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Mangalam Timber Products Ltd.

BSE: 516007 Sector: Others
NSE: MANGTIMBER ISIN Code: INE805B01012
BSE 00:00 | 19 Oct 20.30 -0.40
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NSE 00:00 | 19 Oct 19.90 -0.70
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OPEN 19.50
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VOLUME 6447
52-Week high 52.25
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Mkt Cap.(Rs cr) 37
Buy Price 0.00
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OPEN 19.50
CLOSE 20.70
VOLUME 6447
52-Week high 52.25
52-Week low 14.10
P/E
Mkt Cap.(Rs cr) 37
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mangalam Timber Products Ltd. (MANGTIMBER) - Director Report

Company director report

FOR THE YEAR ENDED 31ST MARCH 2018

Dear Members

Your Directors are pleased to present the 34th Annual Report of the Company and theAudited Accounts for the financial year ended 31st March 2018.

1. FINANCIAL RESULTS

The Company's financial performance for the year ended 31st March 2018 is summarizedbelow:

(Rs. in lacs)
Particulars For the Year ended 31st March 2018 For the Year ended 31st March 2017
Income from operations 2278.57 3581.32
Profit/(Loss) before Interest Finance Charges Depreciation and Tax (341.67) (1034.54)
Less: Finance Charges 856.63 722.61
Profit / (Loss) before Depreciation and Tax (1198.30) (1757.15)
Less: Depreciation 155.18 143.65
Profit / (Loss) before Tax (1353.48) (1900.80)
Less: Tax Expenses (net) (419.79) (529.16)
Net Profit / (Loss) after Tax (933.69) (1371.64)

2. DIVIDEND

In view of losses the Board of Directors has not recommended any dividend for thefinancial year 2017-18.

3. MANAGAEMENT DISCUSSION AND ANALYSIS

A Management Discussion & Analysis is forming part of this Annual Report.

4. FINANCE

Your Company thanks its consortium bankers for their continued support.

5. RAW MATERIAL

Raw material costs especially those of Firewood Melamine and Urea have increasedsubstantially and have affected the production costs adversely during the year. Furthernon-availability of firewood which is a key raw material of the Company's product withina reasonable distance forming our catchment area added to the transportation cost offirewood and affected our costs to a large extent. Other raw materials also have shown anupward trend in prices.

6. CAPTIVE THERMAL POWER PLANT

The 2.5 MW Captive Thermal Power Plant is in operation. This power plant will not onlyreduce the power cost considerably but will also give consistent supply of power whichwill help in reducing utility production.

7. PLANTATION

Availability of firewood in nearby areas has become difficult but necessary efforts arebeing made continuously to develop long term supply. Your company is continuing its policyon plantation activities to help supply quality raw material to factory with least cost ona continuous & sustainable basis. Some important efforts undertaken during the yearare mentioned below:

i. Mist Chamber and Nursery: Company is strategically increasing the focus onNursery operations to ensure consistent & quality supply of high yielding clonalplants to the farmers at affordable price and to increase the catchment areas of Companyfor wood. However the Mist Chamber activities suffered a setback due to both the MistChambers getting severely damaged in this year's cyclone. They have been subsequentlyrepaired.

ii. Farm Forestry Planting: Your Company actively participates in all FarmForestry schemes introduced on a year to year basis by the Odisha & ChattisgarhGovernments whereby Bipartite agreements are entered into between the company and largefarmers who are supplied quality clones at very low rates and subsequently the Company isgiven preference at the time of harvesting the matured trees.

iii. Private Wood Supply: Presently approx. 10% of our wood requirementcomes from farm forestry and lease plantations. In future we can fulfil up to 15%-20% ofthe Company wood requirement from our lease land and balance requirement from privatesuppliers. All efforts are being made to increase the captive wood supply. Howeverefficient vendor development is essential for long-term consistent supply of quality wood.

8. EXTRACT FROM ANNUAL RETURN

The Extract of Annual Return as required under Section 134(3)(a) of the Companies Act2013 is set out at Annexure-I forms part of this report.

9. BOARD MEETINGS

The Board met five times during the Financial Year 2017-18. Details of Meetings and theattendance of each Director is provided in the Report on Corporate Governance.

10. AUDIT COMMITTEE

The composition and terms of reference of the Audit Committee has been furnished underSN 3A in the Corporate Governance Report forming a part of this Annual Report. There havebeen no instances where the Board has not accepted the recommendations of the AuditCommittee.

11. CORPORATE GOVERNANCE

Your Company attaches considerable significance to good Corporate Governance as animportant step towards building investor confidence improving investors' protection andmaximizing long-term shareholders value. The Report on Corporate Governance as stipulatedunder Chapter IV of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("the Listing Regulations") formspart of the Annual Report. The certificate of the Auditors M/s. Manish Goyal &Associates confirming compliance of conditions of Corporate Governance as stipulatedunder the Listing Regulations is attached as Annexure-ll and forms a part of thisreport.

12. CORPORATE SOCIAL RESPONSIBILTY

Driven by the desire to create a meaningful difference in society the Company makesconscious efforts to achieve higher socio-economic goals. It has continued with itswelfare activities for development in the fields of education health culture and otherwelfare measures and to improve the general standard of living.

13. NOMINATION AND REMUNERATION POLICY

The Company has in place a formal Nomination and Remuneration Policy formulated as perprovisions of Section 178(3) of the Act as well as Regulation 19(4) read with Part D ofSchedule II of the Listing Regulations. The Company's Remuneration Policy is attached as Annexure-llland forms a part of this report.

14. KEY PARAMETER FOR APPOINTMENT OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Nomination and Remuneration Committee has formulated a detailed policy forappointment of directors and key managerial personnel which is designed to attractmotivate and retain best talent. This policy applies to directors senior managementincluding its Key Managerial Personnel (KMP) and other employees of the Company. Thecompensation strategy revolves around getting the "best talent in the market".The remuneration of KMPs of the Company is recommended by the Nomination and RemunerationCommittee based on the Company's remuneration structure taking into account factors suchas level of experience qualification and suitability. The Company generally paysremuneration by way of salary perquisites and allowances (fixed component).

15. DIRECTORS

In accordance with the Articles of Association of the Company and the provisions of theCompanies Act 2013 Smt Vidula Jalan (DIN: 01474162) being non-independent directorretires by rotation and being eligible seeks reappointment.

The Company has received declaration from all the Independent Directors of the Companyconfirming that they meet the criteria of the independence prescribed under sub section(6) of the section 149 of the Companies Act 2013.

The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibility in the Company nature of the industry inwhich the Company operates and other related matters are put on the website of the Companyat the link http://www.mangalamtimber.com/images/Familiarisation-Programme-for-lndependent-Directors.pdf

16. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Act the Directors state that:

a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and proper explanations provided relating to material departures if any;

b) such accounting policies have been selected and applied consistently and judgmentsand estimates made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company at the end of the financial year and of the loss ofthe Company for that period;

c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis;

e) internal financial controls were followed by the Company and they are adequate andare operating effectively; and

f) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.

17. KEY MANAGERIAL PERSONNEL

Following employees were the Key Managerial Personnel of the Company during the periodunder review:

i. Shri Siddhartha Roy Manager and Chief Financial Officer of the Company

ii. Miss Priya Sharma Company Secretary

18. REMUNERATION TO DIRECTOR'S 8i KEY MANGERIAL PERSONNEL

i. The Ratio of the remuneration of each Director to the median remuneration ofemployees of the Company for the year ended 31st March 2018 are:-

SI No. Name of Directors and Key Managerial Personnel Designation Ratio of remuneration of Director to median remuneration of the Employee of the Company Percentage increase in the remuneration for the Financial Year 2017-18
1 Shri N. G. Khaitan Independent and Non-Executive Director 31% NA*
2 Shri Vishwanath Chandak Independent and Non-Executive Director 11% NA*
3 Shri Anand Daga Independent and Non-Executive Director 56% NA*
4 Smt Vidula Jalan Promoter Non-Executive Director 34% NA*
5 Smt Leena Ghosh Independent and Non-Executive Director 27% NA*
6 Shri Soumitra Kr De Manager of the Company (upto 7th December 2017) NA Nil
7 Shri Amit Kr Agarwal Chief Financial Officer (upto 7th December 2017) NA Nil
8 Shri Siddhartha Roy Manager and Chief Financial Officer of the Company NA NA**
9 Miss Namrata Priya Company Secretary (upto 26th October 2017)A NA Nil

* Being non-executive Director only sitting fees are paid.

** Shri Siddhartha Roy has been appointed as Manager & CFO of the Companywith effect from 7th December 2017 A Smt. Priya Sharma has been appointed as CompanySecretary of the Company with effect from 23rd April 2018

Median remuneration of the Employees of the Company assumed to be Rs. 2.00 Lacs(Previous Year: 2.16 Lacs).

ii. In the financial year 2017-18 there was decrease of 8.00% in the medianremuneration of employees.

iii. There were 183 permanent employees on the rolls of Company as on 31st March 2018.

iv. In view of the loss of the Company no increments were given to employees of theCompany.

v. Comparison of the remuneration of the key managerial Personnel against theperformance of the Company: The total remuneration of Key Managerial Personnel decreasedby Rs 1.67 Lacs from Rs 10.46 Lacs in 2016-17 to Rs 8.79 Lacs in 2017-18.

vi. (a) Variations in the market capitalization of the Company: The marketcapitalization as on 31st March 2018 was Rs 4074 Lacs (Rs 5259.96 Lacs as on 31st March2017)

(b) Price Earnings Ratio of the Company :

Not computed in view of Loss

(c) Percent increase over / decrease in the market quotations of the shares of thecompany as compared to the rate at which the company came out with the last public offerin the year: The company has not made any public issue or rights issue of securities inthe recent past so comparison have not been made of current share price with public offerprice. The Company's shares are listed on BSE Limited and National Stock Exchange of IndiaLimited

vii. Considering the performance of the Company no increment was made to the salariesof the employees in the last financial year i.e. 2017-18.

viii. Key Parameters for any variable component of remuneration availed by theDirectors are based on their contribution at the Board time spent on operational mattersand other responsibilities assigned:

All directors of the Company are non-executive directors hence no remunerations werepaid/ payable to them other than sitting fees.

ix. The ratio of the remuneration of the highest paid Director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year 2017-18: Nil (All directors of the Company are non-executive directorshence no remunerations were paid/ payable to them other than sitting fees).

x. It is hereby affirmed that the remuneration paid is as per the Remuneration Policyof the Company.

19. STATUTORY AUDITORS

M/s Manish Goyal & Associates Chartered Accountants (Firm Registration No.007152C) are the Statutory Auditors of the Company.

20. SECRETARIAL AUDITOR

The Board appointed Shri Arup Kumar Roy ACS Practicing Company Secretary asSecretarial Auditor of the Company for the Year 2017-18. The Report of the SecretarialAuditor is attached in Annexure IV of this Report. There is no qualification in thereport.

21. AUDITORS' REPORT

Auditors' Report to the shareholders does not contain any qualification reservationor adverse remarks and is self- explanatory.

22. CASH FLOW ANALYSIS

In conformity with the provisions of Regulation 34(2){c) of the Listing Regulation2015 Cash Flow Statement for the financial year ended 31st March 2018 forms part of theaudited financial statement.

23. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company has not given any loan guarantees or made any investments as prescribed inSection 186 of the Companies Act 2013.

24. RELATED PARTY TRANASACTIONS

All the related party transactions are entered into at arm's length in ordinary courseof business and are in compliance with the applicable provisions of the Companies Act2013 and the Listing Regulations. There were however no material significant relatedparty transaction made by the Company with the Promoters Directors or Key ManagerialPersonnel etc. which may have potential conflict with the interest of the Company.

The policy on Related Party Transactions as approved by the

Board has been uploaded on the Company's website under web linkhttp://www.mangalamtimber.com/images/Related- Party-Transaction-Policy.pdf

Your Directors draw attention of the members to Note 2.25 (6) to the financialstatement which sets out related party transactions disclosures.

25. PUBLIC DEPOSIT

The Company has neither invited nor accepted any public deposits within the meaning ofsection 73 of the Companies Act 2013 during the year under report.

26. SUBSIDIARY/ASSOCIATES/JOINT VENTURE COMPANIES

The Company does not have any subsidiary/associate/joint venture company for the yearended 31st March 2018.

27. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

No amount is pending for transfer to Investor Education and Protection Fund as on 31stMarch 2018.

28. TRANSFER OF "UNDERLYING SHARES" INTO INVESTOR EDUCATION AND PROTECTIONFUND (IEPF) (in cases where unclaimed dividends have been transferred to the IEPF for aconsecutive period of seven years)

In terms of Section 125(6) of the Companies Act 2013 read with Investor Education andProtection Fund (IEPF) Authority (Accounting Audit Transfer and Refund) Rules 2016 theCompany is required to transfer the shares in respect of which dividends have remainedunclaimed for a period of seven consecutive years to the IEPF Account established by theCentral Government. As required under the said Rules the Company has published a Noticein the newspapers inviting the member's attention to the aforesaid Rules. The Company hasalso sent out individual communication to the concerned members whose shares are liable tobe transferred to IEPF Account pursuant to the said Rules to take immediate action in thematter.

29. VIGIL MECHANISM

The Company has a codified whistle blower policy to establish vigil mechanism forDirectors and employees of the Company to report concerns about unethical behaviouractual or suspected fraud or violation of the Company's code of conduct or ethics policy.The mechanism under the policy has been appropriately communicated within theorganisation. The Whistle Blower Policy is available on the website of the Company.

30. DISCLOSURE UNDER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE

No complaints on the issues covered by "The Sexual Harassment of Women at theWorkplace (Prevention Prohibition & Redressal) Act 2013" were received duringthe year. Consequently the question of disposal of complaints did not arise.

31. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.

32. PERFORMANCE EVALUATION

Pursuant to Regulation 17(10) of the Listing Regulations read with provisions of theCompanies Act 2013 the Board has carried out an evaluation of its own performance andthat of the individual Directors. The evaluation criteria inter-alia covered variousaspects of the Board's functioning including its composition execution and performance ofspecific duties obligations and governance.

The performance of individual directors was evaluated on parameters such as level ofengagement and contribution independence of judgement safeguarding the interest of theCompany and its minority shareholders time devoted etc. The Directors expressed theirsatisfaction with the evaluation process.

33. CARBON CREDIT

Our Clean Development Mechanism (CDM) project activity "Reforestation of degradedland by MTPL in India (5016)" has accumulated credit of 1764076 CERs from UNFCCC.These units will be available to the Company on completion of certain laid formalities.

34. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING ANDOUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is given as Annexure V to this Report.

35. PARTICULARS OF REMUNERATION

The Company has no employee in respect of whom information under Section 197(12) of theCompanies Act 2013 read with Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is required to be annexed.

36. INTERNAL FINANCE CONTROL

The Company has in place internal financial control systems commensurate with the sizeand complexity of its operations to ensure proper recording of financial and monitoringof operational effectiveness and compliance of various regulatory and statutoryrequirements. The internal auditor monitors and evaluates the efficacy and adequacy ofinternal control systems in the Company. Based on the report of the internal auditorrespective departments undertake corrective action in their respective areas and therebystrengthen the controls. Significant audit observations and corrective actions thereon arepresented to the Audit Committee of the Board.

37. APPRECIATION

Your Directors place on record their deep appreciation of the assistance and guidanceprovided by the Central Government and the Governments of the States of India itssuppliers technology providers and all other stakeholders. Your Directors thank thefinancial institutions and banks associated with your Company for their support as well.Your Directors also thank the Company's dealers and its customers for their unstintedcommitment and valuable inputs.

Your Directors acknowledge the support received from you as shareholders of theCompany.

Yours faithfully.
N.G.Khaitan
Vishwanath Chandak
Place: Kolkata Anand Daga Directors
Dated : 18th May 2018 Vidula Jalan
Leena Ghosh