Flora Textiles Ltd Directors Report.

Your Directors have pleasure in presenting to you the 28th financial statements together with audited balance sheet, profit and loss account and cash flow statement of the Company, for the year ended 31st March 2021.

Company Performance:

[Rs. In Lakhs]

Particulars 31.03.2021 31.03.2020
Revenue from Operation 114.04 34.03
Other Income 25.89 1.72
Total revenue from operation 139.93 35.75
Gross Profit/(loss)before interest and 114.56 7.25
Depreciation
Less : Interest 53.16 51.16
Profit before Depreciation 61.40 -43.91
Less: Depreciation 5.22 4.50
Net Profit/ loss for the Year 56.18 -48.41
Income Tax for earlier years 0.00 3.13
Profit / Loss for the year 56.18 -51.54
Opening balance Loss brought forward -1891.94 -1840.39
Closing Balance of Reserves A/c. -1835.76 -1891.94

Review of Operations:

During the year the business had a revenue of Rs.139.93 Lakhs (PY: Rs.35.75) which includes other income of Rs.25.89 Lakhs [Rs.1.72 Lakhs] . The profit after tax was at Rs.56.18 Lakhs (PY: -Rs. 51.16]. The increase of revenue from operation mainly due to receipt of revenue from commission.

Scheme of arrangement:

The company has borrowed loan unsecured loan from Nithya Estates and Developers India Private Limited and Minolta Securities Limited since 2008-2009 to rehabilitation and revival of the Company.

The Company has discussed with the Un-Secured Creditors to avoid the Company going into liquidation and the Un-Secured Creditors have come forward to accept a proposal involving transfer of Asset at Market value in favour of Nithya Estate and Developers India Private Limited, towards partial satisfaction of the debt and repay the loan amount to Minolta Securities Limited in 9 EMIs of Rs.25 Lakhs each and 10th EMI of Rs.27.17 Lakhs.

The board has approved the scheme of arrangement on the board meeting dated 30th June, 2021, with two unsecured creditors namely Nithya Estates and Developers India Private Limited and Minolta Securities Limited for the outstanding of Rs.11.50 Crores as on 31.03.2020 subject to the approval of the, stock exchange, SEBI, members and National Company Law Board, Southern Region Bench, Chennai and other statutory authorities.

The details of the draft scheme of arrangement, valuation report, recommendation from audit committee, independent directors committee, fariness opinion from SEBI registered valuer and other relevant documents are available in the website of the company. http://floratextiles.in/fsabse2021.pdf

Dividend:

Due to the continuous loss, the board of directors u n a b l e t o declared any dividend for the yearended 31st March 2021

Shares [As per the Companies (Share Capital and Debentures) Rules, 2014

a) Equity shares with differential rights:

The Company has not issued any equity share with differential rights during the period under review.

b) Buy Back of Securities:

The Company has not bought back any of its securities during the period under review.

c) Sweat Equity:

The Company has not issued any Sweat Equity Shares during the period under review.

d) Bonus Shares:

No Bonus Shares were issued during the period under review.

e) Employees Stock Option Plan:

The Company has not provided any Stock Option Scheme to the employees.

Reserves:

During the financial year, the company has not transferred any amount to reserve account.

Transfer of unclaimed Divided to Investor Education and Protection Fund

The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend declared and paid last years.

Directors

Mr.R Hemchand Gupta will retire by rotation at the ensuing Annual General Meeting under Section 152 ofthe Companies Act, 2013 and being eligible, he offers himself for re-appointment.

Deposits

The Company has neither accepted nor renewed any deposits during the year under review.

Key managerial personnel:

Ms Nidhi Gupta, Managing Director, Mr Hemant Kumar Gupta, CFO and Ms Kirtishree Agarwal Company Secretary are the key managerial personal as per Section 203 of the Companies Act, 2013.

Particulars of loans, guarantees or investments made under section 186 of the Companies Act, 2013

There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable.

Internal control system and their adequacy

The Company has an Internal Control System, Commensurate with its size, scale and complexity of its operations. Audit Committee reviews internal audit reports and oversees the internal control system of the Company.

Human resources

The HR strategy and initiatives of your Company are designed to effectively partner the business in the achievement of its ambitious growth plans and to build a strong leadership pipeline for the present and several years into the future.

Status of the company under SICA:

BIFR in its meeting held on 27/09/2012 has approved Modified Draft Rehabilitation Scheme. The board has taken necessary steps to implement the above said scheme.

Meetings

A Calendar of Meetings is prepared and circulated in advance to the Directors. The details of which are given in the Corporate Governance Report.

Details of Policy Developed and Implemented by the Company on its Corporate Social Responsibility Initiatives

The company is not been covered under Section 135 of the Companies Act, 2013. Hence this provision of Section 135 is not applicable.

Subsidiaries, Joint Ventures and Associate Companies

The Company does not have any Subsidiary, Joint venture or Associate Company during the year under review.

Declaration of Independent Directors

All the Independent Directors of the Company have furnished necessary declaration in terms of Section 149(6) of the Act affirming that they meet the criteria of independence as stipulated under the Act. In the opinion of the Board, all the Independent Directors fulfill the conditions specified in the Companies Act, 2013 and Rules made thereunder and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015 and are independent of the Management.

Details of Significant and material orders passed by the Regulators, Courts and Tribunals

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Companys operations in future.

Directors Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:

a) the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to 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 period and of the profit and loss 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 this Act 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) That proper internal financial control was followed by the company and that such internal financial controls are adequate and were operating effectively; and

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.

Policy on Appointment and Remuneration of Directors

Pursuant to Section 178(3) of the Companies Act, 2013 the Nomination and Remuneration Committee of the Board of the Company has formulated the criteria for Board nominations as well as policy on remuneration for Directors and employees of the Company

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.

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.

Related party transactions

All related party transactions that were entered during the year under review were on an arms length basis and were in ordinary course of business. All related party transactions are placed before the Audit Committee for approval. There are no materially significant related party transactions during the year which may have a potential conflict with the interest of the company at large. Necessary disclosures as required under Accounting Standard (AS 18) have been made in the notes to the Financial Statements.

Annual performance evaluation

In line with the criteria evolved by the Nomination and Remuneration Committee, the performance of all Directors, Committees, Chairman etc., have been valuated pursuant to the provisions of the Act, Listing Agreement and SEBI(LODR)Regulations, 2015

As part of the performance evaluation process, an evaluation questionnaire based on the criteria as finalized in consultation with the Directors together with supporting documents was circulated to all the Board members in advance. The Directors evaluated themselves, the Chairman, other Board Members, the Board as well as functioning of the Committees viz., Audit, Nomination & Remuneration, Risk Management, Stakeholders Relationship Committees on the basis of well- defined evaluation parameters as set out in the questionnaire. The duly evaluated questionnaire was received back from the Chairman and all the other Directors.

The Board reviewed the process of evaluation of the Board of Directors and its Committees including Chairman and the Individual Directors. The independent directors of the Company have also duly convened a separate meeting during the year for this purpose.

Vigil mechanism/ whistle blower policy

Pursuant to the requirements of Section 177 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has established a vigil mechanism (Whistle Blower Policy) for the employees and Directors as an avenue to voice concerns relating to unethical behavior actual or suspected fraud or violation of the Companys code of conduct.

The Ombudsperson appointed by the Board deals with the complaints received and ensures appropriate action. The mechanism also provides adequate safeguards against victimization of persons using the mechanism and provides direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. No employee was denied access to the Audit Committee.

Particulars of employees

There are no employees drawing salaries in excess of the limit prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rule, 2014.

Conservation of Energy, Technology Absorption, Foreign Exchange Earning and Outgo

The particulars required under Section 134(3) (m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 for the period ended on March 31ST, 2021 are as under:

A. Conservation of Energy: The company has no activity relating to conservation of energy or technology absorption, since its a service organization. Hence Conservation of energy and technology absorption does not apply to this company. However, adequate measures for conservation have been taken to reduce energy consumption.

B. The Company has not absorbed any technology

C. There was no foreign exchange earnings

D. There was no outgo of foreign exchange earnings

Policy on sexual harassment:

Suitable policy has been made and implemented by the company to prevent sexual harassment at workplace. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees including contractual, permanent, temporary, trainees are covered under this policy. During the financial period ended 31st March, 2021, the Company has not received any complaints pertaining to sexual harassment.

Auditors

The Members appointed M/s TV Subramanian and Associates (FRN No. 007433S) as the Statutory Auditors of the Company for a period of 5 years from the conclusion of 24th AGM (2017) till the conclusion of 29th AGM (2022).

The Company has received confirmation from the firm regarding their consent and eligibility under sections 139 and 141 of the Companies Act,2013 read with the Companies (Accounts) Rules, 2014 for appointment as the Auditors of the Company.

Annual Return

Pursuant to section 92(3) read with section 134(3)(a) of the Companies Act, 2013 the Annual return as on 31 March 2021 is available on the companys Website http://floratextiles.in/investors.html

Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the auditors / secretarial auditor in their reports

There were no qualifications, reservations or adverse remarks made by the Auditors in their report.

Mr A C Saravan, Practicing Company Secretary was appointed to undertake the Secretarial Audit of the Company. The Report of Secretarial Audit is annexed herewith as Annexure A.

Reply To Qualification Given By The Secretarial Auditor :

1) The Company is in the process of allotment of unsecured loan including share application money received as per BIFR order.

2) Due to technical issue in the MCA website, the company is unable to file form INC-22A and regularization of appointment of Mr INDARCHAND PRAJAPATHI [DIN 07655675] and Mr R HEMCHANDGUPTA [DIN 08270656]. The board has raised the compliant before MCA help desk and Registrar of Companies, Coimbatore

3) For other non compliances, the Board has taken all necessary steps to comply the same in future period.

Corporate governance

Your Company is committed to maintaining the standards of Corporate Governance. A report on Corporate Governance, along with a certificate from the Statutory Auditors on compliance with Corporate Governance norms forms a part of this report.

The Corporate Governance Report of your company as on 31.3.2021 is enclosed for your perusal as Annexure B.

Material changes and commitments

There are no material changes and commitments in the business operations of the Company from the financial year ended 31stMarch, 2021 to the date of signing of the Directors Report.

Acknowledgement

The Board wishes to place on record of their appreciation for the good work done by the employees, bankers and share holders of the company.

By Order of the Board
INDARCHAND PRAJAPATHI
Chairman
[DIN 07655675]
Date: 30.06.2021
Place: Coimbatore