Zenith Fibres Ltd
Directors Reports
Dear Members,
The Board of Directors are pleased to present the 34th Annual Report on the business
and operations of the Company along with the financial statements for the year ended March
31, 2023.
FINANCIAL SUMMARY AND HIGHLIGHTS
A summary of the Company's financial results for the Financial Year 2022-23 is as
under: ( in lacs)
| PARTICULARS |
2022-23 |
2021-22 |
| Revenue |
5279.43 |
5400.99 |
| Expenses |
4297.07 |
5030.64 |
| Profit before Exceptional Item and Tax |
382.36 |
370.35 |
| Tax Expenses |
98.54 |
90.82 |
| Profit After Tax |
283.82 |
279.53 |
DIVIDEND AND RESERVE
Your Directors are pleased to recommend a dividend of Rs.1.50/- on equity share of face
value of Rs. 10/- each (15%) for the fiscal year ended 31st March, 2023. The dividend, if
approved by the Members in the ensuing Annual General Meeting, would absorb Rs.59.16 Lacs
out of the distributable profits available. As permitted under the Act, the Board does not
propose to transfer any amount to general reserve and has decided to retain the entire
amount of profit for FY 2022-23 in the profit and loss account.
PERFORMANCE
The Company achieved operating revenue of 5076.35 Lacs and total revenue of 5279.43
Lacs as compared to 5234.79 Lacs and 5400.99 Lacs in the previous year. Profit before tax
is 382.36 Lacs and after tax stands at 283.82 Lacs during the year under review as against
370.35 Lacs and 279.53 Lacs respectively in the previous year.
The Wind Turbine generated revenue of 185.31 lacs ( 184.31 Lacs ) during the financial
year.
PLANT OPERATIONS
The Company's PPSF plant and WTG, both of which are located in Gujarat are operating
satisfactorily.
SHARE CAPITAL
As of March 31, 2023, the authorized share capital of the Company was 600 lacs
comprising of 60 Lacs equity shares of 10 each, and the paid-up equity share capital as at
March 31, 2023, was 394.41 Lacs comprising of 39.44 lakh equity shares of 10 each. During
the year under review, the Company has not issued any bonus shares, neither any right
shares with differential voting rights etc., nor granted any stock options or sweat
equity.
APPOINTMENT/REAPPOINTMENT/CESSATION OF DIRECTORS/ KMP
The following Directors / KMP were appointed/ reappointed / resigned during the year:
Shri Aman Rungta having PAN AZTPR8467N and DIN 03585306 was appointed w.e.f. 1st April
2022 upto 31st March 2025 as Whole Time Director Finance. Smt. Rashmi Desai (DIN:
02281570) was reappointed as an Independent Non-Executive Director w.e.f. 11.11.2022 for
further 5 years
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations,
2015, the Independent Directors have carried out an evaluation of the Board as well as
evaluation of the working of its Audit and Nomination & Remuneration Committee. The
manner in which the evaluation has been carried out has been explained in the Corporate
Governance Report.
SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANY
Please refer Form AOC 1 at "Annexure 1".
COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Board has on the recommendation of the Nomination & Remuneration Committee
framed a policy for selection and appointment of Directors and KMP and also decides their
remuneration. The Remuneration Policy is spelt out in the Corporate Governance Report.
FINANCE/ACCOUNTS
The Company was performing satisfactorily until the third quarter of the year and
suddenly during the last quarter of the financial year, the export front almost collapsed
completely. It was not a segregated case for the company but rather overall the global
polymer scenario turned seriously precarious. The marker is expected to remain fairly
subdued during the calendar year and is expected to start recovering only in the next
calendar year subject to global stability. The comfortable liquidity position of the
Company provides the necessary cushion in these trying times to face the untoward
scenario.
CORPORATE GOVERNANCE
The Company continues to be committed to maintain the highest standards of Corporate
Governance and adhere to all requirements as set out by law. The report on Corporate
Governance as stipulated under SEBI (LODR) Regulations, 2015 forms an integral part of
this Report. The requisite certificate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance is attached to the report on
Corporate Governance.
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility (CSR) Committee has formulated and recommended to
the Board, a CSR Policy indicating the activities to be undertaken by the Company, which
has 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 the
Companies 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 of
Section 186 of the Companies Act, 2013. However, the aggregate of loans and advances
granted, as also investments are within the limits of Section 186 of the Act. These have
been disclosed in the Financial Statements.
DECLARATION GIVEN BY INDEPENDENT DIRECTORS
The Company has received declaration from all Independent Directors of the Company to
the effect that they meet the criteria of independence as stipulated u/s 149(6) of the
Act.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to
state that: a) in the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to material
departures; b) they have selected such accounting policies and applied them consistently
and made judgments and estimates that were 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 of the Company for the year under review; c) they 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) they have prepared the annual accounts on a
going concern basis; e) they have laid down internal financial controls to be followed by
the company and that such internal financial controls are adequate and were operating
effectively; f) they have devised proper system to ensure compliance with the provisions
of all applicable laws and that such systems were adequate and operating effectively.
PARTICULARS OF CONTRACTS OR ARRANGMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188
OF THE COMPANIES ACT, 2013
There are no materially significant related party transactions made by the company with
Promoters, KMP or other designated persons during the year, which may have potential
conflict with interest of the Company at large. However, detailed transactions are
disclosed under notes to the financial statements.
AUDIT COMMITTEE RECOMMENDATIONS
During the year, the Board has accepted all recommendations of Audit Committee and
accordingly no disclosure is required to be made in respect of any non-acceptance of
recommendation.
AUDITORS a) Independent Auditor
The Independent Auditor M/s. Surendra Modiani &Associates, Charted Accountant
having F.R.N.126307W were reappointed as Independent Auditors of the Company in the 33rd
Annual General Meeting of the Company for a period of five consecutive years, based upon
the declaration of their eligibility, consent and terms of engagement. The Independent
Auditors have not reported any incident of fraud to the Audit Committee of the Company for
Financial Year 2022-23. b) Internal Auditor
The Board of Directors appointed M/s. Keyur Patel & Company, as Internal Auditors
of the Company. c) Secretarial Auditor
The Board of Directors appointed M/s. Upendra C Shukla, Practicing Company Secretaries,
to conduct Secretarial Audit for the financial year 2023-24. The Secretarial Audit Report
of M/s. Upendra C Shukla, Practicing Company Secretaries for the financial year ended
2022-23, is annexed as Annexure 2. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark. During the year under review, the Company
has 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 the
Act has been placed on the website of the Company. The web-link as required under the Act
is at www.zenith fibres.com
EXPLANATION/COMMENTS ON QUALIFICATION/RESERVATION/ADVERSE REMARK/DISCLAIMER BY THE
AUDITORS, IF ANY
Since there are no qualification/reservation/ adverse remark/disclaimer either by the
Auditors or Secretarial Auditors in their respective report, no explanation/comment is
warranted.
CODE OF CONDUCT
The Board of Directors have approved a Code of Conduct which is applicable to the
Members of the Board and all Employees in the course of day-to-day business operations of
the company. The details of the Code are available on the website of the Company. All the
Board 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 fraud
and mismanagement, if any. In staying true to our values of Strength, Performance and
Passion and in line with our vision, the Company is committed to the high standards of
Corporate Governance and stakeholder responsibility.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading pursuant to
SEBI (Prohibition & Insider Trading) Regulations, 2015 with a view to regulate trading
in securities by the Directors and Designated Employees of the Company. The details of the
Code are available on the website of the Company. All Directors and the Designated
Employees have confirmed compliance with the Code.
MEETINGS OF THE BOARD
Four meetings of the Board of Directors were held during the year. For details, please
refer the Corporate Governance section of this Report.
RISK MANAGEMENT
The Company continuously keeps a watch regarding any possible risk threatening the
existence of the Company and ensures necessary mitigation of the same.
DETAILS OF SIGNIFICANT & MATERIAL ORDERS IMPACTING THE GOING CONCERN
STATUS/COMPANY'S OPERATIONS
IN FUTURE
No significant/material orders have been passed by the regulators or courts or
tribunals impacting the going concern status of the Company or company's operations in
future.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per the requirement of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition & Redressal) Act, 2013 the company has proper system to receive the
complaint and constituted Internal Complaints Committee. During the year, no complaint was
received 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 employees
of the Company is as per "Annexure 3" 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 of the Company from 7
days before and upto one day before of the said AGM during normal business hours on
working days. None of the employees was in receipt of remuneration exceeding 8,50,000/-
p.m. or 1,02,00,000/- p.a.
MANAGEMEMNT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated under
Regulations 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
both in the domestic as well as export front for the Company. After years of efforts the
exports front that was has yielding benefits had suddenly collapsed due to overall global
economic contraction. Efforts are afoot to add other customers with niche quality
products. The export market holds larger potential and all efforts are afoot with added
vigor to increase sales on this front.
2. Segment wise Operational Performance
The Company operates manufacturing of Manmade Fibres and power generation through Wind
Turbine. Performances in terms of profits are commensurate to the production and sales and
routine increase in costs:
Production and sales of Fibres during the year was 3251.32 MT (3274.35 MT) and 3172.5
MT (3300.52 MT) respectively. Exports was 1998.82MT (2249.26MT) and sales of Yarn were
358.36 MT (317.14 MT).
3. Quality & Future Outlook
The outlook for the PPSF is encouraging overall. Efforts are continuously underway for
growth in the international market whereby substantial potential exists. Product quality
of the company is in consonance with international standards and all efforts are made to
adhere to the same.
4. Threats and Concerns
The Company is committed to manufacture and deliver quality products strictly as per
requirement of the customer. Constant feedbacks from the customers are received and all
efforts made for continuous improvement in process performance and product quality,
wherever required. With established production base of almost three decades, the Company
is in a position to maintain production and supply of quality products smoothly. This
testifies 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 prices
suitably as per pricing policy as and when required.
For the above reasons, no major threat 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, financial
reporting & controls, compliance with applicable laws, regulations etc. The Company
has appointed statutory auditors to evaluate Internal Control System. Regular internal
audits and checks ensure that system and procedures are continuously improved. The Audit
Committee reviews the adequacy and effectiveness of Internal Control Systems and suggests
ways 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 relations
with its employees. Numbers of employees were 71 as on 31st March, 2023. The Board of
Directors wishes to place on record its appreciation for the contribution made by all the
employees at all levels during the year.
7. Cautionary Statement
Statements in the Annual Report, particularly those which relate to Management
Discussion and Analysis may constitute forward looking statements within the meaning of
applicable laws and regulations. Although the expectations are based on reasonable
assumption, 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 AND
OUTGO The Company has not imported any foreign technology and hence, the company does
not have any information to offer in respect of Technology Absorption. However,
information in respect of Conservation of Energy & Foreign Exchange
Earnings and outgo is as per "Annexure-4".
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY, IF
ANY, DURING THE PERIOD FROM 31ST MARCH, 2023 TO THE DATE OF THE REPORT
There is no material change/commitment affecting the financial position of the Company
during the period from the end of the financial year on 31st March, 2023 to the date of
the Report
ACKNOWLEDGEMENTS
The Company would like to thank all the Stakeholders, Bankers, and Employees, including
inter alia Suppliers, Vendors and Investors and also place on record its appreciation to
all the valuable customers for their consistent unstinted support throughout the year.
|
|
On behalf of the Board of Directors |
|
|
Sanjeev Rungta |
| Date: |
12/8/2023 |
Chairman |
| Place: |
Vadodara |
DIN:00053602 |
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