To the Members
Your Directors have pleasure in submitting their 25th Annual Report of theCompany together with the Audited Statements of Accounts for the year ended March 312016.
1. FINANCIAL RESULTS
The Company's financial performance for the year under review alongwith previous year'sfigures are summarised hereunder :
|Particulars ||2015-16 ||2014-15 |
|Net Sales /Income from || || |
|Business Operations ||22538.08 ||35425.69 |
|Other Income ||114.67 ||234.04 |
|Total Income ||22652.75 ||35659.73 |
|Less: Expenses ||22900.47 ||32177.06 |
|Total ||(247.72) ||3482.67 |
|Less: Interest ||(2211.93) ||1318.29 |
|Profit before Depreciation ||(2459.65) ||2164.38 |
|Less: Depreciation ||(1156.96) ||993.00 |
|Profit/Loss after depreciation and Interest ||(3616.61) ||1171.38 |
|Less: Exceptional Item ||(6822.44) ||-- |
|Profit/Lossbefore Tax ||(10439.05) ||-- |
|Less: Current Income Tax ||-- ||259.85 |
|Less: MAT (Entitlement)/Utilisation ||-- ||140.38 |
|Less: Previous year adjustment of Income Tax ||(259.54) ||10.89 |
|Less: Deferred Tax ||259.54 ||43.98 |
|Net Profit / Loss afterTax ||(10439.05) ||716.29 |
|Dividend (including Interim if any and final) ||-- ||-- |
|Net Profit after dividend and Tax ||(10439.05) ||716.29 |
|Amount transferred to General Reserve ||-- ||-- |
|Balance carried to Balance Sheet ||(10439.05) ||716.29 |
|Earning per share (Basic) ||(4.57) ||0.33 |
|Earning per Share(Diluted) ||(4.57) ||0.33 |
The Board of Director has not recommended any dividend on the Share Capital of theCompany for the period ended March 312016 considering the current cash flow and Profitand Loss account of the Company.
3. TRANSFERTO RESERVES
The company has not transferred any amount to the General Reserve.
4. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS
Your Directors wish to present the details of Business operations done during the yearunder review: a. Performance
During the year under review the performance of the Company was affected due toinsufficient working capital facilities cut-throat competition from integrated units andother factors also i.e. shortage of working capital facilitiy and continuous slow down inthe local and international market in the textiles industry. With the limited resourcesavailable the company founded it extremely difficult to run the whole plant. Furtheroperation of the Company also affected due to suspension of ongoing expansion projects onaccount of non disbursement of term loan facilities on timely basis. The Company hasincurred heavy Loss after tax of ' 10439.23 Lakhs in as against a Profit after Tax of '716.29 Lakhs in the previous year 2014-15 and the turnover of the Company has reduced to '22538.08 Lakhs as against ' 35425.70 Lakhs during the last Year 2014-15.
b. Marketing and Market environment
Your Company believes that its scale of operations and integration across the textilechain will in future offer significant advantages in both cost and revenue. During theyear under review the company performance is affected due to continuing slowdown in localand international market. Your Company is making efforts to sustained with existingCustomers with local and international market. Your Company work hard to meet thecompetition as well as to enable to maintain long standing business relationship.
c. Future Prospects including constraints affecting due to Government policies
We expect the textile segments to turn favorable based on the various factors likemacro economy condition and the Company is hopeful of gradually improved financialperformance in the coming year and hope to provide good results.
5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTSRELATE ANDTHE DATE OFTHE REPORT
There were no material changes and commitments affecting the financial position of theCompany occurred between the end of the financial year to which this financial statementsrelate and the date of this report.
6. SIGNIFICANT AND MATERIAL ORDERS PASSED BYTHE REGULATORS OR COURTS
There were no significant and material orders passed by the regulators / courts thatwould impact the going concern status of the Company and its future operations.
7. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year ended March 312016 asstipulated under Regulation 34(2) and (3) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 with Stock Exchanges in India is presented in the aseparate section forming a part of this Annual Report.
8. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in "AnnexureA" and is attached to this report.
9. RISK MANAGEMENT POLICY
Risk management includes identifying types of risks and its assessment risk handlingand monitoring and reporting. The Company has laid down a well-defined risk managementmechanism covering the risk mapping and trend analysis risk exposure potential impactand risk mitigation process. A detailed exercise is being carried out to identifyevaluate manage and monitor the principal risks that can impact its ability to achieveits strategic objectives. These are discussed at the meetings of the Audit Committee andthe Board of Directors of the Company. The Company has adopted Risk Management Policy inaccordance with the Listing Regulations 2015.
The Risk Management Policy is available onweblinkhttp://www.shekhawatiyarn.com/Companypolicies.html. A Risk Management Committeeunder the Chairmanship of Mr. Sushil Kumar Poddar Independent Director has also beenconstituted to oversee the risk management process in the Company.
10. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES
Pursuant to Section 135 of the Companies Act 2013 and the relevant rules the Boardhas constituted Corporate Social Responsibility (CSR) Committee under the Chairmanship ofMr. Sushil Kumar Poddar. The other members of the Committee are Mr. Mukesh Ruia and Ms.Jyoti Thakkar. The Board of Directors based on the recommendations of the Committeeformulated a CSR Policy. The Company could not undertake CSR activities during thisfinancial year considering the current Cash Flow and Profit and Loss Account of theCompany. Also as per Companies Act 2013 the Company is required to make CSR expenditurebased on the average profits of the last three financial years and the requirement ofmaking such expenditure was introduced in recent financial years.As the regulation at thatpoint of time did not require the Company to make a provision for the same it made itdifficult for the Company to make such expenditure during the financial year in which itwas suffering losses. The detailed CSR Policy is available on weblinkhttp://www.shekhawatiyarn.com/Companypolicies.html.Annual report on CSR as required underCompanies (Corporate Social Responsibility Policy) Rules 2014 is furnished in "AnnexureB" and forms part of this report.
11. DISCLOSURE UNDER THE SEXUAL HARASSEMENT OF WOMAN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has been employing woman employees in various cadres within its office andfactory premises. The Company has in place a policy against Sexual Harassment in line withthe requirements of the Sexual Harassment of woman at work place (Prevention Prohibitionand Redressal) Act 2013. Internal Complaint Committee is set up to redress any complaintsreceived and are monitored by woman line supervisors. All employees are covered under thepolicy. There was no complaint received from any employee during the financial year2015-16 and hence no complaint is outstanding as on March 312016 for redressal.
12. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013
There was no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.
13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADEWITH RELATED PARTIES
During the year under review all related party transactions that were entered intoreport were on an arm's length basis and in ordinary course of business. The Company hasnot entered into any contracts/ arrangements / transactions with related parties whichcould be considered material in accordance with policy of the Company on Material relatedparty transactions or under sections 188 (1) of the Companies Act 2013. Accordingly therewere no particulars to reports in AOC-2.
The policy on the materiality of the Related Party Transactions and also on dealingwith the Related Party Transactions as approved by the Audit Committee and Board ofDirectors is available on the weblinkhttp://www.shekhawatiyarn.com/Companypolicies.html.
14. AUDITORS ANDTHE PRACTICING COMPANY SECRETARY REPORTS
The notes on accounts and the observations of the Auditors in the reports on theaccounts of the Company are self explanatory and does not call for any furtherclarifications.
15. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OFTHEIR DUTIES
The Company's Policy relating to appointment of Directors payment of Managerialremuneration including criteria for determining Directors' qualifications positiveattributes independence of Directors and other related matters as provided under Section178(3) of the Companies Act 2013 is furnished in "Annexure C" and isattached to this report.
16. ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and Administration) Rules 2014 is furnished in "AnnexureD" and is attached to this Report.
17. SUBSIDIARIES JOINTVENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
The Company has neither accepted nor renewed any deposits during the year under review.
19. MEETINGS OFTHE DIRECTORS
The Board met 7 (Seven) times during the financial year the details of which are givenin the Corporate Governance Report that forms part of this Annual Report. The interveninggap between any two meetings was within the periods prescribed by the companies Act 2013and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 entered into with the stock exchange.
20. DIRECTORS RESPONSIBILITY STATEMENT
In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submit its responsibility Statement:-
a) Applicable accounting standards have been followed with explanation for any materialdepartures.
b) Selected accounting policies have been applied consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the company at the end of the financial year and of the profit and loss ofthe company for that period.
c) Proper and sufficient care has been taken for the maintenance of adequate accountingrecords for safeguarding the assets of the company and for preventing and detecting fraudand other irregularities.
d) The annual accounts are prepared on a going concern basis and
e) Internal financial controls laid have been followed by the company and that suchcontrols are adequate and are operating effectively. Explanation clarifies that suchcontrols means policies and procedures adopted and adherence by the company for orderlyand efficient conduct of business for safeguarding assets prevention and detection offrauds and errors and maintenance of accounting record and timely preparation of financialstatements and review its efficacy.
f) The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
21. DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year following Directors appointed and resigned in the Company.
Ms. Jyoti Thakkar and Ms. Swati Sahukara who were appointed as an AdditionalIndependent Director by the Board of Directors on the recommendation of Nomination andremuneration Committee on May 30 2015 and August 14 2015 respectively. As their term asadditional director expires in the 24th Annual General Meeting. They wereappointed as Directors in the said Annual General Meeting of the Company held on September22 2015.
As per the provisions of Section 152(6) of the companies Act 2013 Mr. Sanjay JogiNon-Executive Director retires at the ensuing Annual General Meeting and being eligibleseeks re-appointment. The Board recommends his reappointment.
Mr. Rohit Chandgothia Independent Director and Mrs. Rekha Somani Independent Directorhave resigned from the Directorship of the Company w.e.f May 30 2015 due to thepre-occupation. The Board places on record its appreciation for the services rendered byMr. Rohit Chandgothia and Mrs. Rekha Somani during their tenure with the Company.
Appointment / Resignations of the Key Managerial Personnel
Mr. Suresh Chandra Gattani has been appointed as Chief Financial Officer from October25 2015 in place of Mr. Shivratan Agarwal Chief Financial Officer.
Pursuant to the provisions of the Act and Regulation 27 of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a separate exercise was carried out toevaluate the performance of individual Directors including the Chairman of the Board whowere evaluated on parameters such level of engagement and contribution and independence ofjudgement thereby safeguarding the interests of the Company. The performance evaluation ofthe Chairman and the Non Independent Directors was carried out by the IndependentDirectors. The board also carried out annual performance evaluation of the working of itsCommittees. The Directors expressed their satisfaction with the evaluation process.
The Company have conducted various presentation during the financial year tofamiliarize Independent Directors with the Company their roles responsibilities in theCompany performance update of the Company global business environment technology andthe risk management system of the Company. Further the Directors are encouraged to attendand to the training programmes being organized by various regulators/bodies/Institution onabove matters and freedom to interact with the management of the Company.
22. DECLARATION OF INDEPENDENT DIRECTORS
The company has received necessary declaration from each Independent Director undersection 149(7) of the Companies Act 2013that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 Clause 49 of Listing Agreement andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
23. Listing Agreement
The Securities and Exchange Board of India (SEBI) on September 2 2015 issued SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 with the aim toconsolidate and streamline the provisions of the Listing Agreement for different segmentsof capital markets to ensure better enforceability. The said regulations were effectivefrom December 1 2015. Accordingly all listed entities were required to enter into theListing Agreement within six months from the effective date. The Company entered intouniform Listing Agreement with BSE Limited and the National Stock Exchange of IndiaLimited during December 2015.
24. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE The Audit Committee consists of thefollowing members:
|Sr. No. ||Name of the Members ||Designation |
|1 ||Mr. Sushil Kumar Poddar ||Chairman |
|2 ||Mr. Mukesh Ruia ||Member |
|3 ||Ms. Jyoti Thakkar ||Member |
The above composition of the Audit Committee consists of independent Directors viz.Mr. Sushil Kumar Poddar and Ms. Jyoti Thakkar who form the majority. More details on theCommittee are given in the Corporate Governance Report which forms part of this AnnualReport.
The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of co employees and the Company.The details of the Whistle Blower Policy is explained in the Corporate Governance Reportand is also displayed on the website of the Company.
25. AUDITORS STATUTORY AUDITORS
M/s.Ajay Shobha & Co. Chartered Accountant were appointed as Statutory Auditor ofthe Company at the 24th Annual General Meeting held on September 22 2015 tohold office till the conclusion of the Annual General Meeting to be held in the Calendaryear 2020. In terms of the first proviso to section 139(1) of the Companies Act 2013 theappointment of auditors shall be placed for ratification at every Annual General Meeting.Accordingly the appointment of Ajay Shobha & Co. Chartered Accountant as statutoryauditors of the Company is placed for ratification by the shareholders.
The Company has received a letter from the auditors to the effect that theirre-appointment to hold office from the conclusion of this Annual General Meeting till theconclusion of next Annual General Meeting if made would be within the prescribed limitsunder section 141(3)(g) of the Companies Act 2013 they fulfill the criteria provided inSection 141 of the Companies Act 2013 and are not disqualified for their re-appointment.
As per the requirement of Section 148 of the Companies Act 2013 read with thecompanies (Cost Record and Audit) Rules 2014 the Audit of Cost Account related toTextile product is being carried out every year. The Board of Directors have based on therecommendation of the Audit Committee appointed M/s. N. Ritesh & Associates CostAccountant Mumbai (Membership No. M/26963) to audit the cost accounts of the Company forthe year ended March 312017 on a remuneration fixed between the Board and Cost Auditor.As required under the Act necessary resolution seeking members' ratification for theremuneration payable to M/s. N. Ritesh & Associates is included as item Number 4 ofthe Notice convening 25th Annual General Meeting.
Mr. Vishal Manseta Practicing Company Secretaries was appointed to conduct thesecretarial audit of the company for the Financial Year 2015-16 as required under Section204 of the Companies Act 2013 and Rules there under. The secretarial audit report for FY2015-16 forms part of the Annual Report as "Annexure E" to the BoardReport.
M/s. D.Y. & Associates Chartered Accountants (Firm Registration No.141274W) wereappointed as internal Auditors of the Company w.e.f. November 14 2015 in place of M/s.K.M. Tulsian and Associates for the F.Y. 201516. The Internal Audit Report have beensubmitted to the Audit Committee and the Board of Directors.
Their appointment as an internal auditor for the financial year 2016-17 has beenapproved in the meeting of the Board of Directors held on May 26 2016.
26. INTERNAL FINANCE CONTROL
The Board has adopted system of internal control to ensuring the orderly and efficientconduct of its business including adherence to the Company's Policies the safeguardingof its assets the prevention and detection of fraud and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures. The Company is in process of strengthening its Internal Financial ControlSystem considering present financial situation and other recent developments.
27. HUMAN CAPITAL AND PARTICULARS OF EMPLOYEES Your company had 422 employees as onMarch 312016.
The statement containing the particulars of employees as required under Section 197(12)of the Companies Act 2013 read along with Rule 5(2) and 5(3) of the Companies(Appointmentand Remuneration of Managerial Personnel) Rules 2014 is not applicable to the company asno employees were in receipt in remuneration above the limits specified in Rule 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The details required as per Section 197(12) of the Companies Act 2013 read along withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed as "Annexure F" and forms part of the report.
a. BUY BACK OF SECURITIES
The Company has not bought back any of its securities during the year under review.
b. SHARES WITH DIFFERENTIAL VOTING RIGHTS
The company has not issued equity shares with differential voting rights during theperiod under review.
c. SWEAT EQUITY
The Company has not issued any Sweat Equity Shares during the year under review.
d. BONUS SHARES
No Bonus Shares were issued during the year under review.
e. EMPLOYEES STOCK OPTION PLAN
The Company has not provided any Stock Option Scheme to the employees.
29. ALLOTMENT OF EQUITY SHARES PURSUANTTO CONVERSION OFWARRANTS
The company had issued and allotted 179889330 warrants on preferential basiscarrying an option/entitlement to subscribe to equivalent number of Equity Shares at aprice of ' 3.06 (Including premium of ' 2.06/- each and face value of Re. 1/- each) of theCompany. On February 12 2016 and March 16 2016 Company allotted 53835294 and26000000 Equity shares respectively to Promoters and Non-Promoters who exercised theoption to convert warrants into equity shares. The Company has received listing andtrading approval for such shares by both stock exchanges.
30. CORPORATE GOVERNANCE
Your Company has complied with the Corporate Governance requirements as per revisedClause 49 of the Listing Agreement and the Regulation 27(2) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.A separate report on Corporate Governancealongwith a Certificate of Compliance from the Auditors forms a part of this report.
Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.
| ||FOR AND ON BEHALF OF THE BOARD OF DIRECTORS |
| ||FOR SHEKHAWATI POLY-YARN LIMITED |
| ||Sd/- ||Sd/- |
| ||Mukesh Ruia ||Ravi Jogi |
|Date: August 112016 ||Chairman & Managing Director ||Whole-Time Director |
|Place: Mumbai ||(DIN : 00372083) ||(DIN :06646110) |