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Andhra Paper Ltd.

BSE: 502330 Sector: Industrials
BSE 00:00 | 24 Sep 228.60 -3.45






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OPEN 232.35
52-Week high 283.60
52-Week low 177.50
P/E 19.51
Mkt Cap.(Rs cr) 909
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 232.35
CLOSE 232.05
52-Week high 283.60
52-Week low 177.50
P/E 19.51
Mkt Cap.(Rs cr) 909
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Andhra Paper Ltd. (ANDHRAPAP) - Director Report

Company director report

Dear Members

The Board of Directors has the pleasure in presenting its 57th Report along with theAudited Accounts for the year ended March 31 2021.

Performance Review

The performance of the Company for the financial year under consideration wassignificantly impacted by the disruptions caused due to COVID-19 lockdown restrictionscurtailed economic and academic activity. However the performance of the Company haswitnessed substantial improvement in the last quarter of the financial year.

Summary of Financial Results

(In Rs Crores)

Particulars For the year ended March 31 2021 For the year ended March 31 2020
Revenue from Operations 886.75 1269.70
Earnings before interest depreciation and taxation (EBITDA) 76.11 317.02
Finance costs 4.51 5.32
Depreciation 73.38 75.90
(Loss) / Profit before exceptional items (1.79) 235.80
Exceptional items (4.41) -
(Loss) / Profit before tax (6.20) 235.80
Tax expense (1.60) 22.88
(Loss) / Profit for the year (4.60) 212.92

There was no change in the nature of business during the year.


The Board of Directors at their Meeting held on May 11 2021 recommended a dividend ofRS 5 per equity share of RS 10 each for approval of the Shareholders at the forthcomingAnnual General Meeting.

Reclassification of Promoters

During the year International Paper Investments (Luxembourg) S.a.r.l. (IP LUX) sold itsentire shareholding representing 20% of its paid up capital of the Company through stockexchange mechanism. IP LUX and IP International Holdings Inc. (IPIH) applied to theCompany seeking their reclassification from Promoters to Public Shareholders. Theshareholders have approved the proposal through Postal Ballot on January 30 2021 and theCompany submitted the application(s) to Stock Exchanges for reclassification. Theshareholding of IP LUX and IPIH as on March 31 2021 is nil.

The applications are pending for Stock Exchanges' approvals.

Markets Customers and Commercial Excellence

The Company always believes in "Customer First" and continuesto move in the right direction to create more value for the customers.

The Customers prefer Company's products to print publish convert and sell. TheCompany's products enable & enhance their business success. The Company creates paperthat facilitate education and communication.

The Company is one of the largest manufacturers of uncoated freesheet and produces arange of Writing & Printing Papers along with other speciality papers like CupstockVirgin Kraft etc. for business & home consumers. Customers rely on the Company'ssignature brands including Truprint Ultra Primavera Writechoice Sapphire StarReflection Copier and Cupstock to name a few for a wide range of printing and convertingapplications.

Though FY 2020–21 is a challenging year which is mainly affected by LockdownsPartial Lockdowns Containment Zones closure of Corporates & EducationalInstitutions restrictions on logistics due to Covid-19 the Company had put in its bestefforts to achieve OTIF delivery rate (On- Time-In-Full) at 96% forecast accuracy to 91%and improved complaint closure to ~84% which is top tier in the Indian paperindustry.

Due to the pandemic demand pattern has changed dramatically in FY 2020-21 wherein thedemand for Writing & Printing Paper has dropped predominantly due to closure ofeducational institutions & corporates and at the same time demand for Packaging andFood Grade paper increased substantially. In order to meet the changed requirements of thecustomers the Company has come out with new & innovative products which helped theCompany to cater to the needs of the customers as well as generate revenues by optimisingthe resources.

The Company has changed the Product Mix by developing new products on war-footing toensure that the machines are well covered during the changed demand environment. Newproducts developed during the year like Pharma Print Thermal Base Paper AndhraSuperPrint Cupstock variants Virgin Kraft Fresho Pack etc. are well accepted in market.

It's our continuous endeavour keeping in mind the industry dynamics and changing needsof our customers to develop innovative sustainable and recyclable products. Apart fromdeveloping new products the Company's efforts are always on to improve and improvise theexisting products to suit the end applications & requirements based on feedback fromcustomers & channel partners.

The Company's concept of "Think Customer" continues to yielddesired results to enhance customer value by way of offering ‘right productsfor right applications' at an increased speed to address customer needs &grievances.

FY2021 Highlights:

• OTIF score - 96% one of the best in paper industry

• Increased sale of Cupstock variants (Cupstock & Bottom) by 169% (23990 MTvs. 8915 MT) –– Thus increased sale in Industrial segment by 10%

• Launched various products like Pharma Print SuperPrint Virgin Kraft Cupstockvariants helped us in covering the machines and increasing revenues & contribution

Raw Material Security

The Company continues its focus on production of high yielding clones with major focuson R & D program for production of second generation clones for increasingproductivity of land. The Company realizes that the long term sustainability of virginfiber supply depends on sustaining various farm forestry models by providing high yieldingclones for increasing farmer income and keeping farmers engaged in farm forestry programsin the catchment areas. To achieve this goal the Company continued the collaboration withthe Institute of Forest Genetic & Tree Breeding Coimbatore (IFGTB) to ensureappropriate approach for sharing best practices capacity building and executing R&Dprogram for enhancing productivity.

The Company also continued its focus on capacity building of local farming community bypartnering with them for production and distribution of clones in the catchment area ofthe mill. In this effort the Company had partnered witRs 17 nurseries for production anddistribution of clones. The Company remains focused on developing virgin fibre within aradius of 150 KM from the mill by linking farmer community with partner nurseries forincreasing plantation in the catchment area for sustainable supply of virgin fibre. TheCompany has developed a system to reach out to farmers and create awareness on the Companypractices of price ensure that they get best price and also ensure that farmers getsmaximum benefit in the supply chain of Virgin Fibre.

The Company's farm forestry program focused on the catchment area of the mill andresulted in the plantation of 52.1 lacs clones and 519 lacs seedlings covering 6580hectares of land and generated 32.9 lacs man-days of employment to the farmers.

Employee Development and Engagement

The Company's agenda for engaging and developing its employees includes initiatives toattract develop and retain talent. The key focus areas include diversity and inclusionsuccession planning developing a talent pool for critical positions quality of lifeprograms and leadership development.

The Company has taken a professional approach to industrial relations. The Companycontinued to treat people with dignity and respect as well as upheld important principlesof labour relations.

Leveraging the power of Information Technology

In an effort to enable better decision making timely and accurate managementinformation and improved financial and operation controls the Company successfullyupgraded existing ECC system to S/4 HANA. The Company also enabled Fiori Apps whichenables the top leadership to approve Purchase Requisitions and Purchase orders through anAPP.

Community Service and Engagement

The Company is committed to the cause of communities where it operates by supportingEducation Health & Wellness and Community Engagement.

The Company had adopted a CSR Policy which is placed on the Company's The Members of Corporate Social Responsibility Committee as on March31 2021 comprised of:

Mr. Sudarshan V. Somani – Chairman
Mr. S.K. Bangur – Member
Mr. Virendraa Bangur – Member
Mr. Rajendra Jain – Member

The Annual Report on CSR activities is attached as Annexure - 1 to this report.

Related Party Transactions

All related party transactions that were entered into during the financial year underreview were at arm's-length basis and also in the ordinary course of business. There wereno materially significant related party transactions entered into by the Company with thePromoters Directors Key Managerial Personnel which may have a potential conflict withthe interests of the Company at large.

The Board of Directors approved a Policy on Related Party Transactions which is placedon the Company's website. The related party disclosures are given in Notes to thefinancial statements.

Remuneration Policy

The Company has adopted the Nomination and Remuneration Committee Charter whichcontains inter alia framework for Directors' appointment and remuneration criteria fordetermining the qualifications positive attributes independence of a director and othermatters provided under Section 178(3) of the Companies Act 2013 ("The Act").

Pursuant to Section 178(4) of the Act the Company also adopted Remuneration Policyrelating to remuneration for the Directors Key Managerial Personnel and Senior Executivesin the rank of Vice President and above. The Remuneration Policy is placed on Company'swebsite.

Energy Conservation Technology Absorption & Foreign Exchange earnings and outgo

Particulars of conservation of energy technology absorption and foreign exchangeearnings and outgo as required under Section 134(3)(m) of the Act read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 are given in Annexure - 2 attached to this Report.

Risk Management

The Company has a robust business risk management framework to identify and evaluatebusiness risks and opportunities. This framework aims to create transparency minimizeadverse impact of risks on the business objectives and enhance the Company's competitiveadvantage. Some of the critical risks that have been identified are Fibre ProcurementCompetition risk Occupational Health & Safety etc.

Directors a. During the year under review Mr. Saurabh Bangur resigned as ChiefExecutive Officer of the Company effective May 31 2020 and was appointed as JointManaging Director of the Company effective June 1 2020.

b. Independent Directors

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 (6) of the Act and Regulations 16(1)(b) and25(8) of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("the SEBI Listing Regulations") and that theyare independent from the Management of the Company. Further all the Independent Directorshave given declarations that they complied with the Companies (Appointment andQualifications of Directors) Rules 2014.

A separate Meeting of Independent Directors was held on February 9 2021. All theIndependent Directors of the Company attended the said Meeting.

c. Non-Executive Directors

Mr . Rajendra Jain Director is liable to retire by rotation at the ensuing AnnualGeneral Meeting as per the provisions of the Companies Act 2013 and being eligibleoffered himself for reappointment.

d. Details of Key Managerial Personnel

As on March 31 2021 Mr. Shree Kumar Bangur Chairman

& Managing Director Mr. Saurabh Bangur Joint Managing Director Mr. Anish T.Mathew Director - Commercial & Chief Financial Officer and Mr. Aravind Matta CompanySecretary were the Key Managerial Personnel of the Company.

e. Meetings of the Board

During the year under review four Board meetings and four Audit Committee meetingswere held. The details of the meetings held are given in the Corporate Governance Reportforming part of this Report.

f. Performance Evaluation

Pursuant to the provisions of the Act and Regulation 17 of the SEBI ListingRegulations the Board has carried out the annual performance evaluation of Board as wellas the evaluation of the working of its Committees on various parameters.

A separate exercise for the financial year 2020-21 was carried out to evaluate theperformance of individual directors including the Chairman & Managing Director JointManaging Director and Director – Commercial who were evaluated on parameters such aslevel of engagement and contribution independence of judgment safeguarding the interestsof the Company and its minority shareholders etc.

g. Board Training and Induction

At the time of appointing a Director a formal letter of appointment is given tohim/her which inter alia explains the role function duties and responsibilitiesexpected of him/her as a Director of the Company. The Director is also explained in detailthe compliances required from him/her under the Act the SEBI Listing Regulations andother relevant Laws and Regulations. Details of Familiarization of Directors are disclosedon the Company's website.

h. Audit Committee

The Audit Committee as on March 31 2021 Mr. Praveen P. Kadle as Chairman and MessrsAdhiraj Sarin Arun Kumar Sureka and Shree Kumar Bangur as other Members. All therecommendations made by the Audit Committee were accepted by the Board.

Particulars of Employees

The information required pursuant to Section 197 read with Rule 5 (1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is provided in Annexure-3. If any Member is interested in obtaininginformation on Rule 5 (2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 such Member may write to the Company Secretary at the RegisteredOffice in this regard.

Vigil/Whistle Mechanism

The Company has adopted Whistle Blower Policy to deal with instance of fraud or anyunethical or improper practices. A copy of this Policy is placed on the Company's website.

Internal Financial Controls

The Company established internal financial control(s)commensuratewiththesizescaleandcomplexityoftheoperations. Internal audit function isbeing handled by a professional firm of chartered accountants. The main function ofInternal Audit is to monitor and evaluate adequacy of internal control system in theCompany its compliance with the operating systems accounting procedures and policies atall locations of the Company. Based on the report of internal audit function processowners take corrective action in their respective areas and thereby strengthen thecontrols. Significant audit observations and corrective actions are reported to the AuditCommittee.

Statutory Auditors audited the Internal Financial Controls (IFC) over financialreporting of the Company as of March 31 2021 in conjunction with audit of the financialstatements of the Company for the year ended on that date. Unmodified opinion on IFC wasgiven by them.

Statutory Auditors

The Members of the Company at the 55th Annual General Meeting held on August 1 2019reappointed Messrs Deloitte Haskins & Sells Chartered Accountants Statutory Auditorsof the Company for a second term of three years to hold office from the conclusion of 55thAnnual General Meeting till the conclusion of the 58th Annual General Meeting.

The Report of Auditors does not have any qualifications reservations or adverseremarks.

Secretarial Auditors

Pursuantof to the provisions of Section 204 of the Act and the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 the Company had appointed Messrs D.Hanumanta Raju & Co. a firm of Company Secretaries to undertake the secretarial auditof the Company for the financial year 2020-21. Secretarial Audit Report under Section204(1) of the Act issued by Messrs D. Hanumanta Raju & Co. Practicing CompanySecretaries in respect of financial year 2020-21 is attached as Annexure-4 to thisReport.

The Report of Secretarial Auditors does not have any qualifications reservations oradverse remarks.

Cost Auditors

In terms of Section 148 of the Act read with the Companies (Audit & Auditors)Rules 2014 the Board at their meeting held on May 11 2021 on the recommendation ofAudit Committee appointed M/s. Narasimha Murthy & Co. Cost Accountants as CostAuditors of the Company for the financial year 2021-22 at a remuneration of RS 7 lakhs(excluding applicable taxes) plus reimbursement of out-of-pocket expenses and theirremuneration is being submitted for ratification by the Members at the forthcoming AnnualGeneral Meeting.

Cost Accounting Records and Cost Audit

Cost accounting records for the financial year under review were maintained as per theCompanies (Cost Records and Audit) Rules 2014. M/s. Narasimha Murthy & Co. CostAccountants were appointed as Cost Auditors of the Company to audit the Cost Records forthe year ended March 31 2020. The Cost Audit Report for the financial year ended March31 2020 was filed with the Ministry of Corporate Affairs in September 2020.

The Cost Audit Report for the year ended March 31 2021 will be filed within the duedate.

Public Deposits

The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.

Particulars of loans guarantees or investments

No loans guarantees and securities covered under the provisions of Section 186 of theAct were given during the year under review. Details of investments made are disclosed inthe financial statements attached to this Report.

Subsidiary Company

The Company made an investment of RS 5.00 lakhs by way of share capital in Andhra PaperFoundation (Formerly known as IP

India Foundation) ("Foundation") incorporated under Section 25 of theCompanies Act 1956 wherein the excess of income over expenditure will be applied forpromoting its objectives. Accordingly the accounts of Andhra Paper Foundation were notconsolidated since the holding Company will not derive any economic benefit from itsinvestment in Foundation.

The Company undertakes that annual accounts of Foundation and the related informationwill be made available to the members of holding company seeking such information at anypoint of time. The annual accounts of Foundation are placed on the Company's website andare also available for inspection by any Member at the Registered Office of the Companyduring business hours on all working days of the Company. A statement containing salientfeatures of the financial statement of Foundation for the financial year ended March 312021 is attached as Annexure-5 to this Report.

Annual Return

In terms of Section 92(3) of the Act the Annual Return for the financial year endedMarch 31 2021 is displayed on the website of the company

Business Responsibility Report (‘BRR')

Pursuant to Regulation 34 of the SEBI Listing Regulations ‘BusinessResponsibility Report' forms part of this Report as Annexure-6 which describes theinitiatives taken by the Company from an environmental social and governance perspective.

Material changes and commitments affecting the financial position of the Company whichoccurred between end of financial year and date of the Report

There were no material changes and commitments affecting the financial position of theCompany which occurred between end of financial year and date of the Report.

Directors' Responsibility Statement

The Board of Directors hereby confirms and declares that:

• in the preparation of final accounts for the year ended March 31 2021 theapplicable accounting standards had been followed;

• they had selected such accounting policies and applied them consistently andmade judgements 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 financial year ended March 312021 and of the profit and loss of the Company for the year;

• they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

• they had prepared the accounts for the year ended March 31 2021 on a‘going concern' basis;

• they had laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;

• they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.


• During the year under review the Chairman & Managing Director of theCompany has not received any remuneration or commission from the subsidiary company.

• Ther e were no significant material orders passed by the regulators or courts ortribunals which would impact the going concern status of the Company and its futureoperations.

• The Company has zero tolerance for sexual harassment at workplace and hasadopted a policy on prevention prohibition and redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder for preventionand redressal of complaints of sexual harassment at workplace. Internal ComplaintsCommittee (ICC) has been set up to redress complaints received regarding sexualharassment. All women employees (permanent contractual temporary trainees) are coveredunder this policy. During the year no complaints were received by the Company underSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.

• All Policies as required under the Act or the SEBI Listing Regulations areavailable on the website of the Company


The Board of Directors wish to place on record their gratitude to the CentralGovernment Government of Andhra Pradesh Government of Telangana and Banks for theircontinued support during the year.

The Board of Directors wish to convey their thanks to the valued customers and dealersfor their continued patronage and place on record their appreciation of the contributionmade by all the employees during the year under review.

For and on behalf of the Board
Place: Hyderabad Shree Kumar Bangur
Date: June 21 2021 Chairman & Managing Director