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Sarda Plywood Industries Ltd.

BSE: 516003 Sector: Others
NSE: N.A. ISIN Code: INE932D01010
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VOLUME 3941
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OPEN 150.00
CLOSE 151.15
VOLUME 3941
52-Week high 295.00
52-Week low 85.10
P/E
Mkt Cap.(Rs cr) 71
Buy Price 158.35
Buy Qty 36.00
Sell Price 0.00
Sell Qty 0.00

Sarda Plywood Industries Ltd. (SARDAPLYWOOD) - Director Report

Company director report

Your Directors present their 59th Annual Report together with the Audited Accounts forthe year ended 31st March 2016.

FINANCIAL RESULTS

(Rs in Lakhs)

Standalone Consolidated
Particulars As on 31.03.2016 As on 31.03.2015 As on 31.03.2016 As on 31.03.2015
Turnover 18238.13 20352.01 18238.13 -
Profit before finance charges Tax Depreciation/ 3.62 672.78 3.62 -
Amortization (PBITDA)
Less: Finance Charges 675.19 667.89 675.19 -
Profit before Depreciation/ Amortization (PBTDA) (671.57) 4.89 (671.57) -
Less: Depreciation 174.34 170.47 174.34 -
Net Profit before Taxation (PBT) (845.91) (165.60) (845.91) -
Provision for taxation (272.30) (116.26) (272.30) -
Share of profit of Associate - - 4.95 -
Profit/ (Loss) after Taxation (PAT) (573.61) (49.34) (568.65) -
Provision for proposed dividend - - - -
Dividend tax - - - -
Transfer to General Reserve - - - -

STATE OF COMPANY’S AFFAIRS

During the year under review the Company has achieved a net turnover of Rs 182.38Crores as against Rs 203.52 Crores in the preceding financial year a decrease of 10.38%.The company has incurred a net loss ofRs 5.73 Crores as against a net loss of Rs 0.49Crores in the preceding year which is mainly attributed to depressed market conditions forits products. Slowdown particularly in the Housing and Infrastructure sector directlyaffected the demand for plywood and allied products. Higher inputs cost and lower salesrealisation gravely affected the profitability of Plywood as well as Tea Division of theCompany. Uncertainty in weather condition has caused fall in production of quality tealeaves.

CHANGES IN THE NATURE OF BUSINESS IF ANY

There was no change in the nature of the business of the Company during the year.

DIVIDEND

In absence of profit the Directors regret their inability to recommend any dividendfor the year ended 31 st March 2016.

RESERVES

Due to inadequacy of profit no general reserve is created for the year ended 31stMarch 2016.

SHARE CAPITAL

The paid up Equity Share Capital as on 31st March 2016 was Rs 4.52 Crores. During theyear under review the Company has neither issued any shares or any convertibleinstruments nor has bought back any of its securities.

BORROWINGS:

The total borrowings stood at Rs 5302.43 Lakhs as at 31st March 2016 as against Rs4602.69 Lakhs as on 31st March 2015 i.e. increase of Rs 677.74 Lakhs.

DEPOSITS

The Company has not accepted any deposits from public during the year and as suchthere is no outstanding deposit in terms of Companies (Acceptance of Deposits) Rules2014.

CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of the Companies Act 2013 regarding Corporate SocialResponsibility are not attracted to the Company. However the Company has been over theyears pursuing as part of its corporate philosophy an unwritten CSR policy voluntarilylike providing scholarship to poor brilliant students sponsoring sports program etc.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As required under Regulation 34(2) of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafter referredas "SEBI Regulations") the Management Discussion and Analysis Report isattached herewith as "Annexure 1".

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act 2013 Smt. Sheela Chitlangia(DIN No: 00174354) retires by rotation and being eligible offers herself forre-appointment.

During the year there was no change in the Key Managerial Personnel of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors have given the declaration that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and SEBIRegulations.

BOARD MEETINGS

During the year under review four Board Meetings were convened and held. The Detailsof which are given in Corporate Governance Report forming part of this Report. Theprovisions of the Companies Act 2013 and SEBI Regulations were adhered to whileconsidering the time gap between two meetings.

ANNUAL EVALUATION OF BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Companies Act 2013 and the SEBI Regulations theBoard has carried out the annual performance evaluation of its own performance itscommittees and individual directors on the basis of agreed norms of evaluation.

The manner in which the evaluation has been carried out is explained in the CorporateGovernance Report.

MANAGERIAL REMUNERATION

The informations required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofmanagerial personnel and employees of the company are attached herewith as "Annexure2".

AUDIT COMMITTEE

The composition and terms of reference of the Audit Committee have been furnished inthe Corporate Governance Report forming a part of this Report. There has been no instancewhere the Board has not accepted the recommendations of the Audit Committee.

SUBSIDIARIES JOINT VENTURES & ASSOCIATE COMPANIES

The Company is having one associate Company namely; M/s P. S. Plywood Products PrivateLimited as on 31st March 2016. M/s. Pro-Sports Management Limited ceases to be anassociate company with effect from 16th December 2015. A Statement containing salientfeatures of the financial statements of the Company’s associate is furnished in FormAOC-1 and enclosed herewith as "Annexure 3".

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Section 129(3) of the Companies Act 2013 the Company has prepareda consolidated financial statement of the Company and its associate company as a part ofthe Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTY

All related party transactions that were entered into during the financial year underreview were at arm’s length basis and were in the ordinary course of business. Thereare no materially significant Promoters Directors Key Managerial Personnel or otherdesignated persons which may have a potential conflict with the interest of the Company atlarge. Accordingly there are no transaction to be reported in Form AOC-2. Therefore a nilreport is attached herewith as "Annexure 4".

All related party transactions are placed before the Audit Committee and also the Boardfor approval. The detail of the policy on Related Party Transactions as approved by theBoard of Directors and Audit Committee is available on the Company’s websitewww.sardaplywood.in.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

In order to ensure that the activities of the Company and its employees are conductedin a fair and transparent manner by adoption of highest standards of professionalismhonesty integrity and ethical behavior the company has adopted vigil mechanism policy.The detail of the policy is available on the Company’s website www.sardaplywood.in.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company has not given any guarantees or given new loans or made any new investmentsduring the year under review.

Details of the existing loans and investments made by the Company are given in thenotes to the financial statements.

NOMINATION & REMUNERATION COMMITTEE

The composition and terms of reference of the Nomination and Remuneration Committeehave been furnished in the Corporate Governance Report forming a part of this Report.

REMUNERATION POLICY

The Company has formulated a policy on director’s selection and appointmentpayment of remuneration directors qualifications positive attributes independence ofdirectors selection and appraisal of performance of Key Managerial Personnel and SeniorManagement and their remuneration and other related matters as applicable under Section178(3) of the Companies Act 2013. The Company’s Criteria for payment of remunerationto the Non Executive directors and Familiarization Programme undertaken for

Independent Directors are available on the Company’s website www.sardaplywood.inand the Remuneration Policy is separately attached herewith as "Annexure 5".

STAKEHOLDERS RELATIONSHIP COMMITTEE

The composition and terms of reference of the Stakeholders Relationship Committee havebeen furnished in the Corporate Governance Report forming a part of this Report.

RISK MANAGEMENT POLICY

Risk is inherent in all business activities. Every employee of the Company in one wayor the other and in varying degrees manages risk. It is well accepted that the adoptionof a strategic and formal approach to risk management will improve decision-makingenhance outputs and fix accountability.

The Company has formulated a policy on risk management which aims not to eliminaterisk rather to manage the risks involved in most business activities to maximizeopportunities and to minimize adversity. Effective risk management requires:

A strategic focus and clear planning

Forward thinking and active approaches to management

Balance between the cost of managing risk and the anticipated benefits and

Contingency planning in the event of critical threats and realize Company'smission.

The detail of the policy as approved by the Board of Directors is available on theCompany’s website www.sardaplywood.in.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls commensurate with thenature of its business and the size and complexity of its operations. During the yearunder review such controls were tested and no reportable material weaknes in the designor operation was observed.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors’ Responsibility Statement it is hereby confirmed:

(i) That in the preparation of the accounts for the year ended 31st March 2016 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;

(ii) That the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2016and of the profit/loss of the Company for the year on that date;

(iii) That the Directors have taken proper and sufficient care forthe maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(iv) That the Directors have prepared the accounts for the year ended 31st March 2016on a ‘going concern’ basis.

(v) That the Directors have laid down internal financial controls to be followed by theCompany and such internal financial controls are adequate and are operating effectively.

(vi) That the Directors incorporated proper systems to ensure compliance with theprovisions of all applicable laws was in place and were adequate and operatingeffectively.

CORPORATE GOVERNANCE

The Company has in place the SEBI guidelines pertaining to Corporate Governance.

The Corporate Governance Report giving the details as required under SEBI Regulationsis given separately as "Annexure 6". The Corporate Governance Certificate forthe year ended on 31 st March 2016 issued by Mr. Ajay Agrawal of Messers G. P. Agrawal& Co. Chartered Accountants Statutory Auditor of the Company is also attachedherewith as "Annexure 7". Shri Sudeep Chitlangia the Managing Director hasgiven his certificate under SEBI Regulations regarding compliance with the Code of Conductof the Company for the year ended 31st March 2016 which is attached herewith as"Annexure 8". Certificate pursuant to Regulation 17(8) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is attached herewith as"Annexure 9".

AUDITORS

STATUTORY AUDITORS

Messrs G. P. Agrawal & Co. (Firm Registration No.302082E) Chartered Accountantshave been appointed as Statutory Auditors of the Company at the Annual General Meetingheld on 25th September 2014 for a period of three years subject to ratification bymembers at every consequent Annual General Meeting. Therefore ratification of appointmentof Statutory Auditors is being sought from the members of the Company at the ensuingAnnual General Meeting. There are no qualifications or observations or remarks made by theAuditors in their Report.

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 Messers A. K. Labh & Co Company Secretaries to undertake the secretarialaudit of the Company. The Secretarial Auditor’s Report is attached herewith as"Annexure 10". There are no qualifications or observations or remarks made bythe Auditors in their

INVESTOR EDUCATION & PROTECTION FUND

The provisions of Section 125(2) of the Companies Act 2013 is not applicable for theCompany as there was no dividend declared and paid in the last financial year.

STOCK EXCHANGE LISTING

The Equity Shares of the Company are listed at the Bombay Stock Exchange Limited. TheCompany has paid the listing fee to the Bombay Stock Exchange Limited for the year2016-2017.

BUSINESS RESPONSIBILITY REPORTING

The provisions of SEBI regulations with respect to Business Responsibility Reportingare not applicable to the Company and therefore the company has not undertaken businessResponsibility Reporting.

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo as required under Section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in "Annexure11" attached herewith.

EXTRACT OF ANNUAL RETURN

The details as required under Section 92(3) of the Companies Act 2013 read with Rule -12 of the companies (Management and Administration) Rules 2014 is furnished in Form No.MGT-9 and enclosed herewith as "Annexure 12".

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material change and commitment affecting the financial position of the Company haveoccurred between the end of the financial year to which the financial statements relateand the date of the Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts which wouldimpact the going concern status of the Company and its future operations.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION &REDRESSAL) ACT 2013

The Company has in place a policy for Prevention Prohibition and Redressal of SexualHarassment at Workplace in line with the requirements of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunder.During the year under review the Company had not received any complaint.

ISO CERTIFICATION

The Company’s factory at Rajkot Gujarat have been certifiedISO 14001:2004 forEnvironmental Management Systems Standards.

ACKNOWLEDGEMENT

Your Directors record their sincere appreciation for the support and co-operationreceived from the financial institutions banks dealers suppliers customersshareholders various government authorities and other business associates of the Company.Your Directors also place on record their appreciation for the dedication and commitmentof all employees in achieving and sustaining excellence in all areas of the business.

For and on behalf of the Board
SUJIT CHAKRAVORTI
Director
Registered Office (DIN: 00066344)
9 Parsee Church Street SUDEEP CHITLANGIA
Kolkata - 700001 Managing Director
Dated 25th May 2016 (DIN: 00093908)

Particulars of Remuneration

PARTICULAR OF EMPLOYEES PERTAINING TO SECTION 197(12) OF THE COMPANIES ACT 2013 READWITH RULE 5 (1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)RULES 2014

Requirement of Rule 5(1) Details
(i) The ratio of each Director to the median remuneration : of the employees of the Company for the financial year. Independent Directors
Dr. Kali Kumar Chaudhuri : Nil
Shri Sujit Chakravorti : Nil
Shri Probir Roy : Nil
Shri Ratan Lal Gaggar : Nil
Non Executive Director
Smt. Sheela Chitlangia : Nil
Executive Directors
Shri Sudeep Chitlangia : 14.97
Shri Sohan Lal Yadav : 12.06
(ii) The percentage increase in remuneration of each : Independent Directors
Director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year Dr. Kali Kumar Chaudhuri : Nil
Shri Sujit Chakravorti : Nil
Shri Probir Roy : Nil
Shri Ratan Lal Gaggar : Nil
Non Executive Director
Smt. Sheela Chitlangia : Nil
Executive Directors
Shri Sudeep Chitlangia : Nil
Managing Director
Shri Sohan Lal Yadav : Nil
Wholetime Director
CFO & Company Secretary
Shri Ravi Kumar Murarka : 5.82%
(iii) The percentage increase in the median remuneration : of employees in the financial year 6.98%
(iv) The number of permanent employees on the rolls of : the Company 780 permanent employees as on 31st March 2016
(v) The explanation on the relationship between average : increase in remuneration and company performance Average increase in remuneration of the employees was 10.71% which is based partly on the results of the Company for the year ended 31st March 2016 and partly on the individual employee’s performance.
(vi) Comparison of the remuneration of the Key : Managerial Personnel against the performance of the Company The increase in the remuneration of Company Secretary is below the increase in median employee’s remuneration and sales growth of the Company.

 

(vii) Variation in the market capitalization of the : As on 31.03.2016 As on 31.03.2015
(Rs in Lakhs) (Rs in Lakhs)
Company price earning ratio as at the closing date of the current financial year and previous financial year and percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies. Market
Capitalisation: Rs 2250 Rs 1886
Price Earning
(PE) Ratio: (3.92) (38.30)
The Company has not made any Public Issue or right Issue or securities in last many years so the comparison has not been made of current share price with last public offer price.
(viii) Average percentile increase already made in the : salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration Average salary increase of non-managerial employees: 10.77%
Average salary increase of managerial employees: 1.77%
There are no exceptional circumstances in increase in managerial remuneration.
(ix) Comparison of the each remuneration of the Key : Managerial Personnel against the performance of the company Same as above (vi)
(x) The key parameters for any variable component of : remuneration available by the directors No variable component of remuneration paid to the Directors. For Independent Directors Sitting Fee is paid on the basis of the number of Board and Committees meetings attended by them.
(xi) The ratio of the remuneration of the highest paid : director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year The Managing Director is the highest paid director. No employee received remuneration higher than the Managing Director.
(xii) Affirmation : remuneration policy of the Company Remuneration paid during the year ended that the remuneration 31 is as st March 2016 is per the as per the Remuneration Policy of the Company.

Note:

1) Sitting Fees paid to the independent directors is not considered as remunerationpaid to the independent directors.

2) No employee is in receipt of remuneration in excess of Rs 5 Lakh per month and Rs 60Lakhs per annum.

Annexure-3

Form AOC-I

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 ofCompanies (Accounts) Rules 2014)

Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures

Part "A": Subsidiaries : Nil

Part "B": Associates and Joint Ventures

Statement pursuant to Section 129(3) of the Companies Act 2013 related to AssociateCompanies and Joint Ventures

Name of Asscociate P. S. Plywood Products Private Limited
Relationship Associate
1 Latest audited Balance Sheet date 31st March 2016
2 Share of Associate held by the company on the year end
No. 5950000
Amount of Investment in Associate 80508750
Extent of Holding % 46.67%
3 Description of how there is significant influence Control of 46.67% of Total Share Capital
4 Reason why the associate is not consolidated N.A.
5 Networth attributabe to Shareholding as per latest audited Balance Sheet 64521730
6 Profit / (Loss) for the year
i. Considered in Consolidation 495563
ii. Not Considered in Consolidation 566281

1 Names of associates or joint ventures which are yet to commence operations: None

2 Names of associates or joint ventures which have been liquidated or sold during theyear: None

On behalf of the Board
For G.P. AGRAWAL & CO. SUJIT CHAKRAVORTI
Chartered Accountants Director
(F.R. NO. 302082E) (DIN : 00066344)
CA RAKESH KUMAR SINGH RAVI KUMAR MURARKA SUDEEP CHITLANGIA
(Membership No.066421) Chief Financial Officer & Managing Director
Partner Company Secretary (DIN : 00093908)
Place of Signature: Kolkata
Date : 25th May 2016

Form No. AOC-2

[Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014]

Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm’s lengthbasis:

Particulars Details
1. Name(s) of the related party and nature of relationship
2. Nature of contracts/arrangements/transactions
3. Duration of the contracts/arrangements/transactions
4. Salient terms of the contracts or arrangements or transactions including the value if any
5. Justification for entering into such contracts or arrangements or transactions NIL
6. Date(s) of approval by the Board
7. Amount paid as advances if any
8. Date on which the special resolution was passed in general meeting as required under first proviso to Section 188

2. Details of material contracts or arrangement or transactions at arm’slength basis :

Sl. No. Particulars Details
1. Name(s) of the related party and nature of relationship
2. Nature of contracts/arrangements/transactions
3. Duration of the contracts/arrangements/transactions NIL
4. Salient terms of the contracts or arrangements or transactions including the value if any
5. Date(s) of approval by the Board if any
6. Amount paid as advances if any

 

Registered Office: For and on behalf of the Board
9 Parsee Church Street
Kolkata - 700001 SUJIT CHAKRAVORTI SUDEEP CHITLANGIA
Director Managing Director
Date: 25th May 2016 (DIN: 00066344) (DIN: 00093908)

Annexure-5 Remuneration Policy

a) Remuneration Policy for Non Executive Directors/ Independent Directors

Levels of remuneration to directors are determined such that they attract retain andmotivate directors of the quality and ability required to run the Company successfully.With changes in the corporate governance norms the role of the Non-

Executive Directors (NEDs) and the degree and quality of their engagement with theBoard and the Company has undergone significant changes over a period of time. Under theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafterreferred to as the "SEBI Regulations") every company to publish its criteria ofmaking payments to NEDs in its Annual Report. Alternatively this may be put up on theCompany’s website and reference may be drawn thereto in its Annual Report. Section197 of the Companies Act 2013 and the SEBI Regulations require the prior approval of theshareholders of a Company for making payment to its NEDs.

Further in order to be consistent with globally accepted governance practices thecompany has ushered in flexibility of payment of remuneration to NEDs. It has linked theremuneration paid to NEDs to their attendance at the meetings of the Board or Committeesthereof their contributions at the meetings or otherwise and on their position invarious Committees of the Board whether as the Chairman or Member. All board levelcompensation (including to the NEDs) is approved by the shareholders and disclosedseparately in the financial statements. Appropriate disclosures are also made in theAnnual Report of the Company. The board approves the commission paid to the directors. Inaddition the company also pays a sitting fee on a per meeting basis to the NEDs forattending the meetings of the board and other committees.

b) Remuneration Policy for Executive Directors

The remuneration policy for the Executive Directors has been formulated consideringthe following key principles including but not limited to the basic principle to have longterm relationship with the Company:

Key Principles:

Linked to strategy: A substantial portion of the Executive Director’sremuneration is linked to success in developing and implementing the Company’sstrategy.

Performance related: A part of the total remuneration varies withperformance aligning with the shareholder’s interest.

Long term: The structure of remuneration is designed to reflect the longterm nature of the Company and significance of the protection of interest of theshareholders.

Fair treatment: Total overall remuneration takes account of both theexternal market and Company’s condition to achieve a balanced "fairoutcome".

Elements of the Remuneration structure of Executive Directors:

The remuneration to key managerial personnel shall include:

Fixed Salary

Perquisites and Allowances

Other benefits in accordance with the market practice and industry analysis.

Annual remuneration reviews shall be based on individual performance Companyperformance market environment and future plans.

The remuneration to any one Managing Director or Whole Time Director or Manager shallnot exceed five percent of the net profits of the Company and if there is more than onesuch director total remuneration shall not exceed ten percent of the net profits of theCompany to all such directors and Manager together. The total remuneration to itsdirectors including Managing Director and Whole-time Director and its Manager in respectof any financial year shall not exceed eleven percent of the net profits of that financialyear.

In case of no profits or inadequate profits the Company shall pay remuneration to itsManaging or Whole-time Director or

Manager in accordance with the provisions of Schedule V of the Companies Act 2013.

c) Remuneration Policy for Key Managerial Personnel (KMP)

The remuneration to Key Managerial Personnel’s of the Company i.e. ManagingDirector/Chief Executive Officer/ Whole Time Director Company Secretary and ChiefFinancial Officer as defined under Companies Act 2013 read with related rules issuedthereon will be fixed after taking into account educational and professionalqualification experience & expertise of the personnel and the competitive marketpractices.

Key Principles:

Remuneration should be sufficientto attract retain and motivate bestnon-executive talent suits to the requirement of the Company.

Remuneration practice should be consistent with the recognized best standardpractices for Key Managerial Personnel’s.

Elements of the Remuneration structure of KMP’s:

The remuneration to key managerial personnel shall include:

Fixed salary

Perquisites and Allowances

Other benefits in accordance with the market practice

Annual remuneration reviews shall be based on individual performance Companyperformance market environment and future plans.

d) Remuneration Policy for Senior Management Personnel and other Executives:

The remuneration to Senior Management personnel shall be fixed considering internalexternal and individual equity; and also procedural equity.

Remuneration to Senior Management Personnel shall include -

Fixed Salary

Perquisites and Allowances

And other benefits in accordance with the market practice

Annual remuneration reviews shall be based on individual performance Companyperformance market environment and future plans.

Annexure-10 Secretarial Audit Report For The Financial Year Ended 31st March 2016

[Pursuant to Section 204(1) of the Companies Act 2013 and Rule No. 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]

To

The Members

Sarda Plywood Industries Limited 9 Parsee Church Street Kolkata - 700 001 WestBengal

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Sarda Plywood IndustriesLimited having its Registered Office at 9 Parsee

Bengal (hereinafter called the Company). Secretarial Audit was conducted in a mannerthat provided us a reasonable basis for evaluating the corporate conducts/statutorycompliances and expressing our opinion thereon.

Based on our verification of the books papers minute books forms and returns filedand other records maintained by the Company and also the information provided by theCompany its officers agents and authorized representatives during the conduct ofsecretarial audit we hereby report that in our opinion the Company has during the auditperiod covering the financial year ended 31.03.2016 complied with the statutory provisionslisted hereunder and also that the Company has proper Board-processes andcompliance-mechanism in place to the extent in the manner and subject to the reportingmade hereinafter.

Auditors’ Responsibility

Maintenance of Secretarial Records is the responsibility of the management of theCompany. Our responsibility is to express an opinion on existence of adequate Boardprocess and compliance management system commensurate to the size of the Company basedon these secretarial records as shown to us during the said audit and also based on theinformation furnished to us by the officers’ and the agents of the Company during thesaid audit.

We have followed the audit practices and processes as were appropriate to the best ofour understanding to obtain reasonable assurance about the correctness of the contents ofthe secretarial records. The verification was done on test basis to ensure that correctfacts are reflected in secretarial records. We believe that the processes and practiceswe followed provide a reasonable basis for our opinion.

We have not verified the correctness appropriateness and bases of financial recordsbooks of accounts and decisions taken by the Board and by various committees of theCompany during the period under scrutiny. We have checked the Board process and compliancemanagement system to understand and to form an opinion as to whether there is an adequatesystem of seeking approval of respective committees of the Board of the Board of themembers of the Company and of other authorities as per the provisions of various statuesas mentioned hereinafter.

Wherever required we have obtained the management representation about the complianceof the laws rules and regulations and happening of events etc.

The Compliance of the provisions of Corporate and other applicable laws rulesregulations and standards is the responsibility of the management. Our examination waslimited to the verification of compliance procedures on test basis.

Our report is neither an assurance as to the future viability of the Company nor of theefficacy or effectiveness or which the management has conducted the affairs of theCompany.

We report that we have examined the books papers minute books forms and returnsfiled and other records maintained by the Company for the financial year ended 31.03.2016according to the provisions of:

(i) The Companies Act 2013 (the Act) and the rules made there under;

(ii) Secretarial Standards (SS-1 and SS-2) as issued by The Institute of CompanySecretaries of India and which became effective from 01.07.2015.

(iii) Listing Agreement with the stock exchange.

(iv) The Securities Contracts (Regulation) Act 1956 and the rules made there under;(v) The Depositories Act 1996 and the Regulations and Bye-laws framed there under;

(vi) Foreign Exchange Management Act 1999 and the rules and regulation made thereunder to the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;

(vii) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 :

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulation 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015;

(c) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

(d) The Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015. We further report that having regard to the compliancesystem prevailing in the Company and on examination of the relevant documents and recordsin pursuance thereof on test-check basis the Company has specifically complied with theprovisions of the following Acts :

1. Food Safety And Standards Act 2006

2. The Indian Forest Act 1927

3. Tea Waste Control Order 1959

4. Tea (Marketing) Control Order 2003

5. Tea (Distribution & Export) Control Order 2005

6. Plant Protection Code (Formulated by Tea Board of India) to the extent of theirapplicability to the Company during the financial year ended 31.03.2016 and ourexamination and reporting is based on the documents records and files as produced andshown to and the information and explanations as provided to us by the Company and itsmanagement and to the best of our judgment and understanding of the applicability of thedifferent enactments upon the Company. Further to the best of our knowledge andunderstanding there are adequate systems and processes in the Company commensurate withits size and operation to monitor and ensure compliances with applicable laws includinggeneral laws labour laws competition law environments laws etc.

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc. as mentioned above.

During the period under review provisions of the followingregulations/guidelines/standards were not applicable to the Company: (i) The Securitiesand Exchange Board of India (Buyback of Securities) Regulations 1998; (ii) SEBI (ShareBased Employee Benefits) Regulations 2014 (iii) The Securities and Exchange Board ofIndia (Issue and Listing of Debt Securities) Regulations 2008; (iv) The Securities andExchange Board of India (Issue of Capital and Disclosure Requirements) Regulation 2009;(v) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009.

We further report that :

(a) The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive

Directors and Independent Directors. The changes in the composition of the Board ofDirectors that took place if any during the period under review were carried out incompliance with the provisions of the Act.

(b) Adequate notice is given to all directors to schedule the Board Meetings agendaand detailed notes on agenda were sent atleast seven days in advance and a system existsfor seeking and obtaining further information and clarifications on the agenda itemsbefore the meeting and for meaningful participation at the meeting.

(c) Majority decision is carried through while the dissenting members’ views ifany are captured and recorded as part of the minutes.

(d) There are adequate systems and processes in the company commensurate with the sizeand operations of the company to monitor and ensure compliance with applicable lawsrules regulations and guidelines.

For A. K. LABH & Co.
Company Secretaries
(CS A. K. LABH)
Place : Kolkata Practicing Company Secretary
Dated : 25th May 2016 FCS 4848 / CP No.-3238

Information under Section 134(3)(m) of the Companies Act 2013 read with Rule - 8(3) ofthe Companies (Accounts) Rules 2014 and forming part of Directors’ Report.

(A) CONSERVATION OF ENERGY

a) Energy Conservation measures taken: Energy conservation wherever possiblehave already been implemented and there are no major areas where further energyconservation measures can be taken. However efforts to conserve and optimize the use ofenergy through improved operational methods and other means will continue.

b) Form -A in respect of tea operation is enclosed.

(B) TECHNOLOGY ABSORPTION

c) Efforts made in technology absorption as per Form B: Form B is enclosed.

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO

d) Efforts: the Company has not exported any of its products during the year.

e) Earnings and Outgo: (Rs in Lakhs)
(i) Foreign Exchange earnings NIL
(ii) Foreign exchange outgo (imports and other expenditure in foreign currency) 5256.23

FORM - A

(See rule 2)

(For Bought Leaf Tea Processing Factory)

Disclosure of particulars with respect to conservation of energy

A. POWER AND FUEL CONSUMPTION 2015-2016 2014-2015
1. Electricity
(a) Purchased
Unit Kwh 560020 277160
Total amount Rs 5600811 3465715
Rate/Unit Rs/Kwh 10.00 12.50
(b) Own generation
(i) (Through gas generator)
Unit Kwh 1318019 1204306
Unit per SCUM of natural gas Kwh/SCUM 2.14 2.04
Cost/unit Rs/Kwh 5.97 5.84
(ii) (Through Diesel Generator)
Unit Kwh Nil Nil
Unit per Litre of Diesel Oil Kwh/ltr. Nil Nil
Cost/unit Rs/Kwh Nil Nil
2. Natural Gas
Quantity SCUM 1103256 889739
Total cost Rs 14127345 10892525
Rate Rs/SCUM 12.81 12.24
B. CONSUMPTION PER UNIT OF PRODUCTION
Electricity Kwh/Kg. 0.79 0.71
Natural Gas SCUM/Kg. 0.47 0.42

FORM - B

Disclosure of particulars with respect to technology absorption

A. Research and Development
1. Specific Areas : derived 2. Benefits : Efforts are being taken for improving input / output ratio optimization of equipment efficiency and improvement in quality. Improvement in quality productivity and performance.
3. Future plan of action : Efforts would be taken for further improvement in quality and capacity utilization.
4. Expenditure on R & D : It has not been accounted for separately.
B. Technology absorption adoption and innovation
1. Efforts made : The process technology has been upgraded wherever required.
2. Benefits : Efficient plant operation resulting into improved quality at optimum cost.
3. Particulars of technology imported during the last three years : Nil