Sysco Industries Ltd Directors Report.
SYSCO INDUSTRIES LIMITED.
Your directors have pleasure in presenting herewith the 08th Annual Report along with its Audited Financial Statements for the year ended on 31st March, 2017 of your Company.
SUMMARISED FINANCIAL RESULTS
The Financial performance of the company during the year is as under:
|March 31,||March 31,|
|Revenue from operations||15,806.19||11,041.99|
|Profit before exceptional and extraordinary items and tax||726.35||476.40|
|Profit before extraordinary items and tax||726.35||476.40|
|Profit before tax||726.35||476.40|
|Current tax - MAT||159.21||135.92|
|Current Tax - Earlier Year||0.20||1.16|
|Profit for the period||566.93||339.32|
|Earnings per equity share:|
The company has engaged in business of manufacturing. During the year the company has earned total income of Rs. 15,871.44 lakhs (Previous year Rs. 11051.93 lakhs) and total expenses of Rs. 15,145.09 lakhs (Previous year of Rs. 10,575.53 lakhs). After all the financial 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 to improve the performance further, the Company continues its focus on cost efficiencies, improving product quality and developing capabilities for servicing the stringent requirements of customers.
Your Company has boosted its sales and thus the profitability by increasing the production capacity by installing new machines for forward and backward integration. This has helped us to tap the big names in the industry and there after building up our customer range. Our focus is on optimal utilization of resources, less cost and more profit.
DETAILS OF THE ASSOCIATES/ JOINT VENTURE / SUBSIDIARIES COMAPANIES
The company does not have holding or subsidiary companies during the year and no other company 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, 37,000.00. There was no public issue, right issue, bonus issue or preferential issue etc. during the year.
MEETINGS OF THE BOARD
The Board met six times during the financial year. Details of meetings are given in the Corporate Governance Report annexed herewith and forms part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Company has not accepted any public deposit during the year under review and no amount against the same was outstanding at the end of the year.
In conformity with provision of Regulation 34 of SEBI (LODR), Regulations 2015, the required disclosures for the year ended 31.03.2017 are annexed hereto. The equity shares of 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 the Company confirming that he/she met with the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and under Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
A diverse Board enables efficient functioning through differences in perspective and skill, and also fosters differentiated thought processes at the back of varied industrial and management expertise, gender, knowledge and geographical background. The Company follows diverse Board structure.
As per the provisions of the Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015, the formal annual evaluation was carried out for the Boards own performance, its committee & Individual directors.
The performance of the Board was evaluated by the Board after seeking inputs from the Directors on the basis of the criteria such as the Board Composition and structures, effectiveness of board processes, information and functioning, etc.
The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and Committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspect of his role.
In a separate meeting of independent Directors, performance of non-independent Directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of the Executive Directors and Non-Executive Directors. The same was discussed in the Board meeting that followed the meeting of the Independent Directors, at which the performance of the Board, its committees and individual Directors was also discussed. Performance evaluation of Independent Directors was 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 & D, Technology absorption and Foreign Exchange earnings / outgo are separately provided in the annexure to the Directors Report as Annexure -1.
DEMATERIALISATION OF SECURITIES
Your Companys Equity shares are admitted in the System of Dematerialization by both the Depositories namely NSDL and CDSL. The Company has signed tripartite Agreement through Registrar and Share Transfer Agent M/s Bigshare Services Pvt. Ltd. The Investors are advised to take advantage of timely dematerialization of their securities. The ISIN allotted to your Company is INE410U01011. Total Share dematerialized up to 31st March 2017 were 7920400 which constitute 99.58% of total capital. Your Directors request all the shareholders to dematerialize their shareholding in the company as early as possible.
The Company has not made any provision for the Gratuity. However, employees employed for more than five years are still associated and working in our organization. We are in position to pay them when they will leave the Company. The Company will make the provisions for the Gratuity in the 2017-2018.
The Company has not made any payment of Bonus to its eligible employees under the Bonus Act in the financial year 2016-2017. It will pay in 2017-2018 complying the provisions of the Bonus Act applicable.
HEALTH, SAFETY AND ENVIRONMENT
Safety and occupational health responsibilities are integral to your Companys business process. Safety is a key performance indicator and your Company is committed to ensuring zero 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 and communications enhancing safety in the work place. Apart from safety initiatives, your Company 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 General Meeting as per provisions of Law. He is eligible for reappointment and has offered himself for 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, in relation 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 March 2017 as far as possible and to the extent, if any, accounting standards mentioned by the auditors in their report as not complied with, all other applicable accounting standards have been followed along with proper explanation relating to material departure;
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 at the end of the financial year and profit and loss account of the Company for that period;
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; and
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.
f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
APPOINTMENT OF DIRECTORS AND CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR
The NRC is responsible for developing competency requirements for the Board based on the industry and strategy of your Company. The NRC reviews and meets potential candidates, prior to recommending their nomination to the Board. At the time of appointment, specific requirements for the
position, including expert knowledge expected, is communicated to the appointee. The NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and the SEBI 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 of the SEBI Listing Regulations and the Governance Guidelines.
Competency: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is ensured that the Board comprises a mix of members with different educational qualifications, knowledge and who possess adequate experience in banking and finance, accounting and taxation, economics, legal and regulatory matters, consumer industry, hospitality sector and other disciplines related to the companys businesses.
Additional Positive Attributes:
The Directors should not have any other pecuniary relationship with your Company, its subsidiaries, associates or joint ventures and the Companys promoters, except as provided under law.
The Directors should maintain an arms length relationship between themselves and the employees of the Company, as also with the directors and employees of its subsidiaries, associates, joint ventures, promoters and stakeholders for whom the relationship with these entities is material.
The Directors should not be the subject of proved allegations of illegal or unethical behaviour, in their private or professional lives.
The Directors should have the ability to devote sufficient time to the affairs of your Company. REMUNERATION POLICY
Your Company had adopted a Remuneration Policy for the Directors, KMP and other employees, pursuant to the provisions of the Act and the SEBI Listing Regulations.
The key principles governing your Companys Remuneration Policy are as follows:
Remuneration to Managing Director / Whole-time Directors
a) The Remuneration/ Commission etc. to be paid to Managing Director / Whole-time Directors, etc. shall be governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for the time being in force and the approvals obtained from the Members of the Company.
b) The Nomination and Remuneration Committee shall make such recommendations to the Board of Directors, as it may consider appropriate with regard to remuneration to Managing Director / Whole-time Directors.
Remuneration to Non- Executive / Independent Directors
a) The Non-Executive / Independent Directors may receive sitting fees and such other remuneration as permissible under the provisions of Companies Act, 2013. The amount of sitting fees shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors.
b) All the remuneration of the Non- Executive / Independent Directors (excluding remuneration for attending meetings as prescribed under Section 197 (5) of the Companies Act, 2013) shall be subject to ceiling/ limits as provided under Companies Act, 2013 and rules made there under or any other enactment for the time being in force. The amount of such remuneration shall be such as may be recommended by the Nomination and Remuneration Committee 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 shall not be eligible to participate in any share based payment schemes of the Company.
d) Any remuneration paid to Non- Executive / Independent Directors for services rendered which are of professional in nature shall not be considered as part of the remuneration for the purposes of clause (b) above if the following conditions are satisfied:
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 qualification for 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 employee shall consist of fixed pay and incentive pay, in compliance with the provisions of the Companies Act, 2013 and in accordance with the Companys 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 the Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014, is annexed 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-9 forming part of the Directors Report
PARTICULARS OF THE EMPLOYEES
Particulars of the employees as required under provisions of Section 197 (12) of the Act read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, are not attached with this report since there was no employee who was in receipt of remuneration in excess of Rs.8.5 Lakhs per month during the year or Rs. 1.02 Crores per annum in the aggregate if employed part of the year.
DETAILS OF RELATED PARTIES TRANSACTIONS PURUSANT TO SECTION 188(1) OF THE COMPANIES ACT, 2013
The Company is not entering into related parties transactions for sale/purchase of goods or services at preferential prices. However, all the transactions in the nature of sales/purchase of goods or services are
made on arms length basis. The same were reported to the Board at every meeting and Board took a note of the same and approved. Other details for inter corporate financial transactions or remuneration and other benefits paid to directors, their relatives, key managerial 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-2 below 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 loans, investments, given any corporate guarantee to any other body corporate, subsidiary, associate or any other company.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with rules made thereunder, the Board of Directors has appointed M/s Kamlesh Shah & Co., Practicing Company Secretaries, as Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year 2016-17. The report submitted by the Secretarial Auditor in Form MR-3 is attached to this report as Annexure - 4. The remark of secretarial auditor is self explanatory in nature.
M/s. Adukia & Company, Chartered Accountants, an Auditors firm are statutory auditors of the company since 2014-15. As per Rule 6(3) of the Companies (Audit and Auditors) Rules 2014, they are eligible to continue as the statutory auditors of the company for financial years 2014-15, 2015-16, 2016-17, 201718 and 2018-19. Necessary Resolution for ratification of their appointment as the Statutory Auditors and fixing their 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 the prescribed format is appended to this report as Annexure - 5.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management discussion and perceptions on existing business, future outlook of the industry, future expansion and diversification plans of the Company and future course of action 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 well as the Practising Company Secretarys Certificate regarding compliance of conditions of Corporate Governance, form part of the Annual Report. All Board members and senior management personnel have affirmed compliance with the Code of Conduct for the year 2016-17. A declaration to this effect signed by the Managing Director of the Company is contained in this Annual Report. The Managing Director and CFO have certified to the Board with regard to the financial statements and other matters as required under the Listing Regulations. 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 of internal controls is reviewed through the internal audit process. Reports of internal auditors are reviewed by management and Audit Committee of the Company from time to time and desired actions are initiated to strengthen the control and effectiveness of the system.
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 conditions, socio-political environment, competition, forex fluctuations etc. Your Company is continuously evaluating options for improving profitability. Your Company is extensively improving its product standards to counter the risk from growing competition. The management of your company is reviewing and drafting the policies and procedures to cope up with and mitigate the risk. Your Company periodically assesses the risks in the internal and external environment along with treating the risks and incorporates risk management plans in its strategy.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
The net profit for the year ended 31st March 2017 exceeds Rupees Five Crores. Therefore, Section 135 of the Companies Act, 2013 becomes applicable from the financial 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 indicate the activities to be undertaken by the Company.
Recommending the amount of expenditure to be incurred on the aforesaid activities 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 of the Company, which have occurred between the end of the financial year and the date of this Report.
As the Act permits paperless compliances and as a measure of green initiative, we appeal to all those members who have not registered their e-mail addresses so far are requested to register their e-mail address in respect of electronic holding with their concerned Depository Participants and/or with the Company.
Your Directors place on record their sincere appreciation for the valuable support and co-operation as received from government authorities, Financial Institutions, Banks and ARCs during the year. Directors are also thankful for the support extended by Customers, Suppliers and contribution made by the employees at all level. Directors would also like to acknowledge continued patronage extended by Companys shareholders in its entire endeavor.
|ON BEHALF OF THE BOARD OF DIRECTORS|
|DATE: 10th JULY, 2017||SYSCO INDUSTRIES LIMITED|
|CHAIRMAN & WHOLE TIME DIRECTOR|