Balkrishna Paper Mills Ltd Directors Report.

To The Members of,

Balkrishna Paper Mills Ltd

Your Directors have pleasure in presenting the Seventh Annual Report of the Company along with Audited Financial Statements for the financial year ended 31st March, 2020.

1. FINANCIAL RESULTS:

The summary of the financial performance of the Company for the financial year ended March 31, 2020 compared to the previous year ended March 31, 2019, is given below:

( in Lakhs)

Particulars 2019-20 2018-19
Net Turnover and Other Income 19,632.68 21,445.35
Profit/(Loss) before Depreciation, and Tax (2,608.08) (3,703.02)
Less: Depreciation and Amortisation 662.11 660.89
Profit/(loss) before Tax (3,270.19) (4,363.91)
Less: Provision for Taxation:
Current Tax (MAT) (11.59) 0.00
Deferred Tax (Net) 197.43 (140.01)
Profit after Tax (3,456.03) (4,223.90)
Add/(Less):Other Comprehensive Income (net of taxes) (13.01) 10.00
Total Comprehensive Income/ (Expenses) for the year (3,469.04) (4,213.90)

COVID-19

During March, 2020, Government of India has imposed lockdown and shut all the economic activities due to COVID-19 pandemic, as Corona positive cases increased rapidly resulted into global crises. The Company has closed the factory and office to ensure health of the employees/workers and advised the employees to work from home. Your Company has faced cash flow shortages due to its inability to collect dues from customers during the lockdown period. Paper & Paper Board demand was affected significantly due to the lockdown, as industrial and commercial establishments inter se Hotel, Pharmaceuticals, readymade Garments etc., were shut down across the nation. This reduction in demand had an impact on the business of the Company, during the last week of March 2020. The impact on Paper and Paper Board demand is short term in nature, and is expected to improve as and when the lockdown is fully lifted.

2. OPERATIONS:

During the year under review, the Gross turnover and other Income of your Company was Rs 19,632.68 Lakhs as compared to 21,445.35 Lakhs in the previous year. The net Loss for the year stood at Rs 3,469.04 Lakhs against Loss of Rs 4,213.90 Lakhs in

the previous year.

3. DIVIDEND

Your Directors have not recommended any dividend for the financial year under review.

4. SHARE CAPITAL:

Authorized Share Capital:

During the year under review, your company had increased the Authorised Share Capital from Rs 36,00,00,000/- to Rs 118,00,00,000/-. The

Authorised Share capital consist of 3,30,00,000/- Equity Shares of Rs 10/- each, 25,00,000/- 9% Cumulative Redeemable Preference Shares of Rs 100/- each and 60,00,000/- Preference Shares of Rs 100/- each.

Allotment of Preference Shares:

Your Company had issued and allotted 60,00,000

- 6.5% Non-Cumulative Redeemable Preference Shares of Rs 100 each at par as fully paid up to the Promoters/Promoters Group on Preferential basis. The said shares are not listed with stock exchanges.

The issued, subscribed and paid up Share Capital of the Company as on 31st March, 2020 are as under:

- Equity Share Capital: Rs 10.74 Crore

- Preference Share Capital: Rs 85.00 Crore.

The Company has not issued shares with differential voting rights nor granted stock options & sweat equity. As on 31st March, 2020, none of the Directors of the Company hold convertible instruments in the Company.

5. REVISION OF FINANCIAL STATEMENT:

There was no revision of the financial statements for the year under review.

6. MANAGEMENT DISCUSSION AND ANALYSIS:

OUT LOOK:

The COVID-19 pandemic and the economic shutdown in advanced economies and other parts of the globe have disrupted billions of lives and are jeopardizing decades of development progress.

The global output growth in 2019 is estimated to be the slowest since the global financial crisis of 2009, arising from a geographically broad-based decline in manufacturing activity and trade. Stabilising, yet uncertain, trade tensions between two top countries of the world have contributed to the decline of world output and trade. The balance of risks to the global outlook remains on the downside.

The COVID-19 recession is the first since 1870 to be triggered solely by a pandemic. Amidst a weak environment for global manufacturing, trade and demand, Indias GDP growth in FY2019-20 slowed down to an 11-year-low of 4.2 per cent. In fact, Indias GDP for the fourth and final quarter of FY2019-20 fell to 3.1 per cent.

As per IPMA, Paper is one of the leading manufacturing sectors that have borne the brunt of imports the maximum. Several smaller paper mills, and even a few large ones, in India, have been forced to shut down their operations due to commercial unviability.

The speed and strength of the recovery will depend on the effectiveness of the support programs governments and the international community put in place now; and, critically, on what policymakers do to respond to the new environment.

Companys Overview

Your Company is engaged in manufacturing and marketing of quality Coated Duplex Boards.

As India travels through the path of economic uncertainty, the GDP growth in the fourth quarter becomes important as it includes the figures for one week of lockdown. Even before the coronavirus cases started to surge in India, the countrys economy was struggling through a prolonged economic slowdown. Due to high debt burden, slowdown in economy, underutilisation of manufacturing capacity, we could not increase the realisation rates in line with the expenses.

Your Company is looking forward with a progressive attitude to grow their presence and market share in the paper board industry in India and abroad.

Internal Audit and Control

Your Companys maintains all its records in ERP Systems and maximum approvals are routed through this system. The Company has laid down adequate systems and supported by the procedures for ensuring internal financial controls. The Company has appointed an external audit firm as Internal Auditors for day to day checking and monitoring the internal control measures. Internal Auditors are present at the Audit Committee Meetings where internal Audit Reports are discussed along with management comments and the final observation of the Internal Auditor.

Opportunities, Threats and Risk

The Company has been strengthening its risk management processes with the objective of enhancing organisational stability and predictability. Due to slowdown of the economy could have an adverse effect on the revenues of the Company. The existing Paperboard players alive to the emerging international threats, have been aggressively pursuing quality improvement programs, coupled with cost rationalization. Increasingly, more modern technologies are sought to be implemented, with added focus on environmental compliance.

Human Resources

The Company has prioritized the personal development of its employees and the creation of a future-ready leadership team. The Companys talent management system believes in internal grooming of our employees, preparing them to take on higher responsibilities. This helped the Company strengthen its internal talent pool and reduce its dependence on external recruitment. The industrial relations at both unit at Ambivali and Bhiwandi are cordial.

CAUTIONARY STATEMENT

The report contains forward looking statements describing expectations, estimates, plans or words, with similar meaning. The Companys actual results may differ from those projected, important factors that could make the difference to the Company operations include prices of raw material, power and finished goods, changes in Government regulations, economic developments globally and within India. The Company cannot guarantee that the assumptions and estimates in the forward looking statements are accurate or will be realised.

7. CORPORATE GOVERNANCE:

A report on Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015, together with Certificate from the Auditors of the Company confirming compliance of conditions of Corporate Governance as stipulated under the aforesaid regulations, forms part of the Annual Report.

8. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL

Forgo of Remuneration:

Shri Anurag Poddar, Chairman and Managing Director and Shri Ankit Poddar, Executive Director have forgone their monthly remuneration due to poor financial position of the Company with effect from 1st April, 2019 and continue to do so till further communication.

Directors appointment / reappointment:

The Board of Directors on the recommendation of Nomination and Remuneration Committee has approved the re-appointment and remuneration of Shri Anurag Poddar, Chairman and Managing Director, Shri Ankit Poddar, Executive Director and Shri Shrutisheel Jhanwar, Whole time Director & Chief Financial Officer for a further period of 3 years with effect from 11th February, 2021, subject to approval of shareholders. Necessary resolution have been put up in the Notice of ensuing AGM for approval of the members. Your Directors commend their re-appointment

Brief particulars of Directors being appointed/ re-appointed as required by the SEBI (LODR) Regulations, 2015 and Secretarial Standards on General Meetings are provided in the Annexure to the notice convening the AGM of the Company.

Declarations by Independent Directors:

All the Independent Directors of the Company have given requisite declarations that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and also Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015.

Also, your Company has received annual declarations from all the Independent Directors of the Company confirming that they have already registered their names with the data bank maintained by the Indian Institute of Corporate Affairs [“IICA”] as prescribed by the Ministry of Corporate Affairs under the relevant rules and that the online proficiency self-assessment test as prescribed under the said relevant rules is applicable to them and they will attempt the said test in due course of time.

9. NOMINATION AND REMUNERATION COMMITTEE:

The composition, role, terms of reference as well as powers of the Nomination and Remuneration Committee of the Company meets the requirements of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (LODR) Regulations, 2015.

Composition:

The Committee comprises of 3 Independent Directors.

The composition of the Nomination and Remuneration Committee* and category of members, is given in the table below:

Name of the Director Category
1 Shri Ramanlal B. Golecha Independent Director
2 Shri Harish N. Motiwalla Independent Director
3 Shri Rakesh N. Garodia Independent Director

* During the year under review, one Meeting was held on May 13, 2019.

Companys Policy on appointment and remuneration of Directors.

Remuneration Policy:

The Company has devised the Nomination and Remuneration Policy for the selection, appointment and remuneration of the whole time Directors, Key Managerial Personnel and Senior Management Personnel. The extract of Nomination and Remuneration Policy is provided in the Corporate Governance Report and forms part of this Annual Report.

The Companys policy on remuneration for Directors and Senior Management employees are displayed on the website of the company at www.bpml.in.

Appointment of Independent Directors.

All Independent Directors of the Company are appointed for a term of 5 (five) years. Accordingly, the Independent Directors viz. Shri Ramanlal B. Golecha hold office up to 19th November, 2022 and Shri Harish N. Motiwalla, Shri Rakesh N. Garodia and Smt. Meghna S. Shah hold office up to 10th February, 2025.

Criteria for appointment of Independent Directors.

The Independent Directors shall be of high integrity with relevant experience and expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management, so as to have a diverse Board.

Performance Evaluation.

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Nomination and Remuneration Committee has laid down the criteria for evaluation of the performance of individual Directors, the Board as a whole. Evaluation of performance is undertaken annually.

The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors at a separately convened meeting. The performance evaluation of the Independent Directors was carried out by the entire Board (excluding the Director being evaluated). The Company has implemented a system of evaluation on the basis of a structured questionnaire which comprises evaluation criteria taking into consideration various performance related aspects.

The Directors expressed their satisfaction with the evaluation process.

Remuneration of Non-Executive Directors : The

Non- executive Directors shall be entitled to receive remuneration by way of sitting fees, reimbursement of expenses for participation in Board/Committee meetings and commission, if any, after approval of the members.

10. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3)(c) and 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, your Directors to the best of their knowledge hereby confirm that :

a. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

b. that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2020 and of the Profit of the Company for that year under review;

c. that 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;

d. that the Directors have prepared the accounts for the financial year on going concern basis;

e. the Directors have laid down internal financial

controls, which are adequate and were operating effectively.

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

11. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES:

a. BOARD MEETINGS:

The Board of Directors met 4 times during the year on the following dates in accordance with the provisions of the Companies Act, 2013 and also rules made thereunder.

May 13, 2019, July 30, 2019, October 24, 2019, January 31, 2020.

In addition to the above, Independent Directors Meeting was also held on March 16, 2020.

b. COMMITTEES OF THE BOARD:

The Board has the following Committees:

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders Relationship Committee;

4. Share transfer Committee.

5. Finance Committee

The details of these Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.

12. EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return in Form No. MGT - 9 for the financial year ended 31st March, 2020 made under the provisions of Section 92(3) of the Act is attached as Annexure I which forms part of this Report and is also available on the Companys website at www.bpml.in .

13. FIXED DEPOSITS

During the year under review, your Company has not accepted any fixed deposits and there were no unclaimed deposits or interest thereon as on 31st March, 2020.

14. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to Financial Statements.

15. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has framed a Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The details of the Policy are given in the

Corporate Governance Report and the policy is posted on the Companys website at www.bpml.in.

16. RELATED PARTY TRANSACTIONS :

All related party transactions that were entered into during the financial year were in the ordinary course of business and were on an arms length basis. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other related parties which may have a potential conflict with the interest of the Company at large.

All related party transactions for the year are placed before the Audit Committee as well as before the Board for approval. The transactions entered into with related parties are reviewed on a quarterly basis by the Audit Committee.

The policy on Related Party T ransactions as approved by the Audit Committee and Board is uploaded on the Companys website at www.bpml.in.

The details of the transactions with Related Parties to be provided in Form AOC-2 is annexed herewith as Annexure-II.

Members can refer to Note No. 37 to the Financial Statements which set out related party disclosures.

17. RISK MANAGEMENT FRAMEWORK:

The Board of Directors of the Company has Risk Management Framework to avoid events, situations or circumstances which may lead to negative consequences on the Companys businesses, and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Risk Management Policy is available on Companys website at www.bpml.in.

18. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL

During the year under review, there were no orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Companys operations in future.

19. DISCLOSURES UNDER SECTION 134(3)(l) OF THE COMPANIES ACT, 2013:

There were no material changes and commitments which could affect the Companys financial position have occurred between the end of the financial year of the Company and date of this report.

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

The particulars as required under the provisions of Section134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure III which forms part of this Report

21. AUDITORS

The matters related to Auditors and their Reports are as under:

a. OBSERVATIONS OF STATUTORY AUDITORS ON ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2020:

The observations made by the Statutory Auditors in their report for the financial year ended 31st March 2020 read with the explanatory notes therein are self- explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

Further, there were no adverse remarks or qualifications of reservations in the audit report submitted by auditors.

b. COST AUDITORS:

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with Notifications/ Circulars issued by the Ministry of Corporate Affairs from time to time, the Board of Directors have appointed M/s. K. G. Goyal & Associates, Cost Accountants, as a cost auditor of the Company for the Financial Year 2020-21.

The remuneration to be paid to Cost auditors require ratification by the shareholders and accordingly necessary resolution for ratification for seeking approval of members is included in Notice of ensuing AGM.

c. SECRETARIAL AUDITORS.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed GMJ & Associates, Company Secretaries in Practice to undertake Secretarial Audit for the financial year 2019-20. The Secretarial Audit Report is annexed herewith as Annexure - IV.

There is no Secretarial audit qualification for the year under review.

M/s GMJ & Associates, Company Secretaries has issued certificate dated 17th July, 2020 certifying that none of the Directors on the Board of the Company during the Financial year 201920 have been debarred or disqualified from being appointed or continuing as directors of the company by SEBI, MCA or any such other Statutory authority.

22. INDUSTRIAL RELATIONS:

Industrial relations with staff and workmen during the year under review continued to be cordial.

23. Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013:

The Company has formulated and implemented a policy of prevention of sexual harassment at the workplace with mechanism of loading/redressal complaints. During the year under review, there were no complaints reported to the Board.

24. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:

The information required pursuant to Section 197 of the Companies Act, 2013 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company will be provided upon request in terms of section 196 of the Act, the Report is being sent to all the Shareholders of the Company and other entitled thereto, excluding the information particulars of which is available for inspection by the Members at the Registered office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Members interested in obtaining a copy thereof, may write to the Company Secretary in this regard.

25. INSURANCE

All the properties/assets including buildings, furniture/ fixtures, and insurable interests of the Company are adequately insured.

26. ACKNOWLEDGMENT

Your Directors take this opportunity to thank the Customers, Suppliers, Shareholders, Bankers, Dealers, Agents, Employees and Government and Semi-Government Authorities for their consistent support and encouragement to the Company.

For and on behalf of the Board of Directors
Anurag P. Poddar
Chairman & Managing Director
Place : Mumbai DIN: 00599143
Date : 17th July, 2020