€¦ · · 2016-10-03NOTICE is hereby given that the 32nd Annual General Meeting of Mangalam...

M A N G A L A M T I M B E RP R O D U C T S L I M I T E D

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NOTICETo The Members

NOTICE is hereby given that the 32nd Annual General Meeting of Mangalam Timber Products Limited (CIN:L02001OR1982PLC001101) will be held on Monday, the 26th day of September, 2016, at 10.00 A.M. at the RegisteredOffice of the Company at Vill: Kusumi, P.O. & Dist. Nabarangpur, Odisha - 764059 to transact the following business:

Ordinary Business

1. To receive, consider and adopt the audited financial statement of the Company for the financial year ended 31stMarch, 2016 and the Reports of the Directors and Auditors thereon.

2. To appoint a Director in place of Smt. Vidula Jalan (DIN: 01474162), who retires by rotation at this Annual GeneralMeeting and being eligible has offered herself for re-appointment.

3. To appoint auditors and to fix their remuneration and in this regard to consider and if thought fit, to pass, withor without modification(s), the following resolution as an Ordinary Resolution.

“RESOLVED THAT subject to the provisions of Section 139 and other applicable provisions of the Companies Act,2013, and the Rules made thereunder and pursuant to the recommendations of the audit committee of the Boardof Directors, M/s. S.M. Daga & Co, Chartered Accountants (Firm Registration No. 303119E), be and are herebyappointed as Auditors of the Company to hold office from the conclusion of this meeting till the conclusion ofthe next Annual General Meeting of the Company at such remuneration as shall be fixed by the Board of Directorsof the Company”.

Special Business

4. To consider and if thought fit, to pass with or without modification(s), the following resolution as a SpecialResolution.

“RESOLVED THAT pursuant to the provisions of Section 196, 197, 203 read with Schedule V and all other applicableprovisions of the Companies Act, 2013 and the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules, 2014 (including any statutory modification(s) or re-enactment thereof for the time being inforce) and subject to approval by shareholders of the Company, the Board hereby approves the appointment ofShri Soumitra Kumar De, as Manager of the Company, for a period of 3 (three) consecutive years with effect from13th August, 2015, in terms of the said Act, upon terms and conditions as recommended by the Nomination &Remuneration Committee and set out in the Explanatory Statement annexed hereto the Notice calling the AnnualGeneral Meeting.”

5. To consider and, if thought fit, to pass with or without modification(s), the following Resolution as an OrdinaryResolution.

"RESOLVED THAT pursuant to Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985, theapplicable provisions of the Companies Act, 2013 and such other laws, rules, regulations, guidelines or notificationsas may be applicable, if any, and subject to approval of audited annual accounts for the financial year 2015-16by the members of the Company in this Annual General Meeting, the report of the Board of Directors explainingthe reasons of erosion of more than 50% of the peak net worth of the Company as per the audited financial resultsof the Company for the year ended 31st March, 2016 be and is hereby considered and approved.

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to inform andreport as potentially sick industrial company to the Board for Industrial and Financial Reconstruction (BIFR) andsuch other state and central government authorities as may be required under the laws, rules, regulations,guidelines and directives for the time being in force in India in the prescribed form and to intimate such otherauthorities, entities, financial institutions, stock exchanges, body corporates, associations and persons as may benecessary in terms of the agreements, security documents, undertakings, declarations and memorandum ofunderstanding entered into by the Company.


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Registered Office: By Order of the Board of DirectorsVill : Kusumi, P.O. & Dist. Nabarangpur,Odisha – 764059, IndiaCIN: L02001OR1982PLC001101Website:www.mangalamtimber.comEmail: [email protected] No: +91 6858 222148/142/053Fax: +91 6858 222 042

Dated: 25th May, 2016 Namrata PriyaPlace : Kolkata Company Secretary

NOTES:1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE

ANNUAL GENERAL MEETING (THE “MEETING”) ISENTITLED TO APPOINT A PROXY TO ATTEND ANDVOTE INSTEAD OF HIMSELF AND SUCH PROXY NEEDNOT BE A MEMBER OF THE COMPANY. Theinstrument appointing the proxy should, however,be deposited at the registered office of the Companynot less than forty-eight hours before thecommencement of the Meeting.Proxies submitted on behalf of companies, societies,etc. must be supported by an appropriate resolution/authority, as applicable. A person shall not act as aProxy for more than 50 members and holding in theaggregate not more than ten percent of the totalvoting share capital of the Company. However, asingle person may act as a proxy for a member holdingmore than ten percent of the total voting sharecapital of the Company provided that such personshall not act as a proxy for any other person.

2. Explanatory Statement pursuant to Section 102 ofthe Companies Act, 2013, in respect of the SpecialBusiness to be transacted at the Annual GeneralMeeting as set out in the Notice is annexed hereto.

3. The Register of Members and Share Transfer Booksof the Company will remain closed from Tuesday,the 20th day of September, 2016 to Monday, the26th day of September, 2016 (both days inclusive).

4. Members are informed that the scrip’s of theCompany have been activated both in CDSL and NSDLand may be dematerialised under the ISIN No:INE805B01012.

5. Members, who have not so far encashed dividendwarrants for the financial year ended 31st March,2009 are requested to seek issue of duplicatewarrants by writing to the Company’s Registrar andShare Transfer Agent, M/s, C. B. Management Services(P) Ltd. Members may note that pursuant toSec.124(5) any money, which remains unpaid orunclaimed for a period of seven years from the dateof transfer to the unpaid dividend account of theCompany, should be transferred by the Company tothe Investor Education and Protection Fund (“IEPF”)and no claim should lie against the IEPF or theCompany thereafter.Pursuant to the provisions of Investor Education andProtection Fund (Uploading of information regardingunpaid and unclaimed amounts lying with companies)Rules, 2012, the Company has uploaded the detailsof unpaid and unclaimed amounts lying with theCompany as on 11th September, 2015 (date of lastAnnual General Meeting) on the website of theCompany (www.mangalamtimber.com).

6. In terms of provisions of Section 72 of the CompaniesAct, 2013, nomination facility is available to individualshareholders. The shareholders who are holdingshares in physical form and are desirous of availingthis facility may kindly write to the Company’s ShareTransfer Agents, M/s. C. B. Management Services (P)Ltd., P-22 Bondel Road, Kolkata-700 019 fornomination form quoting their folio number.Shareholders holding shares in dematerialized formshould write to their Depository Participant for thepurpose.

7. Members who are holding shares in identical orderof names in more than one folio, are requested to

RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorised to do all such acts, thingsand deeds as may be necessary in this regard and to file/ submit all the required forms/ returns/documents with therespective authorities to give effect to above resolution."


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NOTES (Contd.)

write to the Company‘s Share Transfer Agents at theaddress mentioned here in above in Note 6 toconsolidate their holding in one folio.

8. Members who are holding shares in physical formare requested to notify change in address, if any, tothe Company’s Share Transfer Agents at the addressmentioned hereinabove in Note 6 quoting their folionumber. Shareholders holding shares indematerialized form, should intimate change of theiraddress, if any, to the Depository participant.

9. As required by Securities and Exchange Board ofIndia (SEBI) vide its Circular, the shareholders arerequested to furnish a copy of the PAN card to theCompany/Registrar & Share Transfer Agents whilesending the shares held in physical form for transfer,transmission, transposition and deletion of name ofthe deceased shareholder(s).

10. Members may also note that the Notice of the 32ndAnnual General Meeting and the Annual Report forthe financial year 2015-16 will also be available onthe Company’s website www.mangalamtimber. comfor their download. The physical copies of theaforesaid documents will also be available at theCompany’s Registered Office for inspection duringnormal business hours on working days. Even afterregistering for e-communication, members areentitled to receive such communication in physicalform, upon making a request for the same, by postfree of cost. For any communication, the shareholdersmay also send requests to the Company Secretaryat the email id: [email protected].

11. Reappointment of Smt. Vidula Jalan, Director retiringby rotation.Information about the appointee pursuant toRegulation 36(3) of SEBI (Listing Obligations andDisclosure Requirements), Regulations 2015.Smt. Vidula Jalan [DIN:01474162], aged 36 years, isMBA in Strategic Marketing, Leadership and ChangeManagement from the Indian School of Business,Hyderabad. Moreover, she also has an Accountingand Finance degree from The University ofManchester, U.K. She is also managing the affairs ofreputed schools and charitable trusts of the B. K.Birla Group (the “Group”). She joined the board ofMangalam Timber Products Ltd. on 29th June, 2005.She also holds Directorship in Vidula ConsultancyServices Limited and Mangalam Cement Limited. Sheholds 1,03,527 shares of the Company.

12. Voting through electronic meansI. In compliance with provisions of Section 108 of the

Companies Act, 2013, Rule 20 of the Companies(Management and Administration) Rules, 2014 asamended by the Companies (Management andAdministration) Amendment Rules, 2015 andRegulation 44 (1) & (2) of SEBI (Listing Obligationsand Disclosure Requirements), Regulations 2015, theCompany is pleased to provide members facility toexercise their right to vote on resolutions proposedto be considered at the 32nd Annual General Meetingby electronic means and the business may betransacted through e-Voting Services. The facility ofcasting the votes by the members using an electronicvoting system from a place other than venue of theAGM (“remote e-voting”) will be provided by NationalSecurities Depository Limited (NSDL).

II. The facility for voting through ballot paper shall bemade available at the AGM and the membersattending the meeting who have not cast their voteby remote e-voting shall be able to exercise theirright at the meeting through ballot paper.

III. The members who have cast their vote by remotee-voting prior to the AGM may also attend the AGMbut shall not be entitled to cast their vote again.

IV. The remote e-voting period commences on Friday,the 23rd day of September, 2016 (9:00am) and endson Sunday, the 25th day of September, 2016(5:00pm). During this period members’ of theCompany, holding shares either in physical form orin dematerialized form, as on the cut-off date ofMonday, the 19th day of September, 2016, may casttheir vote by remote e-voting. The remote e-votingmodule shall be disabled by NSDL for votingthereafter. Once the vote on a resolution is cast bythe member, the member shall not be allowed tochange it subsequently.

V. The process and manner for remote e-voting are asunder:

A. In case a Member receives an email from NSDL [formembers whose email IDs are registered with theCompany/Depository Participants(s)] :(i) Open the email and open the PDF file viz;

“Mangalam Timber Products Limited-remote e-voting.pdf” with your Client ID or Folio No. aspassword. The said PDF file contains your userID and password/PIN for remote e-voting. Pleasenote that the password is an initial password.


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NOTES (Contd.)

(ii) Launch internet browser by typing the followingURL: https://www.evoting.nsdl.com/

(iii) Click on Shareholder –Login(iv) Put user ID and password as initial password/PIN

noted in step (i) above. Click Login.(v) Password change menu appears. Change the

password/PIN with new password of your choicewith minimum 8 digits/characters orcombination thereof. Note new password. It isstrongly recommended not to share yourpassword with any other person and take utmostcare to keep your password confidential.

(vi) Home page of remote e-voting opens. Click onremote e-voting: Active Voting Cycles.

(vii) Select “EVEN” of “Mangalam Timber ProductsLimited”.

(viii) Now you are ready for remote e-voting as CastVote page opens.

(ix) Cast your vote by selecting appropriate optionand click on “Submit” and also “Confirm” whenprompted.

(x) Upon confirmation, the message “Vote castsuccessfully” will be displayed.

(xi) Once you have voted on the resolution, you willnot be allowed to modify your vote.

(xii) Institutional shareholders (i.e. other thanindividuals, HUF, NRI etc.) are required to sendscanned copy (PDF/JPG Format) of the relevantBoard Resolution/ Authority letter etc. togetherwith attested specimen signature of the dulyauthorized signatory(ies) who are authorized tovote, to the Scrutinizer through e-mail [email protected] with a copy marked [email protected]

B. In case a Member receives physical copy of the Noticeof AGM [for members whose email IDs are notregistered with the Company/DepositoryParticipants(s) or requesting physical copy] :(i) Initial password is provided as below/at the

bottom of the Attendance Slip for the AGMEVEN (Remote e-voting Event Number) USER ID PASSWORD/PIN

(ii) Please follow all steps from Sl. No. (ii) to Sl. No.(xii) above, to cast vote.

VI. In case of any queries, you may refer the FrequentlyAsked Questions (FAQs) for Members and remotee-voting user manual for Members available at the

downloads section of www.evoting.nsdl.com or callon toll free no.: 1800-222-990.

VII. If you are already registered with NSDL for remotee-voting then you can use your existing user ID andpassword/PIN for casting your vote.

VIII. You can also update your mobile number and e-mailid in the user profile details of the folio which maybe used for sending future communication(s).

IX. The voting rights of members shall be in proportionto their shares of the paid up equity share capital ofthe Company as on the cut-off date of Monday, the19th day of September, 2016.

X. Any person, who acquires shares of the Companyand become member of the Company after despatchof the AGM notice and holding shares as of the cut-off date i.e. Monday, the 19th day of September,2016 may obtain the login ID and password bysending a request at [email protected] [email protected], if you are already registered with NSDL forremote e-voting then you can use your existing userID and password for casting your vote. If you forgotyour password, you can reset your password by using“Forgot User Details/Password” option available onwww.evoting.nsdl.com or contact NSDL at thefollowing toll free no.: 1800-222-990.

XI. A person, whose name is recorded in the register ofmembers or in the register of beneficial ownersmaintained by the depositories as on the cut-off dateonly shall be entitled to avail the facility of remotee-voting as well as voting at the AGM through ballotpaper.

XII. The Company has appointed Shri Navin Kumar Sureka(Membership No.062777), Practicing CharteredAccountant as the Scrutinizer for providing facilityto the members of the Company to scrutinize thevoting and remote e-voting process in a fair andtransparent manner.

XIII. The Chairman shall, at the AGM, at the end ofdiscussion on the resolutions on which voting is tobe held, allow voting with the assistance of scrutinizer,by use of Ballot paper for all those members whoare present at the AGM but have not cast their votesby availing the remote e-voting facility.

XIV. The Scrutinizer shall after the conclusion of votingat the general meeting, will first count the votes castat the meeting and thereafter unblock the votes cast


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5. Foreign Investments or collaborators, if any: None.

ANNEXURE TO THE NOTICEEXPLANATORY STATEMENT PURSUANT TO SECTION 102 OF THE COMPANIES ACT, 2013 (“the Act”)

ITEM NO. 4Upon resignation of Shri Tara Chand Sharma, Manager ofthe Company, the Board has accorded its approval toappointment of Shri Soumitra Kumar De as Manager ofthe Company for a period of three (3) consecutive yearscommencing from 13th August, 2015 to 12th August,2018.The Board also approved the terms and conditions of hisappointment including remuneration, as recommendedby the Nomination and Remuneration Committee, inaccordance with the provisions of Sections 196, 197, 203,Schedule V and other applicable provisions, if any, of theCompanies Act, 2013 read with Companies (Appointmentand Remuneration of Managerial Personnel) Rules, 2014(including any statutory modification(s) or re-enactmentthereof, for the time being in force), subject to the approvalof the shareholders at the ensuing Annual GeneralMeeting.For the year ended 31st March, 2016 the Company hasincurred a net loss. Whilst the Company has alreadyinitiated steps to turn around the situation, due to externalfactors (such as general economic slowdown coupled withincreasing raw material costs, power and fuel and freight

costs), it may take sometime till the situation completelychanges. Consequently, out of abundant caution and inview of the relevant extant provisions of law relating tomanagerial remuneration, the Company is complying withthe provisions of Section II of Part II of Schedule V to theCompanies Act, 2013.Except Shri Soumitra Kumar De, being an appointee, noneof the Directors, Key Managerial Personnel or their relativesare in any way, concerned or interested, financially orotherwise, in this resolution.The specified information while seeking approval/consentof shareholders as required under Schedule V is listed outherein below:I. General Information:1. Nature of Industry: Manufacturing of Medium Density

Fibreboard.2. Date or expected date of commencement of

commercial production: 11th November, 1987.3. In case of new companies, the expected date of

commencement of the activities as per projectapproved by the financial appearing in theprospectus: Not applicable.

through remote e-voting in the presence of at leasttwo witnesses not in the employment of theCompany and shall make, not later than three daysof the conclusion of the AGM, a consolidatedscrutinizer’s report of the total votes cast in favouror against, if any, to the Chairman or a personauthorized by him in writing, who shall countersignthe same and declare the result of the votingforthwith.

XV. The Results declared along with the report of theScrutinizer shall be placed on the website of theCompany www.mangalamtimber.com and on thewebsite of NSDL immediately after the declarationof result by the Chairman or a person authorized byhim in writing. The results shall also be immediatelyforwarded to the BSE Limited and National StockExchange of India Limited.

4. Financial Performance based on given indicators:(Rs. in lacs)

Gross Sales and Other Income 4439.48 4827.69Operating Profit (PBIDT) (1550.11) (1057.18)Profit before Depreciation & Tax (PBDT) (1897.95) (1415.54)Profit after tax (PAT) (1264.76) (1007.53)

For the Year ended31st March, 2016

For the Year ended31st March, 2015Particulars


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Particulars Amount (Rs.)Salary 7,000/- per monthHRA 2,100/- per monthManagerial/Other allowances As per rules of the CompanyMedical/LTA/Insurance As per rules of the CompanyBonus/Exgratia As per rules of the CompanyProvident Fund, Superannuation Fund & Gratuity As per rules of the CompanyMiscellaneous Reimbursement Reimbursement of expenses of

Mobile Phone/Broad-band/DataCard used for the company’s business shall not be consideredas perquisite.

Notwithstanding anything herein contained, wherein any financial year during the period of his officeas Manager of the Company, the Company has noprofits or its profits are inadequate, the Companymay, subject to the requisite approvals, pay ShriSoumitra Kumar De remuneration by way of salary,allowances, perquisites not exceeding the maximumlimits laid down in Section II of Part II of Schedule Vto the Companies Act, 2013.

6. Comparative remuneration profile with respect toindustry, size of the company, profile of the positionand person:Remuneration of Manager in the industry in generalhas gone up manifold in past few years. Theremuneration in the industry for a person of thesame caliber/position of Shri Soumitra Kumar Demay generally be higher than what is being paid tohim. The remuneration to Shri Soumitra Kumar Deis purely based on merits and the performance ofthe Company. Further, the Nomination andRemuneration Committee constituted by the Boardperused the remuneration of managerial personnel.

7. Pecuniary relationship directly or indirectly with thecompany or relationship with the ManagerialPersonnel, if any:Shri Soumitra Kumar De holds 101 shares in thecompany as on 31st March, 2016. Apart fromreceiving remuneration as stated above and dividendas a member of the Company, Shri Soumitra KumarDe does not have any pecuniary relationship withthe Company. There are no Managerial Personnelrelated to Shri Soumitra Kumar De.

III. Other Information1. Reasons of loss or inadequate profits:

The performance of the Company was deeplyimpacted due to lower production, primarily becauseof acute power supply restriction, disturbance inpower supply due to various reasons by SouthernElectricity Supply Company of Odisha Limited(SOUTHCO) and shortage of key raw material i.efirewood.

II. Information about the Appointee:1. Background details:

Shri Soumitra Kumar De, aged 60 years, is M .Com, LLB from Calcutta University. He has spent 26 years workingwith the oil industry in various capacities of Finance and Audit. He has also been associated with the largest retailchain of India in capacity of zonal head of Internal Audit and was also a SAP Consultant.

2. Past remuneration: Not applicable as this is his first appointment as the Manager.3. Recognition and awards : Nil4. Job profile and his suitability:

The appointment of Shri Soumitra Kumar De as the Manager of the Company shall be subject to the supervisionand control of the Board of Directors of the Company. He shall manage the business and substantially the wholeof the affairs of the Company and exercise such powers as are vested by the Board of Directors subject to anylimitation or conditions which may be prescribed by the Act or the provisions of Memorandum and/or Articlesof Association of the Company or the Board of Directors or by the Company in General Meeting.Shri Soumitra Kumar De will continue to act as Head-Accounts & Finance.

5. Remuneration Proposed:


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REPORT ON EROSION OF NET WORTH, CAUSES THEREOF AND ACTION TAKEN BY COMPANY IN TERMS OF SECTION23 OF SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT 1985In terms of requirements of Section 23 of Sick Industrial Companies (Special Provisions) Act, 1985, a report of Boardof Directors on erosion of more than 50 % of peak net worth during the immediately preceding four financial yearsalong with causes and revival plans is being submitted herewith.As per the provisions of Sick Industrial Companies (Special Provisions) Act, 1985, Net Worth of the Company for presentas well as proceeding four financial years is as follows:

Financial Year/Net Worth 2015-16 2014-15 2013-14 2012-13 2011-12Components

(A) Paid up CapitalEquity Share Capital 1832.74 1832.74 1832.74 1832.74 1832.74

(Rs. in Lacs)

Factors such as general economic slowdown andadverse market conditions coupled with everincreasing raw material prices, power & fuel andtransportation costs have severally affected themargins for products manufactured by the Company.

2. Steps taken or proposed to be taken for improvement:The company has installed its own captive powerplant to mitigate shortage of power, achieve higherproduction level as well as reduce its cost ofproduction.The Company has started trial run of thepower plant.Also, the company has initiated certain steps suchas cost control, strategic marketing positioning ofbrand and product and improving efficiency etc.Though, the prices of raw materials and fuels areinfluenced by external factors the Company is makingall possible efforts to improve the margins.

3. Expected increase in productivity and profits inmeasurable terms:The Company is very conscious about improvementin productivity and undertakes constant measuresto improve it. However, it is extremely difficult in thepresent scenario to predict performance inmeasurable terms.

IV. Disclosures:The remuneration paid to each Directors and KeyManagerial Personnel is suitably disclosed in theReport of Board of Directors forming part of theAnnual report. There is no severance fee or stockoption in case of the aforesaid Managerial Personnel.The respective tenure of the aforesaid ManagerialPersonnel shall be governed the resolution passedby shareholders in the General Meeting.

This may be treated as an abstract of the terms andconditions governing the appointment and paymentof remuneration of Shri Soumitra Kumar De pursuantto Section 190 of Companies Act, 2013.

ITEM NO. 5In terms of Section 23 of the Sick Industrial Companies(Special Provisions) Act, 1985, if the accumulatedlosses of an industrial Company, as at the end of anyfinancial year have resulted in erosion of fifty percentor more of its peak net worth during the immediatelypreceding four financial years, that Company fallsunder the category of potentially sick IndustrialCompany and therefore the fact is required to bereported to Board of Industrial and FinancialReconstruction (BIFR) within 60 days from the dateof finalization of the audited accounts which is thedate of this Annual General Meeting.As per the audited accounts of the Company for theyear ended 31.03.2016 finalized and approved bythe Board subject to approval of shareholders on26th September, 2016 the accumulated losses of theCompany as at 31st March, 2016, amounting toRs.3900.29 Lacs have resulted in erosion of morethan fifty percent of its peak net worth of Rs. 5279.74Lacs during the immediately preceding four financialyears.A report on such erosion and its causes is requiredto be submitted before the shareholders for theirconsideration and approval. The said report isannexed herewith and is forming part of this noticeand explanatory statement. In view of above, yourdirectors recommend approval of the shareholdersby a special resolution.None of the Directors, Key Managerial Personnel ortheir relatives are in any way, concerned or interested,financially or otherwise, in this resolution.


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(Rs. in Lacs)

Accumulated losses for the year ended 31.03.2016 (Relevant financial year) are Rs. 3900.29 Lacs.

Peak Net Worth as per above is Rs. 5279.74 Lacs.

Accumulated losses as percentage of peak net worth: 73.87%.

As presented above as per the audited accounts of the Company for the year ended 31.03.2016, the accumulatedlosses of the Company as at 31.03.2016 amounting to Rs. 3900.29 Lacs have resulted in erosion of more than fiftypercent of its peak net worth of Rs. 5279.74 Lacs during the immediately preceding four financial year. Thus under theprovisions of SICA the Company is a potentially sick industrial Company.

CAUSES OF EROSION OF NET WORTH OF THE COMPANY:

1. Overall economic slowdown resulting in weak demand for MDF squeezing profit margins.

2. Cheap imports of Fibreboard from countries like Indonesia and Vietnam.

3. Severe price pressure from the peers wherein the market prices line are being negatively redefined.

4. Acute power supply restriction, disturbance in power supply due to various reasons by Southern Electricity SupplyCompany of Odisha Limited (SOUTHCO) and shortage of key raw material i.e firewood.

STEPS TAKEN/PROPOSED TO BE TAKEN BY THE COMPANY MANAGEMENT:

1. The company has installed its own captive power plant to mitigate shortage of power, achieve higher productionlevel as well as reduce its cost of production.

2. The company has finalized the negotiation for replacement of sander which will improve the quality of the product.

3. Through overhauling of machinery to improve the quality of finished products thereby increasing generation ofhigher quality output and bringing rejections to the minimum and achieving optimal utilisation of power, rawmaterials and labour.

4. Introduction of value added products having high margins.

Registered Office: By Order of the Board of DirectorsVill : Kusumi, P.O. & Dist. Nabarangpur,Odisha – 764059, IndiaCIN: L02001OR1982PLC001101Website:www.mangalamtimber.comEmail: [email protected] No: +91 6858 222148/142/053Fax: +91 6858 222 042

Dated: 25th May, 2016 Namrata PriyaPlace : Kolkata Company Secretary

Preference Share Capital 3447.00 3447.00 3447.00 3447.00 -Sub Total (A) 5279.74 5279.74 5279.74 5279.74 1832.74(B) Free ReservesGeneral Reserve - - - - -Securities Premium A/c - - - - -Profit & Loss A/c (Cr.) - - - - -Sub Total (B) - - - - -Total ( C) =( A+B) 5279.74 5279.74 5279.74 5279.74 1832.74


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ROUTE MAP FOR AGM VENUE

NABARANGPUR

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KORAPUT RLY. STATION

JEYP

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NABA

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KORAPUTJEYPORE ROAD

REGD. OFFICEM.T.P.L.

NABARANGPURNH

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Dear Members,Your Directors are pleased to present the 32nd Annual Report of the Company and the Audited Accounts for thefinancial year ended 31st March, 2016.

1. FINANCIAL RESULTSThe Company’s financial performance for the year ended 31st March, 2016 is summarized below:

DIRECTORS’ REPORT FOR THE YEAR ENDED 31ST MARCH 2016

(Rs. in lacs)For the Year ended

31st March, 2016For the Year ended

31st March, 2015Particulars

Net Sales / Income from operations 3853.42 3958.30Profit/(Loss) before Interest, Finance Charges, (1550.11) (1057.18)Depreciation and TaxLess: Interest and Finance Charges 347.84 358.36Profit / (Loss) before Depreciation and Tax (1897.95) (1415.54)Less: Depreciation 137.57 161.27Profit / (Loss) before Tax (2035.52) (1576.81)Less: Tax Expenses (net) (770.76) (569.28)Net Profit / (Loss) after Tax (1264.76) (1007.53)Profit / (Loss) brought forward from previous year (2635.53) (1596.43)Balance carried forward to next year (3900.29) (2603.96)

2. DIVIDENDIn view of losses, the Board of Directors has not recommendedany dividend for the financial year 2015-16.

3. TRANSFER TO RESERVESIn view of the losses incurred by the Company this year,no amount has been transferred to the General Reserve.

4. MANAGAEMENT DISCUSSION AND ANALYSISA Management Discussion & Analysis is forming part ofthis Annual Report.

5. FINANCEYour Company thanks its consortium bankers for theircontinued support.

6. REPORTING TO BOARD FOR INDUSTRIAL ANDFINANCIAL RECONSTRUCTION (“BIFR”)As per the audited accounts of the Company for thefinancial year ended 31st March, 2016, the accumulatedlosses as at the end of the said period stood atRs. 3900.29 Lacs which exceeds fifty percent of its peaknet worth of Rs. 5279.74 Lacs during immediate precedingfour financial years.In terms of Section 23(a)(i) of the Sick IndustrialCompanies (Special Provisions) Act, 1985 (“SICA”), theCompany falls under the category of potentially SickIndustrial Company and therefore the fact is required tobe reported to Board of Industrial and FinancialReconstruction (“BIFR”) within 60 days from the date of

finalisation of the audited accounts, which is the dateof Annual General Meeting in which accounts will beapproved by the shareholders. A report on causes oferosion of net worth and steps taken by the Companyis forming part of the Notice to Annual General Meeting.

7. RAW MATERIALRaw material costs especially firewood, Melamine andUrea have increased substantially and have affectedperformance during the year. Further, unavailability offirewood, which is a key raw material of the Company’sproduct, also affected the Company’s performance to alarge extent. Other raw materials also have shown anupward trend in prices. As in the past years the focus onthe Plantation under the Farm Forestry Scheme wasmaintained. This, together with plantation activitiesundertaken in our owned leased land, will make theCompany self-sufficient in availability of its principal rawmaterial in future.

8. CAPTIVE THERMAL POWER PLANTThe Company has commissioned trial run of its 3MWcaptive thermal power plant and will commissioncommercial production on successful completion of saidtrail run. This power plant will provide uninterruptedpower for the production which will not only improvethe plant efficiency but also reduce its cost of production.With this power plant, the Company will be 100% self-sufficient through its own power generation.


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9. PLANTATIONAvailability of firewood in nearby areas has becomedifficult but necessary efforts are being madecontinuously to develop long term supply. Your companyis continuing its policy on plantation activities to helpsupply quality raw material to factory with least cost ona continuous & sustainable basis. Some important effortsundertaken during the year are mentioned below:i. Mist Chamber and Nursery: Company is strategically

increasing the focus on Nursery operations to ensureconsistent & quality supply of high yielding clonalplants to the farmers at affordable price and toincrease the catchment areas of Company for wood.Production capacity of the nursery is 3.00 millionclonal plants.

ii. Farm Forestry Planting: Odisha forest departmenthas invited the wood based industry to participatein a farm forestry scheme wherein industry willsupply good quality clonal planting material to smalland marginal farmers with wood buybackarrangement. The scheme provides scope for thefarmer to achieve higher returns from his/her land.During the year also, we have entered into newBIPARTARE AGREEMENT between Company and bigfarmers on buy back basis. The scheme providesscope for industry to procure good quality rawmaterial and increase the availability of wood nearNabarangpur catchment areas of the Company. Bythis scheme we have supplied 0.13 million clonalplants to farmers.

iii. Lease area Replanting: We are gradually increasingthe area under plantation and by 2017-18 entirelease area will have high yielding clonal plants, whichwould supply approx. 15% to 20% annualrequirement of our plant from 2017 onwards.

iv. Private Wood supply: Presently approx. 10% of ourwood requirement comes from farm forestry andlease plantations. In future we can fulfill up to 15%-20% of the Company wood requirement from ourleased land and balance requirement from privatesuppliers. All efforts are being made to increase thecaptive wood supply. However, efficient vendordevelopment is essential for long-term consistentsupply of quality wood.

10. EXTRACT FROM ANNUAL RETURNThe Extract of Annual Return as required under Section134(3)(a) of the Companies Act, 2013 is set out atAnnexure-I forms part of this report.

11. BOARD MEETINGSThe Board met four times during the Financial Year 2015-16. Details of Meetings and the attendance of eachDirector is provided in the Report on CorporateGovernance

12. AUDIT COMMITTEEThe composition and terms of reference of the AuditCommittee has been furnished under SN 3A in theCorporate Governance Report forming a part of this

Annual Report. There have been no instances where theBoard has not accepted the recommendations of theAudit Committee.

13. CORPORATE GOVERNANCEYour Company attaches considerable significance to goodCorporate Governance as an important step towardsbuilding investor confidence, improving investors'protection and maximizing long-term shareholders value.The Report on Corporate Governance as stipulated underChapter IV of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements)Regulations, 2015 (“the Listing Regulations”) forms partof the Annual Report. The certificate of the Auditors,M/s. S. M. Daga & Co., confirming compliance ofconditions of Corporate Governance as stipulated underthe Listing Regulations is attached as Annexure-II andforms a part of this report.

14. CORPORATE SOCIAL RESPONSIBILTYDriven by the desire to create a meaningful differencein society, the Company makes conscious efforts toachieve higher socio-economic goals. It has continuedwith its welfare activities for development in the fieldsof education, health, culture and other welfare measuresand to improve the general standard of living.

15. NOMINATION AND REMUNERATION POLICYThe Company has in place a formal Nomination andRemuneration Policy formulated as per provisions ofSection 178(3) of the Act as well as Regulation 19(4) readwith Part D of Schedule II of the Listing Regulations.The Company’s Remuneration Policy is attached asAnnexure-III and forms a part of this report.

16. KEY PARAMETER FOR APPOINTMENT OF DIRECTORSAND KEY MANAGERIAL PERSONNELThe Nomination and Remuneration Committee hasformulated a detailed policy for appointment of Directorsand Key Managerial Personnel which is designed toattract, motivate and retain best talent. This policy appliesto Directors, Senior Management including its KeyManagerial Personnel (KMP) and other employees ofthe Company. The compensation strategy revolves aroundgetting the “best talent in the market”. The remunerationof KMPs of the Company is recommended by theNomination and Remuneration Committee based on theCompany’s remuneration structure taking into accountfactors such as level of experience, qualification andsuitability. The Company generally pays remunerationby way of salary, perquisites and allowances (fixedcomponent).

17. DIRECTORSShri N G Khaitan, Shri Prabir Chakravarti, Shri AnandDaga, Smt. Vidula Jalan and Smt. Leena Ghosh aremembers of the Board.In accordance with the Articles of Association of theCompany and the provisions of the Companies Act, 2013,Smt Vidula Jalan, being non-independent director, retiresby rotation and being eligible, seeks re-appointment.


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The Company has received declaration from all theIndependent Directors of the Company confirming thatthey meet the criteria of the independence prescribedunder sub section (6) of the section 149 of the CompaniesAct, 2013.The details of programmes for familiarisation ofIndependent Directors with the Company, their roles,rights, responsibility in the Company, nature of theindustry in which the Company operates and otherrelated matters are put on the website of the Companyat the link http://www.mangalamtimber.com/images/Fami l iar isat ion-Programme-for- Independent-Directors.pdf

18. DIRECTORS' RESPONSIBILITY STATEMENTPursuant to the provisions of Section 134(5) of the Act,the Directors state that:a) in the preparation of the annual accounts, the

applicable accounting standards have been followedand proper explanations provided relating to materialdepartures, if any;

b) such accounting policies have been selected andapplied consistently and judgments and estimatesmade that are reasonable and prudent so as to givea true and fair view of the state of affairs of theCompany at the end of the financial year and of theloss of the Company for that period;

c) proper and sufficient care has been taken for themaintenance of adequate accounting records inaccordance with the provisions of the CompaniesAct, 2013 for safeguarding the assets of the Companyand for preventing and detecting fraud and otherirregularities;

d) the annual accounts have been prepared on a goingconcern basis;

e) internal financial controls were followed by theCompany and they are adequate and are operatingeffectively; and

f) proper systems have been devised to ensurecompliance with the provisions of all applicable lawsand such systems are adequate and operatingeffectively.

19. KEY MANAGERIAL PERSONNELFollowing employees were the Key Managerial Personnelof the Company during the period under review:i. Shri Soumitra Kumar De, Manager of the Company

(with effect from 13th August, 2015)ii. Shri Tara Chand Sharma, Manager of the Company

(upto 31st July, 2015)iii. Shri Amit Kumar Agarwal, Chief Financial Officeriv. Miss. Namrata Priya, Company Secretary

20. REMUNERATION TO DIRECTOR’S & KEY MANGERIAL PERSONNELi. The Ratio of the remuneration of each Director to the median remuneration of employees of the Company

for the year ended 31st March, 2016 are :-

1 Shri N. G. Khaitan Independent and Non-Executive Director 27% Nil

2 Shri Prabir Chakravarti Independent and NonExecutive Director 32% Nil

3 Shri Anand Daga Independent and NonExecutive Director 28% Nil

4 Smt Vidula Jalan Promoter NonExecutive Director 30% Nil

5 Smt Leena Ghosh Independent and NonExecutive Director 22% NA

6 Shri Tara Chand Sharma Manager of theCompany ** NA Nil

7 Shri Soumitra Kumar De Manager of theCompany # NA NA

8 Shri Amit Kumar Agarwal Chief Financial Officer NA Nil9 Miss Namrata Priya Company Secretary NA Nil

Sl Name of Directors and Key Designation Ratio of remuneration Percentage increaseNo. Managerial Personnel of Director to median in the remuneration

remuneration of the for the FinancialEmployee of the Company Year 2015-16

** Upto 31st July, 2015# With effect from 13th August, 2015Median remuneration of the Employees of the Company assumed to be Rs. 2.02 Lacs (Previous Year: Rs. 2.21 Lacs).


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ii. In the financial year 2015-16, there was decrease of8.41% in the median remuneration of employees.

iii. There were 248 permanent employees on the rolls ofCompany as on 31st March, 2016.

iv. In view of the loss of the Company no increments weregiven to employees of the Company.

v. Comparison of the remuneration of the Key ManagerialPersonnel against the performance of the Company:The total remuneration of Key Managerial Personnelincreased by Rs 0.76 Lacs from Rs 10.76 Lacs in 2014-15 to Rs 11.52 Lacs in 2015-16.

vi. (a) Variations in the market capitalization of theCompany: The market capitalization as on 31stMarch, 2016 was Rs 3069.84 Lacs (Rs. 1649.47Lacs as on 31st March, 2015)

(b) Price Earnings Ratio of the Company: Notcomputed in view of Loss

(c) Percent increase over / decrease in the marketquotations of the shares of the company ascompared to the rate at which the company cameout with the last public offer in the year: Thecompany has not made any public issue or rightsissue of securities in the recent past, so comparisonhave not been made of current share price withpublic offer price. The Company’s shares are listedon BSE Limited and National Stock Exchange ofIndia Limited.

vii. Considering the performance of the Company noincrement was made to the salaries of the employeesin the last financial year i.e. 2015-16.

viii. Key Parameters for any variable component ofremuneration availed by the Directors are based ontheir contribution at the Board, time spent onoperational matters and other responsibilities assigned:All directors of the Company are non-executive directorshence no remuneration was paid/ payable to themother than sitting fees.

ix. The ratio of the remuneration of the highest paidDirector to that of the employees who are not directorsbut receive remuneration in excess of the highest paiddirector during the year 2015-16: Nil (All directors ofthe Company are non-executive directors hence noremuneration was paid/ payable to them other thansitting fees).

x. It is hereby affirmed that the remuneration paid is asper the Remuneration Policy of the Company.

21. STATUTORY AUDITORSThe Statutory Auditors, M/s S. M. Daga & Co, CharteredAccountants, hold office up to the ensuing Annual GeneralMeeting and being eligible, offer themselves forreappointment. The Board recommends their re-appointment for the ensuing year. The Company has receivedletter from them to the effect that their appointment, ifmade, would be within the prescribed limits under Section141(3)(g) of the Companies Act, 2013 and that they are notdisqualified from appointment.

22. SECRETARIAL AUDITORThe Board appointed Shri Arup Kumar Roy, ACS, PracticingCompany Secretary as Secretarial Auditor of the Companyfor the Year 2015-16. The Report of the Secretarial Auditoris attached in Annexure IV of this Report. There is noqualification in the report.

23. AUDITORS’ REPORTAuditors’ Report to the shareholders does not contain anyqualification, reservation, or adverse remarks and is self-explanatory.

24. CASH FLOW ANALYSISIn conformity with the provisions of Regulation 34(2)(c) ofthe Listing Regulations, 2015, Cash Flow Statement for thefinancial year ended 31st March, 2016 forms part of theaudited financial statement.

25. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTSThe Company has not given any loan, guarantees or madeany investments as prescribed in Section 186 of theCompanies Act, 2013.

26. RELATED PARTY TRANASACTIONSAll the related party transactions are entered into at arm’slength in ordinary course of business and are in compliancewith the applicable provisions of the Companies Act, 2013and the Listing Regulations. There were, however, nomaterial significant related party transaction made by theCompany with the Promoters, Directors or Key ManagerialPersonnel etc. which may have potential conflict with theinterest of the Company.The policy on Related Party Transactions as approved bythe Board has been uploaded on the Company’s websiteunder web link http://www.mangalamtimber.com/images/Related-Party-Transaction-Policy.pdfYour Directors draw attention of the members to Note 2.25(6) to the financial statement which sets out related partytransactions disclosures.

27. PUBLIC DEPOSITThe Company has neither invited nor accepted any publicdeposits, within the meaning of section 73 of the CompaniesAct, 2013, during the year under report.

28. SUBSIDIARY/ASSOCIATES/JOINT VENTURE COMPANIESThe Company does not have any subsidiary/associate/jointventure company for the year ended 31st March, 2016.

29. TRANSFER TO INVESTOR EDUCATION AND PROTECTIONFUNDThe Company has transferred a sum of Rs 7,29,010/- duringthe financial year 2015-16 to the Investor Education andProtection Fund, established by the Central Governmentfor the unclaimed dividends, for the financial year 2007-08,in compliance with section 125 of the Companies Act, 2013.The said unclaimed dividends were lying with the Companyfor a period of 7 years from their respective due dates ofpayment.


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Dated : 25th May, 2016Place : Kolkata

N G KhaitanPrabir ChakravartiLeena GhoshVidula Jalan

Directors

Pursuant to the provisions of Investor Education andProtection Fund (Uploading of information regarding unpaidand unclaimed amounts lying with companies) Rules, 2012,the Company has uploaded the details of unpaid andunclaimed amounts lying with the Company as on September11, 2015 (date of last Annual General Meeting) on theCompany ’s webs i te under webl ink http : //www.mangalamtimber.com/index.php/investor-desk/unclaimed-dividend

30. VIGIL MECHANISMThe Company has a codified whistle blower policy to establishvigil mechanism for Directors and employees of the Companyto report concerns about unethical behaviour, actual orsuspected fraud or violation of the Company’s code ofconduct or ethics policy. The mechanism under the policyhas been appropriately communicated within theorganisation. The Whistle Blower Policy is available on thewebsite of the Company.

31. DISCLOSURE UNDER SEXUAL HARRASSMENT OF WOMENAT WORKPLACENo complaints on the issues covered by “The SexualHarassment of Women at the Workplace (Prevention,Prohibition & Redressal) Act, 2013”, were received duringthe year. Consequently, the question of disposal ofcomplaints did not arise.

32. MATERIAL CHANGES AND COMMITMENTS AFFECTING THEFINANCIAL POSITION OF THE COMPANYThere have been no material changes and commitments,if any, affecting the financial position of the Company whichhave occurred between the end of the financial year of theCompany to which the financial statements relate and thedate of the report.

33. PERFORMANCE EVALUATIONPursuant to Regulation 17(10) of the Listing Regulationsread with provisions of the Companies Act, 2013, the Boardhas carried out an evaluation of its own performance andthat of the individual Directors. The evaluation criteria,inter-alia, covered various aspects of the Board’s functioningincluding its composition, execution and performance ofspecific duties, obligations and governance. The performanceof individual directors was evaluated on parameters suchas level of engagement and contribution, independence ofjudgement, safeguarding the interest of the Company andits minority shareholders, time devoted, etc. The Directorsexpressed their satisfaction with the evaluation process.

34. CARBON CREDITOur Clean Development Mechanism (CDM) project activity“Reforestation of degraded land by MTPL in India (5016)”has accumulated credit of 1764076 tCERs from UNFCCC.These units will be available to the Company on completionof certain laid formalities.

35. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTIONAND FOREIGN EXCHANGE EARNING AND OUTGOThe information on conservation of energy, technologyabsorption and foreign exchange earnings and outgostipulated under Section 134(3)(m) of the Companies Act,2013 read with Rule 8 of the Companies (Accounts) Rules,2014, is given as Annexure V to this Report

36. PARTICULARS OF REMUNERATIONThe Company has no employee in respect of whominformation under Section 197(12) of the Companies Act,2013 read with Rule 5(2) of Companies (Appointment andRemuneration of Managerial Personnel) Rules, 2014, isrequired to be annexed.

37. INTERNAL FINANCE CONTROLThe Company has in place internal financial control systems,commensurate with the size and complexity of its operations,to ensure proper recording of financial and monitoring ofoperational effectiveness and compliance of variousregulatory and statutory requirements. The Internal Auditormonitors and evaluates the efficacy and adequacy of internalcontrol systems in the Company. Based on the report of theInternal Auditor, respective departments undertakecorrective action in their respective areas and therebystrengthen the controls. Significant audit observations andcorrective actions thereon are presented to the AuditCommittee of the Board

38. LISITNG AGREEMENTThe Securities and Exchange Board of India (SEBI), onSeptember 2, 2015, issued SEBI (Listing Obligation andDisclosure Requirements), Regulation, 2015, with the aimto consolidate and streamline the provision of the ListingAgreement for different segment of capital markets toensure better enforceability. The said regulations wereeffective December 1, 2015. Accordingly, all listed entitieswere required to enter into Listing Agreement within sixmonths from the effective date. The Company entered intoListing Agreement with BSE Limited and the National StockExchange of India Limited within stipulated time frame.

39. APPRECIATIONYour Directors place on record their deep appreciation ofthe assistance and guidance provided by the CentralGovernment and the Governments of the States of India,its suppliers, technology providers and all other stakeholders.Your Directors thank the financial institutions and banksassociated with your Company for their support as well.Your Directors also thank the Company’s dealers and itscustomers for their unstinted commitment and valuableinputs.Your Directors acknowledge the support received from youas shareholders of the Company.


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MANAGEMENT DISCUSSION & ANALYSIS1. INDUSTRY STRUCTURE AND DEVELOPMENTS

With Plywood & laminar wood products becoming expensivedue to the unavailability of suitable hard wood specie likeGurjan after the ban on felling in Burma users have startedshifting to alternative panel products, especially MDF.Moreover, there has been a significant change in the customerpreferences in the interior décor of the modern-day dwelling& work place which sees the increased use of prelaminatedpanels in space saving – functional furniture. Today MDFmeets the customer preference in its uniqueness in itsapplication & flexible in design aspect, yet are affordable.With exposure of the Indian populace to global life stylesdemands furniture has transcended its basic utility factor toa far more multi layered interior solution which is spacesaving yet functional & modular in nature making it easierto own. Further, the window of preference for an interiorsolution is no more a life time but 5 – 6 years followed bya periodic sprucing or a change in the total interiorsdepending upon the constantly changing need with theworry & the inhibition of cost over runs. With natural solidwood & its transitional products like plywood requiringconventional carpentry becoming more expensive to owndue to the ever increasing hardwood cost coupled with thehigh manual conversion cost manufacturers are shifting tomachined furniture/interior solutions that are easy tofabricate & quick to install yet cost significantly less. Thislends a flexibility in scope of expansion & renovation at afaster pace opening up facilities to the Indian masses isshorter spans. Rather modular panel have been creditedwith short interior turnaround time & that’s the prime reasonwhy it’s a world-wide trend.Moreover, imports from China, Indonesia, Vietnam, Malaysiaand even Bangladesh is biggest challenge to the Industry.Few of the Companies of this industry, including us,collectively took an initiative and plea for imposition of anti-dumping duty on MDF imports. The positive outcome of isexpected in short period.

2. OUTLOOKDuring the last few years, a stable Government at the Centrewas established which is expected to drive development inthe coming years. The Government has planned and is takingseveral significant steps to energise the economy. Thecredibility of the Indian economy has been re-establishedand the world is predicting that it is India’s chance to fly.The Government has planned game-changing reforms inindirect tax through the introduction of GST. Introduction ofGST was a much awaited reform and is expected to providenumerous benefits to both business and consumers. Withthe introduction of GST, supply chain inefficiencies will bereduced, Inter-state trade will become easy and the marketwill be integrated at the national level. With all long-termsustainable economic measures being undertaken by theGovernment, economic growth is likely to accelerate in thenext fiscal. The pick-up will be aided by implementation ofstalled projects, getting rid of the bottlenecks in varioussectors and an industry recovery because of higher externaldemand. The GDP forecast for the next fiscal is driven by a

partial unclogging of domestic policy logjam as well asimproved global growth prospects. Stakeholders are markedlybullish about the future and expect the business environmentto be upbeat in the current financial year in view of theimminent change in regime and introduction of economicenablers to stimulate growth. The Indian real estate sectorplays a significant role in the country’s economy. The realestate sector is second only to agriculture in terms ofemployment generation and contributes considerablytowards GDP. It is poised to grow manifold over the nextdecade in view of the prevailing massive shortage of dwellingunits. The sentiment of home buyers and investors is seeingan improvement, displaying a strong positive outlook forthe real estate sector. The Indian market is now headed forprice correction, which will increase consumer affordabilityand leading to overall sectoral growth. A fall in the interestrates will also lead to a revival of the real estate sector. SinceMDF are growing as essential part of interior furnishing, thedemand for product is directly related to the growth ofinfrastructure and real estate sector. With continuedgovernment focus on infrastructure and real estate sector,demand for the Company’s products is expected to remainbuoyant. With the good ‘Duratuff’ brand in landscape, theCompany is expected to perform better in the current fiscal.

3. MARKETING & SALESThe Company with an established pan – Indian presencesince the mid-80s has a dedicated channel network nationally.There has been a strategic focused approach to concentrate/commit maximum marketing efforts & resources to marketsthat are closest to the plant especially the Southern & CentralIndia. Today Duratuff is a name to recon in the Southernmarkets of India with a top of the line brand positioning.The marketing strategies are backed by a dedicated &motivated marketing team which has been the back boneof the team. Team Leaders are highly experienced with 25years & more experience in the trade of MDF making themthe pioneers in the marketing of MDF in India. Such richexperience in the trade ensures ease in market penetration.The brand’s presence in the Indian market place over thepast three decades has created a market strong hold despiteother new domestic competitors & the ever present threatof imports.

4. OPPORTUNITIES AND THREATSMDF today is a product that has been accepted by the Indianmarket since its inception in the mid-80s. Today there aredealer counters totally dedicated to MDF which was unheardof 5 years ago. The customers are ready to try out MDF innewer applications where in multi-level mezzanine storagesolution is a key application where Duratuff MDF hasestablished monopoly with its ultra-high thickness MDF inwhich its unique in the industry as there are no othermanufacturers in the Country & neither is there any importsof the same. With increased impetus on Economic Growththe pressures on Infrastructural demand of alternative panelslike MDF in the housing & the furniture sectors besides therapid growth in the IT Sector the demand is set for anexponential growth in demand.


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Place : KolkataDated : 25th May, 2016

N G KhaitanPrabir ChakravartiVidula JalanLeena Ghosh

Directors

Today domestic & work place interiors have gone througha sea change where in the conventional fabricate & installgestation period have been halved with demands for quickerturnaround time becoming the contentious issue in everyproject site. This has spawned a plethora of machinedwooden furniture converters (OEMs) who work on slimtime line & on a shoe string budget. These are the primecustomers of MDF as it’s easy to work on a pre-finishedready to use panel.

5. RISKS & MITIGATING STEPSDespite the fact that there have been concerted efforts by theIndian MDF Manufacturers in the imposition of ANTI-DUMPINGDUTY still imported MDF are leaking through the net & hittingthe Indian shores. Apart from this, there is severe price pressurefrom the major Indian fabricators from organised sector whereinthe market prices line is being negatively redefined.MDF is now a true COMMODITY & defined by prices only &not by brands. The other key factor is the marketable volumeat the disposal of the competing brands thereby drasticallyreducing order to supply gestation period & being able to givea better product mix enabling dealers to optimize stocks. Thisis one luxury that we do not have in our operations causinguntold delays in dispatching orders as per desired product mixof the customer.The Company has identified various risks faced by the Companyfrom different areas. As required under section 134(3)(n) ofthe Companies Act, 2013, the Board has adopted a riskmanagement policy whereby a proper framework is set up.Appropriate structures are present so that risks are inherentlymonitored and controlled. A combination of policies andprocedures attempts to counter risk as and when they evolve.Further all the issues pertaining to risk management are lookedinto by Audit Committee.

6. OPERATIONAL AND FINANCIAL PERFORMANCEn Operational Performance

Performance of the Company was deeply impacteddue to lower production, primarily because of acutepower supply restriction and disturbance in powersupply due to various reasons by Southern ElectricitySupply Company of Odisha Limited (SOUTHCO) andconsiderable increase in raw material prices, power &fuel and transportation costs. In order to mitigate theshortage of power the Company has taken steps tohave its own captive generation of power. This will notonly enable the Company to achieve higher productionbut would also result in reduction of its cost ofproduction.

n Financial PerformanceDuring the year, production (net) got reduced to 9819MT as compared to 12106 MT in the previous year.Gross sales for the year have reduced to Rs. 4281.80Lacs as compared to Rs. 4391.23 Lacs in the previousyear.Loss for the year stands to Rs. 1264.76 Lacs as againstRs. 1007.53 Lacs in the previous year.

The Company is continuing its efforts to achieve betterresults in the years to come on all fronts like reductionof operational cost(s); strategic marketing positioningof brand and product etc.

7. GREEN INITIATIVESMinistry of Corporate Affairs has permitted companies tosend electronic copies of Annual Report, Notices, etc. tothe e-mail IDs of shareholders. Your Company hasaccordingly arranged to send the soft copies of thesedocuments to the e-mail IDs of the shareholders whereverapplicable. In case any shareholder would like to receivephysical copies of these documents, the same shall beforwarded upon receipt of written request.

8. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACYYour Company has an adequate system of internal controlprocedures which is commensurate with the size and natureof business. Detailed procedural manuals are in place toensure that all the assets are safeguarded, protected againstloss and all transactions are authorized, recorded andreported correctly. The internal control systems of theCompany are monitored and evaluated by internal auditorsand their audit reports are periodically reviewed by theAudit Committee. The observations and comments of theAudit Committee are placed before the Board.

9. HUMAN RESOURCESThe Company recognizes that its people are its core strengthand its biggest performance catalyst. The Company hasalways nurtured a favourable work environment thatencourages continuous learning and innovation. TheCompany has created a work culture which strives to attractthe best talent and provide a conducive environment fortheir personal and professional growth.There are 248 permanent employees on the rolls ofCompany as on 31st March, 2016.

10. CAUTIONARY STATEMENTThe statement in this report on Management Discussionand Analysis describing the Company’s objectives,projections, estimates, expectations or predictions may beforward looking, within the meaning of applicable securitylaw or regulations. These statements are based on certainassumptions and expectations of future events. Actualresults could however differ materially from those expressedor implied. Important factors that could make a differenceto the Company’s operations include global and domesticdemand-supply conditions, finished goods prices, rawmaterials’ cost and availability, changes in Governmentregulations and tax structure, economic developments andother factors such as litigation and industrial relations. TheCompany assumes no responsibility in respect of forwardlooking statements herein which may undergo changes infuture on the basis of subsequent developments,information, or events.Yours faithfully,


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I. REGISTRATION AND OTHER DETAILS:

1. CIN L02001OR1982PLC0011012. Registration Date 27th August,19823. Name of the Company Mangalam Timber Products Ltd.4. Category/Sub-Category of the Company: Public Company limited by shares5. Address of the Registered Office Vill: Kusumi, P.O. & Dist. Nabarangpur, Odisha – 764059

and contact details Tel: +91 -06858 222148/142/053Email: [email protected]

6. Whether listed company Yes7. Name, Address and Contact details of C B Management Services Pvt. Limited

Registrar and Transfer Agent, if any P-22 Bondel Road, Kolkata - 700 019Tel: +91 -2280 6692-94/40116700E-mail: [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANYAll the business activities contributing 10% or more of the total turnover of the Company shall be stated:-

Sl. No. Name and Description of main NIC Code of the Product % to total turnover of theproducts / services / service company

1 Medium Density Fibre Board 16212 100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES - Not ApplicableIV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)A. Category-wise Share Holding

Demat Physical Total % of Total Demat Physical Total % of TotalShares Shares

Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Changeduring theyear

A. Promoters &Promoter group(1) Indiana. Individual/HUF 1,21,027 - 1,21,027 0.66 1,21,027 - 1,21,027 0.66 -b. Central Govt. - - - - - - - - -c. State Govt. (s) - - - - - - - - -d. Bodies Corp. 83,34,048 - 83,34,048 45.48 65,02,086 - 65,02,086 35.48 -10.00e. Banks / FI - - - - - - - - -f. Any Other - - - - - - - - - (i) Educational Society 20,000 - 20,000 0.10 20,000 - 20,000 0.10 -Sub-total (A) (1):- 84,75,075 - 84,75,075 46.24 66,43,113 - 66,43,113 36.24 -10.00

Annexure-IFORM NO. MGT-9

EXTRACT OF THE ANNUAL RETURNas on the Financial Year ended on 31st March, 2016[Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1)

of the Companies (Management and Administration) Rules, 2014]


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Demat Physical Total % of Total Demat Physical Total % of TotalShares Shares

Category of Shareholders No. of Shares held at the beginning of the year No. of Shares held at the end of the year % Changeduring theyear

(2) Foreigna) NRIs – Individuals - - - - - - - - -b) Other – Individuals - - - - - - - - -c) Bodies Corp. 4,50,000 - 4,50,000 2.46 4,50,000 - 4,50,000 2.46 -d) Banks / FI - - - - - - - - -e) Any Other…. - - - - - - - - -Sub-total (A) (2):- 4,50,000 - 4,50,000 2.46 4,50,000 - 4,50,000 2.46 -Total shareholding ofPromoter (A) = (A)(1)+(A)(2) 89,25,075 - 89,25,075 48.70 70,93,113 - 70,93,113 38.70 -10.00 Public Shareholding 1. Institutions a) Mutual Funds/UTI - 22,900 22,900 0.12 - 22900 22900 0.12 -b) Banks / FI 300 600 900 - 300 600 900 - -c) Central Govt. - - - - - - - - -d) State Govt(s) - - - - - - - - -e) Venture Capital Funds - - - - - - - - -f) Insurance Companies - - - - - - - - -g) FIIs - 2,100 2,100 0.02 - 2100 2100 0.02 -h) Foreign VentureCapital Funds - - - - - - - - -i) Others (specify) Qualified Foreign Investor - - - - - - - - -Sub-total (B)(1):- 300 25,600 25,900 0.14 300 25,600 25,900 0.14 -2. Non-Institutions a) Bodies Corp. i) Indian 24,32,937 52,720 24,85,657 13.56 45,24,150 52,720 45,76,870 24.97 11.41ii) Overseas - - - - - - - - -b) Individualsi) Individual shareholdersholding nominal sharecapital upto Rs. 1 lakh 36,32,167 17,31,883 53,64,050 29.27 36,60,445 16,99,426 53,59,871 29.25 -0.02ii) Individual shareholdersholding nominal sharecapital in excess of Rs. 1 lakh 11,17,792 18,000 11,35,792 6.20 7,64,734 18,000 7,82,734 4.27 -1.93c) Othersi) Foreign National - - - - - - - - -ii) Non Resident Individuals 97,710 2,76,835 3,74,545 2.04 1,46,684 2,71,635 4,18,319 2.28 0.24iii) Clearing Members 16,381 - 16,381 0.09 70,593 - 70,593 0.39 0.30Sub-total (B)(2):- 72,96,987 20,79,438 93,76,425 51.16 91,66,606 20,41,781 112,08,387 61.16 10.00Total Public Shareholding(B)=(B)(1)+(B)(2) 72,97,287 21,05,038 94,02,325 51.30 91,66,906 20,67,381 112,34,287 61.30 10.00C. Shares held byCustodian for GDRs & ADRs - - - - - - - - -Grand Total (A+B+C) 162,22,362 21,05,038 183,27,400 100.00 162,60,019 20,67,381 183,27,400 100.00 -


19

D. Shareholding Pattern of top ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs):

Sl.No.

Name Shareholding Date Increase/Decrease

inshareholding

Reason Cumulative Shareholdingduring the year

(01-04-15 to 31-03-16)

No. ofShares at

thebeginning

(01-04-15) /end of the

year(31-03-16)

% of totalshares of

theCompany

No. of Shares % of totalshares of the

company

1 CamdenIndustries Ltd.

0

2528462

0.00

13.80

01-Apr-2015

31-Mar-2016

31-Mar-2016

2528462 Purchase 2528462

2528462

13.80

13.80

B. Shareholding of Promoter

Sl.No.

1 Century Textiles and Industries Limited 27,62,154 15.07 - 34,58,654 18.87 - 3.802 Kesoram Industries Limited 25,28,462 13.80 - - - - -13.803 Padmavati Investment Limited 10,94,999 5.97 - 10,94,999 5.97 - -4 Aditya Marketing & Manufacturing Limited 10,69,933 5.84 - 10,69,933 5.84 - -5 Mangalam Cement Limited 6,50,000 3.55 - 6,50,000 3.55 - -6 Devi Investment & Development Inc. 4,50,000 2.46 - 4,50,000 2.46 - -7 Manav investment & Trading Company Limited 2,28,500 1.25 - 2,28,500 1.25 - -8 Smt. Vidula Jalan 1,03,527 0.56 - 1,03,527 0.56 - -9 Prakash Educational Society 20,000 0.11 - 20,000 0.11 - -10 Shri Basant Kumar Birla 7,000 0.04 - 10,500 0.06 - 0.0211 Shri Kumar Mangalam Birla 3,500 0.02 - 3,500 0.02 - -12 Smt. Jayashree Mohta 3,500 0.02 - 3,500 0.02 - -13 Smt. Sarala Devi Birla 3,500 0.02 - - - - -0.02

TOTAL 89,25,075 48.70 - 70,93,113 38.70 - -10.00

Shareholders Name Shareholding at the beginningof the year

(As on 01-04-2015)

Shareholding at the endof the year

(As on 31-03-2016)No. ofShares

% of totalShares of

thecompany

% of SharesPledged

/encumberedto total shares

No. ofShares

% of totalShares of

thecompany

% of SharesPledged

/encumberedto total shares

% changein

shareholdingduring

theyear

C. Change in Promoters’ Shareholding

Sl.No.

Shareholding

No. of Shares atthe beginning

(01-04-15)/end ofthe year

(31-03-16)

% of totalShares of the

company

Date Increase/Decrease in

shareholding


(01-04-15 to 31-03-16)No. of Shares % of total

Shares of thecompany

8925075 48.70 01-Apr-201524-Apr-201501-May-201522- Jan-201629-Jan-201618-Mar-201631-Mar-2016

-35003500268800427700-2528462

TransmissionTransmissionPurchasePurchaseSale

892157589250759193875962157570931137093113

48.7048.7050.1652.5038.7038.707093113 38.70


20

Sl.No.


inshareholding


(01-04-15 to 31-03-16)

No. ofShares at

thebeginning

(01-04-15) /end of the

year(31-03-16)

% of totalshares of

theCompany


company

2 BikewinTrading Pvt. Ltd

520000

420000

01-Apr-2015

14-Aug-2015

31-Mar-2016

-100000 Sale 420000

420000

2.29

2.29

3 Kajal Synthetics &Silk Mills Ltd.

352838

352838

1.93

1.93

01-Apr-2015

31-Mar-2016

0 Nil movement duringthe year

352838 1.93

4 Multi Realtors Pvt.Ltd.

0

250000

0.00

1.36

01-Apr-2015

14-Aug-2015

21-Aug-2015

31-Mar-2016

160690

89310

Purchase

Purchase

160690

250000

250000

0.88

1.36

1.36

5 Payal Nivesh andViniyog Pvt. Ltd.

188022

188022

1.03

1.03

01-Apr-2015

31-Mar-2016


188022 1.036 Fa lgun i N i lesh

Dedhia0

122265

0.00

0.67

01-Apr-2015

22-Jan-2016

29-Jan-2016

12-Feb-2016

19-Feb-2016

26-Feb-2016

04-Mar-2016

11-Mar-2016

18-Mar-2016

25-Mar-2016

31-Mar-2016

31-Mar-2016

9990

13905

16560

44049

23676

1170

22905

9540

9180

4410

Purchase

Purchase

Purchase

Purchase

Purchase

Purchase

Purchase

Purchase

Purchase

Purchase

9990

23895

7335

51384

75060

76230

99135

108675

117855

122265

122265

0.05

0.13

0.04

0.28

0.41

0.42

0.54

0.59

0.64

0.67

0.67

7 Rishra InvestmentsLtd.

112400

112400

0.61

0.61

01-Apr-2015

31-Mar-2016


112400 0.61

2.84

2.29


21

Sl.No.


inshareholding


(01-04-15 to 31-03-16)

No. ofShares at

thebeginning

(01-04-15) /end of the

year(31-03-16)

% of totalshares of

theCompany


company

8 SMIFS CapitalMarkets Ltd.

0

106628

0.00

0.58

01-Apr-2015

31-Mar-2016

31-Mar-2016

106628 Purchase 106628

106628

0.58

0.58

9 RosewoodCommonsalesPvt. Ltd.

70000

70000

0.38

0.38

01-Apr-2015

31-Mar-2016


70000 0.38

10 SarojDeviShreevallabhDamani

58918

58918

0.32

0.32

01-Apr-2015

31-Mar-2016


58918 0.32

E. Shareholding of Directors and Key Managerial Personnel:Sl.

No.Name Shareholding Date Increase/

Decrease in shareholding


(01-04-15 to 31-03-16)No. of

Shares atthe

beginning(01-04-15) /end of the

year(31-03-16)

% of totalShares of

theCompany


company

Shri N.G.Khaitan,Non ExecutiveIndependent Director

1 Nil

Nil

0

0

01-Apr-2015

31-Mar-20160

Nil movementduring the year

Nil 0

Shri PrabirChakravarti, NonExecutiveIndependentDirector

2 Nil

Nil

0

0

01-Apr-2015

31-Mar-20160


Nil 0

Smt. Vidula Jalan,Non ExecutiveIndependent Director

4 103527

103527

0.56

0.56

01-Apr-2015

31-Mar-20160


103527 0.56

Shri Anand Daga,Non ExecutiveIndependent Director

3 Nil

Nil

0

0

01-Apr-2015

31-Mar-20160


Nil 0

Smt. Leena Ghosh,Non ExecutiveIndependentDirector

5 Nil

Nil

0

0

01-Apr-2015

31-Mar-20160


Nil 0

Shri Amit KumarAgarwal, ChiefFinancial Officer

6 Nil

Nil

0

0

01-Apr-2015

31-Mar-20160


Nil 0


22

F. INDEBTEDNESSIndebtedness of the Company including interest outstanding/accrued but not due for payment

TotalIndebtedness

Indebtedness at the beginning ofthe financial year (1st April, 2015)i) Principal Amount - - 12,50,00,000 12,50,00,000.00ii) Interest due but not paid - - 93,14,631 93,14,631.00iii) Interest accrued but not due - - 38,57,596 38,57,596.00Total (i+ii+iii) - - 13,81,72,227 13,81,72,227.00Change in Indebtedness duringthe financial yearAddition - - 1,68,94,131 1,68,94,131.00Reduction - - -13,20,000 -13,20,000.00Net Change - - 1,55,74,131 1,55,74,131.00Indebtedness at the end of thefinancial year (31st March, 2016)i) Principal Amount - - 12,90,00,000 12,90,00,000.00ii) Interest due but not paid - - 2,03,99,358 2,03,99,358.00iii) Interest accrued but not due - - 43,47,000 43,47,000.00Total (i+ii+iii) - - 15,37,46,358 15,37,46,358.00

DepositsUnsecured LoansSecuredLoans excluding

deposits

(in Rs.)

Particulars

Sl.No.

Name Shareholding Date Increase/Decrease in

shareholding


(01-04-15 to 31-03-16)No. of

Shares atthe

beginning(01-04-15) /end of the

year(31-03-16)

% of totalShares of

theCompany


company

Shri Tara ChandSharma, Manager ofthe company (Ceasedas Manager as on31-July-2015)

7 Nil

Nil

0

0

01-Apr-2015

31-July-2016

0 Nil movementduring the year

Nil 0

Miss Namrata Priya,Company Secretary

8 Nil

Nil

0

0

01-Apr-2015

31-Mar-2016


Nil 0

Shri Soumitra KumarDe, Manager of thecompany (Appointedas Manager as on13-Aug-2015)

9 101

101

0.00*

0.00*

13-Aug-2015

31-Mar-2016


101 0.00*

* Below rounding off norms adopted.


23

XI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNELA. Remuneration to Managing Director, Whole-time Directors and/or Manager: (in Rs.)

* Resigned w.e.f. 31st July, 2015$ Appointed Manager of the Company w.e.f. 13th August, 2015

B. Remuneration to other Directors:

Particulars of Remuneration

Shri Tara ChandSharma (*)

Sl. No. Manager(s)

Shri SoumitraKumar De ($)

1 Gross salary(a) Salary as per provisions contained in 65,672 1,26,207

section 17(1) of the Income-tax Act, 1961(b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961 NIL NIL(c) Profits in lieu of salary under NIL NIL

section 17(3) Income-tax Act, 19612 Stock Option NIL NIL3 Sweat Equity NIL NIL4 Commission as % of profit NIL NIL5 Others

Provident Fund 4,800 6,395Total (A) 70,472 1,32,602

C. Remuneration to key managerial personnel other than MD / Manager / WTD (in Rs.)

Particulars of Remunerations Chief FinancialOfficer

Shri Amit Kumar Agarwal

Total

1 Gross Salary (a) Salary as per provisions contained in section 17(1) 5,16,020 3,92,943 9,08,963

of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 Nil Nil Nil (c) Profits in lieu of salary under section Nil Nil Nil

17(3) Income-tax Act, 1961

Sl. No. CompanySecretary

Miss Namrata Priya

Particulars Shri N G Shri Prabir Shri Anand Smt Vidula Smt Leena TotalKhaitan Chakravarti Daga Jalan Ghosh

1. Independent DirectorsFee for attending board / 55,000 65,000 57,500 - 45,000 2,22,500committee meetingsCommission - - - - - -Others, please specify - - - - - -Total (1) 55,000 65,000 57,500 - 45,000 2,22,500

2. Other Non-Executive DirectorsFee for attending board / - - - 60,000 - 60,000committee meetingsCommission - - - - - -Others, please specify - - - - - -Total (2) - - - 60,000 - 60,000Total (B) = (1+2) 55,000 65,000 57,500 60,000 45,000 2,82,500

(in Rs.)


24

Particulars of Remunerations Chief FinancialOfficer Shri AmitKumar Agarwal

Total

2 Stock Option Nil Nil Nil3 Sweat Equity Nil Nil Nil4 Commission as % of profit Nil Nil Nil5 Others Provident Fund 21,600 18,144 39,744

Total 5,37,620 4,11,087 9,48,707

Sl. No.

(in Rs.)

CompanySecretary MissNamrata Priya

XII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:

Sl. No. Section of Companies Act Brief descriptionDetail of penalty/

punishment/Compounding fees

imposed

Authority[RD/NCLT/Court]

Appeal made,If any

A COMPANYPenalty NILPunishmentCompounding

B DIRECTORSPenalty NILPunishmentCompounding

C OTHER OFFICERS IN DEFAULTPenalty NILPunishmentCompounding


25

REPORT ON CORPORATE GOVERNANCEA report on Corporate Governance is set out in compliance with the Corporate Governance requirements as stipulatedin Regulation 34 read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations, 2015 (“the Listing Regulations”).1. COMPANY'S PHILOSOPHY ON CORPORATE GOVERNANCE

Corporate Governance refers to a combination of regulations, procedures and voluntary practices that enablecompanies to maximise stakeholders' value by attracting financial and human capital and efficient performance.

As a responsible corporate citizen, it is the earnest endeavour of the Company to improve its focus on CorporateGovernance by increasing accountability and transparency to its shareholders, bankers, customers and otherstakeholders.

2. BOARD OF DIRECTORSA) Composition as on 31st March, 2016

The Board of Directors of the Company consisted of five (5) members, out of which four (4) are Non-ExecutiveIndependent Directors. The Non-Executive Directors are eminent professionals with experience in finance,law and public enterprises.The composition of the Board is in conformity with Regulation 17 of the Listing Regulations.

B) Other Directorships/Committee memberships held as on 31st March, 2016:

*Excludes Directorships/Chairmanships held in Mangalam Timber Products Ltd., Private Limited Companies,Foreign Companies and Companies under section 8 of the Companies Act, 2013 (“the Act”).**Only Memberships/Chairmanships of Audit Committee and Stakeholders’ Relationship Committee have beenconsidered for this purpose in terms of Regulation 26(1)(b) of the Listing Regulations.

C) Board Meetings held during the year:During the financial year ended 31st March, 2016, four (4) Board Meetings were held – on 9th May 2015, 13th August2015, 14th November 2015 and 11th February 2016.

D) Attendance of Directors at Board Meetings and last Annual General Meeting :The attendance of each Director at Board Meetings and at the Thirty-first Annual General Meeting (“AGM”) held on11th September, 2015 was as follows -

Sl.No.

Name of Directors Category of Directors No of Directorship held in

other companies*

1. Shri N G Khaitan Independent Non-Executive 6 5 2

2. Shri Prabir Chakravarti Independent Non-Executive 9 5 Nil

3. Shri Anand Daga Independent Non-Executive Nil Nil Nil

4. Smt. Vidula Jalan Promoter Non-Executive 2 Nil Nil

5. Smt. Leena Ghosh Independent Non-Executive 1 Nil Nil

Committee Membershipheld in other Companies**

As Chairman*As Member*

Annexure-II

Name of Director(s) Board MeetingsAttended

Last AGM Attended Shareholding in the company as on31.03.2016

Shri N G Khaitan 4 No NilShri Prabir Chakravarti 4 Yes NilShri Anand Daga 3 No NilSmt Vidula Jalan 4 No 1,03,527Smt Leena Ghosh 2 No Nil


26

E) Particulars of Directors retiring by rotation and seeking re-appointment have been given in the Notice conveningthe 32nd Annual General Meeting and Explanatory Statement, forming part of Annual Report.

F) Disclosures of relationships between Directors:None of the Directors are related to each other as per the provisions of the Act.

G) Meeting of the Independent DirectorsAs per the stipulations in Section VII of the Code for Independent Directors in Schedule IV of the Act and as perthe Regulation 25(3) of the Listing Regulations,a separate meeting of Independent Directors was held on 11thFebruary, 2016.

H) Familiarisation programme for Independent DirectorsThe familiarisation programme for independent Directors is available on the website of the Company under theweblink:http://www.mangalamtimber.com/images/Familiarisation-Programme-for-Independent-Directors.pdf

3. AUDIT COMMITTEEA) Terms of Reference

The Audit Committee has been mandated with terms of reference as specified in Regulation 18 read with Part Cof Schedule II the Listing Regulations. The terms of reference also conforms to the requirement of section 177of the Act.

I. Role of Audit Committee:1. oversight of your Company’s financial reporting process and the disclosure of its financial information to

ensure that the financial statement is correct, sufficient and credible;2. recommendation for appointment, remuneration and terms of appointment of auditors of your Company;3. approval of payment to statutory auditors for any other services rendered by the statutory auditors;4. reviewing, with the management, the annual financial statements and auditor's report thereon before

submission to the board for approval, with particular reference to:a) matters required to be included in the director’s responsibility statement to be included in the board’s

report in terms of clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013;b) changes, if any, in accounting policies and practices and reasons for the same;c) major accounting entries involving estimates based on the exercise of judgment by management;d) significant adjustments made in the financial statements arising out of audit findings;e) compliance with listing and other legal requirements relating to financial statements;f) disclosure of any related party transactions;g) modified opinion(s) in the draft audit report;

5. reviewing, with the management, the quarterly financial statements before submission to the board for approval;6. reviewing, with the management, the statement of uses / application of funds raised through an issue (public

issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those statedin the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring theutilisation of proceeds of a public or rights issue, and making appropriate recommendations to the board to takeup steps in this matter;

7. reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process;8. approval or any subsequent modification of transactions of your Company with related parties;9. scrutiny of inter-corporate loans and investments;10. valuation of undertakings or assets of your Company, wherever it is necessary;11. evaluation of internal financial controls and risk management systems;


27

Member No of meetings attended

Shri N G Khaitan - Chairman 4

Shri Prabir Chakravarti 4

Smt Leena Ghosh 2

The Company Secretary acts as the Secretary to the Audit Committee.

12. reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal controlsystems;

13. reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department,staffing and seniority of the official heading the department, reporting structure coverage and frequency ofinternal audit;

14. discussion with internal auditors of any significant findings and follow up there on;

15. reviewing the findings of any internal investigations by the internal auditors into matters where there is suspectedfraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to theboard;

16. discussion with statutory auditors before the audit commences, about the nature and scope of audit as well aspost-audit discussion to ascertain any area of concern;

17. to look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders(in case of non-payment of declared dividends) and creditors;

18. to review the functioning of the whistle blower mechanism;

19. approval of appointment of chief financial officer after assessing the qualifications, experience and background,etc. of the candidate;

20. Carrying out any other function as is mentioned in the terms of reference of the audit committee.

II. The audit committee review’s the following information:1. management discussion and analysis of financial condition and results of operations;2. statement of significant related party transactions (as defined by the audit committee), submitted by

management;3. management letters / letters of internal control weaknesses issued by the statutory auditors;4. internal audit reports relating to internal control weaknesses;5. the appointment, removal and terms of remuneration of the chief internal auditor shall be subject to

review by the audit committee; and6. statement of deviations:a. quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to

stock exchange(s) in terms of Regulation 32(1).b. annual statement of funds utilized for purposes other than those stated in the offer

document/prospectus/notice in terms of Regulation 32(7).B) Composition, Name of Members and Chairperson

As on 31st March, 2016 the Audit Committee comprises three (3) members, all of whom were IndependentNon-Executive Directors. Shri N G Khaitan is the Chairman of the Audit Committee. All the members of theAudit Committee are qualified and having insight to interpret and understand financial statements.The composition of the Committee and the attendance of each Member at Meetings were as follows:


28

C) Meetings held during the yearDuring the financial year ended 31st March, 2016, four (4) meetings were held - on 9th May 2015, 13thAugust 2015, 14th November 2015 and 11th February 2016.At the invitation of the Committee, Internal Auditors, Statutory Auditors, Chief Financial Officer and theCompany Secretary who is acting as Secretary to the Audit Committee also attends the Audit Committeemeetings as and when required to respond to the queries raised at the Committee Meetings.

4. NOMINATION AND REMUNERATION COMMITTEEA) Terms of Reference

The terms of reference of the Nomination and Remuneration Committee traverses the areas covered underRegulation 19(4) & Part D of Schedule II of the Listing Regulations and Section 178(2) & (3) of the Act.Role of Nomination and Remuneration Committee is as follows:1. formulation of the criteria for determining qualifications, positive attributes and independence of a

director and recommend to the board of directors a policy relating to, the remuneration of the directors,key managerial personnel and other employees;

2. formulation of criteria for evaluation of performance of independent directors and the board of directors;3. devising a policy on diversity of board of directors;4. identifying persons who are qualified to become directors and who may be appointed in senior

management in accordance with the criteria laid down, and recommend to the board of directors theirappointment and removal.

5. whether to extend or continue the term of appointment of the independent director, on the basis ofthe report of performance evaluation of independent directors.

B) Composition, Name of Members and ChairpersonAs on 31st March, 2016, the Nomination and Remuneration Committee comprises three (3) members, allof whom are Independent Non-executive Directors.The composition of the Committee and the attendance of each Member at Meetings were as follows:

Member Category No of meetings attended

Shri N G Khaitan Member 1

Shri Prabir Chakravarti Member 1

Smt Leena Ghosh Member 1

The Chairperson for the Committee meeting is elected in accordance with Article 105(2) of Article ofAssociation of the Company.

C) Meetings held during the yearDuring the year ended 31st March, 2016 one (1) meeting was held on 13th August, 2015.The CompanySecretary acts as the Secretary to the Committee.

D) Performance evaluation of Independent DirectorsDetails of performance evaluation of Independent Directors as required under Regulation 17 (10) the ListingRegulations is included in the Directors Report, forming part of the Annual Report.

5. REMUNERATION POLICY AND REMUNERATION OF DIRECTORSThe Nomination and Remuneration Policy of the Company is formulated in accordance with the provisions ofSection 178(4) of the Act and Regulation 19(4) read with Part D of Schedule II of the Listing Regulations. ThePolicy is attached as Annexure IV to the Directors Report. The performance of individual Board Members wassubject to peer evaluation during the Financial Year based upon, amongst other parameters attendance, contributionto Meetings, participation and exercise of independent judgment.


29

Name of the DirectorsAllowances,

Perquisites &Retirement Benefits

SittingFees

TotalSalary

(Rs.) (Rs.)

Commission

Shri N G Khaitan - - - 55,000 55,000

Shri PrabirChakravarti - - - 65,000 65,000

Shri Anand Daga - - - 57,500 57,500

Smt Vidula Jalan - - - 60,000 60,000

Smt Leena Ghosh - - - 45,000 45,000

(Rs.) (Rs.)

The above remuneration is within the ceiling prescribed under the applicable provisions of the Act.Apart from the above, no other pecuniary relationships (including stock options) or transactions vis-a-vis theCompany exists with any DirectorB) Criteria for making payment to Non-Executive Directors:

In terms of the Listing Regulations, the Company has formed criteria for making payment to Non-Executive Directorswhich is also available on the Company’s website http://www.mangalamtimber.com/images/pdf/Remuneration-Criteria-for-Non-Executive-Directors.pdf

6. STAKEHOLDERS’ RELATIONSHIP COMMITTEEA) Terms of Reference

The terms of reference of the Committee cover all the areas as mentioned under Regulation 20 read with Part D of Schedule II of the Listing Regulations and Section 178(6) of the Companies Act, 2013.Role of Stakeholder’s Relationship Committee is as follows:a) To review all complaints recorded in SCORES of SEBI and replies made to the same by the Company

Secretary.b) To receive report on all complaints recorded in SCORES of the Registrars and Share Transfer Agents and

note the corrective actions taken by the Registrars.c) To take action on all grievances and complaints lodged by stock exchanges, shareholder associations

and other bodies.d) To review all instances where shareholding or other matters are disputed or contested or pending in

various legal forums.e) To review all grievances of other Stakeholders of the Company given in their individual capacity.f) Over view of activities relating to share maintenance and related Work.

B) Composition, Name of members and ChairpersonAs on 31st March, 2016 the Stakeholders Relationship Committee comprises three (3) Directors.The composition of the Committee and the attendance of each Member at Meetings were as follows:

Member Category No of meetings attended


Shri Anand Daga Member 1

Smt Leena Ghosh Member Nil

A) Details of Remuneration and Meeting Fees paid to the Directors during the financial year ended 31stMarch, 2016


30

The Chairperson for the Committee meeting is elected in accordance with Article 105(2) of Article ofAssociation of the Company.

C) Meetings held during the yearDuring the year ended 31st March, 2016, one(1) meeting of the committee was held on 29th March, 2016.Miss Namrata Priya, Company Secretary of the Company has been designated as Compliance Officer.

D) Share Transfer SystemThe Share Transfer Committee approves cases of transfer and transmission, issue of share in exchange forsub-divided, consolidated, defaced, etc., as approved by the authorised persons and issue of duplicate sharecertificates. It also notes and takes on record the transfer / transmission / transposition of shares andconsolidation / splitting of folios, issue of share certificates. The Share Transfer Committee also notes thedealings in Company’s Shares by the designated employees under the Company’s Code of Conduct to Regulate,Monitor and Report Trading by Insiders. During the year ended 31st March, 2016, 7 (seven) meetings of theShare Transfer Committee were held.

E) Shareholder complaints received and redressed during the Financial Year 2015-16:

Nature of Grievances

Non-receipt of Dividend - - - - - -warrant(s)

Non-receipt of Share - - - - - -Certificate(s) / after transfer/demat

Non-receipt of Duplicate - - - - - -Share certificate(s)

Non-receipt of - - - - - -Annual Report(s)

Total - - - - - -

Complaint received from

InvestorsDirectly

Stock Exchanges& SEBI

“SCORES”

ROC

Total complaintsreceivedduring

2015-16

Totalredressed

No. ofgrievances

outstanding ason 31st March,

2016

7. RISK MANAGEMENT COMMITTEEA) Constitution, Terms and reference

The Board of Directors at their meeting held on 14th May, 2014, had constituted a Risk ManagementCommittee in compliance with the requirement of the Clause 49 of the Listing Agreement and shall interalia operate and cover areas as may be prescribed under the Listing Agreement, Companies Act and otherapplicable Regulations from time to time.Further, the Board of Directors in its meeting held on 11th February, 2016 dissolved the said committeeprimarily for the reason that the company under the Listing Regulations was not mandatorily required tohave Risk Management Committee and decided that henceforth all the issues pertaining to risk managementbe looked into by Audit Committee.

B) Composition and Name of membersThe composition of the Committee and the attendance of each Member at Meetings were as follows:


31

Member Category No of meeting attended


Smt Vidula Jalan Member 1

Shri Yaswant Mishra* Member Nil

* Shri Yaswant Mishra is the President of the Company.C) Meetings held during the year

During the year ended 31st March, 2016, one (1) meeting of the committee was held on 11th February,2016. The Company Secretary acts as Secretary to the Committee

8. COMPLIANCE OFFICERMiss. Namrata Priya, Company Secretary, is the Compliance Officer under clause 6 of the Listing Regulations andother applicable SEBI Regulations and Rules.

9. SUBSIDIARY COMPANYThe Company had no subsidiary as on 31st March, 2016.

10. GENERAL BODY MEETINGSA) Particulars of last three Annual General Meetings

31st 2014-15 Nabarangpur, Odisha 11th September, 2015 10AM30th 2013-14 Nabarangpur, Odisha 16th August, 2014 10 AM29th 2012-13 Nabarangpur, Odisha 17th August, 2013 10 AM

AGM Year Ended Venue Date Time

B) Particulars of Special Resolutions passed at the last three Annual General Meetings

31st 31st March, 2015 None 11th September, 2015 10 AM30th 31st March, 2014 Appointment of Shri Tara 16th August, 2014 10 AM

Chand Sharma asManager of the Company.

29th 31st March, 2013 None 17th August, 2013 10 AM

AGM Year Ended Particulars ofSpecial Resolution

Date Time

11. DISCLOSURESA) The Company has in place a Related Party Transaction Policy for determining the materiality of related party

transactions and also on the dealings with related parties. This Policy is available at the Company’s websiteunder the weblink http://www.mangalamtimber.com/images/Related-Party-Transaction-Policy.pdf

B) During the year there were no transactions of material nature with related parties that had potential conflictwith the interests of the Company.Details of all related party transactions form a part of the accounts as required under Accounting Standard18 as notified by the Companies (Accounting Standards) Rules, 2006 and the same are given in Note 2.25(6) to the Financial Statements.The prior approval of the Audit Committee is taken, wherever required, on a quarterly basis for proposedrelated party transactions to be entered in the forthcoming quarter as well as the details of all related partytransactions actually entered into in the preceding quarter.

C) During preparation of financial statements during the period under review, no accounting treatment whichwas different from that prescribed in the Accounting Standards was followed.


32

A) Quarterly ResultsNewspapers published in

The Financial Express/Business Standard inEnglish (All India Edition) and Dharitry/Sambad/Odisha Bhaskar in Oriya (Regional)

B) Whether the website also displaysofficial news releases and presentationsto institutional investors/analysts

No presentation has been made to institutionalinvestors/analysts.Audited/Unaudited Financial Statements andunderlying Reports including official news releasesare displayed in the Company’s website.

C) Whether Management Discussion &Analysis Report is a part of AnnualReport

The Management Discussion and Analysis asreviewed is a part of this annual report

www.mangalamtimber.comWebsite where displayed

D) The Company has complied with the requirements of regulatory authorities on capital markets and nopenalties/strictures have been imposed against it in the last three years.

E) The Company has in place a mechanism to inform Board Members about risk assessment and mitigationplans and periodical reviews to ensure that critical risks are controlled by the executive management. RiskManagement Committee has been dissolved during the year since this is not mandated for the Companyunder the Listing Regulations and it has been voluntarily decided that henceforth all the issues pertainingto risk management be looked into by Audit Committee.

F) There were no material financial and commercial transactions where senior management of the Companyhad personal interest that may have a potential conflict with the interest of the Company at large.

G) The Company has adopted Whistle Blower Policy for Directors and employees which is available at thewebsite of the Company under weblink http://www.mangalamtimber.com/images/Whistle-Blower-Policy.pdf.No personnel has been denied access to the Audit Committee.

H) Independent Directors have confirmed to the Company that they meet the criteria of ‘Independence’ asstipulated under section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.

I) The status of compliance with non-mandatory recommendations of the Regulation 27(1)read with Part Eof Schedule II of the Listing Regulations is provided below:

a) The Board: An office for the use of the Chairperson is made available whenever required.

b) Shareholders’ Rights: As the quarterly and half yearly financial performance are published in thenewspapers and are also posted on the Company’s website, the same are not being sent to theshareholders. However, the Company furnishes the financial results on receipt of request from theshareholders

c) Audit Qualifications: The Company’s financial statement for the year 2015-16 does not contain anyaudit qualification.

d) Separate posts of Chairman and CEO: At present there is no separate post of Chairman but the Boardof Directors appoints a Chairman among themselves pursuant to the Articles of Association of theCompany and the Companies Act, 2013. Further the Company has a Manager in terms with Regulation2(e) of the Listing Regulations.

e) Reporting of Internal Auditor: Internal Auditor Team reports to the Audit Committee.

12. MEANS OF COMMUNICATION


33

C) Book Closure DateThe period of book closure is from Tuesday, the 20th day of September, 2016 to Monday, the 26th day ofSeptember, 2016 both days inclusive.

D) Dividend Payment DateNo dividend has been proposed for the year ended 31st March, 2016.

E) Listing on Stock ExchangesThe equity shares of the Company are listed at the following Stock Exchanges:1. BSE Limited (BSE)

Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 0012. The National Stock Exchange of India Limited (NSE)

Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051F) Listing Fees to Stock Exchanges

Annual Listing Fees for the year 2016-17 has been paid by the Company to BSE Limited and National StockExchange of India Limited.

G) International Securities Identification Number (ISIN) of the CompanyThe International Securities Identification Number (ISIN) of the Company's equity shares in the dematerializedmode, as allotted by NSDL and CDSL is INE805B01012.

H) Stock CodeThe Company's scrip codes for its equity shares at Stock Exchange(s) are as follows:

13. SHAREHOLDER INFORMATIONA) Annual General Meeting

The 32nd Annual General Meeting will be held at 10.00 AM on Monday, the 26th day of September, 2016at Village-Kusumi, P.O. & Dist. – Nabarangpur 764059, Odisha.

B) Financial YearThe Financial Year of the Company is 1st April to 31st March. The Financial Calendar for 2016-2017 is:

Sl No. Stock Exchange Scrip Code1. BSE Limited 5160072. National Stock Exchange of India Limited MANGTIMBER

Approval of Board Meeting Date

Unaudited Results for 1st quarter ended 30th June, 2016 On or before 14th August, 2016

Unaudited Results for 2nd quarter ended 30th September, 2016 On or before 14th November, 2016

Unaudited Results for 3rd quarter ended 31st December, 2016 On or before 14th February, 2017

Audited Results for financial year ended 31st March, 2016 On or before 30th May, 2017


34

I) Market Price Data (in Rs.)

MONTH BOMBAY STOCK EXCHANGE NATIONAL STOCK EXCHANGE

HIGH LOW HIGH LOW

April, 2015 12.80 8.91 12.40 8.20

May, 2015 10.95 8.91 11.90 8.25

June, 2015 10.10 7.77 10.70 7.55

July, 2015 11.76 8.61 11.65 8.35

August, 2015 17.53 9.98 17.85 10.00

September, 2015 10.98 9.02 10.90 8.50

October, 2015 11.85 9.59 11.75 9.60

November, 2015 12.89 10.30 12.50 10.50

December,2015 16.14 11.04 18.50 11.25

January, 2016 26.25 14.35 26.30 13.55

February, 2016 29.50 19.20 29.40 17.00

March, 2016 19.15 15.80 19.10 16.10

J) Performance in comparison to broad based indices such as BSE SENSEX and NSE NIFTY

BSE

Sens

ex C

losin

g Pr

ice

MTP

L Sh

are

Clos

ing

Pric

e

30000

28000

26000

24000

22000

25

20

15

10

5

0

BSE Sensex Vs MTPLBSE Sensex MTPL Share Price

Apr-15

May-15

Jun-15Jul-1

5Aug-15

Sep-15Oct-

15Nov-1

5Dec-1

5Jan-16

Feb-16Mar-1

6


35

CATEGORY NO. OF SHARE HOLDERS % OF SHARE HOLDERS NO. OF SHARES % OF SHARES

(a) Shareholding of Promoterand 11 0.05 7093113 38.70Promoter Group

(b) Public Shareholding: UTI 1 0.00* 11200 0.06Mutual Fund 4 0.02 11700 0.06FI(s) 1 0.00* 200 0.00*Banks 3 0.01 700 0.00*FII(s) 1 0.00* 2100 0.01Corporate 313 1.50 4647463 25.36Individuals 19167 91.78 6142605 33.53NRI / OCB 1386 6.64 418319 2.28Total 20887 100.00 18327400 100.00

K) Registrar and Share Transfer AgentM/s C B Management Services (P) Limited(Unit: Mangalam Timber Products Limited)P-22, Bondel Road, Kolkata - 700 019Phone: +91 33 2280 6692-94 / 40116700Facsimile: +91 33 2287 0263E-mail: [email protected]: www.cbmsl.com

L) Investor GrievancesThe Company has designated an exclusive e-mail id viz. [email protected] to enable the investorsto register their grievances, if any.

M) Share Transfer SystemShare transfers request of Equity Shares in the physical form lodged with the Secretarial Department of theCompany/Registrar & Share Transfer Agent are processed within a period of 15 days from the date of receipt,if the documents are clear in all respects. The Share TransferCommittee meets as and when required to noteand approve all transfer request. Also refer SN 6(D) above.In case of Share transfers request of Equity Shares in the demat form, the transfers are processed by NSDL/CDSL through the respective Depository Participants.

N) Shareholding PatternPattern of shareholding by ownership as on 31st March, 2016

*Below rounding off norms adopted.

NSE

Nifty

Clo

sing

Price

MTP

L Sha

re C

losin

g Pr

ice

Apr-15

May-15

Jun-15Jul-1

5Aug-15

Sep-15Oct-

15Nov-1

5Dec-1

5Jan-16

Feb-16Mar-1

6

NSE Nifty Vs MTPL9000

8500

8000

7500

7000

6500

6000

25

20

15

10

5

0

NSE Nifty MTPL Share Price


36

O) Distribution of ShareholdingDistribution of shareholding as on 31st March, 2016is as follows:

Range Shareholders SharesNo. of Shares Number % to total holders Numbers % to total capital

1 500 18965 90.80 3015372 16.46

501 1,000 1107 5.30 933617 5.09

1,001 2,000 402 1.92 636293 3.47

2,001 3,000 153 0.73 391658 2.14

3,001 4,000 64 0.31 231081 1.26

4,001 5,000 52 0.25 251806 1.37

5,001 10,000 81 0.39 583039 3.18

10,001 ABOVE 63 0.30 12284534 67.03

TOTAL 20887 100.00 18327400 100.00

P) As stipulated by SEBI, a qualified Practising Chartered Accountant carries out an audit to reconcile the totaladmitted capital with National Securities Depository Limited (NSDL) and Central Depository Services(India)Limited (CDSL) and the total issued and listed capital. This audit is carried out every quarter and thereport thereon is submitted to the Stock Exchanges and to the Board of Directors. The audit confirms thatthe total listed and paid-up capital is in agreement with the aggregate of the total number of shares indematerialized form and in physical form.

Q) Dematerialization of Shares and LiquidityThe Company’s Equity Shares are compulsorily traded in dematerialised form. 1,62,60,019 Equity Shares ofthe Company representing 88.72% of total Equity Shares issued were held in dematerialised form as on 31stMarch, 2016. Investors have an option to dematerialise their Equity Shares either with National SecuritiesDepository Limited or Central Depository Services (India) Limited.

R) Depositories addresses for correspondence

S) Outstanding GDR/Warrants and Convertible Bonds, Conversion Dates and likely impact on EquityThe Company had no outstanding GDRs/ADRs/Warrants or any Convertible instruments.

T) Plant LocationsMangalam Timber Products LimitedVillage: Kusumi,P.O. & District: Nabarangpur -764 059 OdishaPhone No: +91 6858 222148 / 222142 / 222053Fax: +91 6858 222042CIN: LO2001OR1982PLC001101Email: [email protected]

National Securities Depository Ltd.4th Floor, A Wing, Trade World, Kamala Mills CompoundSenapati Bapat Marg, Lower Parel, Mumbai 400 013Telephone : +91 22 2499 4200Fax : +91 22 24972993E-mail : [email protected] : www.nsdl.co.in

Central Depository Services (India) Ltd.Phiroze Jeejeebhoy Towers17th Floor, Dalal Street,Mumbai 400 023Telephone: +91 22 2272 3333/3224Fax : +91 22 2272 3199Website : www.cdslindia.com


37



Directors

U) Address for correspondence with the CompanyMangalam Timber Products Limited“Birla Building”, 10th Floor,9/1, R.N.Mukherjee Road,Kolkata - 700 001Phone No: +91 33 2243 8706 / 07 / 8857Fax: +91 33 2243 8709Email: [email protected]

V) Insider TradingPursuant to the requirements of the Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations, 2015, the Company has implemented a Code of Conduct to Regulate, Monitor and ReportTrading by Insiders. Miss Namrata Priya, Company Secretary, is the Compliance Officer. This Code of Conductis applicable to all the Directors, Connected Persons, Designated Employees and Designated Persons of theCompany.

14. CODE OF CONDUCTThe Code of Conduct applicable to the Board Members and Senior Management Personnel of the Company isavailable at the Company’s website under the weblink http://www.mangalamtimber.com/images/code-of-conduct.pdf.Each Board Member and Senior Management staff have declared their compliance with the Code of Conduct asat 31st March, 2016. There were no materially significant transactions during the financial year with BoardMembers and Senior Management, including their relatives that had or could have had a potential conflict ofinterest with the Company.Annual declaration by the Manager of the Company that all Board Members and Senior Management Personnelhave duly complied with the Code of Conduct for the financial year ended 31st March, 2016 forms part of theAnnual report.

15. CEO /CFO CERTIFICATIONThe Manager of the Company and Chief Financial Officer give annual certification on financial reporting andinternal controls to the Board for the financial year ended 31st March, 2016 in terms of Regulation 17(8) readwith Part B of Schedule II of the Listing Regulations. The certificate is published in this Annual Report.

16. COMPLIANCE CERTIFICATE FROM AUDITORThe Company has obtained a certificate from the Auditor of the Company confirming that it is in compliancewiththe conditions of Corporate Governance as stipulated inthe Listing Regulations.


38

CEO AND CFO CERTIFICATION[Pursuant to Regulation17(8) and Part B of Schedule II of SEBI Listing Regulations, 2015]

DECLARATION ON COMPLIANCE OF THE COMPANY’S CODE OF CONDUCTThis is to confirm that the code of conduct for all board members and senior management personnel of the Companyhas been circulated to the concerned persons of the Company and the Company has received affirmation of compliancewith the code of conduct from the members of the Board of Directors and the Senior Management Personnel of theCompany.

Soumitra Kumar DeManager


To,The Board of Directors,Mangalam Timber Products Ltd.

We, to the best of our knowledge and belief, certify that:

1. We have reviewed the financial statements and the cash flow statement for the year ended 31st March, 2016 andthat of the best of our knowledge and belief;

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statementsthat might be misleading;

(ii) these statements together present a true and fair view of the Company’s affairs and are in compliance withexisting accounting standards, applicable laws and regulations.

2. There are, to the best of our knowledge and belief, no transactions entered into by the Company during the yearwhich are fraudulent, illegal or violating the Company’s code of conduct.

3. We accept responsibility for establishing and maintaining internal controls for financial reporting and have evaluatedthe effectiveness of internal control systems of the Company and have disclosed to the auditors and the auditcommittee, deficiencies in the design or operation of internal controls, pertaining to financial reporting, if any, ofwhich we are aware and the steps we have taken, propose to take to rectify these deficiencies.

4. We have indicated to the auditors and the audit committee that;

a) there are no significant changes in internal controls for financial reporting, during the year;

b) there are no significant changes in accounting policies during the year and hence nothing in this regards havebeen disclosed in the Notes to the Financial Statements, and;

c) there are no instances of significant fraud of which we have become aware and the involvement there in, ifany, of the management or an employee having a significant role in the Company’s internal control system overfinancial reporting.

Soumitra Kumar DeManager

Amit Kumar AgarwalChief Financial Officer



39

AUDITORS’ CERTIFICATE ON COMPLIANCE WITH THE CONDITIONS OF CORPORATE GOVERNANCEUNDER SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

To

The Members of Mangalam Timber Products Limited

We have reviewed the compliance of conditions of corporate governance by Mangalam Timber Products Limited (theCompany) for the year ended on 31st March, 2016, as stipulated in Chapter IV of the SEBI (Listing Obligations andDisclosure Requirements) Regulations, 2015.

The compliance of conditions of corporate governance is the responsibility of the management. Our examination waslimited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the complianceof the conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financialstatements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that theCompany has complied with the conditions of Corporate Governance as stipulated in Chapter IV of the SEBI (ListingObligations and Disclosure Requirements) Regulations, 2015.

On the basis of records maintained by the company, we state that as on 31st March, 2016 there was no investorgrievance remaining pending for a period exceeding one month against the company.

We further state that such compliance is neither an assurance as to future viability of the Company nor the efficiencyor effectiveness with which the management has conducted the affairs of the Company.

For S M DAGA & CO.Chartered AccountantsFirm Registration Number: 303119E

J M DagaPartnerMembership No. 052489



40

Annexure-III

POLICY RELATING TO THE REMUNERATION FOR THE MANAGER, NON EXECUTIVE/INDEPENDENTDIRECTOR, KMP AND SENIOR MANAGEMENT PERSONNEL

Extract From Nomination and Remuneration Policy:

The remuneration / compensation / commission etc. tothe Manager, Non-Executive / Independent Director, KMPand Senior Management Personnel will be determinedby the Committee and recommended to the Board forapproval. The remuneration / compensation / commissionetc. shall be subject to the prior/post approval of theshareholders of the Company and Central Government,wherever required.

a. The remuneration and commission to be paid tothe Manager shall be in accordance with thepercentage / slabs / conditions as per the provisionsof the Companies Act, 2013, and the Rules madethereunder.

b. Increments to the existing remuneration /compensation structure linked to performance,should be clear and meet appropriate performancebenchmarks and may be recommended by theCommittee to the Board which should be withinthe slabs approved by the Shareholders in the caseof Manager.

c. The Committee does not propose to fix the actualamounts of remuneration that may be payable toeach individual Key Managerial Personnel or SeniorManagement Personnel . However, themanagement, whilst fixing the remuneration of anysuch Key Personnel must consider the following:

1. The Industry practice for the same level ofemployment/office.

2. Past performance/seniority of the concernedappointee.

3. The nature of duties and responsibilities castupon such person by reason of his holding thatoffice.

4. The remuneration should be such that itprovides adequate incentive to the person togive his best to the Company and feel essenceof high satisfaction with his employment.

5. The perquisites to be given to Manager, KMP& Senior Management Personnel will be as perindustry practice and as may be recommendedby the Committee to the Board.

Remuneration to Manager, KMP and Senior ManagementPersonnel:

The Manager/ KMP and Senior Management Personnelshall be eligible for a monthly remuneration as may beapproved by the Board on the recommendation of theCommittee. The break-up of the pay scale and quantumof perquisites including, employer’s contribution to P.F,pension scheme, medical expenses, club fees etc. shallbe decided and approved by the Board on therecommendation of the Committee and approved by theshareholders and Central Government, wherever required,reflecting the short and long term performance objectivesappropriate to the working of the Company and its goals.

Remuneration to Non- Executive / Independent Director:

n Sitting Fees:

The Non- Executive / Independent Director may receiveremuneration by way of fees for attending meetings ofBoard or Committees thereof as may be recommendedby the Committee and approved by the Board providedthat the amount of such fees shall not exceed amountprescribed in this behalf by the Central Government fromtime to time. So far as the Sitting Fees are concerned, itshould be suitably modified in due course keeping in mindthe time and work involved for each of the Committeesand the industry practice.


41

Annexure-IVForm No. MR-3

SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED 31st March, 2016

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies(Appointment and Remuneration Personnel) Rules, 2014]

I have conducted the Secretarial Audit of the complianceof applicable statutory provisions and the adherence togood corporate practices by MANGALAM TIMBERPRODUCTS LIMITED. Secretarial Audit was conducted ina manner that provided me a reasonable basis forevaluating the corporate conducts/statutory compliancesand expressing my opinion thereon.Based on my verification of the MANGALAM TIMBERPRODUCTS LIMITED books, papers, minute books, formsand returns filed and other records maintained by theCompany and also the information provided by theCompany, its officers, agents and authorizedrepresentatives during the conduct of secretarial audit,I hereby report that in my opinion, the Company has,during the audit period covering the financial year endedon 31st March, 2016 complied with the statutoryprovisions listed hereunder and also that the Companyhas proper Board-processes and compliance-mechanismin place to the extent, in the manner and subject to thereporting made hereinafter:I have examined the books, papers, minute books, formsand returns filed and other records maintained byMANGALAM TIMBER PRODUCTS LIMITED for the financialyear ended on 31stMarch, 2016 according to the provisionsof:i. The Companies Act, 2013 (the Act) and the rules made

thereunder;ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’)

and the rules made thereunder;iii. The Depositories Act, 1996 and the Regulations and

Bye-laws framed thereunder;iv. Foreign Exchange Management Act, 1999 and the

rules and regulations made thereunder to the extentof Foreign Direct Investment, Overseas DirectInvestment and External Commercial Borrowings;(there were no FDIs, ODI or ECB transaction in theCompany during the period under audit)

v. The following Regulations and Guidelines prescribedunder the Securities and Exchange Board of India Act,1992 (“SEBI Act”):-

a) The Securities and Exchange Board of India(Substantial Acquisition of Shares and Takeovers)Regulations, 2011;

b) The Securities and Exchange Board of India(Prohibition of Insider Trading) Regulations, 2015;

c) The Securities and Exchange Board of India (Issueof Capital and Disclosure Requirements)Regulations, 2009; (Not applicable to theCompany during the period under audit)

d) The Securities and Exchange Board of India(Employee Stock Option Scheme and EmployeeStock Purchase Scheme) Guidelines, 1999; (Notapplicable to the Company during the periodunder audit)

e) The Securities and Exchange Board of India (Issueand Listing of Debt Securities) Regulations, 2008;(Not applicable to the Company during the periodunder audit)

f) The Securities and Exchange Board of India(Registrars to an Issue and Share Transfer Agents)Regulations, 1993 regarding the Companies Actand dealing with client;

g) The Securities and Exchange Board of India(Delisting of Equity Shares) Regulations, 2009 (Notapplicable to the Company during the periodunder audit); and

h) The Securities and Exchange Board of India(Buyback of Securities) Regulations, 1998 (Notapplicable to the Company during the periodunder audit);

I have also examined compliance with the applicableclauses of the following:i. Secretarial Standards issued by The Institute of

Company Secretaries of India (effective July 2015).ii. The Listing Agreements entered into by the Company

with BSE Limited and National Stock Exchange of IndiaLimited.

During the period under review the Company has compliedwith the provisions of the Act, Rules, Regulations,Guidelines, Standards, etc. mentioned above.

To,The MembersMANGALAM TIMBER PRODUCTS LIMITEDVillage - Kusumi, P.O. & Dist - NabarangpurOdisha - 764 059


42

I further report:1. The Board of Directors of the Company is duly

constituted with proper balance of Non-ExecutiveDirectors and Independent Directors. The changes inthe composition of the Board of Directors that tookplace during the period under review were carriedout in compliance with the provisions of the Act.

2. Adequate notice is given to all directors to schedulethe Board Meetings, agenda and detailed notes onagenda were sent at least seven days in advance, anda system exists for seeking and obtaining furtherinformation and clarifications on the agenda itemsbefore the meeting and for meaningful participationat the meeting.

3. Majority decision is carried through while thedissenting members’ views are captured and recordedas part of the minutes.

I further report that there are adequate systems andprocesses in the Company commensurate with thesize and operations of the Company to monitor andensure compliance with applicable laws, rules,regulations and guidelines.

Arup Kumar RoyPracticing Company Secretary.

ACS : 6784CP Number: 9597


My report of even date is to be read along with this letter.1. Maintenance of Secretarial record is the responsibility

of the management of the company. My responsibilityis to express an opinion on this Secretarial recordsbased on my audit.

2. I have followed the audit practices and processes aswere appropriate to obtain reasonable assuranceabout the fairness of the contents of the Secretarialrecords. The verification was done on test basis toensure that facts are reflected in Secretarial records.I believe that the processes and practices I followedprovide a reasonable basis for my opinion.

3. I have not verified the correctness and appropriatenessof financial records and Books of Accounts of thecompany.

4. Wherever required, I have obtained the Managementrepresentation about the compliance of laws, rulesand regulations and happening of events, etc.

5. The compliance of the provisions of Corporate andother applicable laws, rules, regulations, standards isthe responsibility of the management. My examinationwas limited to the verification of procedure on testbasis.

6. The Secretarial Audit Report neither an assurance asto the future viability of the Company nor the efficiencyor effectiveness with which the management hasconducted the affairs of the Company.

This Report is to be read with our letter of even date which isannexed as Annexure A and forms an integral part of this report

Annexure “A”

ToThe MembersMangalam Timber Products Limited

Arup Kumar RoyPracticing Company Secretary.

ACS : 6784CP Number: 9597



43

Annexure- V

A. CONSERVATION OF ENERGY:

1. Energy conservation measures taken

a) DC controller fuses are replaced by MCCB andhence stoppage of equipment’s due to frequentblowing of fuses is avoided.

b) Ideal machines hours further avoided byproviding proper interlocks.

c) Consumption of fly ash generating from Boilerin fly ash brick manufacturing unit within factorypremises result to the lesser usage of HSD andother lubricants in internal transportation.

d) Reduction in power consumption by providingmain drives in the hydraulic presses with Star–Delta connection.

e) Majority of the time, timber trucks are directlyunloaded in the chipper and hence avoidingdouble handling and saving of HSD & lubricants.

f) The residual wood fiber/dusts are resin mixedand has high calorific valve. They are utilizedfor firing in the boiler along with coal, thusconsumption of coal is reduced.

g) In boiler area, energy cost reduction is achievedby arresting extra ingress of ambient air due toleakages in flue gas ducts from APH to ID fan.

2. Additional investment and proposals, if any, beingimplemented for reduction of consumption ofenergy.

a) Company has installed in house 3MW Co-Generation Thermal Power plant at plant whichwill not only reduce power cost considerablybut also give consistent supply which help inreducing the utility production. Steam requiredfor running the MDF plant will be drawn fromthis Cogen power plant which will result inreduction of coal consumption and saving onfossil fuel cost.

Frequent tripping of existing Grid power is alimiting factor for production and powerconsumption. With our own generation,availability of the machineries will improve andwe shall be producing quality product onconsistence basis with lesser power consumption.

b) We are planning to install VVFD in ID, FD andBooster fan of boiler for energy conservationand prevent burning of motors during startup.

c) We will conserve energy by reducing steam lossdue to leakages in the steam pipelines, valvesand orifices etc.

d) We propose heat loss reduction from the surfaceof boiler and flue gas ducts by providing properinsulation.

e) We will upgrade existing PLC2/30 to RockwellAutomation make controllogic system to reducebreakdown hours.

f) We propose to replace exciting low efficiencymotors with high efficiency motors.

g) We will achieve energy saving by replacing FTLlighting system with LED lighting in a phasedmanner.

3. Impact of the measures as above for the reductionof energy consumption and consequent impact ofthe cost of production of goods.

The measure stated in SN 1 & 2 above have resulted/will result in saving of energy used as well asimprovement of quality and overall productivity.

B. TECHNOLOGY ABSORPTION

Efforts made in Technology absorption- as per Form ‘B’given below

1. Research & Development (R& D)

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXCHANGE EARNINGS AND OUTGO[Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of The Companies (Account) Rules, 2014]


44

I. Areas of R&D activities

a) The Company is carrying out in house researchwork to develop new products and alsoimprovise the quality of existing products.

b) Technology induction in the process of onlinemoisture control from fiber to finished panelensuring better internal bond in the panels.

c) Manufacturing processes/parameters arecontinuously monitored and modified whereverrequired to ensure better productivity both interms of quantity and quality.

d) Launch of specially formulated PhenolFormaldehyde resin to introduce a new rangeof BWR Grade HD HMR range which shall bepositioned against plywood. This product shallhave a very low formaldehyde emission footprint as both the resin components being fromthe Carbon Chain.

e) Modified press cycle time to make board qualityhomogeneous and better core.

f) Mat cutting technology modified with photocell system from counter system.

II. Benefit derived as a result of above R & D

a) Improved product quality.

b) Cost reduction.

c) Market penetration with new products.

d) Customer satisfaction with improved qualityand wider range.

e) Certification/License of ECO Mark from theBureau of Indian Standards.

III. Future plans of action

a) Further Improvement in the quality of existingproducts.

b) Developments of new products

c) Improvisation in manufacturing process tominimize machinery break downs.

d) Adopt new processes/technology for reductionof power consumption.

e) Preparation of improved quality of Resin usingRO water.

IV. Expenditure on R&D

During the year the Company has not incurredany specific capital/recurring expenditure onR&D. R&D is carried out in house using theexisting manufacturing set up. The Company ismember of Indian Plywood Industries Researchand Training Institute (IPIRTI).

2. Technology absorption, adoption and innovation

a) Steps adopted

n Continuous interaction with the main plantsupplier and others for technical assistance hashelped to achieve optimum benefits of theadvancement in technology such as plantoptimization, efficient use of energy etc.

n Plant personnel were trained by experts, in-house and outside through visits/Seminar andcommunications.

n Evaluating customers and end user feedbackfor improving products and services.

b) Benefits of the step adopted

n Improved product quality.

n Wide product range.

n Better utilization of resources.

c) Import of Technology

The Company did not import technology during lastthree (3) years (reckoned from the beginning of thefinancial year) but taken guidance from technicalexperts as well from the foreign machinery supplier.

C. FOREIGN EXCHANGE EARNING AND OUTGO:

(a) Total foreign exchange earned : Nil

(b) Total foreign exchange used : Rs. 51.17 Lacs


45

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF MANGALAM TIMBER PRODUCTS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statementsof MANGALAM TIMBER PRODUCTS LIMITED, whichcomprise the Balance Sheet as at 31st March, 2016, theStatement of Profit & Loss and the Cash Flow Statement for the year ended on that date and a summary ofsignificant accounting policies and other explanatoryinformation.

Management’s Responsibility for the FinancialStatements

The Company’s Board of Directors is responsible for thematters stated in Section 134(5) of the Companies Act,2013 (“the Act”) with respect to the preparation of thesefinancial statements that give a true and fair view of thefinancial position, financial performance and cash flowsof the Company in accordance with the accountingprinciples generally accepted in India, including theAccounting Standards specified under Section 133 of theAct, read with Rule 7 of the Companies (Accounts) Rules,2014. This responsibility also includes maintenance ofadequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds andother irregularities; selection and application ofappropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design,implementation and maintenance of adequate internalfinancial controls, that were operating effectively forensuring the accuracy and completeness of the accountingrecords, relevant to the preparation and presentation ofthe financial statements that give a true and fair view andare free from material misstatement, whether due tofraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on thesefinancial statements based on our audit.

We have taken into account the provisions of the Act, theaccounting and auditing standards and matters which arerequired to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standardson Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free from material misstatement.

An audit involves performing procedures to obtain auditevidence about the amounts and the disclosures in thefinancial statements. The procedures selected depend onthe auditor’s judgment, including the assessment of therisks of material misstatement of the financial statements,whether due to fraud or error. In making those riskassessments, the auditor considers internal financialcontrol relevant to the Company’s preparation of thefinancial statements that give a true and fair view in orderto design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing anopinion on whether the Company has in place an adequateinternal financial controls system over financial reportingand the operating effectiveness of such controls. An auditalso includes evaluating the appropriateness of theaccounting policies used and the reasonableness of theaccounting estimates made by the Company’s Directors,as well as evaluating the overall presentation of thefinancial statements.

We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our auditopinion on the financial statements.

Opinion

In our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidfinancial statements give the information required by theAct in the manner so required and give a true and fairview in conformity with the accounting principles generally


46

Total number Whether leasehold/ Gross Block Net Block Remarksof cases freehold (Rs. in lacs) (Rs.in lacs)

1 Freehold 1.94 1.94 -

ii) The management has conducted physical verificationof inventory during the year at reasonable intervals.The discrepancies between the physical stock andbook records which were material in respect ofcertain items of inventories, have been properly dealtin the books of account.

iii) a) The company has not granted any loans, securedor unsecured to companies, firms Limited LiabilityPartnership or other parties covered in the registermaintained under section 189 of Companies Act,2013.

b) Clause (iii)(a), (b), (c) of the aforesaid order arenot applicable.

iv) In our opinion and according to information andexplanations given to us, the company has notgranted any loan or provided any guarantee orsecurity to the parties covered under section 185 ofthe Act. In our opinion and according to informationand explanations given to us, the Company hascomplied with provisions of section 186 of the Actin respect of investment made and guarantee or

security provided.

v) The Company has not accepted any deposits fromthe public within the provisions of section 73 to 76or any other relevant provisions of the Act and rulesframed there under.

vi) The Central Government of India has not prescribedthe maintenance of cost records under section 148(1)of the Act in respect of any product of the Company.

vii) a) According to the records of the companyexamined by us and according to theinformation and explanations given to us, inour opinion the company has not been regularin depositing undisputed statutory duesincluding Provident Fund, employees stateinsurance, income tax, sales tax, Service tax,duty of customs, duty of excise, value addedtax, and any other material statutory dues asmay be applicable. However, extent of arrearsof outstanding statutory dues as at the last dayof financial year for a period of more than sixmonths from the date is NIL.

accepted in India, of the state of affairs of the Companyas at 31st March, 2016, and its loss and its cash flows forthe year ended on that date.

Report on Other Legal and Regulatory Requirements

As required by Companies (Auditors Report) Order, 2016(‘’the order’’) issued by the Central Government of Indiain terms of Sub Section (11) of Section 143 of the Act onthe matters specified in paragraph 3 and 4 of the saidorder, we further report that-

i) a) The Company is maintaining proper recordsshowing full particulars including quantitativedetails and situation of Fixed Assets.

b) The Company has a regular programme ofphysical verification of its fixed assets by whichfixed assets are verified in a phased mannerover a period of three years. In accordance withthis programme, certain fixed assets wereverified during the year and no materialdiscrepancies were noticed on such verification.In our opinion, this periodicity of physicalverification is reasonable having regard to thesize of the Company and the nature of its assets.

c) The title deeds of immovable properties, asdisclosed in Note 2.10 on Fixed Assets to thefinancial statements, are held in the name ofthe company, except for


47

Central Excise Act, 1944 Central Excise 1993-94 3.49 Assistant Commissioner Central ExciseCustoms & Service Tax

Central Excise 1988-92 126.57 Customs, Excise & Service TaxAppellate Tribunal

Central Excise 2006-07 5.76 Customs, Excise & Service TaxAppellate Tribunal

Finance Act, 1994 Service Tax 2009-10 52.21 Customs, Excise & Service TaxAppellate Tribunal

Bihar & Orissa Excise Act, 1915 State Excise 2002-03 21.39 Odisha High CourtState Excise 2003-04 135.75 Odisha High Court

State Excise 2004-05 170.90 Odisha High Court State Excise 2005-06 251.58 Odisha High Court State Excise 2006-07 267.53 Odisha High Court State Excise 2007-08 120.37 District Magistrate & Collector, Nabarangpur State Excise 2008-09 103.20 District Magistrate & Collector, Nabarangpur State Excise 2009-10 96.60 District Magistrate & Collector, Nabarangpur State Excise 2010-11 57.60 District Magistrate & Collector, NabarangpurWest Bengal Sales Tax Act, 1941 Sales Tax 1986-87 0.16 Commissioner Commercial Taxes

Sales Tax 1987-88 0.06 Commissioner Commercial Taxes Sales Tax 1993-94 0.33 Commissioner Commercial TaxesCentral Sales Tax Act, 1956 Sales Tax 1987-88 0.05 Commissioner Commercial Taxes Sales Tax 1994-95 0.72 Deputy Commissioner Commercial Taxes Sales Tax 2000-01 93.56 Sales Tax Tribunal, Odisha

Sales Tax 2001-02 110.00 Sales Tax Tribunal, OdishaSales Tax 2002-03 70.12 Sales Tax Tribunal, OdishaSales Tax 2003-04 135.66 Sales Tax Tribunal, OdishaSales Tax 2004-05 30.22 Sales Tax Tribunal, Odisha

Odisha Entry Tax Act, 1999 Entry Tax 2000-01 8.11 Sales Tax Tribunal, Odisha Entry Tax 2002-03 28.35 Sales Tax Tribunal, OdishaOdisha Sales Tax Act, 1947 Sales Tax 2002-03 1.85 Sales Tax Tribunal, OdishaOdisha VAT Act, 2004 VAT 2005-06 17.20 Sales Tax Tribunal, Odisha

VAT 2007-09 14.96 Sales Tax Tribunal, Odisha

Name of the Statute Nature of the Dues Rs. in Lacs Forum where dispute is pendingPeriod towhich itrelates

b) According to the records of the company examined by us and according to information and explanationsgiven to us, there are no dues in respect of income tax, sales tax, service tax, duty of customs, duty of excise,value added tax which have not been deposited on account of any dispute except as detailed hereunder:

viii) According to the information and explanations given to us, the company has not defaulted in repaymentof any dues to financial institutions, banks,Government and debentureholders as at the BalanceSheet date.

ix) The Company has not raised any moneys by way ofinitial public offer, further public offer (Including debtinstruments) and term loans. Accordingly, theprovisions of Clause 3(ix) of the Order are notapplicable to the Company.

x) During the course of our examination of the booksand records of the Company, carried out inaccordance with the generally accepted auditingpractices in India, and according to the informationand explanations given to us, we have neither comeacross any instance of material fraud by the Companyor on the Company by its officers or employees,noticed or reported during the year, nor have webeen informed of any such case by the Management.


48

xi) The Company has paid/provided for managerialremuneration in accordance with the requisiteapprovals mandated by the provisions of section 197read with Schedule V to the Act.

xii) In our opinion and according to the information andexplanations given to us, the Company is not a nidhicompany. Accordingly, paragraph 3(xii) of the Orderis not applicable

xiii) According to the information and explanations givento us and based on our examination of the recordsof the Company, transactions with the related partiesare in compliance with sections 177 and 188 of theAct where applicable and details of such transactionshave been disclosed in the financial statements asrequired by the applicable accounting standards.

xiv) According to the information and explanations giveto us and based on our examination of the recordsof the Company, the Company has not made anypreferential allotment or private placement of sharesor fully or partly convertible debentures during theyear.

(xv) According to the information and explanations givento us and based on our examination of the recordsof the Company, the Company has not entered intonon-cash transactions with directors or personsconnected with him. Accordingly, paragraph 3(xv) ofthe Order is not applicable.

(xvi) The Company is not required to be registered undersection 45-IA of the Reserve Bank of India Act 1934.

Report on Other Legal and Regulatory Requirements

As required by Section 143 (3) of the Act, we report that:

1. We have sought and obtained all the informationand explanations which to the best of our knowledgeand belief were necessary for the purposes of ouraudit.

2. In our opinion, proper books of account as requiredby law have been kept by the Company so far as itappears from our examination of those books.

3. The Balance Sheet, the Statement of Profit and Loss,and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

4. In our opinion, the aforesaid financial statementscomply with the Accounting Standards specifiedunder Section 133 of the Act, read with Rule 7 of theCompanies (Accounts) Rules, 2014.

5. On the basis of the written representations receivedfrom the directors as on 31st March, 2016 taken onrecord by the Board of Directors, none of the directorsis disqualified as on 31st March, 2016 from beingappointed as a director in terms of Section 164 (2)of the Act.

6. With respect to the adequacy of the internal financialcontrols over financial reporting of the Company andthe operating effectiveness of such controls, refer toour separate report in “Annexure “A”; and

7. With respect to the other matters to be included inthe Auditor’s Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules, 2014, inour opinion and to the best of our information andaccording to the explanations given to us:

a) The Company has disclosed the impact of pendinglitigations on its financial position in its financialstatements-Refer Note 2.25 to the FinancialStatements.

b) The Company did not have any long term contractsincluding derivative contracts for which there wereany material foreseeable losses.

c) There has been no delay in transferring amounts,required to be transferred, to the Investor Educationand Protection Fund by the Company during the yearended 31st March, 2016.

For S M DAGA & CO.Chartered Accountants

Firm Registration Number: 303119EJ M DAGAPartnerMembership No.052489

Dated: 25th May, 2016Place: Kolkata


49

We have audited the internal financial controls overfinancial reporting of Mangalam Timber Products Limited(“the Company”) as at 31 March 2016 in conjunction withour audit of the standalone financial statements of theCompany for the year ended on that date.Management’s Responsibility for Internal FinancialControlsThe Company’s management is responsible for establishingand maintaining internal financial controls based on theinternal control over financial reporting criteria establishedby the Company considering the essential componentsof internal control stated in the Guidance Note on Auditof Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India(‘ICAI’). These responsibilities include the design,implementation and maintenance of adequate internalfinancial controls that were operating effectively forensuring the orderly and efficient conduct of its business,including adherence to company’s policies, thesafeguarding of its assets, the prevention and detectionof frauds and errors, the accuracy and completeness ofthe accounting records, and the timely preparation ofreliable financial information, as required under theCompanies Act, 2013.Auditors’ ResponsibilityOur responsibility is to express an opinion on theCompany's internal financial controls over financialreporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting (the “GuidanceNote”) and the Standards on Auditing, issued by ICAI anddeemed to be prescribed under section 143(10) of theCompanies Act, 2013, to the extent applicable to an auditof internal financial controls, both applicable to an auditof Internal Financial Controls and, both issued by theInstitute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we complywith ethical requirements and plan and perform the auditto obtain reasonable assurance about whether adequateinternal financial controls over financial reporting wasestablished and maintained and if such controls operatedeffectively in all material respects.Our audit involves performing procedures to obtain auditevidence about the adequacy of the internal financialcontrols system over financial reporting and theiroperating effectiveness. Our audit of internal financialcontrols over financial reporting included obtaining anunderstanding of internal financial controls over financialreporting, assessing the risk that a material weaknessexists, and testing and evaluating the design and operatingeffectiveness of internal control based on the assessedrisk. The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of material

misstatement of the financial statements, whether dueto fraud or error.We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our auditopinion on the Company’s internal financial controlssystem over financial reporting.Meaning of Internal Financial Controls over FinancialReportingA company's internal financial control over financialreporting is a process designed to provide reasonableassurance regarding the reliability of financial reportingand the preparation of financial statements for externalpurposes in accordance with generally accepted accountingprinciples. A company's internal financial control overfinancial reporting includes those policies and proceduresthat (1) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the company;(2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financialstatements in accordance with generally acceptedaccounting principles, and that receipts and expendituresof the company are being made only in accordance withauthorisations of management and directors of thecompany; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition,use, or disposition of the company's assets that couldhave a material effect on the financial statements.Inherent Limitations of Internal Financial Controls OverFinancial ReportingBecause of the inherent limitations of internal financialcontrols over financial reporting, including the possibilityof collusion or improper management override of controls,material misstatements due to error or fraud may occurand not be detected. Also, projections of any evaluationof the internal financial controls over financial reportingto future periods are subject to the risk that the internalfinancial control over financial reporting may becomeinadequate because of changes in conditions, or that thedegree of compliance with the policies or procedures maydeteriorate.OpinionIn our opinion, the Company has, in all material respects,an adequate internal financial controls system overfinancial reporting and such internal financial controlsover financial reporting were operating effectively as at31 March 2016, based on the internal control over financialreporting criteria established by the Company consideringthe essential components of internal control stated in theGuidance Note on Audit of Internal Financial ControlsOver Financial Reporting issued by the Institute ofChartered Accountants of India.

Annexure - A to the Auditors’ Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)


50

BALANCE SHEET AS AT 31ST MARCH, 2016

(Rs. in lacs)

EQUITY AND LIABILITIES1. Shareholder's Funds

a) Share Capital 2.1 5,279.95 5,279.95b) Reserves and Surplus 2.2 (3,900.29) (2,635.53)

1,379.66 2,644.422. Non-Current Liabilities

a) Long-term borrowings 2.3 500.00 75.00b) Other Long-term liabilities 2.4 770.55 789.63c) Long term provisions 2.5 220.21 207.82

1,490.76 1,072.453. Current Liabilities

a) Short-term borrowings 2.6 1,837.64 2,220.88b) Trade payables 2.7 1,630.31 1,807.56c) Other current liabilities 2.8 2,837.21 1,378.98d) Short-term provisions 2.9 32.04 210.92

6,337.20 5,618.34Total 9,207.62 9,335.21

ASSETS1. Non-current Assets

a) Fixed assets 2.10i) Tangible assets 2,136.09 2,263.32ii) Intangible assets 7.30 17.64iii) Capital work-in-progress 719.05 0.57

b) Non-current investments 2.11 5.00 5.00c) Plantation work-in-progress 143.25 169.99d) Deferred tax assets (net) 2.12 2,450.49 1,732.10e) Long term loans & advances 2.13 1,205.05 1,158.73f) Other Non Current Assets 2.14 12.23 14.45

6,678.46 5,361.802. Current Assets

a) Inventories 2.15 1,503.24 2,577.23b) Trade receivables 2.16 533.32 680.52c) Cash and Bank Balances 2.17 38.88 69.92d) Short-term loans and advances 2.18 453.72 645.74

2,529.16 3,973.41Total 9,207.62 9,335.21

Significant accounting policies(The notes are an integral part of the financial statements) 1

NOTE 31ST MARCH, 2016 31ST MARCH, 2015

Namrata PriyaCompany Secretary

As per our report of even date:

For S M DAGA & CO.Chartered AccountantsFirm Registration No. : 303119E


Kolkata, 25th May, 2016

N G Khaitan

Prabir Chakravarti

Leena Ghosh Directors

Vidula Jalan

Amit Kr AgarwalChief Financial Officer

For and on behalf of the Board


51





Kolkata, 25h May, 2016

N G Khaitan

Prabir Chakravarti


Vidula Jalan



STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2016

(Rs. in lacs)

REVENUE FROM OPERATIONSSale 4,281.80 4,391.23Less : Excise Duty 428.38 432.93Net Sales 3,853.42 3,958.30Other Income 2.19 157.68 436.46Total Revenue 4,011.10 4,394.76

EXPENSESCost of Raw materials consumed 2.20 1,822.81 2,240.22Changes in inventories of finished goods,work-in-progress and Stock-in-Trade 2.21 1,033.23 232.63Employee benefits expense 2.22 899.48 1,032.09Finance costs 2.23 347.84 358.36Depreciation and amortisation expense 2.10 137.57 161.27Other expenses 2.24 1,805.69 1,947.00Total Expenses 6,046.62 5,971.57Profit/ (Loss) before exceptional and extraordinary items and tax (2,035.52) (1,576.81)Exceptional Items - -Profit before extraordinary items and tax (2,035.52) (1,576.81)Extraordinary Items - -Profit/ (Loss) before tax (2,035.52) (1,576.81)Tax expenses Current tax - - Excess Provision of earlier year written back (net) (52.37) - Deferred tax (718.39) (569.28)Profit/(Loss) for the year (1,264.76) (1,007.53)Earnings per equity share (par value Rs.10 per Share) Basic (6.90) (5.50) Diluted (6.90) (5.50)Significant accounting policies 1(The notes are an integral part of the financial statements)

NOTE YEAR ENDED YEAR ENDED31ST MARCH, 2016 31ST MARCH, 2015


52

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2016

A. Cash Flow from Operating Activities:Profit/(Loss) before Tax (2,035.52) (1,576.81)Adjustments for :Depreciation and Amortisation 137.57 161.27Bad Debts 24.48 -Loss on sale of Fixed Assets (net) - 3.32Finance Costs 347.84 358.36Gain/Loss on Foreign Exchange Fluctation 0.39 -Liability no longer required written back (49.24) -Provision for bad & doubtful debts written back (15.94) -Interest Income (15.84) -Operating Profit/(Loss) before Working Capital changes (1,606.26) (1,053.86)Changes in Working Capital(Increase)/Decrease in Trade Receivables 138.65 (150.41)(Increase)/Decrease in Inventories 1,073.99 414.10 (Increase)/Decrease in Long-Term Loans and Advances & Other (17.36) 55.96 Non-Current Assets(Increase)/Decrease in Margin Money 20.81 16.98 (Increase)/Decrease in Short-Term Loans and Advances & Other 192.02 10.88 Current AssetsIncrease/(Decrease) in Trade Payables & Other Current Liabilities 1,085.34 135.76 Increase/(Decrease) in Other Long-Term Liabilities 30.16 284.24 Increase/(Decrease) in Long-Term Provisions 12.39 37.33 Increase/(Decrease) in Short-Term Provisions (126.50) 2,409.50 (20.13) 784.71Net cash used in operating activities 803.24 (269.15)

B. Cash Flow from Investing Activities:Purchase of Fixed Assets including CWIP (718.48) (55.03)Proceeds from sale of fixed assets - 5.21 Interest Income 15.84 - Net Cash used in Investing Activities (702.64) (49.82)

C. Cash Flow from Financing Activities(Repayments)/Proceeds from Long-Term Borrowings (net) 500.00 - (Repayments)/Proceeds from Short-Term Borrowings (net) (383.24) 585.34 Interest Paid (227.59) (264.10)Net Cash from Financing Activities (110.83) 321.24Net Increase/(Decrease) in Cash and Cash Equivalents (10.23) 2.27Cash and Cash Equivalents at the beginning of the year 18.99 16.72Cash and Cash Equivalents at the end of the year 8.76 18.99

(Rs. in lacs)Year ended Year ended

31st March, 2016 31st March, 2015








Directors

Notes:1) The above cash flow statement has been prepared under the Indirect Method as set out in the Accounting Standard - 3 on Cash

Flow Statements.

2) Cash and Cash Equivalents comprise :Balance with banks: 31.03.16 31.03.15 In Current Account 0.28 3.36

In Unpaid Dividend Account 8.02 15.32Cash in hand 0.46 0.31

8.76 18.99

(Rs. in lacs)

3) Figures for the previous year have been re-grouped wherever considered necessary.This is the Cash Flow Statement referred to in our report of even date.


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Note: 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES1.1 BASIS OF ACCOUNTING

These financial statements have been prepared inaccordance with the generally accepted accountingprinciples in India under the historical cost conventionon accrual basis. Pursuant to circular 15/2013 dated13th September, 2013 read with circular 08/2014dated 4th April, 2014, till the Standards of Accountingor any addendum thereto are prescribed by CentralGovernment in consultation and recommendationof the National Financial Reporting Authority, theexisting Accounting Standards notified under theCompanies Act, 1956 (the 'Act') shall continue toapply. Consequently, these financial statements havebeen prepared to comply, in all material aspects, withthe accounting standards notified under Section 133read with Rule 7 of the Companies (Accounts) Rules,2014 and the other relevant provisions of theCompanies Act, 1956 (the 'Act').All assets and liabilities have been classified as currentor non-current as per the Company’s normal operatingcycle and other criteria set out in the Schedule III tothe Act.

1.2 TANGIBLE FIXED ASSETSa) Tangible Fixed Assets are stated at cost of acquisition

or construction including any attributable cost forbringing the asset to its working condition for itsintended use or at revalued amounts wherever suchassets have been revalued.Subsequent expendituresrelated to an item of fixed asset (tangible or intangible)are added to its book value only if they increase thefuture benefits from the existing asset beyond itspreviously assessed standard of performance.

b) Losses arising from retirement of and gain & lossesarising from disposal of fixed assets are recognizedin Statement of Profit and Loss.

c) Capital Work In Progress is stated at cost.1.3 INTANGIBLE ASSETS

Intangible assets are capitalized where it is expectedto provide future enduring economic benefits. Costsincurred on acquisition of intangible assets arecapitalized.

1.4 DEPRECIATION AND AMORTISATIONa) Depreciation on tangible fixed assets is provided as

per estimated useful life given in Schedule II to the

Companies Act, 2013 after retaining 5% of assetshistorical value.

b) Intangible assets are amortised over its estimateduseful life from the date of its capitalization.

c) Additions on account of exchange fluctuation aredepreciated prospectively over the remaining life ofthe assets.

1.5 IMPAIRMENT OF ASSTES

Assessment is done at each Balance Sheet date as towhether there is any indication that an asset (tangibleand intangible) may be impaired.

An impairment loss, if any, is recognised whereverthe carrying amount of the fixed assets exceeds therecoverable amount i.e. the higher of the assets' netselling price and value in use. The impairment lossrecognised in prior accounting periods is reversed ifthere has been a change in the estimate ofrecoverable account.

1.6 INVESTMENTS

Investments that are readily realisable and areintended to be held for not more than one year fromthe date, on which such investments are made, areclassified as current investments. All other investmentsare classified as long term investments.

Current investments are carried at cost or fair value,whichever is lower. Long-term investments are carriedat cost less write down for any diminution, otherthan temporary, in carrying value.

1.7 INVENTORIES

a) Inventories are valued at lower of cost or net realizablevalue. Cost of finished goods comprise of materialscosts, labour and other appropriate overheads,whereapplicable. Cost for Raw materials, stores & sparesare determined on the basis of weighted averagemethod.

b) Inventories of finished goods include goods yet to begraded and marked. Excise duty on finished goodsare provided after grading and marking.

c) Spares for specific Plant & Machinery are amortizedover the useful life of the related Plant & Machinery,as estimated by the management.

d) Inventories are written down for obsolete / slowmoving / non-moving items, wherever necessary.

NOTES TO THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2016


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1.8 PLANTATION WORK-IN-PROGRESS

Plantation work-in-progress is stated at cost.

Plantation work-in-progress includes cultivation andother expenses allocable to the same, which arecarried forward till the commercial exploitation ofthe plantations raised. The wood procured onharvesting is transferred to the operations at theestimated proportionate cost incurred till harvestingand the corresponding amount is adjusted againstthe plantation work-in-progress.

Plantation Work-in-Progress also includes cost ofraising/procurement of seedlings which are adjustedat the time of sale/consumption of such seedlings.

1.9 CDM PROJECT

The expenses incurred in relation to the CDM Projecthave been shown under the head Advances and theappropriation for such expenses shall be accountedfor in the year of realization of Carbon Credit.

1.10 FOREIGN CURRENCY TRANSLATION

Transactions in foreign currency are recorded at theexchange rates prevailing on the date of transactions.Monetary assets and liabilities related to foreigncurrency transactions remaining unsettled at the endof the year are reinstated at exchange rates prevailingon that date. The resultant exchange differencesarising from settlement of foreign currencytransactions and from the year-end restatement arerecognised in the Statement of Profit and Loss

1.11 REVENUE

Revenue from sale of goods are recognised when thesignificant risks and rewards of ownership in thegoods are transferred to the buyer as per the termsof the contract. It includes excise duty but excludesvalue added tax/sales tax, trade discounts, returns,as applicable.

1.12 EMPLOYEE BENEFITS

Short term Employee Benefits

Short-term Employee Benefits (i.e. benefits fallingdue within one year after the end of the period inwhich employees render the related service) arerecognised as expenses in the period in whichemployee services are rendered as per the Company's

scheme based on expected obligations onundiscounted basis.

Post Employment Benefit Plans

Under Defined Contribution Plans, contributionspayable in keeping with the related schemes arerecognised as expenses for the year.

For Defined Benefit Plans, the cost of providingbenefits is determined using the ̀ Projected Unit CreditMethod’, with actuarial valuations carried out at eachBalance Sheet date. Actuarial gains and losses arerecognised as income or expenditure immediately infull in the Statement of Profit and Loss for the yearin which they occur. The retirement benefit obligationrecognised in the Balance Sheet represents thepresent value of the defined benefit obligation asadjusted for unrecognized past service cost, if anyand as reduced by the fair value of scheme assets.

Other Lomg-term Employee Benefits

Leave encashment/Compensated Absence isdetermined using Projected Unit Credit Method withactuarial valuation being carried out at each BalanceSheet date. Actuarial gains and losses and past servicecost are recognised immediately in the Statement ofProfit and Loss for the year in which they occur. Otherlong-term employee benefits obligation arerecognised on actual basis at each Balance Sheetdate.

1.13 BORROWING COST

- General and specific borrowing costs directlyattributable to the acquisition, construction orproduction of qualifying assets, which are assets thatnecessarily take a substantial period of time to getready for their intended use or sale, are added to thecost of those assets, until such time as the assets aresubstantially ready for their intended use or sale. Allother borrowing costs are recognised in Statementof Profit and Loss in the period in which they areincurred

1.14 SHARE ISSUE EXPENSE

- Share issue expense incurred for issue of 7.5% Non-Cumulative redeemable preference share areamortized over the period Shares remain outstanding.


55

1.15DEFERRED REVENUE EXPENSES

Deferred revenue expenses are written off in fiveequal installments commencing from the year inwhich these expenses are incurred.

1.16 INCOME TAX

- Tax expense comprises current and deferred tax.Current income tax is measured at the amountexpected to be paid to the tax authorities inaccordance with the Income-tax Act, 1961.

Deferred tax assets and liabilities arising on accountof timing differences and which are capable of reversalin subsequent periods are recognised using the taxrates and tax laws that have been enacted orsubstantively enacted.

1.17LEASES

Leases in which a significant portion of the risks andrewards of ownership are retained by the lessor areclassified as operating leases. Payments made underoperating leases are charged to the Statement ofProfit and Loss.

1.18CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes cash in hand,demand deposits with banks, other short-term highlyliquid investments with original maturities of threemonths or less.

1.19EARNING PER SHARE

Basic earnings per share is calculated by dividing thenet profit /(loss) for the period attributable to equityshareholders by the weighted average number ofequity shares outstanding during the period. Earningsconsidered in ascertaining the Company’s earningsper share is the net profit/(loss) for the period afterdeducting preference dividends and any attributabletax there to for the period. The weighted averagenumber of equity shares outstanding during theperiod and for all periods presented is adjusted forevents, such as bonus shares, other than the

conversion of potential equity shares, that havechanged the number of equity shares outstanding,without a corresponding change in resources. Forthe purpose of calculating diluted earnings per share,the net profit /(loss) for the period attributable toequity shareholders and the weighted averagenumber of equity shares outstanding during theperiod is adjusted for the effects of all dilutivepotential equity shares.

1.20PROVISIONS AND CONTINGENT LIABILITIES

Provisions: Provisions involving substantial degree ofestimation in measurement are recognised whenthere is a present obligation as a result of past eventsand it is probable that there will be an outflow ofresources.

Contingent Liabilities: Contingent liabilities aredisclosed when there is a possible obligation arisingfrom past events, the existence of which will beconfirmed only by the occurrence or non-occurrenceof one or more uncertain future events not whollywithin the control of the Company or a presentobligation that arises from past events where it iseither not probable that an outflow of resources willbe required to settle or a reliable estimate of theamount cannot be made.

1.21USE OF ESTIMATES

The presentation of financial statements in conformitywith Indian GAAP requires the management to makejudgements, estimates and assumptions that effectthe reported amounts of revenues, expenses, assetsand liabilities and the disclosure of contingentliabilities, at the end of the reporting period. Althoughthese estimates are based on the management‘s bestknowledge of current events and actions, uncertaintyabout these assumptions and estimates could resultin the outcomes requiring a material adjustment tothe carrying amounts of assets or liabilities in thefuture periods.


56

(Rs. in lacs)

Note 2.1Share Capital

Authorised2,50,00,000 Equity shares of Rs.10/- each 2,500.00 2,500.0035,00,000 7.5% Non-cumulative Redeemable Preference 3,500.00 3,500.00

Share Capital of Rs.100/- each 6,000.00 6,000.00Issued, subscribed and paid up capitalEquity Share Capital1,83,27,400 Equity shares of Rs.10/- each, fully paid 1,832.74 1,832.74

Forfeited shares (Amount originally paid up) 0.21 0.21Total 1,832.95 1,832.95

Preference Share Capital34,47,000 7.5% Non-cumulative Redeemable Preference

Shares of Rs.100/- each, fully paid 3,447.00 3,447.00Total 3,447.00 3,447.00Total 5,279.95 5,279.95

31ST MARCH, 2016 31ST MARCH, 2015

Notes :

a Reconciliation of Number of Shares

Equity SharesShare outstanding as at the beginning of year 18,327,400 18,327,400Share outstanding as at the end of year 18,327,400 18,327,4007.5% Non- cumulative Redeemable Preference SharesShare outstanding as at the beginning of year 3,447,000 3,447,000Share outstanding as at the end of year 3,447,000 3,447,000

b Rights, preferences and restrictions attached to sharesEquity SharesThe Company has one class of Equity Shares having par value of Rs 10/- per share. Each Shareholder is entitled to one vote per share and equalright for dividend. In the event of liquidation the equity shareholders are eligible to receive the remaining assets of the Company after paymentof all preferential amounts in proportion to their shareholding.7.5% Non- cumulative Redeemable Preference Shares7.5% Non- Cumulative Redeemable Preference shares of Rs.100/- each are redeemable at par within a period not exceeding nine years fromdate of allotment i.e. 10th October, 2012. In the event of liquidation, the preference shareholders are eligible to receive the paid up value ofthe preference share, if any out of the remaining assets of the Company in preference to equity shareholders.

c The Company does not have any Holding company / ultimate Holding Company.

d Details of shares held by shareholders holding more than 5% of aggregate shares in the Company.

e No Equity shares have been reserved for issue under options and contracts/commitments for the sale of shares / disinvestment as atthe Balance sheet date.

2. Notes to the Financial Statements

Name of Shareholders AS AT 31ST MARCH, 2016 AS AT 31ST MARCH, 2015No. of shares % No. of shares %

Equity shares of Rs.10/- each fully paidCentury Textiles & Industries Limited 3,458,654 18.87 2,762,154 15.07Kesoram Industries Limited - - 2,528,462 13.80Camden Industries Limited 2,528,462 13.80 - -Padmavati Investment Limited 1,094,999 5.97 1,094,999 5.97Aditya Marketing and Manufacturing Limited 1,069,933 5.84 1,069,933 5.847.5% Non- cumulative Redeemable PreferenceShares of Rs.100/- each fully paidMangalam Cement Limited 3,447,000 100.00 3,447,000 100.00


57

(Rs. in lacs)

Note 2.2

Reserves and Surplus

Surplus

Balance at the beginning of the year (2,635.53) (1,596.43)

Add: Net profit/ (loss) for the year (1,264.76) (1,007.53)

Amount available for appropriation (3,900.29) (2,603.96)

Add: Adjustment for transition provision of Schedule II of Co Act, 2013 - (31.58)

Balance at the end of the year (3,900.29) (2,635.53)

Total (3,900.29) (2,635.53)

Note 2.3

Long-term Borrowings

Unsecured

Deposit from Bodies Corporate

From related parties 500.00 -

From others - 75.00

Non-Current Maturities Total 500.00 75.00

Deposit from Bodies Corporate

Other than related parties 400.00 325.00

Current Maturities Total 400.00 325.00

Total Unsecured 900.00 400.00

Long Term Borrowings:

Non-Current Maturities Total 500.00 75.00

Current Maturities Total 400.00 325.00

Total 900.00 400.00

Note 2.4

Other Long-term Liabilities

Security Deposits 770.55 789.63

Total 770.55 789.63

Note 2.5

Long-term Provisions

Provision for Employee Benefits

Provision for Gratuity 151.13 143.65

Provision for Leave Encashment 69.08 64.17

Total 220.21 207.82



58


(Rs. in lacs)

Note 2.6

Short-term Borrowings

Secured

Cash Credit (Refer note below) 1,447.64 1,370.88

Unsecured

Inter-Corporate Deposits

From related parties - 460.00

From Others 390.00 390.00

Total 1,837.64 2,220.88

Note:

Secured by prior charge by way of hypothecation of stocks, debts and other current assets and second charge over entire fixed

assets both present and future.

Note 2.7

Trade Payables

For Goods and Services 1,630.31 1,807.56

Total 1,630.31 1,807.56

Note 2.8

Other current liabilities

Current Maturities of Long Term Debt (Refer Note 2.3) 400.00 325.00

Interest accured but not due on borrowings 43.47 38.58

Interest accured and due on borrowings 203.99 93.14

Interest accrued and due on deposit 78.44 73.93

Unclaimed Dividend 8.02 15.32

Advance from Customers 1,531.54 366.98

Other Liabilities 571.75 466.03

Total 2,837.21 1,378.98

Note 2.9

Short-term provisions

Provision for employee benefits

Provision for Gratuity 11.82 6.82

Provision for Leave Enchashment 20.22 7.63

Others

Provision for Income Tax (Net) - 160.72

Provision for Fringe Benefit Tax - 35.75

Total 32.04 210.92


59

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(Rs.

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60


(Rs. in lacs)

Note 2.11Non-current investments (at cost)Other InvestmentsInvestments in equity instruments (Unquoted) (fully paid up)50000 (Previous Year: 50000) equity shares of Rs.10 each of

Kesoram Insurance Broking Services Limited 5.00 5.00Total 5.00 5.00

Note 2.12Deferred tax assetsUnabsorbed depreciation and carried forward loss as per Income tax laws 2,473.41 1,938.29Difference between written down value of block of assets asper Income Tax Act and WDV of fixed assets as per books (269.80) (347.32)Expenditure disallowable u/s 43B of the Income Tax Act 226.10 115.42Provision for doubtful debts 20.78 25.71Total 2,450.49 1,732.10

Note 2.13Long term loans & advancesUnsecured considered goodBalance with Excise Authorities 224.78 224.78Capital Advance 61.52 2.71Security Deposits 148.50 151.71Deferred revenue expense 11.22 18.15Other Advances 759.03 761.38Total 1,205.05 1,158.73

Note 2.14Other Non Current AssetsShare Issue Expenses 12.23 14.45Total 12.23 14.45

Note 2.15Inventories (at lower of cost or net realisable value)Raw materials 216.45 243.86Material in Process 0.26 0.42Finished goods (Refer note below) 1,014.52 2,013.80Stock-in-trade 3.54 37.49Stores and spares 268.47 281.66Total 1,503.24 2,577.23

Note:Includes material in transit Rs. 42.88 lacs (previous year Rs. 68.65 lacs)


61


(Rs. in lacs)

Note 2.16Trade receivablesOutstanding for a period exceeding six monthsfrom the date they are due for paymentSecured, considered good 141.63 99.12Unsecured, considered good 196.19 179.12Unsecured, considered doubtful 67.27 83.21Less: Provision for doubtful debts (67.27) (83.21)

337.82 278.25Other ReceivablesSecured considered good 77.39 117.86Unsecured considered good 118.11 284.41Total 533.32 680.52

Note: Trade Receivables are secured to the extent of security deposits received fromrespective parties

Note 2.17Cash and Bank BalancesCash and Cash EquivalentsBalance with banks:In Current Account 0.28 3.36In Unpaid Dividend Account 8.02 15.32Cash in hand 0.46 0.31 8.76 18.99Other Bank BalancesBalance with banks held as Margin Money 30.12 50.93Total 38.88 69.92

Note 2.18Short-term loans and advancesUnsecured-Considered goodAdvances recoverable in cash or in kind or for value to be received 239.45 307.84Loans & advance to officers of the Company 0.69 0.36Prepaid Expenses 29.86 23.35Payment of Income Tax 63.84 165.87Payment of Fringe benefit tax - 39.36Deferred revenue expense 6.93 6.93Others 112.95 102.02Total 453.72 645.74


62


(Rs. in lacs)

Note 2.19

Other Income

Interest Income 15.84 14.81

Insurance Claim 1.65 1.40

Liabilities/Provisions no longer required written back 49.24 312.06

Miscellaneous Income 90.95 108.19

Total 157.68 436.46

Note 2.20

Cost of Raw Materials Consumed

Opening Stock 243.86 405.63

Add: Purchase 1,795.40 2,078.45

2,039.26 2,484.08

Less: Closing Stock 216.45 243.86

1,822.81 2,240.22

Details of Raw Materials consumed

Wood 834.46 962.07

T.G. Urea 276.42 314.31

Formaline 269.33 329.08

Melamine 161.41 220.64

Paper 97.91 140.92

Others 183.28 273.18

Total 1,822.81 2,240.22

Note 2.21

Changes in Inventories of finished goods,

Work-in-Progress and Stock-in-Trade

Opening stock

Finished goods 2,013.80 2,246.42

Stock-in-Trade 37.49 37.50

2,051.29 2,283.92

Closing stock

Finished goods 1,014.52 2,013.80

Stock-in-Trade 3.54 37.49

1,018.06 2,051.29

1,033.23 232.63

Note 2.22

Employee Benefits Expense

Salaries and wages 771.54 884.15

Contribution to Provident and Other funds 39.04 43.64

Contribution to Gratuity fund 22.55 21.30

Staff welfare expenses 66.35 83.00

Total 899.48 1,032.09


63


(Rs. in lacs)

Note 2.23

Finance Costs

Interest Expenses 347.84 358.36

Total 347.84 358.36

Note 2.24

Other Expenses

Consumption of Stores and Spare parts 159.74 187.09

Power and Fuel 804.55 897.84

Repairs to Buildings 3.33 3.13

Repairs to Machinery 16.01 17.77

Repairs and Maintainence - Others 0.23 0.45

Commission and Discount on sales 17.93 45.83

Freight, Forwarding and Transportation 477.51 453.97

Selling & advertisement expenses 6.46 20.02

Travelling and conveyance 24.99 32.52

Loss on exchange fluctuation (net) 0.39 0.01

Rent 33.99 55.71

Insurance 24.59 25.96

Rates and Taxes 21.19 23.72

Bad debts 24.48 -

Legal and professional charges 11.97 29.79

Auditor's remuneration:

For audit fees 3.08 3.08

For taxation matters 0.55 0.55

For other services 0.58 0.56

Director's sitting fees 2.83 3.38

Prior period expenses 2.37 1.74

Loss on sale of fixed assets - 3.32

Miscellaneous expenditure 168.92 140.56

Total 1,805.69 1,947.00

2. Royalty on wood had been increased by theGovernment of Odisha with retrospective effect from1st April, 1988 vide its letter dated 2nd September,1993 against which the Company had filed a writpetition before the Odisha High Court. The OdishaHigh Court vide its order dated 16th May, 1995 hadupheld the writ petition of the Company.Government of Odisha had filed a Special LeavePetition before the Supreme Court. The Hon’bleSupreme Court vide its order dated 11th November,2003 has dismissed the special leave petition filedby the Government of Odisha and upheld thedecision of the Hon’ble High Court of Odisha passedin favour of the Company. The Hon’ble SupremeCourt had also directed the Govt. of Odisha toimplement the judgement of the Hon’ble High Courtof Odisha expeditiously and in any case within aperiod of four months from the date of the order ofthe Supreme Court. Subsequently, Government ofOdisha has lodged a claim for Rs.303.49 lacs (net ofexcess amount of royalty paid by the Company inearlier years) on the Company on account of allegedfailure in taking up replantation in the area harvestedby the Company. This claim has been denied by theCompany. In terms of the Supreme Court judgement,the Company has lodged its claim with theGovernment of Odisha, the monetary value of whichis much higher in comparison to the claim lodgedby the Govt. of Odisha against the Company, tohonour its commitments made to the Company asdirected by the Hon’ble High Court of Odisha andupheld by the Hon’ble Supreme Court. TheManagement is of the view that no provision againstthe said demand is necessary, as no liability is likelyto arise on this account and Rs.81.04 lacs paid inearlier year and included under advances recoverablehas been considered good of recovery.

3. Government of Odisha has issued Demand Noticefor Rs.1224.92 Lacs towards License fees, Importfees, Excise Duty, Pass fees, Application fees onimport of Methanol into Odisha without obtaininglicense from competent authority from the year2002-03 to 2008-09.The Company has already taken license fromconcerned authorities and challenged above demandon the ground that as methanol is imported fromother countries, provision of Odisha Excise (MethanolAlcohol) Rules 1976 are not applicable for use ofMethanol as raw material.The Company has obtained interim stay on abovematter from the Hon’ble High Court of Odisha atCuttack on 20.11.08, for Rs.847.00 Lacs and forRs.223.57 Lacs furnished Indemnity Bond.A further demand has been received for the year2009-10 & 2010-11 totaling Rs.154.20 Lacs for whichnecessary documents has been submitted for signingof Indemnity Bond.Pass fees paid for import of Methanol into Odishaamounting to Rs. 224.41 lacs for the year 2007-08,2008-09, 2009-10, 2010-11 & 2011-12 has beenshown as advance which is considered as good forrecovery, since the management is of the view thatno liability is likely to arise on this account in future.

4. Demand for Rs.18.15 Lacs (Previous year Rs.27.32Lacs) against Delay payment Surcharge from OdishaState Electricity Board has not been accepted by theCompany and the matter is under dispute. However,as a matter of abundant caution an equivalentamount has been provided for to take care of theliability, if any, in this respect.

Note: 2.25 Disclosure to Financial Statements

31ST MARCH, 2016 31ST MARCH, 2015(Rs. in lacs)

1. (A) Contingent liabilities not provided for in respect of :a) Sales Tax matters pending in appeal 474.89 480.31b) Entry Tax matters pending in appeal 36.46 47.53c) Excise/Service Tax matters as under

i) Excise matters pending in appeal 135.82 135.82ii) Service Tax Outward Freight 52.21 52.21

d) State Excise matters pending in appeal 1224.92 1224.92e) Bank guarantees given in favour of District 5.00 5.00

Magistrate and Collector Nabarangpur andremaining outstanding

f) Demand of Electricity Duty raised by Southern 70.53 70.53Electricity Supply Company of Odisha Ltd. forthe period from Apr-2008 to Jan-2011(part of BIFR period). Also refer note no. 2.25(10)

(B) Capital CommitmentEstimated value of contracts in capital account 135.49 Nilremaining to be executed[Net of advances Rs. 61.52 Lacs (31st March, 2015: Nil)]


64


65

7. Tax credit shall be allowed to the extent of amountof MAT paid in earlier years depending upon theprofits earned by the Company in future years, inaccordance with the provisions of Section 115JAAof the Income Tax Act, 1961.

8. In accordance with the license granted by theGovernment of Odisha in the year 1986, the Companyhad undertaken plantation in certain Governmentland which is ready for harvesting. Despite consistentfollow up, the Government did not allow theCompany to harvest the plantation on the pretextthat the Special Leave Petition filed by theGovernment of Odisha was pending before theHon’ble Supreme Court. The Hon’ble Supreme Court

had dismissed the Special Leave Petition filed by theGovernment of Odisha in the royalty matter, asreferred to in Note No.2 above. Since theGovernment of Odisha had not allowed the Companyto harvest the plantation done by the Company evenafter the dismissal of Special Leave Petition filed bythe Government of Odisha, the Company had noalternative but to file a Writ Petition in the HighCourt of Odisha seeking direction to allow theCompany to harvest the plantation done by theCompany on its own cost on Government land andalso other stipulations relating to rate of royalty andweighment norms. The Hon'ble High Court of Odishahad vide its order dated 8th July, 2004, had withoutexpressing any opinion with regard to merits of the

B) Disclosure required for related party transactionsEnterprises over which significant

Transactions Key Management Personnel influence exercised by DirectorsRemuneration 2.03 -

(2.01) -Interest on Inter Corporate Deposit - 50.98

(-) (36.27)Inter Corporate Deposit - 40.00

(-) (100.00)Reimbursement of Expenses - 13.07

(-) (9.00)Outstanding at year endInter Corporate Deposit - 500.00

(-) (460.00)Interest on Inter Corporate - 45.88Deposit (-) (32.64)Remuneration 0.28 -

(0.16) ( - )Note: Figures for previous years have been given in brackets.

A) List of related parties:i) Key Management Personnel:

1) Shri Tara Chand Sharma (01.04.2014 - 31.07.2015)2) Shri Soumitra Kumar De ( 13.08.2015 - 31.03.2016)

ii) Enterprises over which significant influence exercised by Director :Mangalam Cement Ltd.

6. Related party information as identified by the management as per Accounting Standard-18 on Related PartyDisclosure issued by Central Government.

5. SEGMENT INFORMATIONa. The Company operates in one segment only i.e.

Medium Density Fibre Board and accordinglyinformation required under AccountingStandard-17 issued by Central Government isnot applicable.

b. In order to sustain long-term availability offirewood, principal raw material for theCompany’s main product- Medium Density Fibre

Board, the Company is engaged in plantationunder various schemes on the land owned bythird parties. The Company’s role is to developand supply seedlings to such third parties. Sincedevelopment of seedlings is an integral part ofplantation activity which is incidental to mainactivity of the Company, this operation hasnot been treated as a separate segment underAccounting Standard – 17 issued by CentralGovernment.


(Rs. in lacs)13. CIF VALUE OF IMPORTS

Raw Materials 19.68 34.69Stores & Spares 2.71 3.09

14. CONSUMPTION OF IMPORTED AND INDIGENOUS RAW MATERIALS, STORES AND SPARES :

31ST MARCH, 2016 31ST MARCH, 2015% of total Value % of total Value

Consumption (Rs. In Lacs) Consumption (Rs. In Lacs)A Raw Materials consumed

IImported 1.19 21.70 2.00 44.76Indigenous 98.81 1801.11 98.00 2195.46

1822.81 2240.22B Stores and Spare Parts

Imported 2.57 4.11 8.27 15.47Indigenous 97.43 155.63 91.73 171.62

159.74 187.09

contentions raised by the Company, disposed of thepetition with a direction to the Government of Odishaand its various officers to dispose of therepresentations made to them strictly in accordancewith law as expeditiously as possible preferablywithin a period of six months. In compliance withthe directions from the Hon’ble High Court of Odisha,the Government has reiterated its claim forrecovering cost of plantation on 244.825 hectares.The Company has denied its liability to any suchclaim.

9. (i) The Company has undertaken Plantation underFarm Forestry Scheme, inter-alia, in the State ofChhattisgarh in association with the forestdepartment of Chhattisgarh Government. As per theagreement part sale consideration of supply ofseedlings is to be paid to the Company at the timeof harvesting of the plantation. Accordingly, part saleconsideration of Rs. 73.38 Lacs relating to earlieryears along with interest will be received by theCompany at the time of harvesting. Based on thelegal opinion obtained by the Company, the samewill be accounted for in the year in which theplantation is harvested.

(ii) The Company has undertaken Plantation under FarmForestry Scheme, inter-alia, in the State of Odishain association with the Farmers by bipartiteagreement. As per the agreement part saleconsideration of supply of seedlings is to be paid tothe Company at the time of harvesting of theplantation. Accordingly, part sale consideration ofRs. 2.22 Lacs relating to this year along with interestwill be received by the Company at the time ofharvesting. Based on the legal opinion obtained by

the Company, the same will be accounted for in theyear in which the plantation is harvested.

10. Pursuant to Rehabilitation Scheme Sanctioned byBoard of Industrial & Financial Reconstruction (BIFR),the Company is exempted from payment of electricityduty on power consumed for a period of 10 yearsfrom the date of sanction of the scheme. BIFR hasdischarged the Company from the purview of SickIndustrial Companies (Special Provision) Act,1985.

Accordingly Rs. 197.75 Lacs being amount paid forthe period from 1st April, 2000 to 31st March, 2008and considered as income in earlier years have beenshown as Other Advance under Long Term Advance.

Based on legal opinion obtained by the Company, allterms and conditions so far not implemented byrespective agencies as stated in the RehabilitationScheme sanctioned by BIFR are still in force.

11. The Company’s CDM Project already been registeredat UNFCCC and pending completion of certainprocedural formalities 1764076 tCER unit has notyet been received.

12. Trade Receivables outstanding for more than sixmonths from the date they are due for paymentincludes Rs. 337.82 Lacs (Previous Year Rs. 278.25Lacs) which have become overdue. Legal and otherpersuasive steps have been taken for recovery ofsuch debtors. Such debtors have been consideredgood and eventually recoverable. Accordingly, noprovision against the same has been considerednecessary.


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The estimates of future salaries increases, considered in actuarial valuations, take in to account of inflation, seniority, promotionand other relevant factors such as supply and demand in employment market.

(III) The Company has classified various employee benefits as under :

Year Ended Year Ended 31st March, 2016 31st March, 2015

(A) Defined Contribution PlansThe Company has recognised the following amounts in theStatement of Profit and Loss for the year :(i) Contribution to Provident Fund 14.89 20.25(ii) Contribution to Employees’ Pension Scheme 21.64 19.47(iii) Contribution to Employees’ State Insurance Scheme 1.45 1.22

(B) Defined Benefit PlansValuations in respect of Gratuity & Leave Encashmenthave been carried out by independent actuary as atthe Balance Sheet date

(i) Discount Rate (per annum) 7.80% 7.80%(ii) Rate of increase in Compensation Levels 7.00% 7.00%(iii) Rate of Return on Plan Assets 8.00% 8.00%(iv) Mortality Rate LIC(2006-08) ultimate LIC(2006-08) ultimate

15. EMPLOYEES BENEFIT(I) Defined Benefit Plans

GratuityThe Company provides for gratuity, a defined benefitretirement plan covering eligible employees. As perthe scheme of the Gratuity Fund Trust, administeredand managed by the Independent Board of Trustees,the Company first makes the payment to vestedemployees at retirement, death, incapacitation ortermination of employment of an amount based onthe respective employee’s salary and the tenure ofemployment and then gets the reimbursement fromit. Vesting occurs upon completion of five years ofservice. Liabilities with regard to the Gratuity Planare determined by actuarial valuation.Leave EncashmentThe Company makes the annual provision in theStatement of Profit and Loss for the leave liabilityon the basis of the actuarial valuation for the Leaveencashment Scheme which is an unfunded Plan forthe qualified employees.

(II) Defined Contribution PlansProvident FundThe employees of the Company receive definedcontribution for Provident Fund benefit. Aggregatecontributions along with interest thereon are paidat retirement, death, incapacitation or terminationof employment. Both the employees and thecompany make monthly contributions at specifiedpercentage of the employee’s salary to the concernedProvident Fund Authorities. The Company has noliability to Fund the shortfall in the interest over thestatutory rate declared by the Government.Employees State InsuranceBoth the employees and the Company make monthlycontributions at specified percentage of theemployee’s salary to the concerned ESI Authorities.Other Defined contribution for Employee BenefitsThe defined contribution for Employees Stateinsurance, Leave Travel Allowance and Medicalreimbursements are recognized on actual basis inthe Statement of Profit & Loss in the year when theeligible employee actually renders the service.

(Rs. in lacs)


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Gratuity Leave Encashment andCompensated Absence

(funded) (unfunded)31.03.16 31.03.15 31.03.16 31.03.15

* Includes Rs. 2.23 Lacs and Rs. 12.08 Lacs of gratuity and leave encashment respectively relating to employees who are no morewith the Company and outstanding pertaining to them has been transferred to other liabilities.

(i) Changes in the Present Value of Obligation (a) Opening Present Value of Obligation 166.82 161.68 85.83 76.91 (b) Interest Cost 13.01 14.13 6.69 7.00 (c) Past Service Cost - - - - (d) Current Service Cost 12.54 12.99 9.46 11.56 (e) Curtailment Cost / (Credit) - - - - (f) Settlement Cost / (Credit) - - - -

(g) Plan Amendments Cost/(Credit) - - - - (h) Benefits Paid - (17.81) - (2.56) (I) Actuarial Loss / (Gain) (13.81) (4.17) (9.79) (7.08)

(j) Closing Present Value of Obligation 178.56 166.82 92.19 85.83(ii) Changes in the Fair value of Plan Assets (a) Opening Fair Value of Plan Assets 14.12 29.72 1.81 3.79 (b) Expected Return on Plan Assets 1.17 1.68 0.18 0.22 (c) Actuarial Gain/(Loss) (0.68) 0.25 (0.02) (0.07) (d) Employers’ Contributions 1.00 0.28 0.92 0.43 (e) Benefits Paid - (17.81) - (2.56) (f) Closing Fair Value of Plan Assets 15.61 14.12 2.89 1.81(iii) Category of Plan Assets

Administered by Life Insurance Corporation of India 100% 100% 100% 100%(iv) Reconciliation of the Present Value of Defined Benefit

Obligation and the Fair Value of Assets (a) Present Value of Funded Obligation 178.56 166.82 - -

(b) Fair Value of Plan Assets 15.61 14.12 2.89 1.81(c) Funded (Asset) Liability recognised in the Balance Sheet (Net) 162.95 152.70 89.30 84.02(d) Present Value of Unfunded Obligation - - 92.19 85.83(e) Unrecognised Past Service Cost - - - -(f) Unrecognised Actuarial (Gains) / Losses - - - -(g) Unfunded Net Current Liability recognised in the Balance Sheet 11.82 9.05 20.22 19.71(h) Unfunded Net Non-Current Liability recognised in the Balance Sheet 151.13 143.65 69.08 64.31

(v) Amount recognised in the Balance Sheet (a) Present Value of Obligation 178.56 166.82 92.19 85.83 (b) Fair Value of Plan Assets 15.61 14.12 2.89 1.81 (c) Current (Asset) / Liability recognised in the Balance Sheet (Net) 11.82 9.05* 20.22 19.71*

(d) Non-Current (Asset) / Liability recognised in the Balance Sheet (Net) 151.13 143.65 69.08 64.31(vi) Expenses recognised in the Statement of Profit and Loss (a) Current Service Cost 12.54 12.99 9.46 11.56 (b) Past Service Cost - - - - (c) Interest Cost 13.01 14.13 6.69 7.00 (d) Expected Return on Plan Assets (1.17) (1.68) (0.18) (0.22) (e) Curtailment Cost / (Credit) - - - - (f) Settlement Cost / (Credit) - - - - (g) Net actuarial (Gain) / Loss (13.13) (4.42) (9.77) (7.01) (h) Total Expenses recognised in the Statement of Profit and Loss 11.25 21.02 6.20 11.33

(Rs. in lacs)


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16. i) The Gratuity scheme is invested in a Group Gratuity policy offered by Life Insurance Corporation (LIC) ofIndia.The information on the allocation of the fund into major asset classes and expected return on eachmajor class are not readily available. The expected rate of return on plan assets is based on the assumedrate of return provided by the Company’s Actuary.

ii) The Leave Encashment scheme is invested in a Group Leave Encashment policy offered by Life InsuranceCorporation (LIC) of India. The information on the allocation of the fund into major asset classes and expectedreturn on each major class are not readily available. The expected rate of return on plan assets is based onthe assumed rate of return provided by the Company’s Actuary.

17. EARNING PER SHARE

18. DERIVATIVE INSTRUMENTSThe Company does not enter into any derivative instruments for trading or speculative purposes.

19. MICRO ENTERPRISES AND SMALL ENTERPRISESThere are no Micro and Small enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2016. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have identified on the basis of information available with the Company. This has been relied upon by the auditors

20. Previous year's figures have been regrouped/rearranged wherever considered necessary.

2015-16 2014-15Number of Equity Shares at the beginning of the year 18327400 18327400Number of Equity Shares at the end of the year 18327400 18327400Nominal value of each Equity Shares (Rs) 10 10Profit/(Loss) after tax (Rs in Lacs) (1,264.76) (1,007.53)Earnings Per Share (Basic and Diluted) (Rs) (6.90) (5.50)



For S M DAGA & CO.Chartered AccountantsFirm Registration Number: 303119E



N G Khaitan

Prabir Chakravarti


Vidula Jalan




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€¦ · · 2016-10-03NOTICE is hereby given that the 32nd Annual General Meeting of Mangalam...

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