TO THE SHAREHOLDERS
Your Directors have great pleasure in presenting their Twenty-Seventh Annual Reporttogether with Audited financial statements of the Company for the year ended 31stMarch 2021.
|Details || |
( Rupees in Lakh )
| ||31.03.2021 ||31.03.2020 |
|INCOME || || |
|Sales and Other operating Receipts ||23012.72 ||12184.67 |
|Other Income ||11.35 ||7.70 |
|Total ||23024.07 ||12192.37 |
|Gross Profit before interest depreciation and tax ||1487.76 ||862.11 |
|Less: Interest ||446.03 ||407.52 |
|Profit/(Loss) after interest but before depreciation and tax ||1041.73 ||454.59 |
|Less: Depreciation ||265.77 ||264.62 |
|PROFIT BEFORE TAX ||775.96 ||189.97 |
|Less: Taxes ||155.97 ||72.62 |
|NET PROFIT AFTER TAX ||619.99 ||117.35 |
|Add: Other Comprehensive Income ||-27.13 ||-2.68 |
|Less: Dividends & Tax on Dividend ||0.00 ||38.06 |
|Add: Opening Surplus ||2660.95 ||2584.34 |
|Surplus carried over to Balance sheet ||3253.81 ||2660.95 |
Your Directors are pleased to recommend a dividend of Rs 1 per share for the yearended31st March 2021 subject to the approval of members. The total outgo inthe form of dividendwill be to the extent of Rs.5262400.
REVIEW OF OPERATIONS:
During the year under review the production of cotton yarn is 31.93 Lakh Kgs asagainst 36.37 Lakhs Kgs in the preceding year. During the year due to lock down imposedby both Central and State government on account of global pandemic virus COVID19 themanufacturing activities could not active during the period from 24th March 2020 to 5thMay 2020. However the Sales Turnover has increased to Rs.22508.45 Lakh as against Rs.11984.79 Lakh in the previous period. The Sales turnover includes Export Sales ofRs.18017.22 Lakh as against Rs.6856.90 Lakh in the previous year. During the year theexport turnover of traded goods increased to Rs.11229.78 Lakh from Rs.1613.71 Lakh.
During the year the renewable energy generated was 62.11 Lakh units (net) of windelectricity as against 62.96 Lakh units in the previous year in addition to that duringthe year the company has installed 1.350 MW Capacity of Solar Power Plant on Roof top atfactory premises for captive consumption.
By captive consumption the renewable energy which leds to contributed for reduction inpower cost and contributed to the profits of the textile mill. Hence the overallperformance of the Company should be considered as Satisfactory.
OUT LOOK FOR THE IMMEDIATE FUTURE:
Considering the better performance of the year the company has propose to install twomore Ring frame with compact equipment and Knitting Machine for manufacturing value addedproducts. Company's niche products are well establishing in the overseas market hence weare expecting more export orders from the overseas regular buyers during the forth comingyears. We are into women's' casual trendy wear under the Brand "NEWRIELONDON". We have a network of 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:
The Annual Return as required under sub-section (3) of Section 92 of the Companies Act2013 (the Act') in form MGT-7 is made available on the website of the Company andcan be accessed at www.salonacotspin.com.
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 Board has re-appointed Shri Shyamlal Agarwala (DIN: 00003055) as Managing Directorof the Company for a period of Five years with effect from 01st July 2021 to 30th June2026 subject to the approval of the members in ensuing General Meeting as a SpecialResolution. Shri Shyamlal Agarwala (DIN: 00003055) Promoter Chairman and ManagingDirector of the Company and to take him on the Board for larger long term interest of theCompany. Directors recommend his re-appointment.
The Board has also re-appointed Sri. Manoj Kumar Jhajharia(DIN: 00003076) as JointManaging Director of the Company for a period of five years with effect from 01st July2021 to 30th June 2026 subject to the approval of the members in ensuing General Meetingas a Special Resolution.
Particulars of the directors seeking appointment/re-appointment are provided in thenotes forming part of the notice for the ensuing Annual General Meeting as required underRegulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The Company has received disclosures from all the directors and none ofthe directors has been disqualified as stipulated under Section 164 of the Companies Act2013 and rules made thereunder.
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 Dhiresh Jayasi Chairman (Non-Executive Independent Director)
2. Smt. S.Meenakumari-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:
|25.06.2020 ||14.08.2020 ||11.11.2020 ||12.02.2021 |
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 2020-21 no complaint was received by the company.
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 website www.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 theAnnual 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 - I
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 year2021-22.
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. Dhiresh Jayasi - Chairman
2. Shyamlal Agarwala - Member
3. Manoj Kumar Jhajharia Member
The Company has spent the amount stipulated under the requirements of the Act. Theamount spent on CSR activities during the year 2020-21 is Rs.170038. The details of theCorporate Social Responsibility activities / expenditure is given as Annexure II.
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 III.
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 2021 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 2021 is enclosed as AnnexureIV.
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 the Boardplaces 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.3268.81 Lakh(Rs.2675.95 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 was not required to transfer to Investor Education andProtection Fund no amount which was due & payable and remained unclaimed for a periodof 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 subsequentlywithdrawn on 24th June 2014 due to exit option and de-recognition to the stockexchanges.
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 Union Bank of India PunjabNational Bank (ErstwhileOriental Bank of Commerce) CSB Bank (formerly The Catholic SyrianBank Limited) and State Bank of India for their financial assistance. Your Directors alsotake this opportunity to express their appreciation of the co-operation extended by theemployees and the Shareholders' for their appreciation of the managements' effortsexpressed 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 : 28th June 2021 ||Chairman |
| ||DIN : 00003055 |