The Members of Sudar Industries Limited
The Directors take pleasure in present the 13th Annual Report of the Companytogether with the Audited Statement of Accounts and the Auditors Report of yourCompany for the financial year ended 31stMarch 2014 .
The Indian economy experienced a deceleration in economic growth during the period 2013-14. Your company had to face challenges in an inflationary market conditions coupled witha depreciating rupee leading to se in fall in unemployment and therefore yourcompany decided on a new focus to achieve all round growth by enhancing exports and valuefor the organization. In the process many decisions taken by your company showedfavorable trends and results.
THE COMPANIES ACT2013
The Ministry of Corporate Affairs (MCA) has notified 282 sections of the Companies Act2013 (CA2013/Act) in tranches in September 2013 and March 2014 with majority of thesections as well as rules being notified in March 2014. The Companies Act 1956 continuesto be in force to the extent of the corresponding provisions of the CA2013 which are yetto be notified. MCA vide its Circular dated April 4 2014 clarified that thefinancial statements and documents annexed and has boards report in respect offinancial year that have commenced earlier than April 1 2014 shall be governed by theprovisions of the Companies Act 1956 and in line with the same the financial statementsauditors report and Boards report and attachments thereto have been preparedin accordance with the provisions of the Companies Act 1956. With respect to otherprovisions of the Act appropriate references have been made in this report to the extentthese provisions have become applicable effective April 1 2014.
2) HIGHLIGHTS OF PERFORMANCE:
?Your company achieved turnover of Rs. 92730 lakhs as against Rs. 44002 lakhsin the previous year i.e. an increase of as compared to the previous year.
?Operating EBITDA increased in 2013 -14 by Rs. 3765 Lacs to Rs. 10689 Lakhsfrom Rs. 6924 Lakhs in 2012-13.
?Consolidated profit before tax in 2013 -14 was Rs.6538 Lakhs against Rs.3783Lacs in 2012-13.Similarly consolidated profit after tax was Rs.4565 Lakhs in 2013 -14 asagainst Rs.2556 Lakhs in 2012-13.
The financial year 2013-2014 was a challenging year amidst global economicuncertainties and recession. Despite there being constraints and a challengingenvironment the company performed reasonably well which is evident from the results.
3) FINANCIAL RESULTS:
This fiscal has been an exciting year in terms of growth and profitability. We areconfident that this change and the proposal to engage in trading in Iron ore Mineralsetc. will enable the company to maintain our growth trajectory in the future. Thefinancial highlights for the financial year are given below:
| || || |
(Rs. In Lakhs)
|PARTICULARS ||F.Y. 2013-14 ||F.Y. 2012-13 |
|Sales & Other Income ||92729.70 ||44002.27 |
|Profit (Loss) before Interest tax Depreciation and Exceptional Items ||10689.40 ||6924.10 |
|Less: Depreciation ||1300.90 ||1158.93 |
|Less: Interest Charges ||2850.86 ||1979.21 |
|Profit/(Loss) before exceptional and extraordinary items an taxation ||6537.64 ||3785.96 |
|Add/(Less):Exceptional items ||- ||2.57 |
|Profit (Loss) before Taxation ||6537.64 ||3783.39 |
|Less: Provision for Taxation || || |
|- Current tax ||1972.59 ||1227.52 |
|Profit (Loss) after Taxation ||4565.05 ||2555.87 |
|Balance of P&L A/c brought forward ||5320.45 ||2764.58 |
|Balance Carried to Balance Sheet ||9885.5 ||5320.45 |
|Earnings Per Share (Rs. per share) ||20.29 ||11.36 |
4) BUSINESS OUTLOOK:
Your Company an integrated apparel manufacturer with its expertise in designinggarments with its niche for finishing markets its products in wholesale market and multi-brand outlets. The Companys international presence extends to United States ofAmerica Italy United Kingdom and the United Arab Emirates through merchandise exports.In order to expand its business activities the Company has very recently commenced directexports in Industrial Garments in the Financial Year 2013 to Gulf and South-East AsianCountries. The export sales in apparels segment of the Company for financial year 2013 -14was Rs. 7095 lacs against Rs. 2299 lacs in financial year 2012-13.
For the future Your company has established a name for itself in the global markets.
B) HIGH ENDED FINE CHEMICALS PROVIDING INTERMEDIATE PRODUCTS FOR PHARMACEUTICAL ANDAGRO CHEMICALS INDUSTRY:
Your Company has been successfully engaged in manufacturing chemical products in a widerange of activities which includes 6 Pharmaceutical Intermediates and 11 Agrochemicalbusiness relating to chemical products. The export sales in chemical segment of theCompany for financial year 2013 -14 was Rs. 5391.32 lacs against Rs. 2020 lacs infinancial year 2012-13.
C) PROPOSAL TO TRADE IN IRON ORE MINERALS AND AGRO COMMODITIES:
The Company is proposing to diversify its activitycommodities to other metals andtrading business of Iron ore agro based minerals. The Company has obtained necessaryapprovals from the Shareholders of the Company through Postal ballot and the expects goodbusiness deals in new markets.
This year also your company would endeavor to strengthen the reserves for futureexpansion and therefore your Directors do not recommend any dividend for the year endedMarch 31 2014.
6) ECONOMIC SCENARIO & OUTLOOK:
The global economy experienced a slowdown especially noticed in developed economieswhich had its impact on India as well. The Indian economy had to contend with highinflation in the year 2014 and increased lending rates. The tightening of the monetarypolicy further slowed the growth of the economy which affected all sectors.
7) SUSTAINABLE DEVELOPMENT:
The Company continues to provide sustainable waste management solutions through co-processing and re-engineering. Our clients have further increased with new waste streamsefforts and continued to make the best use of fuels and raw materials thereby eliminatingwastage.
8) CORPORATE SOCIAL RESPONSIBILITY COMMITTEE/CSR COMMITTEE:
During the year your directors have constituted the Corporate Social ResponsibilityCommittee comprising Mr. Satish Shenoy as the Chairman and Mr. Murugan M. Thevar Mr. M.G.Subramaniam as other members.
The said committee has been entrusted with the responsibility of formulating andrecommending to the board a Corporate indicatingSocial to beResponsibility undertakenPolicy by the(CSR CompanyPolicy) monitoring the implementation of the framework of theCSR Policy and recommending the amount to be spent on CSR Activities.
9) OCCUPATIONAL HEALTH AND SAFETY (OH&S);
Your Company communication involvement and competency build engages in OH&Smatters through policy of -up applied consistently continually throughout its operation.Programmes targetingcritical areas are being implemented across all and sites to addressrisks associated with operations. Effectiveness of these programmes is being constantlyassessed by the Senior Leadership team. External audits are being conducted to check thelevel of implementation of these safety programmes.
Safety Leadership Programmes are being conducted across business units for the seniorleadership team. The programmes comprises of practical exercises and interactive sessionsand prepares managers to act as roleisk assessment job/activity . Our managers isintegral are provided with different types of risk assessment tools t part of any o helpthem identify risk and decide on appropriate control measures. Hazard identification beingconducted at sites to refine anticipation capability amongst the employees by enhancingtheir hazard observation skills.
Apart from our employees our contractors are also involved in these workshops whichshow an appreciable change in the attitude of contractors towards safety.
10) HUMAN RESOURCES:
Your company has embarked on a journey towards people excellence during the year. Theaim of this journey is to re-engineer all the HR processes and ensure that each process isfine appropriate number of employees are groomed for future middle and senior leadershiproles. Greater focus is given to hiring and retaining talent from different disciplinesand streams.
As extension of faster learning for young talent your company has embarked on a planto impart intensive learning through challenging functional/cross functional projects andcoaching to improve analytical and decision making capability.
The industrial relations scenario was peaceful. Your company embarked on a majorprogramme for the on roll and off roll employees with an emphasis on involving andengaging them in a variety of small improvement projects at the shop floor level so thattheir engagement level is enhanced.
It has been the endeavor of your Company to place a lot of emphasis on its people whichincludes Employees Directors and Customers. Your company believes that business beingcompetitive in all spheres of activities it is only competitive competent people who canensure that the Company marches in its road plan for attaining growth and prosperity.
Your Company is proud to have a professional board who have excellent experience withgood credentials and support the business with their inputs and decisions which canstrongly support your Company in its accomplishments of being one of the formidablecompanies in the industry.
In consonance with the provisions of the newly enacted Companies Act 2013 and takinginto consideration the composition of the Board of Directors Mr. M.G. Subramaniam retiresby rotation and being eligible offers himself for reappointment at the forthcoming AnnualGeneral Meeting.
The Companies Act 2013 (the Act) provides for appointment of independent directors.Sub-section (10) of Section 149 of the Companies Act 2013 (effective from April 1 2014)provides that independent directors shall hold office for a term of uptofive consecutiveyears on the Board of a company; and shall be eligible for re -appointment on passing ofordinary resolution by the shareholders of the company.
Sub-section (1) states that no independent director shall be eligible for more than twoconsecutive terms of five years. Sub - states that the provisions of retirement byrotation as defined in sub -sections (6) and (7) of Section 152 of thect A shall not applyto such independent directors.
The non-executive independent directors were appointed as directors liable to retire byrotation under the erstwhile Companies Act 1956. The Board of Directors has been advisedthat non executive (independent) directors so the term that was ascertained at the time ofappointment as per the resolution pursuant to appointedwould which they were appointed.Therefore it stands to reason that only those non-executive (independent) directors whowill complete their present term at the ensuing AGM of the Company in September 2014being eligible and seeking reappointment be considered by the shareholders forre-appointment for the first term of upto five consecutive years upto March 31 2019.
Non-executive (independent) directors who do not complete their term at the ensuingAGM will continue to hold office till the expiry of their term (based on retirementperiod calculation) and thereafter would be eligible for re -appointment for a fixed termin accordance with the Companies Act 2013.
Based on the above Mr. Anand Kadam and Mr. Satish Shenoy were appointed as IndependentDirectors of the Company for a term of two consecutive years effective from April 1 2014upto March 31 2016.
12) DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 217(2AA) of the Companies Act 1956 the Board of Directors of theCompany confirm that -
1. In preparation of the Annual Accounts for the financial year ended March 31 2014the applicable accounting standards have been followed.
2. 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 ofial year and of the profit or loss of the company forthat period.
3. The Directors had taken proper and sufficient care accountingrecords in accordancewith for the maintenance of adequate the provisions of this Act for safeguarding preventinganddetecting fraud and other the assets of the company for irregularities.
4. The Directors had prepared the Annual Accounts on a going concern basis.
13) DISCLOSURES REGARDING CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE EARNINGS & OUTGO:
Information as per the Companies (Disclosure of Particulars on the report of the Boardof Directors) Rules 1988 relating to Conservation of Energy Technology Absorption ForexEarnings and Outgo is provided in the annexure forming part of this report.
14) INTERNAL CONTROL SYSTEMS:
The company has a robust and comprehensive internal control framework to ensurereliability of financial reporting timely feedback on achievement of operational andstrategic goals compliance with policies procedures laws and regulations and at thesame time safeguarding assets and economical and efficient use of resources. The internalcontrol system commensurate with the size scale and complexity of its operations. It isbeing constantly assessed and strengthened with new/revised standard operating proceduresand robust internal and information technology controls.
The companys internal audit department objectively and independently tests thedesign and operating effectiveness of the internal control system to provide a credibleassurance to the Board and the Audit Committee regarding the adequacy and effectiveness othe internal control system. The internal audit function monitors the effectiveness ofcontrols and also provides an independent and objective assessment of the overallgovernance processes in the company.
The scope and authority of the Internal Audit activity are well defined. Internal Auditplays a key role by providing an assurance to the Board of Directors and value addingconsultancy service to the business operations.
15) BUSINESS RISK MANAGEMENT:
Your company has robust business risk management practices to identify evaluatebusiness risks and opportunities. This is monitored at the Corporate office. The businessrisks and opportunities so identifiednd a detailed action plan to mitigate the identifiedbusiness risks is thereafter drawn up and its
16) ENHANCING SHAREHOLDERS VALUE:
Your company believes that its members are among its most important stakeholders.Accordingly your companys operations are committed to the pursuit of achieving highlevels of operating performance and cost competiveness consolidating building for growthenhancing the productive asset and resource base and nurturing overall corporatereputation. The company is also committed in creating value by ensuring that its actionspositively impact the socio -economic and environmental dimensions for the society forsustainable growth and development.
17) PARTICULARS OF EMPLOYEES:
In terms of the provisions of Section 217 (2A) of the Companies Act1956 read with theCompanies (Particulars of the Employees) Rules1975 as amended the names and otherparticulars of the employees are set out in the Annexure A to the Directors Report.
During the year under review Company has not accepted any deposits from the Publicwithin the meaning of the provisions of Section 58A of the Companies Act 1956 read withthe Companies (Acceptance of Deposits) Rules 1975.
M/s. Suresh Hegde & Company Chartered Accountants Mumbai and M/s. Mukesh Mehtaand Associates Chartered Accountants Mumbai have given consent for their reappointmentas the joint statutory auditors of the Company subject to members approval in theensuing Annual General Meeting.
20) CREDIT RATING
The Company continues to have the highest domestic credit ratings of BBB Negative fromCARE which means strong reflecting the companys financial discipline and prudence.
21) BOARD COMMITTEE:
In compliance with both the mandatory and non-mandatory requirements under the ListingAgreements and the applicable laws the board has constituted the following Committees:
a) Audit Committee
b) Nomination and Remuneration Committee
c) Stakeholders Relationship Committee
d) Investment Committee
e) Corporate Social Responsibility Committee
22) CORPORATE GOVERNANCE:
The Company is committed to maintain the highest standards of corporate governance andstrictly adhere to the Corporate Governance requirements set out by SEBI.
As per clause 49 of the Listing Agreement with the stock exchanges a separate sectionon corporate governance practices followed by the company together with a certificatefrom the companys auditors confirming your Company is committed to good corporategovernance and firmly believes in and consistently follows good corporate governancepractices leading to a very high level of transparency in accounting and reporting to itsshareholders.Ther the Board and the Senior Management. A report on the CorporateGovernance and a certificate from Company forms part of the Annual Report. The Company hasfully complied with the Corporate Governance practices specified under the ListingAgreement with Stock Exchanges.
23) MANAGEMENTS DISCUSSION AND ANALYSIS:
A detailed review of operations performance and future outlook of the Company is givenseparately under the head "Managements Discussion and Analysis".
24) LISTING OF SHARES:
The shares of the Company are listed on the National Stock Exchange of India Limitedand Bombay Stock Exchange Limited. The Company has paid the annual listing fees to the NSEand BSE for the year 2014-2015.
25) HOLDING / SUBSIDIARY COMPANY:
During the year your company has incorporated three subsidiaries which can support thecompany in its trading operations in South East Asia United Arab Emirates and London. Itincludes trading in Apparels and Fine Chemicals and its proposed business interest intrading in mineral and iron ore.
The Companies incorporated are as under:
?Sudar Industries UK Ltd. Registered in United Kingdom.
?Sudar Global Industries FZE Registered in Dubai.
?Averlin Industries PTE Limited Registered in Singapore.
In terms of the sub-section (2) of section -04-2014) no Listed company 139 of the Companiesshallappoint or re-appoint an Auditing Firm as the Auditor for more than two terms of iseligible to be appointed or re-appointed in the same company after five years from thecompletion of existing term. In pursuance of the above every listed company shall complywith this requirement within a transitional period of three years from the date ofcommencement of the Act i.e. 1st April 2014.
The Companys Joint Auditors M/s Suresh Hegde & Co. and M/s Mukesh Mehta &Associates who retire at the ensuing Annual General Meeting of the Company are eligiblefor re-appointment..
The Company has received letters from all of them to the effect that -appointment ifmade would be within the their re prescribed limits under Section 141 (3) of theCompanies Act2013 and that theyarenotdisqualifiedfor re -appointment.
27) INDUSTRIAL RELATIONS:
Industrial Relations remained cordial in the Companys manufacturing locationswithout any activities.
28) RATING FROM DUN & BRADSTREET
The Company has been rated 5A2 by Dun & Bradstreet indicating financial statementsand indicates a fair overall status of the company.
Your Directors would like to inform that your company has been bestowed with theGujarat Business Excellence Award by the Small and Medium Business Development Chamber ofIndia in January 2014. Your directors would like to inform that your company has featuredin Businessworld magazine in August 2014 Indias fastest growing companies.
Your directors would like to express their appreciation for the assistance and co-operation received from bankers govt. authorities customers vendors during the year.Your directors also wish to thank all employees associates and business partners who havecontributed towards the success of the Company.
31) CAUTIONARY STATEMENT:
Statements in the Directors Report and the Management Discussion and Analysisdescribing the companys objectives expectations or forecasts may be forward lookingwithin the meaning of applications laws and regulations. Actual results may differmaterially from those expressed in the statement. Important factors that could influencethe companys operations include global and domestic demand and supply conditions changes in government regulations tax laws economic developments within the country andother factors such as litigation and industrial
| ||FOR AND ON BEHALF OF THE BOARD OF DIRECTORS || |
|PLACE: NAVI MUMBAI ||MURUGAN M. THEVAR ||M.G. SUBRAMANIAM |
|DATE: AUGUST 122014 ||MANAGING DIRECTOR ||WHOLE TIME DIRECTOR |
ANNEXURE A TO THE DIRECTORS REPORT:
Statement of particulars of employees pursuant to the provisions of Section 217(2A) ofthe Companies Act 1956 read with the Companies (Particulars of Employees) Rules 1975forming part of the Directors Report for the year ended March 31 2014.
|Sl. No. ||NAME OF THE EMPLOYEE ||DESIGNATION ||REMUNERATION (IN `RS.) ||QUALIFICATION AND EXPERIENCE ||DATE OF COMMENCEMENT OF EMPLOYMENT ||AGE ||LAST EMPLOYMENT HELD |
|1. ||Mr. Murugan M. Thevar ||Vice Chairman & Managing Director ||Rs. 6000000/- (Rupees Sixty Lacs only) ||Mr. Murugan M. Thevar is the founder and Promoter of our Company. He has completed his education from Tamilnadu. ||Mr. Murugan M. Thevar is the founder and Promoter of our Company ||47 ||N.A. |
ANNEXURE B TO THE DIRECTORS REPORT:
|PARTICULARS || |
| ||Garment ||Chemical ||Garment ||Chemical |
|(A) POWER AND FUEL CONSUMPTION || || || || |
|1. Electricity || || || || |
|a. Purchased || || || || |
|Units ||208784 ||1244106 ||180998 ||653670 |
|Total Amount (Rs. In lacs) ||27.11 ||115.42 ||17.37 ||51.76 |
|Rate/ Unit Rs. ||12.98 ||9.28 ||9.59 ||7.91 |
|b. Own Generation || || || || |
|I) Through Diesel Generator (in Liters) ||14985 ||6154 ||19098 ||1468 |
|II) Through Steam Turbine (Rs. In lacs) ||9.74 ||52.59 ||9.55 ||27.20 |
|(B) CONSUMPTION PER UNIT OF PRODUCTION || || || || |
|Product: Ready Made Garments Intermediate Chemicals || || || || |
|Production ||7680374 Pcs ||575298 Kg ||5688684 Pcs ||166215 Kg |
|Electricity ||208784 ||1244106 ||180998 ||653670 |
FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO:
TECHNOLOGY ABSORPTION ADAPTION AND INNOVATION
The Company has taken initiative in technology up gradation to improve its productivityand reduce manufacturing cost. adopted a Total Quality Management Programme toascertain and impose individual worker responsibility within the labor force therebyensuring greater quality and productivity.
| ||FOR AND ON BEHALF OF THE BOARD OF DIRECTORS || |
|PLACE: NAVI MUMBAI ||MURUGAN M. THEVAR ||M.G.SUBRAMANIAM |
|DATE: AUGUST 122014 ||MANAGING DIRECTOR ||WHOLE TIME DIRECTOR |