Your Directors are pleased to present their TWENTY NINTH ANNUAL REPORT and the AuditedStatement of Accounts for the year ended March 31 2018.
| ||2017-18 ||2016-17 |
|Turnover ||3778.06 ||4473.43 |
|Other Income ||33.97 ||66.84 |
|Profit/(Loss) before interest depreciation and taxation ||242.84 ||925.35 |
|Financial expenses ||(429.32) ||(618.42) |
|Profit/(Loss) before depreciation & taxation ||(186.48) ||306.93 |
|Depreciation ||(213.42) ||(207.87) |
|-Deferred Tax ||(7.69) ||35.20 |
|OTHER COMPREHENSIVE INCOME || || |
|Re-measurement Gains/(losses0 on defined || || |
|benefit plans ||19.23 ||(17.21) |
|Income Tax Effect ||(5.94) ||5.32 |
|Net profit/(loss) after tax ||(394.30) ||122.37 |
|Earning per share (Rs.) || || |
|- Basic/Diluted ||(2.93) ||0.96 |
The board of directors inform that the company produced 0.81
Million pairs of shoes sandals and other footwear during the current year as against1.05 million pairs during the previous year. This decline is primarily due to lower demandfor the company's products mainly on account of the structural shift in the businessmechanism. The Economy has shifted to GST mechanism from 1 st July 2017 and this changeled to uncertainties in business scenario lower demand by traders and reduced purchasingby consumers. The Company has faced this challenging scenario head on with redoubledefforts to develop new products and broaden its customer base. With the improvement inproduct mix as well as new customer relationships the Company is looking towards improvedperformance in the coming years.
In view of inadequate profits your directors do not recommend any dividend for theyear under review.
TRANSFER TO RESERVES
The company has transferred 39430529/- as loss during the year to Reserves &Surplus.
The paid up Equity share capital as on 31 st March 2018 was 13.88 Crore. During theyear under review the Company has not issued shares with differential voting rights norgranted stock options or sweat equity shares. There is no change in the share capital ofthe Company.
Further the Company had issued and allotted 4700000 Compulsorily ConvertibleDebentures of Rs. 10 each and 1500000 Compulsorily Convertible Warrants of Rs. 10 each.These Compulsorily Convertible Debentures and Compulsorily Convertible Warrants will beconverted into equity shares on completion of 15 months from the date of their allotment.However the amount raised through the issue of compulsory convertible Debentures andcompulsory convertible Warrants was used for the purpose for which the amount was raised.
(a) Working Capital
The working capital limits stood at 22.86 crores as on 31 st March 2018.
(b) Term Loan
The term loans stood at 10.29 crores as on 31 st March 2018.
The Company has not accepted any deposits from the public during the year under review.
(d) Particulars of Loans Guarantees or Investments under Section 186 of the CompaniesAct 2013
No loans guarantees or investments under Section 186 of the Companies Act 2013 havebeen given by the Company.
CHANGE IN THE NATURE OF BUSINESS
There was no change in the nature of business.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OFFINANCIAL YEAR AND DATE OF THE REPORT
Following material changes took place between the end of financial year and date ofreport: Your Company received a notice under Section 13 (2) of the Securitisation andReconstruction of Financial Assets and Enforcement of Security Interest Act 2002 from theState Bank of India to discharge the liabilities due and owing to the Bank to the tune ofRs. 17.03 crores as on 01.05.2018 with future interest and incidental expenses costsetc. The bank has further informed that the account of the Company has become NPA.Moreover your Company had been informed that in case the Company fails to repay ordischarge the liabilities the Bank will exercise all or any of the rights detailed underSub Section (4) of Section 13 and other applicable provisions of the SARFAESI Act.
Your Company is on discussions with the bankers for restructuring of borrowings andother remedies to recall the notice.
FRAUDS REPORTED BY AUDITORS U/S 142(12)
Your company has complied with all the provisions of Section 143 of the Companies Act2013. Hence there are no frauds reported by the Auditors other than those which arereportable to the Central Government. Further no fraud has been reported to the CentralGovernment.
SUBSIDIARIES / JOINT VENTURES / ASSOCIATE COMPANIES
Your company does not have any subsidiary / associate / joint ventures within themeaning of Companies Act 2013 and Accounting Standards.
BUSINESS RISK MANAGEMENT
In line with the provisions of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has framed a "Risk Management Policy" to identifyand assess the key risk areas monitor and report compliance and effectiveness of thepolicy and procedure. The constitution of Risk Management Committee is not applicable tothe Company. The details of the policy are annexed at Annexure 1 herewith theBoard's Report. Further as per the provisions of Regulation 17 read with theresponsibilities of the board the Board of directors timely assess identify and reviewthe risks in the company which may hamper the growth sustainability or profitability ofthe company.
INTERNAL FINANCIAL CONTROL SYSTEM
Effective and strong internal control systems are developed in the Company for allmajor processes to ensure reliability of financial reporting safeguarding of assets andeconomical and efficient use of resources as also the compliance of laws regulationspolicies and procedures etc. The Company's internal control systems are audited byInternal Auditors M/s Aaryaa & Associates Chartered Accountants. The InternalAuditor independently evaluates the adequacy of internal controls and reviews majortransactions. The Internal Auditor report is directly reported to the Audit Committee toensure complete independence.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has formulated a "Whistle Blower Policy / Vigil
Mechanism" to deal with the instance of fraud and mismanagement if any. Thedetails of the policy are annexed at Annexure 2 herewith the Board's Report andalso posted on the website of the Company at www.srfootwears.com .
RELATED PARTY TRANSACTIONS
Salary given to Mr. Munish Mahajan Rs. 1.5 Lakhs per month. The details of the same aregiven in Form AOC-2 and is annexed herewith.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There were no significant and material orders passed by the Regulators Courts orTribunals which would impact the going concern status of the Company and its operations infuture.
In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of Company Mr. Amit Mahajan (DIN: 00038827) Director (Operations) shallretire by rotation at the forthcoming Annual General Meeting and being eligible offershimself for re-appointment. Declarations pursuant to Section 149(6) of the Companies Act2013 have been submitted by all the Independent Directors.
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Nomination and Remuneration Committee andthe Independent Directors in their meeting have carried out an annual performanceevaluation of the directors individually board as a whole as well as the working of itsCommittees. The manner in which the evaluation has been carried out has been explained inthe Corporate Governance Report forming part of the Board's Report. Since the Directorswere satisfied with the evaluation results there were no observations in the boardevaluation carried out for the year hence no action was proposed. The previous year'sobservations in the board evaluation were nil and hence no action was warranted.
The board has approved the policy framed by the Nomination and Remuneration Committeefor selection and appointment of Directors senior management and their remuneration. TheRemuneration Policy is annexed at Annexure 3 herewith this report.
During the year eight board meetings were held on 30 th May 2017 10th August 201714th September 2017 18 th October 2017 30 th November 2017 14 th December 2017 2nd February 2018 and 14 th February 2018. The attendance of directors and the detailsthereof are provided in the Corporate Governance Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed offduring the year Calendar Year 2017: a) No. of Complaints received in the year: NIL b) No.of complaints disposed off during the year: NIL c) No. of cases pending for more than 90days: NIL d) No. of workshops or awareness program against sexual harassment carried out:2 e) Nature of action taken by the employer: NA
A detailed report on Corporate Governance as required under the SEBI (ListingObligations and Disclosure Requirement) Regulations 2015 is annexed to this report. TheCertificate issued by the Practicing Company Secretary in pursuance of Regulation 34(3)read with Schedule V of the above mentioned regulations is also annexed with this report.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134(3)(c) read with Section 134(5) of the Companies Act2013 your directors state that:
i) In the preparation of the annual accounts for the year ended 31 st March 2018the applicable accounting standards read with requirements set out under Schedule III tothe Act have been followed and there are no material departures;
ii) Such accounting policies have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at March 312018 and of theprofit of the company for the year ended on that date;
iii) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; iv) The annual accounts have been prepared on a going concernbasis; v) The Directors have laid down internal financial controls to be followedby the Company and that such internal financial controls are adequate and are operatingeffectively; and vi) The Directors have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems are adequate andoperating effectively.
1. STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of the Companies Act 2013 M/s N J &Associates Chartered Accountants Chandigarh were appointed as Statutory Auditors of theCompany and they shall hold office till the conclusion of the Annual General Meeting to beheld for the Financial Year 2021-22.
2. SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s R. P. S. Khurana & Associates a firm of Company Secretaries in Practiceto undertake the Secretarial Audit of the Company. The report of the Secretarial Auditoris annexed at Annexure 6 forming part of this report.
MANAGEMENT'S REPLY ON QUALIFICATIONS BY AUDITOR S
The Management provides the following explanation for the adverse remarks/qualifications made by the Secretarial Auditor and the statutory auditor during theirrespective audit: The Observations of the Auditors are self explanatory and needs nofurther clarification.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are: The ratio of the remuneration ofeach director to the median remuneration of the employees of the company for the financialyear;
|Sr. No. Name of the Directors ||Median Remuneration ||Ratio |
|1 R. C. Mahajan ||182400 ||19.74 |
|2 Amit Mahajan ||182400 ||11.84 |
|3 Amit Mahajan ||182400 ||11.84 |
1. The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year: Noincrease
2. The percentage increase in the median remuneration of employees in the financialyear: No increase
3. The number of permanent employees on the rolls of company: 236
4. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration: No increaseAffirmation that the remuneration is as per the remuneration policy of the company: TheNomination and Remuneration Committee of the Company has confirmed that the remunerationwas as per the Remuneration Policy of the Company.
Disclosure pertaining to details of top ten employees in terms of remuneration drawn asrequired under Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are:
|Name & Desig- nation || |
Remune- ration received (in lacs)
Nature of Employ- ment
Qualifi- cations and Exper- ience
Date of comme- ncement employ- ment
Age (as on 31.03.18)
Last employ ment held before joining the Co.
%age of equity Shares held by the emplo yees in the Company
Whether any such employee is a relative of any director or manager of the company &if so name of such director or manager
|Munish Mahajan ||18.0 ||Perma- nent ||B.Com ||4/1/15 ||46 yrs ||Own ||0 ||Yes |
|Vice President || || ||(Hons) 21+ yrs || || ||Business || ||He is Brother of Mr. Amit Mahajan Director (Comm) (DIN :00038593) |
|Vikram Sharma Development Mgr. ||7.80 ||Perma- nent ||Dip. in Footwear Graduation 9+ yrs ||3/1/17 ||31 yrs ||Alpine Shoes ||0 ||NO |
|Rajesh Kaushal Mgr-Acct. & Fin. ||7.20 ||Perma- nent ||B.Com 31+ yrs ||20/9/11 ||51 yrs ||Astra Lighting ||0 ||NO |
|Sanjeev Sharma Mgr- P & A ||6.00 ||Perma- nent ||B.A 30+ yrs ||23/4/09 ||51 yrs ||Self Employed ||0 ||NO |
|Ravi Kant Production Supervisor ||5.40 ||Perma- nent ||B.A 10+ yrs ||1/1/18 ||36 yrs ||SSIPL ||0 ||NO |
|C M Pandey Mgr- HR ||4.92 ||Perma- nent ||MBALLB 13+ yrs ||3/4/10 ||40 yrs ||Chemboard Chemicals Ltd. ||0 ||NO |
| || || || || || || || || |
|Jitendra Misha Production Incharge ||4.8 ||Perma- nent ||B.Sc 10+ yrs ||23/03/18 ||34 yrs ||Relaxo Footwears ||0 ||NO |
|Rahul Kumar Developer ||4.32 ||Perma- nent ||B.Sc. Diploma 6+ yrs ||25/03/17 ||29 yrs ||SSIPL ||0 ||NO |
|Akhilesh Kumar Supervisor ||4.08 ||Perma- nent ||B.A 4+ yrs ||6/6/17 ||31 yrs ||SSIPL ||0 ||NO |
|Shawinder Chauhan Sr. Accounts Officer ||3.84 ||Perma- nent ||M.Com 20+ yrs ||18/12/12 ||47 yrs ||Astra Lighting ||0 ||NO |
The provisions of rule 5(2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 requiring particulars of the employees in receipt ofremuneration in excess of the limits provided under this rule are not applicable to theCompany as none of the employees was in receipt of remuneration in excess of the limitsduring the financial year 2017-18.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withrule 8 of the Companies (Accounts) Rules 2014 is annexed at Annexure 4 with thisreport.
MAINTENANCE OF COST RECORDS
The maintenance of cost records as specified under section 148(1) of the Companies Act2013 is required by the company and accordingly such accounts and records are made andmaintained.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in the Form MGT-9 as required pursuant to Section 92(3)read with Companies (Management and Administration) Rules 2014 is also annexed at Annexure5 with this report.
Your Directors convey their sincere thanks to the various agencies of Central and StateGovernments Banks and other concerned agencies for all the assistance and cooperationextended to the Company. The Directors also deeply appreciate and acknowledge the trustand confidence the vendors suppliers dealers customers shareholders investors reposedin the Company. Your directors also place on record their appreciation for the dedicatedservices rendered by the workers staff and officers of the Company.
| ||For and on behalf of the Board |
|Place: Mohali ||sd/- |
|Date : August 14 2018 ||(R.K.BHANDARI) |
| ||Chairman |