TO THE SHAREHOLDERS
Your Directors have great pleasure in presenting their Twenty-Fifth Annual Reporttogether with Audited financial statements of the Company for the year ended 31stMarch 2019.
|Details || |
( Rupees in Lakh )
| ||31.03.2019 ||31.03.2018 |
|INCOME || || |
|Sales and Other operating Receipts ||13287.01 ||10681.91 |
|Other Income ||10.32 ||9.67 |
|Total ||13297.33 ||10691.58 |
|Gross Profit before interest depreciation and tax ||1014.29 ||941.15 |
|Less: Interest ||399.19 ||346.69 |
|Profit/(Loss) after interest but before depreciation and tax ||615.10 ||594.46 |
|Less: Depreciation ||384.98 ||373.47 |
|PROFIT BEFORE TAX ||230.12 ||220.99 |
|Less: Taxes ||67.08 ||7.95 |
|NET PROFIT AFTER TAX ||163.04 ||213.04 |
|Add: Other Comprehensive Income ||4.60 ||36.24 |
|Less: Dividends & Tax on Dividend ||38.07 ||38.00 |
|Add: Opening Surplus ||2454.77 ||2243.49 |
|Surplus carried over to Balance sheet ||2584.34 ||2454.77 |
Your Directors are pleased to recommend a dividend of Rs.0.60 per share for the yearended 31st March 2019 subject to the approval of members. The total outgo inthe form of dividend including corporate dividend tax will be to the extent ofRs.38.07Lakh. (Previous Year Rs. 38.07 Lakh)
REVIEW OF OPERATIONS:
During the year under review the production of cotton yarn is 39.26 Lakh Kgs asagainst 37.92 Lakh Kgs in the preceding year. The Sales Turnover increased to Rs. 13141.45Lakh as against Rs. 10537.30 Lakh in the previous period. The Sales turnover includesTotal Export Sales of Rs.7970.27 Lakh as against Rs.3346.08 Lakh in the previous year.During the year the export turnover of traded goods increased to Rs.3122.93 Lakh from Rs.1204.47 Lakh.
During the year the green energy generated was69.58 Lakh units (net) of windelectricity as against 77.26 Lakh units in the previous year.
By captive consumption the Wind Electricity contributed for reduction in power costand contributed to the profits of the textile mill. Hence the overall performance of theCompany should be considered as Satisfactory.
OUT LOOK FOR THE IMMEDIATE FUTURE:
The Spinning segment of the textile industry continues to witness the paradox ofmis-match of prices of cotton (raw material) and prices of yarn (finished goods). Yourcompany have installed compact equipments for 100% installed capacity to improve thequality.Further we are into women's' casual trendy wear under the Brand "NEWRIELONDON". We have showroom both company owned and franchise owned. We have a networkof distributors throughout the country.
EVENT SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS
There are no material changes and commitments affecting the financial position of theCompany subsequent to the end of the financial year.
The Company has not accepted nor holds any public deposits within meaning of Section 73to 76 of the Companies Act 2013 and Companies (Acceptance of Deposits) Rules 2014 duringthe year under review.
Corporate Governance Management Discussion and Analysis and a certificate from theAuditors of the Company regarding compliance of condition of Corporate Governance isfurnished in Annexure.
EXTRACT OF ANNUAL RETURN:
As required under Section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return as on31st March 2019 in MGT 9 is given which form part of this Annual Report is enclosed asAnnexure I.
Sri Arun Kumar Jhajharia (DIN: 00003086) Director who retires by rotation at theensuing Annual General Meeting being eligible offers himself for reappointment. The Boardrecommends his reappointment in the forthcoming Annual General Meeting.
The tenure of Sri G.V.S. Desikan (DIN: 00050597) and Sri Dhiresh Jayasi (DIN: 06931744)Independent Directors of the Company expires at close of business hours on 28th September2019. The Board of Directors at their meeting held on 13th August 2019 have recommendedthe reappointment of Sri G.V.S. Desikan and Sri.Dhiresh Jayasi as Independent Directorsfor a second term of five consecutive years commencing from close of business hours of28th September 2019.
Your Directors recommend the re-appointment of G.V.S. Desikan (DIN: 00050597) and SriDhiresh Jayasi (DIN: 06931744) in the forthcoming Annual General Meeting.
KEY MANAGERIAL PERSONNEL
Key Managerial Personnel of the company are as follows
|Name of the Persons ||Designation |
|Sri Shyamlal Agarwala ||Managing Director |
|Sri Manoj Kumar Jhajharia ||Joint Managing Director |
|Sri M.S. Selvaraj ||Chief Financial Officer |
|Sri K.B. Sajith ||Company Secretary |
The Audit Committee comprises of
1. Sri G.V.S. Desikan - Chairman (Non-Executive Independent Director)
2. Sri Dhiresh Jayasi - Member (Non-Executive Independent Director)
3. Sri Manoj Kumar Jhajharia - Member (Joint Managing Director)
The Board has implemented the suggestions made by the Audit Committee from time totime.
EVALUATION OF BOARD OF DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 (10) SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an evaluation of its own performance based on the specific duties obligation and theexecution of the same the directors individually as well as the evaluation of the workingof its Audit Nomination and Remuneration and other Committees the performance evaluationof the Independent Directors Chairman and Managing Director. The Board expressed itssatisfaction with the execution process.
The Board of Directors met Four times during this financial Year on the followingdays:
|21.05.2018 ||09.08.2018 ||13.11.2018 ||13.02.2019 |
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees governed under the provisions ofSection 186 of the Companies Act 2013. The details of the Investments made by the Companyare given in the notes to the financial statements.
ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a vigil mechanism for directors and employees to reportconcerns about unethical behaviour actual or suspected fraud or violation of theCompany's code of conduct or ethics. The policy has been posted in the website of theCompany viz. www.salonacotspin.com
As per the provision of the Sexual Harassment of Women & Workplace (PreventionProhibition & Redressal) Act 2013 the company has constituted an Internal ComplaintsCommittee. During the year 2018-19 no complaint was received by the companies.
POLICY ON NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors have framed a policy setting out the framework for payment ofremuneration to Directors Key Managerial Personnel and Senior Management Personnel of theCompany. The policy is explained as part of the Corporate Governance Report.
The Committee ensures that:
a. The level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully.
b. Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks and
c. Remuneration to Directors Key Managerial Personnel and Senior Management involves abalance between fixed and incentive pay reflecting short and long term performanceobjectives appropriate to the working of the Company and its goals.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm's length basis and in the ordinary course of business and that the provisions ofSection 188 of the Companies Act 2013 are complied. Further no materially significantrelated party transactions made by the Company with Promoters Key Managerial Personnel orother designated persons which may have potential conflict with interest of the Company atlarge. Hence reporting in Form AOC-2 is not required. Approval of Audit Committee wasobtained for transactions of repetitive nature on annual basis. All related partytransactions are placed before the Audit Committee and Board of Directors for theirreview. The policy on Related Party transactions is available in the websitewww.salonacotspin.com
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS
There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status and the Company's operation in future.
DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to the provisions of Section 134(3) (c) of the Companies Act 2013 yourDirectors confirm:
a) that in the preparation of annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b) that your Directors had 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 as at the end of thefinancial year and of the Profit of the Company for that period;
c) that your Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the Assets of the Company and for preventing and detecting fraud andother irregularities;
d) that your 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.
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.
M/s. Gopalaiyer and Subramanian Chartered Accountants Coimbatore was appointed asAuditors of the Company for a term of Five years pursuant to the resolution passed by themembers at the Annual General Meeting held on 27th September 2017.
M/s. Gopalaiyer and Subramanian Chartered Accountants have consented and confirmedtheir eligibility and desire to continue as Statutory Auditors of the company.
Pursuant to provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company appointedSri S.R. Baalaji.B.Com. F.C.S Practicing Company Secretary to undertake the SecretarialAudit of the Company. The report is annexed herewith as Annexure - II
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time the Board of Directors on therecommendation of Audit Committee has appointed Sri B. Venkateswar Cost AccountantCoimbatore as Cost Auditor to conduct Cost Audit of the Company for the financial year2019 - 2020.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Company has an Internal Audit which monitors andevaluates the efficiency and adequacy of internal control system in the Company itscompliance with operating systems accounting procedures and policies at all locations ofthe Company. The scope and authority of the Internal Audit function is defined in theInternal Audit Manual.
To maintain its objectivity and independence the Internal Audit function reports tothe Chairman of the Audit Committee and to the Chairman and Managing Director of theCompany.
Based on the report of internal audit function corrective action are taken in therespective areas and thereby strengthen the controls. Significant audit observations andrecommendations along with corrective actions thereon are presented to the Audit Committeeof the Board.
STATEMENT ON RISK MANAGEMENT POLICY
Pursuant to Section 134(3) (n) of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company has constituted a RiskManagement Committee. The Committee has developed a Risk Management Policy and implementedthe same. The details of the Committee and its terms of reference are set out in theCorporate Governance report forming part of the Board's report.
At present the Company has not identified any element of risk which may be a threat forthe existence of the Company.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Company has constituted Corporate Social Responsibility (CSR) Committee which shallrecommend to the Board the activities to be undertaken by the Company as specified inSchedule VII recommend the amount of expenditure to be incurred on such activities andmonitor the CSR Policy of the Company. The CSR Committee constituted by the Boardconsisted of the following Directors with effect from 13th November 2014
1. G.V.S. Desikan - Chairman
2. Shyamlal Agarwala - Member
3. Manoj Kumar Jhajharia - Member
The Company has partially spent the amount stipulated under the requirements of theAct. The amount spent on CSR activities during the year 2018-19 is Rs.550996/-. Theamount remaining unspent namely Rs.350301/-(pertaining to 2016-17) will be spent duringthe year 2019-20. The Company is in the process of identifying eligible projects afterwhich the unspent amount will be deployed for the said purpose. The details of theCorporate Social Responsibility activities / expenditure is given as Annexure III.
The particulars required to be included in terms of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 on Conservation ofEnergy etc. is enclosed as Annexure IV.
No employee of the Company was in receipt of remuneration of Rs.60.00 Lakh per annum ormore and no employee of the Company employed for the part of the financial year 2019 wasin receipt of remuneration of Rs. Five Lakhs per month or more.
The information required under Section 197(12) of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and formingpart of the Directors report for the year ended 31st March 2019 is enclosed as Annexure V.
None of the employees listed in the said Annexure is a relative of any Director of theCompany. None of the employees hold (by himself or along with his spouse and dependentchildren) more than two percent of the equity shares of the Company.
The Industrial relations continued to remain cordial during the period and theBoardplaces its appreciation for the services rendered by the staff and employees of theCompany.
During the year under review the Reserves and Surplus stood at Rs.2599.34 Lakh(Rs.2469.77 Lakh credit balance in the previous year). The Company met all financialcommitments to the Bankers on account of Term Loan and Working Capital Credit.
TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND
The Company sends periodical letters to all shareholders whose dividends are unclaimedso as to ensure that they receive their rightful dues. Efforts are also made inco-ordination with the Registrar to locate the shareholders who have not claimed theirdues.
During the year the company has transferred a sum of Rs.337660 (Dividend Year2010-11) to Investor Education and Protection Fund the amount which was due & payableand remained unclaimed for a period of seven years.
DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS
The Company has received necessary declaration from each Independent Director of theCompany under Section 149(7) of the Companies Act 2013 that the Independent Directors ofthe Company meet with the criteria of their independence laid down in section 149(6).
The equity shares of the Company are listed and traded in National Stock Exchange ofIndia Limited (NSE).
The Equity Shares of the Company are permitted for trading in BSE Indonext segment -under group "S" of Bombay Stock Exchange Limited and subsequently withdrawn on24th June 2014 due to exit option and de-recognition to the stock exchanges.
Members have option to hold their shares in dematerialized form through the NationalSecurities Depositary Limited (NSDL) and Central Depositary Services (India) Limited(CDSL). The ISIN of the Company is INE498E01010.
The Directors wish to place on record their gratitude to State Bank of India UnionBank of India Oriental Bank of Commerce and The Catholic Syrian Bank Limited for theirfinancial assistance. Your Directors also take this opportunity to express theirappreciation of the co-operation extended by the employees and the Shareholders' for theirappreciation of the managements' efforts expressed at the general meetings of the Company.
The Board dedicates its prayers to invoke the blessing of Lord Vishnu Goddess LakshmiLord Shiva and Goddess Sakthi for the continued prosperity of the Company and all itsstakeholders
| ||FOR AND ON BEHALF OF THE BOARD |
|Place: Coimbatore ||SHYAMLAL AGARWALA |
|Date : 13th August 2019 ||Chairman |
| ||DIN : 00003055 |