Dear Members,
Your Directors have pleasure in presenting the 8th Annual Report
together with Audited Financial Statements of the Company for the year ended 31stMarch,
2023. The Financial Results are summarized and given below:
| Financial Results |
2022 - 23 |
2021 - 22 |
| Total Income |
16037.92 |
21362.13 |
| Profit/(Loss)before Interest and Depreciation |
(46.87) |
3100.36 |
| Less: Interest |
95.15 |
78.88 |
| Profit before Depreciation |
(142.02) |
3021.48 |
| Less: Depreciation |
605.21 |
571.07 |
| Profit/(loss) before Tax |
(747.23) |
2450.41 |
| Less: Provision for Income Tax |
|
|
| - Current Tax |
- |
705.70 |
| - Prior Year Tax |
15.97 |
31.32 |
| - Deferred Tax Liability (Net) written back |
(47.39) |
(52.47) |
| Profit/(loss) after Tax |
(715.81) |
1765.86 |
| Other Comprehensive income |
33.17 |
20.21 |
| Total Comprehensive Income/ (Loss) for the year |
(682.64) |
1786.07 |
DIVIDEND
Your directors have not recommended any Dividend for the year under
review.
PRESENTATION OF FINANCIAL STATEMENTS
The Financial Statements for the year ended 31st March, 2023 have been
prepared in accordance with the Indian Accounting Standard (Ind AS) notified under Section
133 of the Companies Act, 2013 (herein after referred to as “the Act”) read with
Companies (Accounts) Rules, 2014 and other relevant provisions of the Act.
INDUSTRY OVERVIEW
The financial performance of the company for the year under review has
mirrored the adverse economic condition which prevailed in the economy, affecting the
textile industry in general. The Geo political tensions, due to Russia-Ukraine war, have
impacted the export of Tirupur Hosiery Garments, resulting in excess supply of cotton yarn
in domestic market leading to substantial price reduction in selling price of yarn. Adding
to this, unexpected fluctuations in cotton prices, the Spinning Mills had a negative
impact on the financial performance of the financial year 2022-23.
REVIEW OF OPERATIONS
During the year under review, the Spinning Unit produced 4370.28 tonnes
(Last Year 6514.85 tonnes) of cotton yarn and 1403.11 tonnes (Last Year 1918.25 tonnes) of
waste cotton. The Spinning unit sold 4392.33 tonnes (Last Year 6469.61 tonnes) of cotton
yarn and 1463.74 tonnes (Last Year 1875.41 tonnes) of waste cotton.
The significant drop in production and sale of yarn was due to sluggish
demand for export of garments and yarn, resulting in low off take from customers /
exporters of garments.
The Wind Mills with aggregate installed capacity of 10.65 MW generated
156.28 lakh units (Last Year 157.82 lakh units) of Wind Electricity during the year. There
has been a marginal decrease in wind power generation by 0.98 % as compared with previous
year generation.The power generated by the wind mills were utilized for captive
consumption at the textile mill, except banked quantity of 28.94 Lakhs units (Last Year
6.06 Lakhs units), which got adjusted as sales to TANGEDCO and the value of wind power
sold to TANGEDCO and included in other income amounted to Rs.59.62 Lakhs (Last Year
Rs.12.48 Lakhs).
Due to lower volume in production of yarn, wind electricity produced
for captive consumption could not be consumed in full. This also adversely impacted the
profitability of the spinning division as larger quantity of wind electricity was sold to
State Board, instead of being consumed by the spinning division.The overall sales turnover
of the Company aggregated to Rs.15,846.02 Lakhs (Last Year 21,213.87 Lakhs).
PROSPECTS FOR THE CURRENT YEAR
The annual performance of the Company for the current year depends on
demand for the yarn in domestic market as well as in export market at remunerative prices
and availability of quality cotton at a reasonably stable price. The Company is expected
to achieve marginal profit with the support of wind mills.
EVENT SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS
There were no material changes and commitments affecting the financial
position of the Company subsequent to the end of the financial year.
There are no proceedings pending under the Insolvency and Bankruptcy
Code, 2016. There was no instance of one-time settlement with any Bank or Financial
Institution.
PUBLIC DEPOSITS
The Company has not accepted any public deposits within the meaning of
Section 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits)
Rules, 2014 during the year under review. The Company has no public deposits outstanding
at the beginning and at the end of the year.
CORPORATE GOVERNANCE
To comply with requirements of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 both in letter and spirit, your Company is
committed to the principles of good Corporate Governance and continues to adhere good
corporate governance practices consistently.
A separate section is given on Corporate Governance, Management
Discussion and Analysis along with a certificate from a Practicing Company Secretary
regarding compliance of conditions of Corporate Governance as stipulated under Regulation
34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 which forms part of this Annual Report.
ANNUAL RETURN
Pursuant to the sub-section (3) of Section 92 of the Companies Act,
2013, Annual Return for Financial Year ended on 31st March, 2023, is posted on the website
of the Company viz., www.shivamills.com
DIRECTORS
Your directors express their profound grief on the demise of Sri K N V
Ramani, Independent Director (DIN 00007931), who passed away on 30.3.2023. Sri K N V
Ramani was associated with the Company since 31.8.2017 as an active member of the Board of
Directors during his tenure of office as an Independent Director. The Board places on
record its whole-hearted gratefulness of the valuable contribution made by him to the
Company.
Smt A Lalitha, Joint Managing Director (DIN 00003688) will retire by
rotation at the ensuing Annual General Meeting; she is eligible for re-appointment and
seeks re-appointment.
Based on recommendation of Nomination and Remuneration Committee, Sri M
Ganeshkumar (DIN 10175966) was inducted in to the Board of Directors w.e.f. 26.6.2023 as
an Additional Director (Non-Executive Independent Director), subject to approval of
shareholders.
All the Independent Directors have given declarations that they have
met the criteria of independence as laid down under Section 149 (6) of the Companies Act,
2013 and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
Pursuant to Regulation 34(3) and Schedule V Para C clause (10) (i) of
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has
obtained a certificate from Sri R Dhanasekaran, Company Secretary in Practice certifying
that none of the Directors on the Board of the Company have been debarred or disqualified
from being appointed or continuing as Directors of Companies by SEBI/Ministry of Corporate
Affairs or any such statutory authority.
AUDIT COMMITTEE
The Audit Committee of the Board comprises of
| Sri S Palaniswami $ |
Independent Director /Chairman |
| Sri S K Sundararaman |
Non-Executive Non-Independent Director |
| Sri C Sivasamy * |
Independent Director |
| Sri M Ganeshkumar& |
Independent Director |
| Sri K N V Ramani# |
Independent Director/Chairman (till 30.3.2023) |
The Board has implemented the suggestions made by the Audit Committee
from time to time. The Audit Committee was re-constituted on 11.2.2023 by appointing Sri C
Sivasamy, Independent Director as a member of the Committee and on 31.3.2023 by appointing
Sri S Palaniswami, Independent Director as Chairman of the Committee in the place of Sri K
N V Ramani due to his sudden demise on 30.3.2023.
*Appointed w.e.f 11.2.2023 #Demised on 30.3.2023 $
Appointed as Chairman w.e.f 31.3.2023 &Appointed w.e.f. 26.6.2023
KEY MANAGERIAL PERSONNEL
Key Managerial Personnel of the Company are as below:
| Name of the persons |
Designation |
| Sri S V Alagappan |
Managing Director |
| Sri M Shanmugam |
Chief Financial Officer |
| Smt M Shyamala |
Company Secretary |
EVALUATION OF BOARD OF DIRECTORS
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17
(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the
evaluation of Independent Directors are done by the entire Board of Directors including
performance and fulfilment of independence criteria specified in the Regulation and their
independence from the Management. Independent Directors at their meeting without
participation of non-Independent Directors and Management, considered and evaluated the
Boards' performance, performance of the Chairman and Managing Director.
The Board has carried out an annual evaluation of performance of Board
and of individual Directors as well as the Committees of Directors. The evaluation has
been conducted internally in the manner prescribed by Nomination and Remuneration
Committee.
BOARD MEETINGS
During the year under review, Four Board Meetings were conducted. The
details of the same have been given in the Corporate Governance Report under applicable
Regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, forming part of this Report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not given any loans or guarantees regulated by the
provisions of Section 186 of the Companies Act, 2013. The details of the investments made
by Company are given in the notes to the Financial Statements.
ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a vigil mechanism for Directors and
employees to report concerns about unethical behavior, actual or suspected fraud or
violation of the Company's code of conduct or ethics. The policy has been posted in
the website of the Company: www.shivamills.com
POLICY ON NOMINATION AND REMUNERATION COMMITTEE
The Board of Directors have framed a policy setting out the framework
for payment of Remuneration to Directors, Key Managerial Personnel and Senior Management
Personnel of the Company. The policy is explained as part of the Corporate Governance
Report. The Committee ensures that a) The level and composition of remuneration is
reasonable and sufficient to attract, retain and motivate Directors of the quality
required to run the Company successfully
b) Relationship of remuneration to performance is clear and meets
appropriate performance benchmarks and
c) Remuneration to Directors, Key Managerial Personnel and senior
management involves a balance between fixed and incentive pay reflecting short and
long-term performance objectives appropriate to the working of the Company and its goals.
RELATED PARTY TRANSACTIONS
All the related party transactions that were entered into during the
financial year in the ordinary course of business and the prices were at arm's length
basis. Hence, the provisions of Section 188 (1) of the Companies Act, 2013 are not
attracted. Further no materially significant related party transactions were entered by
the Company with Promoters, Directors, Key Managerial Personnel or other designated
persons which may have potential conflict with interest of the company at large. Approval
of Audit Committee was obtained for transactions of repetitive nature on annual basis. All
related party transactions are placed before the Audit Committee for approval and Board of
Directors for their review. The policy on Related Party Transactions is available in the
website www.shivamills.com
There were no transactions made with any person or entity belonging to
promoter/promoter group which holds 10% or more shareholding in the Company.
Disclosure of these transactions in form AOC-2 pursuant to Section 134
(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules,
2014 is set out below:
PARTICULARS OF CONTRACTS / ARRANGEMENTS ENTERED INTO BY THE COMPANY
WITH RELATED PARTIES REFERRED
Particulars of contracts / arrangements entered into by the company
with related parties referred to in sub-section (1) of section 188 of the Companies Act,
2013 including certain arm's length transactions under third proviso thereto are
given in form AOC - 2 in Annexure - I
SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS
There are no significant and material orders passed by the
Regulators/Courts that would impact the going concern status and the Company's
operation in future.
DIRECTORS' RESPONSIBILITY STATEMENT
As stipulated in Section 134 (5) of the Companies Act, 2013 your
Directors confirm that:
a) Your Directors have followed in the preparation of the annual
accounts, the applicable accounting standards with proper explanation relating to material
departures; b) Your 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 the Company at the end of the
financial year and of the profit and loss of the Company for that period;
c) Your Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
d) Your Directors have prepared the annual accounts on a going concern
basis;
e) Your Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and were
operating effectively; and
f) Your Directors have devised proper system to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
AUDITORS
The present Auditors of the Company M/s V K S Aiyer & Co.,
Chartered Accountants, Coimbatore (Firm Registration No: 000066S), were appointed for a
term of 5 years, pursuant to the resolution passed by the members at the Annual General
Meeting held on 20th September, 2021. Pursuant to Section 40 of the Companies (Amendment)
Act, 2017, the proviso to Section 139 (1) relating to ratification of appointment of
Auditors every year has been omitted. Accordingly, the term of office of present Auditors
will be continued without requirement of ratification.
Auditor's Report for the Financial year 2022-2023 does not contain
any qualification, reservation or adverse remarks requiring any comments by the Board of
Directors.
DETAILS OF FRAUDS REPORTED BY AUDITORS
There were no frauds reported by the Statutory Auditors under
provisions of Section 143 (12) of the Companies Act, 2013 and rules made thereunder.
SECRETARIAL AUDIT
Pursuant to provisions of section 204 of the Companies Act, 2013 and
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the
Company appointed Mr R Dhanasekaran, Practicing Company Secretary to undertake the
Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as
Annexure - II
The report does not contain any qualification, reservation or adverse
remark.
COMPLIANCE OF SECRETARIAL STANDARDS
The Company has complied with all applicable Secretarial Standards
issued by the Institute of Company Secretaries of India from time to time.
COST AUDITOR
Pursuant to Section 148 of the Companies Act, 2013 read with the
Companies (Cost Records and Audit) Rules 2014, as amended from time to time, the Board of
Directors, on the recommendation of Audit Committee, has reappointed Sri M Nagarajan, Cost
Accountant, Coimbatore as Cost Auditor to conduct Cost Audit of the Company for the
financial year 2023-2024. The Company has maintained such accounts and cost records as
required under Section 148 (1) of the Companies Act, 2013.
JOINT VENTURE, ASSOCIATE AND SUBSIDIARIES
The Company does not have any Joint Venture, Associate and Subsidiaries
as per Rule 6 of the Companies (Accounts) Rules, 2014. Hence, no reporting of the same in
Form AOC -1 has been made.
SHIFTING OF REGISTERED OFFICE
The Registered Office of the Company has been shifted from 252,
Mettupalayam Road, Coimbatore to 249-A, Bye-Pass Road Mettupalayam Road, Coimbatore -
641043 with effect from 1.4.2023, within local limits of the same City/Town/Village.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System, commensurate with the size,
scale and complexity of its operations.
The Company has an Internal Audit Department, which monitors and
evaluates the efficiency and adequacy of internal control system in the Company, its
compliance with operating systems, accounting procedures and policies at all locations of
the Company. The scope and authority of the Internal Audit function is defined in the
Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit
function reports to the Chairman of the Audit Committee and to the Chairman and Managing
Director of the Company.
Based on the report of Internal Auditors, corrective actions are taken
in the respective areas and thereby strengthen the controls. Significant audit
observations and recommendations along with corrective actions thereon are presented to
the Audit Committee of the Board.
STATEMENT ON RISK MANAGEMENT POLICY
The Company has developed a Risk Management Policy and implemented the
same. At present the Companyhas not identified any element of risk which may be of threat
to the existence of the Company.
CORPORATE SOCIAL RESPONSIBILITY
The Company has constituted Corporate Social Responsibility Committee
which shall recommend to the Board, the activities to be undertaken by the Company as
specified in Schedule VII, recommend the amount of expenditure to be incurred on such
activities and monitor the CSR policy of the Company. The company has fully spent the
amount stipulated under the requirements of the Act. Annual Report on CSR activities and
its related particulars are enclosed as Annexure - III. The Committee consists of the
following Directors:
| 1. Sri S V Alagappan |
Managing Director |
| 2. Smt A Lalitha |
Joint Managing Director |
| 3. Sri S Palaniswami |
Independent Director |
The Company has amended and adopted the CSR Policy on 6.2.2021 in line
with the CSR Rules as amended by Ministry of Corporate Affairs.
STATUTORY DISCLOSURES
I. Conservation of Energy and others - The particulars required to be
included in terms of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of
the Companies (Accounts) Rules, 2014 for the year ended 31stMarch, 2023 relating to
Conservation of Energy, etc., is enclosed as Annexure - IV. II. Remuneration of Directors
and other details - The information required under Section 197(12) of the Companies Act,
2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 and forming part of the Directors' Report for the year ended 31st March, 2023 is
provided in
Annexure - V.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
During the year under review the human relations continued to be very
cordial.
The Company has an Anti-Sexual Harassment Policy in line with the
requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition
& Redressal) Act, 2013, and an Internal Complaints Committee (ICC) has been
constituted to redress complaints of sexual harassment as provided therein. All employees
(permanent, contractual, temporary, trainees) are covered under this policy.
| a. No.of complaints filed during the financial year |
2022-23 |
Nil |
| b. No.of complaints disposed off during the financial year |
2022-23 |
Nil |
| c. No.of complaints pending as on end of financial year |
2022-23 |
Nil |
ACKNOWLEDGEMENT
Your Directors acknowledge with thanks the financial assistance
extended by the Bankers for providing the required credit facilities to the company. Your
Directors wish to place on record their appreciation of the contribution made by the
employees for their support to get over the difficulties faced by the Company.
|
By Order of the Board |
|
S V ALAGAPPAN |
| Coimbatore |
CHAIRMAN & MANAGING DIRECTOR |
| 26th June, 2023 |
DIN 00002450 |
|