Pranavaditya Spinning Mills Ltd Directors Report.
On behalf of the Board of Directors ("the Board"), it gives me pleasure to present the 29th Annual Report on the business and operations of your Company together with the Audited Financial Statements for the year ended 31st March, 2019.
Financial Results (As per IND AS)
(र In Lakhs, except EPS)
|Revenue from operations||8226.07||7137.04|
|Less : Finance Cost||28.09||34.71|
|Less : Depreciation and Amortisation expenses||123.41||124.36|
|Profit / (Loss) before Tax||(96.44)||(229.81)|
|Less: Provision for taxation||30.83||66.05|
|Net Profit / (Loss) after tax||(65.61)||(163.76)|
|Add: Other Comprehensive Income||3.42||6.73|
|Total Comprehensive Income||(62.19)||(157.03)|
|EPS (in र)||(0.34)||(0.85)|
Your Company achieved total revenue from operations of र 8,226.07 Lakhs as compared to र 7,137.04 Lakhs in previous year registering growth of around 15% over previous year. Increase in power & other input costs and disparity between cotton and yarn price resulted in net loss of र 65.61 lakhs for the year ended 31st March 2019. More details on operational and financial performance are provided in Management Discussion andAnalysis Report.
In view of loss incurred by the Company for the year ended 31st March, 2019, the Board of Directors of the Company has not recommended any dividend on the equity shares of the Company for the financial year under review.
Transfer to Reserves
During FY 2018-19, no amount has been transferred to the general reserves/ retained earnings of the Company.
The paid up equity share capital of the Company as on 31st March, 2019 is र 19,24,12,800/- comprising of 1,92,41,280 Equity shares of Face Value of र 10/- each. During the financial year 2018-19, your Company has neither issued equity shares with differential rights as to dividends, voting or otherwise nor has issued Sweat Equity shares. Your Company does not have any Employee Stock Option Scheme or Employee Stock Purchase Scheme.
Directors and Key Managerial Personnel
During the year under review, Dr. Ashok N. Desai (DIN: 03609419) was appointed as a Non-Executive Independent Director of the Company for a first termoffiveconsecutiveyearsw. st August, 2018. His appointment .f.1 was duly approved by the members of the Company at the Annual General Meeting (AGM) of the Company held on 11th September, 2018.
Ms. Preeti Sheth (DIN: 00202080) Non-Executive Independent Director of the Company resigned from the Directorship of the Company w.e.f. 16th January, 2019 due to personal reasons The Board places on record its appreciation and gratitude for the valuable guidance and contributions made by Ms. Preeti Sheth as a Board Member during her association with the Company.
Ms. Kala Agarwal (DIN: 08015576) was appointed as an Additional Director of the Company and as a Non-Executive Independent Director of the Company for a first term of five consecutive years w.e.f. 7 th February, 2019, subject to the approval of members of the Company. With the appointment of Ms. Kala Agarwal, the vacancy caused in the position of Woman Independent Director was filled within the prescribed time. The resolution for the appointment of Ms. Kala Agarwal as an Independent Director of the Company w.e.f. 7th February, 2019 is placed before the members at the ensuing AGM.
Mr. L. Viswanathan (DIN: 00193056) was appointed as an Additional Director of the Company and as a Non-Executive Independent Director of the Company for a first term of five consecutive years w.e.f. 8 th May, 2019, subject to the approval of members of the Company. The resolution for the appointment of Mr. L. Viswanathan as an Independent Director of the Company w.e.f. 8th May, 2019 is placed before the members at the ensuing AGM.
The aforesaid appointments were made by the Board pursuant to the recommendation of Nomination and Remuneration Committee (NRC).
The first term of Mr. S. K. Agrawal (DIN: 00400892), Independent Chairman is ending on 15th August, 2019 and he is eligible for re-appointment for a second term. Pursuant to the recommendation of NRC, the Board at its meeting held on 8th May 2019, approved and recommended to the members of the Company, re-appointment of Mr. S. K. Agrawal as a Non-Executive Independent Director designated as Chairman of the Company, not liable to retire by rotation for a second term of five consecutive years w.e.f. 16 th August, 2019 to 15th August, 2024. Accordingly, special resolution for his re-appointment is included in the Notice of ensuing AGM for approval of members of the Company.
Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Kamal Mitra (DIN: 01839261), Non-Executive Non Independent Director of the Company, retires by rotation at the ensuing AGM and being eligible, has offered himself for the re-appointment. The Board recommends his re-appointment for consideration at the ensuing AGM.
Members are requested to refer the Notice of the ensuing AGM for brief profile and other related information of Directors seeking appointment/re-appointment.
Mr. Pradyumna N. Shah (DIN: 00096793) and Mr. Anand Ramanna (DIN: 00040325), Independent Directors of the Company are not seeking re-appointment for a second term due to their advanced age and consequently, they shall cease to be Directors of the Company w.e.f. 16th August, 2019 due to expiry of their first term. The Board places on record its appreciation and gratitude for immense contributions and valuable guidance given by Mr. P. N. Shah and Mr. R. Anand during their long association as Board members of the Company.
During FY 2018-19, Mr. Dilip Kumar Ghorawat resigned from the position of Chief Financial Officer of the Company w.e.f. close of working hours of 20th September, 2018. In accordance with the provisions of Section 203 of the Companies Act, 2013 (Act), Mr. K. Muralidharan was appointed as Chief Financial Officer of the Company w.e.f. 3rd November, 2018 by the Board pursuant to recommendation of NRC.
As on 31st March, 2019, Mr. Ashok G. Halasangi, Chief Executive Officer, Mr. K. Muralidharan, Chief Financial Officerand Mrs. Amruta Avasare, Company Secretary & Compliance Officerare the Key Managerial Personnel (KMP) of the Company in terms of Section 203 of the Companies Act, 2013.
All the Independent Directors of the Company have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1)(b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge duties with an objective independent judgment and without any external influence. In the opinion of the Board, all Independent Directors are independent of the management.
Number of Board Meetings
During the year under review, 4 Board Meetings were held on 30th April, 2018, 1st August, 2018, 1st November, 2018 and 7th February, 2019. The maximum gap between any two consecutive Board meetings did not exceed 120 days.
Companys policy on appointment and remuneration of Directors and Key Managerial Personnel
Pursuant to Section 178 of the Companies Act, 2013, the Nomination and Remuneration Committee (NRC) has formulated "Nomination and Remuneration Policy" which deals inter-alia with appointment and remuneration of Directors, Key Managerial Personnel, Senior Management and other employees. The said policy is uploaded on the website of the Company and web-link thereto is https://www.pranavaditya.com/admin/uploads/pdf/Nomination_and_Remuneration_Policy.pdf
The salient features of the policy are as under:
I. Criteria for appointment:
a. NRC shall identify, ascertain and consider the integrity, qualification, expertise and experience of the person for the appointment as a Director of the Company and recommend to the Board his / her appointment. The Directors shall uphold ethical standards of integrity and probity and shall exercise their duties and responsibilities in the interest of the Company.
b. A person proposed to be appointed as Director should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. They shall possess appropriate core skills/ expertise/ competencies/ knowledge in one or more fields of finance, law, management, sales and marketing, administration, research and in the context of business and/or the sector in which the company operates. The NRC has the discretion to decide whether qualifications, expertise and experience possessed by a person are sufficient/ satisfactory for the concerned position.
c. The Company shall comply with the provisions of the Act and Listing Regulations and any other laws if applicable for appointment of Director of the Company. The Company shall ensure that provisions relating to limit of maximum directorships, age, term etc. are complied with.
II. Remuneration of the Whole Time /Executive Director(s) / Managing Director :
a. The remuneration including commission payable to the Whole Time /Executive Director(s) / Managing Director shall be determined and recommended by the NRC to the Board for approval.
b. While determining the remuneration of the Executive Directors, following factors shall be considered by the NRC/ Board:
Role played by the individual in managing the Company including responding to the challenges faced by the Company
Individual performance and company performance so that remuneration meets appropriate performance benchmarks
Reflectiveof size of the Company, complexity of the sector/ industry/companys operations and the Companys financial position
Consistent with recognized best industry practices.
Remuneration involves balance between fixed and incentive pay reflecting performance objectives appropriate to the working of the Company and its goals.
Remuneration is reasonable and sufficient to retain and motivate directors to run the company successfully.
III. Remuneration to Non- Executive / Independent Directors:
Sitting Fees: Independent Directors are entitled for sitting fees for attending meetings of the Board and committees (excluding Share Transfer Committee) and Independent Directors Meeting as may be approved by the Board within the limit specified under the Act.
Annual Evaluation of Board Performance and its Committee and Individual Directors
Criteria of performance evaluation of the Board Committees and Directors are laid down by Nomination and Remuneration Committee (NRC) of the Company. Further, pursuant to provisions of the Companies (Amendment) Act, 2017, NRC decided to continue existing method of performance evaluation through circulation of performance evaluation sheets based on SEBI Guidance Note dated 5th January, 2017 and that only Board should carry out performance evaluation of Board, Committees and Individual Directors.
An assessment sheet based on aforesaid SEBI Guidance Note, containing the parameters of performance evaluation along with rating scale was circulated to all the Directors. The Directors rated the performance against each criteria. Thereafter, consolidated score was arrived. Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out performance evaluation of its own, evaluation of working of the Committees and performance evaluation of all Directors in the said manner.
A meeting of Independent Directors of the Company was held on 1st August, 2018, in which Independent Directors inter-alia reviewed performance of Non-Executive Independent Chairman and other Non-Independent Directors and the Board as a whole through performance evaluation sheets.
Directors Responsibility Statement
Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act, 2013, your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them, state and confirm that:
in the preparation of the annual accounts for the year ended 31st March, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
such accounting policies as mentioned in the notes to the Financial Statements for the year ended 31st March, 2019, have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2019 and of the loss of the Company for the year ended on that date;
proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
the annual financial statements for the year ended 31st March, 2019, have been prepared on a going concern basis;
internal financial controls to be followed by the Company adequate and were operating effectively;
proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems were adequate and operating effectively.
During the year under review, there was no change in the composition of the Audit Committee of the Company. As on 31st March, 2019, the Audit Committee comprises of Mr. S. K. Agrawal, Independent Director as Chairman, Mr. P. N. Shah,
Mr. R. Anand, Independent Directors and Mr. Kamal Mitra, Non-Executive Non-Independent Director. More details on the Audit Committee are given in Corporate Governance Report. All the recommendations made by the Audit Committee were accepted by the Board.
In accordance with the provisions of Section 139 of the Act, at the Annual General Meeting ("AGM") held on 21st August, 2017, M/s. Suresh Kumar Mittal & Co., Chartered Accountants (Firm Registration No. 500063N) were appointed as the Statutory Auditors of the Company for a period of 5 years to hold office from the conclusion of the 27th AGM till the conclusion of 32nd AGM, subject to the ratification by members at every AGM.
The requirement to place the matter relating to appointment of Auditors for ratification by Members at every Annual General Meeting was omitted vide notification dated 7th May, 2018, issued by the Ministry of Corporate Affairs. Accordingly, no resolution is proposed for ratification of appointment of Auditors in ensuing AGM of the Company.
The Company has received a letter from M/s. Suresh Kumar Mittal & Co., Chartered Accountants confirming that they are eligible for continuing as Statutory Auditors of the Company.
The Auditors Report on standalone financial statements for the year ended 31st March, 2019 forms part of this Annual Report. The Auditors Report does not contain any qualifications, reservations, adverse remarks, disclaimer or emphasis of matter. Notes to the Financial Statements are self-explanatory and do not call for any further comments.
Secretarial Auditors and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Act, read with rules thereunder, the Board has appointed M/s. Kothari H. & Associates, a firmof Practicing Company Secretaries to conduct Secretarial Audit of the Company for the year ended 31st March, 2019. The Secretarial Audit Report issued by them in Form No. MR-3 is provided as an "Annexure 1" to this Report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.
Internal control systems and their adequacy
Your Company maintains adequate internal control system and procedures commensurate with its size and nature of operations. The internal control systems are designed to provide a reasonable assurance over reliability in financial reporting, ensure appropriate authorization of transactions, safeguarding the assets of the Company and prevent misuse/ losses and legal compliances.
The internal control system includes a well-defined delegation of authority and a comprehensive Management Information System coupled with quarterly reviews of operational and financial performance, a well-structured budgeting process and Internal Audit. The Internal Audit reports are periodically reviewed by the management and the Audit Committee and necessary improvements are undertaken, if required.
During the year under review, your Company has not accepted any deposits from public under Chapter V of the Act.
During the year under review, your Company does not have any subsidiaries or joint ventures or associate companies as defined under the Act.
However, the Company has framed a policy for determining material subsidiaries, which can be accessed at https://www.pranavaditya.com/admin/uploads/pdf/PSML_Policy_on_Material_Subsidiaries.pdf
Corporate Governance Report
As per Regulation 34(3) read with Schedule V of the Listing Regulations, your Company has complied with the requirements of corporate governance. The Corporate Governance Report along with Statutory Auditors Certificate confirming compliance of Corporate Governance for the year ended 31st March, 2019, is provided separately and forms integral part of this Annual Report.
Management and Discussion Analysis Report
Pursuant to Regulation 34 of the Listing Regulations, Management Discussion and Analysis Report containing information inter-alia on industry trends, your Companys performance, future outlook, opportunities and threats for the year ended 31st March, 2019, is provided in a separate section forming integral part of this Annual Report.
Extract of Annual Return
Pursuant to Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, Extract of the Annual Return in Form MGT-9 as on 31st March, 2019 is annexed as an Annexure 2 and is also available on the website of the Company at https://www.pranavaditya.com/admin/uploads/pdf/Form_MGT.9_-_Extract_of_Annual_ Return_for_the_year_ended_March_31,_2019_1.pdf Further, pursuant to Section 134(3)(a) of the Act, a copy of Annual Return for the year ended 31st March, 2019 will be hosted on the website of the company at www.pranavaditya.com.
Related Party Transactions
All Related Party Transactions entered during FY 2018-19 were on arms length basis and in the ordinary course of business. Further, there were no material related party transactions during FY 2018-19 under Section 188 of the Act and Regulation 23 of Listing Regulations. Hence, pursuant to the provisions of Section 134 of the Act, particulars of contracts/ arrangements with Related Parties are not required to be provided in Form AOC-2. The related party transactions are provided in the notes to the financial statements.
Prior approval of Audit Committee is obtained for all Related Party Transactions. A statement of all Related Party Transactions is reviewed by the Audit Committee and Board on quarterly basis. Your Company has adopted a policy on Related Party Transactions and is uploaded on the website of the Company at https://www.pranavaditya.com/admin/ uploads/pdf/PSML_-_Policy_on_Related_Party_Transactions.pdf The value of the proposed related party transactions for Financial Year 2019-20, 2020-21 and 2021-22 with Indo Count Industries Limited is likely to exceed threshold limits specified in the Listing Regulations. Hence, approval of members of the Company is being sought for proposed material related party transactions in the ensuing AGM.
Particulars of Loans, Investments, Guarantees, Securities under Section 186 of the Companies Act, 2013
During the year under review, pursuant to Section 186 of the Act, no loans were given to any person, nor any Guarantees or securities were provided. Further, no investment was made in the securities of any other body corporate.
The Company has devised Risk Management System which takes care of risk identification, assessment and Some of the risks faced by the Company are raw material price risk, financial risk, foreign currency risk etc. At present, there are no risks which in the opinion of the Board threaten the existence of the Company.
Vigil Mechanism / Whistle Blower Policy
Pursuant to the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations, your Company has established a vigil mechanism for the Directors and employees of the Company to report concerns about unethical behaviour, actual or suspected incidents of fraud or violation of Code of Conduct. The details of Vigil Mechanism/Whistle Blower Policy are provided in the Corporate Governance Report. The Vigil Mechanism / Whistle Blower Policy may be accessed on the Companys website at https://www.pranavaditya.com/admin/uploads/pdf/PSML_-_Whistle_Blower_ Policy_Vigil_Mechanism.pdf
Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace
In order to prevent sexual harassment of women at workplace, your Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to look into the complaints relating to sexual harassment at workplace of any woman employee. During the year under review, your Company has not received any complaint pertaining to sexual harassment and no complaint was pending as on 31st March, 2019.
Conservation of Energy, Technology Absorption & Foreign Exchange Earning & Outgo
Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo required under Section 134 (3) (m) of the Act, read with Rules thereunder is given as "Annexure 3" forming part of this Report.
Particulars of Employees and related disclosures
The information required pursuant to Section 197 read with Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 is provided as "Annexure 4-(I)" and "Annexure 4-(II)" to this report regarding remuneration of Directors, Key Managerial Personnel and other related disclosure.
Significant or Material orders passed by Regulators / Courts
During the year under review, no significant or material orders were impact the going concern status and Companys operations in future.
Material Changes and Commitments affecting the Financial Position of the Company
There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year 2018-19 and the date of this report.
During the year under review, your Company has complied with all the applicable standards. The same has also been confirmed by Secretarial Auditors of the Company.
During the year under review, provisions relating to the Cost Audit and Corporate Social Responsibility were not applicable to your Company.
Acknowledgements and Appreciation
We place on record sincere appreciation for the contribution and commitment by all the employees of the Company. Your Directors take this opportunity to thank Central and State Governments, customers, suppliers, shareholders and bankers for their consistent support and co-operation to the Company.
|For and on behalf of Board of Directors|
|S. K. Agrawal|
|Date : 8th May, 2019||Chairman|
|Place : Mumbai||DIN: 00400892|