Shetron Ltd Directors Report.

Your Directors are pleased to present the Fortieth Annual Report on the business and operations of your Company along with the Audited Financial Statements for the year ended 31 March, 2020:

FINANCIAL HIGHLIGHTS :

The Companys financial performance for the year under review and the previous year are furnished below:

Particulars 2019-20 2018-19
Rs in Lakhs Rs in Lakhs
Gross Sales and Other Income 16,399 16,662
Profit before Interest and Depreciation 1,863 2,068
Finance Cost 1,192 1,144
Depreciation 558 593
Profit before Tax 113 331
Less: Provision for Tax 25 60
Less: Deferred Tax - 51
Profit after tax 88 220
Other Comprehensive Income -20 -20
Total Comprehensive Income 68 200

DIVIDEND:

With a view to enhance the value of Shares and to utilize the surplus funds, the Board has decided to plough back the profits and hence, has not recommended dividend for the current year.

TRANSFER TO RESERVES:

The Company proposes to retain the entire amount of Rs 68 Lakhs in the Profit and Loss account.

CHANGE IN NATURE OF BUSINESS:

There were no changes in the nature of business during the year.

OVERVIEW OF COMPANYS FINANCIAL PERFORMANCE:

Your Companys turnover was Rs. 16,399 Lakhs in FY 2019-20 in comparison to Rs 16662 Lakhs in FY 2018-19 which is 1.58% lower than PY 2018-19. Your Companys export turnover increased by Rs. 860 lakhs i.e. Rs. 4320 Lakhs achieved in FY 2019-20 in comparison with Rs. 3456 lakhs in FY 2018-19.

It is quite unfortunate and sad that Corona Virus caused significant health concerns across the Globe and resulted in multiple deaths. Social distancing being the only and the first compulsory remedy, entire World was forced to observe Lockdown. Thanks to early initiatives taken, India declared Lockdown from 24 March 2020. As your Company comes under the purview of essential services, your Company had dispensed operations for a period of one week, post which the operations were commenced with 50% work force on each shift (i.e., on double shift basis) resulting at 60%-70% production capacity. Therefore, there has been no adverse impact on your business due to this pandemic.

Disclosure of material impact of COVID-19 pandemic with reference to Notification

SEBI/HO/CFD/CMD1/CIR/P/2020/84 dated 20 May 2020 under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was made to the Stock Exchange.

BUSINESS PERSPECTIVE:

Metal containers are anticipated to expand over the forecast period owing to nutrition retaining properties of metal containers and increasing health awareness in consumers. Metal Packaging market worldwide is projected to grow by US $ 32. 8 Billion, driven by a compounded growth of 3.1%. Aluminum and steel metals are the two most important types of metals, which are 100% recyclable and also protect food from contamination. The trend of stainless steel in the metal packaging market will witness more growth in the upcoming years, due to the incoming demand from the F&B industry.

The global disposable batteries market is expected to grow at ~5.20% CAGR during the forecast period. of 2018-2023. Dry cell batteries are the most important and the biggest segment of the primary battery market. The use of electronic gadgets has witnessed a steep surge, creating a favorable environment for the growth of the disposable batteries market. Batteries are central to the use of many consumer electronics goods. Dry cell batteries experience huge demand from rural areas where continuous and unlimited electric supplies are not available According to an association of Indian Dry cell manufacturers (AIDCM), the rural accounted for majority of the volume sales share of the Indian dry cell battery market. The factors like increase in disposable income and growth in comfortable level with the use of various, rapidly increasing, battery operated gadgets will strengthen the Indias historically depressed per capita consumption. The increase in lead pollution and the economic slowdown in the automotive sector pose hindrances to market growth. In addition, the growth of the lead-acid battery market is also being challenged by the increasing adoption of dry batteries.

The global packaging market size during the COVID-19 pandemic is projected to grow from USD 909.2 billion in 2019 to USD 1,012.6 billion by 2021, at a Compound Annual Growth Rate (CAGR) of 5.5% as the most likely outcome during the forecast period, with the best-case scenario reflecting 9.2% growth and the worst-case scenario at 2.2% growth. The major drivers for the packaging industry include the increased demand for FMCG and pharmaceutical packaging, rising e-commerce sales due to lockdown

The highlights of the industry trend, the outlook and the opportunities ahead for the Company are exhibited in detail in the Management Discussion and Analysis Report.

EXPORTS:

In the year 2019-20, the export turnover was Rs.4320 Lakhs as compared to the previous year exports of Rs.3456 Lakhs, representing an increase of 25 % over the previous year.

SUBSIDIARY:

Shetron Metropak Private Limited, Wholly owned Subsidiary was amalgamated with your Company pursuant to Scheme of Amalgamation approved by the National Company Law Tribunal, Bengaluru Bench vide its order dated 27 June, 2019. Necessary compliances are being made to receive the final decree.

As on date your Company does not have any subsidiary company.

The Company has no associate companies within the meaning of Section 2(6) of the Companies Act, 2013.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which this financial statements relate on the date of this report.

The economy has been affected all over world due to COVID-19 Pandemic. Due to relaxation on various fronts by the Government in the recent past, operations are expected to be normalized in the coming months. However, impact of COVID-19 will affect the profit margin and percentage of such margin will depend on the period required for restoration of normalcy in all the relevant areas and blooming of the economy in the coming days, particularly in the field of metal packing related industries. Effects of COVID-19 being unclear, it will be extremely difficult to predict market behavior as of now.

SHARE CAPITAL:

During the financial year Authorized Share Capital of Subsidiary Company Shetron Metro Pack Private Limited was merged into the Authorized Share Capital of Holding Company. As on March 31, 2020, the Authorized Share Capital of the Company was Rs. 30,00,00,000/- (Rupees Thirty Crores Only) and the Paid up Share Capital was Rs. 9,00,33,000/- (Rupees Nine Crores Thirty Three Thousand Only).

CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL :

Members of the Companys Board of Directors are eminent persons of proven competence and integrity. Besides experience, strong financial acumen, strategic astuteness and leadership qualities and they have a significant degree of commitment to the Company and devote adequate time to the meetings and preparation.

In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Kartik Manahor Nayak, Jt. Managing Director, retires at the forthcoming Annual General Meeting and being eligible, offers himself for reappointment.

Based on the recommendations of the Nomination and Remuneration Committee, the Board at its Meeting held on 17 April, 2019 and 25 July, 2019:

(a) re-appointed Mr. Babugowda Sanganagowda Patil (DIN: 00061959) as an Independent Director of the Company for a second term of 3 Years i.e 17 September 2019 to 16 September 2022 .

(b) re-appointed Mr. Divakar Sanku Shetty ( DIN: 00432755)) as Executive Chairman and Whole Time Director of the Company for a period of 5 Years i.e. 16 May, 2019 to 15 May,2024

(c) re-appointed Mr. Kartik Nayak (DIN: 00477686) as Joint Managing Director of the Company for a period of

4 Years i.e. 16 May, 2019 to 15 May, 2023,

(d) re-appointed Mr. Praveen Mally (DIN: 00798354) as Joint Managing Director of the Company for a period of 3 Years i.e. 16 May, 2019 to 15 May, 2022,

(e) appointed Dr. Jyoti Baliga (DIN: 00484000) as Independent Woman Director for a period of Three (3) years with effect from 25 July, 2019 to 24 July, 2022.

Subsequently, approvals from Shareholders were obtained in the previous Annual General Meeting held on 17 September, 2020.

BOARD MEETINGS :

During the year under review, the Board of Directors met five (5) times i.e. on 17-April-2019, 20-May-2019, 25-July-2019, 21-October-2019 and 28-January-2020.

The Meetings of the Board are held at regular intervals with a time gap of not more than 120 days between two consecutive Meetings. The Agenda of the Meetings were circulated to Directors in advance. Minutes of the Meetings of the Board of Directors were circulated amongst the Directors for their perusal.

Our definition of Independence of Directors is derived from Regulation 16(b) of the Listing Regulations and Section 149(6) of the Companies Act, 2013. The Company has received necessary declarations from each Independent Director of the Company that they fulfill the requirements as stipulated in Section 149 (6) of the Companies Act, 2013 read with the SEBI (LODR) Regulations, 2015 (the Listing Regulations).

Further pursuant to Clause VII (1) of Schedule IV of the Companies Act, 2013, the Independent Directors had a separate meeting on 24 June,2020.

SEBI (LODR)(Amendment) Regulations, 2018 has changed the evaluation criteria of Independent Directors from April 1, 2019. As per the amendment, evaluation of Independent Directors by the entire Board shall include:

(a) Performance of Directors and

(b) Fulfilment of independence criteria as specified in Listing Regulations and their independence from the management.

Board has evaluated the Independent Directors and confirms that all the Independent Directors of the Company fulfilled the independence criteria as specified in Listing Regulations and their independence from the management.

Details on terms of appointment of Independent Directors and the familiarization program have been displayed on website of the Company at http://shetrongroup.in/pdf/Familiarisation_Programme.pdf

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The policy of the Company on directors appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and such other matters, as required under subsection (3) of Section 178 of the Companies Act, 2013, is available on the Companys website at, http://shetrongroup.in/pdf/Nomination%20&%20Remuneration%20Policy.pdf

The Company affirms that the remuneration paid to the Directors is as per the terms laid out in the nomination and remuneration policy of the Company.

DIRECTORS RESPONSIBILITY STATEMENT :

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory and Secretarial Auditors, the reviews performed by Management and the relevant Board Committees, including the Audit Committee, your Board is of the opinion that the Companys internal financial controls were adequate during the financial year 2019-20.

Accordingly, Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

1) In the preparation of the Annual Accounts, 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 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 profit and loss of the company for that period;

3) The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

4) The Directors had prepared the Annual Accounts on a Going Concern basis;

5) 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.

6) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

BOARD EVALUATION :

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out an annual performance, evaluation of its performance, and of the Directors individually, as well as the evaluation of the working of its Audit and Nomination & Remuneration Committees.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE:

During the year the Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013.

The details of the investments made by Company are given in the notes to the financial statements.

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Ruless, 2014, an extract of Annual Return in MGT 9 is annexed as a part of this Annual Report (Annexure - 1) is furnished and the same is published on the website of the Company.

DETAILS OF INTERNAL FINANCIAL CONTROLS REALTED TO FINANCIAL STATEMENTS:

Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. There are in accordance with generally accepted accounting principles in India.

COMPLIANCE WITH THE APPLICABLE SECRETARIAL STANDARDS :

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings.

ADDITIONAL DISCLOSURES :

In line with the requirements of the Listing Regulations and Accounting Standards, your Company has made additional disclosures in respect of Related Party transactions and segment reporting in notes to accounts.

RISK MANAGEMENT POLICY:

The Audit Committee has oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a ongoing basis. The policy for risk management is available on the Companys website at, http://shetrongroup.in/pdf/Risk%20Management%20Policy.pdf

DEPOSITS:

In terms of the provision of Sections 73, 74 & 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, your Company has not accepted/ renewed any fixed deposits from the public during the year under review.

AWARDS & LAURELS:

Your Company was awarded the Bronze winner by the Canmaker magazine for the year 2019-20 in the Ends, Caps & Closures category.

FRAUD REPORTED BY THE AUDITORS DURING THE YEAR:

Not applicable as there were no such instances during the year.

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 - 2) and is attached to this report.

The Company endeavour to support the environment by adopting environment-friendly practices in the working patterns The efforts in this direction centre around making efficient use of natural resources, elimination of waste and promoting recycling of resources.

STATUTORY AUDITORS:

Messrs Naresh & Co, Chartered Accountants, (Firm Registration No. 011293S) were appointed as the Statutory Auditors at the Annual General Meeting held in the year 2017 and hold office for a term of 5 years, till the conclusion of the 42 Annual General Meeting of the Company to be held in the year 2022. Consequent to the amendments to the Companies Act, 2013, ratification of appointment of the statutory auditor at every Annual General Meeting is no longer required.

COST AUDITORS:

As per the requirement of the Central Government and pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records relating to all product line. The Board of Directors, on the recommendation of Audit Committee, has appointed Messrs Vishwanath Bhat & Co, Cost Auditors to audit the cost accounts of the Company for the financial year 2020-21.

As required under the Companies Act, 2013, a resolution seeking approval of Members for the remuneration payable to the Cost Auditor forms part of the notice convening the Annual General meeting.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr. Vijayakrishna K T, Practising Company Secretary was appointed to undertake the Secretarial Audit. The Report of the Secretarial Audit for the year ended 31 March, 2020 is attached to the Boards Report (Annexure - 3).

AUDITORS REPORT AND SECRETARIAL AUDIT REPORT:

There were no qualifications, reservations or adverse remarks made either by the Statutory Auditors or by the Secretarial Auditor in their respective reports and their reports are annexed.

CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of the Companies Act, 2013 on Corporate Social Responsibility are not applicable to the Company.

REPORT ON CORPORATE GOVERNANCE:

Your Company has taken adequate steps to adhere to all the stipulations laid down in Regulation 27 of the Listing Regulations. A report on compliance of the code is annexed herewith (Annexure - 4).

Certificate from Practising Company Secretary confirming the compliance with the conditions of Corporate Governance as stipulated under Regulation 27 of the Listing Regulations, is attached to this report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and at arms length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. All contracts / arrangements / transactions with related parties are placed before the Audit Committee and also the Board, as may be required, for approval.

The policy on Materiality of Related Party Transactions and also on dealing with related party transactions as approved by the Audit Committee and the Board of Directors are displayed on the Companys website http://shetrongroup.in/pdf/Realted%20Party%20Transaction%20Policy.pdf.

All Related Party Transactions entered during the year were in the Ordinary Course of Business and at Arms Length basis. No Material Related Party Transactions, i.e. transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in (Annexure- 5) in Form No. AOC-2 and the same forms part of this report.

Details of contracts / arrangements / transactions with related parties are given in the notes to the financial statements.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

Adhering to the provisions of Section 125 of the Companies Act, 2013 relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the company, from to time to time on due dates, to the Investor Education and Protection Fund.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has been employing women employees in various cadres within its office and factory premises. The company has in place a policy against sexual harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee is set up at shop floor level to redress any complaints received. All employees are covered under the policy.

(a). number of complaints filed during the financial year(19-20) Nil
(b). number of complaints disposed of during the financial year(19-20) Nil
(c). number of complaints pending as on end of the financial year. (19-20) Nil

HEALTH, SAFETY AND ENVIRONMENT PROTECTION

Your Company has complied with all applicable environment laws and labour laws. The Company has been taking all the necessary measures to protect the environment and maximize worker protection and safety. The companys policy require conduct of operation in such a manner so as to ensure safety of all concerned, compliance of environment regulations and preservation of natural resources.

DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION) RULES, 2014:

Disclosures required under Section 197 of the Companies Act, 2013 read with rule 5 of the Companies (Appointment & Remuneration) Rules, 2014 have been annexed as (Annexure - 6).

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report as required, is annexed as (Annexure- 7).

ANNEXURES FORMING A PART THE BOARD REPORT

The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form a part of this Report:

Annexure Particulars
1 Extract of the Annual Return in Form MGT-9
2 Particulars of Conservation of Energy,
Technology and Foreign Exchange
3 Secretarial Audit Report
4 Corporate Governance Report
5 Related Party Transactions
6 Managerial Remuneration and Particulars of Employees
7 Management Discussion And Analysis Report

ACKNOWLEDGEMENTS:

Your Directors wish to place on record their sincere thanks to bankers, business associates, consultants, various Government Authorities and employees at all levels in the company for their continued support extended to your Companys activities during the year under review. Your directors also acknowledge gratefully the shareholders for their support and confidence reposed in your Company.

By the order of the Board
Place : Bengaluru For Shetron Limited
th
Date : 24 June, 2020
Divakar S Shetty
Executive Chairman
DIN: 00432755
[Address: Divya Bunglow,
Dr. R.S. Jain Marg,
Gandhigram Road,
Juhu, Mumbai 400049]