The Board of Directors' present the 32nd Annual Report of the Company together with theAudited Financial Statements of Accounts for the Financial Year ended 31st March 2018.
The Company 's financial performance for the year ended 31st March 2018 is summarizedbelow:
| || ||(Rs in Crores) |
|Particulars ||31st March 2018 ||31st March 2017 |
|Revenue from Operations ||1649.03 ||1630.67 |
|Profit before Tax & Depreciation ||89.70 ||135.53 |
|Depreciation ||77.05 ||72.58 |
|Profit before Tax ||12.65 ||62.95 |
|Tax Expense || || |
|Current Tax ||- ||6.85 |
|Deferred Tax ||7.04 ||9.06 |
|Tax Expense for Earlier Years ||(24.84) ||(7.80) |
|Profit after Tax ||30.45 ||54.84 |
INDIAN ACCOUNTING STANDARDS (IND AS)
The Ministry of Corporate Affairs vide its notification in the Official Gazette dated16th February 2015 notified the Indian Accounting Standard ("Ind AS")applicable to certain classes of Companies. Ind AS has replaced the existing Indian GAAPprescribed under Section133 of the Companies Act 2013 read with Companies (Accounts)Rules 2014. Ind AS is applicable on the Company from 1st April 2017 with a transitiondate of 1st April 2016. The reconciliations and descriptions of the effect of thetransition from previous GAAP to Ind AS have been set out in the notes to accounts in thestandalone financial statement and in the notes to accounts in the consolidated financialstatement.
OPERATIONAL RESULTS AND STATE OF AFFAIRS
The Company Revenue from Operations during 2017-18 is Rs 1649 Crores as againstRs 1631 Crores during 2016-17.
The profit before interest depreciation and tax (PBIDT) is Rs 153 Crores during2017-18 as against Rs 199 Crores in previous year. The profit after tax of theCompany is Rs 30 Crores in the current year as against Rs 55 Crores inprevious year.
During the year the Company had export revenue of Rs 441 Crores as against Rs424 Crores in previous year. The exports constituted about 27% of the total revenue of theCompany.
The Company's project of Rs 135 Crores taken in hand in the previous year forinstallation of one Rope Indigo Dyeing Line with 73 new wide width imported WeavingMachines Machinery for modernization and balancing in spinning and processing divisionsand pollution control equipment. 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.
In view of the satisfactory performance your directors are pleased to recommend foryour approval dividend @10% on 39421559 equity shares of Rs 10/- each (Rs1.00 per Equity Share) for the financial year 2017-18 aggregating to Rs 3.94 Croreswhich is subject to approval at the forthcoming Annual General Meeting. The Company wouldalso pay dividend distribution tax on distributed dividend.
WHOLLY OWNED SUBSIDIARY COMPANY
Sangam Lifestyle Ventures Limited ("SLVL") is a Wholly Own Subsidiary of theCompany . The revenue from operation of the Company has increased to Rs 684.43Lakhs from Rs 84.26 Lakhs in the last year.
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 a statement containing salient features of the financialstatements of Subsidiaries/Associate Companies/Joint Ventures is given in Form AOC-1 andforming part of the report as Annexure-I.
CONSOLIDATED FINANCIAL STATEMENTS
In compliance with the applicable provisions of Companies Act 2013 including the IndAS 110 on Consolidated Financial Statements this Annual Report also includes ConsolidatedFinancial Statements for the financial year 2017-18.
INVESTOR EDUCATION AND PROTECTION FUND ("IEPF")
Pursuant to the provisions of Section 124 and 125 of the Companies Act 2013 read withIEPF Authority (Accounting Audit Transfer and Refund) Rules 2016 ("theRules") all unpaid or unclaimed dividends are required to be transferred by theCompany to the IEPF established by the Central Government after the completion of sevenyears from the date of completion. The shareholders whose dividends have been transferredto the IEPF Authority can claim their dividend from the Authority. The unclaimed or unpaiddividend relating to the financial year 2010-11 is due for remittance on 06th November2018 to the Investor Education and Protection Fund established by the Central Government.
Further according to the Rules the shares in respect of which dividend has not beenpaid or claimed by the shareholders for seven consecutive years or more shall also betransferred to the IEPF Authority. In accordance with new Rules the Company sent noticeto all shareholders whose shares are due to be transferred to the IEPF Authority andpublished requisite advertisement in the newspaper.
The Company has not accepted any deposits from the general public within the meaning ofSection 73 to 76 of the Companies Act 2013 and rules 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 and 197 of the Companies Act2013 consent of the members were taken for re-appointment of Shri V.K. Sodani as WholeTime Director designated as Executive Director of the Company for a period of 5 years witheffective from 1st October 2017 to 30th September 2022.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16 (1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
In terms of the provisions of the Companies Act 2013 Shri V.K. Sodani Whole-timeDirector of the Company retires by rotation and being eligible offers himself forre-appointment at the ensuing Annual General Meeting. The Board recommends hisreappointment for the consideration of the Members of the Company at the ensuing AnnualGeneral Meeting.
In accordance with provisions of the Companies Act 2013 and in terms of Articles ofAssociation of the Company Shri R.P. Soni Whole Time Director designated as Chairman isproposed to re-appointed for a period of 3 years with effective from 1st September 2018at the ensuing 32nd AGM.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel("KMP") of your company are Shri R.P. Soni Chairman & Whole Time DirectorShri S.N. Modani Managing Director & CEO Shri V.K. Sodani Whole Time Director andShri Anil Jain CFO & Company Secretary. There has been no change in KMP's during theyear.
NUMBER OF MEETINGS OF THE BOARD
Five 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 consists of Shri Achintya Karati Independent Director Shri T.K.Mukhopadhyay Independent Director and Shri R.P. Soni Executive Director. Shri AchintyaKarati is the Chairman of the Committee and Mr. Anil Jain is the Secretary of theCommittee. All the recommendations made by the Audit Committee were accepted by the Board.
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 Companies Act 2013 form part of the notes to the financialstatements provided in this Annual Report.
PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with promoters Directors keymanagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large .All Related Party Transactions are placed before theAudit Committee as also the Board for approval. There are no material subsidiary companiesas define in Regulation 16(c) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
The policy on Related Party Transactions as approved by the Board is available on thewebsite of the Companys at weblink: http://www.sangamgroup.com/financials/Policies/RPT%20Policy.pdf.
Particulars of Related Parties contracts or arrangements under section 188 of theCompanies Act 2013 are given in Form AOC-2 and forming part of the report as Annexure-II.
Your Directors draw attention of the members to Note no.40 to the financial statementwhich 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 THIS FINANCIAL STATEMENTS RELATEAND THE DATE OF THE 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 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 policyof the familiarization programme are put up on the website of the Company at theweblink:http:// www.sangamgroup.com/financials/Policies/FP%20 Policy.pdf.
CORPORATE SOCIAL RESPONSIBILITY (CSR'')
Your Company is committed to and fully aware of its CSR the guidelines in respect ofwhich were more clearly laid down in the Companies Act 2013. The Company 's vision on CSRis that the Company being a responsible Corporate Citizen would continue to make a seriousendeavor for a quality value addition and constructive contribution in building a healthyand better society through its CSR related initiatives and focus on educationenvironment health care and other social causes The Corporate Social ResponsibilityCommittee comprises Shri R.P. Soni Shri S.N. Modani and Shri Ramawatar Jaju. Shri R.P.Soni is chairman of the Committee.
The Company has identified following focus areas for CSR:
Eradicating hunger poverty and malnutrition
Promoting Health care including Preventive Health care
Ensuring environmental sustainability and ecological balance through
Employment and livelihood enhancing vocational skills and projects
Promotion of education especially among children womenelderly and thedifferently abled
Promoting gender equality and empowering women
Contribution or funds provided to technology incubators located within academicinstitutions
Rural Development Projects
During the financial year 2017-18 your Company has spent Rs 136.65 Lakhstowards CSR activities. The details of the CSR spend by the Company is annexed as AnnexureIII forming part of this report. The CSR Policy may be accessed on the website of theCompany's at web link:http://www.sangamgroup.com/financials/Policies/ CSR%20Policy.pdf.
EVALUATION OF PERFORMANCE OF BOARD ITS COMMITTEES AND OF DIRECTORS
TheBoardofDirectorshascarriedoutanannualevaluation of its own performance boardcommittees and individual directors pursuant to the provisions of the Companies Act 2013and the corporate governance requirements as prescribed by the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015.
The performance of the Board as a whole Committees and individual Directors wasevaluated by seeking inputs from all Directors based on certain parameters such as: Degreeof fulfilment of key responsibilities; Board structure and composition; Establishment anddelineation of responsibilities to various Committees; Effectiveness of Board processesinformation and functioning; Board culture and dynamics and Quality of relationshipbetween the Board and the Management.
The Directors also made a self-assessment of certain parameters - AttendanceContribution at Meetings and guidance/support extended to the Management. The feedbackreceived from the Directors was discussed and reviewed by the Independent Directors attheir annual separate Meeting. At the separate Meeting of Independent Directorsperformance of Non-independent directors including Chairman Board as a whole wasdiscussed. The performance of the individual Directors including Independent Directorsperformance and role of the Board/Committees was also discussed at the Board Meeting.
INTERNAL FINANCIAL CONTROL
Your Company has an effective internal control and risk mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany s internal control system is commensurate with its size scale andcomplexities of its operations. The Directors inform the members that in pursuit ofstrengthening internal control systems your Company has put in place a system whereby allareas of the operations of the Company are reviewed by the internal as well as externalprofessionals and independent audit fi rms. Your Company takes adequate measures withrespect to gaps if any reported. The Audit Committee of your Company regularly monitorsthe annual operating plans risk assessment and minimisation procedures as well asmitigation plans. Your Directors endeavour to continuously improve and monitor theinternal control systems.
A Report on the Internal Financial Controls under Clause (i) of sub-section 3 ofSection 143 of the Companies Act 2013 is annexed to Independent Auditor's Report onStandalone Financial Statements and to Independent Auditors Report on ConsolidatedFinancial 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 Board of Directors has adopted Whistle Blower Policy/Vigil Mechanism. The WhistleBlower Policy/Vigil
Mechanism aims for conducting the affairs in a fair and transparent manner by adoptinghighest standards of professionalism honesty integrity and ethical behaviour. Amechanism has been established for employees to report concerns about unethical behaviouractual or suspected fraud or violation of Code of Conduct and Ethics. It also provides foradequate safeguards against the victimization of employees who avail of the mechanism andallows direct access to the chairperson of the audit committee in exceptional cases. TheVigil Mechanism Policy has been posted on the website of the Company.http://www.sangamgroup.com/financials/ Policies/Whistle%20Blower%20Policy.pdf.
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 Auditors' Certificate regarding compliance ofconditions of Corporate Governance form part of the Annual Report. A declaration signed bythe Managing Director in regard to compliance with the Code of Conduct by the BoardMembers and Senior Management personnel also forms part of the Annual Report.
In accordance of the provisions of Section 139 142 and other applicable provisions ifany of the Companies Act 2013 read with Companies (Audit & Auditors) Rules 2014M/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 31st AnnualGeneral Meeting of the Company held on 29th September 2017 till the conclusion of the36th Annual General Meeting to be held in the year 2022 (subject to ratification of theirappointment by the members at every Annual General Meeting held after this Annual GeneralMeeting). In accordance with the provisions of Companies (Amendment) Act 2017 notifiedw.e.f. 7th May 2018 by the Ministry of Corporate Affairs the appointment of StatutoryAuditor is not required to be ratified at every AGM. As required under the provisions ofSection 139 of the Companies Act 2013 the company has obtained a written certificatefrom the above mentioned Auditor to the effect that they conform with the limits specifiedin the said Section and they had also given their eligibility certificate stating thatthey are not disqualified within the meaning of Section 141 of Companies Act 2013.
As regards Auditors observations the relevant notes on account are self-explanatoryand therefore do not call for any further comments.
The Auditors' Report does not contain any qualification reservation or adverse remark.
Pursuant to the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 as amended from time to time your Companyhas been carrying 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 2018-19. As required underthe Companies Act 2013 a resolution seeking members' approval for the remunerationpayable to the Cost Auditor forms part of the Notice convening the Annual General Meetingfor their ratification.
The Cost Audit Report for the Financial Year 2017-18 does not contain anyqualification reservation or adverse remark. The Company has obtained Cost Audit Reportfor the year 2017-18 and is in process to file the same with the Central Government.
The Secretarial Audit Report for the fi nancial year 2017-18 received from M/s S.P.Jethlia & Co. Practicing Company Secretary Bhilwara Secretarial Auditors of theCompany in form MR-3 does not contain any qualifi cation reservation or adverseremark. The Report of the Secretarial Audit for the year ended 31st March 2018 is annexedherewith and forming part of the report as Annexure-IV.
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors has appointed toM/s V.M. & Associates Company Secretaries in Practice (Firm Registration No.P1984RJ039200) as Secretarial Auditor of the Company for the financial year 2018-19.
PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE
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 2018 the Company has not received any Complaintspertaining to Sexual Harassment.
PARTICULARS OF REMUNERATION OF DIRECTORS/ KMP/EMPLOYEES
Disclosure pertaining to remuneration and other details as required Under Section197(12) of the Companies Act 2013 and Rule 5(1) & 5(2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 is attached 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 Companies Act 2013 readwith Companies (Accounts) Rules 2014 is given in Annexure VI to this 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 or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability 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 2018 and of the profit ofthe 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 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 2018 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 as stipulated under the Listing Regulations ispresented in a separate section forming part of this Annual Report.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 134(3)(a) of the Companies Act 2013 read with Rule 12(1) of theCompanies (Management and
Administration) Rules 2014 the extract of annual return is annexed herewith andforming part of the report as 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 |
|Place: Bhilwara ||R.P Soni |
|Date: 9th August 2018 ||Chairman |
| ||(DIN 00401439) |