You are here » Home » Companies » Company Overview » Sheela Foam Ltd

Sheela Foam Ltd.

BSE: 540203 Sector: Industrials
NSE: SFL ISIN Code: INE916U01025
BSE 16:01 | 30 Oct 1311.45 9.85






NSE 15:41 | 30 Oct 1308.25 3.40






OPEN 1329.95
52-Week high 1770.00
52-Week low 1101.00
P/E 45.02
Mkt Cap.(Rs cr) 6,397
Buy Price 1300.00
Buy Qty 9.00
Sell Price 1362.00
Sell Qty 8.00
OPEN 1329.95
CLOSE 1301.60
52-Week high 1770.00
52-Week low 1101.00
P/E 45.02
Mkt Cap.(Rs cr) 6,397
Buy Price 1300.00
Buy Qty 9.00
Sell Price 1362.00
Sell Qty 8.00

Sheela Foam Ltd. (SFL) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the 48th Annual Report on thebusiness operations and financial performance of the Company along with the ConsolidatedAudited Balance Sheet and Statement of Profit & Loss for the year ended

31 March 2020.


(Rs. in Crores)



2019-20 2018-19 2019-20 2018-19
Revenue from operations 2173.63 2141.45 1754.77 1813.76
Profit before Financial Charges Depreciation & 340.40 238.58 268.37 214.03
Tax & Exceptional Item
Exceptional Item 11.99 0.00 11.99 0.00
Profit before Financial Charges Depreciation & Tax 328.41 238.58 256.38 214.03
Less: Financial Charges 13.00 9.62 8.14 7.34
Cash Profit 315.41 228.96 248.24 206.69
Less: Depreciation 59.04 39.53 33.09 31.09
Profit before Tax 256.37 189.43 215.15 175.60
Add/(Less): Income Tax (66.77) (52.33) (54.23) (47.18)
Earlier year's tax 0.00 1.11 - 1.11
Add/(Less): Deferred Tax 4.69 (4.46) 4.59 (5.86)
Profit after Tax 194.29 133.75 165.51 123.67
Other Comprehensive Income (3.07) (0.92) (4.33) (0.92)
Total Comprehensive Income for the year 191.22 132.83 161.18 122.75

During the current year Net Revenue of the Company on standalone basis decreasedfrom Rs. 1814 Crores to Rs. 1755 Crores. The Company was recording higher turnover ascompared to last year till 21 March 2020 despite substantial reduction in Foam pricesdue to reduction in raw material costs. However no sale took place during lockdown due toCOVID 19. The Profit after tax for the current year increased by 33.8% to Rs. 165.51Crores as against the profit after tax of Rs. 123.67 Crores of last year. The profit wouldhave been much higher but for loss of sale during lockdown period and Exceptional Item.Exceptional Item of Rs. 11.99 crores is the loss on account of Fire at Greater Noida Plantin May 2016.This amount was shown as Claims Recoverable. However as in spite ofcontinuous follow up for its recovery there is no concrete evidence /reasonable positiveindication of its recovery the said claim has been written off.


During the year the Company substantially increased the Sales Volume of Mattressesregistering a growth of 20% over last year despite losing sale during the lockdownperiod. This has led to higher market share of your company in the organised mattressmarket. The company continues to retain its leadership position in Mattress and FoamProducts.

During the year the prices of critical raw materials like Polyol and TDI went down. TheCompany also reduced the prices of its Foam Products. The reduction in prices resulted ina lower turnover by approx Rs. 87 crores. Further the Company lost approximately Rs. 75crores turnover due to lockdown.

A complete lockdown of more than 2 months due to COVID 19 and a slow restart means thatthe sales of Mattresses and Foam Product for the year 2020-21 are going to besubstantially lower. Due to changed sentiments the demand for discretionary products likeMattresses and Furniture will take time to pick up. Your Company is doing its best torevive the sales using innovative techniques like Sleepwell@Home Aggressive OnlineMarketing Focus on selling products which are good for health etc. Company is now sellingall its product treated with Neem Fresche which means immunity from various respiratoryproblems caused by Dust Mites Bacteria & Fungi.

Over the last 2 years there has been a shift from unorganised mattress market toorganised market. The biggest contributing factor for this is implementation of GST. YourCompany took timely action of introducing low priced mattresses to maximise the gain fromsuch shift.

The demand potential for Mattresses as well as for Foam Products remains highconsidering that a large section of the population is yet to shift to modern mattressesand furniture using foam. As large section of society is becoming health consciousand has higher disposable income the shift from unorganised segment to organised willaccelerate. The culture of Work From Home would also mean higher usage of Mattressesresulting in higher replacement demand. Sound Sleep is now known to be the biggestcontributor to good body immunity. It is expected that this realisation would also work infavour of organised mattress manufacturing units.

The Company continues to increase its market penetration and the total retail outletsincluding EBO and MBO are more than 11500.

The B2B segment of business was impacted by the slowdown in automotive segment.

Despite this slowdown the Company was able to sell volumes similar to last year till 21March 2020. To increase the sales in this segment Company continues to develop ImportSubstitute Foam through its in-house Research & Development.

During the year Company acquired 93.66% shares of Interplasp S.L. Spain a FoamManufacturing Company. The capacity of the plant is 22000MT of Foam whereas it wasoperating at 50% capacity. Interplasp is having less than 1% of European Market Share.Further the US market is also now open for Interplasp .With sufficient capacity andheadroom for growth your Company is expected to improve its Overall Revenue andprofitability.


Board of Directors do not recommend any dividend for the year 2019-20. The entireprofit is being ploughed back in the business.


As on 31 March 2020 the Company has Six subsidiaries and two steps down subsidiaries.As required under the provisions of Section 129 of the Companies Act 2013 read withCompanies (Accounts) Rule 2013 a statement containing salient features of the financialstatements of subsidiaries is provided in the prescribed format AOC-1 as Annexure-Aof the Board Report.

The Company has one 100% subsidiary Joyce Foam Pty. Ltd (Joyce Foam) in Australia.Joyce Foam is the largest producer of Foam in Australia and supplies its high-quality Foamto Global Mattresses and Furnishing Companies. Joyce Foam recorded a turnover of 66.17Million Australian Dollars (AUD) in 2019-20 as compared with 66.70 Million AUD in2018-19 and has posted post tax profit of AUD4.08 Million in 2019-20 as against AUD 2.19Million in 2018-19recording a growth of about 86%

Joyce Foam Pty Ltd has one wholly own subsidiary Joyce W C NSW Pty Ltd.

During the year the Company has acquired 93.66% shares of a Spanish Company InterplaspS.L. through 100% subsidiary International Foam Technologies Spain S.L. (SPV). Theacquisition was done for a total consideration of Euro 40 Million financed by debt andinternal accrual. Interplasp has a manufacturing facility in Yecla in Spain and producingPolyurethane Foam for bedding and other applications having capacity to produce 22000ton.

During the year the Company created a Stock Corporation in the name of SleepX US the state of Delaware in United State of America. The Company is yet to invest anyshare capital in SleepX US Inc.

During the year Company has also acquired a newly incorporated Company Staqo WorldPrivate Limited (Staqo) having paid-up capital of Rs. 100000/-. Staqo is into thebusiness of Information Technology and its registered office is in Delhi.

Your Company has two other wholly owned subsidiaries as under:

1) Divya Software Solutions Private Limited

2) Sleepwell Enterprises Private Limited.


In accordance with Regulation 16 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) none ofthe subsidiaries is a material non-listed subsidiary. The Company has formulated a policyfor determining material subsidiaries. The policy has been uploaded on the website of theCompany at http://


In accordance with Section 136 of the Companies Act 2013 and the applicable AccountingStandard on the Consolidated Financial Statements your Directors have attached theconsolidated financial statements of the Company which form a part of the Annual Report.

The financial statements including consolidated financial statements and the auditedaccounts of each of the subsidiary are available on the Company's website


In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that: a) In the preparation of the annual accounts the applicable accountingstandards have been followed. b) The directors have selected such accounting policies andapplied them consistently and made judgements and estimates that were reasonable andprudent so as to give a true and fair view of the state of affairs of the Company at theend of the financial year and of the profit or loss of the Company for the year underreview. c) The directors 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) The directors have prepared the annual accounts on a going concern basis. e) Thedirectors have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and f)The directors had devised proper system to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.


In accordance with SEBI Regulations a separate report on Corporate Governance is givenin Annexure-B along with the Auditors' Certificate on its compliance. The Auditors'Certificate does not contain any qualification reservation and adverse remark.

Related Parties Transactions

The particulars of Contracts or arrangements with related parties in the prescribedform are attached as



The Company has formulated a Risk Management Policy duly reviewed by the Board ofDirectors. The policy includes risk identification analysis and prioritisation of riskand development of risk mitigation plans. The Company has constituted a Risk ManagementCommittee to look into the risk involved with the Company and its mitigation.

Internal Financial Controls

The Company has in place adequate Internal Financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operations were observed. The report on the InternalFinancial Control issued by M/s. S. P. Chopra & Co. Chartered Accountants StatutoryAuditors of the Company in view of the provisions under the Companies Act 2013 is givenin their report.


As per the provisions of the Companies Act 2013 Ms. Namita Gautam will retire byrotation at the ensuing

Annual General Meeting (AGM) of the Company and being eligible seek re-appointment.The Board has recommended her reappointment.

As required under the provisions of Section 203 of the Companies Act 2013 the KeyManagerial Personnel namely Chairman and Managing Director Executive Directors andCompany Secretary continue to hold that office as on the date of this report. ChiefFinancial Officer Mr. Pankaj Garg ceased from his office from 11 November 2019 dueto resignation. Mr. Dhruv Chandra Mathur was appointed as Chief Financial Officer of thecompany w.e.f. 11 November 2019.


M/s. S.P. Chopra & Co. Chartered Accountants were reappointed for 5 years in theAnnual General Meeting held on 2016 subject to ratification at every AGM. The Company hasreceived letter from the Auditors to the effect that the ratification if made would bewithin the prescribed limits under Section 141 of the Companies Act 2013 and that theyare not disqualified for re-appointment.

The Board recommends the ratification of the appointment of M/s. S.P. Chopra & Coas Statutory Auditors for FY 2020-21 for the audit of the Company.


There is no adverse observation of Auditors' on financial statements of the company.The Auditors' Report read with the relevant notes to accounts are self-explanatory andtherefore does not require further explanation. COST AUDITOR

As per section 148 read with Companies (Audit and Auditors) Rule 2014 M/s Mahesh Singh& Co Cost Accountants are appointed to conduct the cost records of the Company forthe Financial Year 2020- 21 by the Board of Directors and it seeks ratification ofremuneration from the members of company at ensuing Annual General Meeting.


The company has engaged M/s S. S. Kothari Mehta & Co. Chartered Accountants asInternal Auditor to conduct internal audit for the year 2020-21. The Internal Auditor willreport to Board of Directors. The internal audit will help company to review theoperational efficiency and assessing the internal controls. It also reviews thesafeguarding of assets of the Company.


The company has engaged M/s AVA Associates Company Secretaries as Secretarial Auditorto conduct Secretarial audit for the year 2019-20. The report on secretarial audit isannexed as Annexure-D to the Board's Report. The report does not contain anyqualification reservation or adverse remark.


In terms of Companies Act 2013 your company has to undertake Corporate SocialResponsibility programme. The disclosure as per Rule 9 of the Companies (Corporate SocialResponsibility Policy) Rule 2014 is attached as Annexure-E


The composition of Audit Committee is provided in the Corporate Governance Report thatforms part of this Annual Report.


The Company has established a vigil mechanism through a Whistle Blower Policy. TheCompany can oversee the genuine concerns expressed by the employees and other Directors.The Company has also provided adequate safeguards against victimisation of employees andDirectors who may express their concerns pursuant to this policy. The policy is uploadedon the website of the Company at


The Company has in place an Anti-Sexual Harassment policy in line with the requirementsof sexual harassment of women at Work place (Prevention Prohibition and Redressal) Act2013. The Internal system has been set up to redress complaints received regarding sexualharassment. During the period under review no complaint was received by the Company.


During the year 6 meetings of the Board of Directors were held.


Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 form part of the Financial Statements.


A. Following measures were taken by company for energy conservation in the year:

1) Installed 5 KWp solar power plant at one of the units to reduce the electricityconsumption from power Distribution Company.

2) Replaced 10 nos. of electric hoist with hydraulic power pack which results intoincreasing the efficiency of the machine and saving of electricity.

3) One of the processes named Hot Stamping completely turned into Laser Stamping forenergy conservation. This process helps in identification of the product even after beingremoved from packaging.

4) Replacement of conventional MH and streetlights with energy efficient LEDlights_with LDR and motion sensor based control system.

5) Used hand held blowers for floor cleaning to eliminate the use of compressed air forthe same.

6) Used air cooler with timer to eliminate the wastage of electricity as many timescooler remain in ‘On state' in the absence of user.

7) Used PPR-CH pipeline with PUF insulation to increase the efficiency of ChillerWater.

8) Used floating valve in cooling towers to maintain water level automatically itresults into elimination of water and electricity wastage.

9) Replaced old Air conditioner with energy efficient new generation Air conditionerwith non-CFC gases leading to reduction in power consumption as well as not harming theOzone layer.

10) Increased the usage of Variable Frequency drives instead of starters for theelectric motors to reduce the electricity consumption and to increase the efficiency ofmotors.

B. The expenses incurred on Research and Development have been included in respectiveexpense heads.

C. The Company has introduced new process to reduce the consumption of energy andupgraded technology whenever required.

D. The earnings from exports were Rs. 16.43 crores (Previous Year Rs. 20.43) andpayments in foreign exchange were Rs. 131.04 crores (Previous Year

Rs. 271.53 crores).


Your Company has entered into agreements with Bombay Stock Exchange Limited (BSE) andNational Stock Exchange of India Limited (NSE) in compliance with Regulation 109 of theSEBI LODR Regulations 2015.


The information as required under Section 197 of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is provided in Annexure-F to the Board's Report.


In terms of provisions of Regulation 34 of the Listing Regulations the Management'sdiscussion and analysis is set out in this Annual Report.


The Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.


Extract of Annual Return as provided under Sub Section 3 of Section 92 is annexed asAnnexure-G.


There are no significant and material orders passed by regulators or courts ortribunals impacting the going concern status and Company's operations in future.


Pursuant to the provisions of Companies Act 2013 and the Listing Regulations theBoard has carried out annual performance evaluation of its own performance those ofdirectors individually and of various committees.

The performance of individual directors was evaluated on parameters such as number ofmeetings attended contribution in the growth and formulating the strategy of the Companyindependence of judgement safeguarding the interest of the Company and minorityshareholders time devoted apart from attending the meetings of the Company activeparticipation in long term strategic planning ability to contribute by introducing bestpractices to address business challenges and risk etc. The directors expressed theirsatisfaction with the evaluation process.


Business Responsibility Report/Sustainability Report is annexed as Annexure-H.


The company has adopted Dividend Distribution Policy and there is no change in policyduring the year. As per SEBI (Listing Obligations and Disclosure Requirements)_Regulations 2015 the policy is hosted at our web site at and is alsoattached as Annexure-I.


Your Directors wish to express and place on record their thanks to the Company'sDistributors Dealers and Business Associates for their excellent effort and the customersfor their continued patronage of the Company's products. Your Directors also wish to placeon record their appreciation for the devoted services of the Executive Staff and workersof the Company at all levels enabling the Company to achieve the excellent performanceduring the year.

Your Directors also appreciate the valuable co-operation and continued support receivedfrom Company's bankers and all the government agencies and departments.

The Directors also express their sincere thanks to all the Shareholders for thecontinued support and trust they have reposed in the Management.

Place: Noida Date : 26 June 2020

By Order and on behalf of the Board of Sheela Foam Limited

(Rahul Gautam)

Chairman and Managing Director