Your Directors submit the following Report on the working of the Company for the yearended 31.03.2021.
After meeting all working expenses interest repairs to machinery and buildings theworking result of the company for the year 2020-21 is given below :-
| ||Year Ended |
| ||31.03.2021 ||31.03.2020 |
| ||Rs.in lakhs ||Rs.in lakhs |
|(Loss) before Interest and Depreciation ||605.40 ||1437.08 |
|Less / Add : Interest ||395.23 ||259.53 |
|Depreciation ||24.99 ||27.93 |
|(Loss) / Profit before Exceptional items ||185.18 ||1149.62 |
|Exceptional Items ||-5.48 ||23.20 |
|Current Tax ||15.98 ||24.48 |
|Deferred Tax Credit ||108.80 ||556.48 |
|Surplus/(Deficit) after Exceptional Item ||65.88 ||545.47 |
The turnover of the company for the year 2020-21 had been Rs.2165.11 lakhs againstRs.3210.93 lakhs in the previous year. The above figures includes Rs.1077.51 lakhsrelating to Real Estate Income. After charging depreciation interest and other overheadsthe company recorded a profit of Rs.185.18 lakhs which had resulted into Net Profit ofRs.65.88 lakhs after the adjustment of Exceptional items - Rs.5.48 lakhs and Current Taxamount and Deferred Tax Credit aggregating to Rs.124.78 and the same has been carried tothe Balance Sheet.
The year began with almost normal economic activity only to be marred by the resurgenceof covid infections beginning February 2021. Although it was initially concentrated in afew States of the Country it has spread quickly through the entire country.
The Company's Mill at Nagari (AP) did not experience any lock down during the secondwave. Hence its operation was not affected and the Capacity utilization was better andwould continue to be so provided the third wave were to be less severe owing topenetration of vaccination.
With a devastating second wave and the prediction of a third wave the Covid-19pandemic has been a game changer in more ways than one.
The Indian Textile Industry possesses inherent and unique strength such as abundance ofraw material presence of entire value chain competitive manufacturing costs andavailability of skilled man power. Such a conducive atmosphere would enable India as aviable competitive alternative to China.
The Production Linked Incentive Scheme (PLI) together with Mega Investment TextileParks (MITRA) as announced by the Government of India will make Indian manufacturersglobally competitive attract investments in the areas of core competency and cutting edgetechnology ensure efficiency create economy of scale enhance exports and make India anintegral part of the global supply chain. Emphasis of State-of-the-art infrastructurethrough MITRA will give our domestic manufacturers a level playing field in theinternational textile market and pave the way for India to become a global champion ofTextile exports across all segments.
Cotton yarn prices are seen ruling firm in view of surge in the raw material prices.Now that the Covid shut downs in various countries have ended or are coming to an endwhich could result in improvement in demand. It is expected that the textile industrywould see a gradual recovery in demand during the year 2021-22 as Covid worries ease anddiscretionary spending returns. The recovery in global and domestic demand could takeplace with large fiscal and accommodative monetary stimulus extended by the Governmentsand Central Banks that facilitate faster recovery.
Real Estate Development
The Covid-19 led lockdown has created multiple problems such as labour shortage delayin receipt of materials etc in executing the project. Earlier it was expected that theproject would be completed by middle of 2021. Because of strict lock down imposed by theState Government the completion got delayed by six months. It is hoped that it would bepossible to deliver the Villas by March 2022. Management is receiving a good response forthe Villas.
Management Discussion and Analysis
In terms of the provisions of Regulation 34(3) and Schedule-V of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 the Management Discussion andAnalysis is set out in this report. It contains an analysis on the performance of theindustry the Company Internal Control System and Risk management policy.
Board of Directors:
The composition of the Board of Directors of the Company is furnished in the CorporateGovernance Report annexed to this Report.
Sri.Ravichandran Dhamodaran (DIN : 00054538) Sri.R.Guru Chandrasekar (DIN : 08421861)and Sri.A. Surendran (DIN : 00765292) are appointed as Independent Directors at the 72ndAnnual General Meeting for a period of 5 years with effect from 27.09.2019. All theIndependent Directors have affirmed that they satisfy the criteria laid down underSec.149(6) of the Companies Act 2013 and Regulations 16(b) of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. Further the Company's code of conductsuitably incorporates the duties of Independent Directors as laid down in the Act.
In the opinion of the Board the Independent Directors of the Company fulfill theconditions specified in the Act and SEBI (LO & DR) Regulations 2015 and areindependent of the Management The Ministry of Corporate Affairs Govt. of India haslaunched the Independent Directors' databank and it has entrusted the Indian Institute ofCorporate Affairs with creating and operating such a data bank under the NotificationNo.GSR804(E) dt.22nd October 2019. All the existing Independent Directors are required toregister themselves in the data bank. Accordingly the Company's Independent Directorshave got themselves registered in the data bank for 5 (five) years.
Retirement by rotation:
Smt.L. Nagaswarna (DIN : 00051610) who has been appointed as a Wholetime Directorretires by rotation at the ensuing Annual General Meeting of the Company as per the termsof her appointment. The place so vacated by her has to be filled up at the same meeting.The retiring Director is eligible for re-appointment at the ensuing Annual GeneralMeeting. Accordingly a resolution to this effect is included in the Agenda forconsideration of members at the ensuing Annual General Meeting of the Company.
During the year Seven (7) Board Meetings were convened and held the details of whichare given in the Corporate Governance Report. The intervening period between twoconsecutive meetings was within the period prescribed under the Act.
Meeting of Independent Directors:
Pursuant to the provisions of the Companies Act 2013 (Para-VII(1) of Schedule-IV oneseparate meeting of independent directors without the attendance of Non-IndependentDirectors and Members of Management was held. During the year out of three twoindependent directors were present at this meeting. In the said meeting the independentdirectors assessed the quality quantity and timeliness of flow of information between themanagement and the Board and expressed that the current flow of information and contentswere adequate for the Board to effectively perform its duties.
The evaluation of all the Directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The evaluation process has been framed by theNomination and Remuneration Committee and approved by the Board. A questionnaireconsisting of certain criteria is adopted for reviewing the functioning and effectivenessof the Board and for identifying possible areas for improvement. Each Board member isrequested to evaluate the effectiveness of the Board dynamics and relationshipsinformation flow decision making of the Directors relationship with Stakeholders.Company performance company strategy and effectiveness of the whole Board and its variouscommittees on a scale of one to five.
Necessary feed back is provided for improvement in the performance of the Directors andthe functioning of the overall Board and the various committees.
Familiarisation Programme for Independent Directors :
In compliance with the requirements of Regulation 25(7) of the SEBI (LO & DR)Regulations 2015 the company has put in place a Familiarization Programme for theIndependent Directors to familiarize them with the company their roles rightsresponsibilities in the company nature of the industry in which the company operatesbusiness models Regulatory matters etc. Since the Independent Directors have beenregistered with the databank launched by the Ministry of Corporate Affairs Govt of IndiaNew Delhi they will be able to acquire knowledge from diverse resources develop distinctskills and assess their understanding on company operations regulations and compliance.
Key Managerial Personnel:
Sri.D.Lakshminarayanaswamy (DIN:00028118) Managing Director Smt.L.NagaswarnaWholetime Director (DIN:00051610) Sri.P. Muthuswamy Director-Operations (DIN :02651331) Sri.S.A.Subramanian as Company Secretary till 30.06.2021 and Smt.M.Srividya asCompany Secretary from 01.07.2021 and Sri.G.Krishnakumar as Chief Financial Officerconstitute Key Managerial Personnel of the Company.
The policy on appointment remuneration and evaluation criteria for Directors andSenior Management is as per the recommendation of the Nomination and RemunerationCommittee of the Board. The Company recognized that Compensation Policy is an importantand strategic tool in the achievement of vision and goals of the company. It is in keepingwith the performance of the individuals internal equity market trends and industrypractices legal requirements and appropriate governance standards. The Nomination andRemuneration Committee recommends the remuneration of Directors and Senior Managementpersonnel which is approved by the Board of Directors subject to the approval ofshareholders where necessary.
In terms of the provisions of Section 177 of the Act and Regulation 18 of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 the Audit Committee of theBoard was reconstituted to act in accordance with the terms of reference prescribedtherein. Detailed disclosure on composition terms of reference and meetings of the AuditCommittee are furnished in the Corporate Governance Report.
M/s.C.S.K.Prabhu & Co Chartered Accountants Coimbatore were appointed asStatutory Auditors at the 70th Annual General Meeting held on 28.09.2017 to hold suchOffice for a term of five consecutive financial years from the conclusion of 70th AnnualGeneral Meeting to the conclusion of the 75th Annual General Meeting to be held in theyear 2022 pursuant to the provisions of Section 139 141 and 142 of the Act read withcompanies (Audit & Auditors) Rules 2014. Under the Companies (Amendment) Act 2017 theClause relating to ratification of auditors' appointment by members has been deleted.
Ministry of Corporate Affairs (MCA) has vide Notification dated 31st December 2014amended the Companies (Cost Records and Audit) Rules 2014. Accordingly the rules apply tothe Companies which have turnover exceeding the prescribed limits. Since the Company'sturnover is less than the prescribed limit the company is exempt from maintenance of CostRecords and Audit thereof.
Smt.C.Jayanthi Practising Company Secretary was appointed to conduct the SecretarialAudit of the Company for the Financial year 2020-21 as required under Sec.204 of the Actand Rules made thereunder. The Secretarial Audit Report for the Financial Year 2020-21forms part of the Annual Report as annexure to the Board's Report.
The Board has appointed Sri.V.Prasanna Practising Company Secretary as SecretarialAuditor of the Company for three Financial Years from 2021-22 to 2023-24.
Internal Auditor :
The Company continues to engage Smt.Sasirekha Vengatesh Chartered Accountants asInternal Auditors of the Company. The scope of work includes review of processes forsafeguarding the assets of the company review of operational efficiency effectiveness ofsystems and processes and assessing the strength and weaknesses of internal control.Internal Auditors reports are placed before the Audit Committee on a regular basis fortaking suitable action for improvement wherever required.
Directors' Responsibility Statement:
As required under section 134 of the Act it is stated
a. that in the preparation of the annual accounts the applicable accounting standardshad been followed alongwith proper explanation relating to material departures.
b. that the Directors had selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year (i.e)31st March 2021 and of the profit of the company for that period.
c. that the directors had 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.
d. that the directors had prepared the annual accounts on a "going concern"basis.
e. that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
f. that the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Related Party Transactions:
All contracts / arrangements / transactions entered into by the company during theFinancial Year with related parties were in the ordinary course of business and on arm'slength basis. During the year the company had not entered into any contracts /arrangements / transactions with related parties which could be considered material inaccordance with the policy of the company on materiality of related party transactionsexcepting the transactions with two Related Parties in respect of which necessary approvalfrom the Members were obtained at the EGM held on 17.03.2021 as the aggregate value of thetransactions exceed the threshold monetary limits prescribed under the Act.
Statement giving details of the Contacts / arrangements / transactions with relatedparties is placed before the Audit Committee and the Board of Directors for their approvalon quarterly basis.
Corporate Social Responsibility :
The Company has constituted a Corporate Social Responsibility (CSR) Committee inaccordance with the provisions of Section 135 of the Companies Act 2013 comprising ofthree Directors including an Independent Director.
During the Financial Year 2020-21 the average profit for the last three years amountsto Rs.430 lakhs and the company was required to spend about Rs.8.6 lakhs. However thecompany had spent Rs.8.75 lakhs in the projects mentioned in the Annexure-I to theDirectors' Report.
Subsidiary and Associate Companies :
Doral Real Estates Private Ltd is a subsidiary of the company since 02.06.2017.Pursuant to the provisions of Sec.129 of the Act the consolidated financial statements ofthe company and the subsidiary had been included in the Annual Report for laying beforethe ensuing Annual General Meeting. It is not a material subsidiary.
Further along with the financial statement of the company a separate statementcontaining the salient features of the financial statement of the subsidiary is attachedto the Annual Report in form AOC1. Pursuant to Regulation 24(1) of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 Sri.R.Guru Chandrasekar (DIN: 0008421861) an Independent Director of the company has been appointed as Director in thesubsidiary company during the year 2019-20.
The company does not have any Associate Company.
The Company has not accepted any deposits within the meaning of Section 73 of the Actand the Rules framed thereunder.
Particulars of Directors Key Managerial Personnel and Employees:
The information required pursuant to Sec.197 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of DirectorsKey Management Personnel and employees of the Company are provided in the Annual Report.
A separate Report on Corporate Governance is attached to this report. A certificatefrom the Auditors of the company confirming compliance with the conditions of CorporateGovernance as stipulated under Regulation 27 and Part-E of Schedule-II of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 is attached to this report.
a. Details of loans guarantees and investments under the provisions of Sec.186 of theAct are given as Annexure.
b. The internal control systems and its adequacy are discussed in the ManagementDiscussion and Analysis annexed to the Directors Report.
c. There was no significant material order passed by the Regulators / Courts whichwould impact the going concern status of the company and its future operations.
d. The details forming part of the extract of the Annual Return in Form MGT-9 isannexed to the Directors' Report.
e. The Company has adopted the Whistle Blower Policy for Directors and Employees of theCompany to report concerns about the unethical behaviour actual or suspected fraud orviolation of the Company's Code of Conduct and ethics. The policy is provided pursuant toReg. 22 and Reg.46(2)e of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015. It also provides for adequate safeguard against victimization ofDirectors / Employees who avail of the mechanism and also provide for direct access to theChairman of the Audit Committee in exceptional cases. The policy is also disclosed in theCompany's Website.
f. The Company has adopted a code of conduct for the Board of Directors and SeniorManagement of the company and all of them have affirmed compliance of the sa me.
g. The Company has in place an Anti Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. Necessary mechanism has been put across the company in thisregard to cover all the women employees in the company.
h. As contemplated under Regulation 17(8) of SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 certificate from MD/CEO Sri.D.Lakshminarayanaswamy &CFO Sri.G.Krishnakumar was placed before the Board of Directors at the meeting held on29.06.2021.
i. Pursuant to Sec.134(3)(l) of the Act there was no significant material changes andcommitments affecting the financial position of the Company has taken place between theend of the financial year of the company and the date of Directors' Report.
Energy Conservation Technology Absorption and Foreign Exchange earnings & outgo :
The information on the above stipulated under Sec.134(3)(m) of the Act read with Rule 8of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure-II.
Our thanks are due to The South Indian Bank Ltd. for their support and assistance tomeet our business needs. The Directors appreciate the services rendered by the OfficersStaff and the employees of the Company. We pray for the Grace of Almighty Sri JaganathaPerumal for the prosperity of the Company.
| ||For and on behalf of the Board of Directors |
| ||of Sri Ramakrishna Mills (Coimbatore) Limited |
|Place : Coimbatore ||D. LAKSHMINARAYANASWAMY |
|Date : 29.06.2021 ||Chairman |
| ||(DIN : 00028118) |