Ladies and Gentlemen
Your Directors present the Fifty Sixth Annual Report of the Company alongwith theaudited statement of accounts for the year ended 31st March 2020.
1. WORKING RESULTS
|Details ||Rs. in lakhs |
|Loss from business operation before Financial Expenses and Depreciation ||809.53 |
|Add:- || |
|1) Financial Expenses ||170.11 |
|2) Depreciation ||141.64 |
| ||311.75 |
|Current year Loss ||1121.28 |
|Loss carried forward from previous years ||2294.21 |
|Loss carried forward ||3415.49 |
2. PRODUCTION AND INCOME FROM OPERATIONS:
The production and income from operation of the current year and previous year are asunder:
|Details ||2019-20 ||2018-19 |
|Production in Kgs in Lakhs ||51.75 ||53.86 |
|Sales in Kgs in Lakhs ||51.19 ||55.62 |
|Revenue from operation Rs.in Lakhs ||9253.81 ||11164.64 |
Due to loss your Directors do not recommend Dividend.
4. TRADE PROSPECT AND OUTLOOK
The financial year 2019-2020 was a difficult year. Due to the shortage of man power ofrequired skill capacity utilization could not be increased to the optimum level. Thoughthe demand for the yarn was reasonable the selling price could not cover the cost ofproduction. These factors contributed to the abnormal loss.
5. IMPACT OF COVID-19
To control the spread of COVID-19 National Lock Down was imposed on 24thMarch 2020. Production in the Mills was stopped forthwith. After relaxation of the lockdown production activities in the Mills commenced from 1st June 2020. Thoughthe production has commenced there are constraints like non-availability of workforcesluggish demand for yarn and shortage of funds for working capital. The prices of rawmaterials have come down. The utilization level is improving slowly. Recovery to thenormal level depends upon the improvement in the value chain in the Textile Sector.
6. CURRENT YEAR
The performance during remaining three quarters of 2020-21 depends upon the revival ofthe economy. We expect the demand to pick-up as the process of unlock down has commenced.Your Directors are doing their best to improve the performance to a reasonable level.
7. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Ms.Sivarani J woman Director on the Board retires by rotation and is eligible forreappointment.
8. EXTRACT OF ANNUAL RETURN
An extract of Annual Return in Form MGT 9 is given in ANNEXURE 1.
9. DETAILS OF MEETINGS OF BOARD AND COMMITTEES OF BOARD HELD DURING 2019-20.
a) There were Six Board meetings held during the year 2019-20. The details andattendance record of Directors at the Board Meetings are as under.
|Date of Meeting ||Board's Strength (on the date of meeting) ||No.of Directors Present |
|01/04/2019 ||5 ||5 |
|28/05/2019 ||5 ||5 |
|07/08/2019 ||5 ||5 |
|12/11/2019 ||5 ||4 |
|27/12/2019 ||5 ||4 |
|13/02/2020 ||5 ||4 |
b) There were four Audit Committee meetings held during the year 2019-20. The detailsand attendance record of Directors at the Audit Committee Meetings are as under.
|Date of Meeting ||Committee's Strength (on the date of meeting) ||No. of Directors Present |
|28/05/2019 ||3 ||3 |
|07/08/2019 ||3 ||3 |
|12/11/2019 ||3 ||2 |
|13/02/2020 ||3 ||2 |
c) There were two Independent Directors' meetings held during the year 2019-20. Thedetails and attendance record of Directors at the Independent meetings are as under.
|Date of Meeting ||Number of Independent Directors (on the date of meeting) ||No.of Directors Present |
|28/05/2019 ||2 ||2 |
|27/12/2019 ||2 ||2 |
d) There was one Nomination and Remuneration Committee Meeting held during the year2019-20. The details and attendance record of Directors at the Nomination and RemunerationCommittee meeting are as under.
|Date of Meeting ||Committee's strength (on the date of meeting) ||No.of Directors Present |
|13/02/2020 ||3 ||2 |
e) There was one Stakeholders Relationship Committee Meeting held during the year2019-20. The details and attendance record of Directors at the Stakeholders RelationshipCommittee Meeting are as under.
|Date of Meeting ||Committee's Strength (on the date of meeting) ||No.of Directors Present |
|28.05.2019 ||4 ||4 |
f) There was no meeting of Corporate Social Responsibility Committee during the year2019-20
g) Details of Attendance Record of Individual Directors General Board and CommitteeMeetings:
|Details ||Annual General Meeting ||Board Meetings ||Audit Committee Meetings ||Nomination and Remuneration Committee Meetings ||Stakeholders Relationship Committee Meeting ||Corporate Social Responsibility Committee Meeting ||Independent Directors Meetings |
|Total No.of Meetings held during 2019-20 ||1 ||6 ||4 ||1 ||1 ||- ||2 |
|S. No Name of the Director ||Whether attended || || |
Number of Meetings Attended
|1. Sri Balakrishna S ||Yes ||6 ||N.A. ||N.A. ||1 ||-- ||N.A. |
|2. Sri R.Padmanaban ||Yes ||6 ||N.A. ||N.A. ||1 ||-- ||N.A. |
|3. Sri J M Grover ||Ye s ||6 ||4 ||1 ||1 ||-- ||2 |
|4. Sri R Sambasivan ||No ||5 ||4 ||1 ||1 ||N.A. ||2 |
|5. Ms.Sivarani J ||No ||4 ||2 ||0 ||N.A. ||N.A. ||N.A |
10. DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act 2013 the Directors state that -
1. In the preparation of Annual Accounts for the year ended 31st March 2020 theapplicable accounting standards had been followed along with proper explanation relatingto material departures.
2. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year ended31st March 2020 and of the profit/ loss of the company for that period.
3. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities.
4. The Directors had prepared the annual accounts on a going concern basis.
5. The Directors had laid down Internal Financial Controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
6. The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
11. INDEPENDENT DIRECTORS
a) The Board of Directors state that declarations were given by Sri.J M Grover andSri.R.Sambasivan Independent Directors under sub section (6) of 149 of Companies Act2013.
b) Terms and conditions of appointment of Independent Directors can be viewed at thecompany Website: www.slstindia.com
12. REMUNERATION POLICY
The Remuneration Policy was recommended by Nomination and Remuneration Committee at itsmeeting held on February 11 2015 and adopted by the Board of Directors at its meetingheld on the same day and the policy can be viewed at the company website www.slstindia.com
13. EXPLANATION TO QUALIFIED OPINION OF STATUTORY AUDITOR:
The Auditors qualified opinion Management's explanations thereon and Statement ofImpact of Audit Qualifications are given in Annexure - 11.
14. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186
The Company has not given any Loans guarantees or Investments covered under Sec 186 ofCompanies Act 2013.
15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SEC 188(1) OFCOMPANIES ACT 2013
(a) i) Disclosure of details of Related Parties under employment of the company.
|Related Parties ||Name of Director to whom related ||Nature of relationship with Key Management persons ||Salary Allowance and Bonus Rs. ||PF Rs. ||Medical Benefit Rs. ||Total Rs. |
|Mr.R.Thirumalai ||R.Padmanaban ||Brother ||1502361 ||102577 ||0 ||1604938 |
|Mr.R.Rajagopal ||R.Padmanaban ||Brother ||614602 ||41963 ||0 ||656565 |
|Mr.Srish Jayender Balakrishna ||Balakrishna S ||Son ||609823 ||41963 ||0 ||651786 |
ii) Borrowing from Director
|A. S.No. Name of the Director ||Year ||Amount Borrowed Rs.in Lakhs |
|1. Sri R.Padmanaban Joint Managing Director ||2019-20 ||536.70 |
|B. Amount outstanding as on 31st March 2020 ||Rs. 506.70 Lakhs |
|C. Interest ||Rs. 40.58 Lakhs |
(b) Disclosure of particulars of contracts/arrangements entered into by the companywith related parties referred to in sub-section (1) of section 188 of the Companies Act2013 in Form No. AOC 2 is provided in ANNEXURE - 2.
16. MATERIAL CHANGES
There are no material changes affecting the financial position of the company whichoccurred between the end of the financial year of the company to which the financialstatements relate and the date of this report.
17. DETAILS TO BE DISCLOSED UNDER RULE 8(3) OF COMPANIES (ACCOUNTS) RULES 2014.
The information to be disclosed under RULE 8(3) OF COMPANIES (ACCOUNTS) RULES 2014 isgiven in ANNEXURE - 3.
18. RISK MANAGEMENT POLICY
The Board of Directors framed and adopted a Risk Management Policy at its meeting heldon March 31 2017 and the Risk Management Policy can be viewed at the Company websitewww.slstindia.com
19. CORPORATE SOCIAL RESPONSIBILITY
In terms of Section 135 and Schedule VII of the Companies Act 2013 the Board ofDirectors have constituted a Corporate Social Responsibility (CSR) Committee on March 232017. The Board of Directors adopted a CSR Policy as recommended by the CSR Committeewhich is in line with Section 135 of the Companies Act 2013 which can be viewed at theCompany Website: www.slstindia.com.
As the company has incurred loss in the last 3 years the company is not required tospend any amount on CSR.
The Annual Report on CSR activities as prescribed under Companies (Corporate SocialResponsibility Policy) Rules 2014 is attached as ANNEXURE - 4.
20. EVALUATION OF BOARD
The performance of Board its Committee and individual directors are evaluated by No.ofmeetings held time spent in each meeting deliberating the issues quality of information/ data provided to the member the time given to them to study the details before eachmeeting quality of the deliberation in each meeting contribution of each director thedetails of decision taken and measures adopted in implementing the decision and monitoringthe continuous implementation of the decision and feedback to the Board.
21. DETAILS TO BE DISCLOSED UNDER RULE 8(5) OF COMPANIES (ACCOUNTS) RULES 2014.
The information to be disclosed under RULE 8(5) OF COMPANIES (ACCOUNTS) RULES 2014 isgiven in ANNEXURE - 5.
22. DISCLOSURE ON AUDIT COMMITTEE
a) The composition of the Audit Committee during the year is as below:
|Member & Chairman ||Sri J M Grover |
|Member ||Sri R.Sambasivan |
|Member ||Ms.Sivarani J |
All the members have wide exposure in the relevant areas.
b) The Board of Directors has accepted all recommendations of Audit Committee.
23. ESTABLISHMENT OF WHISTLE BLOWER POLICY AND VIGIL MECHANISM
A Whistle Blower Policy and Vigil Mechanism was adopted by the Board of Directors atits meeting held on March 9 2015. The policy can be viewed at the company websitewww.slstindia.com.
24. SECRETARIAL AUDIT REPORT
The Secretarial Audit Report for the year 2019-20 is provided in ANNEXURE - 6.
25. DETAILS TO BE DISCLOSED UNDE RULE 5(1) OF THE COMPANIES
(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
The required disclosures are provided in ANNEXURE - 7.
26. DETAILS TO BE DISCLOSED UNDER RULE 5(2) OF THE COMPANIES
(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014.
1) Particulars of top ten employees in terms of remuneration drawn is given in ANNEXURE- 8
2) None of the employees was in receipt of remuneration in excess of the prescribedlimit under Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. Hence there is no report under this category.
27. INFORMATION REQUIRED UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE(PREVENTION PROHIBITION & REDRESSAL) ACT 2014.
The company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
The company has in place a system to redress complaints received regarding sexualharassment in line with the requirements of the Sexual Harassment of women at theworkplace (Prevention Prohibition & Redressal) Act 2013
All employees (permanent contractual temporary apprentices and trainees) are coveredunder this policy.
The following is a summary of sexual harassment complaints received and disposed offduring the year 2019-20.
|- No of complaints received - ||Nil |
|- No of complaints disposed off. - ||NA |
The Board of Directors thanks Indian Overseas Bank and State Bank of India for theircontinued assistance and co-operation.
The relationship with labour continues to be cordial. Your Directors place on recordtheir appreciation of the devoted services of the Officers Members of the Staff andWorkers during the year.
30. COST AUDIT
Your Company is required to maintain cost records as specified by the CentralGovernment under subsection (1) of section 148 of the Companies Act 2013 and accordinglysuch accounts and records are made and maintained
The Cost Audit Report for 2018-19 was submitted to the Central Government on 31stAugust 2019.
The Costing Records are being audited by the Cost Auditor and he will be submitting hisreport for 2019-20 soon.
The Statutory Auditors M/s.Purushottam & Co. Chartered Accountants has resigneddue to personal reasons. Their resignation will take effect from the date on which theirLimited Review Report on the 2nd quarter results of 2020-21 is uploaded to BSEalongwith unaudited results of the 2nd quarter and six months ended September30 2020. Based on the recommendation of the Audit Committee the Board of Directors atits meeting held on 15.09.2020 had recommended the appointment of M/s. S B S B andAssociates Chartered Accountants as Statutory Auditors to hold office for a term of fiveyears from conclusion of 56th Annual General Meeting till the conclusion of the61st Annual General Meeting. A Certificate under Section 139(1) of theCompanies Act 2013 has been obtained from them.
32. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report is given in ANNEXURE - 9
33. DISCLOSURE REGARDING ACCOUNTING TREATMENT.
In preparation of financial statement the treatment prescribed in all the applicableAccounting Standards are followed and no alternative treatment has been adopted.
34. CORPORATE GOVERNANCE REPORT
Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 does not apply to your company as your company's equity share capital and net worthis below the threshold limit prescribed under the said Regulation and hence the Report onCorporate Governance is not provided.
35. DECLARATION BY CEO AFFIRMING COMPLIANCE WITH CODE OF CONDUCT
Declaration is given in ANNEXURE - 10
36. STATEMENT OF IMPACT OF QUALIFIED OPINION OF STATUTORY AUDITOR
The statement of impact of qualified opinion is given in Annexure - 11.
37. COMPLIANCE CERTIFICATE REGARDING CORPORATE GOVERNANCE.
The certificate is not applicable as the provisions of Corporate Governance does notapply to your company.
38. DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT Thereare no shares in demat suspense account or unclaimed suspense account.
39. STATEMENT OF DEVIATION/ VARIATION OF USE OF FUNDS RAISED THROUGH ANY PUBLIC ISSUE.
The company has not raised any fund through public right or preferential issue of anysecurity in recent time. Hence there is no Report on any deviation/ variation of the useof such funds.
40. DISCLOSURE OF COMPLIANCE WITH SECRETARIAL STANDARDS.
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards and that such systems are adequate and operatingeffectively.
41. DIRECTORS' REPORT PLACED IN WEBSITE.
This Directors' report is placed in company's website and the same can be viewed atwww.slstindia.com
| ||By order of the Board |
| ||For SRI LAKSHMI SARASWATHI |
| ||TEXTILES (ARNI) LIMITED |
|Place : Chennai ||(BALAKRISHNA S) |
|Date : September 15 2020 ||Chairman & Managing Director |