2018 - 2019

R E P O RT
ANNUAL

ANNUAL REPORT

If undeliverd, please return to:

SURAT TEXTILE MILLS LIMITED
2019 - 2020
CIN No: L17119GJ1945PLC000214
Regd. Office: Tulsi Krupa Arcade, 6th Floor,
Puna-Kumbharia Road, Dumbhal, Surat 395010
 SURAT TEXTILE MILLS LIMITED
CORPORATE INFORMATION
Board of Directors: Plant:
Village Jolwa, Taluka Palsana,
Manikant R. Momaya (DIN: 00023993) Dist. Surat 394305
Managing Director Tel: (02622) 271287-89
Yogesh C. Papaiya (DIN: 00023985)
Wholetime Director & CFO
Harishchandra Bharucha (DIN: 00138430) Registrars & Share Transfer Agents:
Ketan Jariwala (DIN: 02095540) KFin Technologies Private Limited
Kruti Kothari (DIN: 08502921) * Selenium Tower B, Plot 31 & 32,
* w.e.f. 09/07/2019 Financial District, Gachibowli,
Nanakramguda,
Hanisha Arora Hyderabad 500032.
Company Secretary State: Telengana, India.
Phone No. 040 67161563
Registered Office: Fax No. 040 67161567
6th Floor, Tulsi Krupa Arcade, Email: [email protected]
Near Aai Mata Chowk, Toll Free No. 18003454001
Puna-Kumbharia Road, Dumbhal,
Surat 395010.
CIN: L17119GJ1945PLC000214
Tel: (0261) 2311198.
Fax: (0261) 2311029.
e-mail: [email protected]
http:/www.surattextilemillsltd.com

Statutory Auditors: Contents Page No.

Sharp and Tannan Associates, Notice of 74th Annual General Meeting 02
Chartered Accountants, Mumbai Directors’ Report and Management Discussion & 11
Analysis
Cost Auditors: Report on Corporate Governance 37
P. M. Nanabhoy & Co., Independent Auditors’ Report 51
Cost Accountants, Mumbai. Balance Sheet 56
Statement of Profit and Loss 57
Bankers: Cash Flow Statement 58
Bank of Baroda Notes forming part of the Financial Statements 61

(“Surat Textile Mills Limited” formerly known as “Garden Cottons & Yarns Ltd.”)
74th Annual General Meeting on Tuesday, 22nd September, 2020 at 3:00 p.m. IST through Video Conferencing (‘VC’) / Other Audio - Visual
Means (‘OAVM’) facility

74th Annual Report 2019-2020 1

 SURAT TEXTILE MILLS LIMITED
NOTICE with the Companies (Audit and Auditors) Rules, 2014 (including
any statutory modification(s) or re-enactment(s) thereof, for the
NOTICE is hereby given that the 74th ANNUAL GENERAL MEETING of time being in force), the remuneration, as approved by the Board
the Members of Surat Textile Mills Limited will be held on Tuesday, the of Directors and set out in the Statement annexed to the Notice,
22nd September, 2020 at 03:00 p.m. IST through Video Conferencing to be paid to M/s P. M. Nanabhoy & Co., Cost Accountants, having
(‘VC’) / Other Audio - Visual Means (‘OAVM’) facility to transact the Firm Registration Number 000012, appointed by the Board of
following businesses. Directors, to conduct the audit of the cost records of the Company
for the Financial Year ending 31st March, 2021, be and is hereby
ORDINARY BUSINESS
ratified.
1 To receive, consider and adopt the Audited Financial Statements
RESOLVED FURTHER THAT any of the Directors or the Company
of the Company for the Financial Year ended 31st March, 2020
Secretary, be and are hereby severally authorised to do all such
together with the Reports of the Board of Directors and Auditors’
acts, deeds and things as may be necessary, expedient and
thereon.
desirable for the purpose of giving effect to this Resolution.”
2 To appoint a Director in place of Mr. Manikant R. Momaya
5 To adopt new set of Articles of Association of the Company in
(DIN: 00023993), who retires by rotation and, being eligible, offers
conformity with the Companies Act, 2013
himself for re-appointment.
To consider and, if thought fit, to pass the following Resolution
SPECIAL BUSINESS
as a Special Resolution:
3 To re-appoint Mr. Ketan Jariwala (DIN: 02095540) as an
“RESOLVED THAT pursuant to the provisions of Section 5, 14 and
Independent Director of the Company
any other applicable provisions of the Companies Act, 2013 read
To consider and if thought fit, to pass, the following Resolution with the Companies (Incorporation) Rules, 2014 (including any
as a Special Resolution: statutory modification(s) or re-enactment thereof, for the time
being in force), the consent of the shareholders of the Company
“RESOLVED THAT pursuant to the provisions of Sections 149, 150 be and is hereby accorded to adopt the new set of Articles of
and 152 and other applicable provisions, if any, of the Companies Association in place of the existing Articles of Association.
Act, 2013 (“the Act”) read with Schedule IV to the Act and Rules
made thereunder and regulation 16(1)(b) of the Securities and RESOLVED FURTHER THAT any of the Directors of the Company,
Exchange Board of India (Listing Obligations and Disclosure which includes any Committee thereof and/or any Officer(s) of the
Requirements) Regulations, 2015 (including any statutory Company, authorised by the Board be and are hereby severally
modification(s), amendment(s), clarification(s), re-enactment(s) authorised to do all such acts, deeds, matters and things and to
or substitution(s) thereof, for the time being in force) and sign all such other documents, in each stage, as they or any of them
recommendations of the Nomination and Remuneration may deem necessary, proper and desirable (including without
Committee and the Board of Directors of the Company, limitation making the appropriate e-filings with the Registrar of
Mr. Ketan Jariwala (DIN: 02095540), who has submitted a declaration Companies / Ministry of Corporate Affairs), in connection with the
that he meets the criteria for independence and who is eligible for adoption of new set of Articles of Association of the Company, as
re-appointment and in respect of whom the Company has received approved by the Board and the members of the Company and/or
a notice in writing under Section 160 of the Act from a member generally to give effect to this resolution.”
proposing his candidature for the office of an Independent
6 To adopt new set of Memorandum of Association of the
Director, be and is hereby re-appointed as an Independent
Company in conformity with the Companies Act, 2013
Director of the Company, not liable to retire by rotation, and to
hold office for a second term upto 4 (four) years commencing To consider and, if thought fit, to pass the following Resolution
from 26th August, 2020 upto 10th August, 2024. as a Special Resolution:
RESOLVED FURTHER THAT any of the Directors or the Company “RESOLVED THAT pursuant to the provisions of Section 4
Secretary, be and are hereby severally authorised to settle any and Section 13 and any other applicable provisions of the
question, difficulty or doubt, that may arise in giving effect to this Companies Act, 2013 read with Companies (Incorporation)
resolution and to do all such acts, deeds and things as may be Rules, 2014(including any statutory modification(s) or re-
necessary, expedient and desirable for the purpose of giving effect enactment(s) thereof, for the time being in force), the consent of
to this Resolution.” the shareholders of the Company be and is hereby accorded for
the modification, substitution, addition and deletion in following
4 To ratify the remuneration to Cost Auditors for the financial year
Clauses of the Memorandum of Association of the Company:
ending 31 March, 2021
a. The subject heading of existing Clause IIIA is deleted and
To consider and if thought fit, to pass, the following Resolution
replaced with “THE OBJECTS TO BE PURSUED BY THE
as an Ordinary Resolution:
COMPANY ON ITS INCORPORATION ARE:”;
“RESOLVED THAT in accordance with the provisions of Section 148
b. The subject heading of existing Clause IIIB is deleted
and other applicable provisions of the Companies Act, 2013 read
and replaced with the heading “MATTERS WHICH ARE

2 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
NECESSARY FOR THE FURTHERANCE OF THE OBJECTS the quorum under section 103 of the Companies Act, 2013.
SPCIFIED IN CLAUSE 3(a) ARE:”
5. Pursuant to the provisions of the Companies Act, 2013, a Member
c. Clause III(C) : “OTHER OBJECTS “to be deleted; entitled to attend and vote at the AGM is entitled to appoint a
Proxy to attend and vote on his/her behalf and the Proxy need
d. Other amendments required to align the existing not be a Member of the Company. Since this AGM is being held
Memorandum of Association with the provisions of the through VC/OAVM pursuant to the applicable MCA and SEBI
Companies Act, 2013 Circulars, physical attendance of Members has been dispensed
RESOLVED FURTHER THAT any of the Directors of the Company, with. Accordingly, the facility for appointment of Proxies by the
which includes any Committee thereof and/or any Officer(s) of the Members will not be available for the AGM and hence the Proxy
Company, authorised by the Board be and are hereby severally Form and Attendance Slip are not annexed to this Notice.
authorised to do all such acts, deeds, matters and things and to 6. The Explanatory Statement pursuant to Section 102(1) of the Act
sign all such other documents, in each stage, as they or any of them setting out material facts concerning the business under Item
may deem necessary, proper and desirable (including without Nos. 3 to 6 of the Notice is annexed hereto. The relevant details
limitation making the appropriate e-filings with the Registrar of pursuant to Regulations 26(4) and 36(3) of the Listing Regulations
Companies / Ministry of Corporate Affairs), in connection with and Secretarial Standards on General Meetings issued by the
the adoption of new set of Memorandum of Association of the Institute of Company Secretaries of India, in respect of Directors
Company, as approved by the Board and the members of the seeking appointment/re-appointment at this AGM are also
Company and/or generally to give effect to this resolution.” annexed.
Notes: 7. Messrs Sharp & Tannan Associates, Chartered Accountants, were
appointed as Statutory Auditors of the Company at the 71st
1. In view of the global outbreak of the Covid-19 pandemic, the Annual General Meeting held on 2nd August, 2017. Pursuant to
Ministry of Corporate Affairs (‘MCA’) has vide its General Circular the Notification issued by the Ministry of Corporate Affairs on
dated May 5, 2020 read with General Circulars dated April 8, 2020 7th May, 2018 amending section 139 of the Act and the Rules
and April 13, 2020 (collectively referred to as ‘MCA Circulars’) framed thereunder, the mandatory requirement for ratification
permitted the holding of the Annual General Meeting (‘AGM ’ of appointment of Auditors by the Members at every Annual
or ‘Meeting’) through Video Conferencing (‘VC’) facility or other General Meeting has been omitted, and hence the Company is
audio visual means (‘OA VM’), without the physical presence not proposing an item on ratification of appointment of Auditors
of the Members at a common venue. Further, Securities and at this AGM.
Exchange Board of India (‘SEBI’) vide its Circular dated May 12,
2020 (‘SEBI Circular’) has also granted certain relaxations. 8. The Register of Directors and Key Managerial Personnel and
their shareholding maintained under section 170 of Companies
2. In compliance with applicable provisions of the Companies Act, Act, 2013 and Register of Contracts or arrangements in which
2013 (“the Act”) and SEBI (Listing Obligations and Disclosure directors are interested maintained under section 189 of the
Requirements) Regulations, 2015 (“Listing Regulations”) read Companies Act, 2013 and relevant documents referred to in
with above mentioned MCA and SEBI Circulars, the 74th AGM of this Notice of AGM and explanatory statement, will be available
the Company is being conducted through VC/OAVM on Tuesday, electronically for inspection by the members during the AGM.
22nd September, 2020 at 3:00 p.m. (IST). In accordance with the All documents referred to in the Notice will also be available for
Secretarial Standard-2 on General Meetings issued by the Institute electronic inspection without any fee by the members from the
of Company Secretaries of India (“ICSI”) read with Clarification/ date of circulation of this Notice upto the date of AGM, i.e. 22nd
Guidance on applicability of Secretarial Standards - 1 and 2 dated September, 2020. Members seeking to inspect such documents
15th April, 2020 issued by the ICSI, the proceedings of the AGM can send an email to [email protected].
shall be deemed to be conducted at the Registered Office of the
Company which shall be the deemed venue of the AGM. Since 9. Corporate/Institutional Members are entitled to appoint
the AGM will be held through VC/OAVM, the Route Map is not authorised representatives to attend the AGM through VC/OAVM
annexed to this Notice. on their behalf and cast their votes through remote e-voting or at
the AGM. Corporate/Institutional Members intending to authorize
3. KFin Technologies Private Limited, Registrar & Transfer Agent of the their representatives to participate and vote at the Meeting are
Company, (earlier known as Karvy Fintech Private Limited) (“KFin” requested to send a certified copy of the Board resolution /
or “KFintech”) shall be providing facility for voting through remote authorization letter to the Scrutiniser at e-mail ID csjigarvyas@
e-voting, for participation in the AGM through VC/OAVM facility gmail.com with a copy marked to [email protected] and
and e-voting during the AGM. The procedure for participating in to the Company at [email protected], authorising its
the meeting through VC/OAVM is explained at Note No.21 below. representative(s) to attend and vote through VC/ OAVM on their
4. In view of the massive outbreak of the COVID-19 pandemic, behalf at the Meeting, pursuant to Section 113 of the Act.
social distancing has to be a pre-requisite. Pursuant to the above 10. ELECTRONIC DISPATCH OF NOTICE AND ANNUAL REPORT: In
mentioned MCA Circulars, physical attendance of the Members accordance with the MCA General Circular No. 20/2020 dated
is not required at the AGM, and attendance of the Members 5th May, 2020 and SEBI Circular No. SEBI/ HO/CFD/CMD1/
through VC/OAVM will be counted for the purpose of reckoning

74th Annual Report 2019-2020 3

 SURAT TEXTILE MILLS LIMITED
CIR/P/2020/79 dated 12th May, 2020, in view of the prevailing faq.php or Central Depository Services (India) Limited viz. https://
situation and owing to the difficulties involved in dispatching www.cdslindia.com/investors/open-demat.html for further
physical copies of the financial statements (including Board’s understanding of the demat procedure.
Report, Auditor’s Report or other documents required to be
attached therewith) for the Financial Year ended 31st March, 2020 15. NOMINATION: Members can avail of the facility of nomination
pursuant to section 136 of the Act and Notice calling the Annual in respect of shares held by them in physical form pursuant to
General Meeting pursuant to section 101 of the Act read with the the provisions of section 72 of the Act. Members desiring to avail
Rules framed thereunder, such statements including the Notice of of this facility may send their nomination in the prescribed Form
AGM are being sent only in electronic mode to those Members No. SH-13 duly filled in to KFin Technologies Private Limited at the
whose e-mail addresses are registered with the Company/ above mentioned address. Members holding shares in electronic
KFintech or the Depository Participant(s). The Company will not form may contact their respective Depository Participants for
be dispatching physical copies of such statements and Notice of availing this facility.
AGM to any Member. Members are requested to register/update 16. CONSOLIDATION OF PHYSICAL SHARE CERTIFICATES:
their email addresses, in respect of electronic holdings with the Members holding shares in physical form, in identical order
Depository through the concerned Depository Participants and of names, in more than one folio are requested to send to the
in respect of physical holdings with KFintech by following due Company or Registrar, the details of such folios together with the
procedure. A copy of the Notice of this AGM along with Annual share certificates for consolidating their holdings in one folio. A
Report for the Financial Year 2019-2020 is available on the website consolidated share certificate will be issued to such Members
of the Company at www.surattextilemillsltd.com, website of the after making requisite changes.
Stock Exchanges where the shares of the Company are listed i.e.
BSE Limited at www.bseindia.com and on the website of KFin 17. Members who wish to inspect the relevant documents referred to
Technologies Private Limited at https://evoting.karvy.com. in the Notice can send an e-mail to [email protected] by
mentioning their DP ID & Client ID/Physical Folio Number.
11. The Company’s Registrar and Transfer Agents for its Share Registry
Work (Physical and Electronic) are KFin Technologies Private 18. To prevent fraudulent transactions, Members are advised to
Limited having their office at Selenium, Tower-B, Plot No. 31 & exercise due diligence and notify the Company of any change in
32, Gachibowli, Financial District, Nanakramguda, Hyderabad, address or demise of any Member as soon as possible. Members
Telangana 500032. are also advised not to leave their demat account(s) dormant for
long. Periodic statement of holdings should be obtained from the
12. The Members can join the AGM in the VC/OA VM mode 30 concerned DPs and holdings should be verified from time to time.
minutes before and 15 minutes after the scheduled time of the
commencement of the Meeting by following the procedure 19. SUBMISSION OF QUESTIONS / QUERIES PRIOR TO AGM:
mentioned in the Notice. The Members will be able to view the
a. For ease of conduct of AGM, members who wish to ask
proceedings on the KFin Technologies Private Limited (‘KFin)
questions/express their views on the items of the businesses
e-Voting website at https://evoting.karvy.com. The facility of
to be transacted at the meeting are requested to write to the
participation at the AGM through VC/OA VM will be made available
Company’s investor email-id [email protected], at
to at least 1,000 Members on a first come first served basis as
least 48 hours before the time fixed for the AGM i.e. by 3.00
per the MCA Circulars. The detailed instructions for joining the
p.m. (IST) on Tuesday, 22nd September, 2020, mentioning
Meeting through VC/OA VM form part of the Notes to this Notice.
their name, demat account no./folio number, email ID,
13. BOOK CLOSURE: The Register of Members and Transfer Books of mobile number etc. The queries may be raised precisely and
the Company will be closed from Thursday, 17th September, 2020 in brief to enable the Company to answer the same suitably
to Tuesday, 22nd September, 2020 (both days inclusive) for the depending on the availability of time at the AGM.
purpose of AGM.
b. Alternatively, Members holding shares as on the cut-off
14. TRANSFER OF SHARES PERMITTED IN DEMAT FORM ONLY: As per date i.e. Wednesday, 16th September, 2020, may also visit
Regulation 40 of the Listing Regulations, as amended, securities of https://emeetings.kfintech.com and click on the tab ”Post
listed companies can be transferred only in dematerialised form Your Queries“ and post their queries/views/ questions in
with effect from April 1, 2019, except in case of request received the window provided, by mentioning their name, demat
for transmission or transposition of securities. In view of this and account number/folio number, email ID and mobile number.
to eliminate all risks associated with physical shares and to avail The window shall be closed 48 hours before the time fixed
various benefits of dematerialisation, Members are advised to for the AGM at 3.00 p.m. (IST) on 22nd September, 2020.
dematerialise their shares held in physical form.
c. Members can also post their questions during AGM through
Members are accordingly requested to get in touch with any the “Ask A Question” tab, which is available in the VC/OAVM
Depository Participant having registration with SEBI to open a facility as well as in the one way live webcast facility. The
Demat account or alternatively, contact the nearest branch of Company will, at the AGM, endeavour to address the queries
KFin Technologies Private Limited to seek guidance in the demat received till 3.00 p.m. (IST) on Tuesday, 22nd September,
procedure. Members may also visit website of depositories viz. 2020 from those Members who have sent queries from their
National Securities Depository Limited viz. https://nsdl.co.in/faqs/ registered email IDs. Please note that Members’ questions

4 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
will be answered only if they continue to hold shares as on 22. PROCEDURE FOR REMOTE E-VOTING: In compliance with the
the cut-off date. provisions of section 108 of the Act read with Rule 20 of the
Companies (Management and Administration) Rules, 2014,
20. SPEAKER REGISTRATION BEFORE AGM: Members of the as amended and the provisions of Regulation 44 of the Listing
Company, holding shares as on the cut-off date i.e. Wednesday, Regulations, Members are provided with the facility to cast their
16th September, 2020 and who would like to speak or express vote electronically, through the e-voting services provided by KFin
their views or ask questions during the AGM may register Technologies Private Limited on all resolutions set forth in this
themselves as speakers by visiting https://emeetings.kfintech. Notice, through remote e-voting. Members are requested to note
com and clicking on “Speaker Registration” during the period that the Company is providing facility for remote e-voting and the
from Sunday, 20th September, 2020 (9:00 a.m. IST) upto Monday, business may be transacted through electronic voting system. It
21st September, 2020 (5:00 p.m. IST). Those Members who have is hereby clarified that it is not mandatory for a Member to vote
registered themselves as a speaker will only be allowed to speak/ using the remote e-voting facility. A Member may avail of the
express their views/ask questions during the AGM. The Company facility at his/her/its discretion, as per the instructions provided
reserves the right to restrict the number of speakers depending on herein:
the availability of time at the AGM.
Instructions:
21. INSTRUCTIONS FOR MEMBERS ATTENDING THE AGM THROUGH
VC/OAVM ARE AS UNDER: a. Member will receive an e-mail from KFin Technologies
Private Limited [for Members whose e-mail IDs are registered
a) ATTENDING THE AGM: Members will be provided with with the Company/Depository Participant(s)] which includes
a facility to attend the AGM through video conferencing details of E-Voting Event Number (“EVEN“), USER ID and
platform provided by KFin Technologies Private Limited. password:
Members are requested to login at https://emeetings.
kfintech.com and click on the “Video Conference” tab to join (i) Launch internet browser by typing the URL: https://
the Meeting by using the remote e-voting credentials. evoting.karvy.com.
b) Please note that Members who do not have the User ID (ii) Enter the login credentials (i.e. User ID and password).
and Password for e-voting or have forgotten the User ID In case of physical folio, User ID will be EVEN followed
and Password may retrieve the same by following the by folio number. In case of Demat account, User ID will
instructions provided in Note No. 23. be your DP ID and Client ID. However, if you are already
registered with KFin Technologies Private Limited for
c) Members may join the Meeting through Laptops, e-voting, you can login by using your existing User ID
Smartphones, Tablets or iPads for better experience. Further, and password for casting your vote.
Members will be required to use Internet with a good speed
to avoid any disturbance during the Meeting. Members will (iii) After entering these details appropriately, click on
need the latest version of Chrome, Safari, Internet Explorer “LOGIN”.
11, MS Edge or Firefox. Please note that participants
connecting from Mobile Devices or Tablets or through (iv) You will now reach password change Menu wherein
Laptops connecting via mobile hotspot may experience you are required to mandatorily change your password.
Audio/Video loss due to fluctuation in their respective The new password shall comprise of minimum 8
network. It is therefore recommended to use stable Wi-Fi characters with at least one upper case (A-Z), one
or LAN connection to mitigate any glitches. Members are lower case (a-z), one numeric value (0-9) and a special
encouraged to join the Meeting through Laptops with latest character (@,#,$, etc.). The system will prompt you to
version of Google Chrome for better experience. change your password and update your contact details
like mobile number, email ID etc. on first login. You
d) Members can join the AGM in the VC/OAVM mode may also enter a secret question and answer of your
30 minutes before the scheduled time of the commencement choice to retrieve your password in case you forget
of the Meeting by following the procedure mentioned at it. It is strongly recommended that you do not share
Note No. 21 above in the Notice, and this mode will be your password with any other person and that you take
available throughout the proceedings of the AGM. utmost care to keep your password confidential.
e) In case of any query and/or help, in respect of attending AGM (v) You need to login again with the new credentials.
through VC/OAVM mode, Members may refer to the Help
& Frequently Asked Questions (FAQs) and ‘AGM VC/OAVM’ (vi) On successful login, the system will prompt you to
user manual available at the download Section of https:// select the “EVENT” i.e. Surat Textile Mills Limited.
evoting.karvy.com or Manager - Corporate Registry, KFintech (vii) On the voting page, enter the number of shares (which
at Selenium, Tower B, Plot No. 31-32, Gachibowli, Financial represents the number of votes) as on the cut-off
District, Nanakramguda, Hyderabad, Telangana 500032 or at date under “FOR/AGAINST” or alternatively, you may
the email ID [email protected] or on phone No.: 040- partially enter any number in “FOR” and partially
6716 1500 or call KFin Technologies Private Limited’s toll free “AGAINST” but the total number in “FOR/AGAINST”
No.: 1800-3454-001 for any further clarifications. taken together shall not exceed your total shareholding

74th Annual Report 2019-2020 5

 SURAT TEXTILE MILLS LIMITED
as on the cut-off date. You may also choose the option c. The remote e-voting period commences on Friday, 18th
ABSTAIN. If the Member does not indicate either September, 2020 (9:00 a.m. IST) and ends on Monday,
“FOR” or “AGAINST” it will be treated as “ABSTAIN” and 21st September, 2020 (5:00 p.m. IST). During this period,
the shares held will not be counted under either head. Members of the Company, holding shares either in physical
form or in dematerialised form, as on the cut-off date
(viii) Voting has to be done for each item of the notice
Wednesday, 16th September, 2020 may cast their votes
separately. In case you do not desire to cast your vote
electronically.
on any specific item, it will be treated as abstained.
(ix) Members holding multiple folios/ demat accounts shall The remote e-voting module shall be disabled for voting
vote separately for each folio/ demat account. thereafter. Once the vote on a resolution(s) is cast by the
Member, the Member shall not be allowed to change it
(x) You may then cast your vote by selecting an appropriate subsequently. A person who is not a Member as on the cut-
option and click on “Submit”. off date should treat this Notice for information purposes
only.
(xi) A confirmation box will be displayed. Click “OK” to
confirm else “CANCEL” to modify. Once you have voted d. The voting rights of Members shall be in proportion to their
on the resolution(s), you will not be allowed to modify share in the paid-up equity share capital of the Company
your vote. as on Wednesday, 16th September, 2020, being the cut-
(xii) Corporate/Institutional Members (i.e. other than off date. Members are eligible to cast vote only if they are
Individuals, HUF, NRI etc.) are required to send holding shares as on that date.
scanned certified true copy (PDF Format) of the Board e. In case a person has become a Member of the Company
Resolution/Authority Letter etc., duly authorising after dispatch of AGM Notice but on or before the cut-off
their authorized representative(s) to attend the date for E-Voting, i.e. Wednesday, 16th September, 2020,
AGM through VC/ OAVM on its behalf and to vote he/she/it may obtain the User ID and Password in the
through remote e-voting to the Scrutiniser at his manner as mentioned below:
e-mail ID [email protected] with a copy marked
to [email protected] and to the Company at (i) If the mobile number of the Member is registered
[email protected]. It should reach the against Folio No./DP ID Client ID, the Member may send
Scrutiniser & the Company by email not later than SMS: MYEPWD <space> Folio No. or DP ID Client ID to
Monday, 21st September, 2020 (5:00 p.m. IST). In case +91 9212993399. In case of physical holding, prefix Folio
if the authorized representative attends the Meeting, No. with EVEN. Example for NSDL: MYEPWD <SPACE>
the above mentioned documents shall be submitted IN12345612345678 Example for CDSL: MYEPWD
before the commencement of AGM. <SPACE> 1402345612345678 Example for Physical:
MYEPWD <SPACE> XXXX1234567890 (XXXX being EVEN)
b. In case e-mail ID of a Member is not registered with the
Company/ Depository Participant(s), then such Member (ii) If e-mail address or mobile number of the Member
is requested to register/update their e-mail addresses is registered against Folio No./DP ID Client ID, then
with the Depository Participant (in case of Shares held in on the home page of https:// evoting.karvy.com, the
dematerialised form) and inform KFin Technologies Private member may click “Forgot Password” and enter Folio
Limited at the email ID [email protected] (in case of No. or DP ID Client ID and PAN to generate a password.
Shares held in physical form): (iii) Member may call KFin Technologies Private Limited toll
(i) Upon registration, Member will receive an e-mail free number 1800-3454-001.
from KFin Technologies Private Limited which includes (iv) Member may send an e-mail request to evoting@
details of E-Voting Event Number (EVEN), USER ID and kfintech.com. KFin Technologies Private Limited shall
password. send User ID and Password to those new Members
(ii) Please follow all steps from Note. No. 22(a) (i) to (xii) whose e-mail IDs are available.
above to cast your vote by electronic means. 24. VOTING AT THE AGM:
23. OTHER INSTRUCTIONS: a. The procedure for e-voting during the AGM is same as the
a. In case of any query and/or grievance, in respect of voting instructions mentioned above for remote e-voting since the
by electronic means, Members may refer to the Help & Meeting is being held through VC/OAVM.
Frequently Asked Questions (FAQs) and E-voting user b. The e-voting window shall be activated upon instructions of
manual available at the download Section of https://evoting. the Chairman of the Meeting during the AGM.
karvy.com or write to email ID [email protected] or on
toll free No.: 1800-3454-001 for any further clarifications. c. E-voting during the AGM is integrated with the VC/OAVM
platform and no separate login is required for the same.
b. You can also update your mobile number and e-mail ID in
the user profile details of the folio which may be used for d. Only those Members/ Shareholders, who will be present in
sending future communication(s). the AGM through VC/OAVM facility and have not cast their

6 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
vote on the Resolutions through remote e-voting and are email address to KFin Technologies Private Limited, on
otherwise not barred from doing so, shall be eligible to vote or before 5:00 p.m. (IST) on Wednesday, 16th September,
through e-voting system in the AGM. 2020.
e. Members who have already cast their votes by remote The process for registration of email address with KFin
e-voting are eligible to attend the Meeting through VC/ Technologies Private Limited for receiving the Notice of AGM
OAVM; however, these Members are not entitled to cast and login ID and password for e-voting is as under:
their vote again during the Meeting. A Member can opt for
only single mode of voting i.e. through Remote e-voting or i. Visit the link: https://ris.kfintech.com/email_
voting through VC/OAVM mode during the AGM. registration/

25. The results shall be declared not later than forty-eight hours ii. Select the Company name viz. Surat Textile Mills
from conclusion of the Meeting. The results declared along Limited.
with the Scrutiniser’s Report will be placed on the website of iii. Enter the DP ID & Client ID / Physical Folio Number
the Company at www.surattextilemillsltd.com and the website and PAN details. In the event the PAN details are not
of KFin Technologies Private Limited: https://evoting.karvy.com available on record for Physical Folio, Member shall
immediately after the results are declared and will simultaneously enter one of the Share Certificate numbers.
be forwarded to BSE Limited, where Equity Shares of the Company
are listed and shall be displayed at the Registered Office of the iv. Upload a self-attested copy of the PAN card for
Company. authentication. If PAN details are not available in the
system, the system will prompt the Member to upload
26. PROCEDURE FOR REGISTERING THE EMAIL ADDRESSES AND a self-attested copy of the PAN card for updation.
OBTAINING THE AGM NOTICE AND E-VOTING INSTRUCTIONS BY
THE MEMBERS WHOSE EMAIL ADDRESSES ARE NOT REGISTERED v. Enter your email address and mobile number.
WITH THE DEPOSITORIES (IN CASE OF MEMBERS HOLDING
vi. The system will then confirm the email address for
SHARES IN DEMAT FORM) OR WITH KFIN TECHNOLOGIES
receiving this AGM Notice. The Members may also visit
PRIVATE LIMITED (IN CASE OF MEMBERS HOLDING SHARES IN
the website of the Company www.surattextilemillsltd.
PHYSICAL FORM):
com and click on the “email registration” and follow
I. Those Members who have not yet registered their email the registration process as guided thereafter. Please
addresses are requested to get their email addresses note that in case of shareholding in dematerialised
registered by following the procedure given below: form, the updation of email address will be temporary
only upto AGM.
a. Members holding shares in demat form can get their
email ID registered by contacting their respective III. After successful submission of the email address, KFin
Depository Participant. Technologies Private Limited will email a copy of this AGM
Notice along with the e-voting user ID and password. In
b. Members holding shares in physical form may register case of any queries, Members are requested to write to KFin
their email address and mobile number with KFin Technologies Private Limited.
Technologies Private Limited by sending an email
request at the email ID [email protected] IV. Those Members who have already registered their email
along with signed scanned copy of the request letter addresses are requested to keep their email addresses
providing the email address, mobile number, self- validated/updated with their DPs / KFin Technologies Private
attested copy of the PAN card and copy of the Share Limited to enable serving of notices / documents / Annual
Certificate for registering their email address and Reports and other communications electronically to their
receiving the AGM Notice and the e-voting instructions. email address in future.

II. To facilitate Members to receive this Notice electronically By Order of the Board of Directors
and cast their vote electronically, the Company has made For Surat Textile Mills Limited
special arrangements with KFin Technologies Private Registered Office:
Limited for registration of email addresses of the Members Tulsi Krupa Arcade, 6th Floor,
in terms of the MCA Circulars. Eligible Members who have Puna-Kumbharia Road, Hanisha Arora
not submitted their email address to the Company or KFin Dumbhal, Surat 395010. Company Secretary
Technologies Private Limited are required to provide their Place: Surat
Date: 21st July, 2020

74th Annual Report 2019-2020 7

 SURAT TEXTILE MILLS LIMITED
Statement pursuant to Section 102(1) of the Mr. Ketan Jariwala is interested in the Resolution set out at item
No.3 of the Notice with regard to his appointment. Relatives of
Companies Act, 2013 Mr. Ketan Jariwala may be deemed to be interested in the resolution to
The following Explanatory Statement sets out all material facts relating the extent of their shareholding, if any, in the Company.
to the Special Business as mentioned under Item Nos. 3 to 6 of the Save and except the above, none of the other Directors, Key Managerial
accompanying Notice dated 21st July, 2020 Personnel of the Company and their relatives are, in any way, concerned
Item No.3: or interested, financially or otherwise, in the Resolution set out at Item
No.3 of the Notice for approval of the Members.
The tenure of Mr. Ketan Jariwala (DIN: 02095540) as an Independent
Director on the Board of the Company expires on 25th August, 2020. This statement may also be regarded as an appropriate disclosure under
the Act and the Listing Regulations.
In terms of Section 149 read with Schedule IV to the Act and relevant
provisions of SEBI (Listing Obligations and Disclosure Requirements) The Board recommends the Special Resolution set out at Item No.3 of
Regulations, 2015 (‘Listing Regulations’), an Independent Director shall the Notice for approval by the Members.
be eligible to be re-appointed for second term of maximum five years, Item No.4:
on the basis of report of performance evaluation done by the Board
and approval of Members by way of Special Resolution to be passed at The Company is directed under the provisions of Section 148 of the
a General Meeting. Companies Act, 2013 read with Companies (Cost Records and Audit)
Rules, 2014, as amended from time to time, to have the audit of cost
Mr. Ketan Jariwala (aged 58 years) is an industrialist and a technocrat records conducted by a cost accountant. Further, in accordance with the
engaged in the business of man-made textiles and having more than provisions of Section 148 of the Act read with the Companies (Audit and
two decades of experience in the field. He holds Diploma in Textile Auditors) Rules, 2014, the remuneration payable to the Cost Auditors
Technology from M.S. University, Baroda. He was first appointed as a has to be ratified by the Members of the Company.
Director on the Board of the Company on 11th August, 2014.
The Board of Directors, on the recommendation of the Audit Committee
Mr. Ketan Jariwala does not hold any equity share in the Company and at its Meeting held on 21st July, 2020 has approved the appointment of
he is not related to any other Director and Key Managerial Personnel of M/s. P. M. Nanabhoy & Co., Cost Accountants, as the Cost Auditors to
the Company. conduct the audit of the cost records of the Company for the financial
The Company has received his consent to act as a Director of the year ending 31st March, 2021 at a remuneration of Rs.75,000/- plus
Company in the prescribed Form DIR-2 and a declaration in the applicable taxes and reimbursement of out of pocket expenses.
prescribed form DIR-8 that he is not disqualified from being appointed Accordingly, consent of the Members is sought by way of an Ordinary
as Director of the Company and also a confirmation that he meets Resolution as set out at Item No.4 of the accompanying Notice for
the criteria of independence as specified in sub-section (6) of Section ratification of the remuneration to the Cost Auditors for the financial
149 of the Act and Regulation 16(1)(b) of the Listing Regulations and year ending 31st March 2021.
is also independent of the management of the Company. He has also
confirmed that he was not debarred from holding the office of director None of the Directors, Key Managerial Personnel of the Company and
by virtue of any SEBI order or any other such authority. their relatives are, in any way, concerned or interested, financially or
otherwise, in the Resolution set out at Item No.4 of the Notice for
In terms of Section 160 of the Act, the Company has received a notice approval of the Members.
in writing from a Member for proposing the candidature of Mr. Ketan
Jariwala for the office of an Independent Director of the Company at the The Board recommends the Ordinary Resolution set out at Item No.4 of
ensuing Annual General Meeting. the Notice for ratification by the Members.
Based on the recommendations of Nomination and Remuneration Item No.5:
Committee, the Board at its meeting held on 21st July, 2020, reviewed
The Articles of Association (“AOA”) of the Company as currently in
the performance evaluation of Mr. Ketan Jariwala and unanimously
force was originally adopted in accordance with the provisions of
acknowledged his experience and expertise in the field of textiles, with
the Companies Act, 1956. The references to specific Sections of the
over two decades and his valuable contribution as Independent Director,
Companies Act, 1956 in the existing Articles of Association may no
made during his first term with the Company, the Board re-appointed
longer be in conformity with introduction of new provisions of the
Mr. Ketan Jariwala as an Independent Director of the Company for the
Companies Act, 2013.
second term of 4 (four) years w.e.f. 26th August, 2020 upto 10th August,
2024, subject to approval of the Members of the Company. It is therefore proposed to amend the existing Articles of Association
to align it with the provisions of Companies Act, 2013 including the
Details of Mr. Ketan Jariwala are provided in the ‘Annexure’ to the
Rules framed thereunder and adoption of specific clauses from Table
Notice. Pursuant to the provisions of (i) the SEBI (Listing Obligations
F of Schedule I to the Companies Act, 2013 which sets out the model
and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’)
Articles of Association for a Company limited by shares.
and (ii) Secretarial Standard on General Meeting issued by the ICSI, he
shall be paid remuneration by way of sitting fees for attending meetings It is therefore considered desirable to adopt a comprehensive new set of
of the Board of Committees thereon, reimbursement of expenses for Articles of Association of the Company (“New Articles”), in substitution
participating in the Board and other meetings. of and to the exclusion of the existing AOA.

8 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
The Board of Directors at its meeting held on 21st July, 2020 approved a. The subject heading of existing Clause IIIA is deleted and replaced
the alteration of Articles of Association of the Company as stated above with “THE OBJECTS TO BE PURSUED BY THE COMPANY ON ITS
to comply with the requirements under the Companies Act, 2013, INCORPORATION ARE:”;
subject to approval of shareholders.
b. The subject heading of existing Clause IIIB is deleted and replaced
Pursuant to the provisions of Section 14 of the Act, approval of the with the heading “MATTERS WHICH ARE NECESSARY FOR THE
shareholders of the Company by special resolution is required for FURTHERANCE OF THE OBJECTS SPCIFIED IN CLAUSE 3(a) ARE:”
the adoption of the New Articles to replace the existing Articles of
Association and accordingly, the approval of the shareholders is being c. Clause III(C) : “OTHER OBJECTS “to be deleted;
sought for the adoption of the New Articles. d. Other amendments required to align the existing Memorandum of
The proposed new draft of Articles of Association is available on Association with the provisions of the Companies Act, 2013.
www.surattextilemillsltd.com of the Company and is also being available The proposed new draft of Memorandum of Association is available on
at the Company’s registered office during working hours for the perusal www.surattextilemillsltd.com of the Company and is also being available
of the Members. at the Company’s registered office during working hours for the perusal
None of the Directors, Key Managerial Personnel of the Company and of the Members.
their relatives are, in any way, concerned or interested, financially or In terms of Section 4 and 13 of the Companies Act, 2013, the consent
otherwise, in the Resolution set out at Item No.5 of the Notice for of the Members by way of Special Resolution is required for proposed
approval of the Members. amendments in the Memorandum of Association of the Company.
The Board recommends the Special Resolution set out at Item No.5 of None of the Directors, Key Managerial Personnel of the Company and
the Notice for ratification by the Members. their relatives are, in any way, concerned or interested, financially or
Item No.6: otherwise, in the Resolution set out at Item No.6 of the Notice for
approval of the Members.
With introduction of the Companies Act, 2013 w.e.f. 1st April, 2014
many provisions of the Companies Act, 1956 have undergone changes The Board recommends the Special Resolution set out at Item No.6 of
with few of them become redundant. The present Memorandum of the Notice for ratification by the Members.
Association of the Company contains many matters which are required
to be aligned with the requirements under the new Companies Act, By Order of the Board of Directors
2013. Registered Office: For Surat Textile Mills Limited
Tulsi Krupa Arcade, 6th Floor,
Your directors’ in its meeting held on 21st July, 2020 has approved Puna-Kumbharia Road, Hanisha Arora
(subject to the approval of members) modification, substitution, Dumbhal, Surat 395010. Company Secretary
addition and deletion in following Clauses of the Memorandum of
Association of the Company: Place: Surat
Date: 21st July, 2020

74th Annual Report 2019-2020 9

 SURAT TEXTILE MILLS LIMITED
DETAILS OF DIRECTOR SEEKING APPOINTMENT / RE-APPOINTMENT AT THE ANNUAL GENERAL MEETING
(Pursuant to Regulation 26(4) and 36(3) of Listing Regulations and Secretarial Standards-2 on General Meetings)

Name of the Director Mr. Manikant R. Momaya Mr. Ketan A. Jariwala

(Managing Director) (Non-Executive Independent Director)
DIN 00023993 02095540
Date of Birth 19/03/1932 08/05/1962
Age 88 years 58 years
Date of first appointment on the Board 23/10/2000 11/08/2014
Qualification B.E. (Mechanical & Electrical) Diploma in Textile Technology
(M.S. University, Baroda)
Expertise in specific functional areas Mr. Manikant R. Momaya has wide experience Mr. Ketan Jariwala is an industrialist and a
in the field of Textile industry, business and technocrat engaged in the business of manmade
Corporate Management. textiles and having more than two decades of
experience in the related industry.
Terms and conditions of Not applicable. Appointed for a period of four years from
appointment or re-appointment 26/08/2020 to 10/08/2024.
Details of Rs.8,40,240/- Sitting Fees: Rs.2,45,000/-
remuneration last
drawn#
(FY 2019-20)
Directorship in other Public Companies Nil Garden Silk Mills Limited
(excluding foreign companies and
Section 8 companies)
Memberships / Chairmanship of Nil Garden Silk Mills Limited
committees in other public limited Audit Committee – Member
companies Nomination & Remuneration Committee -
Member
Stakeholders Relationship Committee - Chairman
and
CSR Committee - Member
No. of Board 5 6
Meetings attended
during the year
Relationship with None None
other Directors and
KMPs
Number of shares held:
(a) Own Nil Nil
(b) F or other persons on a beneficial Nil Nil
basis

10 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
DIRECTORS’ REPORT & MANAGEMENT’S DISCUSSION AND ANALYSIS
Dear Shareholders,
Your Directors present their 74th Annual Report on the performance of the Company together with the Audited Financial Statements for the
financial year ended 31st March, 2020. The Management’s Discussion and Analysis Report as required under the Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this report.
Financial Highlights
The financial performance of the Company for the financial year ended 31st March, 2020 is summarised below:
(Rs. in Crore)
Particulars 2020 2019
Revenue from Operations 180.28 216.28
Other income 4.61 4.07
Operating Profit / EBITDA (including other income) 12.01 12.18
Less: Finance Costs 0.76 1.08
Profit before Depreciation & Amortisation Expenses 11.25 11.10
Less: Depreciation & Amortisation Expenses 0.46 0.35
Profit before tax 10.79 10.75

Review of Operations Close watch on raw material prices and strict inventory management
has helped the Company in securing continued raw material supplies
In terms of Order issued by Government of India/State Government/
and protected against adverse impact of raw material price volatility.
Local Administration for containment of COVID-19 in the country,
directing nationwide lock down in the entire country w.e.f. 25th March, The Company continued its efforts for expanding customer base,
2020, and in consideration of the safety of our workers, employee developing new products and exploring further export avenues. The
and the surrounding community, the Company decided to shut down focus will be on how the Company balance volume growth, pricing and
its manufacturing facilities at Village Jolva, Taluka Palsana, Dist. Surat, profitability.
Gujarat, in phased manner.
The Company continues to have a clear price and product leadership
The spread of coronavirus pandemic to different countries in the last in its specialty chips segment, especially cationic. It continues to be
quarter and resulting lockdown by various countries worldwide leading perceived in the market as a premium producer of quality chips.
to shutdown of manufacturing plants including the raw material
suppliers added to the slowdown of overall demand and weakening of Better working capital management helped the Company to reduce its
the various commodities. The supply chains came under pressure due Interest/Finance Costs from Rs.1.08 Crore in FY 19 to Rs.0.76 Crore for
to additional restrictions and constraints in material movements and FY 20.
port clearances during the lockdown.
The Company resumed manufacturing operation at its Polycondensation
Your Company’s total revenue for the year 2019-20 was Rs.180.28 Crore Plant at Village Jolwa in a gradual manner however owing to lack of
as compared to Rs.216.28 Crore for the previous year, a decline of about demand for the specialty chips coupled with migration of labour, the
16.65%. The fall in sales was primarily due to lower price realisation, operations have been temporarily suspended. The production at
competition and subdued market conditions. polyester spinning division of the Company at Village Jolwa continued
Despite lower revenues, we achieved Operating Profit / EBITDA of to remain suspended during the year 2019-20 also due to competitive
Rs.12.01 Crore in FY20 as compared to Rs.12.18 Crore in the previous pressure and market conditions.
year. This was possible despite a challenging year that show an oil-price
The Board of Directors of the Company have considered the proposal
driven crash in raw material prices leading to inventory losses during
for sell/transfer/dispose of the assets of ‘Spinning Division’ and the
some part of the year and weak market sentiments.
Polycondensation Plant at Village Jolwa along with Land & Building and
Your Company earned Profit before Tax of Rs.10.79 Crore for FY20 as the Inventories on an “as is where is” basis. The Directors are of the
compared to Rs.10.75 Crore in previous year. The total sale of chips in view that the current economic slowdown due to COVID-19 pandemic
volume term for the year FY20 was higher at 22379 MT as compared may impact the valuation of the proposed transactions. Accordingly,
to 20803 MT in the previous year. With better capacity utilisation, the management of the Company is reconsidering and evaluating the
the production of Chips during FY20 was also higher at 23325 MT as proposal to fetch better price in the interest of the Company.
compared to 22046 MT in the previous year.

74th Annual Report 2019-2020 11

 SURAT TEXTILE MILLS LIMITED
During the last quarter of the year under review the incidence of manufacturing sector output, the government has spearheaded several
Covid-19 developed into a global pandemic. The directors have assessed campaigns, reforms and initiatives like make in India, Start-up India to
the impact of Covid-19 on the business at the balance sheet date and help the sectors increase its share in the overall GDP.
there are no significant changes as of the balance sheet date.
Industry Scenario
Dividend
The Indian textile sector is a major contributor to the Indian economy
In order to strengthen the reserves of the year, your directors consider it in terms of GDP, industrial production and the country’s total export
prudent to plough back the profits and not to recommend any dividend earnings. The Indian textile industry is passing through a turbulent
for the financial year 2019-20. phase. With the global downturn ravaging economies, the textile sector
Transfer to Reserves is one of the worst hit.

The Board of Directors have decided to retain the entire amount of During the year under review, the market of polyester filament yarn
profits for FY 2019-20 in the Retained Earnings. remained subdued. Higher raw material prices, the slow pace of growth
in demand and increase in supply were contributing factors. The PFY
Nature of Business spinning industry has gone through a difficult period.
Your Company is known to be a producer of polyester chips and India is the second largest producer of man-made fibres (MMF) in the
differentiated partially oriented yarn (POY). During the year under world with presence of large plants having state-of-the art technology.
review, there was no change in the nature of business of the Company. Indian Manmade fibre (MMF) textile industry is vibrant and growing.
Demand for man-made fibre (MMF) textiles all over the world is
Overview of the economy
increasing as a substitute for cotton amid changes in global fashion
India’s economy slowed down to 3.1% in Q4 on the back of the trends.
coronavirus pandemic superimposed on a prolonged slowdown.
Economic growth slowed to an 11-year low of 4.2% in 2019-20 against India is presently self dependent in the entire textile value chain. It
6.1% expansion in 2018-19. Although this is the lowest growth rate in has sufficient raw materials / feedstock for the manufacturing MMF
the last 44 quarters, it is still higher than the 2.2% growth predicted by textiles. Adequate feedstock availability reduces India’s dependency on
most economists and ratings analysts. other countries for raw materials and able to produce MMF textiles of
international standard to meet the global demand.
A country-wide lock down was enforced by the government in late
March 2020 due to the COVID-19 pandemic. The economic impact of Raw material prices of PTA and MEG fluctuated widely during FY 20
this has been so devastating that manufacturing and services activity from a high of around USD 857 and USD 604 per MT to a low of around
came to a grinding halt, resulting in demand falling to unprecedented USD 515 and USD 475 per MT respectively.
lows that fed into PMI indices going into a free fall. The country is
Opportunities, Challenges, Threats, Risks and Concerns
now faced with enormous job losses, migration of labour, increased
expenses in medical and health infrastructure, lower tax collections and The rampant spread of COVID-19 outbreak, across borders and
high fiscal deficit. geographies, has severely impacted almost the whole world and
The manufacturing sector contracted further, recording a negative triggered significant downside risks to the overall global economic
growth of 1.4%. Public administration, defence and other services grew outlook. The lockdowns and restrictions imposed on various activities
at 10.1%. “The most disturbing news is that the three components due to the pandemic have posed challenges to all the businesses of your
of demand have fallen -- consumption demand has slowed, while Company.
investments and exports are both in negative territory,” The Indian textile & clothing industry has been facing severe challenges
Economic activity remained largely subdued and tighter financial in the aftermath of demonetization, GST implementation, global
conditions impinged upon activity. The Government of India has economic slowdown, US-China trade war and recently, the Coronavirus
responded to this economic fallout by announcing two stimulus outbreak in China.
packages and liquidity easing measures to fuel the economic activity.
Uncertain availability and volatility in prices of key raw materials is the
The lockdown is being removed in a phased manner and efforts are
major concern. The industry is dependent on the international price of
being made to revive the manufacturing, services and other productive
crude oil, which directly impacts the price of both our key raw materials
activities.
PTA and MEG. Any crude supply shock could have an adverse impact on
During the financial year 2019-20, market sentiments remained volatile the performance of the Company.
since the start of the financial year due to escalating trade tensions
In view of the projected growth scenario in Indian Polyester Filament
between US and China, fears of disruptions to supply chains, prolonged
Yarn industry, we expected and improved utilisation levels and margins
uncertainty on Brexit and geopolitical tensions in Middle East.
in the industry and for the Company. Import of raw materials has been
Amongst the growth enabling pillar of the economy, the service minimised owing to better negotiations with local PTA supplies who
sector is the largest contributor to the nation’s GDP, followed by have undertaken capacity expansion. The Company’s strategic location
the manufacturing sector. With the intent to boost the domestic in the heart of the textile industry of Surat and close to Hazira Port
minimizes infrastructural weakness generally faced by the industry.

12 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
The Indian economy provides a large opportunity to the Company to Finance costs
market its products. Slower growth of the Indian economy and stress in
sectors such as textiles could impact the performance of the Company. The interest expense for the year ended 31 March, 2020 was lower at
Rs.0.77 Crore as compared to Rs.1.08 Crore in the previous year.
The Company is exposed to risks attached to various statutes and
regulations. The Company is mitigating these risks through regular Employee benefits expense
reviews of legal compliances, through internal as well as external
The employee benefits expense or personnel cost as a percentage of
compliance audits.
revenue has increased from 1.02% in the previous year to 1.20% in the
Business Outlook current year. Overall employee costs during the year FY20 was at similar
The outlook for industry and the Company in the near term can be levels as previous year.
viewed with cautious optimism. Depreciation, amortisation and impairment expense
Fiscal FY 2021 began with a lockdown, with almost zero economic
Depreciation, amortisation and impairment expenses for FY20 was
activity in India, which took strict measures to contain the spread and
at Rs.0.46 Crore as compared to Rs.0.35 Crore in previous year. The
intensity of the pandemic. With an extended lockdown in Q1-F21, the
increase in depreciation is on account of additional provision for lease
impact on GDP is expected to be significant with the risk of negative
liability.
growth for FY 2021, an all-time low in many years.
As the economy gradually normalises, it is expected that both export Other expenses
and import growth may recover, although the current differential Other expenses as a percentage of revenue for FY20 have increased
between their growth rates is still likely to remain somewhat wide in from 13.69% in the previous year to 16.63% in the current year.
the near future.
Subsidiary, Joint Venture and Associate Companies
We expect the business conditions to remain stable for your Company.
However, the world markets are uncertain at present and majority The Company has no subsidiary / joint venture / associates for the
countries are facing economic issues affecting their growth. financial year ended 31st March, 2020. Accordingly, the requirements
The prospects of synthetic yarn industry in short term is linked with pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5
the movements of crude oil prices in international markets however, of the Companies (Accounts) Rules, 2014 is not applicable.
the long term prospects depend with the growing Indian economy and Indian Accounting Standard (Ind AS)
demand growth in end-use products.
As mandated by the Ministry of Corporate Affairs, the Company has
Continued slowdown in overall textile industry and slowdown in
adopted Indian Accounting Standards (‘Ind AS’) from 1st April, 2017
economic growth in recent months can impact sale growth for current
with a transition date of 1st April, 2016. The financial results of the
year. The export market is not very encouraging either.
Company for the year 2019-20 have been prepared in accordance with
However, the outlook is heavily contingent upon the intensity, spread Indian Accounting Standards (‘Ind AS’) notified under section 133 of the
and duration of the pandemic. Companies Act, 2013 (‘Act’) read with Companies (Indian Accounting
Financial Performance Standards - Ind AS) Rules 2014 as amended and other recognised
accounting practices and policies to the extent applicable.
Operational and Financial Performance
Finance
Total revenue from operation of the Company for FY20 declined by
16.65% at Rs.180.28 Crore as compared to Rs.216.28 Crore in FY19. Your Company has repaid all the Secured Rupee Term Loan from banks.
Earnings before Interest, Tax and Depreciation (EBITDA) for the year There was no outstanding term loan at the beginning or at the end of
FY20 was marginally lower at Rs.12.01 Crore as compared Rs.12.18 financial year 2019-20. No fresh Term Loan was availed by the Company
Crore in the year FY19. during the year. The Company has not availed any working capital facility
from Banks during the year. With the better inventory management,
Other income for the year ended 31 March, 2020 at Rs.4.61 Crore has your Company’s working capital requirements were met out from
increased from Rs.4.07 Crore in the previous year. internal accruals only.
Material cost
Adoption of new set of Memorandum & Articles of Association
Cost of raw material for FY20 constituted 80.83% of total expenses as
compared to 84.14% in previous year FY19. The cost of both major raw The Board of Directors of the Company at its meeting held on 21st July,
materials remained fluctuating during the year. 2020 subject to the approval of shareholders of the Company by Special
Resolution, approved the proposal for adoption of new set of Articles
The material cost as a percentage of revenue decreased from 81.54% in of Association of the Company and Memorandum of Association of the
the previous year to 78.06% in the current year. Company in conformity with the Companies Act, 2013.
Energy cost
Necessary Resolutions for the adoption of new set of Memorandum
Power and Fuel cost for FY20 constituted 5.21% of total expenses. of Association and Articles of Association of the Company have been
Optimizing power and fuel costs is one of the major drivers for improving included in the notice convening the ensuing AGM and requisite details
the Company’s operational performance. have been provided in the explanatory statement of the Notice.

74th Annual Report 2019-2020 13

 SURAT TEXTILE MILLS LIMITED
Corporate Governance Independent Directors

Your Company reaffirms its commitment to Corporate Governance and is In terms of Section 149 of the Act, Mr. Harishchandra Bharucha, Mr.
fully compliant with the conditions of Corporate Governance stipulated Ketan A. Jariwala and Ms. Kruti Kothari are the Independent Directors
in Clause ‘C’ of Schedule V on Annual Report pursuant to Regulation of the Company. The Company has received declarations from all
34(3) of SEBI (Listing Obligations and Disclosure Requirements) the Independent Directors confirming that they meet the criteria
Regulations, 2015. of independence as prescribed under Section 149(6) of the Act and
Regulation 16(1) (b) of the Listing Regulations and are independent
A certificate from M/s Sharp and Tannan, Statutory Auditors of the from the management. They are not liable to retire by rotation in terms
Company confirming compliance to the conditions of Corporate of Section 149(13) of the Act.
Governance as stipulated under SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, is annexed to Report on Corporate The Board is of the opinion that the Independent Directors of the
Governance. The auditor’s certificate for the year 2019-20 does not Company possess requisite qualifications, experience and expertise in
contain any qualification, reservation, adverse remark or disclaimer. the fields of auditing, tax, financial, corporate governance, business
management etc. and that they hold the required standards of integrity.
Directors and Key Managerial Personnel
The Independent Directors of the Company are in the process of
At the 73rd Annual General Meeting of the shareholders of the taking requisite steps towards the inclusion of their names in the data
Company held on 3rd September, 2019, Ms. Kruti Kothari was appointed bank of Independent Directors maintained with the Indian Institute of
as an Independent Director for a period of 5 (five) consecutive years Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of
commencing from 9th July, 2019 and upto 8th July, 2024. the Companies (Appointment & Qualification of Directors) Rules, 2014.

Further, the Board of Directors at the recommendation of Nomination During the year, the Non-Executive Directors of the Company had no
and Remuneration Committee, re-appointed Mr. Ketan A. Jariwala pecuniary relationship or transactions with the Company, other than
(DIN: 02095540) as an Independent Director of the Company for a sitting fee for the purpose of attending the meetings of the Board and
second term of 4 (four) years with effect from 26th August, 2020 upto committees of the Board of which they are the members.
10th August, 2024 subject to approval of shareholders of the Company Separate Meeting of Independent Directors
at the ensuing Annual General Meeting.
In terms of requirements under Schedule IV of the Companies Act,
In accordance with the provisions of Section 152 of the Act and the 2013 and Regulation 25 (3) of SEBI (Listing Obligations and Disclosure
Articles of Association of the Company, Mr. Manikant R. Momaya Requirements) Regulations, 2015, a separate meeting of the
(DIN: 00023993) will retire by rotation at the ensuing Annual General Independent Directors was held on 14th February, 2020.
Meeting of the Company and being eligible, has offered himself for
re-appointment. The Board recommends his re-appointment. The Independent Directors at the meeting, inter alia, reviewed the
following:-
Your Company has received declarations from all the Independent
• Performance of Non-Independent Directors and Board as a whole.
Directors confirming that they meet with the criteria of independence as
prescribed under Section 149(6) of the Companies Act, 2013 and under • Performance of the Chairman of the Company, taking into account
Regulation 16 (1) (b) of the SEBI (Listing Obligations and Disclosure the views of Executive Directors and Non-Executive Directors.
Requirements) Regulations, 2015. Further, pursuant to Section 164(2) • Assessed the quality, quantity and timeliness of flow of information
of the Companies Act, 2013, all the Directors have provided declarations between the Company Management and the Board that is
in Form DIR- 8 that they have not been disqualified to act as a Director. necessary for the Board to effectively and reasonably perform
their duties.
A brief resume of directors being appointed / re-appointed along with
the nature of their expertise, their shareholding in your Company Familiarisation Programme for Independent Directors
and other details as stipulated under Regulation 36 (3) of the SEBI
All the Independent Directors of the Company are made aware of their
(Listing Obligations and Disclosure Requirements) Regulations, 2015 is
roles and responsibilities at the time of their appointment through a
appended as an annexure to the Notice of the ensuing Annual General
formal letter of appointment, which also stipulates various terms and
Meeting.
conditions of their engagement.
Key Managerial Personnel (‘KMP’) Pursuant to Regulation 25(7) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (“SEBI Listing Regulations”), the
The following have been designated as the Key Managerial Personnel
Company imparted various familiarisation programmes for its Directors
of the Company pursuant to Sections 2(51) and 203 of the Companies
including Industry Outlook at the Board Meetings, Regulatory updates
Act, 2013 read with the Companies (Appointment and Remuneration of
at Board and Audit Committee Meetings covering changes with respect
Managerial Personnel) Rules, 2014:
to the Companies Act, SEBI Listing Regulations, Prevention of Insider
1. Mr. Manikant R. Momaya, Managing Director Trading Regulations, Framework for Related Party Transactions, Meeting
2. Mr. Yogesh C. Papaiya, Wholetime Director & Chief Financial with Senior Executive(s) of your Company, etc.
Officer (CFO) The Directors are provided with all the documents to enable them to
3. Ms. Hanisha Arora, Company Secretary and Compliance Officer have a better understanding of the Company, its various operations

14 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
and the industry in which it operates. Executive Directors and Senior Disclosure Relating to Remuneration of Directors and Key Managerial
Management provide an overview of the operations and familiarise Personnel
the new Non-Executive Directors on matters related to the Company’s
values and commitments. The remuneration paid to the Directors is in accordance with the
Remuneration Policy formulated in accordance with Section 178 of the
Pursuant to Regulation 46, the details required are available on the Companies Act, 2013.
website of your Company at http://www.surattextilemillsltd.com/
policies.aspx Disclosures of the ratio of the remuneration of each director to the
median employee’s remuneration and other details as required
Declaration by Independent Director pursuant to Section 197(12) of the Companies Act, 2013 read with Rule
5(1) of the Companies (Appointment and Remuneration of Managerial
For the Year 2019-20, all the Independent Directors of the Company Personnel) Rules, 2014 are provided as ‘Annexure C’.
have given their declaration to the Company that they meet the
criteria of independence as laid down under Section 149(7) read with The details of remuneration paid to the Directors including Executive
Section 149(6) of the Companies Act, 2013 and Regulation 16 of the Directors of the Company are given in Form MGT-9 forming part of the
Listing Regulations and affirmed compliance with Code of Ethics and Directors Report.
Business Principles as required under Regulation 26(3) of SEBI (LODR)
Regulations, 2015 (as amended). The Appointment and Tenure of the Attributes, Qualifications & Independence of Directors and their
Independent Directors, including code for Independent Directors are Appointment
available on the website of the Company, www.surattextilemillsltd.com. The Nomination & Remuneration Committee of Directors has approved
Code of Conduct for Directors and Senior Management a Policy for the Selection, Appointment and Remuneration of Directors,
which inter-alia, requires that the Directors shall be of high integrity with
All Board members and Senior Management personnel have affirmed relevant expertise and experience to have a diverse Board. The Policy
compliance with the Code of Conduct for the year 2019-20. A also lays down the positive attributes, criteria while recommending the
declaration to this effect signed by the Managing Director of the candidature for the appointment of a new Director.
Company is contained in this Annual Report. The Managing Director and
CFO have certified to the Board with regard to the financial statements Directors are appointed/re-appointed with the approval of the
and other matters as required under regulation 17(8) of the SEBI Listing Members for a term in accordance with the provisions of the law and
Regulations, 2015. the Articles of Association. The initial appointment of Managing /
Wholetime Director is generally for a period of 3-5 years. All Directors
Code for Prevention of Insider Trading other than Independent Directors are liable to retire by rotation unless
otherwise specifically provided under the Articles of Association or
Your Company has adopted a Code of Conduct to regulate, monitor and under any statute. One-third of the Directors who are liable to retire
report trading by designated persons and their immediate relatives as by rotation, retire at every Annual General Meeting and are eligible for
per the requirements under the Securities and Exchange Board of India re-appointment.
(Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct
also includes code for practices and procedures for fair disclosure of The NRC has formulated the criteria for determining qualifications,
unpublished price sensitive information which has been made available positive attributes and independence of Directors in terms of provisions
on the Company’s website at http://www.surattextilemillsltd.com/ of Section 178 (3) of the Act and the Listing Regulations.
policies.aspx
Committees of Board
Nomination and Remuneration Policy
Pursuant to requirement under Companies Act, 2013 and SEBI (Listing
The Board of Directors of the Company has adopted on recommendation Obligations and Disclosure Requirements) Regulations, 2015, the Board
of the Nomination and Remuneration Committee, a policy for selection of Directors has constituted various Committees of Board such as Audit
and appointment of Directors, senior management and remuneration Committee, Nomination & Remuneration Committee, Stakeholders
including criteria for determining qualifications, positive attributes, Relationship Committee and Corporate Social Responsibility Committee.
independence of Directors and other matters provided in section 178 The details of composition and terms of reference of these Committees
(3) of the Companies Act, 2013. are mentioned in the Corporate Governance Report.
The main objective of the said Policy is to ensure that the level and Internal Financial Control System and their Adequacy
composition of remuneration is reasonable and sufficient to attract,
retain and motivate the Directors, KMPs and Senior Management Your Company’s Financial Statements are prepared on the basis
employees. of the Significant Accounting Policies that are carefully selected by
Management and approved by the Audit Committee and the Board.
Particulars of the Company’s Remuneration Policy and information These Accounting policies are reviewed and updated from time to time.
required under Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rule, 2014 as set out in The Company uses Oracle e business suite ERP systems as a business
‘Annexure D’, forms part of this Report. The said policy has been posted enabler and to maintain its Books of Account. The transactional controls
on the website of the Company http://www.surattextilemillsltd.com/ built into the Oracle ERP systems ensure appropriate segregation of
policies.aspx. duties, appropriate level of approval mechanisms and maintenance of
supporting records.

74th Annual Report 2019-2020 15

 SURAT TEXTILE MILLS LIMITED
Your Company has in placed adequate Internal Financial Controls with Performance evaluation of Board
reference to the Financial Statements commensurate with the size,
scale and complexity of its operations. Pursuant to the provisions of the Companies Act, 2013 and Regulation
17(10), the Board has devised a policy on evaluation of performance
The findings of the Internal Audit Report are reviewed by the Audit of Board of Directors, Committees and Individual directors. The policy
Committee of the Board and proper follow-up actions are ensured is also in compliance to Regulation 19 read with Schedule II, Part D of
wherever required. The Statutory Auditors have evaluated the internal the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
financial controls framework of the Company and have reported that 2015. The Nomination and Remuneration Committee has defined the
the same are adequate and commensurate with the size of the Company evaluation criteria for the Performance Evaluation of the Board, its
and nature of its business. Committees and individual Directors.

Adequate internal control systems safeguard the assets of the Company The performance of the Board and individual Directors was evaluated
with timely identification and intervention to assuage risks. The internal by the Board after seeking inputs from all the Directors. The criteria
audit report is discussed with the Management and members of the for performance evaluation of the Board was based on the Guidance
Audit Committee to keep a check on the existing systems and take Note issued by SEBI on Board Evaluation which included aspects such
corrective action to further enhance the control measures. as Board composition and structure, effectiveness of Board processes,
contribution in the long term strategic planning etc. The result of the
Directors’ Responsibility Statement evaluation is satisfactory and adequate and meets the requirements of
the Company.
Pursuant to the requirements of Section 134(1)(c) read with Section
134(5) of the Companies Act, 2013 and on the basis of explanation and The independent directors were highly satisfied with the overall
compliance certificate given by the executives of the Company, and functioning of the Board, its various committees and with the
subject to disclosures in the Annual Accounts and also on the basis of performance of Executive Directors. They also appreciated the
discussions with the Statutory Auditors of the Company from time to leadership role of the Board Chairman in upholding and following the
time, we state as under: standards of corporate governance.

(a) that in the preparation of the annual accounts for the year ended Particulars of Employees and Related Disclosures
31st March, 2020, the applicable accounting standards read with
During the financial year 2019-20, none of the employee of the Company
requirements set out under Schedule III to the Act, have been
was in receipt of remuneration prescribed in terms of the provision of
followed and there are no material departures from the same;
Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and
(b) that the directors have selected such accounting policies and 5(3) of the Companies (Appointment and Remuneration of Managerial
applied them consistently and made judgments and estimates Personnel) Rule, 2014.
that are reasonable and prudent so as to give a true and fair view Statutory Auditors
of the state of affairs of the Company as at 31st March, 2020 and
of the profit of the Company for the year ended on that date; M/s Sharp and Tannan Associates, Chartered Accountants (ICAI Firm
Registration No. 109983W) were appointed as the Statutory Auditors of
(c) that the directors have taken proper and sufficient care for the the Company for a period of 5 years commencing from the conclusion
maintenance of adequate accounting records in accordance with of the 71st Annual General Meeting until the conclusion of 76th Annual
the provisions of the Companies Act, 2013 for safeguarding the General Meeting by the shareholders on such remuneration as may be
assets of the Company and for preventing and detecting fraud and determined by the Board of Directors.
other irregularities;
The Statutory Auditors have confirmed that they hold a valid certificate
(d) that the directors have prepared the annual accounts on a going issued by the Peer Review Board of the Institute of Chartered
concern basis; Accountants of India (ICAI).
(e) that the Board has laid down internal financial controls to be The Auditors have also furnished a declaration confirming their
followed by the Company and that such internal financial controls independence as well as their arm’s length relationship with the
are adequate and are operating effectively; and Company as well as declaring that they have not taken up any prohibited
non-audit assignments for the Company. The Audit Committee reviews
(f) that the directors have devised proper systems to ensure the independence of the Auditors and the effectiveness of the Audit
compliance with the provisions of all applicable laws and that such process. The Auditors attend the Annual General Meeting of the
systems are adequate and operating effectively. Company.
Meeting of the Board of Directors The Notes on financial statement referred to in the Auditors’ Report are
During the year 2019-20, your Company had convened and held 6 self-explanatory and do not call for any further comments. The Auditors
(six) Board Meetings. The Details of the Board Meeting with regard to report for the financial year 2019-20 on the financial statements of the
their dates and attendance of each of the Directors thereat have been Company forms part of this Annual Report. There are no qualifications,
provided in the Corporate Governance Report. The intervening gap reservations or adverse remark or disclaimer made in the audit report
between the meetings was within the period prescribed under the for the Financial Year 2019-20.
Companies Act, 2013 and SEBI Listing Regulations.

16 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
Cost Auditors Company Secretaries, (CP No.14468) to carry out Secretarial Audit of
the Company. The Report of the Secretarial Auditor in the prescribed
The Board had appointed Messrs M/s P. M. Nanabhoy & Co., Cost
form MR-3 is attached as ‘Annexure E’. There are no qualifications,
Accountants, (Firm Registration Number 000012) as Cost Auditor for
reservations or adverse remark or disclaimer made in the Secretarial
conducting the audit of cost records of the Company for the Financial
Audit Report for the Financial Year 2019-20.
Year 2019-20 on a remuneration of Rs.75,000 plus out of pocket
expenses and applicable taxes. Pursuant to Companies (Cost Records Annual Secretarial Compliance Report
and Audits) Rules, 2014 the Cost Audit Report for the financial year
The Company has undertaken an audit for the Financial Year 2019-20
2019 was filed with the Ministry of Corporate Affairs on 9th August,
for all applicable compliances as per Securities and Exchange Board
2019 vide SRN H81873994.
of India Regulations and Circulars/Guidelines issued thereunder. The
The Board of Directors on the recommendation of the Audit Committee, Annual Secretarial Compliance Report duly signed by Mr. Jigar Vyas
appointed M/s P. M. Nanabhoy & Co. Cost Accountants, (Firm Practicing Company Secretary (ICSI Membership No.FCS 8019) has been
Registration Number 000012), as the Cost Auditors of the Company for submitted to the Stock Exchange.
the Financial Year 2020-21 under Section 148 of the Companies Act, Audit Committee
2013 and has recommended their remuneration to the Shareholders for
their ratification at the ensuing Annual General Meeting. The Audit Committee comprises of 4 Directors viz. Ms. Kruti Kothari,
Chairman and Mr. Harishchandra Bharucha, Mr. Ketan A. Jariwala and
M/s P. M. Nanabhoy & Co. have confirmed that their appointment is Mr. Yogesh C. Papaiya as Members. All the Members of the Committee
within the limits of Section 141(3)(g) of the Companies Act, 2013 possess strong accounting and financial management knowledge. The
and have also certified that they are free from any disqualifications Company Secretary of the Company is the Secretary of the Committee.
specified under Section 141(3) and proviso to Section 148(3) read
with Section 141(4) of the Companies Act, 2013. The Audit Committee All the recommendations made by the Audit Committee during the year
has also received a Certificate from the Cost Auditors certifying their were accepted by the Board.
independence and arm’s length relationship with the Company. Vigil Mechanism
As per the provisions of the Companies Act, 2013, the remuneration The Vigil Mechanism as envisaged in the Companies Act, 2013,
payable to the Cost Auditor is required to be placed before the Members the Rules prescribed thereunder and the SEBI (Listing Obligations
in a General Meeting for their ratification. Accordingly, a Resolution and Disclosure Requirements) Regulations, 2015 is implemented
seeking Members’ ratification for the remuneration payable to through the Company’s Whistle Blower Policy to enable the Directors,
M/s P. M. Nanabhoy & Co. Cost Auditors is included in the Notice employees and all stakeholders of the Company to report genuine
convening the 74th Annual General Meeting. concerns, to provide for adequate safeguards against victimization of
Cost Records persons who use such mechanism and make provision for direct access
to the Chairman of the Audit Committee.
As per Section 148 of the Companies Act, 2013, read with the
Companies (Cost Records and Audit) Rules, 2014, your Company is Whistle Blower Policy of your Company is available on the Company’s
required to maintain cost records and accordingly, such accounts and website http://www.surattextilemillsltd.com/policies.aspx
records are maintained. Contracts or Arrangements with Related Parties
Internal Auditor All transactions entered into with Related Parties as defined under
Pursuant to the provisions of Section 138 of the Companies Act, 2013 Section 2(76) of the Companies Act, 2013 and Regulation 23 of
and Rules made thereunder the Board of Directors of the Company have the Securities and Exchange Board of India (Listing Obligations and
appointed M/s Aadil Aibada & Associates (ICAI Membership No.045310), Disclosure Requirements) Regulations, 2015, (“The Listing Regulations”),
Chartered Accountants as Internal Auditors of the Company, for the during the financial year were in the ordinary course of business and at
financial year 2020-21. an arm’s length pricing basis and do not attract the provisions of Section
188 of the Companies Act, 2013.
The audit committee in consultation with the Internal Auditor formulates
Suitable disclosure as required by the Indian Accounting Standards
the scope, functioning, periodicity and methodology for conducting the
(Ind AS 24) has been made in the notes forming part of the Financial
internal audit.
Statements.
The Internal Audit department carries out risk-focused audits across
The Company has formulated a policy on materiality of Related Party
all locations, enabling identification of areas where risk management
Transactions and dealing with Related Party Transactions which has
processes may need to be strengthened. Significant audit observations
been uploaded on the Company’s website which can be accessed at
and corrective action plans are presented to the Audit Committee.
following link www.surattextilemillsltd.com.
Secretarial Auditor and Report
Pursuant to Regulation 23(9) of the Listing Regulations your company
Pursuant to the provisions of Section 204 of the Companies Act, 2013 has filed half yearly report on Related Party Transactions with the stock
and the Companies (Appointment and Remuneration of Managerial exchanges.
Personnel) Rules, 2014, the Board of Directors of the Company have
All transactions with related parties were reviewed and approved by the
appointed, Jigar Vyas (FCS No.8019) of Jigar Vyas & Associates, Practicing
Audit Committee.

74th Annual Report 2019-2020 17

 SURAT TEXTILE MILLS LIMITED
Pursuant to section 134(3)(4) of the Companies Act, 2013 and Rules Corporate Social Responsibility Report, pursuant to clause (o) of sub
made thereunder, particulars of transactions with related parties as section (3) of Section 134 of the Act and Rule 9 of the Companies
required under section 188(1) of the Companies Act, 2013, read with (Corporate Social Responsibility) Rules, 2014 including salient features
Rule 8(2) of Companies (Accounts) Rules, 2014 is annexed with this mentioned under outline of Company’s CSR policy forms part of this
Report in Form AOC-2 as ‘Annexure F’. Report as ‘Annexure B’.
Reporting of Fraud The CSR Policy of the Company is available on the website of the
Company http://www.surattextilemillsltd.com/policies.aspx
During the year under review, neither the statutory auditors nor the
secretarial auditors has reported to the Audit Committee under Section CEO and CFO certification.
143(12) of the Companies Act, 2013, any instances of fraud committed Pursuant to the Listing Regulations, Managing Director and CFO
against the Company by its officers or employees, the details of which Certification is attached with Annual Report. Managing Director and CFO
needs to be mentioned in this Report. also provide quarterly certification on financial results, while placing the
Energy, technology and foreign exchange financial results before the Board in terms of the Listing Regulations.

Information on the conservation of energy, technology absorption, Health, safety and environment
foreign exchange earnings and outgo, as required to be given pursuant Your Company believe that organisations’ sustainability is directly
to the provisions of Section 134 of the Act read with the Companies proportional to the safety, health and environment management. We
(Accounts) Rules, 2014, which is marked as ‘Annexure A’ and forms part endeavour to demonstrate environmental and social responsibility at
of this report. every step.
Prevention of Sexual Harassment (‘POSH’) We are devoted to benefit communities – workforce, public and
environment. Our safety, health and environment objectives include
The Company has constituted an Internal Complaints Committee under complying with all applicable laws relevant to the industry. The
section 4 of the Sexual Harassment of women at workplace (Prevention, Management believes in sharing responsibility throughout the hierarchy
prohibition and Redressal) Act, 2013. in conforming to the existing laws.
The Company has a Policy on “Prevention of Sexual Harassment of The Company obtained necessary approvals from concerned
Women at Workplace” and matters connected therewith or incidental Government Department / Pollution Control Board and all required
thereto covering all the aspects as contain under “The Sexual environment clearances / safety clearances / stipulations are complied
Harassment of Women at Workplace (Prevention, Prohibition and with at Plant facilities of the Company. The Company continues to focus
Redressal) Act, 2013”. on maintenance and performance improvement of related pollution
During the year under review, there were no cases filed pursuant to the control facility at its manufacturing locations.
Sexual Harassment of Women at Workplace (Prevention, Prohibition Your Company has adopted several measures to maintain ecological
and Redressal) Act, 2013. balance in and around our production facilities.
The Policy of the “Prevention of Sexual Harassment of Women at Industrial Relations / Human Resources
Workplace” of the Company is available on the website of the Company
The industrial relations scenario continued to be largely positive across
http://www.surattextilemillsltd.com/policies.aspx
the manufacturing locations. Significant emphasis was also laid towards
Corporate Social Responsibility (CSR) raising awareness on health and wellness of employees through annual
medical check-ups and health awareness activities.
The Company has constituted a Corporate Social Responsibility (CSR)
Committee in accordance with Section 135 of the Companies Act, 2013. In line with the ‘Go Green’ philosophy, your Company is continuously
The CSR Committee comprises of Mr. Ketan Jariwala as the Chairman, adopting new techniques to eliminate and minimise the overall
Mr. Harishchandra Bharucha and Mr. Yogesh C. Papaiya as Members. environmental impact. The Company continuously works to nurture this
environment to keep its employees highly motivated, result oriented
The CSR Committee of the Company has laid down the policy to meet and adaptable to changing business environment. Your Company’s
the Corporate Social Responsibility. The CSR Policy includes any activity value proposition is based on providing value to our customer, through
that may be prescribed as CSR activity as per the Rules of the Companies innovation and by consistently improving efficiency at all levels.
Act, 2013. The CSR Committee met on 20th March, 2020 to review the
Corporate Social Responsibility Policy. Your Directors wish to place on record their appreciation for the
dedicated and commendable services rendered by the employees of
During the year under review, your Company has spent Rs.27.89 Lakhs the Company. The strength of permanent employees as on 31st March,
on CSR activities. The average net profit for the past three financial years 2020 was 53 Nos.
was Rs.1383.69 Lakhs.
Information Technology
The CSR Committee will further continue to identify the project which
can be covered under the CSR guidelines in compliance with the CSR Information Technology is the driving force of the business. The
objectives and policy of the Company. Company is continuously adopting and utilizing various information
technology tools and successfully implemented new age technologies
Towards the end of the financial year, the Company took various
like Internet of Things (IOT), among other, to improve business process
initiatives towards financial, medical and community support in the
efficiency.
fight against Covid-19 pandemic.

18 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
As a part of Digital Transformation journey, your Company has Policies
implemented production planning and execution system, which was
The details of the Key Policies adopted by the Company are mentioned
otherwise manual process.
in the Corporate Governance Report as Annexure to the Board’s Report.
The system for adopting GST in Oracle EBS12 implemented by the Deposits from Public
Company is in operation. This project was carried out entirely in house.
Your Company has not accepted any deposits within the meaning of
Secretarial Standards Section 73 to 76 of the Companies Act, 2013. Hence, the disclosures
required as per Rule 8 (5) (v) & (vi) of the Companies (Accounts) Rules,
The Directors have devised proper systems and processes for complying 2014, are not applicable to your Company.
with the requirements of applicable Secretarial Standards issued by the
Institute of Company Secretaries of India and that such systems were Particulars of Loans/Advances/Investments
adequate and operating effectively.
There were no transaction(s) with a company belonging to the
Significant / Material Orders passed by the Regulators promoter/promoter group which hold(s) more than 10% shareholding
in the Company. Details as required pursuant to para A of Schedule V of
No significant material orders have been passed during the year under the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
review by the regulators or courts or tribunals impacting the going 2015 is disclosed separately in the Financial Statements of the Company.
concern status and Company’s operations in future.
Extract of Annual Return
Material Changes and commitments Pursuant to Section 134(3)(s) of the Companies Act, 2013 read with Rule
12(1) of the Companies (Management and Administration) Rules, 2014,
The rampant spread of COVID-19 outbreak, across borders and
an extract of the Annual Return in Form MGT-9 referred to in Section
geographies, has severely impacted almost the whole world and
92(3) of the Act is attached as ‘Annexure G’ to this Report.
triggered significant downside risks to the overall global economic
outlook. Due to the lockdown announced by the Government of India The Annual Return will be hosted on website of the Company at http://
from 25th March, 2020, entire operations of the Company came to a www.surattextilemillsltd.com/policies.aspx after necessary certification
halt. and filing the same with the authority.
Although there are uncertainties due to the pandemic, the Company is Business Responsibility Report
taking several measures to mitigate the adverse impact by optimising The Business Responsibility Reporting as required by Regulation 34(2) of
costs and continuously realigning the cost-structures to the activity the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
level. 2015, is not applicable to your Company for the financial year ended
Except the impact of COVID-19 as mentioned in this report, no material 31st March, 2020.
changes and commitments affecting the financial position of your Statutory compliance
Company have occurred between the end of the financial year of the
Company to which the financial statements relate and on the date of Ms. Hanisha Arora, Company Secretary and Compliance Officer makes
this report. a declaration at each Board Meeting regarding the compliance with the
provisions of various statutes, after obtaining confirmation from all the
Risk Management locations of the Company.

Your Company periodically assesses the risks in the internal and She also ensures compliance accordance to SEBI regulations and
external environment along with treating the risks and incorporates risk Companies Act, 2013 and rules thereof and all other applicable statutes.
management plans in its strategy, business and operational plans. Your The Company has identified the following ratios as key financial ratios:
Company recognizes that the risk is an integral part of business and is
committed to managing the risks in proactive and efficient manner.
Sr. Particulars FY2019-20 FY2018-19
The business plan for the future are devised and approved by the Board No.
keeping in mind the risk factors which can significantly impact the 1 Debtors Turnover Ratio (times) 48.01 85.10
performance of the particular business. All major financial commitments
2 Inventory Turnover Ratio (times) 14.46 12.43
are subject to scrutiny by the Board and investments are permitted only
on being satisfied about its returns or utility to the Company. There are 3 Interest Coverage Ratio (times) 15.70 11.25
no risks which in the opinion of the Board threaten the existence of the 4 Current Ratio (times) 10.62 4.45
Company.
5 Debt Equity Ratio (times) * -- --
Insurance 6 Operating Profit Margin (%) 3.85 3.59
The Company has taken all the necessary steps to insure its properties 7 Net Profit Margin (%) 4.33 5.62
and insurable interests, as deemed appropriate and also as required 8 Return on Net Worth (%) 6.25 10.05
under the various legislative enactments.
* The Company has no long term debt.

74th Annual Report 2019-2020 19

 SURAT TEXTILE MILLS LIMITED
General the Company’s operations includes global and domestic demand
and supply conditions affecting selling prices, new capacity addition,
Your Directors state that no disclosure or reporting is made with respect availability of critical materials and their cost, changes in government
to the following items, as there were no transactions during the year policies and tax laws, economic development of the countries and other
under review: factors that are material to the business operations of the Company.
1. The issue of equity shares with differential rights as to dividend, Appreciation
voting or otherwise.
Your Directors wish to acknowledge the co-operation and assistance
2. The issue of Shares to employees of the Company under any extended to the Company by the Company’s Bankers and State &
Scheme [(Including Sweat Equity Shares and Employees Stock Central Government agencies.
Option Schemes (ESOS)] referred to in this Report.
Your Directors also acknowledge with gratitude the support of
3. Voting rights which are not directly exercised by the employees in customers, dealers, agents and suppliers and all other stakeholders for
respect of shares for the subscription/purchase of which loan was their continued faith and support which has helped the Company to
given by the Company (as there is no scheme pursuant to which sustain its growth even during these challenging times.
such persons can beneficially hold shares as envisaged under
Section 67(3) (c) of the Companies Act, 2013). The Board of Directors also wish to place on record its sincere
appreciation for the committed services by the Company’s executives,
4. There is no change in the share capital structure of the Company staff and workers. Your Directors also appreciate and acknowledge the
during the year under review. confidence reposed in them by shareholders and other investors of the
5. There was no revision in the financial statements. Company.

Caution Statement For and on behalf of the Board of Directors

Statements in the Directors Report and the Management Discussion
and Analysis describing the Company’s objectives, expectations or
Manikant R. Momaya
predictions may be forward looking within the meaning of applicable
securities laws and regulations. Actual results may differ materially from Managing Director
those expressed in the statements. Crucial factors that could influence Surat, 21st July, 2020 DIN: 00023993

20 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
Annexure – A TO THE DIRECTORS’ REPORT
Conservation of Energy, Technology Absorption and Foreign Exchange
B.
TECHNOLOGY ABSORPTION
Earnings and Outgo
I. The efforts made by the Company towards technology
The information under Section 134(3)(m) of the Companies Act, 2013
absorption
read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 for the
year ended 31st March, 2020 is given below and forms part of the The Company made required efforts for productivity
Directors’ Report. enhancement and development of new products in
polyester chips segment.
A. CONSERVATION OF ENERGY
II. The benefits derived like product improvement, cost
The Company is engaged in the continuous process of energy
reduction, product development or import substitution.
conservation through improved operational and maintenance
practices: 1. Reduce maintenance and operating cost at
manufacturing level in chips segment.
I. Steps taken or impact on conservation of energy.
2. Improvement in quality, customer satisfaction and
- Energy conservation is an ongoing process in our
enlargement of market base.
organisation. Continuous monitoring, planning,
development and modifications for energy III. Information regarding imported technology
conservation are done at the plants. (imported during the last three years reckoned from the
- The Company continued efforts for improving energy beginning of the financial year)
efficiency through innovative measures to reduce 1. Technology imported : NIL
wastage and optimize consumption.
2. Year of Import : Not applicable.
- Maintenance of the machines as per schedule.
3. Has the technology been : Not applicable.
- Energy Audit is also being carried out by external fully absorbed
agencies. IV. The expenditure incurred on Research and Development.
II. The steps taken by the company for utilising alternate During the year under review there were no major expenses
sources of energy. pertaining to Research and Development incurred by the
- The Company makes an ongoing study to identify and Company.
implement energy saving system to reduce energy C. FOREIGN EXCHANGE EARNINGS AND OUTGO
consumption and cost of production.
III. The Capital investment on energy conservation equipment. (Rs. In Lakhs)
The Company has not incurred major capital investment on Particulars 2019-20 2018-19
energy conservation equipments but focused on optimum Foreign Exchange Earned 111.02 56.20
utilisation of available resources. Foreign Exchange Used Nil Nil

74th Annual Report 2019-2020 21

 SURAT TEXTILE MILLS LIMITED
Annexure - B
Annual Report on Corporate Social Responsibility activities
1 A brief outline of the Company’s CSR policy, (a) Focus areas:
including overview of projects or programs The Company supports various bodies in carrying out activities in the areas of
proposed to be undertaken and a reference to rural development, education, health care etc.
the web-link to the CSR policy and projects or (b) CSR Objectives:
programs.
To attain its CSR objectives in a professional and integrated manner, the main
objectives are:
(1) To promote, carry out, support activities relating to Education and Training,
Health care, Employment enhancing Vocational skills, Conversion of Natural
Resources and Promotion & Development of Art etc.
(2) To promote, carry out, support any activities covered in Schedule VII to the
Companies Act, 2013 as amended from time to time.
In the financial year 2019-20, the Company has undertaken activities relating to
Promoting Education, Social Welfare, Health care and Sanitation etc.
(c) Web-Link to the CSR Policy:
http://www.surattextilemillsltd.com/policies.aspx
(d) Pursuant to the provisions of Section 135 of the Companies Act, 2013, the
Companies (Corporate Social Responsibility) Rules, 2014 and the various
notifications / circulars issued by the Ministry of Corporate Affairs, the Company
has also adopted a CSR policy in compliance with the aforesaid provisions and the
same is placed on the Company’s website at www.surattextilemillsltd.com
2 Composition of CSR Committee The CSR Committee comprises the following members:
a. Mr. Ketan Jariwala, Independent Director - Chairman
b. Mr. Harishchandra Bharucha, Independent Director - Member
c. Mr. Yogesh C. Papaiya, Wholetime Director & CFO - Member
3 Average Net Profit of the Company for last Rs.1383.69 Lacs
three financial years (as per Section 198 of the
Companies Act, 2013)
4 Prescribed CSR Expenditure (two per cent of the Rs.27.67 Lacs
amount as in item 3 above)
5 Details of CSR spent during the financial year
(a) Total amount to be spent for the financial Rs.27.89 Lacs
year.
(b) Amount unspent, if any. Nil
(c) Manner in which the amount spent during The Company has spent an aggregate amount of Rs.27.89 Lacs for social welfare and
the financial year. education program.
6 Reasons for failure to spend the two per cent of Not applicable.
the average net profit of the last three financial
years or any part thereof:
Responsibility statement:
The CSR Committee hereby confirms that the implementation and monitoring of CSR policy has been carried out with all reasonable care and
diligence and the same is in compliance with the CSR objectives and the policy of the Company.

For and on behalf of the CSR Committee

Ketan Jariwala
Chairman of the Committee
Surat, 21st July, 2020 (DIN 02095540)

22 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
Annexure - C
Particulars of employees 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

Sr. Requirement under Rule 5(1) Details

No.
1. The Ratio of the remuneration of each executive (1) Mr. Manikant R. Momaya Managing Director: 1.02
Director to the median remuneration of the (2) Mr. Yogesh C. Papaiya Wholetime Director & CFO: 3.37
employees of the Company for the Financial Year.
2. The Percentage increase in remuneration of each (1) Mr. Manikant R. Momaya Managing Director: No increment was proposed
Executive Director, Chief Financial Officer, Chief during the year
Executive Officer & Company Secretary in the (2) Mr. Yogesh C. Papaiya Wholetime Director & CFO: No increment was proposed
financial year. during the year
(3) Ms. Hanisha Arora, Company Secretary: No increment was proposed during
the year
3. The Percentage increase in the median Not applicable.
remuneration of employees in the financial year.
4. Number of Permanent Employees on the rolls of 53
the Company as on 31st March, 2020.
5. The Explanation on the relationship between Not applicable.
average increase in remuneration and Company
performance.
6 Comparison of the remuneration of the Key (i) Aggregate remuneration of Key Managerial Personnel in FY 2020:
Managerial Personnel (“KMP”) (Individually and Rs.38.26 Lacs
totally) against the performance of the company. (ii) Total revenue: Rs.18489.25 Lacs
(iii) Remuneration of KMPs (as percentage of revenue): 0.21
(iv) Profit before tax: Rs.1078.71 Lacs
(v) Remuneration of KMPs (as percentage of PBT): 3.55.
* Remuneration of KMPs includes Managing Director / Wholetime Director and
Company Secretary.
7. Average percentile increase made in the salaries of Not applicable.
employees other than the managerial personnel
in last Financial Year and its comparison with the
percentile increase in the managerial remuneration
and justification thereof and point out if there are
any exceptional circumstances for increase in the
managerial remuneration.
Justification for variation in the average percentile Not applicable.
increase between Non Managerial employees and
Managerial employees.
8. Key parameters for any viable component of Not applicable.
remuneration availed by the Directors.
9. Ratio of the remuneration of the highest paid Not applicable.
director to that the employees who are not
directors but received in excess of the highest paid
director during the year.
10. Affirmation that the remuneration is as per the The Company affirms remuneration is as per the remuneration policy of the
remuneration policy of the company. Company.

74th Annual Report 2019-2020 23

 SURAT TEXTILE MILLS LIMITED
Sr. Requirement under Rule 5(1) Details
No.
11. Variations in the market capitalization. Market capitalization as on 31/03/2020: Rs.22.21 Crore.
Market capitalization as on 31/03/2019: Rs.64.36 Crore.
12. Price earnings ratio as at the closing of 31st March, 31/03/2020: 2.86
2020 and 31st March, 2019. 31/03/2019: 5.27
13. Percentage increase or decrease in the market The Company has not made any public issue or rights issue of securities since last
quotations of the shares of the company in more than 20 years, so comparison have not been made.
comparison to the rate at which the company came
out with the last public offer.

For and on behalf of the Board of Director

Manikant R. Momaya
Surat, 21st July, 2020 Managing Director
DIN: 00023993

24 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
ANNEXURE: D
POLICY RELATING TO THE REMUNERATION FOR THE WHOLETIME DIRECTOR, NON-EXECUTIVE/INDEPENDENT DIRECTOR, KMP AND SENIOR
MANAGEMENT PERSONNEL
General: d) The remuneration should be such that it provides adequate
incentive to the person to give his best to the Company and
1. The remuneration / compensation / commission etc. to the feel essence of high satisfaction with his employment.
Wholetime Director, Non-Executive/Independent Director, KMP
and Senior Management Personnel will be determined by the e) The perquisites to be given to Wholetime Director/s, KMP
Committee and recommended to the Board for approval. & Senior Management Personnel will be as per industry
practice and as may be recommended by the Committee to
The remuneration / compensation / commission etc. shall be the Board.
subject to the prior/post approval of the shareholders of the
Company and Central Government, wherever required. Remuneration to Wholetime Director, KMP and Senior Management
Personnel:
2. The remuneration and commission to be paid to the Wholetime
Director shall be in accordance with the percentage / slabs / The Wholetime Director / KMP and Senior Management Personnel
conditions as per the provisions of the Companies Act, 2013, and shall be eligible for a monthly remuneration as may be approved by the
the Rules made thereunder. Board on the recommendation of the Committee. The break-up of the
pay scale and quantum of perquisites including, employer’s contribution
3. Increments to the existing remuneration / compensation to P.F, pension scheme, medical expenses, club fees etc. shall be decided
structure linked to performance, should be clear and meet and approved by the Board on the recommendation of the Committee
appropriate performance benchmarks and may be recommended and approved by the shareholders and Central Government, wherever
by the Committee to the Board which should be within the slabs required, reflecting the short and long term performance objectives
approved by the Shareholders in the case of Wholetime Director. appropriate to the working of the Company and its goals.
4. The Committee does not propose to fix the actual amounts Remuneration to Non- Executive / Independent Director:
of remuneration that may be payable to each individual key
managerial personnel or senior management personnel. However, The Non-Executive / Independent Director may receive remuneration
the management, whilst fixing the remuneration of any such key by way of fees for attending meetings of Board or Committees thereof
personnel must consider the following: as may be recommended by the Committee and approved by the
Board provided that the amount of such fees shall not exceed amount
a) The Industry practice for the same level of employment/ prescribed in this behalf by the Central Government from time to time.
office.
b) Past performance/seniority of the concerned appointee. The Company has no stock option plans and hence such instrument
c) The nature of duties and responsibilities cast upon such does not form part of the remuneration package to any Executive
person by reason of his holding that office. Director and/or Non-Executive Director.

74th Annual Report 2019-2020 25

 SURAT TEXTILE MILLS LIMITED
Annexure - E
Secretarial Audit Report
for the Financial Year Ended 31st March, 2020
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To, (c) The Securities and Exchange Board of India (Registrars to an
The Members, Issue and Share Transfer Agents) Regulations, 1993 regarding
Surat Textile Mills Limited the Companies Act and dealing with client;
Tulsi Krupa Arcade, 6th Floor, (d) The Securities and Exchange Board of India (Issue of Capital
Puna-Kumbharia Road, Dumbhal, and Disclosure Requirements) Regulations, 2009 (Not
Surat 395010 applicable to the Company during the Audit Period);

I have conducted the secretarial audit of the compliance of applicable (e) The Securities and Exchange Board of India (Share Based
statutory provisions and the adherence to good corporate practices Employee Benefit) Regulations, 2014 (Not applicable to the
by SURAT TEXTILE MILLS LIMITED (CIN: L17119GJ1945PLC000214) Company during the Audit Period);
(hereinafter called “the Company”). Secretarial Audit was conducted (f) The Securities and Exchange Board of India (Issue and Listing
in a manner that provided me a reasonable basis for evaluating the of Debt Securities) Regulations, 2008 (Not applicable to the
corporate conducts/statutory compliances and expressing my opinion Company during the Audit Period);
thereon.
(g) The Securities and Exchange Board of India (Delisting of
Based on my verification of the Company’s books, papers, minute books, Equity Shares) Regulations, 2009 (Not applicable to the
forms and returns filed and other records maintained by the Company Company during the Audit Period); and
and also the information provided by the Company, its officers, agents
and authorised representatives during the conduct of secretarial audit, (h) The Securities and Exchange Board of India (Buyback
I hereby report that in my opinion, the Company has, during the audit of Securities) Regulations, 1998 (Not applicable to the
period covering the financial year ended on 31st March, 2020 (‘Audit Company during the Audit Period).
Period’) complied with the statutory provisions listed hereunder and
(vi) Other laws applicable specifically to the Company as per
also that the Company has proper Board-processes and compliance-
representations made by the Company.
mechanism in place to the extent, in the manner and subject to the
reporting made hereinafter: I have also examined compliance with the applicable clauses of the
following:
I have examined the books, papers, minute books, forms and returns
filed and other records maintained by the Company including website (i) Secretarial Standards (SS-1 and SS-2) issued by The Institute of
of the listed company for the financial year ended on 31st March, 2020 Company Secretaries of India; and
according to the provisions of:
(ii) Listing Agreements entered into by the Company with BSE Limited
(i) The Companies Act, 2013 (the Act) and the rules made thereunder; read with the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the
rules made thereunder; I have relied on the representation made by the Company and its Officers
for systems and mechanism formed by the Company for compliance
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws
under other applicable Acts, Laws and Regulations to the Company. I
framed thereunder;
report that during the financial year under report, the Company has
(iv) Foreign Exchange Management Act, 1999 and the rules and complied with the provisions of the Act, Rules, Regulations, Guidelines,
regulations made thereunder to the extent of Foreign Direct Standards, etc. mentioned above.
Investment, Overseas Direct Investment and External Commercial
I further report that
Borrowings (Not applicable to the Company during the Audit
Period); The Board of Directors of the Company is duly constituted with
proper balance of Executive Directors, Non-Executive Directors and
(v) The following Regulations prescribed under the Securities and
Independent Directors including one Woman Director. No change took
Exchange Board of India Act, 1992 (‘SEBI Act’):-
place in the composition of the Board of Directors during the year under
(a) The Securities and Exchange Board of India (Substantial Audit in compliance with the provisions of the Act.
Acquisition of Shares and Takeovers) Regulations, 2011;
Adequate notice is given to all directors to schedule the Board Meetings
(b) The Securities and Exchange Board of India (Prohibition of including Committees thereof, along with agenda and detailed notes
Insider Trading) Regulations, 2015; on agenda were generally sent at least seven days in advance, except

26 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
when Board meetings were called by giving less than 7 days notice in and ensure compliance with applicable laws, rules, regulations and
accordance with the provisions of Section 173 of the Act and a system guidelines.
exists for seeking and obtaining further information and clarifications on
the agenda items before the meeting and for meaningful participation I further report that during the audit period, there was no other event /
at the meeting. action having major bearing on the Company’s affair.

Majority decision is carried through while the dissenting members’ For Jigar Vyas & Associates
views are captured and recorded as part of the minutes of the meetings Company Secretaries
of the Board of Directors or Committees of the Board, as the case may
be.
SD/-
I further report that Jigar Vyas
As per the explanations given to me and the representation made by Place: Surat Proprietor
the Management and Report of the Statutory Auditors relied upon Date: 31st May, 2020 FCS No.: 8019 C.P. No.: 14468
by me, there are adequate systems and processes in the Company
This report is to be read with my letter of even date which is annexed as
commensurate with the size and operations of the Company to monitor
‘ANNEXURE’ and forms an integral part of this report.

ANNEXURE TO THE SECRETARIAL AUDIT REPORT 4. Wherever required, I have obtained the Management
representation about the compliance of laws, rules and regulations
To, and happening of events etc.
The Members,
Surat Textile Mills Limited 5. The Compliance of the provisions of Corporate and other
Tulsi Krupa Arcade, 6th Floor, applicable laws, rules, regulations, standards is the responsibility
of management. My examination was limited to the verification of
Puna-Kumbharia Road, Dumbhal,
procedures on test-check basis.
Surat 395010
6. The Secretarial Audit report is neither an assurance as to the
My report of even date is to be read along with this letter. future viability of the Company nor of the efficacy or effectiveness
with which the management has conducted the affairs of the
1. Maintenance of secretarial record is the responsibility of the Company.
management of the company. My responsibility is to express an
opinion on these secretarial records based on my audit.
For Jigar Vyas & Associates
2. I have followed the audit practices and process as were appropriate Company Secretaries
to obtain reasonable assurance about the correctness of the
contents of the secretarial records. The verification was done on
SD/-
test basis to ensure that correct facts are reflected in secretarial
records. I believe that the process and practices, I followed provide Jigar Vyas
a reasonable basis for my opinion. Place: Surat Proprietor
Date: 31st May, 2020 FCS No.: 8019 C.P. No.: 14468
3. I have not verified the correctness and appropriateness of financial
records and Books of Accounts of the Company.

74th Annual Report 2019-2020 27

 SURAT TEXTILE MILLS LIMITED
Annexure – F
Form No. AOC-2
Material Related Party Transactions
(Pursuant to clause (h) of Sub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)
Form for disclosure of 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 arms length transactions under third proviso thereto.
I. Details of contracts or arrangements or transactions not at arm’s length basis:
There were no contracts or arrangements or transactions entered into during the year ended 31st March, 2020 which were not at arm’s length
basis.
II. Details of material contracts or arrangement or transactions at arm’s length basis:
The details of material contracts or arrangements or transactions at arm’s length basis for the year ended 31st March, 2020 are as follows.

Sr. Name of the Related Party Nature of Transaction Duration Salient Terms Amount
No. and Relationship (Rs. in Lacs)
1 Garden Silk Mills Limited Electric power and other utilities Ongoing On arm’s length basis and in 1022.18
(Group Company) ordinary course of business.
2 Garden Silk Mills Limited Others miscellaneous purchases Ongoing On arm’s length basis and in 37.58
(Group Company) ordinary course of business.
3 Garden Silk Mills Limited Revenue from operations Ongoing On arm’s length basis and in 7452.95
(Group Company) ordinary course of business.
4 Garden Silk Mills Limited Leave and Licence Fees and Ongoing On arm’s length basis and in 24.73
(Group Companies) Reimbursement Expenses ordinary course of business.
5 Sorrento Textiles Private Leave and Licence Fees and Ongoing On arm’s length basis and in 82.61
Limited Reimbursement Expenses ordinary course of business.
(Group Companies)
Appropriate approvals have been taken for related party transactions. No advances have been paid or received against the transactions mentioned
above.
For and on behalf of the Board of Directors

Place: Surat Manikant R. Momaya

Date: 21st July, 2020 Managing Director
DIN: 00023993

28 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
Annexure - G
Form No. MGT-9
EXTRACT OF ANNUAL RETURN
As on the financial year ended on 31/03/2020
[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I REGISTRATION AND OTHER DETAILS

i) CIN L17119GJ1945PLC000214
ii) Registration Date 29-11-1945
iii) Name of the Company Surat Textile Mills Limited
iv) Category / Sub-Category of the Company Public Company/Limited by shares.
v) Address of the Registered office and contact details Tulsi Krupa Arcade, Sixth Floor,
Puna-Kumbharia Road,
Dumbhal, Surat 395010
Tel. No. 91-261-2311198
Fax No. 91-261-2311029
vi) Whether listed company Yes
vii) Name, Address and Contact details of Registrar and Transfer Agent, if any KFin Technologies Private Limited
Karvy Selenium, Tower-B
Plot No. 31 and 32,
Financial District, Nanakramguda
Serilingampally Mandal
Ranga Reddy District
Hyderabad 500032
State Telengana, India
Toll Free No. (India) : 1800 345 4001
Phone No. 040 67161563
Fax No. 040 67161567
Email: [email protected]
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
All the business activities contributing 10 % or more of the total turnover of the company shall be stated

Sr. Name and Description of main products / services NIC Code of the Product/ % to total turnover of the
No. service company
1 Polyester Chips & Polyester Filament Yarn 203-Manufacture of 99.49
man-made fibres
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sr. Name and address of the company CIN/GLN Holding/ Subsidiary/ % of shares Applicable
No. Associate held Section
Nil

74th Annual Report 2019-2020 29

 IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

30
i) Category-wise Share holding

Category of Shareholders No. of Shares held at the beginning of No. of Shares held at the end of % change
the year 01/04/2019 of the year 31/03/2020 during
Demat Physical Total % of Demat Physical Total % of the year
Total Total
Shares Shares
(A) Promoter
(1) Indian
(a) Individuals / Hindu Undivided 67876371 0 67876371 30.57% 67876371 0 67876371 30.57% 0.00%
Family
(b) Central Government / State 0 0 0 0.00% 0 0 0 0.00% 0.00%
Government
(c) Bodies Corporate 98628546 0 98628546 44.41% 98628546 0 98628546 44.41% 0.00%
(d) Financial Institutions / Banks 0 0 0 0.00% 0 0 0 0.00% 0.00%

74th Annual Report 2019-2020

(e) Any Other (Specify) 0 0 0 0.00% 0 0 0 0.00% 0.00%
Sub-Total (A)(1) 166504917 0 166504917 74.98% 166504917 0 166504917 74.98% 0.00%
SURAT TEXTILE MILLS LIMITED

(2) Foreign
(a) Individuals 0 0 0 0.00% 0 0 0 0.00% 0.00%
(Non-Resident individuals /
Foreign Individuals)
(b) Bodies Corporate 0 0 0 0.00% 0 0 0 0.00% 0.00%
(c) Institutions 0 0 0 0.00% 0 0 0 0.00% 0.00%
(d) Any Other (Specify) 0 0 0 0.00% 0 0 0 0.00% 0.00%
Sub-Total (A)(2) 0 0 0 0.00% 0 0 0 0.00% 0.00%
Total Shareholding of Promoter and
Promoter Group
(A) = (A)(1)+(A)(2) 166504917 0 166504917 74.98% 166504917 0 166504917 74.98% 0.00%
(B) Public Shareholding
(1) Institutions
(a) Mutual Funds / UTI 0 0 0 0.00% 0 0 0 0.00% 0.00%
(b) Financial Institutions / Banks 11457609 300 11457909 5.16% 1018 500 1518 0.00% -5.16%
(c) Central Government / State 0 0 0 0.00% 0 0 0 0.00% 0.00%
Government(s)
(d) Venture Capital Funds 0 0 0 0.00% 0 0 0 0.00% 0.00%
(e) Insurance Companies 0 0 0 0.00% 0 0 0 0.00% 0.00%
(f) Foreign Portfolio Investors 0 0 0 0.00% 6369 0 6369 0.00% 0.00%
(g) Foreign Venture Capital Investors 0 0 0 0.00% 0 0 0 0.00% 0.00%
(h) Qualified Foreign Investors 0 0 0 0.00% 0 0 0 0.00% 0.00%
(i) Any Other (Specify) 0 0 0 0.00% 0 0 0 0.00% 0.00%
Sub-Total (B)(1) 11457609 300 11457909 5.16% 7387 500 7887 0.00% -5.16%
 Category of Shareholders No. of Shares held at the beginning of No. of Shares held at the end of % change
the year 01/04/2019 of the year 31/03/2020 during
Demat Physical Total % of Demat Physical Total % of the year
Total Total
Shares Shares
(2) Non-Institutions
(a) Bodies Corporate 5836153 3850 5840003 2.63% 5460760 5300 5466060 2.46% -0.17%
(b) Individuals
i. Individual Shareholders 27576790 2036137 29612927 13.34% 33419771 2347159 35766930 16.11% 2.77%
holding nominal share
capital upto Rs.2 lakhs.
ii. Individual Shareholders 7515608 360744 7876352 3.55% 13416130 0 13416130 6.04% 2.49%
holding nominal share
capital in excess of Rs.2
lakhs.
(c) Qualified Foreign Investors 0 0 0 0.00% 0 0 0 0.00% 0.00%
(d) Any Other (Specify)
i. NRI with and without 537429 0 537429 0.24% 695703 0 695703 0.31% 0.07%
reptariation
ii. Trusts/Overseas Body 2500 0 2500 0.00% 2500 0 2500 0.00% 0.00%
Corporates
iii. Clearing Member 232403 0 232403 0.10% 204313 0 204313 0.09% -0.01%
Sub-Total (B)(2) 41700883 2400731 44101614 19.86% 53199177 2352459 55551636 25.02% 5.16%
Total Public Shareholding (B) = (B)(1)+(B)(2) 53158492 2401031 55559523 25.02% 53206564 2352959 55559523 25.02% 0.00%
TOTAL (A)+(B) 219663409 2401031 222064440 100.00% 219711481 2352959 222064440 100.00% 0.00%
(C) Shares held by Custodians and against
which Depository Receipts have been
issued
1 Held by Promoter/promoters group 0 0 0 0.00% 0 0 0 0.00% 0.00%
2 Held by Public 0 0 0 0.00% 0 0 0 0.00% 0.00%
TOTAL (C) 0 0 0 0.00% 0 0 0 0.00% 0.00%
GRAND TOTAL (A)+(B)+(C) 219663409 2401031 222064440 100.00% 219711481 2352959 222064440 100.00% 0.00%
SURAT TEXTILE MILLS LIMITED

74th Annual Report 2019-2020

31
 SURAT TEXTILE MILLS LIMITED
(ii) Shareholding of Promoters

Sr. Name of the Shareholder Shareholding at the beginning of Shareholding at the end of the year % change
No. the year 31/03/2019 the year 31/03/2020 in share
holding
No. of % of total % of shares No. of Shares % of total % of shares
during the
Shares shares of the pledged/ shares of the pledged/
year
Company encumbered to Company encumbered to
total shares total shares
1 Vareli Trading Company Ltd. 77580026 34.94% 0.00% 77580026 34.94% 0.00% 0.00%
2 Mr. Praful A. Shah (Individual) 27830471 12.53% 0.00% 27830471 12.53% 0.00% 0.00%
3 Garden Silk Mills Limited 14500000 6.53% 0.00% 14500000 6.53% 0.00% 0.00%
4 Mr. Alok P. Shah 10015000 4.51% 0.00% 10015000 4.51% 0.00% 0.00%
5 Mr. Suhail P. Shah 10015000 4.51% 0.00% 10015000 4.51% 0.00% 0.00%
6 Mrs. Shilpa Shah 10001400 4.50% 0.00% 10001400 4.50% 0.00% 0.00%
7 Mr. Praful A. Shah (HUF) 10000450 4.50% 0.00% 10000450 4.50% 0.00% 0.00%
8 Palomar Textiles Ltd. 6545820 2.95% 0.00% 6545820 2.95% 0.00% 0.00%
9 Mrs. Shilpa Shah 14050 0.01% 0.00% 14050 0.01% 0.00% 0.00%
10 Introscope Properties Pvt. 1700 0.00% 0.00% 1700 0.00% 0.00% 0.00%
Ltd.
11 Prabhat Silk Mills Limited 1000 0.00% 0.00% 1000 0.00% 0.00% 0.00%
Partner Rayban Investment
Total 166504917 74.98% 0.00% 166504917 74.98% 0.00% 0.00%
(iii) Change in Promoters’ Shareholding (please specify, if there is no change)

Sr. Particulars Shareholding at the beginning of the year Cumulative Shareholding

No. during the year
Date No. of % of total Reason No. of % of total
Shares shares of the Shares shares of the
Company Company
At the beginning of the year 31/03/2019 166504917 74.98 - 166504917 74.98
Date wise Increase / Decrease in Share in - - - - - -
Promoters Shareholding during the year
- - - - - -
specifying the reasons for increase /decrease
(e.g. allotment / transfer / bonus/ sweat - - - - - -
equity etc.)

At the end of the year 31/03/2020 166504917 74.98 166504917 74.98

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 SURAT TEXTILE MILLS LIMITED
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

Sr. Name of Shareholders Shareholding at the Date wise Increase (+) / Decrease Cumulative Shareholding at
No. beginning of the year (-) in Shareholding during the year Shareholding during the end of the year
01/04/2019 the year 31/03/2020
No. of % of total Date Increase/ Reason No. of % of total No. of % of total
Shares shares Decrease Shares shares Shares shares
of the of the of the
Company Company Company
1 Madhuvan Securities Pvt. Ltd. 1824750 0.82% 0 1824750 0.82% 1824750 0.82%
2 Madhuram Traders Pvt. Ltd. 1384977 0.62% 0 1384977 0.62% 1384977 0.62%
3 Jamson Securities Pvt Ltd 1229866 0.55% 0 1229866 0.55% 1229866 0.55%
4 Neelam Nitinkumar Gheewala 1100000 0.50% 0 1100000 0.50% 1100000 0.50%
5 Ilaben Nitinbhai Gheewala 1049000 0.47% 0 1049000 0.47% 1049000 0.47%
6 Kushal Nitin Gheewala 1000000 0.45% 0 1000000 0.45% 1000000 0.45%
7 Vartik Choksi 959378 0.43% 0 959378 0.43% 959378 0.43%
8 Piyush Ashra 234071 0.11% 05.04.2019 297849 Purchase 531920 0.24%
12.04.2019 358080 Purchase 890000 0.40%
19.04.2019 15000 Purchase 905000 0.41%
26.04.2019 52934 Purchase 957934 0.43%
03.05.2019 10000 Purchase 967934 0.44%
17.05.2019 27566 Purchase 995500 0.45%
24.01.2020 4500 Purchase 1000000 0.45% 1000000 0.45%
9 Preeyal Shaunak Shah 316188 0.14% 17.01.2020 626812 Purchase 943000 0.42% 943000 0.42%
10 Shreyal Shaunak Shah 395296 0.18% 17.01.2020 569704 Purchase 965000 0.43% 965000 0.43%
(v) Shareholding of Directors and Key Managerial Personnel:

Sr. Name Shareholding at the Date wise Increase (+) / Cumulative Shareholding at
No. beginning of the Decrease (-) in Shareholding Shareholding the end of the year
year 01/04/2019 during the year during the year 31/03/2020
No. of % of total Date No. of % of total No. of % of total No. of % of total
Shares shares Shares shares Shares shares Shares shares
of the of the of the of the
Company Company Company Company
1 Mr. Manikant R. Momaya 0 0 0 0 0 0 0
Managing Director
2 Mr. Yogesh C. Papaiya 0 0 0 0 0 0 0
Whole time Director & CFO
3 Mr. Harishchandra Bharucha 0 0 0 0 0 0 0
Director
4 Mr. Ketan Jariwala 0 0 0 0 0 0 0
Director
5 Ms. Kruti Kothari 0 0 0 0 0 0 0
Director

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 SURAT TEXTILE MILLS LIMITED
V INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
(Rs. in Lacs)
Secured Loans Unsecured Deposits Total
excluding deposits Loans Indebtedness
Indebtedness at the beginning of the financial year
i) Principal Amount 0.00 0.00 0.00 0.00
ii) Interest due but not paid 0.00 0.00 0.00 0.00
iii) Interest accrued but not due 0.00 0.00 0.00 0.00
Total (i+ii+iii) 0.00 0.00 0.00 0.00
Change in Indebtedness during the financial year
• Addition 0.00 0.00 0.00 0.00
• Reduction 0.00 0.00 0.00 0.00
Net Change 0.00 0.00 0.00 0.00
Indebtedness at the end of the financial year
i) Principal Amount 0.00 0.00 0.00 0.00
ii) Interest due but not paid 0.00 0.00 0.00 0.00
iii) Interest accrued but not due 0.00 0.00 0.00 0.00
Total (i+ii+iii) 0.00 0.00 0.00 0.00
VI REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors:
(Rs. In Lacs)
Sr. Particulars of Remuneration Mr. M. R. Momaya Mr. Yogesh C. Papaiya Total Amount
No. Managing Director Wholetime Director & CFO
1 Gross salary
(a) Salary as per provisions contained in section 8.40 27.88 36.28
17(1) of the Income-tax Act, 1961
(b) Value of perquisites u/s 17(2) Income-tax Act, 0.00 0.00 0.00
1961
(c) Profits in lieu of salary under section 17(3) 0.00 0.00 0.00
Income-tax Act, 1961
2 Stock Option 0.00 0.00 0.00
3 Sweat Equity 0.00 0.00 0.00
4 Commission
- as % of profit 0.00 0.00 0.00
- others, specify... 0.00 0.00 0.00
5 Others, please specify 0.00 0.00 0.00
Total (A) 8.40 27.88 36.28
Ceiling as per the Act Not applicable Not applicable Not applicable

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 SURAT TEXTILE MILLS LIMITED
B. Remuneration to other Directors:
(Rs. in Lacs)
Sl. Particulars of Remuneration Name of Directors Total
No. Amount
Mr. Harishchandra Mr. Ketan Ms. Kruti Kothari
Bharucha Jariwala
I. Independent Directors
1 Fee for attending board committee meetings 2.45 2.45 1.82 6.72
2 Commission 0.00 0.00 0.00 0.00
3 Others, please specify 0.00 0.00 0.00 0.00
Total (I) 2.45 2.45 1.82 6.72
II. Other Non-Executive Directors
1 Fee for attending board committee meetings 0.00 0.00 0.00 0.00
2 Commission 0.00 0.00 0.00 0.00
3 Others, please specify 0.00 0.00 0.00 0.00
Total (II) 0.00 0.00 0.00 0.00
Total (B) = (I + II) 2.45 2.45 1.82 6.72
Total Remuneration 2.45 2.45 1.82 6.72
Overall Ceiling as per the Act Not applicable Not applicable Not applicable
C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD
(Rs. in Lacs)
Sr. Particulars of Remuneration Hanisha Arora
No. Company Secretary
1 Gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 1.98
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 0.00
(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 0.00
2 Stock Option 0.00
3 Sweat Equity 0.00
4 Commission
- as % of profit 0.00
- others, specify... 0.00
5 Others, please specify 0.00
Total 1.98

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 SURAT TEXTILE MILLS LIMITED
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the Brief Details of Penalty Authority Appeal made,

Companies Act Description / Punishment/ [RD / NCLT / if any (give
Compounding fees COURT] Details)
imposed
A. COMPANY
Penalty
Punishment NIL
Compounding
B. DIRECTORS
Penalty
Punishment NIL
Compounding
C. OTHER OFFICERS IN DEFAULT
Penalty
Punishment NIL
Compounding

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ANNEXURE – H
REPORT ON CORPORATE GOVERNANCE
In accordance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ‘SEBI
Listing Regulations, 2015), given below are the corporate governance policy and practices adopted by the Company for the year 2019-20.
The Company is in compliance with the requirements stipulated under Regulations 17 to 27 read with Schedule V and clauses (b) to (i) of sub-
regulation (2) of Regulation 46 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI
Listing Regulations’), as applicable with regard to corporate governance and the same has been disclosed in this Report.
1. Company’s Philosophy on Code of Governance
The Company’s Corporate Governance philosophy is to ensure fairness, transparency and integrity of the management, in order to protect
the interest of all its stakeholders and the Company’s Code of Conduct for prevention of Insider Trading and Code of Corporate Disclosure
Practices.
The Company believes that good Corporate Governance emerges from the application of the best and sound management practices and
compliance with the laws coupled with adherence to the highest standards of transparency and business ethics.
2. Board of Directors
(a) Composition:
The Board regularly reviews and updates Corporate Governance practices to accommodate developments within the market place in
general and the business in particular.
The Company has an active, experienced and a well-informed Board. The Board along with its Committees undertakes its fiduciary
duties keeping in mind the interests of all its stakeholders and the Company’s Corporate Governance philosophy. The Nomination and
Remuneration Committee of the Board ensures the right composition of the Board.
The Company currently has right mix of Directors on the Board who possess the requisite qualifications, experience and expertise in
General Corporate Management, finance, taxation, banking and other allied fields which enable them to contribute effectively to the
Company in their capacity as Directors of the Company.
As on 31st March, 2020, the Board of the Company consisted of 5 Directors, of whom 2 were executives and 3 were non-executive
independent (including 1 woman director). Accordingly, the composition of the Board is in conformity with Regulation 17 of the Listing
Regulations.
As per the declarations received by the Company from each of the Directors, none of them are disqualified under Section 164(2) of the
Companies Act, 2013.
The Independent Directors of the Company are in compliance with the provision of Regulation 16(2) of SEBI Listing Regulations, 2015.
Further, disclosures have been made by the Directors regarding their Chairmanship / Membership of the mandatory Committees of the
Board and that the same are within the maximum permissible limit as stipulated under Regulation 16(2) of SEBI Listing Regulations, 2015.
The Senior Management have made disclosures to the Board confirming that there are no material, financial and/or commercial
transactions between them and the Company, which could have potential conflict of interest with the Company at large.
None of the Directors of the Company is related to each other and there are no inter-se relationship between the Directors. Transactions
with related parties are disclosed in Note No. 34 of ‘Notes to the Financial Statements’ for the year ended 31st March, 2020. There
has been no material pecuniary transaction or relationship between the Company and its Non-executive and/or independent Directors
during the year 2019-20.
(b) Number of meeting of the Board.
During the financial year 2019-20, the Board of Directors met 6 times viz. 14/05/2019, 09/07/2019, 06/08/2019, 10/09/2019, 05/11/2019
and 14/02/2020. The gap between any two meetings has been less than one hundred and twenty days.
The Board oversees the entire functioning of the Company and is involved in strategic decision-making on a collective basis. The Company
Secretary under the direction of the Chairman and in consultation with Chief Financial Officer (CFO) prepares the agenda along with the
explanatory notes thereto and circulates it to the Directors, along with the notice of the meeting.
The composition and category of Directors, the number of Directorships and Committee Chairmanships / Memberships held by them
and Directorships held by them in other listed entities as on 31st March, 2020 are as follows:

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 SURAT TEXTILE MILLS LIMITED
Name Category No. of Attendance No. of No. of Committee
Board at the last Directorships positions held in
Meetings AGM held on in other public other public limited
attended # 03/09/2019 limited companies companies **
Mr. Manikant R. Momaya Managing Director 5 Yes N.A. N.A.
Mr. Yogesh C. Papaiya Wholetime Director 6 Yes N.A. N.A.
& CFO
Mr. Harishchandra B. Non-executive, 6 Yes N.A. N.A.
Bharucha Independent
Mr. Ketan Jariwala Non-executive, 6 Yes 1 2
Independent
Ms. Kruti Kothari * Non-executive, 5 Yes 1 N.A.
Independent
# excluding Independent Directors meeting.
* Appointed effect from 9th July, 2019.
** In accordance with SEBI Listing Regulations, 2015, Memberships / Chairmanships of only the Audit Committee and Stakeholders
Relationship Committee in all Public Limited Companies (excluding Surat Textile Mills Limited) have been considered.
(c) Number of meeting of the Board.
The Board plays a critical role in the strategy development of the Company. The Managing Director appraises the Board on the overall
performance of the Company every quarter. The Board periodically reviews the strategy, annual business plan, business performance of
the Company, quality, customer centricity, capital expenditure budgets and risk management, safety and environment matters.
Amongst other things, the Board also reviews the compliance report of the laws applicable to the Company, internal financial controls
and financial reporting systems, minutes of the Board Meetings, adoption of quarterly / half yearly / annual results, minutes of the
meeting of the Audit and other Committees of the Board.
In addition to the information required under Regulation 17(7) read with Part A of Schedule II of the Listing Regulations, which is required
to be placed before the Board, the Directors are also kept informed of major events and approvals obtained, if necessary.
The agenda papers with relevant explanatory notes and material documents relating to matters for perusal of the Board / Committee
are circulated in advance, so as to facilitate discussion and informed decision-making in the meeting, especially those that require
deliberation at the highest level.
(d) Directors’ Tenure, Appointment / Re-appointment and Remuneration
In terms of Section 152 read with Section 149(13) of the Companies Act, 2013 Mr. Manikant R. Momaya is liable to retire by rotation. The
said Director has offered himself for reappointment and resolution for his reappointment is incorporated in the Notice of the ensuing
Annual General Meeting.
The Board of Directors of the Company at its meeting held on 21st July, 2020 on recommendation of Nomination and Remuneration
Committee reappointed Mr. Ketan Jariwala as an Independent Director of the Company for the second term of 4 (four) years w.e.f. 26th
August, 2020 upto 10th August, 2024, subject to approval of the Members of the Company at the ensuing annual general meeting.
The brief profile and other information as required under Regulation 36(3) of SEBI Listing Regulations, 2015 relating to Directors being
appointed / reappointed, forms part of the Notice of ensuing Annual General Meeting.
(e) Separate Meeting of Independent Directors
During the year under review one meeting of Independent Directors of the Company was held on 14th February, 2020 as required under
Schedule IV of the Act and Regulation 25(3) of the Listing Regulation, 2015.
At their meeting, the Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole,
Chairman (as elected by the Board for each meeting of the Board of Directors) after taking the views of Executive Directors and Non-
Executive Directors and also assessed the quality, quantity and timeliness of flow of information between the Company management
and the Board that is necessary for the Board to effectively and reasonably perform their duties. The meeting was attended by all the
Independent Directors and Mr. Ketan A. Jariwala chaired the said meeting.

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 SURAT TEXTILE MILLS LIMITED
All the Independent Directors of the Company have been appointed as per the provisions of the Companies Act, 2013 and the Listing
Regulations. Formal letters of appointment were issued to the Independent Directors. As required by Regulation 46 of the Listing
Regulations, the terms and conditions of their appointment have been disclosed on the website of the Company at http:// www.
surattextilemillsltd.com
(f) Familiarization Programme for Independent Directors
With a view to familiarising the independent directors with the Company’s operations, as required under regulation 25(7) of the SEBI
Listing Regulations, 2015, the Company has provided program on an ongoing basis to enable them to understand the business of the
Company.
Moreover, the Management has also endeavoured to appraise the Directors regarding their responsibilities under the new Listing Regulations
vis-a-vis those contained in the erstwhile Listing Agreements. Pursuant to Regulation 46 of the Listing Regulations, the details of familiarisation
programme are available on the website of the Company at http://www.surattextilemillsltd.com
Code of Conduct
The Company has adopted the Code of Conduct for its Whole-time Directors, Senior Management Personnel and other Executives which is
available on the Company website at http://www.surattextilemillsltd.com.
The Board has also adopted a Code of Conduct for Non-Executive Directors, which incorporates the duties of Independent Directors as laid
down in Schedule IV of the Act (‘Code for Independent Directors’) and Regulation 17(5) of the Listing Regulations.
As on 31st March, 2020, all the Board Members and Senior Management of the Company have affirmed compliance with the respective Codes
of Conduct. A declaration to this effect duly signed by the Managing Director forms part of this Report.
Senior Management of the Company have made disclosures to the Board confirming that there are no material, financial and/or commercial
transactions between them and the Company which could have potential conflict of interest with the Company at large. None of the Directors
has any other material pecuniary relationship or transaction except remuneration by way of sitting fees, with the Company, its Promoters, its
Directors, its Senior Management.
3. BOARD COMMITTEES:
During the financial year under review, the Board had four committees viz., Audit Committee, Stakeholders’ Relationship Committee, Corporate
Social Responsibility Committee and Nomination and Remuneration Committee. The Board decides the term of reference of these committees
and assignment of its Members thereof.
(a) Audit Committee
The Audit Committee’s role is to assist the Board fulfil its corporate governance and overseeing responsibilities in relation to the
Company’s financial reporting process carried out by the Management, internal control system, risk management system and internal
and external audit functions.
Presently the Audit Committee comprises of Ms. Kruti Kothari, Independent Director as Chairman, Mr. Yogesh C. Papaiya, Wholetime
Director, Mr. Harishchandra Bharucha and Mr. Ketan Jariwala, Independent Directors as its Members. All the members of the Committee
are professionals and financially literate within the meaning of Regulation 18 of SEBI Listing Regulations, 2015.
The terms of reference of the Audit Committee includes the matters specified under Section 177 of the Companies Act, 2013 and
Regulation 18(3) read with Part C of Schedule II of the Listing Regulations. During the year under review, the terms of reference of the
Audit Committee were amended to align the role of the Committee with amendments to the Listing Regulations and SEBI (Prohibition of
Insider Trading) Regulations, 2015.
The Audit Committee may call for the Comments of the Auditors about internal control systems, the scope of Audit, including observations
and review of financial statements before their submission to the Board and any related issues with internal and statutory auditors and
management of the Company.
The Audit Committee also assures the Board about the adequate internal control procedures and financial disclosures commensurate
with the size of the Company and in conformity with the requirements of the new Listing Regulations. The Finance Head, Internal Auditor
and Statutory Auditors are invitees to the Meeting. The Company Secretary acts as the Secretary to the Audit Committee.
The Board has been reviewing the working of the Committee from time to time to bring about greater effectiveness in order to comply
with the various requirements under the Companies Act, 2013 and the SEBI Listing Regulations, 2015.
The Chairman of the Audit Committee was present at the 73rd Annual General Meeting of the Company held on 3rd September, 2019.
The Minutes of the Audit Committee Meetings were noted at the Board Meetings.

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 SURAT TEXTILE MILLS LIMITED
Meetings and attendance
During the financial year 2019-20, the Audit Committee of the Company met five times on 14/05/2019, 06/08/2019, 10/09/2019,
05/11/2019 and 14/02/2020. The gap between two Audit Committee meetings did not exceed four months. The Committee, in its
meeting held on 14/05/2019 reviewed the Annual Accounts for the year ended 31st March, 2020.
The Committee, in addition to other business reviews the quarterly (unaudited) financial results, annual accounts and cost audit report
etc. before submitting to the Board of Directors.
In addition to the members of the Audit Committee, these meetings were attended by the head of finance, internal auditor and the
statutory auditors of the Company. Further, on invitation, directors who are not member of the Company also attended the meetings of
the Committee.
The Company Secretary acted as the secretary of the Audit Committee.
The details of composition of the Audit Committee and the attendance of the Members at the Audit Committee Meetings are as under:

Sr. Name Category No. of Meeting

No. attended
1 Ms. Kruti Kothari * Non-Executive, Independent 4
2 Mr. Harishchandra Bharucha Non-Executive, Independent 5
3 Mr. Yogesh C. Papaiya Executive 5
4 Mr. Ketan Jariwala Non-Executive, Independent 5
*appointed w.e.f. 9th July, 2019.
(b) Stakeholders’ Relationship Committee
The Company has constituted the Stakeholders’ Relationship and Investors’ Grievance Committee in accordance with the provisions of
the Companies Act, 2013 and the Listing Regulations (erstwhile Listing Agreements). The Stakeholder Relationship Committee oversee
investors’ grievances and redressal mechanism and recommends measures to improve the level of Investor’s Services.
Presently, the Stakeholder Relationship Committee comprises of Mr. Harishchandra Bharucha, Independent Director as Chairman and
Mr. Yogesh C. Papaiya, Wholetime Director & CFO and Mr. Ketan Jariwala, Independent Director as its Members.
The Stakeholders’ Relationship Committee (‘SRC’) looks in to various aspects of interest of shareholders. During the year under review,
the terms of reference of the SRC were amended to align the role of the Committee with amendments to the Listing Regulations. The
minutes of the Stakeholders’ Relationship Committee were noted at the Board Meeting. In addition, the committee also looked into
matters that can facilitate investor services and relation.
The said Committee also approves cases such as the transfer of shares in physical form, issue of duplicate share certificates and requests
regarding Transmission / Consolidation / Split of Share Certificates etc. The powers for the aforesaid has been delegated to the Registrar
& Transfer Agents who approves the documents fortnightly. The transfer registers duly signed by the authorised person is placed before
the meeting of Stakeholders’ Relationship Committee meetings on yearly basis.
Further, as per regulation 40(2) of the Listing Regulation, a report on transfer of shares / deletion of name / issue of duplicate share
certificates / transmission of securities is also placed at each meeting of the Board of Directors. The Company Secretary and Compliance
Officer acted as the secretary to the committee.
During the Financial Year under review, 28 complaints were received and as on date all of them have been redressed / answered to the
satisfaction of the shareholders. No investor grievance remained unattended / pending for resolution for more than 30 days and no
request for share transfers and dematerialization received for the financial year under review was pending for more than the time limit
prescribed under the SEBI (LODR) Regulations, 2015.
(c) Nomination and Remuneration Committee
The Board of Directors have constituted a Nomination and Remuneration Committee of Directors. The role of the committee is to perform
all such matters as prescribed under the Companies Act, 2013 and Schedule II-Part D about Role of Nomination and Remuneration
Committee of Directors under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015, which inter alia includes – recommendation to Board of Directors remuneration policy for the Company, formulation of criteria for
performance evaluation of Directors, Board and Committee, appointment of Directors, appointment and remuneration of Whole-time
Directors / Managing Director and Key Managerial Personnel. The Committee will also deal with matters as may be assigned from time
to time by the Board of Directors.

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 SURAT TEXTILE MILLS LIMITED
The Committee consists of three Independent Directors namely Mr. Harishchandra Bharucha as Chairman, Mr. Ketan Jariwala,
Independent Director and Ms. Kruti Kothari. During the year 2019-20 one meeting of the members of Nomination and Remuneration
Committee was held on 9th July, 2019 wherein all the members were present.
Nomination and Remuneration Policy
On recommendation of Nomination and Remuneration Committee, the Board of Directors have approved a Nomination and
Remuneration Policy for the appointment and remuneration of the director, key managerial personnel (KMP) and other employees. The
key objectives of the Policy are to lay down the criteria for appointment and remuneration of Directors, Key Managerial Personnel and
Executives at Senior Management level and recommend to the Board their appointment, and also to formulate criteria for evaluation of
performance of Independent Directors and the Board and to devise a policy on Board diversity. The Policy, inter-alia, includes criteria for
determining qualifications, positive attributes, independence of a director, and expertise and experience required for appointment of
Directors, KMP and Senior Management.
The details of the remuneration policy are available on the website of the Company www.surattextilemillsltd.com.
Remuneration to Directors
There has been no materially significant related party transactions, pecuniary relationships or transactions between the Company and
its Directors for the financial year under review that may have a potential conflict with the interest of the Company at large.
Remuneration paid to Executive Directors

Name of Director Salary & Perquisites

Mr. Manikant R. Momaya Rs.8,40,240/-
Mr. Yogesh C. Papaiya Rs.27,87,555/-
Remuneration paid to Non-Executive Directors
The Company has paid sitting fees to Non-Executive directors for attending meetings of the Board, Audit Committee and Share Transfer
Committee meetings. The aggregate amount of sitting fees paid during the financial year 2019-20 was Rs.6,72,500/-.
The Company has no stock option plans and hence such instrument does not form part of the remuneration package to any Executive
Director and/or Non-Executive Director.
(d) Other Committees of Directors
Management Committee of the Board
The Board of Directors has constituted Management Committee of Directors to approve routine and specific matters delegated by the
Board. The composition of the Committee of Directors comprises Mr. Yogesh C. Papaiya, Chairman, Mr. Harishchandra Bharucha and Mr.
Ketan A. Jariwala as Members.
(e) Corporate Social Responsibility Committee
The Committee’s constitution and terms of reference are in compliance with provisions of the Section 135 of the Companies Act, 2013.
The composition of the Committee of Directors comprises Mr. Ketan Jariwala, Chairman, (Independent Director), Mr. Harishchandra
Bharucha, Independent Director and Mr. Yogesh C. Papaiya, Wholetime Director as Members.
During the year 2019-20 the Committee met once on 20th March, 2020 to discuss the matters coming within the Committee’s purview.
The Committee’s prime responsibility is to assist the Board in discharging its social responsibility by way of formulating and monitoring
implementation of the framework of corporate social responsibility policy. The terms of reference of the Corporate Social Responsibility
are in accordance with the provisions of the Companies Act, 2013 and Rules made there under.
The Company has also adopted CSR policy in compliance with the aforesaid provisions and the same is placed on the Company’s website
at www.surattextilemillsltd.com.
4. MD/CEO/CFO Certification
As required under Regulation 17(8) of SEBI Listing Regulations, 2015, the CEO and CFO certification of the Financial Statements, the Cash Flow
Statement and the Internal Control Systems for financial reporting for the financial year ended was placed before Board of Directors at its
Meeting held on 21st July, 2020.

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 SURAT TEXTILE MILLS LIMITED
5. Compliance officer
The Company Secretary is the Compliance Officer under Regulation 6 of the SEBI Listing Regulations, 2015 and other applicable SEBI Regulations
and Rules.
6. General Body Meetings
(a) The details of last 3 Annual General Meetings held are as under:

Year Location Date Time

2018-19 Tulsi Krupa Arcade, Puna-Kumbharia Road, Surat 3rd September, 2019 11.00 a.m.
2017-18 Tulsi Krupa Arcade, Puna-Kumbharia Road, Surat 8th August, 2018 11.00 a.m.
2016-17 Tulsi Krupa Arcade, Puna-Kumbharia Road, Surat 2nd August, 2017 11.00 a.m.
All the resolutions set out in the respective Notices were passed by the requisite majority of the Members.
(b) Special Resolutions passed at the last 3 Annual General Meetings:
i) A Special Resolution was passed at the 73rd Annual General Meeting of the Company held on 3rd September, 2019 for re-
appointment of Mr. Manikant R. Momaya as Managing Director of the Company for a further period of 3 years w.e.f. 1st June, 2019.
ii) At the 72nd Annual General Meeting of the Company held on 8th August, 2018 a Special Resolution was passed for approval of
reappointment of Mr. Harishchandra B. Bharucha and another Special Resolution was passed at the said AGM for approval of
Related Party Transactions.
iii) A Special Resolution was passed at the 71st Annual General Meeting of the Company held on 2nd August, 2017 for approval of
Related Party Transactions.
iv) There was no Special Resolution passed in the financial year 2019-20 by postal ballot.
v) As of date, there is no proposal to pass any Special Resolution by postal ballot.
(c) Passing of Special Resolutions by Postal Ballot:
Pursuant to Section 108 and other applicable provisions of the Act read with Rule 22 of the Companies (Management and Administration)
Rules, 2014, as amended no postal ballot were held during 2019-20.
7. DISCLOSURES
(a) Related Party Transactions
Your Company has formulated a Policy on materiality of Related Party Transactions and also dealing with Related Party Transactions. The
policy on Related Party Transactions is hosted on the website of the Company.
Particulars of transactions between the Company and related parties as per Accounting Standard (AS) 18 – ‘Related Party Disclosures’
notified under Section 133 of the Companies Act, 2013 read with Rule 7 of Companies (Audit and Accounts) Rules, 2014 are given under
note No.34 of the annual accounts for the financial year 2019-20.
(b) Disclosure of Accounting Treatments
The Company has adopted and prepared the accounts in accordance with the Companies (Indian Accounting Standards) Rules, 2015
(Ind AS) prescribed under Section 133 of the Companies Act, 2013 and other recognised accounting practices and policies to the extent
applicable.
(c) Subsidiary Company
The Company does not have any material unlisted Indian subsidiary, and hence, is not required to nominate an Independent Director of
the Company on the Board of any subsidiary. Your Company has voluntarily formulated a Policy on Material Subsidiary as required under
Regulation 24 of the SEBI Listing Regulations, 2015 and the Policy is hosted on the website of the Company.
(d) Risk Management
Your Company has laid down procedure to inform Board members about risk assessment and minimization and has implemented the
Risk Management plan and continuously monitors it. Details of Risk Management by the Company have been provided in the Directors’
Report and Management Discussion and Analysis.

42 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
(e) Statutory Compliance, Penalties and Strictures
There has neither been any non-compliance of any of the provisions of law by the Company nor any penalty or structure imposed by the
Stock Exchange or SEBI or any other statutory authorities on any matters related to capital market during the last 3 years.
(f) Whistle Blower Policy / Vigil Mechanism:
The Company has established a Whistle Blower / Vigil Mechanism through which its Directors, Employees and Stakeholders can report
their genuine concerns about unethical behaviours, actual or suspected fraud or violation of the Company’s code of conduct or ethics
policy. The said policy provides for adequate safeguard against victimization and also direct access to the higher levels of supervisors.
(g) Preventing Conflict of Interests
Members of Board and Senior Management Team while discharging their duties, avoid their conflict of interest in the decision making
process. The members of Board refrain themselves from any discussions and voting in transactions where they have concern or interest.
(h) Insider Trading Code
The Securities and Exchange Board of India (SEBI) has promulgated the SEBI (Prohibition of Insider Trading) Regulations, 2015 (“The PIT
Regulations”). The PIT Regulations has come into effect from May 15, 2015 and replaced the earlier Regulations. The object of the PIT
Regulations is to curb the practice of insider trading in the securities of a listed company.
The Company has adopted an ‘Internal Code of Conduct for Regulating, Monitoring and Reporting of Trades by Insiders’ (“the Code”) in
accordance with the requirements of the PIT Regulations. The Code lays down guidelines for procedures to be followed and disclosures
to be made while trading in securities of the Company. During the year, the Code was amended to align it with the amendments to SEBI
(Prohibition of Insider Trading) Regulations, 2015. As per the revised Code, the Company also adopted Policy on Enquiry in case of leak
or suspected leak of UPSI and policy for Determination of Legitimate Purposes.
The Code of Corporate Disclosure Practices along with the Policy for Determination of Legitimate Purposes is also available on the
website of the Company at http://www.surattextilemillsltd.com.
The Code is applicable to Promoters and Promoter’s Group, all Directors and such Designated Employees who are expected to have
access to unpublished price sensitive information relating to the Company. The Company Secretary is the Compliance Officer for
monitoring adherence to the said Regulations.
The Company has also formulated ‘The Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information
(UPSI)’ in compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015. This Code is displayed on the Company’s website.
(i) Reconciliation of Share Capital Audit
A qualified Practicing Company Secretary carries out reconciliation of share capital Audit, on quarterly basis to reconcile the total
admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the
total issued and listed capital The audit confirms that the total issued/paid up capital is in agreement with the total number of shares in
physical form and the total number of dematerialized shares held with NSDL and CDSL.
8. DISCLOSURES
(a) The Quarterly (Unaudited) Financial Results are sent to Stock Exchanges where the Company’s shares are listed and are normally
published in The Indian Express (English) and Dhabkar (Vernacular), both Surat editions.
(b) Management Discussion and Analysis report forms part of the Directors Report.

74th Annual Report 2019-2020 43

 SURAT TEXTILE MILLS LIMITED
9. DISCLOSURES
(a) 74th Annual General Meeting:
Date : Tuesday, 22nd September, 2020
Time : 3:00 p.m. IST
Venue : Through Video Conferencing (‘VC’) / Other Audio - Visual Means (‘OAVM’)
(b) Financial Calendar (2020-21):
Results for the quarter ending June 30, 2020 : August/September, 2020.
Results for the quarter ending September 30, 2020 : October/November, 2020
Results for the quarter ending December 31, 2020 : January/February, 2021
Results for the year ending March 31, 2021 : April/May, 2021
(c) Book closure dates : Thursday, 17th September, 2020 to
: Tuesday, 22nd September, 2020
: (Both days inclusive)
(d) Listing on Stock Exchange : Stock Code
BSE Limited, : 530185
Phiroze Jeejeebhoy Towers, :
Dalal Street, Mumbai 400001 :
Demat ISIN for NSDL & CDSL : INE 936A01025
(e) Annual Listing Fees : The Company has paid the Annual Listing fee to the above stock exchange for
the financial year 2020-2021.
(f) Market Price Data
The High/Low market price of the shares during the year 2019-20 at the BSE Limited are as under.

Month High (Rs.) Low (Rs.)

April, 2019 3.01 2.43
May, 2019 2.75 1.75
June, 2019 2.28 1.90
July, 2019 2.14 1.71
August, 2019 1.88 1.48
September, 2019 1.80 1.41
October, 2019 1.48 0.96
November, 2019 1.40 0.95
December, 2019 1.23 0.81
January, 2020 1.50 0.90
February, 2020 1.59 1.20
March, 2020 1.50 0.86

44 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
(g) Registrar and Share Transfer Agents:
KFin Technologies Private Limited
(Unit: Surat Textile Mills Limited),
Selenium Tower B, Plot 31 & 32, Financial District, Gachibowli, Nanakramguda,
Hyderabad 500032. State: Telengana, India.
Phone No. 040 67161563 | Fax No. 040 67161567 | Email: [email protected]
(h) Share Transfer System:
All the share related work is being undertaken by the company’s Registrar & Transfer Agent. A Stakeholders Relationship Committee has
been constituted to approve the share transfer, transmission, split and consolidation etc. of shares. The transfers which are complete in
all respects are taken up for approval at least once in a fortnight and the transferred securities dispatched to the transferee within 21
days. The details of transfer / transmission approved by the Committee are noted by the Board at its next meeting.
(i) Distribution of shareholding as on 31st March, 2020:

Sr. Category of Members No. of Shares % of total

No. held Shares
1. Promoters 166504917 74.98
2. Indian Public 49183060 22.15
3. Banks, Financial Institutions & Insurance Companies 7887 0.01
4. NRI’s / Overseas Body Corporates 695703 0.31
5. Bodies Corporate 5466060 2.46
6. NBFC Registered with RBI 2500 0.00
7. Others (NSDL+CDSL) Clearing Members 204313 0.09
TOTAL 222064440 100.00
(j) Categorywise Summary of Holders / Holdings as on 31st March, 2020:

No. of Equity Shares No. of % of total No. of % of total

Shareholders Shareholders Shares held Shares
1 - 5000 35852 96.77 12463168 5.62
5001 - 10000 562 1.52 4443577 2.01
10001 - 20000 290 0.78 4315453 1.94
20001 - 30000 118 0.32 2998983 1.35
30001 - 40000 54 0.15 1918083 0.86
40001 - 50000 37 0.09 1724921 0.77
50001 - 100000 70 0.19 5203224 2.34
100001 & above 68 0.18 188997031 85.11
TOTAL 37051 100.00 222064440 100.00
(k) Depository Services:
The Equity Shares of your Company are traded in compulsory dematerialised form by all the investors. The Company has entered into
agreements with both the depositories viz., National Securities Depositories Ltd. (NSDL) and Central Depository Services (India) Ltd.
(CDSL), enabling the investors to hold shares of the Company in electronic form through the depository of their choice.
(l) Dematerialisation of Shares:
219711481 Equity Shares aggregating to 98.94% of the total Equity Capital is held in dematerialized form as on 31/03/2020 of which
89.26% (198221043 Equity Shares) of total equity capital is held with NSDL and 9.68% (21490438 Equity Shares) of total equity capital is
held with CDSL as on 31/03/2020.

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 SURAT TEXTILE MILLS LIMITED
(m) Stock Exchange Intimations
All price-sensitive information and matters that are material to shareholders are disclosed to the respective Stock Exchanges where the
securities of the Company are listed. All submissions to the Exchanges are made through the respective electronic filing systems.
Material events or information as detailed in Regulation 30 of the Listing Regulations are disseminated to the Stock Exchanges by filing
them with BSE through BSE Online Portal. They are also displayed on the Company’s website at http://www.surattextilemillsltd.com.
(n) Letters and Reminders to Shareholders
The Company in terms of circular issued by SEBI time to time with respect to Updation of PAN and Bank details, mandating transfer of
securities only in electronic form effective from 1st April, 2019, has communicated to the shareholders through notice of Annual General
Meeting.
(o) Credit Ratings
The Company has not issued any debt instruments and does not have any fixed deposit programme or any scheme or proposal involving
mobilization of funds during the financial year ended 31st March, 2020. Accordingly requirement of obtaining credit rating is not
applicable.
(p) Commodity price risk / Foreign Exchange Risk and Hedging Activity
Certain key raw materials, such as MEG / PTA used by the Company are derivatives of commodities such as crude oil. Any material
price fluctuation in such commodities can impact the margins of the Company till the impact is appropriately factored in the pricing of
Company’s products. The Company does not undertake commodity hedging activities. Exposure to commodity and commodity risks
faced by the Company throughout the year is Nil.
(q) Outstanding GDRs/ADRs/Warrants
The Company has no outstanding GDRs/ADRs/Warrants as on 31st March, 2020.
(r) Nomination:
Individual shareholders holding shares singly or jointly in physical form can nominate a person in whose name the shares shall be
transferable in case of death of the registered shareholder(s). Nomination facility in respect of shares held in electronic form is also
available with the depository participants as per the bye-laws and business rules applicable to NSDL and CDSL. Nomination form can be
obtained from the Company’s Registrar and Transfer Agent.
(s) Address for Correspondence:
For Transfer / Dematerialisation of Shares, Payment of Dividend on Shares and any other query relating to the shares of the Company.

(i) For Shares held in Physical Form KFin Technologies Private Limited
(Unit: Surat Textile Mills Limited),
Selenium Tower B, Plot 31 & 32,
Financial District, Gachibowli,
Nanakramguda,
Hyderabad 500032.
State: Telengana, India.
Phone No. 040 67161563
Fax No. 040 67161567
Email: [email protected]
(ii) For query on Annual Report Surat Textile Mills Limited
Secretarial Department,
Tulsi Krupa Arcade, 6th Floor,
Puna-Kumbharia Road,
Dumbhal, Surat 395010
(iii) For Shares held in Demat Form Respective Depository Participants
of the shareholders.

46 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
(t) Eliminate Duplicate Mailing
Members holding Equity Shares of the Company in more than one Folio in one name or with the same address as joint members of the
Company, may authorize the Company to discontinue mailing of multiple Annual Reports.
(u) Equity Shares in the suspense account
During the year under review, there were no shares held in the demat suspense account/unclaimed suspense account. The Company has
sent reminders to the shareholders to claim their shares returned undelivered and lying in physical form with the Company.
(v) Secretarial Audit
Pursuant to Regulation 40(9) of the Listing Regulations, certificates have been issued, on a half-yearly basis, by a Company Secretary in
practice, certifying due compliance of share transfer formalities by the Company.
A Company Secretary in practice carries out a quarterly Reconciliation of Share Capital Audit, to reconcile the total admitted capital
with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and he total issued and listed
capital.
The audit confirms that the total issued/paid-up capital is in agreement with the aggregate of the total number of shares in physical form
and the total number of shares in dematerialised form (held with NSDL and CDSL).
Mr. Jigar Vyas of M/s Jigar Vyas And Associates, Practicing Company Secretaries, has conducted a Secretarial Audit of the Company for
FY 2019-20. Their Audit Report confirms that the Company has complied with the applicable provisions of the Act and the Rules made
there under, its Memorandum and Articles of Association, Listing Regulations and the applicable SBI Regulations. The Secretarial Audit
Report forms part of the Board’s Report.
Certificate from Practising Company Secretary
Mr. Jigar Vyas of M/s Jigar Vyas And Associates, Practicing Company Secretaries, has issued a certificate confirming that none of the
Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as directors of companies
by SEBI/Ministry of Corporate Affairs or any such statutory authority.
In accordance with the SEBI Circular dated February 8, 2019, the Company has obtained an Annual Secretarial Compliance Report
from Mr. Jigar Vyas of M/s Jigar Vyas And Associates, Practicing Company Secretaries, confirming compliances with all applicable SEBI
Regulations, Circulars and Guidelines for the year ended 31st March, 2020.
Web link for various documents.
The following documents/information are linked with the website of the Company i.e. www.surattextilemillsltd.com

Particulars Web link

Code Of Conduct http://www.surattextilemillsltd.com/CodeOfConduct.aspx
Annual Return http://www.surattextilemillsltd.com/AnnualReturn.aspx
Familiarisation Programme for Independent http://www.surattextilemillsltd.com/policies/STML Familiarisation-Programme-for-
Director Independent-Director.pdf
Policy For Determining Material Subsidiaries http://www.surattextilemillsltd.com/policies/STML policy-for-determining-material-
subsidiaries.pdf
Policy for Related Party Transaction http://www.surattextilemillsltd.com/policies/STML Policy for Related Party
Transaction.pdf
Corporate Social Responsibility Policy http://www.surattextilemillsltd.com/policies/Corporate Social Responsibility Policy.pdf
Whistle Blower http://www.surattextilemillsltd.com/policies/STML whistle blower.pdf
Preservation of Documents and Archival http://www.surattextilemillsltd.com/policies/STML Preservation of Documents and
Policy Archival Policy.pdf
Policy on Determination of Materiality of http://www.surattextilemillsltd.com/policies/STML Policy on Determination of
Events Information Materiality of Events Information.pdf
Code of Practices and Procedures for Fair http://www.surattextilemillsltd.com/policies/STML Code of Practices and
Disclosure Procedures for Fair Disclosure.pdf

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 SURAT TEXTILE MILLS LIMITED
(w) Details of compliance with mandatory requirements and adoption of the non-mandatory requirements
The Company has complied with all the mandatory requirements and have not adopted non-mandatory requirements.
(x) The Company does not have any material subsidiary company.
(y) Policy on dealing with related party transactions is available on the website of the Company.
(z) The Company does not have any foreign exchange exposure, therefore the company has not framed any such policy for activities related
thereto.
10. Compliance of Discretionary requirements under Part E of Schedule II of the Securities Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015.
1. The Board: The Chairperson does not maintain his separate office at the Company’s expense.
2. Shareholder Rights: The Company publishes the financial results in news papers and places on its website and does not send it to
shareholders.
3. Modified opinion(s) in audit report: The Audit opinion received by the Company has not been modified.
4. Separate posts of chairperson and chief executive officer: The Company has a Managing Director and a Wholetime Director designated
as Executive Director and CFO of the Company.
5. Reporting of internal auditor: The Internal Auditor of the Company directly reports to the Audit Committee of the Company and their
Internal Audit Reports are presented in the meeting of the Audit Committee.
11. Compliance with Corporate Governance requirements specified in Regulations 17 to 27 and clauses (b) to (i) of sub-regulation (2) of
regulation 46 of the SEBI (LODR) Regulations, 2015.
The Company has complied with Corporate Governance requirements as specified in regulations 17 to 27 relating to Board of Directors; Audit
Committee; Nomination and Remuneration Committee; Stakeholders Relationship Committee; Vigil Mechanism, Related Party Transactions,
Corporate Governance Requirements, obligations with respect to Independent Directors, other Directors and Senior Management. The
information and documents specified under clause (b) to (i) of sub-regulation (2) of regulation 46 of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 have been placed on the website of the Company.
12. Non-Mandatory Requirements
Shareholders’ Rights
The half yearly financial results are published in the newspapers as mentioned above and also they are displayed under the investor relations
section on the Company’s website ‘www.surattextilemillsltd.com’. Therefore, the results were not separately circulated to all shareholders.

For Surat Textile Mills Limited

Manikant R. Momaya
Managing Director
Surat, 21st July, 2020 DIN: 00023993

48 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
CEO/CFO CERTIFICATION
(under Regulation 17(8) of SEBI (LODR) Regulations, 2015)
To
The Board of Directors,
Surat Textile Mills Limited
Tulsi Krupa Arcade, 6th Floor,
Puna-Kumbharia Road,
Dumbhal, Surat 395010
We the undersigned, in our respective capacities as Managing Director and Chief Financial Officer of Surat Textile Mills Limited (“the Company”) to
the best of our knowledge and belief certify that:
(a) We have reviewed Financial Statement and the Cash Flow Statement for the year ended 31st March, 2020 and that to the best of our
knowledge and belief, we state that:
(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be
misleading;
(ii) these statement together present a true and fair view of the Company’s affair and are in compliance with the existing accounting
standards, applicable laws and regulations.
We further state that to the best of our knowledge and belief, no transactions entered into by the Company during the year, which are
fraudulent, illegal or violative of the Company’s Code of Conduct.
We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the effectiveness of
the internal control systems of the Company pertaining to financial reporting and have disclosed to the Auditors and the Audit Committee,
deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we have taken or propose to take to
rectify these efficiencies.
We have indicated to the Auditors and the Audit Committee:
(i) significant changes, if any, in internal control over financial reporting during the year;
(ii) significant changes, if any, in accounting policies during the year and that the same have been disclosed in the notes to the financial
statements; and
(iii) instances of significant fraud of which they have become aware and the involvement therein, if any, of the management or an employee
having a significant role in the Company’s internal control systems over financial reporting.

For Surat Textile Mills Limited

Manikant R. Momaya Yogesh C. Papaiya

Managing Director Wholetime Director & CFO
Surat, 21st July, 2020 DIN: 00023993 DIN 00023985

CERTIFICATE OF COMPLIANCE WITH THE CODE OF CONDUCT POLICY

(Regulation 34(3) read with Schedule V (Part D) of the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)
This is to confirm and certify that the Company has adopted a Code of Conduct for Board member and Senior Management Personnel. As provided
under sub-regulation (3) of Regulation 26 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015, the Board member and
Senior Management have confirmed compliance with the Code of Conduct and Ethics for the year ended 31st March, 2020.

For Surat Textile Mills Limited

Manikant R. Momaya
Managing Director
Surat, 21st July, 2020 DIN: 00023993

74th Annual Report 2019-2020 49

 SURAT TEXTILE MILLS LIMITED
INDEPENDENT AUDITORS CERTIFICATE ON CORPORATE GOVERNANCE
To the Members of
Surat Textile Mills Limited
1. We have examined the compliance of conditions of Corporate Governance by Surat Textile Mills Limited (“the Company”), for the year ended
on 31st March, 2020, as stipulated in Regulations 17 – 27, clauses (b) to (i) of Regulation 46(2) and paragraphs C, D and E of Schedule V of
the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations’),
pursuant to the Listing Agreement of the Company with Stock exchanges.
Management Responsibility
2. The compliance with the conditions of Corporate Governance is the responsibility of the management of the Company, including the
preparation and maintenance of all relevant supporting records and documents. This responsibility includes the design, implementation and
maintenance of internal control and procedures to ensure the compliance with the conditions of the Corporate Governance stipulated in the
SEBI Listing Regulations.
Auditors Responsibility
3. Our responsibility is limited to examining the procedures and implementation thereof, adopted by the Company or ensuring the compliance
with the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the
Company.
4. We have examined the books of account and other relevant records and documents maintained by the Company for the purposes of providing
reasonable assurance on the compliance with Corporate Governance requirements by the Company.
5. We have carried out an examination of the relevant records of the Company in accordance with the Guidance Notes on Certification of
Corporate Governance issued by the Institute of Chartered Accountants of India (the ICAI), the Standards on Auditing specified under Section
143(10) of the Companies Act, 2013, in so far as applicable for the purpose of this certificate and as per the Guidance Note on Reports or
Certificates for Special Purposes issued by the ICAI which requires that we comply with the ethical requirements of the Code of Ethics issued
by the ICAI.
Opinion
6. Based on our examination of the relevant records and according to the information and explanation provided to us and the representations
provided by the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the
above-mentioned SEBI Listing Regulations.
7. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which
the Management has conducted the affairs of the Company.

For Sharp & Tannan Associates,

Chartered Accountants
Firm’s Registration No.: 109983W
by the hand of

Tirtharaj Khot
Partner
Pune, 21st July 2020 Membership No.: (F) 037457

50 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF SURAT TEXTILE MILLS LIMITED opinion on these matters. We have determined the key audit matter as
described below:
Report on the Audit of the Standalone Financial Statements
Accounting treatment for customer contracts
Opinion
Description of key audit matter
We have audited the accompanying standalone financial statements
of SURAT TEXTILE MILLS LIMITED (hereinafter referred as “the Revenue amounting to Rs.17,937.38 Lakhs reported in the company’s
Company”), which comprise the balance sheet as at 31st March, financial statements pertains to customer specific contracts and the
2020, the statement of profit and loss (including other comprehensive same are required to satisfy the recognition and measurement criteria
income), the cash flow statement and the statement of changes in as prescribed in IND AS 115, ‘Revenue from Contracts with Customers’.
equity for the year then ended and notes to the standalone financial Revenue recognition is considered as an inherent risk and also as a
statements, including a summary of significant accounting policies and fraud risk. In case of revenue recognition risk of material mis-statement
other explanatory information. significantly increases for its cut-offs, accuracy, completeness and
presentation and disclosure. This can lead to revenue either being
In our opinion and to the best of our information and according to the
recognised in incorrect accounting periods or at incorrect value thereby
explanations given to us, the aforesaid standalone financial statements
impacting the results. Considering these factors, in the context of our
give the information required by the Companies Act, 2013 (hereinafter
audit this matter was of significance and hence a key audit matter.
referred as “the Act”) in the manner so required and give a true and
fair view in conformity with the Indian Accounting Standards prescribed Description of Auditor’s response
under section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015 as amended (hereinafter referred With a view to verify the reasonableness of the revenue accounting we
as “Ind AS”) and other accounting principles generally accepted in carried out following procedures:
India, of the state of affairs (financial position) of the Company as at a) Understanding the internal control environment for revenue
31st March 2020, and its profit(financial performance including other recognition and to test check with a view to verify its operating
comprehensive income), its cash flows and the changes in equity for the effectiveness;
year ended on that date.
b) Read terms of the contracts and verified accuracy of sales
Basis for opinion recognition;
We conducted our audit in accordance with the Standards on Auditing c) Discussed with the management process of identification of
(hereinafter referred as “SAs”) specified under section 143(10) of the variable consideration;
Act. Our responsibilities under those Standards are further described
in the Auditor’s responsibilities for the audit of the standalone financial d) Verified cut-off documents to ensure that revenue is recognized
statements section of our report. We are independent of the Company in in correct accounting period and carried out other substantive
accordance with the Code of Ethics issued by the Institute of Chartered procedures;
Accountants of India together with the ethical requirements that are
e) Performed analytical procedures and obtained reasons for major
relevant to our audit of the standalone financial statements under the
variances;
provisions of the Act and the Rules thereunder, and we have fulfilled
our other ethical responsibilities in accordance with these requirements f) Ensured that revenue is recognized in accordance with accounting
and the Code of Ethics. policy of the Company and Ind AS 115 and necessary disclosures
are made in the financial statements;
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion. Information Other than the Standalone Financial Statements and
Auditor’s Report Thereon (hereinafter referred as “Other Information”)
Emphasis of matter
The Company’s Management and Board of Directors are responsible
We draw attention to Note No. 38 to the financial statements, which
for the preparation of the other information. The other information
describes the economic and social consequences the entity is facing as a
comprises the Board’s report and management discussion and analysis
result of Covid-19 which is impacting operations of the Company, supply
included in the annual report but does not include the standalone
chains, personnel available for work etc.
financial statements and our auditor’s report thereon.
Our opinion is not modified in respect of this matter of emphasis.
Our opinion on the standalone financial statements does not cover
Key audit matter the other information and we do not express any form of assurance
conclusion thereon.
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the standalone financial In connection with our audit of the standalone financial statements,
statements of the current period. These matters were addressed in the our responsibility is to read the other information identified above
context of our audit of the standalone financial statements taken as a and, in doing so, consider whether the other information is materially
whole, in forming our opinion thereon and we do not provide a separate inconsistent with the standalone financial statements or our knowledge

74th Annual Report 2019-2020 51

 SURAT TEXTILE MILLS LIMITED
obtained during the course of our audit, or otherwise appears to be misstatement resulting from fraud is higher than for one resulting
materially misstated. If, based on the work we have performed, we from error, as fraud may involve collusion, forgery, intentional
conclude that there is a material misstatement of this other information, omissions, misrepresentations, or the override of internal control.
we are required to report that fact. We have nothing to report in this
regard. B. Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
Responsibilities of management and those charged with Governance circumstances. Under section 143(3)(i) of the Act, we are also
for the Standalone Financial Statements responsible for expressing our opinion on whether the Company
has adequate internal financial controls system in place and the
The Company’s Management and Board of Directors are responsible operating effectiveness of such controls
for the matters stated in section 134(5) of the Act with respect to the
preparation of these standalone financial statements that give a true C. Evaluate the appropriateness of accounting policies used and the
and fair view of the financial position, financial performance, cash reasonableness of accounting estimates and related disclosures
flows and changes in equity of the Company in accordance with the made by management.
accounting principles generally accepted in India, including the Ind AS.
This responsibility also includes maintenance of adequate accounting D. Conclude on the appropriateness of management’s use of the
records in accordance with the provisions of the Act for safeguarding of going concern basis of accounting and, based on the audit
the assets of the Company and for preventing and detecting frauds and evidence obtained, whether a material uncertainty exists
other irregularities; selection and application of appropriate accounting related to events or conditions that may cast significant doubt
policies; making judgments and estimates that are reasonable and on the Company’s ability to continue as a going concern. If we
prudent; and design, implementation and maintenance of adequate conclude that a material uncertainty exists, we are required to
internal financial controls, that were operating effectively for ensuring draw attention in our auditor’s report to the related disclosures
the accuracy and completeness of the accounting records, relevant to in the standalone financial statements or, if such disclosures are
the preparation and presentation of the standalone financial statements inadequate, to modify our opinion. Our conclusions are based on
that give a true and fair view and are free from material misstatement, the audit evidence obtained up to the date of our auditor’s report.
whether due to fraud or error. However, future events or conditions may cause the Company to
cease to continue as a going concern.
In preparing the standalone financial statements, Company’s
Management and Board of Directors are responsible for assessing E. Evaluate the overall presentation, structure and content of the
the Company’s ability to continue as a going concern, disclosing, as standalone financial statements, including the disclosures, and
applicable, matters related to going concern and using the going concern whether the standalone financial statements represent the
basis of accounting unless management either intends to liquidate the underlying transactions and events in a manner that achieves fair
Company or to cease operations, or has no realistic alternative but to presentation.
do so. Materiality is the magnitude of misstatements in the standalone
The Board of Directors are responsible for overseeing the Company’s financial statements that, individually or in aggregate, makes it probable
financial reporting process. that the economic decisions of a reasonably knowledgeable user of
the standalone financial statements may be influenced. We consider
Auditor’s Responsibilities for the Audit of the Standalone Financial quantitative materiality and qualitative factors in (i) planning the scope
Statements of our audit work and in evaluating the results of our work; and (ii) to
evaluate the effect of any identified misstatements in the standalone
Our objectives are to obtain reasonable assurance about whether the financial statements.
standalone financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s We communicate with those charged with governance regarding,
report that includes our opinion. Reasonable assurance is a high level of among other matters, the planned scope and timing of the audit
assurance but is not a guarantee that an audit conducted in accordance and significant audit findings, including any significant deficiencies in
with SAs will always detect a material misstatement when it exists. internal control that we identify during our audit.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to We also provide those charged with governance with a statement
influence the economic decisions of users taken on the basis of these that we have complied with relevant ethical requirements regarding
standalone financial statements. independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our
As part of an audit in accordance with SAs, we exercise professional independence, and where applicable, related safeguards.
judgment and maintain professional scepticism throughout the audit.
We also: From the matters communicated with those charged with governance,
we determine those matters that were of most significance in the audit
A. Identify and assess the risks of material misstatement of the of the standalone financial statements of the current period and are
standalone financial statements, whether due to fraud or error, therefore the key audit matters. We describe these matters in our
design and perform audit procedures responsive to those risks, auditor’s report unless law or regulation precludes public disclosure
and obtain audit evidence that is sufficient and appropriate to about the matter or when, in extremely rare circumstances, we
provide a basis for our opinion. The risk of not detecting a material determine that a matter should not be communicated in our report

52 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
because the adverse consequences of doing so would reasonably f) With respect to the adequacy of the internal financial
be expected to outweigh the public interest benefits of such controls over financial reporting of the Company and
communication. the operating effectiveness of such controls, refer to our
separate report in “Annexure B”; our report expresses
Other matter an unmodified opinion on the adequacy and operating
Due to the Covid-19 pandemic and the lockdown and other restrictions effectiveness of the Company’s internal financial controls
imposed by the Government and local administration, the audit over financial reporting;
processes carried out subsequent to commencement of lockdown were g) With respect to the other matters to be included in the
based on the remote access and evidence shared digitally. auditor’s report in accordance with the requirements of
Our opinion is not modified in respect of this other matter. section 197(16) of the Act, as amended, we report that in
our opinion and to the best of our information and according
Report on other Legal and Regulatory Requirements to the explanations given to us, the remuneration paid by
the Company to its directors during the year is in accordance
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the
with the provisions of section 197 of the Act; and
Order”), issued by the central government of India in terms of sub-
section (11) of section 143 of the Act, we give in the “Annexure h) With respect to the other matters to be included in the
A”, a statement on the matters specified in paragraphs 3 and 4 of auditor’s report in accordance with rule11 of the Companies
the Order, to the extent applicable. (Audit and Auditors) Rules, 2014, in our opinion and to the
best of our information and according to the explanations
2. As required by section 143 (3) of the Act and based on our audit,
given to us:
we report that:
i. There is no pending litigation of Company as at 31st
a) We have sought and obtained all the information and
March 2020.
explanations which to the best of our knowledge and belief
were necessary for the purposes of our audit; ii. The Company has made provision, as required under
the applicable law or Ind AS, for material foreseeable
b) In our opinion, proper books of account as required by law
loses, if any, on long term contracts including derivative
have been kept by the Company so far as it appears from our
contracts
examination of those books;
iii. There has been no delay in transferring amounts,
c) The balance sheet, the statement of profit and loss (including
required to be transferred, to the Investor Education
other comprehensive income), statement of changes in
and Protection Fund by the Company.
equity and the statement of cash flows dealt with by this
report are in agreement with the books of account;
For Sharp & Tannan Associates,
d) In our opinion, the aforesaid standalone financial statements Chartered Accountants
comply with the Ind AS specified under section 133 of the Firm’s Registration No.: 109983W
Act, read with rule 7 of the Companies (Accounts) Rules, by the hand of
2014;
e) On the basis of the written representations received from Tirtharaj Khot
the directors as on 31st March 2020 taken on record by the Partner
Board of Directors, none of the directors is disqualified as on Membership No.: (F) 037457
31st March 2020 from being appointed as a director in terms Pune, 21st July 2020 UDIN: 20037457AAAABN9141
of section 164 (2) of the Act;

74th Annual Report 2019-2020 53

 SURAT TEXTILE MILLS LIMITED
ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 1 under the heading, “Report on Other Legal (b) According to the information and explanation provided to
and Regulatory Requirements” of our report on even date) us, no dues of income tax, sales tax, service tax, duty of
customs, duty of excise, value added tax, GST or cess which
(i) (a) The Company is maintaining proper records showing full have not been deposited on account of dispute as at 31st
particulars, including quantitative details and situation of March 2020.
fixed assets (i.e. property, plant and equipment, investment
property and other intangible assets of the Company). (viii) Based on our audit procedures and according to the information
and explanation provided to us, the Company has not defaulted in
(b) The fixed assets are being physically verified by the repayment of dues to a financial institution, bank or government.
management at regular intervals based on the programme The Company does not have any debenture holders.
of verification which in our opinion is reasonable. No
(ix) According to information and explanation provided to us, the
material discrepancies were identified during such physical
Company has not raised moneys by way of initial public offer or
verification conducted by the Company during the year.
further public offer (including debt instruments). According to the
(c) According to the information and explanation provided to information and explanations provided to us, term loans availed
us, all title deeds of immovable properties are held in the by the Company were, prima facie; applied for the purposes for
name of the Company. which the loans were obtained.
(x) Based upon the audit procedures performed by us and according
(ii) Physical verification of inventory has been conducted at
to the information and explanations provided to us, no material
reasonable intervals by the management. Discrepancies noticed
fraud by the Company or any material fraud on the Company by
on physical verification were not material and the same have been
its officers or employees has been noticed or reported during the
properly dealt with in the books of account.
year.
(iii) The Company has not granted any loans, secured or unsecured (xi) According to the information and explanation provided to us,
to companies, firms, limited liability partnerships or other parties the managerial remuneration has been paid and provided
covered in the register maintained under Section 189 of the Act. in accordance with the requisite approvals mandated by the
Accordingly, reporting on paragraph 3(iii) of the Order is not provisions of Section 197 read with Schedule V to the Act.
applicable.
(xii) The Company is not a Nidhi Company. Accordingly, reporting on
(iv) According to information and explanation provided to us, the para 3(xii) is not applicable.
Company has complied with provisions of section 185 and section
186 of the Act. (xiii) According to the information and explanation provided to us,
all transactions with the related parties are in compliance with
(v) According to information and explanation provided to us, the Sections 177 and 188 of the Act, wherever applicable, and the
Company has not accepted deposits, hence the directives issued details have been disclosed in the standalone financial statements
by the Reserve Bank of India and the provisions of Sections 73 to as required by the applicable Ind AS.
76 of the Act and the rules framed there under, are not applicable (xiv) According to the information and explanation provided to us,
to it. According to information and explanation provided to us, the Company has not made any preferential allotment or private
no order has been passed by Company Law Board or National placement of shares or fully or partly convertible debentures
Company Law Tribunal or Reserve Bank of India or any court or during the year under review. Accordingly, reporting on para 3(xiv)
any other tribunal in the current year. Accordingly, reporting on is not applicable.
para 3(v) is not applicable.
(xv) According to the information and explanation provided to us, the
(vi) The Central Government has specified maintenance of cost Company has not entered into any non-cash transactions with
records under section 148(1) of the Act. We have broadly reviewed directors or persons connected with them. Accordingly, reporting
these records relating to materials, labour and other items of cost on para 3(xv) is not applicable.
maintained by the Company and are of the opinion that, prima
facie; the prescribed accounts and records have been made and (xvi) According to the information and explanation provided to us, the
maintained. We have not however made a detailed examination of Company is not required to be registered under Section 45-IA of
records with a view to determine whether they are accurate and the Reserve Bank of India Act, 1934. Accordingly, reporting on
complete. para 3(xvi) is not applicable.

(vii) (a) The Company is generally regular in depositing undisputed For Sharp & Tannan Associates,
statutory dues including provident fund, employees’ state Chartered Accountants
insurance, income-tax, goods and service tax, sales-tax,
service tax, duty of customs, duty of excise, value added tax, Firm’s Registration No.: 109983W
cess and any other statutory dues, as applicable, with the by the hand of
appropriate authorities. According to the information and
explanation provided to us, no undisputed amounts payable Tirtharaj Khot
in respect of statutory dues were in arrears as at 31st March Partner
2020, for a period of more than six months from the date
Membership No.: (F) 037457
they became payable.
Pune, 21st July 2020 UDIN: 20037457AAAABN9141

54 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 2 (f) under the heading, “Report on other legal financial reporting and their operating effectiveness. Our audit of
and regulatory requirements” of our report on even date) internal financial controls over financial reporting included obtaining
an understanding of internal financial controls over financial reporting,
Report on the Internal Financial Controls assessing the risk that a material weakness exists, and testing and
[under Clause (i) of sub-section 3 of section 143 of the Companies Act, evaluating the design and operating effectiveness of internal control
2013 (“the Act”)] based on the assessed risk. The procedures selected depend on the
Opinion auditor’s judgment, including the assessment of the risks of material
misstatement of the standalone financial statements, whether due to
We have audited the internal financial controls over financial reporting fraud or error.
of SURAT TEXTILE MILLS LIMITED (hereinafter referred as “the
Company”) as of 31st March 2020 in conjunction with our audit of the We believe that the audit evidence we have obtained is sufficient and
standalone financial statements of the Company for the year ended on appropriate to provide a basis for our audit opinion on the Company’s
that date. internal financial controls system over financial reporting.

In our opinion and to the best of our information and according to the Meaning of Internal Financial Controls Over Financial Reporting
explanations given to us, the Company has, in all material respects, an A Company’s internal financial control over financial reporting is a
adequate internal financial controls system over financial reporting and process designed to provide reasonable assurance regarding the
such internal financial controls over financial reporting were operating reliability of financial reporting and the preparation of standalone
effectively as at 31st March 2020, based on the internal financial control financial statements for external purposes in accordance with generally
over financial reporting criteria established by the Company considering accepted accounting principles. A company’s internal financial control
the essential components of internal control stated in the Guidance over financial reporting includes those policies and procedures
Note on Audit of Internal Financial Controls Over Financial Reporting that(1) pertain to the maintenance of records that, in reasonable
(hereinafter referred as “the guidance note”) issued by the Institute of detail, accurately and fairly reflect the transactions and dispositions
Chartered Accountants of India (hereinafter referred as “ICAI”). of the assets of the company; (2) provide reasonable assurance that
Management’s responsibility for internal financial controls transactions are recorded as necessary to permit preparation of
standalone financial statements in accordance with generally accepted
The Company’s Management and Board of Directors are responsible accounting principles, and that receipts and expenditures of the
for establishing and maintaining internal financial controls based on company are being made only in accordance with authorizations of
the internal control over financial reporting criteria established by the management and directors of the company; and (3) provide reasonable
Company considering the essential components of internal control assurance regarding prevention or timely detection of unauthorized
stated in the guidance note. These responsibilities include the design, acquisition, use, or disposition of the company’s assets that could have
implementation and maintenance of adequate internal financial a material effect on the standalone financial statements.
controls that were operating effectively for ensuring the orderly and
efficient conduct of its business, including adherence to the Company’s Inherent Limitations of Internal Financial Controls Over Financial
policies, the safeguarding of its assets, the prevention and detection of Reporting
frauds and errors, the accuracy and completeness of the accounting Because of the inherent limitations of internal financial controls over
records, and the timely preparation of reliable financial information, as financial reporting, including the possibility of collusion or improper
required under the Act. management override of controls, material misstatements due to
Auditor’s responsibility error or fraud may occur and not be detected. Also, projections of any
evaluation of the internal financial controls over financial reporting to
Our responsibility is to express an opinion on the Company’s internal future periods are subject to the risk that the internal financial control
financial controls over financial reporting based on our audit. We over financial reporting may become inadequate because of changes
conducted our audit in accordance with the guidance note and the in conditions, or that the degree of compliance with the policies or
Standards on Auditing issued by ICAI and deemed to be prescribed procedures may deteriorate.
under section 143(10) of the Act, to the extent applicable to an audit
of internal financial controls. Those Standards and the Guidance Note For Sharp & Tannan Associates,
require that we comply with ethical requirements and plan and perform Chartered Accountants
the audit to obtain reasonable assurance about whether adequate Firm’s Registration No.: 109983W
internal financial controls over financial reporting was established and
by the hand of
maintained and if such controls operated effectively in all material
respects.
Tirtharaj Khot
Our audit involves performing procedures to obtain audit evidence Partner
about the adequacy of the internal financial controls system over Membership No.: (F) 037457
Pune, 21st July 2020 UDIN: 20037457AAAABN9141

74th Annual Report 2019-2020 55

 SURAT TEXTILE MILLS LIMITED
BALANCE SHEET AS AT 31ST MARCH, 2020
(` in Lakhs)
Note No. As at As at
31st March, 2020 31st March, 2019
ASSETS
1 NON-CURRENT ASSETS:
(a) Property, Plant and Equipment 1 598.57 537.88
(b) Investment Property 2 1013.70 1013.70
(c) Financial Assets
(i) Investments 3 647.85 486.34
(ii) Loans and Advances 4 0.00 0.00
(iii) Others Financial Assets 0.00 0.00
(d) Non-Current Tax Assets (Net) 5 28.09 0.00
(e) Deferred Tax Assets (Net) 5 0.00 82.67
(f) Other Non-Current Assets 6 2895.98 2931.88
Total Non-Current Assets 5184.19 5052.47
2 CURRENT ASSETS:
(a) Inventories 8 752.26 1583.82
(b) Financial Assets
(i) Investments 3 3119.08 6073.45
(ii) Trade Receivables 9 350.83 400.13
(iii) Cash and Cash Equivalents 10 2013.73 565.13
(iv) Bank Balances Other than (iii) above 10 1304.97 2.39
(v) Loans and Advances 4 147.71 136.25
(c) Other Current Assets 6 597.67 368.48
Total Current Assets 8286.25 9129.65
TOTAL ASSETS 13470.44 14182.12
EQUITY AND LIABILITIES
EQUITY:
(a) Equity Share Capital 11 2220.64 2220.64
(b) Other Equity 12 10261.40 9870.23
Total Equity 12482.04 12090.87
LIABILITIES:
1 NON-CURRENT LIABILITIES:
(a) Financial Liabilities
(i) Borrowings 13(a) 0.00 0.00
(ii) Other Financial Liabilities 17 67.25 0.00
(b) Long-Term Provisions 14 59.83 40.32
(c) Deferred Tax Liabilities (Net) 15 80.99 0.00
Total Non-Current Liabilities 208.07 40.32
2 CURRENT LIABILITIES:
(a) Financial Liabilities
(i) Borrowings 13(b) 0.00 0.00
(ii) Trade Payables
1. Dues of Micro Enterprises and Small Enterprises 16 1.39 0.27
2. Dues of Other than Micro Enterprises and Small Enterprises 16 659.49 1917.76
(iii) Other Financial Liabilities 17 85.56 96.00
(b) Other Current Liabilities 18 27.89 19.17
(c) Short-Term Provisions 14 6.00 13.12
(d) Current Tax Liabilities (Net) 14 0.00 4.61
Total Current Liabilities 780.33 2050.93
TOTAL EQUITY AND LIABILITIES 13470.44 14182.12
Summary of Significant Accounting Policies A&B
The accompanying Notes are an Integral Part of the Financial Statements. 1 to 39
As per our attached report of even date For and on behalf of Board of Directors
For Sharp & Tannan Associates. Manikant R Momaya
Chartered Accountants Managing Director
Firm Registration No. 109983W DIN: 00023993
by the hand of
Tirtharaj Khot Yogesh C Papaiya
Partner Wholetime Director and CFO
Membership No.(F) 037457 DIN: 00023985
UDIN: 20037457AAAABN9141
Hanisha Arora
Company Secretary
Pune, 21st July, 2020 Surat, 21st July, 2020

56 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2020
(` in Lakhs)
Note No. 2019-20 2018-19
INCOME:
Revenue from Operations 19 18028.46 21628.10
Other Income 20 460.79 406.65
TOTAL INCOME 18489.25 22034.75
EXPENSES:
Cost of Materials Consumed 21 14036.35 16741.23
Purchases of Stock-In-Trade 22 0.00 393.62
Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade 23 35.90 501.19
Employee Benefits Expense 24 216.34 221.04
Finance Costs 25 76.54 108.30
Depreciation and Amortisation Expense 26 46.39 35.06
Other Expenses 27 2999.02 2959.82
TOTAL EXPENSES 17410.54 20960.26
PROFIT BEFORE TAX 1078.71 1074.49
Tax Expenses
(1) Current tax 7 166.09 201.47
(2) Deferred tax 7 129.43 354.12
(3) Taxes in Respect of Earlier Years 7 2.87 (695.95)
Total Tax Expenses 298.39 (140.36)
PROFIT AFTER TAX 780.32 1214.85
OTHER COMPREHENSIVE INCOME:
A (i) Items that will not be reclassified to profit or (loss) 28 (354.91) (369.65)
(ii) Income tax relating to items that will not be reclassified to profit or (loss) 28 (34.24) 39.25
OTHER COMPREHENSIVE INCOME/(EXPENSE) FOR THE YEAR (389.15) (330.40)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 391.17 884.45
Earnings per Equity Share of face value of ` 1 each 29 0.35 0.55
Summary of Significant Accounting Policies A&B
The accompanying Notes are an Integral Part of the Financial Statements. 1 to 39

As per our attached report of even date For and on behalf of Board of Directors
For Sharp & Tannan Associates. Manikant R Momaya
Chartered Accountants Managing Director
Firm Registration No. 109983W DIN: 00023993
by the hand of
Tirtharaj Khot Yogesh C Papaiya
Partner Wholetime Director and CFO
Membership No.(F) 037457 DIN: 00023985
UDIN: 20037457AAAABN9141
Hanisha Arora
Company Secretary
Pune, 21st July, 2020 Surat, 21st July, 2020

74th Annual Report 2019-2020 57

 SURAT TEXTILE MILLS LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2020

(` in Lakhs)
2019-20 2018-19
A. CASH FLOW FROM OPERATING ACTIVITIES
Profit/(Loss) before tax 1078.71 1074.51
Adjustment for:
Depreciation and Amortisation Expense 46.39 35.06
Finance Costs 76.54 108.30
Interest Income (96.35) (48.89)
Dividend Income (79.82) (137.98)
(Profit)/Loss on Redemption of Investments (32.48) (50.37)
Loss on Investments in Bonds 0.35 0.00
Unrealised Gain on Investments (250.03) (94.35)
Share of Loss in Partnership Firm 0.00 0.01
Profit on Sale of Shopping Complex 0.00 (53.15)
Credit Balance Write Back (1.63) (19.69)
Bad debts and advance written off 6.04 62.30
Profit / (Loss) on Sale of Assets 0.00 41.75
Fair Value (Gain) / Loss 0.00 3.08
(330.99) (153.93)
Operating Profit before Working Capital Changes 747.72 920.58
Movements in Working Capital
(Increase) / Decrease in Provisions 6.90 (44.78)
(Increase) / Decrease in Trade and Other Receivables (242.28) (479.20)
(Increase) / Decrease in Inventories 831.57 119.69
(Decrease) / Increase in Trade Payables (1254.61) 298.15
(Decrease) / Increase in Other Financial Liabilities (31.10) (133.93)
(Decrease) / Increase in Other Current Liabilities 8.72 (16.14)
(680.80) (256.21)
Cash Generated from Operations 66.92 664.37
Direct Taxes ( Paid ) / Refund. (201.67) (147.15)
Net Cash Flow from Operating Activities (A) (134.75) 517.22
B. CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (2.26) (19.75)
Sale of Fixed Assets 0.00 45.62
Sale of Investment Properties 0.00 63.00
Purchase of Current Investments (1999.35) (5920.98)
Sale of Current Investments 4724.95 3551.10
Sale of Long Term Investments 0.00 11.08
Dividend Income on Current Investment 79.82 137.98
Interest Income 51.02 36.58
Loans to Other Company/Firm 82.22 350.00
Investment In Partnership Firm 0.00 (0.01)
Net Cash Flow used in Investing Activities (B) 2936.40 (1745.38)

58 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
(` in Lakhs)
2019-20 2018-19
C. CASH FLOW FROM FINANCIAL ACTIVITIES
Proceeds/Repayment of Short Term Borrowings 0.00 (150.74)
Repayment of Long Term Borrowings 0.00 (21.59)
Payment of Lease Liabilities (16.87) 0.00
Interest (Paid) / Earn (76.54) (108.30)
LC Margin FD (1286.01) 432.38
LC Margin FD Interest Income 26.37 0.00
Net Cash Flow from Financing Activities (C) (1353.05) 151.75
Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) 1448.60 (1076.41)
Cash and Cash Equivalents at the beginning of the year 565.13 1641.54
Cash and Cash Equivalents at the end of the year (Refer Note No.10) 2013.73 565.13
Notes :
1 Statement of cash flows has been prepared under the indirect method as set out in the Ind AS 7 “Statement of Cash Flows”
2 There are no reconciliation items in relation to financing activities for which disclosure is required as per Ind AS 7.
3 Refer note 27.2 for cash outflow on account of corporate social responsibility expenditure.

As per our attached report of even date For and on behalf of Board of Directors
For Sharp & Tannan Associates. Manikant R Momaya
Chartered Accountants Managing Director
Firm Registration No. 109983W DIN: 00023993
by the hand of
Tirtharaj Khot Yogesh C Papaiya
Partner Wholetime Director and CFO
Membership No.(F) 037457 DIN: 00023985
UDIN: 20037457AAAABN9141
Hanisha Arora
Company Secretary
Pune, 21st July, 2020 Surat, 21st July, 2020

74th Annual Report 2019-2020 59

 SURAT TEXTILE MILLS LIMITED
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31ST MARCH, 2020
A Equity Share Capital
Particulars As at 31st March, 2020 As at 31st March, 2019
No. of Shares ` in Lakhs No. of Shares ` in Lakhs
Balance at the beginning of the year 222064440 2220.64 222064440 2220.64
Shares issued 0 0.00 0 0.00
Outstanding at the end of the year 222064440 2220.64 222064440 2220.64

B Other Equity (` in Lakhs)

Particulars Retained Other Total
Earnings Comprehensive
Income
Balance at the beginning of the reporting period i.e. 1st April, 2019 10168.16 (297.93) 9870.23
Total Comprehensive Income for the year 780.32 (389.15) 391.17
Transfer to / (from) retained earnings 0.00 0.00 0.00
Balance at the end of the reporting period i.e. 31st March, 2020 10948.48 (687.08) 10261.40

Particulars Retained Other Total

Earnings Comprehensive
Income
Balance at the beginning of the reporting period i.e. 1st April, 2018 8953.31 32.47 8985.78
Total Comprehensive Income for the year 1214.85 (330.40) 884.45
Transfer to / (from) retained earnings 0.00 0.00 0.00
Balance at the end of the reporting period i.e. 31st March, 2019 10168.16 (297.93) 9870.23

As per our attached report of even date For and on behalf of Board of Directors
For Sharp & Tannan Associates. Manikant R Momaya
Chartered Accountants Managing Director
Firm Registration No. 109983W DIN: 00023993
by the hand of
Tirtharaj Khot Yogesh C Papaiya
Partner Wholetime Director and CFO
Membership No.(F) 037457 DIN: 00023985
UDIN: 20037457AAAABN9141
Hanisha Arora
Company Secretary
Pune, 21st July, 2020 Surat, 21st July, 2020

60 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
Notes annexed to and forming part of the Financial Statements
A. Corporate Information (v) Differences, if any, between the actual results and estimates
are recognised in the period in which the results are known
Surat Textile Mills Limited (the ‘Company’) is domiciled in India.
The Company’s registered office is at 6th Floor, Tulsi Krupa Arcade, (vi) Fair value of Investments
Puna-Kumbharia Road, Dumbhal, Surat-395010. The Company Critical Accounting Judgements and Key Sources of Estimation
is listed on the Bombay Stock Exchange (BSE). The Company is Uncertainty
engaged in the business of manufacturing Polyester Chips and
Partially Oriented Yarn (POY). In the application of the Company’s accounting policies, which
are described above, the Management of the Company are
B. Summary of Significant Accounting Policies required to make judgements, estimates and assumptions about
B.1. Basis for Preparation of Financial Statements: the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated
These financial statements have been prepared in accordance assumptions are based on historical experience and other factors
with the Indian Accounting Standards (hereinafter referred to as that are considered to be relevant. Actual results may differ from
the ‘Ind AS’) as notified by Ministry of Corporate Affairs pursuant these estimates. The estimates and underlying assumptions are
to section 133 of the Companies Act, 2013 read with Rule 3 of reviewed on an ongoing basis. Revisions to accounting estimates
the Companies (Indian Accounting Standards) Rules, 2015 as are recognized in the period in which the estimate is revised if the
amended from time to time. revision affects only that period or in the period of the revision
The financial statements have been prepared on a historical and future periods if the revision affects both current and future
cost basis, except for certain financial assets and liabilities periods.
that are measured at fair value at the end of each reporting (i) Impairment of Property, Plant and Equipment:
period. Historical cost is generally based on the fair value of the
considerations given in exchange for goods and services. Fair Determining whether property, plant and equipment is
value is the price that would be received to sell an asset or paid impaired requires an estimation of the value in use of the
to transfer a liability in an orderly transaction between market cash-generating unit. The value in use calculation requires
participants at the measurement date. to estimate the future cash flows expected to arise from the
cash-generating unit and a suitable discount rate in order to
Items included in the Financial Statements of the Company calculate present value. When the actual future cash flows
are measured using the currency of the primary economic are less than expected, a material impairment loss may
environment in which the Company operates (‘functional arise.
currency’). The Financial Statements of the Company are
(ii) Useful Lives and Residual Value of Property, Plant and
presented in Indian currency (` ), which is also the functional and
Equipment:
presentation currency of the Company, and all values are rounded
to the nearest Lakhs with two decimal, except when otherwise The Company reviews the estimated useful lives of property,
indicated. plant and equipment at the end of each reporting period.
During the current year, there are no major changes required
The financial statements are approved for issue by the Company’s to the useful lives of assets.
Board of Directors on 21st July 2020.
(iii) Provision for Litigations and Contingencies:
B.2. Application of New Ind AS
The provision for litigations and contingencies are
“Effective 1 April 2019, the company has adopted Ind AS 116 determined based on evaluation made by the management
“”Leases”” and accordingly has recognized right‐to‐use asset of the present obligation arising from past events the
equal to lease liability which is the present value of the remaining settlement of which is expected to result in outflow of
lease payments, discounted using incremental borrowing rate at resources embodying economic benefits, which involves
the date of initial application i.e. 1 April 2019. Adoption of Ind AS judgements around estimating the ultimate outcome
116, has no material impact on profit and earnings per share.” of such past events and measurement of the obligation
B.3. Key Sources of Estimation: amount. Due to the judgements involved in such estimations
the provisions are sensitive to the actual outcome in future
The preparation of financial statements in conformity with Ind periods.
AS requires that management of the Company makes estimates
and assumptions that affect the reported amounts of income (iv) Allowance for Expected Credit Losses :
and expenses of the period, the reported balances of assets and The expected credit allowance is based on the ageing of the
liabilities and the disclosures relating to contingent liabilities as on days receivables which are past due and the rates derived
the date of the financial statements. Examples of such estimates based on past history of defaults in the provision matrix.
include: (v) Income Tax:
(i) The useful lives and Residual value of Property, Plant and Significant judgements are involved in determining the
Equipment provision for income taxes, including amount expected to be
(ii) Income Tax Assets / Liabilities paid/recovered for uncertain tax positions.
(iii) Allowance for Expected Credit Loss of Financial Assets (vi) Leases:

(iv) Future Obligations in Respect of Retirement Benefit Plans The Company evaluates if an arrangement qualifies to be a
lease as per the requirements of Ind AS 116. Identification

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 SURAT TEXTILE MILLS LIMITED
of a lease requires significant judgement. The Company Capital work-in-progress for production, supply of administrative
uses judgement in assessing whether a contract (or part purposes is carried at cost less accumulated impairment loss, if
of contract) include a lease, the lease term (including any, until construction and installation are complete and the asset
anticipated renewals), the applicable discount rate, is ready for its intended use.
variable lease payments whether are in-substance fixed. Depreciation Methods, Estimated Useful Lives and Residual
The judgement involves assessment of whether the Value
asset included in the contract is a fully or partly identified
asset based on the facts and circumstances, whether the Depreciation is recognized (other than on capital work-in-progress)
contract include a lease and non-lease component and if on a straight line method over the estimated useful lives of assets.
so, separation thereof for the purpose of recognition and Depreciation on assets acquired/ purchased, sold/discarded
measurement, determination of lease term basis, inter alia during the year is provided on a pro-rata basis from the date of
the non-cancellable period of lease and whether the lessee each addition till the date of sale/retirement. The estimated useful
intends to opt for continuing with the use of the asset upon lives of assets are stated below:
the expiry thereof, and whether the lease payments are
Sr. Category of Assets Useful Life*
fixed are variable or a combination of both.
No. (in Years)
B.4. Current versus Non-current Classification 1 Buildings:
Assets and liabilities are classified as Current or Non-Current as per (i) Factory Buildings 30
the provisions of the Schedule III notified under the Companies (ii) Other Buildings 60
Act, and the Company’s normal operating cycle.
(iii) Fences,Wells,Tube wells 5
An asset is treated as current when it is:
2 Plant and Machinery:
(i) Expected to be realised or intended to be sold or consumed (i) Continuous Process Plants 25
in normal operating cycle;
(ii) Other 8 to 10
(ii) Held primarily for the purpose of trading; 3 Furniture and Fixtures 10
(iii) Expected to be realised within twelve months after the 4 Vehicles 8 to 10
reporting period, or
5 Office Equipments 5
(iv) Cash or cash equivalent unless restricted from being 6 Electrical installations and Equipments 10
exchanged or used to settle a liability for at least twelve
months after the reporting period. 7 Computer Equipments 3 to 6
8 Property, plant and equipment 1
All other assets are classified as non-current.
individually costing ` 10,000 or less
A liability is current when: *Estimated Useful life of assets consistent with the useful life
(i) It is expected to be settled in normal operating cycle; specified in the Schedule II of the Companies Act, 2013.
The economic useful lives of assets is assessed based on a
(ii) It is held primarily for the purpose of trading; technical evaluation, taking into account the nature of assets, the
(iii) It is due to be settled within twelve months after the estimated usage of assets, the operating conditions of the assets,
reporting period, or past history of replacement, anticipated technological changes,
maintenance history, etc. The estimated useful life is reviewed
(iv) There is no unconditional right to defer the settlement of the at the end of each reporting period, with effect of any change in
liability for at least twelve months after the reporting period estimate being accounted for on a prospective basis.
All other liabilities are classified as non-current. Where the cost of part of the asset is significant to the total cost
of the assets and the useful life of that part is different from the
The operating cycle is the time between the acquisition of assets
useful of the remaining asset, useful life of that significant part
for processing and their realisation in cash and cash equivalents.
is determined separately. Depreciation of such significant part, if
Based on the nature of business and its activities, the Company has
any, is based on the useful life of that part.
ascertained its operating cycle as twelve months for the purpose
of Current & Non-Current classification of assets and liabilities. Freehold land is not depreciated.
B.5. Property, Plant and Equipments and Other Intangible Assets: An item of property, plant and equipment is derecognized upon
disposal or when no future economic benefits are expected to
Property, plant and equipment held for use in production or arise from the continued use of the asset. Any gain or loss arising
supply of goods or services or for administrative purposes are on the disposal or retirement of an item of property, plant and
stated at cost less accumulated depreciation less accumulated equipment, determined as the difference between the sales
impairment, if any. The cost of fixed assets comprises its purchase proceeds and the carrying amount of the asset, is recognized in
price net of any trade discounts and rebates, any import duties the Statement of Profit or Loss.
and other taxes (other than those subsequently recoverable Leases:
from the tax authorities), any directly attributable expenditure
on making the asset ready for its intended use, and interest on The Company, as a lessee, recognises a right-of-use asset and a
borrowings attributable to acquisition of qualifying fixed assets up lease liability for its leasing arrangements, if the contract conveys
to the date the asset is ready for its intended use. the right to control the use of an identified asset.

62 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
The contract conveys the right to control the use of an identified Raw materials, stores and spare parts and traded goods: cost
asset, if it involves the use of an identified asset and the Company includes cost of purchase and other costs incurred in bringing
has substantially all of the economic benefits from use of the the inventories to their present location and condition. Cost is
asset and has right to direct the use of the identified asset. The determined on weighted average basis.
cost of the right-of-use asset shall comprise of the amount of the
Finished goods and work in progress: cost includes cost of
initial measurement of the lease liability adjusted for any lease
direct materials and labour and a proportion of manufacturing
payments made at or before the commencement date plus any
overheads based on the normal operating capacity, but excluding
initial direct costs incurred. The right-of-use assets is subsequently
borrowing costs. Cost is determined on weighted average basis.
measured at cost less any accumulated depreciation, accumulated
impairment losses, if any and adjusted for any remeasurement Net realisable value represents the estimated selling price for
of the lease liability. The right-of-use assets is depreciated using inventories less all estimated cost of completion and costs
the straight-line method from the commencement date over the necessary to make the sale.
shorter of lease term or useful life of right-of-use asset. B.8. Revenue Recognition:
The Company measures the lease liability at the present value of Revenue is measured at the fair value of the consideration received
the lease payments that are not paid at the commencement date or receivable. Amounts disclosed as revenue are inclusive of excise
of the lease. The lease payments are discounted using the interest duty and net of returns, trade allowances, rebates, value added
rate implicit in the lease, if that rate can be readily determined. taxes, goods and service tax and amounts collected on behalf
If that rate cannot be readily determined, the Company uses of third parties. Revenue from sale of goods is recognised when
incremental borrowing rate. For short-term and low value leases, the substantial risks and rewards of ownership are transferred to
the Company recognises the lease payments as an operating the buyer which generally coincides with dispatch of goods from
expense on a straight-line basis over the lease term. factory/stock points.
B.6. Impairment of Tangible Assets: Interest Income from a financial asset is recognized when it is
At the end of each reporting period, the Company reviews the probable that the economic benefits will flow to the company and
carrying amounts of tangible assets to determine whether there the amount of income can be measured reliably. Interest income is
is any indication that those assets have suffered an impairment accrued on a time basis, by reference to the principal outstanding
loss. If any such indication exists, the recoverable amount of and at the effective interest rate applicable, which is the rate that
the asset is estimated in order to determine the extent of the exactly discounts estimated future cash receipts through the
impairment loss, if any. When it is not possible to estimate the expected life of the financial asset's net carrying amount on initial
recoverable amount of individual asset, the Company estimates recognition.
the recoverable amount of the cash generating unit to which an Eligible export incentives are recognised in the year in which
individual asset belongs. When a reasonable and consistent basis the conditions precedent is met and there is significant certainty
of allocation can be identified, corporate assets are also allocated about the collectability.
to individual cash-generating units, or otherwise they are
allocated to the smallest group of cash-generating units for which Revenue in respect of other income is recognised to the extent
a reasonable and consistent allocation basis can be identified. that the Company is reasonably certain of its ultimate realisation.
Recoverable amount is the higher of fair value less costs of disposal B.9. Foreign Currencies:
and value in use. In assessing, value in use, the estimated future The financial statements are presented in Indian rupees, which is
cash flows are discounted to their present value using a pre-tax the functional currency of the Company.
discount rate that reflects current market assessment of the time
value of money and the risks specific to the asset for which the Transactions in currencies other than the Company's functional
estimates of future cash flows have not been adjusted. currency are recognized at the exchange rate prevailing on the
date of transaction. Monetary assets and liabilities denominated
If the recoverable amount of an asset (or cash-generating unit) is in foreign currencies are translated into the functional currency at
estimated to be less than its carrying amount, the carrying amount the closing exchange rate prevailing as at the reporting date. Non-
of the asset (or cash-generating unit) is reduced to its recoverable monetary assets and liabilities denominated in a foreign currency
amount. An impairment loss is recognized immediately in the are translated using the exchange rate prevailing at the date of
Statement of Profit or Loss. initial recognition (in case measured at historical cost) or at the
When an impairment loss subsequently reverses, the carrying rate prevailing at the date when the fair value is determined (in
amount of the asset (or a cash-generating unit) is increased to case measured at fair value).
the revised estimate of its recoverable amount, but so that the Foreign exchange differences are recognized in profit or loss in
increased carrying amount does not exceed the carrying amount the period in which they arise except for exchange difference on
that would have determined had no impairment loss been foreign currency borrowings relating to assets under construction
recognized for the asset (or cash-generating unit) in prior years. for future productive use, which are included in the cost of those
The reversal of an impairment loss is recognized immediately in assets when they are regarded as an adjustment to interest cost
the Statement of Profit or Loss. on those foreign currency borrowings.
B.7. Inventories: B.10. Employee Benefits:
Inventories are valued at the lower of cost and net realisable value. Short-term Employee Benefits
Costs incurred in bringing each product to its present location and
condition is accounted for as follows: A liability is recognized for benefits accruing to employees in
respect of wages and salaries in the period the related service

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 SURAT TEXTILE MILLS LIMITED
is rendered at the undiscounted amount of the benefit that is Gratuity: The Company has an obligation towards gratuity, a
expected to be paid in exchange for that service. defined benefit retirement plan covering eligible employees.
Other Long-term Employee Benefits The plan provides for a lump sum payment to vested
employees at retirement, death while in employment or
The liability for earned leave is not expected to be settled wholly on termination of employment of an amount equivalent
within twelve months after the end of the period in which to 15/26 days salary payable for each completed year of
the employees render the related service. They are therefore service. Vesting occurs upon completion of five years of
measured as the present value of expected future payments to service. The Company accounts for the liability for gratuity
be made in respect of services provided by employees up to the benefits payable in future based on an independent actuarial
end of the reporting period using the projected unit credit method valuation carried out at each balance sheet date using the
with actuarial valuations being carried out at each balance sheet projected unit credit method and the same is unfunded.
date. The benefits are discounted using the market yields at the
end of the reporting period that have terms approximating to the (iii) Termination Benefits:
terms of the related obligation. Remeasurements as a result of Termination benefits such as compensation under employee
experience adjustments and changes in actuarial assumptions are separation schemes are recognised as expense in the period
recognized in other comprehensive income. in which they are incurred.
Post-Employment Benefits B.11. Borrowing Costs:
(i) Defined Contribution Plans: Borrowing costs directly attributable to the acquisition,
Payments to defined contribution retirement benefit plans construction or production of qualifying assets, which are assets
are recognized as expenses when the employees have that necessarily take a substantial period of time to get ready for
rendered the service entitling them to the contribution. their intended use or sale, are added to the cost of those assets,
Provident Fund: The employees of the Company are until such time as the assets are substantially ready for their
entitled to receive benefits in respect of provident fund, intended use or sale. Interest income earned on the temporary
a defined contribution plan, in which both employees and investment of specific borrowings pending their expenditure on
the Company make monthly contributions at a specified qualifying assets is deducted from the borrowing cost eligible for
percentage of the covered employees’ basic salary (currently capitalization. All other borrowing costs are recognized in profit or
12% of employees’ basic salary). The contributions as loss in the period in which they are incurred.
specified under the law are made to the provident fund and B.12. Taxation:
pension fund administered by the Regional Provident Fund
Commissioner. The Company recognizes such contributions Income tax expense represents the sum of tax currently payable
as an expense when incurred. and deferred tax.
(ii) Defined Benefit Plans: Current tax
For defined benefit retirement plans, the cost of providing The tax currently payable is based on the taxable profit for the
benefits is determined using the projected unit credit year. Taxable profit differs from profit before tax as reported in the
method, with actuarial valuations being carried out at the statement of profit or loss because of items of income or expense
end of each annual reporting period. Re-measurements, that are taxable or deductible in other years and items that are
comprising actuarial gains and losses, the effect of changes never taxable or deductible. The current tax is calculated using the
to asset ceiling (if applicable) and the return on plan assets tax rates that have been enacted or substantially enacted by the
(excluding net interest), is recognized in other comprehensive end of the reporting period.
income in the period in which they occur. Re-measurements Advance taxes and provisions for current income taxes are
recognized in other comprehensive income are reflected presented in the balance sheet after offsetting advance tax paid
immediately in retained earnings and is not reclassified to and income tax provision arising in the same tax jurisdiction and
profit or loss. Past service cost is recognized in the Statement where the relevant tax paying units intends to settle the asset and
of Profit or Loss in the period of plan amendment. liability on net basis.
Defined benefit costs comprising service cost (including Minimum Alternative Tax (MAT) credit is recognised as an asset
current and past service cost and gains and losses on only when and to the extent there is convincing evidence that
curtailments and settlements) and net interest expense or the Company will pay normal income tax during the specified
income is recognized in profit or loss. period. In the year in which the MAT credit becomes eligible to be
The defined benefit obligation recognized in the balance recognised as an asset in accordance with the recommendations
sheet represents the actual deficit or surplus in the contained in Guidance Note issued by the Institute of Chartered
Company's defined benefit plans. Any surplus resulting Accountants of India, the said asset is created by way of a credit
from this calculation is limited to the present value of any to the statement of profit and loss. The Company reviews the
economic benefits available in the form of refunds from the same at each balance sheet date and writes down the carrying
plans or reductions in future contributions to the plans. amount of MAT Credit Entitlement to the extent there is no longer
The obligations are presented as current liabilities in the convincing evidence to the effect that Company will pay normal
balance sheet if the entity does not have an unconditional income tax during the specified period.
right to defer settlement for at least twelve months after the Deferred tax
reporting period, regardless of when the actual settlement is
expected to occur. Deferred tax is recognized on temporary differences between
the carrying amounts of assets and liabilities in the financial

64 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
statements and the corresponding tax bases used in the used, the increase in the provision due to the passage of time is
computation of taxable profits. Deferred tax liabilities are recognized as a finance cost.
generally recognized for all taxable temporary differences. Contingent Liabilities are disclosed when there is a possible
Deferred tax assets are generally recognized for all deductible obligation arising from past events, the existence of which will
temporary differences to the extent that it is probable that taxable be confirmed only by the occurrence or non-occurrence of one
profits will be available against which those deductible temporary or more uncertain future events not wholly within the control of
differences can be utilized. Such deferred tax assets and liabilities the Company or a present obligation that arises from past events
are not recognized if the temporary difference arises from the where it is either not probable that an outflow of resources will
initial recognition (other than in a business combination) of assets be required to settle the obligation or a reliable estimate of the
and liabilities in a transaction that affects neither the taxable profit amount cannot be made.
nor the accounting profit. In addition, deferred tax liabilities are
not recognized if the temporary difference arises from the initial B.14. Financial Instruments:
recognition of goodwill. Financial assets and liabilities are recognised when the Company
The carrying amount of deferred tax asset is reviewed at the end becomes a party to the contractual provisions of the instruments
of each reporting period and reduced to the extent that it is no and are initially measured at fair value. Transaction costs that are
longer probable that sufficient taxable profits will be available to directly attributable to the acquisition or issue of financial assets
allow all or part of the asset to be recovered. and liabilities (other than financial assets and financial liabilities at
fair value through profit or loss) are added to or deducted from the
Deferred tax liabilities and assets are measured at the tax rates fair value of the financial assets or liabilities on initial recognition.
that are expected to apply in the period in which the liability is Transaction costs directly attributable to the acquisition of
settled or the asset is realized, based on tax rates (and tax laws) financial assets or financial liabilities at fair value through profit or
that have been enacted or substantively enacted by the end of the loss are recognised immediately in profit or loss.
reporting period.
(A) Financial Assets
The measurement of deferred tax liabilities and assets reflects the
tax consequences that would follow from the manner in which the a) Initial Recognition and Measurement
Company expects, at the end of the reporting period, to recover or All financial assets and liabilities are initially recognized at
settle the carrying amount of its assets and liabilities. fair value. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial
Deferred tax assets and liabilities are offset when they relate
liabilities, which are not at fair value through profit or loss,
to income taxes levied by the same taxation authority and the
are adjusted to the fair value on initial recognition. Purchase
relevant entity intends to settle its current tax assets and liabilities
and sale of financial assets are recognised using trade date
on a net basis.
accounting.
Current tax and Deferred tax for the year
b) Subsequent Measurement
Current and deferred tax are recognized in the Statement of Profit (i) Financial Assets Carried at Amortised Cost (AC)
or Loss, except when they relate to items that are recognized
in other comprehensive income or directly in equity, in which A financial asset is measured at amortised cost if it
case, the current and deferred tax are also recognized in other is held within a business model whose objective is
comprehensive income or directly in equity respectively. to hold the asset in order to collect contractual cash
flows and the contractual terms of the financial asset
B.13. Provisions and Contingent Liabilities: give rise on specified dates to cash flows that are solely
Provisions are recognized when the Company has a present payments of principal and interest on the principal
obligation (legal or constructive) as a result of past event, it amount outstanding.
is probable that the Company will be required to settle the (ii) Financial Assets at Fair Value through Other
obligation, and a reliable estimate can be made of the amount of Comprehensive Income (FVTOCI)
the obligation.
A financial asset is measured at FVTOCI if it is held
The amount recognized as provision is the best estimate of the within a business model whose objective is achieved
consideration required to settle the present obligation at the by both collecting contractual cash flows and selling
end of the reporting period, taking into account the risks and financial assets and the contractual terms of the
uncertainties surrounding the obligation. When a provision is financial asset give rise on specified dates to cash flows
measured using the cash flows estimated to settle the present that are solely payments of principal and interest on
obligation, its carrying amount is the present value of those cash the principal amount outstanding.
flows (when the effect of time value of money is material).
(iii) Financial Assets at Fair Value through Profit or Loss
When some or all of the economic benefits required to settle (FVTPL)
a provision are expected to be recovered from a third party, a
receivable is recognized as an asset it is virtually certain that A financial asset which is not classified in any of the
reimbursement will be received and the amount of the receivable above categories are measured at FVTPL.
can be measured reliably. (iv) Investment in Subsidiaries, Associates and Joint
Ventures
If the effect of the time value of money is material, provisions
are discounted using a current pre-tax rate that reflects, when The Company has accounted for its investments in
appropriate, the risks specific to the liability. When discounting is subsidiaries, associates and joint venture at cost.

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c) Other Equity Investments difference between the carrying amount of a financial
liability derecognized and the consideration paid or payable
All other equity investments are measured at fair value,
is recognized in the Statement of Profit or Loss.
with value changes recognised in Statement of Profit and
Loss, except for those equity investments for which the d) Foreign Exchange Gains and Losses
Company has elected to present the value changes in ‘Other Financial liabilities denominated in a foreign currency
Comprehensive Income’. and are measured at amortized cost at the end of each
d) Impairment of Financial Assets reporting period, the foreign exchange gains and losses are
determined based on the amortized cost of the instruments
In accordance with Ind AS 109, the Company uses ‘Expected
and are recognized in the Statement of Profit or Loss.
Credit Loss’ (ECL) model, for evaluating impairment of
financial assets other than those measured at fair value The fair value of financial liabilities denominated in a
through profit and loss (FVTPL). foreign currency is determined in that foreign currency
and translated at the spot rate at the end of the reporting
Expected credit losses are measured through a loss allowance at
period. For financial liabilities that are measured at fair value
an amount equal to:
through profit or loss, the foreign exchange component
* The 12-months expected credit losses (expected credit forms part of the fair value gains or losses and is recognized
losses that result from those default events on the financial in the Statement of Profit and Loss.
instrument that are possible within 12 months after the
B.15. Cash and Cash Equivalents:
reporting date); OR
Cash and cash equivalents comprise cash in hand and
* Full lifetime expected credit losses (expected credit losses
unencumbered, highly liquid bank and other balances (with
that result from all possible default events over the life of the
original maturity of three months or less) that are readily
financial instrument).
convertible into known amounts of cash and which are subject to
For trade receivables Company applies ‘simplified approach’ insignificant risk of changes in value
which requires expected lifetime losses to be recognised from
B.16. Statement of Cash Flow:
initial recognition of the receivables. The Company uses historical
default rates to determine impairment loss on the portfolio of Cash flow statement is prepared segregating the cash flows from
trade receivables. At every reporting date these historical default operating, investing and financing activities. Cash flow from
rates are reviewed and changes in the forward booking estimates operating activities is reported using indirect method, adjusting
are analysed. the net profits for the effects of:
For other assets, the Company uses 12 month ECL to provide for (i) Transactions of a non-cash nature.
impairment loss where there is no significant increase in credit (ii) Any deferrals or accruals of past or future operating cash
risk. If there is significant increase in credit risk full lifetime ECL is receipts or payments.
used.
(iii) Items of income or expense associated with investing or
(B) Financial Liabilities financing cash flows.
a) Initial Recognition and Measurement (iv) Cash and cash equivalents (including bank balances) shown
All financial liabilities are recognized at fair value and in case in the Statement of Cash Flows exclude items which are not
of loans, net of directly attributable cost. Fees of recurring available for general use as on the date of Balance Sheet.
nature are directly recognised in the Statement of Profit and B.17. Events after Reporting Date:
Loss as finance cost.
Where events occurring after the Balance Sheet date provide
b) Subsequent Measurement evidence of conditions that existed at the end of the reporting
Financial liabilities are carried at amortized cost using the period, the impact of such events is adjusted within the financial
effective interest method. For trade and other payables statements. Otherwise, events after the Balance Sheet date only
maturing within one year from the balance sheet date, the of material size or nature are disclosed.
carrying amounts approximate fair value due to the short B.18. Earnings per Share:
maturity of these instruments.
The Company reports basic and diluted earnings per share (EPS)
c) De-Recognition in accordance with Indian Accounting Standard 33 "Earnings per
Financial liabilities are derecognized when, and only Share". Basic EPS is computed by dividing the net profit or loss
when, the obligations are discharged, cancelled or have attributable to ordinary equity holders of the parent entity by the
expired. An exchange with a lender of a debt instruments weighted average number of equity shares outstanding during
with substantially different terms is accounted for as the period. Diluted EPS is computed by dividing the net profit or
an extinguishment of the original financial liability and loss attributable to ordinary equity holders of the parent entity
recognition of a new financial liability. Similarly, a substantial by weighted average number of equity shares outstanding during
modification of the terms of an existing financial liability is the year as adjusted for the effects of the effects of all dilutive
accounted for as an extinguishment of the original financial potential ordinary shares dilutive potential equity shares (except
liability and the recognition of a new financial liability. The where the results are anti-dilutive).

66 74th Annual Report 2019-2020

 Notes annexed to and forming part of the Financial Statements (Contd.)
Note 1 : Property, Plants & Equipments (` in Lakhs)

Description Tangible Assets:

Freehold Buildings Plant & Furniture Electrical Motor Office Computers TOTAL Right to GRAND
Land Machinery & Fittings Installations Vehicles Equipments & Use Asset: TOTAL
& Data Buildings
Equipments Processing
GROSS BLOCK
Balance as at 31st March 2018 72.60 304.37 143.08 1.67 9.05 198.50 37.91 2.05 769.23 0.00 769.23
Additions 0.00 2.41 0.00 4.26 0.00 0.00 11.50 1.58 19.75 0.00 19.75
Retirements/(Deductions) 0.00 0.00 0.00 0.00 0.00 136.99 0.03 0.00 137.02 0.00 137.02
Balance as at 31st March 2019 72.60 306.78 143.08 5.93 9.05 61.51 49.38 3.63 651.96 0.00 651.96
Additions 0.00 0.00 0.00 0.47 0.00 0.00 0.00 1.79 2.26 104.82 107.08
Retirements/(Deductions) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Balance as at 31st March 2020 72.60 306.78 143.08 6.40 9.05 61.51 49.38 5.42 654.22 104.82 759.04
ACCUMULATED DEPRECIATION
Balance as at 31st March 2018 0.00 22.36 1.00 0.34 0.00 76.00 28.38 0.60 128.68 0.00 128.68
Additions 0.00 11.58 0.50 0.26 0.00 21.13 1.16 0.43 35.06 0.00 35.06
Retirements/(Deductions) 0.00 0.00 0.00 0.00 0.00 49.66 0.00 0.00 49.66 0.00 49.66
Balance as at 31st March 2019 0.00 33.94 1.50 0.60 0.00 47.47 29.54 1.03 114.08 0.00 114.08
Additions 0.00 11.66 0.50 0.62 0.00 7.88 2.19 0.67 23.52 22.87 46.39
Retirements/(Deductions) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Balance as at 31st March 2020 0.00 45.60 2.00 1.22 0.00 55.35 31.73 1.70 137.60 22.87 160.47
NET BLOCK
Balance as at 31st March 2019 72.60 272.84 141.58 5.33 9.05 14.04 19.84 2.60 537.88 0.00 537.88
Balance as at 31st March 2020 72.60 261.18 141.08 5.18 9.05 6.16 17.65 3.72 516.62 81.95 598.57
Note:
(i) Estimated Amount of Contract Remaining to be Executed on Capital Account is ` NIL (Previous Year ` NIL)
Transition to Ind AS 116, ‘Leases’
Effective 1 April 2019, the Company has adopted Ind AS 116 “Leases”. Company has adopted modified retrospective approach and has recognized right-to-use asset equal to
lease liability which is the present value of the remaining lease payments, discounted using incremental borrowing rate at the date of initial application i.e. 1st April 2019.
SURAT TEXTILE MILLS LIMITED

74th Annual Report 2019-2020

67
 SURAT TEXTILE MILLS LIMITED
Notes annexed to and forming part of the Financial Statements (Contd.)
On transition company has recognised lease liability and right -to-use asset at ` 104.82 Lakhs, accordingly there is no impact on retained earnings
on transition to Ind AS 116.

(` in Lakhs)
Right-to-use asset Amt `
Opening right-to-use asset 0.00
Net addition during the year 104.82
Depreciation charged during the year (22.87)
Closing right-to-use asset 81.95

The net impact of change in accounting policy on account on adoption of Ind AS 116 over FY.2019-20 is as follows:
(` in Lakhs)
Particulars Amt `
Increase in right-to-use asset 81.95
Increase in non-current lease liability 67.25
Increase in current lease liability 20.70
Increase in depreciation 22.87
Increase in finance cost 8.79
Decrease in rent expenses 25.66

1. Short term leases and leases for low value assets are continued to be accounted for as rent expenses.
2. Total cash outflow for lease arrangements during the year is ` 30.28 Lakhs (Including GST).

(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 2 Investment Properties
Shopping Complex Kamla Estate 19.84 19.84
Land at Varachha 905.46 905.46
Land at Vareli 88.40 88.40
Total 1013.70 1013.70

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 SURAT TEXTILE MILLS LIMITED
Notes annexed to and forming part of the Financial Statements (Contd.)
(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 3 Investments
Non-Current Investment
Quoted
Fair Value through Other Comprehensive Income
In Equity Shares of Group Company
Garden Silk Mills Ltd., FV ` 10 fully paid up equity share 480878 (31 March 2019 : 480878) 25.25 96.90
Amortised Cost
Investment in Government Bond
SBI Bank - 8.75% Perpetual Bond, FV ` 10,00,000 each 50 (31 March 2019 : NIL) 510.94 0.00
536.19 96.90
Unquoted
Fair Value through Other Comprehensive Income
Investment in Partnership Firm
M/s. Isha Enterprise 701.90 701.90
Less: Provision for Diminution Value of Investment # (590.24) (312.46)
111.66 389.44
Total Non-Current Investments 647.85 486.34
# The Provision for Diminution in value of investment is pertain to fair valuation of equity shares of
Garden Silk Mills Ltd held by Isha Enterprise.

(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Current Investment
Fair Value through Profit and Loss
Investment in Mutual Funds
ABSL Arbitrage Fund - Dividend-Direct Plan- of ` 10/- each 0.00 876.26
NIL (31 March 2019 : 7947480.081)
ABSL Corporate Bond Fund - Growth-Direct Plan- of ` 10/- each 634.20 580.19
803966.148 (31 March 2019 : 803966.148)
ABSL Short Term Opportunities Fund - Growth-Direct Plan- of ` 10/- each 0.00 433.77
NIL (31 March 2019 : 1352849.679)
Baroda Dynamic Equity Fund - Regular Growth- of ` 10/- each 0.00 21.12
NIL (31 March 2019 : 200000.000)
Baroda Ultra Short Duration Fund - Direct Plan Growth- of ` 10/- each 0.00 50.57
NIL (31 March 2019 : 4727.360)
Baroda Ultra Short Duration Fund - Regular Plan Growth- of ` 10/- each 0.00 31.17
NIL (31 March 2019 : 2917.907)

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 SURAT TEXTILE MILLS LIMITED
Notes annexed to and forming part of the Financial Statements (Contd.)
(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
IDFC Ultra Short Term Fund Direct Plan - Growth- of ` 10/- each 404.20 762.83
3543643.105 (31 March 2019 : 7193144.948)
Reliance Arbitrage Fund - Direct Monthly Dividend Reinvest Plan- of ` 10/- each 0.00 1315.04
NIL (31 March 2019 : 11958425.100)
Reliance Arbitrage Fund - Direct Plan Dividend Reinvest Plan- of ` 10/- each 0.00 409.23
NIL (31 March 2019 : 3174039.322)
Reliance Arbitrage Fund - Growth Plan- of ` 10/- each 0.00 52.30
NIL (31 March 2019 : 276207.049)
Reliance Credit Risk Fund - Direct Growth Plan- of ` 10/- each 0.00 831.14
NIL (31 March 2019 : 3056152.431)
Reliance Prime Debt Fund - Direct Plan Growth Plan- of ` 10/- each 0.00 205.02
NIL (31 March 2019 : 511082.831)
Nippon India Short Term Fund - Direct Growth Plan- of ` 10/- each 778.64 504.81
1969305.869 (31 March 2019 : 1399380.354) (formerly known as Reliance Short Term Fund)
ICICI Prudential Banking & PSU Debt Fund - Direct Growth Plan- of ` 10/- each 439.37 0.00
1858280.674 (31 March 2019 : NIL)
ICICI Prudential Savings Fund - Direct Growth Plan- of ` 10/- each 418.64 0.00
107242.372 (31 March 2019 : NIL)
IDFC Banking & PSU Debt Fund Direct Plan - Growth- of ` 10/- each 444.03 0.00
2471744.866 (31 March 2019 : NIL)
Total Current Investments 3119.08 6073.45
Total Investments 3766.93 6559.79

(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 4 Loans and Advances
Non-Current
Unsecured, Considered Good
Loans to Employees 0.00 0.00
0.00 0.00
Current
Unsecured, Considered Good
Deposits - Receivable* 135.00 185.00
Less: Prov. for ECL on ICDs/Loans (32.22) (59.63)
Loans to Employees 0.00 0.00
Income Receivables 44.93 10.88
147.71 136.25
Total 147.71 136.25
* The Company has used a practical expedient by computing the expected credit loss allowance for Deposit Receivables based on the provision
matrix. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as per the provision matrix.

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Notes annexed to and forming part of the Financial Statements (Contd.)
(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 5 Non-Current Tax Assets
Advance Income Tax (Net of Provision) 28.09 0.00
Deferred tax Assets 0.00 82.67
Total 28.09 82.67

(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 6 Other Assets
Non-Current
Unsecured, Considered Good
Deposits - Receivable Long term 12.46 48.36
Paintings & Artifacts 2883.52 2883.52
2895.98 2931.88
Current
Unsecured, Considered Good
Advance to Suppliers 461.76 140.90
Income Receivables 98.38 154.78
Prepaid Expenses 9.24 6.61
Balances with Statutory Authorities 28.29 66.19
597.67 368.48
Total 3493.65 3300.36

(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 7 Taxes on Income
The Major Components of Income Tax Expense for the year ended March 2020 and March 2019 are:
(i) Statement of Profit or Loss
Current Tax 166.09 201.47
Deferred Tax 129.43 354.12
Short/(Excess) Provision of tax for earlier years 2.87 (695.95)
Total Income Tax Expense 298.39 (140.36)

(ii) Other Comprehensive Income

Deferred Tax relating to Net Gain/(Loss) (34.24) 39.25
on Re-measurement of Defined Benefit Plans
(iii) Reconciliation of Effective Tax Rate
Income before tax 1078.71 1074.49
Enacted Tax Rate in India (as per MAT) 16.69% 20.59%
Expected Tax Expense (C)=(A)*(B) 180.06 221.24

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 SURAT TEXTILE MILLS LIMITED
Notes annexed to and forming part of the Financial Statements (Contd.)
(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Tax Effect of :
Exempted Income (13.32) (28.41)
Expenses disallowed 0.27 0.31
Other Items (0.92) 8.33
Current Tax Provision (A) 166.09 201.47
Incremental deferred Tax liability on account of depreciation on property, Plant and
Equipment and Intangible Assets 50.85 (4.68)
Incremental deferred Tax liability / (Asset) on account of financial asset and other items 78.58 358.80
Deferred Tax Provision (B) 129.43 354.12
Taxes in respect of earlier years (C ) 2.87 (695.95)
Tax Expense recognised in statement of profit and loss (A+B+C) 298.39 (140.36)
(` in Lakhs)

Opening Balance Recognised Recognised Closing Balance

as on 01/04/2019 in Profit & Loss in OCI as on 31/03/2020
(iv) Movement of Deferred Tax
Tax effect of Items Constituting Deferred Tax
Liabilities:
Unrealised Gain on MF Investments 26.23 50.85 0.00 77.08
Total Deferred Tax Liabilities 26.23 50.85 0.00 77.08
Tax effect of Items Constituting Deferred Tax
Assets:
Carried Forward Losses 63.64 (84.42) 0.00 (20.78)
Employees Benefits 7.44 0.00 (7.44) 0.00
Revaluation of Investments 35.61 0.00 (26.80) 8.81
Effect of 43B 2.22 4.17 0.00 6.39
Effect of Lease Asset 0.00 1.67 0.00 1.67
Total Deferred Tax Assets 108.91 (78.58) (34.24) (3.91)
Deferred Income Tax Assets/(Liabilities) after 82.68 (129.43) (34.24) (80.99)
Set Off

(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 8 Inventories (at lower of cost and net realisable value)
Raw Materials 322.65 982.70
Raw Materials In Transit 0.00 59.63
322.65 1042.33
Finished Goods (incl. Stock in trade) 113.28 139.48
Finished Goods in Transit 23.58 33.28
136.86 172.76
Stores, Spares, Chemicals & Consumables 292.75 236.90
Stores, Spares, Chemicals & Consumables in Transit 0.00 131.83
292.75 368.73
Total 752.26 1583.82

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 SURAT TEXTILE MILLS LIMITED
Notes annexed to and forming part of the Financial Statements (Contd.)
(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 9 Trade Receivables
Unsecured, Considered Good* 350.77 400.13
Considered Doubtful 0.06 2.45
350.83 402.58
Less: Allowance for credit losses 0.00 2.45
Total 350.83 400.13
* Refer Note 34.2 for Amount due from Related Parties.

(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 10 Cash and Cash Equivalents
Cash on Hand 20.74 24.99
Balances with Banks in Current Accounts 992.99 540.14
FD with Banks (maturity in less than 3 months) 1000.00 0.00
Total 2013.73 565.13
Other Bank Balances
FD with Banks (maturity in 3 to 12 months) 18.96 2.39
Margin Money with Banks 1286.01 0.00
Total 1304.97 2.39

(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 11 Equity Share Capital
Authorised Share Capital
75,00,00,000 (75,00,00,000) Equity Shares of `1/- each 7500.00 7500.00
Total 7500.00 7500.00
Issued, Subscribed and Paid up *
22,20,64,440 (22,20,64,440) Equity Shares of ` 1/- each fully paid up 2220.64 2220.64
Total 2220.64 2220.64
* No Changes during the year and immediately Preceding Previous year.
11.01 The Details of Shareholders holding more than 5% of Paid-up Equity Share Capital as on Year End.

Name of the Shareholder As at 31st March, 2020 As at 31st March, 2019

No. of Shares % held No. of Shares % held
Vareli Trading Company Ltd. 77580026 34.94% 77580026 34.94%
Shri Praful A. Shah (Individual) 27830471 12.53% 27830471 12.53%
Garden Silk Mills Limited 14500000 6.53% 14500000 6.53%
IDBI Bank Ltd. 0 0.00% 11457609 5.16%

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 SURAT TEXTILE MILLS LIMITED
Notes annexed to and forming part of the Financial Statements (Contd.)
11.02 For the period of five years immediately preceding the date as at which the balance sheet is prepared, no shares are
i) Allotted as fully paid up pursuant to contracts without payment being received in cash
ii) Allotted as fully paid shares by way of bonus shares
iii) Bought back.

(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 12 Other Equity
Retained Earnings
Balance as per last Balance Sheet 10168.16 8953.31
Add: Profit/(Loss) for the Year 780.32 1214.85
10948.48 10168.16
Other Comprehensive Income
Balance as per last Balance Sheet (297.93) 32.47
Add: OCI for the year (389.15) (330.40)
(687.08) (297.93)
Total 10261.40 9870.23
Nature and Purpose of Reserves
Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other
distributions paid to shareholders.
Items of Other Comprehensive Income
i) Remeasurements of Net Defined Benefit Plans: Differences between the interest income on plan assets and the return actually achieved, and
any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised
in ‘Other comprehensive income’ and subsequently not reclassified to the Statement of Profit and Loss.
ii) Equity Instruments through Other Comprehensive Income: The fair value change of the equity instruments measured at fair value through
other comprehensive income is recognised in Equity instruments through Other Comprehensive Income. Upon de-recognition, the cumulative
fair value changes on the said instruments will not be reclassified to the Statement of Profit and Loss.

(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 13 Borrowings
(a) Long-Term Borrowings (Secured)
Term Loan from Banks 0.00 0.00
Less: Current Maturities of Long term debt (Note: 17) 0.00 0.00
0.00 0.00
(b) Short-Term Borrowings (Secured)
Cash Credit Facilities 0.00 0.00
Total 0.00 0.00

74 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
Notes annexed to and forming part of the Financial Statements (Contd.)
(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 14 Provisions
Long-Term
Provisions for Employee Benefits 59.83 40.32
Short-Term
Provisions for Employee Benefits 6.00 13.12
Others
Provision for Income Tax (net) 0.00 4.61
Total 65.83 58.05

(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 15 Non-Current Tax Liabilities
Deferred Tax Liabilities (net) 80.99 0.00
Total 80.99 0.00

(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 16 Trade Payables
a) Acceptances 167.59 1105.78
b) Payable to Others
i) Payable to Micro and Small Enterprises* 1.39 0.27
ii) Others including Creditors for Expenses# 491.90 811.98
660.88 1918.03
*Information in Respect of Micro, Small and Medium Enterprises as at 31st March, 2020 as disclosure requirement under MSMED act, 2006 are
applicable.
# Refer Note 34.2 for Amount payable to Related Parties.
(` in Lakhs)
Particulars As at As at
31st March, 2020 31st March, 2019
(a) Principal Amount Due 1.39 0.12
(b) Interest on Principal Amount Due Nil Nil
(c) Interest and Principal Amount paid beyond appointment day Nil Nil
(d) The Amount of Interest Due and Payable for the period of delay in making payment Nil 0.15
(which have been paid but beyond the appointed date during the year) but without
adding the amount of interest specified under MSMED Act.
(e) The Amount of Interest accrued and remaining unpaid at the end of the year 0.00 0.15
(f) The Amount of further Interest remaining due and payable even in the succeeding years, Nil Nil
until such date when the interest dues as above are actually paid to the Small Enterprise,
for the purpose of disallowance as a deductible expenditure under Section 23 of MSMED Act.

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 SURAT TEXTILE MILLS LIMITED
Notes annexed to and forming part of the Financial Statements (Contd.)
(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 17 Other Financial Liabilities
Non Current
Lease Liabilities - Building 67.25 0.00
67.25 0.00
Current
Payable - Expenses 64.36 95.50
Lease Liabilities - Building 20.70 0.00
Deposits - Payable 0.50 0.50
Creditors for Capital Goods 0.00 0.00
Current Maturities of Long Term Debt (Refer Note : 13a) 0.00 0.00
85.56 96.00

(` in Lakhs)
As at As at
31st March, 2020 31st March, 2019
Note: 18 Other Current Liabilities
Goods and Services Tax 7.06 1.09
Advances from Customers 13.16 11.35
Payable - Expenses 2.55 1.92
Payable - TDS 5.12 4.81
Total 27.89 19.17

(` in Lakhs)
2019-20 2018-19
Note: 19 Revenue from Operations
Sale of Products 17937.38 21532.45
Other Operating Revenue 91.08 95.65
Total 18028.46 21628.10

(` in Lakhs)
2019-20 2018-19
19.01 Particulars of Sale of Products
Chips 17937.38 20826.49
POY 0.00 300.78
MEG 0.00 79.58
PTA 0.00 325.60
Others 91.08 95.65
Total 18028.46 21628.10

76 74th Annual Report 2019-2020

 SURAT TEXTILE MILLS LIMITED
Notes annexed to and forming part of the Financial Statements (Contd.)
19.02 Reconciliation of Revenue from Sale of Product with Contracted Price (` in Lakhs)
2019-20 2018-19
Contracted Price 18065.38 22641.70
Add: Export Benefits 0.96 0.29
Less: Rate Difference, etc. 128.96 1109.54
17937.38 21532.45
Note: 20 Other Income

(` in Lakhs)
2019-20 2018-19
Interest Income
Bank Deposits 46.02 14.87
Investments in Bonds 6.94 0.00
Others 43.39 34.02
Dividend Income
on Current Investments 79.82 137.98
Other Non-Operating Income
Profit on Sale of Shopping Complex 0.00 53.15
Profit on Sale of Current Investments 32.48 50.37
Unrealised gain on Current Investments (FVTPL) 250.03 94.35
Credit Balances Write Back 1.63 19.69
Miscellaneous Receipts 0.48 2.22
Total 460.79 406.65

(` in Lakhs)
2019-20 2018-19
Note: 21 Cost of Materials Consumed
Opening Stock of Raw Material 1042.33 736.58
Add: Purchases during the year 13316.67 17046.98
14359.00 17783.56
Less: Closing Stock of Raw Material 322.65 1042.33
Total 14036.35 16741.23

(` in Lakhs)
2019-20 2018-19
21.01 Value of Imports on CIF Basis in Respect of
Stores, Spares, Chemicals & Consumables 1172.64 1389.42
Total 1172.64 1389.42

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 SURAT TEXTILE MILLS LIMITED
Notes annexed to and forming part of the Financial Statements (Contd.)
(` in Lakhs)
2019-20 2018-19
Note: 22 Purchases of Stock-in-trade
PTA 0.00 314.12
MEG 0.00 79.50
Total 0.00 393.62

(` in Lakhs)
2019-20 2018-19
Note: 23 Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade
Opening Stock
Finished Goods and Stock-in-trade 172.76 673.95
Work-in-Progress 0.00 0.00
172.76 673.95
Less: Closing Stock
Finished Goods and Stock-in-trade 136.86 172.76
Work-in-Progress 0.00 0.00
136.86 172.76
Total 35.90 501.19

(` in Lakhs)
2019-20 2018-19
Note: 24 Employee Benefits Expense
Salaries and Wages 196.39 191.74
Contribution to Provident and Other Funds 10.64 11.61
Gratuity 6.60 11.96
Staff Welfare Expenses 2.71 5.73
Total 216.34 221.04
(a) Defined Contribution Plan:
The Company has Recognized `3.40 Lakhs for Provident Fund contribution in the Statement of Profit and Loss for the year ended March 31,
2020 (Previous Year `3.66 Lakhs)
(b) Defined Benefit Plan:
The present value of obligation is determined based on actuarial valuation.
As per Ind AS 19 “Employee benefits”, the disclosures as defined in the Accounting Standards are given below:

Annexure 1 : Funded status of the plan (` in Lakhs)

Particulars Gratuity Leave Benefits
31/03/2020 31/03/2019 31/03/2020 31/03/2019
(12 months) (12 months) (12 months) (12 months)
Present value of unfunded obligations 52.12 41.27 13.70 12.17
Present value of funded obligations 0.00 0.00 0.00 0.00
Fair value of plan assets 0.00 0.00 0.00 0.00
Net Liability (Asset) 52.12 41.27 13.70 12.17

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 SURAT TEXTILE MILLS LIMITED
Notes annexed to and forming part of the Financial Statements (Contd.)
(` in Lakhs)
Particulars Gratuity Leave Benefits
31/03/2020 31/03/2019 31/03/2020 31/03/2019
(12 months) (12 months) (12 months) (12 months)
Current Liability 5.28 7.50 0.72 5.63
Non-Current Liability 46.85 33.78 12.98 6.55
Net Liability 52.13 41.28 13.70 12.18

Annexure 2 : Profit and Loss account for the current period (` in Lakhs)
Particulars Gratuity Leave Benefits
31/03/2020 31/03/2019 31/03/2020 31/03/2019
(12 months) (12 months) (12 months) (12 months)
Service cost:
Current service cost 3.73 6.27 7.78 5.03
Past service cost and loss/(gain) on 0.00 0.00 0.00 0.00
curtailments and settlement
Net interest cost 2.87 5.69 0.72 1.73
Net value of remeasurements on the obligation 0.00 0.00 1.72 3.04
and plan assets
Total included in 'Employee Benefit Expense 6.60 11.96 10.22 9.80
Total Charge to Profit & Loss 6.60 11.96 10.22 9.80

Past Service cost is on account of increase in Gratuity Ceiling from `10,00,000 to `20,00,000

Other Comprehensive Income for the current period (` in Lakhs)

Particulars Gratuity Leave Benefits
31/03/2020 31/03/2019 31/03/2020 31/03/2019
(12 months) (12 months) (12 months) (12 months)
Due to Change in financial assumptions 3.04 (0.16) 0.74 (0.04)
Due to change in demographic assumption (0.01) 0.00 (0.00) 0.00
Due to experience adjustments 0.72 (4.84) 0.98 3.08
Return on plan assets excluding amounts 0.00 0.00 0.00 0.00
included in interest income
Amounts recognized in Other Comprehensive 3.75 (5.00) 1.72 3.04
Income

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 SURAT TEXTILE MILLS LIMITED
Notes annexed to and forming part of the Financial Statements (Contd.)
Annexure 3: Reconciliation of defined benefit obligation (` in Lakhs)
Particulars Gratuity Leave Benefits
31/03/2020 31/03/2019 31/03/2020 31/03/2019
(12 months) (12 months) (12 months) (12 months)
Opening Defined Benefit Obligation 41.27 77.43 12.17 22.75
Transfer in/(out) obligation 0.62 0.00 0.00 0.00
Current service cost 3.73 6.27 7.78 5.03
Interest cost 2.87 5.69 0.72 1.73
Components of actuarial (gain)/losses on
obligations:
Due to Change in financial assumptions 3.04 (0.16) 0.74 (0.04)
Due to change in demographic assumption (0.01) 0.00 0.00 0.00
Due to experience adjustments 0.72 (4.84) 0.98 3.08
Past service cost 0.00 0.00 0.00 0.00
Loss (gain) on curtailments 0.00 0.00 0.00 0.00
Liabilities extinguished on settlements 0.00 0.00 0.00 0.00
Liabilities assumed in an amalgamation in the 0.00 0.00 0.00 0.00
nature of purchase
Exchange differences on foreign plans 0.00 0.00 0.00 0.00
Benefits paid (0.13) (43.12) (8.69) (20.37)
Closing Defined Benefit Obligation 52.11 41.27 13.70 12.18

Annexure 4: Reconciliation of net defined benefit liability (` in Lakhs)

Particulars Gratuity Leave Benefits
31/03/2020 31/03/2019 31/03/2020 31/03/2019
(12 months) (12 months) (12 months) (12 months)
Net opening provision in books of accounts 41.27 77.43 12.17 22.75
Transfer in/(out) obligation 0.62 0.00 0.00 0.00
Transfer (in)/out plan assets 0.00 0.00 0.00 0.00
Employee Benefit Expense as per Annexure 2 6.60 11.96 10.22 9.80
Amounts recognized in Other Comprehensive 3.75 (5.00) 0.00 0.00
(Income)
Total 52.04 84.39 22.39 32.55
Benefits paid by the Company (0.13) (43.12) (8.69) (20.37)
Contributions to plan assets 0.00 0.00 0.00 0.00
Closing provision in books of accounts 52.11 0.00 13.70 12.18

Annexure 5: Principle actuarial assumptions (` in Lakhs)

Particulars Gratuity Leave Benefits
31/03/2020 31/03/2019 31/03/2020 31/03/2019
(12 months) (12 months) (12 months) (12 months)
Discount Rate 6.85% 7.60% 6.85% 7.65%
Salary Growth Rate 7.00% 7.00% 7.00% 7.00%
Withdrawal Rates 2% at all ages 2% at all ages 2% at all ages 2% at all ages
Leave Availment Rate 0% p.a. 0% p.a.
Leave Encashment Rate 0% p.a. 0% p.a.

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Notes annexed to and forming part of the Financial Statements (Contd.)
Annexure 6: Expected cash flows based on past service liability (` in Lakhs)
Particulars Gratuity Leave Benefits
Cash flows % Cash flows %
Year 1 5.28 5.30% 0.72 2.60%
Year 2 2.36 2.40% 0.63 2.30%
Year 3 10.21 10.20% 6.64 24.20%
Year 4 1.17 1.20% 0.27 1.00%
Year 5 3.78 3.80% 0.80 2.90%
Year 6 to Year 10 24.51 24.50% 4.70 17.10%
The future accrual is not considered in arriving at the above cash-flows.
The Expected contribution for the next year is ` 5.28 Lakhs.
The Weighted Average Duration (Years) as at valuation date is 8.11 years.

Annexure 7: Sensitivity to key assumptions (` in Lakhs)

Particulars Gratuity Leave Benefits
31/03/2020 31/03/2019 31/03/2020 31/03/2019
(12 Months) (12 Months) (12 Months) (12 Months)
Discount rate Sensitivity
Increase by 0.5% 50.18 39.75 13.23 11.83
(% change) -3.72% -3.69% -3.48% -2.82%
Decrease by 0.5% 54.21 42.91 14.22 12.55
(% change) 3.99% 3.96% 3.78% 3.10%
Salary growth rate Sensitivity
Increase by 0.5% 54.17 42.90 14.22 12.55
(% change) 3.93% 3.96% 3.75% 3.10%
Decrease by 0.5% 50.19 39.74 13.23 11.83
(% change) -3.70% -3.71% -3.49% -2.85%
Withdrawal rate (W.R.) Sensitivity
W.R. x 110% 52.13 41.31 13.70 12.19
(% change) 0.01% 0.10% 0.00% 0.09%
W.R. x 90% 52.12 41.23 13.70 12.16
(% change) -0.01% -0.10% 0.00% -0.09%
A description of methods used for sensitivity analysis and its Limitations:
Sensitivity analysis is performed by varying a single parameter while keeping all the other parameters unchanged
Sensitivity analyse is fails to focus on the interrelationship between underlying parameters,
Hence, the results may vary if two or more variables are changed simultaneously.
The method used does not indicate anything about the likelihood of change in any parameter and the extent of the change if any.

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Notes annexed to and forming part of the Financial Statements (Contd.)
(` in Lakhs)
2019-20 2018-19
Note: 25 Finance Costs
Interest Expenses 24.02 62.53
Interest on Lease Liabilities 8.79 0.00
Other Financial Charges 43.73 46.45
76.54 108.98
Less: Interest Recovered from Party 0.00 0.68
Total 76.54 108.30

(` in Lakhs)
2019-20 2018-19
Note: 26 Depreciation and Amortisation Expense
Depreciation on Tangible Assets 23.52 35.06
Depreciation - Right of Use Assets 22.87 0.00
Total 46.39 35.06

(` in Lakhs)
2019-20 2018-19
Note: 27 Other Expenses
Manufacturing Expenses
Consumption of Stores, Spares and Chemicals 1449.05 1569.52
Power and Fuel 906.66 803.12
Factory Expenses 24.59 25.37
Packing Charges 58.00 52.89
R&M - Plant and Machinery 9.56 15.72
R&M - Buildings 8.49 3.65
R&M - Others 13.50 15.30
2469.85 2485.57
Selling and Distribution Expenses
Freight, Octroi, Carting, Loading, Unloading, etc. 68.15 67.35
Commission and Discount 69.56 5.95
Advertisement 0.00 0.51
137.71 73.81
Establishment Expenses
General Charges 78.09 50.82
Legal and Professional Charges 158.95 98.06
Rent 65.10 74.66
Insurance 23.10 22.03
Rates and Taxes 22.09 25.28
Auditors' Remuneration 10.26 14.66
Loss on Sale of Fixed Assets 0.00 41.75
Corporate Social Responsibility 27.89 7.80
Miscellaneous Balance Write Off 0.00 0.22
Bad-Debts Write Off 35.90 0.00
Bad and Doubtful Debts / (Recovery) on ECL (29.86) 62.08
Exchange (Gain) / Loss (0.06) 3.08
391.46 400.44
Total 2999.02 2959.82

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Notes annexed to and forming part of the Financial Statements (Contd.)
(` in Lakhs)
2019-20 2018-19
27.01 Payment to Auditors:
(a) Paid to Statutory Auditors:
Statutory Audit Fees 2.75 7.00
Certification Fees/Limited review 3.11 3.00
(b) Paid to Other Auditors:
Tax Audit Fees 0.75 0.75
Cost Audit Fees 0.75 0.75
Internal Audit Fees 1.00 0.75
GST/VAT Audit Fees 1.39 1.30
Stock Audit Fees 0.00 0.41
Reimbursement of out of Pocket Expenses 0.51 0.70
Total 10.26 14.66
27.02 Corporate Social Responsibility:
(a) As per section 135 of the Companies Act, 2013 (‘the Act’), a company, meeting the applicability threshold, needs to spend at least 2%
of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. A CSR
committee has been formed by the Company as per the Act.
(b) Gross amount required to be spent by the Company during the year is `27.67 Lakhs (previous year `23.30 Lakhs)
(c) Actual amount spent by the company during the year is `27.89 Lakhs (Previous year `7.80 Lakhs) towards Social welfare and Education
Programmes.
(d) The CSR activities carried / to be carried out by the company is driven by the expertise of management. Additionally the company
gives preference to the local area(s) of its operations for CSR activities. The company believes that CSR should be in the filled(s) which
have substantial social impact and which co-relate with philosophy of the company to improve the quality of Life. The CSR committee
will further identify the project which can covered under the CSR guild lines in compliance with the CSR objectives and policy of the
Company.

(` in Lakhs)
2019-20 2018-19
Note: 28 Other Comprehensive Income
Items that will not be Reclassified to Profit or (Loss) 
(i) Changes in Revaluation Surplus:
Actuarial Gain/(Loss) on Gratuity (3.76) 5.00
Actuarial Gain/(Loss) on Leave Encashment (1.72) (3.04)
Gain/(Loss) on Revaluation of Investments (349.43) (371.61)
Total (354.91) (369.65)
(ii) Income tax relating to items that will not be reclassified to Profit or (Loss)
Deferred Tax (34.24) 39.25
Total (389.15) (330.40)

(` in Lakhs)
2019-20 2018-19
Note: 29 Earning Per Share
(a) Net Profit attributable to shareholders (`in Lakhs) 780.32 1214.85
(b) Weighted average number of Equity Shares outstanding (nos.)* 222064440 222064440
(c) Basic and Diluted Earnings per share (`) 0.35 0.55
(d) Face Value per equity share (`) 1.00 1.00
* The weighted average number of shares takes into account the changes in equity shares of the Company pursuant to Share purchase during the
year under section 391 of the Companies Act, 1956.

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Notes annexed to and forming part of the Financial Statements (Contd.)
Note: 30 Contingent Liabilities: Claims against the Company not acknowledged as debts
(` in Lakhs)
Particulars As at As at
31st March, 2020 31st March, 2019
Disputed Liabilities in Appeal
Income Tax 0.00 0.00
Excise Duty / Service Tax 0.00 0.00
Guarantees
Bank Guarantees 52.00 52.00
(Counter-Guarantees to Banks against guarantees issued to third parties)
Others
Custom Duty on Raw Materials Imported under Advance License against which Export Obligation is 21.66 36.99
to be fulfilled

Note: 31 Capital Management:

The Company’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to
provide returns for shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce the cost of capital. In
order to maintain or adjust the capital structure, the Company may issue new shares or sell assets to reduce debt. The capital structure of the
Company consists of debt and total equity of the Company.
The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic
investment plans. The funding requirements are met through equity, External-commercial borrowings and short-term borrowings. The
Company’s policy is aimed at combination of short-term and long-term borrowings. The Company monitors the capital structure on the basis
of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
The Company is not subject to any externally imposed capital requirements.
Note: 32 Financial Instruments:
32.01 Categories of Financial Instruments and Fair Value Measurement:
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised
and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide
an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the
three levels prescribed under the Ind AS 113 – Fair Value Measurement. An explanation of each level is as follows:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 – Unobservable inputs for the asset or liability.

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Notes annexed to and forming part of the Financial Statements (Contd.)
The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis as of 31st March, 2020 and 31st
March, 2019:
(` in Lakhs)
Particulars As at 31st March, 2020 As at 31st March, 2019
Caring Level of Input used in Caring Level of Input used in
Amount /Fair Amount /Fair
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Value Value
Financial Assets
At Amortised Cost
(i) Investments 510.94 510.94 0.00
(ii) Trade receivables 350.83 400.13
(iii) Cash & cash equivalents 2013.73 565.13
(iv) Bank balances other than (iii) above 1304.97 2.39
(v) Loans and Advances 102.78 125.37
(vi) Others financial assets 44.93 10.88
At FVTPL
(i) Investments 3119.08 3119.08 6073.45 6073.45
(ii) Others financial assets 0.00 0.00
At FVTOCI
(i) Investments 136.91 25.25 111.66 486.34 96.90 389.44
(ii) Others financial assets 0.00 0.00
Financial Liability
At Amortised Cost
(i) Borrowings 0.00 0.00
(ii) Trade Payables 660.88 1918.03
(iii) Other financial liabilities 152.81 96.00
At FVTPL
(i) Other financial liabilities 0.00 0.00
At FVTOCI
(i) Borrowings 0.00 0.00
(ii) Trade Payables 0.00 0.00
(iii) Other financial liabilities 0.00 0.00
The Company has disclosed financial instruments such as cash and cash equivalents, other bank balances, trade receivables and trade payables at
carrying value because their carrying amounts are a reasonable approximation of the fair values due to their short term nature.

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Notes annexed to and forming part of the Financial Statements (Contd.)
32.02 Financial Risk Management Framework:
Market Risk:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such
changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates and other market
changes. The Company’s exposure to market risk is primarily on account of foreign currency exchange rate risk.
Credit Risk:
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations.
Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks.
Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been
granted after obtaining necessary approvals for credit. Outstanding customer receivables are regularly monitored. The Company maintains its
cash and cash equivalents and deposits with banks having good reputation and high quality credit ratings.
In addition, the Company is exposed to credit risk in relation to deposits related to lease premises. These deposits are not past due or
impaired.
Liquidity Risk:
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain
sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining
adequate reserves, banking facilities by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of
financial assets and liabilities.
Following is the summary of undrawn borrowing facilities that the company has at its disposal to further reduce liquidity risk:
(`in Lakhs)
Particulars 31st March, 2020 31st March, 2019
Working Capital Loan
Amount Used 0.00 0.00
Amount Unused 0.00 500.00

Foreign Currency Risk Management:

The Company undertakes transactions denominated in foreign currencies and consequently, exposures to exchange rate fluctuations arise.
Exposure to currency risk relates primarily to the company's operating activities and borrowings when transactions are denominated in a
different currency from the Company's functional currency.
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive
income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency
other than the functional currency of the Company. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its
exposure to exchange rate risks.
Foreign Currency Exposure:
The Company does not have Foreign Currency exposure as on reporting date.

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Notes annexed to and forming part of the Financial Statements (Contd.)
Note: 33 Segment Reporting:
The Company’s business segment consists of a single segment of “Textiles” in accordance with Ind AS 108 - ‘Operation Segments’ notified
pursuant to the Companies (Indian Accounting Standard) Rules, 2015. The Company is not relied on single major customers having transaction
more than 10% of total revenue. Information with respect to geographical segement, to the extent applicable is as follows:
(` in Lakhs)
Segment Revenue - Geographic Segment by Location of Customer 2019-20 2018-19
Within India 17917.44 21571.90
Outside India 111.02 56.20
Total 18028.46 21628.10

Note: 34 As per Regulation Ind AS 24, the disclosures of transactions with the related party are given below:
34.01 List of related parties where controls exists and Relationships:

Sr. Name of Related Party Nature of Relationship

No.
1 Garden Silk Mills Limited Group Company
Vareli Trading Company Limited
2 M/s. Isha Enterprises Partnership Firm
3 Mr. Manikant R. Momaya - Managing Director Key Managerial Personnel (KMP)
Mr. Yogesh C. Papaiya - Wholetime Director & CFO
Mr. Harishchandra B. Bharucha - Non Executive Director
Mr. Ketan A. Jariwala - Non Executive Director
Ms. Kruti Kothari - Non Executive Director (w.e.f. 9th July, 2019)
Ms. Hanisha Arora - Company Secretary
4 Sorrento Textiles Private Limited Enterprises over which Key Managerial Personnel are able to
exercise significant influence
Note: Related party Relationship is as identified by the Company and relied upon by the Auditors.
34.02 Transactions During the year with Related Parties:

(` in Lakhs)
Sr. Name and Nature of Transactions of Related Parties Relationship 2019-20 2018-19
No.
1 Revenue from Operations
Garden Silk Mills Limited Group Company 7452.95 10069.64
2 Purchase of Raw Materials & Chemicals
Garden Silk Mills Limited Group Company 0.00 121.35
3 Purchase of Power & Other Utilities
Garden Silk Mills Limited Group Company 1022.18 885.44
4 Leave & Licence Fees & Reimbursement of Expenses
Garden Silk Mills Limited Group Company 24.73 0.00
Sorrento Textiles Private Limited Group Company 82.61 0.00

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Notes annexed to and forming part of the Financial Statements (Contd.)
(` in Lakhs)
Sr. Name and Nature of Transactions of Related Parties Relationship 2019-20 2018-19
No.
5 Payment to Key Managerial Personnel and their Relatives*
Shri. Manikant R. Momaya KMP 8.40 7.86
Shri. Yogesh C. Papaiya KMP 27.88 24.90
Shri. Harishchandra B. Bharucha KMP 2.45 1.13
Shri. Ketan A. Jariwala KMP 2.45 1.13
Ms. Kruti G. Kothari KMP 1.83 0.00
Smt. Hanisha Arora KMP 1.98 1.98
6 Other Transaction
Garden Silk Mills Limited Group Company 37.58 99.00

Balance as at 31st March, 2020

Garden Silk Mills Limited Group Company
- Trade Receivables & Others 3.78 0.00
- Trade Payables 61.85 44.63
Sorrento Textiles Private Limited
- Trade Payables 7.36 0.00
*Payment to Key Managerial Personnel and their Relatives are Short-term benefits.
Note: 35 Income in Foreign Currency:
(` in Lakhs)
Particulars 2019-20 2018-19
Sales - Export 109.11 56.77
Note: 36 There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at 31st March, 2020.
Note: 37 Contribution to Political parties during the year 2019-20 is ` Nil (Previous Year ` Nil).
Note 38 The outbreak of Coronavirus (COVID-19) pandemic disrupted the Operations of the Company since end March, 2020. The Government of
India ordered a nationwide lockdown to prevent community spread of COVID-19 in India resulting in significant reduction in economic activities.
The Company had adopted measures to curb the spread of infection in order to protect the health of its employees and ensure business continuity
with maintaining social distancing, sanitization of work spaces etc. The extent and duration of COVID-19 is currently unknown and depends on
future developments that are uncertain. Any resultant outcome and impact on business, due to this is unpredictable. In assessing the recoverability
of Company’s assets such as Investment, Loans and other receivables, the management has used internal and external source of information upto
the date of approval of these financial results. Given the uncertainties, the impact of COVID-19 may be different from that estimated as at the date
of approval of these financial results, and the Company will continue to closely monitor the developments.
Note: 39 Figures for the previous year have been regrouped/reclassified wherever necessary.

For and on behalf of Board of Directors

Manikant R Momaya
Managing Director
DIN: 00023993

Yogesh C Papaiya
Wholetime Director and CFO
DIN: 00023985
Hanisha Arora
Company Secretary
Surat, 21st July, 2020

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 2018 - 2019
R E P O RT
ANNUAL

ANNUAL REPORT

If undeliverd, please return to:

SURAT TEXTILE MILLS LIMITED
2019 - 2020
CIN No: L17119GJ1945PLC000214
Regd. Office: Tulsi Krupa Arcade, 6th Floor,
Puna-Kumbharia Road, Dumbhal, Surat 395010