Your Directors have pleasure in presenting their 35th Annual Report and AuditedAccounts for the financial year ended 31st March 2015.
|FINANCIAL RESULTS: ||2014-2015 ||2013-2014 |
|Turnover during the year ||4151.08 ||3422.54 |
|Profits/(Loss) before Depreciation & Tax ||265.10 ||56.53 |
|Less: Depreciation ||33.04 ||31.22 |
|Profits/(Loss) before Tax ||232.06 ||25.31 |
|Provision for Tax || || |
|: Current Tax ||- ||- |
|: Deferred Tax ||(2.49) ||1.64 |
|Profit/(Loss) after tax ||229.57 ||26.95 |
|Add/(Less) past Year Adjustment ||1.84 ||- |
|Less: Depreciation(Assets Written off) ||(5.27) ||- |
|Profit/(Loss) brought forward ||(390.46) ||(417.41) |
|Balance carried forward ||(164.32) ||(390.46) |
The sales turnover of the Company for the year was Rs.4151.08 lakhs as compared toprevious year Rs.3422.54 lakhs. Production for the year was 13372.691 M.T as compared toprevious year 11898.068 MT.
The Sales turnover of the company has been increased by 21.29% as compared to previousyear and production of the Company has been increased by 12.39% as compared to previousyear.
MANAGEMENT DISCUSSION AND ANALYSIS
In the competitive market the Company was able to achieve Sales and Other Income inmonetary terms for the year to Rs. 41.51 crores as compared to Rs. 34.23 crores in theprevious year and the Income was Rs. 0.10 crores as compared to Rs. 0.06 crores in theprevious year. The profitability of the Company has been increased as compared to previousyear inspite of slackness of sale of writingprinting&newsprint paper.
The Indian paper industry is highly fragmented. According to estimates the totalnumber of mills vary from anywhere between 500 to over 1000. The top five producersaccount for 15 per cent of the total paper capacity in the country. The industry is highlydiverse technical and capital intensive. Further norms relating to environmentalpollution such as chlorine free operations and tighter effluent treatment/dischargeparameters etc. have restricted rapid expansion of paper industrys capacity. Paperconsumption is an indicator of the economic and literacy status of any country. WhileIndia accounts for nearly 15% of the world population it consumes only1% of the worldpaper production. Indias per capita consumption of paper at about 7 kgs. is very lowas compared to the world average of over 50 kgs. The impact of just 1 kg. Increase in percapita consumption would lead to increase in demand by 1.1 million M.T. of paper. Paperdemand is inextricably linked to economic growth industrial production advertisementexpenditure expenditure on education etc. while industrial paper demand is driven byindustrial output and packaging industry growth etc. printing and writing paper demand isdetermined by public spending on education expenditure on publicity and general literacylevels. The growing demand of paper has encouraged a gradual improvement in capacityutilizations. Stringent pollution control norms will act as a determent to smaller playersfrom adding capacities as it would require significant investment to upgrade the existingfacility to meet these norms. Though currently there is no law in force the company thatthe Indian paper industry will be compelled to eliminate the use of chlorine for bleachingin the next few years.
The paper industry in India is dependent on three parameters:
1. The literacy level (which is dependent on government expenditure on education).
2. The GDP growth rates India has witnessed phenomenal development in the field ofeducation both in quantitative and qualitative terms since independence. However thenational goals of universal elementary education and total eradication of illiteracy stillremain elusive. The Government is committed to achieving these national goals and has beensteadily increasing the budgetary allocation for education. The Country has also madesignificant strides in higher and technical education. With the Indian economy on a growthpath and the government increasing emphasis on the education the future of the Indianpaper industry looks positive with immense growth potential.
3. The domestic demand of paper has been forecasted to be 10 million M.T. by 2010 andover 14 Million M.T.by the year 2020. At present the demand of the paper is witnessing ahealthy growth of 6.6%(app.) as compared to 5 percent (pp.) in the past. The Indian paperindustry is highly fragmented with a large number of organized and unorganized playersoperating in the market. Some of the key players in the industry are Ballarpur IndustriesITC Sirpur Paper Mills West Coast Paper Mills J K Paper Century Paper Mills TamilNadu Newsprint Hindustan Paper Corporation Limited Rama Newsprint & Papers Limitedetc. Indian paper industry needs the following to be globally more competitive:
Sustained availability of good quality of raw materials (forest based) and bulkimport of waste paper to supplement the raw materials supplies.
Adequate modernization of the manufacturing facilities.
Improvement of infrastructure.
Quality improvements and reduction in cost of production.
Import policy conducive for import of material equipment instruments rawmaterials and technologies.
Achieving Economies of Scale.
However the Prospects of paper industry appear positive with the existingdemand-supply gap and the Governments focus on education at every level. Thefurther imposition of 1% Higher education Cess and Education Cess of 2% introduced by theGovernment reflects the focus of the Government towards Education in the Country. Theabove steps initiated by the Government are expected to further fuel the demand for paper.
Domestic paper prices are linked with international price. Hence paper prices in Indiaare very much dependent on the international demand supply situation for paper. Howeverrecent stress on education sector and growth in the retail sector has acted as a catalystfor demand in packaging grade paper and therefore the fortunes of the Indian PaperIndustry is largely internally driven.
OUTLOOK FOR THE COMPANY:
The paper industry has been showing signs of increasing demand and the long-termoutlook and growth prospects of the industry appear positive.
The rapid industrialization of the country during the previous five years planstogether with the increase in population escalated the countrys demand for paper andpaperboards. The extent of usages of paper & Packaging Industry in a country isgenerally taken as parameters of its cultural and industrial activities. It plays anincreasingly important role in modern civilized society.
FACTORS AFFECTING OUR FUTURE RESULTS OF OPERATIONS:
Our future results of operations may potentially be affected by the following factors:
? Competitive conditions in the industry.
? Growth of paper sector in India.
? Our ability to continuously operate and maintain our manufacturing facilitiesoptimally.
? Technological changes in the industry.
? Escalation in prices as well as the availability of raw materials.
? General economic and business conditions in India.
The Company continues its focus on development of human resource. The relations of themanagement with employees during the year continued to be cordial. Learning anddevelopment has been strengthened to bring value addition in the employee and to enhanceTeam Building leading towards success. The Company focuses on providing the employeesmotivating work environment and excellent career development opportunities.
INTERNAL CONTROL SYSTEMS:
The Company has effective internal control systems for compliance of laws rules andregulations to safeguard the interest of the Company. The Company maintains a system ofinternal controls designed to provide reasonable assurance regarding the effectiveness andefficiency of operations and for safeguarding the assets of the Company and for ensuringappropriate recording and reporting of financial information for ensuring reliability offinancial controls and for ensuring compliance of applicable laws and regulations. Theinternal audit covers a wide variety of operational matters and ensures compliance withspecific standards with regard to reliability and suitability of policies and procedures.The internal auditor system report to the top management through Chairman & ManagingDirector and continuously monitors adherence to lay down systems and policies through astructured internal audit process. The systems are regularly reviewed and modified forchanges in operating and regulatory requirements. The Audit Committee reviews the adequacyand effectiveness of internal control systems and suggests improvement for strengtheningthe same from time to time.
RISKS & CONCERNS:
The unprecedented variation in the prices of raw materials particularly Waste paperChemicals consumables coal and other inputes for executing paper orders in uncertainmarket condition. The unutilized capacity in the paper industry and intense competitionadversely impact product prices and margins.
The domestic demand supply scenario is expected to be balanced even though a number ofcapacity expansions are expected to be implemented by various companies the state over thenext 1-2 years. In this scenario the player with lower production costs would be in aposition to utilize capacities optimally.
The products prices are subjected to changes with international price. Sharp fall inprice will affect the profitability of the unit.
Adverse climatic condition will affect the supply line of the product which will affectthe operation and profitability.
The Company has incurred Profit during the financial year and no dividend has beendeclared.
During the year the company has not accepted any Fixed Deposits within the meaning ofSection 73 and 74 of the Companies Act 2013.
EXPENDITURE ON R & D:
Research Development and Improvement of Products are in built on going activity withinthe existing manufacturing operation of the company. Expenditure on R & D is notseparately allocated and identified.
TECHNOLOGY ABSORPTION ADAPTATION & INNOVATION:
The Company does not require any technical know how as the process of manufacturing isconventional one. The Company does not have any separate technical arrangement for runningthe unit.
COMPANIES (PARTICULARS OF EMPLOYEES OF GOVERNMENT COMPANIES & OTHER COMPANIES)AMENDMENT RULE 2011
There are no employees who have received remuneration more than Rs. 6000000/- (RupeesSixty Lacs) p.a. being employed throughout the year or more than Rs. 500000/- (RupeesFive Lacs ) p.m. for part of the year as specified under Section 134 of the Companies Act2013 read with the (Particulars of Government Companies and Companies) Amendment Rules2011.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
As required under companies (Disclosure of particulars in the Report of Board ofDirectors) Rule 1988 the necessary particulars regarding conservation of energy are givenin Annexure-1 to this report.
Pursuant to Clause 49 of the Listing Agreement a report on Corporate Governance andthe Company Secretary Certificate in this regard form part of this report and are annexedherewith in Annexure-II.
In accordance with the provision of the Companies Act 2013 Sri. Anil Kumar Gilra andSri. Chava Suresh Babu retires by rotation at this meeting and being eligible offerthemselves for reappointment.
Pursuant to Section 149(1) of the Companies Act 2013 the Board of directors of theCompany has on 13.02.2015 appointed woman director Ms. Rekha Bhawsinka as AdditionalDirector in the category of Non-executive Independent Director. Ms. Rekha Bhawsinka shallhold office upto death of the ensuing Annual General Meeting of the Company and beingeligible offer herself for re-appointment.
The Directors recommend their appointment/re-appointment at the ensuing Annual GeneralMeeting.
DIRECTOR S RESPONSIBILITY STATEMENT:
Your Directors confirm:
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors Responsibility Statement it is hereby confirmed that:
(a) In the preparation of the annual accounts for the financial year ended 31stMarch 2015 the applicable accounting standards had been followed along with properexplanation relating to material departures;
(b) We have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the company as at 31st March 2015 and theStatement of Profit and Loss of the company for that period;
(c) We have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
(d) We have prepared the Annual Accounts on a going concern basis; and
(e) We have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Pursuant to the Provisions of Section 148 of the Companies Act 2013 M/s. RAY NAYAK& ASSOCIATES Cost Accountants (F.R.N.No. 000241) were appointed as the Cost Auditorsto conduct audit of cost records for manufacturing Paper and Paper Board for the financialyear 2014-15.
The Cost Audit Report for the financial year ended 31st March 2014 has beenfiled with Ministry of Corporate Affairs.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarms length basis and were in the ordinary course of companys business. TheCompany has not entered into any contract arrangement or transaction with any relatedparty which could be considered as material within the meaning of clause 49 of the listingAgreement.
Related party transactions under Accounting Standard AS18 are disclosed in the notes tothe financial statements.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return as on March 31 2015 in the prescribed form No. MGT-9pursuant to section 92(3) of theCompanies Act 2013 and Rule 12(1) of the Companies(Management and Administration) Rules 2014 is attached herewith as `Annexure IIIand forms part of this Report.
The Auditors of the Company M/s. B R R & Associates retire at this ensuing AnnualGeneral Meeting and being eligible offer themselves for reappointment as auditors of theCompany. Your Directors recommend the same for your consideration.
Your Directors express their sincere thanks and place on record their deep appreciationfor the patronage extended by the shareholders valued customers Bankers Governmentauthorities and the investors for their continued support and confidence in the Company.
| ||FOR & ON BEHALF OF BOARD OF DIRECTORS |
|PLACE: CUTTACK ||ANIL KUMAR GILRA |
|DATE: 12th August 2015 ||WHOLETIME DIRECTOR |
ANNEXURES 1 TO DIRECTORS REPORT
Information under Section 217/(i) (c) of the Companies Act 1956 read with Companies(Disclosure of particulars in the report of Board of Directors) Rules 1988 and formingpart of the Directors Report for the year ended 31st March 2015.
A. CONSERVATION OF ENERGY:
Energy Conservation Measures : The company is taking step for conservation of energyand to ensure that the company uses the most suitable modern technology.
| || ||(Amount in Rupees) |
|TOTAL ENERGY CONSUMPTION || || |
|POWER & FUEL CONSUMPTION ||2014-2015 ||2013-2014 |
|ELECTRICITY || || |
|Purchased Units ||8369678 ||8916407 |
|Total Amount ||55225699 ||51358505 |
|Rate/Unit ||6.60 ||5.76 |
|C O A L || || |
|Unit (M.T) ||6777.860 ||11506.220 |
|Amount ||22704349 ||31987307 |
|Cost/ M.T. ||3349.78 ||2780.00 |
|CONSUMPTION PER UNIT OF PRODUCTION Electricity (Unit/MT) ||625.88 ||749.40 |
|Coal (MT/MT) ||0.507 ||0.967 |
B. FOREIGN EXCHANGE EARNINGS & OUTGO