Shekhawati Poly Yarn Ltd Directors Report.
To the Members,
Your Directors have pleasure in submitting their 28th Annual Report of the Company together with the Audited Statements of Accounts for the year ended March 31, 2019.
1. FINANCIAL RESULTS
The Financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) read with the Companies (Accounts) Rules, 2014. The financial statements for the financial year ended March 31, 2019 as well as comparative figures for the year ended March 31, 2018 are Ind AS compliant.
The financial highlights of your Company for the financial year ended March 31, 2019 are summarized as follows:
(Rs. in Lakhs)
|Net Sales /Income from|
|Profit before Depreciation||52.69||(396.50)|
|Profit/Loss after depreciation and Interest||(923.36)||(1395.34)|
|Less: Exceptional Item & Prior period Exp.|
|Profit/Loss before Tax||(923.36)||(1356.27)|
|Less: Current Income Tax|
|Less: Deferred Tax Liability / (Assets)||0.85||3.50|
|Net Profit / Loss after Tax||(924.21)||(1398.84)|
|Other comprehensive Income/(Loss)||(2.20)||(7.08)|
|Total Comprehensive Income/(Loss) for the year (After tax)||(926.41)||(1405.92)|
|Dividend (including Interim if any and final )|
|Net Profit after dividend and Tax||(926.41)||(1405.92)|
|Amount transferred to General Reserve|
|Balance carried to Balance Sheet||(926.41)||(1405.92)|
|Earnings per share (Basic)||(0.27)||(0.41)|
|Earnings per Share(Diluted)||(0.27)||(0.41)|
The Board of Director has not recommended any dividend on the Share Capital of the Company for the period ended March 31, 2019 in view of losses incurred.
3. TRANSFER TO RESERVES
The company has not transferred any amount to the General Reserve.
4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
Your Directors wish to present the details of Business operations done during the year under review:
During the year under review the performance of the company slightly improved. However, further improvement was affected due to lower capacity utilization on account of limited resources available with company and slowdown in the textile industry. Company has incurred loss after tax of Rs. 926.41 lacs as against a loss after tax of Rs. 1405.92 lacs in the previous year 2017-18.The turnover of the company was Rs. 14739.28 lacs as against Rs. 14608.25 lacs in the previous year 2017-18.
b. Marketing and Market environment
Your Company believes that its scale of operations and integration across the textile chain will, in future, offer significant advantages in both cost and revenue. Your Company work hard to meet the competition as well as to enable to maintain long standing business relationship.
c. Future Prospects including constraints affecting due to Government policies
We expect the textile segments to turn favorable based on the various factors like macro economy condition and the Company is taking all necessary steps to take company forward.
5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There were no material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report.
6. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant and material orders passed by the regulators / courts that would impact the going concern status of the Company and its future operations.
7. MANAGEMENTS DISCUSSION AND ANALYSIS REPORT
Managements Discussion and Analysis Report for the year ended 31st March, 2019 as stipulated under Regulation 34(2) and (3) of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 with Stock Exchanges in India, is presented in the separate section forming a part of this Annual Report.
8. 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 A" and is attached to this report.
9. RISK MANAGEMENT POLICY
Risk management includes identifying all types of risks and its assessment, risk handling and monitoring and reporting. The Company has laid down a well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitor the principal risks that can impact its ability to achieve its strategic objectives. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. The Company has adopted Risk Management Policy in accordance with the Listing Regulations, 2015.
The Risk Management Policy is available on weblinkhttp://www.shekhawatiyarn.com/Companypolicies.html.
10. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
Pursuant to Section 135 of the Companies Act, 2013 and the relevant rules, the Board has constituted Corporate Social Responsibility (CSR) Committee under the Chairmanship of Mr. Sushil Kumar Poddar. The other members of the Committee are Mr. Mukesh Ruia and Mrs. Rohini Pradyumna Dandekar. The Board of Directors, based on the recommendations of the Committee, formulated a CSR Policy. The Company could not undertake CSR activities in view of losses. The detailed CSR Policy is hosted on companys website weblinkhttp://www. shekhawatiyarn.com/Companypolicies.html. Annual report on CSR as required under Companies (Corporate Social Responsibility Policy) Rules 2014 is furnished in "Annexure B" and forms part of this report.
11. DISCLOSURE UNDER THE SEXUAL HARASSEMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has been employing woman employees in various cadres within its office and factory premises. The Company has in place a policy against Sexual Harassment in line with the requirements of the Sexual Harassment of woman at work place (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee is set up to redress any complaints received and are monitored by woman line supervisors. All employees are covered under this policy. There was no complaint received from any employee during the financial year 2018-19 and hence no complaint is outstanding as on March 31, 2019 for redressal.
12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013
There was no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.
13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES
The Particulars of Contract or Arrangements made with related parties made pursuant to Section 188 is furnished in "Annexure C" and is attached to this report. All related party transactions that were entered into during the year under report were on an arms length basis and in ordinary course of business and were in compliance with applicable provisions of the Act and Listing Regulations.
The policy on the materiality of the Related Party Transactions and also on dealing with the Related Party Transactions as approved by the Audit Committee and Board of Directors is available on the weblinkhttp:// www.shekhawatiyarn.com/Companypolicies.html.
14. AUDITORS REPORTS
As regards Auditors Remarks in Audit Report, comments of the Board of Director is as under:-
The Company has not provided for Interest Expenses amounting to Rs. 2273.15 Lakhs (P.Y.Rs. 2256.99 Lakhs) (derived on simple interest basis) which should have been provided as per the Principal of Prudence on the borrowing which have been classified as "Non-performing assets" (NPA) by the banks as referred in Note 41 of accompanying notes to financial statement. The company has also not provided penal interest and other bank charges, as the same are not ascertainable. Had these interest expenses been debited to the Statement of Profit and Loss Account, loss for the year ended and debit balance of other Equity would have been higher by Rs. 2,273.15 lakhs and Rs. 6903.87 lakhs.
Management Remark :
The Company is in the process of discussion with its lenders and is hopeful that the suitable resolution plan will be considered by its lenders and accordingly, the Company has not recognized the Interest Expenses.
15. COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES
The Companys Policy relating to appointment of Directors, payment of Managerial remuneration, including criteria for determining 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 D" and is attached to this report.
16. ANNUAL RETURN
Pursuant to Section 92(3) of the Act and Rules framed thereunder, an extract of the Annual Return in Form MGT 9 is furnished in "Annexure E".
17. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary, Joint venture or Associate Company.
The Company has neither accepted nor renewed any deposits during the year under review.
19. MEETINGS OF THE DIRECTORS
The Board met 4 (Four) times during the financial year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the periods prescribed by the companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 entered into with the stock exchanges.
20. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:
a) Applicable accounting standards have been followed with explanation for any material departures;
b) Selected accounting policies have been applied 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 and loss of the company for that period;
c) Proper and sufficient care has been taken for the maintenance of adequate accounting records for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
d) The annual accounts are prepared on a going concern basis;
e) Internal financial controls laid have been followed by the company and that such internal financial controls are adequate and are operating effectively and;
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.
21. DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year following Directors appointed/re-appointed and resigned in the Company.
Appointment / Re-appointments
1) As per the provisions of Section 152(6) of the companies Act, 2013 Mr. Ravi Sanjay Jogi,(DIN : 06646110) Executive Director of the company, retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment.
2) Mr. Vikas Damodardas Rathi (DIN No. 03633856) who were Appointed as a Additional Independent Director by the Board of Directors on the recommendation of Nomination and Remuneration Committee on April 30, 2019, hold the said office till the date of the ensuing Annual General Meeting. The Company has received a notice as per the provision of section 160(1) of the companies act, 2013, from a member proposing his candidature for reappointment to hold office upto five consecutive years.
3) As per the provision of Section 196, 197 & 203 of the Companies Act, 2013 Mukesh Ramniranjan Ruia (DIN: 00372083), Executive Director is re-appointed for the another term of 5 years as a Chairman & Managing Director.
4) In compliance of Regulations 17(1A) of the SEBI (LODR) Regulation, 2015 as amended ("Listing Regulations"), Mr. Sushil Kumar Poddar has retired w.e.f. April 1, 2019 as he has attained the age of 75 years and hence ineligible to continue the office. The Board wishes to place on record its appreciation for the invaluable contribution rendered by Sushil Kumar Poddar during his tenure as Director of the Company.
The Company has received a notice under section 160 of the Companies Act, 2013 as amended thereof from a member of a company proposing the candidature of Mr. Sushil Kumar Poddar (DIN No. 03605830) for the office of Director of the Company. As Mr. Sushil Kumar Poddar has crossed the age of 75 years his appointment can only be made by members approval at EGM/AGM by way of Special Resolution to fulfill the conditions of his appointment in compliance of Regulation 17(1A) of the SEBI (LODR) Regulations, 2015 as amended.
The Board seeks approval of the shareholders at the 28th Annual General Meeting for confirmation of appointment / re-appointments of Mr. Sushil Kumar Poddar, Mr. Vikas Damodardas Rathi, Mr. Ravi Sanjay Jogi and Mr. Mukesh Ramniranjan Ruia.
Ms. Swati Sahukara, Independent Director has resigned from the Board w.e.f August 12, 2019. The Board appreciated her association with the company and the support during her tenure.
Attention of the member is invited to the relevant item in the Notice of the 28th Annual General Meeting and explanatory statement thereto.
Appointment / Resignations of the Key Managerial Personnel
There is no appointment/Resignation of the Key Managerial Personnel.
Pursuant to section 134 and 174 of the Act, and Regulation 17 and 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate exercise was carried out to evaluate the performance of individual Directors, Board, its committees including the Chairman of the Board who were evaluated on parameters such level of engagement and contribution and independence of judgement thereby safeguarding the interests of the Company. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors. The board also carried out annual performance evaluation of the working of its Committees. The Directors expressed their satisfaction with the evaluation process.
The Company have conducted presentation during the financial year to familiarize Independent Directors with the Company, their roles, responsibilities in the Company, performance update of the Company, global business environment, technology and the risk management system of the Company. Further, the Directors are encouraged to attend and to the training programmes being organized by various regulators/bodies/Institution on above matters and freedom to interact with the management of the Company.
22. DECLARATION OF INDEPENDENT DIRECTORS
The company has received necessary declaration from all Independent Director under section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence as prescribed under Section 149(6) and (7) of the Companies Act, 2013, and Regulation 16 of Listing Regulations, 2015.
23. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE
The Audit Committee consists of the following members as on March 31, 2019
|Name of the Member||Designation|
|1 Mr. Sushil Kumar Poddar@||Chairman|
|2 Mr. Mukesh Ruia||Member|
|3 Mrs. Rohini Pradyumna Dandekar||Member|
|4 Mr. Vikas Damodardas Rathi*||Chairman|
@ Mr. Sushil Kumar Poddar has retired from chairmanship w.e.f. April 1, 2019.
*Mr. Vikas Damodardas Rathi appointed as chairman w.e.f. April 30, 2019.
The above composition of the Audit Committee consists of independent Directors viz., Mr. Sushil Kumar Poddar and Mrs. Rohini Pradyumna Dandekar who form the majority. More details on the Committee are given in the Corporate Governance Report which forms part of this Annual Report.
The Company has established a vigil mechanism and overseas through the committee, the genuine concerns expressed by the employees and other Directors. The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns. The Company has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of employees and the Company. The details of the Whistle Blower Policy is explained in the Corporate Governance Report and is also displayed on the website of the Company.
M/s. Ajay Shobha & Co. Chartered Accountants were appointed as Statutory Auditor of the Company at the Annual General Meeting held on September 22, 2015, to hold office till the conclusion of the Annual General Meeting to be held in the Calendar year 2020 subject to ratification by the member at every AGM held thereafter. Section 139 of the Act has been amended vide the Companies (Amendment) Act, 2017 by the Ministry of Corporate Affairs on May 7, 2018 and has done away with the requirement of seeking ratification of Member for appointment of Auditors at every AGM. Accordingly, no Resolution is being proposed for ratification of appointment of Statutory Auditors at the ensuing AGM.
The M/s. Ajay Shobha & Co. Chartered Accountants have under Sections 139 and 141 of the Act and Rules framed thereunder confirmed that they are not disqualified from continuing as Statutory Auditor of the Company and furnished a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India as required under Regulation 33 of the Listing Regulations.
As per the requirement of Section 148 of the Act, read with the companies (Cost Record and Audit) Rules, 2014, the Audit of Cost Account related to Textile product is being carried out every year. The Board of Directors have, based on the recommendation of the Audit Committee, appointed M/s. N. Ritesh & Associates, Cost Accountant, Mumbai (Membership No. M/26963) to audit the cost accounts of the Company for the year ended March 31, 2019 on a remuneration of fixed between the Board and Cost Auditor. As required under the Act, necessary resolution seeking members ratification for the remuneration payable to M/s. N. Ritesh & Associates is included as item Number 6 of the Notice convening 28th Annual General Meeting.
Mr. Vishal Manseta, Practicing Company Secretaries, was appointed to conduct the secretarial audit of the company for the Financial Year 2018-19, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The secretarial audit report for FY 2018-19 forms part of the Annual Report as "Annexure F" to the Board Report.
M/s. Sunil Kudwa & Co., Chartered Accountants (Firm Registration No. 123657W) were appointed as internal auditors of the Company for the F.Y. 2018-2019.
Their appointment as an internal Auditor for the Financial Year 2019-20 has been approved in the meeting of the Board of Directors held on May 30, 2019.
26. INTERNAL FINANCE CONTROL
The Board has adopted system of internal control to ensuring the orderly and efficient conduct of its business, including adherence to the Companys Policies, the safeguarding of its assets, the prevention and detection of fraud and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. The Company is in the process of strengthening its Internal Financial Control System considering present financial situation, and other recent developments.
27. HUMAN CAPITAL AND PARTICULARS OF EMPLOYEES
Your company had 485 employees as on March 31st 2019.
The statement containing the particulars of employees as required under Section 197(12) of the Companies Act, 2013 read along with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to the company as no employees were in receipt in remuneration above the limits specified in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
The details required as per Section 197(12) of the Companies Act, 2013 read along with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as "Annexure G" and forms part of this report.
28. SHARE S
a. BUY BACK OF SECURITIES
The Company has not bought back any of its securities during the year under review.
b. SHARES WITH DIFFERENTIAL VOTING RIGHTS
The company has not issued equity shares with differential voting rights during the period under review.
c. SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year under review.
d. BONUS SHARES
No Bonus Shares were issued during the year under review.
e. EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to the employees.
29. CORPORATE GOVERNANCE
Your Company has complied with the Corporate Governance requirements as per the Regulation 27(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.A separate report on Corporate Governance alongwith a Certificate of Compliance from the Auditors forms a part of this report.
30. COMPLIANCE OF SECRETARIAL STANDARDS
The Company is in compliance with all applicable Secretarial Standard issued by the Institute of Company Secretaries of India.
Your Directors place on record their sincere thanks to lenders, business associates, consultants, and various Government Authorities for their continued support extended to your Companies activities during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS For SHEKHAWATI POLY-YARN LIMITED
|Mukesh Ruia||Ravi Jogi|
|Date||: August 12, 2019||Chairman & Managing Director||Whole Time Director|
|Place||: Mumbai||(DIN : 00372083)||(DIN : 06646110)|