SURYAVANSHI SPINNING MILLS LIMITED
We have pleasure in presenting the 42nd Directors Report on the business andoperations of Company and Financial Results for the year ended 31st March2021.
1. STATE OF AFFAIRS & FINANCIAL PERFORMANCE
The financial highlights of the company are as follows
Rs. In lakhs
| ||2020-2021 ||2019-2020 |
|Turnover Revenue ||4330.30 ||2586.89 |
|Gross Profit before financial charges & depreciation & exceptional items ||390.15 ||(432.96) |
|Less: Depreciation ||173.30 ||172.12 |
|Financial charges ||179.61 ||242.66 |
|Exceptional items ||2.98 ||760.28 |
|Profit / (Loss) before taxation ||40.21 ||(87.46) |
|Tax expenses ||117.32 ||- |
|Profit / (Loss) after taxation ||(77.11) ||(87.46) |
During the year under review the company recorded total turnover of Rs.4330.30 lakhsas against turnover of Rs.2586.89 lakhs of the previous year. The operations during theyear have resulted in a loss of Rs.77.11 lakhs as against the loss of Rs.87.46 lakhs inprevious year. The Company's maximum revenue generate through sale of yarn so as higherturnover is recorded in the current year then compared to last year and the same isexpected to improve in future.
3. CHANGE IN SHARE CAPITAL
There is no change in Share Capital of the company during the year under review.
4. IMPACT OF COVID-19 ON BUSINESS
The COVID-19 pandemic developed rapidly into a global crisis forcing governments toenforce lock-downs of all economic activity. For the Company the focus immediatelyshifted to ensuring the health and wellbeing of all employees and ensuing businesscontinuity. Implementation of adequate policies and procedures to enable work fromhome' for employees to work remotely and securely and ensure Business Continuity Plan.Given that employee safety and government directives operations at all the plants of thecompany. Ybur Company has taken measures to maintain adequate financial liquidity and toensure availability of raw materials and needed resources for sustained operations.
5. CHANGE IN THE NATURE OF BUSINESS IF ANY:
There was no change in nature of business activity during the year.
6. REVISION OF ANNUAL FINANCIAL STATEMENTS
There was no case of revision in financial statement during the year.
Your Directors does not propose to carry any amount to General Reserve Account as theCompany has incurred losses during the financial year.
In view of losses incurred by the Company during the year under review the Board isunable to recommend dividend.
9. EXPANSION & MODERNISATION
Modernization and expansion shall take place in line with technological developmentsthat take place in the industry.
10. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR
There are no material changes and commitments affecting financial position of thecompany which have occurred between the end of the financial year of the company to whichfinancial statements relate and date of the report.
11. FUTURE OUTLOOK
The Company future outlook is expected to be bright in future in view of change inoperations.
12. CORPORATE GOVERNANCE
The report on Corporate Governance is not being enclosed to this report in view of therelaxation under regulation 15(2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
13. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management's Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 read with Schedule V of SEBI (Listing Obligations and DisclosureRequirements) 2015 is presented in a separate section forming part of the Annual Reportas Annexure - III.
14. LISTING AT STOCK EXCHANGE
The Equity shares of the Company are listed on Bombay Stock Exchange Limited Mumbaiand the Listing Fee for the year 2020-21 has been duly paid.
15. ENVIRONMENT AND POLLUTION CONTROL
The manufacturing facility has obtained environmental clearance from the PollutionControl Board concerned and is in compliance with all current environmental legislation.As an integral part of its environment protection drive the Company ensures the veryminimum quantity of generation of waste low emission levels and low noise pollutionlevels during operations of its manufacturing facility.
16. DEPOSITORY SYSTEM
Your Company's shares are tradable compulsorily in electronic form and your Company hasconnectivity with both the Depositories i.e. National Securities Depository Limited (NSDL)and Central Depository Service (India) Limited (CDSL). As per the SEBI (ListingObligations & Disclosure Requirements) (Fourth Amendment) Regulations 2018 videGazette notification dated June 8 2018 & 30th November 2018 mandated that Sharetransfer shall be mandatorily carried out in dematerialized form only w.e.f. from April12020. In view of the numerous advantages offered by the Depository System members arerequested to avail the facility of Dematerialization of the Company's shares on either ofthe Depositories mentioned as aforesaid.
17. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant provision of Section 152 of the Companies Act 2013 Sri Rajender KumarAgarwal (DIN 00041892) Director will retire at the ensuing Annual General Meeting andbeing eligible offers himself for re-appointment. The Board recommends hisre-appointment.
A. EVALUATION OF THE BOARD'S PERFORMANCE
In compliance with the Companies Act 2013 and as per the Listing Regulations theperformance evaluation of the Board and of its Committee was carried out during the yearunder review.
The Directors evaluation was broadly based on the parameters such as understanding ofthe Company's vision and objective skills knowledge and experience participation andattendance 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 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 into 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.
B. DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors of your Company have given a declaration pursuant to Section149(7) of the Companies Act 2013 and Regulation 25(8) SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 affirming compliance to the criteria ofIndependence as laid down under Section 149(6) of the Companies Act 2013 and Regulation16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Based on the declaration(s) of Independent Directors the Board of Directors recordedits opinion that all Independent Directors are independent of the Management and havefulfilled the conditions as specified in the Companies Act 2013 and the Rules made thereunder.
Independent Directors not liable to retire by rotation in terms of Section 149( 13) ofthe Act.
C. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
The Company has formulated a familiarization program for Independent Directors toprovide insights into the Company's manufacturing marketing finance and other importantaspects to enable the Independent Directors to understand its business in depth andcontribute significantly to the Company. The Company Secretary briefs the Director abouttheir legal and regulatory responsibilities as a Director. The details of such program areavailable on the Company's website (www.suryavanshi.com)
D. KEY MANAGERIAL PERSONNEL:
Pursuant to the Section 203 of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. The Key ManagerialPersonnel of the Company as on March 312021 are:
Mr. Rajender Kumar Agarwal Managing Director & Chief Financial Officer
Ms. Ashu Company Secretary & Compliance Officer (resigned w.e.f.05.08.2021)
E. DISQUALIFICATIONS OF DIRECTORS
During the year declarations received from the Directors of the Company pursuant toSection 164 of the Companies Act 2013. The Board appraised the same and found that noneof the director is disqualified for holding office as director.
Further the Certificate from Practicing Company Secretary has been obtained whocertified that none of the directors of the company disqualified for holding office asdirector of the Company is enclosed with this Board Report.
Mr. Surender Kumar Agarwal was appointed as an Additional Director w.e.f 30.09.2019under category of Independent Director who shall hold office till the date of this AnnualGeneral Meeting. But due to personal and unavoidable circumstances Mr. Surender KumarAgarwal file his Resignation from the post of Additional Director under category ofIndependent Director of the Company w.e.f 26th July 2020 and Board of Directors acceptsthe same.
Pursuant to sec149 of the Companies Act 2013 Shri Uttam Gupta was appointed as anIndependent Director of the company to hold an office for 5 consecutive year from previousannual general meeting held on 02.12.2020
18. BOARD AND THEIR COMMITTEES
1. BOARD OF DIRECTORS
a) Composition and Number of Board Meetings:
As on 3lstMarch 2021 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 an Executive Director.
The Board of Directors of the Company met Six (06) times during the year i.e. on30/06/2020 18/07/2020 15/09/2020 28/09/2020 13/11/2020 and 13/02/2021 The interveninggap between any two meetings was not more than 120 days as prescribed under the Act.
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 Rajender Kumar Agarwal Sri Uttam Gupta and SriManish Gupta as other members. All the recommendations made by the Audit Committee wereaccepted by the Board.
During the financial year ended March 312021 Four(4) times Audit Committee Meetingswere held 18/07/2020 15/09/2020 13/11/2020 and 13/02/2021
(* Mr. Surender Kumar Agarwal resigned & ceased to be member of the committeew.e.f 26.07.2020 and Mr. Uttam Gupta appointed as an Additional Independent Director andmember of the Audit Committee w.e.f 28.09.2020.)
3. NOMINATION & REMUNERATION COMMITTEE
The Nomination & Remuneration Committee comprises of Sri Manish Gupta SriRajender Kumar Agarwal. and Sri Uttam Gupta as other members. All the recommendations madeby the Nomination & Remuneration Committee were accepted by the Board.
During the financial year ended March 31 2021 - Two (2) times Nomination &Remuneration Committee Meetings were held on 15/09/2020 and 28/09/2020
(* Mr. Surender Kumar Agarwal resigned & ceased to be member of the committeew.e.f 26.07.2020 and Mr. Uttam Gupta appointed as an Additional Independent Director andmember of the Nomination & Remuneration Committee w.e.f 28.09.2020.)
4. STAKEHOLDERS' RELATIONSHIP COMMITTEE
Ybur company has constituted a Stakeholders' Relationship Committee to specificallylook into the mechanism of redressal of grievances of shareholders and other securityholders.
The Stakeholders Relationship Committee comprises of Sri Manish Gupta Sri RajenderKumar Agarwal and Sri Uttam Gupta
Details of the complaint received and redressed during the year under review are asfollows:
|1 No. of Complaints received for the 4th Quarter ||NIL |
|2 No. of Complaints received for the Year ended 31st March 2021 ||NIL |
|3 Number not solved to the satisfaction of shareholders ||NIL |
|4 Number of pending complaints ||NIL |
(* Mr. Surender Kumar Agarwal resigned & ceased to be member of the committeew.e.f 26.07.2020 and Mr. Uttam Gupta appointed as an Additional Independent Directorandmember of the Stakeholders' Relationship Committee w.e.f 28.09.2020.)
5. SEPARATE MEETING OF INDEPENDENT DIRECTOR:
During the year under review a separate meeting of Independent Directors was held on13.02.2021 And all Independent Directors present at the meeting.
19. NOMINATION AND REMUNERATION POLICY
The Board on the recommendation of the Nomination & Remuneration Committee framed apolicy for selection and appointment of Directors Senior Management and theirremuneration as required under Sec 178 of the Companies Act 2013 and Regulation 19(4)read with Schedule II of the SEBI (Listing Obligations and Disclosures Requirements)Regulations 2015
20. OTHER MANAGEMENT POLICES
The following policies are placed in company's website at https://www.suryavanshi.com
Policy for determination of materiality
Policy on code of conduct
Policy on Code of Fair disclosure
21. AUDITORS & AUDITORS' REPORT
A. STATUTORY AUDITORS
M/s K.S.Rao & Co. Chartered Accountants Hyderabad (ICAI Firm Regn. No.003109S)were appointed as Statutory Auditorsin the AGM held on 29th September 2017 fora period of 5 years until the conclusion of 43rd AGM.
The Company has received a certificate from the auditors confirming that theirappointment is in accordance with Section 139 read with Section 141 of the Act.
Ministry of Corporate Affairs vide its notification dated May 7 2018 has done awaywith the requirement of seeking ratification of appointment of statutory auditors bymembers at each AGM. Accordingly no such item has been considered in notice of the 42ndAGM.
Explanation to Auditor's Remark
Following are the replies / clarifications in respect of the observations made by thestatutory auditor in their audit report.
1. The management would like to bring to your notice that the cotton trading activitywas done by purchasing cotton from the cotton trader when the prices were lower due topandemic by purchasing against a confirmed contract of Cotton Corporation of India withthe extended delivery terms. Subsequently when the prices of cotton increase the same wassold to the same group who has cotton spinning mills in India.
2. The management is of the considered opinion that the interest provided towards duespayable to Andhra Bank toward One time settlement scheme or compromise proposal which thecompany has entered with Andhra Bank due to Covid-19 the company could not make 100%payment on or before 31.03.2020. The Company has already made a representation to the bankfor extending the period of One time settlement. The company has provided interest ofRs.118.25 Lakhs upto 31.03.2021. The Company has not provided interest of Rs. 686.92 Lakhstowards interest on outstanding loans since the account become NPA. The management isconfident it will complete the compromise proposal / one time Settlement entered withAndhra Bank would be amicably completed.
3. The management would like to clarify that there is a contradiction in books ofaccounts with respect to outstanding amount of loan granted by the RCFL. We have made therequest several times to RCFL for Statement of Reconciliation but not received yet.
Reporting of fraud by Statutory Auditors
There was no fraud in the Company which was required to be reported by statutoryauditors of the Company under sub-section (12) of section 143 of Companies Act 2013.
B. SECRETARIAL AUDITOR
During the year the Company has appointed M/s Yellapragada and Associates PracticingCompany Secretaries as Secretarial Auditor in compliance with the provision of Section 204of the Companies Act 2013 and Rule 9 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.The Secretarial Audit report in form MR-3 for thefinancial year ended 31st March 2021 is annexed herewith as Annexure I to thisReport. The Secretarial Audit Report does not contain any qualification or adverse remark.
C. INTERNAL AUDITOR
In compliance with the provisions of Section 138 of the Act read with Rule 13(1)(a) ofCompanies (Accounts) Rules 2014. The Board of Directors of the Company has appointed M/s.SLR & Associates Chartered Accountant as Internal Auditors to conduct Internal Auditof the Company for the Financial Year ended 31st March 2021.
22. DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(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 that 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;
(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; and
(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.
23. RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe 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 innature. A Statement of all related party transactions is presented before the AuditCommittee and the Board on a quarterly basis specifying the nature value and terms andconditions of the transactions. The Policy on materiality of related party transactions asapproved by the Board may be accessed on the Company's website athttp://www.suryavanshi.com/policy-policy.html.
Your Directors draw attention of the members to Note 38 to the financial statementwhich sets out related party disclosures. . Particulars of Contracts or Arrangements withRelated parties referred to in Section 188(1) in Form AOC- 2 is enclosed to this report inAnnexure IV.
24. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo required to be given pursuant to the provisions of Section 134of the Companies Act 2013 read with the Companies (Account) Rules 2014 is annexed heretoand marked Annexure II and forms part of this Report.
25. INTERNAL FINANCIAL CONTROLS
The Company has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial information.
The Company has in place adequate internal financial controls with reference tofinancial statements. The Company's internal control systems including internal financialcontrols are commensurate with the nature of its business and the size and complexity ofits operations and the same are adequate and operating effectively. These systems areperiodically tested and no reportable material weakness in the design or operation wasobserved. The Audit Committee reviews adequacy and effectiveness of the Company's internalcontrol system including internal financial controls.
26. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required pursuant to Section 197(12) of Companies Act 2013 read withRule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of the employees of the Company will be provided uponrequest. In terms of Section 136 of the Act the Report and Accounts are being sent to themembers and others entitled thereto excluding the information on employees' particularswhich is available for inspection by the members at the Registered Office of the Companyduring business hours on working days of the Company up to the date of the ensuing AnnualGeneral Meeting. If any member is interested in obtaining a copy thereof such member maywrite to the Company Secretary in this regard.
27. POLICY ON SEXUAL HARASSMENT:
The Company has in place a policy on Prevention of Sexual Harassment of Employees atworkplace in accordance with The Sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Internal Compliant Committee has been set to redresscomplaints received regarding sexual harassment.
During the year under review the Company has not received any complaints pertaining tosexual harassment.
28. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186:
The Company has not made any loan given guarantee or provided security pursuant to theprovisions of Section 186 of Companies Act 2013. The details of investments made by theCompany pursuant to the provisions of Section 186 of Companies Act 2013 is provided inNote 8 to the financial statement.
A. ANNUAL RETURN
Annual Return of the Company as on 31st March 2021 in accordance with Section 92(3)Section 134(3)(a) of the Companies Act 2013 read with Companies (Management andAdministration) Rules 2014 which can be accessed fromhttp://www.suryavanshi.com/financials.
B. Vigil Mechanism
The Company has a Whistle Blower Policy'/Vigil Mechanism' in place. The objectiveof the Vigil Mechanism is to provide the employees Directors customers contractors andother stakeholders of the Company an impartial and fair avenue to raise concerns and seektheir redressal in line with the Company's commitment to the highest possible standardsof ethical moral and legal business conduct and fair dealings with all its stakeholdersand constituents and its commitment to open communication channels. The Company is alsocommitted to provide requisite safeguards for the protection of the persons who raise suchconcerns from reprisals or victimization for whistle blowing in good faith. The Board ofDirectors affirms and confirms that no personnel have been denied access to the AuditCommittee. The Policy contains the provision for direct access to the Chairman of theAudit Committee in appropriate or exceptional cases..
The Policy on vigil mechanism cum Whistle Blower may be accessed on the Company'swebsite at the link: https://www.suryavanshi.com there were no complaints received duringthe year 2020-21.
C. Risk Management
The Company recognizes that risk is an integral and unavoidable component of businessand is committed to managing the risk in a proactive and efficient manner. The Company aspart of business strategy has in place a mechanism to identify assess monitor risks andmitigate various risks with timely action.
30. COMPLIANCE OF SECRETARIAL STANDARD
The Company has complied with all the applicable Secretarial Standards issued by TheInstitute of Company Secretaries of India and notified by the Central Government
Your Directors state that no disclosure or reporting is required in respect of thefollowing 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 theCompanies Act 2013.
d. During the year under review the Company has not given loan to any employee forpurchase of its own shares as per section 67(3) (c) of Companies Act 2013.
e. The Company has not issued shares under employee's stock options scheme pursuant toprovisions of Section 62 read with Rule 12 of Companies (Share Capital and Debenture)Rules 2014.
f. The Company has not issued sweat equity shares pursuant to provisions of Section 54read with Rule 8 of Companies (Share Capital and Debenture) Rules 2014 & SEBI (issueof sweat equity) Regulations 2002 during the Financial Yfear.
g. The Business Responsibility Reporting as required by Regulation 34(2) of the SEBI(Listing Obligations & Disclosure Requirements) Regulations 2015 is not applicableto your Company for the financial year ending March 312021.
h. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
i. Details in respect of frauds reported by the Auditors under section 143(12) otherthan those which are reportable to the Central Government as there were no such fraudsreported by the Auditors.
The Board of Directors is pleased to place on record their appreciation for theco-operation and support extended by All Financial Institutions Banks and various Stateand Central Government Agencies.
The Board would also like to thank the Company's shareholders customers suppliers forthe support and the confidence which they have reposed in the management. The Board placeon record its appreciation for the contribution made by the employees at all levels andfor their hard work solidarity co-operation and support.
| ||By order of the Board |
| ||For Suryavanshi Spinning Mills Limited |
| ||R.K.Agarwal |
| ||Managing Director |
| ||DIN:00041892 |
|Place: Secunderabad ||Manish Gupta |
|Date: 14.08.2021 ||Director |
| ||DIN: 00526638 |