Sheshadri Industries Ltd.
|BSE: 539111||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE193R01019|
|BSE 00:00 | 30 Aug||4.22||
|NSE 05:30 | 01 Jan||Sheshadri Industries Ltd|
Sheshadri Industries Ltd. (SHESHADRIINDUS) - Director Report
Company director report
We have pleasure in presenting the 8th Annual Report on the business andoperations of Company and Financial Results for the year ended 31st March 2017.
1. FINANCIAL RESULTS
Rs. In lakhs
During the year under review the company achieved total turnover of Rs.6172.65 Lakhswhich is lower than that of the previous year. The operations in the year have ended in aloss of Rs.1655.11 Lakhs as against loss of Rs. 283.91 Lakhs in previous year. TheCompany's operations have been affected due to economic slowdown and recessionaryconditions insufficient working capital funds pending sanction of the restructuringfacilities from banks the excess capacity in the industry mismatch of cotton yarn andraw cotton prices and huge raw material fluctuations. Demonetization of high valuecurrency and over dependence on yarn exports to china has also adversely affected thecompany during the year.
From past 3 years Company is focusing on expansion programme for which machineries ofthe companies are re-located within the organization's manufacturing facilities causingdisruption in productions.
3.CHANGE IN SHARE CAPITAL
There are no Changes in Share Capital of the Company during the year under review.
In view of losses incurred by the Company during the year under review the Board isunable to recommend dividend.
During the year under review the company's exports were Rs. 28.43 Crores as against Rs.47.00 Crores of the previous financial year. The decrease in exports was due to adverseglobal market conditions coupled with fluctuation in foreign currency.
6.EXPANSION & MODERNISATION
Modernization and technological up-gradation programs have been completed by theCompany to maintain competitiveness and achieve better quality. The benefits of the aboveschemes are expected to be accured in the next financial year onwards. Stringent costcontrol measures remain in place in all possible areas and are regularly reviewed.
7. FUTURE OUTLOOK
Company is focusing on value addition in 100% grey yarns and concentrating to increasethe production of Slub Yarns Injection Yarn Vario Syro Yarns E Melanges PerformanceYarns i.e Thermo light Feel Fresh Cationic Green Gold Super Micro Ploy/ model.
The Company focuses on allocation of spindles on Man-made fibre to mitigate cottonprice fluctuations and also for high quality griege yarns. This will help in improving theprospects of the company in the coming years.
8. CORPORATE GOVERNANCE
The report on Corporate Governance is not being enclosed to this report in view of therelaxation under regulation 15(2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 read with Schedule V of SEBI (Listing Obligations and DisclosureRequirements) 2015 is presented in a separate section forming part of the Annual Reportas Annexure -V.
10. ENVIRONMENT AND POLLUTION CONTROL
The manufacturing facilities have obtained environmental clearance from the PollutionControl
Board concerned and are in compliance with all current environmental legislation. As anintegral part of its environment protection drive the Company ensures the very minimumquantity of generation of waste low emission levels and low noise pollution levels duringoperations of all manufacturing facilities.
11.DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. APPOINTMENTS AND RESIGNATIONS
During the year under review Sri Badrinarayan Agarwal Chairman has resigned fromboard with effect from 15th May 2017 due to health issues. The Board recordsits appreciation for the services rendered by him from the inception. the board alsowishes him a peaceful retired life.
The necessary Resolution for obtaining the approval of Members for the re-appointmentof Sri Jeetender Kumar Agarwal (DIN No. 00041946) as Managing Director for the period ofthree years have also been included in notice for the ensuing Annual General Meeting.
B.RETIREMENT BY ROTATION
Pursuant to the provision of Section 152 of the Companies Act 2013 Sri JeetenderKumar Agarwal (DIN No. 00041946) Director will retire at the ensuing Annual GeneralMeeting and being eligible offers himself for reappointment. The Board recommends hisreappointment.
C. EVALUATION OF THE BOARD'S PERFORMANCE
In compliance with the Companies Act 2013 and as per the Listing Regulations theperformance evaluation of the Board and of its Committee was carried out during the yearunder review.
The Directors evaluation was broadly based on the parameters such as understanding ofthe Company's vision and objective skills knowledge and experience participation andattendance in Board/ Committee meetings; governance and contribution to strategy;interpersonal skills etc.
The Board has carried out the annual performance evaluation of its own performance theDirectors individually as well as evaluation
of the working of its Board Committees. A structured questionnaire was preparedcovering various aspects of the Board's functioning such as adequacy of the composition ofthe Board and its Committees Board Culture execution and performance of specific dutiesobligations and governance.
A meeting of the Independent Directors was also held which reviewed performance ofnon-independent directors performance of the board as a whole and performance of thechairman after taking in to account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent directors at which the performance of the board its committees andindividual directors was also discussed. Performance evaluation of independent directorswas done by the entire board excluding the independent director being evaluated.
D.DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors of the Company have given declaration stating that theymeet the criteria of independence as provided under Companies Act 2013.
E.FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS
The Company has formulated a familiarization program for Independent Directors toprovide insights into the Company's manufacturing marketing finance and other importantaspects to enable the Independent Directors to understand its business in depth andcontribute significantly to the Company. The Company Secretary briefs the Director abouttheir legal and regulatory responsibilities as a Director. The details of such program areavailable on the Company's website
12. BOARD AND THEIR COMMITTEES
1. BOARD OF DIRECTORS
a) Composition and provisions as to Board and Committees:
As on 31st March 2017 the Company's Board of Directors comprises of 5(Five) Directors. Of these 2 (two) are Promoter
Directors and 3 (three) are Independent Directors. The Chairman was NonExecutivePromoter Director who has resigned from the company with effect from 15th May2017.
The Board of Directors of the Company met Four (4) times during the year i.e on30.05.2016 09.08.2016 14.11.2016 and 14.02.2017
b) Disclosure of relationships between directors inter-se:
Except for Sir Badrinarayan Agarwal and Sir Jeetender Kumar Agarwal being father andson there is no inter-se relationship between other Board Members.
2. AUDIT COMMITTEE
The Audit Committee comprises Sri Surender Kumar Agarwal (Chairman) Sri Manish Guptaand Sri Jeetender Kumar Agarwal as other members. All the recommendations made by theAudit Committee were accepted by the Board.
During the financial year ended March 312017 - Four (4) Audit Committee Meetings wereheld on 30.05.2016 09.08.2016 14.11.2016 and 14.02.2017
3. NOMINATION & REMUNERATION COMMITTEE
The company follows a policy on Remuneration of Directors and Senior ManagementEmployees. The policy is approved by the Nomination & Remuneration Committee and theBoard.
The Nomination and Remuneration Committee comprises of Sri Surender Kumar Agarwal(Chairman) Sri Manish Gupta and Smt Sushma Gupta as other members. All therecommendations made by the Nomination and Remuneration Committee were accepted by theBoard.
No Nomination & Remuneration Committee Meetings were held during the financialyear ended March 312017
4. STAKEHOLDERS' RELATIONSHIP COMMITTEE
Ybur company has constituted a Stakeholders' Relationship Committee to specificallylook into
the mechanism of redressal of grievances of shareholders and other security holders.
Sri Surender Kumar Agarwal (Chairman) is the Non-Executive Director heading theCommittee and Mr. B. Rama Subba Reddy Vice President (Corp. Affairs) & CompanySecretary is the compliance office of the Company
There are no pending complaints during the year under review.
13. AUDITORS & AUDITORS' REPORT
A. STATUTORY AUDITORS
As the members are aware M/s Brahmayya & Co. Chartered Accountants Hyderabad(ICAI Firm Regn. No.0005l3S) have been the Company's Statutory Auditors since years. Inaccordance with section 139 of the Companies Act 2013 and rules made there under theCompany is required to appoint a new firm of Auditors for a term of five consecutive yearsfrom the conclusion of the ensuing Annual General Meeting.
Accordingly the Company proposes to appoint M/s K.S. Rao & Co. CharteredAccountants Hyderabad (ICAI Firm Regn. No.003109S) in place of M/s Brahmayya & Co.as its Statutory Auditors. The Board wishes to place on record its appreciation of theservices rendered by M/s Brahmayya & Co. Chartered Accountants in its longassociation with the Company.
M/s K.S.Rao & Co. Chartered Accountants have expressed their willingness to beappointed as the Statutory Auditors of the company and furnished the certificate of theireligibility and consent for the same under Section l4l of the Companies Act 2013 and therules framed thereunder in terms of the Listing Regulations the Auditors have confirmedthat they hold a valid certificate issued by the Peer Review Board of the ICAI. The Boardbased on the recommendation of the Audit Committee recommends the appointment of M/sK.S.Rao & Co. Chartered Accountants as the Statutory Auditors of the company. TheAuditors' Report to the Shareholders for the year under review does not contain anyqualification.
However In respect of the observation made by the Statutory Auditors in Annexure-A totheir report at Para 7(a) Para 8 and at note No.26 in notes to accounts the managementis of the considered opinion based on their discussions with the banks / financialinstitutions that with the implementation of restructuring of the loans and arehabilitation package being worked out the operations of the company will be normalizedand the company will be able to meet its liabilities to the banks and discharge itsstatutory dues in the near future.
With reference to auditors observations on note No.36 to the financial statements theBoard considers the note itself is self-explanatory.
B. SECRETARIAL AUDITOR
During the year the Company has appointed M/s NVVS Suryanarayana Rao PracticingCompany Secretaries as Secretarial Auditor in compliance with the provision of Section 204of the Companies Act 2013. The Secretarial Audit report in form MR-3 for the financialyear ended 31st March 2017 is annexed herewith as Annexure I to this Report.The Secretarial Audit Report does not contain any qualification or adverse remark.
However In respect of the observation made by the Secretarial Auditors in theirreport the management is of the considered opinion based on their discussions with thebanks / financial institutions that with the implementation of restructuring of the loansand a rehabilitation package being worked out the operations of the company will benormalized and the company will be able to meet its liabilities to the banks and dischargeits statutory dues in the near future.
14. DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
15. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm'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.
The Policy on materiality of related party transactions as approved by the Board may beaccessed on the Company's website at http://www.sheshadri.in/policies.html
Your Directors draw attention of the members to Note 31 to the financial statementwhich sets out related party disclosures. Particulars of Contracts or Arrangements withRelated parties referred to in Section 188(1) in Form AOC- 2 is enclosed to this report inAnnexure IV.
16. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo required to be given pursuant to the provision of Section 134of the Companies Act 2013
read with the Companies (Account) Rules 2014 is annexed hereto and marked Annexure IIand forms part of this Report.
17. 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 operation was observed.
18. POLICY ON SEXUAL HARASSMENT:
The Company has in place a policy on Prevention of Sexual Harassment of Employees atworkplace in accordance with The Sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Internal Compliant Committee has been set to redresscomplaints received regarding sexual harassment.
During the year under review the Company has not received any complaints pertaining tosexual harassment.
19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The Company has not made any loan given guarantee or provided security pursuant to theprovisions of Section 186 of Companies Act 2013.
A. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure III to thisReport.
B. WHISTLE BLOWER POLICY
The Company has in place a Whistle Blower Policy for vigil mechanism for the directorsand employees to report genuine concerns to the management about unethical behaviorfraud violation of Company's code of conduct and provides adequate safeguards againstvictimization of persons who use such mechanism. The Policy on vigil mechanism may beaccessed on the Company's website at the link there were no complaints received during theyear 2016-17.
The Company confirms that it has paid listing fees for the year to BSE Limited whereits shares are listed.
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. Details relating to deposits covered under Chapter V of the Act.
b. The Company has no subsidiaries joint ventures or associate companies.
c. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
The Board of Directors is pleased to place on record their appreciation of theco-operation and support extended by All India Financial Institutions Banks and variousState and Central Government Agencies.
The Board would also like to thank the Company's shareholders customers suppliers forthe support and the confidence which they have reposed in the management. The Board placeon record its appreciation of the contribution made by the employees at all levels fortheir hard work solidarity co-operation and support.
By order of the Board
For Sheshadri Industries Limited
Jeetender Kumar Agarwal
Place : Secunderabad
Surender Kumar Agarwal
Date : 01.09.2017