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DIRECTOR'S REPORT

SPL Industries Ltd.

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Market Cap. (₹) 109.04 Cr. P/BV 1.12 Book Value (₹) 33.66
52 Week High/Low (₹) 74/23 FV/ML 10/1 P/E(X) 4.01
Bookclosure 29/09/2018 EPS (₹) 9.37 Div Yield (%) 0.00
Year End :2018-03 

TO THE MEMBERS,

The Directors have pleasure in presenting the 27th Annual Report of the Company, together with the audited financial statements, for the financial year ended on 31st March, 2018.

SUMMARISED FINANCIAL RESULTS (Amount Rs.in Lakhs)

Particulars

2017-2018

2016-2017

Profit/(loss) Before Exceptional & Extraordinary Items

538.72

145.14

Exceptional Items/ Extraordinary Items

-

-

Prior Period Items

-

-

Profit/(loss) Before tax

538.72

145.14

Tax Expense/Adjustment

Current tax

-

-

Deferred tax

-

-

Profit/(Loss) For the period

538.72

145.14

Other Comprehensive Income

A (i) Items that will not be reclassified to profit or loss

13.31

13.31

(ii) Income tax effect

B (i) Items that will be reclassified to profit or loss

-

-

(ii) Income tax effect

Other comprehensive income for the year, net of tax

13.31

13.31

Total Comprehensive Income for the year, net of tax

552.03

138.58

Earnings /(Loss) per Equity share:

Basic and Diluted

1.86

0.50

COMPANY’S PERFORMANCE

During the year under review, the Company has achieved net sales of Rs. 17,274.88 lakhs and a net profit before tax of Rs. 538.72 lakhs as against net sales of Rs. 15,063.38 lakhs and profit before tax of Rs. 145.14 lakhs in the previous financial year 2016-17 respectively.

Your Company is financially strong & self-reliant in terms of funds generation and debt servicing. A constant rise in turnover of the Company is apparent. However, your Directors are expecting better results both in terms of operations of the Company & its financial position.

DIVIDEND

In order to conserve the resources, your Board has decided not to declare any dividend for financial year 2017-2018.

TRANSFER TO RESERVES

Your Company does not propose to transfer amounts to the general reserve out of the amount available for appropriation.

LISTING WITH STOCK EXCHANGES

The Company confirms that it has paid the Annual Listing Fees for the year 2017-2018 to National Stock Exchange of India Limited and BSE Limited where the Company’s shares are listed.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

Your Company is in compliance with the Corporate Governance guidelines, as laid out in the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (herein after called as “SEBI Listing Regulations”). A Report on Corporate Governance is annexed as Annexure A to this Report. In terms of SEBI Listing Regulations, the Board has laid down a Code of Conduct for all Board Members and Senior Management of the Company. The Code of Conduct has been posted on the website of the Company. All the Board Members and Senior Management Personnel have affirmed compliance with the Code.

The Secretarial Auditors of the Company have examined the requirements of Corporate Governance with reference to SEBI Listing Regulations and have certified the compliance, as required under SEBI Listing Regulations. The Certificate on Corporate Governance in this regard is annexed as Annexure B to this Report.

A Certificate of the MD/CEO and CFO of the Company in terms of Listing SEBI Regulations, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed as Annexure C to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

In terms of Regulation 34 of the SEBI Listing Regulations, the Management’s Discussions and Analysis Report is annexed as Annexure D to this report.

HUMAN RESOURCES

The Company’s HR philosophy is to establish and build a high performing organization, where each individual is motivated to perform to the fullest capacity: to contribute to developing and achieving individual excellence and departmental objectives and continuously improve performance to realize the full potential of our personnel.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

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 of the Company, to which the financial statement relates (i.e. 31st March, 2018) and the date of the report.

DEPOSITS

Your Company has not accepted any deposit within the meaning of provisions of Chapter V of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 for the year ended on 31st March, 2018.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

During the year none of Company become or ceased to be its Subsidiaries, joint ventures or associate.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the Financial Year, there was no appointment and cessation of Directors and Key Managerial Personnel in the Company.

In accordance with the provisions of Companies Act, 2013 and Articles of Association of the Company, Smt. Shashi Agarwal shall retire by rotation at the ensuing 27th Annual General Meeting of your Company, and being eligible, offer himself for re-appointment.

BOARD MEETINGS HELD DURING THE YEAR

During the year 9 Board Meetings were held, details of which are given in the Report on Corporate Governance as annexed to this Report.

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND DIRECTORS

One of the key functions of the Board is to monitor and review the Board Evaluation Framework. The Board works with the nomination and remuneration Committee to lay down the evaluation criteria for the performance of the Chairman/the Board, Committees of the Board, executive, non-executive and Independent directors through peer evaluation, excluding the director being evaluated. Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, an annual performance evaluation of the Board/Committees/Directors was undertaken.

Independent Directors at their meeting held during the year, considered/evaluated the performance of the Board of Directors, the Chairman and other Non-Independent Directors, without the participation of the Non-Independent Directors and Management.

The Board subsequently evaluated its own performance, the working of its Committees, Individual Directors and Independent Directors without participation of the relevant Director(s). The criteria for performance evaluation have been detailed in the Corporate Governance Report which is to this Report.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

In compliance with requirements of Companies Act, 2013 and SEBI Listing Regulations, the Company has established a mechanism under its Whistle Blower Policy for employees to report to the management the instances of unethical behavior, actual or suspected, fraud or violation of the Company’s code of conduct or ethics policy. The Board of Directors had approved the Policy on Vigil Mechanism/Whistle Blower and the same is hosted on the website of the Company. This Policy inter-alia provides a direct access to the Chairman of the Audit Committee.

Your Company hereby affirms that no Director/employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. Brief details about the policy are given in the Report on Corporate Governance as annexed to this Report.

RISK MANAGEMENT

The Company through its Audit Committee oversees the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting. The Audit Committee’s objective is to ensure sustainable business growth with stability and to promote a proactive approach in evaluating, resolving and reporting risks associated with the business. The details of Risk Management as practiced by the Company are provided as part of Management Discussion and Analysis Report as annexed to this Report.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company’s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and verified by Statutory as well as Internal Auditors. The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorised and recorded. Information provided to management is reliable and timely and statutory obligations are adhered to. Details of the same are provided in the Management Discussion and Analysis Report as annexed to this Report.

The Company has an established Internal Financial Control framework including internal controls over financial reporting, operating controls and anti-fraud framework. The framework is reviewed regularly by the management and tested by internal audit team. Based on the periodical testing, the framework is strengthened, from time to time, to ensure adequacy and effectiveness of Internal Financial.

STATUTORY AUDITOR’S

M/s Singhi Chugh & Kumar (FR No. 013613N) Chartered Accountants were re-appointed as the Statutory Auditor of the Company in the 25th Annual General Meeting of the Company for a period of 5 years subject to ratification by members of the Company in every Annual General Meeting at a remuneration to be decided by the Board of Directors in consultation with the Auditors.

The Audit Committee in their meeting held on 29th May, 2018 recommended the ratification of appointment of Statutory Auditors of the Company for the financial year 2018-19 by the members in the ensuing 27th Annual General Meeting of the Company. The necessary resolution for ratification of the appointment of Statutory Auditors of the Company has been included in the Notice of the ensuing 27th Annual General Meeting for ratification by the Members of the Company.

Certificates have been received from them as per the provisions of Section 139 of the Companies Act, 2013 and to the effect that their ratification as Auditors of the Company, if made, would be within the limits prescribed under Section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for ratification as statutory auditors of the Company.

The Auditor’s Report for the financial year ended on 3151 March, 2018 does not contain any qualification, observation or adverse comment.

COST AUDIT:

The Cost audit is not applicable on the Company.

SECRETARIAL AUDITORS

The Company has undertaken Secretarial Audit for the financial year 2017-18 in terms of Section 204 of the Act, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Your Company had appointed Agarwal S. & Associates, Company Secretaries, New Delhi to conduct the Secretarial Audit of the Company for the financial year ended on March 31st, 2018. The Secretarial Audit Report for the financial year ended 31st March, 2018 in Form No. MR-3 is attached as Annexure E to this Report. The observation in the Secretarial Audit Report is self explanatory.

THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made there under, your Company has constituted an Internal Complaints Committee (ICC). During the year under review, there were no cases received/filed pursuant to the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

EXTRACT OF THE ANNUAL RETURN

The extract of annual return in Form MGT-9 as required under Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014 is annexed as Annexure F to this Report.

REMUNERATION POLICY OF THE COMPANY

The objective of the Remuneration Policy is to attract, motivate and retain qualified and expert individuals that the Company needs in order to achieve its strategic and operational objectives, whilst acknowledging the societal context around remuneration and recognising the interests of Company’s stakeholders. The Company’s policy on directors’ appointment and remuneration and other matters provided in Section 178(3) of the Act forms part of the Board’s Report as Annexure G.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

The Company has not given loans, guarantees and investments under Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, for the financial year 2017-18.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Audit Committee and the Board of Directors have approved the Related Party Transactions Policy. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

There were no materially significant transactions with Related Parties during the financial year 2017-18 which were in conflict with the interest of the Company. Suitable disclosures as required under Indian Accounting Standard 24 have been made in Note 38 of the Notes to the financial statements. The Company has not entered in any transaction / contract or arrangement with the Related Parties which requires the Board Approval as per Section 188 of the Companies Act, 2013 as all the transaction have been carried out in the ordinary course of business and on arms length basis. Hence for the particulars of contracts or arrangements with related parties falling under Section 188 of the Act and to be disclosed in the Board Report in Form AOC-2 is also not required to be enclosed.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The provisions of Section 135 of Companies Act, 2013 read with Companies (Corporate Social Responsibilities Policy) Rules, 2014 became applicable on the Company from the Financial Year 2016-2017. The Board of Directors and the CSR Committee review and monitor from time to time all the CSR activities being undertaken by the Company. The details of the members of the CSR Committee and the details of the meeting of CSR Committee along with their attendance held during the year are given in the Report on Corporate Governance as annexed to this Annual Report.

Mr. Chanderjeet Singh Bhatia, Independent Director of the Company is the Chairman of the Corporate Social Responsibility Committee.

The Company has maintained Corporate Social Responsibility Policy. The Corporate Social Responsibility Committee has been entrusted with the responsibility of recommending to the Board the activities/projects/programs to be undertaken by the Company as per its Corporate Social Responsibility Policy. The terms of reference of the CSR Committee include the matters specified in Section 135 of the Act.

An annexure containing the details on CSR, pursuant to Rule 8(1) of the Companies (Corporate Social Responsibility) Rules, 2014, is annexed as Annexure H.

PARTICULARS OF EMPLOYEES

As per provisions of Section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Companies Appointment and Remuneration of Managerial Personnel) Rules, 2014, every listed company is required to disclose the ratio of the remuneration of each director to the median employee’s remuneration and details of employees receiving remuneration exceeding limits as prescribed from time to time in the Directors’ Report. The said disclosure is annexed as Annexure I to the Board’s Report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.

RESEARCH AND DEVELOPMENT, CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The Particulars as described under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the companies (Accounts) Rules, 2014 are given in Annexure J to this report.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Act the Board of Directors, to the best of their knowledge and ability, confirm that:

a. In the preparation of the annual financial statements for the year ended 31st March, 2018, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;

b. For the financial year ended 31st March, 2018, such accounting policies as mentioned in the Notes to the financial statements have been applied consistently and judgments and estimates that are reasonable and prudent have been made 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 the financial year ended 31st March, 2018;

c. That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The annual financial statements have been prepared on a going concern basis;

e. That proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively;

f. That proper systems have been devised to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

Your Directors wish to place on record the overwhelming response received from the investors, financial institutions, bankers, business associates, suppliers for the consistent support received from them during the year. Your Directors wish to place on record their appreciation for the team spirit, dedication and commitment shown by the work force of the Company during this year.

For and on behalf of the Board of Directors

For SPL Industries Limited

Mukesh Kumar Aggarwal Shashi Agarwal

(Managing Director) (Director)

Place: Faridabad DIN : 00231651 DIN 06687549

Date: August 13, 2018 Add: C-1/4, Sector-11, Faridabad - 121007 Add: C-1/4, Sector-11,

Faridabad - 121007

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