The Directors have pleasure in presenting their 24th Annual Report and
the Audited Financial Statements of the Company for the year ended 31st
March 2015
REVIEW OF OPERATIONS 2014-15
In the year under review, the total production was 57571 MT as compared
to the previous financial year production of 77454 MT and thus the
total production fell short by 19883 MT, of which the shortfall in
production of Kraft Paper at Edayar Units is 6552 MT, and Duplex Board
at Chalakkudy Unit is 13331 MT.
The main reason for the shortage of production at Edayar Unit was due
to frequent stoppage and repairs and the downtime of the boiler and
also due to the breakdown of other equipments. Inorder to rectify and
carry out repairs, the Company had a long shutdown.
Chalakkudy Duplex Board Unit production for the Financial Year 2014-15
was 6779 MT. The Unit was closed and operations stopped from 1st
October, 2014. The Company had to close down the operation due to
severe market competative conditions as very many number of Duplex
Board Mills were commissioned in Tamil Nadu in and around consuming
centers mainly Shivakasi. As Tamil Nadu Mills were servicing the
consuming centers at economical prices, the transport charges of our
product was an inhibiting factor which practically resulted in losing
our competitiveness. Further, the Tamil Nadu News Print Limited (TNPL)
is implementing a big Duplex Board Plant Project with a capacity of
1000 tonnes per day, and the same is expected to come into operation
soon. The size and capacity of our Duplex Board Unit at Chalakkudy was
insufficient and inadequate to enjoy economies of large scale operation
and to compete with the Tamil Nadu Mills.
As regards the Kraft Paper, the market conditions were sluggish from
the year 2013-14 which continued affecting the profitability. With the
completion of the repairs and maintenance work of the boiler and other
equipments, the operation of the Kraft Paper Unit have been put into
stable operation from the last Quarter of the financial year under
review. The Company has now taken all possible steps for effecting cost
control and, taking into account the market conditions and sales
realization, the Company has drawn up plans for operation of the Kraft
Paper Unit at 80% capacity to earn reasonable profits in the current
year.
The net loss of the Company for the year ended would have been lesser
by Rs. 191.37 lacs if the REC income were recognized on the unsold
stock (including opening stock) of REC Certificates (12758) as income
at the floor price of Rs. 1500/- fixed by Government.
DIVIDEND
In view of loss, your Directors decided not to recommend payment of
dividend on the equity shares and non convertible cumulative Redeemable
Preference Shares for the financial year under review.
EXPORT PERFORMANCE
Your Company exported 1518.98 MT of paper and paper boards during the
year as compared to 471 MT during the previous year. The export
amounted to Rs.389.65 lacs as against Rs 129.74 lacs in the previous
year.
PROSPECTS
The Company's performance in the first quarter of the current fiscal is
not satisfactory due to the maintenance/ shut of the Power Plant and
Market conditions. With the completion of the repairs and maintenance
work of the boiler and other equipments, the operation of the Kraft
Paper Unit have been put into stable operation from the Second Quarter
of the current financial year. As mentioned above the Company has now
taken all possible steps for effecting cost control and, taking into
account the market conditions and sales realization the Company has
drawn up plans for operation of the Kraft Paper Unit at 80% capacity to
earn, barring unforeseen circumstances, reasonable profits in the
current year.
FINANCIAL PERFORMANCE (Rs./Lacs)
For the For the
year ended year ended
Particulars 31.03.2015 31.03.2014
Sales (Gross) 16405.45 21554.41
Less: Excise Duty 952.86 1247.60
Sales (Net) 15452.59 20306.81
Operation Profit/Loss 287.73 1320.90
Interest and Finance 590.35 685.57
Depreciation 376.81 489.90
Profit Before Tax (679.43) 145.43
Provision for Tax - 29.35
Profit After Tax (1178.14) 116.08
Balance of Profit
brought forward 513.25 512.55
Amount available
for appropriation (664.89) 628.63
Appropriation
General Reserve - -
Proposed Dividend
& tax on Dividend - 115.38
Retained profit
carried
to Balance Sheet (727.31) 513.25
FINANCE
All the repayment and interest commitments were met as per terms of
arrangement with the Banks.
SUBSIDIARY COMPANIES
As of 31st March 2015 the Company had 3 subsidiaries viz. Sree Kailas
Palchuram Hydro Power Limited, Sree Adisakthi Mukkuttathode Hydro Power
Limited and Jalashaayi Alamparathode Hydro Power Limited by virtue of
the Company having control on the Board of these Companies. Steps are
being initiated to implement the project with the assistance of
Government / Private parties.
The Board of Directors of the Company at its meeting held on 30.05.2011
decided to avail the exemption under Section 212 of the Companies Act,
1956 pursuant to GC No.2/2011 dated 08.02.2011 issued by the Central
Government. As required in the Circular, the consolidated financial
statements audited by the Statutory Auditors of the Company attached
along with the Annual Reports of the Company. Annual accounts of the
subsidiary companies and the related detailed information would be sent
to those shareholders seeking information in this regard at any point
of time. Further annual accounts of the subsidiary companies would be
available for inspection by any shareholders at the registered office
of the Company.
INDUSTRIAL RELATIONS
The industrial relations remained cordial and satisfactory during the
year under review.
CHANGES IN NATURE OF BUSINESS
No significant changes had been made in the nature of the Company
during the financial year.
MATERIAL CHANGES AND COMMITMENTS OCCURRED BETWEEN THE DATE OF BALANCE
SHEET AND THE DATE OF AUDIT REPORT
No significant material changes and commitments have occurred between
the date of the balance sheet and the date of the audit report.
FINANCE
A) Deposits
The Company has not accepted deposit from the public falling within the
ambit of Section 73 of the Companies Act, 2013 and The Companies
(Acceptance of Deposits) Rules, 2014.
B) 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
INTERNAL CONTROL SYSTEM
Your Company has adequate internal control and internal check system
commensurate with size of the organization.
The Company has appointed M/s. Pooja A Nayak & Co., Chartered
Accountants, Ernakulam as the Internal Auditor of the Company to
monitor and evaluate the efficacy and adequacy of internal control
system in the Company, its compliance with operating systems,
accounting procedures and policies of the Company and its subsidiary.
Significant audit observations and corrective actions thereon are
presented to the Audit Committee of the Board.
BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
With deep regret we report the sad demise of Mr. A.S. Unny, Chairman
of the Company on 17th May 2015. The Board records their deep
appreciation for the valuable guidance and leadership rendered by Mr.
A.S. Unny, Chairman of the Company.
In terms of Article 83 of the Articles of Association of the Company,
Mrs.E. Kamalam, Director retire on rotation, and being eligible offer
herself for re- appointment. Mr. T S Anantharaman who was appointed as
Independent Director as per SEBI Guidelines is disqualified to act as
Independent Director under the provisions of Companies Act, 2013 and
his appointment is categorized as Director liable for retirement by
rotation. Accordingly he is retiring by rotation and being eligible
offers himself for re-appointment.
In the Annual General Meeting held on 30st September 2014 Dr. A.R.K.
Rao was appointed as Independent Director for a term of one year and he
will be retiring at the ensuing Annual General meeting. The Company has
received requisite notices in writing from members proposing Dr. A.R.K.
Rao for re-appointment as Independent Director for another consecutive
term of one year.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
Independence as prescribed both under sub section (6) of Section 149 of
the Companies Act, 2013 and under Clause 49 of the Listing Agreement
with the Bombay Stock Exchange.
During the period under review, Mrs. Usha Venugopal, was appointed as
Chief Financial Officer of the Company, as one of the Key Managerial
Personnel in compliance with the provisions of Section 203 of the
Companies Act, 2013
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and Revised
Clause 49 of the Listing Agreement, the Board has carried out an annual
performance evaluation of its own performance, the Directors
individually as well as the evaluation of the working of its Committee.
The manner in which the evaluation has been carried out has been
explained in the Governance Report.
REMUNERATION TO DIRECTORS
The Remuneration paid to the Executive Directors and the Sitting Fees
paid to the Non Executive and Independent Directors are disclosed in
the Extract to the Annual Return i.e Annexure IV to the Board's Report.
AUDIT COMMITTEE
The Audit Committee of the Board was reconstituted on 30-5-2015 and
consists of Mr. Deveshwer Kumar Kapila, Independent Director, Mr.
U.Gururaja Bhat, Independent Director, Dr. A R K Rao, Independent
Director and Mr. S. Giridhar Non Independent Director.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
The Corporate Social Responsibility Committee of the Company consists
of Mr. Deveshwer Kumar Kapila, Independent Director, Dr. S Rajkumar,
Managing Director and Mr. A Padmanabhan, Whole Time Director.
The Committee has taken steps for the preparation of CSR policy,
projects and programs proposed to be undertaken by the Company for
approval of the Board. The Annual Report on CSR Activities for the
Financial Year 2014-15 is annexed at Annexure VII to the Directors
Report.
NOMINATION AND REMUNERATION COMMITTEE
The Nomination and Remuneration Committee was re- constituted on
30-05-2015 and consists of Mr. Deveshwer Kumar Kapila, Independent
Director, Mr. U.Gururaja Bhat, Independent Director, Dr. A R K Rao,
Independent Director and Mr. S. Giridhar Non Independent Director.
REMUNERATION POLICY
The Company's Remuneration Policy for Members of the Board and
Executive Management is annexed at Annexure IIIA to the Directors'
Report. The Company's remuneration policy is directed towards rewarding
performance based on review of achievements periodically. The
remuneration policy is in consonance with the existing industry
practice.
SHAREHOLDERS RELATIONSHIP COMMITTEE
Composition of the Committee as from 30th July 2015:
Dr S. Rajkumar,Managing Director
Mr U.G. Bhat, Independent Director
Dr. A R K Rao, Independent Director
Mr. S.Giridhar, Non Executive/ Non Independent Director
AUDITORS
M/s Balan & Co. Chartered Accountants, the present Auditors of the
Company retire and are eligible for reappointment and the proposal has
been placed before you. Necessary certificate has been obtained from
the Auditors as per Sections 139 and 141 of Companies Act, 2013
FOREIGN EXCHANGE EARNINGS AND OUT-GO
During the year under review, the foreign exchange earned by the
Company by way of exports proceeds is Rs. 389.65 lacs. The foreign
exchange outgo for the company for import purchases Rs. 5831.15 lacs
PARTICULARS UNDER SECTION 134 Conservation of Energy, Technology
Absorption Statement of particulars under Section 134 (3) (m) of the
Companies Act, 2013 read with Rule, 8 of The Companies (Accounts)
Rules, 2014, is annexed as
Annexure - I
Particulars of Employees
None of the employees of the Company are coming under the provisions of
Section 197(12) of the Companies Act, 2103, read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014.
CORPORATE GOVERNANCE
The Company's Equity Shares are listed with Bombay Stock Exchange. The
Company has implemented all the mandatory provisions of Clause 49 of
the Listing Agreement relating to the Corporate Governance. The Report
on Management's Discussion and Analysis and Report on Corporate
Governance are forming part of Directors' Report and are annexed as
Annexure -II and Annexure - III respectively. As required by the
Listing Agreement, an Auditors' Certificate on Corporate Governance and
a Declaration by the Vice Chairman and Managing Director with regard to
Code of Conduct are attached to the said Report. Further, as required
by Clause 49 of the Listing Agreement, a Certificate, duly signed by
the Vice Chairman and Managing Director and CFO, was submitted to the
Board of Directors on the financial statements and cash flow statement
of the Company for the year ended March 31, 2015 at the Meeting held on
May 30, 2015.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return in Form MGT 9, of the Company is annexed as
Annexure IV to this Report.
RELATED PARTY TRANSACTIONS
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
for approval. Further prior approval of the Shareholders of the Company
at the Annual General Meeting dated 30th September, 2014 has been taken
for the business related transactions entered into with the Related
Parties during the year.
Particulars of contract or arrangements with related parties is annexed
in Form AOC 2 as Annexure V.
SECRETARIAL AUDITOR
The Board has appointed M/s. Lakshmmi Subramonian & Associates,
Practising Company Secretary, to conduct Secretarial Audit for the
financial year 2014- 15. The Secretarial Audit Report for the financial
year ended March 31, 2015 is annexed herewith marked as Annexure VI to
this Report.
WHISTLE BLOWER POLICY/ VIGIL MECHANISM
In accordance with Section 177 of the Companies Act, 2013 and revised
Clause 49 of the Listing Agreement, the Company has constituted a
Whistle Blower Policy Vigil Mechanism to establish a vigil mechanism
for the Directors and employees to report genuine concerns in such
manner as may be prescribed and to report to the management instances
of unethical behavior, actual or suspected fraud or violation of the
Company's Code of Conduct.
The detail of the Whistle Blower Policy has been posted on the website
of the Company, www.sree kailas.com
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3) (c) of the Companies
Act, 2013 Directors report that:
1. In the preparation of the annual accounts for the financial year
ended 31st March 2015 the applicable accounting standards had been
followed along with proper explanation relating to material departures.
2. The Directors had selected such accounting policies and applied
them consistently and made judgment and estimates that were 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 close of the
Company for the year under review.
3. The Directors had 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.
4. The Directors had prepared the Annual Accounts for the financial
year ended 31st March 2015 on a 'going concern' basis.
5. That proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively.
6. 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.
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) 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) Neither the Managing Director nor the Whole Time Directors of the
Company receive any remuneration or commission from any of its
subsidiaries.
5) No significant or material orders were passed by the Regulators or
Courts or Tribunal which impact the going concern status and Company's
operations in future.
Your Directors further state that during the year under review, there
were no cases filed pursuant to the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013
ACKNOWLEDGEMENT
The Board places on record, its appreciation for the cooperation and
support received from shareholders, customers, suppliers, employees,
government authorities and banks.
By and on behalf of the Board of Directors
Sd/-
Cochin -16 Deveshwar Kumar
Kapila
Date :30/7/2015 Chairman |