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Ballarpur Industries Ltd.

BSE: 500102 Sector: Industrials
NSE: BALLARPUR ISIN Code: INE294A01037
BSE 15:56 | 23 Feb 13.85 0.45
(3.36%)
OPEN

13.35

HIGH

13.95

LOW

13.35

NSE 15:54 | 23 Feb 13.85 0.45
(3.36%)
OPEN

13.40

HIGH

14.00

LOW

13.35

OPEN 13.35
PREVIOUS CLOSE 13.40
VOLUME 237671
52-Week high 22.70
52-Week low 11.30
P/E
Mkt Cap.(Rs cr) 1,791
Buy Price 0.00
Buy Qty 0.00
Sell Price 13.85
Sell Qty 166.00
OPEN 13.35
CLOSE 13.40
VOLUME 237671
52-Week high 22.70
52-Week low 11.30
P/E
Mkt Cap.(Rs cr) 1,791
Buy Price 0.00
Buy Qty 0.00
Sell Price 13.85
Sell Qty 166.00

Ballarpur Industries Ltd. (BALLARPUR) - Director Report

Company director report

Your Directors hereby present the Seventy Second Annual Report together with theAudited Financial Statements for the financial year ended 31 March 2017.

FINANCIAL PERFORMANCE

The Companies (Indian Accounting Standards) Rules 2015 were notified on 16 February2015. In view of the said rules the Company has prepared the Financial Statements (bothstand-alone and consolidated) for the year ended 31 March 2017 as per Indian AccountingStandards as amended.

The financial performance of your Company for the financial year ended 31 March 2017is as under:

' IN CRORE

Particulars

STANDALONE

CONSOLIDATED

2016-17 2015-16 2016-17 2015-16
Revenue from Operations (Net of Excise duty) 211.83 554 2008.22 4050.59
EBIDTA (38.60) 129.93 (89.15) 767.80
Less: Finance Cost 153.19 51.93 900.84 459.17
Less: Depreciation 52.69 58.10 273.99 264.80
Profit/(Loss) before Exceptional Items and Taxes (244.47) 19.90 (1263.98) 43.86
Exceptional Items 251.49 - 306.30 (0.31)
Profit / (Loss) before Tax (495.96) 19.90 (1570.28) 44.17
Less: Tax (25.42) (1.75) (135.41) (6.82)
Profit/(Loss) After Tax (470.54) 21.65 (1434.87) 50.99
Profit/ (loss) from discontinued operation before tax - - (254.08) (329.31)
Tax expense on discontinued operation - - 172.87 0.94
Net profit/ (loss) from discontinued operations after tax - - (426.95) (330.26)
Net profit/ (loss) after tax (470.54) 21.65 (1861.82) (279.27)

OPERATIONS

A detailed review of the operations and performance of the Company and its subsidiariesis provided in the Management Discussion and Analysis Report which is given as a separatechapter in the Annual Report.

DIVIDEND

In view of losses during the year your Directors have not recommended any dividend onthe equity share capital of the Company for the financial year ended 31 March 2017.

FIXED DEPOSITS

No amount of principal or interest on erstwhile fixed deposits was outstanding as on 31March 2017. Further the Company has not invited any fresh deposits.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

To strengthen the leadership at the Board level with independent professionals inaccordance with the provisions of the Companies Act 2013 ("the Act") read withthe Articles of Association of the Company Mr. Sudhir Mathur was appointed as anAdditional Director (Independent) by the Board of Directors on 7 February 2017. Hisappointment as an Independent Director is recommended for approval by the Members of theCompany at the forthcoming Annual General Meeting (AGM) of the Company for a term of 5years. His profile is provided in the Corporate Governance Report.

As per the provisions of the Act Mr. R.R. Vederah retires by rotation at theforthcoming AGM and being eligible offers himself for re-appointment. His profile isprovided in the Corporate Governance Report. The Directors recommend his reappointment asNon Executive Director of the Company.

The Nomination and Remuneration Committee has formulated criteria and policy for theidentification / appointment of Directors Key Managerial Personnel & SeniorManagement their remuneration and evaluation. The same is also briefed in the CorporateGovernance Report.

The Board has carried out annual evaluation as per criteria laid down by the Nominationand Remuneration Committee.

Further Mr. Bimal Khandelwal was appointed as Chief Financial Officer of the Companywith effect from 21 April 2017.

Ms. Nandini Adya resigned from the directorship of Company w.e.f 19 May 2017. TheBoard places on record its appreciation of her contribution during her tenure as Director.

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors have given a declaration confirming that they meet thecriteria of independence as provided in Section 149(6) of the Act and Regulation 16(1)(b)of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 {Listing Regulations}.

MEETINGS OF THE BOARD

The details of meetings of the Board of Directors of the Company are contained in theCorporate Governance Report.

PROMOTER GROUP

The Company is a part of the Avantha Group the business conglomerate led by theChairman Mr. Gautam Thapar. The Avantha Group has global presence. As required by theListing Regulations the Company periodically discloses its Promoter Promoter Group andpersons acting in concert in the shareholding pattern and other filings with the StockExchanges.

SUBSIDIARY COMPANIES

The Company has three Indian subsidiaries viz. BILT Graphic Paper Products Limited(BGPPL) Avantha Agritech Limited {(AAL) (formerly BILT Tree Tech Limited )} and PremierTissues (India) Limited (PTIL) and six foreign subsidiaries viz. four based in TheNetherlands namely Ballarpur International Holdings B.V (BIH) Bilt Paper B.V. (BPBV)Ballarpur Paper Holdings B.V. (BPH) Ballarpur Speciality Paper Holdings B.V. (BSPH)Sabah Forest Industries Sdn. Bhd. (SFI) based in Malaysia and BILT General Trading (FZE)based in UAE. AAL and PTIL are direct subsidiaries and BGPPL is a step down subsidiary ofthe Company.

Management Discussion and Analysis Report as annexed herewith comprises

a note on the performance of each of the subsidiaries. The audited accounts ofCompany's subsidiaries are available on the website of the Company and are not enclosed tothis Annual Report and the same may be provided to any member on request.

The Company has no joint venture or associate company.

CONSOLIDATION OF ACCOUNTS

Consolidated Financial Statement of the Company and its aforesaid 9 subsidiaries areannexed to this Report.

The performance and financial position of each of the subsidiaries are detailed in'Statement containing salient features of the financial statement of subsidiaries in FormAOC I pursuant to Section 129 of the Act'.

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 2017 and the date of the Board's report i.e. 23 May 2017.

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 standardshave been followed and there is no material departure;

• They had selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theloss of the Company for the financial year;

• They had taken proper and sufficient care for maintenance of adequate accountingrecords as provided in the Companies Act 2013 for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities;

• The annual accounts of the Company have been prepared on a "goingconcern" basis;

• They had laid down internal financial controls to be followed by the Company andthat 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 tenure of M/s. K. K. Mankeshwar & Co. Chartered Accountants StatutoryAuditors of the Company expires at the conclusion of the forthcoming Annual GeneralMeeting (AGM) of the Company. In view of the requirement of mandatory rotation the Boardof Directors on the recommendation of the Audit Committee propose to appoint M/s Sharp& Tannan Chartered Accountants (FRN 003792S) as Statutory Auditors for a period offive years. M/s Sharp & Tannan Chartered Accountants if appointed at forthcomingAGM shall hold office till the conclusion of 77th AGM of the Company and theirre-appointment shall be subject to ratification by the Members at every AGM to be heldduring the period of their appointment. The Board places on record its appreciation forcontributions of M/s K.K. Mankeshwar & Co. as Statutory Auditors of the Company.

M/s Sharp & Tannan Chartered Accountants Chennai (FRN 003792S) are intoAssurance Tax and Advisory services. They have pan India presence and have an experiencedteam. They also have several other prominent Indian companies as their clients in avariety of sectors like Construction Infrastructure Manufacturing Power transmissionand distribution Oil & Gas Automotive components Insurance etc.

The Company has received requisite certificate to the effect that their appointment ifmade at the forthcoming Annual General Meeting would be in accordance with Section 141 ofthe Act and that they hold a valid certificate issued by Peer review board of TheInstitute of Chartered Accountants of India.

Board's explanation to Auditor's qualification & emphasis of matter

"The qualified opinion on the liability for the put option on the Companypertaining

to subsidiaries and emphasis of matter regarding invocation of Strategic DebtRestructuring by the Lenders due to non fulfillment of debt obligations given by StatutoryAuditors in their report are self explanatory and also suitably explained in Note Nos. 44and 45 respectively of the Notes to the Financial Statements of the Company and does notrequire any additional comment(s)."

The Board had appointed M/s PDS & Co. Company Secretaries to conduct SecretarialAudit of the Company for the financial year 2016-2017. The Secretarial Audit Report forthe said financial year is annexed to this report.

The Board of Directors on recommendation of Audit Committee have appointed M/s.Bahadur Murao & Co. Cost Accountants (Registration No. 000008) as Cost Auditors ofthe Company to carry out the cost audit of paper manufactured in relation to thefinancial year ending 31 March 2018. The Company has received their written consent toact as Cost Auditors of the Company and that the appointment is in accordance with theapplicable provisions of the Act and rules framed thereunder. The remuneration of the CostAuditors has been approved by the Board of Directors on the recommendation of the AuditCommittee and the requisite resolution for ratification of remuneration of the CostAuditors by the members has been set out in the Notice of the Seventy Second AnnualGeneral Meeting of your Company.

CORPORATE GOVERNANCE

The Statutory Auditors M/s. K. K. Mankeshwar & Co. have certified compliance ofthe Company with the provisions of Corporate Governance in terms of Listing Regulations.Pursuant to the requirement of the Listing Regulations the report on Corporate Governancetogether with the said Compliance certificate is attached and forms part of this Report.

RELATED PARTY TRANSACTIONS AND 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 Regulation 23 of Listing Regulations were in theordinary course of business and at arm's length duly reviewed/approved by the AuditCommittee of the Company. Further there were no material contracts arrangements

or transactions with related parties which require disclosure in Form AOC-2.

Details of loans / guarantees / investments by the Company under Section 186 of theCompanies Act 2013 are provided in the financial statements of the Company.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has designed and

implemented a process driven framework for internal financial controls within themeaning of explanation to Section 134(5) (e) of the Companies Act 2013. For the yearended 31 March 2017 the Board is of the opinion that the Company has sound internalfinancial controls commensurate with the nature and size of its business operations;wherein controls are in place operating effectively and no material weaknesses exist. TheCompany has a process in place to continuously monitor the existing controls and identifygaps if any and implement new and / or improved controls wherever the effect of suchgaps would have a material effect on the Company's operation.

RISK MANAGEMENT

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 minimization of the same.

STATUTORY COMMITTEES

Details of various Committees of the Board viz. Audit Nomination & RemunerationStakeholders Relationship Corporate Social Responsibility and Risk Management constitutedin compliance with the provisions of the Companies Act 2013 and Listing Regulations viz.constitution purpose attendance etc. has been provided in the Corporate GovernanceReport as annexed with this Report.

The Board has accepted recommendations of the Committees wherever made.

STATUTORY POLICIES

In compliance of the various provisions of the Companies Act 2013 and ListingRegulations the Company has made the following policies which are available on thewebsite of the Company:

• Policy on materiality of and dealing with related party transactions

• Policy for determining material subsidiaries of the Company

• Corporate Social Responsibility Policy

• Policy for preservation of documents

• Policy relating to remuneration of Directors/Key Managerial Personnel

• Policy on determination of materiality of events

• Policy for fair disclosure of Unpublished Price sensitive information

• Whistle Blower Policy covering all employees and Directors for the vigilmechanism inter alia providing a direct access to a whistle blower to the Chairman of theAudit Committee.

• Policy on "Prevention of Sexual Harassment of Women at Workplace" inline with the requirement of "The Sexual Harassment of Women at Workplace(Prohibition Prevention and Redressal) Act 2013". There was no incident during theyear.

SIGNIFICANT/ MATERIAL ORDERS PASSED BY REGULATORS

There are no significant/ material orders passed by any Regulator/Courts/Tribunalimpacting the going concern status of the Company or impacting its operations in future.

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 Annexure 2.

extract of the annual return

An extract of the Annual Return as of 31 March 2017 pursuant to sub-section (3) ofSection 92 of the Companies Act 2013 and forming part of the report is annexed with thisReport as Annexure 3.

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 activities

undertaken by the Company as per CSR Policy of the Company in terms of said section andthe Companies (Corporate Social Responsibility Policy) Rules 2014 as amended is annexedwith this Report as Annexure 4.

ACKNOWLEDGEMENT

The Directors wish to convey their gratitude and appreciation to all of the Company'semployees for their professionalism creativity integrity and efforts in effectiveutilisation of available resources for the Company's performance.

The Directors would also like to thank the employee unions shareholders customersdealers suppliers bankers government and all other business associates for theircontinued support extended to the Company.

For and on behalf of the Board of Directors

GAUTAM THAPAR

Chairman DIN 00012289

B. HARIHARAN

Group Director (Finance)

DIN 00012432

Date 23 May 2017

Place New Delhi