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Shree Rama Multi-Tech Ltd.

BSE: 532310 Sector: Industrials
NSE: SHREERAMA ISIN Code: INE879A01019
BSE 00:00 | 27 Mar 3.38 -0.17
(-4.79%)
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3.55

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NSE 00:00 | 27 Mar 3.40 -0.15
(-4.23%)
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3.40

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OPEN 3.55
PREVIOUS CLOSE 3.55
VOLUME 1577
52-Week high 7.80
52-Week low 2.71
P/E 5.28
Mkt Cap.(Rs cr) 21
Buy Price 3.38
Buy Qty 100.00
Sell Price 3.72
Sell Qty 750.00
OPEN 3.55
CLOSE 3.55
VOLUME 1577
52-Week high 7.80
52-Week low 2.71
P/E 5.28
Mkt Cap.(Rs cr) 21
Buy Price 3.38
Buy Qty 100.00
Sell Price 3.72
Sell Qty 750.00

Shree Rama Multi-Tech Ltd. (SHREERAMA) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 25th Annual Report on the businessand operations of the Company together with Audited Financial Statements for the financialyear ended March 31 2019.

FINANCIAL RESULTS

The Company's financial performance for the year ended March 312019 is summarizedbelow:

2018-19 2017-18
(Current Year) (Previous Year)
Gross Sales/ Income from Operations 11732.12 12544.11
Other Income 33.08 71.31
Total Revenue 11765.20 12615.42
Profit Before Depreciation Interest and Tax 841.55 1140.37
Depreciation and amortization expense 902.59 1086.83
Finance Costs 383.25 457.87
Profit/(loss) before tax (after exceptional items) (444.29) (404.33)
Deferred Tax Provision/ (Reversal) (239.77) (147.61)
Short / (Excess) provision of IT of earlier years 98.09 0.00
Net Profit/ (Loss) for the year (302.61) (256.72)

OPERATIONAL REVIEW

Your Company's total revenue from operations during the year under review was Rs.11732.12 Lakhs as compared to Rs. 12544.11 Lakhs of previous year which shows a decreaseof 6.47% over the previous year figure. The other income was Rs. 33.08 Lakhs during theyear under review. The EBIDTA of the Company during the year was Rs. 841.55 Lakhs. Theloss stood at Rs. 302.61 Lakhs for the Financial Year 2018-19.

BUSINESS PERFORMANCE

Your Company belongs to the packaging industry which is among the growing industries inIndia and developing at about 13 to 15% per annum generally. The growth of the Indianpackaging industry is heavily influenced by changing demographics such as growingurbanization and the rising proportion of middle class consumers.

The performance of the Company during the year 2018-19 has declined slightly over theprevious year. The company's major product is laminated tubes which is used for packingproducts in paste or gel form. The production of laminated tubes was stable compared toprevious years. Your company has fully utilized tubing capacity throughout the year. TheCompany has put best efforts to achieve the higher growth however due to constraints asto the plant capacity and other related factors the Company could not achieve the growthdespite of the available opportunities in the market. During the year the Company hasfocused on the oversees market looking to its ample scope consequently the export salesgrew from Rs 1967.82 Lakhs of the previous Financial Year 2017-18 to Rs 2322.85 Lakhs inthe Financial Year 2018-19 i.e. a growth of 18% over the previous year. Hence the exportswould continue to remain focused on developing export business. During the year therecertification audits were carried out by external agencies and accordingly your companyhas been recertified for ISO- 9001-2015 and FSSc 22000. The Company is targeting toachieve the economy and growth within the overall available resources along with increasein the volume with additional capacity for the improvement in the business activities.Your Directors expect better performance of the Company during the current year.

DIVIDEND

During the Financial Year 2018-19 your Company has incurred loss of Rs. 302.61 Lakhshence considering the loss for the year under review and accumulated loss of the earlieryears your Directors do not recommend any dividend for the Financial Year 2018-19 and noamount has been transferred to the Reserves for the year under review.

SHARE CAPITAL

The Paid-up Equity Share Capital of the Company as at March 31 2019 was Rs. 3176.03lakhs. During the year under review the Company has not issued any shares withdifferential voting rights as to dividend voting or otherwise nor has granted any stockoptions or sweat equity. As on March 31 2019 none of the Directors of the Company holdany instruments convertible into Equity shares of the Company.

SUBSIDIARY COMPANIES

Shree Rama (Mauritius) Limited was incorporated as wholly owned subsidiary inMauritius. The current status of the Company is "Defunct".

DEPOSITS

The Company does not have "Deposits" as contemplated under Chapter V of theCompanies Act 2013. Further the Company has not invited or accepted any such depositsduring the year ended on March 312019.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return in Form MGT-9 for the year ended on March 31 2019pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 is annexed herewith as ‘Annexure A' asa part to this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 152 of the Companies Act 2013 and the Company'sArticles of Association Shri Shailesh K. Desai (DIN: 01783891) retires by rotation at theforthcoming Annual General Meeting and being eligible offers himself for re-appointment.The Board recommends his reappointment for the consideration of the members of the Companyat the ensuing Annual General Meeting.

During the year under review Shri Shailesh K. Desai (DIN: 01783891) was re-appointedas the Managing Director of the Company w.e.f. August 3 2018 for a further period of 3(three) years by the Board on recommendation of Nomination and Remuneration Committee andthe re-appointment was approved by the shareholders at 24th Annual GeneralMeeting of the Company.

Shri Hemal R. Shah (DIN: 07338419) during the year 2018-19 was re-appointed asWhole-Time Director of the Company for a period of 2 (two) years with effect from November27 2018 by the Board on recommendation of the Nomination and Remuneration Committee andthe re-appointment was approved by the shareholders at the Extra-Ordinary General Meetingof the Company held on January 9 2019.

During the year under review the first term of appointment of Shri Pathik C. Shah(DIN: 00076715) as an Independent Director was completed on March 31 2019. The Board ofDirectors has on recommendation of Nomination and Remuneration Committee and consideringhis valuable guidance imparted to the overall functioning of the manufacturing activitiesof the Company and his significant contribution bringing independent judgement in thedecisions of Board of Directors as well as based on the report of his performanceevaluation re-appointed him as an Independent Director of the Company with effect fromApril 1 2019 for a period of five years pursuant to Section 149 of the Companies Act2013 subject to approval of shareholders by way of special resolution at the forthcomingGeneral Meeting of the Company.

As required under Regulation 36(3) of the Listing Regulations particulars of Directorsseeking appointment / re-appointment at the ensuing Annual General Meeting are annexed tothe notice convening Twenty-fifth Annual General Meeting.

Your Company has received declarations from all the Independent Directors confirmingthat they meet with the criteria of Independence as prescribed under sub-section (6) ofSection 149 of the Companies Act 2013 and under Regulation 16(1)(b) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and there has been no change inthe circumstances which may affect their status as an Independent Director during theyear.

None of the Non-Executive Directors of the Company had pecuniary relationship ortransactions with the Company (except sitting fees for attending Board Meetings) duringthe year under review.

Pursuant to Section 203 of the Companies Act 2013 the whole-time Key ManagerialPersonnel of the Company as on March 312019 are as under:

1. Shri Shailesh K. Desai Managing Director
2. Shri Hemal R. Shah Whole-Time Director
3. Shri Krunal G. Shah Chief Financial Officer
4. Mr. Purvang Trivedi Company Secretary

NUMBER OF MEETINGS OF THE BOARD

During the Financial Year ended on March 31 2019 the Board met six times the detailsof which are given in the Corporate Governance Report that forms part of this AnnualReport. The intervening gap between any two consecutive meetings of Board was not morethan one hundred and twenty days.

COMMITTEES OF BOARD

The Company has following Committees of the Board as on March 31 2019 pursuant toapplicable provisions of the Companies Act 2013 and rules made there under as well as incompliance with SEBI (LODR) Regulations 2015:

(i) Audit Committee

(ii) Nomination and Remuneration Committee

(iii) Stakeholders Relationship Committee

(iv) Committee of Directors

During the Financial Year 2018-19 the Board has constituted a Committee of Directorsat its meeting held on November 22 2018.

The details of composition meetings and attendance of members of committees heldduring the year are given in the Corporate Governance Report that forms part of thisAnnual Report.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and as per the corporategovernance requirements as prescribed under SEBI (LODR) Regulations 2015 the Board ofDirectors had carried out the performance evaluation of working of the Board Committees aswell as evaluation of Independent Directors including the performance of IndependentDirectors and assessment of their independence criteria and their independence from themanagement. The Board of Directors also reviewed the criteria for the purpose ofevaluation of performance of Independent Directors of the Company as well as Board ofDirectors of the Company. Further Independent Directors of the Company had also carriedout the performance evaluation of Non-Independent Directors the Board as whole theChairman of the Company and also reviewed the timeliness and effectiveness of flow ofinformation between the Company and the Board. The Nomination and Remuneration Committeeof the Company had also carried out performance evaluation of every Director'sperformance. A structured questionnaire was prepared after taking into consideration thevarious aspects of evaluation. The Board of Directors expressed its satisfaction with theevaluation process.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act 2013 your Directors to the best oftheir knowledge and belief and according to the information and explanations obtained bythem state that:

a) in the preparation of the annual accounts for the year ended on March 31 2019 theapplicable accounting standards have been followed along with proper explanation relatingto 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 for the year ended on March 31 2019 andof the 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 Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors had prepared the annual accounts on a going concern basis; and

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 provisions ofall applicable laws and that such systems were adequate and operating effectively.

RELATED PARTY TRANSANCTIONS

All transactions entered with related parties for the year under review were on arm'slength basis and in the ordinary course of business of the Company and there were nomaterial contracts or arrangement or transactions entered into in terms of Section 188 ofthe Companies Act 2013 and accordingly the disclosure of related party transactions asper Section 134(3)(h) of the Companies Act 2013 in Form AOC-2 is not provided. Furtherthe disclosures in compliance with Para A of Schedule V of Regulation 34(3) of SEBI (LODR)Regulations 2015 is provided in the notes to the accounts. The related party transactionsas required to be disclosed under Indian Accounting Standards (Ind-AS 24) are set out inthe notes to the financial statements.

The Audit Committee had given prior omnibus approval for the related party transactionswhich were of repetitive nature and/or entered in the ordinary course of business and onarm's length basis and a statement giving details of all related party transactions wereplaced before the Audit Committee and the Board for review and noting on a quarterlybasis.

The policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company viz. www.srmtl.com. None of the Directors has anypecuniary relationship or transactions vis-a-vis the Company.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY

During the year 2018-19 the Company has not given any loans or provided guarantee orsecurity in connection with a loan to other body corporate or person or made investmentsas contemplated under the provisions of Section 186 of the Companies Act 2013 hence thedetails are not provided.

INTERNAL FINANCIAL CONTROL SYSTEM

The Company's internal control system is commensurate with its size scale andcomplexities of its operations. Your Company has an effective internal control andrisk-mitigation system which are constantly reviewed assessed and strengthened with new/revised standard operating procedures considering the existing system and future planningas envisaged. The internal audit is entrusted to M/s Ramesh C. Sharma & Co. CharteredAccountants and the scope of the internal audit are reviewed and revised as required toassess the risks and business processes besides benchmarking controls with best practicesin the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Company has a robust Management Information System which is an integral part ofthe control mechanism.

The Audit Committee Statutory Auditors and the business heads are quarterly apprisedof the internal audit findings and the corrective actions taken. Audit plays a key role inproviding assurance to the Board of Directors. The significant audit observations andcorrective actions taken by the management are presented to the Audit Committee of theBoard. To maintain its objectivity and independence the Internal Auditor reports to theChairman of the Audit Committee.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The statement showing particulars with respect to the conservation of energytechnology absorption and foreign exchange earnings and outgo stipulated under Section134(3)(m) of the Companies Act 2013 read with Rule 8 of the Companies (Accounts) Rules2014 is annexed herewith as "Annexure B" as a part to this Report.

PARTICULARS OF EMPLOYEES

The Company has continued to maintain harmonious and cordial relations with itsofficers supervisors and workers enabling the Company to maintain the pace of growth.Training is imparted to employees at all levels and covers both technical and behavioralaspects.

The details of Managerial Remuneration as required under Section 197(12) of theCompanies Act 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed herewith as "Annexure C" asa part to this Report. There was no employee drawing an annual salary of Rs. 102 lakhs ormore where employed for full year or monthly salary of Rs. 8.50 Lakhs or more whereemployed for part of the year and therefore no information pursuant to the provisions ofRule 5(2) & 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is required to be given.

NOMINATION AND REMUNERATION POLICY

The Board of Directors has on recommendation of the Nomination and RemunerationCommittee framed a Nomination and Remuneration Policy pursuant to the provisions ofSection 178 of the Companies Act 2013 read with the Rules made thereunder as well as SEBI(LODR) Regulations 2015. The policy has been placed on the website of the Company viz.www.srmtl.com. The salient features of the said policy are stated in the CorporateGovernance Report that forms part of this report.

AUDITORS & AUDITORS' REPORT

Pursuant to the provisions of Section 139 of the Companies Act 2013 and the rulesframed thereunder M/s Chandulal M. Shah & Co. (FRN: 101698w) Chartered AccountantsAhmedabad were appointed as Statutory Auditors of the Company for the period of five yearsfrom the conclusion of the Twenty-third AGM of the Company till the conclusion of theTwenty-eighth AGM. The Company has received a letter from M/s Chandulal M. Shah & Co.Chartered Accountants to the effect that their appointment is within the prescribedlimits under Section 141 of the Companies Act 2013 read with rules made thereunder andthat they are not disqualified for such appointment.

During the year under review there are no instances of frauds as reported by theauditors under Section 143(12) the Companies Act 2013 and its rules made thereunder.

The Statutory Auditors of the Company has made certain observations in the audit reportand qualified the report during the year under review. In this regard the Board clarifiesthe same as under:

Boards' Comments on Auditors Emphasis:

1. Regarding the non-provision of interest on borrowings in form of Loans anddebentures:

The management has already initiated settlement with the lenders of the loan anddebentures as per the Scheme of Arrangement and Compromise. The lenders specified in thescheme have given their consent for settlement as per the terms of the scheme and in theopinion of the management the amount of dues payable to lenders have been specified underthe definition of "Settled Debt" under clause (n) of Part 1 of the schemetherefore no further liability on account of interest will arise. In case the scheme isnot approved or approved with different terms the company will give necessary accountingeffect on final ascertainment of the same.

2. Regarding Non consolidation of accounts of Shree Rama Mauritius Limited (WOS):

In respect of the investment made in Shree Rama (Mauritius) Limited its Wholly-OwnedSubsidiary (WOS) the resident directors & key managerial personnel of the said WOShad resigned in the year 2005-06 and audited accounts for the year ended 30thSeptember 2003 and onwards could not be prepared and provided. Its present status is shownas ‘defunct' under respective laws. The Company has accordingly provided fordiminution in the value of investments in the earlier years.

In view of the above it was not possible to prepare consolidated financial statementsas required by Ind AS 110 issued by ICAI and other provisions of the Companies Act 2013.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Boardhad appointed M/s Chirag Shah & Associates Practicing Company Secretaries toundertake the Secretarial Audit of the Company for the Financial Year 2018-19. TheSecretarial Audit Report is annexed herewith as "Annexure D" as a part tothis Report.

There are some observations made by the Secretarial Auditor in their report for whichthe Board of Directors hereby give its comments/ explanation as under:

(i) Regarding Non-consolidation of accounts of Shree Rama (Mauritius) Limited (WOS):

In respect of the investment made in Shree Rama (Mauritius) Limited its Wholly-OwnedSubsidiary (WOS) the resident directors & key managerial personnel of the said WOShad resigned in the year 2005-06 and audited accounts for the year ended 30thSeptember 2003 and onwards could not be prepared and provided. Its present status is shownas ‘defunct' under respective laws. The Company has accordingly provided fordiminution in the value of investments in the earlier years.

In view of the above it was not possible to prepare consolidated financial statementsas required by Ind AS 110 issued by ICAI and other provisions of the Companies Act 2013.

(ii) Regarding pending redemption of 666666 15% Cumulative Preference Shares:

The Composite Scheme of Compromise and Arrangement with its lenders and Shareholdersu/s 391 of the Companies Act 1956 filed with Hon'ble High Court of Gujarat is pendingbefore higher bench and matter of redemption of preference shares along with dividend etc.is also covered in the scheme. The Board is of the view that the said matter will besorted out on final outcome of the scheme.

(iii) Regarding non reversal of provision of dividend and non-transfer of the saidamount to IEPF:

In the Scheme of Compromise and Arrangement the issue of waiver of unpaid dividend onpreference shares is also covered. The Board is of the view that the said matter will besorted out on final outcome of the scheme.

COST AUDITOR

As per the requirements of the Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time your Company is required tomaintain cost records and accordingly such accounts are made and records have beenmaintained relating to the product group ‘Plastics and Polymers' during the yearunder review. The Board of Directors on the recommendation of Audit Committee hasre-appointed M/s Maulin Shah & Associates Cost Accountants (Firm Registration Number101527) as Cost Auditor to audit the cost records of the Company for the financial year2019-20. As required under the Act a resolution seeking member's approval for theremuneration payable to the Cost Auditor forms part of the Notice convening the AnnualGeneral Meeting for their ratification

SECRETARIAL COMPLIANCE CERTIFICATE

M/s Chirag Shah & Associates Practicing Company Secretaries Ahmedabad hadfurnished Annual Secretarial Compliance Report pursuant to Regulation 24A of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 read with SEBICircular No. CIR/CFD/CMD1/27/2019 dated 8th February 2019 with respect to theAnnual Secretarial Audit of compliances made by the Company of all SEBI Regulations andcirculars/ guidelines for the year ended on 31st March 2019. There were noobservations for the period under review.

The said report is provided in a separate section and forms an integral part of thisAnnual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year the Company ceases to be covered under the criteria prescribed underSection 135(1) of Companies Act 2013 read with rules made thereunder hence the Board hasdiscontinued the Corporate Social Responsibility Committee with effect from November 102017 and therefore the Company is not required to comply with the provisions of theCorporate Social Responsibility prescribed under the Companies Act 2013. Accordingly thedetails in the Annual Report on the CSR activities is not provided as an annexure to thisReport.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on operations of the Company as requiredunder Regulation 34(3) read with Para B of Schedule V of SEBI (LODR) Regulations 2015 isprovided in a separate section and forms an integral part of this Annual Report.

CORPORATE GOVERNANCE

The Report on Corporate Governance as stipulated under Regulation 34(3) read with ParaB of Schedule V of SEBI (LODR) Regulations 2015 forms an integral part of this Report.The requisite certificate from the Practicing Company Secretary of the Company confirmingcompliance with the conditions of corporate governance is attached to this report onCorporate Governance.

INSURANCE

The assets of the Company are adequately insured to take care of any unforeseencircumstances.

MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of theCompany occurred between the end of the financial year of the Company to which thefinancial statements relate and the date of the report.

RISK MANAGEMENT

The risk is the part and partial of every business and the risk management is embeddedin your Company's operating framework. Even though it is not possible to completelyeliminate various risks associated with the business of the Company the efforts are madeto minimize the impact of such risks on the operations of the Company. The Company hasestablished a well-defined process of risk management which includes identificationanalysis and assessment of various risks measurement of probable impact of such risksformulation of the risk mitigation strategies and implementation of the same so as tominimize the impact of such risks on the operations of the Company. The Company has put inplace various internal controls for different activities so as to minimize the impact ofvarious risks. The Company's approach to addressing the business risk is comprehensive andincludes periodic review of such risks and a framework for mitigating controls andreporting mechanism of such risks. The risk management framework is reviewed periodicallyby the Board of Directors for its effectiveness and compliances.

The discussion on risks and concerns are covered in the Management Discussion andAnalysis Report which forms part of this Report.

VIGIL MECHANISM

Your Company has framed a Vigil Mechanism to report genuine concerns or grievances ofall directors and employees. It provides for adequate safeguards against victimization ofpersons who use such mechanism. The Vigil Mechanism Policy has been hosted on the websiteof the Company i.e. www.srmtl.com.

CODE OF CONDUCT

The Board of Directors has adopted the Code of Conduct for the Directors and SeniorManagement and the same has been placed on the Company's website. All the Board membersand the senior management have affirmed compliance with the Code of conduct for the yearunder review.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Institute of Company Secretaries of India a Statutory Body has issued SecretarialStandards on various aspects of corporate law and practices. The Company has complied witheach of the standards which are mandatory.

OTHER DISCLOSURES

No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company's operations in future.

The appeal with the larger bench of Hon'ble High Court of Gujarat in the matter ofScheme of Compromise and Arrangement under Section 391 of the Companies Act 1956 whichwas admitted by the Court has been finally concluded and Hon'ble High Court of Gujarat hasreserved its order under the matter and the same is awaited.

As per the requirement under the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 read with rules made there under your company hasalso formulated a policy on prevention of sexual harassment at workplace with a mechanismof lodging complaints. During the year under review no complaints were reported.

APPRECIATION

Your Directors place on record their sincere appreciation for the continuedco-operation and support extended to the Company by various Banks. Your Directors alsothank the Consumers for their patronage to the Company's products. Your Directors alsoplace on record sincere appreciation of the continued hard work put in by the employees atall levels. The Directors also thank the Company's vendors investors businessassociates Stock Exchanges Government of India State Government and various departmentsand agencies for their support and co-operation.

For Shree Rama Multi-Tech Limited
Place: Moti-Bhoyan Shailesh K. Desai Hemal R. Shah
Date: May 24 2019 Managing Director Whole-Time Director
(DIN: 01783891) (DIN: 07338419)