DIRECTORS' REPORT DEAR MEMBERS, Your Directors are pleased to present the 36th Annual Report on the business and operations of the Company along with audited statements of accounts for the year ended 31st March 2016. CORPORATE REVIEW Prices of Paper during the year under review continued to rule easy showing some signs of revival towards the end of year. However, prices of inputs also remained soft resulting in stable margins. There was a breakdown in Steam Turbine at Shree Rishabh Papers, which partially affected the operations during first half of year. However, by taking quick remedial measure, the position was corrected and normal operations were restored. Total revenues of the Company at Rs.390.97 crores were higher by about 5% as compared to Rs.373.49 crores of last year. PBIDT of the Company stood at Rs.24.30 crores as against Rs.27.90 crores of last year due to lower other income of Rs.1.49 crores against Rs.5.99 crores of last year. Net profit after tax at Rs.8.67 crores was marginally lower as compared to Rs.9.80 crores of last year. Certain upgradations done during the year have already started showing results and your Management expects that performance of the Company should remain satisfactory in the coming year. PERFORMANCE REVIEW SHREYANSPAPERS Total paper production in this unit was marginally higher at 45872 MTs as compared to 43307 MTs of last year. During the year under review, as mentioned in the last year's Directors' Report, major up-gradations in Pulp Mill were undertaken, which have improved the operational parameters. Some modernizations on Paper Machine were also undertaken, which included calendering machine which has further resulted in improvement in overall quality of paper. Up-gradations of Oxygen Delignification [ODL] Plant are slightly delayed, due to delay in deliveries on part of suppliers and are expected to be completed in first half of the current year. Total revenues of this unit were Rs. 243.34 crores as against Rs. 228.43 crores of last year. SHREE RISHABH PAPERS As stated above, there was some effect on the operations of this unit due to breakdown in Steam Turbine; but still by taking fast corrective actions and improvement in other parameters, the unit could stabilize the operations very fast and could maintain production levels at 28649 MTs as compared to 28555 MTs of last year and total revenues were also maintained at Rs.147.63 crores against Rs.145.06 crores of earlier year. Overall performance in this unit was satisfactory. FINANCIAL REVIEW SHARE CAPITAL The paid up Equity Share Capital as on March 31, 2016 was Rs.13.82 crores. During the year under review, the Company has neither issued any shares nor granted stock options and nor sweat equity. FINANCE Fresh long term debt of Rs.18.18 crores was raised during the year. Also during the year Rs. 4.18 crores out of existing loans were repaid. Overall financial cost remained under control by judicious use of resources. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. RESERVES Company proposes to transfer Rs. 20.00 crores to general reserve out of surplus available. DIVIDEND Your Directors recommend a dividend of Rs.1.20 per share [i.e. 12%] for the financial year ended 31st March 2016 (previous year 12%). The dividend, if approved by the shareholders, will be paid to all the equity shareholders whose names appear in the Register of Members as on 3th August, 2016. The proposed dividend will cost the Company Rs. 2.00 crores, inclusive of all taxes DEPOSITS At the end of the year, fixed deposits from the members and Directors were outstanding to the tune of Rs. 3.53 crores and Rs. 0.55 crore respectively. There were no overdue deposits as on 31st March 2016. The company has accepted deposits from the members falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies [Acceptance of Deposits] Rules, 2014. FUTURE PLANS/PROSPECTS Your Company believes that continuous up-gradation of technology is a pre-requisite for sustaining the performance of the Company. Besides completing on-going project, Company proposes to revamp Shree Rishabh Papers by upgrading Paper Machine and other supporting equipments. Details are under preparation and are likely to be finalized very shortly. Other normal capital expenditure will continue to be incurred wherever necessary to keep the operations healthy. NUMBER OF MEETINGS HELD The details of Board and Committee Meetings are given in the Corporate Governance Report. DIRECTORS Sh. Kunal Oswal, Wholetime Director of the Company, is liable to retire by rotation at the forthcoming Annual General Meeting under article 86 (1) of Article of Association of the Company and being eligible, offer himself for reappointment. Dr. Shalini Gupta ceased to be Director due to her resignation and in her place the Board has appointed Dr. Pratibha Goyal as an Additional Director (Independent) w.e.f. 24th May, 2016. All Independent Directors have given declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015) BOARD EVALUATION Pursuant to provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out an annual performance evaluation of its own performance and the performance of the individual Directors as well as the evaluation of the working of its committees. The manner in which the evaluation was carried out has been explained in the Corporate Governance. REMUNERATION POLICY The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their Remuneration. The said policy has been uploaded on the website of the Company. The Key provisions of Nomination and Remuneration policy are appended as an Annexure I to the Board's report. AUDIT COMMITTEE The company has duly constituted Audit Committee, the scope of which is quite comprehensive and is in conformity with the provisions of the Companies Act, 2013 and Listing Regulations. The composition of the Audit Committee is given in Corporate Governance Report. All the recommendations of the Audit Committee were accepted by the Board. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM/ WHISTLE BLOWER POLICY The Company has adopted the Whistle Blower Policy/Vigil mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Company's Code of Conduct and Ethics. Such mechanism/policy is also uploaded on the website of the Company. STATUTORY AUDITORS At the Annual General Meeting held on 13th August, 2014 M/s S. C. Vasudeva & Company, New Delhi, were appointed as statutory auditors of the Company to hold office till the conclusion of the 37th Annual General Meeting. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s S.C. Vasudeva & Company, New Delhi, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that their appointment is in accordance with the provisions of Section 141 of the Companies Act, 2013. The auditors' report on the accounts of the Company for the year under review requires no comments. COST AUDIT M/s Rajan Sabharwal & Associates were appointed as Cost Auditors of your Company for auditing the cost accounts records for the financial year 2015-16 under provisions of Section 148 of the Companies Act, 2013. They are likely to submit Cost Audit Report within the prescribed time limit. Furthermore the Board has re-appointed M/s Rajan Sabharwal & Associates as Cost Auditors of the Company for the financial year 2016-17. SECRETARIAL AUDIT M/s P. S. Bathla & Associates, Practising Company Secretaries, at Ludhiana, were appointed to conduct the secretarial audit of the Company for the financial year 2015-16, as required under Section 204 of the Companies Act, 2013 and Rules made there under. The secretarial audit report for FY 2015-16 is appended as an Annexure II to the Board's report. The Secretarial auditors' report for the year under review requires no comments. The Board has re-appointed M/s P. S. Bathla & Associates, Practising Company Secretaries, Ludhiana as secretarial auditor of the Company for the financial year 2016-17. RELATED PARTY TRANSACTIONS All Related Party transactions entered during the financial year were on arm's length basis and in the ordinary course of business. There were no materially significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval. There was no material contract or arrangement or transactions with Related Party during the year. Thus, disclosure in form AOC-2 is not required. The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act, 2013, the rules there under and Listing Regulations This Policy as considered and approved by the Board has been u pl oad ed on th e web si te of th e C om pan y at <http://www.shreyansgroup.com/upload/c1449201532SIL> Rel ated Party Transaction Policy 07 11 2015.pdf PARTICULARS OF EMPLOYEES The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as an Annexure III and forms an integral part of this report. EXTRACT OF ANNUAL RETURN In accordance with Section 134(3) (a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as an Annexure IV to the Board's report. INDUSTRIAL RELATIONS The company maintained healthy, cordial and harmonious industrial relations at all levels. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY The Company has been addressing various risks through well defined risk management policy/procedures, which in the opinion of the Board may threaten the existence of the Company. INTERNAL FINANCIAL CONTROL SYSTEMS The Company has laid down adequate internal financial controls with reference to financial statements. During the year such controls were tested and no material weakness in their operating effectiveness was observed. ASSOCIATES AND SUBSIDIARIES The Company has no Associates & Subsidiaries as on March 31, 2016. CORPORATE GOVERNANCE As per the provisions of Listing Regulations, a separate Report on Corporate Governance practices followed by the Company together with a Certificate from the Practising Company Secretary, confirming compliance forms part of this report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 the particulars relating to conservation of energy, technology, absorption and foreign exchange earnings and outgo is appended as an Annexure V to the Board's Report. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES Your company, in collaboration with a local NGO in Ahmedgarh, has set up an Eye Hospital. Besides contributing in setting up of this hospital, financial assistance is extended on monthly basis. Eye care is provided to needy persons on subsidized rates/free of cost. Your company is also involved with various educational institutions for providing scholarship/financial assistance to deserving students on recommendations of the managements of such institutions. Your company actively participates with number of NGOs for holding medical check-up camps, sports events and other social activities. Your Company provides fire fighting services, as and when need arises, in nearby areas through its own fire tender and fire fighting staff. Annual Report on Corporate Social Responsibility [CSR] activities is appended as an Annexure VI. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations. DIRECTORS' RESPONSIBILITY STATEMENT In accordance with the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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 the company and that such internal financial controls are adequate and were operating effectively. (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. ACKNOWLEDGEMENT Your Directors place on record their sincere appreciation for the contributions made by the employees through their dedication, hard work and commitment in achieving your Company's performance. In an increasingly competitive environment collective dedication of employees is delivering superior and sustainable shareholder value. The Board has pleasure in recording its appreciation of the assistance, co-operation and support extended to the Company by the Govt. Authorities, Commercial Banks, Financial Institutions and Depositors. The Board also places on record its sincere appreciation towards the Company's valued customers, vendors, shareholders and investors for their continued support to the Company. For and on Behalf of the Board Rajneesh Oswal Chairman & Managing Director (DIN : 00002668) Place : Ludhiana Date : May 24, 2016 |