Your Directors are pleased to present the Directors Report along with auditedfinancial results of the company for the year ended 31 st March 2016.
1. FINANCIAL HIGHLIGHTS
Audited financial results of your company for the year ended 31st March2016 are summarised as under:
AUDITED FINANCIAL RESULTS
| || ||(Rs. in Cr.) |
|Particulars ||Year ended 31st March 2016 ||Year ended 31st March 2015 |
|Profit before interest and depreciation ||27.54 ||15.73 |
|Interest and finance charges ||2.55 ||3.36 |
|Depreciation ||4.25 ||4.86 |
|Profit before Exceptional Items ||20.74 ||7.51 |
|Exceptional & non-recurring items ||- ||- |
|Profit before taxation ||20.74 ||7.51 |
|Provision for Income Tax ||4.24 ||(8.03) |
|Profit after taxation ||16.50 ||15.54 |
|Balance brought forward ||(26.49) ||(42.03) |
|Available for appropriation: ||(9.99) ||(26.49) |
|- Transfer to General Reserve ||- ||- |
|- Proposed dividend ||- ||- |
|- Tax on proposed dividend ||- ||- |
|Balance carried to the Balance Sheet ||(9.99) ||(26.49) |
Though the company has achieved better financial performance vis-a-vis previous yearyour Directors do not recommend a dividend in view of carried forward losses.
3. STATE OF COMPANYS AFFAIRS
Review of operations 2015-16:
Volumes improved marginally during the year. However your company undertook a numberof measures to reduce costs. These coupled with softness in wood and furnace oil pricesled to better financial performance. The company posted a pre-tax Profit of Rs. 20.74Crores vis-a-vis a Rs. 7.51 Crores for FY 2014-15.
There is no change in the nature of the business of the company during the year.Further no material changes and commitments have occurred after the close of the yeartill the date of this
Report which may affect the financial position of the Company.
Expectations for FY 2016-17
Energy prices have started increasing again since January 2016. While domestic demandfor paper is increasing albeit at a slower pace than historical even this meagre growthis absorbed by imports under FTAs. Industry has represented to the Government a number oftimes to initiate mitigating measures. Similarly due to decline in wood prices pace offresh plantations have decelerated.
Your company will continue to strive for effective measures to face these challengesand improve performance
4. ANNUAL- RETURN EXTRACTS
Extracts of the Annual Return as provided in Section 92(3) of the Companies Act 2013in MGT-9 is attached as Annexure-I
5. BOARD MEETINGS/AUDIT COMMITTEE
a) During the financial year 2015-16 five (5) meetings of the Board of Directors wereheld on 20.05.2015 14.08.2015 24.09.2015 061.2015 12.02.2016.
b) Audit & Risk Management Committee-
The Company has constituted the Audit & Risk Management Committee of the Boardpursuant to Section 177 of the Companies Act 2013 and its terms of reference are inconformity with SEBI (Listing Obligations & Disclosure Requirements) Regulations2015. The composition of Committee is mentioned in the Corporate Governance Report.
6. MANAGEMENTS DISCUSSION AND ANALYSIS REPORT
Managements Discussion and Analysis Report for the year under review is presentedin a separate section forming part of the Annual Report for 2015-16.
7. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
Pursuant to Section 177 of the Companies Act 2013 the company has established aVigil Mechanism for directors and employees to report their genuine concernsto the company. The company oversees this Vigil Mechanism through the Audit& Risk Management Committee of the Board.
8. ENVIRONMENT POLLUTION CONTROL AND SAFETY
STAR is committed to provide healthy environment and safe working conditions to all thestakeholders. Your company is accredited with ISO 14001: 2004 ISO 9001 : 2008 & ISO18001 :2007. We have integrated quality and environment management systems which harmonizeoperations with environmental preservation. We have the required environmental clearancesfrom the Government authorities.
This year your company has won Platinum Award for environmental excellence in PaperIndustry presented by Greentech Foundation New Delhi reflecting commitment of the companyto preserve environment and providing safe work conditions.
9. SOCIAL FARM FORESTRY
Your company has been promoting and encouraging social farm forestry to increase greencover enhance raw material base and supplement rural income generation. The programmaintained its momentum during the year too. The company distributed 333 lacs seedlings tofarmers during the year covering an area of 13320 hectare.
10. FIXED DEPOSITS
The company has not invited any fixed deposits during the year and as such there hasbeen no default in repayment of deposit outstanding fixed deposits as on 31stMarch 2016. (Rs. Nil as on 31st March 2015). The company is in compliancewith provisions of the Companies Act 2013 and rules made thereunder in respect ofdeposits.
11. INTERNAL CONTROLS
The company has adequate internal control systems in place on the basis of whichfinancial accounting is done and periodically financial statements are prepared. SuchInternal control systems are adequate and operating effectively.
12. REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to Section 135 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 the Company has constituted Corporate SocialResponsibility (CSR) Committee. Your company is committed to discharge its socialresponsibility by undertaking various initiatives from time to time which would benefitthe society at large. As the average net profits of immediately preceding three financialyears is negative there was no requirement of spending on CSR activities during FY2015-16. Even then your company has spent Rs. 15.15 lacs on various CSR initiatives.
In terms of Section 152 of the Companies Act 2013 Sh. S.V Goenka (DIN-00030375) shallretire by rotation at the forthcoming Annual General Meeting and being eligible offerhimself for re-appointment.
The members in their last AGM held on 27th Sept. 2015 have appointed Sh. G.P. Goenka(DIN-00030302) as Executive Director of the company w.e.f. 20th May 2015 for a period of3 years. He is designated as Executive Chairman.
Members have approved the appointment of Ms. Savita L. Acharya (DIN 07038198) asIndependent Director under the Companies Act 2013 for a period of five (5) years notliable to retire by rotation. The Company has received declarations from all theIndependent Directors of the Company confirming that they meet the criteria ofindependence as laid down under Section
149(6) of the Companies Act 2013 and SEBI Listing Regulations 2015. Thecompanys familiarization program for Independent Directors is posted on the websiteof the company and can be accessed at http://www.starpapers.com/familarisation_prog.pdf.
14. NOMINATION AND REMUNERATION COMMITTEE/POLICY
The Board of Directors has constituted a Nomination & RemunerationCommittee which follows the companys policy on directors appointment andremuneration including criteria for determining qualification positive attitudesindependence of a director and other matters provided under section 178 (3) of theCompaniesAct 2013.
The gist of companys policy on nomination and remuneration is as under:
The Committee shall consider ethical standards of integrity qualification expertiseand experience for appointment of Directors/KMP etc. and recommend to the Board ofDirectors. Directors/
KMP etc shall be appointed as per the procedure laid down in applicable laws.
The Committee will recommend the remuneration to be paid to Directors/KMP etc requiringCommittee approval as per statutory provisions. The level and composition of remunerationso determined by the Committee shall be reasonable and sufficient to attract retain andmotivate the appointee(s).
15. LOAN GUARANTEE INVESTMENTS ETC.
The company has not given any loan or guarantee or provided security in connection withany loan to any other body corporate during the year.
16. PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
Particulars regarding energy conservation technology absorption and foreign exchangeearnings/outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 are furnished as Annexure-II to this Report.
17. PARTICULARS OF EMPLOYEES AND REMUNERATION
Information in accordance with the provisions of Section 134(3)(q) and Section 197(12)of the Companies Act 2013 read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 regarding employees remuneration are givenhereunder:
i) Name of the employee who is in receipt of remuneration of Rs. 60 lacs or more for FY2015-16:
|Name & Designation ||Remuneration* recd.-(lacs) ||Nature of employment ||Qualification & experience ||Date of com- mencement of employment ||Age ||Last employment held ||% of equi- ty shares held ||Whether relative to director |
|Mr. G.P Goenka Executive Chairman ||90.65 ||Contractual ||B. Sc. 55 years ||20/05/2015 ||75 Y ||Executive Director-Duncan Industries Ltd. ||Nil ||Yes |
|Mr. Madhukar Mishra Managing Director ||151.73 ||Contractual ||B. Sc. DMS (Mgt.) 38 years ||01/07/2001 ||59 Y ||Sr. VP(Corporate Planning) -Dail Consultants Ltd. ||Nil ||No |
*including employers provident fund contribution. ii) Disclosure in respect ofRemuneration etc.- a) Ratio of remuneration of each director to the median remuneration ofemployees
|Director ||Director remuneration (DR)-Rs. ||Median remuneration (MR) of ||Ratio (DR/MR) |
| || ||employee || |
|MR. G.P. GOENKA ||9065646 ||224447 ||42.39 |
|MR. S.V. GOENKA ||30000 ||224447 ||0.13 |
|MR. SHIROMANI SHARMA ||190000 ||224447 ||0.84 |
|MR. C.M. VASUDEV ||130000 ||224447 ||0.58 |
|MR. M.P. PINTO ||80000 ||224447 ||0.35 |
|MS. SAVITA L. ACHARYA ||130000 ||224447 ||0.58 |
|MR. MADHUKAR MISHRA ||15173298 ||224447 ||67.60 |
b) % increased in remuneration of each director CEO CFO CS in the financial year2015-16
|Official name ||Year 2015-16 ||% increased in remuneration |
| ||Remuneration-Rs. || |
|Directors ||Directors are receiving only sitting fees for attending meetings. The sitting fee was increased from Rs. 10000/- per meeting to Rs. 20000/- per meeting w.e.f. 12th Feb. 2016. || |
|Managing Director ||151.73 lacs ||4% |
|Chief Financial Officer ||23.52 lacs ||3% |
|Company Secretary ||8.85 lacs ||3% |
c) % increase in median remuneration of employees in the financial year 2015-16 was:Nil. d) Number of permanent employees on the rolls of the company as on 31.03.16 was 661.e) Average increase in remuneration inter-alia depends upon the inflationindividuals performance company policy human resource demand-supply positionnegotiations with trade unions company performance etc. f) Considering performance of thecompany remuneration of KMPs i.e Managing Director CFO and CS was at par. g) A number ofparameters of the company as on 31.03.2016 and 31.03.2015 as under:
|Parameters ||As on 31.03.2016 ||As on 31.03.2015 |
|Market capitalization-Rs. ||543950997 ||303582407 |
|Closing price/share-Rs. ||34.85 ||19.45 |
|Price/ earnings ratio ||3.30 ||1.95 |
| ||42% decrease in price ||67% decrease in price |
|% decrease in market quotation of the share in comparison to rate at which last public offer was made (Rs. 60/per share) || || |
h) Average percentage increase in salaries of employees vis-a-vis managerial personnel- Average percentage increase in salaries of employees was 9% vis-a-vis 5 % increase insalary of managerial personnel for FY 2015-16. i) No director is getting any variablecomponent of remuneration except performance pay of the Managing Director is decided bythe Board of Directors every year based on performance terms of appointment and applicablestatutory provision. j) Ratio of remuneration of highest paid director to that ofemployees receiving remuneration in excess of that of highest paid director-N.A
18. PERFORMANCE EVALUATION
The company has in place a Policy on performance evaluation of Independent DirectorsBoard Committees and individual Directors. The Board of Directors evaluates its ownperformance in terms of operations of the company financial results etc. The performanceof Committee(s) is evaluated by the Board based on effectiveness of committee itsfunctioning and decisions etc. The Board also reviews the performance of individualdirector(s) based on the contribution of the individual director to the Board/ committeemeetings participation in discussion inputs given in the meeting.
19. HUMAN RESOURCES AND WELFARE
STAR continue to lay emphasis on regular employee-skill development programs to addressthe changed working conditions and environment and also needs of the organisation. Yourcompany continues to have a cordial and harmonious relations with its work-force at alllevels.
Your Directors further state that during the year under review there was no casereported under the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
20. DIRECTORS RESPONSIBILITY STATEMENT
As required under the provisions of Section 134(3)(c) Directors ResponsibilityStatement on preparation and presentation of these accounts is as per Annexure-III to thisReport.
21. CORPORATE GOVERNANCE
from Aseparatereportoncorporategovernancealong the statutory auditors confirming thecompliance withacertificate corporate governance requirements has been annexed as
Annexure-IV to Directors Report.
M/s Lodha & Co. Chartered Accountants retire at the ensuing Annual GeneralMeeting. They have expressed their willingness to continue in office if appointed andhave furnished the requisite certificate of their eligibility pursuant to the provisionsof the CompaniesAct 2013.
23. COST AUDITORS
Pursuant to Section 148(3) of the Companies Act 2013 read with the Rules madethereunder the Board of Directors on the recommendation of Audit & Risk ManagementCommittee has appointed M/s R.J. Goel & Co. Cost Accountants as the Cost Auditors ofthe Company for the financial year 2015-16.
24. AUDITORS REPORT
i) Statutory Audit:
The observation of the Auditors in their report read with relevant note on thefinancial statements is self-explanatory. ii) Secretarial Audit:
M/s D. Dutt & Co. company secretary in practice secretarial auditor of thecompany for FY 2015-16 has competed secretarial audit for FY 2015-16. Secretarial auditreport is attached as Annexure-V.
25. TRANSACTIONS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the company during the financialyear with related parties were in the ordinary course of business and on arms lengthbasis. During the year the company had not entered into any contract / arrangement /transaction with related parties which could be considered material. Information pursuantto Section 134(3)(h) of the Act read with rule 8(2) of the Companies(Accounts) Rules 2014are given in Annexure-VI in Form AOC-2 and the same forms part of this report.
26. RISK MANAGEMENT
The Company is having Risk Management framework covering identification evaluation andcontrol measures to mitigate the identified business risks.
27. LISTING ON STOCK EXCHANGES
Your companys equity shares are listed on National Stock Exchange of India Ltd.(NSE) and The Stock Exchange Mumbai (BSE). The company has paid the listing fees to thestock exchanges for the financial year 2015-16.
Your Directors are pleased to place on record their gratitude for the excellent supportand efforts put in by the employees bankers investors dealers suppliers and GovernmentDepartments.
| ||For and on behalf of the Board |
|Place : New Delhi || |
|Date : 25th May 2016 ||G. P. Goenka |
| ||Executive Chairman |