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Sri Nachammai Cotton Mills Ltd.

BSE: 521234 Sector: Industrials
NSE: N.A. ISIN Code: INE443E01016
BSE 09:44 | 26 Sep 49.15 -0.85
(-1.70%)
OPEN

49.15

HIGH

49.15

LOW

49.15

NSE 05:30 | 01 Jan Sri Nachammai Cotton Mills Ltd
OPEN 49.15
PREVIOUS CLOSE 50.00
VOLUME 2
52-Week high 71.00
52-Week low 35.15
P/E 3.07
Mkt Cap.(Rs cr) 21
Buy Price 49.15
Buy Qty 65.00
Sell Price 51.95
Sell Qty 100.00
OPEN 49.15
CLOSE 50.00
VOLUME 2
52-Week high 71.00
52-Week low 35.15
P/E 3.07
Mkt Cap.(Rs cr) 21
Buy Price 49.15
Buy Qty 65.00
Sell Price 51.95
Sell Qty 100.00

Sri Nachammai Cotton Mills Ltd. (SRINACHACOTT) - Director Report

Company director report

Dear Shareholders

The Board of Directors of your Company is pleased to present the 41stAnnual Report on the business of the Company along with summary of financial statementsfor the year ended 31st March 2021. The report is prepared in accordance with theprovisions of the Companies Act 2013.

Financial Highlights

During the year under review performance of your company is as under:

Particulars 31.03.2021 31.03.2020
(Rs in lakhs) (Rs in lakhs)
Profit before finance costs and depreciation 800.09 744.51
Finance costs 494.31 631.67
Depreciation 235.33 239.98
Profit / (loss) before taxation 70.45 (127.14)
Less: Current tax (MAT) - -
MAT Credit Entitlement - -
Deferred tax (17.06) 29.97
Profit/(Loss) after tax 53.39 (97.17)
Add: Other comprehensive income
Remeasurement of post employment benefit obligations 4.49 (11.13)
Gain on fair valuation of investments 0.99 (0.83)
Income tax relating to these items (1.27) 2.98
Total other comprehensive income for the year 4.21 (8.98)
Total comprehensive income / (loss) for the year 57.60 (106.15)
Earnings per share Basic / Diluted 1.25 (2.26)

Dividend

The Company is unable to declare any Dividend on account of accumulatedlosses.

Review of Operations

During the year the company has made a turnover of Rs. 15760.82 (inlakhs) as against Rs. 14366.49 (in lakhs) in the previous year. The Company has incurred aprofit of Rs.57.60 Lakhs during the current year as compared to Net Loss of Rs.106.15Lakhs last year.

Management's Discussion and Analysis

As per the Regulation 34(1) (e) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the report on "Management Discussion andAnalysis" forms an integral part of Annual Report as Annexure-I

Deposits

Company has not accepted any deposits from public.

Directors and Key Managerial Personnel

i) Pursuant to the provisions of Section 152 of the Companies Act 2013Sri A.Annamalai retire by rotation and being eligible offers himself for reappointment andthe resolution is placed before the Shareholders for approval. A brief resume expertiseshareholding in the company and details of other entities in which the Director isinterested as stipulated under Regulation 36(3)(a) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and as per Secretarial Standard is provided inthe Notice attached.

ii) In view of the provisions of Regulation 17 (1A) of SEBI (ListingObligations and Disclosure Requirements) (Amendment) Regulations 2018 Smt. C.Renuka(DIN - 02209915) attains the age of 75 years on 16th July 2024 as a precautionary measurefor the continuation of Smt. C.Renuka (DIN - 02209915) as a Non- Executive NonIndependent Director consent of the Members is required by way of a Special Resolution.Hence the board recommends the members to apporove her appointment and continue herself asa as a Non Executive Non Independent Director of the Company.

A brief resume expertise shareholding in the company and details ofother entities in which the Director is interested as stipulated under Regulation 36(3)(a)of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and as perSecretarial Standard is provided in the Notice attached.

iii) At the Board Meeting held on 21st June 2021Smt.P.Umayal resigned as the Chairman of the Company due to her personal reasons but shecontinuous to be the Managing Director of the Company. In the same meeting SriP.Palaniappan was appointed as the Chairman of the Company with his consent by the Boardof Directors.

iv) Sri S.Ravichandran Independent Director of the Company whoattained the age of 75 years in January 2021 was approved to continue his tenure to be aNon-Executive Independent Director by passing Special Resolution at the Extra-ordinaryGeneral Meeting held on 15th July 2021. At the time when he attained the age of75 years due to the prevailing pandemic situation i.e. increasing COVID cases and some ofDirectors crossed the age of 70 years did not want to carry a General Meeting. Hence theBoard decided to conduct the meeting in the later date with a favorable situation. Hencethe meeting was held on 15th July 2021 and special resolution was passed in themeeting and the Company complied and filed all the necessary requirements and forms to befiled in this regard.

v) All the Directors of the Company have confirmed that they are notdisqualified from being appointed as directors in terms of Section 184(1) and Rule 9(1) ofthe Companies Act 2013.

vi) Pursuant to Regulation 34(3) and Schedule V para Clause (10)(i) ofSEBI( Listing Obligation and Disclosure Requirements) Regulations 2015 Certificate of NonDisqualification of Directors is received from the Practicing Company Secretary Sri M.R.LNarasimha is attached as Annexure-VI

Declaration by Independent Directors

The Company has received necessary declaration from each independentdirector under Section 149(7) of the Companies Act 2013 that he/she meets the criteriaof independence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25of SEBI LODR.

During the year the independent Directors were present in meeting ofIndependent Directors. The Independent Directors assessed the quality quantity andtimeliness of flow of information between the management and the Board and expressed thatthe Current flow of information and contents were adequate for the Board to effectivelyperform its duties.

Familiarization Programmes

The Company had conducted various sessions during the financial year tofamiliarize all the Directors including the Independent Directors with the updates ofCompany their rules responsibilities in the Company and the technology and the riskmanagement systems of the Company. Further the Directors are encouraged to attend thetraining programmes being organized by various regulators/ bodies/institutions on abovematters.

Number of Board Meetings and Committee Meetings

• The Board met four (4) times during the financial year on 29thJune 2020 10th September 2020 13th November 2020 and 04thFebruary 2021.

• The Audit Committee met four (4) times during the financial yearon 29th June 2020 10th September 2020 13th November2020 and 04th February 2021.

• The Stakeholders Relationship Committee met four (4) timesduring the financial year on 27th June 2020 10th September 202013th November 2020 and 04th February 2021.

• The Share Transfer Committee met two (2) times during thefinancial year on 08th December 2020 and 30th March 2021.

• The Nomination and Remuneration Committee met one (1) timeduring the financial year on 10th September 2021.

• The Independent Directors Meeting met one (1) time during thefinancial year on 04th February 2021.

Statutory Auditors

The Company's Auditors M/S.V.V.Soundararajan & CO. CharteredAccountants Salem hold office for a term of five years (5) commencing from the financialyear 2017-2022 till the conclusion of the Annual General Meeting to be held in the year2022.

The Auditors' Report for the year 2020-2021 does not contain anyqualification reservation or adverse remark. The auditors' report is enclosed with thefinancial statements in the Annual Report.

Secretarial Auditor

As required under Section 204 of the Act and Rules made there underSri M.R.L. Narasimha Practising Company Secretary was appointed to conduct theSecretarial Audit of the Company for the financial year 2020-2021. The Secretarial AuditReport for the financial year 2020-2021 forms part of the Annual Report as Annexure-VIIto the Board's Report.

Cost Auditor

Section 148 of the Companies Act 2013 pertaining to audit of CostRecords is applicable to the Company. Based on the recommendation of the Audit CommitteeSri.B.Venkateswar Cost Accountant was appointed as Cost Auditor of the Company for thefinancial year 2021-2022 and the remuneration payable to Cost Auditor is placed before theShareholders for ratification.

Internal Auditor

The Company has re-appointed Sri. H. Venugopal as the Internal Auditorof the Company for a further period of one year for the financial year 2021-2022. Thescope of work includes review of process for safeguarding the assets of the Companyreview of operational efficiency effectiveness of system and processes and assessing thestrength and weaknesses of internal control. Internal Auditor reports are placed beforethe Audit Committee on a regular basis for taking suitable action for improvementwherever required.

Subsidiaries Joint Ventures and Associates

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

Corporate Social Responsibility

Corporate Social Responsibility is not presently applicable as theCompany does not satisfy the conditions laid down in Section 135 with regard to net worthturnover and net profits.

Material Changes and Commitments

There have been no material changes and commitments between the end offinancial year (March 31 2021) and the date of the report affecting the financialposition of the Company.

Adequacy of Internal Financial Controls and Internal Control System

The Company has in place adequacy internal financial controls withreference to financial statements. During the year under review such controls were testedand no reportable material weakness in the design or operation was observed.

Company has established adequate Internal Control procedurescommensurate with the nature of its business and size of its operations and for ensuringthe orderly and efficient conduct of its business for safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information. No fraudwas reported during the financial year.

The Company has appointed Internal Auditor to observe the Internalcontrols whether the work flow of organization is being done through the approvedpolicies of the Company. In every quarter during the approval of financial statementsInternal Auditors will present the Internal Audit Report and Management Comments on theInternal Audit observation.

Particulars of Loan Guarantees and Investments under Section 186 -Details of Loan

Sl. Period of No making Loan Details of Lender Amount in Rs. Purpose for which the loan is to be utilized by the recipient Time period for which it is given Date of BR Rate of interest
1. 01.04.2020 to 31.03.2021 Supreme Yarn Spinners Pvt Ltd Door No.181 'VASANTHAM' 4th Cross Street New Fairlands Salem 636 016 65021000 Inter Corporate Loan Repayable on Demand 29.06.2020 10.09.2020 13.11.2020 04.02.2021 9%
2. 01.04.2020 to 31.03.2021 Raja Yarn Private Ltd Door No.181 'VASANTHAM' 4th Cross Street New Fairlands Salem 636 016 121126500 Inter Corporate Loan Repayable on Demand 29.06.2020 10.09.2020 13.11.2020 04.02.2021 5.25%

Investment made under Section 186 of the Companies Act 2013

Investment made by the Company is within the limits specified underSection 186 of the Companies Act 2013.

Significant & Material orders

No Significant and Materials orders have been passed by any Regulatoror Court or Tribunal which can have an impact on the going concern status and theCompany's operations in future.

Disclosure as required under Section 22 of Sexual Harassment of Workmenat Workplace (Prevention Prohibition and Redressal) Act 2013

As per the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 the Company has constituted an InternalComplaints Committee. During the Financial Year 2020-2021 no compliant was received beforethe committee.

Conservation of Energy Technology Absorption Exports and ForeignExchange earnings and outgo.

The information on Conservation of Energy Technology Absorption andForeign Exchange earnings and outgo stipulated under Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure- II

Corporate Governance

As per the new Regulation 27(2) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a Corporate Governance Report together withthe Certificate from the Company's Auditors confirming the compliance of conditions onCorporate Governance is given in Annexure-III

Copy of Annual Return

As per the requirements of Section 92(3) and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 (as amended) the copy of the AnnualReturn in the prescribed Form MGT-7 for the financial year ended March 31 2021 is placedon the company's website www.sncmindia.com.

Contracts or Arrangements with Related Parties

Transactions entered with related parties have been explained in Form AOC- 2 -Annexure - IV annexed with this report and forms part of this Report. Furtherpolicy on dealing with Related Party transactions has been uploaded on the Company'swebsite http.www.sncmindia.com.

Vigil Mechanism/Whistle Blower Policy

In pursuant to the provisions of Section 177(9) & (10) of theCompanies Act 2013 a Vigil Mechanism for Directors and employees to report genuineconcerns has been established.

The Vigil Mechanism Policy has been uploaded on the website of theCompany at http.www.sncmindia.com. The main objective of this policy is to ensuresustainable business growth with stability and to promote a pro-active approach inreporting evaluating and resolving risks associated with the business. In order toachieve the key objective the policy establishes a structure and disciplined approach torisk management in order to guide decisions on risk related issues.

Audit Committee

Audit Committee is in existence in accordance with the provisions ofSection 177 of the Companies Act 2013. The details relating to the composition meetingsand functions of the Committee are given in Corporate Governance Report. The Board hasaccepted recommendations of Audit Committee hence no disclosure required under Section177(8) of the Companies Act 2013.

Risk Management Policy

As per the Regulation 27(2) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board members were informed about risk assessment andminimization procedures after which the Board formally adopted steps for framingimplementing and monitoring the risk management plan for the company. All the results andevaluation has been communicated.

Board Evaluation

The Board of Directors has carried out an annual evaluation of its ownperformance board committees and individual directors pursuant to the provisions of theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.

The performance of the board was evaluated by the board after seekinginputs from all the directors on the basis of criteria such as the board composition andstructure effectiveness of board processes information and functioning etc. as providedby the guidance Note on Board Evaluation issued by the Securities and Exchange Board ofIndia on January 5 2017

The performance of the committees was evaluated by the board afterseeking inputs from the committee members on the basis of criteria such as the Compositionof committees effectiveness of committee meetings etc.

The Board and the Nomination and Remuneration Committee reviewed theperformance of individual directors on the basis of criteria such as contribution of theindividual director to the board and committee meetings like preparation on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc.

Nomination and Remuneration Policy

The Board has on the recommendation of the Nomination &Remuneration Committee framed the policy on director's appointment and remunerationincluding criteria for determining qualifications positive attributes independence of adirector and other matters as required under sub-section (3) of Section 178 of theCompanies Act 2013 which have been outlined in Nomination & Remuneration policyforming part of this Report.

The details of Remuneration to Directors are given in Annexure-V

Directors Responsibility Statement

In accordance with the provisions of Section 134(5) of the CompaniesAct 2013 your directors confirm that:

(a) in the preparation of the annual accounts the applicableaccounting standards has been followed along with proper explanation relating to materialdepartures;

(b) the Directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(d) the directors had prepared the annual accounts on a going concernbasis;

(e) have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively;

(f) the directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

Particulars of Employees

The disclosure referred to the Rule 5(2) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 does not apply to the Company as therewere no employees who are in receipt of remuneration in aggregate of more thanRs.10200000/- if employed throughout the year or Rs.850000/- per month if employedfor part of the year.

Details of top 10 employees based on their salary are disclosed in Annexure-VIII.

Listing

The Equity Shares of the Company are listed in BSE Limited and theCompany has duly paid the Annual listing fees for the year 2021-2022

M/s. Cameo Corporate Services Limited Chennai is the Registrar forproviding depository services through National Securities Depository Limited (NSDL) andCentral Depository Services (India) Limited (CDSL) for holding Shares in Electronicmode (De-mat) of our Shareholders and also is the Registrar for Share Transfer Servicesfor physical segment.

Acknowledgements

Your Directors wish to place on record their deep sense of appreciationfor the tremendous support from the Bankers M/s. Indian Overseas Bank the shareholdersand all our suppliers and customers. The Board also wishes to place on record theirappreciation for the contribution made by the employees at all levels.

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