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Directors Report of Mangalam Timber Products Ltd.

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 ‘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 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 –a-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 – 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

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