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Sueryaa Knitwear Ltd.

BSE: 540318 Sector: Industrials
NSE: N.A. ISIN Code: INE249U01013
BSE 05:30 | 01 Jan Sueryaa Knitwear Ltd
NSE 05:30 | 01 Jan Sueryaa Knitwear Ltd

Sueryaa Knitwear Ltd. (SUERYAAKNITWEAR) - Director Report

Company director report

To

The Members

Your Directors are pleased to present to the valued stakeholders the 21 Annual Reportof Sueryaa Knitwear Limited along with the Audited Financial Statements of the Company forthe Year ended March 31 2017.

FINANCIAL HIGHLIGHTS- AT A GLANCE

Overall Performance of your Company

• The Financial Year 2016-17 had been a little tumultuous for the Company as yourCompany has shown a conventional performance during the year under review. The net Profitof your Company had gone down from Rs. 143115.67/- (2015-16) to Rs. (499399.30)(2016-17).

The financial summary performance highlights operations/state of affair ofyour Company for the year are summarized below:

Amount (In Rupees)

PARTICULARS 2016-17 2015-16
Income from Business Operations 39676826.10 34622865.30
Other Income 263146.04 841736.34
Total Income 39939972.14 35464601.64
Less: Expenditure except Depreciation& Financial Expenses 38506565.34 32886666.00
Profit/Loss before Interest Depreciation and Tax 1433406.80 2577935.64
Less: Financial Expenses 565451.10 1087846.97
Profit/Loss before Depreciation and Tax 867955.70 1490088.67
Less: Depreciation 1258717.00 1256582.00
Profit/Loss before Tax (390761.30) 233506.67
Less: Tax Expense 2587.00 94608.00
Add: Deferred Tax Asset 106051.00 4217.00
Net Profit/Loss after Tax (499399.30) 143115.67
Earnings per share:
Basic (0.19) 0.04
Diluted (0.19) 0.04

DIVIDEND

With a view of augmenting financial resources for generating stable growth in futurethe Board of Directors of the company have decided to not propose to recommend anydividend for the financial year on equity shares.

RESERVES

The Board proposes no amount to transfer to the reserves as the company is runningunder loss.

DEPOSITS

During the year under review the Company has not accepted any deposits in terms of section73 of the Companies Act 2013 to be read with the Companies (Acceptance of Deposits)Rule 2014 as amended from time to time and also no amount was outstanding onaccount of principal or interest thereon as on the date of the Balance Sheet.

SUBSIDIARY / ASSOCIATE/ JOINT VENTURES COMPANIES OF THE COMPANY

The Company is not having any Subsidiary Company/ Joint Venture/ Associate Companyduring the financial year 2016-2017. Form AOC-1 has also been attached with this report as"Annexure D"

MANAGEMENT DISCUSSION & ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is presented in a separate section of this Annual Report.

CHANGE IN NATURE OF BUSINESS

During the year under review there was no change in nature of business of the Company.

CHANGE IN DIRECTORS /KEY MANAGERIAL PERSONNEL DURING THE YEAR

The details about the changes in Directors or Key Managerial Personnel by way ofAppointment Re – designation Resignation Death Dis-qualification variation madeor withdrawn etc. are as follows:

S. No. Name Designation Nature of Change With Effect From
1. Mr. Chetan Kumar Independent Director Resignation 13/10/2016
2. Ms. Heena Arora Company Secretary Resignation 01/12/2016
3. Mr. Abhishek Bhargav Company Secretary Appointment 01/12/2016

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SECTION 149(6) OFCOMPANIES ACT 2013

All Independent Directors have given declarations under section 149(7) that they meetthe criteria of Independence as laid down under section 149(6) of the Companies Act 2013and Rules made thereunder to be read with SEBI (Listing Obligation & DisclosureRequirement) Regulation 2015.

DISCLOSURE OF CHANGE IN ACCOUNTING TREATMENT IN FINANCIAL STATEMENTS

During the period under review there were no changes in the Accounting treatment inthe Financial Statements for the financial year 2016-17 different from that as prescribedin Accounting Standards prescribed by the Institute of Chartered Accountants of India(ICAI).

EXTRACT OF ANNUAL RETURN

The details forming part of extract of Annual Return under sub section 3 of Section 92of the Companies Act 2013 in Form MGT-9 is annexed herewith as "AnnexureA".

NUMBER OF MEETINGS OF THE BOARD

During the year under review 10 Board Meetings 4 Audit Committee Meetings 1Nomination & Remuneration Committee Meeting 4 Stakeholders' Relationship CommitteeMeeting 1 Internal Compliant Committee Meeting and 1 Vigil Mechanism Committee Meetingwere convened and held. All the Meetings including Committee Meetings were duly held andconvened and the intervening gap between two consecutive meetings was within the periodprescribed under the Companies Act 2013 to be read with the SEBI (Listing Obligations&Disclosure Requirements) Regulations 2015.

AUDIT COMMITTEE

The Audit Committee of the Company is constituted in line with the provisions ofsection 177 of the Companies Act 2013 read with Regulation 18 of the SEBI (ListingObligation & Disclosure Requirement) Regulation 2015.

NOMINATION & REMUNERATION COMMITTEE

The Nomination & Remuneration Committee of the Company is constituted in line withthe provisions of section 178 of the Companies Act 2013 read with Regulation 19 of theSEBI (Listing Obligation & Disclosure Requirement) Regulation 2015.

STAKEHOLDERS' RELATIONSHIP COMMITTEE

The Stakeholders' Relationship Committee of the Company is constituted in line with theprovisions of section 178 of the Companies Act 2013 read with Regulation 20 of the SEBI(Listing Obligation & Disclosure Requirement) Regulation 2015.

VIGIL MECHANISM COMMITTEE

The Vigil Mechanism Committee of the Company is constituted in line with the provisionsof section 177 of the Companies Act 2013 read with Regulation 22 of the SEBI (ListingObligation & Disclosure Requirement) Regulation 2015.

BOARD ANNUAL EVALUATION

The provisions of section 134(3)(p) of the Companies Act 2013 read with SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 mandate that a Formal AnnualEvaluation is to be made by Board of its own performance and that of its Committee andindividual Directors. Schedule IV of the Companies Act 2013 states that performanceevaluation of the Independent Director shall be done by Directors excluding the one beingevaluated. The Board carried out a formal annual performance evaluation as per thecriteria/framework laid down by the Nomination & Remuneration Committee of the companyand adopted by the Board. The evaluation was carried out through a structured evaluationprocess to judge the performance of individual Directors including the Chairman of theBoard. They were evaluated on parameters such as their education knowledge experienceexpertise skills behavior leadership qualities level of engagement & contributionindependence of judgment decision making ability for safeguarding the interest of theCompany stakeholders and its shareholders.

The performance evaluation of the Independent Directors was carried out by the entireBoard except the participation of concerned Independent Director whose evaluation was tobe done. The performance evaluation of the Chairman and the Non Independent Directors wascarried out by the Independent Directors. The Board was satisfied with the evaluationprocess and approved the evaluation results thereof.

REMUNERATION POLICY OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board on the recommendation of Nomination & Remuneration Committee framed apolicy for selection and appointment of Directors Senior Management Personnel andfixation of their remuneration thereof. The Policy contains inter-alia directors'appointment and remuneration including criteria for determining qualifications positiveattributes independence of a Director etc.

FAMILIARIZATION POLICY

Pursuant to the provisions of Regulation 25(7) of Listing Regulations 2015 the Boardhas framed a policy to familiarize Independent Directors about the Company.

STATUTORY AUDITOR & SECRETARIAL AUDITOR WITH THEIR QUALIFICATION RESERVATION ORADVERSE REMARKS (IF ANY) ALONG WITH THE EXPLANATION OR COMMENTS BY THE DIRECTORS

A. STATUTORY AUDITOR

M/s Sanjeev Bimla & Associates Chartered Accountants were appointed asStatutory Auditor of the Company to audit the financial statements for the financial year2016-17. Their term of office shall expire at the ensuing Annual General Meeting.Therefore the Board recommends appointment of M/s Sandeep Manuja & AssociatesChartered Accountants (Firm Regn. No. 009525N) as Statutory Auditor of theCompany to hold office for a period of 5 years till the conclusion of 26 AnnualGeneral Meeting of the Company subject to ratification as to the said appointmentat every Annual General Meeting on such remuneration including out of pocket expenses andother expenses as may be mutually agreed by and between the Board of Directors and theAuditor.

The Board has also received a written consent/certificate regarding eligibility fortheir appointment as Statutory Auditors in accordance with the Rule 4 of the Companies(Audit and Auditors) Rule 2014 read with the provisions of section 139(2) of theCompanies Act 2013

The Board on the recommendation of the Audit Committee has proposed the appointment of M/sSandeep Manuja & Associates Chartered Accountants as the Statutory Auditors ofthe Company for the financial Year 2017-18.

Qualification(s) and Directors' comments on the report of Statutory Auditor:

The Notes on Accounts and observations of the Auditors in their Report on the Accountsof the Company are self-explanatory and in the opinion of the Directors do not call forany further clarification(s). Also the report submitted by the Auditor is unqualified.

B. SECRETARIAL AUDITOR

Pursuant to provision of section 204 of the Companies act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rule 2014 the Companyhas appointed M/s Tanay Ojha Company Secretary to undertake Secretarial Audit ofthe Company for the financial year 2016-17.The Audit was conducted and the report thereonis annexed herewith as "Annexure- B".

Qualification(s) and Directors' comments on the report of Secretarial Auditor:

Auditors' Comment: The composition of the Board of Directors of the Company isnot duly constituted due to which the Nomination & Remuneration committee does notcontain all Non-Executive Directors.

Directors' Reply: The Company is making efforts to appoint Non ExecutiveDirector on Board of the Company and hope to finalize the candidate for the requisite postat the earliest.

INTERNAL AUDIT

The Company had duly appointed an Internal Auditor to carry out the Internal AuditFunctions. The Internal Auditor submits a "Quarterly Report" to the AuditCommittee.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITOR

There were no instances of fraud those have been observed by the Statutory Auditorduring audit of the financial statements for the financial year 2016-17 which arerequired to be disclosed by the company in its Board Report under Section 143 (12) of theCompanies Act 2013.

PARTICULAR OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013

The Company has not given any loan(s) or guarantee(s) and has not made any investmentcovered under the provision of the section 186 of the Companies Act 2013 during the yearunder review.

PARTICULAR OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188 OF THECOMPANIES ACT 2013

In the financial year 2016-2017 company did not enter into any contracts orarrangements with any related party. Form AOC-2 has also been attached with this report as"Annexure C"

MATERIAL CHANGES AND COMMITMENTS IF ANY

During the year under review Shares of the Company got listed on "MainBoard" of "BSE Limited" vide its letter no. DCS/DL/DG/TP/839/2016-17.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

To the best of the Management's knowledge no significant and material order(s) werepassed by any regulator(s) or courts or tribunals which could impact the going concernstatus and company's operation in future.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUT-GO

The provisions of Section 134(3)(m) of the Companies Act 2013 do not apply to ourCompany. There was no foreign exchange inflow or Outflow during the year under review.

RISK MANAGEMENT

The provisions of SEBI Regulations for formation of Risk Management Committee are notapplicable to the Company. However as per section 134 (3) (n) of Companies Act 2013 thecompany regularly maintains a proper check in normal course of its business regarding riskmanagement. Currently the company does not identify any element of risk which maythreaten the existence of the company.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The company does not fall under the criteria of net worth turnover or profit forapplicability of Corporate Social Responsibility (CSR) provisions as per Section 135 ofthe Companies Act 2013 hence the same are not applicable to the company for the periodunder review.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

As per Regulation 22 of the SEBI Regulations 2015 in order to ensure that theactivities of the Company & its employees are conducted in a fair & transparentmanner by adoption of highest standards of professionalism honesty integrity and ethicalbehavior the company has adopted a vigil mechanism policy. This policy is explained in"Corporate Governance Report" and is also posted on website of the company.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of "The Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013" and Rules made thereunder yourCompany has constituted Internal Complaints Committee (ICC) at its workplace. During theyear no complaints were filed with the Company.

CORPORATE GOVERNANCE REPORT

As per Reg. 34 of SEBI Regulation 2015 read with Part A of Schedule V of the saidregulations a separate section on corporate governance practices followed by the companytogether with the certificate from the company's Statutory Auditors confirming complianceforms an integral part of this Report.

HUMAN RESOURCE

The relationship with employees continues to be harmonious. The company alwaysconsiders its human resource as its most valuable asset. Imparting adequate andspecialized training to its employees is ongoing exercise in the company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a robust and comprehensive Internal Financial Control systemcommensurate with the size scale and complexity of its operation. The system encompassesthe major processes to ensure reliability of financial reporting compliance withpolicies procedures laws and regulations safeguarding of assets and economical andefficient use of resources.

The Company has performed an evaluation and made an assessment of the adequacy and theeffectiveness of the Company's Internal Financial Control System. The Statutory Auditorsof the Company have also reviewed the Internal Financial Control system implemented by theCompany on the financial reporting and in their opinion the Company has in all materialrespects adequate

Internal Financial Control system over Financial Reporting and such Controls overFinancial Reporting were operating effectively as on 31 March 2017 based on the internalcontrol over financial reporting criteria established by the Company.

The policies and procedures adopted by the Company ensures the orderly and efficientconduct of its business and adherence to the company's policies prevention and detectionof frauds and errors accuracy & completeness of the records and the timelypreparation of reliable financial information.

The Internal auditors continuously monitor the efficiency of internal controls with theobjective of providing to the Audit Committee and the Board an independent objective andreasonable assurance on the adequacy and effectiveness of the organization's riskmanagement with regard to the internal control framework.

Audit committee meets regularly to review reports submitted by the Internal Auditors.The Audit Committee also meet the Company's Statutory Auditors to ascertain their views onthe financial statements including the financial reporting system and compliance toaccounting policies and procedures followed by the Company.

LISTING AGREEMENT

The shares of the Company are presently listed at BSE Limited. All statutory duesincluding Annual Listing Fees for the Financial Year 2017-18 has been paid by the Company.

PERSONNEL RELATIONS

Your Directors hereby place on record their appreciation for the services rendered byexecutives staff and other workers of the Company for their hard work dedication andcommitment. During the year under review relations between the Employees and theManagement continued to remain cordial.

CODE OF CONDUCT

The Board of Directors has laid down the code of conduct for all Board Members andmembers of the Senior Management of the Company. Additionally all Independent Directorsof the company shall be bound by duties of Independent Directors as set out in CompaniesAct 2013 to be read with SEBI Listing Regulations 2015.

All Board Members Key Managerial Personnel and Senior Management Personnel haveaffirmed compliance with the Code of Conduct.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is as follows:

The company has 2 Executive Directors and no remuneration has been paid to them duringthe year. Further no sitting fee has been paid by the company to Independent Directorduring the year.

The particulars of the employees who are covered by the provisions contained in Rule5(2) and rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are:

a) Employed throughout the year Nil
b) Employed for part of the year Nil

The remuneration paid to all Key Managerial Personnel was in accordance with theremuneration policy as adopted by the company.

DIRECTOR'S RESPONSIBILITY STATEMENT

In terms of Section 134(3) of the Companies Act 2013 the Directors would like tostate as follows:

(a) In the preparation of the Annual Accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistentlyand made judgments & estimates that are reasonable and prudent so as to give a true& fair view of the state of affairs of the company at the end of the financial yearand of the profit & loss of the Company for that period ;

(c) The Directors had taken proper & 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 & detecting fraud & otherirregularities;

(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 such controls are adequate and are operating effectively;

(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.

ACKNOWLEDGEMENT

Your Directors would like to express their sincere appreciation for assistance andco-operation received from the various stake holders including Financial InstitutionsBanks Governmental authorities and other business associates who have extended theirvaluable support and encouragement during the year under review.

Your Directors take the opportunity to place on record their deep appreciation of thecommitted services rendered by the employees at all levels of the Company who havecontributed significantly towards Company's performance and for enhancing its inherentstrength. Your Directors also acknowledge with gratitude the encouragement and supportextended by our valued stakeholders.

By Order of the Board of Directors
For Sueryaa Knitwear Limited
Sd/- Sd/-
Rajiv Jain Manisha Jain
Date: 19.07.2017 Managing Director Whole Time Director
Place: Ludhiana DIN:1029784 DIN:02684080