DIRECTORS' REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS FOR THE FINANCIAL YEAR 2014-2015 TO THE MEMBERS, CORAL NEWSPRINT LIMITED Your directors have pleasure in presenting their 23rd Annual Report on the business and operations of the company together with the Audited Statement ofAccounts for the year ended 31st March, 2015 State of Company's Affairs and Future Outlook: During the year under review, your Company has earned total income of Rs. 134,848,570 against Rs. 154,402,632 in the previous year. The Company has incurred loss of Rs. 2,543,027 compared to Rs. 17,26,876 in the previous year. Dividend: Due to loss no Dividend is recommended by the Board for the Financial Year ended on 31st March, 2015. Amounts Transferred to Reserves: No amount is transferred to General Reserve due to none recommendation of Dividend and Loss. Extract of Annual Return: The extract of Annual Return, in format MGT -9, for the Financial Year 2014-15 has been enclosed with this report as Annexure -I Details of Subsidiaries Companies, Associate Company & LLP / Partnership •There is no Subsidiary of Company hence no such information is provided Number of Board Meetings: During the Financial Year 2014-15, six meetings of the Board of Directors of the company were held as per the table Particulars of Loan, Guarantees and Investments under Section 186: During the financial year 2014-15, the Company has not given any loan to any other Company including Associate Concern. Particulars of Contracts or Arrangements with Related Parties: All the transactions are at Arm's length. Remuneration paid to the Working Directors i.e. Managing Directors & Executive Directors is in respect of their time involvement in development of Company. No transactions in any form of purchase/sale has been made with related parties. Explanation to Auditor's Remarks: The remarks made by the Auditors in their Report have been suitably dealt with in the schedules and notes and therefore, do not call for any further clarification. Conservation of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo: The details of Energy, Technology, Absorption, Foreign Exchange Earnings and Outgo are as under: Earning : Nil Outgo : $ 2774.96 in favour of Anhuhi Twowin Machinery IMP & EXP Co. Ltd (China) A) Conservation of energy : The Company continues its endeavor to improve energy conservation and utilization. Some of the steps taken by the Company for energy conservation during the financial year 2014-15 at its manufacturing locations are outlined below. Installation of Energy Efficient Equipment's such as: 1) VFD (Variable Frequency Drive) Apart from above, the Company has also other energy conservation measures in place like, usage of treated / recycled water, tree plantation, optimization of processes and equipment's etc. All these steps ultimately results in savings in energy, in water consumption, in fuel consumption and protecting the environment. Your company has also up graded Effluent Treatment Plant as per the norms given by Central Pollution Control & UP Pollution Control Board from time to time. The Company has made a capital investment of approximately ten lacs on the energy saving devices during the financial year 2014-15. (B) Technology Absorption : (1) The Efforts Made Towards Technology Absorption: Indigenously developed technologies for the improvement of production in the factory were adopted and required modifications and innovations were done on continuous basis. Since the plant & machineries are stalled and came into operation in the year 1994 therefore every month the maintenance as well as up gradation of machineries are made on regular basis. (2) The Benefits Derived Like Product Improvement, Cost Reduction, Product Development Or Import Substitution: The innovations made by the Company has provided better results in quality and production and also reducing the involvement of manual workers without increasing the overall cost of production and maintenance. (3) IN CASE OF IMPORTED TECHNOLOGIES (imported during last three years reckoned from the beginning of the financial year) (a) The details of technology imported: Nil (b) The year of import: Nil (c) Whether the technology been fully absorbed: Not applicable (d) If not fully absorbed, areas where absorption has not taken place and the reasons therefor: Not applicable. (4) The expenditure incurred on Research and Development: The expenditure on Research and Development including innovation in production has started giving good yields and the same process is continued. Risk Management Policy: The Company has developed a very comprehensive risk management policy and the same is reviewed by the Audit Committee at periodical intervals, which in turn, informs the Board about the risk assessment and minimization procedures adopted by the management. Suggestions or guidance given by the audit committee members are immediately implemented. At the corporate level major risks are reviewed by the Whole Time Director and directions in this regard are issued accordingly Re-Appointment of Directors: As per the Provision of the Companies Act, 2013 and Article of Association of the Company Shri Chetan P.S. Chauhan (DIN: 00702883) and Shri Yogesh Alawadi (DIN: 01144813) retires in ensuing Annual General Meeting and being eligible seeks Re-Appointment. The Board recommends their Re-Appointment. Shri Chetan P.S. Chauhan is a B.A., B.Com Graduate with over 40 years of experience in the field of Banking, Cricket, & Administration and in manufacturing of paper Richa Shukla (DIN:00484297) was appointed as an Additional Independent Director on 24th January, 2015 to hold the office up to the date of Annual General Meeting. The Company has received a notice from a member under section 160 of the Companies Act, along with the deposit of Rs.1,00,000/-(Rupees One Lakh only), refundable on election of the said Director as Independent Director under Section 149 of the Companies Act, 2013, with effect from 30th September, 2015 for the period offive years. The office of this Director shall not be determined for the purpose of calculating rotational Directors as well as the strength of the Board. The Board is of the opinion that this Director is person of integrity and possesses relevant expertise and experience. The Board is of the view that her appointment will be in the interest of the Company. Richa Shukla (DIN: 00484297) She is holding Diploma in Fashion Designing & Perfumery with experience of around 15 years in said field. SHRI PURURAJ SINGH RATHORE (DIN: 01315933), is the Independent Directors re-appointed in last Annual General Meeting. In view of the provision of Section 149(4) of the Companies Act, 2013, the Company has to appoint an Independent Director for a term of 4 years. In view of the amendment in the Companies Act, these Directors are appointed in terms of the Section 149 of the Companies Act, 2013 for a period of 4 years, commencing from the date of Annual General Meeting i.e. 30-09-2015. The office of these Directors shall not be determined for the purpose of calculating rotational Directors as well as the strength of the Board. SHRI PURURAJ SINGH RATHORE (DIN: 01315933), is CPA from Australia and is having a rich experience in Finance & Marketing. The Board is of the opinion that these Directors are person of integrity and possess relevant expertise and experience. He had no pecuniary relationship with Company and its associates except for getting sitting fees for attending Board and Committee meetings. The Board is of the view that his appointment will be in the interest of the Company. Comparison of Remuneration to Directors and employees: There is no 16,83,600.00 increase in the remuneration payable to in Comparison to 16,17,420.00 increase in the salary of employee. None other Directors of the Company is being paid remuneration. The Salary rise is based on the inflation data. As such the rise in the take away is at par with other employee of the Company. The Performance of the Company has been affected by Global recession and economic slowdown in the Indian economy. Comparison to the Remuneration of Directors and other employees is as under: 1) Median of Directors remuneration:- 2) Median of employees remuneration- Details of significant & material orders passed by the regulators or courts or tribunal: BIFR has passed the order for one time settlement with Uttar Pradesh Financial Corporation. The same was settled with the Institution and the company has paid about 61% of the outstanding as per the order of BIFR. However, UPFC has challenged the order and filed appeal before higher authorities (AIFR), which is pending. Deposits (As per the Definition Section 2(31) of the Companies Act, 2013) The following details of deposits, covered under Chapter V of the act: I. Deposits Accepted during the year: NIL II. Remained unpaid or unclaimed as at the end of the year: NIL III. Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved- a. At the beginning of the year: NIL b. Maximum during the year: NIL c. At the end of the year: NIL IV. The details of deposits which are not in compliance with the requirements of Chapter: There is no such Deposit held by the Company. Receipt of any commission by Managing Director / Whole Time Director from a Company or for receipt of commission / remuneration from it Holding or subsidiary: Company is not paying any commission to its director Declaration by Independent Director: The Company has received declaration from all the Independent Directors under the Companies Act, 2013 and rules made there under. Secretarial Audit Report: Secretarial Audit Report in prescribed format Form MR-3 given by a Practicing Company Secretary Ms. Jasmeen Kaur. J. K. & Associates is annexed with the Board Report as. Annexure - II Corporate Social Responsibility (CSR) Policy: The Company is not falling within the criteria of Section 135 of the Companies Act, 2013 and hence the Company is not required to form CSR committee. Audit Committee: As on 31st March 2015, the Audit Committee comprises of three Directors, out of which two are Independent Directors. Members of the Audit Committee are as Follows; 1. Mr. Atul Kumar Jain-Chairman (Independent Director) 2. Mr. Chetan P.S. Chauhan-Member 3. Mr. Mahesh Kumar Sodhani- Member (Independent Director) The functions of the Audit Committee of the Company include the following: • Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. • Recommending to the Board, the appointment re-appointment, if required the replacement or removal of the statutory auditor and fixation of the audit fees • Approval of payment to the statutory auditor for any other services rendered by the statutory auditors. • Reviewing, with the management , the annual financial statement before submission to the Board for approval, with particular references to : - Matters required to be included in the Directors Responsibility Statement to be included in the Board's report in terms of Section 134 of the Companies Act, 2013.. - Changes, if any, in accounting policies and practices and reason for the same. - Major accounting entries involving estimates based on the exercise of judgment by management. - Significant adjustment made in the financial statements arising out of audit findings. - Compliance with listing and other legal requirements relating to financial statements. • Disclosure of any related party transactions. • Qualification in the audit report. • Reviewing with the management, performance of statutory and internal auditors, and adequacy of the internal control system. • Reviewing the adequacy of internal audit plan. • Discussion with internal auditors on any significant findings and follow up thereof. • Reviewing the findings of any internal investigation by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. • Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post audit discussion to ascertain any area of concern. • To look into the reasons for substantial defaults in the payments to the depositors, shareholders (in case of nonpayment of declared dividends) and creditors. • Reviewing the functioning of the Whistle Blower Mechanism. • Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. The Audit Committee is empowered, pursuant to its terms of references, to: • Investigate any activity within its terms of reference and to seek any information it requires from any employee. • Obtain legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise, when considered necessary. The Company has systems and procedures in place to ensure that the Audit Committee mandatorily reviews: • Management discussion and analysis of financial condition and results of operations. • Statement of significant related party transactions (as defined by the Audit Committee), submitted by management. • Management letters/letters of internal control weaknesses issued by the statutory auditors. • Internal audit reports relating to internal control weaknesses. • The appointment, removal and terms of remuneration of the internal auditor. In addition, the Audit Committee of the Company also reviews the financial statements. The Audit Committee is also apprised on information with regard to related party transactions by being presented: • A statement in summary form of transactions with related parties in the ordinary course of business. • Details of material individual transactions with related parties which are not in the normal course of business. • Details of material individual transactions with related parties or others, which are not on an arm's length basis along with management's justification for the same. Statement Indicating the Manner in which Formal Annual Evaluation has been made by the Board of its own Performance, its Directors, and that of its Committees: During the year, the Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors including the Board Chairman who were evaluated on parameters such as attendance, contribution at the meetings and otherwise, independent judgment, safeguarding of minority shareholders interest etc. The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and the Non-Independent Directors were carried out by the Independent Directors. The Directors were satisfied with the evaluation results, which reflected the overall engagement of the Board and its Committees with the Company. Nomination & Remuneration Committee Policy: The sitting fee paid to the non-executive directors, commission to independent director, and remuneration paid to the whole- time director is approved by the remuneration committee. Members of the Nomination & Remuneration Committee are as Follows; 1. Mr. Mahesh Kumar Sodhani- Chairman (Independent Director) 2. Mr. Atul Kumar Jain-Member (Independent Director) 3. Mr. Pururaj Singh Rathore-Member (Independent Director) Half- yearly Declaration A half - yearly/Quarterly Declaration of financial performance including summary of significant events in the last six months is currently not being send to each household of shareholders. However, the Company publishes its results in national and state level newspapers having wide circulation. The results are also posted on the website of the Company i.e. www.coralnewsprintslimited.com Disclosure on Establishment of a Vigil Mechanism: Fraud free corruption, free work culture has been core to the Company. In view of the potential risk of fraud and corruption due to rapid growth and geographical spread of operations, the Company has put an even greater emphasis to address this risk. To meet this objective, a comprehensive Fraud Risk Management (FRM) policy akin to vigil mechanism or the Whistle Blower Policy has been laid down by the Board of Directors. Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013: In accordance with the sexual harassment of women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, Coral Newsprint Limited has modified the erstwhile policy for Prevention of Sexual Harassment at the Workplace and the Board of Directors have unanimously adopted the same w.e.f. July 23, 2014. Vide notification dated December 9, 2013; Ministry of Women and Child Development have introduced Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013. The earlier policy has been amended by incorporating the rules and procedures as mandated in the said notification. The revised policy shall be in effect from July 23, 2014. Company has Appointed Smt. Krishna Devi to redress the issues regarding Sexual Harassments at work place. Statutory Auditors: M/s L.N. Malik & Co. Chartered Accountants retires as Statutory Auditors of the Company at the conclusion of the Annual General Meeting to be held for the Financial Year 2016-2017 and being eligible to offer them for reappointment. Cost Auditors: The Board of Directors has reappointed, subject to the approval of the Central Government, M/s Rajni Chawla & Associates, Cost Accountants as the Cost Auditors of the Company under the section 148 of the Companies Act, 2013 to audit the Cost Accounts of the Company for the Financial Year 2014-15. Directors Responsibility Statement: In accordance with the provisions of Section 134(5) of the Companies Act 2013, your directors confirm that: a) In the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; b) The directors had 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 as at 31st March, 2015 and of the profit /loss of the Company for that period; c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d) The directors had prepared the annual accounts on a going concern basis; e) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. f) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. Green initiatives: During fiscal 2011, we started a sustainability initiative with the aim of going green and minimizing our impact on the environment. Like the previous years, this year too, we are publishing only the statutory disclosures in the print version of the Annual Report. Additional information is available on our website, www.coralnewsprintslimited.com Electronic copies will be the Annual Report 2014-15 and Notice of the 23rd Annual General Meeting are sent to all members whose email addresses are registered with the Company / Depository Participant(s). For members who have not registered their email addresses, physical copies of the Annual Report 2015 and the Notice will be sent in the permitted mode. Members requiring physical copies can send a request to the Company. The Company provides e-voting facility to all its members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Amendment Rules, 2015. The instructions for e-voting are provided in the Notice. Acknowledgment The Directors express their sincere appreciation to the valued shareholders, bankers and clients for their support creditor and debtors and employees. By The Order of The Board, For Coral Newsprints Limited Pushpendra P. S. Chauhan Whole-Time Director, CEO (DIN: 01871760) Chetan P.S. Chauhan Chairman & CFO (DIN: 00702883) Place : Delhi Date : 02.09.2015 Regd. Office: A-138, First Floor, Vikas Marg, Shakarpur, Delhi-ll0092 |