Kandagiri Spinning Mills Ltd Directors Report.

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Your directors hereunder submit their 44 Annual Report together with the audited accounts for the year ended March 31, 2020 (the year).

Performance Highlights 2019-20 2018-19

(Rupees in Lakhs)

Export - Direct
- Merchandise
Domestic 2657 6939
Other Operating income 16
Total Turnover 2657 6955
Gross profit/(Loss) (i.e., Profit/(Loss) before interest and depreciation) (217) (622)
Cash profit/(Loss) (i.e., Profit / (Loss) before depreciation) (719) (1262)
Profit/(Loss) before exceptional Item and tax (989) (1583)
Exceptional Item:
Impairment loss on assets (276)
Impairment loss on capital advances (49)
Profit/(Loss) after exceptional Item (before tax) – PBT (1038) (1859)
Tax Expense:
Current Tax - Current year 40
- MAT credit utilised 632
Deferred tax (474)
Profit/(Loss) after exceptional Item and tax – PAT (1236) (1859)
Earnings per share - basic and diluted Rs. (32.10) (48.31)

Dividend

In view of the loss incurred during the year, no dividend is recommended by your Board of Directors for the financial year 2019-20.

Retained Earnings

The aggregate of current year loss of Rs 1235.61 lakhs and other comprehensive income of Rs 79.61 lakhs works out to Rs 1156.00 lakhs and had been added to the negative retaining earnings as at the beginning of the year of Rs 2563.60 lakhs and the negative retained earnings aggregates to Rs 3719.60 lakhs as at the end of the year.

Financial Performance with respect to Operational Performance:

During the financial year 2019-20 your Companys turnover was Rs 2657 lakhs as against the previous year turnover of Rs 6955 lakhs. The Company has incurred loss of Rs 989 lakhs in the financial year 2019-20 as against the previous year loss of Rs 1583 lakhs in the financial year 2018-19.

The impairment loss on capital advances of Rs 49 lakhs is added to the current year loss of Rs 989 lakhs and the loss before tax is Rs 1038 lakhs and loss after tax is Rs 1236 lakhs.

Because of continuous cash loss incurred over the past periods and adverse market situation of fluctuating and abnormal increase in cotton prices coupled with sluggish demand for yarn with lower sale prices, the Company had been incurring substantial operating losses from the past three to four years. The cash flow of the Company is affected and the working capital of the Company had been eroded and made difficult for funding the operations of the Company. Necessary funds for retirement of dues and settlement of liabilities have been provided by the Directors/Promoters. Board tried at its best to find out the ways to overcome the financial strain and to pay back the bank loans. To overcome the financial crisis situation and to reduce nearly 50% of the bank debts, pursuant to approval earlier obtained from shareholders for authorizing the Board for sale of some of the assets of the Company vide postal Ballot resolution dated 10.11.2016, Company decided to sell part of its assets viz., Unit-II and partial land and building of Unit-I last year.

Further, the Board of Directors had initiated a number of steps to reduce fixed costs, recover higher raw material costs through higher price realization of Yarn and negotiate lower borrowing/finance cost. These efforts could not effect a turnaround in the fortunes of the company and in the light of erosion in net worth in the fourth quarter of financial year 2019-20, the refusal of bankers to lend further loans and their pressure to settle their dues and prevalent economic conditions, the Board took strategic decision of closing the entire Bank debts and retire other liabilities to the extent possible by sale of plant and machineries of Unit-I of the Company in addition to referred proposal of sale of Unit-II and part of land and building of the Company and further to lease the land and building of Unit-I of the Company where the Plant and machinery is situated. Accordingly, by obtaining necessary approvals from shareholders through Postal Ballot resolution dt. 15.02.2020, in March 2020, the sale of Plant and Machinery and the referred assets were executed and the company ceased its yarn production and has let out the immovable property on lease.

Using the sale proceeds of all the referred assets (Unit-II, Unit-I part of land and building and Unit-I Plant and Machinery), the Company had closed its entire bank debts and retired the other liabilities to the extent possible. The lease is operational from the month of June, 2020 and the lease rent receivables is the main income for the Company. By closing all the Bank debts and with no operating expenditure and having a regular lease income, the Company has now become a risk-free and Bank debt-free unit.

MANAGEMENT DISCUSSION AND ANALYSIS

(a) Industry structure and developments and future outlook:

The Indian cotton spinning industry, which was already witnessing turbulent situation of fluctuating cotton prices coupled with lower demand for yarn is now confronted with yet another challenge of prevailing covid-19 pandemic situation. This has followed shutdown of manufacturing units and the Indian cotton yarn industry is likely to witness a extremely challenging situation of decline in revenue and lower demand in both the domestic and export markets. The prevailing covid-19 outbreak which has created a global pandemic situation as explained above has justified the decision of the Board in discharging the entire Bank and other liabilities to the extent possible by sale of assets and leasing its immoveable property to have a regular lease income and making the Company a risk-free and Bank debt free unit.

(b) Strategies and Future plans

The Company has now come out of the stress situation and been able to concentrate fully on the revival process. The cessation of Production of Yarn is to be viewed as an interim drastic measure to wipe out losses, protect shareholders interests and retire all the bank liabilities. The quality of goods produced hitherto by company has generated goodwill and brand image that the Board of Directors hope to continue to use by engaging inter-alia in trading in Yarn. The Company is exploring all the possibilities to revive in the near future.

(d) Risks and Concerns

Your Company has devised risk management policy which involves identification of the business risks as well as the financial risks, its evaluation, monitoring, reporting and mitigation measures. The Audit Committee and Board of Directors of the Company periodically review the risk management policy of the Company so that management controls the risk through properly defined network. Head of Departments are responsible for implementation of the risk management system as may be applicable to their respective areas of functioning and report to the Board and the Audit Committee. The details of risk management mechanism and key risks faced by the Company are enumerated in the risk management policy. Risk management policy is uploaded in the companys website www.kandagirimills.com.

(e) Internal control systems

The Company has in place a well established internal control procedure covering various areas such as procurement of raw materials, production planning, quality control, maintenance planning, marketing, cost management and debt servicing. Necessary checks and balances have been instituted for timely correction with an effective internal audit system.

(f) Human resources management

Employees are your companys most valuable asset. Your Company continues to create a favourable environment at work place.

The company also recognises the importance of training and consequently deputes its work force to various work related courses/seminars including important areas like Total Quality Management (TQM), Technical skills etc. The fact that the relationship with the employees continued to be cordial is testimony to the companys ability to retain high quality workforce.

(g) Environmental Protection, Health and Safety (EHS)

EHS continues to receive the highest priority in all operational and functional areas at all locations of your Company. Systematic process safety analysis, audits, periodic safety inspections are carried out by expert agencies and suitable control measures adopted for ensuring safe operations at the site. Various processes as required for Pollution Control and Environmental Protection are strictly adhered to.

(h) Corporate Social Responsibility

Since the Company has no average net profit calculated in accordance with the provisions of the Companies Act, 2013, there was no CSR Obligation for the FY 2019-20. CSR Disclosure in prescribed format is annexed with this report and forms part of this report.

The Board of Directors had constituted CSR committee in the year 2014, devised CSR policy and spent CSR expenditure in accordance with the provisions of section 135 of the Companies Act, 2013. Eventhough the Company has come out attracting the specified turnover/networth/profit criteria in the subsequent years for CSR applicability as stated under the provisions of section 135 of the Companies Act, 2013 read with the rules framed thereunder, on the basis for continuation of applicability of CSR provisions for three consecutive years, the Company continued the existence and functioning of CSR committee upto the FY 2019-20. As the CSR provisions became inapplicable to the Company, the CSR Committee was dissolved by the Board with effect from 18.06.2020.

( .i.) Changes in Key ratios

Details of significant changes on following ratios (i.e., changes if 25 % or more as compared to immediately previous financial year

FY 2019-20 FY 2018-19 change change%
a. Debtors turnover ratio 8.78 24.20 (15.42) (63.72%)
b. Inventory turnover ratio 33.51 4.59 28.92 (630.40%)
c. Interest coverage ratio (0.43) (0.97) 0.54 (55.49%)
d. Current ratio 0.36 0.38 (0.02) (6.30%)
e. Debt equity ratio 3.86 0.93 2.93 314.67%
f. Operating profit margin % (8.17%) (8.93%) 0.76%
g. Net profit margin % (39.05%) (26.74%) (12.31%)
h. Return on net worth (222.15%) (310.01%) 532.16%

Explanations

By sale of assets of the Company, the Company has closed its entire Bank debts and other liabilities to the extent possible. Further the Company has ceased its spinning business activity and the extent possible has disposed of all inventories at available prices. Because of these reasons, there had been significant changes in the key ratios as compared to previous year.

Change in nature of business

As explained earlier, by obtaining requisite approvals, the Company on 16.03.2020 had sold the spinning plant and Machinery and ceased the yarn production activity and has let out the immovable property for lease and the Company will be having the lease rent receivables as its main business income. The object clause of the Memorandum of Association of the Company is suitably altered to include the leasing business clause. Further, having generated goodwill and brand image for the quality of goods produced hitherto by company that the Board of Directors hope to continue to use by engaging inter-alia in trading in Yarn.

Extract of Annual Return

The extract of annual return in Form MGT – 9 has been annexed with this report and forms part of this report.

Number of Board Meetings

The details pertaining to meetings of the Board has been explained under Corporate Governance Report annexed to the directors report and forms part of this report.

Establishment of Vigil Mechanism

The Company has established a vigil mechanism for Directors and employees to report their genuine concerns. T h e p o l i c y h a s b e e n u p l o a d e d o n t h e C o m p a n y s w e b s i t e u n d e r t h e w e b l i n k : http://www.kandagirimills.com/investors/ksml2014-wbp.pdf

Declaration by Independent Directors

Independent directors of the Company have submitted a declaration that each of them meets the criteria of independence as provided in Sub-Section (6) of Section 149 of the Act. Further, there has been no change in the circumstances which may affect their status as Independent director during the year.

Compliance with Secretarial Standards

The Company has adhered compliance on applicable Secretarial Standards.

Audit Committee

Details of Composition of Audit Committee are covered under Corporate Governance Report annexed with this report and forms part of this report. Further, during this year all the recommendations of the Audit Committee have been accepted by the Board.

Policy of Directors Appointment and Remuneration

Companys policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178(3) of the Act are covered under Nomination and Remuneration Policy and it is available in the web-link of the Company http://www.kandagirimills.com/investors/ksml2015-nrp.pdf. Further, information about elements of remuneration package of individual directors is provided in the extract of Annual Return as provided under Section 92(3) of the Act, in prescribed form MGT-9 annexed with this report and forms part of this Report.

Independent Auditors Report and Secretarial Auditor Report

Independent Auditor has pointed out delay in repayment of Bank term loan principal and interest dues to the Bankers. With respect to delay in repayment of Bank term loan principal and interest dues, your Directors wish to state that due to cash flow constraints there was delay in repayment of Bank dues which has been subsequently paid off. Further, the Company has settled its entire Bank liabilities.

Company has appointed M/s B. K. Sundaram & Associates, Practising Company Secretaries as Secretarial Auditors, to conduct Secretarial Audit particularly with reference to compliance with Companies Act, 2013, and relevant SEBI Regulations for the financial year 2019-20 The report of the Secretarial Audit for the financial year 2019-20 in FORM MR-3 is annexed to this report and forms part of this report.

The Independent Auditors report and Secretarial Audit report contains qualified opinion with respect to Material uncertainty related to going concern, the Management explanation provided is as follows:

"The company has been incurring losses over the years and upto the third quarter of the current year. However the networth had remained positive and consequently, the yarn/textile business continued to be carried on. The Board of Directors had initiated a number of steps to reduce fixed costs, recover higher raw material costs through higher price realization of Yarn and negotiate lower borrowing/finance cost. These efforts could not effect a turnaround in the fortunes of the company and in the light of erosion in net worth in the fourth quarter, the refusal of bankers to lend further loans and their pressure to settle their dues and prevalent economic conditions, the company decided in March 2020 to cease yarn production, sell the Plant and Machinery, lease the immovable property and retire the liabilities to the extent possible. The Stock exchange and other regulatory authorities have been duly informed. It may also be recalled that necessary approvals from the shareholders for disposal of assets had already been obtained.

Necessary funds for retirement of dues and settlement of liabilities have been provided by the Directors/Promoters.

The quality of goods produced hitherto by company has earned goodwill and brand image that the Board of Directors hope to continue to engage inter-alia in trading in Yarn. The cessation of Production of Yarn is thus to be viewed as an interim drastic measure to stem losses, protect shareholders interests and retire all the bank liabilities to maintain the reputation and credit ratings of the company. The situation arising out of Covid-19 Pandemic has justified the decision of the Board of Directors. The lease rentals from lease of Land and Building and the assurance of infusion by the Promoters of further interest-free funds as and when deemed necessary will ensure that all remaining liabilities will be fully discharged and accordingly, the Board of Directors deem it fit to continue adoption of Going Concern Concept in preparation of the financial statements although the Statutory auditors have qualified their opinion with respect to the same the lease rentals from lease of land and building and the assurance of infusion by the promoters of further interest free funds as and when deemed necessary will ensure that all remaining liabilities will be fully discharged and accordingly the Board of Directors deem it fit to continue adoption of going concern concept in preparation of the financial statements provided in note 45 of the notes to the Standalone financial statements and can be referred therewith."

Particulars of Employees

The information required under section 197 of the Act and rules made there-under, in respect of employees of as shown below:

(a) Employed throughout the year and in receipt of remuneration aggregating to Rs.1,02,00,000 or more - Nil

(b) Employed for part of the year and in receipt of remuneration of Rs.8,50,000 or more per month - Nil Note : Remuneration includes salary and value of perquisites and nature of employment is contractual.

Managerial Remuneration

Statistical Disclosures pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 with subsequent amendments thereto is annexed with this report and forms part of this report.

Related Party Transactions

Transactions entered with related parties have been explained in Form AOC -2 annexed with this report and forms part of this report. Further, Policy on dealing with Related Party Transactions has been uploaded on the Companys website, under the web link: http://www.kandagirimills.com/investors/ksml2014-rptp.pdf

Board Evaluation

In accordance with the provisions of Companies Act, 2013 and SEBI (LODR) Regulations, 2015 read with "Guidelines on Board Evaluation issued by SEBI vide its Circular dt. January 5, 2017, In the separate meeting of the Independent directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated taking into account the views of executive directors and non-executive directors.

The same was discussed and noted by the Board at the subsequent Board Meeting. Further, Board carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of Companies Act, 2013 and SEBI (LODR) Regulations, 2015 read with "Guidelines on Board Evaluation issued by SEBI vide its Circular dt. January 5, 2017.

The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as the Board Composition and structure, effectiveness of the Board processes, information and functioning etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings etc. The Independent Directors were evaluated without the presence of the director getting evaluated.

None of the Independent Directors has been proposed for reappointment this year.

Outcome of evaluation process

Based on inputs received from the members, it emerged that the Board had a good mix of competency, experience, qualifications and diversity. Each Board member contributed in his/her own manner to the collective wisdom of the Board, keeping in mind his/her own background and experience. The necessary disclosures under SEBI Regulations are given hereunder

( .i.) Previous year observation and action taken:

(a) To ensure availability of funds for the effective functioning of the Company

(b) Need of strategy and performance evaluation of the Company

( .c.) Recruitment of employees in all the key areas

The above are the previous year observations, the required actions were taken by the Company. Based on the above observations and other aspects as discussed in the Management Discussion and Analysis report, the following observations were made in the current year

(ii) Current year Observations of Board evaluation (based on previous year) and proposed actions to be carried out

Strategic action plan to close all the liabilities of the Company as suggested by the Board, need to be implemented.

The Company has closed the entire Bank liabilities and the other liabilities to the extent applicable as discussed in Management Discussion and Analysis Report

Familiarisation Programme of the Independent Directors

Periodic presentations are made by Senior Management, Statutory and Internal Auditors at the Board / Committee meetings on business and performance updates of the Company, global business environment, business risks and its mitigation strategy, impact of regulatory changes on strategy etc. Updates on relevant statutory changes encompassing important laws are regularly intimated to the Independent directors.

Deposits

The following are the details of fixed deposits accepted from the shareholders covered under Chapter V of the Act:

.i. Deposits at the beginning of the year on 01 st April, 2019: Rs 58.44 lakhs ii. Deposits Accepted from shareholders during the year (2019 - 20): NIL iii. Deposits repaid during the year (2019-20): Rs 33.49 lakhs

iv. Deposits outstanding at the end of the financial year on 31 st March, 2020: Rs 24.95 lakhs v. Remained unpaid or unclaimed as at the end of the year : NIL vi. Any default in repayment of deposits or payment of interest thereon during the year: NIL

Company has duly complied with the provisions of section 73 of the Companies Act, 2013 read with relevant rules with respect to fixed deposits.

The following are the details of fixed deposits accepted from the directors:

.i. Deposits at the beginning of the year on 01 st April, 2019: Rs 1443.33 lakhs ii. Deposits Accepted from shareholders during the year (2019 - 20): Rs 2360.45 lakhs iii. Deposits repaid during the year (2019-20): Rs 2296.81 lakhs

iv. Deposits outstanding at the end of the financial year on 31st March, 2020: Rs 1506.97 lakhs

Cost Audit Report

Cost Audit Report for the FY 2018-19 in XBRL format was filed with MCA on 06.09.2019 vide SRN H87360665. CMA K.M. Krishnamurthy, Cost Accountants were appointed as Cost Auditor of the Company for the FY 2019-20 and the Cost Audit report for the year 2019-20 in XBRL format will be filed with MCA well within the due date. In accordance with the provisions of section 148 of the companies Act, 2013, the cost records are made and maintained by the Company.

The Company was under applicability of Cost Audit in accordance with the provisions of section 148 of the Companies Act, 2013 read with Cost Audit rules in accordance with the turnover requirements upto the FY 2015-16. Though the turnover of the Company was reduced to below Rs. 100 crore from the FY 2016-17, in accordance with the clarifications issued by Institute of Cost Accountants of India vide Frequently Asked Questions (FAQs) dt. 19.03.2015 on applicability of Maintenance of Cost Accounting Records and Cost Audit under Companies Act, 2013 by the Companies on continuous basis, the cost audit is carried out till the FY 2019-20. Now, since the Company has closed the spinning business operations w.e.f 16.03.2020 and also, the Company is already outside the ambit of applicability of cost audit based on the turnover requirements, on the recommendation of the Audit Committee, the Board has decided for non-continuance of cost audit from the FY 2020-21. Accordingly, the Company is not continuing the Cost Audit from the FY 2020-21.

Directors

At the 43rd AGM of the Company held on 11.08.2019, Independent Directors Sri. S. Gnanashekaran and Sri. Kameshwar M. Bhat were reappointed as Independent Directors for five consecutive years from 11.08.2019 to 10.08.2024. Independent Directors Dr. V. Sekar, Dr. R. Ramarathnam and Sri D. Balasundaram were

appointed at the 41st AGM of the Company held on 12.08.2017 to hold office upto the conclusion of 45th AGM of the Company.

During the FY 2019-20, Independent Director Dr. R. Ramarathnam and Non-Executive Director Dr. A. Sarayu resigned from the Board with effect from 11.08.2019 and 10.11.2019 respectively, because of their preoccupation with other business affairs.

Further, since the Company has closed its core business activity of spinning business, settled all bank liabilities and the operations of the Company had became very minimal, the Independent Directors Sri Kameshwar M. Bhat, Dr. V. Sekar and Sri D. Balasundaram, Chairman Sri S. Devarajan and Non-Executive Director Sri S. Vijay Shankar resigned from the Board with effect from 18.06.2020 as they felt their contribution as Board of Directors of the Company is not much required for the Company at this stage. Accordingly, the Board of the Company is downsized. Sri S. Vijay Shankar is continuing as Chief Financial Officer of the Company.

The Board places on record its appreciation and gratitude for the invaluable contributions made by all the resigned directors during their tenure as a member of the Board of Directors.

In accordance with the provisions of Companies Act, 2013 and SEBI Regulations, to have mandatorily woman Director on the Board of the Company and by expressing willingness and consent to rejoin the Board of the company by Dr. A. Sarayu, based on the recommendation of the Nomination and Remuneration Committee, Board of Directors had appointed Dr. A. Sarayu as an Additional Director (Non-Executive) of the Company on

09.02.2020 and she shall hold office upto the conclusion of this ensuing 44th Annual General Meeting of the Company. On the recommendation of Nomination and Remuneration Committee, Board has placed the

resolution in the notice of the 44th AGM of the Company for appointment of Dr. A. Sarayu as a Non-Executive Director of the Company, liable to retire by rotation for members approval.

In accordance with the provisions of Companies Act, 2013 and SEBI Regulations, of necessary composition of Independent Directors on the Board of the Company, Sri S. Elangovan was appointed as an Additional Director (Non-Executive, Independent) by the Board on 18.06.2020 and shall hold office upto the conclusion of this

ensuing 44th Annual General Meeting of the Company. On the recommendation of Nomination and Remuneration

Committee, Board has placed the resolution in the notice of the 44th AGM of the Company for appointment of Sri S. Elangovan as a Non-Executive Independent Director of the Company for members approval. In the opinion of the Board, Sri S. Elangovan fulfills the criteria of integrity, expertise and experience and is appearing for the online proficiency self-assessment test in accordance with the provisions of section 150(1) of the Companies Act, 2013

Non-Executive Director Sri S. Sivakumar retires by rotation at this ensuing (44th ) Annual General Meeting of the Company and he has not opted for re-election. The vacancy proposed to be caused by the cessation of

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Non-Executive Director Sri S. Sivakumar at the ensuing (44 ) AGM of the Company need not be filled up.

Companys Code of Conduct applicable to the board has been adopted by the board and all directors of the company have confirmed compliance with the Code of Conduct.

Key Managerial Personnel

In view of the financial crisis of the Company, MD and CFO had waived their entire salary during the financial year 2019-20

Auditors

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At the 42 Annual General Meeting held on 11.08.2018, M/s R. Sundararajan & Associates, Chartered Accountants, were reappointed as Statutory Auditors of the Company from the financial year 2018-2019 to 2021-2022. Statutory Auditors M/s R. Sundararajan & Associates, Chartered Accountants have confirmed their eligibility and willingness to continue their office. On the recommendation of the Audit Committee, Board is placing the resolution for the remuneration payable to the statutory Auditors for the FY 2020-2021 before the members for approval.

Particulars of Loans, Guarantees or Investments under Section 186 of the Companies Act, 2013

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in note 43 to the notes to the Standalone financial statements.

Disclosure as per Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. The Company has set up a Committee for addressing issues related to women and during the financial year 2019-20, there were no complaints received on sexual harassment.

Performance of Associate Company

Your Company has an associate M/s SPMM Healthcare Services Private Limited within the meaning specified under Section 2 (6) of Companies Act, 2013. M/s SPMM Healthcare services private Limited has recorded a total revenue of Rs. 445.70 lakhs during the year 2019-20 as against Rs.457.27 lakhs in the previous year and profit after tax of Rs. 6.22 lakhs during the year 2019-20 as against Rs. 24.65 lakhs in the previous year. A separate statement containing the salient features of the financial statement of the associate in FORM AOC -1 has also been annexed with this report as per the requirements of provisions of section 129 of the Companies Act, 2013 and forms part of this report.

Significant and Material Orders passed by the Courts or Tribunals impacting the Company: NIL

Material Changes and Commitments. if any, occurred between the end of the financial year and the date of this report.

The covid-19 pandemic do not have any impact on the operations of the Company because of closure of spinning manufacturing activity on account of sale of spinning units and the company has let out the immoveable property on lease. However, because of the lockdown implemented from the last week of March, 2020 upto the month of May, 2020, the lease is operational from the month of June, 2020. Accordingly, there were no material changes and commitments between the end of the period under review and the date of this report which could have an impact on the Companys operation in the future or its status as a "going concern".

Annexures to this Report

The following are the annexures to this report

1. Directors Responsibility Statement in Annexure 1

2. Conservation of energy, technology absorption, Research and development and foreign exchange earnings and outgo in Annexure 2

3. Statement containing salient features of the financial statement of associate company (Form AOC – 1) in Annexure 3

4. Form AOC – 2 in Annexure 4

5. Extract of Annual Report (Form MGT-9) in Annexure 5

6. Secretarial Audit Report (Form MR-3) in Annexure 6

7. Secretarial Compliance Report in Annexure 7

8. Details of CSR Expenditure in Annexure 8

9. Particulars of Remuneration in Annexure 9 10. CEO/CFO Certification in Annexure 10 11. Corporate Governance Report in Annexure 11 12. Non-disqualification of Directors in Annexure 12

Cautionary Note

Statements in the Directors report and the Management discussion and analysis describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Actual results might differ materially from those either expressed or implied in the statement. Important factors that could influence the Companys operations include global and domestic economic conditions, government regulations, tax laws, economic developments within the country and other related factors such as litigation and industrial relations.

Acknowledgement

Directors of your Company placed on record their sincere appreciation of the dedication and commitment of all employees. Your directors thank the Management, Shareholders, Customers, Suppliers, Bankers and other stakeholders for their continued support during the year. The directors of your company thank Central/State Governments and other government agencies for their support and look forward to their continued support in future.

For and on behalf of the Board
S. Gnanashekaran
Salem Chairman
July 30, 2020 (DIN: 06796817)