Suryajyoti Spinning Mills Limited
Your Directors are pleased to present herewith the 34th Annual Report on the businessand operations of the Company and the Audited Accounts for the Year ended 31st March2017.
The summarized financial results for the year ended 31st March 2017 as compared withthe previous year are as under;
| || ||(Rs. in Lakhs) |
|Particulars ||Year ended 31/03/2017 ||Year ended 31/03/2016 |
|Net Sales ||12620.09 ||36192 |
|Profit before Depreciation Interest and taxes ||(11160.42) ||2660 |
|Interest ||180.13 ||3188 |
|Profit before Depreciation and taxes ||(11340.55) ||(528) |
|Depreciation ||1469.26 ||1580 |
|Profit (Loss) before tax ||(12809.81) ||(2108) |
|Provision for Tax ||- ||- |
|Deferred Tax Liability (Asset) ||- ||- |
|Net Profit (Loss) after taxes ||(12905.54) ||(2108) |
|Earning Per Shares (EPS) ||(65.66) ||(10.72) |
Operations and Performance:
The sluggish market conditions for textile industry are still continuing and as aconsequence the performance of the Company during the reporting period has been adverselyaffected. During the FY 2016-17 under review your company has produced 7681.80 MTs ofyarn and 15.38 lakh meters of fabric as against 14748.50 MTs of yarn and 92.59 lakh metersof fabric in the year 2015-16. The net sales of the company were Rs. 126.20 crs as againstRs. 361.92 crs in the previous year. The company has incurred Net Loss of Rs. (129.06) crsas against Rs. (21.08) crs in the previous year.
During the FY 2016-17 the FOB value of the Company exports was Rs. 17.04 crs asagainst Rs. 102.31 crs in the previous year.
During the year under review your Company had not incurred any capital expenditure andit was Rs. 2.40 crores in the previous year.
Board of Directors and Key Managerial Personnel:
Relevant information on composition of the Board and number of meetings is provided in'Board of Directors' section of Corporate Governance Report which forms part of thisAnnual Report.
In terms of the provisions of Section 152 of the Companies Act 2013 Shri Arun KumarAgarwal Director would retire at the ensuing Annual General Meeting. He being eligibleoffers himself for re-appointment. Your
Board of Directors recommends his re-appointment.
The Board of Directors of the Company has appointed Ms. Hamlata Devi as an AdditionalDirectors with effect from 21 November 2016. Pursuant to the provisions of Section 161 ofthe Companies Act 2013 she shall hold office up to the date of the ensuing 34 AnnualGeneral Meeting of the Company. Considering her varied experience and expertise yourBoard recommends her appointment as an Independent Director of the Company.
Brief profiles of above Directors have been provided elsewhere in this Annual Report.
Sri K. Harishchandra Prasad and Smt Neha Agarwal have resigned from the office ofDirectors on 03-08-2016 and Shri. Sanjeev Mitla Agarwal has resigned from the office ofDirector on 08-10-2016 due to personal grounds. The Key Managerial Personnel of theCompany Shri. Soma V.S Company Secretary has also resigned on 14-02-2017. The Boardplaced on record its appreciation of the contributions made by them during their tenure asDirectors and KMP of the Company and wished them all success happiness and best of healthin life.
Pursuant to the provisions of section 203 of Companies Act 2013 the key managerialpersonnel of the Company are Shri. Ravinder Kumar Agarwal Managing Director and Shri.ArunKumar Agarwal Chief Financial Officer.
Remuneration and other matters provided in section 178(3) of the Act have beendisclosed in the corporate governance report which forms part of this report.
Relevant information on composition of the Audit Committee and number of meetings isprovided in 'Audit Committee' section of Corporate Governance Report which forms part ofthis Annual Report.
Changes in Share Capital
There was no change in Share Capital of the Company during the year 2016-17.
Directors' Responsibility Statement:
Pursuant to the requirement under section 134 (5) of the Companies Act 2013 withrespect to Directors' Responsibility statement it is hereby confirmed that:
(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 the 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; and
(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.
(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.
Statement on declaration by Independent Directors:
All Independent Directors have given declarations that they meet the criteria ofIndependence as laid down under Section 149 (6) of the Companies Act 2013 and ListingAgreement/SEBI (LODR) Regulations 2015.
Nomination & 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.
Whistle Blower Policy:
The Company has a Whistle Blower Policy framed to deal with instance of fraud andmismanagement if any in the Company. The details of the Policy are explained in theCorporate Governance Report and also posted on the website of the Company.
Particulars of Loans Guarantees or Investments:
No Loans/Guarantees/Investments under Section 186 of the Companies Act 2013 have beenmade during the year to the parties listed therein.
Transfer to reserves:
In view of the loss incurred by the Company losses of Rs. 12905.54 lakhs weretransferred to surplus account of the Company.
In view of the loss incurred the Board of Directors of the Company expresses theirinability to recommend any dividend for the year under review.
Risk Management Policy:
The Company has instituted a proper mechanism for identifying and establishing controlsto effectively manage different kinds of risks viz. Trend Related Risks Raw MaterialRisks Brand Technology Risks Operational Quality Risks Human Resources RisksRegulatory Risks and Financial Risks. The management periodically reviews the risks andtakes steps to mitigate identified risks.
Evaluation of the Board's Performance
In compliance with the Companies Act 2013 and SEBI (LODR) Regulations 2015 theperformance evaluation of the Board and of its Committees was carried out during the yearunder review. More details on the same are given in the Corporate Governance Report.
Familiarization Program for Independent Directors:
The Company has formulated a familiarization program for the Independent Directors toprovide insights into the Company to enable the Independent Directors to understand itsbusiness in depth and contribute significantly to the Company. The details of such programare available in the Company's website www.suryajyoti.com.
Your Company has not accepted any fixed deposits and as such no principal or interestwas outstanding as on the date of the Balance sheet.
Extract of Annual Return:
An Extract of Annual Return prepared in accordance with Section 92(3) of the Act inForm MGT-9 is annexed as 'Annexure I' to this report.
Management Discussion & Analysis:
Pursuant to the provisions of SEBI (LODR) Regulations 2015 a report on ManagementDiscussion & Analysis is herewith annexed as 'Annexure - II' to this report.
The Company has been making every endeavor to bring more transparency in the conduct ofits business. As per the requirements of the Listing Agreement/SEBI (LODR) Regulations2015 a compliance report on Corporate Governance for the year 2016-17 and a Certificatefrom the Auditors of the Company are furnished which form part of this Annual Report.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013:
The Company has in place an Anti Sexual Harrasment Policy in line with the requirementsof the Sexual Harrassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. Internal Complaints Committee has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary and trained)are covered under the Policy. The following is a summary of sexual harassment complaintsreceived and disposed off during each year:
a) No. of Complaints received NIL
b) No. of Complaints disposed off NIL
Your Company considers its Human Resources as the key to achieve its objectives.Keeping this in view your Company takes utmost care to attract and retain qualityemployees. The employees are sufficiently empowered and such work environment propels themto achieve higher levels of performance. The unflinching commitment of the employees isthe driving force behind the Company's vision. Your Company appreciates the spirit of itsdedicated employees.
Significant and material orders passed by the regulators or courts:
There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.
Pursuant to the provisions of section 139 of the Companies Act 2013 read with Rule 6of Companies (Audit and Auditors) Rules 2014 the office of M/s. Rao Chowdary &Associates Chartered Accountants as statutory auditors of the company comes to an end. Astheir term of office comes to end at ensuing Annual General Meeting it is proposed toappoint M/s. ATHOTA & CO. Chartered Accountants Hyderabad (FRN 004828S) as thestatutory auditors of the company to hold office for a term of five consecutive years fromthe conclusion of the ensuing Annual General Meeting until the conclusion of the 39 AGM ofthe Company to be held in the year 2022 subject to ratification at every AGM. The Boardrecommends the resolution for your approval.
Comments on Audit qualifications:
The Company has not provided interest in respect of loans availed from SBI SBH and IOBconsequent to loan accounts becoming NPA (Non Performing Asset) on the principle ofaccounting prudence as the Company will be negotiating for a amicable settlement withthese Banks.
The Management is of the opinion that the liability does not arise and hence notprovided for.
The Board of Directors based on the recommendation of the Audit Committee hasre-appointed M/s. K.S.Rao & Co. Chartered Accountants Hyderabad as the InternalAuditors of your Company. The Internal Auditors are submitting their reports on quarterlybasis.
In accordance with Section 148(3) of the Companies Act 2013 and The Companies (Auditand Auditors) Rules 2014 the Audit Committee has recommended and the Board of Directorshad appointed M/s.GVSSP & Associates Cost Accountants Hyderabad being eligible andhaving sought re-appointment as Cost Auditors of the Company to carry out the cost auditof the products manufactured by the Company during the financial year 2016-17 on aremuneration of Rs.19000/- . The remuneration payable to the cost auditor is required tobe placed before the Members in a general meeting for their ratification. Accordingly aresolution seeking Members' ratification for the remuneration payable to M/s.GVSSP &Associates Cost Accountants is included at Item No.5 of the Notice convening the AnnualGeneral Meeting.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mrs. N. Madhavi Company Secretary in Practice to undertake the SecretarialAudit of the Company. The Secretarial Audit Report is annexed as 'Annexure III' tothis report.
Particulars of Employees:
There are no employees in the Company particulars of whom are required to be furnishedunder Section 197 read with Rule 5 of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. The industrial relations were cordial at all units ofthe Company.
Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo:
The particulars as prescribed under section 134 (3) (m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 are set out in 'Annexure - IV'to this report.
Related Party Transactions:
All the related party transactions were entered on arm's length basis and are incompliance with the applicable provisions of the Companies Act 2013 and the ListingAgreement/SEBI (LODR) Regulations 2015.
There are no materially significant related party transactions made by the company withPromoters Directors or Key Managerial Personnel etc. which may have potential conflictwith the interest of the company at large.
All Related Party Transactions are presented to the Audit Committee and to 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 on a quarterly basis specifying the nature value and terms and conditions ofthe transactions. Complete details mentioned in the Notes to accounts.
Information on transactions with related parties pursuant to section 134(3)(h) of theAct read with rule 8(2) of the Companies (Accounts) Rules 2014 are given in 'Annexure- V' in Form AOC-2 to this report.
Declaration about Compliance with Code of Conduct by Members of the Board and SeniorManagement Personnel
The Company has complied with the requirements about the Code of Conduct for Boardmembers and Senior Management Personnel. A compliance certificate by the Managing Directorforms part of this Report.
Adequacy of Internal Financial Control Systems with reference to Financial Statements
The Company has in place proper and adequate internal control systems commensurate withthe nature of its business and size and complexity of its operations. Internal controlsystems comprising of policies and procedures designed to ensure reliability of financialreporting timely feedback on achievement of operational and strategic goals compliancewith policies procedure applicable laws and regulations and that all assets andresources are acquired are used economically.
Corporate Social Responsibility
The provisions of Corporate Social Responsibility are not applicable to the Company forthe year.
Subsidiary/Joint Venture/Associate Companies
The Company does not have Subsidiary/Joint venture/Associate companies.
Your Directors wish to place on record their appreciation for the valuable support andco-operation extended by State Bank of India IDBI Bank State Bank of Hyderabad IndianOverseas Bank and State and Central Government Agencies.
Your Directors also wish to place on record their sincere appreciation of thecontribution made by the employees of the Company and are thankful to the Shareholders fortheir continued patronage and support.
| ||For and on behalf of the Board of Directors |
| ||Sd/- ||Sd/- |
|Place: Secunderabad ||R.K. AGARWAL ||A.K. AGARWAL |
|Date: 14-08-2017 ||Managing Director ||Executive Director |
| ||DIN: 00011349 ||DIN:00011126 |