To the Members
The Directors have pleasure in presenting before you the 6th Annual Reportof the Company together with the Audited Financial Statements for the year ended 31stMarch 2020. The accounts are prepared in accordance with the Companies (Indian AccountingStandards) Rule 2015 (IND AS) prescribed under Section 133 of the Companies Act 2013.
FINANCIAL RESULTS :
| ||2019-2020 ||2018-19 |
| ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
|The Earnings Before Interest Tax Depreciation and Amortization (EBITDA) ||6092.07 ||4082.88 |
|Less: || || |
|i) Finance cost ||769.33 ||795.74 |
|ii) Depreciation/Impairment ||1217.61 ||725.07 |
|The net profit before Tax ||4105.13 ||2562.07 |
|Less: || || |
|Provision for Current Tax ||702.00 ||551.00 |
|Provision/(Saving) for Deferred Taxation ||681.88 ||336.83 |
|Net Profit After Tax ||2721.25 ||1674.24 |
|Add: || || |
|Other Comprehensive Income/(Expense) (Net of Tax) ||(133.82) ||37.55 |
|The balance of Profit brought forward from last year ||6018.89 ||4678.80 |
|Total ||8606.32 ||6390.59 |
|Less: || || |
|Dividend Paid on Equity Shares ||332.33 ||142.43 |
|Tax Paid on Dividend ||68.31 ||29.27 |
|Transfer to General Reserve ||200.00 ||200.00 |
|Total ||600.64 ||371.70 |
|Balance proposed to be carried forward to next year's accounts ||8005.68 ||6018.89 |
The Board of Directors at their meeting held on 24th February 2020 declaredan Interim Dividend of Rs. 0.20/- per equity Shares of the face value of Rs.1/- each aggregating to Rs. 18990000/- plus applicable taxes thereon based onthe profitability during the current year 2019-20. In view of the current situationarising out of Novel Corona Virus the Board proposed that Dividend during the year asabove be declared as a Final Dividend for the year 2019-20.
The Directors have immense pleasure in reporting that during the year the Company hasachieved record output at 68548 MTs of paper which is higher by about 8% over last year.The output would have been further higher by about 2000 MTs but for the Corona Virusinduced shutdown' since 22nd March 2020. Consequently the Company alsoachieved higher revenue at Rs. 604.48 crores as against Rs. 589.52 croreslast year. As a result the EBIDTA has also registered significant growth at Rs. 60.92crores as against Rs. 40.83 crores last year a rise of over 49% which alsoincludes gains made from higher productivity judicious fibre management cost reductionand lower pulp prices. The Profit Before Tax at Rs. 41.05 crores was also higher byabout 60% over last year.
The Coater Project was installed and commissioned during the year. This project aimedto take the Company into "functionally coatedflpaper business for foodbaking/packaging applications is gradually improving its capacity utilization.
The performance of Hygiene Products Division has during the year been steady andremained unaffected by the slowdown in the economy.
The sudden entry of Corona Virus into India has taken entire nation by surprise. Theconsequent nationwide Lockdown' has severely disrupted economic activity in theshort term and created uncertainty for the Medium Term. The production at its factory atThergaon Pune remained suspended for 51 days during the first half of calendar year2020 whereafter the production resumed in accordance with the conditions stipulated bythe Government of Maharashtra while granting permission to it since 12th May2020. The production whilst waiting for the demand to pickup is gradually increasingafter the resumption and currently runs at about 50% capacity utilization. The HygieneProducts Division which mainly focusses on institutional business is also witnessingsimilar trend which is currently operating at about 30% of normal level and is expected togradually move upwards as demand picks up as more and more institutions reopen theirestablishments.
In view of prevailing uncertainty about growth in economy the plans for relocation ofPune facility to Mahad and expansion thereat continues to be in abeyance. Consequently theLeave and Licence Agreement in terms of which the Company's facility is located at Punefor the land and buildings owned by AMJ Land Holdings Ltd. (Formerly known as PudumjeePulp & Paper Mills Ltd.) proposed to be renewed for a further period of 5 years witheffect from 1st February 2021 on the terms and conditions which may bemutually acceptable to the said owner of the land and buildings. Accordingly a resolutionis proposed at the ensuing Annual General Meeting which the Directors commend for yourapproval.
FIXED DEPOSITS :
As informed to you earlier pursuant to the Scheme of Arrangement and Reconstruction(Demerger) as sanctioned by the Hon'ble Bombay High Court the "Fixed DepositsLiabilityflwas transferred from Pudumjee Pulp & Paper Mills Limited to the Company.Your Company holds fixed deposits accepted from Public with effect from the effective dateof 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 and as on 31st March 2020stood at Rs. 2818.55 Lakhs as against Rs. 2863.27 Lakhs at the end of theprevious year (i.e. Fixed Deposit Liability).
During the year the Company has accepted/renewed such deposits aggregating to Rs. 6.75Lakhs and all the deposits falling due for repayment during the year were fully repaid onmaturity except unclaimed deposits numbering 34 with an amount of Rs. 16.60 Lakhsas 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 there on. 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 auditorsand fix their remuneration at the ensuing Annual General Meeting.
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 2019-20. The Secretarial AuditReport for the financial year 2019-20 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.
iii. COST AUDITOR:
Pursuant to provisions of Section 148 of the Companies Act 2013 the Board hasappointed Mr. Narhar K. Nimkar (Membership No. F-6493) Cost Accountants in Practice Puneto conduct the audit of the Cost Records of the Company relating to "PAPERflfor theFinancial Year 2019-20. As required under the Companies Act 2013 a resolution seekingShareholders approval for the remuneration payable to the Cost Auditors forms part ofNotice convening the 6th Annual General Meeting of the Company.
DETAILS OF APPOINTMENT OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):
During the year under review the Shareholders of the Company at their 5thAnnual General Meeting held on 27th July 2019 was appointed Mr. Ved P. Leekhaas a Non-Executive Non-Independent Director of the Company w.e.f. 27th July2019.
In terms of provisions of the Companies Act 2013 Mr. Surendra Kumar BansalNon-Executive Non-Independent Director of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible offers 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 and also confirmingthat they are not debarred from holding the office of Director by virtue of any SEBI orderor any other such authority.
During the year 5 Board Meetings and 4 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 and activitiesto be undertaken by the Company to meet/contribute towards its corporate socialresponsibility objectives. The Board of Directors at its meeting held on 20thMay 2017 has constituted its CSR Committee. Some of the activities which will beundertaken by the 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:
|Sr. No. ||Name of the Director ||Category ||Designation |
|1. ||Mr. Nandan Damani ||Non-Executive Independent Director ||Chairman |
|2. ||Mr. Vinod Kumar Beswal ||Non-Executive Independent Director ||Member |
|3. ||Mr. Basant Kumar Khaitan ||Non-Executive Independent Director ||Member |
|4. ||Mr. Surendra Kumar Bansal ||Non-Executive Non-Independent Director ||Member |
|5. ||Mr. Ved P. Leekha (w.e.f. 31.01.2020) ||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 allocated and disbursed total Rs. 60 Lakhs toM/s. M. P. Jatia Charitable Trust to be spent on below mentioned the purposes:
Setting up and/or maintaining old age homes/orphanage and supplementingnutrition and other essentials for underprivileged people ;
Development of Rural Infrastructure
Also the Company has donated Rs. 10 Lakhs to PM CARES FUND to support for NovelCorona Virus relief efforts.
The other relevant disclosures as stipulated under the Companies (Corporate SocialResponsibility Policy) Rules 2014 are given in Annexure-2.
The entire allocated amount was deposited / transferred during the year with M/s. M. P.Jatia Charitable Trust.
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 as Annexure-4.
ANNUAL EVALUATION OF PERFORMANCE OF BOARD DIRECTOR(S) AND COMMITTEE(S):
As required under Companies Act 2013 a meeting of the Independent Directors was heldon 31st January 2020 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 31st January2020 has evaluated the performance of Independent Directors. The performance of theCommittee was also generally discussed and evaluated.
While evaluating the principles and guidelines issued vide circular no.SEBI/HO/CFD/CMD/CIR/P/2017/004 of Securities and 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 behavior 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 5A to this report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013:
An Internal Complaints Committee (Sexual Harassment Committee') has beenconstituted under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 to deal with the complaints if any from the Company and otherCompanies in the Pudumjee Group.
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 the Companies(Accounts) Rules 2014 the information relating to Conservation of Energy TechnologyAbsorption and Foreign Exchange earnings & outgo is annexed as Annexure-6 and formspart 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 2020 is annexedherewith as Annexure-8 to this report.
The extracts of the Annual Return of the Company can also be accessed on the Company'swebsite at www.pudumjee.com.
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 i.e.www.pudumjee.com and is annexed hereto and marked as Annexure-9.
SIGNIFICANT AND MATERIAL ORDERS:
There is no significant and material order 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;
e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
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.
|Place : Pune A. K. Jatia ||On Behalf of the Board of Directors |
|Date : 12th June 2020 ||Executive Chairman. |