Sharat Industries Ltd.
|BSE: 519397||Sector: Others|
|NSE: SHARTSEFOD||ISIN Code: N.A.|
|BSE LIVE 05:30 | 01 Jan||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
Sharat Industries Ltd. (SHARTSEFOD) - Director Report
Company director report
Dear Members of Sharat Industries Limited
Your Directors have pleasure in presenting the Twenty Sixth Annual Report of theCompany together with Audited Accounts for the year ended 31st March 2016
1. FINANCIAL HIGHLIGHTS
2. SUMMARY OF OPERATIONS & STATE OF COMPANY AFFAIRS : The turnover of thecompany for the year ended 31st March 2016 was Rs.14985.68 lakhs against Rs.20660.61lakhs in the previous year. During the year the company made sales of Rs. 14040.48 lakhsagainst Rs.19218.83 lakhs in the previous year Job work receipts of Rs. 245.00 lakhsagainst Rs. 454.69 lakhs in the previous year and during the year the company has made anoperating profit before tax of Rs.318.91 lakhs against Rs. 391.81 lakhs in the previousyear.
During the year the company's shrimp exports come down by 31.14% and domestic feedssales grew up by 29% as compared to the previous financial year
Your directors are confident that the performance of the company will improve in theyears to come.
3. FUTURE OUTLOOK : Our product is well received in the international market aswell as domestic market. We are hopeful of achieving much better results in the years tocome. The outlook and future plans of the Company have been mentioned in detail under the"Management Discussion and Analysis" section that forms part of this report.
4. SHARE CAPITAL: As on 31st March 2016 the issued subscribed and paid upcapital of your company stood at Rs.220125000/- comprising of 22012500 equity sharesof Rs.10/-each.
5. DIVIDEND: In order to retain the profits to strengthen the capital base nodividend has been recommended by the Board for the year under review.
6. RESERVES IF ANY
The Company has not transferred any amount to reserves during the financial year.
7. LISTING OF SHARES :
The equity shares of the Company have been listed on the Bombay Stock Exchange atMumbai. The company confirms that it has paid Annual Listing Fees due to the Bombay StockExchange for the year 2016-2017.
The Bombay Stock exchange suspended the trading of Company's Shares. Your Company couldnot establish connectivity with both National Securities Depository Limited (NSDL) andCentral Depository Services (India) Limited (CDSL) and the company is in the process toestablish connectivity and dematerialize the shares.
8. CHANGE IN NATURE OF BUSINESS :
The company continues to be an integrated Aqua Culture company with Hatchery CultureFeed and Shrimp Processing & Exports business and during the year the company has notchanged its business.
9. MATERIAL CHANGES AND COMMITMENTS :
No material changes and commitments affecting the financial position of the companyhave occurred between the end of the financial year of the company to which the financialstatements relate and the date of the report
10. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY :
The company has in placed adequate financial controls commensurate with size andoperations.
11. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:
The company has Internal Audit and the Audit Committee is in place to take care of thesame.
12. EXTRACT OF ANNUAL RETURN:
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of thecompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as a part of this Annual Report as ANNEXURE II.
13. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES :
There are no Subsidiary/ Joint venture/ Associate companies
14. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES ANDJOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT
Not applicable as there are no Subsidiary/ Joint venture/ Associate companies
15. STATUTORY AUDITORS
The Auditors M/s P.A. Reddy & Co. Chartered Accountants retiring auditors of theCompany were appointed as Statutory Auditors to hold office for a period of three yearsfrom conclusion of 24thAnnual General meeting till the conclusion of 27th Annual GeneralMeeting. The resolution relating to ratification of the appointment is put to ratificationby members in the ensuing Annual General Meeting.
16. AUDITORS' REPORTOBSERVATIONS AND REPLIES
The Auditors' Report was qualified and Notes to Accounts and some of the Auditorsremarks in their report are self-explanatory and do not call for any further comments.However with specific reference to Para IV of the said report items wise it is clarifiedas under
In respect of Post Retirement Benefits viz. Gratuity as per Accounting Standard-15issued by the Institute of Chartered Accountants of India the Company should makeprovision on actuarial basis every year towards liability for future payment of gratuity.However during the year provision for gratuity has been made on adhoc basis. Suchcreation of provision is not in accordance with the Accounting Standard referred above. Inthe absence of details we are unable to comment on the effect of such provision on theprofits for the year gratuity liability and net worth of the Company
The report of the Insurance Company on actuarial liability for gratuity is awaited. Weshall make the requisite provision in the current year. We are taking steps to cover allthe employees under ESI Scheme in the current year.
17. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mrs. S Charita Reddy Director retire by rotation at the forthcoming Annual GeneralMeeting and being eligible offers herself for reappointment.
During the year Mr. T. Valsaraj has resigned as an Independent Director.
18. DECLARATION FROM INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent Director undersection 149(7) of the Act that they meet with the criteria of their independence laid downin Section 149(6) of the Act
19. DIRECTORS' RESPONSIBILITY STATEMENT
The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) ofSection 134 & 134 (5) of the Companies Act 2013 shall 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; and
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.
f. The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
20. MEETINGS: A calendar of Meetings is prepared and circulated in advance tothe Directors. During the year 6 (Six) Board Meetings and 5 (Five) Audit CommitteeMeetings 6 (Six) Share holders' grievances and Share transfer committee meetings and1(One) nomination & remuneration committee meeting were convened and held. The detailsof which are given in the Corporate Governance Report. The intervening gap between theMeetings was within the period prescribed under the Companies Act 2013.
21. VIGIL MECHANISM :
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.sharatindustires.com.
22. RISK MANAGEMENT:
The Company has policy for identifying risk and established controls to effectivelymanage the risk. Further the Company has laid down various steps to mitigate theidentified risk.
23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:
a) Conservation of energy
(c) FOREIGN EXCHANGE EARNINGS AND OUTGO
During the year the total foreign exchange used was Rs. 32744548/- and the totalforeign exchange earned was Rs. 737849959/-.
24. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company is not required to constitute a Corporate Social Responsibility Committeeas it does not fall within purview of Section 135(1) of the Companies Act 2013 and henceit is not required to formulate policy on corporate social responsibility.
25. CORPORATE GOVERNANCE
In accordance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (Listing Regulations) a Compliance report on Corporate Governance as per Schedule Vof the Listing Regulations along with a Certificate of Compliance from the PracticingCompany Secretary forms part of this report. ANNEXURE-VII
26. PARTICULARS OF EMPLOYEES :
Statement showing the details of employees who are in receipt of remuneration of Rs. 500000/- or more per month are given in the annexure - IV forming part of this report.
27. MANAGERIAL REMUNERATION
Details of the ratio of the remuneration of each director to the median employee'sremuneration and other details as required pursuant to Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 (ANNEXURE V)
28. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 DETAILS OFLOANS:
DETAILS OF INVESTMENTS:-
DETAILS OF GUARANTEE / SECURITY PROVIDED :
29. 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 shall be disclosedin Form No. AOC-2 as ANNEXURE III.
30. SECRETARIAL AUDIT REPORT
A Secretarial Audit Report given by Sri. D.S. Venkata Narasimhan Company secretariesis annexed with the report. With reference to the observations made we state that Theunintended delays in filings were due to the secretarial staff. The Company Secretary (CS)selected has not joined as the Registered Office is at a rural place. However the companyis making use of the practicing Company Secretary to ensure compliances. The companyproposes to initiate the process for dematerialization during the year. (Annexure -I)
Comments in Director's Report:
The company is taking steps to comply with filing of Forms with MCA within time. Thecompany is in the process of dematerializing the shares and getting the connectivity fromNSDL and CSDL. The company has appointed Company Secretary in the month of July 2016 asCompliance officer.
31. INTERNAL AUDIT
In terms of sec 138 of the companies' act 2013 and the relevant rules the companyappointed M/s A R Krishnan & Associates Chartered Accountants as the internalauditors of the company. The internal auditor directly reports to the audit committee.
32. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Directors comments on Management Discussion and Analysis which forms a part ofthis report are restricted to the areas which are relevant to the current scenario of theCompany and outlook is annexed hereto ANNEXURE - VI
33. NO SIGNIFICANT AND MATERIAL ORDERS WERE PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
34. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
To prevent sexual harassment of women at work place a new act the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 has been notified on9th December 2013 and every company is required to set up an Internal ComplaintsCommittee to look into complaints relating to sexual harassment at work place of any womenemployee.
Your Company has adopted a policy for prevention of Sexual Harassment of Women atworkplace and has set up Committee for implementation of said policy. During the yearCompany has not received any complaint of harassment.
35. MECHANISM FOR BOARD EVALUATION
Regulation 17(10) of SEBI(LODR) Regulations 2015 states that the board shall monitorand review the board evaluation framework. The Companies Act 2013 states that a formalannual evaluation needs to be made by the Board of its own performance andthat of itscommittees and individual directors.
Schedule IV of the Companies Act 2013 states that the performance evaluation of theindependent directors shall be done by the entire Board of Directors excluding thedirector being evaluated.
The Directors evaluation was broadly based on the parameters such as understanding ofthe Company's vision and objective skills knowledge and experience participation andattendance in Board/Committee meetings; governance and contribution to strategy;interpersonal skills etc.
The Board has carried out the annual performance evaluation of its own performance theDirectors individually as well as evaluation of the working of its Board Committees.
A structured questionnaire was prepared covering various aspects of the Board'sfunctioning such as adequacy of the composition of the Board and its Committees BoardCulture execution and performance of specific duties obligations and governance.
A meeting of the Independent Directors was also held which reviewed the performance ofNon-Independent Directors Chairman and the quality quantity and timelines of flow ofinformation between the Company management and Board.
The relations between the management and the staff were very cordial throughout theyear. Your Directors take this opportunity to record their appreciation for thecooperation and loyal services rendered by the employees.
Your Directors gratefully acknowledge with thanks the constructive guidance andcooperation extended by MPEDA FEDERAL BANK LIMITED and other Government Agencies.
BY THE ORDER OF BOARD OF DIRECTORS
For SHARAT INDUSTRIES LIMITED
S. PRASAD REDDY
CHAIRMAN & MANAGING DIRECTOR
DATE: 13th August 2016