To The Members of
Balkrishna Paper Mills Ltd
Your Directors have pleasure in presenting the Seventh Annual Report of the Companyalong with Audited Financial Statements for the financial year ended 31st March2020.
1. FINANCIAL RESULTS:
The summary of the financial performance of the Company for the financial year endedMarch 31 2020 compared to the previous year ended March 31 2019 is given below:
(' in Lakhs)
|Particulars ||2019-20 ||2018-19 |
|Net Turnover and Other Income ||19632.68 ||21445.35 |
|Profit/(Loss) before Depreciation and Tax ||(2608.08) ||(3703.02) |
|Less: Depreciation and Amortisation ||662.11 ||660.89 |
|Profit/(loss) before Tax ||(3270.19) ||(4363.91) |
|Less: Provision for Taxation: || || |
|Current Tax (MAT) ||(11.59) ||0.00 |
|Deferred Tax (Net) ||197.43 ||(140.01) |
|Profit after Tax ||(3456.03) ||(4223.90) |
|Add/(Less):Other Comprehensive Income (net of taxes) ||(13.01) ||10.00 |
|Total Comprehensive Income/ (Expenses) for the year ||(3469.04) ||(4213.90) |
During March 2020 Government of India has imposed lockdown and shut all the economicactivities due to COVID-19 pandemic as Corona positive cases increased rapidly resultedinto global crises. The Company has closed the factory and office to ensure health of theemployees/workers and advised the employees to work from home. Your Company has faced cashflow shortages due to its inability to collect dues from customers during the lockdownperiod. Paper & Paper Board demand was affected significantly due to the lockdown asindustrial and commercial establishments inter se Hotel Pharmaceuticals readymadeGarments etc. were shut down across the nation. This reduction in demand had an impact onthe business of the Company during the last week of March 2020. The impact on Paper andPaper Board demand is short term in nature and is expected to improve as and when thelockdown is fully lifted.
During the year under review the Gross turnover and other Income of your Company wasRs 19632.68 Lakhs as compared to ' 21445.35 Lakhs in the previous year. The net Loss forthe year stood at Rs 3469.04 Lakhs against Loss of Rs 4213.90 Lakhs in
the previous year.
Your Directors have not recommended any dividend for the financial year under review.
4. SHARE CAPITAL:
Authorized Share Capital:
During the year under review your company had increased the Authorised Share Capitalfrom Rs 360000000/- to Rs 1180000000/-. The
Authorised Share capital consist of 33000000/- Equity Shares of Rs 10/- each2500000/- 9% Cumulative Redeemable Preference Shares of Rs 100/- each and 6000000/-Preference Shares of Rs 100/- each.
Allotment of Preference Shares:
Your Company had issued and allotted 6000000
- 6.5% Non-Cumulative Redeemable Preference Shares of Rs 100 each at par as fully paidup to the Promoters/Promoters Group on Preferential basis. The said shares are not listedwith stock exchanges.
The issued subscribed and paid up Share Capital of the Company as on 31st March 2020are as under:
- Equity Share Capital: Rs 10.74 Crore
- Preference Share Capital: Rs 85.00 Crore.
The Company has not issued shares with differential voting rights nor granted stockoptions & sweat equity. As on 31st March 2020 none of the Directors ofthe Company hold convertible instruments in the Company.
5. REVISION OF FINANCIAL STATEMENT:
There was no revision of the financial statements for the year under review.
6. MANAGEMENT DISCUSSION AND ANALYSIS:
The COVID-19 pandemic and the economic shutdown in advanced economies and other partsof the globe have disrupted billions of lives and are jeopardizing decades of developmentprogress.
The global output growth in 2019 is estimated to be the slowest since the globalfinancial crisis of 2009 arising from a geographically broad-based decline inmanufacturing activity and trade. Stabilising yet uncertain trade tensions between twotop countries of the world have contributed to the decline of world output and trade. Thebalance of risks to the global outlook remains on the downside.
The COVID-19 recession is the first since 1870 to be triggered solely by a pandemic. Amidsta weak environment for global manufacturing trade and demand India's GDP growth inFY2019-20 slowed down to an 11-year-low of 4.2 per cent. In fact India's GDP for thefourth and final quarter of FY2019-20 fell to 3.1 per cent.
As per IPMA Paper is one of the leading manufacturing sectors that have borne thebrunt of imports the maximum. Several smaller paper mills and even a few large ones inIndia have been forced to shut down their operations due to commercial unviability.
The speed and strength of the recovery will depend on the effectiveness of the supportprograms governments and the international community put in place now; and critically onwhat policymakers do to respond to the new environment.
Your Company is engaged in manufacturing and marketing of quality Coated Duplex Boards.
As India travels through the path of economic uncertainty the GDP growth in the fourthquarter becomes important as it includes the figures for one week of lockdown. Even beforethe coronavirus cases started to surge in India the country's economy was strugglingthrough a prolonged economic slowdown. Due to high debt burden slowdown in economyunderutilisation of manufacturing capacity we could not increase the realisation rates inline with the expenses.
Your Company is looking forward with a progressive attitude to grow their presence andmarket share in the paper board industry in India and abroad.
Internal Audit and Control
Your Company's maintains all its records in ERP Systems and maximum approvals arerouted through this system. The Company has laid down adequate systems and supported bythe procedures for ensuring internal financial controls. The Company has appointed anexternal audit firm as Internal Auditors for day to day checking and monitoring theinternal control measures. Internal Auditors are present at the Audit Committee Meetingswhere internal Audit Reports are discussed along with management comments and the finalobservation of the Internal Auditor.
Opportunities Threats and Risk
The Company has been strengthening its risk management processes with the objective ofenhancing organisational stability and predictability. Due to slowdown of the economycould have an adverse effect on the revenues of the Company. The existing Paperboardplayers alive to the emerging international threats have been aggressively pursuingquality improvement programs coupled with cost rationalization. Increasingly more moderntechnologies are sought to be implemented with added focus on environmental compliance.
The Company has prioritized the personal development of its employees and the creationof a future-ready leadership team. The Company's talent management system believes ininternal grooming of our employees preparing them to take on higher responsibilities.This helped the Company strengthen its internal talent pool and reduce its dependence onexternal recruitment. The industrial relations at both unit at Ambivali and Bhiwandi arecordial.
The report contains forward looking statements describing expectations estimatesplans or words with similar meaning. The Company's actual results may differ from thoseprojected important factors that could make the difference to the Company operationsinclude prices of raw material power and finished goods changes in Governmentregulations economic developments globally and within India. The Company cannot guaranteethat the assumptions and estimates in the 'forward looking statements' are accurate orwill be realised.
7. CORPORATE GOVERNANCE:
A report on Corporate Governance as stipulated in SEBI (LODR) Regulations 2015together with Certificate from the Auditors of the Company confirming compliance ofconditions of Corporate Governance as stipulated under the aforesaid regulations formspart of the Annual Report.
8. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
Forgo of Remuneration:
Shri Anurag Poddar Chairman and Managing Director and Shri Ankit Poddar ExecutiveDirector have forgone their monthly remuneration due to poor financial position of theCompany with effect from 1st April 2019 and continue to do so till further communication.
Directors appointment / reappointment:
The Board of Directors on the recommendation of Nomination and Remuneration Committeehas approved the re-appointment and remuneration of Shri Anurag Poddar Chairman andManaging Director Shri Ankit Poddar Executive Director and Shri Shrutisheel JhanwarWhole time Director & Chief Financial Officer for a further period of 3 years witheffect from 11th February 2021 subject to approval of shareholders. Necessaryresolution have been put up in the Notice of ensuing AGM for approval of the members. YourDirectors commend their re-appointment
Brief particulars of Directors being appointed/ re-appointed as required by the SEBI(LODR) Regulations 2015 and Secretarial Standards on General Meetings are provided in theAnnexure to the notice convening the AGM of the Company.
Declarations by Independent Directors:
All the Independent Directors of the Company have given requisite declarations thatthey meet the criteria of independence as provided in Section 149(6) of the Companies Act2013 and also Regulation 16(1)(b) of SEBI (LODR) Regulations 2015.
Also your Company has received annual declarations from all the Independent Directorsof the Company confirming that they have already registered their names with the data bankmaintained by the Indian Institute of Corporate Affairs [IICA] as prescribedby the Ministry of Corporate Affairs under the relevant rules and that the onlineproficiency self-assessment test as prescribed under the said relevant rules is applicableto them and they will attempt the said test in due course of time.
9. NOMINATION AND REMUNERATION COMMITTEE:
The composition role terms of reference as well as powers of the Nomination andRemuneration Committee of the Company meets the requirements of Section 178 of theCompanies Act 2013 and Regulation 19 of the SEBI (LODR) Regulations 2015.
The Committee comprises of 3 Independent Directors.
The composition of the Nomination and Remuneration Committee* and category of membersis given in the table below:
|Name of the Director ||Category |
|1 Shri Ramanlal B. Golecha ||Independent Director |
|2 Shri Harish N. Motiwalla ||Independent Director |
|3 Shri Rakesh N. Garodia ||Independent Director |
* During the year under review one Meeting was held on May 13 2019.
Company's Policy on appointment and remuneration of Directors.
The Company has devised the Nomination and Remuneration Policy for the selectionappointment and remuneration of the whole time Directors Key Managerial Personnel andSenior Management Personnel. The extract of Nomination and Remuneration Policy is providedin the Corporate Governance Report and forms part of this Annual Report.
The Company's policy on remuneration for Directors and Senior Management employees aredisplayed on the website of the company at www.bpml.in.
Appointment of Independent Directors.
All Independent Directors of the Company are appointed for a term of 5 (five) years.Accordingly the Independent Directors viz. Shri Ramanlal B. Golecha hold office up to19th November 2022 and Shri Harish N. Motiwalla Shri Rakesh N. Garodia and Smt. MeghnaS. Shah hold office up to 10th February 2025.
Criteria for appointment of Independent Directors.
The Independent Directors shall be of high integrity with relevant experience andexpertise in the fields of manufacturing marketing finance taxation law governanceand general management so as to have a diverse Board.
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theNomination and Remuneration Committee has laid down the criteria for evaluation of theperformance of individual Directors the Board as a whole. Evaluation of performance isundertaken annually.
The performance evaluation of the Chairman and the Non-Independent Directors wascarried out by the Independent Directors at a separately convened meeting. The performanceevaluation of the Independent Directors was carried out by the entire Board (excluding theDirector being evaluated). The Company has implemented a system of evaluation on the basisof a structured questionnaire which comprises evaluation criteria taking intoconsideration various performance related aspects.
The Directors expressed their satisfaction with the evaluation process.
Remuneration of Non-Executive Directors : The
Non- executive Directors shall be entitled to receive remuneration by way of sittingfees reimbursement of expenses for participation in Board/Committee meetings andcommission if any after approval of the members.
10. DIRECTOR'S RESPONSIBILITY STATEMENT:
Pursuant to Section 134(3)(c) and 134(5) of the Companies Act 2013 with respect toDirectors' Responsibility Statement your Directors to the best of their knowledge herebyconfirm that :
a. That in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanation relating to material departures.
b. that the Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March2020 and of the Profit of the Company for that year under review;
c. that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d. that the Directors have prepared the accounts for the financial year on goingconcern basis;
e. the Directors have laid down internal financial
controls which are adequate and were operating effectively.
f. the Directors have devised proper system to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
11. DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES:
a. BOARD MEETINGS:
The Board of Directors met 4 times during the year on the following dates in accordancewith the provisions of the Companies Act 2013 and also rules made thereunder.
May 13 2019 July 30 2019 October 24 2019 January 31 2020.
In addition to the above Independent Directors Meeting was also held on March 162020.
b. COMMITTEES OF THE BOARD:
The Board has the following Committees:
1. Audit Committee;
2. Nomination and Remuneration Committee;
3. Stakeholders Relationship Committee;
4. Share transfer Committee.
5. Finance Committee
The details of these Committees along with their composition number of meetings andattendance at the meetings are provided in the Corporate Governance Report.
12. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return in Form No. MGT - 9 for the financial year ended 31st March2020 made under the provisions of Section 92(3) of the Act is attached as Annexure I whichforms part of this Report and is also available on the Company's website at www.bpml.in .
13. FIXED DEPOSITS
During the year under review your Company has not accepted any fixed deposits andthere were no unclaimed deposits or interest thereon as on 31st March 2020.
14. PARTICULARS OF LOANS GUARANTEES INVESTMENTS AND SECURITIES:
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes to Financial Statements.
15. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has framed a Whistle Blower Policy to deal with instances of fraud andmismanagement if any. The details of the Policy are given in the
Corporate Governance Report and the policy is posted on the Company's website atwww.bpml.in.
16. RELATED PARTY TRANSACTIONS :
All related party transactions that were entered into during the financial year were inthe ordinary course of business and were on an arm's length basis. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other related parties which may have a potential conflict with theinterest of the Company at large.
All related party transactions for the year are placed before the Audit Committee aswell as before the Board for approval. The transactions entered into with related partiesare reviewed on a quarterly basis by the Audit Committee.
The policy on Related Party T ransactions as approved by the Audit Committee and Boardis uploaded on the Company's website at www.bpml.in.
The details of the transactions with Related Parties to be provided in Form AOC-2 isannexed herewith as Annexure-II.
Members can refer to Note No. 37 to the Financial Statements which set out relatedparty disclosures.
17. RISK MANAGEMENT FRAMEWORK:
The Board of Directors of the Company has Risk Management Framework to avoid eventssituations or circumstances which may lead to negative consequences on the Company'sbusinesses and define a structured approach to manage uncertainty and to make use ofthese in their decision making pertaining to all business divisions and corporatefunctions. Risk Management Policy is available on Company's website at www.bpml.in.
18. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL
During the year under review there were no orders have been passed by any Regulator orCourt or Tribunal which can have impact on the going concern status and the Company'soperations in future.
19. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT 2013:
There were no material changes and commitments which could affect the Company'sfinancial position have occurred between the end of the financial year of the Company anddate of this report.
20. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The particulars as required under the provisions of Section134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo etc. arefurnished in Annexure III which forms part of this Report
The matters related to Auditors and their Reports are as under:
a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2020:
The observations made by the Statutory Auditors in their report for the financial yearended 31st March 2020 read with the explanatory notes therein are self- explanatory andtherefore do not call for any further explanation or comments from the Board underSection 134(3) of the Companies Act 2013.
Further there were no adverse remarks or qualifications of reservations in the auditreport submitted by auditors.
b. COST AUDITORS:
Pursuant to the provisions of Section 148 of the Companies Act 2013 read withNotifications/ Circulars issued by the Ministry of Corporate Affairs from time to timethe Board of Directors have appointed M/s. K. G. Goyal & Associates Cost Accountantsas a cost auditor of the Company for the Financial Year 2020-21.
The remuneration to be paid to Cost auditors require ratification by the shareholdersand accordingly necessary resolution for ratification for seeking approval of members isincluded in Notice of ensuing AGM.
c. SECRETARIAL AUDITORS.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed GMJ & Associates Company Secretaries in Practice to undertake SecretarialAudit for the financial year 2019-20. The Secretarial Audit Report is annexed herewith as Annexure- IV.
There is no Secretarial audit qualification for the year under review.
M/s GMJ & Associates Company Secretaries has issued certificate dated 17th July2020 certifying that none of the Directors on the Board of the Company during theFinancial year 201920 have been debarred or disqualified from being appointed orcontinuing as directors of the company by SEBI MCA or any such other Statutory authority.
22. INDUSTRIAL RELATIONS:
Industrial relations with staff and workmen during the year under review continued tobe cordial.
23. Sexual Harassment of Women at Workplace (Prevention Prohibition & Redressal)Act 2013:
The Company has formulated and implemented a policy of prevention of sexual harassmentat the workplace with mechanism of loading/redressal complaints. During the year underreview there were no complaints reported to the Board.
24. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT 2013 AND OTHER DISCLOSURESAS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014:
The information required pursuant to Section 197 of the Companies Act 2013 read withrule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company will be provided upon request in terms of section196 of the Act the Report is being sent to all the Shareholders of the Company and otherentitled thereto excluding the information particulars of which is available forinspection by the Members at the Registered office of the Company during business hours onworking days of the Company up to the date of the ensuing Annual General Meeting. Membersinterested in obtaining a copy thereof may write to the Company Secretary in this regard.
All the properties/assets including buildings furniture/ fixtures and insurableinterests of the Company are adequately insured.
Your Directors take this opportunity to thank the Customers Suppliers ShareholdersBankers Dealers Agents Employees and Government and Semi-Government Authorities fortheir consistent support and encouragement to the Company.
|For and on behalf of the Board of Directors |
|Anurag P. Poddar |
|Chairman & Managing Director |
|Place : Mumbai ||DIN: 00599143 |
|Date : 17th July 2020 || |