Pudumjee Paper Products Ltd Directors Report.

To the Members,

The Directors have pleasure in presenting before you the 6th Annual Report of the Company together with the Audited Financial Statements for the year ended 31st March, 2020. The accounts are prepared in accordance with the Companies (Indian Accounting Standards) Rule, 2015 (IND AS) prescribed under Section 133 of the Companies Act, 2013.

FINANCIAL RESULTS :

2019-2020 2018-19
(Rs. in Lakhs) (Rs. in Lakhs)
The Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) 6,092.07 4,082.88
Less:
i) Finance cost 769.33 795.74
ii) Depreciation/Impairment 1,217.61 725.07
The net profit before Tax 4,105.13 2,562.07
Less:
Provision for Current Tax 702.00 551.00
Provision/(Saving) for Deferred Taxation 681.88 336.83
Net Profit After Tax 2,721.25 1,674.24
Add:
Other Comprehensive Income/(Expense) (Net of Tax) (133.82) 37.55
The balance of Profit brought forward from last year 6,018.89 4,678.80
Total 8,606.32 6,390.59
Less:
Dividend Paid on Equity Shares 332.33 142.43
Tax Paid on Dividend 68.31 29.27
Transfer to General Reserve 200.00 200.00
Total 600.64 371.70
Balance proposed to be carried forward to next years accounts 8,005.68 6,018.89

DIVIDEND :

The Board of Directors at their meeting held on 24th February, 2020 declared an Interim Dividend of Rs. 0.20/- per equity Shares of the face value of Rs. 1/- each aggregating to Rs. 1,89,90,000/- plus applicable taxes thereon based on the profitability during the current year 2019-20. In view of the current situation arising out of Novel Corona Virus, the Board proposed that Dividend during the year, as above, be declared as a Final Dividend for the year 2019-20.

OPERATIONS :

The Directors have immense pleasure in reporting that during the year the Company has achieved record output at 68548 MTs of paper which is higher by about 8% over last year. The output would have been further higher by about 2000 MTs but for the Corona Virus induced ‘shutdown since 22nd March 2020. Consequently, the Company also achieved higher revenue at Rs. 604.48 crores as against Rs. 589.52 crores last year. As a result, the EBIDTA has also registered significant growth at Rs. 60.92 crores as against Rs. 40.83 crores last year, a rise of over 49%, which also includes gains made from higher productivity, judicious fibre management, cost reduction and lower pulp prices. The Profit Before Tax at Rs. 41.05 crores was also higher by about 60% over last year.

The Coater Project was installed and commissioned during the year. This project aimed to take the Company into "functionally coatedflpaper business for food baking/packaging applications, is gradually improving its capacity utilization.

The performance of Hygiene Products Division has, during the year, been steady and remained unaffected by the slowdown in the economy.

The sudden entry of Corona Virus into India has taken entire nation by surprise. The consequent nationwide ‘Lockdown has, severely disrupted economic activity in the short term and created uncertainty for the Medium Term. The production at its factory at Thergaon, Pune, remained suspended for 51 days during the first half of calendar year 2020, whereafter the production resumed in accordance with the conditions stipulated by the Government of Maharashtra while granting permission to it since 12th May, 2020. The production, whilst waiting for the demand to pickup is gradually increasing after the resumption and currently runs at about 50% capacity utilization. The Hygiene Products Division, which mainly focusses on institutional business is also witnessing similar trend which is currently operating at about 30% of normal level and is expected to gradually move upwards as demand picks up as more and more institutions reopen their establishments.

In view of prevailing uncertainty about growth in economy, the plans for relocation of Pune facility to Mahad and expansion thereat continues to be in abeyance. Consequently the Leave and Licence Agreement in terms of which the Companys facility is located at Pune for the land and buildings owned by AMJ Land Holdings Ltd. (Formerly known as Pudumjee Pulp & Paper Mills Ltd.) proposed to be renewed for a further period of 5 years with effect from 1st February, 2021 on the terms and conditions which may be mutually acceptable to the said owner of the land and buildings. Accordingly a resolution is proposed at the ensuing Annual General Meeting, which the Directors commend for your approval.

FIXED DEPOSITS :

As informed to you earlier, pursuant to the Scheme of Arrangement and Reconstruction (Demerger) as sanctioned by the Honble Bombay High Court, the "Fixed Deposits Liabilityflwas transferred from Pudumjee Pulp & Paper Mills Limited to the Company. Your Company holds fixed deposits accepted from Public with effect from the effective date of the scheme i.e. 1st February, 2016.

With effect from 05th July, 2017 the Company has started to accept fresh/renewal of fixed deposits from the public and as on 31st March, 2020 stood at Rs. 2,818.55 Lakhs as against Rs. 2,863.27 Lakhs at the end of the previous year (i.e. Fixed Deposit Liability).

During the year, the Company has accepted/renewed such deposits aggregating to Rs. 6.75 Lakhs, and all the deposits falling due for repayment during the year were fully repaid on maturity except unclaimed deposits numbering 34 with an amount of Rs. 16.60 Lakhs as at the end of the year.

There were no over dues on account of principal or interest on public deposits other than the unclaimed deposits as at the year end and there have been no default in repayment of deposits or payment of interest there on. There are no deposits which are not in compliance with the requirements of Chapter V of the Act read with Companies (Acceptance of Deposits) Rules, 2014.

AUDITORS :

i. STATUTORY AUDITORS :

M/s. J. M. Agrawal & Co., Chartered Accountants, have been appointed as Statutory Auditors of the Company at the 3rd Annual General Meeting to hold office up to the conclusion of 8th Annual General Meeting. M/s. J. M. Agrawal & Co., have given their consent to act as the Auditors of the Company till conclusion of 8th Annual General Meeting. The Company has received a Certificate from M/s. J. M. Agrawal & Co., to the effect that their appointment, would be within the prescribed limits under section 141 and other applicable provisions of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014 and that they are not disqualified for appointment. The Shareholders will be required to ratify the appointment of the auditors and fix their remuneration at the ensuing Annual General Meeting.

There is no adverse remark or qualification in the Statutory Auditors Report annexed elsewhere in this Annual

Report.

The Auditors have reported that there is no fraud on or by the Company noticed or reported during the year.

ii. SECRETARIAL AUDITOR:

Pursuant to provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, the Board has appointed Mr. I. U. Thakur, Company Secretary, Pune to conduct Secretarial Audit of the Company for the financial year 2019-20. The Secretarial Audit Report for the financial year 2019-20 is annexed hereto as Annexure-1.

There is no adverse remark or qualification in the Secretarial Audit Report.

The Company has complied with the applicable Secretarial Standards during the year issued by the Institute of Company Secretaries of India.

iii. COST AUDITOR:

Pursuant to provisions of Section 148 of the Companies Act, 2013, the Board has appointed Mr. Narhar K. Nimkar (Membership No. F-6493), Cost Accountants in Practice, Pune to conduct the audit of the Cost Records of the Company relating to "PAPERflfor the Financial Year 2019-20. As required under the Companies Act, 2013, a resolution seeking Shareholders approval for the remuneration payable to the Cost Auditors forms part of Notice convening the 6th Annual General Meeting of the Company.

DETAILS OF APPOINTMENT OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

During the year under review, the Shareholders of the Company at their 5th Annual General Meeting held on 27th July, 2019 was appointed Mr. Ved P. Leekha as a Non-Executive Non-Independent Director of the Company w.e.f. 27th July, 2019.

In terms of provisions of the Companies Act, 2013, Mr. Surendra Kumar Bansal, Non-Executive Non-Independent Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the applicable provisions of the Companies Act, 2013 and applicable regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and also confirming that they are not debarred from holding the office of Director by virtue of any SEBI order or any other such authority.

MEETINGS:

During the year 5 Board Meetings and 4 Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report, and forms part of this Annual Report. The intervening gap between the Meetings was within permissible period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

As required under the provisions of the Companies Act, 2013, the Board of Directors has constituted the Corporate Social Responsibility Committee. The major role of this Committee is to formulate, recommend, implement and monitor the CSR policy and activities to be undertaken by the Company to meet/contribute towards its corporate social responsibility objectives. The Board of Directors at its meeting held on 20th May, 2017 has constituted its CSR Committee. Some of the activities which will be undertaken by the Company itself or through an eligible trust are as under;

a) Setting up and/or maintaining old age homes/orphanage and supplementing nutrition and other essentials for underprivileged people,

b) Environmental Protection, c) Education and d) Development of Rural Infrastructure.

The CSR committee comprises of the following members:

Sr. No. Name of the Director Category Designation
1. Mr. Nandan Damani Non-Executive, Independent Director Chairman
2. Mr. Vinod Kumar Beswal Non-Executive, Independent Director Member
3. Mr. Basant Kumar Khaitan Non-Executive, Independent Director Member
4. Mr. Surendra Kumar Bansal Non-Executive, Non-Independent Director Member
5. Mr. Ved P. Leekha (w.e.f. 31.01.2020) Non-Executive, Non-Independent Director Member

The CSR Policy is also uploaded on the website of the Company viz: www.pudumjee.com.

During the year, the Company has allocated and disbursed total Rs. 60 Lakhs to M/s. M. P. Jatia, Charitable Trust to be spent on below mentioned the purposes:

• Setting up and/or maintaining old age homes/orphanage and supplementing nutrition and other essentials for underprivileged people ;

Environmental Protection;

Education and

Development of Rural Infrastructure

Also the Company has donated Rs. 10 Lakhs to PM CARES FUND to support for Novel Corona Virus relief efforts.

The other relevant disclosures as stipulated under the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in Annexure-2.

The entire allocated amount was deposited / transferred during the year with M/s. M. P. Jatia, Charitable Trust.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose are provided in Annexure-3 to this Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

A policy on Related Party Transactions has been adopted by the Board of Directors at its meeting held on 14th November, 2015 for determining the materiality of transactions with related parties and dealings with them. The said policy is available at the Companys website at www.pudumjee.com.The Audit Committee reviews all related party transactions quarterly and also as and when felt necessary.

Pursuant to Sections 134(3), 188(1) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 the particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 in Form AOC -2 are provided as Annexure-4.

ANNUAL EVALUATION OF PERFORMANCE OF BOARD DIRECTOR(S) AND COMMITTEE(S):

As required under Companies Act, 2013, a meeting of the Independent Directors was held on 31st January, 2020 to evaluate the performance of the Non-Independent Directors, wherein the evaluation of performance of the Non-Independent Directors, including the Chairman and also of the Board as a whole was made, against pre-defined and identified criteria.

The criteria for evaluation of the performance of the Independent Directors, Chairman and the Board, was finalized by the Nomination and Remuneration Committee in its meeting held on 22nd January, 2016, the said committee has carried out evaluation of the performance of every Director. The said criteria is available at the Companys website at www.pudumjee.com. The Board of Directors at their meeting held on 31st January, 2020 has evaluated the performance of Independent Directors. The performance of the Committee was also generally discussed and evaluated.

While evaluating, the principles and guidelines issued vide circular no. SEBI/HO/CFD/CMD/CIR/P/2017/004 of Securities and Exchange Board of India dated 5th January, 2017 on Board Evaluation have been taken into account.

FAMILIARISATION PROGRAMME:

The details of programmes for familiarisation of Independent Directors with the Company is available at the Companys website at www.pudumjee.com.

RISK MANAGEMENT POLICY:

In accordance with the requirements of the Act, the Company has adopted and implemented a Risk Management Policy for identifying risks to the Company, procedures to inform Board members about the risk assessment & minimization procedures, monitoring the risk management plan, etc.

VIGIL MECHANISM/WHISTLE BLOWER MECHANISM:

The Company promotes ethical behavior in all its business activities and has established a vigil mechanism for Directors and Employees to report their genuine concerns.

Pursuant to Section 177 of the Companies Act, 2013 read with Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a policy "Vigil Mechanism/Whistle Blower Policy", wherein the Employees/Directors/Stakeholders of the Company are free to report any unethical or improper activity, actual or suspected fraud or violation of the Companys Code of Conduct. This mechanism provides safeguards against victimization of Employees, who report under the said mechanism. During the year under review, the Company has not received any complaint under the said mechanism. The said policy is available at the Companys website at www.pudumjee.com.

PARTICULARS OF EMPLOYEES:

As required under Section 197(12) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the statement giving required details is given in the Annexure-5 and 5A to this report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

An Internal Complaints Committee (‘Sexual Harassment Committee) has been constituted, under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, to deal with the complaints, if any, from the Company and other Companies in the Pudumjee Group.

There was no complaint reported under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

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

As required under Section 134(3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, the information relating to Conservation of Energy, Technology Absorption and Foreign Exchange earnings & outgo is annexed as Annexure-6 and forms part of this Report.

REPORT ON CORPORATE GOVERNANCE:

Your Companys philosophy on Corporate Governance, sets the goal of achieving the highest level of transparency with integrity in all its dealings with its Stakeholders including Shareholders, Employees, Lenders and Others. A report on Corporate Governance along with a Certificate from the practicing Company Secretary regarding the Compliance of Conditions of Corporate Governance as stipulated under the Listing Regulations forms part of the Annual Report as Annexure-7.

EXTRACT OF ANNUAL RETURN:

Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as at 31st March, 2020 is annexed herewith as Annexure-8 to this report.

The extracts of the Annual Return of the Company can also be accessed on the Companys website at www.pudumjee.com.

REMUNERATION POLICY:

In accordance with the provisions of Section 178 and other applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated remuneration policy which inter alia, includes the criteria for determining qualifications, positive attributes and independence of Directors. The said policy may be referred to, at the Companys website i.e. www.pudumjee.com and is annexed hereto and marked as Annexure-9.

SIGNIFICANT AND MATERIAL ORDERS:

There is no significant and material order passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.

DIRECTORS RESPONSIBILITY STATEMENT:

The Directors confirm that:

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

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profits of the company for that period;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a going concern basis;

e) 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.

f) 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.

ACKNOWLEDGEMENTS:

Your Directors would like to express their sincere appreciation of the positive co-operation received from the Bankers, Customers, Vendors and Investors of the Company for their continued support during the year.

The Directors also wish to place on record their deep sense of appreciation for the dedication and contribution made by employees at all levels and look forward to their support in future as well.

Place : Pune A. K. Jatia, On Behalf of the Board of Directors,
Date : 12th June, 2020 Executive Chairman.