Amit Spinning Industries Ltd.
|BSE: 521076||Sector: Industrials|
|NSE: ASIL||ISIN Code: INE988A01026|
|BSE 00:00 | 04 Mar||Amit Spinning Industries Ltd|
|NSE 05:30 | 01 Jan||Amit Spinning Industries Ltd|
Amit Spinning Industries Ltd. (ASIL) - Director Report
Company director report
Your Directors have great pleasure in presenting the 30thAnnual Reporttogether with Audited Statements of Accounts of the Company for the year ended March 312022.
FINANCIAL SUMMARY AND HIGHLIGHTS:
The summarized financial results for the year ended March 2022 ascompared to the previous year are as follows:
(Rs. in Lakhs)
REVIEW OF OPERATIONS
After obtaining physical possession of the factory the Managementcarried out repairs and maintenance activities and started trial production in May 2019.
Further the Company has started its Commercial Production from October2019. During the year under review the turnover of the Company was Rs. 11546.05 asagainst Rs. 4666.80 Lakhs in previous year. Company has earned Profit of Rs. 1203.71 Lakhsas against Rs. 187.24 Lakhs in previous year. Further Management is actively involved intrying to utilize the idle capacities available with the Company and reduction of rawmaterial cost.
AMOUNT IF ANY WHICH THE BOARD PROPOSES TO CARRY TO ANY RESERVES
No amount is proposed to be transferred to any reserve.
The Board of Directors of your company after considering holisticallythe relevant circumstances and keeping in view the company's dividend distribution policyhas decided that it would be prudent not to recommend any Dividend for the year underreview.
MAJOR EVENTS OCCURRED DURING THE YEAR
(i) SEGMENT-WISE POSITION OF BUSINESS AND ITS OPERATIONS
The Company operates in one segment only i.e. Textile
(ii) CHANGE IN STATUS OF THE COMPANY There has not been change instatus of the company.
(iii) KEY BUSINESS DEVELOPMENTS;
Company has outperformed during the year 2021-22. With the easing ofCovid restrictions across the country consumer confidence increased thereby company'ssales has been increased by 147% which has resulted into improvement in all financialsratio.
However now the present position of the industry is very fragile. Theentire spinning and weaving industry are going through an unprecedented inflation in thebase raw material prices. Just to give an example of the same the cotton prices havesoured by more than 350-400% since the time when the factory restarted post covidlockdown.
Converting the above data point in per kg terms it can be seen thatthe cotton prices have increased from around 95-100 Rs. Per kg to around 325-350 Rs. Perkg. Further the quality of cotton which is procured by us is seeing extreme shortagewhich has further escalated the sourcing issue. The quality of cotton has alsodeteriorated over a period of time.
The government has allowed import of cotton without any duties (earlierduty of 11% was being levied) which is expected to bring certain relief in the industry.
(iv) CHANGE IN THE FINANCIAL YEAR
There is no change in financial year
(v) CAPITAL EXPENDITURE PROGRAMMES
At present Company do not expect to invest or incur big capitalexpenditures
(vi) DETAILS AND STATUS OF ACQUISITION MERGER EXPANSION - NIL
(vii) MODERNIZATION AND DIVERSIFICATION
Management has carried out huge repairs and maintenance postacquisition. Meager modernisation activities has been carried out. No. Diversification hasbeen done by the company in 2021-22
CHANGE IN THE NATURE OF BUSINESS
There has been no change in nature of business.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY HAVING OCCURRED SINCE THE END OF THE YEAR AND TILL THE DATE OFTHE REPORT
There have been no material changes and commitments which affect thefinancial position of the company which have occurred during the year and between the endof the financial year to which the financial statements relate and the date of thisReport.
The entire spinning and weaving industry are going through anunprecedented inflation in the base raw material prices. Just to give an example of thesame the cotton prices have soured by more than 350-400% since the time when the factoryrestarted post covid lockdown
i) OVERVIEW OF THE INDUSTRY AND IMPORTANT CHANGES IN THE INDUSTRYDURING THE LAST YEAR;
Company has outperformed during the year 2021-22. With the easing ofCovid restrictions across the country consumer confidence increased thereby company'ssales has been increased by 147% which has resulted into improvement in all financialsratio. However now the present position of the industry is very fragile.
II) EXTERNAL ENVIRONMENT AND ECONOMIC OUTLOOK
Increase in raw material prices and Shortage of raw material have leftus helpless and we regret to inform that it would be difficult to supply the cotton forjob work from 01st of June 2022. The required quality of cotton as is normally procured byus is not available and the next best quality of cotton may not be suitable for the oldmachines in our company impacting the quality of yarn produced by our spinning unit.However we are hopeful that once other cotton mills are closed the demand for the cottonshall reduce and we could procure the said cotton to restart the spinning mill at theearliest. We are also exploring the option of bringing imported cotton to continueoperations.
The Company's Authorized Share Capital as on 31st March 2022 stands atRs. 250000000/- and issued & paid up capital as on 31st March 2022 stands at Rs.20584835/- divided into 4116967 fully paid up equity shares of Rs. 5/- each. Duringthe year under review the Company has not issued any share(s). Further the Company hasnot issued any share with differential Voting Rights/Sweat Equity shares/under StockOption Scheme (ESOS) earlier and during the year.
NCLT by its order dt. 31-07-2018 approved Reduction of Face Value ofShares to Re. 0.50 per Share from Re. 5 Per Share and further consolidation of face valueof shares to Re. 5 per share. Post consolidation paid up equity shares will reduce from41169667 shares of Rs. 5/- each to 4116967 equity shares of Rs. 5/- each. It alsoinvolves extinguishment of shares of previous Promoters and top 10 shareholders. Howevercompliance / corporate actions of the same with CDSL NSDL ROC and Stock Exchanges werepending at the end of the March 2022. Company's application with BSE and NSE is pendingfor approval. Company expects it to get its approval in near future
The Company has no scheme of provision of money for purchase of its ownshares by employees or by trustees for the benefit of employees. Hence the details underrule 16 (4) of Companies (Share Capital and Debentures) Rules 2014 are not required to bedisclosed
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
During the year under review company was not required to transfer anyamount as well as any shares to the Investor Education and Protection Fund (IEPF)
LOANS GUARANTEE & INVESTMENTS:
The Company has not advanced any loans or provided guarantees or madeinvestments during the year under review covered under section 186 of the Companies Act2013.
The Company has not accepted any deposit from the public falling withinthe ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014 or under Chapter V of the Act.
LISTING OF SHARES
Presently Company's shares are listed and traded at the BSE LimitedMumbai (BSE) and National Stock Exchange of India Mumbai (NSE). The Listing fees for theyear2021-22 has not been paid due to pending reconciliation of accounts with concernedstock exchanges
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review Mr. Deepak Choudhari (DIN - 03175105) andMr. Jitendrakumar Chopra (DIN - 08196887) were reappointed as Managing Director of thecompany w.e.f. 13/08/2021 for the further period of 3 years.
Further Mr. Vijay Vishnu Dudharkar (DIN: 08863530) Independent Directorof the Company has vide his resignation letter dated 20-07-2022 resigned from the Boardof the Company with immediate effect on account of personal reason and other professionalcommitments. We further confirm that there is no other material reason for his resignationother than those provided above
RELATED PARTY TRANSACTIONS:
The particulars of every contract or arrangements entered into by theCompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arm's length transactions under third provisothereto are disclosed in Form No.AOC-2 as Annexure 1.
DECLARATION OF INDEPENDENT DIRECTORS
The Independent Directors have given declarations that they meet thecriteria of Independence and have complied with the Code for Independent Directorsprescribed in Schedule IV to the Act as laid down under Section 149(6) of the Act andRegulation 16(1)(b) of the Listing Regulations. Further they also had confirm that theyare not aware of any circumstance or situation which exist or may be reasonablyanticipated that could impair or impact their ability to discharge their duties with anobjective independent judgment and without any external influence and that they areindependent of the management.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:
The Board has on the recommendation of the Nomination &Remuneration Committee framed policy for selection and appointment of Directors SeniorManagement and their remuneration in pursuant to Section 178 of Companies act 2013 andRegulation 19 SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Theremuneration given is as per the remuneration policy framed.
Criteria for Determining the Qualifications for appointment ofDirectors (including Independent Directors)
i. Persons of eminence standing and knowledge with significantachievements in business professions and/or public service;
ii. Their technical financial HR Legal or business literacy/skillsi.e. knowledge about textile business;
iii. Their administrative experience;
iv. Other appropriate qualification/experience to meet the objectivesof the Company;
v. As per the applicable provisions of Companies Act 2013 Rules madethereunder and as per provisions of SEBI( LODR) Regulations.2015 .
The Nomination and Remuneration Committee shall have discretion toconsider and fix any other criteria or norms for selection of the most suitablecandidate/s.
Positive attributes of Directors (including Independent Directors):
a. Directors are to demonstrate integrity credibilitytrustworthiness ability to handle conflict constructively and the willingness to addressissues proactively;
b. Actively update their knowledge and skills with the latestdevelopments in the infrastructure industry market conditions and applicable legalprovisions;
c. Willingness to devote sufficient time and attention to the Company'sbusiness and discharge their responsibilities.
d. To assist in bringing independent judgment to bear on the Board'sdeliberations especially on issues of strategy performance risk management resourceskey appointments and standards of conduct;
e. Ability to develop a good working relationship with other Boardmembers and contribute to the Board's working relationship with the senior management ofthe Company;
f. To act within their authority assist in protecting the legitimateinterests of the Company its shareholders and employees;
g. Independent Directors to meet the requirements of the Companies Act2013 read with the Rules made there under and as per provisions of SEBI( LODR) Regulations2015 as amended from time to time.
Independence Review Procedures
- Annual Review
The director's independence for the independent director will bedetermined by the Board on an annual basis upon the declaration made by such Director asper the provisions of the Companies Act 2013 read with Rules thereon and as perprovisions of SEBI( LODR) Regulations.2015
- Individual Director's Independence Determinations
If a director nominee is considered for appointment to the Boardbetween Annual General Meetings a determination of independence upon the recommendationof the Committee shall be made by the Board prior to such appointment.
All determinations of independence shall be made on a case-by-casebasis for each director after consideration of all the relevant facts and circumstancesand the standards set forth herein. The Board reserves the right to determine that anydirector is not independent even if he or she satisfies the criteria set forth by theprovisions of the Companies Act 2013 read with Rules thereon and as per provisions ofSEBI( LODR) Regulations.2015
- Notice of Change of Independent Status
Each director has an affirmative obligation to inform the Board of anychange in circumstances that may put his or her independence at issue.
a. Criteria for appointment of KMP/Senior Management -
i. To possess the required qualifications experience skills &expertise to effectively discharge their duties and responsibilities;
ii. To practice and encourage professionalism and transparent workingenvironment;
iii. To build teams and carry the team members along for achieving thegoals/objectives and corporate mission;
iv. To adhere strictly to code of conduct
b. Term -
The Term of the Directors including Managing / Whole time Director /Independent Director shall be governed as per the provisions of the Act and Rules madethereunder and the Listing Regulations as amended from time to time. Whereas the term ofthe KMP (other than the Managing / Whole time Director) and Senior Management shall begoverned by the prevailing HR policies of the Company.
c. Evaluation -
The Committee shall carry out evaluation of performance of everyDirector. The Committee shall identify evaluation criteria which will evaluate Directorsbased on knowledge to perform the role time and level of participation performance ofduties level of oversight professional conduct and independence. The appointment /re-appointment /continuation of Directors on the Board shall be subject to the outcome ofthe yearly evaluation process.
d. Removal -
Due to reasons for any disqualification mentioned in the Act or underany other applicable Act Rules and Regulations thereunder and /or for any disciplinaryreasons and subject to such applicable Acts Rules and Regulations and the Company'sprevailing HR policies the Committee may recommend to the Board with reasons recorded inwriting removal of a Director KMP or Senior Management.
e. Remuneration of Managing / Whole-time Director KMP and SeniorManagement
The remuneration / compensation / commission etc. as the case may beto the Managing / Wholetime Director will be governed by the relevant provisions of theCompanies Act 2013 and applicable Rules and Regulations and will be determined by theCommittee and recommended to the Board for approval. The remuneration / compensation /commission etc. as the case may be shall be subject to the prior / post approval of theshareholders of the Company and Central Government wherever required. Further theChairman & Managing Director of the Company is authorized to decide the remunerationof KMP (other than Managing / Wholetime Director) and
Senior Management based on the standard market practice and prevailingHR policies of the Company.
f. Remuneration to Non-executive Directors (Including independentDirector)
The remuneration / compensation / commission etc. as the case may beto the Managing / Wholetime Director will be governed by the relevant provisions of theCompanies Act 2013 and applicable Rules and Regulations and will be determined by theCommittee and recommended to the Board for approval.
PERFORMANCE EVALUATION OF THE BOARD:
Pursuant to the provisions of the Act and Listing Regulations theBoard has carried out an annual evaluation of its own performance also performance of theDirectors individually as well as the evaluation of the working of its Committees.
The Nomination and Remuneration Committee has defined the evaluationcriteria procedure and time schedule for the Performance Evaluation process for theBoard its Committees and individual Directors including the Chairman of the Company.
For evaluating the Board as a whole views were sought from theDirectors on various aspects of the Board's functioning such as degree of fulfillment ofkey responsibilities Board Structure and composition establishment delineation ofresponsibilities to various committees effectiveness of Board processes information andfunctioning Board culture and dynamics quality of relationship between the Board and themanagement.
Similarly views from the Directors were also sought on performance ofindividual Directors covering various aspects such as attendance and contribution at theBoard/Committee Meetings and guidance/support to the management outside Board/CommitteeMeetings. In addition the Chairman was also evaluated on key aspects of his roleincluding setting the strategic agenda of the Board encouraging active engagement by allBoard members and promoting effective relationships and open communication communicatingeffectively with all stakeholders and motivating and providing guidance to the ExecutiveDirector.
Areas on which the Committees of the Board were assessed includeddegree of fulfillment of key responsibilities adequacy of Committee compositioneffectiveness of meetings Committee dynamics and quality of relationship of the Committeewith the Board and the Management.
The performance evaluation of the Independent Directors was carried outby the entire Board. The performance evaluation of the Chairman and the Non IndependentDirectors was carried out by the Independent Directors who also reviewed the performanceof the Board as a whole. The Nomination & Remuneration Committee also reviewed theperformance of the Board its Committees and of individual Directors.
The Chairman of the Board provided feedback to the Directors asappropriate. Significant highlights learning with respect to the evaluation werediscussed at the Board Meeting.
A MATRIX SETTING OUT THE SKILLS / EXPERTISE / COMPETENCE OF THE BOARDOF DIRECTORS IS AS UNDER
Number of Meetings of the Board
During the year under review board meetings were held 29-06-202109-08-2021 13-08-2021 0409-2021 29-10-2021 13-11-2021 10-02-2022 and 24-02-2022.Eight meetings of the Board were held during the year. The detailed information regardingmeetings of the Board held during the year is mentioned in the Corporate Governance Reportwhich forms part to this report.
EXTRACT OF ANNUAL RETURN:
In accordance with Section 134(3)(a) and as provided under sub-section(3) of Section 92 of the Companies Act 2013 an extract of the annual return in prescribedform MGT - 9 has been posted on the website of the company i.e. www.girnarspintex.com.
MANAGEMENT DISCUSSION AND ANALYSIS:
Management Discussion and Analysis Report is attached to the DirectorsReport as Annexure 2.
Corporate Governance report is provided separately in this annualreport.
AUDITORS AND AUDITORS REPORT
(a) Statutory Auditor & Audit Report
In accordance with the provisions of Section 139 of the Companies Act2013 at the Annual General Meeting held on September 27 2018 M/s Sanjay Vhanbatte wereappointed as Statutory Auditors of the Company for the period of 5 years commencing fromthe conclusion of 26th Annual General Meeting till the conclusion of 31st Annual GeneralMeeting.
The requirement to place the matter relating to appointment of Auditorsfor ratification by members at every Annual General Meeting was omitted vide notificationdated May 07 2018 issued by Ministry of Corporate Affairs. Accordingly no resolution isproposed for ratification of appointment of Auditors in the ensuing AGM of the Company.
Statutory Auditors i.e M/s Sanjay Vhanbatte have submitted Auditors'Report on the accounts of the Company for the period ended 31st March 2022.
(b) Cost Auditor:
In accordance with the provisions of Section 148(1) of the Act readwith the Companies (Cost Records and Audit) Rules 2014 the Company has maintained costrecords and its audit has been done by Mr. Nilesh Chalke Cost Acccountants Nipani
(c) Secretarial Auditor & Audit Report:
Pursuant to provisions of Section 204 of the Companies Act 2013 theCompany has appointed M/s. PPS and Associates Practicing Company Secretaries asSecretarial Auditor to carry out the secretarial audit for the financial year 2021-22.
The Secretarial Audit Report for the financial year ended March 312022 is annexed herewith marked as Annexure 3 to this Report.
Detailed reply to the remarks observation by Statutory Auditor andSecretarial Auditors are given in as below
i) Reply to remarks observation by Statutory Auditor -
ii) Reply to remarks observation by Secretarial Auditor -
(d) Internal Audit
Pursuant to provisions section 138 of Companies act 2013 read withCompanies (Accounts) Rules 2014 the board on recommendation of Audit Committee appointedThigale Utturkar and Associates Chartered Accountants as the Internal Auditor of theCompany. The Management regularly reviews the findings of the Internal Auditor and takeseffective steps to implement suggestions of the Internal Auditor.
CORPORATE SOCIAL RESPONSIBILITY STATEMENT (CSR):
This is the first where company has earned profit of more than Rs.500.00 Lakhs the provisions of Corporate Social Responsibility has become applicable.Company has formed CSR committee which comprises of
The Corporate Social Responsibility (CSR) Committee was constituted asper Section 134 of Companies Act 2013.
The purpose of the committee is formulate and recommend to the Board aCorporate Social Responsibility Policy which shall indicate the activities to beundertaken by the company as specified in Schedule VII and recommend the amount ofexpenditure to be incurred on these activities and to monitor the Corporate SocialResponsibility Policy of the company from time to time. The policy framed by CSR Committeehas been Approved and adopted by the Board of Directors.
As the committee was formed on August 13 2022 no meetings were heldduring the year 2021-22. The CSR Committee comprised of following directors -
Mr. Pruthveesh Ravi Shetti Independent Director
Mr. Siddhant Sunil Patil Independent Director
Mr. Deepak Chaganlal Choudhari Managing Director of the Company
The details as required under Rule 8 of Companies (Corporate SocialResponsibility) Rules 2014 are given as Annexure 4.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(3) (c) of the Companies Act2013 with respect to Directors' Responsibility Statement it is hereby confirmed that:
(a) in the preparation of the annual accounts for the financial yearended 31st March 2022 the applicable accounting standards had been followed along withproper explanation relating to material departures;
(b) the directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the company as at March 31 2022and of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the company and for preventing anddetecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concernbasis; and
(e) the directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively.
(f) the directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
INTERNAL FINANCIAL CONTROL
The Board of Directors has laid down Internal Financial Controls withinthe meaning of the explanation to Section 134(5) (e) of the Companies Act 2013. TheCompany has an internal financial control system commensurate with the size and scale ofits operations and the same has been operating effectively.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO:
The information as required under Section 134(3)(m) of The CompaniesAct 2013 read with Rule 8(3) of The Companies (Accounts) Rules 2014 with respect toconservation of energy technology absorption and foreign exchange earnings and outgo isgiven below:
A. Conservation of energy:
The Company has been taking various steps and measures to improveefficiency in use of energy and optimize conservation of the energy by increasing theefficiency of raw material inputs in power generation and by reducing/eliminating wastagesand reducing consumption of power and fuel.
LED tubes fitted to save the energy and also proper power banksintroduced whenever necessary. In spite Conservation of energy and improving theefficiency of existing resources is continuing processes and form an integral part ofresponsibilities of departmental heads of the Company.
B. Technology absorption:
During the year under review the Company had purchased various newmachineries. The Company has also replaced spares parts of old machineries to make itfunctional. The resulted and helped company to start commercial production of yarn.
C. Foreign exchange earnings and Outgo:
The Company has framed and implemented a vigil mechanism named asWhistle Blower Policy to deal with instances of fraud and mismanagement if any. Thedetails of the Whistle Blower Policy are provided in the Corporate Governance Report andalso hosted on the website of the Company. No frauds reported by auditors undersub-section (12) of section 143
During the year under review the Company has an Internal ComplaintCommittee as required under Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and there were no compliant received during theyear. Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013
PERFORMANCE OF EMPLOYEES:
1) The information required under Section 197 of the Act read with rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014are given below:
1. Since the Directors didn't take any salary in current year %increase in remuneration is not applicable
2) Details of the top ten employees of the Company in terms ofremuneration drawn as required pursuant to 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules2014 :
Nobody holds any shares and none of the above is relative of anydirector or manager of the company
DETAILS OF SUBSIDIARY / JOINT VENTURES / ASSOCIATE COMPANIES:
The Company does not have Subsidiary/Joint Ventures/AssociateCompanies.
The Board of the Company has formed a Risk Management Committee inaccordance with the provisions of the Act and Regulation 17(9) of the Listing Regulations.The Committee is responsible for reviewing the risk management plan and ensuring itseffectiveness. The audit committee has additional oversight in the area of financial risksand controls. Policy to manage risk is also placed on the website of the Company. Duringthe year risk analysis and assessment was conducted and the details of the same arecovered in the Management Discussion and Analysis Report of the Company.
Pursuant to Regulation 25 of the SEBI (Listing Obligation andDisclosure Requirement) Regulations 2015 the Company has formulated a programme forfamiliarizing the Independent Directors with the Company their roles rightsresponsibilities in the Company nature of the industry in which the Company operatesbusiness model of the Company etc. through various initiatives. Details of theFamiliarization Programme of the Independent Directors are available on the website of theCompany.
COMPLIANCE WITH SECRETARIAL STANDARDS
During the year under review your Company has complied with all theapplicable secretarial standards. The same has also been confirmed by Secretarial Auditorsof the Company.
DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT / UNCLAIMED SUSPENSEACCOUNT
The Company does not have any equity shares lying in the demat suspenseaccount/unclaimed suspense account of the Company as on 31 March 2022. Hence disclosuresrequired under Part F of Schedule V of the Listing Regulations is not applicable
DETAILSOF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTSOR TRIBUNALS IMPACTING GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
No significant orders were passed by any court.
Your Directors place on record their sincere thanks to bankersfinancial institutions business associates consultants customers suppliers contractorsand various Government Authorities for their continued support extended to your Companiesactivities during the year under review. Your Directors also acknowledge gratefully theshareholders for their support and confidence reposed on the Company.