priyadarshini ltd Directors report

Dear Shareholders,

Your Directors have pleasure in presenting 36th Annual Report together with the Audited Accounts for the year ended 31st March, 2017.

1. Financial Performance

The financial results of the Company for the financial year 2016-17 as compared with the previous year are as follows:- (Rs. In Lakhs)

	31March 2017	31March 2016
Total Revenue	2585.74	3467.56
Profit/ Loss before Tax	-1083.15	-1389.04
Tax Expenses	0	0
Profit / Loss for the year	-1083.15	-1389.04
Balance of Profit/Loss brought forward from previous year	-7840.83	-6542.95
Profit/ Loss available for appropriation	-8923.98	-7840.83

DIVIDEND

Your Directors are not declaring any dividend as the Company has incurred loss during the financial year.

POLICY ON MATERIAL SUBSIDIARIES

During the financial year under review, the company has achieved a turnover of Rs.2585.74 lakhs against Rs.3467.56 Lakhs in the previous financial year. The Company has incurred a loss of Rs.1083.15 lakhs against a loss of Rs.1389.04 lakhs in the previous period.

Due to lack of working capital the company carries out the operations on job work basis during the entire period under review.

The management is taking effective steps to cut the cost and improve production.

TEXTILE INDUSTRY

Textile is the oldest industry in the country and it is the most labour intensive industry. This sector gives direct employment to 35 million people and indirect employment to 45 million people covering mostly women and rural poor. This industry contributes for the growth of the country in terms of job creation in rural areas, export earnings, besides meeting the basic needs of the people.

The capacity of the Industry is much more than the domestic requirements. The fall in exports due to recession in developed countries has resulted in poor price realization form the domestic market. The unprecedented huge price fluctuations of raw materials and demand recession for all Textile products have seriously affected and drove the industry to register huge losses during the year. Nearly 75% to 80% of the textile mills across the country have started incurring losses.

In order to bail out the ailing industry the Spinning Mills Associations have approached the Textile Ministry pleading for reliefs. RBI relaxed conditions to avoid Textile units from being classified as NPAS by opting for debt restructuring. Moratorium on payment of principal and interest on term loans a period of two years. Sanction of working capital term loan representing the uncovered portion in the cash credit loan account and interest relief have been provided.

OUTLOOK ON OPPORTUNITIES, RISK AND CONCERN

The fundamental growth drivers of Indian economy remain strong despite the economic turmoil in the world. There would be growing opportunities in the international market as well as domestic market.The consumption is growing in response to growing per capita income, population and strong retail push. With regards to textile industry, there are significant opportunities in the domestic market as more consumers are buying readymade garments and also consumption of the cloth per capita continues to increase due to growth in the economy which is adding to the purchasing power of the consumers. Macroeconomic factors increase in interest rates are the major risk factors presently for the textile industry. Increase in interest rates will affect the profitability.

Since the industry is capital intensive.

ADEQUCY OF INTERNAL CONTROLS

The company has a proper and adequate system of internal controls to ensure that all assets are safeguarded, and protected against loss from unauthorized use of disposition, and that transactions are authorized, recorded, and reported correctly. The internal control system is supplemented by an extensive program of internal audits, review by management and documented policies, guidelines and procedures.

The internal control system is designed to ensure that the financial and other records enable for preparing financial statements and other data and for maintaining accountability of assets. The audit Committee comprising independent Directors will review the internal control system on quarterly basis.

EXPORTS

During the period under review there were no exports.

WINMILL

During the year under review, the 1.8 M.W. Wind power mill has generated 22,21,700 units as against 18,42,086 units in the previous year.

GAS POWER PROJECT

The 3.2 M.W. Gas based power project of the company has not generated power during the current year due to non availability of Gas.

FIXED DEPOSITS

The company has not accepted any fixed deposits during the year.

INSURANCE

The properties of the company including its building, plant and machinery and stocks have been adequately insured.

CORPORATE GOVERNANCE

Your Company is in conformity with the code of Corporate Governance enunciated in Regulation 27 (2) of the SEBI (Listing Obligations and Disclosure Requirements) 2015 read with the Listing Agreement entered with the Stock Exchanges. A separate report on Corporate Governance in annexed hereto and form part of Directors Report together with a certificate from the Auditors of the Company confirming compliance of the Conditions of Corporate Governance.

PARTICULARS OF CONTRACTS & ARRANGEMENTS WITH RELATED PARTIES

All transactions entered by the Company with Related Parties were in the Ordinary course of Business and are at Arms Length pricing basis. The Audit Committee granted approvals for the transactions and the same were reviewed by the Committee and the Board of Directors.

There were no materially significant transactions with Related Parties during the financial year 2016-17 which were in conflict with the interest of the Company.The details of contracts and arrangements with related parties as referred to in Section 188(1) of the Companies Act, 2013 were given as Annexure - I to the Boards Report in form No: AOC-2 pursuant to Section 134 (3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014.

EXTRACT OF ANNUAL RETURN

In accordance with the provisions of Section 134(3(a) of the Companies Act, 2013, an extract of the Annual Return in Form MGT-9 is appended as Annexure-II to the Boards Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Pursuant to section 186 of Companies Act, 2013 and Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Company neither has, directly or indirectly, given any loan to its Directors nor extended any guarantee or provided any security in connection with any loan taken by them. Further, the Company has neither given any inter-corporate loan / advance nor made any investments in other companies during the financial year 2016-17.

Number of Board Meetings held

The Board of Directors duly met 4 times during the financial year from 1st April, 2016 to 31st March, 2017, the details of which are given in the Corporate Governance Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013 and Secretarial Standard -1.

Directors and Key Managerial Personnel

In terms of Section 152 of the Companies Act, 2013, Mrs. Ratnakumari, Director would retire by rotation at the forthcoming AGM and is eligible for reappointment. Mrs. Ratnakumari has offered herself for re-appointment.

Mr. Kowsalendra Rao Cherukuri as executive vice chairman has been re-appointed for a further period of 3 years with effect from 7th June, 2017 without any remuneration.

Based on the confirmations received from Directors, none of the Directors are disqualified from appointment under Section 164 of the Companies Act 2013.

DIRECTORSS RESPONSIBILITY STATEMENT

Pursuant to section 134 (5) of the Companies Act, 2013, your Directors Confirm that:

i) In the preparation of the annual accounts, the applicable accounting standards have been followed;

ii) Such accounting policies have been selected 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 statement of affairs of the company at the end of the financial year and of the profit/ loss of the company for that year;

iii) Proper and sufficient care have been taken 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;

iv) the annual accounts on a going concern basis;

v) The directors had laid down internal financial control to be followed by the company and that such internal financial controls are adequate and were operating effectively.

vi) 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.

STATUTORY AUDITORS

In terms of the provisions of Section 139(1) of Companies Act, 2013 (the "Act"), no listed company can appoint or re-appoint an audit firm as auditor for more than two terms of five consecutive years. The Act further prescribes as per section 139(2), that the Company shall comply with requirements within a period not later than the date of First AGM held after three years from the commence of this Act.

M/s. P. Srinivasan & Co., Chartered Accountants, (Firm Registration No.004055S), Statutory Auditors of the Company have completed two consecutive terms of five years each.In terms of their appointment made at the 35th AGM held on 26th September, 2016, they shall hold office of the auditors up to the conclusion of the 36th AGM. Your companys Board placed on record its appreciation and gratitude to M/s. P.Srinivasan & Co., the retiring Statutory Auditors for their long association with the Company and also thanked Mr. K Ranganathan and other Partners of M/s. P Srinivasa & Co., for their invaluable guidance rendered to the company.

Based on the recommendations of the Audit Committee and subject to the approval of the shareholders, it is proposed to appoint M/s.GMN Rao & Associates, Chartered Accountants (Firm Registration No.016126S) as Statutory Auditors of the Company for a period of 5 years, commencing from the conclusion of 36th AGM till the conclusion of the 41st AGM. M/s.GMN Rao & Associates, Chartered Accountants, have consented to the said appointment and confirmed that their appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act.

Qualification by Statutory Auditor Information & Explanation in respect of Qualification / Reservation or Adverse remarks contained in Independent Auditors Report under Paras: Basis for Qualified opinion, Emphasis of Matter and Other Matters:

1.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors has appointed Putcha Sarada, Practicing Company Secretary for conducting Secretarial Audit of the Company for the financial year 2016-2017.The Secretarial Audit Report is annexed herewith as Annexure-III.

Qualification by Secretarial Auditor

The Secretarial Auditors Report does not contain any qualifications, reservation or adverse remarks except non compliance of Section 203 of the Companies Act, 2013 in respect of appointment of Company Secretary as Key Managerial Person.

Board Response:

In complying with the provisions of Section 203 of the Companies Act, 2013 regarding appointment of Company Secretary, now the company is in the process to appoint a suitable person who will take care the Secretarial and Listing Compliance part of the Company.

DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES

The information required under Section 197 of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in separate annexure forming part of this Report as Annexure-IV.

DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors of the Company have submitted their declarations as required under Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as per sub-section (6) of Section 149 of the Act.

NOMINATION AND REMUNERATION POLICY

In compliance to the provisions of Section 178 of the Companies Act, 2013 and Regulation19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination and Remuneration Committee has recommended to the Board a Nomination and Remuneration policy with respect to appointment / nomination and remuneration payable for the Directors, Key Managerial Personnel and senior level employees of the Company. The said policy has been adopted by the Board and the same was discussed in the Corporate Governance Report. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company.

AUDIT COMMITTEE

The Composition of the Audit Committee is provided in the Corporate Governance Report forming part of this report. All the recommendations made by the Audit Committee were accepted by the Board.

RISK MANAGEMENT

The Risk Management Committee duly constituted by the Board had formulated a Risk Management Policy for dealing with different kinds of risks attributable to the operations of the Company. Risk Management Policy of the Company outlines different kinds of risks and risk mitigating measures to be adopted by the Board. The Company has adequate internal control systems and procedures to combat the risk. The Risk Management procedure will be reviewed periodically by the Audit Committee and the Board.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

Section 135 of the Companies Act, 2013 provides the threshold limit for applicability of the CSR to a Company ie. (a) networth of the Company to be Rs.500 crore or more; or (b) turnover of the company to be Rs.1,000 crore or more; or (c) net profit of the company to be Rs.5 crore or more. As the Company does not fall under any of the threshold limits given above, the provisions of section 135 are not applicable to the Company.

INFORMATION ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 3 of Companies (Accounts) Rules, 2014, the relevant information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo is appended hereto as Annexure-V and forms part of the Boards Report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT,2013

The company has in place a policy for prevention of sexual harassment in accordance with the requirements of the Sexual Harassment of women at workplace (Prevention, Prohibition & Redressal) Act,

2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company did not receive any complaint during the year 2016-17.

ACKNOWLEDGEMENT

Your Directors take this opportunity to offer their sincere thanks for continued assistance and cooperation extended to the Company by various departments of the Central and Statement Governments, Government Agencies, Financial Institutions, Banks and other statutory authorities.

Your Directors also take this opportunity to offer their sincere thanks to shareholders, customers, creditors and other related organizations, for their continued support and cooperation that have helped in the companys growth.

Your Directors also wish to thank the employees at all levels for the cooperation extended by them in achieving the results.

As the company has proposed a ONE TIME SETTLEMENT (OTS) to all the secured creditors which is being considered by them, no interest provision is made in the accounts.

	By Order of the Board of Directors
	For PRIYADARSINI LIMITED
	C. K. Rao
Place: Hyderabad	Executive Vice Chairman
Date : 16 10 . .2017	DIN No: 00018525
	C. Ratna Kumari
	Director
	DIN No: 00018519

FORM NO. AOC.2

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto -

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

1. Details of contracts or arrangements or transactions not at arms length basis

(a) Name(s) of the related party and nature of relationship

(b) Nature of contracts/arrangements/transactions

(c) Duration of the contracts/arrangements/transactions

(d) Salient terms of the contracts or arrangements or transactions including the value, if any

(e) Justification for entering into such contracts or arrangements or transactions

(f) date(s) of approval by the Board

(g) Amount paid as advances, if any:

(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188

2. Details of material contracts or arrangement or transactions at arms length basis

(a) Name(s) of the related party and nature of relationship

1. Padmaja Agencies Private Limited – Executive Vice Chairman

2. Arjuna Paper Cones – Director

3. Key Managerial Personnel – C.K.Rao (b) Nature of contracts/arrangements/transactions

1. Loan

2. Purchase of raw material

3. Payment of Salary Nil sitting fee paid

(c) Duration of the contracts/arrangements/transactions: One Year

(d) Salient terms of the contracts or arrangements or transactions including the value, if any:

1. Transaction amount Rs.120.01 Lakhs and outstanding amount Rs.128.97 Lakhs

2. Transaction amount Rs.33.73 Lakhs and outstanding amount Rs.36.38 Lakhs

3. Transaction amount Rs.0.75 Lakhs

(e) Date(s) of approval by the Board, if any:

(f) Amount paid as advances, if any:

ANNEXURE - V

Information pursuant to Section 134 (1) (m) of the Companies Act, 2013 read with Rule 3 of Companies (Accounts) Rules, 2014.

1. CONSERVATION OF ENERGY:

The company has taken various steps over the previous years to conserve energy wherever possible. This process continues to remain a thrust area. Energy audit and inter unit studies are carried out on a regular basis for taking necessary steps for reduction of energy consumption.

2. TECHNOLOGYABSORPTION:

The required information is given in the prescribed Form B.

3. FOREIGN EXCHANGE EARNINGSAND OUTGO:

The foreign exchange earnings & outgo during the year under review as below:

i) Foreign Exchange used :Rs.NIL

ii) Foreign Exchange Earned :Rs.NIL

FORM - A

FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY:

A. Power and Fuel Consumption:

	2016-17	2015-2016
1. Electricity
a) Purchased :
i) Units (in lakhs of KWH)	163.09	182.08
Total amount (Rs.in lakhs)	1128.14	1203.78
Average Rate : (Rs./Unit)	6.92	7.84
ii) IEX
Units (in lakhs of KWH)	0.00	0.00
Total amount (Rs.in lakhs)	0.00	0.00
Average Rate : (Rs./Unit)	0.00	0.00
b) Own Generation :
i) Through Diesel Generators
Units (in lakhs of KWH)	0.00	0.00
Units per Litre of Diesel Oil	0.00	0.00
Average Cost: Rs. /Unit	0.00	0.00
ii) Through Wind Mills
Units generated (in lakhs KWH)	0.00	18.42
Value (Rs.lakhs)	0.00	94.86
Average Rate (Rs./Unit)	0.00	5.15
2. Coal
(Quality : B,C & D Round used in boiler for fiber/yarn dyeing)
Quantity (Tons)	1171.294	1305.80
Total Amount (Rs. in lakhs)	88.74	84.52
Average Rate (Rs./Kg)	7.57	7.18
3.Others
Electricity tons)	0.00	0.00
Toatal amount(Lakhs)	0.00	0.00
Average Rate(Rs./kgs)	0.00	0.00

B. Consumption per unit of production :

	Standard	Current Year	Previous Year
Yarn Production (Kgs. in lakhs)	_	41.47876	41.25
Fibre/yarn Dyed (Kgs. in lakhs)	_	7.50248	7.33
Electricity(Units/Kg of Yarn)	_	3.93	4.41
Coal(Kgs/Kg of Dyed Fibre/yarn)	_	0.64	0.56

FORM B

Form for Disclosure of particulars with respect to Technology Absorption: Nil

With the establishment of Research & Development department, the company is in a position to explore the development of new varieties of yarn & with more value addition.