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Shree Rajeshwaranand Paper Mills Ltd.

BSE: 516086 Sector: Industrials
NSE: N.A. ISIN Code: INE617D01017
BSE LIVE 14:49 | 17 Nov 13.40 -0.70
(-4.96%)
OPEN

13.65

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14.00

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13.40

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 13.65
PREVIOUS CLOSE 14.10
VOLUME 11570
52-Week high 20.10
52-Week low 5.64
P/E 6.09
Mkt Cap.(Rs cr) 17
Buy Price 13.40
Buy Qty 89.00
Sell Price 13.95
Sell Qty 222.00
OPEN 13.65
CLOSE 14.10
VOLUME 11570
52-Week high 20.10
52-Week low 5.64
P/E 6.09
Mkt Cap.(Rs cr) 17
Buy Price 13.40
Buy Qty 89.00
Sell Price 13.95
Sell Qty 222.00

Shree Rajeshwaranand Paper Mills Ltd. (SHRAJESHWPAP) - Director Report

Company director report

Dear Shareholders

The Directors present the 25TH ANNUAL REPORT together with the Audited FinancialStatement for the Financial Year 2015-16 ended 31st March 2016.

1. FINANCIAL RESULTS:

(Rs. in lacs)
Particulars 2015-16 2014-15
Profit before Interest and Depreciation 1671.28 1406.19
Less: Interest 910.07 595.51
Profit before Depreciation 761.21 810.68
Less: Depreciation 647.77 452.02
Profit before Tax 113.43 358.66
Less: Provision for Taxation 51.01 85.35
Less : Prior period adjustments 5.73 5.24
Add / (Less): Deferred Tax Asset/ (Liability) 4.61 (30.60)
Net Profit 61.30 237.47
Add: Balance Brought Forward 1144.56 907.09
Balance carried to Balance Sheet 1205.86 1144.56

There are no material changes and commitment affecting the financial position of theCompany which have occurred between 1st April 2016 and date of this report.

2. DIVIDEND:

With a view to conserve the resources for the working capital requirement of theCompany the Board of Directors has not recommend any dividend on the Equity Shares forthe year under review ended 31st March 2016.

3. REVIEW OF OPERATIONS:

The Company achieved production of 38163 M.T. of Newsprint/Writing and Printing paperduring the year under review compared to 35182 M.T. during 2014-15. The Company achievedsales of 38049 M.T. during the year under review compared to 36147 M.T. during 2014-15.The Company had to shut down its production facilities for 12 days for maintenance.

The Company has earned Profit before Interest and Depreciation of Rs. 1671.28 Lacsduring the year under review compared to Rs. 1406.19 Lacs during 2014-15. The aboveresults have been achieved by improving product quality resulting in increased realizationand efficiently running the plant resulting in lesser consumption of raw materials.

After providing for Depreciation Prior period adjustments and Taxation the Net Profitfor the year under review stood Rs. 61.30 Lacs compared to Rs. 237.47 Lacs during2014-15.

4. NEW PROJECTS:

4.1 NEWS PRINT DIVISION:

The Company has spent substantial amount during the year under review for increasingthe installed capacity to 130 M.T. per day as well as for providing facilities for betterquality of production.

During this second phase of expansion the Company has installed various machinerieswhich will increase the production with improvement in quality of the product. The Companyhas also installed various other balancing equipments to increase the production.

4.2 TOOLS DIVISION:

The Company commenced production of Abrasive Tools and for this purpose the Company hadincurred capital expenditure which is now converted in to fixed assets of the Company. Thediversification is partly funded from Company’s internal accruals and partly from theFinancial Assistance from the Bankers of the Company. The necessary arrangements have alsobeen made with the Bankers of the Company for Working Capital Finance.

5. FUTURE PLANS:

As informed earlier the installed capacity to manufacture Newsprint/Writing &Printing Paper is increased to 130 M.T. per day. The Management is planning to increasethe installed capacity in a phased manner and to further modernise the plant for saving ofvarious energies such as power steam etc.

The expansion will be funded out of internal accruals and term loans from Banks andFinancial Institution. The Company will be able to undertake good quality of Writing andPrinting paper in addition to Newsprint with this substantial expansion production.

6. LISTING :

The Equity Shares of the Company are listed on BSE Limited. The Company is regular inpayment of Annual Listing Fees. The Company has paid Listing fees up to the year 2016-17.

7. DIRECTORS:

7.1 Mr. Prakash R. Vora retires by rotation in terms of the Articles of Association ofthe Company.

However being eligible offers himself for reappointment.

7.2 The Board of Directors duly met 7 times during the financial year under review.

7.3 The Company has received necessary declaration from each Independent Director ofthe Company under Section 149(7) of the Companies Act 2013 (the Act) that they meet withthe criteria of their independence laid down in Section 149(6) of the Act.

7.4 FORMAL ANNUAL EVALUATION:

The Nomination and Remuneration Committee adopted a formal mechanism for evaluating theperformance of the Board of Directors as well as that of its Committees and individualDirectors including Chairman of the Board Key Managerial Personnel/ Senior Managementetc. The exercise was carried out through an evaluation process covering aspects such ascomposition of the Board experience competencies governance issues etc.

7.5 DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134 of the Companies Act 2013 it is herebyconfirmed:

(i) that in the preparation of the annual accounts the applicable accounting standardshad been followed along with proper explanation relating to material departures;

(ii) that the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at 31st March 2016 beingend of the financial year 2015-16 and of the profit of the Company for the year;

(iii) that the Directors had taken proper and sufficient care for 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 had prepared the annual accounts on a going concern basis.

(v) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

(vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

8. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:

The Board has adopted policies and procedures for ensuring the orderly and efficientconduct of its business including adherence to the Company’s policies safeguardingof assets prevention and detection of frauds and errors accuracy and completeness of theaccounting records and the timely preparation of reliable financial disclosures.

9. MANAGERIAL REMUNERATION:

REMUNERATION OF DIRECTORS:

Sr. No. Name of the Director Remuneration & Designation for the year % increase over last year Parameters Median of Employees Remuneration Ratio Commission received from Holding/ Subsidiary
1. Mr. Prakash R. Vora - Rs. 1500000 Managing Director - Higher responsibility and time involvement due to current expansion & modernisation Rs. 142177 11:1 -
2. Mr. Udayan D. Velvan - Rs. 1500000 Executive Director - Rs. 142177 11:1 -

The Board of Directors has framed a Remuneration Policy that assures the level andcomposition of remuneration is reasonable and sufficient to attract retain and motivateDirectors Key Managerial Personnel and Senior Management to enhance the quality requiredto run the Company successfully. All the Board Members and Senior Management personnelhave affirmed time to time implementation of the said Remuneration policy.

The Nomination and Remuneration Policy are available on the Company’swebsite-www.shreerajeshwaranandgroup.com

10. KEY MANAGERIAL PERSONNEL:

% INCREASE IN REMUNERATION OF DIRECTORS AND KMP:

Sr. No. Name of the Director & KMP Designation Percentage Increase (If any)
1. Prakash R. Vora Managing Director -
2. Udayan D. Velvan Executive Director -
3. Karunashankar G. Vora CFO -

11. PERSONNEL AND H. R. D.:

11.1 INDUSTRIAL RELATIONS:

The industrial relations continued to remain cordial and peaceful and your Companycontinued to give ever increasing importance to training at all levels and other aspectsof H. R. D.

The Number of permanent Employees of the Company is 95. The relationship betweenaverage increase in remuneration and Company’s performance is as per the appropriateperformance benchmarks and reflects short and long term performance objectives appropriateto the working of the Company and its goals.

11.2 PARTICULARS OF EMPLOYEES:

There is no Employee drawing remuneration requiring disclosure under Rule 5(2) ofCompanies Appointment & Remuneration of Managerial personnel) Rules 2014.

12. RELATED PARTY TRANSACTION AND DETAILS OF LOANS GUARANTEES INVESTMENT &SECURITIES PROVIDED:

Details of Related Party Transactions and Details of Loans Guarantees and Investmentscovered under the provisions of Section 188 and 186 of the Companies Act 2013respectively are given in the notes to the Financial Statements attached to theDirectors’ Report.

All transactions entered by the Company during the financial year with related partieswere in the ordinary course of business and on an arm’s length basis. During theyear the Company had not entered into any transactions with related parties which couldbe considered as material in accordance with the policy of the Company on materiality ofrelated party transactions.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company’s website atwww.shreerajeshwaranandgroup.com

13. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:

The information required under Section 134(3)(m) of the Companies Act 2013 and rule8(3) of Companies (Accounts) Rules 2014 relating to the conservation of Energy andTechnology Absorption forms part of this report and is given by way of Annexure- A.

14. CORPORATE GOVERNANCE AND MDA:

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Report on Corporate Governance ManagementDiscussion and Analysis (MDA) and a certificate regarding compliance with the conditionsof Corporate Governance are appended to the Annual Report as Annexure - B.

15. SECRETARIAL AUDIT REPORT:

Your Company has obtained Secretarial Audit Report as required under Section 204(1) ofthe Companies Act 2013 from M/s. Kashyap R. Mehta & Associates Company SecretariesAhmedabad. The said Report is attached with this Report as Annexure – C. Asregards the observation of the Auditors the Company is in the process of identifying andappointing Whole-time Company Secretary and also developing functional website of theCompany.

16. EXTRACT OF ANNUAL RETURN:

The extract of Annual return in Form – MGT-9 has been attached herewith as Annexure– D.

17. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS’RELATIONSHIP COMMITTEE:

The details of various committees and their functions are part of Corporate GovernanceReport.

18. GENERAL:

18.1. AUDITORS:

STATUTORY AUDITORS:

At the Annual General Meeting held on 26th September 2015 M/s. Sunderji Gosar &Co. Chartered Accountants; Mumbai were appointed as statutory auditors of the Company tohold office till the conclusion of the Annual General Meeting to be held in the year 2017.In terms of the first proviso to Section 139 of the Companies Act 2013 the appointmentof the auditors shall be placed for ratification at every Annual General Meeting.Accordingly the appointment of M/s. Sunderji Gosar & Co. Chartered Accountants asstatutory auditors of the Company for the year 2016-17 is placed for ratification by theshareholders.

The remarks of Auditor are self explanatory and have been explained in Notes onAccounts COST AUDITORS: As per the requirement of Central Government and pursuant toSection 148 of the Companies

Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 as amended fromtime to time the Company has been carrying out audit of cost records every year.

The Board of Directors on the recommendation of Audit Committee has appointed M/s V.H. Savaliya & Associates Cost Accountants (Firm Registration No. 100346) as CostAuditor to audit the cost accounts of the Company for the financial year 2016-17. Asrequired under the Companies Act 2013 a resolution seeking Shareholders’ approvalfor the remuneration payable to the Cost Auditor forms part of the Notice convening theAnnual General Meeting for their ratification.

18.2 INSURANCE:

The Company’s properties including building plant and machinery stocks storesetc. continue to be adequately insured against risks such as fire riot strike civilcommotion malicious damages machinery breakdown etc.

18.3 DEPOSITS:

The Company has not accepted during the year under review any Deposits and there wereno overdue deposits.

18.4 RISKS MANAGEMENT POLICY:

The Company has a risk management policy which from time to time is reviewed by theAudit Committee of Directors as well as by the Board of Directors. The Policy is reviewedquarterly by assessing the threats and opportunities that will impact the objectives setfor the Company as a whole. The Policy is designed to provide the categorization of riskinto threat and its cause impact treatment and control measures. As part of the RiskManagement policy the relevant parameters for protection of environment safety ofoperations and health of people at work and monitored regularly with reference tostatutory regulations and guidelines defined by the Company.

18.5 SUBSIDIARIES/ ASSOCIATE/ JVs:

The Company does not have any Subsidiaries/ Associate Companies / JVs.

18.6 CODE OF CONDUCT:

The Board of Directors has laid down a Code of Conduct applicable to the Board ofDirectors and Senior Management. All the Board Members and Senior Management personnelhave affirmed compliance with the code of conduct.

18.7 SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There has been no significant and material order passed by any regulators or courts ortribunals impacting the going concern status of the Company and its future operations.

18.8 ENVIRONMENT AND SAFETY:

The Company is conscious of the importance of environmentally clean and safeoperations. The Company’s policy requires conduct of operations in such a manner soas to ensure safety of all concerned compliances of environmental regulations andpreservation of natural resources.

18.9 DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013:

The Company has in place an Anti Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the year under review the Company did not receive anycomplaint.

18.10 INSTANCES OF FRAUD IF ANY REPORTED BY THE AUDITORS:

There have been no instances of fraud reported by the Auditors under Section 143(12) ofthe Companies Act 2013.

19. DISCLOSURE OF ACCOUNTING TREATMENT:

In the preparation of the financial statements the Company has followed the AccountingStandards referred to in Section 133 of the Companies Act 2013. The significantaccounting policies which are consistently applied are set out in the Notes to theFinancial Statements.

20. DEMATERIALISATION OF EQUITY SHARES:

Shareholders have an option to dematerialise their shares with either of thedepositories viz NSDL and CDSL. The ISIN No. allotted is INE617D01017.

21. FINANCE:

21.1 The Company’s Income-tax Assessment has been completed up to the AssessmentYear 2013-14 and Sales tax Assessment is completed up to the Financial Year 2012-13.

21.2 The Company is enjoying Working Capital facilities Corporate Loan and Term Loanfrom State Bank of India and Bank of India. The Company is regular in payment of interestand principal.

22. ACKNOWLEDGMENT:

Your Directors express their sincere thanks and appreciation to Promoters andShareholders for their constant support and co operation. Your Directors also place onrecord their grateful appreciation and co-operation received from Bankers FinancialInstitutions Government Agencies and employees of the Company.

For and on behalf of the Board
Place : Jhagadia Amrish R. Patel
Date : 20th July 2016 Chairman

ANNEXURE - A Disclosure of particulars with respect to Conservation of Energy

A. CONSERVATION OF ENERGY-

Steps taken or impact on conservation of energy Energy Conservation is an active focus area since it is a major cost in the manufacturing process. The Company has taken several initiatives in line with policy of Conservation of natural resources by optimizing proper use of steam coal etc.
Steps taken by the company for utilizing alternate sources of energy -
Capital investment on energy conservation equipments The Company has incurred Capital Investment of Rs. 32 lacs on energy conservation equipment.

B. TECHNOLOGY ABSORPTION :

1. No research & development is carried out by the company.

2. No new technology is adopted or innovated.

2015-16 2014-15
C. FOREIGN EXCHANGE EARNINGS & OUTGO:
1. Total Foreign exchange earnings (Rs. in lacs) 3.98 NIL
2. Total Foreign Exchange used (Rs. in lacs) 676.47 651.74

 

For and on behalf of the Board
Place : Jhagadia Amrish R. Patel
Date : 20th July 2016 Chairman

ANNEXURE-C

FORM NO. MR-3

SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED ON 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

Shree Rajeshwaranand Paper Mills Limited

We have conducted the Secretarial Audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by M/s. Shree RajeshwaranandPaper Mills Limited [CIN: L21093GJ1991PLC057244] (‘hereinafter called theCompany’) having Registered Office at Bharuch -Jhagadia Road Village-Govali Dist.:Bharuch Gujarat – 392 022. The Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts / statutorycompliances and expressing our opinion thereon.

Based on our verification of the Company’s books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit we hereby report that in our opinion the Company hasduring the audit period covering the financial year ended on 31st March 2016complied with the statutory provisions listed hereunder and also that the Company hasproper Board-processes and compliance-mechanism in place to the extent in the manner andsubject to the reporting made hereinafter:

We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March 2016according to the provisions of:

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

(ii) The Securities Contracts (Regulation) Act 1956 (‘SCRA’) and the rulesmade thereunder;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (‘SEBI Act’):

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

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992 / 2015.

(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 (Not applicable during the audit period)

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999 / Securities and Exchange Board of India(Share Based Employee Benefits) Requirements 2014 (Not applicable during the auditperiod)

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 (Not applicable during the audit period)

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

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009 (Not applicable during the audit period)

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998; and (Not applicable during the audit period)

(vi) Various common laws applicable to the manufacturing and other activities of theCompany such as Labour Laws Pollution Control Laws Land Laws etc. and sector specificlaws such as Forest (Conservation) Act1980 Chemical Accidents( Emergency PlanningPreparedness and Response) Rules 1996 Indian Boilers Act 1923 for which we have reliedon Certificates/ Reports/ Declarations/ Consents/ Confirmations obtained by the Companyfrom the experts of the relevant field such as Advocate Labour Law ConsultantsEngineers Occupier of the Factories Registered Valuers Chartered Engineers FactoryManager Chief Technology Officer of the Company Local Authorities Effluent TreatmentAdviser etc. and have found that the Company is generally regular in complying with theprovisions of various applicable Acts.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards SS – 1 & SS – 2 issued by The Institute ofCompany Secretaries of India. (ii) Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 and the Listing Agreement.

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

The following are our observations during the Audit:

1. The Company does not have a whole time Company Secretary pursuant to Section203 of the Companies Act 2013 and Rule 8 of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

2. The Company does not maintain a functional website containing basicinformation of the Company pursuant to Regulation 46 of SEBI (Listing Obligations andDisclosures Requirements).

We further report that:

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act. Adequate notice is given to alldirectors to schedule the Board Meetings agenda and detailed notes on agenda were sent atleast seven days in advance and a system exists for seeking and obtaining furtherinformation and clarifications on the agenda items before the meeting and for meaningfulparticipation at the meeting.

Majority decision is carried through while the dissenting members’ views arecaptured and recorded as part of the minutes.

We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

We further report that during the audit period the Company has: a. Duly passed SpecialResolution under Section 188196197 and 203 read with Schedule V and other applicableprovisions if any of the Companies Act 2013 at the 24th Annual General Meeting held on26th September 2015 relating to re-appointment of Mr. Prakash R. Vora as ManagingDirector to hold office for a period of 3 years w.e.f 1st October 2015 to 30thSeptember 2018. b. Duly passed Special Resolution under Section 188196197 and 203 readwith Schedule V and other applicable provisions if any of the Companies Act 2013 at the24th Annual General Meeting held on 26th September 2015 relating to re-appointment of Mr.Udayan D. Velvan as Executive Director to hold office for a period of 3 years w.e.f 1stOctober 2015 to 30th September 2018

For KASHYAP R. MEHTA & ASSOCIATES
Company Secretaries
KASHYAP R. MEHTA
Proprietor
COP No. 2052
Place : Ahmedabad FCS No. 1821
Date : 20th July 2016 FRN: S2011GJ166500

Note: This report is to be read with our letter of even date which is annexed asAnnexure – 1 and forms an integral part of this report.

ANNEXURE - 1

To

The Members

Shree Rajeshwaranand Paper Mills Limited

Our report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.

2. We have followed the audit practices and process as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected inSecretarial records. We believe that the process and practices followed by us provide areasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Wherever required we have obtained the Management representation about theCompliance of laws rules and regulations and happening of events etc.

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

6. The Secretarial Audit report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.

For PINAKIN SHAH & CO.
Company Secretaries
KASHYAP R. MEHTA
Proprietor
COP No. 2052
Place : Ahmedabad FCS No. 1821
Date : 20th July 2016 FRN: S2011GJ166500