We have pleasure in presenting the 5th Annual Report on the business and operations ofCompany and Financial Results for the year ended 31 st March 2018.
I. FINANCIAL RESULTS
| || ||Rs. In lakhs |
| ||2017-2018 ||2016-2017 |
|Turnover Revenue ||62.32 ||3855.01 |
|Gross Profit before financial charges & depreciation ||(316.90) ||(897.09) |
|Less: Depreciation ||130.01 ||137.03 |
|Financial charges ||70.83 ||606.91 |
|Exceptional items ||(81.37) ||- |
|Profit / (Loss) before taxation ||(436.37) ||(1641.03) |
|Tax expenses ||- ||- |
|Profit / (Loss) after taxation ||(436.37) ||(1641.03) |
During the year under review the company achieved total turnover of Rs.62.32 Lakhswhich is lower than that of the previous year. The operations in the year have ended in aloss of Rs.436.37 Lakhs as against loss of Rs. 1641.03 Lakhs in previous year.
The Company's operations have been affected due to non functioning of the unit in theabsence of working capital pending sanctions of banking facilities.
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.
5. FUTURE OUTLOOK
After improvement working capital condition the Company shall put its efforts indevelopment of new value added products.
6. 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.
7. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion 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.
ENVIRONMENT AND POLLUTION CONTROL
The manufacturing facility had obtained environmental clearance from the PollutionControl Board concerned and is in compliance with all current environmental legislation.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. APPOINTMENTS AND RESIGNATIONS
During the year under review Sri Badrinarayan Agarwal Chairman has resigned fromboard with effect from 15th May 2017 due to health issues and left the worldfor his heavenly abode on 29th November 2017. The Board deeply regrets his saddemise and places on record its sincere appreciation for the contribution rendered by LateSri Badrinarayan Agarwal Founder and Promoter of the Company.
Ms. Pooja Bung Company Secretary resigned from the employment of the company w.e.f. 30thNovember 2017. The Board places on record its sincere appreciation for the valuableservices rendered by her during her tenure.
B. RETIREMENT BY ROTATION
Pursuant provision of Section 152 of the Companies Act 2013 Sri Jeetender KumarAgarwal (DIN 00041946.) 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 non-executivedirectors. 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.aanandalakshmi . com)
10. BOARD AND THEIR COMMITTEES
1. BOARD OF DIRECTORS
a) Composition and Number of Board Meetings:
As on 31st March 2018 the Company's Board of Directors comprises 5 (Five)Directors. Of these 2 (two) are Promoter Directors and 3 (three) are IndependentDirectors. The Chairman is Executive Director.
The Board of Directors of the Company met Five (5) times during the year i.e on27.05.2017 01.09.2017 11.09.2017 13.12.2017 and 14.02.2018.
b) Disclosure of relationships between directors inter-se:
Except for Sri Devender Kumar Agarwal and Sir Jeetender Kumar Agarwal being brothersthere is no inter-se relationship between other Board Members.
2. AUDIT COMMITTEE
The Audit Committee comprises of Sri Surender Kumar Agarwal (Chairman) Sri ManishGupta and Sri Devender Kumar Agarwal as other members. All the recommendations made by theAudit Committee were accepted by the Board.
During the financial year ended March 312018 - Four (4) Audit Committee Meetings wereheld on 27.05.2017 11.09.2017 13.12.2017 and 14.02.2018.
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 2018 - Two (2) Nomination and RemunerationCommittee Meetings were held on 01.09.2017 and 14.02.2018.
4. STAKEHOLDERS' RELATIONSHIP COMMITTEE
Your company has constituted a Stakeholders' Relationship Committee to specificallylook into the mechanism of redressal of grievances of shareholders and other securityholders.
Sri Manish Gupta (Chairman) is the Non- Executive Director heading the Committee.
There are no pending complaints during the year under review.
11. AUDITORS & AUDITORS* REPORT
A. STATUTORY AUDITORS
M/s K. S. Rao & Co. Chartered Accountants Hyderabad (ICAI Firm Regn. No.003109S)were appointed as Statutory Auditors in the AGM held on 29* September 2017 for a period of5 years until the conclusion of 9th AGM.
Ministry of Corporate Affairs vide its notification dated May 7 2018 has done awaywith the requirement of seeking ratification of appointment of statutory auditors bymembers at each AGM. Accordingly no such item has been considered in notice of the 5thAGM.
However In respect of the observation made by the Statutory Auditors regarding noteNo.45 in notes to accounts the management is of the considered opinion based on theirdiscussions with the banks / financial institutions that with the implementation ofsettlement of the loans and a rehabilitation package being worked out the operations ofthe company will be normalized and the company will be able to meet its liabilities to thebanks and discharge its statutory dues in the near future.
With reference to auditors observations on note No.43 & 44 to the financialstatements the Board considers the note itself is self- explanatory.
B. SECRETARIAL AUDITOR
During the year the Company has appointed M/s NWS 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 3151 March 2018 is annexed herewith as Annexure I to thisReport.
The secretarial audit report does not contain any qualifications or adverse remark.
12. 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 I34(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.
13. 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 materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. Thus disclosure in Form AOC-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://www.aanandalakshmi.com/policy-policy.html
Your Directors draw attention of the members to Note 35 to the financial statementwhich sets out related party disclosures.
14. 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 provision 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.
15. 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.
16. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required pursuant to Section 197(12) of Companies Act 2013 read withRule 5(I) and Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of the employees of the Company will be provided uponrequest. In terms of Section 136 of the Act the Report and Accounts are being sent to themembers and others entitled thereto excluding the information on employees' particularswhich is available for inspection by the members at the Registered Office of the Companyduring business hours on working days of the Company upto the date of the ensuing AnnualGeneral Meeting. If any member is interested in obtaining a copy thereof such member maywrite to the Company Secretary in this regard.
17. 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.
18. 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.
A. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure III tothis 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: www.aanandalakshmi.com . There were nocomplaints received during the year 2017-18.
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. The Company is not required to maintain cost records under Section 148(I) of theCompanies Act 2013.
d. 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.
| ||By order of the Board |
| ||For Aananda Lakshmi Spinning Mills Limited |
| ||D.K. Agarwal |
| ||Managing Director |
|Place: Secunderabad ||Surender Kumar Agarwal |
|Date: 14.08.2018 ||Director |