Suryaamba Spinning Mills Ltd Directors Report.
To The Members of Suryaamba Spinning Mills Limited,
The Board of Directors are pleased to present the Twelveth (12th) Annual Report of the Company for the financial year ended 3181 March, 2019.
The Companys financial performance for the year ended 3181 March, 2019 is summarized below:
|Particulars||Year ended 31.03.2019||Year ended 31.03.2018|
|Total Revenue from Operations||16929.42||15338.38|
|Earnings Before Interest, Taxes, Depreciation and Amortisation||1507.39||1506.49|
|Less : Finance Cost||624.74||705.64|
|Less : Depreciation and Amortisation Expense||446.08||446.29|
|Profit before Tax||436.57||354.56|
|Less Tax Expenses||94.55||119.88|
|Profit for the period||342.02||234.69|
|Other Comprehensive Income (net of tax)||33.12||31.57|
|Total Comprehensive Income||375.14||266.26|
|Earnings per share||11.67||8.00|
|Retained Earnings - Opening Balance||701.29||502.09|
|Add: Profit for the year||375.14||266.26|
|Amount appropriated during the year:|
|Dividend including dividend tax paid||35.29||35.29|
|Transfer to General Reserves||0.50||0.50|
|Retained Earnings - Closing Balance||1040.65||701.29|
During the financial year 2018-19, the Companys total revenue including other income stood at? 16929.42 lakhs as compared to? 15338.38 lakhs in the previous year, an increase by 10.37% over the previous year.
The Companys profit before tax stood at ? 436.57 lakhs as compared to ? 354.56 lakhs in the previous year, an increase by 23.13% over the previous year. The Company earned a net profit of ? 375.14 lakhs, increase by 40.89%, as against a net profit of ? 266.26 lakhs in the previous year.
Domestic Revenues stood at? 13077.65 lakhs from ? 11288.06 lakhs of previous year, representing a growth of 15.85% owing to strong demand trends from local customers. The Revenue from exports stood at ? 3705.68 lakhs compared to? 3924.78 lakhs last year.
Your Company was able to sustain its performance amidst fluctuating pricing of raw materials and volatility in foreign exchange. This performance achieved as cumulative outcome of multiple factors such as product rationalization, capacity optimization, cost control measures, etc. taken by the management of your Company.
Your Directors are pleased to recommend a dividend of ?1 per share (10%) on the Equity Shares of the Company for the year ended 31st March, 2019. If the dividend, as recommended above, is approved by the Members at the Annual General Meeting, the total outgo on account of dividend inclusive of taxes, for FY 2018-19 is?35.35 lakhs.
Your Directors have recommended payment of dividend on 8% Cumulative Redeemable Preference shares as per the terms and conditions of the issue. The total outgo on account of preference dividend inclusive of taxes, for FY 2018-19 is ? 74.55 lakhs.
TRANSFER TO RESERVES
Your Company proposes to transfer ? 0.50 lakhs to General Reserves of the Company for the financial year ended 31st March, 2019.
The Paid-up Share Capital of your Company as on 31st March, 2019 was ? 10.662 Crores comprising of 29,31,944 Equity Shares of 101- each and 73,00,000 Preference Shares of Rs. 100/- each.
Your Company has not issued any shares or convertible instruments during the financial year 2018-19.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE COMPANY
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2018-19 and the date of this report. There has been no change in the nature of business of the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
(A) Retirement by Rotation and subsequent re-appointment:
Pursuant to the provision of Section 152 of the Companies Act, 2013, Mr. Virender Kumar Agarwal (DIN:00013314), Managing Director, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Board recommends his re-appointment for approval by the Members.
(B) Changes in Directors:
Mr. Sushil Kapadia (DIN:01730944) Independent Non- Executive Director of the Company informed the Board of Directors vide its letter dated 29th August,2018, in view of his personal reasons, want to step down from the directorship. His resignation took effect from 07th September, 2018.His knowledge of the business environment was an asset to the Company. The Board places on record appreciation for his guidance, dedication and commitment.
Considering his experience and beneficial association with the Company and consent to continue to act as Director of the Company, the Board appointed Mr. Sushil Kapadia (DIN: 01730944) as an Additional Independent Director w.e.f 11th November, 2018. As per provisions of the Companies Act, 2013, he holds office as Additional Director upto the ensuing Annual General Meeting.
Mr. Manish Kumar (DIN: 07096129), Independent Non- Executive Director of the Company resigned from the Board with effect from 30th March,2019 due to personal reasons. The Board placed on record its appreciation for the valuable services rendered by him during his tenure.
In order to fill the vacancy caused due to resignation of Mr. Manish Kumar, the Board appointed Mr. Nilesh Panpaliya (DIN: 08499844) as Additional Independent Director w.e.f 03rd July, 2019. As per provisions of the Companies Act, 2013, he holds office as Additional Director up to the ensuing Annual General Meeting.
Your Company has received a notice from a Member proposing candidature for the appointment of Mr. Sushil Kapadia and Mr. Nilesh Panpaliya as Independent Directors for a period of five (5) consecutive years. The Resolution(s) for the appointment of Mr. Sushil Kapadia and Mr. Nilesh Panpaliya Independent Directors are given in the Notice for approval by the Members.
(C) Re-appointment of Independent Directors:
Mr. Amit Goela (DIN: 01754804) an Independent Non- Executive Director of the Company and not liable to retire by rotation was appointed at the Annual General Meeting of the Company held on 9th August, 2014 for a period of 5 years and thus holding his respective office till 8th August, 2019.
Mr. Sushil Kapadia (DIN: 01730944) an Independent Non- Executive Director of the Company and not liable to retire by rotation appointed as Additional Independent Director during financial year 2018-19 and as per provisions of Section 161 of the Act, Members approval is accorded in the Notice and it shall be his second term of appointment pursuant to section 149(10) of the Act.
Mr. Amit Goela and Mr. Sushil Kapadia, Independent Directors have consented to act as Independent Directors for the second term, subject to approval of shareholders by way of Special Resolution. Accordingly, Special Resolutions for their re-appointment as Independent Directors of your Company for second term of five (5) consecutive years are given in the Notice for approval by the Members.
Brief particulars of the directors proposed to be appointed/ re-appointed are provided as an annexure to the notice convening the AGM.
(D) Key Managerial personnel:
As per the provisions of Section 203 of the Companies Act, 2013, read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 following persons are the Key Managerial Personnel of the Company:
Mr. Virender Kumar Agarwal, Chairman and MD
Mrs. Seema Agarwal, Joint Managing Director
Mr. MayankAgarwal, Whole time Director
Mr. Gajanan Chhawsaria, Chief Financial Officer and
Ms. Deepa Dudani, Company Secretary
During the period under review, on recommendation of the Audit Committee Mr. Gajanan Chhawsaria, Chief Financial Officer of the Company was re-appointed fora term of 3 years with effect from 13th August, 2018.
MEETINGS OF THE BOARD
During financial year 2018-19, Six (6) Board Meetings were held. The details of Board Meetings with regard to their dates and attendance of each of the Directors thereat have been set out in the Report on Corporate Governance, which forms part of this Report.
The Independent Directors of your Company have furnished the declaration that they meet the criteria of independence as provided in Section 149 (6) of the Companies Act, 2013 and Regulation 16(1 )(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Board of Directors of your Company confirms that the Independent Directors fulfill the conditions specified in Section 149 (6) of the Act and Regulation 16(1 )(b) of the Listing Regulations and are independent of the management.
Pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Board of Directors have carried out annual evaluation of its own performance, Board Committees and individual Directors.
The performance of the Board and individual Directors was evaluated by the Board after seeking inputs from all the Directors. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee Members. The criteria for performance evaluation of the Board included aspects such as Board composition and structure, effectiveness of Board processes, contribution in the long term strategic planning, etc. The criteria for performance evaluation of the Committees included aspects such as structure and composition of Committees, effectiveness of Committee meetings etc.
The parameters for the performance evaluation of the Directors include attendance, effective participation in meetings of the Board, domain knowledge, vision, strategy, etc.
In a separate meeting, the Independent Directors evaluated the performance of Non-Independent Directors, Chairman and performance of the Board as a whole. Your Directors have expressed their satisfaction to the evaluation process.
Pursuant to Section 134 of the Companies Act, 2013 (including any statutory modification(s) or reenactments) thereof for the time being in force) the Directors of the Company confirm that:
a. in the preparation of the annual accounts for the year ended 31 stMarch, 2019 the applicable accounting standards and Schedule III of the Companies Act, 2013 have been followed and there are no material departures;
b. the Directors have 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 31st March, 2019 and of the profit of the Company for that period;
c. proper and sufficient care has 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;
d. the annual accounts have been prepared on a going concern basis;
e. proper internal financial control laid down by the Directors to be followed by the Company and that such internal financial control are adequate and operating effectively; and
f. proper system to ensure compliance with the provisions of all applicable laws were in place and that such systems are adequate and operating effectively.
EXTRACTS OF ANNUAL RETURN
Pursuant to Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules,2014, the extract of the Annual Return in the prescribed form i.e. Form MGT-9 is annexed herewith as Annexure - A, which forms part of this Report.
Pursuant to provisions of section 134(3)(a)oftheAct, MGT 9 is uploaded on Companies website and can be accessed at http://www.suryaamba.com/investors/.
AUDITORS AND AUDITORS REPORT
(A) Statutory Auditor:
The Statutory Auditor of your Company, M/s S. Venkatadri & Co., Chartered Accountants (FRN: 004614S), Hyderabad were appointed for a term of 5 (Five) consecutive years at the 8th Annual General Meeting (AGM) held on 25th September, 2015 to hold office till the conclusion of the 13th Annual General Meeting of the Company to be held in the year 2020.
The Companies (Amendment) Act, 2017 has waived the requirement for ratification of the appointment of Statutory Auditor by the shareholders at every Annual General Meeting. Hence, the ratification of appointment of Statutory Auditors by your Company is not required.
Accordingly, the Statutory Auditor will continue to hold office till the conclusion of the 13th Annual General Meeting of the Company approved by the Members at the 8th Annual General Meeting of the Company.
M/sS. Venkatadri & Co., have confirmed their eligibility and qualification required under section 139,141 and other applicable provisions of the Companies Act, 2013 (including any statutory modification(s) or reenactments) thereof for the time being in force).
The Auditors Report for the financial year ended 3181 March, 2019 on the financial statements of the Company is a part of this Annual Report.
The observations made in the Auditors Report of M/s. S. Venkatadri & Co, Chartered Accountants, read together with relevant notes thereon, are self-explanatory and hence do not call for any comments. There is no qualification, reservation, adverse remark or disclaimer by the Statutory Auditors in their Report.
(B) Cost Auditor:
The Company is required to maintain cost records as specified by the Central Government under Section 148 of the Act, and accordingly such accounts and records are made and maintained in the prescribed manner.
The Board of Directors, on the recommendations made by the Audit Committee, has appointed M/s. G. R. Paliwal & Co., Cost Accountants (Firm Reg. No.100058), Nagpur as Cost Auditors of the Company for conducting the cost audit of the Company for the financial year 2019-20 at a remuneration of ? 50,000/- plus taxes and out of expenses and has recommended his remuneration for ratification by the members at the ensuing 12th Annual general meeting.
The Company has received consent from M/s. G. R. Paliwal & Co., Cost Accountants, to act as the Cost Auditor along with a certificate confirming their independence and arms length relationship.
The Cost Audit Report will be filed within the prescribed period of 180 days from the close of the Financial Year.
(C) Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit for the year ended 31st March, 2019 was carried out by the Secretarial Auditors, M/s. Aarju Agrawal & Associates, Practicing Company Secretary, Nagpur.
The Secretarial Audit Report of M/s. Aarju Agrawal & Associates, Practicing Company Secretary, Nagpur, for the Financial Year ended 31st March, 2019 does not contain any qualification, reservation adverse or disclaimer remark.
The Secretarial Audit Report in Form MR-3 is annexed as Annexure - B, which forms part of this Report.
(D) Internal Auditor:
Pursuant to the provisions of Section 138 of the Act and the Companies (Accounts) Rules, 2014, on the recommendation of the Audit Committee, M/s. Manish Jain & Co., Chartered Accountants, Nagpur (FRN: 138430W) are appointed by the Board of Directors to conduct internal audit of the Company for FY 2019-20.
REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.
COMMITTEES OF THE BOARD
The Company has the following Board Committees as on 31st March, 2019:
1) Audit Committee
2) Nomination and Remuneration Committee
3) Stakeholders Relationship Committee
Details of all the committees along with their main terms, composition and meetings held during the year under review are provided in the Report on Corporate Governance, a part of this Annual Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has adopted a Whistle Blower Policy, to provide a formal vigil mechanism to the Directors and employees to report their concerns about unethical behaviour, including actual or suspected leak of unpublished price sensitive information, actual or suspected fraud or violation of your Companys Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimisation of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee.
It is affirmed that no personnel of the Company has been denied access to the Audit Committee.
The Whistle Blower Policy is available on the website of your Company at http://www.suryaamba.com/investors/policies/.
NOMINATION & REMUNERATION POLICY
Your Company has adopted a Nomination and Remuneration Policy for the Directors, Key Managerial Personnel and Senior Management employees pursuant to the requirement of Section 178 of the Companies Act, 2013 and Listing Regulations. The salient features of the Policy are set out in the Corporate Governance Report which forms part of this Annual Report.
The said Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall formulate the criteria for appointment of Directors on the Board of the Company and persons holding Senior Management positions in the Company, including their remuneration and other matters as provided under Section 178 of the Act and Listing Regulations. The Policy is also available on the website of the Company http://www.suryaamba.com/investors/policies/.
During the year under review, the Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re- enactment(s) thereof for the time being in force).
RELATED PARTY TRANSACTIONS
In accordance with the amendments to the applicable provisions of the Listing Regulations, the Company revised its Policy on dealing with and Materiality of Related Party Transactions. The Policy is also available on the website of the Company at http://www.suryaamba.com/investors/policies/.
All contracts/arrangements/transactions entered into by the Company with Related Parties were in ordinary course of business and on arms length basis. The Company has not entered into any contracts/ Arrangements / transactions with related parties which qualify as material in accordance with the Policy of the Company on materiality of related party transactions.
All transactions with related parties were reviewed and approved by the Audit Committee and are in accordance with the Policy on dealing with and Materiality of Related Party Transactions, formulated by the Company. There are no materially significant related party transactions that may have potential conflict with interest of the Company at large.
The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Note 31 to the Standalone Financial Statements of the Company. There were no transactions with Related Parties during the year which would require to be reported in FormAOC-2.
PARTICULARS OF LOAN, GUARANTEE OR INVESTMENTS UNDER SECTION 186 OF COMPANIES ACT, 2013
During the year under review, the Company has not given any loans, neither provided guarantees nor made any investments covered under the provisions of section 186 of the Companies Act, 2013.
PARTICULARS OF EMPLOYEES
Disclosures pursuant to the provisions of Section 197 of the Companies Act, 2013 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have been provided in Annexure C of this report.
Your Company considers its employees as most valuable resource and constantly endeavour to invest in people and processes to improve human capital for the organisation and service delivery to its customers. Your Company strives to provide a healthy, conducive and competitive work environment to enable the employees excel and create new benchmarks of productivity, efficiency and customer delight. Your Company always believes in maintaining mutually beneficial industrial relations and hence the industrial relations have always been smooth, cordial and trusting.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, are provided in Annexure D of this report.
Risk Management is an integral and important component of Corporate Governance. Your Company believes that a robust Risk Management system ensure adequate controls and monitoring mechanisms for a smooth and efficient running of the business. A risk-aware organization is better equipped to maximize the shareholders value. The Management puts in place adequate and effective system and resources for the purposes of risk management. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework. The Companys future growth is linked to general economic conditions prevailing in the market.
Further, the details of the Financial Risk Management, its objectives and policies are set out in Note 30C to the Standalone Financial Statements of the Company.
INTERNAL FINANCIAL CONTROLS
The Company has sound internal financial controls commensurate to the size and nature of its business. The Internal Control System is exercised by ensuring compliance with various policies, practices and statutes, and that all assets are safeguarded and protected against loss from unauthorised use or disposition and that those transactions are authorised, recorded and reported correctly. The Internal Auditor carries out extensive audits throughout the year.
Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board for their review. The Internal Control system is designed to ensure that the financial and other records are reliable for preparing Financial Statements and other data, and for maintaining accountability of persons.
SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
Pursuant to the requirement of Section 134(3)(q) of the Companies Act, 2013 read with Rule 8(5)(vii) of the Companies (Accounts) Rules,2014, it is confirmed that during FY 2018-19 there were no significant or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and your Companys operations in future.
DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has adopted zero tolerance for sexual harassment at work place, the Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. An Internal Complaints Committee has been set up to redress the complaints received regarding sexual harassment at workplace.
During the year under review, no complaint was received from any employee and hence no complaint is outstanding as on 31st March, 2019 for redressal.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATEGOVERNANCE REPORT
The Management Discussion and Analysis Report and the Report on Corporate Governance, as required underthe Listing Regulations, forms part of the Annual Report.
a. The Company does not have any subsidiary, joint venture or associate companies.
b. Your Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS- 1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India.
c. Pursuant to provisions of Section 135 of Companies Act, 2013, the Company is not covered under the purview of criteria for CSR eligibility.
d. Unclaimed Dividend / Shares: The details of unclaimed dividend / shares are available on the website of the Company viz. www.suryaamba.com. The due dates for transfer of unclaimed / unpaid dividend to the Investors Education & Protection Fund (IEPF) by the Company are given in General Shareholders Information Section of Corporate Governance Report, forming part of the Annual Report.
e. The Company does not have any scheme or provision of money for the purchase of its own shares by employees/ Directors or by trustees for the benefit of employees/ Directors; and
f. The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.
g. During the year under review, the Company has obtained Credit Rating IND BBB from India Ratings & Research, specified in detail in the Corporate Governance Report.
Your Directors wish to place on record their sincere appreciation to all the employees for their dedication and commitment. The hard work and unstinting efforts of the employees have enabled the Company to sustain and further consolidate its position in the industry.
Your Company continues to occupy a place of respect among stakeholders, most of all our valuable customers. Your Directors would like to express their sincere appreciation for assistance and co-operation received from the vendors and stakeholders including financial institutions, banks, Central and State Government authorities, customers and other business associates, who have extended their valuable and sustained support and encouragement during the year under review. It will be the Companys endeavour to build and nurture these strong links with its stakeholders.
|By Order of the Board of Directors|
|Place: Nagpur||Virender Kumar Agarwal||Seema Agarwal|
|Date: July22,2019||Managing Director||Joint Managing Director|
|DIN : 00013314||DIN : 01430206|