Oswal Yarns Ltd Directors Report.

To, The Members

Oswal Yarns Limited,

Link Road, Industrial Area,

Ludhiana

Your Directors present the 38thAnnual Report together with Audited Statement of Accounts for the financial year ended 31st March, 2020.

Financial Highlights

The summarized financial results of the company during the financial year 2019-20 are as under:

PARTICULARS 2019-20 2018-19
Total Revenue from operations 314.58 288.66
Profit before Depreciation, Interest & Tax (PBDIT) 6.94 12.27
Less: Interest & Financial Expenses 4.50 10.54
Profit Before Depreciation & Tax (PBDT) 2.44 1.73
Less: Depreciation 3.15 2.91
Profit Before Exceptional & Extraordinary Items and Tax (0.71) (1.18)
Exceptional Items 0.00 0.00
Profit Before Tax (PBT) (0.71) (1.18)
Less: Provision for Tax 0.29 0.11
Profit For The Period and After Tax (PAT) (1.00) (1.29)
Earnings Per Share (Rs.)
-Basic (0.02) (0.03)
-Diluted (0.02) (0.03)

Dividend

Keeping in view that there are losses in the current year, the Board of Directors of the company have not recommended any dividend for the year 2019-2020.

Transfer to Reserves

As there are losses in the current year, therefore no amount has been transferred to the General Reserve.

Operational Review

The companys business predominantly comprises of only one segment i.e. manufacturing and trading of knitted cloth. It falls under the single business segment of Textile industry. During the year under review, the highlights of the Companys performance are as under:

• Revenue from operations declined from Rs. 314.58 Lakhs to Rs 288.66 Lakhs

• PBDIT increased from Rs. 12.27 Lakhs to Rs. 6.94 Lakhs

• Loss before Tax stood at Rs. 0.71 Lakhs

• The Company reported a Net Loss of Rs. 1.00 Lakhs as compared to loss of Rs. 1.29 Lakhs reported last year.

Report on Corporate Governance

Pursuant to provisions of regulation 15(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the provisions of Regulation 27(2) are not applicable to the Company as on 31st March, 2020 as the paid-up Equity Share Capital and Net Worth was below Rs. 10 crores and Rs. 25 crores respectively.

Share Capital

During the year, the Company has neither issued any Shares with or without differential rights nor issued any Sweat Equity shares. The Company has not purchased its own equity shares. The Paid up Equity Share Capital as on 31st March, 2020 stood at Rs. 4,01,00,000/- comprising of 40,10,000 Equity Shares of Rs. 10/- each. The Company has not issued or granted any stock options.

Board Meetings

The Board meets at regular intervals to discuss and decide on policy and strategy apart from other business discussions. During the year under review, the Board of Directors met on seven occasions viz; 1st April, 2019; 28th May, 2019; 25th July, 2019; 25th October, 2019; 25th January, 2020; 27th February, 2020 and 20th March, 2020. The intervening gap between the Board Meetings was within the period prescribed under the Companies Act, 2013.

Public Deposits

The Company has not accepted any deposits from the public during the financial year 2019-20. There has not been any outstanding or unpaid or unclaimed deposit at the end of the financial year 2019-20 in terms of Section 73 of the Companies Act, 2013 including rules framed therein.

Directors and Key Managerial Personnel

In accordance with the provisions of Section 152(6) of the Companies Act, 2013, Ms. Vama Oswal (DIN: 08264613), retires by rotation at the forthcoming Annual General Meeting and being eligible, offers herself for reappointment. The Board recommends her re-appointment for the consideration of the Members of the Company at the forthcoming Annual General Meeting.

During the year, Smt. Mamta Jain (DIN: 02328913) resigned from the directorship. Further, the Board in its meeting held on 31.10.2018 had appointed Ms. Vama Oswal (DIN: 08264613) as an Additional Director (woman director) to hold the office upto the conclusion of this Annual General Meeting. The Company has received requisite notice in writing from a member proposing Ms. Vama Oswals name for the office of Director. Accordingly, the Board recommends the resolution in relation to appointment of Ms. Vama Oswal as a Non-executive Director, for the approval by the members of the Company.

During the year, Mr. Devinder Bir Singh Gill (DIN: 00505957) resigned from the office for Independent Director w.e.f. 27th February, 2020. Further, the Company had received confirmation from Mr. Devinder Bir Singh Gill that there were no other material reasons for his resignation other that those which are provided in his resignation letter.

Particulars of Loans, Guarantee or Investments

The Company has not given any loans, guarantee or made investments in terms of Section 186 of the Companies Act, 2013.

Material changes and commitments, if any, affecting the financial position of the company

There are no material changes affecting the financial position of the company which have occurred between the end of the financial year 2019-20 of the company to which the financial statements relate and the date of the directors report.

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 is enclosed as Annexure -1 and forms part of this Report.

Directors Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a) that in the preparation of the annual financial statements for the year ended 31st March, 2020, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that 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 of the company for that period;

c) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the Assets of the Company and for preventing and detecting fraud and other irregularities;

d) that Directors have 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.

Selection & Remuneration Policy

The Board of Directors of your company on the recommendation of the Nomination & Remuneration Committee has framed a policy for selection and appointment of directors, key managerial personnel, senior management employees and their remuneration.

Auditors

M/s SHSP and Associates, Chartered Accountants, Ludhiana (FRN 004267N) were appointed as Statutory Auditors of the company at the 35th Annual General Meeting of the Company to hold office till the conclusion of 40th Annual General Meeting of the Company subject to ratification of appointment at every Annual General Meeting. However, pursuant to the amendments made to the Section 139 of the Companies Act, 2013 by the Companies (Amendment) Act, 2017 effective May 7, 2018, the requirement seeking ratification of the Members every year has been withdrawn from the Statue. Hence the resolution seeking ratification of the Members for continuance of their appointment at this AGM is not being sought.

Cost Records

As per the requirements of the Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company is not required to maintain cost records.

Auditors Report

The Auditors Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed herewith as Annexure- 2 and forms part of this Report.

Secretarial Audit Report

The Board has appointed Mr. Vikas Rai Berry, Practicing Company Secretary as Secretarial Auditors of the Company for the financial year 2019-20. The Secretarial Audit Report for the financial year ended 31st March, 2020 is enclosed as Annuexure-3 to this report. The Secretarial Audit Report is self-explanatory and do not call for any further comments.

Particulars of Contracts or Arrangements with Related Parties

The company has not entered into any contract or arrangement or transactions with the related parties in terms of Section 188(1) of the Companies Act, 2013 during the year under review. Disclosure pursuant to Clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014.

Corporate Social Responsibility (CSR)

The stipulation of formulate Corporate Social Responsibility Committee is not applicable to your company in terms of Section 135 of the Companies Act, 2013.

Formal Annual Evaluation

The Board carries out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its various committees viz. Audit, Risk Management, Nomination & Remuneration and Stakeholders Relationships Committee.

Industrial Relations

Industrial relations remained cordial throughout the year under review.

Internal Control Systems and Audit

Your company has adequate internal control systems commensurate with the size and nature of the business. The company has engaged Berry Associates as its external independent agency to conduct internal audit of affairs of the company. The scope of their work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes and assessing the internal control strengths in all areas. Internal Auditors findings are discussed and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis.

Committees of the Board

1. Audit Committee

The company has constituted an Audit Committee in terms of Section 177 of the Companies Act, 2013 read with SEBI (LODR) Regulations, 2015. As on 31st March, 2020, the Committee comprises of Sh. Surinder Kumar Garg as Chairman with Sh. Kulwant Rai Dhawan and Ms. Vama Oswal as Members. The recommendations of the audit committee are always accepted by the Board of Directors. The Audit Committee met 4 (four) times during financial year 2019-20 on 28th May, 2018; 25th July, 2019; 25th October, 2019 and 25th January, 2020.

2. Nomination and Remuneration Committee

The Nomination and Remuneration Committee has been constituted by the Board in terms of Section 178 of the Companies Act, 2013 read with SEBI (LODR) Regulations, 2015. As on 31st March, 2020, the Committee consists of Sh. Surinder Kumar Garg as Chairman with Sh. Kulwant Rai Dhawan and Ms. Vama Oswal as members. It lays down criteria for the persons who are qualified to become directors and who may be appointed in senior management, makes recommendation to the Board for the appointment and removal of directors, key managerial personnel, senior management employees and their remuneration. During the financial year 2019-20, two meetings of the Nomination and Remuneration Committee were held on 1st April, 2019 and 20th March, 2020.

3. Stakeholders Relationship Committee

The Company has constituted Stakeholders Relationship Committee in terms of Section 178 of the Companies Act, 2013 read with stipulations of the SEBI (LODR), 2015. It comprises of Sh. Tej Paul Oswal as Chairman with Sh. Surinder Kumar Garg and Sh. Kulwant Rai Dhawan as members. It inter-alia considers and resolves the grievances of the shareholders and investors viz; transfer of shares, non-receipt of shares/annual reports etc. & reviewing the reports by the Registrar. The Stakeholders Relationship Committee met 4 (four) times during financial year 2019-20 on 28th May, 2018; 25th July, 2019; 25th October, 2019 and 25th January, 2020

4. Risk Management Committee

During the period under review, the Company has dissolved its Risk Management Committee as Company was not under any obligation to formulate the same. Earlier the Committee was formed voluntarily which is now dissolved by the Company.

Vigil Mechanism/Whistle Blower Policy

The company has a vigil mechanism / whistle blower policy whereby any personnel, who has genuine concerns and/or observes matters involving any alleged misconduct (not necessarily a violation of law), fraud and mismanagement, if any, can approach the Audit Committee without necessarily informing their supervisors. The company has provided protection to whistle blowers from unfair termination and other prejudicial employment practices. During the financial year 2019-2020, there has not been any instance of fraud/misconduct etc. reported under this policy of the company.

Subsidiaries/Joint Ventures and Associates

The company does not have any subsidiary/joint venture and associate company/concern.

Particulars of Employees

Information pertaining to employees in terms of Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 of the Companies Act, 2013 is NIL.

Policy for Prevention of Sexual Harassment of Women at Work Place

Your Company has adopted a policy and constituted Internal Complaints Committee for prevention, prohibition and redressal of sexual harassment of women at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder. During the financial year 2019-20, no complaint on sexual harassment was received by the company.

Listing

The securities of the Company are listed on BSE Limited (Scrip Code: 514460), Floor 25, P.J. Towers, Dalal Street, Mumbai - 400 001. However, the Company has not paid listing fee of the Stock Exchange against which BSE Limited has initiated insolvency proceedings against the Company. The Company cannot further comment on the same as the matter is subjudice.

Acknowledgment

Your company expresses gratitude to the Lenders, Creditors, Shareholders, Government Department, Customers and Business Constituents for their cooperation and support.