DIRECTORS
To The Members,
1. The Directors wish to present the 79th Annual Report together with
Audited Accounts of the Company for the year ended 31st March, 2014.
2. OPERATIONAL RESULTS :
The operational results for the year under review are as follows:
|
FY 2013-14 |
FY 2012-13 |
% Change |
I PRODUCTION (Qty.in MT) |
|
|
|
Writing & Printing Paper |
38052 |
40960 |
-7.10 |
Newsprint |
38902 |
45450 |
-14.41 |
TOTAL |
76954 |
86410 |
-10.94 |
Sugar |
24675 |
17179 |
43.63 |
II SALES (Qty. in MT) |
|
|
|
Writing & Printing Paper |
35515 |
45927 |
-22.67 |
Newsprint |
35316 |
47208 |
-25.19 |
TOTAL |
70831 |
93135 |
-23.95 |
Sugar |
24354 |
17797 |
36.84 |
III TURNOVER (Rs. in Lakhs) |
|
|
|
Writing & Printing Paper |
18581 |
20772 |
-10.55 |
Newsprint |
12990 |
15468 |
-16.02 |
TOTAL |
31571 |
36240 |
-12.88 |
Sugar |
7306 |
5105 |
43.11 |
Molasses |
828 |
353 |
134.56 |
TOTAL TURNOVER |
39705 |
41698 |
-4.78 |
IV OPERATING PROFIT /(LOSS) |
|
|
|
(Rs. in lakhs) (profit before interest and depreciation) |
(3516) |
(3770) |
|
V CASH PROFIT/LOSS |
|
|
|
(Rs.in lakhs) (profit after interest & before depreciation ) |
(6768) |
(6635) |
|
V NET PROFIT (Rs. in Lakhs) |
(7816) |
(7689) |
|
Production Performance:
It may be noticed from the above that the production of WPP has decreased by 7.10% from
the level 40960 MT to 38052 MT i.e. down by 2908 MT. The quantity wise sale of WPP has
also been decreased by 22.67 % from the level 45927 MT to 35515 MT i.e. down by 10412 MT.
The production of NP has been decreased by 14.41 % from the level 45450 MT to 38902 MT
i.e. up by 6548 MT. The quantity wise sale of NP has also been decreased by 25.19% from
the level 47208 MT to 35316 MT i.e. down by 11892 MT. The production of paper was
decreased by 10.94% from the level of 86410 MT in FY 2013 to 76954 MT in FY 2014 i.e.,
down by 9456 MT. Reduction in sale of paper in quantity from the level of 93135 MT to
70831 MT down by 23.95% i.e less by 22304 MT and the turnover from Rs 36240 lacs to Rs
31571 lacs less by Rs.4669 lacs.
The production of sugar has gone up by 43.63% due to increase in cane crushing activity
from the level of 182414.67 MT (recovery of 9.28 %) in FY 2013 to 253854.34 MT (recovery
of 9.28 %) in FY 2014. There is an increase in sale of sugar by 36.84 %. The increase in
turnover by 49% due to increase in quantity wise sales and there is a decrease in net
sales realisation of sugar from Rs 29214/MT to Rs.29034 /MT i.e. down by Rs.180/MT. The
turnover from Sugar Division was Rs.81.34 Crore compared to Rs. 54.58 Crore in the
previous year i.e. up by 49 %. The total turnover of 2013-14 has been decreased by Rs
19.93 Crores from the level Rs 416.98 crores to Rs 397.05 crores i.e. down by 4.78 %.
The Company has incurred operating loss, Cash loss and Net loss of Rs. 35.16 Crores,
Rs.67.68 Crores and Rs.78.16 Crores compared to previous year losses of Rs. 37.70 Crores,
Rs.66.35 Crores and Rs.76.89 Crores respectively.
The accumulated losses at the end of 31.03.2014 stood at Rs.425.94 Crores with that
entire net worth of Rs 287.09. crores (including GOK loan of Rs 101.02 crores converted in
to equity in 2011-12 and infusion fresh equity of Rs 5.00 Crores in 2011-12, Rs.20 crores
in 2012-13 & Rs.40 crores in 2013-14 and Conversion of Guarantee Commission payable
upto 31.03.2013 amounting to Rs.2.18 Crores in 2012-13) has been eroded. The company has
been registered as sick company as case no 601/2012 with BIFR, the revival scheme has been
submitted by M/s Deloitte and same with Board views sent to Government for its perusal and
advice.
STATUS OF BIFR:
The company has been registered as sick company as case No. 601/2012 with BIFR. The
draft revival scheme prepared by M/s. Deloitte Touche Tohmatsu India Pvt. Limited have
been submitted to Government of Karnataka being the promoter of the Company for their
review and comments. The same has also been submitted to the State Bank of Mysore,
Ambedkar Veedhi Branch, Bengaluru, the Operating Agency appointed by BIFR for their review
and comments.
3. MANAGEMENT DISCUSSION & ANALYSIS:
Segmentwise analysis and operational performance of each of the business segments have
been comprehensively covered in the Management Discussion & Analysis which forms part
of this Directors Report.
4. CASH FLOW ANALYSIS:
In conformity with the provisions of the Listing Agreement, the cash flow statement for
the year ended 31st March, 2014 is included in the annual accounts.
5. CAPTIVE FORESTRY:
The Forest Wing has supplied 201195 M.T. of pulpwood by harvesting about 2486 hectares
of captive plantations during 2013-14.
The lease of forest land will be expiring in the year 2020-21 wherein the plantation
crop to be raised in 2014-15 would be the last rotation of crop and till then the
management plan has been approved by the Ministry of Environment and Forests, Government
of India. The Management plan for a period from 2015-16 to 2020-21 need to be submitted to
Govt. of India for approval.
The lease rentals from 1991-92 to 2000-2001 and from 2001-02 to 2009-10 are settled
with the Government and from 2010-11 to 2013-14 the lease rent is yet to be paid, which is
calculated as Rs.786 lakhs.
Totally 3700.30 ha. of harvested plantation areas were regenerated by
replanting/coppicing with species like Acacia hybrid (1199.95 ha.), Eucalyptus pellita
(257.65 ha.) and Eucalyptus camaldulensis (2242.70 ha.)
The Farm Forestry programme is continued by selling about 7.00 lakhs seedlings and by
entering in to a buy-back agreement with farmers on a plain paper wherever they have
availed seedlings in the programme. The Gate purchase of pulpwood is being continued and
totally 2209.540 MT was procured @ Rs.3,683/- per MT.
The programme of raising large scale clonal plants of Eucalyptus species in dry-zone
nurseries has been continued which will double the present yield from average 30 MT/ha. to
over 60 MT/ ha. Where about 1/3 of the captive plantations are located in dry-zone. The
achievement with clonal plantations of Acacia hybrid in wet zone is already with an
average yield on 100 M.T. /Ha.
The average weighted cost of Acacia and Eucalyptus pulpwood obtained from captive
plantations works out to Rs.2,127/- per tonne as against Rs.5,288/- per tonne paid to M/s
KFDC and M/s KSFIC. Thus Rs.6359.78 lakhs plus tax were saved by obtaining 201195 M.T.
pulpwood from captive plantations and also which has minimized the consumption of
chemicals and maximized the yield of pulp to fabricate the paper. During 2013-14, 105472
M.T. of Acacia wood was supplied from captive plantations which has helped in minimizing
the consumption of chemicals worth over Rs.62.55 lakhs. Hence captive forestry was
responsible for saving a total sum of Rs.6422.33 lakhs during 2013-14.
6. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE OUTGO:
Information under Section 134 of the Companies Act, 2013, read with Rule 2 of the
Companies (Disclosure of particulars in the report of Board of Directors) Rules, 1988 are
furnished at ANNEXURE - I, which form part of this report.
7. INDUSTRIAL RELATIONS:
The overall industrial relations were cordial during the year under review.
8. DIRECTORS :
Sri S Parameswarappa, IFS(Retd.), Director retires by rotation. The said vacancy will
be filled up soon as per the Companies Act 2013.
Sri. M Lakshminarayana, IAS, Director retires by rotation. The said vacancy will be
filled up soon as per the Companies Act 2013.
9. Apart from the above, the following changes amongst Directors have also taken
place during the year under review :
Smt. K Ratna Prabha, IAS: Pursuant to the powers conferred under the Articles of
Association of the Company, the Government of Karnataka nominated Smt. K Ratna Prabha,
IAS, Additional Chief Secretary to GOK, Commerce & Industries Department, GoK as
Director in place of Sri M. N Vidyashankar, IAS & subsequently Chairperson in place of
Sri. Umesh, vide Govt. Notification No.CI 49 CMI 2014(8) dated 22.03.2014 &
CI-61-CMI-2014 dated 10.06.2014 respectively.
Sri. Naveen Raj Singh, IAS : Sri. Naveen Raj Singh, IAS was nominated as Managing
Director of the Company by the Government of Karnataka in exercise of the powers conferred
under Articles of Association of the Company in place of Sri. M Maheshwar Rao, IAS vide
Govt. Notification No.DPAR 749 sas 2014 dated 3.9.2014. He assumed charge on 08th
September, 2014 as Managing Director.
10. DIRECTORS RESPONSIBILITY STATEMENT : Pursuant to the requirement under
Section-134 of the Companies Act, 2013, with respect to Directors Responsibility
Statement, it is hereby confirmed that :
The applicable accounting standards have been followed scrupulously, along with proper
explanation relating to material departures, if any;
a) The selected accounting policies were applied consistently, and judgements and
estimates that are reasonable and prudent were made, so as to give a true and fair view of
the state of financial affairs of the Company at the end of the financial year;
b) 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; c) The annual accounts were prepared for the financial year ended 31st
March, 2014 on a going concern basis.
11. AUDITORS :
a) As per Section 140 of the Companies Act, 2013, the Government of India, Ministry of
Corporate Affairs, appointed M/s. M N S & Co., Chartered Accountants, Bengaluru, as
Statutory Auditors of the Company for the year ended 31.03.2014.
b) M/s. K.P.R. & Associates, Cost Accountants, Bengaluru, were appointed as Cost
Auditors of the Company for the year 2013-14 by the Board, and the approval to this effect
has also been received from the Government of India.
12. PARTICULARS OF EMPLOYEES :
None of the employees of the Company have drawn salary of Rs.24 lakhs or more per
annum/Rs.2 lakhs or more per month during the year. Therefore, the particulars of
employees as required under Section 134 of the Companies Act, 2013, are not furnished.
13. CORPORATE GOVERNANCE :
Pursuant to Clause 49 of the Listing Agreement with the Stock Exchange, a report on
Corporate Governance together with Management Discussion & Analysis Report is enclosed
herewith, which forms part of the Directors Report. A Certificate from the Auditor
regarding compliance of Corporate Governance, as stipulated by clause 49 of the Listing
Agreement, is attached to this report.
14. COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA :
The comments by the Comptroller and Auditor General of India on the Accounts for the
year ended 31.03.2014 are attached to the report as ANNEXURE - II.
15. ACKNOWLEDGEMENT :
Your Directors are pleased to acknowledge the dedicated efforts of all the employees
and place on record their appreciation of the valuable contribution made by them during
the year 2013-2014. Your Directors also thank the sugarcane growers for the supply of
sugarcane. Your Directors place on record their appreciation for the assistance, support
and guidance extended to the Company by the Government of Karnataka through the
Departments of Commerce and Industries, Finance, Forest, Environment & Ecology, KPTCL,
MESCOM, Directorate of Sugar, and by the Statutory Bodies and Financial Institutions,
Karnataka State Pollution Control board & IFCI and Banks. Your Directors also thank
the Government of India, Ministry of Corporate Affairs and its various departments,
Statutory Auditors, Comptroller of Accounts & Audit, Registrar for Newspapers,
Ministry of Railways, Department of Coal, etc., for their continued support to the
Company.
for and on behalf of the Board
BENGALURU |
|
|
DATE: 18.11.2014 |
(NAVEEN RAJ SINGH) |
(C. SHIVASHANKAR) |
|
MANAGING DIRECTOR |
DIRECTOR |
ANNEXURE - I
TO DIRECTORS REPORT
ADDITIONAL INFORMATION AS REQUIRED UNDER COMPANIES (DISCLOSURE OF PARTICULARS IN THE
REPORT OF BOARD OF DIRECTORS) RULES, 1988
A. ENERGY CONSERVATION :
Energy Conservation Measures:
B. EXPENDITURE ON R&D DURING 2013-2014 - Rs 67.13 lakhs.
C. EXPENDITURE AS A % TO THE TOTAL TURNOVER : 0.16%
FORM A
TOTAL ENERGY CONSUMPTION AND ENERGY CONSUMPTION PER UNIT OF PRODUCTION
|
2011-12 |
2012-13 |
2013-14 |
APOWER AND FUEL CONSUMPTION |
|
|
|
I ELECTRICITY |
|
|
|
a) Purchased Units(Lakhs.KWH) |
380.92 |
578.89 |
601.24 |
Total Amount(Rs.Lakhs) |
2413.29 |
3527.09 |
3782.43 |
Cost Per Unit-Rs. |
6.34 |
6.09 |
6.29 |
b) Captive Generation (Lakhs KWH) (Net of Export) |
|
|
|
Through Steam Turbine (lakhs KWH) |
1335.66 |
1166.38 |
1012.19 |
Cost per Unit-Rs. |
4.87 |
5.33 |
5.74 |
II COAL |
|
|
|
Quantity in (MT) |
228531 |
216475 |
211649 |
Total Amount-Rs. Lakhs |
8460.41 |
8338.84 |
7904.12 |
Average rate per tonne Rs |
3702.09 |
3852.10 |
3734.54 |
III FURNACE OIL-KL |
363.74 |
332.08 |
376.63 |
Total Amount (Rs. Lakhs) |
162.11 |
165.39 |
189.13 |
Average rate per KL |
44567 |
49804 |
50216 |
IV OTHER /INTERNAL GENERATION (MT) |
|
|
|
(a) Bagasse,Pith,Bamboo/Wood dust |
6975 |
3737 |
7110 |
(b) Black Liquor Solids |
81476 |
84977 |
76877 |
B CONSUMPTION PER UNIT OF PRODUCTION |
|
|
|
Production- MT |
|
|
|
Paper |
84282 |
86410 |
76954 |
Sugar |
26198 |
17179 |
24675 |
ELECTRICITY CONSUMPTION (KWH) |
|
|
|
Paper |
1940 |
1948 |
1983 |
Sugar |
307 |
348 |
354 |
COAL CONSUMPTION(MT) |
|
|
|
Paper |
2.30 |
2.26 |
2.34 |
Sugar |
1.32 |
1.24 |
1.28 |
C FOREIGN EXCHANGE EARNINGS AND OUTGO (Rs.LAKHS) |
|
|
|
1 FOREIGN EXCHANGE EARNINGS-EXPORT OF PAPER |
736.23 |
0.00 |
0.00 |
2 FOREIGN EXCHANGE OUT GO DURING THE FINANCIAL YEAR ENDING 31-03-2014 |
|
|
|
a ) Imports (on C.I.F. basis) |
|
|
|
i) Raw Material |
4376.59 |
3718.40 |
4591.17 |
ii) Components,Spares parts ,Chemicals |
263.05 |
90.07 |
132.85 |
iii) Capital Goods |
- |
- |
- |
b) Other than imports |
|
|
|
i) Travel |
- |
- |
- |
ii) Interest on CDC Loan |
- |
- |
- |
iii) Loan Repayment CDC Loan |
- |
- |
- |
iv) Services |
- |
- |
- |
|