| Dear Members,
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.
3. OPERATIONS
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.
4. DIVIDEND
In view of the inadequate profits your Board regrets this inability to
recommend any dividend.
5. EXPORTS
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).
8. DIRECTORS
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.
9. AUDITORS
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.
14. DEPOSITS
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.
17. APPRECIATION
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 |