Mar 31, 2014
We have pleasure in presenting the Fifth Annual Report on the business and operations of Company and Financial Results for the year ended 31st March, 2014 .
1. FINANCIAL RESULTS (Rs. in Lakhs)
2013-2014 Financial Results
Turnover Revenue 15180.27
Gross profit before financial 868 62 charges & Depreciation
Less: Depreciation 193.17
Financial charges 597.19
Profit / (Loss) Before Taxation 78.27
Tax for Earlier years -
Profit / (Loss) after taxation 78.27
With a view to ensure focused growth and to have economies of scale in the respective areas of operations Suryavanshi spinning Mills Ltd (Demerged Company) had formulated a Scheme of Arrangement by way of demerger. Hon''ble High Court at Hyderabad vide its Order dated 30th July, 2014 sanctioned the above scheme of arrangement in accordance with the provisions of sections 391-394 of the companies Act, 1956 and section 2(19AA) of the Income tax Act, 1961. Accordingly, Yarn Unit at Rajna, Madhya Pradesh along with two Garments Divisions in the state of Telangana of the Suryavanshi Spinning Mills Ltd. was transferred to and vested into Sheshadri Industries Ltd (Resulting Company-2) On a going concern basis and the appointed date for the scheme was 01.04.2013.
2. SCHEME OF ARRANGEMENT BY WAY OF DEMERGER (SCHEME) BETWEEN SURYAVANSHI SPINNING MILLS LTD, AANANDA LAKSHMI SPINNING MILLS LTD AND SHESHADRI INDUSTRIES LTD AND THEIR RESPECTIVE MEMBERS AND CREDITORS
Hon''ble High Court at Hyderabad approved vide its Orders dated July 30,2014, the Scheme of Arrangement by way of Demerger between Suryavanshi Spinning Mills Ltd, Aananda Lakshmi Spinning Mills Ltd and Sheshadri Industries Ltd and their respective members and creditors for demeger of yarn unit at Bhongir, Telangana into Aananda Lakshmi Spinning Mills Limited (Resulting Comapny -1) and yarn unit at Rajna,Madhya Pradesh (along with two Garment divisions Telangana) into Sheshadri Industries Limited (Resulting Company-2) and retaining yarn unit and medical textile unit at Aliabad ,Ranga Reddy Dist. Telangana. The said Orders of the Hon''ble High Couirt were filed with Registrar of Companies,at Hyderabad on August 21,2014(Effective Date).The Appointed Date for the Scheme for Arrangement was April 1,2013.
The authorised share capital of the Company was increased from Rs. 25,00,000 to Rs. 5,00,00,000 divided into 50,00,000 equity shares of Rs. 10/- each.
In terms of the Scheme of Arrangement, 37 equity share of of Rs 10/- each fully paid up of Sheshadri Industries Ltd (Resulting Company -2) have been allotted to the shareholders for every 100 equity shares held in Suryavanshi Spinning Mills Ltd. accordingly the paid up share capital of the Company stands increased from Rs. 5,10,000 to Rs. 4,95,95,770. Shares of Sheshadri Industries Ltd. will be listed in the BSE Limited. The Demerger is expected to unlock and maximize value to the share holders of Suryavanshi spinning Mills ltd, and Sheshadri Industries Ltd through focused operations of both Companies.
Company achieved Total Revenue of Rs. 151.80 Crores (including Other Income of Rs.8.69 crores) and achieved a profit of Rs.0.78 Crores for the Year ended 31st March, 2014. The operational results are pertaining to the Yarn unit situated at Rajna, Madhya Pradesh and Garments Divisions in the State of Telangana. As per the Scheme of Arrangement Accounts were drawn up from 01.04.2013 to 31.03.2014. Since it is the first report subsequent to Demerger previous year''s figures are not comparable.
In view of the inadequate profits your Board regrets this inability to recommend any dividend.
During the year under review the company''s exports were Rs. 89.60 crores.
6. FUTURE OUTLOOK
The Company has got 25200 spindles of spinning capacity at its spinning unit at Rajna, Madhya Pradesh, with a capital investment of Rs. 35.30 crores earlier Company has drawn expansion, modernization and value addition programme involving addition of 9408 spinning capacity and installation of other value added machines etc., with a capital cost of Rs. 34.13 crores. The implementation of addition of 9408 spindles is in progress. Continuing that programme, Company has proposed to add value added machinery like TFO combers machines etc., in order to improve quality and quantity and to reduce labour cost since these machines are less labour intensive. On account of this measures being taken by the Company, the peroformance expected to be improved and prospects of the Company are promising.
7. ENVIRONMENT AND POLLUTION CONTROL
The Company give top priority to maintenance and performance improvement of all pollution abatement facilities like effluent treatment plants, air emission control and waste disposal facilities at its manufacturing plants. As far as possible rainwater harvesting and treated effluent recycling is being carried out at manufacturing plants to reduce dependence on water from other natural resources. Training, awareness and learning have been always at the forefront of The Company''s journey to become world class in environmental performance. It has inculcated the habit to be in harmony with nature and in this context, afforestation, maintenance of green belts and gardens, and reuse of treated water in horticulture activities are routine practices. Environment impact assessment and risk analysis have been performed right from the stage of planning for implementation of all new major expansion projects to incorporate the necessary measures to minimize adverse environmental impact.
The Company has obtained environmental clearance from the Pollution Control Board concerned and is in compliance with all current environmental legislation. As an integral part of its environment protection drive, the Company ensures the very minimum quantity of generation of waste, low emission levels and low noise pollution levels during operations of manufacturing facility(s).
Sri Surender Kumar Agarwal (DIN 00281576) and Sri Manish Gupta (DIN 00526638) were appointed as an additional Directors who are holding office till the date of ensuing Annual General Meeting . A member proposed their appointments at the ensuing Annual General Meeting.
In terms of provisions of the Section 149 of the Companies Act, 2013 Company proposes to appoint Sri Surender Kumar Agarwal, and Sri Manish Gupta as independent Directors for a term of 5 years, not liable for retirement by rotation.
Smt. Narmda Bai and Sri Rishikesh Agarwal directors resigned from their respective directorships of the Company due to their other pre-occupations the Board records its appriciation for the services rendered by them.
The necessary Resolution for obtaining the approval of Members for the appointment of Sri Jeetender Kumar Agarwal as Managing director and re-appointment of Sri Badrinarayan Agarwal have also been included in notice for the ensuing Annual General Meeting. Members approval is sought for the above appointments of Directors.
Brief resume of the Directors including independent Directors being appointed, nature of their expertise in specific functional areas and names of public companies in which they hold directorships as stipulated under clause 49 of the listing agreement with the Stock Exchange are given elsewhere in the Annual Report.
Your Company''s Auditors M/S K.S. Rao & Co., Chartered Accountants, Hyderabad will retire at the conclusion of the Annual General Meeting. The company has received a letter from M/s. K.S. Rao & Co., informing their intention not to seek re appointment as auditors of the company. Your directors take this opportunity to express their appreciation for the support, co operation assistance and services rendered by them.
It is proposed to appoint M/s. Brahmayya & Co, Chartered Accountants, Hyderabad having firm registration no: 00513S as auditors of the company from the conclusion of the Fifth Annual General Meeting of the company until the conclusion of next Annual General Meeting. M/s. Brahmayya & Co, Chartered Accountants, Hyderabad have confirmed to the Company that if appointed, theire appointment will be in accordance with the provisions of the Companies Act, 2013.
10. AUDITORS'' REPORT
The Auditors'' Report to the Shareholders does not contain any reservation, qualification or adverse remark.
11. COST AUDITORS
Pursuant to the provisions of Section 148 of the Companies Act, 2013, Ms. K. Aruna Prased cost Accountants (Membership No. 11816), were appointed Cost Auditors to submit the reports to the Central Government. The reports for the year 2012-13 were submitted on 27.9.2013 (Due date 27.9.2013) and for the year 2013-14 will be submitted on or before due date.
12. DIRECTORS'' RESPONSIBILITY STATEMENT
On the basis of compliance certificates received from the concerned executives of the respective Divisions of the Company and subject to disclosures in the annual accounts, as also on the basis of the discussion with the Statutory Auditors of the Company from time to time,
The Board of Directors of the company confirms:
i. that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departures:
ii. that selected accounting policies were applied consistently and Directors 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 31st March, 2014 of the profit of the Company for year ended on that date;
iii. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, if any;
iv. The Annual Accounts have been prepared on a going concern basis.
13. CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
A statement under section 217 (1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 giving details of conservation of energy, technology absorption, foreign exchange earnings and outgo, is annexed and marked Annexure ''A and forms part of this Report.
The company has not invited/accepted deposits from the public.
15. PARTICULARS OF EMPLOYEES:
No employee was in receipt of remuneration in excess of the limits prescribed under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules,1975 and hence the prescribed information is not required to be given.
16. CASH FLOW ANALYSIS
In conformity with the provisions of clause 32 of the Listing Agreement the Cash Flow Statement for the year ended 31.03.2014 is annexed hereto.
The Board of Directors is pleased to place on record their appreciation of the co-operation and support extended by All India Financial Institutions, Banks and various State and Central Government Agencies.
The Board would also like to thank the Company''s shareholders, customers, suppliers for the support and the confidence which they have reposed in the management. The Board place on record its appreciation of the contribution made by the employees at all levels for their hard work, solidarity, co-operation and support.
For and on behalf of Board of Directors
Place : Secunderabad (B.N. AGARWAL) Date: 03rd September, 2014 Chairman