DIRECTORS’ REPORT Ladies and Gentlemen, Your Directors present the Fifty Second Annual Report of the Company alongwith the audited statement of accounts for the year ended 31st March 2016. 2. PRODUCTION AND SALES Production of yarn during the year was 60.24 lakhs kgs as against 58.90 lakhs kgs in the previous year. The sale value during the year was Rs.108.90crores as against Rs.115.08 crores of previous year. 3. DIVIDEND Due to loss, your Directors do not recommend Dividend. 4. TRADE PROSPECT AND OUTLOOK The performance of the company was strained due to market conditions. The cost of raw material and cost of conversion remained high. The yarn sales realization was not satisfactory. The production was affected by non availability of sufficient man power. 5. CURRENT YEAR The market conditions during the current year are favourably improving. Your Directors are doing their best to improve the performance to a reasonable level. 6. DIRECTORS Ms.Sivarani J, was co-opted as an additional Director of the company by the Board of Directors at its meeting held on March 2, 2016. Pursuant to Section 161 of Companies Act 2013, Ms.Sivarani J vacates office at the forthcoming Annual General Meeting. The Company has received a Notice in writing from a Member under Section 160 of the Companies Act, 2013 proposing the appointment of Ms.Sivarani J as a Director of the Company. Sri R.Padmanaban retires by rotation and is eligible for reappointment. 7. Extract of Annual Return An extract of Annual Return in Form MGT 9 is given in ANNEXURE 1. 8. Details of Board Meetings held during 2015-16. There were eight Board meetings held during the year 2015-16. The details and attendance record of Directors at the Board Meetings are as under. 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 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures. 2. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year ended 31st March 2016, and of the profit/ loss of the company for that period. 3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the 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 the company and that such internal financial controls are adequate and were operating effectively. 6. The Directors had devised proper systems to ensure compliance with the provisions of all 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, Sri R.Sambasivan and Ms.Sivarani J, Independent Directors under sub section (6) of 149 of Companies Act, 2013. b) Terms and conditions of appointment of Independent Directors can be viewed at the company Website: www.slstindia.com 11. Remuneration Policy The Remuneration Policy was recommended by Nomination and Remuneration Committee at its meeting held on February 11, 2015 and adopted by the Board of Directors at its meeting held 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: a) Chief Financial Officer has been appointed on 9th February 2016 and b) Regarding the other matters of non-compliances reported by the Secretarial Auditors, the company has complied with the requirement on 2nd March 2016. 13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 The Company has not given any Loans, guarantees or Investments covered under Sec 186 of Companies Act 2013. 14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SEC 188(1) COMPANIES ACT 2013 (b) 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 in Form No. AOC 2 is provided in Annexure – 2. 15. Material Changes There are no material changes affecting the financial position of the company which occurred between the end of the financial year of the company to which the financial statements 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 is given in ANNEXURE – 3. 17. Risk Management Policy At present, risk management is handled by the Wholetime Directors and the risk management policy is yet to be framed. 18. Corporate Social Responsibility As the company’s networth, turnover and net profit are below the threshold limits prescribed under the Companies Act, 2013, the company is yet to form a Corporate Social Responsibility Committee. 19. Evaluation of Board The performance of Board, its Committee and individual directors are evaluated by No.of meetings 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 each meeting, quality of the deliberation in each meeting, contribution of each director, the details of decision taken and measures adopted in implementing the decision and monitoring the continuous implementation of the decision and feed back 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 is given in ANNEXURE – 4. 21. DISCLOSURE ON AUDIT COMMITTEE a) The composition of the Audit Committee 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 at its meeting held on March 9, 2015. The policy can be viewed at the company website www.slstindia.com. 23. Secretarial Audit Report The Secretarial Audit Report for the year 2015-16 is provided in ANNEXURE - 5. 24. DETAILS TO BE DISCLOSED UNDER RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 The required disclosures are provided in ANNEXURE - 6. 25. DETAILS TO BE DISCLOSED UNDER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014. As none of the employees was in receipt of remuneration in excess of the prescribed limit, there is no report under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 26. INFORMATION REQUIRED UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2014. The company has in place a system to redress complaints received regarding sexual harassment in line with the requirements of the Sexual Harassment of women at the workplace (Prevention, Prohibition & Redressal) Act, 2013 All employees (permanent, contractual, temporary, apprentices and trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2015-16. - No of complaints received - Nil - No of complaints disposed off - NA 27. FINANCE The Board of Directors thanks Indian Overseas Bank and State Bank of India for their continued assistance and co-operation. 28. LABOUR The relationship with labour continues to be cordial. Your Directors place on record their appreciation of the devoted services of the Officers, Members of the Staff and Workers during the year. 29. COST AUDIT As per Statutory requirement, the costing records are being audited by the Cost Auditor and he will be submitting his report to the Central Government. 30. AUDITORS The Auditors of the Company M/s. S.Viswanathan LLP, retire and are eligible for reappointment. The Audit Committee of the Board of Directors has recommended their re-appointment. A Certificate under Section 139(1) of the Companies Act 2013 has been obtained from them. 31. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report is given in Annexure - 7 32. DISCLOSURE REGARDING ACCOUNTING TREATMENT. In preparation of financial statement the treatment prescribed in all the applicable Accounting Standards are followed and no alternative treatment has been adopted. 33. CORPORATE GOVERNANCE REPORT Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, does not apply to your company, as your company’s equity share capital and net worth is below the threshold limit prescribed under the said Regulation and hence the Report on Corporate Governance is not provided. 34. DECLARATION BY CEO AFFIRMING COMPLIANCE WITH CODE OF CONDUCT Declaration is given in Annexure – 8 35. COMPLIANCE CERTIFICATE REGARDING CORPORATE GOVERNANCE. The certificate is not applicable as the provisions of Corporate Governance does not apply to your company. 36. Disclosures with respect to demat suspense account/ unclaimed suspense account There are no shares in demat suspense account or unclaimed suspense account. 37. 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 any security in recent time. Hence there is no Report on any deviation/ variation of the use of such funds. By order of the Board For SRI LAKSHMI SARASWATHI TEXTILES (ARNI) LIMITED (BALAKRISHNA S) Chairman & Managing Director Place : Chennai Date : May 25, 2016 |