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Shekhawati Poly-Yarn Ltd.

BSE: 533301 Sector: Industrials
NSE: SPYL ISIN Code: INE268L01020
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OPEN 0.69
CLOSE 0.69
VOLUME 4100
52-Week high 0.69
52-Week low 0.35
P/E
Mkt Cap.(Rs cr) 24
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shekhawati Poly-Yarn Ltd. (SPYL) - Director Report

Company director report

To the Members

Your Directors have pleasure in submitting their 29th Annual Report of theCompany together with the Audited Statements of Accounts for the year ended March 31 2020.

1. FINANCIAL RESULTS

The financial highlights of your Company for the financial year ended March 31 2020are summarized as follows:

Particulars 2019-2020 2018-2019
Net Sales /Income from
Business Operations 16275.89 14713.86
Other Income 73.55 78.73
Total Income 16349.44 14792.59
Less:Expenses 17465.10 14719.68
Total (1115.66) 72.91
Less: Interest 19.83 20.22
Profit before Depreciation (1135.49) 52.69
Less: Depreciation 974.62 976.05
Profit/Loss after depreciation and Interest (2110.11) (923.36)
Less: Exceptional Item & Prior period Exp.
Profit/Loss before Tax (2110.11) (923.36)
Less: Current Income Tax
Less: Deferred Tax Liability / (Assets)
Net Profit / Loss after Tax (2110.11) (923.36)
Other comprehensive Income/(Loss) 9.55 (3.05)
Total Comprehensive Income/(Loss) for the year (After tax) (2100.56) (926.41)
Dividend (including Interim if any and final )
Net Profit after dividend and Tax (2100.56) (926.41)
Amount transferred to General Reserve
Balance carried to Balance Sheet (2100.56) (926.41)
Earnings per share (Basic) (0.61) (0.27)
Earnings per Share(Diluted) (0.61) (0.27)

2. DIVIDEND:

The Board of Director has not recommended any dividend on the Share Capital of theCompany for the period ended 31st March 2020 in view of losses incurred.

1. TRANSFER TO RESERVES:

The company has not transferred any amount to the reserves.

2. CHANGE IN NATURE OF BUSINESS :

During the year under review there is no change in the business of the Company.

3. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS:

Your Directors wish to present the details of Business operations done during the yearunder review:

a. Performance:

During the year under review the performance of the company was not good on account oflower capacity utilization thin margin in job work activity that the company was forcedto do on account of limited resources available with the company slowdown in the textileindustry and disruption of Plant operation due to Covid-19 Lockdown imposed by theGovernment. The Company has incurred loss after tax of Rs 2110.11 lacs as against a lossafter tax of Rs 923.36 lacs in the previous year 2018-19. The turnover of the company wasRs 16349.44 lacs as against Rs 14792.59 lacs in the previous year 2018-19.

b. Marketing and Market environment:

Your Company believes that its scale of operations and integration across the textilechain will in future offer significant advantages in both cost and revenue. Your Companywork hard to meet the competition as well as to enable to maintain long standing businessrelationship.

c. Future Prospects including constraints affecting due to Government policies:

We expect the textile segments to turn favorable based on the various factors likemacro economy condition and the Company is taking all necessary steps to take companyforward.

d. Impact of COVID-19

Last month of FY 2020 the COVID - 19 pandemic developed rapidly into a global crisisforcing government to enforce lock-down of all economic activities. For the Company thefocus immediately shifted to ensuring the health and well-being of all employees and thecompany has switched to work from home for some of the employees. Due to COVID-19 pandemicthe production of the company badly effected and plant was shut as per the directivemeasures of Government. In the month of May of FY 2021 the company has gradually startedits production and operation.

4. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY :

There were no material changes and commitments affecting the financial position of theCompany occurred between the end of the financial year to which this financial statementsrelate and the date of this report.

5. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There were no significant and material orders passed by the regulators / courts thatwould impact the going concern status of the Company and its future operations.

6. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:

Management's Discussion and Analysis Report for the year ended March 31 2020 asstipulated under Regulation 34(2) and (3) of SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015 with Stock Exchanges in India is presented in a separatesection forming part of this Annual Report.

7. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in "AnnexureA" and is attached to this report.

8. RISK MANAGEMENT POLICY:

Risk management includes identifying all types of risks and its assessment riskhandling and monitoring and reporting. The Company has laid down a well-defined riskmanagement mechanism covering the risk mapping and trend analysis risk exposurepotential impact and risk mitigation process. A detailed exercise is being carried out toidentify evaluate manage and monitor the principal risks that can impact its ability toachieve its strategic objectives. These are discussed at the meetings of the AuditCommittee and the Board of Directors of the Company. The Company has adopted RiskManagement Policy in accordance with the Listing Regulations 2015.

The Risk Management Policy is available on: weblink http://www.shekhawatiyarn.com/Companypolicies.html.

9. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES:

Pursuant to Section 135 of the Companies Act 2013 and the relevant rules the Boardhas constituted Corporate Social Responsibility (CSR) Committee. The member of theCommittee are Mr. Mukesh Ruia Mr. Vikas Damodardas Rathi and Mr. Shushil Kumar Poddar.The Board of Directors based on the recommendations of the Committee formulated a CSRPolicy. The Company could not undertake CSR activities in view of losses. The detailed CSRPolicy is hosted on company's website weblinkhttp://www.shekhawatiyarn.com/Companypolicies.html.

Annual report on CSR as required under Companies (Corporate Social ResponsibilityPolicy) Rules 2014 is furnished in "Annexure B" and forms part of thisreport.

10. DISCLOSURE UNDER THE SEXUAL HARASSEMENT OF WOMAN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:

The Company has been employing woman employees in various cadres within its office andfactory premises. The Company has in place a policy against Sexual Harassment in line withthe requirements of the Sexual Harassment of woman at work place (Prevention Prohibitionand Redressal) Act 2013. Internal Complaint Committee is set up to redress any complaintsreceived and are monitored by woman line supervisors. All employees are covered under thispolicy. There was no complaint received from any employee during the financial year2019-20 and hence no complaint is outstanding as on March 31 2020 for redressal.

11. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 2013:

There was no loans guarantees/securities or investments made by the Company underSection 186 of the Companies Act 2013 during the year under review and hence the saidprovision is not applicable.

12. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

The Particulars of Contracts or Arrangements made with related parties made pursuant toSection 188 is furnished in "Annexure C" and is attached to this report.All related party transactions that were entered into during the year under report were onan arm's length basis and in ordinary course of business and were in compliance withapplicable provisions of the Act and Listing Regulations.

The policy on the materiality of the Related Party Transactions and also on dealingwith the Related Party Transactions as approved by the Audit Committee and Board ofDirectors is available on the weblinkhttp:// www.shekhawatiyarn.com/Companypolicies.html.

13. AUDITORS REPORTS:

As regards Auditors Remarks in Audit Report comments of the Board of Director is asunder:-

Auditors Remark:

The company has not provided for Interest Expenses amounting to Rs 2243.66 lakhs (P.Y.Rs 2273.15 lakhs) (derived on simple interest basis) which should have been provided asper the principle of prudence on the borrowings which have been classified as"Non-performing assets" (NPA) by the banks as referred in Note 41 ofaccompanying notes to financial statement. The company has also not provided penalinterest and other bank charges as the same are not ascertainable. Had these InterestExpenses been debited to the Statement of Profit and Loss Account loss for the year endedand debit balance of Other Equity would have been higher by Rs 2243.66 lakhs and Rs9147.53 lakhs.

Managements Remark:

The Company is in the process of discussion with its lenders and is hopeful that thesuitable resolution plan will be considered by its lenders and accordingly the companyhas not recognised the Interest Expense.

14. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDDISCHARGE OF THEIR DUTIES:

The Company's Policy relating to appointment of Directors payment of Managerialremuneration including criteria for determining Directors Rs qualifications positiveattributes independence of Directors and other related matters as provided under Section178(3) of the Companies Act 2013 is furnished in "Annexure D" and isattached to this report.

15. EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92(3) of the Act and Rules framed thereunder an extract of theAnnual Return in Form MGT - 9 is furnished in "Annexure E" and isattached to this report.

16. SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any Subsidiary Joint venture or Associate Company.

17. DEPOSITS:

The Company has neither accepted nor renewed any deposits during the year under review.

18. MEETINGS OF THE DIRECTORS:

The Board met 6 (Six) times during the financial year the details of which are givenin the Corporate Governance Report that forms part of this Annual Report. The interveninggap between any two meetings was within the periods prescribed by the companies Act 2013and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulation2015 entered into with the stock exchanges.

19. DIRECTORS RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submit its responsibility statement that:-

a) In the preparation of the annual accounts applicable accounting standards have beenfollowed with explanation for any material departures;

b) The directors had selected accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company at the end of the financial year and of theprofit and loss of the company for that period;

c) That the directors had taken proper and sufficient care for the maintenance ofadequate accounting records for safeguarding the assets of the company and for preventingand detecting fraud and other irregularities;

d) The annual accounts are prepared on a going concern basis;

e) Internal financial controls laid have been followed by the company and that suchinternal financial controls are adequate and are operating effectively and;

f) The directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

20. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year under review following Directors were appointed/re-appointed andresigned in the Company.

Appointment/Re-appointment:

1) As per the provisions of Section 149 of the Companies Act 2013 Mr. VikasDamodardas Rathi (DIN: 03633856) who was appointed as an Additional Independent Directorby the Board of Directors on the recommendation of Nomination and Remuneration Committeeon April 30 2019 was re-appointed as an Independent Director for 5 consecutive years atthe 28th AGM of the Company held on September 30 2019.

2) During the year under review Mr. Sushil Kumar Poddar (DIN: 03605830) had retired asan Independent Director w.e.f. April 30 2019. However owing to his expertise and indepthknowledge of the industry he was again re-appointed as an Independent Director for asecond term of 5 consecutive years by the members of the Company at the 28thAGM of the Company held on September 30 2019.

3) As per the provisions of Section 152(6) of the Companies Act 2013 Mr. MukeshRuia(DIN: 00372083) Managing Director of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment.

4) As per the provisions of Section 149 of the Companies Act 2013 Mrs. Shweta Mundra(DIN: 08728819) who was appointed as an Additional Independent Director by the Board ofDirectors on the recommendation of Nomination and remuneration Committee on May 8 2020will be re-appointed as an Independent Director for 5 consecutive years at the ensuing 29thAGM of the Company to be held on September 30 2020.

Attention of the member is invited to the relevant item in the Notice of the 29thAnnual General Meeting and explanatory statement thereto.

Resignations:

During the year under review Miss. Swati Sahukara resigned from directorship w.e.fAugust 12 2019. The Board places on record its appreciation for the services rendered byMiss. Swati Sahukara for the services rendered by her as an Independent Director of theCompany.

During the year under review Mrs. Rohini Pradyumna Dandekar resigned from directorshipw.e.f February 13 2020. The Board places on record its appreciation for the servicesrendered by Mrs. Rohini Pradyumna Dandekar for the services rendered by her as anIndependent Director of the Company.

Appointment / Resignations of the Key Managerial Personnel:

There was no appointment/resignation of the Key Managerial Personnel during the yearunder review.

Board Evaluation:

Pursuant to section 134 and 174 of the Act and Regulation 17 and 19 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a separate exercise wascarried out to evaluate the performance of individual Directors Board its committeesincluding the Chairman of the Board who were evaluated on parameters such level ofengagement and contribution and independence of judgement thereby safeguarding theinterests of the Company. The performance evaluation of the Chairman and the NonIndependent Directors was carried out by the Independent Directors. The board also carriedout annual performance evaluation of the working of its Committees. The Directorsexpressed their satisfaction with the evaluation process.

Familiarization Programme:

The Company have conducted presentation during the financial year to familiarizeIndependent Directors with the Company their roles responsibilities in the Companyperformance update of the Company global business environment technology and the riskmanagement system of the Company. Further the Directors are encouraged to attend thetraining programmes being organized by various regulators/bodies/Institution on abovematters and freedom to interact with the management of the Company.

21. DECLARATION OF INDEPENDENT DIRECTORS:

The company has received necessary declaration from all Independent Directors undersection 149(7) of the Companies Act 2013 that he/she meets the criteria of independenceas prescribed under Section 149(6) and (7) of the Companies Act 2013 and Regulation 16of Listing Regulations.

22. STATEMENT ON INTEGRITY EXPERTISE AND EXPERIENCE OF INDEPENDENT DIRECTORS:

The Company has received declaration from all the Independent Director regarding theirIntegrity Expertise and Experience.

23. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE :

The Audit Committee consists of the following members as on March 31 2020

Name of the Member Designation
1 Mr. Vikas Damodardas Rathi Chairman
2 Mr. Mukesh Ruia Member
3 Mr. Sushil Kumar Poddar Member

The above composition of the Audit Committee consists of Independent Directors viz.Mr. Vikas Damodardas Rathi and Mr. Sushil Kumar Poddar who form the majority. More detailson the Committee are given in the Corporate Governance Report which forms part of thisAnnual Report.

The Company has established a vigil mechanism and overseas through the committee thegenuine concerns expressed by the employees and other Directors. The Company has alsoprovided adequate safeguards against victimization of employees and Directors who expresstheir concerns. The Company has also provided direct access to the chairman of the AuditCommittee on reporting issues concerning the interests of employees and the Company. Thedetails of the Whistle Blower Policy is explained in the Corporate Governance Report andis also displayed on the website of the Company.

24. AUDITORS

STATUTORY AUDITORS

M/s. Ajay Shobha & Co. Chartered Accountants were appointed as Statutory Auditor ofthe Company at the Annual General Meeting held on September 22 2015 to hold office tillthe conclusion of the Annual General Meeting to be held in the Calendar year 2020 subjectto ratification by the member at every AGM held thereafter. Hence the Company hasappointed again M/s. Ajay Shobha & Co. Chartered Accountants as a Statutory Auditor ofthe company in the Board Meeting held on June 29 2020 subject to approval of member inthe forthcoming Annual General Meeting from the date of Annual General Meeting till theconclusion of the Annual General Meeting to be held in the financial year 2025.

M/s. Ajay Shobha & Co. Chartered Accountants have under Sections 139 and 141 of theAct and Rules framed thereunder confirmed that they are not disqualified from continuingas Statutory Auditor of the Company and furnished a valid certificate issued by the PeerReview Board of the Institute of Chartered Accountants of India as required underRegulation 33 of the Listing Regulations.

COST AUDITORS:

As per the requirements of Section 148 of the Act read with the Companies (Cost Recordand Audit) Rules 2014 the Audit of Cost Account related to Textile product is beingcarried out every year. The Board of Directors have based on the recommendations of theAudit Committee appointed M/s. N. Ritesh & Associates Cost Accountants Mumbai(Membership No. M/26963) to audit the cost accounts of the Company for the year endedMarch 31 2021 on a remuneration to be fixed between the Board and Cost Auditor. Asrequired under the Act necessary resolution seeking member's ratification for theremuneration payable to M/s. N. Ritesh & Associates is included as Item Number 6 ofthe Notice convening 29th Annual General Meeting.

SECRETARIAL AUDITORS :

M/s. GMJ & Associates Practicing Company Secretaries were appointed to conductthe Secretarial Audit of the company for the Financial Year 2019-20 as required underSection 204 of the Companies Act 2013 and Rules thereunder. The Secretarial Audit reportfor FY 2019-20 forms part of the Annual Report as "Annexure F" to theBoard Report.

Their appointment as Secretarial Auditor for the Financial year 2020-21 has beenapproved in the meeting of the Board of Directors held on June 29 2020.

INTERNAL AUDITORS:

M/s. Sunil Kudwa & Co. Chartered Accountants (Firm Registration No. 123657W) wereappointed as Internal Auditors of the Company for the F.Y. 2019-2020.

Their appointment as an Internal Auditor for the Financial Year 2020-21 has beenapproved in the meeting of the Board of Directors held on June 29 2020.

25. INTERNAL FINANCIAL CONTROL:

The Board has adopted system of internal control to ensuring the orderly and efficientconduct of its business including adherence to the Company's Policies the safeguardingof its assets the prevention and detection of fraud and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures. The Company is in the process of strengthening its Internal Financial ControlSystem considering present financial situation and other recent developments.

26. HUMAN CAPITAL AND PARTICULARS OF EMPLOYEES:

Your company had 411 employees as on March 31 2020.

The statement containing the particulars of employees as required under Section 197(12)of the Companies Act 2013 read along with Rule 5(2) and 5(3) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is not applicable tothe company as no employees were in receipt in remuneration above the limits specified inRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.

The details required as per Section 197(12) of the Companies Act 2013 read along withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is annexed as "Annexure G" and forms part of the report.

27. SHARE CAPITAL AND CHANGES THEREIN:

a. BUY BACK OF SECURITIES:

The Company has not bought back any of its securities during the year under review.

b. SHARES WITH DIFFERENTIAL VOTING RIGHTS:

The company has not issued equity shares with differential voting rights during theyear under review.

c. SWEAT EQUITY:

The Company has not issued any Sweat Equity Shares during the year under review.

d. BONUS SHARES:

No Bonus Shares were issued during the year under review.

e. EMPLOYEES STOCK OPTION PLAN:

The Company has not provided any Stock Option Scheme to the employees.

28. CORPORATE GOVERNANCE REPORT:

Your Company has complied with the Corporate Governance requirements as per theRegulation 27(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. A separate report on Corporate Governance along with a Certificate of Compliancefrom the Auditors forms a part of this report.

29. COMPLIANCE OF SECRETARIAL STANDARDS:

The Company is in compliance with all applicable Secretarial Standards issued by theInstitute of Company Secretaries of India.

30. LISTING:

The equity shares continue to be listed on BSE Limited (BSE) and National StockExchange of India Limited (NSE). The Company has paid the annual listing fee for theFinancial Year 2019-20 to BSE and NSE.

31. POLICY ON DIRECTORS Rs APPOINTMENT AND REMUNERATION:

The current policy is to have an appropriate mix of executive non-executive andindependent directors to maintain the independence of the Board and separate itsfunctions of governance and management. As of March 31 2020 the Board had 4 members 2of whom are executive directors 2 are Non-Executive Independent Director. The policy ofthe Company on directors Rs appointment and remuneration including the criteria fordetermining qualifications positive attributes independence of a director and othermatters as required under sub-section (3) of Section 178 of the Companies Act 2013 isavailable on our website at www. shekkhawatiyarn.com. We affirm that theremuneration paid to the directors is as per the terms laid out in the Nomination andRemuneration Policy of the Company.

32. ACKNOWLEDGEMENTS:

Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Companies activities during the year under review. Your Directors also acknowledgesgratefully the shareholders for their support and confidence reposed on your Company.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

For SHEKHAWATI POLY-YARN LIMITED

Sd/- Sd/-
Mukesh Ruia Ravi Jogi
Date : August 42020 Chairman & Managing Director Whole - Time Director
Place : Mumbai (DIN : 00372083) (DIN : 06646110)

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