The Directors are pleased to present their 32ndReport along with the AuditedAccounts for the year ended 31st March 2017.
Rama Paper Mills Limited ("Your Company") is a leading Indian NewsprintDuplex Board Tissue manufacturing Company.
Overview of The Economy
The Global economy disappointed in terms of growth with deceleration of activity inkey emerging and developing economies like China Brazil Russia overshadowing a modestrecovery in major high income countries. The deceleration was accompanied by declines incommodity prices subdued global trade bouts of financial market volatility and weakeningcapital flows. India was a notable exception growing at 7.6% as per Central StatisticalOffice (CSO) estimates despite declines in exports. Inflation has come down howeverindustrial activity and consumption has not been buoyant. Three key transitions willinfluence the global outlook for growth - pace of rebalancing in China commodity pricesand monetary policy actions in the US and other major economies. For India though thelong term prospects for continued growth remain undiminished actual pace will depend onrevival in private investment and rural consumption strengthening of bank balance sheetsand continued implementation of economic reforms.
|Particulars ||2016-17 ||2015-16 |
|Turnover ||998378084 ||1243705852 |
|Profit before Financial Charges & Depreciation ||(90713540) ||(124659903) |
|Less: Financial Charges ||85791699 ||81388519 |
|Less: Depreciation ||31799987 ||31701962 |
|Profit before Tax ||(208305225) ||(237750384) |
|Add/Less: Deferred Tax Liability/Asset ||0 ||0 |
|Less: Provision for Tax (MAT) ||6312630 ||(49121000) |
|Add: MAT Credit Entitlement || ||0 |
|Profit After Tax ||(216138955) ||(190082553) |
During the year under review your Company has suffered the Net Loss ofRs.216138955against the Net Loss of Rs.190082553 in the previous year The turnover hasalso been decreased to Rs. 998378084 against the previous year turnover of Rs.1243705852 The loss has resulted mainly due to depressed market conditions in paperindustry coupled with increase in raw material cost. Moreover the due to the shortage ofavailable working capital with the Company the installed capacity could not be fullyutilized therefore economies of scale could not be reached.
Since the Company incurred Net Loss during the financial year your Directors regrettheir inability to recommend any dividend.
Shri Pramod Agarwalwill retire by rotation and being eligible offers himself forre-appointment.
Pursuant to provisions of the Companies Act 2013 and as per applicable provisions ofSecurities And Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 a structured questionnaire was prepared after taking into considerationof the various aspects of the Board's functioning composition of the Board and itscommittees culture execution and performance of specific duties obligations andgovernance.
The performance evaluation of the independent Directors was completed. The performanceevaluation of the Chairman and non Independent Directors was carried out by theindependent Directors. The Board of Directors expressed their satisfaction with theevaluation process.
Number of Board Meetings
The details of the number of meetings of the Board held during the Financial Year2016-17 forms part of the Corporate Governance Report.
Particulars of Loan Guarantees or Investments by Company
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes of financial statements.
The Vigil Mechanism/Whistle blower Policy of the company provides that protecteddisclosures can be made by a whistle blower through an email to the Chairman of the auditcommittee. The Whistle Blower Policy can be accessed on the Company's Website(www.ramapaper.com). This disclosure also forms part of the Corporate Governance Report asper applicable provisions of Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015.
Remuneration and Nomination policy
The nomination and remuneration committee has recommended to the Board:
1. A policy which lays down a framework in relation to remuneration of Directors KeyManagerial Personnel and Senior Management of the Company. The details of this policy areattached as Annexure to this report and
2. Further Policy for selection criteria of Directors and Senior Management andCriteria for determining qualifications positive attributes and director independence isalso attached as Annexure to this Report. The Remuneration and Nomination Policy has alsobeen posted on the website of the Company (www.ramapaper.com).
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to Section 135 of the Companies Act 2013 and rules made there under everycompany having net worth of Rupees five hundred crore or more or turnover of rupees onethousand crore or more or a net profit of rupees five crore or more during any financialyear shall constitute a Corporate Social Responsibility Committee of the Board.
However it is not applicable in case of your Company. Hence there is no need to formCorporate Social Responsibility Committee and Corporate Social Responsibility Policy forthe company as per the requirement of the Companies Act 2013.
FAMILIARIZATION PROGRAMME AND TRAINING OF INDEPENDENT DIRECTORS
The details of programmes for familiarization of Independent Directors with thecompany their roles and responsibilities in the company business model of the companyand other related matter are updated on the website of the Company (www.ramapaper.com).
To familiarize the new inductees as independent director with the strategy operationsand functions of our Company the executive directors make presentations to the inducteesabout the Company's organization structure finance human resources facilities and riskmanagement.
Further at the time of appointment of an independent director the Company issues aformal letter of appointment outlining his/her role function duties and responsibilitiesas a director. The Formal format of the letter of appointment is available on our website.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thereis no employee in the company which draws the remuneration in excess of the limits setout in the said rules.
Disclosures pertaining to remuneration and other details of directors & KMP asrequired under Section 197(12) of the Act read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are enclosed asAnnexure to this Report.
Policy for Preservation of Documents
In terms of applicable provisions of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 Company have incorporatedpolicy for preservation of documents as specified in the Regulation.
Policy for Related Party Transaction
All transactions entered with Related parties for the year under review were on arm'slength basis and pursuant to Section 188 of the Companies Act 2013 thus disclosure inForm AOC 2 is annexed with Annual Report. The Company has developed a Related Partytransactions framework through standard operating procedure for the purpose ofidentification and monitoring of such transaction.
All Related party transactions are placed before the Audit Committee as also to theBoard for approval. None of the Directors has any pecuniary relationship or transactionsvis-a-vis the Company. The policy on Related Party Transactions as approved by the Boardof Directors has been uploaded on the website of the Company (www.ramapaper.com).
Policy on Materiality of Related Party Transactions
In terms of Regulation 23(1) of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 Company have incorporatedpolicy to determine materiality of Related Party Transactions as specified in theRegulation.
Significant and Material Order Passed By the Regulators or Court
There are no Significant and material orders passed by the Regulator/Courts that wouldimpact going concern status of the company and its future operations.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and outgo
Particulars relating to energy conservation technology absorption foreign exchangeearnings and outgo as required to be disclosed under Section 134 (3) (m) of the CompaniesAct 2013 read with the Rule 8(3) of the Companies (Accounts) Rules 2014 are givenhereunder:
Conservation of Energy
i.) Steps taken or impact on conservation of energy: Energy conservation efforts areongoing activities. During the year under review further efforts were made to ensureoptimum utilization of electricity.
ii) Steps taken by the company for utilizing alternate sources of energy: The Companyhas shifted its energygeneration from husk basis to pet coke basis which has resultanteffect in the Cost of Energy.
iii) The Capital investment on energy conservation equipments: During the year underreview the Company has madenormal routine maintenance but no capital expenditure has beenmade.
Technology Absorption Adaption & Innovation and Research & Development
No research & development or technical absorption or adaption & innovationtaken place in the company during the Financial Year 2016 - 2017 the details as per rule8(3) of The companies (Accounts) Rules 2014 are as follows:
i) Efforts made towards technology absorption: - Nil
ii) Benefits derived like product improvement cost reduction product development orimport substitution: Nil
iii) In case of imported technology (imported during the last 3 years reckoned from thebeginning of the financial year)-
a) Details of technology imported: Nil
b) Year of Import: Nil
c) Whether the technology been fully absorbed: Nil
d) Areas where absorption has not taken place and the reasons there of: Nil
iv) Expenditure incurred on Research and Development: Nil
Foreign Exchange Earnings and Outgo
As your Company imports waste paper from the various countries owing to its highrecovery therefore the particulars relating to Foreign Exchange Earnings and Outgo aredescribed hereunder.
Foreign Exchange Earnings: Rs. 4668578 Foreign Exchange Outgo: 98394865
Corporate Governance and Management Discussion and Analysis Reports
The Corporate Governance and Management Discussion and Analysis Reports which form anintegral part of this report are set out as separate annexure to this report togetherwith the Certificate from the Auditors of the Company confirming compliance of theconditions of Corporate Governance as stipulated in Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015with the StockExchange.
Directors Responsibility Statement
To the Best knowledge and belief and accordingly to the information and explanationobtained by them your Directors make the following statement Pursuant to Section134(3)(c) of the Companies Act 2013 it is hereby confirmed that:
a) In the preparation of the Annual Accounts for the year ended 31st March 2017 theapplicable accounting standards have been followed along with proper explanations relatingto material departure.
b) Appropriate accounting policies have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as at 31st March 2017 and ofthe Profit of the Company for the year ended 31st March 2017.
c) Proper and sufficient care has been taken for the maintenance of accounting recordsin accordance with the Provisions of the Companies Act 2013 for safeguarding the assetsof the Company and for preventing and detecting fraud and other irregularities.
d) The financial statements have been prepared on a going concern basis.
e) That the Director had laid down internal financial controls to be followed byCompany and such internal Controls are adequate and were operating effectively; and
f) That the Directors had devised proper system to ensure compliance with theprovisions of all applicable laws and that such system were adequate and operatingeffectively.
Statutory Auditors and Auditors' Report
The Ministry of Corporate Affairs by introducing Companies Act 2013 has imposed arestriction under Section 139 that No Listed Company shall make re-appointment of a firmof Statutory Auditor who has been an Auditor of the Company for the period of more thantwo consecutive terms of five years. Therefore M/s Shiam & Co. is not eligible forthe re-appointment as Statutory Auditors of the Company.
Therefore the Audit Committee of the Company at its meeting held on 01.09.2017recommended the appointment of M/s Bajaj Arora & Company Chartered Accountants andthe Board of Directors of the Company has made the appointment of M/s Bajaj Arora andCompany as Statuary Auditors of the Company for the financial Year 2017-18 under theprovisions of Section 139(1) of the Companies Act 2013 subject to the approval of theShareholders of the Company in the ensuing Annual General Meeting of the Company.
The Boards recommend their appointment.
The report of the Auditors is self -explanatory therefore does not require anyspecific comments.
As per requirement of Central Government and pursuant to section148 of Companies Act2013 read with the Companies (Cost records and Audit) Rules 2014 as amended from time totime your Company has beencarrying out audit of Cost records relating to the Company.
The Board of Directors on the recommendation of the Audit Committee has appointedM/s.Jain Sharma& Company Chartered Accountants as the Cost Auditor of the Company forthe Financial Year 2017-18. As it requires under the Companies Act 2013 a resolutionseeking member's approval for the remuneration payable to the Cost Auditor forms part ofthe Notice convening Annual General Meeting.
Pursuant to the provisions of the Section 204 of the Companies Act 2013 and rules madethereunder the Company has appointed Ms.Harmeet Kaur Company Secretaryto undertake thesecretarial Audit of the Company. The secretarial Audit Report is included as Annexure andform an integral part of this report.
As per requirements of Section 138 of Companies Act 2013 read with Rule 13 ofCompanies (Accounts) Rules 2014 The Board of Directors on the recommendation of the AuditCommittee appointed M/s. GR&Company Chartered Accountants as the Internal Auditor ofthe Company for the Financial Year 2017-18.
Internal Control System And Their Adequacy
Your Company has an effective internal Control and risk mitigation system which areconstantly assessed risk mitigation system which are constantly assessed and strengthenedwith new/revised standards operating procedures. The Company's internal Control System iscommensurate with its size scale and complexities of its operations.
The Audit Committee of the Board of directors actively reviews the adequacy andeffectiveness of the internal control system and suggests improvements to the strengthenthe same. The company has a robust Management information system which is an integralpart of the control mechanism.
The Audit Committee of the Board of Directors Statuary Auditors and the Business headsare periodically apprised of the internal Audit findings and Corrective actions taken.Audit plays a key role in providing assurance to the Board of Directors. Significant Auditobservation and corrective actions taken by the management are presented to AuditCommittee of the Board. To maintain its objectivity and independence the internal Auditfunction reports to the Chairman of the Audit Committee.
During the year under review the senior officials of the Company performs the task ofrisk management to identify and evaluate elements of business risk. Consequently a revisedrobust Business Risk Management framework is in place. The risk management frameworkdefines the risk management approach of the Company and includes periodic review of suchrisk and also documentation mitigation control and reporting mechanism of such Risk.
Material Changes and Commitments after the date of close of Financial Year 2016 - 17
It is hereby informed that the Bank of Baroda the financial partner of the Company hasdeclared the Company as willful defaulters vide its order dated 28.07.2017. However theCompany is also challenging the same on various grounds and hopefully the Company will beable to take a defence against the same on its merits. The Directors of your Company hasalways put their best efforts to run the Company in an efficient manner and has been nevershy of investing sums in the Company as and when required.
Details of Subsidiary Companies Joint Ventures and Associate Company and theirFinancial Position
There is no subsidiary Associate and joint venture of the company and further thereare no companies which have become or ceased to be the subsidiary and joint venture ofthe company during the year.
Extract of Annual Report
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of Companies Act 2013 are included in this report as Annexure and formsan integral part of this report.
Your Directors take this opportunity to place on record their appreciation for theshareholders bankers and other business associates for their forbearance understandingand support to the Company. They also wish to place on record their great appreciation ofthe commitment sense of involvement and dedication exhibited by each staff member in theoverall development growth and prosperity of the company.
|Dated: 1st September 2017 || || |
|Place: Kiratpur ||FOR AND ON BEHALF OF THEBOARD OF RAMA PAPER MILLS LTD. |
| ||Sd/- ||Sd/- |
| ||ARUN GOEL ||PRAMOD AGARWAL |
| ||EXECUTIVE DIRECTOR ||MANAGING DIRECTOR |