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सेशासयी पेपर एंड बोर्ड्स निदेशकों की रिपोर्ट, सेशासयी पेपर एंड बोर्ड्स निर्देशकों द्वारा रिपोर्ट

सेशासयी पेपर एंड बोर्ड्स

बीएसई: 502450  |  NSE: SESHAPAPER  |  ISIN: INE630A01016  |  Paper

खोजें सेशासयी पेपर एंड बोर्ड्स कनेक्शन Mar 18
निदेशकों की रिपोर्ट वर्षांत : Mar '19

DIRECTORS'' REPORT

The Directors hereby present their Fifty Ninth Annual Report and the Audited Accounts for the year ended 31st March 2019:

The Company has adopted the Indian Accounting Standards (IndAS) from Financial Year 2017-18 as mandated. Accordingly, the financial statements for current year, including comparative figures of previous year are based on IndAS and in accordance with the recognition and measurement principles stated therein, as well as other accounting principles generally accepted in India. While this has no major impact for the Statement of Profit and Loss, there is and would be periodical impact for Other Comprehensive Income in measuring and restating investments at fair value.

WORKING RESULTS

2018-19 (in tonnes)

2017-18 (in tonnes)

Production

209015

1 88 203

Sales

2 07 971

1 86 595

Revenue from Operations

(Rs crores)

(Rs crores)

Sales and Other Operating Income

1325.24

1117.79

Less: Excise Duty and Excise Cess

..

13.14

1325.24

1104.65

Other Income

23.06

9.40

Total Revenue

1348.30

1114.05

Profit before interest, depreciation, exceptional item and tax

318.90

216.59

Finance Cost

13.81

14.30

Depreciation

33.78

31.94

Exceptional Item

-

4.84

Profit before tax

271.31

175.19

Provision for current

tax

58.20

36.02

Transfer to / (from)

Deferred Tax

23.11

16.28

Net Profit

190.00

122.89

DIVIDEND

The Board of Directors recommend payment of Dividend at Rs 20 (twenty) per Equity Share, absorbing a sum of Rs 25.23 crores.

As per the provisions of the Income tax Act, 1961, no tax will be deducted at source on dividends distributed. However, the Company will bear the tax on the dividend distributed, amounting to Rs 5.18 crores.

As per Ind As 10 Events after the reporting period, Proposed Dividend on Equity Shares and Corporate Tax on dividend being a non adjusting event at the Balance Sheet date, is not recognised as a liability in the accounts for the year ended March 31, 2019. The same will be recognised in the year of payment, viz., year ending March 31, 2020.

APPROPRIATIONS

2018-19 (Rs crores)

Net profit for the year

190.00

Add: Surplus brought forward from the previous year

89.21

279.21

Less:

Re-measurement of Defined Benefit Plans

0.02

Dividend paid during the year (For Financial Year 2017-18)

18.92

Tax on Dividend distribution

3.89

Transfer to General Reserve

100.00

Balance carried forward

156.38

OPERATIONS PRODUCTION

During the year, the production at Unit : Erode was 1 32 379 tonnes, as compared to 1 21 594 tonnes, produced in the previous year. The production was higher by 10 785 tonnes, compared to the previous year due to improved performance of Paper Machines.

Unit: Erode also produced 32138 tonnes of Wet Lap Pulp to augment the Pulp requirements of Unit: Tirunelveli.

Unit : Tirunelveli produced 76 636 tonnes of Paper during the year, as compared to 66 609 tonnes, produced in the previous year. The production was higher by 10 027 tonnes, compared to the previous year mainly due to increased machine speed and basis weight optimisation.

Overall Production for the Company was 209015 tonnes of Paper and Boards for the year, as compared to 1 88 203 tonnes produced, in the previous year.

SALES

After taking into account 1040 tonnes towards in-house consumption, Unit: Erode sold 1 31 339 tonnes, against the production of 1 32 379 tonnes and achieved zero stock at the end of the financial year.

In addition, Unit: Erode, as part of its trading activity, had sold petroleum products valued at Rs 26.88 crores and 61 tonnes of Note Books.

Closing Stock of Traded Goods was 11 tonnes, as on March 31, 2019.

Unit : Tirunelveli sold 76 632 tonnes after taking into account 4 tonnes towards in-house consumption and achieved zero stock of finished goods at the end of the financial year.

In addition, Unit : Tirunelveli as part of its trading activities had sold 644 tonnes of Note Books. Closing stock of traded goods was 205 tonnes as on March 31, 2019.

The overall sale of Paper and Paper Boards effected by the Company during the year, was 2 07 971 tonnes, compared to 1 86 595 tonnes, sold during the previous year.

PROFITABILITY

The Revenue from Operations of the Company for the year was Rs 1325.24 crores, as against Rs 1117.79 crores, in the previous year.

Profit before interest, depreciation, exceptional item and tax was Rs 318.90 crores, for the Company as a whole, compared to Rs 216.59 crores, in the previous year.

After absorbing interest and depreciation of Rs 13.81 crores, Rs 33.78 crores respectively, the Profit before tax was Rs 271.31 crores, as compared to Rs 175.19 crores, in the previous year.

The Company registered commendable financial results contributed by all round operational improvements both in Unit: Erode and Unit: Tirunelveli. Major factors that had contributed to improved financial performance during the year were:

0 Higher De-inked Pulp production enabled replacement of costly imported pulp.

0 Optimisation in Raw Material Mix and Chemicals.

0 Higher sales realisation due to better Product mix.

0 Improved paper market conditions and favourable exchange rate.

0 Higher Other income.

0 Lower Interest and Financing Charges due to repayment of Term Loans and non-utilisation of working capital limits.

For the year ended 31st March 2019, the tax liability under the normal method works out to Rs 79.49 crores after deduction under Section 80-IA of the Income tax Act, 1961. The tax liability under MAT works out to Rs 58.20 crores. Consequently, the Company became liable for the net current tax

liability of Rs 79.49 crores. The Company is eligible to utilise Rs 21.29 crores as MAT Credit Entitlement and consequently the net payment of tax will be Rs 58.20 crores.

The net Deferred Tax liability for the year ended March 31, 2019 was Rs 23.11 crores.

In the result, profit after tax for the year ended March 31, 2019 was Rs 190.00 crores, as compared to Rs 122.89 crores, in the previous year.

FINANCE

Instalments of Term Loans and interest dues on Term Loans and Working Capital borrowings were paid on or before the respective due dates.

INTEREST FREE SALES TAX DEFERRAL LOAN

The Company repaid Rs 3.89 crores during the year and the balance outstanding as on March 31, 2019 was Rs 14.85 crores.

MARKET CONDITIONS

The year under review commenced with a strong demand for Copier grades, as supplies from the domestic mills together with the limited imports could not meet the total demand, resulting in a gap in supplies.

Demand for other white grades, like Creamwove and Maplitho, exhibited a better demand than the last year permitting opportunities for price revisions.

Flow of imported Copier grades and Maplitho grades gradually moderated when the Customs Department imposed an Anti-dumping Duty on imported Copier, if the landed price was less than USD 855, on 4th December 2018. The Anti-dumping Duty payable is equal to the difference between the bench mark price and the actual price of import, in case it was lower than the bench mark price.

With the prices of imported coated paper and boards being lower than the domestic prices, demand for MG Boards and certain Yankee grades was poor throughout the year.

Demand picked up for the white grades in Q-4 more gradually when compared to earlier years.

Zero stock in Q-4 this year was achieved with relative ease, at the end of the financial year, for the 21st time in the last 25 years.

EXPORT PERFORMANCE

Unit : Erode exported 16 993 tonnes during the year, as compared to 14446 tonnes, exported during 2017-18. The export proceeds in Foreign Currency for the year 2018-19 amounted to US$ 15 211 167 and Euro 160 056. In Rupee terms the value of exports amounted to Rs 107.03 crores. Export constituted around 12.84% of the Production.

Unit : Erode also sold 62 tonnes during the year, under deemed exports whose proceeds amounted to Rs 0.40 crores.

Unit: Tirunelveli exported 17825 tonnes of Paper during the year, as against 14484 tonnes exported during 2017-18. The export proceeds in Foreign Currency amounted to US $ 15541015. In Rupee terms the value of exports amounted to Rs 111.01 crores. Export constituted around 23.26% of the Production.

Unit: Tirunelveli also sold 641 tonnes during the year, under deemed exports whose proceeds amounted to Rs 3.91 crores.

TREE FARMING ACTIVITY

The Company continues to provide quality Clonal Seedlings of Eucalyptus, as well as Casuarina Seedlings, at subsidised rates, to interested farmers and assist them with technical help to achieve higher yields.

In addition, the Company had identified Melia-Dubia, a high yielding fast growing species, suitable for Pulp production. The Company has been providing Melia- Dubia Clones to interested farmers.

Technical Support to the farmers for this initiative is being provided in association with the Department of Tree Breeding of Forest College and Research Institute, attached to Tamil Nadu Agricultural University, Coimbatore, through a Collaborative Research Project.

In accordance with the Company''s vision to achieve wood positive status, over thirteen crore Seedlings (Clonal Eucalyptus Seedlings, bare-rooted Casuarina Seedlings and Melia Dubia Clones) were made available during the year, to farmers at subsidised rates, for planting in about 16000 acres of land.

ISO 9001 /ISO 14001 ACCREDITATION

The Company''s Quality Management Systems and Environment Management Systems continue to be covered under ISO 9001 and ISO 14001 Accreditations.

Both ISO 9001 and ISO 14001 Standard have undergone revision to 2015 Standards which lays emphasis on role of top management, adoption of risk management and change management. All these changes are to facilitate sustainability in business performance.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and Safety Assessment Series 18001 (OHSAS) which is an international standard that facilitates management of Occupational Health and Safety risks associated with the business of the organisation.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

The Company has been certified under three Standards of FSC, viz. FSC-STD-40-004, FSC-STD-40-005 v2-1 and FSC-SSTD-40-003 v1-0. By this, the Company assures its stakeholders that the wood and wood fibre (pulp) purchased by it are traceable to responsibly managed plantations and that adequate document controls are in place to ensure identification and traceability throughout the Chain of Custody. This also means that the

Company is capable of manufacturing and selling FSC Pure and FSE Mixed Products in the domestic and international markets.

AWARDS

The Company won the following Awards and recognitions during the year

0 Tamil Nadu Pollution Control Board Green Award for the year 2017 for the excellent contribution to the Environmental protection.

0 CII Excellent Energy Efficiency Unit Award for the year 2018.

0 Best maintained outlet during 2017-18 Award for Namakkal Region given by Indian Oil Corporation Limited to the petroleum products Retail outlet operated by the Company.

EXPORT HOUSE STATUS

The Company continues to be accredited with Star Export House Status by the Government of India, Ministry of Commerce, Directorate General of Foreign Trade, in recognition of its export performance.

DEPOSITORY SYSTEM

As on March 31, 2019, 9 001 Shareholders were holding Shares in Demat form and 99 30518 shares have been dematerialised, representing 78.73% of the total Equity Share Capital of the Company.

SUBSIDIARY

M/s Esvi International (Engineers & Exporters) Limited (Esvin) is a wholly owned subsidiary of the Company. Currently, Esvin holds properties and derives property income.

MILL DEVELOPMENT / EXPANSION PLAN

As advised last year, the Company had embarked on the implementation of two Projects viz. Mill Development Plan II at Unit : Erode and Mill Expansion Plan at Unit: Tirunelveli.

Unit: Erode

The Company has completed Phase - I of the Mill Development Plan II (MDP - II) in the year 2017-18, at a cost of Rs 75 crores. Phase - II of MDP - II, with an estimated project cost of Rs 50 crores, is nearing completion.

The successful implementation of MDP - II has helped the Company to increase the Production of Paper to 132 000 tpa and the production of Unbleached Wood Pulp to 1 45 000 tonnes per annum, in Unit: Erode.

In order to further increase production of Paper and Pulp in its Unit : Erode, the Company has drawn up Mill Development Plan -III (MDP-III) at an estimated cost of Rs 315 crores. The implementation period of this project is estimated at 9 months to 21 months and is expected to be completed in phases.

The Techno Feasibility Study of the project has been completed and the Board of Directors of the Company, after detailed appraisal and review of the Project report, have approved the Project. The work on the Project has since commenced in the Financial Year 2019-20.

The MDP-III at Unit: Erode will consist of:

0 Upgradation and Modernisation of the Paper Machines to increase the Capacity from 1 32 000 tonnes per annum to 1 65 000 tonnes per annum.

0 Upgradation and Modernisation of the RDH Pulp Mill to increase the Capacity to 1 54 000 tonnes per annum.

0 Upgradation of the Recovery Island and

0 Augmentation of Waste Water Treatment Plant.

Unit: Tirunelveli

Mill Expansion Plan in Unit : Tirunelveli, undertaken at a cost of Rs 75 Crores, is nearing completion.

Film Press and Top Wire Former were installed in the Paper Machine to help in improving the quality of paper as well as stepping up production. Re-commissioned De-Inking Plant helps us to step up pulp production and reduce use of expensive imported pulp. Re-build of Power Boiler has also been completed to generate additional power. Waste Water Treatment Plant has been augmented to handle higher Wetlap Pulp Product.

Considering that the Paper Industry is expected to grow at a CAGR of 5 - 6 % over the next few years and considering the demand supply gap, that is currently prevailing in India for high quality paper, to continue, Company is actively pursuing both Organic and Inorganic Growth opportunities.

CURRENT YEAR (2019-20)

In Unit : Erode, the Production during April 2019 was 10611 tonnes, as compared to 9 712 tonnes, produced during April 2018. In Unit: Tirunelveli, the Production was 5 355 tonnes in April 2019, as against 5 058 tonnes in April 2018. The overall Production for the Company, for the month of April 2019, was 15 966 tonnes. Total Value of Production, during April 2019, amounted to Rs 88.67 crores, compared to Rs 77.60 crores, during April 2018.

During April 2019, 782 tonnes of paper, valued at Rs 6.14 crores were exported.

Both Mettur Dam (for Unit : Erode) and Papanasam Dam (for Unit: Tirunelveli) have poor storage level. The Barrage across River Cauvery downstream of Unit: Erode and scattered rains in southern parts of Tamilnadu have helped the two units to maintain uninterrupted production.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvement of the environment. In Unit: Erode, the Power Boilers and Recovery Boilers are equipped with Electro Static Precipitators, to arrest dust emissions.

The Company has installed and operates an Anaerobic Lagoon, for high BOD liquid effluents and a Secondary Treatment System, for total Mill effluent. These facilities are operating efficiently, enabling the Company to comply with the Pollution Control norms prescribed by the Pollution Control Authorities, on a sustained basis. The treated effluent water continues to be utilised for irrigating nearby sugar cane fields.

Installation of a new Electro Static Precipitator in the Chemical Recovery Boiler, under Mill Development Plan, has helped the Company in controlling emission.

A Twin Roll Press has been added in the Wood Pulp Line to control and reduce COD in waste water.

Alkaline Scrubbing has been provided for the non-condensable gasses for elimination of emission of mal-odorous gases.

The Company has implemented several projects under Mill Development Plan to reduce consumption of water as well as energy. Waste water generation in the Mill has been brought down significantly.

In accordance with the directives of CPCB, adequate monitoring facility has been provided for air emissions and liquid effluent discharge. Online connectivity has been provided for monitoring of emissions and discharges, real-time by both CPCB and TNPCB.

In addition, further treatment facility has been proposed for waste water under the Mill Development Plan.

Unit: Tirunelveli is well equipped with efficient Electro Static Precipitator for the Power Boiler and has an extensive green cover. Its treated waste water, after recycling, is used to irrigate the Company owned lands. As part of the Mill Expansion Plan, the Waste Water Treatment Plant has been augmented with a Dissolved Air Floatation Cell and Anaerobic Digester.

MANAGEMENT''S DISCUSSIONS AND ANALYSIS REPORT

The Report on Management''s Discussion and Analysis, as required under Clause 49(VIII)(D) of the Listing Agreement with Stock Exchanges covering industry structure and developments, opportunities and threats, outlook, discussion on financial performance, etc., is contained in Management Discussion and Analysis Report that forms an integral part of this Report and annexed as Annexure -1.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 and Schedule V to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Corporate Governance Report, together with the Certificate from the Company''s Auditors confirming the compliance of conditions on Corporate Governance is given in Annexure - II.

DISCLOSURE REQUIREMENTS UNDER SECTION 134(3) OF THE COMPANIES ACT, 2013

Section 134(3) of the Companies Act, 2013 requires the Board''s Report to include several additional contents and disclosures compared to the earlier law. Most of them have accordingly been made in the Corporate Governance Report at appropriate places that forms an integral part of this Report.

EXTRACT OF THE ANNUAL RETURN

The details forming part of the Extract of the Annual Return in Form MGT - 9, is given in Annexure - III.

DIRECTORS'' RESPONSIBILITY STATEMENT

While preparing the annual accounts, the Company has adhered to the following:

0 Applicable Accounting Standards, referred to in Section 129(1) of the Companies Act, 2013, have been followed.

0 The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the profit of the Company for the said period.

0 The Directors have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

0 The Directors have prepared the annual accounts on a going concern basis.

0 The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

0 The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS

During the year, the Company provided a short term Inter Corporate Loan of Rs 0.60 crore to SPB Projects and Consultancy Limited for a period of twelve months.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

The Corporate Governance Report contains relevant details on the nature of Related Party Transactions (RPTs) and the policy formulated by the Board on Material RPTs. Particulars of Contracts or Arrangements with Related Parties referred to in Section 188(1) of the Companies Act, 2013 is furnished in accordance with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC - 2 as Annexure - IV.

MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of business of the Company during the year.

There are no material changes and commitments in the business operations of the Company since the close of the financial year on 31st March 2019 to the date of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in Annexure - V.

CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act, 2013 mandates every Company having minimum threshold limit of net worth, turnover or net profit as prescribed to constitute a Corporate Social Responsibility Committee of the Board, formulation of a Corporate Social Responsibility Policy that shall indicate the activities to be undertaken by the Company as specified in Schedule VII to the Companies Act, 2013 and duly approved by the Board, fix the amount of expenditure to be incurred on the activities and monitor the CSR Policy from time to time.

Since your Company falls within the minimum threshold limits, constituted a CSR Committee of the Board and formulated a CSR Policy. The CSR Report, forming part of this Report, is furnished in Annexure - VI.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197, read with Rule 5 of the Companies (Appointment and Remuneration of Management Personnel) Rules, 2014, is furnished in Annexure - VII.

CASH FLOW STATEMENT

As required under Regulation 53 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Cash Flow Statement is attached to the Balance Sheet.

INDUSTRIAL RELATIONS

Relations between the Management and Employees were cordial throughout the year under review.

DIRECTORS

During the year, Tamilnadu Government withdrew the nomination of Mr Md Nasimuddin, IAS and in his place nominated Sri Shambhu Kallolikar, IAS, the Principal Secretary to Government, Environment and Forests Department, as its Nominee Director on the Board of our Company.

Sri R V Gupta stepped down from the Board of our Company at the close of business hours on March 31, 2019 after a long tenure of nearly 16 years as a Director on the Board of our Company.

Your Directors place on record the valuable services rendered by Sri R V Gupta and Mr Md Nasimuddin, IAS, during their tenure as Directors of the Company.

Sri Mohan Verghese Chunkath, IAS (Retd.) was appointed as an Independent Director on the Board of our Company for a period of five years with effect from April 01, 2019.

All the Independent Directors have given the declaration that they meet the criteria on independence, as laid down under

Section 149(6) of the Companies Act, 2013. The performance evaluation of Independent Directors has been done by the entire Board of Directors, excluding the Director being evaluated, at the Board Meeting held on 27th March 2019. The Board on the basis of such performance evaluation determined to continue the term of appointment of all the Independent Directors who have been appointed by the Company for a fixed tenure till 31st March 2019 for three Directors and 28th September 2019 for two Directors.

AUDITORS

M/s Maharaj N R Suresh & Co., and M/s R Subramanian and Company LLP Chartered Accountants continue to be the Statutory Auditors of the Company.

Particulars of Statutory Auditors, Cost Auditors, Internal Auditors and the Secretarial Auditors have been given in the Corporate Governance Report that forms an integral part of this report. Secretarial Audit Report, as required by Section 204(1) of the Companies Act, 2013, is attached in Annexure - VIII.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the tireless efforts of all the Executives and Employees of the Company for their commendable performance in achieving excellent financial results. The Directors also express their sincere thanks to the Government of India, Government of Tamilnadu and Commercial Banks, for their understanding, guidance and assistance and Dealers, Customers, Suppliers and Shareholders, for their excellent support, at all times.

On behalf of the Board

N GOPALARATNAM

Chairman

Chennai

May 25, 2019

स्रोत: रेलीगरे टेचनोवा

न्यूज़ फ़्लैश

  • MARKET CUES : FIIs ने कैश में `60.18 Cr की बिकवाली की
  • MARKET CUES : DIIs ने कैश में `425.98 Cr की बिकवाली की
  • MARKET CUES : FIIs ने F&O में `1569.80 Cr की बिकवाली की
  • MARKET CUES : इंडेक्स फ्यूचर्स में `528.06 Cr की बिकवाली
  • MARKET CUES : इंडेक्स ऑप्शंस में `720.14 Cr की बिकवाली
  • MARKET CUES : स्टॉक फ्यूचर्स में `367.32 Cr की बिकवाली
  • MARKET CUES : स्टॉक ऑप्शंस में `45.72 Cr की खरीदारी
  • MPC MEET ON CREDIT POLICY : आज दोपहर 12 बजे क्रेडिट पॉलिसी का एलान
  • JEFFERIES ON GODREJ PROPERTIES : Buy रेटिंग, लक्ष्य बढ़ाकर `1,040/Sh
  • HDFC : आज से खुलेगा QIP, फ्लोर प्राइस `1,838.94/Sh

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