To the Members
Your Directors are pleased to present the 35th Annual Report on theaffairs of the Company along with the Audited Standalone and Consolidated FinancialStatements for the financial year ended 31st March 2021.
The audited financial statements (standalone and consolidated) preparedby the Company in accordance with the Indian Accounting Standards [Ind AS] are providedin the Annual Report of the Company. The highlights of the Company's financialperformance for the year ended 31st March 2021 are as follows:
(Rs. in Crores)
|Particulars ||Standalone ||Consolidated |
| ||Current Year ||Previous Year ||Current Year ||Previous Year |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Revenue from Operations ||1353.55 ||1782.97 ||1358.97 ||1790.11 |
|Profit before Tax & Depreciation ||83.95 ||101.17 ||82.56 ||101.19 |
|Depreciation ||80.52 ||81.00 ||80.58 ||81.05 |
|Profit before Tax ||3.43 ||20.17 ||1.98 ||20.14 |
|Tax Expense || || || || |
|Current Tax ||7.24 ||12.32 ||7.24 ||12.32 |
|Deferred Tax ||(2.72) ||(4.30) ||(3.00) ||(4.31) |
|Tax Expense for Earlier Years ||(6.47) ||(1.15) ||(6.47) ||(1.15) |
|Profit for the year ||5.38 ||13.30 ||4.21 ||13.28 |
OPERATIONAL RESULTS AND STATE OF AFFAIRS Standalone
The Company's Revenue from Operations during 2020- 21 is '1353.55 Crores as against ' 1782.97 Crores during previous year.
The profit before depreciation and tax (PBDT) is ' 83.95 Croresduring 2020-21 as against ' 101.17 Crores in previous year. The profit after tax ofthe Company is ' 5.38 Crores in the current year as against ' 13.30 Croresin previous year.
The Company's Revenue from Operations during 2020- 21 is '1358.97 Crores as against ' 1790.11 Crores during previous year.
The Profit before depreciation and tax (PBDT) is ' 82.56 Croresduring 2020-21 as against ' 101.19 Crores in previous year. The Profit after tax ofthe Company is ' 4.21 Crores in the current year as against ' 13.28 Croresin previous year.
During the year the Company's had export revenue of '422.90 Crores as against ' 469.80 Crores in previous year. The exports constitutedabout 31% of the total revenue of the Company.
The outbreak of the deadly COVID-19 virus and the ensuing Sangam(India) Limited lockdown imposed across the country affected business operations. Thehealth of the employees and workers became a priority; stoppage of operations for anuncertain period resulted in a large financial burden on the one hand and workforce idlingon the other hand. We are facing unprecedented challenges due to COVID-19 pandemic. Thelockdown gave India time to make a concerted effort to flatten the outbreak curve.However towards later part of the year consequent to significant opening of the economicactivity across the nation the demand picked up compared to that during the first phase ofCovid-19 pandemic.
India is experiencing a massive second wave of Covid-19 infections.However we feel no major slow down in businesses and changes in the economic activitiesas the nation was better prepared to face the pandemic with partial lockdown vaccines andwell equipped health care infrastructures & testing facilities.
Moody's Investors Services said the escalating second wave ofcorona virus infections in India present a risk to its growth forecast of 13.7% for FY22as the re-imposition of virus management measures will curb economic activity and coulddampen market and consumer sentiment.
"The announced countermeasures to combat the second wave - some ofwhich are due to remain in place at least until the end of June - risk weakening theeconomic recovery. However the targeted nature of containment measures and rapid progresson vaccinating the population will mitigate the credit-negative impact" it added..
TRANSFER TO RESERVE
The Board of Directors of the Company has not proposed to transfer anyamount to General Reserve of the Company during the period under review.
The Board of Directors is pleased to recommend a dividend of '1.00 per Equity Share of the face value of ' 10/- each (@10%) for the FinancialYear 2020-21 aggregating to ' 4.34 Crores for the approval of the shareholders atthe ensuing Annual General Meeting.
The paid-up share capital of your company increased by ' 400Lakhs to ' 4342.15 Lakhs during the year under review. The Board of Director of theCompany has allotted 40 Lakhs Equity Shares of ' 10/- face value each fully paid upat a price of ' 50/- (Share Premium at the rate of ' 40/- per share) to thePromoter(s) of the Company on preferential basis on 30th December 2020. These shares havebeen listed with NSE & BSE and under Lock-in period of three years.
WHOLLY OWNED SUBSIDIARY COMPANY
The company has one wholly owned subsidiary viz. Sangam LifestyleVentures Limited.
The Statement containing salient features of the financial statement ofSubsidiaries/Associate Companies/Joint Ventures (Pursuant to first proviso to sub-section(3) of section 129 read with rule 5 of Companies (Accounts) Rules 2014) is annexed as Annexure1.
In terms of Section 129(3) of the Companies Act 2013 the ConsolidatedFinancial Statements of the company and its subsidiary prepared in accordance with Ind AS110 and 111 as specified in the Companies (Indian Accounting Standards) Rules 2015forming part of the Annual Report. In accordance with Section 136 of the Companies Act2013 the Audited Financial Statements and related information of the company and itssubsidiary wherever applicable are available on the company's website:www.sangamgroup.com. These are also available for inspection during regular business hoursat our registered office in Bhilwara India.
The Company has adopted the policy for determining materialsubsidiaries in term of Regulation 16(1)(c) of SEBI (LODR) Regulations as amended fromtime to time and may be accessed on the company's website www.sangamgroup.com TheBoard of Directors of the Sangam (India) Limited (SIL) and Sangam Lifestyle VenturesLimited (SLVL) have approved the Scheme of Amalgamation of SLVL with SIL on dated 14thSeptember 2020 and 12th September 2020 respectively appointed date being 1st April2020. As per order dated 1st April 2021 the Hon'ble National Company Law Tribunal("NCLT") Jaipur Bench the NCLT Convened Meeting of the Equity ShareholdersSecured Creditors and Unsecured Creditors of Sangam (India) Limited are scheduled to beheld on Saturday the 22nd May 2021 through Video Conferencing ("VC") / OtherAudio Visual Means ("OAVM") to approve the scheme of Amalgamation. Accountingeffect of the merger will be given once Scheme is approved by the NCLT.
Sangam Lifestyle Ventures Limited ("SLVL") is a Wholly OwnedSubsidiary of the Company. The revenue from operation of the Company is ' 1046Lakhs during the year under review.
CONSOLIDATED FINANCIAL STATEMENTS
The Audited Consolidated Financial Statements for the Financial Yearended 31st March 2021 based on the financial statements received from Subsidiary companyas approved by its Board of Directors have been prepared in accordance with relevantIndian Accounting Standards issued by the Institute of Chartered Accountants of India andforms an integral part of this Annual Report.
UNCLAIMED DIVIDEND AND SHARES
In accordance with the provisions of Sections 124 125 and otherapplicable provisions if any of the Companies Act 2013 read with the IEPF Authority(Accounting Audit Transfer and Refund) Rules 2016 (hereinafter referred to as"IEPF Rules") (including any statutory modification(s) or re-enactment(s)thereof for the time being in force) the amount of dividend remaining unclaimed or unpaidfor a period of seven years from the date of transfer to the Un-paid dividend account isrequired to be transferred to the IEPF maintained by the Central Government. In pursuanceof this the dividend remaining unclaimed or unpaid in respect of dividend declared forthe financial year ended 31st March 2013 have been transferred to the IEPF. The detailsof the unclaimed dividends so transferred are available on the Company's websitehttps://www.sangamgroup.com/investorhandbook.php In accordance with Section 124(6) of theCompanies Act 2013 read with the IEPF Rules all the shares in respect of which dividendhas remained unclaimed or unpaid for seven consecutive years or more are required to betransferred to the demat Account of the IEPF Authority. Accordingly shares weretransferred in the name of Investor Education and Protection Fund in respect of thedividend remaining unpaid for seven consecutive years from the Financial Year 2012-13. TheCompany had sent notices to all such members in this regard and published a newspaperadvertisement and thereafter transferred the shares to the IEPF during financial year2020-21. The details of such shares transferred have been uploaded in the Company'swebsite https://www.sangamgroup.com/ investorhandbook.php
The shares and unclaimed dividend transferred to the IEPF can beclaimed by the concerned shareholders from IEPF Authority after complying with theprocedure prescribed under the IEPF Rules.
During the year under review the Company has neither invited noraccepted any fixed deposits within the meaning of Section 73 to 76 of the Companies Act2013 and rules made thereunder.
PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN ANDSECURITIES PROVIDED
Particulars of loans given investments made guarantees given andsecurities covered under section 186 of the Companies Act 2013 form part of the notes tothe Standalone Financial Statements of the company.
PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All transactions entered with Related Parties during the year underreview were on arm's length basis and in the ordinary course of business and that theprovisions of Section 188(1) of the Companies Act 2013 and the Rules made there underwere not attracted.
The Particulars of contracts or arrangements with related partiesreferred to in Section 188(1) of the Companies Act 2013 in the prescribed Form AOC-2 isannexed to the Board's Report as Annexure II.
All Related Party Transactions entered into during the financial yearwere placed before the Audit Committee and the Board of Directors for approval. TheCompany has a process in place to periodically review and monitor Related PartyTransactions. Omnibus approval was obtained on a yearly basis for transactions which wereof repetitive nature. All the related party transactions were in the ordinary course ofbusiness and at arm's length basis. There were no material subsidiary companies asdefine in Regulation 16(c) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
The policy on Related Party Transactions as approved by the Board isavailable on the website of the Company's at weblink:https://www.sangamgroup.com/financials/ Policies/RPT%20Policy.pdf
The Related party transactions entered during the financial year underreview are disclosed in Notes no. 37 to the financial statements of the Company for thefinancial year ended 31st March 2021.
DIRECTOR AND KEY MANAGERIAL PERSONNEL
In terms of the provisions of the Companies Act 2013 Shri V.K.Sodani Executive Director of the Company is liable to retire by rotation and beingeligible offers himself for re- appointment at the ensuing Annual General Meeting. TheNomination and Remuneration Committee and the Board recommend his reappointment for theconsideration of the Members of the Company at the ensuing Annual General Meeting.
Shri Anurag Soni was appointed as Additional Director designated asWhole Time Director of the Company w.e.f. 21st January 2021 of the Company for a term of3 years subject to approval of the shareholders. He is also associated with Company in thecapacity as Chief Financial Officer of the Company w.e.f. 24th June 2020
Shri Yaduvendra Mathur has been appointed as Additional Director incategory of Non-Executive Independent Director of the Company w.e.f. 21st January 2021 tohold office for a term of 5 years subject to approval of the shareholders.
The Key Managerial Personnel ("KMP") of your Company are ShriR.P Soni Chairman Shri S.N. Modani Managing Director & CEO Shri V.K. SodaniExecutive Director Shri Anurag Soni CFO & Whole-time Director and Shri A.K. JainCompany Secretary.
All Independent Directors have given declarations that they meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16 (1)(b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and confirmation that they have complied with the Code of IndependentDirectors prescribed in the Schedule IV of the Companies Act 2013. The terms andconditions for the appointment of the Independent Directors are disclosed on the websiteof the company.
NOMINATION AND REMUNERATION POLICY OF THE COMPANY RELATING TODIRECTORS' APPOINTMENT PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
The Nomination and Remuneration Policy of the Company for DirectorsKMPs and other employees including criteria for determining qualifications positiveattributes independence of a Director remuneration and other matters provided undersub-section (3) of section 178 is available on the Company's website at thehttps://www.sangamgroup.com/financials/ Policies/Conditions.pdf
BOARD OF DIRECTORS AND MEETINGS
The members of the Company's Board of Directors are eminentpersons of proven competence and integrity. Besides experience strong financial acumenstrategic astuteness and leadership qualities they have a significant degree ofcommitment towards the Company and devote adequate time to the meetings and preparationfor attending the meetings. The Board /committee meetings are pre- scheduled and atentative annual calendar of the Board and Committee meetings is circulated to theDirectors well in advance to help them plan their schedule and ensure meaningfulparticipation in the meetings.
Five meeting of the Board were held during the year. The detail ofmeetings of the Board held during the year forms part of the Corporate Governance Report.
The Company recognizes and embraces the benefits of having a diverseBoard of Directors to enhance the quality of its performance. The Company considersincreasing diversity at Board level as an essential element in maintaining a competitiveadvantage in the complex business that it operates. The identified key skills / expertise/ competencies of the Board and mapping with individual director are provided in the'Corporate Governance Report' forms a part of this Report.
The Composition of the Board and its committee has also been given inthe report on Corporate Governance.
The Directors have devised proper systems and processes for complyingwith the requirements of applicable Secretarial Standards issued by the Institute ofCompany Secretaries of India ('ICSI') and that such systems were adequate andoperating effectively and the Company has complied with all applicable SecretarialStandards during the year under review.
The Audit Committee was constituted by our Board in accordance withSection 177 of the Companies Act 2013 and Regulation 18 of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 i.e. Listing Regulations. The compositionquorum terms of reference functions powers roles and scope are in accordance withSection 177 of the Companies Act 2013 and the provisions of Regulation 18 of the ListingRegulations 2015. All the members of the committee are financially literate and Mr.Achintya Karati Chairman of the Committee is an Independent Director and possessesfinancial expertise.
The details regarding composition terms of references powersfunctions scope meetings and attendance of members are included in Corporate GovernanceReport which forms part of the Annual Report.
MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITIONOF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR
TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THIS REPORT
There are no material changes or commitments affecting the financialposition or business activities of the Company between the end of the Financial Year andthe date of this Board's Report.
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company conducts familiarization programme for all independentdirectors at the time of their appointment and also at regular intervals to enlighten thedirectors regarding their roles rights and responsibilities in the Company and the natureof the industry in which the Company operates the business model of the Company etc. Thedetails of such familiarization programme imparted to Independent Directors are posted onthe website of the Company at the weblink: https://www.sangamgroup.com/financials/
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has constituted Corporate Social Responsibility (CSR)Committee in compliance with the provisions of Section 135 of the Companies Act 2013 readwith the Companies (Corporate Social Responsibility Policy) Rules 2014 as amended fromtime to time. 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 2020-21 the Company has spent '96.66 Lakhs on CSR activities of the Company related to current year/previous years. Thedisclosure with respect to CSR activities is annexed to the Board's Report asAnnexure III.
As per Rule 9 of the Companies (Corporate Social Responsibility Policy)Rules 2014 the CSR Policy is available on the website of the Company at weblink:https://www. sangamgroup.com/financials/Policies/CSR%20Policy.pdf
The Risk Management policy is formulated and implemented by the Companyin compliance with the provisions of the Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. The policy helps to identify the variouselements of risks faced by the Company which in the opinion of the Board threatens theexistence of the Company.
The Audit Committee evaluated various risks and that there is noelement of risk identified that may threaten the existence of the Company.
EVALUATION OF PERFORMANCE OF BOARD ITS COMMITTEES AND OF DIRECTORS
Your Board of Directors during the financial year under reviewcarried out annual evaluation of its own performance as well as its Committees and also ofthe individual Directors in the manner as enumerated in the Nomination and RemunerationPolicy in accordance with the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
INTERNAL FINANCIAL CONTROL
The Company has designed and implemented a process driven framework forInternal Financial Controls ("IFC") within the meaning of the explanation toSection 134(5)(e) of the Act read with Rule 8(5)(viii) of the Companies (Accounts) Rules2014. 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'soperations.
The Board of Directors of the Company have adopted various policieslike Policy on Materiality of and Dealing with Related Party Transactions Whistle BlowerPolicy and Vigil Mechanism Policy to determine Material Subsidiaries and such otherprocedures for ensuring the orderly and efficient conduct of its business for safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation. The Audit Committee of the Board of Directors actively reviews the adequacyand effectiveness of the internal control system and suggests improvements to strengthenthe same.
M/s. Rajendra & Co. Chartered Accountants (FRN: 108355W) and M/sO.P Dad & Co. Chartered Accountants (FRN: 002330C) the Statutory Auditors of theCompany audited the financial statements included in this Annual Report and issued areport on the internal controls over financial reporting (as defined in Section 143 of theCompanies Act 2013).
WHISTLE BLOWER POLICY / VIGIL MECHANISM
As per the provisions of Section 177(9) of the Companies Act 2013 theCompany has established an effective Vigil Mechanism for directors and employees to reportconcerns about unethical behaviour actual or suspected fraud or violation of Code ofConduct and Ethics. It also provides for adequate safeguards against the victimization ofemployees who avail of the mechanism and allows direct access to the Chairperson of theaudit committee in exceptional cases.
The Vigil Mechanism Policy has been placed on the website of theCompany at the https://www.sangamgroup.com/financials/Policies/Whistle%20Blower%20Policy.pdf
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report for the year ended 31st March 2021as stipulated under Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed which forms part of this Annual Report.
CORPORATE GOVERNANCE REPORT
Your Company is committed to maintain the highest standards ofCorporate Governance and adheres to the stipulations set out in the Listing Regulation andhave implemented all the prescribed requirements.
A Corporate Governance Report and Certificate from practicing companysecretaries confirming compliance of conditions as required by Regulation 34(3) read withPart E of Schedule 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 compliancewith the Code of Conduct by the Board Members and Senior Management personnel also formspart of the Annual Report.
In accordance with the provisions of Section 139 142 and otherapplicable provisions if any of the Companies Act 2013 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 theStatutory Auditors of the Company for a period of five years to hold office from theconclusion of the 31st Annual General Meeting of the Company held on 29th September 2017till the conclusion of the 36th Annual General Meeting to be held in the year 2022.Theyhave confirmed that they are not disqualified from continuing as auditors of the company.
As regards Auditors observations the relevant notes on account areself-explanatory and therefore do not call for any further comments.
The Auditors' Report does not contain any qualificationreservation or adverse remark.
Pursuant to the provisions of Section 148 of the Companies Act 2013read with the Companies (Cost Records and Audit) Rules 2014 as amended from time to timeyour Company has been carrying out audit of Cost Records every year. The Board afterconsidering the recommendations of its Audit Committee has appointed M/s K.G. Goyal &Company Cost Accountants Jaipur (Firm Registration No. 000017) as cost auditors for thefinancial year 2021-22 and appropriate resolutions in this connection has been included inthe notice calling the ensuing annual general meeting of the Company for ratificationpurpose.
The Cost accounts and records as required to be maintained underSection 148 (1) of the Companies Act 2013 are duly made and maintained by the Company.
SECRETARIAL AUDITOR REPORT
Pursuant to the provisions of Section 204 of the Companies Act 2013and rules made thereunder M/s. B K Sharma and Associates Company Secretaries wasappointed as Secretarial Auditors to conduct secretarial audit of the company for thefinancial year 2020-21. The Secretarial Audit Report for the financial year 2020-21 isattached as Annexure- IV. The observations in the report are self-explanatory andtherefore do not call for any further comments.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has always believed in providing a safe and harassment-freeworkplace for every individual working in the Company. The Company has complied with theapplicable provisions of the aforesaid Act and the Rules framed there under includingconstitution of the Internal Complaints Committee (ICC). The Company has in place anAnti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013. During the FinancialYear ended 31st March 2021 no complaint was pending at the beginning of the year.
PARTICULARS OF REMUNERATION OF DIRECTORS/ KMP/ EMPLOYEES
Statement showing disclosures pertaining to remuneration and otherdetails as required under Section 197(12) of the Companies Act 2013 read with Rule 5(1)and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is enclosed as Annexure-V.
PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE EARNINGS AND OUTGO
Information required under section 134(3)(m) of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014 is enclosed herewith asAnnexure-VI to the Board's Report.
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear 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;
d) No fraud was reported by the Auditors to the Audit Committee or Board;
e) The details of application made or any proceeding pending under the Insolvency andBankruptcy Code 2016 (31 of 2016) during the year along with their status as at the endof the financial year.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under clause (c) of sub-section (3) ofSection 134 of the Act with respect to the Directors' Responsibility Statement theDirectors 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 fair viewof the state of affairs of the Company as at 31st March 2021 and of the profit of theCompany 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 Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
4. They have prepared the annual accounts of the company for the year ended on 31stMarch 2021 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 theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis for the year under review asstipulated under the SEBI (Listing Obligation and Disclosure Requirement) Regulations2015 is being given separately and forms part of this Annual Report.
Pursuant to the provisions of Section 92(3) of the Act read withCompanies (Management & Administration) Rules 2014 the annual return in theprescribed form is available on the website of the Company at www.sangamgroup.com
Your Directors would like to express their sincere appreciation for theassistance and co-operation received from the financial institutions banks governmentauthorities customers vendors and members during the year under review. Your Directorsalso wish to place on record their deep sense of appreciation for the committed servicesby the Company's executives staff and workers.
The Directors deeply regret the loss of life caused due to the outbreakof COVID-19 and are grateful to every person who risked their life and safety to fightthis pandemic.