We have pleasure in presenting Thirty Ninth (39th) annual report of businessand operation of your Sangal Papers Limited ("The Company") along with thestandalone audited yearly financial statements for the financial year ended 31stMarch 2019.
The Sangal Papers Limited (herein after called "The Company") wasincorporated in the year 1980. The company is manufacturing Newsprint Writing PrintingPaper and others various quality papers on customers demand. The company was faced manyups and downs in its life. We pray for better and bright future of the company. Ourstrategic objectives are to build a sustainable organization that remains relevant to theagenda of our stakeholders and creating growth opportunities for our employee and increasethe wealth of the company for our members.
At present the company is facing avoidable and unavoidable challenges and threats. Weare facing stiff competition in paper industry and the size of the company is negligiblein the papers industry.
The financial statements of the company have been prepared in accordance with theIndian Accounting Standards (Ind AS) notified under section 133 of the Companies Act 2013read with Companies (Accounts) Rules 2014 (including any modification if any). Thestandalone financial highlights of our Company for the financial year ended March 31 2019are summarized as follows details are based on:
Details of financials as per IND AS:
|Particulars ||Current financial year (2019) ||Previous financial year (2018) |
|Revenue from Operations ||14823.40 ||12050.03 |
|Other Income ||114.96 ||62.83 |
|Total Income of the company ||14938.36 ||12112.86 |
|Profit before Depreciation Finance Costs Exceptional items and Tax Expense ||1017.62 ||618.37 |
|Less: Depreciation/ Amortisation/ Impairment ||117.80 ||100.75 |
|Profit before Finance Costs Exceptional items and Tax Expense ||899.82 ||517.62 |
|Less: Finance Costs ||167.22 ||154.36 |
|Profit before Exceptional items and Tax Expense ||732.6 ||363.26 |
|Add/Less : Exceptional items ||0 ||0 |
|Profit before Tax Expense ||732.6 ||363.26 |
|Less: Tax Expense (Current & Deferred) ||118.96 ||103.09 |
|Profit for the year (1) ||613.64 ||260.17 |
|Other Comprehensive Income (2) ||3.80 ||1.45 |
|Total Comprehensive Income (1+2) ||617.44 ||261.62 |
|Balance of profit /loss for earlier years ||2343.43 ||2081.82 |
|Add: Revaluation Reserve ||48.56 ||48.56 |
|Balance carried forward ||3009.43 ||2392 |
The issued capital subscribed capital and paid up equity share capital of the companyas on March 31 2019 was Rs. 13072600 (Rupees One Crore Thirty Lakhs Seventy TwoThousand Six Hundred Only) divided into 1307260 (Thirty Lakhs Seven Thousand Two HundredSixty) equity shares of Rs. 10/- each fully paid up.
During the period under review there is no change in the share capital of the company.
The Board of Directors of our company has decided not to transfer any to the reservefor the year under review.
The Board of Directors of our company after considering holistically the relevantcircumstances and keeping in view the company's dividend distribution policy has decidedthat it would be prudent not to recommend any dividend for future growth of the companyfor the year under review.
Our company is achieving its objectives and goals. Our company wants to be moreeconomical and bring efficiency in the operations of the company. The company is movingfast to maximization the wealth of shareholders and stakeholders of the company.
The company is regularly exploring and critically appraising its domestic andinternational market over last few years the company has moved closer to the ultimateconsumers and has remained successful in positioning its products in a way that consumerscan connect with and aspire with in mind. The company has maintained Internationalstandards in its products and always be trying to give sharpness to the company'smarketing strategies. The company has diversified its product line presently colouredverity writing printing paper is key product of the company and has been a maincontributory factor in the increase in net profit of the company before was that NewsprintPaper resulting Profit After Tax (PAT) increased by more than 135.86% (approx) ascompared to last year.
The company has recorded a significant growth in all segments. During the year underreview the company has achieved a turnover (Net) of Rs. 14398.36/-(In lakhs) as againstprevious figure of Rs. 12112.86/-(In lakhs) increase in sale 23.33% (approx).
During the year under review PBT (Profit Before Tax) was Rs. 732.6/-(In lakhs) ascompared to previous year figure of Rs. 363.26/-(In lakhs) posting an increase by 101.67% (approx) in PBT. Net profit and PAT (Profit After Tax and other comprehensive income)were Rs. 617.44/-(In lakhs) as compared to previous year figure of Rs. 261.62/-(In lakhs)reporting an increase of 136.01% (approx) in net profit as compared to previous year. Theoperating and fixed expenses are increased during the financial year resulting in lowernet profits after tax and therefore the company's net profit could not post thecorresponding increase.
The company's current installed capacity is 33000 MT per annum. during the year underreview no increment installed production capacity of the company.
STATE OF THE COMPANY
The following statement on the affairs of the company under review:
1. The company engaged in single segment i.e. company engaged in manufacturingof paper.
2. There is no changes in status of the company.
3. There is no changes in financial year of the company.
4. There is no such as Capital expenditure programmes which fallen effect on thefinancial position of the company.
5. There are no acquisition merger expansion modernization and diversificationduring the year in the company under review.
6. There is no any other material event having an impact on the affairs of the companyduring the year under review.
CASH AND EQUIVALENTS
Cash and equivalents as on date 31st March 2019 was Rs. 27.53/-(In lakhs).The company is continuing focus on judicious management of its working capitalreceivables inventories and other working capital parameters are kept under strict checkthrough continuous monitoring.
EARNING PER SHARE (EPS)
The Earning per equity share of the company for the financial year ended on 31/03/2019was Rs. 46.95/- per share and previous year was Rs. 19.91/- per share. The company hasreported an increment of 135.81% in EPS for the said financial year.
CHANGES IN FUNCTIONAL STRUCTURE OF THE COMPANY
The company was working as a single unit for availing the income tax benefit thecompany has divided into two units one was paper manufacturing and second was power plantunit and both were working as under the name and style of Sangal Papers Limited. The Boardof Directors of the company apprised that to achieved maximum productivity with minimumwasted effort or expense and to operate businesses efficiently to maximize profits of thecompany in a well-organized and competent way for these purpose and availing Income Taxbenefit under section 80- IA of the Income Tax Act 1961 the Board decided that the powerplant unit and paper unit will work as a separate unit from the company w.e.f. 1stApril 2018.
The company's properties including building plant and machinery stocks stores etc.have been adequately insured against major risks like fire earthquake terrorismburglary etc.
The company has not accepted any fixed deposits from public and as such accordingly noamount principal or interest amount was outstanding as on the date of the balance sheet.
Our company enjoys credit rating from Brickwork Ratings. The Brickwork Ratings IndiaPvt. Ltd. has granting credit rating on 19/03/2019 to the company as BWR BBB- (Pronouncedas BWR Triple B Minus) Outlook: Stable (Reaffirm) for Fund Based- Cash Credit and TermLoan (o/s) and BWR A3 (Pronounced as BWR A Three) (Reaffirm) for Non-fund Based: BankGuarantee and ILC/FLC.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The company has not given or granted any loans or guarantee covered under theprovisions of section 186 of the Companies Act 2013 other details can find on the notesto the financial statements of the company.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:
In the term of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 the Management Discussion and Analysis is set out in this Annual Report.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY:
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 and 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.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to section 135 of the Companies Act 2013 read with the companies (CorporateSocial Responsibility Policy) Rules 2014 including any amendments if any your company atthe Board Meeting held on 30th day of May 2019 approved and adopted a policyon Corporate Social Responsibility (CSR) and the Policy was hosted on the website of thecompany. The net profit of your company during the financial year 2018-19 was more thanRs. 5 crore on the recommendation of Corporate Social Responsibility Committee (CSRcommittee) and as part of CSR initiatives the company will spent CSR amount during thefinancial year 2019-2020 on specified activities undertaken projects in areas ofpromoting education health care and sanitation environmental sustainability and othersas per deem fit by the CSR committee. These projects will be in accordance with ScheduleVII of the Companies Act 2013. The report on CSR activities is attached as Annexure-I tothis.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as required to be disclosed pursuant to Section 134(3)(m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are given tothe extent applicable here in below:
CONSERVATION OF ENERGY
The Paper manufacturing Industries are one of the growing industries in India. Thebasic need of paper industries is raw material i.e. waste paper and energy toproduce the final product. Our company is seeking to optimize use of energy and installingnew equipment for reduce the consumption of energy and pollution at all its manufacturingfacilities and registered office at Vill. Bhainsa 22 km Meerut-Mawana road Meerut UP.The company is ensuring about that:
(A) ELECTRICAL ENERGY :
(a) Provision of Energy Efficient Pumps for ETP/STP Water Supply and Fire Systems.
(b) Use of Energy Efficient LED Lighting for manufacturing and office.
(c) Optimization of processes and operational control.
(d) The manufacturing operations are conducted in the manner whereby optimumutilization and maximum possible savings of energy is achieved.
(e) No specific investment has been made in reduction in energy consumption.
(f) As the impact of measures taken for conservation and optimum utilization of energyare not quantitative its impact on cost cannot be stated accurately.
(B) WATER :
(a) Rain water harvesting with ground recharge.
(b) Replacement of underground hydrant and water pipeline with above ground levelpipeline to arrest water leakages.
(c) Zero discharge of waste water.
The Company's products are manufactured by using in-house know how and no outsidetechnology is being used for manufacturing activities. The company is adopting greeninitiation for reduce the pollution and being more ecofriendly. The company constantlystrives for maintenance and improvement in quality of its products and entire in-houseResearch & Development activities are directed to achieve the aforesaid goal.
IMPORTS/ EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Imported raw materials during the year detailed as per mentioned in notes offinancials statements of the company.
The company exports the paper to Gulf European Asian and other Countries all over theworld during the year export increased to Rs. 2078.72 (in lakhs) from Rs. 1477.11 (inlakhs) in the previous year. The company has reported an increment of 40.73% in export forthe said financial year. Details are provided under the Point 22 of "Notes toFinancial Statements" for the financial year ended as on 31st March 2019.
DEVELOPMENTS IN INDUSTRIAL RELATIONS/ HUMAN RESOURCES INCLUDING NUMBER OF EMPLOYEEEMPLOYED
Employee wealth is main key of success of an origination it is our obligation providemore facilities to the employee. The company is a paper manufacturing industry we arecommitted to maintaining a culture and custom for our employee to attract and retain thebest talent. During the year under review your company enjoyed cordial relationship withworkers and employees at all levels.
CORPORATE GOVERNANCE REPORT
The Corporate Governance Report which form an integral part of this Directors' reportis set out as separate Annexure together with the Certificate from the auditors of thecompany regarding compliance with the requirements of Corporate Governance as stipulatedunder various regulations of the SEBI (Listing obligations and disclosure requirements)Regulations 2015.
DIRECTORS RETIREMENT AND RE-APPOINTMENT
Pursuant to the provisions of section 152 of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Vinayak Sangal (DIN : 06833351) Director (Non-Executive)retires by rotation and being eligible offer himself for re-appointment. The Board ofDirectors be and is hereby recommended Mr. Vinayak Sangal (DIN: 06833351) forre-appointment.
[ 20 ] THIRTY NINTH ANNUAL REPORT 2018-19
Pursuant to the provisions of section 152 of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Tanmay Sangal (DIN: 01297057) Director (Non-Executive)retires by rotation and being eligible offer himself for re-appointment. The Board ofDirectors recommended Mr. Tanmay Sangal (DIN: 01297057) for re-appointment.
DIRECTORS AND KEY MANAGERIAL PERSONNEL ("KMP")
The Board of Director of the Company having such executive and non-executive directors.
Key Managerial Personnel
Mr. Himanshu Sangal (Managing Director) Mr. Amit Sangal (Whole Time Director cum CFO)Mr. Shivam Sharma (Company Secretary) of the Company.
Mr. Tanmay Sangal (President Marketing cum Director) Mr. Vinayak Sangal (PresidentOperation cum Director) Mr. Prem Sethi (Independent Director) and Mrs. Geeta Gupta(Independent Director/ Woman Director) of the Company.
Pursuant to the Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The Board of Directors of the Company appointed Mr. Prem Sethi(Non-executive Director) as chairperson of the Board of Directors of the company in theBoard Meeting held on 30/05/2019.
Pursuant to Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015 mandate that the Board shall monitor and review the Board evaluationframework. The framework include the evaluation of the Board of Directors on variousparameters the Board has carried out an evaluation of its own performance the directorsindividually as well as the evaluation of the Working of its Audit Committee Nominationand Remuneration Committees and Stakeholder Relationship Committee. The Board specifiedthe manner in which the evaluation has been carried out and explained in the CorporateGovernance Report.
DIRECTOR APPOINTMENT AND REMUNERATION POLICY
Thepolicyondirectors'appointmentandremunerationincludingcriteriafordeterminingqualificationpositive attribute and independence of a director and other relevant matter as requiredas per section 178(3) of Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015. The Board has on the recommendation of the Nomination andRemuneration Committee framed a policy for selection and appointment of Directors SeniorManagement and their remuneration. The Remuneration policy has posted on website of theCompany at www.sangalpapers.com you may find. The Directors' appointment and RemunerationPolicy also stated in Corporate Governance Report.
DECLARATION BY THE INDEPENDENT DIRECTORS
The Company received necessary declaration from each independent director under section149(7) of Companies Act 2013 that Mr. Prem Sethi (Independent Director) and Mrs. GeetaGupta (Independent Director) meets the criteria of independency laid down in section149(6) of Companies Act 2013 and Regulation 25 of SEBI (Listing Obligations andDisclosure Requirements) Regulation 2015.
Pursuant to the Regulation 16(1)(b) of SEBI (Listing Obligations and DisclosureRequirements) Regulation 2015 and based on the confirmation/affirmation received from Mr.Prem Sethi (Independent
Director) and Mrs. Geeta Gupta (Independent Director) that they were not aware of anycircumstances that are contrary to the declarations submitted by Independent Directorsthe Board acknowledges the veracity of such confirmation and takes on record the same.
FAMILIARIZATION PROGRAM AND INDEPENDENT DIRECTORS MEETING
During the relevant financial year as per company policy the Independent Directors ofthe company has conducted a separate meeting of Independent Directors of the company on30/03/2019. The meeting conducted for the purpose of evaluation of the Board of Directorsas whole and individually and also conducted the familiarization program for IndependentDirectors to introduction to the Board and to attend an orientation program. The detailsof training and familiarization program are provided in the corporate governance reportand also available on company's website www.sangalpapers.com.
We understand the value and importance of balanced and diverse board in the company. Wealways support a better/best board in the company. The company believes that a trulydiverse board will changes in thoughts perspective knowledge skills industryexperience cultural and geographical background age gender that will help us retain ourcompetitive advantage.
MEETINGS OF BOARD OF DIRECTORS AND COMMITTEE
During the financial year 2018-2019 Seven (7) Board of Directors Meetings Four (4)Audit Committee Meetings Four (4) Nomination and Remuneration Committee Meetings and Four(4) Stakeholder Relationship Committee Meetings were convened and held. The details ofwhich given in the Corporate Governance Report. The maximum interval between any twomeeting of the Board of Directors and the Audit Committee did not exceed 120 days asprescribed under the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
AUDIT COMMITTEE RECOMMENDATIONS
During the year all the recommendations of Audit Committee were reviews and approvedby the Board of Directors if any.
MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of the report.
CHANGE IN THE NATURE OF BUSINESS
The company engaged in single segment i.e. manufacturing of paper the companyhas not undergone any changes in the nature of the business during the financial year.
THE DETAILS OF SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and the company's operation in future.
DIRECTORS' RESPONSIBILITY STATEMENT
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 to be followed by the company andthat such internal financial control are adequate and are operating effectively;
(f) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively;
RELATED PARTY TRANSACTIONS
Sangal Papers Limited has formulated a policy on Related Party Transaction. The same isavailable on the company website (www.sangalpapers.com). All the Related PartyTransactions are placed before the audit committee for its review on quarterly basic. Therelated party transactions have already been disclosed in the financial statements. Notransaction of material nature has been entered into by the company during the year whichmay 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.
All transactions with related party falls under the scope of Related Party Transactionsare complied with the provisions of section 188(1) of the Companies Act 2013. Informationon transactions with related parties pursuant to section 134(3)(h)of the Act read withrule 8(2) of the Companies (Accounts) Rules 2014 are given in Annexure II in Form AOC-2and forms part of this report.
SUBSIDIARY COMPANIES JOINT VENTURE AND ASSOCIATE COMPANY
The company does not have any subsidiary joint venture and associate company duringthe relevant financial year 2018-2019.
CODE OF CONDUCT
The Board of Directors has approved a Code of Conduct and 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 "Code ofBusiness Conduct" which forms and Appendix to the Code and same is available on thecompany website (www.sangalpapers.com).
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 and in dealing withstakeholders. The code gives guidance through examples on the expected behaviour from anemployee 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 was given appropriate training in this regard.
MECHANISM/WHISTLE BLOWER POLICY
Pursuant to Section 177(9) of the Companies Act 2013 and Regulation 22 of SEBI(Listing Obligations and Disclosure Requirements) Regulation 2015 the company hasformulated a Whistle Blower Policy to establish a vigil mechanism for directors andemployees of the company. The purpose and objective of this Policy is to provide aframework to promote responsible and secure whistle blowing. It protects the employeeswishing to raise a concern about serious irregularities within the company. The details ofthe Whistle Blower Policy are explained in the Corporate Governance Report and also postedon the website of the company (www.sangalpapers.com).
Pursuant to the provisions of Section 139 of the Companies Act 2013 the rules madethere under and that they are not disqualified in terms of Section 141 of the Act and SEBI(Listing Obligations and Disclosure Requirements) Regulation 2015 M/s Raj Sandhya &Co. Chartered Accountants (Registration No.:002011C) Muzaffarnagar has been appointed asStatutory Auditors of the Company for a period Five (5) years at the annual generalmeeting held on 29th September 2017 subject to ratification of theirappointment by the members at every general meeting. The Auditors have confirmed thattheir appointment would be in accordance with the Section 139 of the Companies Act 2013and the rules made there under and that they are not disqualified in terms of Section 141of the Act. The shareholders at the ensuing annual general meeting will considerratification of the appointment of the Statutory Auditor of the company for the financialyear 2019-2020. As required under provisions of Section 139 Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulation 2015 the Auditors haveconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.
Pursuant to the provision of the Section 148 (3) of Companies Act 2013 read with rule6 (2) of Companies (Cost Records and Audit) Amendment Rule 2014 (include any modificationor reenactment thereof if any) and other applicable law rules or regulations if any.Pursuant to Section 148 of the Companies Act 2013 read with the Rule 6 (2) Companies(Cost Records and Audit) Amendment Rules 2014 (include any modification or reenactment ifany) the company appointed Mr. S. R. Kapur Cost Accountant (Membership No.:- M-4926)Add.: 278 Pakka Bagh Holi Chock Khatauli Muzaffarnagar UP-251201 for the financialyear ended 2020 with such remuneration and other term and condition as may be agree by theBoard of Directors of the Company.
Pursuant to provision of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. The Board of Directorsappointed Mr. D.K. Gupta Proprietor of M/s D. K. Gupta & Co. Practicing CompanySecretary (Membership Number: 5226 Certificate of Practice Number: 3599) to undertakethe Secretarial Audit of the company for the financial year 2019-2020. The SecretarialAudit Report is annexed herewith as part of Boards' report.
AUDITOR'S REPORT/ SECRETARIAL AUDIT REPORT:
The observation made in the Auditors' Report read together with relevant notes thereonhave been explained in notes on account and hence do not call for any further commentsunder Section 134 of the Companies Act 2013. As required under Section 204 (1) of theCompanies Act 2013 the company has obtained a secretarial audit report. Observations ifany made there are self explanatory and read with Notes on Account of Financial Statement.
PREVENTION OF INSIDER TRADING:
In January 2015 SEBI notified the SEBI (Prohibition of Insider Trading) Regulations2015 SEBI (Prohibition of Insider Trading) (Amendment) Regulations 2018 and SEBI(Prohibition of Insider Trading) (Amendment) Regulations 2019. Pursuant thereto thecompany has formulated and adopted a new Code of practice for fair disclosure ofunpublished price sensitive information and Code of Conduct. The code requirespre-clearance for dealing in the Company's shares and prohibits the purchase or sale ofcompany shares by the directors and the designated employees while in possession ofunpublished price sensitive information in relation to the company and during the periodwhen the Trading Window is closed. The board is responsible for implementation of thecode. All directors and the designated employees have confirmed compliance with the code.
Pursuant to the Section 134 (3) of the Companies Act 2013 Annual Return withnecessary annexure of the company for the year 2018-2019 also available on company'swebsite www.sangalpapers.com.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return as provided under Section92(3) of the Companies Act 2013 in prescribed form MGT -9 is annexed herewith alsoavailable on company's website www.sangalpapers.com/financials.
PARTICULARS OF EMPLOYEES
The provisions of Rule 5 (2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 (include any modification or amendment thereof ifany) requiring particulars of the employees in receipt of remuneration in excess of RupeesOne Crore and Two Lakh per year and Rupees Eight Lakh Fifty Thousand per month only to bedisclosed in the Report of Board of Directors are not applicable to the Company as none ofthe employees was in receipt of remuneration in excess of Rupees One Crore and Two Lakhper year and Rupees Eight Lakh Fifty Thousand per month during the financial year2018-2019.
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 -III ".
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.
| || |
For and on behalf of the Board of Directors
| ||Sd/- ||Sd/- |
|Date: 30/05/2019 ||Amit Sangal ||Himanshu Sangal |
|Place: Meerut ||Whole Time Director/CFO ||Managing Director |
| ||DIN-00091486 ||DIN -00091324 |
ANNEXURE "II" TO BOARD'S REPORT
Form No. AOC-2
(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arm's length transactions under third provisothereto:
1. Details of contracts or arrangements or transactions not at arm's length basis:
The company has not entered into any contract/arrangement/transaction with its RelatedParties which is not in ordinary course of business or at arm's length during Financialyear 2018-19. The company has laid down policies and processes/procedures so as to ensurecompliance to the subject section in the Companies Act 2013 and the corresponding rules.In addition the process goes through internal and external checking followed byquarterly reporting to the Audit Committee.
(a) Name(s) of the related party and nature of relationship : Not applicable
(b) Nature of contracts/arrangements/transactions : Not applicable
(c) Duration of the contracts / arrangements/transactions : Not applicable
(d) Salient terms of the contracts or arrangements or transactions including the valueif any : Not applicable
(e) Justification for entering into such contracts or arrangements or transactions :Not applicable
(f) Date(s) of approval by the Board : Not applicable
(g) Amount paid as advances if any : Not applicable
(h) Date on which the special resolution was passed in general meeting as requiredunder first proviso to Section 188 : Not applicable
2. Details of material contracts or arrangement or transactions at arm's length basis:
|S. No. ||Name of related party ||Nature of relationship ||Nature of contracts/ transaction ||Duration of contract/ transactions ||Salient terms of the contracts or transactions including value (Rs. In Lakhs) ||Amount paid as advances if any |
|1. ||Mr. Tanmay Sangal* (DIN No.:01297057) ||Son of MD (Mr. Himanshu Sangal) ||Salary for holding office or place of profit ||Regular service ||30 ||NIL |
|2. ||Mr. Vinayak Sangal* (DIN No.: 06833351) ||Son of WTD (Mr. Amit Sangal) ||Salary for holding office or place of profit ||Regular service ||30 ||NIL |
|3. ||Mrs. Ishita Niyogi ||Wife of Mr. Tanmay Sangal Director ||Salary for holding office or place of profit ||Regular service ||9.60 ||NIL |
| || |
For and on behalf of the Board of Directors
| ||Sd/- ||Sd/- |
|Date: 30/05/2019 ||Amit Sangal ||Himanshu Sangal |
|Place: Meerut ||Whole Time Director/CFO ||Managing Director |
| ||DIN-00091486 ||DIN - 00091324 |
ANNEXURE "III" TO BOARD'S REPORT
Pursuant to Section 197 (3) of the Companies Act 2013 read with rule 5 of theCompanies (Appointment & Remuneration of Managerial Personnel)Rules 2014
The Sangal Paper Limited is paper manufacturing company. The remuneration andperquisites provided to our employees including management of the company are on par withindustries benchmarks. The Board of Directors and Nomination and Remuneration Committeecontinuously reviewing the compensation of our MD WTD/CFO and other KMP to align both theshort term and long term business objectives of the company and to link with theperformance of the directors and KMPs. The details of remuneration to KMP including MD andWTD/CFO in the below table:
a. Remuneration of Managing Director Whole Time Director/Chief Financial Officer(CFO):
|Name of director ||Directors identification number (DIN) ||Designation ||Remuneration in the year 2019 (Rs. In Lakhs) ||Remuneration in the year 2018 (Rs. In Lakhs) ||% increase of remuneration in fiscal 2019 as compared to 2018* ||The ratio of the remuneration of each director to the median of remuneration of employees of the company for the financial year 2018-2019 |
|Himanshu Sangal ||00091324 ||Managing Director ||80 ||60 ||33.33% ||83.37:1 |
|Amit Sangal ||00091486 ||Whole Time Director/CFO ||80 ||60 ||33.33% ||83.37:1 |
*includes benefits provided by the company to concern MD and WTD during the financialyear.
1. The details in the table are on accrual basis.
2. Remuneration provided to MD and WTD recommended by the Nomination and RemunerationCommittee and approved by Board of Directors.
3. Remuneration calculation of MD and WTD/CFO as per Schedule V of Companies Act 2013and others applicable rules and regulation. If any.
b. Increase in remuneration of other Key Managerial Personnel (KMP):
|Name of KMP ||Title ||Remuneration in the year 2019 (Rs. In Lakhs) ||Remuneration in the year 2018 (Rs. In Lakhs) ||% increase of remuneration in fiscal 2019 as compared to 2018* |
|Shivam Sharma ||Company Secretary cum Compliance officer ||3.91 ||3.38 ||15.68% |
The details in the above table are on accrual basis. For the purpose of comparison forboth the financial year 2019 and financial year 2018 are given for the full year.
c. Remuneration of Directors (Non-executive) other than MDWTD and KMP :
|Name of Director ||Directors Identification Number (DIN) ||Designation ||Remuneration in the year 2019 (Rs. In Lakhs) ||Remuneration in the year 2018 (Rs. In Lakhs) ||% increase of remuneration in fiscal 2019 as compared to 2018 ||The ratio of the remuneration of each director to the median of remuneration of employees of the company for the financial year 2018-2019 |
|Tanmay Sangal* ||01297057 ||Director ||NIL ||NIL ||NA ||NA |
|Vinayak Sangal* ||06833351 ||Director ||NIL ||NIL ||NA ||NA |
|Prem Sethi ||07146425 ||Director ||NIL ||NIL ||NA ||NA |
|Geeta Gupta ||00095939 ||Director ||NIL ||NIL ||NA ||NA |
The details in the above table are on accrual basis for the purpose of comparison forboth the financial year 2019 and financial year 2018 are given for the full year.
*Mr. Tanmay Sangal President Marketing/Director and Mr. Vinayak Sangal PresidentOperation/ Director (Non-Executive Director) of the company. They are receiving salary inthe capacity of employee not in capacity of director since 2017.
d. Information as per Rule 5(2) of Chapter XIII the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.
Top 10 employee in terms of remuneration draw during the year :
|Employee Name ||Designation ||Educational Qualification ||Experience (in years) ||Remuneration in 2019 (in Lakhs) ||Previous employment and designation ||Date of Commencement of employment ||Date of Birth/Age as on 01.01.19 ||No of share held ||Relationship with Director |
|Tanmay Sangal ||President Marketing ||MBA ||10 ||30 ||Delliote/ Business Valuation Analysis ||01/01/2017 ||16/10/1985/34 ||43275 ||Son of Mr. Himanshu Sangal MD |
|Vinayak Sangal ||President Marketing ||B.tech. MBA ||4.5 ||30 ||Godrej boyce Manufacturing co. ltd./ Purchasing Manager ||01/04/2017 ||21/11/1991/28 ||10489 ||Son of Mr. Amit Sangal WTD/ CFO |
|Praveen Agarwal ||VP Plant ||B.E. P.G. ||37 ||12 ||Ruchi Paper Mill/GM ||03/04/2017 ||15/05/1960/59 ||NA ||NA |
|Arvind Sharma ||GM Plant ||B.O.E. ||17 ||10.20 ||Shree Lakshmi Cotsyn Ltd./ DGM Power Plant ||03/09/2016 ||01/07/1979/40 ||NA ||NA |
|Ishita Niyogi ||President Export ||MBA ||10 ||9.60 ||Google/ Account Manager ||01/11/2017 ||05/10/1986/33 ||5034 ||Wife of Mr. Tanmay Sangal |
|Sanjay Kumar Agarwal ||GM Finance ||M.Com L.LB. CA ||35 ||6.60 ||Anand Triplex Board Ltd./GM Finance ||01/08/2009 ||01/07/1966/53 ||60 ||NA |
|Rakesh Paspola ||Sales Manager ||B.A. ||25 ||6.64 ||NA ||01/06/2014 ||20/06/1968/51 ||NA ||NA |
|M.C. Rana ||Production Manager ||B.Sc. B.E. ||30 ||6.30 ||NA ||01/01/2017 ||01/07/1959/60 ||NA ||NA |
|M.L. Gupta ||Accounts Manager ||M.A. ||41 ||5.45 ||NA ||20/09/2012 ||30/03/1955/64 ||NA ||NA |
|Kesho Singh ||Electric Manager ||M.Tech. ||36 ||5.90 ||NA ||01/07/2008 ||12/01/1959/60 ||NA ||NA |
e. The percentage decrease/increase in the median remuneration of employee in thefinancial year: (0.81%).
Note : During the year median remuneration of employee decrease due to the number ofemployee of the financial year 2018-2019 is more than number of employee of the financialyear 2017-2018.
f. The number of permanent employees on the rolls of company as on 31stMarch 2019: 280 for the year 2018-2019.
The number of permanent employees on the rolls of company as on 31st March2018: 204 for the year 2017-2018.
g. Average percentage increase in the salaries of employees other than the managerialpersonnel in the financial year 2018-2019 was 7% (It is estimate basic) and increase inthe managerial remuneration for the same financial year was 33.33%. However the companyis paying fixed remuneration to the individuals based on the responsibility and positionthe Company is paying remuneration to the Key Managerial Persons (KMP) as per skills andexperience. Increment in Managerial remuneration of the Key Managerial Persons (KMP) andMD and WTD as per Managerial Remuneration Policy.
h. Key parameter for any variable component of remuneration availed by thedirector-Variance in managerial remuneration as per Managerial Remuneration Policy.
i. We affirm that the remuneration paid to the Directors Key Managerial Personnel andemployees is as per the remuneration policy of the Company.
j. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current financial year and previous financial year and percentageincrease or decrease in the market quotations of the shares of the Company in comparisonto 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 (' in Lakh) |
|31.03.2018 ||1307260 ||93.35 ||19.91 ||4.69 ||1220.33 |
|31.03.2019 ||1307260 ||147.1 ||46.95 ||3.13 ||1922.98 |
|Increase/Decrease ||- ||53.75 ||27.04 ||(1.56) ||702.65 |
|% of Increase/Decrease ||- ||57.58% ||135.81% ||(33.26) ||57.58% |
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 2019 the market quotation of the company's share price(closing price) was Rs. 147.1.
k. Average percentile increase already made in the salaries of employees other than themanagerial 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 one Whole Time Director cum Chief FinancialOfficer (CFO) two non-executive directors and two Independent Directors. Increment in theremuneration of the Executive Director for the respective period as per Managerial Policyand mention in here in below.
l. Comparison of the each remuneration of the KMP against the performance of thecompany:
|Name ||Remuneration of KMP and directors for the period 2018-2019 (Rs. In Lakhs) ||Performance of the company PAT as on 31stMarch 2019 (' In Lakh) |
|Himanshu Sangal Managing Director ||80 ||613.64 |
|Amit Sangal Whole Time Director cum CFO ||80 ||613.64 |
|Tanmay Sangal President Marketing/ Director ||NIL ||613.64 |
|Vinayak Sangal President Operation/Director ||NIL ||613.64 |
|Shivam Sharma Company Secretary ||3.91 ||613.64 |
Mr. Tanmay Sangal President Marketing and Mr. Vinayak Sangal President Operation isreceiving remuneration in the capacity Place of Profit referred to AOC-2 for disclosureregarding this.
m. The key parameters for any variable component of remuneration availed by thedirectors: There is no variable component in the remuneration of Executive Directors ofthe Company.
n. If remuneration is as per the remuneration policy of the Company: Yes
o. The ratio of the remuneration of the highest paid director to that of the employeewho are not directors but receive remuneration in excess of the highest paid directorduring the year : NA
| || |
For and on behalf of the Board of Directors
| ||Sd/- ||Sd/- |
|Date: 30/05/2019 ||Amit Sangal ||Himanshu Sangal |
|Place: Meerut ||Whole Time Director/CFO ||Managing Director |
| ||DIN- 00091486 ||DIN - 00091324 |