Chitradurga Spintex Ltd Directors Report.

To,

The Members,

Your Directors have pleasure in presenting their 28th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended 31st March, 2019.

1. FINANCIAL SUMMARY OR HIGHLIGHTS/PERFORMANCE OF THE COMPANY

The Standalone financial statements for the year ended March 31, 2019 have been prepared in accordance with the Indian Accounting Standards (IND AS) notified under section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014. The financial statements under Section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014.

Financial Summary as under:

Particulars 2018-19 2017-18
Gross Income - -
Profit / (Loss) Before Interest and (7,67,920) (7,04,383)
Depreciation
Finance Charges - -
Gross Profit/(Loss) (7,67,920) (7,04,383)
Provision for Depreciation - -
Extraordinary Item - -
Net Profit/(Loss) Before Tax (7,67,920) (7,04,383)
Provision for Tax - -
Net Profit/(Loss) After Tax (7,67,920) (7,04,383)
Other Comprehensive Income 4,24,143 4,52,649
Balance of Profit brought forward - -
Balance available for appropriation - -
Proposed Dividend on Equity Shares - -
Tax on proposed Dividend - -
Transfer to General Reserve - -
Surplus carried to Balance Sheet (3,43,777) (2,51,734)

2. COMPANY S PERFORMANCE AFFAIR

Your Directors are positive about the Company s operations and making best efforts to implement the cost reduction measures to the feasible extent.

3. DIVIDEND

Considering the present financial status of the Company, your directors do not recommend any dividend for the year under report.

4. RESERVES AND SURPLUS

The balance of Profit & Loss statement amounting to Rs. (3,43,777)/- for Financial Year under review. The total reserves for the Financial Year 2018-19 is Rs. 67,41,349/-

5. SHARE CAPITAL

The total paid up share capital of the Company as on 31st March, 2019 is Rs. 46,10,300/- comprising of 4,61,030 Equity Shares of Rs. 10/- each.

6. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013.

7. MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year 5 (Five) Board Meetings and 4 (Four) Audit Committee Meetings were convened and held. The details of which are given as under.

Sr. No. Date Sr. No. Date
Board Meeting Audit Committee
1. 28th May, 2018 1. 28th May, 2018
2. 14th August, 2018 2. 14th August, 2018
3. 01st October, 2018 3. 14th November, 2018
4. 14th November, 2018 4. 13th February, 2019
5. 13th February, 2019

The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

8. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committee.

9. COMMITTEES OF THE BOARD

There are currently three committees of the Board, as following:

1) Audit Committee

The Audit Committee of the Company reviews the reports to be submitted with the Board of

Directors with respect of auditing and accounting matters. It also supervises the Company s financial reporting process. Due to resignation of directors, the composition of the Committee was reconstituted as under;

Sr. No. Name Category Designation
1 Mr. Prasannakumar Siddappa Independent Director Chairman
2 Ms. Namrata Malu* Independent Director Member
3 Mr. S. Rajshekharappa* Executive Director Member
4 Mr. Thippeswamy Siddappa Thippeswamy** Independent Director Member
5 Mr. Shivanna Chandrashekhar** Non-Executive Director Member

*Appointed w.e.f. 14th August, 2018

**Resigned from Directorship w.e.f. 14th August, 2018

2) Nomination and Remuneration Committee

Due to resignation of directors, the composition of the Committee was reconstituted as under;

Name Category Designation
1 Mr. Prasannakumar Siddappa Independent Director Chairman
2 Ms. Namrata Malu* Independent Director Member
3 Mr. S. Rajshekharappa* Executive Director Member
4 Mr. Thippeswamy Siddappa Independent Director Member
Thippeswamy**
5 Mr. Shivanna Non-Executive Director Member
Chandrashekhar**

*Appointed w.e.f. 14th August, 2018

**Resigned from Directorship w.e.f. 14th August, 2018

3) Stakeholders Relationship Committee

Due to resignation of directors, the composition of the Committee was reconstituted as under;

Name Category Designation
1 Mr. Prasannakumar Siddappa* Independent Director Chairman
2 Ms. Namrata Malu** Independent Director Member
3 Mr. S. Rajshekharappa** Executive Director Member
4 Mr. Shivanna Chandrashekhar*** Non-Executive Director Chairman
5 Mr. Thippeswamy Siddappa Thippeswamy*** Independent Director Member

*Appointed as Chairman w.e.f 14th August, 2018 **Appointed as Member w.e.f. 14th August, 2018 ***Resigned from Directorship w.e.f. 14th August, 2018

10. REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration.

11. DIRECTORS RESPONSIBILITY STATEMENT

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

a) In the preparation of the annual accounts, the applicable accounting standards have been followed.

b) The directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company for the year under review.

c) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The directors have prepared the annual accounts on a going concern basis.

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

12. AUDITORS

MNT & Associates LLP, Chartered Accountant, (FRN: W100115) is appointed as Statutory Auditors of the Company from conclusion of the Annual General Meeting [AGM] held in the year 2018 till the conclusion of 32nd Annual General Meeting to be held in the year 2023.

13. AUDITOR S REPORT

The Board has duly examined the Statutory Auditor s report on accounts which is self explanatory and clarifications wherever necessary, have been included in the Notes to Financial Statements of the Annual Report.

14. SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Act and Rules made there under, the Board has appointed Ms. Payal Tachak, proprietress of M/s. Payal Tachak & Associates, Practicing Company Secretary for the FY 2018-19.

The report of the Secretarial Auditors is enclosed as Annexure to this report.

Secretarial Auditor s observation and Management s explanation to the Auditor s observation a) Section 203(1) (ii) Non appointment of Company Secretary as Key Managerial Personnel

The Board would like to bring to your notice that, the Company has been trying to find prospective candidate for the post of Company Secretary on the best efforts basis, but the Company has not been successful.

b) Regulation 6 of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 Non appointment Qualified Company Secretary as Compliance Officer.

The Board has designated D M Shivananda Swamy as Compliance officer to take care of the compliances till the time Company finds suitable candidate for the post of Company Secretary.

c) Regulation 47 of the SEBI (Listing obligations and Disclosure Requirements) Regulation, 2015, Section 108 of the Companies Act 2013 read with Rule 20 of the Companies (Management and Administration), Rules, 2014 and Section 91 of the Companies Act 2013 read with Rule 10 of the Companies (Management and Administration) Rules, 2014 Publication of Results Audited and Unaudited in news paper, Voting Through Electronic means, News Paper Advertisement for Book Closure.

The Company has not been doing that, since the financial position of the Company does not allow Board to incur such expenditure keeping in mind that the results are made available for investors and market through Stock Exchange. The Company, on timely basis submits the results to the Exchange to bring the information in public domain.

d) 100% Promoter Shareholding in Demat Form - SEBI Circular SEBI/Cir/ISD/05/2011 dated 30th September, 2011 and SEBI Circular SEBI/Cir/ISD/03/2011 dated 17th June, 2011.

The management is trying to do the needful to comply with the said provisions.

e) Regulation 14 of the SEBI (Listing Obligations and Disclosures Requirements) Reg. 2015- Payment of Annual Listing fees to Stock Exchange within 30 days from Financial Year end.

The Company will make the payment of Listing fees to the BSE Limited for Financial Year 2019-20. Company will make sure to do the payments within due dates in future.

However, the Company would try and comply with all the provisions to the fullest extent. The report of the Secretarial Auditor is enclosed as Annexure II to this report.

15. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD MEETINGS AND GENERAL

MEETINGS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

16. DISCLOSURES UNDER SECTION 22 OF THE SEXUAL HARASSMENT OF WOMEN AT

WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an anti sexual harassment policy in line with the requirements of the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 ("SH Act"). Internal

Complaints Committees have been set up in accordance with the provisions of SH Act at the work place to redress sexual harassment compliant received. All employees (permanent or contractual trainees) are covered under the policy. No compliant was received from any employees of the Company or otherwise during the financial year 2018-19 and hence no complaint is outstanding as on 31 March, 2019 for redressal.

17. VIGIL MECHANISM

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company under investors/policy documents/Vigil Mechanism Policy link.

18. RISK MANAGEMENT POLICY

The Company has laid down a well defined Risk Management Policy. The Board periodically reviews the risk and suggests steps to be taken to control and mitigate the same through a proper defined framework.

19. EXTRACT OF ANNUAL RETURN

As required pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of Annual Return in MGT 9 as a part of this Annual Report as ANNEXURE I.

20. 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 code laid down by the Board is known as "Code of Business Conduct" which forms an Appendix to the Code. The Code has been posted on the Company s website.

21. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has an effective internal control and risk-mitigation system, which are constantly assessed and strengthened with new/revised standards operating procedures. The Company s internal control system is commensurate to the size, scale and complexities of its Operations.

22. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company has not entered any contracts or arrangements with related parties specified under Section 188 of Companies Act, 2013.

23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN

EXCHANGE EARNINGS AND OUTGO

Conservation of energy, technology absorption, foreign exchange earnings and outgo are nil during the year.

24. INDUSTRIAL RELATIONS

During the year under review, your Company maintained cordial relationship with employees at all levels.

25. LISTING WITH STOCK EXCHANGES

The Equity shares of the Company are currently listed on BSE Limited.

26. OTHER INFORMATION

Your Directors hereby states that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. During the year under the review, the Company has not given any new loans and not provided any Guarantees or made Investments under the provisions of Section 186 of the Companies Act, 2013;

2. The Provision of Section 135 of the Act with respect to Corporate Social Responsibility (CSR) is not applicable to the Company, hence, there is no need to develop policy on CSR and take initiative thereon;

3. The Company do not have any subsidiary, joint venture or, associate Company, hence, no need to state anything about the same;

4. The Company has not accepted deposits covered under Chapter V of the Act;

5. No significant material orders were passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.

6. Since, the Company having paid-up capital less than the threshold provided under Regulation 27(2) of Listing Regulations 2015, hence, the Company need not required to address Reports on Corporate Governance.

7. There are no employees who are in receipt of salary in excess of the limits prescribed under Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

8. The Company has not entered any contracts or arrangements with related parties specified under Section 188 of Companies Act, 2013.

27. ACKNOWLEDGEMENTS

An acknowledgement to all with whose help, cooperation and hard work the Company is able to achieve the results.