Ladies and Gentlemen
Your Directors present the Fifty Fifth Annual Report of the Company alongwith theaudited statement of accounts for the year ended 31st March 2019.
1. WORKING RESULTS
|Details ||Rs. in lakhs |
|Loss from business operation before ||401.29 |
|Financial Expenses and Depreciation || |
|Add:- || |
|1) Financial Expenses ||165.19 |
|2) Depreciation ||145.43 |
| ||310.62 |
|Current year Loss ||711.91 |
|Loss carried forward from previous years ||1582.30 |
|Loss carried forward ||2294.21 |
2. PRODUCTION AND INCOME FROM OPERATIONS:
The production and income from operation of the current year and previous year are asunder:
|Details ||2018-19 ||2017-18 |
|Production in Kgs in Lakhs ||53.86 ||51.06 |
|Sales in Kgs in Lakhs ||55.62 ||51.77 |
|Revenue from operation Rs.in Lakhs ||12094.41 ||10551.61 |
Due to loss your Directors do not recommend Dividend.
4. TRADE PROSPECT AND OUTLOOK
During 2018-19 the demand for yarn was reasonable. The increase in cost of raw materialand cost of conversion were much higher than the increase in sale value of yarn. There wasimprovement in capacity utilization. Due to shortage of man power of required skillutilization could not be improved to the optimum level. These factors contributed forerosion of margin.
5. CURRENT YEAR
The trend that prevailed in the year 2018-19 continues even in the first quarter of2019-20. Steps are being taken to improve the capacity utilization. Your Directors aredoing their best to improve the performance to a reasonable level.
6. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Sri R.Padmanaban retires by rotation and is eligible for reappointment.
Sri J M Grover was re-appointed for a second term as an Independent Director of theCompany not liable to retire by rotation to hold office for five consecutive yearsw.e.f. 01st April 2019 upto 31st March 2024 on the Board of theCompany by the shareholders vide a Postal Ballot which concluded on February 28 2019.
Sri R.Sambasivan was re-appointed for a second term as an Independent Director ofthe Company not liable to retire by rotation to hold office for five consecutive yearsw.e.f. 01st April 2019 upto 31st March 2024 on the Board of theCompany by the shareholders vide a Postal Ballot which concluded on February 28 2019.
7. EXTRACT OF ANNUAL RETURN
An extract of Annual Return in Form MGT 9 is given in ANNEXURE 1.
8. DETAILS OF MEETINGS OF BOARD AND COMMITTEES OF BOARD HELD DURING 2018-19.
a) There were Five Board meetings held during the year 2018-19. 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 |
|25/05/18 ||5 ||5 |
|07/08/18 ||5 ||5 |
|13/11/18 ||5 ||5 |
|11/01/19 ||5 ||5 |
|13/02/19 ||5 ||5 |
b) There were four Audit Committee meetings held during the year 2018-19. 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 |
|25/05/18 ||3 ||3 |
|07/08/18 ||3 ||3 |
|13/11/18 ||3 ||3 |
|13/02/19 ||3 ||3 |
c) There was one Independent Directors meetings held during the year 2018-19. 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 |
|13/11/18 ||2 ||2 |
d) There were two Nomination and Remuneration Committee Meetings held during the year2018-19. The details and attendance record of Directors at the Nomination and RemunerationCommittee meetings are as under.
|Date of Meeting ||Committee's strength (on the date of meeting) ||No.of Directors Present |
|13/11/18 ||3 ||3 |
|11/01/19 ||3 ||3 |
e) There was one Stakeholders Relationship Committee Meeting held during the year2018-19. 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 |
|24.05.2018 ||4 ||4 |
f) During 2018-19 there was no Corporate Social Responsibility Committee meeting.
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 2018-19 ||1 ||5 ||4 ||2 ||1 ||- ||1 |
|S. Name of the Director No ||Whether attended || Number of Meetings Attended |
|1. Sri Balakrishna S ||Yes ||5 ||N.A. ||N.A. ||1 ||-- ||N.A. |
|2. Sri R.Padmanaban ||Yes ||5 ||N.A. ||N.A. ||1 ||-- ||N.A. |
|3. Sri J M Grover ||Yes ||5 ||4 ||2 ||1 ||-- ||1 |
|4. Sri R Sambasivan ||No ||5 ||4 ||2 ||1 ||N.A. ||1 |
|5. Ms.Sivarani J ||Yes ||5 ||4 ||2 ||N.A. ||N.A. ||N.A |
9. 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 2019 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 2019 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.
10. 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
11. 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
12. EXPLANATION TO OBSERVATIONS OF SECRETARIAL AUDITORS.
The Board of Directors wish to state that as stated in the Secretarial Audit Reportthe company had obtained order from the National Company Law Tribunal Chennai Bench foran application filed vide SRN: G55959035 dt:12.10.2017 for compounding of offence undersection 134 (3) (0) read with Section 135 of Companies Act 2013.
13. 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.
14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SEC 188(1)COMPANIES 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 ||1384686 ||95040 || ||1479726 |
| || || || || ||0 || |
|Mr.R.Rajagopal ||R.Padmanaban ||Brother ||565875 ||38880 ||23070 ||627825 |
|Mr.Srish Jayender Balakrishna ||Balakrishna S ||Son ||565875 ||38880 ||27000 ||631755 |
ii) Borrowing from Director
|A. S.No. Name of the Director ||Year ||Amount Borrowed |
| || ||Rs.in Lakhs |
|1. Sri R.Padmanaban ||2018-19 ||319.20 |
|Joint Managing Director || || |
|B. Amount outstanding as on 31st March 2019 ||Rs. 234.20 Lakhs |
|C. Interest ||Rs. 27.43 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
15. 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.
16. 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
17. 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
18. 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.
19. 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.
20. 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
21. 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.
22. 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.
23. SECRETARIAL AUDIT REPORT
The Secretarial Audit Report for the year 2018-19 is provided in ANNEXURE - 6.
24. 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.
25. 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.
26. 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 2018-19.
|- 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.
29. 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 2017-18 was submitted to the Central Government on 21stAugust 2018.
The Costing Records are being audited by the Cost Auditor and he will be submitting hisreport for 2018-19 soon.
The members of the Company at the 54th Annual General Meeting held onAugust 8 2018 ratified the appointment of M/s.B.Purushottam & Co CharteredAccountants as Statutory Auditors of the Company to hold office from the conclusion of the54th Annual General Meeting till the conclusion of the 58th AnnualGeneral Meeting which was originally approved by the members at the 53rdAnnual General Meeting held on August 30 2017.
31. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report is given in ANNEXURE - 9
32. 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.
33. 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 andnet worth is below the threshold limit prescribed under the said Regulation and hence theReport on Corporate Governance is not provided.
34. DECLARATION BY CEO AFFIRMING COMPLIANCE WITH CODE OF CONDUCT
Declaration is given in ANNEXURE 10
35. DECLARATION BY CEO REGARDING UNMODIFIED OPINION ON THE AUDIT REPORT.
Declaration is given in ANNEXURE 11
36. COMPLIANCE CERTIFICATE REGARDING CORPORATE GOVERNANCE.
The certificate is not applicable as the provisions of Corporate Governance does notapply to your company.
37. DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT
There are no shares in demat suspense account or unclaimed suspense account.
38. 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.
39. 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.
40. 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 : May 28 2019 ||Chairman & Managing Director |