To the Members
The Directors have pleasure in presenting before you the 3rd Annual Reportof the Company together with the Audited Financial Statements for the year ended 31stMarch 2017.
| ||2016-2017 ||2015-16 |
| ||(Rs. in Lacs) ||(Rs. in Lacs) |
|The Earning Before Interest Tax Depreciation and Amortization ||4696.91 ||3492.53 |
|Less: || || |
|i) Finance cost ||991.81 ||1688.11 |
|ii) Depreciation ||664.78 ||533.46 |
|The net profit before tax ||3040.32 ||1270.96 |
|Add: || || |
|The balance of Profit brought forward from last year ||1299.50 ||1.12 |
|Total ||4339.82 ||1272.08 |
|Less: || || |
|Provision for Current Taxation ||700.00 ||250.00 |
|Provision/(Saving) for Deferred Taxation ||353.00 ||9.00 |
|Dividend on Equity Shares || ||94.95 |
|Tax on Dividend (for earlier year) ||1.07 ||18.26 |
|Transfer to General Reserve ||200.00 ||200.00 |
|Total ||1254.07 ||572.21 |
|Balance proposed to be carried forward to next year's accounts ||3085.75 ||699.87 |
The Board of Directors recommends the payment of Dividend for the year ended 31stMarch 2017 at the rate of Rs. 0.15 per share. If approved the Equity Dividend shall bepaid subject to the provisions of section 126 of the Companies Act 2013 to thoseshareholders whose names stand on the Register of Members on 22nd July 2017.
The Dividend in respect of shares held in electronic form will be paid to all thosebeneficial owners of the shares as per the details furnished by depositories for thepurpose at the close of business hours on 10th July 2017.
The Directors are happy to report that during the year under review the Company hassold 60483 MT of paper which is more by about 23% over quantity sold in previous yearinspite of adverse impact of demonetization particularly in the intervening period oneconomy in general. The Company has achieved a turnover of about Rs. 543 crores andEarning Before Interest Depreciation Tax & Amortisation (EBIDTA) of Rs. 46.97 croresregistering an increase of over 10% and 34% respectively over the corresponding figures oflast year. The net profit after tax at Rs. 19.87 crores has witnessed a growth by 96% overthe last year. The sharp increase in profitability has primarily been on account ofcomparatively lower input costs change in product mix including developing new grades ofpaper and dynamic market strategy adopted to address changing market conditions. WhilstPaper Division segment which manufactures wide range of Specialty Paper products could getsome advantage by adopting appropriate market strategy during and after demonetizationperiod the Hygiene Products Division which markets converted tissue products under itsbrand name 'Greenlime' did somewhat suffer due to disruption caused by the said event.
A project for installation of 132/100 KV Sub-station as also a full width SuperCalendar Project involving an outlay of about Rs. 30 Crores is in advanced stage ofcompletion and is likely to be completed in the first half of 2017-18. These projects areexpected to further supplement efforts of the Company to improve its profitability.
As informed to you earlier pursuant to the Scheme of Arrangement and Reconstruction(Demerger) as sanctioned by the Honb'le Bombay High Court the "Fixed DepositsLiability" was transferred from Pudumjee Pulp & Paper Mills Limited to theCompany. Your Company holds fixed deposits accepted from Public with effect from theeffective date of the scheme i.e. 1st February 2016. The repayments ofdeposits as and when due are being made and all other obligations are regularly met by theCompany.
i. STATUTORY AUDITORS:
Pursuant to the Section 139 of the Companies Act 2013 and the Rules made there under aStatutory Auditor can be appointed for the period of 5 years subject to the ratificationby shareholders at every Annual General Meeting.
Messrs. Khare & Company (Registration No. F105100W) the Company's Auditors wereappointed to hold office till the conclusion of 6th Annual General Meeting atthe 2nd Annual General Meeting of the Company.
However Messrs. Khare & Company Chartered Accountant have expressed theirunwillingness to continue as the Statutory Auditors of the Company beyond ensuing AnnualGeneral Meeting as indicated in their letter dated 20th May 2017.
In view of that the Board of Director at their meeting held on 20th May2017 recommended the appointment of M/s. J. M. Agrawal & Company CharteredAccountants (Firm Registration No. 100130W) as a Statutory Auditor of the Company subjectto the approval of the shareholders in the ensuing General Meeting for a period of 5 yearsi.e. from the conclusion of this meeting till the conclusion of the 8th AnnualGeneral Meeting of the Company.
The Company has received the consent from the M/s. J. M. Agrawal & CompanyChartered Accountants (Firm Registration No. 100130W) and confirmation to the effect thatthey are not disqualified to be appointed as the Auditors of the Company in terms of theprovisions of the Companies Act 2013 and rules made thereunder. The Shareholders will berequired to appoint the auditors and fix their remuneration at the ensuing Annual GeneralMeeting.
There is no adverse remark or qualification in the Statutory Auditor's Report annexedelsewhere in this Annual Report.
The Auditors have reported that there is no fraud on or by the Company noticed orreported during the year.
ii. SECRETARIAL AUDITOR:
Pursuant to provisions of Section 204 read with Section 134(3) of the Companies Act2013 the Board has appointed Mr. I. U. Thakur Company Secretary Pune to conductSecretarial Audit of the Company for the financial year 2016-17. The Secretarial AuditReport for the financial year 2016-17 is annexed hereto as Annexure No. 1.
There is no qualification in the Secretarial Audit Report.
iii. COST AUDITORS:
The Board of Directors on the recommendation of Audit Committee has appointed M/s. Y.R. Doshi & Co. Cost Accountants Mumbai as Cost Auditor to audit the Cost Accounts ofthe Company for the financial year 2017-18. As required under the Companies Act 2013 aresolution seeking Member's approval for the remuneration payable to the Cost Auditorsforms part of the Notice convening the Annual General Meeting.
DETAILS OF APPOINTMENT OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):
In terms of provisions of the Companies Act 2013 and the Article of Association of theCompany Mr. Ved Prakash Leekha Managing Director of the Company retires by rotation atthe ensuing Annual General Meeting and being eligible offers himself for re-appointment.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theapplicable provisions of the Companies Act 2013 and applicable regulations of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
During the year 6 Board Meetings and 6 Audit Committee Meetings were convened and held.The details of which are given in the Corporate Governance Report and forms part of thisAnnual Report. The intervening gap between the Meetings was within permissible periodprescribed under the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
As required under the provisions of the Companies Act 2013 the Board of Directors hasconstituted the Corporate Social Responsibility Committee. The major role of thisCommittee is to formulate recommend implement and monitor the CSR policy and activitiesto be undertaken by the Company to meet/contribute towards its corporate socialresponsibility objectives. The Board of Directors at its meeting held on 20thMay 2017 has constituted its CSR Committee. Some of the activities which will beundertaken by the Company itself or through an eligible trust are as under;
c) Vocational Development
The CSR committee comprises of the following members:
|Sr. No. ||Name of the Director ||Category ||Designation |
|1 ||Mr. Nandan Damani ||Non Executive Independent Director ||Chairman |
|2 ||Mr. V. K. Beswal ||Non Executive Independent Director ||Member |
|3 ||Mr. B. K. Khaitan ||Non Executive Independent Director ||Member |
|4 ||Mr. S. K. Bansal ||Non Executive Non Independent Director ||Member |
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Particulars of loans given investments made guarantees given and securities providedalong with the purpose are provided in Annexure No.2 to this Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
A policy on Related Party Transactions has been adopted by the Board of Directors atits meeting held on 14th November 2015 for determining the materiality oftransactions with related parties and dealings with them. The said policy is available atthe Company's website at www.pudumjee.com.The Audit Committee reviews all related partytransactions quarterly and also as and when felt necessary.
Pursuant to Section 134 (3) 188 (1) of the Companies Act 2013 read with Rule 8(2) ofthe Companies (Accounts) Rules 2014 the particulars of contracts/arrangements enteredinto by the company with related parties referred to in sub-section (1) of section 188 ofthe Companies Act 2013 in Form AOC -2 are provided as Annexure No. 3.
ANNUAL EVALUATION OF BOARD'S PERFORMANCE:
As required under Companies Act 2013 a meeting of the Independent Directors was heldon 4th February 2017 to evaluate the performance of the Non-IndependentDirectors wherein the evaluation of performance of the Non-Independent Directorsincluding the Chairman and also of the Board as a whole was made against pre-defined andidentified criteria.
The criteria for evaluation of the performance of the Independent Directors Chairmanand the Board was finalized by the Nomination and Remuneration Committee in its meetingheld on 22nd January 2016 the said committee has carried out evaluation ofthe performance of every Director. The said criteria is available at the Company's websiteat www.pudumjee.com. The Board of Directors at their meeting held on 4thFebruary 2017 has evaluated the performance of Independent Directors.
While evaluating the principles and guidelines issued vide circular no.SEBI/HO/CFD/CMD/CIR/P/2017/004 of Securities Exchange Board of India dated 5thJanuary 2017 on Board Evaluation have been taken into account.
The details of programmes for familiarisation of Independent Directors with the Companyis available at the Company's website at www.pudumjee.com.
RISK MANAGEMENT POLICY:
In accordance with the requirements of the Act the Company has adopted and implementeda Risk Management Policy for identifying risks to the Company procedures to inform Boardmembers about the risk assessment & minimization procedures monitoring the riskmanagement plan etc.
VIGIL MECHANISM / WHISTLE BLOWER MECHANISM:
The Company promotes ethical behaviour in all its business activities and hasestablished a vigil mechanism for Directors and Employees to report their genuineconcerns.
Pursuant to Section 177 of the Companies Act 2013 read with Regulation 22 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasformulated a policy "Vigil Mechanism / Whistle Blower Policy" wherein theEmployees/Directors/Stakeholders of the Company are free to report any unethical orimproper activity actual or suspected fraud or violation of the Company's Code ofConduct. This mechanism provides safeguards against victimization of Employees who reportunder the said mechanism. During the year under review the Company has not received anycomplaint under the said mechanism. The said policy is available at the Company's websiteat www.pudumjee.com.
PARTICULARS OF EMPLOYEES:
As required under Section 197(12) of the Companies Act 2013 read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the statement givingrequired details is given in the Annexure No(s). 4 and 4 A to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
There was no complaint reported under the Prevention of Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO:
As required under Section 134(3) (m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 the information relating to Conservation of EnergyTechnology Absorption and Foreign Exchange Earnings & Outgo is annexed as Annexure No.5 and forms part of this Report.
REPORT ON CORPORATE GOVERNANCE:
Your Company's philosophy on Corporate Governance sets the goal of achieving thehighest level of transparency with integrity in all its dealings with its stakeholdersincluding shareholders employees lenders and others. A report on Corporate Governancealong with a Certificate from the practicing Company Secretary regarding the Compliance ofConditions of Corporate Governance as stipulated under the Listing Regulations forms partof the Annual Report as Annexure No.6.
EXTRACT OF ANNUAL RETURN:
Pursuant to sub-section 3 (a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 an extract of the Annual Return as at 31st March 2017 is annexedherewith as Annexure No. 7 to this report.
In accordance with the provisions of Section 178 and other applicable provisions of theCompanies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has formulated remuneration policy which inter aliaincludes the criteria for determining qualifications positive attributes and independenceof Directors. The said policy may be referred to at the Company's website i.e.www.pudumjee.com and is annexed hereto and marked as Annexure No. 8.
SIGNIFICANT AND MATERIAL ORDERS:
There is no significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and Company's operations in future.
DIRECTORS' RESPONSIBILITY STATEMENT:
The Directors confirm that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b) the Directors have 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 affairs of the Company at the end of the financial year and ofthe profits of the company for that period;
c) the Directors have 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;
d) the Directors have prepared the annual accounts on a going concern basis; and
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Directors would like to express their sincere appreciation of the positiveco-operation received from the Bankers Customers Vendors and Investors of the Companyfor their continued support during the year.
The Directors also wish to place on record their deep sense of appreciation for thededication and contribution made by employees at all levels and look forward to theirsupport in future as well.
| ||On Behalf of the Board of Directors |
|Place: Mumbai ||A. K. Jatia |
|Date: 20th May 2017 ||Chairman. |