Adinath Textiles Ltd Directors Report.

Your Directors are pleased to present the 39th Annual Report on the business and operations of the Company along with Audited Financial Statements for the year ended 31st March, 2019.

FINANCIAL RESULTS
(Rs. in lakhs)
Particulars 2018-19 2017-18
Income from Operations 74.47 120.73
Other Income 117.32 122.24
Profit/ (Loss) before interest & depreciation (35.08) (1.86)
Less Interest 5.83 8.20
Gross Profit/ (Loss) (40.91) (10.06)
Depreciation and amortization expense 20.54 19.12
Profit/ (Loss) Before Tax (61.45) (29.18)
Provision For Taxation (including deferred tax) (15.86) (7.54)
Net Profit/ (Loss) after Tax (45.59) (21.64)

CORPORATE REVIEW

During the year under consideration the income from operations of the company is RS.74.47 lakhs against RS.120.73 lakhs in the last Financial Year. Other Income of the company is RS.117.32 lakhs in comparison to RS.122.24 lakhs in previous year.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2019 was RS.681.44 lakhs. During the year under review, the Company has not issued/granted any shares, stock options or sweat equity shares.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

OTHER EQUITY

The Company does not propose to carry any amount to any reserves.

DIVIDEND

Due to absence of profits, your Directors are unable to recommend any dividend for the year under review.

DEPOSITS

During the year under review the company has not accepted any deposits within the meaning of section 73 of the Companies Act, 2013 and the rules made there under.

NUMBER OF MEETINGS HELD

The details of Board and Committee Meetings are given in the Corporate Governance Report.

DIRECTORS

In compliance with the provisions of Section 152 of the Companies Act, 2013 read with Articles of Association of the company, Sh. Rajneesh Oswal, Chairman & Managing Director will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, has offered himself for reappointment. The Board recommends his reappointment.

The first term of appointment of Sh. Surinder Kumar Sekhri, Independent Director of the Company is valid till 12th August, 2019. The Nomination & Remuneration Committee in its meeting held on 27th May, 2019 has recommended to the Board the re-appointment of Sh. Surinder Kumar Sekhri as an Independent Director for a second term. The Board of Directors in its meeting held on 27th May, 2019 has approved and recommended the re-appointment of Sh. Surinder Kumar Sekhri as an Independent Director for a second term of five years commencing from 13th August, 2019.

Sh. Rajneesh Oswal was re-appointed as Chairman & Managing Director of the Company for a period of five years which is valid till 30th June, 2019. The Nomination & Remuneration Committee in its meeting held on 27th May, 2019 has recommended to the Board the re-appointment of Sh. Rajneesh Oswal as Chairman & Managing Director. The Board of Directors in its meeting held on 27th May, 2019 has approved and recommended the re-appointment of Sh. Rajneesh Oswal as Chairman & Managing Director for a further period of five years commencing from 1st July, 2019.

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 Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

BOARD EVALUATION

Pursuant to provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out an annual performance evaluation of its own performance and the performance of the individual Directors as well as the evaluation of the working of its committees. The manner in which the evaluation was carried out has been explained in the Corporate Governance.

KEY MANAGERIAL PERSONNEL

There was no change in the Key Managerial Personnel during the year under review.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their Remuneration. The said policy has been uploaded on the website of the Company. The Key provisions of Nomination and Remuneration policy are appended as an Annexure I to the Boards report.

AUDIT COMMITTEE

The company has duly constituted Audit Committee, the scope of which is quite comprehensive and is in conformity with the provisions of the Companies Act, 2013 and Listing Regulations. The composition of the Audit Committee is given in Corporate Governance Report.

All the recommendations of the Audit Committee were accepted by the Board.

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted the Whistle blower Policy/Vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Companys Code of Conduct and Ethics. Such mechanism/policy is also uploaded on the website of the Company.

STATUTORY AUDITORS

The Company in its 37th Annual General Meeting had approved the appointment of M/s. Malhotra Manik & Associates, Chartered Accountants as statutory auditors of the Company to hold office till the conclusion oRs. 42nd Annual General Meeting.

The report of the statutory auditors read with notes on accounts is self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation or adverse remarks.

COST AUDIT

Cost audit for the financial year 2018-19 was not applicable to the Company hence no cost auditor was appointed for cost audit purposes.

SECRETARIAL AUDIT

M/s P. S. Bathla & Associates, Practising Company Secretaries, Ludhiana, were appointed to conduct the secretarial audit of the Company for the financial year 2018-19, as required under Section 204 of the Companies Act, 2013 and Rules made there under. The secretarial audit report for FY 2018-19 is appended as an Annexure II to the Boards report.

The Secretarial auditors report for the year under review requires no comments.

The Board has re-appointed M/s P. S. Bathla & Associates, Practising Company Secretaries, Ludhiana as secretarial auditor of the Company for the financial year 2019-20.

RELATED PARTY TRANSACTIONS

There was no material contract or arrangement or transactions with Related Party as referred to in sub-section (1) of Section 188 of the Companies Act, 2013 during the year. Thus, disclosure in form AOC-2 is not required.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted 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 there under and the Listing Regulations.

This Policy was considered and approved by the Board has been uploaded on the website of the Company at http://www.adinathtextiles.com/pdf/Related_Party_Transaction_Policy.pdf

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 (12) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as an Annexure III and forms an integral part of this report.

EXTRACT OF ANNUAL RETURN

In accordance with Section 134(3) (a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as an Annexure IV to the Boards report.

INDUSTRIAL RELATIONS

The Company maintained healthy, cordial and harmonious industrial relations at all levels.

DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Company has been addressing various risks through well defined risk management policy/procedures, which in the opinion of the Board may threaten the existence of the Company.

INTERNAL FINANCIAL CONTROL SYSTEMS

The Company has laid down adequate internal financial controls with reference to financial statements. During the year such controls were tested and no material weakness in their operating effectiveness was observed.

ASSOCIATES AND SUBSIDIARIES

The Company has no Associates & Subsidiaries as on March 31, 2019.

CORPORATE GOVERNANCE

As per the provisions of Listing Regulations, a separate Report on Corporate Governance practices followed by the Company together with a Certificate from the Practicing Company Secretary confirming compliance forms part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 the particulars relating to conservation of energy, technology, absorption and foreign exchange earnings and outgo is appended as an Annexure V to the Boards Report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts for the year ended 31st March, 2019, the applicable accounting standards have been followed and there has been no 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 account of the company for that period;

(c) the directors had 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 fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(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.

GENERAL DISCLOSURES

The Company has already complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There were no complaints/cases reported with internal complaints committee formed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ACKNOWLEDGMENTS

Your Directors wish to place on record their appreciation for the dedicated work and co-operation extended by all the employees. Your Directors also wish to record their gratitude to the shareholders, Customers and Suppliers for their valuable support.

On Behalf of the Board
For Adinath Textiles Limited
Sd/-
Place : Ludhiana Rajneesh Oswal
Date : 27 May, 2019 Chairman & Managing Director
(DIN : 00002668)

Annexure I

NOMINATION AND REMUNERATION POLICY

The Key provisions of the Nomination and Remuneration policy are given below:

The guiding principle is that the remuneration and the other terms of employment shall be competitive in order to ensure that the Company can attract and retain competent Executives.

The Nomination and Remuneration policy for executives reflects the remuneration philosophy and principles of the Adinath Textiles Limited. When determining the remuneration policy and arrangements for Executive Directors/KMPs, the Nomination and Remuneration Committee shall consider pay and employment conditions with peers / elsewhere in the competitive market to ensure that pay structures are appropriately aligned and that levels of remuneration remain appropriate in this context.

The Committee while designing the remuneration package considers the level and composition of remuneration to be reasonable and sufficient to attract, retain and motivate the person to ensure the quality required to run the company successfully.

The Nomination and Remuneration Committee while considering a remuneration package must ensure a balanced approach reflecting short and long term performance objectives appropriate to the working of the company and its goals.

The Committee shall consider that a successful remuneration policy must ensure that any increase in the remuneration package is linked to the achievement of corporate performance targets and a strong alignment of interest with stakeholders.

Nomination and Remuneration policy is guided by a common reward framework and set of principles and objectives as particularly envisaged under section 178 of the Companies Act 2013, inter alia principles pertaining to determining qualifications, positives attributes, integrity and independence etc.

Remuneration packages are designed to attract high-caliber executives in a competitive market and remunerate executives fairly and responsibly. The remuneration shall be competitive and based on the individual responsibilities and performance.

Remuneration is designed to motivate delivery of our key business strategies, create a strong performance-orientated environment and reward achievement of meaningful targets over the short- and long-term.

Executive remuneration shall be proposed by the Committee and subsequently approved by the Board of Directors. Executive remuneration is evaluated annually against performance and a benchmark of other companies, which in size and complexity are similar to Adinath Textiles Limited. Benchmark information is obtained from recognized compensation service consultancies/other relevant sources. In determining packages of remuneration, the Committee may consult with the Chairman/ Managing Director as appropriate.

Information on the total remuneration of members of the Companys Board of Directors and KMPs shall be disclosed in the Companys Annual Report.

The Company may grant any advance salary/loan to employees of the Company at concessional/NIL interest rates as it deems fit subject to tax laws.

The Board may delegate the appointment and remuneration powers in case of Sr. Management Personnel (except KMPs and Directors) to the Managing Director by way of Board Resolution.

The appointment letters of all Sr. Management Personnel, KMPs and Directors shall draw reference to the fact that the appointment and remuneration is in accordance with the Nomination and Remuneration Policy of the Company.