We have pleasure in presenting the 4th Annual Report on the business andoperations of Company and Financial Results for the year ended 31st March 2017.
1. FINANCIAL RESULTS
| ||2016-2017 ||2015-2016 |
|Turnover/Revenue ||3827.58 ||8532.99 |
|Gross Loss before financial charges & depreciation ||(927.60) ||(138.29) |
|Less: Depreciation ||137.52 ||145.33 |
|Financial charges ||557.73 ||591.61 |
|Exceptional items ||- ||21.51 |
|Profit / (Loss) before taxation ||(1622.85) ||(896.74) |
|Tax expenses ||- ||- |
|Profit / (Loss) after taxation ||(1622.85) ||(896.74) |
During the year under review the company achieved total turnover of Rs.3827.58Lakhs which is lower than that of the previous year. The operations in the year have endedin a loss of Rs.1622.85 Lakhs as against loss of Rs. 896.74 Lakhs in previous year.
The Company's operations have been affected due to insufficient working capital pendingsanctions of restructuring facilities excess capacity in the industry; mismatch of cottonyarn and raw cotton prices huge raw material fluctuations leading to depressed marketconditions demonetization of high value currency and over dependence on yarn exports tochina has adversely affected the company during the year.
3. CHANGE IN SHARE CAPITAL
There is no change in Share Capital of the company during the year under review.
In view of losses incurred by the Company during the year under review the Boardis unable to recommend dividend.
During the year under review the company's has no exports as against Rs. 2.60crores in the previous financial year.
6. FUTURE OUTLOOK
The Company's efforts in development of new value added products such as Production ofFancy Melanged Yarns i.e neps slubs injection slubs grindles and lurex yarns areexpected to yield better results. Company is already holding Melange yarns of more than500 shades and developed another 100 yarns during the year under review and expected toincrease more in coming years.
The company has further plans to establish in-house fibre dyeing facilities at itsunit. This will help in improving the prospects of the company in future.
7. CORPORATE GOVERNANCE
The report on Corporate Governance is not being enclosed to this report in view of therelaxation under regulation 15(2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
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) 2015 is presented in a separate section forming part of the Annual Reportas 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 its manufacturing facility.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. APPOINTMENTS AND RESIGNATIONS
During the year under review Sri Badrinarayan Agarwal Chairman has resigned fromboard with effect from 15th May 2017 due to health issues. The Board recordsits appreciation for the services rendered by him from its inception. the board alsowishes him a peaceful retired life.
The necessary Resolution for obtaining the approval of Members for the re-appointmentof Sri Devender Kumar Agarwal (DIN No. 00042156) as Managing Director for the period ofthree years have also been included in notice for the ensuing Annual General Meeting.
B. RETIREMENT BY ROTATION
Pursuant to the provision of Section 152 of the Companies Act 2013 Sri Devender KumarAgarwal (DIN No. 00042156) Director will retire at the ensuing Annual General Meeting andbeing eligible offers himself for reappointment. The Board recommends his reappointment
C. EVALUATION OF THE BOARD'S PERFORMANCE
In compliance with the Companies Act 2013 and as per the Listing Regulations theperformance evaluation of the Board and of its Committee was carried out during the yearunder review. The Directors evaluation was broadly based on the parameters such asunderstanding of the Company's vision and objective skills knowledge and experienceparticipation and attendance in Board/ Committee meetings; governance and contribution tostrategy; interpersonal skills etc.
The Board has carried out the annual performance evaluation of its own performance theDirectors individually as well as evaluation of the working of its Board Committees. Astructured questionnaire was prepared covering various aspects of the Board's functioningsuch as adequacy of the composition of the Board and its Committees Board Cultureexecution and performance of specific duties obligations and governance.
A meeting of the Independent Directors was also held which reviewed performance ofnon-independent directors performance of the board as a whole and performance of thechairman after taking in to account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent directors at which the performance of the board its committees andindividual directors was also discussed. Performance evaluation of independent directorswas done by the entire board excluding the independent director being evaluated.
D. 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.
E. FAMILIARIZATION PROGRAMME FOR 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 CompanySecretary 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. BOARD AND THEIR COMMITTEES
1. BOARD OF DIRECTORS
a) Composition and Number of Board Meetings:
As on 31st March 2017 the Company's Board of Directors comprises 6 (Six)Directors. Of these 3 (three) are Promoter Directors and 3 (three) are IndependentDirectors. The Chairman was Non-Executive Promoter Director who has resigned from thecompany with effect from 15th May 2017. The Board of Directors of the Companymet Four (4) times during the year i.e on 30.05.2016 09.08.2016 14.11.2016 and14.02.2017
b) Disclosure of relationships between directors inter-se:
Except for Sri Badrinarayan Agarwal Sri Devender Kumar Agarwal and SriJeetender Kumar Agarwal being father and son there is no inter-se relationship betweenother Board Members.
2. AUDIT COMMITTEE
The Audit Committee comprises of Sri Surender Kumar Agarwal (Chairman) Sri ManishGupta and Sri Devender Kumar Agarwal as other members. All the recommendations made by theAudit Committee were accepted by the Board.
During the financial year ended March 31 2017 Four (4) Audit Committee Meetings wereheld on 30.05.2016 09.08.2016 14.11.2016 and 14.02.2017
3. NOMINATION & REMUNERATION COMMITTEE
The company follows a policy on Remuneration of Directors and Senior ManagementEmployees. The policy is approved by the Nomination & Remuneration Committee and theBoard. The Nomination and Remuneration Committee comprises of Sri Surender Kumar Agarwal(Chairman) Sri Manish Gupta and Smt Sushma Gupta as other members. All therecommendations made by the Nomination and Remuneration Committee were accepted by theBoard.
During the financial year ended March 31 2017 One (1) Nomination and RemunerationCommittee Meetings were held on 30.05.2016
4. STAKEHOLDERS' RELATIONSHIP COMMITTEE
Your company has constituted a Stakeholders' Relationship Committee to specificallylook into the mechanism of redressal of grievances of shareholders and other securityholders.
Sri Manish Gupta (Chairman) is the Non-Executive Director heading the Committee and Ms.Pooja Bung Company Secretary is the compliance office of the Company
There are no pending complaints during the year under review.
12. AUDITORS & AUDITORS' REPORT A. STATUTORY AUDITORS
As the members are aware M/s Brahmayya & Co. Chartered Accountants Hyderabad(ICAI Firm Regn. No.000513S) have been the Company's Statutory Auditors from inception. Inaccordance with section 139 of the Companies Act 2013 and rules made there under theCompany is required to appoint a new firm of Auditors for a term of five consecutive yearsfrom the conclusion of the ensuing Annual General Meeting.
Accordingly the Company proposes to appoint M/s K.S. Rao & Co. CharteredAccountants Hyderabad (ICAI Firm Regn. No.003109S) in place of M/s Brahmayya & Co.as its Statutory Auditors. The Board wishes to place on record its appreciation of theservices rendered by M/s Brahmayya & Co. Chartered Accountants in its longassociation with the Company.
M/s K.S.Rao & Co. Chartered Accountants have expressed their willingness to beappointed as the Statutory Auditors of the company and furnished the certificate of theireligibility and consent for the same under Section 141 of the Companies Act 2013 and therules framed thereunder in terms of the Listing Regulations the Auditors have confirmedthat they hold a valid certificate issued by the Peer Review
Board of the ICAI. The Board based on the recommendation of the Audit Committeerecommends the appointment of M/s K.S.Rao & Co. Chartered Accountants as theStatutory Auditors of the company. The Auditors' Report to the Shareholders for the yearunder review does not contain any qualification.
However In respect of the observation made by the Statutory Auditors in Annexure-A totheir report at Para 7(a) Para 8 and at note no.25 in notes to accounts the managementis of the considered opinion based on their discussions with the banks / financialinstitutions that with the implementation of restructuring of the loans and arehabilitation package being worked out the operations of the company will be normalizedand the company will be able to meet its liabilities to the banks and discharge itsstatutory dues in the near future.
With reference to the observations of the Auditor on note no.24(e) to the financialstatements the company has been advised that its claim on M/s Om Shanti Trading Companyis maintainable and company has taken adequate steps to defend its claim in the court oflaw. With reference to auditors observations on note no.35 to the financial statementsthe Board considers the note itself is self-explanatory.
B. SECRETARIAL AUDITOR
During the year the Company has appointed M/s NVVS Suryanarayana Rao PracticingCompany Secretaries as Secretarial Auditor in compliance with the provision of Section 204of the Companies Act 2013. The Secretarial Audit report in form MR-3 for the financialyear ended 31st March 2017 is annexed herewith as Annexure I to thisReport. The Secretarial Audit Report does not contain any qualification or adverse remark.
However In respect of the observation made by the Secretarial Auditors in theirreport the management is of the considered opinion based on their discussions with thebanks / financial institutions that with the implementation of restructuring of the loansand a rehabilitation package being worked out the operations of the company will benormalized and the company will be able to meet its liabilities to the banks and dischargeits statutory dues in the near future.
13. 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.
14. 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 made by the Company with Promoters Directors Key Managerial Personnel orother designated persons which may have a potential conflict with the interest of theCompany at large. Thus disclosure in Form AOC-2 is not required.
All Related Party transaction are presented to the Audit Committee and the board.Omnibus approval is obtained for the transactions which are foreseeable and repetitive innature. A Statement of all related party transactions is presented before the AuditCommittee and the Board on a quarterly basis specifying the nature value and terms andconditions of the transactions. The Policy on materiality of related party transactions asapproved by the Board may be accessed on the Company's website at http://www.aanandalakshmi.com/policy-policy.html Your Directors draw attention of the members toNote 30 to the financial statement which sets out related party disclosures.
15. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo required to be given pursuant to the provision of Section 134of the Companies Act 2013 read with the Companies (Account) Rules 2014 is annexed heretoand marked Annexure II and forms part of this Report.
16. 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 reportable material weakness in thedesign or operation was observed.
17. 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.
18. POLICY ON SEXUAL HARASSMENT:
The Company has in place a policy on Prevention of Sexual Harassment of Employees atworkplace in accordance with The Sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Internal Compliant Committee has been set to redresscomplaints received regarding sexual harassment.
During the year under review the Company has not received any complaints pertaining tosexual harassment.
19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The Company has not made any loan given guarantee or provided security pursuant to theprovisions 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 tothis Report.
B. WHISTLE BLOWER POLICY
The Company has in place a Whistle Blower Policy for vigil mechanism for thedirectors and employees to report genuine concerns to the management about unethicalbehavior fraud violation of Company's code of conduct and provides adequate safeguardsagainst victimization of persons who use such mechanism. The Policy on vigil mechanism maybe accessed on the Company's website at the link: www.aanandalakshmi.com. There were nocomplaints received during the year 2016-17.
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 nosubsidiaries joint ventures or associate companies. c. No significant by the Regulatorsor Courts or Tribunals which impact the going concern status and Company's operations infuture.
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'sshareholders customers suppliers for the support and the confidence which they havereposed in the management. The Board place on record its appreciation of the contributionmade by the employees at all levels for their hard work solidarity co-operation andsupport.
| ||By order of the Board |
| ||For Aananda Lakshmi Spinning Mills Limited |
| ||D.K.Agarwal |
| ||Managing Director |
|Place: Secunderabad ||Surender Kumar Agarwal |
|Date : 01-09-2017 ||Director |
ANNEXURE - II
Particulars of Energy Conservation Technology Absorption and Foreign Exchange Earningsand Outgo required under the Companies (Accounts) Rules 2014
A. CONSERVATION OF ENERGY
|i) The steps taken or impact on conservation of energy ||An energy audit was undertaken by a firm of consultants to improve upon the energy conservation measures. The recommendations from the audit were implemented. |
|ii) The steps taken by the Company for utilizing alternate sources of energy ||Nil |
|iii) The capital investment on energy conservation equipments ||Nil |
B. TECHNOLOGY ABSORPTION
|i) The efforts made towards technology absorption ||The Company has adapted indigenous tech- nology and innovated upon the same. |
|ii) The benefits derived like product improvement cost reduction product development or import substitution ||Product improvement increase in yield pro- duction of high value added products. |
|iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year) ||No technology has been imported during the last three years. |
|a. The details of technology imported ||NA |
|b. The year of import ||NA |
|c. Whether the technology been fully absorbed ||NA |
|d. If not fully absorbed areas where absorption has not taken place and the reasons thereof and ||NA |
|iv) The expenditure incurred on Research and De- velopment ||Expenditure on in-house Research & De- velopment was not incurred during the year under review. |
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
| || ||(Rs. in Lakhs) |
|i) Foreign Exchange Earned: ||2016-17 ||2015-16 |
|FOB value of exports ||- ||2650.22 |
|CIF value of exports ||- ||2708.82 |
|ii) Foreign Exchange used: || || |
|Commission on Exports ||- ||3.96 |
|Foreign Travel Expenses ||- ||9.08 |
|Stores & Spares ||- ||7.01 |