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Suumaya Lifestyle Ltd.

BSE: 780011 Sector: Others
NSE: SUULD ISIN Code: INE591Q01016
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Suumaya Lifestyle Ltd. (SUULD) - Director Report

Company director report

To

The Members

Your Directors are pleased to present the 08th Annual Report of the Company along with Audited Accounts for the financial year ended March 31 2019.

FINANCIAL PERFORMANCE

Your Company's financial for the year ended March 31 2019 as compared to the previous financial year ended March 31 2018 is summarized below:

(Amount in Rs.)
ParticularsCurrent YearPrevious Year
2018-192017-18
Sale of Own Branded (Manufactured) Goods1750096802566098700
Sale of Traded GoodsNil3207892633
Total Income17500968023774328640
Profit before Interest Depreciation Tax & Other Amortisations (EBIDTA)5244636621431742
Net Profit before Taxation5083292521080832
Net Profit after Tax3634440614539045

REVIEW OF BUSINESS OPERATIONS AND STATE OF AFFAIRS

The present Management took the reins of the Company from 2017-18 onwards. During the year under review strategic decision was taken to discontinue the trading business of women apparels in view of low profit margins and increasing working capital requirement of the business. Hence the company did not generate revenues from trading business during the year under review.

The Company channelized its resources towards end to end production - in-house design manufacture and market Company's branded products. This has helped to increase the margins and improve brand positioning. The revenues from sale of branded goods increased by 209.15% from Rs. 566098700/- to Rs. 1750096802/-.

Although the total revenues declined by 53.63% from Rs. 3774328640/- for the year ended March 31 2018 to Rs. 1750096802/- for the year ended March 31 2019 the EBIDTA increased by 144.71% from Rs. 21431742/- to Rs. 52446366/- and the Net profit after tax soared by 149.98% from Rs. 14539045/- for the year ended March 31 2018 to Rs. 36344406/- for the year ended March 31 2019.

The Company has established presence in wholesale trade and is settng its footsteps in retail and modern trade by penetrating the market through Store in Stores Exclusive Brand Outlets Franchisees and e-commerce portals. The manpower infrastructure costs and infusion of working capital has increased substantially during the year under review. Under the robust leadership of the present Management the Company envisions steady improvement in performance due to its foray in vertical segment of western wear and kids wear having a dynamic enthusiastic and young workforce and tapping national and overseas markets.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

The Company do not have any subsidiary joint venture and associate company during the period under review.

DIVIDEND AND RESERVES

The Board of Directors of your company declared interim dividend amounting to Rs. 0.10/- per equity share of face value of Rs. 10/- each for the financial year ended March 31 2019 at the Board Meeting held on November 12 2018. The same is recommended to be considered as final dividend.

TRANSFER TO RESERVES

During the year under review no amounts was transferred to General Reserve.

AUTHORISED SHARE CAPITAL

During the year there has been no increase in the authorized share capital of the Company. The authorized share capital of the Company is Rs. 250000000/- (Rupees Twenty Five Crore Only) divided into 25000000 (Two Crore Fifty Lakhs) equity shares of Rs. 10/- each.

CHANGE IN CAPITAL STRUCTURE

During the year under review the Company has successfully raised funds by way of Initial Public Offering (IPO) by way of fresh issue of 18 88000 Equity Shares of Rs. 10/- each at an issue price of Rs. 18/- per share. A promoter shareholder Offer for sale of 5800000 Equity Shares of Rs. 10/- each at an issue price of Rs. 18/- per share (including a premium of Rs. 8.00/- per share aggregating to Rs. 615.04 Lakhs only) . The IPO opened on May 22 2018 and closed on May 25 2018. Against the subscription amount received the Company allotted equity shares on May 31 2018.

The Company is thankful to all the shareholders for giving an overwhelming response to our SME IPO which was oversubscribed by more than 1.37 times. As on March 31 2019 the issued subscribed and paid up share capital of your Company stood at Rs. 240080000/- comprising 24008000 Equity Shares of Rs. 10/- each.

STOCK EXCHANGE

The Company's shares are listed on National Stock Exchange on the Emerge (SME) Platform. Symbol - SUULD

Address of Stock Exchange:

National Stock Exchange of India Limited

Exchange Plaza C-1 Block G Bandra- Kurla Complex Bandra (E) Mumbai - 400 051

FIXED DEPOSITS

In terms of the provision of Sections 73 and 74 of the Companies Act 2013 read with the relevant rules your Company has not accepted any fixed deposits during the year under review.

CORPORATE GOVERNANCE REPORT

Since the Company is listed on Emerge (SME) platform of National Stock Exchange of India Limited during the year under review the provisions of Corporate Governance as specified in regulations 17 18 19 20 21 22 23 24 25 26 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C D and E of Schedule V of SEBI (LODR) Regulation 2015 are not applicable to the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosures Requirements) Regulation 2015 the Management Discussion and Analysis forms part of this report.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

Appointment of Director & Key Managerial Personnel

During the year the following Directors and Key Managerial Personnel were appointed in the Company:

NameDate of AppointmentPosition
Ms. Priya Gandhi10/09/2018Company Secretary and Compliance Officer
Mr. Ankit Gala13/11/2018Non-executive Independent Director
Mr. Sharad Jain11/01/2019Non-executive Independent Director
Ms. Heena Shah11/01/2019Company Secretary and Compliance Officer

Resignation of Director & Key Managerial Personnel

During the year the following Director and Key Managerial Personnel have resigned from the Company:

NameDate of AppointmentPosition
Mr. Shubham Gandhi05/09/2018Company Secretary and Compliance Officer
Ms. Sneha Dutta13/11/2018Non-executive Independent Director
Mr. Paras Desai13/11/2018Non-executive Independent Director
Ms. Priya Gandhi16/11/2018Company Secretary and Compliance Officer

Retiring by Rotation

In accordance with the provisions of Section 152 of the Companies Act 2013 and the Company's Articles of Association Ms. Ishita Gala Managing Director retires by rotation at the forthcoming Annual General Meeting and being eligible offers herself for re-appointment.

The Board recommends her re-appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

Declaration of Independence by Independent Directors

The Company has received necessary declarations from all Independent Directors of the Company confirming that they meet the criteria of independence laid down in Section 149(6) of the Companies Act. There has been no change in the circumstances which may affect their status as independent director during the year.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Company has an Internal Control System that commensurate with the size scale and complexity of its operations and that such internal financial controls are adequate and were operating effectively.

MEETINGS OF THE BOARD

The Company had Eight (8) Board Meetings on April 16 2018; May 31 2018; September 06 2018; October 18 2018; November 12 2018; January 11 2019; February 08 2019 and March 29 2019 during the year under review. The maximum interval between any two Meetings did not exceed 120 days as prescribed in the Companies Act 2013.

DISCLOSURE OF VARIOUS COMMITTEES OF BOARD OF DIRECTORS:

A. AUDIT COMMITTEE:

Your Company has re-constituted the Audit Committee (Audit Committee) vide Board Resolution dated February 08 2019. The re-constituted Audit Committee comprises following members:

Name of DirectorNature of DirectorshipStatus in Committee
Mr. Sharad JainNon-Executive Independent DirectorChairman
Mr. Sati'sh KhimawatNon-Executive Independent DirectorMember
Mr. Ankit GalaNon-Executive Independent DirectorMember

The Audit Committee acts in accordance with the terms of reference specified by the Board of Directors of the Company. Further during the year under review the Board of Directors of the Company had accepted all the recommendations of the Committee.

B. NOMINATION AND REMUNERATION COMMITTEE:

Your Company has re-constituted the Nomination and Remuneration Committee vide Board Resolution dated February 08 2019. The Nomination and Remuneration Committee comprises the following:

Name of DirectorNature of DirectorshipStatus in Committee
Mr. Satish KhimawatNon-Executive Independent DirectorChairman
Mr. Sharad JainNon-Executive Independent DirectorMember
Mr. Ankit GalaNon-Executive Independent DirectorMember

C. STAKEHOLDERS RELATIONSHIP COMMITTEE:

Your Company has re-consti'tuted the Stakeholders Relationship Committee vide Board Resolution dated February 08 2019. The re-consti'tuted Stakeholders Relationship Committee comprises the following:

Name of DirectorNature of DirectorshipStatus in Committee
Mr. Ankit GalaNon-Executive Independent DirectorChairman
Mr. Sharad JainNon-Executive Independent DirectorMember
Ms. Sati'sh KhimawatNon-Executive Independent DirectorMember

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors to the best of the knowledge and belief and according to the information explanations and representations obtained by them and after due enquiry make the following statements in terms of Section 134(3)(c) and 134(5) of the Act that: :

a) in the preparation of the annual accounts for the year ended March 31 2019 the applicable accounting standards read with requirements set out under Schedule III to the Act have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31 2019 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION

The Board of the Directors has framed the policy which lays down a framework in relation to Remuneration of Directors Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The Nomination and Remuneration Policy is available at website of the Company under weblink: www.suumavalifestyle.com.

PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND DIRECTORS

The Board of Directors of the Company has initiated and put in place evaluation of its own performance its committees and individual directors. The results of the evaluation are satisfactory and adequate and meet the requirement of the Company.

AUDITORS

Statutory Auditors and Auditors' Report

M/s. Moti'lal & Associates Chartered Accountants (Firm Registration No. 106584W) were appointed as Statutory Auditors of the Company for a term of 3 (three) consecutive years at the 5th AGM held on September 30 2016 to hold office till the conclusion of 8th AGM of the Company. The Company intends to appoint M/s Chahan Vora & Associates Chartered Accountant Mumbai (FRN: 147060W) as Statutory Auditors for term of 5 years.

The Auditors' Report does not contain any qualification reservation adverse remark or disclaimer.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules made thereunder the Company has appointed M/s. R.A Gala & Associates Company Secretaries in Practice to undertake the Secretarial Audit of the Company.

The Secretarial Audit Report is annexed as Annexure A and forms an integral part of this Report.

The auditor mentioned about the delay in transfer of funds to escrow account and payment of dividend to the shareholders. The said delay was due to technical difficulties of change in Compliance Officer and inability to withdraw funds for a short term of 3 weeks. This was subsequently rectified and payment of dividend has been made to shareholders with interest as per the statute. Except this there were no qualifications reservation or adverse remark or disclaimer made by Secretarial Auditor in its report.

Internal Auditor

Pursuant to the provisions of Section 138 of the Companies Act 2013 the Company had appointed M/s Sudheendra and Company LLP Chartered Accountants as Internal Auditors of the Company for the financial year 2018-19.

REPORTING OF FRAUDS BY AUDITORS

During the year under review neither the statutory auditor nor the secretarial auditor has reported to the audit committee under section 143(12) of the Companies Act 2013 any instances of fraud committed against the Company by its officers or employees the details of which would need to be mentioned in the Board's report.

COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of section 148(1) of the Companies Act 2013 is not applicable for the business activities carried out by the company for the financial year 2018-19.

EXTRACT OF ANNUAL RETURN

Pursuant to section 92(3) of the Companies Act 2013 ('the Act') and rule 12(1) of the Companies (Management and Administration) Rules 2014 extract of annual return is uploaded on the Company's website www.suumayalifestyle.com .

RELATED PARTY TRANSACTIONS

All contracts/arrangements/transacti'ons entered by the Company during the financial year with related party were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with Promoters Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. Accordingly the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act 2013 in Form AOC-2 is not applicable.

VIGIL MECHANISM / WHISTLE BLOWER

There is a Vigil Mechanism Policy in the Company and that no personnel has been denied access to the Chairman of the Audit Committee. The policy provides for adequate safeguards against victimization of persons who use vigil mechanism.

RISK MANAGEMENT

The Company has developed and implemented a Risk management Policy including identification of element of risk and its severity that may impact the existence of the Company. There is no element of risk identified by the Management that may in the opinion of the Board threaten the existence of the Company.

CORPORATE SOCIAL RESPONSIBILITY

Provisions of Section 135 of the Companies Act 2013 read with applicable Rules are not applicable during the year under review.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The details of Loans Guarantees or Investments covered under the provisions of Section 186 of the Companies Act 2013 forms part of notes to the Financial Statements.

PARTICULARS OF EMPLOYEES

In accordance with the requirements of Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended regarding employees is given in Annexure-B and forms an integral part of this Report.

PARTICULARS OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EARNINGS AND OUTGO

The information pursuant to Section 217(1) (e) of the Companies (Disclosures of Particulars in the report of Board of Directors) Rules 1988 is as under:

 Conservation of Energy: Nil

 Technology Absorption Research & Development: Nil

 Foreign Exchange Earning / Outgo: Nil.

As the Company is involved in manufacturing of garments & fabrics which are termed as non-polluting industry hence the above is not applicable.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS

No significant and material orders have been passed by the Regulators/Courts/Tribunals impacting the going concern status and Company's operations in future.

ENVIRONMENT AND SAFETY

Your Company is conscious of the importance of environmentally clean and safe operations. Your Company endeavors that the conduct of all operations are in such manner so as to ensure safety of all concerned compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION & REDRESSAL) ACT 2013

There is no case filed during the financial year under the said Act hence the company has no details to offer.

SECRETARIAL STANDARDS

The Company complies with all applicable secretarial standards issued by Institute of Company Secretaries of India.

APPRECIATION

Your Directors takes this opportunity to express their deep sense of gratitude to high degree of professionalism commitment and dedication displayed by employees at all levels. Your Directors also wish to thank its esteemed corporate clients dealers agents suppliers technology partners investors Government Authorities and bankers for their continued support and faith reposed in the Company. The Directors are deeply grateful to the shareholders for the confidence and faith that they have always reposed in the Company.

For and on behalf of the Board

Ishita GalaAnkit Gala
Managing DirectorIndependent Director
(DIN:07165038)(DIN : 08271752)
Date: August 12 2019
Place: Mumbai