Pasupati Spinning & Weaving Mills Ltd Directors Report.
The Directors are pleased to present the 39th Directors Report on the business and operations of the Company together with the Audited Accounts for the financial year ended 31st March, 2019.
1. FINANCIAL PERFORMANCE
|Sales and other Income||11567.85||12148.79|
|Profit before Finance Costs and Depreciation||1001.08||1090.11|
|Profit before Taxes||25.14||38.44|
|Payment/Provision for Taxation||15.20||(22.55)|
|Profit after Taxation but before extra-ordinary items||9.94||60.99|
|Other Comprehensive Income||38.65||6.49|
|Total Comprehensive Income of the year||48.59||67.48|
During the year under review, the turnover of the company has declined by 4.78% as compared to last year, whereas the profit before taxes declined by almost 47.04%. The main reason for decline in turnover and profit is due to decline in exports. The company is exporting almost 30% of its production and majority of its exports are to Turkey. The company has been exporting around 5 containers every month but due to general election in Turkey, the customers suddenly stopped placing orders due to political uncertainty of the country, hence companys exports came down significantly resulting decline in turnover. Due to decline in exports, the company made efforts to increase domestic sales as a result the decline in turnover is only marginal.
II THE MANAGEMENT DISCUSSION & ANALYSIS
Spinning Unit at Dharuhera, Haryana
As already reported last year, the company is doing job work operations in this unit from October 2016 for an outside party. Under this arrangement, the said company is supplying polyester fiber and our company is manufacturing yarn for the said company. During the year under review, the company earned job work income to the tune of Rs. 9.45 Crore as against Rs.9.23 crore in previous year. The company continues to keep close watch on the cotton yarn market and as and when such operations become profitable, the company shall start manufacturing own yarn.
Knitting & Garment unit at Dharuhera, Haryana
The production activities of the Fabric/Garment Division at Dharuhera are going on smoothly. The company is supplying garments for well known brands i.e. Future Group, Reliance Trend, Pantloon Retail, Spencer and Bharti Wallmart etc. Besides, the company is also exporting garments.
Sewing Thread Unit At Kala Amb, Himachal Pradesh
Although the company is making constant efforts to address the labour shortage problem, which generally happens during festival seasons every year but the same still remains an area of concern for the company. As already reported above, the turnover of this division declined due to decline in exports. However, the situation has since improved and the company has started receiving regular export orders.
III PARTICULARS OF INFORMATION FORMING PART OF THE BOARDS REPORT
PURSUANT TO SECTION 134 OF THE COMPANIES ACT, 2013, RULE 8 OF THE COMPANIES (ACCOUNTS RULE 2014 AND RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of section 134 (3) (a) of Companies Act 2013 substituted by Companies (Amendment) Act 2017 w.e.f. July 31, 2018 the web address of the extract of Annual Return of the Company is www.pasupatitextiles.com
NUMBER OF MEETING OF BOARD
During the year, four (4) Board Meetings and four (4) Audit Committee Meetings were convened and held. The details are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013
DIRECTORS RESPONSIBILITY STATEMENT:
In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:
i) In the preparation of the annual accounts, the applicable accounting standards have been followed.
ii) 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 a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review.
iii) 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.
iv) The directors have prepared the annual accounts on a going concern basis.
v) 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.
The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively
STATEMENT ON DECLARATION BY THE INDEPENDENT DIRECTORS.
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 Listing regulations, 2015.
NOMINATION & REMUNERATION POLICY
The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a Policy for selection, appointment and remuneration of Directors and Key Managerial Personnel. More details of the same are given in the Corporate Governance Report.
EXPLANATION OR COMMENTS ON AUDITORS REPORT AND SECRETARIAL AUDIT REPORT
Auditors observations relating to Note no. 40 as contained in the Main Report under the para Basis of Qualified Opinion are explained hereunder: -
Although, the company has made representation to the competent authority for payment of compensation at market rate in respect of part of companys factory land acquired by Government of Haryana, the company feels that final decision in this regard may take a very long time and moreover there is uncertainty about the success of companys representation. Hence, it has been decided that its affect would be given in companys books as and when actual compensation is received from Government of Haryana.
There is no qualification, reservations or adverse remarks made by secretarial auditor in the Secretarial Audit Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
During the year under review, company has not given any loans, Guarantee or made any investments covered under the provisions of Section 186 of the Companies Act, 2013.
RELATED PARTY TRANSACTIONS
Pursuant to Section 134 of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements entered into by the Company with Related Parties have been done at arms length and are in the ordinary course of business. Particulars of the same are being provided in Form AOC-2 which is annexed herewith as Annexure D.
STATE OF COMPANYS AFFAIRS
Discussion on state of Companys affairs has been covered as part of the Management Discussion and Analysis.
AMOUNTS PROPOSED TO BE CARRIED TO RESERVES
Board of Directors does not appropriate any amount to be transferred to General Reserves during the year under review.
In view of the requirement of fund for working capital of the company, the Board of Directors is not in a position to recommend any dividend for the year under review.
MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company and the date of signing of this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure "B".
RISK MANAGEMENT POLICY
Pursuant to the requirement of listing regulations, 2015, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Boards Report. On the recommendation of the Risk Management Committee, the Board has adopted Risk Management Policy, which outlines the program implemented by the Company to ensure appropriate risk management within its system and culture. The Risk Management Policy is also posted on the website of the Company. The Companys risk management program comprises of a series of processes, structures and guidelines which assist the Company to identify, assess, monitor and manage its business risks, including any material changes to its risk profile. To achieve this, the Company has clearly defined the responsibility and authority of the Companys Board of Directors and of the Risk Management
Committee to oversee and manage the risk management program while conferring responsibility and authority on the Companys senior management to develop and maintain the risk management program in light of the day to day needs of the Company. Regular communication and review of risk management practices provide the Company with important checks and balances to ensure the efficacy of its risk management program.
CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES.
The relevant provisions of the companies act, 2013 and Listing regulations are not applicable to our company.
Pursuant to the provisions of the Companies Act, 2013, and Regulation 17 of the SEBI(LODR) Regulations, 2015 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 and other
Committees. The boards performance for the current year was assessed on the basis of participation of directors, quality of information provided/available, quality of discussion and contribution etc. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering the aforesaid aspects of the Boards functioning. The overall performance of the Board and Committees of the
Board was found satisfactory. The overall performance of Chairman, Executive Directors and the Non-executive Directors of the Company is satisfactory. The review of performance was based on the criteria of performance, knowledge, analysis, quality of decision making etc.
CHANGE IN THE NATURE OF BUSINESS
During the year under review, there has been no change in the nature of business of the Company.
DETAILS OF APPOINTMENT AND RESIGNATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Chander Mohan Sharma retires by rotation and being eligible, offers himself for re-appointment.
Directors appointed/resigned during the FY 2018-2019
Mr. Anil Gupta resigned from the post of Independent Director of the Company with effect from 8th November, 2018. Ms. Vrinda Jain resigned from the post of Non Executive-Non Independent Director of the Company with effect from 14th February, 2019. Mr. Parveen Paliwal resigned from the post of Independent Director of the Company with effect from 16th March, 2019. Mr. Umesh Chandra Tripathi was appointed as Independent Director of the Company with effect from 14th February, 2019. Mr. Ban Mali Khemka was appointed as Independent Director of the Company with effect from 28th May, 2019. Ms. Reema Kalhan was appointed as Independent Director of the Company with effect from 28th May, 2019.
Key Managerial Personnel (KMP) appointed and resigned during the F.Y 2017-2018
Mr. Abhinav Tyagi was appointed as Company Secretary (Key Managerial Personnel) w.e.f 29th May, 2018.
NAMES OF THE COMPANIES WHICH HAVE BECOME/ CEASED TO BE SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
The Company did not have any subsidiaries, associates or joint ventures during the year.
The Company has not accepted deposits under Chapter V of the Companies Act, 2013.
SIGNIFICANT ORDERS PASSED BY REGULATORS, COURTS OR TRIBUNALS IMPACTING GOING CONCERN AND COMPANYS OPERATIONS
To the best of our knowledge, the Company has not received any such orders from Regulators, Courts or Tribunals during the year, which may impact the going concern status or the Companys operations in future.
INTERNAL CONTROL SYSTEMS
Your Company has evolved a system of internal controls to ensure that the assets are safeguarded and transactions are authorised, recorded and correctly reported. The internal control system is supplemented by management reviews and independent periodical reviews by the outside chartered accountancy firms which evaluate the functioning and quality of internal controls and provides assurance of its adequacy and effectiveness. The scope of internal audit covers a wide variety of operational methods and, as a minimum, ensures compliance with specified standards with regard to availability and suitability of policies and procedures, extent of adherence, reliability of management information system and authorization procedures including steps for safeguarding of assets. The reports of internal audit are placed before Audit Committee of the Directors and Board. Audit Committee and board reviews such audit findings and the adequacy of internal control systems. The Statutory Auditors and the Internal Auditors of the Company also interact with the Audit Committee and Board to share their findings and the status of corrective actions under implementation.
M/s. M.C. Jain & Co. Chartered Accountants, New Delhi were appointed as Internal Auditors of the Company for the Financial Year 2018-19 and their reports for the year were submitted to the Audit Committee and to the Board.
INFORMATION FORMING PART OF THE DIRECTORS REPORT PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 requiring particulars of the employees in receipt of remuneration in excess of Rs.60 lacs per year to be disclosed in the Report of Board of Directors are not applicable to the Company as none of the employees was in receipt of remuneration in excess of Rs.60 lacs during the financial year 2018-19. The information in accordance with the provisions of Section 197 of the Companies Act, 2013 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Board of Directors has adopted the Vigil Mechanism / Whistle Blower Policy. The policy has provided a mechanism for Directors, Employees and other persons dealing with the Company to report to the Chairman of the Audit Committee, any instance of unethical behavior, actual or suspected fraud or violation of the Code of Conduct of the Company. The details of the policy has been uploaded at the website of the Company @ www.pasupatitextiles.com
COMPOSITION OF AUDIT COMMITTEE
The composition of the Audit Committee has been mentioned in the Corporate Governance Report annexed to this report.
During the year under review, the auditors need no rotation as they can continue as statutory auditors up to the F.Y 2021-2022. M/s. Suresh Kumar Mittal & Co. Chartered Accountants, who are the statutory auditors of the Company, hold office till the conclusion of the forthcoming AGM and are eligible for re-appointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder, it is proposed to appoint M/s. Suresh Kumar Mittal & Co. as statutory auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the 42th AGM to be held in the year 2022, subject to ratification of their appointment at every AGM.
The Central Govt. has approved the appointment of M/s Avtar Singh & Co. as cost auditors for conducting Cost Audit for the Financial Year 2018-19. The report of Cost Auditors in respect of audit of the cost records of the Company for the year ended 31st March 2019 will be submitted to the Central Government in due course.
The Company has undertaken Secretarial Audit for the financial year 2018-19 which, inter alia, includes audit of compliance with the Companies Act, 2013, and the Rules made under the Act, Listing Regulations and applicable Regulations prescribed by the Securities and Exchange Board of India and Foreign Exchange Management Act, 1999 and Secretarial Standards issued by the Institute of the Company Secretaries of India. The Secretarial Audit Report forms part of this Annual Report. The Report of the Secretarial Audit as submitted by Anand Sharma & associates is annexed herewith as Annexure-A.
ANNUAL SECRETARIAL COMPLIANCE REPORT
The Company has undertaken an audit for the Financial Year 2018-19 for all applicable compliances as per Securities and Exchange Board of India Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by Anand Sharma & Associates , Practicing Company Secretaries has been submitted to the Stock Exchange.
The Company conforms to the norms of Corporate Governance as envisaged in the Listing Regulations with the BSE Limited. Pursuant to Regulation 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on the Corporate Governance and the Auditors Certificate on Corporate Governance are annexed to this report.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.
Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year Company has not received any complaint of harassment.
The Board of Directors acknowledge with gratitude the co-operation and assistance extended by all its stakeholders, including its shareholders, employees/workers, bankers, customers, business associates and employees.
|For & On Behalf of Board of Directors|
|Ramesh Kumar Jain|
|Chairman & Managing Director|
|Place : New Delhi|
|Dated : 14-8-2019|