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Sangal Papers Ltd.

BSE: 516096 Sector: Industrials
NSE: N.A. ISIN Code: INE384D01022
BSE LIVE 12:14 | 15 Dec 105.00 5.00






NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 105.00
52-Week high 123.05
52-Week low 65.25
P/E 8.94
Mkt Cap.(Rs cr) 14
Buy Price 105.00
Buy Qty 15020.00
Sell Price 0.00
Sell Qty 0.00
OPEN 105.00
CLOSE 100.00
52-Week high 123.05
52-Week low 65.25
P/E 8.94
Mkt Cap.(Rs cr) 14
Buy Price 105.00
Buy Qty 15020.00
Sell Price 0.00
Sell Qty 0.00

Sangal Papers Ltd. (SANGALPAPERS) - Director Report

Company director report



The Members

Your Directors have pleasure in presenting their 35th Annual Report with the AuditedAccounts of the Company for the year ended 31st March 2015.


PARTICULARS 31.03.2015 31.03.2014
(Amount in Rs.) (Amount in Rs.)
Turnover 950642374 1016428644
Profit Before 55191902 66677633
Financial Charges and Depreciation
Financial Charges 24488152 28774180
Depreciation/ Amortization 6729807 16749664
PROFIT BEFORE TAX 23973943 21153789
Current Tax 4796650 8082860
MAT Credit Entitlement (104750)
Deferred Tax Liability 4856000 (2684000)
Income Tax (Related to Earlier Year) 249908 57812
PROFIT AFTER TAX 14176135 15697117
Balance brought Forward from last Year 160219853 144522736
Balance Carried Forward to Balance Sheet 174395988 160219853


The Company is moving fast to achieving its goal of maximization of shareholders wealthand objective of the Company. The Company does care to all stakeholder of the Company.

Sangal Papers Ltd. focus in India and outside India over last few years has been tomove closer to the ultimate consumers and position its products in a way that consumerscan connect with and aspire for with this is in mind. The Company has maintained theworld- wide standard in its products and engaged in to give sharpness to the Company'smarketing strategies.

Sangal Papers Ltd. has given its best performance in all subjects. During the yearunder review the Company has achieved a turnover of Rs. 950642374 as againstprevious figure of Rs. 1016428644 posting approx 6.47% decline in sale.

During the year under review PAT ( profit after tax) were Rs. 14176135 ascompared to previous year figure of Rs. 15697117. However the Profit aftertaxhas reduced by 9.69% in net profit aftertax as compared to previous year.


The paid up equity capital as on 31st March 2015 was Rs. 13072600. During the yearunder review the Company has not increased their capital. Further the Company has notissued shares with differential voting rights nor granted stock options nor sweat equity.


Board of Directors of the Company has opted to plough back the profits for futuregrowth and do not recommend any Dividend for the financial year ending on 31/03/2015.


The balance of Reserve & Surplus Account of the Company as on 31/03/2015 was Rs.179251603/-.


The Company has not accepted any fixed deposits and accordingly no amount wasoutstanding as on the date of the Balance Sheet.


The Company has not given any loans or guarantee covered under the provisions ofsection 186 of the Companies Act 2013.


The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Audit function isdefined in the Internal Audit Manual. To maintain its objectivity and independence theInternal Audit function reports to Chairman of the Audit Committee of the Board & tothe Chairman & Managing Director.

The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit function process owners undertake corrective action in their respective areas andthereby strengthen the controls. Significant audit observations and recommendations alongwith corrective actions thereon are presented to the Audit Committee of the Board.


Since the Company has not fulfill the criteria in respect of constitution of CorporateSocial Responsibility as specified in the Section 135 of the Companies Act 2013 read withCompanies (Corporate Social Responsibility) Rules 2014 therefore no CSR Committee isconstituted.


(a) Company ensures that the manufacturing operations are conducted in the mannerwhereby optimum utilization and maximum possible savings of energy is achieved.

(b) No specific investment has been made in reduction in energy consumption.

(c) As the impact of measures taken for conservation and optimum utilization of energyare not quantitative its impact on cost cannot be stated accurately.

(d) Since the Company does not fall under the list of Industries which should furnishinformation on conservation of energy the question of furnishing the same does not arise.


Company's products are manufactured by using In- house know how and no outsidetechnology is being used for manufacturing activities. Therefore no technology absorptionis required. The Company constantly strives for maintenance and improvement in quality ofits products and entire Research & Development activities are directed toachieve the aforesaid goal.



Import of raw materials during the year amounted to Rs. 43323426/- ( previous YearRs. 29810263/-) and Capital Goods & Spares of Rs. 2012079 /- (Previous Year Rs.1517414 /-).


Exports were mainly to Gulf and Asian Countries . Exports during the year increased toRs. 38910936 /- from Rs. 28186945/-in the previous year.


Details are provided under the Point 23-26 of "Notes to Financial Statements"for the financial year ended as on 31st March 2015.


During the year under review your Company enjoyed cordial relationship with workersand employees at all levels.


Director Mr. Vinayak Sangal (DIN NO. 06833351) retire by rotation and being eligibleoffer himself for re-appointment. The Board of Directors recommend Mr. Vinayak Sangal forre- appointment.

Mr. Prem Sethi (DIN NO. 07146425) & Mrs. Geeta Gupta (DIN NO. 00095939) wereappointed as additional independent director w.e.f 4th March 2015. The Board nowrecommends the appointment of Mr. Prem Sethi & Mrs. Geeta Gupta as independentdirectors under section 149 of the Companies Act 2013 and clause 49 of the listingagreement in the ensuing Annual General Meeting to hold office for three consecutive yearsi.e. upto the conclusion of the Annual General Meeting of the Company held in the calendaryear 2018.

All independent directors have given declarations that they meet criteria ofindependence as laid down under section 149 (6) of the Companies Act 2013 and clause 49of the Listing Agreement.


Pursuant to the provisions of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board has carried out an evaluation of its own performance the directorsindividually as well as the evaluation of the Working of its Audit Appointment &Remuneration Committees. The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance Report.


The Board has on the recommendation of the Appointment & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The remuneration Policy is stated in Corporate Governance Report.


Meetings During the year 12 (Twelve) Board Meetings and 4 (Four) Audit CommitteeMeetings were convened and held. The details of which given in the Corporate GovernanceReport. The intervening gap between the Meetings was within the period prescribed underthe Companies Act 2013.


Pursuant to Section 134(5) of the Companies Act 2013 your Directors confirm that:

(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed with no material departures;

(b) They have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fairreview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for the same period;

(c) They 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) They have prepared the annual accounts on a going concern basis;

(e) They have laid down internal financial controls in the Company that are adequateand are operating effectively; and

(f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that these are adequate


The related party transactions have already been disclosed in the financial statements.No transaction of material nature has been entered into by the Company during the yearwhich may have potential conflict with the interest of the Company. All related partytransactions that were entered into during the financial year were on arm's length basisand were in the ordinary course of the business. There are no materially significantrelated party transactions made by the company with promoters key managerial personnel orother designated persons which may have potential conflict with interest of the Company atlarge.


The Company does not have any subsidiary.


The Board of Directors has approved a Code of Conduct which is applicable to themembers of the Board and all employees in the course of day to day business operations ofthe company. The Company believes in " Zero Tolerance" against briberycorruption and unethical dealings/behaviours of any form and the Board has laid down thedirectives to counter such acts. The code laid down by the Board is known as " Codeof Business Conduct" which forms and Appendix to the Code.

The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders. The Code gives guidance through examples on the expectedbehavior from an employee in a given situation and the reporting structure.

All the Board members and the Senior Management personnel have confirmed complianceswith the code. All management Staff were given appropriate training in this regard.


Pursuant to Section 177(9) of the Companies Act 2013 and Clause 49 of the ListingAgreement the Company has formulated a Whistle Blower Policy to establish a vigilmechanism for directors and employees of the Company. The purpose and objective of thisPolicy is to provide a framework to promote responsible and secure whistle blowing. Itprotects the employees wishing to raise a concern about serious irregularities within theCompany. The details of the Whistle Blower Policy are explained in the CorporateGovernance Report and also posted on the website of the Company.


M/s Shaim & Co. (Chartered Accountants) Muzaffarnagar (Registration No. 000030C)have been appointed as Statutory Auditors of the Company for a period 3 years at the lastannual general meeting held on 30th September 2014 subject to ratification of theirappointment by the members at every general meeting. The shareholders at the ensuingannual general meeting will consider ratification of the appointment of the StatutoryAuditors. As required under Clause 41 of the Listing Agreement the Auditors haveconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.


The Turnover of the Company during the financial year 2014-15 are not covered undercost audit and therefore pursuant to Section 148 of the Companies Act 2013 read with theCompanies ( Cost Records and Audit) Amendment Rules 2014 the Company is not required toappoint cost auditor for financial year 2015-16.


Pursuant to provision of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Mangerial Personnel) Rules 2014 the Company hasappointed D. K Gupta & Co. Practicing Company Secretary to undertake the SecretarialAudit of the Company. The Secretarial Audit Report is annexed herewith as " AnnexureA".


The auditors have given clean report. There is no observation/adverse remark in theAuditors' Report.

As required under section 204 (1) of the Companies Act 2013 the Company has obtaineda Secretarial Audit Report.


The details forming part of the extract of the Annual Return in form MGT -9 is annexedherewith as" Annexure C".


Pursuant to the requirement of Clause 49 of the Listing Agreement the Company hasconstituted a Risk Management Committee. The details of the Committee and its terms ofreference are set out in the Corporate Governance Report forming part of the Board'sReport.

On the recommendation of the Risk Management Committee the Board has adopted Riskmanagement Policy which outlines the programme implemented by the Company to ensureappropriate risk management within its system and culture. The Risk Management Policy isalso posted on the website of the Company. The Company's risk management programmecomprises of a series of processes structures and guidelines which assist the Company toidentify assess monitor and manage its business risks including material changes to itsrisk profile. To achieve this the Company has clearly defined the responsibility andauthority of the Company's Board of Directors and of the Risk Management Committee tooversee and manage the risk management programme while conferring responsibility andauthority on the Company's senior management to develop and maintain the risk managementprogramme in light of the day to day needs of the Company. Regular communication andreview of risk management practices provide the Company with important checks and balancesto ensure the efficacy of its risk management programme.


On 1st August 2014 at 6.00 A.M an Accident took place in our Factory Site Village -Bhainsa 22 Km Stone Meerut-Mawana Road Meerut due to burst in Digestor. Accident causedsubstantial damage to the Building Plant & Machinery as well as Stock and claimed twolifes. As per our estimated the total damage caused to the factory may be as much as Rs.142 Lakhs. It was an unexpected mishap but fortunately it is fully covered by insurancefor the Building Plant & Machinery Stock damage and human loss. We have accordinglyinformed the Insurance company and submitted a formal claim. The Managing Director of theCompany has announced all assistance to the families of the victims immediately.


The provisions of Rule 5 (2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 requiring particulars of the employees in receipt ofremuneration in excess of Rs. 60 Lacs per year to be disclosed in the Report of Board ofDirectors are not applicable to the Company as none of the employees was in receipt ofremuneration in excess of Rs. 60 lacs during the financial year 2014-15.

The information required under section 197 (12) of the Companies Act 2013 read withRules 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 is given in the Statement annexed herewith as "Annexure-D''.


The Corporate Governance and Management Discussion & Analysis Report which form anintegral part of this Report are set out as separate Annexures together with theCertificate the auditors of the Company regarding Compliance with the requirements ofCorporate Governance as stipulated in Clause 49 of the Listing Agreement.


Your Company and its Directors wish to extend their sincerest thanks to the Members ofthe Company Bankers State Government Local Bodies Customers Suppliers ExecutivesStaff and workers at all levels for their continuous co-operation and assistance.

Place: Mawana By Order of the Board of Directors
Date: 25/05/2015 FOR Sangal Papers Ltd.
CIN :L21015UP1980PLC005138
Himanshu Sangal
Reg. Office: 22 KM Meerut - Mawana Road Mawana - 250 401 Distt. Meerut (U.P.) Chairman & Managing Director (DIN-00091324)
E- Mail:


[ Pursuant to section 204 (1) of the Companies Act 2013 and Rule No. 9 of theCompanies (Appointment and Remuneration Personnel Rules 2014)]


The Members

Sangal Papers Ltd.

CIN: L21015UP1980PLC005138

I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by the Sangal Papers Ltd.(hereinafter called the Company). Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing our opinion thereon.

Based on our verification of the Company's books papers minute books forms andreturns filed and other records maintained by the Company and also the informationprovided by Sangal papers Ltd. ('the Company') its officers agents and authorizedrepresentatives during the conduct of Secretarial Audit we hereby report that in ouropinion the Company has during the audit period covering the financial year ended on 31stMarch 2015 complied with the statutory provision listed hereunder and also that theCompany has proper Board processes and compliance- mechanism in place to the extent inthe manner and subject to the reporting made hereinafter:

I have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company for the financial year ended on 31st March 2015according to the provision of:

I. The Companies Act 2013 and the rules made thereunder;

II. The Securities Contracts (Regulation) Act 1956 ('SCRA') and the rules madethereunder;

III. The Depositories Act 1956 and the Regulations and Bye-laws framed thereunder;

IV. Foreign Exchange Management Act 1999 and the rules and regulations made thereunderto the extent of Foreign Direct Investment Overseas Direct Investment and ExternalCommercial Borrowings;

V. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (’SEBI ACT')

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

(b) The Securities and Exchange Board of lndia(Prohibition of Insider Trading)Regulations 2011;

(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;

(d) The Securities and Exchange Board of India ( Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008;

(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009; and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;

VI As informed by management other laws applicable to the Company are:-

1. Air (Prevention and Control of Pollution) Act 1981 read with The Air (Preventionand Control of Pollution) Rules 1982

2. Central Excise Act 1944

3. Cenvat Credit Rules 2004

4. Employee's Compensation Act 1923

5. Employees' Pension Scheme 1995

6. Employees' Provident Fund Scheme 1952

7. Employees Provident Funds And Miscellaneous Provisions Act 1952

8. Finance Act 1994

9. Hazardous Wastes (Management Handling and Transboundary Movement) Rules 2008

10. Income Tax Act 1961 and the rules made thereunder

11. Industrial Disputes Act 1947

12. The Contract Labour (Regulation & Abolition) Act 1970

13. The Payment of Bonus Act 1965

14. The Payment of Gratuity Act 1972

15. The Payment of Wages Act 1936

16. Water (Prevention and Control of Pollution) Act 1974 read with Water (Prevention& Control of Pollution) Rules 1975

17. Child Labour (Prohibition And Regulation) Act 1986

18. Employee's Compensation Act 1923

19. Employees Deposit-Linked Insurance Scheme 1976

20. Explosives Act 1884

21. Foreign Exchange Management Act 1999

22. Foreign Trade Policy 2009 To 2014

23. Income-Tax Act 19611 Income-Tax Rules 1962

24. Industrial Employment (Standing Orders) Act 1946

25. Water (Prevention And Control Of Pollution) Cess Act 1977

26. Legal Metrology Act 2009.

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by the The Institute of Company Secretaries of Indiawere not applicable to the Company during financial year 2014-15.

(ii) The Listing Agreements entered into by the Company with BSE Stock Exchange.

During the period under review the Company has complied with the provisions of the ActRules Regulations Guidelines Standards etc.

I Further Report that:

The Board of Directors of the Company is constituted with total no. of 6 (Six only)directors on the Board of directors with 3 (Three only) whole time directors 2 (Two only)additional directors who are proposed to be appointed as independent directors and 1 (oneonly) non executive director. The changes in the composition of the Board of Directorsthat took place during the period under review were carried out in compliance with theprovisions of the Act.

As informed adequate notices were given to all Directors to schedule the BoardMeetings Agenda and detailed notes on Agenda were sent at least seven days in advance anda system exists for seeking and obtaining further information and clarifications on theAgenda items before the meeting and for meaningful participation at the meeting.

Majority Decision were carried through while the dissenting members' views are capturedand recorded as part of the minutes.

I Further Report that there are adequate systems and process in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

D.K Gupta &Co.
(Company Secretaries)
Place: Meerut FCS No. 5226
Date: 25/05/2015 C.P No. 3599



The Members

Sangal Papers Ltd.

CIN: L21015UP1980PLC005138

My report of even date is to be read along with this letter.

1. Maintenance of Secretarial record is the responsibility of the management of theCompany. My responsibility is to express as opinion on these secretarial records based onmy audit.

2. I have followed the audit practices and process as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct fact are reflected insecretarial records. I believe that the processes and practices I followed provide areasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Where ever required I have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws RulesRegulations Standards is the responsibility of management. My examination was limited tothe verification of procedure on test basis.

6. The Secretarial Audit Report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.

D.K Gupta &Co.
(Company Secretaries)
Place: MEERUT FCS No. 5226
Date: 25/05/2015 C. P No. 3599


Pursuant to Section 92 (3) of the Companies Act 2013 and rule 12(1) of the Company(Management & Administration ) Rules 2014.


(i) The ratio of the remuneration of each director of the median employee'sremuneration for the financial year and such other details as prescribed is as givenbelow:

Name Ratio
Himanshu Sangal (Managing Director) 16:1
Amit Sangal (Director Finance cum CFO) 16:1
Tanmay Sangal (Whole Time Director) 5:1
Vinayak Sangal (Director) - without remuneration NIL

For this purpose sitting fees paid of the directors has not been considered asremuneration.

(ii) The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:

Name Designation

% increase

Himanshu Sangal (Managing Director) 25%
Amit Sangal (Director Finance cum CFO) 25%
Tanmay Sangal (Whole Time Director) NIL

* There was no increase in remuneration of Shri Tanmay Sangal (Whole Time Director)during the financial year 2014-15.

(iii) The percentage increase in the median remuneration of employee in the financialyear :7.66%

(iv) The number of permanent employees on the rolls of company: 135.

(v) The explanation on the relationship between average increase in remuneration andCompany performance.

The Company's PAT has decline from Rs. 156.97 lacs to Rs.141.76 lacs an decrease of9.69% against which the average increase in remuneration is 16.67%.

(vi) Comparison of the remuneration of the Key Managerial Personnel (KMP) against theperformance of the Company:

% increase (avg.) in remuneration of KMP Company Performance
16.67% Company's PAT decrease by 9.69%

(vii) Variations in the market capitalization of the Company price earnings ratio asat the closing date of the current financial year and previous financial year andpercentage increase or decrease in the market quotations of the shares of the Company incomparison to the rate at which the Company came out with the last public offer

Closing date of the Financial Year Issued Capital (Shares) Closing Market Price Per Share EPS PE Ratio Market Capitalization (Rs. in Lacs)
31.03.2014 1307260 27.25 12.01 2.27 356.32
31.03.2015 1307260 46.00 10.84 4.24 601.06
Increase/Decrease - 18.75 1.17 1.97 244.74
% of Increase/Decrease - 68.80% 9.74% - 68.68%

Market quotations of the shares of the Company in comparison to the rate at which theCompany came out with the last public offer.

The equity shares of the Company were initially listed on BSE Ltd. in the year 1994.The last public offer of the equity shares was made in the year 1994 by way of Publicissue to the general public in the ratio of 3:1 at a price of Rs. 10 /- per equity share.As on 31st March 2015 the market quotation of the Company's share price(closing price) was Rs. 46.00.

(viii) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and any exceptionalcircumstances to increase in the managerial remuneration:

There is only one Managing Director and one Whole Time Director. There was no increasein remuneration paid to Managing Director during the Financial Year 2014-15. Averageincrease in remuneration for employees other than Managerial Personnel is 7.66%.

(ix) Comparison of the each remuneration of the KMP against the performance of thecompany:

Name Remuneration of KMP (Rs Lacs) Performance of the Company -PAT as on 31st March 2015
Himanshu Sangal Managing Director 900000 /- 141.76
Amit Sangal Director Finance cum CFO 900000 /- 141.76
Rohit Tyagi Company Secretary 193749/- 141.76

(x) The key parameters for any variable component of remuneration availed by thedirectors:

There is no variable component in the remuneration of Shri Himanshu Sangal ManagingDirector.

(xi) The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year: Not Applicable

(xii) If remuneration is as per the remuneration policy of the Company: Yes

Place: Mawana By Order of the Board of Directors
Date: 25/05/2015 FOR Sangal Papers Ltd.
CIN :L21015UP1980PLC005138
Himanshu Sangal
Reg. Office : 22 KM Meerut - Mawana Road Mawana - 250 401 Distt. Meerut (U.P.) Chairman & Managing Director (DIN-00091324)
PH- 01233- 271515 274324
E- Mail: