Your Directors are pleased and privileged to present 34thAnnual Report and the AuditedAccounts of the Company for the year ended March 31 2020.
| || ||(Rs InLakhs) |
| ||2019-20 ||2018-19 |
|Gross total income from operations ||29013.61 ||35616.53 |
|Other Income ||126.26 ||198.73 |
|Profit before Interest Depreciation and Tax (PBIDT) ||4015.63 ||4567.42 |
|Interest ||103.17 ||143.75 |
|Profit before depreciation and Tax (PBDT) ||3912.46 ||4423.67 |
|* Depreciation ||1276.29 ||1205.97 |
|Profit before Exceptional Item ||2636.17 ||3217.70 |
|C S R ||41.00 ||42.50 |
|Extraordinary Item ||0 ||0 |
|Profit after CSR ||2595.17 ||3175.20 |
|Provision for Taxation || || |
|i) Current Year ||659.36 ||1026.61 |
|ii) Deferred Taxation ||-24.00 ||45.00 |
|Net Profit before Extraordinary Item ||1959.81 ||2103.59 |
|Extraordinary Item ||0 ||0 |
|Profit after Extraordinary Item ||1959.81 ||2103.59 |
Note: Figures have been re-grouped wherever necessary to confirm to current periodclassification.
Your Directors recommended interim dividend of Rs 5/- per equity share (50%) of facevalue of Rs 10/- each for the year ended March 31 2020 paid in March and the final samehas been confirmed dividend for the year.
CREDIT RATING is The company's financial reflected by becoming a debt free companyfor the last few years and credit ratings ascribed by CRISIL
(Reaffirmed) Longtermrating :CRISILA-/Stable Short term Rating : CRISILA2+ (Reaffirmed)
Review of business operations:
In the year 2019-20 the Domestic & Global Automotive Industry was passing throughone of the most challenging times with the introduction of B. S. IV and then B. S. VI andalso introduction of electric vehicles pushed Domestic Auto industry to slow down.Moreover rural economy showed signs of slow down. Domestic Industry performed very welland achieved the targets for the first two quarters and in the third quarter startedslowing down and the last quarter drop down to the rock bottom because with the increasedsales effect and manufacturing cost effective production.
Company achieved reasonably good financial results.
The Company posted the gross turnover of Rs 29013.61 lakhs during year 2019-20 asagainst Rs 35616.53 Lakhs in the previous year 2018-19 and Net turnover of
Rs 23551.32 Lakhs during the year 2019-20 as compared to Rs 28909.79 Lakhs for theprevious year 2019-20. The company R&D expenditure is Rs 57.81Lakhs of Net salesduring the year to catch up with up-gradation of technology and to meet OEM's everdemanding quality and new developments requirement to improve life cycle of their productmeeting BS-VI norms of environmental standards for Auto components. The operations of theCompany on the whole have been satisfactory.
In pursuance of National Electric Mobility Machine Plan (NEMMP) and other initiativesand Government to achieve long term growth in industry and reduced emissions and oildependents. To meet these stringent environmental regulations on pollution and carbonemissions have necessitated heavy investments in both automobile and also auto parts suchas our industries. To meet with the challenges of these BS-VI norms and having achievedBS-IV norms in the years 2015-16 2016-17 and 2017-18 during the year 2019-20 have beenmany challenges and settling down for an improved performance.
As the rural economy is growing the demand for two wheelers and three wheelerscomplying BS-VI norms may give encouraging results and hopeful of maintaining growth thisyear also. Company is now focusing customer preferences and distributions channels andalways exploring new avenues in the export market which will give encouraging results.Earnings Before Depreciation Interest and Tax (PBDIT) at Rs 3974.63 lakhs as againstprevious year of Rs 4524.92 Lakhs. The Profit Before Tax was at
Rs 2595.17 lakhs as compared to Rs 3175.20 lakhs in
2018-19 an decrease of 18.27%
In line with motto of Reshaping our business for tomorrow' Samkrg is serving thegrowing needs of our Business Accounts and Individual Customers of export and domestic andalso OEM Customer segments by offering cost effective prices and different Products andServices. Our end to end operation across the value chain from gross level customersenable us to deliver superior quality products. Over the years we have built strongrelationship with the domestic and overseas customers and other channel partners that hasallowed us to serve all Customer segments through our nationwide professional distributionnetwork. We are now leveraging this extensive network established for our products toextend our customer-centric services.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Companies Act 2013 with respect to the Directors'Responsibility Statement the
Board of Directors of the Company hereby confirms:
In the participation of Annual Accounts applicable Indian accounting standards havebeen followed and that there have been no material departures.
The Directors had selected such policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31
2020 and the profit loss account of the Company for that period.
The Directors had taken proper and care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities.
The Directors had prepared the Annual on a going concern basis and
The Directors in the case of listed had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively
The Directors had devised proper systems ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
The Company's Internal Auditors have periodic audit to provide reasonable assurancethat the Company's established policies and procedures have been followed. The AuditCommittee of the Board meets once in a quarter with Internal Auditors to review internalcontrol and financial reporting issues.
RISK MANAGEMENT COMMITTEE
Risk management committee consists of the following Directors:
|1. ||Mr ||. S.D.M. Rao ||- ||Chairman |
|2. ||Mr ||. S Madhava Rao ||- ||Member |
|3. ||Mr ||. K Chaitanya Abhishek ||- ||Member |
RISK MANAGEMENT POLICY
The company has taken all the steps to mitigate the following risks: Raw materialprices: Ours is a continuous high volume manufacturing industry. Our profitability willdepend on change in the price in raw materials and input costs.
Foreign currency Risks: Exchange rate fluctuations sometimes effect. Adequate stepswere taken. Competition and Price Pressure: The Company is facing stiff competition in thesegments of OEMs and aftermarket as well as price pressure from the OEMs which playingmajor roll on the profitability of the company.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility committee consists of the following Directors:
|1. Mr. S Kishore ||Chairman |
|2. Mr. Pinninti Raghu Prakash Swamy ||Member |
|3. Mr. K Chaitanya Abhishek ||Member |
Corporate social responsibility policy was adopted by the Board of Directors on therecommendation of corporate social responsibility committee.
Report on corporate social responsibility as per Rule 8 of Companies (Corporate SocialResponsibility) Rules 2014 is prepared and the same is enclosed as annexure - 3.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT
DIRECTORS UNDER SECTION 149(6)
The Independent Directors have submitted the declaration of independence as requiredpursuant Sec. 149(7) of the Companies Act 2013 stating that they meet the criteria ofindependence as provided in Sec. 149(6).
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee consists of the following Directors namelyMr. K Chaitanya Abhishek Ms. Nama Rishita Mr. S. MadhavaRao.
Brief description of terms of reference:
Iden tifying persons who are qualified to directors and who may be appointed in seniormanagement in accordance with the criteria laid down and recommend to the Board for theirappointment and removal;
Carry on the evaluation of every director's performance;
For mulation of the criteria for qualifications positive attributes and independenceof a director;
R ecommend to the Board a policy relating to remuneration of the directors keymanagerial personnel and other employees;
For mulation of criteria for evaluation independent Directors and the Board;
Devising a policy on Board diversity; and
Any other matter as the Board may decide time to time.
Nomination and Remuneration policy The objective of the Policy:
1. T o lay down criteria and terms and conditions regard to identifying persons who arequalified to become Directors (Executive and Non-Executive) and persons who may beappointed in Senior Management and Key Managerial positions and to determine theirremuneration.
2. T o determine remuneration based on
Company's size and financial positions and trends and practices on remunerationprevailing in peer companies.
3. T o carry our evaluation of the performance Directors.
4. T o provide them reward linked directly to effort performance dedication andachievement relating to the Company's operations.
5. T o retain motivate and promote talent to ensure long term sustainability oftalented managerial persons and create competitive advantage.
POLICIES ON APPOINTMENT OF DIRECTORS AND REMUNERATION
Your Company recognizes the importance and benefits of having the diverse Board toenhance quality of its performance and has adopted a Nomination and Remuneration Policy asformulated by the Board of Directors. The Company's Nomination and Remuneration Policy haslaid down a framework for remuneration of Directors (Executive and Non-Executive) KeyManagerial Personnel and Senior Management Personnel.
These Policies are available on the Company's website at thehttps://www.samkrgpistonsandrings.com
PERFORMANCE EVALUATION OF DIRECTORS AT BOARD
AND INDEPENDENT DIRECTORS' MEETINGS
Pursuant to the provisions of the Act and Listing Regulations the Board has carriedout an annual performance evaluation of its own performance the directors individually aswell as the evaluation of the working of its various Committees for the financial year2019-20. The evaluation was conducted on the basis of a structured questionnaire whichcomprises performance criteria such as performance of duties and obligations independenceof judgement level of engagement and participation attendance of directors theircontribution in enhancing the Board's overall effectiveness etc. The Board has expressedtheir satisfaction with the evaluation process. The observations made during theevaluation process were noted and based on the outcome of the evaluation and feedback ofthe Directors the Board and the management agreed on various action points to beimplemented in subsequent meetings. The observations included those relating to furtherimprovement in participation and deliberations at the meetings and conduct of themeetings circulation of board presentations and its content.
The independent directors met on 23.09.2019 without the presence of other directors ormembers of Management. All the independent directors were present at the meeting. In themeeting the independent and directors reviewed performance of non-independent directorsthe Board as a whole and Chairman. They assessed the quality quantity and timeliness offlow of information between the Company management and the Board.
Pursuant to Regulation 25(7) of the SEBI (LODR) Regulations the Company has put inplace a system to familiarize its Independent Directors about the
Company its financial products the industry and business model of the Company. Inaddition the Company also updates on continuous basis to the Independent Directors aboutthe ongoing events and developments relating to the Company significant changes inregulatory environment through the Board/ Committee meetings and separate familiarisationprogramme(s). Familiarization Programme details:
|(i) No. of programmes attended During the by Independent Director year (during the year and on a ||4 |
|Cumulative cumulative basis till date) ||16 |
|(ii) No. of hours spent by During the Independent Directors in year such programmes (during the year and on a cumulative Cumulative basis till date) ||2.30 10.30 |
Pursuant to Regulation 46 of SEBI (LODR) Regulations the details of FamiliarizationProgramme is uploaded on the Company's website.
POLICY FOR PROHIBITION OF INSIDER TRADING
Vide notification No.EBI/LAD-NRO/GN/2018/59
Securities and Exchange Board of India (SEBI) has notified SEBI (Prohibition of InsiderTrading)
(Amendment) Regulations 2018 with effect from April 01 2019. The Company hasaccordingly formulated and adopted Code for Fair Disclosure of Unpublished Price SensitiveInformation. The said code is also available on the website of company.
PARTICULARS OF LOANS GUARANTEES AND
INVESTMENTS UNDER SECTION 186:
The company has neither issued any Loans Guarantees nor made any investments duringthe Financial year 2019-20.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS
WITH RELATED PARTIES REFERRED TO Sec. 188(1)
The particulars of contracts or arrangements with related parties referred to Section188(1) are prepared in form No.AOC-2 pursuant to Section 134(3)(h) of the Act and Rule8(2) of the Companies (Accounts) Rules 2014. The details of the transactions with relatedparties are given in the financial statements.
TRANSFER OF AMOUNTS TO RESERVES
The Company proposes to transfer an amount of
Rs 1185.69 lakhs to the general reserve for the financial year ended 31stMarch 2020.
LISTING OF EQUITY SHARES
The Company's equity shares are listed on BSE Ltd. PJ Towers Dalal Street Mumbai400001.
MEETINGS OF THE BOARD OF DIRECTORS
The details of the Board of Directors Meeting held were given in the Report onCorporate Governance under Item No. 2(b).
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return is prepared in Form MGT-9 as per the provisions of theCompanies Act 2013 and Rule 12 of the Companies (Management and Administration) Rules2014 and the same is enclosed as Annexure-1 to this report.
The conservation of energy technology absorption foreign exchange earnings and outgopursuant to provisions of Sec. 134(3) (m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014. Information with respect to the conservation of energytechnology absorption foreign exchange earnings and outgo pursuant to provisions of Sec.134(3)(m) of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 isprepared and annexed as Annexure -2 to this report.
BOARD OF DIRECTORS
Shri S Madhava Rao Director of the Company who is liable to retire by rotation atthis Annual General Meeting and being eligible according to his performance and uponrecommendation of nomination and remuneration committee for re-appointment.
Key Managerial Persons
Mr. Kota Ramesh has been appointed as Chief Financial
Officer w.e.f. 16th May 2019.
Mr. Dinker Mishra has been appointed as Company
Secretary & Compliance Officer w.e.f. 20th April 2019.
The Company has not accepted any Deposits in terms of Section 73 of the Companies Act2013 and the rules made there under and hence compliance with the same is not applicable.
At the Annual General Meeting held on 25th September 2017 M/s. Sridhara Chary V &Co. Chartered Accountants were appointed as statutory Auditors of the Company to holdofficetill the conclusion of the
Annual General Meeting to be held in the calendar year 2022.
There are no qualifications reservations or adverse remarks made by M/s Sridhara CharyV & Co. chartered Accountants Hyderabad Chartered Accountants (ICAI Reg. No.011478S)Statutory Auditors in their report for the Financial Year ended March 31st 2020..
Composition of Audit Committee included in Corporate Governance report.
A separate report on Corporate Governance is annexed as part of the Annual Report alongwith the Auditor's
Certificate on its compliance.
The Board of Directors has adopted whistle Blower policy. The Whistle Blower policyaims for conducting the affairs in the fair and transparent manner by adopting higheststandards of professionalism honest integrity and ethical behavior. All permanentemployees of the Company are covered under the Whistle Blower Policy.
A mechanism has been established for employees to report concerns about unethicalbehavior actual or suspected fraud or violation of Code of Conduct and Ethics. It alsoprovides for adequate safeguards against the victimization of employees who avail of themechanism and allows direct access to the chairperson of the audit committee inexceptional cases.
SECRETARIAL AUDITOR REPORT
As per the provisions of Section 204 of the Companies Act 2013 the Board of Directorshave appointed Mr. V B S S Prasad Practicing Company Secretary (C.P.No: 4605) asSecretarial Auditor to conduct Secretarial Audit of the Company for the Financial yearended 31st March 2020. Secretarial Audit Report issued by Mr. V B S S Prasad PracticingCompany Secretary in form MR-3 is enclosed as Annexure - 4 to this Annual Report.
There are no qualifications in Secretarial Audit Report.
PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL:
The Statement of particulars of Appointment and Remuneration of Managerial Personnel asper Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014as enclosed as per Annexure - 5 to this Annual Report.
All properties and insurable interests of the Company including building plant &machinery and stocks have been fully insured.
CHANGE IN NATURE OF BUSINESS
There is no change in the Company's nature of business during the financial year endedMarch 31st 2020.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The company has well defined internal control systems and procedures for ensuringoptimum utilization of various resources Investment decisions involving CapitalExpenditure or taken up only after due appraisal and review. Internal audit functioncovers and carried out periodically and reviewed by the Audit Committee to ensure that allpolicies and procedures are adhered to and all statutory obligations complied with.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS
No such orders have been received.
MATERIAL CHANGES AND COMMITMENTS
There are no Material changes and commitments in the business operations of the Companyfrom the financial year ended 31st March 2020 to the date of signing of the Director'sReport.
POLICY ON SEXUAL HARASSMENT
The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplacein accordance with the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013. During the Financial year ended 31st march 2020 the companyhas not received any Complaints pertaining to Sexual Harassment.
Your Directors wish to place on record their appreciation for the cooperation andsupport of Bankers Customers Business Associates Shareholders dealers and supplierswho are enabling the Company to achieve its goals. The Directors also place on recordtheir appreciation made by the employees at all levels.
| ||On behalf of the Board of Directors |
| ||Sd/- |
| ||S. D. M. RAO |
| ||CHAIRMAN &MANAGING DIRECTOR |
|Place: Hyderabad || |
|Date: 24th June 2020 |