The Directors have pleasure in presenting the Twenty Ninth Annual Report of the Companytogether with the Audited Financial Statements for the year ended at 31stMarch 2020
|Particulars ||Current Year Ended 31.03.2020 ||Previous Year Ended 31.03.2019 |
|Revenue from operations ||9573.83 ||11143.62 |
|Other Income ||54.83 ||19.37 |
|Gross income ||9628.66 ||11162.99 |
|Profit before Interest and Depreciation ||616.37 ||1075.81 |
|Finance Cost ||389.48 ||322.02 |
|Profit after Finance Cost ||226.89 ||753.79 |
|Depreciation ||206.67 ||182.10 |
|Profit / (Loss) before Tax ||20.22 ||571.69 |
|Provision for Tax ||18.83 ||175.16 |
|Profit / (Loss) after Tax before extra ordinary items ||1.39 ||396.53 |
|Deferred Tax provision ||(0.48) ||5.51 |
|Comprehensive income/ Net of expenses ||13.74 ||(7.80) |
|Net Profit ||15.61 ||383.22 |
|Add: Brought forward from the previous year ||2061.51 ||1628.93 |
|Adjustment on account of Ind AS requirements || || |
|Amount available for appropriation ||2077.12 ||2012.15 |
|Transfer to Securities Premium / ESOP ||373.98 ||62.22 |
|Less Dividend Paid ||11.78 ||10.69 |
|Less Tax Paid on Dividend ||2.42 ||2.17 |
|Balance carried to Balance Sheet ||2436.91 ||2061.51 |
During the year under review the company witnessed lot of uncertainty and upheavals inthe economic environment as well as in the market conditions. The impact of the pandemicwas slowly gripping the economy from the beginning of the 4th. Quarter as the World HealthOrganization declared the COVID 19 as pandemic. The company had to curtail the sourcingactivities and except for few months in the year the situation was grim during the majorpart of the year. The sales declined by around 15% on value basis and the retails businesswas the major factor for the decline in the sales business. The company however wasanticipating a major boost on the demand side from the year 2021 as many simulativemeasures were taken by the government in their fiscal plan. Global economic conditionswere also remained subdued during the major part of the year 2019 and after the onset ofpandemic conditions in Europe and USA the situation was totally out of control and beyondthe imagination of any nation. In spite of all these adverse conditions also the companycould retain its ground to a large extend and closed the year with just less than 15%reduction in the overall sales. Since the company had to absorb the losses generated bythe Retail business activities the margins generated were insignificant. In view ofuncertainty persists even at this time the company is now more focused on liquidating itsinventory than developing and sourcing more garments. Therefore the sales activities areexpected to remain sluggish and much lower than anticipated originally for the year2020-21.
The company has not executed any new licentiate agreement during the year under reviewand therefore the business activities will largely focus on the existing Licentiatearrangements only. Once the pandemic situation eases the company is anticipating asignificant growth in the Retail sales activities. However in the post pandemic periodalso the company would be more focusing on Tier II and III cities to strengthen the salesactivities of the Retail division to make it a more competitive business in the sector. Atpresent the thrust is more on the on- line sales network/ e-commerce. Further the effortsare underway to add more licentiate brand under the licentiate product segment. Thecompany has started manufacturing garments under the new Licentiate agreement executedwith NBA Properties-USA and PSG-Paris. This will eventually be the driving force in theRetail Division to improve their margins substantially. There are no major disputes otherthan sales tax assessments which are pending in the respective tribunals/ assessingauthorities.
In view of inadequate profits for the year 2019-20 and also considering the prevailinguncertainty in the economic and market conditions due to COVID 19 pandemic the board hasdecided not to recommend any dividend for the year under review.
Covid 19 pandemic:
The COVID-19 pandemic has caused immense disruptions on the global economic andbusiness environment and there is a huge uncertainty with respect to its severity whichcannot be reasonably ascertained. The Company has evaluated and factored the possibleeffects in its working including the likely impact that may result from the COVID-19pandemic as well as all events and circumstances up to the date of approval of thesefinancial results on the carrying value of its assets and liabilities as at 31stMarch 2020.
The resultant impact of any event and development occurring after the balance sheetdate on the date of the financial results for the quarter and year ended 31stMarch 2020 may differ from that estimated as at the date of approval of these financialresults and will be recognized prospectively.
Though the COVID-19 has started affecting the lives of the people in the country fromthe second half of the March 2020 the company has lost almost 15% of its business for theyear 2019-20 because of the impact of this pandemic. However the impact assessment dueto COVID-19 is a continuous process even at this point of time given the uncertaintyassociated with the nature and duration. The Company will continue to monitor any materialchanges as the situation evolves. The operations of the Company are running at suboptimallevels. The operations are expected to remain impacted until
(a) customer sentiments return to normal levels;
(b) the supply chain stabilizes and
(c) the consistent availability of manpower.
However in view of the adverse impact on the Industry the government has taken somerelief measures like extending moratorium on the interest and installment paymentsredefining the MSME limits by increasing the threshold limits of the turnover andinvestment limits as well as extending term loan facility up to 20% of the amount ofworking capital utilized as on 28th. February 2020 apart from extending interestsubvention scheme to the borrowers. The company has availed the term loan under the abovescheme from its commercial banks and this has helped the company to mitigate the adverseeffects of the pandemic crisis to a large extend. The company has registered itself as amedium manufacturing unit under the revised limits of MSME with the Government of India -Ministry of Micro Small and Medium Enterprises. (The Ministry has issued certificate videregistration no. UDYAM-MH-19-0005830).
Fully Convertible Debentures:
The company had issued three numbers of Fully Convertible Debentures of Rs.1.50 croreseach aggregating to Rs.4.50 crores to the M/s. H.T. Media Limited and the same was due forconversion in the year under review. The fully Convertible debentures issued by thecompany are converted into 562500 equity shares of Rs.10/- each at a premium of Rs.70/- on19th. September 2019. All the necessary approvals are obtained from the stock exchange(BSE Ltd). The funds raised were deposited with M/s. H.T Media Ltd. as per the terms ofthe media and subscription agreement which will be utilized toward advertisement in printand non-print media for brand building exercise over a period of 4 annual terms. Thedetails of amount of expenditure are reflected in the financial statements accordingly.
In view of unfavorable market conditions there were no significant exports salesreported in the company during the year under review. However the year under review cannotbe considered as a yardstick as the entire world is reeling under the adverse impact ofCOVID 19 pandemic. The unhealthy competition among the leading textile goods manufacturingcountries continued to remain as a blockade for the growth of a healthy textile market andcreated a negative impact on the price segment of the textile items. However the companycontinued to remain focused mainly on the domestic market and adopted a wait and watchpolicy. Even though the company could not make any direct exports the company wasindirectly catering to the other exporters by supplying quality fabric. Because of thisthe company continued to draw the attention of fabric buyers from Bangladesh and otherneighboring countries apart from garment buyers from USA and Europe. Hence the companycontinued to maintain the communication channels open with these buyers in its efforts tostart the exports plan at the opportune time. However ultimately the positive changes inthe global economic conditions particularly in the US and European economies can only pavethe way for the growth of the global textile market. The company is also maintaining itsefforts to establish its identity with various reputed buyers to align with their brandsin the overseas market to promote the exports in large volume.
In spite of the unfavorable trend in the global textile market the company continuesto take active participation in various international Fairs/exhibitions. However for thepresent the company is looking at the prospects of post pandemic period which again is notvery certain. Once the stability is brought in the global economic and market conditionsIndia would be playing a major role in bringing stability in the global textile market.Hence the company is hopeful of registering better exports sales in terms of better unitvalue realization and volume. Since the company has the capacity to make wide and betterrange of products particularly in printed and embroidery varieties and also complied withvarious requirements of international standards the company is still pursuing its effortsto become exporter of quality garments.
The company has at present licentiate rights with FC Barcelona Manchester City PSGParis and NBA properties USA. The company has developed and produced wide range ofgarments under licentiate rights and the market has already responded favorably for theseproducts. These brand LOGOS are embossed on the garments under licentiate rights acquiredfor India. The company is now a recognized name in India for this particular segment ofgarments. Based on the past experience and also taking into account the strengths andweakness of these business models the company is always on the move to add more suchlicentiate arrangements. This will ensure that there are always some effective brandsunder its umbrella throughout the period to ensure growth in the Retail business. Furtherthe association with "YouWeCan" backed by celebrity cricketer Mr. Yuvraj Singhis also continued. In view of the prevailing pandemic conditions the prospects for theseproducts are to be assessed as many sporting events are either postponed or cancelled.Therefore for the year 2020-21 the company is not anticipating any favorable outcome fromthese ventures even though the situation is not a permanent in nature. The company wouldbe taking a cautious approach and formulate the plan accordingly after the ease of thepandemic situation.
The joint venture arrangement with M/s. Project Anushka Sharma Lifestyles Pvt. Ltd.(PAS Lifestyles Pvt. Ltd.) a company promoted by celebrity actor Mrs. Anushka Sharma andher family under the brand name "NUSH' is continued and the situation is expected tobecome normal as soon as there is relief in the pandemic situation. The year under reviewwas not very favorable for the joint venture in view of poor market conditions and thesubsequent pandemic situation. The company has recorded lower sales of around Rs.248 Lakhswith a loss of Rs. 73.14 Lakhs. The financial results are consolidated with SIL results.The company is hopeful of achieving better sales in future as the brand is well known andestablished in the market.
The company has not made any significant capital expenditure during the year underreview or drawn any plan for immediate implementation as indicated in the earlier years.Further in view of the prevailing pandemic situation there is no major capitalexpenditure program in the current year also and even the addition of balancing equipmentsand replacement of old machineries and equipments will be undertaken only If the same isunavoidable and urgent.
Human Resources & Industrial Relations:
The human resources development plays a crucial role in the development of anyorganization. It consists of attraction retention and development of talent in asystematic manner to fulfill the requirements of the organization. The company followsvarious programs to provide focused people attention. The emphasis is mainly on thepromotion of talent internally through job rotation and job enlargement. The Industrialrelations with the employees at the Company's plant at MIDC TTC Industrial Area PawneVillage; Navi Mumbai and in the other locations continue to remain healthy and cordial.
During the year under the company has issued 9600 shares to one employee under SUDITIESOP PLAN 2011 in the month of May 2019. Further in the month of September 2019 thecompany issued 562500 shares to M/s. H.T. Media Ltd. on conversion of 3 Fully ConvertibleDebentures amounting to Rs.4.50 crores. Accordingly the subscribed issued and paid-upcapital has increased from Rs.16.98 Crores to Rs.17.55 Crores.
Suditi Employee Stock Option Plan 2011 (Suditi ESOP 2011):
The company had made the first grant of options to the employees in the year 2013 underthe Suditi Employee Stock Option Plan 2011. Apart from this the company has furthergranted additional 13000 no. of options in the year February 2017. In addition to this thecompany has also made another special grant of 111605 options in the month of February2017 on the eve of Silver Jubilee year celebrations to some selected employees. Eachoption is equal to one share at par (Rs.10/- each) being the price fixed for exercisingthe right. There are no options pending for vesting and entire grant has been vested tillthe date of 31st March 2019.Further there are
no grants outstanding as on date of the report as the last portion remaining has alsobeen exercised. The company as not made any new grants other than those stated above. Therevised details are as follows:
|Grant no. || |
|Vested ||Exercised ||Lapsed || |
| ||No of Employees ||Tota options (Nos.) ||No of Employees ||Tota options (Nos.) ||No of Employees ||Tota options (Nos.) ||Up to the Fourth part of Grant || || ||vested ||unvested |
|First ||83 ||350800 ||20 ||253200 ||63 ||97600 ||214040 ||214040 ||39160 ||0 ||0 |
|Second ||20 ||13000 ||20 ||13000 ||0 ||0 ||13000 ||6500 ||6500 ||0 ||0 |
|Silver Jubilee ||38 ||111605 ||38 ||111605 ||0 ||0 ||111605 ||96780 ||14825 ||0 ||0 |
The disclosure of the details is as follows:-
(a) Options granted & accepted; 377805
(b) The pricing formula: At par
(c) Options vested: 338645
(d) Options exercised: During the year under review one employee has exercised theiroptions under the SUDITI ESOP PLAN 2011.
(e) As there are 9600 options exercised during the year under review 9600 shares wereallotted.
(f) Options rejected and lapsed: 158085 (consists of 97600 options rejected and 60485options lapsed)
(g) Variation of terms of options: NA
(h) Money realized by exercise of options: Rs.96000/-
(i) Total number of options in force: 0
(j) Employee wise details of options granted to:
(i) Senior managerial personnel: 251000 (includes total 152000 options granted toExecutive Director (55000) Company Secretary (50000) & Chief Financial officer(47000) and no other Director is granted any options under Suditi ESOP Plan 2011).
(ii) Any other employee who receives a grant in any one year of option amounting to 5%or more of option granted during that year: Nil
(iii) Identified employees who were granted option during any one year equal to orexceeding 1% of the issued capital (excluding outstanding warrants and conversions) of thecompany at the time of grant: Nil
(k) Diluted Earnings per Share (EPS) pursuant to issue of shares on exercise of optioncalculated in accordance with Accounting Standard (AS) 20 Earnings per Share': NA.
(l) Where the company has calculated the employee compensation cost using the intrinsicvalue of the stock options the difference between the employee compensation cost socomputed and the employee compensation cost that shall have been recognized if it had usedthe fair value of the options shall be disclosed. The impact of this difference onprofits and on EPS of the company shall also be disclosed:
As there are no options granted vested or pending for exercise there will not be anyimpact on account of this. Hence the same is not calculated and provided:
(m) Weighted-average exercise prices and weighted-average fair values of options shallbe disclosed separately for options whose exercise price either equals or exceeds or isless than the market price of the stock: NA
(n) A description of the method and significant assumptions used during the year toestimate the fair values of options including the following weighted-average information:NA
Particulars of Employees:
Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 details are stated separately in the Managerial Remuneration.
A calendar of meetings is prepared and circulated in advance to the Directors. Duringthe year six Board Meetings and four Audit Committee Meetings were convened and held. Thedetails of which are given in the Corporate Governance Report. The intervening gap betweenthe Meetings was within the period prescribed under the Companies Act 2013 including theamendments and the rules.
Pursuant to the provisions of the Companies Act 2013 and Regulation 25 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the IndependentDirectors have reviewed the performance of all the Directors including their ownperformance as well as the evaluation of the working of its Audit committee Nomination& Remuneration committee and other Compliance Committees. The details are provided inthe Corporate Governance Report.
Declaration by an Independent Director(s) and reappointment if any:
A declaration by an Independent Director(s) that they meet the criteria of independenceas provided in sub-section (6) of Section 149 of the Companies Act 2013 has beensubmitted to the Board every year in the first Board Meeting and for the year 2020-21 hasalready been submitted. An independent director shall hold office for a term up to fiveconsecutive years on the Board of a Company but shall be eligible for reappointment fornext five years on passing of a special resolution by the Company and making disclosure ofsuch appointment in the Board's report. In the opinion of the Board the independentdirectors fulfill the conditions specified in the Regulations and are independent of themanagement.
The Board based on the recommendation of the Nomination & Remuneration Committeefollows a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.
A) Details of the ratio of the remuneration of each director to the median employee'sremuneration and other details as required pursuant to Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. (Enclosed as AnnexureII)
B) Details of the every employee of the Company as required pursuant to 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Thestatement of the name of the top ten employees in terms of remuneration drawn is given inAnnexure II). Further the statement showing the requisite information pursuant to the
Companies (Appointment of Managerial Personnel) Rules 2014 is not annexed herewith asthere are no employees covered by the rule (2)(i) (ii) & (iii).
C) Any director who is in receipt of any commission from the company and who is aManaging Director or Whole-time Director of the Company shall receive any remuneration orcommission from any Holding Company or Subsidiary Company of such Company subject to itsdisclosure by the Company in the Board's Report. Nil
D) There are no disclosures to be made as the directors (except the whole timeDirector) are not in receipt of any remuneration or stock options other than sitting feesand reimbursement of expenses incurred for attending the meeting. The details arefurnished separately in the corporate governance report.
Details of Subsidiary/Joint Ventures/Associate Companies: The two subsidiary companiesM/s. Suditi Design Studio Limited and M/s. Suditi Sports Apparel Limited were incorporatedin the month of March 2015. While M/s. Suditi Design Studio Limited had commenced salesbusiness activities from the year 2015 itself the other subsidiary M/s. Suditi SportsApparel Limited is yet to commence their sales business operations. Apart from this thecompany has also entered into a joint venture arrangement with PAS Lifestyles Pvt. Ltd acompany promoted by celebrity actor Ms. Anushka Sharma and her family. The joint venturecompany M/s. SAA & Suditi Retail Pvt Ltd. Incorporated in the year 2017 has commencedits commercial business activities in the same year. The details pursuant to sub-section(3) of section 129 of the Act (AOC-1) containing the salient feature of the financialstatement of a company's subsidiary or subsidiaries associate company or companies andjoint venture or ventures etc are annexed herewith in the Notes of the Accounts. TheCompany has also presented the Consolidated Financial Results along with the StandaloneFinancial Results of the Company. The Consolidated Financial Results are the combinedperformance of the Company along with its Subsidiaries and also taking into account of theprofit or loss of the joint venture company. The details of the same are provided alongwith Notes to Accounts.
Summary of Sales:
|Particulars ||Suditi Industries Limited ||Suditi Design Studio Limited (Subsidiary) ||Suditi Sports Apparel Limited (Subsidiary) ||SAA & Suditi Retail Pvt Ltd. ||Consolidated |
|Sales ||9573.83 ||327.75 || ||247.47 ||9487.85* ** |
|Profit/(loss) ||15.61 ||(156.75) ||(10.06) ||(73.14) ||(224.92)* |
* Consolidated sales figures are arrived net of Inter Company & Joint Venturecompany sales.
** The Consolidated profit figures do not include minority interest. Going concernconcept:
The slump in the sales business activities of the subsidiaries has a direct impact onthe performance of the holding company as they also sources their part of the materialrequirement from the Company at the best prevailing market rate on arms length basis.Apart from this the losses incurred by the subsidiaries and joint venture will also affectthe holding company's earnings directly as the subsidiary companies as the investments ofthe holding company gets eroded as reflected in the consolidated financial statements. Thefinancial results of the subsidiary/joint venture companies are taken on "Goingconcern concept".
a) Suditi Sports Apparel Limited.
As stated above M/s. Suditi Sports Apparel Limited is yet to commence the businessactivities. However the company has already started the necessary process to start theoperations and towards this extend during the year the company has executed manylicentiate agreements with renowned sports clubs and entities with a view to start theproduction and sales of apparels and garments of various designs and styles. In view ofthe COVID 19 pandemic the process of commencing the sales business activities is delayed.However considering the projections based on the future prospects the management considerit appropriate at this juncture to maintain the company as a going concern and do notconsider any need to value the company for making necessary provisions to account for theimpairment in the value of the investments.
b) Suditi Design Studio Limited.
Regarding the performance of the other subsidiary company M/s. Suditi Design StudioLimited even though has commenced the business in full swing from 2015-19 itself thecompany net worth has eroded substantially due to the loss in the Retail businessactivities. The Management is of the view that considering the prevailing economicsituation in the country and also the slump prevailing in the retail sector the lossincurred by the company cannot be considered as an yardstick to measure the financialstrength of the because of the following major reasons. A) The company being a new entrantin the retail sector needs at least minimum of 3 to 4 years to stabilize the position inthe market b) The company in spite of incurring losses in the Retail business hassuccessfully established its brand name in the market for its products C) The Holdingcompany and the promoters group are extending strong support in all the spheres ofactivities apart from financial and marketing support. D) The company cannot consider thepresent situation to assess the viability of the company as the world itself is passingthrough severe Crisis due to Covid 19 Pandemic and the business sentiments are at thelowest level throughout the country. E) Since the brand name commands good customerresponse the projections for the years in the post COVID period are looking optimistic.Accordingly the management has considered it appropriate to treat the company as a goingconcern.
c) SAA & Suditi Retail Private Limited.
The Joint Venture Company M/s. SAA & Suditi Retail Private Limited has commencedthe operations in the year 2017 and has completed just three years only in the business.Although the company has generated some marginal surplus in the previous year the yearunder review the company had to incur significant losses due to sluggish market conditionsin the country. Since it is backed by the joint venture partner promoted by the celebrityactor Mrs. Anushka Sharma and Suditi industries Ltd the company could establish its namein the market which otherwise generally takes more than four years to establish andgenerate adequate profits. Accordingly the Management is of the view that considering theeconomic situation prevailing in the country the loss incurred by the company cannot beconsidered as a yardstick to measure the financial strength as the prospects for thecompany in the long run post COVID period is very encouraging. Accordingly the managementhas considered it appropriate to treat the company as a going concern.
The Company has not accepted any deposits within the meaning of Section 73 & 76 ofCompanies Act 2013 and the rules made there under.
Company has not issued any Equity shares with differential voting rights or SweatEquity shares during the year.
Energy Technology and Foreign Exchange:
The particulars relating to conservation of Energy Technology
Absorption and Foreign Exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act 2013 is given in the Annexure I forming part of thisreport.
Directors & the Key Managerial Personnel:
In accordance with the provisions of section 152 of The Companies Act 2013 theExecutive Director Shri Rajagopal Raja Chinraj retires by rotation in the forthcomingAnnual General Meeting and being eligible offer himself for reappointment. Shri. ManojKhemka were appointed as CFO(KMP) on 18th April 2019. During the year under review theChief Financial Officer Mr. Manoj Khemka has resigned from the services of the companywith effect from 01/01/2020 due to personal health reasons. The company will be takingnecessary measures in this regard after the pandemic crisis. Till then the CEO will beoverseeing the functions.
Directors' Responsibility Statement:
The Directors hereby confirm: -
i) That in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures;
ii) That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
iii) That the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv) That the Directors have prepared the annual accounts on a going concern'basis;
v) That the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively and;
vi) That the directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and were operatingeffectively;
A separate section on Corporate Governance and a certificate from the Auditors of theCompany regarding compliance of conditions of Corporate Governance as stipulated underRegulation 34 & other applicable Regulations of the SEBI (Listing Obligations &Disclosure Requirements) Regulations 2015 (Listing Regulations) form part of the AnnualReport.
In view of the new Companies (Cost Records & Audit) Rules 2014 and amendmentthereof the company is now out of the purview of the Cost Audit Report Rules.
Pursuant to the provisions of section 139 of the Act and the rules framed thereafterM/s. Chaturvedi & partners Chartered Accountants were appointed as statutoryauditors of the Company for a period of 5 years from the conclusion of the Twenty SixthAnnual general Meeting to till the conclusion of the thirty first Annual general Meetingsubject to ratification of their appointment at every Annual general Meeting. Accordinglynecessary resolution to this effect is proposed in the notice calling 29thAnnual General Meeting for the approval of the members which otherwise is not mandatory inview of the amendments to the Companies Act 2017.
Secretarial Audit Report:
In terms of Section 204 of the Companies Act 2013 and the rules made there under Shri.Shivhari Jalan Practicing Company Secretary had been appointed as Secretarial Auditors ofthe Company. The report of the Secretarial Auditors is enclosed as Annexure separately tothis report. The report is self-explanatory and does not call for any further additionalcomments since the comments are addressed separately in this report.
Internal Audit & Controls:
The Company has appointed M/s. Shambu Gupta & Co. Chartered Accountants as theinternal Auditor to carry out the internal audit functions including the task ofsuggesting and implementing the recommendations to improve the control environment. Theirscope of work includes review of processes for safeguarding the assets of the Companyreview of operational efficiency effectiveness of systems and processes and assessingthe internal control strengths in all areas. Internal Auditors findings are discussed withthe process owners and suitable corrective actions taken as per the directions of AuditCommittee on an ongoing basis to improve efficiency in operations. The term of the presentInternal Auditors is renewed for the year 2020-21.
In pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism for directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been made available to each and everystakeholder and the Company has designated a senior official as Vigilance Officers tosupport the Vigilance Mechanism functions.
Risk management policy:
A statement indicating development and implementation of a risk management policy forthe Company including identification therein of elements of risk if any that in theopinion of the Board may threaten the existence of the company as given separately in theCorporate Governance Report.
Extract of Annual Return:
As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 forms part of this Annual Report as ANNEXURE III.
Material changes and commitments if any to report affecting the financial position ofthe company which have occurred between the end of the financial year of the company towhich the financial statements relate and the date of the report:
There are no material changes other than the impact of the COVID 19 pandemic and thesubsequent closure of the plant and operations from March 23rd to the last week of May2020. The situation has not improved significantly as the company is still operating muchbelow the capacity levels. The details of these are already reported separately in thereport.
Details of significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and company's operations in future:
There are no such significant and material orders passed by any regulators to reportunder this head.
Details in respect of adequacy of internal financial controls with reference to theFinancial Statements:
There is an internal control mechanism in place and efforts are made to ensure that thefinancial statements prepared are true fair and transparent. The company has an internalaudit mechanism apart from direct supervision of the Management to ensure that all thefinancial transactions executed are in compliance with applicable laws and regulations andin line with the budget plans. Any variations or deviations are appropriately dealt withby the internal Audit department as well as by the Audit committee. The Company hasappointed an independent Chartered Accountant Firm to improve and strengthen the standardoperating procedures and same is followed. According to the management the presentmechanism followed in the company is adequate and effective. The details are also statedin the Management discussion and analysis report annexed herewith and form part of thisreport.
Particulars of loans guarantees or investments under section 186 of the companies Act:
There are no loans/guarantee or security provided during the year under review. Thedetails of investments made till date are as follows: - Details of Investments:-
|Sl Date of No investment ||Details of Investee ||Amount ||Purpose for which the proceeds from investment is proposed to be utilized by the recipient ||Date of BR ||Date of SR (if reqd) ||Expected rate of return |
|1 01/04/15 ||Suditi Sports Apparel Ltd. ||4 lakhs ||Business activities ||16/01/2015 ||NA ||8 % |
|2 01/04/15 ||Suditi Design ||4 lakhs ||Business activity ||16/01/2015 ||NA ||8% |
|14/03/16 ||Studio Ltd ||82 Lakhs ||Development of Business activity ||11/02/2016 ||NA || |
|3 05/10/17 ||SAA & SUDITI Retail Pvt. Ltd. ||5 lakhs ||Business activities ||05/10/2017 ||NA ||10% |
Particulars of contracts or arrangements with related parties:
Even though the related party transactions are undertaken within the permissible limitsof the special resolution passed by the shareholders as a matter of prudence alltransactions with related parties were also placed before the Audit Committee for itsapproval. An omnibus approval from the Audit Committee was obtained for the related partytransactions which are though repetitive in nature. All the transactions with relatedparties entered into during the year under review were in the Ordinary Course of Businessand on Arms' Length Basis in accordance with the provisions of the Act Rules madethereunder and SEBI Listing Regulations.
The Audit Committee and the Board review all the transactions entered into pursuant tothe omnibus approvals on a quarterly basis. Approval of the Members of the Company isalso obtained in case any related party transaction exceeds the prescribed limits and asgood corporate governance practice since there may be few transactions that may becarried out in the long-term interest of the Company.
The Policy on Related Party Transactions is available on the Company's website and canbe accessed at https://suditi.in/wp-content/uploads/2019/04/Related-Party-Transaction-Policy.pdf.
The particulars of contract or arrangements entered into by the Company with relatedparties at arm's length basis referred to in sub-section (1) of section 188 of theCompanies Act 2013 is disclosed in Form No. AOC-2 as Annexure IV Obligation of companyunder the "Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013:
There is a separate internal compliance committee under the "Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013" set up by thecompany. The Internal Complaints Committee is empowered to look into complaints relatingto sexual harassment at work place of any women employee.
Accordingly the Company has adopted a policy for prevention of Sexual Harassment ofWomen at workplace and the Committee ensures that the said policy is properly implementedall over the company. During the year Company has not received any complaint ofharassment.
Corporate Social Responsibility (CSR):
As per the provisions of the companies Act 2013 the company has constituted a separatecommittee in the year August 2019 to formulate the CSR policy and ensure the compliance ofthe same as per the provisions of the Companies act 2013. The Committee consists of 3members and the details are provided separately in the Corporate Governance section ofthis report. As per the audited accounts the company for the year 2019-20 the company isrequired to spend an amount of Rs.9.51 Lakhs towards this purpose. However in view of theprevailing circumstances the company has not made any expenditure till date and thedetails are separately provided. The disclosures as per Rule 9 of Companies (CorporateSocial Responsibility Policy) Rules 2014. Corporate Social Responsibility policy isenclosed as Annexure V)
Transfer of amounts to Investor Education and Protection Fund:
Unclaimed Final Dividend 2011-12 along with the Shares on which dividend had not beenclaimed for seven consecutive years were transferred to IEPF Authority as stipulated inCompanies Act 2013. Unclaimed Interim Dividend 2012-13 on which dividend had not beenclaimed for seven consecutive years were required to be transferred to IEPF Authority asstipulated in Companies Act 2013 and as per the relaxation given by MCA due to CoVID 19.
There is an amount of Rs.401257/- lying unpaid and unclaimed in the unpaid dividendaccount due to be transferred to Investor Education and Protection Fund (IEPF) by November2020. Pursuant to the provisions of the Investor Education Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has already filed the necessary form and uploaded the details of unpaid andunclaimed amounts lying with the Company as on the date of last AGM with the Ministry ofCorporate Affairs.
Listing with Stock Exchange:
The Company confirms that it has paid the Annual Listing Fees for the year 2020-2021 tothe BSE Ltd (Bombay Stock Exchange Limited) where the Company's Shares are listed.
Statement on compliances of secretarial standards:
The Board of Directors have complied with applicable Secretarial Standards as specifiedu/s. 118 of Companies Act 2013.
Your Company and its Directors wish to place on record their sincere appreciation forthe support and assistance extended by different Central and State Government Departmentsand Agencies Banks and Financial Institutions Insurance companies Customers andVendors. Your Directors are thankful to the esteemed shareholders for their continuedsupport and confidence reposed in the company and its management. Your Directors also wishto place on record their deep sense of appreciation to all the employees of the Companyfor their outstanding and dedicated contribution made towards the growth of the Company.
For and on behalf of the Board of Directors
|Place: Mumbai ||PAWAN AGARWAL |
|Date: 13.11.2020 ||CHAIRMAN |