DIRECTORS' REPORT To The Members, The Directors are pleased to present their 30th Report along with the Audited Accounts for the year ended 31st March, 2015. Corporate overview Rama Paper Mills Limited ("Your Company") is a leading Indian Newsprint, Duplex Board, Tissue manufacturing Company. Overview of The Economy As per the latest GDP growth estimates, Indian economy grew by 7.4% in FY15 compared to 6.9% in FY14, mostly driven by improved economic fundamentals and revision of GDP methodology calculation. Even inflation showed signs of moderation, a welcome sign - wholesale price and consumer price inflation declined to 4.2% and 7.4% respectively, compared with last year's 6.3% and10.1%. Reduced inflation falling crude oil prices, stable Rupee, Improved purchasing power and consumer spending, hogher capital inflows supported by the Government policy reforms have already put India on an accelerating growth track and improved the business outlook. The Government envisages GDP growth to accelerate to 8% in FY16 driven by strengthening macroeconomics fundamentals and implementation of policy reforms recently announced. Reforms like e-auction of coal mines and telecom, FDI hike in insurance, speedier regulatory approvals etc. will be critical growth enablers to de-bottleneck stalled projects, improve the investment outlook and the ease of doing business in the country. Reforms currently underway such as GST implementation, Amendments on Land acquisition bill, Labour reforms, etc, are expected to provide the requisite thrust for growth in the medium-term. Operations During the year under review, your Company has suffered the Net Loss of Rs. 826.36 Lacs against the Net Loss of Rs.27.94 Lacs in the previous year, though the turnover has reduced to Rs. 12348.02 Crore against the previous year turnover of Rs. 177.95 Crore. The loss has resulted mainly due to depressed market conditions in paper industry, coupled with increase in raw material cost. Moreover the increased capacity also could not be fully utilized. Dividend Since the Company incurred Net Loss during the financial year, your Directors regret their inability to recommend any dividend. Directors Shri Gyanveer Singh will retire by rotation and being eligible, offers himself for re-appointment. During the year under review, the Directors of your Company proposes the appointment of Smt. Amarjeet Sandhu as independent director of the Company pursuant to the provisions of Sections 149, 150 and 152 of the Companies Act, 2013. The Directors of your Company feels that her continued support in the Board of the Company would be in the best interest of the Company as well as its stakeholders and therefore recommend her appointment as the Independent Director of the Company. They have also given the certificate of independence as required under the Section 149(7) of the Companies Act, 2013. During the year under review, Smt. Amarjeet Sandhu was also appointed as the additional director on the Board of Directors of the Company and offers himself for re-appointment. Board Evaluation Pursuant to provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board's functioning, composition of the Board and its committees, culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the independent Directors was completed. The performance evaluation of the Chairman and non independent Directors was carried out by the independent Directors. The Board of Directors expressed their satisfaction with the evaluation process. Number of Board Meetings The details of the number of meetings of the Board held during the Financial Year 2014-15 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 Section 186 of the companies Act, 2013 are given in the notes of financial statements. POLICIES &DISCLOSURES VIGIL MECHANISM The Vigil Mechanism/Whistle blower Policy of the company provides that protected disclosures can be made by a whistle blower through an email to the Chairman of the audit committee. The Whistle Blower Policy can be accessed on the Company's Website (www.ramapaper.com). This dosclosure also forms part of the Corporate Governance Report under Clause 49 of the Listing Agreement. Remuneration and Nomination policy The nomination and remuneration committee has recommended to the Board: a) A policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. .The details of this policy are attached as Annexure tp this report and b) Further, Policy for selection criteria of Directors and Senior Management and Criteria for determining qualifications, positive attributes and director independence is also attached as Annexure to this Report. The Remuneration and Nomination Policy have also been 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, every company having net worth of Rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year 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 form Corporate Social Responsibility Committee and Corporate Social Responsibility Policy for the 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 the company, their roles and responsibilities in the company, business model of the company and 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, operations and functions of our Company, the executive directors make presentations to the inductees about the Company's organization structure, finance, human resources, facilities and risk management. Further, at the time of appointment of an independent director, the Company issues a formal letter of appointment outlining his/her role, function, duties and responsibilities as 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, there is no employee in the company, which draws the remuneration in excess of the limits set out in the said rules. Disclosures pertaining to remuneration and other details of directors & KMP as required 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 as Annexure to this Report. Related Party Transaction All transactions entered with Related parties for the year under review were on arm's length basis and pursuant to Section 188 of the Companies Act 2013, thus disclosure in Form AOC 2 is annexed with Annual Report. The Company has developed a Related Party transactions framework through standard operating procedure for the purpose of identification and monitoring of such transaction. All Related party transactions are placed before the Audit Committee as also to the Board for approval. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company. The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company (www.ramapaper.com). Significant and Material Order Passed By the Regulators or Court There are no Significant and material orders passed by the Regulator/Courts that would impact 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 exchange earnings and outgo, as required to be disclosed under Section 134 (3) (m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 are given hereunder: Conservation of Energy i.) Steps taken or impact on conservation of energy: Energy conservation efforts are ongoing activities. During the year under review further efforts were made to ensure optimum utilization of electricity. ii) Steps taken by the company for utilizing alternate sources of energy: The Company has shifted its energy generation from husk basis to pet coke basis, which has resultant effect in the Cost of Energy. iii) The Capital investment on energy conservation equipments: During the year under review, the Company has made an capex of Rs. 50 Lacs for shifting the husk based power plant to pet coke basis. Technology Absorption, Adaption & Innovation and Research & Development No research & development or technical absorption or adaption & innovation taken place in the company during the Financial Year 2014 - 2015, the details as per rule 8(3) of The companies (Accounts) Rules 2014 are as follows: Efforts made towards technology absorption: - Nil ii) Benefits derived like product improvement, cost reduction, product development or import substitution: Nil iii) In case of imported technology (imported during the last 3 years reckoned from the beginning 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 does not deal in Foreign Exchange, therefore the particulars relating to Foreign Exchange Earnings and Outgo are not applicable to your Company. Foreign Exchange Earnings: Nil Foreign Exchange Outgo: Nil Corporate Governance and Management Discussion and Analysis Reports The Corporate Governance and Management Discussion and Analysis Reports, which form an integral part of this report, are set out as separate annexure to this report together with the Certificate from the Auditors of the Company confirming compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the listing agreement with the Stock Exchange. Directors Responsibility Statement To the Best knowledge and belief and accordingly to the information and explanation obtained by them, your Directors make the following statement Pursuant to Section 134(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, 2015 the applicable accounting standards have been followed along with proper explanations relating to material departure. b) Appropriate accounting policies have been selected and applied consistently and judgments and estimates have been made 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 of the Profit of the Company for the year ended 31st March, 2015. c) Proper and sufficient care has been taken for the maintenance of 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) The financial statements have been prepared on a going concern basis. e) That the Director had laid down internal financial controls to be followed by Company and such internal Controls are adequate and were operating effectively; and f) That the Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. Statutory Auditors and Auditors' Report M/S Shiam & Co., Chartered Accountants, Statutory Auditors of your Company, retire at the forthcoming Annual General Meeting and are eligible for reappointment. They have confirmed their eligibility for reappointment under the provisions of Section 139(1) of the Companies Act, 2013. The Boards recommend their appointment. The report of the Auditors is self -explanatory, therefore does not require any specific comments. Cost Audit As per requirement of Central Government and pursuant to section148 of Companies Act 2013 read with the Companies (Cost records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of Cost records relating to the Company. The Board of Directors on the recommendation of the Audit Committee has appointed M/S. Jain Sharma and Associates, Cost Accountants, as the Cost Auditor of the Company for the Financial Year 2015-16. As requires under the Companies Act 2013, a resolution seeking member's approval for the remuneration payable to the Cost Auditor forms part of the Notice convening Annual General Meeting. Secretarial Audit Pursuant to the provisions of the Section 204 of the Companies act 2013 and rules made thereunder, the Company has appointed M/s. S.Jha & Associates, Company Secretaries to undertake the secretarial Audit of the Company. The secretarial Audit Report is included as Annexure and form an integral part of this report. Internal Control System And Their Adequacy Your Company has an effective internal Control and risk mitigation system, which are constantly assessed risk mitigation system, which are constantly assessed and strengthened with new/revised standards operating procedures. The Company's internal Control System is commensurate with its size, scale and complexities of its operations. The Audit Committee of the Board of directors actively reviews the adequacy and effectiveness of the internal control system and suggests improvements to the strengthen the same. The company has a robust Management information system, which is an integral part of the control mechanism. The Audit Committee of the Board of Directors, Statuary Auditors and the Business heads are 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 Audit observation and corrective actions taken by the management are presented to Audit Committee of the Board. To maintain its objectivity and independence, the internal Audit function reports to the Chairman of the Audit Committee. Risk Management During the year under review, the senior officials of the Company performs the task of risk management to identify and evaluate elements of business risk. Consequently a revised robust Business Risk Management framework is in place. The risk management framework defines the risk management approach of the Company and includes periodic review of such risk and also documentation, mitigation control and reporting mechanism of such Risk. Material Changes and Commitments after the date of close of Financial Year 2014 - 15 There is no material changes and commitment affecting the financial position of company after the close of financial year 2014-2015 till the date of report. DETAILS OF SUBSIDIARY COMPANIES, JOINT VENTURES AND ASSOCIATE COMPANIES, AND THEIR FINANCIAL POSITION There is no subsidiary, Associate and joint venture of the company and further there are no companies, which have become or ceased to be the subsidiary and joint venture of the company during the year. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in Form MGT-9, as required under Section 92 of Companies Act, 2013 are included in this report as Annexure and forms an integral part of this report. ACKNOWLEDGEMENT Your Directors take this opportunity to place on record their appreciation for the shareholders, bankers and other business associates for their forbearance, understanding and support to the Company. They also wish to place on record their great appreciation of the commitment, sense of involvement and dedication exhibited by each staff member in the overall development, growth and prosperity of the company. FOR AND ON BEHALF OF THE BOARD OF RAMA PAPER MILLS LTD. ARUN GOEL EXECUTIVE DIRECTOR PRAMOD AGARWAL MANAGING DIRECTOR Date: 13th August, 2015 Place: Kiratpur |