Sheela Foam Ltd Directors Report.

Dear Members,

Your Directors have pleasure in presenting the 49th Annual Report on the business, operations and financial performance of the Company along with the Standalone and Consolidated Audited Balance Sheet and Statement of Profit & Loss for the year ended 31st March, 2021.


(Rs. in Crores)

Particulars Consolidated Standalone
2020-21 2019-20 2020-21 2019-20
Revenue from operations 2435.36 2173.63 1689.49 1754.77
Profit before Financial Charges, Depreciation, Tax & 414.39 340.40 284.67 268.37
Exceptional Item
Exceptional Item - 11.99 - 11.99
Profit before Financial Charges, Depreciation & Tax 414.39 328.41 284.67 256.38
Less: Financial Charges 17.68 13.00 8.68 8.14
Cash Profit 396.71 315.41 275.99 248.24
Less: Depreciation 72.87 59.04 32.53 33.09
Profit before Tax 323.84 256.37 243.46 215.15
Add/(Less): Income Tax, Earlier years tax (84.18) (66.77) (60.81) (54.23)
Add/(Less): Deferred Tax 0.49 4.69 (1.50) 4.59
Profit after Tax 240.15 194.29 181.15 165.51
Other Comprehensive Income 18.81 (3.07) 2.10 (4.33)
Total Comprehensive Income for the year 258.96 191.22 183.25 161.18

During the current year, Net Revenue of the Company, on standalone basis, decreased from Rs. 1755 Crores to

Rs. 1690 Crores. The Annual turnover decreased as the first two months of the year were completely washed out, due to lock down caused by COVID 19. Sales started picking slowly from June 2020. For next three quarters the Company substantially increased the sales over corresponding quarters. Despite lower sales, the Profit after tax for the current year increased by more than 9% to Rs. 181 Crores as against the profit after tax of

Rs. 166 Crores of last year. This was possible due to control on costs, some of which have become permanent. The profit would have been much higher but for loss of sale during lockdown period.

On Consolidated basis the Overall Revenue increased from Rs. 2174 crores to Rs. 2435 Crores. This was possible because of substantial increase in sales in Overseas Subsidiaries in Australia and Spain. The Consolidated profit after tax also increased from Rs. 194 Crores to Rs. 240 Crores.


During the year, the sale of Mattresses dropped only by 5% despite losing sale during the lockdown period of first two months of the year and slow ramp up thereafter. The Company has increased its share in the domestic mattress market. The company continues to retain its leadership position in Mattress and Foam Products.

During the year the prices of critical raw materials like Polyol and TDI increased substantially. The Price of these two critical raw material were more than double in the last quarter when compared with the price in the beginning of the year.

Second wave of Covid 19 has come with more severity in year 2021-22. This has resulted in lock down in most parts of the Country. This has adversely impacted the sales of April and May 2021. It is not known when the situation will normalize. Your Company is using innovative techniques, like Sleepwell@Home, Aggressive Online Marketing, focus on selling products which are good for health etc.

Company is now selling all its products treated with Neem Fresche which means immunity from various respiratory problems caused by Dust Mites, Bacteria & Fungi.

The Company has increased its Market share by selling low price mattresses. This has caused shift from unorganized market to organized market. The Company has also increased its market penetration and lot of Multi Brand Outlets have been converted to Exclusive Branded Outlets of Sleepwell.Company also maintains its leadership position in Foam Market both in Furniture and B2B segment. It continues to innovate foams for newer applications.

The Company has also started exports to US markets from India and Spain. It expects to make substantial exports to US markets from India as well as from its subsidiary in Spain.


Board of Directors do not recommend any dividend for the year 2020-21. The entire profit is being ploughed back in the business.


As on 31 March, 2021 the Company has Five subsidiaries and two steps down subsidiaries. As required under the provisions of Section 129 of the Companies Act, 2013, read with Companies (Accounts) Rule, 2013, a statement containing salient features of the financial statements of subsidiaries is provided in the prescribed format AOC-1 as Annexure-A of the Board Report.

Overseas Subsidiaries:-

The Company has one 100% subsidiary, Joyce Foam Pty. Ltd (Joyce Foam) Australia. Joyce Foam is the largest producer of Foam in Australia and supplies its high-quality Foam to Global Mattresses and Furnishing Companies. Joyce Foam recorded a turnover of 81.08 Million Australian Dollars (AUD) in 2020-21, as compared with 66.17 Million AUD in 2019-20, and has posted post tax profit of AUD 4.83 Million in 2020-21, as against AUD 4.01 Million in 2019-20, recording a growth of about 20%.

Joyce Foam Pty Ltd has one wholly own subsidiary Joyce W C NSW Pty Ltd.

In addition, the Company has one more wholly owned overseas subsidiary, International Foam Technologies Spain, S.L.U. and a step down subsidiary, Interplasp S.L.U. Spain. International Foam Technologies Spain, S.L.U. recorded a turnover of 39.75 Million Euro in 2020-21, as compared with 6.48 Million Euro in 2019-20, and has posted post tax profit of Euro 4.09 Million in 2020-21, as against Euro 0.69 Million in 2019-20, recording a growth of about 493%.

Indian Subsidiaries:-

Staqo World Private Limited (Staqo) is a wholly owned subsidiary formed during last financial year, this company has started its business of Information Technology with negligible business at its first year. During this year, the company started getting orders from India and overseas countries and achieved a turnover of Rs. 13.36 crores with profit after tax of Rs. 2.91 Crores.

Your Company has two other wholly owned subsidiaries as under:

1) Divya Software Solutions Private Limited

2) Sleepwell Enterprises Private Limited.


In accordance with Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 (Listing Regulations), none of the subsidiaries is a material non-listed subsidiary. The Company has formulated a policy for determining material subsidiaries. The policy has been uploaded on the website of the Company at http://


In accordance with Section 136 of the Companies Act, 2013 and the applicable Accounting Standard on the Consolidated Financial Statements, your Directors have attached the consolidated financial statements of the Company which form a part of the Annual Report.

The financial statements including consolidated financial statements and the audited accounts of each of the subsidiary are available on the Companys website www.


In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: a) In the preparation of the annual accounts, the applicable accounting standards have been followed. b) The directors have selected such accounting policies and applied them consistently and made judgements and estimates that were 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 or loss of the Company for the year under review. c) The directors have 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 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 had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


In accordance with SEBI Regulations, a separate report on Corporate Governance is given in Annexure-B along with the Auditors Certificate on its compliance. The Auditors Certificate does not contain any qualification, reservation and adverse remark.


The particulars of Contracts or arrangements with related parties, in the prescribed form, are attached as



The Company has formulated a Risk Management Policy duly reviewed by the Board of Directors. The policy includes risk identification, analysis and prioritization of risk and development of risk mitigation plans. The Company has constituted a Risk Management Committee to look into the risk involved with the Company and its mitigation.


The Company has in place adequate Internal Financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The report on the Internal Financial Control issued by M/s. S. P. Chopra & Co., Chartered Accountants, Statutory Auditors of the Company in view of the provisions under the Companies Act, 2013 is given in their audit report.


As per the provisions of the Companies Act, 2013, Mr. Rakesh Chahar will retire by rotation at the ensuing Annual General Meeting (AGM) of the Company and being eligible, seeks re-appointment. The Board has recommended his reappointment.

As required under the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel namely, Chairman and Managing Director, Executive Directors, Chief Financial Officer and Company Secretary continue to hold that office as on the date of this report.


The term of Statutory Auditors M/s. S.P. Chopra & Co., Chartered Accountants, will end at ensuing 49th Annual General Meeting (AGM).

The Board, on recommendation of the Audit Committee, recommended for the approval of members, the appointment of M/s MSKA and Associates, Chartered Accountants, Firm Registration Number 105047W, as the Auditors of the Company for a period of five (5) years from the conclusion of 49th Annual General Meeting of the Company till the conclusion of 54th Annual General Meeting to be held in 2026. Appropriate resolution seeking your approval to the appointment of the Statutory Auditors is appearing in the notice convening the 49th AGM.

The Company has received letter, from the Auditors, to the effect that the appointment, if made, would be within the prescribed limits under Section 141 of the Companies Act, 2013 and that they are not disqualified for appointment.


There is no adverse observation of Auditors on financial statements of the company. The Auditors Report, read with the relevant notes to accounts are self-explanatory and therefore does not require further explanation.


Detail of total fees for all services paid by the listed entity and its subsidiaries, on a consolidated basis, to the statutory auditor and all entities in the network firm/ network entity of which the statutory auditor is a part, as mentioned in Note 38 of Consolidated Financial Statement published through annual reports for the Financial Year 2021-21, are as below:-


(Rs. In Lakhs)

Particulars Year ended 31 March,2021 Year ended 31 March,2020
Audit Fees 29.44 29.44
Certification Work 3.54 3.50
Reimbursement of expenses 0.83 2.90
Total 33.81 35.84


As per section 148 read with Companies (Audit and Auditors) Rule, 2014 M/s Mahesh Singh & Co, Cost Accountants are appointed, to conduct the cost records of the Company for the Financial Year 2021-22, by the Board of Directors and it seeks ratification of remuneration from the members of company at ensuing Annual General Meeting.


The company has engaged M/s S. S. Kothari Mehta & Co., Chartered Accountants as Internal Auditor to conduct internal audit for the year 2021-22. The Internal Auditor will report to Board of Directors. The internal audit will help company to review the operational efficiency and assessing the internal controls. It also reviews the safeguarding of assets of the Company.


The company has engaged M/s AVA Associates, Company Secretaries as Secretarial Auditor to conduct Secretarial audit for the year 2020-21. The report on secretarial audit is annexed as Annexure-D to the Boards Report. The report does not contain any qualification, reservation or adverse remark.


In terms of Companies Act, 2013, your company has to undertake Corporate Social Responsibility programme. The disclosure as per Rule 9 of the Companies (Corporate Social Responsibility Policy) Rule, 2014 is attached as



The composition of Audit Committee is provided in the Corporate Governance Report that forms part of this Annual Report.


The Company has established a vigil mechanism through a Whistle Blower Policy. The Company can oversee the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who may express their concerns pursuant to this policy. The policy is uploaded on the website of the Company at


The Company has in place an Anti-Sexual Harassment policy in line with the requirements of sexual harassment of women at Workplace (Prevention, Prohibition and Redressal) Act 2013. The Internal system has been set up to redress complaints received regarding sexual harassment.


During the year, 5 meetings of the Board of Directors were held.


Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the Financial Statements.


A. Following measures were taken by company for energy conservation in the year:

Following measures were taken by company for energy conservation in the year: 20-21

1) Installed 376 KWp solar power plant at Greater Noidaunittoreducetheelectricityconsumption from power distribution company, It helps to generate app. 60% of our total demand through solar power.

2) Replaced 10 nos. of electric hoist with hydraulic power pack at foaming crane , it results into increasing the efficiency of the machine and saving of electricity.

3) Increased use of Screw compressors for compressed air with variable frequency drives instead of starter to increase the efficiency and saving of electricity.

4) Conducted third party energy audits to identify the potential opportunities for energy saving and further optimization in energy consumption. This is an ongoing process that the Company will continue across all manufacturing locations.

5) Replaced conventional MH and street lights with 100% energy efficient LED lights across all the units with LDR,Lux, Time switch and motion sensor based control system.

6) Optimization of running time of AC on the basis of ambient temperature condition inside the UPS room.

7) Replaced old Air conditioner with energy efficient new generation Air conditioner with non-CFC gases, lead to reduction in power consumption as well as nothing to harm Ozone layer.

8) Increasing the use of Variable Frequency drives instead of starters for the electric motors to reduce the electricity consumption and to increase the efficiency.

B. The expenses incurred on Research and Development have been included in respective expense heads.

C. The Company has introduced new process to reduce the consumption of energy and upgraded technology whenever required.

D. The earnings from exports were Rs. 21.33 crores (Previous Year Rs. 16.43) and payments in foreign exchange were Rs. 141.81 crores (Previous Year

Rs. 131.04 crores).


Your Company has entered into agreements with Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE), in compliance with Regulation 109 of the SEBI LODR Regulations 2015.


The information as required under Section 197 of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in Annexure-F to the Boards Report.


In terms of provisions of Regulation 34 of the Listing Regulations, the Managements discussion and analysis is set out in this Annual Report.


The Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.


Extract of Annual Return as provided under Sub Section 3 of Section 92 is annexed as Annexure-G.


There are no significant and material orders passed by regulators or courts or tribunals impacting the going concern status and Companys operations in future.


Pursuant to the provisions of Companies Act, 2013 and the Listing Regulations, the Board has carried out annual performance evaluation of its own performance, those of directors individually and of various committees.

The performance of individual directors was evaluated on parameters, such as, number of meetings attended, contribution in the growth and formulating the strategy of the Company, independence of judgement, safeguarding the interest of the Company and minority shareholders, time devoted apart from attending the meetings of the Company, active participation in long term strategic planning, ability to contribute by introducing best practices to address business challenges and risk etc. The directors expressed their satisfaction with the evaluation process.


Business Responsibility Report/Sustainability Report is annexed as Annexure-H.


The company has adopted Dividend Distribution Policy and there is no change in policy during the year. As per SEBI (Listing Obligations and Disclosure Requirements)_ Regulations, 2015 the policy is hosted at our web site at and is also attached as Annexure-I.


Your Directors wish to express and place on record their thanks to the Companys Distributors, Dealers and Business Associates for their excellent effort and the customers for their continued patronage of the Companys products. Your Directors also wish to place on record their appreciation for the devoted services of the Executive, Staff, and workers of the Company at all levels enabling the Company to achieve the excellent performance during the year.

Your Directors also appreciate the valuable co-operation and continued support received from Companys bankers and all the government agencies and departments.

The Directors also express their sincere thanks to all the Shareholders for the continued support and trust they have reposed in the Management.

By Order and on behalf of the
Board of Sheela Foam Limited
Place: Noida (Rahul Gautam)
Date : May 29, 2021 Chairman and Managing Director