We have pleasure in presenting the 37th Annual Report on the business and operations ofCompany and Financial Results for the year ended 31st March 2016.
1. FINANCIAL RESULTS
Rs. In lakhs
| ||2015-2016 ||2014-2015 |
|Turnover Revenue ||10296.57 ||10787.92 |
|Gross Profit before ||387.15 ||642.54 |
|financial charges & || || |
|depreciation || || |
|Less: Depreciation ||173.12 ||173.33 |
|Financial charges ||533.52 ||440.17 |
|Exceptional items ||14.61 ||- |
|Profit / (Loss) before ||(334.10) ||29.04 |
|taxation || || |
|Tax expenses ||85.83 ||- |
|Profit / (Loss) after ||(419.93) ||29.04 |
|taxation || || |
During the year under review the company achieved total turnover of Rs. 10296.56 lakhsis marginally lower than that of the previous year. The operations in the year have endedin a loss of Rs. 419.93 lakhs as against a small profit in the previous year. TheCompanys operations have been affected by the recessionary conditions prevailing inChina and European Countries. The Company could not achieve the growth in exportsit had visualized for the year. Further the yarn prices have been subdued (both indomestic and export markets). The Company is optimistic and re-working its strategies toovercome such issues in the current year.
3. CHANGE IN SHARE CAPITAL
There is no change in Share Capital of the company during the year under review.
In view of losses incurred by the Company during the year under review the Board isunable to recommend dividend.
During the year under review the companys exports were Rs. 27.09 Crores asagainst Rs. 22.49 crores of the previous financial year.
6. EXPANSION & MODERNISATION
Modernization and technological up-gradation programs continue in the Company tomaintain competitiveness and achieve better quality. Company plans to modernize by addingbalancing equipment with a capital cost of about Rs. 400 lakhs. Stringent cost controlmeasures remain in place in all possible areas and are regularly reviewed.
7. FUTURE OUTLOOK
The company has further plans to modernize/expand its operations at its spinning unit.In the bleached cotton business the company continues to produce products such assurgical cotton rolls and cotton buds. This will help in good value addition to itsproduct range and improve the prospects of the company in the coming years.
8. CORPORATE GOVERNANCE
A separate report on Corporate Governance is enclosed as a part of this Annual Report.A certificate from the Auditors of the Company regarding compliance with conditions ofCorporate Governance norms stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed to the Report on Corporate Governance as Annexure- V.
9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Managements Discussion and Analysis Report for the year under review asstipulated under Regulation 34 read with Schedule V of SEBI (Listing Obligations andDisclosure Requirements) 2015 is presented in a separate section forming part of theAnnual Report as
Annexure - IV.
10. ENVIRONMENT AND POLLUTION CONTROL The manufacturing facility has obtainedenvironmental clearance from the Pollution Control Board concerned and are in compliancewith all current environmental legislation. As an integral part of its environmentprotection drive the Company ensures the very minimum quantity of generation of wastelow emission levels and low noise pollution levels during operations of its manufacturingfacility.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. RETIREMENT BY ROTATION
Pursuant to provisions of the Companies Act 2013 Sri Rajender Kumar Agarwal (DIN00041892)
Director will retire at the ensuing Annual General Meeting and being eligible offershimself for re-appointment. The Board recommends his re-appointment.
B. E VA LUAT I O N O F T H E B OA R D S PERFORMANCE
Board carried out through a structured evaluation process covering various aspects ofthe Boards functioning such as composition of the Board & committees experience& competencies performance of specific duties & obligations etc. Separateexercise was carried out to evaluate the performance of individual Directors including theBoard Chairman who were evaluated on parameters such as attendance contribution at themeetings and otherwise independent judgment etc. The evaluation of the IndependentDirectors and that of the Chairman was carried out by the entire Board excluding theDirector being evaluated and the evaluation of Non-Independent Directors was carried outby the Independent Directors. A separate meeting of Independent Directors was also heldduring the year wherein the performance of Chairman Board and Executive Directors wasevaluated. The Directors were satisfied with the evaluation results which reflected theoverall engagement of the Board and its Committees with the Company.
C. REMUNERATION POLICY
The company follows a policy on remuneration of Directors and Senior ManagementEmployees. The policy is approved by the Nomination & Remuneration Committee and theBoard. More details on the same are given in the Corporate Governance Report.
D. DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors of the Company have given declaration stating that theymeet the criteria of independence as provided under Companies Act 2013.
E. FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS
The Company has formulated a familiarization program for Independent Directors toprovide insights into the Companys manufacturing marketing finance and otherimportant aspects to enable the Independent Directors to understand its business in depthand contribute significantly to the Company. The Company Secretary briefs the Directorabout their legal and regulatory responsibilities as a Director. The details of suchprogram are available on the Companys website (www.suryavanshi.com)
12. AUDITORS & AUDITORS REPORT A. STATUTORY AUDITORS
The Statutory Auditors of the Company M/s. Brahmayya & Co Chartered AccountantsHyderabad will retire at the conclusion of ensuing Annual General Meeting and are eligiblefor re-appointment. They have confirmed their eligibility under Section 141 of theCompanies Act 2013 and the Rules framed there under for re-appointment as Auditors of theCompany. As required under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the auditors have also confirmed that they hold a valid certificateissued by the Peer Review Board of the Institute of Chartered Accountants of India. TheStatutory Auditors Report does not contain any reservation qualification or adverseremark. However In respect of the observation made by the statutory auditors with regardsto Non-provision of interest for delay in payments to MSME suppliers we have to statethat explanation was given in Note 33 of the Notes to accounts which is selfexplanatory.
B. SECRETARIAL AUDITOR
During the year the Company has appointed M/s R & A Associates Practising CompanySecretaries as Secretarial Auditor. The Secretarial Audit report for the financial year2015-16 is annexed herewith as Annexure I to this Report. The Secretarial AuditReport does not contain any reservation qualification or adverse remark.
C. COST AUDITOR
Pursuant to Section 148 of Companies Act 2013 the Board of Directors on therecommendation of Audit Committee appointed Aruna Prasad & Co. Cost Accountants asthe Cost Auditors of the Company for the year 2016-17 and has recommended the remunerationto the shareholders for their ratification at the ensuing Annual General Meeting. TheAuditor has confirmed that the appointment is within the prescribed limits and alsocertified that they are free from any disqualifications.
13. DIRECTORS RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013: (a) in the preparation of the annualaccounts the applicable accounting standards had been followed along with properexplanation relating to material departures; (b) the directors had selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe company at the end of the financial year and of the profit and loss of the company forthat period; (c) the directors had 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 had prepared the annual accounts on a going concern basis; (e) thedirectors had laid down internal financial controls to be followed by the company and thatsuch internal financial controls are adequate and were operating effectively; and (f) thedirectors had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
14. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarms length basis and were in the ordinary course of business. There are nomaterially significant related party transactions made by the Company with PromotersDirectors Key Managerial Personnel or other designated persons which may have a potentialconflict with the interest of the Company at large.
The Policy on materiality of related party transactions as approved by the Board may beaccessed on the Companys website.
Your Directors draw attention of the members to Note 30 to the financial statementwhich sets out related party disclosures.
15. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo is annexed and marked Annexure II and forms part ofthis Report.
16. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weakness in the design or operation was observed.
17. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required pursuant to Section 197(12) of Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of the employees of the Company will be provided upon request. In termsof Section 136 of the Act the Report and Accounts are being sent to the members andothers entitled thereto excluding the information on employees particulars which isavailable for inspection by the members at the Registered Office of the Company duringbusiness hours on working days of the Company upto the date of the ensuing Annual GeneralMeeting. If any member is interested in obtaining a copy thereof such member may write tothe Company Secretary in this regard.
No employee was in receipt of remuneration in excess of the limits prescribed underRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 as amended and hence the disclosure as required under Rules 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is notrequired.
18. POLICY ON SEXUAL HARASSMENT:
The Company has adopted policy on Prevention of Sexual Harassment of Employees atworkplace in accordance with The Sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
During the year under review the Company has not received any complaints pertaining tosexual harassment.
19. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The Company has not made any loan given guarantee or provided security pursuant to theprovisions of Section 186 of Companies Act 2013. The details of investments made by theCompany pursuant to the provisions of Section 186 of Companies Act 2013 is provided inNote 10 to the financial statement.
A. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure III tothis Report.
B. COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises Sri Surender Kumar Agarwal (Chairman) Sri R. SurenderReddy Sri Manish Gupta and Sri Rajender Kumar Agarwal as other members. All therecommendations made by the Audit Committee were accepted by the Board.
C. VIGIL MECHANISM
The Company has implemented a vigil mechanism policy to deal with instance of fraud andmismanagement if any. It provides for the directors and employees to report genuineconcerns and provides adequate safeguards against victimization of persons who use suchmechanism. The Policy on vigil mechanism may be accessed on the Companys website atthe link: http:// www.suryavanshi.com/whistle-blower-policy. html. There were nocomplaints received during the year 2015-16.
D. NUMBER OF BOARD MEETINGS
The Board of Directors of the Company met Four (4) times during the year. For furtherdetails please refer report on Corporate Governance.
E. LISTING FEES
The Company confirms that it has paid listing fees for the year to BSE Limited whereits shares are listed.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:a. Details relating to deposits covered under Chapter V of the Act. b. The Company has nosubsidiaries joint ventures or associate companies. c. No significant or material orderswere passed by the Regulators or Courts or Tribunals which impact the going concern statusand Companys operations in future.
The Board of Directors is pleased to place on record their appreciation of theco-operation and support extended by All India Financial Institutions Banks and variousState and Central Government Agencies. The Board would also like to thank theCompanys shareholders customers suppliers for the support and the confidence whichthey have reposed in the management. The Board place on record its appreciation of thecontribution made by the employees at all levels for their hard work solidarityco-operation and support.
| ||By order of the Board |
|For Suryavanshi Spinning Mills Limited || |
|Place: Secunderabad ||B.N.Agarwal |
|Date: 30.05.2016 ||Executive Chairman |