To the Members
Your Directors have pleasure in submitting their 26 Annual Report of the Companytogether with the Audited Statements of Accounts for the year ended March 31 2017.
1. FINANCIAL RESULTS
The Company's financial performance for the year under review along with previousyear's gures are summarised hereunder :
|Particulars ||2016-2017 ||2015-2016 |
|Net Sales /Income from || || |
|Business Operations ||9287.04 ||22538.08 |
|Other Income ||35.98 ||114.67 |
|Total Income ||9323.02 ||22652.75 |
|Less: Expenses ||9173.23 ||22900.47 |
|Total ||149.79 ||(247.72) |
|Less: Interest ||37.44 ||2211.93 |
|Pro t before Depreciation ||112.35 ||(2459.65) |
|Less: Depreciation ||1027.04 ||1156.96 |
|Pro t/Loss after depreciation and Interest ||(914.69) ||(3616.61) |
|Less: Exceptional Item & Prior period Exp. ||5183.12 ||6822.44 |
|Pro t/Loss before Tax ||(6097.81) ||(10439.05) |
|Less: Current Income Tax || || |
|Less: MAT (Entitlement)/Utilisation ||150.96 || |
|Less: Previous year adjustment of Income Tax || ||(259.54) |
|Less: Deferred Tax ||1103.46 ||259.54 |
|Net Pro t / Loss after Tax ||(5145.32) ||(10439.05) |
|Dividend (including Interim if any and nal ) || || |
|Net Pro t after dividend and Tax ||(5145.31) ||(10439.05) |
|Amount transferred to General Reserve || || |
|Balance carried to Balance Sheet ||(5145.31) ||(10439.05) |
|Earning per share (Basic) ||(1.53) ||(4.57) |
|Earning per Share(Diluted) ||(1.53) ||(4.57) |
The Board of Director has not recommended any dividend on the Share Capital of theCompany for the period ended March 31 2017 in view of losses incurred.
3. TRANSFER TO 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:
During the year under review the performance of the company was affected due to verylower capacity utilization on account of limited resources available with company andcontinuous slow down in the local and international market in the textile industry. Thesubstantial losses has resulted due to exceptional items and thin margin in job workactivity that the company is carrying on. The Company has incurred loss after tax of `5145.32 lacs in as against a loss after tax of ` 10439.23 lacs in the previous year2015-16 and the turnover of the company has reduced to ` 9287.04 lacs as against `22538.08 lacs in the previous year 2015-16.
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. Your Companywork hard to meet the competition as well as to enable to maintain long standing businessrelationship.
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 taking all necessary steps to take companyforward.
5. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIALSTATEMENTS RELATE AND THE DATE OF THE 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 BY THE 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 31st March 2017as stipulated under Regulation 34(2) and (3) of SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015 with Stock Exchanges in India is presented in the separatesection forming part of this Annual Report.
8. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO
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-de ned 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.
10. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL
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 has not undertaken CSR activities in view of 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 year2016-17 and hence no complaint is outstanding as on March 31 2017 for redressal.
12. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE
COMPANIES 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 MADE WITH 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 REPORTS
As regards Auditors Remarks in Audit report comments of the Board of Director is asunder:-
Auditor Remark :
The Company has not provided for Interest Expenses amounting to Rs. 237372670(derived on simple interest basis) which should have been provided as per the Principal ofPrudence on the borrowings which have been classified as "Non-performing assets"(NPA) by the banks as referred in Note 42 of accompanying notes to financial statement.Had these interest expenses been debited to the Statement of Pro t and Loss Account lossfor the year ended and debit balance of reserves and surplus would have been higher bythat aforesaid amount.
Management Remark :
The Company is in the process of negotiation with its bankers and is hopeful that thefacilities will be rescheduled / restructured by the bank and accordingly the Company hasnot recognized the Interest Expenses.
15. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION AND
DISCHARGE OF THEIR DUTIES
The Company's Policy relating to appointment of Directors payment of Managerialremuneration including criteria for determining Directors' quali cations 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 JOINT VENTURES 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 OF THE DIRECTORS
The Board met 6 (Six) 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) Regulation2015 entered into with the stock exchanges.
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 nancial year and of the profit and loss of thecompany 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 clari es 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.
Mrs. Rohini Pradyumna Dandekar who were appointed as an Additional Independent Directorby the Board of Directors on the recommendation of Nomination and remuneration Committeeon May 25 2017 holds the said office till the date of the ensuing Annual GeneralMeeting. The Company has received a notice as per the provisions of Section 160(1) of theCompanies Act 2013 from a member proposing her candidature for reappointment to holdoffice upto five consecutive years.
As per the provisions of Section 152(6) of the companies Act 2013 Mr. Ravi SanjayJogi Executive Director retires at the ensuing Annual General Meeting and being eligibleseeks re-appointment. The Board recommends his reappointment.
Ms. Jyoti Thakkar Independent Director and Mr. Sanjay Jogi Non Executive Directorhave resigned from the Directorship of the Company w.e.f May 25 2017 due to thepre-occupation. The Board places on record its appreciation for the services rendered byMs. Jyoti Thakkar and Mr. Sanjay Jogi during their tenure with the Company.
Appointment / Resignations of the Key Managerial Personnel
There is no appointment/Resignation of the Key Managerial Personnel.
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 presentation during the financial year to familiarizeIndependent Directors with the Company their roles responsibilities in the Companyperformance update of the Company global business environment technology and the riskmanagement system of the Company. Further the Directors are encouraged to attend and tothe training programmes being organized by various regulators/bodies/Institution on abovematters 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) 2015.
23. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE
The Audit Committee consists of the following members as on March 31 2017.
|Name of the Member ||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. JyotiThakkar who form the majority. More details on theCommittee are given in the Corporate Governance Report which forms part of this AnnualReport. Mrs. Rohini Pradyumna Dandekar was appointed as member of Audit committee in placeof Ms. Jyoti Thakkar who resign from membership w.e.f. May 25 2017.
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.
M/s.Ajay Shobha& Co. Chartered Accountant were appointed as Statutory Auditor ofthe Company at the Annual General Meeting held on September 22 2015 to hold office tillthe conclusion of the Annual General Meeting to be held in the Calendar year 2020. Interms of the first provison to section 139(1) of the Companies Act 2013 the appointmentof auditors shall be placed for rati cation at every Annual General Meeting. Accordinglythe appointment of Ajay Gupta & Co. Chartered Accountant as statutory auditors ofthe Company is placed for rati cation 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 disquali ed for their re-appointment.
As per the requirement of Section 148 of the Act read with the companies (Cost Recordand Audit) Rules 2014 the Audit of Cost Account related to Textile product is beingcarried out every year. The Board of Directors have based on the recommendation of theAudit Committee appointed M/s. N. Ritesh & Associates Cost Accountant Mumbai(Membership No. M/26963) to audit the cost accounts of the Company for the year endedMarch 31 2018 on a remuneration fixed between the Board and Cost Auditor. As requiredunder the Act necessary resolution seeking members' rati cation for the remunerationpayable to M/s. N. Ritesh & Associates is included as item Number 5of the Noticeconvening 26 Annual General Meeting.
Mr. Vishal Manseta Practicing Company Secretaries was appointed to conduct thesecretarial audit of the company for the Financial Year 2016-17 as required under Section204 of the Companies Act 2013 and Rules thereunder. The secretarial audit report for FY2016-17 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 for the F.Y. 2016-2017. The Internal AuditReport have been submitted to the Audit Committee and the Board of Directors.
Their appointment as internal Auditor for the Financial Year 2017-18 has been approvedin the meeting of the Board of Directors held on May 25 2017. The Company has appointedSunil Kudwa & Associates as an Internal Auditor in place of D.Y. & Associates inthe meeting of the Board of Directors held on August 19 2017.
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 the 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 447 employees as on March 31 2017.
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 PURSUANT TO CONVERSION OF WARRANTS
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 ` 1/- each) of theCompany. On June 15 2016 Company allotted 44754036 Equity shares to Promoters andNon-Promoters who exercised the option to convert warrants. The Company has receivedlisting and trading approval for such shares from both the 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 Governancealong with a Certi cate 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 con dence reposed on your Company.
| ||FOR AND ON BEHALF OF THE BOARD OF DIRECTORS |
| ||For SHEKHAWATI POLY-YARN LIMITED |
| ||Sd/- ||Sd/- |
| ||MukeshRuia ||Ravi Jogi |
| ||Chairman & Managing Director ||Whole - Time Director |
| ||(DIN : 00372083) ||(DIN : 06646110) |
|Date :August 19 2017 || || |
|Place :Mumbai || || |
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES
|1. A brief outline of the company's CSR policy including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR Policy and projects and programs. ||Pursuant to Section 135(1) of the Companies Act 2013 read with companies (Corporate Social Responsibility) Rules 2014 the Board of Director have constituted a CSR Committee. The Board also framed a CSR Policy in compliance with the provisions of Section 135 of the Companies Act 2013. The said policy is placed on the website and is available on the following weblinkhttp://www.shekhawatiyarn.com/Companypolicies.html |
|2. The Composition of the CSR Committee ||1) Mr. Sushil Kumar Poddar Chairman |
| ||2) Mr. Mukesh Ruia Member and |
| ||3) Ms. Jyoti Thakkar Member*. |
*Note : Mrs. Rohini Pradyumna Dandekar appointed as member of Corporate SocialResponsibilty in place of Ms. Jyoti Thakkar w.e.f. May 25 2017.
MukeshRuia Sushil Kumar Poddar
Chairman & Managing Director Chairman CSR Committee