account for the year ended on that date.
Financial Results: (Standalone)
(Rs. in Lakhs)
Particulars |
Current Year Ended 31.03.2018 |
Previous Year Ended 31.03.2017 |
Revenue from operations |
9781.06 |
8156.12 |
Other Income |
17.01 |
29.30 |
Gross income |
9798.07 |
8185.42 |
Profit before Interest and Depreciation |
927.90 |
838.05 |
Finance Cost |
291.23 |
290.49 |
Profit after Finance Cost |
636.67 |
547.56 |
Depreciation |
150.57 |
178.91 |
Profit / (Loss) before Tax |
486.10 |
368.65 |
Provision for Tax |
157.59 |
144.02 |
Profit / (Loss) after Tax before extra-ordinary items |
328.51 |
224.63 |
Deferred Tax provision |
(9.96) |
13.58 |
Comprehensive income/Net of expenses |
(2.50) |
0.85 |
Net Profit |
335.97 |
211.90 |
Add: Brought forward from the previous year |
1264.14 |
1057.34 |
Adjustment on account of Ind AS requirements |
(3.37) |
(34.08) |
Amount available for appropriation |
1596.74 |
1235.16 |
Transfer to Securities Premium / ESOP |
60.59 |
28.98 |
Less Dividend Paid |
23.60 |
- |
Less Tax Paid on Dividend |
4.80 |
- |
Balance carried to Balance Sheet |
1628.93 |
1264.14 |
Dividend:
In order to balance the growth and developmental activities of the company as well as to fulfill the aspirations of the public stakeholders, the promoters decided to continue their support and again in writing waived their entitlement on the profit distribution in the form of dividend if any declared by the company for the year 2017-18. Accordingly the Board after considering all these aspects has recommended a dividend for the year under review at the rate of Rs.0.20 per Equity Share only on the portion of the paid up equity capital held by the public as on the record date as may be announced by the board in this regard. However no amount has been transferred to General reserve from the profits for the year 2017-18.
Operations:
The company in spite of difficult economic conditions has registered substantial improvement in the overall performance during the year under review in comparison to previous year. The company has achieved an increase of around 20% in the sales figures and a substantial increase of around 32% in the net profits before tax in comparison to previous year. During the year the Retail division has made satisfactory progress in terms of growth in the sales and also brought down the operational losses in comparison to the previous year. However the outlook of the Retail business is promising as the economic and market conditions is poised to stage significant growth in the current year. Overall the business sentiment was partially affected due to various factors particularly the implementation of GST from July 2017 since it is a new legislation and needs time to settle down with the procedures. Global economic conditions are also still remaining weak due to the factors like protectionist measures followed in different part of the world. The company had anticipated all these factors and taken all the necessary steps in advance to maintain the competitive position in the market. But in spite of these, the company had to absorb some amount of the losses generated by the Retail business activities. Further since the company is mainly catering to the domestic market and it has a strong presence in the domestic market, there is no negative slide in the sales growth. However for the improvement of retail division the company is taking all possible measures particularly giving major thrust in the development of product ranges in the licentiate segments like YouWeCan and FC Barcelona as well as in the development of the marketing network in other formats.
The company has formulated various measures to strengthen the operations of the Retail division to make it a more competitive business. The company is focusing more on the Large Format Stores (LFS) and on line sales network. Further the efforts are underway to add more licentiate brand under the licentiate product segment. This will eventually help the Retail Division to improve their margins substantially. Finally during the year the company has discharged all its obligations under EPCG License issued to the company in the past and accordingly successfully redeemed all the pending EPCG Licenses.
Issue of Fully Convertible Debentures:
During the year the company in order to promote the brand of the company and its subsidiaries through advertisement in print and non-print media in a major way, had entered into an agreement with M/s. H.T. Media Ltd a big media group known as Hindustan Times group. The company has also executed Subscription agreement and Media agreement with M/s. H.T. Media Ltd. Accordingly the company has issued three numbers of Fully Convertible Debentures of Rs.1.50 crores each aggregating to Rs.4.50 crores to the M/s.
H.T. Media Limited. Necessary approval was obtained from the shareholders in their Extra Ordinary General Meeting held on 6th March 2018. The company completed the allotment on 20th.March 2018 and the BSE Ltd has issued âIn Principle approvalâ for the same.
Amendment to the Articles of Association:
In order to issue Fully Convertible Debentures to M/s. H.T. Media Limited or any other securities in the future, the company has made necessary modification in the Articles of Association of the company. The modification was not a major one as the present clause 14(2) specifically mentions only âsharesâ instead of âSecuritiesâ which has a wider meaning and not restricted to shares only. Hence the same is suitably modified to include all other types of securities.
Export Sales:
During the year under review there was no exports sales reported by the company as the textile export market remained sluggish and the realizations were not attractive because of continued economic slowdown in almost all parts of the world. Apart from this, the unhealthy competition among the leading textile goods manufacturing countries continued to haunt the prospects for a healthy textile market and created a negative impact on the price segment of the textile items. Because of these factors, the company continued to remain focused maximum in the domestic market. However the company continued its efforts to draw the attention of
fabric buyers from Bangladesh and other neighboring countries. The company is anticipating a breakthrough in its efforts to explore the possibility of developing new markets in African and Far East countries. However ultimately the positive changes in the global economic conditions particularly in the US and European economies can only pave the way for the growth of the global textile market. The company is making best efforts to establish its identity with various reputed buyers to align with their brands in the overseas market to promote the exports in large volume.
In spite of the unfavorable trend in the global textile market, the company continues to take active participation in various international Fairs/exhibitions. Once the stability is brought in the global market, India can look forward to have a better market share than its competitors. Hence the company always looks forward to have better exports sales in terms of better unit value realization and volume. Besides this, the company has the capacity to make wide and better range of products particularly in printed and embroidery varieties and this will certainly help the company in the long run to increase the exports business both in volume and value.
Licentiate Rights:
The company has at present licentiate rights with FC Barcelona and Manchester City. The company has developed and produced wide range of garments under licentiate rights and the response from the market is very encouraging. These brand LOGOS are embossed on the garments under licentiate rights acquired for India. The company is now a recognized name in this particular segment of garments. Based on the past experience and also taking into account the strengths and weakness of these business models, the company proposes as a well thought strategy to add more such licentiate arrangements. This will ensure that there are always some effective brands under its umbrella throughout the period to ensure that even if some brands crosses its shell life, there are other brands to take the sales business forward without affecting the growth momentum of the company. Further the association with âYouWeCanâ backed by celebrity cricketer Mr. Yuvraj Singh is also growing very well and various products developed during the last few months will certainly give a big boost to the company in the sales. The company is anticipating a good outcome from this venture in the next few years. The company is also developing other models on similar lines to promote the sales with better value addition.
Joint Venture:
The company has entered into a joint venture with another company M/s. Project Anushka Sharma Lifestyles Pvt. Ltd. a company promoted by celebrity actor Mrs. Anushka Sharma and her family. The object of the joint venture is to design, develop and manufacture of various ladies fashion and western type outfits which will be sold through various large retail format stores and on line stores. The company is incorporated on 19th.September 2017 as a private limited company in the name of M/s. SAA & Suditi Retail Pvt. Ltd and the ownership of the company is on 50:50 partnerships where both the promoters contributed equally to the capital. The company commenced its sales business activities after the launch of its products on October 2017. The company has nominated two members on the board of the Joint venture Company and equal number of members is nominated by other company also. The company has achieved net sales of around Rs.3 crores with net loss from the business of Rs.34 lakhs. The financial results are
only for the part of the year operations and since the company is backed by celebrity actor, the company is not anticipating any difficulty in achieving the projected growth for the year 2018-19. Expansion:
As indicated in the earlier years the management the company has not undertaken any new major capital projects during the year under review. Further, there is no major expansion plan in the current year except some addition of balancing equipmentâs and replacement of old machineries and equipmentâs. Similarly for the Retail division also the company plans for some expansion and the same will be managed without any additional investment of capital nature.
Human Resources & Industrial Relations:
Human resources development plays a crucial role in the development of any organization. It consists of attraction, retention and development of talent in a systematic manner to fulfill the requirements of the organization. The company follows various programs to provide focused people attention. The emphasis is mainly on the promotion of talent internally through job rotation and job enlargement. The Industrial relations with the employees at the Companyâs plant at MIDC, TTC Industrial Area, Pawne Village; Navi Mumbai and in the other locations continue to remain healthy and cordial.
Share capital:
The shareholders had approved the special resolution to raise the Authorized capital from Rs.18 crores to Rs.25 crores. Accordingly the company has completed the compliance process and the authorized capital of the company stands today at Rs.25 crores. Further during the current year, the company has issued 218790 shares to employees under SUDITI ESOP PLAN 2011 in the month of April 2018 and accordingly the subscribed, issued and paid-up capital has increased from Rs.16.67 Crores to Rs.16.98 Crores. Apart from this, during the year under review, the company has also issued Fully Convertible Debentures which will be converted into equity shares at a later date.
Suditi Employee Stock option Plan 2011 (Suditi ESOP 2011):
The company had made the first grant of options to the employees in the year 2013 under the Suditi Employee Stock Option Plan 2011. Apart from this, the company has further granted additional 13000 no. of options in the year February 2017. In addition to this the company has also made another special grant of 111605 options in the month of February 2017 on the eve of Silver Jubilee year celebrations to some selected employees with long tenure as well as good record of service and contributed significantly towards the growth of the organization. Each option is equal to one share at par (Rs.10/- each) being the price fixed for exercising the right. To facilitate the employees to exercise their right to buy the options granted to them, the Company had earlier divided the total options granted on certain prescribed basis over a period of 5 years. However the same system is now discontinued in view of modification approved by the members in the Suditi Employee Stock Option Plan 2011 vide special resolution in the 25thAnnual General Meeting. The share arising on exercise of the options shall be subject to a lock-in-period as may be decided by the board/ committee at the time of allotment. The entire parts of the earlier grant has been vested till the date of 31st March 2018 barring 9600 options. The revised details are as follows:
Grant no. |
Granted |
Accepted |
Rejected |
Vested |
Exercised |
Lapsed |
Balance |
||||||
No of Employees |
Total options (Nos.) |
No of Employees |
Total options (Nos.) |
No of Employees |
Total options (Nos.) |
Up to the Fourth part of Grant |
vested |
unvested |
|||||
First |
83 |
350800 |
20 |
253200 |
63 |
97600 |
133670 |
88930 |
47985 |
106685 |
9600 |
||
Second |
20 |
13000 |
20 |
13000 |
0 |
0 |
0 |
0 |
0 |
13000 |
0 |
||
Silver Jubilee |
38 |
111605 |
38 |
111605 |
0 |
0 |
0 |
0 |
0 |
111605 |
0 |
The disclosure of the details is as follows:-
(a) Options granted & accepted: 377805
(b) The pricing formula: At par
(c) Options vested: 231290
(d) Options exercised: During the year under review, no employees have exercised their options under the SUDITI ESOP PLAN 2011.
(e) As there are no options exercised during the year under review no shares were allotted.
(f) Options rejected and lapsed: 145585 (consists of 97600 options rejected and 47985 options lapsed)
(g) Variation of terms of options: NA
(h) Money realized by exercise of options: Nil
(i) Total number of options in force: 240890
(j) Employee wise details of options granted to (Excluding the options already exercised):
(i) Senior managerial personnel: 178575 (includes 34250 options granted to Company Secretary & V.P. (F) and no Director is granted any options under Suditi ESOP Plan 2011).
(ii) Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year: Nil
(iii) Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant: Nil
(k) Diluted Earnings per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 âEarnings per Shareâ: Rs.1.91.
(l) Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options, shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed: The impact on account of this will reduce the profits by Rs.69,83,735/- and accordingly on proforma basis the companyâs basic and diluted earnings would have been Rs.1.59 and Rs.1.51 respectively:
(m) Weighted-average exercise prices and weighted-average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock: NA (n) A description of the method and significant assumptions used during the year to estimate the fair values of options, including the following weighted-average information:
(i) Risk-free interest rate: 7.42%
(ii) Expected life: 3 years
(iii) Expected volatility: 3.15%
(iv) Expected dividend: Rs.0.50 per share
(v) The price of the underlying share in market at the time of option granted: 1st grand Rs.7.68 and the second grand Rs.68.40.
Particulars of Employees:
Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, details are stated separately in the Managerial Remuneration.
Meetings:
A calendar of meetings is prepared and circulated in advance to the Directors. During the year seven Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
Board Evaluation:
Pursuant to the provisions of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Independent Directors have reviewed the performance of all the Directors including their own performance, as well as the evaluation of the working of its Audit committee, Nomination & Remuneration committee and other Compliance Committees. The details are provided in the Corporate Governance Report.
Declaration by an Independent Director(s) and reappointment, if any:
A declaration by an Independent Director(s) that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 has been submitted to the Board in the first Board Meeting for the year 2018-19. An independent director shall hold office for a term up to five consecutive years on the Board of a Company, but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and making disclosure of such appointment in the Boardâs report.
Remuneration Policy:
The Board has, on the recommendation of the Nomination & Remuneration Committee follows a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.
Managerial Remuneration:
A) Details of the ratio of the remuneration of each director to the median employeeâs remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. (Enclosed as Annexure II)
B) Details of the every employee of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The statement of the name of the top ten employees in terms of remuneration drawn is given in Annexure II). Further the statement showing the requisite information pursuant to the Companies (Appointment of Managerial Personnel) Rules
2014 is not annexed herewith as there are no employees covered by the rule (2)(i) (ii) & (iii).
C) Any director who is in receipt of any commission from the company and who is a Managing Director or Whole-time Director of the Company shall receive any remuneration or commission from any Holding Company or Subsidiary Company of such Company subject to its disclosure by the Company in the Boardâs Report. Nil
D) There are no disclosures to be made as the directors(except the Chairman & Managing Director/whole time Director), are not in receipt of any remuneration or stock options other than sitting fees and reimbursement of expenses incurred for attending the meeting. The details are furnished separately in the corporate governance report.
Details of Subsidiary/Joint Ventures/Associate Companies:
The company has incorporated two subsidiaries in the month of March 2015. One of the subsidiaries M/s. Suditi Design Studio Limited has commenced sales business activities while the other subsidiary M/s. Suditi Sports Apparel Limited is yet to commence their sales business operations. Further joint venture company M/ s. SAA & Suditi Retail Pvt Ltd. has also commenced its commercial business activities during the year under review. The details pursuant to sub-section (3) of section 129 of the Act (AOC-1), containing the salient feature of the financial statement of a companyâs subsidiary or subsidiaries, associate company or companies and joint venture or ventures etc are annexed herewith in the Notes of the Accounts (Point 49). The Company has also presented the Consolidated Financial Results along with the Standalone Financial Results of the Company. The Consolidated Financial Results are the combined performance of the Company along with its Subsidiaries and also taking into account of the performance of the joint venture company. The details of the same are provided along with Notes to Accounts.
Summary of Sales:
(Rs. in Lakhs)
Particulars |
Suditi Industries Limited |
Suditi Design Studio Limited (Subsidiary) |
Suditi Sports Apparel Limited (Subsidiary) |
SAA & Suditi Retail Pvt. Ltd. |
Consolidated |
|
Sales |
9781.06 |
685.40 |
306.39 |
10383.97* |
||
Profit |
335.97 |
(17.64) |
(0.49) |
(34.17) |
283.67** |
* Consolidated sales figures are arrived net of Inter Company & Joint Venture company sales.
** The Consolidated profit figures include minority interest.
The growth in the sales business activities of the subsidiaries has a direct impact on the performance of the holding company as they also sources their part of the material requirement from the Company at the best prevailing market rate on armâs length basis. In addition to this it also increases the overall profitability of the holding company besides providing value addition and brand value to the Company in the Market. It enables the Company to ensure focused attention to the certain market segment which otherwise not catered or explored by the Company in the regular course of business.
Deposits:
The Company has not accepted any deposits within the meaning of Section 73 & 76 of Companies Act, 2013 and the rules made there under.
Energy, Technology and Foreign Exchange:
The particulars relating to conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo as required under Section 134 (3) (m) of the Companies Act, 2013 is given in the Annexure I forming part of this report.
Directors & the Key Managerial Personnel:
In accordance with the provisions of section 152 of The Companies Act, 2013; Chairman & Managing Director Shri. Pawan Agarwal retires by rotation in the forthcoming Annual General Meeting and being eligible offer himself for reappointment. During the year the company has inducted Shri. Rajagopal Raja Chinraj as additional Director and also appointed him as Wholetime Director subject to the approval of the members in the forthcoming 27th. Annual General Meeting and special resolution to this effect is proposed in the Notice calling 27th. Annual General Meeting. In order to maintain the composition of the Board, the company has proposed the appointment of Smt. Sanjula Sanghai as an independent director and the resolution to this effect is included in the notice calling the 27th.Annual General Meeting. Further the company would be inducting a Chief Financial Officer (CFO) internally at the appropriate time from the existing available resources to take over the functions of CFO which is now held by the Chairman & Managing Director.
Directorsâ Responsibility Statement:
The Directors hereby confirm: -
i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii) That the Directors have selected such accounting policies 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 at the end of the financial year and of the profit of the Company for that period;
iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) That the Directors have prepared the annual accounts on a âgoing concernâ basis;
v) That the directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and;
vi) That the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively;
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Companyâs internal financial controls were adequate and effective during FY 2017-18.
Corporate Governance:
A separate section on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Regulation 34 & other applicable Regulations of the SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 (Listing Regulations), form part of the Annual Report.
Cost Audit:
In view of the new Companies (Cost Records & Audit) Rules 2014 and amendment thereof, the company is now out of the purview of the Cost Audit Report Rules.
Auditors:
Pursuant to the provisions of section 139 of the Act and the rules framed thereafter, M/s. Chaturvedi & Partners, Chartered Accountants, were appointed as statutory auditors of the Company for a period of 5 years from the conclusion of the Twenty Sixth Annual General Meeting to till the conclusion of the Thirty First Annual General Meeting, subject to ratification of their appointment at every Annual General Meeting. Accordingly necessary resolution to this effect is proposed in the notice calling 27th.Annual General Meeting for the approval of the members which otherwise is not mandatory in view of the amendments to the Companies Act 2013.
Secretarial Audit Report:
In terms of Section 204 of the Companies Act 2013 and the rules made there under, Shri. Shivhari Jalan Practicing Company Secretary had been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure separately to this report. The report is self-explanatory and does not call for any further comment other than the explanation given on the appointment of Chief Financial Officer.
Internal Audit & Controls:
The Company had appointed M/s. Ram Agarwal & Associates as the Internal Auditor to carry out the internal audit functions including the task of suggesting and implementing the recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations. The term of the present Internal Auditors expired after the close of the financial year 2017-18.
Vigil Mechanism:
In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been made available to each and every stakeholder and the Company has designated two senior officials as Vigilance Officers to support the Vigilance Mechanism functions.
Risk management policy:
A statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, that in the opinion of the Board may threaten the existence of the company as given separately in the Corporate Governance Report.
Extract of Annual Return:
As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 forms part of this Annual Report as ANNEXURE III.
Material changes and commitments, if any, to report affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report:
There are no such material changes and commitments to report under this head, other than the issue of 218790 equity shares by the Board on exercise of options by the Employees under SUDITI ESOP 2011.
Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companyâs operations in future:
There are no such significant and material orders passed by any regulators to report under this head.
Details in respect of adequacy of internal financial controls with reference to the Financial Statements:
The company has set up internal control mechanism to ensure that the financial statements prepared are true, fair and transparent. The company has an internal audit mechanism apart from Management committee to ensure that all the financial transactions executed are in compliance with applicable laws and regulations and in line with the budget plans. Any variations or deviations are appropriately dealt with by the internal Audit department as well as by the Audit committee. The Company had appointed an independent Chartered Accountant Firm to improve and strengthen further the existing standard operating procedures and same is implemented in stages. According to the management the present mechanism followed in the company is adequate and effective. The details are also stated in the Management discussion and analysis report annexed herewith and form part of this report.
Particulars of loans, guarantees or investments under section 186 of the companies Act:
There are no loans/guarantee or security provided during the year under review. The details of investments made till date are as follows: - Details of Investments:-
Sl No |
Date of investment |
Details of Investee |
Amount |
Purpose for which the proceeds from investment is proposed to be utilized by the recipient |
Date of BR |
Date of SR (if reqd) |
Expected rate of return |
1 |
01/04/15 |
Suditi Sports Apparel Ltd. |
4 lakhs |
Business activities |
16/01/2015 |
NA |
10% |
2 |
01/04/15 14/03/16 |
Suditi Design Suditi Design âdo â |
4 lakhs 82 Lakhs |
Business activity Development of Business activity |
16/01/2015 11/02/2016 |
NA NA |
10% |
3 |
05/10/17 |
SAA & SUDITI Retail Pvt. Ltd. |
5 lakhs |
Business activities |
05/10/2017 |
NA |
10% |
Particulars of contracts or arrangements with related parties:
The particulars of contract or arrangements entered into by the Company with related parties at armâs length basis referred to in sub-section (1) of section 188 of the Companies Act, 2013 is disclosed in Form No. AOC-2 as Annexure IV Obligation of company under the âSexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act 2013:
The company has a separate internal compliance committee under the âSexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.â The Internal Complaints Committee is empowered to look into complaints relating to sexual harassment at work place of any women employee. Accordingly the Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and the Committee ensures that the said policy is properly implemented all over the company. During the year Company has not received any complaint of harassment.
Corporate Social Responsibility (CSR):
The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is not applicable to the company.
Transfer of amounts to Investor Education and Protection Fund:
The Company does not have any funds lying unpaid or unclaimed for a period of seven years in respect of unclaimed/unpaid dividends. Therefore there are no funds on this account which are required to be transferred to Investor Education and Protection Fund (IEPF). Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM, with the Ministry of Corporate Affairs.
Listing with Stock Exchange:
The Company confirms that it has paid the Annual Listing Fees for the year 2018-2019 to the Bombay Stock Exchange Limited where the Companyâs Shares are listed. Further the proposal to list the securities of the company with National Stock Exchange Ltd will be undertaken at the appropriate time later.
Appreciation:
Your Company and its Directors wish to place on record their sincere appreciation for the support and assistance extended by different Central and State Government Departments and Agencies, Banks and Financial Institutions, Insurance companies, Customers and Vendors. Your Directors are thankful to the esteemed shareholders for their continued support and confidence reposed in the company and its management. Your Directors also wish to place on record their deep sense of appreciation to all the employees of the Company for their outstanding and dedicated contribution made towards the growth of the Company.
For and on behalf of the Board of Directors
Place: Mumbai PAWAN AGARWAL
Date: 08.08.2018 CHAIRMAN & MANAGING DIRECTOR
Mar 31, 2016
DIRECTORSâ REPORT:
Dear Shareholders,
The Directors have pleasure in presenting the Twenty Fifth Annual Report of the Company together with the Audited Balance Sheet as at 31st March, 2016 and the Profit and Loss Account for the year ended on that date.
Financial Results:
(Rs. in Lakhs)
Particulars |
Current Year Ended 31.03.2016 |
Previous Year Ended 31.03.2015 |
Export Sales |
10.15 |
29.99 |
Local Sales |
8044.09 |
6960.00 |
Other Income |
56.71 |
57.18 |
Gross income |
8110.95 |
7047.17 |
Profit before Interest and Depreciation |
736.05 |
565.24 |
Finance Cost |
298.55 |
250.24 |
Profit after Finance Cost |
437.50 |
315.00 |
Depreciation |
173.90 |
194.27 |
Profit / (Loss) before Tax |
263.60 |
120.73 |
Provision for Tax |
222.43 |
23.05 |
Profit / (Loss) after Tax before extra ordinary items |
41.17 |
97.68 |
Extra Ordinary Items (Net) |
105.50 |
(3.56) |
Net Profit |
146.67 |
97.68 |
Add: Brought forward from the previous year |
901.23 |
832.27 |
Transfer to General Reserve |
- |
- |
Amount available for appropriation |
1047.90 |
926.39 |
Proposed Dividend |
29.35 |
20.97 |
Tax on Proposed Dividend |
6.06 |
4.19 |
Balance carried to Balance Sheet |
1012.49 |
901.23 |
Dividend:
In order to balance the growth and developmental activities of the company as well as to fulfill the aspirations of the public stakeholders, the promoters have in writing waived their entitlement on the profit distribution in the form of dividend if any declared by the company for the year 2015-16. Accordingly the Board after considering all these aspects has recommended a dividend for the year under review at the rate of Rs.0.70 per Equity Share only on the portion of the paid up equity capital held by the public as on 31st March 2016. No amount has been transferred to General reserve from the profits for the year 2015-16.
Operations:
The company has registered substantial improvement in the overall performance during the year under review in comparison to previous year. The company has achieved an increase of over 15% in the sales figures and a substantial increase of around 118% in the net profits before tax in comparison to previous year. During the year the Retail division has given a significant contribution towards the growth in the sales and overall profit of the company in comparison to the previous year. However the performance of the Retail division separately as a division needs to be improved further to bring the same on anticipated levels. Consequently the company had to absorb some amount of the losses generated by the Retail business activities. Because of this the overall profit recorded by the company is lower than the projections for the year under review. The improved economic conditions in the country augur well for the textile sector and in general there is optimism prevailing all over the country, even though the situations continued to remain grim in the other part of the world. Hence the export of textile goods still needs to gain momentum which again depends largely on global factors. Since the company has a strong presence in the domestic market there is no negative slide in the sales growth. However for the retail division the company needs to give further thrust in the development of product ranges in the licentiate items as well as the marketing network.
The company continued to take necessary measures to strengthen the operations of the Retail division to make it a profitable business. Many unviable outlets selectively chosen in various formats were either discontinued or converted into own stores to bring better management in the operation. The company is now giving major thrust to expand the business through on line sales network like Flip kart, Jabbong, Myntra etc. Further the company is also using other social network to expand the reach of the products to the actual users as well as to increase the sales network through other media like Television channels and other social media. Finally regarding the pending EPCG License issue, the company is actively pursuing the case with DGFT office to resolve the matter at the earliest.
Export Sales:
The textile export market remained sluggish throughout the year because of economic slowdown in almost all parts of the world. Apart from this, the preferential trade regime followed by some leading importers of textile goods, has a negative impact on the growth of export trade in the world. Hence the export performance for the year is not as per the estimates made by the company. Because of these factors, the company continued to remain focused maximum in the local market. The negligible exports were mainly sent in the form of finished fabrics to neighboring countries like Bangladesh. The company is now making all-round efforts to increase the volume of fabric shipments to Bangladesh which again depends upon the global economic conditions as Bangladesh mainly caters to the export market. The company still pursue with some export promotion agencies to explore the possibility of developing new markets in African and Far East countries. However much depends upon the positive changes in the global economic conditions particularly in the US and European economies. The company still pursues its objective to achieve the target of exporting 50% of its capacity to the overseas customers with better value addition. Similarly efforts are made with various reputed buyers to align with their brands in the overseas market to promote the exports in large volume.
The company also takes initiatives to develop export potential by taking active participation in various international Fairs/exhibitions as well as selling garments by using the brand and logos of some important sports clubs/events. The company has started selling garments in the local market under licentiate arrangements by executing agreements with some reputed football clubs in Europe. In the future the company may be able to enhance the scope of the sales through these arrangements in the other part of the world. Once the present turmoil in the global market is settled, India can look forward to have a better market share than other competitors in the global markets. Hence the prospects for the company are good in terms of better unit value realization and volume. Besides this, the company has developed capability to make better product range particularly in printed and embroidery varieties. In view of these, company continues to follow its plans to increase the exports business in sizable volume in the future. New Licentiate Rights:
The company has developed and produced wide range of garments under licentiate rights executed with globally well known football clubs like FC Barcelona, Manchester City, and Real Madrid. These brand LOGOS are embossed on the garments under licentiate rights acquired for India. The overall response is very good and encouraging. The company has now acquired adequate experience and expertise in this particular style of production. Hence the company has now associated with âYouWeCanâ backed by celebrity cricketer Mr. Yuvraj Singh to create a clothing line under YWC label. For the company this is the first such venture and anticipates a good outcome from this venture. The company is now also exploring other avenues in the similar lines to promote the sales with better value addition.
Expansion:
The management continues to maintain the plan adopted earlier in respect of expansion plan and accordingly the company has not undertaken any new projects during the year under review. Further in the prevailing economic conditions, there will not be any major expansion plan in the current year some except addition of balancing equipments and replacement of old machineries and equipments. The remaining portion of the funds available for retail expansion plan as proposed in the Rights issue offer documents is utilized completely and hereafter any utilization of the funds for the Retail expansion will have to be financed by the company from its own sources.
Human Resources & Industrial Relations:
Human resources are one of the most important assets for the company. Efforts are made systematically in attraction, retention and development of talent as an ongoing process. A number of programs are made that provide focused people attention. The thrust is on the promotion of talent internally through job rotation and job enlargement. The Industrial relations with the employees at the Companyâs plant at MIDC, TTC Industrial Area, Pawne Village; Navi Mumbai and in the other locations continue to remain healthy and cordial.
Share capital:
During the year under review, the company has not issued any class of shares like shares with preferential rights or sweat equity shares and accordingly there is no change in the Subscribed and Issued capital. However after the closing of the financial year 2015-16, the company in the month of May 2016, has issued 88930 shares to employees under SUDITI ESOP PLAN 2011. Suditi Employee Stock option Plan 2011 (Suditi ESOP 2011): The company had granted options to the employees in the year
2013 under the Suditi Employee Stock Option Plan 2011. Each option is equal to one share at par (Rs.10/- each) being the price fixed for exercising the right. To facilitate the employees to exercise their right to buy the options granted to them, the Company has divided the total options granted on certain prescribed basis over a period of 5 years. The share arising on exercise of the options shall be subject to a lock in period of 1 year from allotment. The three parts of the grant has been vested till the date of 31st March
2016. The revised details are as follows:
Granted |
Accepted |
Rejected |
Vested |
|||
No of Employees |
Total options (Nos.) |
No of Employees |
Total options (Nos.) |
No of Employees (Nos.) |
Total options |
Up to third part part of Grant |
83 |
350800 |
20 |
253200 |
63 |
97600 |
103000 |
The disclosure of the details is as follows:-
(a) Options granted & accepted; 253200
(b) The pricing formula: At par
(c) Options vested: 103000
(d) Options exercised: During the year under review, no employee has exercised their options under the Scheme. However during the current year in the month of May 2016, 12 employees have exercised their options under the SUDITI ESOP PLAN 2011.
(e) The total number of shares arising as a result of exercise of option: During the year under review, there were no shares allotted as there were no exercise of options. During the current year in the month of May 2016, the board allotted 88930 shares on the recommendation of the Compensation Committee for 12 employees on exercise their options under SUDITI ESOP PLAN 2011.
(f) Options lapsed: 97600
(g) Variation of terms of options: NA
(h) Money realized by exercise of options: Nil
(i) Total number of options in force: 253200 (j) Employee wise details of options granted to:
(i) Senior managerial personnel: 243500 (includes 35000 options granted to Company Secretary & V.P. (F) and no Director is granted any options under Suditi ESOP Plan 2011).
(ii) Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year: Nil
(iii) identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant: Nil
(i) Diluted Earnings per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 âEarnings Per Shareâ]: No options are exercised till date.
(j) Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognized if it had used the fair value of the options, shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed: The impact on account of this will reduce the profits by Rs.1574753/- and accordingly on proforma basis the companyâs basic and diluted earnings would have been Rs.0.79 and Rs.0.78 respectively:
(k) Weighted-average exercise prices and weighted-average fair values of options shall be disclosed separately for options whose exercise price either equals or exceeds or is less than the market price of the stock: NA (l) A description of the method and significant assumptions used during the year to estimate the fair values of options, including the following weighted-average information:
(i) Risk-free interest rate: 6.31%
(ii) Expected life: 5 years
(iii) Expected volatility: 5.59%
(iv) Expected dividend: Rs.0.70 per share
(v) The price of the underlying share in market at the time of option granted: Rs.7.68
Particulars of Employees
Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, details are stated separately in the Managerial Remuneration.
Meetings:
A calendar of Meetings is prepared and circulated in advance to the Directors. During the year four Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
Board Evaluation:
Pursuant to the provisions of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Independent Directors have reviewed the performance of all the Directors including their own performance, as well as the evaluation of the working of its Audit committee, Nomination & Remuneration committee and other Compliance Committees. The details are provided in the Corporate Governance Report.
Declaration by an Independent Director(s) and reappointment, if any:
A declaration by an Independent Director(s) that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 has been submitted to the Board in the first Board Meeting for the year 2016-17. An independent director shall hold office for a term up to five consecutive years on the Board of a Company, but shall be eligible for reappointment for next five years on passing of a special resolution by the Company and disclosure of such appointment in the Boardâs report.
Remuneration Policy:
The Board has, on the recommendation of the Nomination & Remuneration Committee follows a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.
Managerial Remuneration:
A) Details of the ratio of the remuneration of each director to the median employeeâs remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. (Enclosed as Annexure II).
B) Details of the every employee of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The statement of the name of the top ten employees of remuneration drawn is given in Annexure II). Further the statement showing the requisite information pursuant to the Companies (Appointment of Managerial Personnel) Rules 2014 is not annexed herewith as there are no employees covered by the rule (2) (i)(ii) & (iii).
C) Any director who is in receipt of any commission from the company and who is a Managing Director or Whole-time Director of the Company shall receive any remuneration or commission from any Holding Company or Subsidiary Company of such Company subject to its disclosure by the Company in the Boardâs Report. Nil
D) There are no disclosures to be made as the directors except the Chairman & Managing Director, are not in receipt of any remuneration or stock options other than sitting fees and reimbursement of expenses incurred for attending the meeting. The details are furnished separately in the corporate governance report.
Details of Subsidiary/Joint Ventures/Associate Companies: The company has incorporated two subsidiaries in the month of March 2015 and the subsidiaries have commenced their business from April 2015. One of the subsidiaries M/s. Suditi Design Studio Limited has commenced sales business activities while the other subsidiary M/s. Suditi Sports Apparel Limited is yet to commence their sales business operations. The details pursuant to sub-section
(3) of section 129 of the Act, containing the salient feature of the financial statement of a companyâs subsidiary or subsidiaries, associate company or companies and joint venture or ventures etc are annexed herewith. The Company has also presented the Consolidated Financial Results along with the Standalone Financial Results of the Company for the first time. The Consolidated Financial Results are the combined performance of the Company along with its Subsidiaries and the details of the same are provided along with Notes to Accounts.
Summary of Sales: (Rs. in Lakhs)
Particulars |
Suditi Industries Limited |
Suditi Design Studio Limited (Subsidiary) |
Suditi Sports Apparel Limited (Subsidiary) |
Consolidated |
Sales |
8110.95 |
524.70 |
8565.89 |
|
Profit |
146.67 |
(16.88) |
129.99 |
The growth in the Business activities of the Subsidiaries will help the Company to increase the sales volume of the Company as the Subsidiary also sources their part of the material requirement from the Company at the best prevailing market rate on arms length basis. In addition to this it also provides value addition to the Company in the Market apart from building brand value. It enables the Company to ensure focused attention to the certain market segment which otherwise not catered or explored by the Company.
Deposits:
The Company has not accepted any deposits within the meaning of Section 73 & 76 of Companies Act, 2013 and the rules made there under.
Energy, Technology and Foreign Exchange:
The particulars relating to conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo as required under Section 134 (3) (m) of the Companies Act, 2013 is given in the Annexure I forming part of this report.
Directors & the Key Managerial Personnel:
In accordance with the provisions of section 152 of The Companies Act, 2013, Smt. Sanjula Sanghai retire by rotation at the forthcoming Annual general meeting and being eligible offer herself for reappointment. Further the company is in the process of appointing a Chief Financial Officer (CFO) internally to take over the functions of CFO which hitherto was held by Chairman & Managing Director.
Directorsâ Responsibility Statement:
The Directors hereby confirm: -
i) That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii) That the Directors have selected such accounting policies 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 at the end of the financial year and of the profit and loss of the Company for that period;
iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) That the Directors have prepared the annual accounts on a âgoing concernâ basis;
v) That the directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and;
vi) That the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and were operating effectively;
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and external consultants, including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by management and the relevant board committees, including the audit committee, the board is of the opinion that the Company''s internal financial controls were adequate and effective during FY 2015-16.
Corporate Governance:
A separate section on Corporate Governance and a certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Regulation 34 & other applicable Regulations of the SEBI (Listing Obligations
& Disclosure Requirements) Regulations 2015, form part of the Annual Report.
Cost Audit:
In view of the new Companies (Cost Records & Audit) Rules 2014 and amendment thereof, the company is now out of the purview of the Cost Audit Report Rules. Hence the company has not appointed any Cost Auditor for the year 2016-17.
Auditors:
Pursuant to the provisions of section 139 of the Act and the rules framed thereafter, M/s. Chaturvedi & Co, Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the twenty third annual general meeting (AGM) of the Company held on September 12, 2014 till the conclusion of the Twenty Sixth AGM to be held in the year 2017, subject to ratification of their appointment at every AGM.
Secretarial Audit Report:
In terms of Section 204 of the Companies Act 2013 and the rules made there under, Shri. Shivhari Jalan Practicing Company Secretary had been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure separately to this report. The report is self-explanatory and does not call for any further comment other than the explanation given on the appointment of Chief Financial Officer.
Internal Audit & Controls:
The Company had engaged SGCO & Co as its Internal Auditor for part of the period. Subsequently, due to their non availability to continue with the Internal Audit assignment of the Company, Board has appointed M/s. Ram Agarwal & Associates as the internal Auditor to continue the task of suggesting and implementing the recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.
Vigil Mechanism:
In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been made available to each and every stakeholder and the Company has designated two senior officials as Vigilance Officers to support the Vigilance Mechanism functions.
Risk management policy:
A statement indicating development and implementation of a risk management policy for the Company including identification therein of elements of risk, if any, that in the opinion of the Board may threaten the existence of the company as given separately in the Corporate Governance Report.
Extract of Annual Return:
As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 forms part of this Annual Report as ANNEXURE III.
Material changes and commitments, if any, to report affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report:
There are no such material changes and commitments to report under this head other than the association with âYouWeCanâ which is explained in detail in the report under the head New Licentiate Rights.
Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companyâs operations in future:
There are no such significant and material orders passed by any regulators to report under this head.
Details in respect of adequacy of internal financial controls with reference to the Financial Statements:
The company has set up vigilant internal control mechanism to ensure that the financial statements prepared are true, fair and transparent. The company has set up strong internal audit department apart from Management committee to ensure that all the financial transactions executed are in compliance with applicable laws and regulations and in line with the budget plans. Any variations or deviations are appropriately dealt with by the internal Audit department as well as by the Audit committee. The Company has appointed an independent Chartered Accountant Firm to improve and strengthen further the existing standard operating procedures and same is implemented in stages. According to the management the present mechanism followed in the company is adequate and effective. The details are also stated in the Management discussion and analysis report annexed herewith and form part of this report.
Particulars of loans, guarantees or investments under section 186 of the companies Act:
There are no loans/guarantee or security provided during the year under review. The details of investments made are as follows:-Details of Investments:-
Sl |
Date of |
Details of |
Amount |
Purpose for |
Date of |
Date of |
Expected |
No |
investment |
Investee |
which the proceeds from investment is proposed to be utilized by the recipient |
BR |
SR (if reqd) |
rate of return |
|
1 |
01/04/15 |
Suditi Sports Apparel Ltd. |
4 lakhs |
Business activities |
16/01/2015 |
NA |
10% |
2 |
01/04/15 |
Suditi Design Studio Ltd. |
4 lakhs |
Business activity |
16/01/2015 |
NA |
10% |
14/03/16 |
â do â |
82 Lakhs |
Development of Business activity |
11/02/2016 |
NA |
Particulars of contracts or arrangements with related parties:
The particulars of contract or arrangements entered into by the Company with related parties at armâs length basis referred to in sub-section (1) of section 188 of the Companies Act, 2013 is disclosed in Form No. AOC-2 as Annexure IV Obligation of company under the âSexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act 2013:
In order to prevent sexual harassment of women at work place, the company has set up a separate internal compliance committee under the âSexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.â Under the said Act the Internal Complaints Committee is empowered to look into complaints relating to sexual harassment at work place of any women employee. Accordingly the Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and the Committee is authorized to implement the said policy all over the company. During the year Company has not received any complaint of harassment.
Corporate Social Responsibility (CSR):
The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is not applicable to the company. Transfer of amounts to Investor Education and Protection Fund:
The Company does not have any funds lying unpaid or unclaimed for a period of seven years in respect of unclaimed/unpaid dividends. Therefore there are no funds on this account which are required to be transferred to Investor Education and Protection Fund (IEPF). Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has already filed the necessary form and uploaded the details of unpaid and unclaimed amounts lying with the Company, as on the date of last AGM, with the Ministry of Corporate Affairs. Listing with Stock Exchange:
The Company confirms that it has paid the Annual Listing Fees for the year 2016-2017 to the Bombay Stock Exchange limited where the Companyâs Shares are listed.
Appreciation:
Your Company and its Directors wish to place on record their sincere appreciation for the support and assistance extended by different Central and State Government Departments and Agencies, Banks and Financial Institutions, Insurance companies, Customers and Vendors. Your Directors are thankful to the esteemed shareholders for their continued support and confidence reposed in the company and its management. Your Directors also wish to place on record their deep sense of appreciation to all the employees of the Company for their outstanding contribution towards the operations of the Company.
For and on behalf of the Board of Directors
Place: Mumbai PAWAN AGARWAL
Date: 08.08.2016 CHAIRMAN & MANAGING DIRECTOR
Mar 31, 2015
The Directors have pleasure in presenting the Twenty Fourth Annual
Report of the Company together with the Audited Balance Sheet as at
31st March, 2015 and the Profit and Loss Account for the year ended on
that date.
Financial Results: (Rs. in Lakhs)
Particulars Current Previous
Year Ended Year Ended
31.03.2015 31.03.2014
Export Sales 29.99 40.83
Local Sales 6960.00 6166.55
Other Income 57.18 23.61
Gross income 7047.17 6230.99
Profit before Interest 565.24 429.05
and Depreciation
Finance Cost 250.24 213.34
Profit after Finance Cost 315.00 215.71
Depreciation 194.27 119.89
Profit / (Loss) before Tax 120.73 95.82
Provision for Tax 23.05 18.50
Profit / (Loss) after
Tax before 97.68 77.32
extra ordinary income
Extra Ordinary Items* (3.56) -
Net Profit 94.12 77.32
Add: Brought forward from the 832.27 779.93
previous year
Transfer to General Reserve - -
Amount available for
appropriation 926.39 857.25
Proposed Dividend 20.97 21.35
Tax on Proposed Dividend 4.19 3.63
Balance carried to Balance
Sheet 901.23 832.27
* Refer appropriations in the Reserves and Surplus
Dividend:
In order to promote the growth of the company as well as to fulfill the
aspirations of the stakeholders, the promoters have in writing waived
their entitlement on the profit distribution in the form of dividend if
any declared by the company for the year 2014-15. Accordingly the
Board after considering all these aspects has recommended a dividend
for the year under review at the rate of Rs.0.50 per Equity Share only
on the portion of the paid up equity capital held by the public as on
31st March 2015. No amount has been transferred to General Reserve from
the profits for the year 2014-15.
Operations:
There is substantial improvement in the overall performance during the
year under review in comparison to previous year. The company has
achieved an increase of around 13% in the sales figures and around 26%
in the net profits before tax in comparison to previous year. However
the growth in the sales of the Retail division barring sales under FIFA
licentiate rights is lower than anticipated for the year and
consequently the company had to absorb the losses generated by the
Retail business activities. Because of this the overall profit recorded
by the company is lower than the projections for the year under review.
The Macro economic conditions in the country have shown signs of
recovery and optimistic throughout the year. However the situations
continued to remain grim all over the world barring few countries. This
does not augur well for the textile and garment sector which depends
maximum on export
sales for their revenue. But timely initiatives taken by government,
value addition by many units as well as reasonably stable price ranges
prevailed over a long period during the year has given a major boost in
the demand for goods in the domestic market. This has helped the
company to achieve growth in the sales except in the retail division
where the company needs to give further thrust in the development of
product ranges as well as the market network.
The company continued the revamping task undertaken in the previous
year in order to strengthen the operations of the Retail division to
make it a profitable business. Many unviable outlets were discontinued
including the outlets opened under Large Format Stores (LFS) models
like Reliance/Maya etc. In its place the company has started new
counters through other LFS like Wall Mart, Shoppers Stop, Lifestyle and
Arvind Megamart. Another major step taken by the company during the
year is the expansion of business through on line sales network like
Flip kart, Jabbong, Myntra etc. Further the company is also using other
social network to expand the reach of the products to the actual users.
The company has also plans to expand the sales network through other
media like Television channels and other social media. Finally
regarding the pending EPCG License issue, the company is actively
pursuing the matter with DGFT office to resolve the matter at the
earliest.
Export Sales:
The overall export performance for the year is not as per the estimates
made by the company. This is mainly due to prevailing unfavorable
economic and market conditions for clothing and other apparels in the
European market and other parts of the world. Hence the company
continued to remain focused maximum in the local market. The exports
were mainly sent in the form of finished fabrics to neighboring
countries like Bangladesh. The company is exploring the possibility of
increasing the volume of fabric shipments to Bangladesh which again
depends upon the global economic conditions as Bangladesh mainly caters
to the export market. The company continues its efforts to find the
possibility of developing new markets in African and Far East
countries. However much depends upon the positive changes in the
global economic conditions particularly in the US and European
economies. The objective of the company is to achieve the target of
exporting 50% of its capacity to the overseas customers with better
value addition. Further efforts are continued to align with some
reputed brands in the overseas market to promote the exports in large
volume.
The company continues to follow the business promotion programme by
taking active participation in various international Fairs/ exhibitions
as well as selling garments by using the brand and logos of some
important sports events. The company has executed new agreements with
some reputed football clubs in Europe to enhance the scope of the
sales. As India is better placed than other competitors in the global
markets, the prospects are good in terms of better unit value
realization and volume. The company has developed better products
particularly in the printed and embroidery varieties as there is better
scope for increasing the volume based business on regular basis. In
view of these, company continues to follow its plans to increase the
exports business in sizable volume in the future.
FIFA 2014 (Foot Ball World Cup - Brazil):
As stated in the last year the company had developed and produced wide
range of garments with FIFA brand LOGOS embossed on the garments by
using licentiate rights acquired for India. The overall response was
encouraging though this was one of the first attempts by any company in
India. Even for the company this was the first experience and the
outcome was encouraging. In view of this the company has now executed
fresh new agreements with other reputed football clubs.
Expansion:
As stated in the last year, the management has not undertaken any new
projects during the year under review. Accordingly there will not be
any major expansion plan for some period except addition of some
balancing equipments and replacement of old machineries and equipments.
The remaining portion of the retail expansion plan as proposed in the
Rights issue offer documents will be undertaken gradually over a period
of time in the next few years depending upon the market conditions.
Human Resources & Industrial Relations:
The Company treats its "human resources" as one of its most important
assets. The Company continuously invests in attraction, retention and
development of talent on an ongoing basis. A number of programs that
provide focused people attention are currently underway. Your Company
thrust is on the promotion of talent internally through job rotation
and job enlargement. The Industrial relations with the employees at the
Company's plant at MIDC, TTC Industrial Area, Pawne Village, Navi
Mumbai and in the other locations continue to remain healthy and
cordial.
Share capital:
During the year under review, the company has not any issued any class
of shares like shares with preferential rights or sweat equity shares
and accordingly there is no change in the Subscribed and Issued
capital.
Suditi Employee Stock option Plan 2011 (Suditi ESOP 2011):
The company had granted options to the employees in the year 2013 under
the Suditi Employee Stock Option Plan 2011. Each option is equal to one
share at par (Rs.10/- each) being the price fixed for exercising the
right. To facilitate the employees to exercise their right to buy the
options granted to them, the Company has divided the total options
granted on certain prescribed basis over a period of 5 years. The share
arising on exercise of the options shall be subject to a lock in period
of 1 year from the date of allotment. The two parts of the grant has
been vested till the date of 31st March 2015. The details are as
follows:
Granted Accepted Rejected Vested
No of Total No of Total No of Total Upto
Employees options employees
options Employees options second
(Nos.) (Nos.) (Nos.) part
of Grant
48 278700 18 219500 30 59200 58075
The disclosure of the details is as follows:- (a) Options granted &
Accepted; 219500
(b) The pricing formula; At par
(c) Options vested; 58075
(d) Options exercised; Nil
(e) The total number of shares arising as a result of exercise of
option; Nil
(f) Options lapsed; 59200
(g) Variation of terms of options; NA
(h) Money realised by exercise of options; Nil (i) Total number of
options in force; 219500 (j) Employee wise details of options granted
to;- (i) Senior managerial personnel; 206000 (ii) Any other employee
who receives a grant in any one year of option amounting to 5% or more
of option granted during that year. Nil (iii) identified employees who
were granted option, during any one year, equal to or exceeding 1% of
the issued capital (excluding outstanding warrants and conversions) of
the company at the time of grant; Nil
(k) Diluted Earnings per Share (EPS) pursuant to issue of shares on
exercise of option calculated in accordance with Accounting Standard
(AS) 20 ['Earnings Per Share']. No options are exercised till date.
Based on the options vested EPS is Rs.58/.
(l) Where the company has calculated the employee compensation cost
using the intrinsic value of the stock options, the difference between
the employee compensation cost so computed and the employee
compensation cost that shall have been recognized if it had used the
fair value of the options, shall be disclosed. The impact of this
difference on profits and on EPS of the company shall also be
disclosed.
The impact on account of this will reduce the profits by Rs.970433/-
and accordingly on proforma basis the company's basic and diluted
earnings would have been Rs.0.59 and Rs.0.58 respectively.
(m) Weighted-average exercise prices and weighted-average fair values
of options shall be disclosed separately for options whose exercise
price either equals or exceeds or is less than the market price of the
stock. NA
(n) A description of the method and significant assumptions used during
the year to estimate the fair values of options, including the
following weighted-average information:
(i) Risk-free interest rate, 8.52%
(ii) Expected life, 5 years
(iii) Expected volatility, 4.72%
(iv) Expected dividends, Rs. 0.50 per share
(v) The price of the underlying share in market at the time of option
grant.] Rs.7.68
Meetings:
A calendar of Meetings is prepared and circulated in advance to the
Directors. During the year six Board Meetings and Four Audit Committee
Meetings were convened and held. The details of which are given in the
Corporate Governance Report. The intervening gap between the Meetings
was within the period prescribed under the Companies Act, 2013.
Board Evaluation:
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance, the directors individually as well
as the evaluation of the working of its Audit, Nomination &
Remuneration and Compliance Committees. The details have been explained
in the Corporate Governance Report.
Declaration by an Independent Director(s) and re-appointment, if any:
A declaration by an Independent Director(s) that they meet the criteria
of independence as provided in sub-section (6) of Section 149 of the
Companies Act, 2013 is enclosed as Annexure II. An independent director
shall hold office for a term up to five consecutive years on the Board
of a Company, but shall be eligible for reappointment for next five
years on passing of a special resolution by the Company and disclosure
of such appointment in the Board's report.
Remuneration Policy:
The Board has, on the recommendation of the Nomination & Remuneration
Committee follows a policy for selection and appointment of Directors,
Senior Management and their remuneration. The Remuneration Policy is
stated in the Corporate Governance Report.
Managerial Remuneration:
A) Details of the ratio of the remuneration of each director to the
median employee's remuneration and other details as required pursuant
to Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014. (Enclosed as Annexure III).
B) Details of the every employee of the Company as required pursuant to
5(2) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014. The statement showing the requisite information
pursuant to the Companies (Appointment of Managerial Personnel) Rules
2014 is not annexed herewith as there are no employees covered by the
above rules.
C) Any director who is in receipt of any commission from the company
and who is a Managing Director or Whole-time Director of the Company
shall receive any remuneration or commission from any Holding Company
or Subsidiary Company of such Company subject to its disclosure by the
Company in the Board's Report. Nil
D) There are no disclosures to be made as the directors except the
Chairman & Managing Director, are not in receipt of any remuneration or
stock options other than sitting fees and reimbursement of expenses
incurred for attending the meeting. The details are furnished
separately in the corporate governance report.
Details of Subsidiary/Joint Ventures/Associate Companies:
The company has incorporated two subsidiaries only during the month of
March 2015 and the subsidiaries are yet to commence their business
operations. The subsidiaries have obtained the commencement approval
from the Registrar of companies- Maharashtra only in the month of April
2015 and other necessary legal formalities are yet to be obtained for
commencing the business operations. Hence there are no details pursuant
to sub-section (3) of section 129 of the Act, to be given in the
statement containing the salient feature of the financial statement of
a company's subsidiary or subsidiaries, associate company or companies
and joint venture or ventures.
Name of
the Capital as on 31.3.2015 Share Date of
company held by
Authorised Subscrib Suditi Incorporation Commencement
Suditi Sports Rs.50
Lakhs Rs.5
Lakhs Rs.4
lakhs 18.03.2015 04.04.2015
Apparel Ltd.
Suditi Design Rs.50
Studio Ltd. Lakhs Rs.5
lakhs Rs.4
lakhs 23.03.2015 04.04.2015
Deposits:
The Company has not accepted any deposits within the meaning of Section
73 & 76 of Companies Act, 2013 and the rules made there under.
Energy, Technology and Foreign Exchange:
The particulars relating to conservation of Energy, Technology
Absorption and Foreign Exchange earnings and outgo as required under
Section 134 (3) (m) of the Companies Act, 2013 is given in the Annexure
I forming part of this report.
Directors & the Key Managerial Personnel:
In accordance with the provisions of section 152 & 161 as well as Rule
3 of The Companies (Appointment and Qualification of Directors) Rules,
2014, the company has appointed Smt. Sanjula Sanghai as additional
Director to represent as Women Director on the Board. As an Additional
director she holds office upto the date of Annual General meeting and
seek re-election to the Board in the forthcoming Annual General
Meeting. Further Shri. Pawan Agarwal,
Chairman & Managing Director retire by rotation at the forthcoming
Annual general meeting and being eligible offer himself for
reappointment. Shri. Pawan Agarwal Chairman & Managing Director whose
term as Managing Director expired on 31st Janauary 2015 has been
reappointed as Managing Director with effect from 1st February 2015 by
the Board subject to approval of members in the forthcoming Annual
General Meeting. Further the company is in the process of appointing a
Chief Financial Officer (CFO) to take over the functions of CFO which
hitherto is held by Chairman & Managing Director.
Directors' Responsibility Statement:
The Directors hereby confirm:-
i) That in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
ii) That the Directors had selected such accounting policies 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 at the end of the financial year and of the
profit and loss of the Company for that period;
iii) That the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act, for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
iv) That the Directors have prepared the annual accounts on a 'going
concern' basis;
v ) 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 and;
vi) That the directors have devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Corporate Governance:
A separate section on Corporate Governance and a certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchanges, form part of the Annual Report.
Cost Audit:
The Company has appointed M/s. NNT & Co, (Reg. No. 100911), Cost
Accountants as the Cost Auditor to audit the cost records maintained by
the Company for the year 2014-15. However in view of the new Companies
(Cost Records & Audit) Rules 2014 and amendment thereof, the management
is of the view that the company is now out of the purview of the Cost
Audit Report Rules. In view of this, the company has not appointed any
Cost Auditor for the year 2015-16.
Auditors:
Pursuant to Section 139 of the Companies Act, 2013 M/s. Chaturvedi &
Co., (ICAI Firm Registration No.302137E) Chartered Accountants had been
appointed as the Statutory Auditors of the Company at AGM held on 12th
September 2014 to hold office till the conclusion of the AGM to be held
in the calendar year 2017 subject to ratification by the members at
each annual general meeting. Accordingly the resolution proposing
ratification of appointment of M/s. Chaturvedi & Co. as statutory
auditors of the company for financial year 2015-16, pursuant to Section
139 of the Companies Act, 2013 is annexed and forms part of the notice
of annual general meeting.
Secretarial Audit Report:
In terms of Section 204 of the Act and Rules made there under, Shri.
Shivhari Jalan Practicing Company Secretary has been appointed as
Secretarial Auditors of the Company. The report of the Secretarial
Auditors is enclosed as Annexure separately to this report. The report
is self-explanatory and does not call for any further comments other
than the explanation given on the appointment of Chief Financial
Officer.
Internal Audit & Controls:
The Company has engaged SGCO & Co as its Internal Auditor. During the
year, the Company continued to implement their suggestions and
recommendations to improve the control environment. Their scope of work
includes review of processes for safeguarding the assets of the
Company, review of operational efficiency, effectiveness of systems and
processes, and assessing the internal control strengths in all areas.
Internal Auditors findings are discussed with the process owners and
suitable corrective actions taken as per the directions of Audit
Committee on an ongoing basis to improve efficiency in operations.
Vigil Mechanism:
In pursuant to the provisions of section 177(9) & (10) of the Companies
Act, 2013, a Vigil Mechanism for directors and employees to report
genuine concerns has been established. The Vigil Mechanism Policy has
been made available to each and every stakeholder.
Risk management policy:
A statement indicating development and implementation of a risk
management policy for the Company including identification therein of
elements of risk, if any, that in the opinion of the Board may threaten
the existence of the company as given separately in the Corporate
Governance Report.
Extract of Annual Return:
As required pursuant to section 92(3) of the Companies Act, 2013 and
rule 12(1) of the Companies (Management and Administration) Rules,
2014, an extract of annual return in MGT 9 forms part of this Annual
Report as ANNEXURE IV.
Material changes and commitments, if any, to report affecting the
financial position of the company which have occurred between the end
of the financial year of the company to which the financial statements
relate and the date of the report:
There are no such material changes and commitments to report under this
head.
Details of significant and material orders passed by the regulators or
courts or tribunals impacting the going concern status and company's
operations in future:
There are no such significant and material orders passed by any
regulators to report under this head.
Details in respect of adequacy of internal financial controls with
reference to the Financial Statements:
The company has set up vigilant internal control mechanism to ensure
that the financial statements prepared are true, fair and transparent.
The company has set up strong internal audit department apart from
Management committee to ensure that all the financial transactions
executed are in compliance with applicable laws and regulations and in
line with the budget plans. Any variations or deviations are
appropriately dealt with by the internal Audit department as well as by
the Audit committee. According to the management the present mechanism
followed in the company is adequate and effective. The details are also
stated in the Management discussion and analysis report annexed
herewith and form part of this report.
Particulars of loans, guarantees or investments under section 186:
There are no loans/guarantee or security provided during the year
under review. The details of investments made are as follows:- Details
of Investments:-
Sl Date of Details of Amount Purpose
for Date of Date
of Expected
No
investment Investee which the BR SR rate of
proceeds (if reqd) return
from
investment
is
proposed
to be
utilized
by the
recipient
1 01/04/15 Suditi
Sports 4 lakhs Investment
in 16/01/2015 NA 10%
Apparel
Ltd. subsidiary
2 01/04/15 Suditi
Design Investment
in
Studio
Ltd. 4 lakhs subsidiary 16/01/2015 NA 10%
Particulars of contracts or arrangements with related parties:
The particulars of contract or arrangements entered into by the Company
with related parties at arm's length basis referred to in sub-section
(1) of section 188 of the Companies Act, 2013 is disclosed in Form No.
AOC-2. as Annexure V.
Obligation of company under the "Sexual Harassment of Women at
Workplace (Prevention, Prohibition, and Redressal) Act 2013:
In order to prevent sexual harassment of women at work place a new act
The Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 has been notified on 9th December, 2013. Under
the said Act every company is required to set up an Internal Complaints
Committee to look into complaints relating to sexual harassment at work
place of any women employee. Accordingly the Company has adopted a
policy for prevention of Sexual Harassment of Women at workplace and
has set up Committee for implementation of said policy. During the year
Company has not received any complaint of harassment.
Corporate Social Responsibility (CSR):
The disclosures as per Rule 9 of Companies (Corporate Social
Responsibility Policy) Rules, 2014 is not applicable to the company.
Transfer of Amounts to Investor Education and Protection Fund:
The Company did not have any funds lying unpaid or unclaimed for a
period of seven years. Therefore there were no funds which were
required to be transferred to Investor Education and Protection Fund
(IEPF). Pursuant to the provisions of the Investor Education Protection
Fund (Uploading of information regarding unpaid and unclaimed amounts
lying with companies) Rules, 2012, the Company has already filed the
necessary form and uploaded the details of unpaid and unclaimed amounts
lying with the Company, as on the date of last AGM (12.09 2014), with
the Ministry of Corporate Affairs.
Listing with Stock Exchange:
The Company confirms that it has paid the Annual Listing Fees for the
year 2015-16 to BSE where the Company's Shares are listed.
Appreciation:
Your Company and its Directors wish to place on record their sincere
appreciation for the support and assistance extended by different
Central and State Government Departments and Agencies, Banks and
Financial Institutions, Insurance companies, Customers and Vendors.
Your Directors are thankful to the esteemed shareholders for their
continued support and confidence reposed in the company and its
management. Your Directors also wish to place on record their deep
sense of appreciation to all the employees of the Company for their
outstanding contribution towards the operations of the Company.
For and on behalf of the Board of Directors
Place: Mumbai PAWAN AGARWAL
Date: 29.05.2015 CHAIRMAN & MANAGING DIRECTOR
Mar 31, 2014
Dear Shareholders,
The Directors have pleasure in presenting the Twenty Third Annual
Report of the Company together with the Audited Balance Sheet as at
31st March, 2014 and the Profit and Loss Account for the year ended on
that date.
Financial Results: (Rs. in Lakhs)
Particulars Current Previous
Year Ended Year Ended
31.03.2014 31.03.2013
Export Sales 40.83 28.66
Local Sales 6166.55 5352.07
Other Income 23.61 21.44
Profit before Interest and
Depreciation 429.05 294.46
Finance Cost 213.34 123.85
Profit after Finance Cost 215.71 170.61
Depreciation 119.89 99.00
Profit / (Loss) before Tax 95.82 71.61
Provision for Tax 18.50 13.52
Profit / (Loss) after Tax before
extra ordinary items 77.32 58.09
Extra Ordinary Items (Net) - -
Net Profit 77.32 58.09
Add: Brought forward from the
previous year 779.93 745.75
Transfer to General Reserve - -
Amount available for appropriation 857.25 803.84
Proposed Dividend 21.35 20.57
Tax on Proposed Dividend 3.63 3.34
Balance carried to Balance Sheet 832.27 779.93
Dividend:
In view of the requirement of funds to maintain the growth of the
company as well as to fulfill the aspirations of the stakeholders, the
promoters have in writing waived their entitlement on the profit
distribution in the form of dividend, if any, declared by the company
for the year 2013-14. Accordingly, the Board after considering all
these aspects, has recommended a dividend for the year under review at
the rate of Rs.0.50 per Equity Share only on the portion of the paid up
equity capital held by the public as on 31st March 2014.
Operations:
The company continues to record substantial improvement in the overall
performance during the year under review in comparison to the previous
year. The company has achieved an increase of over 15% in the sales
figures and around 34% in the net profits before tax in comparison to
the previous year. However, the growth in the sales of the Retail
division is lower than anticipated for the year and consequently the
company has to absorb the losses generated by the Retail business
activities. Because of this, the overall profit recorded by the company
is lower than the projections for the year under review. The economic
conditions in the country remained sluggish and pessimistic throughout
the year. The situation remained same all over the world barring few
countries. This was a matter of concern for the industry particularly
textiles and other capital goods industry. There was no major growth in
the demand witnessed by any major sectors of the industry. Lack of
government initiatives, weak fiscal conditions and inflation in food
prices has created a major slump in the
demand for goods in the domestic market. This has affected the growth
of the company particularly in the export business and in garment
sales.
The company has undertaken a major revamping of the Retail business
division to strengthen the operations in order to make it a profitable
division. Accordingly, the company discontinued the operations of some
of the unviable stores like in Goa, Belgaum etc and also the counters
operating through Large Format Stores (LFS) like Reliance/Maya etc. In
its place the company has started new identical numbers of counters
through other LFS like Pantaloon, Shoppers Stop, Lifestyle and Arvind
Megamart. In addition to these outlets, the company has expanded the
business through wholesale dealers and online sales network. The
company proposes to add some more counters in the LFS formats and
exclusive retail outlets in different parts of the country. The
"Riot" brand name taken by the company is now fully acquired and
used exclusively by the company for its Retail business activities.
Apart from this, and in order to increase the profitability, the
company has merged the activities of the Buying agency division with
the existing marketing set up. Similarly, the company has closed the
depot and merged the depot business with the existing marketing set up.
The company has also discontinued the operations at Bhiwandi unit.
Further, in respect of the pending EPCG License issues, the company is
actively pursuing the matter with the DGFT office.
Export Sales:
There is some marginal increase in the exports in comparison to the
previous year. However, the overall export performance is not as per
the estimates made by the company. This is mainly due to unfavorable
market conditions for clothing and other apparels in the European
market and other parts of the world. Therefore, the company, during the
year under review, continued to remain focused predominantly in the
local market. The exports were mainly sent in the form of finished
fabrics to neighboring countries like Bangladesh. The company continues
to take initiatives to increase the volume of shipments to Bangladesh
as the prospects to increase the same are very good. The company is now
taking effective measures to explore the possibility of developing new
markets in African and Far East countries. Also the company is
observing some positive changes in the global market because of some
economic recovery in the US and some European economies. The company is
relentlessly taking various efforts to start the exports business
particularly in these markets as they offer potential for supply of
garments in huge volume. The long term objective of the company is to
achieve a target of exporting 50% of its capacity in the overseas
market. Alongside, the company continues its efforts to align with some
large reputed brands in the overseas market to ensure continuity of
exports in large volume.
The company continues to maintain the market development programme by
taking active participation in various international Fairs/exhibitions
as well as selling garments by using the brand and logos of some
important sports events. One such effort undertaken by the company was
by acquiring the licentiate rights of FIFA 2014 which is very
encouraging and the company would be undertaking similar efforts in the
future also. This has been followed with the objective of identifying
some new avenues like selling of garments by developing new markets in
these regions. As the global markets are now within the reach of
Indian textile exporters in terms of competition the prospects are good
for better unit value realization and volumes. The company has added
various products like printed garments and fabrics to attract high end
customers who offer better rates and attractive margins to undertake
volume based business on regular basis. In view of these, the company
continues to pursue its plans to increase the exports business in
sizable volume in the future.
FIFA 2014 (Foot Ball World Cup - Brazil):
The company has developed and produced wide range of garments with FIFA
brand LOGOS embossed on the garments by using licentiate rights
acquired for India. The sale of garments embossed with FIFA LOGOS have
already started in full scale and are expected to last till the end of
July, 2014. As a part of expansion of the Retail business activities,
the company proposes to continue the market development programme
through selling licensed garments of various prestigious clubs
promoting big sports events. The company is in the process of
finalizing the agreements with other sports related organizations/clubs
like "Real Madrid" in Spain & "Manchester City" in England.
This will provide great opportunity for the company to establish the
brand name in the market as well as to boost the sale of garments in
the domestic market.
Expansion:
Since the company has completed almost all planned projects, the
management has decided not to undertake any new projects for some time.
Accordingly there will not be any major expansion plan for some period
except addition of some balancing and replacement of old machineries
and equipments. As per the detailed plan of capital expenditure given
in the Rights Issue offer document, the company has completed the
construction/acquisition of new administrative block to centralize all
administrative and back office operations, new garment unit as well as
significant portion of the expansion of Retails Business through
setting up new stores. The remaining portion of the retail expansion
plan will be undertaken gradually over a period of time in the next few
years depending upon the market conditions.
Industrial Relations:
Industrial relations with the employees at the Company''s plant at
MIDC, TTC Industrial Area, Pawne Village, Navi Mumbai and in the other
locations continued to remain healthy and cordial.
Suditi Employee Stock option Plan 2011 (Suditi ESOP 2011): During the
last year the company had granted options to the employees under the
Suditi Employee Stock Option Plan 2011. Each option is equal to one
share at par (Rs.10/- each) being the price fixed for exercising the
right. To facilitate the employees to exercise their right to buy the
options granted to them, the Company has divided the total options
granted on certain prescribed basis over a period of 5 years. The share
arising on exercise of the options shall be subject to a lock in period
of 1 year from the date of allotment. The first part of the grant has
been vested during the month of March 2014. The details are as follows:
Granted Accepted Rejected Vested
No of Total No of Total No of Total First part
Employees options Employees options Employees options of
(Nos.) Grant (Nos. ) Grant
48 278700 18 219500 30 59200 21950
The disclosure of the details is as follows:-
(a) (i) options granted; 278700
(ii) options accepted; 219500
(b) the pricing formula; At par
(c) options vested; 21950
(d) options exercised; Nil
(e) the total number of shares arising as a result of exercise of
option; Nil
(f) options lapsed; 59200
(g) variation of terms of options; NA
(h) money realised by exercise of options; Nil
(i) total number of options in force; 219500
(j) employee wise details of options granted to;- (i) senior managerial
personnel; 206000
(ii) any other employee who receives a grant in any one year of option
amounting to 5% or more of option granted during that year; Nil
(iii) identified employees who were granted option, during any one
year, equal to or exceeding 1% of the issued capital (excluding
outstanding warrants and conversions) of the company at the time of
grant; Nil
(k) diluted Earnings Per Share (EPS) pursuant to issue of shares on
exercise of option calculated in accordance with Accounting Standard
(AS) 20 ''Earnings Per Share'']. No options are exercised till date.
(l) Where the company has calculated the employee compensation cost
using the intrinsic value of the stock options, the difference between
the employee compensation cost so computed and the employee
compensation cost that shall have been recognized if it had used the
fair value of the options, shall be disclosed. The impact of this
difference on profits and on EPS of the company shall also be
disclosed. The impact on account of this will reduce the profits by
Rs.339567/- and accordingly, on proforma basis, the company''s basic and
diluted earnings would have been Rs.0.44 and Rs.0.44 respectively.
(m) Weighted-average exercise prices and weighted-average fair values
of options shall be disclosed separately for options whose exercise
price either equals or exceeds or is less than the market price of the
stock. NA
(n) A description of the method and significant assumptions used during
the year to estimate the fair values of options, including the
following weighted-average information:
(i) risk-free interest rate, 8.51%
(ii) expected life, 5 years
(iii) expected volatility, 4.30%
(iv) expected dividends, Rs.0.50 per share
(v) the price of the underlying share in market at the time of option
grant, Rs.7.68
Personnel:
The statement showing the requisite information in compliance with the
provisions of Section 217 (2A) of the Companies Act, 1956 is not
furnished herewith, as there are no employees covered by that section.
Deposits:
The Company has not accepted any deposits within the meaning of Section
58A of Companies Act, 1956 and the rules made there under.
Energy, Technology and Foreign Exchange:
The particulars relating to conservation of Energy, Technology
Absorption and Foreign Exchange earnings and outgo as required under
Section 217 (1) (e) of the Companies Act, 1956 is given in the Annexure
forming part of this report.
Directors:
The Board wishes to place on record the sad demise of Shri. Indu Sekhar
Rao and acknowledges with gratitude the valuable contribution made by
Shri. Indu Sekhar Rao towards the growth of the company during his
tenure as Director of the company. Accordingly Shri. Indu Sekhar Rao
ceases to be the member of the Board with effect from 7th April 2014.
The Board also wishes to place on record with grief the sad demise of
founder Chairman Shri. Kishorilal Agarwal and acknowledges with deep
gratitude the valuable contribution made by Shri. Kishorilal Agarwal
towards the growth of the company during his tenure in the past as
Chairman of the company.
In accordance with the provisions of the Companies Act 1956 and the
Articles of Association of the Company Shri. Vivek Gangwal & Shri
Sushil Kumar Kasliwal, would retire by rotation, and being eligible,
offer themselves for re-appointment.
Directors'' Responsibility Statement:
The Directors hereby confirm: -
i) That in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii) That the Directors have selected such accounting policies 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 at the end of the financial year and of the
profit or loss of the Company for that period;
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act, for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
iv) That the Directors have prepared the annual accounts on a ''going
concern'' basis.
Corporate Governance:
A separate section on Corporate Governance and a certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchanges, form part of the Annual Report.
Cost Audit:
The Company had appointed M/s. Talati & Associates (Prof.V.J.Talati -
Reg. No.-2203), Cost Accountants as the Cost Auditor to audit the cost
records maintained by the Company for the year 2013- 14. This is as per
the direction received from the Central Govt., in respect of conducting
the audit of cost records maintained by the Company. For the year
2014-15 the company has appointed M/s. NNT & Co, (Reg. No. 100911)
cost accountants as the cost auditor in place of M/s. Talati &
Associates who has expressed their inability to accept the assignment
due to personal reasons.
Auditors:
M/s. Chaturvedi & Co, Chartered Accountants, retire at the forthcoming
Annual General Meeting and being eligible offer themselves for
re-appointment.
Appreciation:
Your Company and its Directors wish to place on record their sincere
appreciation for the support and assistance extended by different
Central and State Government Departments and Agencies, Banks and
Financial Institutions, Insurance companies, Customers and Vendors.
Your Directors are thankful to the esteemed shareholders for their
continued support and confidence reposed in the company and its
management. Your Directors also wish to place on record their deep
sense of appreciation to all the employees of the Company for their
outstanding contribution towards the operations of the Company.
For and on behalf of the Board of Directors
Place : Mumbai PAWAN AGARWAL
Date : 27.05.2014 CHAIRMAN & MANAGING DIRECTOR
Mar 31, 2013
Dear Shareholders,
The Directors have pleasure in presenting the Twenty Second Annual
Report of the Company together with the Audited Balance Sheet as
at 31st March, 2013 and the Profit and Loss Account for the year
ended on that date.
Financial Results: (Rs. in Lakhs)
Particulars Current Previous
Year Ended Year Ended
31.03.2013 31.03.2012
Export Sales 28.66 32.57
Local Sales 5352.07 4168.17
Other Income 21.44 64.92
Profit before Interest and Depreciation 294.46 235.95
Finance Cost 123.85 77.66
Profit after Finance Cost 170.61 158.29
Depreciation 99.00 77.98
Profit / (Loss) before Tax 71.61 80.31
Provision for Tax 13.52 14.96
Profit/(Loss) after Tax before
extra ordinary items 58.09 65.35
Extra Ordinary Items (Net)
Net Profit 58.09 65.35
Add: Brought forward from the
previous year 745.75 729.91
Transfer to General Reserve
Amount available for appropriation 803.84 795.26
Proposed Dividend 20.57 42 60
Tax on Proposed Dividend 3.34 6.91
Balance carried to Balance Sheet 779.93 745.75
Dividend:
Considering the need to maintain a balanced approach towards the growth
of the company and the aspirations of the stakeholders, the promoters
have in writing waived their entitlement on the profit distribution in
the form of dividend i any declared by the company for the year
2012-13. In view of this the Board is pleased to recommend a dividend
for the year under review at the rate of Rs.0.50 per Equity Share on
the paid up share capital of the
Operations:
The company has registered substantial improvement in the overall
performance during the year under review in comparison to previous in
the sales is lower than anticipated due to lower than projected sales
recorded by the retail division. In view of this the company had to
absorb the loss generated by the Retail business activities which
ultimately affected the overall profit recorded by the company.
The economic conditions in the country and across the globe continue to
remain a matter of concern for the industry. Because of economic crisis
in many parts of Europe, the demand for the consumer goods remain
subdued. In the domestic market the situation has started deteriorating
and the optimism prevailed in the last few years have started receding
in the current year as the country registered economic growth much
below the projected level. However the situation has still not slipped
out of control and the country is expected to do much better in the
current fiscal year. The company is anticipating a positive development
in the demand for garments and fabrics with bolter price structure.
The company continues to expand the Retail business by adding new
outlets through Large Format Stores (LFS) like Reliance/ Lifestyle etc.
In addition to these outlets, the company has opened some exclusive
outlets in various cities on its own or through franchisees. The
company proposes to add some more counters in the LFS formats and an
additional at least 15 exclusive retail outlets in different parts of
the country. The "Riot" brand name taken by the company would be now
fully acquired and used exclusively by the company for its Retail
business activities. Apart from this the company is also taking some
immediate measures to streamline the activities of the Buying agency
division to expand the scope of business for the company. Further
regarding the pending EPCG License matter, the company is actively
following up the matter with DGFT office to resolve the issue at the
earliest. Export Sales:
The market conditions continued lo remain depressed for clothing and
other apparels in the European market and other parts of the world.
Therefore the company during the year under review focused maximum in
the local market. Hence there were no significant exports of garments
and fabrics during the year under review. However the company made
some efforts in the neighboring countries like Sri Lanka, Bangladesh to
explore the possibilities of regular supply of fabrics to the garment
manufacturers of these countries. The company was able to make some
progress which resulted in the supply of some consignments to
Bangladesh. The company is now taking some effective measures to ensure
regular supply of finished fabrics to garment manufacturers of
Bangladesh and Sri Lanka. Apart from this the company has now made some
preliminary studies to assess the possibility of arranging the supply
of garments through countries like Myanmar. The various options and
possibilities are now assessed and a detailed critical review would be
made of all these alternatives before taking any final decision.
Further the company is observing some noticeable changes in the global
market because of some recovery in the US economy. The company has now
initiated some actions to start the exports business particularly in
these markets as these markets offer potential for supply of garments
in huge volume. Ultimately the company intends to supply at least 50%
of its capacity in the overseas markets to ensure the sales of more
value added garments and apparels. Alongside the company is actively
pursuing its efforts to align with some big reputed brands in the
overseas market to ensure the export in large volume.
The company continues to maintain the market development programme by
taking active participation in various international Fairs/exhibitions
to demonstrate the capacity to manufacture quality fabrics and gaments.
This has been followed with the objective of identifying some new
potential customers as well as developing new markets in these regions.
As the global markets are now slowly opening up for Indian textile
goods in terms of better unit value realization and volume, the company
has added various products like printed garments and fabrics to attract
high end customers. This will help the company to get better rates and
attractive margins to undertake volume based business on regular basis.
In view of these, the company has drawn up plans to increase its
exports business in sizable volume in the future.
FIFA 2014 (Foot Ball World Cup - Brazil):
As a part of expansion of the Retail business activities, the company
is undertaking a major market development programme from 2014. To meet
this objective the company has taken the license rights for India - For
apparels for FIFA 2014 (Football World Cup in Brazil). This will
provide a great opportunity for the company to establish the brand name
in the market and boost the sale of garments in the domestic market.
Expansion: As a part of the expansion cum modernization plan, the
company has now completed the execution of the printing project at the
existing factory unit at Navi Mumbai. The company has started the
commercial production during the year under review and this is expected
to give better product range in printing varieties with value addition
to enhance the profitability of the existing processing unit. Apart
from this the second garment unit at Bhiwandi has also started
commercial production during the year under review. The production is
expected to be stabilized during the current year. As per the a
detailed plan of captal expenditure drawn for the next two years which
includes expansion of Retail business activities, and
construction/acquisition of new administrative block to centralize all
administrative and back office operations, the company has achieved
significant progress in the implementation of this plan during the year
under review.
Rights Issue:
During the year under review the company issued shares to the existing
shareholders on rights basis. The issue was opened for subscription on
20th.September 2012 and closed on 4th October 2012. Further the company
has completed all the formalities and procedures related to the Rights
issue of shares and filed necessary application with Secures and
Exchange Board of India (SEBI)for issue of No Objection Certificate for
the release of Security deposit kept with the Bombay Stock Exchange
Ltd. After the Right Issue the paid up captal of the company has
increased from Rs.852 lakhs to Rs. 1667.43 lakhs. The proceeds received
from the Rights issue are spent on the projects envisaged in the ofler
document and the surplus funds which is yet to be spent on the
specified capital expenditure are deployed towards the working capital
needs of the company as stated in the offer document. These funds will
be utilized as and when the need for the capital expenditure arises.
Industrial Relations:
Industrial relations with the employees at the Company''s plant at MIDC,
TTC Industrial Area, Pawne Village, Navi Mumbai and Bhiwandi as well in
the other locations continue to remain healthy and cordial.
Suditi Employee Stock option Plan 2011 (Suditi ESOP 2011):
During the year under review the company has granted options to the
employees under the Suditi Employee Stock Option Plan 2011. Each
option is equal to one share at par (Rs.10/- each) being the price
fixed for exercising the right. To facilitate the employees to exercise
their right to buy the options granted to them, the Company has divided
the total options granted on certain prescribed basis
The vesting of the opt ons to each and every employee who have accepted
the options shall take place during March/April 2014.
Personnel:
The statement showing the requisite information in compliance with the
provisions of Section 217 (2A) of the Companies Act, 1956 is not
furnished herewith, as there are no employees covered by that section.
Deposits:
The Company has not accepted any deposts within the meaning of Section
58A of Companies Act, 1856 and the rules made there
Energy, Technology and Foreign Exchange:
The particulars relating to conservation of Energy, Technology
Absorption and Foreign Exchange earnings and outgo as required under
Section 217 (1) (e) of the Companies Act, 1956 is given in the Annexure
forming part of this report.
Directors:
In accordance with the provisions of the Companies Act 1956 and the
Articles of Association of the Company Shri. Sushil kumar
Kasliwal and Shri. IndusekharRao Directors, would retire by rotation,
and being eligible, offers themselves for re-appointment.
Directors'' Responsibility Statement:
The Directors hereby confirm: -
i) That in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii) That the Directors have selected such accounting policies 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 at the end of the financial year and of the
profit or loss of the Company for that period;
iii) That the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act, for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; and
iv) That the Directors have prepared the annual accounts on a ''going
concern'' basis. Corporate Governance:
A separate section on Corporate Governance and a certificate from the
Auditors of the Company regarding compiianceof conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchanges, form part of the Annual Report.
Cost Audit:
The Company has appointed M/s.Talati & Associates (Prof.V.J.Talati -
Reg.No. M-2203), Cost Accountants as the Cost Auditor to audit the cost
records maintained by the Company for the year2012-13. This is as per
the direction received from the Central Govt., in respect of conducting
the audit of cost records maintained by the Company.
Auditors:
M/s. Chaturvedi & Co, Chartered Accountants, retire at the forthcoming
Annual General Meeting and being eligible offer themselves for re
appointment.
Appreciation:
Your Company and its Directors wish to place on record their sincere
appreciation forthe support and assistance extended by different
Central and State Government Departments and Agencies, Banks and
Financial Institutions, Insurance companies, Customers and Vendors.
Your Directors are thankful to the esteemed shareholders for their
continued support and confidence reposed in the company and its
management. Your Directors also wish to place on record their deep
sense of appreciation to all the employees of the Company for their
outstanding contribution towards the operations of the Company.
For and on behalf of the Board of Directors
Place : Mumbai PAWANAGARWAL
Date ; 29.05.2013 CHAIRMAN & MANAGING DIRECTOR
Mar 31, 2012
The Directors have pleasure in presenting the Twenty First Annual
Report of the Company together with the Audited Balance Sheet as at 31st
March, 2012 and the Profit and Loss Account for the year ended on that
date.
Financial Results: (Rs. in Lakhs)
Particulars Previous Current
Year Ended Year Ended
31.03.2012 31.03.2011
Export Sales 32.57 9.01
Local Sales 4168.1 3093.43
Other Income 64.92 53.29
Profit before Finance Charges/Cost
and Depreciation 235.95 258.66
Finance Cost 77.66 39.57
Profit after Finance Cost 158.29 219.09
Depreciation 77.98 68.67
Profit/(Loss) before Tax 80.31 150.42
Provision for Tax 14.96 30.75
Profit / (Loss) after Tax before extra
ordinary items 65.35 119.67
Extra Ordinary Items (Net) - -
Net Profit 65.35 119.67
Add: Brought forward from the
previous year 729.91 610.23
Transfer from General Reserve - -
Amount available for appropriation 795.26 729.91
Proposed Dividend 42.60 -
Tax on Proposed Dividend 6.91 -
Balance carried to Balance Sheet 745.75 729.91
Dividend:
Considering the sustained growth in the business and stability in the
profitability levels, the board is pleased to recommend a dividend at
the rate of Rs.0.50 per Equity Share on the paid up share capital as on
31a March 2012 of the company.
Operations:
The company has recorded significant improvement in the overall
performance during the year under review in comparison to previous
year. The company has registered an increase of almost 36% in the sales
figures in comparison to previous year. However the growth in the
sates is not in line with the projected level due to lower than the
anticipated sales levels in the retail division. The economic
conditions across the globe continue to remain as a concern because of
economic crisis in many part of Europe. Even in US markets, the
conditions are not very encouraging as the economy is still on the
recovery path. In the domestic market the robust economic conditions
prevailed in the last few years have started receding in the current
year as the country registered economic growth much below the projected
level. However overall market sentiments are very positive and the
country is expected to do much better in the current fiscal year. The
market conditions are expected to grow at a better pace in the domestic
market. The company is already experiencing a spurt in the demand for
garments and fabrics with better price structure.
The company expanded the scope of Retail business by adding outlets
through Large Format Stores (LFS) like Reliance/life style etc. These
Stores (LFS) are functioning apart from company's outlets opened in
various cities. The company proposes to add more counters in the LFS
formats and an additional at least 15 retail outlets in different parts
of the country. The "Riot" brand name taken by the company would be
acquired completely and used exclusively by the company only for its
Retail business activities. Apart from this the company is also in the
process of setting up a Buying House division in the lines of
discontinued Apparel Buying division to expand the scope of business
for the company. Further regarding the pending EPCG License matter,
the company continues to pursue with Joint DGFT, Mumbai to resolve the
issue at the earliest.
Export Sales:
In view of depressed conditions in the demand for clothing and other
apparels in the European market and other parts of the world, the
company during the year under review focused maximum in the local
market. Hence there were no significant exports of garments and fabrics
during the year under review. However in view of signs of recovery in
the US markets and also efforts to revive the economy in the European
region, the company undertook some exports during the last quarter of
the financial year. The company has now initiated some actions to start
the exports business particularly in the Asian regions mainly for
quality fabrics. Apart from this the company is also negotiating with
different buyers in the U S A and Europe for garment exports with
better unit value realization. As the situation is gradually improving
the company is hopeful of restarting the exports to these regions.
Alongside the company continues its efforts to align with some big
reputed brands in the overseas market to ensure the export in large
volume.
The company continues to take active part in international
Fairs/exhibitions to demonstrate the capacity to manufacture quality
fabrics and garments in huge volumes. The company is hopeful of
starting some sizable quantity of exports once the European markets
start showing signs of recovery from recession. The company is now in
the process of adding some printing line to increase the product range
for exports markets. This will help the company to get better rates
and attractive margins to undertake volume based business on regular
basis. Ultimately in the long run the company now intends to export at
least 30-50% of its production capacity to the various buyers all over
the world with different product ranges.
Expansion:
As a part of the expansion cum modernization plan, the company is now
in the process of setting up the printing project at the existing
factory unit at Navi Mumbai. This will help the company to have a
better product range with value addition to enhance the profitability
of the existing processing unit. As per the detailed plan of capital
expenditure drawn for the next two years which includes setting up
another new garment unit expansion of Retail business activities, and
construction/acquisition of new administrative block to centralize all
administrative and back office operations, the company has initiated
some preliminary work in the year under review. The new garment unit
may be set up adjacent to the existing unit. The funds required for
this programme will be arranged though issue of fresh equity shares on
rights basis.
Rights Issue:
The Lead Managers M/S. Vertex Securities Ltd. had received necessary
consent from SEBI (Securities & Exchange Board of India) and Bombay
Stock exchange Ltd in respect of the proposed Rights Issue of shares.
Accordingly the Lead Managers have made the final draft of the Offer
documents incorporating the corrections/instructions given by the SEBI
while according their consent for the proposed rights issue. The
company intends to finalize the record date in the month of July/August
2012 on receipt of confirmation from the Securities and Exchange board
of India.
Suditi Employee Stock Option Plan 2011 (Suditi ESOP 2011):
The Employee stock option plan approved by the company in the last
general meeting has received necessary consent from the Bombay Stock
Exchange Ltd. The company has now drawn up a detailed plan for
introducing the same in the company gradually. The company has set up
a Compensation committee to administer and oversee the scheme as per
the procedures laid down in this behalf.
Industrial Relations:
Industrial relations with the employees at the Company's plant at MIDC,
TTC Industrial Area, Pawne Village, Navi Mumbai, continue to remain
healthy and cordial.
Personnel:
The statement showing the requisite information in compliance with the
provisions of Section 217 (2A) of the Companies Act, 1956 is not
furnished herewith, as there are no employees covered by that section.
Deposits:
The Company has not accepted any deposits within the meaning of Section
58A of Companies Act, 1956 and the rules made there under.
Energy, Technology and Foreign Exchange:
The particulars relating 10 conservation of Energy, Technology
Absorption and Foreign Exchange earnings and outgo as required under
Section 217 (1) (e) of the Companies Act, 1956 is given in the Annexure
forming part of this report.
Directors:
During the year Chairman ShriAnand Agarwal resigned from the Board as
director due to pre occupation with other activities with effect from
3rd February 2012. The Board wishes to record their deep sense of
appreciation for the valuable services rendered by Shri Anand Agarwal
during his tenure as board member in various capacities.
In accordance with the provisions of the Companies Act 1956 and the
Articles of Association of the Company Shri Vivek Gangwal and Shri.
Indusekhar Rao Directors, would retire by rotation, and being eligible,
offers themselves for re-appointment.
Directors' Responsibility Statement:
The Directors hereby confirm:
i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures:
ii) that the Directors have selected such accounting policies 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 at the end of the financial year and of the
profit or loss of the Company for that period:
iii) 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, for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities; and
iv) That the Directors have prepared the annual accounts on a 'going
concern' basis. Corporate Governance:
A separate section on Corporate Governance and a certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchanges, form part of the Annual Report.
Cost Audit:
The Company has appointed Mis. Talati & Associates (Prof.V.J.Talati
Reg.No. M- 2203), Cost Accountants as the Cost Auditor to audit the
cost records maintained by the Company for the year 2011-12. This is as
per the direction received from the Central Govt., in respect of
conducting the audit of cost records maintained by the Company.
Auditors:
M/s. Chaturvedi & Co, Chartered Accountants, retire at the forthcoming
Annual General Meeting and being eligible offer themselves fa
re-appointment.
Appreciation:
Your Company and its Directors wish lo place on record their sincere
appreciation for the support and assistance extended by different
Central and State Government Departments and Agencies, Banks and
Financial Institutions, Insurance companies, Customers and Vendors.
Your Directors are thankful to the esteemed shareholders for their
continued support and confidence reposed in the company and te
management. Your Directors also wish to place on record their deep
sense of appreciation to all the employees of the Company for their
outstanding contribution towards the operations of the Company.
For and on behalf of the Board of Directors
Place: Mumbai PAWAN AGARWAL
Date: 29.05.2012 CHAIRMAN & MANAGING DIRECTOR
Mar 31, 2011
Dear Shareholders,
The Directors have pleasure in presenting the Twentieth
Annual Report of the Company together with the Audited
Balance Sheet as at 31st March, 2011 and the Profit and
Loss Account for the year ended on that date.
Financial Results:
(Rs. in Lakhs)
Particulars Current Year Previous Year
Ended Ended
31.03.2011 31.03.2010
Export Sales 9.64 160.03
Local Sales 3091.24 2877.89
Other Income 59.75 98.15
Profit before Interest
and 258.66 176.69
Depreciation
Interest 39.57 9.07
Profit after Interest 219.09 167.62
Depreciation 68.67 65.07
Profit / (Loss) before
Tax 150.42 102.55
Provision for Tax 30.75 18.00
Profit/(Loss) after
Tax before 119.67 84.55
extra ordinary items
Extra Ordinary Items
(Net)
Net Profit 119.67 84.55
Add: Brought forward from 610.23 525.68
the previous year
Transfer from General
Reserve
Amount available for
appropriation 729.91 610.23
Balance carried to
Balance Sheet 729.91 610.23
Dividend:
In view of ongoing expansion of business activities and
also considering the need for conserving the resources for
capital expenditure, your Directors have decided not to
recommend for payment of any dividend on the Equity
Shares for the year ended 31st March 2011.
Operations:
The company has recorded some improvement in the overall performance
during the year under review in comparison to previous year. The
profitability has increased in comparison to the previous year. The
economic conditions across the globe have started showing signs of
recovery barring few countries in the Europe. The robust economic
conditions have further accelerated the growth in the domestic
industrial sector. There is all round growth in the demand for goods in
the domestic market. This has facilitated the improvement in the
performance of the Garment unit during the year under review. The
domestic business has registered a growth level of around 8% in
comparison to previous year. However there is no substantial growth in
the overall sales due to reduction in the export business.
During the year under review the company has started the Retail
business activities by setting up few retail stores in different
cities. However the progress in the first year is not in line with the
projections due to initial teething problems and the time required for
creating the brand awareness in the market. The company is now in the
process of developing the brand name in the market by adding further
chain of stores in the current year. Apart from this the company is
also in the process of setting up a wholesale trade to expand the
volume of domestic garment business. In respect of the Apparel buying
activities, considering the present market conditions, the company has
now discontinued the Apparel Buying division and merged the activities
in the existing garment division itself. Further regarding the pending
EPCG License matter, the company continues to pursue with Joint DGFT,
Mumbai to resolve the issue at the earliest.
Export Sales:
In view of improvement in the demand for clothing and other apparels in
the domestic market the company during the year under review focused
maximum in the local market. Hence there were no significant exports
of garments and fabrics during the year under review. Apart from this
the unit value realization of exports are still very low and not
economical comparing to the cost of manufacturing and the various
quality and compliance norms imposed on the domestic manufacturers.
Though there are some reversionary trends in the recessionary
conditions in the U.S, the market conditions are not very encouraging
in the Europe particularly in Spain, Greece and Portugal. In view of
these difficult conditions, the company had focused more in the
domestic market. However the company continued its efforts to align
with some big reputed brands in the overseas market to ensure the
export in large volume.
The company had taken active participation in international
Fairs/exhibitions to demonstrate the capacity to manufacture quality
fabrics and garments in huge volumes. The company had put up its stall
in Intermodal Mexico and Hong Kong Fashion Week Fall Winter. This will
help the company to identify some new potential customers as well as
developing new markets in these regions. The overseas markets are now
slowly opening up for Indian textile goods in terms of better unit
value realization and volume. The company has added various facilities
in the garment unit to attract high end customers. This will help the
company to get better rates and attractive margins to undertake volume
based business on regular basis. In view of these emerging trends, the
company has drawn up plans to increase its exports business by manifold
in the coming years. Finally the long term objective of the company is
to export at least 50% of its production capacity to the various buyers
all over the world with different product ranges.
Expansion:
The company has prepared a detailed plan of capital expenditure for the
next two years which includes setting up another new garment unit,
expansion of Retail business activities, and construction/acquisition
of new administrative block to centralize all administrative and back
office operations. The new garment unit would be set up either adjacent
to the existing unit or in the nearby areas. The funds required for
this programme will be arranged though issue of fresh equity shares on
rights basis.
Rights Issue:
The Board had accorded their consent in their meeting held on 13th
November, 2010 for issue of further shares to the existing shareholders
on rights basis in the ratio of one share for every single share held
as on the record date to be announced separately. The object of the
issue is to provide funds for the foretasted capital expenditure plan.
The company proposes to raise Rs.852 lakhs through the issue of fresh
shares on rights basis from the existing shareholders. The company has
appointed M/S.Vertex Securities Limited (A subsidiary of Tran warranty
Finance Limited) as lead managers to the issue. The Offer documents
duly approved by the board in their meeting held on 19th May 2011 are
already filed With SEBI (Securities and Exchange Board of India) and
the Bombay Stock Exchange Ltd.
Industrial Relations:
Industrial relations with the employees at the Company's plant at MIDC,
TTC Industrial Area, Pawne Village, Navi Mumbai, continue to remain
healthy and cordial.
Personnel:
The statement showing the requisite information in compliance with the
provisions of Section 217 (2A) of the Companies Act, 1956 is not
furnished herewith, as there are no employees covered by that section.
Deposits:
The Company has not accepted any deposits within the meaning of Section
58A of Companies Act, 1956 and the rules made there under.
Energy, Technology and Foreign Exchange:
The particulars relating to conservation of Energy, Technology
Absorption and Foreign Exchange earnings and outgo as required under
Section 217 (1) (e) of the Companies Act, 1956 is given in the Annexure
forming part of this report.
Directors:
In accordance with the provisions of the Companies Act 1956 and the
Articles of Association of the Company Shri. A.lndusekhar Rao and
Shri. Sushil kumar Kasliwal Directors, would retire by rotation, and
being eligible, offers themselves for re-appointment.
Directors' Responsibility Statement:
The Directors hereby confirm: -
i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii) that the Directors have selected such accounting policies 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 at the end of the financial year and of the
profit or loss of the Company for that period;
iii) 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, for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities; and
iv) That the Directors have prepared the annual accounts on a 'going
concern' basis.
Corporate Governance:
A separate section on Corporate Governance and a certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchanges, form part of the Annual Report.
Cost Audit:
The Company has appointed M/s. N.Ritesh & Associates as the Cost
Auditor to audit the cost records maintained by the Company for the
year 2010-11 as per the direction received from the Central Govt., in
respect of conducting the audit of cost records maintained by the
Company.
Auditors:
M/s. Chaturvedi & Co, Chartered Accountants, retire at the forthcoming
Annual General Meeting and being eligible offer themselves for
re-appointment.
Appreciation:
Your Company and its Directors wish to place on record their sincere
appreciation for the support and assistance extended by different
Central and State Government Departments and Agencies, Banks and
Financial Institutions , Insurance companies, Customers and Vendors.
Your Directors are thankful to the esteemed shareholders for their
continued support and confidence reposed in the company and its
management. Your Directors also wish to place on record their deep
sense of appreciation to all the employees of the Company for their
outstanding contribution towards the operations of the Company.
For and on behalf of the Board of Directors
Place: Mumbai ANAND AGARWAL
Date: 30.05.2011 CHAIRMAN
Mar 31, 2010
The Directors have pleasure in presenting the Nineteenth Annual Report
of the Company together with the Audited Balance Sheet as at 31st
March, 2010 and the Profit and Loss Account for the year ended on that
date.
Financial Results:
(Rs. in Lakhs)
Particulars Current Year Previous Year
Ended Ended
31.03.2010 31.03.2009
Export Sales 160.03 105.60
Local Sales 2877.89 2220.07
Other Income 98.15 126.77
Profit before Interest 176.69 34.37
and Depreciation
Interest 9.07 -
Profit after Interest 167.62 34.37
Depreciation 65.07 48.93
Profit / (Loss) before Tax 102.55 (14.56)
Provision for Tax 18.00 6.32
Profit / (Loss) after Tax before 84.55 (20.88)
extra ordinary items
Extra Ordinary Items (Net) - 75.91
Net Profit 84.55 55.03
Add: Brought forward from 525.68 470.65
the previous year
Transfer from General Reserve - -
Amount available for 610.23 55.03
appropriation
Balance carried to 610.23 525.68
Balance Sheet
Dividend:
Considering the need for conserving the resources for expansion of
business activities, your Directors have decided not to recommend for
payment of any dividend on the Equity Shares for the year ended 31st
March 2010.
Operations:
There is substantial improvement in the performance during the year
under review in comparison to previous year. The global economic
conditions continue to remain subdued for the major part of the year.
However some amount positive signs of economic recovery were seen in
U.S.A and Japan. Further the performance of the Garment unit has also
shown some remarkable improvement in terms of productivity and
profitability. The overall turnover has registered a growth level of
around 31% in comparison to previous year. Similarly the Garment unit
have also recorded an increase in the turnover from Rs. 5.66 crores to
Rs. 10.67 crores thus registering growth of almost 89% in comparison to
last year.
The process house as well as garment units are now fully stabilized and
the Company is now poised to take full advantage of its strength in the
production of quality fabrics and Garments. Based on these strengths,
the company is now venturing into Retail as well as Buying House
activities.
These business activities will enable the company to utilize its
facilities to derive the maximum benefit in terms access to market as
well as synergy in the production and capacity utilization. Further
regarding the pending EPCG License matter, the company continues to
pursue with Joint DGFT, Mumbai to resolve the issue at the earliest.
Export Sales:
Even though there is some significant increase in the exports sale
during the year under review in comparison to previous year, the
overall export performance is not as per the anticipated levels. The
recessionary trend in the U.S. and Europe had severe impact on the
export performance of most of the textile units particularly in the
garment sector. In spite of some stimulus measures announced by the
government for the textile sector, the impact of the same is yet to
reflect in the workings of the garment units in the country. Apart from
this the unit value realization of the export orders are far from the
breakeven levels for our units to execute under the prevailing
conditions. Even the foreign exchange market is still not conducive for
the exporters as the US $ rates are not very attractive and stable.
The company is now taking all possible measures as the global
conditions are showing signs of recovery particularly in the U.S.A and
Japan. However Europe is still reeling under certain kind of
recessionary conditions particularly in Greece, Spain etc .and the huge
stimulus measures announced to bail out these economies will have some
positive impact on the exports to these countries in the coming years.
Considering all these aspects, the company is now directly taking
exports Business from all over the world through its new Apparel Buying
House division. This new division would be sourcing orders for
arranging the supply through various manufacturers apart from providing
business to the companys garment division on selective basis depending
upon the profitability and volume of business.
Apart from this the company is also exploring the opportunities to
expand its client base in African and Latin American countries
including Mexico etc. to increase the scope of the export business.
India is gradually becoming a global hub for sourcing Garments and
Apparels by buyers from all over the world. In view of these emerging
trends in the global market, the company has drawn up plans to increase
its exports business by manifold in the coming years. Apart from this
the company has installed some additional machinery in the printing,
embroidery and other sections to cater to the requirements of some of
the best international brands in the premium segments. Eventually the
company is planning to export at least 50% of its production capacity
to the various buyers all over the world with different product ranges.
Expansion:
There are no major expansion plans or any other form of investment
envisaged for the company except adding some additional machineries and
other balancing equipments to strengthen the production line as well as
to provide some value addition to the garment division. However the
company has started the following activities to enhance the market
share as well as to increase the overall profitability of the company.
1) Retail Division:
The company has started the retail division under the Brand Name "RIOT"
.The Company would set up chain
of Retail Stores in different part of the country to sell directly to
the retail customers. Apart from this the company would also be setting
up Franchise shops to sell the products directly to the retail
customers. The initial investment for this new division would be made
by the company and as per the projections all further investments would
be generated by the division itself from its operations.
2) Apparel Buying House:
The Company has set up another division primarily to source the
materials for various buyers from different part of the world. Apart
from providing some good export business to our garment division this
new division would be sourcing Apparels and Garments for various buyers
against their requirements from local manufacturers. The investment
for this new division is not very significant and would be made by the
company from internal sources.
Industrial Relations:
Industrial relations with the employees at the Companys plant at MIDC,
TTC Industrial Area, Pawne Village, Navi Mumbai, continue to remain
healthy and cordial.
Personnel:
The statement showing the requisite information in compliance with the
provisions of Section 217 (2A) of the Companies Act, 1956 is not
furnished herewith, as there are no employees covered by that section.
Deposits:
The Company has not accepted any deposits within the meaning of Section
58A of Companies Act, 1956 and the rules made thereunder.
Energy, Technology and Foreign Exchange:
The particulars relating to conservation of Energy, Technology
Absorption and Foreign Exchange earnings and outgo as required under
Section 217 (1) (e) of the Companies Act, 1956 is given in the Annexure
forming part of this report.
Directors:
During the year under review Shri Anand Agarwal relinquished his post
as Managing Director and at the request of the Board agreed to continue
as the chairman of the Board . In his place Shri Pavan Agarwal is
appointed as Managing Director with effect from 1st February, 2010.
In accordance with the provisions of the Companies Act 1956 and the
Articles of Association of the Company Shri Vivek Gangwal and Shri
Anand Agarwal, Directors, would retire by rotation, and being eligible,
offers themselves for re-appointment.
Directors Responsibility Statement:
The Directors hereby confirm: -
i) that in the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
ii) that the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit or loss of the Company for that period;
iii) 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, for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities; and
iv) That the Directors have prepared the annual accounts on a going
concern basis.
Corporate Governance:
A separate section on Corporate Governance and a certificate from the
Auditors of the Company regarding compliance of conditions of Corporate
Governance as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchanges, form part of the Annual Report.
Cost Audit:
The Company has appointed M/s. Ritesh & Associates as the Cost Auditor
to audit the cost records maintained by the Company for the year
2009-10 as per the direction received from the Central Govt., in
respect of conducting the audit of cost records maintained by the
Company.
Auditors:
M/s. Chaturvedi & Co, Chartered Accountants, retire at the forthcoming
Annual General Meeting and being eligible offer themselves for
re-appointment.
Appreciation:
Your Company and its Directors wish to place on record their sincere
appreciation for the support and assistance extended by different
Central and State Government Departments and Agencies, Banks and
Financial Institutions , Insurance companies, Customers and Vendors.
Your Directors are thankful to the esteemed shareholders for their
continued support and confidence reposed in the company and its
management. Your Directors also wish to place on record their deep
sense of appreciation to all the employees of the Company for their
outstanding contribution towards the operations of the Company.
For and on behalf of the Board of Directors
Place: Mumbai ANAND AGARWAL
Date: 28.05.2010 CHAIRMAN
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