Directors of your Company take great pleasure in presenting the 25th AnnualReport on the business and operations of your Company and the Audited Financial Statementsfor the financial year ended March 312020.
1. SUMMARISED FINANCIAL HIGHLIGHTS STANDALONE
| || ||(Rs. in Lakhs) |
|Particular ||Year Ended 31.03.2020 ||Year Ended 31.03.2019 |
|Total Income ||29306.85 ||29497.11 |
|Earnings before Interest Taxes Depreciation and Amortization ||2827.04 ||2235.69 |
|Less: Financial Cost ||596.80 ||424.72 |
|Depreciation & Amortization ||1415.06 ||1087.70 |
|Profit Before tax ||815.18 ||723.27 |
|Less: Tax Expenses || || |
|Current ||292.88 ||227.35 |
|MAT Credit entitlement ||0.00 ||0.00 |
|Deferred Tax ||(7.94) ||(109.19) |
|Profit /(Loss) for the period ||530.24 ||605.12 |
|Other Comprehensive Income (net of Tax) ||(5.49) ||22.94 |
|Profit after Tax and available for appropriation ||524.75 ||628.05 |
|APPROPRIATIONS || || |
|Dividend Paid ||131.65 ||131.65 |
|Dividend Distribution Tax ||26.95 ||26.95 |
|Surplus carried to Balance Sheet ||366.15 ||469.45 |
|Particular ||Year Ended 31.03.2020 ||Year Ended 31.03.2019 |
|Total Income ||33384.61 ||34341.90 |
|Earnings before Interest Taxes Depreciation and Amortization ||2853.57 ||2228.39 |
|Less: Financial Cost ||612.17 ||437.21 |
|Depreciation & Amortization ||1415.74 ||1088.37 |
|Add: Share of Profit/(Loss) of Associates ||(69.71) ||(102.83) |
|Profit Before tax ||755.95 ||599.98 |
|Less: Tax Expenses || || |
|Current ||292.88 ||227.35 |
|MAT Credit entitlement ||0 ||0 |
|Deferred Tax ||(7.94) ||(109.19) |
|Profit /(Loss) for the period ||471.00 ||481.83 |
|Less: Net Profit attributable to Non controlling Interest ||1.57 ||(3.07) |
|Other Comprehensive Income (net of Tax) ||(18.53) ||56.51 |
|Profit after Tax and available for appropriation ||450.90 ||541.41 |
|APPROPRIATIONS || || |
|Dividend Paid ||131.65 ||131.65 |
|Dividend Distribution Tax ||26.95 ||26.95 |
|Surplus carried to Balance Sheet ||292.30 ||382.80 |
The Company's total revenue is Rs.293.07 Crores during the current year as againstRs.294.97 Crores during the previous year. The Export during the year has been Rs.200.86Crores as compared to Rs.228.41 Crores during the previous year 2018-19.
IMPACT OF COVID-19
The impact of the Covid-19 will be felt in financial year 2020-21 as is expected tohave further impact on the operations of the company.. The Company has partially resumedthe operation in its facilities with minimum workforce as per the guidelines issued byMinistry of Health and welfare.
The Director's recommend a dividend of 5% (ie Rs 0.50) per equity share for thefinancial year ended March 31st 2020. The dividend if approved by shareholders wouldabsorb Rs.13165000/- on 26330000 Equity Shares of Rs. 10/- each.
4. AMOUNTS TRANSFERRED TO RESERVES:
The Board of Directors of the Company (hereinafter referred to as the"Board") has not recommended transfer of any amount of profit to reserves duringthe year under review. Hence the remaining amount of profit for the financial year underreview has been carried forward to the Statement of Profit and Loss.
5. SHARE CAPITAL:
The paid up Equity Share Capital as on March 31 2020 was Rs. 263300000. During theyear under review the company has not issued any shares or any convertible instruments.
6. CORPORATE GOVERNANCE:
Effective corporate governance is necessary to retain the trust of stakeholders and toachieve business success. Corporate governance is about commitment to values and ethicalbusiness conduct. It is about how an organization is managed. It includes its corporateand other structures its culture policies and the manner in which it deals with variousstakeholders. As shareholders across the globe evince keen interest in the practices andperformance of companies corporate governance has emerged at the centre stage of the waythe corporate world functions. Corporate governance is vital to enable companies tocompete globally in a sustained manner and let them flourish and grow. A report onCorporate Governance along-with a certificate from the Statutory Auditor on compliancewith Corporate Governance norms forms part of this report has been annexed herewith as Annexure- A
7. DEMATERIALISATION OF SHARES:
As on March 312020 almost 90.35 % of the company's paid up Equity Share Capital is indematerialized form and balance 9.65% is in physical form. The Company's Registrar is M/sS.K.D.C. Consultants Ltd. having their registered office at Kanapathy Towers 3rd Floor1391/A1 Sathy Road Ganapathy Coimbatore-641 006.
8. NUMBER OF MEETINGS OF THE BOARD:
During the year five (5) Board Meetings were held the details of which are given inthe Corporate Governance Report. The gap between any two consecutive meetings of the Boardof Directors was less than 120 days.
9. COMMITTEES OF DIRECTORS:
The Company has constituted committees as required under the Companies Act 2013 andthe Listing regulations the details of the said Committees forms part of the CorporateGovernance Report.
10. INVESTOR EDUCATION AND PROTECTION FUND:
Transfer of Equity Shares relating to dividend which has not been claimed by themembers for seven consecutive years or more to the Investor Education and Protection FundAuthority (IEPF) did not arise during the year.
11. BUSINESS RISK MANAGEMENT:
Although the company has long been following the principle of risk minimization as isthe norm in every industry it has now become a compulsion. Therefore in accordance withSEBI (LODR) Regulations 2015 of the listing Regulations the Board members were informedabout risk assessment and minimization procedures after which the Board formally adoptedsteps for framing implementing and monitoring the risk management plan for the company.The main objective of this policy is to ensure sustainable business growth with stabilityand to promote a pro-active approach in reporting evaluating and resolving risksassociated with the business. In order to achieve the key objective the policyestablishes a structured and disciplined approach to Risk Management in order to guidedecisions on risk related issues. In today's challenging and competitive environmentstrategies for mitigating inherent risks in accomplishing the growth plans of the Companyare imperative. The common risks inter alia are: Regulations competition Business riskTechnology obsolescence Investments retention of talent and expansion of facilities.Business risk inter-alia further includes financial risk political risk fidelity risklegal risk. As a matter of policy these risks are assessed and steps as appropriate aretaken to mitigate the same.
The Risk Management policy has been placed on the website of the Company and the weblink there to is www.skmegg.com
12. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The Company's internal control systems have been strengthened taking into account thenature of business and size of operations to provide for:
I) Reliability and integrity of financial and operational information;
ii) Effectiveness and efficiency of operations and assets;
iii) Compliance with applicable statutes policies listing requirements and managementpolicies and procedures.
The Company through its own Corporate Internal Audit Department carries out periodicaudits at all locations and all functions and brings out any deviation to internal controlprocedures. The observations arising from audit are periodically reviewed and complianceensured. The summary of the Internal Audit observations is submitted to the AuditCommittee. The Audit Committee at its meetings regularly reviews the financial operatinginternal audit & compliance reports to improve performance. The heads of variousmonitoring/operating cells are present for the Audit Committee meetings to answer queriesfrom the Audit Committee.
13. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company seeks to be a good corporate citizen in all aspects of its operations andactivities. We commit to operating in an economically socially and environmentallyresponsible manner whilst balancing the interests of diverse stakeholders. The company hasconstituted a Corporate Social Responsibility (CSR) Committee. The CSR Committee meetsonce in a year. The details of CSR Committee and its meetings are given below. The CSRCommittee has framed and formulated a CSR Policy indicating the activities to beundertaken by the Company in accordance with Schedule VII of the Act and the Companies(Corporate Social Responsibility Policy) Rules 2014 issued under the Act. The CSR policyis available on the website of the Company at the link www.skmegg.com.
|NAME ||CATEGORY ||POSITION || |
|SITTING FEES PAID (In Rs.) |
| || || ||Held ||Attended || |
|Dr.L.M.Ramakrishnan ||ID* ||Chairman ||1 ||Yes ||NIL |
|Shri.C.Devarajan ||ID* ||Member ||1 ||Yes ||NIL |
|Smt.S.Kumutaavalli ||NED** ||Member ||1 ||Yes ||NIL |
|Shri D Venkateswaran ||ID* ||Member ||1 ||Yes ||NIL |
(*ID-Independent Director ** Non-executive Director)
The Disclosure with respect to CSR activities forming part of this report is given in AnnexureB.
14. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The Company has a Whistle Blower Policy (the "WB Policy") with a view toprovide vigil mechanism to Directors Employees and other Stakeholders to discloseinstances of wrongdoing in the workplace and report instances of unethical behavioractual or suspected fraud or violation of the Company's code of conduct or ethics policy.The WB Policy is available on the website of the Company at www.skm.egg.com. During theyear under review there were no complaints received under this policy
15. RELATED PARTY TRANSACTIONS:
All the transactions entered with the related parties during the financial year were onan arm's length basis and were in the ordinary course of business. Transactions withrelated parties entered by the Company in the normal course of business are periodicallyplaced before the Audit Committee /Board for its omnibus approval and since there are notransactions which are not on arm's length basis and material in nature Form AOC-2 isannexed as "Annexure - C".
The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Companies Act 2013 the Rulesthere under and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.This Policy was considered and approved by the Board has been uploaded on the website ofthe Company atwww.skmegg.com.
16. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
Conservation of energy technology absorption and foreign exchange earnings and outgoare given in the "Annexure- D" to this report.
17. ANNUAL RETURN:
The details forming part of the extract of Annual Return in Form MGT-9 is provided in "Annexure-E"to this Report. A copy of the Annual Return of the Company in prescribed format isavailable at the website of the Company www.skmegg.com
18. BOARD EVALUATION
The Annual Performance Evaluation of the Directors including the Audit CommitteeNomination and Remuneration Committee Stakeholders Relationship Committee has beencarried out pursuant to the provisions of Section 134 (3) (p) 149(8) and Schedule IV ofthe Companies Act 2013 and SEBI (Listing Obligations and disclosures requirements)Regulations 2015.
The Performance Evaluation of the Independent Directors was carried out by the entireBoard and the Performance Evaluation of the Chairman and Non- Independent Directors wascarried out by the Independent Directors. The Independent Directors of the company havealso convened a separate meeting for this purpose. The policy is available on the websiteof the company at www.skmegg.com.
18.1 REMUNERATION POLICY
A. Policy on remuneration to Non-Executive Directors/Independent Directors
The policy of the Company based on the recommendation of the Nomination &Remuneration Committee for the payment of remuneration to Non-executiveDirectors/Independent Directors of the company is that the Non Executive Directors will bepaid only sitting fees for attending Board and Committees of the Board which is fixedwithin the limits of Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
B. Policy on remuneration to MD & Executive Director Key Managerial Personnel andother employees
The Compensation/Remuneration policy of the Company as approved by the Board containsthe policy for payment of remuneration to Executive Directors including MD & Keymanagerial personnel and for the employees of the Company.
C. Performance Evaluation by the Board of its own performance and its Committees
The performance of the Board is evaluated by the Board in the overall context ofunderstanding by the Board of the Company's principle and values philosophy and missionstatement strategic and business plans and demonstrating this through its action onimportant matters the effectiveness of the Board and the respective Committees inproviding guidance to the Management of the Company and keeping them informed opencommunication the constructive participation of members and prompt decision making levelof attendance in the Board meetings constructive participation in the discussion on theAgenda items monitoring cash flow profitability income & expenses productivity& other financial indicators so as to ensure that the Company achieves its plannedresults effective discharge of the functions and roles of the Board etc.
The performance of the Committees is evaluated by the members of the respectiveCommittees Committee meetings held at appropriate frequency length of the meetings beingappropriate open communication & constructive participation of members and promptdecision-making etc.
19. INDEPENDENT DIRECTORS MEETING:
During the year under review the Independent Directors of the Company met on29.01.2020 inter alia to discuss:
i) Evaluation of performance of Non- Independent Directors and the Board of Directorsof the Company as a whole.
ii) Evaluation of performance of the Chairman of the Company taking into views ofExecutive and Non- Executive Directors.
iii) Evaluation of the quality content and timelines of flow of information betweenthe Management and the Board that is necessary for the Board to effectively and reasonablyperform its duties.
20. DECLARATION BY INDEPENDENT DIRECTOR:
The Independent Directors have affirmed that they satisfy the criteria laid down undersection 149(6) of the Companies Act 2013 (Act) and Regulation 25 and other applicableregulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(SEBI LODR) as amended from time to time. The Board of Directors at its meeting helddated on 31st July 2019 for the Financial Year 2019-20 has taken on record thedeclarations and confirmations submitted by the Independent Directors.
21. DETAILS IN RESPECT OF FRAUDS REPORTED BY STATUTORY AUDITORS UNDER SECTION 143(12)OF THE COMPANIES ACT 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
There were no instances of frauds identified or reported by the Statutory Auditorduring the course of their audit.
22. MATERIAL CHANGES AND COMMITMENT'S AFFECTING THE FINANCIAL POSITION OF THE COMPANY
The Covid-19 Pandemic has significantly impacted the operations of the company theBoard will review the performance continuosly and initiate appropriate actions keeping inview the long term interests of stake holders
23. REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARY INCLUDED IN THECONSOLIDATED FINANCIAL STATEMENTS.
The company has foreign subsidiary. A report on the performance and financial positionof the subsidiaries as per the Act in the prescribed format AOC-1 Annexure F isannexed to the annual report and hence not repeated here for the sake of brevity. TheCompany has a policy on material subsidiaries pursuant to Regulation 16(1)(c)of theListing Regulations which has been uploaded on the company's website at www.skmegg.com
During the year under review your Company has not accepted any deposits under Section73 of the Act and as such no amount on account of principal or interest on publicdeposits was outstanding as of March 312020.
25. PREVENTION OF SEXUAL HARASSMENT
The Company has zero tolerance for sexual harassment at the work place and has adopteda policy on prevention prohibition and Redressal of sexual harassment in line with theprovisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and the Rules there under for prevention and redressal of complaintsof sexual harassment at workplace.
Internal Complaints Committee (ICC) is in place for all administrative units or officesof SKM EGG PRODUCTS EXPORT (INDIA) LIMITED to redress complaints received regarding sexualharassment. All women associates (permanent temporary contractual and trainees) as wellas any woman visiting the Company's office premises or women service providers arecovered under this policy. During the year under review the Company has not received anycomplaints /~ in this regard
26. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mrs. S Kumutaavalli (DIN: 00002390) retires by rotation and being eligible hasoffered herself for re-appointment at the ensuing Annual General Meeting("AGM"). Your Directors recommend her re-appointment. The brief resume of Mrs. SKumutaavalli and other relevant information have been furnished in the Notice of AnnualGeneral Meeting (AGM). Appropriate resolutions for her appointment are being placed forapproval of the shareholders at the AGM.
Shri. SKM. Maeilanandhan Executive Chairman Shri. SKM Shree Shivkumar ManagingDirector Shri. K.S. Venkatachalapathy Chief Financial Officer and Shri. FI SekarCompany Secretary hold the office of Key Managerial Personnel respectively within themeaning of Section 2(51) of the Companies Act 2013
During the year under review the following are the changes in the Board of Directors:
i) SM Venkatachalapathy (DIN: 00043288) Non Executive Director retired from the Boardwith effect from 25th September 2019 The Board places on record its appreciation towardsvaluable contribution made by him during his tenure as a Director of the Company.
ii) M. Chinnayan (DIN 01497482) ceased to be an Independent Director on account ofcompletion of his term on 10th September 2019 by efflux of time. The Board places onrecord its appreciation towards valuable contribution made by him during his tenure as aDirector of the Company.
iii) P Kumarasamy (DIN 00046090) ceased to be an Independent Director on account ofcompletion of his term on 27th January 2020 by efflux of time. The Board places on recordits appreciation towards valuable contribution made by him during his tenure as a Directorof the Company.
27. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis including the result of operations of theCompany for the year as required under Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is appended to the Annual Report Annexure-G.
28. 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) that in the preparation of the annual financial statements for the year ended March31 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
b) that such accounting policies as mentioned in Notes to the Financial Statements havebeen selected and applied consistently and judgment and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 312020 and of the profit of the Company for the year ended on thatdate;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively.
f) that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
29. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
30. CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during the financial yearended 31st March 2020.
31.1 STATUTORY AUDITORS
Mr. Prasanna Venkatesan N Chartered Accountant Erode (Mn235530) were appointed asthe Statutory Auditors of the Company by the members at their 24th Annual General Meetingfor the period of three year till the conclusion of 27th Annual General Meeting. The termsand conditions of the appointment were changed in line with the LODR regulations videcircular CIR/CFD1/114/2019 dated 18.10.2019.
31.2 SECRETARIAL AUDITOR
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 Mr. V. Ramkumar Company Secretary in Practice Coimbatore. (CP No.:3832Membership No: F 8304) to undertake the secretarial audit of the company for theFY2019-20. The report of the secretarial audit of the company is annexed herewith asAnnexure H
The Annual Secretarial Compliance Report (hereinafter referred to as 'compliancereport') for FY 2019-20 issued from Mr. V. Ramkumar Company Secretary in PracticeCoimbatore. (CP No.:3832 Membership No: F 8304) the Secretarial Auditors of the Companyhave confirmed compliance with securities laws applicable to the Company and the same hasbeen taken on record by the Board of Directors at its meeting held on 29th June 2020. Thecompliance report does not contain any qualification reservation adverse remark and theBoard has approved filing of the same with the stock exchanges.
31.3 INTERNAL AUDITOR
The Company has appointed Mr. R.Muralidharan B.Com FCA. Chartered Accountant as theInternal Auditor of the Company and their report is reviewed by the audit committee andboard from time to time.
31.4 COST AUDITOR
Maintenance of cost records and requirement of cost audit as prescribed under theprovisions of Section 148(1) of the Companies Act 2013 are not applicable for thebusiness activities carried out by the Company.
32. COMMENTS ON AUDITORS' REPORT:
There was no qualification reservations or adverse remarks made by the StatutoryAuditor and the Secretarial auditor in their respective reports. In respect of theobservations made by the secretarial auditor the same is self explanatory.
33. CONSOLIDATED FINANCIAL STATEMENTS:
According to Section 129 of the Companies Act 2013 the Company has prepared aConsolidated Financial Statements of the Company and also of its Subsidiary "SKMEurope BV" Utrecht the Netherlands and associate company M/S SKM UniversalMarketing Company India Private Limited in same form and manner as that of the Companywhich shall be laid before the ensuing Annual General Meeting of the Company along-withlaying of the Company's Financial Statement under section 129 sub-section (2) i.e.Standalone Financial Statement of the Company.
34. PARTICULARS OF LOANS GUARANTEES MADE OR INVESTMENTS:
The Company has not granted any fresh loans or guarantees or provided any security inconnection with any loan to any other body corporate or person covered under theprovisions of Section 186 of Companies Act 2013 particulars of investments forms part ofthe notes to the financial statements provided in the Annual Report.
35. PARTICULARS OF EMPLOYEES
Details pursuant to Section 197(12) of The Companies Act 2013 read with The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 form part of thisreport as Annexure-I
36. INTERNAL CONTROLS:
The Company has a system of internal control which examines both the financialeffectiveness and operational effectiveness to ensure reliability of financial andoperational information and all statutory/ regulatory compliances.
37. INSIDER TRADING CODE:
The Company has formulated a code for prevention of Insider Trading pursuant toSecurities and Exchange Board of India (Insider Trading) (Amendment) Regulation 2002 toprevent the practices of Insider Trading. Mr. FI Sekar Company Secretary has beendesignated as Compliance Officer for this purpose. Senior Management of the Company hasaffirmed compliance with the Code of Conduct applicable as on 31.03.2020. The Company hasduly complied with all the mandatory listing agreement. Code of Conduct for InsiderTrading Regulation available on the Company's Website www.skmegg.com.
38. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards issued by TheInstitute of Company Secretaries of India on Meetings of the Board of Directors andGeneral Meetings.
39. CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during the financial yearended 31st March 2020
40. INDUSTRIAL RELATIONS:
The industrial relations with employees continued to be generally peaceful and cordialduring the year.
The Directors would like to take this occassion to thank each and everyone of you forbeing an earnest part of our Company on the successful completion of 25 years since itsincorporation. We are grateful to our employees clients and customers who trusted in usand provide immaculate products. Their requests demands and feed backs have pushed us togo a long way and improve our business to make it so great. Our success story isincomplete without the encouragement of our clients and customers. Not only have theyhelped us reach out to the world but they have also made us a part of their lives. We planto keep our business and relation growing with you and continue to provide you withnothing less than the best. With your support we wish to explore new heights in thecoming years.
42. CAUTIONARY STATEMENT:
Statements in this Annual report particularly those which relate to managementdiscussion and analysis describing your Company's objectives projections estimates andexpectations may constitute "forward looking statements" within the meaning ofapplicable laws and regulations. Actual results may materially differ from those expressedor implied.
For and on behalf of the Board of Directors SKM Maeilanandhan
|Date :13.08.2020 || ||Chairman |
|Place : Erode || ||DIN: 00002380 |