The Directors are pleased to present to you the Thirty-Nine Annual Report on thebusiness and operations of your Company together with the Audited Financial Statements forthe financial year ended 31st March 2020.
1. CORPORATE OVERVIEW
The Company was incorporated in year 1981. The Company has started its first commercialproduction in year 1983 and has thereafter transformed from being an Indian small papermanufacture to a large specialty packaging products manufacturing and trading group withleadership position in specialty papers and Moulded (Tableware) products and enjoys aformidable position across paper industries in national and global markets.
2. FINANCIAL SUMMARY AND HIGHLIGHTS:
The summarized financial performance of your Company for the financial year 2019-20 ascompared to previous year 2018-19 has been as under:
(Rs. In Lakhs)
|Particulars ||For the year ended 31st March 2020 ||For the year ended 31st March 2019 |
|I. Revenue from operations ||25238.68 ||25025.59 |
|II. Other income ||871.82 ||517.56 |
|III. Total Income ||26110.50 ||25543.15 |
|IV. Expenses || || |
|Cost of materials consumed ||10175.01 ||10980.41 |
|Purchase of stock-in-trade ||3.25 ||12.20 |
|Changes in inventories of finished goods work-inprogress and stock-in-trade ||(59.47) ||146.48 |
|Employee benefits expenses ||2667.06 ||2419.09 |
|Finance costs ||1261.40 ||1682.31 |
|Depreciation and amortization expenses ||975.95 ||870.46 |
|Other expenses ||7133.46 ||6949.11 |
|Total Expenses (IV) ||22156.66 ||23060.06 |
|Particulars ||For the year ended 31st March 2020 ||For the year ended 31st March 2019 |
|V. Profit before Tax ||3953.84 ||2483.09 |
|VI. Tax expense: || || |
|1. Current tax ||685.13 ||541.59 |
|2. Deferred tax ||477.53 ||(131.58) |
|3. Tax adjustments relating to earlier years ||29.35 ||2.10 |
|VII. Profit for the period ||2761.83 ||2070.98 |
|VIII. Other comprehensive income || || |
|(i) Items that will not be reclassified to profit or loss Remeasurements of the defined benefit plans ||(62.69) ||(9.98) |
|(ii)Income tax related to items that will not be reclassified to profit or loss ||18.26 ||(2.90) |
|Sub Total ||(44.43) ||(12.88) |
|IX. Total comprehensive income for the period ||2717.40 ||2058.10 |
|X. Earnings per equity share || || |
|1. Basic ||7.84 ||5.88 |
|2. Diluted ||7.84 ||5.88 |
3. PERFORMANCE REVIEW
During the financial year 2019-20 the Company recorded an impressive performance byrecording its highest Profit before Tax (PBT) and Profit After Tax (PAT). While EBITDAregistered an increase by 25.45% PAT improved by 32.03%. These results were driven bylower manufacturing cost from more efficient operations. The Company continued to focus onimportant initiatives for innovating new products as well as improving the customerexperience and operational efficiencies. COVID-19 outbreak and lockdown thereafter fromlast week of March 2020 had impacted the above parameters. The summarized productionsales and exports of products of your Company for the financial year 2019-20 as comparedto previous year 2018-19 has been as under:
|Particulars ||Unit of Measurement ||Current Year ended 31.03.2020 ||Previous Year ended 31.03.2019 |
|PRODUCTION || || || |
|i. Kraft Paper ||MT ||21693 ||21058 |
|ii. Poster Paper ||MT ||16210 ||17429 |
|iii. Pulp ||MT ||6998 ||7243 |
|iv. Moulded(Tableware) Products ||MT ||1059 ||1276 |
|v. Egg Tray ||Pieces ||9443200 ||10185000 |
|vi. Pith Pallet ||MT ||5874 ||5933 |
|DOMESTIC SALES || || || |
|i. Kraft Paper ||MT ||17062 ||16672 |
|ii. Poster Paper ||MT ||13580 ||15258 |
|iii. Pulp ||MT ||6922 ||7248 |
|iv. Moulded (Tableware) Products ||MT ||1152 ||1128 |
|v. Egg Tray ||Pieces ||9369100 ||10185000 |
|vi. Pith Pallet ||MT ||4300 ||1971 |
|EXPORTS SALES || || || |
|i. Kraft Paper ||MT ||4201 ||4426 |
|ii. Poster Paper ||MT ||2169 ||2541 |
|iii. Moulded(Tableware) Products ||MT ||57 ||21.55 |
|TRADED MOULDED(TABLEWARE) PRODUCTS || || || |
|i. Purchase ||MT ||- ||467 |
|ii. Domestic Sales ||MT ||29 ||194 |
|iii. Export Sales ||MT ||- ||13 |
Based on the Company's performance the Directors have recommended a final dividend of10% (Rs.1 per equity share) for the year ended 31st March 2020 subject to approval of themembers at ensuing Annual General Meeting.
(Rs. In lakhs)
|Particulars ||As at 31st March 2020 ||As at 31st March 2019 |
|Final Dividend for the year ended Rs. 1 per share (P.Y. Rs.1 per share) ||352.40 ||352.40 |
|Dividend Distribution Tax on above ||0.00 ||72.44 |
|Total ||352.40 ||424.84 |
The dividend on equity shares if approved by the members would involve a cash outflowof Rs.352.40/- lakhs.
5. TRANSFER TO RESERVES
The closing balance of the retained earnings of the Company for FY 2020 after allappropriation and adjustments was Rs.6465.85 lakhs. The details of Reserve are givenbelow:-
(Rs. In lakhs)
|Particulars ||As at 31st March 2020 ||As at 31st March 2019 |
|Capital Reserve ||37.32 ||37.32 |
|Securities Premium ||1172.15 ||1172.15 |
|General Reserve ||550.00 ||550.00 |
|Retained Earnings ||6465.85 ||4128.86 |
|Other Comprehensive Income ||(86.33) ||(41.90) |
|Total ||8138.99 ||5846.43 |
6. SHARE CAPITAL
The authorized share capital of the Company was Rs.6000 lakhs divided into 560 lakhsequity shares of Rs.10 each and 4 lakhs preference share capital of Rs.100 each.
The paid up Equity Share Capital of the Company as on 31stMarch 2020 was Rs.3524lakhs.
The paid up Equity Share Capital of the Company as on 20th June 2020 i.e. the date ofDirectors' Report was Rs.3524 lakhs.
The Company has not issued shares with differential voting rights employee stockoptions and sweat equity shares during the year under review. The Company has paid ListingFees for the financial year 2020-21 to BSE Limited where its equity shares are listed.
7. HUMAN RESOURCE DEVELOPMENT
The Company takes pride in the commitment competence and dedication of its employeesin all areas of the business. The Company has a structured induction process andmanagement development programs to upgrade skills of Leader. Objective appraisal systemsbased on key result areas (KRAs) are in place for its Team Members.
The Company believes in the potential of people to go beyond and be the game-changingforce for business transformation and success. This potential is harnessed by fostering anopen and inclusive work culture that enables breakthrough performance and comprehensivedevelopment of employees through the three pillars of Leading Self Leading Teams andLeading Business.
8. CREDIT RATING
The Company had given mandate to Care Ratings Limited to rate its long term and shortterm debts. The Care Ratings Limited had issued Credit Rating Letter on 14th February2020 as detailed below:-
|Facilities ||Rating ||Amount (Rs. crore) |
|Long term Bank Facilities - Term Loan ||CARE BBB; Stable (CARE Triple B; Outlook: Stable) ||114.74 |
|Long term Bank Facility -Fund Based ||CARE BBB; Stable (CARE Triple B; Outlook: Stable) ||64.73 |
|Long Term Bank Facility - Non-Fund Based ||CARE A3 (A Three) ||25.76 |
Total Facilities: 205.23 (Rs. Two hundred and five crore and twenty three lakhs only)
9. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICHTHE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT
There has been no material changes and commitments affecting the financial position ofthe Company which has occurred between the end of the financial year of the Company towhich the financial statements relate i.e. 31st March 2020 and the date of the reporti.e. 20thJune 2020.
The Financial Year 2020 ended with the COVID-19 pandemic disrupting the global economy.The rampant spread of COVID-19 outbreak across borders and geographies has severelyimpacted almost the whole world and triggered significant downside risks to the overallglobal economic outlook.
Fiscal Year 2021 began with a lockdown resulting in lower economic activity on accountof strict measures taken by the Indian Government to contain the spread and intensity ofthe pandemic. With the spike in spread and continued containment the impact on GDP isexpected to be significant with the risk of negative growth for FY2021. With Nil sales inApril '21 and lower demand in the subsequent months the impact for the company in Q1'21was very high.
10. MERGER BY ABSORPTION OF YASH COMPOSTABLES LIMITED
The Board of Directors of the Company has approved the Draft Scheme as may be modifiedfrom time to time under Sections 230 to 232 of the Companies Act 2013. The Appointed Dateof the Scheme is April 1 2020. However the effectiveness of the Scheme is subject tointer alia receipt of necessary approvals under applicable laws including the approvalof the members of the Company as well as the sanction of the relevant NCLT and such otherrelevant authorities.
The Scheme will be filed with the stock exchange as per the applicable provisions ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 issued by theSecurities and Exchange Board of India and other circulars issued by SEBI.
The Scheme contemplates the merger by absorption YCL by the Company. Upon Scheme cominginto effect YCL will get dissolved without winding up.
The information required to be furnished are set out below:
a. Name of the entities forming part of the amalgamation/merger details in brief suchas size turnover etc.
i. Transferor Company: Yash Compostables
Limited (hereinafter referred as YCL) a company incorporated under the Companies Act2013 and having its registered office situated at Flat No.202 3A/172 Azad Nagar Kanpur208002 Uttar Pradesh.
ii. Transferee Company: Yash Pakka Limited
(hereinafter referred as YPL or Company) incorporated under the provisions of theCompanies Act 1956 and having its registered office at 2nd Floor 24/57 Birhana RoadKanpur - 208001 Uttar Pradesh.
b. Whether the transaction would fall within related party transaction? If yes whetherthe same is done at arm's length basis
i. Related Party: Yes both the companies involved in the Scheme have common promoters.
ii. Arm's Length Basis: Yes the Scheme has been contemplated at an arm's length basis.An Independent Valuation Report has been obtained from Ms. Sudha Bhushan RegisteredValuers and fairness opinion has been obtained from merchant banker -Mark Capital AdvisoryServices.
c. Area of Business Entities
YCL is inter-alia engaged in the business of trading of compostable products. YCL isalso a marketing company and has played a major role in development of the brand named'Chuk' which is owned by YPL. YCL is expanding its business throughout the country. Inview of the ban levied on plastic by quite a few of the states in our country which hasresulted in the rise in the demand for compostable products. With the outbreak of Covid 19pandemic the demand for disposable cutlery and plates has also increased instead ofregular dine ware. YCL has established logistic and supply chain network which is apre-requisite for the growth of any FMCG product.
The Company is inter-alia engaged in the business of manufacturing and trading ofproducts like Pulp Kraft Paper Poster Paper Moulded (Tableware) Products Bagasse PithPallets and Egg Tray.
YPL has more than 40 years of manufacturing experience in paper industry and has alltechnical know-how into making of world class pulp which will ensure world classcompostable products from the machine. The new machines are capable of producing rightquality products required domestically and internationally. In house
production of pulp by YPL which is a basic input for compostable products give YPL anedge over other competitors. With support from trusted marketing partner like YCL brandChuk has become a popular name among the customers.
d. Rationale for amalgamation/merger
> YCL and YPL belonging to the same group of management it would be advantageousto combine the activities and operations in a single entity. The amalgamation would createsynergies between two complementing companies with similar objective and business line.
> Both YPL and YCL have their independent B2B customer's and dealer networks supplychain and logistic partners the amalgamation will also provide synergistic linkagesbesides economies in costs by combining the total business functions in all segmentsincluding sales procurement logistic activities and the related activities andoperations and thus contribute to the profitability of the amalgamated entity.
> Economies of scale will play a bigger role as the consolidated entity'soperational efficiency will increase which will in turn allow the merged entity tocompete on a larger scale in the industry thus benefiting the merged entity and theshareholders.
> The amalgamation will enable the merged entity to build up a diversified productportfolio in YPL and will assist the merged entity with faster and quicker decision makingas both manufacturing and marketing activities are under the same management.
> The amalgamation will enable the merged entity to get direct access to customerswhich will give them
a better understanding of the market taste and customer requirements. This will assistthe merged entity to produce right quality required for different market segment
> With YPL having a manufacturing experience of more than 40 years alongwith all therequisite technical know-how to produce in house paper pulp which is a basic input forcompostable products gives YPL an edge over other competitors and YCL a company involvedin marketing will result in the merged entity to have all the necessary functions underone roof. It is considered desirable and expedient to consolidate and amalgamate thebusiness of both YCL and YPL so as to bring both the functions will be under the samemanagement production planning process will become more aligned to the customer needswhich will result in a stronger asset base and skills to conduct the business in theemerging environment and to rationalise the costs of business.
> The amalgamation will increase the net worth of YPL which would enable it tocapitalise upon such improved net worth to enhance the stake holders' value.
> The amalgamation will increase financial strength enhance flexibility and abilityto raise larger resources attract and retain better talent and undertake larger supportservices related projects.
> The amalgamation will result in integration and effective utilisation ofresources which is likely to result in optimising overall shareholder value andimprovement in competitive position of YPL as a combined entity.
> The amalgamation will result in economy of scale reduction in overheadsadministrative and other expenditure efficiency and optimal utilisation of variousresources.
> The amalgamation will bring both the entities under one roof to portray one faceto all the parties with whom the Yash Group deals.
> The amalgamation will result in better leveraging of facilities infrastructureand resources.
> Duplication of administrative functions together with the multiple record keepingwill be eliminated resulting in over-all reduction in expenditure.
> The amalgamation will result in significant reduction in multiplicity of legal andregulatory compliances which at present is required to be made separately by YCL as wellas by the YPL.
> This merger will provide an opportunity to leverage assets and build a strongersustainable business. It will provide an opportunity to fully leverage stronger assetcapabilities experience expertise and infrastructure of both the companies and thusincreased ability for promotion of business activities as well as for fund raising as maybe required for business development.
> The merger would lead to synergic benefits efficiency of operations andmanagement rapid growth of the entity optimum utilization of its resources andminimization of the administrative and operative costs.
> The merger will result in a value creation for the shareholders and stakeholdersof YCL and YPL as the combined amalgamated company will have improved efficiency marketshare financial structure larger cash flows and stronger consolidated revenue andprofitability.
> The merger of YCL with YPL would result in consolidation of business activities ofboth the companies and will facilitate effective management of investments and synergiesin operation.
> There is no likelihood that any shareholder or
creditor or employee of YCL and YPL would be prejudiced as a result of the Scheme.Thus the merger is in the interest of the shareholders creditors and all otherstakeholders of the companies and is not prejudicial to the interests of the concernedshareholders creditors or the public at large.
e. In case of cash consideration- amount otherwise share exchange ratio.
As per the Valuation Report prepared by the Ms. Sudha Bhushan Registered Valuer (Reg.No.: IBBI/ RV/07/2019/12234) the share exchange ratio determined was 68.63: 1 i.e. (SixtyEight point Sixty three) equity share of Rs.10 each credited as fully paid up in theCompany for every  ([One]) equity share of Rs.10 each fully paid up held by them in YCLon basis of the valuation of the assets and liabilities of the Company carried out by themas provided in their report. However Board believes that the per share value of YPL shouldbe revised upward to Rs 41.68 Per Share as against the value arrived by Registered Valuerat Rs 34.48. Accordingly the new share exchange ratio will be 56.77: 1 i.e. (Fifty Sixpoint Seventy Seven) equity share of Rs.10 each credited as fully paid up in the Companyfor every 1 (One) equity share of Rs.10 each fully paid up held by them in YCL.Accordingly 2838500 fresh equity shares will be issued out of which 2810115 equity shareswill be allotted to Promoter and 28385 equity shares will be allotted to Public.
f. Brief details of change in shareholding pattern (if any) of the listed entity
Subsequent to the sanction of the Scheme the Company will make an application forlisting of the New Shares (issued pursuant to the Scheme) on the stock exchange in whichthe shares of the Company are listed in pursuance to the relevant regulations includingSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 read with the SEBI Circulars.
Upon the Scheme coming into effect the promoter shareholding of consolidated entity(i.e. the Company) will be 49.16% of the total paid-up share capital of the Company asagainst current 45.15% of the total paid-up share capital of the Company.
11. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There is no significant material orders passed by the Regulators / Courts which wouldimpact the going concern status of the Company and its future operations.
12. PUBLIC DEPOSITS
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
13. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has an effective internal control and risk-mitigation system which areconstantly assessed and strengthened with new/revised standard operating procedures. TheCompany's internal control system is commensurate with its size scale and complexities ofits operations. The
main thrust of internal audit is to test and review controls appraisal of risks andbusiness processes besides benchmarking controls with best practices in the industry.
The Audit Committee of the Board of Directors actively reviews the adequacy andeffectiveness of the internal control systems and suggests improvements to strengthen thesame. The Company has a robust Management Information System which is an integral part ofthe control mechanism.
The Audit Committee of the Board of Directors Statutory Auditors and the BusinessHeads are periodically apprised of the internal audit findings and corrective actionstaken. Audit plays a key role in providing assurance to the Board of Directors.Significant audit observations and corrective actions taken by the management arepresented to the Audit Committee of the Board. To maintain its objectivity andindependence the Internal Audit function reports to the Chairman of the Audit Committee.
14. CORPORATE GOVERNANCE
As per Regulation 34(3) read with Schedule V of the Listing Regulations a separatesection on corporate governance practices followed by the Company together with acertificate from the Company's Auditors confirming compliance forms an integral part ofthis Report.
15. VIGIL MECHANISM / Whistle Blower Policy
The Company has a Whistle Blower Policy to report genuine concerns or grievances &to provide adequate safeguards against victimization of persons who may use suchmechanism. The Whistle Blower Policy has been posted on the website of the Company athttps://www.yashpakka.com/pdf/ policv/Whistle%20Blower%20Policv.pdf.
16. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the rules made thereunder.
The Policy aims to provide protection to employees at workplace and prevent and redresscomplaints of sexual harassment and for matters connected or incidental thereto with theobjective of providing a safe working environment where employees feel secure.
The Company has revisited the Internal Complaints Committee members and emphasized onthe roles and responsibilities expected from the members. Posters and Banners wererefreshed with the list of committee members and strengthened the awareness of zerotolerance through campaigns.
|Opening as on 01.04.2019 ||Received during FY 2019-20 ||Redressed during FY 2019-20 ||Closing as on 31.03.2020 |
17. RISK MANAGEMENT
Risk management is embedded in your Company's operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Company's approach toaddressing business risks is comprehensive and includes periodic review of such risks anda framework for mitigating controls and reporting mechanism of such risks. The riskmanagement framework is reviewed periodically by the Board and the Audit Committee.
18. COMPLIANCE OF SECRETARIAL STANDARDS:
During the financial year under review the Company has complied with the applicableSS-1 (Secretarial Standard on Meetings of the Board of Directors) SS-2 (SecretarialStandard on General Meetings) and has also voluntarily complied with SS-4 on (SecretarialStandard on Report of the Board of Directors) as applicable issued by the Institute ofCompany Secretaries of India.
19. RELATED PARTY TRANSACTION
All transactions entered with Related Parties for the year under review were on arm'slength basis. Further there are no material related party transactions during the yearunder review with the Promoters Directors or Key Managerial Personnel. All related partytransactions are mentioned in the note no.34 to the accounts. The Company has developed aframework through Standard Operating Procedures for the purpose of identification andmonitoring of such Related Party Transactions.
All Related Party Transactions are placed before the Audit Committee for approval.Omnibus approval was obtained on a yearly basis for transactions which are of repetitivenature. Transactions entered into pursuant to omnibus approval are verified by theAccounts Team and a statement giving details of all Related Party Transactions are placedbefore the Audit Committee and the Board for review and approval on a quarterly basis.
The Policy on Related Party Transactions as approved by the Board of Directors has beenuploaded on the website of the Company and can be seen at the link https://www.yashpakka.com/pdf/policv/Policv%20on%20Materialitv%20 of%20Related%20Party%20Transaction.pdf. Noneof the Directors has any pecuniary relationship or transactions vis-a-vis the Companyexcept remuneration and sitting fees.
The form AOC-2 regarding related party transaction is annexed as Annexure 'A'and formsan integral part of this Report.
20. CORPORATE SOCIAL RESPONSIBILITY (CSR)
As a part of its initiative under the "Corporate Social Responsibility" (CSR)drive the Company has undertaken projects in the areas of environment sustainabilitypreventive health care eradication of hunger education women empowerment healthhygiene and sanitation. These projects are in accordance with Schedule VII to the Act andthe Company's CSR policy. During the year the Board of Directors on the recommendation ofCorporate Social Responsibility Committee of the Company has amended the CSR policy anddecided that for the Financial Year 2019-20 the focus areas of the Company for utilizingthe earmarked CSR Fund are as under:
> Eradicating hunger poverty and malnutrition;
> Promotion of healthcare including preventive healthcare;
> Promotion of education and employmentenhancing vocational skills;
> Ensuring environmental sustainability;
> Other areas approved by the CSR Committee within the ambit of CSR Rules as amendedfrom time-to-time.
The Report on CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed as Annexure 'B' and forms an integral partof this Report. The CSR Policy has been uploaded on the Company's website athttps://www.yashpakka.com/pdf/policy/YPL CSR Policy.pdf.
21. AUDITORS' OBSERVATION:
21.1 STATUTORY AUDITOR
The Statutory Auditor of the Company has given unqualified report during the year underreview.
21.2 SECRETARIAL AUDITOR:-
The Secretarial Auditor of the Company has given unqualified report during the yearunder review with following observation.
a. Annual Secretarial Compliance Report for the year ended March 31 2019 was filedwith Stock Exchange after due date because of some technical error as informed to us;
b. No prior intimation was given to Stock Exchange of the Board Meeting held on11.08.2019 in which the Board considered the matter of issue of Employee Stock OptionPlan;
c. One form MGT-14 for appointment of KMP is pending for filing.
The reply of the Board of Directors are given below:-
a. Annual Secretarial Compliance Report for the year ended March 31 2019 was filedwith Stock Exchange after due date because of some technical error. The same will be filedin current year on timely basis.
b. The Board has already given disclosure in BM Outcome that the same would beconsidered in the next Board Meeting hence again the information was not providedhowever the same will be taken care in future.
c. The MGT-14 could not be filed due to technical reason and further lockdown whichwill be filed in due courtse.
22.1 CHANGES IN DIRECTORS
Mr. Kaikobad Dorab Pudumjee (DIN:01594401) Chairman & Independent Director of theCompany has resigned w.e.f. 20th September 2019.
Mr. Gyanendra Nath Gupta (DIN: 00027502) Independent Director and Chairman of AuditCommittee of the Company has resigned w.e.f. 20th September 2019.
Mr. Jaideep Narain Mathur (DIN: 06560639) Inde pendent Director of the Company hasresigned w.e.f. 14th February 2020.
Mrs. Kimberly Ann McArthur (DIN:05206436) is a Director retiring by rotation inpursuance of Section 152 of the Companies Act 2013 being eligible offers herself forre-appointment.
22.2 CHANGES IN KEY MANAGERIAL PERSONNEL
Mr. U. U. V. Ravikanth Chief Financial Officer (KMP) of the Company has resigned fromthe post of CFO with effect from 25th July 2019.
Mrs. Neetika Suryawanshi has been appointed as Chief Financial Officer (KMP) of theCompany with effect from 10th August 2019.
Mrs. Neetika Suryawanshi Chief Financial Officer (KMP) of the Company has resignedfrom the post of CFO with effect from 6th February 2020.
Mr. Manoj Kumar Maurya has been appointed as Chief Financial Officer (KMP) of theCompany with effect from 7th February 2020.
Mr. Manoj Kumar Maurya Chief Financial Officer (KMP) of the Company has resigned fromthe post of CFO with effect from 9th June 2020.
Mr. Jignesh Shah has been appointed as Chief Financial Officer (KMP) of the Companywith effect from 20th June 2020.
22.3INDEPENDENT DIRECTOR(S) DECALARATION
In pursuance of sub-section (7) of Section 149 of the Companies Act 2013 andRegulation 25(8) of the SEBI (Listing Obligation and Disclosure Requirement) Regulations2015 as amended ("SEBI Listing Regulations") all the Independent Directorshave furnished the declaration that they meet the criteria of Independence as provided inSub-Section (6) of Section 149 of the Companies Act 2013 and Regulation 16(1)(b) of SEBIListing Regulations.
In the opinion of the Board the Independent Directors fulfill the conditions ofindependence specified in Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI Listing Regulations. A formal letter of appointment to IndependentDirectors as provided in Companies Act 2013 has been issued and disclosed on website ofthe Company https://www.yashpakka.com under the head of Independent Directors of InvestorSection.
As per Regulation 17A of the Listing Regulations Independent Directors of the Companydo not serve as Independent Director in more than seven listed companies. Further theManaging Director of the Company does not serve as an Independent Director in any listedentity.
22.4 BOARD ANNUAL EVALUATION
Pursuant to the provisions of the Section 134 and 178 of the Companies Act 2013 readwith Regulation 17 and 19 of the SEBI Listing Regulations annual performance evaluationis to be carried out of the Board and its Committees the Chairman and IndividualDirectors. To ensure an effective evaluation process the Nomination and RemunerationCommittee of the Board of Directors has put in place a robust evaluation framework forconducting the performance evaluation exercise. Performance Evaluation was done based onthe structured questionnaire prepared after taking into consideration the various aspectsof the Board's functioning composition of the Board and its Committees cultureexecution and performance of specific duties obligations and governance.
The performance evaluation of the Directors was completed during the year under review.The performance evaluation of the Chairman and the Non-Independent Directors was carriedout by the Independent Directors and Non-Executive Director. The Board of Directorsexpressed their satisfaction with the evaluation process.
22.5 NOMINATION REMUNERATION AND BOARD DIVERSITY POLICY
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.The Policy broadly lays down the guiding principles philosophy and the basis for paymentof remuneration to Executive and Non-executive Directors (by way of sitting fees andcommission) Key Managerial Personnel Senior Management and other employees. The policyalso provides the criteria for determining qualifications positive attributes andIndependence of Director and criteria for appointment of Key Managerial Personnel / SeniorManagement and performance evaluation which are considered by the Nomination andRemuneration Committee and the Board of Directors while making selection of thecandidates. The above policy has been posted on the website of the Company athttps://www.yashpakka.com/pdf/ policv/Code%20of%20Conduct%20for%20Board%20Members%20and%20Senior%20 Management%20Personnel.pdf.
23. DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors state that to the best of their knowledge and belief and according tothe information and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013:
a) In the preparation of the annual accounts for the year ended 31st March 2020 theapplicable accounting standards have been followed along with the proper explanationrelating to the material departure;
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 as at 31st March 2020 and of the profitof the Company for the year ended on that date;
c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the 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-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 are operatingeffectively; and
f) The Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
24. BOARD AND COMMITTEE OF THE BOARD
The Board of Directors have the following
a. Audit Committee
b. Nomination and Remuneration Committee
c. Stakeholders' Relationship Committee
d. Corporate Social Responsibility Committee
e. Strategic Committee
f. Banking Committee
The details of the Board Committees along with their composition number of meetingsand attendance at the meetings are provided in the Corporate Governance Report forming anintegral part of this Annual Report.
25.1 STATUTORY AUDITORS
CNK & Associates LLP Chartered Accountants Mumbai [Firm Registration No.101961W/W- 100036] submitted their report for the financial year ended 31st March 2020.There is no audit qualification reservation or adverse remark for the year under review.
The Company appointed CNK & Associates LLP Chartered Accountants Mumbai asStatutory Auditor of the Company for a term of 5 years from the conclusion of 37th AGMtill the conclusion of 42nd AGM to be held in the year 2022. The Statutory Auditors havesubmitted the necessary eligibility certificate in terms of second and third proviso toSection 139(1) of the Companies Act 2013 read with Rule 4 of the Companies (Audit andAuditors) Rules 2014.
25.2 SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Act and rules made thereunder theCompany has appointed Adesh Tandon & Associates a firm of Company Secretaries inPractice (C.P.No.1121) to undertake the Secretarial Audit of the Company for the financialyear ended 31st March 2020. The Secretarial Audit Report for the financial year ended31st March 2020 is annexed as Annexure 'C' and forms an integral part of this Report.
25.3 INTERNAL AUDITORS
The Board of Directors of the Company in its meeting held on 20th June 2020 hasauthorized Mr. Jignesh Shah Chief Financial Officer of the Company to appoint InternalAuditor of the Company for conducting the Internal Audit for the financial year ended 31stMarch 2021.
As per the requirements of the Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time your Company is not requiredto maintain cost records.
26. REPORTING OF FRAUDS
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of Act and Rules framed thereunder.
27. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section134(3) (m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as Annexure 'D'andforms an integral part of this Report.
28. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT-9 as requiredunder Section 92 of the Act is annexed as Annexure 'E' which forms an integral part ofthis Report and is also available on the Company's website viz. https://www.yashpakka.com.
29. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report on the operations of the Company asrequired under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred to as "Listing Regulations") is provided in aseparate section and forms an integral part of this Report.
30. PARTICULARS OF EMPLOYEES
DETAILS PERTAINING TO REMUNERATION AS REQUIRED UNDER SECTION 197(12) OF THE COMPANIESACT 2013 READ WITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of employeesof the Company is as follows:
i. The percentage increase in remuneration of each Director Chief Executive OfficerChief Financial Officer Company Secretary during the financial year 2019-20 ratio of theremuneration of each Director to the median remuneration of the employees of the Companyfor the financial year 2019-20 and the comparison of remuneration of each Key ManagerialPersonnel (KMP) against the performance of the Company are as under:
|Name of Directors / KMP ||Remuneration of the Director / KMP in F.Y.2019- 20 (Rs. in Lakhs) ||Remuneration of the Director / KMP in F.Y.2018-19 (Rs. in Lakhs) ||% increase in F.Y.2019-20 (Rs. in Lakhs) ||Ratio (times) of the remuneration of each director to the median remuneration of the employees ||Comparison of the remuneration of the KMP against the performance of the company |
|Mr. Ved Krishna Executive Vice-Chairman ||11917266 ||11387362 ||4.65% ||38.86 || |
The turnover of the Company increased 0.85% and Net Profit for the financial year ended March 31 2020 increased by 32.03% in comparison to last financial year.
|Mr. Jagdeep Hira Managing Director & CEO (KMP) ||11078379 ||9458165 ||17.13% ||32.28 |
|Mr. Narendra Kumar Agrawal Director Works ||3758238 ||3719864 ||1.03% ||12.70 || |
|Mr. Sachin Kumar Srivastava Company Secretary & Head Legal (KMP) ||1591157 ||1437487 ||10.69% ||4.91 || |
|Mr. Manoj Kumar Maurya485 Chief Financial Officer (KMP) ||307140 ||- ||- || || |
|Mrs. Neetika Suryawanshi283 Chief Financial Officer (KMP) ||1519255 || || || || |
|Mr. U. U. V. Ravikanth1 Chief Financial Officer (KMP) ||579603 ||266118 ||Not Comparable1 ||0.91 || |
1. Mr. U. U. V. Ravikanth Chief Financial Officer (KMP) of the Company has resignedfrom the post of CFO with effect from 25th July 2019. Hence his remuneration is notcomparable.
2. Mrs. NeetikaSuryawanshi has been appointed as Chief Financial Officer (KMP) of theCompany with effect from 10th August 2019.
3. Mrs. NeetikaSuryawanshi Chief Financial Officer (KMP) of the Company has resignedfrom the post of CFO with effect from 6th February 2020.
4. Mr. Manoj Kumar Maurya has been appointed as Chief Financial Officer (KMP) of theCompany with effect from 7th February 2020.
5. Mr. Manoj Kumar Maurya Chief Financial Officer (KMP) of the Company has resignedfrom the post of CFO with effect from 9th June 2020.
ii. The median remuneration of employees of the Company during the financial year wasRs.3.46 lakhs.
iii. In the financial year there was an increase of 18.33% in the median remunerationof employees;
iv. There were 450 permanent employees on the rolls of the Company during the financialyear 2019-20.
v. Relationship between average increase in remuneration and company performance: TheNet Profit for the financial year ended 31st March 2020 increased by 32.03% whereas theincrease in median remuneration was18.33%. The average increase in median remuneration wasin line with the performance of the Company.
vi. Comparison of Remuneration of the Key
Managerial Personnel(s) against the performance of the Company: The total remunerationof Key Managerial Personnel has increased 11.78% during the year in comparison to lastyear.
vii. a) Variations in the market capitalisation of the Company: The marketcapitalization of the Company has been decreased by 138.17% as on 31st March 2020 toRs.7717.56 lakhsin comparison of Rs.18381.18lakhs as on 31stMarch 2019.
b) Price Earnings ratio of the Company: The Price Earnings Ratio was 2.79 as at 31stMarch 2020in comparison to 8.87as on 31st March 2019.
c) Percent increase over/ decrease in the market quotations of the shares of thecompany as compared to the rate at which the Company came out with the last public offerin the year: The Company had come out with Further Public Offer (FPO) in 2005. An amountof Rs.2352 lacs invested in the said FPO by issuing 16800000 equity shares at Rs.14would be worth Rs.3679.20 lakhs as on 31st March 2020. There has been increase of 56.43%in the shares of the Company in comparison to FPO.
viii. Average percentage increase made in the salaries of employees other than themanagerial personnel in the last financial year i.e. 2019-20 was 15.71% whereas theincrease in the managerial remuneration for the same financial year was 8.91%.
ix. The key parameters for the variable component of remuneration availed by thedirectors are considered by the Board of Directors based on the recommendations of theHuman Resources
Schedule V of the Companies Act 2013 Nomination and Remuneration Committee as per theRemuneration Policy for Directors Key Managerial Personnel and other Employees.
x. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year - Not Applicable; and
xi. It is hereby affirmed that the remuneration paid is as per the as per the ScheduleV of the Companies Act 2013 Remuneration Policy for Directors Key Managerial Personneland other Employees.
xii. Except Mr. Ved Krishna Executive Vice Chairman and Mr. Jagdeep Hira ManagingDirector & CEO of the Company no other employee was employed throughout the financialyear at an aggregate salary of not less than Rs.10200000/- per annum.
xiii. No Employee was employed for a part of the financial year at an aggregate salaryof not less than Rs.850000/- per month.
xiv. Details of Top Ten employees of the company as required under Rule 5(2) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedvide Notification dated 30th June 2016 by Ministry of Corporate Affairs for the yearended 31st March 2020:
|Sl. No. ||Name & Age ||Qualification ||Designation ||Date of Joining ||No. and % of equity shares held ||Remuneration ||Previous employment |
|1 ||Mr. Ved Krishna (44 years) ||B. A. (Hons.) ||Executive Vice Chairman ||30/05/1999 ||11009950 (31.24%) ||11917266 ||- |
|2 ||Mr. Jagdeep Hira (48 Years) ||Bachelor of Engineering Technology ||Managing Director & CEO ||10/10/2016 ||Nil ||11078380 ||Trident Group Limited |
|3 ||Mr. Narendra Kumar Agrawal (49 Years) ||Bachelor of Engineering ||Director Works ||15/12/2011 ||500 (0.00%) ||3758239 ||Century Paper and Pulp |
|4 ||Mr. Manoj Kumar Maurya (45 Years) ||M.Com ||Chief Financial Officer ||01/09/1998 ||Nil ||2443244 ||- |
|5 ||Mr. Sushant Arun Sinha (44 years) ||B. Tech P.G. Diploma in Production & Materials Management ||Mechanical Head ||20/03/2017 ||Nil ||2196799 ||Trident Group Limited |
|6 ||Ms. Navina John (41 Years) ||Master of Human Resource Management ||Admin Head ||17/05/2018 ||Nil ||2192822 ||Muthoot Finance Ltd. |
|7 ||Neeraj Kamra (47 Years) ||PGDM in Pulp & Paper ||Production Head ||25/02/2019 ||Nil ||2087813 ||Shree Rishabh Paper |
|8 ||Neetika Suryawanshi (39 Years) ||Chartered Accountant ||Chief Financial Officer ||10-07-2019 ||Nil ||1942388 ||Krezon |
|9 ||Upadhyayula Uma Vighneswara Ravikanth (39 Years) ||B.Tech M.B.A. ||Finance Head ||04/10/2018 ||Nil ||1838784 ||Dun & Bradstreet |
|10 ||Mr. Vivek Kumar Sharma (43 Years) ||M.Tech ||Instrumentation Head ||25/11/2016 ||Nil ||1783983 ||PT OKI Pulp & Paper Indonesia |
xv. No employeeof the Company receiving remuneration part of the financial year inexcess of the amount drawn by the Managing Director. No one was employed throughout thefinancial year or part thereof receiving remuneration in excess of the amount drawn by theManaging Director.
31. COMPANIES WHICH CEASED TO BE HOLDING SUBSIDIARY OR ASSOCIATE COMPANY
There is no holding subsidiary or associate Company of the Company.
32. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTSBY THE COMPANY
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Act are given in the notes to Financial Statements forming a part of thisannual report.
33. INVESTOR EDUCATION AND PROTECTION FUND
During the year the Company was not required to transfer any amount and shares toInvestor Education and Protection Fund ("IEPF").
34. GREEN INITIATIVES
In commitment to keep in line with the Green Initiative and going beyond it to createnew green initiatives electronic copy of the Notice of 40th Annual General Meetingtogether with Annual Report of the Company are sent to all Members whose email addressesare registered with the Company/Depository Participant(s). For members who have notregistered their e-mail addresses physical copies are sent through the permitted mode.
35. CAUTIONARY STATEMENT
Statements in this Directors' Report and Management Discussion and Analysis Reportdescribing the Company's objectives projections estimates expectations or predictionsmay be "forward-looking statements" within the meaning of applicable securitieslaws and regulations. Actual results could differ materially from those expressed orimplied. Important factors that could make difference to the Company's operations includeraw material availability and its prices cyclical demand and pricing in the Company'sprincipal markets changes in Government regulations Tax regimes economic developmentswithin India and the countries in which the Company conducts business and other ancillaryfactor.
Your Directors wish to place on record their appreciation for the contribution made bythe employees at all levels but for whose hard work and support your Company'sachievements would not have been possible. Your Directors also wish to thank itscustomers dealers agents suppliers investors bankers and other stakeholders for theircontinued support and faith reposed in the Company.
Your Directors also thank the Government of India Government of Uttar PradeshGovernment of other various States in India and concerned government departments/agenciesfor their cooperation.
Your Directors appreciate and value the contributions made by every member of Yashfamily.
For and on Behalf of the Board
| ||Pradeep Vasant Dhobale |
|Camp: Hyderabad ||Chairman |
|Date: 20th June 2020 ||DIN:00274636 |