DIRECTORS' REPORT TO THE MEMBERS Your Directors have pleasure in presenting their 35lh Annual Report with the Audited Accounts of the Company for the year ended 31st March, 2015. OPERATIONAL REVIEW The Company is moving fast to achieving its goal of maximization of shareholders wealth and objective of the Company. The Company does care to all stakeholder of the Company. Sangal Papers Ltd. focus in India and outside India over last few years has been to move closer to the ultimate consumers and position its products in a way that consumers can connect with and aspire for with this is in mind. The Company has maintained the world- wide standard in its products and engaged in to give sharpness to the Company's marketing strategies. Sangal Papers Ltd. has given its best performance in all subjects. During the year under review the Company has achieved a turnover of Rs. 950,642,374 as against previous figure of Rs. 1,016,428,644 posting approx 6.47% decline in sale. During the year under review PAT ( profit after tax) were Rs. 14,176,135 as compared to previous year figure of Rs. 697,117. However, the Profit after-tax has reduced by 9.69% in net profit after-tax as compared to previous year. SHARE CAPITAL The paid up equity capital as on 31" March 2015 was Rs. 13,072,600. During the year under review , the Company has no increased their capital. Further the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. DIVIDEND AND RESERVES DIVIDEND Board of Directors of the Company has opted to plough back the profits for future growth and do not recommend any Dividend for the financial year ending on 31/03/2015. RESERVES The balance of Reserve & Surplus Account of the Company as on 31/03/2015 was Rs. 179,251,603/-. FIXED DEPOSITS The Company has not accepted any fixed deposits and accordingly no amount was outstanding as on the date of the Balance Sheet. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS: The Company has not given any loans or guarantee covered under the provisions of section 186 of the Companies Act, 2013. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to Chairman of the Audit Committee of the Board & to the Chairman & Managing Director. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board. CORPORATE SOCIAL RESPONSIBILITY Since the Company has not fulfill the criteria in respect of constitution of Corporate Social Responsibility as specified in the Section 135 of the Companies Act 2013 read with Companies (Corporate Social Responsibility) Rules, 2014, therefore no CSR Committee is constituted. CONSERVATION OF ENERGY (a) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved. (b) No specific investment has been made in reduction in energy consumption. (c) As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately. (d) Since the Company does not fall under the list of Industries which should furnish information on conservation of energy, the question of furnishing the same does not arise. TECHNOLOGY ABSORPTION Company's products are manufactured by using In- house know how and no outside technology is being used for manufacturing activities. Therefore no technology absorption is required. The Company constantly strives for maintenance and improvement in quality of its products and entire Research & Development activities are directed to achieve the aforesaid goal. IMPORTS/ EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO A. IMPORTS Import of raw materials during the year amounted to Rs. 43,323,426 /- ( previous Year Rs. 29,810,263 /-) and Capital Goods & Spares of Rs. 2,012,079 /- (Previous Year Rs. 1,517,414 /-). B. EXPORTS Exports were mainly to Gulf and Asian Countries . Exports during the year increased to Rs. 38,910,936 /- from Rs. r 28,186,945 /-in the previous year. C. EARNINGS AND OUTGO Details are provided under the Point 23-26 of "Notes to Financial Statements" for the financial year ended as on 31" March 2015. INDUSTRIAL RELATIONS During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels. DIRECTORS Director Mr. Vinayak Sangal (DIN NO. 06833351) retire by rotation and, being eligible, offer himself for re- appointment. The Board of Directors recommend Mr. Vinayak Sangal for re- appointment. Mr. Prem Sethi (DIN NO. 07146425) & Mrs. Geeta Gupta (DIN NO. 00095939) were appointed as additional independent director w.e.f 4th March 2015. The Board now recommends the appointment of Mr. Prem Sethi & Mrs. Geeta Gupta as independent directors under section 149 of the Companies Act, 2013 and clause 49 of the listing agreement in the ensuing Annual General Meeting to hold office for three consecutive years i.e. up to the conclusion of the Annual General Meeting of the Company held in the calendar year 2018. All independent directors have given declarations that they meet criteria of independence as laid down under section 149 (6) of the Companies Act, 2013 and clause 49 of the Listing Agreement. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the Working of its Audit, Appointment & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. , REMUNERATION POLICY The Board has, on the recommendation of the Appointment & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The remuneration Policy is stated in Corporate Governance Report. MEETINGS Meetings During the year 12 (Twelve) Board Meetings and 4 (Four) Audit Committee Meetings were convened and held. The details of which given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed underthe Companies Act, 2013. 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 have been followed with no material departures; (b) They 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 review of the state of affairs of the Company at the end of the financial year and of the prof it of the Company for the same period; (c) They 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) They have prepared the annual accounts on a going concern basis; (e) They have laid down internal financial controls in the Company that are adequate and are operating effectively; and f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that these are adequat RELATED PARTY TRANSACTIONS The related party transactions have already been disclosed in the financial statements. No transaction of material nature has been entered into by the Company during the year which may have potential conflict with the interest of the Company. 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 the business. There are no materially significant related party transactions made by the company with promoters, key managerial personnel or other designated persons which may have potential conflict with interest of the Company at large. SUBSIDIARY COMPANIES The Company does not have any subsidiary. CODEOFCONDUCT The Board of Directors has approved a Code of Conduct which is applicable to the members of the Board and all employees in the course of day to day business operations of the company. The Company believes in " Zero Tolerance" against bribery, corruption and unethical dealings/behaviours of any form and the Board has laid down the directives to counter such acts. The code laid down by the Board is known as " Code of Business Conduct" which forms and Appendix to the Code. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behavior from an employee in a given situation and the reporting structure. All the Board members and the Senior Management personnel have confirmed compliances with the code. All management Staff were given appropriate training in this regard. VIGIL MECHANISM/ WHISTLE BLOWER POLICY Pursuant to Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has formulated a Whistle Blower Policy to establish a vigil mechanism for directors and employees of the Company. The purpose and objective of this Policy is to provide a framework to promote responsible and secure whistle blowing. It protects the employees wishing to raise a concern about serious irregularities within the Company. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company. AUDITORS M/s Shaim & Co. (Chartered Accountants), Muzaffarnagar (Registration No. 000030C), have been appointed as Statutory Auditors of the Company for a period 3 years at the last annual general meeting held on 30,h September, 2014 subject to ratification of their appointment by the members at every general meeting. The shareholders at the ensuing annual general meeting will consider ratification of the appointment of the Statutory Auditors. As required under Clause 41 of the Listing Agreement, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. COST AUDIT The Turnover of the Company during the financial year 2014-15 are not covered under cost audit and therefore, pursuant to Section 148 of the Companies Act, 2013 read with the Companies ( Cost Records and Audit) Amendment Rules, 2014, the Company is not required to appoint cost auditor for financial year 2015-16. SECRETARIAL AUDIT Pursuant to provision of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Mangerial Personnel) Rules, 2014 the Company has appointed D. K Gupta & Co., Practicing Company Secretary to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as " Annexure A". AUDITOR'S REPORT/ SECRETARIAL AUDIT REPORT The auditors have given clean report. There is no observation/adverse remark in the Auditors' Report. As required under section 204 (1) of the Companies Act, 2013, the Company has obtained a Secretarial Audit Report. EXTRACT OF ANNUAL RETURN The details forming part of the extract of the Annual Return in form MGT -9 is annexed herewith as" Annexure C". BUSINESS RISK MANAGEMENT Pursuant to the requirement of Clause 49 of the Listing Agreement, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. On the recommendation of the Risk Management Committee, the Board has adopted Risk management Policy, which outlines the programme implemented by the Company to ensure appropriate risk management within its system and culture. The Risk Management Policy is also posted on the website of the Company. The Company's risk management programme comprises of a series of processes, structures and guidelines which assist the Company to identify, assess, monitor and manage its business risks, including material changes to its risk profile. To achieve this, the Company has clearly defined the responsibility and authority of the Company's Board of Directors and of the Risk Management Committee to oversee and manage the risk management programme while conferring responsibility and authority on the Company's senior management to develop and maintain the risk management programme in light of the day to day needs of the Company. Regular communication and review of risk management practices provide the Company with important checks and balances to ensure the efficacy of its risk management programme. REPORTON FACTORY ACCIDENT On l" August 2014 at 6.00 A.M an Accident took place in our Factory Site Village - Bhainsa, 22 Km Stone, Meerut-Mawana Road, Meerut due to burst in Digestor. Accident caused substantial damage to the Building, Plant & Machinery as well as Stock and claimed two lifes. As per our estimated the total damage caused to the factory may be as much as Rs. 142 Lakhs. It was an unexpected mishap, but fortunately it is fully covered by insurance for the Building, Plant & Machinery, Stock damage and human loss. We have accordingly informed the Insurance company and submitted a formal claim. The Managing Director of the Company has announced all assistance to the families of the victims immediately. PARTICULARS OF EMPLOYEES The provisions of Rule 5 (2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 requiring particulars of the employees in receipt of remuneration in excess of Rs. 60 Lacs per year to be disclosed in the Report of Board of Directors are not applicable to the Company as none of the employees was in receipt of remuneration in excess of Rs. 60 lacs during the financial year 2014-15. The information required under section 197 (12) of the Companies Act, 2013 read with Rules 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in the Statement annexed herewith as "Annexure-D". CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexures, together with the Certificate the auditors of the Company regarding Compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement. ACKNOWLEDGEMENTS: Your Company and its Directors wish to extend their sincerest thanks to the Members of the Company, Bankers, State Government, Local Bodies, Customers, Suppliers, Executives, Staff and workers at all levels for their continuous co-operation and assistance. By Order of the Board of Directors FOR Sangal Papers Ltd. CIN :L21015UP1980PLC005138 Himanshu Sangal Chairman & Managing Director (DIN-00091324) Place: Mawana Date: 25/05/2015 Reg. Office: 22 KM, Meerut - Mawana Road, Mawana - 250 401, Distt. Meerut (U.P.) PH-01233-271515, 274324 E- Mail: sangalpapers@hotmail.com |