- Hindustan Newsprint Limited

Shri. Anant G. Geete
Hon'ble Cabinet Minister for Heavy Industries & Public Enterprises
Shri. G.M. Siddeshwara
Hon'ble Minister of State for Heavy Industries & Public Enterprises
Sri. Rajan S. Katoch
Secretary, Heavy Industries
BOARD OF DIRECTORS
Shri. Shashi Kanth Jain
Chairman
Shri. S. N. Bhattacharyya
Director
Shri. K. S. Rajagopal
Director
Shri. K. K. Suresh Kumar
Managing Director
Shri. Arvind Kumar
Director
Shri. Ghanshyam Sharma
Director (Finance)
Shri. Guljit Kapur
Director
4
CONTENTS
Page
Board of Directors
6
Notice
7
Five Years Digest
9
Employment Cost Summary
10
Directors’ Report
11
Comments of the Comptroller and
Auditor General of India
40
Auditors’ Report
41
Balance Sheet
48
Statement of Profit & Loss
49
Cash Flow Statement
50
Notes forming part of the Financial Statements
52
5
BOARD OF DIRECTORS
Chairman
Managing Director
Directors
:
:
:
:
Shri. Shashi Kanth Jain
Shri. M.V. Narasimha Rao (up to 31.07.2015)
Shri. K.K. Suresh Kumar
Shri. S.N.Bhattacharyya
Shri. Ghanshyam Sharma
Shri. Arvind Kumar
Shri. K.S.Rajagopal
Shri. Guljit Kapur
Air Cmde Prodip Kumar Mukherjee VSM
( up to 31.01.2015)
Sri. S.K. Singh (up to 30.01.2015)
Sri. K.S. Srinivas IAS (up to 21.01.2015)
Shri. Sathyajeet Rajan, IAS (up to 18.06.2015)
Shri. Prakash Premchand Mugdiya
(up to 07.05.2015)
Company Secretary
Bankers
:
:
Statutory Auditors
:
Legal Advisers
:
Registered Office
:
Shri. Ajith John
Central Bank of India
Corporation Bank
State Bank of Travancore
HDFC Bank Ltd
State Bank of India
Indian Bank
Canara Bank
Federal Bank
IndusInd Bank
M/s Ayyar & Cherian
Chartered Accountants
37/2010C (Plot No.53), Jawahar Nagar
Mutathil Lane (North)
Near Sastha Temple, Kadavanthara, Kochi
M/s Menon & Menon, Kochi
M/s Menon & Pai, Kochi
Newsprint Nagar
Kottayam District, Kerala
Pin Code – 686 616.
Phone : 04829 256211-21
Fax: 04829 251911/257587
Web: www.hnlonline.com
Email: secretarial@hnlonline.com
CIN : U21013KL1983GOI003735
6
NOTICE
Notice is hereby given that the 32nd Annual General Meeting of the Members of Hindustan Newsprint Limited
will be held at its Registered Office at Newsprint Nagar, District Kottayam, Kerala State on Wednesday, the
30th September, 2015 at 4 p.m., to transact the following business:A. Ordinary Business:
i)
To receive, consider, approve and adopt the Director’s Report and the Audited Balance Sheet as at 31st
March 2015 and Profit and Loss Account for the year ended on that date, Cash Flow Statement as at
31st March 2015 and notes forming part of accounts together with the Report of the Statutory Auditors
thereon and also the Comments of the Comptroller andAuditor General of India.
B. Special Business:
(i)
To ratify the remuneration of the Cost Auditors for the financial year 2015-16 and in this regard to
consider and if thought fit, to pass, with or without modification(s), the following resolution as an
Ordinary Resolution:
“Resolved that pursuant to the provisions of Section 148 and all other applicable provisions of the
Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014 (including any statutory
modification(s) or re-enactment thereof), the Cost Auditors appointed by the Board of Directors of the
Company, to conduct the audit of the cost records of the Company for the financial year 2015-16, be
paid the remuneration of Rs.50,000/- plus reimbursement of actual travelling and other out of pocket
expenses.
Resolved further that the Managing Director or the Company Secretary of the Company be and is
hereby authorized to do all acts and take all such steps as may be necessary, proper or expedient to give
effect to this resolution.”
By order of the Board
For Hindustan Newsprint Limited
Company Secretary
Newsprint Nagar, District Kottayam
Dated 28th September, 2015
Note:
1. A Member entitled to attend and vote is entitled to appoint a proxy to attend and vote in his stead. A
proxy need not be Member of the Company. Proxies to be effective must be received by the
Company at its Registered Office not less than 48 hours before the Meeting.
2. Explanatory statement required u/s 102 of companiesAct 2013 is attached.
3. Consent for shorter notice from all members entitled to attend and vote at this meeting has been
obtained.
7
Explanatory Statement
Item No. B(i)
th
The Board of Directors in its 137 meeting appointed M/s B V Subramaniam & Co, CostAccountants as the Cost
Auditors of the Company for the year 2015-16. The Board also approved remuneration of Rs.50,000/- plus
reimbursement of actual travelling and other out of pocket expenses.
As per Rule 14 of Companies (Audit and Auditors) Rules, 2014 read with section 148(3) of the Companies Act,
2013, the remuneration as approved by the Board of Directors need to be ratified subsequently by the
shareholders. Accordingly, members are requested to ratify the remuneration payable to the Cost Auditors for the
financial year 2015-16.
None of the Directors or Key Managerial Personnel of the Company or their relatives is in any way, concerned or
interested, financially or otherwise, in the resolution.
The Board recommends the resolution for your approval.
By order of the Board
For Hindustan Newsprint Limited
Company Secretary
Newsprint Nagar, District Kottayam
Dated 28th September, 2015
8
FIVE YEAR DIGEST
Production in MT
Sales in MT
Sales Turnover
Other Income
Cost of good sold (exclu int & depn)
Gross Margin
Interest
Cash Profit (+)/ deficit(-)
Depreciation & DRE
Profit /(Loss) before Tax
Provision for Tax
Profit /(Loss)after Tax
Equity
Reserves and Surplus
Deferred tax liability
Loans(excluding interest accrued)
Long-term
Short-term
Gross Block
Capital Work in Progress
Net Fixed Assets(excluding
work in progress)
Deferred revenue expenditure
Current assets, Loans and
Advances
Current Liabilities and Provision
Working Capital
Capital Emloyed
Net worth
Ratios
Gross margin to capital employed
Cash Profit to capital employed
P B T as a percentage of sale
Debt equity ratio
No of employees
(` Lakh)
2010-11
104911
104911
30166
1352
29739
1779
62
1717
1176
541
38
504
10000
9214
3017
1367
0
1367
41960
787
14687
2014-15
95739
96662
34098
792
34307
583
1218
(635)
370
(1005)
(224)
(781)
10000
6271
2416
12754
270
12484
47080
1075
16098
2013-14
101108
98181
34562
1614
35049
1127
985
142
1038
(896)
(10)
(886)
10000
7207
2645
10912
0
10912
44764
1024
14311
2012-13
101597
101597
32358
437
32885
(90)
705
(795)
1022
(1817)
(8)
(1809)
10000
8094
2656
7454
0
7454
43611
918
14333
2011-12
102450
102450
31504
2489
32066
1927
368
1559
1154
404
(285)
689
10000
9903
2664
3835
0
3835
41916
887
13707
0
24465
0
22677
0
18970
0
15455
0
15491
21416
17557
12781
7031
8545
3049
19147
16271
5120
19432
17207
6189
20522
18094
8424
22131
19903
6946
21633
19214
0.030
(0.033)
-2.95%
0.027
640
0.058
0.007
-2.59%
0.000
707
(0.004)
(0.039)
-5.62%
0.000
731
0.087
0.070
1.28%
0.000
809
0.082
0.079
1.79%
0.000
909
9
EMPLOYMENT COST SUMMARY.
For the Year ended
(A) Salaries and Wages,Ex-gratia etc.. (Rs.Lakh)
a) Basic Pay, PP & NPA
b) NPA
c) VDA & Dearness Pay
d) Salaries & Wages -Trainees
e) HRA
f) Other allowances like CCA,Shift Allowance,
Sp.Allowance Canteen Allowance, Steering
Allowance, Washing Allowance, PTA, Hill
Tract Allowance etc…
g) Conv.Reimburesement & Fixed Conv.Allowance
h) Tution Fee
i) Overtime
j) Leave Encashment
Sub Total(a-j)
Provision for pay revision
Salaries and wages incl.provision for pay revision
Ex-gratia for VRS Optees
Sub total(A)
(B)Employees Benefits (Rs.Lakh)
a) Provident Fund and other Fund
b) Gratuity
c) Productivity Linked Incentive
d) Township(Net after township income)
e) Education
f) Medical
g) Leave Travel Concession
h) Canteen subsidy (net)
i) Others(Grants and Subsidies to Club,
Uniforms and Liveries,Training exp.etc…)
Sub Total(B)
Total(A+B) (Rs.Lakh)
31/3/2015 31/3/2014 31/3/2013
31/3/2012
31/3/2011
1542.37
3.56
1454.90
282.95
120.08
2149.56
3.39
1331.53
206.41
127.16
2295.14
3.30
1173.38
157.75
138.74
2720.30
3.11
1,297.45
110.42
153.81
2,278.30
2.79
1,574.52
34.39
159.75
12.31
78.52
2.51
319.44
433.71
4250.35
0.00
4250.35
0.00
4250.35
44.12
85.80
4.40
425.89
304.23
4682.50
0.00
4682.50
64.88
4747.38
59.28
85.90
5.99
401.98
94.19
4415.65
4415.65
2.92
4418.57
67.43
101.87
7.07
383.27
0.00
4844.73
0
4844.73
0.00
4844.73
80.37
116.94
3.83
263.54
0.00
4514.43
378.91
4893.34
0.00
4893.34
460.42
186.13
0.00
186.27
26.59
181.67
5.76
208.32
117.63
484.46
126.30
0.00
165.71
24.00
174.05
4.86
217.04
117.63
480.30
0.00
0.00
180.35
21.95
226.56
11.89
165.54
121.65
476.39
0.00
0.00
185.01
20.28
236.97
5.54
168.39
173.16
410.34
0.00
63.67
165.49
26.57
249.43
6.25
103.01
111.75
1417.13
5667.48
1314.05
6061.43
1208.24
5626.81
1265.74
6110.47
1136.51
6029.85
640
707
731
809
909
Average salaries and wages etc.per employee
per annum (Rs.)
664117
671483
604456
598854
538321
Average cost of employee benefits per
employee per annum (Rs.)
221427
185862
165286
156457
125029
Average employment cost per employee
per annum (Rs.)
-including provision for pay revision
-excluding provision for pay revision
885544
885544
857345
857345
769741
769741
755311
755311
663350
621666
No.of Employees
10
DIRECTORS’ REPORT TO THE SHAREHOLDERS
To
The Members
Hindustan Newsprint Ltd
Gentlemen,
Your Directors present their 32nd Annual Report with the Audited Statement of Accounts, Auditors’ Report and
Comments of the Comptroller andAuditor-General of India for the year ending March 31, 2015.
1.
Operational and Financial Performance:
During the year under review, your Company achieved a production of 101986 MT(including trial
production of 6247 MT writing & printing paper), which is 102% of the installed capacity as compared
to 103360 MT(including 2252 MT writing & printing paper) during the previous year. During the year
your Company sold 101698 MT(including 5036 MT of writing & printing paper) as against
100008MT(including 1827 MT writing & printing paper) during the previous year. The sales during the
year was ` 340.98 crore as compared to ` 345.62 crore during the previous year. The stock was
3246MT(including 1636 MT writing & printing paper) at the end of 31.03.2015.
The highlights of performance of your Company during Financial Year 2014-15 together with
corresponding figures for the Previous Year are given below.
1.1 Production Summary:
2013-14
2014-15
PRODUCT
INSTALLED
CAPACITY Production
(MT)
(MT)
Capacity
Utilisation
%
Production
(MT)
Capacity
Utilisation
%
Saleable Newsprint
100000
101986*
102
103360*
103
Chemi Mech Pulp
60000
41855
69.8
42939
72
Chemical Pulp
27400
17469
63.8
16876
62
De-inked Pulp
33000
28568
86.6
29723
90
* includes trial production of 6247 MT(Previous year 2252MT) of writing and printing paper.
11
1.2 Financial Results
(` Lakh)
Particulars
2014-15
2013-14
34098
34562
582
1127
Interest
1218
985
Cash Profit / (Loss)
(636)
142
370
1038
(1006)
(896)
Provision for taxation
(225)
10
Profit/(Loss) after tax
(781)
(886)
Sales Turnover
Profit/(loss) before Interest Depreciation and Income Tax
Depreciation and Deferred Revenue Expenditure Write-off
Profit/(Loss) before tax
1.3
Contribution to the Exchequer:
During the year under review, your Company contributed to the Exchequer an amount of ` 723.94 lakh
by way of duties and taxes, the break-up of which, together with the comparable figures of the previous
year, is given below:(`Lakh)
Particulars
2014-15
2013-14
118
175
Excise Duty
184.91
95
CST/VAT
340.47
399
66
56
Corporate Income Tax
0
5
Dividend Tax
0
0
14.58
21
723.96
751
Customs Duty
Rates & Taxes
Service Tax
Total
2.
STATE OF COMPANY’SAFFAIRSAND FUTURE OUTLOOK
2.1 MarketingActivities:
Your Company sold 101698MT (including 5036MT of writing and printing paper ) as compared to 100008
MT(including 1827MT of writing & printing paper) during the previous year. The net sale realization on
newsprint improved by about ` 73 per MT during FY2014-15 as compared to FY2013-14.
2.2 Fibre Development and Procurement(FDP)Activities
The FDP Department of your Company, besides fulfilling the requirement of fibrous raw materials
required for achieving the targeted production, is also carrying out the following activities for ensuring
long term fibre security for your company’s operations.
12
Captive Plantation
Captive Plantations were raised in an area of 3625.173 ha in the land allotted by Govt. of Kerala on
lease. Out of this 327.291 ha was included in National Parks & Sanctuaries, 190.423 ha comes under
the core area of Periyar Tiger Reserve and 365.48 ha plantations are under encroachment/threat of
encroachment and litigation. The effective area of plantations with HNL at present is 2670 ha which are
being maintained properly. During 2014-15 materials from an area of 850 ha of Captive Plantations in
Munnar, Kottayam and Malayattoor Divisions were extracted. In these areas coppice crops will be
maintained or fresh plantations will be raised as per requirement.
Encroachment in Captive Plantation area
Your Company has been facing severe encroachment problems in the Captive Plantation areas located in
Munnar Division. The programme for extraction of material from Captive Plantation areas was
disrupted earlier by threat of encroachment and disputes regarding ownership of land between Revenue
Department and State Forest Department. However, due to the concerted efforts of Revenue, Police and
Forest Departments along with the wholehearted support of the Government, the Company extracted
the pulpwood available in the Captive Plantation areas at Chinnakkanal and Suryanelli in Munnar
Division. However, the threat of encroachment still prevails in the area. Even though the Company has
taken necessary actions including moving the Hon’ble High Court of Kerala for obtaining back the
possession and also invoked the Magisterial powers of the Estate Officer of the Company for evicting
the encroachers completely, our efforts still remain to be materialized in ameliorating the issues in its
entirety.
Purchase at Gate Scheme (PaG)
Your Company has been procuring materials under the Purchase at Gate Scheme from 1998 onwards.
Due to many reasons the availability of pulpwood under PaG Scheme was reduced. Mainly pulpwoods
like Eucalyptus, Acacia, Mangium etc. have found an alternative market as they are being purchased by
plywood industries paying a very high price. The total quantity of pulpwood, mainly Bamboo, procured
under Purchase at Gate Scheme during 2014-15 was 2050 MT.
Tissue culture Bamboo
In view of the dwindling availability of Bamboo in the state resulted from gregarious flowering, your
company has introduced a scheme to increase the Bamboo resource in the State. This scheme envisages
promotion of cultivation of high yielding thorn-less Bamboo propagated through Tissue Culture
method. About 50,000 plantlets were sold/distributed among farmers through organizations so far.
Plantations using Tissue Culture Bamboo plantlets are being raised in HNL Compound every year in the
available area. The balance plantlets are being multiplied again for next year planting programme and
distribution.
2.3 Expansion cum Diversification Project (EDP)
Earlier proposal for Expansion-cum-Diversification Project (EDP) could not be implemented due to
steep increase in project cost and was kept in abeyance. Subsequently, it was planned to move ahead
with EDP in a phased manner. In the first phase, it was decided to go for a 300 TPD Deinking Plant
suitable for manufacture of Writing and Printing grade paper. M/s Tata Consulting Engineers Limited
(TCE), Mumbai was appointed as the Project Management consultant for the project. They have done
the techno-commercial evaluation of offers and submitted their final recommendation. Further process
is stalled since the financial tie up and approval from GoI is still pending.
13
Since the new paper machine project was kept in abeyance, as a short term measure with low investment,
two new proposals were mooted to grab the emerging market and for improved margin. Accordingly, it
was decided to go for refurbishment of the existing paper machine to provide swing facility and for
technology up-gradation and capacity enhancement of existing deinking plant to produce Writing &
Printing grade pulp besides newsprint grade pulp. Necessary approvals are being obtained for these
proposals.
Through refurbishment of existing paper machine, it is envisaged production of Writing & Printing
grade paper besides low grammage (upto 40 GSM) newsprint of better quality. The swing facility will
provide flexibility to HNL to switch over to a product depending on the market demand and price. M/s
SPB Projects and Consultancy Limited, Chennai has been appointed as Project Management Consultant
for Paper Machine Refurbishment. They have already submitted the draft Request for Pre-Qualification
(RPQ) documents and approval/financial tie up for the project is in progress.
Through Upgradation of existing 100 TPD DIP, it is envisaged a capacity enhancement to 150 TPD and
to produce Writing & Printing grade pulp besides newsprint grade to use in Paper Machine. The tender
has been released for selecting a suitable bidder for the project. We have received three offers for the
Upgradation of existing DIP to 150 MT per day. M/s TCE, Mumbai was appointed as the project
management consultants and the evaluation of the techno-commercial bids were carried out by them
along with HNL. The Performance Guarantee (PG) parameters were not acceptable to both the qualified
bidders and M/s TCE, our consultants for the project finally recommended for the cancellation of the
tender. The recommendation of TCE was agreed by HNL project team and finally approved by HNL
board in the 136th meeting on June 29, 2015. An alternate proposal for a new DIP of suitable capacity is
being worked out in consultation with TCE.
With regard to the 80 MW power plant on BOOT basis, M/s aXYKno Capital Services, Nagpur was
appointed for providing advisory services for selection of Developer. M/s Bhagavathi Ana Labs Pvt.
Limited, Hyderabad was appointed as Environment Consultant for obtaining environment clearance for
80 MW coal based power plant. Discussions with M/s Power Trading Corporation (PTC) are in progress
for implementation of the project.
Regarding the development of land at Kochi & Vandiperiyar under joint venture with KTDC, they have
informed their inability to proceed with the proposal at present. The proposal for sale of land also was
ruled out considering the cumbersome process of obtaining permission from Cabinet. Alternatively,
discussions are in progress with Canara Bank and other prospective parties to explore the possibility of
leasing out the land at Kochi and Vandiperiyar.
2.4 Quality and Environmental Management System and OHSAS Certification
Your company has been certified in Quality Management System under the standards ISO 9001:2008,
Environmental Management System under ISO 14001:2004 and Occupational Health and Safety
Assessment Series (OHSAS 18001:2007). The system continues to be in place with regular monitoring
and surveillance audits conducted as per requirements of the Standards.
Your Company has also met the majority of the action points as per Charter on Corporate Responsibility
for Environmental Protection (CREP).
2.5 Human Resource Development
As a visionary in development, your company has given great prominence to Human Resources
Development (HRD) by imparting need based training, interceding internal or external resource
persons. This develops the key competencies of the employees that enable them to perform current and
future jobs through planned learning activities and enable them to manage change.
14
The growth and advancement needs of the employees for the fulfillment of the organization’s objectives
have been factored into the HRM policies of the Company.
Altogether, HNL has accomplished the task for the year under review by conducting 22 in-house
training programmes in which 626 persons participated. In addition, the Company also conducted 13
External programmes where about 24 persons participated in various training institutions of repute.
st
FACTS AND FIGURES (1st April, 2014 to 31 March, 2015) :
(a)Training Programmes
Type of Trainings
No. of Trainings
Participants
In House
22
626
External Programme
13
24
Topics
No. of Programmes
Participants
Safety First Aid & Fire,
Preparedness etc.
9
162
Energy Conservation /
OHSAS &
Environment
Management System
8
121
(b)Awareness Programmes:
(c) Apprenticeship Training (G.O.I/year)
Topics
No. of Apprentices as on 31/03/2015
Trade Apprentices
90
Diploma
14
VHSE
1
Graduates
32
(d) Educational institutions request
Topics
No. of Apprentices as on 31/03/2015
Vocational Training/Project
Work/Short Term Training
131
Mill Visit- Students/Teachers
-
15
2.6
Industrial Relations and Employee Welfare Measures
As in earlier years, this year also the Company was very much successful in continuing the harmonious
Industrial Relations. The participative work culture of the Company through constant interactions with
the trade Unions and their representatives at a political levels together has facilitated in having a very
healthy Industrial Relations and ensuing zero man days loss due to strike.
The welfare measures offered to the employees and their dependants were also continued during the
year. HNL as a socially responsible organization has been involved in various social activities like
providing basic amenities like, drinking water, school facilities, free medical-check up to nearby
villages and villages near the plantation areas etc.
2.7
Employee Participation in Management
In order to inculcate a culture of participative management various committees like Works Committee,
Safety Committee, Canteen Committee, Grievance Committee and bipartite participative forum like
Shop Floor Councils and Plant Floor councils are functioning successfully. The Communication
meeting between Unions and HoDs is also continued for better understanding. Also more emphasis is
given to Health and Safety of employees with the OHSAS Certification, thereby improving Employees
awareness in healthy food habits and life style.
2.8
Position of employment of members of SC/ST/OBC, etc.
The position of Employment of the members of Scheduled Caste (SC)/ Scheduled Tribes (ST)/OBC/Ex
service man and Persons with Disabilities (PWD) as on March 31, 2015 is as per Annexure III
attached.
2.9
Position of Women employees:
The particulars of women employees in the Company as on March 31,2015 are given in Annexure-IV
attached. Disclosure under S.21 of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal)Act 2013 is given inAnnexure - V.
2.10
Promotion of Official Language usage
The Company continued to implement the Presidential Directives on implementation of the official
Language (OL).As part of this, intensive training programmes, Official Language Month and periodical
Workshop including High Level OL Workshop and Hindi Computer Training Programmes for the
Employees/Officers of all categories were arranged. A number of competitions in Hindi were conducted
and the winners were suitably awarded. In terms of excellent implementation of OL Rules/Policies of
Government of India, the company has been awarded with prestigious Official Language Shield of
Town Official Language Implementation Committee (TOLIC), Kottayam. In the joint OL competitions
conducted by TOLIC, Kottayam, a number of employees and children of employees have been awarded
with prizes. Employees of the Company as well as their children were awarded with cash prizes under
different OL Incentive Schemes. The Company’s Website is already functioning in trilingual form i.e
Malayalam, Hindi and English. Unicode is now being used in different departments. Besides this is in
OL Section, work is done on Unicode based Computer. Web magazine e-Drishti is also coming out from
time to time.
The Company has taken utmost effort for proper and effective implementation of Annual Programme of
the Department of Official Language, Ministry of HomeAffairs, Government of India.
16
2.11Assistance/Recognition from Government of Kerala
Govt. of Kerala during 2010-11 had fixed rates of Raw materials like Acacia, Mangium and Flowered
Bamboo at a reasonable level which were lesser than the rates of the previous year. Even though your
Company had requested to retain the prices of 2010-11, during the year 2011-12 also there was some
increase in the prices of Eucalyptus and Reed. Again higher rates were fixed for 2012-13 year for
various raw materials. The price was further increased during 2013-14. Your Company has already
requested the GoK to reduce the rates to the level of 2011-12. Govt. of Kerala have examined the matter
in detail and issued orders to continue the prices notified for Eucalyptus, Reed and Bamboos for the year
2012-13 through 2013-14 also. The Government also extended support to your company by not
increasing the price for Acacia and Mangium which are the major raw materials being collected during
these two years.
We have also requested to reduce the raw materials prices for 2014-15 and 2015-16. The Government
have considered the request and have ordered to allow raw materials to the Company @ ` 1000/- per MT
as an interim measure till the Expert Committee constituted to make recommendations on reduction of
prices applicable to HNL are submitted. The reduced interim prices of ` 1000/-per MT for raw materials
is being paid from May 2015 onwards. The State Government have also considered the company’s
request to allot more forest land on lease basis for raising captive plantations in order to make available
raw materials at lesser cost.
2.12
Vigilance
Your company is committed to the highest ethical practices in all its activities. In order to maintain the
values of ethics, probity, transparency and public accountability a multi pronged strategy is adopted in
HNL which consists of preventive, deterrent and punitive measures. Various preventive vigilance
action, routine and surprise inspection, surveillance were carried out including monitoring through
Night Visits. Follow up action was taken with recommendations for systems improvements. To ensure a
culture of honesty and transparency in the company, the guidelines of CVC on leveraging technology
are adhered to. Tender documents and contracts finalized are uploaded on the company website
regularly. Payments are made mostly through EFT/ RTGS. Various system improvements and
preventive vigilance activities are undertaken to sensitize employees about corruption and measures to
combat it in order to ensure probity and integrity in the organization so that the company can gain
through greater transparency and optimal management of resources. Training programmes are
conducted to sensitize the officials regarding probity and honesty. For participative vigilance
management, stakeholders meeting were organized in the company.
2.13 Business Outlook
World bank has projected 7.5% growth rate for India in the year 2015-16 and it could reach 8% in
Financial Year 2017-18. International Monetary Fund has predicted that India is set to become the
world’s fastest growing major economy by 2016.
Even though newspaper industry continues to shrink in its most established markets, in China and in
India it is growing well as consumption is spurred by rising level of literacy, expanding economies and
growth in population. It is estimated that two countries combined will account for 57.3% of global
average daily unit circulation print in 2019 up from 49.7% in 2014. The prospects of newspaper industry
in India is considered to be bright especially on account of growth in Tier II and Tier III cities.
CRISIL expects demand for newsprint to grow 9.5%-10.5% CAGR over the next 5 years – from 2.1
MTPA in 2012-13 to 3.5 MTPA in 2017-18. However due to import with the advantage of zero customs
duties would put the domestics newsprint manufacturers under stress as happened in the past few years.
17
As paper industry is both energy-intensive and capital intensive, innovation to overcome the challenges
will only drive the future of the industry.
3.
DIVIDEND
In view of loss incurred during the year under review and losses of earlier years, your Directors do not
recommend any dividend during the year under review.
4.
RESERVES
Your Directors do not propose to carry any amount to reserves for the year under review.
5.
DETAILS OF SUBSIDIARY / JOINT VENTURES /ASSOCIATE COMPANIES
The company continues to be a subsidiary of Hindustan Paper Corporation Limited. The Company does
not have any subsidiary or Joint Venture /Associate Companies.
6.
DETAILS OF DEPOSITS
The Company has neither accepted nor renewed any deposit under S.73 of the Companies Act, 2013
during the year under review.
7.
CORPORATE GOVERNANCE
Areport on Corporate Governance is attached asAnnexure II.
8.
Corporate Social Responsibility
Your Company, a premier Public Sector Undertaking has always given top priority for its obligation to
the society and the people in need especially those residing in nearby villages with special emphasis for
the surrounding areas of the mill. The Company continues its’ pursuit in making its presence in social,
economical, infrastructural, educational, cultural activities etc., development for augmenting the
quality of life of people in areas surrounding the mill and the society in general. However provisions of
CompaniesAct 2013, relating to Corporate Social Responsibility are not applicable to the company.
9.
Directors’Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby
submit its responsibility Statement:
1.
In the preparation of the annual accounts, the applicable accounting standards had been
followed along with proper explanation relating to material departures;
2.
The directors had selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state
of affairs of the company at the end of the financial year and of the loss of the company for that
period;
3.
The directors had taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of this Act for safeguarding the assets of the company and
for preventing and detecting fraud and other irregularities;
4.
The directors had prepared the annual accounts on a going concern basis; and
5.
The directors had devised proper systems to ensure compliance with the provisions of all applicable
laws and that such systems were adequate and operating effectively.
18
10.
EXTRACT OFANNUALRETURN
The extractAnnual Return ( Form MGT 9) is attached asAnnexure VI to this report.
11.
NUMBER OF MEETINGS OFTHE BOARD OF DIRECTORS
The Board of Directors duly met 5 times during the financial year from 1st April 2014 to 31st March,
2015. The dates of the meetings are given elsewhere in this report in Report on Corporate Governance.
12.
AUDITORS
M/s. Ayyar & Cherian, Chartered Accountants, Post Box No.9, Keralapuram Buildings, Sreenivasa
Ayyar Road,Kottayam, were appointed as Auditors of your Company for the year 2014-15 vide
Lr.No.CA.V/COY/CENTRAL GOVERNMENT,HNEWSP(1)/57 dated 28/7/2014 by the Comptroller
andAuditor General of India, Govt of India.
13.
Comments of the Comptroller andAuditor General of India
The comments of the Comptroller and Auditor General of India on the Accounts of the Company for the
year ended 31st March 2015 are being given inAnnexure VIII forming part of this report.
14.
Replies to Comments of the StatutoryAuditors
Replies to comments of the StatutoryAuditors are given inAnnexure- VII of this report.
15.
COSTAUDIT
Ministry of Corporate Affairs has issued a notification on 30th June, 2014 wherein Paper Industry was
excluded from maintaining cost records for cost audit for the Finance Year 2014-15 under Companies
(Cost Records andAudit ) Rules, 2014.
Ministry of Corporation Affairs vide notification dated 31st December, 2014 has included Paper
Industry for maintaining Cost Records for Cost Audit from the Financial Year from the financial year
2015-16 onwards. The Board has approved appointment of M/s B V Subramaniam & Co, Cost
Accountants as the CostAuditor of the company for the Finance Year 2015-16.
16.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER S.186 OF
THE COMPANIESACT, 2013
The Company has not advanced any loans, provided any guarantee or made any investment under
Section 186 of the CompaniesAct, 2013 during the period under review.
17.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
There were no contracts or arrangements with related parties referred to in Section 188(1) of the
Companies Act, 2013 read with rules prescribed under Chapter XII relating to Meetings of Board and its
Power as amended from time to time.
18.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION
OFTHE COMPANY
There have been no material changes and commitments, if any, affecting the financial position of the
Company which have occurred during the period under review.
19
19.
PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTIONAND FOREIGN EXCHANGE EARNINGAND OUTGO
The particulars in respects of conservation of energy, technology absorption and foreign exchange
earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with the
Companies (Accounts) Rules, 2014 is given inAnnexure I.
20.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK
MANAGEMENT POLICY
Your directors are addressing various risks impacting the Company on need basis.
21.
CHANGES IN DIRECTORSAND KEY MANAGERIALPERSONNEL
Details of changes in Directors and Key Manager Personnel have been provided elsewhere in this report
in report on Corporation Governance.
22.
VIGILMECHANISM
As required under section 177(9) of the Companies Act, 2013, the Company has established a Vigil
Mechanism for the directors and employees to report genuine concerns. It provides safeguards against
victimization of persons who use such mechanism and make provision for direct access to the
Chairperson of theAudit Committee in exceptional cases.
23.
SIGNIFICANTAND MATERIALORDERS PASSED BYTHE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators / Courts which would impact the going
concern status of the Company and its future operations.
24.
PARTICULARS OF REMUNERATION
During the financial year under review, the Company did not have any employee for the whole or part of
the year who is receiving an aggregate remuneration of ` 60 lakhs per annum or ` 5 lakh per month.
Therefore the particulars of the employees under section 197(12) of the Companies Act, 2013 read with
Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 may be
treated as NIL.
25.
ACKNOWLEDGMENT
Your Directors wish to place on record their sincere appreciation of the dedicated and enthusiastic efforts
of the employees at all levels for the smooth conduct of business operations of your Company. Your
Directors acknowledge the guidance and assistance received from the Department of Heavy Industry,
Ministry of HI&PE, Ministry of Environment & Forests, Govt. of India, the Govt. of Kerala and the
Holding Company, Hindustan Paper Corporation Ltd, from time to time. Your Directors are also
thankful to the Comptroller and Auditor General of India, the Statutory Auditors and the Cost Auditors
for their valuable suggestions and guidance. Your Directors are also grateful to the Customers,
Suppliers/Vendors and Bankers for their continued patronage and support.
For and on behalf of the Board of Directors of
Hindustan Newsprint Limited
Chairman
Place: Newsprint Nagar
Date: 28th September 2015
20
ANNEXURE - I
Conservation of Energy, Technology Absorption, Foreign Exchange Earning and Outgo under Section
134(3)(m) of the CompaniesAct, 2013 read with the Companies (Accounts) Rules, 2014
A CONSERVATION OF ENERGY
I) ENERGY CONSERVATION SCHEMES COMPLETED DURING 2014-15
1. Replacement of Centac #1 Compressor unit with an energy efficient one. An approximate saving of
about 500 units per day could be achieved through this.
2. Refiner operation in Stock Preparation area of Paper machine was optimized from 24 Hours to 18-20
Hours by enhancing the storage capacity of refined pulp and modifying the pipe lines. An average daily
saving of about 2000 units could be achieved through this.
3. Usage of 5400 MT Wood fines and 100 MT of DIP/ETP Sludge (Process waste) as fuel in FBC boilers.
An equivalent coal saving of about 4500 MT could be achieved.
4. Overhauling of Turbo generator #1 (15 mw) and other related components including condenser, cooling
tower, ejectors etc. in line with the recommendations of the Central Power Research Institute. Coal
consumption and the steam to coal ratio has been considerably improved through this.
5. Variable frequency drive was installed for 831-33A. A saving of about 5000 units per annum has been
achieved through this.
6. Replacement of conventional motors with Energy efficient motors (4 Nos). An approximate saving of
0.20 Million KWHr could be achieved through this.
ENERGY CONSERVATION SCHEMES TO BE IMPLEMENTED DURING 2015-16
1. Installation of 9 Nos of variable frequency drives in systems which could be run at reduced speeds in
normal operation including CMP MC Pump, CMP HD Tower agitator, DM Booster etc. An energy
saving to the tune of 1000000 units is being targeted through this.
2. Installation of a Bio Gas plant for the Company Guest House.
3. Replacement of conventional asbestos sheets in plant areas including the DIP Godown (20 Nos) with
transparent sheets to enhance green lighting in some more areas.
4. Improvement of steam supply system by proper insulation of lines, arresting leakages and replacing
faulty steam traps.
5. Replacement of Conventional motors with energy efficient motors as an ongoing scheme to improve
energy efficiency.
6. Replacement of conventional street lights with energy efficient LED Lights.
7. Retrofitting of conventional Lighting fixtures in the Conference halls with latest LED Fittings.
21
CONSUMPTION PER UNIT OF PRODUCTION
Production details
Unit
Norm
2014-15
2013-14
Production
MT
110000
101986
103360
Electricity
KWH/MT
1600
1685
1659
Furnace Oil
Litre/MT
18.5
17.1
17.33
Coal
MT/MT
1.42
1.36
1.45
C.V of Coal (ADB)
Kcal/Kg
4200
4767
4566
Coconut shell/cashew shell
MT/MT
0
NIL
NIL
Wood dust (MT)
MT/MT
0
0.055
0.067
Clarifier Sludge
MT/MT
0
0.0006
0.01
Water
KL/MT
91
101
98
C.V of Coal (ARB)
Kcal/Kg
4113
4029
Consumption per Unit
Others
ii) The steps taken by the company for utilizing alternative sources of energy.
1. Wood – fines generated from the chipper house has been used as alternate fuel in Boilers and Lime Kiln.
An average of 10 – 15 MT is being consumed every day. In addition to this we are also using ETP/DIP
sludge in the boilers.
2. A Bio Gas plant of 10 M3 is in operation at the Plant canteen which partially substitutes the usage of
cooking gas.
3. We are also using solar PVs and Solar water heaters to enhance the usage of renewable sources.
4. Conventional asbestos sheets have been replaced with transparent sheets at many places in shop floors to
reduce the use of electric energy during day time.
iii)
Capital Investment on energy conservation equipments. Tendering process is in progress to revamp the
Power Boiler#2 to enhance its thermal efficiency
22
B
TECHNOLOGY ABSORPTION
i
Efforts made toward technology absorption.
Effect of mixing of Coal (imported + indigenous)
and other solid fuels on thermal values
Deinking effect on ageing of Old Newspapers and
Magazines (ONP & OMG).
ii
Benefits derived like product improvement,
cost reduction, product development or import
substitution.
The optimum blend of Indian and Imported coal is
50:50 ratio and with solid waste, about 65: 30: 5.
Combination with solid waste and bio mass is
necessary to reduce green house gases and to
reduce land and water pollution.
From the observations, it is seen that there is a
Brightness Reduction of 2.7% on storage of ONP
(Ind) for 9 months and 1.5% on storage of 75%
ONO: 25% OMG for 9 months. The waste paper
should be processed as early as possible,
preferably within 4-6 months and should have
weather protected storage facilities and shall be
consumed on “first in first out” basis.
iii
In case of imported technology (imported
during the last three years reckoned from the
beginning of the financial year)
Details of technology imported;
Year of import;
Whether the technology been fully absorbed
If not fully absorbed, ares where adsorption has
not taken place, and the reasons thereof.
iv)
2014-15
(Rs.in lakhs)
2013-14
(Rs.in lakhs)
1.25
0
Recurring
51.54
55.82
Total
52.79
55.82
Total R&D Expenditure as % of total turnover
0.15%
0.16%
FOREIGN EXCHANGE EARNINGS AND
OUTGO
2014-15
2013-14
—
—
3899.67
2596.31
Expenditure incurred on Research and
Development
Capital
C
NA
Foreign exchange earnings
Foreign exchange outgo
23
ANNEXURE -II
REPORT ON CORPORATE GOVERNANCE
Company’s philosophy on code of Governance
The company’s philosophy on Corporate Governance envisages attainment of the highest level of transparency,
accountability and equity in all facets of its operation and in all its interaction with its stakeholders, including
share holders, employees, lenders and the Government. The company is committed to achieving and
maintaining good standards of Corporate Governance.
Composition of the Board
The Board of HNL is structured in accordance with the Corporate Governance Guidelines for CPSEs and various
office Memorandum issued by Department of Public Enterprises (DPE).
Details of the composition of the Board of Directors, category of the Directors, their attendance at the Board
meeting(s) andAnnual General Meeting, other Directorship held by them during FY 2014-15 are given below:
Sl.No
Name
A
1
FUNCTIONAL DIRECTORS
Sri.M.V.Narasimha Rao
Chairman
Sri.K.K.Suresh Kumar
Managing Director
Air Cmde Prodip Kumar Mukherjee
VSM, Director (Finance)
Sri.Ghanshyam Sharma,
Director Finance (From 3.2.15)
NOMINEE DIRECTORS
Sri.S.N.Bhattacharyya
Sri.S.K.Singh
Sri.K.S.Srinivas IAS
Sri.Sathyajeet Rajan IAS
Sri.Arvind Kumar
2
3
4
B
1
2
3
4
5
Board Meeting (s)
attended / held during
tenure of Directors
AGM attended
5/5
5/5
Yes
4/4
Yes
1/1
5/5
3/4
0/4
1/1
1/1
Changes in the Board of Directors and Key Managerial Personnel
Sri.Ghanshyam Sharma [DIN: 07090008] was appointed as Director (Finance) vide letter no.PER-ET-01-C(566)/2014 dt.21.1.2015 of Hindustan Paper Corporation Limited (Holding Company) in place of Air Cmde
P.K.Mukherjee [DIN 05223730], who retired on superannuation on 31.1.2015.
Sri.Arvind Kumar [DIN: 06956955], Dy Secretary to Government of India was appointed as director vide letter
no.HNL/SECTT/4.4 dt.2.2.2015 by Hindustan Paper Corporation Ltd in place of Sri.S.K.Singh [ DIN
02679637] who ceased to be a director vide letter no.8(1)/2015-PE VII dt.30.1.2015 of Department of Heavy
Industry, Government of India.
24
Sri.Satyajeet Rajan IAS,[DIN: 01917990] Principal Secretary Industries Department was appointed as director
vide letter no.HNL/SECTT/4.4 dt.24.2.2015 of Hindustan Paper Corporation Ltd in place of Sri.K.S.Srinivas
IAS who ceased to be a director vide Government of Kerala order no.GO(Rt) 72/2015/ID dt.21.1.2015.
Sri.Ajith John was appointed as Company Secretary w.e.f. 1.11.2014 in place of Sri.L.R.Eknath who retired on
superannuation on 31.10.2014.
Remuneration of Directors
Details of Remuneration paid to Functional Directors during the year 2014-15 are under:
Particulars
2014-15 (`.)
Salary & Allowances
3348801.00
Value of perquisites
287953.00
Total
3636754.00
Part-time Non-official (Independent) Director(s)
Part-time Non-official Directors do not have any material pecuniary relationship or transaction with the
Company and its Management. They do not receive any remuneration/commission except Sitting Fee(s)
payment of which is made pursuant to Clause 118A of the Articles of Association of the Company at the rate
approved by the Board.
An amount of `1,36,000.00 was paid to independent directors toward fee for attending board and committee
meetings.
Meetings of the Board
The Board of Directors of your Company held five meetings on June 27, 2014, August 26, 2014, September 23,
2014, December 24, 2014 and March 31, 2015 during the year under review.
Audit Committee
Audit Committee consists of following members
Sri. Prakash P.Mugida, Director
-
Chairman
Sri. Guljit Kapur
-
Member
Sri. S.N.Bhattacharyya
-
Member
Audit Committee held five meetings on June 26, 2014, August 25, 2014, September 4, 2014, September 23,
2014 and October 29, 2014.
Annual General Meetings
AGM for FY ended
Date and Time ofAGM
Venue
28thAGM- 2010-11
September 21, 2011: 1030 hours
Registered office
29thAGM- 2011-12
November 06, 2012: 1200 hours
-do-
30thAGM- 2012-13
September 30,2013 : 1600 hours
-do-
31stAGM 2013-14
November 22, 2014 : 1200 hours
-do-
25
ANNEXURE-III
Position regarding employment of Scheduled Castes/
Scheduled Tribes, Ex-Servicemen/OBC etc. as on 31.3.2015.
Representation of SCs/STs/OBCs in the service of HNL.
Group
Total No. of
Employees
No. of
SCs
%
No. of
STs
%
No. of
OBC
%
A
120
4
3.33%
0
0%
22
18.33%
B
55
2
3.63%
1
1.81%
09
16.36%
C
379
21
5.54%
1
0.26%
107
28.23%
D
86
17
19.76%
0
0%
43
50%
Representation of Ex-Servicemen in the service of HNL.
Group
Total
No. of
posts
filled up
A
Disabled
Ex-servicemen
%
Dependent
of
Ex-Servicemen
killed in action
%
Other
Ex-Servicemen
%
120
-
-
-
-
1
0.83%
B
55
-
-
-
-
0
0%
C
379
-
-
-
-
6
1.58%
D
86
-
-
-
-
1
1.16%
Representation of Physically Handicapped persons in the service of HNL.
Total No. of
Employees
No. of Physically
Challenged
A
120
2
B
55
0
C&D
465
8
Group
26
Category of
Physically Challenged
Orthopaedically disabled
2
Deaf
6
Orthopaedically disabled
ANNEXURE – IV
Representation of Female Employees in the service of HNL as on 31.3.2015
Pay Scale
EXECUTIVES
75000-90000
65000-75000
43200-66000
36600-62000
32900-58000
29100-54500
24900-50500
20600-46500
16400-40500
ET- 16400-40500
Sub Total
B. SUPERVISORS
16400-40500
12600-32500
11500-29600
SUT- 11500-29600
Sub Total
C. WORKMEN
12600-32500
12600-32500
11500-29600
10700-27600
10000-25200
9500-24000
8900-22000
8500-20500
8200-19800
7900-18100
7700-17200
7500-16500
Sub Total
GRAND TOTAL
Total No. of
Employees
1
1
0
10
32
10
13
19
34
0
120
No. of Female
Employees
0
0
0
0
8
1
0
5
6
0
20
Percentage
1
29
25
0
55
0
1
4
0
5
0
3.44%
16%
0%
9.09%
3
53
136
59
43
21
20
22
22
82
3
1
465
640
1
6
16
8
0
3
2
6
3
1
0
0
46
71
33.33%
11.32%
11.76%
13.55%
0%
14.28%
10%
27.27%
13.63%
1.21%
0
0
9.89%
11.09%
27
0
0
0
0
25%
10%
0%
26.31%
17.64%
0%
16.66%