Your Directors have pleasure in presenting the Thirty Ninenth Annual Report togetherwith Audited Financial Statements of the Company for the year ended 31st March2020.
( Rs in lakhs)
|FINANCIAL RESULTS || |
| ||2019-20 ||2018-19 |
|Profit before Interest and Depreciation ||3822.41 ||4302.01 |
|Less: Interest ||2230.74 ||2165.31 |
|Profit before Depreciation ||1591.67 ||2136.70 |
|Less: Depreciation ||1468.93 ||1336.21 |
|Profit before Tax ||122.74 ||800.49 |
|Less : Provision for Income Tax || || |
|- Current Tax ||- ||162.94 |
|- Deferred tax Liability (Net) ||(31.96) ||(32.74) |
|Profit after Tax ||154.70 ||670.29 |
|Add : Other comprehensive income/(Loss) ||(39.00) ||(30.93) |
|Total comprehensive income/(Loss) for the year ||115.70 ||639.36 |
The Board has not recommended any dividend for the financial year 2019-2020.
REVIEW OF OPERATIONS
During the year under review the spinning unit produced 11319.54 tonnes (10482.15tonnes) of yarn. The spinning unit sold 11907.69 tonnes (9868.55 tonnes) of yarn and outof which exports accounted for 806.16 tonnes (1505.77 tonnes). Further during the yearunder review the Company sold 3072.24 tonnes (3318.23 tonnes) of waste cotton of whichexports accounted for 256.17 tonnes (392.95 tonnes).
The Wind Mills with aggregate installed capacity of 18.145 MW generated 187.56 lakhunits of Wind Electricity as against 212.62 lakh units in the last year. The entire powergenerated by Wind Mills was utilized for captive consumption at the textile mills.
The performances of the Spinning Unit in terms of profitability was less compared tolast year due to lack of demand and increased cotton price. And wind generation also lesscompared to last year its support to the extend of maintain the profitability.
The Company's non-spinning Technical Textile divisions overall performance in respectof revenue almost equal to last year in respect of profitability was reduced due to highmaterial and operational cost. The overall sales turnover of the
Company from all divisions aggregated to Rs 36655.37 Lakhs ( Rs 35111.33 Lakhs) ofwhich exports including merchant exports amounted to Rs 3315.83 Lakhs ( Rs 5690.11 Lakhs)the exports contributing 9.05% (16.21%) of the overall sales of the Company.
PRESENTATION OF FINANCIAL STATEMENTS
The financial statements for the year ended 31.3.2020 has been prepared in accordancewith the Indian Accounting Standard (IndAS) notified under section 133 of the CompaniesAct 2013 read with Companies Accounts Rules 2014 and other relevant provisions of theAct.
PROSPECTS FOR THE CURRENT YEAR
The Company has approached the COVID-19 challenges optimistically and in support of theGovernment initiatives to combat Corona Virus the Company has entered into the filed ofMedical Textiles has introduced the products like Protective Coverall and re-usable FaceMasks. The contribution from Lamination Coating and Garments Divisions are likely toimprove in the forth coming years.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
Covid-19 pandemic has partially affected the operational and financial performance ofthe company during the year under review. The impact of the same in the current financialyear 2020-21 is detailed in Management and Discussion Analysis.
TRANSFER TO RESERVES
During the year under review the Company has not transferred any amount to GeneralReserves.
CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of principal business of the Company during thefinancial year ended 31st March 2020.
During the year under review the Company has not made any fresh issue of shares.
TRANSFER OF UNCLAIMED DIVIDEND / SHARES TO INVESTOR EDUCATION AND PROTECTION FUND
The Company is in the process of transferring the unclaimed dividend pertaining to thefinancial year 2012-2013 and respective shares to the Investor Education and ProtectionFund and the details are hosted in the website of the company.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return as on 31st March 2020 pursuant to thesub-section (3) of Section 92 of the Companies Act 2013 which forms part of the report inForm MGT-9 is also enclosed as Annexure I and is Posted on the website of theCompany www.shivatex.in.
During the year under review Four Board Meetings of the Company were conducted. Thedetails of the same have been given in the Corporate Governance Report under Regulation 17of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 formingpart of this Report.
During the year under review your Company has complied with all the applicableSecretarial Standards issued by the Institute of Company Secretaries of India from time totime.
DIRECTORS Rs RESPONSIBILITY STATEMENT
As stipulated in Section 134 (5) of the Companies Act 2013 your Directors confirmthat:
a) Your Directors have followed in the preparation of the annual accounts theapplicable accounting standards with proper explanation relating to material departures;
b) Your Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are 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 and loss of the Company for that period;
c) Your Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) Your Directors have prepared the annual accounts on a going concern basis;
e) Your Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
f) Your Directors have devised proper system to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Smt S Sujana Abirami Director (DIN:06939773) is required to retire by rotation at theensuing Annual General Meeting she is eligible and seeks re-appointment.
As per SEBI (Listing Obligations and Disclosure Requirements) (Amendments)Regulations 2018 Sri S Marusamy (DIN:00610091) the Non-Executive Director who hasattained the age of seventy five years requires the approval of shareholders by way ofspecial resolution for continuation of his office as Director. Suitable resolutions alongwith explanatory statement and justification for his continuation as Director have beenset out in the Notice to the members.
The Company has obtained a Certificate from Sri R Dhanasekaran Company Secretary inPractice certifying that none of the Directors on the Board of the Company have beendebarred / disqualified from being appointed or continuing as Directors of the Company bythe Board / Ministry of Corporate Affairs or any such statutory authority.
DECLARATION OF INDEPENDENT DIRECTORS
All the Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013.
EVALUATION OF BOARD OF DIRECTORS
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 (10) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 IndependentDirectors at their meeting without participation of nonIndependent Directors andmanagement considered and evaluated the Boards Rs performance performance of theChairman and Managing Director.
The Board has carried out an annual evaluation of its own performance and performanceof the individual Directors as well as the Committees of Directors.
KEY MANAGERIAL PERSONNEL
The Company has not appointed any Key Managerial Personnel during the year underreview.
The Audit Committee comprises of
|1. Sri K N V Ramani ||- Chairman (Non- Executive Independent Director) |
|2. Sri A Dhananjayan ||- Member (Non- Executive Independent Director) |
|3. Sri D Satish Krishnan ||- Member (Non- Executive Independent Director) and |
|4. Sri S K Sundararaman ||- Member (Managing Director) |
The Board has implemented the suggestions made by the Audit Committee from time totime.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees governed under the provisions ofSection 186 of the Companies Act 2013. The details of the investments made by Company aregiven in the notes to the financial statements.
ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a Vigil Mechanism for Directors and employees to reportconcerns about unethical behaviour actual or suspected fraud or violation of theCompany's code of conduct or ethics. The policy has been posted in the website of theCompany viz. www.shivatex.in.
POLICY ON NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors have framed a policy setting out the framework for payment ofRemuneration to Directors Key Managerial Personnel and Senior Management Personnel of theCompany. The policy is explained as part of the Corporate Governance Report. The Committeeensures that:
1. The level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully.
2. Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks and
3. Remuneration to Directors Key Managerial Personnel and senior management involves abalance between fixed and incentive pay reflecting short and long term performanceobjectives appropriate to the working of the Company and its goals.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year in theordinary course of business were on arm's length basis. Hence provisions of Section 188 ofthe Companies Act 2013 are not attracted. Further no materially significant related partytransactions were made by the Company with Promoters Key Managerial Personnel or otherdesignated persons which may have potential conflict with interest of the company atlarge. Hence reporting under Form
AOC-2 is not required. Approval of Audit Committee was obtained for transactions ofrepetitive nature on annual basis. All related party transactions are placed before theAudit Committee and Board of Directors for their review. The policy on Related PartyTransactions is available in the website www.shivatex.in.
There were no transactions made with any person or entity belonging to Promoter /Promoter Group which holds 10% or more shareholding in the Company.
The Company has no subsidiaries during the year under review.
The Company has not accepted any public deposits within the meaning of Section 73 to 76of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014during the year under review.
In line with requirements of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 your Company is committed to the principles of good Corporate Governanceand continues to adhere good corporate governance practices consistently.
A separate section is given on Corporate Governance Management Discussion and Analysisalong with a certificate from the Practicing Company Secretary regarding compliance withconditions of Corporate Governance as stipulated under Regulation 34(3) read withSchedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015which forms part of this Annual Report.
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS
There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status and the Company's operation in future.
As per Section 139 of the Companies Act 2013 M/s Deloittee Haskin & Sells LLP -Chartered Accountants were appointed as Auditors for a term of 5 years in the 36thAnnual General Meeting held on 25ltl December 2017 and will hold office up to41st Annual General Meeting without requirement of further ratification everyyear as per the provisions of Companies (Amendment) Act 2017.
DETAILS OF FRAUDS REPORTED BY AUDITORS
There were no frauds reported by the Statutory Auditors under the provisions of Section143(12) of the Companies Act 2013 and rules made thereunder.
Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company appointedMr. R Dhanasekaran Practicing Company Secretary to undertake the Secretarial Audit of theCompany. The report is attached herewith as Annexure - II.
No adverse qualifications/comments have been made in the said report by the PracticingCompany Secretary.
Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time the Board of Directors on therecommendation of Audit Committee have appointed Sri M Nagarajan Cost AccountantCoimbatore as Cost Auditor to conduct Cost Audit of the Company for the financial year2020-2021 with remuneration. As required under the Companies Act 2013 a resolutionseeking members Rs approval for the remuneration payable to the Cost Auditor forms part ofthe Notice convening Annual General Meeting.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The Company has an Internal Audit Department which monitorsand evaluates the efficiency and adequacy of internal control system in the Company itscompliance with operating systems accounting procedures and policies at all locations ofthe Company. The scope and authority of the Internal Audit function is defined in theInternal Audit Manual. To maintain its objectivity and independence the Internal Auditfunction reports to the Chairman of the Audit Committee and to the Chairman & ManagingDirector.
Based on the report of internal audit function corrective actions are taken in therespective areas and thereby strengthen the controls. Significant audit observations andrecommendations along with corrective actions thereon are presented to the Audit Committeeof the Board.
The Company has appointed M/s. B.M. Associates as Internal Auditor to conduct theinternal audit of the Company.
STATEMENT ON RISK MANAGEMENT POLICY
Pursuant to Section 134(3) (n) of the Companies Act 2013 and Regulation 21 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasconstituted a Risk Management Committee. The Committee has developed a Risk ManagementPolicy and implemented the same. The details of the Committee and its terms of referenceare set out in the Corporate Governance Report forming part of the Boards Report. Atpresent the Company has not identified any element of risk which may threat the existenceof the Company.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Company has constituted Corporate Social Responsibility Committee (CSR) whichshall recommend to the Board the activities to be undertaken by the Company as specifiedin schedule VII of the Companies Act 2013 recommend the amount of expenditure to beincurred on such activities and monitor the CSR policy of the Company. The company hasfully spent the amount stipulated under the requirements of the Act.
Corporate Social Responsibility Committee constituted by the Board with effect from21.05.2014 presently comprised of the following Directors.
|1. Sri S V Kandasami ||- Chairman |
|2. Smt S Sujana Abirami ||- Director |
|3. Sri D Satish Krishnan ||- Independe |
The CSR activities and its related particulars is enclosed as Annexure III
I. Conservation of Energy and others -
The particulars required to be included in terms of Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 for the year ended31st March 2020 relating to Conservation of Energy etc. is enclosed as AnnexureIV.
II. Remuneration of Directors and other details -
The information required under Section 197(12) of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and formingpart of the Directors Rs Report for the year ended 31st March 2020 is providedas Annexure V to this report.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
During the year under review the human relations continued to be very cordial. TheBoard of Directors wishes to acknowledge the contribution of the employees at all levelsof the organization.
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 &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints for sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy.
|a. No. of Complaints filed during the Financial Year 2019-20 ||NIL |
|b. No. of Complaints disposed off during the Financial Year 2019-20 ||NIL |
|c. No. of Complaints pending as on end of the Financial Year 2019-2C ||NIL |
Your Directors acknowledge with gratitude the timely assistance and help extended bythe Bankers for having provided the required bank facilities. Your Directors wish to placeon record their appreciation of the contributions made by the employees at all levels forthe continued good performance of your company.
| ||By Order of the Board |
| ||S V ALAGAPPAN |
|Coimbatore ||CHAIRMAN |
|14th August 2020 ||(DIN : 00002450) |