You are here » Home » Companies » Company Overview » Malu Paper Mills Ltd

Malu Paper Mills Ltd.

BSE: 532728 Sector: Industrials
NSE: MALUPAPER ISIN Code: INE383H01017
BSE 10:26 | 29 Jun 32.20 1.20
(3.87%)
OPEN

31.95

HIGH

32.45

LOW

31.60

NSE 10:14 | 29 Jun 32.00 1.00
(3.23%)
OPEN

30.75

HIGH

32.65

LOW

30.60

OPEN 31.95
PREVIOUS CLOSE 31.00
VOLUME 1569
52-Week high 43.80
52-Week low 26.10
P/E
Mkt Cap.(Rs cr) 55
Buy Price 31.75
Buy Qty 14.00
Sell Price 32.05
Sell Qty 70.00
OPEN 31.95
CLOSE 31.00
VOLUME 1569
52-Week high 43.80
52-Week low 26.10
P/E
Mkt Cap.(Rs cr) 55
Buy Price 31.75
Buy Qty 14.00
Sell Price 32.05
Sell Qty 70.00

Malu Paper Mills Ltd. (MALUPAPER) - Director Report

Company director report

The Directors have pleasure in presenting the 28th AnnualReport for the year ended 31st March 2021 along with the Audited Statement ofAccounts with the Report of the Auditors thereon:

FINANCIAL RESULTS

( Rs.In Lakhs)
Particulars FY FY
2020-2021 2019-2020
Sales 16973.77 22632.17
Other Incomes 94.59 109.44
Total Revenue 17068.36 22741.60
Expenses 16400.32 21351.93
Profit before Interest Tax Depreciation & 668.04 1389.67
Amortization finance cost and exceptional items
Less: Financial Costs 778.12 792.31
Less: Depreciation & amortization expense 501.42 489.71
Profit / (Loss) before taxation (611.50) 107.66
Less: Provision For Taxation (34.43) 41.65
Profit/(Loss) After Tax (577.07) 66.01
Other Comprehensive Income (net) 9.91 0
Total Comprehensive income for the year (586.98) 66.01

KEY HIGHLIGHTS OF THE FINANCIAL PERFORMANCE:

During the year 2020-21 the Company recorded a turnover of Rs.1697376757 and net loss of Rs. 58698182 compared to the turnover of Rs.2263216621 and net profit of Rs. 6600906 previous year 2019-20. Covid-19pandemic which started globally during the end of 2019 has affected people globallycausing health crisis impacting businesses and economy at large. The effect of thispandemic is still continuing. The reduction in turnover is mainly attributed tooperational disruptions caused due to Covid19 pandemic. Despite the hardships theManagement put its best efforts and with the support of the all the employees achievedthis turnover.

STATE OF AFFAIRS

The company is in the business of Manufacturing Newsprint Writing& Printing paper and Kraft Paper. The overall profitability of the Company during theyear under review as compared to the previous year has been adversely affected due tothe unfavorable economic and market conditions prevailing throughout the year in all thebusiness segments on account of disruptions caused by the COVID 19 pandemic and thelockdown pursuant to Govt.'s directives to prevent spread of pandemic.

The current year witnessed lot of change in the international papermarket and these changes impacted the operations of the Indian paper industry. In the FY2020-21 the company produced 60243 Mt of paper as against 85213Mt produced in FY2019-20. In FY 2019-20 the company produced 41505 Mt (49%) of Kraft paper and 43708 Mt(51%) of Newsprint & Writing printing paper. In FY 2020-21 the company produced51214 Mt (85%) of Kraft paper and 9029 Mt (15%) of Newsprint & Writing printingpaper. There was a change in the product mix in FY 2019-20 to take advantage of the marketscenario.

Malu Paper Mills Ltd has paper mills strategically located in CentralIndia at Nagpur (Maharashtra). The company is the largest Newsprint manufacturer ofCentral India with 49500 TPA capacity and produces quality Newsprint with recycleprocess. The company has swing facility wherein it can change to Newsprint and Writingpaper production at short notice. The company is also in the manufacture of the packagingpaper of recycle grade with an annual capacity 50000 TPA. The positive turn of events inthe Indian paper industry in the current year due to changes in the International andDomestic market Environment and Industrial policy of the government has resulted infavourable changes which will continue to impact the prospects of the company in years tofollow.

CHANGE IN THE NATURE OF BUSINESS IF ANY

There has been no major change in the business of the company duringthe financial year ended 31st March 2021.

NUMBER OF BOARD MEETINGS HELD

The Board of Directors met Five (05) times during the year and thedetails thereof were mentioned in the Report of Corporate Governance forming part of thisAnnual Report.

AUDITOR'S REPORT AND SECRETARIAL AUDIT REPORT

The statutory auditor's report and the secretarial audit report donot contain any qualifications reservations or adverse remarks or disclaimer.Secretarial audit report is attached to this report.

DETAILS OF FRAUD REPORT BY AUDITOR:

As per auditors' report no fraud u/s 143(12) reported by theauditor.

AUDITORS

M/s. R. A Kuvadia & Co. Chartered Accountants Mumbai theAuditors of the company will retire at ensuing Annual General Meeting and being eligibleoffer themselves for re-appointment. In terms of provisions of section 139 of theCompanies Act 2013 M/s. R. A Kuvadia & Co. Chartered Accountants have furnished acertificate that their appointment if made will be within the limits prescribed underthe said section of the Act. As required under Regulation 33 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 they have also confirmed thatthey hold a valid certificate issued by the Peer Review Board of the Institute ofChartered Accountants of India.

PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEE GIVEN ORSECURITY PROVIDED

The loans given investments made or guarantee given or securityprovided by the Company 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 thefinancial year ended 31st March 2021 were on an arm's length basis andwere in the ordinary course of business. The details of the transactions were tabledbefore the Audit Committee. Therefore the provisions of Section 188 of the Companies Act2013 were not attracted. Further there are no materially significant related partytransactions during the year under review made by the Company with Promoters Directorsor other designated persons which may have a potential conflict with the interest of theCompany at large. Thus disclosure in Form AOC-2 is not required.

However the disclosure of transactions with related party for theyear as per Accounting Standard-18 Related Party Disclosures is given in Note no 27 tothe Balance Sheet as on 31st March 2021.

TRANSFER TO RESERVES

The Company transferred a sum of Rs (58698182)/- to Retained EarningReserve during the financial year ended 31st March 2021.

CHANGE IN SHARE CAPITAL

The Paid up Share Capital as on 31st March 2021 is INR 170592500comprising 17059250 Equity Shares of Rs.10/-each. There has been no change in thecapital structure of the Company during the year.

DIVIDEND

The Board of Directors of your company after considering holisticallythe relevant circumstances has decided that it would be prudent not to recommend anyDividend for the year under review.

DISCLOSURE ON ACCOUNTING TREATMENT

The Company has not used any differential treatment which is not incompliance with accounting standards and the financials of the Company depict a true andfair view of the state of affairs of the Company.

MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments which affect thefinancial position of the company which have occurred between the end of the financialyear to which the financial statements relate and the date of this Report.

CORPORATE SOCIAL RESPONSIBILITY

As per the provisions of the Companies Act 2013 a company meeting thespecified criteria shall spend at least 2% of its average net profits for threeimmediately preceding financial years towards CSR activities. Due to inadequate profitsyour Company has not spent towards CSR activities during the financial year 2020-21. Thecontents of the CSR policy and CSR Report for the year 2020-21 are attached as AnnexureD to this report. Contents of the CSR policy are also available on the Company'swebsite and can be accessed 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 AssociateCompany.

DETAILS OF DIRECTOR / KEY MANAGERIAL PERSONNEL APPOINTED/ RETIREDDURING THE YEAR

The Board on recommendation of Nomination and Remuneration Committeein its meeting held on November 09 2020 appointed Mr. Purshottam Ramlal Malu (DIN01720007) and Mr. Sahil Shankar Agrawal (DIN 02690403) as an additional directorsdesignated as Non-Independent Non-Executive Director and Independent Directorrespectively who shall hold office upto the ensuing Annual General Meeting. Theirappointments shall be further regularised on such terms and conditions proposed to be putbefore the members in the forthcoming Annual General Meeting for their approval.

Mr. Vasudeo Malu (DIN 00301313) the Non Executive Director retires byrotation at the ensuing Annual General Meeting and being eligible offers himself forre-appointment.

Mr. Chandrakant Thakar(00784189) Mr. Satyanarayan Rathi (01797378) andFCA. Shrutika Inani (06937649) were re-appointed as an independent directors for a secondterm of five years at the Twenty sixth Annual General Meeting (AGM) held on September 272019 continued to remain on the board of the company.

During the year Mr. Shyamsunder Sarda (02399265) resigned as anIndependent director of the Company with effect from October 28 2020. The Board placed onrecord its sincere appreciation of the services rendered by him during his tenure with theCompany.

During the year Mr. Prakash Modi has been appointed as Chief FinancialOfficer of the Company w.e.f. July 31 2020.

Pursuant to the provisions of Section 203 of the Act the KeyManagerial Personnel of the Company as on March 31 2021 are: Mr. Punamchand Malu -Managing Director Mr. Banwarilal Malu - Jt. Managing Director Mr. Prakash Modi- ChiefFinancial Officer and Mayuri Asawa - Company Secretary.

A resolution seeking shareholders' approval for the appointment ofadditional Directors forms a part of the Notice.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received necessary declarations from all theIndependent Directors under Section 149 (7) of the Companies Act 2013 and SEBI ListingRegulations 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 2013 and thecorporate governance requirements as prescribed by the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 (‘SEBIListing Regulations'); the Board of Directors have carried out an annual evaluationof its own performance as a whole the directors individually as well as the evaluation ofthe working of its Committees.

The performance of the board was evaluated by the Board after seekinginputs from all the directors on the basis of criteria such as the board composition andstructure effectiveness of board processes information and functioning etc. Performanceevaluation of independent directors was done by the entire Board excluding theindependent director being evaluated.

The performance of the committees was evaluated by the Board afterseeking inputs from the committee members on the basis of criteria such as the compositionof committees effectiveness of committee meetings etc.

In a separate meeting of independent directors performance ofnon-independent directors the Board as a whole was evaluated taking into account theviews of executive directors and nonexecutive directors.

The Board and the Nomination and Remuneration Committee reviewed theperformance of individual directors on the basis of criteria such as the contribution ofthe individual director to the board and committee meetings like preparedness on theissues to be discussed meaningful and constructive contribution and inputs in meetingsetc.

The Board of Directors expressed their satisfaction with the evaluationprocess.

PUBLIC DEPOSITS

The Company has not accepted any deposits under Chapter V of CompaniesAct 2013 from public during the year under review.

INTERNAL FINANCIAL CONTROL

The Company has put in place adequate internal financial controlprocedures commensurate with its size complexity and nature of business. The Company hasidentified and documented all key financial controls which impact the financialstatements as part of its Standard Operating Procedures (SOP). The financial controls aretested for operating effectiveness through ongoing monitoring and review process by themanagement and also independently by the Internal Auditor. The Internal Auditor of theCompany reports functionally to the Audit Committee of Board which reviews and approvesrisk based annual internal audit plan. The Audit Committee periodically reviews theperformance of internal audit function.

During the year such controls were tested and no reportable materialweakness in the design or operation was observed.

COST RECORDS & COST AUDIT

The provision of Cost audit as per section 148 applicable on theCompany and company has maintained proper records and account of the same as requiredunder the act.

Pursuant to the provisions of the Companies Act 2013 the Board ofDirectors had appointed M/s. Khanuja Patra & Associates Cost Accountants as CostAuditors of the Company for conducting the audit of Cost records for the financial yearended on 31st March 2021. The audit report will be filed within prescribedperiod.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORSCOURTS AND TRIBUNALS

No significant and material order has been passed by the regulatorscourts tribunals impacting the going concern status and Company's operations infuture.

CONSTITUTION OF COMMITTEE - SEXUAL HARASSMENT AT WORKPLACE

The Company has constituted committee under the sexual harassment ofwomen at workplace (prevention prohibition and Redressal) Act 2013 and company hascomplied with the provisions of the same.

During the year no complaint of sexual harassment was received to thecompany.

CONSOLIDATED FINANCIAL STATEMENTS

Company doesn't have any subsidiaries so there is no need toprepare consolidated financial statement for the F. Y. 2020-21.

COMPLIANCE WITH SECRETARIAL STANDARD

The Directors have devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards issued by The Institute of CompanySecretaries of India 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 theDirector's confirm that: `

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 2021 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.

LISTING OF SHARES

Equity Shares of Company are listed on The Bombay Stock ExchangeMumbai (BSE) and The National Stock Exchange (NSE). The Company has duly paid listing feesto stock exchanges.

DIRECTORS' APPOINTMENT AND REMUNERATION POLICY:

The Company's policy on directors' appointment andremuneration and other matters provided in Section 178(3) of the Act has been disclosed inthe Corporate Governance Report which is a part of this report and detailed policy isavailable on https://www.malupaper.com .

RISK MANAGEMENT POLICY

There is a continuous process for identifying evaluating and managingsignificant risks faced through a risk management process designed to identify the keyrisks faced by the Company to ensure that risk is controlled by the management through themeans of a properly laid-out framework.

AUDIT COMMITTEE

As per the provisions of the Listing Agreement and pursuant to Section177 of the Companies Act 2013 the Audit committee constituted to review compliances withinternal control systems and other various functions of the Company. FCA Shrutika InaniIndependent Director was the Chairman of the Audit Committee.

CORPORATE GOVERNANCE

In terms of the Listing Regulations a report on Corporate Governancealong with Auditors' Report on its compliance is annexed forming part of the AnnualReport.

Further all the Board members and Senior Management personnel haveaffirmed compliance with the Code of Conduct for the financial year 2020-21. A declarationto this effect signed by the Managing Director & CEO of the Company also forms part ofthis Annual Report.

Additionally CEO/CFO Certification as required by SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of this AnnualReport.

A Certificate from Practicing Chartered accountant regarding thecompliance with the conditions of Corporate Governance as stipulated under Regulation 34read with Schedule V of the SEBI Listing Regulations is annexed to this Report.

In line with the requirements of Companies Act 2013 your Company hasconstituted the Board Committees and has in place all the statutory Committees requiredunder the law. Details of Board Committees along with their terms of referencecomposition and meetings of the Board and Board Committees held during the year areprovided in the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report in accordance withRegulation 34 read with Schedule V of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations") forms part of this Annual Report as Annexure A.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

As per the provisions of Section 177(9) of the Companies Act 2013 aVigil Mechanism for Directors and employees to report genuine concerns has beenestablished. The practice of the Whistleblower Policy is overseen by the Audit Committeeand no employee has been denied access to the Committee. The same has been uploaded oncompany's website at www.malupaper.com

SECRETARIAL AUDIT

CS. Yugandhara Kothalkar Company Secretary has been appointed toconduct the Secretarial Audit of the Company as required under the provisions of Section204 of the Companies Act 2013 and Rule 9 of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 and Regulation 24A of the SEBI (LODR) Regulations2015 and also to provide the Secretarial Compliance Report for the financial year 2019-20.Copy of the Secretarial Audit Report in Form MR-3 is given as an Annexure B to thisDirector's Report.

Web Address of the Annual Return

Pursuant to the provisions of Section 92(3) read with Section 134(3)(a) of the Companies Act 2013 a copy of the Annual Return of the Company is available atthe Company's website http://www.malupaper.com/investors/

DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSEACCOUNT

(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 technologyabsorption foreign exchange earnings and outgo as required under the Companies Act2013 read with the Companies (Accounts) Rules 2014 is given as per 'Annexure C' and formspart of the Directors' Report.

As regards disclosure of particulars relating to conservation ofenergy great emphasis has been given for reduction of energy consumption to reduce costper unit of goods. Details are attached herewith as per ‘Annexure C'.

The Company imports some portion of its raw material requirement. Theforeign exchange earnings and outgo are as mentioned in the reports of the auditor of theCompany. Details are attached herewith as per ‘Annexure C'.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIALPERSONNEL AND PARTICULARS OF EMPLOYEES:

None of the employee including Key Managerial Personnel was drawingin excess of the limits prescribed by Section 197(12) read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Companies(Particulars of Employees Rules 1975 which needs to be disclosed in the director'sreport.

The ratio of the remuneration of each director to the medianremuneration of the employees of the Company and percentage increase in remuneration ofeach Director Chief Financial 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 Mr. Punamchand Malu 2000000 171098 11.68
2 Mr.Banwarilal Malu 2000000 171098 11.68
Non Executive Directors/Independent Directors
3 Mr.Damodarlal Malu NIL - -
4 Mr.Vasudeo Malu NIL - -
5 Mr.Chandrakant Thakar NIL - -
6 FCA. Shrutika Inani NIL - -
7 Mr. Satyanarayan Rathi NIL - -
8 Mr.Shyamsunder Sarda NIL - -
Key Managerial Person
9 Mr. Prakash Modi CFO 868800 N.A N.A
10 CS Mayuri Asawa 216000 N.A N.A

a) There is no increase in the remuneration of Executive directors Chief FinancialOfficer and Company Secretary in the financial year.

b) The percentage decrease in the median remuneration of employees in the financialyear: 32%

c) The number of permanent employees on the rolls of Company: 201

Affirmation that the remuneration is as per the remuneration policy ofthe Company:

The Company affirms that the remuneration is as per the remunerationpolicy of the Company.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their gratitude to BankersCustomers Business Associates for the co-operation and support and to the Shareholdersdealers and suppliers staff and workers for their contribution to the company'sgrowth.

.