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Patspin India Ltd.

BSE: 514326 Sector: Industrials
NSE: PATSPINLTD ISIN Code: INE790C01014
BSE 00:00 | 17 Jul 11.96 -0.84
(-6.56%)
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12.79

HIGH

12.79

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11.85

NSE 00:00 | 17 Jul 12.15 -0.10
(-0.82%)
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13.00

HIGH

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12.00

OPEN 12.79
PREVIOUS CLOSE 12.80
VOLUME 565
52-Week high 43.95
52-Week low 11.80
P/E
Mkt Cap.(Rs cr) 37
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 12.79
CLOSE 12.80
VOLUME 565
52-Week high 43.95
52-Week low 11.80
P/E
Mkt Cap.(Rs cr) 37
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Patspin India Ltd. (PATSPINLTD) - Director Report

Company director report

DIRECTORS' REPORT

To the Members

Your Directors present the TWENTY SIXTH Annual Report together with the AuditedStatement of Accounts for the year ended 31st March 2017.

1. FINANCIAL RESULTS

( Rs. in lacs)

Particulars Year ended
31.3.2017 31.3.2016
REVENUE
Income from operations 53154 49630
Other income 98 123
Changes in Inventories 397 478
Total 53649 50231
EXPENSES
a) Cost of materials 32874 30130
b) Employee benefits expense 3385 3136
c) Other expenses 11904 12012
Total 48163 45278
OPERATING PROFIT 5486 4953
Finance Costs 3476 3677
PROFIT/(LOSS) BEFORE 2010 1276
DEPRECIATION
AMORTISATION & TAX
EXPENSES
Depreciation and Amortisation 1189 1219
Expenses
PROFIT/(LOSS) BEFORE TAX 821 57
AND BEFORE EXCEPTIONAL
ITEM
PROFIT ON SALE OF 492
WINDMILLS
PROFIT/(LOSS) BEFORE TAX 1313 57
AFTER EXCEPTIONAL ITEM
Tax Expenses
a) Current Tax (MAT) 6
b) MAT credit entitlement 6
c) Deferred Taxation 312 21
PROFIT/(LOSS) AFTER TAX 1001 78

2. FINANCIAL PERFORMANCE

The Spinning industry showed marginal improvement during the financial year underreview in spite of from the Company's Auditors sluggishness in the international as wellas domestic markets besides competition from newly established spinning mills in certainStates which were set up based on unduly high incentives and concessions offered by suchStates. Thus operating margins of spinning industry remained under pressure. Althoughexports of your company were slightly lower as compared to previous year overall incomefrom operations improved to Rs. 531.54 crores in the year under review as compared to Rs.496.30 crores in the previous year. Improved sales realization due to adoption of certainchanges in product mix and overall cost cutting measures taken by the company resulted inhigher operating profit at Rs. 54.86 cores compared to Rs. 49.53 crores of the previousyear.

The cash profit for the year under review was at Rs. 20.10 crores as against Rs. 12.76crores of previous year and after charging depreciation of Rs. 11.89 crores for the yearthe profit before tax and exceptional items was at Rs. 8.21 crores as against Rs. 0.57crores for the previous year.

During the year under review the company could complete sale of one of the fourWindmills on a Slump

Sale basis and earned a profit of Rs. 4.92 crores. Thus after taking into accountexceptional item of profit on sale of windmills as above and after provision fortaxation the net profit after tax for the year was Rs. 10.01 crores as against Rs. 0.78crores for the previous year.

In the current year your company was able to complete sale of remaining threeWindmills on Slump Sale basis. Consequent to this the outstanding term loan liability ofthe company has been reduced considerably.

3. DIVIDEND

In view of continued liquidity constraints your Directors regret their inability torecommend dividend for the financial year ended 31st March 2017.

4. MANAGEMENT DISCUSSION AND ANALYSIS

A separate report on the Management discussion and analysis forms an integral part ofthis report.

5. DEPOSIT FROM PUBLIC

During the year under review your Company has not accepted any deposits within themeaning of Section 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules

2014 (including any statutory modification(s) or re-enactment(s) for the time being inforce).

6. CORPORATE GOVERNANCE

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Regulations andDisclosure Requirements) Regulations 2015 a separate section on Corporate Governancepractices followed by the Company together with a Certificate confirming complianceforms an integral part of this

Report.

7. DIRECTORS

In accordance with the provisions of the Companies Act 2013 and Company's Articles ofAssociation Shri B.K. Patodia retires by rotation at the ensuing Annual

General Meeting and being eligible offer himself for reappointment. The Boardrecommends the same for your approval.

Kerala State Industrial Development Corporation (KSIDC) Trivandrum has withdrawn theirNominee Shri.

B. Jyothikumar from the Board effective from 3.8.2016 and in his place Shri. RajeshJacob was appointed with effect from 25.10.2016. The Board placed on record its profoundappreciation to Shri. B. Jyothikumar for his significant during his tenure.

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 Regulation16 (1) (b) of SEBI (LODR) Regulations 2015.

8. NUMBER OF MEETINGS OF THE BOARD

The details of the number of meetings of the Board held during the year ended 31stMarch 2017 forms part of the Corporate Governance Report.

9. KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company: (i) Shri. Umang Patodia: Managing Director (ii) Shri. T. Ravindran : Chief Financial Officer (iii) Shri. DipuGeorge : Deputy Company Secretary

10. MEETING OF INDEPENDENT DIRECTORS

The Independent Directors met once during the Financial Year under review. The Meetingwas conducted without the presence of the Non-Independent Directors and members ofmanagement.

11. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134 (5) of the Companies Act 2013 and based onthe representations received from the management your Directors confirm that: (i) in thepreparation of the Annual Accounts for the year ended 31st March 2017 theapplicable Accounting Standards have been followed and there are no material departures;(ii) selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of your company at the end of the financial year and of the profit lossof the company for the financial year ended 31st March 2017.

(iii) taken proper and knowledge and ability for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of your Company and for preventing and detecting fraud and other irregularities.

(iv) prepared the Annual Accounts on a going concern basis.

(v) had laid down internal financial controls to be followed by the company and thatsuch internal financial controls are adequate and were operating effectively;

(vi) devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and operating effectively.

12. BOARD EVALUATION

In compliance with the Companies Act 2013 and Regulation 17(10) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the performance evaluation ofthe Board was carried out during the year under review. A structured questionnaire wasprepared after taking into consideration of the various aspects of the Board'sfunctioning composition of the Board and its Committees culture execution andperformance of specific duties obligations and governance.

The performance evaluation of the Independent Directors was completed. The performanceevaluation of the Chairman and the Non-Independent Directors was carried out by theIndependent Directors. The

Board of Directors expressed their satisfaction with the evaluation process.

13. FAMILIARISATION PROGRAMME FOR DIRECTORS

At the time of appointing a Director a formal letter of appointment is given to himwhich interalia explains the role function duties and responsibilities expected of himas a Director of the Company. The Director is also explained in detail the Compliancerequired from him under the Companies Act 2013 SEBI (LODR) Regulations 2015 and otherrelevant regulations and affirmation taken with respect to the same.

The Chairman and the Management has also one to one discussion with the Directors tofamiliarize with the company's operations.

14. AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act 2013 and rules madethereunder the term of Office of M/s. M.S. Jagannathan & Visvanathan

Chartered Accountants Coimbatore as the Statutory

Auditors of the Company will conclude from the closurse of ensuing Annual GeneralMeeting of the Company.

The Board of Directors places on record its appreciation to the services rendered byM/s. M.S. Jagannathan & Visvanathan Chartered Accountants as the Statutory Auditorsof the Company.

Subject to the approval of the members the Board of Directors of the Company hasrecommended the appointment of M/s. L.U. Krishnan & Co. (Regn.

No.001527S) Chartered Accountants Chennai as the Statutory Auditors of the Companypursuant to Section 139 of the Companies Act 2013. Accordingly the Board recommends theresolution in relation to appointment of Statutory Auditors for the approval by theshareholders of the Company.

There is no audit qualification for the year under review.

15. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethere under the Company has appointed Shri. MRL Narasimha Practicing Company Secretaryto undertake the Secretarial Audit of the Company. The Audit Report is attached as AnnexureI and forms an integral part of this Report.

The Secretarial Audit Report does not contain any qualification reservations oradverse remark

16. COST AUDITORS

As recommended by the Audit Committee the Board of Directors has approved theappointment of M/s. Hareesh K.N and Associates Cost Accountants as the CostAuditors of the company for the year ended 31st March 2017.

17. EXTRACT OF ANNUAL RETURN

The extract of Annual Return in Form MGT-9 as per

Section 92 (3) of the Companies Act 2013 and Rule

12 (1) of Companies (Management & Administration)

Rules 2014 is annexed hereto as Annexure II and forms part of this report.

18. RELATED PARTY TRANSACTIONS

None of the transactions with related parties falls under the scope of Section 188(1)of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 are given inAnnexure III in form AOC-2 and the same forms part of this report.

In order to ensure assured supply of quality cotton at competitive prices yourDirectors proposes to enhance the existing limits in the normal course of business and atarm's length. Pursuant to Regulation 23 (4) of SEBI (LODR) Regulations 2015 all"material" related party transactions shall only be required to have approval ofthe Shareholders and the proposed limit shall not fall under the said provision. Howeveras an abundant caution it is proposed to seek approval of the shareholders. More detailswere given in the explanatory statement of the

Notice calling Annual General Meeting forming part of the Annual Report. YourDirectors recommends the resolution for the approval by the shareholders of the Company.

19. LOANS & INVESTMENTS

Details of loans guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes to Financial Statements forming partof this report.

20. RISK MANAGEMENT

The Company has laid down a well-defined risk management mechanism covering the riskmapping and trend analysis risk exposure potential impact and risk mitigation process. Adetailed exercise is being carried out to identify evaluate manage and monitor businessrisks. The Audit Committee and the Board periodically review the risks and suggest stepsto be taken to manage/ mitigate the same through a properly defined framework.

.

During the year a risk analysis and assessment was conducted and no major risks werenoticed which may threaten the existence of the company.

21. VIGIL MECHANISM / WHISTE BLOWER POLICY

The Company has a Vigil Mechanism/Whistle Blower Policy to report genuine concerns orgrievances. The Vigil Mechanism (Whistle Blower Policy) has been posted on the company'swebsite (www.patspin.com).

22. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Even though the provisions of Companies Act 2013 regarding Corporate SocialResponsibility are not attracted to the Company yet the company has been over the yearspursuing as part of its corporate philosophy an unwritten CSR policy voluntarily whichgoes much beyond mere philanthropic gestures and integrates interest welfare andaspirations of the community with those of the Company itself in an environment ofpartnership for inclusive development.

For the year ended 31.3.2017 the Profit Before Tax as per the audited annual accountsis more than Rs. 5 crores and therefore your Board has constituted a CSR Committee toinitiate Company's CSR policy in accordance with Schedule VII of the Companies Act 2013

23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

Information required under section 134 (3) (m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is given in the Annexure IV formingpart of this report.

24. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an effective internal control and risk mitigation system designed toeffectively control the operations at its Head Office Plants and Depots. The internalcontrol systems are designed to ensure that the financial and other records are reliablefor the preparation of financial statements and for maintaining assets.

The Company has well designed Standard Operating Procedures. Independent InternalAuditors conduct audit covering a wide range of operational matters and ensure compliancewith specified standards. Planned periodic reviews are carried out by Internal Audit.

The findings of Internal Audit are reviewed by the top management and by the AuditCommittee of the Board of Directors.

Based on the deliberations with Statutory Auditors to ascertain their views on thefinancial statements including the Financial Reporting System and Compliance to Accountingand material orders passed Policies and Procedures the Audit Committee was satisfied withthe adequacy and effectiveness of the Internal Controls and Systems followed by thecompany.

25. NOMINATION & REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a frame work in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members. Moredetails on the same are given in the Corporate Governance Report.

26. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013.

The Company has in place an anti-sexual harassment policy in line with the requirementsof the sexual harassment of women at the workplace (Prevention Prohibition and Redressal)Act 2013. Internal Compliance Committee (ICC) is already been functioned for redressingcomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. The Company has not received anycomplaints under this policy during the year ended 31st March 2017.

27. PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 134 (3) (q) OF THE COMPANIES ACT 2013READ WITH RULE 5 (1) OF THE COMPANIES (APPOINTMENT AND REMUENRATION OF MANAGERIALPERSONNEL) RULES 2014

The information required pursuant to section 134 (3) (q) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the company will be provided uponrequest. In terms of Section 136 of the Act the Report and Accounts are being sent to theMembers and others entitled thereto excluding the information on employees' particularswhich is available for inspection by the Members at the Registered office of the Companyduring business hours on working days of the Company up to the date of the ensuing AnnualGeneral Meeting. If any Member is interested in obtaining a copy thereof such member maywrite to the company in this regard.

28. PERSONNEL & INDUSTRIAL RELATIONS

Industrial Relations were cordial and satisfactory. There were no employees whoseparticulars are to be given in terms of Section 134(3)(q) of the companies Act 2013 readwith Rule 5(2) and 5(3) of the companies (Appointment and Remuneration of Managerialpersonnel) Rules 2014.

29. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS by There are nosignificant the Regulators or Courts or Tribunals that would impact the going concernstatus of your Company and its future operations.

30. GENERAL a) Your Company not issued equity shares with differential rights as todividend voting or otherwise: and b) Your Company does not have any ESOP scheme for itsemployees / Directors

31. ACKNOWLEDGMENT

Your Directors place on record their gratitude to Central

Bank of India State Bank of India (SBI) Export-Import

Bank of India erstwhile State bank of Travancore taken over by SBI The Karur VysyaBank Limited IDBI Bank Limited Oriental Bank of Commerce Bank of Maharashtra and CanaraBank and the concerned Departments of the State and Central Government valuable customerEmployees and Shareholders for their assistance support and co-operation to the

Company.

For and on behalf of the Board of Directors
B K PATODIA
Place: Kochi Chairman
Date: 10th August 2017 (DIN:00003516)