The Directors present the 26TH ANNUAL REPORT together with the Audited FinancialStatement for the Financial Year 2016-17 ended 31st March 2017.
1. FINANCIAL RESULTS:
| || ||(Rs in lakh) |
|Particulars ||2016-17 ||2015-16 |
|Profit before Interest and Depreciation ||1871.00 ||1671.28 |
|Less: Interest ||902.52 ||910.07 |
|Profit before Depreciation ||968.48 ||761.21 |
|Less: Depreciation ||671.50 ||647.77 |
|Profit before Tax ||296.98 ||113.43 |
|Less: Provision for Taxation ||140.38 ||51.01 |
|Less : Prior period adjustments ||5.47 ||5.73 |
|Add : Deferred Tax Asset ||41.38 ||4.61 |
|Net Profit ||192.51 ||61.30 |
|Add: Balance Brought Forward ||1205.86 ||1144.56 |
|Balance carried to Balance Sheet ||1398.37 ||1205.86 |
There are no material changes and commitment affecting the financial position of theCompany which have occurred between 1st April 2017 and date of this report.
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 2017.
3. REVIEW OF OPERATIONS:
The Company achieved production of 34546 M.T. of Newsprint/Writing and Printing paperduring the year under review compared to 38163 M.T. during 2015-16. The Company achievedsales of 34213 M.T. during the year under review compared to 38049 M.T. during 2015-16.The Company had to shut down its production facilities for 15 days for maintenance.
The Company has earned Profit before Interest and Depreciation of Rs 1871.00 Lakhduring the year under review compared to Rs 1671.28 Lakh during 2015-16. The above resultshave been achieved by improving product quality resulting in increased realization andefficiently 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 192.51 Lakh compared to Rs 61.30 Lakh during 2015-16.
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 2017-18.
7.1 Mr. Udayan D. Velvan retires by rotation in terms of the Articles of Association ofthe Company.
However being eligible offers himself for reappointment.
7.2 Ms. Anita Dave resigned from the office of Director w.e.f. 31st December 2016.
7.3 Ms. Anal R. Desai has been appointed as Independent Director of the Company w.e.f.
31st December 2016.
7.4 The Board of Directors duly met 10 times during the financial year under review.
7.5 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.
7.6 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.
7.7 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 2017 beingend of the financial year 2016-17 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 safeguarding ofassets 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 & Designation ||Remuneration for the year ||% increase over last year ||Parameters ||Median of Employees Remuneration ||Ratio ||Commission received from Holding/ Subsidiary |
|1. ||Mr. Prakash R. Vora - Managing Director ||Rs 1500000 ||- ||Higher responsibility and time ||Rs 12337/- ||121:1 ||- |
|2. ||Mr. Udayan D. Velvan - Executive Director ||Rs 1500000 ||- ||involvement due to current expansion & modernisation ||Rs 12337/- ||121:1 ||- |
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 96. The relationshipbetween average increase in remuneration and Company's performance is as per theappropriate performance benchmarks and reflects short and long term performance objectivesappropriate to 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 the Directors'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 the year theCompany had not entered into any transactions with related parties which could beconsidered 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' RELATIONSHIPCOMMITTEE:
The details of various committees and their functions are part of Corporate GovernanceReport.
The present Auditors of the Company M/s. Sunderji Gosar & Co. CharteredAccountants; Mumbai will retire at the ensuing 26th Annual General Meeting.
The remarks of Auditors are self explanatory and have been explained in Notes onAccounts.
In terms of Section 139 of the Companies Act 2013 read with Companies (Audit &Auditors) Rules 2014 the Board of Directors has recommended the appointment of M/s.Kanak Rathod & Co. Chartered Accountants; Mumbai as Statutory Auditors of the Companyfor a period of 5 years to hold office from the conclusion of the ensuing 26th AGM tillthe conclusion of 31st AGM on remuneration to be decided by the Board or Committeethereof.
The Company has obtained consent from M/s. Kanak Rathod & Co. CharteredAccountants; Mumbai to the effect that their appointment as Auditors of the Company forperiod of 5 years commencing from the Financial Year 2017-18 to 2021-22 if made will bein accordance with the provisions of Section 139 and 141 of the Companies Act 2013.
As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 asamended from time to time the Company has been carrying out audit of cost records everyyear.
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 2017-18. Asrequired under the Companies Act 2013 a resolution seeking Shareholders' approval forthe remuneration payable to the Cost Auditor forms part of the Notice convening the AnnualGeneral Meeting for their ratification.
The Company's properties including building plant and machinery stocks stores etc.continue to be adequately insured against risks such as fire riot strike civilcommotion malicious damages machinery breakdown etc.
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/ ASSOCIATES/ 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 so as toensure safety of all concerned compliances of environmental regulations and preservationof 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.
21.1 The Company's Income-tax Assessment has been completed up to the Assessment Year2014-15 and Sales tax Assessment is completed up to the Financial Year 2014-15.
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.
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 2017 ||Chairman |