To the Members
The Directors of your Company are pleased to present the 44th Annual Reporttogether with the Audited Statement of Accounts for the year ended March 31 2016.
The financial performance of the Company for the year ended March 31 2016 issummarised below:
| || ||(Rs. in Lacs) |
| ||2015-16 ||2014-15 |
|Revenue from Operations (Net) ||12504.82 ||14086.10 |
|Profit before Finance Cost and Depreciation ||1070.46 ||922.10 |
|Finance Costs ||485.04 ||544.97 |
|Depreciation & Amortization Expense ||333.92 ||336.02 |
|Profit before Taxation ||251.50 ||41.11 |
|Less: Tax Expense ||5.82 ||0.04 |
|Profit for the Year ||245.68 ||41.07 |
During the year under review the revenue from operations was Rs. 12504.82 lacsagainst Rs. 14086.10 lacs in the last financial year. The Company has earned profit aftertax of Rs. 245.68 lacs against Rs. 41.07 lacs in last year. The overall revenue hasdecreased as the Company has discontinued the production facilities at its BahadurgarhUnit. Company has taken major initiatives to reduce the production cost like optimisingresource utilization and improving operational efficiencies which has resulted into growthin net profit. In light of the initiatives taken by the Company the Directors are hopefulfor better results in the coming years.
The reference filed by the Company with Board for Industrial & FinancialReconstruction based on negative net worth had already been registered by the Board. Nowas on March 31 2016 the net worth of the Company has become positive and accordinglynecessary reference will be made to the Board.
The Directors have decided not to recommend any dividend on equity shares due tounabsorbed depreciation and accumulated losses of earlier years. Because of this reason4% dividend aggregating to Rs. 24.07 lacs (Previous Year Rs. 24.00 lacs) includingdividend distribution tax on the outstanding 4% cumulative redeemable preference shareshas also been accumulated.
The paid up Equity Share Capital as on March 31 2016 was Rs.1352.17 lacs and the paidup Preference Share Capital as on that date was Rs. 500.00 lacs. During the year underreview the Company has not issued any shares with differential voting rights sweatequity shares and equity shares under Employees Stock Option Scheme.
LISTING ON STOCK EXCHANGES
The Equity Shares of the Company are listed at Bombay Stock Exchange. TheCompanys delisting application with Calcutta Stock Exchange is pending since long.
During the year under review the Company has not accepted any public deposit withinthe meaning of Chapter V of the Companies Act 2013 and rules made there under.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of Annual Return in Form MGT-9 is annexedherewith as Annexure-A.
DIRECTORS & KEY MANAGERIAL PERSONNEL
During the year the Company has regularized the appointment of Ms. Tripta Goswami(DIN: 07111342) as a Director at the Annual general Meeting held on September 29 2015 whowas appointed as an Additional Director on March 27 2015. In accordance with theprovisions of the Companies Act 2013 and Articles of Association of the Company Ms.Tripta Goswami (DIN: 07111342) Non-Executive Director of the Company retires by rotationand being eligible offers herself for re-appointment at the ensuing Annual GeneralMeeting.
Pursuant to the terms of appointment the office of Mr. N. K. Pasari as ManagingDirector will expire on December 31 2016. As recommended by the Nomination andRemuneration Committee the Board has reappointed Mr. N. K. Pasari as Managing Director(Key Managerial Personnel) to hold office with effect from January 1 2017 for a period of3 years and have also revised his remuneration on the recommendation of the Nomination andRemuneration Committee subject to the approval of the members. A resolution in thisregard is contained in the Notice of the Annual General Meeting.
The information on the particulars of Director eligible for appointment in terms ofRegulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 has been provided in the notes to the notice convening the Annual General Meeting.
Declaration by Independent Directors
All Independent Directors have given declaration that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and Regulation16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 mandates thatthe Board shall monitor and review the evaluation framework. The Companies Act 2013states that a formal annual evaluation needs to be done by the Board of its ownperformance and that of its committees and individual Directors. Schedule IV of theCompanies Act 2013 states that the performance evaluation of independent directors shallbe done by the entire Board of Directors excluding the director being evaluated.
The evaluation of all the Directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board. The evaluation process has been explained inthe Corporate Governance Report. The Board approved the evaluation results as collated bythe Nomination and Remuneration Committee.
Based on the recommendation of the Nomination & Remuneration Committee the Boardhas adopted a policy for selection and appointment of Directors Key Managerial Personnel(KMP) and Senior Management and their remuneration. The Nomination and Remuneration Policyis annexed as AnnexureB to this report.
During the year Thirteen Board Meetings and One Independent Directors Meetingwere held the details of which are given in the Corporate Governance Report. Theprovisions of Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 were adhered to while considering the time gap between twomeetings.
Composition of Audit Committee
In terms of Section 177 of the Companies Act 2013 and erstwhile Clause 49 of theListing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Audit Committee has been reconstituted comprising of 3 Independent Directorsnamely Mr. L. C. Sharma Mr. P.N. Singh and Mr. L.C. Parashar. Mr. L. C. Sharma hasresigned as Chairman of the Audit Committee w.e.f. April 22 2015 and Mr. P. N. Singh hasbeen appointed as Chairman of the Committee in his place. All the recommendations made bythe Audit Committee were accepted by the Board.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of theCompanies Act 2013 with respect to Directors Responsibility Statement it ishereby confirmed that:
i) in the preparation of the annual accounts for the year ended March 31 2016 theapplicable accounting standards have been followed and there is no material departure fromthe same;
ii) the Directors have selected such accounting policies and applied consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the financial year ended March 31 2016 andof the profit of the Company for that period;
iii) the Directors have taken proper and sufficient care for the 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) the Directors have prepared the annual accounts on a going concern basis;
v) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively;
vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
Your Company does not have any subsidiary/joint venture/ associate company within themeaning of the Companies Act 2013.
CORPORATE DEBT RESTRUCTURING
The debts of the Company are under Corporate Debt Restructuring (CDR) mechanism w.e.f.April 1 2009.
RISK MANAGEMENT POLICY
The Company manages monitors and reports on the principal risks and uncertainties thatcan impact its ability to achieve its strategic objectives. A note on the policy of theCompany on risk management is provided in this Annual Report under Management Discussionand Analysis Report.
INTERNAL FINANCIAL CONTROLS
The system of internal control maintained by the Company is adequate and also uptodate. Only after ensuring authenticity and genuineness of various transactions they arerecorded and reported to the management. The Company always follows relevant andapplicable Accounting Standards for properly maintaining the books of accounts andreporting financial statements. During the year under review no material or seriousobservation has been received from the Internal Auditors of the Company for inefficiencyor inadequacy of such controls.
The long-term prospects for the Indian Paper Industry are bright as increasingpopulation literacy rate growth in GDP and changes in lifestyles of individuals areexpected to bring surge in demand in the huge domestic markets. The paper industry inIndia is on the growth trajectory and is expected to touch 8.5% GDP in the coming years.The recent initiatives of the Government in framing policies which are conducive for theIndustrial development is another silver line in the growth prospects of the paperindustry.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under Section 134(3)(m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are providedin Annexure-C to the Directors Report.
AUDITORS AND AUDITORS REPORT
At the Annual General Meeting held on September 29 2015 M/s. Radheshyam Sharma &Co. Chartered Accountants (Firm Registration No. 016172N) were appointed as StatutoryAuditors of the Company to hold office till the conclusion of the 48th Annualgeneral Meeting of the Company. In terms of the first proviso to Section 139 of theCompanies Act 2013 the appointment of the auditors shall be placed for ratification atevery Annual general Meeting. Accordingly the appointment of M/s. Radheshyam Sharma &Co. Chartered Accountants as Statutory Auditors of the Company is placed forratification by the members.
The Auditors Report on Financial Statements of the Company for the Financial Year2015-16 does not contain any qualification reservation or adverse remark.
The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company in the year under review. The observations of Statutory Auditors and Notesto the Financial Statements are self-explanatory and do not call for any further comments.
In terms of the provisions of Section 148 and all other applicable provisions of theCompanies Act 2013 read with the Companies (Audit and Auditors) Amendment Rules 2015and the Companies (Cost Records and Audit) Amendment Rules 2015 the Board has on therecommendation of Audit Committee approved the appointment of M/s Vijender Sharma &Co. Cost Accountants Delhi (Firm Registration No. 00180) to carry out the cost audit ofCompanys records in respect of newsprint paper for the financial year 2016-17 at aremuneration of Rs. 75000/- (Rupees Seventy Five Thousand only) plus Service Tax at theapplicable rates and reimbursement of out of pocket expenses in connection with theaforesaid audit. The remuneration proposed to be paid to them requires ratification by themembers of the Company. In view of this your ratification for payment of remuneration toCost Auditors is being sought at the ensuing AGM.
The Cost Audit Report for the financial year ended March 31 2015 has been filed underXBRL mode within the stipulated time period.
M/s. BLAK & Co. Company Secretaries Delhi were appointed to conduct thesecretarial audit of the Company for the financial year ended March 31 2016 as requiredunder the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014. The SecretarialAudit Report submitted by them is annexed herewith as Annexure-D. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.
M/s Singla & Associates Chartered Accountants performs the duties of internalauditors of the Company and their report is reviewed by the audit committee from time totime.
PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES UNDER SECTION 186 OF THECOMPANIES ACT 2013
During the year the Company has not granted any loans or given guarantees/securitiesor made investments under section 186 of the Companies Act 2013. The earlier investmentsmade by the Company are provided in the notes to the financial statements in this AnnualReport.
RELATED PARTY TRANSACTIONS
All transactions entered into by the Company during the financial year ended March 312016 with related parties were on an arms length basis and were in the ordinarycourse of business. There was no materially significant transaction with the RelatedParties that could have had a potential conflict with the interests of the Company. Noneof the Directors has any pecuniary relationships or transactions except to the extent ofremuneration drawn by the directors.
In compliance with the requirements laid down in SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 all related party transactions are placedbefore the Audit Committee for approval. Prior omnibus approval of the Audit Committee hasbeen obtained for the transactions which were of foreseeable and repetitive nature.
The Policy on Related Party Transactions and dealing with Related Parties as approvedby the Board has been uploaded on the Companys website. Your Directors drawattention of the Members to Note No. 48 to the financial statement which sets out relatedparty disclosures.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The company has a vigil mechanism for Directors and Employees to report their concernsabout unethical behaviour actual or suspected fraud or violation of the companysCode of Conduct. The mechanism provides for adequate safeguards against victimization ofDirectors and employees who avail of the mechanism. In exceptional cases Directors andemployees have direct access to the Chairman of the Audit Committee. The Vigil Mechanism(Whistle Blower Policy) is available on the companys website www.skpmil.com athttp://www.skpmil.com/pagepdf/1459763188.pdf link.
The Company strives to adopt the highest standards of excellence in CorporateGovernance. The disclosure of the remuneration package of the managerial personnel asrequired under Section II of Part II of Schedule V to the Companies Act 2013 has beenprovided in the Corporate Governance Report. A separate section on Management Discussionand Analysis and a certificate from Statutory Auditors of the Company regarding Complianceof conditions of Corporate Governance as stipulated under Schedule V to the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of the AnnualReport.
DISCONTINUATION OF PRODUCTION FACILITIES AT BAHADURGARH
The unhealthy competition in the coated paper industry from the imported products hadresulted into reduction of the prices and heavy reduction in sales of the productmanufactured by Companys Bahadurgarh Unit. Due to this reason the production of theunit was decreased day by day and made the unit unviable. In addition to this labourstrike in the unit further resulted in increased losses of Bahadurgarh unit of theCompany. Keeping in view of the situation the Company has discontinued the productionfacilities at its Bahadurgarh Unit and is in the process of shifting the usefulmachineries from Bahadurgarh Unit to Keshwana Unit and thereafter selling the land andbuilding in phased manner.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has an Internal Complaints Committee (ICC) in pursuance of The SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 forredressal of sexual harassment complaints and for ensuring time bound treatment of suchcomplaints. There was no complaint received from any employee during the financial year2015-16 and hence no complaint is outstanding as on March 31 2016 for redressal.
MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014disclosures pertaining to remuneration and other details have been appended to this Reportas Annexure-E (I).
A statement showing the names and other particulars of the top ten employees in termsof remuneration drawn as required under Section 197(12) of the Companies Act 2013 readwith Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided as Annexure-E(II) to this report.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. No amount has been or is proposed to be transferred to any reserves of the Company.
2. No significant or material orders have been passed by any Regulator or Court orTribunal which can have impact on the going concern status and the Companysoperations in future.
3. There were no special resolution passed pursuant to the provisions of Section 67(3)of the Companies Act 2013 and hence no information as required pursuant to Section 67(3)of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules 2014 isfurnished.
4. No disclosure in respect of Corporate Social Responsibility is required as it is notapplicable to the Company.
5. No material changes and commitments have occurred after the close of the year tillthe date of this Report which affect the financial position of the Company.
Your Directors thank various Government Authorities for the continued help receivedfrom them. The Directors also gratefully acknowledge all the stakeholders of the Companyviz. Customers Members Vendors Banks and all other business associates for thecontinuous support and cooperation extended by them. The Directors place on record theirsincere appreciation to all employees of the Company for their unstinted commitment andcontinued contribution to the Company.
| ||For and on behalf of the Board of Directors || |
| ||P. N. Singh ||N. K. Pasari |
| ||Director ||Managing Director |
| ||DIN: 00076392 ||DIN: 00101426 |
|New Delhi || || |