Your Directors are pleased to present the 65th Annual Report of your Company togetherwith the audited financial statements for the year ended 31st March 2020.
Financial Results of the Company for the year under review along with the figures forprevious year are as follows:
|Particulars ||31st March 2020 ||31st March 2019 |
| ||(RS in Crores) || |
|Profit Before Finance Cost Depreciation and Tax (PBIDT) ||528.79 ||529.92 |
|Finance Cost ||72.04 ||29.24 |
|Profit Before Depreciation and Tax ||456.75 ||500.68 |
|Depreciation ||166.37 ||175.26 |
|Tax Expenses (Including Deferred Tax) ||13.98 ||29.36 |
|Profit After Tax (PAT) ||276.40 ||296.06 |
|Other Comprehensive Income (Net of Tax) ||(4.71) ||0.25 |
|Total Comprehensive Income ||271.69 ||296.31 |
Interim Dividend of ' 5.00 per equity share (250%) for the financial year 2019-20 hasbeen paid on 26.03.2020. Through Notice of 65th Annual General Meeting for the year ended31st March 2020 seeks shareholders' approval for treating the same as final dividend.
The performance of the Company during the year under review has been satisfactory. Theproduction & working during this year got impacted due to planned shut of ENMASRecovery Boiler for 19 days in Oct. Finance Cost was higher due to NCDs /Loan taken forAPL acquisition. Due to COVID 19 in March 2020 production of 5924 MT and Sales of 10136MT got impacted.
Due to COVID 19 full plant was stopped from 26.03.2020. Based on Govt. approval forcontinuous process plant plant was restarted on 04.04.2020. Since then plant is runningat partial capacity due to low demand. It is expected to improve in Q2 FY 21.
DIVISION WISE PERFORMANCE:
PAPER AND PAPERBOARD DIVISION DANDELI
The production of Paper and Paperboard was 313876 MT (98% capacity utilization) duringthe year against 304957 MT in the last year (95% capacity utilization) i.e. higher by8919 MT. The sale of Paper and Paperboard was 304762 MT during the year against 301931 MTin the last year i.e. higher by 2831 MT. Turnover during the year was ' 1866 Crores asagainst ' 1851 Crores in the last year i.e. higher by ' 15 Crores. The EBITDA margin was24.56% during the year.
CABLE DIVISION MYSORE
The production of Optical Fibre Cable was 37392 Kms during the year against 40097 Kmsin last year thereby lower production by 2705 Kms due to loss of operations in March2020. The sale of Optical Fibre Cable was 37510 Kms during the year as against 37930 Kmsin the last year i.e. lower by 420 Kms. The turnover was ' 107 Crores during the year asagainst ' 117 Crores in the last year i.e. lower by ' 10 Crores. The EBITDA margin was19.32% during the year.
Export of Paper and Paperboard in foreign currency during the year was 3588 MT worth '21 Crores (FOB) as against 2530 MT worth ' 17 Crores (FOB) in the last year. SimilarlyCable worth ' 8 Crores (FOB) was exported during the year as against ' 4 Crores in thelast year.
Company is continuously working by phase wise investment at Paper Division Dandeli forimproving paper quality produce new speciality products and reduction of usage of steampower chemical water and also minimize the breakdown of machines.
Additionally the Company's Cable Division is also working on Green field expansion inTelangana for backwards integration of raw material required for Optical Fibre Cable whichwill be commissioned on approvals from M-Sips. The Land has already been acquired from theGovernment of Telangana.
ANDHRA PAPER LIMITED ACQUISITION AS SUBSIDIARY COMPANY:
In line with growth plan the Company carried out strategic acquisition ofInternational Paper APPM Limited (IPAPPM). The share purchase agreement was signed on29.05.2019.
On 29.10.2019 the Company acquired 55% of the paid up share capital of IPAPPM by13902025 equity shares of ' 10/- each from International Paper Investments (Luxembourg)S.a.rl and 7971496 equity shares of ' 10/- each from IP International Holding Inc. Interms of Letter of Offer dated 30.08.2019 the Company acquired on 11.10.20196839879equity shares of ' 10/- each representing 17.20% of the paid up share capital of IPAPPMfrom public shareholders. Consequently IPAPPM Limited has become a subsidiary of theCompany having total share holding of 72.20%. The name of IPAPPM Limited has been changedto Andhra Paper Limited (APL) w.e.f. 09.01.2020. The acquisition has been carried out frominternal accrual borrowing from Banks and NCDs. The working of APL for the year ended31st March 2020 has been satisfactory.
RELATED PARTY DISCLOSURE AND TRANSACTIONS:
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons.
All related party transactions are placed before the Audit Committee as also the Boardfor approval. The Details of related party disclosure and transactions as required by theAccounting Standards (Ind AS 24) and AOC-2 have been made in the notes to the FinancialStatements.
The Company has developed a policy on related party transaction and its materiality forthe purpose of identification and monitoring of such transactions. The Policy on relatedparty transaction and its materiality as approved by the Board is uploaded on theCompany's website: www.westcoastpaper.com.
As per the Companies (Amendment) Act 2017 dated 3rd January2018 read withnotification dated 9th February 2018 a copy of Annual Return is available at the weblink: http://www.westcoastpaper.com/investors/.
CORPORATE SOCIAL RESPONSIBILITY:
The Company has framed a Corporate Social Responsibility (CSR) Policy as required underSection 135 of the Companies Act 2013. CSR Committee has been framed pursuant to Rule 8of the Companies (Corporate Social Responsibility Policy) Rules 2014 to oversee the CSRactivities initiated by the Company during the financial year under review. Annual Reporton CSR in the prescribed format is attached and forms a part of this report & policymay be accessed on the Company's website.
MEETINGS OF THE BOARD:
During the year under review Seven Board Meetings were held and details thereof arementioned in the Report on Corporate Governance forms a part of this report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
The Company's policy on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a Director and othermatters provided under sub-section (3) of Section 178 is as below :
Appointment policy for Independent Directors Key Managerial Personnel & SeniorExecutives is as under-
(A) Independent Directors:
Independent Directors are appointed based on the criteria mentioned under section149(6) of the Companies Act 2013 and in accordance with other applicable provisions ofthe Companies Act 2013 Rules made there under & Listing Agreements entered withStock Exchanges.
(B) Key Managerial Personnel (KMP):
KMP are appointed by the resolution of the Board of Directors of the Company based onthe qualification experience and exposure in the prescribed fields. Removal of the KMP isdone by the resolution of the Board of Directors of the Company. Appointment/Removal is inaccordance with provisions of the Companies Act 2013 Rules made there under &Listing Agreements entered with Stock Exchanges.
(C) Senior Executives:
Senior Executives are appointed by the Chairman & Managing Director and/orExecutive Director of the Company based on their qualification experience & exposure.Removal of the Senior Executives is also done by Chairman & Managing Director and/orExecutive Director. Further appointment & removal are noted by the Board as requiredunder clause 8(3) of Companies (Meetings of the Board and its Powers) Rules 2014.
PERFORMANCE EVALUATION OF INDEPENDENT DIRECTORS:
Criteria for performance evaluation of Independent Directors as required under SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed herewithforms a part of this report.
The requisite details as per Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed herewith forms a part of this report.
CONSERVATION OF ENERGY RESEARCH & DEVELOPMENT TECHNOLOGY ABSORPTION & FOREIGNEXCHANGE EARNING/ OUTGO:
The information required under Section 134(3)(m) of the Companies Act 2013 is annexedherewith forms a part of this report.
MANAGEMENT'S DISCUSSION AND ANALYSIS :
A comprehensive Management's Discussion and Analysis Report as required underRegulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 is annexed herewith forms a part of this report.
Pursuant to Schedule V of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a Corporate Governance Report is annexed herewith forms a part of thisreport.
A certificate from the auditors of the Company regarding compliance of the conditionsof Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is attached herewith forms a part of thisreport.
The Company is complying with Regulations of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 with regard to Corporate Governance and reports to thateffect are being regularly filed with the Stock Exchanges. The Company has obtaineddeclaration from the Directors and Senior Management Personnel of the Company forcompliance of Code of Conduct and the Certificate from CEO/CFO was placed before the Boardof Directors at the meeting held on 26.06.2020.
DIRECTORS' RESPONSIBILITY STATEMENT:
The Directors' Responsibility Statement as required under Section 134(5) of theCompanies Act 2013 is annexed herewith forms a part of this report.
DIRECTORS AND KMP:
Retirement by Rotation
Shri Saurabh Bangur (DIN:00236894) will retire from the office by rotation at theensuing Annual General Meeting and being eligible offers himself for re-appointment.
Shri Virendraa Bangur (DIN:00237043) has been appointed as Additional Director of theCompany at the meeting of the Board held on 12th November 2019 and re-designated as JointManaging Director at the meeting of the Board held on 26th June 2020. Notice of ensuingAnnual General Meeting includes the proposal for appointment as Director andappointment/re-designation as Joint Managing Director.
Smt. Arpita Vinay (DIN: 06940663) has been appointed as Additional Independent WomanDirector of the Company at the meeting of the Board held on 26th June 2020 and Notice ofensuing Annual General Meeting includes the proposal for appointment as Director.
There was no re-appointment of Director during the year.
DECLARATION BY DIRECTORS:
The Company has received declaration from all the Independent Directors under Section149(7) of the Companies Act 2013 and Regulation 25(8) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 in respect of meeting the criteria ofindependence provided under Section 149(6) of the Companies Act 2013 and clause (b) ofsub-regulation (1) of the Regulation 16 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
REPORTING OF FRAUDS:
Auditors of the Company have not reported any fraud as specified under the 2ndprovision to Section 143(12) of the Companies Act 2013.
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an annual performance evaluation of its own performance the Directors individually aswell as the evaluation of the working of its Board Committees. The manner of evaluationhas been explained in the Corporate Governance Report.
The paid up Equity Share Capital as on 31st March 2020 was ' 1320.98 lakhs comprisingof 66048908 Equity Shares of ' 2/-each. During the year under review the Company hasnot issued any further shares to the members or general public.
During the year ended on 31.03.2020 Company has allotted Nos.1980 10.30% SecuredRated Listed Redeemable NonConvertible Debentures of face value of ' 1000000/- eachaggregating to ' 198.00 Crores for the acquisition of Andhra Paper Limited (formerly knownas International Paper APPM Limited). ICRA Limited assigned the credit rating as: ICRA AA-Stable for Non-Convertible Debentures.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:
Details of Loans Guarantees and Investments cover under the provisions of Section 186of the Companies Act 2013 are given in the notes to the Financial Statements.
BUSINESS RESPONSIBILITY REPORT (BRR):
SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations2019 notified on 26.12.2019 amended the Regulation 34(2)(f) which requires AnnualReport of top one thousand listed entities based on market capitalization shall containBRR. BRR is annexed herewith forms a part of this report.
Pursuant to Regulation 25(7) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has framed a policy to familiarize the Independent Directorsabout the Company. The Policy is available on the website of the Company:www.westcoastpaper.com.
VIGIL MECHANISM/WHISTLE BLOWER POLICY:
The vigil mechanism of the Company incorporates a policy under Regulation 22 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and Rule 7 of theCompanies (Meeting of the Board and its Power) Rules 2014 provide the mechanism forEmployees and Directors of the Company to approach the Executive Director and the Chairmanof the Audit Committee of the Board. Protected disclosures can be made by a Whistle Blowerby means of e-mail or telephone or letter to the Executive Director or to the Chairman ofthe Audit Committee. The policy on Vigil Mechanism may be accessed on the Company'swebsite.
BUSINESS RISKS MANAGEMENT:
Pursuant to Regulation 17(9) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company has laid down a framework to inform the Board about theparticulars of Risks Assessment and Minimization Procedures (Risks Management) Plan. TheRisks Management Plan is available on the website of the Company.
DISCLOSURE PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
Details required under the Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013 and the Companies (Accounts) Amendment Rules 2018covered in the report of Corporate Governance forms a part of this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT:
There are no significant and material orders passed by the Regulators or Courts whichwould impacts the status of the Company and its future operations.
The Notes on Accounts and the observations of the Auditors in their report on theAccounts of the Company are self explanatory and in the opinion of the Directors do notcall for any clarifications.
a. Statutory Auditors and their Report
M/s Singhi & Co. Chartered Accountants Kolkata appointed as Statutory Auditors atthe 62nd Annual General Meeting of the Company pursuant to the provision of rotation undersection 139 and 141 of the Companies Act 2013 and rule 7 of the Companies (Audit andAuditors) Rules 2014 for a period of 5 consecutive years ending on 31.03.2022 andconsent of the members accorded at the 63rd Annual General Meeting held on 22nd August2018 to continue the appointment thereof as the Auditors of the Company for the remainingterm without any further ratification by the shareholders pursuant to the amendedprovisions of Section 139 of the Companies Act 2013 and Rules made there under notifiedby Ministry of Corporate Affairs as on 07.05.2018. The observations of the Auditors intheir report for the financial year 2019-20 on Accounts and the Financial Statements readwith the relevant notes are self explanatory.
b. Secretarial Auditor and Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013 the Board ofDirectors appointed Shri Naman Joshi Bangalore practicing Company Secretary asSecretarial Auditor to carry out Secretarial Audit of the records maintained by theCompany for the financial year 2019-20. The report given by him for the said financialyear in the prescribed form No: MR 3 is annexed to this report.
c. Cost Auditor and Cost Audit Report
Pursuant to revised order of the Central Government dated 31.12.2014 Cost Audit of theCost Records of the Company is mandatory from the financial year starting 1st April 2015and Shri Umesh Kini Cost Accountant Sirsi has been appointed as Cost Auditor of theCompany to conduct Cost Audit of Cost Records maintained by the Company for the financialyear 2020-21. Accordingly matter relating to the appointment will be placed in next AnnualGeneral Meeting.
INTERNAL CONTROL SYSTEM:
There are adequate internal control procedures commensurate with the size of theCompany and nature of its business for the purchase of inputs availing of services fixedassets for the sale of goods and providing of services. Full-fledged Internal Auditdepartment carries out pre and post audit of all significant transactions throughout theyear. Company has also appointed M/s S.S.Kothari Mehta & Co. Chartered AccountantsNew Delhi (outsourced) as Internal Auditor. Based on the Annual Internal Audit programmeas approved by Audit Committee of Board regular internal audits are conducted. Findingsare placed before Audit Committee which reviews and discuss the actions taken with theManagement.
Industrial Relations remained cordial throughout the year under review. The Company hasentered into a tripartite longterm wage revision settlement with Joint NegotiationCommittee of Unions on 04.05.2016 for the period from 01.01.2015 to 31.12.2018. Theprocess of renewal of tripartite long-term wage revision settlement with Joint NegotiationCommittee of Unions from 01.01.2019 is going on. Your Directors acknowledge the supportand co-operation from employees at all levels.
AWARDS AND RECOGNITION:
In recognition of good management systems and safety performance during 2017 &2018 National Safety Council Karnataka Chapter awarded us with Uthama Suraksha PuraskaraTrophy & Certificate.
CONSOLIDATED FINANCIAL STATEMENTS:
The Consolidated Financial Statements have been prepared by the Company in accordancewith the applicable Accounting Standards. The Audited Consolidated Financial Statementstogether with Auditors' Report forms a part of this report.
A Report on the performance and financial position of wholly owned subsidiary company(West Coast Opticable Limited) and listed subsidiary Company Andhra Paper Limited for thefinancial year ended 31.03.2020 included in the Consolidated Financial Statements ispresented in the separate section AOC-1 forms a part of this report.
Pursuant to the provisions under Section 136 of the Companies Act 2013 the financialstatements including consolidated
financial statements along with relevant documents and separate Audited Accounts of thesubsidiary companies are available at the Company's website.
Your Directors would like to express their sincere appreciation and thanks to theCentral and State Governments Banks Financial Institutions Customers Suppliers andShareholders for their continued support and co-operations.
Your Directors take the opportunity to place on record their deep appreciation of thecommitted services rendered by the employees of the Company who have contributedsignificantly towards Company's performance and growth.
| ||For and on behalf of the Board |
|Place : Dandeli ||S. K. Bangur |
|Date : June 26 2020 ||Chairman & Managing Director |
| ||DIN:00053237 |