The Directors are please to present the 11th DirectorsReport of the Company the affairs of the Company together with the Audited FinancialStatements for the year ended on 31st March 2021.
FINANCIAL HIGHLIGHTS/PERFORMANCE OF THE COMPANY
The financial results for the year ended on 31st March 2021and the corresponding figures for the previous year are as under;
|Particulars ||Standalone ||Consolidated |
| ||Year ended 31st March 2021 ||Year ended 31st March 2020 ||Year ended 31st March 2021 ||Year ended 31st March 2020 |
|Net Revenue from Operations ||29508660 ||79878586 ||35289574 ||300807206 |
|Other Income ||1610475 ||4566224 ||2119194 ||5400282 |
|Total Income ||31119135 ||84444810 ||37408768 ||306207488 |
|Total Expenditure ||49678377 ||133163120 ||94916524 ||397246823 |
|Profit before tax (PBT) ||(18559242) ||(48718310) ||(57507756) ||(91039335) |
|Exceptional Items ||- ||(62147508) ||- ||- |
|Deferred Tax (Credit) ||- ||- ||- ||- |
|Current Tax ||- ||- ||- ||- |
|Proportionate Profit (Loss) of Associate Company ||- ||- ||- ||(134989) |
|Profit after Taxes (PAT) ||(18559242) ||(110865818) ||(57507756) ||(91174324) |
During the year under review your Company has achieved a consolidatedturnover of Rs. 35289574 which is lower as compared with the previous financial year.The PAT of the Company has lowered by 36.93% as compared with the previous financial year.Further the Company has earned a net loss of Rs. 57507756 in the financial year2020-2021.
The sales and profitability were marginally affected due to first andsecond wave of COVID-19 and lock down during the year under review.
To strengthen the financial position of the Company your Directors arenot recommending any dividend for the financial year under review.
The Balance in Reserves & Surplus stands at Rs. 12414131/- incomparison with the previous year balance of Rs. 30973373/-
4. SHARE CAPITAL
The Total Paid-up Capital of the Company as on 31st March2021 is Rs. 104158800 divided into 10415880 equity shares of Rs.10/- each. There hasnot been any new issue of share during the year under review.
5. DEPOSITORY SYSTEM
Your Company's equity shares are in demat form only. The Company hasappointed National Securities Depository Limited and Central Depository Services IndiaLimited as depositories to the Company.
6. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act 2013 and SEBIListing Regulation 2015 the Board has been constituted with proper balance of ExecutiveDirectors Non-Executive Directors and Independent Directors.
i. Retirement by rotation:
Mr. Carlton Gerard Pereira Director retires by rotation at theforthcoming Annual General Meeting and being eligible offers himself for re-appointment.The Board recommends his re-appointment for the consideration of the Members of theCompany at the ensuing Annual General Meeting. Brief profile of Mr. Carlton Gerard Pereirahas been given in the Notice convening the Annual General Meeting.
ii. Appointment and resignation of whole-time Key Managerial Personnel(KMP)
During the year under review Dr. Rajesh Srinivas Bail resigned from thepost of Chief Executive Officer w.e.f 28th February 2021. Further Dr. VijayAggarwal has been appointed as the Chief Executive Officer of the Company w.e.f 01stAugust 2021.
Pursuant to the provisions of Section 203 of the Act the KeyManagerial Personnel of the Company as on March 31 2021 are: a. Mr. Laxmi Rathi ChiefFinancial Officer (CFO) and b. Ms. Kruti Shah Company Secretary
iii. Declaration by Independent Directors
All the Independent Directors have given declarations that they meetthe criteria of independence as laid down under Section 149(6) of the Companies Act 2013and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.There has been no change in the circumstances affecting their status asindependent directors of the Company.
None of the Directors of the Company are disqualified as per section164(2) of the Companies Act 2013 and rules made there under or any other provisions ofthe Companies Act 2013. The Directors have also made necessary disclosures to the extentas required under provisions of section 184(1) of the Companies Act 2013.
All members of the Board of Directors and senior management personnelaffirmed compliance with the Company's Code of Conduct policy on an annual basis.
7. BOARD COMMITTEES FORMED DURING THE YEAR
The Board of Directors has the following Committees: a) Audit Committeeb) Nomination and Remuneration Committee c) Stakeholder Relationships Committee
The details of all the Committees of the Board along with theircomposition and meetings held during the year are provided in the Report on CorporateGovernance which forms part of this Annual Report.
8. NO. OF MEETINGS HELD
The details of the meeting of the Board along with their compositionand meetings held during the year are provided in the Report on Corporate Governance whichforms part of this Annual Report.
9. BOARD EVALUATION
The Companies Act 2013 states that a formal annual performanceevaluation needs to be made by the Board of its own performance the directorsindividually as well as the evaluation of its Committees. As per Schedule IV of theCompanies Act 2013 the performance evaluation of independent directors shall be done bythe entire Board of Directors excluding the director being evaluated. The evaluation ofall directors and the Board was conducted based on the criteria and framework adopted bythe Board.
10. MANAGEMENT DISCUSSIONS & ANALYSIS REPORT
The Management Discussion and Analysis Report in terms of Regulation34 (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 formsthe part of this Annual Report as Annexure I
11. REPORT ON CORPORATE GOVERNAN
Your Company has practiced sound Corporate Governance and takesnecessary actions at appropriate times for enhancing and meeting stakeholders'expectations while continuing to comply with the mandatory provisions and strive to complynonmandatory requirements of Corporate Governance.
Your Company has given its deliberations to provide all the informationin Report on Corporate Governance as per the requirements of the Companies Act 2013 andthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 which formsthe part of this Annual Report as Annexure II as a matter of prudence and goodgovernance.
Report on Corporate Governance Practices and the Auditors Certificateregarding compliance of conditions of Corporate Governance and certification by CEO/Wholetime Director & CFO is not applicable to your Company as per regulation 15(2)(b) ofSEBI (Listing Obligation and Disclosure Requirements) Regulations 2015.
12. RELATED PARTY TRANSACTIONS
All related party transactions have been entered by the Company duringthe financial year in the ordinary course of business and at the arm's length price.During the financial year under consideration the Company has entered into contracts /arrangements / transactions with related parties which could be considered as material inaccordance with the provisions of the Act have been given in "Annexure III" inForm No. AOC-2.
13. STATUTORY AUDITOR
M/s. B K Khare and Co. Chartered Accountants (Firm Regn. No. 105102W)Statutory Auditors of your Company shall hold the office as the Auditors of the Companyuntil the conclusions of the financial year ending 31st March 2021 and retiresat the conclusion of the ensuing annual general meeting.
Thus the Company hereby proposes to re-appoint M/s. B K Khare and Co.Chartered Accountants (Firm Regn. No. 105102W) as Statutory Auditors of the Company tohold office for a term of five year commencing from the conclusion of this Annual Generalmeeting (AGM) until the conclusion of the Annual General Meeting to held in the year 2026at such remuneration as may be agreed upon between the Board of Directors and/or AuditCommittee thereof. The requirement for the annual ratification of auditor's appointment atthe Annual General Meeting has been omitted pursuant to Companies (Amendment) Act 2017notified on May 7 2018. The Statutory Auditors have confirmed that they satisfy theindependence criteria as required under the Act.
14. AUDITORS' REPORT
The observations if any made by the Statutory Auditors in theirAuditors Report together with the notes to accounts as append thereto areself-explanatory and hence does not call for any further explanation. The StatutoryAuditors have not reported any incident of fraud to the Audit Committee of the Company inthe year under review.
The Report given by M/s. B.K. Khare & Co. Chartered Accountants onthe financial Statements of the Company for the financial year 2020-2021 forms part ofthis Annual Report.
15. INTERNAL AUDITOR
The Board had appointed M/s. L.M. Joshi & Co. CharteredAccountants as the Internal Auditors of the Company to carry out the Internal Audit forthe year 2020-2021 under the provisions of section 138 of the Companies Act 2013.
The Company has received consent letter from M/s. L.M. Joshi & Co.Chartered Accountants for their re- appointment as the Internal Auditors of the Companyfor the financial year 2021-2022 and the Board has re-appointed them accordingly.
16. SECRETARIAL AUDIT REPORT
In terms of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. A. M. Antarkar & Co. Practicing Company Secretaries Pune (CP No.3022) as a Secretarial Auditors of the Company. The report of the Secretarial Auditors isenclosed as Annexure IV to this report. The report is self-explanatory and do not call forany further comments.
17. COST RECORDS AND AUDIT
As per the Company's (Cost Records and Audit) Rules 2014 theCompany's services are not covered under Cost Audit and for the services for whichthe maintenance of cost record is required is not applicable on the Company.
18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
As per the provision of Section 138 of the Companies Act 2013 theCompany has devised a proper system to check the internal controls and functioning of theactivities and recommend ways of improvement. Internal Audit is carried out timely. Theinternal financial controls with reference to financial statements as designed andimplemented by the Company. During the year under review no material or seriousobservation is received from the Internal Auditor of the Company for inefficiency andinadequacy of such controls.
19. EXTRACT OF ANNUAL RETURN
As required pursuant to section 92(3) of the Companies Act2013 andRule 12(1) of the Companies (Management and Administration) Rules 2014 an extract ofannual return in MGT 9 as a part of this Annual Report as Annexure - V. The Extract ofAnnual Return in Form MGT - 9 is available on the website of the Companywww.sanghvibrands.com
20. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THECOMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
Amid COVID -19 pandemic during the second wave several states went inpartial or complete lockdown during the financial year end and the operation of theCompany remains jeopardized. As the Company is not part of Government denominatedessential service all operational locations (including for all subsidiary companies) wereshut down entirely during the lockdown phase.
The revenues of the Company continue to fall for the financial year dueto pandemic of COVID-19 which has affected the Company business due to worldwide lockdownshutting down of tourism and domestic/ international travels.
21. COMPLIANCE WITH SECRETARIAL STANDARDS
Your Company has complied with the Secretarial Standards related to theBoard Meetings and General Meeting issued by the Institute of Company Secretaries of India(ICSI).
22. CORPORATE SOCIAL RESPONSIBILITY
Provision of Schedule VII of the Companies Act 2013 read withCompanies (Corporate Social Responsibility Policy) Rules 2014 are not applicable to theCompany during the financial year under review.
23. VIGIL MECHANISM
Pursuant to the provision of Section 177(9) of the Companies Act 2013read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules 2014 a"Vigil Mechanism Policy" for Directors and Employees of the Company is in placeto report their genuine concern of any violation of legal or regulatory requirementsincorrect or misrepresentation of any financial statements and reports unethical behavioractual or suspected fraud or violation of the Company's code of conduct etc. during theyear under review no such complaints were received.
24. THE CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO IN SUCH MANNER AS MAY BE PRESCRIBED
The information pertaining to Conservation of Energy TechnologyAbsorption Foreign Exchange Earnings and outgo as required under Section 134 (3) (m) ofthe Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 are as statedbelow:
A) Conservation of Energy
1. The steps taken or impact on conservation of energy; The Companyapplied strict control system to monitor day to day power consumption. The Company ensuresoptimal use of energy with minimum extent of wastage as far as possible. The day-to-dayconsumption is monitored to save energy.
2. The Capital Investment on Energy Conservation Equipment. The Companyhas not made any capital investment on energy conservation equipment.
B) Technology Absorption: -
The Company has no activities relating to technology absorption.
C) Foreign Exchange Earnings and Outgo;
|Particulars ||2020-2021 ||2019-2020 |
|Foreign Exchange Earnings in terms of actual inflows ||- ||- |
|Foreign Exchange outgo in terms of actual outflow ||873891 ||3199614 |
25. REVIEW OF SUBSIDIARY AND ASSOCIATE COMPANIES
As required under Companies Act 2013 the audited consolidatedfinancial statements of the Company incorporating all its subsidiary and associatecompanies prepared with applicable Accounting Standards are attached.
During the financial year due to lockdown the operations of SanghviBrands US Holding Inc (United States of America) and Sanghvi Brands Beauty & Salon LLC(United Arab Emirates) along with branches were impacted in terms of liquidity capitaland financial resources and further viability was questionable given the heavy negativeimpact on the travel tourism and hospitality industry. Thus the said subsidiaries weresubsequently liquidated and under legal process of liquidation.
Salient features of subsidiary Companies are annexed as Annexure - VIin form no.AOC-1.
26. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS ORTRIBUNALS IMPARTING THE GOING CONCERN STATUS ANDCOMPANY' OPERATION IN FUTURE
There are no significant and material orders passed by regulators orcourts or tribunals imparting the going concern status and Company' operation in future.
Your Company did not accept/ hold/ any deposits frompublic/shareholders during the year under review.
28. PARTICULARS OF LOAN GUARANTEE OR INVESTMENTS
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the Notes to FinancialStatements.
29. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
In accordance with Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the rules framed their under the Company hasformed an Internal Complaints Committee and framed and adopted the policy for Preventionof Sexual Harassment at Workplace. The following is the summary of Sexual Harassmentcomplaints received and disposed off during the year 2020-2021.
No. of Complaints received: NIL No. of Complaints Disposed off: NIL
30. STATEMENT OF UTILIZATION OF PUBLIC ISSUE PROCEEDS PURSUANT TOREGULATION 32 OF SEBI (LISTING OBLIGATION AND DISCLOSURE REQUIREMENTS) REGULATION 2015
As per Regulation 32 of SEBI (Listing Obligation and DisclosureRequirements) Regulation 2015 the listed entity shall submit to the stock exchange thestatement indicating deviation if any in the use of proceeds from the objects stated inthe offer document indicating category wise variation between projected utilization offunds made by it in its offer document as applicable and the actual utilization of funds.However there was no deviation on the objects of the issue proceeds and as review by theAudit Committee the statement is as under;
(Amounts in Lakhs)
|Particulars ||Amount Funded from the Gross Proceeds ||Actual Utilization up to year ended 31st March 2021 ||Pending for utilization |
|Business Expansion || || || |
|a. Expanding outlets/ distribution of current brand portfolio in India and overseas ||771.70 ||155.84 ||235.01 |
|b. Acquisitions and development of new brands || ||380.85 || |
|Marketing and sales promotion of the brands in our portfolio ||500.00 ||500.00 ||0.00 |
|Strategic Investments for business growth ||100.00 ||71.42 ||28.58 |
|General Corporate Purpose ||284.42 ||284.42 ||0.00 |
|Issue Expenses ||240.00 ||225.55 ||14.45 |
|Total ||1896.12 ||1618.08 ||278.04 |
31. HUMAN RESOURCES
Your Company treats its "human resources" as one of its mostimportant assets. Your Company continuously invest in attraction retention anddevelopment of talent on an ongoing basis. Your Company thrust is on the promotion oftalent internally through job rotation and job enlargement.
32. PARTICULARS OF EMPLOYEES
The Company has no employee Companies who is in receipt ofremuneration of Rs. 850000/- per month or Rs. 10200000 per annum and hence theCompany is not required to give information under sub rule 2 and 3 of Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014
33. DIRECTORS' RESPONSIBILITY STATEMENT
The Directors' Responsibility Statement referred to in clause (c) ofsub-section (3) of Section 134 of the Companies Act 2013 shall state that:
(a) In the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;
(b) they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;
(c) They have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(d) They have prepared the annual accounts on a going concern basis;
(e) They have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively and
(f) They have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
34. LISTING WITH STOCK EXCHANGES
Sanghvi Brands Limited listed its shares on the SME Platform of BSELimited on November 22 2017.The listing fees duly paid to the exchange and annualcustodial fees has been paid to CDSL and NSDL for the F.Y. 2020-21.
Your Directors takes this opportunity to thank all GovernmentAuthorities Bankers Shareholders Registrar & Transfer Agents Investors and otherStakeholders for their assistance and co-operation to the Company. Your Directors expresstheir deep sense of appreciation and gratitude towards all employees and staff of theCompany and wish the management.