The Directors are pleased to present the 42nd Directors Report on thebusiness and operations of the Company together with the Audited Accounts for thefinancial year ended 31st March 2022.
1. FINANCIAL PERFORMANCE
| ||2021-22 ||2020-21 |
|Particulars ||Rs./Lacs ||Rs./Lacs |
|Sales and other Income ||10340.70 ||6752.55 |
|Profit / (Loss) before exceptional items and tax ||3.47 ||(775.62) |
|Exceptional Items ||- ||388.26 |
|Profit / (Loss) before Taxes ||3.47 ||(387.36) |
|Payment/Provision for Taxation ||(1.69) ||(78.78) |
|Profit after Taxation ||5.16 ||(308.58) |
|Other Comprehensive Income ||(1.37) ||(25.33) |
|Total Comprehensive Income of the year ||3.79 ||(333.91) |
During the year under review the turnover of the company significantly increased by53.14% as compared to last year which was hit very badly due to outbreak of COVID-19pandemic. Even first six months of financial year 2021-22 were also badly impacted by 2ndwave of pandemic. In spite of the same the company's operations have significantlyimproved during 2nd half of financial year. As a result the company has beenable to register nominal PBT of Rs.3.47 Lacs as against loss of Rs. 775.62 Lacs sufferedduring last year. The improvement in operations have been possible due to significantsteps taken by the company towards procurement of new machines and changing product fix tooptimize margins. Barring unforeseen circumstances the company is hopeful that results offinancial year 2022-23 are expected to improve significantly.
II THE MANAGEMENT DISCUSSION & ANALYSIS
Spinning Unit Dharuhera
The operations were discontinued in September 2016 as cotton yarn operations becameunviable. Hence instead of manufacturing own cotton yarn the company had shifted to jobwork operations from October 2016 for a third party namely M/s Ganesh Ecospheres Ltd.Under this arrangement the said company has been supplying polyester fiber and Pasupatihas been manufacturing yarn for the said company for which the said company has beenmaking payment of Job Work Charges. However from 15th March 2022 the companyhas discontinued job work operations. Instead the company had started own manufacturingon Joint Venture Basis with another company but market conditions again deteriorated.Therefore the company has again shifted to job work operations from August 2022.
Knitting & Garment unit Dharuhera
The production activities of the Garment Division at Dharuhera were badly affected dueto COVID-19 pandemic as many garment units were not able to re-start operations afterlockdown. The export orders for readymade garments had totally dried up last year.Although the market opened during the year under consideration the company startedmanufacturing and supplying garment but due to Future Group takeover issue pending inCourt the customer did not lift the material already manufactured by the company and evenfurther orders also dried up. However from February/March 2022 the company has been ableto procure some export orders which is positive sign. Besides the company is makingefforts to procure order from other brands. The company is hopeful that the positionshould improve by end of June 2022 and this unit should be able to operate smoothly.
Sewing Thread Unit At Kala Amb Himachal Pradesh
The operations for this unit have improved significantly after 2nd wave ofpandemic due to various steps taken by management as stated above. However shortage oflabour continues to be cause of concern for the management. In order to improve capacityutilisation the company continues to outsource grey yarn from open market and alsogetting the fiber converted into grey yarn on job work basis from outside parties andsubsequently converting the same into value added product. Barring unforeseencircumstances the operations of this unit are expected to improve significantly duringfinancial year 2022-23.
III PARTICULARS OF INFORMATION FORMING PART OF THE BOARD'S REPORT PURSUANT TO SECTION134 OF THE COMPANIES ACT 2013 RULE 8 OF THE COMPANIES (ACCOUNTS RULE 2014 AND RULE 5 OFTHE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014.
The annual return of the company has been placed on the website of the company and canbe accessed at www.pasupatitextiles.com
NUMBER OF MEETING OF BOARD
During the year four (4) Board Meetings and four (4) Audit Committee Meetings wereconvened and held. The details are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013
DIRECTOR'S RESPONSIBILITY STATEMENT:
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
i) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
ii) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit or loss of the Company for the year under review.
iii) The directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
iv) The directors have prepared the annual accounts on a going concern basis.
v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
The directors had devised proper system to ensure compliance with the provisions of allapplicable laws and that such system were adequate and operating effectively
STATEMENT ON DECLARATION BY THE INDEPENDENT DIRECTORS.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and Listingregulations 2015.
NOMINATION & REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a Policy for selection appointment and remuneration of Directors and KeyManagerial Personnel. More details of the same are given in the Corporate GovernanceReport.
EXPLANATION OR COMMENTS ON AUDITORS REPORT AND SECRETARIAL AUDIT REPORT
Auditors' observations relating to Note no. 24 and 39 as contained in the Main Reportunder the para Basis of Qualified Opinion' are explained hereunder: -
Note 26: The company had repaid to all debenture holders as per scheme sanctioned byHon'ble BIFR but cheques to the tune of Rs.2.91 Lacs remained uncleared from company'sbank. The company preferred to wait for three months for getting the cheques cleared fromits bank causing some delay in transferring the unpaid amount to Investor Education andProtection Fund.
Note 41: Although the company has made representation to the competent authority forpayment of compensation at market rate in respect of part of company's factory landacquired by Government of Haryana the company feels that final decision in this regardmay take a very long time and moreover there is uncertainty about the success of company'srepresentation. Hence it has been decided that its affect would be given in company'sbooks as and when actual compensation is received from Government of Haryana.
There is no qualification reservations or adverse remarks made by secretarial auditorin the Secretarial Audit Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
During the year under review company has not given any loans Guarantee or made anyinvestments covered under the provisions of Section 186 of the Companies Act 2013.
RELATED PARTY TRANSACTIONS
Pursuant to Section 134 of the Companies Act 2013 read with Rule 8(2) of the Companies(Accounts) Rules 2014 the particulars of contracts or arrangements entered into by theCompany with Related Parties have been done at arm's length and are in the ordinary courseof business. Particulars of the same are being provided in Form AOC-2 which is annexedherewith as Annexure D.
STATE OF COMPANY'S AFFAIRS
Discussion on state of Company's affairs has been covered as part of the ManagementDiscussion and Analysis.
AMOUNTS PROPOSED TO BE CARRIED TO RESERVES
Board of Directors does not appropriate any amount to be transferred to GeneralReserves during the year under review.
In view of the requirement of fund for working capital of the company the Board ofDirectors is not in a position to recommend any dividend for the year under review.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANY
No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year of the Company and the date of signingof this Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies(Accounts) Rules 2014 is annexed herewith as AnnexureB.
RISK MANAGEMENT POLICY
Pursuant to the requirement of SEBI (LODR) Regulations 2015 the Company hasconstituted a Risk Management Committee. The details of the Committee and its terms ofreference are set out in the Corporate Governance Report forming part of the Board'sReport. On the recommendation of the Risk Management Committee the Board has adopted RiskManagement Policy which outlines the program implemented by the Company to ensureappropriate risk management within its system and culture. The Risk Management Policy isalso posted on the website of the Company. The Company's risk management program comprisesof a series of processes structures and guidelines which assist the Company to identifyassess monitor and manage its business risks including any material changes to its riskprofile. To achieve this the Company has clearly defined the responsibility and authorityof the Company's Board of Directors and of the Risk Management Committee to oversee andmanage the risk management program while conferring responsibility and authority on theCompany's senior management to develop and maintain the risk management program in lightof the day to day needs of the Company. Regular communication and review of riskmanagement practices provide the Company with important checks and balances to ensure theefficacy of its risk management program.
CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES
The relevant provisions of the Companies Act 2013 and Listing regulations are notapplicable to our company.
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of the SEBI(LODR) Regulations 2015 the Board has carried out an annual performance evaluation of itsown performance the directors individually as well as evaluation of the working of itsAudit Nomination & Remuneration and other Committees. The board's performance for thecurrent year was assessed on the basis of participation of directors quality ofinformation provided/available quality of discussion and contribution etc. The overallperformance of the Board and Committee's of the Board was found satisfactory. The overallperformance of Chairman Executive Directors and the Non-executive Directors of theCompany is satisfactory. The review of performance was based on the criteria ofperformance knowledge analysis quality of decision making etc.
CHANGE IN THE NATURE OF BUSINESS
During the year under review there has been no change in the nature of business of theCompany.
DETAILS OF APPOINTMENT AND RESIGNATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Vidit Jain retires by rotation and being eligible offers himself forre-appointment.
Directors appointed/resigned during the FY 2021-22
During the financial year under review no change took place in the directorship of theCompany except that Mr. C.M Sharma retired by rotation at the annual general meeting heldon 24/09/2021 and was re-appointed. However after the closure of financial year Mr. BanMali Khemka Indpendent Director resigned w.e.f 01/08/2022.
Key Managerial Personnel (KMP) appointed and resigned during the F.Y 2021-22
During the financial year no changes took place in Key Managerial Personnel.
NAMES OF THE COMPANIES WHICH HAVE BECOME/ CEASED TO BE SUBSIDIARIES JOINT VENTURES ORASSOCIATE COMPANIES DURING THE YEAR
The Company did not have any subsidiaries associates or joint ventures during theyear.
The Company has not accepted deposits under Chapter V of the Companies Act 2013.
SIGNIFICANT ORDERS PASSED BY REGULATORS COURTS OR TRIBUNALS IMPACTING GOING CONCERNAND COMPANY'S OPERATIONS
To the best of our knowledge the Company has not received any such orders fromRegulators Courts or Tribunals during the year which may impact the going concern statusor the Company's operations in future.
INTERNAL CONTROL SYSTEMS
Your Company has evolved a system of internal controls to ensure that the assets aresafeguarded and transactions are authorised recorded and correctly reported. The internalcontrol system is supplemented by management reviews and independent periodical reviewswhich evaluate the functioning and quality of internal controls and provides assurance ofits adequacy and effectiveness. The scope of internal audit covers a wide variety ofoperational methods and as a minimum ensures compliance with specified standards withregard to availability and suitability of policies and procedures extent of adherencereliability of management information system and authorization procedures including stepsfor safeguarding of assets. The reports of internal audit are placed before AuditCommittee of the Directors and Board. Audit Committee and board reviews such auditfindings and the adequacy of internal control systems. The Statutory Auditors and theInternal Auditors of the Company also interact with the Audit Committee and Board to sharetheir findings and the status of corrective actions under implementation.
INFORMATION FORMING PART OF THE DIRECTORS' REPORT PURSUANT TO RULE 5 OF THE COMPANIES(APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014
The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 requiring particulars of the employees in receipt ofremuneration in excess of Rs. 1 Crore and 2 Lacs per year to be disclosed in the Report ofBoard of Directors are not applicable to the Company as none of the employees was inreceipt of remuneration in excess of Rupees One Crore and two Lacs during the financialyear 2021-22. The information in accordance with the provisions of Section 197 of theCompanies Act 2013 read with rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed as Annexure-C
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Board of Directors has adopted the Vigil Mechanism / Whistle Blower Policy. Thepolicy has provided a mechanism for Directors Employees and other persons dealing withthe Company to report to the Chairman of the Audit Committee any instance of unethicalbehavior actual or suspected fraud or violation of the Code of Conduct of the Company.The details of the policy has been uploaded at the website of the Company @www.pasupatitextiles.com
COMPOSITION OF AUDIT COMMITTEE
The composition of the Audit Committee has been mentioned in the Corporate GovernanceReport annexed to this report.
During the year under review it is proposed to re-appoint M/s. B K Shroff & Co.Chartered Accountants as Statutory Auditors to hold office as such from the conclusion ofthe ensuing Annual General Meeting until the conclusion of the Forty Seventh AnnualGeneral Meeting.
The Central Govt. has approved the appointment of Mr. Satnam Singh Saggu CostAccountants as cost auditors for conducting Cost Audit for the Financial Year 2022-23. Thereport of Cost Auditors in respect of audit of the cost records of the Company for theyear ended 31stMarch 2022 will be submitted to the Central Government in duecourse.
The Company has undertaken Secretarial Audit for the financial year 2021-22 whichinter alia includes audit of compliance with the Companies Act 2013 and the Rules madeunder the Act Listing Regulations and applicable Regulations prescribed by the Securitiesand Exchange Board of India and Foreign Exchange Management Act 1999 and SecretarialStandards issued by the Institute of the Company Secretaries of India. The SecretarialAudit Report forms part of this Annual Report. The Report of the Secretarial Audit assubmitted by Renu Kathuria & Associates is annexed herewith as Annexure-A.
ANNUAL SECRETARIAL COMPLIANCE REPORT
The Company has undertaken an audit for the Financial Year 2021-22 for all applicablecompliances as per Securities and Exchange Board of India Regulations andCirculars/Guidelines issued thereunder. The Annual Secretarial Compliance Report dulysigned by Renu Kathuria & Associates Practicing Company Secretaries has beensubmitted to the Stock Exchange.
The Company conforms to the norms of Corporate Governance as envisaged in the ListingRegulations with the BSE Limited. Pursuant to Regulation 34(3) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a Report on the CorporateGovernance and the Auditors Certificate on Corporate Governance are annexed to thisreport.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
In order to prevent sexual harassment of women at work place a new act The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 hasbeen notified on 9thDecember 2013. Under the said Act every company isrequired to set up an Internal Complaints Committee to look into complaints relating tosexual harassment at work place of any women employee.
Company has adopted a policy for prevention of Sexual Harassment of Women at workplaceand has set up Committee for implementation of said policy. During the year Company hasnot received any complaint of harassment.
The Board of Directors acknowledge with gratitude the co-operation and assistanceextended by all its stakeholders including its shareholders employees/workers bankerscustomers business associates and employees. The company also conveys special thanks toCentral & State Government and its Bankers who have helped the company to overcomethe crisis due to pandemic to a great extent by sanctioning additional credit facilities.