Your Directors submit their report for the financial year ended 31.03.2015:
| || ||(Rs. in Lacs) |
|Particulars ||Year ended 31.03.2015 ||Year ended 31.03.2014 |
|Net Sales ||41244 ||46110 |
|Profit before Depreciation Interest and taxes ||4698 ||4470 |
|Interest ||4470 ||3758 |
|Profit before Depreciation and taxes ||228 ||712 |
|Depreciation ||1099 ||2115 |
|Profit (Loss) before tax ||(871) ||(1403) |
|Provision for Tax ||- ||- |
|Deferred Tax Liability (Asset) ||- ||(195) |
|Net Profit (Loss) after taxes ||(871) ||(1208) |
Operations and Performances:
Due to sluggish demand for textile in domestic and export markets for the last 4 yearsthe performance of the Company had been adversely affected resulting in losses. Due tocontinuous losses for the past 4 years and repayment of principal for some of the termloans despite of losses the liquidity of the Company has also been affected. Due to tightworking capital situation the capacity utilization was marginally lower compared toprevious year. During the FY 2014-15 under review your company has produced 15654 MTs ofyarn and 99.81 lakh meters of fabric as against 16063 MTs of yarn and 106.94 mtrs offabric in the year 2013-14. The net sale of the company was Rs.412.24 crs as againstRs.461.10 crs in the previous year. The company has incurred Net Loss of Rs.8.71 crs asagainst Rs.12.08 crs in the previous year.
During the FY 2014-15 the FOB value of the Company exports was Rs.133.04 crs as againstRs.164.76 crs in the previous year. The fall in exports was due to sluggish demand foryarn in International market and also due to significant drop in Chinese import of yarnfrom India. The cotton yarn exports from India to China dropped by nearly 23%.
During the year under review your Company had incurred capital expenditure of Rs.303.20lacs.
Board of Directors:
Relevant information on composition of the Board and number of meetings is provided inBoard of Directors section of Corporate Governance Report which forms part ofthis Annual Report.
In terms of the provisions of Section 152 of the Companies Act 2013 Sri Arun KumarAgarwal Director would retire at the ensuing Annual General Meeting. He being eligibleoffers himself for reappointment. Your Board of Directors recommends his re-appointment.Brief profile of Sri Arun Kumar Agarwal has been provided elsewhere in this Annual Report.
The Board of Directors of the Company have appointed Shri Pankaj Goel as AdditionalDirector with effect from 11th August 2015. Pursuant to the provisions of Section 161 ofthe Companies Act 2013 Shri Pankaj Goel shall hold office up to the date of the ensuing32nd Annual General Meeting of the Company. Considering his varied experience andexpertise your Board recommends his appointment as an Independent Director of theCompany. Shri. R. Surender Reddy and Shri. Ankit Jain have resigned from the officeDirector on 13th November 2014 and 11th August 2015 respectively due to theirpre-occupation and personal grounds. The Board placed on record its deep appreciation ofthe contributions made by Shri.R.Surender Reddy and Shri. Ankit Jain during their tenureas Director of the Company and wished them all success happiness and best of health inlife.
Relevant information on composition of the Audit Committee and number of meetings isprovided in Audit Committee section of Corporate Governance Report which formspart of this Annual Report.
Changes in Share Capital
During the year under review your Company has issued and allotted 307000 10%Cumulative Redeemable Preference shares of Rs.100/- each to Promoters and others on apreferential basis. Consequently the paid up Capital of the Company has increasedfrom Rs.35.31 crs to Rs.38.38 crs.
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 Clause 49of the Listing Agreement.
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.
Related Party Transactions:
All the related party transactions were entered on arms length basis and are incompliance with the applicable provisions of the Companies Act 2013 and the ListingAgreement. There are no materially significant related party transactions made by thecompany with Promoters Directors or Key Managerial Personnel etc. which may havepotential conflict with the interest of the company at large. All Related PartyTransactions are presented to the Audit Committee and to the Board. Omnibus approval isobtained for the transactions which are foreseeable and repetitive in nature. A statementof all related party transactions is presented before the Audit Committee on a quarterlybasis specifying the nature value and terms and conditions of the transactions. TheRelated Party Transactions Policy as approved by the Board is uploaded on thecompanys website at the web link: http://www. suryajyoti.com/policyonrelated.pdf
Particulars of Loans Guarantees or Investments:
No Loans/Guarantees / Investments under Section 186 of the Companies Act 2013 havebeen made during the year to the parties listed therein.
Transfer to reserves:
In view of the loss incurred by the Company no profits are transferred to reserves.
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.
Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out the annual performance evaluation of its ownperformance the Directors individually as well as the evaluation of the working of itsCommittees. A structured questionnaire was prepared after circulating the draft formscovering various aspects of the Boards functioning such as adequacy of thecomposition of the Board and its Committees Board culture and performance of specificduties obligations and governance.
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 Companys 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 Clause 49 of the Listing Agreement a report onManagement Discussion & Analysis is herewith annexed as Annexure - II tothis 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 with the Stock Exchanges acompliance report on Corporate Governance for the year 2014-15 and a Certificate from theAuditors of the Company are furnished which form part of this Annual Report. Disclosureunder the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013: The Company has in place an Anti Sexual Harrasment Policy in line with therequirements of the Sexual Harrassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. Internal Complaints Committee has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporary andtrained) are covered under the Policy. The following is a summary of sexual harassmentcomplaints received 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 Companys vision. Your Company appreciates the spirit ofits dedicated employees.
Significant and material orders passed by the regulators or courts: There are nosignificant material orders passed by the Regulators / Courts which would impact the goingconcern status of the Company and its future operations.
M/s Brahmayya & Co. Chartered Accountants the statutory auditors of the Companyholds office upto the conclusion of the ensuing Annual General Meeting and have confirmedtheir eligibility and willingness for re-appointment.
The Board of Directors based on the recommendation of the Audit Committee havere-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.S.G.Ramakrishna & Co. Cost Accountants Hyderabad being eligibleand having sought reappointment as Cost Auditors of the Company to carry out the costaudit of the products manufactured by the Company during the financial year 2015-16 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 toM/s.S.G.Ramakrishna & Co. Cost Accountants is included at Item No.6 of the Noticeconvening the Annual General 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 to this 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: Theparticulars as prescribed under section 134 (3) (m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 are set out in Annexure - IVto this report.
Your Directors wish to place on record their appreciation for the valuable support andcooperation 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
|R.K. AGARWAL ||A.K. AGARWAL |
|Managing Director ||Executive Director |
|DIN: 00011349 ||DIN: 00011126 |
|Place : Secunderabad || |
|Date : 11th August 2015 || |
ANNEXURE - III
SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31st MARCH 2015
[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
M/s. Suryajyoti Spinning Mills Limited Corp. Off: 7th Floor Surya Towers 105 S.P.Road Secunderabad 500 003 Telangana.
I have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by M/s. Suryajyoti Spinning MillsLimited (hereinafter called the company). Secretarial Audit was conducted in a manner thatprovided me/us a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing my opinion thereon.
Based on my verification of the M/s. Suryajyoti Spinning Mills Limited books papersminute books forms and returns filed and other records maintained by the company and alsothe information provided by the Company its officers agents and authorizedrepresentatives during the conduct of Secretarial Audit I hereby report that in myopinion the company has during the audit period covering the financial year ended on31st March 2015 complied with the statutory provisions listed hereunder and also that theCompany has proper Board-processes and compliance-mechanism in place to the extent in themanner and subject to the reporting made hereinafter: I have examined the books papersminute books forms and returns filed and other records maintained by M/s. SuryajyotiSpinning Mills Limited for the financial year ended on 31st March 2015 according to theprovisions of:
(i) The Companies Act 2013 (the Act) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act 1956 (SCRA) and the rulesmade thereunder;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;
(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 (Not applicable to the Company during the Audit Period);
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999 (Not applicable to the Company during theAudit Period);
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 (Not applicable to the Company during the Audit Period);
(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009 (Not applicable to the Company during the Audit Period); and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998 (Not applicable to the Company during the Audit Period);
(vi) Other specifically applicable laws to the Company:
a) Hank Yarn Packing Notification issued under the Essential Commodities Act 1955;
b) Boiler Act 1923 and Indian Boiler Regulations 1950;
c) Explosives Act 1884.
I have also examined compliance with the applicable clauses of the following:
i) Secretarial Standards issued by The Institute of Company Secretaries of India (Notnotified hence not applicable to the Company during the audit period);
ii) The Listing Agreements entered into by the Company with Bombay Stock Exchange andNational Stock Exchange.
During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. mentioned above.
I further report that
The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act. Adequate notice is given to alldirectors to schedule the Board Meetings agenda and detailed notes on agenda were sent atleast seven days in advance and a system exists for seeking and obtaining furtherinformation and clarifications on the agenda items before the meeting and for meaningfulparticipation at the meeting.
Majority decision is carried through and there were no instances of dissenting membersin the Board of Directors. I further report that there are adequate systems and processesin the company commensurate with the size and operations of the company to monitor andensure compliance with applicable laws rules regulations and guidelines.
I further report that during the audit period the Company has issued and allotted307000 10% Cumulative Redeemable Preference shares of Rs.100/- each to Promoters andothers on a preferential basis.
| ||N. Madhavi |
|Date : 11th August 2015 ||Company secretary in Practice |
|Place : Hyderabad ||ACS No: 16866; CP No: 11732 |
Details as required under Section 134 (3) (m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 are provided below.
Conservation of Energy
The Company is making necessary efforts for conservation of energy. To reduce theenergy cost energy efficient equipments were used and the effect of the same has beenfelt.
Form for disclosure of particulars with respect to conservation of energy
|Particulars ||2014-15 ||2013-14 |
|A. POWER AND FUEL CONSUMPTION || || |
|1. Electricity || || |
|a. Purchased Unit (Nos.) ||64062228 ||70514185 |
|Total amount (`) ||354366662 ||363982246 |
|Rate / Unit (`) ||5.53 ||5.16 |
|b. Own Generation || || |
|i) Through Diesel Generator || || |
|Unit (Nos.) ||77426 ||268643 |
|Unit per Ltr. Of Oil ||3.44 ||3.33 |
|Cost / Unit (`) ||15.04 ||17.94 |
|ii) Through Steam Turbine / Generators ||Nil ||Nil |
|2. Coal ||Nil ||Nil |
|3. Furnace Oil ||Nil ||Nil |
|4. Other / Internal Generation ||Nil ||Nil |
|B. CONSUMPTION PER UNIT OF PRODUCTION (Kg.) || || |
|Consumption per Kg. of Production || || |
|Electricity (No. of Units) || || |
|Yarn (kgs) ||3.36 ||3.60 |
|Fabric (Mtrs) ||1.14 ||1.21 |
|Furnace Oil ||Nil ||Nil |
|Coal ||Nil ||Nil |
|Others ||Nil ||Nil |
FORM - B
Form for disclosure of particulars with respect to Technology absorption Research andDevelopment (R&D)
|1. ||Specific areas in which R & D carried out by the Company: ||The Company is having R&D in introduction and development of value added products. |
|2. ||Benefits derived as a result of the above R & D: ||New value added products were developed. |
|3. ||Future Plan of action: ||To further develop more value added products and improve the quality of the products. |
|4. ||Expenditure on R & D: ||Expenditure on in-house R & D has been shown under respective heads of expenditure in the profit and loss account as no separate account is maintained. |
| ||Technology absorption adaptation and innovation: || |
|1. ||Efforts in brief made towards technology: ||The company had adopted Absorption adaptation and innovation indigenous technology and innovated upon the same. |
|2. ||Benefits derived as a result of the above: Efforts e.g. product improvement cost reduction substitution etc. ||Product improvement increase in yield and quality resulted increase in Turnover. |
|3. ||In case of imported technology: imported during the 5 years reckoned from the beginning of the financial year) following information may be furnished ||No technology has been imported during the last 5 years. |
| ||(a) Technology imported: ||Nil |
| ||(b) Year of import: ||N.A. |
| ||(c) Has technology been fully absorbed: ||N.A. |
| ||(d) If not fully absorbed areas where this has not taken place reasons therefore and future plans of action ||N.A. |
|C. ||Foreign Exchange Earnings and Outgo: || |
| ||(a) Activities relating to exports initiatives: Taken to increase Exports development of new export markets for production and service and export plans. ||The information on Foreign Exchange Earnings and out-go is furnished in the Notes to Accounts forming part of the financial statements. |
| ||For and on behalf of the Board of Directors |
| ||R.K. AGARWAL ||A.K. AGARWAL |
|Place : Secunderabad ||Managing Director ||Executive Director |
|Date : 11th August 2015 ||DIN: 00011349 ||DIN: 00011126 |