Suryaamba Spinning Mills Limited
Your Board of Directors present the 14th Annual Report of the companytogether with the Audited Financial Statements of Accounts for the financial year endedMarch 31 2021.
1. FINANCIAL RESULTS
The Company has prepared financial results in accordance with the Companies (IndianAccounting Standards) Rules 2015(Ind AS) prescribed under section 133 of the CompaniesAct 2013.
The financial performance during the year ended March 31 2021 has been summarizedbelow:
|Particulars ||As at year ended March 31 2021 ||As at year ended March 31 2020 |
|Revenue from operations ||12568.29 ||16219.29 |
|Other income ||85.10 ||94.07 |
|Total Revenue ||12653.39 ||16313.36 |
|Earnings Before Interest Taxes Depreciation and ||1405.05 ||1768.55 |
|Amortization || || |
|Less : Finance Cost ||438.16 ||563.24 |
|Less : Depreciation and Amortization Expense ||468.24 ||455.73 |
|Profit before Tax ||498.65 ||749.58 |
|Less :Tax Expenses ||73.69 ||229.13 |
|Profit for the period ||424.97 ||520.45 |
|Other Comprehensive Income (net of tax) ||6.65 ||14.02 |
|Total Comprehensive Income ||431.62 ||534.47 |
|Earnings per share ||14.49 ||17.75 |
|Retained Earnings - Opening Balance ||1539.27 ||1040.65 |
|Add: Profit for the year ||431.62 ||534.47 |
|Amount appropriated during the year: || || |
|Dividend including dividend tax paid ||21.28 ||35.35 |
|Transfer to General Reserves ||0.50 ||0.50 |
|Retained Earnings - Closing Balance ||1949.11 ||1539.27 |
2. DETAILS OF OPERATIONS
The year under review was stressful one. Sluggishness in demand resulted to stress onselling prices of Yarn products following with continuous drop in Raw material (Fiber)prices and Crude Oil prices coupling with imposition of sanctions on IRAN by the US andalso resulting to the Rupee depreciation. The sudden break of Covid-19 in the last monthof FY20 resulted into economic uncertainty especially in the manufacturing segment. Theensuing Lockdown resulted in complete operational pause demand implosion and completehalt of supply chains as business began to shift their focus to protecting the well-beingof employees and other stakeholders.
The revenue from operations during the financial year 2020-21 stood at 12568.29lakhsas compared to 16219.29 lakhs in the previous financial year. Domestic revenueconstitutes 75.90 % of total revenue from operations and Export revenue constitutes 22.89% of total revenue from operations.
The operating profit (EBIDTA) of the Company has decreased from 1768.55 lakhs in theprevious year to 1405.05 lakhs in the current year registering a decrease of 20.55 %.Your Company recorded a net profit of 431.62 lakhs in the current year as compared to534.47 lakhs in the previous year registering a significant decrease of 19.24 %.TheCompany has reported Earnings per Share of 14.49 during the current year against 17.75 inthe previous year.
Your Directors are pleased to recommend a dividend of Rs. 0.40 per share for the yearended March 31 2021 subject to shareholders' approval at the forthcoming 14thAnnual General Meeting (AGM) of the Company. The total outgo on account of dividend to theshareholders will be 11.73 Lakhs (subject to deduction of TDS as per Section 194 of theIncome Tax Act 1961).
4. TRANSFER TO RESERVE
The Company has transferred 0.50 lakhs to the general reserve out of the amountavailable for appropriations for the financial year ended March 31 2021.
5. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 124 and 125 of the Companies Act 2013 read withrules made there under the details / due dates for transfer of unclaimed / unpaiddividend to the Investors Education & Protection Fund (IEPF) by the Company are givenin General Shareholders Information Section of Corporate Governance Report forming partof this Annual Report.
The details of unclaimed dividend / shares are available on the website of the Companyviz. www.suryaamba.com/investors.
Your Company continues to focus on judicious management of its working capital.Receivables inventories and other working capital parameters were kept under strict checkthrough a process of continuous monitoring. Rating During the financial year 2020-21India Ratings and Research (Ind-Ra) has affirmed Company a
Long Term Issuer Rating of IND BBB'. The instrument wise rating actions are givenbelow:
|Instrument Type ||Size of Issue (million) ||Rating/ Outlook |
|Fund based limit ||INR 215 ||IND BBB/ Negative |
|Term loan (run-down balance) ||INR 111.2 ||IND BBB/ Negative |
| ||(reduced from INR ||125.38) |
|Term Loan ||INR 72.5 ||IND BBB/ Negative |
|Non Fund based limit ||INR 42.3 ||IND A3+ |
During the year under review the Company has not accepted any deposits in pursuance ofChapter V Companies (Acceptance of Deposits) Rules 2014. Particulars of Loans Guaranteesor Investments During the year under review the Company has not granted any loansneither provided guarantees nor made any investments covered in the register maintainedunder section 186 of the Companies Act 2013.
7. EXTRACT OF ANNUAL RETURN
The Extract of Annual Return prepared in Form MGT-9 as per the provisions of Section 92of the Companies Act 2013read with Rule 12 of the Companies (Management andAdministration) Rules 2014 shall be placed as Annexure Ito this Report before the board.
8. CHANGES IN SHARE CAPITAL
There was no change in the share capital of the Company during the financial year underreview.
9. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134 of the Companies Act 2013 with respectto the Directors' Responsibility Statement the Board of Directors of the Company herebyconfirms:
(a) that in the preparation of the annual accounts for the Financial Year ended March31 2021 the applicable accounting standards have been followed; (b) that the directorshave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company as at March 31 2021 and Profit and Loss Statement of theCompany for that period; (c) that the directors have taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions ofCompanies Act2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; (d) that the directors have prepared the annualaccounts for the financial year ended March 31 2021 ongoing concern basis; (e) that thedirectors have laid down internal controls to be followed by the Company and that suchinternal financial controls are adequate and were operating effectively; (f) that thedirectors have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively;
10. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION
(6) OF SECTION 149 OFTHE COMPANIES ACT 2013.
The Independent Directors have submitted the Declaration of Independence as requiredpursuant to Section 149 (7)of the Companies Act 2013 stating that they meet the criteriaof independence as provided in Sub-Section (6) of section 149 of Companies Act 2013.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Change in Directors and Key Managerial Personnel
During the financial year under review Ms. Deepa Dudani resigned from the post ofCompany Secretary & Compliance Officer w.e.f. January 15 2021 and Kriti Ladhaappointed on January 16 2021 as a Company Secretary & Compliance Officer in herplace. Re-appointment of Directors
In accordance with the provisions of the Companies Act 2013 and in terms of Articlesof Association of the Company Mr. Virender Kumar Agarwal (DIN: 00013314) ManagingDirector of the Company is liable to retire by rotation at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment. Independent Directors Allthe Independent Directors of the Company have been appointed for a fixed term of 5 (five)consecutive years from the date of their respective appointment / regularization in theAGM and they are not liable to retire by rotation. All Independent Directors have givendeclarations that they meet the criteria of independence as laid down under Section 149(6)of the Act and Listing Regulations 2015.
The Board is of the opinion that the Independent Directors of the Company possessrequisite qualifications experience and expertise in the fields of strategy planning andexecution management and leadership functional and managerial experience legal and riskmanagement corporate governance systems and practices finance banking and accounts andthey hold highest standards of integrity. Board Effectiveness
Familiarization Policy: Pursuant to Regulation 25(7) of Listing Regulations 2015 theBoard has framed a policy to familiarize the Independent Directors about the Company. Thepolicy is available on the website of the Company www.suryaamba.com. The familiarizationpolicy of the Company seeks to familiarize the Independent Directors with the working ofthe Company their roles rights and responsibilities vis a vis the Company the industryin which the Company operates business model etc. Board Evaluation: Pursuant to theprovisions of the Act and Listing Regulations 2015 the Board has carried out anevaluation of its own performance and that of the directors individually as well as theevaluation of the working of the Board Committees. The manner of evaluation has beenexplained in the Corporate Governance Report. Criteria for selection of Directors KMPsand Senior leadership positions and their remuneration
The Board on the recommendation of the Nomination and Remuneration Committee has frameda policy for selection and appointment of Directors Senior Management Personnel and theirremuneration. The policy is available on the Company's website www.suryaamba.com. Thepolicy contains inter-alia principles governing directors' appointment and remunerationincluding criteria for determining qualifications positive attributes independence ofdirectors etc. Key Managerial Personnel Pursuant to the provisions of Sections 2(51) and203 of the Act read with The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the following are the Key Managerial Personnel of the Company:
? Mr. Virender Kumar Agarwal Managing Director;
? Mrs. Seema Agarwal Joint Managing Director;
? Mr. Mayank Agarwal Wholetime Director;
? Mr. Gajanan N. Chhawsaria CFO; and
? Kriti Ladha Company Secretary & Compliance Officer.
12. MEETINGS OF THE BOARD
A calendar of prospective meetings is prepared and circulated in advance to theDirectors. The details of Board and Committee meetings held during the year under revieware given in the Corporate Governance Report forming part of this Annual Report. The gapbetween these meetings was within the prescribed period under the Act and ListingRegulations 2015
13. COMMITTEES OF THE BOARD
Currently the Board has four Committees: 1. The Audit Committee 2. The Nomination andRemuneration Committee 3. Corporate Social Responsibility Committee 4. StakeholdersRelationship Committee Audit Committee
The Audit Committee consists of Mr. Amit Goela Chairman Mr. Sushil Kapadia Memberand Mrs. Seema Agarwal Member. All the recommendations made by the Audit Committee wereaccepted by the Board. Nomination and Remuneration Committee
The Nomination and Remuneration Committee consists of Mr. Amit Goela Chairman Mr.Sushil Kapadia Member and Mr. Nilesh Panpaliya Member. Policy on directors' appointmentand remuneration and other details: The Company follows a policy on remuneration ofdirectors and other senior managerial personnel. The Policy is recommended by theNomination and Remuneration Committee and approved by the Board. More details of the sameis given in the Corporate Governance Report. Corporate Social Responsibility Committee
The Corporate Social Responsibility consists of Mrs. Seema Agarwal Chairman Mr.Mayank Agarwal Member and Mr. Amit Goela Member. This policy encompasses the Company'sphilosophy for giving back to society as a corporate citizen and lays down the guidelinesand mechanism for undertaking socially useful programmes for the welfare & sustainabledevelopment of the community at large. Corporate Social Responsibility Policy The coretheme of the Company's CSR policy is giving back to the society from which it draws itsresources by extending helping hand to the needy and the underprivileged. Corporate SocialResponsibility is the commitment of business to contribute for sustainable economicdevelopment. It is the contribution of the corporate sector for philanthropic causes likeeducation health water sanitation animal welfare environment and communitydevelopment. In alignment with vision of the company through its CSR initiatives willcontinue to enhance value creation in the society through its services conduct&initiatives so as to promote sustained growth of the society in fulfilment of itsrole as a Socially Responsible Corporate with environmental concern. The Report onCorporate Social Responsibility as per Rule 8 of (Corporate Social Responsibility Policy)Rules 2014 is enclosed as Annexure-II. Stakeholders Relationship Committee
Stakeholders Relationship Committee consists of Mr. Amit Goela Chairman Mr. SushilKapadia Member and Mr. Mayank Agarwal Member. The Scope of the committee shall includeconsidering and resolving the grievances of the security holders of the company which mayarise due to any of the reasons cited in the Stakeholders Relationship Committee of thecompany.
14. AUDITORS Statutory Auditors:
At the Annual General Meeting (AGM) held on August 13 2020 Manish N Jain & Co.Chartered Accountants (ICAI Firm Registration Number 138430W) were appointed as StatutoryAuditors of the Company to hold office for a period of five years and their appointmentwill be subject to the ratification of members at every Annual General Meeting. Howeverpursuant to the Companies (Amendment) Act 2017 the ratification of the auditors at everyannual general meeting of the company has been dispensed with. The Report given by theAuditors on the financial statements of the Company is part of this Report. There has beenno qualification reservation adverse remark or disclaimer given by the Auditors in theirReport
The Auditor's Report to the Shareholders for the year under review does not contain anyqualification or adverse remark. Secretarial Auditor The Board has appointed M/s AarjuAgrawal& Associates a firm of Practicing Company Secretaries Nagpur as theSecretarial Auditors to conduct Secretarial Audit of the Company for the Financial Year2020-21 in compliance with the provisions of Section 204 of the Companies Act 2013. TheSecretarial Audit Report issued by M/s Aarju Agrawal & Associates in Form MR-3 isenclosed as Annexure-III. The Report of the Secretarial Auditor annexed to this Report isself- explanatory and does not call for any further clarification. In addition to theabove and pursuant to SEBI circular dated June 29 2021 a report on SecretarialCompliance for F.Y. 2020-21 has been submitted to stock exchanges. There are noobservations reservations or qualifications in the said report. Internal Auditor TheBoard of Directors of the Company have appointed Miss Shreyata Khakole CharteredAccountants having Membership Number: 174018 as Internal Auditors to conduct InternalAudit of the Company for the Financial Year 2021-22. They have confirmed their eligibilityand have granted their consent to act as Internal Auditors of the Company for thefinancial year 2021-22. Cost Auditor: The Board of Directors have appointed M/s. G. R.Paliwal & Co. Cost Accountants (Firm Reg. No.100058) Nagpur for conducting the costaudit of the Company for the financial year 2021-22 in compliance to the provisions ofSection 148 of the Companies Act 2013 read with Companies (Cost Records and Audit Rules)2014 on the recommendations made by the Audit Committee and has recommended hisremuneration for the approval of Members at the ensuing Annual General Meeting. Asrequired under the Act the remuneration payable to the Cost Auditor is required to beplaced before the members in a general meeting for their ratification. Accordingly aresolution seeking member's ratification for the remuneration payable to M/s. G. R.Paliwal & Co. Cost Accountants is included in the Notice convening the 14thAGMof the Company.
15. CORPORATE GOVERNANCE REPORT
The report on Corporate Governance as per Regulation 34(3) read with Schedule V of theSEBI Listing Regulations is included as a part of this Annual Report. The requisitecertificate from Manish N Jain & Co. confirming the compliance with the conditions ofCorporate Governance is attached to the Report on Corporate Governance.
16. MANAGEMENT DISCUSSION AND ANALYSIS
In terms of provisions of Regulation 34(2) of SEBI Listing Regulations report onManagement Discussion & Analysis for the year under review is provided in a separatesection forming part of this Annual Report.
17. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
Your Company has in place a vigil mechanism for directors and employees to reportconcerns about unethical behavior actual or suspected fraud or violation of yourCompany's Code of Conduct. Under the vigil mechanism of the Company which alsoincorporates a whistle blower policy in terms of Regulation 22 of the Listing Regulations2015 protected disclosures can be made by a whistle blower through an e-mail ordedicated telephone line or a letter to the Chairman of the Audit Committee. Adequatesafeguards are provided against victimization to those who avail of the vigilmechanism.The Policy on vigil mechanism/whistle blower policy may be accessed on theCompany's website www.suryaamba.com Employees who join the Company newly are apprised ofthe availability of the said policy as a part of their induction schedule.
The above is in compliance of Section 177 (9) & (10) of the Companies Act 2013 andin terms of Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
18. DETAILS OF ADEQUACY OF 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 weaknesses in the design or operation were observed.
19. CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company during the financialyear under review.
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
Material changes and Commitments if any affecting the financial position of theCompany occurred after the closure of financial year till the time of adoption of thisreport. No other material changes and commitments have occurred after the close of theyear till the date of this Report which affect the financial position of the Company.Further there is no change in the nature of business of the Company.
As economies around the world are suffering from the impact of COVID-19 severalbusinesses are also experiencing challenges in operations and supply chain disruptions.The impact of COVID-19 on the Company is being closely reviewed with the Management by theDirectors from time to time.
Your Company had temporarily suspended operations at its Plants and locations as perthe directives given by the Central and State Government and keeping in view the safety ofwork force. After seeking necessary approvals from the Government authorities andmaintaining social distancing norms and utmost safety of employees operations werecommenced at the Plant and other locations. However dispatches were affected due torestriction on movement of finished product to the ports for exports and to thedestinations of domestic customers.
21. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. Your Company did notenter into any material related party transactions with Promoters Directors KeyManagerial Personnel or other designated persons. All Related Party Transactions areplaced before the Audit Committee and also the Board for approval. Prior omnibus approvalof the Audit Committee is obtained on an annual basis for transactions which are of aforeseeable and repetitive nature. A detailed statement of such Related Party Transactionsentered into pursuant to the omnibus approval so granted are placed before the AuditCommittee for their review on a quarterly basis. Suitable disclosures as required by theIndian Accounting Standards (Ind AS 24) have been made in the notes to FinancialStatements. The Company has formulated a Related Party Transactions Policy for the purposeof identification and monitoring of such transactions. The policy on Related PartyTransactions as approved by the
Board is uploaded on the Company's website www.suryaamba.com.
22. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information with respect to Conservation of energy technology absorption foreignexchange earnings and outgo pursuant to Section 134(3)(m) of the Act read with Rule 8 ofCompanies (Accounts) Rules 2014 are provided in the Annexure VI to this Report.
23. RISK MANAGEMENT POLICY
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. The audit committee has additional oversight in the area of financialrisks and controls. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis.
Declaration with the compliance with the code of conduct by Members of the board andSenior 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 www.suryaamba.com
24. MECHANISM FOR BOARD EVALUATION
The board of directors has carried out an annual evaluation of its own performanceboard committees and individual directors pursuant to the provisions of the schedule IV ofthe Companies Act 2013 and the corporate governance requirements as prescribed bySecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.
The Directors evaluation was broadly based on the parameters such as understanding ofthe
Company's vision objective skills knowledge and experience participation andattendance in
Board/ Committee meetings; governance and contribution to strategy; interpersonalskills 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.
25. POLICY ON SEXUAL HARASSMENT
The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplacein accordance with the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act; 2013.The Company regularly conducts awareness programmes for itsemployees.
Disclosure pertaining to sexual harassment of women at workplace
During the Financial year ended March 31 2021 the Company has neither received anycomplaints nor there are any pending complaints pertaining to sexual harassment and theCompany had created Internal Complaints committee.
26. ENVIRONMENT HEALTH AND SAFETY
The Company considers it is essential to protect the Earth and limited naturalresources as well as the health and wellbeing of every person. The Company strives toachieve safety health and environmental excellence in all aspects of its businessactivities. Acting responsibly with a focus on safety health and the environment is partof the Company's DNA.
27. COMPLIANCE OF ACCOUNTING STANDARDS
As per requirements of the Listing Regulations 2015 and applicable AccountingStandards your Company has made proper disclosures in the financial statements. Theapplicable Accounting Standards have been duly adopted pursuant to the provisions ofSections 129 and 133 of the Act.
28. SECRETARIAL STANDARDS
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India. A certificate of compliances issued by the Secretarial Auditor M/s.Aarju Agrawal & Associates dated June 29 2021 is enclosed as Annexure-III and formspart of this Report.
29. APPRECIATION & ACKNOWLEDGMENT
The Company is grateful to its Customers Shareholders Suppliers vendors investorsand academic partners Banks & Financial institutions Central & State GovernmentAuthorities for their confidence reposed and constant support.
The Board of Directors also place on record their sincere appreciation of thecontribution made by the employees at all levels the consistent growth of the Company wasmade possible by their hard work loyalty dedication coordination and support.
|By Order of the Board of Directors || |
|VIRENDER KUMAR AGARWAL ||SEEMA AGARWAL |
|Managing Director ||Joint Managing Director |
|DIN : 00013314 ||DIN : 01430206 |
Date : May 29 2021