To The Members
Your Directors are pleased to present their 10th Annual Report on the business andoperations of the Company and the financial results for the year ended 31st March 2017.
|1. FINANCIAL RESULTS: || ||(Rs. in Lakhs) |
|S. No. Particulars ||2016-17 ||2015-16 |
|1 Sales and other Income ||13955.64 ||14853.69 |
|2 Profit Before interest and Depreciation ||1197.37 ||1324.68 |
|3 Interest and Finance Charges ||519.62 ||512.35 |
|4 Depreciation ||405.11 ||362.46 |
|5 Profit after Interest and Depreciation ||272.64 ||449.87 |
|Provision for Taxation: || || |
|6 (a) Current Tax ||73.57 ||99.53 |
|7 (b) Deferred Tax ||20.12 ||66.89 |
|8 (c) MAT Credit Entitlement ||- ||(13.63) |
|9 Balance of Profit (or Loss) ||178.96 ||297.08 |
|Appropriations: || || |
|10 Transfer to General Reserve ||0.50 ||0.50 |
|11 Dividend on Equity Share ||29.32 ||29.32 |
|12 Dividend on Preference Share ||61.84 ||61.84 |
|13 Dividend Tax ||18.56 ||18.56 |
|14 Surplus carried over to Balance Sheet ||500.99 ||432.25 |
Your Company's Revenue stands at? 13955.94 Lakhs (as against? 14853.69 Lakhs in FY2015-16) decrease of6 % overthe previous year. Profit before depreciation interest andtaxes stood at ? 1197.37 Lakhs (as against? 1324.68 Lakhs in [V 2015-16. Net profitattributable to the shareholders at ? 178.96 Lakhs as against ?297.08 Lakhs in [V 2015-16.Due to demonetization your company could not perform well because the overall demand hasreduced and duetofall in price margins.
The export turnover including merchant export of your company during the year was ?4083 Lakhs (as against? 3020.09 Lakhs registering a 35.19% increase over the previousyear. 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.
The future for the Indian textile industry looks promising buoyed by both strongdomestic consumption as well as export demand. With consumerism and disposable income onthe rise the retail sector has experienced a rapid growth in the past decade with theentry of several international players like Marks & Spencer Guess and Next into theIndian market. The organized apparel segment is expected to grow at a Compound AnnualGrowth Rate (CAGR) of morethan 13 percentovera 10-yearperiod.
The Union Ministry of Textiles which has set a target of doubling textile exports in10 years plans to enter into bilateral agreements with Africa and Australia along withworking on a new textile policy to promote value addition apart from finalizingguidelines for the revised Textile Upgradation Fund Scheme (TUFS).
The Indian cotton textile industry is expected to showcase a stable growth inFY2017-18 supported by stable input prices healthy capacity utilization and steadydomestic demand.
The Company expects good demand for its products in domestic as well as internationalmarkets. Major markets for Indian Textile and Clothing IT & C) export are the USA andEU and they have recovered from the recession of the past years. The domestic market isalso on the path of healthy growth because of the fact that few manufacturing facilitiesoperating abroad are slowing down dueto demonetization.
Expansion Plan & capital expenditure
The company has again installed value addition equipment aims to fulfill the demand ofexport market and enhance profitability with a capital expenditure of 10cr. It plans tofund this capex by using an eclectic mix of promoter's equity retained earnings and debtto ensure sustainable 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 31" March 2017 and the date of Board's Report.
3. CHANGE IN THE NATURE OF BUSINESS IF
The company has not changed the nature of business during the financial year underreview.
Your Directors have recommended payment of dividend on 8% Cumulative RedeemablePreference shares as per the terms and conditions of the issue. The dividend willabsorbasumof 61.84lakhs.
Your Directors are pleased to recommend a dividend of 10% on the Equity Share Capitalof the Company for the financial year ended 31st March 2017. The dividend will absorb asum of Z 29.32lakhs. The Corporate dividend tax levied will be18.56 lakhs.
5. TRANSFER TO RESERVES
Your Company proposes to transfer Z 0.50 lakhs to General Reserve account of thecompany for the year.
A calendar of meetings is prepared and circulated in advance to the Directors. Duringthe year Seven (07) Board Meetings were held during the year viz. 30-May-201610-June-2016 02-August-2016 31-August-2016 27-October-2016 04-November-201611-February-2017.The attendance of Directors for above mentioned meetings is disclosed inCorporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013.
7. DIRECTORS AND KEY MANAGERIAL PERSONS
Retirement by Rotation
Pursuant to provisions of the Companies Act 2013 Mr. Mayank Aga rwal (DIN: 02749089)Who leTime Director will retire at thee nsuing Annual General Meeting and being eligibleoffers himself for re-appointment. The Board recommends his re-appointment.
Appointment of Key Managerial personnel
The Board of Directors of the Company has appointed Ms. Reshu Jain as Company Secretaryand Compliance Officer of the Company at their meeting held on 31 August 2016.
The Board of Directors has re-appointed Mr. Virender Kumar Agarwal as Managing Directorof the Company for a further period of 5 years with effect from 20" July 2017 to 19thJuly 2022 this re-appointment is subject to the approval of the Shareholders andaccordingly separate resolutions are included in the Notice of Annual General Meeting fortheir re-appointment.
The Board of Directors has re-appointed Mr. Seema Rani Agarwal as Managing Director ofthe Company for a further period of 5 years with effect from 20 July 2017 to 19 July 2022this re-appointment is subject to the approval of the Shareholders and accordinglyseparate resolutions are included in the Notice of Annual General Meeting for theirre-appointment.
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 2016-17 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 FormACC-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 2017 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
Your Company has an Audit Committee in compliance with Section 177 of the CompaniesAct 2013 and the SEBI (LODR) Regulations 2015. The Audit committee comprises of Mr. AmitGoela (Chairman) Mrs. Seema Rani Agarwal Mr. Sushil Kapadia asother members.
Stakeholder Relationship Committee
Your Company has an Stakeholders Relationship Committee in compliance with Section 178of the Companies Act 2013 and the SEBI (LODR) Regulations 2015. The Stakeholdersrelationship committee comprises of Mr. Amit Goela (Chairman) Mrs. Seema Rani AgarwalMr. Sushil Kapadia asother members.
Nomination & remuneration Committee
Your Company has an Nomination and Remuneration Committee in compliance with Section178 of the Companies Act 2013 and the SEBI (LODR) Regulations 2015.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 their remunerationis based on its NRC policy which inter alia deals with the manner of selection of theBoard of Directors and such other matters as provided under section 178 (3) of the Act andSEBI Listing Regulations. This Policy is accordingly derived from the said Charter and thescope 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 the detailedNomination & Remuneration Policy of the Company on the appointment and remuneration ofDirectors including criteria for determining qualifications positive attributesindependence of a Director; and other matters provided under sub-section (3) of section178.
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 ResponsibilityCommittee forthe 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 315t March 2017 theapplicable accounting standards had been followed along with proper explanation relatingtomaterial departures;
b. the Directors have 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 31stMarch 2017 and of the loss of the company for that period.
c. the Directors have 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 have prepared the annual accounts for the period ended 31st March2017 on a going concern basis.
e. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
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 duringtheyear under review none of the employees are receiving remuneration asset out in Rule 5(2) of the are In terms of the provisions of Rule (5) (2) of theCompanies (Appointment And Remuneration Of Managerial Personnel) Rules 2014.
MIs S. Venkatadri& Co. Chartered Accountants Hyderabad appointed as StatutoryAuditors of your Company in the Annual General Meeting (AGM) held on 25" September2015 for a term of 5 (Five) consecutive years to hold office till the conclusion of theSixth Annual General Meeting of the Company to be held in the year 2020 subject to theratification of their appointment at every AGM. As per the provisions of on Section 139 ofthe Companies Act 2013 the appointment of Auditors is required to be ratified by Membersat every Ann ual General Meeting.
The Report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.
The Board of Directors have appointed Mis. G. R. Paliwal & Co. Cost AuditorsNagpurfor conductingthe cost audit of the Companyfor the financial year 2017-18 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.
The Board has appointed Ms. Aarju Agrawal Practicing Company Secretary to conductSecretarial Audit of the Company for the financial year ended 31st March 2017 incompliance with the provisions of Section 204 of the Companies Act 2013.
The Company has undertaken Secretarial Audit for the financial year 2016-17 whichinter alia includes audit of compliance with the Companies Act 2013 and the Rules madeunder the Act Listing Regulations and
applicable Regulations prescribed by the Securities and Exchange Board of India andForeign Exchange Management Act 1999 and Secretarial Standards issued by the Institute ofthe Company Secretaries of India.
The Secretarial Audit Report forms part of this Annual Report asAnnexure Ill.
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 ofthis Report.
19.ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:
The Company has effective 'internal financial controls' that ensure an orderly andefficient conduct of its business including adherence to Company's policies safeguardingof its assets prevention and detection of frauds and errors accuracy and completeness ofthe accounting records and timely preparation of reliable financial information.
20.THE DETAILS OF SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN 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 AFFECTING 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 2017 to the date of signing of theDirector's Report.
22.PARTICULARS OF LOANS GIVEN INVESTMENT MADE GURANTEES GIVEN AND SECURITIESPROVIDED:
Your Company has not given any loan or guarantee to any person or body corporate norinvested in anybody corporate du ring 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 areaway to payback societal debts and obligations.We do not see CSRas charity; nor even as a responsibility; but as an opportunity to changeand help the society. Our CSR activities are conceived to bridge gaps in society and helptransform 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 fortravelers nearto 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 thenon-executive 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.
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 excludingthe Director beingevaluated.
The Directors evaluation was broadly based on the parameters such as understanding ofthe Company's vision and objective skills knowledge and experience participation andattendance 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.
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 asto dividend voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company underany scheme save and except ESOS referred to in this Report.
4. Neither the Managing Director nor the Whole-time Directors of the Company receiveanyremuneration or commission from any of itssubsidiaries 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.
The Board of Directors are pleased to place on record their appreciation of thecooperation and support extended by State Bank of India various State and CentralGovernment agencies Stock Exchange and other Agencies. The Board would like to thank theCompany's shareholders Customers Suppliers for the support and the confidence whichthey have reposed in its management. The Board also wishes to place on record itsappreciation of the valuable services rendered by all the employees of the company.
For and on behalf of the Board of Directors
For Suryaamba Spinning Mills Ltd
Virender Kumar Agarwal
Seema Rani Agarwal
(it. Managing Director)
Date :2Oth July 2017