Shree Rama Multi-Tech Limited
Your Directors take pleasure in presenting the 22nd Annual Report on the business andoperations of your Company along with the standalone Audited financial statements for theyear ended 31st March 2016.
The Company's financial performance for the year ended 31st March 2016 is summarizedbelow:
|Particulars ||2015-16 ||2014-15 |
|Sales and Other Income ||10841.40 ||11005.12 |
|Earning before Interest Depreciation & Tax (EBIDTA) ||1665.96 ||1117.62 |
|Finance Cost ||686.74 ||635.30 |
|Depreciation ||1369.18 ||1589.94 |
|Profit/(Loss) before Tax ||(389.96) ||(1107.62) |
|Provision for Tax ||0.00 ||0.00 |
|Deferred Tax (Liabilities)/Assets ||178.38 ||255.38 |
|Profit/(Loss) after Tax ||(211.58) ||(852.24) |
|Exceptional Items ||0.00 ||34.37 |
|Profit/(Loss) for the Year ||(211.58) ||(817.87) |
|Add: Balance of Profit and Loss Account ||(51444.93) ||(50366.20) |
|Carrying amount of Fixed Assets whose useful life of the assets ||0.00 ||(377.51) |
|Deferred tax on carrying amount of Fixed Assets ||0.00 ||116.65 |
|Balance of loss carried to Balance Sheet ||(51656.51) ||(51444.93) |
During the financial year 2015-16 the Company has achieved the total Revenue of Rs.10841 lacs as compared to the previous year's figure of Rs. 11005 lacs thereby registeredmarginal reduction of 1.49 % over the previous year. The EBIDTA of the Company during theyear stood at Rs. 1666 Lacs compared to Rs. 1117.62 lacs in previous year. The Company hasregistered net Loss of Rs. 212 Lacs for the financial year ended on 31st March 2016 ascompared to the previous year's loss of Rs. 818 Lacs. There is a significant reduction inthe loss as compared to previous year.
The business performance of the Company has improved in terms of reduction in the lossdespite marginal reduction in the turnover of the Company. This has happened due toreduction in cost effective utilization of available resources marketing and research& development activities for better quality of the products and streamlining of themanufacturing activities of the Company. Your Directors expect further improvement in theperformance of the Company during the current year.
Your company has unique proposition of offering different packaging solutions andtechnologies under one roof. Among diverse portfolio of your company's products Tubesflexible packaging and cups are primary packaging materials since the packed product isin direct contact with packaging. As a result Quality Hygiene and adherence to systemshas become integral part of your Company's culture. Label is secondary packaging materialproduced by your Company. Another large and growing segment for your Company is flexiblepackaging materials which has varied applications for packing powders granules liquidscondoms etc.
In line of this intention during the year 2015-16the necessary investments have beenmade in machineries and man power. In addition to domestic market overseas markets alsohold substantial potential for both laminated tubes and flexible laminates. During yearunder review the Export turnover of the Company was Rs. 1925.28 Lacs(FOB Value).YourCompany intends to strengthen their position in these markets also for which thenecessary marketing efforts have been initiated during the year.
In view of loss for the year under review and accumulated loss of the earlier yearsyour Directors do not recommend any dividend for the financial year 2015-16 and no amounthas been transferred to the General Reserves.
The paid up Share Capital of the Company as at March 31 2016 was Rs. 3842.70 lacs.During the year under review the Company has not issued any shares with differentialvoting rights as to dividend voting or otherwise nor has granted any stock options orsweat equity. None of the Directors of the Company hold any instruments convertible intoEquity shares of the Company.
Shree Rama (Mauritius) Limited was incorporated as wholly owned subsidiary inMauritius. The current status of the Company is "Defunct".
During the year under review your Company has not accepted any fixed deposit withinthe meaning of Section 73 of the Companies Act 2013 read with rules made there under.
SHIFTING OF REGISTERED OFFICE
Company has shifted its registered office from 603 Shikhar Shreemali Society Nr.Vadilal House Mithakhali Navrangpura Ahmedabad-380009 to 301 Corporate House Opp.Torrent House Income Tax Ashram Road Ahmedabad -380009 w.e.f. 6th November 2015 due tothe administrative convenience.
EXTRACT OF ANNUAL RETURN:
Pursuant to section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 an extract of Annual Return in form MGT-9 forthe year ended 31st March 2016 is annexed herewith as Annexure - A as a part to thisReport.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review pursuant to the provisions of Section 161 196 and 197 ofthe Companies Act 2013 Shri Shailesh K Desai (DIN: 01783891) was appointed as ManagingDirector in the Board meeting held on 3rd August2015. The members at the 21st AnnualGeneral meeting approved his appointment as Managing Director for period of three years.
Further upon the recommendation of Nomination and remuneration Committee of theCompany Shri Hemal R Shah (DIN : 07338419) was appointed as an Additional Director(Executive) in the meeting of Board of Director held on 27th November 2015. In the sameBoard meetinghe was also appointed as Whole Time Director of the Company for a period ofone year w.e.f 27th November2015 on terms and conditions including remuneration payableto him which is subject to the approval by shareholders at the ensuing general meeting inaccordance with the provisions of Section 196 197 of the Companies Act 2013 and rulesmade thereunder.
Shri Prahlad S Patel (DIN 00037633) Independent Director and Shri R. S. Patel (DIN00076592) the Chairman of the Board and independent Director of the Company had tenderedtheir resignation due to pre-occupation w.e.f 3rd August 2015 and 1st December 2015respectively. The Board has placed on record its sincere thanks and gratitude for theirvaluable contribution given to the Company during their tenure.
Pursuant to the provisions of Section 149161 of the Companies Act 2013 and on therecommendation of Nomination and remuneration committee Shri Shalin S Patel (DIN :01779902) was appointed as an Additional Director (Independent) at the meeting of Board ofDirector of the Company held on 9th February 2016 to hold office upto the ensuing AnnualGeneral Meeting.
Your Company has received declarations from all the Independent Directors including newappointee confirming that they meet with the criteria of independence as prescribed bothunder sub-section (6) of Section 149 of the Companies Act 2013 and under SEBI (ListingObligation and Disclosure Requirement) Regulation2015 (erstwhile Listing agreement) andthere has been no change in the circumstances which may affect their status as Independentdirector during the year under review.
In accordance with the provisions of Section 152 of the Companies Act 2013 and theCompany's Articles of Association Shri Mittal K Patel (DIN 03619139) Director retiresby rotation at the forthcoming Annual General Meeting and being eligible offers himselffor re-appointment. The Board recommends his re-appointment for the consideration of theMembers of the Company at the ensuing Annual General Meeting.
During the year the Non-Executive Directors of the Company had no pecuniaryrelationship or transactions with the Company.
Pursuant to section 203 of the Companies Act 2013 The Key Managerial Personnel of theCompany are as under:
1. Shri Shailesh K Desai Managing Director (w.e.f 3rd August 2015)
2. Shri Hemal R Shah Whole Time Director (w.e.f. 27th November 2015)
3. Shri Krunal G Shah Chief Financial Officer
4. Shri Hemal Sadiwala Company Secretary (w.e.f. 5th December 2015)
The details of KMPs are provided in the Corporate Governance Report as required underSEBI (LODR) Regulation 2015
NUMBER OF MEETINGS OF THE BOARD:
The Board met six times during the Financial Year ended on March 31 2016 the detailsof which are given in the Corporate Governance Report that forms part of this AnnualReport. The intervening gap between any two meetings was not more than one hundred andtwenty days.
COMMITTEES OF BOARD
Pursuant to applicable provisions of the Companies Act 2013 and its rules made thereunder and in compliance with SEBI (LODR) Regulation2015 the Company has followingCommittees of the Board as on 31st March 2016:
(i) Audit Committee
(ii) Nomination and Remuneration Committee
(iii) Stakeholders Relationship Committee
(iv) Corporate Social Responsibility Committee
The details with respect to the aforesaid Committees along with their compositionnumber of meetings and attendance of the meetings are provided in the CorporateGovernance Report.
Pursuant to the provisions of the Companies Act 2013 and as per the corporategovernance requirements as prescribed under SEBI (LODR) Regulations 2015 the Board ofDirectors has carried out the performance evaluation of its own performance independentDirectors as well as evaluation of working of its Board committees. Further IndependentDirectors of the Company have also carried out the performance evaluation ofnon-independent Directors and the Board as whole and also reviewed the performance of theChairman of the Company. The Nomination and Remuneration Committee of the Company has alsocarried out performance evaluation of every Director's performance. The Board expressedits satisfaction on the evaluation process.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability States that:
a) in the preparation of the annual accounts for the year ended on 31st March 2016the applicable accounting standards have been followed along with proper explanationrelating to material departure if any;
b) the Directors have 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 for the year ended on 31st March 2016and of loss of the Company for that period.
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a "Going concernbasis";
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
RELATED PARTY TRANSACTIONS
During the year under review the Company has entered into contracts / Arrangements /Transactions with Related Parties. All Related Party Transactions were placed before theAudit Committee for review and approval. Prior omnibus approval has been obtained forRelated Party Transactions which are of repetitive nature and / or entered in the OrdinaryCourse of Business and are at Arm's Length. Approval of Board has been obtained forRelated Party Transactions wherever required. Since the Related Party
Transactions entered into by the Company during the year under review were on arms'length basis and there were no material contracts or arrangement or transactions enteredinto in terms of section 188 of the Companies Act 2013 and in terms of SEBI (LODR)Regulations 2015(erstwhile Listing agreement) accordingly applicable disclosure ofrelated party transactions as per section 134(3) of the Companies Act 2013 in form AOC-2is not provided. However the disclosures in compliance with Para A of Schedule V ofRegulation 53 (f) of SEBI (LODR)Regulation2015 is provided in the notes to the Accounts.The related party transactions as are required under Accounting Standard-18 are set out inthe notes to the financial statements.
The Company has formulated Related Party Transaction Policy for dealing with RelatedParty transactions as per provisions of the Companies Act 2013 details of the saidPolicy is disclosed on the Company's website.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY
During the year under review the Company has not given any Loans Guarantees andInvestments under the provisions of Section 186 of the Companies Act 2013 hence thedetails are not provided.
INTERNAL FINANCIAL CONTROL (IFC) SYSTEM
The Company has implemented a sound financial control system and framework in place toensure:
- The orderly and efficient conduct of its business including adherence of company'spolicies
- Safeguarding of its assets
- The prevention and detection of frauds and errors
- The accuracy and completeness of the accounting records and
- The timely preparation of reliable financial information.
The Board regularly reviews the effectiveness of controls and takes necessarycorrective actions where weaknesses are identified as a result of such reviews. Thisreview covers entry level controls process level controls fraud risk controls andInformation Technology environment. Based on this evaluation there is nothing that hascome to the attention of the Directors to indicate any material break down in thefunctioning of these controls procedures or systems during the year. There have been nosignificant events during the year that have materially affected or are reasonably likelyto materially affect the internal financial controls. The management has also come to aconclusion that the IFC and other financial reporting was effective during the year and isadequate considering the business operations of the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
Statement containing the necessary information on conservation of energy technologyabsorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) ofthe Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 isannexed herewith as Annexure - B as a part to this Report.
PARTICULARS OF EMPLOYEES:
The Company has continued to maintain harmonious and cordial relations with itsofficers supervisors and workers enabling the Company to maintain the pace of growth.Training is imparted to employees at all levels and covers both technical and behavioralaspects.
Details of containing Managerial remuneration as required under Section 197(12) of theCompanies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed herewith as Annexure - C as a part to thisReport. There was no employee drawing an annual salary of Rs. 60 Lacs or more whereemployed for full year or monthly salary of Rs. 5 Lac or more where employed for part ofthe year and therefore no information pursuant to the provisions of Rule 5(2) & 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isrequired to be given.
NOMINATION AND REMUNERATION POLICY
Pursuant to the provisions of Section 178 of the Companies Act 2013 read with theRules made thereunder the Board of Directors have framed Nomination and RemunerationPolicy as per the recommended by the Nomination and Remuneration Committee.
The salient features of the said policy are as under.
Criteria for the Appointment and Removal of Directors and Key Managerial Personnel.
The Committee shall identify and ascertain the integrity qualificationexpertise and experience of the person for appointment as Director KMP or at SeniorManagement level and recommend his / her appointment as per Company's Policy.
He/she has not attained the age of seventy years.
Appointment or reappointment of any person as its Executive Chairman ManagingDirector or Executive Director shall not be exceeding period of five years at a time.
An Independent Director shall hold office for a term up to three/fiveconsecutive years on the Board of the Company and will be eligible for re-appointment onpassing of a special resolution by the Company.
No Independent Director shall hold office for more than two consecutive terms ofup to maximum of 3/5 years each but such Independent Director shall be eligible forappointment after expiry of 3/5 years of ceasing to become an Independent Director.
Remuneration to Directors/Key Managerial Personnel /Senior Management Personnel
Remuneration to Managing Director / Whole-time Directors etc. shall be governedas per provisions of the Companies Act 2013 and rules made there under or any otherenactment for the time being in force and the approvals obtained from the Members of theCompany. The Committee shall make such recommendations to the Board of Directors as itmay consider appropriate with regard to remuneration to Managing Director Whole-TimeDirectors.
The remuneration to Key Managerial Personnel and Senior Management shall consistof fixed pay which include monthly remuneration employer's contribution to ProvidentFund etc. as decided from to time as per Company's Policy and in accordance with theprovisions of the Companies Act 2013.
Committee may decide for Incentive pay based on the balance between performanceof the Company and performance of the Key Managerial Personnel and Senior Management tobe decided annually or at such intervals as may be considered appropriate.
The Non-Executive / Independent Directors may receive sitting fees and suchother remuneration as permissible under the provisions of Companies Act 2013.
Any remuneration paid to Non- Executive / Independent Directors for servicesrendered which are of professional in nature shall not be considered as part of theremuneration if such Services are rendered by him in his capacity as the professional andin the opinion of the Committee he possesses the requisite qualification for the practiceof that profession.
AUDITORS & AUDITORS' REPORT
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the rulesframed thereunder M/s. Mahendra N. Shah & Co. (FRN : 105775W) Chartered Accountantswere appointed as statutory auditors of the Company from the conclusion of the TwentiethAGM of the Company held on September 27 2014 till the conclusion of the twenty third AGMto be held in the year 2017 subject to ratification of their appointment at every AGM.
M/s. Mahendra N. Shah & Co. (FRN : 105775W) Chartered Accountants the StatutoryAuditors of the Company will retire at the conclusion of the ensuing Annual GeneralMeeting and are eligible for re-appointment. Your directors recommend to ratify theirappointment for the year 2016-17. The Company has received a letter from M/s Mahendra N.Shah & Co. Chartered Accountants to the effect that their appointment if made wouldbe within the prescribed limits under Section 141 of the Companies Act 2013 read withrules made thereunder and that they are not disqualified for such appointment.
During the year under review there are no instances of frauds that are reportable bythe auditors under section 143 (12) the Companies Act 2013 and its rules made thereunder.
Boards' Comments on Auditors Emphasis
1. Regarding Unpaid dividend on Preference Share & Non Provision of interest onloans of lenders:
The Company has filed a Composite Scheme of Compromise and Arrangement with its lendersand Shareholders u/ s 391 of the Companies Act 1956 at larger bench of Gujarat High Courtand on the Scheme becoming effective all existing litigations and legal cases shall beterminated and the lenders shall forthwith withdraw all existing litigations and legalcases against the Company The guarantors the Directors of the Company as the case may beand the lenders shall simultaneously execute necessary applications / affidavits /documents etc. to be promptly submitted to concerned courts statutory authorities etc. inorder to give immediate effect for such withdrawal of legal actions cases or litigations.Thereafter the right of the lenders will be submerged and recasted in the manner asproposed in the Scheme.
In the said scheme the issue of waiver of unpaid dividend on preference shares is alsocovered. The Board is of the view as well as legally advised that the said matter will bealso sorted out on final outcome of the scheme. Further as regard to non-provision ofinterest on outstanding loans and debentures which are under settlement scheme theCompany has initiated settlement of said loans as per scheme and on final ascertainment ofthe same the necessary accounting effect will be given.
2. As regard to Non Consolidation of Accounts of Wholly Owned Subsidiary (WOS):
In respect of the investment made in Shree Rama (Mauritius) Limited its wholly ownedsubsidiary (WOS) the resident Directors & key managerial personnel of the said WOShad resigned in the year 2005-06 and audited accounts for the year ended 30th September2003 and onwards could not be prepared and provided. Its present status is shown as'defunct' under respective laws. The company has accordingly provided for full diminutionin the value of investments in the earlier years.
In view of the above it was not possible to prepare consolidated financial statementsas required by Accounting Standard 21 issued by ICAI and other provisions of theCompanies Act 2013. Accordingly separate statement containing the salient features offinancial statements of subsidiaries in Form AOC-1 is not provided herewith.
Pursuant to provisions of section 204 of the Companies Act 2013 and the Companies(Appointment and
Remuneration of Managerial Personnel) Rules 2014 the Company has appointed M/sSamdani Shah & Associates Company Secretaries in practice to undertake theSecretarial Audit of the Company. The Secretarial Audit report is annexed herewith asAnnexure - D as a part to this Report.
There are some observations made by the Secretarial Auditor in their report for whichthe Board of Directors hereby give its comments/ explanation as under:
i) The Company has filed a Composite Scheme of Compromise and Arrangement with itslenders and Shareholders u/s 391 of the Companies Act 1956 at larger bench of GujaratHigh Court and on the Scheme becoming effective all existing litigations and legal casesshall be terminated and the lenders shall forthwith withdraw all existing litigations andlegal cases against the Company. The guarantors the Directors of the Company as the casemay be and the lenders shall simultaneously execute necessary applications/affidavits/documents etc. to be promptly submitted to concerned courts statutoryauthorities etc. in order to give immediate effect for such withdrawal of legal actionscases or litigations. Thereafter the right of the lenders will be submerged and re-castedin the manner as proposed in the Scheme.
ii) In the said scheme the issue of waiver of unpaid dividend on preference shares isalso covered. The Board is of the view as well as legally advised that the said matterwill be also sorted out on final outcome of the scheme.
iii) As regard to submission of June 2015 quarter results beyond the prescribed timewas due to some technical problem in the system in submission of the results however itwas submitted thereafter.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board has constituted the Corporate Social Responsibility (CSR) Committee and hasframed a CSR Policy as required under the provisions of the companies Act 2013. TheAnnual Report on CSR activities is annexed herewith as Annexure - E as a part to thisReport.
MANAGEMENT DISCUSSION AND ANALYSIS
As required under regulation 34(3) read with Schedule V Para B of SEBI (LODR)Regulations 2015 the Report on Management's Discussion and Analysis is annexed herewithas Annexure - F as a part to this Report.
The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The report on CorporateGovernance as stipulated under SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 forms an integral part of this Report. The requisite certificate from theStatutory Auditor of the Company confirming compliance with the conditions of corporategovernance is attached to the report on Corporate Governance.
The properties of the Company are adequately insured to take care of any unforeseencircumstances.
MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of theCompany occurred between the end of the financial year of the Company to which thefinancial statements relate and the date of the report except shifting of Company'sAmbaliyara plant located at Dist. Mehsana Gujarat to Moti-Bhoyan Ta-Kalol Dist.Gandhinagar Gujarat as approved by the Board of Director in its meeting held on 10th May2016. The proposed shifting of plant has been initiated for the purpose of administrativeconveyance cost effectiveness and optimum utilization of the resources of the Company.
A risk management mechanism/ plan covering the risk mapping and trend analysis riskexposure potential impact and risk mitigation process is in place. The objective of themechanism is to minimize the impact of risks identified and taking advance actions tomitigate it. The mechanism works on the principles of probability of occurrence andimpact if triggered. A detailed exercise is being carried out to identify evaluatemonitor and manage both business and non-business risks. The Company has formally framed aRisk Management Policy to identify and assess the key risk areas monitor and reportcompliance and effectiveness of the policy and procedure. The board of directors reviewsthe effectiveness of the Risk Management system and its compliances.
Discussion on risks and concerns are covered in the Management Discussion and AnalysisReport which forms part of this Report.
Your Company has framed a Vigil Mechanism to report genuine concerns or grievances ofall Directors and employees. It provides for adequate safeguards against victimization ofpersons who use such mechanism. The Vigil Mechanism Policy has been posted on the websiteof the Company.
CODE OF CONDUCT
The Board of Directors has adopted the code of Conduct for the Director and Seniormanagement and the same has been placed on the Company's website. All the Board membersand the senior management have affirmed compliance with the Code of conduct for the yearunder review.
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.
As per the requirement under the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 read with rules made there under your company hasalso formulated a policy on prevention of sexual harassment at workplace with a mechanismof lodging complaints. During the year under review no complaints were reported.
Your Directors place on record their sincere appreciation for the continuedco-operation extended to the Company by the Banks. Your Directors also place on recordsincere appreciation of the continued hard work put in by the employees at all levels. TheDirectors also thank the Company's vendors investors business associates Government ofIndia State Government and various departments and agencies for their support andco-operation.
| ||For and on behalf of the Board |
|Place : Moti Bhoyan ||Shailesh Desai |
|Date : 10th May 2016 ||Chairman |