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Andhra Paper Ltd.

BSE: 502330 Sector: Industrials
BSE 00:00 | 27 Jan 413.90 -7.10






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OPEN 420.60
52-Week high 509.95
52-Week low 201.10
P/E 5.62
Mkt Cap.(Rs cr) 1,646
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 420.60
CLOSE 421.00
52-Week high 509.95
52-Week low 201.10
P/E 5.62
Mkt Cap.(Rs cr) 1,646
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 58th Reportalong with the Audited Financial Statements for the year ended March 31 2022.

Performance Review

The performance of the Company for the financial year underconsideration has witnessed significant improvement throughout the financial year. Theseresults were driven by higher sales volume and higher sales price realization. Improvedproductivity from our mills helped to generate more volumes. The Company continued tofocus on important initiatives for improving safety and environmental compliance as wellas improving the customer experience and operational efficiencies.

Summary of Financial Results

Rs ( in crores)

Particulars For the year ended March 31 2022 For the year ended March 31 2021
Revenue from Operations 1380.23 886.75
Earnings before interest depreciation and taxation (EBITDA) 265.81 76.11
Finance costs 5.45 4.51
Depreciation 72.01 73.38
Profit / (Loss) before exceptional items 188.35 (1.79)
Exceptional items - (4.41)
Profit / (Loss) before tax 188.35 (6.20)
Tax expense 48.62 (1.60)
Profit / (Loss) for the year 139.73 (4.60)

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


The Board of Directors at their Meeting held on May 5 2022 recommendeda dividend of Rs. 7.50 per equity share of Rs.10/- each for approval of the Shareholdersat the forthcoming Annual General Meeting and is incompliance with the DividendDistribution Policy of the Company. The said Policy is disclosed on the Company'swebsite:

Markets Customers and Commercial Excellence

The Company continues to believe in "Customer First"and its endeavour to create more value for Customers.

The Company's products are predominantly used for printingpublishing and converting for the W&P segment. However with changing environment dueto COVID 19 first wave the Company went in the direction to produce Value Added Productslike Cupstock Pharma Print and Kraft. This capability helped in the second wave resultingin increased sales of Cupstock (YoY 38%) High BF Virgin Kraft (YoY 1893%) and PharmaPrint (YoY 110%).

Apart from developing new products keeping industry dynamics in mindcontinuous endeavour is being made to improve the existing products based on feedback fromcustomers & channel partners to make our products suit their requirements.

The Company overcame the challenging situation in Q1 & Q2 byleveraging the existing Export Network and existing Product Portfolio to balance thesupply position into Exports resulting in increased sales of 177% YOY.

With focus on meeting the changing work environment from WFH to Officesin the later part of the year the copier products were given thrust resulting in YoYgrowth of 37%.

It is therefore gratifying that even during these trying times theCompany's performance ranked amongst the best in the paper industry. Despite thevolatility in Q1 & Q2 during the partial lockdowns online classes and WFH theCompany achieved the highest sales in a year at 240479 Tons (YoY 39%) with Zero Stock atthe close of the year.

Though FY 2021–22 was another challenging year which was mainlyaffected by partial lockdowns WFH closure of Educational Institutions and restrictionson logistics due to Covid-19 the Company had put in its best efforts to achieve OTIFdelivery rate (On- Time-In-Full) at 95% forecast accuracy to 92.5% and improved complaintclosure to ~84% which is top tier in the Indian paper industry.

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

FY 2022 Highlights:

• Highest Sales of 240479 Tons

• Increased Export Sales by 177% one of the best in the PaperIndustry

• Significant growth in VAP segment like Cup Stock (38%) PharmaPrint (110%) & HBF Kraft (1893%)

• OTIF Score – 95% one of the best in the Paper Industry

Raw Material Security

The Company believes that the long-term sustainability for supply ofvirgin fibre depends on farm-forestry program and ensuring farmer's willingness tocontinue plantation of virgin fibre by improving yield of crops per unit area. The Companybelieves that improving yield besides ensuring right price of the produce is the onlyway by which farmer's income can be increased. Therefore the Company remains focusedon continuous Research & Development (R&D) program for production of high yieldingquality clones for increasing productivity of land. The Company remains committed incollaborating with likeminded premium institutes e.g. Institute of Forest Genetics &Tree Breeding Coimbatore (IFGTB) to ensure right approach for capacity building ofstakeholders sharing of best practices and execution of R&D program for enhancingproductivity of farmer's land.

The Company remains committed in capacity building of local communityin the journey envisaged for long-term sustainability for supply of virgin fibre throughfarm-forestry program. With this vision the Company has embarked on a journey ofdeveloping partner nurseries in respective areas within a radius of 150 KM from the Millsto cater to the requirement of clones of farming community to increase plantation in thecatchment area for sustainable supply of virgin fibre. The Company had partnered with 19Clonal Production Centres (CPC) during the year for production and distribution of highyielding Casuarina clones. The Company continues to reach out to farmers create awarenesson the price offered and ensuring that farmers get maximum benefit in the supply chain ofVirgin Fibre.

The Company has facilitated distribution of 563 lakhs of Casuarinaclones and seedlings combined covering 6327 hectares of land and generated 31.6 lakhsman-days of employment to the farmers under the farm-forestry program within the catchmentarea.

Employee Development and Engagement

The Company's agenda for engaging and developing its employeesincludes initiatives to attract develop and retain talent. The key focus areas includediversity and inclusion succession planning developing a talent pool for criticalpositions quality of life programs and leadership development.

The Company has taken a professional approach to industrial relations.The Company continued to treat people with dignity and respect as well as upheld importantprinciples of labour relations.

Leveraging the power of Information Technology

During the year under review the Company achieved lot of ITeffectiveness in business areas and enhanced the technological use in organisation.

Over the year 2021-22 there has been significant improvement in the ITDivision's innovation improvements of applications delivery of user's serviceproject management and the overall contribution to the organisation's mission andgoals.

Enhancement of the performance of SAP S/4 HANA as it relates to complexand time driven business activities such as real-time planning execution reporting andanalytics based on live data as well as prompt period closing and improved forecastingincluding SAP Analytics on Cloud (SAC) for insights and decision making andproliferation of visualisation tools like Power BI across the function.

The following projects were implemented during the year andsuccessfully rolled out:

• SAP Treasury and Risk Management applications;

• SAP GRC (Governance Risk Compliance) application in identifyingand managing risks in a proper manner.

• SAC (SAP Analytic Cloud)

• Developed in-house REEL WRAPING integration system with SAP

• Alternate printing solution against HP Managed printing service

• Implemented in- house grievance system for cost optimisation ofCloud GRIVANCE SYSTEM and successfully rolled out.

Outsourced Share Point portal service

• CYBERSECURITY implemented by CISCO umbrella AMP endpointsecurity with dual factor e-mail security system

• SharePoint

• Kronos - Contractor Management System (CMS) to provide a singlewindow experience for HR

• Zoom video collaboration system with added benefit of reducingthe costs time and network bandwidth

Community Service and Engagement

The Company is committed to the cause of communities where it operatesby supporting Education Health & Wellness and other genuine requirements of thepeople therein.

The Company considers the community as its key stakeholder and is oneof the foremost proponents of inclusive growth and has continued to undertake projects foroverall development and welfare of the society in the fields of health education ruraldevelopment and livelihood interventions etc. and is sensitive to its needs. The Companyalso extended co-operation and assisted the local administration in taking variouspreventive and safety measures.

The Company had adopted a CSR Policy which is placed on theCompany's website: The Members of Corporate SocialResponsibility Committee as on March 31 2022 comprised of:

Mr. Virendraa Bangur Chairman
Mr. Saurabh Bangur Member
Mr. Sudarshan V. Somani Member
Mr. Rajendra Jain Member

The Annual Report on CSR activities is attached as Annexure – 1 tothis report.


During the year the Company was awarded "Best Safety Performerfor the year 2021" by Confederation of Indian Industry for Unit: Kadiyam.

Related Party Transactions

All related party transactions that were entered into during thefinancial year under review were at arm's-length basis and also in the ordinarycourse of business. There were no material significant related party transactions enteredinto by the Company with the Promoters Directors Key Managerial Personnel which may havea potential conflict with the interests of the Company at large.

The Board of Directors approved a Policy on Related Party Transactionswhich is placed on the Company's website www. The disclosures onrelated party transactions are given in Notes to the financial statements.

Remuneration Policy

The Company has adopted the Nomination and Remuneration CommitteeCharter which contains inter alia framework for Directors' appointment andremuneration criteria for determining the qualifications positive attributesindependence of a director and other matters provided under Section 178(3) of theCompanies Act 2013 ("The Act").

Pursuant to Section 178(4) of the Act the Company also adoptedRemuneration Policy relating to remuneration for the Directors Key Managerial Personneland Senior Executives in the rank of Vice President and above. The Remuneration Policy isplaced on Company's website

Energy Conservation Technology Absorption & Foreign Exchangeearnings and outgo

Particulars of conservation of energy technology absorption andforeign exchange earnings and outgo as required under Section 134(3)(m) of the Act readwith Rule 8(3) of the Companies (Accounts) Rules 2014 are given in Annexure - 2 attachedto this Report.

Risk Management

The Company has a robust business risk management framework to identifyand evaluate business risks and opportunities. This framework aims to create transparencyminimize adverse impact of risks on the business objectives and enhance the Company'scompetitive advantage. Some of the critical risks that have been identified are FibreProcurement Competition risk Occupational Health & Safety etc.


a. During the year under review Mr. Mukesh Jain has been appointed asa Whole-time Director designated as Director - Commercial & Key Managerial Personneleffective November 10 2021 in place of Mr. Anish T. Mathew who resigned as a Director ofthe Company effective November 09 2021.

b. Independent Directors

All Independent Directors have given declarations that they meet thecriteria of independence as laid down under Section 149 (6) of the Act and Regulations16(1)(b) and 25(8) of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("the SEBI Listing Regulations") andthat they are independent from the Management of the Company and they are not aware of anycircumstance or situation which exist or may be reasonably anticipated that could impairor impact his ability to discharge his duties with an objective independent judgment andwithout any external influence. Further all the Independent Directors have givendeclarations that they complied with the provisions of Companies (Appointment andQualifications of Directors) Rules 2014. Further they have given declarations that theyhave complied with the Code for Independent Directors prescribed in Schedule IV to the Actand the Code of Business Conduct and Ethics of the Company.

A separate Meeting of Independent Directors was held on January 192022. All the Independent Directors of the Company attended the said Meeting.

Mr. Praveen P. Kadle and Mr. Adhiraj Sarin Independent Directorscompleted their second term on March 31 2022 and the Company filled the vacancies byappointing Mr. Virendra Sinha and Mr. Sitaram Sharma as Independent Directors of theCompany for a period of 3 years effective April 1 2022.

c. Non-Executive Directors

Mr. Virendraa Bangur Director is liable to retire by rotation at theensuing Annual General Meeting as per the provisions of the Companies Act 2013 and beingeligible offered himself for reappointment.

d. Details of Key Managerial Personnel

As on March 31 2022 Mr. Shree Kumar Bangur Chairman & ManagingDirector Mr. Saurabh Bangur Joint Managing Director Mr. Mukesh Jain Director -Commercial and Mr. Aravind Matta Company Secretary & Vice President (CorporateAffairs) are the Key Managerial Personnel of the Company.

The Board at the Meeting held on May 5 2022 has appointed Mr. MukeshJain as Chief Financial Officer effective May 5 2022 and re-designated him as Director -Commercial & Chief Financial Officer.

e. Meetings of the Board

During the year under review four Board meetings and four AuditCommittee meetings were held. The maximum interval between any two meetings did not exceed120 days as prescribed by the Companies Act 2013. The details of the meetings held aregiven in the Corporate Governance Report forming part of this Report.

f. Performance Evaluation

Pursuant to the provisions of the Act and SEBI Listing Regulations theAnnual performance evaluation of Board its Committees Chairman & Managing DirectorJoint Managing Director and Director – Commercial has been carried out based onvarious parameters.

A separate exercise for the financial year 2021-22 was carried out toevaluate the performance of all individual directors including Independent Directors whowere evaluated on parameters such as level of engagement and contribution independence ofjudgment safeguarding the interests of the Company and its minority shareholders etc.

g. Board Training and Induction

At the time of appointing a Director a formal letter of appointment isgiven to him/her which inter alia explains the role function duties andresponsibilities expected of him/her as a Director of the Company. The Director is alsoexplained in detail the compliances required from him/her under the Act the SEBI ListingRegulations and other relevant Laws and Regulations. Details of Familiarization ofDirectors are disclosed on the Company's website

h. Audit Committee

During the year the Audit Committee has been reconstituted byreplacing Mr. Shree Kumar Bangur with Mr. Saurabh Bangur as a Member of the Committee.

The Audit Committee as on March 31 2022 comprised of Mr. Praveen P.Kadle as Chairman and Messrs Adhiraj Sarin Arun Kumar Sureka and Saurabh Bangur as otherMembers. All the recommendations 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 inrespect of employees of the Company is provided in Annexure-3. Having regard to theprovisions of the second proviso to Section 136(1) of the Act the Annual Report excludingthe aforesaid information is being sent to the members of the Company. If any Member isinterested in obtaining information on Rule 5 (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 such Member may write to the CompanySecretary at the Registered Office in this regard or can inspect the relateddocuments/information at the Registered Office of the Company.

Vigil/Whistle Mechanism

The Company has adopted Whistle Blower Policy to deal with instance offraud or any unethical or improper practices. A copy of this Policy is placed on theCompany's website

Internal Financial Controls

The Company established internal financial control(s) commensurate withthe size scale and complexity of the operations. Internal audit function is being handledby a professional firm of chartered accountants. The main function of Internal Audit is tomonitor and evaluate adequacy of internal control system in the Company its compliancewith the operating systems accounting procedures and policies at all locations of theCompany. Based on the report of internal audit function process owners take correctiveaction in their respective areas and thereby strengthen the controls. Significant auditobservations and corrective actions are reported to the Audit Committee.

Statutory Auditors audited the Internal Financial Controls (IFC) overfinancial reporting of the Company as of March 31 2022 in conjunction with audit of thefinancial statements of the Company for the year ended on that date. Unmodified opinion onIFC was given by them.

Statutory Auditors

The Report of Auditors for the fiscal year 2022 does not have anyqualifications reservations or adverse remarks. The Report is enclosed with the financialstatements in this Annual Report.

The Members of the Company at the 55th Annual General Meeting held onAugust 1 2019 re-appointed Messrs Deloitte Haskins & Sells Chartered AccountantsStatutory Auditors of the Company for a second term of three years to hold office from theconclusion of 55th Annual General Meeting till the conclusion of the ensuing 58th AnnualGeneral Meeting.

Messrs Deloitte Haskins & Sells Chartered Accountants StatutoryAuditors of the Company are completing their second term at the ensuing AGM and are noteligible for re-appointment. The Board at its Meeting held on May 5 2022 considered therecommendation of Audit Committee and recommended to the Members the appointment ofMessrs MSKA & Associates Chartered Accountants as Statutory Auditors of the Companyin place of retiring auditors for a term of five years to hold office from theconclusion of 58th Annual General Meeting till the conclusion of 63rd Annual GeneralMeeting corresponding to the financial years from 2022-23 to 2026-27.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed Messrs D. Hanumanta Raju & Co. a firm of Company Secretaries to undertakethe secretarial audit of the Company for the financial year 2021-22. Secretarial AuditReport under Section 204(1) of the Act issued by Messrs D. Hanumanta Raju & Co.Practicing Company Secretaries in respect of financial year 2021-22 is attached asAnnexure - 4 to this Report.

The Report of Secretarial Auditors does not have any qualificationsreservations or adverse 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 5 2022 on therecommendation of Audit Committee appointed M/s. Narasimha Murthy & Co. CostAccountants as Cost Auditors of the Company for the financial year 2022-23 at aremuneration of Rs.4.00 lakhs (excluding applicable taxes) plus reimbursement ofout-of-pocket expenses and their remuneration is being submitted for ratification by theMembers at the forthcoming Annual General Meeting.

Cost Accounting Records and Cost Audit

Cost accounting records for the financial year under review weremaintained as per the Companies (Cost Records and Audit) Rules 2014. M/s. NarasimhaMurthy & Co. Cost Accountants were appointed as Cost Auditors of the Company to auditthe Cost Records for the year ended March 31 2021. The Cost Audit Report for thefinancial year ended March 31 2021 was filed with the Ministry of Corporate Affairs inAugust 2021.

The Cost Audit Report for the year ended March 31 2022 will be filedwithin the due date.

Public Deposits

The Company has not accepted any deposits from public and as such noamount on account of principal or interest on deposits from public was outstanding as onthe date of the balance sheet.

Particulars of loans guarantees security or investments

The particulars of loans guarantees securities and investmentscovered under the provisions of Section 186 of the Act have been disclosed in thefinancial statements.

Subsidiary Company

The Company made an investment of Rs.5.00 lakhs by way of share capitalin Andhra Paper 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 therelated information will be made available to the members of holding company seeking suchinformation at any point of time. The annual accounts of Foundation are placed on theCompany's website and are also available for inspection by anymember at the Registered Office of the Company during business hours on all working daysof the Company. A statement containing salient features of the financial statement ofFoundation for the financial year ended March 31 2022 is attached as Annexure - 5 to thisReport.

Annual Return

In terms of Section 92(3) of the Act the Annual Return for thefinancial year ended March 31 2022 is displayed on the website of the Company

Business Responsibility Report (‘BRR')

Pursuant to Regulation 34 of the SEBI Listing Regulations‘Business Responsibility Report' forms part of this Report as Annexure - 6which describes the initiatives taken by the Company from an environmental social andgovernance perspective.

Material changes and commitments affecting the financial position ofthe Company which occurred between end of financial year and date of the Report

There were no material changes and commitments affecting the financialposition of the Company which occurred between end of financial year and date of theReport.

Directors' Responsibility Statement

The Board of Directors hereby confirms and declares that:

• in the preparation of final accounts for the year ended March31 2022 the applicable accounting standards had been followed;

• they had selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the financial year endMarch 31 2022 and of the profit and loss of the Company for the year;

• they had taken proper and sufficient care for the maintenance ofadequate accounting 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 2022on a ‘going concern' basis;

• they had laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively;

• they had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.


• During the year under review the Chairman & ManagingDirector of the Company has not received any remuneration or commission from thesubsidiary company.

• There were no significant material orders passed by theregulators or courts or tribunals which would impact the going concern status of theCompany and its future operations.

• During the year under review neither the statutory auditors northe secretarial auditor has reported to the audit committee under Section 143 (12) of theCompanies Act 2013 any instances of fraud committed against the Company by its officersor employees.

• The Company has zero tolerance for sexual harassment atworkplace and has adopted a policy on prevention prohibition and redressal of sexualharassment at workplace in line with the provisions of the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder forprevention and redressal of complaints of sexual harassment at workplace. InternalComplaints Committee (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.

• The Company has complied with all the applicable laws rulesregulations and Secretarial Standards.

• All Policies as required under the Act or the SEBI ListingRegulations are available on the website of the Company


The Board of Directors wish to place on record their gratitude to theCentral Government Government of Andhra Pradesh Government of Telangana and Banks fortheir continued support during the year.

The Board of Directors wish to convey their thanks to the valuedcustomers and dealers for their continued patronage and place on record their appreciationof the contribution made by all the employees during the year under review.

For and on behalf of the Board
Place: Rajahmundry Shree Kumar Bangur
Date: June 22 2022 Chairman & Managing Director