@ S.P.APPARELS LTD. Regd. omcc: 39 A. Extension Street, Kaikampudur AVINASHI 541 654, Tamil Nadu India. Phnnc #9142957mm 5-mail' spindjaQJapappards cum Web : www.crprcppmrsmm CIN Nu.: Liarorrzzoosmongs 27'h August. 20“) Bombay Stock Exchange Limited National Stock Exchange ot‘lndra Limited Phimze Jeejeebhoy Towers. 'Exchange Plaza', Dalal Street. Bandr-a-Kurla Complex. Bandra (East). Mumbar 7400 001. Mumhar , 400 05l. Scrip Code: 540048 Symbol: SPAL Dear Sirs, Sub: Submission ofAnnual report for the Financial year 2019. Pursuant to Regulation 34“) of SEBl (LODR) Regulations. 2015, we are submitting herewith a copy of Annual Report ofthe Company for the Financial Year ZOl 8—20“) alongwith AGM Notice The said Annual Report ofthe Company for the Financial Year 20] 8-2019 alongwith AGM Notice have been sent to all the members at their email ids registered with the Company / Deposrtory Partrcrpants and dispatched to the members who have not provided their email ids through Registered Post on 27'” August. 20 I9. Further the same has also been uploaded in the Company‘s website at wuwspapparels com. Kindly take the above information on record. Thanking You. For SEApmrels Limited, My\ , KVinodhini Company Secretary and Compliance Officer IA GOVT. OF INDIA RECOGNISED THREE STAR EXPORT HOUSE) S.P. APPARELS LIMITED STITCHING VALUE CREATION ANNUAL REPORT 2018-19 ONE SEAM AT A TIME 21 S.P. APPARELS LIMITED STITCHING VALUE CREATION ANNUAL REPORT 2018-19 ONE SEAM AT A TIME 22 DIRECTORS’ REPORT To The Members, The Directors of your Company are pleased to present the 14th Annual Report on the business and operations of the Company together with the Audited Financial Statements (Standalone & Consolidated) for the year ended 31st March, 2019. The Management Discussion and Analysis is also included in this Report. FINANCIAL RESULTS The Company’s financial performance for the year ended 31st March, 2019 is summarised below: PARTICULARS STANDALONE CONSOLIDATED I`in Million) 2018-19 2017-18 2018-19 2017-18 Sales and other income Revenue from Operations 7,781.42 6,280.10 8,263.76 6,624.15 Other Income 34.14 164.55 34.40 163.82 Total 7,815.56 6,444.65 8,298.16 6,787.97 Profit before Interest & Depreciation 1,340.60 1,202.87 1,372.77 1,221.97 Less: Interest 60.81 286.20 62.44 287.42 Depreciation 232.79 240.70 215.88 223.89 Profit Before Tax 1,047.00 675.97 1,094.45 710.66 Less : Taxation Provision for Current Tax 362.08 252.73 367.75 253.71 MAT Credit -- -- (0.89) (1.01) Deferred Tax Expenses / (Credit) (12.79) 3.12 (6.13) (20.17) Profit After Tax 697.71 420.12 733.72 478.13 Other comprehensive Income (Net of tax) 40.30 (50.03) 40.30 (50.03) Minority Interest - - 0.61 (8.59) Total Comprehensive Income 738.01 370.09 774.63 419.51 Review of Operations: Retail Division Garment Division: Our strategy in retail division during the FY 2018 – 19 was to This financial year has been a good year where we have grown by increase our presence in large format stores by another 50%. 19%. During this financial year we have added couple of factories During the financial year 2019 – 20 our endeavour is to improve and added sewing machines to our capacity. We have added our presence through EBO’s through franchise model. We are 450 sewing machines during the current year, and we are in the planning to improve our distributor base considerably during the process of increasing our factories and capacity in coming years. current year and improve the product mix which will improve the Our customer base has increased, and we are looking to increase revenue during the years to come. our customer base further. Now we have customer across SP UK geographies. Our subsidiary company SPUK’s total revenue recorded Rs.481.84 Our debottlenecking, Modernization and expansion in our spinning millions for FY 2018 – 19 as against a revenue of Rs.353.63 millions plant is completed and we have commenced the production during FY 2017 – 18 at a growth rate of 36.26%. EBITDA recorded successfully. Rs.26.96 millions as against Rs. 12.88 million for FY 2017 – 18. Putting up Bio-logical treatment plant in our dyeing house is under There was no change in the nature of business of the Company process and is expected to be completed by the end of second quarter of the fiscal year 2020. during the financial year ended 31st March 2019. S.P. APPARELS LIMITED STITCHING VALUE CREATION ANNUAL REPORT 2018-19 ONE SEAM AT A TIME 23 DIRECTORS’ REPORT (CONTD.) DIVIDEND STATEMENT ON COMPLIANCE WITH SECRETARIAL STANDARDS Considering the capital requirement for ongoing business The Directors have devised proper systems to ensure compliance expansion, the Board of Directors has not recommend any dividend with the provisions of all applicable Secretarial Standards and on the equity shares of the Company for the financial year 2018- that such systems are adequate and operating effectively. The 2019. Company has duly complied with Secretarial Standards issued by the Institute of Company Secretaries of India on meeting of the RESERVES & SURPLUS Board of Directors (SS-1) and General Meetings (SS-2). As at March 31, 2019 the Company had reserves of Rs. 4,597.58 DIRECTORS’ RESPONSIBILITY STATEMENT million. During the year under review the company has transferred Rs. 738.01 Million to Other Equity (General reserve) Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, it is TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION hereby confirmed that: AND PROTECTION FUND (a) in the preparation of the annual accounts, the applicable Since there was no unpaid/unclaimed Dividend, the provisions of accounting standards had been followed; Section 124 & 125 of the Companies Act, 2013 relating to transfer of Unclaimed dividend to Investor Education and Protection fund (b) the directors had selected such accounting policies and applied does not arise. them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of SHARE CAPITAL the state of affairs of the company at the end of the financial The issued, subscribed and paid up share capital of the Company year and of the profit of the company for that period; as at 31.03.2019 stood at Rs.25,69,26,000/- divided into 2,56,92,600 (c) the directors had taken proper and sufficient care for the Equity Shares of Rs.10/- each. maintenance of adequate accounting records in accordance During the financial year under review, the Company has redeemed with the provisions of this Act for safeguarding the assets of its entire 2,00,00,000 10% Redeemable Cumulative Preference the company and for preventing and detecting fraud and other Shares of Rs.10/- each in accordance with the provisions of Section irregularities; 55 of the Companies Act, 2013 read with Companies (Share capital (d) the directors had prepared the annual accounts on a going and debentures) Rules 2014. concern basis; During the year under review, the Company has issued and allotted (e) the directors laid down internal financial controls to be followed 5,25,000 equity shares of Rs.10/- each at Rs.382.02 per Share to by the Company and such internal financial control were Promoters of the Company on preferential basis. adequate and operating effectively and EXTRACT OF ANNUAL RETURN (f) the directors had devised proper systems to ensure compliance Pursuant to section 92 (3) of the Act and Rule 12 (1) of the Companies with the provisions of all applicable laws and that such systems (Management and Administration) Rules, 2014, an extract of annual were adequate and operating effectively. return in MGT-9 is annexed as Annexure-A to this report and the DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS same has been hosted on the website of the Company and can UNDER SECTION 143(12) OTHER THAN THOSE WHICH ARE be viewed at http://www.spapparels.com/ REPORTABLE TO THE CENTRAL GOVERNMENT CAPITAL EXPENDITURE There were no instances of frauds identified or reported by the As on 31st March, 2019, the gross fixed assets block stood at Statutory Auditors during the course of their audit pursuant to Rs.5,994.85 Million and net fixed assets block at Rs 3,682.34 Section 143(12) of the Companies Act, 2013. Million. Additions to Fixed Assets during the year amounted to Rs. DECLARATION OF INDEPENDENT DIRECTORS 827.57 Million. The Company has received declarations from all the Independent BOARD AND COMMITTEE MEETINGS Directors of the Company confirming that they met the criteria of The details of meetings of Board of Directors and Committees independence as stipulated in Section 149(6) of the Companies thereof and the attendance of the Directors in such meetings have Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and been enumerated in the Corporate Governance Report. Disclosure Requirements) Regulations, 2015. Further, they have also declared that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. S.P. APPARELS LIMITED STITCHING VALUE CREATION ANNUAL REPORT 2018-19 ONE SEAM AT A TIME 24 DIRECTORS’ REPORT (CONTD.) COMPANY’S POLICY RELATING TO DIRECTORS APPOINTMENT, financial year ended 31st March, 2019 relate and the date of the PAYMENT OF REMUNERATION AND OTHER MATTERS report. PROVIDED UNDER SECTION 178(3) OF THE COMPANIES ACT, CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, 2013 FOREIGN EXCHANGE EARNINGS AND OUTGO The Company pursuant to the provisions of Section 178 of the The information pertaining to conservation of energy, technology Companies Act, 2013 and in terms of Regulation 19(4) of the SEBI absorption, Foreign Exchange Earnings and outgo as required Listing Regulations has formulated a policy on Nomination and under section 134(3)(m) of the Companies Act, 2013 read with Remuneration for its Directors, Key Managerial Personnel and Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as senior management.