addi industries ltd share price Directors report

Dear Members

Your Directors take immense pleasure in presenting the 41st Annual Report together with the Audited Financial Statements (Standalone and Consolidated) showing the financial position of the Company for the financial year ended March 31,2023.

Financial Results

The performance of your Company for the financial year ended March 31,2023 is summarized below:

(Amount in Rs./Lakhs)

Particulars	Standalone		Consolidated
	Current year 31-03-2023	Previous year 31-03-2022	Current year 31-03-2023	Previous year 31-03-2022
Turnover & other Income (incl. Exports)	391.94	216.40	405.12	229.35
Gross Profit before financial exp. & depreciation	304.62	(74.4)	317.18	(61.61)
Less: Finance Cost	1.39	-	1.39	-
Less: Depreciation	13.79	12.91	13.79	12.91
Exceptional Items	1829.56	4651.83	1829.56	4,651.83
Net Profit/(Loss) before Tax	2119.00	4,564.52	2131.89	4,577.31
Less: Provision for Taxation	290.90	831.14		832.23
Less: Income Tax adj. for earlier years	5.44	-	5.44	-
Less: Adj. for deferred tax	130.59	5.61	130.59	5.61
Mat credit entitlement	-	-	-	-
Net Profit /(Loss) after tax	1692.68	3,727.78	1704.05	3,739.47
Add: Amount b/f from last year	3661.44	(66.90)	3783.52	43.47
Impact of carrying amount of asset Where remaining useful life is Nil	-	-	-	-
Other comprehensive Income	(0.09)	0.56	(0.09)	0.56
Balance transferred to Balance Sheet	5354.03	3661.44	5487.47	3,783.52

Indian Accounting Standards

The Financial Statements for the year ended on March 31, 2023 have been prepared in accordance with the Companies (Indian Accounting Standard) Rules, 2015, prescribed under Section 133 of the Companies Act, 2013 (‘the Act) and other recognized accounting practices and policies to the extent applicable.

Dividend

Pursuant to the Requirements of Regulation 43A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (‘the Listing Regulations), the Company has formulated its Dividend Distribution Policy, the details of which are available on the Companys website at www.addiindustries.com.

Considering the financial results and the performance of the Company during the year under review, as compared to the previous year, the Board of Directors is pleased to recommend a dividend of Rs. 1.25 (25%) per share of the face value of Rs. 5 each for the Financial Year 2022-23.

This dividend is payable after declaration by the Shareholders at the ensuing Annual General Meeting (AGM) and you are requested to declare the same.

Operations

During the year under review, the Company has added a new line of business of real estate to diversify the income source of the Company and to strengthen its capital base and balance sheet to augment the long-term resources for meeting funds requirements of its business activities.

A summary of completed and ongoing projects as on March 31, 2023 has been provided in the Management Discussion and Analysis Report which forms a part of the Annual Report.

Future Business Prospects

The Board of Directors have been exploring and assessing various available business propositions for diversification including, inter-alia, the manufacturing of Woven Garments, for better prospects, and for augmenting the resources & the profitability of the Company. The Directors are hopeful of improved working results in the ensuing period.

The Company will continue to explore various options to strengthen its capital base and balance sheet to augment the long-term resources for meeting funds requirements of its business activities, the future growth opportunities, general corporate purposes and other purposes. Strict monitoring is being done to cut down costs and overheads wherever feasible to make the product more price competitive. The Company is also exploring market to get business in other areas also.

Technology upgradation, modernisation-cum-diversification

The Company has not incurred any expenditure on technology upgradation & modernization of machinery and equipment during the year under report and during the preceding year.

Finances

Your Company continues to have the support of its Bankers, Punjab National Bank and HDFC Bank Limited, for the working capital requirements commensurate with its business activities on need basis.

Deposits

Your Company has not accepted deposits within the meaning of Section 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the year and hence there were no outstanding deposits and no amount remained unclaimed with the Company as on March 31,2023.

Particulars of Loans, Guarantees or Investments

The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Act.

The details of the investments made by Company are given in the notes to the financial statements.

Internal Financial Control Systems and their adequacy

The Company has an internal control system, commensurate with the size, scale and complexity of its operations. The scope and authority of the internal audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the internal audit function reports to the Chairman of the Audit Committee of the Board and to the Managing Director.

Rajeev Shagun Gupta & Co were appointed as Internal Auditors for a term of 5 years in terms of Section 138 of the Act read with the Companies (Accounts) Rules, 2015 monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company.

Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations, if any, along with corrective actions thereon are presented to the Audit Committee of the Board.

Directors and Key Managerial Personnel (KMP)

Appointment and Re-appointment of Directors:

As per the provisions of Section 152 of the Companies Act, 2013, Mr. Hari Bansal, Director, retires by rotation at the ensuing 41st Annual General Meeting (AGM) and is eligible for re-appointment. Board of Directors recommends his re-appointment.

Further, the tenure of Mr. Chaman Lal Jain as Managing Director comes to an end and to re-appoint the directorship of Mr. Chaman Lal Jain as Managing Director of the Company, the board recommends his re-appointment for a term of 3 year at the ensuing 41st AGM.

Further, the board has appointed Mr. Achal Kapoor and Mr. Subrata Panda w.e.f. August 11, 2023 as additional Director (non-executive and independent) of the Company. They have been recommended by board to be appointed as Independent Director of the Company for a term of 5 years at the ensuing 41st AGM.

Details of the proposal for re-appointment of Mr. Chaman Lal Jain and Hari Bansal and appointment of Mr. Achal Kapoor and Mr. Subrata Panda along with their brief resume are mentioned in the Explanatory Statement under Section 102 of the Act and disclosure under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI (LODR) Regulations) as annexed to the Notice of the 41st AGM.

Resignation of Directors:

Mrs. Urmila Jain ceases to be a Director of the Company with effect from 8th August 2022 as she gives her resignation due to some personal engagement. The board appreciates her period of directorship in the company.

Key Managerial Personnel:

As on 31st March 2023, Mr. Chaman Lal Jain, Managing Director, Mr. Atul Jain, Chief Financial Officer and Ms. Taranjeet Kaur, Company Secretary are the Key Managerial Personnel of the Company.

Other than the abovementioned, there was no change in the compositions of Board of directors and KMP during the period under review.

Declaration by Independent Director

Mr. Vishnu Bhagwan Aggarwal, Dr. Bijoya Kumar Behera and Dr. Kusum Chopra, were the Independent Directors (Non-Executive) of the Company as on March 31,2023.

The Company has received necessary declaration from each Independent Director under Section 149(7) of the Act, that they meet the criteria of independence laid down in Section 149(6) of the Act and under Regulation 16(1) (b), 25 of the Listing Regulations.

Integrity, Expertise and Experience (including the proficiency) of the Independent Directors

All the independent Directors are person of integrity and have vast experience in the field. They are expert in their fields and their advices have been fruitful to the Company. Some of the independent directors are not required to appear for the online proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs whereas some of them will be appearing soon.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and the requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the various Committees. The evaluation process focused on various aspects of the Board and Committees functioning such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors on parameters such as attendance, contribution and independent judgment. The Directors expressed their satisfaction with the evaluation process.

Board Diversity

The Company recognizes the importance and benefits of having the diverse Board to enhance quality of its performance.

The Company believes that a diverse Board will enhance the quality of the decisions made by the Board by utilizing the different skills, qualification, professional experience, gender, knowledge etc. of the members of the Board, necessary for achieving sustainable and balanced growth of the Company. The Board of Directors on the recommendations of the Nomination and Remuneration Committee has adopted a Policy on Diversity of Board of Directors in terms of Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Nomination and Remuneration Policy

The Board on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment including criteria for determining qualifications, positive attributes of Directors, Key Managerial Personnel (KMP), Senior Management and their remuneration. The brief detail of the Policy is stated in the Corporate Governance Report.

Number of Meeting(s) of the Board and Committees

A Calendar of Meetings is prepared and circulated in advance to the Directors.

During the year four (4) Board Meetings and four (4) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. During the year under review one of each meetings of Nomination and Remuneration Committee and Stakeholders Relationship Committee have been held, the details of which are given in the Corporate Governance Report.

Committees of the Board

As on 31st March, 2023, the Board has Three (3) committees namely, Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee. A detailed note on the composition of the Committees is provided in the Corporate Governance Report, which forms an integral part of the Boards Report.

Directors Responsibility Statement

In terms of Section 134(5) of the Companies Act, 2013 the directors would like to state that:

i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) The directors have selected such accounting policies and have applied them consistently and made judgments and estimates that were 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 or loss of the Company for the year under review;

iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting any fraud or other irregularities;

iv) The directors have prepared the annual accounts on a going concern basis;

v) 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; and

vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

Related party transactions

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with the Company at large. Accordingly, no transactions are being reported in Form AOC-2 in terms of Section 134 of the Act read with rules made thereunder.

The Board of Directors, on the recommendation of the Audit Committee, has approved a Policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013, the Rules made there under and Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 . The Policy on Related Party Transactions has been suitably formulated as per the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, has been uploaded on the Companys website.

There were no materially significant Related Party transactions during the year under review.

Amount carried to Reserve

The Company has not transferred any amount to the reserves during the current financial year.

Material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of the report

There are no other material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.

Changes in Capital Structure

During the year under review, there was no change in the Share Capital of the Company. The Company has neither issued any equity shares with differential rights nor the sweat equity shares nor granted any employee stock options nor the Company has created any provisions for purchase of its own shares, during the year under review.

Code of Conduct

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the Company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings/behaviors of any form.

The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity at the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure.

All the Board Members and the Senior Management personnel have confirmed compliance with the Code.

Vigil Mechanism/Whistle Blower Policy

In terms of the provisions of Section 177(9) & (10) of the Companies Act, 2013 and pursuant to the provisions of Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, The Company has a vigil mechanism policy to deal with the instance of fraud and mismanagement, if any.

In staying true to our values of strength, performance and passion and in line with our vision of being one of the Companies, having highest standards of Corporate Governance and stakeholder responsibility. The periodic report for any instance is to be reported before the Audit Committee.

Risk Management Policy

The Company has a judicious risk management policy, strong systems, constant monitoring of various risk factors and a focus on greater market penetration that continue to guide its business strategy.

Corporate Social Responsibility (CSR)

As per the provision of Section 135 of the Companies Act, 2013, every Company having net worth of Rs. 500 Crore or more, or Turnover of Rs. 1000 Crore or more or a Net Profit of Rs. 5 Crore or more during the immediately preceding financial years is required to spent in every financial year, at least two percent (2%) of the average net profits made during the three immediately preceding financial year, in pursuance of the CSR Policy.

The Companys profit exceeds the above limit of Rs. 5 Crore for the financial year ended 31st March 2022. As per provisions of the Section 135, the CSR committee is not required to be constituted and the duties of the of CSR committee to be discharged by the Board of Directors of the company.

However as per Section 198 of the Companies Act 2013, the Company is not falling under the criteria of spending expenditure as per section 135 of the Act.

The Company endeavors to adopt an integrated approach to address the community, societal & environmental concerns by taking one or more of the activities allowed as per Section 135 of the Act and the applicable rules and regulations.

Prevention of Insider Trading

The Company has adopted a Code of Conduct for prevention of insider trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading window is closed. The Board is responsible for implementation of the Code.

All Board members and the designated employees have confirmed compliance with the Code.

Preservation of Documents & Archival Policy

In terms of Regulation 9 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors in their meeting held on 30th May, 2022 has adopted a Policy for Preservation of Documents & Archival thereof, classifying them in two categories as follows:

a) documents whose preservation shall be permanent in nature;

b) documents with preservation period of not less than eight years after completion of the relevant transactions.

Details of significant & material orders passed by the Regulators or Courts or Tribunals

During the year under review, there were no material and significant orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys operations in future.

Secretarial Auditors

As required under Section 204(1) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of managerial Personnel) Rules, 2015 the Company had appointed Ms. Jyoti Sharma, Company

Secretary in practice of JVS & Associates to undertake the Secretarial Audit of the Company for the financial year 2022-23. The Secretarial Audit Report for the financial year ended March 31,2023 is annexed as Annexure-A.

Statutory Auditors

M/s. B.R Gupta & Co., Chartered Accountants, were appointed at the 40th Annual general Meeting of the company held on 30th September, 2022 for a period of five consecutive years to hold office until conclusion of the 45th AGM to be held in the Calendar year 2027. The Auditors have confirmed that they are not disqualified from continuing as Statutory Auditors of the Company.

Auditors Report/Secretarial Audit Report

The observation made in the Auditors Report read together with relevant notes thereon are self-explanatory and hence do not call for any further comments under Section 134 of the Companies Act, 2013.

Frauds reported by Auditors under Section 143(12) of the Companies Act, 2013

During the year under review, no instances of fraud were reported by the statutory auditors under Section 143(12) of the Companies Act, 2013 and rules framed thereunder either to the Company or to the Central Government.

Annual Return

The Annual Return (Form MGT-7) is available on the website of the Company having following web link, https://www.addiindustries.com/

Subsidiary Company

During the year under review, Aum Texfab Private Limited continues to be a Subsidiary of the Company and the contribution of the said Subsidiary Company was insignificant. The consolidated financial statements of the Company and its above said subsidiary form part of the Annual Report.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Companys subsidiaries in Form AOC-1 is attached to the financial statements of the Company as Annexure-B. The Financial Statements of the Subsidiary Company will be made available upon request by any Member of the Company interested in obtaining the same. The Financial Statements of the Subsidiary Company will also be kept for inspection by any Member of the Company at its Registered Office.

Further, pursuant to provisions of Section 136 of the Act, the financial statements, including Consolidated Financial Statements of the Company along with relevant documents and separate audited accounts in respect of Subsidiaries and Associate, are available on the website of the Company at www.addiindustries.com.

The Board of Directors has approved a Policy for Determining Material Subsidiaries in compliance with the provisions of Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy for Determining Material Subsidiary has been suitably formulated as per the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time.

Consolidated Financial Statements

As stipulated by Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has prepared Consolidated Financial Statement in accordance with the applicable accounting standards as prescribed under the Companies (Accounts) Rules, 2014 of the Companies Act, 2013 ("the Act"). The Consolidated Financial Statement reflects the results of the Company and that of its subsidiary and associates. As required under Regulation 34 of the Listing Regulations, the Audited Consolidated Financial Statement together with the Independent Auditors Report thereon is annexed and forms part of this Report.

The summarized Consolidated Financial Statement is provided above in point No.1 of this Report.

Management Discussion & Analysis

In accordance with the requirements of the Listing Regulations, the Management Discussion and Analysis Report is given in the "Annexure -C", forming part of this Report.

Corporate Governance

Your Company believes in conducting its affairs in a fair, transparent and professional manner and maintaining the good ethical standards, transparency and accountability in its dealings with all its constituents. As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a detailed report on Corporate Governance along with the Auditors Certificate thereon forms part of this report as "Annexure - D".

Particulars of Employees

There was no employee who was in receipt of remuneration for the financial year under report in the aggregate of more than Rs. One Crore Two Lakhs per annum, if employed throughout the year or Rs. Eight Lakhs Fifty Thousand per month, if employed for part of the financial year, within the meaning of Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The information required pursuant to Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is annexed to this Report as Annexure-E.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo

The relevant information & data required to be disclosed in terms of the provisions of the Companies Act, 2013 and the rules made thereunder is given in the Annexure- F and forms part of this Report.

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

During the year under review, no complaints were received from any employee and hence, no action was required to be taken by the Company in accordance with the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and rules made thereunder and no complaints are outstanding as at 31st March, 2023.

Details of Application Made or Any Proceeding Pending under The Insolvency and Bankruptcy Code, 2016 during the year along with their status as at the end of the Financial Year

No such application filed/ pending during the period under review.

Details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof

No such event occurred during the year under review.

Maintenance of cost records as specified by the central government under sub-section (1) of section 148 of the companies act, 2013

Your Company doesnt fall under the classes of Companies specified under Section 148(1) of the Companies Act, 2013 read with Rule 3 of the Companies (Cost Records and Audit) Rules, 2014. Accordingly, the Company is not required to maintain Cost Records as specified by the Central Government.

Compliances of applicable Secretarial Standards

The Company has complied with the applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors and ‘General Meetings respectively

Acknowledgements

Industrial relations continue to be cordial during the year under report. The Directors appreciate the effort and contribution made by the Workers, Staff Members and Executives at all levels. The Directors would also like to thank the Shareholders, Bankers, Customers, and Suppliers & Vendors for the continuous support given by them to the Company, and their confidence in its management.

	For and on behalf of the Board of Directors of Addi Industries Limited
	Sd/-	Sd/-
Place : New Delhi	Chaman Lai Jain	Hari Bansal
Dated : 11-08-2023	Managing Director (DIN: 00022903)	Director (DIN: 00022923)