DIRECTORS' REPORT The Board of Directors present the 29th Annual Report of the Company together with the Audited Statements of Accounts for the Financial Year ended March 31, 2015. OPERATIONAL RESULTS Your company's performance during the financial year can be considered satisfactory despite adverse market conditions. Turnover was Rs.1468.66 Crore as against Rs.1432.61 Crore of previous year, Net Profit increased to Rs.51.57 crore compared Rs.40.50 crore in the previous financial year ended 31 March 2014. Exports was lower than the last year from Rs.342.34 crore to Rs.330.27 crore for the year. DIVIDEND In view of the satisfactory performance, your directors are pleased to recommend for your approval, dividend of 20% on 3,94,21,559 equity shares of Rs.10/- each for the financial year 2014-15 aggregating to Rs.7.88 crore, which is subject to approval at the forthcoming Annual General Meeting. The company would also pay corporate tax on distributed dividend and dividend would be tax free in the hands of the shareholders. EXPANSION The Company successfully implemented its project of Rs.76.50 crores for installation of 36 nos. Machines for manufacturing of seamless garment, 10080 spindles for manufacturing of cotton yarn and 56 weaving machines for denim fabric weaving. PUBLIC DEPOSITS The company has not accepted any deposits from the general public within the meaning of Section 73 of the Companies Act, 2013 and rules made there under. DIRECTORS In terms of Section 149 of the Act, the members at their meeting held on September 30, 2014, had appointed Mr. Achintya Karati, Mr. Ramawatar Jaju and Mr. Tapan Kumar Mukhopadhyay as Independent Directors of the Company for a period of five years or upto their date of retirement, whichever was earlier. Ms. Seema Srivastava was appointed as Additional Woman Director of the Company w.e.f. March 30, 2015 and she hold office upto the date of the forthcoming Annual General Meeting and are further proposed to be appointed as Independent Director of the Company for a period of five years commencing from October 1, 2015. The company has received declarations from all the Independents Directors confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. In accordance with the Companies Act, 2013 and Articles of Association of the Company, Shri S.N.Modani, Managing Director of the Company retire by rotation and being eligible offer himself for re-appointment at the ensuing annual general meeting. KEY MANAGEMENT PERSONNEL During the year under review, the Company has designated following personnel as KMPs as per the definition under Section 2(51) and Section 203 of the Act. • Shri S.N.Modani, Managing Director and Chief Executive Officer • Shri Anil Jain, Chief Financial Officer and Company Secretary MEETINGS OF THE BOARD Four meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance of this Annual Report. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the financial statement. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All contracts/arrangements/transactions entered by the Company during the financial year with related parties were on an arm's length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Agreement. There are no materially significant Related Party Transactions made by the Company with promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee comprising Shri Achintya Karati, Chairman, Shri TK. Mukhopadhyay, Member, being Independent Director and Shri R.P.Soni, Non Executive Director for the Company, for its approval. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. During the Fiscal There are no material transactions between the Company and the related parties as defined under Clause 49 of the Listing Agreement. Further, all transactions with related parties have been conducted at an arm's length basis and are in ordinary course of business. Accordingly there are no transactions that are required to be reported in Form AOC-2, as required under Section 134(3)(h) of the Companies Act, 2013 and rule 8(2) of the Companies (Accounts) Rules, 2014, and as such does not form part of the Report. SUBSIDIARY COMPANY The company has no subsidiary company. AUDITORS M/s R. Kabra & Company, Chartered Accountants, Mumbai and M/s BL Chordia & Company, Chartered Accountants, Bhilwara, Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and have expressed their willingness to continue, if so appointed. As required under the provisions of Sections 139 and 141 of the Companies Act, 2013, the Company has obtained a written consent and relevant certification from the Auditors proposed to be re-appointed. A proposal seeking their re-appointment is provided as part of the Notice of the ensuing Annual General meeting. AUDITORS' REPORT As regards Auditors observations, the relevant notes on account are self explanatory and therefore, do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. SECRETARIAL AUDITOR Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s S.P.Jethlia & Co., a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit for the year ended 31st March, 2015 is annexed herewith and forming part of the report. CORPORATE GOVERNANCE Your Company is committed to maintain the highest standards of Corporate Governance and adheres to the stipulations set out in the Listing Agreement with the Stock Exchanges and have implemented all the prescribed requirements. Annexed reports on Corporate Governance and Management Discussion and Analysis as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges form part of this Annual Report. Certificate from the Auditors of the Company, confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is annexed to this report. DIRECTORS RESPONSIBILITY STATEMENT Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the inter, statutory, cost, external agencies and seceretarial auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2014-15. Accordingly, pursuant to section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that: 1. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; 2. They 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 as at March 31, 2015 and of the profit of the Company for the year ended on that date; 3. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; 4. They have prepared the annual accounts of the company for the year ended on March 31, 2015 on a 'going concern' basis. 5. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were generally operating effectively; and 6. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES The Company's Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 is stated in the Corporate Governance Report and is also available on the Company's Website: www.sangamgroup.com <http://www.sangamgroup.com>. CORPORATE SOCIAL RESPONSIBILITY (CSR) The Corporate Social Responsibility (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company's website at www.sangamgroup.com <http://www.sangamgroup.com>. The Company has identified following focus areas of engagement which are as under: • Eradicating hunger, poverty and malnutrition • Promoting Health care including Preventive Health care • Ensuring environmental sustainability and ecological balance through • Employment and livelihood enhancing vocational skills and projects • Promotion of education especially among children, women, elderly and the differently abled • Promoting gender equality and empowering women • Contribution or funds provided to technology incubators located within academic institutions • Rural Development Projects The Company has made the relevant provisions for CSR activities in the Books of Accounts. The Company shall find out ways and means to spend the same in the coming months and shall submit the relevant report in the ensuing year. The Company could not spend the money before finalizing this report as the time was too short to identify suitable projects for spending the same. RISK MANAGEMENT During the year, the Audit Committee, evaluated the Risk Management Policy of the Company to make it more focused in identifying and prioritising the risks, role of various executives in monitoring and mitigation of risk and reporting process. The Risk Management Policy has been reviewed and found adequate to the requirements of the Company by independent firms of Chartered Accountants and approved by the Board. The Audit Committee evaluated various risks and that there is no element of risk identified that may threaten the existence of the Company. WHISTLE BLOWER MECHANISM The company has adopted a Whistle Blower Policy establishing vigil mechanism, to provide a formal mechanism to the Directors and employees to report there concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The policy provides for adequate safeguards against vistimization 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. The policy of vigil mechanism is available on the Company's website www.sangamgroup.com <http://www.sangamgroup.com> PARTICULARS OF EMPLOYEES Pursuant to the provisions of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of employees are set out in a separate statement is annexed herewith and forming part of the report. (Annexure - I) PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information relating to energy, technology absorption and foreign exchange earnings and outgo required to be disclosed under The Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in Annexure-II. HUMAN RESOURCES MANAGEMENT AND INDUSTRIAL RELATIONS The Company continues to focus on training its employees on a continuing basis, both on the job and through training programs. Relations with the staff members and the workmen continued to be cordial and satisfactory during the year under consideration. COST AUDITORS In accordance with the directive of the Central Government and pursuant to Section 148 of the Companies Act, 2013, M/s. K. G. Goyal & Co., Jaipur, Cost Accountants and M/s V.K.Goyal & Co., Bhilwara, Cost Accountants, have been appointed as Cost Auditors to audit the cost accounting records relating to Company's units as allotted to them respectively for the financial year 2015-16. EXTRACT OF ANNUAL RETURN Pursuant to Section 134(3)(a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014, the extract of annual return is annexed herewith and forming part of the report. (Annexure- VI) ACKNOWLEDGEMENT The Board of Directors place on record their appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government, Local Authorities for their strong support and valuable guidance. The Directors are thankful to the shareholders for their continued support to the Company. Your Directors also wish to place on record their deep sense of appreciation for the devoted services of the Executives, Staff and Workers of the Company for its success. By Order of the Board of Directors. For Sangam (India) Limited Chairman (DIN 00401439) Place: Bhilwara Dated: 02nd May, 2015 |