Balkrishna Paper Mills Ltd Directors Report.
The Members of,
Balkrishna Paper Mills Ltd
Your Directors have pleasure in presenting the Sixth Annual Report of the Company along with Audited Financial Statements for the Financial year ended 31st March, 2019.
1. FINANCIAL RESULTS:
The summary of the financial performance of the Company for the financial year ended March 31, 2019 compared to the previous year ended March 31, 2018, is given below:
|(र in Lakhs|
|Net Turnover and Other Income||21,445.35||21,343.57|
|Profit/(Loss) before Depreciation and Tax||(3,703.02)||(3,106.71)|
|Less: Depreciation and Amortisation||660.89||682.90|
|Profit/(loss) before Tax||(4,363.91)||(3,789.61)|
|Less: Provision for Taxation:|
|Current Tax (MAT)||0.00||0.00|
|Deferred Tax (Net)||(140.01)||229.17|
|Profit after Tax||(4,223.90)||(4,018.78)|
|Add/(Less): Other Comprehensive Income (net of taxes)||10.00||(5.70)|
|Total Comprehensive Income/ (Expenses) for the year||(4,213.90)||(4,024.48)|
Pursuant to the notification dated 16th February, 2015 issued by the Ministry of Corporate Affairs, the Company has adopted the Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from 1st April, 2017. Financial Statements for the year ended and as at 31st March, 2019 have been restated to confirm with Ind AS.
During the year under review, the Gross turnover and other Income of your Company increased to र 21,445.35 Lakhs from र 21,343.57 Lakhs in the previous year. The net Loss after tax stood at र4,213.90 Lakhs against Loss of र 4,024.48 Lakhs in the previous year.
Your Directors have not recommended any dividend for the financial year under review.
4. SHARE CAPITAL:
The paid up Share Capital of the Company as on 31st March, 2019 are as under:
- Equity Share Capital : र1074 Lakhs
- Preference Share Capital: र2500 Lakhs.
The Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. As on 31st March, 2019, none of the Directors of the Company hold convertible instruments in the Company.
5. REVISION OF FINANCIAL STATEMENT:
There was no revision of the financial statements for the year under review.
6. MANAGEMENT DISCUSSION AND ANALYSIS:
Global economy is facing a confluence of risks, which could severely disrupt economic activity and inflict significant damage on longer-term development prospects. These risks include an escalation of trade disputes, an abrupt tightening of global financial conditions, and intensifying climate risks.
Despite an improvement in growth prospects at the global level, several large developing countries saw a decline in per capita income in 2018. Even among the economies that are experiencing strong per capita income growth, economic activity is often driven by core industrial and urban regions, leaving peripheral and rural areas behind.
After strong growth in 2017 and early 2018, global economic activity slowed notably in the second half of last year, reflecting a confluence of factors affecting major economies. Global growth is now projected to slow from 3.6 % in 2018 to 3.3% in 2019, before returning to 3.6% in 2020.
Indian Paper and Paper products industry growth is expected to be driven by a combination of factors such as rising income levels, growing per capita expenditure, rapid urbanization and a larger proportion of earning population which is expected to lead consumption. According to CRISIL Research, over the next 5 years (2017 to 2022), global paper demand is expected to grow at a subdued pace.
Your Company is engaged in manufacturing and marketing of quality Coated Duplex Boards. Due to the slowdown in economy worldwide, underutilisation of capacity and high debt burden, we could not increase the realisation rates in line with the expenses. All these factors affected the performance of the Company.
Your Company is trying to improve its realisation by manufacturing more high value for money products and also expanding its market base in domestic as well as overseas market.
Internal Audit and Control
Your Companys maintains all its records in ERP Systems and maximum approvals are routed through this system. The Company has laid down adequate systems and supported by the procedures for ensuring internal financial controls. The Company has appointed an external audit firm as Internal Auditors for day to day checking and monitoring the internal control measures. Internal Auditors are present at the Audit Committee Meetings where internal Audit Reports are discussed along with management comments and the final observation of the Internal Auditor.
Opportunities Threats and Risk
The existing Paperboard players alive to the emerging international threats, have been aggressively pursuing quality improvement programmes, coupled with cost rationalisation. Increasingly, more modern technologies are sought to be implemented, with added focus on environmental compliance.
Relation between the Management and the labour were cordial throughout the year under review. The Management persistently promote a culture of employee recognition and motivation.
Forward Looking Statement
Statements in the Management Discussion and Analysis describing the Companys objectives, predictions may be "forward looking statements" within the meaning of applicable laws and regulations. The actual results could differ materially from the forward looking statements contained in this document due to certain risks and uncertainties, which include the effect of economic and political conditions in India, Government policies, new regulations that may affect the Company business.
7. CORPORATE GOVERNANCE:
A report on Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015, together with Certificate from the Auditors of the Company confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid regulations, forms part of the Annual Report.
8. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Your Directors pay their respectful homage to late Shri Dharaprasad Poddarji, founder Promoter, who left for his heavenly abode on 20th October, 2018. Your Directors pray to the Almighty to grant eternal peace to his departed soul.
Forgo of Remuneration:
Shri Anurag Poddar, Chairman and Managing Director and Shri Ankit Poddar, Executive Director have forgone their monthly remuneration due to poor financial position of the Company with effect from 1st April, 2019.
Shri Ankit Poddar, Executive Director, retires by rotation and being eligible, offers himself for re-appointment. Your Directors commend his re-appointment.
Three Independent Directors of the Company, namely Shri Harish N. Motiwalla, Shri Rakesh N. Garodia and Smt. Meghna S. Shah, who were appointed by the members at the AGM held on 24th August, 2015 under section 149 of the Act for a term of 5 (five) consecutive years are proposed to be reappointed by the shareholders special resolution (s) as Independent Directors of the Company, to hold office for another term of 5 (five) years w.e.f. 11th February, 2020.
Shri Harish N. Motiwalla, who has attained the age of 75 (seventy five) years continues to be Independent Director of the Company w.e.f. April 1st, 2019 till completion of his present term (i.e. upto 10th February, 2020)
Brief particulars of Directors being appointed/re-appointed as required by the SEBI (LODR) Regulations, 2015 and Secretarial Standards on General Meetings are provided in the Annexure to the notice convening the AGM of the Company.
Declarations by Independent Directors:
All the Independent Directors of the Company have given requisite declarations that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and also Regulation 16(1)b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
9. NOMINATION AND REMUNERATION COMMITTEE:
The composition, role, terms of reference as well as powers of the Nomination and Remuneration Committee of the Company meets the requirements of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (LODR) Regulations, 2015.
The Committee comprises of 3 Independent Directors.
The composition of the Nomination and Remuneration Committee* and category of members, is given in the table below:
|Sr. No.||Name of the Director||Category|
|1||Shri Ramanlal B. Golecha||Independent Director|
|2||Shri Harish N. Motiwalla||Independent Director|
|3||Shri Rakesh N. Garodia||Independent Director|
* During the year under review, no Meeting was held.
The Company has devised the Nomination and Remuneration Policy for the selection, appointment and remuneration of the whole time Directors, Key Managerial Personnel and Senior Management Personnel. The extract of Nomination and Remuneration Policy is provided in the Corporate Governance Report and forms part of this Annual Report.
Companys Policy on appointment and remuneration of Directors.
Appointment of Independent Directors.
All Independent Directors of the Company are appointed for a term of 5 years. Accordingly, the Independent Directors
viz. Shri Harish N. Motiwalla, Shri Rakesh N. Garodia and Smt. Meghna S. Shah hold office up to 10th February, 2020 and reappointed by the Board for further period of 5 years, subject to approval by shareholders in its ensuing AGM and Shri Ramanlal B. Golecha up to 19th November, 2022.
Criteria for appointment of Independent Directors.
The Independent Directors shall be of high integrity with relevant experience and expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management, so as to have a diverse Board.
Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Nomination and Remuneration Committee has laid down the criteria for evaluation of the performance of individual Directors, the Board as a whole. Evaluation of performance is undertaken annually. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors at a separately convened meeting at which the performance of the Board as a whole was also evaluated. The performance evaluation of the Independent Directors was carried out by the entire Board (excluding the Director being evaluated). The Company has implemented a system of evaluation on the basis of a structured questionnaire which comprises evaluation criteria taking into consideration various performance related aspects.
The Directors expressed their satisfaction with the evaluation process.
Remuneration of Non-Executive Directors:
The Nonexecutive Directors shall be entitled to receive remuneration by way of sitting fees, reimbursement of expenses for participation in Board/Committee meetings and commission, if any, after approval of the members.
10. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)( c) and 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, your Directors to the best of their knowledge hereby confirm that :
a. that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.
b. that the Directors have 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 as at 31st March, 2019 and of the Profit of the Company for that year under review;
c. that the Directors have 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. that the Directors have prepared the accounts for the financial year on going concern basis;
e. the Directors have laid down internal financial controls, which are adequate and were operating effectively.
f. the Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
11. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:
a. BOARD Meetings:
The Board of Directors met 4 times during the year on the following dates in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. May 16, 2018, August 7, 2018, November 3, 2018, February 6, 2019.
In addition to the above, Independent Directors Meeting was also held on February 6, 2019.
b. COMMITTEES OF THE BOARD:
The Board has the following Committees:
1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholders Relationship Committee;
4. Finance Committee.
5. Share transfer Committee.
The details of these Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.
12. EXTRACT OF ANNuAL RETuRN
Pursuant to the provisions of Section 134(3)(a)of the Companies Act, 2013, Extract of the Annual Return in Form No. MGT - 9 for the financial year ended 31st March, 2019 made under the provisions of Section 92(3) of the Act is attached as Annexure I which forms part of this Report and is also receivable on the Companys website at www.bpml.in.
13. FIXED DEPOSITS
During the year under review, your Company has not accepted any fixed deposits and there were no unclaimed deposits or interest thereon as on 31st March, 2019.
14. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECuRITIES:
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to Financial Statements.
15. VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The Company has framed a Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The details of the Policy are given in the Corporate Governance Report and the policy is posted on the Companys website: www.bpml.in.
16. RELATED PARTY TRANSACTIONS:
All related party transactions that were entered into during the financial year were in the ordinary course of business and were on an arms length basis. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other related parties which may have a potential conflict with the interest of the Company at large.
During the year, the Company has not entered into Related Party Transactions which could be considered as material in accordance with the policy on Related Party Transaction of the Company. Accordingly, the disclosure of related party transactions as required under section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable to your Company.
All related party transactions for the year are placed before the Audit Committee as well as before the Board for approval. Omnibus approval was obtained on a yearly basis for transactions which are of repetitive nature. The transactions entered into with related parties are reviewed on a quarterly basis by the Audit Committee.
The policy on Related Party Transactions as approved by the Audit Committee and Board is uploaded on the Companys website at the link www.bpml.in.
Members can refer to Note No. 37 to the Financial Statements which set out related party disclosures.
17. RISK MANAGEMENT FRAMEWORK:
The Board of Directors of the Company has Risk Management Framework to avoid events, situations or circumstances which may lead to negative consequences on the Companys businesses, and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions.
18. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL
During the year under review, there were no orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Companys operations in future.
19. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013:
There were no material changes and commitments which could affect the Companys financial position have occurred between the end of the financial year of the Company and date of this report.
20. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OuTGO
The particulars as required under the provisions of Section134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure III which forms part of this Report
The matters related to Auditors and their Reports are as under:
a. OBSERVATIONS OF STATuTORY AuDITORS ON ACCOuNTS FOR THE YEAR ENDED 31st MARCH 2019:
The observations made by the Statutory Auditors in their report for the financial year ended 31st March 2019 read with the explanatory notes therein are selfexplanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.
Further, there were no adverse remarks or qualifications of reservations in the audit report submitted by auditors.
b. COST AUDITORS:
Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Notifications/Circulars issued by the Ministry of Corporate Affairs from time to time, the Board of Directors have appointed M/s. K. G. Goyal & Associate, Cost Accountants, as a cost auditor of the Company for the Financial Year 2019-20.
The remuneration to be paid to Cost auditors require ratification by the shareholders and accordingly necessary resolution for ratification for seeking approval of members is included in Notice of ensuing AGM.
c. SECRETARIAL AUDITORS.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Shri Jugalkishore Fatehchandka, Company Secretary in Practice to undertake Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report is annexed herewith as Annexure - II.
There is no Secretarial audit qualification for the year under review.
22. INDuSTRIAL Relations:
Industrial relations with staff and workmen during the year under review continued to be cordial.
23. Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013:
The Company has formulated and implemented a policy of prevention of sexual harassment at the workplace with
mechanism of loading/redressal complaints. During the year under review, there were no complaints reported to the Board.
24. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:
The information required pursuant to Section 197 of the Companies Act, 2013 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company will be provided upon request in terms of section 196 of the Act, the Report is being sent to all the Shareholders of the Company and other entitled thereto, excluding the information, particulars of which is available for inspection by the Members at the Registered office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Members interested in obtaining a copy thereof, may write to the Company Secretary in this regard.
All the properties/assets including buildings, furniture/ fixtures, and insurable interests of the Company are adequately insured.
Your Directors take this opportunity to thank the Customers, Suppliers, Shareholders, Bankers, Dealers, Agents, Employees and Government and Semi-Government Authorities for their consistent support and encouragement to the Company.
|For and on behalf of the Board of Directors|
|Anurag P. Poddar|
|Chairman & Managing Director|
|Date: 13th May 2019.|