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Pranavaditya Spinning Mills Ltd.

BSE: 531172 Sector: Industrials
NSE: N.A. ISIN Code: INE569D01028
BSE 00:00 | 22 Jan 15.75 0






NSE 05:30 | 01 Jan Pranavaditya Spinning Mills Ltd
OPEN 15.75
52-Week high 19.50
52-Week low 9.16
Mkt Cap.(Rs cr) 30
Buy Price 15.75
Buy Qty 765.00
Sell Price 17.20
Sell Qty 494.00
OPEN 15.75
CLOSE 15.75
52-Week high 19.50
52-Week low 9.16
Mkt Cap.(Rs cr) 30
Buy Price 15.75
Buy Qty 765.00
Sell Price 17.20
Sell Qty 494.00

Pranavaditya Spinning Mills Ltd. (PRANAVSPINNING) - Director Report

Company director report

Dear Members

The Directors of Pranavaditya Spinning Mills Limited (“your Company”) presentthe 30th Annual Report on the business and operations of your Company togetherwith the Audited Financial Statements for the year ended 31st March 2020.

Financial Results

( In Lakhs except EPS)

Particulars 2019-20 2018-19
Revenue from operations 6941.13 8226.07
Other Income 53.81 29.23
Total Income 6994.94 8255.30
EBIDTA (244.19) 55.06
Less : Finance Cost 27.44 28.09
Less : Depreciation and Amortisation expenses 124.76 123.41
Profit / (Loss) before Tax (396.39) (96.44)
Provision for taxation - (Expense)/ Credit 128.14 30.83
Net Profit / (Loss) after tax (268.25) (65.61)
Add: Other Comprehensive Income (1.99) 3.42
Total Comprehensive Income (270.24) (62.19)
EPS (in ') (1.39) (0.34)

The revenue from operations of your Company declined by around 15.62% from ' 8226.07Lakhs in previous year to ' 6941.13 Lakhs for the year ended 31st March 2020.Decline in revenue disparity between cotton and yarn price and weak demand of cotton yarnmainly resulted in higher net loss after tax of ' 268.25 Lakhs for the year ended 31stMarch 2020 as compared to net loss of ' 65.61 lakhs in previous year. More details onoperational and financial performance are provided in Management Discussion and AnalysisReport.

COVID-19 Pandemic

In the month of March 2020 the outbreak of Novel Coronavirus (COVID-19) pandemicdeveloped rapidly into a global crisis. This led to declaration of the lockdowns by thegovernments in the countries all over the world. For your Company the focus immediatelyshifted to ensuring the health safety and well-being of all employees. The manufacturingplant of the Company at Kolhapur was temporarily closed from March 23 2020 to containthe spread of COVID-19 as per Central/ State Government directions. The plant resumedpartial operations from May 6 2020 with limited workforce subject to the conditionsprescribed by the Government/Local Authorities. However COVID-19 pandemic have aggravatedthe problems of spinning industry and going forward the situation appears to bechallenging for the Company. More details on impact of COVID-19 Pandemic are provided inManagement Discussion and Analysis Report.


In view of loss incurred by the Company for the year ended 31st March 2020the Board of Directors of your Company has not recommended any dividend on the equityshares of the Company for the financial year under review.

Transfer to Reserves

During FY 2019-20 no amount has been transferred to the general reserves/ retainedearnings of the Company.

Share Capital

There was no change in capital structure of your Company during the year under review.As on 31st March 2020 the paid up equity share capital of your Company is '192412800/- comprising of 19241280 Equity shares of Face Value of ' 10/- each.During the financial year 2019-20 your Company has not issued any equity shares withdifferential rights as

to dividends voting or otherwise or any convertible securities warrants or SweatEquity shares. Your Company does not have any Employee Stock Option Scheme or EmployeeStock Purchase Scheme.

Directors and Key Managerial Personnel

During the year under review pursuant to the recommendation of Nomination andRemuneration Committee (NRC) Mr. L. Viswanathan (DIN: 00193056) was appointed by theBoard as an Additional Director in the category of Non-Executive Independent Director ofthe Company for a first term of five consecutive years w.e.f. 8th May 2019.His appointment as an Independent Director was duly approved by the members of the Companyat the Annual General Meeting (“AGM”) of the Company held on 13thAugust 2019.

Mr. Pradyumna Natvarlal Shah (DIN: 00096793) and Mr. Anand Ramanna (DIN: 00040325) wereassociated with the Company as Independent Directors for more than a decade. Their firstterm of appointment as Independent Directors was upto 15th August 2019. Due toadvanced age they did not seek re-appointment for a second term. Hence they ceased to bethe Directors of the Company w.e.f. 16th August 2019 due to expiry of theirfirst term. The Board places on record its appreciation for the immense contributions andvaluable guidance given by Mr. P. N. Shah and Mr. R. Anand during their long associationas Directors of the Company.

Mr. S. K. Agrawal (DIN:00400892) was re-appointed as a Non-Executive IndependentDirector designated as “Chairman” of the Company for the second term of fiveconsecutive years w.e.f. 16th August 2019 by the members of the Company at theAGM held on 13th August 2019.

The appointment of Ms. Kala Agarwal (DIN: 08015576) as an Independent Director of theCompany w.e.f. 7th February 2019 was also approved by the members of theCompany at the AGM held on 13th August 2019.

Pursuant to the provisions of Section 152 of the Companies Act 2013 (“Act”)and articles of association of the Company Mr. Anil Kumar Jain (DIN: 00086106)Non-Executive Non-Independent Director of the Company retires by rotation at the ensuingAGM and being eligible has offered himself for the re-appointment. The Board recommendshis re-appointment for consideration at the ensuing AGM. As per Secretarial Standard - 2and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(“Listing Regulations”) brief profile and other related information of Mr. AnilKumar Jain Director retiring by rotation is provided in the Notice of ensuing AGM.

As on 31st March 2020 Mr. Ashok G. Halasangi Chief Executive Officer Mr.K. Muralidharan Chief Financial Officer and Mrs. Amruta Avasare Company Secretary &Compliance Officer are the Key Managerial Personnel (KMP) of the Company in terms ofSection 203 of the Companies Act 2013.

All the Independent Directors of the Company have given declarations that they meet thecriteria of independence as prescribed under Section 149(6) of the Act and Regulation16(1)(b) of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (''Listing Regulations”) and that they are not awareof any circumstance or situation which exist or may be reasonably anticipated that couldimpair or impact their ability to discharge duties with an objective independent judgmentand without any external influence. The said declarations were taken on record by theBoard after assessing due veracity of the same. In the opinion of the Board allIndependent Directors are independent of the management.

Pursuant to Rule 6 of Companies (Appointment and qualification of Directors) Rules2014 as amended w.e.f. 1st December 2019 all Independent Directors of theCompany viz. Mr. S. K. Agrawal Dr. Ashok Desai Ms. Kala Agarwal and Mr. L. Viswanathanhave registered themselves in the Independent Directors databank maintained with theIndian Institute of Corporate Affairs (IICA). Further all the Independent Directors havealso cleared the proficiency test conducted by IICA. In the opinion of the Board ofDirectors of the Company all Independent Directors possess high integrity expertise andexperience including the proficiency required to discharge the duties and responsibilitiesas Directors of the Company.

Number of Board Meetings

During the year under review Four (4) Board Meetings were held on 8th May2019 7th August 2019 7th November 2019 and 4thFebruary 2020. The maximum gap between any two consecutive Board meetings did not exceed120 days.

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

Pursuant to Section 178 of the Companies Act 2013 the Nomination and RemunerationCommittee (NRC) has formulated “Nomination and Remuneration Policy” which deals inter-aliawith the appointment and remuneration of Directors Key Managerial Personnel SeniorManagement and other employees. The said policy is uploaded on the website of the Companyand web-link thereto is

The salient features of the policy are as under:

I. Criteria for appointment:

a. NRC shall identify ascertain and consider the integrity qualification expertiseand experience of the person for the appointment as a Director of the Company andrecommend to the Board his / her appointment. The Directors shall uphold ethical standardsof integrity and probity and shall exercise their duties and responsibilities in theinterest of the Company.

b. A person proposed to be appointed as Director should possess adequate qualificationexpertise and experience for the position he / she is considered for appointment. Theyshall possess appropriate core skills/ expertise/ competencies/ knowledge in one or morefields of finance law management sales and marketing administration research and inthe context of business and/or the sector in which the company operates. The NRC has thediscretion to decide whether qualifications expertise and experience possessed by aperson are sufficient/ satisfactory for the concerned position.

c. The Company shall comply with the provisions of the Act and Listing Regulations andany other laws if applicable for appointment of Director of the Company. The Company shallensure that provisions relating to limit of maximum directorships age term etc. arecomplied with.

II. Remuneration of the Whole Time / Executive Director(s) / Managing Director:

a. The remuneration including commission payable to the Whole Time / ExecutiveDirector(s) / Managing Director shall be determined and recommended by the NRC to theBoard for approval.

b. While determining the remuneration of the Executive Directors following factorsshall be considered by the NRC/ Board:

• Role played by the individual in managing the Company including responding tothe challenges faced by the Company

• Individual performance and company performance so that remuneration meetsappropriate performance benchmarks

• Reflective of size of the Company complexity of the sector/ industry/ company'soperations and the Company's financial position

• Consistent with recognized best industry practices.

• Peer remuneration

• Remuneration involves balance between fixed and incentive pay reflectingperformance objectives appropriate to the working of the Company and its goals.

• Remuneration is reasonable and sufficient to retain and motivate directors torun the company successfully.

III. Remuneration to Non-Executive / Independent Directors:

Sitting Fees: Independent Directors are entitled for sitting fees for attendingmeetings of the Board or Committee of the Board or for any other purposes as may bedecided by the Board of such sum as may be approved by the Board of Directors of theCompany within the overall limits prescribed under the Act and the rules made thereunderListing regulations or other applicable law.

Annual Evaluation of Board Performance and its Committee and Individual Directors

Criteria of performance evaluation of the Board Committees and Directors are laid downby Nomination and Remuneration Committee (NRC) of the Company. Further pursuant to theprovisions of Section 178(2) of the Companies Act 2013 as amended by the Companies(Amendment) Act 2017 NRC decided to continue the existing method of performanceevaluation through circulation of performance evaluation sheets based on SEBI GuidanceNote dated 5th January 2017 and that only Board should carry out performanceevaluation of the Board its Committees and Individual Directors.

The performance evaluation sheets based on aforesaid SEBI Guidance Note containing theparameters of performance evaluation along with rating scale was circulated to all theDirectors. The Directors rated the performance against each criteria. Thereafterconsolidated score was arrived. Pursuant to the provisions of the Companies Act 2013 andListing Regulations the Board has carried out performance evaluation of its ownevaluation of working of the Committees and performance evaluation of all Directors in thesaid manner. The performance of the Board committees and individual directors was foundsatisfactory.

A meeting of the Independent Directors of the Company was held on 7thNovember 2019 in which Independent Directors inter-alia reviewed performance ofNon-Executive Independent Chairman and other Non-Independent Directors and the Board as awhole through performance evaluation sheets.

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 2020 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 2020 have been selected and appliedconsistently and judgments and estimates have been made that are reasonable and prudent soas to give a true and fair view of the state of affairs of the Company as at 31stMarch 2020 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 2020have 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 Mr. Pradyumna N. Shah (DIN: 00096793) and Mr. AnandRamanna (DIN: 00040325) ceased to be members of the Audit Committee w.e.f. 15thAugust 2019. Dr. Ashok Desai and Ms. Kala Agarwal Independent Directors were appointedas members of the Audit Committee w.e.f. 8th May 2019.

As on 31st March 2020 the Audit Committee comprises of 4 members viz. Mr.S. K. Agrawal Independent Director as Chairman Dr. Ashok Desai Ms. Kala AgarwalIndependent Directors and Mr. Kamal Mitra Non-Executive Non-Independent Director. Moredetails on the Audit Committee are given in Corporate Governance Report. All therecommendations made by the Audit Committee during the year under review were accepted bythe Board.

Statutory Auditors

In accordance with the provisions of Section 139 of the Act at the Annual GeneralMeeting (“AGM”) held on 21st August 2017 M/s. Suresh Kumar Mittal& Co. Chartered Accountants (Firm Registration No. 500063N) were appointed as theStatutory Auditors of the Company for a period of 5 years to hold office from theconclusion of the 27th AGM till the conclusion of 32nd AGM subjectto the ratification by members at every AGM.

The requirement to place the matter relating to appointment of Auditors forratification by Members at every Annual General Meeting was omitted vide notificationdated 7th May 2018 issued by the Ministry of Corporate Affairs. Accordinglyno resolution is proposed for ratification of the appointment of Auditors in the ensuingAGM of the Company.

The Company has received a letter from M/s. Suresh Kumar Mittal & Co. CharteredAccountants confirming that they are eligible for continuing as Statutory Auditors of theCompany.

Auditors' Report

The Auditors' Report on the standalone financial statements of the Company for the yearended 31st March 2020 forms part of this Annual Report. The Auditors' Reportdoes not contain any qualifications reservations adverse remarks or disclaimer. In termsof the provisions of Section 143(12) of the Act no frauds have been reported by theStatutory Auditors in their report for the year under review. Notes to the FinancialStatements are self-explanatory and do not call for any further comments.

Secretarial Auditors and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Act read with rules thereunder theBoard at its meeting held on 7th November 2019 had appointed M/s. Kothari H.& Associates Practicing Company Secretaries as Secretarial Auditors to conductSecretarial Audit of the Company for the year ended 31st March 2020. TheSecretarial Audit Report issued by Secretarial Auditors in Form No. MR-3 is provided as an“Annexure 1” to this Report. The Secretarial Audit Report does notcontain any qualifications reservations or adverse remarks.

Further in terms of the provisions of the Circular No. CIR/ CFD/CMD1/27/2019 dated 8thFebruary 2019 issued by Securities and Exchange Board of India (SEBI) M/s. Kothari H.& Associates Practicing Company Secretaries have issued the Annual SecretarialCompliance Report for the financial year ended 31st March 2020 therebyconfirming compliance of the applicable SEBI Regulations and circulars / guidelines issuedthereunder by the Company.

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.

Public Deposits

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

During the year under review your Company does not have any subsidiaries or jointventures or associate companies as defined under the Act. However the Company has frameda policy for determining material subsidiaries which can be accessed at web-link givenbelow:

Corporate Governance Report

Your Company has adopted best practices of Corporate Governance and complied with allthe requirement of Corporate Governance laid down by SEBI. As per Regulation 34(3) readwith Schedule V of the Listing Regulations a Corporate Governance Report along withStatutory Auditors' Certificate confirming compliance of corporate governance for the yearended 31st March 2020 is provided separately and forms integral part of thisAnnual Report.

Management and Discussion Analysis Report

Pursuant to Regulation 34 of the Listing Regulations Management Discussion andAnalysis Report containing information inter-alia on industry trends yourCompany's performance future outlook opportunities and threats for the year ended 31stMarch 2020 is provided in a separate section forming integral part of this AnnualReport.

Extract of Annual Return

Pursuant to the provisions of Section 92(3) of the Act read with Rule 12 of theCompanies (Management and Administration) Rules 2014 Extract of the Annual Return inForm MGT-9 as on 31st March 2020 is annexed as an “Annexure 2'' tothis report and is also available on the website of the Company at

In accordance with the provisions of Section 134(3) (a) of the Act copy of AnnualReturn for FY 2018-19 was hosted on the website of the Company and web-link to access thesame is return - form mgt-7- fy 2018-19.pdf Further a copy of Annual Return for the year ended 31stMarch 2020 will be hosted on the website of the company

Related Party Transactions

All Related Party Transactions entered during FY 2019-20 were on arm's length basis andin the ordinary course of business. During the year under review the Company entered intotransactions for purchase of cotton from Indo Count Industries Limited Holding Companywhich were material related party transactions during FY 2019-20 under Section 188 of theAct and Regulation 23 of the Listing Regulations. Approval of members of the Company wasobtained for certain

proposed material RPT with Indo Count Industries Limited (ICIL) Holding Company viz.purchase of cotton from ICIL upto ' 2500 Lakhs Sale of yarn to ICIL upto ' 5000 lakhsavailing loan/ corporate guarantee from ICIL upto ' 1000 lakhs for FY 2019-20 2020-21 and2021-22 at the Annual General Meeting of the Company held on 13th August 2019.

Pursuant to the provisions of Section 134 of the Act particulars of contracts/arrangements with Related Parties crossing threshold limits provided in Section 188 of theAct are provided in Form AOC-2 forming part of this Annual Report as “Annexure3”. Further the related party transactions are also provided in the notes to thefinancial statements.

Prior approval of Audit Committee is obtained for all Related Party Transactions. Astatement of all Related Party Transactions is reviewed by the Audit Committee and Boardon quarterly basis. Your Company has adopted a policy on Related Party Transactions and isuploaded 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 the provisions of Section 186 of the Act noloans were given to any person nor any Guarantees or securities were provided. Furtherno investment was made in the securities of any other body corporate.

Risk Management

The Company has devised Risk Management Policy 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. The details of Risk Management areincluded in Management discussion and Analysis Report.

Vigil Mechanism / Whistle Blower Policy

Pursuant to the provisions of Section 177(10) of the Act and Regulation 22 of theListing Regulations your Company has established a vigil mechanism for the Directors andemployees of the Company to report concerns about unethical behaviour actual or suspectedincidents of fraud or violation of Code of Conduct. The details of Vigil Mechanism/WhistleBlower Policy are provided in the Corporate Governance Report. The Vigil Mechanism/Whistle Blower Policy may be accessed on the Company's website at - whistle blower policy vigilmechanism.pdf

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 constituted anInternal Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 to look into the complaints relating to sexualharassment at workplace of any woman employee. During the year under review your Companyhas not received any complaint pertaining to sexual harassment and no complaint waspending as on 31st March 2020.

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 Act read with Rules thereunder is givenas “Annexure 4” forming part of this Report.

Particulars of Employees and related disclosures

The information required pursuant to Section 197 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided as “Annexure5-(I)” and “Annexure 5-(II)” to this report regarding remuneration ofDirectors Key Managerial Personnel and other related disclosure.

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 2019-20 to which theFinancial Statements relate and the date of the Board's Report. The global outbreak ofCOVID-19 pandemic has significantly impacted the economy. The management of your Companyhas considered internal and certain external sources of information and has used theprinciples of prudence in applying judgments estimates and assumptions regarding theprobable impact of the pandemic. The eventual outcome or impact of the pandemic may bedifferent from those estimated as on the date of approval of these Financial Statements.

Secretarial Standards

During the year under review your Company has complied with all the applicablesecretarial standards issued by the Institute of Company Secretaries of India. The samehas also been confirmed by Secretarial Auditors of the Company in the Secretarial AuditReport.


1. During the year under review cost audit was not applicable to the Company; howeverpursuant to the Order made by the Central Government for the maintenance of cost recordsunder Section 148(1) of the Act the prescribed accounts and records have been mademaintained.

2. There was no change in the general nature of business of the Company during FY2019-20.

3. The provisions pertaining to Corporate Social Responsibility (CSR) were notapplicable to the Company during the year under review.

4. As required in terms of Secretarial Standard (SS)-4 it is hereby confirmed thatthere is no corporate insolvency resolution process initiated under the Insolvency andBankruptcy Code 2016.

Acknowledgements and Appreciation

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

Your directors also place on record sincere appreciation for the contribution andcommitment by all the employees of the Company.

For and on behalf of Board of Directors

S. K. Agrawal
Date : 9th June 2020
Place : Mumbai