Dear Members,
The Directors of Pranavaditya Spinning Mills Limited ("your
Company / the Company") present the 32nd Annual Report on the business and
operations of your Company together with the Audited Financial Statements for the year
ended 31st March, 2022.
Financial Results
(Rs In Lakhs, except EPS)
Particulars |
2021-22 |
2020-21 |
Revenue from operations |
- |
520.08 |
Other Income |
396.34 |
80.15 |
Total Income |
396.34 |
600.23 |
EBIDTA |
194.29 |
(333.99) |
Less : Finance Cost |
0.69 |
7.72 |
Less : Depreciation and Amortisation expenses |
83.96 |
120.27 |
Profit / (Loss) before exceptional item and tax |
109.64 |
(461.98) |
Exceptional Items |
- |
(365.04) |
Profit / (Loss) before Tax |
109.64 |
(827.02) |
Provision for taxation - (Expense)/ Credit |
(37.40) |
236.16 |
Net Profit / (Loss) after tax |
72.24 |
(590.86) |
Add: Other Comprehensive Income |
0.12 |
30.03 |
Total Comprehensive Income |
72.36 |
(560.83) |
EPS (in Rs) |
0.38 |
(3.07) |
Due to separation of all workers under VRS/Separation scheme announced
by the Company, the production at the Company's factory stopped from August, 2020.
Further, the Board of Directors of the Company approved the scheme of amalgamation of the
Company with Indo Count Industries Limited, Holding Company and till amalgamation, the
Board approved leasing of land, building and machinery to the Holding Company and third
parties. Hence, there was no revenue from operations for FY 2021-22 and the total income
comprised of lease rentals received from the Holding Company and third parties.
For the year ended 31st March, 2022, Total Income amounted
to Rs 396.34 lakhs and Company achieved Net profit of Rs 72.24 lakhs as compared to loss
of Rs 590.86 lakhs in the previous year. The financial results for the year ended 31st
March, 2022 are not comparable with the financial results for the year ended 31st
March, 2021 due to aforementioned reasons.
Amalgamation of the Company with Indo Count Industries Limited, Holding
Company
During FY 2021-22, an application was filed with Hon'ble National
Company Law Tribunal, Mumbai bench ("NCLT") for the amalgamation of the Company
with Indo Count Industries Limited, Holding Company under sections 230-232 of the
Companies Act, 2013. Pursuant to the directions given by Hon'ble National Company Law
Tribunal (NCLT) vide its order dated 18th August, 2021, a meeting of the equity
shareholders of the Company was held on November 15, 2021 for consideration and approval
of the scheme of amalgamation and the resolution for the scheme of amalgamation of the
Company was passed with requisite majority. Thereafter, a petition was filed with Hon'ble
NCLT and as on the date of this report, petition is yet to be heard.
Upon the Scheme becoming effective, with effect from the appointed
date, the Business (along with all assets and liabilities thereof) of the Company shall be
transferred and vested with the transferee Company i.e. Indo Count Industries Limited
(ICIL) on a going concern basis. As a consideration for the amalgamation, the transferee/
the transferee Company / ICIL will issue its equity shares to the shareholders of the
Company/transferor company as on the record date in a share exchange ratio of 2:15 (i.e. 2
(Two) fully paid up equity shares of Rs 2/- each of Indo Count Industries Limited (ICIL)
would be issued to the Equity Shareholders of the company, for every 15 (Fifteen) equity
shares of Rs 10/- each fully paid up).
Dividend
In order to conserve the resources, the Board of Directors of your
Company has not recommended any dividend on the equity shares of the Company for the year
ended 31st March, 2022.
Transfer to Reserves
The Board of Directors has decided to retain the entire amount of
profit for FY 2021-22 in the statement of profit & loss.
Share Capital
There was no change in the capital structure of your Company during the
year under review. As on 31st March, 2022, the issued, subscribed and paid up
equity share capital of your Company is Rs 19,24,12,800/- comprising of 1,92,41,280 Equity
shares of Face Value of Rs 10/- each. During the financial year 2021-22, your Company has
not issued any equity shares with differential rights as to dividends, voting or
otherwise, or any convertible securities, warrants or Sweat Equity shares. Your Company
does not have any Employee Stock Option Scheme or Employee Stock Purchase Scheme.
Directors and Key Managerial Personnel
During the year under review, there has been no change in the
composition of the Board of Directors of the Company.
Pursuant to the provisions of Section 152 of the Companies Act, 2013
("Act") and articles of association of the Company, Mr. Anil Kumar Jain (DIN:
00086106) Non-Executive Non-Independent Director of the Company, retires by rotation at
the ensuing Annual General Meeting ("AGM") and being eligible, has offered
himself for the re-appointment. The Board recommends his re-appointment for consideration
at the ensuing AGM. As per Secretarial Standard - 2 and SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), brief
profile and other related information of Mr. Anil Kumar Jain, Director retiring by
rotation is provided in the Notice of ensuing AGM.
As on 31st March, 2022, Mr. Ashok G. Halasangi, Chief
Executive Officer, Mr. K. Muralidharan, Chief Financial Officer and Mrs. Amruta Avasare,
Company Secretary & Compliance Officer are the Key Managerial Personnel (KMP) of the
Company in terms of Section 203 of the Companies Act, 2013. There has been no change in
KMP during the year under review.
All the Independent Directors of the Company have given declarations
that they meet the criteria of independence as prescribed under Section 149(6) of the Act
and Regulation 16(1)(b) of the Listing Regulations and that they are not aware of any
circumstance or situation, which exist or may be reasonably anticipated, that could impair
or impact their ability to discharge duties with an objective independent judgment and
without any external influence. The said declarations were taken on record by the Board
after assessing due veracity of the same. In the opinion of the Board, all Independent
Directors are independent of the management.
Pursuant to Rule 6 of Companies (Appointment and Qualification of
Directors) Rules, 2014, all Independent Directors of the Company viz. Mr. S. K. Agrawal,
Dr. Ashok Desai, Ms. Kala Agarwal and Mr. L. Viswanathan have registered themselves in the
Independent Directors databank maintained with the Indian Institute of Corporate Affairs
(IICA). Further, all the Independent Directors have also cleared the proficiency test
conducted by IICA. In the opinion of the Board of Directors of the Company, all
Independent Directors possess high integrity, expertise and experience including the
proficiency required to discharge the duties and responsibilities as Directors of the
Company.
Number of Board Meetings
During the Financial Year 2021-22, Four (4) Board Meetings were held on
23rd April, 2021, 23rd July, 2021, 21st October, 2021 and
27th January, 2022 through Video conferencing. More details on Board Meetings
are provided in the Corporate Governance Report.
Company's policy on appointment and remuneration of Directors and Key
Managerial Personnel
Pursuant to Section 178 of the Companies Act, 2013, the Nomination and
Remuneration Committee (NRC) has formulated "Nomination and Remuneration Policy"
which deals inter-alia with the appointment and remuneration of Directors, Key Managerial
Personnel, Senior Management and other employees. The said policy is uploaded on the
website of the Company and web-link thereto is
https://www.pranavaditva.com/wp-content/uploads/2019/10/nomination-and-remuneration-policv-1.pdf
The salient features of the policy are as under:
I. Criteria for appointment:
a. NRC shall identify, ascertain and consider the integrity,
qualification, expertise and experience of the person for the appointment as a Director of
the Company and recommend to the Board his / her appointment. The Directors shall uphold
ethical standards of integrity and probity and shall exercise their duties and
responsibilities in the interest of the Company.
b. A person proposed to be appointed as Director should possess
adequate qualification, expertise and experience for the position he / she is considered
for appointment. They shall possess appropriate core skills/ expertise/ competencies/
knowledge in one or more fields of finance, law, management, sales and marketing,
administration, research and in the context of business and/or the sector in which the
company operates. The NRC has the discretion to decide whether qualifications, expertise
and experience possessed by a person are sufficient/ satisfactory for the concerned
position.
c. The Company shall comply with the provisions of the Act and Listing
Regulations and any other laws if applicable for appointment of Director of the Company.
The Company shall ensure that provisions relating to limit of maximum directorships, age,
term etc. are complied with.
II. Remuneration of the Whole Time / Executive Director(s) / Managing
Director:
a. The remuneration including commission payable to the Whole Time /
Executive Director(s) / Managing Director shall be determined and recommended by the NRC
to the Board for approval.
b. While determining the remuneration of the Executive Directors,
following factors shall be considered by the NRC/ Board:
Role played by the individual in managing the Company including
responding to the challenges faced by the Company
Individual performance and company performance so that
remuneration meets appropriate performance benchmarks
Reflective of size of the Company, complexity of the sector/
industry/ company's operations and the Company's financial position
Consistent with recognized best industry practices.
Peer remuneration
Remuneration involves balance between fixed and incentive pay
reflecting performance objectives appropriate to the working of the Company and its goals.
Remuneration is reasonable and sufficient to retain and motivate
directors to run the company successfully.
III. Remuneration to Non- Executive / Independent Directors:
Sitting Fees: Independent Directors are entitled for sitting fees for
attending meetings of the Board or Committee of the Board or for any other purposes as may
be decided by the Board, of such sum as may be approved by the Board of Directors of the
Company within the overall limits prescribed under the Act and the rules made thereunder,
Listing regulations or other applicable law.
Annual Evaluation of Board Performance and its Committee and Individual
Directors
Criteria of performance evaluation of the Board, Committees and
Directors are laid down by Nomination and Remuneration Committee (NRC) of the Company.
Further, pursuant to the provisions of Section 178(2) of the Companies Act, 2013 as
amended by the Companies (Amendment) Act, 2017, NRC decided to continue the existing
method of performance evaluation through circulation of performance evaluation sheets
based on SEBI Guidance Note dated 5th January, 2017 and that only Board should
carry out performance evaluation of the Board, its Committees and Individual Directors.
The performance evaluation sheets based on aforesaid SEBI Guidance
Note, containing the parameters of performance evaluation and rating scale was circulated
to all the Directors. The Directors rated the performance against each criteria.
Thereafter, consolidated score was arrived. Pursuant to the provisions of the Companies
Act, 2013 and Listing Regulations, the Board has carried out performance evaluation of its
own, the Board Committee and all Individual Directors in the aforesaid manner. The
performance of the Board, committees and individual directors was found satisfactory.
A meeting of the Independent Directors of the Company was held on 27th
January, 2022 in which Independent Directors inter-alia reviewed performance of
Non-Executive Independent Chairman and other Non-Independent Directors and the Board and
committees as a whole through performance evaluation sheets.
Directors' Responsibility Statement
Pursuant to the provisions of Section 134(3)(c) and 134(5) of the
Companies Act, 2013, your Directors, to the best of their knowledge and belief and
according to the information and explanations obtained by them, state and confirm that:
in the preparation of the annual accounts for the year ended 31st
March, 2022, the applicable accounting standards have been followed along with proper
explanation relating to material departures, if any;
such accounting policies as mentioned in the notes to the
Financial Statements for the year ended 31st March, 2022, have been selected
and applied consistently and judgments and estimates have been made that are reasonable
and prudent so as to give a true and fair view of the state of affairs of the Company as
at 31st March, 2022 and of the profit of the Company for the year ended on that
date;
proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013,
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
the annual financial statements for the year ended 31st
March, 2022, have been prepared on a going concern basis;
internal financial controls to be followed by the Company have
been laid down and that the said financial controls were adequate and operating
effectively;
proper systems to ensure compliance with the provisions of all
applicable laws have been devised and such systems were adequate and operating
effectively.
Audit Committee
During the year under review, there has been no change in the
composition of the Audit committee. As on 31st March, 2022, the Audit Committee
comprises of 4 members viz. Mr. S. K. Agrawal, Independent Director as Chairman, Dr. Ashok
Desai, Ms. Kala Agarwal, Independent Directors and Mr. Kamal Mitra, Non-Executive
Non-Independent Director. More details on the Audit Committee are given in Corporate
Governance Report. All the recommendations made by the Audit Committee during the year
under review were accepted by the Board.
Statutory Auditors
In accordance with the provisions of section 139 of the Companies Act,
2013, M/s. Suresh Kumar Mittal & Co., Chartered Accountants (Firm Registration No.
500063N) were appointed as the Statutory Auditors of the Company to hold office for a
period of 5 years i.e. from the conclusion of the 27th Annual General Meeting
(AGM) of the Company held on 21st August, 2017 upto the conclusion of the 32nd
AGM of the Company. Accordingly, the first term of existing statutory auditors is ending
on the conclusion of ensuing 32nd AGM of the Company. However, due to
professional pre-occupations, M/s. Suresh Kumar Mittal & Co. have expressed their
unwillingness to be re-appointed as the statutory auditors of the Company for a second
term at the ensuing Annual General Meeting.
The Board of Directors of the Company places on record its appreciation
for the services rendered by M/s. Suresh Kumar Mittal & Co., Chartered Accountants as
the Statutory Auditors of the Company.
Pursuant to the recommendation of the Audit Committee, the Board of
Directors of the Company at their meeting held on 28th April, 2022 proposed and
recommended to the members of the Company, appointment of M/s. JLN US & Co., Chartered
Accountants (Firm Registration Number: 101543W) as the Statutory Auditors of the Company
to hold office for a period of five consecutive years from the conclusion of 32nd
Annual General Meeting of the Company till the conclusion of 37th Annual
General Meeting of the Company, in place of existing statutory Auditors. The Company has
also received written consent and eligibility certificate from M/s. JLN US & Co.,
Chartered Accountants under Section 141 of the Act. M/s. JLN US & Co. also holds peer
review certificate issued by the Institute of Chartered Accountants of India. The
resolution for the appointment of M/s. JLN US & Co, Chartered Accountants, as
statutory auditors of the Company has been placed at the ensuing AGM for approval of
members of the Company.
Auditors' Report
The Auditors' Report on the audited standalone financial statements of
the Company for the year ended 31st March, 2022 issued by M/s. Suresh Kumar
Mittal and Co., Statutory Auditors of the Company forms part of this Annual Report. The
Auditors' Report does not contain any qualifications, reservations, adverse remarks or
disclaimer. In terms of the provisions of Section 143(12) of the Act, no frauds have been
reported by the Statutory Auditors in their report for the year under review. Notes to the
Financial Statements are self-explanatory and do not call for any further comments.
Secretarial Auditors and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Act, read with rules
thereunder, the Board at its meeting held on 27th January, 2022 had appointed
M/s. Kothari H. & Associates, Practicing Company Secretaries as Secretarial Auditors
to conduct the Secretarial Audit of the Company for the year ended 31st March,
2022. The Secretarial Audit Report issued by the Secretarial Auditors in Form No. MR-3 is
provided as an "Annexure 1" to this Report. The Secretarial Audit Report does
not contain any qualifications, reservations or adverse remarks.
Further, in terms of the provisions of Regulation 24A of the Listing
Regulations, M/s. Kothari H. & Associates, Practicing Company Secretaries have issued
the Annual Secretarial Compliance Report for the financial year ended 31st
March, 2022, thereby confirming compliance by the Company of the applicable SEBI
Regulations and circulars / guidelines issued thereunder.
Internal control systems and their adequacy
Your Company maintains adequate internal control system and procedures
commensurate with its size and nature of operations. The internal control systems are
designed to provide a reasonable assurance over reliability in financial reporting, ensure
appropriate authorization of transactions, safeguarding the assets of the Company and
prevent misuse/ losses and legal compliances. The Internal Audit reports are periodically
reviewed by the management and the Audit Committee and necessary improvements are
undertaken, if required.
Public Deposits
During the year under review, your Company has not accepted any
deposits from the public under Chapter V of the Act.
Subsidiaries
During the year under review, your Company does not have any
subsidiaries or joint ventures or associate companies as defined under the Act. However,
the Company has framed a policy for determining material subsidiaries, which can be
accessed at web-link
https://www.pranavaditva.com/wp-content/uploads/2019/10/psml-policv-on-material-subsidiaries.pdf
Corporate Governance Report
Your Company has adopted best practices of Corporate Governance and
complied with all the requirement of Corporate Governance laid down by SEBI. As per
Regulation 34(3) read with Schedule V of the Listing Regulations, a Corporate Governance
Report along with Statutory Auditors' Certificate confirming compliance of corporate
governance for the year ended 31st March, 2022 is provided separately and forms
integral part of this Annual Report.
Management and Discussion Analysis Report
Pursuant to Regulation 34 of the Listing Regulations, Management
Discussion and Analysis Report containing information inter-alia on industry trends, your
Company's performance, future outlook, opportunities and threats for the year ended 31st
March, 2022, is provided in a separate section forming integral part of this Annual
Report.
Annual Return
Pursuant to the amendments in Section 92(3) of the Companies Act, 2013
read with Rules thereunder and provisions of Section 134(3)(a) of the Act, Annual Returns
of the Company for FY 2020-21 and FY 2021-22 are hosted on the website of the Company
www.pranavaditva.com and web-links thereto are given below:
Annual Return for FY
2020-21:https://www.pranavaditya.com/wp-content/uploads/2021/09/form mat 7 2021 psml
website.pdf Annual Return for FY 2021-22:
https://www.pranavaditva.com/wp-content/uploads/2022/07/annual-retum-form-mat-7-2021-22.pdf
Related Party Transactions
All Related Party Transactions (RPT) entered during FY 2021-22 with
Holding Company were on arm's length basis. Prior approval of Audit Committee is obtained
for all Related Party Transactions. A statement of all Related Party Transactions is
reviewed by the Audit Committee and Board on quarterly basis.
During the year under review, the Company has entered into transactions
of Lease of land, buildings and machinery to Indo Count Industries Limited (ICIL), Holding
Company, which were material related party transactions (RPT). Prior approvals of Audit
Committee, the Board and Shareholders of the Company was obtained for said material RPT
The details of material related party transactions defined under Companies Act, 2013 are
provided in Form AOC -2, attached to this Report as "Annexure 2". Further, the
related party transactions as per IND AS 24 are also given in the notes to the financial
statements.
Your Company has adopted a policy on Related Party Transactions and
same is uploaded on the website of the Company at
https://www.pranavaditva.com/wp-content/uploads/2022/06/psml-policv-on-related-partv-transactions.pdf
Particulars of Loans, Investments, Guarantees, Securities under Section
186 of the Companies Act, 2013
During the year under review, pursuant to the provisions of Section 186
of the Companies Act, 2013, no loans were given to any person, nor any Guarantees or
securities were provided. Further, no investment was made in the securities of any other
body corporate.
Risk Management
The Company has devised Risk Management Policy which takes care of risk
identification, assessment and mitigation. Some of the risks faced by the Company are raw
material price risk, financial risk, foreign currency risk etc. The details of Risk
Management are included in Management Discussion and Analysis Report.
Vigil Mechanism / Whistle Blower Policy
Pursuant to the provisions of Section 177(10) of the Act and Regulation
22 of the Listing Regulations, your Company has established a vigil mechanism for the
Directors and employees of the Company to report concerns about unethical behaviour,
actual or suspected incidents of fraud or violation of Code of Conduct. The details of
Vigil Mechanism/Whistle Blower Policy are provided in the Corporate Governance Report. The
Vigil Mechanism/ Whistle Blower Policy may be accessed on the Company's website at
https://www.pranavaditya.com/wp-content/uploads/2019/10/psml - whistle blower policy vigil
mechanism.pdf
Policy on Prevention, Prohibition and Redressal of Sexual Harassment of
Women at Workplace
In order to prevent sexual harassment of women at workplace, your
Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and
has constituted an Internal Committee under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 to look into the complaints relating to
sexual harassment at workplace of any woman employee. During the year under review, your
Company has not received any complaint pertaining to sexual harassment and no complaint
was pending as on 31st March, 2022.
Conservation of Energy, Technology Absorption & Foreign Exchange
Earning & Outgo
Information on Conservation of Energy, Technology Absorption, Foreign
Exchange Earnings and Outgo required under Section 134(3)(m) of the Act, read with Rules
thereunder is given as "Annexure 3" forming part of this Report.
Particulars of Employees and related disclosures
The information regarding remuneration of Directors, Key Managerial
Personnel, median remuneration and other related disclosures required pursuant to Section
197 read with Companies (Appointment and Remuneration of Managerial Personnel), Rules,
2014 is provided as "Annexure 4-(I)" and "Annexure 4-(II)" to this
report.
Significant or Material orders passed by Regulators / Courts
During the year under review, no significant or material orders were
passed by the Regulators or Courts or Tribunals which impact the going concern status and
Company's operations in future.
Material Changes and Commitments affecting the Financial Position of
the Company
There are no material changes and commitments affecting the financial
position of the Company which have occurred between the end of the Financial Year 2021-22
to which the Financial Statements relate and the date of the Board's Report.
Secretarial Standards
During the year under review, your Company has complied with all the
applicable secretarial standards issued by the Institute of Company Secretaries of India.
The same has also been confirmed by Secretarial Auditors of the Company in the Secretarial
Audit Report.
General
1. During the year under review, cost audit was not applicable to the
Company; however, pursuant to the Order made by the Central Government for the maintenance
of cost records under Section 148(1) of the Act, the prescribed accounts and records have
been made maintained.
2. The provisions pertaining to Corporate Social Responsibility (CSR)
were not applicable to the Company during the year under review.
3. As required in terms of Secretarial Standard (SS)-4, it is hereby
confirmed that there is no corporate insolvency resolution process initiated under the
Insolvency and Bankruptcy Code, 2016 and no proceeding is pending under the said code.
Acknowledgements and Appreciation
Your Directors take this opportunity to thank Central and State
Governments, customers, suppliers, shareholders and bankers for their consistent support
and co-operation to the Company. Your directors also place on record sincere appreciation
for the contribution and commitment by all the employees of the Company.
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