SDF Industries Ltd Directors Report.
Your Directors have pleasure in presenting their 2T Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31s2017.
Companys financial performance for the year under review along with previous years figures are given hereunder:
|Particulars||As on 31.03.2017||As on 31.03.2016|
|(Rs. Lakhs)||(Rs. Lakhs)|
|Profit before Depreciation Exceptional items & Tax||118.41||126.66|
|Profit before Exceptional items & Tax Less:||93.17||102.46|
|b)Provision for Tax||8.60||-|
|Net Profit for the year||36.40||102.46|
As you are aware that the last two decades, Kerala alcoholic industry went through a sharp down hill due to prohibitionary liquor policies from mid 1990s and culmination of these polices ended up three years back with closure of all the bars except in five star sector and closure of increasing number of retail outlets year by year. But to a great shock to the industry was Supreme Court direction to close all liquor outlets around the State and National highways within a distance of 500 meters. Kerala being a lateral state, many business establishments in alcoholic beverages got effected by this ruling. Inevitably, your company had to suffer potential progress and it is reflected in our performance of our net profit as only Rs.36.40 lakhs against Rs. 102.46 lakhs of last year. Also, the currency ban and steep increase in raw material costs affected the industry generally. However, with strict cost control and hard work, our managers, staffs and workers did splendid job, not only in avoiding losses, but to make a small profit inspite of bad circumstances. The Board must thank each one of them on your behalf. We do hope in the years to come with more condusive polices, we will be able to achieve better results, though the fortunes of our company relies much to the changing policies of the government as liquor is heavily regulated product. RESERVES
The Company has not transferred any amount to its reserves during the year under review. However, the current year profit of Rs. 36,39,708/- has been adjusted against the accumulated losses and the balance carried forward losses of Rs. 9,21,31,929/- has been shown underthe Reserves and Surplus in the Balance Sheet. DIVIDEND
Due to accumulated losses the company is not able to declare any divident.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
There is no amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 2013 and rules made thereunder.
The paid up Equity Share Capital as on 31 st March, 2017 was Rs. 11,68,73,000. During the year under review, the Company has not issued any shares.
EXTRACT OF ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure No.1 and is attached to this Report.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
During the year under review, 4 Meetings of the Board of Directors, 4 Meetings of the Audit Committee, 1 Meeting of the Nomination and Remuneration Committee and 8 Meetings of the Stakeholders Relationship Committee were held. Further details of the same have been enumerated in the Corporate Governance Report annexed herewith.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors Responsibility Statement, it is hereby confirmed that:
(a) In the preparation of the annual accounts, the applicable accounting standards had been followed;
(b) The directors had 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 at the end of the financial year and of the profit of the company for that period;
(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) The directors had prepared the annual accounts on a going concern basis;
(e) The internal financial controls to be followed by the company were laid down and such internal financial controls were adequate and were operating effectively.
(f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THE COMPANIES ACT, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT.
There have been no frauds reported by the Auditors pursuant to Section 143(12) of the Companies Act, 2013. DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.
NOMINATION AND REMUNERATION POLICY OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES
In adherence of section 178(1) of the Companies Act, 2013, the Board of Directors of the Company approved a policy on directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178(3) of the Act,based on the recommendations of the Nomination and Remuneration Committee.
The Companys Policy relating to appointment of Directors, Directors qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is furnished in Annexure No.2- and forms part of this Report.
M/s.Varma & Varma (Firm Registration No.004532S), Chartered Accountants, the existing Statutory Auditors of the Company will be completing their term as Statutory Auditors on conclusion of 27th Annual General Meeting convened on 27thSeptember, 2017. The Board places on record their appreciation for services rendered by M/s.Varma & Varma, Chartered Accountants as Statutory Auditors of the Company. The Company is required to rotate the Statutory Auditors on completion of theirterm as per provisions of the Companies Act, 2013. Accordingly in terms of provisions of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, the Audit Committee has recommended and the Board of Directors have proposed the appointment of M/s. GGA Associates, Chartered Accountants having Firm Registration No. 009663S, as Statutory Auditors of the Company for a period of five consecutive years from the conclusion of 27thAnnual General Meeting till the conclusion of 32nd AnnualGeneral Meeting, subject to ratification of the appointment by the Members at every Annual General Meeting held after this Annual General Meeting for approval of the Members. The observations of the Auditors in their report are self explanatory.
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had appointed Mr. V.S. Subhash, M.Com, LLB, FCS, M/s. JMACS Associates to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure 3.
With reference to the observations made by the Secretarial Auditor in his report the Directors wish to state that the company being a sick company has not appointed a whole time Company Secretary and due to tight financial position the company has not paid the listing fees due to the Stock Exchange. Once the position improves necessary steps would be taken for appointment of whole time Company Secretary and listing fees due to the Stock Exchange will be paid.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:
There were no loans, guarantees or investments made by the Company under section 186 of the Companies Act, 2013 during the period under review and hence the said provision is not applicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All transactions entered into during the financial year 31st March 2017 with Related Parties as defined under the Companies Act 2013 and Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations. 2015 were in the ordinary course of business and on an arms length basis. During the year, the Company had not entered into any transaction referred to in Section 188 of the Companies Act, with related parties which could be considered material. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) of the Companies Act in Form AOC-2 is not applicable. Attention of Members is drawn to the disclosures of transactions with related parties set out in Notes to Accounts * Note 26 forming part of the financial statements. However it is to be noted that this venture is advantageous to your company as it contributes profitability.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and outgo as required under section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure - 4 and is attached to this report.
RISK MANAGEMENT POLICY
The Company has a structured risk management policy. The Risk management process is designed to safeguard the organisation from various risks through adequate and timely actions. It is designed to anticipate, equate and mitigate risks in order to minimize its impact on the business. The potential risks are inventorised and integrated with the management process such that they receive the necessary consideration during decision making. It is dealt with in greater details in the management discussion and analysis section.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable.
ANNUAL PERFORMANCE EVALUATION
In accordance with the criteria suggested by The Nomination and Remuneration Committee, the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes, Board dynamics etc. The Independent Directors, at their separate meetings, also evaluated the performance of non-independent directors and the Board as a whole based on various criteria. The performance of each independent Director was evaluated by the entire board of directors on various parameters like engagement, leadership, analysis, decision making, communication, governance etc. The Board and the Independent Directors were of the unanimous view that performance of the Board of Directors as a whole was satisfactory.
The performances of all the Committees were evaluated by the Board having regard to various criteria such as committee composition, committee, processes, committee dynamics etc. The Board was of the unanimous view that all the committees were performing their functions satisfactorily.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of business of the Company during the financial year ended 31st March, 2017.
Pursuant to the provisions of section 152 of the Companies Act, 2013, Mr. Kavassery Veetil Viswamohan (holding DIN:00666339) is due to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. During the year under review, the shareholders in their meeting held on 22nd September 2016 have approved the reappointment of Sri.Kavassery Veetil Viswamohan as Chairman & Whole Time Director of the Company with effect from 30th April 2017.
SUBSIDIARIES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary or Associate Company.
The Company has neither accepted nor renewed any deposits during the year under review. There was no deposit remaining unpaid or unclaimed as at the end of the year.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE
There is no significant and material order passed by the regulators or courts or tribunals impacting the going, concern status and companys operation in future.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has implemented and evaluated the Internal Financial Controls which provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes and policies, safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting records. The Directors and Management confirm that the Internal Financial Controls (IFC) are adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3)(l) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors report
PARTICULARS OF EMPLOYEES AND REMUNERATION
The requisite details relating to ratio of remuneration, percentage increase in remuneration etc. as stipulated under Section 197(12) and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure - 5 to this Report.
The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 does not apply to the Company as there were no employees who are in receipt of remuneration in the aggregate at the rate of not less than Rupees One crore Two lakh if employed throughout the year or Rupees Eight Lakh and Fifty Thousand per month if employed for part of the year.
The Audit Committee of the Board of Directors of the Company, comprises four Members, namely Mr. M.P. Gopalakrishnan, Mr. K. Rajkumar, Mr. N. Muralidhar Nair & Ms. R. Smitha out of which three of them are Independent Directors. Mr. M.P. Gopalakrishnan, an Independent Director, is the Chairperson of the Audit Committee.
The Board accepted the recommendations of the Audit Committee whenever made by the Committee during the year.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.
The Company has in place an Anti -harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee has been setup to redress complaints received regularly. There was no complaint received during the financial year 2016- 17 and hence no complaint is outstanding as on 31.03.2017 for redressal.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE
The Management Discussion and Analysis Report and the Report on Corporate Governance, as required under Regulation 34(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual Report.
The Board of Directors express their appreciation for the contribution made by the employees, customers and bankers for the support extended by them during the year under review. We also would like to thank our bottling partners for their faith in us with continued patronage.
|For and on behalf of the Board|
|Palakkad||K. V. Viswamohan Menon|
|08.08.2017||Chairman & Whole time Director|
|(DIN : 00666339)|