Your Directors take pleasure in presenting their Thirty Seventh Annual Report togetherwith the Audited Statement of Accounts for the year ended March 31 2019.
|FINANCIAL SUMMARY || || |
|Particulars ||2018-19 ||2017-18 |
| ||र. in Crores ||र. in Crores |
|Operational Income ||1528.48 ||1366.37 |
|Pro!t before Finance Cost Depreciation& Taxation (PBIDT) ||242.32 ||171.87 |
|Less: Finance Cost ||106.68 ||83.63 |
|Pro!t Before Depreciation & Tax (PBDT) ||135.64 ||88.24 |
|Depreciation & amortisation ||69.40 ||64.31 |
|Pro!t Before Taxation ||66.24 ||23.93 |
|Less : Provision for Current taxation (MAT) ||13.38 ||2.37 |
|MAT Credit entitlement ||(13.38) ||(2.37) |
| ||- ||- |
|Current Income Tax for the previous year ||(0.87) ||- |
|Provision for deferred tax ||23.12 ||7.55 |
|Pro!t after Tax ||43.99 ||16.38 |
|Add : Surplus brought forward ||18.08 ||10.44 |
|Balance available for appropriation ||62.07 ||26.82 |
|Appropriations || || |
|Dividend on Equity Shares ||7.26 ||7.26 |
|Corporate Dividend Tax ||1.48 ||1.48 |
|Balance carried forward ||53.33 ||18.08 |
Your Company registered another commendable performance with impressive top line growthdespite a challenging economy. Your Company recorded its highest turnover of Rs.1528.48crores as compared to Rs.1366.37 crores in 2017-18 registering a growth of 11.9%. Earningsbefore Interest Depreciation and Tax (EBIDTA) increased by 41% to Rs.242.32 crores asagainst Rs.171.87 crores in 2017-18. During the year under review the combined productionfrom Packaging Board Newsprint and Writing & Printing paper stood at 322359 MT andthe capacity utilization stood at 100%. The Company also recorded its highest salesvolumes of 304089 MT. Exports accounted for 16754 MT as against 13209 MT in the PreviousYear.
The Company is continuously focusing on improving operating e#ciencies and reducingmanufacturing cost with increased production for better financial performance.
Your Company has maintained its leadership position in the high-end packaging boardsegment and continues to consolidate its preferred supplier status amongst leading end-usecustomers & brands. The Company has also enjoyed dominant position in India beingworld class quality manufacturer of Newsprint.
OPERATIONS AND OUTLOOK
Your Company has achieved remarkable performance with all-round growth of Multi-layerCoated Board plant and recorded 178534 MT of Board production. This was clocked throughfocus on product quality process innovation improved manufacturing e#ciencies andenhanced service level with better logistic arrangements. The packaging board plantcapacity further increased from 180000 TPA to 200000 TPA during the year by addingbalancing equipment.
Over the next !ve years the domestic paper industry is projected to grow at 6% to 7%CAGR to reach 20 million tons by 2022. The packaging paper and paperboard having 48% ofthe market share is estimated to grow at around 7.5% CAGR. However premium gradepackaging board is projected to grow at a healthy rate of around 10.5% CAGR driven bygrowth in demand from FMCG Pharma publishing food & beverages and garmentsindustries.
Newsprint industry scenario has improved in the !rst half of 2018-19 with increase inprices of newsprint by about 30% and increase in demand of quality newsprint from domesticmanufacturers. However newsprint industry witnessed a depressed market scenario in secondhalf of the year due to higher volume of imports at cheap rates (dumping).Considering thechanged and challenging scenario your company has decided to go for change in the productmix by converting 60000 MT newsprint capacity to any other value added and premiumquality products.
The year 2018-19 was therefore marked with volatility and disruptions. Your Companyhowever continued to perform consistently well in these challenging times and deliveredbetter results. With 150000 TPA newsprint capacity and focus on operational excellenceand quality your Company is well placed.
Your Company has acquired 400387.05 square meters of land in Sayakha Industrial EstateDistrict: Bharuch Gujrat from Gujrat Industrial development Corporation (GIDC) forGreen!eld Expansion Project.
Overall the performance has been satisfactory despite economic and industrychallenges. With the implementation of GST and regularization of formal economy coupledwith initiatives taken by the government to improve infrastructure and industry across allsegments signi!cant industrial growth is expected in times to come. Your company isattractively positioned to take bene!t of this growing opportunity and therefore looks tothe future with optimism and con!dence.
Your Directors are pleased to recommend dividend of 60% (`1.20 per share) on Equityshares of र.2.00 each and 8% p.a. dividend on Preference shares of र.100.00 each for thefinancial year ended 31st March 2019. The Dividend if approved by the shareholders willabsorb `14.64 Crores (including the dividend Tax of र.2.48 crores)
Your company's approach towards environmental protection is guided by EnvironmentalPolicy commitment towards a sustainable planet and a clean environment as well as ahealthy workplace for employees. The Company focuses on environmental management not onlyto comply with the applicable regulatory regime but also strives to contribute positivelyto the communities around its operations through varied community initiatives encouragingbiodiversity and natural resource conservation
To meet its environmental objectives the Company adopts:
Compliance with all relevant legislative requirements.
Minimum Pollution Load in terms of Liquid Discharge and Air Emission.
Stimulate rational use of resources through behavioral and technologicalimprovements.
Minimizing waste and maximizing recycling/ reuse.
Creating Human Awareness in Environment Safety and Health.
Promoting comprehensive programs for continual improvement of Environmentalperformance.
Reduce speci!c energy consumption and associated greenhouse gas emission.
Your Company has adopted one of the best Integrated Management Systems (IMS) certi!edby DNV (Det Norske Veritas AS the Netherlands) through their rigorous surveillance andrecerti!cation audits encompassing the following:
ISO 9001:2015 - Quality Management System
ISO 14001:2015 - Environment Management System
OHSAS 18001:2007 - Occupational Health & Safety Management System.
Practicing TPM with an objective to achieve zero defect zero breakdowns zeropollution and zero loss.
At Emami Paper there has been a substantial development in energy conservation byinstalling energy e#cient equipment. Key environmental control equipment mechanism andmonitoring instruments maintained by the company are as below:
Online Ambient air quality monitoring system (3 Nos)
Online stack emission monitoring system (3 nos) with auto calibration facility
Online monitoring system for !nal discharge water at ETP
State-of-the-art e*uent treatment plant (ETP)-Augmented further to meet thestringent standards being proposed by CPCB. Additional features include: Equalisationtank Flash tank and Flocculation tank before primary clari!er Up+ow Anaerobic SludgeBlanket Reactor(UASBR) before the aerobic system Online DO monitoring device in theaeration basin Bio-gas scrubber with +aring unit and Multi-Grade Filter(MGF) withchlorination
Use of ETP !nal water for agricultural and plantation purpose and minimumdischarge to river Sono
100% sludge used as co-fuel in the power boiler in
Decanter for secondary sludge dewatering
Rainwater harvesting through 20 Nos of recharge well
Air pollution control through ESP Ash conveying system pneumatically throughthe close pipeline Dust Suppression System Ash conditioner before unloading WaterSprinkling System
100% of +y ash is used for +y ash bricks manufacturing.
Massive green belt development
New Sewage Treatment Plant (STP)
These systems and assets have enabled the Company to safeguard the environment bymeeting all statutory norms. As a measure of sustainable growth policy of the company itcontinuously gears up its resources to provide better protection to the environment andnatural resource conservation.
The company has neither issued shares with differential voting rights nor granted stockoptions or sweat equity.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
In terms of section 125 of the Companies Act 2013 the unclaimed or unpaid Dividend isdue for remittance to the Investor Education and Protection Fund established by theCentral Government in accordance with the schedule given below:-
|Financial year ||Dividend ID No. ||Last date of Payment of dividend ||Total Amount of Dividend ||Unclaimed Dividend as on 31.03.2019 ||Last date for transfer to I.E.P.F. on |
|2011-12 ||30th ||11/09/2012 ||36300000 ||66013.20 ||16/09/2019 |
|2012-13 ||31st ||11/09/2013 ||36300000 ||99385.80 ||16/09/2020 |
|2013-14 ||32nd ||09/09/2014 ||36300000 ||97523.40 ||14/09/2021 |
|2014-15 ||33rd ||09/09/2015 ||36300000 ||94495.80 ||14/09/2022 |
|2015-16 ||34th ||08/09/2016 ||36300000 ||99232.80 ||13/09/2023 |
|2016-17 ||35th ||31/08/2017 ||72598860 ||205544.40 ||05/09/2024 |
|2017-18 ||36th ||04/09/2018 ||72598860 ||142267.20 ||09/09/2025 |
|Total : || || ||326697720 ||804462.60 || |
Note: There is no unclaimed dividend on 8% Cumulative Redeemable Non-convertiblePreference Shares issued by the Company.
Details of unclaimed dividend is available on the Company's website www.emamipaper.in
DETAILS OF SUBSIDIARY/ JOINT VENTURES/ ASSOCIATE COMPANIES
The Company does not have any Subsidiary or Joint Venture/ Associate Companies.
DETAILS OF DEPOSITS
The Company has neither accepted nor renewed any deposits under section 73 of theCompanies Act 2013 during the year under review.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo as required under Section 134(3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure I andis attached to this Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in form MGT-9 is given in Annexure II to the Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
The company has formulated the policy for development and implementation of CorporateSocial Responsibility as also required under Section 135 of the Companies Act 2013.
Further the information pursuant to Section 134(3)(o) of the Companies Act 2013 andRule 9 of the Companies (Corporate Social Responsibility) Rules 2014 is given in AnnexureIII outlining the main initiatives during the year under review.
GROWTH WITH SOCIAL RESPONSIBILITY:
Emami Paper Mills Limited through its CSR activities takes up programs that bene!t thecommunities in & around its place of work and ensure over a period of timeenhancement in the quality of life & economic well<being of the local people andthereby establishing its presence as a good corporate citizen.
EPML is committed to helping the inhabitants of the surrounding villages by taking partin drinking water supply schemes laying and improving roads culverts providing lightingfacilities development of parks supply of equipment and instruments to Fair Price Shopsimproving infrastructure facilities in Government Schools conducting medical campsproviding financial assistance to needy people contributing for cultural programs sportsactivities construction/renovation works in the place of worship etc. This has paved theway for establishing a harmonious relationship with the surrounding neighborhood.
EPML undertakes Community Development activities by categorizing the needs of thecommunity under various heads viz. Infrastructure and basic amenities providingdrinking water supply education medical camps and environment promotion of Oriyaliterature Art & Culture assistance for the differently abled training ofunemployed youth Organizing sports and talent competitions etc.
The company takes pride for its sense of responsibility towards the community andenvironment and the way it is duty bound for the enrichment of the life of less privilegedpeople and protection of the environment around its area of operation. The company hastaken its social responsibility as a part of its operating policy and gearing its socialactivities to promote inclusive and sustained growth.
AWARDS & RECOGNITION:
Our commitment towards Safety & Environment Quality
& Operational Excellence and HR practices continue to garner appreciation fromvarious industry chambers and social bodies. Some of the accolades and awards receivedduring the year are as follows:
1. 18th Greentech Environment Award-Gold Category.
2. Go-Green Certi!cation 2018.
3. Corporate Excellence Best Paper Industry 2017 by Odisha Cultural Foundation forexcellent performance with outstanding contribution and dedication to the society.
4. CII Eastern Region conferred with 2nd Runner up Award in the large scale categoryof Energy Conservation.
5. State Safety Award for Best performance in Safety Health & Environment and BestEnvironment Management.
6. Accolade of Appreciation by Ishani Balasore in Baisakhi Mahotsav for infrastructuredevelopment and employment generation.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
Your Company has laid down internal financial controls to be followed by the Companyand such policies and procedures adopted by the Company for ensuring the orderly ande#cient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information. The Audit Committee evaluates the internal financialcontrol system periodically.
AUDITORS AND AUDITORS REPORT
1. STATUTORY AUDITORS
As per section 139 and other applicable provisions of the Companies Act 2013 theCompany has appointed M/s. Agrawal Subodh & Co. Chartered Accountants (RegistrationNo. 319260E) as the Statutory Auditors of the Company for a period of !ve years till theconclusion of 40th Annual General Meeting (AGM) of the Company subject to rati!cation bythe shareholders in every AGM of the company on the remuneration and other terms andconditions as may be !xed by the Board of Directors. The Board recommends the rati!cationby the shareholders regarding the appointment of M/s Agrawal Subodh & Co CharteredAccountants as Statutory Auditors of the Company.
The present Statutory Auditors M/s Agrawal Subodh & Co. Chartered Accountants forboth the units will continue their o#ce till the conclusion of ensuing 40th Annual GeneralMeeting of the Company.
2. COST AUDIT
Your Company has appointed M/s. V. K. Jain & Co. Cost Accountant as Cost Auditorsof the Company for the Financial Year 2018-19 for both the units at Balasore and Kolkataunder section 148 of the Companies Act 2013 at the Board Meeting held on 02ndMay 2018to audit cost accounting records as may be applicable to the Company for the financialyear 2018-19 and their remuneration was approved at the last Annual General Meeting.
In terms of Section 148 of the Companies Act 2013 read with the Companies (Audit &Auditors) Rules 2014 M/s V. K. Jain & Co. Cost Accountant has been reappointed asCost Auditor for the year 2019-20 as required under the Companies Act 2013 theremuneration payable to Cost Auditor is required to be placed before the members inGeneral Meeting for their rati!cation. As such a resolution seeking members' rati!cationfor the remuneration payable to them is included in the Notice convening the AnnualGeneral Meeting.
3. SECRETARIAL AUDIT
Pursuant to the provisions of section 204(1) of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the companyhas appointed M/s MKB & Associates Company Secretary in practice for the financialyear 2018-19 to undertake the Secretarial Audit of the company. The Secretarial AuditReport is annexed herewith as Annexure IV.
AUDITORS' REPORT AND SECRETARIAL AUDIT REPORT
The observations made in the Auditors' Report read together with Key Audit matters andrelevant notes thereon are self-explanatory and hence do not call for any furtherexplanations or comments by the Board under Section 134 of the Companies Act 2013.
DISCLOSURE ON COMPLIANCES OF APPLICABLE SECRETARIAL STANDARD
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards and that such systems are adequate and operatingeffectively.
The above statement is intended to align the disclosure requirement with the provisionsof section 134(5)(f) of the Act which requires the directors to state in the Directors'Responsibility statement that the Directors have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems are adequateand operating effectively.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
1) The company has given Inter Corporate loan to some of the Body corporates coveredunder the provisions of section 186 of the Companies Act 2013. The amount of loan givenis Rs.170 crores and the whole amount have been received back during the year. The purposewas to utilize the loan amount for their general business purposes.
2) The loan and advances given to employees are covered under the remuneration policyof the company. Hence section 186 of the Companies Act 2013 is not applicable.
3) The company has not provided any guarantee.
4) The details of the investments made by the company are given in the notes to thefinancial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially signi!cant related party transactions made by the company with promoters Keymanagerial personnel or other designated persons which may have potential con+ict with theinterest of the company at large.
Necessary disclosure regarding transactions with related parties has been made in theNotes to the Audited Accounts.
The related party transactions policy has been given on the website of the companyunder the head Investors-Corporate Governance.
Web link: http://www.emamipaper.in/compliances.php
COMPOSITION OF AUDIT COMMITTEE
The composition of the Audit Committee of the company is mentioned in the CorporateGovernance Report attached to this report.
DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM AND WHISTLE BLOWER POLICY
Details of establishment of Vigil Mechanism and Whistle Blower policy is mentioned inCorporate Governance Report attached to this Report and also available at the website ofthe Company i.e.www.emamipaper.in.
STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY
Pursuant to section 134(3)(n) of the Companies Act 2013 and relevant regulations ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the company hasadopted Risk Management policy for identi!cation and implementation of Risk MitigationPlan which is reviewed by the Management Audit Committee and the Board on half yearlybasis. In the opinion of the Board there is no such risk which may threaten the existenceof the company.
DIRECTORS' & KEY MANAGERIAL PERSONNEL
A) Directors retirement by rotation
Smt. Richa Agarwal Director would retire by rotation and being eligible o"ersherself for re-appointment.
B) Declaration by an Independent director(s) and reappointment if any
All Independent directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and relevantregulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015(as amended from time to time).
C) Key Managerial Personnel
During the year following changes were made in the Key Managerial Personnel of yourCompany.
1. Shri U. G. Bhat Independent Director resigned w.e.f.11th October 2018
2. Shri Ashish De Whole Time Director was appointed on 13th April 2018 and resignedw.e.f. 01st March 2019.
3. Shri Shyamalendu Chatterjee was appointed as an Independent Director of the Companyw.e.f. 07th January 2019.
4. Shri Manish Goenka Whole-Time Director redesignated to Promoter Non-ExecutiveDirector w.e.f.14th May 2018.
5. Shri M.B.S.Nair resigned w.e.f.13th April 2018 from the post of Director(Operations).
6. Shri S. K. Khetan Senior President was reappointed as Chief Financial Officer(C.F.O.) of the Company being Whole Time Key Managerial Personnel (KMP) under Section 203of the Companies Act 2013 with e"ect from 01st April 2019.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
Pursuant to section 178 of the Companies Act 2013 the Board of the directors of thecompany has approved the revised Nomination and Remuneration policy as recommended by theNomination and Remuneration Committee in their meeting held on 27thJanuary2015.
The policy is disclosed in the Corporate Governance Report.
ANNUAL EVALUATION OF BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to the provisions of section 134(3)(p) of the Companies Act 2013 and relevantregulations of SEBI (Listing Obligations and Disclosure Requirements)
Regulations 2015 (as amended from time to time) the Board has carried out the annualperformance evaluation of its own performance its committees and individual directors on08th May 2019 on the basis of agreed norms for evaluation.
Further the independent directors have evaluated the performance of non-independentdirectors at a separate meeting held on 05th February 2019.
The manner in which the evaluation carried out has been explained in the CorporateGovernance Report.
Meetings of the Board and Committee thereof
The details have been covered in the Corporate Governance Report.
MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofmanagerial personnel and employees of the company is attached herewith in Annexure V.
RECEIPT OF COMMISSION BY THE DIRECTOR FROM HOLDING OR SUBSIDIARY COMPANY UNDER SECTION197(14)
The Corporate Governance Report and Management's Discussion & Analysis Report areset out as Annexure VI in this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of section 134(5) of the Companies Act 2013 the Directors would like to statethat:-
1. In the preparation of annual accounts the applicable accounting standards had beenfollowed along with proper explanation relating to material departures;
2. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of a"airs of the company at the end of the financial year andof the pro!t and loss of the company for that period;
3. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
4. The Directors had prepared the annual accounts on a going concern basis;
5. The Directors had laid down internal financial controls to be followed by thecompany and such controls are adequate and operating effectively; and
6. The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively;
1. Industrial Relations: During the year under review the Company enjoyed a cordialrelations with the workers and employees at all levels.
2. Signi!cant and material orders passed by the regulators or courts or tribunalsimpacting the going concern status and company's operations in the future:
No such orders passed during the year under review.
The Board acknowledges the understanding and support shown by its lending financialinstitutions banks distributors customers suppliers employees and other businessassociates. Your Company operated e#ciently due to a culture of professionalism integrityand continuous improvement leading to sustainable and pro!table growth.
|For and on behalf of the Board of Directors |
| ||A. V. Agarwal |
|Place: Kolkata ||Executive Chairman |
|Date: 08th May 2019 ||DIN : 00149717 |