Suryajyoti Spinning Mills Ltd Directors Report

To

The Members,

Suryajyoti Spinning Mills Limited

Your Directors are pleased to present herewith the 34th Annual Report on the business and operations of the Company and the Audited Accounts for the Year ended 31st March, 2017.

Financial Summary:

The summarized financial results for the year ended 31st March, 2017 as compared with the previous year are as under;

		(Rs. in Lakhs)
Particulars	Year ended 31/03/2017	Year ended 31/03/2016
Net Sales	12620.09	36192
Profit before Depreciation, Interest and taxes	(11160.42)	2660
Interest	180.13	3188
Profit before Depreciation and taxes	(11340.55)	(528)
Depreciation	1469.26	1580
Profit (Loss) before tax	(12809.81)	(2108)
Provision for Tax	-	-
Deferred Tax Liability (Asset)	-	-
Net Profit (Loss) after taxes	(12905.54)	(2108)
Earning Per Shares (EPS)	(65.66)	(10.72)

Operations and Performance:

The sluggish market conditions for textile industry are still continuing and as a consequence, the performance of the Company during the reporting period has been adversely affected. During the FY 2016-17 under review, your company has produced 7681.80 MTs of yarn and 15.38 lakh meters of fabric as against 14748.50 MTs of yarn and 92.59 lakh meters of fabric in the year 2015-16. The net sales of the company were Rs. 126.20 crs as against Rs. 361.92 crs in the previous year. The company has incurred Net Loss of Rs. (129.06) crs as against Rs. (21.08) crs in the previous year.

Exports:

During the FY 2016-17 the FOB value of the Company exports was Rs. 17.04 crs as against Rs. 102.31 crs in the previous year.

Capital Expenditure:

During the year under review your Company had not incurred any capital expenditure and it was Rs. 2.40 crores in the previous year.

Board of Directors and Key Managerial Personnel:

Relevant information on composition of the Board and number of meetings is provided in Board of Directors section of Corporate Governance Report which forms part of this Annual Report.

In terms of the provisions of Section 152 of the Companies Act, 2013, Shri Arun Kumar Agarwal, Director, would retire at the ensuing Annual General Meeting. He, being eligible offers himself for re-appointment. Your

Board of Directors recommends his re-appointment.

The Board of Directors of the Company has appointed Ms. Hamlata Devi as an Additional Directors with effect from 21 November, 2016. Pursuant to the provisions of Section 161 of the Companies Act, 2013, she shall hold office up to the date of the ensuing 34 Annual General Meeting of the Company. Considering her varied experience and expertise, your Board recommends her appointment as an Independent Director of the Company.

Brief profiles of above Directors have been provided elsewhere in this Annual Report.

Sri K. Harishchandra Prasad and Smt Neha Agarwal have resigned from the office of Directors on 03-08-2016 and Shri. Sanjeev Mitla Agarwal has resigned from the office of Director on 08-10-2016 due to personal grounds. The Key Managerial Personnel of the Company Shri. Soma V.S, Company Secretary has also resigned on 14-02-2017. The Board placed on record its appreciation of the contributions made by them during their tenure as Directors and KMP of the Company and wished them all success, happiness and best of health in life.

Pursuant to the provisions of section 203 of Companies Act, 2013, the key managerial personnel of the Company are Shri. Ravinder Kumar Agarwal, Managing Director and Shri.Arun Kumar Agarwal, Chief Financial Officer.

Remuneration and other matters provided in section 178(3) of the Act have been disclosed in the corporate governance report, which forms part of this report.

Audit Committee:

Relevant information on composition of the Audit Committee and number of meetings is provided in Audit Committee section of Corporate Governance Report which forms part of this Annual Report.

Changes in Share Capital

There was no change in Share Capital of the Company during the year 2016-17.

Directors Responsibility Statement:

Pursuant to the requirement under section 134 (5) of the Companies Act, 2013 with respect to Directors Responsibility statement, it is hereby confirmed that:

(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 the 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 basis; and

(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.

(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.

Statement on declaration by Independent Directors:

All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149 (6) of the Companies Act, 2013 and Listing Agreement/SEBI (LODR) Regulations, 2015.

Nomination & Remuneration Policy:

The Company follows a policy on remuneration of Directors and Senior Management Employees. The policy is approved by the Nomination & Remuneration Committee and the Board. More details on the same are given in the Corporate Governance Report.

Whistle Blower Policy:

The Company has a Whistle Blower Policy framed to deal with instance of fraud and mismanagement, if any in the Company. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company.

Particulars of Loans, Guarantees or Investments:

No Loans/Guarantees/Investments under Section 186 of the Companies Act, 2013 have been made during the year to the parties listed therein.

Transfer to reserves:

In view of the loss incurred by the Company, losses of Rs. 12905.54 lakhs were transferred to surplus account of the Company.

Dividend

In view of the loss incurred, the Board of Directors of the Company expresses their inability to recommend any dividend for the year under review.

Risk Management Policy:

The Company has instituted a proper mechanism for identifying and establishing controls to effectively manage different kinds of risks viz., Trend Related Risks, Raw Material Risks, Brand Technology Risks, Operational Quality Risks, Human Resources Risks, Regulatory Risks and Financial Risks. The management periodically reviews the risks and takes steps to mitigate identified risks.

Evaluation of the Boards Performance

In compliance with the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, the performance evaluation of the Board and of its Committees was carried out during the year under review. More details on the same are given in the Corporate Governance Report.

Familiarization Program for Independent Directors:

The Company has formulated a familiarization program for the Independent Directors to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company. The details of such program are available in the Companys website www.suryajyoti.com.

Fixed Deposits:

Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.

Extract of Annual Return:

An Extract of Annual Return prepared in accordance with Section 92(3) of the Act in Form MGT-9 is annexed as Annexure I to this report.

Management Discussion & Analysis:

Pursuant to the provisions of SEBI (LODR) Regulations, 2015, a report on Management Discussion & Analysis is herewith annexed as Annexure - II to this report.

Corporate Governance:

The Company has been making every endeavor to bring more transparency in the conduct of its business. As per the requirements of the Listing Agreement/SEBI (LODR) Regulations, 2015, a compliance report on Corporate Governance for the year 2016-17 and a Certificate from the Auditors of the Company are furnished which form part of this Annual Report.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Company has in place an Anti Sexual Harrasment Policy in line with the requirements of the Sexual Harrassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trained) are covered under the Policy. The following is a summary of sexual harassment complaints received and disposed off during each year:

a) No. of Complaints received NIL

b) No. of Complaints disposed off NIL

Human Resources:

Your Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes utmost care to attract and retain quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Companys vision. Your Company appreciates the spirit of its dedicated employees.

Significant and material orders passed by the regulators or courts:

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

Statutory Auditors:

Pursuant to the provisions of section 139 of the Companies Act, 2013 read with Rule 6 of Companies (Audit and Auditors) Rules, 2014, the office of M/s. Rao Chowdary & Associates, Chartered Accountants as statutory auditors of the company comes to an end. As their term of office comes to end at ensuing Annual General Meeting, it is proposed to appoint M/s. ATHOTA & CO., Chartered Accountants, Hyderabad, (FRN 004828S) as the statutory auditors of the company to hold office for a term of five consecutive years from the conclusion of the ensuing Annual General Meeting until the conclusion of the 39 AGM of the Company to be held in the year 2022, subject to ratification at every AGM. The Board recommends the resolution for your approval.

Comments on Audit qualifications:

The Company has not provided interest in respect of loans availed from SBI, SBH and IOB consequent to loan accounts becoming NPA (Non Performing Asset) on the principle of accounting prudence as the Company will be negotiating for a amicable settlement with these Banks.

The Management is of the opinion that the liability does not arise and hence not provided for.

Internal Auditors:

The Board of Directors based on the recommendation of the Audit Committee has re-appointed M/s. K.S.Rao & Co., Chartered Accountants, Hyderabad, as the Internal Auditors of your Company. The Internal Auditors are submitting their reports on quarterly basis.

Cost Auditors:

In accordance with Section 148(3) of the Companies Act, 2013 and The Companies (Audit and Auditors) Rules, 2014, the Audit Committee has recommended and the Board of Directors had appointed M/s.GVSSP & Associates, Cost Accountants, Hyderabad, being eligible and having sought re-appointment, as Cost Auditors of the Company, to carry out the cost audit of the products manufactured by the Company during the financial year 2016-17 on a remuneration of Rs.19000/- . 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 Members ratification for the remuneration payable to M/s.GVSSP & Associates Cost Accountants is included at Item No.5 of the Notice convening the Annual General Meeting.

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 Company has appointed Mrs. N. Madhavi, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure III to this report.

Particulars of Employees:

There are no employees in the Company, particulars of whom are required to be furnished under Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The industrial relations were cordial at all units of the Company.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

The particulars as prescribed under section 134 (3) (m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are set out in Annexure - IV to this report.

Related Party Transactions:

All the related party transactions were entered on arms length basis and are in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Agreement/SEBI (LODR) Regulations, 2015.

There are no materially significant related party transactions made by the company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the company at large.

All Related Party Transactions are presented to the Audit Committee and to the Board. Omnibus approval is obtained for the transactions which are foreseeable and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. Complete details mentioned in the Notes to accounts.

Information on transactions with related parties pursuant to section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure - V in Form AOC-2 to this report.

Declaration about Compliance with Code of Conduct by Members of the Board and Senior Management Personnel

The Company has complied with the requirements about the Code of Conduct for Board members and Senior Management Personnel. A compliance certificate by the Managing Director forms part of this Report.

Adequacy of Internal Financial Control Systems with reference to Financial Statements

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, and size and complexity of its operations. Internal control systems comprising of policies and procedures designed to ensure reliability of financial reporting timely feedback on achievement of operational and strategic goals, compliance with policies procedure, applicable laws and regulations, and that all assets and resources are acquired are used economically.

Corporate Social Responsibility

The provisions of Corporate Social Responsibility are not applicable to the Company for the year.

Subsidiary/Joint Venture/Associate Companies

The Company does not have Subsidiary/Joint venture/Associate companies.

Acknowledgements:

Your Directors wish to place on record their appreciation for the valuable support and co-operation extended by State Bank of India, IDBI Bank, State Bank of Hyderabad, Indian Overseas Bank and State and Central Government Agencies.

Your Directors also wish to place on record their sincere appreciation of the contribution made by the employees of the Company and are thankful to the Shareholders for their continued patronage and support.

	For and on behalf of the Board of Directors
	Sd/-	Sd/-
Place: Secunderabad	R.K. AGARWAL	A.K. AGARWAL
Date: 14-08-2017	Managing Director	Executive Director
	DIN: 00011349	DIN:00011126