Servalakshmi Paper Ltd.
|BSE: 533401||Sector: Industrials|
|NSE: SERVALL||ISIN Code: INE431L01016|
|BSE 00:00 | 22 May||Servalakshmi Paper Ltd|
|NSE 05:30 | 01 Jan||Servalakshmi Paper Ltd|
|BSE: 533401||Sector: Industrials|
|NSE: SERVALL||ISIN Code: INE431L01016|
|BSE 00:00 | 22 May||Servalakshmi Paper Ltd|
|NSE 05:30 | 01 Jan||Servalakshmi Paper Ltd|
Your Directors hereby present the 11th Annual Report along with the audited accountsfor the year ended 31st March 2016.
The summarized financial results are as under :
During the year ended 31st March2016 the Company recorded a total turnover of Rs.50Crores as against Rs. 180 Cores achieved during the previous year. Your Directors expectto improve the production and sales in the forthcoming year 2016-17.
TRANSFER TO RESERVES
Due to losses the Company is unable to transfer any amount to its Reserves.
No dividend has been declared in the financial year under review having regard to thelosses incurred by the Company during the year.
The paid-up capital of the Company as at 31.03.2016 stood a t Rs.431136560/-. Duringthe year under review the Company has not made any fresh issue of shares.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
The Company has not declared any dividend in the past and hence transfer of unclaimedDividend to Investor Education and Protection fund does not arise.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return pursuant to the provisions of Section 92 of the CompaniesAct 2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014in form MGT-9 is furnished in Annexure A' and is attached to this report.
BOARD / COMMITTEE MEETINGS CONDUCTED DURING THE PERIOD UNDER REVIEW
During the year under review 4 Meetings of the Board of Directors 4 Meetings of theAudit Committee 1 Meeting of the Nomination and Remuneration Committee and 4 Meetings ofthe Stakeholders Relationship Committee were held. Further details of the same have beenenumerated in the Corporate Governance Report annexed herewith.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Director's Responsibility Statement it is hereby confirmed that -
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures from those standards.
(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 at the end of the financial year and ofthe loss of the company for that period.
(c) the Directors have taken Proper and sufficient care for maintenance of adequateaccounting records in accordance with the provisions of the Companies Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts on a going concern basis;
(e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all the applicable laws and such systems were adequate and operating effectively;
DETAILS IN RESPECT Of Frauds REPORTED By AUDITORS UNDER SECTION 143(12) Of THECompanies ACT 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
There were no instances of frauds identified or reported by the Statutory Auditorsduring the course of their audit pursuant to Section 143(12) of the Companies Act 2013.
DECLARATION OF INDEPENDENT DIRECTORS
The company has received declarations from all the independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and Regulation 25 of the SEBI(LODR) Regulations 2015.
COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT PAYMENT OF REMUNERATION ANDOTHER MATTERS PROVIDED UNDER SECTION 178(3) OF THE COMPANIES ACT 2013
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for fixing and revising remuneration of Directors Key ManagerialPersonnel Senior Management Personnel and employees of the Company. The Remunerationpolicy of the Company is annexed herewith as Annexure B and can also beaccessed on the Company's website at the link http://www.servalakshmi.in/Facilities.html.
COMMENTS ON AUDITORS REPORT:
With regard to the observations of the Statutory Auditors on the complete erosion ofthe net worth your directors are of the view that this will not have any adverse effectsince concerted efforts are being taken by the management to tide over the situation.
In relation to the observation by the Statutory Auditors on delays in payment ofprovident fund employee's state insurance income - tax sales - tax duty of customsduty of excise value added tax cess and other statutory dues to the appropriateauthorities the Board is of the view that with improved business scenario the Companywill be able to meet its obligations in time. The Board is hopeful and committed to theirlevel best to streamline the same in future.
With respect to the observations made by the Secretarial Auditor we wish to statethat due to the prolonged losses incurred by the Company and financial strain it was notpossible to comply with certain requirements of the Companies Act 2013ListingAgreements SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 andthe Labour and Environmental Laws as mentioned by the Secretarial auditor in his report.The Directors are taking the necessary steps to comply with the requirements during thecurrent year.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
There were no loans guarantee or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of every contract and arrangement entered into by the Company withrelated parties referred to in sub- section (1) of section 188 of the Companies Act 2013including certain arm's length transactions under third provision thereto are disclosed inFrom No.AOC- 2 and forms part of this Report.
The policy on Related Party Transactions as approved by the Board of Directors of theCompany has been uploaded on the Company's website and may be accessed through the link atwww.servalakshtmi.in/Facilities. html.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on foreign exchange earnings and outgo technology absorptionconservation of energy stipulated under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as AnnexureC'.
RISK MANAGEMENT PLAN IMPLEMENTATION
The Company has formed a committee comprising of senior management one level below theManaging Director to take stock of all risks affecting the Company the existing controlsand mitigation measures. The Board has taken note of the high level risks the controlscurrently in place and the mitigating measures to be undertaken and accordingly providedcertain suggestions for mitigating the risks.
DETAILS OF POLICY DEvELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provision are not applicable.
ANNUAL EVALUATION OF THE BOARD ON ITS OWN PERFORMANCE AND OF THE INDIVIDUAL DIRECTORSAND COMMITTEES
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance the directors individually aswell as the evaluation of the working of its Committees. The manner in which theevaluation has been carried out has been explained in the Corporate Governance Report.
DIRECTORS & KEY MANAGERIAL PERSONNEL
During the year under review Mr.B.Sriramulu resigned from the directorship of theCompany with effect from 01.07.2015. The Board records its appreciation for hisassociation with the Company. Subsequently Mrs.Nithya Nirupama resigned from theDirectorship of the Company with effect from 13.07.2015.The Board records its appreciationfor her association with the Company.
Mr.S.Srinivasaragavan resigned from the directorship of the Company with effect from07.10.2015. The Board records its appreciation for his association with the Company.
As per the provisions of the Companies Act 2013 Mr. Y Shivaram Prasad Director ofthe Company retires by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment. The Board recommends his re-appointment.
The Board of Directors have re - appointed Mr.Y.Shivaram Prasad as Managing Director ofthe Company for a period of 3(three) years with effect from 1st January 2017 on the termsand conditions as set out of the notice convening the AGM.The necessary resolution in thisregard has been proposed for the approval of the members at the ensuing AGM.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiaries Joint ventures or Associate Companies.
During the year the Company did not accept or renew any fixed deposits and no fixeddeposits remained unclaimed with the Company as on 31st March 2016.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE
There is no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and company's operation in future.
AUDITORS STATUTORY AUDITORS
M/s. S.Krishnamoorthy &Co Chartered Accountants Coimbatore were appointed as theStatutory Auditors of the company at the Annual General Meeting held on 26th September2014 for a period of three years subject to ratification by the Shareholders at everyconsequent Annual General Meeting. The Company has received a letter pursuant to Section139 and 141 of the Companies Act 2013 from them to the effect that they are eligible tocontinue as the Statutory Auditors of the Company.
Necessary resolution for ratification of appointment of the said Auditors is includedin the Notice of Annual General Meeting for seeking approval of members.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr.G.Soundararajan Company Secretaries in Practice to undertake the SecretarialAudit of the Company. The report of the Secretarial Audit report is annexed herewith as AnnexureD.
The Board of Directors at their meeting held on 30th May 2016 have appointedMr.S.Thangavelu Cost Accountant as the Cost Auditor of the Company for the financial year2016-17.Pursuant to Section 148 of the Companies Act 2013 read with Rule 14 of theCompanies(Accounts)Rules 2014 the remuneration payable to the Cost Auditor of theCompany is subject to the ratification by the shareholders at the Annual General Meeting.The Board recommends their remuneration.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The Company continues to enjoy cordial relationships with its employees at all levels.The total strength of employees as on 31st March 2016 was 81.
PARTICULARS OF EMPLOYEES
Details pursuant to Section 197(12) of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of thisReport as Annexure E.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a policy on Sexual Harassment of Women at Workplace in linewith the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. An Internal Complaints Committee has been set up toredress complaints received. All employees (permanent contractual temporary trainees)are covered under this policy. No complaints were received from any employee or thirdparties during the financial year 2015-16.
A report on corporate governance is annexed and forms part of this report. The Companyhas complied with the conditions relating to corporate governance as stipulated inRegulation 27 of SEBI (Listing Obligations & Disclosure Requirements) Regulations2015.
Audit Committee is in existence in accordance with the provisions of Section 177 of theCompanies Act 2013. Kindly refer to the Section on Corporate Governance under the headAudit Committee' for matters relating to the composition meetings and functions ofthe Committee. The Board has accepted the Audit Committee recommendations during the yearwhenever required and hence no disclosure is required under Section 177(8) of theCompanies Act 2013 with respect to rejection of any recommendations of Audit Committee byBoard.
WHISTLE BLOWER POLICY
The Company has a Whistle Blower policy to deal with unethical or improper practice orviolation of Company's Code of Business Conduct or any complaints regarding accountingauditing internal controls or disclosure practices of the Company. The Policy gives aplatform to the Whistle Blower to report the complaints on the above mentioned practicesto the Managing Director or Director (HR). Although the complainant is not expected toprove the truth of an allegation the complainant aims to demonstrate that there aresufficient grounds for concern and that it is not done as a malicious act against anindividual. The Audit Committee of the Board reviews the Complaints received redressedobjected withdrawn and dismissed for every quarter in their meeting. The Whistle Blowerpolicy is available in the website of the Company at the following addresshttp://www.servalakshmi.in/ Facilities.html.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has adequate internal control systems to monitor business processesfinancial reporting and compliance with applicable regulations. The systems areperiodically reviewed for identification of control deficiencies and formulation of timebound action plans to improve efficiency at all the levels. The Audit committee of theBoard constantly reviews internal control systems and their adequacy significant riskareas observations made by the internal auditors on control mechanism and the operationsof the Company and recommendations made for corrective action through the internal auditreports. The committee reviews the statutory auditors' report key issues significantprocesses and accounting policies.
The Directors confirm that the Internal Financial Controls (IFC) are adequate withrespect to the operations of the Company. A report of Auditors pursuant to Section143(3)(i) of the Companies Act 2013 certifying the adequacy of Internal FinancialControls is annexed with the Auditors Report.
Your Company has in place the regulations for preventing and regulating InsiderTrading as has adhered to the Code of Conduct and Business Ethics by which the shareholderis treated on par with an employee on the availability of information about the Company;
Your Company regularly intimates the shareholders (through quarterly newsletters) on the performance of the company even though it is not mandatory;
Your Company has been prompt and regular in its replies to your queries receivedby them;
Your Company also replies within the stipulated time to all legal and statutoryauthorities.
The custodial charges and listing fees are promptly paid by the Company to thedepositories and the stock exchange.
Your Directors thank the shareholders customers suppliers bankers and allstakeholders for their continued support during the year. Your Directors also place onrecord their appreciation of the contributions made by employees at all levels towards thegrowth of the company.