We have pleasure in presenting the 3rd Annual Report on the business andoperations of Company and Financial Results for the year ended 31st March 2016.
1. FINANCIAL RESULTS
Rs. In lakhs
| ||2015-2016 ||2014-2015 |
|Turnover Revenue ||8532.99 ||9978.98 |
|Gross Profit before financial charges & depreciation ||138.29 ||595.64 |
|Less: Depreciation ||145.33 ||157.77 |
|Financial charges ||591.61 ||422.22 |
|Exceptional items ||21.51 ||- |
|Profit / (Loss) before taxation ||(896.74) ||15.65 |
|Profit / (Loss) after taxation ||(896.74) ||15.65 |
During the year under review the company achieved total turnover of ' 8533 lakhs whichis lower than that of the previous year. The operations in the year have ended in a lossof ' 896.74 lakhs as against a small profit in the previous year.
Performance for the year under review was affected as Spinning Industry faced manyChallenges due to economic slowdown and recessionary conditions prevailing in China andEuropean Countries. The reduction in turnover is on account of count patterns adopted bythe company suitable to the market. The company is optimistic to overcome these hurdles inthe coming year.
3. CHANGE IN SHARE CAPITAL
There are no change in share capital during the year under review.
In view of losses incurred by the Company during the year under review the Board isunable to recommend dividend.
During the year under review the company's exports were ' 2.60 Crores as against '12.00 crores of the previous financial year.
The decrease in exports was due to adverse global market conditions coupled withfluctuation in foreign currency
6. FUTURE OUTLOOK
The Company's efforts in development of new value added products are expected to yieldbetter results. The company has further plans to modernize its operations at its spinningunit. This will help in improving the prospects of the company in the coming years.
7. CORPORATE GOVERNANCE
A separate report on Corporate Governance is enclosed as a part of this Annual Report.A certificate from the Auditors of the Company regarding compliance with CorporateGovernance norms stipulated under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is annexed to the Report on Corporate Governance as Annexure - V
8. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 read with Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is presented in a separate section forming part of theAnnual Report as Annexure - IV
9. ENVIRONMENT AND POLLUTION CONTROL
The manufacturing facility has obtained environmental clearance from the PollutionControl Board concerned and is in compliance with all current environmental legislation.As an integral part of its environment protection drive the Company ensures the veryminimum quantity of generation of waste low emission levels and low noise pollutionlevels during operations of all manufacturing facilities.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. RETIREMENT BY ROTATION
Pursuant to provisions of the Companies Act 2013 Sri Jeetender Kumar Agarwal (DIN00041946) Director will retire at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment. The Board recommends his reappointment.
B. APPOINTMENT AND CESSATION
Ms. Pooja Bung was appointed as Company Secretary w.e.f 30th May 2016 and Ms. ShilpaAgarwal Company Secretary has resigned w.e.f 20th April 2016.
C. EVALUATION OF THE BOARDS PERFORMANCE
Board carried out through a structured evaluation process covering various aspects ofthe Board's functioning such as composition of the Board & committees experience& competencies performance of specific duties & obligations etc. Separateexercise was carried out to evaluate the performance of individual Directors including theBoard Chairman who were evaluated on parameters such as attendance contribution at themeetings and otherwise independent judgement etc. The evaluation of the IndependentDirectors and that of the Chairman was carried out by the entire Board excluding theDirector being evaluated and the evaluation of Non-Independent Directors was carried outby the Independent Directors. A separate meeting of Independent Directors was also heldduring the year wherein the performance of Chairman Board and Executive Directors wasevaluated.
The Directors were satisfied with the evaluation results which reflected the overallengagement of the Board and its Committees with the Company.
D. REMUNERATION POLICY
The company follows a policy on remuneration of Directors and Senior ManagementEmployees. The policy is approved by the Nomination & Remuneration Committee and theBoard. More details on the same are given in the Corporate Governance Report.
E. DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors of the Company have given declaration stating that theymeet the criteria of independence as provided under Companies Act 2013.
F. FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS
The Company has formulated a familiarization program for Independent Directors toprovide insights into the Company's manufacturing marketing finance and other importantaspects to enable the Independent Directors to understand its business in depth andcontribute significantly to the Company. The Company Secretary briefs the Director abouttheir legal and regulatory responsibilities as a Director. The details of such program areavailable on the Company's website (www.aanandalakshmi.com).
11. AUDITORS & AUDITORS REPORT
A. STATUTORY AUDITORS
The Statutory Auditors of the Company M/s. Brahmayya & Co Chartered AccountantsHyderabad will retire at the conclusion of ensuing Annual General Meeting and are eligiblefor re-appointment. They have confirmed their eligibility under Section 141 of theCompanies Act 2013 and the Rules framed there under for re-appointment as Auditors of theCompany. As required under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the auditors have also confirmed that they hold a valid certificateissued by the Peer Review Board of the Institute of Chartered Accountants of India. TheStatutory Auditors' Report does not contain any reservation qualification or adverseremark.
However In respect of the observation made by the statutory auditors with regards toNonprovision of interest for delay in payments to MSME suppliers we have to state thatexplanation was given in Note 33 of the Notes to accounts which is self explanatory.
B. SECRETARIAL AUDITOR
During the year the Company has appointed M/s R & A Associates Practising CompanySecretaries as Secretarial Auditor. The Secretarial Audit report for the financial year2015-16 is annexed herewith as Annexure I to this Report. The Secretarial Audit Reportdoes not contain any reservation qualification or adverse remark.
C. COST AUDITOR
Pursuant to Section 148 of Companies Act 2013 the Board of Directors on therecommendation of Audit Committee appointed Aruna Prasad & Co. Cost Accountants asthe Cost Auditors of the Company for the year 2016-17 and has recommended the remunerationto the shareholders for their ratification at the ensuing Annual General Meeting. TheAuditor has confirmed that the appointment is within the prescribed limits and alsocertified that they are free from any disqualifications.
12. DIRECTORS RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
13. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large.
The Policy on materiality of related party transactions as approved by the Board may beaccessed on the Company's website.
Your Directors draw attention of the members to Note 29 to the financial statementwhich sets out related party disclosures.
14. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo is annexed and marked Annexure II and forms part of thisReport.
15. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.
16. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required pursuant to Section 197(12) of Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of the employees of the Company will be provided upon request. In termsof Section 136 of the Act the Report and Accounts are being sent to the members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by the members at the Registered Office of the Company duringbusiness hours on working days of the Company upto the date of the ensuing Annual GeneralMeeting. If any member is interested in obtaining a copy thereof such member may write tothe Company Secretary in this regard.
No employee was in receipt of remuneration in excess of the limits prescribed underRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 as amended and hence the disclosure as required under Rules 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is notrequired.
17. POLICY ON SEXUAL HARASSMENT:
The Company has adopted policy on Prevention of Sexual Harassment of Employees atworkplace in accordance with The Sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
During the year under review the Company has not received any complaints pertaining tosexual harassment.
18. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The Company has not made any loan given guarantee provided security or madeinvestments pursuant to the provisions of Section 186 of Companies Act 2013.
A. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure III to thisReport.
B. COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises Sri Surender Kumar Agarwal (Chairman) Sri Manish Guptaand Sri Devender Kumar Agarwal as other members.
All the recommendations made by the Audit Committee were accepted by the Board.
C. VIGIL MECHANISM
The Company has implemented a vigil mechanism policy to deal with instance of fraud andmismanagement if any. It provides for the directors and employees to report genuineconcerns and provides adequate safeguards against victimization of persons who use suchmechanism. The Policy on vigil mechanism may be accessed on the Company's websitewww.aanandalakshmi. com. There were no complaints received during the year 2015-16.
D. NUMBER OF BOARD MEETINGS
The Board of Directors of the Company met Five (5) times during the year. For furtherdetails please refer report on Corporate Governance.
The Company confirms that it has paid listing fees for the year to BSE Limited whereits shares are listed.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
a. Details relating to deposits covered under Chapter V of the Act.
b. The Company has no subsidiaries joint ventures or associate companies.
c. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
The Board of Directors is pleased to place on record their appreciation of theco-operation and support extended by All India Financial Institutions Banks and variousState and Central Government Agencies.
The Board would also like to thank the Company's shareholders customers suppliers forthe support and the confidence which they have reposed in the management. The Board placeon record its appreciation of the contribution made by the employees at all levels fortheir hard work solidarity co-operation and support.
| ||By order of the Board |
| ||For Aananda Lakshmi Spinning Mills Limited |
|Place : Secunderabad ||B.N.Agarwal |
|Date : 30.05.2016 ||Chairman |