CHADHA PAPERS LIMITED
ANNUAL REPORT 2010-2011
Your Directors have pleasure in presenting the 21 ST Annual Report together
with the Audited Statement of Accounts of the company for the year ended
31-03-2011 with the Auditors Report thereon:
1. FINANCIAL RESULTS:
Installed Capacity 19800.000 MT 19800.000 MT
Production 0 0
Capacity utilization 0 0
Installed Capacity 21750.000 MT 21750.000 MT
Production 2104.535 MT 5912.366 MT
Capacity utilisation 9.67% 27.18%
Installed Capacity 36000.0000 MT 36000.0000 MT
11975.12 MT 15835.388 MT
Rs. In lacs) (Rs. In lacs)
Sales (Net of Returns) 3596.10 5204.06
Depreciation 220.01 140.95
Depreciation for the year 601.06 449.09
to earlier year (-)13.22 (-)27.49
of Income Tax 0 0
Profit after Depreciation (-)381.06 (-)308.14
Provision for Income Tax (-)1.01 (-)0.98
Deferred Income Tax
Liability/Assets (+)167.43 (+)104.57
Profit after Tax (-)227.86 (-)232.04
A) NEWS PRINT/ WRITING-PRINTING PAPER:
News print and Writing-Printing paper having installed capacity of 36000 MT
per annum has achieved capacity utilization to the tune of 33.26%. The
production of the News print and Writing-Printing plant has gone down by
10.73% in terms of capacity utilization during this year due to power plant
shut and frequent technical snags in this machine.
B) KRAFT PAPER:
During the year under review, the company has not been able to increase
capacity utilization in both Kraft paper machines, as productivity
remained low since both the machines are outdated, as far as process is
concerned. PM-I was under shut for full of the year.
The sales targets in Kraft paper also could not be achieved due the liberal
policy of our adjoining state of Uttarakhand in regard to full excise duty
exemption. Because of basic reason of excise exemption, maximum number of
medium and small units, which are not able to avail Convent, have diverted
to duty free paper from Uttarakhand and Himachal States.
The overall performance during the year is satisfactory since, your company
has achieved the targeted profitability as PBD stood at Rs. 220.01 Lacs as
against Rs. 140.95 Lacs in immediate preceding year.
3. FUTURE OUTLOOK:
In order to further improve company's turnover, management has been taking
various steps and concentrating more on markets where demand of our product
is more and favorable business conditions exist. The company has also
taken steps for modernization/renovation of both Kraft Paper Machine by
making it compatible for use of total waste paper based pulp.
All possible efforts are being made to improve the overall performance of
the company and effect of same will be further seen in near future, as good
demand of writing printing paper exists in domestic as well as export
4. FINANCIAL ASSISTANCE:
Term loan of Rs. 3587.22 lacs was availed from Punjab & Sind Bank,
Industrial Finance Branch, New Delhi for the Writing Printing/Newsprint
Paper project and co-generation plant. Further Cash credit limit of Rs.
332.39 Lacs & Rs. 1996.67 Lacs were availed from OBC, Rampur and
PSB,Delhi, respectively. The interest and installments are being repaid in
time as per sanction.
In view of requirement of funds for business, the Board of Directors of
your company have not recommended any dividend for the year 2010-2011.
6. INDUSTRIAL RELATIONS:
The employee-employer relationship remained cordial and harmonious
throughout the year. The Board of Directors of your Company place on record
their satisfaction for the dedicated services rendered by the employees of
7. CAPITAL EXPENDITURE:
The total capital expenditure incurred during the year amounts to Rs.729.25
Lacks in the plant for its smooth running.
8. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO:
Particulars in respect of conservation of Energy Technology absorption and
Foreign Exchange earnings and outgoing as required under section 217(1)
(e) of the Companies Act, 1956 read with the companies (Disclosure of
particulars in the report of Board of Directors) Rules 1988 are given
in the Form `A' attached hereto and Form `B' part of this Report.
9. SUBSIDIARY COMPANY:
During the year 2006-07 the company has acquired 99.92 % shares of company,
Manorama Papers Mills Ltd. and during the Year 2010-11 the company has
acquired 90% shares of company M/s JKC Portfolio Pvt. Ltd. The above said
companies has become subsidiary of your company.
S. Rajendra Sing Chadha retires by rotation in accordance with the
Articles of Association of the Company at the ensuing Annual General
Meeting and being eligible, offers themselves for re-appointment.
None of the Directors of your company is disqualified under section
274(1)(g) of the companies Act'1956. As required by law, this position is
also reflected in the Auditor Report.
M/s SNMG, Chartered Accountants , New Delhi , statutory auditors retire
at the conclusion of the ensuing Annual General Meeting of the company and
being eligible offer themselves for re-appointment. They have confirmed
that their appointment, if made, will be in accordance with the limits
specified U/s 224(1B) of the Companies Act'1956.
12. PARTICULARS OF EMPLOYEES:
None of the employees was in receipt of remuneration in excess of the limit
specified U/s 217(2A) of the Companies Act 1956 during the year under
13. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to section 217(2AA) of the Companies Act, 1956 your Directors
state that :
(i) In the preparation of Annual Accounts, the applicable accounting
standards have been followed along with proper explanation relating to
(ii) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give true and fair view of the state of affairs of
the Company at the end of financial year and the profit of the company
for the period.
(iii) The Directors have taken proper and sufficient care for the
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.
(iv) The Directors have prepared the annual accounts on a going concern
14. COMPLIANCE CERTIFICATE:
A certificate from the Auditors of the Company regarding compliance of
conditions of Corporate Governance as stipulated under Clause 49 of the
Listing Agreement is attached to this report.
15. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
(I) INDUSTRY STRUCTURE AND DEVELOPMENTS:
During the financial year 2010-11, the overall sales target could not be
achieved due to power plant shut, due to technical snag in power plant
coupled with Kraft machine-II under shut , sales target of Kraft paper
could not be met due the liberal policy of our adjoining state of
Uttaranchal in regard to full excise duty exemption. Maximum medium and
small units which are not opting for availment of Convert, have diverted to
duty free paper from Uttaranchal and Himachal States. The Writing
Printing/News Print plant has achieved 33.26% of installed capacity.
(ii) OPPORTUNITIES & THREATS:
New opportunities for the company are widely open after the launch of News
Print/and export quality Writing & Printing Paper and the Management is
making strategies to capture the domestic and export markets. Also further
expansion of writing printing & news print paper is under planning.
Threat to our business is the gradual erosion of the market, specially for
the Kraft Paper and its substitute which may invade the future market.
(iii) SEGMENT WISE OR PRODUCT WISE PERFORMANCE :
For the financial year 2010-11, following are the performance figures for
our main products.
(a) Kraft Paper:
Our share of the market has decreased, as sales are down by Rs. 613.75
lacs from previous year. However further actions are initiated to gain
better market share in future.
(b) News Print/Writing & Printing Paper:
During the year, your company could not achieve good market share of
writing printing paper , as sales decreased by 6513 MT from previous year
in terms of quantitative figures. Further the Management is making efforts
to gain better market share in future too.
The value of services have reduced in comparison to previous year, as
manpower being used in modernization/renovation of both Kraft paper have
been again shifted to services segment.
Further your company has also dealt in relinquishment of rights of
Immovable property during the financial year.
The company had installed News Print/Writing & Printing Paper Plant keeping
in view the good market demand of this product and further management has
planned for expansion of the same. The demand of Kraft Paper was low in the
market due to excessive installed capacity of Kraft Paper plants in the
country. However looking into demand of High BF Kraft paper, modernization
and up gradation of both Kraft machine is under taken. In addition, the
Management is concentrating more on markets where demand of our products is
more and favorable business conditions exists including overseas market.
(v) RISKS & CONCERNS:
The company faces commercial competition from other paper industries. The
reduced demand from market combined with threat from over existing capacity
of Kraft paper plants in country, continue to pose a major threat. The
additional concern for the company is the low productivity of P.M. II
since the machine is outdated as far as process is concerned. However, with
diversified project of News Print/Writing & Printing paper and
modernization of both Kraft machines, the company is expecting more
profitability as good demand of writing printing paper exists in domestic
as well as export market. The quality of our product has been well accepted
in the market.
(vi) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:
The company has a proper and adequate system of internal controls to ensure
that all assets are safeguarded, and protected against loss from
unauthorized use or disposition, and that transactions are authorized,
recorded, and reported correctly.
The internal control systems are supplemented by an extensive reviews by
management, and documented policies, guidelines and procedures. The
internal control systems are designed to ensure that the financial and
other records are reliable, for preparing financial statements and other
data, and for maintaining accountability of assets.
(vii) DISCUSSION ON FINANCIAL PERFORMANCE IN RESPECT TO OPERATIONAL
The total turnover of the company for the year 2010-11 is Rs. 3596.10 Lacs
compared to Rs. 5204.06 Lacs in 2009-10. The operational profit of the
company for the year 2010-11 is Rs.220.01 Lacs as compared to Rs.
140.95 Lacs in 2009-10. The loss before tax for the year 2010-11 is
Rs.381.06 Lacs as compared to Rs.308.14 Lacs in 2009-10.
(viii) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL FRONT,INCLUDING
NUMBER OF PEOPLE EMPLOYED :
Human resources are the strength of your company. The company believes in
empowering employees through greater knowledge, opportunity,
responsibility, accountability and reward. The company takes immense pride
in providing an equal opportunity, work environment to its employees with
great emphasis on identifying & nurturing the talent. This involves a
practice of encouraging all the employees to give their best towards
attainment of laid down objectives of the company.
The industrial relations between the Management & employees are cordial and
important decisions are taken after mutual discussions. The company has
technically qualified work force, which is well paid, motivated and
moderate in approach. The company work force is efficient and hard working.
Overall the industrial relations in the company are cordial and harmonious.
Yours Directors would like to express their grateful appreciation for the
assistance and co-operation received form the Financial Institutions,
Banks, Government Authorities, Customers and Shareholders during the year
under review. Your Directors wish to place on record their deep sense of
appreciation for the devoted services of the Executives, Staff and Workers
of the Company.
For and on behalf of the
BOARD OF DIRECTORS
Dated : 2nd September, 2011
(A) DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY.
POWER & FUEL CONSUMPTION CURRENT PREVIOUS
(From Paddy Husk, Coal etc.)
Total Unit Generated 1,97,24,887 3,03,15,325
Total Cost (Rs.) 14,49,77,923 22,08,67,843
Rate/ Unit (MT) 7.35 7.29
Total units Generated 4,03,832 2,62,092
Total Amount 42,52,348 23,47,032
Rate/unit 10.53 8.96
(B) CONSUMPTION PER
MT OF PRODUCTION:
1. D.G. Set/Turbine Set 1429.63 Units 1245.58 Units
Paddy Husk, Pith Baggase and Coal consumed for units generated from Boiler
turbine set also includes steams being used in plant.
a) Research and Development:
The company has started production of Writing Printing/News Print Grade
paper through most modern technology.
b)Technology absorption, adaptation and innovation:
(i) Latest technology has been adopted in the plant to maximize production,
yield and better quality along with minimum consumption of energy by
Installing Co-generation plant.
(ii) Technology Imported:
D. FOREIGN EXCHANGE EARNING & OUTGO:
CIF VALUE OF IMPORTS Qty. (MT) Value Qty. (MT) Value
Raw Materials NIL NIL NIL NIL
Spare Parts NIL NIL NIL NIL
Capital Equipments NIL NIL NIL NIL
Chemicals NIL NIL NIL NIL
E. Information pursuant to section 212 of the companies Act,1956 relating
to subsidiary companies:
Company has Two subsidiary Company.
For and on behalf of the
BOARD OF DIRECTORS