Your Directors are pleased to present the Thirty Sixth Annual Report on the businessand operations of your
Company and the financial accounts for the year ended 31st March 2016 approved by theBoard:
The Company's financial performance for the year under review along with previousyear's figures is given as under:
|Particulars ||2015-16 ||2014-15 |
| ||Rs. in lacs ||Rs. in lacs |
|Gross Sales and Other Income ||17166 ||17274 |
|Profit before Interest and Depreciation ||2608 ||2558 |
|Finance Cost ||1632 ||1686 |
|Depreciation ||751 ||760 |
|Profit/(Loss) before Tax ||225 ||112 |
|(Less)Provision for Tax ||45 ||22 |
|(Less)/Add Deferred Tax ||30 ||16 |
|Profit/(Loss) after tax ||150 ||74 |
|Add: Balance Brought forward from Previous Year ||773 ||699 |
|Balance Carried Over ||923 ||773 |
The PAT has doubled from Rs 74 lacs in the previous year to Rs 150 lacs during the yearunder report. However the Board has not recommended any dividend distribution with aperspective to strengthen financial position of your company and increase value to theshareholders investment. Such a measure eventually will nurture and nourish shareholderswealth.
Aggregate sales and other income for the year were marginally lower by 0.6% compared tothe previous financial year. However the PBDIT has recorded an increase by 2% at Rs 2608lacs as compared to Rs.2558 lacs in the previous year. The improvement in operating marginand also reduction in finance cost has helped the company to increase the profit by 100%over previous year. The Net Profit after Tax stood at Rs.150 lacs for the year againstprofit of Rs. 74 lacs in the previous year.
Globally India is the second largest in GDP growth and fourth largest economy in termsof purchasing power parity (PPP). The packaging industry in India is one of the fastestgrowing industries which has its influence on all industries directly or indirectly.
The Indian packaging industry is growing continuously. The total worth is about USD24.6 billion. The average annual growth rate is about 13 - 15%. However there is greatgrowth potential since India's per capita consumption of packaging is only 4.3 kgs whereasneighboring Asian countries like China and Taiwan show about 6 kgs and 19 kgsrespectively. The highlights of the industry trend the outlook and the opportunitiesahead for the company are discussed in detail in the Management Discussion and AnalysisReport attached as Annexure IV to this report.
In the year 2015-16 the export turnover was Rs.2285 lacs as compared to the previousyear turnover of Rs.2677 lacs representing a decline of 15% over the previous year. Thedecline in export sales is mainly due to sluggish global demand coupled with a volatileglobal currency market.
The statement pursuant to Section 129 of the Companies Act 2013 containing details offinancial highlights of the subsidiary company forms part of the Annual Report.
In compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and in accordance with Accounting Standard AS-21 on Consolidated FinancialStatements the audited Consolidated Financial Statements incorporating the operations ofthe company and its subsidiary company viz. M/s Shetron Metropak Private Ltd are providedin this Annual Report.
Further the report on the performance and financial position of the subsidiary andsalient features of the financial statement in the prescribed Form AOC-1 is annexed tothis report [Annexure VIII].
The audited financial statements of subsidiary shall be kept for inspection duringbusiness hours by any shareholders at the registered office of the Company and of thesubsidiary company. The Company will also make available the audited financial accountsand related information of the subsidiary companies upon request by any shareholder ofthe company.
AWARDS & LAURELS:
In recognition for Decoration & Printing Quality under Cans Category the companywas awarded Gold Winner by CANMAKER for the year 2015 for reproduction of three piecewelded tin plate can. The company was also awarded with IMDA award for the Excellence inPrinting Quality under "Best of Category Closures" for the year 2015.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In terms of Section 161 of the Companies Act 2013 - Mr.Mohan Narayan Menon who wasappointed as Additional Director and Independent Director on 16 May 2016 and hold the saidoffice till the date of the Annual General Meeting. We have received a notice underSection 160(1) of the Companies Act 2013 from a member proposing his candidatures to theoffice of the Directorship.
In terms of Section 161 of the Companies Act 2013 - Mr. Praveen Mally who wasappointed as Additional Director on 08-Feb-2016 and hold the said office till the date ofthe Annual General Meeting. Subsequently at the Board Meeting held on 16th May 2016 Mr.Praveen Mally has been appointed as Joint Managing Director to hold office for a period ofthree years on a remuneration recommended by the Nomination and Remuneration Committeesubject to the approval of the shareholders at the ensuing AGM. We have received a noticeunder Section 160(1) of the Companies Act 2013 from a member proposing the candidature ofMr. Praveen Mally as Joint Managing Director.
Brief resumes of the Mr. Praveen Mally and Mr. Mohan Narayan Menon being appointed areattached to the Notice of the Annual General Meeting.
In accordance with the decision taken by the Board of Directors at the meeting held on16th May 2016 to reconstitute the Board and appoint two Joint Managing DirectorsMr.Kartik Nayak has been re-designated as Joint Managing Director.
Further the Board noted that the three year tenure of Mr. Diwakar S Shetty ExecutiveChairman and Whole Time Director and Mr. Kartik Nayak Joint Managing Director shallexpire on 31st August 2016. The Board has decided subject to the shareholders approval atthe ensuing AGM for the appointment and the continuation of Mr. Diwakar Shetty as WholeTime Director after attaining age of 70 years for a period of three years and also for theappointment of Mr. Kartik Nayak as Joint Managing Director for a period of three years.
The Board has also revised the remuneration for both Mr. Diwakar Shetty and Mr. KartikNayak as recommended by the Nomination and Remuneration Committee.
The appointment/remuneration package of Mr. Diwakar Shetty Mr. Kartik Nayak and Mr.Praveen Mally require approval of the shareholders at the General Meeting hence form partof the Agenda for the 36th Annual General Meeting.
During the year under review the Board of Directors met four times.
The Independent Directors have submitted their declaration that they fulfill therequirements as stipulated in Section 149 (6) of the Companies Act 2013.
Pursuant to Clause VII (1) of Schedule IV of the Companies Act 2013 the IndependentDirectors had a separate meeting on 08-Feb -2016.
DIRECTORS' RESPONSIBILITY STATEMENT:
The Board based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors the reviews performed by Management and the relevant BoardCommittees including the Audit Committee it is of the opinion that the Company'sinternal financial controls were adequate and effective during the financial year 2015-16.
Accordingly pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:
1) In the preparation of the Annual Accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
2) 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;
3) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
4) The Directors had prepared the Annual Accounts on a Going Concern basis;
5) The Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
6) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Pursuant to the provisions of the Companies Act 2013 SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015 and Listing Agreement with the stock exchangethe Board has carried out an annual performance evaluation of its own performance and ofthe directors individually as well as the evaluation of the working of its Audit andNomination & Remuneration Committees. The manner in which the evaluation has beencarried out has been explained in detail in the Corporate Governance Report which formspart of this Annual Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE:
During the year the company has not given any loans or guarantees covered under theprovisions of Section 186 of the Companies Act 2013.
The details of the investments made by company are given in the notes to the financialstatements.
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 MGT 9 as apart of this Annual Report (Annexure - I).
In line with the requirements of Listing Agreements and Accounting Standards yourcompany has made additional disclosures in respect of Related Party Transactions andSegment Reporting in notes to accounts.
In terms of the provision of Section 73 74 & 76 of the Companies Act 2013 readwith the Companies (Acceptance of Deposits) Rules 2014 your company has not accepted/renewed any fixed deposits from the public during the year under review.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy technology absorption Foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure- III and is attached to this report.
M/s. Pal and Shanbhogue Chartered Accountants who was appointed as Statutory Auditorsof the Company at the AGM held on 29 September 2014 for a period of three financial yearsi.e. upto the conclusion of 37 AGM to be held in the year 2017. As required by theprovisions of the Companies Act 2013 their appointment should be ratified by memberseach year at the AGM. Accordingly requisite resolution forms part of the notice conveningthe AGM.
The Company has appointed M/s Vishwanath Bhat & Co. Cost Auditors to conduct theCost Audit of the Company for the Financial Year 2015-16.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s. SNM &Associates Company Secretaries was appointed to undertake the Secretarial Audit. TheReport of the Secretarial Audit for the year ended 31st March 2016 is attached to theBoard Report (Annexure - II).
There was no qualification reservations or adverse remarks made either by theStatutory Auditors or by the Practicing Company Secretary in their respective reports andtheir report is annexed to this Report as annexure.
REPORT ON CORPORATE GOVERNANCE:
Your Company has taken adequate steps to adhere to all the stipulations laid down inRegulation 27 of SEBI (Listing Obligations and Disclosure Requirements). A report oncompliance of the code is annexed herewith (Annexure - VII).
Certificate from the Statutory Auditors of the company confirming the compliance withthe conditions of Corporate Governance as stipulated under Regulation 27 of SEBI(LODR)Regulation 2015 is attached to this report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions. All contracts /arrangements / transactions with related parties are placed before the Audit Committee asalso the Board as may be required for approval.
The policy on materiality of related party transactions and also on dealing withrelated party transactions as approved by the Audit Committee and Board of Directors isdisplayed on the company's website www.shetrongroup.com.
Accordingly particulars of contracts or arrangements with related parties referred toin Section 188(1) along with the justification for entering into such contract orarrangement in Form AOC-2 does not form part of the report.
Details of contracts / arrangements / transactions with related parties are given inthe notes to the financial statements.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
Adhering to the provisions of Companies Act relevant amounts which remained unpaid orunclaimed for a period of Seven years have been transferred by the Company from to timeto time on due dates to the Investor Education and Protection Fund.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The Company has been employing women employees in various cadres within its office andfactory premises. The Company has in place a policy against Sexual Harassment in line withthe requirements of the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013. Internal Complaint Committee is set up at shop floor level toredress any complaints received. All employees are covered under the policy. There was nocompliant received from any employee during the financial year 2015-16 and hence nocomplaint is outstanding as on 31.03.2016 for redressal.
HEALTH SAFETY AND ENVIRONMENT PROTECTION
Your Company has complied with all applicable environment laws and labour laws. TheCompany has been taking all the necessary measures to protect the environment and maximizeworker protection and safety. The Company's policy require conduct of operation in such amanner so as to ensure safety of all concerned compliance of environment regulations andpreservation of natural resources.
DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION) RULES 2014:
Disclosures required under section 197 of the Companies Act 2013 read with rule 5 ofthe Companies (Appointment & Remuneration) Rules 2014 have been annexed as "AnnexureVI".
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report as required is annexed as Annexure IV.
Your Directors wish to place on record their sincere thanks to Bankers BusinessAssociates Consultants various Government Authorities and employees at all levels in theCompany for their continued support extended to your Companies activities during the yearunder review. Your Directors also acknowledges gratefully the shareholders for theirsupport and confidence reposed on your Company.
| ||By the order of the Board |
| ||For Shetron Limited |
|Place : Bangalore || |
|Date : 16th May 2016 || |
| ||Diwakar S Shetty |
| ||Chairman |