To the Members
Your Directors have pleasure in submitting their 28th Annual Report of the Companytogether with the Audited Statements of Accounts for the year ended March 31 2019.
1. FINANCIAL RESULTS
The Financial statements of the Company have been prepared in accordance with theIndian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act 2013(the Act) read with the Companies (Accounts) Rules 2014. The financial statements for thefinancial year ended March 31 2019 as well as comparative figures for the year endedMarch 31 2018 are Ind AS compliant.
The financial highlights of your Company for the financial year ended March 31 2019are summarized as follows:
(Rs. in Lakhs)
|Particulars ||2018-2019 ||2017-2018 |
|Net Sales /Income from || || |
|Business Operations ||14739.28 ||14608.25 |
|Other Income ||53.32 ||100.31 |
|Total Income ||14792.60 ||14708.55 |
|Less: Expenses ||14719.49 ||15089.20 |
|Total ||73.11 ||(380.65) |
|Less: Interest ||20.42 ||15.85 |
|Profit before Depreciation ||52.69 ||(396.50) |
|Less: Depreciation ||976.05 ||998.84 |
|Profit/Loss after depreciation and Interest ||(923.36) ||(1395.34) |
|Less: Exceptional Item & Prior period Exp. || || |
|Profit/Loss before Tax ||(923.36) ||(1356.27) |
|Less: Current Income Tax || || |
|Less: Deferred Tax Liability / (Assets) ||0.85 ||3.50 |
|Net Profit / Loss after Tax ||(924.21) ||(1398.84) |
|Other comprehensive Income/(Loss) ||(2.20) ||(7.08) |
|Total Comprehensive Income/(Loss) for the year (After tax) ||(926.41) ||(1405.92) |
|Dividend (including Interim if any and final ) || || |
|Net Profit after dividend and Tax ||(926.41) ||(1405.92) |
|Amount transferred to General Reserve || || |
|Balance carried to Balance Sheet ||(926.41) ||(1405.92) |
|Earnings per share (Basic) ||(0.27) ||(0.41) |
|Earnings per Share(Diluted) ||(0.27) ||(0.41) |
The Board of Director has not recommended any dividend on the Share Capital of theCompany for the period ended March 31 2019 in view of losses incurred.
3. TRANSFER TO RESERVES
The company has not transferred any amount to the General Reserve.
4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
Your Directors wish to present the details of Business operations done during the yearunder review:
During the year under review the performance of the company slightly improved. Howeverfurther improvement was affected due to lower capacity utilization on account of limitedresources available with company and slowdown in the textile industry. Company hasincurred loss after tax of Rs. 926.41 lacs as against a loss after tax of Rs. 1405.92 lacsin the previous year 2017-18.The turnover of the company was Rs. 14739.28 lacs as againstRs. 14608.25 lacs in the previous year 2017-18.
b. Marketing and Market environment
Your Company believes that its scale of operations and integration across the textilechain will in future offer significant advantages in both cost and revenue. Your Companywork hard to meet the competition as well as to enable to maintain long standing businessrelationship.
c. Future Prospects including constraints affecting due to Government policies
We expect the textile segments to turn favorable based on the various factors likemacro economy condition and the Company is taking all necessary steps to take companyforward.
5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY
There were no material changes and commitments affecting the financial position of theCompany occurred between the end of the financial year to which this financial statementsrelate and the date of this report.
6. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant and material orders passed by the regulators / courts thatwould impact the going concern status of the Company and its future operations.
7. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year ended 31st March 2019 asstipulated under Regulation 34(2) and (3) of SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015 with Stock Exchanges in India is presented in the separatesection forming a part of this Annual Report.
8. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in "AnnexureA" and is attached to this report.
9. RISK MANAGEMENT POLICY
Risk management includes identifying all types of risks and its assessment riskhandling and monitoring and reporting. The Company has laid down a well-defined riskmanagement mechanism covering the risk mapping and trend analysis risk exposurepotential impact and risk mitigation process. A detailed exercise is being carried out toidentify evaluate manage and monitor the principal risks that can impact its ability toachieve its strategic objectives. These are discussed at the meetings of the AuditCommittee and the Board of Directors of the Company. The Company has adopted RiskManagement Policy in accordance with the Listing Regulations 2015.
The Risk Management Policy is available onweblinkhttp://www.shekhawatiyarn.com/Companypolicies.html.
10. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES
Pursuant to Section 135 of the Companies Act 2013 and the relevant rules the Boardhas constituted Corporate Social Responsibility (CSR) Committee under the Chairmanship ofMr. Sushil Kumar Poddar. The other members of the Committee are Mr. Mukesh Ruia and Mrs.Rohini Pradyumna Dandekar. The Board of Directors based on the recommendations of theCommittee formulated a CSR Policy. The Company could not undertake CSR activities in viewof losses. The detailed CSR Policy is hosted on company's website weblinkhttp://www.shekhawatiyarn.com/Companypolicies.html. Annual report on CSR as required under Companies(Corporate Social Responsibility Policy) Rules 2014 is furnished in "AnnexureB" and forms part of this report.
11. DISCLOSURE UNDER THE SEXUAL HARASSEMENT OF WOMAN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has been employing woman employees in various cadres within its office andfactory premises. The Company has in place a policy against Sexual Harassment in line withthe requirements of the Sexual Harassment of woman at work place (Prevention Prohibitionand Redressal) Act 2013. Internal Complaint Committee is set up to redress any complaintsreceived and are monitored by woman line supervisors. All employees are covered under thispolicy. There was no complaint received from any employee during the financial year2018-19 and hence no complaint is outstanding as on March 31 2019 for redressal.
12. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013
There was no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.
13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
The Particulars of Contract or Arrangements made with related parties made pursuant toSection 188 is furnished in "Annexure C" and is attached to this report.All related party transactions that were entered into during the year under report were onan arm's length basis and in ordinary course of business and were in compliance withapplicable provisions of the Act and Listing Regulations.
The policy on the materiality of the Related Party Transactions and also on dealingwith the Related Party Transactions as approved by the Audit Committee and Board ofDirectors is available on the weblinkhttp:// www.shekhawatiyarn.com/Companypolicies.html.
14. AUDITORS REPORTS
As regards Auditors Remarks in Audit Report comments of the Board of Director is asunder:-
The Company has not provided for Interest Expenses amounting to Rs. 2273.15 Lakhs(P.Y.Rs. 2256.99 Lakhs) (derived on simple interest basis) which should have been providedas per the Principal of Prudence on the borrowing which have been classified as"Non-performing assets" (NPA) by the banks as referred in Note 41 ofaccompanying notes to financial statement. The company has also not provided penalinterest and other bank charges as the same are not ascertainable. Had these interestexpenses been debited to the Statement of Profit and Loss Account loss for the year endedand debit balance of other Equity would have been higher by Rs. 2273.15 lakhs and Rs.6903.87 lakhs.
Management Remark :
The Company is in the process of discussion with its lenders and is hopeful that thesuitable resolution plan will be considered by its lenders and accordingly the Companyhas not recognized the Interest Expenses.
15. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES
The Company's Policy relating to appointment of Directors payment of Managerialremuneration including criteria for determining Directors' qualifications positiveattributes independence of Directors and other related matters as provided under Section178(3) of the Companies Act 2013 is furnished in "Annexure D" and isattached to this report.
16. ANNUAL RETURN
Pursuant to Section 92(3) of the Act and Rules framed thereunder an extract of theAnnual Return in Form MGT 9 is furnished in "Annexure E".
17. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
The Company has neither accepted nor renewed any deposits during the year under review.
19. MEETINGS OF THE DIRECTORS
The Board met 4 (Four) times during the financial year the details of which are givenin the Corporate Governance Report that forms part of this Annual Report. The interveninggap between any two meetings was within the periods prescribed by the companies Act 2013and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulation2015 entered into with the stock exchanges.
20. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submit its responsibility Statement:
a) Applicable accounting standards have been followed with explanation for any materialdepartures;
b) Selected accounting policies have been applied consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the company at the end of the financial year and of the profit and loss ofthe company for that period;
c) Proper and sufficient care has been taken for the maintenance of adequate accountingrecords for safeguarding the assets of the company and for preventing and detecting fraudand other irregularities;
d) The annual accounts are prepared on a going concern basis;
e) Internal financial controls laid have been followed by the company and that suchinternal financial controls are adequate and are operating effectively and;
f) The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
21. DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year following Directors appointed/re-appointed and resigned in the Company.
Appointment / Re-appointments
1) As per the provisions of Section 152(6) of the companies Act 2013 Mr. Ravi SanjayJogi(DIN : 06646110) Executive Director of the company retires by rotation at theensuing Annual General Meeting and being eligible offer himself for re-appointment.
2) Mr. Vikas Damodardas Rathi (DIN No. 03633856) who were Appointed as a AdditionalIndependent Director by the Board of Directors on the recommendation of Nomination andRemuneration Committee on April 30 2019 hold the said office till the date of theensuing Annual General Meeting. The Company has received a notice as per the provision ofsection 160(1) of the companies act 2013 from a member proposing his candidature forreappointment to hold office upto five consecutive years.
3) As per the provision of Section 196 197 & 203 of the Companies Act 2013 MukeshRamniranjan Ruia (DIN: 00372083) Executive Director is re-appointed for the another termof 5 years as a Chairman & Managing Director.
4) In compliance of Regulations 17(1A) of the SEBI (LODR) Regulation 2015 as amended("Listing Regulations") Mr. Sushil Kumar Poddar has retired w.e.f. April 12019 as he has attained the age of 75 years and hence ineligible to continue the office.The Board wishes to place on record its appreciation for the invaluable contributionrendered by Sushil Kumar Poddar during his tenure as Director of the Company.
The Company has received a notice under section 160 of the Companies Act 2013 asamended thereof from a member of a company proposing the candidature of Mr. Sushil KumarPoddar (DIN No. 03605830) for the office of Director of the Company. As Mr. Sushil KumarPoddar has crossed the age of 75 years his appointment can only be made by membersapproval at EGM/AGM by way of Special Resolution to fulfill the conditions of hisappointment in compliance of Regulation 17(1A) of the SEBI (LODR) Regulations 2015 asamended.
The Board seeks approval of the shareholders at the 28th Annual General Meeting forconfirmation of appointment / re-appointments of Mr. Sushil Kumar Poddar Mr. VikasDamodardas Rathi Mr. Ravi Sanjay Jogi and Mr. Mukesh Ramniranjan Ruia.
Ms. Swati Sahukara Independent Director has resigned from the Board w.e.f August 122019. The Board appreciated her association with the company and the support during hertenure.
Attention of the member is invited to the relevant item in the Notice of the 28thAnnual General Meeting and explanatory statement thereto.
Appointment / Resignations of the Key Managerial Personnel
There is no appointment/Resignation of the Key Managerial Personnel.
Pursuant to section 134 and 174 of the Act and Regulation 17 and 19 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a separate exercise wascarried out to evaluate the performance of individual Directors Board its committeesincluding the Chairman of the Board who were evaluated on parameters such level ofengagement and contribution and independence of judgement thereby safeguarding theinterests of the Company. The performance evaluation of the Chairman and the NonIndependent Directors was carried out by the Independent Directors. The board also carriedout annual performance evaluation of the working of its Committees. The Directorsexpressed their satisfaction with the evaluation process.
The Company have conducted presentation during the financial year to familiarizeIndependent Directors with the Company their roles responsibilities in the Companyperformance update of the Company global business environment technology and the riskmanagement system of the Company. Further the Directors are encouraged to attend and tothe training programmes being organized by various regulators/bodies/Institution on abovematters and freedom to interact with the management of the Company.
22. DECLARATION OF INDEPENDENT DIRECTORS
The company has received necessary declaration from all Independent Director undersection 149(7) of the Companies Act 2013 that he/she meets the criteria of independenceas prescribed under Section 149(6) and (7) of the Companies Act 2013 and Regulation 16of Listing Regulations 2015.
23. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE
The Audit Committee consists of the following members as on March 31 2019
|Name of the Member ||Designation |
|1 Mr. Sushil Kumar Poddar@ ||Chairman |
|2 Mr. Mukesh Ruia ||Member |
|3 Mrs. Rohini Pradyumna Dandekar ||Member |
|4 Mr. Vikas Damodardas Rathi* ||Chairman |
@ Mr. Sushil Kumar Poddar has retired from chairmanship w.e.f. April 1 2019.
*Mr. Vikas Damodardas Rathi appointed as chairman w.e.f. April 30 2019.
The above composition of the Audit Committee consists of independent Directors viz.Mr. Sushil Kumar Poddar and Mrs. Rohini Pradyumna Dandekar who form the majority. Moredetails on the Committee are given in the Corporate Governance Report which forms part ofthis Annual Report.
The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of employees and the Company. Thedetails of the Whistle Blower Policy is explained in the Corporate Governance Report andis also displayed on the website of the Company.
M/s. Ajay Shobha & Co. Chartered Accountants were appointed as Statutory Auditor ofthe Company at the Annual General Meeting held on September 22 2015 to hold office tillthe conclusion of the Annual General Meeting to be held in the Calendar year 2020 subjectto ratification by the member at every AGM held thereafter. Section 139 of the Act hasbeen amended vide the Companies (Amendment) Act 2017 by the Ministry of Corporate Affairson May 7 2018 and has done away with the requirement of seeking ratification of Memberfor appointment of Auditors at every AGM. Accordingly no Resolution is being proposed forratification of appointment of Statutory Auditors at the ensuing AGM.
The M/s. Ajay Shobha & Co. Chartered Accountants have under Sections 139 and 141 ofthe Act and Rules framed thereunder confirmed that they are not disqualified fromcontinuing as Statutory Auditor of the Company and furnished a valid certificate issued bythe Peer Review Board of the Institute of Chartered Accountants of India as required underRegulation 33 of the Listing Regulations.
As per the requirement of Section 148 of the Act read with the companies (Cost Recordand Audit) Rules 2014 the Audit of Cost Account related to Textile product is beingcarried out every year. The Board of Directors have based on the recommendation of theAudit Committee appointed M/s. N. Ritesh & Associates Cost Accountant Mumbai(Membership No. M/26963) to audit the cost accounts of the Company for the year endedMarch 31 2019 on a remuneration of fixed between the Board and Cost Auditor. As requiredunder the Act necessary resolution seeking members ratification for the remunerationpayable to M/s. N. Ritesh & Associates is included as item Number 6 of the Noticeconvening 28th Annual General Meeting.
Mr. Vishal Manseta Practicing Company Secretaries was appointed to conduct thesecretarial audit of the company for the Financial Year 2018-19 as required under Section204 of the Companies Act 2013 and Rules thereunder. The secretarial audit report for FY2018-19 forms part of the Annual Report as "Annexure F" to the BoardReport.
M/s. Sunil Kudwa & Co. Chartered Accountants (Firm Registration No. 123657W) wereappointed as internal auditors of the Company for the F.Y. 2018-2019.
Their appointment as an internal Auditor for the Financial Year 2019-20 has beenapproved in the meeting of the Board of Directors held on May 30 2019.
26. INTERNAL FINANCE CONTROL
The Board has adopted system of internal control to ensuring the orderly and efficientconduct of its business including adherence to the Company's Policies the safeguardingof its assets the prevention and detection of fraud and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures. The Company is in the process of strengthening its Internal Financial ControlSystem considering present financial situation and other recent developments.
27. HUMAN CAPITAL AND PARTICULARS OF EMPLOYEES
Your company had 485 employees as on March 31st 2019.
The statement containing the particulars of employees as required under Section 197(12)of the Companies Act 2013 read along with Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is not applicable tothe company as no employees were in receipt in remuneration above the limits specified inRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.
The details required as per Section 197(12) of the Companies Act 2013 read along withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed as "Annexure G" and forms part of this report.
28. SHARE S
a. BUY BACK OF SECURITIES
The Company has not bought back any of its securities during the year under review.
b. SHARES WITH DIFFERENTIAL VOTING RIGHTS
The company has not issued equity shares with differential voting rights during theperiod under review.
c. SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year under review.
d. BONUS SHARES
No Bonus Shares were issued during the year under review.
e. EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to the employees.
29. CORPORATE GOVERNANCE
Your Company has complied with the Corporate Governance requirements as per theRegulation 27(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.A separate report on Corporate Governance alongwith a Certificate of Compliance fromthe Auditors forms a part of this report.
30. COMPLIANCE OF SECRETARIAL STANDARDS
The Company is in compliance with all applicable Secretarial Standard issued by theInstitute of Company Secretaries of India.
Your Directors place on record their sincere thanks to lenders business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS For SHEKHAWATI POLY-YARN LIMITED
| || ||Sd/- ||Sd/- |
| || ||Mukesh Ruia ||Ravi Jogi |
|Date ||: August 12 2019 ||Chairman & Managing Director ||Whole Time Director |
|Place ||: Mumbai ||(DIN : 00372083) ||(DIN : 06646110) |