TO THE MEMBERS:
Your Directors have pleasure in presenting their Twenty-first Annual Report and theAudited Financial Statements for the year ended on 31st March 2016 together with theIndependent Auditors' Report thereon.
|Financial Results: || || |
| || ||(Rs. in Lacs) |
|Particulars ||Current Year Ended ||Previous Year Ended |
| ||31-03-2016 ||31-03-2015 |
|Gross Sales/ Income from operations (Including Excise Duty and Sales Tax) ||24334.82 ||20679.96 |
|Other Income ||4.36 ||8.39 |
|Total Expenditure ||(21621.36) ||(18740.99) |
|Interest ||(406.45) ||(448.28) |
|Gross Profit after interest but before depreciation and taxation ||2311.37 ||1499.08 |
|Depreciation ||(514.98) ||(510.86) |
|Provision for Taxation ||(526.75) ||(61.81) |
|Deferred Tax Provision ||(59.88) ||(214.29) |
|Net Profit ||1209.76 ||712.12 |
|Balance brought forward from previous year ||7025.14 ||6366.51 |
|Less: Additional Depreciation(net of taxes) pursuant to enactment of Schedule II of the Companies Act 2013 ||0 ||21.25 |
|Amount Available for Appropriation ||8234.90 ||7057.38 |
|Appropriations: || || |
|Proposed Dividend (Including Tax) ||48.36 ||32.24 |
|Balance carried to Balance Sheet ||8186.54 ||7025.14 |
Your Directors have pleasure in recommending a modest dividend of 7.50% i.e. Rs. 0.75per Equity Share (previous year 5% i.e. Rs. 0.50) on 5356700 Equity Shares of Rs. 10/-each for the year 2015-2016.
Management Discussion and Analysis:
Attached report on Management Discussion and Analysis which is forming part of thisreport adequately deals with the operations as also current and future outlook of theCompany.
Pursuant to Regulations of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a separate report titled Corporate Governance is attached to thisAnnual Report.
The repayment of due loan installments and interest payment is being regularly done.
Subsidiary Company Joint Venture and Consolidated Financial Statements:
The Companys subsidiary Shree Samrudhi Industrial Papers Pvt Ltd. has not yetcommenced any business.
As required by section 129 (3) of the Companies Act 2013 and Regulation 33 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the ConsolidatedFinancial Statements for the year ended on 31st March 2016 prepared in accordance withthe relevant accounting standards as prescribed under section 133 of the Companies Act2013 and the Auditors report there on are attached.
As required by first proviso of section 129 (3) of the Companies Act 2013 and Rule 5of the Companies (Accounts) Rules 2014 the statement containing the salient features ofthe financial statements of the Companys subsidiary (Shree Samrudhi IndustrialPapers Pvt Ltd.) and joint venture (Shree Samrat Pulp and Paper Pvt Ltd) in form AOC 1 isalso attached.
Shareholders interested in obtaining a copy of the audited annual financial statementsof the subsidiary company may write to the Company.
Directors and Key Managerial Personnel :
Mrs. Bela G. Shah (DIN: 01044910) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offers herself for reappointment.
Mr. Mitesh M. Mehta (DIN: 01064272) resigned and ceased to be an Independent Directorwith effect from 09th September 2015. The Board places on record its appreciation of thevaluable services rendered by him during his long tenure as Independent Director of theCompany.
Mr. Nawal kishor D. Modi (DIN:00722024) was appointed as Additional Director(Independent Director) of the Company under section 161 of the Companies Act 2013 by theBoard at its meeting held on 08th December 2015 and he holds his office upto the date ofensuing Annual General Meeting. The necessary resolution for approval of his appointmentunder section 149 and 152 is being placed before the Annual General Meeting for yourconsideration.
Mr. Ghanshyam kumar G. Dobariya (PAN: AQHPD5222E) had resigned and ceased to be CompanySecretary and Compliance officer with effect from 10th September 2015.
Mr. Vaibhav Netke (PAN: AECPN3334A) was appointed as Company Secretary and Complianceofficer with effect from 11th September 2015. He resigned and ceased to be CompanySecretary and Compliance officer with effect from 11th February 2016.
Mr. Rakesh Kumar Kumawat (PAN: CJTPK0671D) was appointed as Company Secretary andCompliance officer with effect from 23rd March 2016.
Extract of the Annual Return:
An extract of the Annual Return in Form MGT-9 for the year ended on 31st March 2016pursuant to sub-section (3) of Section 92 of the Companies Act 2013 is annexed with thisreport.
Directors Responsibility Statement:
In accordance with section 134(5) of the Companies Act 2013 your Board of Directorsconfirms that:
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) 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 and ofthe profit and loss of the Company for that period;
(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) The Directors had prepared the annual accounts on a going concern basis;
(e) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Internal Financial Controls:
Your Company has in place adequate internal financial controls commensurate with thesize scale and complexity of its operation. Review of the internal financial controlsenvironment of the Company was undertaken during the year which covered verification ofentity level control process level control identification assessment and definition ofkey business processes and analysis of risk control matrices etc. During the period underreview effectiveness of internal financial controls was evaluated. Reasonable FinancialControls are operative for the business activities of the Company and no material weaknessin the design or operation of any control was observed. The internal financial controlswith references to the Financial Statements are commensurate with the size and nature ofbusiness of the Company.
Statement on Declaration given by Independent Directors u/s. 149(6):
Every Independent Director has given declaration that he meets the criteria ofindependence as provided in section 149 (6) and Schedule IV of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Companys Policy on Directors Appointment and Remuneration:
Pursuant to provisions of Section 134 (3) read with section 178 of Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Companyhas formulated the policy for payment to non-executive Directors and the policy for termsand Conditions for appointment of Independent Directors. These policies are placed onwebsite of the Company.
The Nomination and Remuneration Committee also recommends appointment and remunerationof Executive Directors/ KMPs based on expertise and experience. The Committee also ensuresthat the remuneration is sufficient to attract retain and motivate best managerialtalents.
Particulars of Loans Guarantees or Investment u/s. 186:
During the year the Company has not given any loans or guarantees or made anyinvestments exceeding limit under section 186 of Companies Act 2013.
Particulars of Contract or Arrangement Regarding Related Party u/s. 188:
During the Financial Year 2015-16 the Company has not entered into any contract orarrangement with related party under section 188 of the Companies Act 2013. The policy onmateriality of related party transaction is placed on website of the Company.
Material Changes and Commitment affecting Financial Position of the Company:
There are no material changes and commitments affecting the financial position of theCompany which have occurred between end of the financial year of the Company and the dateof Directors Report.
Conservation of Energy Technology Absorption and Foreign Exchange Earning and Outgo:
The relevant data is given as an annexure to this report.
CSR Committee and Implementation of CSR Projects:
Pursuant to the provisions of section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility) Rules 2014 and Schedule VII a CorporateSocial Responsibility (CSR) Committee of the Board is in place comprising of the ManagingDirector and one Independent Director and one Non Executive Director. The said Committeehas been entrusted with the responsibility of formulating and recommending to the Board aCorporate Social Responsibility Policy (CSR Policy) from time to time indicating theactivities to be undertaken by the Company monitoring the implementation of the frameworkof the CSR Policy and recommending the amount to be spent on CSR activities. The AnnualReport for the year 2015-16 on CSR activities is annexed with this report. The detailedCSR policy is placed on the website of the Company.
Establishment of Vigil Mechanism:
The Company has established a vigil mechanism for employees to report concerns aboutunethical behaviour actual or suspected fraud or violation of the code of conduct andethics of the Company. It provides for adequate safeguard against the victimization ofemployees who avail the mechanism and are allowed direct access to the Chairman of theAudit Committee and Ethics Counselor of the Company. The whistle blower policy is placedon the website of the Company.
Pursuant to the provisions of section 134 (3) (p) of the Companies Act 2013 the Boardhas carried out an annual performance evaluation of its own performance the performanceof individual Directors as well as the evaluation of the working of its Committees.
The Company has formulated a Policy for performance evaluation of the Board as a wholeIndividual Directors Committees which also includes feedback to the Chairman. Aquestionnaire based on criteria approved by the Nomination and Remuneration Committeefor evaluation of performance of Board Committees of Board and Individual Directors wasprepared. The Board on recommendation of the Nomination and Remuneration Committeeapproved to obtain the feedback of all the Directors on the said Questionnaire through thefeedback form.
The reports of feedback received from all Directors on performance evaluation ofIndividual Directors were shared with respective Directors and Chairman of the Nominationand Remuneration Committee. Nomination and Remuneration Committee evaluated theperformance of all individual Directors based on the feedback so received.
The report of the feedback received from all the Directors on performance evaluation ofthe Board and Committees of the Board were shared with the Chairman of the Company. TheBoard on the basis of feedback so received evaluated performance of its own and Committeesof Board. Performance Evaluation of the Chairman of the Company was carried out by theIndependent Directors of the Company taking into account feedback of all the Directorsincluding the Executive and Non-executive Directors.
Particulars of Remuneration :
The information required under Section 197 of the Companies Act 2013 and Rules madethere under in respect of employees of the Company is as follows:
1. (i) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year;
|Directors Name ||Ratio to median remuneration |
|Mr. Gautam D. Shah ||71.81 |
|Mrs. Bela G. Shah ||71.81 |
Note: Non Executive/Independent Directors are not paid any remuneration except thesitting fees for attending meetings of the Board and Committees thereof.
(ii) The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary or Manager if any in the financial year:
|Directors/CFO/CEO/CS/Manager name ||% increase in remuneration |
|Mr. Gautam D. Shah CMD & CFO ||89.76% |
|Mrs. Bela G. Shah Executive Director ||** |
|Mr. G. G. Dobariya Company Secretary ||NIL |
|Mr. Vaibhav Netke Company Secretary* ||N.A. |
|Mr. Rakesh Kumar Kumawat Company Secretary * ||N.A. |
1. * Payment commenced during the current year only.
2. Non Executive/Independent Directors are not paid any remuneration except the sittingfees for attending meetings of the Board and Committees thereof.
3. ** The percentage increase in remuneration is not comparable as the payment in theprevious year was for less than two months.
(iii) Percentage increase in the median remuneration of employees in the financialyear; 12.41%
(iv) The number of permanent employees on the rolls of the company; 267
(v) The explanation on the relationship between average increase in remuneration andthe company performance; On an average employee received an increase of 23.68%. Theincrease in remuneration is in line with the market trends industry benchmark and manyother factors. In order to ensure that remuneration reflects Company performance theperformance pay is linked to organization performances.
(vi) Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company;
|Particulars ||(Rs. in lacs) |
|Remuneration of Key Managerial Personnel during financial year 2015-16 (aggregated) ||205.86 |
|Revenue from operations ||24334.82 |
|Remuneration (as % of revenue) ||0.85% |
|Profit before tax (PBT) ||1796.38 |
|Remuneration (as % of PBT) ||11.46% |
(vii) Variation in the market capitalization and price earnings ratio as at the closingdate of current financial year and previous financial year of the Company;
|Particulars ||As at 31st March 2016 ||As at 31st March 2015 ||Variation |
|Closing rate of per share at BSE (Rs.) ||95.40 ||80.00 ||19.25% |
|Earnings per share (Rs.) ||22.58 ||13.29 ||69.90% |
|Market Capitalization (Rs. in lacs) ||5110.29 ||4285.36 ||19.25% |
|Price earnings ratio ||4 ||6 ||(33.33%) |
Percentage in bracket represents negative percentage
(viii) Average percentile increase already made in the salaries of employees other thanmanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration;
The average increase in salaries of employees other than managerial personnel in2015-16 was 20.96%. Percentage increase in the managerial remuneration for the year was198.84%. KMP salary increase is decided based on the Companys performance.
(ix) Comparison of remuneration of each key managerial personnel against theperformance of the Company;
| || || ||(Rs. in lacs) |
|Particulars ||CMD & CFO ||Executive Director ||Company Secretary |
|Remuneration ||99.80 ||99.80 ||6.26 |
|Revenue ||24334.82 ||24334.82 ||24334.82 |
|Remuneration (as % of revenue) ||0.41% ||0.41% ||0.03% |
|Profit before tax (PBT) ||1796.38 ||1796.38 ||1796.38 |
|Remuneration (as % of PBT) ||5.56% ||5.56% ||0.35% |
(x) The key parameter for any variable component of remuneration availed by theDirectors; Only CMD and Executive Director are given variable component which is decidedbased on Companys performance.
(xi) The ratio of the remuneration of the highest paid Director to that of theemployees who are not Directors but receive remuneration in excess of the highest paidDirector during the year; None
(xii) Affirmation that the remuneration is as per the remuneration policy of theCompany; YES
2. Statement pursuant to section 197 (12) of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014for the year ended 31st March 2016.
|Name and Age ||Mr. Gautam D. Shah 52 years ||Mrs. Bela G. Shah 50 years |
|Designation ||Chairman and Managing Director ||Executive Director |
|Nature of Employment ||Contractual ||Contractual |
|Gross Remuneration ||Rs. 9979907/- (Includes Salary Commission and Provision for leave encashment and gratuity) ||Rs. 9979907/- (Includes Salary Commission and Provision for leave encashment and gratuity) |
|Qualification and Experience ||BE Civil / 28 years ||Bachelor in Science / 15 years |
|Date of Joining ||01-07-2005 ||07-02-2015 |
|Previous Employment ||N.A. ||N.A. |
|Percentage of equity shares held ||19.88% ||7.20% |
|Relation with Other Directors ||Mr. Dhansukhlal G. Shah Father ||Mr. Gautam D. Shah Husband |
| ||Mrs. Bela G. Shah Wife ||Mr. Dhansukhlal G. Shah Father in law |
The Company is addressing various risks impacting the paper industry. Some of the risksto which the Company is exposed are as under.
The Companys policy is to actively manage its foreign exchange risks.
Commodity price risks:
The Company proactively manages risks of price fluctuation of raw materials throughforward booking and inventory management. The Companys reputation for qualityproduct mitigates the impact of price risk on finished goods.
The Company is exposed to risks attached to various statutes and regulations. TheCompany is mitigating these risks by engaging competent person in each functional area andthrough regular review of legal compliances carried out from time to time.
Human resources risks:
Retaining the existing talents and attracting new talents are major risks. These risksare mitigated by regular interaction with concerned employees and providing congenialworking conditions.
Disclosure under Sexual Harassment of Women at work place (Prevention Prohibition andRedressal) Act 2013:
There was no complaint received from any woman employee during the financial year2015-16 and hence no complaint is outstanding as on 31st March 2016 for redressal.
The company has not accepted any deposit from the public within the meaning of chapterV of the Companies Act 2013 and rules there under.
Significant and Material Orders passed by the Regulators:
During the Financial year under review no significant and material orders were passedby the regulators or courts or tribunals that would impact the going concern status of theCompany and its future operations.
The notes on financial statements referred to in the Auditors Report areself-explanatory and do not require further explanation.
M/s. Deloitte Haskins & Sells LLP Chartered Accountants Mumbai (Firm RegistrationNumber-117366W/W-100018) the Auditors of the Company retire at the ensuing Annual GeneralMeeting and being eligible have offered themselves for appointment for a period of 5years from the year 2016-2017 to 2020-2021. You are requested to appoint them as Auditorsof the Company for (five) 5 years from the year 2016-2017 to 2020-2021 and to fix theirremuneration.
Secretarial Audit Report :
Pursuant to Section 204 of Companies Act 2013 your Company had appointed Mr. V. C.Khambhata Practicing Company Secretary (CP No. 6177) as Secretarial Auditor to conductthe secretarial audit of the Company for the Financial Year 2015-16. The report ofSecretarial Auditor is annexed with this report. The report does not contain anyqualification reservation or adverse remark.
The Board wishes to express its appreciation to the Bankers Shareholders CustomersSuppliers and Employees of the Company for their support during the year.
| ||FOR AND ON BEHALF OF THE BOARD OF DIRECTORS || |
|Place : Vapi ||Gautam D. Shah ||Bela G. Shah |
|Date : 26th May 2016 ||Chairman and Managing Director ||Executive Director |