Adinath Textiles Ltd Directors Report.

Your Directors are pleased to present the 40th Annual Report on the business and operations of the Company along with Audited Financial Statements for the year ended 31st March, 2020

FINANCIAL RESULTS

(Rs in lakhs)
Particulars 2019-20 2018-19
Income from Operations - 74.47
Other Income 138.71 117.32
Profit/ (Loss) before interest & depreciation 19.36 (35.08)
Less Interest 0.12 5.83
Gross Profit/ (Loss) 19.24 (40.91)
Depreciation and amortization expense 18.96 20.54
Profit/ (Loss) Before Tax 0.28 (61.45)
Provision For Taxation (including deferred tax) (1.63) (15.86)
Profit/ (Loss) after Tax from continuing opreations 1.91 (45.59)
Profit / (Loss) from discontinued operations (8.73) -
Profit / (Loss) for the year (6.82) (45.59)

CORPORATE REVIEW

Due to no job work orders and accumulating losses the Companys Plant at Village Bholapur, Chandigarh Road, Ludhiana, has been shut down and the Company has discontinued its operations during the FY 2019-20. The income of F15.66 Lacs and expenses of F24.39 Lacs relating to the discontinued period have been shown under the head "Profit/(Loss) for the year from discontinued operations" as per Indian Accounting Standards. The other income of the Company during the financial year 2019-20 is F138.71 Lacs in comparison to F117.32 Lacs for the previous year.

In view of outbreak of Corona virus disease 2019 (COVID-19) which has been declared as a pandemic by World Health Organization and subsequent lockdown imposed by the Central and State Government(s) in India, the Company is closely monitoring the impact of this pandemic and believes that there has been no significant adverse impact on its financial position for the financial year ended 31st March, 2020 as its manufacturing plant located at Village Bholapur, Chandigarh Road, Ludhiana had already been closed prior to imposition of lockdown.

SHARE CAPITAL

The paid up Equity Share Capital as on March 31, 2020 was F681.44 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, Mr. Vishal Oswal, Vice-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.

Mr. Vishal Oswal was re-appointed as Vice-Chairman & Managing Director of the Company for a period of three years which was valid till 30th April, 2020. The Nomination & Remuneration Committee in its meeting held on 27th April, 2020 has recommended to the Board the re-appointment of Mr. Vishal Oswal as Vice-Chairman & Managing Director. The Board of Directors in its meeting held on 27th April, 2020 has approved and recommended the re-appointment of Mr. Vishal Oswal as Vice-Chairman & Managing Director for a further period of five years commencing from 1st May, 2020. 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 of 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 2019-20 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 2019-20, as required under Section 204 of the Companies Act, 2013 and Rules made there under. The secretarial audit report for FY 2019-20 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 2020-21.

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.

EXTRACTOFANNUALRETURN

In accordance with Section 134(3) (a) of the Companies Act, 2013, an extract of the annual return in the prescribed format forming part of the Directors Report is available on the website of the company at www.adinathtextiles.com

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 31,2020.

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 IV 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, 2020, 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.

ADINATH TEXTILES LIMITED

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 : 29th July, 2020 Chairman & Managing Director
(DIN : 00002668)