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Sutlej Textiles and Industries Ltd.

BSE: 532782 | NSE: SUTLEJTEX |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE645H01027 | SECTOR: Textiles - General

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Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

TO THE MEMBERS,

SUTLEJ TEXTILES AND INDUSTRIES LIMITED

The Directors are pleased to present the Twelfth Annual Report, together with the audited financial statements of the Company for the year ended 31st March, 2017.

1. Financial Results

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014. The financial statements for the Financial Year ended March 31, 2017 are the Company''s first Ind AS compliant annual financial statements with comparative figures for the year ended March 31, 2016 also under Ind AS. The date of transition is April 1, 2015. The disclosure and effects of first time adoption of Ind AS are detailed in the Notes to the financial statements.

The financial highlights of your Company for the financial year ended March 31, 2017 are summarized as follows:

1.1 Highlights of Performance

Revenue from operations (Gross) stood at Rs. 2249.62 crores as compared to Rs.2074.03 crores in FY 2015-16;

- Profit before Tax for the FY 2016-17 was Rs. 188.46 crores as compared to Rs. 172.82 crores in FY 2015-16;

- Profit after tax for the FY 2016-17 was Rs. 157.94 crores as compared to Rs.143.46 crores in FY 2015-16.

This performance was achieved as cumulative outcome of multiple factors such as product rationalization, capacity optimization, cost control measures etc. taken by the management of your Company. The benefits of recently completed expansion, and the on-going expansion and modernization programmes in the current financial year, shall accrue in the current and future years.

1.2 Financial Results (Rs. in crores)

Particulars

Year ended 31st March, 2017

Year ended 31st March, 2016

Revenue from Operations (Gross)

2249.62

2074.03

Gross Profit

273.48

256.54

Less: Depreciation and Amortization Expenses

85.02

79.84

Exceptional Item

-

3.88

Taxation:

- Current

39.62

34.01

- MAT Credit (entitlement)/ Utilized

(23.04)

(18.06)

- Earlier years

0.07

-

- Deferred (net)

13.87

13.41

Profit after Tax

157.94

143.46

Add: Balance brought forward from the previous year

518.03

409.28

Less: Dividend paid during the year (including DDT)

25.63

19.71

Profit available for appropriation

650.34

533.03

Less: Appropriation

Transfer to the general reserve

16.00

15.00

Balance in statement of profit and loss

634.34

518.03

Proposed dividend*

21.29

21.29

Corporate dividend tax*

4.34

4.34

Total

25.63

25.63

* (Dividend, as proposed by the Board of Directors after reporting date. Under Ind AS, such dividend is recognized as a liability, only when approved by the shareholders in the Annual General Meeting)

Upon the proposed transfer of Rs. 16 crores to the General Reserves, an amount of Rs.634.34 crores is proposed to be retained in the Statement of Profit and Loss.

2. Dividend

Your Directors are pleased to recommend dividend of Rs.13 /- per share for the year ended 31st March, 2017, subject to shareholders'' approval at the forthcoming 12th Annual General Meeting (AGM) of the Company. The total amount of dividend to be paid to the shareholders will be Rs.25.63 crores (inclusive of dividend tax).

3. Finance

3.1 The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through a process of continuous monitoring.

3.2 Rating

Your Company has been assigned a rating of:

i. CARE AA (Double A) for Long-Term Bank facilities (Term Loan) and for Long/ Short Term bank Facilities (Fund based) from CARE AA- (Double A Minus) signifying high degree of safety regarding timely servicing of financial obligations. Such facilities carry very low credit risk.

ii. CARE A1 (A One Plus) for short term bank facilities (Non-Fund based) and commercial paper reaffirmed, signifying very strong degree of safety regarding timely payment of financial obligations. Such facilities carry lowest credit risk.

3.3 Deposits

The Company has discontinued its Fixed Deposit Scheme with effect from 31st March, 2014 and has not accepted public Deposits covered by Chapter V of the Companies Act, 2013. As on March 31, 2017, there were no unclaimed/ outstanding deposits or accrued interest with respect to deposits.

3.4 Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments made by your company and covered under the provisions of Section 186 of the Companies Act, 2013 are appended as notes to the Financial Statements.

4. Issuance of Non-Convertible Debentures/ Bonds

Your Directors have approved raising of funds by way of borrowings through placement of unsecured / secured, redeemable, non-convertible debentures/ bonds, or by any other permitted mode; for long term working capital requirements, growth plans, etc for an aggregate amount, not exceeding Rs. 500 crores [Rupees Five Hundred crore Only] as permitted under applicable law and subject to such approvals as may be required. This proposal is subject to approval by the Members at the ensuing 12th Annual General Meeting and all statutory and regulatory compliances.

5. Expansion, Modernization and other Capital Projects

The financial year under review witnessed substantial expansion activities carried out by your company through organic means.

5.1 Expansion Projects

The details of the expansion projects undertaken are given below:

5.1.1 Expansion of RTM, Bhawanimandi, by 35,280 Spindles

Your Company has successfully completed expansion of its Unit Rajasthan Textiles Mills, Bhawanimandi (Raj.) by 35,280 spindles to manufacture value added cotton melange and cotton blended dyed yarn and has commenced commercial production from 15th March, 2017. The Company has incurred a cost of Rs.256 crore up to March 31, 2017 on this project.

Post this expansion, yarn spinning capacity of Rajasthan Textiles Mills Unit stands at 126,864 spindles as on March 2017, and the Company''s spinning capacity at 416,616 spindles as on March 2017. The Company would also be adding 17 knitting machines in RTM expansion project. The addition of the new capacity enables the Company to further strengthen its position as a leading player in the niche Cotton Melange, cotton blended dyed yarn and knitted fabric segment.

5.1.2 Expansion Project at Damanganga Home Textiles, Daheli, Bhilad

Your Company has completed expansion project of Damanganga Home Textiles, Daheli, Bhilad Gujarat at a cost of Rs. 81.41 crore as against estimated cost of Rs. 88.50 crores. The same has increased its capacity to 9.6 Mn metres p.a from 4.8 Mn metres p.a. The expansion of operations in Home Textile Division will ensure further strengthening of Company''s end to end operations from Yarn to Home Textile.

5.1.3 Expansion Project at BTM, Baddi, (H.P.) for 100% Polyester Industrial Yarn and blended specialty synthetic yarn

Your Company has decided to expand spinning capacity of BTM by setting up facilities for 28800 Ring Frame Spindles to manufacture 100% polyester and coarse count polyester cotton yarn for industrial application and other grey blended specialty synthetic yarn i.e. Modal / Linen, Polyester / Linen, Polyester / Modal involving an estimated capital outlay of about Rs 215 crores which will be financed by internal accruals and loans from banks and NCDs. This will increase the spinning capacity of BTM to 112176 spindles and that of the Company to 445,416 spindles. The project is slated to become operational by April ,2019.

5.2. Modernization, up gradation and debottlenecking Projects

Further, the Company has spent Rs.97.23 crores on modernization and balancing equipment at all its units during 2016-17. During the year under review, your Company has also undertaken facilities up gradation, debottlenecking and equipment up gradation across all the Units of the Company. These capital purchases were financed by internal accruals and loans from Banks.

6. Share Capital and Sub-Division Thereof

The Authorized Share Capital of your Company as on March 31, 2017 was Rs. 50 crores. The issued, subscribed and paid up Equity Share Capital of your company as on March 31, 2017 is Rs. 16.38 crores comprising of 16382862 Equity Shares of Rs.10/- each. During the year under review, the Company has not issued any further shares. Your Company''s Equity Shares are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE).

The traded value of shares of your Company on NSE and BSE, has witnessed steady buoyancy over the past couple of years. In order to improve liquidity and to make the share affordable to the small and retail investors, Board has considered it expedient to sub-divide the nominal value of each existing Equity Share of your Company from Rs.10/- each, to ten shares of Rs.1/- each. The proposal is subject to approval by the Members at the ensuing 12th AGM and also other statutory and regulatory compliances.

7. Economic Scenario and Outlook

Financial Year 2016-17 closed as a momentous year for the country marked by two landmark economic reforms even as the global economic scenario was indifferent.

The first reform was the rollout of the demonetization scheme in early November. In the long run, this reform aims to usher in greater transparency in financial transactions and a transition towards a cashless economy. In the short term, it has squeezed liquidity and consumption across the economy.

The outlook for 2017 brightens as liquidity in the economy moves towards normalization, with expectations for early revival and growth in overall consumption across several sectors.

The second is imminent roll out of the Goods and Services Tax (GST). GST is a landmark reform which will have a lasting impact on the economy and on businesses. Implementation of a well-designed GST model that applies to the widest possible base at a low rate, can provide significant growth stimulus to business and contribute to the Prime Minister''s mission of ''Make in India''. Your Company has been preparing for migrating to GST for the past year; changes across IT systems, Supply Chain and operations have been made keeping in mind the sweeping changes that GST would bring in. While there are a few areas that need to be addressed, the Government has announced its firm intention to go live with the GST from 1st July, 2017, and your Company will be ready for this transformative reform.

8. Management Discussion and Analysis Report

The detailed review of the operations, performance and outlook of the Company is given separately in the Management Discussion and Analysis Report as required under Regulation 34 of the Listing Regulations, by way of Annexure I to this report.

9. Directors & Key Managerial Personnel

9.1.1 Change in Directorate & Key managerial Personnel

The Board of Directors accepted the resignation of Mr. Dilip Ghorawat, as Director on the Board and as Whole Time Director & Chief Financial Officer (KMP) of the Company w.e.f. 10th September, 2016.

9.1.2 Appointment of Whole time Director:

Mr. Bipeen Valame was appointed by the Board of Directors as a Whole Time Director of the Company for a period of 3 years from February 9, 2017.

9.2 Director retiring by Rotation and re-Appointment as Director:

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Shri C.S.Nopany retires by rotation and is eligible for re-appointment at the forthcoming 12th AGM.

9.3 Confirmation of Appointment of Additional Directors:

Pursuant to the provisions of the section 161(1) of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. Sukhvir Singh and Mr. Bipeen Valame who were appointed by the Board of Directors as Additional Directors of the Company w.e.f. 10th September, 2016 and 09th February, 2017 respectively hold office up to the date of the 12th AGM of the Company.

Necessary resolutions seeking approval of the members for appointment of directors proposed to be appointed /re-appointed, along with the respective brief profile of the Director, have been incorporated in the Notice of the ensuing Annual General Meeting. The Board recommends their appointment by the Members at the AGM.

9.4 Independent Directors

All the Independent Directors of the Company have been appointed for a fixed term of 5 consecutive years from the date of their appointment / regularization in the Annual General Meeting and they are not liable to retire by rotation. All Independent Directors have given their respective declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure requirements) Regulations, 2015.

9.5 Board Effectiveness

9.5.1 Familiarization Policy

Pursuant to Regulation 25(7) of Listing Regulations, 2015, the Board has framed a policy to familiarize the Independent directors about the Company. The policy is available on the website of the Company at the web link: http://sutlejtextiles.com/assets/pdf/policy/ Familiarisation%20Programe-%20Final_20.2.2016.pdf.

The familiarization policy of the Company seeks to familiarize the Independent directors with the working of the Company, their roles, rights and responsibilities, vis a vis the Company, the industry in which the Company operates, business model, etc.

9.5.2 Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of Listing Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually, as well as the evaluation of the working of the Board Committees. The manner of evaluation has been explained in the Corporate Governance Report.

9.6 Criteria for selection of Directors, KMPs and Senior leadership positions and their remuneration

The Board on the recommendation of the Nomination & Remuneration Committee has framed a Policy for selection and appointment of Directors, Senior Management personnel and their remuneration. The Policy is referred to in the Corporate Governance Report (Remuneration Policy) and is available on the Company''s Website at the web link :http://sutlejtextiles.com/assets/ pdf/policy/remuneration-policy.pdf . The Policy contains, inter-alia, principles governing directors'' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of director, etc.

9.7 Changes in Key Managerial Personnel

9.7.1 At the meeting of the Board of Directors held on September 07, 2016, Mr. Sunil Sharma was appointed as Chief Financial Officer (KMP) of the Company w.e.f. September 10, 2016 in place of Mr. Dilip Ghorawat, Chief Financial Officer (KMP) & Whole Time Director of the Company.

9.7.2 Mr. Bipeen Valame was appointed as Chief Financial Officer (KMP) of the Company w.e.f. November 08, 2016 in place of Mr. Sunil Sharma, who resigned as Chief Financial Officer (KMP) of the Company from that date.

9.7.3 Key Managerial Personnel

Pursuant to provisions of Section 2(51), 203 of the Companies Act, 2013, read with the The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following are the Key

Managerial Personnel of the Company:

Mr. S.K.Khandelia, President & C.E.O.;

Mr. Bipeen Valame, Wholetime Director & C.F.O.;

Mr. Deelip Ram Prabhu, Company Secretary & Compliance Officer

10. Meetings of the Board

A calendar of prospective Meetings is prepared and circulated in advance to the Directors. The details of Board Meetings and Committee Meetings held during the year under review, are given in the Corporate Governance Report forming part of this Annual Report. The intervening gap between these Meetings was within the prescribed period under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

11. Related Party Transactions

All related party transactions that were entered into during the financial year were on an 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.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis for the transactions which are of a foreseen and repetitive nature. A detailed statement of such related party transactions entered into pursuant to the omnibus approval so granted are placed before the Audit Committee and the Board of Directors for their review on a quarterly basis. Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) has been made in the notes to the Financial Statements.

The Company has developed a Related Party Transactions Policy for the purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website at the weblink: http://sutlejtextiles. com/assets/pdf/policy/policy-on-related-party-transactions.pdf.

12. Internal Financial Control Systems

Your Company''s Internal Financial Control Systems are robust, comprehensive and commensurate with the nature of its business, and size, scale and complexity of

its business operations. The System covers all the major processes including operations, to ensure reliability of financial reporting, compliance with policies, procedures, laws, and regulations, safeguarding of assets and economical and efficient use of resources.

The Internal auditors continuously monitor the efficacy of internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance on the adequacy and effectiveness of the organization’s risk management with regard to the internal control framework.

The policies and procedures adopted by the Company ensure the orderly and efficient conduct of its business, adherence to the Company''s policies, prevention and detection of frauds and errors, accuracy and completeness of the records and the timely preparation of reliable financial information.

The Audit committee actively reviews adequacy and effectiveness of internal control systems and suggests improvements, for strengthening them in accordance with the business dynamics, if necessary. The Audit Committee also meets the Company''s Statutory Auditors to ascertain their views on the financial statements, including the financial reporting system and compliance to accounting policies and procedures followed by the Company.

13. Auditors Report

The Board has duly reviewed the Statutory Auditors'' Report on the Financial statements including Notes to the Financial statements. The observations of the Auditors in their Report on the Financial statements of the Company are self-explanatory and in the opinion of the Directors, do not call for any further clarification.

14. Auditors

14.1 Statutory Auditor

As per Section 139 of the Companies Act, 2013 (Act), read with the Companies (Audit and Auditors) Rules, 2014, an audit firm acting as the Statutory Auditor is required to be rotated upon completion of two terms of five consecutive years i.e. after a maximum period of ten years. The Act provides timeline of three years to rotate the Statutory Auditors, who have already completed a tenure of ten years.

M/s. Singhi & Co., Chartered Accountants (Firm Reg.

No.:302049E), the current Statutory Auditors of the Company were appointed as the Statutory Auditors of the Company in September, 2005 and were appointed at the every Annual General Meeting thereafter. They have already completed their full tenure of ten years, and need to be replaced by a new Statutory Auditor. Similarly, the Branch Auditors, M/s. S. R. Batliboi & Co. LLP, New Delhi, (Reg. No.301003E) who retire at the conclusion of 12th AGM of the Company, have also completed their full tenure of ten years., and shall not be re-appointed due to ineligibility for reappointment under/by virtue of section 139 of the Companies Act, 2013.

The Company is therefore required to appoint an audit firm to audit the accounts and financial statements of the Company as Statutory Auditors for a tenure of five (5) years, commencing from the FY: 2017-18 to 2021-22 in replacement of the present Auditors M/s. Singhi & Co., as well as M/s. S. R. Batliboi & Co. LLP.

The Board of Directors at its meeting held on May 18, 2017, recommended the appointment of M/s. B S R & Co. LLP, Chartered Accountants (ICAI Firm Registration Number: 101248W/W-100022) as the new sole Statutory Auditors of the Company, to hold office for one term of five (5) years, commencing from conclusion of the ensuing 12th AGM up to the Annual General meeting of the Company to be held in calendar year 2022.

The Company has received a certificate from the proposed Statutory Auditors to the effect that their appointment, if made, shall be in compliance with the provisions of Section 139 and 141 of the Companies Act, 2013. As required under the Listing Regulations, 2015, the proposed auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India as required under Regulation 33 of Listing Regulations, 2015.

Accordingly, the Board proposes appointment of M/s. B S R & Co. LLP, Chartered Accountants, as the sole statutory auditors of the Company in lieu of M/s. Singhi & Co., present Statutory auditors as well as M/s. S. R. Batliboi & Co. LLP, present Branch Auditors, to hold office from the conclusion of the 12th Annual General Meeting till the conclusion of the 17th Annual General Meeting of the Company. Necessary resolution seeking approval of the members for appointment of new Statutory Auditors has been incorporated in the Notice convening the 12th Annual General Meeting.

The Board of Directors upon the recommendation of the Audit Committee of the Board has appointed M/s. Vaish & Associates, Chartered Accountants (FRN:005388N) as Internal Auditors of the Company. They have confirmed their eligibility and have granted their consent to act as Internal Auditors of the Company.

14.3 Cost Auditors

In conformity with the provisions of Section 148 of the Companies Act, 2013, read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the Board on the recommendation of the Audit Committee, has appointed M/s. K. G. Goyal & Associates, Jaipur, Cost Accountants (Reg No. FRN-000024) to audit the cost records relating to Company''s Units: Rajasthan Textile Mills, Chenab Textiles Mills, Birla Textile Mills, Damanganga Home Textiles and Damanganga Process, for the financial year ended March 31, 2017, at a remuneration as specified in the Notice convening the 12th AGM. The appointment is subject to the approval of the Central Government.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member''s ratification for the remuneration payable to K.G.Goyal & Associates, Cost Auditors is included in the Notice convening the 12th Annual General Meeting.

14.4 Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. R. Chouhan & Associates, Company Secretary in Practice, to undertake the Secretarial Audit of the Company for the year under review. The Report of the Secretarial Auditor annexed to this Report, is self-explanatory and does not call for any further clarification.

15. Business Risk Management

Pursuant to Regulation 17(9) of the Listing Regulation, 2015 the Company has laid down a robust risk management framework to inform the Board about the particulars of risk assessment and minimization procedures. Your company has formed a Risk Management Committee, for timely risk identification and mitigation as a better corporate governance practice.

The risk management framework is designed to identify, evaluate, and assess business risks and their impact on company''s business. The risk assessment and minimization procedures are reviewed by the Board annually to ensure that executive management controls risk through the mechanism of a properly defined framework. The framework is aimed at creating and protecting shareholder/stakeholder value by minimizing threats and losses and identifying and maximizing opportunities.

16. Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The requisite information with regard to conservation of energy, technology absorption and foreign exchange earnings and outgo, as required to be disclosed pursuant to Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of Companies (Accounts) Rules, 2014 is given to the extent applicable in Annexure II, to this report.

17. Corporate Governance

Your Company is committed to maintain the highest standards of ethics and governance, resulting in enhanced transparency for the benefit of all stakeholders. Your Company has implemented all the stipulations enshrined in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), and the requirements set out by the Securities and Exchange Board of India. The Report on Corporate Governance as stipulated under Regulation 27 of the Listing Regulations forms a part of this report as Annexure III. The requisite Certificate from the Statutory Auditors of the Company, M/s Singhi & Co., Chartered Accountants, confirming compliance with the conditions of Corporate Governance stipulated under Regulation 27 of the Listing Regulations, is annexed to the Report on Corporate Governance, which forms part of this report.

18. Corporate Social Responsibility

In conformity with Section 135 of the Companies Act, 2013 and Rules made there under, your Company had formed a Corporate Social Responsibility (CSR) Committee to oversee the CSR Activities initiated by the Company during the financial year under review. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board''s Report. Your company has adopted a CSR Policy for the Company which provides a broad framework with regard to implementation of CSR Activities carried out by the Company in accordance with Schedule VII of the Companies Act, 2013. The CSR Policy may be accessed on the Company''s website at the link: http:// sutlejtextiles.com/assets/pdf/policy/csr-policy-2014-adopted-13-05-2014.pdf. During the financial year 201617, the Company has spent Rs. 6.32 crores towards CSR activities as against Rs. 0.19 crores spent during the financial year 2015-16. The Company''s key objective is to make a difference to the lives of the underprivileged and is committed to CSR engagement. The work of your company has been duly acknowledged and appreciated by the concerned State Governments and communities. A report on CSR activities as prescribed under the Companies Act, 2013 and Rules made thereunder is annexed herewith as Annexure IV.

19. Vigil Mechanism / Whistle Blower Policy

Your company has in place a vigil mechanism for directors and employees to report concerns about unethical behaviour, actual or suspected fraud or violation of your company''s code of conduct.

Under the Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Regulation 22 of Listing Regulations, 2015, protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee. Adequate safeguards are provided against victimization to those who avail of the vigil mechanism and direct access to the Chairman of the Audit Committee. The Chairman of the Audit Committee can be contacted at: acwhistleblower@sutlejtextiles.com

The Policy on vigil mechanism and whistle blower policy may be accessed on the Company''s website at the link: http://sutlejtextiles.com/assets/pdf/policy/whistle-blower-policy-adopted-13-05-14.pdf.

20. Prevention of Sexual Harassment at Workplace

As required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed there under, the Company has implemented a policy on prevention, prohibition and redressal of sexual harassment at the workplace. This has been widely communicated internally. Your Company has constituted Internal Complaints Committees (ICC), which includes two women members to redress complaints relating to sexual harassment at its workplaces. During the year, no complaints were filed/received by the Company.

21. Significant and Material Orders Passed By the Regulators Or Courts

There are no significant or material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

22. Extract of Annual Return

In terms of the provisions of Section 92 (3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return in form MGT-9 for the Financial Year ended March 31, 2017 is annexed herewith as Annexure V to this Report.

23. Particulars of Employees

Disclosures pertaining to remuneration and other required information pursuant to Section 197 (12) read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company, is provided herewith under Annexure VI, which forms part of the Report.

24. Human Resources:

Your Company believes that its employees are one of the most valuable assets of the Company. During the year under review, the Company organized various training programs at all level to enhance skills of the employees. As on 31st March, 2017, total employee strength at Sutlej was over 15,231. The employees are deeply committed to the growth of the Company.

25. 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. that in the preparation of the annual financial statements for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. that such accounting policies have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that date,

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual financial statements have been prepared on a going concern basis;

e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

26. Acknowledgements

Your Directors would like to express their sincere appreciation for assistance and co-operation received from the various stakeholders, including financial institutions and banks, Governmental authorities and other business associates, who have extended their valuable support and encouragement during the year under review.

Your Directors take the opportunity to place on record their deep appreciation of the committed services rendered by the employees at all levels of the Company, who have contributed significantly towards Company''s performance and for enhancing its inherent strength. Your Directors also acknowledge with gratitude the encouragement and support extended by our valued shareholders.

For and on behalf of the Board

Place: Mumbai (C.S. Nopany)

Dated: 18.05.2017 Executive Chairman

Director’s Report