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Kalptaru Papers Ltd.

BSE: 590036 Sector: Industrials
NSE: N.A. ISIN Code: INE783C01019
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Kalptaru Papers Ltd. (KALPTARUPAPERS) - Director Report

Company director report

Directors' Report

To

The Members

Kalptaru Papers Limited

Ahmedabad.

Your directors are presenting herewith their 26th Annual Report together with theAudited Statements of Accounts for the period ended on 31st March 2014.

PERFORMANCE HIGHLIGHTS:

(Rs. in Lac)
Particulars Current year Ended on 31/03/2014 Previous year Ended on 31/03/2013
Revenue from Operations 3622.89 7588.19
Other Income 11.18 8.43
Profit/Loss before exceptional & extraordinary items & tax (1162.90) (146.10)
Exceptional Items 21.15 -
Extraordinary Items - -
Profit /Loss before Tax (1184.05) (146.10)
Current Tax - -
Deferred Tax (296.46) (36.86)
P/L from the period from continuing Operations - -
P/L from the period from discontinuing Operations - -
P/L for the period (887.60) (109.25)

DIVIDEND:

Due to loss incurred during the year under review your directors do not recommend anydividend for the financial year ended on 31st March 2014.

BUSINESS PERFORMANCE & PROSPECTS:

During the year under report the company has a turnover of Rs.3622.89 Lac as comparedto Rs. 7588.19 Lac during the previous year and the operation for the year under reviewhas resulted into net loss of Rs. 887.60 Lac in compared to previous year's loss of Rs.109.25 Lac.

Your company will achieve sustained growth in business by continuing pursuit of ourstrategy to work with innovation ideas developing new areas of its activities andreducing cost of products through process innovation. Directors are hoping betterperformance during the current year.

QUALITY HEALTH SAFETY & ENVIRONMENT (QHSE) AND CORPORATE SOCIAL RESPONSIBILITY:

'Quality Health Safety and Environment (QHSE) are our core values. Simply stated ourgoals are: give best to all no accidents no harm to people and no damage to environment.Health Safety and Security of everyone who works at Kalptaru are critical to ourbusiness.'

Kalptaru's commitment towards excellence in Health Safety and Environment is one ofthe company's core values by complying with the Laws and Regulations first and then goingbeyond the mandate to keep our planet safe for future generations. Minimizing theenvironment impact of our operations assumes utmost priority.

The company is unwavering in its policy of 'safety of persons overrides all productiontargets' which drives all employees to continuously break new grounds in safety managementfor the benefit of the people property environment and the communities in which Kalptaruoperates. Our comprehensive QHSE Policy as well as dedicated measures by conducting theRisk Assessment Identification of significant environment aspects of all manufacturingplants and signatory commitment of Responsible Care Greatest emphasis is given to safetymeasures for minimizing accidents and incidents.

The Company continued extending helping hand towards Social and Economic Development ofthe villages and the community located closed to its operations and also providingassistance to improving the quality of life.

The Company understands its social obligations. It pays back to the society in whateverway is possible be it flood relief or giving school bags and books to children installingslides and rides donating computers in schools in villages around the factory.

The Company is regularly organizing sports and cultural activities for its staffmembers and their families. The national events like Independence Day and Republic Day arecelebrated with full enthusiasm.

FINANCE:

The Company is at present enjoying financial assistance in the form of working capitalfacilities and term loan from Indian Overseas Bank Stadium Road Branch Ahmedabad andfrom Axis Bank Limited Ahmedabad.

PUBLIC DEPOSITS:

The Company has complied with the provisions of Section 58A of the Companies Act 1956read with Companies (Acceptance of Deposits) Rules 1975.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS / OUTGO:

The information relating to conservation of Energy Technology Absorption and ForeignExchange Earning / Outgo as required under section 217 (1) (e) of the Companies Act 1956read with the Companies (Disclosure of Particulars in the Report of the Board ofDirectors) Rules 1988 is given by way of annexure attached hereto which forms part ofthis report.

PARTICULARS OF EMPLOYEES:

The information required under the provision of Section 217(2A) of the Companies Act1956 read with the Companies (Particulars of Employees) Amendment Rules 2011 be treatedas Nil as none of the employees of the Company was in receipt of total remunerationexceeding of Rs.6000000 p.a. or Rs.500000 p.m. for part of the year during thefinancial year under review. No employee is related to any Director of the Company.

BOARD OF DIRECTORS:

In accordance with provisions of Section 152 of the Companies Act 2013 Shri JaiKishan Gupta retires by rotation at the forthcoming Annual General Meeting and beingeligible offers themselves for re-appointment.

The Companies Act 2013 provides for appointment of Independent Directors. Section149(10) provides that independent director shall hold office for a term of upto fiveconsecutive years on the Board of a company and shall be eligible for reappointment onpassing special resolution by the shareholder of the Company. Section 149(11) states thatno independent directors shall be eligible for more than two consecutive term of fiveyears. sub section (13) state that the provisions of retirement by rotation as defined insub section (6) and (7) of section 152 of the Act shall not apply to such independentdirector.

Independent Directors Shri Shivratan Sharma Shri Ramesh Chand and Shri Paresh Pandyaas per New Companies Act 2013 is proposed to be appointed till March 31 2019 as perNotice of AGM dated 13th August 2014.

RECONSTITUTION OF AUDIT COMMITTEE:

The Board of Directors of the company at its meeting held on 27th July 2013 hasre-constituted an Audit Committee comprising three Independent Non-Executive Directorsviz. Shri Ramesh Chand Ex-Chairman Shri Paresh Pandya and Shri Shivaratan Sharma. ShriParesh Pandya (having financial and accounting knowledge) was appointed as Chairman of theAudit Committee as Shri Ramesh Chand has expressed his willingness to continue as Memberof the Committee.

The Board of Directors of the company at its meeting held on 28th May 2014 has againre-constituted an Audit Committee comprising three Independent Non-Executive Directorsviz. Shri Shivaratan Sharma - Chairman Shri Paresh Pandya and Shri Ramesh Chand.

The constitution of Audit Committee meets with the requirements under Section 177(2) ofthe Companies Act 2013 and Clause 49 of the Listing agreement of the Stock Exchanges aswell.

The Committee periodically discussed the Financial Reporting process reviewed theFinancial Statements and discussed the quality of the applied accounting principles andsignificant judgment that affected the Company's Financial Statements. Before presentingthe audited accounts to the members of the Board the Audit Committee recommended theappointment of the statutory auditors subject to the Board's approval. The auditCommittee reviewed with adequacy of internal control systems with the managementstatutory and internal auditors.

RECONSTITUTION AND CHANGE OF NAME OF STAKEHOLDERS' RELATIONSHIP COMMITTEE:

The Board of Directors of the company at its meeting held on 27th July 2013 hasre-constituted a Stakeholders' Relationship Committee comprising three Directors viz. ShriParesh Pandya Shri Naveen Gupta and Shri Jai Kishan Gupta. Shri Paresh Pandya wasappointed as Chairman as well as Member of the Stakeholders' Relationship Committee.

The Board of Directors of the company at its meeting held on 28th May 2014 has againre-constituted a Stakeholders' Relationship Committee comprising three Directors viz. ShriShivaratan Sharma - Chairman Shri Naveen Gupta and Shri Jai Kishan Gupta. Shri ShivaratanSharma Independent Non Executive Direcor was appointed as Chairman as well as Member ofthe Stakeholders' Relationship Committee as Shri Paresh Pandya has shown his unwillingnessto act as a Chairman and Member of the Stakeholders' Relationship Committee. On 28th May2014 the name of the Stakeholders & Investors' Grievance Committee has been changed toStakeholders' Relationship Committee to meet with the requirement of new Companies Act2013.

The constitution of Stakeholders' Relationship Committee meets with the requirementsunder Section 178(5) of the Companies Act 2013 and Clause 49 of the Listing agreement ofthe Stock Exchanges as well.

The Committee inter alia approves issue of duplicate certificates and oversees andreviews all matters connected with the securities transfers. The Committee also looks intoredressal of shareholders' complaints like transfer of shares non-receipts of balancesheet non-receipt of declared dividends etc. The Committee overseas the performance ofthe Registrar and Transfer Agents and recommends measures for overall improvement in thequality of investor services.

CONSTITUTION OF NOMINATION AND REMUNERATION COMMITTEE:

The Board of Directors of the company at its meeting held on 28th May 2014 hasconstituted a Nomination & Remuneration Committee comprising three Independent NonExecutive Directors viz. Shri Shivaratan Sharma - Chairman Shri Paresh Pandya and ShriRamesh Chand.

The constitution of Nomination & Remuneration Committee meets with the requirementsunder Section 178(1) of the Companies Act 2013 and Clause 49 of the Listing agreement ofthe Stock Exchanges as well.

The Nomination and Remuneration Committee identifies persons who are qualified tobecome directors and who may be appointed in senior management in accordance with thecriteria laid down recommend to the Board their appointment and removal and shall carryout evaluation of every director's performance. The Nomination and Remuneration Committeealso formulate the criteria for determining qualifications positive attributes andindependence of a director and recommend to the Board a policy relating to theremuneration for the directors key managerial personnel and other employees.

ACCOUNTING STANDARDS AND FINANCIAL REPORTING:

The Company incorporates the accounting standards as and when issued by the Instituteof Chartered Accountants of India. The Company complied with the Stock Exchange and legalrequirement concerning the Financial Statements at the time of preparing them for theAnnual Report.

CORPORATE GOVERNANCE:

Your Company follows the principles of effective Corporate Governance. The Company hascomplied with the mandatory provisions of Corporate Governance as prescribed in therevised Clause 49 of the Listing Agreement executed with the Stock Exchange(s).

A separate section on Corporate Governance is included in the Annual Report andCertificate from Company's Auditors confirming the compliance with the code of CorporateGovernance as enumerated in Clause-49 of the listing agreement with the Stock Exchange isannexed hereto.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:

Management's Discussion and Analysis Report for the year under review as stipulatedunder Clause 49 of the Listing Agreement executed with the Stock Exchanges is presentedin a separate section forming part of the Annual Report.

DEMATERIALISATION OF EQUITY SHARES:

As per direction of the SEBI and the Bombay Stock Exchange Limited the shares of theCompany are under compulsory demat form. The Company has established connectivity withboth the Depositories i.e. National Securities Depository Limited [NSDL] and CentralDepository Services India Limited [CDSL] and the demat activation number allotted to theCompany is ISIN: INE783C01019. Presently shares are held in electronic and physical mode(96.71% of shares in demat and 3.29 % in physical mode.)

LISTING:

The Equity Shares of the Company are listed in the Stock Exchange Mumbai (BSE) whichhas the connectivity in most of the cities across the country.

AUDITORS:

M/s. V. D. Aggarwal & Co. Chartered Accountants Delhi (ICAI Registration No.008332N) retires at the ensuing Annual General Meeting and have expressed theirwillingness to continue if so appointed. As required under the provisions of Section 139(1) of the Companies Act 2013 the Company has obtained a written confirmation from theStatutory Auditor's proposed to be reappointed to the effect that their re-appointment ifmade at the ensuing AGM would be in terms of Section 139 and 141 of the Companies Act2013 and Rules made thereunder.

A proposal seeking their re-appointment is provided as a part of the Notice of theensuing Annual General Meeting.

AUDITORS REPORT:

The comments in the Auditors Report with Notes to Accounts referred to the Auditor'sReport are self explanatory and therefore do not call for any further explanation.

INTERNAL AUDITOR:

The Company has appointed M/S. A J Jain & Co. Chartered Accountants Ahmedabad asan Internal Auditor of the Company as required under Section 138 of the Companies Act2013.

APPOINTMENT OF COST AUDITOR:

The Cost Audit Report of the Company for the Financial Year 2012 – 2013 had beenfiled by the Cost Auditor on 11/10/2013. The Due Date of filling of Cost Audit Report bythe Cost Auditor for the Financial Year ending on 31st March 2014 (i.e. Financial Year2013 –2014) is within 180 days from the end of Financial Year i.e. before 30thSeptember 2014. Shri Kiran J Mehta & Co. Cost Auditor of the Company is in processto prepare Cost Audit Report for the Financial Year ending on 31st March 2014.

INDUSTRIAL RELATIONS:

Industrial relations continued to be cordial during the year under review. TheDirectors express their appreciation towards the workers staffs and executive staffs fortheir support and hope for a continued harmonious relations.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 217(2AA) of the Companies Act 1956 withrespect to Director's Responsibilities Statement it is hereby confirmed:

(i) that in the preparation of the Annual Accounts for the Financial Year ended 31stMarch 2014 the applicable accounting standards had been followed along with properexplanation relating to material departures;

(ii) that the Director had selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the Financial Year andof the Profit or Loss of the Company for the Company for the year under review;

(iii) that the Directors had taken proper and sufficient care for the maintenance ofAdequate accounting records in according with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

(iv) that the Directors had prepared the accounts for the Financial Year ended 31stMarch 2014 on a going concern basis.

(v) that the company has adequate internal systems and controls in place to ensurecompliance of laws applicable to the company.

VISION:

"LEADERSHIP" that allows you to stretch yourself; beyond the impossiblesaying SKY IS THE LIMIT.

OUR MISSION:

Offering "COST EFFECTIVE PRODUCTS" of BEST QUALITY.

INSURANCE:

The company has made the necessary arrangement for adequately insuring its insurableinterests.

ACKNOWLEDGEMENT:

Your Directors would like to express their grateful appreciation for the assistance andco operation received from the Government Banks Customers Suppliers and Businessassociates during the year under review. The Directors also express their gratitude to theshareholders for the confidence reposed towards the Company. Your Directors wish to placeon record their deep sense of appreciation to all the employees for their commendable teamwork and enthusiastic contribution during the year.

Regd. Office:
701 Avdhesh House By Order of the Board
Opp. Gurudwara For Kalptaru Papers Limited
Near Thaltej Chokdi
Ahmedabad - 380054. Gujarat Jaikishan B. Gupta
Date: 28th May 2014 Chairman

ANNEXURE FORMING PART OF DIRECTOR’ REPORT

Disclosure of particulars with respect to conservation of energy as required underSection 217 (1) (e) read with the Companies (Disclosure of Particulars in the Report ofBoard of Directors) Rules 1988 and forming part of Report of Board of Directors for theyear ended on 31st March 2014.

I ENERGY CONSERVATION MEASURES:

Energy Conservation is the most essential part in today's working. It is the duty ofevery individual at all levels to save energy as far as possible. Saving energy is not onetime job but constant efforts are required for the same. The management has formedCommittee to look into the matter and suggest latest measures to save steam and power.

Variable Drives have been installed to save energy. Energy efficient Motors / Pumpshave been installed to achieve energy savings.

II TECHNOLOGY ABSORPTION ADOPTION AND INNOVATION:

Use of the latest technology is the dire need of the industry if it wants to surviveand keep pace with others in the changed environment.

III FOREIGN EXCHANGE EARNINGS AND OUTGO:

2013-14 2012-13
Foreign exchanges earned 43971.21 NIL
Foreign exchange outgo: (Including Imports & Traveling) US$216494.08 US$ 517268

FORM A

(DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY)

Particulars 2013-2014 2012-2013
(A) Power and Fuel Consumption:
1. Electricity
Purchased Power (units) 4856009 10821628
Total Amount 37124349 74411114
Rate (unit) 7.64 6.88
Non performance from October 2013 to march 2014 41330237
2. Boiler Fuel
Quantity (kg) 6148250 16729745
Total Amount 22994455 43367470.00
Average Rate (kg) 3.74 2.59
3. (a) LNG Gas
In SCM NIL NIL
In Rs. NIL NIL
Average Rate NIL NIL
Total Units NIL NIL
Rate per Unit NIL NIL
(b) L.E.O.
In Liters NIL NIL
In Rs. NIL NIL
Average Rate NIL NIL
Total Units NIL NIL
Rate per Unit NIL NIL
(c) Furnace Oil
In Liters NIL NIL
In Rs. NIL NIL
Average Rate NIL NIL
Total Units NIL NIL
Rate per Unit NIL NIL
(B) Consumption per unit of production:
Electricity (Unit) 0.672 0.500
Coal (kg) 0.850 0.773