Mangalam Timber Products Ltd.
|BSE: 516007||Sector: Others|
|NSE: MANGTIMBER||ISIN Code: INE805B01012|
|BSE 00:00 | 14 Aug||21.75||
|NSE 00:00 | 14 Aug||22.25||
|Mkt Cap.(Rs cr)||40|
|Mkt Cap.(Rs cr)||39.87|
Mangalam Timber Products Ltd. (MANGTIMBER) - Director Report
Company director report
FOR THE YEAR ENDED 31ST MARCH 2017
Your Directors are pleased to present the 33rd Annual Report of the Company and theAudited Accounts for the financial year ended 31st March 2017.
1. FINANCIAL RESULTS
The Company's financial performance for the year ended 31st March 2017 is summarizedbelow:
In view of losses the Board of Directors has not recommended any dividend for thefinancial year 2016-17.
3. MANAGAEMENT DISCUSSION AND ANALYSIS
A Management Discussion & Analysis is forming part of this Annual Report.
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. Furthernonavailability of firewood which is a key raw material of the Company's product within areasonable 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
During the year your company has started commercial production from its 2.5 MW captivethermal power plant. This power plant will provide uninterrupted power to the productionwhich will not only improve the plant efficiency but also reduce its cost of production.With this power plant the Company will be 100% self-sufficient through its own powergeneration.
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 four times during the Financial Year 2016- 17. Details of Meetings andthe attendance 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. S. M. Daga & Co.confirming compliance of conditions of Corporate Governance as stipulated under theListing Regulations is attached as Annexure-ll and forms a part of this report.
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- III and forms a part of thisreport.
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).
Shri Prabir Chakravarti (DIN: 00273523) Independent Non- Executive Director of theCompany passed away on 5th February 2017. We place on record our deep appreciation forthe valuable contributions made by him during his tenure. The Board of Directors videcircular resolution dated July 3 2017 appointed Shri Vishwanath Chandak (DIN: 00313035)as Additional Non-Executive Independent Director of the Company with effect from July 32017. Shri Vishwanath Chandak holds office upto the date of the ensuing Annual GeneralMeeting of the Company.
Pursuant to the provisions of Sections 149150152 read with Schedule IV and all otherapplicable provisions of the Companies Act 2013 and the Companies (Appointment andQualification of Directors) Rules 2014 and Regulation 16(1) (b) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 it is proposed to appoint ShriVishwanath Chandak as Non-Executive Independent Director of the Company for the period of5 (Five) consecutive years from the conclusion of the Company's 33rd Annual GeneralMeeting to the conclusion of Company's 38th Annual General Meeting.
A brief profile of Shri Vishwanath Chandak has been given in the Notice convening theAnnual General Meeting.
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 re-appointment. The Company has receiveddeclaration from all the Independent Directors of the Company confirming that they meetthe criteria of the independence prescribed under sub section (6) of the section 149 ofthe Companies Act 2013. The details of programmes for familiarisation of IndependentDirectors with the Company their roles rights responsibility in the Company nature ofthe industry in which the Company operates and other related matters are put on thewebsite of the Company at the link http://www.mangalamtimber.com/images/Familiarisation-Programme-for-lndependent-Directors.pdf
16. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the provisions of Section134(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 Soumitra Kumar De Manager of the Company
ii. Shri Amit Kumar Agarwal Chief Financial Officer
iii. Miss. Namrata Priya Company Secretary
18. REMUNERATION TO DIRECTOR'S & 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 2017 are:-
* Shri Prabir Chakravarti Independent Non-Executive Director of the Company passedaway on 5th February 2017 Median remuneration of the Employees of the Company assumed tobe Rs. 2.16 Lacs (Previous Year: 2.02 Lacs).
ii. In the financial year 2017-18 there was increase of 6.93% in the medianremuneration of employees.
iii. There were 225 permanent employees on the rolls of Company as on 31st March 2017.
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 1.06 Lacs from Rs 11.52 Lacs in 2015- 16 to Rs 10.46 Lacs in 2016-17.
vi. (a) Variations in the market capitalization of the
Company: The market capitalization as on 31st
March 2017 was Rs 52599.63 Lacs (Rs. 3069.84 Lacs as on 31st March 2016)
(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. 2016-17.
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-executivedirectors hence no remunerations were paid/ 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 2016-17: 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 S. M. Daga & Co Chartered Accountants (Firm Registration No. 303119E) are theStatutory Auditors of the Company for more than 10 years. As S. M. Daga & Co. havecompleted their tenure of two terms of five years consecutive and also as additionalperiod of 3 years as stipulated under Section 139 of the Companies Act 2013 and shall bein the office of the Statutory Auditors only upto the conclusion of the forthcoming AnnualGeneral Meeting.
Your company is proposing to appoint M/s Manish Goyal & Associates. CharteredAccountants (Firm Registration No.007152C) Chartered Accountants as the StatutoryAuditors of the Company for a period of 5 years commencing from the conclusion of the 33rdAnnual General Meeting of the Company. They have confirmed their eligibility under Section141 of the Act and the Rules framed thereunder for their appointment as the Auditors ofthe Company. They have further confirmed that they ae not disqualified to be appointed asStatutory Auditors in terms of the provisions of the proviso to Section 139(1) Section141(2) and Section 141(3) of the Act and the provisions of the Companies (Audit andAuditors) Rules 2014.
20. SECRETARIAL AUDITOR
The Board appointed Shri Arup Kumar Roy ACS Practicing Company Secretary asSecretarial Auditor of the Company for the Year 2016-17. 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 2017 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 onthe Company's website under web link http://www.mangalamtimber.com/images/Related-Party-Transaction-Policy.pdf Your Directors draw attention of the membersto Note 2.25 (6) to the financial statement which sets out related party transactionsdisclosures.
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 anysubsidiary/associate/joint venture company for the year ended 31st March 2017.
27. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
The Company has transferred a sum of Rs 801081/- during the financial year 2016-17 tothe Investor Education and Protection Fund established by the Central Government for theunclaimed dividends for the financial year 2008- 09 in compliance with section 125 ofthe Companies Act 2013. The said unclaimed dividends were lying with the Company for aperiod of 7 years from their respective due dates of payment.
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 members 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
Due to the growing indiscipline on the part of the company's employees and Managementstaff employed at the Company's Plant located at Village: Kusumi P.O. & Dist.Nabarangpur Odisha the Company was compelled to declare "Suspension of work"at its Plant with effect from 31st March 2017. The suspension of work was subsequentlywithdrawn with effect from 15th June 2017.
Apart from the above there have been no material changes and commitments if anyaffecting the financial position of the Company which have occurred between the end of thefinancial year of the Company to which the financial statements relate and the date of thereport.
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 tCERs 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.
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.