DIRECTORS' REPORT Your Directors are pleased to present the 30th Annual Report of the Company together with its audited financial statements for the year ended March 31, 2015. B. REVIEW OF PERFORMANCE Your Directors wish to inform that during the financial year ended March 31, 2015 the net sales of the Company with revenues from operations aggregated to Rs..12003.56 lacs as against 12922.17 lacs during the previous year. During the year under the review Profit before tax was Rs..779.68 lacs lower by 39.36 % over the previous year. Consequently, the Profit after Tax for the year was 514.80 lacs as compared to 906.18 lacs in the previous year. The main reasons for decline in financial performance can be attributed to market conditions, increase in input costs and overheads and higher depreciation provisions. C. TRANSFER TO RESERVES The Company has transferred Rs..100 lacs to Reserves for the Financial Year 2014-15. D. DIVIDEND Your Directors are pleased to recommend a Dividend of 0.20 (20%) per Equity Share having face value of 1/- each for the Financial Year 2014-15, subject to the approval of Members at the ensuing Annual General Meeting. Dividend together with Tax thereon for the year entails cash outflow of Rs..20,85,426/- (Rs..17,37,940/- will be paid as Dividend and Rs..3,47,486/- will be paid as Dividend Distribution Tax). Dividend will be paid to Members, whose names appear in the Register of Members as on September 7, 2015. In respect of shares held in dematerialised form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited. E . STATE OF COMPANY AFFAIRS Growth of the Company is highly dependent on the textile industry situation, with large customer base for the Company's products. During the financial year 2014-15, the Company could not achieve the target growth in the sales revenues on account of competitive market situation and overall stagnation faced by textile industry. High volatility in prices of intermediate products were also responsible for decline in the sales volume of dyes and pigments. During the year, though there was increase in sales volume of Ink Products for digital printing, the prices of Ink products reduced significantly due to entry of new players in the industry. The Company expects a significant shift towards digital printing in the textile industry leading to sizeable growth in the consumption of Ink Products. The Company has well positioned itself for digital printing, the prices of Ink products for catering such projected jump in demand. During the year under review, the Company has incurred the capital expenditure of Rs. 153.51 lacs towards improvements in production capacity and testing facilities. There was no change in business activity of the Company during the Financial Year 2014-15. F. CHANGES IN THE SHARE CAPITAL There was no change in share capital of the Company during the Financial Year 2014-15. G . HUMAN RESOURCE MANGEMENT A detailed section on Human Resource/Industrial Relations is provided in the Management Discussion and Analysis Report, which is a part of this Annual Report (Annexure - 6). H . PARTICULARS OF EMPLOYEES Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with the Rules 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report (Annexure - 1). The Company did not have any employee who was employed throughout the Financial Year 2014-15 and was in receipt of remuneration not less than Sixty Lacs. The Company also did not have any employee who was employed for the part of the Financial Year 2014-15 and was is in receipt of remuneration for any part of that year which in aggregate was not less than Five Lacs per month. No employee of the Company who was employed throughout the Financial Year 2014-15 or a part thereof was in receipt of remuneration in that year which, in the aggregate, or as the case may be, at a rate which, in aggregate, is more than the remuneration of the Managing Director and holds by himself or along with his/her spouse and dependent children not less than two percent of equity shares in the Company. I. CORPORATE SOCIAL RESPONSIBILITY Your Company strongly believes and emphasis on returning back to the society the benefits earned by it through business operated. Your Company contributes to society by way of contribution for promotion of education through Sharadchandra Shoorji Trikamdas Charitable Trust; who in turn contribute to the Deccan Education Society, which is in the process of setting up an educational institution at Mumbai. In compliance with the provisions of Section 135 of the Companies Act, 2013, the Company has constituted a Corporate Social Responsibility Committee comprising of following three directors: Details about the CSR Policy and initiatives taken by the Company on CSR during the year are available on our website having weblink www.jaysynthdyestuff.com/pdf/csr policy.pdf. The Report on our CSR activities and its implementation is annexed to this report (Annexure - 2). J. CORPORATE GOVERNANCE The Company aims and constantly strives in maintaining the highest standards of Corporate Governance practices. The report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the annual report. A certificate from the Practicing Chartered Accountant regarding compliance of conditions of Corporate Governance is also annexed to the report on Corporate Governance (Annexure - 3). Board Meetings The Board of Directors met Four (4) times during the Financial Year 2014-15. The details of which are given in the Corporate Governance Report which forms part of Directors' Report. Nomination and Remuneration Policy The Board has, on the recommendation of the Nomination and Remuneration Committee adopted the following policies: 1 Nomination and Remuneration Policy for Directors, Key Managerial Personnel and other employees. 2 Policy For Determining Qualifications, Positive Attributes, Independence of an Independent Director and Criteria For Evaluation is annexed to Directors' Report (Annexure - 4 & 4.1) Familiarisation Programme for Independent Directors' Every Independent Director is issued a Letter of Appointment setting out in detail, terms of appointment, duties and responsibilities of Director. In compliance with the provisions of the Clause 49 of the Listing Agreement, the Company had issued formal letters of appointment to the Independent Directors'. The terms and conditions of appointment of Independent Director is available on the Company's website & can be accessed at <http://www.jaysynthdyestuff.com/pdf/> Appointment Letters JDIL.pdf The induction for Independent Directors includes interactive sessions with Executive Director, Business and Functional Heads. The Independent Directors are also informed regarding all the updates in matters of Companies Act, 2013 and other applicable laws as and when required. The details of familiarisation programme has been displayed on the company's website link: <http://www.jaysynthdyestuff. com/pdf /FAMILIARISATION> PROGRAMME.pdf. Annual Performance Evaluation of Board, Committees of Board and Individual Directors In accordance with the provisions of Section 178 of the Companies Act, 2013 read with Clause 49 of the Listing Agreement, the performance evaluation was carried out as under: Board: In accordance with the criteria recommended by the Nomination and Remuneration Committee, the Board evaluated its own performance, having regard to various criteria such as composition of the Board, Board process, decision making process at the Board meeting, information shared at the Board, frequency of the Board Meeting and updation of knowledge relating to the business and laws at the Board meeting. Independent Directors at their separate meeting, reviewed the performance of the Board, Chairman of the Board. The Board and the Independent Directors were of the view that performance of the Board of Directors as a whole was satisfactory. Committees of the Board: The performance of the Audit Committee, the Corporate Social Responsibility Committee, Risk Management Committee, the Nomination and Remuneration Committee and the Stakeholders Relationship Committee was evaluated by the Board having regard to various criteria such as composition of the Committee, Committee process, decision making process at the Committee meeting, information shared at the Committee meeting, frequency of the Committee Meeting and updation of knowledge relating to the business and laws at the Committee meeting etc. The Board was of the unanimous view that all the committee were performing their functions satisfactorily and according to the mandate prescribed by the Board under the regulatory requirements including the provisions of the Act, the Rules framed thereunder and the Listing Agreement. Individual Directors: a) Independent Directors: In accordance with criteria recommended by the Nomination and Remuneration Committee which was approved by the Board, the performance of each independent director was evaluated by entire Board of Directors (excluding the Director being evaluated) on various parameters like as educational and professional background, industry experience standing in the profession. The Board expressed its satisfaction on performance of the Independent Directors. The Board also acknowledged and appreciated the inputs and expertise provided by all the Independent Directors on matters relating to business of the Company. b) Non Independent Directors: In accordance with the criteria recommended by the Nomination and Remuneration Committee which was approved by the Board, the performance of each non independent director was evaluated by the Board of Directors (excluding the Director being evaluated) the various criteria considered for the purpose of evaluation included educational and professional background, industry experience standing in the profession. Further Independent Directors at its separate meeting also evaluated the performance of non independent directors. The Board and Independent Director expressed their satisfaction on performance of the Non Independent Director. Detail regarding criteria for evaluation is annexed to the Directors' Report (Annexure - 4.1). Declaration from Independent Director The Company has received the necessary declaration from each independent director in accordance with Section 149 (7) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, stating that he meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Directors and Key Managerial Personnel During the Financial year 2014-15, the Company had appointed Shri. Sharadchandra S. Kothari (DIN: 00184421) as a Managing Director for a period of 5 (Five) years commencing from November 13, 2013 to November 12, 2018 by passing a Special Resolution at the Annual General Meeting held on September 19, 2014. Further the Company had appointed Shri. Rajendra M. Desai (DIN: 00403784), Shri. Prakash M. Kale (DIN: 00151379), Shri. Bhavesh V. Panjuani (DIN: 03188032) and Shri. Kulinkant N. Manek (DIN: 06374052) as Independent Directors for a period of 5 (Five) years commencing from September 19, 2014 to September 18, 2019 by passing an Ordinary Resolution at the Annual General Meeting held on September 19, 2014. Company had appointed Shri. Mangesh N. Patil as Chief Financial Officer (CFO) with effect from May 28, 2014. Company had appointed Smt. Jyoti N. Kothari (DIN:07143429), as an Additional Director under Woman and Non Executive category w.e.f. March 30, 2015, whose office is upto the date of the ensuing Annual General Meeting. Shri. Sharadchandra S. Kothari (DIN: 00184421), Managing Director of the Company, will retire by rotation at the ensuing Annual General Meeting in terms of Section 152 of the Companies Act, 2013 and being eligible, offers himself for reappointment. The Board of Directors of the Company recommends his re-appointment. Shri. Sharadchandra S Kothari after being reappointed as a director immediately on retirement by rotation, shall continue to hold his office of Managing Director, and his reappointment as such director shall not be deemed to constitute a break in his appointment as Managing Director. Shri. Chandrakant C. Bhagwat, Company Secretary and Compliance officer of the Company resigned with effect from April 25, 2015 and Company had appointed Ms. Pooja P. Niphadkar as a Company Secretary and Compliance Officer with effect from May 28, 2015. Directors' Responsibility Statement In compliance of Section 134(3)(c) and 134(5) of the Companies Act, 2013, the Directors hereby confirm: a. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b. that we 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; c. that proper and sufficient care has been taken 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; d. that the annual accounts have been prepared on a going concern basis; and e. that proper internal financial controls were laid down and that such internal financial controls are adequate and were operating effectively. f. that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively. Audit Committee The Company in compliance with Section 177 of the Companies Act, 2013, read with applicable provisions thereof and Clause 49 of the Listing Agreement reconstituted Audit Committee. It comprises of three Non-Executive and Independent Directors, viz; Shri. Prakash M. Kale, Shri. Rajendra M. Desai and Shri. Kulinkant N. Manek. The Chairman of the Committee is Shri. Rajendra M. Desai. The terms of reference of the Audit Committee are in accordance with the provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement pertaining to Corporate Governance Norms. In the meeting of the Board of Directors of the Company held on May 28, 2014, the Board of Directors aligned the terms of reference and scope and functioning of the Audit Committee with the new requirements of the Companies Act, 2013 and Listing Agreement norms. The Company Secretary acts as Secretary to the Committee. Adequacy of Internal Financial Controls The Company has adequate system of internal controls to ensure that all the assets of the Company are safeguarded and are productive. Necessary checks and balances are in place to ensure that transactions are adequately authorized and reported correctly. The Internal Auditor of the Company conduct Audits of various departments to ensure that the necessary controls are in place. The Audit Committee of the Board reviews these and the Company, when needed, takes corrective actions. Related Party Transactions In compliance with the requirements of the Companies Act, 2013 and Listing Agreement, your Company has formulated a Policy on Related Party Transactions which is also available on the website of the Company at <http://www.jaysynth.com/> pdf/Related party transaction policy.pdf. Further all the Related Party Transactions during the year were done in the ordinary course of business and were on arm's length basis within the meaning of the Companies Act, 2013. The disclosure of Related Party Transactions as required under the Section 134(3)(h) of the Companies Act, 2013 in Form AOC 2 annexed to the Directors' Report (Annexure - 5). Material Related Party Transactions within the meaning of Clause 49 of the Listing Agreement with BSE Ltd. i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, were entered during the year by the Company, for which approval of the shareholders of the Company is sought at the ensuing AGM. Vigil Mechanism/Whistle Blower Policy In compliance with the provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Company has formulated and adopted a whistle blower policy which will enable all the employees, directors and other stakeholder to raise and report their genuine concerns. The Company has uploaded the Whistle Blower Policy/ Vigil Mechanism Policy on the website of the Company. The web link of the Policy is <http://www.jaysynthdyestuff.com/pdf/Whistle> Blower Policy.pdf. There were are no personnel who were denied access to access to Audit Committee during the Financial Year 2014-15. Prevention of Sexual Harassment at Workplace The Company has in place a Policy on prevention, prohibition and redressal of sexual harassment at work place in line with the requirements of the sexual harassment of Women at Workplace [Prevention, Prohibition & Redressal] Act, 2013 (the "Act") and Rules made there under constituted an Internal Complaints Committee (ICC). The Company has zero tolerance towards sexual harassment and values dignity of individuals and strives to provide a safe and respectable work environment for all its employees. The Company is committed to providing an environment which is free of discrimination, intimidation and abuse. During the financial year 2014-15, the Company has not received any complaint from any employee during the financial year 2014-15. Risk Management Committee Every Company's activities are exposed to various risk and concerns associated such as market risks, risk of changes in monetary policy. The Company has to identify such risks and take actions to mitigate the same. With a view of the same though not mandatory company a good governance practice formulated a Risk Management Committee. The Risk Management Committee had proposed a Risk Management Policy for the Company to the Board of Directors, which was later adopted by the Board at its meeting. The Policy entails a process of management of risks associated with the business of the Company. Risk Management is an ongoing process within the organisation. The Company has a robust risk management framework to identify, assessment, reporting and monitoring of the risk associated with the business of the Company. The elements of risk identified by the Board as required under Section 134(3)(n) of the Companies Act, 2013, are listed under the Management Discussion and Analysis Report under the heading - Risks and Concerns (Annexure - 6). Subsidiaries, Joint Ventures or Associate Companies No company became or ceased to be a subsidiary, joint venture or associate company during the Financial Year 2014-15. Auditors Statutory Auditors The Auditors, M/s. C.J. Shah & Associates, Chartered Accountants, Mumbai having Firm Registration No. 109522W and holding valid Peer Review Certificate shall retire at the ensuing Annual General Meeting and, being eligible, offers himself for reappointment for a period of one year from the conclusion of this Annual General Meeting [AGM] till the conclusion of next AGM. As per the requirement of Section 139 of the Companies Act, 2013, the Company has already obtained consent and a written certificate from them to the effect that their appointment, if made, would be in accordance with the conditions prescribed. The Notes on financial statement referred to in the Auditor's Report are self-explanatory and do not call for any further comments. The Auditor's Report does not contain any qualification, reservation or adverse remark. Cost Audit The Cost Audit Report for the Financial Year 2013-14 was filed on due date. For the year under review the cost audit is not applicable pursuant to the amendment in Companies (Cost Records and Audit) Rules, 2014. Secretarial Audit Section 204 of the Companies Act, 2013 inter-alia requires every listed company to conduct Secretarial Audit and annexe with its Directors' report, a Secretarial Auditor Report given by a Company Secretary in practice, in the prescribed form. The Board of Directors appointed M/s. Kaushal Dalal & Associates, Practicing Company Secretaries as a Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year 2014-15 and their report is annexed to this Directors' report. (Annexure 7). Secretarial Auditor has mentioned only one observation in its report, which is regarding non-filing of MGT-10 for intimating the change in shareholding of more then 2% in Promoter Group. In connection, with the Secretarial Auditor's observation in the report, it is clarified that the nonfiling of MGT -10 in respect of change in the shareholding position under the Promoter Group within 15 days from the date of the acquisition of the shares i.e July 25, 2014 is technical lapses and has occurred inadvertently. Extract of Annual Return Extract of Annual Return of the Company in Form MGT-9 is annexed to this Report. (Annexure 8) Significant & Material Orders passed by the Regulators or Courts. During the Financial Year 2014-15 there were no significant or material orders passed by any Court or Regulators involving the Company. Particulars of Loans, Guarantees or Investments There have been no loans, guarantee or investments made by Company under Section 186 of the Companies Act, 2013 during the Financial Year 2014-15. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo: The information regarding conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 and Rule 8 of the Companies (Accounts) Rules, 2014 is annexed to this Report. (Annexure 9). Deposits covered under Chapter V of the Companies Act, 2013 Your Company has not accepted any public deposits under Chapter V of Companies Act, 2013, during the Financial Year 2014-15. K. GREEN INITIATIVES Ministry of Corporate Affairs encourages and supports green initiatives in Corporate Governance by allowing paperless compliances by Companies through electronic mode. Your Company supports the Green Initiative and has accordingly decided to send all communications to its shareholders to their respective registered E-mail addresses. Your Company appeals to its shareholders, who are yet to register their E-mail addresses and take necessary steps for registering the same so that they can also become a part of the green initiative and contribute towards a greener environment. L. ACKNOWLEDGEMENT AND APPRECIATION Board of Directors acknowledges and places on record their appreciation towards its employees at all levels for their hard work, solidarity, cooperation and support. Board also acknowledges and places on record their appreciation to Customers, Vendors, Dealers, Investors, Business Associates, Bankers, Government and Regulatory Authority and BSE Limited for their continued support. For JAYSYNTH DYESTUFF (INDIA) LIMITED Parag S. Kothari Chairman & Joint Managing Director DIN:00184852 Date : June 25, 2015 Place : Mumbai |