Dear Shareholders,
We have the pleasure in presenting the 41th Annual Report of the Company and
the audited statement of accounts for the year ended 31stMarch, 2023.
FINANCIAL PERFORMANCE
A summary of the financial results is given below:
(Rs. In Crores)
FINANCIAL RESULTS
| Particulars |
Year Ended |
|
31.03.2023 |
31.03.2022 |
| Total Income |
414.12 |
423.18 |
| Profit before Interest & Depreciation |
12.37 |
27.46 |
| Interest & Depreciation |
12.14 |
11.17 |
| Profit before Tax |
0.22 |
16.29 |
| Provision for Taxes |
-2.45 |
-0.36 |
| Surplus for the year |
2.67 |
16.65 |
| Other Comprehensive Income |
-3.84 |
-1.80 |
| Total comprehensive Income for the year |
-1.17 |
14.85 |
| Earnings per Share (Rs.) |
1.41 |
8.76 |
REVIEW OF OPERATIONS
The company is operating mainly two segments
1) Paper and
2) Industrial Chemicals.
The FY 2022-23 was adversely affected by the impact of Russia-Ukrain war, rising
interest rate, rising inflation and the measures taken by the various countries to control
the inflation. All these factors resulted in sluggish demand across the globe,
unprecedented uncertainties and erratic price movements in raw material prices. The
company was able to pass on the increase in prices of raw material to a major extent
because of its customised and specialty product portfolio.
The efforts taken by the company in establishing its foot prints in exports market were
got recognised and rewarded by the Federation of Indian Exporters Organization -Western
Region (FIEO). The company is glad to inform you that the company received Export
Excellency Award in Multi Product (Non-MSME) -Gold for 2 consecutive years i.e. FY 201819
and FY 2019-20.
Amid the uncertainties and weak global sentiments, the company is glad to announce that
the company undertook various expansions projects involving capital outlay of over 75 Cr
in FY 202223. The proj ects include installation of Co-generation Power Plant and
installation of Pulping street in Unit Rama Paper, increasing the manufacturing capacity
of Sulphuric Acid from 280 TPD to 500 TPD in unit Nath chemicals and installation of
online coating paper machine in unit Nath paper. All the projects were progressing well as
per the expected timelines in FY 2022-23. All the projects will be completed in Q2 of FY
2023-24.
The expansion projects required shutting down of existing plant for replacement and
synchronization with the existing set up in Q3 and Q4 of FY 2022-23 which resulted in
under utilization of capacities. Despite that, the company achieved the total income of
Rs. 414.12 Cr as against the turnover of Rs. 423.17 Cr in previous year. However,
under-utilization of capacities due to shutting down of plants for expansion resulted in
lower recoveries of fixed overheads and impacted the profit margin in FY 22-23.
PAPER DIVISION
Paper division was able to achieve total income of Rs. 304.63 Cr FY 2022-23. The share
of export sales was Rs. 62.61 Cr. The company was able to maintain its share of exports of
over 20 % in FY 22-23 despite weak global demand especially from European
Countries. At present, the company is exporting its paper products to around 22 countries
and demand graph is on continuous rise from the export market.
UNIT- RAMA PAPER
The company has invested over 24 Cr in setting up of co-generation power project which
is being commissioned in FY 2023-24. The benefits and results of cogeneration power plant
will start flowing from mid of FY 2023-24.
Since 2020 after a break out of covid-19 and thereafter several other global events,
the paper industry depending on imported recycled waste paper witnessed high volatility in
the prices and availability of imported raw materials. On various occasions, mismatches in
demand and supply increased the prices of imported raw materials manifolds. To overcome
the dependency on imported waste papers, the unit Rama paper has successfully completed
installation of a new Pulping Street which offers flexibility in using variety of raw
material mix which will reduce dependency on particular grade of imported waste paper.
Based on the options and availability, company will able to choose right mix which will
help in controlling the material cost.
Unit Rama Paper achieved turnover of Rs. 148.34 Cr as against the turnover of Rs.
133.41 Cr recorded in previous year because of its customized specialty paper portfolio.
The share of export sales increased to Rs. 50.82Cr from Rs. 39.32 Cr and the unit is
witnessing good demand from the export markets.
CERTIFICATIONS
It is endeavor of the company to maintain high quality standards and base on that the
company could get a proper validation of its certificates under ISO certifications of
9001:2015 and 14001:2015.
Likewise the steady compliances of sustained high norms of Eco friendliness and Save
Environmental moves have, persuaded the World forestry organization FSC COC to continue
the validation for code of conduct of our quality and Global acceptance of products.
PRODUCTS AND NEW PRODUCTS LAUNCH
Last year your company had successful launch of kraft for square bottom paper bags
named as Mac D under Ban Single use Plastic movement by Government. The Mac D Kraft is
well stablished and accepted in the market. The company is committed to support SAVE
ENVOIRONMENT movement and has decided to develop high strength CARRY BAGS / SHOPPERS
BAGS to discourage the use of plastic and Non-woven bags.
Other products produced by Company like Absorbent Kraft, M G White and Colour Tissues.
(Gift wraps) M G Kraft and One Time Carbon Base Paper are already well accepted and moving
in Global markets very well. The excellence in quality of these products has led your
company to receive Export Excellence Award in Multi Products Category for the year 2018-2019
and year 2019-2020. It is a matter of pride to announce that Company has
attained a Global leadership position in related products segments.
A rigorous R & D work is on in Companys laboratory to develop other related
products to Absorbent Kraft like Gold Rust and Masking paper which will be launched by the
early 2024 are bound to give an Edge in the market and a good contribution in revenue.
MARKETING STRATEGIES
Effective Marketing strategy is an organizations strong promotional channel to
increase its sales and achieve sustainable competitive advantage within its markets.
Consistency in products quality and service per excellence plays a vital role in
expanding and securing the market share.
The annual growth in worldwide production of Paper and Paper boards is estimated at
rate of 7.5% which means the Global demand for various paper and paper boards is likely to
achieve the target of USD 245 billion by 2027 .
Along with leading position in domestic market. Company has expanded its export
markets of Absorbent Kraft, White Tissue and Colour Tissues and M G Kraft from South East
Asian countries to Europe and South America. The new markets recently added to this
segment are Egypt, Guatemala, Argentina, Brazil and Mexico.
Companys leading product Absorbent Kraft and its synergic products are set to crack
the phenomenal growing demand of Building Decorative Material in international market and
have its maximum share. The growth in demand of High-Pressure Laminates and Commercial
Decorative laminates is estimated to USD 11.75 Billion between 2023 to 2028.
Continuous innovations and R&D works to upgrade and improve the quality of products
do contribute a lot to secure the new market spaces. It is matter of pleasure to state
that a large and well-knit distribution network in the country and overseas locations
build concrete foundation for marketing companys products.
UNIT -NATH PAPER
Despite all the adverse global scenario your Companys Unit-Nath Paper has produced
28,957 MT of Core Board and Thermal Paper 2943 MT.
Unit Nath Paper has achieved total income of Rs. 156.29 Crores by selling 28,648 MT of
Core Board and 2,919 MT of Thermal Grade Paper.
During the year, various measures were undertaken by your company to enhance product
efficiency & production capacity. Company has commissioned new coating machine (double
side coating). This will enhance the present capacity of production of thermal paper from
300 mt per month to 600 mt per month. The new coating machine will provide a double-edge
benefit to the company, i.e by reducing the chemical consumption and by enhancing the
production capacity. Further existing coater may be used making chromo or calendar paper,
which may further enhance the profitability of the company in the coming years.
The Companys capital investment will help in reducing power consumption and increase
in the production capacity of the Thermal paper in the coming years.
Companys 1 MW solar power on OPEX model has become operational during the current
financial year. Company could generate 1.90 million kwh from solar power. This measure has
helped the company to reduce energy costs.
PRODUCTS
Unit-Nath paper is producing high GSM Core Boards and Thermal Paper, which are well
received in the market.
• Core Board is used for manufacturing of paper tubes used by textile and plastic
films manufacturing industry. Company is producing Core Board TTP 500 & TTP 600 grade.
• There is a good demand for paper bags with the ban on plastics, hence we have
developed Bag Paper, which in the coming year will also become one of our major products.
• Thermal Paper is firmly established in many areas of daily life with a wide
range of applications like ATM Rolls, Cash Deposit Kiosks, Point of Sales Receipts, Cash
Registers, Movie Tickets, Bus Tickets, Parking Slots, and Toll Tickets etc. This
technology provides speedy, reliable, economical, and high-definition images.
MARKET
Companys higher GSM Core Boards and Thermal Paper is well accepted in the market.
Demand for both these grades is growing constantly. Domestic market for manmade fibre has
been growing rapidly and many expansions are in the pipeline. TTP 500 and TTP 600 grade
used in POY/FDY paper tubes & plastic films. The Company also manufactures a specialty
grade paper called Thermal Grade Paper, used for fax machines, ATMs & POS machines.
The company has high quality products and competitive rates.
The Company is expanding its overseas market also. And exporting its products to
countries like China, Thailand, Sri Lanka & Middle east.
CHEMICAL DIVISION UNIT-NATH CHEMICAL
The chemical division of your company continues to be very flexible in its product mix
which gives it an advantage to shift the products based on the market demands.
The chemical segment sold 1,06,884 MT of its products and the total turnover during the
year for the chemical unit was Rs 104.63 Crores.
We are also pleased to inform that expansion plan undertaken by the company to expand
its Sulphuric acid capacity from 300 MT per day to 500 Mt per day is completed. Along with
it has also commissioned a power turbine for a capacity of 3.2 MW which will help to
reduce its power expenses substantially.
DIVIDEND
In view of the proposed growth plans, the Directors have not recommended dividend for
the financial year 2022-23.
TRANSFER TO RESERVES
The Company has not transferred any amount from profit to general reserves.
SUBSIDARY COMPANY
The Company does not have any subsidiary.
PUBLIC DEPOSIT
The Company has not accepted deposits from the public during the financial year under
the review within the meaning of Section 73 of the Companies Act, 2013, read with
companies (Acceptance of Deposits) Rules, 2014.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return in Form No. MGT-9 shall form part of the Boards Report
in Annexure-I.
CORPORATE GOVERNANCE
A separate statement on Corporate Governance together with a certificate from the
Auditors of the Company regarding compliance of conditions of Corporate Governance as
stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
forms part of this report are given in Annexure-II.
NUMBER OF MEETINGS HELD DURING THE YEAR
The details of all the meetings of Board of Directors and the Committees, which have
taken place during the year and their details along with their attendance, is given in
Para 2 of Annexure-II.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per the Provisions of Sec 135 of the Companies Act, 2013 related to Corporate Social
Responsibility (CSR), the amount of CSR required to be spent for the FY 2022-23 is Rs.
38.00 Lakhs which has already been incurred by the Company. The initiatives undertaken by
the Company on CSR activities during the year under review are set out in Annexure-III
which is part of this report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis of the financial condition and results of
consolidated operations of the Company under review, is annexed and forms an integral part
of the Directors Report, is given in Annexure-IV.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of Section 152 of the Companies Act, 2013 and Rules made
there under, Mr Abhay Kumar Jain (DIN 02454426) Director of the Company, shall retire by
rotation at this Annual General Meeting and being eligible, offer himself for
re-appointment, for which necessary resolution has been incorporated in the notice of the
meeting. The Board of Directors recommends the re-appointment of Mr Abhay kumar jain as a
Director of the Company.
Mr. Akash Kagliwal (DIN: 01691724) was appointed as Managing Director on the Board with
effect from 14th November 2022 and his appointment is approved by shareholders of the
company in Extra ordinary General Meeting held on 29.12.2022, in terms of section 161 of
the Companies Act, 2013.
Ms. Nupur Lodwal (DIN: 10150318) was appointed as Additional Director on the Board with
effect from 31st August 2023 and who holds office till the date of the AGM, in terms of
section 161 of the Companies Act, 2013.
Mrs Jeevanlata Kagliwal (DIN: 02057459), Non-Executive Director resigned from the Board
of your company with effective from close of business hours on 31st August 2023. The Board
places on record its sincere appreciation for the valuable guidance and contribution made
by Mrs Jeevanlata Kagliwal in the deliberations of the Board during her tenure.
Mr Akhilesh Kumar Sharma (DIN: 01831269) Executive Director resigned from the Board of
your company with effective from close of business hours on 31st August 2023. The Board
places on record its sincere appreciation for the valuable guidance and contribution made
by Mr Akhilesh Kumar Sharma in the deliberations of the Board during his tenure.
The Company has received declarations from all the Independent Directors of the Company
in terms of Section 149(7) of the Act, confirming that they meet criteria of independence
as prescribed under section 149(6) of the Act and Regulation 25 of SEBI Listing
Regulations, 2015.
Based on the confirmations received from Directors, none of the Directors are
disqualified from appointment under Section 164 of the Companies Act, 2013.
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 that:
a. In the preparation of the annual accounts for the year ended March 31, 2023, the
applicable Accounting Standards have been followed and there are no material departures
from the same;
b. 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 March 31,2023 and of the Profit of
the Company for that period;
c. 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. The Directors had prepared the annual accounts of the Company on a going concern
basis;
e. 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;
f. 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.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The Disclosures pertaining to remuneration as required Under Section 197(2) of the
Companies Act, 2013 and with Rules 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 forms part of Directors Report, is given in Annexure-V.
The statement of particulars of employees under section 197(12) of the Companies Act,
2013 and with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 is not provided with, as during financial year under
review, no employee of the company including Whole Time Director were in receipt of
remuneration in excess of the limits set out in the said rules.
EVALUATION OF BOARD
Pursuant to the provisions of the Companies Act, 2013 the Board has carried out an
annual performance evaluation of the Directors individually as well as the evaluation of
the working of its Audit, Nomination & Remuneration, CSR and Compliance Committees and
its own performance. The manner in which the evaluation has been carried out has been
explained in the Corporate Governance Report.
INTERNAL CONTROL SYSTEM
The details in respect of Internal Financial Control and their adequacy are included in
the Management Discussion and Analysis, which is a part of this report.
The company has a robust internal control framework commensurate with the nature, size,
risk and complexities of the business. The Companys internal control environment ensures
efficient conduct of operations, security of assets, detection and prevention of frauds
and errors and timely completion of accounting records with accuracy and reliable
information.
The company also has appointed the external agency as independent internal auditor to
ensure implementation and effectiveness of internal control system. The observations of
Internal Auditors are routinely evaluated and reviewed by the Audit Committee. Based on
the review and evaluation, the Audit Committee has concluded that the Internal control
systems implemented by the company are adequate and effective.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
During the year, your Directors have constituted a Whistle Blower Policy / Vigil
Mechanism Policy for the Company to report to the management instances of unethical
behaviour, actual or suspected, fraud or violation of the code of conduct of the Company
as per the provisions of Section 177 (9) and (10) of Companies Act, 2013. The policy
reflects the commitment of the Company and its management for maintaining highest ethical
standards while undertaking open and fair business practises and culture, implementing and
enforcing effective system to detect, counter and prevent bribery and other corrupt
business practices. The Vigil Mechanism Policy report has been uploaded on the Website of
the Company at www.nathindustries.com. It is affirmed that no person has been
denied access to the Audit Committee.
OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013
The Company is sensitive to women employees at workplace. As required under the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal Act), 2013, the
Company has a documented a policy to ensure safety of women and prevention of sexual
harassment.
During the FY 2022-23, no complaint of sexual harassment has been filed nor any
complaints are pending at the end of the financial year 2022-23.
RISK MANAGEMENT POLICY
Risk management is an integral component of good corporate governance and fundamental
in achieving the Companys strategic and operational activities. It improves decision
making, defines business opportunities and mitigates the material events that mat impact
shareholder value.
The Board of Directors have designed risk management policy for the company which
consist of identification of elements of risks which may threaten the existence of the
Company as per the provisions of Section 134(3) of the Companies Act, 2013. The detailed
policy forms part of the Annual Report and it is given in Annexure IV.
STATUTORY INFORMATION
The Company is basically into the Paper and Chemical business and is the member of BSE
Platform.
STATUTORY AUDITORS
Statutory Auditor of the Company M/S Vidya & Co., Chartered Accountants (Firm
Registration No. 308022E), Mumbai who have completed five years period of appointment and
due to their other commitments, they expressed their inability to continue as a Statutory
Auditor of the Company after conclusion of the Annual General meeting to be held on 29th
September 2023.
The Board places on record its sincere appreciation for the valuable guidance and
contribution made by Statutory Auditor M/S Vidya & Co., Chartered Accountants in their
tenure.
The Board has appointed M/s N R Agrawal & Co, Chartered Accountants, Mumbai (having
Firm Registration No.100143W) as Statutory Auditors of the Company, who is going to be
appointed in this AGM and holds office until the conclusion of the Annual General Meeting
to be held in year 2028. The Company has received letter from N R Agrawal & Co,
Chartered Accountants, to the effect that their ratification of appointment, if made,
would be within the prescribed limits under Section 139 of the Companies Act, 2013 and
that they are not disqualified for such appointment within the meaning of Section 141 of
the Companies Act, 2013.
COST AUDITOR
The Board has appointed M/S RAJA DUTTA & CO, Cost Accountants (Firm Registration
no. 101555, Membership no-30063, PAN no- AJDPD6775F) Daman as a Cost Auditor of the
Company for the financial year 2023-24. Company has Maintained Cost record and conducted
cost audit as specified by Central Government under Section 148 (1) of Companies Act,
2013.
SECRETARIAL AUDITOR
The Secretarial Audit for the FY 2022-23 was carried out by Ms. Neha P. Agrawal. The
Secretarial Audit Report is self-explanatory and does not contain any qualification,
reservation or adverse remark. The Secretarial Audit Report forms the part of this report
and annexed in Annexure-VII.
AUDITORS REPORT
The notes referred to by the Auditors in their report are self-explanatory and do not
call for further explanation.
With reference to the observation of auditors regarding transfer of title deeds of the
amalgamating companies viz Nath Industrial Chemicals Limited and Nath Pulp and Paper Mills
Limited, the company hereby informs that the legal formalities for transfer of titles
deeds are already submitted to the concerned authorities and transfer formalities are
under process.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
No material transaction with related parties were entered into during the Financial
Year by the Company with the Promoters, Key Managerial Persons or any other person which
may have potential conflict with the interest of the Company. Information on transactions
carried out with the related parties are disclosed in the Notes to Accounts accompanying
the financial statements.
The transactions with related parties entered were in the ordinary course of the
business and were on arms lengths basis. Hence filing of Form AOC-2 is not applicable to
the company.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of Guarantees and Investments covered under the provisions of Section 186 of
the Companies Act, 2013 are given in the Notes to the Financial statements.
INSURANCE
All the properties and the insurable interest of the Company including building, plants
and machineries and stocks wherever necessary and to the extent required have been
adequately insured.
RESEARCH & DEVELOPMENT
The Company believes that technological obsolescence is a reality. Only progressive
research and development will help us to measure up to future challenges and
opportunities. We invest in and encourage continuous innovation.
ENERGY CONSERVATION MEASURES, TECHNOLOGY ABSORPTION AND R& D EFFORTS AND FOREIGN
EXCHANGE EARNINGS AND OUTGO
Information in accordance with the provisions of Section 134 (3) (m) of the Companies
Act, 2013 read with the Companies (Accounts) Rules, 2014 are set out below:
(A) Conservation of Energy
As a Energy Conservation Measure, 1 MW Solar Power plant on Opex basic has become
operational during the year. It could generate around 19 Lakhs KwH during the year which
will reduce the intake from the grid.
The paper manufacturing process requires steam for drying of the paper. Earlier, the
requirement of steam was met from the steam generated from the boiler. During the year,
the company installed a co-generation power plant consisting of high pressure multi fuel
Boiler and Turbine. The high pressure steam will be used in generation of electricity and
low pressure steam will be used in manufacturing process. With margin increase in coal
consumption, the company will be able to generate electricity which will reduce
electricity demand from the grid considerably.
The installation of new Turbine in chemical division will use steam generated during
the Sulphuric Acid Manufacturing process for generation of electricity. Post expansion,
the electricity requirement for the chemical division will be fulfilled from the new
Turbine.
(B) Technology Absorption and Research Development
The company is known for developing Customised and Specialty paper as per the
requirement of the customer. The customisation within the permissible budget is achieved
through technology absorption as well as continuous research and development.
During the year, to avoid dependency on imported waste paper which witnessed high
volatility post Covid-19, the company has commissioned Pepsi Pulping street which will
give flexibility in usage of different grade of raw materials and help in controlling the
costs.
(C) Foreign Exchange Earnings and Outgo
The Company has incurred the following expenses in foreign currency during the
financial year 2022-23. The rupee equivalent of that amount has been given hereunder:
| Particulars |
Rs. In Crores |
| Total Earnings |
62.61 |
| Total Expenditure |
118.01 |
ACKNOWLEDGEMENT
The Board of Directors acknowledge with appreciation, the co-operation and assistance
received from its Employees, Customers, Suppliers, Bankers, Regulatory Authorities, Stock
Exchange and Business Associates at all levels during the period under report.
The Board of Directors also takes this opportunity to convey their gratitude and
sincere thanks for the co-operations and assistance received from the Stakeholders. The
Board of Directors acknowledges your confidence and continued support and looks forward
for the same in future as well.
|
For and on behalf of the Board, |
|
Akash Kagliwal |
| Place: Mumbai |
Managing Director |
| Date: 31.08.2023 |
(DIN:01691724) |
+91-9892691696
