Suryavanshi Spinning Mills Ltd.
|BSE: 514140||Sector: Industrials|
|NSE: SURYVANSPG||ISIN Code: INE431C01023|
|BSE 15:16 | 15 Mar||6.92||
|NSE 05:30 | 01 Jan||Suryavanshi Spinning Mills Ltd|
Suryavanshi Spinning Mills Ltd. (SURYVANSPG) - Director Report
Company director report
We have pleasure in presenting the 38th Annual Report on the business andoperations of Company and Financial Results for the year ended 31st March2017.
1. FINANCIAL RESULTS Rs. In lakhs
During the year under review the company achieved total turnover of Rs.6623.43 lakhswhich is lower than that of the previous year. The operations during the year haveresulted in a loss of Rs.1278.35 lakhs as against the loss of Rs.419.93 lakhs in previousyear. The Company's operations have been affected due to insufficient working capitalfunds pending sanction of restructuring facilities from banks. Demonetization of highvalue currency and intermittent imports of polyster yarn leading to depressed domesticmarkets have also adversely affected the company during the 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 company's exports were Rs. 7.84 crores as against Rs.27.09 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 adding balancing equipment with a capital cost of about Rs.445.60 lakhs. Stringent cost control measures remain in place in all possible areas andare regularly reviewed.
7. FUTURE OUTLOOK
The company plans to focus on production of value added yarns i.e. slub yarns injectionyarns multicount/multi twist yarns two/three ply yarns for sewing thread applicationsfancy yarns like neps and linen effects. These applications have already been installedpartially started production and established markets. Company wants to scale up theoperations further. Company also wants to start Course yarns like NE 20 for knitting andsewing thread application as a future strategy.
8. CORPORATE GOVERNANCE
The report on Corporate Governance is not being enclosed to this report in view of therelaxation under regulation 15(2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
9. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT
Management's Discussions and Analysis Report for the year under review as stipulatedunder Regulation 34 read with Schedule V of SEBI (Listing Obligations and DisclosureRequirements) 2015 is presented in a separate section forming part of the Annual Reportas Annexure - IV.
10. ENVIRONMENT AND POLLUTION CONTROL
The manufacturing facility has obtained
environmental clearance from the Pollution Control Board concerned and is 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
A. APPOINTMENTS AND RESIGNATIONS
During the year under review Sri R Surender Reddy Independent Director has resignedfrom Board with effect from 19th September 2016 due to pre-occupations and SriBadrinarayan Agarwal Executive Chairman and Whole-time Director has resigned from boardwith effect from 27th May 2017 due to health issues. The
Board records its appreciation for the services rendered by them.
The necessary Resolution for obtaining the approval of Members for the re-appointmentof Sri Rajender Kumar Agarwal (DIN No. 00041892) as Managing Director for the period ofthree years have also been included in notice for the ensuing Annual General Meeting.
B. RETIREMENT BY ROTATION
Pursuant to the provision of Section 152 of the Companies Act 2013 Sri Rajender KumarAgarwal (DIN No. 00041892) Director will retire at the ensuing Annual General Meeting andbeing eligible offers himself for re-appointment. The Board recommends his re-appointment
C. EVALUATION OF THE BOARD'S PERFORMANCE
In compliance with the Companies Act 2013 and as per the Listing Regulations theperformance evaluation of the Board and of its Committee was carried out during the yearunder review.
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 of its own performance theDirectors individually as well as evaluation of the working of its Board Committees. Astructured questionnaire was prepared covering various aspects of the Board's functioningsuch as adequacy of the composition of the Board and its Committees Board Cultureexecution and performance of specific duties obligations and governance.
A meeting of the Independent Directors was also held which reviewed performance ofnon-independent directors performance of the board as a whole and performance of thechairman after taking in to account the views of executive directors and nonexecutivedirectors. The same was discussed in the board meeting that followed the meeting of theindependent directors at which the performance of the board its committees andindividual directors was also discussed. Performance evaluation of independent directorswas done by the entire board excluding the independent director being evaluated.
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 FOR INDEPENDENT DIRECTORS
The Company has formulated a familiarization program for Independent Directors toprovide insights into the Company's manufacturing marketing finance and other importantaspects to enable the Independent Directors to understand its business in depth andcontribute significantly to the Company. The Company Secretary briefs the Director abouttheir legal and regulatory responsibilities as a Director. The details of such program areavailable on the Company's website (www.suryavanshi.com)
2. BOARD AND THEIR COMMITTEES
1. BOARD OF DIRECTORS
a) Composition and Number of Board Meetings:
As on 31st March 2017 the board of Directors comprises of 5 (Five)Directors of these 2 (Two) are Executive Directors and 3 (Three) are IndependentDirectors. The chairman was an Executive Director who has resigned with effect from 27thMay 2017.
The Board of Directors of the Company met Five (5) times during the year i.e. on30.05.2016
09.08.2016 14.11.2016 31.01.2017 and
b) Disclosure of relationships between directors inter-se:
Except for Sri Badrinarayan Agarwal and Sri Rajender Kumar Agarwal being father andson there is no inter-se relationship between other Board Members.
2. AUDIT COMMITTEE
During the year Sri R. Surender Reddy Member of Audit Committee has resigned from theBoard and Membership of Audit Committee with effect from 19th September 2016and consequently Audit Committee was re-constituted during the period under review. TheAudit Committee comprises of Sri Surender Kumar Agarwal (Chairman) Sri
Manish Gupta and Sri Rajender Kumar Agarwal as other members. All the recommendationsmade by the Audit Committee were accepted by the Board.
During the financial year ended March 312017 - Four (4) Audit Committee Meetings wereheld on 30.05.2016 09.08.2016 14.11.2016 and 14.02.2017
3. NOMINATION & REMUNERATION COMMITTEE
The company follows a policy on remuneration of Directors and Senior ManagementEmployees. The policy is approved by the Nomination & Remuneration Committee and theBoard.
The Nomination and Remuneration Committee comprises of Sri Surender Kumar Agarwal(Chairman) Sri Manish Gupta and Smt Sushma Gupta as other members. All therecommendations made by the Nomination and Remuneration Committee were accepted by theBoard.
During the financial year ended March 31 2017 - One (1) Nomination and RemunerationCommittee Meetings were held on 31.01.2017.
4. STAKEHOLDERS' RELATIONSHIP
Ybur company has constituted a Stakeholders' Relationship Committee to specificallylook into the mechanism of redressal of grievances of shareholders and other securityholders.
Sri Surender Kumar Agarwal (Chairman) is the Non-Executive Director heading theCommittee and Sri B. Somasekhara Rao CFO & Company Secretary is the compliance officeof the Company
There are no pending complaints during the year under review.
12. AUDITORS & AUDITORS' REPORT A. STATUTORY AUDITORS
As the members are aware M/s Brahmayya & Co. Chartered Accountants Hyderabad(ICAI Firm Regn. No.0005l3S) have been the Company's Statutory Auditors for several years.In accordance with section 139 of the Companies Act 2013 and rules made there under theCompany is required to appoint a new firm of Auditors for a term of five consecutive
years from the conclusion of the ensuing Annual General Meeting.
Accordingly the Company proposes to appoint M/s K.S.Rao & Co. CharteredAccountants Hyderabad (ICAI Firm Regn. No.003l09S) in place of M/s Brahmayya & Co.as its Statutory Auditors. The Board wishes to place on record its appreciation of theservices rendered by M/s Brahmayya & Co. Chartered Accountants in its longassociation with the Company.
M/s K.S.Rao & Co. Chartered Accountants have expressed their willingness to beappointed as the Statutory Auditors of the company and furnished the certificate of theireligibility and consent for the same under Section 141 of the Companies Act 2013 and therules framed thereunder in terms of the Listing Regulations the Auditors have confirmedthat they hold a valid certificate issued by the Peer Review Board of the ICAI. The Boardbased on the recommendation of the Audit Committee recommends the appointment of M/s K.S.Rao & Co. Chartered Accountants as the Statutory Auditors of the company. TheAuditors' Report to the Shareholders for the year under review does not contain anyqualification.
However In respect of the observation made by the Statutory Auditors in Annexure-A totheir report at Para 7(a) Para 8 and at note No.26 in notes to accounts the managementis of the considered opinion based on their discussions with the banks / financialinstitutions that with the implementation of restructuring of the loans and arehabilitation package being worked out the operations of the company will be normalizedand the company will be able to meet its liabilities to the banks and discharge itsstatutory dues in the near future.
With reference to auditors' observations on note No.35 to the financial statements theBoard considers the note itself is selfexplanatory.
B. SECRETARIAL AUDITOR
During the year the Company has appointed M/s NVVS Suryanarayana Rao PracticingCompany Secretaries as Secretarial Auditor in compliance with the provision of Section 204of the Companies Act 2013. The Secretarial Audit report in form MR-3 for the financialyear ended 31st March 2017 is annexed herewith as Annexure I to thisReport.
The Secretarial Audit Report does not contain any qualification or adverse remark.
However In respect of the observation made by the Secretarial Auditors in theirreport the management is of the considered opinion based on their discussions with thebanks / financial institutions that with the implementation of restructuring of the loansand a rehabilitation package being worked out the operations of the company will benormalized and the company will be able to meet its liabilities to the banks and dischargeits statutory dues in the near future.
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 annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had 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 and ofthe profit and loss of the company for that period;
(c) the directors had 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 had prepared the annual accounts on a going concern basis;
(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable 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 onarm's length basis and were in the ordinary course of business. There
are no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated persons which may havea potential conflict with the interest of the Company at large. Thus disclosure in FormAOC-2 is not required.
All Related Party transaction are presented to the Audit Committee and the board.Omnibus approval is obtained for the transactions which are foreseeable and repetitive innature. A Statement of all related party transactions is presented before the AuditCommittee and the Board on a quarterly basis specifying the nature value and terms andconditions of the transactions. The Policy on materiality of related party transactions asapproved by the Board may be accessed on the Company's website at http://
Your Directors draw attention of the members to Note 31 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 required to be given pursuant to the provisions of Section 134of the Companies Act 2013 read with the Companies (Account) Rules 2014 is annexed heretoand marked Annexure II and forms part of this 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 General Meeting. If any member is interested in obtaining a copy thereof suchmember may write to the 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 in place a policy on Prevention of Sexual Harassment of Employees atworkplace in accordance with The Sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Internal Compliant Committee has been set to redresscomplaints received regarding sexual harassment.
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 annexedherewith as Annexure III to this Report.
B. WHISTLE BLOWER POLICY
The Company has in place a Whistle Blower Policy for vigil mechanism for the directorsand employees to report genuine concerns to the management about unethical behaviorfraud violation of Company's code of conduct and provides adequate safeguards againstvictimization of persons who use such mechanism. The Policy on vigil mechanism may beaccessed on the Company's website at the link:
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 no subsidiaries joint ventures or associate companies.
c. 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.
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 the Company's shareholders customers suppliers forthe support and the confidence which they have reposed in the management. The Board placeon record its appreciation of the contribution made by the employees at all levels fortheir hard work solidarity co-operation and support.