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Star Paper Mills

BSE: 516022|NSE: STARPAPER|ISIN: INE733A01018|SECTOR: Paper
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Directors Report Year End : Mar '15    « Mar 14
Dear Shareholders,
 
 The Directors of your company have immense pleasure in presenting
 Directors'' Report together with audited financial results of the
 company for the year ended 31st March 2015.
 
 1. FINANCIAL SUMMARY
 
 The financial results of the company for the year ended 31st March,
 2015 are summarised as under:
 
                                                            (Rs. in Cr.)
 
 Particulars                          Year ended         Year ended
                                      31st March, 2015   31st March, 2014
 
 Profit before interest and 
 depreciation                              16.77             (6.97)
 
 Interest and finance charges               4.40              4.57
 
 Depreciation                               4.86             11.08
 
 Profit before Exceptional Items            7.51            (22.62)
 
 Exceptional & non-recurring items             -             (3.49)
 
 Profit before tax                          7.51            (26.10)
 
 Provision for Income Tax                  (8.03)            (4.02)
 
 Profit after taxation                     15.54            (22.08)
 
 Balance brought forward                  (42.04)           (19.96)
 
 A valuable for appropriation:            (26.50)           (42.04)
 
 - Transfer to General Reserve                 -                 -
 
 - Proposed dividend                           -                 -
 
 - Tax on proposed dividend                    -                 -
 
 Balance carried to the Balance Sheet     (26.50)           (42.04)
 
 AUDITED FINANCIAL RESULTS
 
 2. DIVIDEND
 
 With a view to repair past losses which resulted in erosion of reserves
 and conservation of resources for future betterment, the Board of
 Directors do not recommend any dividend for the year.
 
 3. STATE OF COMPANY''S AFFAIRS Financial Year 2014-15
 
 In-spite of various odds, your company''s efforts to reduce costs and
 improve margins through product-mix optimization and introduction of
 new grades bore fruits.
 
 Consequently, your company has turned in better financial performance
 during the year.
 
 Your company reported a post tax Profit of 15.54 Crores vis-a-vis a
 loss of Rs. 22.08 Crores for FY 2013-14.
 
 Expectations for FY 2015-16
 
 There is still surplus supply particularly in writing and printing
 grades. There has been increase in Power and Coal cost. Your company is
 working on further cost- rationalization in order to maintain its
 financial performance.
 
 4. ANNUAL- RETURN EXTRACTS
 
 Extracts of the Annual Return as provided in Section 92(3) of the
 Companies Act, 2013 in MGT-9 is attached as Annexure-I
 
 5. BOARD MEETINGS/AUDIT COMMITTEE
 
 a) During the year 2014-15, five (5) Board meetings were held on
 19.05.2014, 13.08.2014, 27.09.2014, 10.11.2014, 11.02.2015.
 
 b) Audit Committee-
 
 The Company has the Audit Committee of the Board pursuant to Section
 177 of the Companies Act, 2013 and its terms of reference are in
 conformity with Clause 49 of the listing agreement. The composition of
 the Audit Committee is given in attached Corporate Governance Report.
 
 6. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
 
 Pursuant to Section 177 of the Companies Act, 2013, the company has
 established a ''Vigil Mechanism'' for directors and employees to report
 their genuine concerns to the company. The company oversees this ''Vigil
 Mechanism'' through the Audit Committee of the Board.
 
 7. ENVIRONMENT, POLLUTION CONTROL AND SAFETY
 
 Your company is a committed corporate entity which emphasizes on
 providing healthy environment and safe working conditions. Accredited
 with ISO 14001: 2004, ISO 9001 : 2008 & ISO 18001 :2007, the company
 has integrated quality and environment management systems which
 harmonize operations with environmental preservation.  Necessary
 environmental clearances from Government authorities are in place.
 
 Your company has yet again won Gold Award for environmental excellence
 in Paper Industry presented by Greentech Foundation reflecting
 commitment of the company to preserve environment and providing safe
 work conditions.
 
 8. SOCIAL FARM FORESTRY
 
 The company has been promoting and encouraging tree plantation program
 under social farm forestry. This also helps in enhancing rural incomes
 and facilitate sustain availability of raw material to the company. The
 scheme involves supply of high quality clones/seedlings apart from
 providing technical assistance to the farmers.
 
 The program also maintained its momentum during the year too and your
 company further stepped-up propagation and distribution of clonal
 plants and the area coverage.
 
 9. FIXED DEPOSITS
 
 The company has not invited any fixed deposits during the year and as
 such there has been no default in repayment of deposit or payment of
 interest thereon during the year.  There were no outstanding fixed
 deposits as on 31st March, 2015. (Rs. Nil as on 31st March, 2014).
 
 The company is in compliance with provisions of the Companies Act, 2013
 and rules made thereunder in respect of deposits.
 
 10. INTERNAL CONTROLS
 
 The company has adequate internal control system in place on the basis
 of which financial accounting is done and periodically financial
 statements are prepared. Such Internal control systems are adequate and
 operating effectively.
 
 11. REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR)
 
 As the company has been incurring losses until last year, it was not
 obligatory upon the company to form a CSR committee pursuant to Section
 135 of the Companies Act, 2013 and the Rules made there under.
 
 12. DIRECTORS
 
 i) Mr. K.N Bhandari (DIN-00191219) appointed as an Independent Director
 w.e.f 27th Sept., 2014 has resigned from directorship w.e.f the close
 of working hours on 31st March, 2015 due to some other preoccupation
 towards pursuing other interests and certain other commitments.
 
 ii) Ms. Savita Laxmipathy Acharya (DIN-07038198), {a woman director
 under Clause 49} has been appointed as additional director
 (Independent) of the company w.e.f. 31st March, 2015.
 
 iii) Sh. S.V Goenka (DIN-00030375) is retiring by rotation at the
 ensuing Annual General Meeting and being eligible, offer himself for
 re-appointment
 
 The independent directors have given declarations that they meet the
 criteria of independence under section 149(6) of the Companies Act,
 2013.  The company''s familiarization program for Independent Directors
 are posted on website of the company and can be accessed at
 http://www.starpapers.com/familarisation_prog.pdf
 
 13. NOMINATION AND REMUNERATION COMMITTEE/POLICY
 
 The Board of Directors has constituted a ''Nomination & Remuneration
 Committee'' which follows the company''s policy on directors'' appointment
 and remuneration including criteria for determining qualification,
 independence of a director and other matters provided under section 178
 (3) of the Companies Act, 2013.
 
 The gist of company''s policy on nomination and remuneration is as
 under:
 
 The Committee shall consider ethical standards of integrity,
 qualification, expertise and experience for appointment of
 Directors/KMP etc. and recommend to the Board of Directors. Directors/
 KMP etc shall be appointed as per the procedure laid down in applicable
 laws.
 
 The Committee will recommend the remuneration to be paid to
 Directors/KMP etc requiring Committee approval as per statutory
 provisions. The level and composition of remuneration so determined by
 the Committee shall be reasonable and sufficient to attract, retain and
 motivate the appointee(s).
 
 14. LOAN, GUARANTEE, INVESTMENTS ETC.
 
 The company has not given any loan or guarantee or provided security in
 connection with a loan to any other body corporate during the year.
 
 15. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND
 FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 Particulars regarding energy conservation, technology absorption and
 foreign exchange earnings/outgo pursuant to Section 134(3)(m) of the
 Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are
 furnished as Annexure-II to this Report.
 
 16. PARTICULARS OF EMPLOYEES AND REMUNERATION
 
 Information in accordance with the provisions of Section 134(3)(q) and
 Section 197(12) of the Companies Act, 2013 read with the Companies
 (Appointment and Remuneration of Managerial Personnel) Rules, 2014
 regarding employees'' remuneration are given hereunder:
 
 i) Name of the employee who is in receipt of remuneration of Rs. 60
 lacs or more for FY 2014-15:
 
 Name &          Remuneration  Nature of   Qualification &  Date of
 Designation     recd.-(lacs)  employment  experience       commencement
                                                            of employment
 
 Mr. Madhukar        146.11    Contractual  B. Sc.,         01/07/2001
 Mishra,                                    DMS (Mgt.)
 Managing                                   38 years
 Director
 
 Name           Age      Last employment        % of equity   Whether
                         hels                   shares held   relative to
                                                              Director
 
 Mr Madhukar
 Mishra         58 Y     Sr. VP(Corporate           Nil            No 
                         Corporate Planning)
                         -Dail Consultants 
                         Ltd.
 
 ii) Disclosure in respect of Remuneration etc.-
 
 a) Ratio of remuneration of each director to the median remuneration of
 employees
 
 Director                     Director 
                              remuneration   Median
                                             remuneration   Ratio (DR/MR)
                             (DR) - Rs.     (MR) of
                                             employee - Rs.
 
 MR. G.P. GOENKA                   50,000        2,32,270        0.21
 
 MR. S.V. GOENKA                   10,000        2,32,270        0.04
 
 MR. SHIROMANI SHARMA            1,30,000        2,32,270        0.56
 
 MR. C.M. VASUDEV                  70,000        2,32,270        0.30
 
 MR. M.P. PINTO                    60,000        2,32,270        0.26
 
 MR. K.N. BHANDARI                 80,000        2,32,270        0.34
 
 MR. MADHUKAR MISHRA          1,46,11,407        2,32,270       62.91
 
 b) % increase in remuneration of each director, CFO, CEO, CS in the
 financial year 2014-15
 
 Official name                    Year 2014-15/ 
                                  Remuneration-Rs.    % increase in
                                                       remuneration
 
 Directors                        Directors are
                                  receiving only 
                                  sitting fees for
                                  attending meetings.  
 
                                  There was no
                                  increase in
                                  sitting fee over 
                                  the year.
 
 Managing Director                  1,46,11,407/-           11%
 
 Chief Financial Officer              23,36,820/-            6%
 
 Company Secretary                     8,74,392/-           11%
 
 c) % increase in median remuneration of employees in the financial year
 2014-15 was 6.24%.
 
 d) Number of permanent employees on the rolls of the company as on
 31.03.15 was 767.
 
 e) Average increase in remuneration inter-alia depends upon the
 inflation, individual''s performance, company policy, human resource
 demand-supply position, negotiations with trade unions, company
 performance etc.
 
 f) Considering performance of the company, remuneration of KMPs i.e
 Managing Director, CFO and CS was at par with the performance.
 
 g) A number of parameters of the company as on 31.03.2015 and
 31.03.2014 as under:
 
 Parameters                      As on 31.03.2015      As on 31.03.2014
 
 Market capitalization-Rs.       30,35,82,407          14,04,75,150
 
 Closing price/share-Rs.         19.45                 9.00
 
 Price/ earnings ratio           4.04                  Nil
 
 % decrease in market 
 quotation of the                67% decrease in price 85% decrease in 
                                                       price
 share in comparison to rate 
 at which last public offer 
 was made (Rs. 60/per share)
 
 h) Average percentage increase in salaries of employees vis-a-vis
 managerial personnel- Average percentage increase in salaries of
 employees was 8.66% vis- a-vis 11% increase in salary of managerial
 personnel for FY 2014-15.
 
 i) No director is getting any variable component of remuneration except
 performance pay of the Managing Directors is decided by the Board of
 Directors for every year based performance review of that year subject
 to ceiling of Rs. 30,50,000/- for FY 2014-15.
 
 j) Ratio of remuneration of highest paid director to that of employees
 receiving remuneration in excess of that of highest paid director-N.A
 
 17. PERFORMANCE EVALUATION
 
 The company has in place a Policy on performance evaluation of
 Independent Directors, Board, Committees and individual Directors. The
 Board of Directors evaluates its own performance in terms of operations
 of the company, financial results etc. The performance of Committee(s)
 is evaluated by the Board based on effectiveness of committee, its
 functioning and decisions etc. The Board also reviews the performance
 of individual director(s) based on the contribution of the individual
 director to the Board/ committee meetings, participation in
 discussions, inputs given in the meeting.
 
 18. HUMAN RESOURCES AND WELFARE
 
 Your company has a structured approach to manage its human resources in
 line with changing needs of the organisation. Industrial relations
 remained harmonious during the year.
 
 Your Directors further state that during the year under review, there
 was no case reported under the Sexual Harassment of woman at work place
 (Prevention, Prohibition and Redressal) Act, 2013
 
 19. DIRECTORS'' RESPONSIBILITY STATEMENT
 
 As required under the provisions of Section 134(3) (c) Directors
 Responsibility Statement on preparation and presentation of these
 accounts is as per Annexure-III to this Report.
 
 20. CORPORATE GOVERNANCE
 
 A separate report on corporate governance, along with a certificate
 from the statutory auditors confirming the compliance with corporate
 governance requirements has been annexed as Annexure-IV to Directors''
 Report.
 
 21. AUDITORS
 
 M/s Lodha & Co. Chartered Accountants, retires at the ensuing Annual
 General Meeting. They have expressed their willingness to continue in
 office, if appointed and have furnished the requisite certificate of
 their eligibility pursuant to the provisions of the Companies Act,
 2013.
 
 22. AUDITORS'' REPORT
 
 I) Statutory Audit:
 
 The qualification of the Auditors in their report read with relevant
 note on the financial statements as mentioned below is
 self-explanatory:
 
 -Excess managerial remuneration amounting to Rs. 21.57 lacs payable to
 managerial personnel for FY 2011-12 is subject to approval of Central
 Government.- Note No. 23.1 of Statement of Profit & Loss.
 
 ii) Secretarial Audit:
 
 M/s D. Dutt & Co., company secretary in practice, secretarial auditor
 of the company for FY 2014-15 has competed secretarial audit for FY
 2014-15. A secretarial audit report is attached as Annexure-V.
 
 23. TRANSACTIONS 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. During the year, the
 company had not entered into any contract / arrangement / transaction
 with related parties which could be considered material. Information
 pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the
 Companies (Accounts) Rules, 2014 are given in Annexure VI in Form AOC-2
 and the same forms part of this report.
 
 24. RISK MANAGEMENT COMMITTEE
 
 Your Directors have enlarged mandate of Audit Committee to include
 responsibility to assist the Board in (i) overseeing and approving the
 company''s enterprise wide risk management framework; and (ii) periodic
 appraisal to assess any change needed in the context of changing
 business environment
 
 25. LISTING ON STOCK EXCHANGES
 
 Your company''s equity shares are listed on National Stock Exchange of
 India Ltd. (NSE) and The Stock Exchange, Mumbai (BSE). The company has
 paid the listing fees to the stock exchanges for the financial year
 2014-15.
 
 26. ACKNOWLEDGEMENTS
 
 Your Directors are pleased to place on record their gratitude for the
 excellent support and efforts put in by the employees, bankers,
 investors, dealers, suppliers and Government Departments.
 
                                        For and on behalf of the Board
 
 Place : New Delhi                                        G. P. Goenka
 
 Date : 20th May , 2015                                       Chairman
Source : Dion Global Solutions Limited
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