Sysco Industries Ltd.
|BSE: 539842||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE410U01011|
|BSE 00:00 | 09 Dec||Sysco Industries Ltd|
|NSE 05:30 | 01 Jan||Sysco Industries Ltd|
|BSE: 539842||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE410U01011|
|BSE 00:00 | 09 Dec||Sysco Industries Ltd|
|NSE 05:30 | 01 Jan||Sysco Industries Ltd|
SYSCO INDUSTRIES LIMITED.
Your directors have pleasure in presenting herewith the 08th Annual Reportalong with its Audited Financial Statements for the year ended on 31st March2017 of your Company.
SUMMARISED FINANCIAL RESULTS
The Financial performance of the company during the year is as under:
The company has engaged in business of manufacturing. During the year the company hasearned total income of Rs. 15871.44 lakhs (Previous year Rs. 11051.93 lakhs) and totalexpenses of Rs. 15145.09 lakhs (Previous year of Rs. 10575.53 lakhs). After all thefinancial adjustments the company has earned a net profit after tax of Rs. 566.93 lakhs(Previous year Rs. 339.32 lakhs).
No dividend was declared for the current financial year due to conservation of profits.
The amount of profit is transferred to the Reserve and Surplus Account.
REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
The company has accumulated profits at the end of the Financial Year. In order toimprove the performance further the Company continues its focus on cost efficienciesimproving product quality and developing capabilities for servicing the stringentrequirements of customers.
Your Company has boosted its sales and thus the profitability by increasing theproduction capacity by installing new machines for forward and backward integration. Thishas helped us to tap the big names in the industry and there after building up ourcustomer range. Our focus is on optimal utilization of resources less cost and moreprofit.
DETAILS OF THE ASSOCIATES/ JOINT VENTURE / SUBSIDIARIES COMAPANIES
The company does not have holding or subsidiary companies during the year and no othercompany has become holding / subsidiary/ joint venture.
SHARE CAPITAL STRUCTURE
The Issued Subscribed and Paid-up equity share capital as on 31st March 2017 was Rs.7 95 37000.00. There was no public issue right issue bonus issue or preferentialissue etc. during the year.
MEETINGS OF THE BOARD
The Board met six times during the financial year. Details of meetings are given in theCorporate Governance Report annexed herewith and forms part of this report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
The Company has not accepted any public deposit during the year under review and noamount against the same was outstanding at the end of the year.
In conformity with provision of Regulation 34 of SEBI (LODR) Regulations 2015 therequired disclosures for the year ended 31.03.2017 are annexed hereto. The equity sharesof the Company are listed on the BSE Ltd on SME platform.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declarations from each Independent Director of theCompany confirming that he/she met with the criteria of independence as laid out insub-section (6) of Section 149 of the Companies Act 2013 and under Regulation 16(1)(b) ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
A diverse Board enables efficient functioning through differences in perspective andskill and also fosters differentiated thought processes at the back of varied industrialand management expertise gender knowledge and geographical background. The Companyfollows diverse Board structure.
As per the provisions of the Companies Act 2013 and SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 the formal annual evaluation was carried outfor the Board's own performance its committee & Individual directors.
The performance of the Board was evaluated by the Board after seeking inputs from theDirectors on the basis of the criteria such as the Board Composition and structureseffectiveness 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 criteria such as the contributionof the individual Director to the Board and Committee meetings like preparedness on theissues to be discussed meaningful and constructive contribution and inputs in meetingsetc. In addition the Chairman was also evaluated on the key aspect of 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 the 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. Performance evaluation of Independent Director'swas done by the entire Board excluding the Independent Directors being evaluated.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required under Section 134 (3) (m) of the Act read with Rule 8 of The Companies(Accounts) Rules 2014 particulars relating to conservation of Energy R & DTechnology absorption and Foreign Exchange earnings / outgo are separately provided in theannexure to the Directors' Report as Annexure -1.
DEMATERIALISATION OF SECURITIES
Your Company's Equity shares are admitted in the System of Dematerialization by boththe Depositories namely NSDL and CDSL. The Company has signed tripartite Agreement throughRegistrar and Share Transfer Agent M/s Bigshare Services Pvt. Ltd. The Investors areadvised to take advantage of timely dematerialization of their securities. The ISINallotted to your Company is INE410U01011. Total Share dematerialized up to 31st March 2017were 7920400 which constitute 99.58% of total capital. Your Directors request all theshareholders to dematerialize their shareholding in the company as early as possible.
The Company has not made any provision for the Gratuity. However employees employedfor more than five years are still associated and working in our organization. We are inposition to pay them when they will leave the Company. The Company will make theprovisions for the Gratuity in the 2017-2018.
The Company has not made any payment of Bonus to its eligible employees under the BonusAct in the financial year 2016-2017. It will pay in 2017-2018 complying the provisions ofthe Bonus Act applicable.
HEALTH SAFETY AND ENVIRONMENT
Safety and occupational health responsibilities are integral to your Company's businessprocess. Safety is a key performance indicator and your Company is committed to ensuringzero harm to its employees to any person in the Company premises and to the community.The Company is continuously focusing on improved training new initiatives andcommunications enhancing safety in the work place. Apart from safety initiatives yourCompany is also focusing on environment protection policy.
The Company has obtained necessary approvals from concerned Government Department /Pollution Control Board.
DIRECTORS RETIRING BY ROTATION
Mr. Saurabh Bharatbhushan Jain shall retire by rotation at the ensuing Annual GeneralMeeting as per provisions of Law. He is eligible for reappointment and has offered himselffor directorship of the company. Your directors recommend for his reappointment.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of section 134 Clause (c) of Sub-Section (3) of the Companies Act 2013 inrelation to financial statements for the year 2016-17 the Board of Directors state:
a) In the preparation of the annual accounts for the financial year ended 31st March2017 as far as possible and to the extent if any accounting standards mentioned by theauditors in their report as not complied with all other applicable accounting standardshave been followed along with proper explanation relating to material departure;
b) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year andprofit and loss account of the Company for that period;
c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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; and
e) The Directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and are operatingeffectively.
f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
APPOINTMENT OF DIRECTORS AND CRITERIA FOR DETERMINING QUALIFICATIONS POSITIVEATTRIBUTES INDEPENDENCE OF A DIRECTOR
The NRC is responsible for developing competency requirements for the Board based onthe industry and strategy of your Company. The NRC reviews and meets potential candidatesprior to recommending their nomination to the Board. At the time of appointment specificrequirements for the
position including expert knowledge expected is communicated to the appointee. TheNRC has formulated the criteria for determining qualifications positive attributes andindependence of Directors in terms of provisions of Section 178 (3) of the Act and theSEBI Listing Regulations 2015 as stated under:
Independence: A Director will be considered as an 'Independent Director' if he /she meets with the criteria for 'Independence' as laid down in the Act Regulation 16 ofthe SEBI Listing Regulations and the Governance Guidelines.
Competency: A transparent Board nomination process is in place that encouragesdiversity of thought experience knowledge perspective age and gender. It is ensuredthat the Board comprises a mix of members with different educational qualificationsknowledge and who possess adequate experience in banking and finance accounting andtaxation economics legal and regulatory matters consumer industry hospitality sectorand other disciplines related to the company's businesses.
Additional Positive Attributes:
The Directors should not have any other pecuniary relationship with yourCompany its subsidiaries associates or joint ventures and the Company's promotersexcept as provided under law.
The Directors should maintain an arm's length relationship between themselvesand the employees of the Company as also with the directors and employees of itssubsidiaries associates joint ventures promoters and stakeholders for whom therelationship with these entities is material.
The Directors should not be the subject of proved allegations of illegal orunethical behaviour in their private or professional lives.
The Directors should have the ability to devote sufficient time to the affairsof your Company. REMUNERATION POLICY
Your Company had adopted a Remuneration Policy for the Directors KMP and otheremployees pursuant to the provisions of the Act and the SEBI Listing Regulations.
The key principles governing your Company's Remuneration Policy are as follows:
Remuneration to Managing Director / Whole-time Directors
a) The Remuneration/ Commission etc. to be paid to Managing Director / Whole-timeDirectors etc. shall be governed as per provisions of the Companies Act 2013 and rulesmade there under or any other enactment for the time being in force and the approvalsobtained from the Members of the Company.
b) The Nomination and Remuneration Committee shall make such recommendations to theBoard of Directors as it may consider appropriate with regard to remuneration to ManagingDirector / Whole-time Directors.
Remuneration to Non- Executive / Independent Directors
a) The Non-Executive / Independent Directors may receive sitting fees and such otherremuneration as permissible under the provisions of Companies Act 2013. The amount ofsitting fees shall be such as may be recommended by the Nomination and RemunerationCommittee and approved by the Board of Directors.
b) All the remuneration of the Non- Executive / Independent Directors (excludingremuneration for attending meetings as prescribed under Section 197 (5) of the CompaniesAct 2013) shall be subject to ceiling/ limits as provided under Companies Act 2013 andrules made there under or any other enactment for the time being in force. The amount ofsuch remuneration shall be such as may be recommended by the Nomination and RemunerationCommittee and approved by the Board of Directors or shareholders as the case may be.
c) An Independent Director shall not be eligible to get Stock Options and also shallnot be eligible to participate in any share based payment schemes of the Company.
d) Any remuneration paid to Non- Executive / Independent Directors for servicesrendered which are of professional in nature shall not be considered as part of theremuneration for the purposes of clause (b) above if the following conditions aresatisfied:
a) The Services are rendered by such Director in his capacity as the professional; and
b) In the opinion of the Committee the director possesses the requisite qualificationfor the practice of that profession.
Remuneration to Key Managerial Personnel Senior Management and other employees
The remuneration to Key Managerial Personnel Senior Management and other employeeshall consist of fixed pay and incentive pay in compliance with the provisions of theCompanies Act 2013 and in accordance with the Company's Policy.
DISCLOUSER AS PER COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)RULE 2014
The disclosure required under Section 197(12) of the Companies Act 2013 read with theRule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rule 2014 isannexed as Annexure - 2 and forms an integral part of this Report.
The details of Remuneration paid to the Directors of the Company are given in MGT-9forming part of the Directors' Report
PARTICULARS OF THE EMPLOYEES
Particulars of the employees as required under provisions of Section 197 (12) of theAct read with Rule 5 of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended from time to time are not attached with this reportsince there was no employee who was in receipt of remuneration in excess of Rs.8.5 Lakhsper month during the year or Rs. 1.02 Crores per annum in the aggregate if employed partof the year.
DETAILS OF RELATED PARTIES TRANSACTIONS PURUSANT TO SECTION 188(1) OF THE COMPANIESACT 2013
The Company is not entering into related parties transactions for sale/purchase ofgoods or services at preferential prices. However all the transactions in the nature ofsales/purchase of goods or services are
made on arm's length basis. The same were reported to the Board at every meeting andBoard took a note of the same and approved. Other details for inter corporate financialtransactions or remuneration and other benefits paid to directors their relatives keymanagerial personnel etc. are given as per requirements of AS 18.
Pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies(Accounts) Rules 2014 information pertaining to related parties are given in Form AOC-2below Annexure - 3.
DETAILS OF LOANS GUARANTEES AND INVESTMENTS U/S 186 OF THE COMPANIES ACT 2013
During the year under review the Company has not made any inter corporate loansinvestments given any corporate guarantee to any other body corporate subsidiaryassociate or any other company.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with rulesmade thereunder the Board of Directors has appointed M/s Kamlesh Shah & Co.Practicing Company Secretaries as Secretarial Auditor to conduct Secretarial Audit of theCompany for the Financial Year 2016-17. The report submitted by the Secretarial Auditor inForm MR-3 is attached to this report as Annexure - 4. The remark of secretarialauditor is self explanatory in nature.
M/s. Adukia & Company Chartered Accountants an Auditors firm are statutoryauditors of the company since 2014-15. As per Rule 6(3) of the Companies (Audit andAuditors) Rules 2014 they are eligible to continue as the statutory auditors of thecompany for financial years 2014-15 2015-16 2016-17 201718 and 2018-19. NecessaryResolution for ratification of their appointment as the Statutory Auditors and fixingtheir remuneration is proposed to be passed at the Annual General Meeting.
EXTRACT OF ANNUAL RETURN
In compliance with Section 134(3)(a) of the Act an extract of Annual Return in theprescribed format is appended to this report as Annexure - 5.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management discussion and perceptions on existing business future outlook of theindustry future expansion and diversification plans of the Company and future course ofaction for the development of the Company are fully explained separately Annexure - 6.
As required by the SEBI Listing Regulations the report on Corporate Governance as wellas the Practising Company Secretary's Certificate regarding compliance of conditions ofCorporate Governance form part of the Annual Report. All Board members and seniormanagement personnel have affirmed compliance with the Code of Conduct for the year2016-17. A declaration to this effect signed by the Managing Director of the Company iscontained in this Annual Report. The Managing Director and CFO have certified to the Boardwith regard to the financial statements and other matters as required under the ListingRegulations. The abovementioned Corporate Governance Report is annexed to this Report as Annexure- 7.
INTERNAL CONTROL SYSTEM
Your Company has in place an adequate system of internal controls. The effectiveness ofinternal controls is reviewed through the internal audit process. Reports of internalauditors are reviewed by management and Audit Committee of the Company from time to timeand desired actions are initiated to strengthen the control and effectiveness of thesystem.
The focus of these reviews is as follows:
Identify weaknesses and areas of improvement
Compliance with defined policies and processes
Safeguarding of tangible and intangible assets
Management of business and operational risks
Compliance with applicable statutes
Generally business organization face risk due to changing economic conditionssocio-political environment competition forex fluctuations etc. Your Company iscontinuously evaluating options for improving profitability. Your Company is extensivelyimproving its product standards to counter the risk from growing competition. Themanagement of your company is reviewing and drafting the policies and procedures to copeup with and mitigate the risk. Your Company periodically assesses the risks in theinternal and external environment along with treating the risks and incorporates riskmanagement plans in its strategy.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
The net profit for the year ended 31st March 2017 exceeds Rupees FiveCrores. Therefore Section 135 of the Companies Act 2013 becomes applicable from thefinancial year 2017-2018.
The broad terms of reference of the CSR Committee are as under:
Formulating and recommending to the Board the CSR Policy which shall indicatethe activities to be undertaken by the Company.
Recommending the amount of expenditure to be incurred on the aforesaidactivities and
Reviewing and Monitoring the CSR Policy of the Company from time to time.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year and the date ofthis Report.
As the Act permits paperless compliances and as a measure of green initiative weappeal to all those members who have not registered their e-mail addresses so far arerequested to register their e-mail address in respect of electronic holding with theirconcerned Depository Participants and/or with the Company.
Your Directors place on record their sincere appreciation for the valuable support andco-operation as received from government authorities Financial Institutions Banks andARCs during the year. Directors are also thankful for the support extended by CustomersSuppliers and contribution made by the employees at all level. Directors would also liketo acknowledge continued patronage extended by Company's shareholders in its entireendeavor.