To the Members of
Sangam (India) Limited
The Board of Directors' present the 33rd Annual Report of the Companytogether with the Audited Financial Statements for the Financial Year ended 31stMarch 2019.
The Company's financial performance for the year ended 31st March 2019 issummarized below:
| || ||(र in Crores) |
|Particulars ||31st March 2019 ||31st March 2018 |
|Revenue from Operations ||1873.63 ||1649.03 |
|Profit before Tax & Depreciation ||104.94 ||89.70 |
|Depreciation ||80.48 ||77.05 |
|Profit before Tax ||24.46 ||12.65 |
|Tax Expense || || |
|Current Tax ||8.23 ||- |
|Deferred Tax ||0.62 ||7.04 |
|Tax Expense for Earlier Years ||- ||(24.84) |
|Profit for the year ||15.61 ||30.45 |
OPERATIONAL RESULTS AND STATE OF AFFAIRS
The Company's Revenue from Operations during 2018-19 is र1873.63 Crores as againstर1649.03 Crores during 2017-18.
The profit before interest depreciation and tax (PBIDT) is र171.48 Crores during2018-19 as against र152.52 Crores in previous year. The profit after tax of the Companyis र15.61 Crores in the current year as against र30.45 Crores in previous year.
During the year the Company's had export revenue of र494.71 Crores as againstर440.87 Crores in previous year. The exports constituted about 26% of the total revenueof the Company.
A capex project of र30 Crores was taken in hand in the current year for expansion andmodernization cum balancing of existing manufacturing facilities as under:
1. Spinning Unit-I Biliya Kalan Bhilwara:- The Company has installed some balancingand modernization machinery i.e. Blow Room Bale opener Slub attachment Draw FrameCarding Machines Speed Frames for balancing and modernization of the spinning plant.
2. Spinning Unit-III Soniyana Chittorgarh:- Some machines like Bailing Press MachineRoving Stop Motion & Monitoring System and electrical equipment were installed tofulfill the internal requirement of the unit.
3. Processing Unit Atun Bhilwara:- The Company has expanded its processing capacityby installing one stenter and other machines of processing line. By this installation thecompany has increased its processing production by 9 million meter per annum.
4. Weaving & Seamless Garment Unit Atun Bhilwara:- Some Balancing Machines/equipment like Industrial Sewing Machine Garment Dyeing Machine Stretch Warping MachineGrey Fabric Checking Machine Sewing Machine etc. have been installed for balancing theexisting plant set-up and to improve the quality of the products.
The project has been completed as per schedule.
TRANSFER TO RESERVE
The Board of Directors of the Company has not proposed to transfer any amount toGeneral Reserve of the Company for the current financial year.
Your Directors have recommended a dividend @ 10% on 39421559 equity shares of' 10/-each (' 1.00 per Equity Shares) for the financial year 2018-19 aggregating to र3.94Crores which is subject to approval at the ensuing Annual General Meeting.
WHOLLY OWNED SUBSIDIARY COMPANY
In accordance with Section 129(3) of the Companies Act 2013 ("Act") theCompany has prepared a Consolidated Financial Statements of the Company and itsSubsidiary which is forming part of this Annual Report.
Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts)Rules 2014 a statement containing salient features of the financial statements ofSubsidiary Company is given in Form AOC-1 as Annexure I.
In accordance with third proviso of Section 136(1) of the Act the Board's Report ofthe Company containing therein standalone and consolidated financial statements has beenplaced on the website of the Company www. sangamgroup.com Further as per fourth provisoof the said section Audited Financial Statements of the Subsidiary have also been placedon the website of the Company www.sangamgroup.com
Sangam Lifestyle Ventures Limited ("SLVL") is a Wholly Owned Subsidiary ofthe Company. The revenue from operation of the Company has increased to र1295.61 Lakhsfrom र684.43 Lakhs in the last year.
CONSOLIDATED FINANCIAL STATEMENTS
The Audited Consolidated Financial Statements for the Financial Year ended 31stMarch 2019 based on the financial statements received from Subsidiaries as approved bytheir respective Board of Directors have been prepared in accordance with relevant IndianAccounting Standards issued by the Institute of Chartered Accountants of India and formsan integral part of this Annual Report.
INVESTOR EDUCATION AND PROTECTION FUND ("IEPF")
In accordance with the provisions of Sections 124 125 and other applicable provisionsif any of the Act read with the IEPF Authority (Accounting Audit Transfer and Refund)Rules 2016 (hereinafter referred to as "IEPF Rules") (including any statutorymodification(s) or re- enactment(s) thereof for the time being in force) the amount ofdividend remaining unclaimed or unpaid for a period of seven years from the date oftransfer to the Unpaid dividend account is required to be transferred to the IEPFmaintained by the Central Government. In pursuance of this the dividend remainingunclaimed or unpaid in respect of dividend declared for the financial year ended 31stMarch 2011 have been transferred to the IEPF. The details of the unclaimed dividends sotransferred are available on the Company's website http://sangamgroup . com/investors/investor handbook/unclaimed-dividend.
In accordance with Section 124(6) of the Act read with the IEPF Rules all the sharesin respect of which dividend has remained unclaimed or unpaid for seven consecutive yearsor more are required to be transferred to the demat Account of the IEPF Authority.Accordingly shares were transferred in the name of Investor Education and Protection Fundin respect of the dividend remaining unpaid for seven consecutive years from the FinancialYear 2010-11. The Company sent notices to all such members in this regard and published anewspaper advertisement and thereafter transferred the shares to the IEPF during financialyear 2018-19. The details of such shares transferred have been uploaded at the Company'swebsite http://www . sangamgroup.com/investors/investor handbook
The shares and unclaimed dividend transferred to the IEPF can however be claimed backby the concerned shareholders from IEPF Authority after complying with the procedureprescribed under the IEPF Rules.
During the year under review the Company has neither invited nor accepted any fixeddeposits from the general public within the meaning of Section 73 to 76 of the Act andrules made thereunder.
DIRECTOR AND KEY MANAGERIAL PERSONNEL
During the year under review on recommendation of Nomination and RemunerationCommittee and in accordance with provisions of Section 196 197 198 and 203 of the Actconsent of the members were taken for re-appointment of Shri R.P. Soni as Whole TimeDirector designated as Chairman of the Company for a period of 3 years with effect from 1stSeptember 2018.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Act and Regulation 16 (1)(b) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
In terms of the provisions of the Act Shri R.P. Soni Chairman of the Company is liableto retire by rotation and being eligible offers himself for re-appointment at the ensuingAnnual General Meeting. The Board recommends his reappointment for the consideration ofthe Members of the Company at the ensuing Annual General Meeting.
In accordance with provisions of the Act and in terms of Articles of Association of theCompany Shri S.N. Modani Managing Director of the Company is proposed to be re-appointedfor a period of three years effective from 1st October 2019 at the ensuing 33rdAnnual General Meeting on the recommendation of the board of directors of the company.
In accordance with provisions of Section 149 150 152 of the Act and in terms ofArticles of Association of the Company Shri Achintya Karati Shri Tapan KumarMukhopadhyay Shri Ramawatar Jaju and Ms. Seema Srivastava Independent Directors of theCompany are proposed to be re-appointed for second term up to five consecutive year at theensuing 33rd Annual General Meeting of the Company.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel("KMP") of your Company are Shri R.P. Soni Chairman Shri S.N. Modani ManagingDirector & CEO Shri V.K. Sodani Executive Director Shri Anil Jain Chief FinancialOfficer and Shri A.K. Jain Company Secretary.
Shri A.K.Jain has been appointed as Company Secretary and Compliance Officer in placeof Shri Anil Jain at the Board Meeting held on 28th May 2019 with effect from1st June 2019. Shri Anil Jain will continue as Chief Financial Officer of theCompany.
BOARD OF DIRECTORS AND MEETINGS
The members of the Company's Board of Directors are eminent persons of provencompetence and integrity. Besides experience strong financial acumen strategicastuteness and leadership qualities they have a significant degree of commitment towardsthe Company and devote adequate time to the meetings and preparation.
The Board meets at regular intervals to discuss and decide on Company business policyand strategy apart from other Board business. The Board exhibits strong operationaloversight with regular presentations in every quarterly meetings. The Board /committeemeetings are pre-scheduled and a tentative annual calendar of the Board and Committeemeetings is circulated to the Directors well in advance to help them plan their scheduleand ensure meaningful participation in the meetings.
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board meetings and General Meetings.
Four meeting of the Board were held during the year. The detail of meetings of theBoard held during the year forms part of the Corporate Governance Report.
The Composition of the Board and its committees has also been given in the report onCorporate Governance.
The Audit Committee was constituted by our Board in accordance with Section 177 of theAct and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 i.e. Listing Regulations. The composition quorum terms of referencefunctions powers roles and scope are in accordance with Section 177 of the Act and theprovisions of Regulation 18 of the Listing Regulations 2015. All the members of thecommittee are financially literate and Shri Achintya Karati Chairman of the Committee isan Independent Director and possesses financial expertise.
The details regarding composition terms of references powers functions scopemeetings and attendance of members are included in Corporate Governance Report which formspart of the Annual Report.
PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of loans given investments made guarantees given and securities coveredunder section 186 of the Act form part of the notes to the financial statements providedin this Annual Report.
PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All transactions entered with Related Parties for the year under review were entered onarm's length basis and in the ordinary course of business and that the provisions ofSection 188(1) of the Act and the Rules made thereunder were not attracted.
The particulars of contracts or arrangements with related parties referred to inSection 188(1) is prepared in Form AOC-2 pursuant to Section 134(3)(h) of the Act and Rule8(2) of the Companies (Accounts) Rules 2014 and the same is annexed to the Board's Reportas Annexure II.
All Related Party Transactions are placed before the Audit Committee and the Board forapproval. The Company has a process in place to periodically review and monitor RelatedParty Transactions. Omnibus approval was obtained on a yearly basis for transactions whichare of repetitive nature. All the related party transactions were in the ordinary courseof business and at arm's length. There are no material subsidiary companies as define inRegulation 16(c) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
The policy on Related Party Transactions as approved by the Board is available on thewebsite of the Company's at weblink: http://www.sangamgroup.com/financials/Policies/RPT%20Policy.pdf
Your Directors draw attention of the members to Note no. 37 to the standalone financialstatement which sets out related party disclosures.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES
The Policy of the Company on remuneration of Directors KMPs and other employeesincluding criteria for determining qualifications positive attributes independence of aDirector and other matters provided under sub-section (3) of section 178 is available onthe Company's website at the http://www.sangamgroup .com/financials/Policies/Remuneration%20Policy.pdf
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANYOCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATEAND THE DATE OF THIS REPORT
There are no material changes or commitments affecting the financial position orbusiness activities of the Company between the end of the Financial Year and the date ofthis Board's Report.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company conducts familiarization programme for all independent directors at thetime of their appointment and also at regular intervals to enlighten the directorsregarding their roles rights and responsibilities in the Company and the nature of theindustry in which the Company operates the business model of the Company etc. The detailsof such familiarization programme imparted to Independent Directors are posted on thewebsite of the Company at the weblink: http://www.sangamgroup.com/financials/Policies/FP%20Policy.pdf
CORPORATE SOCIAL RESPONSIBILITY ("CSR")
The Company is committed to and fully aware of its CSR the guidelines in respect ofwhich were more clearly laid down in the Act. The Company's vision on CSR is that theCompany being a responsible Corporate Citizen would continue to make a serious endeavorfor a quality value addition and constructive contribution in building a healthy andbetter society through its CSR related initiatives and focus on education environmenthealth care and other social causes.
The CSR Committee has been constituted as required under the provisions of section 135of the Act. The details regarding composition objectives powers functions scopemeetings and attendance of members are included in Corporate Governance Report which formspart of the Annual Report.
During the financial year 2018-19 the Company has spent र180.74 Lakhs on CSRactivities of the Company related to current year/previous year. Report on CorporateSocial Responsibility as per Rule 8 of Companies (Corporate Social Responsibility Policy)Rules 2014 is prepared and the same is annexed to the Board's Report as Annexure
III. As per Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules2014 the CSR Policy is available on the website of the Company at weblink:http://www.sangamgroup.com/financials/Policies/ CSR%20Policy.
EVALUATION OF PERFORMANCE OF BOARD ITS COMMITTEES AND OF DIRECTORS
Your Board of Directors during the financial year under review carried out annualevaluation of its own performance as well as its Committees and also of the individualDirectors in the manner as enumerated in the Nomination and Remuneration Policy inaccordance with the provisions of Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
INTERNAL FINANCIAL CONTROL
The Company has designed and implemented a process driven framework for InternalFinancial Controls ("IFC") within the meaning of the explanation to Section134(5) (e) of the Act read with Rule 8(5)(viii) of the Companies (Accounts) Rules 2014.The Board is of the opinion that the Company has sound Internal Financial Controlcommensurate with the nature and size of its business operations and operating effectivelyand no material weakness exists. The Company has a process in place to continuouslymonitor the same and identify gaps if any and implement new and/or improved controlswherever the effect of such gaps would have a material effect on the Company's operations.
The Board of Directors of the Company have adopted various policies like Policy onMateriality of and Dealing with Related Party Transactions Whistle Blower Policy andVigil Mechanism Policy to determine Material Subsidiaries and such other procedures forensuring the orderly and efficient conduct of its business for safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information. TheAudit Committee of the Board of Directors actively reviews the adequacy and effectivenessof the internal control system and suggests improvements to strengthen the same.
A Report on the Internal Financial Controls under Clause (i) of sub-section 3 ofSection 143 of the Act is annexed to Independent Auditor's Report on Standalone FinancialStatements and to Independent Auditors Report on Consolidated Financial Statements.
Audit Committee evaluated the Risk Management Policy of the Company to make it morefocused in identifying and prioritizing the risks role of various executives in monitoringand mitigation of risk and reporting process. The Risk Management Policy has been reviewedand found adequate to the requirements of the Company by the Board.
The Audit Committee evaluated various risks and that there is no element of riskidentified that may threaten the existence of the Company.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Vigil Mechanism Policy aims for conducting the affairs of the company in a fair andtransparent manner by adopting highest standards of professionalism honesty integrityand ethical behavior. All permanent employees of the Company are covered under the VigilMechanism 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. The Vigil Mechanism
Policy has been placed on the website of the Company at thehttp://www.sangamgroup.com/financials/Policies/ Whistle%20Blower%20Policy.pdf
During the year under review no whistle blower event has been reported and none of theemployee was denied access to the Audit Committee.
Your Company is committed to maintain the highest standards of Corporate Governance andadheres to the stipulations set out in the Listing Regulation and have implemented all theprescribed requirements.
A Corporate Governance Report and Certificate from practicing company secretariesconfirming compliance of conditions as required by Regulation 34(3) read with Part EofSchedule V of the Listing Regulations form part of this Board's Report.
CODE OF CONDUCT
A declaration signed by the Managing Director in regard to compliance with the Code ofConduct by the Board Members and Senior Management personnel also forms part of theAnnual Report.
In accordance with the provisions of Section 139 142 and other applicable provisionsif any of the Act read with the Companies (Audit & Auditors) Rules 2014 M/s.Rajendra & Co. Chartered Accountants (FRN: 108355W) and M/s O.P. Dad & Co.Chartered Accountants (FRN: 002330C) were appointed as the Statutory Auditors of theCompany for a period of five years to hold office from the conclusion of the 31stAnnual General Meeting of the Company held on 29th September 2017 till theconclusion of the 36th Annual General Meeting to be held in the year 2022. Pursuant to therecent amendment to Section 139 of the Act effective 7th May 2018ratification by Shareholders every year for the appointment of the Statutory Auditors isno longer required and accordingly the Notice of ensuing Annual General Meeting does notinclude the proposal for seeking Shareholders approval for ratification of StatutoryAuditors appointment.
As required under the provisions of Section 139 of the Act the company has obtained awritten certificate from the above mentioned Auditor to the effect that they conform withthe limits specified in the said Section and they had also given their eligibilitycertificate stating that they are not disqualified within the meaning of Section 141 ofAct.
As regards Auditors observations the relevant notes on account are self-explanatoryand therefore do not call for any further comments.
With regard to Auditors observation in the last para under the head "OtherInformation" in their Independent Auditor's Report on the Audit of StandaloneFinancial Statement we would like to state that subsequently the Auditors have verifiedthe other information as on the date of AGM notice and stated that there is noinconsistency noticed in the same with the standalone financial statements.
The Auditors' Report does not contain any qualification reservation or adverse remark.
Pursuant to the provisions of Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time your Company has beencarrying out audit of Cost Records every year. The Board of Directors on therecommendation of Audit Committee has appointed M/s K.G. Goyal & Company CostAccountants Jaipur (Firm Registration No. 000017) Cost Auditors of the Company forconducting the Cost Audit of the Company for the Financial Year 2019-20. As required underthe Act a resolution seeking members' approval for the remuneration payable to the CostAuditor forms part of the Notice convening the 33rd Annual General Meeting ofthe Company.
The Cost Audit Report for the Financial Year 2018-19 does not contain anyqualification reservation or adverse remark.
The Cost accounts and records as required to be maintained under Section 148 (1) of Actare duly made and maintained by the Company.
SECRETARIAL AUDITOR REPORT
The Secretarial Audit Report for the financial year 2018-19 received from M/s V.M.Associates Company Secretaries in Practice (Firm Registration No. P1984RJ039200) JaipurSecretarial Auditors of the company in form MR-3 does not contain any qualificationreservation or adverse remark. The Report of the Secretarial Audit for the year ended 31stMarch 2019 is annexed herewith and forming part of the Board's report as Annexure-IV.
DISCLOSURE UNDER THE OF SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed thereunder. Internal Complaints Committee(ICC) has been set up to redress complaints received regarding sexual harassment. Duringthe Financial Year ended 31st March 2019 no complaint was pending at thebeginning of the year and no Complaints pertaining to Sexual Harassment was received.
PARTICULARS OF REMUNERATION OF DIRECTORS/ KMP/ EMPLOYEES
Disclosures under section 197(12) of the Act read with Rule 5(1) and 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 respectivelyis annexed to the Board's report as Annexure -V.
PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
Energy conservation continues to be an area of major emphasis in our Company. Effortsare made to optimize the energy cost while carrying out the manufacturing operations. Theinformation relating to energy technology absorption and foreign exchange earnings andoutgo required to be disclosed under section 134(3)(m) of the Act read with Companies(Accounts) Rules 2014 is given in Annexure VI to the Board's Report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
a) Issue of equity shares with differential rights as to dividend voting or otherwise.
b) Issue of shares (including sweat equity shares) to employees of the Company underany scheme.
c) Significant and material orders passed by the Regulators or Courts or Tribunalsimpacting the going concern status and Company's operations in future.
d) No fraud was reported by the Auditors to the Audit Committee or Board.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under clause (c) of sub-section (3) of Section 134 of theAct with respect to the Directors' Responsibility Statement the Directors confirm that:
1. In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
2. They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31st March 2019 and of theprofit of the Company for the year ended on that date;
3. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
4. They have prepared the annual accounts of the Company for the year ended on 31stMarch 2019 on a going concern' basis.
5. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were generally operatingeffectively; and
6. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis for the year under review as stipulated underthe SEBI (LODR) Regulations 2015 is forming part of this Annual Report.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 134(3)(a) of the Act read with Rule 12(1) of the Companies(Management and Administration) Rules 2014 the extract of annual return in Form MGT-9 ason 31st March 2019 is annexed herewith and forming part of the Board's Reportas Annexure-VII.
The Company is grateful to its customers shareholders suppliers financialinstitutions bankers Central and State Governments for their constant support to theCompany. The Directors also place on record their deep appreciation of the contributionmade by employees at all levels the consistent growth of the Company was made possible bytheir hard work loyalty dedication coordination and support.
| ||For and on Behalf of the Board of Directors |
| ||For Sangam (India) Limited |
| ||R.P Soni |
|Place: Bhilwara ||Chairman |
|Date: 12th July 2019 ||(DIN 00401439) |