TO THE MEMBERS:
Your Directors have pleasure in presenting their Twenty-fifth Annual Report and theAudited Financial Statements for the year ended on 31" March 2020togetherwith theIndependent Auditors* Report thereon.
Financial Results: (Rs. in Lakh)
|Particulars ||Current Year Ended 31-03-202 0 ||Previous Year Ended 31-03-2019 |
|Revenue from operations ||24041.18 ||26970.23 |
|Other income ||73.15 ||30.35 |
|Total income ||24114.33 ||27000.58 |
|Expenses || || |
|Operating expenditure ||20607.35 ||22523.03 |
|Depreciation and amortization expenses ||756.38 ||700.47 |
|Total expenses ||21363.73 ||23223.50 |
|Profit before finance cost and tax ||2750.60 ||3777.08 |
|Finance costs ||440.44 ||515.13 |
|Profit before tax (PBT) ||2310.16 ||3261.95 |
|Current tax expenses ||504.54 ||849.45 |
|Deferred tax expenses ||(159.43) ||99.64 |
|Exceptional item ||- ||- |
|Profit for the year ||1965.05 ||2312.86 |
|Total comprehensive income for the year ||1962.10 ||2314.00 |
|Balance brought forward from previous year ||11824.97 ||9559.33 |
|Amount Available for Appropriation ||13786.92 ||11873.33 |
|Appropriations: Proposed Dividend ||40.18 ||48.36* |
|Balance carried to Balance Sheet ||13746.74 ||11824.97 |
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 2019-20.
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 FinancialStatements:
The Company's subsidiaryShreeSamrudhi IndustrialPapers Private Limited 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 31" March 2020 prepared in accordancewith the relevant accountingstandards as prescribed underSection 133 of the Companies Act2013 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 PapersPrivate Limited) and joint venture (Shree Samrat Pulp and Paper Private Limited) in formAOC! is also attached. The statement also provides the details of performance andfinancialposition of the said subsidiary andjoint venture Companies.
Shareholders interested in obtaining a copy of the annual audited financial statementsof the subsidiary Company may write to the Company and provide email id.
D irectors and KeyManagerial Personnel:
In previous Annual GeneralMeeting Mr. LaxminarayanJ. Garg (DIN: 00786976) wasre-appointed as Independent Director of the Company for second term of5 (five) consecutiveyears with effect from 1" April 2019.
In previous Annual GeneralMeetingMr. Darshak B. Shah (DIN: 00098897) was re-appointedas Independent Director of the Company for second term of5 (five) consecutive years witheffect from 1" April 2019.
Your Board of Directors re-appointed Mrs. Bela G. Shah (DIN: 01044910) asWhole-timeDirector and ChiefFinancial Officer of the Company for a period of 3 (three) years w.e.f.77'1 February 2020. The necessary resolution for approval of her re-appointment is beingplaced before the Annual General Meeting for your consideration.
Mrs. Bela G. Shah Whole-time Director (DIN: 01044910) retires by rotation at theensuing Annual General Meeting and being eligible offers herself for re-appointment.
Ms. Devashri Gautam Shah (DIN: 08730963) was appointed as Additional Director(Non-executive) of the Company under Section 161 of the Companies Act 2013 by the Boardthrough circular resolution w.e.f. 30* March 2020 and she holds her office upto the dateof ensuing Annual General Meeting. The necessary resolution for approval of herappointment under section 152 of the Companies Act 2013 is being placed before the AnnualGeneral Meeting for your consideration.
Your Board of Directors re-appointed Mr. Gautam D. Shah (DIN: 00397319) as ManagingDirector of the Company fora period of 3 (three) years w.e.f. I" July 2020. Thenecessary resolution for approval of his re-appointment is being placed before the AnnualGeneral Meeting for your consideration.
The Company has received declaration from the Independent Directors that they meet thecriteria of independence as prescribed u/s 149(6) of the Companies Act 2013. In theopinion of the Board they fulfill the conditions for appointment/ re-appointment asIndependent Directors on the Board. Further in the opinion of the Board the IndependentDirectors also possess the amibutes of integrity expertise and experience as required tobe disclosed under Rule 8(5)(iiia) of the Companies (Accounts) Rules 2014.
All the Independent Directors have applied to Indian Institute of Corporare Affairs forinclusion of theirnames in the data bank and submitted the declaration in this regards tothe Company.
Extract of the AnnualReturn:
An extract of the Annual Return in FormMGT-9 for the year ended on 31'March 2020pursuant to sub-section (3) of Section 92 of the Companies Act 2013 is annexed with thisreport.
D irectors' ResponsibilityStatement:
In accordance with Section 134(5) ofthe 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 ofaffairs 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 forsafeguardingthe assets ofthe 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 dowwn 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 thatsuch 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 operations. 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 ofrisk 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 onDeclaration Given bylndependentDirectors:
Every Independent Director has given declaration that he meets the criteria ofindependence as provided in Section 149 (6) andSchedule IV of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Company's Policy on Directors' Appoint ment 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 to Directors/ IKMP(s) and other SeniorExecutives ofthe Company. The policy is placed on website of the Companyatwww.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 chat the remuneration is sufficient to attractretain and motivate best managerial talents.
Particulars of Loans Guarantees orInvestment:
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 orArrangement Regarding Related Party:
During the Financial Year 2019-20 the Company has entered into contract/ arrangement/transaction with related parties under Section 188 of the Companies Act 2013 detailsofwhich as required tobe provided under Section l34(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 Positionof 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 TechnologyAbsorption and ForeignExchange Earning and Outgo:
The relevant information is given as an annexure to this report.
Change in Nature of Business:
There has been no change in the narnre of Business of the Company during the year.
Transfer of Amounts to any Reserve;
The Company was not required co transfer any amount to any reserve during the year.
CSR Committee andImplementation of CSRProjects:
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 2019-20 on CSR activities is annexed with thisreport. The detailed CSR policy is placed on the website of the Company.
Establishment of VigilMechanism:
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 ofthe 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:
l. (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 ||63.33 |
|Mrs. BelaG.Shah ||65.89 |
Note: Non Executive/Independent Directors are not paidany 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 (Decrease) in remuneration |
|Mr. Gautam D. Shah CMD ||(25.51) |
|Mrs. Bela G. Shah Whole-time Director & CFO ||(22.63) |
|Mr. Rakesh Kumar Kumawat Company Secretary ||9.39 |
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: 11.30%
(iv) The number of permanent employees on the rolls of the Company: 250
(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 in2019-20 was 10.19%. Percentage decrease in the managerial remuneration for the year was23.53%. KMP salary increase/decrease 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 31" March 202 0:
|Name and Age ||Mr. Gautam D. Shah 55 years ||Mrs. Bela G. Shah 55 years |
|Designation ||Chairman and Managing Director ||Whole-time Director & CFO |
|Nature of Employment ||Contractual ||Contractual |
|Gross Remuneration ||Rs. 134.33 lakh (Includes salary and provision for leave encashment and gratuity) ||Rs. 139.75 lakh (Includes Salary and Provision for leave encashment and gratuity) |
|Qualification and Experience ||BE Civil / 32 years ||Bachelor in Science / 19 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 Ms. Devashri Gautam Shah - Daughter ||Mr. Gautam D. Shah - Husband Ms. Devashri Gautam Shah - Daughter |
The Companyis 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 manage 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 qualityproductmitigates 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 ineach functional area andthrough regular review oflegalcompliances carried out from time to time.
Human resources risks:
Retaining the existing talents and attracting new talents are major risks.These risksare mitigated by regularinteraction with concerned employees and providing congenialworking conditions.
Disclosure under SexualHarassment of Women at Work Place (Prevention Prohibition andRedressal) Act 2013:
There was no complaint received from any woman employee during the financial year2019-20 and hence no complaint is outstanding as on
31"March 2020 for redressal The Company has complied with the provisions of theconstitution oflnternal Compliant Committee under Sexual Harassment ofWomen at Workplace(Prevention Prohibition and Redressal) Act 2013.
The company has not accepted anydepositfrom the public within the meaning of ChapterVof the Companies Act 2013 and rules there under. Significant andMaterial Orders Passedby 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 21" Annual General Meeting of the Company held on 30''August 2016 appointed M/s. Deloitte Haskins & Sells LLP Chartered AccountantsMumbai (Firm Registration Number-117 366W/W-100018) as Statutory Auditors of the Companyto hold office up to the conclusion of the 26* Annual General Meeting at a remuneration asmay be fixed by the Managing Director in consultation with the said Auditors and they arecontinuing in office.
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 2019-20. The report ofSecretarial Auditor is annexed withthisreport.The report does not contain anyqualification reservation or adverse remark.
The Company has complied with the Secretarial Standards issued by the Institute ofCompany Secretaries oflndia in respect of Meetings of Board and Shareholders.
Maintenance of CostRecords:
The Maintenance of cost records has not been specified by the Central Government underSection 148(1) of the Companies Act 2013. Acknowledgement:
The Board wishes to express its appreciation to the Bankers Shareholders CustomersSuppliers and Employees of the Company for their support during the year.
| ||Gautam D. Shah ||BelaG. Shall |
|Place:Vapi ||Chairman and Managing Director ||Whole-time Director and CFO |
|Date: 26* June 2020 ||DIN:00397319 ||DIN:01044910 |