The Board of Directors are pleased to present the Company's Thirty Fifth Annual Reportand the Company's audited financial statements for the financial year ended March 312020.
1. FINANCIAL RESULTS
The Company's financial performance for the year ended March 312020 is summarizedbelow:
|Particulars ||2019-20 ||2018-19 |
|Sales & Other Income ||88508.74 ||97805.94 |
|Total Expenditure excluding finance cost & depreciation ||81577.82 ||90514.76 |
|Earning before Finance Cost Depreciation & Tax ||6930.92 ||7291.18 |
|Less: Finance Cost ||4430.17 ||4358.97 |
|Depreciation & Amortization Expenses ||787.59 ||729.86 |
|Profit before Tax and extraordinary items ||1713.16 ||2202.35 |
|Exceptional & Extraordinary items ||- ||- |
|Profit before Tax ||1713.16 ||2202.35 |
|Current Tax ||(486.00) ||(650.00) |
|Deferred Tax ||75.56 ||(179.41) |
|Tax Relating to Earlier Year Tax ||(123.49) ||- |
|Profit (Loss) for the Year ||1179.23 ||1372.94 |
|Basic & Diluted Earnings Per Equity Shares of Face Value of Rs. 10/- each. (In Rs.) ||3.88 ||4.66 |
2. OVERVIEW OFTHE FINANCIAL PERFORMANCE
The Company during the year under review has registered Total Income of Rs. 88508.74lacs as against Rs. 97805.94 lacs in the previous year. The Sale in Manufacturing Segmentincreased to Rs.456.22 Cr.Lacs during the financial year 19-20 as against Rs. 413.87 Cr inthe previous year. However the trading sales reduced to Rs. 425.65Cr during the financialyear 19-20 as against Rs. 560.84Cr in the previous year.The Company has earned ProfitBefore Tax amounting to Rs. 1712.16lacsduring the year under review as against Rs.2202.35lacsin the previous year. Net profit after tax for the current year is Rs.1179.23lacs as compared to Rs. 1372.94 lacs in the previous year.
The company continues to retain and reinforce its market leadership in the allocatedsegments in which it operates. There are no material changes or commitments affecting thefinancial position of the company which have occurred between the end of the financialyear and the date of this report other than the impact of Covid-19 on business operationsof the company detailed in this report. The demand was affected due to COVID-I9 Pandemic.
The Board considering the Company's performance and financial position for the yearunder review recommended a dividend pay-out of Rs. 0.5 per equity shares for the yearended 2019-20 subject to approval from the shareholder at the ensuing AGM.
Together with the Dividend distribution tax the total outflow on account of equitydividend will be Rs.177.43 lacs (inclusive of Dividend Distribution Tax)
The dividend on equity shares if approved at the Annual General meeting will bepayable to thoseshareholders whose name appear on the Company's Register of member.
4. BOARD OF DIRECTORS
a. Directors & Key Managerial Personnel
During the year -
Mr. Sanjay Chourey (DIN:08523962) was appointed as an Independent Director w.e.f. 7thAugust 2019.
Ms. NishthaNeema (DIN:01743710) retired from the post of independent director w.e.f.30th September 2019.
Appointments and Confirmation of Additional Director: The Company on recommendationof Nomination and Remuneration Committee and in its Board Meeting dated August 14th 2020had appointed Mrs. Reshma Lalwani (DIN:08834929) as an Additional Director underIndependent category of the Company with effect from August 14th 2020for a period of 5years not liable to retire by rotation.The confirmation of her forms part of the noticeconvening 35th Annual General Meeting.
Re-appointments : In accordance with the Articles of Association of the Company andSection 152 of The Companies Act 2013 Mr. SaurabhSangla (DIN: 00206069) Non-ExecutiveDirector is due to retire by rotation at the ensuing Annual General Meeting and beingeligible offer himself for re-appointment.
b. Number of meeting of Board of Directors
The Board of Directors met thirteen (13) times during the Financial Year under reviewviz
|S.No. ||Date of Meeting |
|1 ||10-04-2019 |
|2 ||30-05-2019 |
|3 ||18-07-2019 |
|4 ||07-08-2019 |
|5 ||07-09-2019 |
|6 ||10-09-2019 |
|7 ||31-10-2019 |
|8 ||14-11-2019 |
|9 ||01-01-2020 |
|10 ||23-01-2020 |
|11 ||13-02-2020 |
|12 ||06-03-2020 |
|13 ||30-03-2020 |
The maximum gap between any2 meetings did not exceed 120 days.
c. Independent Directors and their Meeting
Your Company has received annual declarations from all the Independent Directors of theCompany confirming that they meet with the criteria of Independence provided in Section149(6) of the Companies Act 2013 and Regulations 16(1)(b) & 25 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and there has been no change inthe circumstances which may affect their status as Independent Director during the year.
The Independent Directors met on 11th February 2020 without the attendance ofNon-Independent Directors and members of the Management. The Independent Directorsreviewed the performance of NonIndependent Directors and the Board as a whole; theperformance of the Chairman of the Company taking into account the views of ExecutiveDirectors and Non-Executive Directors and assessed the quality quantity and timeliness offlow of information between the Company Management and the Board that is necessary for theBoard to effectively and reasonably perform their duties.
d. Familiarization programme for Directors
The Company conducts Familiarization Programme for the Independent Directors to enablethem to familiarize with the Company its Management and its operations so as to gain aclear understanding of their roles rights and responsibilities for the purpose ofcontributing significantly towards the growth of the Company. They are given fullopportunity to interact with Senior Management Personnel and are provided with all thedocuments required and/or sought by them to have a good understanding of the Company itsbusiness model and various operations and the industry of which it is a part.
e. Performance Evaluation of Board Committee and Directors
In accordance with applicable provisions of The Companies Act 2013 and ListingRegulations the evaluation of the Board as a whole committees and all the Directors wasconducted as per the internally designed evaluation process approved by the Board. Theevaluation process inter alia considers attendance of Directors at Board and committeemeetings acquaintance with business communicating inter se board members effectiveparticipation domain knowledge compliance with code of conduct vision and strategy. Theevaluation tested key areas of the Board's work including strategy business performancerisk and governance processes. The evaluation considers the balance of skills experienceindependence and knowledge of the management and the Board its overall diversity andanalysis of the Board and its Directors' functioning.
The report on performance evaluation of the Individual Directors was reviewed by theChairman of the Board and feedback was given to Directors.
f. Audit Committee & Composition
The Audit Committee comprises Independent Directors namely:
Mr. Sanjay Chourey (*Chairman)
Mr. Mayank Shrivas (Member)
Mr. Mukesh Sangla (Member)
Ms. Palak Malviya (Member)
* Mr Sanjay Chourey was appointed on the Board w.e.f 7th August 2019.
**Ms. Nishtha Neema retired from the Board w.e.f 30th Septemeber 2019
g. Director Responsibility Statement
Your Directors state that:
a) in the preparation of the annual accounts for the year ended March 31 2020 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
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 as at March 312020and of the profit ofthe Company for the year ended on that date;
c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the 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 are operatingeffectively; and
f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
a. Particulars of Loans Guarantees or Investments:
The particulars of loans guarantees and investments as on 31st March 2020 are coveredunder the provisions of Section 186 of The Companies Act 2013 is given in the Notes toFinancial statements of the Company.
b. Related Party Transactions
In line with the requirements of the Companies Act 2013and Listing Regulations yourCompany has formulated a Policy on Related Party Transactions which is also available onhttp: //www.groupsignet.com/inve stors/policy. All Related Party Transactions are placedbefore the Audit Committee for review and approval of the Committee on a quarterly basis.Also the Company has obtained prior omnibus approval for Related Party Transactionsoccurred during the year for transactions which are of repetitive nature and/or enteredin the ordinary course of business and are at arm's length.
All the related party transactions entered into during the financial year were on anarm's length basis and were in the ordinary course of business. Your Company had notentered into any transactions with related parties which could be considered material interms of Section 188 of the Companies Act 2013. Accordingly the disclosure of relatedparty transactions as required under Section134(3)(h) of the Companies Act 2013 in FormAOC 2 is not applicable.
6. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION AND REDRESSAL) ACT2013
The Company has complied with the provisions relating to the constitution of theInternal Complaint Committee in compliance with Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 to consider and resolve all sexualharassment complaints reported by women. During the year there is no complain regardingthe Sexual Harassment of Women at Workplace.
7. EXTRACTS OF ANNUAL RETURN
The extract of Annual Return as on March 31 2020 in the prescribed Form No. MGT-9pursuant to Section 92 of the Companies Act 2013 is available on the website of theCompany at at the link https://www.groupsignet.com/extract-of-annual- return.pdf (AnnexureI)
8. VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has adopted a whistle blower policy and has established the necessary vigilmechanism for employees and Directors to report concerns about unethical behaviour. Noperson has been denied access to the Chairman of the Audit Committee. The said policy isuploaded on the website of the Company at http://www.groupsignet.com/investors/policies
9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis forms an integral part of this Report and givesdetail of the overall industry structure developments performance and state of affairsof the Company's various businesses viz. the decorative business internationaloperations industrial and home improvement business internal controls and theiradequacy risk management systems and other material developments during the financialyear (Annexure II).
10. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION. FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts)Rules 2014 as amended from time to time is annexed tothis Report as (Annexure - III).
11. CORPORATE SOCIAL RESPONSIBILITY
SIL has established CSR Committee as per the provision of the Companies Act 2013. CSRCommittee recommends CSR activities to be undertaken by the Company to the Board asspecified in Schedule VII of the Companies Act 2013 (here in after referred to as"the Schedule VII"). SIL will spend in every Financial Year at least 2 percent of the average net profits of the Company made during the 3 immediately precedingFinancial Years in pursuance of the Companies Act 2013 and rules framed there under forthe purposes specified in Schedule VII and also in pursuance of this CSR Policy. Thedetails of the same are attached as (AnnexureIV) in the report.
12. AUDITORS & THEIR REPORT
A. Statutory Auditors:
M/s. SMAK & Co. Chartered Accountants having ICAI Registration No. 020120C wereappointed as Auditors of the Company for a term of 5 (five) consecutive years at theAnnual General Meeting held on 26th September 2017. They have confirmed that they are notdisqualified from continuing as Auditors of the Company.
The Notes on financial statement referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation adverse remark or disclaimer.
Pursuant to provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 amended from time to time the Company hasappointed Cost Auditor M/s A.K. Jain & Associates for the year 2019-20 on the totalremuneration of Rs.60000/- and has filed the Form CRA-2 to the Registrar. Your directorspropose to approve their remuneration at the forthcoming Annual General Meeting.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s M. Maheshwari& Associates Company Secretaries to undertake theSecretarial Audit of the Company. The Secretarial Auditors in their report for the year2019-20has confirmed the compliances made by the Company.
The Report of the Secretarial Audit for the year 201920 in the Form MR-3 is annexedherewith as (Annexure V).
d. Internal Auditors
In compliance with the provisions of Section 138of Companies Act 2013 read withCompanies (Accounts) Rules 2014 your Company has appointed Mr. ArpitGarg CharteredAccountants as Internal Auditors for the Financial Year 2019-20.
e. Reporting of Fraud by auditors
During the year under review neither the statutory auditor nor the secretarial auditorhas reported to the audit committee under Section 143 (12) of the Companies Act 2013any instances of fraud committed against the Company by its officers or employees thedetails of which would need to be mentioned in the Board's report.
13. CORPORATE GOVERNANCE
Corporate Governance is an ethically driven business process that is committed tovalues aimed at enhancing an organizations brand and reputation. The Companies Act 2013and amended SEBI (Listing obligation and Disclosure Requirements) Regulation 2015 havestrengthened the governance regime in the country. The Company is in compliance with thegovernance requirements provided under the new law and had proactively adopted manyprovisions of the new law ahead of time. The Company is committed to maintain the higheststandards of corporate governance and adhere to the corporate governance requirements setout by SEBI. Integrity and transparency are key to our corporate governance practices toensure that we gain and retain the trust of our stakeholders at all the times.
A separate report on Corporate Governance (Annexure VI) is provided together with aCertificate from the Statutory Auditors of the Company regarding compliance of conditionsof Corporate Governance as stipulated under SEBI (Listing obligation and DisclosureRequirements) Regulation 2015 (Annexure VII).A Certificate of the MD and CFO of theCompany inter alia confirming the correctness of the financial statements and cash flowstatements adequacy of the internal control measures and reporting of matters to theAudit Committee is also annexed(Annexure VIII).
a. Material Changes And Commitments
Material Changes and commitment affecting the financial position of the company fromthe end of financial year to the date of report.
Global Pandemic & Impact of Covid-19
In the last month of FY 2020 the COVID-19 pandemic developed rapidly into a globalcrisis forcing governments to enforce lockdowns of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of allemployees and on minimizing disruption to services for all our customers. The operationsof the company were shut down as per the lockdown directives except to the extent of whatwas permitted. The impact of COVID-19 pandemic on the overall economic environment beinguncertain and as the situation is unprecedented and while the lockdown is graduallylifting the Company is closely monitoring the situation as it evolves in the future andexpects the normal business depending on the factors caused by COVID-19 and associatedissues.
b. Change in the Nature of Business If Any
There was no change in the nature of business ofthe Company during the Financial Yearended 31stMarch 2020.
c. Secretarial Standards
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto 'Meetings of the Board of Directors' and 'General Meetings' respectively have beenduly followed by the Company.
d. Significant and Material orders passed by the Regulators or Courts or Tribunalsimpacting the going concern status of the Company:
There are no significant and material orders passed by the Regulators/Courts/Tribunalswhich would impact the going concern status of the Company and its future operation
e. Details of Fixed Deposits
During the year under review the Company has not accepted any Deposit under Section 73of The Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014. Itis further stated that the Company does not have any deposits which are not in compliancewith the requirements of Chapter V of The Companies Act 2013.
15. PARTICULARS OF EMPLOYEES
The relation between the employees and the management has been cordial throughout theyear under review and the Directors place on record their appreciation for the efficientservices rendered by the employees at all levels.
The information required under Section 197 of the Companies Act 2013 read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are provided in separate annexure forming part of this Report as (Annexure - IX).
The statement containing particulars of employees as required under Section 197 of theCompanies Act 2013read with rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 will be provided upon request. In terms of Section 136of the Companies Act 2013 the Report and Accounts are being sent to the Members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by the members at the Registered Office of the Company duringbusiness hours on working days of the Company. If any member is interested in obtaining acopy thereof such Member may write to the Company Secretary in this regard.
16. INTERNAL FINANCIAL CONTROL
According to Section 134(5) (e) of the Companies Act 2013 the term Internal FinancialControl (IFC) means the policies and procedures adopted by the company for ensuring theorderly and efficient conduct of its business including adherence to company's policiessafeguarding of its assets prevention and detection of frauds and errors accuracy andcompleteness of the accounting records and timely preparation of reliable financialinformation.
The Company has adequate system of internal controls to ensure that all the assets aresafeguarded and are productive. Necessary checks and controls are in place to ensure thattransactions are properly verified adequately authorized correctly recorded and properlyreported. The Internal Auditors of the Company conducts Audit of various departments toensure that internal controls are in place
We would like to thank all our Stakeholdersviz. Shareholders Investors BankersCustomersSuppliers Government agencies Stock exchangesand Depositories Auditors legaladvisors consultantsbusiness associates service providers for theircontinuedcommitment and invincible enthusiasm which made thisyear productive andpleasurable.
The Board also placeson record their deep sense of appreciation towards allitsEmployees at all levels for adopting the values ofthe Company and their hard work duringthe year.
| ||By Order of Board |
| ||For Signet Industries Limited |
| ||Mukesh Sangla |
| ||Chairman and Managing Director |
| ||DIN : 00189676 |
|Place: Indore || |
|Date: 14.08.2020 || |