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Siyaram Silk Mills Ltd.

BSE: 503811 Sector: Industrials
BSE 13:56 | 04 Mar 219.10 1.25






NSE 13:43 | 04 Mar 220.30 3.20






OPEN 217.10
52-Week high 229.70
52-Week low 94.00
Mkt Cap.(Rs cr) 1,026
Buy Price 218.75
Buy Qty 63.00
Sell Price 219.35
Sell Qty 8.00
OPEN 217.10
CLOSE 217.85
52-Week high 229.70
52-Week low 94.00
Mkt Cap.(Rs cr) 1,026
Buy Price 218.75
Buy Qty 63.00
Sell Price 219.35
Sell Qty 8.00

Siyaram Silk Mills Ltd. (SIYSIL) - Director Report

Company director report

To the Members

Your Directors have pleasure in presenting the 42nd Annual Report of the Company alongwith Audited Financial Statements for the year ended 31st March 2020.


(Rs in Lakhs)

Particulars 2019-20 2018-19
Net Turnover and other Income 173218 184295
Profit before Depreciation Exceptional Item and Tax 16038 22110
Less: Depreciation 7278 6189
Profit before Exceptional Item and Tax 8760 15921
Less : Exceptional Item - 472
Profit before Tax 8760 15449
Less: Tax Expense
Current Tax 2105 5138
Deferred Tax (514) 361
Income Tax related to earlier year - (166)
1591 5333
Profit after Tax 7169 10116
Add/(Less): Other Comprehensive Income (net of taxes) (112) 137
Total Comprehensive Income for the year 7057 10253


During the year under review the Total Income of your Company was Rs 173218 Lakhs ascompared to Rs 184295 Lakhs in the previous year. The net profit for the year stood atRs 7057 Lakhs against Rs 10253 Lakhs in the previous year.


During the year the Company has paid 1st Interim Dividend of 310% i.e. Rs 6.20 perEquity Share (including Special Dividend of 200% i.e. Rs 4.00 per Equity Share) and a 2ndInterim Dividend of 120% i.e. Rs 2.40 per Equity Share aggregating to Rs 8.60 per EquityShare of Rs 2/- each for the F.Y.2019-20 (previous year Dividend was Rs 4.40 perEquity Share of Rs 2/- each). No final dividend has been recommended on the Equity Sharesby the Board.


The Paid-up Share Capital of the Company as on 31st March 2020 was Rs 937.40Lakhs. During the year under review the Company has not issued shares with differentialvoting rights nor granted stock options nor sweat equity. As on 31st March 2020 none ofthe Directors of the Company hold convertible instruments in the Company.


The Company has not transferred any amount to General Reserves during the year underreview.


Current Year Global Economic Overview.

During the year under review the global economy was in the process of a synchronizeddownswing in 90% of the World economies. Escalating trade disputes and wide ranging Policydisputes impacted manufacturing activities trade flows and investments. Uncertainty aboutthe exact nature and timing of Brexit further added to uncertainty about European andBritish economic growth prospects. Despite all this the economic situation was justbeginning to stabilise but with the outbreak of Covid-19 pandemic all the economies of theWorld came to a total halt starting with China. Restrictions on movement of people goodsand services and containment measures began to have a draconic effect on the economies ofthe World in the last quarter of the year under review.

Current Year Indian Economic Overview.

During the year under review domestic demand has taken a breather. Several factorssuch as stagnating rural wages tightening lending conditions and rising unemploymentcontributed to low demand for goods and services. Additionally structural factors havecontributed to the sluggishness. Weak global demand affected export growth whileuncertainty impacted business investments as capital flow remained volatile.

On the supply side excess idle production capacities weakening corporate profits andinfrastructure bottlenecks have slowed down investment in production facilities. Moreovergovernment's incentives to stimulate the economy and poor revenue collections put pressureon the fiscal balance. Credit growth suffered as credit to consumer durables and theindustry at large shrunk. Weakening bank balance sheet rising non-performing assets andslowing informal sector lending have impacted the ability and willingness of financialinstitutions to lend which in turn has adversely affected the financial sector.

The spread of Covid -19 pandemic further damaged the already battered Indian Economy inthe last quarter of the year under review.

Indian Textile Industry Overview.

During the year under review the Indian Textile Industry amids a subdued demandscenario in the domestic as well as the international markets and intensifyingcompetition witnessed muted sales growth and moderation in profitability. The slightrecovery that was in sight was negated by the outbreak of Covid -19 pandemic inChina in December 2019 and then by the sudden lock down of the country implemented toprevent the spread of Covid-19 pandemic.

The difficult market conditions has resulted in drop in the topline as well as thebottomline of the Company.

Global Economic Future Outlook.

The International Monetary Fund(IMF) has warned this is the worst recession sincethe Great Depression which will dwarf the economic damage caused by the Depression. TheCovid-19 pandemic will shrink world output by 3% in 2020 and recovery depends criticallyon the pandemic being brought under control in the second half of 2020. During this crisismajor Central Banks have dramatically boosted the size of their Balance Sheets pumpingliquidity into the market at a pace never seem before in order to offset the shrinkage ofeconomy and credit market activity.

This is expected to tame inflation. If anything there is actually a risk of deflation.We have already seen volatility in oil prices mass unemployment shortages of someconsumer supplies and undermining of globalization as many countries have already engagedin protectionist action. Meanwhile some of the challenges to globalization that precededthe coronavirus crisis remain. However with every country providing financial package tostimulate industrial and financial activity it is expected we will see the back of thecrisis sooner or later.

Indian Economic Future Outlook.

The jolt from the coronavirus outbreak will weigh significantly on the IndianEconomic growth until the pandemic is brought under control. The prolonged financialstress on account of the Covid-19 pandemic among rural households weak job creation andmore recently a credit crunch among non-banking financial institutions have increased theprobability of a more entrenched weakening of the Indian Economy. The lockdown has broughtmanufacturing and services to a grinding halt prompting many to predict that the Indianeconomy may contract by more than 2 per cent in 2020-21. However stimulus packagesextended by the Government from time to time to support the economy should reduce thedepth and duration of India's growth slowdown.

Textile Industry Outlook.

The year ahead looks very grim for the Indian Textile Industry as both domesticconsumption as well as export demand would be badly affected at least in the 1st half of2020-21. Production activity would also be affected on account of shortage of raw materialand labour as well as on account of the credit crunch. Recovery in the 2nd half of 2020-21would be dependent on how the pandemic is controlled and on measures taken by theGovernment to revive the economy as well as the support it extends to the TextileIndustry.

Your Company has survived many a difficult times.

Your Company with its inherent strengths like visionary leadership versatile workforce well known Brands ultra modern manufacturing facilities aggressive marketingstrategies and well penetrated distribution network is confident to tide over thisdifficult phase too.

Internal Financial Control system.

Your Company has in place an adequate internal financial control system commensuratewith the size and complexity of its operations. Necessary checks and controls are in placeto ensure that all assets are safeguarded to detect and prevent errors and frauds andthat the transactions are properly verified adequately authorized correctly recorded andproperly reported. The Internal Auditors of the Company conduct Audit of variousdepartments to ensure that internal controls are in place and submit Quarterly Reports tothe Audit Committee. The Audit Committee regularly reviews these Reports and the Companywhen needed takes corrective actions. The Internal Auditors also audit the effectivenessof the Company's internal financial control system. No major inefficiencies were reported.

Human Resources/ Industrial Relations.

Your Company treats its Human Resources as its important asset and believes in itscontribution to the all-round growth of your Company. Your Company takes steps from timeto time to upgrade and enhance the quality of this asset and strives to maintain it inagile and responsive form. Your Company is an equal opportunity employer and practicesfair employment policies. Your Company is confident that its Human Capital willeffectively contribute to the long term value enhancement of the organization.

Your Directors further state that during the year under review there were no casesfiled pursuant to the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.

Industrial relations with staff and workmen during the year under review continued tobe cordial.

Key Financial Ratios

Ratios 2020 2019 Change
Debtors Turnover 4.74 4.46 6.28%
Inventory Turnover 4.00 4.27 (6.32%)
Interest Coverage Ratio 3.04 4.29 (29.14%)
Current Ratio 1.78 1.78 -
Debt Equity Ratio 0.13 0.18 (27.78%)
Operating Profit Margin % 3.34% 7.43% (55.05%)
Net Profit Margin % 4.22% 5.57% (24.24%)
Return on Net Worth % 9.35% 13.00% (28.08%)


(1) Above ratios are based on Standalone Financials of the Company.

(2) Lower Interest Coverage Ratio Operating Profit Margin Net Profit Margin andReturn on Net Worth is due to lower profitability during the year.

Forward Looking Statements.

Statement in the Management Discussion and Analysis describing the Company'sobjectives projections estimates expectations or predictions may be forward lookingstatements within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatcould make a difference to the Company's operations include raw material availability andprices cyclical demand and pricing in the Company's principal markets changes inGovernment regulations tax regimes economic developments within India and the countriesin which the Company conducts business and other incidental factors. other incidentalfactors.


A report on Corporate Governance as stipulated in the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI(LODR) Regulations 2015"/ "the Listing Regulations") together withCertificate of the Company confirming compliance of conditions of Corporate Governance asstipulated under the aforesaid regulations forms part of the Annual Report.


Directors appointment / re-appointment: Shri. Ashok M. Jalan Director retiresby rotation and being eligible offers himself for re-appointment. Your Directors commendhis re-appointment.

Shri. Sachindra N. Chaturvedi Shri. Deepak R. Shah Shri. Ashok N. Desai and Shri.Chetan S. Thakkar were appointed as Additional Directors by the Board w.e.f. 1st August2019 and hold office upto the date of the ensuing Annual General Meeting (AGM). They werealso appointed as Independent Directors for a period of 5(five) continuous years witheffect from 1st August 2019 till 31st July 2024 subject to approval of the members atthe AGM. Resolution for their appointment as a Director as well as Independent Director ofthe Company is proposed for the approval of the members at the ensuing AGM. Your Directorscommend their appointment.

Brief resume of Directors being appointed/ re-appointed as required by the SEBI (LODR)Regulations 2015 and Secretarial Standards on General Meetings are provided in theAnnexure to the notice convening the AGM of the Company.

During the year under review Smt. Ashadevi R. Poddar resigned as Executive Directoron expiry of her term of appointment and Shri. Harish N. Motiwalla Shri.

Mangesh D. Teli Shri. Shailesh S. Vaidya Shri. Ashok N. Garodia Shri. Dileep H.Shinde Shri. Pramod S. Jalan Shri. Tarun Kumar Govil Independent Directors ceased tobe Directors of the Company on expiry of their term of Office. Your Directors place onrecord their appreciation of the invaluable services rendered by them during theirassociation with the Company.

Declaration from Independent Directors.

All Independent Directors have given declaration 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.

Company's Policy on appointment and remuneration of Directors.

Appointment of Independent Directors.

All Independent Directors of the Company are appointed for a term of 5 years.Accordingly the Independent Directors viz. Smt. Mangala R. Prabhu holds office upto 24thMarch 2024 and Shri. Sachindra N. Chaturvedi Shri. Deepak R. Shah Shri. Ashok N. Desaiand Shri. Chetan S. Thakkar hold office upto 31st July 2024.

Criteria for appointment of Independent Directors.

The Independent Directors shall be of high integrity with relevant experience andexpertise in the fields of manufacturing marketing finance taxation law governanceand general management so as to have a diverse Board.

Criteria for appointment of Managing Directors/ Whole Time Directors.

The Nomination and Remuneration Committee shall identify persons of integrity whopossess relevant experience and expertise particularly in the Textile Industry leadershipqualities required for the position and shall take into consideration recommendation ifany received from any member of the Board.

Remuneration Policy.

The Company follows a policy on remuneration for Directors and Senior ManagementEmployees details of the same are given in the Corporate Governance Report.

Performance Evaluation.

Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theNomination and Remuneration Committee has laid down the criteria for evaluation of theperformance of Individual Directors the Board as a whole and also the SecretarialDepartment. Evaluation of performance is undertaken annually. The performance evaluationof the Chairman and the Non Independent Directors was carried out by the IndependentDirectors at a separately convened meeting held on 7th March 2020 at which theperformance of the Board as a whole was also evaluated and the performance of theSecretarial Department was also reviewed. The Company has implemented a system ofevaluation on the basis of a structured questionnaire which comprises evaluation criteriataking into consideration various performance related aspects. The performance evaluationof the Independent Directors was carried out by the entire Board (excluding the Directorbeing evaluated). The Directors expressed their satisfaction with the evaluation process.


The Board of Directors met 6(six) times during the year the details of which areprovided in the Corporate Governance Report.


The Board has the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

4. Corporate Social Responsibility Committee

5. Finance Committee

6. Share Transfer Committee

7. Risk Management Committee

8. Allotment Committee

The details of the Committees along with their composition number of meetings andattendance at the meetings are provided in the Corporate Governance Report.


As stipulated under Section 134(3)(c) of the Companies

Act 2013 your Directors confirm as under:-

i) that in the preparation of the accounts for the financial year ended 31st March2020 the applicable accounting standards have been followed along with proper explanationrelating to material departure if any;

ii) that the Directors have selected such accounting policies and applied themconsistently and made judgements and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2020and of the profit of the Company for the year under review;

iii) that the Directors have taken proper and sufficient care for maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

iv) that the Directors have prepared the accounts for the financial year on goingconcern basis.

v) the Directors have laid down internal financial controls which are adequate andwere operating effectively.

vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


Extract of the Annual Return in Form No. MGT - 9 as required under section 92 of theCompanies Act 2013 is annexed herewith as Annexure - I to this Report. In compliance withsection 134(3)(a) of the Act Form MGT – 9 will be uploaded on the Company's websiteand can be accessed at


During the year under review your Company has not accepted any fixed deposits andthere were no unclaimed deposits or interest thereon as on 31st March 2020.


Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are provided in the notes to the Standalone FinancialStatements.


The Company has a wholly owned foreign subsidiary namely Cadini S.R.L. Italy.Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 a statement containing salient features of the financialstatements of the subsidiary is given in Form AOC-I and forms part of the Annual Report.


The Consolidated Financial Statements of the Company are prepared in accordance withthe relevant Indian Accounting Standard issued by the Institute of Chartered Accountantsof India and forms part of the Annual Report.


The Company has framed a Whistle Blower Policy to deal with instances of fraud andmismanagement if any. The details of the Policy are given in the Corporate GovernanceReport and the Policy is posted on the Company's website at the link Final_Whistle_Blower_Policy.pdf


All related party transactions that were entered into during the financial year were inthe ordinary course of business and were on an arm's length basis. There are no materiallysignificant the Company with Promoters Directors Key Managerial Personnel or otherrelated parties which may have a potential conflict with the interest of the Company atlarge. During the year the Company has not entered into related party transactions whichcould be considered as material in accordance with the policy on Related PartyTransactions of the Company. Accordingly the disclosure of related party transactions asrequired under section 134(3)(h) of the Companies Act 2013 in Form AOC -2 is notapplicable to your Company.

All related party transactions for the year are placed before the Audit Committee aswell as before the Board for approval. The transactions entered into with related partiesare reviewed on a quarterly basis by the Audit Committee. The policy on Related PartyTransactions as approved by the Audit Committee and Board is uploaded on the Company'swebsite at the link pdf Members can refer to Note No. 42to the Standalone Financial Statements which sets out related party disclosures.


In line with the regulatory requirements the Company has framed a Risk ManagementPolicy to identify and assess the key business risk areas and to put in place a mechanismfor mitigation of risk. A detailed exercise is being carried out at regular intervals toidentify evaluate manage and monitor all business risks. The Board periodically reviewsthe risks and suggests steps to be taken to control and mitigate the same through aproperly defined framework.


There are no significant Regulators / Courts which would impact the going concernstatus of the Company and its future operations.


The spread of COVID-19 Pandemic has affected economic activity at both micro and macrolevel as well as the day to day life of every human. Due to COVID-19 situation there havebeen several restrictions imposed by the Governments across the globe on the travel goodsmovement and transportation to restrict its spread keeping in mind public health andsafety. On March 24 2020 the Government of India ordered a nationwide lockdown for 21days which further got extended till 30th June 2020 to prevent community spread ofCOVID-19 in India resulting in significant impacted the normal business operations of theCompany since March 2020 by way of interruption in production sales and other activities.Our production facilities have resumed partial operations however supply chain continuesto be disrupted due to the Lockdown. Even though we lost only around 52 days of productiontill resumption of partial operations it will impact revenues and profitability atleastrelated party transactions made by for 1st half of F.Y.2020-21. However we are confidentthat we can recoup the shortfall in subsequent quarters provided the spread of COVID-19Pandemic is controlled.

The Company is closely monitoring the impact on various aspects of its businessincluding its Customers / Vendors / Employees and other business partners. The Company hasmade assessment of liquidity position for the F.Y. 2020-21 including recoverability ofcarrying value of its assets such as loans Investment Inventories receivables etc. TheCompany expects to fully recover the carrying amount of these assets. The impactassessment of COVID – 19 is an ongoing process and may be different from thatenvisaged as at the approval of these financial statements given the uncertaintiesassociated with its nature and duration and the Company will continue to monitor allmaterial changes to the Company's environment.

There have been no other material changes or commitments affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the Report.


Information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8of The Companies (Accounts) Rules 2014 is given in Annexure –II to this Report.


The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in Annexure –III to this Report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014. The Policy is available on theCompany's website at the link


a. Statutory Auditors:

In the 39th AGM held on 9th September 2017 M/s. Songira & Associates CharteredAccountants (FRN.128085W) have been appointed as Statutory Auditors of the Company for aperiod of 5(five) years from the conclusion of the 39th AGM till the conclusion of the44th AGM of the Company to be held in the year 2022. Further the Report of the StatutoryAuditors M/s. Songira & Associates Chartered Accountants forms part of the AnnualReport. The observations made in the Auditors' Report are self-explanatory and thereforedo not call for any further comments.

b. Cost Auditors:

As per the provisions of section 148 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 framed thereunder the Cost Audit of the costrecords of the Company for the F.Y. 2019-20 was carried out by M/s. Bhuta &Associates Cost Accountants and the related Report will be filed on or before 27thSeptember 2020. The Cost Audit Report for the F.Y. 2018-19 was filed on 18th September2019.

The Board of Directors has appointed M/s. Bhuta & Associates Cost Accountants asCost Auditors to audit cost records of the Company for the F.Y. 2020-21. A resolutionseeking members' approval for the remuneration payable to them forms part of the Noticeconvening the AGM.

c. Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s. GMJ & Associates Company Secretaries to undertake Secretarial Auditfor the financial year 2019-20 in place of Mr. Jugalkishore Fatehchandka CompanySecretary in Practice. The Secretarial Audit Report is annexed herewith as Annexure –IV.

There is no secretarial audit qualification for the year under review.


The information required pursuant to Section 197(12) of the Companies Act 2013 readwith rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is attached as Annexure - V. In terms of the provisions of Section 197(12) of theAct read with sub-rule (2) and (3) of Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 a statement showing the norms and otherparticulars of employees drawing remuneration in excess of the limits set out in the saidRules are to be provided in the Report.

However having regard to the provisions of the first proviso to section 136(1) of theCompanies Act 2013 the details are excluded from the Report sent to members. The requiredinformation is available for inspection at the registered office/ corporate office and thesame shall be furnished on request.


There is no change in the nature of business of your Company during the year underreview.


The Business Responsibility Report as required by Regulation 34(2)(f) of the SEBI(LODR) Regulations 2015 is annexed as Annexure – VI and forms part of this Report.


Your Company is grateful for the continued co-operation and support extended to it bythe Government and Semi-Government Authorities Shareholders Financial InstitutionsBanks Customers and Vendors. Your Directors also express their warm appreciation for thededicated and sincere services rendered by the Employees of the Company.

For and on behalf of the Board of Directors
Place: Mumbai Chairman and Managing Director
Dated: 27th June 2020. DIN - 00090104