S R Industries Director Discussions


Your directors (powers suspended) in compliance of the Insolvency & Bankruptcy Code, 2016 are pleased to present their 33rd Annual Report and the Audited Statement of Accounts for the year ended March 31, 2022.

FINANCIAL RESULTS (In lakhs)

PARTICULARS 2021-22 2020-21
Turnover 1382.68 744.90
Other Income 45.90 365.35
Profit / (loss) before interest, (38.44) 240.18
depreciation and taxation
Financial Expenses 53.30 327.95
Profit / (loss) before depreciation & (91.74) (87.77)
taxation
Depreciation- 170.00 188.03
Deferred tax (0.47) (8.79)
Other Comprehensive Income
Re-measurement Gains/(Losses) 1.82 33.82
on defined benefit plans
Income tax effect (0.47) (8.79)
Net Profit / (loss) after tax (259.92) (241.97)
Earning per share () (1.32) (1.36)
Basic / Diluted (1.32) (1.36)

FUTURE PROSPECTS

The board of directors inform that the company produced 0.35 million pairs of shoes, sandals and other footwear during the current year as against 0.19 million pairs during the previous year.

STATE OF COMPANYS AFFAIRS

The Company is currently facing a challenging scenario wherein the performance of the company has been adversely affected by the liquidity crunch. The Company is currently undergoing the Corporate Insolvency Resolution Process (CIRP) as per order number CP (IB) No. 198/Chd/Pb/2018 of National Company Law Tribunal, Chandigarh Bench, dated 21.12.2021 vide which Shri Rajender Kumar Jain, Insolvency Professional has been appointed as the Interim Resolution Professional and subsequently confirmed as Resolution Professional. The powers of the Board of Directors of M/s of S R Industries Ltd (SRIL) are suspended under CIRP and all powers are vested with Resolution Professional.

DIVIDEND

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

TRANSFER TO RESERVES

The company has transferred loss of 2,59,92,205/- during the year to Reserves & Surplus.

SHARE CAPITAL

The paid-up Equity share capital as on 31st March, 2021 was Rs.19.6457 Crore. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options or sweat equity shares. There is no change in the share capital of the Company.

FINANCE

(a) Working Capital

The working capital limits stood at 21.38 crores as on 31st March, 2022.

(b) Term Loan

The term loans stood at 12.59 crores as on 31st March, 2022.

(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 Companies Act, 2013

No loans, guarantees or investments under Section 186 of the Companies Act, 2013 have been 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 OF FINANCIAL YEAR AND DATE OF THE REPORT

There are no material changes and commitments affecting financial position between the end of financial year and date of this report except that the Company is currently undergoing the Corporate Insolvency Resolution Process (CIRP) as per order number CP (IB) No. 198/Chd/Pb/2018 of National Company Law Tribunal, Chandigarh Bench, dated 21.12.2021 vide which Shri Rajender Kumar Jain, Insolvency Professional has been appointed as the Interim Resolution Professional and subsequently confirmed as Resolution Professional. The powers of the Board of Directors of M/s of S R Industries Ltd (SRIL) are suspended under CIRP and all powers are vested with Resolution Professional.

FRAUDS REPORTED BY AUDITORS U/S 143(12)

Your company has complied with all the provisions of Section 143 of the Companies Act, 2013. Hence, there are no frauds reported by the Auditors other than those which are reportable to the Central Government. Further, no fraud has been reported to the Central Government. However, an avoidance application under section 66 of IBC, 2016 has been filed before the Honble NCLT by the Resolution

Professional.

Annual Report 2021-

SUBSIDIARIES / JOINT VENTURES / ASSOCIATE COMPANIES

Your company does not have any subsidiary / associate / joint ventures within the meaning 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 identify and assess the key risk areas, monitor and report compliance and effectiveness of the policy and procedure. The constitution of Risk Management Committee is not applicable to the Company. The details of the policy are placed at the website of the company at www.srfootwears.com. Further, as per the provisions of Regulation 17 read with the responsibilities of the board, the Board of directors timely assess, identify and review the risks in the company which may hamper the growth, sustainability or profitability of the company.

INTERNAL FINANCIAL CONTROL SYSTEM

Effective internal control systems are developed in the Company for all major processes to ensure reliability of financial reporting, safeguarding of assets and economical and efficient use of resources as also the compliance of laws, regulations, policies and procedures etc.

The Companys internal control systems are audited by Internal Auditors. The Internal Auditor independently evaluates the adequacy of internal controls and reviews major transactions.

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. The Company has adopted revised Whistle Blower Policy w.e.f. 1st April, 2021. The details of the policy are posted 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 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 or Tribunals which would impact the going concern status of the Company and its operations in future. At present the Company is under CIRP vide order dated CP(IB) No. 198/Chd/Pb/2019 dated 21.12.2021. The Request of the Resolution Plan has been published thrice vide dated 05.12. 2022.eight Expression of Interest have been received. Resolution Plans are yet to be received. The last date of receipt of the Resolution Plans is 24.12.2022.

DIRECTORS

During the year under review, Mrs. Sangeeta Mahajan (DIN: 00818293) was appointed as non-executive director of the Company w.e.f. 20/04/2021.

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of Company, Mrs. Sangeeta Mahajan (DIN: 00818293), Director, shall retire by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination and Remuneration Committee and the Independent Directors in their meeting have carried out an annual performance evaluation of the directors individually, board as a whole as well as the working of its committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report forming part of the Boards Report.

Since the Directors were satisfied with the evaluation results, there were no observations in the board evaluation carried out for the year, hence no action was proposed. The previous years observations 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 and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As of March 31, 2022, the Board had six members, two of whom are executive directors, one is non-executive director and three independent directors. One of the independent directors of the Board is a woman director. The powers of all the directors are suspended as per IBC, 2016.

The policy of the Company on directors appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of Section 178 of the Companies Act, 2013, is available on our website, at www.srfootwears.com. However, the policies are not active since the company is under CIRP.

We affirm that the remuneration paid to the directors before the initiation of Corporate Insolvency Resolution Process was as per the terms laid out in the Nomination and Remuneration Policy of the Company. Since, company is under Corporate Insolvency Resolution Process from 21.12.2022, no remuneration is being paid to the directors (powers suspended) of the Company.

MEETINGS

During the year, nine board meetings were held on 20th April, 2021, 23rd June, 2021, 30th June, 2021, 3rd July, 2021, 13th August, 2021, 3rd September, 2021, 11th October, 2021, 9th November, 2021 and 11th December, 2021. The attendance of directors and the details thereof are provided in the Corporate Governance Report.

The Company is currently going under the Corporate Insolvency Resolution Process (CIRP) as per an order number CP (IB) No. 198/Chd/Pb/2018 of National Company Law Tribunal, Chandigarh Bench, Chandigarh Vide the order dated 21.12.2021. The powers of the Board of Directors of the Company are suspended. Therefore, no further board meeting was held.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding 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 of during the year Financial Year 2021-22: a) No. of Complaints received in the year: NIL b) No. of complaints disposed of during the year: NIL c) No. of cases pending for more than 90 days: NIL d) No. of workshops or awareness program against sexual harassment carried out: Nil e) Nature of action taken by the employer: NA

Annual Report 2021-22

CORPORATE GOVERNANCE

A detailed report on Corporate Governance as required under the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 is annexed to this report. Based on such information provided to the Corporate Governance Report, the Certificate 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 Act, 2013, your directors state that:

i) In the preparation of the annual accounts for the year ended 31st March, 2022, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures;

ii) Such accounting policies have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2022 and of the profit of the company for the year ended on that date;

iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The annual accounts have been prepared on a going concern basis;

v) The Directors powers are suspended. The Resolution Professional have complete control over the Company. and laid out internal financial controls, which are adequate and are operating effectively; and

vi) The Directors have devised proper systems till CIRP initiation date and after that as per section 17 of IBC, 2016 read with section 20 of the Code, the Resolution Professional took the complete control over the Corporate Debtor and also devised prosper system to ensure compliance with the provisions of all applicable 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 Exchange Earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with rule 8 of the Companies (Accounts) Rules, 2014 is annexed at Annexure 1 herewith the report.

AUDITORS

1. STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act, 2013, M/s Goel Satish & Co., Chartered Accountants (FRN: 010693N), Chandigarh, were appointed as Statutory Auditors of the Company and they shall hold office till the conclusion of this meeting until the conclusion of the Annual General Meeting to be held for the financial year 2026.

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 has appointed M/s RPS Khurana & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The report of the Secretarial Auditor is annexed at Annexure 2 forming part of this report.

MANAGEMENTS REPLY ON QUALIFICATIONS BY AUDITORS

The Management (Powers Suspended) provides the following explanation for the adverse remarks/qualifications made by the Secretarial Auditor and the statutory auditor during their respective audit: The Observations of the Auditors are self-explanatory and needs no further clarification.

PARTICULARS OF EMPLOYEES

Disclosure of informations as required under rule 5(1) of Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014

The Provisions of Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 requiring particulars of the employees in receipt of remuneration in excess of Rs. 102 Lakhs per year to be disclosed in the Report of Board of Directors are not applicable to the Company as none of the employees was in receipt of remuneration in excess of Rs. 102 Lakhs during the financial year 2021-22.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure forming part of the Annual Report. Having regard to the provisions of Section 136(1) read with its relevant proviso of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished free of cost.

The Nomination and Remuneration Committee of the Company has affirmed that the remuneration 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 Act, 2013, is not applicable on the Company and accordingly such accounts and records are not made and maintained. WEB LINK OF ANNUAL RETURN

The Company is having website i.e.www.srfootwears.com and annual return of Company has been published on such website. Link of the same is given below: www.srfootwears.com

CORPORATE SOCIAL RESPONSIBILITY

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

CODE OF CONDUCTS

The company has adopted the following code of Conducts/ policies w.e.f. 1st April, 2021:

1. Code of Conduct to Regulate, Monitor and Report Trading by Designated Persons as per the SEBI (Prohibition of Insider Trading (Amendment)) Regulations, 2018.

2. Code of Practices and Procedures for fair Disclosure of Unpublished Price Sensitive Information.

3. Policy and Procedure for Enquiry in case of leak/ suspected leak of Unpublished Price Sensitive Information.

ACKNOWLEDGEMENT

Your directors convey their sincere thanks to the various agencies of Central and State Governments, Banks and other concerned agencies for all the assistance and cooperation extended to the Company. The Directors also deeply appreciate and acknowledge the trust and confidence the vendors, suppliers, dealers, customers, shareholders, investors reposed in the Company. Your directors also place on record their appreciation for the dedicated services rendered by the workers, staff and officers of the Company.

For and on behalf of the Board

Sd/- Sd/-
Place: Mohali Rajender Kumar Jain Munish Mahajan
Date: 21.12.2022 Resolution Professional Managing Director
(Powers Suspended)
DIN: 00818243