DIRECTORS' REPORT TO THE MEMBERS, The Directors of your Company are pleased to present the 43rd Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2015. DIVIDEND The Directors have decided not to recommend any dividend on equity shares due to unabsorbed depreciation and accumulated losses of earlier years. Because of this reason, 4% dividend aggregating to Rs.24.00 lacs (Previous Year Rs.23.40 lacs) including dividend distribution tax, on the outstanding 4% cumulative redeemable preference shares has also been accumulated. SHARE CAPITAL The paid up Equity Share Capital as on March 31, 2015 was Rs.1352.17 lacs. During the year under review, the Company has not issued any shares with differential voting rights, sweat equity shares and equity shares under Employees Stock Option Scheme. PUBLIC DEPOSITS The Company has neither invited nor accepted any public deposit falling within the purview of provisions of Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. DIRECTORS & KEY MANAGERIAL PERSONNEL During the year, the Company had conducted postal ballot process for the appointment of Independent Directors under the provisions of Companies Act, 2013. As per the results of postal ballot declared on March 27, 2015, the members of the Company had appointed the existing Independent Directors viz. (i) Mr. P. N. Singh (DIN: 00076392) (ii) Mr. L. C. Sharma (DIN: 00196158) and (iii) Mr. L. C. Parashar (DIN: 03394414) as Independent Directors under the provisions of Companies Act, 2013 for a period of five consecutive years. All Independent Directors have given declaration that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. At the Board Meeting held on March 27, 2015, the Board has appointed Ms. Tripta Goswami (DIN: 07111342) as an Additional Director of the Company. A resolution for her appointment as a Director is being proposed in the Notice of the ensuing Annual General Meeting for the approval of the Members. In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. B. N. Pasari (DIN: 00101519), Non-Executive Director of the Company retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting. During the year, Mr. N. K. Pasari, Managing Director and Mr. A. K. Singh, Company Secretary were designated as "Key Managerial Personnel" of the Company pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Further, Mr. S. K. Agarwal, who was already heading the financial functions of the Company was appointed as Chief Financial Officer, also designated as "Key Managerial Personnel" of the Company under the said provisions of the Companies Act, 2013. Subsequently, due to discontinuation of services of Mr. A. K. Singh, Company Secretary of the Company w.e.f. October 10, 2014, the Board has appointed Ms. Sonam Katyal as Company Secretary and Compliance Officer, also designated as "Key Managerial Personnel" in his place w.e.f. November 10, 2014. Board 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 (excluding the Director being evaluated) as well the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in Corporate Governance Report. Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The highlights of the Remuneration Policy are stated in the Corporate Governance Report. Meetings During the year, Sixteen Board Meetings and One Independent Directors' Meeting were held, the details of which are given in the Corporate Governance Report. The provisions of Companies Act, 2013 and Listing Agreement were adhered to while considering the time gap between two meetings. Composition of Audit Committee In terms of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Audit Committee has been reconstituted comprising of 3 Independent Directors namely, Mr. L. C. Sharma, Mr. P.N. Singh and Mr. L.C. Parashar. Mr. L. C. Sharma has resigned as Chairman of the Audit Committee w.e.f. April 22, 2015 and Mr. P. N. Singh has been appointed as Chairman of the Committee in his place. All the recommendations made by the Audit Committee were accepted by the Board. SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES Your Company does not have any subsidiary/joint venture/ associate company within the meaning of the Companies Act, 2013. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that: i) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures; ii) the accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the financial year ended March 31, 2015 and of the profit of the Company for that year; iii) proper and sufficient care has been taken 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) the annual accounts have been prepared on a going concern basis; v) the proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; vi) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. CORPORATE DEBT RESTRUCTURING The debts of the Company are under Corporate Debt Restructuring (CDR) mechanism w.e.f. April 1, 2009. RISK MANAGEMENT POLICY The Company has been addressing various risks impacting the Company and the policy of the Company on risk management is provided in this Annual Report under Management Discussion and Analysis Report. INTERNAL FINANCIAL CONTROLS The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls. CURRENT OUTLOOK Outlook for Paper Industry in India looks extremely positive as the demand for upstream market of paper products is growing up. The low per capita consumption is an indication of the future potential for the industry. Increasing population, literacy rate, growth in GDP, improvement in manufacturing sector and lifestyle of individuals are expected to account for the growth in the paper industry of India. With the global economy showing signs of recovery and similar indicators visible in domestic economy, the Indian Paper and Board Industry might return back to its earlier high growth path. AUDITORS AND AUDITORS' REPORT Statutory Auditors The retiring Auditors, M/s. Singal Bros. & Associates, Chartered Accountants, hold office as Statutory Auditors until the conclusion of the 43rd Annual General Meeting. As per the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, Listed Companies are required to rotate their auditors, once in ten years, and M/s. Singal Bros. & Associates have held office for a period of more than 10 years, and the transition time given to change the auditors when the Companies Act, 2013 was brought into force is three years. However, your Directors recommend that your Company should rotate its auditors before the maximum time period given under the Companies Act, 2013. The Audit Committee and the Board of Directors recommend the appointment of M/s. Radheshyam Sharma & Co., Chartered Accountants (Firm Registration No. 016172N) to hold the office of auditors for a period of five years i.e. from the conclusion of 43rd Annual General Meeting till the conclusion of 48th Annual General Meeting of the Company, subject to annual ratification by the shareholders at every Annual General Meeting and at such remuneration as may be fixed by the Board of Directors on the recommendation of the Audit Committee, whose appointment shall be in place of M/s. Singal Bros. & Associates. The Company has received a certificate from the said M/s. Radheshyam Sharma & Co., Chartered Accountants to the effect that their appointment, if made, would be in accordance within the limits specified under the Companies Act, 2013, and that, they meet the criteria of independence. The proposal for their appointment is included in the notice of the ensuing Annual General Meeting. The Auditors' Report on Financial Statements of the Company for the Financial Year 2014-15 does not contain any qualification reservation or adverse remark. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review. The observations of Statutory Auditors' and Notes to the Financial Statements are self-explanatory and do not call for any further comments. Cost Auditors Pursuant to the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014 and the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board has appointed, subject to ratification of the remuneration by the shareholders, M/s Vijender Sharma & Co., Cost Accountants, Delhi (Firm's Registration No. 00180) for the financial year 2014-15 and 2015-16 to carry out the cost audit of Company's records in respect of newsprint paper. The remuneration proposed to be paid to them requires ratification by the shareholders of the Company. In view of this, your ratification for payment of remuneration to Cost Auditors is being sought at the ensuing AGM. The Cost Audit Report for the year 2013-14 has been filed under XBRL mode within the stipulated time period. Secretarial Auditors Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. BLAK & Co., Company Secretaries, Delhi to conduct the secretarial audit of the Company. The Secretarial Audit Report submitted by them is annexed herewith as 'Annexure-A'. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. Internal Auditors M/s Singla & Associates, Chartered Accountants performs the duties of internal auditors of the Company and their report is reviewed by the audit committee from time to time. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are provided in 'Annexure-B' to the Directors' Report. EXTRACT OF ANNUAL RETURN The details forming part of the extract of Annual Return in Form MGT-9 is annexed herewith as 'Annexure-C'. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES UNDER SECTION 186 OF THE COMPANIES ACT, 2013 During the year, the Company has not granted any loans or given guarantees/securities or made investments under section 186 of the Companies Act, 2013. The earlier investments made by the Company are provided in the notes to the financial statements in this Annual Report. RELATED PARTY TRANSACTIONS In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement, Board of Directors has adopted a Policy on Related Party Transactions which is also available on Company's website. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. There were no materially significant related party transactions which were in conflict with the interest of the Company. All transactions entered into with the related parties were in the ordinary course of business and on an arm's length basis. Your Directors draw attention of the members to Note No. 47 to the financial statement which sets out related party disclosures. Regarding the appointment of Mr. Naynesh Pasari, relative of Mr. N. K. Pasari, Managing Director, as the Business Development Advisor of the Company, details are provided in Form AOC-2 annexed herewith as 'Annexure-D'. MANAGERIAL REMUNERATION & PARTICULARS OF EMPLOYEES The information required under section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, has been appended to this Report as 'Annexure-E'. VIGIL MECHANISM/WHISTLE BLOWER POLICY Your Company has established a vigil mechanism and accordingly, a whistle blower policy has been formulated 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 and integrity. The policy provides for adequate safeguards against victimisation of Director(s) / Employee(s) and direct access to the Chairman of the Audit Committee in exceptional cases. It has also been uploaded on the website of the Company at www.skpmil.com <http://www.skpmil.com> at <http://www.skpmil.com/page.phpRs.page_> id=30 link. 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. A separate section on Management Discussion and Analysis, Corporate Governance and a certificate from Statutory Auditors of the Company regarding Compliance of conditions of Corporate Governance as stipulated under clause 49 of Listing Agreement forms part of the Annual Report. MATERIAL CHANGES SUBSEQUENT TO THE CLOSE OF FINANCIAL YEAR Shifting of Registered Office The Company had filed a petition before Regional Director, Eastern Region, Kolkata for shifting of its Registered Office which was approved vide order dated March 31, 2015. Hence the Company has shifted its Registered Office from State of West Bengal to National Capital Territory of Delhi w.e.f April 16, 2015. Discontinuation of production facilities at Bahadurgarh Unit The unhealthy competition in the coated paper industry from the imported products has resulted into reduction of the prices and heavy reduction in sales of the product manufactured by Company's Bahadurgarh Unit. Due to this reason, the production of the unit was decreased day by day and made the unit unviable. In addition to this, labour strike in the unit further resulted in increased losses of Bahadurgarh unit of the Company. Keeping in view of the situation, the Company has discontinued the production facilities at its Bahadurgarh Unit and is in the process of shifting the useful machineries from Bahadurgarh Unit to Keshwana Unit in gradual manner. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has constituted an Internal Complaints Committee (ICC) in pursuance of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 for redressal of sexual harassment complaints and for ensuring time bound treatment of such complaints. There was no complaint received from any employee during the financial year 2014-15 and hence, no complaint is outstanding as on March 31, 2015 for redressal. LISTING ON STOCK EXCHANGES The Equity Shares of the Company are listed at Bombay Stock Exchange. The Company's delisting application with Calcutta Stock Exchange is pending since long. GENERAL 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. No amount has been or is proposed to be transferred to any reserves of the Company. 2. No significant or material orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company's operations in future. 3. There were no special resolution passed pursuant to the provisions of Section 67(3) of the Companies Act, 2013 and hence no information as required pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 is furnished. 4. No disclosure in respect of Corporate Social Responsibility is required as it is not applicable to the Company. ACKNOWLEDGEMENT Your Directors wish to extend their sincere thanks for the assistance and co-operation received from the Members of the Company, Banks, Government Authorities, Customers, Vendors and all the other business associates. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers at all levels for their continuous support and cooperation. For and on behalf of the Board P. N. Singh Director DIN:00076392 N. K. Pasari Managing Director DIN:00101426 Place : New Delhi date : August 25, 2015 |