Siyaram Silk Mills Ltd Directors Report.

To the Members,

Your Directors have pleasure in presenting the 42nd Annual Report of the Company along with Audited Financial Statements for the year ended 31st March, 2020.


(Rs in Lakhs)

Particulars 2019-20 2018-19
Net Turnover and other Income 1,73,218 1,84,295
Profit before Depreciation, Exceptional Item and Tax 16,038 22,110
Less: Depreciation 7,278 6,189
Profit before Exceptional Item and Tax 8,760 15,921
Less : Exceptional Item - 472
Profit before Tax 8,760 15,449
Less: Tax Expense
Current Tax 2,105 5,138
Deferred Tax (514) 361
Income Tax related to earlier year - (166)
1,591 5,333
Profit after Tax 7,169 10,116
Add/(Less): Other Comprehensive Income (net of taxes) (112) 137
Total Comprehensive Income for the year 7,057 10,253


During the year under review, the Total Income of your Company was Rs 1,73,218 Lakhs as compared to Rs 1,84,295 Lakhs in the previous year. The net profit for the year stood at Rs 7,057 Lakhs against Rs 10,253 Lakhs in the previous year.


During the year, the Company has paid 1st Interim Dividend of 310% i.e. Rs 6.20 per Equity Share (including Special Dividend of 200% i.e. Rs 4.00 per Equity Share) and a 2nd Interim Dividend of 120% i.e. Rs 2.40 per Equity Share aggregating to Rs 8.60 per Equity Share of Rs 2/- each for the F.Y.2019-20 (previous year Dividend was Rs 4.40 per Equity Share of Rs 2/- each). No final dividend has been recommended on the Equity Shares by the Board.


The Paid-up Share Capital of the Company as on 31st March, 2020 was Rs 937.40 Lakhs. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March, 2020, none of the Directors of the Company hold convertible instruments in the Company.


The Company has not transferred any amount to General Reserves during the year under review.


Current Year Global Economic Overview.

During the year under review, the global economy was in the process of a synchronized downswing in 90% of the World economies. Escalating trade disputes and wide ranging Policy disputes impacted manufacturing activities, trade flows and investments. Uncertainty about the exact nature and timing of Brexit further added to uncertainty about European and British economic growth prospects. Despite all this the economic situation was just beginning to stabilise but with the outbreak of Covid-19 pandemic all the economies of the World came to a total halt starting with China. Restrictions on movement of people, goods and services and containment measures began to have a draconic effect on the economies of the World in the last quarter of the year under review.

Current Year Indian Economic Overview.

During the year under review, domestic demand has taken a breather. Several factors such as stagnating rural wages, tightening lending conditions and rising unemployment contributed to low demand for goods and services. Additionally structural factors have contributed to the sluggishness. Weak global demand affected export growth while uncertainty impacted business investments as capital flow remained volatile.

On the supply side, excess idle production capacities, weakening corporate profits and infrastructure bottlenecks have slowed down investment in production facilities. Moreover governments incentives to stimulate the economy and poor revenue collections put pressure on the fiscal balance. Credit growth suffered as credit to consumer durables and the industry at large shrunk. Weakening bank balance sheet, rising non-performing assets and slowing informal sector lending have impacted the ability and willingness of financial institutions to lend which in turn has adversely affected the financial sector.

The spread of Covid -19 pandemic further damaged the already battered Indian Economy in the last quarter of the year under review.

Indian Textile Industry Overview.

During the year under review, the Indian Textile Industry, amids a subdued demand scenario in the domestic as well as the international markets and intensifying competition, witnessed muted sales growth and moderation in profitability. The slight recovery that was in sight was negated by the outbreak of Covid -19 pandemic in China in December, 2019 and then by the sudden lock down of the country implemented to prevent the spread of Covid-19 pandemic.

The difficult market conditions has resulted in drop in the topline as well as the bottomline of the Company.

Global Economic Future Outlook.

The International Monetary Fund(IMF) has warned this is the worst recession since the Great Depression which will dwarf the economic damage caused by the Depression. The Covid-19 pandemic will shrink world output by 3% in 2020 and recovery depends critically on the pandemic being brought under control in the second half of 2020. During this crisis major Central Banks have dramatically boosted the size of their Balance Sheets pumping liquidity into the market at a pace never seem before, in order to offset the shrinkage of economy and credit market activity.

This is expected to tame inflation. If anything there is actually a risk of deflation. We have already seen volatility in oil prices, mass unemployment, shortages of some consumer supplies and undermining of globalization as many countries have already engaged in protectionist action. Meanwhile some of the challenges to globalization that preceded the coronavirus crisis remain. However with every country providing financial package to stimulate industrial and financial activity, it is expected we will see the back of the crisis sooner or later.

Indian Economic Future Outlook.

The jolt from the coronavirus outbreak will weigh significantly on the Indian Economic growth until the pandemic is brought under control. The prolonged financial stress on account of the Covid-19 pandemic among rural households, weak job creation and, more recently, a credit crunch among non-banking financial institutions have increased the probability of a more entrenched weakening of the Indian Economy. The lockdown has brought manufacturing and services to a grinding halt, prompting many to predict that the Indian economy may contract by more than 2 per cent in 2020-21. However stimulus packages extended by the Government from time to time to support the economy should reduce the depth and duration of Indias growth slowdown.

Textile Industry Outlook.

The year ahead looks very grim for the Indian Textile Industry as both domestic consumption as well as export demand would be badly affected at least in the 1st half of 2020-21. Production activity would also be affected on account of shortage of raw material and labour as well as on account of the credit crunch. Recovery in the 2nd half of 2020-21 would be dependent on how the pandemic is controlled and on measures taken by the Government to revive the economy as well as the support it extends to the Textile Industry.

Your Company has survived many a difficult times.

Your Company with its inherent strengths like visionary leadership, versatile work force, well known Brands, ultra modern manufacturing facilities, aggressive marketing strategies and well penetrated distribution network is confident to tide over this difficult phase too.

Internal Financial Control system.

Your Company has in place an adequate internal financial control system, commensurate with the size and complexity of its operations. Necessary checks and controls are in place to ensure that all assets are safeguarded, to detect and prevent errors and frauds and that the transactions are properly verified, adequately authorized, correctly recorded and properly reported. The Internal Auditors of the Company conduct Audit of various departments to ensure that internal controls are in place and submit Quarterly Reports to the Audit Committee. The Audit Committee regularly reviews these Reports and the Company when needed takes corrective actions. The Internal Auditors also audit the effectiveness of the Companys internal financial control system. No major inefficiencies were reported.

Human Resources/ Industrial Relations.

Your Company treats its Human Resources as its important asset and believes in its contribution to the all-round growth of your Company. Your Company takes steps, from time to time, to upgrade and enhance the quality of this asset and strives to maintain it in agile and responsive form. Your Company is an equal opportunity employer and practices fair employment policies. Your Company is confident that its Human Capital will effectively contribute to the long term value enhancement of the organization.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Industrial relations with staff and workmen during the year under review continued to be cordial.

Key Financial Ratios

Ratios 2020 2019 Change
Debtors Turnover 4.74 4.46 6.28%
Inventory Turnover 4.00 4.27 (6.32%)
Interest Coverage Ratio 3.04 4.29 (29.14%)
Current Ratio 1.78 1.78 -
Debt Equity Ratio 0.13 0.18 (27.78%)
Operating Profit Margin % 3.34% 7.43% (55.05%)
Net Profit Margin % 4.22% 5.57% (24.24%)
Return on Net Worth % 9.35% 13.00% (28.08%)


(1) Above ratios are based on Standalone Financials of the Company.

(2) Lower Interest Coverage Ratio, Operating Profit Margin, Net Profit Margin and Return on Net Worth is due to lower profitability during the year.

Forward Looking Statements.

Statement in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factors. other incidental factors.


A report on Corporate Governance as stipulated in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI (LODR) Regulations, 2015"/ "the Listing Regulations"), together with Certificate of the Company confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid regulations, forms part of the Annual Report.


Directors appointment / re-appointment: Shri. Ashok M. Jalan, Director, retires by rotation and being eligible, offers himself for re-appointment. Your Directors commend his re-appointment.

Shri. Sachindra N. Chaturvedi, Shri. Deepak R. Shah, Shri. Ashok N. Desai and Shri. Chetan S. Thakkar were appointed as Additional Directors by the Board w.e.f. 1st August, 2019 and hold office upto the date of the ensuing Annual General Meeting (AGM). They were also appointed as Independent Directors for a period of 5(five) continuous years with effect from 1st August, 2019 till 31st July, 2024, subject to approval of the members at the AGM. Resolution for their appointment as a Director as well as Independent Director of the Company is proposed for the approval of the members at the ensuing AGM. Your Directors commend their appointment.

Brief resume of Directors being appointed/ re-appointed as required by the SEBI (LODR) Regulations, 2015 and Secretarial Standards on General Meetings are provided in the Annexure to the notice convening the AGM of the Company.

During the year under review, Smt. Ashadevi R. Poddar, resigned as Executive Director on expiry of her term of appointment and Shri. Harish N. Motiwalla, Shri.

Mangesh D. Teli, Shri. Shailesh S. Vaidya, Shri. Ashok N. Garodia, Shri. Dileep H. Shinde, Shri. Pramod S. Jalan, Shri. Tarun Kumar Govil, Independent Directors, ceased to be Directors of the Company on expiry of their term of Office. Your Directors place on record their appreciation of the invaluable services rendered by them during their association with the Company.

Declaration from Independent Directors.

All Independent Directors have given declaration that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and regulation 16(1)(b) of SEBI (LODR) Regulations, 2015.

Companys Policy on appointment and remuneration of Directors.

Appointment of Independent Directors.

All Independent Directors of the Company are appointed for a term of 5 years. Accordingly, the Independent Directors viz., Smt. Mangala R. Prabhu holds office upto 24th March, 2024 and Shri. Sachindra N. Chaturvedi, Shri. Deepak R. Shah, Shri. Ashok N. Desai, and Shri. Chetan S. Thakkar hold office upto 31st July, 2024.

Criteria for appointment of Independent Directors.

The Independent Directors shall be of high integrity with relevant experience and expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management, so as to have a diverse Board.

Criteria for appointment of Managing Directors/ Whole Time Directors.

The Nomination and Remuneration Committee shall identify persons of integrity who possess relevant experience and expertise particularly in the Textile Industry, leadership qualities required for the position and shall take into consideration recommendation, if any, received from any member of the Board.

Remuneration Policy.

The Company follows a policy on remuneration for Directors and Senior Management Employees, details of the same are given in the Corporate Governance Report.

Performance Evaluation.

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Nomination and Remuneration Committee has laid down the criteria for evaluation of the performance of Individual Directors, the Board as a whole and also the Secretarial Department. Evaluation of performance is undertaken annually. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors at a separately convened meeting held on 7th March, 2020 at which the performance of the Board as a whole was also evaluated and the performance of the Secretarial Department was also reviewed. The Company has implemented a system of evaluation on the basis of a structured questionnaire which comprises evaluation criteria taking into consideration various performance related aspects. The performance evaluation of the Independent Directors was carried out by the entire Board (excluding the Director being evaluated). The Directors expressed their satisfaction with the evaluation process.


The Board of Directors met 6(six) times during the year, the details of which are provided in the Corporate Governance Report.


The Board has the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

4. Corporate Social Responsibility Committee

5. Finance Committee

6. Share Transfer Committee

7. Risk Management Committee

8. Allotment Committee

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.


As stipulated under Section 134(3)(c) of the Companies

Act, 2013, your Directors confirm as under:-

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

ii) that the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2020 and of the profit of the Company for the year under review;

iii) that the Directors have taken proper and sufficient care for 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;

iv) that the Directors have prepared the accounts for the financial year on going concern basis.

v) the Directors have laid down internal financial controls, which are adequate and were operating effectively.

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.


Extract of the Annual Return in Form No. MGT - 9 as required under section 92 of the Companies Act, 2013 is annexed herewith as Annexure - I to this Report. In compliance with section 134(3)(a) of the Act Form MGT – 9 will be uploaded on the Companys website and can be accessed at


During the year under review, your Company has not accepted any fixed deposits and there were no unclaimed deposits or interest thereon as on 31st March, 2020.


Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, are provided in the notes to the Standalone Financial Statements.


The Company has a wholly owned foreign subsidiary, namely Cadini S.R.L., Italy. Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the subsidiary is given in Form AOC-I and forms part of the Annual Report.


The Consolidated Financial Statements of the Company are prepared in accordance with the relevant Indian Accounting Standard issued by the Institute of Chartered Accountants of India and forms part of the Annual Report.


The Company has framed a Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The details of the Policy are given in the Corporate Governance Report and the Policy is posted on the Companys website at the link Final_Whistle_Blower_Policy.pdf


All related party transactions that were entered into during the financial year were in the ordinary course of business and were on an arms length basis. There are no materially significant the Company with Promoters, Directors, Key Managerial Personnel or other related parties which may have a potential conflict with the interest of the Company at large. During the year, the Company has not entered into related party transactions which could be considered as material in accordance with the policy on Related Party Transactions of the Company. Accordingly, the disclosure of related party transactions as required under section 134(3)(h) of the Companies Act, 2013 in Form AOC -2 is not applicable to your Company.

All related party transactions for the year are placed before the Audit Committee as well as before the Board for approval. The transactions entered into with related parties are reviewed on a quarterly basis by the Audit Committee. The policy on Related Party Transactions as approved by the Audit Committee and Board is uploaded on the Companys website at the link uploads/1575468646_Related-Party-Transaction-Policy. pdf Members can refer to Note No. 42 to the Standalone Financial Statements which sets out related party disclosures.


In line with the regulatory requirements, the Company has framed a Risk Management Policy to identify and assess the key business risk areas and to put in place a mechanism for mitigation of risk. A detailed exercise is being carried out at regular intervals to identify, evaluate, manage and monitor all business risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.


There are no significant Regulators / Courts which would impact the going concern status of the Company and its future operations.


The spread of COVID-19 Pandemic has affected economic activity at both micro and macro level as well as the day to day life of every human. Due to COVID-19 situation, there have been several restrictions imposed by the Governments across the globe on the travel, goods movement and transportation to restrict its spread keeping in mind public health and safety. On March 24, 2020, the Government of India ordered a nationwide lockdown for 21 days which further got extended till 30th June, 2020 to prevent community spread of COVID-19 in India resulting in significant impacted the normal business operations of the Company since March 2020 by way of interruption in production, sales and other activities. Our production facilities have resumed partial operations however supply chain continues to be disrupted due to the Lockdown. Even though we lost only around 52 days of production till resumption of partial operations, it will impact revenues and profitability atleast related party transactions made by for 1st half of F.Y.2020-21. However we are confident that we can recoup the shortfall in subsequent quarters provided the spread of COVID-19 Pandemic is controlled.

The Company is closely monitoring the impact on various aspects of its business including its Customers / Vendors / Employees and other business partners. The Company has made assessment of liquidity position for the F.Y. 2020-21 including recoverability of carrying value of its assets such as loans, Investment, Inventories, receivables etc. The Company expects to fully recover the carrying amount of these assets. The impact assessment of COVID – 19 is an ongoing process and may be different from that envisaged as at the approval of these financial statements given the uncertainties associated with its nature and duration and the Company will continue to monitor all material changes to the Companys environment.

There have been no other material changes or commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the Report.


Information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014, is given in Annexure –II to this Report.


The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure –III to this Report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Policy is available on the Companys website at the linkhttps://www.siyaram. com/uploads/1575468807_Social_Responsibility_Policy-SSML.pdf


a. Statutory Auditors:

In the 39th AGM held on 9th September, 2017, M/s. Songira & Associates, Chartered Accountants, (FRN.128085W), have been appointed as Statutory Auditors of the Company for a period of 5(five) years from the conclusion of the 39th AGM till the conclusion of the 44th AGM of the Company to be held in the year 2022. Further, the Report of the Statutory Auditors, M/s. Songira & Associates, Chartered Accountants, forms part of the Annual Report. The observations made in the Auditors Report are self-explanatory and therefore do not call for any further comments.

b. Cost Auditors:

As per the provisions of section 148 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014 framed thereunder, the Cost Audit of the cost records of the Company for the F.Y. 2019-20 was carried out by M/s. Bhuta & Associates, Cost Accountants and the related Report will be filed on or before 27th September, 2020. The Cost Audit Report for the F.Y. 2018-19 was filed on 18th September, 2019.

The Board of Directors has appointed M/s. Bhuta & Associates, Cost Accountants, as Cost Auditors to audit cost records of the Company for the F.Y. 2020-21. A resolution seeking members approval for the remuneration payable to them forms part of the Notice convening the AGM.

c. Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. GMJ & Associates, Company Secretaries to undertake Secretarial Audit for the financial year 2019-20 in place of Mr. Jugalkishore Fatehchandka, Company Secretary in Practice. The Secretarial Audit Report is annexed herewith as Annexure – IV.

There is no secretarial audit qualification for the year under review.


The information required pursuant to Section 197(12) of the Companies Act, 2013, read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as Annexure - V. In terms of the provisions of Section 197(12) of the Act read with sub-rule (2) and (3) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the norms and other particulars of employees drawing remuneration in excess of the limits set out in the said Rules are to be provided in the Report.

However, having regard to the provisions of the first proviso to section 136(1) of the Companies Act, 2013 the details are excluded from the Report sent to members. The required information is available for inspection at the registered office/ corporate office and the same shall be furnished on request.


There is no change in the nature of business of your Company during the year under review.


The Business Responsibility Report as required by Regulation 34(2)(f) of the SEBI (LODR), Regulations, 2015 is annexed as Annexure – VI and forms part of this Report.


Your Company is grateful for the continued co-operation and support extended to it by the Government and Semi-Government Authorities, Shareholders, Financial Institutions, Banks, Customers and Vendors. Your Directors also express their warm appreciation for the dedicated and sincere services rendered by the Employees of the Company.

For and on behalf of the Board of Directors
Place: Mumbai Chairman and Managing Director
Dated: 27th June, 2020. DIN - 00090104