Yarn Syndicate Ltd Directors Report.

To

The Members of YARN SYNDICATE LIMITED

Your Directors present their 72nd Annual Report of the company together with the Audited Accounts for the Year ended on 31st March, 2018.

FINANCIAL RESULTS :

2017-2018 2016-2017
Rs. in Thousand Rs. in Thousand
Revenue from Operations 27325 82996
Other Income 45358 435
Profit/(Loss) before Interest & Depreciation 30836 1685
Less: Interest 390 714
Depreciation 750 811
1140 1525
29696 (160)
Add: Exceptional item -
Profit/Loss before Tax 29696 (160)
Less: Current & Deferred Tax Charge 7687 116
Profit/(Loss) after Tax 22009 (44)
Add: Balance brought from last year (94362) (94318)
Balance carried forward to next year (72353) (94362)

DIVIDEND:

Your Directors do not recommend dividend on Equity Shares for the Financial Year ended 31st March, 2018.

TRANSFER TO RESERVES:

Your Directors do not propose to transfer any amount to the general reserves.

SHARE CAPITAL:

The paid up equity share capital as on 31st March, 2018 was Rs. 375 lahks. During the year under review, the company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

SUBSIDIARIES, JOINT VENTURES & ASSOCIATE COMPANIES:

The Company does not have any subsidiaries, joint ventures and associate companies.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

A Familiarization programme about roles, rights and responsibilities of Independent Directors in the Company, nature of industry in which the company operates, business model of the company etc. is in existence in the company.

FINANCE:

Cash and cash equivalent as at 31st March 2018 was Rs. 11,43,557 (previous year: Rs. 44,07,039). 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.

PERFORMANCE REVIEW:

During the financial year under review, the companys export performance in yarn has not picked up mainly due to the unfavorable orders/enquiries from customers, even though trading activities have been undertaken during the year. The export market remains highly competitive and margins are thin and not lucarative at present. The company is also marketing different kind of products like fabric products, linen fabric products and paper bags.

The company has continued to explore newer markets for yarn and other products and at the same time maintaining its excellent business relations with its existing customers in order to get some orders in the export business. The sale of products like linen fabrics and other kind of fabrics was Rs.273.25 lakhs during the year 2017-18 as compared to sales of Rs. 829.96 lakhs during the previous year. The company hopes that the overall market conditions will be more favorable this year.

During the year, the company sold off Its office premises located at 2A Maker Bhavan No. 2, 2nd Floor, 18, New Marine Lines, Mumbai - 400020 to a suitable buyer.

CORPORATE SOCIAL RESPONSIBILITY:

Since the company does not fall within the purview of provisions as mentioned in Section 135 of the Companies Act, 2013 the details of constitution of Committee and initiatives taken by the company are not mentioned.

OCCUPATIONAL HEALTH AND SAFETY:

The company believes In the safe and healthy working conditions and has provided safety equipments in the offices.

PARTICULARS OF EMPLOYEES:

Your Company did not employ any person whose particulars are required to attached to this Report under Rule 5 of the Companies (Appointment & Remuneration) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES & INVESTMENTS:

Details of loans and guarantees given and investments made If any under Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements.

PUBLIC DEPOSITS:

The company has not accepted any deposit from the public under Chapter V of the Companies Act, 2013 or the corresponding provisions of Section 58A of the Companies Act, 1956 and there Is no amount outstanding as on the Balance Sheet date.

DIRECTORS :

As per provisions of Section 152 of the Companies Act, 2013, Sri Rishiraj Patodia, (DIN No. 00259104) Director of the Company retires by rotation and Is eligible for re-appointment.

The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.

The Board is in process to comply with the composition of the Board of Directors due to vacancy caused earlier by the resignation of an independent director from the Board of Directors of the Company.

KEY MANAGERIAL PERSONNEL:

Mrs. Sheela Patodia and Mr. Rishiraj Patodia are the Managing Director and Whole-time Director of the Company. Mr. B Chatterji is the Company Secretary.

SEBI amended SEBI (LODR) Regulations, 2015, according to new provision a person who has attained the age of 75 years can continue directorship in listed company as a Non Executive Director after the concerned listed company has taken the approval of its shareholders by way of a special resolution. The said provision comes into effect 1st April, 2019. In the opinion of the Board, Mr. Chhabria is a person of high repute, intergrity and hence rich and varied experience and hence their directorship Is recommended for approval to be continued till the expiry of his term.

BOARD EVALUATION:

Pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Board has carried out annual performance evaluation on Its own performance, the directors Individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Relationship Committee. The evaluation of all the Directors and the Board as a whole was conducted and the Board approved the evaluation results as collated by the concerned Committee.

NOMINATION AND REMUNERATION POLICY:

The Company has a policy for selection and appointment of Directors, Senior Management and their remuneration. For maintaining the Independence of the Board and separate its functions, the Companys policy Is to have an appropriate combination of Executive and Independent Directors.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

During the year under review, all contracts/arrangements/transactions entered by the company during the financial year with related parties were In the ordinary course of business and on an arms length basis and hence do not fall under the ambit of Section 188(1) of the Act. There were no material Related Party Transactions entered into by the company with promoters, directors, KMP or other designated persons during FY 2017-18. Your Directors draw attention of the members to Note No. to the Financial Statement which sets out related party disclosures. In view of the above, the disclosure under the Act in Form AOC-2 is not applicable for FY 2017-18.

MEETINGS OF THE BOARD OF DIRECTORS:

The Board of Directors met 4 (four) times during the year on 30th May 2017 adjourned to 31st May 2017, 14th September 2017, 14th November 2017 adjourned to 15th December 2017, and 14th February 2018 adjourned to 3rd March, 2018. The details of the Board Meetings and the attendance of Directors are provided in the Corporate Governance Report.

INTERNAL FINANCIAL CONTROLS:

The Company has In place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness In the design or operation were observed.

DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declaration of independence In terms of Section 149(7) of the Companies Act, 2013 from the above mentioned independent directors.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956 & Section 134 of the Companies Act, 2013 with respect to Directors Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the Annual Accounts for the financial year ended 31st March, 2018, the applicable accounting standards had been followed;

(ii) that the Directors had 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 the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) that the Directors had 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 the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors had prepared the accounts for the financial year ended 31st March, 2018 on a going concern basis.

(v) and that we, had laid down internal financial controls to be followed by the company and that such internal financial controls were adequate and operating effectively.

(vi) That we had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE GOVERNANCE :

A Report on Corporate Governance and Management Discussion and Analysis as required under Clause 49 of the Listing Agreement is attached.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information required to be given under Rule 8 (3) of the Companies (Accounts) Rules, 2014 is provided below:

(A) Conservation of energy-

(I) the steps taken or impact on conservation of energy : Nil

(ii) the steps taken by the company for utilizing alternate sources of energy : Nil

(iii) the capital investment on energy conservation equipments; Nil

(B) Technology absorption-

(i) the efforts made towards technology absorption - Nil

(ii) the benefits derived like product improvement, cost reduction, product development or Import substitution - Nil

(iii) in case of Imported technology (Imported during the last three years reckoned from the beginning of the financial year) - Nil

(a) the details of technology Imported;

(b) the year of import;

(c) Whether the technology been fully absorbed;

(d) If not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and

(iv) the expenditure incurred on Research and Development. - Nil

There were no foreign exchange earnings or outgo during the year under review.

EXTRACT OF ANNUAL RETURN:

Extract of Annual Return In form MGT-9 Is attached as an Annexure to this Report.

VIGIL MECHANISM:

The company has a vigil mechanism named Whistle Blower Policy to deal with instances of fraud and mismanagement.

COST RECORDS AND COST AUDIT:

Pursuant to Section 148 of the Companies Act, 2013, the Central Government has prescribed maintenance and audit of cost records vide the Companies (Cost Records and Audit) Rules, 2014 to such class of companies as mentioned In the Table appended to Rule 3 of the said Rules. These rules are not applicable to the Company.

SECRETARIAL AUDIT:

Secretarial Audit Report dated 29th May, 2018 Issued by M/s. Ekta Goswaml & Associates, Practicing Company Secretary is attached as an Annexed to this Report. The observations made by the Secretarial Auditor are self-explanatory and do not require further comments.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

The Company has no amount lying under unpaid dividend or unpaid Interest account or such other amount as mentioned under Section 125 of the Companies Act 2013 and hence no amount is required to be transferred to the Investor Education and Protection Fund.

CORPORATE GOVERNANCE:

As per Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate report on Corporate Governance Is enclosed as a part of this Annual Report.

A certificate from the Auditors of the Company regarding compliance as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 Is annexed to the Report on Corporate Governance.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION AND REDRESSAL) ACT, 2013:

Your Company has zero tolerance towards sexual harassment at workplace. It has In place a policy In line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder.

The Company has not received any complaint of sexual harassment during the financial year 2017- 2018.

AUDITORS OBSERVATIONS:

In respect of the reference to the Notes on Accounts In the Auditors Report, your Directors have to state that the same are self-explanatory and do not need further clarification.

COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with the requirements of Secretarial Standards -SS-1 and SS-2 issued by the Institute of Company Secretaries of India during the year.

AUDITORS :

Pursuant to the amendment of Section 139 of the Companies Act, 2013 effective from May 7, 2018 the requirement related to ratification of appointment of Statutory Auditors by the members of the Company at every AGM was omitted. In view of the above It Is proposed to delete the requirement of seeking ratification of appointment of the M/s S P Sarda & Co., Statutory Auditors at every AGM. The Board recommends the resolution at Item No 3 of this Notice for deleting the requirement of seeking ratification of appointment of Statutory Auditors at every AGM for your approval as an Ordinary Resolution.

ACKNOWLEDGEMENTS:

The Board is grateful to Canara Bank for their continued co-operation and timely assistance as and when required. The Board is grateful to the Reserve Bank of India, State Bank of India, HDFC Bank, Dr.U.N.Brahmacharl Street Branch, The Cotton Textiles Export Promotion Council, Textile Committee, Export Credit Guarantee Corporation of India Ltd, Collector of Central Excise, Director General of Foreign Trade, New Delhi, Joint Director General of Foreign Trade, Kolkata, Registrar of Companies, the Federation of Indian Export Organizations, The Commercial Tax Office, Kolkata and other institutions for their kind co-operation In day to day activities of the Company. Your Directors are thankful to all the executives and staff members of the Company for their wholehearted co-operation.

Registered Office : For and on behalf of the Company
86/2/4, S N Banerjee Road,
Kolkata - 700 014
SHEELA PATODIA
Dated : the 29th day of May, 2018 CHAIRPERSON & MANAGING DIRECTOR