The Directors have pleasure in presenting the 27th Annual Report for theyear ended 31st March 2020 along with the Audited Statement of Accounts with the Report ofthe Auditors thereon:
| || |
(Rs. In Lakhs)
| ||FY ||FY |
| ||2019-2020 ||2018-2019 |
|Sales & Other Incomes ||22741.60 ||27553.63 |
|Profit Before Interest & Depreciation ||1389.67 ||2457.00 |
|Less: Financial Charges ||792.31 ||971.33 |
|Profit Before Depreciation ||597.37 ||1485.67 |
|Less: Depreciation ||489.71 ||477.78 |
|Less: Provision For Tax ||41.65 ||265.82 |
|Profit/(Loss) After Tax ||66.01 ||742.43 |
REVIEW OF OPERATIONS
Your company has posted another year of profitable results considering the challengesfaced by it in the current financial year. For the year under review the Company recordedtotal income of Rs. 22741.60 Lakhs and booked profit before tax of Rs. 107.66 Lakhs.
STATE OF AFFAIRS
The company is in the business of Manufacturing Newsprint Writing & Printing paperand Kraft Paper. The current year witnessed lot of change in the international papermarket and these changes impacted the operations of the Indian paper industry. In the FY2019-20 the company produced 85213 Mt of paper as against 85015 Mt produced in FY2018-19. In FY 2018-19 the company produced 39161 Mt (46%) of Kraft paper and 45854 Mt(54%) of Newsprint & Writing printing paper. In FY 2019-20 the company produced41505 Mt (49%) of Kraft paper and 43708 Mt (51%) of Newsprint & Writing printingpaper.
There was a change in the product mix in FY 2019-20 to take advantage of the marketscenario. The turnover was Rs.22741.60 Lakhs in FY 2019-20 in comparison to turnover ofRs. 27553.63 Lakhs in FY 2018-19. However the Profit after Tax (PAT) of the current FYwas Rs. 66.01 Lakhs in comparison to the Rs. 742.07 lakhs in FY 2018-19. The PAT wasreduced by 91%.
Malu Paper Mills Ltd has paper mills strategically located in Central India at Nagpur(Maharashtra). The company is the largest Newsprint manufacturer of Central India with49500 TPA capacity and produces quality Newsprint with recycle process. The company hasswing facility wherein it can change to Newsprint and Writing paper production at shortnotice. The company is also in the manufacture of the packaging paper of recycle gradewith an annual capacity 50000 TPA. The positive turn of events in the Indian paperindustry in the current year due to changes in the International and Domestic marketEnvironment and Industrial policy of the government has resulted in favourable changeswhich will continue to impact the prospects of the company in years to follow.
There has been no major change in the business of the company during the financial yearended 31st March 2020.
NUMBER OF BOARD MEETINGS HELD
The Board of Directors met Five (05) times during the year and the details thereof werementioned in the Report of Corporate Governance forming part of this Annual Report.
AUDITOR'S REPORT AND SECRETARIAL AUDIT REPORT
The statutory auditor's report and the secretarial audit report do not contain anyqualifications reservations or adverse remarks or disclaimer. Secretarial audit reportis attached to this report.
DETAILS OF FRAUD REPORT BY AUDITOR:
As per auditors' report no fraud u/s 143(12) reported by the auditor.
M/s. R.A. Kuvadia & Co. Chartered Accountants Mumbai the Auditors of thecompany will retire at ensuing Annual General Meeting and being eligible offerthemselves for re-appointment. In terms of provisions of section 139 of the Companies Act2013 M/s. R. A Kuvadia & Co. Chartered Accountants have furnished a certificate thattheir appointment if made will be within the limits prescribed under the said section ofthe Act. As required under Regulation 33 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 they have also confirmed that they hold a validcertificate issued by the Peer Review Board of the Institute of Chartered Accountants ofIndia.
PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEE GIVEN OR SECURITY PROVIDED
The loans given investments made or guarantee given or security provided by theCompany are same as mentioned in notes to the Financial Statements.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All related party transactions that were entered into during the financial year ended31 st March 2020 were on an arm's length basis and were in the ordinary courseof business. The details of the transactions were tabled before the Audit Committee.Therefore the provisions of Section 188 of the Companies Act 2013 were not attracted.Further there are no materially significant related party transactions during the yearunder review made by the Company with Promoters Directors or other designated personswhich may have a potential conflict with the interest of the Company at large. Thusdisclosure in Form AOC-2 is not required.
However the disclosure of transactions with related party for the year as perAccounting Standard-18 Related Party Disclosures is given in Note no 27 to the BalanceSheet as on 31st March 2020.
TRANSFER TO RESERVES
The Company transferred a sum of Rs 6600906/- to Retained Earning Reserve during thefinancial year ended 31st March 2020.
The Board of Directors of your company after considering holistically the relevantcircumstances has decided that it would be prudent not to recommend any Dividend for theyear under review.
MATERIAL CHANGES AND COMMITMENTS
There have been no material changes and commitments which affect the financialposition of the company which have occurred between the end of the financial year to whichthe financial statements relate and the date of this Report.
CORPORATE SOCIAL RESPONSIBILITY
As per the provisions of the Companies Act 2013 a company meeting the specifiedcriteria shall spend at least 2% of its average net profits for three immediatelypreceding financial years towards CSR activities. Accordingly your Company spent Rs.551000/-towards CSR activities during the financial year 2019-20. The contents of theCSR policy and CSR Report for the year 2019-20 is attached as Annexure D to thisreport. Contents of the CSR policy are also available on the Company's website and can beaccessed through the web linkhttp: / / malupaper.com/pdf/CSR%20POLICY.pdf
DETAILS OF SUBSIDIARY JOINT VENTURE OR ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint Venture or Associate Company.
DETAILS OF DIRECTOR / KEY MANAGERIAL PERSONNEL APPOINTED/ RETIRED DURING THE YEAR
The Board on recommendation of Nomination and Remuneration Committee reappointed ShriPunamchand Malu (DIN 00301030) as Managing Director and Shri Banwarilal Malu (DIN00301297) as Joint Managing Director of the Company subject to approval of shareholdersat the ensuing annual general meeting.
Shri Vasudeo Malu (DIN 00301313) the Non Executive Director continues to remain on theBoard of the Company and Shri Damodarlal Malu (DIN 00301120) the Non Executive Directorwho is liable to retire by rotation retires at the ensuing annual general meeting andbeing eligible offers himself for re-appointment.
Shri. Chandrakant Thakar Shri. Shyamsunder Sarda Shri. Satyanarayan Rathi and FCA.Shrutika Inani were re-appointed as an independent directors for a second term of fiveyears at the Twenty sixth Annual General Meeting (AGM) held on September 27 2019continued to remain on the board of the company.
During the year Shri. Girish Malpani resigned as Chief Financial Officer of theCompany with effect from February 4 2020. The Board placed on record its sincereappreciation of the services rendered by him during his tenure with the Company.
Shri. Prakash Modi has been appointed as Chief Financial Officer of the Company w.e.f.July 31 2020.
Pursuant to the provisions of Section 203 of the Act the Key Managerial Personnel ofthe Company as on March 31 2020 are: Shri. Punamchand Malu - Managing Director Shri.Banwarilal Malu - Jt. Managing Director and Mayuri Asawa - Company Secretary.
A resolution seeking shareholders' approval for the re-appointment of ManagingDirectors forms a part of the Notice.
DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declarations from all the Independent Directorsunder Section 149 (7) of the Companies Act 2013 and SEBI Listing Regulations that :
a) They meet the criteria of independence laid down in Section 149 (6) of the CompaniesAct 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
b) They are not aware of any circumstance or situation which exist or may bereasonably anticipated that could impair or impact their ability to discharge theirduties with an objective independent judgment and without any external influence pursuantto Regulation 25 of the Listing Regulations.
c) they have complied with the requirement of inclusion of their name in the data bankmaintained by Indian Institute of Corporate Affairs as envisaged under Companies(Appointment and Qualification of Directors) Fifth Amendment Rules 2019 as applicableand they hold valid registration certificate with Data Bank of Independent Directors.
EVALUATION OF INDIVIDUAL DIRECTORS THE BOARD & ITS COMMITTEES:
Pursuant to the provisions of the Companies Act 2013and SEBI Listing regulations aformal evaluation of the performance of the Board its Committees the Chairman and theindividual Directors was carried out for the financial year 2019-20. The performanceevaluation was done using individual questionnaires covering amongst others compositionof Board receipt of regular inputs and information functioning performance andstructure of Board Committees skill set knowledge and expertise of directorspreparation and contribution at Board meetings leadership etc. The performanceevaluation of the respective Committees and that of independent and non-independentdirectors was done by the Board excluding the Director being evaluated.
The performance evaluation of Non-Independent Directors the Chairman and the Board wasdone by the Independent Directors.
The Company has not accepted any deposits under Chapter V of Companies Act 2013 frompublic during the year under review.
INTERNAL FINANCIAL CONTROL
The Company has put in place adequate internal financial control procedurescommensurate with its size complexity and nature of business. The Company has identifiedand documented all key financial controls which impact the financial statements as partof its Standard Operating Procedures (SOP). The financial controls are tested foroperating effectiveness through ongoing monitoring and review process by the managementand also independently by the Internal Auditor. The Internal Auditor of the Companyreports functionally to the Audit Committee of Board which reviews and approves riskbased annual internal audit plan. The Audit Committee periodically reviews the performanceof internal audit function.
During the year such controls were tested and no reportable material weakness in thedesign or operation was observed.
The provision of Cost audit as per section 148 applicable on the Company and companyhas maintained proper records and account of the same as required under the act.
Pursuant to the provisions of the Companies Act 2013 the Board of Directors hadappointed M/s. Khanuja Patra & Associates Cost Accountants as Cost Auditors of theCompany for conducting the audit of Cost records for the financial year ended on 31stMarch 2020. The audit is in process and report will be filed within prescribed period.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS COURTS ANDTRIBUNALS
No significant and material order has been passed by the regulators courts tribunalsimpacting the going concern status and Company's operations in future.
CONSTITUTION OF COMMITTEE-SEXUAL HARASSMENT AT WORKPLACE
The Company has constituted committee under the sexual harassment of women at workplace(prevention prohibition and Redressal) Act 2013 and company has complied with theprovisions of the same.
During the year no complaint of sexual harassment were received to the company.
CONSOLIDATED FINANCIAL STATEMENTS
Company doesn't have any subsidiaries so there is no need to prepare consolidatedfinancial statement for the F. Y. 2019-20.
COMPLIANCE WITH SECRETARIAL STANDARD
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards issued by The Institute of Company Secretaries ofIndia and that such systems are adequate and operating effectively
DIRECTORS RESPONSBILITY STATEMENT FORMING PART OF DIRECTORS REPORT
As required under Section 134(5) of the Companies Act 2013 the Director's confirmthat:
1 In the preparation of the annual accounts the applicable accounting standards havebeen followed.
2 The Directors had selected such accounting policies and applied them consistently andmade judgments and estimate that are reasonable and prudent so as to give a true and fairview of the state of affairs of Company as on 31st March 2020 and of the profitof the company for that period.
3 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.
4 The annual accounts have been prepared on a going concern basis.
5 The directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
6 The Directors have devised proper systems to ensure compliance with the provisions ofall applicable laws and these were adequate and operating effectively.
In the last month of FY 2020 COVID-19 declared by the World Health Organization aglobal pandemic developed rapidly into a global crisis forcing governments to enforcelock-downs of all economic activity. The Ministry of Home Affairs vide order no.40-3/2020-DM-I(A) dated March 24 2020 announced a nation-wide lockdown as a measure tocontain the spread of Covid-19. For the Company the focus immediately shifted to ensuringthe health and wellbeing of all employees and on minimizing disruption to the operationsof the Company. The Company immediately adopted a 'Work from Home' model for all itsoffice-based employees. Owing to the lockdown the manufacturing operation and supplychain was impacted in the second half of March 2020.
The Company is closely monitoring the impact of the pandemic on all aspects of itsbusiness and is taking appropriate measures and ensuring full compliance with thedirectives issued by the Government in this regard.
LISTING OF SHARES
Equity Shares of Company are listed on The Bombay Stock Exchange Mumbai (BSE) and TheNational Stock Exchange (NSE). The Company has duly paid listing fees to stock exchanges.
DIRECTORS' APPOINTMENT AND REMUNERATION POLICY:
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which is a part of this report and detailed policy is available onhttps://www.malupaper.com .
The assets of the Company are adequately insured against the loss of fire riotearthquake terrorism etc. and other risks which considered necessary by the management.The management has taken adequate steps to protect its assets and safeguard the interestof the company.
As per the provisions of the Listing Agreement and pursuant to Section 177 of theCompanies Act 2013 the Audit committee constituted to review compliances with internalcontrol systems and other various functions of the Company. FCA Shrutika InaniIndependent Director was the Chairman of the Audit Committee.
In terms of the Listing Regulations a report on Corporate Governance along withAuditors' Report on its compliance is annexed forming part of the Annual Report.Additionally this contains compliance report signed by the CEO of the Company inconnection with compliance with the Code of Conduct and also CEO/CFO Certification asrequired by SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
In line with the requirements of Companies Act 2013 your Company has constituted theBoard Committees and has in place all the statutory Committees required under the law.Details of Board Committees along with their terms of reference composition and meetingsof the Board and Board Committees held during the year are provided in the CorporateGovernance Report.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
As per the provisions of Section 177(9) of the Companies Act 2013 a Vigil Mechanismfor Directors and employees to report genuine concerns has been established. The practiceof the Whistleblower Policy is overseen by the Audit Committee and no employee has beendenied access to the Committee. The same has been uploaded on company's website atwww.malupaper.com
CS. Yugandhara Kothalkar Company Secretary has been appointed to conduct theSecretarial Audit of the Company as required under the provisions of Section 204 of theCompanies Act 2013 and Rule 9 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 and Regulation 24A of the SEBI (LODR) Regulations 2015and also to provide the Secretarial Compliance Report for the financial year 2019-20. Copyof the Secretarial Audit Report in Form MR-3 is given as an Annexure A to thisDirector's Report.
ABSTRACT OF THE ANNUAL RETURN
The Abstract of the Annual Return for the year 31st March 2020 beingattached with the Directors Report as Annexure B. The same is available on ourwebsite http://malupaper.com/investor-relations.aspx
DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT
(a) The outstanding shares in the suspense account held with Sharekhan Limited lying atthe beginning of the year is 3019 shares;
(b) none of shareholders approached listed entity for transfer of shares from suspenseaccount during the year;
(c) no shares were transferred from suspense account during the year;
(d) the outstanding shares in the suspense account held with Sharekhan Limited lying atthe end of the year is 3019 shares;
(e) that the voting rights on these shares shall remain frozen till the rightful ownerof such shares claims the shares.
ENERGY TECHNOLOGY AND FOREIGN EXCHANGE
The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 is given as per 'Annexure C' and forms part of theDirectors' Report.
As regards disclosure of particulars relating to conservation of energy great emphasishas been given for reduction of energy consumption to reduce cost per unit of goods.Details are attached herewith as per Annexure C'.
The Company imports some portion of its raw material requirement. The foreign exchangeearnings and outgo are as mentioned in the reports of the auditor of the Company. Detailsare attached herewith as per Annexure C'.
PARTICULARS OF EMPLOYEES
None of the employee including Key Managerial Personnel was drawing in excess of thelimits prescribed by Section 197 read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and Companies (Particulars of EmployeesRules 1975 which needs to be disclosed in the director's report.
The ratio of the remuneration of each director to the median remuneration of theemployees of the Company and percentage increase in remuneration of each Director ChiefFinancial Officer and Company Secretary in the financial year -
|S.No Name of the Director ||Remuneration Per Annum (INR) ||Median Remuneration Per Annum (INR) ||Ratio (Remuneration of Director to Median Remuneration) times |
|Executive Directors || || || |
|1 Shri. Punamchand Malu ||2400000 ||255027 ||9.41 |
|2 Shri. Banwarilal Malu ||2400000 ||255027 ||9.41 |
|Non Executive Directors/Independent Directors || || || |
|3 Shri. Damodarlal Malu ||NIL ||- ||- |
|4 Shri. Vasudeo Malu ||NIL ||- ||- |
|5 Shri. Chandrakant Thakar ||NIL ||- ||- |
|6 FCA. Shrutika Inani ||NIL ||- ||- |
|7 Shri. Satyanarayan Rathi ||NIL ||- ||- |
|8 Shri. Shyamsunder Sarda ||NIL ||- ||- |
|Chief Financial Officer || || || |
|9 Mr. Girish Malpani* ||3108330 ||N.A ||N.A |
a) There is no increase in the remuneration of Executive directors and CompanySecretary in the financial year.
b) During the Financial year 2019-20 Mr. Girish Malpani ceased to be the ChiefFinancial Officer of the Company w-e-f February 4 2020. Hence percentage increase inremuneration is not applicable.
c) The percentage increase in the median remuneration of employees in the financialyear: 1.9 6%
d) The number of permanent employees on the rolls of Company: 199
Affirmation that the remuneration is as per the remuneration policy of the Company:
The Company affirms that the remuneration is as per the remuneration policy of theCompany.
Your Directors wish to place on record their gratitude to Bankers Customers BusinessAssociates for the co-operation and support and to the Shareholders dealers andsuppliers staff and workers for their contribution to the company's growth.
|Date : 31/07/2020 || |
By Order of Board of Directors
|Place : Nagpur || || |
| ||Punamchand Malu ||Banwarilal Malu |
| ||Managing Director & CEO ||Jt. Managing Director |
| ||(DIN:00301030) ||(DIN:00301297) |