Surbhi Industries Ltd.
|BSE: 514260||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE899E01019|
|BSE 00:00 | 29 Jun||Surbhi Industries Ltd|
|NSE 05:30 | 01 Jan||Surbhi Industries Ltd|
|BSE: 514260||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE899E01019|
|BSE 00:00 | 29 Jun||Surbhi Industries Ltd|
|NSE 05:30 | 01 Jan||Surbhi Industries Ltd|
To Dear Shareholders
The Directors of your Company have pleasure in submitting their Twenty Ninth AnnualReport together with the Audited Financial Statements for the year ended 31stMarch 2021.
During the year under review the company had turnover of Rs. 1803.27 lakh against theprevious year turnover of Rs. 2875.74 lakh which shows approximately 37.29% decrease incomparison with the previous year. This is mainly due to impact of COVID-19. The companyhad occurred profit after tax of Rs. 155.117 Lakh during the year compared to previousyear's profit of Rs. 280.42 Lakh. Overall market was on improving mode for the textileindustry during the year 2020-21. Company able to maintain reasonable profit and netprofit ratio slipped to 1.15% and gross margin increase to 2.31% mainly due to decrease insales and less financial cost during the year. However company intend to reach to normalworking condition even after impact of COVID.
Due to COVID-19 market conditions are badly impacted and overall textile market forcurrent financial year 2021-22 first two quarters are deeply impacted on labour/workforceraw material transportation and individual as well as commercial demands are heavilyimpacted. Even after market conditions returning to normalcy first quarter of financialyear 2021-22 was also impacted due to second wave of COVID. Company expect to normalisethe market by the during the year unless any foreseen event/third wave of COVID occurred.
In view of requirement of financial resources and considering the future requirementsof funds your Directors are unable to recommend any Dividend for the year ended 31stMarch 2021.
TRANSFER TO RESERVES
No amount has been transferred to General Reserve Account.
Pursuant Section92 (3) Annual Return will be available on following web link:http://www.surbhi.com/pdf/annual-reports/annual-return-form-march-2021.pdf.
Company will upload the Annual Return as per the provisions of the Company's Act 2013.
COVID -19 has effected overall business environment local as well as internationalmarket adversely effected. Efforts are being made to assess the situation and to providebetter result than earlier years. In view of the increased activities expansions andprograms to grab the emerging opportunities are under hold and after re-assessment of thesame further business expansion activities will be done. During the third and fourthquarter of the year 2020-21 business conditions were improved but second wave of COVID 19impacted the first quarter of the year 2021-22
Pursuant to Section 152 of the Companies Act 2013 Mr. Ravjibhai Parbatbhai PatelDirector of the Company is liable to retire at the ensuing Annual General Meeting of theCompany and he being eligible offers himself for re-appointment. Your directorsrecommend for his appointment. None of the directors or KMP except Mr. RavjibhaiParbatbhai Patel being appointee and Mr. Bipinbhai J. Patel being relative are interestedin the said resolution.
A brief resume of director(s) retiring by rotation seeking appointment at the ensuingAnnual General Meeting nature of their expertise in specific functional areas and name ofcompanies in which they hold directorship and/or membership/ Chairmanship of Committees ofBoard as stipulated under Regulations of LODR Regulation 2015 are given in the AnnualReport.
Mr. Ravjibhai Patel was appointed as Managing Director on Board Meeting held on01.04.2021 and details of his appointment are given at Corporate Governance Report.
Tenure of Mr. Bipinbhai J. Patel ending on 01.10.2021 and as per recommendation of NRChis details of appointment are given at Corporate Governance Report.
DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
All the properties and the insurable interest of the company including building plantsand machinery and stocks wherever necessary and to the extent required have beenadequately insured.
M/s VIKRANT B. GHAEL & CO. (Firm Registration no. 122734W) have tendered theirresignation from the position of Statutory Auditor for the financial year 2020-21 due tochange in name and constitution of their firm resulting into a casual vacancy in theoffice of Statutory Auditor of the Company as envisaged by section 139(8) of the CompaniesAct 2013 ("Act"). Casual vacancy caused by the resignation of auditor wasfilled by Board of Directors on recommendation of Audit committee and M/S GHAEL CHOKSI& COMPANY (Firm Registration No. 0153978W) Surat were appointed as the StatutoryAuditor of the Company to fill the casual vacancy at Board meeting held on 10.11.2020 andappointment confirm by members at an Extra-ordinary General Meeting held on 9thFebruary 2021.
The Board of Directors on recommendation of audit committee the Company recommends toappoint M/S GHAEL CHOKSI & COMPANY (Firm Registration No. 0153978W from the conclusionof 29th Annual General Meeting to conclusion of 34th Annual GeneralMeeting on such remuneration as may be agreed upon by the Audit Committee/Board ofDirectors in consultation with the Statutory Auditors. As required under the provisions ofSection 139 of the Companies Act 2013 the Company has obtained written confirmation fromM/S GHAEL CHOKSI & COMPANY confirming to the effect that their appointment would beaccordance with the provision of Section 141 of the Companies Act 2013.
In the opinion of the directors the notes to the accounts are self-explanatory andadequately explained the matters which are dealt with by the auditors.
There is no adverse remarks in the report and hence nothing to report thereon.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm:
1. That in the preparation of the annual accounts the applicable accounting standardshave been followed and there are no material departures.
2. That such accounting policies have been selected and applied consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year ended on 31stMarch 2021 and of the Profit & Loss of the Company for that period.
3. That proper and sufficient care has been taken 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.
4. That the annual accounts have been prepared on a going concern basis
5. That internal financial controls have been laid down to be followed by the Companyand that such internal financial controls are adequate and operating effectively.
6. That proper system has been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants and the reviews performed by management andthe relevant board committees including the audit committee the board is of the opinionthat the Company's internal financial controls were adequate and effective during thefinancial year 2020-21.
A detail of risk management committee is given under the Corporate Governance reportwhich is forming part of this report.
NUMBER OF MEETINGS OF THE BOARD& COMMITTEES
For details of the meetings of the board please refer to the corporate governancereport which forms part of this report.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section
178(3) of the Act has been disclosed in the corporate governance report which isforming part of the directors' report.
DECLARATION OF INDEPENDENT DIRECTORS
Pursuant to the provisions of Section 149 of the Act which came into effect from April1 2014 Mr. Satish Narandas Patel (DIN: 08168748) and Mrs. Sheetal Harsh Patel (DIN:06858676) were appointed as independent directors at the annual general meeting of theCompany held on 30th June 2018. The terms and conditions of appointment ofindependent directors are as per Schedule IV of the Act. They have submitted a declarationthat each of them meets the criteria of independence as provided in Section 149(6) of theAct and there has been no change in the circumstances which may affect their status asindependent director during the year.
SECRETARIAL AUDIT AND OBSERVATIONS
Pursuant to the provisions of Section 204 of Companies Act 2013 and rules made thereunder the Company has appointed M/S. Ankita Surana & Associates Practicing CompanySecretaries to undertake the Secretarial Audit of the Company.
Report of the secretarial auditor will be given as an Annexure-A2 which forms part ofthis report. There is no adverse remark on the Secretarial Audit report and other detailsare self-explanatory.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The loans if any made by the Company are within the limits prescribed u/s 186 of theCompanies Act 2013 and no guarantee or security is provided by the company.
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
TRANSACTIONS WITH RELATED PARTIES
None of the transactions with related parties falls under the scope of section 188(1)of the Act. Information on transactions with related parties pursuant to section 134(3)(h)of the Act read with rule 8(2) of the Companies(Accounts) Rules 2014 are given inAnnexure A1 in Form AOC-2 and the same forms part of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
CONSERVATION OF ENERGY:
Company's knitting and twisting plants are running with electricity which is suppliedby the Dakshin
Gujarat Vij Company Limited. The plants are periodically checked as a measure ofperiodical maintenance to minimal break down and energy conservation. However company'production facilities do not offer much scope for energy conservation.
a) Steps taken or Impact on conservation of energy: Company has installed windmills to conserve the natural resources and to promote green energy.
During the year total 6.29 lakh units were generated through wind mill and credit ofthese units were given by DGVCL against its electricity consumption by the unit.
b) Steps taken by the company for utilizing alternate source of energy: Companyis using wind energy as alternate source of energy and the electricity generated by thewind mill was given as credit in the electricity bills raised by the DGVCL.
c) Capital investment on energy conservation equipment: Company has madeinvestment in wind mill only.
A. Power and Fuel Consumption:
The Company's plant is running satisfactorily. No other technology is involved inCompany's facility other than windmill power generation. No amount was used in research& development
CORPORATE SOCIAL RESPONSIBILITY:
Our company does not fall under the purview of Section 135 of companies Act 2013.Hence no Corporate Social Responsibility initiatives have been taken during the year.However company do carry on CSR activities on its own as and when deemed fit.
The board of directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the Act and thecorporate governance requirements as prescribed by Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations").
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the committees was evaluated by the board after seeking inputs fromthe committee members on the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the individual directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.
In a separate meeting of independent Directors performance of non-independentdirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent Directors at which the performance of the Board its committees andindividual directors was also discussed.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The details in respect of internal financial control and their adequacy are included inthe management discussion & analysis which forms part of this report.
As per Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the company is not required to comply with the provisions of Regulations17 to 27 and Clauses (b) to (i) of sub regulation (2) of Regulation 46 and para C D and Eof Schedule V respectively but for better governance the Company had voluntarilycomplied the same to the extent possible.
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the report of the Corporate Governance and the Certificate of the Auditors of the Companyin respect of compliance thereof are appended hereto and forming part of this report.
Applicable provisions of Cost Audit compliance if any were dealt separately. Duringthe year under review cost audit was not applicable to company and pursuant to Section 148(1) company had maintained the applicable cost records.
Upto 11th November 2020 status of company was suspended for trading andhence no trading data available on BSE Ltd. Efforts of the company get the fruits and videBSE notice number 20201104-9 dated 4th November 2020 revoked suspension intrading of equity shares of the w.e.f. November 12 2020.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow: a. The ratio of the remuneration of each director to the median remuneration ofthe employees of the
Company for the financial year*:
Note: Generally more than 85% of employees are of daily wage earner or of blue collarworkers and hence statistical date of median remuneration are not comparable in this typeof industries. b. The percentage increase in remuneration of each director chiefexecutive officer chief financial officer company secretary in the financial year *
c. The percentage increase in the median remuneration of employees in the financialyear*- approx.
* Company operates in the field of textile where in most of the employees are ondaily wages basis most of them are of operator helper and cleaner category and due tohigh attrition and irregular presence the salary of average employees are aroundapproximate Rs. 360-410 per day. In our case comparison of median salary of employee andKMP is not comparable.
d. The number of permanent employees on the rolls of Company- 84 employees.
e. The explanation on the relationship between average increase in remuneration andCompany performance
On an average there is approximate 8-15 % rise in the remuneration of the employees.
The increase in remuneration is in line with the market trends in the respectiveindustries. Generally market rates are decided on the availability of the worker in thesurrounding areas sometimes during festive season daily wages workers travelled to theirhome location and during that period considering the requirement of organization and needof productions higher rates were also required to be paid. In order to ensure thatremuneration reflects Company performance the performance pay is also linked toorganization performance apart from an individual's performance.
f. Comparison of the remuneration of the key managerial personnel against theperformance of the Company
During the previous year under review company had made expansion and cost ofdepreciation was higher the time and contribution given by the KMP can not only measuredin terms of percentages.
g. Variations in the market capitalisation of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year:*
*As on date previous year status of company was suspended for trading and hence notrading data available on BSE Ltd for previous year. In absence of trading value andmarket capitalization the above data could not be comparable.
h. Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last public offer
Up to 11th November.2020 status of company was suspended for trading andhence no trading data available on BSE Ltd. Efforts of the company get the fruits and videBSE notice number 20201104-9 dated 4th November 2020 revoked suspension intrading of equity shares of the w.e.f. November 12 2020. In absence of trading value andmarket capitalization the above data could not be comparable. The shares of company's arethinly traded and there is no such volume of trading in the scrip of the company. Companyhad issued shares before two decades and thereafter company was not in a good financialcondition and the shares of the company were delisted and thereafter company made effortsto revoke the trading and since then price of the company's scrip is showing thin trading.Hence the data pertain to above is not comparable.
i. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
j. Comparison of each remuneration of the key managerial personnel against theperformance of the Company:
k. The key parameters for any variable component of remuneration availed by thedirectors: N.A.
l. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year: None
m. Affirmation that the remuneration is as per the remuneration policy of the Company:
The Directors of Company affirms remuneration is as per the remuneration policy of theCompany. n. Percentage increase over decrease in the market quotations of the shares ofthe Company in comparison to the rate at which the Company came out with the last publicoffer
Upto 11th November 2020 status of company was suspended for trading andhence no trading data available on BSE Ltd. Efforts of the company get the fruits and videBSE notice number 20201104-9 dated 4th November 2020 suspension in trading ofequity shares of the company was revoked w.e.f. November 12 2020. In absence of tradingvalue and market capitalization the above data could not be comparable. The shares ofcompany's are thinly traded and there is no such volume of trading in the scrip of thecompany. Company had issued shares before two decades and thereafter company was not in agood financial condition and the shares of the company were delisted and thereaftercompany made efforts to revoke the trading and since then price of the company's scrip isshowing thin trading. Hence the data pertain to above is not comparable.
Company is regularly paying Income tax Sales Tax and other statutory dues likeProvident Fund ESIC as applicable. As regard to Service Tax appropriate provision andtreatments have been made as per law. Details of the payment refund and appeals anddisputed amount have been adequately provided in audit report and the same areself-explanatory and the amount of dispute is being dealt with various authorities andawaiting for final outcome.
Your Company's relations with its employees remained cordial throughout the year. TheDirectors wish to place on record their deep appreciation for the services rendered bystaff members and executives of the company. Your company has taken adequate steps for thehealth and safety of its employees.
Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013
MATERIAL CHANGES AFFECTING FINANCIAL POISTION OF THE COMPANY
No material changes or commitments affecting the financial position of the Companyhave occurred between the end of the financial year of the company to which the financialstatements relate i.e. 31st March 2021 and the date of Board Report. Companyis assessing impact of COVID in the textile industry and the same is seen as majorchallenges to the industry. Year 2020 become year of challenges COVID-19 pandemic changethe life of industry and market. Government of India and local authority had imposed lockdown as and when necessary and due to the same industry is facing lots of problems withrespect to labor raw material transportation working hours etc. First two Quarters ofthe year 2020-21 was heavily impacted and second quarter show some sign of recovery inmarket. However company expects to normalize the market condition by end of fourthquarter unless contrary event occurred. During the second wave of COVID company managed tocarry on operations with appropriate norms.
ORDERS PASSED BY REGULATORY BODIES OR COURTS
No regulatory body or court or tribunal has passed any significant and material ordersimpacting the going concern status and operations of the company. During the year BSE Ltd.vide its notice number 20201104-9 dated 4th November 2020 revoked suspension intrading of equity shares of the company w.e.f. November 12 2020.
COVID -19 Pandemic
In accordance with the third proviso to Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its standalone financial statements andall other documents required to be attached thereto has been hosted on its websitewww.surbhi.com.
Considering the relaxations provided by Ministry of Corporate Affairs on account ofCOVID-19 and difficulties involved in dispatch of physical copies of financial statementsthe Company has not printed Annual Report for the financial year 2020-21. The members arerequested to take note of the same. Further please note that the said financialstatements along with other necessary documents/ registers will be available forinspection by the Members of the Company at the Registered Office of the Company duringbusiness hours from 10.00 a.m. to 12.30 p.m. on all working days except SaturdaysSundays Bank Holidays and National Holidays. However the members are requested toprovide prior intimation of the same.