The Members of
Balkrishna Paper Mills Ltd
Your Directors have pleasure in presenting the Sixth Annual Report of the Company alongwith Audited Financial Statements for the Financial year ended 31st March 2019.
1. FINANCIAL RESULTS:
The summary of the financial performance of the Company for the financial year endedMarch 31 2019 compared to the previous year ended March 31 2018 is given below:
| || ||(र in Lakhs |
|Particulars ||2018-19 ||2017-18 |
|Net Turnover and Other Income ||21445.35 ||21343.57 |
|Profit/(Loss) before Depreciation and Tax ||(3703.02) ||(3106.71) |
|Less: Depreciation and Amortisation ||660.89 ||682.90 |
|Profit/(loss) before Tax ||(4363.91) ||(3789.61) |
|Less: Provision for Taxation: || || |
|Current Tax (MAT) ||0.00 ||0.00 |
|Deferred Tax (Net) ||(140.01) ||229.17 |
|Profit after Tax ||(4223.90) ||(4018.78) |
|Add/(Less): Other Comprehensive Income (net of taxes) ||10.00 ||(5.70) |
|Total Comprehensive Income/ (Expenses) for the year ||(4213.90) ||(4024.48) |
Pursuant to the notification dated 16th February 2015 issued by the Ministry ofCorporate Affairs the Company has adopted the Indian Accounting Standards ("IndAS") notified under the Companies (Indian Accounting Standards) Rules 2015 witheffect from 1st April 2017. Financial Statements for the year ended and as at 31st March2019 have been restated to confirm with Ind AS.
During the year under review the Gross turnover and other Income of your Companyincreased to र 21445.35 Lakhs from र 21343.57 Lakhs in the previous year. The netLoss after tax stood at र4213.90 Lakhs against Loss of र 4024.48 Lakhs in theprevious year.
Your Directors have not recommended any dividend for the financial year under review.
4. SHARE CAPITAL:
The paid up Share Capital of the Company as on 31st March 2019 are as under:
- Equity Share Capital : र1074 Lakhs
- Preference Share Capital: र2500 Lakhs.
The Company has not issued shares with differential voting rights nor granted stockoptions nor sweat equity. As on 31st March 2019 none of the Directors of the Companyhold convertible instruments in the Company.
5. REVISION OF FINANCIAL STATEMENT:
There was no revision of the financial statements for the year under review.
6. MANAGEMENT DISCUSSION AND ANALYSIS:
Global economy is facing a confluence of risks which could severely disrupt economicactivity and inflict significant damage on longer-term development prospects. These risksinclude an escalation of trade disputes an abrupt tightening of global financialconditions and intensifying climate risks.
Despite an improvement in growth prospects at the global level several largedeveloping countries saw a decline in per capita income in 2018. Even among the economiesthat are experiencing strong per capita income growth economic activity is often drivenby core industrial and urban regions leaving peripheral and rural areas behind.
After strong growth in 2017 and early 2018 global economic activity slowed notably inthe second half of last year reflecting a confluence of factors affecting majoreconomies. Global growth is now projected to slow from 3.6 % in 2018 to 3.3% in 2019before returning to 3.6% in 2020.
Indian Paper and Paper products industry growth is expected to be driven by acombination of factors such as rising income levels growing per capita expenditure rapidurbanization and a larger proportion of earning population which is expected to leadconsumption. According to CRISIL Research over the next 5 years (2017 to 2022) globalpaper demand is expected to grow at a subdued pace.
Your Company is engaged in manufacturing and marketing of quality Coated Duplex Boards.Due to the slowdown in economy worldwide underutilisation of capacity and high debtburden we could not increase the realisation rates in line with the expenses. All thesefactors affected the performance of the Company.
Your Company is trying to improve its realisation by manufacturing more high value formoney products and also expanding its market base in domestic as well as overseas market.
Internal Audit and Control
Your Company's maintains all its records in ERP Systems and maximum approvals arerouted through this system. The Company has laid down adequate systems and supported bythe procedures for ensuring internal financial controls. The Company has appointed anexternal audit firm as Internal Auditors for day to day checking and monitoring theinternal control measures. Internal Auditors are present at the Audit Committee Meetingswhere internal Audit Reports are discussed along with management comments and the finalobservation of the Internal Auditor.
Opportunities Threats and Risk
The existing Paperboard players alive to the emerging international threats have beenaggressively pursuing quality improvement programmes coupled with cost rationalisation.Increasingly more modern technologies are sought to be implemented with added focus onenvironmental compliance.
Relation between the Management and the labour were cordial throughout the year underreview. The Management persistently promote a culture of employee recognition andmotivation.
Forward Looking Statement
Statements in the Management Discussion and Analysis describing the Company'sobjectives predictions may be "forward looking statements" within the meaningof applicable laws and regulations. The actual results could differ materially from theforward looking statements contained in this document due to certain risks anduncertainties which include the effect of economic and political conditions in IndiaGovernment policies new regulations that may affect the Company business.
7. CORPORATE GOVERNANCE:
A report on Corporate Governance as stipulated in SEBI (LODR) Regulations 2015together with Certificate from the Auditors of the Company confirming compliance ofconditions of Corporate Governance as stipulated under the aforesaid regulations formspart of the Annual Report.
8. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Your Directors pay their respectful homage to late Shri Dharaprasad Poddarji founderPromoter who left for his heavenly abode on 20th October 2018. Your Directors pray tothe Almighty to grant eternal peace to his departed soul.
Forgo of Remuneration:
Shri Anurag Poddar Chairman and Managing Director and Shri Ankit Poddar ExecutiveDirector have forgone their monthly remuneration due to poor financial position of theCompany with effect from 1st April 2019.
Shri Ankit Poddar Executive Director retires by rotation and being eligible offershimself for re-appointment. Your Directors commend his re-appointment.
Three Independent Directors of the Company namely Shri Harish N. Motiwalla ShriRakesh N. Garodia and Smt. Meghna S. Shah who were appointed by the members at the AGMheld on 24th August 2015 under section 149 of the Act for a term of 5 (five) consecutiveyears are proposed to be reappointed by the shareholders special resolution (s) asIndependent Directors of the Company to hold office for another term of 5 (five) yearsw.e.f. 11th February 2020.
Shri Harish N. Motiwalla who has attained the age of 75 (seventy five) years continuesto be Independent Director of the Company w.e.f. April 1st 2019 till completion of hispresent term (i.e. upto 10th February 2020)
Brief particulars of Directors being appointed/re-appointed as required by the SEBI(LODR) Regulations 2015 and Secretarial Standards on General Meetings are provided in theAnnexure to the notice convening the AGM of the Company.
Declarations by Independent Directors:
All the Independent Directors of the Company have given requisite declarations thatthey meet the criteria of independence as provided in Section 149(6) of the Companies Act2013 and also Regulation 16(1)b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
9. NOMINATION AND REMUNERATION COMMITTEE:
The composition role terms of reference as well as powers of the Nomination andRemuneration Committee of the Company meets the requirements of Section 178 of theCompanies Act 2013 and Regulation 19 of the SEBI (LODR) Regulations 2015.
The Committee comprises of 3 Independent Directors.
The composition of the Nomination and Remuneration Committee* and category of membersis given in the table below:
|Sr. No. ||Name of the Director ||Category |
|1 ||Shri Ramanlal B. Golecha ||Independent Director |
|2 ||Shri Harish N. Motiwalla ||Independent Director |
|3 ||Shri Rakesh N. Garodia ||Independent Director |
* During the year under review no Meeting was held.
The Company has devised the Nomination and Remuneration Policy for the selectionappointment and remuneration of the whole time Directors Key Managerial Personnel andSenior Management Personnel. The extract of Nomination and Remuneration Policy is providedin the Corporate Governance Report and forms part of this Annual Report.
Company's Policy on appointment and remuneration of Directors.
Appointment of Independent Directors.
All Independent Directors of the Company are appointed for a term of 5 years.Accordingly the Independent Directors
viz. Shri Harish N. Motiwalla Shri Rakesh N. Garodia and Smt. Meghna S. Shah holdoffice up to 10th February 2020 and reappointed by the Board for further period of 5years subject to approval by shareholders in its ensuing AGM and Shri Ramanlal B. Golechaup to 19th November 2022.
Criteria for appointment of Independent Directors.
The Independent Directors shall be of high integrity with relevant experience andexpertise in the fields of manufacturing marketing finance taxation law governanceand general management so as to have a diverse Board.
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theNomination and Remuneration Committee has laid down the criteria for evaluation of theperformance of individual Directors the Board as a whole. Evaluation of performance isundertaken annually. The performance evaluation of the Chairman and the Non IndependentDirectors was carried out by the Independent Directors at a separately convened meeting atwhich the performance of the Board as a whole was also evaluated. The performanceevaluation of the Independent Directors was carried out by the entire Board (excluding theDirector being evaluated). The Company has implemented a system of evaluation on the basisof a structured questionnaire which comprises evaluation criteria taking intoconsideration various performance related aspects.
The Directors expressed their satisfaction with the evaluation process.
Remuneration of Non-Executive Directors:
The Nonexecutive Directors shall be entitled to receive remuneration by way of sittingfees reimbursement of expenses for participation in Board/Committee meetings andcommission if any after approval of the members.
10. DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)( c) and 134(5) of the Companies Act 2013 with respect toDirectors' Responsibility Statement your Directors to the best of their knowledge herebyconfirm that :
a. that in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures.
b. that the Directors have 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 as at 31st March 2019and of the Profit of the Company for that year under review;
c. that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d. that the Directors have prepared the accounts for the financial year on goingconcern basis;
e. the Directors have laid down internal financial controls which are adequate andwere operating effectively.
f. the Directors have devised proper system to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
11. DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES:
a. BOARD Meetings:
The Board of Directors met 4 times during the year on the following dates in accordancewith the provisions of the Companies Act 2013 and rules made thereunder. May 16 2018August 7 2018 November 3 2018 February 6 2019.
In addition to the above Independent Directors Meeting was also held on February 62019.
b. COMMITTEES OF THE BOARD:
The Board has the following Committees:
1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholders Relationship Committee;
4. Finance Committee.
5. Share transfer Committee.
The details of these Committees along with their composition number of meetings andattendance at the meetings are provided in the Corporate Governance Report.
12. EXTRACT OF ANNuAL RETuRN
Pursuant to the provisions of Section 134(3)(a)of the Companies Act 2013 Extract ofthe Annual Return in Form No. MGT - 9 for the financial year ended 31st March 2019 madeunder the provisions of Section 92(3) of the Act is attached as Annexure I whichforms part of this Report and is also receivable on the Company's website at www.bpml.in.
13. FIXED DEPOSITS
During the year under review your Company has not accepted any fixed deposits andthere were no unclaimed deposits or interest thereon as on 31st March 2019.
14. PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECuRITIES:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes to Financial Statements.
15. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The Company has framed a Whistle Blower Policy to deal with instances of fraud andmismanagement if any. The details of the Policy are given in the Corporate GovernanceReport and the policy is posted on the Company's website: www.bpml.in.
16. RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were inthe ordinary course of business and were on an arm's length basis. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other related parties which may have a potential conflict with theinterest of the Company at large.
During the year the Company has not entered into Related Party Transactions whichcould be considered as material in accordance with the policy on Related Party Transactionof the Company. Accordingly the disclosure of related party transactions as requiredunder section 134(3)(h) of the Companies Act 2013 in Form AOC-2 is not applicable to yourCompany.
All related party transactions for the year are placed before the Audit Committee aswell as before the Board for approval. Omnibus approval was obtained on a yearly basis fortransactions which are of repetitive nature. The transactions entered into with relatedparties are reviewed on a quarterly basis by the Audit Committee.
The policy on Related Party Transactions as approved by the Audit Committee and Boardis uploaded on the Company's website at the link www.bpml.in.
Members can refer to Note No. 37 to the Financial Statements which set out relatedparty disclosures.
17. RISK MANAGEMENT FRAMEWORK:
The Board of Directors of the Company has Risk Management Framework to avoid eventssituations or circumstances which may lead to negative consequences on the Company'sbusinesses and define a structured approach to manage uncertainty and to make use ofthese in their decision making pertaining to all business divisions and corporatefunctions.
18. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL
During the year under review there were no orders have been passed by any Regulator orCourt or Tribunal which can have impact on the going concern status and the Company'soperations in future.
19. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT 2013:
There were no material changes and commitments which could affect the Company'sfinancial position have occurred between the end of the financial year of the Company anddate of this report.
20. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOuTGO
The particulars as required under the provisions of Section134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc.are furnished in Annexure III which forms part of this Report
The matters related to Auditors and their Reports are as under:
a. OBSERVATIONS OF STATuTORY AuDITORS ON ACCOuNTS FOR THE YEAR ENDED 31stMARCH 2019:
The observations made by the Statutory Auditors in their report for the financial yearended 31st March 2019 read with the explanatory notes therein are selfexplanatory andtherefore do not call for any further explanation or comments from the Board underSection 134(3) of the Companies Act 2013.
Further there were no adverse remarks or qualifications of reservations in the auditreport submitted by auditors.
b. COST AUDITORS:
Pursuant to the provisions of Section 148 of the Companies Act 2013 read withNotifications/Circulars issued by the Ministry of Corporate Affairs from time to time theBoard of Directors have appointed M/s. K. G. Goyal & Associate Cost Accountants as acost auditor of the Company for the Financial Year 2019-20.
The remuneration to be paid to Cost auditors require ratification by the shareholdersand accordingly necessary resolution for ratification for seeking approval of members isincluded in Notice of ensuing AGM.
c. SECRETARIAL AUDITORS.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Shri Jugalkishore Fatehchandka Company Secretary in Practice to undertakeSecretarial Audit for the financial year 2018-19. The Secretarial Audit Report is annexedherewith as Annexure - II.
There is no Secretarial audit qualification for the year under review.
22. INDuSTRIAL Relations:
Industrial relations with staff and workmen during the year under review continued tobe cordial.
23. Sexual Harassment of Women at Workplace (Prevention Prohibition & Redressal)Act 2013:
The Company has formulated and implemented a policy of prevention of sexual harassmentat the workplace with
mechanism of loading/redressal complaints. During the year under review there were nocomplaints reported to the Board.
24. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURESAS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014:
The information required pursuant to Section 197 of the Companies Act 2013 read withrule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company will be provided upon request in terms of section196 of the Act the Report is being sent to all the Shareholders of the Company and otherentitled thereto excluding the information particulars of which is available forinspection by the Members at the Registered office of the Company during business hours onworking days of the Company up to the date of the ensuing Annual General Meeting. Membersinterested in obtaining a copy thereof may write to the Company Secretary in this regard.
All the properties/assets including buildings furniture/ fixtures and insurableinterests of the Company are adequately insured.
Your Directors take this opportunity to thank the Customers Suppliers ShareholdersBankers Dealers Agents Employees and Government and Semi-Government Authorities fortheir consistent support and encouragement to the Company.
| ||For and on behalf of the Board of Directors |
| ||Anurag P. Poddar |
| ||Chairman & Managing Director |
|Date: 13th May 2019. || |
|Place: Mumbai || |