Your Directors have pleasure in presenting their 33rd Annual Report on the business andoperations of the Company and Audited Statement of Accounts for the year ended 31st March2019.
1. FINANCIAL HIGHLIGHTS:
The Board's Report is prepared based on the stand alone financial statements of theCompany.
| || || ||(Rs. in Lacs) |
|Sr. No. ||Particulars ||Year ended 31.03.2019 ||Year ended 31.03.2018 |
|1. ||Revenue from operations ||907.07 ||972.37 |
| ||Other Income ||6.71 ||2.25 |
| ||Total revenue ||913.78 ||974.62 |
|2. ||Total Expenditure || || |
| ||i) Cost of material consumed ||9.82 ||2.84 |
| ||ii) Purchase of stock ||9.15 ||30.84 |
| ||iii) Manufacturing and operating cost ||106.92 ||38.48 |
| ||iv) Changes in inventories ||(73.98) ||(21.63) |
| ||v) Employee benefit Expenses ||217.69 ||191.10 |
| ||vi) Financial cost ||77.57 ||71.27 |
| ||vii) Depreciation ||28.64 ||30.49 |
| ||viii) Other Expenditure ||329.43 ||282.71 |
| ||Total ||705.24 ||626.10 |
|3. ||Profit Before Tax ||208.54 ||348.52 |
|4. ||Provision for taxation || || |
| ||i) Current Tax ||57.93 ||100.89 |
| ||ii) Deferred Tax ||(1.12) ||4.54 |
| ||iii) Earlier years Tax ||1.63 ||- |
|5. ||Profit After Tax ||150.10 ||243.09 |
|6. ||Balance carried from previous year ||192.19 ||145.84 |
|7. ||Amount Available for Appropriation ||342.29 ||388.93 |
|8. ||Appropriations: || || |
| ||Dividend ||- ||80.00 |
| ||Provision/ Reversal of Dividend || || |
| ||Distribution Tax ||0.29 ||16.74 |
| ||Transferred to General Reserve ||50.00 ||100.00 |
|9. ||Balance carried to Balance Sheet ||292.58 ||192.19 |
We are pleased to inform that the Board of Directors has recommended dividend of Re.0.20 per equity share of Re. 1/- each (i.e. 20 % of face value) aggregating Rs. 8000000(excluding dividend distribution tax as applicable) for the year ended on 31st March2019.
During the period under review the profit after tax (PAT) stood at 150.10 Lakhs ascompared to last financial year 2017-18 was Rs. 243.09 Lakhs. Your Directors are confidentof better returns in the future.
The Board of Directors has transferred Rs. 50 Lakhs to General Reserve.
5. DIRECTORS' RESPONSIBILITY STATEMENT:
The Directors state that-
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) The Directors had prepared the annual accounts on a going concern basis;
(e) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
6. DIRECTORS AND KEY MANAGERIAL PERSONNEL APPOINTMENTS/ RESIGNATIONS DURING THEYEAR:
The following change took place during the financial year 2018-19 under review:
|Name of the Person ||Designation ||Date of change ||Nature of Change Appointment/ Resignation |
|Riddhi Vaity ||Company Secretary cum Compliance Officer ||March 26 2019 ||Appointment |
|Shantaram Shinde ||Chief Financial Officer ||March 26 2019 ||Appointment |
7. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Report in form MGT-9 as requiredunder Section 92(3) of the Companies Act 2013 read with rule 12(1) of the Companies(Management and Administration) Rules 2014 are included in this Report as Annexure-I andforms an integral part of this report.
8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in sub-section (1) of section 188 of the Companies Act 2013including certain arm's length transactions under third proviso thereto is disclosed inForm No. AOC-2 which is enclosed as
9. PARTICULARS OF EMPLOYEES:
The information required pursuant to Rule 5 (1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed as Annexure III to theDirectors Report.
Particulars of employees drawing remuneration in excess of limits prescribedunder Section 134 (3)(q) read with Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 :
There are no employees drawing remuneration exceeding Rupees One Crore and Two Lakhsper annum if employed throughout the financial year or rupees Eight Lakhs and FiftyThousand per month if employed for part of the financial year or draws remuneration inexcess of Managing Director or Whole time Director or Manager and holds by himself oralong with his spouse and dependent children not less than two percent of the equityshares of the Company.
|10. NUMBER OF MEETINGS OF BOARD: || |
|Particulars ||No. of meetings held |
|1. Board Meetings ||Six |
|2. Audit Committee Meetings ||Four |
|3. Independent Directors Meeting ||One |
|4. Nomination and Remuneration ||One |
|Committee Meeting || |
11. FORMAL ANNUAL EVALUATION:
Pursuant to the provision of Section 134 (3) (p) of the Companies Act 2013 the Boardhas carried out the annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Audit Nomination andRemuneration and Stakeholders Relationship Committees. A structured questionnaire wasprepared after taking into consideration inputs received from the Directors coveringvarious aspects of the Board's functioning such as adequacy of the composition of theBoard and its Committees Board cultures execution and performance of specific dutiesobligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgement safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors. TheDirectors expressed their satisfaction with the evaluation process.
12. DECLARATION BY INDEPENDENT DIRECTORS:
Declarations by the Independent Directors that they meet the criteria of independenceas provided in sub-section (6) of Section 149 of the Companies Act 2013 has been receivedby the Company.
13. REMUNERATION POLICY:
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of directors Key Managerial Personnel and Senior Management of the Company.The said policy is also uploaded on the website of the Company; i.e. www.svartcorp.in.
At the annual General meeting held on September 282018 M/s S. P. Jain &Associates Chartered Accountants (FRN 103969W) Mumbai were appointed as statutoryauditor of the company to hold office till conclusion of Annual General meeting to be heldin year 2023.
The report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.
15. SECRETARIAL AUDIT REPORT:
In terms of Section 204 of the Companies Act 2013 and Rules made thereunder M/s.Sandeep Dar and Co. Practicing Company Secretaries have been appointed as SecretarialAuditor of the Company. The report of the Secretarial Auditors is enclosed as Annexure IVto this report. The report is self-explanatory however the Company has initiated necessarysteps to comply with various non-compliances as per the provisions of various statutementioned under the secretarial audit report.
16. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Company www.svartcorp.in
17. COMPOSITION OF AUDIT COMMITTEE:
Composition of Audit Committee is required under section 177 (8) of the Companies Act2013.
The Composition of Audit Committee is as follows:
1. Mr. Rakeshkumar Garodia - Chairman
2. Mr. Rajesh Poddar - Member
3. Mr. Sanjiv Vishwanath Rungta - Member
18. SIGNIFICANT MATERIAL CHANGES:
There were no material changes and commitments which adversely affects the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.
19. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS:
The Board of your Company has laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and operatingeffectively.
20. RISK MANAGEMENT
The Company is periodically reviewing its risk management perception taking intoaccount overall business environment affecting/ threatening the existence of the Company.Presently board is of the opinion that such existence of risk is minimal.
During the year under review the Company has not accepted any deposits within themeaning of Section 73 of Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014 and as such no amount on account of principal or interest on publicdeposits was outstanding as on the date of the balance sheet.
22. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013:
During the year under review the Company have neither given any loans nor provided anyguarantees which are governed by the provisions of Section 186 of the Companies Act 2013.However the Company has invested the funds amounting to Rs. 75.27 lacs during the year.
23. MANAGEMENT DISCUSSION AND ANALYSIS:
I. INDUSTRY STRUCTURE AND DEVELOPMENTS GEMSTONE CARVINGS SIGNIO PAINTINGS AND COUTUREJEWELLERY:
Indian Gems & Jewellery (G&J) industry has acquired prominence over the yearsin the country given its dual utility of improving aesthetics as well as investment.Today India is the largest consumer of gold as well as the largest player in diamondcutting and polishing. A major chunk of gold jewellery manufactured in India is fordomestic consumption whereas a major portion of polished diamonds or finished diamondjewellery is exported. In the coming years growth in Gems and Jewellery sector would belargely contributed by the development of large retailers/brands. Established brands areguiding the organised market and are opening opportunities to grow. Increasing penetrationof organised players provides variety in terms of products and designs. Online sales areexpected to account for 1-2 per cent of the fine jewellery segment by 2021-22.
As far as SVART is concerned the initiatives taken in the area of corporate giftinghave started paying rich dividends. This segment is likely to contribute tremendously inthe years to come. We have developed certain products exclusively for the US and UKmarket. We procure very rare and expensive rough gemstones and then get highly detailedcarving done to create a truly unique and collectible carving.
Such gemstone carving are very much in demand in US and UK markets and give us healthymargin to work with. With these initiatives we are confident that this growth in exportswill continue for the coming years. With the Indian economy poised for growth we areconfident of delivering better results in the future and feel that our loyal customers andnew collectors will keep giving us continuous business.
The challenges faced by the real estate sector are primarily due to poor economicsentiment high borrowing cost and a slow income growth for industry and consumer alike.However we are able to witness the beginning of revival in the commercial real estatemarket. With the new government continuing their initiatives to support the corporateactivity in the country there is a general and upbeat sentiment that we could be in themidst of revival in the commercial real estate sector. Therefore we remain optimistic ofgood occupancy rates for our premises.
II. OPPORTUNITIES AND THREATS
There exists a huge opportunity for Indian players to do value addition to the low costjewellery items and can export such jewellery. India has an advantage of manufacturingaffordable jewellery for the world market.
The Indian retail sector provides an excellent opportunity for the Indian players tomanufacture and sell their jewellery through the retail channels that are fast catching upin the Indian markets.
Jewellery shopping can be an emotional experience and existing brands in the industryhave learned to build deep and lasting connections with loyal customers by leveragingthese emotional experiences to create strong bonds. This unique aspect of customer loyaltyin the industry can make it especially difficult for new retailers to compete. Jewelleryretailers compete almost exclusively on quality creating a framework for consumerpsychology that can be difficult to break into. Existing retailers work hard to definetheir brand as the best or only option for buying jewellery gifts again using emotionalappeals which can give new market entrants an image of lower quality by default becauseof their lower brand awareness.
III. SEGMENT-WISE PERFORMANCE:
During the year under review revenue from sale of products was Rs.13399258 andRevenue from sale of services was Rs.77307430
The jewellery market will be highly dynamic truly globalised and intensely competitiveby 2020. Jewellery companies that can best anticipate and capitalize on industry-changingtrends - particularly the five described above - will shine brighter. Segments willincreasingly be defined by price points and brand positions rather than purchase andwearing occasions. In light of this trend fine jewellers may consider introducing newproduct lines at affordable prices to entice younger or less affluent consumers givingthem an entry point into the brand. Alternatively fine-jewellery players may decide toplay exclusively in the high-end and communicate that message strongly through itsadvertising in-store experience and customer service
V. RISKS AND CONCERNS
Jewellery retailers face the same infrastructure requirements as other retailersincluding shelving display cases back-room warehouse storage and point-of-sale systems.However jewellery retailers require advanced security systems to protect their high-valueinventory. The amount of security required of a retail jewellery store can incur thelargest infrastructure expense after the cost of cameras safes and electronic monitoringfor doors and windows are taken into account.
Even with advanced security the risk of loss from theft can be a significant deterrentto entering the industry. Jewellery retailers should always carry adequate insurancepolicies to cover significant loss but the cost of such policies can be another barrierto entry.
VI. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate internal control system commensurate with the size of itsoperations. Adequate records and documents are maintained as required by laws. All effortsare being made to make the internal control systems more effective.
24. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:
Company has adopted a policy for prevention of Sexual Harassment of Women at workplaceas required under the Act.
The following is a summary of sexual harassment complaint received or disposed offduring the year 2018-19.
| No. of Complaint received: NIL |
| No. of Complaint disposed off: NIL |
Further the Company has constituted the Internal Complaints Committee under the SexualHarassment of Woman at Workplace (Prevention Prohibition and Redressal) Act 2013 thecomposition of Committee is as follows:
|Sr.No. ||Name of Member ||Position held in IC Committee |
|1. ||Riddhi N. Vaity ||Presiding Officer |
|2. ||Nagabhushan T. Hegde ||Member |
|3. ||Shantaram S. Shinde ||Member |
|4. ||Shikha A. Mishra ||External Member |
25. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
In the view of the nature of the Company Rule 8 of Company (Accounts) Rules 2014concerning conservation of energy and technology absorption respectively are notapplicable to the Company.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
|Sr. No. ||Particulars ||2018-19 ||2017-18 |
| || ||(Rs. In Lakhs) ||(Rs. In Lakhs) |
|1. ||Foreign Exchange Earned ||19.14 ||29.39 |
|2. ||Foreign Exchange Used ||12.86 ||56.04 |
26. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
No significant or material orders were passed by the regulators or courts or Tribunalswhich impact the going concern status and Company's' operations in future.
We record our gratitude to the Banks and others for their assistance and cooperationduring the year. We also wish to place on record our appreciation for the dedicatedservices of the employees of the Company. We are equally thankful to our esteemedinvestors for their co-operation extended and confidence reposed in the management.
|Registered Office: ||By Order of the Board |
|303 Tantia Jogani Industrial Estate ||For Swasti Vinayaka Art And Heritage |
|J. R. Boricha Marg Lower Parel ||Corporation Limited |
|Mumbai 400011. || |
|Date: May 28 2019 ||Dinesh Poddar |
|Place: Mumbai ||Chairman and Managing Director |