To the Members,
Your Directors' present the 31st (Thirty First) Board's Report together with the
Audited Statement of Accounts for the year ended 31st March, 2022.
1. FINANCIAL RESULTS
The financial highlights of your Company for the year ended 31st March 2022 are
summarized as follows:
|
|
(Rs. In Crores) |
|
FY 2021-22 |
FY 2020-21 |
| Revenue from Operations/Other Income |
143.56 |
148.47 |
| EBITDA |
19.60 |
(3.83) |
| Finance cost |
22.84 |
23.92 |
| Depreciation |
10.14 |
10.21 |
| Profit/(Loss)/before Tax |
(13.38) |
(37.96) |
| Profit/(Loss) for the year |
(13.38) |
(37.96) |
| Other Comprehensive Income (net of Tax) |
0.17 |
(2.77) |
| Total Comprehensive loss for the year |
(13.24) |
(40.05) |
2. FINANCIAL PERFORMANCE
The financial year gone by was a mixed bag, with most major economies rebounding from
the negative effects of COVID-19. However, commodity price volatility, soaring energy
prices, lingering supply chain challenges and geopolitical conflicts have made the
recovery increasingly fragile.
The performance of Textile Sector especially Spinning for FY 2021-22 was one of the
most encouraging in the recent past. The pandemic - induced challenges of FY 2020-21 were
followed by a demand surge in India's textile sector.
Rise in Textiles exports in FY 22 was owing to pent-up demand in the US and Europe and
China Plus One Policy followed by several countries. Factories in India were also not much
affected by the pandemic last year. During the FY22, most of the rise came from the United
States, which contributed to 27 per cent of India's textiles and apparel exports, followed
by 18 per cent by the European Union, 12 per cent by Bangladesh, and 6 per cent by UAE.
However, your company's performance continued to be affected due to liquidity stress
and working capital constraints pending approval of Resolution Proposal (RP) by company's
bankers -Your company was forced to operate the plants on contract manufacturing basis,
resulted in lower capacity utilisation and impacted the performance.
Whilst the Revenue for the FY22 was marginally lower over the previous year (Rs 143.56
Cr vs. Rs 148.47 Cr), the EBITDA has improved significantly to Rs 19.60 Cr as compared to
the Loss of Rs 3.83 Cr due to improved job work charges on account of buoyant market
conditions.
Finance cost was marginally lower at Rs 22.84 Cr as against Rs 23.92 Cr mainly due to
lower interest at 9% agreed to consider by Lenders in the Resolution Proposal w.e.f. Q4 of
FY22 against 14% charged up to Q3 FY22 on Term loan. Consequent to the aforesaid, the Net
loss before Tax for the FY22 was Lower at Rs 13.38 Cr. against higher net loss of Rs 37.96
Cr.
There are no material changes or commitments affecting the financial position of the
Company which have occurred between the end of the financial year and the date of this
Report other than the general global impact of ongoing conflict between Russia and Ukraine
on the domestic and international business operations of the Company and impact of
COVID-19 as detailed in this Report as well as Notes to the Financial Statements of the
Company. There is no change in your Company's business during the year under review
3. REVISED RESOLUTION PROPOSAL
As reported in the previous year FY21, the Consortium of Lenders have classified
accounts of your company as NPA on 31.3.2021 due to default in debt servicing. Company has
submitted a Restructuring/Resolution Plan (RP) to Lenders by proposing to sell company's
Tamil Nadu plant (subject to approval of Board, Shareholders, and other Regulatory
authorities) and from its sale consideration, regularise the account of Lenders as at
1.4.2021 and Restructure balance debts. This proposal was not approved by Lenders due to
disagreement amongst themselves in sharing the sale proceeds.
Your Company had to submit a Revised Restructuring/ Resolution Proposal to repay entire
outstanding Term debt as at 31.3.2022 from the sale proceeds of the Tamil Nadu plant and
convert outstanding Working Capital dues of Rs.66.68 crores in to Working capital Term
Loan (WCTL) which is to be repaid in 6 years after an initial moratorium of one year from
the date of implementation of Resolution Plan. Lenders in the Consortium meeting held on
14.3.2022 have agreed to consider the revised RP and mandated Lead bank to arrange
approval. Lead bank has carried out Techno Economic Viability Study (TEV) which confirmed
Techno Economic Viability of the RP and Credit Rating Agency CRISIL has awarded the
required RP4 rating for the said RP Lead banks vide its sanction letter of 28.7.2022 has
approved the RP and is in the process of obtaining consent of other Member banks to issue
NOC for sale of Tamil Nadu plant and implement the RP.
Your Company had obtained Members' approval in the AGM held on 29th September 2021 for
the proposed sale of company's Tamil Nadu Plant as per the Resolution proposal submitted
to Lenders as well as "Agreement" signed with the prospective Buyer. Your Board
will be now approaching Members at the ensuing 31st AGM to be held on 30th September 2022
to obtain approval of the sanction terms and conditions of Lead bank's approval on Revised
Resolution proposal vide its letter dt 28.7.2022 under RBI 's Prudential Framework for
Resolution of Stressed Assets Directions 2019 of 07.06.2019.
Post restructuring, company's remaining Kerala plant would continue to operate with
significantly reduced and sustainable level of debt, lower labour cost and improved
operational efficiency. This will enable the company to improve its EBITDA levels and from
the cash generation the residual debt (WCTL) can be serviced with ease.
4. VOLUNTARY DELISTING OF COMPANY'S EQUITY SHARES FROM THE NATIONAL STOCK EXCHANGE OF
INDIA LTD (NSE)
Pursuant to Regulation 6 (1) of the SEBI (Delisting of Equity Shares) Regulations,
2021, the Equity Shares of the Company have been Voluntarily Delisted from the National
Stock Exchange of India Ltd (NSE) w.e.f January 19, 2022. In terms of the approval, the
Company has agreed to redress the investors' grievances (if any) for a minimum period of
one year from the date of delisting.
5. DIVIDEND
In view of the losses for the financial year ended 31st March 2022, the Board of
Directors regret their inability to recommend any dividend for the year 2021-22.
6. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report on the operations of the Company, as
required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015 (hereinafter referred to as "Listing Regulations") is provided in a
separate section and forms an integral part of this Report.
7. PUBLIC DEPOSITS
The Company does not have "Deposits" as contemplated under Clause V of the
Companies Act 2013. Further, the company has not accepted any such deposits during the
year ended 31st March 2022.
8. CORPORATE GOVERNANCE
The Company has taken the requisite steps to comply with the recommendations concerning
Corporate Governance.
A separate statement on Corporate Governance together with a certificate from the
Practicing Company Secretary of the Company regarding compliance of conditions of
Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 forms part of this Annual Report.
9. DIRECTORS AND KEY MANAGERIAL PERSONS
There is no change in the composition of the Board of Directors and the Key Managerial
Personnel during the FY2021-22.
10. KEY MANAGERIAL PERSONNEL
Shri Umang Patodia, Managing Director, Shri T. Ravindran, Chief Financial Officer, and
Ms Veena Vishwanath Bhandary, Assistant Company Secretary and Compliance Officer were the
Key Managerial Personnel of your Company, in accordance with the provisions of Section 203
of the Companies Act 2013 during the year under review.
11. NUMBER OF MEETINGS OF THE BOARD
The Board of Directors met 4 (Four) times during the financial year 2021-22. The
details of the meetings of the Board of Directors of the Company convened and attended by
the Directors during the financial year 202122 are given in the Corporate Governance
Report which forms part of this Annual Report.
12. MEETING OF INDEPENDENT DIRECTORS
The Independent Directors met once during the Financial Year under review. The Meeting
was conducted without the presence of the Non-Independent Directors and members of
management.
13. DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors acknowledge the responsibility for ensuing compliances with the
provisions of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 in the
preparation of annual accounts for the year ended on 31st March, 2022 and state that:
i. in the preparation of the Annual Accounts, the applicable Indian Accounting
Standards have been followed and there are no material departures from the same;
ii. the Directors have selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of your company as at 31st March 2022 and of the profit
or loss of the company for that period;
iii. the Directors have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013
for safeguarding the assets of your company and for preventing and detecting fraud and
other irregularities;
iv. the Directors have prepared the Annual Accounts on a going concern basis
v. they have laid down internal financial controls to be followed by the company and
that such internal financial controls are adequate and are operating effectively; and
vi. the Directors have devised proper systems to ensure compliance with the provisions
of all applicable laws and that such systems were adequate and operating effectively.
14. BOARD EVALUATION
Pursuant to the provisions of Companies Act and Listing Regulations, annual evaluation
of the Board, the Directors individually as well as working of its constituted committees
has been carried out from time to time.
15. FAMILIARISATION PROGRAMME FOR DIRECTORS
At the time of appointing a Director, a formal letter of appointment is given to him,
which interalia explains the role, function, duties and responsibilities expected of him
as a Director of the Company. This is to provide insights into the Company to enable the
Independent Directors to understand its business in depth, to familiarize them with the
process, business and functionaries of the Company and to assist them in performing their
role as Independent Directors of the Company. The Director is also explained in detail the
Compliance required from him under the Companies Act, 2013, SEBI (LODR) Regulations, 2015
and other relevant regulations and affirmation taken with respect to the same.
The Chairman and the Management has also one to one discussion with the Directors to
familiarize with the company's operations
16. AUDITORS
M/s. L.U. Krishnan & Co. (Regn.No.001527S) Chartered Accountants, Chennai were
appointed as the Auditors of the Company at the 26th Annual General Meeting (AGM) held on
22nd September, 2017 to hold office till the conclusion of the 31st AGM of the Company for
a term of 5 years. The Auditors' Report for 2021-22 does not contain any qualifications,
reservations or adverse remarks.
Pursuant to the provisions of Section 139 of the Act, read with the Companies (Audit
and Auditors) Rules, 2014, and based on the recommendations of the Audit Committee, it is
proposed to reappoint M/s. L.U.Krishnan & Co. as Statutory Auditors for a second term
of five years from the conclusion of 31st AGM till the conclusion of 36th AGM of the
Company to be held in the year 2027, to examine and audit the accounts of the Company for
the financial years between 2022-23 and 2026-27. M/s. L.U.Krishnan & Co. have,
pursuant to Section 139 of the Act, provided written consent and furnished a certificate
regarding their eligibility for reappointment.
Resolution seeking Members' approval for the reappointment of M/s. L.U.Krishnan &
Co. as Statutory Auditors of the Company forms part of the Notice of 31st AGM of the
Company.
17. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made
there under, the Company has appointed Shri. MRL Narasimha (C.P No. 799), Practicing
Company Secretary to undertake the Secretarial Audit of the Company.
Secretarial Audit Report issued by Shri. MRL Narasimha, Practicing Company Secretary in
Form MR-3 forms part to this report Annexure I. The said report does not contain any
observation or qualification requiring explanation or adverse remark
18. COST AUDITORS
Pursuant to Section 148 of the Act read with Rule 14 of the Companies (Cost Records and
Audit) Amendment Rules, 2014, the cost audit records of the Company are required to be
audited. The Directors, on the recommendation of the Audit Committee, appointed M/s.
Hareesh K.N and Associates, Cost Accountants (Firm Reg. No. 101974) Cost Accountants, to
audit the cost accounts of the Company for the FY ending 31st March, 2023, on a
remuneration as mentioned in the Notice convening the 31st Annual General Meeting for
conducting the audit of the cost records maintained by the company.
19. EXTRACT OF ANNUAL RETURN
Pursuant to provisions of Section 134(3)(a) and Section 92(3) of the Companies Act,
2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the
extract of the Annual Return of the company for the Financial Year 31st March 2022 is
uploaded on the website of the company and can be accessed at the www.patspin.com
20. RELATED PARTY TRANSACTIONS
All transactions entered with related parties were on arm's length basis and in the
ordinary course of business. There were no materially significant transactions with the
related parties during the financial year and were not in conflict with the interest of
the company. Thus, a disclosure in Form AOC -2 in terms of Section 134 of the Companies
Act 2013 is not required. All related party transactions are placed before the Audit
Committee as also before the Board for approval.
The Board of Directors, as recommended by the Audit Committee, adopted a policy to
regulate transactions between the Company and its Related Parties, in compliance with the
applicable provisions of the Companies Act 2013, the Rules thereunder and the Listing
Regulations. This Policy has been uploaded on the website of the Company.
21. LOANS & INVESTMENTS
Details of loans, guarantees and Investments covered under the provisions of Section
186 of the Companies Act, 2013 are given in the Notes to Financial Statements forming part
of this report.
22. RISK MANAGEMENT
The company has laid down a well-defined risk management mechanism covering the risk
mapping and trend analysis, risk exposure, potential impact and risk mitigation process. A
detailed exercise is being carried out to identify, evaluate, manage and monitor business
risks. The Audit Committee and the Board periodically review the risks and suggest steps
to be taken to manage/ mitigate the same through a properly defined framework.
During the year, a risk analysis and assessment was conducted, and no major risks were
noticed, which may threaten the existence of the company
23. VIGIL MECHANISM/WHISTE BLOWER POLICY
The company has a Vigil Mechanism/Whistle Blower Policy to report genuine concerns or
grievances. The Vigil Mechanism (Whistle Blower Policy) has been posted on the company's
website (www.patspin.com).
24. CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per the provisions of Section 135 read with the Section 198 of the Companies Act
2013, the company do not have CSR obligation for the year 2021-22. Accordingly, there has
been no meeting of CSR Committee held during the year.
Even though the provisions of Section 135 (5) of Companies Act, 2013 regarding
Corporate Social Responsibility are not yet attracted, the company has been, over the
years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily
which goes much beyond mere philanthropic gestures and integrates interest, welfare and
aspirations of the community with those of the Company itself in an environment of
partnership for inclusive development.
25. CREDIT RATING
Lenders have classified account as sub-standard w.e.f 31.3.2021 due to default in debt
servicing and have accepted company's Revised Restructuring/Resolution proposal. Credit
rating Agency CRISIL Ratings Ltd has awarded RP-4 Rating in March 2022 for the Company's
Revised Resolution Plan.
26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Information required under section 134 (3) (m) of the Companies Act, 2013 read with
Rule 8 of the Companies (Accounts) Rules, 2014 is given in the Annexure II forming part of
this report
27. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an effective internal control and risk mitigation system designed to
effectively control the operations at its Head Office, Plants and Depot. The internal
control systems are designed to ensure that the financial and other records are reliable
for the preparation of financial statements and for maintaining assets. The Company has
well designed Standard Operating Procedures. Independent Internal Auditors conduct audit
covering a wide range of operational matters and ensure compliance with specified
standards. Planned periodic reviews are carried out by Internal Audit. The findings of
Internal Audit are reviewed by the top management and by the Audit Committee of the Board
of Directors.
Based on the deliberations with Statutory Auditors to ascertain their views on the
financial statements including the Financial Reporting System and Compliance to Accounting
Policies and Procedures, the Audit Committee was satisfied with the adequacy and
effectiveness of the Internal Controls and Systems followed by the company.
28. NOMINATION & REMUNERATION POLICY
The Board of Directors has framed a policy which lays down a framework in relation to
remuneration of Directors, Key Managerial Personnel and Senior Management of the Company.
This policy also lays down criteria for selection and appointment of Board Members. More
details on the same are given in the Corporate Governance Report.
29. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
In accordance with the applicable provisions of Companies Act, 2013 (hereinafter
referred to as "the Act") read with Investor Education and Protection Fund
(Accounting, Audit, Transfer and Refund) Rules, 2016 (hereinafter referred to as the
"IEPF Rules"), all unclaimed dividends are required to be transferred by the
Company to the IEPF, after completion of seven (7) years. Further, according to IEPF
Rules, the shares on which dividend has not been claimed by the shareholders for seven (7)
consecutive years or more shall be transferred to the demat account of the IEPF Authority.
The details relating to shares on which dividends were unclaimed are provided in the
General Shareholders Information section of Corporate Governance report forming part of
this Annual Report.
30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an anti-sexual harassment policy in line with the requirements
of the sexual harassment of women at the workplace (Prevention, Prohibition and Redressal)
Act, 2013. Internal Compliance Committee (ICC) has already been functioned for redressing
complaints received regarding sexual harassment. All employees (permanent, contractual,
temporary, trainees) are covered under this policy. The Company has not received any
complaints under this policy during the year ended 31st March, 2022.
31. PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 134 (3) (q) OF THE COMPANIES ACT, 2013
READ WITH RULE 5 (1) OF THE COMPANIES (APPOINTMENT AND REMUENRATION OF MANAGERIAL
PERSONNEL) RULES, 2014
The information required pursuant to section 134(3)(q) of the Companies Act, 2013 read
with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 in respect of employees of the company will be provided upon request. In terms
of Section 136 of the Act, the Report and Accounts are being sent to the Members and
others entitled thereto, excluding the information on employees' particulars which is
available for inspection by the Members at the Registered office of the company during
business hours on working days of the company up to the date of the ensuing Annual General
meeting. If any Member is interested in obtaining a copy thereof, such member may write to
the company in this regard.
32. PERSONNEL & INDUSTRIAL RELATIONS
Industrial Relations were cordial and satisfactory. There were no employees whose
particulars are to be given in terms of Section 134(3)(q) of the companies Act, 2013 read
with Rule 5(2) and 5(3) of the companies (Appointment and Remuneration of Managerial
personnel) Rules, 2014.
33. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant and material orders passed by the Regulators or Courts or
Tribunals that would impact the going concern status of your Company and its future
operations.
34. GENERAL
There was no issue of equity shares with differential rights as to dividend, voting or
otherwise: and; There was no issue of shares (including sweat equity shares) to the
employees of the company under any scheme.
35. ACKNOWLEDGEMENT
Your Directors place on record their gratitude to Central Bank of India, State Bank of
India, Export-Import Bank of India. The Karur Vysya Bank Limited, Punjab National Bank
(erstwhile Oriental Bank of Commerce), Bank of Maharashtra and Canara Bank and the
concerned Departments of the State and Central Government, valuable customer, Employees
and Shareholders for their assistance, support and co-operation to the Company.
|
For and on behalf of the Board of Directors |
|
B K PATODIA |
| Place: Mumbai |
Chairman |
| Date: 12.08.2022 |
(DIN:00003516) |
|