Your Directors are pleased to present the Forty First (41st) Annual Report onthe business and operations of your Company along with the Audited Financial Statementsfor the year ended 31st March 2021:
The summarized financial performances for the Financial Year ended March 312021 are asunder:
|Particulars ||2020-21 ||2019-20 |
| ||Rs in Lakhs ||Rs in Lakhs |
|Gross Sales and Other Income ||17189 ||16399 |
|Profit before Interest and Depreciation ||1370 ||1863 |
|Finance Cost ||1002 ||1192 |
|Depreciation ||547 ||558 |
|Profit before Tax ||(179) ||113 |
|Less: Provision for Tax ||- ||25 |
|Less: Deferred Tax ||19 ||- |
|Profit after tax ||(198) ||88 |
|Other Comprehensive Income ||(20) ||(20) |
|Total Comprehensive Income ||(218) ||68 |
Due to loss suffered by the Company your Directors express their inability to recommenddividend for the financial year ended on 31st March 2021.
TRANSFER TO RESERVES:
During the year under review due to loss suffered there was no amount transferred toany of the reserves by the Company.
CHANGE IN NATURE OF BUSINESS:
There were no changes in the nature of business during the year.
OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE:
The Company has achieved turnover of Rs. 17189 lakhs as against Rs. 16399 lakhsshowing an increase of 4.82 % over the previous year. Your Company reported net loss of Rs218 lakhs in FY 2020-21 as against profits of Rs 68 lakhs in previous FY 2019-20.
Metal packaging manufacturers are crying hoarse as the industry approaches the officialBIS standards on key raw materials tinplate. Foreign suppliers have not been able toobtain certification due to restrictions amid Covid-19 leading to a shortage of rawmaterial in the import-dependent industry. Due to the shortage Domestic suppliers haveraised the price of tinplate products by 35-40 percent. Cash flow has been doublypressured due to heightened tinplate prices in the domestic market and the supply shortageleading to lower output. Above factors also made your Company suffered a Loss of Rs 218Lakhs in the FY 2020-21.
Metal containers are anticipated to expand over the forecast period owing to nutritionretaining properties of metal containers and increasing health awareness in consumers. Theglobal metal packaging market was valued at USD 110.3 billion in 2021 and is expected toreach a value of USD 141.6 billion by at a CAGR of 4.34 % during the forecast period.The growing food and beverages market offers a variety of opportunities to the metalpackaging market. Aluminum and steel metals are the two most important types of metalswhich are 100% recyclable and also protect food from contamination. The trend of stainlesssteel in the metal packaging market will witness more growth in the upcoming years due tothe incoming demand from the F&B industry.
The global disposable batteries market is expected to grow at ~5.20% CAGR during theforecast period of 20182023. Dry cell batteries are the most important and the biggestsegment of the primary battery market. The use of electronic gadgets has witnessed a steepsurge creating a favorable environment for the growth of the disposable batteries market.Batteries are central to the use of many consumer electronics goods. The battery categorycontinued to be disturbed by proliferation of poor quality products imported from China atdumped prices which greatly augmented towards the end of the last financial year andduring the beginning of the current year. Though imports declined post the implementationof standards issued by the standards issued by the Bureau of Indian Standards (BISstandards). high inventory of the imported batteries impacted volumes of organized playersfor a major part of the year. As a result the category volume and value both remainedflat during the year.
The global packaging market is projected to grow to USD 1012.6 billion by 2021 at aCompound Annual Growth Rate (CAGR) of 5.5% as the most likely outcome during the forecastperiod with the best-case scenario reflecting 9.2% growth and the worst-case scenario at2.2% growth.
The highlights of the industry trend the outlook and the opportunities ahead for theCompany are exhibited in detail in the Management Discussion and Analysis Report.
In the year 2020-21 the export turnover was Rs. 5465/- Lakhs as compared to theprevious year exports of Rs. 4320/- Lakhs representing an increase of 26.50 % over theprevious year.
As on date your Company does not have any subsidiary company.
The Company has no associate companies within the meaning of Section 2(6) of theCompanies Act 2013.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There were no material changes and commitments affecting the financial position of theCompany which occurred between the end of the financial year to which these financialstatements relate on the date of this report.
The outbreak of the deadly COVID-19 virus and the ensuing lockdown imposed across thecountry affected business operations. The health of the employees and workers became apriority; stoppage of operations for an uncertain period resulted in a large financialburden on the one hand and workforce idling on the other. COVID-19 is an unprecedentedchallenge. The lockdown gave India time to make a concerted effort to flatten the outbreakcurve. However towards later part of the year consequent upon significant opening of theeconomic activity across the nation the demand picked up compared to that during theinitial period of Covid-19. India is currently experiencing a massive second wave ofCovid-19 infections. However we expect no major changes in the economic activity as thenation is preparing to face the Pandemic with vaccines and preparedness of virusmanagement measures will curb economic activity and could dampen market and consumersentiment. The announced countermeasures to combat the second wave - some of which are dueto remain in place at least until the end of June - risk weakening the economic recovery.However the targeted nature of containment measures and rapid progress on vaccinating thepopulation will mitigate the credit-negative impact.
During the financial year ended as on March 31 2021 the Authorized Share Capital ofthe Company was Rs. 300000000/- (Rupees Thirty Crores Only) and the Paid up ShareCapital was Rs. 90033000/- (Rupees Nine Crores Thirty Three Thousand Only). No changestook place in Share Capital of the Company during the year under review.
DIRECTORS' RESPONSIBILITY STATEMENT :
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the Internal Statutory andSecretarial Auditors the reviews performed by
Management and the relevant Board Committees including the Audit Committee your Boardis of the opinion that the Company's internal financial controls were adequate during thefinancial year 2020-21.
Accordingly pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:
1) In the preparation of the Annual Accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
2) 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;
3) The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
4) The Directors had prepared the Annual Accounts on a Going Concern basis;
5) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
6) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Members of the Company's Board of Directors are eminent persons of proven competenceand integrity. Besides experience strong financial acumen strategic astuteness andleadership qualities they have a significant degree of commitment to the Company anddevote adequate time to the meetings and preparation.
Retirement by rotation and subsequent re-appointment
In terms of the provisions of the Companies Act 2013 and the Articles of Associationof the Company Mr. Praveen Vittal Mally (DIN- 00798354) Jt. Managing Director retiresat the forthcoming Annual General Meeting and being eligible offers himself forreappointment.
Based on the recommendations of the Nomination and Remuneration Committee the Board atits Meeting held on 04th August 2021 subject to the approval of Shareholders at theensuing Annual General Meeting approved the following:
(i) Re-appointment and continuation of Mr. Mohan Menon (DIN-02838483) as an IndependentDirector of the Company.
re-appointed Mr. Mohan Narayan Menon (DIN:02838483) as an Independent Director forsecond term of five (5) consecutive years with effect from 30th May 2022 upto 29th May2027 (not liable to retire by rotation) and continuation of directorship of Mr. MohanMenon (DIN: 02838483) as an Independent Director of the Company who would attain theprescribed age limit of 75 years during the period of the proposed second term.Accordingly a Special Resolution seeking re-appointment of Mr. Mohan Narayan Menon(DIN:02838483) as an Independent Director of the Company is included in the Noticeconvening the Annual General Meeting. Details of Mr. Mohan Narayan Menon (DIN:02838483)are exhibited in the Explanatory Statement to the Notice of the Annual General Meeting.The Board of Directors recommends his appointment as Independent Director of the Company.Mr. Mohan Menon (DIN: 02838483) is exempt from the requirement to undertake onlineproficiency self-assessment test conducted by Indian Institute of Corporate Affairs(IICA) Manesar.
(ii) Re-appointment of Dr. Jyoti Gopalkrishna Baliga (DIN-00484000) as an IndependentDirector of the Company.
re-appointed Dr. Jyoti Gopalkrishna Baliga (DIN- 00484000)as an Independent Directorfor second term of five (5) consecutive years with effect from 25thJuly 2022 to 24thJuly 2027 (not liable to retire by rotation).Accordingly a Special Resolution seekingre-appointment of Dr. Jyoti Gopalkrishna Baliga (DIN-00484000)as an Independent Directorof the Company is included in the Notice convening the Annual General Meeting. Details ofDr. Jyoti Gopalkrishna Baliga (DIN- 00484000)are exhibited in the Explanatory Statement tothe Notice of the
Annual General Meeting. The Board of Directors recommends her appointment asIndependent Director of the Company.
(iii) Re-appointment of Mr. Praveen Vittal MaNy(DIN- 00798354) as Joint ManagingDirector of the Company.
re-appointed Mr. Praveen Vittal Mally (DIN:00798354) as Joint Managing Director for afurther period of three (3) years with effect from 16th May 2022. Accordingly a SpecialResolution seeking re-appointment of Mr. Praveen Vittal Mally as Joint Managing Directorof the Company is included in the Notice convening the Annual General Meeting. Details ofMr. Praveen Vittal Mally are exhibited in the Explanatory Statement to the Notice of theAnnual General Meeting. The Board of Directors recommends his appointment as JointManaging Director of the Company
Dr. P P Shastri (DIN:02199254) was appointed as Independent Director w.e.f. 18th July2016 for a period of 5(Five) Years upto 17th July 2021.
As his tenure expired Dr. P P Shastri ceased to be an Independent Director of theCompany with effect from the close of business hours on 17th July 2021 The Director hasconfirmed that there is no other material reason other than those provided herein above.
The Board has placed on record its deep appreciation of the contribution made by theaforesaid Directors during his tenure as Director on the Board of the Company.
DECLARATIONS FROM DIRECTORS :
The Company has received the following declarations from all the Independent Directorsconfirming that:
1. They meet the criteria of independence as prescribed under the provisions of theAct read with the Schedule and Rules issued thereunder and the Listing Regulations.There has been no change in the circumstances affecting their status as IndependentDirectors of the Company; and 2. They have registered themselves with the IndependentDirector's Database maintained by the IICA.
None of the Directors of the Company are disqualified for being appointed as Directorsas specified in Section 164(2) of the Act and Rule 14(1) of the Companies (Appointment andQualification of Directors) Rules 2014.
During the year under review the Board of Directors met five (5) times i.e. on24-June-2020 10-August-2020 10-November-2020 05 -February-2021 and 26-March-2021.
The Meetings of the Board are held at regular intervals with a time gap of not morethan 120 days between two consecutive Meetings. The Notice and Agenda of the Meetings werecirculated to Directors in advance. Minutes of the Meetings of the Board of Directors werecirculated amongst the Directors for their perusal and the definition of 'Independence' ofDirectors is derived from Regulation 16(b) of the Listing Regulations and Section 149(6)of the Companies Act 2013. The Company has received necessary declarations from all theIndependent Directors of the Company that they fulfill the requirements as stipulated inSection 149 (6) of the Companies Act 2013 read with the SEBI (LODR) Regulations 2015('the Listing Regulations').
Further pursuant to Clause VII (1) of Schedule IV of the Companies Act 2013 theIndependent Directors held a separate meeting on 10th June 2021.
SEBI (LODR)(Amendment) Regulations 2018 has changed the evaluation criteria ofIndependent Directors from April 12019. As per the amendment evaluation of IndependentDirectors by the entire Board shall include:
(a) Performance of Directors and
(b) Fulfilment of independence criteria as specified in Listing Regulations and theirindependence from the management.
The Board has evaluated the Independent Directors and confirms that all the IndependentDirectors of the Company fulfilled the independence criteria as specified in ListingRegulations and their independence from the management.
Details on terms of appointment of Independent Directors and the familiarizationprogram have been displayed on website of the Company at http://shetrongroup.in/pdf/FamiliarisationProgramme.pdf
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The policy of the Company on director's appointment and remuneration including thecriteria for determining qualifications positive attributes independence of a directorand such other matters as required under sub-section (3) of Section 178 of the CompaniesAct 2013 is available on the Company's website at http://shetrongroup.in/pdf/Nomination%20&%20Remuneration%20Policv.pdf
The Company affirms that the remuneration paid to the Directors is as per the termslaid out in the nomination and remuneration policy of the Company.
BOARD EVALUATION :
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard has carried out an annual performance evaluation of its performance and of theDirectors individually as well as the evaluation of the working of its Audit andNomination & Remuneration Committees.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE:
During the year the Company has not given any loans or guarantees covered under theprovisions of Section 186 of the Companies Act 2013.
The details of the investments made by Company are given in the notes to the financialstatements.
- ANNUAL RETURN:
Pursuant to Section 92(3) of the Companies Act 2013 and Rule 12 of the Companies(Management and Administration) Rules 2014 an Annual Return in Form MGT-7 is placed onthe website of the Company at http://shetrongroup.in/pdf/92fc7404-61f0-428f-abea-707634b79547.pdf
DETAILS OF INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS:
Your Company has adopted accounting policies which are in line with the AccountingStandards prescribed in the Companies (Accounting Standards) Rules 2006 that continue toapply under Section 133 and other applicable provisions if any of the Companies Act2013 read with Rule 7 of the Companies (Accounts) Rules 2014. There are in accordancewith generally accepted accounting principles in India.
COMPLIANCE WITH THE APPLICABLE SECRETARIAL STANDARDS:
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings (SS-1) and General Meetings (SS-2)
ADDITIONAL DISCLOSURES :
In line with the requirements of the Listing Regulations and Accounting Standards yourCompany has made additional disclosures in respect of Related Party transactions andsegment reporting in notes to accounts.
RISK MANAGEMENT POLICY :
The Audit Committee has oversight in the area of financial risks and controls. Themajor risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a ongoing basis. The policy for risk management is availableon the Company's website at http://shetrongroup.in/pdf/Risk%20Management%20Policv.pdf
In terms of the provision of Sections 73 74 & 76 of the Companies Act 2013 readwith the Companies (Acceptance of Deposits) Rules 2014 your Company has not accepted/renewed any fixed deposits from the public during the year under review.
Whether there has been any default in repayment of deposits or payment of interestthereon during the year and if so number of such cases and the total amount involved-
|(i) At the beginning of the year: ||Nil |
|(ii) Maximum during the year: ||Nil |
|(iii) At the end of the year: ||Nil |
AWARDS & LAURELS :
Your Company was awarded the Bronze winner by the Can maker magazine for the year2020-21 in the Ends Caps & Closures category.
FRAUD REPORTED BY THE AUDITORS DURING THE YEAR:
Not applicable as there were no such instances during the year under consideration.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy technology absorption foreignexchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in (Annexure- 1) and is attached to this report.
The Company endeavor to support the environment by adopting environment-friendlypractices in the working patterns The efforts in this direction centre around makingefficient use of natural resources elimination of waste and promoting recycling ofresources.
Messrs Naresh & Co Chartered Accountants (Firm Registration No. 011293S) wereappointed as the Statutory Auditors at the Annual General Meeting held in the year 2017and hold office for a term of 5 years till the conclusion of the 42nd Annual GeneralMeeting of the Company to be held in the year 2022. Consequent to the amendments to theCompanies Act 2013 ratification of appointment of the statutory auditor at every AnnualGeneral Meeting is no longer required.
COST AUDITORS :
As per the requirement of the Central Government and pursuant to the provisions ofSection 148 of the Companies Act 2013 read with the Companies (Cost Records and Audit)Rules 2014 as amended from time to time your Company has been carrying out audit of costrecords relating to all product line. The Board of Directors on the recommendation ofAudit Committee has appointed Messrs Vishwanath Bhat & Co Cost Auditors to audit thecost accounts of the Company for the financial year 2021-22.
As required under the Companies Act 2013 a resolution seeking approval of Members forthe remuneration payable to the Cost Auditor forms part of the notice convening the AnnualGeneral meeting.
SECRETARIAL AUDIT :
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Mr. Vijayakrishna K TPractising Company Secretary was appointed to undertake the Secretarial Audit. The Reportof the Secretarial Audit for the year ended 31st March 2021 is attached to the Board'sReport (Annexure - 2).
AUDITORS' REPORT AND SECRETARIAL AUDIT REPORT :
There was no qualification reservations or adverse remarks made either by theStatutory Auditors or by the Secretarial Auditor in their respective reports and theirreports are annexed.
CORPORATE SOCIAL RESPONSIBILITY
The provisions of Section 135 of the Companies Act 2013 on Corporate SocialResponsibility is not applicable to the Company.
REPORT ON CORPORATE GOVERNANCE:
Your Company has taken adequate steps to adhere to all the stipulations laid down inRegulation 27 of the Listing Regulations. A report on compliance of the code is annexedherewith (Annexure - 3).
Certificate from Practicing Company Secretary confirming the compliance with theconditions of Corporate Governance as stipulated under Regulation 27 of the ListingRegulations is attached to this report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and at arm's lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions. All contracts /arrangements / transactions with related parties are placed before the Audit Committee andalso the Board as may be required for approval.
The policy on Materiality of Related Party Transactions and also on dealing withrelated party transactions as approved by the Audit Committee and the Board of Directorsare displayed on the Company's website http://shetrongroup.in/pdf/Realted%20Partv%20Transaction%20Policv.pdf.
All Related Party Transactions entered during the year were in Ordinary Course of theBusiness and at Arm's Length basis. No Material Related Party Transactions i.e.transactions exceeding 10% of the annual consolidated turnover as per the last auditedfinancial statements were entered during the year by your Company. The information ontransactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule8(2) of the Companies (Accounts) Rules 2014 are given in (Annexure- 4) in Form No.AOC-2 and the same forms part of this report.
Details of contracts / arrangements / transactions with related parties are given inthe notes to the financial statements.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:
Adhering to the provisions of Section 125 of the Companies Act 2013 relevant amountswhich remained unpaid or unclaimed for a period of seven years have been transferred bythe company from to time to time on due dates to the Investor Education and ProtectionFund.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
The Company has been employing women employees in various cadres within its office andfactory premises. The company has in place a policy against sexual harassment in line withthe requirements of the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013. Internal Complaint Committee is set up at shop floor level toredress any complaints received. All employees are covered under the policy.
|(a). number of complaints filed during the financial year(2020-21) - ||Nil |
|(b). number of complaints disposed of during the financial year (2020-21) - ||Nil |
|(c). number of complaints pending as on end of the financial year. (2020-21) - ||Nil |
HEALTH SAFETY AND ENVIRONMENT PROTECTION
Your Company has complied with all applicable environment laws and labour laws. TheCompany has been taking all the necessary measures to protect the environment and maximizeworker protection and safety. The company's policy require conduct of operation in such amanner so as to ensure safety of all concerned compliance of environment regulations andpreservation of natural resources.
DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION) RULES 2014:
Disclosures required under Section 197 of the Companies Act 2013 read with rule 5 ofthe Companies (Appointment & Remuneration) Rules 2014 have been annexed as (Annexure- 5).
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS:
There are no such events during the year.
REVISION OF FINANCIAL STATEMENT OR THE ANNUAL REPORT:
As per the Secretarial Standards-4 in case the Company has revised its financialstatement or the Report in respect of any of the three preceding financial years eithervoluntarily or pursuant to the order of a judicial authority the detailed reasons forsuch revision shall be disclosed in the Report of the year as well as in the Report of therelevant financial year in which such revision is made.
No revision of Financial Statement took place in any of the three preceding financialyears under consideration.
CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCYCODE 2016 (IBC) :
There is no such process initiated during the year therefore said clause is notapplicable to the Company.
FAILURE TO IMPLEMENT ANY CORPORATE ACTION :
There were no such events took place during the year under consideration.
CREDIT RATING OF SECURITIES :
The Credit rating obtained by the Company during the year under review are as under:
|Date ||Facilities ||Rating |
|04th August 2020 ||Long Term Facilities ||ICRA BB-(Stable) |
| ||Short Term Facilities ||ICRA A4 |
The Company has a robust vigil mechanism through its Whistle Blower Policy approved andadopted by Board of Directors of the Company in compliance with the provisions of Section177(10) of the Act and Regulation 22 of the Listing Regulations.
The Company has adopted a revised Whistle Blower policy which provides a formalmechanism for all Directors and employees of the Company to approach the Management of theCompany (Audit Committee in case where the concern involves the Senior Management) andmake protective disclosures to the Management about unethical behavior actual orsuspected fraud or violation of the Company's code of conduct or ethics policy.
The policy on Vigil Mechanism and Whistle Blower Policy is available on the website ofthe Company http://shetrongroup.in/pdf/Vilgil%20Mechanism%20&%20Whistleblower%20Policv.pdf.
INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THE SUBSIDIARIES /ASSOCIATES:
The Company does not have any subsidiaries / associates. Hence the said clause is notapplicable to the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT :
The Management's Discussion and Analysis forms an integral part of this report andgives detail of the overview industry structure and developments different productgroups of the Company operational performance of its business segment annexed as (Annexure-6).
ANNEXURES FORMING A PART THE BOARD' REPORT
The Annexures referred to in this Report and other information which are required to bedisclosed are annexed herewith and form a part of this Report:
1 Particulars of Conservation of Energy Technology and Foreign Exchange
2 Secretarial Audit Report
3 Corporate Governance Report
4 Related Party Transactions
5 Managerial Remuneration and Particulars of Employees
6 Management Discussion And Analysis Report
Your Directors wish to place on record their sincere thanks to bankers businessassociates consultants various Government Authorities and employees at all levels in theCompany for their continued support extended to your Company's activities during the yearunder review. Your Directors also acknowledge gratefully the shareholders for theirsupport and confidence reposed in your Company.
| ||By the order of the Board |
| ||For Shetron Limited |
| ||Divakar S Shetty |
|Place : Bengaluru ||Executive Chairman |
|Date : 10th June 2021 ||DIN: 00432755 |