We have pleasure in presenting the 40th Director Report on the business and operations of Company and Financial Results for the year ended 31 stMarch 2019.
1. FINANCIAL RESULTS
|Rs. In lakhs|
|Gross Profit before financial charges & depreciation& exceptional items||(101.76)||(353.03)|
|Profit / (Loss) before taxation||(340.35)||(354.47)|
|Profit / (Loss) after taxation||(340.35)||(354.47)|
During the year under review the company recorded total turnover of Rs.2033.83 lakhs as against turnover of Rs.3333.19 lakhs of the previous year. The operations during the year have resulted in a loss of Rs.340.35 lakhs as against the loss of Rs.354.46 lakhs in previous year. The Company's operations have been affected due to insufficient working capital funds.
3. CHANGE IN SHARE CAPITAL
There is no change in Share Capital of the company during the year under review.
Your Directors does not propose to carry any amount to General Reserve Account as the Company has incurred losses during the financial year.
In view of losses incurred by the Company during the year under review the Board is unable to recommend dividend.
6. EXPANSION & MODERNISATION
Modernization and expansion shall take place in line with technological developments that take place in the industry.
7. FUTURE OUTLOOK
The Company future outlook is expected to be challenging in future in view of change in the global economic situation..
8. CORPORATE GOVERNANCE
The report on Corporate Governance is not being enclosed to this report in view of the relaxation under regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review as stipulated under Regulation 34 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) 2015 is presented in a separate section forming part of the Annual Report as Annexure - IV.
10. ENVIRONMENT AND POLLUTION CONTROL
The manufacturing facility has obtained environmental clearance from the Pollution Control Board concerned and is in compliance with all current environmental legislation. As an integral part of its environment protection drive the Company ensures the very minimum quantity of generation of waste low emission levels and low noise pollution levels during operations of its manufacturing facility.
11. DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. RETIREMENT BY ROTATION
Pursuant to the provision of Section 152 of the Companies Act 2013 Sri Rajender Kumar Agarwal (DIN No. 00041892) Director will retire at the ensuing Annual General Meeting and being eligible offers himself for reappointment. The Board recommends his reappointment
B. EVALUATION OF THE BOARD'S PERFORMANCE
In compliance with the Companies Act 2013 and as per the Listing Regulations the performance evaluation of the Board and of its Committee was carried out during the year under review.
The Directors evaluation was broadly based on the parameters such as understanding of the Company's vision and objective skills knowledge and experience participation and attendance 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 the Directors individually as well as evaluation of the working of its Board Committees. A structured questionnaire was prepared covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees Board Culture execution and performance of specific duties obligations and governance.
A meeting of the Independent Directors was also held which reviewed performance of non-independent directors performance of the board as a whole and performance of the Chairman after taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors at which the performance of the board its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board excluding the independent director being evaluated.
C. DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors of the Company have given declaration stating that they meet the criteria of independence as provided under Companies Act 2013.
D. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company has formulated a familiarization program for Independent Directors to provide insights into the Company's manufacturing marketing finance and other important aspects to enable the Independent Directors to understand its business in depth and contribute significantly to the Company. The Company Secretary briefs the Director about their legal and regulatory responsibilities as a Director. The details of such program are available on the Company's website fwww.suryavanshi.com)
12. BOARD AND THEIR COMMITTEES
1. BOARD OF DIRECTORS
a) Composition and Number of Board Meetings:
As on 31 stMarch 2019 the board of Directors comprises of 4 (Four) Directors of these 1 (One) is Executive Director and 3 (Three) are Independent Directors. The Chairman is being appointed on each Board Meeting and Annual General Meeting
The Board of Directors of the Company met Four (4) times during the year i.e. on 30.05.2018 14.08.2018 14.11.2018 and 05.02.2019.
b) Disclosure of relationships between directors inter-se:
There is no inter-se relationship between Board Members.
2. AUDIT COMMITTEE
The Audit Committee comprises of Sri Surender Kumar Agarwal (Chairman) Sri Manish Gupta and Sri Rajender Kumar Agarwal as other members. All the recommendations made by the Audit Committee were accepted by the Board.
During the financial year ended March 31 2019 - Four (4) Audit Committee Meetings were held on 30.05.2018 14.08.2018 14.11.2018 and 05.02.2019.
3. STAKEHOLDERS' RELATIONSHIP
Your company has constituted a Stakeholders' Relationship Committee to specifically look into the mechanism of redressal of grievances of shareholders and other security holders.
The Stakeholders Relationship Committee comprises of Sri Surender Kumar Agarwal and Sri Rajender Kumar Agarwal.
Sri Surender Kumar Agarwal (Chairman) is the Non-Executive Director heading the Committee and Sri B. Somasekhara Rao CFO & Company Secretary is the compliance office of the Company
Details of the complaint received and redressed during the year under review are as follows:
|1 No. of Complaints received for the 4th Quarter||NIL|
|2 No. of Complaints received for the Year ended 31st March 2019||NIL|
|3 Number not solved to the satisfaction of shareholders||NIL|
|4 Number of pending complaints||NIL|
13. AUDITORS & AUDITORS' REPORT
A. STATUTORY AUDITORS
M/s K.S.Rao & Co. Chartered Accountants Hyderabad (ICAI Firm Regn. No.003l09S) were appointed as Statutory Auditorsin the AGM held on 29th September 2017 for a period of 5 years until the conclusion of 43rd AGM.
Ministry of Corporate Affairs vide its notification dated May 7 2018 has done away with the requirement of seeking ratification of appointment of statutory auditors by members at each AGM. Accordingly no such item has been considered in notice of the 40th AGM.
Following are the replies/clarifications in respect of the observations made by the statutory auditors in their audit report.
The management is of the considered opinion that the liabilities with the banks would be settled in view of the One Time Settlement (OTS)sanction letters issued by them to the Company. Company plans to generate the funds by sale of assets to meet the OTS liability. Company also plans to diversify the operations and generate future cash flows. Thus the Company is confident of settling the statutory liabilities.
For the reasons stated above company's accounts have been prepared on going concern basis.
Interest on bank loans was not provided in view of One Time Settlement Sanction letters issued by them to the company for settlement of liabilities at a percentage of principal liability only. There fore recognizing interest liability in the books did not arise.
With reference to the observation made under the head Evaluation of uncertain tax positions the note No. 40 disclosing the contingent liabilities is self explanatory.
With reference to the Auditors' observations on Note Nos. 414344 to the financial statements the Board considers the respective notes themselves are self explanatory.
B. SECRETARIAL AUDITOR
During the year the Company has appointed M/s NVSS Suryanarayana Rao Practicing Company Secretaries as Secretarial Auditor in compliance with the provision of Section 204 of the Companies Act 2013.The Secretarial Audit report in form MR-3 for the financial year ended 31st March 2019 is annexed herewith as Annexure I to this Report. The Secretarial Audit Report does not contain any qualification or adverse remark.
14. DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information and explanations obtained by them your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act 2013:
(a) in the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company and that such internal financial controls are adequate and were operating effectively; and
(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
15. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters Directors Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.
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 in nature. A Statement of all related party transactions is presented before the Audit Committee and the Board on a quarterly basis specifying the nature value and terms and conditions of the transactions. The Policy on materiality of related party transactions as approved by the Board may be accessed on the Company's website at http:// www.suryavanshi.com/policy-policy.html.
Your Directors draw attention of the members to Note 35 to the financial statement which sets out related party disclosures. . Particulars of Contracts or Arrangements with Related parties referred to in Section 188(1) in Form AOC- 2 is enclosed to this report in Annexure V.
16. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars relating to conservation of energy technology absorption foreign exchange earnings and outgo required to be given pursuant to the provisions of Section 134 of the Companies Act 2013 read with the Companies (Account) Rules 2014 is annexed hereto and marked Annexure II and forms part of this Report.
17. INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to financial statements. During the year such controls were tested and no reportable material weakness in the design or operation was observed.
18. INDIAN ACCOUNTING STANDARDS (IND AS)
The Ministry of Corporate Affairs vide its notification dated 16.02.2015 has notified the Companies (Indian Accounting Standard) Rules 2015. In pursuance of this notification the company has adopted IND AS with effect from 1 stApril 2017.
19. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required pursuant to Section 197(12) of Companies Act 2013 read with Rule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of the employees of the Company will be provided upon request. In terms of Section 136 of the Act the Report and Accounts are being sent to the members and others entitled thereto excluding the information on employees' particulars which is available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company upto the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof such member may write to the Company Secretary in this regard.
20. POLICY ON SEXUAL HARASSMENT:
The Company has in place a policy on Prevention of Sexual Harassment of Employees at workplace in accordance with The Sexual harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. Internal Compliant Committee has been set to redress complaints received regarding sexual harassment.
During the year under review the Company has not received any complaints pertaining to sexual harassment.
21. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The Company has not made any loan given guarantee or provided security pursuant to the provisions of Section 186 of Companies Act 2013. The details of investments made by the Company pursuant to the provisions of Section 186 of Companies Act 2013 is provided in Note 7 to the financial statement.
A. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure III to this Report.
B. WHISTLE BLOWER POLICY
The Company has in place a Whistle Blower Policy for vigil mechanism for the directors and employees to report genuine concerns to the management about unethical behavior fraud violation of Company's code of conduct and provides adequate safeguards against victimization of persons who use such mechanism. The Policy on vigil mechanism may be accessed on the Company's website at the link: http://www.suryavanshi.com/whistle- blower-policy.html. There were no complaints received during the year 2018-19.
Your Directors state that no disclosure or reporting is required in respect of the following 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(1) of the Companies Act 2013.
d. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.
The Board of Directors is pleased to place on record their appreciation for the co-operation and support extended by All Financial Institutions Banks and various State and Central Government Agencies.
The Board would also like to thank the Company's shareholders customers suppliers for the support and the confidence which they have reposed in the management. The Board place on record its appreciation for the contribution made by the employees at all levels and for their hard work solidarity co-operation and support.
|By order of the Board|
|For Suryavanshi Spinning Mills Limited|
|Surender Kumar Agarwal|