| Dear Members,
The Directors have pleasure in submitting the Tenth Annual Report of
the Company together with the Audited Accounts for the financial year
ended 31st March 2015.
FINANCIAL HIGHLIGHTS
The summarized financial results are as under :
Year ended Year ended
31st March 31st March
2015 2014
Rs.in lacs Rs. in lacs
1. Revenue from operations 17981.73 22224.02
2. Other income 639.37 743.41
3. Total Expenditure before Interest & 18590.93 21120.72
Depreciation
EBITDA 30.17 1846.71
4. Finance Charges 3212.74 3529.15
5. Depreciation 1027.12 1364.10
6. Profit before Tax (4209.69) (3046.54)
7. Provision for Taxation - -
8 (Net profit ti l / Et di t ^ (4209.69) (3046.54)
(before Exceptional / Extraordinary items)
9. Exceptional/ Extraordinary items - 220.07
10. Net Profit (4209.69) (2826.47)
OPERATIONS
The turnover of the Company is Rs.180 Crores compared to Rs.222 Crores
in the previous year. We expect to improve the production and sales in
the forthcoming year 2015-16.
There has been no change in the nature of business of the Company
during the year under review.
TRANSFER TO RESERVES
Due to losses, the Company is unable to transfer any amount to its
Reserves.
DIVIDEND
No dividend has been declared in the financial year under review having
regard to the losses incurred by the company during the year.
SHARE CAPITAL
The paid-up capital of the Company as at 31.03.2015 stood at
Rs.43,11,36,560/- . During the year under review the Company has not
made any fresh issue of shares.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION
FUND
The Company has not declared any dividend in the past and hence
transfer of unclaimed Dividend to Investor Education and Protection
fund does not arise.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return pursuant to the provisions of Section 92
of the Companies Act, 2013 read with Rule 12 of the Companies
(Management and Administration) Rules, 2014, in Form MGT-9 is furnished
in Annexure A and is attached to this report.
BOARD / COMMITTEE MEETINGS CONDUCTED DURING THE PERIOD UNDER REVIEW
During the year under review, 4 Meetings of the Board of directors, 4
Meetings of the Audit Committee, 2 Meetings of the Nomination and
Remuneration Committee and 4 Meeting of the Stakeholders Relationship
Committee were held. Further details of the same have been enumerated
in the Corporate Governance Report annexed herewith.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) of the Companies Act
2013, with respect to Directors' Responsibility Statement, the
Directors confirm that -
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed and there are no material departure from
those standards;
b) they 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 at the end of the financial year and of the loss of the
company for that period;
c) they have taken Proper and sufficient care for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and
were operating effectively; and
f) they had devised proper system to ensure compliance with the
provisions of all the applicable laws and such systems were adequate
and operating effectively;
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12)
OF THE COMPANIES ACT, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE
CENTRAL GOVERNMENT
There have been no frauds reported by the Auditors pursuant to Section
143(12) of the Companies Act, 2013.
DECLARATION OF INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
independence as prescribed both under the Companies Act, 2013 and
Clause 49 of the Listing Agreement with the Stock Exchanges.
COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF
REMUNERATION AND OTHER MATTERS PROVIDED UNDER SECTION 178(3) OF THE
COMPANIES ACT, 2013
The Board has, on the recommendation of the Nomination and Remuneration
Committee, framed a policy for fixing and revising remuneration of
Directors, Key Managerial Personnel, Senior Management Personnel and
employees of the Company. The Remuneration policy of the Company is
annexed herewith as Annexure B and can also be accessed on the
Company's website at the link www.servalakshmi.in/Facilities.html.
COMMENTS ON AUDITORS' REPORT:
With regard to the observations of the Statutory Auditors on the
complete erosion of the net worth, your directors are of the view that
this will not have any adverse effect since concerted efforts are being
taken by the management to tide over the situation.
In respect of the qualification(s) made by the Secretarial Auditor in
his Report, your Directors wish to state as under;
Sl
N0 Qualification Reply
1 The Company has not appointed Chief The Company is in the process
Financial Officer and Company Secretary of appointing and complying
after the resignation of Mr. G.V. with the provisions.
Ramana as Chief Financial Officer w.e.f.
22.01.2015, and Ms.Praveena Dhanagopal
as Company Secretary w.e.f 11.02.2015.
2 The financial statements indicate that Considering the accumulated
the Company has accumulated losses and losses and present financial
its net worth has been fully eroded situations, the company has
and accordingly the Company is a "Sick made an application to the
Industrial Company" within the meaning Board for Industrial and
of Sick Industrial Companies (Special Financial Reconstruction
Provisions) Act, 1985. The Company (BIFR) in order to
has made a reference to the BIFR achieve a financial
under Section 15 of Sick Industrial rehabilitation.
Companies (Special Provisions) Act,
1985, in view of the erosion of the
entire net worth of the Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186
OF THE COMPANIES ACT, 2013
There were no loans, guarantees or investments made by the Company
under Section 186 of the Companies Act, 2013 during the year under
review and hence the said provision is not applicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The particulars of every contract and arrangement entered into by the
Company with related parties referred to in sub-section (1) of section
188 of the Companies Act, 2013 including certain arm's length
transactions under third proviso thereto are disclosed in Form No. AOC
-2 and forms part of this Report.
The Policy on Related Party Transactions as approved by the Board of
Directors of the Company has been uploaded on the Company's website and
may be accessed through the link at
www.servalakshmi.in/Facilities.html.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
THE COMPANY:
There have been no 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.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology
absorption, Foreign Exchange Earnings and outgo as required under
section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the
Companies (Accounts) Rules, 2014 is furnished in Annexure C and is
attached to this report.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT
POLICY OF THE COMPANY
The Company has a structured risk management policy. The Risk
management process is designed to safeguard the organization from
various risks through adequate and timely actions. It is designed to
anticipate, evaluate and mitigate risks in order to minimize its impact
on the business. The potential risks are inventoried and integrated
with the management process such that they receive the necessary
consideration during decision making
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Company has not developed and implemented any Corporate Social
Responsibility initiatives as the said provisions are not applicable.
ANNUAL EVALUATION OF THE BOARD ON ITS OWN PERFORMANCE AND OF THE
INDIVIDUAL DIRECTORS AND COMMITTEES
As per the requirements of the Companies Act, 2013 and the clause 49 of
the listing agreement, the formal annual evaluation of the Board as a
whole, its committees and individual directors was conducted based on
the criteria and framework adopted by the Board. The evaluation process
include an assessment of each director's eligibility, skills and
knowledge and the Board is satisfied that all the Directors on the
Board are competent and have the necessary experience to effectively
execute their duties.
The Board also evaluated the working of the Committees and the Board
expressed its satisfaction on the quality, quantity and timeliness of
the flow of the information between the Committees and the Board.
DIRECTORS & KEY MANAGERIAL PERSONNEL
During the year under review, the members have approved the appointment
of Mr.S.Srinivasaraghavan, Mr. V.S.Pattabiraman and Mr.D.Muthusamy as
the Independent Directors of the Company for a period of five years.
Mr. Y.Rambabu resigned as Whole time Director of the company with
effect from 09th August, 2014. The Board places on record its
appreciation for the services rendered by Mr.YRambabu during his tenure
with the company.
Mr.D.V.A.Manoharan ceased to be a director of the company with effect
from 25th April 2014 due to death. The Board places on record the
appreciation for Mr.D.V.A.Manoharan's fruitful association with the
company.
Mr.B.Sriramulu resigned from the directorship of the company with
effect from 01.07.2015. The Board records its appreciation for his
association with the company.
The Board at its Meeting held on 8th November, 2014, appointed Mrs.
Nithya Nirupama as an Additional Director and Independent Director.
Subsequently she resigned from the Directorship of the company with
effect from 13.07.2015. The Board records its appreciation for her
association with the company
Mr. G.V.Ramana resigned as the Chief Financial Officer of the company
with effect from 22nd January, 2015. The Board thanks him for the
services rendered during his tenure as CFO.
Ms. Praveena Dhanagopal resigned as the Company Secretary and
Compliance Officer of the company with effect from 11th February, 2015.
The Board thanks her for providing valuable guidance to the company
during her tenure.
As per the provisions of the Companies Act, 2013, Mr.R.Ramswamy,
Executive Chairman of the company, retires at this Annual General
Meeting and being eligible, offers himself for reappointment. The Board
recommends his re-appointment.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiaries, Joint ventures or Associate
Companies.
FIXED DEPOSITS
Since the Company has not accepted any fixed deposits covered under
Chapter V of the Companies Act, 2013, there are no deposits remaining
unclaimed or unpaid as on 31st March 2015 and accordingly, the question
of default in repayment of deposits or payment of interest thereon,
during the year, does not arise.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR
COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S
OPERATION IN FUTURE
There is no significant and material order passed by the regulators or
courts or tribunals impacting the going concern status and company's
operation in future.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate internal control systems to monitor internal
business process, financial reporting and compliance with applicable
laws. The Company periodically reviews the adequacy and effectiveness
of the control systems.
The Audit committee of the Board reviews internal control systems and
their adequacy, significant risk areas, observations made by the
internal auditors on control mechanism and the operations of the
company, recommendations made for corrective action and the internal
audit reports. The committee reviews with the statutory auditors and
the management, key issues, significant processes and accounting
policies.
AUDITORS
STATUTORY AUDITORS
M/s. S.Krishnamoorthy & Co., Chartered Accountants, Coimbatore were
appointed as the Statutory Auditors of the company for a period of
three years at the Annual General Meeting held on 26th September 2014.
Pursuant to the provisions of Section 139 of the Companies Act, 2013,
the ratification of their appointment is to be done at the ensuing
Annual General Meeting. The Company has obtained written confirmation
from the Auditors to the effect that the ratification of their
appointment if made would be in conformity with the provisions of
Companies Act, 2013. Members are requested to ratify their appointment.
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 Mr.M.D.Selvaraj, MDS
& Associates, Company Secretaries in Practice to undertake the
Secretarial Audit of the Company. The report of the Secretarial report
is annexed herewith as Annexure D to this report.
COST AUDITORS
The Board of Directors on the recommendation of the Audit Committee,
have appointed Mr.S.Thangavelu, Cost Accountant, as the Cost Auditor of
the company for the financial year 2015-16.
Pursuant to Section 148 of the Companies Act 2013 read with the
Companies (Cost Records and Audit) Rules, 2014, the remuneration
payable to the Cost Auditor is subject to the approval of the members
in a general meeting. The Board recommends the ratification of his
remuneration.
Pursuant to Section 209(1 )(d) of the Companies Act, 1956, the Cost
Audit Report for the financial year ended 31st March 2014 was submitted
to the Central Government on 20.02.2015.
PARTICULARS OF EMPLOYEES
The disclosure as required under Section 197(12) of the Companies Act,
2013 read with Rule 5(1) of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure E
and is attached to this report.
The disclosure referred to the Rule 5(2) of Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 does not apply to the
Company as there were no employees who are in receipt of remuneration
in the aggregate at the rate of not less than Rs.60,00,000/- if
employed throughout the year or Rs.5,00,000/- per month if employed for
part of the year.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place a policy on Sexual Harassment of Women at
Workplace in line with the requirements of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
All employees (permanent, contractual, temporary, trainees) are covered
under this policy. There were no complaints received from any employee
during the financial year 2014-15.
CORPORATE GOVERNANCE
As required under Clause 49 of the Listing Agreement with the Stock
Exchanges, the report on Management Discussion and Analysis, Corporate
Governance as well as Auditor's Certificate regarding compliance of
conditions of Corporate Governance forms part of this Annual Report.
(VIGIL MECHANISM) WHISTLE BLOWER POLICY
The Company has provided for adequate safeguards to deal with instances
of fraud and mismanagement and to report concerns about unethical
behavior or any violation of the Company's code of conduct. The policy
can be accessed on the Company's website at
www.servalakshmi.in/Facilities.html.
CAUTIONARY NOTE
The statements in this Director's Report & Management Discussions and
Analysis contain forward looking statements regarding Company's
projections & expectations and the actual results could differ
materially from those expressed on account of various factors like raw
material prices, change in demand, government regulation etc., and the
readers are cautioned against placing undue reliance on the same.
ACKNOWLEDGEMENT
Your Directors take this opportunity to place on record their
appreciation for the dedication and commitment of its employees at all
levels. Your directors thank and express their gratitude for the
support and co-operation received from the CDR EG, Central and State
Governments, Bankers, Customers, Distributors, Dealers, Suppliers,
Shareholders, etc., for their continued faith, support and
co-operation.
By order of the Board
For Servalakshmi Paper Limited
(Sd/-)
Coimbatore R. RAMSWAMY
10th August, 2015 Executive Chairman
(DIN : 00010572)
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