TO THE MEMBERS
SABOO SODIUM CHLORO LIMITED
The Directors have pleasure in presenting before you the 26th Annual Reportof the Company together with the Audited Statements of Accounts for the year ended 31stMarch 2019.
I. FINANCIAL PERFORMANCE
The financial results of the Company for the period under review as compared to theprevious year are summarized below:
|Particulars ||Financial year ended 31st March 2019 ||Financial year ended 31st March 2018 |
|Total Income ||291528597 ||233493661 |
|Profit before depreciation and taxation ||19464123 ||20030654 |
|Depreciation ||14663363 ||15763527 |
|Profit before tax ||4800760 ||4267127 |
|Taxation (including Deferred Taxation and ||1098671 ||2153370 |
|Short/Excess Provision for Earlier year) || || |
|Profit /loss after Tax ||3702089 ||2113757 |
Turnover Profits & Future Prospects
The total income during the year under review was Rs. 291528597/- in the previousyear. During the year under purview company incurred a profit of Rs. 3702089/- asagainst loss of Rs. 2113757/- in previous year. Although there is an increase of Rs.58034936/- in company's turnover in comparison to the turnover of previous year.
During the year under review the company had started operation in its brand new Hotelunit called as Samskara Resort from September 2018 and the total income fromhotel was Rs. 81.18 Lacs included in the turnover above. The company is expecting morerevenue from the hotel unit in this year and looking forward to it.
Depreciation and Finance Costs
Depreciation for the year was lower at Rs.1.47 crores as compared to Rs.1.58 crores forthe previous year. Finance costs for the year ended 31st March 2019 was Rs. 29.97 croreswhich is lower by Rs. 0.17 crores than previous year on account of repayment of termloans reduction in interest costs of the term loan and better working capital management.
Based on Company performance the Directors are unable to recommend dividend due toinadequate profits.
Transfer of Unclaimed Dividend to Investor Education and Protection Fund
The Provisions of section 125(2) of Companies Act 2013 are not applicable as there wasno dividend declared or paid last year.
During the year under review Your Company has not accepted any deposits from publicand as such in the terms of the provision of Section 73 to 76 of the Companies Act 2013read with the Companies (Acceptance of Deposits) Rules 2014 and hence no amount onaccount of principal or interest on public deposits was outstanding as on the date of thebalance sheet.
All properties and insurable interests of the Company including building plant andmachinery and stocks have been fully insured.
Particulars of Loans Guarantees or Investments
Pursuant to section 186 of Companies Act 2013 and Schedule V of the ListingRegulations disclosure on particulars relating to Loans Advances Guarantees andInvestments are provided as part of the financial statements.
Borrowings / Indebtness
The total long term borrowings of the company stood at Rs 16.46 crores for the yearended 31st March 2019 as compared to Rs. 18.07 crores as at 31stMarch 2019. During the financial year under review company repaid Rs. 1.61 crores.
Related Party Transactions
In line with the requirements of the Companies Act 2013 and Listing Regulations yourCompany has formulated a Policy on Related Party Transactions which is also available onCompany's website at https://www.suryasalt.com.The Policy intends to ensure that properreporting approval and disclosure processes are in place for all transactions between theCompany and Related Parties.
All Related Party Transactions entered during the year were in Ordinary Course of theBusiness and on Arm's Length basis. There were Material Related Party Transactions i.e.transactions exceeding ten percent of the annual consolidated turnover as per the lastaudited financial statements were entered during the year by your Company. Prior omnibusapproval of the Audit Committee is obtained for the transactions which are of aforeseeable and repetitive nature.
The particulars of contracts or arrangements with related parties referred to insection 188(1) and applicable rules of the Companies Act 2013 in Form AOC-2 is providedas Annexure I to this Annual Report.
Subsidiaries joint venture and associate companies:
The company does not have any subsidiary Joint ventures or associate company.
During the Financial Year 2018-19 the Authorised Capital of the Company is Rs.250000000/- (Rupees Twenty Five Crore Only) divided into 25000000 (Two Crore FiftyLakh) Equity Shares of Rs. 10/- (Rupees Ten Each).
During the Financial Year 2018-19 the Issued Capital of the Company is Rs.241825000/- (Rupees Twenty Four Crore Eighteen Lacs Twenty Five Thousand Only) dividedinto 24182500 (Two Crore Forty One Lacs Eighty Two thousand Twenty Five Hudred) EquityShares of Rs. 10/- (Rupees Ten Each).
Subscribed & Paid up Capital:-
During the Financial Year 2018-19 the Subscribed & paid up Capital of the Companyis Rs. 241825000/- (Rupees Twenty Four Crore Eighteen Lacs Twenty Five Thousand Only)divided into 24182500 (Two Crore Forty One Lacs Eighty Two thousand Twenty Five Hudred)Equity Shares of Rs. 10/- (Rupees Ten Each).
Buy-back of shares:
During the year under review company has not bought back any of its shares.
Sweat Equity Shares:
During the year under review company has not issued any Sweat Equity shares.
During the year under review company has not issued any Bonus shares.
Employee Stock Option Plan:
During the year under review company has not provided any Stock option plan to itsemployees.
Changes in nature of business: There was no change in nature of business.
Company has also entered into a new line of Hospitality Industry and has built up a 5star resort & spa in the name of SAMSKARA RESORT at Village-JaisinghpuraPeepla Jaipur. Samskara Resort provides all the luxurious facilities to its visitorswhich include approximately (but not limited to): 37 guest rooms
1 Presidential Villa
Yoga & Meditation center and Open Air Area
Walkway and Jogging
Daily Activity Programs
Motorized Buggies for Transportation
Jacuzzis / Steam rooms
Number of Board Meetings
During the year under review company has conducted 9 (Nine)
Composition of Board of Directors
Board's Composition and Independence Your Company's Board consists of global leadersand visionaries who provide strategic direction and guidance to the organization. As onMarch 31 2019 the Board comprised One executive director One non-executive AdditionalDirector and three non-executive Independent Directors.
Change in Directors
During the year Mrs. Bindu Saboo was appointed as an Additional cum Woman Directorwho is liable to retire by rotation in this Annual General Meeting and whosere-appointment has been recommended by the Nomination & Remuneration Committee andBoard of Directors subject to the approval of members in their ensuing meeting.
Key Managerial Personnel
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company as on March 31 2019 are:
|1. ||Mr. Girdhar Saboo (DIN: 00364750) ||Managing Director |
|2. ||Mr. V.P. Gagrani ||Chief Financial Officer |
|3. ||Ms. Anjali Kumawat ||Company Secretary |
Performance Evaluation Criteria for Directors
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) the Board has carriedout an Annual Evaluation of its own performance Board Committees and IndividualDirectors.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of Board processes information and functioning etc. The performance of theCommittees was evaluated by the Board after seeking inputs from the Committee Members onthe basis of the criteria such as the composition of committees effectiveness ofcommittee meetings etc. Performance evaluation of independent directors was done by theentire Board excluding the Independent Director being evaluated.
In a separate meeting of independent Directors performance of Non-IndependentDirectors the Board as a whole and the Chairman of the Company and Whole time Directorswas evaluated.
The Chairman of the Board and the Nomination and Remuneration Committee reviewed theperformance of the individual directors on the basis of the criteria approved by theBoard. Each Committee and the Board expressed satisfaction on the performance of eachDirector.
Statement on Declaration given by the Independent Director U/S 149(6) of the CompaniesAct 2013
It is stated that pursuant to the Provisions of Companies Act 2013 the Declarationgiven by the Independent Directors meets the Criteria of Independence as mentioned in theschedule IV of Companies Act 2013 and under regulations of Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirement) Regulations 2015. Thedeclaration is enclosed in this report.
Meeting of Independent Directors
A separate meeting of Independent Directors as required under the Schedule IV of theCompanies Act 2013 was held on 14th February 2019 without presence ofExecutive Directors. Such meeting was conducted to review and evaluate: (a) theperformance of Non-Independent Directors and the Board as a whole (b) the performance ofthe Chairperson of the company taking into account the views of Executive Directors andNon-Executive Directors and
(c) assess the quality quantity and timeliness of flow of information between thecompany management and the Board that is necessary for the Board to effectively andreasonably perform their duties. The Independent Directors expressed their satisfactionwith the performance of Non-Independent Directors and the Board as a whole and theChairman of the Independent Directors meeting briefed the outcome of the meeting to theChairman of the Board. The Independent Directors expressed satisfaction with the overallperformance of the Directors and the Board as a whole.
M/s Choudhary Gupta & Co. Chartered Accountants (ICAI Firm Registration Number:003165C) resigned w.e.f. 20th December 2018 and the casual vacancy so causedwas filled by the Board of Directors on 15th January 2019 by appointing M/sP.K.S. & Company. Chartered Accountants (Firm Registration No. 007007C) which wasratified by the members in their Extra-ordinary meeting held on 14th March2019 who are liable to retire by rotation in this AGM and their re-appointment isrecommended by the Board of Directors.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Naredi Vinod & Associates (CP No 7994 ACS 20453) Company Secretariesto undertake the Secretarial audit of the company for the financial year 2018-19.
Pursuant to section 138 of the Companies Act 2013 read with Rule 13 of theCompanies(Accounts)Rules2014and other applicable provisions of the Act M/s R. Sogani& Associates Chartered accountants was appointed as an internal auditors of thecompany for the financial year 2018-19.
Explanation or comments on qualifications reservations or adverse remarks ordisclaimers made by the auditors and the Practicing Company Secretary:
There were no qualifications reservations or adverse remarks or disclaimers madeeither by the auditors or the practicing company secretary in their respective reports.
Material Changes and Commitments
There are no material changes and commitment affecting the financial position of theCompany occurred between the end of the financial year of the Company to which thefinancial statement relates and the date of report.
Details of Significant and Material Orders Passed by the regulators/Courts/TribunalsImpacting the Going Concern Status and the Company's Operations in Future
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
Management Discussion and Analysis Report
The report on Management Discussion and Analysis as required under the ListingRegulations 2015 with the Stock exchange is set out as Annexure B' to theDirector's Report.
Business Risk Management
Although the company has long been following the principle of risk minimization as isthe norm in every industry it has now become a compulsion.
Therefore in accordance with Listing Regulations 2015 the Board members were informedabout risk assessment and minimization procedures after which the Board formally adoptedsteps for framing implementing and monitoring the risk management plan for the company.The main objective of this policy is to ensure sustainable business growth with stabilityand to promote a pro-active approach in reporting evaluating and resolving risksassociated with the business. In order to achieve the key objective the policyestablishes a structured and disciplined approach to Risk Management in order to guidedecisions on risk related issues.
In today's challenging and competitive environment strategies for mitigating inherentrisks in accomplishing the growth plans of the Company are imperative. The common risksinter alia are: Regulations competition Business risk Technology obsolescenceInvestments retention of talent and expansion of facilities. Business risk inter-aliafurther includes financial risk political risk fidelity risk legal risk.
As a matter of policy these risks are assessed and steps as appropriate are taken tomitigate the same.
III. GOVERNANCE AND ETHICS
Corporate Governance Report
The Company has adopted the policies in line with new governance requirements includingthe Policy on Related Party Transactions Policy on Material Subsidiaries Policy andWhistle Blower Policy. These policies are available on the website of the Company athttps://www.suryasalt.com. The Company has established a vigil mechanism for Directors andemployees to report their genuine concerns details of which have been given in theCorporate Governance Report annexed to this Report in Annexure D.
Secretarial Audit was carried out by M/s Naredi Vinod & Associates CompanySecretaries the Secretarial Auditor of the Company for the financial year 2018-19. Therewere no qualifications reservations or adverse remarks given by Secretarial Auditors ofthe Company. The detailed report on the Secretarial Audit is appended as an Annexure tothis Report.
A separate report on Corporate Governance is provided together with a Certificate fromthe Statutory Auditors of the Company regarding compliance of conditions of CorporateGovernance as stipulated under Listing Regulations. A Certificate of the CEO and CFO ofthe Company in terms of Listing Regulations inter alia confirming the correctness of thefinancial statements and cash flow statements adequacy of the internal control measuresand reporting of matters to the Audit Committee is also annexed.
Disclosure on the Remuneration of Managerial Personnel
The information required under section 197 of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
Remuneration of Managing Director
Following are the details of the annual salary (payable monthly) proposed to be paid toMr. Girdhar Saboo Managing Director: - Consolidated Salary including Perquisites andallowances etc- 3600000/- (Rupees Thirty Six Lakhs only).
Basic Salary: 204000(Monthly) Allowance: 96000(Monthly) He is entitled to receivethe following:-
a. Gratuity as per the rules of the Company but not exceeding half a month's salaryfor each completed year of service.
b. Encashment of leave at the end of tenure.
c. Provision of car for use on Company Business.
d. Free landline telephone facility at residence along with free mobile telephonefacility. Long distance personal calls to be recovered by the Company.
e. He shall also be entitled to reimbursement of entertainment expenses actually andproperly incurred in the course of business of the Company.
Policy on Director's Appointment and Remuneration and Other Details
The company's policy on Director's appointment and remuneration and other detailsprovided in section 178(3) of the Act has been disclosed In Corporate Governance Reportwhich forms part of Directors Report.
Compliance with Secretarial Standards
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India.
Particulars of Employees
The particulars of the employees who are covered by the provisions contained in Rule5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are: a) Employed throughout the year- Nil b) Employed for part of the year-Nil
Director's Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3) (c) of the Companies Act 2013:
1. that in the preparation of the annual financial statements for the year ended March31 2019 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
2. that such accounting policies as mentioned in Notes to the financial Statements havebeen selected and applied consistently and judgment and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany as at March 31 2019 and of the profit of the company for the year ended on thatdate;
3. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities ;
4. that the annual financial statements have been prepared on a going concern basis;
5. that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
6. that systems to ensure compliance with provisions of all applicable laws were inplace and were adequate and operating effectively;
Vigil Mechanism / Whistle Blower Policy
In order to ensure that the activities of the Company and its employees are conductedin a fair and transparent manner by adoption of highest standards of professionalismhonesty integrity and ethical behavior the company has adopted a vigil mechanism policy.This policy is explained in corporate governance report.
IV. INTERNAL FINANCIAL CONTROLS AND AUDIT
Details in respect of adequacy of internal financial controls with reference to thefinancial statements
The Company has in place adequate internal financial controls with reference tofinancial statements. Statutory Auditors in their report has expressed their opinion onthe internal financial controls with reference to the financial statements which isself-explanatory. The Board has adopted the policies and procedures for ensuring theorderly and efficient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timely preparationof reliable financial disclosures.
V. SOCIAL RESPONSIBILITY AND SUSTAINABILITY
Corporate Social Responsibility
Though the provisions of Companies Act 2013 regarding Corporate Social Responsibilityare not attracted to the company yet the Company has been over the years pursuing aspart of its corporate philosophy an unwritten CSR policy voluntarily which goes muchbeyond mere philanthropic gestures and integrates interest welfare and aspirations of thecommunity with those of the Company itself in an environment of partnership for inclusivedevelopment.
Conservation of Energy Technology Absorption and Foreign Exchange Earning and Outgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 is annexed herewith asAnnexure A.
Prevention of Sexual Harassment at Workplace
The Company has in place a Prevention of Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. An Internal Committee has been set up to redress complaints receivedregarding sexual harassment. The Company has designated the external independent member asa Chairperson of the Committee. There were no complaints received during the year underreview of sexual harassment.
VI. OTHER DISCLOSURES
Listing at Stock Exchange
The Equity Shares of the Company are listed at Bombay Stock Exchange (Scrip Code:530461) and its shares are actively traded at Bombay Stock Exchange. The Company confirmsthat it has paid the Annual Listing fees for the year 2019-20 to BSE where the Company'sshares are listed.
Extract of Annual Return
The extract of annual return in Form MGT-9 as required under Section 92(3) and Rule 12of the Companies (Management and Administration) Rules 2014 is appended as an AnnexureC to this Report.
Your Directors would like to expose their grateful appreciation for the co-operationreceived from its Bankers Government Authorities Customers Vendors Business Associatesand Shareholders during the year under review. Your Directors also wish to place in recordtheir deep sense of appreciation for the committed services of the executive staff andworkers of the Company.
The statements contained in the Board's Report and Management Discussion and Analysiscontain certain statements relating to the future and therefore are forward looking withinthe meaning of applicable securities laws and regulations. Various factors such aseconomic conditions changes in government regulations tax regime other statues marketforces and other associated and incidental factors may however lead to variation in actualresults.
ANNEXURE A TO THE BOARD'S REPORT:
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
Energy conservation measures have been implemented wherever possible and company isusing improved operational method in order to optimize the consumption of energy per unit.The company is continuously doing research and development regarding production of highestquality salt to meet the demands of its high profile customers. The company has solarpower plant at Rajgarh Madhya Pradesh and generating electricity. The Company producedwhich are being sold to Indian Energy Exchange and Power Exchange India Limited. TheCompany is trying for export of salt.
The company has set up a fully-integrated 300 KWP in- house Grid Tied Solar Power Plantat its factory located at Nawa city Nagaur (Raj.) in addition to the existing 100 KWPsolap plant under captive power reverse net metering scheme of Government of Rajasthan.This will result in saving of approx. Rs. 75 Lakhs per annum for the company. This Solarplant will meet upto 80% of energy requirement of the company and with this Saboo SodiumChloro Limited becomes the first salt refinery in India to use Solar energy for their 80%of energy consumption. Company is now planning to set up a fully-integrated 300 KWP in-house Grid Tied Solar Power Plant at the Samskara Resort.
FOREIGN EXCHANGE EARNINGS AND OUTGO: There were nil foreign exchange earnings andoutgo.