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Pasupati Spinning & Weaving Mills Ltd.

BSE: 503092 Sector: Industrials
NSE: PASUPATSPG ISIN Code: INE909B01020
BSE 00:00 | 27 Jan 25.70 -0.30
(-1.15%)
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NSE 05:30 | 01 Jan Pasupati Spinning & Weaving Mills Ltd
OPEN 26.00
PREVIOUS CLOSE 26.00
VOLUME 566
52-Week high 30.90
52-Week low 4.82
P/E
Mkt Cap.(Rs cr) 24
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 26.00
CLOSE 26.00
VOLUME 566
52-Week high 30.90
52-Week low 4.82
P/E
Mkt Cap.(Rs cr) 24
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Pasupati Spinning & Weaving Mills Ltd. (PASUPATSPG) - Director Report

Company director report

The Directors are pleased to present the 41st Directors Report on thebusiness and operations of the Company together with the Audited Accounts for thefinancial year ended 31st March 2021.

1. FINANCIAL PERFORMANCE

2020-21 2019-20
Particulars Rs./Lacs Rs./Lacs
Sales and other Income 6752.55 11237.82
Profit / (Loss) before exceptional items and tax (775.62) 10.54
Exceptional Items 388.26 -
Profit / (Loss) before Taxes (387.36) 10.54
Payment/Provision for Taxation (78.78) 5.61
Profit after Taxation but before extra-ordinary items (308.58) 4.93
Other Comprehensive Income (25.33) 0.82
Total Comprehensive Income of the year (333.91) 5.75

During the year under review the turnover of the company significantly declined by39.91% as compared to last year whereas the company suffered a loss of Rs.775.62 Lacs asagainst profit of Rs. 10.54 Lacs of last year. The main reason for decline in turnover andloss is directly attributable to impact of COVID-19 pandemic. We all are aware of thatpursuant to outbreak of corona virus disease (COVID-19) worldwide and its declaration asglobal pandemic the Government of India declared lockdown in March 2020 which led thetemporary suspension of operations of the Company and has impacted the overall businessactivities of the Company. COVID-19 has impacted the normal business operations of theCompany by way of interruption in production supply chain disruption unavailability ofpersonnel closure/lock down of production facilities and closure of the operations of ourcustomers and poor demand of our products from the customers during the lock-down period.This resulted most adverse impact on company's operations. Company's Sewing Thread unit islabour oriented unit and is largely dependent on labours from Eastern UP and Bihar.Although the company has arrangement of servant quarters inside the plant yet thecompany has always been facing labour shortage in the past. After pandemic the entirelabour force migrated to their home towns and when lock down was partially lifted and thecompany also planned to re-start its operations it faced major hurdle of arranging labourforce.

However the situation gradually started improving from 2nd half of thefinancial year and the company was able to achieve upto 50%-60% capacity utilisation butdue to outbreak of 2nd wave of pandemic the company suffered another setback.The situation is now gradually improving and barring unforeseen circumstances the companyexpects to achieve normal operations by end of 2nd quarter of current financialyear.

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 is supplying polyester fiber and Pasupati ismanufacturing yarn for the said company for which the said company is making payment ofJob Work Charges. In this unit the company has also started manufacturing own yarn fromcurrent year which is expected to contribute to top line of the company.

Knitting & Garment unit Dharuhera

The production activities of the Fabric/Garment Division at Dharuhera have been badlyaffected due to COVID-19 pandemic as many garment units have not been able to re-startoperations after lockdown. The export orders for readymade garments have totally dried upand at present the company in concentrating only on domestic operations which areexpected to pick up in next few months provided the operations are not affected by 3ndwave of pandemic. The company is supplying garments for well known brands i.e. FutureGroup Reliance Trend Pantloon Retail Spencer and Bharti Wallmart Myntra etc.

Sewing Thread Unit At Kala Amb Himachal Pradesh

The operations for this unit were gradually improving after 1st wave ofpandemic but there been set back after emergence of 2nd wave of pandemic. The companycontinues to face labour shortage in this unit. In order to improve capacity utilisationthe company is outsourcing grey yarn from open market and also getting the fiber convertedinto grey yarn on job work basis from outside parties and subsequently converting the sameinto value added product. Barring unforeseen circumstances the company is hopeful ofachieving normal operations by end of 2nd quarter of current financial year.

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.

ANNUAL RETURN

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 five (5) Board Meetings and five (5) 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 24: Pursuant to the directions of Hon'ble BIFR vide its order dated 17.02.2012the company had issued cheques towards full and final payment to all debenture-holders.However some cheques were not presented by debenture-holders for encashment. At the endof financial year 2020-21 the amount of such uncleared cheques was Rs. 2.91 Lacs. Sincethe said amount is outstanding for a period more than 7 years the company was required totransfer the outstanding amount to Investor Education and Protection Fund as providedunder Section 125 of the Companies Act 2013. The company has since transferred the saidamount to the said Fund on 22/07/2021.

Note 39: 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.

DIVIDEND

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 Companyexcept the impact of COVID-19 pandemic (already explained in this report) have occurredbetween the end of the financial year of the Company and the date of signing of thisReport.

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 Annexure"B".

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.

BOARD EVALUATION

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 the evaluation of the working ofits Audit Nomination & Remuneration and other Committees. The board's performance forthe current year was assessed on the basis of participation of directors quality ofinformation provided/available quality of discussion and contribution etc. A structuredquestionnaire was prepared after taking into consideration inputs received from theDirectors covering the aforesaid aspects of the Board's functioning. 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. Chander Mohan Sharma retires by rotation and being eligible offers himself forre-appointment.

Directors appointed/resigned during the FY 2020-21

Mr. Vidit Jain was re-appointed as Whole Time Director liable to retire by rotationwith effect from 01/04/2020 and Mr. Ramesh Kumar Jain was re-appointed as Chairman andManaging Director with effect from 01/04/2020.

Key Managerial Personnel (KMP) appointed and resigned during the F.Y 2020-21

During the financial year Mr. Abhinav Tyagi Company Secretary and Compliance Officer(Resigned w.e.f 26.10.2020). Further Mrs. Deepika Malhotra has been appointed as CompanySecretary cum Compliance Officer w.e.f. 5th December 2020.

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.

DEPOSITS

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.

M/s. M.C. Jain & Co. Chartered Accountants New Delhi were appointed as InternalAuditors of the Company for the Financial Year 2020-21.

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.60 lacs per year to be disclosed in the Report of Board ofDirectors are not applicable to the Company as none of the employees was in receipt ofremuneration in excess of Rs.60 lacs during the financial year 2020-21. The information inaccordance with the provisions of Section 197 of the Companies Act 2013 read with rule 5of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isannexed 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.

AUDITORS

STATUTORY AUDITORS

During the year under review the auditors need no rotation as they can continue asstatutory auditors up to the F.Y 2021-2022. M/s. Suresh Kumar Mittal & Co. CharteredAccountants who are the statutory auditors of the Company hold office till theconclusion of the forthcoming AGM and are eligible for re-appointment. Pursuant to theprovisions of Section 139 of the Companies Act 2013 and the Rules framed thereunder itis proposed to appoint M/s. Suresh Kumar Mittal & Co. as statutory auditors of theCompany from the conclusion of the forthcoming AGM till the conclusion of the 42th AGM tobe held in the year 2022.

COST AUDITORS

The Central Govt. has approved the appointment of M/s Avtar Singh & Co. as costauditors for conducting Cost Audit for the Financial Year 2020-21. The report of CostAuditors in respect of audit of the cost records of the Company for the year ended 31stMarch2021 will be submitted to the Central Government in due course.

SECRETARIAL AUDITORS

The Company has undertaken Secretarial Audit for the financial year 2020-21 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 Anand Sharma& associates is annexed herewith as Annexure-A.

ANNUAL SECRETARIAL COMPLIANCE REPORT

The Company has undertaken an audit for the Financial Year 2020-21 for all applicablecompliances as per Securities and Exchange Board of India Regulations andCirculars/Guidelines issued thereunder. The Annual Secretarial Compliance Report dulysigned by Anand Sharma & Associates Practicing Company Secretaries has been submittedto the Stock Exchange.

CORPORATE GOVERNANCE

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.

APPRECIATION

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.

For & On Behalf of Board of Directors
Place : New Delhi Ramesh Kumar Jain
Dated : 14/08/2021 Chairman & Managing Director

.