TO THE MEMBERS:
Your Directors have pleasure in presenting their Twenty-Fourth Annual Report and theAudited Financial Statements for the year ended on 31st March 2019 togetherwith the Independent Auditors' Report thereon.
(Rs. In Lakh)
|Particulars ||Current Year Ended 31-03-2019 ||Previous Year Ended 31-03-2018 |
|Revenue from operations ||26970.23 ||25269.76 |
|Other income ||30.35 ||24.69 |
|Total income ||27000.58 ||25294.45 |
|Expenses || || |
|Operating expenditure ||22523.03 ||22835.74 |
|Depreciation and amortization expenses ||700.47 ||646.25 |
|Total expenses ||23223.50 ||23481.99 |
|Profit before finance cost and tax ||3777.08 ||1812.46 |
|Finance costs ||515.13 ||565.07 |
|Profit before tax (PBT) ||3261.95 ||1247.39 |
|Current tax expenses ||849.45 ||257.44 |
|Deferred tax expenses ||99.64 ||105.99 |
|Exceptional item ||- ||58.55 |
|Profit for the year ||2312.86 ||825.41 |
|Total comprehensive income for the year ||2314.00 ||827.65 |
|Balance brought forward from previous year ||9559.33 ||8780.05 |
|Amount Available for Appropriation ||11873.33 ||9607.69 |
|Appropriations: || || |
|Proposed Dividend (Including Tax) ||48.36 ||48.36 |
|Balance carried to Balance Sheet ||11824.97 ||9559.33 |
Your Directors have pleasure in recommending a modest dividend of 7.50% i.e. Rs. 0.75per Equity Share (previous year 7.50% i.e. Rs. 0.75) on 5356700 Equity Shares of Rs. 10/-each for the year 2018-2019.
Management Discussion and Analysis:
Attached report on Management Discussion and Analysis which is forming part of thisreport adequately deals with the operations as also current and future outlook of theCompany.
Pursuant to Regulations of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a separate report titled Corporate Governance is attached to thisAnnual Report.
The repayment of due loan installments and interest payment is being regularly done.
Subsidiary Company Joint Venture and Consolidated Financial Statements:
The Company's subsidiary Shree Samrudhi Industrial Papers Pvt. Ltd. has not yetcommenced any business.
As required by Section 129 (3) of the Companies Act 2013 and Regulation 33 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the ConsolidatedFinancial Statements for the year ended on 31st March 2019 prepared inaccordance with the relevant accounting standards as prescribed under Section 133 of theCompanies Act 2013 and the Auditors report there on are attached.
As required by first proviso of Section 129 (3) of the Companies Act 2013 and Rule 5of the Companies (Accounts) Rules 2014 the statement containing the salient features ofthe financial statements of the Company's subsidiary (Shree Samrudhi Industrial PapersPvt. Ltd.) and joint venture (Shree Samrat Pulp and Paper Pvt. Ltd.) in form AOC-1 isalso attached. The statement also provides the details of performance and financialposition of the said subsidiary and joint venture Companies.
Shareholders interested in obtaining a copy of the annual audited financial statementsof the subsidiary Company may write to the Company.
Directors and Key Managerial Personnel:
Mrs. Bela G. Shah Executive Director (DIN: 01044910) retires by rotation at theensuing Annual General Meeting and being eligible offers herself for re-appointment.
Your Board of Directors re-appointed Mr. Laxminarayan J. Garg (DIN: 00786976) asIndependent Director of the Company for second term of 5 (five) consecutive years witheffect from 1st April 2019. The necessary resolution for approval of hisre-appointment under Sections 149 152 and Schedule IV of the Companies Act 2013 is beingplaced before the Annual General Meeting for your consideration.
Your Board of Directors re-appointed Mr. Darshak B. Shah (DIN-00098897) as IndependentDirector of the Company for second term of 5 (five) consecutive years with effect from 1stApril 2019. The necessary resolution for approval of his re-appointment under Sections149 152 and Schedule IV of the Companies Act 2013 is being placed before the AnnualGeneral Meeting for your consideration.
Mr. Dhansukhlal G. Shah (DIN: 00377970) resigned and ceased as Non-executive Directorof the Company with effect from 25th March 2019. The Board places on recordits appreciation of the valuable services rendered by him during his long tenure as aDirector of the Company.
Extract of the Annual Return:
An extract of the Annual Return in Form MGT-9 for the year ended on 31stMarch 2019 pursuant to sub-section (3) of Section 92 of the Companies Act 2013 isannexed with this report.
Directors' Responsibility Statement:
In accordance with Section 134(5) of the Companies Act 2013 your Board of Directorsconfirms that:
(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) 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;
(c) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) The Directors had prepared the annual accounts on a going concern basis;
(e) The Directors had 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 applicable laws and that such systems were adequate and operating effectively.
Internal Financial Controls:
Your Company has in place adequate internal financial controls commensurate with thesize scale and complexity of its operation. Review of the internal financial controlsenvironment of the Company was undertaken during the year which covered verification ofentity level control process level control identification assessment and definition ofkey business processes and analysis of risk control matrices etc. During the period underreview effectiveness of internal financial controls was evaluated. Reasonable FinancialControls are operative for the business activities of the Company and no material weaknessin the design or operation of any control was observed. The internal financial controlswith references to the Financial Statements are commensurate with the size and nature ofthe business of the Company.
Statement on Declaration Given by Independent Directors u/s. 149(6):
Every Independent Director has given declaration that he meets the criteria ofindependence as provided in Section 149 (6) and Schedule IV of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Company's Policy on Directors' Appointment and Remuneration:
Pursuant to provisions of Section 134 (3) read with Section 178 of Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors on recommendation of the Nomination and Remuneration Committee has adopted apolicy for appointment and payment of remuneration of Directors / KMP(s) and other seniorexecutives of the Company. The policy is placed on website of the Company atwww.shreeajit.com.
The Nomination and Remuneration Committee also recommends appointment and remunerationof Directors / KMP(s) and other senior executives of the Company based on expertise andexperience. The Committee also ensures that the remuneration is sufficient to attractretain and motivate best managerial talents.
Particulars of Loans Guarantees or Investment u/s. 186:
During the year the Company has not given any loans or guarantees or made anyinvestments exceeding limit under Section 186 of Companies Act 2013.
Particulars of Contract or Arrangement Regarding Related Party u/s. 188:
During the Financial Year 2018-19 the Company has entered into contract / arrangement /transaction with related parties under Section 188 of the Companies Act 2013 details ofwhich as required to be provided under Section 134(3)(h) of the Companies Act 2013 readwith Rule (8)(2) of the Companies (Accounts) Rule 2014 are disclosed in Form No. AOC-2 asannexure which forms part of this report. The policy on materiality of related partytransaction is placed on website of the Company.
Material Changes and Commitments Affecting Financial Position of the Company:
There are no material changes and commitments affecting the financial position of theCompany which have occurred between end of the financial year of the Company and the dateof Directors' Report.
Conservation of Energy Technology Absorption and Foreign Exchange Earning and Outgo:
The relevant information is given as an annexure to this report.
Change in Nature in Business:
There has been no change in the nature of Business of the Company during the year.
Transfer of Amounts to any Reserve:
The Company was not required to transfer any amount to any reserve during the year.
CSR Committee and Implementation of CSR Projects:
Pursuant to the provisions of Section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility) Rules 2014 and Schedule VII as amended fromtime to time a Corporate Social Responsibility (CSR) Committee of the Board is in placecomprising of the Managing Director and two Independent Directors of the Company. The saidCommittee has been entrusted with the responsibility of formulating and recommending tothe Board a Corporate Social Responsibility Policy (CSR Policy) from time to timeindicating the activities to be undertaken by the Company monitoring the implementationof the framework of the CSR Policy and recommending the amount to be spent on CSRactivities. The Annual Report for the year 2018-19 on CSR activities is annexed with thisreport. The detailed CSR policy is placed on the website of the Company.
Establishment of Vigil Mechanism:
The Company has established a vigil mechanism for employees to report concerns aboutunethical behaviour actual or suspected fraud or violation of the code of conduct andethics of the Company. It provides for adequate safeguard against the victimization ofemployees who avail the mechanism and are allowed direct access to the Chairman of theAudit Committee and Ethics Counselor of the Company. The whistle blower policy is placedon the website of the Company.
Pursuant to the provisions of Section 134 (3) (p) 149(8) and Schedule IV of theCompanies Act 2013 and Regulation 17 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 as amended from time to time annual performanceevaluation of the Directors as well as of the Audit Committee Nominations andRemuneration Committee Stakeholders Relationship Committee and Corporate SocialResponsibility (CSR) Committee of the Board has been carried out.
The performance evaluation of the Independent Directors was carried out by the entireBoard and the Performance Evaluation of the Chairman and Non-Independent Directors wascarried out by the Independent Directors.
Particulars of Remuneration:
The information required under Section 197 of the Companies Act 2013 and Rules madethere under in respect of employees of the Company is as follows:
1. (i) The ratio of the remuneration of each Director to the median remuneration of theemployees of the Company for the financial year:
|Director's Name ||Ratio to median remuneration |
|Mr. Gautam D. Shah ||94.62 |
|Mrs. Bela G. Shah ||94.78 |
Note: Non Executive/Independent Directors are not paid any remuneration except thesitting fees for attending meetings of the Board and Committees thereof.
(ii) The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary or Manager if any in the financial year:
|Director's/CFO/CEO/CS/Manager name || |
% Increase in remuneration
|Mr. Gautam D. Shah CMD ||79.36 |
|Mrs. Bela G. Shah Executive Director ||151.54 |
|Mr. Rakesh Kumar Kumawat Company Secretary ||5.02 |
Note: Non Executive/Independent Directors are not paid any remuneration except thesitting fees for attending meetings of the Board and Committees thereof.
(iii) Percentage increase in the median remuneration of employees in the financialyear: 11.91%
(iv) The number of permanent employees on the rolls of the Company: 263
(v) Average percentile increase already made in the salaries of employees other thanmanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration;
The average increase in salaries of employees other than managerial personnel in2018-19 was 6.95%. Percentage increase in the managerial remuneration for the year was106.16% KMP salary increase is decided based on the individual's and Company'sperformance.
(vi) Affirmation that the remuneration is as per the remuneration policy of theCompany: YES
2. Statement pursuant to Section 197 (12) of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014for the year ended 31st March 2019:
|Name and Age ||Mr. Gautam D. Shah 54 years ||Mrs. Bela G. Shah 54 years |
|Designation ||Chairman and Managing Director ||Executive Director |
|Nature of Employment ||Contractual ||Contractual |
|Gross Remuneration ||Rs. 18032692/- (Includes Salary Commission and Provision for leave encashment and gratuity) ||Rs. 18063463/- (Includes Salary Commission and Provision for leave encashment and gratuity) |
|Qualification and Experience ||BE Civil / 31 years ||Bachelor in Science / 18 years |
|Date of Joining ||01-07-2005 ||07-02-2015 |
|Previous Employment ||N.A. ||N.A. |
|Percentage of equity shares held ||19.88% ||7.23% |
|Relation with Other Directors ||Mrs. Bela G. Shah - Wife ||Mr. Gautam D. Shah - Husband |
The Company is addressing various risks impacting the paper industry. Some of the risksto which the Company is exposed are as under.
The Company's policy is to actively ma nage its foreign exchange risks.
Commodity price risks:
The Company proactively manages risks of price fluctuation of raw materials throughforward booking and inventory management. The Company's reputation for quality productmitigates the impact of price risk on finished goods.
The Company is exposed to risks attached to various statutes and regulations. TheCompany is mitigating these risks by engaging competent person in each functional area andthrough regular review of legal compliances carried out from time to time.
Human resources risks:
Retaining the existing talents and attracting new talents are major risks. These risksare mitigated by regular interaction with concerned employees and providing congenialworking conditions.
Disclosure under Sexual Harassment of Women at Work Place (Prevention Prohibition andRedressal) Act 2013:
There was no complaint received from any woman employee during the financial year2018-19 and hence no complaint is outstanding as on 31st March 2019 forredressal. The Company has complied with the provisions of the constitution of InternalCompliant Committee under Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
The company has not accepted any deposit from the public within the meaning of ChapterV of the Companies Act 2013 and rules there under.
Significant and Material Orders Passed by the Regulators:
During the financial year under review no significant and material orders were passedby the regulators or courts or tribunals that would impact the going concern status of theCompany and its future operations.
The notes on financial statements referred to in the Auditors Report areself-explanatory and do not require further explanation.
Your Company has at the 21st Annual General Meeting of the Company held on30h August 2016 appointed M/s. Deloitte Haskins & Sells LLP CharteredAccountants Mumbai (Firm Registration Number-117366W/W-100018) as Statutory Auditors ofthe Company to hold office up to the conclusion of the 26th Annual GeneralMeeting at a remuneration as may be fixed by the Managing Director in consultation withthe said Auditors.
Particulars of Frauds if any Reported under Sub-Section (12) of Section 143 other thanthose which are Reportable to the Central Government :
No frauds have been reported by the Auditors under sub-section (12) of Section 143 ofthe Companies Act 2013.
Secretarial Audit Report:
Pursuant to Section 204 of Companies Act 2013 your Company had appointed Mr. V. C.Khambhata Practicing Company Secretary (CP No. 6177) as Secretarial Auditor to conductthe Secretarial Audit of the Company for the Financial Year 2018-19. The report ofSecretarial Auditor is annexed with this report. The report does not contain anyqualification reservation or adverse remark.
The Company has complied with the Secretarial Standards issued by the Institute ofCompany Secretaries of India in respect of Meetings of Board and Shareholders.
Maintenance of Cost Records:
The Maintenance of cost records has not been specified by the Central Government underSection 148(1) of the Companies Act 2013.
The Board wishes to express its appreciation to the Bankers Shareholders CustomersSuppliers and Employees of the Company for their support during the year.
| ||FOR AND ON BEHALF OF THE BOARD OF DIRECTORS || |
|Place: Vapi ||Gautam D. Shah ||Bela G. Shah |
|Date: 28 May 2019 ||Chairman and Managing Director ||Executive Director and CFO |
| ||DIN:00397319 ||DIN:01044910 |