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S R Industries Ltd.

BSE: 513515 Sector: Others
NSE: N.A. ISIN Code: INE329C01011
BSE 00:00 | 03 Jul 0.53 0.02
(3.92%)
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NSE 05:30 | 01 Jan S R Industries Ltd
OPEN 0.53
PREVIOUS CLOSE 0.51
VOLUME 1
52-Week high 0.98
52-Week low 0.32
P/E
Mkt Cap.(Rs cr) 1
Buy Price 0.53
Buy Qty 100.00
Sell Price 0.47
Sell Qty 400.00
OPEN 0.53
CLOSE 0.51
VOLUME 1
52-Week high 0.98
52-Week low 0.32
P/E
Mkt Cap.(Rs cr) 1
Buy Price 0.53
Buy Qty 100.00
Sell Price 0.47
Sell Qty 400.00

S R Industries Ltd. (SRINDUSTRIES) - Director Report

Company director report

Dear Members

Your Directors are pleased to present their THIRTIETH ANNUAL REPORT and the AuditedStatement of Accounts for the year ended March 31 2019.

FINANCIAL RESULTS (Rs./lacs)

2018-19 2017-18
Turnover 2524.04 3778.06
Other Income 92.13 33.97
Profit/(Loss) before interest depreciation and taxation (1267.92) 242.84
Financial expenses (518.44) (429.32)
Profit/(Loss) before depreciation & taxation (1786.36) (186.48)
Depreciation (216.82) (213.42)
-Deferred Tax 268.17 (7.69)
OTHER COMPREHENSIVE INCOME
Re-measurement Gains/(losses0 on defined
benefit plans 8.54 19.23
Income Tax Effect (2.22) (5.94)
Net profit/(loss) after tax (1728.69) (394.30)
Earning per share (Rs.)
- Basic/Diluted (12.47) (2.93)

FUTURE PROSPECTS

The board of directors inform that the company produced 0.73 Million pairs of shoessandals and other footwear during the current year as against 0.81 million pairs duringthe previous year. This decline is due to weak business environment as well as decline inperformance of the company on account of the financial constraints being faced. TheCompany has faced this challenging scenario head on with constant efforts to improve theperformance. At the same time the Company is looking at various possible solutions toovercome the financial constraints being faced. The Company is looking towards improvedperformance in the years to come.

STATE OF COMPANY'S AFFAIRS

The Company is currently facing a challenging scenario wherein the performance of thecompany has been adversely affected by the liquidity crunch. The company has not been ableto service its loan obligations to the banks which has led to it being classified as anNPA. The Company is now in discussions with the bankers for restructuring of borrowingsand other remedies to recall the notice received under Section 13 (2) of theSecuritisation and Reconstruction of Financial Assets and Enforcement of Security InterestAct 2002 from the State Bank of India. The liquidity position is expected to improve oncethe company can find a mutually acceptable solution with the banks and this shall enableit to work towards

improvement in performance.

DIVIDEND

In view of inadequate profits your directors do not recommend any dividend for theyear under review.

TRANSFER TO RESERVES

The company has transferred loss of 172869212/- during the year to Reserves &Surplus

SHARE CAPITAL

The paid up Equity share capital as on 31st 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. Further the Company had issued and allotted4700000 Compulsorily Convertible Debentures of Rs. 10 each and 1500000 CompulsorilyConvertible Warrants of Rs. 10 each during the year 2017-18. These CompulsorilyConvertible Debentures and Compulsorily Convertible Warrants were due to be converted intoequity shares on the completion of 15 months from the date of allotment i.e. on or before18th January 2019. The Compulsorily Convertible Debentures holders exercisedtheir right of conversion before the last day of the due date of conversion. Their

Compulsorily Convertible Debentures were compulsorily converted into equity shares ofthe Company. The company allotted them 5757000 equity shares of Rs. 10/- each. TheCompany has filed listing approval with the Bombay Stock Exchange and the same is underprocess with the BSE

The Compulsorily Convertible Warrants holder did not exercise their right to converttheir Compulsorily Convertible Warrants into equity till the last day of conversion sotheir warrants were redeemed by the Company. There is a change in the share capital to theextent of conversion of the debentures into equity shares of the company. The paid upEquity share capital as on 31st March 2019 was 19.6457 Crore.

FINANCE

(a) Working Capital

The working capital limits stood at 21.94 crores as on 31st March 2019.

(b) Term Loan

The term loans stood at 10.97 crores as on 31st March 2019.

(c) Deposits

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

There are no material changes and commitments affecting financial position between theend of financial year and date of this report except to the extent that the company iscontinuing discussions with the bankers for restructuring of borrowings and other remediesto recall the notice received under Section 13 (2) of the Securitisation andReconstruction of Financial Assets and Enforcement of Security Interest Act 2002 from theState Bank of India.

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 placed at the website of the company atwww.srfootwears.com. 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 Internal Auditor independentlyevaluates the adequacy of internal controls and reviews major transactions. The InternalAuditor report is directly reported to the Audit Committee to ensure completeindependence.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has formulated a "Whistle Blower Policy / Vigil Mechanism" todeal with the instance of fraud and mismanagement if any. The details of the policy areposted on the website of the Company at www.srfootwears.com.

RELATED PARTY TRANSACTIONS

The details of the related party transactions are given in Form AOC-2 and is annexedherewith.

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.

DIRECTORS

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 Act 2013 have been submittedby all the Independent Directors.

BOARD EVALUATION

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.

REMUNERATION POLICY

The current policy is to have an appropriate mix of executive and non-executive andindependent directors to maintain the independence of the Board and separate itsfunctions of governance and management. As of March 31 2019 the Board had six membersthree of whom are executive directors and three independent directors. One of theindependent directors of the Board is a woman director.

The policy of the Company on directors' appointment and remuneration including thecriteria for determining qualifications positive attributes independence of a directorand other matters as required under sub-section (3) of Section 178 of the Companies Act2013 is available on our website at www.srfootwears.com.

We affirm that the remuneration paid to the directors is as per the terms laid out inthe Nomination and Remuneration Policy of the Company.

MEETINGS

During the year seven board meetings were held on 27th April 2018 30th May 201814th August 2018 14th November 2018 15th January 2019 14th February 2019 and 29thMarch 2019. The attendance of directors and the details thereof are provided in theCorporate 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 2018: 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

CORPORATE GOVERNANCE

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 31st March2019 the applicable accounting standards read with requirements set out under ScheduleIII to the Act have been followed and there are no material departures;

ii) Such accounting policies have been selected and applied consistently and judgmentsand estimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 312018 and of the profit of thecompany 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 concern basis; v) The Directorshave laid down internal financial controls to be followed by the Company and that suchinternal financial controls are adequate and are operating effectively; and vi) TheDirectors have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

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 1 herewith thereport.

AUDITORS

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 2 forming part of this report.

MANAGEMENT'S REPLY ON QUALIFICATIONS BY AUDITORS

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

Disclosure of information's as required under rule 5(1) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014

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 Rs. 102 Lakhs per year to be disclosed in the Report of Board ofDirectors are not applicable to the Company as none of the employees was in receipt ofremuneration in excess of Rs. 102 Lakhs during the financial year 2018-19.

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 provided in the Annexure formingpart of the Annual Report. Having regard to the provisions of Section 136(1) read with itsrelevant proviso of the Companies Act 2013 the Annual Report excluding the aforesaidinformation is being sent to the members of the Company. The said information is availablefor inspection at the Registered Office of the Company during working hours and any memberinterested in obtaining such information may write to the Company Secretary and the samewill be furnished free of cost.

The Nomination and Remuneration Committee of the Company has affirmed that theremuneration is as per the remuneration policy of the Company.

MAINTENANCE OF COST RECORDS

The maintenance of cost records as specified under section 148(1) of the Companies Act2013 is not applicable on the Company and accordingly such accounts and records are notmade and maintained.

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 placed at the websiteof the Company at www.srfootwears.com .

CORPORATE SOCIAL RESPONSIBILITY

The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable on the Company.

ACKNOWLEDGEMENT

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/- sd/-
Date : August 14 2019 (AMIT MAHAJAN) (R. C. MAHAJAN)
Director-Operations M.D.