Mar 31, 2015
Dear Members,
We have pleasure in presenting our 36th Annual Report together with the
audited accounts of the Company for the year ended 31st March, 2015.
Performance
The working of the Company during the year under review has been
highlighted below:
15 Months
Year Ended Ended
31.03.2015 31.03.2014
Production (Tonnes) 7499 32886
Rs. in Lacs Rs. in Lacs
Sales 2828 11961
Other Income 81 235
2909 12196
Gross Profit/(Loss) -2583 -1986
Less : Interest 2056 2406
Depreciation for the year 912 949
Profit Before Exceptional Items -5551 -5341
and Tax
Exceptional Items - 1468
Profit for the year before Tax -5551 -6809
Less : Provision for taxation - -
Profit / (Loss) after taxation -5551 -6809
Profit / (Loss) brought forward -14463 -7654
from last year
Loss carried to Balance Sheet -20014 -14463
Operation & Reason for Losses
During the year under review, the Company has manufactured 7499 tons of
paper with net sale of Rs.28.28 crores. In October, 2014, the Central
Pollution Control Board (CPCB) vide its Letter
No.D-23012/1/PCI-III/5944-5948 stopped the production on all the three
paper machines of the Company. Due to which, the financial position
further deteriorated due to Nil production in last five months of this
financial year. Conditional clearance of the Pollution Board was
received in March, 2015. The Company is exploring various avenues to
infuse the funds for revival of the Company.
Regarding market scenario, we would like to inform, that, due to
unrestricted duty free import of Newsprint, the price of Newsprint has
gone down by nearly 10% during the year. The new plant set up is mainly
for Newsprint and favorable market condition is a necessity to restart
the plant. The Company is making all effort to comply with Pollution
Control norms, which now required continuous online monitoring and
investment.
Compliance of Sick Industrial Companies (Special Provisions) Act, 1985
The Company has filed a Reference Application under Section 15 (1) of
Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) with
Hon'ble BIFR which was registered as Case No. 29/2013. In the hearing
held on 26th September, 2013, the Hon'ble BIFR declared the Company as
'Sick' u/s 3 (1) (o) of SICA and appointed Bank of Baroda as the
Operating Agency (OA) u/s 17 (3) of the Act to prepare a Rehabilitation
Scheme for the Company. The Company has submitted the Draft
Rehabilitation Scheme (DRS) to Bank of Baroda (OA) and other
stakeholders with a copy to Hon'ble BIFR. The last date of hearing was
to be held on 24th April, 2014, was postponed sine die.
Indian Bank has sold its loan to the ARC M/s JM Financial Asset
Reconstruction Company Pvt. Ltd who have filed miscellaneous
application with Hon'ble BIFR substitution of its name in place of
Indian Bank.
The revival of the Company is dependent on approval of Draft
Rehabilitation Scheme at the earliest.
Share Capital
The paid up Equity Share Capital as on 31st March, 2015 was Rs.
34,82,72,240/-. During the year under review, the Company has not
issued shares with differential voting right nor granted stock options
or sweat equity.
Directors
Shri Badri Vishal Tandon, Director, is retiring by rotation, being
eligible for re-election, has given his consent for the same.
Pursuant to Sections 161 of the Companies Act, 2013, Smt Lakshmi Kumari
(DIN: 07134683) was appointed as Additional Director by the Board in
the category of Non-Executive Director who is liable to retire by
rotation with effect from 31st March, 2015. Smt Lakshmi Kumari will
hold the office up to the date of ensuing Annual General Meeting of the
Company and is eligible, offers herself for re-appointment.
The Brief resume and other details relating to the Directors, who are
to be appointed/ re-appointed as stipulated under Clause 49 of the
Listing Agreement, are furnished in the Annual Report.
Further, all independent Directors have given declarations that they
meet the criteria of independence as laid down under Section 149 (6) of
the Companies Act, 2013 and Clause 49 of the Listing Agreement. None of
the Director is disqualified under Section 164 (2) of the Companies
Act, 2013 and Clause 49 of the Listing Agreement with the Stock
Exchange.
Corporate Governance Code
Your Company has complied with all the mandatory requirements of
Corporate Governance. The Report on Corporate Governance as stipulated
under Clause 49 of the Listing Agreement with the Bombay Stock Exchange
forms an integral part of the Directors' Report.
The Statutory Auditors of the Company have examined the Company's
compliance to the Code of Corporate Governance and have certified the
same, as required under SEBI guidelines. The certificate is reproduced
with Corporate Governance Report to the Members.
Management's Discussion and Analysis Report
Management's Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Bombay
Stock Exchange, is presented in a separate section forming part of the
Annual Report.
Auditors and Auditor's Report
Statutory Auditors
M/s. P.L.Gupta & Co., Chartered Accountants, Statutory Auditors of the
Company, retire from their Office at the conclusion of ensuing Annual
General Meeting. They are, however, eligible for re-appointment and
have furnished certificate to the effect that their appointment, if
made, will be in accordance with the limits specified in Sub- Section
(I-B) of Section 139 of the Companies Act, 2013. Your Directors
recommend their re-appointment up to the conclusion of next annual
general meeting.
Auditor's Qualification/ Remarks
With regard to qualifications/ remarks in Auditor's report and Annexure
thereto, (a) as mentioned in Note No. 41 of financial statements, the
balances of some of the trade receivables, trade payables, lender and
loans and advances are subject to confirmation/ reconciliation and
subsequent adjustments, if any. Due to closure of the Plant, necessary
verification has been delayed, however, the Management is of the view
that there is no material adjustment in this regard.
With respect to qualification (b) as mentioned in Note No. 43 of
financial statements, the Company became a sick industrial company
within the meaning of Section 3 (1) (o) of Sick Industrial Companies
(Special Provisions) Act, 1985 (SICA) due to erosion of its entire net
worth and the Company was declared a Sick Industrial Company by Hon'ble
BIFR on 26th September, 2013. The Company has submitted the Draft
Rehabilitation Scheme (DRS) to operating agency, Bank of Baroda. The
Company has provided interest on Term Loan and other loans of Indian
Bank and Bank of Baroda @ 10.50% with effect from 1st January, 2013 in
accordance with Guidelines and Checklist for preparation of Draft
Rehabilitation Scheme as provided by Hon'ble BIFR.
With respect to qualification (c) as mentioned in Note No. 29 of
financial statements, the Company has not recognized additional net
Deferred Tax Asset during the year. Net Deferred Tax Assets of Rs.14
crores was recognized for the year ended 31st March, 2012 based on the
future profitability projections by the management. The financial
statement has been drawn upon going concern assumption.
Cost Auditor
Pursuant to Section 148 of the Companies Act, 2013, read with the
Companies (Cost Records and Audit) Amendment Rules, 2014, the cost
audit records maintained by the Company in respect of its paper
activity is required to be audited. Your Directors had, on the
recommendation of the Audit Committee, appointed Shri Rakesh Mishra,
Cost Accountant, as Cost Auditor for auditing the cost accounts of the
Company for the Financial Year 2015-16 at a remuneration of Rs.25,000/-
(Rupees twenty five thousand only). As required under the Companies
Act, 2013, the remuneration payable to the Cost Auditor is required to
be placed before the Members in the general meeting for ratification.
Accordingly, a Resolution seeking member's ratification for the
remuneration payable to Shri Rakesh Misra , Cost Auditor is included in
the Notice convening the Annual General Meeting.
The Company has received a letter from him to the effect that his
re-appointment would be within the limits prescribed under Section
141(3)(g) of the Companies Act, 2013 and that he is not disqualified
for such re-appointment within the meaning of Section 141 of the
Companies Act, 2013.
Secretarial Auditor
The Board of Directors of the Company have appointed M/s. Adesh Tandon
& Associates, Company Secretaries , as the Secretarial Auditor of the
Company for the financial year 2014-15, in terms of Section 204 of the
Companies Act, 2013 and the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014.
The Report of the Secretarial Audit is annexed herewith as Annexure A
and forms an integral part of this Report. The comments mentioned in
Secretarial Audit Report are self explanatory.
Extract of Annual Return
Pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12(1) of
the Company (Management & Administration) Rules, 2014, extract of
Annual Return of the Company is annexed herewith as Annexure B in Form
MGT-9 to this Report.
Particulars of Employees
None of the Employee of the Company was in receipt of total
remuneration of Rs.60,00,000/- during the financial year under review
or Rs.5,00,000/- per month.
Information required pursuant to Section 197 read with Rule 5 of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 is annexed herewith as Annexure C and form an integral part of
this Report.
Deposits
The Company has not accepted any deposit under Section 73 or Section 76
of the Companies Act, 2013 read with the Companies (Acceptance of
Deposit) Rules, 2014 during the year under review.
Particulars of conservation of energy, technology absorption and
foreign exchange earnings and outgo
Particulars with respect to conservation of energy, technology
absorption and foreign earnings and outgo pursuant to Section 134(3)(m)
read with the Companies (Accounts) Rules, 2014 for the year ended 31st
March, 2015 are provided in Annexure D to this Report.
Directors' Responsibility Statement
Pursuant to the requirement under Section 134(3)(c) of the Companies
Act, 2013 with respect to Directors' Responsibility Statement, it is
hereby confirmed:
I) that in the preparation of the annual accounts for the year ending
31st March, 2015 the applicable accounting standards had been followed
along with proper explanation relating to material departures, if any;
II) that such accounting policies have been selected 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 at the end of the financial year ended 31st March, 2015 and
of the profit or loss of the Company for that period;
III) that proper and sufficient care has been taken 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;
IV) that the annual financial statements for the year ending 31st
March, 2015 have been prepared on a 'going concern' basis;
V) that proper internal financial controls to be followed by the
Company and that such internal financial controls are adequate and were
operating effectively;
VI) that systems to ensure compliance with the provisions of all
applicable laws were in place and that such systems were adequate and
operating effectively.
Disclosures
Audit Committee
The Audit Committee comprises of five Directors namely Shri Badri
Vishal Tandon, non-executive non independent Director and four
independent directors, namely Shri C.M. Krishna, Brig. (Retd.) Shri
Rajeev Lochan Singh SC, Shri Saran Vinod and Shri Atul Seth. All the
recommendations made by the Audit Committee were accepted by the Board.
Particulars of Loans, Guarantees or Investments
The Company has not given any loans or guarantees covered under the
provisions of Section 186 of the Companies Act, 2013. The details of
the investments made by Company are given in the notes to the financial
statements.
Risk Management Policy
In compliance of Clause 49 of the Listing Agreement, the Board of
Directors has constituted a Risk Management Committee to monitor and
review the risk management plan and apprised the Board about Risk
Management framework, methodology for categorization of risk and
mitigation plan and such other function as directed by Board from time
to time. The main objective of this policy is to ensure sustainable
business growth with stability and to promote a proactive approach in
reporting, evaluating and resolving risks associated with the business.
In order to achieve the key objective, the policy establishes a
structured and disciplined approach to Risk Management, in order to
guide decisions on risk related issues. In today's challenging and
competitive environment, strategies for mitigating inherent risks in
accomplishing the growth plans of the Company are imperative.The common
risks inter alia are Regulations, competition, Business risk,Technology
obsolescence, Investments, retention of talent and expansion of
facilities. Business risk, inter-alia, further includes financial risk,
political risk, fidelity risk, legal risk. As a matter of policy, these
risks are assessed and steps as appropriate are taken to mitigate the
same.
Vigil Mechanism
Pursuant to provisions of Section 177 of the Companies Act, 2013 read
with Clause 49 of the Listing Agreement with stock exchange, the
Company has adopted Vigil Mechanism of the Company, which also
incorporates a whistle blower policy may be accessed on the Company's
website at www.shbhawani.com
Unclaimed Dividend
Pursuant to the provisions of Section 205A (5) and 205C of the
Companies Act, 1956, the Company has transferred the unpaid or
unclaimed dividends for the financial year up to 2006-07 from time to
time on due dates, to the Investor Education and Protection Fund (the
IEPF) established by the Central Government. The Company has not
declared any dividend thereafter till the year under review.
Contracts and Arrangements with related parties
During the year, the Company had not entered into any contract/
arrangement/ transaction with related parties which could be considered
material in accordance with the policy of the Company on materiality of
related party transactions. The policy on materiality of related party
transactions and dealing with related party transactions as approved by
the Board may be accessed on the Company's website at www.shbhawani.com
The particulars of every contract or arrangements entered into by the
Company with related parties referred to in sub-section (1) of Section
188 of the Companies Act, 2013 are disclosed in Form No. AOC -2 is
annexed herewith as Annexure E.
Your Directors draw attention of the members to Note 31 to the
financial statement which sets out related party disclosures.
Meetings of the Board
Six meetings of the Board of Directors were held during the year. For
further details, please refer Report on Corporate Governance of this
Annual Report.
Subsidiary and Associate Companies
The Company does not have any Subsidiary / Associate Company.
Appointment Policy
The Board has, on the recommendation of the Nomination and Remuneration
Committee, framed a policy for selection and appointment of Directors,
Key managerial Personnel, Senior Management and their remuneration. The
appointment Policy is stated in the Corporate Governance Report and is
available on website of the Company at www.shbhawani.com
Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance and the performance of the individual
Directors as well as the evaluation of the working of its Committees.
The manner in which the evaluation was carried out has been explained
in the Corporate Governance Report.
Listing with Stock Exchange
The Equity Shares of the Company are listed on Bombay Stock Exchange
Limited. The annual listing fees for the financial year 2015-16 have
been paid to the Bombay Stock Exchange.
Disclosure under the Sexual Harassment of women at workplace
(Prevention, Prohibition and Redressal) Act, 2013.
The Company has in place an Anti Sexual Harassment Policy in line with
the requirements of the sexual harassment of women at the Workplace
(Prevention, Prohibition and Redressal) Act, 2013. Till date, the
Company has not received any complaint there under.
Acknowledgement
The Directors would also like to record their appreciation to the
members of staff and workers, who in spite of constraints have been
working hard for the Company and are maintaining cordial relations.
FOR AND ON BEHALF OF THE BOARD
GIRISH TANDON ALANKAR TANDON
MANAGING DIRECTOR EXECUTIVE DIRECTOR
PLACE: ALLAHABAD
DATED: 11th AUGUST, 2015
Mar 31, 2014
Dear Members
We have pleasure in presenting our 35th Annual Report together with the
audited accounts of the Company for the fifteen months period ended
31st March, 2014.
PERFORMANCE
The working of the Company during the period under review has been
highlighted below :
15 Monhts 9 Months
Ended Ended
31.03.2014 31.12.2012
Production (Tonnes) 32886 28479
Rs. in Lacs Rs. in Lacs
Sales 11961 9526
Other Income 235 56
Total 12196 9582
Gross Profit/(Loss) -1986 -1711
Less : Interest 2406 1385
Depreciation for the year 949 491
Profit Before Exceptional Items and Tax -5341 -3587
Exceptional Items 1468 506
Profit for the year before Tax -6809 -4093
Less : Provision for taxation _ -
Profit/(Loss) after taxation -6809 -4093
Profit/(Loss) brought forward from
last year -7654 -3561
Loss carried to Balance Sheet -14463 -7654
OPERATIONS & REASON FOR LOSSES
During the period under review, the Company has manufactured 32886 tons
of paper with net sale of Rs.119.61 crores. Your Company could not
arrest its losses due to stalemate of finalization and approval of the
Draft Rehabilitation Scheme as per orders of Hon''ble BIFR. This has
prevented the Company from raising any funds for Working Capital which
has resulted to below 50% capacity utilization. Paper industry is a
continuous process Industry, it can only generate profits at high
capacity utilization. More than Rs. 40 crores investment in Chemical
Recovery Plant and balancing equipments is lying idle and desired
Production could not be achieved due to pending No Objection
Certificate of Central Pollution Control Board for Agro Pulp Mill.
COMPLIANCE OF SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985
Due to continuous losses, the net worth of the Company was completely
eroded as per the Audited Balance Sheet as at 31.12.2012 and the
Company has filed a Reference application under Section 15 (1) of Sick
Industrial Companies (Special Provisions) Act, 1985 (SICA) with Hon''ble
BIFR seeking registration of the unit as a Sick Industrial Company and
requesting for appropriate measures to revival of the Company in
interest of all stakeholders and public at large. The said reference
was registered as Case No.29/2013.
In the hearing held on 26.09.2013, the Hon''ble BIFR declared the
Company as ''Sick'' under Section 3 (1) (o) of SICA and appointed Bank
of Baroda as the Operating Agency (OA) under Section 17 (3) of the Act
to prepare a Rehabilitation Scheme for the Company. The Company has
submitted the Draft Rehabilitation Scheme (DRS) to Bank of Baroda (OA)
and other stakeholders with a Copy to Hon''ble BIFR
In accordance with the Direction of Hon''ble BIFR, meeting of all stake
holders of the Company was held on 26th March, 2014. Despite of order
of Hon''ble BIFR to finalise the DRS, no progress could be made due to
negative strategy adopted by Indian Bank. Indian Bank has also sold its
loan to M/s J. M .Financial Assets Reconstruction Pvt. Ltd., Mumbai.
The next date of hearing was to be held on 24th April, 2014, was
postponed sin die.
CLEAN DEVELOPMENT MECHANISM (CDM) PROJECT
During the period under review, the Company has received 41504 CERs for
prior period activity up to 31st December, 2012 from Cogeneration Power
Project I and Project II which has been transferred to the Belgian
State, proceeds thereof of Rs 347.71 lacs has been received.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as required under Section 217(1)(e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the Report
of Board of Directors) Rules, 1988, is enclosed as per Annexure-I.
DIRECTORS
Shri Badri Vishal Tandon, Director, is retiring by rotation, being
eligible for re-election, has given his consent for the same.
Shri C.M. Krishna, Brig (Retd) Shri Rajeev Lochan Singh SC, Shri Atul
Seth and Shri Saran Vinod, are the Independent Directors of the Company
who are liable to retire by rotation under the provisions of the
Companies Act, 1956.
Your Directors have decided to adopt the provisions with respect to
appointment and tenure of Independent Directors which is consistent
with the Companies Act, 2013 and the amended Clause 49 of the Listing
Agreement with Bombay Stock Exchange. The necessary Resolutions for
their appointment as Independent Director under Section 149 of the
Companies Act, 2013 and Clause 49 of the Listing Agreement to hold the
office for a term of 5 (five) consecutive years up to for a term with
effect from 26th September, 2014.
AUDITOR''S QUALIFICATION/REMARKS
1. With regard to qualifications/remarks in Auditor''s report and
Annexure thereto, with respect to qualification (a) as mentioned in
Note No.41 of financial statements, the balances of some of the trade
receivables, trade payables, lender and loans and advances are subject
to confirmation/reconciliation and subsequent adjustments, if any.
The Management is of the view that there is no material adjustment in
this regard.
2. With respect to qualification (b) as mentioned in Note No .42 of
financial statement, the Company became a sick industrial company
within the meaning of Section 3 (1) (O) of Sick Industrial Companies
(Special Provisions) Act, 1985 (SICA), due to erosion of its entire net
worth and the Company was declared a Sick Industrial Company by Hon''ble
BIFR on 26th September, 2013. The Company has submitted the Draft
Rehabilitation Scheme (DRS) to operating agency, Bank of Baroda. The
Company has provided interest on Term Loan and other loans of Indian
Bank and Bank of Baroda @ 10.50% with effect from 1st January, 2013 in
accordance with Guidelines and Checklist for preparation of Draft
Rehabilitation Scheme as provided by Hon''ble BIFR.
3. With respect to qualification (c) as mentioned in Note No. 29 of
financial statements, the Company has not recognized additional net
Deferred Tax Asset during the year. Net Deferred Tax Assets of Rs.14
crores was recognized for the year ended 31.03.2012 based on the future
profitability projections by the management. The financial statement
has been drawn upon ''going concern'' assumption.
4. Regarding the over dues of Statutory Liabilities of Rs. 190 Lacs
approx., the Directors have to inform, that, the same has accrued due
to shortage of working capital caused by non finalization of DRS by
Banks. All efforts are being made to liquidate the same at the
earliest.
COST AUDIT
Pursuant to Section 233-B of the Companies Act, 1956 and Company Law
Board Order No.52/165/CAB-92 dated 14.09.1992 directing Cost Audit, the
Company carries out an audit of cost accounts relating to paper every
year. Shri Rakesh Mishra. Cost Accountant, was appointed as Cost
Auditor for the year 2013-14. The Cost Audit Report for the year
2013-14 will be submitted to the Central Government before the due
date.
AUDITORS
M/s. P.L.Gupta & Co., Chartered Accountants, Statutory Auditors of the
Company, retire from their Office at the conclusion of ensuing Annual
General Meeting. They are, however, eligible for re-appointment and
have furnished certificate to the effect that their appointment, if
made, will be in accordance with the limits specified under Section 139
of the Companies Act, 2013. Your Directors recommend their
re-appointment for the accounting year 2014-15.
PARTICULARS OF EMPLOYEES
None of the Employee of the Company was in receipt of total
remuneration of Rs. 60,00,000/- during the financial year under review
or Rs.5,00,000/- per month. Hence, the information under Section 217
(2-A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules, 1975 are not required to be furnished.
CORPORATE GOVERNANCE CODE
Your Company has complied with all the mandatory requirements of
Corporate Governance. A detailed Report on Corporate Governance and
Management Discussion and Analysis forming part of the Directors''
Report is enclosed as Annexure II.
The Statutory Auditors of the Company have examined the Company''s
compliance to the Code of Corporate Governance and have certified the
same, as required under SEBI guidelines. The certificate is reproduced
with Corporate Governance Report to the Members.
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.
(i) that in the preparation of the annual accounts for the fifteen
months period ended 31st March, 2014, the applicable accounting
standards had been followed along with proper explanation relating to
material departures.
(ii) that the Directors had selected such accounting policies and
applied them consistently and made judgments and estimates that were
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 period and of the profit or
loss of the Company for the period under review.
(iii) that the Directors had taken proper and sufficient care for the
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) that the Directors had prepared the accounts for the fifteen
months period ended 31st March, 2014 on a ''going concern'' basis.
ACKNOWLEDGEMENT
Your Directors would like to express their thanks to the Bank of Baroda
for its co-operation and assistance from time to time. The Directors
would also like to record their appreciation to the members of staff
and workers, who in spite of constraints have been working hard for the
Company and are maintaining cordial relations.
FOR AND ON BEHALF OF THE BOARD
GIRISH TANDON ALANKAR TANDON
MANAGING DIRECTOR EXECUTIVE DIRECTOR
PLACE: ALLAHABAD
DATED: 14th AUGUST, 2014
Dec 31, 2012
The have pleasure in presenting our 34th Annual Report together with the
audited accounts of the Company for the year ended 31st December, 2012.
PERFORMANCE
The working of the Company during the year under review has been
highlighted below :
Nine Months
Ended Year ended
31.12.2012 31.03.2012
Production (Tonnes) 28479 30767
Rs. in Lacs Rs. in Lacs
Sales 9526 9448
Other Income 56 248
9582 9696
Gross Profit/(Loss) -1711 -887
Less : Interest 1385 1592
Depreciation for the year 491 620
Profit Before Exceptional
Items and Tax -3587 -3099
Exceptional Items 506
Profit for the year before Tax -4093 -3099
Less : Provision for taxation -1400
Profit / (Loss) after taxation -4093 -1699
Profit / (Loss) brought
forward from last year -3561 -1862
Loss carried to Balance Sheet -7654 -3561
During the period under review, the Company has manufactured 28479 tons
of paper with a gross sale of Rs.104.02 crores as compared to 19992
tons of paper with gross sale of Rs.70.35 crores during the
corresponding period in previous year. The main reason for losses is
high interest, under utilization of plant capacity because of working
capital constraint and implementation of CRP Capex I, which has
necessitated periodic shut down of existing plant for synchronizing
with the new equipments. Your company is facing severe cash crunch from
last several years because of high interest rates charged by the banks
and repayment of loans. During the period under review, the Company has
paid Rs.13.85 crores towards interest and Rs. 3.81 crores towards
installments to the Banks. Power failure in July/ August, 2012 further
worsened the production of the Company.
The promoters have brought in funds in the form of equity and long term
unsecured funds amounting to approx. Rs. 54 crores approx and paid Rs
83 crores approx to the banks towards interest and repayment of Loans
over the past 4 years.
The market condition for writing, printing paper is stable and the
industry is looking forward to see a better promising growth. The
Company is actively involved in Government tender and education sector
printing paper supplies. There is good demand of newsprint and other
cultural varieties of paper in addition to writing printing segment.
The Company is maintaining very low finished goods inventory.
CAPITAL EXPENDITURE SCHEME
The Capital expenditure scheme for Chemical Recovery Plant (CRP) 120 PD
was successfully installed, however, CRP could not run on commercial
basis due to power shortage because of grid failure in July/August,
2012, is now ready to commence operations.
Capex II will be implemented on stabilization of the operation of the
Company at the earliest.
COMPLIANCE OF SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985
Your Directors, at their meeting held on 18th March, 2013, took a note
of the fact that the net worth of the Company has become negative by
virtue of which Company has become sick in terms of Section 3(1)(o) of
the Sick Industrial Companies (Special Provisions) Act, 1985. The Board
unanimously, decided to close the financial year on 31.12.2012 for nine
months period .Thereafter, Reference in Form A was filed with Board for
Industrial and Financial Reconstruction (BIFR) pursuant to provisions
of Section 15 of the Sick Industrial Companies (Special Provisions)
Act, 1985 for speedy determination by the Board of experts of the
preventive, ameliorative, remedial and other measures which need to be
taken with respect to sickness of the Company in interest of all
stakeholders and public at large.
The main reasons for sickness are briefed as under:
1 During 2007-2008, the Company had undertaken further capacity
expansion by installing most modern new
equipments for manufacturing paper, thereby increasing their
manufacturing capacity from 21000 MT to 72000 MT per annum. Post
implementation of the same, the Company faced certain initial hurdles
with respect to de- inking plant that affected the quality of the pulp
and gave lower yield, forcing higher expenditure on trial runs to the
extent of approx. Rs.12-14 cr. Although it was rectified later, the
Company could not achieve the desired production levels post
commissioning as planned in FY 2009 and FY 2010 leading to depressed
sales and profitability in that period. However, unfortunately at that
time, due to collapse of Lehman Brothers, the global economy fell into
the severe recession trap which drastically affected the Newsprint
Market and paper industry thereby leading the Company also into severe
economic crisis. Due to these unforeseen circumstances, the project
completion of the Company got delayed as a result of which the Company
incurred heavy losses.
2. In April 2010, due to Pollution Control Board (PCB) directives, the
Company could not continue to operate the agro pulp mill without
installing the Chemical Recovery Plant (hereinafter referred to as
"CRP"). Resultantly, the Company had to shut down operations of its
existing 50 Tonnes Per Day agro pulp mill. Due to this, the overall
production in FY11, FY12 and FY13 also suffered adversely impacting the
financial and operational performance of the Company. As per the PCB
directives, a Chemical Recovery Plant (120 TPD) was successfully
installed in July, 2012 however, CRP could not run on commercial basis
due to power shortage after June 2012. Subsequent Power Grid failure in
July/August 2012 further worsened the production of the Company.
Further, during the year 2012, the implementation of the CRP
necessitated periodic shutdowns of existing plant for synchronizing
with the new equipments, which has adversely affected the capacity
utilization and production at the plant in that year. However, the CRP
has now been implemented and is ready to commence operations.
3. In 2005-06, the Capital Expansion Plan of the Company which
included setting up of Waste paper based Pulp Mill and New Paper
Machine i.e. PM-3 was financed by Indian Bank & Bank of Baroda
(Consortium) via Term Loan of Rs. 24 crores each at a rate of interest
@ 10% p.a. on the basis of which the appraisal was undertaken by the
banks. However, over the years, by 2011-12, the banks revised the said
interest rate to 14.5% p.a. thereby burdening the Company with an
additional 4.5% interest cost.
4. In May 2011, in order to stabilize the finances of the Company, the
Promoters divested 50% of their stake to the new co-promoters i.e. Shri
O.P.Goenka & others and infused Rs. 25 crores in the form of equity and
debt. However, due to high interest rates charged by the banks,
substantial amount of the said infused money was used in paying up the
accumulated dues of the Banks. Thereafter, in June 2011, the Company
submitted its proposal to the Banks for infusion of fresh capital
which, after many efforts of management of the Company, was cleared by
the banks in mid January 2012 i.e. after 6 months delay. Due to this
delay, during the intervening period of June 2011 to January 2012, the
production of the Company dropped significantly to less than 900 tons
per month in November  December 2011. In last 4 years, on all
proposals submitted by the Company, the banks have delayed beyond
reasonable time in appraisal and sanction, resulting huge losses to the
Company. All these delays have resulted in lower capacity utilization
of the Company and huge cash losses.
5. The promoters are fully committed towards the Company and have
shown their conviction by bringing in funds in the form of equity and
long term unsecured funds over the past 4 years amounting to Rs. 54
crores approx.
6. One of the external factors responsible for loss is that in the
past four years, the value of Rupee has depreciated from Rs. 42/- per
dollar in 2008 to Rs. 57/- per dollar in August 2012. This depreciation
in rupee lead to higher import costs of waste paper. The Company uses
imported waste paper in a mix with domestic paper for producing higher
quality of paper like newsprint (front page), writing and printing
paper and special grade paper.
7. Due to continuous liquidity constraints over recent past, the
Company is unable to have timely release of its imported waste paper at
the container terminal, leading to additional burden of detention and
demurrage charges, affecting Company''s profitability. The Company has
paid about Rs. 10 cr. over the past 3 years towards these charges.
8. SBPML has been caught in a vicious business cycle of Global
meltdown coupled with higher import, falling rupee vis-Ã -vis U.S.
dollar. This has been compounded by very high Interest rate regime.
9. The Company manufactures news print, which is import substitution.
In the last 4 years, it has saved more than Rs. 300 crores in foreign
exchange by its news print production at a nominal cost of imported
raw-material. Demand of news print is increasing.
10. SBPML has commissioned the Chemical Recovery Plant which will
increase its capacity to manufacture own pulp and reduce dependence of
imported raw-material.
The Company has submitted a request of restructuring of Loans to the
Consortium bankers viz Indian Bank & Bank of Baroda on 27th September,
2012. A detailed proposal was submitted to the banks on 2nd November
2012 that requested as under:
a) To consider realignment of the outstanding debt obligations, by
undertaking a comprehensive debt restructuring of the Company as per
the restructuring scheme submitted to them.
b) To permit holding-on-operations till the final resolution is
obtained in the form of approval of final proposal for debt
realignment. This will enable the Company to conserve cash flows and to
sustain its level of operations.
CLEAN DEVELOPMENT MECHANISM (CDM) PROJECT
During the year under review, the Company has received 13264 CERs for
an activity from 1st January, 2010 to 31st December, 2010 from
Cogeneration Power Project I and 11509 CERs from Cogeneration Power
Project II under verification and is likely to be finalised.
We expect to receive further 26855 CERs for an activity up to 31st
December, 2012 from both Cogeneration Power Projects. However, revenue
generated from sale of these CERs will be accounted on actual receipt.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as required under Section 217(1)(e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the Report
of Board of Directors) Rules, 1988, is enclosed as per Annexure-I.
PUBLIC DEPOSIT UNDER SECTION 58-A
During the year, because of continuous losses, the Company has not
accepted/ renewed fixed deposits from public and shareholders and as on
31st December, 2012, fixed deposits received from the public and
shareholders as on 31.12.2012 stood at Rs.93.62 lacs.
DIRECTORS
Shri Badri Vishal Tandon, Director, is retiring by rotation, being
eligible for re-election, has given his consent for the same.
Shri Murari Lal Jalan resigned from Directorship of the Company and
ceased to be Director with effect from 10th November, 2012. Your
Directors expressed their deep appreciation for his valuation
association and contributions to the Company.
Under the provisions of Section 260 of the Companies Act, 1956 and the
Articles of Association of the Company, Shri Atul Seth and Shri Saran
Vinod were appointed as Additional Directors of the Company on 18th
March, 2013 to hold the office until the conclusion of ensuing Annual
General Meeting.
The Company has received a notice in writing along with requisite
deposit under Section 257 of the Companies Act, 1956 from a member of
the Company signifying his intention to propose the appointment of Shri
Saran Vinod and Shri Atul Seth as Directors of the Company.
Accordingly, the Resolutions proposing the appointment of Shri Saran
Vinod and Shri Atul Seth shall be placed before the shareholders for
their approval at the ensuing Annual General Meeting.
Your Directors recommend the re-appointment of Shri Girish Tandon as
Managing Director, for a further period of three years and Shri Alankar
Tandon as Executive Director, for further period of five years on
revised terms subject to requisite approvals.
AUDITOR''S QUALIFICATION/ REMARKS
With regard to qualification/remarks in the Auditor''s Report and
Annexure thereto, your Directors wish to state that with respect to the
qualification of Auditors in Point No. 2 (e) of the Report regarding
the Liability for gratuity and leave encashment has been made on the
basis of liability determined by the Management, the Company accounts
for gratuity liability equivalent to the premium amount payable to Life
Insurance Corporation of India every year. As the Company has changed
current accounting year from 1st April, 2012 to 31st December, 2012
whereas the previous accounting year was for twelve months ended 31st
March, 2012. The Company has not received any advice of premium amount
payable to Life Insurance Corporation of India for nine months period
ended 31st December, 2012. Gratuity liability amounting to
Rs.16,03,306/- has been provided for the period on estimated basis.
Actuarial report for compensated Absence (PL) Plan valuation for the
period ended 31st December, 2012 could not be obtained, hence the
liability for leave encashment amounting to Rs. 14,50,000/- has been
provided for the period ended 31st December, 2012 on estimated basis.
AUDITORS
M/s. P.L.Gupta & Co., Chartered Accountants, Statutory Auditors of the
Company, retire from their Office at the conclusion of ensuing Annual
General Meeting. They are, however, eligible for re-appointment and
have furnished certificate to the effect that their appointment, if
made, will be in accordance with the limits specified in Sub- Section
(I-B) of Section 224 of the Companies Act, 1956. Your Directors
recommend their re-appointment for the accounting year 2013-14.
PARTICULARS OF EMPLOYEES
None of the Employee of the Company was in receipt of total
remuneration of Rs.60,00,000/- during the financial year under review
or Rs.5,00,000/- per month. Hence, the information under Section 217
(2-A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees ) Rules, 1975 are not required to be furnished.
CORPORATE GOVERNANCE CODE
Your Company has complied with all the mandatory requirements of
Corporate Governance. A detailed report on Corporate Governance and
Management Discussion and Analysis forming part of the Directors''
Report is enclosed as Annexure II.
The Statutory Auditors of the Company have examined the Company''s
compliance to the Code of Corporate Governance and have certified the
same, as required under SEBI guidelines. The certificate is reproduced
with Corporate Governance Report to the Members.
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:
(i) that in the preparation of the annual accounts for the nine months
period ended 31st December, 2012, the applicable accounting standards
had been followed along with proper explanation relating to material
departures;
(ii) that the Directors had selected such accounting policies and
applied them consistently and made judgments and estimates that were
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 period and of the profit or
loss of the Company for the period under review;
(iii) that the Directors had taken proper and sufficient care for the
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) that the Directors had prepared the accounts for the nine months
period ended 31st December, 2012 on a ''going concern'' basis.
ACKNOWLEDGEMENT
Your Directors would like to express their thanks to the Banks for
their co-operation and assistance from time to time. The Directors
would also like to record their appreciation to the members of staff
and workers, who in spite of constraints have been working hard for the
Company and are maintaining cordial relations.
FOR AND ON BEHALF OF THE BOARD
GIRISH TANDON ALANKAR TANDON
MANAGING DIRECTOR EXECUTIVE DIRECTOR
PLACE : ALLAHABAD
DATED: 15TH MAY, 2013
Mar 31, 2012
The have pleasure in presenting our 33rd Annual Report together with the
audited accounts of the Company for the year ended 31st March, 2012.
PERFORMANCE
The working of the Company during the year under review has been
highlighted below :
Year ended Year ended
31.03.2012 31.03.2011
Production (Tonnes) 30767 42773
Rs. in Lacs Rs. in Lacs
Sales 9448 12271
Other Income 248 237
9696 12508
Gross Profit/(Loss) -887 834
Less : Interest 1592 1351
Depreciation for the year 620 609
Profit for the year before tax -3099 -1126
Less : Provision for taxation -1400 -78
Profit / (Loss) after taxation -1699 -1048
Profit / (Loss) brought forward from last year -1862 -814
Loss carried to Balance Sheet -3561 -1862
During the year 2012, the Company has manufactured 30,767 tons of paper
with a net sale of Rs. 94.48 crores excluding taxes. The main reasons
for loss are high interest cost, steep fall in margin of news print due
to severe recession in demand and high level of duty free imports.
Further, the prices of fuel and raw materials increased abruptly
thereby increasing the cost of production. The Company faced severe
cash crunch because of high interest rates charged by the banks &
repayment of Loans. During the year under review, the Company has paid
Rs 15.92 crores towards interest and Rs. 11.04 crores towards
installments to the Banks.
There has been an improvement in production and sales between April &
June 2012 with production at 13,658 tons and gross sales at Rs. 48.24
crores. The plant is running at around 75% capacity and can achieve
over 100% capacity very shortly. The main drawback in increasing
capacity utilization is severe weather condition and implementation of
ongoing Capital Expenditure programme, which has necessistated periodic
shut down of existing plant to synchronize the new equipments.
Your Company manufactures writing, printing, news print and packaging
paper on its three machines. The market condition for writing and
printing paper is stable, however, MG varieties of paper is facing
demand recession due to lower consumption of Packaging Industry. In
case of news print, due to depreciation in rupee, the landed price of
imported news print has increased and should give better price
realisation for our newsprint in current year.
The Company has been facing severe financial crunch despite induction
of more than Rs. 30 crores by the promoters and increase in Working
Capital Limits by the Banks. The major cause for the same is investment
of Rs. 9.17 crores in the Capital Expenditure Programme as own
contributuion and utilization of nearly Rs. 20 crores for Banks over
dues. It should be appreciated, that, more than Rs. 80 crores has been
paid by the Company during the last 4 years as interest and Term Loan
repayment despite continued losses and very adverse industry scenario.
CAPITAL EXPENDITURE SCHEME
The Company has been sanctioned Term Loan of Rs 19 crores from Indian
Bank Consortium for completion of Chemical Recovery Project Capex I and
upgrdation of Agro Pulp Mill Capex II.
The Capital Expenditure Scheme for Chemical Recovery Plant is under
trial run. We have been able to successfully recover Soda Ash of
commercial grade from our Chemical Recovery Plant. The Plant will not
only solve the pollution control problem, but also will generate net
revenue when fully operational, which will help in improving the
financials of the Company.
Capex I has been implemented in part and Capex II for Rs 10 crores will
be implemented at the earliest.
OPEN OFFER
The Promoters of the Company, Shri Badri Vishal Tandon group and Shri
Om Prakash Goenka group, have received permission for purchase of
equity shares in open offer as per SEBI guidelines. The open offer was
opened on 6th June 2012, closed on 25th June 2012 and 9,09,033 shares
were successfully tendered to Shri Badri Vishal Tandon group and Shri
Om Prakash Goenka group. This has resulted in increase in joint
promoters' holding by 69.44%.
CLEAN DEVELOPMENT MECHANISM (CDM) PROJECT
During the year under review, the Company would receive 24473 CERs for
an activity from 1st January, 2010 to 31st December, 2010 from both
Cogeneration Power Projects. The CDM Verification for Project II (Ref
No. 0802, Monitoring Period 01/01/2011 to 31/12/2012) is likely to be
started.
DISCLOSURE OF PARTICULARS UNDER SECTION 217 (1) (E)
Under the Companies (Disclosure of particulars in the Report of Board
of Directors) Rules, 1988, the detailed information is enclosed as per
Annexure-I.
PUBLIC DEPOSIT UNDER SECTION 58-A
During the year, because of continuous losses, the Company has not
accepted/ renewed fixed deposits from public and shareholders and as on
31st March, 2012, fixed deposits from the public and shareholders
aggregated to Rs.197.66 lacs. The repayment of two deposits amounting
to Rs 2.00 lacs could not be made for want of instruction thereof from
depositors.
DIRECTORS
Shri C M Krishna and Brig.(Retd.) Shri Rajeev Lochan Singh SC,
Directors of the Company, are retiring by rotation.
Shri C M Krishna and Brig.(Retd.) Shri Rajeev Lochan SC, being eligible
for re-election, have given their consent for the same.
AUDITORS
M/s. P.L.Gupta & Co., Chartered Accountants, Auditors of the Company,
retire from their Office. They are, however, eligible for
re-appointment and have furnished certificate to the effect that their
appointment, if made, will be in accordance with the limits specified
in Sub- Section (I-B) of Section 224 of the Companies Act, 1956. Your
Directors recommend their re-appointment for the accounting year
2012-13.
PARTICULARS OF EMPLOYEES
None of the Employee of the Company was in receipt of total
remuneration of Rs.60,00,000/- during the financial year under review
or Rs.5,00,000/- per month. Hence, the information under Section 217
(2-A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees ) Rules, 1975 are not required to be furnished.
CORPORATE GOVERNANCE CODE
Your Company has complied with all the mandatory requirements of
Corporate Governance. A detailed report on Corporate Governance and
Management Discussion and Analysis forming part of the Directors'
Report is enclosed as Annexure-II.
The Statutory Auditors of the Company have examined the Company's
compliance to the Code of Corporate Governance and have certified the
same, as required under SEBI guidelines. The certificate is reproduced
with Corporate Governance Report to the Members.
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:
(i) that, in the preparation of the annual accounts for the financial
year ended 31st March, 2012, the applicable accounting standards had
been followed along with proper explanation relating to material
departures;
(ii) that, the Directors had selected such accounting policies and
applied them consistently and made judgments and estimates that were
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
profit or loss of the Company for the year under review;
(iii) that, the Directors had taken proper and sufficient care for the
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) that, the Directors had prepared the accounts for the financial
year ended 31st March, 2012 on a 'going concern' basis.
ACKNOWLEDGEMENT
Your Directors would like to express their thanks to the Banks for
their co-operation and assistance from time to time. The Directors
would also like to record their appreciation to the members of staff
and workers, who in spite of constraints have been working hard for the
Company and are maintaining cordial relations.
FOR AND ON BEHALF OF THE BOARD
GIRISH TANDON ALANKAR TANDON
MANAGING DIRECTOR EXECUTIVE DIRECTOR
PLACE: ALLAHABAD
DATED: 14th AUGUST, 2012
Mar 31, 2011
Dear Members,
We have pleasure in presenting our 32nd Annual Report together with the
audited accounts of the Company for the year ended 31st March, 2011.
PERFORMANCE
The working of the Company during the year under review has been
highlighted below :
Year Year
ended ended
31.03.2011 31.03.2010
Production (Tonnes) 42773 45548
Rs. in Rs. in
Lacs Lacs
Sales 12271 12592
Other Income 237 212
12508 12804
Gross Profit/(Loss) 834 1118
Less : Interest 1351 1171
Depreciation for the year 609 593
Profit for the year before tax -1126 -647
Less : Provision for taxation -78 -183
Profit / (Loss) after taxation -1048 -464
Profit / (Loss) brought forward
from last year -814 -1188
Transfer from General Reserve - 838
Loss carried to Balance Sheet -1862 -814
During the financial year under review, 2010-11, the Company has
manufactured 42,773 tons of paper with a gross sale of Rs. 130.88
crores including taxes. The production could have been higher by more
than 15,000 tons, but due to very adverse raw-material and financial
conditions, the Company had to slow down production from November 2010.
The major reasons for loss in the year are:
1. Increase in waste paper price due to shortage of fiber.
2. Increase in price of fuel, that is, husk and coal.
3. Lower realization of sale per ton due to excess supply of writing
printing paper and excessive import of newsprint.
4. High Interest cost.
During the period April-June 2011, the production was 7,997 tons and
sales were 7,463 tons, amounting to Rs.26.72 crores. The production has
picked up only in June. We manufactured 4,230 tons of paper versus
combined production of 3,993 tons of April and May,2011.
Paper prices have improved from February 2011 and though July-October
is off season for paper, still we expect to sell our entire production
due to pending Government Orders and good demand of newsprint. After
registering increase the domestic waste paper prices now coming down.
Imported waste paper prices are high but steady. We are trying to
reduce dependence on imported waste paper after implementation of
Chemical Recovery plant and further capital expenditure.
Availability of Agro residue is expected to be good in coming months.
COMPLIANCE OF SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985
Pursuant to provisions of Section 23 of Sick Industrial Companies
(Special Provisions) Act, 1985, we are required to report the
shareholders and the Board for Industrial and Financial Reconstruction
(BIFR) regarding the erosion of net worth of the Company.
The major reasons for losses are the severe recession in paper market
in previous years, increase in price of raw material & fuel, high
interest cost. Despite the losses, the Company has been paying the term
loan installments/bank dues by raising short term loans. This has led
to shortage of working capital. Hence, the equity capital was raised
for smooth operations of the Plant which is suffering due to lack of
working capital.
CAPITAL EXPENDITURE SCHEME
The Capital Expenditure Scheme for Chemical Recovery Plant is under
implemention. However, due to delay in equipment supplies and some
electrical motors along with imported equipment from China, we expect a
delay of three months in completion. In view of this, there is some
time and cost over run.
Further, the Company has taken opinion from experts who have advised
the immediate steps should be taken to increase the production of
bleach pulp to 150 tons per day. Balancing equipment to reduce power
cost and improve storage facility of agro residue and fuel is urgently
required. Investment is also required in infrastructure.
Accordingly, the Company has submitted a Proposal to extend the present
Capital Expenditure Scheme with request to provide Additional Term Loan
to banks.
CAPITAL
Your Company has issued an aggregate of 1,84,03,224 Equity Shares of
Rs. 10/- each aggregating to Rs. 18.40 crores of perferential basis as
under:
(a) 22,50,000 equity shares to Mr. Badri Vishal Tandon (Karta of Ram
Mohan Das Tandon (HUF)) existing promoter of the Company.
(b) 1,16,53,224 equity shares to the investor Acquirers ie Mr. Ompraksh
Goenka, Mrs. Kiran Goenka, Mr. Gaurav Goenka, Mrs. Girija Goenka and
Mirah Dekor Ltd.
(c) 45,00,000 equity shares to Mr. Mohit Chaturvedi, Mrs. Bina
Chaturvedi and Ganges Leasing and Finance Company Private Limited.
Your Company futher entered into Share Subscription and Shareholders
Agreement between the existing Promoters of the Company and Mr.
Omprakash Goenka, Mrs. Kiran Goenka, Mr. Gaurav Goenka, Mrs. Girija
Goenka and Mirah Dekor Ltd. (the 'Investor Acquirers'). Accordingly,
Shri Badri Vishal Tandon will be the Chairman, Shri Om Prakash Goenka,
Vice-Chairman and Shri Girish Tandon, Managing Director of the Company.
CLEAN DEVELOPMENT MECHANISM (CDM) PROJECT
During the year under review, the Company received 28463 units of CERs
for our contribution to reduce carbon emissions from first & second
Rice Husk Based Cogeneration Power Project for activity up to 31st
December, 2009. We realized a sum of Rs.217 lacs net of expenses from
sale of these CERs.
We expect to receive further 24473 CERs for an activity from 1st
January,2010 to 31st December,2010 from both Cogeneration Power
Projects. However, revenue generated from sale of these CERs will be
accounted on actual receipt.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as required under Section 217 (I) (e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the Report
of Board of Directors) Rules, 1988, is enclosed as per Annexure-I.
PUBLIC DEPOSIT UNDER SECTION 58-A
During the year, the Company has accepted fixed deposits from public
and shareholders and as on 31st March, 2011, fixed deposits from the
public and shareholders aggregated to Rs. 378.19 lacs. There has been
no unpaid/unclaimed/ overdue deposit as on date.
DIRECTORS
Shri Badri Vishal Tandon and Shri K A Pai, Directors of the Company,
are retiring by rotation.
Shri Badri Vishal Tandon being eligible for re-election, has given his
consent for the same.
Shri K A Pai has expressed his inability, due to old age to continue as
Director, after forthcoming Annual General Meeting. Your Directors
express their deep appreciation for his valuable association &
contribution for more than a decade.
Under the provisions of Section 260 of the Companies Act, 1956 and
Article 81 (b) of the Articles of Association of the Company, Shri
Chaitanya Dhruve Mehta was appointed as an Additional Director of the
Company with effect from 18th May, 2011 to hold the Office till the
conclusion of ensuing Annual General Meeting.
The Company has received Notice under Section 257 of the Companies Act,
1956 and accordingly the Resolution proposing the appointment of Shri
Chaitanya Dhruve Mehta shall be placed before the shareholders for
their approval at the ensuing Annual General Meeting.
AUDITORS
M/s P. L. Gupta & Co., Chartered Accountants, Statutory Auditors of the
Company, retire from their Office at the conclusion of ensuing Annual
General Meeting. They are, however, eligible for re-appointment and
have furnished certificate to the effect that their appointment, if
made, will be in accordance with the limits specified in Sub- section
(I-B) of Section 224 of the Companies Act, 1956. Your Directors
recommend their re-appointment for the accounting year 2011-12.
PARTICULARS OF EMPLOYEES
None of the Employee of the Company was in receipt of total
remuneration of Rs.60,00,000/- during the financial year under review
or Rs.5,00,000/- per month. Hence, the information Under Section 217
(2-A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees ) Rules, 1975 are not required to be furnished.
CORPORATE GOVERNANCE CODE
Your Company has complied with all the mandatory requirements of
Corporate Governance. A detailed report on Corporate Governance and
Management Discussion and Analysis forming part of the Directors'
Report is enclosed as Annexure-II.
The Statutory Auditors of the Company have examined the Company's
compliance to the Code of Corporate Governance and have certified the
same, as required under SEBI guidelines. The certificate is reproduced
with Corporate Governance Report to the Members.
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:
(i) that, in the preparation of the annual accounts for the financial
year ended 31st March, 2011, the applicable accounting standards had
been followed along with proper explanation relating to material
departures;
(ii) that, the Directors had selected such accounting policies and
applied them consistently and made judgments and estimates that were
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
profit or loss of the Company for the year under review;
(iii) that, the Directors had taken proper and sufficient care for the
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) that, the Directors had prepared the accounts for the financial
year ended 31st March, 2011 on a 'going concern' basis.
ACKNOWLEDGEMENT
Your Directors would like to express their thanks to the Banks for
their co-operation and assistance from time to time. The Directors
would also like to record their appreciation to the members of staff
and workers, who in spite of constraints have been working hard for the
Company and are maintaining cordial relations.
FOR AND ON BEHALF OF THE BOARD
GIRISH TANDON ALANKAR TANDON
MANAGING DIRECTOR EXECUTIVE DIRECTOR
PLACE : ALLAHABAD
DATED : 10TH AUGUST, 2011
Mar 31, 2010
We have the pleasure of presenting the 31st Annual Report together with
the audited accounts of the Company for the year ending 31st March,
2010.
PERFORMANCE
The working of the Company during the year under review has been
highlighted below :
Year ended Year ended
31.03.2010 31.03.2009
Production (Tonnes) 45548 41641
Rs. In Lacs Rs. In Lacs
Sales 12592 11705
Other Income 212 8
12804 11713
Gross Profit/(Loss) 1117 571
Less : Interest 1171 957
Depreciation for the year 593 558
Profit for the year before tax -647 -944
Less : Provision for taxation -183 -195
Profit / (Loss) after taxation -464 -749
Profit / (Loss) brought
forward from last year -1188 -439
Transfer from General Reserve 838 -
Loss carried to Balance Sheet -814 -1188
Salient features in operations of the year under review :
1. Market condition was adverse and prices of News Print fell by more
than 40%, with a glut in News Print market. Those manufacturers who
could switch from news print manufacturing to writing printing did so,
which resulted in increased supply of writing printing paper also. This
depressed the price and demand of writing printing paper for most of
the year.
2. The Company was compelled to take forced shut due to increase in
finished goods inventory. This lead to short fall in production by
nearly 9,000 tons and in turn over by Rs. 27 crores.
3. There was a strike in Kanpur ICD resulting in piling up of
containers due to poor infrastructure during April - July 2009. Your
Company had to pay huge demurrage and detention charges on its imports
due to above factor.
4. Imported waste paper price increased by nearly 30 to 40% and
availability has gone down due to reduced paper consumption in
developed countries. Shipping charges to India have also increased
abnormally due to lack of availability of containers for India. This
factor has lead to increase in imported raw material cost
substantially. Import is a compulsion because domestic waste paper has
to be supported by imported raw material to maintain the quality.
There is a good demand of agro waste paper manufactured by the Company
and recently, the international market for writing/printing paper also
improved along with increase in demand of news print during the current
year. On the whole, paper prices and market appear to be much better
for the current year.
CAPITAL EXPENDITURE SCHEME
A Capital Expenditure Scheme of Rs. 20 crores is under implementation.
Under this, a Chemical Recovery Plant to recover Soda Ash from effluent
and increase in agro pulping is planned. Along with this, the two old
paper machines will be up graded for better quality paper manufacturing
at lower cost. The Scheme is being financed by Term loan from Banks,
internal accrual and preferential allotment of Equity Shares to
Promoters and associates.
CAPITAL
The Company proposes to issue Preferential Equity Capital totalling
Rs.5 crores to Promoters and Associates to finance the Capital
Expenditure under implementation.
CLEAN DEVELOPMENT MECHANISM (CDM) PROJECT
During the year under review, the Company received 23780 units of CERs
for our contribution to reduce carbon emissions from first & second
Rice Husk Based Cogeneration Power Project for activity from 1st
September, 2008 to 31st August, 2009. We realized a sum of Rs.197 lacs
net of expenses from sale of these CERs.
We expect to receive further 29045 CERs for activities undertaken
during financial year 2009-10 from both Cogeneration Power Projects.
However, revenue generated from sale of these CERs will be accounted on
actual receipt.
DISCLOSURE OF PARTICULARS UNDER SECTION 217 (1) (e)
Under the Companies (Disclosure of Particulars in the Report of Board
of Directors) Rules, 1988, the detailed information is enclosed as per
Annexure-I.
PUBLIC DEPOSIT UNDER SECTION 58-A
During the year, the Company has accepted fixed deposits from public
and shareholders and as on 31st March, 2010, fixed deposits from the
public and shareholders aggregated to Rs. 484.77 lacs. The
renewal/repayment of two deposits amounting to Rs.0.67 lacs could not
be made for want of instruction thereof from the depositors up to 31st
March, 2010 which has since been renewed till the date of this report.
DIRECTORS
Shri Murari Jalan & Brig.(Rtd.) R.L.Singh SC, Directors of the Company,
are retiring by rotation and being eligible for re-election , have
given their consent for the same.
Your Directors recommend the re-appointment of Shri Girish Tandon,
Managing Director, for a further period of three years with effect from
1st April, 2010.
AUDITORS
M/s P. L. Gupta & Co., Chartered Accountants, Auditors of the Company,
retire from their Office. They are, however, eligible for
re-appointment and have furnished certificate to the effect that their
appointment, if made, will be in accordance with the limits specified
in Sub- section (I-B) of Section 224 of the Companies Act, 1956. Your
Directors recommend their re-appointment for the accounting year
2010-11.
PARTICULARS OF EMPLOYEES
None of the Employee of the Company was in receipt of total
remuneration of Rs.24,00,000/- during the financial year under review
or Rs.2,00,000/- per month. Hence, the information Under Section 217
(2-A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees ) Rules, 1975 are not required to be furnished.
CORPORATE GOVERNANCE CODE
Your Company has complied with all the mandatory requirements of
Corporate Governance. A detailed report on Corporate Governance and
Management Discussion and Analysis forming part of the Directors
Report is enclosed as Annexure II.
The Statutory Auditors of the Company have examined the Companys
compliance to the Code of Corporate Governance and have certified the
same, as required under SEBI guidelines. The certificate is reproduced
with Corporate Governance Report to the Members.
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:
(i) that, in the preparation of the annual accounts for the financial
year ended 31st March, 2010, the applicable accounting standards had
been followed along with proper explanation relating to material
departures;
(ii) that, the Directors had selected such accounting policies and
applied them consistently and made judgments and estimates that were
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
profit or loss of the Company for the year under review;
(iii) that, the Directors had taken proper and sufficient care for the
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) that, the Directors had prepared the accounts for the financial
year ended 31st March, 2010 on a going concernà basis.
ACKNOWLEDGEMENT
Your Directors would like to express their thanks to the Banks for
their co-operation and assistance from time to time. The Directors
would also like to record their appreciation to the members of staff
and workers, who in spite of constraints have been working hard for the
Company and are maintaining cordial relations.
FOR AND ON BEHALF OF THE BOARD
GIRISH TANDON ALANKAR TANDON
MANAGING DIRECTOR EXECUTIVE DIRECTOR
PLACE : ALLAHABAD
DATED: 14TH AUGUST, 2010
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