Mar 31, 2016
DIRECTORS'' REPORT FOR THE YEAR ENDED 31ST MARCH 2016
Dear Members,
The Directors are pleased to present the 32nd Annual Report of the Company and the Audited Accounts for the financial year ended 31st March, 2016.
1. FINANCIAL RESULTS
The Company''s financial performance for the year ended 31st March, 2016 is summarized below:
(Rs. in lacs)
Particulars |
For the Year ended 31st March, 2016 |
For the Year ended 31st March, 2015 |
Net Sales / Income from operations |
3853.42 |
3958.30 |
Profit/(Loss) before Interest, Finance Charges, Depreciation and Tax Less: Interest and Finance Charges |
(1550.11) 347.84 |
(1057.18) 358.36 |
Profit / (Loss) before Depreciation and Tax Less: Depreciation |
(1897.95) 137.57 |
(1415.54) 161.27 |
Profit / (Loss) before Tax Less: Tax Expenses (net) |
(2035.52) (770.76) |
(1576.81) (569.28) |
Net Profit / (Loss) after Tax Profit / (Loss) brought forward from previous year |
(1264.76) (2635.53) |
(1007.53) (1596.43) |
Balance carried forward to next year |
(3900.29) |
(2603.96) |
2. DIVIDEND
In view of losses, the Board of Directors has not recommended any dividend for the financial year 2015-16.
3. TRANSFER TO RESERVES
In view of the losses incurred by the Company this year, no amount has been transferred to the General Reserve.
4. MANAGAEMENT DISCUSSION AND ANALYSIS
A Management Discussion & Analysis is forming part of this Annual Report.
5. FINANCE
Your Company thanks its consortium bankers for their continued support.
6. REPORTING TO BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION ("BIFR")
As per the audited accounts of the Company for the financial year ended 31st March, 2016, the accumulated losses as at the end of the staid period stood at Rs. 3900.29 Lacs which exceeds fifty percent of its peak net worth of Rs. 5279.74 Lacs during immediate preceding four financial years.
In terms of Section 23(a)(i) of the Sick Industrial Companies (Special Provisions) Act, 1985 ("SICA"), the Company falls under the category of potentially Sick Industrial Company and therefore the fact is required to be reported to Board of Industrial and Financial Reconstruction ("BIFR") within 60 days from the date of finalization of the audited accounts, which is the date of Annual General Meeting in which accounts will be approved by the shareholders. A report on causes of erosion of net worth and steps taken by the Company is forming part of the Notice to Annual General Meeting.
7. RAW MATERIAL
Raw material costs especially firewood, Melamine and Urea have increased substantially and have affected performance during the year. Further, unavailability of firewood, which is a key raw material of the Company''s product, also affected the Company''s performance to a large extent. Other raw materials also have shown an upward trend in prices. As in the past years the focus on the Plantation under the Farm Forestry Scheme was maintained. This, together with plantation activities undertaken in our owned leased land, will make the Company self-sufficient in availability of its principal raw material in future.
8. CAPTIVE THERMAL POWER PLANT
The Company has commissioned trial run of its 3MW captive thermal power plant and will commission commercial production on successful completion of said trail run. This power plant will provide uninterrupted power for the production which will not only improve the plant efficiency but also reduce its cost of production. With this power plant, the Company will be 100% self-sufficient through its own power generation.
9. PLANTATION
Availability of firewood in nearby areas has become difficult but necessary efforts are being made continuously to develop long term supply. Your company is continuing its policy on plantation activities to help supply quality raw material to factory with least cost on a continuous & sustainable basis. Some important efforts undertaken during the year are mentioned below:
i. Mist Chamber and Nursery: Company is strategically increasing the focus on Nursery operations to ensure consistent & quality supply of high yielding clonal plants to the farmers at affordable price and to increase the catchment areas of Company for wood. Production capacity of the nursery is 3.00 million clonal plants.
ii. Farm Forestry Planting: Odisha forest department has invited the wood based industry to participate in a farm forestry scheme wherein industry will supply good quality clonal planting material to small and marginal farmers with wood buyback arrangement. The scheme provides scope for the farmer to achieve higher returns from his/her land. During the year also, we have entered into new BIPARTARE AGREEMENT between Company and big farmers on buy back basis. The scheme provides scope for industry to procure good quality raw material and increase the availability of wood near Nabarangpur catchment areas of the Company. By this scheme we have supplied 0.13 million clonal plants to farmers.
iii. Lease area Replanting: We are gradually increasing the area under plantation and by 2017-18 entire lease area will have high yielding clonal plants, which would supply approx. 15% to 20% annual requirement of our plant from 2017 onwards.
iv. Private Wood supply: Presently approx. 10% of our wood requirement comes from farm forestry and lease plantations. In future we can fulfill up to 15%-20% of the Company wood requirement from our leased land and balance requirement from private suppliers. All efforts are being made to increase the captive wood supply. However, efficient vendor development is essential for long-term consistent supply of quality wood.
10. EXTRACT FROM ANNUAL RETURN
The Extract of Annual Return as required under Section 134(3)(a) of the Companies Act, 2013 is set out at Annexure-I forms part of this report.
11. BOARD MEETINGS
The Board met four times during the Financial Year 2015
16. Details of Meetings and the attendance of each Director is provided in the Report on Corporate Governance
12. AUDIT COMMITTEE
The composition and terms of reference of the Audit Committee has been furnished under SN 3A in the Corporate Governance Report forming a part of this Annual Report. There have been no instances where the Board has not accepted the recommendations of the Audit Committee.
13. CORPORATE GOVERNANCE
Your Company attaches considerable significance to good Corporate Governance as an important step towards building investor confidence, improving investors'' protection and maximizing long-term shareholders value. The Report on Corporate Governance as stipulated under Chapter IV of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") forms part of the Annual Report. The certificate of the Auditors, M/s. S. M. Daga & Co., confirming compliance of conditions of Corporate Governance as stipulated under the Listing Regulations is attached as Annexure-II and forms a part of this report.
14. CORPORATE SOCIAL RESPONSIBILTY
Driven by the desire to create a meaningful difference in society, the Company makes conscious efforts to achieve higher socio-economic goals. It has continued with its welfare activities for development in the fields of education, health, culture and other welfare measures and to improve the general standard of living.
15. NOMINATION AND REMUNERATION POLICY
The Company has in place a formal Nomination and Remuneration Policy formulated as per provisions of Section 178(3) of the Act as well as Regulation 19(4) read with Part D of Schedule II of the Listing Regulations. The Company''s Remuneration Policy is attached as Annexure-III and forms a part of this report.
16. KEY PARAMETER FOR APPOINTMENT OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Nomination and Remuneration Committee has formulated a detailed policy for appointment of Directors and Key Managerial Personnel which is designed to attract, motivate and retain best talent. This policy applies to Directors, Senior Management including its Key Managerial Personnel (KMP) and other employees of the Company. The compensation strategy revolves around getting the "best talent in the market". The remuneration of KMPs of the Company is recommended by the Nomination and Remuneration Committee based on the Company''s remuneration structure taking into account factors such as level of experience, qualification and suitability. The Company generally pays remuneration by way of salary, perquisites and allowances (fixed component).
17. DIRECTORS
Shri N G Khaitan, Shri Prabir Chakravarti, Shri Anand Daga, Smt. Vidula Jalan and Smt. Leena Ghosh are members of the Board.
In accordance with the Articles of Association of the Company and the provisions of the Companies Act, 2013, Smt Vidula Jalan, being non-independent director, retires by rotation and being eligible, seeks re-appointment.
The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of the independence prescribed under sub section (6) of the section 149 of the Companies Act, 2013.
The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibility in the Company, nature of the industry in which the Company operates and other related matters are put on the website of the Company at the link http://www.mangalamtimber.com/images/ Familiarisation-Programme-for-Independent-Directors.pdf
18. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act, the Directors state that:
a) in the preparation of the annual accounts, the applicable accounting standards have been followed and proper explanations provided relating to material departures, if any;
b) such accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;
c) proper and sufficient care has been taken 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) the annual accounts have been prepared on a going concern basis;
e) internal financial controls were followed by the Company and they are adequate and are operating effectively; and
f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
19. KEY MANAGERIAL PERSONNEL
Following employees were the Key Managerial Personnel of the Company during the period under review:
i. Shri Soumitra Kumar De, Manager of the Company (with effect from 13th August, 2015)
ii. Shri Tara Chand Sharma, Manager of the Company (upto 31st July, 2015)
iii. Shri Amit Kumar Agarwal, Chief Financial Officer
iv. Miss. Namrata Priya, Company Secretary
20. REMUNERATION TO DIRECTOR''S & KEY MANGERIAL PERSONNEL
i. The Ratio of the remuneration of each Director to the median remuneration of employees of the Company for the year ended 31st March, 2016 are :-
Sl No. |
Name of Directors and Key Managerial Personnel |
Designation |
Ratio of remuneration of Director to median remuneration of the Employee of the Company |
Percentage increase in the remuneration for the Financial Year 2015-16 |
1 |
Shri N. G. Khaitan |
Independent and Non Executive Director |
27% |
Nil |
2 |
Shri Prabir Chakravarti |
Independent and Non Executive Director |
32% |
Nil |
3 |
Shri Anand Daga |
Independent and Non Executive Director |
28% |
Nil |
4 |
Smt Vidula Jalan |
Promoter Non Executive Director |
30% |
Nil |
5 |
Smt Leena Ghosh |
Independent and Non Executive Director |
22% |
NA |
6 |
Shri Tara Chand Sharma |
Manager of the Company 1 |
NA |
Nil |
7 |
Shri Soumitra Kumar De |
Manager of the Company # |
NA |
NA |
8 |
Shri Amit Kumar Agarwal |
Chief Financial Officer |
NA |
Nil |
9 |
Miss Namrata Priya |
Company Secretary |
NA |
Nil |
ii. In the financial year 2015-16, there was decrease of 8.41% in the median remuneration of employees.
iii. There were 248 permanent employees on the rolls of Company as on 31st March, 2016.
iv. In view of the loss of the Company no increments were given to employees of the Company.
v. Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company: The total remuneration of Key Managerial Personnel increased by Rs 0.76 Lacs from Rs 10.76 Lacs in 201415 to Rs 11.52 Lacs in 2015-16.
vi. (a) Variations in the market capitalization of the
Company: The market capitalization as on 31st March, 2016 was Rs 3069.84 Lacs (Rs. 1649.47 Lacs as on 31st March, 2015)
(b) Price Earnings Ratio of the Company: Not computed in view of Loss
(c) Percent increase over / decrease in the market quotations of the shares of the company as compared to the rate at which the company came out with the last public offer in the year: The company has not made any public issue or rights issue of securities in the recent past, so comparison have not been made of current share price with public offer price. The Company''s shares are listed on BSE Limited and National Stock Exchange of India Limited.
vii. Considering the performance of the Company no increment was made to the salaries of the employees in the last financial year i.e. 2015-16.
viii. Key Parameters for any variable component of remuneration availed by the Directors are based on their contribution at the Board, time spent on operational matters and other responsibilities assigned: All directors of the Company are non-executive directors hence no remuneration was paid/ payable to them other than sitting fees.
ix. The ratio of the remuneration of the highest paid Director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year 2015-16: Nil (All directors of the Company are non-executive directors hence no remuneration was paid/ payable to them other than sitting fees).
x. It is hereby affirmed that the remuneration paid is as per the Remuneration Policy of the Company.
21. STATUTORY AUDITORS
The Statutory Auditors, M/s S. M. Daga & Co, Chartered Accountants, hold office up to the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. The Board recommends their reappointment for the ensuing year. The Company has received letter from them to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment.
22. SECRETARIAL AUDITOR
The Board appointed Shri Arup Kumar Roy, ACS, Practicing Company Secretary as Secretarial Auditor of the Company for the Year 2015-16. The Report of the Secretarial Auditor is attached in Annexure IV of this Report. There is no qualification in the report.
23. AUDITORS'' REPORT
Auditors'' Report to the shareholders does not contain any qualification, reservation, or adverse remarks and is self-explanatory.
24. CASH FLOW ANALYSIS
In conformity with the provisions of Regulation 34(2)(c) of the Listing Regulations, 2015, Cash Flow Statement for the financial year ended 31st March, 2016 forms part of the audited financial statement.
25. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The Company has not given any loan, guarantees or made any investments as prescribed in Section 186 of the Companies Act, 2013.
26. RELATED PARTY TRANASACTIONS
All the related party transactions are entered into at arm''s length in ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations. There were, however, no material significant related party transaction made by the Company with the Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company.
The policy on Related Party Transactions as approved by the Board has been uploaded on the Company''s website under web link http://www.mangalamtimber.com /images/Related-Party-Transaction-Policy.pdf Your Directors draw attention of the members to Note 2.25 (6) to the financial statement which sets out related party transactions disclosures.
27. PUBLIC DEPOSIT
The Company has neither invited nor accepted any public deposits, within the meaning of section 73 of the Companies Act, 2013, during the year under report.
28. SUBSIDIARY/ASSOCIATES/JOINT VENTURE COMPANIES The Company does not have any subsidiary/associate/joint venture company for the year ended 31st March, 2016.
29. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
The Company has transferred a sum of Rs 7,29,010/- during the financial year 2015-16 to the Investor Education and Protection Fund, established by the Central Government for the unclaimed dividends, for the financial year 2007-08, in compliance with section 125 of the Companies Act, 2013. The said unclaimed dividends were lying with the Company for a period of 7 years from their respective due dates of payment.
Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on September
11, 2015 (date of last Annual General Meeting) on the Company''s website under we blink http:// www.mangalamtimber.com/index.php/investor-desk/unclaimed-dividend
30. VIGIL MECHANISM
The Company has a codified whistle blower policy to establish vigil mechanism for Directors and employees of the Company to report concerns about unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy. The mechanism under the policy has been appropriately communicated within the organization. The Whistle Blower Policy is available on the website of the Company.
31. DISCLOSURE UNDER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE
No complaints on the issues covered by "The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013", were received during the year. Consequently, the question of disposal of complaints did not arise.
32. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.
33. PERFORMANCE EVALUATION
Pursuant to Regulation 17(10) of the Listing Regulations read with provisions of the Companies Act, 2013, the Board has carried out an evaluation of its own performance and that of the individual Directors. The evaluation criteria, inter-alia, covered various aspects of the Board''s functioning including its composition, execution and performance of specific duties, obligations and governance. The performance of individual directors was evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders, time devoted, etc. The Directors expressed their satisfaction with the evaluation process.
34. CARBON CREDIT
Our Clean Development Mechanism (CDM) project activity "Reforestation of degraded land by MTPL in India (5016)" has accumulated credit of 1764076 tCERs from UNFCCC. These units will be available to the Company on completion of certain laid formalities.
35. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure V to this Report
36. PARTICULARS OF REMUNERATION
The Company has no employee in respect of whom information under Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is required to be annexed.
37. INTERNAL FINANCE CONTROL
The Company has in place internal financial control systems, commensurate with the size and complexity of its operations, to ensure proper recording of financial and monitoring of operational effectiveness and compliance of various regulatory and statutory requirements. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control systems in the Company. Based on the report of the Internal Auditor, respective departments undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board
38. LISITNG AGREEMENT
The Securities and Exchange Board of India (SEBI), on September 2, 2015, issued SEBI (Listing Obligation and Disclosure Requirements), Regulation, 2015, with the aim to consolidate and streamline the provision of the Listing Agreement for different segment of capital markets to ensure better enforceability. The said regulations were effective December 1, 2015. Accordingly, all listed entities were required to enter into Listing Agreement within six months from the effective date. The Company entered into Listing Agreement with BSE Limited and the National Stock Exchange of India Limited within stipulated time frame.
39. APPRECIATION
Your Directors place on record their deep appreciation of the assistance and guidance provided by the Central Government and the Governments of the States of India, its suppliers, technology providers and all other stakeholders. Your Directors thank the financial institutions and banks associated with your Company for their support as well. Your Directors also thank the Company''s dealers and its customers for their unstinted commitment and valuable inputs.
Your Directors acknowledge the support received from you as shareholders of the Company.
N G Khaitan
Prabir Chakravarti Directors
Dated : 25th May, 2016 Leena Ghosh
Place : Kolkata Vidula Jalan
Mar 31, 2015
Dear Members,
The Directors are pleased to present the 31st Annual Report of the
Company and the Audited Accounts for the financial year ended 31st
March, 2015.
FINANCIAL RESULTS
The Company's financial performance for the year ended 31st March, 2015
is summarized below :
(Rs. in lacs)
For the Year For the Year
Particulars ended ended
31st March, 31st March,
2015 2014
Net Sales / Income from operations 3,958.30 5,595.15
Operating Profit/(Loss) before Interest, (1,057.18) (590.75)
Finance Charges, Depreciation and Tax
Less: Interest and Finance Charges 358.36 280.48
Profit/(Loss) before Depreciation and Tax (1,415.54) (871.23)
Less: Depreciation 161.27 184.55
Profit/(Loss) before Tax (1,576.81) (1,055.78)
Less : Deferred Tax Charge/(Credit) (Net) (569.28) (294.09)
Net Profit/(Loss) after Tax (1,007.53) (761.69)
Profit/(Loss) brought forward from
previous year (1,596.43) (834.74)
Balance carried forward to next year (2,603.96) (1,596.43)
DIVIDEND
In view of losses, the Board of Directors has not recommended any
dividend for the financial year 2014-2015.
OPERATIONAL PERFORMANCE
Performance of the Company was deeply impacted due to lower production,
primarily because of acute power supply restriction and disturbance in
power supply due to various reasons by Southern Electricity Supply
Company of Odisha Limited (SOUTHCO) and considerable increase in raw
material prices, power & fuel and transportation costs. In order to
mitigate the shortage of power the Company has taken steps to have its
own captive generation of power. This will not only enable the Company
to achieve higher production but would also result in reduction of its
cost of production.
During the year, production got reduced to 12106 MT as compared to
16615 MT in the previous year.
Gross sales for the year have reduced to Rs. 4391.23 Lacs as compared
to Rs. 6268.64 Lacs in the previous year. Loss for the year stands to
Rs. 1007.53 Lacs as against Rs. 761.69 Lacs in the previous year.
The Company is continuing its efforts to achieve better results in the
years to come on all fronts like reduction of operational cost(s);
strategic marketing positioning of brand and product etc.
RAW MATERIAL
Raw material costs especially firewood and resins have increased
substantially and have affected profitability during the year. Other
raw materials also have shown an upward trend in prices.
PLANTATION
Availability of firewood in nearby areas has become difficult but
necessary efforts are being made continuously to develop long term
supply. Your Company is continuing its policy on plantation activities
to help supply quality raw material to factory with least cost on a
continual & sustainable basis. Some important efforts undertaken during
the year are mentioned below:
Mist Chamber and Nursery: Company is strategically increasing the focus
on Nursery operation to ensure consistent & quality supply of high
yielding clonal plants to the farmers at affordable price and to
increase the catchment areas of Company for wood. Production capacity
of the nursery is 3.00 million clonal plants. During 2014-15 we have
already provided 1.39 million clonal plants collectively to farmers of
Jeypore & Koraput forest Divisions and other local farmers near the
Plant from our nursery.
Farm Forestry Planting: Odisha forest department has invited the wood
based industry to participate in a farm forestry scheme wherein
industry will supply good quality clonal planting material to small and
marginal farmers with wood buyback arrangement. The scheme provides
scope for the farmer to achieve higher returns from his/her land.
During the year we have entered into a new TRIPARTITE AGREEMENT between
Company, Bank and farmers on buy back basis. By this scheme we are
supplying 3.09 million clonal plants to farmers of Jeypore and Koraput
forest Divisions. The scheme provides scope for industry to procure
good quality raw material and increase the availability of wood near
Nabarangpur catchments area as it encourages the small farmer to plant
his small piece of land for wood.
In continuation to this scheme, this year we have implemented BIPARTITE
AGREEMENT between the Company and farmers on buy back basis. By this
scheme we are supplying 0.1 million clonal plants to farmers.
Lease Area Replanting: We are gradually increasing the area under
plantation and by 2015-16 entire lease area will have high yielding
clonal plants, which would supply approx. 15% to 20% annual requirement
of our plant from 2016 onwards. Private Wood Supply: Presently approx.
10% of our wood requirement comes from farm forestry and lease
plantations. In future we can fulfill up to 15%-20% of the Company
wood requirement from our lease land and balance requirement from
private suppliers. All efforts are being made to increase the captive
wood supply. However, efficient vendor development is essential for
long-term consistent supply of quality wood.
INDUSTRY SCENARIO
With Plywood & laminar wood products becoming expensive there has been
a significant change in the customer preferences in the interior decor
of the modern-day dwelling & work place which sees the increased use of
prelaminated panels in space saving - functional furniture. Today MDF
meets the customer preference in its uniqueness, application & flexible
in design aspect, yet are affordable. With natural solid wood & its
transitional products like plywood requiring conventional carpentry
becoming more expensive to own due to the ever increasing hardwood cost
coupled with the high manual conversion cost, manufacturers are
shifting to machined furniture/interior solutions that are easy to
fabricate & quick to install yet cost significantly less. This lends a
flexibility in scope of expansion & renovation at a faster pace opening
up facilities to the Indian masses in shorter spans. Rather modular
panel have been credited with short interior turnaround time & that is
the prime reason why it is a world-wide trend.
Moreover, imports from China, Indonesia, Vietnam, Malaysia and even
Bangladesh is biggest challenge to the Industry. Few of the Companies
of this industry, including us, collectively took an initiative and
plea for imposition of anti- dumping duty on MDF imports. The positive
outcome is expected in short period.
MARKETING & SALES
The Company with an established pan - Indian presence since the mid-80s
has a dedicated channel network nationally. There has been a strategic
focused approach to concentrate/ commit maximum marketing efforts &
resources to markets that are closest to the plant especially the
Southern & Central India. Today Duratuff is a name to recon in the
Southern markets of India with a top of the line brand positioning.
The marketing strategies are backed by a dedicated & motivated
marketing team. Team Leaders are highly experienced with work
experience of 25 years & more in the trade of MDF making them the
pioneers in the marketing of MDF in India. Such rich experience in the
trade ensures ease in market penetration.
The brand's presence in the Indian market place over the past three
decades has created a market strong hold despite other new domestic
competitors & the ever present threat of imports.
OPPORTUNITIES
MDF today is a product that has been accepted by the Indian market
since its inception in the mid-80s. Today there are dealer counters
totally dedicated to MDF which was unheard of 5 years ago. The
customers are ready to try out MDF in newer applications where in
multi-level mezzanine storage solution is a key application where
Duratuff MDF has established monopoly with its ultra-high thickness
MDF. Our ultra-high thickness MDF ranges are unique in the industry as
there are no other manufacturers in the Country & neither are there any
imports of the same. With increased impetus on Economic Growth the
pressures on Infrastructural demand of alternative panels like MDF in
the housing & the furniture sectors besides the rapid growth in the IT
Sector the demand is set for an exponential growth in demand.
Today domestic & work place interiors have gone through a sea change
where in the conventional fabricate & install gestation period have
been halved with demands for quicker turnaround time becoming the
contentious issue in every project site. This has spawned a plethora of
machined wooden furniture converters (OEMs) who work on slim time line
& on a shoe string budget. These are the prime customers of MDF as it
is easy to work on a pre-finished ready to use panel.
TRANSFER TO RESERVES
In view of the losses incurred by the Company this year, no amount has
been transferred to the General Reserve. CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
As required under Section 134(3) (m) of the Companies Act, 2013, read
with the Companies (Accounts) Rules, 2014, the information relating to
Conservation of Energy, Technology Absorption, Foreign Exchange
earnings and outgo is set out in the statement at Annex-2 hereto and
forms part of this Report.
PUBLIC DEPOSIT
The Company has neither invited nor accepted any public deposits,
within the meaning of section 2(32) and 74 of the Companies Act, 2013,
during the year under review and as such, no amount on account of
principal or interest on deposits was outstanding as on Balance Sheet
date. SUBSIDIARY/ASSOCIATES/JOINT VENTURE COMPANIES The Company does
not have any subsidiary/associate/joint venture company for the year
ended 31st March, 2015.
VIGIL MECHANISM
The Company has formulated a Whistle Blower Policy for vigil mechanism.
The said policy has been formulated keeping in view of the amendments
in the Companies Act, 2013 and Clause 49 of the Listing Agreement. The
mechanism under the policy has been appropriately communicated within
the organization. The said policy may be referred to, at the Company's
official website at the weblink,
http://www.mangalamtimber.com/images/Whistle-Blower- Policy.pdf
INTERNAL CONTROL SYSTEMS
Your Company has an adequate system of internal control procedures
which is commensurate with the size and nature of business. Detailed
procedural manuals are in place to ensure that all the assets are
safeguarded, protected against loss and all transactions are
authorized, recorded and reported correctly. The internal control
systems of the Company are monitored and evaluated by internal auditors
and their audit reports are periodically reviewed by the Audit
Committee of the Board of Directors. The observations and comments of
the Audit Committee are placed before the Board. LISTING WITH STOCK
EXCHANGES Your company is listed with BSE Limited and National Stock
Exchange of India Limited and the Company has paid the listing fees to
each of the Exchanges.
AUDIT COMMITTEE
The composition and terms of reference of the Audit Committee has been
furnished under Clause I(3) in the Corporate Governance Report forming
a part of this Annual Report. There has been no instance where the
Board has not accepted the recommendations of the Audit Committee.
CORPORATE GOVERNANCE
Your Company attaches considerable significance to good Corporate
Governance as an important step towards building investor confidence,
improving investors' protection and maximizing long-term shareholders
value. The Report on Corporate Governance as stipulated under Clause 49
of the Listing Agreement forms part of the Annual Report. The
certificate of the Auditors, M/s S M Daga & Co., confirming compliance
of conditions of Corporate Governance as stipulated under Clause 49 of
the Listing Agreement of the Stock Exchanges is annexed to the Annual
Report.
EXTRACT OF THE ANNUAL RETURN
The Extract of Annual Return as required under Section 134(3)(a) of the
Companies Act, 2013 is set out at Annex-1 which forms part of this
report.
REMUNERATION POLICY
A Nomination and Remuneration Policy has been formulated pursuant to
the provisions of Section 178 and other applicable provisions of the
Companies Act, 2013 and Rules thereto stating therein the Company's
policy on Directors' appointment and remuneration by the Nomination and
Remuneration Committee and approved by the Board of Directors.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not given any loan, guarantees or made any investments
as prescribed in Section 186 of the Companies Act, 2013.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
A Related Party Transaction Policy as approved by the Board is uploaded
on the Company's website at the weblink,
http://www.mangalamtimber.com/images/Related-Party-
Transaction-Policy.pdf
All the related party transactions are entered into at arm's length in
ordinary course of business and are in compliance with the applicable
provision of the Act and the Listing Agreement. There are no material
significant related party transactions made by the Company with the
Promoters, Directors or Key Managerial Personnel etc. which may have
potential conflict with the interest of the Company.
Your Directors draw attention of the members to Note 2.26 (6) to the
financial statement which sets out related party disclosures.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri Shiv Kumar Parik, who had been on the Board of the Company since
6th June, 1996 has tendered his resignation with effect from 12th
February, 2015 due to personal reasons. Your Directors place on record
their sincere appreciation of the valuable contribution made by him to
the company. Pursuant to the resignation of Shri Shiv Kumar Parik, the
Board of Directors have appointed Smt. Leena Ghosh as an Additional
Director of the Company with effect from 12th February, 2015. Smt.
Leena Ghosh holds office as Additional Director until the ensuing
Annual General Meeting, and is eligible for appointment as Director as
provided under Article 94(1) of the Articles of Association of the
Company. Pursuant to the provisions of Sections 149, 150, 152 read
with Schedule IV and all other applicable provisions of the Companies
Act, 2013 and the Companies (Appointment and Qualification of
Directors) Rules, 2014 and Clause 49 of the Listing Agreement, it is
proposed to appoint Smt. Leena Ghosh as Independent Director of the
Company for the period of 5 (Five) consecutive years from the
conclusion of the Company's 31st Annual General Meeting to the
conclusion of Company's 36th Annual General Meeting.
A brief profile of Smt. Leena Ghosh has been given in the Notice
convening the Annual General Meeting.
In accordance with the Articles of Association of the Company and the
provisions of the Companies Act, 2013, Smt. Vidula Jalan, being
non-independent director, retires by rotation and being eligible, seeks
re-appointment.
During the year, Shri Amit Kumar Agarwal has been appointed as the
Chief Financial Officer of the Company and Shri Tara Chand Sharma as
the Manager of the Company with effect from 14th May, 2014. Further,
Miss Namrata Priya is the Company Secretary.
BOARD MEETINGS
The details of the Board Meetings held during the Financial Year
2014-15 have been furnished under Clause I (2)(D) in the Corporate
Governance Report forming a part of this Annual Report.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received declaration from all the Independent Directors
of the Company confirming that they meet the criteria of the
independence prescribed under sub section (6) of section 149 of the
Companies Act, 2013.
REMUNERATION TO DIRECTORS & KEY MANAGERIAL PERSONNEL
(i) The Ratio of the remuneration of each Director to the median
remuneration of employees of the Company for the year ended 31st March,
2015 are :-
Sl Name of Directors and Key Designation Ratio of
No. Managerial Personnel remuneration to
median
remuneration
of the Employee
of the Company
1 Shri N. G. Khaitan Independent and Non 29%
Executive Director
2 Shri S. K. Parik Independent and Non 33%
Executive Director
3 Shri Prabir Chakravarti Independent and Non 32%
Executive Director
4 Shri Anand Daga Independent and Non 34%
Executive Director
5 Smt. Vidula Jalan Promoter Non- 25%
Executive Director
6 Smt. Leena Ghosh Independent and Non Nil
Executive Director
7 Shri Amit Kumar Agarwal Chief Financial NA
Officer
8 Shri Tara Chand Sharma Manager of NA
the Company
9 Miss Namrata Priya Company Secretary NA
Sl Name of Directors and Key Percentage increase
No. Managerial Personnel in the remuneration
for the Financial
Year 2014-15
1 Shri N. G. Khaitan Nil
2 Shri S. K. Parik Nil
3 Shri Prabir Chakravarti Nil
4 Shri Anand Daga Nil
5 Smt. Vidula Jalan Nil
6 Smt. Leena Ghosh NA
7 Shri Amit Kumar Agarwal NA
8 Shri Tara Chand Sharma NA
9 Miss Namrata Priya Nil
Median remuneration of the Employees of the Company assumed to be Rs.
2.21 Lacs
(ii) In the financial year 2014-15, there was an increase of 9.31% in
the median remuneration of employees.
(iii) There were 245 permanent employees on the rolls of Company as on
31st March, 2015.
(iv) In view of the losses, no increment was given to employees of the
Company (other than workers, whose remuneration were revised in terms
of agreement with trade union).
(v) Comparison of the remuneration of the Key managerial Personnel
against the performance of the Company:
The total remuneration of Key Managerial Personnel has declined by
21.69 Lacs from Rs 32.45 Lacs in 2013-14 to Rs 10.76 Lacs in 2014-15.
(vi) (a) Variations in the market Capitalization of the Company:
The market capitalization as on 31st March, 2015 was Rs 1649.47 Lacs
(Rs. 1686.12 Lacs as on 31st March, 2014)
(b) Price Earnings Ratio of the Company was (-) 1.64 as at 31st March,
2015 and was (-)2.21 as at 31st March, 2014.
(c) Percent increase over / decrease in the market quotations of the
shares of the company as compared to the rate at which the company came
out with the last public offer in the year: The company has not made
any public issue or rights issue of securities in the recent past, so
comparison have not been made of current share price with public offer
price. The Company's shares are listed on BSE Limited and National
Stock Exchange of India Limited.
(vii) Considering the performance of the Company no increment was made
to the salaries of the employees (excluding workers) in the last
financial year i.e. 2014- 15 whereas Managerial Personnel remuneration
were declined by 66.84%.
(viii) Key Parameters for any variable component of remuneration
availed by the Directors are based on their contribution at the Board,
time spent on operational matters and other responsibilities assigned:
All directors of the Company are non-executive directors hence no
remunerations were paid/ payable to them other than sitting fees.
(ix) The ratio of the remuneration of the highest paid Director to that
of the employees who are not directors but receive remuneration in
excess of the highest paid director during the year 2014-15 : Nil (All
directors of the Company are non-executive directors hence no
remunerations were paid/ payable to them other than sitting fees).
(x) It is hereby affirmed that the remuneration paid is as per the
Remuneration Policy of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act, the Directors
state that:
a) in the preparation of the annual accounts, the applicable accounting
standards have been followed and proper explanations provided relating
to material departures, if any;
b) such accounting policies have been selected and applied consistently
and judgments and estimates made that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at
the end of the financial year and of the loss of the Company for that
period;
c) proper and sufficient care has been taken 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) the annual accounts have been prepared on a going concern basis;
e) internal financial controls were followed by the Company and they
are adequate and are operating effectively; and
f) proper systems have been devised to ensure compliance with the
provisions of all applicable laws and such systems are adequate and
operating effectively.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF
THE COMPANY
There have been no material changes and commitments, if any, affecting
the financial position of the Company which have occurred between the
end of the financial year of the Company to which the financial
statements relate and the date of the report.
PERFORMANCE EVALUATION
Pursuant to Clause 49 of the Listing Agreement read with provision of
the Companies Act, 2013, the Board has carried out an evaluation of its
own performance and that of the individual Directors. The evaluation
criteria, inter- alia, covered various aspects of the Board's
functioning including its composition, execution and performance of
specific duties, obligations and governance.
The performance of individual directors was evaluated on parameters
such as level of engagement and contribution, independence of
judgement, safeguarding the interest of the Company and its minority
shareholders, time devoted, etc. The Directors expressed their
satisfaction with the evaluation process.
STATUTORY AUDITORS
The Statutory Auditors, M/s S M Daga & Co, Chartered Accountants, hold
office up to the ensuing Annual General Meeting and being eligible,
offer themselves for reappointment. The Board recommends their re-
appointment for the ensuing year. The Company has received letter from
them to the effect that their appointment, if made, would be within the
prescribed limits under Section 141(3)(g) of the Companies Act, 2013
and that they are not disqualified from appointment.
SECRETARIAL AUDITOR
Pursuant to Section 204 of the Companies Act, 2013 read with Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014,
Company had appointed Shri S M Gupta, Practicing Company Secretary,
Kolkata as Secretarial Auditor of the Company for the Year 2014-15. In
accordance with the section 204 of the Act they have submitted their
report in prescribed format and the same has been attached at Annex-3.
RISKS & MITIGATING STEPS
The Company has identified various risks faced by the Company from
different areas. As required under Clause 49 of the Listing Agreement,
the Board has adopted a risk management policy whereby a proper
framework is set up. Appropriate structures are present so that risks
are inherently monitored and controlled. A combination of policies and
procedures attempts to counter risk as and when they evolve. The Company
has also formed a Risk Management Committee which monitors the various
functions and regions to establish any risk existing in the operational
functions of the Company. The constitution and terms of reference are
set out in details in the Corporate Governance Report.
The risks and its mitigating factors are discussed by the Committee and
subsequently placed before the Board for their opinion and advice.
DEMATERIALIZATION OF THE SHARES OF THE COMPANY
Trading in shares of the Company has been compulsorily in
dematerialized mode by all investors as per directives given by SEBI.
Accordingly, the equity shares of the Company are available for
dematerialization under ISIN INE 805B01012 with CDSL and NSDL.
AUDITORS' REPORT
Auditors' Report to the shareholders does not contain any
qualification, reservation, or adverse remarks and are
self-explanatory.
CASH FLOW ANALYSIS
In conformity with the provisions of Clause 32 of the Listing
Agreement, Cash Flow Statement for the financial year ended 31st March,
2015 is annexed hereto.
FINANCE
Your Company thanks its consortium bankers for their continued support.
CARBON CREDIT
Our Clean Development Mechanism (CDM) project activity "Reforestation
of degraded land by MTPL in India (5016)" has 1764076 tCERs from UNFCCC
to its credit. These units will be available to the Company on
completion of certain laid formalities.
HUMAN RESOURCES
The Company recognizes that its people are its core strength and its
biggest performance catalyst. The Company has always nurtured a
favourable work environment that encourages continuous learning and
innovation. The Company has created a work culture which strives to
attract the best talent and provide a conducive environment for their
personal and professional growth.
PARTICULARS OF REMUNERATION
The Company has no employee in respect of whom information under
Section 197(12) of the Companies Act, 2013 and Rule 5(2) of Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, is
required to be annexed.
CORPORATE SOCIAL RESPONSIBILITY
Driven by the desire to create a meaningful difference in society, the
company makes conscious efforts to achieve higher socio-economic goals.
It has continued with its welfare activities for development in the
fields of education, health, culture and other welfare measures and to
improve the general standard of living.
ACKNOWLEDGEMENT
Your Directors take this opportunity to place on record their deep
appreciation for the whole-hearted and sincere co-operation the Company
has received from the statutory authorities, banks, shareholders and
customers.
Your Directors also wish to thank all their employees for their
dedicated and committed service to the Company.
N G Khaitan
Prabir Chakravarti Directors
Dated : 9th May, 2015 Anand Daga
Place : Kolkata Vidula Jalan
Mar 31, 2014
Dear Members,
The Directors are pleased to present the 30th Annual Report of the
Company and the Audited Accounts for the financial year ended 31st
March, 2014.
FINANCIAL RESULT
The Company''s financial performance for the year ended 31st March, 2014
is summarized below :
(Rs. in lacs)
For the Year ended For the Year ended
Particulars 31st March, 2014 31st March, 2013
Net Sales / Income
from operations 5,595.15 8,075.91
Operating Profit
before Interest, (590.75) 81.57
Finance Charges,
Depreciation and Tax
Less: Interest and
Finance Charges 280.48 446.03
Gross Profit/(Loss) before
Depreciation and Tax (871.23) (364.46)
Less: Depreciation 184.55 171.47
Profit/(Loss) before Tax (1,055.78) (535.93)
Add : Deferred Tax (Net) 294.09 181.15
Net Profit/(Loss) after Tax (761.69) (354.78)
Profit/(Loss) brought forward
from previous year (834.74) (479.96)
Balance carried forward to
next year (1,596.43) (834.74)
DIVIDEND
In view of losses, the Board of Directors has not recommended any
dividend for the financial year 2013-2014.
OPERATIONAL PERFORMANCE
As the plant has become old, major maintenance of the plant and
machineries has been undertaken during the year in three phases for
smooth production. As a result production got reduced during the year
to 16615 MT as compared to 31410 MT in the previous year. Further
profitability for the year has been impacted adversely due to
considerable increase in raw material prices, power & fuel and
transportation costs.
Moreover, due to political unrest in Seemandhra procurement of raw
materials as well as despatches were impacted considerably.
During the year gross sales have reduced to Rs. 6268.64 Lacs as
compared to Rs.9106.23 Lacs in the previous year whereas during the
Q4FY14 the Company has earned a profit after tax of Rs. 91.22 Lacs as
against Rs. 68.06 Lacs in corresponding period of previous year.
The Company is continuing its efforts to achieve better results in the
years to come on all fronts like reduction of operational cost(s);
strategic marketing positioning of brand and product etc.
RAW MATERIAL
Raw material costs especially firewood and resins have increased
substantially and have affected profitability during the year. Other
raw materials also have shown an upward trend in prices. PLANTATION
Availability of firewood in nearby areas has become difficult but
necessary efforts are being made continuously to develop long term
supply. Your Company is continuing its policy on plantation activities
to help supply quality raw material to factory with least cost on a
continual & sustainable basis. Some important efforts undertaken during
the year are mentioned below:
Mist Chamber and Nursery: Company is strategically increasing the focus
on Nursery operation to ensure consistent & quality supply of high
yielding clonal plants to the farmers at affordable price and to
increase the catchment areas of Company for wood. The new mist
chamber, which started operating in Q4FY13, together with modifications
in existing chambers enabled us to increase the production capacity of
the nursery to 3.00 million clonal plants.
During 2013-14 we have already provided 1.20 million clonal plants
collectively to farmers of Jeypore & Koraput forest Divisions and other
local farmers near the Plant.
Farm Forestry Planting: Odisha forest department has invited the wood
based industry to participate in a farm forestry scheme under "Odisha
Forestry Sector Development Project" wherein industry will supply good
quality clonal planting material to small and marginal farmers with
wood buyback arrangement. The scheme provides scope for the farmer to
achieve higher returns from his/her land. During year we have entered
into a new TRIPARTITE AGREEMENT between Company and farmer on buy back
basis. By this scheme we are supplying 0.30 million clonal plants to
farmers. The scheme provides scope for industry to procure good quality
raw material and increase the availability of wood near Nabarangpur
catchments area of Company as it encourages the small farmer to plant
his small piece of land for wood.
Lease area Replanting: We are gradually increasing the area under
plantation and by 2015-16 entire lease area will have high yielding
clonal plants, which would supply approx. 15% to 20% annual requirement
of our plant from 2016 onwards.
Private Wood supply: Presently approx. 10% of our wood requirement
comes from farm forestry and lease plantations. In future we can
fulfill up to 15%-20% of the Company wood requirement from our lease
land and balance requirement from private suppliers. All efforts are
being made to increase the captive wood supply. However, efficient
vendor development is essential for long-term consistent supply of
quality wood.
INDUSTRY SCENARIO:
MDF has grown in acceptance over the years since its introduction in
the mid-80s & is product that is now home to the modular  machined
furniture industry coupled with niche applications in Shoe heels,
handicraft items & berth cushion base in railway coaches to name a few.
With exposure of the Indian populace to global life styles, demands for
such modular panels due to its economic angle, lends scope of periodic
sprucing up of the interiors without the worry & the inhibition of cost
over runs. In the Indian context MDF boards are increasingly finding
preference in house hold segment in the domestic furniture segments
with modular kitchens taking a lead followed by the new age modular
bedroom sets & wall mounted TV cabinets. While on the flip side the
Corporate India had graduated to the international ergo-trends in
modern workspaces MDF was a staple input in it modular furniture
products machined through state-of-art automated plants. Such is the
demand that leading global kitchen brands like Alno, Pogh Polh, Hacker
has set up shop/integration units in India too apart from the larger
volume imports from China, Malaysia & even Bangladesh have found major
preference with the Indian Homes. With more production of modular
furniture for house hold segment in India the demand for pre-laminated
boards is likely to surge in near future.
MARKETING & SALES
The Company with the Duratuff Range of Plain & Prelaminated MDF Boards
aims at meeting the increased demand in the country with product
variants such as that addresses the unique needs of the modern
customer.
The Company with an established pan-India presence since the late-80s
has a dedicated channel network nationally. To maximize on market
penetration the Company has strategic market positioning which are
closer to the factory to minimise on overheads & push the product at
the best realization despite maintaining strong market presence in the
Indian Market.
The marketing strategies are backed by a dedicated & motivated
marketing team with minimal attrition rate to push brand Duratuff in
the Indian market place.
Over the years brand Duratuff has been the preferred brand of MDF as a
key OEM fitment in leading modular furniture manufacturers in the
country. The brand''s presence in the Indian market place over the past
three decades has created a market strong hold despite other new
domestic competitors & the ever present threat of imports.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has an adequate system of internal control procedures
which is commensurate with the size and nature of business. The
internal control systems of the Company are monitored and evaluated by
internal auditors and their audit reports are periodically reviewed by
the Audit Committee of the Board of Directors. The observations and
comments of the Audit Committee are placed before the Board.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION
The management is giving top priority to energy conservation and
conservation of resources. Continuous efforts are being made towards
optimisation of operational efficiency in power consumption. Lower
electricity consumption is achieved through control of ideal machine
hours and optimised power factor.
FORM ''A'' of the Companies (Disclosure of particulars in the Report of
Board of Directors) Rules, 1988 is not required to be filled as our
industry is not included in the Schedule to the Rules.
FOREIGN EXCHANGE EARNINGS AND OUTGO
There has been no foreign exchange earnings during the year. However
the total expenditure on foreign exchange during the year was
equivalent to Rs.146.39 Lacs on account of imports of raw materials and
stores & spares.
PUBLIC DEPOSITS
The Company has neither invited nor accepted any deposits from the
public within the meaning of Section 58(A) of the Companies Act, 1956
during the year under review. As such, no amount of principal or
interest was outstanding on the date of the Balance Sheet.
LISTING WITH THE STOCK EXCHANGES
The Company is listed with the National Stock Exchange of India Limited
and Bombay Stock Exchange Limited. The annual listing fee to both the
stock exchanges has been duly paid on time.
DEMATERIALIZATION OF THE SHARES OF THE COMPANY
Trading in shares of the Company has been compulsorily in
dematerialized mode by all investors as per directives given by SEBI.
Accordingly, the equity shares of the Company are available for
dematerialization under ISIN INE 805B01012 with CDSL and NSDL.
DIRECTORS
Smt. Vidula Jalan, being non independent director, retires by rotation
in the ensuing Annual General Meeting and being eligible, offers
herself for re-election.
Pursuant to the provisions of Sections 149, 150, 152 read with Schedule
IV and all other applicable provisions of the Companies Act, 2013 and
the Companies (Appointment and Qualification of Directors) Rules, 2014
and Clause 49 of the Listing Agreement, it is proposed to appoint Shri
N. G. Khaitan, Shri Prabir Chakravarti, Shri S. K. Parik and Shri Anand
Daga as Independent Directors of the Company for the period of 5 (Five)
consecutive years from the conclusion of the Company''s 30th Annual
General Meeting to the conclusion of Company''s 35th Annual General
Meeting.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
independence as prescribed both under sub-section (6) of Section 149 of
the Companies Act, 2013 and under Clause 49 of the Listing Agreement
with the Stock Exchanges.
AUDITORS'' REPORT
Auditors'' Report to the shareholders does not contain any
qualification, reservation, or adverse remarks and are self
explanatory.
STATUTORY AUDITORS
M/s. S M Daga & Co., Chartered Accountants (Firm Registration No.
303119E), statutory auditors of the company is due for retirement in
accordance with provisions of the Companies Act, 1956 at the ensuing
Annual General Meeting and are eligible for reappointment. Your
Directors recommend their appointment for the ensuing year.
The Company has received letters from them to the effect that their
re-appointment, if made, would be within the prescribed limits under
Section 141(3)(g) of the Companies Act, 2013 and that they are not
disqualified for re-appointment.
COST AUDIT
Pursuant to the directives of the Central Government under the
provision of Section 233B of the Companies Act, 1956, M/s Mani & Co,
Cost Auditors, were appointed to audit the Cost records of your Company
for the year ended 31st March, 2014.
CORPORATE GOVERNANCE
In compliance with the requirements of Clause 49 of the Listing
Agreement, a separate Report on Corporate Governance along with the
Auditors Certificate on its compliance forms an integral part of this
Report.
CASH FLOW ANALYSIS
In conformity with the provisions of Clause 32 of the Listing
Agreement, Cash Flow Statement for the financial year ended 31st March,
2014 is annexed hereto.
FINANCE
Your Company thanks its consortium bankers for their continued support.
RISK MANAGEMENT
Risk Assessment and minimisation procedures have been framed by the
Company and are reviewed by the Board annually.
CARBON CREDIT
Our Clean Development Mechanism (CDM) project activity "Reforestation
of degraded land by MTPL in India (5016)" has achieved another
milestone during the year with receipt of confirmation of credit of
1764076 tCERs to the Company from UNFCCC. These units will be available
to the Company on completion of certain laid formalities.
OPPORTUNITIES
Plywood is popular amongst the housing industry while MDF has gained
approval in the large commercial space. The housing market being much
larger, plywood holds a significant market share. There is a perception
of Plywood being more durable and the skill required to use plywood is
lower. But with increasing awareness and approval of MDF and Particle
boards, the trend has started changing resulting into increase in share
of such items in total requirements of boards.
Since the early-90s imports had begun into India & have been growing
year on year. The import figures over the years give the clear
indication as to yawning gap between demand & supply of MDF.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors'' Responsibility Statement, it is
hereby confirmed that:
(i) in preparation of the annual accounts for the year ended 31st
March, 2014, the applicable accounting standards read with requirements
set out under Schedule VI to the Companies Act, 1956, have been
followed and that no material departure has been made therefrom;
(ii) the Directors 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 for the financial year ended 31st March, 2014 and of the
loss of the Company for that year ended on that date;
(iii) the Directors have taken proper and sufficient care for
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) the Directors have prepared the annual accounts of the Company on
a "going concern" basis.
HUMAN RESOURCES
Your Company believes that the competence and commitment of the people
are the principle drivers which enables the enterprise to create and
deliver value. The industrial relations climate of your Company
continues to remain harmonious with focus on improving productivity,
quality and safety. Efforts are being made to strengthen organizational
culture in order to attract and retain the good talent in the industry.
The Board records its appreciation of the commitment and support of the
employees and looks forward to their continued support.
PERSONNEL
The Company has no employee in respect of whom information under
Section 217 (2A) of the Companies Act, 1956 is required to be annexed.
CORPORATE SOCIAL RESPONSIBILTY:
As a part of corporate social responsibility activities, your Company
aims at creating sustainable livelihood capabilities and increasing the
level of prosperity of the local community. Your Company has undertaken
measures for providing health and education facilities, infrastructure
support to the local community and other welfare activities.
To promote cultural harmony among people, your Company regularly
supports various religious and social programmes. Further during the
year under review, your Company has provided aqua guard facility at the
local school for availability of clear drinking water to students, made
donation to the Red Cross Society and provided financial aid to the
needy students of the local community.
ACKNOWLEDGEMENT
Your Directors take this opportunity to place on record their deep
appreciation for the whole-hearted and sincere co-operation the company
has received from the statutory authorities, banks, shareholders and
customers.
Your Directors also wish to thank all their employees for their
dedicated and committed service to the company.
N G Khaitan
Prabir Chakravarti
Directors
Anand Daga
Dated : 14th May, 2014
Vidula Jalan
Place : Kolkata
Mar 31, 2013
The Directors present the 29th Annual Report of the Company and the
Audited Statements of Accounts for the year ended 31st March, 2013. The
summarized Financial Results are given below :-
FINANCIAL RESULTS
(Rs. in lacs)
For the
Year ended For the
Year ended
31st March, 2013 31st March,
2012
Net Sales / Income from operations 8,075.91 7,615.44
Operating Profit before Interest, 81.57 295.10
Finance Charges, Depreciation
and Tax
Less: Interest and Finance Charges 446.03 578.14
Gross Profit/(Loss) before
Depreciation and Tax (364.46) (283.04)
Less: Depreciation 171.47 167.06
Profit/(Loss) before Tax (535.93) (450.10)
Add : Deferred Tax (Net) 181.15 100.68
Net Profit/(Loss) after Tax (354.78) (349.42)
Profit/(Loss) brought forward
from previous year (479.96) (210.54)
Profit/(Loss) available for appropriation (834.74) (559.96)
APPROPRIATIONS :
Transfer (to)/from General Reserve 80.00
Balance carried forward to next year (834.74) (479.96)
DIVIDEND
In view of losses, the Board of Directors has not recommended any
dividend for the financial year 2012-2013.
OPERATIONAL PERFORMANCE
During the year under review, your company has made improvements in
plant operations and changed the product mix in sales. Gross sales have
increased to Rs. 9,106.23 Lacs as compared to Rs. 8,440.01 Lacs in the
previous year, but increase in raw material cost, power and fuel and
transportation could not be passed on to the customers. As a result,
profitability has been impacted adversely.
Production during the year could be maintained at a level of 31,410 MT
as compared to 32,097 MT in the previous year.
In spite of reduced profit margins, your company is continuning its
efforts to achieve better results in the years to come.
CAPITAL
Your company has issued 34,47,000 (Thirty Four Lacs Forty Seven
Thousand Only), 7.5% non-cumulative redeemable preference shares of
Rs.100/- each, to Mangalam Cement Limited against the outstanding loan
amount including interest thereon. In view of the issue of preference
shares to Mangalam Cement Ltd, the authorized share capital of your
company now comprises of Equity Share Capital aggregating to Rs.
250,000,000.00 and Preference Share Capital of Rs. 350,000,000.00.
The issued, subscribed and paid-up share capital as on March 31, 2013
stood at Rs. 527,974,000.00, comprising of equity share
capital of Rs.10 each aggregating to Rs.183,274,000.00 and 7.5%
non-cumulative redeemable preference shares of Rs.100/- each
aggregating to Rs.344,700,000.00.
RAW MATERIAL
Necessary efforts are being made to develop long term fire wood supply
sources from areas adjoining the factory. Raw material costs especially
firewood and resins have increased substantially and have affected
profitability during the year. Other raw materials also have shown an
upward trend in prices.
PLANTATION
Your company has promulgated a policy on plantation activities to help
supply quality raw material to factory with least cost on a continual &
sustainable basis. Some important efforts undertaken during the year
are mentioned below :
Mist Chamber and Nursery: New mist chamber was inaugurated during
January 2013 and this chamber has a capacity to raise one million
quality clonal plants. The objective is to supply farmer with high
quality, high yielding clonal plants at affordable prices.
Lease area replanting: We aim to further plant 300 acres during the
year 2013-14 and all lease areas will have high yielding clonal plants
by 2014-15, which would increase raw material security to our
operations.
Farm Forestry planting: Odisha forest department has invited the wood
based industry to participate in a farm forestry scheme under "Odisha
Forestry Sector Development Project" wherein industry will supply good
quality clonal planting material to small and marginal farmers with
wood buyback arrangement. The scheme provides scope for the farmer to
achieve higher returns from his/her land.
Private wood supply: Balance wood requirement comes from our private
suppliers. Efficient vendor development is essential for long-term
consistent supply of quality wood.
INDUSTRY SCENARIO:
The Indian industry has a large opportunity as medium density
fibreboard (MDF) is gradually replacing traditional plywood. Increased
urbanization and lifestyle is fueling demand for readymade furniture
and fittings both in offices and homes. However, industry''s
profitability is squeezed between cheaper imports from ASEAN region and
rising raw material prices - specially wood.
MARKETING & SALES
With wide distribution network, quality products and competitive
pricing your company has improved its brand image considerably in the
market.
We pride ourselves with an impeccable client satisfaction record, and
strive to maintain this enviable reputation. By offering high quality
products, we have gained the trust of numerous reputed organizations.
They are confident of our abilities as a customer- centric
organization.
Our range is available in different thicknesses and sizes as per the
needs of the customers which meet the set quality norms and standards.
Focus is being given to on-going development of value added products
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The company has adequate internal control systems in all its areas of
operations, which is commensurate with its size. The systems are
operating properly by utilizing the services of Internal and external
auditors periodically and also it''s own competent and qualified
personnel. The adequacy of the system has also been deemed satisfactory
by the statutory auditors. The Organization is already working on SAP
platform for last so many years.
CONSERVATION OF ENERGY ETC.
a) Conservation of Energy & Technology Absorption
The management is giving top priority to energy conservation and
conservation of resources. Lower electricity consumption is achieved
through control of maximum demand and maintaining high power factor.
FORM ÂA'' of the Companies (Disclosure of particulars in the
Report of Board of Directors) Rules, 1988 is not required to be filled
as our industry is not included in the Schedule to the Rules.
b) Foreign Exchange Earnings and Outgo
There has been no foreign exchange earnings during the year under
review. However the total expenditure on foreign exchange during the
year under review was equivalent to Rs.234.89 Lacs. It consists of
imports of raw materials, stores & spares.
PUBLIC DEPOSITS
The Company has neither invited nor accepted any deposits from the
public within the meaning of Section 58(A) of the Companies Act, 1956
during the year under review. As such, no amount of principal or
interest was outstanding on the date of the Balance Sheet.
LISTING WITH THE STOCK EXCHANGES
The Company is listed with the National Stock Exchange of India Ltd and
Bombay Stock Exchange Limited. The annual listing fee to both the stock
exchanges has been paid on time.
DEMATERIALIZATION OF THE SHARES OF THE COMPANY
Trading in shares of the company has been compulsorily in
dematerialized mode by all investors as per directives given by SEBI.
Accordingly, the equity shares of the company are available for
dematerialization under ISIN INE 805B01012 with CDSL and NSDL.
DIRECTORS
Shri N.G. Khaitan & Shri Anand Daga retire by rotation in the
forthcoming Annual General Meeting and being eligible, offer themselves
for re-election.
AUDITORS'' REPORT
Auditors'' Report to the shareholders does not contain any
qualification, reservation, or adverse remarks and are self
explanatory.
STATUTORY AUDITORS
M/s. S M Daga & Co., Chartered Accountants (Firm Registration No.
303119E), auditors of the company will retire at the ensuing Annual
General Meeting and are eligible for re-appointment and they have
confirmed that their re-appointment, if made, shall be within the
limits of Section 224 (1B) of the Companies Act, 1956. The Board
recommends their re-appointment.
COST AUDIT
Pursuant to the directives of the Central Government under the
provisions of Section 233-B of the Companies Act, 1956, a qualified
cost auditor has been appointed to conduct compliance reporting for the
financial year 2012-13 and audit the cost records of your company for
the financial year 2013-14.
CORPORATE GOVERNANCE
A separate report on Corporate Governance is enclosed as part of this
Annual Report. Certificate from the Auditors of the Company regarding
compliance with the Corporate Governance norms as stipulated in Clause
49 of the Listing Agreement is annexed to the report on Corporate
Governance.
CASH FLOW ANALYSIS
In conformity with the provisions of Clause 32 of the Listing
Agreement, Cash Flow Statement for the financial year ended 31st March,
2013 is annexed hereto.
FINANCE
Your company thanks its consortium bankers for their continued support.
OPPORTUNITIES
The strong growth in housing and retailing will drive renewed growth
for medium density fibreboard (MDF) over the years to come. With
increasing per capita income, preference for readymade furniture is
expected to grow at a rapid rate made from medium density fibreboard
(MDF) which will be cost competitive vis Âa-vis traditional wood and
plywood.
Your company is taking initiatives to explore possibilities in new
areas such as office and hotel interiors, school furniture, retail
counters, ATM interiors, Porta cabins among others.
DIRECTORS'' RESPONSIBILITY STATEMENT
In terms of provisions of Section 217(2AA) of the Companies Act, 1956,
your Directors declare that:
i. in preparation of Annual Accounts, applicable accounting standards
have been followed and that no material departure has been made from
the same;
ii. 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 view of the state of affairs of
the company for Financial Year ended 31st March, 2013 and of the profit
of the company for that year;
iii. they have taken proper and sufficient care for maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv. they have prepared the annual accounts on a going concern basis.
HUMAN RESOURCES
Your company has been able to create a favourable work environment that
encourages continual learning which leads to innovations at work and
sustainable growth. Good industrial relations is prevailing in the
plant. The permanent workers union and casual labour union both are
supportive and taking active part in continual improvement projects.
PERSONNEL
The Company has no employee in respect of whom information under
Section 217 (2A) of the Companies Act, 1956 is required to be annexed.
CORPORATE SOCIAL RESPONSIBILTY:
As a part of corporate social responsibility activities, your company
aims at creating sustainable livelihood capabilities and increasing the
level of prosperity of the local community. Your company has undertaken
measures for providing health and education facilities, infrastructure
support to the local community and other welfare activities.
To promote cultural harmony among people, your company regularly
supports various religious and social programmes. Your company makes
its contribution to a Govt. sponsored annual event called Mondei" a
local fair which is celebrated with a wide participation from local
community. Also, your company has provided a full set of computer
system with allied equipment including printer, table and chair to the
resident students of Utkal Bal Ashram, Sindhigura, an orphanage run by
Government of Odisha.
ACKNOWLEDGEMENT
Your Directors take this opportunity to place on record their deep
appreciation for the whole-hearted and sincere co-operation the company
has received from the statutory authorities, banks, shareholders and
customers.
Your Directors also wish to thank all their employees for their
dedicated and committed service to the company.
N G Khaitan Prabir Chakravarti
S K Parik Directors
Dated : May 8, 2013 Anand Daga
Place : Kolkata Vidula Jalan
Mar 31, 2012
The Directors present herewith the 28th Annual Report on the business
and operations of the company and the audited statement of accounts for
the financial year ended 31 March, 2012.
FINANCIAL RESULTS (Rs. in lacs)
Current
Year ended Previous
Year ended
31st March,
2012 31st March,
2011
Net Sales / Income from operation 7,615.44 5,109.65
Operating Profit before Interest and 295.12 80.20
Finance Charges, Depreciation and Tax
Less: Interest and Finance Charges 578.14 483.58
Gross Profit/(Loss) before Depreciation and Tax (283.02) (403.38)
Less: Depreciation 167.06 152.56
Profit/(Loss) before Tax (450.08) (555.94)
Less: Provision for Tax:
(a) Income Tax /Wealth Tax (0.02) -
(b) Deferred Tax 100.68 187.96
Net Profit/(Loss) after Tax (349.42) (367.98)
Profit brought forward from previous year (210.54) 157.37
Profit/(Loss) available for appropriation (559.96) (210.61)
APPROPRIATIONS
(a) Transfer (to)/from General Reserve 80.00 -
(b) Excess Provision of Wealth Tax written back - 0.07
(c) Balance carried forward to next year (479.96) (210.54)
DIVIDEND
The Board of Directors has not recommended a dividend for the financial
year 2011-2012, in view of losses.
OPERATIONAL PERFORMANCE
In the year under review, the company's performance bounced back after
the setback due to the fire in the plant in the Financial Year 2010-11.
Both production and sales showed significant improvement.
Particulars 2011-12 2010-11
Production (MT) 32097 18157
Gross Sales (Lacs) 8440.01 5584.61
PBDT (Lacs) 295.12 80.20
During the year under review, your Company marked a record production
of 32097 MT vis a vis 18157 MT in the previous year. The PBDT for the
year was Rs. 295.12 lacs as against Rs. 80.20 lacs in the previous
year. Furthermore, the gross sales have increased to Rs. 8,440.01 lacs
as against Rs. 5,584.61 lacs in the previous year.
The company has made several improvements during the year and will be
continuing its efforts to minimize losses and improve profitability
during the ensuing year.
FINANCE
Your Company thanks its consortium bankers for their continued support.
AMALGAMATION WITH MANGALAM CEMENT LTD.
In view of the long delay, the scheme of amalgamation of the Company
with Mangalam Cement Ltd. was withdrawn by them. Accordingly, we have
initiated the process of withdrawal of our application with the Hon'ble
High Court of Odisha.
RAW MATERIAL
Intensive efforts have been done to develop long term fire wood supply
sources from areas adjoining the factory. Sourcing of formalin from
modern chemical plants has improved quality and helped reduce
inventories. Other raw materials remained stable with an up trend in
prices.
PLANTATION
The Plantation Division's vision is to supply quality raw material to
factory with least cost on sustainable basis. Your company procures
legally harvested firewood as raw material through farm forestry
activities by adapting sustainable silviculture practices and
co-ordinates with local farmers as a part of company's social and
environmental commitment.
During the last year, 3 lacs quality clonal plants were raised and
planted. A new Apical shoot technique through sand culture has
successfully saved cost and time. The future plan is to raise up to 15
lacs plants in the current year and to raise the capacity over 20 lacs
plants by 2014.
In addition to farmers, private firms who own land or have leased
lands, are being encouraged to grow Eucalyptus with our assurance of
buy back of the firewood. Over 350 acres of plantation have been done
in this year and such acreage will be significantly increased in the
coming years to enhance long term sustainable sources of firewood.
In the Government sponsored annual event 'Mondei' at Jeypore, your
company showcased its Plantation capabilities using New Plantation
Technology, High Yielding Clonal plants and Nursery methods. This has
encouraged many farmers to cultivate Eucalyptus Plantations in their
land.
The Clean Development Mechanism certification audit is in full progress
and we are also on the verge of getting Forest Stewardship Council
certification which is a proof that our source of firewood is ethical
and sustainable.
MARKETING & SALES
The marketing network has been strengthened and sales have considerably
increased. The range of products has been increased and regularity of
supplies has helped the company to become a preferred vendor to OEMs. A
dedicated marketing team has been constituted to educate bulk users,
both Government and private regarding cost effectiveness and advantages
of MDF over conventional plywood.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate Internal Control Systems in all its areas of
operation, which is commensurate with its size. A reputed Firm of
Chartered Accountants has been appointed as the Internal Auditors to
carry out thorough audit of the Company's functions. The adequacy of
the system has also been deemed satisfactory by the Auditors.
CONSERVATION OF ENERGY ETC.
a) Conservation of Energy & Technology Absorption
The management is giving top most priority to Energy Conservation and
Conservation of Resources. Lower Electricity Consumption is achieved
through control of Maximum Demand and maintaining high Power Factor.
FORM 'A' of the Companies (Disclosure of particulars in the Report of
Board of Directors) Rules, 1988 is not required to be filled as our
industry is not included in the Schedule to the Rules.
b) Foreign Exchange Earnings and Outgo
There has been no foreign exchange earnings during the year under
review. However the total outgo of foreign exchange during the year
under review was equivalent to Rs.129.68 Lacs. It consists of imports
of raw materials, stores & spares.
PUBLIC DEPOSITS
The Company has neither invited nor accepted any deposits from the
public within the meaning of Section 58(A) of the Companies Act, 1956
during the year under review. As such, no amount of principal or
interest was outstanding on the date of the Balance Sheet.
LISTING WITH THE STOCK EXCHANGES
The Company is listed with The National Stock Exchange of India Ltd and
Bombay Stock Exchange Limited. The annual Listing Fee to both the stock
exchanges has been paid on time. DEMATERIALIZATION OF THE SHARES OF
THE COMPANY Trading in shares of the Company has been compulsorily in
dematerialized mode by all investors as per directives given by SEBI.
Accordingly, the Equity Shares of the Company are available for
dematerialization under ISIN INE 805B01012 with CDSL and NSDL.
DIRECTORS
Smt. Vidula Jalan & Shri Prabir Chakravarti retire by rotation in the
forthcoming Annual General Meeting and being eligible, offer themselves
for re-election.
AUDITORS' REPORT
Auditors' Report to the Shareholders does not contain any
qualification, reservation, or adverse remarks.
STATUTORY AUDITORS
M/s. S M Daga & Co., Chartered Accountants (Firm Registration No.
303119E), Auditors of the Company will retire at the ensuing Annual
General Meeting and are eligible for re-appointment and they have
confirmed that their re-appointment, if made, shall be within the
limits of Section 224 (1B) of the Companies Act, 1956. The Board
recommends their re-appointment.
CORPORATE GOVERNANCE
In terms of Clause 49 of the Listing Agreement, the Company has
implemented the Code of Corporate Governance and a separate section has
been included in this report. The report on Corporate Governance and
the declaration by the Manager in respect of Code of Conduct for all
Board Members and Senior Management personnel and the certificate
issued by M/s. S M Daga & Co., Chartered Accountants (Firm Registration
No. 303119E), statutory auditors of the company in confirmation of the
compliance as per requirement of Clause 49 of the Listing Agreement,
with the stock exchanges have been set out in Annexure I.
CASH FLOW ANALYSIS
In confirmity with the provisions of Clause 32 of the Listing
Agreement, Cash Flow Statement for the financial year ended 31st March,
2012 is annexed hereto.
OPPORTUNITIES
Nearly 70% of the Country's requirements of MDF are met by imports. The
volatility in the currency prices caused many importers to focus on
developing long term relationship with domestic manufacturers. Domestic
OE producers can also source urgent requirements and special materials
at a short notice from domestic producers. The preference for ready to
occupy homes and offices is encouraging the use of MDF Furniture. This
augurs well for this sector.
However the imports of knock down furniture at low prices is hindering
the growth of OEM'S manufacturing furniture in the domestic market. The
Indian Real Estate sector is growing at a lower rate than projected
rate of growth.
Your company is at an advanced stage of developing E-1 Grade
(Formaldehyde Free) MDF. Such products find preference in developed
countries and there will be an increasing demand for the same in our
country in coming times.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 217(2AA) of the Companies Act, 1956 with respect to
Directors' responsibility, it is hereby confirmed -
That in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanations
relating to material departures;
That the Directors had selected such accounting policies and applied
them consistently and made judgements 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, 2012 and of the profit or loss of the
Company for that period;
That the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
That the Directors had prepared the annual accounts on a going concern
basis.
HUMAN RESOURCES
The long term agreements with Permanent Workers Union & Casual Workers
Union have been signed and good Industrial Relations environment is
prevailing. The workmen actively participate in the quality and output
improvement efforts.
Young management professionals have been inducted with the Marketing
Department to work closely with the customers to develop new products &
applications. Technical & Financial professionals have been recruited
in the plant and accounts departments. The Company gives high emphasis
to knowledge and skill development.
'Managerial Effectiveness Improvement' programmes have been conducted
by various institutes and professional trainers including Xavier
Institute of Management, Bhubaneswar.
PERSONNEL
The Company has no employee in respect of whom information under
Section 217 (2A) of the Companies Act, 1956 is required to be annexed.
CORPORATE SOCIAL RESPONSIBILTY:
Two villages have been selected where in your company participates in
the social activities and building of infrastructure for the local
community. In Sontheiput village, we have helped the Village community
with a shelter for their praying area. The local people are very
appreciative of the support extended. In Khuntia village, your Company
has made a similar contribution to the local community.
As part of our commitment to the growth and prosperity of our Farmers
in the district, our Farm Forestry division has revived 28 acres of
Gall disease affected fields with free clonal saplings, along with
imparting technical knowledge and periodic overview by our trained
plantation supervisors.
In U.G. Upper Primary School (Kusumi) and Middle English School (Sonna
Kusumi), we distributed school bags to all 300 students. Also, your
Company's executives have adopted 15 meritorious students of these
schools by offering School Text Books, Tuition fees, Stationery &
Uniforms till Class XII. Students of the pre primary section were found
coming to School barefoot everyday. Your company distributed sandals
to these young children.
These are small but steady steps your company has undertaken for
betterment of their local community. We hope to be able to grow our
efforts and reach out to an even wider population with time.
ACKNOWLEDGEMENT
Your Directors take this opportunity to place on record their deep
appreciation for the whole-hearted and sincere co-operation the Company
has received from the Statutory Authorities, Banks, Shareholders and
Customers.
Your Directors also wish to thank all the Employees for their dedicated
and committed service to the Company.
N G Khaitan
Prabir Chakravarti
S K Parik Directors
Dated : 10th day of May, 2012 Anand Daga
Place : Kolkata Vidula Jalan
Mar 31, 2011
Dear Members,
The Directors present herewith the 27th Annual Report on the business
and operations of the company and the audited statement of accounts for
the financial year ended 31 March, 2011.
FINANCIAL RESULTS
(Rs. in lacs)
2010-11 2009-10
Turnover 5584.61 7199.60
PBDIT 80.20 427.01
Interest 483.58 454.78
Depreciation 152.56 113.44
PBT (555.94) (141.21)
Less : Provision for Tax
- Deferred Tax 187.96 18.08
- Current Tax - -
- Wealth Tax - -
- Fringe Benefit Tax - -
Net Profit (367.98) (123.13)
Add : Balance B/F 157.37 280.50
Appropriations:
Profit available for appropriation (210.61) 157.37
Less : Proposed Equity Dividend 0.00 0.00
Tax on proposed Equity Dividend 0.00 0.00
General Reserve 0.00 0.00
Surplus carried to Balance Sheet (210.61) 157.37
CONSERVATION OF ENERGY ETC.
a) Conservation of Energy & Technology Absorption
Energy conservation measures, to the extent feasible received top
priority from the Management of your Company. Power Consumption for the
year was marginally higher due to lower production and longer downtime.
Greater emphasis is now being placed towards the Research & Development
facility.
FORM 'A' of the Companies (Disclosure of particulars in the Report of
Board of Directors) Rules, 1988 is not required to be filled as our
industry is not included in the Schedule to the Rules.
b) Foreign Exchange Earnings and Outgo
During the year under review, the foreign exchange earnings from export
sales amounted to Rs 16.35 Lacs & the total outgo of foreign exchange
(including cost of imports, raw materials, stores & spares) was
equivalent to Rs 101.76 Lacs.
OPPORTUNITIES
Burgeoning urban India: Urban India accounts for 30 percent of its
population and 52 percent of GDP. According to consultancy firm
McKinsey's estimates, urban India will account for two-thirds of
incremental consumption demand. The increased urban expenditure will be
driven by an increase in population growth and increase in urbanisation
from 30 percent to 37 percent (318 mn to 523 mn).
Middle-class: India's middle-class is expected to account for 85
percent of urban households and 70 percent of consumption by 2015; the
upper-class will account for 7 percent of households and 28 percent of
consumption.
Young population: India's working population is among the world's
youngest working populations. Around two-thirds of the Indian
population is under 35 years and more than 60 percent of the population
will be in the working age group (15 Ã 60 years) by 2050. The median
age of the population is estimated at 23 years against the world median
age of 33 years.
Rising per capita income: India's per capita income grew from Rs 38,695
per annum in 2008-09 to Rs 40,745 per annum in 2009- 10. Overall per
capita consumption increased 2.7 percent from Rs 23,012 per annum to Rs
23,626 per annum.
Real estate growth : The Indian real estate sector accounts for 4.5
percent of gross domestic product with urban housing accounting for
3.13 percent. Over the next five years, this contribution is expected
to rise to 6 percent. India's property sector may attract up to USD
12.11 billion in investment over a five-year period. Investments in
commercial real estate are likely to increase three-fold in five years.
RISKS
- Cheap imports
- Competition from both unorganised and other organised players,
leading to difficulties in improving market share.
- Shortage of primary raw material (wood fibre)
- Stringent regulatory norms regarding concerns over the environment.
DIVIDEND
The Board of Directors has not recommended dividend for the financial
year 2010-2011, in view of losses.
FINANCE
Your Company thanks its consortium bankers for their continued support.
LISTING WITH THE STOCK EXCHANGES
The Company is listed with The National Stock Exchange of India Ltd and
Bombay Stock Exchange Limited. The annual Listing Fee to both the stock
exchanges has been paid on time.
PUBLIC DEPOSITS
The Company has neither invited nor accepted any deposits from the
public within the meaning of Section 58(A) of the Companies Act, 1956
during the year under review. As such, no amount of principal or
interest was outstanding on the date of the Balance Sheet.
CORPORATE GOVERNANCE
In terms of clause 49 of the Listing Agreement, the Company has
implemented the Code of Corporate Governance and a separate section has
been included in this report. The report on Corporate Governance and
the declaration by the Manager in respect of Code of Conduct for all
Board Members and Senior Management personnel and the certificate
issued by M/s. S M Daga & Co., Chartered Accountants ((Firm
Registration No. 303119E), statutory auditors of the company in
confirmation of the compliance as per requirement of clause 49 of the
Listing Agreement with the stock exchanges have been set out in
Annexure I.
CASH FLOW ANALYSIS
In conformity with the provisions of Clause 32 of the Listing
Agreement(s), cash flow statement for the financial year ended 31st
March 2011 is annexed hereto.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 217(2AA) of the Companies Act, 1956 with respect to
Directors' responsibility, it is hereby confirmed -
That in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanations
relating to material departures;
That the Directors had selected such accounting policies and applied
them consistently and made judgements 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, 2011 and of the profit or loss of the
Company for that period;
That the Directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
That the Directors had prepared the annual accounts on a going concern
basis.
DIRECTORS
Shri S K Parik retires by rotation in the forthcoming Annual General
Meeting and being eligible, offers himself for re-election.
Shri Anand Daga has been appointed as Additional Director and holds
office upto the date of the ensuing Annual General Meeting. Notice has
been received from a Shareholder of the Company proposing his
candidature for the Office of the Director.
AUDITORS' REPORT
Auditors' Report to the Shareholders does not contain any
qualification, reservation, or adverse remarks.
STATUTORY AUDITORS
M/S. S M Daga & Co., Chartered Accountants ((Firm Registration No.
303119E), Auditors of the Company will retire at the ensuing Annual
General Meeting and are eligible for re-appointment and they have
confirmed that their re-appointment, if made, shall be within the
limits of Section 224 (1B) of the Companies Act, 1956. The Board
recommends their re-appointment.
DEMATERIALIZATION OF THE SHARES OF THE COMPANY
Trading in shares of the Company has been compulsorily in
Dematerialized mode by all investors as per directives given by SEBI.
Accordingly, the Equity Shares of the Company are available for
Dematerialization under ISIN INE 805B01012 with CDSL and NSDL.
PERSONNEL
The Company has no employee in respect of whom information under
Section 217 (2A) of the Companies Act, 1956 is required to be annexed.
ACKNOWLEDGEMENT
Your Directors take this opportunity to place on record their deep
appreciation for the whole-hearted and sincere co-operation the Company
has received from the Statutory Authorities, Banks, Shareholders and
Customers.
Your Directors also wish to thank all the Employees for their dedicated
and committed service to the Company.
Directors
Shri N G Khaitan
Shri S K Parik
Shri Prabir Chakravarti
Smt Vidula Jalan
Shri Anand Daga
Dated: 25th day of April, 2011
Place : Kolkata
Mar 31, 2010
The Directors are happy to present the 26th Annual Report with the
Audited Statement of Accounts for the year ended March 31,2010.
FINANCIAL RESULTS
(Rs. in lacs)
2009-10 2008-09
Turnover 7199.60 7568.67
PBDIT 427.01 820.46
Interest 454.78 416.19
Depreciation 113.44 110.27
PBT (141.21) 294.00
Less: Provision for Tax
- Deferred Tax 18.08 99.57
- Current Tax - 34.00
- Wealth Tax - 0.20
- Fringe Benefit Tax - 11.00
Net Profit (123.13) 149.23
Add : Balance B/F 280.50 274.92
Appropriations:
Profit available for appropriation 157.37 424.15
Less: Proposed Equity Dividend 0.00 109.96
Tax on proposed Equity Dividend 0.00 18.69
General Reserve 0.00 15.00
Surplus carried to Balance Sheet 157.37 280.50
GENERAL REVIEW
During the year under review, your Company incurred a Net Loss after
Tax of Rs. 123.13 Lacs as against a Profit after tax of Rs.149.23 Lacs
last year. The turnover of the Company also came down from Rs.7568.67
Lacs previous year to Rs.7199.60 Lacs this year. The production was
also lower at 29,386 Mt as compared to 32,679 Mt last year. The reasons
for loss are stated as below:
The old German Sander machine was frequently under breakdown as it was
unable to meet the total sanding load. This seriously affected surface
smoothness of the MDF Board and also became a serious bottleneck in
processing of raw boards.
The new Chinese Sander machine was commissioned in August2009 in
series with the old Sander machine. This helped in overcoming the
sanding problem and surface smoothness also improved substantially
thereby regaining our product acceptability in the market.
In June-July2009 the old boiler had a series of breakdowns. Since the
repair would have meant a very long production stoppage, the boiler was
kept running although at a much lower efficiency.
The new boiler from Thermax was commissioned during
November-December2009. With its commissioning the problem of steam
shortage/non-availability was overcome. Also the new boiler being of
higher efficiency, the fuel consumption has come down appreciably.
Timber, the main raw material, is a seasonal item and needs to be
stocked for the off-season months. However, during 2009-10, because of
the financial crunch, the Company could not procure cheaper timber from
Orissa during season and had to purchase costly timber from Andhra
Pradesh during off-season.
The Company incurred heavy loss in trading of Imported Boards. It has
since been discontinued.
Eucalyptus is the main species of wood used by the Company for
manufacture of MDF. However, eucalyptus plantations across entire
south-east Asia were very severely affected by gall disease. Millions
of eucalyptus saplings and trees died due to the disease so much so
that even Indian banks decided to stop financing of eucalyptus
plantations. As a result, the Companys operations of raising and
selling eucalyptus seedlings to farmers had to be discontinued.
Further there was a serious fire incident in the Hydraulic Room of the
factory in the beginning of new financial year, in which all the
equipments therein were severely burnt and damaged. Fortunately, there
was no human injury or loss of life. All these equipments were
originally imported from Germany. Actions for both, repairing these
equipments as well as replacing them have been initiated. As the
Hydraulic Room is the nerve centre of the MDF Plant, MDF production
cannot be started till the Hydraulic System is put back into operation.
CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION
During the year under review, power consumption was marginally higher
at 447 units/MT compared to 438 units/MT in the previous year. This was
due to lower production and higher downtime.
Energy conservation measures, to the extent feasible, received top
priority from the Management of your Company. No specific investment
proposals are envisaged.
Form A of Companies (Disclosure of particulars in the Report of Board
of Directors) Rules, 1988 is not required to be filed as our industry
is not included in the Schedule to the Rules.
The company did not import any technology during the year under review.
However the company continues to utilize R&D facilities available with
it.
FOREIGN EXCHANGE EARNINGS AND OUTGO
There has been foreign exchange earnings of Rs 7.67 Lacs during the
year under review from export sales. However the total outgo of foreign
exchange during the year under review is equivalent to Rs 405.76 Lacs.
It consists of import of raw materials, stores & spares during the
year.
DIRECTORS
Shri N G Khaitan retires by rotation in the forthcoming Annual General
Meeting and being eligible, offers himself for re-election.
Shri Anand Daga has been appointed as Additional Director and holds
office upto the date of the ensuing Annual General Meeting.
AUDITORS
M/S. S M Daga & Co., Chartered Accountants, Kolkata, retires at the
ensuing Annual General Meeting and are eligible for re-appointment.
MANAGEMENT DISCUSSION & ANALYSIS
Management discussion and analysis have been appended to this report in
terms of the Listing Agreement and marked Annexure II.
DEMATERIALIZATION OF THE SHARES OF THE COMPANY
Trading in shares of the Company has been compulsorily in
dematerialized mode by all investors as per directives given by SEBI.
Accordingly, the Equity Shares of the Company are available for
dematerialization under ISIN INE 805B01012 with CDSL and NSDL.
PERSONNEL
The Company has no employee in respect of whom information under
Section 217 (2A) of the Companies Act, 1956 is required to be annexed.
ACKNOWLEDGEMENT
Your Directors take this opportunity to place on record their deep
appreciation for the whole-hearted and sincere co-operation the Company
has received from the Statutory Authorities, Banks, Shareholders and
Customers.
Your Directors also wish to thank all the Employees for their dedicated
and committed service to the Company.
Sri N G Khaitan
Sri S K Parik
Sri Prabir Chakravarti Directors
Dated: 1st May, 2010 Smt Vidula Jalan
Place: Kolkata Sri Anand Daga