Sangal Papers Li Director Report

The Directors have pleasure in presenting their 35th Annual Report

with the Audited Accounts of the Company for the year ended 31st March,

2015.



FINANCIAL RESULT



PARTICULARS 31.03.2015 31.03.2014

(Amount in

Rs.) (Amount in

Rs.)



Turnover 950,642,374 1,016,428,644



Profit Before 55,191,902 66,677,633



Financial Charges and Depreciation



Financial Charges 24,488,152 28,774,180



Depreciation/Amortization 6,729,807 16,749,664



PROFIT BEFORE TAX 23,973,943 21,153,789



Current Tax 4,796,650 8,082,860



MAT Credit Entitlement (104,750) -



Deferred Tax Liability 4,856,000 (2,684,000)



IncomeTax (Related to Earlier Year) 249,908 57,812



PROFIT AFTER TAX 14,176,135 15,697,117



Balance brought Forward from last

Year 160,219,853 144,522,736



Balance Carried Forward to Balance

Sheet 174,395,988 160,219,853



OPERATIONAL REVIEW



The Company is moving fast to achieving its goal of maximization of

shareholders wealth and objective of the Company. The Company does care

to all stakeholder of the Company.



Sangal Papers Ltd. focus in India and outside India over last few years

has been to move closer to the ultimate consumers and position its

products in a way that consumers can connect with and aspire for with

this is in mind. The Company has maintained the world- wide standard in

its products and engaged in to give sharpness to the Company''s

marketing strategies.



Sangal Papers Ltd. has given its best performance in all subjects.

During the year under review the Company has achieved a turnover of Rs.

950,642,374 as against previous figure of Rs. 1,016,428,644 posting

approx 6.47% decline in sale.



During the year under review PAT ( profit after tax) were Rs.

14,176,135 as compared to previous year figure of Rs. 15,697,117.

However, the Profit aftertax has reduced by 9.69% in net profit

aftertax as compared to previous year. I A



SHARE CAPITAL



The paid up equity capital as on 31st March 2015 was Rs. 13,072,600.

During the year under review , the Company has not| increased their

capital. Further the Company has not issued shares with differential

voting rights nor granted stock options nor sweat equity.



DIVIDEND AND RESERVES DIVIDEND



Board of Directors of the Company has opted to plough back the profits

for future growth and do not recommend any Dividend for thefinancial

year ending on 31/03/2015.



RESERVES



The balance of Reserve & Surplus Account of the Company as on

31/03/2015 was Rs. 179,251,603/-.



FIXED DEPOSITS



The Company has not accepted any fixed deposits and accordingly no

amount was outstanding as on the date of the Balance Sheet.



PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:



The Company has not given any loans or guarantee covered under the

provisions of section 186 of the Companies Act, 2013.



INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:



The Company has an Internal Control System, commensurate with the size,

scale and complexity of its operations. The scope and authority of the

Internal Audit function is defined in the Internal Audit Manual. To

maintain its objectivity and independence, the Internal Audit function

reports to Chairman of the Audit Committee of the Board & to the

Chairman & Managing Director.



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. Based on the report of internal audit function, process

owners undertake corrective action in their respective areas and

thereby strengthen the controls. Significant audit observations and

recommendations along with corrective actions thereon are presented to

the Audit Committee of the Board.



CORPORATE SOCIAL RESPONSIBILITY



Since the Company has not fulfill the criteria in respect of

constitution of Corporate Social Responsibility as specified in the

Section 135 of the Companies Act 2013 read with Companies (Corporate

Social Responsibility) Rules, 2014, therefore no CSR Committee is

constituted.



CONSERVATION OF ENERGY



(a) Company ensures that the manufacturing operations are conducted in

the manner whereby optimum utilization and maximum possible savings of

energy is achieved.



(b) No specific investment has been made in reduction in energy

consumption.



(c) As the impact of measures taken for conservation and optimum

utilization of energy are not quantitative, its impact on cost cannot

be stated accurately.



(d) Since the Company does not fall under the list of Industries which

should furnish information on conservation of energy, the question of

furnishing the same does not arise.



TECHNOLOGY ABSORPTION



Company''s products are manufactured by using In- house know how and no

outside technology is being used for manufacturing activities.

Therefore no technology absorption is required. The Company constantly

strives for maintenance and improvement in quality of its products and

entire Research & Development activities are directed to achieve the

aforesaid goal.



IMPORTS/ EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO



A. IMPORTS



Import of raw materials during the year amounted to Rs. 43,323,426 /- (

previous Year Rs. 29,810,263 /-) and Capital Goods & Spares of Rs.

2,012,079 /- (Previous Year Rs. 1,517,414 /-).



B. EXPORTS



Exports were mainly to Gulf and Asian Countries . Exports during the

year increased to Rs. 38,910,936 /- from Rs. -. 28,186,945 /-in the

previous year.



C. EARNINGS AND OUTGO



Details are provided under the Point 23-26 of "Notes to Financial

Statements" for the financial year ended as on 31st March 2015.



INDUSTRIAL RELATIONS



During the year under review, your Company enjoyed cordial relationship

with workers and employees at all levels.



DIRECTORS



Director Mr. Vinayak Sangal (DIN NO. 06833351) retire by rotation and,

being eligible, offer himself for re- appointment. The Board of

Directors recommend Mr. Vinayak Sangal for re- appointment.



Mr. Prem Sethi (DIN NO. 07146425) & Mrs. Geeta Gupta (DIN NO. 00095939)

were appointed as additional independent director w.e.f 4th March 2015.

The Board now recommends the appointment of Mr. Prem Sethi & Mrs. Geeta

Gupta as independent directors under section 149 of the Companies Act,

2013 and clause 49 of the listing agreement in the ensuing Annual

General Meeting to hold office for three consecutive years i.e. up to

the conclusion of the Annual General Meeting of the Company held in the

calendar year 2018.



All independent directors have given declarations that they meet

criteria of independence as laid down under section 149 (6) of the

Companies Act, 2013 and clause 49 of the Listing Agreement.



BOARD EVALUATION



Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of

the Listing Agreement, the Board has carried out an evaluation of its

own performance, the directors individually as well as the evaluation

of the Working of its Audit, Appointment & Remuneration Committees. The

manner in which the evaluation has been carried out has been explained

in the Corporate Governance Report. ,



REMUNERATION POLICY



The Board has, on the recommendation of the Appointment & Remuneration

Committee framed a policy for selection and appointment of Directors,

Senior Management and their remuneration. The remuneration Policy is

stated in Corporate Governance Report.



MEETINGS



Meetings During the year 12 (Twelve) Board Meetings and 4 (Four) Audit

Committee Meetings were convened and held. The details of which given

in the Corporate Governance Report. The intervening gap between the

Meetings was within the period prescribed underthe Companies Act, 2013.



DIRECTORS'' RESPONSIBILITY STATEMENT



Pursuant to Section 134(5) of the Companies Act 2013, your Directors

confirm that:



(a) In the preparation of the annual accounts, the applicable

accounting standards have been followed with no material departures;



(b) They have 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 review of the state of affairs of

the Company at the end of the financial year and of the prof it of the

Company for the same period;



(c) They 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

preventingand detectingfraud and other irregularities;



(d) They have prepared the annual accounts on a going concern basis;



(e) They have laid down internal financial controls in the Company that

are adequate and are operating effectively; and . ferff) They have

devised proper systems to ensure compliance with the provisions of all

applicable laws and that these are adequate



RELATED PARTY TRANSACTIONS



The related party transactions have already been disclosed in the

financial statements. No transaction of material nature has been

entered into by the Company during the year which may have potential

conflict with the interest of the Company. All related party

transactions that were entered into during the financial year were on

arm''s length basis and were in the ordinary course of the business.

There are no materially significant related party transactions made by

the company with promoters, key managerial personnel or other

designated persons which may have potential conflict with interest of

the Company at large.



SUBSIDIARY COMPANIES



The Company does not have any subsidiary.



CODEOFCONDUCT



The Board of Directors has approved a Code of Conduct which is

applicable to the members of the Board and all employees in the course

of day to day business operations of the company. The Company believes

in " Zero Tolerance" against bribery, corruption and unethical

dealings/behaviours of any form and the Board has laid down the

directives to counter such acts. The code laid down by the Board is

known as " Code of Business Conduct" which forms and Appendix to the

Code.



The Code lays down the standard procedure of business conduct which is

expected to be followed by the Directors and the designated employees

in their business dealings and in particular on matters relating to

integrity in the work place, in business practices and in dealing with

stakeholders. The Code gives guidance through examples on the expected

behavior from an employee in a given situation and the reporting

structure.



All the Board members and the Senior Management personnel have

confirmed compliances with the code. All management Staff were given

appropriate training in this regard.



VIGIL MECHANISM/ WHISTLE BLOWER POLICY



Pursuant to Section 177(9) of the Companies Act, 2013 and Clause 49 of

the Listing Agreement, the Company has formulated a Whistle Blower

Policy to establish a vigil mechanism for directors and employees of

the Company. The purpose and objective of this Policy is to provide a

framework to promote responsible and secure whistle blowing. It

protects the employees wishing to raise a concern about serious

irregularities within the Company. The details of the Whistle Blower

Policy are explained in the Corporate Governance Report and also posted

on the website of the Company.



AUDITORS



M/s Shaim & Co. (Chartered Accountants), Muzaffarnagar (Registration

No. 000030C), have been appointed as Statutory Auditors of the Company

for a period 3 years at the last annual general meeting held on 30th

September, 2014 subject to ratification of their appointment by the

members at every general meeting. The shareholders at the ensuing

annual general meeting will consider ratification of the appointment of

the Statutory Auditors. As required under Clause 41 of the Listing

Agreement, the Auditors have confirmed that they hold a valid

certificate issued by the Peer Review Board of the Institute of

Chartered Accountants of India.



COST AUDIT



The Turnover of the Company during the financial year 2014-15 are not

covered under cost audit and therefore, pursuant to Section 148 of the

Companies Act, 2013 read with the Companies ( Cost Records and Audit)

Amendment Rules, 2014, the Company is not required to appoint cost

auditorfor financial year 2015-16.



SECRETARIAL AUDIT



Pursuant to provision of Section 204 of the Companies Act, 2013 and The

Companies (Appointment and Remuneration of Mangerial Personnel) Rules,

2014 the Company has appointed D. K Gupta & Co., Practicing Company

Secretary to undertake the Secretarial Audit of the Company. The

Secretarial Audit Report is annexed herewith as " Annexure A".



AUDITOR''S REPORT/SECRETARIAL AUDIT REPORT



The auditors have given clean report. There is no observation/adverse

remark in the Auditors'' Report.



As required under section 204 (1) of the Companies Act, 2013, the

Company has obtained a Secretarial Audit Report.



EXTRACT OF ANNUAL RETURN



The details forming part of the extract of the Annual Return in form

MGT -9 is annexed herewith as" Annexure C". at W



BUSINESS RISK MANAGEMENT



Pursuant to the requirement of Clause 49 of the Listing Agreement, the

Company has constituted a Risk Management Committee. The details of the

Committee and its terms of reference are set out in the Corporate

Governance Report forming part of the Board''s Report.



On the recommendation of the Risk Management Committee, the Board has

adopted Risk management Policy, which outlines the programme

implemented by the Company to ensure appropriate risk management within

its system and culture. The Risk Management Policy is also posted on

the website of the Company. The Company''s risk management programme

comprises of a series of processes, structures and guidelines which

assist the Company to identify, assess, monitor and manage its business

risks, including material changes to its risk profile. To achieve this,

the Company has clearly defined the responsibility and authority of the

Company''s Board of Directors and of the Risk Management Committee to

oversee and manage the risk management programme while conferring

responsibility and authority on the Company''s senior management to

develop and maintain the risk management programme in light of the day

to day needs of the Company. Regular communication and review of risk

management practices provide the Company with important checks and

balances to ensure the efficacy of its risk management programme.



REPORTON FACTORY ACCIDENT



On 1st August 2014 at 6.00 A.M an Accident took place in our Factory

Site Village - Bhainsa, 22 Km Stone, Meerut-Mawana Road, Meerut due to

burst in Digestor. Accident caused substantial damage to the Building,

Plant & Machinery as well as Stock and claimed two lifes. As per our

estimated the total damage caused to the factory may be as much as Rs.

142 Lakhs. It was an unexpected mishap, but fortunately it is fully

covered by insurance for the Building, Plant & Machinery, Stock damage

and human loss. We have accordingly informed the Insurance company and

submitted a formal claim. The Managing Director of the Company has

announced all assistance to the families of the victims immediately.



PARTICULARS OF EMPLOYEES



The provisions of Rule 5 (2) & (3) of the Companies (Appointment &

Remuneration of Managerial Personnel) Rules, 2014 requiring particulars

of the employees in receipt of remuneration in excess of Rs. 60 Lacs

per year to be disclosed in the Report of Board of Directors are not

applicable to the Company as none of the employees was in receipt of

remuneration in excess of Rs. 60 lacs during the financial year

2014-15.



The information required under section 197 (12) of the Companies Act,

2013 read with Rules 5 of the Companies (Appointment & Remuneration of

Managerial Personnel) Rules, 2014 is given in the Statement annexed

herewith as "Annexure-D".



CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT



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 the auditors of the Company

regarding Compliance with the requirements of Corporate Governance as

stipulated in Clause 49 of the Listing Agreement.



ACKNOWLEDGEMENTS:



Your Company and its Directors wish to extend their sincerest thanks to

the Members of the Company, Bankers, State Government, Local Bodies,

Customers, Suppliers, Executives, Staff and workers at all levels for

their continuous co-operation and assistance.



Place: Mawana By Order of the Board of Directors



Date : 25/05/2015 FOR Sangal Papers Ltd.



CIN :L21015UP1980PLC005138



Himanshu Sangal



Chairman & Managing Director



Reg. Office: 22 KM, Meerut - Mawana Road, (DIN: 00091324)



Mawana - 250 401, Distt. Meerut (U.P.)



PH-01233-271515, 274324 ,



& E- Mail: [email protected] Bfi