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SPL Industries Ltd.

BSE: 532651 Sector: Industrials
NSE: SPLIL ISIN Code: INE978G01016
BSE 00:00 | 25 Jan 64.20 2.10
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NSE 00:00 | 25 Jan 64.40 2.05
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OPEN 62.40
PREVIOUS CLOSE 62.10
VOLUME 31090
52-Week high 75.55
52-Week low 30.60
P/E 12.92
Mkt Cap.(Rs cr) 186
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 62.40
CLOSE 62.10
VOLUME 31090
52-Week high 75.55
52-Week low 30.60
P/E 12.92
Mkt Cap.(Rs cr) 186
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

SPL Industries Ltd. (SPLIL) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 30th Annual Report of the Company togetherwith the audited financial statements for the financial year ended March 31 2021.

1. Corporate Overview

Your company is into exports of cotton garments. The Company exports its productsmajorly to United States and European Markets.

2. Financial Highlights

As mandated by the Ministry of Corporate Affairs your company has prepared thefinancial statements for per Indian Accounting Standard (‘IND AS’) notifiedunder Sec 133 of the Companies Act 2013 read with notification no. G.S.R. 111(E) dated16.02.2015 as amended from time to time. The Standalone financial performance of theCompany for the financial year ended March 31 2021 are summarized below:

Particulars Standalone (In Lakhs)
For the year ended March 31 2021 For the year ended March 31 2020
Sales and other Income
Revenue from operations 11008.62 17885.18
Other Income 566.54 797.59
Total Revenue 11575.17 18682.77
Profit Before Interest and Depreciation 2141.66 3473.74
Less: Finance Charges 70.02 131.71
Depreciation 277.28 314.91
Net Profit Before Tax 1794.36 3027.12
Less: Provision for Tax 439.61 -100.28
Net Profit After Tax 1355.19 3127.60
Share Of Profit/ (Loss) Of Associates 0.00 0.00
Net Profit after share of profit of Associates 1355.19 3127.60
Earnings Per Share 4.67 10.78

3. Financial Performance

The Covid-19 pandemic has adversely impacted exports and with second order impact onthe domestic markets with both exports as well as domestic sales falling. The pandemic hasaffected the majority of India’s export market (the US and EU together constitute forapproximately 60% of the total apparel exports from India in value terms) causing ordercancellations/deferral of order leading to inventory build-up and expectation of slowerrealization of export receivables leading to higher working capital requirements.

Still the Company continues to strengthen its market leadership in garment exportacross US and European markets during the year amid global pandemic CoVID- 19. YourCompany continued to build good relationships with our customers. The quality in ourproducts is prime motto of our business. The manpower of the Company also remained apriority. During the year under report there was a sustained focus to increase strengthof your company and sharpen competitive advantages with a view towards long term valuecreation. reliant in terms of funds generation and debt servicing. A constant rise inturnover of the Company Your Company is financially is apparent. However your Directorsare expecting better results both in terms of operations of the Company and its financialposition.

4. Standalone Performance

On a standalone basis your company reported the revenue from operation and otherincome was Rs. 11575.17 lakhs against Rs. 18682.77 Lakhs for the previous financialyear. The net profit for the year was Rs. 1355.19 lakhs against Rs. 3127.40 lakhsreported in the previous year. The EPS from continuing operations for the reporting yearwas Rs. 4.67.

5. Directors Responsibility Statement

Pursuant to the requirement under Sec 134 (5) of the Act the Board of Directors of theCompany hereby state and confirm that;

i. in the preparation of the Annual accounts for the year ended March 31 2021 theapplicable accounting standard have been followed along with proper explanation relatingto the material departures if any;

ii. the Directors had 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 as at March 31 2021 and of the profit ofthe Company for the year ended on that date;

iii. that the Directors have taken proper and sufficient care for the 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. the annual accounts have been prepared on a going concern basis;

v. that proper internal financial controls were followed by the Company and that suchinternal financial controls are adequate and were operating effectively; and

vi. that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

6. Dividend and Transfer to Reserve

In order to conserve the resources your Board has decided not to declare any dividendfor the financial year 2020-21. Your Company does not propose to transfer amounts to thegeneral reserve out of the amount available for appropriation.

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 top five hundred listed entities based on market capitalization arerequired to formulate a Dividend Distribution Policy. However during the year yourcompany has remained to be a small cap company and hence this regulation does not apply tothe Company.

7. Share Capital

The paid-up equity share capital as on March 21 2021 was Rs. 29.00 Crores consistingof 29000004 equity shares of Rs. 10/- each fully paid-up.

8. Transfer to Investors Education and Protection Fund

The Company had no liability to transfer any unpaid/unclaimed equity shares and/ordividends up to the financial year 2011-12 to the Investor Education and Protection Fund(IEPF) established by the Central Government pursuant to Section 125 of Companies Act2013.

9. Change in Nature of Business

During the year under review there was no change in the nature of the business.

10. Listing

The Equity Shares of the Company continue to remain listed on BSE Limited and theNational Stock Exchange of India Limited.

11. Deposit from Public

The Company has not accepted any deposit within the meaning of Chapter V of theCompanies Act 2013 and the Rules framed thereunder.

12. Extract of Annual Return

As per the requirements of Sec 92 (3) of the Act and Rules framed thereunder theextract of annual return for the FY 2019-20 is given in Annexure A in theprescribed form MGT 9 which is a part of this report.

13. Secretarial Standards

The Company complies with all applicable secretarial standards.

14. Particulars of Loans Guarantees or Investment by the Company

During the year under review no loan guarantees and investments pursuant to theprovisions of Section 186 of the Act and SEBI (LODR) Regulations 2015 were made by theCompany. However loans and Investments covered under the provision of the said sectionare given in the notes to financial Statements.

15. Director and Key Managerial Personnel

During the year under review and between the end of the financial year and date of thisreport the following are the changes in directors and Key Managerial Personnel of theCompany.

(i) In accordance with Section 152(6) of the Companies Act 2013 and the Articles ofAssociation Mr. Vijay Kumar Jindal (DIN: 00231651) Director of the Company will beretiring at the ensuing Annual General Meeting and being eligible seeks re-appointment.Item seeking his re-appointment along with his detailed profile has been included in thenotice convening the AGM.

(ii) Mr. Sudeepta Ranjan Rout (DIN: 05106254) was appointed as an Additional Director(Non-Executive Independent Director) of the Company by the Board of Directors at themeeting held on July 10 2021 for a period of five years subject to the approval ofShareholders. The said period of five years begins from July 10 2021 and ends on July 092026. His consent and necessary disclosures for appointment as an Independent Director ofthe Company and that he meets the criteria of Independence the Board of Directors onJuly 10 2021 had approved his appointment as an Independent Director of the Companysubject to approval of the shareholders and has recommended his re-appointments forapproval of the shareholders in the forthcoming Annual General Meeting by way of OrdinaryResolution.

(iii) Mr. Vikash Jalan (DIN: 09234205) was appointed as an Additional Director(Non-Executive Independent Director) of the Company by the Board of Directors at themeeting held on July 10 2021 for a period of five years subject to the approval ofShareholders. The said period of five years begins from July 10 2021 and ends on July 092026. His consent and necessary disclosures for appointment as an Independent Director ofthe Company and that he meets the criteria of Independence the Board of Directors onJuly 10 2021 had approved his appointment as an Independent Director of the Companysubject to approval of the shareholders and has recommended his re-appointments forapproval of the shareholders in the forthcoming Annual General Meeting by way of OrdinaryResolution.

(iv) Mr. Varun Bansal (DIN: 09233433) was appointed as an Additional Director(Non-Executive Independent Director) of the Company by the Board of Directors at themeeting held on July 10 2021 for a period of five years subject to the approval ofShareholders. The said period of five years begins from July 10 2021 and ends on July 092021. His consent and necessary disclosures for appointment as an Independent Director ofthe Company and that he meets the criteria of Independence the Board of Directors onJuly 10 2021 had approved his appointment as an Independent Director of the Companysubject to approval of the shareholders and has recommended his re-appointments forapproval of the shareholders in the forthcoming Annual General Meeting by way of OrdinaryResolution.

(v) Mr. Mukesh Kumar Aggarwal (DIN: 00231651) is sought to be re-appointed as ManagingDirector of the Company effective from May 15 2021 till May 14 2026 based onrecommendation of Nomination and Remuneration Committee subject to the approval ofshareholders at the ensuing Annual General Meeting.

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 Reg.16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 asamended from time to time. Based on the confirmation/ disclosure received from thedirectors the Non-Executive Directors namely Mr. Chanderjeet Singh Bhatia Mr. Arun Kumarand Mr. Rajesh Goyal are treated as independent as on March 31 2021.

In the opinion of the Board the Independent Directors are persons with integrityexpertise and experience in the relevant functional self-assessment test in terms of Rule6(4) areas. Requirements of online proficiency of The Companies (Appointment andQualifications of Directors) Rules 2014 will be compiled within the prescribed timelineif the same is applicable to each of them.

During the year under review meetings of the Board of Directors and its Committeeswere held details of which are set out in the Corporate Governance Report which formspart of this Report.

16. Board Evaluation and Familiarization programme

One of the key functions of the Board is to monitor and review the Board EvaluationFramework. The Board works with the nomination and remuneration Committee to lay down theevaluation criteria for the performance of the Chairman/the Board Committees of theBoard executive non-executive and Independent directors through peer evaluationexcluding the director being evaluated. Pursuant to the provisions of the Companies Act2013 and SEBI Listing Regulations an annual performance evaluation of theBoard/Committees/Directors was undertaken.

The Board subsequently evaluated its own performance the working of its CommitteesIndividual Directors and Independent Directors without participation of the relevantDirector(s). The criteria for performance evaluation have been detailed in the CorporateGovernance Report which is to this Report.

Further the Independent Directors of the Company met on May 15 2021 to review theperformance of the Non executive directors Chairman of the Company and the access of thequality quantity and timeliness of flow of information between the Company management andthe

Board to effectively perform their duties.

17. Policy on Director’s Appointment and Remuneration and other details

The Company’s policy on directors’ appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided in Section 178(3) of the Act is available on our websitewww.spllimited.com. We affirm that remuneration paid to the directors is as per the termslaid out in the Nomination and Remuneration Policy of the Company.

Some of the salient features of which are as follows:

(i) To regulate the appointment and remuneration of directors key managerial personneland the senior management personnel;

(ii) To identify persons who are qualified to become directors as per the criteria/Board skill matrix identified by the Board;

(iii) To ensure proper composition of Board of Directors and Board diversity;

(iv) To ensure that level and composition of remuneration is reasonable andsufficientto attract retain and motivate directors key managerial personnel and seniormanagement and their remuneration involves a balance between fixed and incentive payreflecting short and long term performance objectives appropriate to Company’sworking and its goals.

18. Meeting of Board of Directors

Detailed composition of the Board of Directors its number of meetings held during theyear under review and other related details are set out in the Corporate Governance Reportwhich forms part of this Report. There have been no situations where the Board has notaccepted any recommendation of the Audit Committee.

19. Board Committees

Detailed composition of the mandatory Board committees namely Audit CommitteeNomination and Remuneration Committee CSR Committee Stakeholders Relationship Committeeits number of meetings held during the year under review and other related details are setout in the Corporate Governance Report which forms part of this Report.

There have been no situations where the Board has not accepted any recommendation ofthe Audit Committee.

20. Corporate Social Responsibility

Your Company believes in touching some of the important aspects of human life. TheCompany implements CSR through multiple trust/ societies through which it operates andefforts are revolved around several projects relating to Social Empowerment and WelfareInfrastructure Development Sustainable Livelihood Health Care and Education during theyear under review. These projects are in accordance with Schedule VII of the Act and itsCSR policy.

The brief report of the Corporate Social Responsibility (CSR) policy of the Company andthe initiatives undertaken by the Company on CSR activities during the year are set out inAnnexure- B of this report in the format prescribed in the Companies (CorporateSocial Responsibility Policy) Rules 2014. For other details regarding the CSR Committeeplease refer to the Corporate Governance Report which is a part of this report.

The Corporate Social Responsibility Policy (CSR Policy) indicating the activities to beundertaken by the Company are available on your Company’s website www.spllimited.com.

21. Management Discussion and Analysis

The Management Discussion and Analysis Report on the operations of the Company asrequired under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 asamended forms an integral part of this Report which is Annexed as Annexure- C

22. Business Responsibility Report

As required under Regulation 34 of the Listing Regulations the Business ResponsibilityReport is not mandatory over your Company hence the same does not form part of theDirector’s Report.

23. Corporate Governance

A separate section on parameters of statutory compliance evidencing the standardsexpected from a listed entity have been duly observed and from company secretary inpractice confirming compliance with the requirements of a report on Corporate Governanceas well as certificate SEBI (Listing Obligation and Disclosure Requirements) Regulations2015 forms part of this Report as Annexure- D

24. Vigil Mechanism

The Company has a Vigil Mechanism to report concern about unethical behavior actual orsuspected fraud or violation of Company’s code of conduct by the Directors andemployees. The vigil mechanism is disclosed in the website of the company viz.www.spllimited.com

25. Related Party Transaction

All transactions or arrangements entered into with the related parties for the yearunder review were on arm’s length basis and in the ordinary course of business. Hencethe provisions of Section 188 of the Companies Act 2013 and the Rules made thereunder arenot attracted. Accordingly the disclosure of Related Party Transactions as required underSection 134 (3) (h) of the Companies Act 2013 in Form AOC-2 is enclosed as Annexure-E.

None of the Directors has any pecuniary relationship or transactions vis--vis theCompany.

The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company viz. www. spllimited.com.

26. Internal Control System and their adequacy

Your Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/ revised standard operating procedures. TheCompany’s internal control system is commensurate with its size scale andcomplexities of its operations. The Internal and operational audit is entrusted with M/s.Vats & Associates a firm of Chartered Accountants. The main thrust of

Internal Audit is to test and review controls appraisal of risks and businessprocesses besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal financial control systems w.r.t. the financial statementsand suggests improvements to strengthen the same. The Company has a robust ManagementInformation System which is an integral part of the control mechanism. The AuditCommittee of the Board of Directors Independent Auditors and the Finance department haveperiodically been appraising the the corrective actions have been taken. The AuditCommittee places a key role in providing significant assurance to the Board of Directors.

27. Energy Conservation Technology Absorption Foreign Exchange Earnings and Outgo

The information on conservation of energy technology absorption and foreign exchangesearnings and outgo pursuant to Section 134 (3) (m) of the Companies Act 2013 read withthe Rule 8(3) of the Companies (accounts) Rules 2014 as amended from time to time isannexed as

Annexure - F and forms an integral part of this Report.

28. Business Risk Management

Your Company continues to strengthen its robust Risk Management Framework and the samewas reviewed by the Audit Committee periodically. The Committee meets for focusedinteraction with business identifying and prioritizing strategic operational risk andformulating appropriate mitigation strategies and conducting frequent review of theprogress on the management of the identified risk. Your company believes that managingrisk helps in maximizing return. The company’s approach in addressing business risksincludes periodical review of such risks and thereby mitigating it effectively. The riskmanagement framework is reviewed periodically by the Board and the Audit Committee. Someof the risks that the company is exposed to are:

The Company through its Audit Committee oversees the Risk Management process includingrisk identification implementation of the mitigation plans and risk reporting. The AuditCommittee’s objective is to ensure sustainable business growth with stability and topromote a proactive approach in evaluating resolving and reporting risks associated withthe business.

29. Auditors

a. Independent Auditors

As per the provisions of Section 139 of the Companies Act 2013 M/s Singhi Chugh &Kumar Chartered Accountants (FRN: 013613N) were appointed as Independent Auditors of thecompany for a period of 5 (Five) years in the 25th AGM of the Company held in 2016.Further the report of the Independent Auditors along with notes to financial statements isenclosed to this Annual Report. The Auditors’ Report does not contain anyqualification reservation disclaimer or adverse remarks.

b. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyre-appointed M/s. Agarwal S & Associates Practicing Company Secretaries Delhi toconduct the secretarial Audit for the financial year 2020-21. The Audit Report issued bythe Secretarial Auditors for the said Financial

Year forms part of this Report and is set out in Annexure G which is aself-explanatory. c. Internal Auditors

M/s. Vats & Associates Chartered Accountants continue to be the Internal Auditorsof your company for the financial year 2020-21.

30. Significant & Material Orders passed by the Regulators or Courts

There were no significant andmaterial orders passed by the Regulators and/or courts.

31. Environment & Safety

The Company is conscious of the importance of environment friendly and safe operations.The company’s policy requires conduct of operations in such a manner so as to ensuresafety of all concerned compliance of environmental regulations and preservation ofnatural resources.

As required by the Sexual Harassment of Women at Workplace (Prevention Prohibition andredressal) Act 2013 the Company has formulated and implemented a policy on prevention ofsexual harassment at the workplace with a mechanism of lodging complaints. The followingis a summary of sexual harassment complaints received and disposed off during thereporting period:

A. No. of complaints received: Nil

B. No. of complaints disposed off: Nil

C. No. of complaints pending: Nil

The company has complied with provisions relating to the constitution of InternalComplaints Committee under the Act. The Company has filed an Annual Report for the yearended December 31 2021 under the Act with the District officer.

31. Human Resources

Your Company believes that its manpower is an asset for the company and enjoys a strongbrand image as a preferred and caring employer. The ongoing focus is on attractingretaining and engaging talent with the objective of creating a robust talent pipeline atall levels. Value-based HR programmes have enabled your Company’s HR team to becomestrategic partners for the business. Your company laid stress to build a women-friendlyworkplace by introducing various initiatives for the development of women employees in theorganization. Your

Company has focused on internal talents and nurtures them through the culture ofcontinuous learning and development thereby building capabilities for creating futureleaders. Your company’s initiatives like a hiring freeze at some levels robusttalent review career development conservations and best-in- class developmentopportunities which will help to enhance the employees experience at your Company. TheCompany’s Human Resources plays a critical role in your Company’s talentmanagement process.

The Disclosure as required under Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is annexed as Annexure H andforms a part of this report. Information relating to remuneration of Directors underSection 197 read with Rule 5(2) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 has been given in Annexure- I to the Director’s Report.

32. Subsidiaries Associates and Joint-Ventures

During the Financial Year 2020-21 no company became and/or ceased to be an AssociateSubsidiary or Joint-Venture company of your Company.

33. Certificate of Non-Disqualification

Pursuant to Regulation 34(3) and Schedule V Para C clause (10) (i) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 certificate confirmingnon-disqualification of directors of the company forms part of the Corporate GovernanceReport.

34. General

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

a. there were no frauds reported by the auditors under provisions of the CompaniesAct 2013;

b. Issue of equity shares with differential rights as to dividend voting orotherwise;

c. There were no revisions in the financial statements;

d. Issue of share (including sweat equity shares) to employees of the Company underany scheme as permitted under any provision of Companies Act 2013.

e. Companies are not required to maintain cost records as specified by the CentralGovernment under section 148(1) of the Companies Act 2013.

Your Directors thank various Central and State Government Departments Organizationsand Agencies for the continued help and cooperation extended by them. The Directors alsogratefully acknowledge all stakeholders of the Company viz. customers members dealersvendors banks and other business partners for the excellent support received from themduring the year. The Directors place on record their sincere appreciation to all employeesof the Company for their unstinted commitment and continued contribution to the Company.

By order of the Board
For SPL Industries Limited
Mukesh Kumar Aggarwal
Managing Director
DIN 00231651
Place- Faridabad C-1/4 Sector-11 Faridabad
Date- August 13 2021 Haryana 121007

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