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Suryaamba Spinning Mills Ltd.

BSE: 533101 Sector: Industrials
NSE: N.A. ISIN Code: INE360J01011
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OPEN 57.10
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VOLUME 780
52-Week high 85.00
52-Week low 42.50
P/E 7.83
Mkt Cap.(Rs cr) 18
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 57.10
CLOSE 61.55
VOLUME 780
52-Week high 85.00
52-Week low 42.50
P/E 7.83
Mkt Cap.(Rs cr) 18
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Suryaamba Spinning Mills Ltd. (SURYAAMBASPINNI) - Director Report

Company director report

Dear Shareholders

Your Directors have pleasure in presenting their 9th Annual Report on the Business andoperations together with Audited Annual accounts of your Company for the financial yearended 31st March 2016.

Financial Results:

(Rs. in Lakhs)
Particulars 2015-16 2014-15
1 Sales and other Income 15242.55 14916.48
2 Profit Before interest and Depreciation 1324.68 1096.33
3 Interest and Finance Charges 512.35 462.20
4 Depreciation 362.46 357.21
5 Profit after Interest and Depreciation 449.87 276.92
Provision for Taxation :
6 (a)Current Tax 99.53 57.44
7 (b) Deferred Tax 66.89 79.78
8 (c) MAT Credit Entitlement (13.63) (41.36)
9 Balance of Profit (or Loss) 297.08 181.06
Appropriations :
10 Transfer to General Reserve 0.50 0.50
11 Dividend on Equity Share 29.32 33.82
12 Dividend on Preference Share 61.84 61.84
13 Dividend Tax 18.56 19.61
14 Surplus carried over to Balance Sheet 432.25 245.39

Operations :

Your Company's Revenue stands at Rs. 15242.56Lakhs (as against Rs. 14916.48 Lakhs in FY2014-15) registering increase of 2% over the previous year. Profit before depreciationinterest and taxes stood at Rs. 1324.66 Lakhs (as against Rs. 1096.33 Lakhs in FY 2014-15.Net profit attributable to the shareholders at Rs. 297.07 Lakhs as against Rs. 181.06Lakhs in FY 2014-15. During the year textile industry has recovered from earlier years'recessionary trend and performed well on an average.

Exports:

The export turnover including merchant export of your company during the year was Rs.3020.09 Lakhs (as against Rs. 2060.81 Lakhs registering a 46.55% increase over theprevious year. Your Company has been exporting yarn to various countries like Brazil USASingapore Argentina Portugal and continues to explore new markets to improveperformance. This trend of increase in exports is expected to continue in the comingyears.

Future Outlook :

The home-textiles and garment segments are reflecting sound growth both in the domesticand international markets due to good demand of apparels. There is a substantial scope forfurther growth in these segments. Your Company believes that the competition in theemerging markets will be met by developing production systems based on cost efficiencyhigh productivity quality assurance etc.The per capita polyester consumption is found tobe 2.5 kg compared to the world average of 6.8 kg. Polyester consumption also witnessed amarginal increase of 2% in the overall domestic fiber consumption stats and was seeneating into the share of other man-made fibres. Being dubbed as the poor man's cloth thistrend is expected to continue with the growing population and will exponentially increasewith the increase in the GDP growth. The new majoritarian government will play anincrementally crucial role in bringing back consumer confidence in the economy. We expectthis increase in consumer confidence to bring about an upsurge in domestic demand. Thoughit might lead to an appreciated rupee which would hurt us in the short- term we do expectthat a stable - growth oriented government with a stable currency are going to have apositive impact on the industry as a whole. We expect the new government bringing aboutfavorable reforms for the textile sectors. We aim to capitalize on these future reforms byhaving a strong liquidity position so we can capitalize on each and every opportunity themarket generates by drastically expanding and diversifying our product base as to cater alarger audience. We aim to use retained earnings preferred beliefs that the competitionin the emerging markets will be met by improving our systematic efficiency which willlead to a better cost rationalization higher productivity quality assurance and productdifferentiation.

The economy is in the stage of prosperity and the Company expects good demand for itsproducts in domesticas well as international markets. Major markets for Indian Textile andClothing (T & C) export are the USA and EU and they have recovered from the recessionof the past years. The domestic market is also on the path of healthy growth because ofthe fact that few manufacturing facilities operating abroad are slowing down due torecession.

Expansion Plan & capital expenditure

The company has already installed value addition equipments aims to fulfill the demandof export market and enhance profitability with a capital expenditure of 10 cr. It plansto fund this capex by using an ecclectic mix of promoter's equity retained earnings anddebt to ensure substainable growth for the company in the future.

2. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There are no significant material changes and commitments affecting financial positionof the company between 31st March 2016 and the date of Board’s Report.

3. CHANGE IN THE NATURE OF BUSINESS IF ANY

The company has not changed the nature of business during the financial year underreview.

4. DIVIDEND

Your Directors have recommended payment of dividend on 8% cumulative Redeemablepreference shares as per the terms and conditions of the issue. The dividend will absorb asum of Rs. 61.84 lakhs.

Your Directors are pleased to recommend a dividend of 10% on the Equity Share Capitalof the Company for the financial year ended 31st March 2016. The dividend will absorb asum of Rs. 29 32 lakhs . The Corporate dividend tax levied will be Rs. 18.56 lakhs.

5. TRANSFER TO RESERVES

Your Company proposes to transfer Rs. 0.50 lakhs to General Reserve account of thecompany for the year.

6. BOARD MEETINGS

Eight (08) Board Meetings were held during the year viz. 08-May-2015 28-May-201531-July-2015 13-Aug-2015 18-Aug-2015 28-Aug-2015 02-Jan-2016 13-Jan- 2016.Theattendance of Directors for above mentioned meetings is disclosed in Corporate GovernanceReport.

7. DIRECTORS AND KEY MANAGERIAL PERSONS

Retirement By Rotation

Pursuant to provisions of the Companies Act 2013 Mr. Mayank Agarwal (DIN: 02749089)Whole Time Director will retire at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment. The Board recommends his re-appointment.

Appointment

The Boards of Directors has appointed Mr. Sushil Kapadia as Additional director of theCompany at their meeting held on 28th May 2016.

Re- appointment

During the year under review the members in the 8th Annual General Meeting held on25th September2015 approved the appointment of Mr. Manish Kumar Gupta (DIN: 07096129)Non-Executive Director as Independent Director as per the provisions of Section 149sub-section (10) who are not liable to retire by rotation with effect from 25th September2015 to 24th September 2020.

Resignation

During the year under review Mr. Pundlik Sampatrao Thakare has been resigned from hisdirectorship of the Company with effect from 5th May 2016 due to sudden death and yourcompany has complied all necessary compliances in this regard. Mr. Kailash Purohit wasappointed as the Company Secretary and Compliance Officer of the Company with effect from2nd January 2016 and resigned from the post with effect from 12th May 2016.

8. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

The Company has received declarations from all the Independent Directors of the Companyas per the provisions of Section 149 subsection (7) of the Companies Act 2013 confirmingthat they meet the criteria of independence as prescribed both under Section 149sub-section (6) of the Companies Act 2013 read with the Rule 4 of Companies (Appointmentand Qualification of Directors) Rule 2014 and the SEBI (Listing Obligations andDisclosures Requirement) Regulations 2015.

9. RELATED PARTY TRANSACTIONS

During the year under review the Company has not entered into any related partytransactions pursuant to section 188 of the Company's Act 2013. Further there are nomaterially significant related party transactions made by the Company during the FinancialYear 2015-16 which may have the potential conflict with the interest of the company atlarge. Accordingly there are no transactions that are required to be reported in FormAOC-2 and as such doesn't form part of the Report. The Company has adopted a Related PartyTransactions policy and the policy as approved by the board is uploaded on the Company'swebsite www.suryaamba.com

10. CHANGES IN SHARE CAPITAL

The Paid up Share Capital as at March 31 2016 stood at Rs. 106619440/- During theyear under review your company has not issued shares with differential voting rights norhas granted any stock options or sweat Equity Share.

11. COMPOSITION OF COMMITTEES

Audit Committee

The Audit committee comprises Mr. Amit Goela (Chairman) Mrs. Seema Rani Agarwal Mr.Sushil Kapadia as other members. All t h e recommendations made by the Audit Committeewere accepted by the Board.

Stakeholder Relationship Committee

The Stakeholders relationship committee comprises Mr. Amit Goela (Chairman) Mrs. SeemaRani Agarwal Mr. Sushil Kapadia as other members.

Nomination & remuneration Committee

The Nomination & remuneration Committee comprises Mr. Amit Goela (Chairman) Mr.Manish Kumar Gupta Mr. Sushil Kapadia as other members.

The Company has a Nomination and Remuneration Committee (NRC) and the details of theCommittee and the terms of reference of the NRC Charter are set out in the CorporateGovernance Report which is part of the Board’s Report.

The Company’s Policy for selection and appointment of Directors and theirremuneration is based on its NRC policy which inter alia deals with the manner ofselection of the Board of Directors and such other matters as provided under section178(3) of the Act and SEBI Listing Regulations. This Policy is accordingly derived fromthe said Charter and the scope of NRC is set out in the Corporate Governance Report.

The Company has a Nomination and Remuneration Committee (NRC) and the details of theCommittee The Company’s shareholders may refer the Company’s website for thedetailed Nomination & Remuneration Policy of the Company on the appointment andremuneration of Directors including criteria for determining qualifications positiveattributes independence of a Director; and other matters provided under sub-section (3)of section 178.

Corporate Social Responsibility (CSR)

Committee

The company has not crossed the threshold limit as prescribed under section 135 of theCompanies Act 2013 hence has not been constituted the Corporate Social Responsibility

Committee for the year.

12. VIGIL MECHANISM

In compliance with requirements under Section 177 of the Companies Act 2013 yourCompany being a Listed Company has established a Vigil (Whistle Blower) Mechanism andformulated a Policy in order to provide a framework for responsible and secure whistleblowing/vigil mechanism.

The Vigil (Whistle Blower) Mechanism aims to provide a channel to the Directors andemployees to report genuine concerns about unethical behaviour actual or suspected fraudor violation of the Codes of Conduct policy.

The Company is committed to adhere to the highest standards of ethical moral and legalconduct of business operations and in order to maintain these standards the Companyencourages its employees who have genuine concerns about suspected misconduct to comeforward and express these concerns without fear of punishment or unfair treatment.

The mechanism provides for adequate safeguards against victimization of Directors andemployees to avail of the mechanism and also provide for direct access to the Chairman ofthe Audit Committee in exceptional cases. This neither releases employees from their dutyof confidentiality in the course of their work nor can it be used as a route for raisingmalicious or unfounded allegations about a personal situation.

The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the Listing Agreement includes an Ethics & Compliance Task Force comprisingsenior executives of the Company. Protected disclosures can be made by a whistle blowerthrough an e-mail or dedicated telephone line or a letter to the Task Force or to theChairman of the Audit Committee.

13. DIRECTORS RESPONSIBILITY

STATEMENT

Pursuant to Section134 (5) of the Companies

Act 2013 the Directors confirm that:

a. in the preparation of the annual accounts for the year ended 31st March 2016the applicable accounting standards had been followed along with proper explanationrelating to material departures;

b. the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year 31st March 2016 and of the loss of the company for that period.

c. the Directors have 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 have prepared the annual accounts for the period ended 31st March2016 on a going concern basis.

e. the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

14. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company has no subsidiaries joint ventures and associate companies during theyear.

15. EXTRACT OF ANNUAL RETURN

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in FormMGT-9 as a part of this Annual Report is in ANNEXURE I.

16. PARTICULARS OF EMPLOYEES

The details pursuant to Section 197 (12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014enclosed as Annexure II.

Further during the year under review none of the employees are receiving remunerationas set out in Rule 5 (2) of the are In terms of the provisions of Rule (5) (2) of the C om p a n i e s (Appointment And Remuneration Of Managerial Personnel) Rules 2014.

17. AUDITORS

Statutory Auditor

M/s S. Venkatadri & Co. Chartered Accountants Hyderabad Statutory Auditors of theCompany hold office till the conclusion of the ensuing Annual General Meeting and areeligible for re-appointment. They have confirmed their eligibility to the effect thattheir reappointment if made would be within the prescribed limits under Section 139 ofthe Companies Act and that they are not disqualified for reappointment.

Auditor’s Report

The Notes on financial statement referred to in the Auditors’ Report areself-explanatory and do not call for any further comments. The Auditors’ Report doesnot contain any qualification reservation or adverse remark.

Cost Auditor

The Board of Directors have appointed M/s. G. R. Paliwal & Co. Cost AuditorsNagpur for conducting the cost audit of the Company for the financial year 2016-17 incompliance to the provisions of Section 148 of the Companies Act 2013 read with Companies(Cost Records and Audit Rules) 2014 on the recommendations made by the Audit Committeeand has recommended his remuneration for the ratification of Members at the ensuing annualgeneral meeting.

Secretarial Auditor

The Board has appointed Ms. Aarju Agrawal Practicing Company Secretary to conductSecretarial Audit of the Company for the financial year ended 31st March 2016 incompliance with the provisions of Section 204 of the Companies Act 2013.

The report of the Secretarial Audit Report in Form MR-3 is enclosed as Annexure III tothis Report.

Replies to the observations made in the

Secretarial Audit Report

The Board of Directors of the Company have appointed Ms. Aarju Agrawal PracticingCompany Secretary to conduct the Secretarial Audit for the financial year ended March 312016 is provided in the Annual Report.

The Secretarial Audit Report confirms that the company has complied with the applicableprovision of the Companies Act 2013 The Securities Contracts ( Regulation )Act 1956Depositories Act 1996 The Foreign Exchange Management Act 1999 to the extent applicableto overseas Direct Investment (ODI) Foreign Direct Investment & External CommercialBorrowing all the regulations and guidelines of SEBI (SAST) Regulation 2011 The SEBI (Prohibition of Insider Trading) Regulation 1992 The SEBI (Issue of Capital and Disclosurerequirement regulation 2009 Listing Agreement with the stock Exchange (Effective upto30th November 2015) and SEBI Listing Regulations 2015 (Effective from 1st December2015) & the Memorandum and Articles of the Company.

The following explanation of the secretarial audit report is as under: In view ofthe Secretarial Audit Report the Company has adequate systems in place in the company forthe Compliance of other laws; as regards the non-compliances mentioned in the SecretarialAudit Report in respect of the following:

a. Disclosure regarding unpaid and unclaimed dividend required pursuant to provision ofSection 205A and 205C of the Companies Act 1956 ( Section 124 and 125 of the CompaniesAct 2013) and Rule 3 of IEPF Rules 2012

As the Form INV-5 is not available in the MCA Portal the Company is unable to file theform however the Company has already taken the steps for gathering/reconciling/preparingthe data for the unpaid and unclaimed dividend. As soon as the Form gets available in theMCA portal the Company will promptly file the form in order to complete the compliance.

b. The Company has duly filed forms with Ministry of Corporate Affairs (MCA) within thestipulated time allowed under the Companies Act 2013 except some forms required pursuantto provisions of Companies Act 2013 and rules made there under.

The Company will take due care that these timelines allowed to file the E-forms to ROCunder the Companies Act 2013 should be complied with and the company assure that delay infiling will not arise in future.

c. The Company has received notice from SEBI in respect of non-redressal of InvestorGrievances posted on SEBI Complaints Redress System ("SCORES") and the Companyis duly endeavoring to resolve and to take necessary steps in this regard.

The Company has duly replied to the Notice received from SEBI within the stipulatedtimeline and the Company has already taken necessary steps to redress the grievances ofinvestors. The Company is accessing the "SCORES" on regular basis so that noInvestor grievances remain unsolved and endeavouring to dispose off the complaints onpriority basis.

18. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO

Particulars of Energy Conservation Technology Absorption and Foreign Exchange Earningsand Outgo required under the Rule 8 of the Companies (Accounts) Rules 2014 is annexed andmarked ANNEXURE IV and forms part of this Report.

19. ADEQUACY OF INTERNAL

FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has effective ‘internal financial controls’ that ensure anorderly and efficient conduct of its business including adherence to Company’spolicies safeguarding of its assets prevention and detection of frauds and errorsaccuracy and completeness of the accounting records and timely preparation of reliablefinancial information.

20. THE DETAILS OF SIGNIFICANT

MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOINGCONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

No significant or material orders were passed by the regulators or courts or tribunalsimpacting the going concern status and company's operations in future during the yearunder review.

21. MATERIAL CHANGES AND COMMITMENTS IF ANY AF FECTING THE FINANCIAL POSITION OF THECOMPANY

There were no material changes and commitments in the business operations of theCompany from the Financial Year ended 31st March 2016 to the date of signing of theDirector's Report

22. PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIESPROVIDED

Your Company has not given any loan or guarantee to any person or body corporate norinvested in any body corporate during the Financial Year under review pursuant to Section186 of Companies Act 2013

23. RISK MANAGEMENT

The Company has policy for identifying risk and established controls to effectivelymanage the risk. Further the company has laid down various steps to mitigate theidentified risk.

24. CORPORATE SOCIAL RESPONSIBILITY

As an evolved and concerned corporate citizen your company believes that corporatesocial responsibility (CSR) initiatives are a way to pay back societal debts andobligations. We do not see CSR as charity; nor even as a responsibility; but as anopportunity to change and help the society. Our CSR activities are conceived to bridgegaps in society and help transform communities around our workplace

At Suryaamba CSR activities are undertaken in various manners such as providingdonations for social and cultural activities conducting eye check-up camp providing colddrinking water during summer season for travelers near to the factory premises.

25. FORMAL ANNUAL EVALUATION

Your Company has devised a Policy selection of Directors determining independence ofDirectors and for performance evaluation of Independent Directors Board Committees andother individual Directors which include criteria for performance evaluation of the nonexecutive directors and executive directors.

26. DECLARATION WITH THE COMPLIANCE WITH THE CODE OF CONDUCT BY MEMBERS OF THE BOARDAND SENIOR MANAGEMENT PERSONNEL

The Company has complied with the requirements about code of conduct for Board membersand Sr. Management Personnel. The said policy is available on the website of the Company.

27. MECHANISM FOR BOARD EVALUATION

As per the requirements of SEBI (LODR) Regulations 2015 states that the board shallmonitor and review the board evaluation framework. The Companies Act 2013 states that aformal annual evaluation needs to be made by the Board of its own performance and that ofits committees and individual directors. The Schedule IV of the Companies act 2013 statesthat the performance evaluation of the independent directors shall be done by the entireBoard of Directors excluding the Director being evaluated.

The Directors evaluation was broadly based on the parameters such as understanding ofthe Company’s vision and objective skills knowledge and experience participationand attendance in Board/ Committee meetings; governance and contribution to strategy;interpersonal skills etc. The Board has carried out the annual performance evaluation ofits own performance the Directors individually as well as evaluation of the working ofits Board Committees. A structured questionnaire was prepared covering various aspectsofthe Board’s functioning such as adequacy of the composition of the Board and itsCommittees Board Culture execution and performance of specific duties obligations andgovernance. A meeting of the Independent Directors was also held which reviewed theperformance of Non Independent Directors Chairman and the quality quantity and timelines of flow of information between the Company management and Board.

28. CORPORATE GOVERNANCE

A detailed Report on Corporate Governance in Annexure V Management Discussion andAnalysis Report and the Certificate from the Auditors of your Company regarding complianceof conditions of Corporate Governance as stipulated under Regulation 34 of the SEBI (LODR)Regulations 2015 forms part of this Report.

29. DISCLOSURE PERTAINING TO SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company is an equal opportunity employer and believes in providing opportunity andkey positions to women professionals. It has been the endeavor of the Company to encouragewomen professionals by creating proper policies to tackle issues relating to safe andproper working conditions for them and create and maintain a healthy and conducive workenvironment free of discrimination. This includes discrimination on any basis includinggender and any form of sexual harassment. We feels proud to intimate that there were nocomplaints reported under the provisions Prevention of Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.

GENERAL

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:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend voting orotherwise.

3. Issue of shares (including sweat equity shares) to employees of the Companyunder any scheme save and except ESOS referred to in this Report

4. Neither the Managing Director nor the Whole-time Directors of the Companyreceive any remuneration or commission from any of its subsidiaries as the company has nosubsidiaries.

5. 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.

30. SECRETARIAL STANDARDS

Your company has complied with the Secretarial Standards issued by the Institute ofCompany Secretaries of India.

ACKNOWLEDGMENT

The Board of Directors are pleased to place on record their appreciation of theco-operation and support extended by State Bank of India Axis Bank Ltd. various Stateand Central Government agencies Stock Exchange and other Agencies. The Board would liketo thank the Company’s shareholders Customers Suppliers for the support and theconfidence which they have reposed in its management. The Board also wishes to place onrecord its appreciation of the valuable services rendered by all the employees of thecompany.

For and on behalf of the Board of Directors

For Suryaamba Spinning Mills Ltd

Virender Kumar Agarwal

(Managing Director)

(DIN : 00013314)

Seema Rani Agarwal

(Jt. Managing Director)

(DIN : 0143026)

Place : Nagpur

Date : 10-June-2016