Pasupati Spinning & Weaving Mills Ltd Directors Report

<dhhead>DIRECTORS REPORT</dhhead>

The Directors are pleased to present the 43^rdDirectors Report on the business and operations of the Company together with the Audited Accounts for the financial year ended 31^st March, 2023.

1. FINANCIAL PERFORMANCE

Particulars	2022-23 Rs./Lacs	2021-22 Rs./Lacs
Sales and other Income	13,869.09	10340.70
Profit / (Loss) before Taxes	104.41	3.48
Payment/Provision for Taxation	(5.37)	(1.69)
Profit after Taxation	109.78	5.17
Other Comprehensive Income	6.59	(1.37)
Total Comprehensive Income of the year	116.37	3.80

During the year under review, the turnover of the company significantly increased by 34.12% as compared to last year, which was partially affected due to COVID-19 pandemic. The profit before tax also jumped to Rs.104.41 Lacs from Rs. 3.48 Lacs in the last financial year. The improvement is financial result has been possible due to better market scenario prevailed during first nine months of the financial year. However from last quarter of FY 2022-23, the market conditions have deteriorated. The management is hopeful that market conditions will improve from 3^rd quarter of financial year 2023-24.

II THE MANAGEMENT DISCUSSION & ANALYSIS

Spinning Unit, Dharuhera

As already reported last report that the company had discontinued job work operations. Instead, the company had started own manufacturing on Joint Venture Basis with another company but market conditions again deteriorated. Therefore, the job work operations were terminated from August 2022. Thereafter the company is manufacturing polyester fiber for M/s Ganesha Ecospheres Ltd with 100% buy back arrangement. However due to adverse market conditions, the operations have been curtailed significantly.

Knitting & Garment unit, Dharuhera

After COVID 19, the market conditions continue to be grim both on domestic and export front and the company is struggling to procure orders for readymade garments. However the management is hopeful that market conditions should improve by 2^nd half of financial year 2023-24.

Sewing Thread Unit at Kala Amb, Himachal Pradesh

The operations for this unit have improved significantly as compared to last year, which was partly hit by 2^nd wave of pandemic. However shortage of labour continues to be cause of concern for the management. However, the market conditions deteriorated from last quarter of FY 2022-23. The market conditions are expected to improve from 3^rd quarter of FY 2023-24. In order to improve capacity utilisation, the company continues to outsource grey yarn from open market and also getting the fiber converted into grey yarn on job work basis from outside parties and subsequently converting the same into value added product. Barring unforeseen circumstances, the operations of this unit are expected to improve during financial year 202324.

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.

ANNUAL RETURN

The annual return of the company has been placed on the website of the company and can be accessed at 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. 41 as contained in the Main Report under the para Basis of Qualified Opinion are explained hereunder: -

Note 41: 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.

DIVIDEND

an style=font-family:Arial>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 SEBI (LODR) 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.

BOARD EVALUATION

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 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. 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 2022-23

During the financial year under review, Mr. Ban Mali Khemka, Independent Director resigned w.e.f 01/08/2022. Also Mr. Chander Mohan Sharma was re-appointed as Whole Time Director, liable to retire by rotation for a period of 5 years, with effect from 20th December 2022 to 19th December, 2027 (both days inclusive) and Mr. Vidit Jain retired by rotation at the annual general meeting held on 29/09/2022 and was re-appointed.

However, after the closure of financial year there has been no change in the directorship of the Company.

Key Managerial Personnel (KMP) appointed and resigned during the F.Y 2022-23

During the financial year, no changes took place in Key Managerial Personnel.

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.

DEPOSITS

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 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.

INFORMATION FORMING PART OF THE DIRECTORS REPORT PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL 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. 1 Crore and 2 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 Rupees One Crore and two Lacs during the financial year 2022-23. 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 Annexure-C

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.

AUDITORS

• STATUTORY AUDITORS

During the year under review, M/s. B K Shroff & Co. Chartered Accountants, has been appointed as Statutory Auditors for a period of 5 years to hold office as such till the conclusion of the Forty Seventh Annual General Meeting to be held in the year 2027.

• COST AUDITORS

The Central Govt. has approved the appointment of Mr. Satnam Singh Saggu, Cost Accountants as cost auditors for conducting Cost Audit for the Financial Year 2023-24. The report of Cost Auditors in respect of audit of the cost records of the Company for the year ended 31^stMarch 2023 will be submitted to the Central Government in due course.

• SECRETARIAL AUDITORS

The Company has undertaken Secretarial Audit for the financial year 2022-223 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 Sumit Bajaj & Associates is annexed herewith as Annexure-A.

• ANNUAL SECRETARIAL COMPLIANCE REPORT

The Company has undertaken an audit for the Financial Year 2022-23 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 Sumit Bajaj & Associates, Practicing Company Secretaries has been submitted to the Stock Exchange.

CORPORATE GOVERNANCE

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 9^thDecember, 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.

APPRECIATION

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. The company also conveys special thanks to Central & State Government and its Bankers, who have helped the company from time to time for their continued support.

For & On Behalf of Board of Directors

Sd/- Ramesh Kumar Jain

Chairman & Managing Director

Place : New Delhi

Dated : 14/08/2023