SHESHADRI INDUSTRIES LIMITED
We have pleasure in presenting the 12th Director Report on the business andoperations of Company and Financial Results for the year ended 31st March 2021.
1. STATE OF AFFAIRS & FINANCIAL PERFORMANCE
Rs. In lakhs
| ||2020-2021 ||2019-2020 |
|Turnover Revenue ||3211.16 ||1383.01 |
|Gross Profit before financial charges & depreciation ||425.98 ||(256.26) |
|Less: Depreciation ||210.84 ||236.45 |
|Financial charges ||323.41 ||418.79 |
|Exceptional items ||50.51 ||736.14 |
|Profit / (Loss) before taxation ||(108.27) ||(911.50) |
|Tax expenses ||117.32 ||- |
|Profit / (Loss) after taxation ||(175.09) ||(175.36) |
During the year under review the company achieved total turnover of Rs. 3211.16 Lakhswhich is higher than that of the previous year. The operations in the year have ended in aloss of Rs. 175.09 Lakhs as against loss of Rs. 175.36 lakhs in previous year. TheCompany's operations have been affected due to COVID-19 pandemic and insufficient workingcapital funds.
The company started operations of its Spinning & Knitting divisions at its unitssituated at Rajna Pandhurna Chindwara Madhya Pradesh 480 340 and its Garmentsdivisions at its units situated at Aliabad Shamirpet Mandal Medchal district w.e.f 01stDecember 2020..
3. CHANGE IN THE NATURE OF BUSINESS IF ANY:
There was no change in nature of business activity during the year.
4. CHANGE IN SHARE CAPITAL
There are no Changes in Share Capital of the Company during the year under review.
5. REVISION OF ANNUAL FINANCIAL STATEMENTS
There was no case of revision in financial statement during the year.
Your Directors do not propose to carry any amount to General Reserve Account as theCompany has incurred losses during the financial year.
In view of losses incurred by the Company during the year under review and havingregard to its financial position the Board does not recommend any dividend for the yearended 31st March 2021.
8. FUTURE OUTLOOK
The Company future outlook is challenging in future in view of change in operations andshortage of working capital funds.
9. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR
There were no material changes and commitments in the company after the end of thefinancial
10. 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.
11. 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 IV.
12. LISTING AT STOCK EXCHANGE
The Equity shares of the Company are listed on Bombay Stock Exchange Limited Mumbai.
13. 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 an integral part of its environment protection drive the Company ensures the veryminimum quantity of generation of waste low emission levels and low noise pollutionlevels during operations of all manufacturing facilities.
14. DEPOSITORY SYSTEM
Your Company's shares are tradable compulsorily in electronic form and your Company hasconnectivity with both the Depositories i.e. National Securities Depository Limited (NSDL)and Central Depository Service (India) Limited (CDSL). As per the SEBI (ListingObligations & Disclosure Requirements)
(Fourth Amendment) Regulations 2018 vide Gazette notification dated June 8 2018& 30th November 2018 mandated that Share transfer shall be mandatorily carried out indematerialized form only w.e.f. from April 1 2019. In view of the numerous advantagesoffered by the Depository System members are requested to avail the facility ofDematerialization of the Company's shares on either of the Depositories mentioned asaforesaid.
15. DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. RETIREMENT BY ROTATION
Pursuant provision of Section 152 of the Companies Act 2013 Sri Jeetender KumarAgarwal (DIN 00041946.) Director will retire at the ensuing Annual General Meeting andbeing eligible offers himself for re-appointment. The Board recommends hisre-appointment.
Pursuant to section 149 of Companies Act 2013 Smt. Sushma Gupta was reappointedas an Independent director of the company to hold the office for the second term of 5consecutive years in the previous Annual general meeting of the company held on December2 2020. Pursuant to section 149 of Companies Act 2013 Shri Manish Gupta wasappointed as an Independent director of the company to hold the office for the term of 5consecutive years in the previous Annual general meeting of the company held on December2 2020.
Pursuant to section 149 of Companies Act 2013 Shri Uttam Gupta was appointed asan Independent director of the company to hold the office for the term of 5 consecutiveyears in the previous Annual general meeting of the company held on December 2 2020.
Mr. Surender Kumar Agarwal resigned from the post of Additional Director under thecategory of Independent Director of the company w.e.f. July 28 2020.
D. 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 asunderstanding of the Company's vision and objective skills knowledge and experienceparticipation and attendance in Board/ Committee meetings; governance and contribution tostrategy; 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. Astructured questionnaire was prepared covering various aspects of the Board's functioningsuch as adequacy of the composition of the Board and its Committees Board Cultureexecution and performance of specific duties obligations 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.
E. DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of your Company have given a declaration pursuant to Section149(7) of the Companies Act 2013 and
Regulation 25(8) SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 affirming compliance to the criteria of
Independence as laid down under Section 149(6) of the Companies Act 2013 andRegulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
Based on the declaration(s) of Independent Directors the Board of Directors recordedits opinion that all Independent Directors are independent of the Management and havefulfilled the conditions as specified in the Companies Act 2013 and the Rules made thereunder. Independent Directors are not liable to retire by rotation in terms of Section149(13) of the Act.
F. 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 details of such program are available on theCompany's website (www.sheshadri.in)
G. KEY MANAGERIAL PERSONNEL:
Pursuant to the Section 203 of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. The Key ManagerialPersonnel of the Company as on March 31 2021 are:
Mr. Jeetender Kumar Agarwal Managing Director & Chief Financial Officer
Ms. Neha Jain Company Secretary & Compliance Officer
H. DISQUALIFICATIONS OF DIRECTORS
During the year declarations have been received from the Directors of the Companypursuant to Section 164 of the Companies Act 2013. The Board appraised the same and foundthat none of the director is disqualified for holding office as director.
16. BOARD AND THEIR COMMITTEES
1. BOARD OF DIRECTORS a) Composition and provisions as to Board and Committees:
As on 31st March 2021 the Company's Board of Directors comprises of 4(Four) Directors. Of these 1 (One) is Promoter Directors and
3 (three) are Independent Directors. The Chairman is an Executive Director.
The Board of Directors of the Company met Five (5) times during the year i.e. on12.08.2020 15.09.2020 28.09.2020 13.11.2020 and 13.02.2021.
(*Resignation of Sri Surender Kumar Agarwal from Independent Director post w.e.f.28.07.2020 and Appointment of Sri Uttam Gupta as an Additional Independent Director in theCompany's Board of Directors w.e.f. 28.09.2020) b) Disclosure of relationshipsbetween directors inter-se:
There is no inter-se relationship between Board Members.
2. AUDIT COMMITTEE
The Audit Committee comprises Sri Surender Kumar Agarwal (Chairman) upto 28.07.2020Sri Manish Gupta Sri Jeetender Kumar Agarwal and Sri Uttam Gupta w.e.f 28.09.2020 asother members. All the recommendations made by the Audit Committee were accepted by theBoard.
During the financial year ended March 31 2021
The Audit Committee met 4 (Four) times on 12.08.2020 15.09.2020 13.11.2020 and13.02.2020.
(*Mr. Surender Kumar Agarwal resigned & ceased to be member of the committee w.e.f.28.07.2020 and Mr. Uttam Gupta appointed as an Additional Independent Director and memberof the Audit Committee w.e.f. 28.09.2020.)
3. NOMINATION & REMUNERATION COMMITTEE
The Nomination & Remuneration Committee comprises of Sri Surender Kumar Agarwal(Chairman) upto 28.07.2020 Sri Manish Gupta Smt. Sushma Gupta and Sri. Uttam Guptaw.e.f. 28.09.2020 as other members. All the recommendations made by the Nomination &Remuneration Committee were accepted by the Board.
During the financial year ended March 31 2021 the Nomination and RemunerationCommittee met twice on 15.09.2020 and 28.09.2020.
(*Mr. Surender Kumar Agarwal resigned & ceased to be member of the committee w.e.f.28.07.2020 and Mr. Uttam Gupta appointed as an Additional Independent Director and memberof the Nomination and Remuneration Committee w.e.f. 28.09.2020.)
4. STAKEHOLDERS' RELATIONSHIP COMMITTEE
Your company has constituted a Stakeholders' Relationship Committee to specificallylook into the mechanism of redressal of grievances of shareholders and other securityholders. The Stakeholders Relationship Committee comprises of Sri. Surender Kumar Agarwalupto 28.07.2020 Sri. Jeetender Kumar Agarwal Sri. Manish Gupta and Sri. Uttam Guptaw.e.f 28.09.2020.
Sri Surender Kumar Agarwal (Chairman) 16 was the Non-Executive Director heading theCommittee.
During the financial year ended 31st March 2021 the stakeholdersRelationship Committee met twice on 12.08.2020 and 15.09.2020. Details of the complaintreceived and redressed during the year under review are as follows:
|1 No. of Complaints pending at the beginning of the year ||NIL |
|2 No. of Complaints received during the Year ||NIL |
|3 Number not solved to the satisfaction of shareholders ||NIL |
|4 Number of pending complaints ||NIL |
(*Mr. Surender Kumar Agarwal resigned & ceased to be member of the committee w.e.f28.07.2020 and Mr. Uttam Gupta appointed as an Additional Independent Director andmember of the Stakeholders Relationship Committee w.e.f. 28.09.2020.)
5. SEPARATE MEETING OF INDEPENDENT DIRECTOR:
During the year under review a separate meeting of Independent Directors was held on13.02.2021.
17. NOMINATION AND REMUNERATION POLICY
The Board on the recommendation of the Nomination & Remuneration Committee framed apolicy for selection and appointment of Directors Senior Management and theirremuneration as required under Sec 178 of the Companies Act 2013 and Regulation 19(4)read with Schedule II of the SEBI (Listing Obligations and Disclosures
Requirements) Regulations 2015
18. OTHER MANAGEMENT POLICES
The following policies are placed in company's website at http://www.sheshadri.in
Policy for determination of materiality
Policy on code of conduct
Policy on Code of Fair disclosure
19. AUDITORS & AUDITORS' REPORT
A. STATUTORY AUDITORS
M/s K.S. Rao & Co. Chartered Accountants Hyderabad (ICAI Firm Regn. No.003109S)were appointed as Statutory Auditors in the AGM held on 29th September 2017 fora period of 5 years until the conclusion of 13th AGM.
The Company has received a certificate from the auditors confirming that theirappointment is in accordance with Section 139 read with Section 141 of the Act.
Ministry of Corporate Affairs vide its notification dated May 7 2018 has done awaywith the requirement of seeking ratification of appointment of statutory auditors bymembers at each AGM. Accordingly no such item has been considered in notice of the 12thAGM.
Explanation to Auditor's Remark
Following are the replies / clarifications in respect of the observations made by thestatutory auditor in their audit report.
The management would like to clarify that the cotton trading activity was done bypurchasing cotton when the cotton prices were lowest due to pandemic by purchasing from acotton trader against a confirmed contract of Cotton Corporation of India with extendeddelivery terms. Subsequently when the cotton prices increased the cotton was sold to thesame group who has cotton spinning mills in India. The transactions were bonafide on partof all the entities involved.
. The management is of the considered opinion that the interest provided towards duespayable to Union Bank of India towards One time Settlement scheme or compromise proposalwhich the company has entered with Union Bank of India due to COVID-19 the company couldnot make 100% payment on or before 31.03.2020. The company has already made arepresentation to the bank for extending the period of One Time Settlement. The companyhas provided interest of Rs. 157.97
Lakhs upto 31.03.2021. The company has not provided interest of Rs.679.51
Lakhs towards interest on outstanding loans since the account become NPA.
The management is confident that the compromise proposal/ one time Settlement enteredwith Union Bank of
India would be amicably completed..
During the year due to COVID-19 restrictions the company was working with limitedstaff and on work from home policy. Thus we were unable to get the records in the books ofaccounts. Management would like to assure you that they have periodically carried out theverification of records and reconciled the books on timely basis.
Reporting of fraud by Statutory Auditors
There was no fraud in the Company which was required to be reported by statutoryauditors of the Company under sub-section (12) of section 143 of Companies Act 2013.
B. SECRETARIAL AUDITOR
During the year the Company has appointed M/s Yellapragada and Associates PracticingCompany Secretaries as Secretarial Auditor in compliance with the provision of Section 204of the Companies Act 2013 and Rule 9 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 The Secretarial Audit report in form MR-3 for thefinancial year ended 31 st March 2021 is annexed herewith as Annexure Ito this Report. The Secretarial Audit Report does not contain any qualification or adverseremark.
C. INTERNAL AUDITOR
In compliance with the provisions of Section 138 of the Act read with Rule 13(1)(a) ofCompanies (Accounts) Rules 2014. The Board of Directors of the Company has appointed
M/s. SLR & Associates Chartered Accountant as Internal Auditors to conductInternal Audit of the Company for the Financial Year ended 31st March 2021.
20. 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 annualaccounts the applicable accounting standards had been followed along with properexplanation 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 withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
21. 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 made by the Company with Promoters Directors Key Managerial Personnel orother designated persons which may have a potential conflict with the interest of theCompany 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 Directorsdraw attention of the members to
Note 35 to the financial statement which sets out related party disclosures.Particulars of Contracts or Arrangements with related parties referred to in Section188(1) in Form AOC- 2 are enclosed to this report in Annexure III.
22. 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 heretoand marked Annexure II and forms part of this Report.
23. INTERNAL FINANCIAL CONTROLS
The Company has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information.
The Company has in place adequate internal financial controls with reference tofinancial statements.
The Company's internal control systems including internal financial controls arecommensurate with the nature of its business and the size and complexity of its operationsand the same are adequate and operating effectively. These systems are periodically testedand no reportable material weakness in the design or operation was observed. The AuditCommittee reviews adequacy and effectiveness of the Company's internal control systemincluding internal financial controls.
24. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
related party transactions
The information required pursuant to Section 197(12) of Companies Act 2013 read withRule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of the employees of the Company will be provided uponrequest. In terms of Section 136 of the Act the Report and Accounts are being sent to themembers and others entitled thereto excluding the information on employees' particularswhich is available for inspection by the members at the
Registered Office of the Company during business hours on working days of the Companyupto the date of the ensuing Annual General Meeting. If any member is interested inobtaining a copy thereof such member may write to the Company Secretary in this regard.
25. 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.
26. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The Company has not given any loan or guarantee or provided security pursuant to theprovisions of Section 186 of Companies Act 2013.
A. ANNUAL RETURN
Annual Return of the Company as on 31st March 2021 in accordance with Section 92(3)Section 134(3)(a) of the Companies Act 2013 read with Companies (Management andAdministration) Rules 2014 can be accessed from http://www. sheshadri.in/financials.
B. Vigil Mechanism
The Company has a Whistle Blower Policy'/Vigil Mechanism' in place. Theobjective of the Vigil Mechanism is to provide the employees Directors customerscontractors and other stakeholders of the Company an impartial and fair avenue to raiseconcerns and seek their redressal in line with the Company's commitment to the highestpossible standards of ethical moral and legal business conduct and fair dealings with allits stakeholders and constituents and its commitment to open communication channels. TheCompany is also committed to provide requisite safeguards for the protection of thepersons who raise such concerns from reprisals or victimization for whistle blowing ingood faith. The Board of Directors affirms and confirms that no personnel have been deniedaccess to the Audit Committee. The Policy contains the provision for direct access to theChairman of the Audit Committee in appropriate or exceptional cases.. The Policy on vigilmechanism cum Whistle Blower may be accessed on the Company's website at the link:http://www.sheshadri.in there were no complaints received during the year 2020-21
C. Risk Management
The Company recognizes that risk is an integral and unavoidable component of businessand is committed to managing the risk in a proactive and efficient manner. The Company aspart of business strategy has in place a mechanism to identify assess monitor risks andmitigate various risks with timely action.
28. COMPLIANCE OF SECRETARIAL STANDARD
The Company has complied with all the applicable Secretarial Standards issued by TheInstitute of Company Secretaries of India and notified by the Central Government
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 nosubsidiaries joint ventures or associate companies. c. The Company is not required tomaintain cost records under Section 148(1) of the Companies Act 2013. d. During the yearunder review the Company has not given loan to any employee for purchase of its own sharesas per section 67(3) (c) of Companies Act 2013. e. The Company has not issued sharesunder employee's stock options scheme pursuant to provisions of Section 62 read with Rule12 of Companies (Share Capital and Debenture) Rules 2014. f. The Company has not issuedsweat equity shares pursuant to provisions of Section 54 read with Rule 8 of Companies(Share Capital and Debenture) Rules 2014 & SEBI (issue of sweat equity) Regulations2002 during the Financial Year. g. The Business Responsibility Reporting as required byRegulation 34(2) of the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 is not applicable to your Company for the financial year ending March31 2021.
h. No significant by the Regulators or Courts or Tribunals which impact the goingconcern status and Company's operations in future. i. Details in respect of fraudsreported by the Auditors under section 143(12) other than those which are reportable tothe Central Government as there were no such frauds reported by the Auditors.
The Board of Directors is pleased to place on record their appreciation of theco-operation and support extended by All Financial Institutions Banks and various Stateand Central Government Agencies.
The Board would also like to thank the Company'sor material orders were passedshareholders customers suppliers for the support and the confidence which they havereposed in the management. The Board place on record its appreciation of the contributionmade by the employees at all levels for their hard work solidarity co-operation andsupport.
| ||By order of the Board |
| ||For Sheshadri Industries Limited |
| ||Jeetender Kumar Agarwal |
| ||Managing Director |
| ||DIN: 00041946 |
| ||Manish Gupta |
|Place: Secunderabad ||Director |
|Date: 14.08.2021 ||DIN: 00526638 |