Your Directors present the Twenty Eighth Annual Report together with the AuditedStatements of Account for the financial year ended March 31 2019.
1. FINANCIAL RESULTS.
During the year under review the Company has achieved the following financial results:
| || ||Rs. in Lakhs |
|Particulars ||31.03.2019 ||31.03.2018 |
|Revenue from operations ||1015.77 ||882.87 |
|Other Income ||5.11 ||1.02 |
|Profit /(Loss) before Financial Charges Depreciation Taxation and Prior Period items ||-52.64 ||42.42 |
|Less: Depreciation ||29.42 ||26.36 |
|Less: Finance Costs ||28.32 ||24.25 |
|Profit /(Loss) before Taxation and Prior Period items ||(110.38) ||(8.19) |
|Profit /(Loss) for the year ||(110.38) ||(8.19) |
|Net Profit/(Loss) for the year ||(110.38) ||(8.19) |
|Balance of Profit/(Loss) brought forward from last year ||(805.16 ||(796.97) |
|Profit/(Loss) Carried forward to Balance sheet ||(915.54) ||(805.16) |
2. OVERVIEW OF COMPANY PERFORMANCE:
During the year under review sales has registered an increase of 15.06 % compared toprevious year.
The loss has gone up steeply due to increase in direct costs unwillingness ofcustomers to pay higher price for the product due to huge increase in costs of materialsand below par demand for your company's products during the later half of the year.
3. DIVIDEND & RESERVES:
In view of loss incurred by the Company your Directors do not recommend any dividendfor the financial year ended March 312019.
During the year under review no amount was transferred to General Reserve.
4. SHARE CAPITAL:
The Paid Up Capital of the Company as at March 312019 stood at Rs. 101996525/-.During the year under review the Company has not issued shares with differential votingrights nor has granted any stock options or sweat equities. As on March 31 2019 none ofthe Directors of the Company hold instruments convertible into equity shares of theCompany.
5. EXTRACTOF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 as requiredunder Section 92 (3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management & Administration) Rules 2014 is included in this Report as Annexure-Aand forms an integral part of this Report.
To comply with Corporate Governance requirements changes have taken place in thecomposition of the Board of Directors of your Company and presently the Board comprisesthe following directors.
|Directors ||Category |
|1. Mr. V. Parthasarathy ||Chairman & Non-Executive Independent Director |
|2. Mr. Suresh Shastry ||Promoter Managing Director |
|3. Mrs. Shailaja Suresh ||Promoter Non-Executive Director |
|4. Mrs. Supriya Shastry ||Non Promoter Executive Director |
|5. Mr.SudhindraNarayan Kalghatgi ||Non-Executive Independent Director |
Mr.Umesh Shastry and Mr.Sathish Shastry Executive Directors have resigned from TheBoard of Directors of the Company with effect from 01.04.2019 to facilitate your companycomplying with the requirement that the Board of directors will have an optimumcombination of executive and non - executive directors with not less than fifty per centof the board of directors comprising of non-executive directors in line with theprovisions of corporate governance as per SEBI (LODR) Regulations 2015.
Your Company places on record its sincere appreciation for the excellent work carriedout by the outgoing Directors Mr.Umesh Shastry and Mr.Sathish Shastry.
The Mr.V.Parthasarathy and Mr. Sudhinda Narayan Kalghatgi Independent Directors havebeen reappointed for a further period of five years from 14.02.2019 to 13.02.2024 inline with the provisions of the Companies Act2013 and the listing agreement and the sameis subject to approval of the shareholders at the ensuing Annual General Meeting.
The Independent Directors have given declaration that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Mrs. Shailaja Suresh has been appointed with effect from 01.04.2019 as an AdditionalNon- Executive Director on the Board of Directors of the Company pursuant to Section 161and other applicable provisions of the Companies Act2013 & subject to confirmation bythe shareholders at the ensuing AGM.
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Ms. Supriya Shastry Director and Mr. Suresh ShastryManaging Director retire by rotation at the ensuing Annual General Meeting and beingeligible offer themselves for re-appointment.
The Board recommends their re-appointment for consideration of the Members of theCompany at the ensuing Annual General Meeting.
During the year under review there was no change in the Board of Directors of theCompany.
7. NUMBER OF MEETINGS OFTHE BOARD:
During the FinancialYear 2018-19 5(five) meetings of the Board were held details ofwhich are given in the Corporate Governance Report.
8. KEY MANAGERIAL PERSONNEL:
The following are the Key Managerial Personnel of the Company:
|1. Suresh Shastry ||- Managing Director |
|2. Supriya Shastry ||- WholeTime Director |
|3. Umesh Shastry ||- Whole TimeDirector (till 31.03.2019) |
|4. Sathish Shastry ||- Whole TimeDirector (till 31.03.2019) |
|5. Mr. Sadaanand S Zutti ||- Chief Financial Officer (wef 01.04.2019 |
|6. Ravi.V ||- Company Secretary |
9. COMMITTEES OFTHE BOARD:
The Board of Directors has the following Committees:
1. Audit Committee
2. Remuneration and Nomination Committee
3. Stakeholders'Relationship Committee &
4. Share Transfer Committee
Details of the Committee/s along with their composition number of meetings andattendance at the meetings are provided in the Corporate Governance Report.
10. BOARD EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a structured questionnaire was prepared aftertaking into consideration the various aspects of Board's functioning composition of theBoard and its Committees and performance of specific duties obligations and governance.
The performance evaluation of Independent Directors was completed. The performanceevaluation of the Chairman and Non-Independent Directors was carried out by theIndependent Directors through a meeting of Independent Directors.
11. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are put upon the website of the Company www.smithsandfoundersindia.com.
12. FIXED DEPOSITS:
The Company has not accepted fixed deposits from the public and shareholders within themeaning of Section 73(1) of the Companies Act 2013 and Rules made there under during theyear under review.
13. DIRECTORS' RESPONSIBILITY STATEMENT:
As required under Section 134(3)(c) of the Companies Act 2013 your Directors statethat:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanations relating to material departures;
b) the Directors have 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 March 312019 and its loss for theyear ended on that date;
c) the Directors have 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 annual accounts have been prepared 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 provisions ofall applicable laws and that such systems were adequate and operating effectively.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY COMPANY:
During the year under review the Company has not given any loan guarantee or made anyinvestment covered under the provisions of Section 186 of the Companies Act 2013.
15. REMUNERATION AND NOMINATION POLICY:
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.The policy also lays down criteria for selection and appointment of Board Members. ThePolicy is given in Annexure-B and forms an integral part of this report.
16. RELATED PARTYTRANSACTIONS:
During the year under review the Company has not entered into any transaction with anyrelated party attracting the provisions of Section 188 of the Companies Act 2013 and theRules made thereunder. The disclosure required pursuant to clause (h) of sub-section (3)of Section 134 of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules2014 in Form AOC 2 is given in Annexure-C and forms an integral part of this report.Further there are no material related party transactions during the year under review withthe Promoter Directors or Key Managerial Personnel.
All Related Party Transactions are placed before the Audit Committee and also to theBoard for approval.
The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company www.smithsandfoundersindia.com.
17. VIGIL MECHANISM /WHISTLE BLOWER POLICY:
The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy of the Company can be accessed on the Company's websiteatwww.smithsandfoundersindia.com
18. RISK MANAGEMENT:
The Company has in place Risk Management Policy according to which the Board ofDirectors of the Company and the Audit Committee periodically review and evaluate the riskmanagement system of the Company so that the management controls the risks throughproperly defined network.
19. CORPORATE SOCIAL RESPONSIBILITY:
No disclosures on Corporate Social Responsibility are required as provision underSection 135 of the Companies Act 2013 and Rules made thereunder are not applicable to theCompany.
20. CORPORATE GOVERNANCE:
As per Regulations 34(3) read with Schedule Vof the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on corporate governancepractices followed by the Company together with a Certificate from the Company's Auditorsconfirming compliance forms an integral part of this Report.
21. MANAGEMENT DISCUSSION AND ANALYSIS:
The Report on Management Discussion and Analysis forms part of this Report. Certainstatements in this section may be forward looking. Many factors may affect the actualresults which could be different from that the Directors envisage in terms of the futureperformance and outlook.
22. COMPLIANCE WITH SECRETARIAL STANDARDS
Your Company has complied with Secretarial Standards SS-1 and SS-2 issued by TheInstitute of Company Secretaries of India. Secretarial Standard SS-3 is not applicable toyour Company.
23. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Rules madethereunder the Company has appointed Mr. V Shivaprakash Practicing Company Secretary asthe Secretarial Auditor of the Company. The Secretarial Audit Report is annexed asAnnexure - D and forms an integral part of this Report.
The company has been given certain relaxation in respect of composition of Board ofDirectors for the period 20.02.2014 to 19.02.2019 as per rehabilitation scheme sanctionedby Hon'ble BIFR (Bureau for Industrial & Financial Reconstruction) during the year2014.
The company has however reconstituted the Board as per requirement of composition ofBoard of Directors from 01.04.2019.
The Company's Auditors M/s. B.N.Subramanya & Co. Chartered Accountants werere-appointed as the Statutory Auditors of the Company to hold office from the conclusionof Twenty Seventh Annual General Meeting held on 29th September 2018 until theconclusion of the Thirty Second Annual General Meeting to be held in the year 2023.
The Auditors' Report does not contain any qualification reservation or adverse remarkon the financial statements for the year ended March 312019. The statements made by theAuditors in their Report are self-explanatory and do not call for any further comments.
25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS:
The adjudication officer Securities and Exchange Board of India (SEBI) has passed anorder on 20.12.2018 levying a penalty of Rs.400000/- for non compliance with MinimumPublic Shareholding (MPS) requirements for the period from 20.02.2017 to 10.10.2017.
The rehabilitation scheme sanctioned by Hon. BIFR (Board for Industrial & FinancialReconstruction) in the year 2014 had given directions as to categorisation of promotersand based on the same your Company had always complied with MPS requirements.
Based on your Company's representation SEBI Corporate Finance Department of Hon.SEBIhad accepted the categorisation of promotes on the basis of the directions of Hon. BIFRand had advised the Company to file revised share holding pattern for the earlier periodsand your company had complied with the same.
Also your Company had filed an appeal with Securities Appellate Tribunal contestingthe order of the adjudication officer Securities and Exchange Board of India.
26. CONTINGENT LIABILITY:
The notes forming part of the financials cover fine proposed by BSE Limited towardsCorporate Governance compliance requirements and relating to demand in respect ofCompany's Income Tax Assessment pending for the financial year 2015-16.
27. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has an adequate internal control system commensurate with its size andnature of its business.
28. HEALTH SAFETY AND ENVIRONMENT:
The health and safety of the workforce is of paramount importance. The Company aims toprovide a workplace that is free from any occupational hazards or illness.
29. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION & REDRESSAL)ACT 2013.
During the year under review the Company has not received any complaint under theSexual Harassment of Women at Workplace (Prevention Prohibition & Redressal) Act2013.
30. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY.
No material changes and commitment affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statement relatesand the date of this report.
31. STATUTORY INFORMATION
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo pursuant to Section 134 (3)(m) of the Companies Act 2013 read withRule 8(3) of the Companies (Accounts) Rules 2014 is given in Annexure-E which forms partof this Report.
There were no employees employed throughout the year who were in receipt ofremuneration of Rs. 1.02 Crore per annum or more. There were no employees employed forpart of the year who were in receipt of remuneration of Rs. 8.50 Lakhs per month or more.During the year under review the Company had 75 employees.
The information required under Section 197(12) of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and formingpart of the Directors' Report for the year ended March 312019 is given in Annexure-F tothis Report.
Your Directors wish to place on record their appreciation for the contribution made bythe employees at all levels but for whose hard work and support your Company'sachievements would not have been possible. Your Directors also wish to thank its MembersGovernment Authorities Banks Customers and Vendors for their sustained support to theCompany.
| ||By the Order of the Board |
|Place : Bangalore ||Suresh Shastry |
|Date : 29.05.2019 ||Managing Director |