DIRECTORS' REPORT TO THE MEMBERS Your Directors have pleasure in presenting the Thirty Seventh Annual Report and the audited accounts for the year ended 30th June 2015. OPERATIONS Despite the slowdown in the consumer demand witnessed during most part of the year under review, your Company could maintain a growth in the businesses of both sewing machines and domestic appliances. The financial year ended 30th June 2015 ended with a total turnover of Rs. 28,497 lacs from Rs.24,335 lacs in the previous year showing a growth of 17 % while revenue from Sewing Machines and Related Accessories Business at Rs.25,188 lacs increased by 14% over the prior year, the Domestic Appliances Business, a relatively new business segment of your Company, at Rs. 3,309 lacs grew by 48%. The Domestic Appliances Business accounted for 11.6 % of the total business of your Company in the year under review and thus becoming a separate reportable segment from this year. The Company continued to expand its presence Pan India but keeping focus on select markets and also revamping the existing distribution network. Your Company continued to strengthen its operating structure in the fields of logistics, after sales service and marketing services to expand the businesses resulting in increase in the operational costs. The Company however is determined to make the domestic appliances vertical also a profitable segment by optimizing these costs in future. The focus will remain in delivering quality products and efficient services to the Customers combined with aiming at improving the operating margins and also optimizing the use of working capital. More details on operations have been covered in the Management Discussions and Analysis forming part of this report. The profit before tax and after tax for the year amounted to Rs. 960 lacs (after exceptional items of Rs. 20 lacs) (Rs. 920 lacs in the previous year) and Rs. 640 lacs (Rs. 697 lacs in the previous year) respectively. The charge of deferred tax expense during the year under review was relatively higher compared to the prior year as in the prior year this was after netting a credit taken for the deferred tax asset. INDUSTRIAL RELATIONS Industrial relations generally remained cordial and harmonious during the year. CHANGE IN THE NATURE OF BUSINESS There has been no change in the nature of the business of the Company. DIVIDEND The Board of Directors, at their meeting held on 27th August, 2015 recommended a dividend of Rs. 2.5 per equity share of face value of Rs. 10 each for the financial year ended 30th June, 2015. The dividend, if approved at the forthcoming Annual General Meeting, will be paid to the shareholders as on the close of business on 23rd October, 2015 TRANSFER TO RESERVES The Company proposes to transfer Rs 64 lacs to the General Reserve out of the amount available for appropriation. FIXED DEPOSITS The Company has repaid all depositors along with interest due as per the directions of the Hon'ble Delhi High Court except for the unclaimed amount of Rs. 2.35 lacs (Principal) and Rs. 1.23 lacs (Interest) to 19 depositors who have not furnished the original deposit receipts or indemnities. These depositors have not claimed the amount despite reminders. Out of this amount, Rs. 43,000 (including interest of Rs. 13,000) will be deposited with the Investors protection Fund of the Central Government within the prescribed time in the current year and the balance amount in the ensuing year. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS During the year under review, your Company has not made any loan, or given any guarantee or provided any security and/or made investments and thus the compliance of Section 186 of the Companies Act, 2013 is not applicable. SUBSIDIARY COMPANIES Himec India Limited and Singer India Trading Limited, the two wholly owned subsidiaries of the Company had fled for voluntary winding up under the provisions of the Companies Act, 1956. The liquidator appointed by the shareholders of Himec India Limited and Singer India Trading Limited has completed all formalities and filed his Report with the Official Liquidator. Himec India Limited has since been dissolved effective from 25-11-2014. The winding up matter of Singer India Trading Limited is pending with the Official Liquidator as of now. DEPOSITORY SYSTEM The Company's shares are available for dematerialization with National Securities Depository Ltd. (NSDL) and Central Depository Services (I) Ltd. (CDSL) 99.56% of the total shareholding of the Company was held in dematerialized form as on 30th June, 2015. DIRECTORS Mr. K K Gupta relinquished his position as the Director and Non - Executive Chairman of the Company effective closing hours of 31st December 2014. The Board of Directors place on record their deep appreciation of Mr. Gupta's long association with the Company in various capacities and thank Mr. Gupta for his long and remarkable contribution made to the Company in bringing it back to the growth track. Mr. P N Sharma was appointed as the Non - Executive Chairman of the Company effective 1st January 2015 replacing Mr. Gupta. Mr. Gavin Walker retires by rotation at the ensuing Annual General Meeting and being eligible offer for reappointment. The profile of the Director to be re-appointed has been given in the Corporate Governance Report. The Board recommends the above re-appointment. Resolution seeking your approval on this item along with the terms and conditions are included in the Notice convening the Annual General Meeting. DECLARATIONS BY INDEPENDENT DIRECTORS Your Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges. Independent Directors are familiarized with their roles, rights and responsibilities as well as with the nature of industry and business model through induction program at the time of their appointment as Directors and through presentations on economy & industry overview, key regulatory developments, strategy and performance which are made to the Directors from time to time. The terms & conditions of appointment of Independent Directors can be accessed at <http://www.singerindia.net> /?page_id=41/#termconditions KEY MANAGERIAL PERSONNEL Pursuant to Section 203 of the Companies Act, 2013, the Company has designated Mr. Subhash Chand Nagpal as Chief Financial Officer w.e.f. 06.05.2015. Mr. Ashish Srivastava had resigned from the post of Company Secretary w.e.f. 28.07.2015 and Mr Richin Sangwan has been appointed as Company Secretary w.e.f. 29.07.2015 and designated as the Key Managerial Personnel of the Company DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134 of the Companies Act, 2013 with respect to Directors' Responsibility Statement, it is hereby confirmed: a. that in the preparation of the annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. that such accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 30th June, 2015 and of the profit of the Company for the year ended on that date; c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. that the annual financial statements have been prepared on a going concern basis; e. that proper internal financial controls were in place and that the financial control were adequate and were operating effectively; f. that proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. BOARD EVALUATION The Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Board functioning such as composition of the Board & Committees, experience & competencies, performance of specific duties & obligations, contribution at the meetings and otherwise, independent judgment, governance issues etc. The evaluation criteria of the company can be accessed at http://www.singerindia.net/?page_id=41/#policies NOMINATION AND REMUNERATION POLICY The Board, on the recommendation of the Nomination & Remuneration Committee, has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The remuneration paid to the Directors and the Senior Management is as per the Managerial Remuneration Policy of the Company. Brief details of the Managerial Remuneration Policy are provided in the Corporate Governance Report. The Nomination & Remuneration Policy of the Company can be accessed at <http://www.singerindia.net/Ppage_> id=41/#policies INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report. RISK MANAGEMENT Your Company had formed a Risk Management Committee consisting of the Managing Director and Executives of the Company. The Committee reports to the Audit Committee. The Committee identifies, evaluate business risks and opportunities. This Committee has formulated and implemented a policy on risk management to ensure that the Company's reporting system is reliable and that the Company complies with relevant laws and regulations. The Board of Directors of your Company is of the opinion that, at present, there are no elements of risks which may threaten the existence of the Company. The Risk Management Policy of the Company can be accessed at <http://www.singerindia.net/?page_id=41/%23> policies CORPORATE SOCIAL RESPONSIBILITY INITIATIVES (CSR) The Company has constituted a Corporate Social Responsibility (CSR) Committee and has framed a CSR Policy. The brief details of CSR Committee are provided in the Corporate Governance Report. The Annual Report on CSR activities provided in Annexure 3 to this Report. The CSR Policy is made available on the website of the Company. During the year under review, the Company had taken an initiative to run skill development centers for the benefit of the underprivileged women whereby the women are being trained to develop their skills in the field of sewing, embroidery work and other related work to make them self-proficient and independent working member of their family. The Company spent Rs. 17.36 lacs during the year ended 30th June 2015 on these skill development centers. This was slightly below the stipulated minimum requirement at 2% of profts as required under and the shortfall amount is Rs.76,000 as the work on certain skill development centers could not fnish by the end of the year .The Board is confident that the shortfall would be covered in the next financial year. The CSR Policy of the Company can be accessed at <http://www.singerindia.net/?page_id=43> CORPORATE GOVERNANCE As required under Clause 49 of the Listing Agreement, a separate report on Corporate Governance is enclosed as a part of this Annual Report, duly certified by M/s Ray & Ray, Chartered Accountants, the Auditors of the Company, confirming the compliance of the conditions of Corporate Governance. MANAGEMENT DISCUSSION AND ANALYSIS REPORT The Management Discussion and Analysis Report as required under the Listing Agreement with Stock Exchange forms part of this report and annexed thereto. 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 workplace a new Act namely 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. 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. The Prevention of Sexual Harassment Policy of the Company can be accessed at <http://www.singerindia>. net/?page_id=41/#policies EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in Form MGT-9 are provided in Annexure 2 of the report. RELATED PARTIES TRANSACTIONS All the related party transactions of the Company are reviewed by the Audit Committee and presented to the Board on a quarterly basis. These transactions were at arm's length basis and in the ordinary course of business and are in compliance with the provisions of Section 188 of the Companies Act, 2013 read with Companies (Meeting of Board and its Powers) Rules, 2014 and Clause 49 of the Listing Agreement. There were no materially significant related party transactions entered into by the Company so Form AOC-2 under these rules is not applicable to the Company, Moreover the disclosures relating to related parties is explained in Note 43 in the Notes to Accounts attached to the Balance sheet. The policy on Related Party Transactions is uploaded on the Company's website <http://www.singerindia.net> /?page_id=41/#policies VIGIL MECHANSISM/WHISTLE BLOWER POLICY The Company has adopted a whistle blower policy and has established the necessary vigil mechanism for employees and directors to report concerns about unethical behavior. No person has been denied access to the chairman of the Audit Committee. The said policy is uploaded on the website of the Company at <http://www.singerindia.net/?page_id=3759> During the year under review, there were no cases pertaining to whistle blower policy. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and the Company's future operations. STATUS ON THE REHABILIATION SCHEME APPROVED BY THE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR) The Hon'ble Board for Industrial and Financial Reconstruction (BIFR) in the hearing held on 28th February 2013 discharged your Company from the purview of SICA / BIFR. The appeals fled by the Company and some of the unsecured creditors on the quantum of amount to be paid to them under the Scheme sanctioned by BIFR are pending adjudication before the Hon'ble Appellate Authority for Industrial and Financial Reconstruction (AAIFR). STATUTORY AUDITORS AND AUDITORS' REPORT The Statutory Auditors of the Company, M/s Ray & Ray, Chartered Accountants were appointed by the members in the 36th Annual General Meeting for a period of 3 years until the conclusion of the 39th Annual General Meeting subject to the ratification by the shareholders at every Annual General Meeting. The Company has received a certificate from the Auditors to the effect that the appointment, if made would be within the limits prescribed under Section 141(g) of the Companies Act' 2013. Members' ratification for the appointment of Statutory Auditor has been sought in the Notice convening the Annual General Meeting of the Company. The report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. SECRETARIAL AUDIT REPORT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules made there under, the Company had appointed Mr. H O Gulati, Practicing Company Secretary to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year ended 30th June 2015 is provided as Annexure 1. There were no qualifications, reservation or adverse remarks given by Secretarial Auditor of the Company. INTERNAL AUDIT During the year your Company has engaged the services of M/s S S Kothari Mehta & Company, Chartered Accountants as Internal Auditors to carry out the internal audit of the Company. The reports of the internal auditors, along with comments from the management are placed for review before the Audit Committee. The Audit Committee in consultation with the Statutory Auditor also scrutinizes the audit plan and the adequacy of internal controls. PARTICULARS OF EMPLOYEES No employee of the company was drawing remuneration of sixty lacs or more, if employed for full year or five lacs or more if employed for part of the year, so information required under Section 197 of the Companies Act, 2013 read with rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable on the company.. Information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in Annexure 4 to this Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO A statement giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo in accordance with Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is provided in Annexure 5 to this Report. ACKNOWLEDGEMENT The Directors place on record their appreciation for the assistance and co-operation received from the Government of J & K, SINGER, the Company's valued customers, members, investing public, employees, bankers, suppliers and dealers/distributors. For and on behalf of the Board of Directors of SINGER INDIA LIMITED P N Sharma CHAIRMAN Place: New Delhi Date: 27th August, 2015 |