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Zenith Fibres Ltd.

BSE: 514266 Sector: Industrials
NSE: N.A. ISIN Code: INE106C01013
BSE 00:00 | 26 Nov 54.10 0.25
(0.46%)
OPEN

55.00

HIGH

56.00

LOW

53.05

NSE 05:30 | 01 Jan Zenith Fibres Ltd
OPEN 55.00
PREVIOUS CLOSE 53.85
VOLUME 2679
52-Week high 73.75
52-Week low 35.00
P/E 8.48
Mkt Cap.(Rs cr) 21
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 55.00
CLOSE 53.85
VOLUME 2679
52-Week high 73.75
52-Week low 35.00
P/E 8.48
Mkt Cap.(Rs cr) 21
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Zenith Fibres Ltd. (ZENITHFIBRES) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 32nd Annual Report together with the AuditedFinancial Statements Independent Auditors' Report for the year ended March 31 2021.

FINANCIAL SUMMARY AND HIGHLIGHTS

A summary of the Company's financial results for the Financial Year 2020-21 is asunder:

(Rs. in lacs)

PARTICULARS 2020-21 2019-20
Revenue 2598.56 3037.32
Profit before Exceptional Item and Tax 93.12 260.98
Profit After Tax 68.62 197.83

DIVIDEND AND RESERVE

The Board of Directors has considered it prudent to not propose any dividend for theyear ended 31 March 2021 in light of the current pandemic situation and the uncertaintyarising thereof.

TRANSFER TO GENERAL RESERVE

During the year under review your Company has not proposed any amount to betransferred to General Reserve out of the net profits.

PERFORMANCE

The Company achieved operating revenue of Rs. 2393.06 Lacs and total revenue of Rs.2598.56 Lacs as compared to Rs. 2837.01 Lacs and Rs. 3037.32 Lacs last year. Profit beforetax is Rs. 93.12 Lacs and profit after tax stands at Rs. 68.62 Lacs during the year underreview as against Rs. 260.98 Lacs and Rs. 197.83 Lacs respectively in the previous year.The Wind Turbine generated revenue of Rs. 133.22 Lacs during the financial year 2020-21

PLANT OPERATIONS

The Company's PPSF plant and WTG both located in Gujarat are operating satisfactorily.

SHARE CAPITAL

During the year under review the Company has not issued any bonus shares equityshares neither any right shares with differential voting rights etc. nor granted anystock options or sweat equity

APPOINTMENT/REAPPOINTMENT/CESSATION OF DIRECTORS/ KMP

The following Directors / KMP were appointed/ reappointed / resigned during the year:Shri Amitabha Ghosh having DIN 00055962 passed away on 15th September 2020 due to COVID

Shri Aman Rungta having PAN AZTPR8467N and DIN 03585306 was appointed w.e.f. 1st April2020 as whole Time Director Finance. Shri Sanjeev Rungta having PAN ADKPR4281M and DIN00053602 appointed w.e.f. 1st June 2020 as Chief Executive officer Shri S.S Iyer havingPAN AAKPI2184H resigned w.e.f. 31st May2020 as Chief Executive officer

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 the Independent Directors have carried out an evaluation of the Board as well asevaluation of the working of its Audit and Nomination & Remuneration Committee. Themanner in which the evaluation has been carried out has been explained in the CorporateGovernance Report.

SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY

Please refer Form AOC 1 at "Annexure A".

COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors and KMP and also decides theirremuneration. The Remuneration Policy is spelt out in the Corporate Governance Report.

FINANCE/ACCOUNTS

The Company continued to face strong headwinds in the domestic market whereas there wascertain improvement on the exports front. Continuous endeavor is in place by themanagement to evaluate and

9 reduce expenses of the Company wherever practical for permanent long term financialbenefits. This has helped the Company vastly in fighting the current uncertain situation.The Company has in the past kept surplus funds invested prudently without any undue riskso as to ensure safety and liquidity of the funds.

CORPORATE GOVERNANCE

The Company continues to be committed to maintain the highest standards of CorporateGovernance and adhere to all requirements as set out by law. The report on CorporateGovernance as stipulated under SEBI (LODR) Regulations 2015 forms an integral part ofthis Report. The requisite certificate from the Auditors of the Company confirmingcompliance with the conditions of Corporate Governance is attached to the report onCorporate Governance.

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility (CSR) Committee has formulated and recommended tothe Board a CSR Policy indicating the activities to be undertaken by the Company whichhas been approved by the Board and hosted on the Company's website.

FIXED DEPOSITS

The Company has not accepted any deposit within the meaning of Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.

PARTICULARS OF LOANS GUARANTEES SECURITIES OR INVESTMENTS

The Company has not given any guarantees or securities covered under the provisions ofSection 186 of the Companies Act 2013. However the aggregate of loans and advancesgranted as also investments are within the limits of Section 186 of the Act. These havebeen disclosed in the Financial Statements.

DECLARATION GIVEN BY INDEPENDENT DIRECTORS

The Company has received declaration from all Independent Directors of the Company tothe effect that they meet the criteria of independence as stipulated u/s 149(6) of theAct.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that: a) in the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures; b) they have selected such accounting policies and applied them consistentlyand made judgments and estimates that were 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 of the Company for the year under review; c) they have taken proper andsufficient care for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; d) they have prepared the annual accounts on agoing concern basis; e) they have laid down internal financial controls to be followed bythe company and that such internal financial controls are adequate and were operatingeffectively; f) they have devised proper system to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF CONTRACTS OR ARRANGMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188OF THE COMPANIES ACT 2013

There are no materially significant related party transactions made by the company withPromoters KMP or other designated persons during the year which may have potentialconflict with interest of the Company at large. However detailed transactions aredisclosed under notes of financial statements.

AUDIT COMMITTEE RECOMMENDATIONS

During the year the Board has accepted all recommendations of Audit Committee andaccordingly no disclosure is required to be made in respect of any non-acceptance ofrecommendation.

AUDITORS a) Independent Auditor

The Independent Auditor M/s. Surendra Modiani &Associates Charted Accountanthaving F.R.N.126307W were appointed as Independent Auditors of the Company in the 28thAnnual General Meeting of the

Company for a period of five consecutive years based upon the declaration of theireligibility consent and terms of engagement. The Independent Auditors have not reportedany incident of fraud to the Audit Committee of the Company for Financial Year 2020-21. b)Internal Auditor

The Board of Directors has appointed M/s. Keyur Patel & Company as InternalAuditors of the Company. c) Secretarial Auditor

The Board of Directors appointed M/s. Upendra C Shukla Practicing Company Secretariesto conduct Secretarial Audit for the financial year 2021-22. The Secretarial Audit Reportof M/s. Upendra C Shukla Practicing Company Secretaries for the financial year ended2020-21 is annexed as Annexure B. The Secretarial Audit Report does not contain anyqualification reservation or adverse remark. During the year under review the Companyhas complied with all the applicable provisions of the Secretarial Standards.

EXTRACT OF ANNUAL RETURN

The copy of Annual Return as required under Section 92(3) and Section 134(3)(a) of theAct has been placed on the website of the Company. The web-link as required under the Actis as under www.zenith fibres.com

EXPLANATION/COMMENTS ON QUALIFICATION/RESERVATION/ADVERSE REMARK/DISCLAIMER BY THEAUDITORS IF ANY

Since there are no qualification/reservation/ adverse remark/disclaimer either by theAuditors or Secretarial Auditors in their respective report no explanation/comment isoffered.

CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all Employees in the course of day-to-day business operations ofthe company. The details of the Code are available on the website of the Company. All theBoard Members and the Senior Management Personnel have confirmed compliance with the Code.All KMP have been given appropriate briefing in this regard.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company has a Vigil Mechanism/Whistle Blower Policy to deal with instance of fraudand mismanagement if any. In staying true to our values of Strength Performance andPassion and in line with our vision the Company is committed to the high standards ofCorporate Governance and stakeholder responsibility.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading pursuant toSEBI (Prohibition & Insider Trading) Regulations 2015 with a view to regulate tradingin securities by the Directors and Designated Employees of the Company. The details of theCode are available on the website of the Company. All Directors and the DesignatedEmployees have confirmed compliance with the Code.

MEETINGS OF THE BOARD

Four meetings of the Board of Directors were held during the year. For details pleaserefer the Corporate Governance section of this Report.

RISK MANAGEMENT

The Company continuously keeps a watch regarding any possible risk threatening theexistence of the Company and ensures necessary mitigation of the same.

DETAILS OF SIGNIFICANT & MATERIAL ORDERS IMPACTING THE GOING CONCERNSTATUS/COMPANY'S OPERATIONS IN FUTURE

No significant/material orders have been passed by the regulators or courts ortribunals impacting the going concern status of the Company or company's operations infuture.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 the company has proper system to receive thecomplaint and constituted Internal Complaints Committee. During the year no complaint wasreceived from any employee.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is as per "Annexure C" to this Report.

Information required under Section 197 read with rules 5(2)(i) & 5(3) of Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014 is not attached.Members interested in inspecting these particulars may do so at the Registered Office ofthe Company from 7 days before and upto one day before of the said AGM during normalbusiness hours on working days.

None of the employees was in receipt of remuneration exceeding `850000/- p.m. or Rs.10200000/- p.a.

MANAGEMEMNT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report for the year under review as stipulated underRegulations 34 and Schedule V of the SEBI (LODR) Regulations 2015 is as under:

1. Industry Structure and Development

During the year under review there was somewhat contraction in the off take of PPSF inthe country for the Company. At the same time after years of efforts the exports fronthas yielded benefits and reasonably long term orders have materialized. Efforts arefurther afoot to add other customers with niche quality products. The export market holdslarger potential and all efforts are afoot to increase sales on this front.

2. Segment wise Operational Performance

The Company operates manufacturing of Manmade Fibres and power generation through WindTurbine. Performances in terms of profits are commensurate to the production and sales androutine increase in costs:

Production of Fibres during the year was 1584.28 MT (P.Y. 2036.14 MT) and Sales ofFibres during the year was 1671.04 MT (P.Y. 1949.87 MT) Sales of Fibres during the yearwas Rs 2393.06Lacs (P.Y. 2837.01) and Profit after tax was Rs 68.61 lacs (P.Y. 197.83lacs) Exports were786.58MT (P.Y. 816.61MT) and sales of Yarn were 395.20 MT (P.Y.469.22MT).

3. Quality & Future Outlook

The outlook for the PPSF is encouraging overall. Efforts are continually underway forgrowth in the international market whereby substantial potential exists. Product qualityof the company is in consonance with international standards and all efforts are made toadhere to the same.

4. Threats and Concerns

The Company is committed to manufacture and deliver quality products strictly as perrequirement of the customer. Constant feedback from the customers are received and allefforts made for continuous improvement in process performance and product qualitywherever required. With established production base of almost three decades the Companyis in a position to maintain production and supply of quality products smoothly. Thistestifies to the fact that there is virtually nil rejections of the Company's products.The Company has benefit of its long standing with its customers and can match the pricessuitably as per pricing policy as and when required. For the above reasons no majorthreat is overseen and the Company is confident to face any threat from the competition.The Company is also maintaining healthy liquidity to meet any unforeseen exigencies.

5. Internal Control Systems and their adequacy

The Company has appropriate Internal Control Systems for business processes financialreporting & controls compliance with applicable laws regulations etc. The Companyhas appointed statutory auditors to evaluate Internal Control System. Regular internalaudits and checks ensure that system and procedures are continuously improved. The AuditCommittee reviews the adequacy and effectiveness of Internal Control Systems and suggestsways of further strengthening them from time to time.

6. Human Resources and Industrial Relations

The Company has adequate and qualified human resources and enjoys cordial relationswith its employees. Numbers of employees were 68 as on 31st March 2021. The Board ofDirectors wishes to place on record its appreciation for the contribution made by all theemployees at all levels during the year.

7. Cautionary Statement

Statements in the Annual Report particularly those which relate to ManagementDiscussion and Analysis may constitute forward looking statements within the meaning ofapplicable laws and regulations. Although the expectations are based on reasonableassumption the actual results might differ.

INDUSTRIAL RELATIONS

Industrial relations remained cordial throughout the year.

CONSERVATION OF ENERGY/TECHNOLOGY ABSORPTION AS WELL AS FOREIGN EXCHANGE EARNINGS ANDOUTGO

The Company has not imported any foreign technology and hence the company does nothave any information to offer in respect of Technology Absorption. However information inrespect of Conservation of Energy & Foreign Exchange Earnings and outgo is as per"Annexure-D".

The Company had completed all formalities regarding acquisition of Wind TurbineGenerator and the financial benefits from the same heave started materializing during theyear under review.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY IFANY DURING THE PERIOD FROM 31ST MARCH 2021 TO THE DATE OF THE REPORT

There is no material change/commitment affecting the financial position of the Companyduring the period from the end of the financial year on 31st March 2021 to the date ofthe Report

ACKNOWLEDGEMENTS

The Company would like to thank all the Stakeholders Bankers Employees includinginter alia Suppliers Vendors and Investors and also place on record its appreciation toall the valuable customers for their consistent unstinted support throughout the year.

On behalf of the Board of Directors
Sanjeev Rungta
Date: 7/8/2021 Executive Chairman
Place: Vadodara DIN:00053602

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