We have pleasure in presenting the 36th Annual Report on the business
and operations of Company and Financial Results for the year ended 31st
1. FINANCIAL RESULTS Rs. In lakhs
Turnover Revenue 10787.92 11443.70
Gross Profit before 642.54 780.36
financial charges &
Less: Depreciation 173.33 289.15
Financial charges 440.17 481.50
Profit / (Loss) before 29.04 9.71
Tax expenses - -
Profit / (Loss) after 29.04 9.71
The Company achieved Total Revenue of Rs. 10787.92 Lakhs (including
Other Income of Rs. 152.83 lakhs) and achieved profit after tax of Rs.
29.04 Lakhs for the Year ended 31st March, 2015 as against Total
Revenue of Rs. 11443.70 lakhs (including Other Income of Rs. 150.63
lakhs) and profit after tax of Rs. 9.71 Lakhs for the Year ended 31st
March, 2014. Non-availability of quality power, fluctuations in cotton
prices and currency fluctuation (depreciation in Euro) have affected
the performance of the Company.
3. SHARE CAPITAL
The authorized capital of the Company as on 31st March, 2015 was Rs.
35,25,00,000/- divided into 3,52,50,000 equity shares of Rs. 10/- each
and paid-up capital was Rs. 4,90,85,760/- divided into 49,08,576 equity
shares of Rs. 10/- each.
In view of insufficient profits for the year under review, the Board is
unable to recommend dividend.
During the year under review the company''s exports were Rs. 22.49
Crores as against Rs. 26.89 crores of the previous financial year.
Steep fluctuations of cotton prices and depreciation of Euro have
affected the exports.
6. EXPANSION & MODERNISATION
Modernization and technological up-gradation programs continue in the
Company to maintain competitiveness and achieve better quality.
Company plans to modernize by adding balancing equipment with a capital
cost of about Rs. 95.32 lacs. Stringent cost control measures remain
in place in all possible areas and are regularly reviewed.
7. FUTURE OUTLOOK
The Company''s efforts in development of new value added products are
expected to yield better results. The company has further plans to
modernize/ expand its operations at its spinning unit. In the bleached
cotton business, the Company plans to produce new products such as
surgical cotton rolls and cotton buds. This will help in good value
addition to its product range and improve the prospects of the company
in the coming years.
8. CORPORATE GOVERNANCE
A separate report on Corporate Governance is enclosed as a part of this
Annual Report. A certificate from the Auditors of the Company regarding
compliance with Corporate Governance norms stipulated under Clause 49
of the Listing Agreement is annexed to the Report on Corporate
9. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management''s Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement is presented in
a separate section forming part of the Annual Report.
10. ENVIRONMENT AND POLLUTION CONTROL
The manufacturing facility has obtained environmental clearance from
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 provisions of the Companies Act, 2013, Sri Badrinarayan
Agarwal (DIN 00042123), Director will retire at the ensuing Annual
General Meeting and being eligible, offers himself for reappointment.
The Board recommends his re-appointment
Smt Sushma Gupta (DIN 07147330) was appointed as an Additional Director
who shall hold office till the date of this Annual General Meeting. A
member proposed her candidature for appointment at the ensuing Annual
In terms of the Companies Act, 2013 Smt Sushma Gupta is proposed to be
appointed as independent Director for a term of 5 years, not liable for
retirement by rotation.
Brief resume of the Directors retiring by rotation and independent
Director, nature of their expertise in specific functional areas and
names of public companies in which they hold directorships as
stipulated under clause 49 of the listing agreement with the Stock
Exchange are given as Annexure to the Notice.
Sri B. Somasekhara Rao was appointed as Chief Financial Officer of the
Company w.e.f. 30th May, 2014 and Company Secretary w.e.f. 9th
During the year under review, Sri Jeetender Kumar Agarwal and Sri
Devender Kumar Agarwal resigned from the directorship of the Company
from 31st March, 2015 and Sri B.R.S.Reddy, Vice President (Corp.
Affairs) & Company Secretary resigned w.e.f. 7th February, 2015 in
terms of the restructuring of the organization and pursuant to the
sanctioned scheme of demerger. Sri Pankaj Goel, Independent Director
also resigned from the Directorship from 31st March, 2015 citing
personal pre-occupations. The Board places on record its appreciation
for the valuable services and guidance rendered by Sri Jeetender Kumar
Agarwal, Sri Devender Kumar Agarwal, Sri Pankaj Goel and Sri
B.R.S.Reddy during their tenure as Director on the Board and as Company
D. EVALUATION OF THE BOARD''S PERFORMANCE
During the year, the Board adopted a formal performance evaluation
policy for evaluating its performance and as well as that of its
Committees and individual Directors, including the Chairman of the
Board. The exercise was carried out through a structured evaluation
process covering various aspects of the Board''s functioning such as
composition of the Board & committees, experience & competencies,
performance of specific duties & obligations etc. Separate exercise
was carried out to evaluate the performance of individual Directors
including the Board, Chairman who were evaluated on parameters such as
attendance, contribution at the meetings and otherwise, independent
judgement etc. The evaluation of the Independent Directors and that of
the Chairman was carried out by the entire Board excluding the Director
being evaluated and the evaluation of Non-Independent Directors was
carried out by the Independent Directors. A separate meeting of
Independent Directors was also held during the year wherein the
performance of Chairman, Board, Executive Directors was evaluated.
The Directors were satisfied with the evaluation results, which
reflected the overall engagement of the Board and its Committees with
E. REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration
Committee framed a policy for selection and appointment of Directors,
Senior Management and their remuneration. The Remuneration Policy is
attached to this report as Annexure I.
F. 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.
G. FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS
Each newly appointed Independent Director is taken through a formal
induction program including the presentation from the Managing Director
on the Company''s manufacturing, marketing, finance and other important
aspects. The Company Secretary briefs the Director about their legal
and regulatory responsibilities as a Director. The induction for
Independent Directors include interactive sessions with Executive
Committee Members, Business and Functional Heads, visit to the
manufacturing site etc. The details of such program are available on
company''s website (www.suryavanshi.com).
12. AUDITORS'' REPORT
A. STATUTORY AUDITORS
The Statutory Auditors of the Company, M/s. Brahmayya & Co, Chartered
Accountants, Hyderabad will retire at the conclusion of ensuing Annual
General Meeting and are eligible for reappointment. They have confirmed
their eligibility under Section 141 of the Companies Act, 2013 and the
Rules framed there under for reappointment as Auditors of the Company.
As required under Clause 49 of the Listing Agreement, the auditors have
also confirmed that they hold a valid certificate issued by the Peer
Review Board of the Institute of Chartered Accountants of India. The
Statutory Auditors'' Report does not contain any reservation,
qualification or adverse remark.
B. SECRETARIAL AUDITOR
During the year, the Company has appointed M/s R & A Associates,
Practising Company Secretaries as Secretarial Auditor. The Secretarial
Audit report for the financial year 2014-15 is annexed herewith as
Annexure II to this Report. The Secretarial Audit Report does not
contain any reservation, qualification or adverse remark.
C. COST AUDITOR
Pursuant to Section 148 of Companies Act, 2013, the Board of Directors
on the recommendation of Audit Committee appointed Aruna Prasad & Co.,
Cost Accountants as the Cost Auditors of the Company for the year
2015-16 and has recommended the remuneration to the shareholders for
their ratification at the ensuing Annual General Meeting. The Auditor
has confirmed that the appointment is within the prescribed limits and
also certified that they are free from any disqualifications.
13. 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
(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
(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.
14. 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.
The Policy on materiality of related party transactions as approved by
the Board may be accessed on the Company''s website.
Your Directors draw attention of the members to Note 30 to the
financial statement which sets out related party disclosures.
15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO:
The particulars relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo, is annexed and marked
Annexure III and forms part of this Report.
16. 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
17. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:
The information required pursuant to Section 197(12) of Companies Act,
2013 read with Rule 5(1) 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.
No employee was in receipt of remuneration in excess of the limits
prescribed under Rule 5(2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 and hence the
disclosure as required under Rules 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is
18. POLICY ON SEXUAL HARASSMENT:
The Company has adopted 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.
During the year under review, the Company has not received any
complaints pertaining to sexual harassment.
19. 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 10 to the
A. EXTRACT OF ANNUAL RETURN
Extract of Annual Return of the Company is annexed herewith as Annexure
IV to this Report.
B. COMPOSITION OF AUDIT COMMITTEE
The Audit Committee comprises Sri R. Surender Reddy (Chairman), Sri
Surender Kumar Agarwal, Sri Manish Gupta and Sri Rajender Kumar Agarwal
as other members. All the recommendations made by the Audit Committee
were accepted by the Board.
C. VIGIL MECHANISM
The Company has implemented a vigil mechanism policy to deal with
instance of fraud and mismanagement, if any. It provides for the
directors and employees to report genuine concerns 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
D. NUMBER OF BOARD MEETINGS
The Board of Directors of the Company met Ten (10) times during the
year. For further details, please refer report on Corporate Governance.
E. LISTING FEES
The Company confirms that it has paid listing fees for the year to BSE
Limited where its shares are listed.
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
c. 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
of the co-operation and support extended by All India 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
of the contribution made by the employees at all levels for their hard
work, solidarity, co-operation and support.
By order of the Board
For Suryavanshi Spinning Mills Limited
Place : Secunderabad B.N.Agarwal
Date : 16.05.2015 Executive Chairman