Dear Members,
Your Directors are pleased to present the 29 Annual Report on the business and
operations of the Company together with Audited Financial Statements for the financial
year ended March 31, 2023. FINANCIAL RESULTS
The Company's financial performance, for the year ended March 31, 2023 is summarized
below: (Rs. in Lakhs)
|
2022-23 |
2021-22 |
|
(Current year) |
(Previous Year) |
Revenue from Operations |
19626.04 |
15031.47 |
Other Income |
12.48 |
42.07 |
Total Income |
19638.52 |
15073.54 |
Profit Before Depreciation, Amortization, Finance Costs and Tax |
1463.96 |
238.46 |
Depreciation and amortization expense |
610.95 |
665.07 |
Finance Costs |
143.72 |
65.62 |
Profit/(Loss) before tax |
709.29 |
(492.23) |
Tax Expenses |
0.00 |
0.00 |
Short / (Excess) provision of IT of earlier years |
204.90 |
0.00 |
Net Profit/(Loss) for the year |
504.39 |
(492.23) |
OPERATIONAL REVIEW
Your Company's total revenue from operations during the year under review was Rs.
19626.04 lakhs as compared to Rs. 15031.47 lakhs of previous year which shows an increase
of 30.57 % over the previous year figure. The other income was Rs. 12.48 lakhs during the
year under review. The EBIDTA of the Company during the year was Rs. 1463.96 lakhs. The
Net profit for the Financial Year 2022-23 was Rs.504.39 lakhs. The key factors for the
excellent performance of the company are i) focus on export market to get better margins
as well as expand our footprint across the world, ii) expanding footprint in Pharma
industry to be able to make operations immune from any downturn in Oral care and iii)
price increase from our existing domestic customers of Laminate as well as Lami Tube to
compensate the increase in raw material price which contributed to the growth in the
performance of the company during the year under review. OVERVIEW OF PACKAGING INDUSTRY IN
INDIA
Overall packaging industry in India is projected to be Rs. 2,150 - 2,200 billion for
fiscal 2023 The polymer packaging industry contributes substantially to the GDP growth in
India and at the same time support the consumer-led industries such as FMCG and pharma,
key sectors for growth in India, with reliable of packaging solutions.
The Indian packaging industry's market size at Rs 2,150-2,200 billion in fiscal 2023,
growing at CAGR 7% from fiscal 2017-22. Polymer packaging, which form nearly 60-65% of the
industry by revenue, grew 6% during the period FY17-22. The paper packaging segment also
witnessed a strong 12% CAGR revenue growth. On the other hand, metal and glass packaging
witnessed a 3% and 8% growth, respectively during fiscal 2017-2022. Demand for packaging
segments comes from food packaging and pharma segments. Over fiscals 2022-2027, we expect
the industry to log 7-8% CAGR on the back of healthy volume growth driven by polymer,
paper and metals packaging segments. The pharmaceutical, industry chemical, food product,
and personal care sectors are expected to be the key growth drivers. Fast- moving consumer
goods (FMCG) companies' increasing focus on innovative packaging solutions that offer
scope for enhanced aesthetic value and extended shelf life will also propel demand.
Polymers have emerged as the most preferred packaging material with 60-65% share in
overall packaging. The segment has clocked 6% CAGR between fiscal 2017-2022, following
paper packaging, which saw higher 12% CAGR. Metal packaging witnessed 8% CAGR during the
period and glass 3% CAGR. In terms of end-user industries, the pharma and food product
segments witnessed a strong 12% and 7% CAGR during the period of fiscal 2017-2022, driving
demand for packaging. The personal care (3% CAGR) and industry chemical segments 4% CAGR
also supported the overall industry demand. Traditionally, robust growth in demand for
FMCG products has been the key driver for the packaging sector. FMCG companies' focus on
rural markets has boosted demand for polymer packaging, especially for pouches and
sachets. Flexible packaging comprises BOPP, HDPE, and PP bags and rigid packaging includes
HDPE containers, PP containers and jars, and PET bottles. There has been a significant
shift in
preference from rigid to flexible packaging owing to convenience of use and lower cost.
Introduction of new solutions such as laminated pouches and sachets has helped increase
the share of flexible packaging over time. Over the next three fiscals, the rigid
packaging segment's revenue is expected to log higher growth rate that of flexible
packaging, largely backed by volume growth and demand from food products and FMCG sectors.
Growth in flexible packaging is expected to be slightly higher than rigid packaging,
driven by increased use of BOPP in the form of pouches and sachets to package food
products, personal care products, etc. The Key growth drivers for packaging industry are
i) Growth prospects of end-user sectors, ii) Increasing rural demand for small packaged
goods, iii) Expected growth in organized retail and e- commerce industry iv) Better
affordability levels, health-conscious nature of consumers, v) Growing population of
working women, changing lifestyle a key factor and vi) Demand for innovative product
solutions and sustainable packaging.
*Source: CRISIL Report
DIVIDEND
During the year under review, your Company has earned a Net profit of Rs. 504.39 lakhs.
However, with the objective of conserving the resources for the future growth of the
Company and to improve the financial strength and also considering the accumulated loss
incurred in the earlier years, Board of Directors consider it prudent not to recommend any
dividend for the Financial Year 2022-23 and no amount has been transferred to reserves for
the year under review.
SHARE CAPITAL
The paid up equity share capital of the company as at March 31, 2023 was Rs. 3176.03
lakhs. During the year under review, the Company has not issued any shares with
differential voting rights as to dividend, voting or otherwise nor has granted any stock
options or sweat equity. As on March 31, 2023, none of the Directors of the Company hold
any instruments convertible into Equity shares of the Company. SUBSIDIARY COMPANIES
Shree Rama (Mauritius) Limited was incorporated as wholly owned subsidiary in
Mauritius. The current status of the Company is Defunct. There are no
associate companies or joint venture companies within the meaning of Section 2(6) of the
Companies Act 2013. DEPOSITS
The Company does not have Deposits as contemplated under Chapter V of the
Companies Act, 2013. Further, the Company has not invited or accepted any such deposits
during the year and there is no outstanding balance as on March 31, 2023. CREDIT RATING
The credit facilities of the company are Rated by CRISIL Limited. During Financial Year
2022-23, the Rating of the company has been reviewed by CRISIL Limited for the bank loan
facilities for Rs.
80 Cr. as 1) Long-Term Rating - CRISIL BBB-/Stable (Reaffirmed), 2). Long-Term Rating-
CRISIL
BBB-/Stable (migrated from CRISIL AA (CE)/Stable) and 3. Short Term Rating- CRISIL A3
(Migrated from CRISIL A1+ (CE). ANNUAL RETURN
The Annual Return of the Company as on March 31, 2023 in Form MGT - 7 in accordance
with Section 92(3) of the Act read with the Companies (Management and Administration)
Rules, 2014, is available on the website of the Company at https://srmtl.com DIRECTORS AND
KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Section 152 of the Companies Act, 2013 and the
Company's Articles of Association, Shri Mittal K. Patel, Director (DIN: 03619139) retires
by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself
for re-appointment. The Board recommends his re-appointment for the consideration of the
members of the Company at the ensuing Annual General Meeting. During the year under
review, Shri Hemal R. Shah (DIN: 07338419) was re-appointed as Whole- Time Director of the
Company for a period of 2 (two) years with effect from November 27, 2022, by the Board on
recommendation of the Nomination and Remuneration Committee and the re- appointment was
approved by the shareholders at the 28" Annual General Meeting held on 15 September,
2022. Further, your Company has received declarations from the Independent Directors
confirming that they meet with the criteria of Independence as prescribed under
sub-section (6) of Section 149 of the Companies Act, 2013 & the Companies (Appointment
and Qualification of Directors) Rules, 2014 and under Regulation 25(8) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 and there has been no change in
the circumstances which may affect their status as an Independent Director during the
year.
None of the Non-Executive Directors of the Company had pecuniary relationship or
transactions with the Company (except sitting fees for attending Board Meetings) during
the year under review. Pursuant to Section 203 of the Companies Act, 2013, the whole-time
Key Managerial Personnel of the Company as on March 31, 2023 are as under:
1. Shri Shailesh K. Desai : |
Managing Director |
2. Shri Hemal R. Shah c |
Whole Time Director |
3. Shri Krunal G. Shah* : |
Chief Financial Officer |
4. Shri Sandip Mistry : |
Company Secretary |
*Tendered his resignation and will be relieved from his duty as CFO with effect from
31? July 2023 or earlier date as may be agree and approved by the board.
NUMBER OF MEETINGS OF THE BOARD
During the Financial Year ended on March 31, 2023, the Board met five times, the
details of Board Meetings and attendance of Directors are given in the Corporate
Governance Report that forms part of this Annual Report. The intervening gap between any
two consecutive meetings of Board was not more than one hundred and twenty days.
COMMITTEES OF BOARD
The Company has following Committees of the Board as on March 31, 2023 pursuant to
applicable provisions of the Companies Act, 2013 and rules made there under as well as in
compliance with SEBI (LODR) Regulations, 2015: (iy Audit Committee (ii) Nomination and
Remuneration Committee (iii) Stakeholders Relationship Committee (iv) Rights Issue
Committee The details of composition, meetings and attendance of members of committees
held during the year are given in the Corporate Governance Report that forms part of this
Annual Report. BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013 and as per the corporate
governance requirements as prescribed under SEBI (LODR) Regulations, 2015, the Board of
Directors had carried out the performance evaluation of working of the Board Committees as
well as evaluation of Independent Directors including the performance of Independent
Directors and assessment of their independence criteria and their independence from the
management. The Board of Directors also reviewed the criteria for the purpose of
evaluation of performance of Independent Directors of the Company as well as Board of
Directors of the Company. The Independent Directors met on 30th March, 2023, without the
attendance of Non-Independent Directors and members of the Management. The Independent
Directors reviewed the performance of non-independent directors and the Board as a whole;
the performance of the Chairperson of the Company, taking into account the views of
Executive Directors and Non-Executive Directors and assessed the quality,
quantity and timeliness of flow of information between the Company Management and the
Board that is necessary for the Board to effectively and reasonably perform their duties.
The Nomination and Remuneration Committee of the Company had also carried out performance
evaluation of every Director's performance. A structured questionnaire was prepared after
taking into consideration the various aspects of evaluation. The Board of Directors
expressed its satisfaction with the evaluation process. DIRECTORS' RESPONSIBILITY
STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors to the best of
their knowledge and belief and according to the information and explanations obtained by
them state that: a) in the preparation of the annual accounts for the year ended on March
31, 2023, the applicable accounting standards have 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 for the year ended on March 31, 2023 and of the profit 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 the 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; and 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. RELATED
PARTY TRANSANCTIONS
All transactions entered with related parties for the year under review were on arm's
length basis and in the ordinary course of business of the Company and there were no
material contracts or arrangement or transactions entered into, in terms of Section 188 of
the Companies Act, 2013 and accordingly, the disclosure of related party transactions as
per Section 134(3)(h) of the Companies Act 2013 in Form AOC-2 is not provided. Further,
the disclosures in compliance with Para A of Schedule V of Regulation 34(3) of SEBI (LODR)
Regulations, 2015 is provided in the notes to the accounts. The related party transactions
as required to be disclosed under Indian Accounting Standards (Ind-AS 24) are set out in
the notes to the financial statements. The Audit Committee had given prior omnibus
approval for the related party transactions which were of repetitive nature and/or entered
in the ordinary course of business and on arm's length basis and a statement giving
details of all related party transactions were placed before the Audit Committee and the
Board for review and noting on a quarterly basis. The policy on Related Party Transactions
duly revised and approved by the Board of Directors has been uploaded on the website of
the Company viz. www.srmtl.com. None of the Directors has any pecuniary relationship or
transactions vis-a-vis the Company. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE
COMPANY
During the year 2022-23, the Company has not given any loans or provided guarantee or
security in connection with a loan to other body corporate or person or made investments
as contemplated under the provisions of Section 186 of the Companies Act, 2013, hence the
details are not provided. POLICIES
The updated policies adopted by the Company as per statutory and governance
requirements are uploaded on website of the Company at viz. www.srmtl.com. INTERNAL
FINANCIAL CONTROL SYSTEM
The Company's internal control system is commensurate with its size, scale and
complexities of its operations. Your Company has an effective internal control and
risk-mitigation system which are constantly reviewed, assessed and strengthened with new/
revised standard operating procedures considering the existing system and future planning
as envisaged. The internal audit is entrusted to M/s Ramesh C. Sharma & Co., Chartered
Accountants and the scope of the internal audit are reviewed and revised as required to
assess the risks and business processes, besides benchmarking controls with best practices
in the industry. The Audit Committee of the Board of Directors actively reviews the
adequacy and effectiveness of the internal control systems and suggests improvements to
strengthen the same. The Company has a robust Management Information System, which is an
integral part of the control mechanism. The Audit Committee, Statutory Auditors and the
business heads are quarterly apprised of the internal audit findings and the corrective
actions taken. Audit plays a key role in providing assurance to the Board of Directors.
The significant audit observations and corrective actions taken by the management are
presented to the Audit Committee of the Board. To maintain its objectivity and
independence, the Internal Auditor reports to the Chairman of the Audit Committee.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The statement showing particulars with respect to the conservation of energy,
technology absorption and foreign exchange earnings and outgo stipulated under Section
134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules,
2014 as amended from time to time is annexed herewith as Annexure A as a part
to this Report. PARTICULARS OF EMPLOYEES
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. The details of Managerial Remuneration 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 B as a part
to this Report. There was no employee drawing an annual salary of Rs. 102 lakhs or more
where employed for full year or monthly salary of Rs. 8.50 Lakhs or more where employed
for part of the year and therefore, no information pursuant to the provisions of Rule 5(2)
& 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 is required to be given. NOMINATION AND REMUNERATION POLICY
The Board of Directors has, on recommendation of the Nomination and Remuneration
Committee, framed a Nomination and Remuneration Policy pursuant to the provisions of
Section 178 of the Companies Act, 2013 read with the Rules made thereunder as well as SEBI
(LODR) Regulations, 2015. The policy has been placed on the website of the Company viz.
www .srmtl.com. The salient features of the said policy are stated in the Corporate
Governance Report that forms part of this report. AUDITORS & AUDITORS' REPORT
Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules
framed thereunder, M/s. Mahendra N. Shah & Co. (FRN: 105775W), Chartered Accountants,
Ahmedabad were appointed as Statutory Auditors of the Company for the period of five years
from the conclusion of the Twenty-Eight AGM of the Company till the conclusion of the
Thirty Third AGM. The Company has received a letter from M/s. Mahendra N. Shah & Co.
Chartered Accounts, to the effect that their appointment, is within the prescribed limits
under Section 141 of the Companies Act, 2013 read with rules made thereunder and that they
are not disqualified for such appointment. During the year under review, there are no
instances of frauds as reported by the auditors under Section 143(12) the Companies Act,
2013 and its rules made thereunder. The Statutory Auditors of the Company has made certain
observations in the audit report and qualified the report during the year under review. In
this regard, the Board clarifies the same as under: Boards' Comments on Auditors Emphasis:
1. Regarding the non-provision of interest on borrowings in form of Loans and
debentures:
The management has already initiated settlement with the lenders of the loan and
debentures as per the Scheme of Arrangement and Compromise long back. The lenders
specified in the scheme have given their consent for settlement as per the terms of the
scheme and in the opinion of the management, the amount of dues payable to lenders have
been specified under the definition of "Settled Debt" under clause (r) of Part 1
of the scheme, therefore no further liability on account of interest will arise. The
Hon'ble High Court of Gujarat has passed an order on 20" February, 2020, whereby the
O.J, Appeal has been dismissed. The Company has filed Review Application on 02/11/2020
before the Hon'ble High Court of Gujarat. In case the scheme is not approved or approved
with different terms, the company will give necessary accounting effect on final
ascertainment of the same.
2. Regarding Non consolidation of accounts of Shree Rama Mauritius Limited (WOS):
In respect of the investment made in Shree Rama (Mauritius) Limited, its Wholly-Owned
Subsidiary (WOS), the resident directors & key managerial personnel of the said WOS
had resigned in the year 2005-06 and audited accounts for the year ended 30 September 2003
and onwards could not be prepared and provided. Its present status is shown as
defunct' under respective laws. The Company has accordingly provided for diminution
in the value of investments in the earlier years. In view of the above, it was not
possible to prepare consolidated financial statements as required by Ind AS 110 issued by
ICAI and other provisions of the Companies Act, 2013. SECRETARIAL AUDIT
Pursuant to provisions of Section 204 of the Companies Act, 2013 read with the
Companies (Appointment and Remuneration of Managerial Personnel} Rules, 2014, the Board
had appointed M/s Chirag Shah & Associates, Practicing Company Secretaries to
undertake the Secretarial Audit of the Company for the Financial Year 2022-23. The
Secretarial Audit Report is annexed herewith as Annexure C as a part to 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: R Regarding
Non-consolidation of accounts of Shree Rama (Mauritius) Limited (WOS): In respect of the
investment made in Shree Rama (Mauritius) Limited, its Wholly-Owned Subsidiary (WOS), the
resident directors & key managerial personnel of the said WOS had resigned in the year
2005-06 and audited accounts for the year ended 30" September 2003 and onwards could
not be prepared and provided. Its present status is shown as defunct' under
respective laws. The Company has accordingly provided for diminution in the value of
investments in the earlier years. In view of the above, it was not possible to prepare
consolidated financial statements as required by Ind AS 110 issued by ICAI and other
provisions of the Companies Act, 2013. (it) Regarding pending redemption of 666666 15%
Cumulative Preference Shares The Composite Scheme of Compromise and Arrangement with its
lenders and Shareholders u/s 391 of the Companies Act, 1956 filed with Hon'ble High Court
of Gujarat before division bench has been dismissed by Hon'ble High court vide its order
dated 20" February, 2020. The Company has filed Review Application on 02/11/2020
before the Hon'ble High Court of Gujarat and matter of redemption of preference shares
along with dividend etc. is also covered in the scheme. The Board is of the view that the
said matter will be sorted out on final outcome of the scheme. In addition to above, the
Preference Shareholder has waived the right to receive the dividend accumulated on the
Preference Shares and accumulated interest on delayed payment provided that the Company
redeems the outstanding preference shares by 31st July, 2023 or such other extended date
permitted by the Preference Shareholder at his sole discretion. Further, the Company has
filed petition on March 17, 2023 before the National Company Law Tribunal, Ahmedabad Bench
under section 55(3) of the Companies Act, 2013 to issue and allot 7,66,666 redeemable
preference shares of face value of 100 each on the same terms and conditions to the
existing preference shareholder of the value equivalent to the existing outstanding
6,66,666 unredeemed preference shares amounting to X 666.66 Lakhs together with unpaid
dividend of 100.00 Lakhs thereon. Upon sanction of the aforesaid petition and issue of
these further redeemable preference shares, the existing unredeemed preference shares
shall be deemed to have been redeemed. The matter is presently pending before NCLT
(iii) Regarding non-reversal of provision of dividend and non-transfer of the said
amount to IEPF
In the Scheme of Compromise and Arrangement, the issue of waiver of unpaid dividend on
preference shares is also covered. Further, Hon'ble High court vide its order dated 20th
February, 2020 has dismissed the O J Appeal and the Company has filed Review Application
on 02/11/2020 before the Hon'ble High Court of Gujarat. The Board is of the view that the
said matter will be sorted out on final outcome of the scheme. Further, the Company has
filed petition on March 17, 2023 before the National Company Law Tribunal, Ahmedabad Bench
under section 55(3) of the Companies Act, 2013 to issue and allot 7,66,666 redeemable
preference shares of face value of R100 each on the same terms and conditions to the
existing preference shareholder of the value equivalent to the existing outstanding
6,66,666 unredeemed preference shares amounting to X 666.66 Lakhs together with unpaid
dividend of 100.00 Lakhs thereon. Upon sanction of the aforesaid petition and issue of
these further redeemable preference shares, the existing unredeemed preference shares
shall be deemed to have been redeemed. The matter is presently pending before NCLT M/s
Chirag Shah & Associates, Practicing Company Secretaries has undertaken the Annual
Secretarial Compliance Audit for the Financial Year 2022-23 pursuant to Regulation 24A of
SEBI (LODR) Reg., 2015. There were no observations for the period under review. COST
AUDITOR
As per the requirements of the Section 148 of the Act read with the Companies (Cost
Records and Audit) Rules, 2014 as amended from time to time, your Company is required to
maintain cost records and accordingly, such accounts are made and records have been
maintained relating to the product group Plastics and Polymers' during the year
under review. The Board of Directors, on the recommendation of Audit Committee, has
re-appointed M/s Maulin Shah & Associates, Cost Accountants, (Firm Registration Number
101527) as Cost Auditor to audit the cost records of the Company for the Financial Year
2023-24. As required under the Act, a resolution seeking member's approval for the
remuneration payable to the Cost Auditor forms part of the Notice convening the Annual
General Meeting for their ratification. CORPORATE SOCIAL RESPONSIBILITY (CSR) During the
year, the Company does not fall under the criteria prescribed under Section 135(1) of
Companies Act, 2013 read with rules made thereunder hence, the Board has not constituted
Corporate Social Responsibility Committee and therefore, the Company is not required to
comply with the provisions of the Corporate Social Responsibility prescribed under the
Companies Act, 2013. Accordingly, the details in the Annual Report on the CSR activities
is not provided as an annexure to this Report. MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report on operations of the Company as required
under Regulation 34(3) read with Para B of Schedule V of SEBI (LODR) Regulations, 2015, is
provided in a separate section and forms an integral part of this Annual Report. CORPORATE
GOVERNANCE REPORT
The Report on Corporate Governance as stipulated under Regulation 34(3) read with Para
B of Schedule V of SEBI (LODR) Regulations, 2015 forms an integral part of this Report.
The requisite certificate from the Practicing Company Secretary of the Company confirming
compliance with the conditions of corporate governance is attached to this report on
Corporate Governance. INSURANCE
The assets of the Company are adequately insured to take care of any unforeseen
circumstances. MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE
COMPANY
There are no material changes and commitments affecting the financial position of the
Company occurred between the end of the financial year of the Company to which the
financial statements relate and the date of the report.
RISK MANAGEMENT
The risk is the part and partial of every business and the risk management is embedded
in your Company's operating framework. Even though it is not possible to completely
eliminate various risks associated with the business of the Company, the efforts are made
to minimize the impact of such risks on the operations of the Company. The Company has
established a well-defined process of risk management which includes identification,
analysis and assessment of various risks, measurement of probable impact of such risks,
formulation of the risk mitigation strategies and implementation of the same so as to
minimize the impact of such risks on the operations of the Company. The Company has put in
place various internal controls for different activities so as to minimize the impact of
various risks. The Company's approach to addressing the business risk is comprehensive and
includes periodic review of such risks and a framework for mitigating controls and
reporting mechanism of such risks. The risk management framework is reviewed periodically
by the Board of Directors for its effectiveness and compliances. The discussion on risks
and concerns are covered in the Management Discussion and Analysis Report, which forms
part of this Report. VIGIL MECHANISM
Your Company has framed a Vigil Mechanism to report genuine concerns or grievances of
all directors and employees. It provides for adequate safeguards against victimization of
persons who use such mechanism. The Vigil Mechanism Policy has been hosted on the website
of the Company i.e. www.srmtl.com. CODE OF CONDUCT
The Board of Directors has adopted the Code of Conduct for the Directors and Senior
Management and the same has been placed on the Company's website. All the Board members
and the senior management have affirmed compliance with the Code of conduct for the year
under review. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with all the applicable provisions of Secretarial Standard on
Meetings of Board of Directors (SS-1), Revised Secretarial Standard on General Meetings
(SS-2), Secretarial Standard on Dividend (SS-3) Secretarial Standard on Report of the
Board of Directors (SS-4) respectively issued by Institute of Company Secretaries of
India. PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted a
Policy on Prevention, Prohibition and Redressal of sexual harassment at workplace in line
with the provisions of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal} Act, 2013 and rules framed thereunder. Internal Complaints
Committee (ICC) is in place to redress complaints received regarding sexual harassment.
During FY 2022-23, the Company has not received any complaint on sexual harassment of
women at work place. OTHER DISCLOSURES
1) 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.
2) Composite Scheme of Compromise and Arrangement:
The Company had filed the Scheme of Arrangement and Compromise with the Financial
Institutions/ Banks and Shareholders and it was approved by majority of Shareholders and
lenders. The said scheme was dismissed by the single bench of Hon'ble High Court of
Gujarat vide its order dated July 15, 2015. The Company had filed an O.J appeal with the
division bench of Hon'ble High Court of Gujarat which has been dismissed vide its order
dated February 20, 2020 and the Company has filed Review Application on 02/11/2020 before
Hon'ble High Court of Gujarat against the said order and the same is pending before the
Hon'ble Court as of date of this report.
3) Execution of Settlement Agreement with Lenders for waiver of interest etc.:
The Company has made borrowings in the form of loans, debentures, etc. in earlier years
which are under settlement under the Scheme of Arrangement and Compromise. The accumulated
interest on such borrowings is not provided for past several years. Your Company has
entered into a Settlement Agreement with certain lenders for waiver of interest and other
charges as may be applicable, subject to repayment of principal amount with respect to
such loans and debentures on or before 315 July, 2023 or such other extended date
permitted by the lenders at their sole discretion.
4) Settlement/ Waiver of Dividend Component Accumulated on outstanding Cumulative
Redeemable Preference Shares: The Company had issued 10,00,000 15% cumulative preference
shares of face value of 100 each (Preference Shares) in earlier year and out
of which balance 6,66,666 Preference Shares (Outstanding Preference Shares)
amounting to Rs. 6.67 Crores are yet to be redeemed which are under settlement under the
Scheme of Arrangement and Compromise. Further, the Company has entered into
settlement/waiver with the Preference Shareholder who has waived the right to receive the
dividend accumulated on the Preference Shares and accumulated interest on delayed payment
provided that the Company redeems the outstanding preference shares by 31st July, 2023 or
such other extended date permitted by the Preference Shareholder at his sole discretion.
5) Filing Company Petition with National Company Law Tribunal, Ahmedabad Bench under
section 55(3) of the Companies Act, 2013 to issue and allot redeemable preference shares:
The Company has filed petition on March 17, 2023 before the National Company Law Tribunal,
Ahmedabad Bench under section 55(3) of the Companies Act, 2013 to issue and allot 7,66,666
redeemable preference shares of face value of 100 each on the same terms and conditions to
the existing preference shareholder of the value equivalent to the existing outstanding
6,66,666 unredeemed preference shares amounting to X 666.66 Lakhs together with unpaid
dividend of 100.00 Lakhs thereon. Upon sanction of the aforesaid petition and issue of
these further redeemable preference shares, the existing unredeemed preference shares
shall be deemed to have been redeemed. The matter is presently pending before Hon'ble
NCLT.
6) Shifting of Registered Office of the Company:
During the year, the Registered Office of the Company was shifted from 301, Corporate
House, Opp. Torrent House, Income Tax, Ahmedabad 380009, Gujarat, India to 18,
Corporate House, Opp. Dinesh Hall, Navrangpura, Ahmedabad 380009, Gujarat, India due to
administrative convenience.
7) Raising of Funds Through Rights Issue:
The company has an outstanding debt of Rs. 61.72 Crore, being the principal amount of
Term Loan of Rs. 25 Crore, Redeemable Non-Convertible Debentures of Rs. 36.72 crore.
Further, the company has also outstanding preference shares of Rs. 6.67 Crore which are
yet to redeemed. In this regard, the Company had previously initiated settlement with the
lenders of the loan and debentures including preference shareholder as per the Scheme of
Arrangement and Compromise. The liabilities towards interest/dividend /penalties/other due
on these debts/preference shares has increased considerably therefore, in order to reduce
the
debts/liabilities, your Board of Directors vide its meeting held on 8" February,
2023 has proposed to raise the funds through issue of equity shares on Rights Issue basis
to the existing equity shareholders of the Company for the amount up to Rs. 80 Crores to
repay the certain outstanding borrowings including redemption of non-convertible
debentures in supersession of earlier resolution for raising of funds vide its meeting
held on 21st July, 2022. The company has filed the Draft Letter of Offer with SEBI on
22" March, 2023 for the proposed issue. APPRECIATION
Your Directors place on record their sincere appreciation for the continued
co-operation and support extended to the Company by various Banks. Your Directors also
thank the Consumers for their patronage to the Company's products. Your Directors also
place on record sincere appreciation of the continued hard work put in by the employees at
all levels. The Directors also thank the Company's vendors, investors, business
associates, Stock Exchanges, Government of India, State Government and various departments
and agencies for their support and co-operation.
For, Shree Rama Multi-Tech Limited
Place: Moti-Bhoyan |
Mittal K. Patel |
Date: May 29, 2023 |
Chairman |
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(DIN: 03619139) |
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