REPORT OF BOARD OF DIRECTORS. The Directors have pleasure in presenting the 22nd Annual Report for the year ended 31st March 2015 along with the Audited Statement of Accounts with the Report of the Auditors thereon REVIEW OF OPERATIONS Your company has improved upon the performance. For the year under review the Company recorded total income of Rs.23109.22 Lacs while the profit before taxes was Rs.273.30 Lacs. MANAGEMENT REVIEW: 2015-16 INDIAN PAPER INDUSTRY SCENARIO The paper industry's market size (including newsprint) was around Rs 538 billion in 201213, having grown at nearly 12 per cent CAGR over the last 5 years. Paperboard accounted for around 49 per cent of the market size, followed by Writing & Printing paper which accounted for almost 31 per cent. Newsprint accounted for 16 percent and speciality paper accounted for 3 per cent. Demand for writing and printing paper and paperboard is expected to improve over the next 5 years, boosted by the government's thrust on education, rise in organised retail, urbanisation and growth in the economy. Newsprint demand is expected to grow at a healthy pace over the next 5 years, driven by demand for vernacular newspapers and a rise in the number of pages per newspaper. Therefore, with the expected increase in literacy rate and growth of the economy the per capita consumption of paper is expected to increase going forward. FUTURE OUTLOOK The Indian paper industry is moving up with strong demand and is expected to follow the GDP growth rate. The company is focused on the long term and it continues its drive for sustainable growth. We are adopting to successfully compete in emerging market conditions. The company is gradually increasing share of packaging paper in its product portfolio. The packaging paper is likely to witness higher growth due to focus of the government on "Make in India", growth of organized retail and E-commerce. With these factors, your company is anticipating strong revenue growth in the current financial year, which is backed by improving margins. The increased focus on education by the government, an increase in the general level of literacy and continued demand from user industries will further add to the growth prospects of the Company. The global demand for paper is expected to grow at a steady pace over the next 4 -5 years. The pace of decline of demand for W&P paper and newsprint in US and Europe will decrease. In the international market, Paper board demand will slow down slightly in the next couple of years due to sluggish demand and slowdown in China. In 2015-16, the domestic demand growth is expected to improve on account of economic recovery. Sharp fall in global waste paper prices will put pressure on domestic waste paper prices in 201516. Therefore, margin of W&P and paper board players are expect to expand. INTERNAL CONTROL SYSTEM: Your Company has adequate internal control procedures commensurate with the size and nature of business. There is a periodical review mechanism for ensuring the sustenance and upgradation of these systems. THREATS, RISKS AND CONCERNS: r muicasing uusl ui law nmLciicus. > Paper Industry being an asset heavy industry, asset turnover ratio is low. > The forex movements have an impact on the Newsprint industry. > The Industry will be impacted by any economic downturn. OPPORTUNITIES & STRENGTHS: • Increasing trend in packaging of all type goods in corrugated boxes to lead to higher demand of packaging paper. • Increasing e-commerce purchase will have positive impact on the packaging industry, as the goods are repacked to deliver to the customers. • Higher literacy at rural level will lead to higher demand of circulation / readership of newspapers and increasing higher prevalence of using packed products. • The environment is becoming a key focus area in business today and accordingly the packaging is also changing to recyclable paper, provide an opportunity to paper manufacturers. • A stable and decisive Central Government has started huge government spending in infrastructure and focused on Make in India campaign. The growing Indian economy will create more demand for paper. • Self reliance for its power requirements and lower costs of the fuel. CORPORATE SOCIAL RESPONSIBILITY: The Company is not required to constitute CSR Committee as per the provisions of Section 135 (1) of the Companies Act 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014. However, Your company has always discharged its social responsibility as a part of its corporate governance philosophy. The company has lend helping hand by taking up health check up camps, drinking water supply, tree plantations in the factory premises and in the vicinity of factory. LISTING OF SHARES Equity Shares of Company are listed on The Stock Exchange, Mumbai (BSE) and The National Stock Exchange (NSE). The Company has duly paid listing fees to stock exchanges. PUBLIC DEPOSITS The Company has not accepted any deposits from public during the year under review. DETAILS OF DIRECTOR / KEY MANAGERIAL PERSONNEL APPOINTED/ RETIRED DURING THE YEAR Shri Chandrakant Thakkar (DIN 00784189); Shri Satyanarayan Rathi(DIN 01797378); Shri Shyam sunder Sarda (DIN 02399265) and Smt. Shrutika Inani (DIN 06937649) have been appointed as Independent Directors of the Company for a period of five years commencing from date of last AGM i.e. 25/09/2014 upto 25/09/2019. Shri Damodarlal Malu (DIN 00301120) and Shri Vasideo Malu ( DIN 00301313), Directors retire by rotation at the ensuing annual general meeting and being eligible offers themselves for re-appointment. The Board on recommendation of Nomination and Remuneration Committee re-appointed Shri Punamchand Malu (DIN 00301030), as Managing Director and Shri Banwarilal Malu (DIN 00301297) as Joint Managing Director of the Company, subject to approval of share holders at the ensuing annual general meeting. INDEPENDENT DIRECTORS The Independent directors have submitted their disclosure to the Board that they fulfill all the requirements as to qualify for their appointment as an Independent Director under the provisions of the Companies Act, 2013 as well as Clause 49 of the Listing Agreement. TRAINING OF INDEPENDENT DIRECTORS Whenever new non-executive and Independent Directors are inducted in the Board, they are introduced to Company culture through appropriate orientation. They are also provided with Company brochures, annual reports etc. DIRECTORS RESPONSBILITY STATEMENT FORMING PART OF DIRECTORS REPORT: As required under Section 134(5) of the Companies Act, 2013, the Director's confirm that: 1 In the preparation of the annual accounts, the applicable accounting standards have been followed. 2 The Directors had selected such accounting policies and applied them consistently and made judgments and estimate that are reasonable and prudent so as to give a true and fair view of the state of affairs of Company as on 31st March 2015 and of the profit of the company for that period. 3 The Directors have 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. 4 The annual accounts have been prepared on a going concern basis. 5 The directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. 6 The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and these were adequate and operating effectively. Directors' Remuneration Remuneration Policy 1. Remuneration to Managing/Whole- time / Executive /Managing Director, KMP and senior Management Personnel: a. The Remuneration / Commission etc. to be Paid to Managing Director/ Joint Managing Directors, etc. shall be governed as per provisions of the Companies Act, 2013 and rules made there under or any other enactment for the time being in force and the approvals obtained from the Members of the Company. b. The Nomination and Remuneration Committee shall make such recommendations to the Board of Directors, as it may consider appropriate with regard to remuneration to Managing Director. 2. Remuneration to Non- Executive / Independent Director: a. The Non- Executive / Independent Directors may receive sitting fees and such other remuneration as permissible under the provisions of Companies Act, 2013. The amount of sitting fees shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors. b. All the remuneration of the Non- Executive / Independent Directors (excluding remuneration for attending meetings as prescribed under section 197(5) of the companies Act, 2013 shall be subject to ceiling / limits as proved under Companies Act, 2013 and rules Made there under or any other enactment for the time being in force. The amount of such remuneration shall be such as may be recommended by the Nomination and Remuneration Committee and approved by the Board of Directors or Shareholders, as the case may be. c. An Independent Director shall not eligible to get stock options and also shall not be eligible to participate in any share based payment schemes of the Company. d. Any remuneration paid to Non- Executive / Independent Directors for services rendered which are of professional in nature shall not be considered as part of the remuneration for the purpose of clause (b) above if the following conditions are satisfied: i. The Services are rendered by such Director in his capacity as the professional; and ii. In the opinion of the committee, the director possesses the requisite qualification for the practice of that profession. 3. Remuneration to Key Managerial Personnel and Senior Management : a. The remuneration to Key Managerial Personnel and senior Management shall consist of fixed pay and may include incentive pay, in compliance with the provisions of the Companies Act, 2013 and in accordance with Company's policy. b. The Fixed pay shall include monthly remuneration, employer's contribution to Provident Fund, contribution too pension fund, pension schemes, etc. as decided from to time. c. The Incentive pay shall be decided based on the balance between performance of the Company and performance of the Key Managerial Personnel and Senior Management, to be decided annually or at such intervals as may be considered appropriate. PARTICULARS OF EMPLOYEES None of the employee, including Key Managerial Personnel, was drawing in excess of the limits prescribed by Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees Rules, 1975, which needs to be disclosed in the directors report. NUMBER OF BOARD MEETINGS HELD: The Board of Directors duly met 4 times during the financial year from 1st April, 2014 to 31st March, 2015. The dates on which the meetings were held are 28/05/2014; 09/08/2014; 14/11/2014 and 14/02/2015. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEE GIVEN OR SERUCIRTY PROVIDED The loans given, investments made or guarantee given or security provided by the Company are same as mentioned in notes to the Financial Statements. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All contracts/ arrangements/ transactions entered by the company during the financial year with related parties were in the ordinary course of business and on arm's length basis. The details are at Annexure A There were no material transactions with the related parties during the year. Your Directors draw attention of members to Note 25 to the financial statement which sets out related party disclosures. AUDIT COMMITTEE As per the provisions of the Listing Agreement and pursuant to Section 177 of the Companies Act, 2013, the Audit committee constituted to review compliances with internal control systems and other various functions of the Company. Smt. CA Shrutika Inani, Independent Director was the Chairman of the Audit Committee. AUDITORS REPORT The notes to the accounts to the comments made by the Auditors in their Report are self -explanatory. The Auditors' report does not contain any qualification, reservation or adverse remark. The Auditors of the Company have not reported any fraud as specified under the section 143(12) of the Companies Act, 2013. AUDITORS M/S Demble Ramani & Co., Chartered Accountants, the Auditors of the company, will retire at ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. They have given information to the effect that their appointment, if made, will be within the limits prescribed under section 141 (3)(g) of the Companies Act, 2013 and they are not disqualified for re-appointment. CORPORATE GOVERNANCE A report on Corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges forms part of the Annual Report. COST AUDITOR'S Pursuant to the provisions of the Companies Act, 2013, the Board of Directors had appointed M/s. Khanuja Patra & Associates, Cost Accountants, as Cost Auditors of the Company for conducting the audit of Cost records for the financial year ended on 31 st March 2015. The audit is in process and report will be filed within prescribed period. VIGIL MECHANISM As per the provisions of Section 177(9) of the Companies Act 2013, a Vigil Mechanism for Directors and employees to report genuine concerns has been established. The same has been uploaded on company's website at www.malupaper.com . SECRETARIAL AUDIT The Secretarial Auditors issued by Practicing Company Secretary is being attached with the Directors report as Annexure B which is self explanatory. ABSTRACT OF THE ANNUAL RETURN The Abstract of the Annual Return for the year31st March 2015 being attached with the Directors Report as Annexure C. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under the Companies Act, 2013, read with the Companies (Accounts) Rules 2014 is given as per 'Annexure D' and forms part of the Directors' Report. As regards disclosure of particulars relating to conservation of energy, great emphasis has been given for reduction of energy consumption to reduce cost per unit of goods. Details are attached herewith as per Annexure D. The Company imports some portion of its raw material requirement. The foreign exchange earnings and outgo are as mentioned in the reports of the auditor of the Company. ACKNOWLEDGEMENTS: Your Directors wish to place on record their gratitude to Bankers, Customers, Business Associates for the co-operation and support and to the Shareholders, dealers and suppliers, staff and workers for their contribution to the company's growth. By Order Of Board Of Directors Sd/ Punamchand Malu Managing Director(DIN:00301030) Sd/ Banwarilal Malu Jt. Managing Director (DIN:00301297) Place: Nagpur Date: 31/08/2015 |