Thambbi Modern Spinning Mills Ltd Directors Report.

TO THE MEMBERS,

The Directors submit the annual report of M/s Thambbi Modern Spinning Mills Limited along with the audited financial statement for the year ended 31st March, 2020.

FINANCIAL RESULTS

Particulars 2019- 2020 2018- 2019
Revenue from Operation 191.26 248.29
Profit / (Loss) before depreciation and taxation (134.31) (145.93)
Depreciation 63.27 60.45
Profit / (Loss) Before Taxation (197.57) (206.38)
Net Profit / (Loss) (218.23) (209.61)

PERFORMANCE

During the year under review, your companys revenue is Rs.191.26 Lakhs compared to the revenue of Rs.248.29 Lakhs in the previous year.

PROSPECTUS

The Company was promoted by Mr. N. Ramasamy Udayar by the year 1977. The Company is in the business of spinning and weaving of different type of fibers and yarns. The Company also involves in trading of cotton and yarns. Due to challenging business scenario in textile, this business activity is closed. The Company has developed a building for Commercial activity and presently let out for rent and earning rental income. The Company has plans for various real estate activities.

DIVIDEND

In order to conserve the resources of the Company and to expand and intensify the business operations, your Directors do not recommend any dividend for the year ending March 31, 2020

SHARE CAPITAL

During the year under review, there is no change in the capital of the Company. Authorised capital of the Company is Rs. 14 crores and paid up capital is Rs. 5,76,27,700/-

FINANCE

Cash and cash equivalents as at 31st March, 2020 was Rs. 28,54,661/-. The Company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

PUBLIC DEPOSITS

The Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 and any amendments thereto.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the notes to the financial statements.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Details of the same are provided in the Management Discussion and Analysis Report which forms part of this report.

CORPORATE SOCIAL RESPONSIBILITY

The Company has not taken any initiatives under "Corporate Social Responsibility" as the ceiling limit was not applicable to the Company as per Section 135 Companies Act 2013.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review Ms. Malathi Jagadeesan, Non-Executive Director retire by rotation at this Annual General Meeting and being eligible offer herself for re-appointment. Mr. R. Jagadeesan (DIN 00001703) being reappointed as Managing Director of the Company, for a period of three years with effect from 01st April 2019 at the 41st AGM held on 20th June, 2019. Mr. Ashok P Shah (DIN: 01137579) and Mr. MuthuUdayar Pugazhendhi (DIN: 01137623) Independent Directors, and their first tenure of appointment expires and being eligible, seeks reappointment. The board recommends their re-appointment.

None of the Directors is disqualified for appointment/reappointment under Section 164 of the Companies Act, 2013.

The composition of the board, meetings of the board held during the year and the attendance of the directors thereat have been mentioned in the report on corporate governance in the boards report.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 that the Independent Directors of the Company meet with the criteria of their Independence laid down in Section 149(6).

A separate meeting of the Independent Directors was held on February 12, 2020 to review the performances of;

(a) Non-independent Directors and Executive Directors;

(b) To assess the quality, quantity and timeliness of flow of Information

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The details of the familiarisation programme for the Independent Directors is reported in the Report on Corporate Governance, which is attached to the Boards Report.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 15 (2) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Independent Directors at their meeting without the participation of the Independent Directors, considered/evaluated the

Boards performance, Performance of the Managing Director and other Independent Directors. The criteria for performance evaluation have been detailed in the Corporate Governance Report which forms part of this report.

POLICIES

The Company is compliant with the following policies/charters: - Audit Committee Charter - Nomination and Remuneration Policy - Vigil Mechanism/Whistle Blower Policy - Policy for determination of Materiality of any Event/Information - Policy on Independent Directors - Related Party Transaction Policy

- Code of conduct for prevention of insider trading and code of practices and procedures for fair disclosure of unpublished price sensitive information - Policy for preservation of documents and Archival Policy

All the policies are available in the website of the Company www.thambbimodern.com

BOARD MEETINGS

The Board of Directors met 06 times during the financial year 2019-20. The dates of the Board meetings are as follows: 29th May, 2019, 10th August, 2019, 11th November, 2019, 06th January, 2020, 12th February, 2020 and 28th February, 2020

AUDIT COMMITTEE

Details of Composition of Audit Committee are covered under corporate governance report annexed with this report and forms part of this report. Further, during this year all the recommendations of the Audit committee have been accepted by the Board.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134 of the Companies Act, 2013:

a) in the preparation of the annual financial statements for the year ended March 31, 2020, the applicable Accounting Standards had been followed along with proper explanation relating to material departures for the financial year ended 31st March, 2020, such accounting policies as mentioned in the Notes to the financial statements have been applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company and of the Profit and Loss of the Company for the year ended 31st March, 2020.

b) that 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.

c) the annual financial statements have been prepared on going concern basis.

d) that proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively.

e) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

RELATED PARTY TRANSACTIONS

There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large.

SUBSIDIARY COMPANIES

The Company does not have any subsidiary.

CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the Company.

All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard.

SECRETARIAL AUDIT REPORT

According to the provision of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company engaged the services of Mr. R. Thamizhvanan, Membership No: 11151, Practising Company Secretary, Chennai to conduct the Secretarial Audit of the Company for the Financial Year 2019-20.

The Secretarial Audit Report submitted by the Company Secretary in Practice is enclosed as a part of this Annual report in Annexure-I, which is self-explanatory.

The Secretarial Auditor has observed that the position of Company Secretary and Compliance officer was vacant till 28th February, 2020 and few delay in filing BSE compliances of The Securities and Exchange Board of India (Listing Obligation and Disclosure Regulation), 2015.

OBSERVATIONS IN SECRETARIAL AUDITORSf REPORT

The Company has appointed Ms. M. Harshini, as Company Secretary & Compliance officer with effect from 01st March, 2020 to confirm with the requirement of SEBI & Companies Act. Delay in filing with BSE was due to the vacancy and the same has been fulfilled. Hence here wont be any delay or non compliance with respect to SEBI, Companies Act and other regulatory matters.

AUDITORS

The Auditors M/S. R. Sundararaman & Co Chartered Accountants (Firm Regn.No.004219S) has been re-appointed as Statutory Auditors of the Company for the period of audit from financial year 2018-19 to 2021-22 at the 40th Annual General Meeting held on 27th December, 2018.

OBSERVATIONS IN AUDITORSf REPORT

The Auditors report does not contain any qualification, reservation or adverse remarks.

COST AUDIT

The Central Government has not prescribed maintenance of cost records for the existing business activities of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

It is comprising of all information as prescribed under Regulation 34 (2) (e) and schedule V of the

SEBI (Listing obligation and Disclosure Requirement) Regulations, 2015 is attached to the Boards

Report Annexure VI. Disclosures have been made by the Senior Management relating to all material, financial and commercial transactions with personal interests, if any. Based on the declarations made, no transaction was in conflict with the interest of the Company.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure-II

HUMAN RESOURCES

Your Company treats its human resources as one of its most important assets. Your Company continuously invests in attracting, retaining and developing talent on an ongoing basis. Your

Companys thrust is on the promotion of talent internally through job rotation and job enlargement.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, No employees are drawing remuneration in excess of the limits set out in the said Rules. Having regard to the provisions of Section 136(1) read with its relevant provision of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available at the website and also at the Registered Office of the Company for inspection during working hours and any member interested in obtaining such information may write to the Compliance Officer and the same will be furnished without any fee and free of cost.

REMUNERATION POLICY OF THE COMPANY

The Remuneration policy of the Company comprising the appointment and remuneration of the Directors, Key Managerial Personnel and Senior Executives of the Company including criteria for determining qualifications, positive attributes, Independence of a Director and other related matters have been provided in the Corporate Governance Report which forms part of this report.

CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION

The Company has taken adequate steps to adhere to all the stipulations laid down under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance included as a part of this Annual Report is given in Annexure-V.

Certificate from the Statutory Auditors of the Company confirming the compliance with the conditions of Corporate Governance as stipulated under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this Annual Report.

CODE OF BUSINESS CONDUCT AND ETHICS

The Board of Directors has approved a Code of Conduct and Ethics in terms of Schedule IV of Companies Act, 2013 and Listing Agreement. All the Board Members and the Senior Management personnel have confirmed compliance with the Code for the year ended March 31, 2020. The annual report contains a declaration to this effect signed by the Managing Director and CFO.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE POLICY

The Companys policy on Prevention of Sexual Harassment of Women provides for the protection and prevention against sexual harassment of women employees at the workplace and redressal of such complaints. There were no complaints received or pending for redressal during the FY 19-20.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

In accordance with section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015 the company has established a Vigil Mechanism and has a Whistle Blower Policy. The policy provides a mechanism for all employees to report to the management, grievances about the unethical behavior or any suspected fraud. The policy is available at the website of the company www.thambbimodern.com

PREVENTION OF INSIDER TRADING:

The Company has complied with the provisions of SEBI (Prevention of Insider Trading) Regulations. The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. The code of conduct for prevention of insider trading is available in the website of the company www.thambbimodern.com

COMPLIANCE OF SECRETARIAL STANDARD

The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government as required under Section 118(10) of the Companies Act, 2013

COMPLIANCE UNDER COMPANIES ACT 2013

Pursuant to Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, your Company complied with the compliance requirements and the detail of compliances under Companies Act, 2013 are enumerated below.

FUND RAISING:
Equity Nil
Deposits - Nil

DEBT

During the year, your Company has obtained LRD Loan to the tune of Rs. 300 Lakhs from M/s HDFC Ltd after taken over of Rs.180 lakhs of LIC HFL Ltd. Coimbatore and in IDBI Rs.907.76 lakhs outstanding as on 31.03.2020 and the Company has repaid Rs.25.75 Lakhs as at 31.03.2020.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.

RESEARCH AND DEVELOPMENT, CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO - NIL

ACKNOWLEDGEMENT

The Directors wish to express their appreciation for the continued co-operation of financial institutions. The Directors also wish to thank the employees for their contribution, support and continued co-operation throughout the year.

By order of the Board of Directors

R. Jagadeesan Malathi Jagadeesan
Managing Director Director
DIN: 01153985 DIN: 00153952
Place: Salem
Date: 24/07/2020