Mar 31, 2014
We have pleasure in presenting the First Annual Report on the business and operations of Company and Financial Results for the period ended 31st March, 2014 .
With a view to ensure focused growth and to have economies of scale in the respective areas of operations the Suryavanshi Spinning Mills Ltd (Demerged Company) had formulated 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 Bhongir together with 4 acres of land with temporary structures in Survey Nos 558 and 560 situated at Aliabad village, Medchal Taluq, Shameerpet Mandal, Rangareddy District, telangana of the Demrged Company was transferred to and vested into Aananda Lakshmi Spinning Mills Limited (ALSML) On a going concern basis and the appointed date for the scheme was 01.04.2013.
1. FINANCIAL RESULTS (Rs. in Lakhs)
Turnover Revenue 11340.59
Gross Profit before financial 686.38 charges & Depreciation Less: Depreciation 308.35
Financial charges 376.39
Profit / (Loss) Before Taxation 1.64
Tax for Earlier years -
Profit / (Loss) after taxation 1.64
Company achieved Total Revenue of Rs. 113.41 Crores (including Other Income of Rs.2.42 crores) and achieved a profit of Rs.0.02 Crores for the Year ended 31st March, 2014. The operational results are pertaining to the Yarn unit situated at Bhongir, Nalgonda District, Telangana State. which were part of the erstwhile Demerged company. 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 adequate profits your Board regrets their inability to recommend any dividend.
During the year under review the company''s exports were Rs. 18.92 crores (including merchant exports of Rs. 2.73 crores).
5. 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.
During the year under review the authorised share capital of the Company was increased from Rs. 1,00,00,000 to 5,00,00,000 divided into 50,00,000 equity shares of Rs. 10/- each.
In terms of the Scheme of Arrangement, 26 equity share of of Rs. 10/- each fully paid up of Aananda Lakshmi spinning Mills Ltd. (Resulting Company-1) have been allotted to the shareholders for every 100 equity shares held in Suryavanshi Spinning Mills Ltd. Accordingly the paid up capital of the Company stands increased from 5,00,000 to Rs. 3,49,92,700. Shares of Aananda Lakshmi Spinning Mills 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 Aananda Lakshmi Spinning Mills Ltd, through focused operations of both Companies.
6. FUTURE OUTLOOK
Company proposes to invest about 3.50 crores towards modernisation of the machinery to improve productivity and achieve better quality. Company has also taken various policies to ensure availability of adequate labour force and control operational cost. The various measures initiated by the Company will go a long way to improve in the production and to contribute to the bottom line.
7. ENVIRONMENT AND POLLUTION CONTROL
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 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.
We 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 all manufacturing facilities.
Sri Rajender Kumar Agarwal,Sri Jeetender Kumar Agarwal Sri Devender Kumar Agarwal are the first directors as per the Articles of Association of the Company. The first directors hold the office of directorship up to the conclusion of the ensuing Annual General Meeting. They being eligible, offer themselves for reappointment as directors at the ensuing Annual General Meeting.
Sri Badrinarayan Agarwal, Sri Surender Kumar Agarwal and Manish Gupta were appointed as an additional Directors who are holding office till the date of ensuing Annual General Meeting. Some members 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..
The necessary Resolution for obtaining the approval of Members for the appointments of Sri Devender Kumar Agarwal and Sri Badrinarayan Agarwal as Managing director and Director of the Company respectievely 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 on elsewhere in the Annual Report.
The Statutory Auditors of the Company, M/s. Brahmayya & Co, Chartered Accountants, Hyderabad will retire at the conclusion of ensuing Annual General Meeting and are eligible for reappointment.
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 (pertaining to Yarn Unit at Bhongir) 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,l975 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 places on record its deep appreciation of the devoted services of the loyal workers, executives and other staff of the Company, who have contributed in no small measure to the performance and the Company''s continued inherent strength.
It also extends grateful thanks to the Central and various State Governments, the investors, the banking circles, financial institutions and district level authorities for their continued support extended to the Company from time to time. Shareholders'' appreciation of the managements'' efforts expressed at the general meetings of the Company and otherwise, is a great fillip to strive for better performance year.
For and on behalf of Board of Directors
Place : Secunderabad (B.N. AGARWAL) Date: 3rd September, 2014 Chairman