Ballarpur Industries Ltd.
|BSE: 500102||Sector: Industrials|
|NSE: BALLARPUR||ISIN Code: INE294A01037|
|BSE 16:01 | 27 Mar 2018||Ballarpur Industries Ltd|
|NSE 05:30 | 01 Jan 1970||Ballarpur Industries Ltd|
|BSE: 500102||Sector: Industrials|
|NSE: BALLARPUR||ISIN Code: INE294A01037|
|BSE 16:01 | 27 Mar 2018||Ballarpur Industries Ltd|
|NSE 05:30 | 01 Jan 1970||Ballarpur Industries Ltd|
your Directors have pleasure in presenting the seventieth annual report together withthe audited Financial statements for the financial year ended 31 march 2015.
The previous financial year of Company comprised 12 months commenced 1 July 2013 andended 30 June 2014 (JulyJune). In order to comply with the requirement of uniformaccounting year as per Section 2(41) of The Companies Act 2013 the Board of Directors ofthe Company effective 1 July 2014 had approved change in financial year fromJulyJune to commencing 1 April of every year ending on 31 March of the subsequentyear (AprilMarch). Accordingly the current financial year comprised 9 monthscommencing 1 July 2014 and ending 31 March 2015.
The subsequent financial year of the Company shall comprise 12 months fromAprilMarch. Accordingly the figures are not comparable for the period underdiscussion.
A detailed review of the operations and performance of the Company is provided in theManagement Discussion & Analysis Report which is given as a separate chapter in theAnnual Report.
Your Directors have recommended payment of dividend of Rs. 0.20 per equity share of Rs.2/- each (previous year Rs. 0.20 per equity share) on the equity share capital of theCompany for the financial year ended 31 March 2015.
No amount of principal or interest on erstwhile fixed deposits was outstanding as on 31March 2015. Further the Company has not invited any fresh deposits.
In accordance with the provisions of the Companies Act 2013 ("the Act") andthe Articles of Association of the Company Ms. Nandini Adya was appointed as anAdditional Director (Independent) by the Directors on 11 November 2014 and subsequentlyappointed as an Independent Director of the Company at the Annual General Meeting (AGM)held on 19 December 2014 to hold office for a term of 5 (five) consecutive years upto 10November 2019.
Pursuant to provisions of the Act Mr. Sanjay Labroo Mr. A. S. Dulat and Mr. AshishGuha were also appointed as Independent Directors of the Company at the AGM held on 19December 2014 to hold office for a term of 5 (five) consecutive years upto 18 December2019.
As per the provisions of the Act Mr. Gautam Thapar retires by rotation at theforthcoming AGM and being eligible offers himself for re-appointment. His profile is inthe Corporate Governance Report.
The Nomination and Remuneration Committee has formulated criteria and policy for theidentification / appointment / removal of directors key managerial personnel & seniormanagement their remuneration and evaluation. The same is also briefed in the CorporateGovernance Report.
DECLARATION GIVEN BY INDEPENDENT DIRECTORS
All the Independent Directors have given declaration of independence as required undersub section (6) of Section 149 of the Companies Act 2013.
MEETINGS OF THE BOARD
The details of meetings of the Board of Directors of the Company are contained in theCorporate Governance Report.
The Company is a part of the Avantha Group one of Indias leading businessconglomerates led by the Chairman Mr. Gautam Thapar. The Avantha Group has a worldwidepresence in 90 countries with more than 25000 employees. As required by the ListingAgreement with the Stock Exchanges
IN RS. CRORE
the Company periodically discloses its Promoter Group and persons acting in concert inthe shareholding pattern and other filings with the Stock Exchanges.
The Company has three Indian subsidiaries viz. BILT Graphic Paper Products Limited(BGPPL) BILT Tree Tech Limited (BTTL) and Premier Tissues (India) Limited (PTIL) and fiveforeign subsidiaries viz. four based in The Netherlands namely Ballarpur InternationalHoldings B.V. (BIH) Bilt Paper B.V. (BPBV) Ballarpur Paper Holdings B.V. (BPH)Ballarpur Speciality Paper Holdings B.V. (BSPH) and Sabah Forest Industries Sdn. Bhd.(SFI) based in Malaysia. BTTL and PTIL are direct subsidiaries and BGPPL is a step downsubsidiary of the Company.
The report on the performance and financial position of each of the subsidiarycompanies included in the consolidated financial statement are provided in the notes toaccounts.
The Company has no joint venture or associate companies.
CONSOLIDATION OF ACCOUNTS
Management Discussion and Analysis Report as annexed herewith comprises note on theperformance of each of the subsidiaries. Further consolidated financial statements of theaccounts of the Company and its aforesaid 8 subsidiaries are annexed to this Report.
The performance and financial position of each of the subsidiaries associates andjoint venture companies are detailed in Statement containing salient features of thefinancial statement of subsidiaries in form AOC I pursuant to section 129 of the CompaniesAct 2013.
MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company i.e. 31March 2015 and the date of the Directors report i.e. 26 May 2015.
DIRECTORS RESPONSIBILITY STATEMENT
In accordance with Section 134(5) of the Companies Act 2013 your Board of Directorsconfirm that:
In the preparation of the annual accounts the applicable accounting standards havebeen followed and there is no material departure;
They had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitof the company for the financial year;
The directors had taken proper and sufficient care for maintenance of adequateaccounting records as provided in the companies act 2013 for safeguarding the assets ofthe company and for preventing and detecting frauds and other irregularities;
The annual accounts of the company have been prepared on a "going concern"basis;
The directors had laid down internal financial controls to be followed by the companyand that such controls are adequate and were operating effectively; and
They had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
AUDITORS & AUDITORS REPORTS
The Statutory Auditors of the Company M/s. K. K. Mankeshwar & Co. retire at theensuing Annual General Meeting and being eligible offer themselves for re-appointment onterms to be recommended by the Audit Committee and Board of Directors. The Company hasreceived requisite certificate to the effect that their re-appointment if made at theensuing Annual General Meeting would be in accordance with Section 141 (3)(g) of theCompanies Act 2013.
Boards explanation to Auditors qualified opinion:
"The qualified opinion of Statutory Auditors in their report on continuation ofUnit Kamalapuram of the Company as a going concern is self-explanatory and also suitablyexplained in Note No. B-36 of the Notes to the Financial Statements and does not requireadditional comment."
The Board has appointed M/s P. Balodia & Co. Company
Secretaries to conduct Secretarial Audit of the Company for the financial year20142015. The Secretarial Audit Report for the said financial year is annexed tothis report and does not contain any qualification reservation or adverse remark.
The Statutory Auditors
M/s. K. K. Mankeshwar & Co. have certified compliance of the Company with theprovisions of Corporate Governance in terms of Clause 49 of the Listing Agreement withthe Stock Exchanges. The Report on Corporate Governance together with the said certificateis attached and forms part of this Report.
RELATED PARTY TRANSACTIONS LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY
During the period under review all transactions with related parties referred to insub-section (1) of Section 188 and Clause 49 of the Listing Agreement with StockExchanges were in the ordinary course of business and at arms length duly reviewed/ approved by the Audit Committee of the Company. Further there were no materialcontracts arrangements or transactions with related parties which requires disclosure inForm AOC2.
Details of intercompany loans / guarantees / investments by the Company under Section186 of the Companies Act 2013 are provided in the financial statements.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS
The Company has designed and implemented a process driven framework for internalfinancial controls within the meaning of explanation to Section 134 (5)(e) of theCompanies Act 2013. For the year ended 31 March 2015 the Board is of the opinion thatthe Company has sound internal financial controls commensurate with the nature and size ofits business operations; wherein controls are in place and operating effectively and nomaterial weaknesses exist. The Company has a process in place to continuously monitor theexisting controls and identify gaps if any and implement new and / or improved controlswherever the effect of such gaps would have a material effect on the Companysoperation.
BILT has adopted the group risk management policy. Accordingly all operationalprocesses are duly covered to assess the risk level. Business risks are assessed byoperational management and steps are taken for the minimization of the same.
Details of various Committees of the Board viz. Audit Nomination & RemunerationStakeholders Relationship Corporate Social Responsibility and Risk Management Committeeconstituted in compliance of the provisions of the Companies Act 2013 and ListingAgreement viz. constitution purpose attendance etc. has been provided in the CorporateGovernance Report as annexed with this Report.
The Board has accepted recommendations of the Committees wherever made.
In compliance of the various provisions of the Companies Act 2013 and ListingAgreement with the Stock Exchanges the Company has made the following policies which areavailable on the website of the Company:
Policy on materiality of and dealing with related party transaction.
Policy for determining material subsidiaries of the company.
Corporate Social Responsibility Policy.
A Whistle Blower Policy covering all employees and Directors for the vigil mechanisminter alia providing a direct access to a whistle blower to the Chairman of the AuditCommittee.
CONSERVATION OF ENERGY RESEARCH & DEVELOPMENT TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO
As required by the Companies Act 2013 read with Companies (Accounts) Rules 2014particulars pertaining to conservation of energy technology absorption and foreignexchange earnings and outgo are given in the prescribed format as annexed with thisReport as Annexure 1.
PARTICULARS OF EMPLOYEES
The information required under Section 197(12) of the Companies Act 2013 read withRule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 asamended is annexed with this Report as
EXTRACT OF THE ANNUAL RETURN
An extract of the Annual Return as of 31 March 2015 pursuant to the sub-section (3)of Section 92 of the Companies Act 2013 and forming part of the report is annexed withthis Report as
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In terms of Section 135 and Schedule VII of the Companies Act 2013 the Board ofDirectors of your Company have constituted a CSR Committee. A report on CSR activitiesundertaken by the Company as per CSR Policy of the Company in terms of said section andthe Companies (Corporate Social
Responsibility Policy) Rules 2014 is annexed with this Report as Annexure 4.
The Directors wish to convey their gratitude and appreciation to all of theCompanys employees for their tremendous individual efforts as well as theircollective dedication and contribution to the Companys performance.
The Directors would also like to thank the employee unions shareholders customersdealers suppliers bankers government and all the other business associates for theircontinued support extended to the Company.
ANNEXURE TO BOARDS REPORT
1. CONSERVATION OF ENERGY:
A) ENERGY CONSERVATION MEASURES TAKEN
Unit: Shree Gopal
Reduced power consumption by 250 KWH as per below details:
Installed 200 KW VFD at screw compressor no.1 in SPM pump house.
Commissioned new energy efficient cooling tower at new location of ClO2 plant.
Installed 200 KW VFD at screw compressor no.2 in SPM pump house.
Installed 75 KW VFD at UTM pulper no.1 PM-4
Installed 75 KW VFD at treated effluent pump ETP
Power saving by optimization of equipments.
Power saving by replacing inefficient old motors with energy efficient motors.
Replaced 350 KW LT motor with HT motor for better efficiency
ENERGY CONSERVATION MEASURES PLANNED
The following projects have been planned for implementation to further reduce energy& water consumption:
Unit: Shree Gopal
Energy saving by installation of VFDs at identified 16 locations.
Energy saving by replacing inefficient pumps and motors with energy efficient pumps andmotors and optimization of equipments.
Energy saving by upgrading power plant compressors.
Energy saving in lighting by CFL & LED lighting fixtures.
Energy saving by replacing DC motor & drives with AC motors controlled withVFDs at 2 locations.
Installation of disc filter at PM-1 5 & 7 for water conservation and fiberrecovery.
Optimization of specific steam consumption in dryer section of paper machines
B) STEPS TAKEN BY THE COMPANY FOR UTILISING ALTERNATE SOURCES OF ENERGY
Day light utilization in mills
Use of waste wood dust for firing in boilers along-with coal
NEW POINT ADDED THIS YEAR AS PER LAW C) CAPITAL INVESTMENT ON ENERGY CONSERVATIONEQUIPMENTS
Investment for FY201415: Rs. 115 lakhs and proposed for FY201516: Rs.340 lakhs
2. TECHNOLOGY ABSORPTION
A) EFFORTS MADE TOWARDS TECHNOLOGY ABSORPTION
Unit: Shree Gopal
Use of STL wire at PM-4: Technology upgrade.
New QCS Scanner for PM-5: Technology upgrade.
New approach flow screen at pm/c # 2
Flexible doctoring system at press section PM-4.
New product development- (Supper Ptg. NS REB Nature green New deep shade of MMPPBILT classic tinted shade: BILT Ultra Super ptg. 57 GSM high smooth)
Installed & commissioned Synchronizing and generator protection panel for BTHturbine & commissioned new AVR panel for BTH turbine.
Industrial Effluent Treatment & installation of online quality monitoring system.
Introduced Nylgum Imported starch as glue in art board and BCB lamination.
B) BENEFITS DERIVED AS A RESULT OF THE ABOVE
Unit: Shree Gopal
Better product quality.
Better process efficiency.
Better resource utilization.
Sustenance in business through:
Improved product quality.
New product development.
Renewal Energy Certificates (REC) generation.
C) IN CASE OF IMPORTED TECHNOLOGY (IMPORTED DURING LAST 3 YEARS RECKONED FROM THEBEGINNING OF THE FINANCIAL YEAR)
Installed flexible doctoring system at press section PM-4
Up gradation of MP200 controller of Bleach plant DCS with AC450 controller.
Installation of Forbes Marshal Thermo Compressor based Steam & Condensate system atPM-4
Has technology been fully absorbed:
If not fully absorbed areas where this has not taken place reasons thereof and futureplan of action: N.A.
D) EXPENDITURE ON R&D (INCLUDING THROUGH APPROVED AGENCIES)
Rs. 6.34 Lacs
Rs. 6.36 Lacs Total: Rs. 12.70 Lacs
Total Expense as a percent of turnover:
3. FOREIGN EXCHANGE EARNINGS AND OUTGO
Foreign Exchange used:
Rs. 38.79 Crore
Foreign Exchange earned:
Rs. 0.57 Crore
THE RATIO OF THE REMUNERATION OF EACH DIRECTOR TO THE MEDIAN EMPLOYEESREMUNERATION AND OTHER DETAILS IN TERMS OF SUB-SECTION 12 OF SECTION 197 OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014:
Note: the information provided below is on standalone basis for Indian Listed entity.Figures for financial year 2014-15 comprises 9 months and hence not comparable.
1. Ratio of the remuneration of each director to the median remuneration of all theemployees of the Company for the financial year;
*Whole-time Director (Group Director - Finance)
@appointed as an additional Independent Director on 11 November 2014
For the aforesaid purposes median remuneration has been computed by ascertaining theannualised median salary for all employees of the Company employed at any time during thefinancial year 2014-2015 in all categories whether workmen or white collar employees.remuneration includes variable pay paid during the year.
2. The percentage increase in remuneration of each director Chief FinancialOfficer Chief Executive Officer Company Secretary or Manager if any in the financialyear: a) Non-Executive Directors: No increase.
Non-executive directors commission is as permitted by the Companies Act andapproved by the shareholders. In addition to fixed sitting fee to directors for attendingboard / committee meetings commission is distributed amongst the Non-Executive Directorsbased on the Boards decision and in recognition of their additional contribution ascommittee members / chairman and involvement in companys initiatives and strategicdirections. Remuneration for the financial year 2014-2015 comprises attendance basedsitting fee only. b) Key Managerial Personnel
*appointed w.e.f. 1 July 2014
3. The percentage increase in the median remuneration of employees in the financialyear 2014-15: 3.28%
4. The number of permanent employees on the rolls of company as on 31 March 2015:1526
5. Relationship between average increase in remuneration and company performance:
The average increase in remuneration of all employees during Financial Year 2015 was4.20%. As explained in previous sections net sales fell by 9.8% over the same nine monthsperiod of last year.
However the average increase in remuneration was considering various factors such asinflation industry practice of increases external comparisons & competitiveness andthe need for talent retention. The remuneration at lower levels is predominantly fixed innature and at senior management levels it comprises fixed and variable component.Considering the company performance the increases at senior levels were lower than juniormanagement staff. The increases in the non-management staff are fixed increments as perthe agreed structure with Union(s).
6. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the company; Refer point 5 above.
7. Variations in the market capitalisation of the company price earnings ratio asat the closing date of the current financial year and previous financial year andpercentage increase over decrease in the market quotations of the shares of the company incomparison to the rate at which the company came out with the last public offer in case oflisted companies and in case of unlisted companies the variations in the net worth ofthe company as at the close of the current financial year and previous financial year.
The closing market price of the shares of the Company as at 31 March 2015 was Rs.13.73 (BSE). The Companys Initial Public Offer (IPO) issue price is strictly notcomparable with the price of share as IPO which was made way back. Further there have beenrights issue of securities split and buy back of shares restructurings acquisitions anddisposals since last IPO.
8. Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration; Averageincrease in salary of all employees was 4.10%.
The same is not comparable with the managerial remuneration due to change of managerialpersons (from two in 2014 to one in 2015) & non-payment profit linked commission tonon-executive directors. Reasons for increase in remuneration is explained in point 5.
9. Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the company: Refer point 5 above.
10. The key parameters for any variable component of remuneration availed by thedirectors; As explained above.
11. The ratio of the remuneration of the highest paid director to that of theemployees who are not directors but receive remuneration in excess of the highest paiddirector during the year: The remuneration detail is stated in Annexure to theBoards Report under Section 197(12) of the Companies Act 2013.
12. Remuneration is as per the remuneration policy of the Company.
i) Employment is contractual. other terms and conditions as per Companys rules.ii) remuneration includes salary allowances perquisites medical expenses leave travelconcession Companys contribution to provident and supernnuation funds gratuitypaid (if any) rent paid in providing residential accomadation and performance incentiveiii) None of the employees is related to any director of the company
SECRETARIAL AUDIT REPORT
For the financial year ended 31 march 2015
BALLARPUR INDUSTRIES LIMITED P.O. Ballarpur Paper Mills 442901 Distt.Chandrapur Maharashtra.
We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by M/s. Ballarpur IndustriesLimited (hereinafter called the company). Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing our opinion thereon.
Based on our verification of the Companys books papers minute books forms andreturns filed and other records maintained by the company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit We hereby report that in our opinion the company hasduring the audit period covering the financial year ended 31 March 2015 complied with thestatutory provisions listed hereunder and also that the Company has proper Board-processesand compliance-mechanism in place to the extent in the manner and subject to thereporting made hereinafter: We have examined the books papers minute books forms andreturns filed and other records maintained by the Company for the financial year ended on31 March 2015 according to the provisions of:
i. The Companies Act 2013 (the Act) and the rules made thereunder;
ii. The Securities Contracts (Regulation) Act 1956 (SCRA) and therules made thereunder;
iii. The Depositories Act 1996 and the Regulations and Bye-laws framed thereunderto the extent applicable.
iv. Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;
v. The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 (SEBI Act) to the extent applicable duringaudit period:
a) The Securities and Exchange Board of India (Substantial Acquisition of Sharesand Takeovers) Regulations 2011;
b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;
c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009;
d) The Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014;
e) The Securities and Exchange Board of India (Issue and Listing of DebtSecurities) Regulations 2008;
f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client tothe extent of securities issued;
g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009;
h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;
We have also examined compliance with the applicable clauses of the following:
i. Secretarial Standards issued by The Institute of Company Secretaries of India.Not applicable for the year 201415.
ii. The Listing Agreements entered into by the Company with National StockExchanges Limited and BSE Limited.
During the period under review the Company has generally complied with the provisionsof the Act Rules Regulations Guidelines Standards etc. mentioned above.
We further report that the Board of Directors of the Company is duly constituted withproper balance of Executive Directors Non-Executive Directors and Independent Directors.The changes in the composition of the Board of Directors that took place during the periodunder review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting. All decisions at BoardMeetings and Committee Meetings are carried out unanimously as recorded in the minutes ofthe meetings of the Board of Directors or Committee of the Board as the case may be.
We further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
FOR P. BALODIA & CO.