DIRECTORS REPORT DEAR MEMBERS, Your directors have pleasure in presenting you their 20th Annual Report on the business and operations of the company together with the Audited Financial Statement of the Company for the year ended 31st March 2015. DIVIDEND: As company required funds for business and growth, no Dividend is recommended for the year under review. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND The provisions of Section 125(2) of the Companies Act, 2013 do not apply as there was no dividend declared and paid last year. OPERATIONAL REVIEW: The Turnover for the Financial Year ended on 31.03.2015 is Rs. 31003.09 Lacs as compared to 38391.60 Lacs last year. The Net Profit (Before Tax) of the Company is Rs 87.74 Lacs as compared to 107.14 Lacs last year. The company is engaged in marketing business of waste Paper, finished Paper, steel etc. Steel Industry scenario is under global recession since last year and paper Industry is also suffering in present scenario of paper industry. Due to this recession, the turnover of the company has fallen as compared to the last year and consequently the net profit of the company has also dipped. FUTURE PROSPECTS India's paper industry is worth Rs. 225 billion. It accounts for about 1.6 per cent of the world's production of paper and paperboard. In India, the demand for paper is set to far surpass supply and is expected to reach the level of 110 lakh tones by 2015. It is said that if the gross domestic product (GDP) grows at 10 per cent, paper demand will grow at 8 per cent. The per capita consumption is poised for a big leap forward in sync with the economic growth. A modest pick in the Economy will boost the business of the company. Further, the company is planning to explore new areas of expansion of its business. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and its subsidiaries. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. DEPOSITS The Company has neither accepted nor renewed any deposits during the year under review. AUDITORS AND AUDITOR'S REPORT: a) STATUTORYAUDITORS M/s Goel Singhal & Associates, Chartered Accountants, Muzaffarnagar were appointed as Statutory Auditors for a period of three years in the Annual General Meeting held on 30/09/2014. Their continuance of appointment and payment of remuneration are to be confirmed and approved in the ensuing Annual General Meeting. The Company has received a certificate from the above Auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 ofthe Companies Act, 2013. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. b) 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 Shailly Goel & Co., Company Secretaries to undertake the Secretarial Audit of the company. The Secretarial Audit Report is annexed herewith as 'Annexure 1'. The Board noted the Observation made in the Secretarial Audit Report and explained that there was 'search and seizure' operation by the Department of Income Tax on March 07, 2014 under section 132 of the Income Tax Act, 1961. During these operations, certain books of accounts and records were seized by the authorities. Due to this operation, company could not provide the Audited results to Stock Exchange as per listing Agreement. However, the approval of Accounts was in compliance with the Companies Act, 2013. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES No company has become or ceased to be the Subsidiary, Joint Venture And Associate Company of the company during the Financial Year. As on 31/03/2015, there were two Associate companies: 1) Brinagopal Traders Pvt Ltd 2) Swabhiman Vyapaar Pvt Ltd. The statement containing silent feature of the financial statement of associate company is annexed in financial statement. SHARE CAPITAL The paid up equity share capital as on 31/03/2015 was Rs. 11,00,00,000/- Crore. Further the company has not bought back any of its securities, has not issued any Sweat Equity Shares, has not provided any Stock Option Scheme to the employees and no Bonus Shares were issued during the year under review. EXTRACT OF ANNUAL RETURN The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure II and is attached to this Report. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO ETC: Information on conservation of Energy, Technology absorption, Foreign Exchange earnings and outgo required to be disclosed under Section 134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are provided hereunder : (A) Conservation of Energy : All efforts are made to conserve and optimize use of energy with continuous monitoring and to reduce its electricity consumption during the financial year. (B) Technology absorption : Since the company is involved in the trading activities, no specific expenses are made towards technology absorption during the financial year. (C) Foreign exchange earnings and Outgo : There is no Foreign exchange earnings of the company during the financial year. However, there was outflow of Rs. 12,65,481/- (USD 20677.80) during the year. DIRECTORS AND KEY MANAGERIAL PERSONNEL: At the 19th Annual General Meeting of the company held on 30/09/2014, Mr. Shubhakar Pathak, Mr. Ankur Sangal and Ms. Sonal have been appointed as Non-Executive Independent directors of the company for the term of 5 years with effect from 30th September, 2014 upto 29th September, 2019. The members also approved the reappointment of Mr. Deepak Goel and Mr. Praveen Kumar Goel as Whole Time Directors of the company. The company has received the declarations from all the Independent directors confirming that they meet the criteria of independence as provided under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. In accordance with the provisions of Companies Act, 2013 and Articles of Association of the Company, Mr. Amit Agarwal, Director of the Company retire by rotation at the ensuing Annual General meeting and being eligible offer himself for re-appointment. Mr. Biresh Kumar Dass was appointed as Company Secretary on 01/04/2014 and Mr. Vipin Kumar Goel was appointed as Chief Financial Officer of the company on 04/10/2014. a) 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 directors individually. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. b) Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. c) Meetings During the year twenty Board Meetings and one independent directors' meeting was held. The Details of which are given in Corporate Governance Report. The provisions of Companies Act, 2013 and listing agreement were adhered to while considering the time gap between two meetings. VIGIL MECHANSIM Pursuant to clause 49 of the Listing Agreement and as per Section 177 of the Companies Act, 2013 the company has established a vigil mechanism/Whistle Blower policy for the directors and employees to report genuine concerns or grievances about unethical behavior, actual or suspected fraud or violation of the company's Code of Conduct or Ethics Policy. The Vigil Mechanism Policy has been uploaded on the website of the Company at <http://www.neerajpaper.com/index.php?page=vigil_mechanism>. COMMITEES OF THE BOARD a) AUDIT COMMITTEE During the year, the company reconstituted the Audit committee comprising of the following directors: Mr. Ankur Sangal (Non- Executive, Independent Director) - Chairman Ms. Sonal (Non- Executive, Independent Director) - Member Mr. Amit Agarwal (Non-Executive Director) - Member All the recommendations made by Audit committee were accepted by the Board. b) NOMINATION AND REMUNERATION COMMITTEE During the year, the company reconstituted the Nomination and Remuneration Committee comprising of the following directors: Mr. Ankur Sangal (Non- Executive, Independent Director) - Chairman Ms. Sonal (Non- Executive, Independent Director) - Member Mr. Amit Agarwal (Non-Executive Director) - Member c) STAKEHOLDER RELATIONSHIP COMMITTEE: Pursuant to the provisions of Section 178 of the Companies Act, 2013, the Board has constituted Shareholder Grievance & Transfer Committee as Stakeholder Relationship Committee comprising of the following directors: Mr. Amit Agarwal - Chairman Mr. Deepak Goel - Member The committee specifically looks into the redressing of the Shareholder/ Investor complaints like non-receipt of share certificate after transfer, non-receipt of Annual Report, and to approve the share transfer. The Board has designated the company secretary of the company as the compliance officer. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013 There were no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review and hence the said provision is not applicable. However, detail of guarantees or investment which are outstanding as on 31/03/2015 is provided in the Notes to the Financial Statements. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE 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 an arm's length basis. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. All Related Party Transactions are placed before the Audit Committee and also the Board for approval. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website under the link at http://www.neerajpaper.com/index.php?page=code_conduc Particulars of contracts or arrangements or transactions in Form AOC-2 is attached as Annexure III. MANAGERIAL REMUNERATION Disclosure under Rule 5 of Companies (Appointment and Remuneration) Rules, 2014 is attached as Annexure IV. RISK MANAGEMENT POLICY In accordance with Companies Act, 2013 and Clause 49 of the listing agreement the Board members were informed about risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the company. 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, 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 the company has not identified any element of risk which may threaten the existence of the company. CORPORATE SOCIAL RESPONSIBILITY As per Companies Act, 2013, provisions of Corporate Social Responsibility is not applicable to the company. DIRECTORS' RESPONSIBILITY STATEMENT: In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: i) In the preparation of the annual accounts, the applicable accounting standards have been followed. ii) 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 at the end of the financial year and of the profit or loss of the Company for the year under review. iii) The directors have taken proper and sufficient care 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) The directors have prepared the annual accounts on a going concern basis. v) 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. vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively. PARTICULARS OF EMPLOYEES: During the year, there is no employee drawing remuneration in excess of the limits specified under Companies Act, 2013 and rules made thereunder . Internal Complaint Committee Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report are set out as separate Annexures, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement. ACKNOWLEGEMENT: Your Directors take this opportunity to convey their deep sense of gratitude for valuable assistance and Co Operation extended to the Company by all valued Customers, Bankers and various departments of government and local authorities. Your Directors also wish to place on record their sincere appreciation for the valued contribution, unstinted efforts and spirit of dedication shown by the employees, officers and the executives at all levels which contributed, in no small measure, to the progress and the high performance of the Company during the Year under review. On behalf o f the Board For NEERAJ PAPER MARKETING LIMITED Sd/- DEEPAK GOEL (CHAIRMAN) DATED: 14th August, 2015 PLACE: DELHI |