SALGUTI INDUSTRIES LIMITED
Your Directors have pleasure in presenting the 30th Annual Report togetherwith the Audited Balance Sheet Profit & Loss Account and Cash Flow Statement for thefinancial year ended 31st March 2015.
FINANCIAL RESULTS REVIEW AND PROSPECTS
Your company has recorded a total income of Rs. 12494.89 lakhs for the year ended 31stMarch 2015 against total income of Rs. 12277.31 Lakhs last year. The company hasrecorded a net profit of 29.62 lakhs for the current period against net loss of Rs. 71.00lakhs for the last year which is encouraging. Board of Directors assure you betterfinancial position in the years to come.
From the financial perspective the highlights of the financial results for the yearunder review are as follows:
(Rupees in Lakhs)
|Particulars ||2014 15 ||2013 14 |
|Total Turnover ||12494.89 ||12277.31 |
|Expenditure ||11811.09 ||11563.93 |
|Finance Cost ||689.70 ||753.83 |
|Profit before Tax ||2.72 ||(33.36) |
|Less: Provision for Tax ||0.52 ||- |
|Less: Provision for deferred Income Tax ||(27.42) ||37.64 |
|Net Profit (after deferred tax) ||29.62 ||(71.00) |
THE COMPANYS PRODUCTS / SERVICES
Plastic Division : Our Company is Manufacturing HDPE/PP Woven sacks forpacking of Fertilizers & Cement.
Textile Division : Manufacturing Cotton grey fabric for garments Bed Linenand Furnishings.
The Directors regret their inability to recommend dividend for the year under reviewdue to insufficient profit.
BUSINESS RISK MANAGEMENT
The Company like any other enterprise is exposed to business risk which can beinternal risks as well as external risks. The threats to the segments in which the companyoperates are
- Competition from other developing countries from Vietnam and Bangladesh.
- Continuous Quality Improvement is need of the hour as there are different demandpatterns all over the world.
- Elimination of Quota system will lead to fluctuations in Export Demand.
- Threat for Traditional Market for Powerloom and Handloom Products and forcing themfor product diversification.
- Geographical Disadvantages.
- International labor and Environmental Laws.
- To balance the demand and supply.
- To make balance between price and quality.
The Company has not accepted deposits covered under Chapter V of the Companies Act2013 and accordingly the disclosure requirements stipulated under the said Chapter arenot applicable.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
During the year under review the company has not given any loans Guarantees andInvestments covered under the provisions of Section 186 of the Companies Act 2013.
CONTRACTS AND ARRANGEMEMENTS WITH RELATED PARTIES
Pursuant to clause (h) of sub-section (3)of section 134 of the Act and Rule 8(2) of theCompanies (Accounts) Rules 2014 except the remuneration to managerial personnel thereis no other related party transactions to be disclosed as required under the above saidstatutory requirement.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith elsewhere in the Annual Report.
DEMAT SUSPENSE ACCOUNT UNCLAIMED SHARES
As on 31st March 2015 there were no Equity Shares of Shareholders were lying in theEscrow Account due to non-availability of the correct particulars.
Your Directors are happy to report that your Company is compliant with the CorporateGovernance requirements as per Clause 49 of the Listing Agreement with the StockExchanges. A separate section on Corporate Governance together with a certificate from theStatutory Auditors confirming compliance is set out in the Annexure forming part ofthis report.
MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT
A Management Discussion and Analysis Report has been attached and forms part of theAnnual Report.
ADDITIONAL INFORMATION AS REQUIRED U/ S 134(3)(m) OF THE COMPANIES ACT 2013 a)Conservation of Energy:
The Company is monitoring the consumption of energy and is identifying measures forconservation of energy.
(i) the steps taken by the company for utilising alternate sources of energy -Nil (ii)the capital investment on energy conservation equipments - Nil
(b) (i) Technology Absorption adaptation and innovation:- Indigenous Technology isinvolved for the manufacturing the products of the Company.
(ii) Research and Development (R & D): No research and Development has been carriedout. (c) Foreign exchange earnings: Rs. 8418242 (d) Foreign exchange out go: Rs.1981593
PARTICULARS OF EMPLOYEES
The Directors are to report that none of the employee was in receipt of remunerationexceeding the limit prescribed under rule 5(2) of the Companies (Appointment andRemuneration of managerial Personnel) Rules 2014.
M/s. P. Murali & Co. Chartered Accountants Statutory Auditors of the Companyretire at the conclusion of the ensuing Annual General Meeting and are eligible forreappointment. The said Auditors have furnished the Certificate of their eligibility forre-appointment. Pursuant to the provisions of Section 139 of the Companies Act 2013 andthe Rules framed thereunder. Accordingly the statutory auditor of the Company wasreappointed from the conclusion of the previous AGM till the conclusion of the AGM to beheld in the year 2017 subject to ratification of their appointment at the subsequentAGMs.
BOARD AND COMMITTEES PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out an annual performance the directors individually aswell as the evaluation of the working of its Audit and Nomination & RemunerationCommittees.
NUMBER OF BOARD MEETINGS HELD DURING THE FINANCIAL YEAR AND THE DATES OF THE BOARDMEETINGS:
The Board met seven times during the financial year 2014-2015. The dates on which theabove Board meetings were held are as follows;
30th May 2014 23rd June 2014 11th August 2014 29th August 2014 25th October 201413th November 2014 and 14th February 2015.
DIRECTORS & INDEPENDENT DIRECTORS
Board expressed its deep condolences took note and condoled for the sad demise of ShriS. Gopal Reddy Chairman of the company on 22nd October 2014 in its meeting held on 25thOctober 2014 and places on record a deep appreciation for the valuable services renderedby the Chairman who steered the company during most difficult phase of economic recessionbrought back to the success.
Smt. S. Rajitha Reddy CFO & Whole Time Director of the Company who office isliable to retire by rotation at this AGM and being eligible offer herself forre-appointment.
At the 29th Annual General Meeting of the Company held on 27th September 2014 theMembers of the Company had appointed Independent Directors of the Company for a period of5 years. All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Clause 49 ofthe Listing Agreement.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c)of the Companies Act 2013 withrespect to Directors responsibilities Statement it is hereby confirmed :
a. That in preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures ;
b. That the directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year ended 31st March 2015 and of the profit and loss of the company for thatperiod;
c. That the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
d. That the directors have prepared the annual accounts on a going concern basis.
e. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
f. that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
During the year ended March 31 2015 the Company does not have any materiallisted/unlisted subsidiary companies as defined in Clause 49 of the Listing Agreement. Thepolicy on determining material unlisted subsidiary of the Company is approved by the Boardof Directors of the company.
The Board of Directors of the company are committed to maintain the highest standard ofhonesty openness and accountability and recognize that employees have important role toplay in achieving the goal. As a public company the integrity of the financial matters ofthe Company and the accuracy of financial information is paramount. The stakeholders ofthe Company and the financial markets rely on this information to make decisions. Forthese reasons the Company must maintain workplace where it can retain and treat allcomplaints concerning questionable accounting practices internal accounting controls orauditing matters or concerning the reporting of fraudulent financial information to ourshareholders the Government or the financial markets. The employees should be able toraise these free of any discrimination retaliation or harassment. Pursuant to the policyemployees are encouraged to report questionable accounting practices to Mr. Sri.Draksharam Nagaraj Chairman of Audit Committee through email or by correspondence throughpost.
Familiarisation programme for Independent Directors
Pursuant to the provisions of Clause 49 of the Listing Agreement the Company hasformulated a programme for familiarising the Independent Directors with the company theirroles rights responsibilities in the company nature of the industry in which thecompany operates business model of the company etc through various initiatives.
Key Managerial Personnel
Smt. S. Rajitha Reddy Chief Financial Officer was appointed as Key Managerial Personnelin accordance with the Section 203 of the Companies Act 2013.
The Company isin the process of appointing the qualified member of ICSI as CompanySecretary.
Related Party Transaction
Policy on dealing with Related Party Transactions is approved by the Board
No related party transactions were entered into during the financial year under reviewThere are no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the Company at large. The same was discussed bythe Audit Committee as also the Board. The policy on Related Party Transactions asapproved by the Board. None of the Directors has any pecuniary relationships ortransactions vis--vis the Company.
Internal Financial Controls
The Company has in place adequate internal financial controls with reference tofinancial statements. Periodic audits are undertaken on a continuous basis covering allthe operations i.e. manufacturing sales & distribution marketing finance etc.Reports of internal audits are reviewed by management from time to time and desiredactions are initiated to strengthen the control and effectiveness of the system.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and theCompanies(Appointment and Remuneration of Managerial Personnel) Rules 2014 theSecretarial Audit Report is obtained by the company and forms part of this Annual report.
Disclosures pursuant to The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014
1. The Disclosures pursuant to sub-rule (1) of Rule 5 of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are forms part of the BoardsReport.
2. The Disclosures pursuant to sub-rule (2) of Rule 5 of The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 in respect of employees of the Companyforms part of the Boards Report.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The details pertaining to criteria for determining qualifications positiveattributes and independence of a Director and remuneration policy have been provided inSection of the attached Corporate Governance Report.
Significant and Material Orders Passed by the Regulators or Courts
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
Disclosure Under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. An Internal committee has been set up to redress the complaints received regardingsexual harassment at workplace. All employees including trainees are covered under thispolicy.
The relationship between the management and the staff was very cordial throughout theyear under review. Your Directors take this opportunity to record their appreciation forthe cooperation and loyal services rendered by the employees.
Your Directors place on record their appreciation of the continuous assistance andco-operation extended to your Company by the valued customers bankers Reserve BankIndia SEBI Bombay Stock Exchange Limited & National Stock Exchange of India Limitedand all other regulatory Authorities. The Directors also sincerely acknowledge thesignificant contributions made by all the employees for their dedicated services to theCompany.
| || ||For and on behalf of the Board |
| || ||SALGUTI INDUSTRIES LIMITED |
| ||Sd/- ||Sd/- |
|Place: Hyderabad ||S.Vishnu Vardhan Reddy ||S.Rajita Reddy |
|Date: 14th August 2015 ||Managing Director ||CFO & Whole-Time Director |