To the Members
The Directors of your Company are pleased to present the 47th Annual Reporttogether with the Audited Financial Statements for the year ended on March 31 2019.
The financial performance of the Company for the year ended on March 31 2019 issummarised below:
(Rs. in Lakhs)
| ||2018-19 ||2017-18 |
|Revenue from Operations (Net) ||14261.24 ||13665.98 |
|Profit/(Loss) before exceptional items and tax ||597.06 ||(376.14) |
|Exceptional items ||- ||539.83 |
|Profit before tax ||597.06 ||163.69 |
|Less: Tax expense ||146.84 ||101.85 |
|Profit for the year ||450.22 ||61.84 |
|Other Comprehensive Income ||44.45 ||13.85 |
|Total Comprehensive Income ||494.67 ||75.69 |
During the year under review the revenue from operations was Rs. 14261.24 lakhsagainst Rs. 13665.98 lakhs in the last financial year. The Company has earned profitbefore tax of
Rs. 597.06 lakhs against Rs. 163.69 lakhs in last year. The performance of the Companyhas been improved as a result of increase in the selling price of major finished producti.e. newsprint paper during some quarters of the year without having corresponding changein the cost of raw material. Further your directors are hopeful for better performance inthe coming years.
The Directors have decided not to recommend any dividend for the year under review andplough back the profits to increase the wealth of the shareholders.
The paid-up Equity Share Capital as on March 31 2019 was Rs.1352.17 lakhs. During theyear under review the Company has not issued any shares with differential voting rightssweat equity shares and equity shares under Employees Stock Option Scheme.
LISTING ON STOCK EXCHANGES
The Equity Shares of the Company are listed on Bombay Stock Exchange. The Company'sdelisting application with Calcutta Stock Exchange is pending since long.
During the year under review the Company has not accepted any public deposit withinthe meaning of Chapter V of the Companies Act 2013 (the Act') and rules made thereunder.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of Annual Return in Form MGT-9 as requiredunder Section 92 of the Act is annexed herewith as Annexure-A' and is alsoavailable on the Company's website: www.skpmil.com at the link:http://www.skpmil.com/pagepdf/1565263276.pdf
DIRECTORS & KEY MANAGERIAL PERSONNEL
During the year the Company has regularized the appointment of Mrs. Rakhi Verma (DIN:07995132) as a Woman Director at the Annual General Meeting held on September 28 2018 whowas appointed as an Additional Director on November 18 2017.
Pursuant to the terms of appointment the office of Mr. Narendra Kumar Pasari asManaging Director will expire on December 31 2019. As recommended by the Nomination andRemuneration Committee the Board has reappointed Mr. Narendra Kumar Pasari as ManagingDirector (Key Managerial Personnel) to hold office with effect from January 1 2020 for aperiod of 3 years and have also revised his remuneration on the recommendation of theNomination and Remuneration Committee subject to the approval of the members. Aresolution in this regard is contained in the notice of the Annual General Meeting.
As per the provisions of Regulation 17 (1A) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 as amended ["SEBI (LODR)Regulations"] approval of the shareholders by way of a special resolution isrequired for continuation of directorship of the non-executive directors of the Companywho have attained the age of 75 years. Our non-executive Director Mr. BishwanathPasari have attained the age of 75 years and the Board has approved the continuation oftheir directorship subject to the passing of special resolution by the shareholders. He isin good physical condition and of sound and alert mind and the Board is confident abouthim being able to function and discharge his duties in an able and competent manner.Considering his seniority expertise and vast experience which has benefited the Companyimmensely the Board recommends his continuation as director of the Company.
In accordance with the provisions of the Act and Articles of Association of theCompany Mrs. Rakhi Verma (DIN: 07995132) Non-Executive Director of the Company retiresby rotation and being eligible offers herself for re-appointment at the ensuing AnnualGeneral Meeting.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company as on March 31 2019 are: Mr. Narendra Kumar Pasari Managing Director Mr.Sanjiv Kumar Agarwal Chief Financial Officer and Mrs. Sonam Katyal CompanySecretary.
The information on the particulars of Director eligible for appointment in terms ofRegulation 36(3) of SEBI (LODR) Regulations has been provided in the notes to the noticeconvening the Annual General Meeting.
Declaration by Independent Directors
Pursuant to the provisions of section 149(6) of the Act and Regulation 16(1)(b) of SEBI(LODR) Regulations all Independent Directors have given declarations that they meet thecriteria of independence.
To comply with the provisions of Section 134 (3)(p) of the Act and the rules madethereunder and Regulation 17(10) of SEBI (LODR) Regulations the Board has carried outthe annual performance evaluation of the Directors individually including the IndependentDirectors (wherein the concerned director being evaluated did not participate) Board as awhole and following Committees of the Board of Directors: i) Audit Committee; ii)Nomination and Remuneration Committee; iii) Stakeholders' Relationship Committee; and iv)Corporate Social Responsibility Committee.
The manner in which the annual performance evaluation has been carried out is explainedin the Corporate Governance Report. Board is responsible to monitor and review Directors'Evaluation framework.
Further to comply with Regulation 25 (4) of SEBI (LODR) Regulations IndependentDirectors also evaluated the performance of Non-Independent Directors and Board as a wholeat a separate meeting of Independent Directors.
To comply with the provisions of Section 178 of the Act read with Rules made thereunderand Regulation 19 of SEBI (LODR) Regulations the Company's Remuneration Policy forDirectors Key Managerial Personnel and Senior Management is uploaded on the website ofthe Company at http://www.skpmil.com/pagepdf/1565260000.pdf
During the year Fourteen Board Meetings and One Independent Directors' Meeting wereheld the details of which are given in the Corporate Governance Report. The provisions ofAct and SEBI (LODR) Regulations were adhered to while considering the time gap between twomeetings.
Composition of Audit Committee
The composition terms of reference etc. of the Audit Committee is provided inCorporate Governance Report which forms part of this Annual Report. There have been noinstances of non-acceptance of any recommendations of the Audit Committee by the Boardduring the financial year under review.
CORPORATE SOCIAL RESPONSIBILITY
Your Company has a Corporate Social Responsibility Policy which is uploaded on thewebsite of the Company and can be accessed through the web link http://www.skpmil.com/pagepdf/1502951707.pdf
Annual report on CSR activities for the financial year 2018-19 as required underSection 134 and 135 of the Act read with Rule 8 of the Companies (Corporate SocialResponsibility Policy) Rules 2014 and Rule 9 of the Companies (Accounts) Rules 2014 isattached with this report as Annexure B'.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) read with Section 134(5) of the Actwith respect to Directors' Responsibility Statement it is hereby confirmed that:
i) in the preparation of the annual accounts for the year ended on March 31 2019 theapplicable accounting standards have been followed and there is no material departure fromthe same;
ii) the Directors have selected such accounting policies and applied consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the financial year ended on March 31 2019and of the profit of the Company for that period;
iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) the Directors have prepared the annual accounts on a going concern basis;
v) 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
vi) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES
Your Company does not have any subsidiary/joint venture/ associate company within themeaning of the Act.
CORPORATE DEBT RESTRUCTURING
The debts of the Company were restructured under Corporate Debt Restructuring (CDR)mechanism w.e.f. April 1 2009.
RISK MANAGEMENT POLICY
Your Company has a robust Risk Management Policy which identifies and evaluatesbusiness risks and opportunities. The Company recognizes that these risks need to bemanaged and mitigated to protect the interest of the stakeholders and to achieve businessobjectives. The risk management framework is aimed at effectively mitigating the Company'svarious business and operational risks through strategic actions.
INTERNAL FINANCIAL CONTROLS
Your Company has an effective internal control and risk-mitigation system which isconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations. The Audit Committee of the Board of Directors actively reviews theadequacy and effectiveness of the internal control systems and suggests improvements tostrengthen the same.
The future prospects of the Indian paper industry are positive due to the expectedsurge in demand in the huge domestic markets. The demand drivers and growth triggers havecome from a combination of factors such as continuous demand for education and literacyincreasing organised retail sector growth in eCommerce FMCG demand of qualitypackaging increment in demand of eco-friendly paper bags replacing plastic bags andcontinuously increasing demand of ready-to-eat food etc. Hence there is enormouspotential for the paper industry in the country.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO
Information on conservation of energy technology absorption foreign exchange earningsand outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 is attached with this report as Annexure-C'.
AUDITORS AND AUDITORS' REPORT Statutory Auditors
Members in their 43rd Annual General Meeting (AGM) held on September 292015 appointed M/s. Radheshyam Sharma & Co. Chartered Accountants (Firm RegistrationNo. 016172N) as Statutory Auditors of the Company to hold office till the conclusion ofthe 48th AGM of the Company subject to ratification by the members at everyAGM of the Company.
Pursuant to the notification issued by the Ministry of Corporate Affairs on May 7 2018amending Section 139 of the Act and the Rules framed thereunder the mandatory requirementfor ratification of appointment of Auditors by the Members at every AGM has been omitted.Accordingly the Notice of ensuing AGM does not include the proposal for seeking approvalof members for ratification of appointment of Statutory Auditors of the Company.
The Auditors' Report on Financial Statements of the Company for the Financial Year2018-19 does not contain any qualification reservation or adverse remark.
The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company in the year under review. The observations of Statutory Auditors and Notesto the Financial Statements are self-explanatory and do not call for any further comments.
In terms of the provisions of Section 148 and all other applicable provisions of theAct read with the Companies (Cost Records and Audit) Rules 2014 as amended from time totime the Board has on the recommendation of Audit Committee approved the appointment ofM/s Vijender Sharma & Co. Cost Accountants Delhi (Firm Registration No. 00180) tocarry out the cost audit of Company's records for the financial year 2019-20 at aremuneration of Rs. 75000/- (Rupees Seventy Five Thousand only) plus taxes at theapplicable rates and reimbursement of out of pocket expenses in connection with theaforesaid audit. The remuneration proposed to be paid to them requires ratification by themembers of the Company. In view of this your ratification for payment of remuneration toCost Auditors is being sought at the ensuing AGM.
The Cost Audit Report for the financial year ended on March 31 2018 has been filedunder XBRL mode within the stipulated time period.
Pursuant to the provisions of Section 204 of the Act and rules made thereunder theCompany has appointed M/s. BLAK & Co. Company Secretaries Delhi to conduct thesecretarial audit of the Company for the financial year ended on March 31 2019. TheSecretarial Audit Report submitted by them is annexed herewith as Annexure-D'. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.
M/s GAMS & Associates LLP Chartered Accountants performs the duties of internalauditors of the Company and their report is reviewed by the audit committee from time totime.
PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES UNDER SECTION 186 OF THEACT
During the year the Company has not granted any loans or given guarantees/securitiesor made investments under section 186 of the Act. The earlier investments made by theCompany are provided in the notes to the financial statements in this Annual Report.
RELATED PARTY TRANSACTIONS
To comply with the requirements laid down in SEBI (LODR) Regulations all related partytransactions are placed before the Audit Committee for approval. Omnibus approval wasobtained on a yearly basis for transactions which were of repetitive nature.
All contracts / arrangements / transactions entered into by the Company with relatedparties were in the ordinary course of business and on arm's length basis. During the yearunder review your Company had not entered into any contract/ arrangement/ transactionwith related parties which could be considered material in accordance with the policy ofthe Company for related party transactions.
None of the transactions with any of the related parties were in conflict with theinterest of the Company. Attention of members is drawn to the disclosure of transactionswith the related parties set out in note no. 57 of the Financial Statements forming partof the Annual Report.
Your Company has framed a policy on related party transactions in accordance with SEBI(LODR) Regulations and as per the amended provisions of the Act. The policy intends toensure that proper reporting approval and disclosure processes are in place for alltransactions between the Company and related parties. The policy on related partytransactions as approved by the Board is also uploaded on the Company's website atwww.skpmil.com.
Since all transactions which were entered into during the financial year 2018-19 wereon arm's length basis and in the ordinary course of business and there was no materialrelated party transaction no detail is required to be provided in Form AOC-2 prescribedunder Clause (h) of Sub-section (3) of Section 134 of the Act and Rule 8(2) of theCompanies (Accounts) Rules 2014.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
To comply with the provisions of Section 177 of the Act and Regulation 22 of SEBI(LODR) Regulations the Company has adopted a Vigil Mechanism / Whistle Blower Policy foremployees of the Company. The policy provides for adequate safeguards againstvictimization of employees and directors who avail of the vigil mechanism and alsoprovides a direct access to the Chairperson of the Audit Committee in exceptional cases.The main objective of this policy is to provide a platform to the Directors and employeesto raise concerns regarding any irregularity misconduct or unethical matters / dealingswithin the Company which have a negative bearing on the organization either financially orotherwise. During the year under review no complaint under the Whistle Blower Policy wasreceived. The Vigil Mechanism (Whistle Blower Policy) is available on Company's website:www.skpmil.com at http://www.skpmil.com/pagepdf/1565259913.pdf link.
Your Company is committed to maintain the highest standards of Corporate Governance andadhere to its requirements set out by Securities and Exchange Board of India. A separatereport on Management Discussion and Analysis Corporate Governance along with acertificate from the auditors of the Company regarding compliance of conditions ofCorporate Governance as stipulated under Schedule V to the SEBI (LODR) Regulations formspart of this Annual Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
To comply with provisions of Section 134 of the Act and rules made there under yourCompany has duly constituted Internal Complaints Committee under the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013. During the yearunder review no case was filed under the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES
The information required to be disclosed in the Board's Report pursuant to Section197(12) of the Act read with Rule 5 (1) & (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is attached with this report asAnnexure E'.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. No amount has been or is proposed to be transferred to any reserves of the Company.
2. No significant or material orders have been passed by any Regulator or Court orTribunal which can have impact on the going concern status and the Company's operations infuture.
3. There were no special resolution passed pursuant to the provisions of Section 67(3)of the Act and hence no information as required pursuant to Section 67(3) of the Act readwith Rule 16(4) of Companies (Share Capital and Debentures) Rules 2014 is furnished.
4. No material changes and commitments have occurred after the close of the year tillthe date of this report which affect the financial position of the Company.
5. The Company is in regular compliance of the applicable provisions of SecretarialStandards issued by the Institute of Company Secretaries of India.
Your Company's organizational culture upholds professionalism integrity and continuousimprovement across all functions as well as efficient utilization of the Company'sresources for sustainable and profitable growth. Your Directors wish to place on recordtheir appreciation for the valuable co-operation and support received from the variousGovernment Authorities the Banks and other stakeholders such as members customers andsuppliers among others. Your Directors also commend the continuing commitment anddedication of the employees at all levels which has been critical for the Company'ssuccess. Your Directors look forward to their continued support in future.
| ||For and on behalf of the Board of Directors of || |
| ||Shree Krishna Paper Mills & Industries Limited || |
| ||Rakhi Verma ||Narendra Kumar Pasari |
| ||Director ||Managing Director |
|Place: New Delhi ||DIN: 07995132 ||DIN: 00101426 |
|Date: ||August 12 2019 || |