DIRECTORS' REPORT TO THE MEMBERS Your Directors have pleasure in presenting their 58th Annual Report together with the Audited Accounts for the year ended 31st March 2015. STATE OF COMPANY'S AFFAIRS During the year under review, the Company has achieved a gross turnover of Rs. 203.52 Crore as against Rs. 183.34 Crore in the preceding financial year, an increase of 11% and has incurred a net loss of Rs. 0.49 Crore as against a net loss of Rs. 6.47 Crore in the preceding year. The Company has achieved the growth during the year in comparison to the preceding financial year but the result are less than expected due to less growth in Indian Economy in the last financial year. Sluggish economic development resultant to slow down of upcoming Housing Project has adversely impacted the performance of the Plywood Division. In spite of adverse operating conditions, the Company has been able to substantially reduce its losses due to effective cost control mechanism and low volatile foreign exchange during the year under consideration. Lower availability, frequent change in climatic condition and high cost of green leaf causes less growth of tea production. However the Tea Division of the Company has been able to achieve operating Profits due to higher realization during the year. CHANGES IN THE NATURE OF BUSINESS, IF ANY No Change in the nature of the business of the Company done during the year. DIVIDEND In absence of profit, the Directors regret their inability to recommend any dividend for the year ended 31st March 2015. RESERVES Due to inadequacy of profit, no general reserve is created for the year ended 31st March 2015. SHARE CAPITAL The paid up Equity Share Capital as on 31st March, 2015 was Rs. 4.52 Crores. During the year under review the Company has not issued any shares or any convertible instruments. BORROWINGS The total borrowing stood at Rs. 4602.69 Lacs as at 31st March, 2015 as against Rs. 5127.77 Lacs as on 31st March, 2014, i.e. decrease of Rs. 525.08 Lacs. DEPOSITS The Company has not accepted any deposits from public, and as such, there are no outstanding deposits in terms of Companies (Acceptance of Deposits) Rules, 2014. CORPORATE SOCIAL RESPONSIBILITY The provisions of Section 135 of the Companies Act, 2013 regarding Corporate Social Responsibility are not attracted to the Company. However, the Company has been, over the years, pursuing as part of its corporate philosophy, an unwritten CSR policy voluntarily like providing scholarship to poor brilliant students, sponsoring sports program etc. MANAGEMENT DISCUSSION AND ANALYSIS REPORT As required under Clause 49 of the Listing Agreement with Stock Exchanges, the Management Discussion and Analysis Report is attached as "Annexure-1" and forms part of this Report of the Directors. DIRECTORS At the 57th Annual General Meeting of the Company held on 25th September, 2014 the Company had appointed the existing Independent Directors Shri Sujit Chakravorti (DIN: 00066344), Shri Ratan Lal Gaggar (DIN: 00322904), Shri Kali Kumar Chaudhuri (DIN: 00206157), Shri Probir Roy (DIN: 00033045) as Independent Directors under the Companies Act, 2013 for 5 consecutive years upto 31st March 2019. The Companies Act, 2013 requires that a Woman Director should be member of the Board of Directors and in compliance with that at the Board Meeting held on 6th February, 2015, Smt. Sheela Chitlangia (DIN: 00174354) has been appointed as Additional Director of the Company under Section 149, 152 and 161 of the Companies Act, 2013 and Clause 49 of the Listing Agreement to hold office until conclusion of the forthcoming Annual General Meeting. The Company has received a Notice under Section 160 of the Companies Act 2013 from a Member of the Company signifying his intention to propose Smt. Sheela Chitlangia as a candidate for the office of Non Executive Director of the Company, who is liable to retire by rotation. Sri Naresh Paschisia (DIN: 00233768), who was associated with the Company as Independent Director since 16th September 2005, has resigned from the Board of the company with effect from 26th September, 2014. Your Company places on record its appreciation for the valuable services rendered by him as Director. In accordance with the provisions of Companies Act, 2013 Shri Sohan Lal Yadav (DIN: 00207333) Executive Director retires by rotation and being eligible offers himself for re-appointment. DECLARATION GIVEN BY INDEPENDENT DIRECTOR UNDER SECTION 149(6) All Independent Directors have given the declaration that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Clause 49 of Listing Agreement. BOARD MEETINGS During the year under consideration, four Board Meetings were convened and held. The Details of which are given in Corporate Governance Report. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between two meetings. ANNUAL EVALUATION Pursuant to the provisions of Companies Act, 2013 and clause 49 of the Listing Agreement, the Board has carried out annual performance evaluation of its own performance, the directors individually as well the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholder Relationship Committee. MANAGERIAL REMUNERATION Details of the ratio of the remuneration of each director to the median employee's remuneration and other details as required pursuant to Rule 5(1) and details of the every employee of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as "Annexure-2" and forms a part of this Report of the Directors. KEY MANAGERIAL PERSONNEL The following three personnel were formally appointed as Key Managerial Personnel of the Company effective from 1st April, 2014 in compliance with the provisions of Section 203 of the Companies Act, 2013: a) Shri Sudeep Chitlangia b) Shri Ravi Kumar Murarka c) Ms. Jaya Sengupta Ms. Jaya Sengupta, who was associated with the company as Chief Financial Officer (CFO) since April 2014, has resigned from the Company with effect from 7th March, 2015. Your Company places on record its appreciation for the valuable services rendered by her as CFO. Remuneration and other details of the Key Managerial Personnel for the year ended 31st March, 2015 are mentioned in the Extract of Annual Return which is attached as "Annexure-9" and forms a part of this Report of the Directors. AUDIT COMMITTEE The Company has in place the Audit Committee in accordance with the provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with Stock Exchange. The Committee was constituted on 31st January 2002. The Members of the Committee are Shri Sujit Chakravorti as Chairman and Shri Ratan Lal Gaggar and Shri Probir Roy as Members, all are Independent Directors. The Company Secretary is the Secretary of this Committee. The Managing Director, Chief Financial Officer and the Statutory Auditors are permanent invitees to the meeting. The details of all related party transactions are placed periodically before the Audit Committee. During the year there were no instances where the Board had not accepted the recommendations of the Audit Committee. The terms of reference along with details of the number and dates of meetings of this Committee which were held during the year ended 31st March, 2015, attendance of the Directors and sitting fees paid to them are given separately in the attached Corporate Governance Report. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTY All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis. The detail of the policy on Related Party Transactions as approved by the Board of Directors and Audit Committee is available on the Company's website www.sardaplywood.com VIGIL MECHANISM/ WHISTLE BLOWER POLICY In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behavior, the Company has adopted vigil mechanism policy. The detail of the policy is available on the Company's website www.sardaplywood.com PARTUCULARS OF LOANS, GUARANTEES OR INVESTMENTS It is the Company's policy to not to give loans directly, or indirectly, to any person (other than to employees under contractual obligations) or to other body corporate or give any guarantee or provide any security in connection with a loan to any other body corporate or person. The Company also does not make any investment in securities of any other body corporate. NOMINATION & REMUNERATION COMMITTEE The Remuneration Committee was constituted on 30th October 2003. To comply with the requirements of the Companies Act, 2013 and the Listing Agreements with the Stock Exchanges, the name of the Committee was changed to Nomination & Remuneration Committee effective from 26th May 2014. The Members of the Committee are Dr. Kali Kumar Chaudhuri as Chairman and Shri Ratan Lal Gaggar and Shri Sujit Chakravorti as Member, all are Independent Directors. The Company Secretary is the Secretary of this Committee. The terms of reference and details of the number and dates of meetings of this Committee which were held during the year ended 31st March, 2015, attendance of the Directors and sitting fees paid to them are given separately in the attached Corporate Governance Report. REMUNERATION POLICY The Company has formulated a policy on Director's selection and appointment, payment of remuneration, Directors qualifications, positive attributes, independence of Directors, selection and appraisal of performance of Key Managerial Personnel and Senior Management and their remuneration and other related matters as applicable under Section 178(3) of the Companies Act, 2013. The Company's Criteria for payment of remuneration to the Non Executive Directors and Familiarization Programme undertaken for Independent Directors are available on the Company's website www.sardaplywood.com and the Remuneration Policy is separately attached as "Annexure-3" and forms a part of this Report of the Directors. STAKEHOLDERS RELATIONSHIP COMMITTEE The Shareholders'/ Investors' Grievance Committee was constituted on 22nd December 1986. To comply with the requirements of the Companies Act, 2013 and the Listing Agreements with the Stock Exchanges, the name of the Committee was changed to Stakeholder Relationship Committee effective from 26th May 2014. The Members of the Committee are Dr. Kali Kumar Chaudhuri as Chairman and Shri Ratan Lal Gaggar and Shri Sudeep Chitlangia as Members, majority of the members are Independent Directors. The Company Secretary is the Secretary of this Committee. The Committee has delegated the responsibility for share transfers and other routine share maintenance work to the Company Secretary/ Compliance Officer and to M/s Maheswari Datamatics Private Limited, the Registrars and Share Transfer Agents of the Company. Minutes of the Committee Meetings are circulated to all Directors and discussed at the meetings of the Board of Directors. The Committee also reports to the Board on matters relating to the shareholding patterns, shareholding of major shareholders, insider trading compliances, movement of share prices, redressal of complaints, Reports on SCORES of SEBI and all compliances under the Companies Act, 2013 and the Listing Agreements with the Stock Exchanges. The terms of reference and details of the number and dates of meetings of this Committee which were held during the year ended 31st March, 2015, attendance of the Directors and sitting fees paid to them are given separately in the attached Corporate Governance Report. RISK MANAGEMENT POLICY Risk is inherent in all business activities. Every employee of the Company in one way or the other, and in varying degrees manages risk. It is well accepted that the adoption of a strategic and formal approach to risk management will improve decisionmaking, enhance outputs and fix accountability. The Company has formulated a policy on risk management which aims is not to eliminate risk, rather to manage the risks involved in most business activities, to maximize opportunities and to minimize adversity. Effective risk management requires: • A strategic focus and clear planning, • Forward thinking and active approaches to management, • Balance between the cost of managing risk and the anticipated benefits, and • Contingency planning in the event of critical threats and realize Company mission. The detail of the policy as approved by the Board of Directors is available on the Company's website www.sardaplywood.com DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed: (i) That in the preparation of the accounts for the year ended 31st March 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (ii) That the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year on that date; (iii) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) That the Directors have prepared the accounts for the year ended 31st March 2015 on a 'going concern' basis. (v) That the Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively. (vi) That the Directors incorporated proper systems to ensure compliance with the provisions of all applicable laws was in place and were adequate and operating effectively. CORPORATE GOVERNANCE The Company has in place the SEBI guidelines pertaining to Corporate Governance. During the year under consideration the Company had a seven member of Board of Directors consisting of four Independent Directors, one non-executive Woman Director and one Whole-time Director and Managing Director. The Independent Directors received sitting fees for attending the Board and Committee meetings of the Directors. The sitting fees paid to the Directors are within the limits prescribed under the Companies Act, 2013 and Rules thereon. The Corporate Governance Report giving the details as required under Clause 49 of the Listing Agreement with the Stock Exchange as given separately as "Annexure—4" and forms part of this Report of the Directors. The Corporate Governance Certificate for the year ended on 31st March, 2015 issued by Mr. Ajay Agrawal of Messers G. P. Agrawal & Co., Chartered Accountants, Statutory Auditor of the Company, is also attached as "Annexure-5" and forms a part of this Report of the Directors. The Company has in place an Insider Trading Code for compliance with the Securities Exchange Board of India (Prohibition of Insider Trading) Regulations 1992. Shri Ravi Kumar Murarka, Company Secretary is the Compliance Officer responsible for compliance with the Insider Trading procedures. Details of securities transactions by insiders are placed before the Board of Directors of the Company and also notified to the Stock Exchanges. Shri Sudeep Chitlangia, Managing Director has given their certificate under Clause 49(IX) of the Listing Agreement with the Stock Exchange regarding the annual financial statements for the year ended on 31st March, 2015 to the Board of Directors. The Managing Director has given his certificate under Clause 49 (II)(E) of the Listing Agreement with the Stock Exchanges regarding compliance with the Code of Conduct of the Company for the year ended 31st March, 2015, which is attached as "Annexure-6" and forms a part of this Report of the Directors. AUDITORS STATUTORY AUDITORS Messrs G. P. Agrawal & Co. (Firm Registration No.302082E), Chartered Accountants have been appointed as Statutory Auditors of the Company at the last Annual General Meeting held on 25th September, 2014 for a period of three years subject to ratification by members at every consequent Annual General Meeting. Therefore, ratification of appointment of Statutory Auditors is being sought from the members of the Company at the ensuing Annual General Meeting. There are no qualifications or observations or remarks made by the Auditors in their Report. SECRETARIAL AUDITORS Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messers A. K. Labh & Co, Company Secretaries to undertake the secretarial audit of the Company. The Secretarial Auditor's Report is attached as "Annexure-7" and forms a part of this Report of the Directors. There are no qualifications or observations or remarks made by the Auditors in their Report. INVESTOR EDUCATION & PROTECTION FUND The provisions of Section 125(2) of the Companies Act, 2013 do not applicable for the Company as there was no dividend declared and paid in the last financial year. STOCK EXCHANGE LISTING The Equity Shares of the Company are listed at the Bombay Stock Exchange Limited. The Company confirms payment of listing fee to the Bombay Stock Exchange Limited for the year 2015-2016. BUSINESS RESPONSIBILITY REPORTING The provisions of Clause 55 of the Listing Agreement with the Stock Exchanges are not applicable to the Company and therefore the Company has not undertaken business Responsibility Reporting. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The prescribed particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo required under Section 134(3)(m) of the Companies Act, 2013 read with Rule-8 of the Companies (Accounts) Rules, 2014 are set out in "Annexure-8" forming part of this Report of the Directors. EXTRACT OF ANNUAL RETURN The details as required under Section 92(3) of the Companies Act 2013, read with Rule - 12 of the companies (Management and Administration) Rules, 2014 is furnished in Form No. MGT-9 is enclosed herewith as "Annexure-9" and forms part of this Report of the Directors". MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT No material changes and commitments affecting the financial position of the Company occurred during the year ended 31st March, 2015. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT 2013 The Company has constituted Internal Complaint Committee on 26th May, 2014 in compliance with the provisions of Sexual Harassment of Woman at Workplace (Prevention, Prohibition & Redressal) Act 2013. The Members of the Committee are Ms. Jaya Sengupta* as Presiding Officer and Smt. Deepika Das, Smt. Sharmistha Pal, Shri Ravi Kumar Murarka, Shri Ardhendu Chatterjee and Smt. Madhumita Paul as Members. During the year, the Committee had not received any complaint from any employee or worker of the Company regarding sexual harassment at the workplace. SUBSIDIARIES, JOINT VENTURES & ASSOCIATE COMPANIES The Company is having two Associate Companies namely; M/s P. S. Plywood Products Private Limited and M/s Pro-Sports Management Limited at the end of the year 31st March, 2015. ISO CERTIFICATION The Company's factory at Rajkot, Gujarat have been certified ISO 14001:2004 for Environmental Management Systems Standards. ANNEXURES FORMING A PART OF THIS OF THE DIRECTOR'S REPORT The Annexure referred to in this Report and other information which are required to be disclosed are annexed herewith and form a part of this Report of the Directors: Annexure - 1 : Management Discussion & Analysis Report Annexure - 2 : Particulars of Remuneration Annexure - 3 : Remuneration Policy of the Company Annexure - 4 : Corporate Governance Report Annexure - 5 : Certificate from Statutory Auditors on Corporate Governance Annexure - 6 : Managing Directors Certificate under Clause 49 (II)(E) of Listing Agreement on compliance of Code of Conduct Annexure - 7 : Secretarial Audit Report Annexure - 8 : Prescribed particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo. Management Discussion & Analysis Report Annexure - 9 : Extract of the Annual Return in Form No. MGT-9 ACKNOWLEDGEMENT Your Directors record their sincere appreciation for the support and co-operation received from the Financial Institutions, Banks, Dealers, Suppliers, Customers, Shareholders, various Government authorities and other associated with the Company. Your Directors also place on record their appreciation of the dedication and commitment of all employees in achieving and sustaining excellence in all areas of the business. For and on behalf of the Board [SUJIT CHAKRAVORTI] Director (DIN: 00093908) [SUDEEP CHITLANGIA] Managing Director (DIN: 00066344) Dated: 27th May 2015 Registered Office : 9, Parsee church Street Kolkata - 700001 |