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Suryavanshi Spinning Mills Ltd.

BSE: 514140 Sector: Industrials
NSE: SURYVANSPG ISIN Code: INE431C01023
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Suryavanshi Spinning Mills Ltd. (SURYVANSPG) - Director Report

Company director report

Dear Shareholders

We have pleasure in presenting the 39th Annual Report on the business and operations ofCompany and Financial Results for the year ended 31st March 2018.

1. F INANCIAL RESULTS

Rs. In lakhs

2017-2018 2016-2017
Turnover Revenue 3333.19 6601.35
Gross Profit before financial charges & depreciation & exceptional items (355.03) (404.34)
Less: Depreciation 191.17 182.09
Financial charges 70.99 600.84
Exceptional items -262.72 -
Profit / (Loss) before taxation (354.47) (1187.27)
Tax expenses - 92.05
Profit / (Loss) after taxation (354.47) (1279.32)

2. OPERATIONS

During the year under review the company recorded total turnover of Rs.3333.19 lakhsincluding job work charges collected as against turnover of Rs.6611.35 lakhs of theprevious year. The operations during the year have resulted in a loss of Rs.354.47 lakhsas against the loss of Rs.1279.32 lakhs in previous year. The Company’s operationshave been affected due to insufficient working capital funds pending sanction of bankingfacilities the mismatch in selling prices of finished goods and raw material prices.Demonetization of high value currency and intermittent imports of polyster yarn leading todepressed domestic markets have also adversely affected the company during the year.

3. CHANGE IN SHARE CAPITAL

There is no change in Share Capital of the company during the year under review.

4. DIVIDEND

In view of losses incurred by the Company during the year under review the Boardis unable to recommend dividend.

5. EXPORTS

During the year under review the company’s exports were Rs. 2.68 crores asagainst Rs. 7.84 crores of the previous financial year.

6. EXP ANSION & MODERNISATION

Modernization and expansion shall take place in line with technologicaldevelopments that take place in industry.

7. FUTURE OUTLOOK

The company plans to focus on production of value added yarns i.e. slub yarnsinjection yarns multicount / multi twist yarns two/three ply yarns for sewing threadapplications fancy yarns like neps and linen effects. These applications have alreadybeen installed partially started production and established markets. Company wants toscale up the operations further. Company also wants to start Course yarns like NE 20 forknitting and sewing thread application as a future strategy.

8. CORPORATE GOVERNANCE

The report on Corporate Governance is not being enclosed to this report in view ofthe relaxation under regulation 15(2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management’s Discussion and Analysis Report for the year under review asstipulated under Regulation 34 read with Schedule V of SEBI (Listing Obligations andDisclosure Requirements) 2015 is presented in a separate section forming part of theAnnual Report as

Annexure IV.

10. 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.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. APPOINTMENTS AND RESIGNATIONS

Sri Badrinarayan Agarwal Executive Chairman and Whole–time Director resigned fromBoard with effect from 27th May 2017 due to health issues and left the world for hisheavenly abode on 29th November 2017. The Board deeply regrets his sad demise and placeson record its sincere appreciation for the contribution rendered by Late Sri BadrinarayanAgarwal

Founder and Promoter of the Company. There were no appointments during the year underreview.

B. RETIREMENT BY ROTATION

Pursuant to the provision of Section 152 of the Companies Act 2013 Sri RajenderKumar

Agarwal (DIN No. 00041892) Director will retire at the ensuing Annual General Meetingand being eligible offers himself for reappointment. The Board recommends hisreappointment

C. 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 ofits Committee was carried out during the year under review. The Directors evaluation wasbroadly based on the parameters such as understanding of the Company’s vision andobjective 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 theDirectors individually as well as evaluation of the working of its Board Committees. Astructured questionnaire was prepared covering various aspects of the Board’sfunctioning such as adequacy of the composition of the Board and its Committees BoardCulture execution 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.

D. DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors of the Company have given declaration stating thatthey meet the criteria of independence as provided under Companies Act 2013.

E. 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 otherimportant aspects to enable the Independent Directors to understand its business in depthand contribute significantly to the Company. The Company Secretary briefs the Directorabout their legal and regulatory responsibilities as a Director. The details of suchprogram are available on the Company’s website (www.suryavanshi.com)

2. BO ARD AND THEIR COMMITTEES

1. BOARD OF DIRECTORS

a) Composition and Number of Board Meetings:

As on 31st March 2018 the board of Directors comprises of 4 (Four) Directors ofthese 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 Five (5) times during the year i.e. on27.05.2017 01.09.2017 11.09.2017 13.12.2017 and 14.02.2018.

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 recommendationsmade by the Audit Committee were accepted by the Board.

During the financial year ended March 31 2017 Four (4) Audit Committee Meetings wereheld on 27.05.2017 11.09.2017 13.12.2017 and 14.02.2018.

3. NOMINATION & REMUNERATION COMMITTEE

The company follows a policy on remuneration of Directors and Senior ManagementEmployees. The policy is approved by the Nomination & Remuneration Committee and theBoard. The Nomination and Remuneration comprises of Sri Surender Kumar Agarwal

(Chairman) Sri Manish Gupta and Smt

Sushma Gupta as other members. All the recommendations made by the Nomination andRemuneration Committee were accepted by the Board.

During the financial year ended March 31 2018 Two (2) Nomination and RemunerationCommittee Meetings were held on 01.09.2017 and 14.02.2018.

4. ST AKEHOLDERS’

COMMITTEE

Your company has constituted a Stakeholders’

Relationship Committee to specifically look into the mechanism of redressal ofgrievances of shareholders and other security holders.

Sri Surender Kumar Agarwal is the Non-Executive Director heading the Committee and SriB. Somasekhara Rao CFO & Company Secretary is the compliance office of the CompanyDetails of the complaint received and redressed during the year under review are asfollows:

1 No. of Complaints received for the 4th Quarter 1
2 No. of Complaints received for the Year ended 31st March 2018 3
3 Number not solved to the satisfaction of shareholders NIL
4 Number of pending complaints NIL

12. A UDITORS & AUDITORS’ REPORT

A. ST ATUTORY AUDITORS

M/s K. S. Rao & Co. Chartered Accountants Hyderabad (ICAI Firm Regn.No.003109S) were appointed as Statutory Auditors in the AGM held on 29th September 2017for a period of 5 years until the conclusion of 43rd AGM. Ministry of Corporate Affairsvide its notification dated May 7 2018 has done away with the requirement of seekingratification of appointment of statutory auditors by members at each AGM. Accordingly nosuch item has been considered in notice of the 39th AGM. In respect of the observationmade by the Statutory Auditors in the Auditors’ Report regarding note No. 46 in notesto accounts the management is of the considered opinion based on their discussions withthe banks / financial institutions that with the implementation of settlement of theloans and a rehabilitation package being worked out the operations of the company will benormalized and the company will be able to meet its liabilities to the banks and dischargeits statutory dues in the near future.

With reference to auditor’s observations on note No. 43 44 47 & 48 to thefinancial statements the Board considers the note itself is self-explanatory.

B. SEC RETARIAL AUDITOR

During the year the Company has appointed

M/s NVVS Suryanarayana Rao Practicing Company Secretaries as Secretarial Auditor incompliance 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 2018 is annexedherewith as Annexure I to this Report. The Secretarial

Audit Report does not contain any qualification or adverse remark.

13. 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 the applicable accounting standards had beenfollowed along with proper explanation relating to material departures;

(b) the directors had selected such policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the company for that period;

(c) the directors had taken proper and care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual on a going concern basis;

(e) the directors had laid down internal controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

14. RELA TED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial yearwere on arm’s length basis and were in the ordinary course of business. There are nomaterially significant made by the Company with Promoters Directors Key ManagerialPersonnel or other designated persons which may have a potential conflict with theinterest of the Company at large. Thus disclosure in Form AOC-2 is not required.

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 at http://www.suryavanshi.com/policy-policy.html.

Your Directors draw attention of the members to accountingNote 40 to the financialstatement which sets out related party disclosures.

15. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to conservation of energy sufficienttechnologyabsorption foreign exchange earnings and outgo required to be given pursuant to theprovisions 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.accounts

16. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial financialcontrols withreference to financial statements.

During the year such controls were tested and no reportable material weakness in thedesign or operation was observed.

17.INDIAN ACCOUNTING STANDARDS (IND AS)

The Ministry of Corporate Affairs vide its notification dated 16.02.2015 hasnotified the Companies (Indian Accounting Standard) Rules 2015. In pursuance of thisnotification the company has adopted IND AS with effect from 1st April 2017.

18. PARTICULARS OF EMPLOYEES RELATED DISCLOSURES:

The information required pursuant to Section 197(12) of Companies Act 2013 readwith Rule 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’particulars which is available for inspection by the members at the

Registered Office of the Company during business hours on working days of the Companyupto the date of the ensuing Annual General Meeting. If any member is interested inobtaining a copy thereof such member may write to the Company Secretary in this regard.

19. POLICY ON SEXUAL HARASSMENT:

The Company has in place a policy on Prevention of Sexual Harassment of Employeesat workplace in accordance with The Sexual harassment of Women at Workplace (PreventionProhibition and Redressal)

Act 2013. Internal Compliant Committee has been set to redress complaints receivedregarding sexual harassment.

During the year under review the Company has not received any complaints pertaining tosexual harassment.

20. P ARTICULARS OF LOANS GUARANTEES INVESTMENTS UNDER SECTION 186:

The Company has not made any loan given guarantee or provided security pursuant tothe provisions of Section 186 of Companies Act 2013. The details of investments made bythe Company pursuant to the provisions of Section 186 of Companies Act 2013 is providedin Note 7 to the financial statement.

21. DISCLOSURES:

A. EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is annexed herewith as Annexure IIIto this Report.

B. WHISTLE BLOWER POLICY

The Company has in place a Whistle Blower Policy for vigil mechanism for thedirectors and employees to report genuine concerns AND to the management aboutunethical behavior fraud violation of Company’s code of conduct and providesadequate safeguards against victimization of persons who use such mechanism. The Policy onvigil mechanism may be accessed on the Company’s website at the link:http://www.suryavanshi.com/whistle-blower-policy.html. There were no complaints receivedduring the year 2017-18.

22. GENERAL

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 nosubsidiaries joint ventures or associate companies. c. The Company is not required tomaintain cost records under Section 148(1) of the Companies

Act 2013. d. No significant by the Regulators or Courts or Tribunals which impact thegoing concern status and Company’s operations in future.

23. A CKNOWLEDGEMENTS:

The Board of Directors is pleased to place on record their appreciation for theco-operation and support OR extended by All India Financial Institutions Banks andvarious State and Central Government Agencies.

The Board would also like to thank the Company’s shareholders customerssuppliers 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 atall levels and for their hard work solidarity co-operation and support.

By order of the Board
For Suryavanshi Spinning Mills Limited
R.K.Agarwal
Managing Director
Place: Secunderabad Surender Kumar Agarwal
Date: 14.08.2018 Director