We have pleasure in presenting the 2nd Annual Report on the business and operations ofCompany and Financial Results for the year ended 31st March 2015.
1. FINANCIAL RESULTS
Rs. In lakhs
| ||2014-15 ||2013-14 |
|Turnover Revenue ||9978.98 ||11340.59 |
|Gross Profit before financial ||595.64 ||686.38 |
|charges & depreciation || || |
|Less: Depreciation ||157.77 ||308.35 |
|Financial charges ||422.22 ||376.39 |
|Profit / (Loss) before taxation ||15.65 ||1.64 |
|Tax expenses ||- ||- |
|Profit / (Loss) after taxation ||15.65 ||1.64 |
Company achieved Total Revenue of Rs. 9978.98 Lakhs (including Other Income of Rs.129.50 lakhs) and achieved profit after tax of Rs. 15.65 Lakhs for the Year ended 31stMarch 2015 as against Total Revenue of Rs. 11340.59 Lakhs (including Other Income of Rs.241.82 lakhs) and profit after tax of Rs. 1.64 Lakhs for the Year ended 31st March 2014.In the second year of operations the Company has been focusing on the new markets andproduction of value added products and further improvement in quality. However theoperations could not bear fruits in the year as expected due to sluggish market conditionsand continued shortage of skilled manpower. The company is optimistic to overcome thesehurdles in the coming year.
3. SHARE CAPITAL
The authorized capital of the Company as on 31st March 2015 was Rs. 50000000/-divided into 5000000 equity shares of Rs. 10/- each and the paid-up capital wasRs. 34992700/- divided into 3499270 equity shares of Rs.10/- each.
In view of insufficient profits for the year under review the Board is unable torecommend dividend.
During the year under review the companys exports were Rs. 12.00 Crores asagainst Rs. 18.92 crores of the previous financial year. Steep fluctuations of cottonprices and lack of skilled manpower have affected the exports
6. FUTURE OUTLOOK
The Companys efforts in development of new value added products are expected toyield better results. The company has further plans to modernize its operations at itsspinning unit. This will help in improving the prospects of the company in the comingyears.
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 Clause 49 of the Listing Agreement is annexed to theReport on Corporate Governance.
8. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Managements Discussion and Analysis Report for the year under review asstipulated under Clause 49 of the Listing Agreement is presented in a separate sectionforming part of the Annual Report.
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 its manufacturing facility.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. RETIREMENT BY ROTATION
Pursuant to provisions of the Companies Act 2013 Sri Badrinarayan Agarwal (DIN00042123) Director will retire at the ensuing Annual General Meeting and being eligibleoffers himself for reappointment. The Board recommends his re-appointment
Smt Sushma Gupta (DIN 07147330) was appointed as an Additional Director who shall holdoffice till the date of this Annual General Meeting. A member proposed her candidature forappointment at the ensuing Annual General Meeting. In terms of the Companies Act 2013 SmtSushma Gupta is proposed to be appointed as independent Director for a term of 5 yearsnot liable for retirement by rotation. Brief resume of the Directors retiring by rotationand independent Director nature of their expertise in specific functional areas and namesof public companies in which they hold directorships as stipulated under clause 49 of thelisting agreement with the Stock Exchange are given as Annexure to the Notice.
Ms. Shilpa Agarwal was appointed as Company Secretary w.e.f. 9th February 2015.
During the year under review Sri Rajender Kumar Agarwal resigned from the directorshipof the Company from 31st March 2015 in terms of the restructuring of the organization andpursuant to the sanctioned scheme of demerger. The Board places on record its appreciationfor the valuable services and guidance rendered by Sri Rajender Kumar Agarwal during histenure as Director on the Board.
D. EVALUATION OF THE BOARDS PERFORMANCE
During the year the Board adopted a formal performance evaluation policy forevaluating its performance and as well as that of its Committees and individual Directorsincluding the Chairman of the Board. The exercise was carried out through a structuredevaluation process covering various aspects of the Boards functioning such ascomposition of the Board & committees experience & competencies performance ofspecific duties & obligations etc. Separate exercise was carried out to evaluate theperformance of individual Directors including the Board Chairman who were evaluated onparameters such as attendance contribution at the meetings and otherwise independentjudgement etc. The evaluation of the Independent Directors and that of the Chairman wascarried out by the entire Board excluding the Director being evaluated and the evaluationof Non-Independent Directors was carried out by the Independent Directors. A separatemeeting of Independent
Directors was also held during the year wherein the performance of Chairman BoardExecutive Directors was evaluated.
The Directors were satisfied with the evaluation results which reflected the overallengagement of the Board and its Committees with the Company.
E. REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is attached to this report as
F. 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.
G. FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS
Each newly appointed Independent Director is taken through a formal induction programincluding the presentation from the Managing Director on the Companys manufacturingmarketing finance and other important aspects. The Company Secretary briefs the Directorabout their legal and regulatory responsibilities as a Director. The induction forIndependent Directors include interactive sessions with Executive Committee MembersBusiness and Functional Heads visit to the manufacturing site etc. The details of suchprogram are available on companys 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 reappointment. They have confirmed their eligibility under Section 141 of theCompanies Act 2013 and the Rules framed there under for reappointment as Auditors of theCompany. As required under Clause 49 of the Listing Agreement the auditors have alsoconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India. The Statutory Auditors Report does notcontain any reservation qualification or adverse remark.
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 year2014-15 is annexed herewith as Annexure II to this Report. The Secretarial
Audit Report does 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 2015-16 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 annualaccounts the applicable accounting standards had been followed along with properexplanation relating to material departures; (b) the directors had selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company at the end of the financial year and of the profit and loss of the company forthat period; (c) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets 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) thedirectors had laid down internal financial controls to be followed by the company and thatsuch internal financial controls are adequate and were operating effectively; and (f) thedirectors had devised proper systems to ensure compliance with the provisions of allapplicable 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 onarms length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large. The Policy on materiality of relatedparty transactions as approved by the Board may be accessed on the Companys 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 III and forms part ofthis Report.
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 and hence the disclosure as required under Rules 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is not required.
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 IV tothis Report.
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 AuditCommittee 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 Companys websitewww.aanandalakshmi.com. There were no complaints received during the year 2014-15.
D. NUMBER OF BOARD MEETINGS
The Board of Directors of the Company met Nine (9) times during the year. For furtherdetails please refer report on Corporate Governance.
The Company received listing approval from BSE Limited on 26th March 2015 tradingpermission on 16th April 2015 and its shares are being traded on BSE Limited from 20thApril 2015 pursuant to the scheme of demerger. The Company confirms that it has paidlisting fees for the year to BSE Limited where its 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 nosubsidiaries joint ventures or associate companies. c. No significant or material orderswere passed by the Regulators or Courts or Tribunals which impact the going concern statusand Companys 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 theCompanys shareholders customers suppliers for the support and the confidence whichthey have reposed in the management. The Board place on record its appreciation of thecontribution made by the employees at all levels for their hard work solidarityco-operation and support.
By order of the Board For Aananda Lakshmi Spinning Mills Limited
|Place: Secunderabad ||B.N.Agarwal |
|Date: 16.05.2015 ||Chairman |
Aananda Lakshmi Spinning Mills Limited (ALSML) recognizes the importance of aligningthe business objectives with specific and measureable individual objectives and targets.The Company has therefore formulated the remuneration policy for its Directors KeyManagerial Personnel and other employees keeping in view the following objectives:
a) Ensuring that the level and composition of remuneration is reasonable and sufficientto attract retain and motivate to run the company successfully.
b) Ensuring that relationship of remuneration to performance is clear and meets theperformance benchmarks.
c) Ensuring that remuneration involves a balance between fixed and incentive payreflecting short and long term performance objectives appropriate to the working of thecompany and its goals.
2. SCOPE AND EXCLUSION:
This Policy sets out the guiding principles for the Nomination and RemunerationCommittee for recommending to the Board the remuneration of the directors key managerialpersonnel and other employees of the Company.
3. TERMS AND REFERENCES:
In this Policy the following terms shall have the following meanings:"Director" means a director appointed to the Board of the Company. "KeyManagerial Personnel" means
(i) the Chief Executive Officer or the Managing Director or the manager;
(ii) the Company secretary;
(iii) the Whole-time director;
(iv) the Chief Financial Officer; and
(v) such other officer as may be prescribed under the Companies Act 2013
"Nomination and Remuneration Committee" means the committee constituted byALSMLs Board in accordance with the provisions of Section 178 of the Companies Act2013 and Clause 49 of the Equity Listing Agreement.
A. Criteria for Appointment of Non-Executive Directors & Independent Directors
a) The Non-Executive Directors shall be of high integrity with relevant expertise andexperience so as to have a diverse Board with Directors having expertise in the fields ofmarketing finance taxation law governance and general management.
b) In case of appointment of Independent Directors the Nomination & Remuneration(N&R) Committee shall satisfy itself with regard to the independent nature of theDirectors vis--vis the Company so as to enable the Board to discharge its function andduties effectively.
c) The N&R committee shall ensure that the candidate identified for appointment asa director is not disqualified for appointment under section 164 of the Companies Act2013.
d) In case of re-appointment of Non-Executive Directors & Independent Directorsthe Board shall take into consideration the performance evaluation of the Director and hisengagement level.
Remuneration of Non-Executive Directors & Independent Directors
i. A Non-Executive Director & Independent Director shall be entitled to receivesitting fees for each meeting of the Board or Committee of the Board attended by him ofsuch sum as may be approved by the Board of Directors within the overall limits prescribedunder the Companies Act 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 including any amendment or modification thereto as may be in force;
ii. The Independent Directors of the Company shall not be entitled to participate inthe Stock Option Scheme of the Company if any introduced by the Company.
B. Criteria for Appointment of Executive Directors and Key Managerial Personnel (KMP)
For the purpose of appointment of any Executive Director and Key Managerial Personnel(KMP) the N&R Committee shall identify persons of integrity who possess relevantexpertise experience and leadership qualities required for the position. The Committeeshall also ensure that the incumbent fulfils such other criteria as laid down under theCompanies Act 2013 read with Rules made there under or other applicable laws.
Remuneration of Executive Directors & KMP
i. The Board on the recommendation of the Nomination and Remuneration (N&R)Committee shall review and approve the remuneration payable to the Executive Directors ofthe Company within the overall limits prescribed under Companies Act 2013 including anystatutory modification or amendment thereto as may be in force subject to approval by theshareholders in General Meeting.
ii. The Board on the recommendation of the N&R Committee shall also review andapprove the remuneration payable to the Key Managerial Personnel of the Company.
iii. The remuneration of the Executive Directors and KMP may be broadly divided intofixed and variable components. The fixed component comprises salary allowancesperquisites amenities and retiral benefits. The variable component comprises performancebonus.
C. Remuneration to Other Employees:
i. Employees shall be assigned grades according to their qualifications and workexperience competencies as well as their roles and responsibilities in the organization.Individual remuneration shall be determined within the appropriate grade and shall bebased on various factors such as job profile skill sets seniority experience andprevailing remuneration levels for equivalent jobs.
ii. The remuneration maybe divided into two components viz. fixed component comprisingsalaries perquisites and retirement benefits and a variable component comprisingperformance bonus.