The Board of Directors of your company is pleased to present the Directors' Reporttogether with Audited Financial Results of the company for the year ended 31st March 2020.
1. FINANCIAL HIGHLIGHTS
Audited financial results for the year ended 31st March 2020 are summarised below:
AUDITED FINANCIAL RESULTS
(Rs. in Crores)
|Particulars ||Year ended 31st March 2020 ||Year ended 31st March 2019 |
|Profit before interest and depreciation ||54.96 ||56.57 |
|Interest and finance charges ||0.65 ||0.95 |
|Depreciation ||5.16 ||4.39 |
|Profit before Exceptional Items ||49.15 ||51.53 |
|Exceptional & non-recurring items ||- ||- |
|Profit before tax ||49.15 ||51.53 |
|Provision for Income Tax ||11.88 ||(1.66) |
|Profit after tax (PAT) ||37.27 ||53.19 |
|Earning per share (EPS)- in Rupees ||23.88 ||34.08 |
2. DIVIDEND & TRANSFER TO RESERVES
Considering performance of the company for the year 2019-20 your Directors are pleasedto recommend a dividend of Rs. 2.50/- per equity share (25%) subject to approval of theShareholders at the ensuing Annual General Meeting of the company. The company hastransferred Rs. 3.00 Crores out of profits for the year to General Reserve.
3. STATE OF THE COMPANY AFFAIRS REVIEW OF PERFORMANCE FOR THE YEAR 2019-20
The Coronavirus outbreak known as Covid-19 has severely impacted businesses around theworld during last quarter of FY 2019-20. In many countries including India there has beensevere disruption to regular business operations due to lockdowns.
Production and sales volume for the year remained in line with the subdued marketconditions and the unprecedented Covid-19 pandemic. Further higher raw material pricesimpacted profitablity of the company for the year. However we could reduce Energy costswhich substantially offset the Raw Material price escalation.This and other costcontainement measures led to somewhat better margins.
Your company's reported satisfactory financial performance was commensurate with thebusiness activity for the year 2019-20. Profit after tax for the year stood at Rs. 37.27Crores vis-a-vis Rs. 53.19 Crores for FY 2018-19.
There is no change in the nature of the business of the company during the year. Due toCOVID-19 Pandemic and resultant lockdown from 24th March 2020 the operations of thecompany and supply-chain got affected. The company does not have any major pendingcontract/agreement nonfulfilment of which may have significant impact on company'sbusiness.
EXPECTATIONS FOR THE YEAR 2020-21
The economic jolt from the continuing Covid-19 spread will weigh significantly on theoperations in the near term. However stimulus packages announced by the Government shouldmitigate the potential damage and also enable an early revival. It is however difficult toforsee impact on different segments along of the supply chain.
Your company is making all efforts to alleviate impact of the pandemic on its businessto the extent possible
4. ANNUAL- RETURN EXTRACTS
Extracts of Annual Return as provided in Section 92(3) of the Companies Act 2013 isattached as Annexure-I.
5. BOARD MEETINGS/AUDIT COMMITTEE
a) During the financial year 2019-20 five (5) meetings of the Board of Directors wereheld on 29th May 2019 7th Aug. 2019 19th Sept. 2019 14th Nov. 2019 and 12th Feb.2020.
b) Audit & Risk Management Committee-
The Company has constituted the Audit & Risk Management Committee of the Boardpursuant to Section 177 of the Companies Act 2013 and its terms of reference are inconformity with SEBI (Listing Obligations & Disclosure Requirements) Regulations2015. The composition of Committee is mentioned in the Corporate Governance Report.
6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review is presented in aseparate section forming part of the Annual Report for 2019-20.
7. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
Pursuant to Section 177 of the Companies Act 2013 the company has established a'Vigil Mechanism' for directors and employees to report their genuine concerns to thecompany. The company oversees this 'Vigil Mechanism' through the Audit & RiskManagement Committee of the Board.
8. ENVIRONMENT POLLUTION CONTROL AND SAFETY
Your company is committed to provide safe working conditions and healthy environment toall its stakeholders. The company is accredited with ISO 9001 : 2015 ISO 14001: 2015 andISO 18001:2007 which signifies adoption of integrated quality environment and safetymanagement systems to harmonize Industrial activities with environmental preservation withletter and spirit. The company has requisite environmental consents from the Governmentauthorities.
Your company has been awarded the following awards during the financial year 2019-20 :
- Two (2) awards in paper sector for outstanding achievement in Safety Management andEnvironment management by Greentech Foundation New Delhi in its Annual EnvironmentalAward-2019.
- Platinum Award in paper sector for outstanding achievement in Environment managementby Apex India in its Environment Excellence Award- 2019.
- Excellence award in National Conventional on Quality Concepts Varanasi-2019organised by Quality Circle Forum of India.
9. SOCIAL FARM FORESTRY
As in the past your company continues to foster plantations with active co-operationof the farmers. This scheme involves supply of high quality clones/seedlings apart fromproviding technical assistance modern farming methods and education to the farmersthrough various programs. The company further stepped-up propagation and distribution ofclonal plants and the area coverage during the year.
10. FIXED DEPOSITS
The company has not invited any fixed deposits during the year and as such there hasbeen no default in repayment of deposit or payment of interest thereon during the year.There were no outstanding fixed deposits as on 31st March 2020. (Rs. Nil as on 31stMarch 2019).
The company is in compliance with provisions of the Companies Act 2013 and rules madethereunder in respect of deposits.
11. INTERNAL CONTROLS
The company has adequate internal control systems in place on the basis of whichfinancial accounting is done and periodically financial statements are prepared. SuchInternal control systems are adequate and operating effectively.
12. REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your company adopted a policy on Corporate Social Responsibility (CSR) to fulfill itsobligation towards the society. The CSR Policy may be accessed on the company's website athttp://www.starpapers.com. The key philosophy of the Company's CSR initiative is topromote development through social and economic transformation. The composition ofCommittee is mentioned in the Corporate Governance Report.
The Report on CSR activities undertaken during the year 2019-20 is annexed herewithmarked as Annexure-II.
13. DIRECTORS/KEY MANAGERIAL PERSONNEL
I) Pursuant to Section 152 of the Companies Act 2013 Mr. Shrivardhan Goenka(DIN-00030375) shall retire by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment. The Board recommends his appointment.
ii) The shareholders at their 80th AGM held on 19th Sept. 2019 appointed Mr. SunilSrivastav (DIN-00237561) and Ms. Savita L. Acharya (07038198) as Independent directorw.e.f 19th Sept. 2019 for a period of 5 years.
iii) The shareholders at their 80th AGM held on 19th Sept. 2019 approved theappointment of Mr. G.P. Goenka (DIN-00030302) as Executive Director w.e.f 7th Aug. 2019for a period of 3 years.
(iv) The shareholders at their 80th AGM held on 19th Sept. 2019 approved there-appointment of Mr. Madhukar Mishra (DIN-00096811) as Managing Director of the companyw.e.f. 1st July 2019 for a period of three (3) years.
(v) Mr. G.P. Goenka and Ms. Savita L. Acharya have resigned from Directorship of thecompany on 30th July 2020 due to personal reasons and other pre-occupations respectively.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as laid down under Section 149(6)of the Companies Act 2013 and SEBI Listing Regulations 2015. The company'sfamiliarization program for Independent Directors is posted on the website of the companyand can be accessed at http://www.starpapers.com/familarisation_prog.pdf.
14. NOMINATION AND REMUNERATION COMMITTEE/POLICY
The Board of Directors has constituted a 'Nomination & Remuneration Committee'which follows the company's policy on directors' appointment and remuneration includingcriteria for determining qualification positive attitudes independence of a director andother matters provided under section 178 (3) of the Companies Act 2013.
The gist of company's policy on nomination and remuneration is as under :
The Committee shall consider ethical standards of integrity qualification expertiseand experience for appointment of Directors/KMP etc. and recommend to the Board ofDirectors. Directors/ KMP etc shall be appointed as per the procedure laid down inapplicable laws.
The Committee will recommend the remuneration to be paid to Directors/KMP etc requiringCommittee approval as per statutory provisions. The level and composition of remunerationso determined by the Committee shall be reasonable and sufficient to attract retain andmotivate the appointee(s). Nomination and Remuneration Policy of the company can beaccessed from the company website -www.starpapers.com.
15. LOAN GUARANTEE INVESTMENTS ETC.
The particulars of loans guarantees or investments have been given in the financialstatements.
16. SUBSIDIARY/JOINT VENTUE/ASSOCIATE COMPANIES
No company has become or ceased to be the company's subsidiary/joint venture/associatecompany during the year.
17. PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
Particulars regarding energy conservation technology absorption and foreign exchangeearnings/outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with theCompanies (Accounts) Rules 2014 are furnished as Annexure-III to this Report.
18. PARTICULARS OF EMPLOYEES AND REMUNERATION
i) Name of the employee who is in receipt of remuneration of Rs. 102 lacs or moreduring the financial year 2019-20 :
|Sr. ||Name & Designation ||Remuneration* recd.- (lacs) ||Nature of employment ||Qualification & experience ||Date of commencement of employment ||Age ||Last employment held ||% of equity shares held ||Whether relative to director |
|1. ||Mr. G.P Goenka Executive Chairman ||208.86 ||Contractual ||B. Sc. 58 years ||20/05/2018 ||79Y ||Executive Director- Duncan Industries Ltd. ||Nil ||Yes Father of Mr. Shrivardhan Goenka |
|2. ||Mr. Madhukar Mishra Managing Director ||285.15 ||-do- ||B. Sc. DMS (Mgt.) 41 years ||01/07/2001 ||63Y ||Sr. VP(Corporate Planning) -Dail Consultants Ltd. ||Nil ||No |
including employer's provident fund contribution if any.
Information in accordance with the provisions of Section 134(3)(q) and Section 197(12)of the Companies Act 2013 read with the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 regarding employees' remuneration are given hereunder :
a) Ratio of remuneration of each director to the median remuneration of employees
|Director ||Director remuneration (DR)- Rs. ||Median remuneration (MR) of employee -Rs. ||Ratio (DR/MR) |
|MR. G.P. GOENKA ||20885813 ||296947 ||70.33 |
|MR. SHRIVARDHAN GOENKA ||80000 ||296947 ||0.27 |
|MR. SHIROMANI SHARMA ||390000 ||296947 ||1.31 |
|MR. C.M. VASUDEV ||280000 ||296947 ||0.94 |
|MR. M.P. PINTO ||210000 ||296947 ||0.71 |
|MS. SAVITA L. ACHARYA ||100000 ||296947 ||0.34 |
|MR. SUNIL SRIVASTAV ||140000 ||296947 ||0.47 |
|MR. MADHUKARMISHRA ||28515593 ||296947 ||96.02 |
b) % increase in remuneration of each director CEO CFO CS in the financial year2019-20
|Official name ||Year 2019-20 Remuneration-Rs. In lacs ||% increase in remuneration |
|Directors ||Directors are receiving only sitting fees for attending meetings. |
| ||Sitting fee has been revised from Rs. 20000/- per Board/Committee meeting to Rs. 30000/- per Board/Committee w.e.f 12th Feb. 2020 |
|Executive Chairman ||208.86 ||Nil |
|Managing Director ||285.16 ||31.9% |
|Chief Financial Officer* ||29.87 ||N.A |
|Company Secretary ||13.11 ||19.6% |
*appointed during the financial year.
c) % increase in median remuneration of employees in the financial year 2019-20vis-a-vis previous year was 6%.
d) There were 457 permanent employees on the rolls of the company as on 31.03.2020.
e) Average increase in remuneration inter-alia depends upon rate of inflationindividual's performance company policy human resource demand-supply positionnegotiations with trade unions company performance etc.
f) Average percentage increase in salaries of employees vis-a-vis managerial personnel- Average percentage increase in salaries of employees was 11% vis-a-vis 17.16% in salaryof managerial personnel for FY 2019-20.
g) No director is getting any variable component of remuneration except commission toExecutive Chairman and performance pay to the Managing Director are decided by the Boardof Directors every year based on performance of the company terms of appointment andapplicable statutory provision. Remuneration is paid as per remuneration policy of thecompany.
19. PERFORMANCE EVALUATION
The company has a Policy on Nomination & Remuneration and Evaluation of directorsetc. The Board of Directors evaluates its own performance that of Committee(s) andindividual director(s) on annual basis in the manner envisaged by the Nomination &Remuneration Committee (NRC) of the Board. Nomination & Remuneration Committee (NRC)also ensures that evaluation process is carried out by the Board every year as per theprescribed method.
20. HUMAN RESOURCES AND WELFARE
Your company has a structured approach to manage its human resources in line withchanging needs of the organisation. Industrial relations remained harmonious during theyear.
Your Directors further state that during the year under review there was no casereported under the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
21. DIRECTORS' RESPONSIBILITY STATEMENT
As required under the provisions of Section 134(3)(c) Directors ResponsibilityStatement on preparation and presentation of these accounts is as per Annexure-IV to thisReport.
22. CORPORATE GOVERNANCE
A separate report on corporate governance along with a certificate from the statutoryauditors confirming the compliance with corporate governance requirements has been annexedas Annexure-V to Directors' Report.
The members at its 78th Annual General Meeting held on 14th Sept. 2017 appointed M/sJain Pramod Jain & Co. Chartered Accountants New Delhi as statutory auditors of thecompany to hold office from till the conclusion of 83rd AGM of the company.
Pursuant to Section 148(3) of the Companies Act 2013 read with the Rules madethereunder the Board of Directors on the recommendation of Audit & Risk ManagementCommittee has appointed M/s K.B. Saxena & Associates Cost Accountants as the CostAuditors of the Company for the financial year 2019-20.
25. AUDITORS' REPORT
I) Statutory Audit :
The observations of the auditor read with relevant notes on the financial statementsare self-explanatory.
ii) Secretarial Audit :
M/s D. Dutt & Co. company secretary in practice secretarial auditor of thecompany has done secretarial audit for FY 2019-20. Secretarial audit report is attached asAnnexure-VI. The observations of the secretarial auditor in the report areself-explanatory.
26. TRANSACTIONS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the company during the financialyear with related parties were in the ordinary course of business and on arm's lengthbasis. During the year the company had not entered into any contract / arrangement /transaction with related parties which could be considered material. Information pursuantto Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules2014 are given in Annexure-VII in Form AOC-2 and the same forms part of this report.
27. RISK MANAGEMENT
The Company is having Risk Management framework covering identification evaluation andcontrol measures to mitigate the identified business risks.
28. LISTING ON STOCK EXCHANGES
Your company's equity shares are listed on National Stock Exchange of India Ltd. (NSE)and The Stock Exchange Mumbai (BSE). The company has paid the listing fees to the stockexchanges for the financial year 2019-20.
The Board of Directors place on record their gratitude for the invaluable support andefforts put in by all the Stakeholders viz. employees investors dealers customerssuppliers bankers and Government authorities.
| ||For and on behalf of the Board |
|Place : New Delhi ||Shiromani Sharma |
|Date : 31st July 2020 ||Chairman |