To the Members
The Directors have pleasure in presenting before you the 4th Annual Reportof the Company together with the Audited Financial Statements for the year ended 31stMarch 2018. The accounts are prepared in accordance with the Companies (Indian AccountingStandards) Rule 2015 (IND AS) prescribed under Section 133 of the Companies Act 2013.
| ||2017-2018 ||2016-17 |
| ||(Rs in Lakhs) ||(Rs in Lakhs) |
|The Earnings Before Interest Tax Depreciation and Amortization (EBITDA) ||4568.43 ||5107.13 |
|Less: || || |
|i) Finance cost ||903.87 ||1010.73 |
|ii) Depreciation/Impairment ||660.70 ||948.29 |
|The net profit before Tax ||3003.86 ||3148.11 |
|Less: || || |
|Provision for Current Tax ||573.54 ||700.00 |
|Provision/(Saving) for Deferred Taxation ||515.62 ||390.31 |
|Net Profit After Tax ||1914.70 ||2057.80 |
|Add: || || |
|Other Comprehensive Income/(Expense) (Net of Tax) ||36.63 ||(81.48) |
|The balance of Profit brought forward from last year ||3098.89 ||1436.85 |
|Total ||5050.22 ||3413.17 |
|Less: || || |
|Dividend Paid on Equity Shares ||142.43 ||94.95 |
|Tax Paid on Dividend ||28.99 ||19.33 |
|Transfer to General Reserve ||200.00 ||200.00 |
|Total ||371.42 ||314.28 |
|Balance proposed to be carried forward to next year's accounts ||4678.80 ||3098.89 |
The Board of Directors recommends the payment of Dividend for the year ended 31stMarch 2018 at the rate of Rs 0.15 per share.If approved the Equity Dividend shall bepaid subject to the provisions of Section 126 of the Companies Act 2013 to thoseShareholders whose names stand on the Register of Members on 21st July 2018.
The Dividend in respect of shares held in electronic form will be paid to all thosebeneficial owners of the shares as per the details furnished by depositories for thepurpose at the close of business hours on 9th July 2018.
The Directors report that the year under review has witnessed consolidation ofCompany's operations from merger of the earlier three operating undertakings into theCompany streamlining various activities resulting in better controls.
The successful completion of project involving (i) installation of 100 KV Substation toreplace 22 KV power supply from MSEDCL and the (ii) project for installation of aFull width Supercalendar' and Full width Sheeter' during the year at anaggregate outlay of Rs 30 crores have started contributing towards cost reduction and suchenhanced full year benefits will continue to recur.
On the whole however the year under review has seen marginal decline in EBIDTA andnet profit primarily arising from rising cost of raw materials despite Management'sefforts to optimize the product mix efforts on cost reduction and spillover effect fromearlier purchase of favourably priced pulp.
The Hygiene Products Division has shown substantial improvement in its workingcommensurate with the benefits accruing under the GST regime which makes its products morecompetitive than before. The Division has also shifted its strategy of procurement ofpaper products by having its products converted as job work from Converters instead oftheir outright purchase.
The Company's turnover on the overall shows a decline of about 7% part of which is dueto the (i) aforesaid shift in the procurement strategy by Hygiene Division as also (ii)judicious change in the product mix necessitated by high fiber cost so as to produce andmarket papers with better sales realization and margins than low priced ones which can beproduced at higher output rate per machine hour albeit with lower margins.
As informed to you earlier pursuant to the Scheme of Arrangement and Reconstruction(Demerger) as sanctioned by the Honb'le Bombay High Court the "Fixed DepositsLiability" was transferred from Pudumjee Pulp & Paper Mills Limited to theCompany.Your Company holds fixed deposits accepted from Public with effect from theeffective date of the scheme i.e. 1st February 2016.
With effect from 05th July 2017 the Company has started to acceptfresh/renewal of fixed deposits from the public shareholders and employees and as on 31stMarch 2018 stood at Rs 3463.24 Lakhs as against Rs 2531.09 Lakhs at the end of theprevious year (i.e. Fixed Deposit Liability).
During the year the Company has accepted/renewed such deposits aggregating to Rs1003.85 Lakhs and all the deposits falling due for repayment during the year werefullyrepaid on maturity except unclaimed deposits numbering 41 with amount of Rs 20.26Lakhs as at the end of the year.
There were no over dues on account of principal or interest on public deposits otherthan the unclaimed deposits as at the year end and there have been no default in repaymentof deposits or payment of interest thereon. There are no deposits which are not incompliance with the requirements of Chapter V of the Act read with Companies (Acceptanceof Deposits) Rules 2014.
i. STATUTORY AUDITORS:
M/s. J. M. Agrawal & Co. Chartered Accountants have been appointed as StatutoryAuditors of the Company at the 3rd Annual General Meeting to hold office up tothe conclusion of 8th Annual General Meeting. M/s. J. M. Agrawal & Co.have given their consent to act as the Auditors of the Company till conclusion of 8thAnnual General Meeting. The Company has received a Certificate from M/s. J. M. Agrawal& Co. to the effect that their appointment would be within the prescribed limitsunder section 141 and other applicable provisions of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 and that they are not disqualified forappointment. The Shareholders will be required to ratify the appointment of the auditorsas required by Company Law and fix their remuneration at the ensuing Annual GeneralMeeting.
There is no adverse remark or qualification in the Statutory Auditor's Report annexedelsewhere in this Annual
The Auditors have reported that there is no fraud on or by the Company noticed orreported during the year.
ii. SECRETARIAL AUDITOR:
Pursuant to provisions of Section 204 read with Section 134(3) of the Companies Act2013 the Board has appointed Mr. I. U. Thakur Company Secretary Pune to conductSecretarial Audit of the Company for the financial year 2017-18. The Secretarial AuditReport for the financial year 2017-18 is annexed hereto as Annexure-1.
There is no adverse remark or qualification in the Secretarial Audit Report.
The Company has complied with the applicable Secretarial Standards during the yearissued by the Institute of Company Secretaries of India.
DETAILS OF APPOINTMENT OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):
In terms of provisions of the Companies Act 2013 and the Article of Association of theCompany Mr. Arunkumar Mahabir Prasad Jatia Director and Non-Executive Chairman of theCompany retires by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theapplicable provisions of the Companies Act 2013 and applicable regulations of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
During the year 5 Board Meetings and 5 Audit Committee Meetings were convened and held.The details of which are given in the Corporate Governance Report and forms part of thisAnnual Report. The intervening gap between the Meetings was within permissible periodprescribed under the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
CORPORATE SOCIAL RESPONSIBILITY (CSR):
As required under the provisions of the Companies Act 2013 the Board of Directors hasconstituted the Corporate Social Responsibility Committee. The major role of thisCommittee is to formulate recommend implement and monitor the CSR policy andactivitiesto be undertaken by the Company to meet/contribute towards itscorporate socialresponsibility objectives. The Board of Directors at its meeting held on 20th May2017 has constituted its CSR Committee. Some of the activities which will be undertaken bythe Company itself or through an eligible trust are as under;
a) Setting up and/or maintaining old age homes/orphanage and supplementing nutritionand other essentials for underprivileged people
b) Environmental Protection
c) Education and
d) Development of Rural Infrastructure.
The CSR committee comprises of the following members:
|Name of the Director ||Category ||Designation |
|Mr. Nandan Damani ||Non-Executive Independent Director ||Chairman |
|Mr. V. K. Beswal ||Non-Executive Independent Director ||Member |
|Mr. B. K. Khaitan ||Non-Executive Independent Director ||Member |
|Mr. S. K. Bansal ||Non-Executive Non Independent Director ||Member |
The CSR Policy is also uploaded on the website of the Company viz: www.pudumjee.com.
During the year the Company has disbursed total Rs 25 Lakhs to M/s. Jatia Foundationto be spent on the activites of Setting up and/or maintaining old age homes/orphanage andsupplementing nutrition and other essentials for under privileged people EnvironmentalProtection Education and Development of Rural Infrastructure.
The other relevant disclosures as stipulated under the Companies (Corporate SocialResponsibility Policy) Rules 2014 are given in Annexure-2.
The entire amount was deposited / transferred with M/s. Jatia Foundation.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
Particulars of loans given investments made guarantees given and securities providedalong with the purpose are provided in Annexure-3 to this Report.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
A policy on Related Party Transactions has been adopted by the Board of Directors atits meeting held on 14th November 2015 for determining the materiality oftransactions with related parties and dealings with them. The said policy is available atthe Company's website at www.pudumjee.com.The Audit Committee reviews all related partytransactions quarterly and also as and when felt necessary.
Pursuant to Sections 134(3) 188(1) of the Companies Act 2013 read with Rule 8(2) ofthe Companies (Accounts) Rules 2014 the particulars of contracts/arrangements enteredinto by the company with related parties referred to in sub-section (1) of section 188 ofthe Companies Act 2013 in Form AOC -2 are provided under Annexure-4.
ANNUAL EVALUATION OF BOARD'S PERFORMANCE:
As required under Companies Act 2013 a meeting of the Independent Directors was heldon 10th February 2018 to evaluate the performance of the Non-IndependentDirectors wherein the evaluation of performance of the Non-Independent Directorsincluding the Chairman and also of the Board as a whole was made against pre-defined andidentified criteria.
The criteria for evaluation of the performance of the Independent Directors Chairmanand the Board was finalized by the Nomination and Remuneration Committee in its meetingheld on 22nd January 2016 the said committee has carried out evaluation ofthe performance of every Director. The said criteria is available at the Company's websiteat www.pudumjee.com. The Board of Directors at their meeting held on 10thFebruary 2018 has evaluated the performance of Independent Directors.
While evaluating the principles and guidelines issued vide circular no.SEBI/HO/CFD/CMD/CIR/P/2017/004 of Securities Exchange Board of India dated 5thJanuary 2017 on Board Evaluation have been taken into account.
The details of programmes for familiarisation of Independent Directors with the Companyis available at the Company's website at www.pudumjee.com.
RISK MANAGEMENT POLICY:
In accordance with the requirements of the Act the Company has adopted and implementeda Risk Management Policy for identifying risks to the Company procedures to inform Boardmembers about the risk assessment & minimization procedures monitoring the riskmanagement plan etc.
VIGIL MECHANISM / WHISTLE BLOWER MECHANISM:
The Company promotes ethical behaviour in all its business activities and hasestablished a vigil mechanism for Directors and Employees to report their genuineconcerns.
Pursuant to Section 177 of the Companies Act 2013 read with Regulation 22 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasformulated a policy "Vigil Mechanism/ Whistle Blower Policy" wherein theEmployees/Directors/Stakeholders of the Company are free to report any unethical orimproper activity actual or suspected fraud or violation of the Company's Code ofConduct. This mechanism provides safeguards against victimization of Employees who reportunder the said mechanism. During the year under review the Company has not received anycomplaint under the said mechanism. The said policy is available at the Company's websiteat www.pudumjee.com.
PARTICULARS OF EMPLOYEES:
As required under Section 197(12) of the Companies Act 2013 read with Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the statement givingrequired details is given in the Annexure-5 and Annexure- 5A to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
There was no complaint reported under the Prevention of Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS ANDOUTGO:
As required under Section 134(3) (m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 the information relating to Conservation of EnergyTechnology Absorption and Foreign Exchange earnings & outgo is annexed as Annexure-6and forms part of this Report.
REPORT ON CORPORATE GOVERNANCE:
Your Company's philosophy on Corporate Governance sets the goal of achieving thehighest level of transparency with integrity in all its dealings with its stakeholdersincluding shareholders employees lenders and others. A report on Corporate Governancealong with a Certificate from the practicing Company Secretary regarding the Compliance ofConditions of Corporate Governance as stipulated under the Listing Regulations forms partof the Annual Report as Annexure-7.
EXTRACT OF ANNUAL RETURN:
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 an extract of the Annual Return as at 31st March 2018 is annexedherewith as Annexure-8 to this report.
In accordance with the provisions of Section 178 and other applicable provisions of theCompanies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has formulated remuneration policy which inter aliaincludes the criteria for determining qualifications positive attributes and independenceof Directors.The said policy may be referred to at the Company's website atwww.pudumjee.com and is annexed hereto and marked as Annexure-9.
SIGNIFICANT AND MATERIAL ORDERS:
There is no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
DIRECTORS' RESPONSIBILITY STATEMENT:
The Directors confirm that:
a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures;
b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profits of the company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors have prepared the annual accounts on a going concern basis; and
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal
financial controls are adequate and were operating effectively.
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Your Directors would like to express their sincere appreciation of the positiveco-operation received from the Bankers Customers Vendors and Investors of the Companyfor their continued support during the year.
The Directors also wish to place on record their deep sense of appreciation for thededication and contribution made by employees at all levels and look forward to theirsupport in future as well.
| ||On Behalf of the Board of Directors |
|Place: Lonavala ||A. K. Jatia |
|Date: 26th May 2018 ||Chairman. |