| The Directors have pleasure in presenting their 35th Annual Report and
Audited Accounts for the financial year ended 31st March 2015.
(Rs. in Lakhs)
FINANCIAL RESULTS: 2014-2015 2013-2014
Turnover during the year 4151.08 3422.54
Profits/(Loss) before Depreciation & Tax 265.10 56.53
Less: Depreciation 33.04 31.22
Profits/(Loss) before Tax 232.06 25.31
Provision for Tax
: Current Tax -- --
: Deferred Tax (2.49) 1.64
Profit/(Loss) after tax 229.57 26.95
Add/(Less) past Year Adjustment 1.84 --
Less: Depreciation(Assets Written off) (5.27) --
Profit/(Loss) brought forward (390.46) (417.41)
Balance carried forward (164.32) (390.46)
OPERATIONS:
The sales turnover of the Company for the year was Rs.4151.08 lakhs as
compared to previous year Rs.3422.54 lakhs. Production for the year was
13372.691 M.T as compared to previous year 11898.068 MT.
The Sales turnover of the company has been increased by 21.29% as
compared to previous year and production of the Company has been
increased by 12.39% as compared to previous year.
MANAGEMENT DISCUSSION AND ANALYSIS
PERFORMANCE REVIEW:
In the competitive market, the Company was able to achieve Sales and
Other Income, in monetary terms for the year to Rs. 41.51 crores as
compared to Rs. 34.23 crores in the previous year and the Income was
Rs. 0.10 crores as compared to Rs. 0.06 crores in the previous year.
The profitability of the Company has been increased as compared to
previous year inspire of slackness of sale of
writing,printing&newsprint paper.
INDUSTRY OVERVIEW:
The Indian paper industry is highly fragmented. According to estimates,
the total number of mills vary from anywhere between 500 to over 1000.
The top five producers account for 15 per cent of the total paper
capacity in the country. The industry is highly diverse, technical and
capital intensive. Further norms relating to environmental pollution
such as chlorine free operations and tighter effluent
treatment/discharge parameters etc. have restricted rapid expansion of
paper industry's capacity. Paper consumption is an indicator of the
economic and literacy status of any country. While India accounts for
nearly 15% of the world population, it consumes only1% of the world
paper production. India's per capita consumption of paper at about 7
kgs. is very low as compared to the world average of over 50 kgs. The
impact of just 1 kg. Increase in per capita consumption would lead to
increase in demand by 1.1 million M.T. of paper. Paper demand is
inextricably linked to economic growth, industrial production,
advertisement expenditure, expenditure on education etc. while
industrial paper demand is driven by industrial output and packaging
industry growth etc. printing and writing paper demand is determined by
public spending on education, expenditure on publicity and general
literacy levels. The growing demand of paper has encouraged a gradual
improvement in capacity utilizations. Stringent pollution control norms
will act as a determent to smaller players from adding capacities as it
would require significant investment to upgrade the existing facility
to meet these norms. Though currently there is no law in force, the
company that the Indian paper industry will be compelled to eliminate
the use of chlorine for bleaching in the next few years.
The paper industry in India is dependent on three parameters:
1. The literacy level (which is dependent on government expenditure on
education).
2. The GDP growth rates India has witnessed phenomenal development in
the field of education - both in quantitative and qualitative terms,
since independence. However, the national goals of universal
elementary education and total eradication of illiteracy still remain
elusive. The Government is committed to achieving these national goals
and has been steadily increasing the budgetary allocation for
education. The Country has also made significant strides in higher and
technical education. With the Indian economy on a growth path and the
government increasing emphasis on the education the future of the
Indian paper industry looks positive with immense growth potential.
3. The domestic demand of paper has been forecasted to be 10 million
M.T. by 2010 and over 14 Million M.T.by the year 2020. At present the
demand of the paper is witnessing a healthy growth of 6.6%(app.) as
compared to 5 percent (pp.) in the past. The Indian paper industry is
highly fragmented with a large number of organized and unorganized
players operating in the market. Some of the key players in the
industry are Ballarpur Industries, ITC, Sirpur Paper Mills, West Coast
Paper Mills, J K Paper, Century Paper Mills, Tamil Nadu Newsprint,
Hindustan Paper Corporation Limited, Rama Newsprint & Papers Limited
etc. Indian paper industry needs the following to be globally more
competitive:
- Sustained availability of good quality of raw materials (forest
based) and bulk import of waste paper to supplement the raw materials
supplies.
- Adequate modernization of the manufacturing facilities.
- Improvement of infrastructure.
- Quality improvements and reduction in cost of production.
- Import policy conducive for import of material, equipment,
instruments, raw materials and technologies.
- Achieving Economies of Scale.
However, the Prospects of paper industry appear positive with the
existing demand-supply gap, and the Government's focus on education at
every level. The further imposition of 1% Higher education Cess and
Education Cess of 2% introduced by the Government reflects the focus of
the Government towards Education in the Country. The above steps
initiated by the Government are expected to further fuel the demand for
paper.
Domestic paper prices are linked with international price. Hence, paper
prices in India are very much dependent on the international demand
supply situation for paper. However, recent stress on education sector
and growth in the retail sector has acted as a catalyst for demand in
packaging grade paper and therefore the fortunes of the Indian Paper
Industry is largely internally driven.
OUTLOOK FOR THE COMPANY:
The paper industry has been showing signs of increasing demand, and the
long-term outlook and growth prospects of the industry appear positive.
The rapid industrialization of the country during the previous five
years plans together with the increase in population escalated the
country's demand for paper and paperboards. The extent of usages of
paper & Packaging Industry in a country is generally taken as
parameters of its cultural and industrial activities. It plays an
increasingly important role in modern civilized society.
FACTORS AFFECTING OUR FUTURE RESULTS OF OPERATIONS:
Our future results of operations may potentially be affected by the
following factors:
- Competitive conditions in the industry.
- Growth of paper sector in India.
- Our ability to continuously operate and maintain our manufacturing
facilities optimally.
- Technological changes in the industry.
- Escalation in prices as well as the availability of raw materials.
- General economic and business conditions in India.
HUMAN RESOURCES:
The Company continues its focus on development of human resource. The
relations of the management with employees during the year continued to
be cordial. Learning and development has been strengthened to bring
value addition in the employee and to enhance Team Building leading
towards success. The Company focuses on providing the employees
motivating work environment and excellent career development
opportunities.
INTERNAL CONTROL SYSTEMS:
The Company has effective internal control systems for compliance of
laws, rules and regulations to safeguard the interest of the Company.
The Company maintains a system of internal controls designed to provide
reasonable assurance regarding the effectiveness and efficiency of
operations and for safeguarding the assets of the Company and for
ensuring appropriate recording and reporting of financial information
for ensuring reliability of financial controls and for ensuring
compliance of applicable laws and regulations. The internal audit
covers a wide variety of operational matters and ensures compliance
with specific standards with regard to reliability and suitability of
policies and procedures. The internal auditor system report to the top
management through Chairman & Managing Director and continuously
monitors adherence to lay down systems and policies through a
structured internal audit process. The systems are regularly reviewed
and modified for changes in operating and regulatory requirements. The
Audit Committee reviews the adequacy and effectiveness of internal
control systems and suggests improvement for strengthening the same
from time to time.
RISKS & CONCERNS:
The unprecedented variation in the prices of raw materials,
particularly Waste paper, Chemicals, consumables, coal and other
inputes for executing paper orders in uncertain market condition. The
unutilized capacity in the paper industry and intense competition
adversely impact product prices and margins.
The domestic demand supply scenario is expected to be balanced even
though a number of capacity expansions are expected to be implemented
by various companies the state over the next 1-2 years. In this
scenario, the player with lower production costs would be in a position
to utilize capacities optimally.
The products prices are subjected to changes with international price.
Sharp fall in price will affect the profitability of the unit.
Adverse climatic condition will affect the supply line of the product
which will affect the operation and profitability.
DIVIDEND:
The Company has incurred Profit during the financial year and no
dividend has been declared.
PUBLIC DEPOSITS:
During the year the company has not accepted any Fixed Deposits within
the meaning of Section 73 and 74 of the Companies Act, 2013.
EXPENDITURE ON R & D:
Research, Development and Improvement of Products are in built on going
activity within the existing manufacturing operation of the company.
Expenditure on R & D is not separately allocated and identified.
TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION:
The Company does not require any technical knowhow as the process of
manufacturing is conventional one. The Company does not have any
separate technical arrangement for running the unit.
COMPANIES (PARTICULARS OF EMPLOYEES OF GOVERNMENT COMPANIES & OTHER
COMPANIES), AMENDMENT RULE, 2011
There are no employees who have received remuneration more than Rs.
60,00,000/- (Rupees Sixty Lacs) p.a. being employed throughout the year
or more than Rs. 5,00,000/- (Rupees Five Lacs ) p.m. for part of the
year as specified under Section 134 of the Companies Act, 2013 read
with the (Particulars of Government Companies and Companies) Amendment
Rules, 2011.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
As required under companies (Disclosure of particulars in the Report of
Board of Directors) Rule, 1988 the necessary particulars regarding
conservation of energy are given in Annexure-1 to this report.
CORPORATE GOVERNANCE:
Pursuant to Clause 49 of the Listing Agreement, a report on Corporate
Governance and the Company Secretary Certificate in this regard form
part of this report and are annexed herewith in Annexure-II.
DIRECTORS
In accordance with the provision of the Companies Act, 2013 Sri. Anil
Kumar Gilra and Sri. Chava Suresh Babu retires by rotation at this
meeting, and being eligible, offer themselves for reappointment.
Pursuant to Section 149(1) of the Companies Act, 2013 the Board of
directors of the Company has on 13.02.2015 appointed woman director Ms.
Rekha Bhawsinka as Additional Director in the category of Non-executive
Independent Director. Ms. Rekha Bhawsinka shall hold office up to death
of the ensuing Annual General Meeting of the Company and, being
eligible, offer herself for re-appointment.
The Directors recommend their appointment/re-appointment at the ensuing
Annual General Meeting.
DIRECTOR' S RESPONSIBILITY STATEMENT:
Your Directors confirm:
Pursuant to the requirement under Section 134(3)(c) of the Companies
Act, 2013 with respect to Director's Responsibility Statement, it is
hereby confirmed that:
(a) In the preparation of the annual accounts for the financial year
ended 31st March, 2015, the applicable accounting standards had been
followed along with proper explanation relating to material departures;
(b) We have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the company as at 31st March 2015 and the Statement of Profit and Loss
of the company for that period;
(c) We have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;
(d) We have prepared the Annual Accounts on a going concern basis; and
(e) We have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
COST AUDITORS
Pursuant to the Provisions of Section 148 of the Companies Act, 2013
M/s. RAY, NAYAK & ASSOCIATES, Cost Accountants (F.R.N.No. 000241) were
appointed as the Cost Auditors to conduct audit of cost records for
manufacturing Paper and Paper Board for the financial year 2014-15.
The Cost Audit Report for the financial year ended 31st March, 2014 has
been filed with Ministry of Corporate Affairs.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the
financial year were on arm's length basis and were in the ordinary
course of company's business. The Company has not entered into any
contract, arrangement or transaction with any related party which could
be considered as material within the meaning of clause 49 of the
listing Agreement.
Related party transactions under Accounting Standard -AS18 are
disclosed in the notes to the financial statements.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return as on March 31, 2015 in the prescribed
form No. MGT-9, pursuant to section 92(3) of theCompanies Act, 2013 and
Rule 12(1) of the Companies (Management and Administration) Rules, 2014
is attached herewith as Rs, Annexure III' and forms part of this Report.
AUDITORS:
The Auditors of the Company M/s. B R R & Associates, retire at this
ensuing Annual General Meeting and being eligible, offer themselves for
reappointment as auditors of the Company. Your Directors recommend the
same for your consideration.
APPRECIATION:
Your Directors express their sincere thanks and place on record their
deep appreciation for the patronage extended by the shareholders,
valued customers, Bankers, Government authorities and the investors for
their continued support and confidence in the Company.
FOR & ON BEHALF OF BOARD OF DIRECTORS
PLACE: CUTTACK ANIL KUMAR GILRA
DATE: 12th August, 2015 WHOLETIME DIRECTOR |