Patspin India Ltd Directors Report

To the Members,

Your Directors present the 33^rd (Thirty Third) Boards Report together with the Audited Statement of Accounts for the year ended 31^st March 2024.

1. FINANCIAL RESULTS

The financial highlights of your Company for the year ended 31st March 2024 are summarized as follows:

(Rs. In Crores)

	FY 2023-24	FY 2022-23
Revenue from Operations	49.47	75.19
EBITDA	1.78	(7.76)
Finance cost	7.54	10.52
Depreciation	3.14	7.15
Profit / (Loss) before Tax, before exceptional items	(8.90)	(25.44)
Exceptional Items:
- VRS, Ex-gratia and	-	(6.64)
Gratuity to employees on settlement
Profit on sale of Assets / -	2.25	13.93
Undertaking
Profit / (Loss) before tax	(6.65)	(18.15)
Other Comprehensive	0.07	(0.36)
Income (net of Tax)
Total Comprehensive loss for the year	(6.58)	(18.51)

2 . FINANCIAL PERFORMANCE

Liquidity stress on account of delayed implementation of Restructuring / Resolution Plan (RP) by the Lenders and challenging market conditions of the Indian Textiles Industry, especially for Spinning segment, due to geopolitical situation and other external factors continued impacting Companys performance. In view of this, the Company continues to engage in Job work activities even post implementation of Resolution Proposal (RP) which has resulted in recovery of only variable expenses.

Consequently, the Revenue from operations for FY 2023-24 was lower at Rs.49.47 Cr as against Rs.75.19 recorded in the previous year. During the year company has written back certain liabilities of Rs.5.15 Cr which are no longer payable. Taking this into account, EBITDA for the year was higher at Rs.1.78 Cr. as against EBITDA loss of Rs.7.76 Cr in the previous year. Finance

Cost for FY 2023-24 was lower at Rs.7.54 Cr as against Rs.10.52 Cr of previous year due to repayment of entire term loans during FY 2022-23 from the sale proceeds of Companys Tamil Nadu Plant as per approved RP by the lenders. Exceptional item of Rs.2.25 Cr in FY 2023-24 represent profit on sale of companys Mumbai Office. At PBT level the loss was lower at Rs.6.65 Cr as against Rs.18.15 Cr of loss incurred in the previous year.

3. PROPOSAL TO RESUME OWN MANUFACTURING OPERATIONS

During FY 2023-24, due to geo political situation (Ukraine War, Red Sea issue), higher inflation, slow down of global economy, higher raw material (raw cotton) prices and raising interest rates company continue to operate on Job work / Contract manufacturing where the revenue is sufficient only to meet the variable expenses. In view of this, company could service interest on working capital term loan (WCTL) upto Aug23 and paid quarterly WCTL installments upto 30.09.2023. The company has requested the Lenders to restructure outstanding debt (WCTL) with moratorium on WCTL Interest and quarterly instalment payment, reduction in the rate of interest and working capital facility of Rs. 25 crores. Lenders advised the company to pay the overdue and regularize the WCTL account to consider restructuring. The Companys Promoters have assured necessary support in this regard. Major markets (USA & EU) are now showing signs of improvement due to moderate inflation and improved disposable income. Countrys cotton yarn exports also improved by 37% during the second half of FY 2023-24 over the same period in the previous year. Further, with the various measures initiated by the Government to revive and give impetus to the Indian Textile Industry, company expect improved business opportunity and planned to resume own manufacturing operations, post restructuring of debt (WCTL) as aforesaid. With the significant reduction in the debt level as well as rationalization of labour cost through VRS measures and reducing cotton prices, own manufacturing operation could generate a cash profit to service the debts. On completion of restructuring process, the Company proposes to resume own manufacturing activities and carry on trading in cotton yarn for better prospects of the Company.

4. NCCCPS ISSUED UNDER RESOLUTION PLAN Your Board in its previous report mentioned about allotment of 0.50% 251000 Non-Cumulative Compulsorily Convertible Preference Shares (NCCCPS) of Rs. 100 each to Lenders and Promoters & its Associates pursuant to approved Resolution Plan in lieu of their existing Redeemable Preference Shares, conversion on 31.3.2030. Subsequent to that company filed application to BSE Limited for their in-principle approval for demating the said shares and application was closed citing non submission of required documents / classification, which the company had challenged before the Honble High Court of Kerala. Honble High Court of Kerala vide their Order dated 30.1.2024 allowed the Writ Petition directing BSE to consider companys application for In-principle approval and passed order directing BSE Limited to take up representation of the company and decide the same, after affording them, as also any other person interested, an opportunity of being heard: thus culminating in an appropriate order and necessary action thereon, as expeditiously as is possible. Pursuant to above, BSE Limited vide its Order dated 2.5.2024 expressed its inability to accord its "In-principle approval" for the issuance and allotment of 0.50% 970000 NCCCPS of Rs 100 each to Promoters and its Associates under Regulation 28(1) of SEBI (LODR) Regulations. However BSE has communicated that they may consider and accord its "In-principle approval" for the issuance and allotment of 0.50% 1081000 NCCCPS of Rs 100 each to the Lenders (Consortium of Banks) provided the company file appropriate application limited to the issuance of allotment of 0.50% 10,81,000 NCCCPS to the Lenders and complies with the applicable requirements. Your Board, based on legal opinions from learned Advocates, approved a proposal to Appeal the same and accordingly the company has filed an "Appeal" before the Securities Appellate Tribunal (SAT), Mumbai in this regard.

5. DIVIDEND

In view of the losses for the financial year ended 31^st March 2024, the Board of Directors regret their inability to recommend any dividend for the year 2023-24.

6. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on the operations of the Company, as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing Regulations") is provided in a separate section and forms an integral part of this Report.

7. PUBLIC DEPOSITS

The Company does not have "Deposits" as contemplated under Clause V of the Companies Act 2013. Further, the company has not accepted any such deposits during the year ended 31st March 2024.

8. CORPORATE GOVERNANCE

The Company has taken the requisite steps to comply with the recommendations concerning Corporate Governance. A separate statement on Corporate Governance together with a certificate from the Practicing Company Secretary of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report.

9. DIRECTORS

All the Directors have affirmed that they have complied with the Companys Code of Business Conduct & Ethics. In terms of requirements of the Listing Regulations, the Board has identified core skills, expertise and competencies of the Directors in the context of the Companys businesses, which are detailed in the Report on Corporate Governance.

Further, in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs. The Independent Directors who were required to clear the online proficiency self-assessment test have passed the test. In the opinion of the Board, the Independent Directors fulfil the conditions of independence, are independent of the management, possess the requisite integrity, experience, expertise, proficiency and qualifications to the satisfaction of the Board of Directors During the year under review there is no change in the composition of the Board of Directors and the Key Managerial Personnel.

Pursuant to the requirements of the Companies Act, 2013, Smt. Kalpana Mahesh Thakker (DIN 08601866), retires by rotation at the ensuing Annual General Meeting and, being eligible, offers herself for reappointment. The Board recommends the appointment / re-appointment of the above Director for approval. The brief details of the Director proposed to be appointed / re-appointed, as required under Regulation 36 of SEBI Listing Regulations, are provided in the Notice of Annual General Meeting.

10. KEY MANAGERIAL PERSONNEL

Shri Umang Patodia, Managing Director, Shri T.Ravindran, Chief Financial Officer, and Ms Veena Vishwanath Bhandary, Company Secretary and Compliance Officer were the Key Managerial Personnel of your Company in accordance with the provisions of Section 203 of the Companies Act 2013 during the year under review.

11. NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met 4(Four) times during the financial year 2023-24. The details of the meetings of the Board of Directors of the Company convened and attended by the Directors during the financial year 2023-24 are given in the Corporate Governance Report which forms part of this Annual Report.

12. MEETING OF INDEPENDENT DIRECTORS

The Independent Directors of the Company met on 22^nd February, 2024, without the presence of Non-Independent Directors and members of the management to review the performance of Non-Independent Directors and the Board of Directors as a whole; review the performance of the Chairman and Managing Director of the Company and to assess the quality, quantity and timeliness of flow of information between the management and the Board of Directors. The performance evaluation of the Independent Directors was carried out by the entire Board.

13. DIRECTORS RESPONSIBILITY STATEMENT

The Board of Directors acknowledge the responsibility for ensuing compliances with the provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 in the preparation of annual accounts for the year ended on 31st March, 2024 and state that: i. in the preparation of the Annual Accounts, the applicable Indian Accounting Standards have been followed and there are no material departures from the same; ii. the Directors have 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 your company as at 31st March 2024 and of the profit or loss of the company for that period; iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your 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 have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively; and vi. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

14. BOARD EVALUATION

Pursuant to the provisions of Companies Act and Listing Regulations, the Board has carried out the annual performance evaluation of its own performance, of Committees of the Board and of the Directors individually. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specified duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company.

15. FAMILIARISATION PROGRAMME FOR DIRECTORS

At the time of appointing a Director, a formal letter of appointment is given to him, which interalia explains the role, function, duties and responsibilities expected of him as a Director of the Company. This is to provide insights into the Company to enable the Independent Directors to understand its business in depth, to familiarize them with the process, business and functionaries of the Company and to assist them in performing their role as Independent Directors of the Company. The Director is also explained in detail the Compliance required from him under the Companies Act, 2013, SEBI (LODR) Regulations, 2015 and other relevant regulations and affirmation taken with respect to the same. The Chairman and the Management has also one to one discussion with the Directors to familiarize with the companys operations

16. AUDITORS

M/s. L.U.Krishnan& Co. (Regn.No.001527S) Chartered Accountants, Chennai were appointed as the Auditors of the Company for second term of 5 years at the 31^stAnnual General Meeting (AGM) held on 30^th September, 2022 to hold office till the conclusion of the 36^thAGM of the Company to be held in the year 2027.

The Auditors Report for 2023-24 does not contain any qualifications, reservations or adverse remarks.

17. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed Shri. MRL Narasimha (C.P No. 799), Practicing Company Secretary to undertake the Secretarial Audit of the Company.

Secretarial Audit Report issued by Shri. MRL Narasimha, Practicing Company Secretary in Form MR-3 forms part to this report Annexure I. The said report does not contain any observation or qualification requiring explanation or adverse remark

18. COST AUDITORS

Pursuant to Section 148 of the Act read with Rule 14 of the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records of the Company are required to be audited. The Directors, on the recommendation of the Audit Committee, appointed M/s. Hareesh K.N and Associates, Cost Accountants (Firm Reg. No. 101974) Cost Accountants, to audit the cost accounts of the Company for the FY ending 31^st March, 2025, on a remuneration as mentioned in the Notice convening the 33^rdAnnual General Meeting for conducting the audit of the cost records maintained by the company.

19. EXTRACT OF ANNUAL RETURN

Pursuant to provisions of Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, read with Rule 12 of the Companies(Management and Administration) Rules, 2014, the Annual Return of the company for the Financial Year 31^st March 2024 is uploaded on the website of the company and can be accessed at the www.patspin.com

20. RELATED PARTY TRANSACTIONS

All transactions entered with related parties were on arms length basis and in the ordinary course of business. There were no materially significant transactions with the related parties during the financial year and were not in conflict with the interest of the company. Thus, a disclosure in Form AOC -2 in terms of Section 134 of the Companies Act 2013 is not required. All related party transactions are placed before the Audit Committee as also before the Board for approval.

The Board of Directors, as recommended by the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules thereunder and the Listing Regulations. This Policy has been uploaded on the website of the Company.

21. LOANS & INVESTMENTS

Details of loans, guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to Financial Statements forming part of this report.

22. RISK MANAGEMENT

The company has laid down a well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitor business risks. The Audit Committee and the Board periodically review the risks and suggest steps to be taken to manage/ mitigate the same through a properly defined framework.

During the year, a risk analysis and assessment was conducted, and no major risks were noticed, which may threaten the existence of the company

23. VIGIL MECHANISM / WHISTE BLOWER POLICY The company has a Vigil Mechanism / Whistle Blower Policy to report genuine concerns or grievances. The Vigil Mechanism (Whistle Blower Policy) has been posted on the companys website (www.patspin.com).

24. CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per the provisions of Section 135 read with the Section 198 of the Companies Act 2013, the company do not have CSR obligation for the year 2023-24. Accordingly, there has been no meeting of CSR Committee held during the year.

Even though the provisions of Section 135 (5) of Companies Act, 2013 regarding Corporate Social Responsibility are not yet attracted, the company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily which goes much beyond mere philanthropic gestures and integrates interest, welfare and aspirations of the community with those of the Company itself in an environment of partnership for inclusive development.

25. CREDIT RATING

During the year 2022-23, the company had obtained external credit rating of "RP4" for Lenders to carry out restructuring of the outstanding debts. Since the account is restructured and post restructuring, the account continues to be sub-standard and upgrade will be as per Reserve Bank of India (Prudential framework for Resolution of stressed assets) directions 2019. Hence, no external credit rating was carried out during the year 2023-24.

26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information required under section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in the Annexure II forming part of this report

27. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an effective internal control and risk mitigation system designed to effectively control the operations at its Head Office, Plants and Depot. The internal control systems are designed to ensure that the financial and other records are reliable for the preparation of financial statements and for maintaining assets. The Company has well designed Standard Operating Procedures. Independent Internal Auditors conduct audit covering a wide range of operational matters and ensure compliance with specified standards. Planned periodic reviews are carried out by Internal Audit. The findings of Internal Audit are reviewed by the top management and by the Audit Committee of the Board of Directors.

Based on the deliberations with Statutory Auditors to ascertain their views on the financial statements including the Financial Reporting System and Compliance to Accounting Policies and Procedures, the Audit Committee was satisfied with the adequacy and effectiveness of the Internal Controls and Systems followed by the company.

28. NOMINATION & REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. More details on the same are given in the Corporate Governance Report.

29. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In accordance with the applicable provisions of Companies Act, 2013 (hereinafter referred to as "the Act") read with Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 (hereinafter referred to as the "IEPF Rules"), all unclaimed dividends are required to be transferred by the Company to the IEPF, after completion of seven (7) years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for seven (7) consecutive years or more shall be transferred to the demat account of the IEPF Authority. The details relating to shares on which dividends were unclaimed are provided in the General Shareholders Information section of Corporate Governance report forming part of this Annual Report.

30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an anti-sexual harassment policy in line with the requirements of the sexual harassment of women at the workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Compliance Committee (ICC) has already been functioned for redressing complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has not received any complaints under this policy during the year ended 31st March, 2024.

31. PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 134 (3) (q) OF THE COMPANIES ACT, 2013 READ WITH RULE 5 (1) OF THE COMPANIES (APPOINTMENT AND REMUENRATION OF MANAGERIAL PERSONNEL) RULES, 2014

The information required pursuant to section 134 (3) (q) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the company will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered office of the company during business hours on working days of the company up to the date of the ensuing Annual General meeting. If any Member is interested in obtaining a copy thereof, such member may write to the company in this regard.

32. PERSONNEL & INDUSTRIAL RELATIONS

Industrial Relations were cordial and satisfactory.

There were no employees whose particulars are to be given in terms of Section 134(3)(q) of the Companies Act,2013 read with Rule 5(2) and 5(3) of the companies (Appointment and Remuneration of Managerial personnel) Rules, 2014.

33. SIGNIFICANT AND MATERIAL ORDERS PASSED BY

THE REGULATORS

There are no significant and material orders passed by the Regulators or Courts or Tribunals that would impact the going concern status of your Company and its future operations.

34. GENERAL

There was no issue of equity shares with differential rights as to dividend, voting or otherwise: and; There was no issue of shares (including sweat equity shares) to the employees of the company under any scheme.

35. ACKNOWLEDGEMENT

Your Directors place on record their gratitude to Central Bank of India, State Bank of India, The Karur Vysya Bank Limited and the concerned Departments of the State and Central Government, valuable customer, Employees and Shareholders for their assistance, support and co-operation to the Company.

	For and on behalf of the Board of Directors
	B K PATODIA
Place: Kochi	Chairman
Date: 13.8.2024	(DIN:00003516)