DIRECTOR'S REPORT To The Members, Your Directors are pleased to present the 21st Annual Report and the Company's Audited Accounts for the financial year ended 31st March, 2015. 2. OPERATION REVIEW: The Company's turnover for the year stood at Rs. 10783.36 lacs which have been increased by 2.41% as compared to the previous year. The Profit before Tax (PBT) of the Company has fall down by 39.12% and it stood at Rs. 1117.62 lacs as compared to the previous year of Rs. 1835.78 lacs. 2014-15 was a year of great challenges for the packaging industry due to the escalating raw material cost and the Company's product prices are affected on account of reduced bargaining power with its clients due to intense competition from other players in the market. 3. SUBSIDIARY COMPANIES The Company does not have any subsidiary. . SHARE CAPITAL The paid up Equity Share Capital of the Company as at March 31, 2015 stood at Rs. 3842.70 lacs . During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2015, none of the Directors of the Company hold any instruments convertible into equity shares of the Company. 5. DIVIDEND: In a view of carry forward losses your Directors have not recommended any dividend for the current year and no amount is being transferred to the Reserves for the year ended on 31st March, 2015. 6. FIXED DEPOSITS: During the year under review, your company has not accepted any fixed deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 made there under. 7. HUMAN RESOURCE: The company has continued to maintain harmonious and cordial relations with its officers, 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 behavioral aspects. 8. MANAGEMENT DISCUSSION AND ANALYSIS: As per the provisions set out in the Clause 49 of the Listing Agreement, Management's Discussion and Analysis forms part of this Annual Report. 9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: Our Company has not advanced any Loans, Guarantees and investments covered under Section 186 of the Companies Act, 2013. 10. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES: There have been no materially significant related party transactions between the Company and the Directors, the management, the subsidiaries or the relatives except for those disclosed in the financial statements. Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contract or arrangement in Form AOC-2 does not form part of the report. 11. PARTICULARS OF EMPLOYEES: The table containing the names and other particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure C to the Board's Report. There is no employee employed throughout the Financial Year and in receipt of remuneration of Rs. 60 lacs or more, or employed for the part of the year and in receipt of Rs. 5 lacs or more a month. Hence, no disclosure is required pursuant to Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 12. DIRECTOR'S RESPONSIBILITY STATEMENT: Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, confirm that: a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; b) the Directors have 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 as at March 31, 2015 and of the loss of the Company for the year ended on that date; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Director's have prepared the annual accounts on a "Going concern basis"; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 13. CORPORATE GOVERNANCE: The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Statutory Auditor of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance. 14. DIRECTORS AND KEY MANAGERIAL PERSONNEL: Mr. Vikram Bhatt and Mr. Prahlad S. Patel, independent directors, had tendered their resignation due to pre-occupation w.e.f 1st November, 2014 & 03rd August,2015 respectively. The Board hereby places on record its sincere thanks and gratitude for the valuable contribution made by Mr. Vikram Bhatt & Mr. Prahlad S. Patel towards the company during their tenure as an Independent director. Pursuant to the provisions of Section 161 of the Act, Mr. Mittal Karsanbhai Patel & Mrs. Vandana Chandreshbhai Patel (woman director) was appointed as an additional director at the board meeting of the Company held on 10th February, 2015 & 26th May, 2015 respectively. Pursuant to the provisions of Section 161 of the Act, Mr. Shailesh K Desai was appointed as an Additional Director in the Board meeting held on 03rd August,2015 and in the same meeting pursuant to Section 196 of the Act, he was appointed as Managing Director for a period of 3 years w.e.f 03rd August,2015 subject to the shareholders approval in the general meeting. During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company. Pursuant to the provisions of Section 203 of the Act, which came into effect from April 1, 2014, the Mr. Krunal G. Shah, was re-designated as Chief Financial Controller of the Company and was categorises as Whole time Key Managerial Person for a period of 3 years w.e.f 01/01/2014 in the meeting of Board of Directors of the Company held on 27th May, 2014. Mr. Ankit Shah manager of the company has resigned on 17th June, 2015. The Board hereby places on record its sincere thanks and gratitude for the valuable contribution made by Mr. Ankit Shah towards the company during their tenure as a manager. 15. NUMBER OF MEETINGS OF THE BOARD: The Board met five times during the Financial Year, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed under Companies Act, 2013. 16. DECLARATION BY INDEPENDENT DIRECTORS: The Company has received necessary declaration from each Independent Director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. 17. POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION: The Current Policy is to have an appropriate mix of Executive and Independent Directors to maintain the independence of the Board, and separate its functions of Governance and Management. As on the date, the Board consists of 5 Directors, of whom none are Executive or Whole-time Directors, 2 are Non-Executive Directors, of which 1 is Independent Director , 1 is Non-Executive Non-Independent Director and 1 is Managing Director . The Board periodically evaluates the need for change in its composition and size. The policy of the Company on Director's appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of directors, and other matters provided under Sub-section (3) of Section 178 of the Companies Act, 2013, adopted by Board, is disclosed on the website of the Company. 18. EVALUATION OF PERFORMANCE OF BOARD: The Board of directors has carried out an formal annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Companies Act, 2013 and the corporate governance requirements as prescribed by Securities and Exchange Board of India ("SEBI") under Clause 49 of the Listing Agreements ("Clause 49"). The performance of the Board was evaluated by the Board after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent Directors, at which the performance of the Board, its committees and individual directors was also discussed. 19. COMMITTEES OF THE BOARD: The details pertaining to composition of various committees as per the provisions of Clause 49 of Listing Agreement and Companies Act, 2013 are included in the Corporate Governance Report, which forms part of this report. 20. FAMILIARISATION PROGRAMME The Company undertook various steps to make the Independent Directors have full understanding about the Company. The details of such familiarisation programmes have been disclosed on the Company's website: a<http:// www.srmtl.com/Code of Conduct.htm 21. INTERNAL FINANCIAL CONTROLS: The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report. 22. RISK MANAGEMENT: Apart from normal business risk, no major risk is foreseen that in the opinion of the Board may threaten the existence of the Company. During the Year, the Board has decided that Audit Committee shall identify risk, assess, monitor, review and report the risk engaged in the business and shall also carry out the role of Risk Management. 23. AUDITORS AND AUDITORS' REPORT: Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s Mahendra N. Shah & Co. (FRN: 105775W), Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the Twentieth AGM of the Company held on September 27, 2014 till the conclusion of the twenty third AGM to be held in the year 2017, subject to ratification of their appointment at every AGM. Auditors remark regarding Unpaid dividend on Preference Share & Non Provision of interest on loans of lenders :- The Company has filed a Composite Scheme of Compromise and Arrangement with its lenders and Shareholders u/ s 391 of the Companies Act, 1956 at larger bench of Gujarat High Court and on the Scheme becoming effective, all existing litigations and legal cases shall be terminated and the lenders shall forthwith withdraw all existing litigations and legal cases against the Company, the guarantors, the Directors of the Company as the case may be and the lenders shall simultaneously execute necessary applications/ affidavits/documents etc. to be promptly submitted to concerned courts, statutory authorities etc. in order to give immediate effect for such withdrawal of legal actions, cases or litigations. Thereafter the right of the lenders will be submerged and re-casted in the manner as proposed in the Scheme. In the said scheme, the issue of waiver of unpaid dividend on preference shares is also covered. The management is of the view as well as legally advised that the said default will be also sorted out on final outcome of the scheme. 24. SECRETARIAL AUDITOR: Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed M/s Samdani Shah & Associates, Company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as Annexure B and forms an integral part of this report. There are some observations made by the Secretarial Auditor in their report for which the Board of Directors hereby give its comments/ explanation as under: i) "The Board of Directors has already noted the said delay and had duly disclosed to the Stock Exchange as well as the penalty for the non-compliance is duly paid to both the stock exchanges where the company is listed.The Company has appointed woman director in the Board meeting held on 26th May,2015 and complied with the provisons of the Act & listing agreement." ii) "The Board of Director has given sufficient reasons for the delay in submission of Annual report for the year ended on 31.03.2014 and has also paid the penalty to BSE for the same." iii) "The Company has filed a Composite Scheme of Compromise and Arrangement with its lenders and Shareholders u/s 391 of the Companies Act, 1956 at larger bench of Gujarat High Court and on the Scheme becoming effective, all existing litigations and legal cases shall be terminated and the lenders shall forthwith withdraw all existing litigations and legal cases against the Company, the guarantors, the Directors of the Company as the case may be and the lenders shall simultaneously execute necessary applications/ affidavits/documents etc. to be promptly submitted to concerned courts, statutory authorities etc. in order to give immediate effect for such withdrawal of legal actions, cases or litigations. Thereafter the right of the lenders will be submerged and re-casted in the manner as proposed in the Scheme. In the said scheme, the issue of waiver of unpaid dividend on preference shares is also covered. The management is of the view as well as legally advised that the said default will be also sorted out on final outcome of the scheme." 25. REVISION OF ACCOUNTS The accounts of the Company were approved and adopted by the Board of Directors in meeting held on 26/05/2015. The Company has composite plant for manufacture of Laminated Tubes and various other products with more than 700 machines. The determination of useful life of the said assets was done by management and accordingly the accounts were approved by the Board in its meeting 26/05/2015.Later on, it was decided that the expert of machineries be appointed as valuer to determine the useful life of all machinaries. Accordingly Shri Mukesh M. Shah-Gov't approved valuer was appointed to carry on the assignment and based on his report, the accounts were revised. The management therefore decided to revisit the accounts based on valuer report which resulted into change in useful life of certain assets and the accounts are therefore restated after considering change in the amount of depreciation and value of fixed assets on the basis of useful life of the assets. 26. EXTRACT OF ANNUAL RETURN As provided under Section 92(3) of the Act, the extract of annual return is given in Annexure A in the prescribed Form MGT-9, which forms part of this report. 27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: A) CONSERVATION OF ENGERGY: i. Steps taken or impact on conservation of energy: The Company has taken several steps for energy conservation to optimize power consumption in all its plant and offices. The Natural Light Dome installed on the roof top of the plant building saves power during the daytime. The Company has installed electronic cut in /cut off system on cooling towers as a means of saving energy. The load distribution across the plants is estimated and modification for uniform load distribution based on actual/correct load on DG sets ensures conservation of energy. The Company has installed UPS System in Film Plant to conserve use of Diesel for Power Generation. The company has increased power from GEB for ER-WE-PA plant and stopped self generation which was expensive. This will result in energy saving of Rs. 3.5 lacs/ month. Air audit has been carried out and all leakage is arrested. Compressed air used for cleaning is stopped. This will save the wasteful energy. The Airlines sizes have been optimized for energy saving. ii. Steps taken by the Company for utilizing alternative sources of energy: Not Applicable iii. Capital Investment on energy conservation equipments: Not Applicable B) TECHNOLOGY ABSORPTION: i. Efforts made towards Technology Absorption: The application of latest world class technology in the manufacturing processes has resulted into products of desired qualities and has significantly contributed in development of various cost efficient and eco-friendly packaging materials. Company has invested in state of art automatic thickness, measuring control system which enable saving of scarce raw material and enhance productivity and quality of laminate and make the process more competitive. The Company has re commissioned Auto Gauge Control on Extrusion Coating Machine to reduce material consumption. ii. the benefits derived like product improvement, cost reduction, product development or import substitution : The development of new Laminates has resulted in very good business volumes. Consequent to the efforts of the Company as stated above, there has been a marked improvement in the productivity. Such efforts have also resulted in reduction of cost & wastages. The market base has increased and the product range has also widened. The Company will also be able to offer the products with latest technology to the consumers. iii. in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) : The Company is constantly ensuring up gradation of technology and innovation in its products and production process. The Company has set up state of art facilities with technology imports from world leaders. The technology absorption is complete and the Company has now developed indigenous capabilities in areas of engineering and web development. The Company has acquired technology to make PBL Tubes, Tubes with Top Seal, etc which could have very good future. iv. the expenditure incurred on Research and Development : Not Applicable C) FOREIGN EXCHANGE EARNINGS AND OUTGOING: Foreign Exchange Earned 1244.99 1770.99 Foreign Exchange Out go 1719.82 1864.99 28. DISCLOSURES: Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Details relating to deposits covered under Chapter V of the Act. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme. 4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. As per the requirement under The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 read with rules made there under, your Company has constituted Internal Complaints Committee which is responsible for redressal of complaints related to sexual harassment. During the year under review, there were no complaints pertaining to sexual harassment. 29. ACKNOWLEDGEMENT: The Directors wish to convey their gratitude and appreciation to all of the Company's employees for their tremendous personal efforts as well as their collective dedication and contribution to the Company's performance. The Directors would also like to thank the employee unions, shareholders, customers, dealers, suppliers, bankers, government and all other business associates for their continued support extended to the Company and the Management. By Order of the Board of Directors R. S. Patel Chairman Date: 03/08/2015 Place: Ahmedabad Regd. Office: 603, "Shikhar", Shreemali Society, Nr. Vadilal House, Mithakali, Navrangpura, Ahmedabad-380009 CIN: L25200GJ1993PLC020880 |