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Pranavaditya Spinning Mills Ltd.

BSE: 531172 Sector: Industrials
NSE: N.A. ISIN Code: INE569D01028
BSE 00:00 | 12 Sep 17.00 0






NSE 05:30 | 01 Jan Pranavaditya Spinning Mills Ltd
OPEN 17.00
52-Week high 18.95
52-Week low 11.74
Mkt Cap.(Rs cr) 33
Buy Price 16.15
Buy Qty 16.00
Sell Price 17.00
Sell Qty 2.00
OPEN 17.00
CLOSE 17.00
52-Week high 18.95
52-Week low 11.74
Mkt Cap.(Rs cr) 33
Buy Price 16.15
Buy Qty 16.00
Sell Price 17.00
Sell Qty 2.00

Pranavaditya Spinning Mills Ltd. (PRANAVSPINNING) - Director Report

Company director report

Dear Members

On behalf of the Board of Directors of your Compnay ("the Board") it givesme pleasure to present the 28th Annual Report on the business and operations ofyour Company together with the Audited Financial Statements for the year ended 31stMarch 2018.

Financial Results (As per IND AS)

(Rs in lakhs except EPS)

Particulars 2017-18 2016-17
Total Income 7204.14 5856.21
EBIDTA (70.74) 35.12
Less : Finance Cost 34.71 17.85
Less : Depreciation 124.36 115.54
Profit / (Loss) before Tax (229.81) (98.27)
Less: Provision for taxation (66.05) (41.50)
Net Profit / (Loss) after tax (163.76) (56.77)
Other Comprehensive Income 6.73 10.18
Total Comprehensive Income (157.03) (46.59)
EPS (in ') (0.85) (0.30)


In view of loss incurred by the Company for the year ended 31st March 2018the Board of Directors of the Company has not recommended any dividend on equity shares ofthe Company for the financial year under review.

Management Discussion and Analysis Operational and Financial Performance

During the year 2017-18 the FOB value of exports increased from ' 1320.70 lakhs to '3563.97 lakhs. Further your Company achieved total revenue of ' 7204.14 Lakhs ascompared to ' 5856.21 in previous year registering growth of 23% over previous year. Thisindicates positive outlook for demand for yarn. However cotton prices continued to remainhigh and volatile during the year under review. Further volatility in foreign currencypower cost GST and disparity between cotton and yarn price resulted in net loss of '163.76 lakhs for the year ended 31st March 2018.

Industry Structure and Development

India's textiles sector is one of the oldest industries in Indian economy and eventoday it is one of the largest contributors to India's exports with approximately 13 percent of total exports. The textiles sector is the second largest provider of employmentafter agriculture employs about 45 million people directly and 20 million peopleindirectly and the growth and all round development of this industry has a direct bearingon the improvement of India's economy.

The Indian textiles industry currently estimated at around US$ 120 billion isexpected to reach US$ 230 billion by 2020. The Indian Textile Industry contributesapproximately 2 per cent to India's Gross Domestic Product (GDP) 10 per cent ofmanufacturing production and 14 per cent to overall Index of Industrial Production (IIP).

Outlook 2018-19 Opportunities and Threats

The future outlook for cotton spinning industry looks positive. Favorable weatherconditions and remunerative prices are expected to improve the cotton supply situation inIndia in the next one year. The cotton production in India is likely to increase by around6 per cent to 36 million bales in CS 2017-2018 versus 33.7million bales last year.

Even though the crop output in CY2019 will continue to be comfortably higher thanCY2015 and CY2016 it is expected to fall short of consumption. This may result in adecline in cotton stocks to a seven-year low level next year. Correction in stocks isexpected to keep the cotton prices firm over the next 12-18 months.

While domestic demand will be supported by a consumption recovery for the Indianeconomy a better economic outlook for most

of textile trade partners and restoration of export incentives though lower than thepre-GST period would also support higher growth and firm up yarn prices next fiscal.Besides supply coming on-stream will be slower in fiscal 2019 which will aid theoperating margins of spinners due to higher pricing flexibility. The strong capacityadditions over the past 2-3 years though will restrict the margins from breaching thelevels attained in fiscal 2016.

Any change in government policies related to cotton and yarn higher raw material costcompetition from peer group power cost seasonal fluctuations non-availability ofskilled manpower have impact on spinning industry and are perceived as threats.


Your Company is mainly engaged in the manufacturing of yarn and operates in a singlesegment i.e Textiles.

Internal control systems and their adequacy

Your Company maintains adequate internal control system and procedures commensuratewith its size and nature of operations. The internal control systems are designed toprovide a reasonable assurance over reliability in financial reporting ensure appropriateauthorization of transactions safeguarding the assets of the Company and prevent misuse/losses and legal compliances.

The internal control system includes a well-defined delegation of authority and acomprehensive Management Information System coupled with quarterly reviews of operationaland financial performance a well-structured budgeting process and Internal audit. TheInternal Audit reports are periodically reviewed by the management and the Audit Committeeand necessary improvements are undertaken if required.

Environment Protection Health and Safety

Environment Protection Health and Safety continues to receive highest priority in alloperational and functional areas. Adequate safety measures are taken at plant forprevention of any untoward incidents. Various processes required for pollution control andenvironmental protection are strictly adhered to.

Human Resources

Your Company believes and acknowledges competitive advantage of dedicated workforce.Industrial relations continued to be cordial during the year under review.

As on March 312018 your Company has employed 189 permanent employees out of which 44are permanent staff and 145 are permanent workers.

Share Capital

The paid up equity share capital of the Company as on 31st March 2018 is '192412800/- comprising of 19241280 Equity shares of Face Value of ' 10/- each.During the financial year 2017-18 your Company has neither issued equity shares withdifferential rights as to dividends voting or otherwise nor has issued Sweat Equityshares. Your Company does not have any Employee Stock Option Scheme or Employee StockPurchase Scheme.

Directors and Key Managerial Personnel

During the year under review there was no change in the composition of the Board ofDirectors of your Company.

Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr. Anil KumarJain Non-Executive Non Independent Director of the Company retires by rotation at theensuing Annual General Meeting and being eligible has offered himself for there-appointment. The Board recommends his re-appointment for consideration at the ensuingAnnual General Meeting. Members are requested to refer the Notice of the ensuing AnnualGeneral Meeting for brief profile and other related information of Mr. Anil Kumar JainDirector retiring by rotation.

All the Independent Directors of the Company have given declarations that they meet thecriteria of independence as prescribed under Section 149 (6) of the Companies Act 2013and Regulation 16 (1) (b) of Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirement) Regulations 2015 (''Listing Regulations").

As on 31st March 2018 Mr. Ashok G. Halasangi Chief Executive Officer Mr.Dilip Kumar Ghorawat Chief Financial Officer and Mrs. Amruta Avasare Company Secretaryare the Key Managerial Personnel (KMP) of the Company in terms of Section 203 of theCompanies Act 2013.

Number of Board Meetings

During the year under review 4 Board Meetings were held on 11th May 20174th August 2017 6th November 2017 and 12th February2018. The maximum interval between any two consecutive Board meetings did not exceed 120days.

Company's policy on appointment and remuneration of Directors and Key ManagerialPersonnel

Your Company has adopted Nomination and Remuneration Policy for appointment andremuneration of Directors Key Managerial Personnel and Senior Management of the Company.The Nomination and Remuneration Policy is given in the Corporate Governance Report.

Annual Evaluation of Board Performance and its Committees and Directors

Criteria of performance evaluation of the Board of Directors including IndependentDirectors are laid down by Nomination and Remuneration Committee of the Company. Pursuantto the provisions of the Companies Act 2013 and Listing Regulations the Board hascarried out performance evaluation of its own evaluation of working of the committees andperformance evaluation of all Directors. A questionnaire containing the parameters ofperformance evaluation along with rating scale was circulated all the Directors. Aseparate meeting of Independent Directors of the Company was held on 11th May2017 in which Independent Directors inter-alia reviewed performance of Non-ExecutiveIndependent Chairman and other Non-Independent Directors. The Board expressed theirsatisfaction with the evaluation process. More details on performance evaluation areprovided in corporate governance report.

Directors' Responsibility Statement

Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act 2013your Directors to the best of their knowledge and belief and according to the informationand explanations obtained by them state and confirm that:

• in the preparation of the annual accounts for the year ended 31stMarch 2018 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;

• such accounting policies as mentioned in the notes to the Financial Statementsfor the year ended 31st March 2018 have been selected and applied consistentlyand judgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31st March2018 and of the loss of the Company for the year ended on that date;

• proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

• the annual financial statements for the year ended 31st March 2018have been prepared on a going concern basis;

• internal financial controls to be followed by the Company have been laid downand that the said financial controls were adequate and were operating effectively;

• proper systems to ensure compliance with the provisions of all applicable lawshave been devised and such systems were adequate and operating effectively.

Audit Committee

During the year under review there was no change in the composition of the AuditCommittee of the Company.

As on 31st March 2018 the Audit Committee comprises of Mr. S. K. Agrawal(Chairman) Mr. P N. Shah Mr. R. Anand and Mr.

Kamal Mitra. More details on the Audit Committee are given in Corporate GovernanceReport. All the recommendations made by the Audit Committee were accepted by the Board.

Statutory Auditors

In accordance with the provisions of Section 139 of the Companies Act 2013 at theAnnual General Meeting ("AGM") held on 21st August 2017 M/s. SureshKumar Mittal & Co. Chartered Accountants (Firm Registration No. 500063N) wereappointed as the Statutory Auditors of the Company for a period of 5 years to hold officefrom the conclusion of the 27th AGM till the conclusion of 32nd AGMsubject to the ratification by members at every AGM.

The Audit Committee and the Board of Directors of the Company at their meetings held on30th April 2018 have recommended to the members of the Company ratificationof appointment of M/s. Suresh Kumar Mittal & Co. Chartered Accountants (FirmRegistration No. 500063N) as Statutory Auditors of the Company to hold office from theconclusion of the 28th Annual General Meeting till the conclusion of 29thAnnual General Meeting of the Company. The Company has received a letter from M/s. SureshKumar Mittal & Co. Chartered Accountants confirming that they are eligible forratification of their appointment.

Auditors' Report

The Auditors' Report on standalone financial statements forms part of this AnnualReport. The Auditors' Report does not contain any qualifications reservations adverseremarks disclaimer or emphasis of matter. Notes to the Financial Statements areselfexplanatory and do not call for any further comments.

Secretarial Auditors and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with rulesthereunder the Board has appointed M/s. Kothari H. & Associates a firm of PractisingCompany Secretaries to conduct Secretarial Audit of the Company for the year ended 31stMarch 2018. The Secretarial Audit Report issued by them in Form No. MR-3 is provided as"Annexure 1" to this Report. The Secretarial Audit Report does not contain anyqualifications reservations or adverse remarks.

Public Deposits

During the year under review your Company has not accepted any deposits from publicunder Chapter V of the Companies Act 2013.


Your Company does not have any subsidiaries or joint ventures or associate companies asdefined under Companies Act 2013.

However your Company has framed a policy for determining material subsidiaries whichcan be accessed at http://www

Corporate Governance Report

As per Regulation 34(3) read with Schedule V of the Listing Regulations your Companyhas complied with the requirements of corporate governance. A Corporate Governance Reportalong with Statutory Auditors' Certificate confirming its compliance for the year ended 31stMarch 2018 is provided separately and forms integral part of this Annual Report.

Extract of Annual Return

Pursuant to the provisions of Section 92 (3) of the Companies Act 2013 Extract of theAnnual Return as on 31st March 2018 in Form No. MGT-9 is provided as"Annexure 2" to this Report.

Secretarial Standards

During the year under review your Company has complied with all applicable standards.

Related Party Transactions

All Related Party Transactions entered during FY 2017-18 were on an arm's length basisand in the ordinary course of business and were in compliance with the applicableprovisions of the Companies Act 2013 ("The Act") and Listing Regulations. Therelated transactions are provided in the notes to financial statements. On the basis ofAudited Financial Statements of the Company for the year ended 31st March 2018the transactions pertaining to sale of yarn entered into with Indo Count industriesLimited Holding Company for the year ended 31st March 2018 qualify formaterial related party transactions under Regulation 23 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and approval of members is sought for the sameat the ensuing Annual General Meeting. Pursuant to the provisions of Section 134 of theCompanies Act 2013 particulars of contracts/ arrangements with Related Parties areprovided in Form AOC-2 as "Annexure 3' to this Report.

The prior omnibus approval of Audit Committee is obtained for all Related PartyTransactions. A statement of all Related Party Transactions is reviewed by the AuditCommittee and Board on quarterly basis. Your Company has adopted a policy on Related PartyTransactions and is uploaded on the website of the Company at

Particulars of Loans Investments Guarantees Securities under Section 186 of theCompanies Act 2013

During the year under review pursuant to Section 186 of the Companies Act 2013 noLoans were given to any person nor any Guarantees or securities were provided. Furtherno investment was made in the securities of any other bodies corporates.

Risk Management

The Company has devised Risk Management System which takes care of risk identificationassessment and mitigation. Some of the risks faced by the company are raw material pricerisk financial risk foreign currency risk etc. At present there are no risks which inthe opinion of the Board threaten the existence of the Company. The Internal Audit Reportand Risk Management Framework are reviewed by the Audit Committee.

Vigil Mechanism / Whistle Blower Policy

Pursuant to the provisions of Section 177 (10) of the Companies Act 2013 andRegulation 22 of the Listing Regulations your Company has established a vigil mechanismfor the Directors and employees of the Company to report concerns about unethicalbehaviour actual or suspected incidents of fraud or violation of Code of Conduct. Thedetails of Vigil Mechanism/Whistle Blower Policy are provided in the Corporate GovernanceReport. The Vigil Mechanism / Whistle Blower Policy may be accessed on the Company'swebsite at .

Policy on Prevention Prohibition and Redressal of Sexual Harassment of Women atWorkplace

In order to prevent sexual harassment of women at workplace your Company has adopted apolicy for prevention of Sexual Harassment of Women at workplace and has set up anInternal Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 to look into complaints relating to sexual harassmentat workplace of any woman employee. During the year under review the Company has notreceived any complaint pertaining to sexual harassment and no complaint was pending as on31st March 2018.

Conservation of Energy Technology Absorption & Foreign Exchange Earning &Outgo

Information on Conservation of Energy Technology Absorption Foreign Exchange Earningsand Outgo required under Section 134 (3) (m) of the Companies Act 2013 read with Rulesthereunder is given as "Annexure 4" forming part of this Report.

Particulars of Employees and related disclosures

The information required pursuant to Section 197 read with Rule 5(1) 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isprovided as "Annexure 5-(I)" and "Annexure 5-(II)" to this reportregarding remuneration of Directors Key Managerial Personnel and other relateddisclosures.

Significant or Material orders passed by Regulators / Courts

During the year under review no significant or material orders were passed by theRegulators or Courts or Tribunals which impact the going concern status and Company'soperations in future.

Material Changes and Commitments affecting the Financial Position of the Company

There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year 2017-18 and the date ofthis report.


Your Directors state that no disclosure or reporting is required in respect of thefollowing items as the said provisions are not applicable to your Company during the yearunder review:

1. Cost Audit

2. Corporate Social Responsibility

Acknowledgements and Appreciation

We place on record sincere appreciation for the contribution and commitment by all theemployees of the Company.

Your Directors take this opportunity to thank Central and State Governments customerssuppliers bankers and stakeholders for their consistent support and co-operation to theCompany.

For and on behalf of Board of Directors

Dated : 30th April 2018 Place : Mumbai S. K. AGRAWAL CHAIRMAN

DIN: 00400892