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SMVD Poly Pack Ltd.

BSE: 535038 Sector: Industrials
NSE: SMVD ISIN Code: INE702Y01013
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SMVD Poly Pack Ltd. (SMVD) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting the Tenth Annual Report of the companytogether with the Audited Accounts for the year ended 31st March 2019.

FINANCIAL HIGHLIGHTS (Rs. in lakh)
Particulars Current Year Previous Year
Revenue from operations 4985.93 4722.63
Operating Profit 418.73 306.57
Other Income 19.45 23.55
Depreciation (115.31) (89.38)
Profit before tax 322.87 240.74
Tax Expenses :
Current Tax (66.47) (49.08)
MAT Credit Entitlement 33.38 31.08
Deferred Tax (44.48) (8.88)
Total (77.57) 89.04
Net Profit 245.30 213.86
Other Comprehensive Income/(Loss) for the year net of tax 00 00
Total Comprehensive Income 245.30 213.86
Add : Balance Brought forward from last year 288.88 77.51
534.18 291.37

Performance of the Company

During the year under review the Company has earned a profit of Rs. 245.30 Lakhsat a turnover of Rs. 4985.93 Lakhs compared to a net profit of Rs. 213.86 Lakhsat a turnover of Rs. 4722.62 Lakhs in the previous year 2017-18.

Dividend

To conserve the resources of the Company for future expansions long – termworking capital requirements and for General Corporate purposes the Board of Directors ofthe Company did not recommend any dividend for the year 2018-19.

Issue of Shares

The Company has not issued any shares during the year under review. The money raisedthrough IPO during the last financial year i.e.2017-18 has been utilized for the purposeas stated in the offer document. The miniature statement showing utilization of funds isas follows:-

Particulars Amount allotted for Objects as stated in the Prospectus Utilization of fund received from allotment of shares by 31st March 2019 Balance amount to be utilized Deviation or Variation (if any)
(Amount in Lacs) (Amount in Lacs) (Amount in Lacs)
Issue related Expenses 55.20 55.20 Nil Nil
Capital Expenditure for Business Expansion 651.30 616.04 35.26 Nil
Working Capital Requirement 95.50 95.50 Nil Nil
General Corporate Purpose 100.00 100.00 Nil Nil

Public Deposits

The Company has not accepted any Deposits during the year no deposits remained unpaidor unclaimed as at the end of the year and there was no default in repayment of depositsor payment of interest thereon during the year.

Transfer to Reserves

The Company has not transferred any amount to General Reserves during the year underreview.

Directors' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Companies Act 2013 your Directorshereby confirm that:

i) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation related to material departures;

ii) Appropriate accounting policies have been selected and applied consistently andjudgements and estimates that are reasonable and prudent have been made so as to give atrue and fair view of the state of affairs of the Company as at 31st March 2019 and ofthe Profit of the Company for the year ended on 31st March 2019;

iii) Proper and sufficient care has been taken to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of this Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

iv) The annual accounts have been prepared 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) Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.

Directors and Key Managerial Personnel

Retirement by Rotation

Pursuant to the provisions of Section 152(6) and other applicable provisions of theCompanies Act 2013 and Articles of Association of the Company Mr. Pawan Kumar Agarwal(DIN: 00325033) Non- Executive Director of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible offered himself for reappointment.

Declaration by Independent Directors

Declaration by Independent Directors that they meet the criteria of independence asprovided in sub-section (6) of Section 149 of the Companies Act 2013 has been receivedfrom all the Independent Directors.

Auditors

Statutory Auditors

Th e term of office of M/s D.K. Parmanandka & Co. Chartered Accountants as thestatutory auditors of the Company is liable to expire from the conclusion of forthcomingAGM.

Hence based on the recommendation of the Audit Committee the Board of Directors hasrecommended the re-appointment of M/s D.K. Parmanandka & Co. Chartered Accountants(Firm Registration No 322388E) as the Statutory Auditors of the Company for a term of fiveyears commencing from the conclusion of the 10th Annual General Meeting of the Companytill the conclusion of the 15th Annual General Meeting. Approval of appointment ofStatutory Auditors is being sought from the members of the Company at the ensuing AGM.Requisite letter pursuant to Section 139 and 141 of the Companies Act 2013 about theirconsent and eligibility for appointment as the Statutory Auditors of the Company has beenreceived by the Company

The Notes to Accounts as referred in the Auditors' Report are self - explanatory andhence does not call for any further explanation.

Internal Auditors

The Board had appointed M/s. C L Mundhra & Co. Chartered Accountant as theInternal Auditors of the Company to carry out the Internal Audit for the FY 19-20 underthe provisions of section 138 of the Companies Act 2013.

Secretarial Auditors

M/s. Robin Jain & Associates Company Secretary was appointed as the SecretarialAuditor of the Company to carry out Secretarial Audit for the FY 2019-20 under theprovisions of Section 204 of the Companies Act 2013. The Secretarial Audit Report isannexed to the Board's Report as Annexure C.

The report is self explanatory and hence do not call for any further explanations.

Personnel

The particulars and information of the employees as required under Section 197(12) ofthe Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 has been set out as Annexure - E to this Reportattached hereto. Th ere are no employees who are in receipt of remuneration in excess ofthe limit specified under Section 134(3) (q) read with Rule 5 (2) and 5 (3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Amendment Rules 2016.

Company's Website

Th e website of the Company www.smvdpolypack.com represents a perfect view of theCompany's businesses its products for all its customers and investors. The site not onlycarries the information about the Company but also includes all the mandatory informationand disclosures as per the requirements of the Companies Act 2013 and Companies Rules2014 and as per SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015viz. Financial Results of your Company Shareholding Pattern Directors' & CorporateProfile details of Board Committees Corporate Policies etc.

Listing of Securities in Stock Exchanges

The Securities of the Company are Listed on SME EMERGE platform of The National StockExchange of India Ltd. (NSE).

The Company is registered with both NSDL & CDSL for holding the shares indematerialized form and open for trading. The Company has paid all requisite Fees to theStock Exchange & Depositories.

Code of Conduct for Prevention of Insider Trading

In terms of the SEBI (Prohibition of Insider Trading) Regulations 2015 your Companyhas approved & adopted the Code of Conduct for prevention of Insider Trading & thecode of practices and procedure for fair disclosure of Un-published Price SensitiveInformation and the same is also placed on the Company's website: www.smvdpolypack.com.

Disclosures as per applicable acts SEBI (Listing obligations & DisclosureRequirements) Regulations 2015.

i) Related Party Transactions

All transactions entered with related parties during the FY18-19 were on arm's lengthbasis and were in the ordinary course of business and provisions of Section 188(1) are notattracted. Th ere have been no materially significant related party transactions with theCompany's Promoters Directors and others as defined in section 2(76) of the CompaniesAct 2013 and Regulation 23 of SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 which may have potential conflict of interest with the Company at large.Accordingly disclosure in Form AOC 2 is not required.

The necessary disclosures regarding the transactions are given in the notes toaccounts. The Company has also formulated a policy on dealing with the Related PartyTransactions and the same has been uploaded on the website of the Company.

ii) Number of Board Meetings

Th e Board of Directors met 7 times during the year under review on 19.05.201830.05.2018 30.06.2018 26.09.2018 11.10.2018 14.11.2018 & 28.02.2019 respectively.

Name of Directors Category No of Board Meetings Whether attended last AGM held on 30th September 2017 No. of Directorship in other public limited Companies No of Committee position held in other public limited companies
Held during the year attended As Chairman/ Chairperson As Member
Mr. Pramod Kumar Agarwal Chairman & Mg. Director 7 6 Yes NIL NIL NIL
Mrs. Sangita Agarwal Non-Executive Director 7 6 Yes NIL NIL NIL
Mr. Pawan Kumar Agarwal Non-Executive Director 7 5 Yes NIL NIL NIL
Mr. Nikhil Pansari Independent Director 7 6 No NIL NIL NIL
Ms. Shruti Singhal Independent Director 7 6 Yes NIL NIL NIL
Mr. Varun Roongta Independent Director 7 6 Yes NIL NIL NIL

iii) Committees of Board

The board has constituted three committees the details of which are as follows:-

AUDIT COMMITTEE - The Audit Committee was entrusted with review of quarterly andannual financial statements before submission to the Board review of observations ofauditors and to ensure compliance of internal control systems authority for investigationand access for full information and external professional advice for discharge of thefunctions delegated to the Committee by the Board.

Sl. No. Name Designation Nature of Directorship
1 Mr. Nikhil Pansari Chairman Non-Executive Independent
2 Ms. Shruti Singhal Member Non-Executive Independent
3 Mr. Pawan Kumar Agarwal Member Non-Executive Non- Independent

All the members of the Committee are financially literate.

The terms of reference of the Audit Committee are as follows :-

1) Oversight of the listed entity's financial reporting process and the disclosure ofits financial information to ensure that the financial statement is correct sufficientand credible;

2) recommendation for appointment remuneration and terms of appointment of auditors ofthe listed entity and review and monitor the auditor's independence performance andeffectiveness of audit process;

3) approval of payment to statutory auditors for any other services rendered by thestatutory auditors;

4) reviewing with the management the annual financial statements and auditor's reportthereon before submission to the board for approval with particular reference to:

a) matters required to be included in the director's responsibility statement to beincluded in the board's report in terms of clause (c) of sub-section (3) of Section 134 ofthe Companies Act 2013;

b) changes if any in accounting policies and practices and reasons for the same;

c) major accounting entries involving estimates based on the exercise of judgment bymanagement;

d) significant adjustments made in the financial statements arising out of auditfindings;

e) compliance with listing and other legal requirements relating to financialstatements;

f) disclosure of any related party transactions;

g) modified opinion(s) in the draft audit report;

5) reviewing with the management the quarterly financial statements before submissionto the board for approval;

6) reviewing with the management the statement of uses / application of funds raisedthrough an issue (public issue rights issue preferential issue etc.) the statement offunds utilized for purposes other than those stated in the offer document / prospectus /notice and the report submitted by the monitoring agency monitoring the utilisation ofproceeds of a public or rights issue and making appropriate recommendations to the boardto take up steps in this matter;

7) reviewing and monitoring the auditor's independence and performance andeffectiveness of audit process;

8) approval or any subsequent modification of transactions of the listed entity withrelated parties;

9) scrutiny of inter-corporate loans and investments;

10) valuation of undertakings or assets of the listed entity wherever it is necessary;

11) evaluation of internal financial controls and risk management systems;

12) reviewing with the management performance of statutory and internal auditorsadequacy of the internal control systems;

13) reviewing the adequacy of internal audit function if any including the structureof the internal audit department staffing and seniority of the official heading thedepartment reporting structure coverage and frequency of internal audit;

14) discussion with internal auditors of any significant findings and follow up thereon;

15) reviewing the findings of any internal investigations by the internal auditors intomatters where there is suspected fraud or irregularity or a failure of internal controlsystems of a material nature and reporting the matter to the board;

16) discussion with statutory auditors before the audit commences about the nature andscope of audit as well as post-audit discussion to ascertain any area of concern;

17) to look into the reasons for substantial defaults in the payment to the depositorsdebenture holders shareholders (in case of non- payment of declared dividends) andcreditors;

18) to review the functioning of the whistle blower mechanism;

19) approval of appointment of chief financial officer after assessing thequalifications experience and background etc. of the candidate;

20) Carrying out any other function as is mentioned in the terms of reference of theaudit committee.

The audit committee shall mandatorily review the following information :

1) management discussion and analysis of financial condition and results of operations;

2) statement of significant related party transactions (as defined by the auditcommittee) submitted by management;

3) management letters / letters of internal control weaknesses issued by the statutoryauditors;

4) internal audit reports relating to internal control weaknesses; and

5) the appointment removal and terms of remuneration of the chief internal auditorshall be subject to review by the audit committee.

6) statement of deviations:

a) quarterly statement of deviation(s) including report of monitoring agency ifapplicable submitted to stock exchange(s) in terms of Regulation 32(1).

b) annual statement of funds utilized for purposes other than those stated in the offerdocument/prospectus/notice in terms of Regulation 32(7).

The Committee shall have the following powers:-

The Audit Committee shall be authorised to investigate any matter in relation to aboveterm of reference and shall have power :

1. To seek information from any employee.

2. To obtain outside legal or other professional advice.

3. To secure attendance of outsiders with relevant expertise if it considersnecessary.

Meetings held and attended during the year – 6 Audit Committee meetings on19.05.2018 30.05.2018 30.06.2018 11.10.18 14.11.2018 & 28.02.2019 respectivelywere held during the year under review.

Sl. No. Name Meetings held Meetings attended
1 Mr. Nikhil Pansari 6 6
2 Ms. Shruti Singhal 6 6
3 Mr. Pawan Kumar Agarwal 6 4

NOMINATION & REMUNERATION COMMITTEE

Sl. No. Name Designation Nature of Directorship
1 Mr. Nikhil Pansari Chairman Non-Executive Independent
2 Ms. Shruti Singhal Member Non-Executive Independent
3 Mr. Varun Roongta Member Non-Executive Independent

The terms of reference of the Nomination & Remuneration Committee are as follows:-

1) formulation of the criteria for determining qualifications positive attributes andindependence of a director and recommend to the board of directors a policy relating tothe remuneration of the directors key managerial personnel and other employees;

2) formulation of criteria for evaluation of performance of independent directors andthe board of directors;

3) devising a policy on diversity of board of directors;

4) identifying persons who are qualified to become directors and who may be appointedin senior management in accordance with the criteria laid down and recommend to the boardof directors their appointment and removal.

5) Whether to extend or continue the term of appointment of the independent directoron the basis of the report of performance evaluation of independent directors.

Meetings held and attended during the year – 1 meeting of NR committee was held on14.11.2018 during the year under review.

Sl. No. Name Meetings held Meetings attended
1 Mr. Nikhil Pansari 1 1
2 Ms. Shruti Singhal 1 1
3 Mr. Varun Roongta 1 1

STAKEHOLDER RELATIONSHIP COMMITTEE - Stakeholders Relationship Committee looks intoredressing of shareholders' and investors grievances like transfer of Shares non receiptof Balance Sheet etc.

Sl. No. Name Designation Nature of Directorship
1 Mr. Pramod Kumar Agarwal Chairman Executive
2 Mr. Pawan Kumar Agarwal Member Non-Executive Non-Independent
3 Mr. Varun Roongta Member Non-Executive Independent

The terms of reference of the Stakeholders Relationship Committee are as follows:-

1) Review the mechanism adopted for redressing the grievance of shareholders debentureholders and deposit holders and other security and the status of such redressal;

2) Review of the activities of the Secretarial Department of the Company inter aliaadherence to Service Standards and Standard Operating Procedures relating to the variousservices rendered by the Investor Services Department various initiatives taken to interalia reduce quantum of unclaimed dividends status of claims received and processed forunclaimed shares uploading of data relating to unclaimed deposits/ dividends on thewebsite of Investor Education & Protection Fund and the Corporation.

3) Review status of compliances with laws applicable to the Secretarial Department andits risk profile;

4) Review the Action Taken Report in respect of recommendations made by the Committee/Management;

5) Review the status of the litigation(s) filed by/ against the security holders of theCompany;

6) Review the mechanism adopted to review monitor and report transactions relating tosecurities which may be suspicious from a money laundering perspective in accordance withthe KYC & AML Policy relating to securities of the Corporation; and

7) The Committee shall perform such other functions as may be required under therelevant provisions of the Companies Act 2013 the Rules made there under and ListingRegulations.

8) To oversee the performance of the Registrar and Transfer Agents and recommendmeasures for overall improvement in the quality of investors services.

Meetings held and attended during the year – 1 meeting of SR committee was held on14.11.2018 during the year under review.

Sl. No. Name Meetings held Meetings attended
1 Mr. Pramod Kumar Agarwal 1 1
2 Mr. Pawan Kumar Agarwal 1 1
3 Mr. Varun Roongta 1 1

Note : The Company Secretary acts as the Secretary to all the Committees.

iv) Extracts of Annual Return

Th e Extracts of Annual Return in Form MGT 9 under the provisions of Section 92(3) ofthe Companies Act 2013 is attached as Annexure – F.

v) Risk Analysis

The Company has in place a mechanism to inform the Board members about the Riskassessment and mitigation plans and periodical reviews to ensure that the critical risksare controlled by the executive management.

vi) Internal Financial Control

Th e Company has in place adequate internal financial control as required under section134(5)(e) of the Act. During the year such controls were tested with reference tofinancial statements and no reportable material weakness in the formulation or operationswere observed.

vii) Loans Guarantees and Investments

There are no loans guarantees or investments made by the Company covered under theprovision of Section 186 of the Companies Act 2013.

viii) Subsidiaries Associates or Joint Ventures

Your Company does not have any subsidiaries joint ventures but it has 1 (one)associate M/s. Aashakiran Commodeal Pvt. Ltd. during the year under review. As per theprovision of Section 129(3) and rule 5 of the Companies (Accounts) Rules 2014 thestatement in AOC-1 containing the salient features of the financial statement of theassociate Company is given in Annexure –B.

ix) Evaluation of Board's Performance

During the year under review the Board in compliance with the Companies Act 2013 andapplicable Regulations of Securities & Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 has adopted formal mechanism forevaluating its performance and as well as that of its Committees and individual Directorsincluding the Chairman of the Board.

Th e process of review of Non-Independent Directors and the Board as a whole and itscommittees were undertaken in a separate meeting of Independent Directors on 14thNovember 2018 without the attendance of Non-Independent Directors and members of themanagement. At the meeting the performance of the Chairman was reviewed along with theother non-executive Directors. The meeting also assessed the quality quantity andtimeliness of the flow of information required for the Board to perform its dutiesproperly.

The Board of Directors separately evaluated the performance of each of the IndependentDirectors. The concerned Independent Director did not participate in the meeting at thetime of his/her evaluation.

Th e Directors have expressed their satisfaction with the evaluation process.

Based on the findings from the evaluation process the Board will continue to reviewits procedures and effectiveness in the financial year ahead with a view to practising thehighest standards of corporate governance.

x) Nomination Remuneration & Evaluation Policy.

Th e Company has laid down a Policy on Nomination Remuneration & Evaluation beingrecommended by the NR Committee of the Company in compliance with the requisite provisionsof the Companies Act 2013 & SEBI (LODR) Regulations 2015. The policy envisages asfollows: -

i) Criteria for appointment and removal of Directors Key Managerial Personnel (KMP)and Senior Management Executives of the Company.

ii) Remuneration payable to the Directors KMPs and Senior Management Executives.

iii) Evaluation of the performance of the Directors.

iv) Criteria for determining qualifications positive attributes and independence of aDirector.

xi) Vigil Mechanism (Whistle Blower Policy)

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013 readwith regulation 22 of the SEBI (LODR) Regulation 2015 a Vigil Mechanism for directorsand employees to report genuine concerns has been established. The Vigil Mechanism Policyis available on the website of the Company.

Management Discussion and Analysis Report

In compliance with Regulation 34(3) of Listing Regulations a separate section onManagement Discussion and Analysis which includes details on the state of affairs of theCompany is annexed as Annexure-D.

Conservation of Energy & Technology Absorption

Information pursuant to Section 134 (3) (m) of the Companies Act 2013 read with Rule 8of the Companies (Accounts) Rules 2014 are given is annexed as Annexure – A whichforms part of this report.

Foreign Exchange Earning & Outflow
Foreign Exchange Earning: Nil
Foreign Exchange Outgo: Nil

Industrial Relations

The industrial relation during the FY 2018-19 had been cordial. The Directors took onrecord the dedicated services and significant efforts made by the Officers Staff andWorkers towards the progress of the Company.

Significant & material orders passed by the Regulators or Courts or Tribunalsimpacting the going concern status & Company's Operations in Future

There have been no significant & material orders passed by regulators / courts /tribunals impacting going concern status and Company's operations in future.

Shifting of registered office

The Company has shifted its registered office from 71 BRB Basu Road Block A Room No– 513 Kolkata – 700 001 to 16 Strand Road Diamond Heritage Suite 804BKolkata – 700 001 w.e.f. 22nd April 2019. The earlier office of the Company wasdestroyed on account of fire at the ‘Bagree Market' premises

Acknowledgement

Your Directors would like to express their grateful appreciation for the assistance andco-operation received from the Financial Institutions Banks Government Authorities andShareholders during the year under review. Your Directors wish to place on record theirdeep sense of appreciation to all the employees for their commendable teamwork exemplaryprofessionalism and enthusiastic contribution during the year.

Registered Office : On behalf of the Board of Directors
16 Strand Road For SMVD Polypack Limited
Diamond Heritage 8th Floor Sd/- Sd/-
Suite No. – 804B Kolkata -700 001. Pramod Kumar Agarwal Sangita Agarwal
Chairman & MD Director
Date: 16th August 2019 DIN : 00324999 DIN : 02860390

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