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The Directors of your company are pleased to present the Directors Report together with Audited Financial Results of the company for the year ended 31st March, 2018.
1. FINANCIAL HIGHLIGHTS
Audited financial results for the year ended 31st March, 2018 are summarised below:
AUDITED FINANCIAL RESULTS
|(Rs in Cr.)|
|Particulars||Year ended 31st March, 2018||Year ended 31st March, 2017|
|Profit before interest and depreciation||77.32||72.97|
|Interest and finance charges||1.05||1.27|
|Profit before Exceptional Items||72.20||67.58|
|Exceptional & non-recurring items||-||-|
|Profit before tax||71.82||67.58|
|Provision for Income Tax||17.94||7.22|
|Profit after tax (PAT)||54.26||60.36|
|Earning per share (EPS)- in Rupees||34.76||38.67|
2. DIVIDEND & TRANSFER TO RESERVES
In view of improved performance of the company for the financial year 2017-18, your Directors are pleased to recommend a dividend of Rs. 2.50/- per equity share subject to approval of the Shareholders at the ensuing Annual General Meeting of the company. No amount of profits for the year is carried to General
3. STATE OF THE COMPANY AFFAIRS Review of operations 2017-18
Your company achieved slightly better volumes during the year. Our products also witnessed better export demand. Supportive market conditions coupled with Product-mix optimization & introduction of new varieties also contributed in excellent performance. We strive for a better product -mix leading to higher
Realization and better financial . performance
On the back of slightly better volumes, Your company has been able to report an improved financial performance. This was achieved through better cost management and product mix improvements.
Your company reported a Profit after tax of Rs. 54.26 Crores vis-a-vis Rs. 60.36 Crores for FY 2016-17.
There is no change in the nature of the business of the company during the year. Further, no material changes and commitments have occurred after the close of the year till the date of this Report, which may affect the financial position of the Company.
Expectations For FY 2018-19
Wood and energy price are exhibiting a rising trend. Further, ban on Industrial use of pet-coke and furnace oil by the Honble Supreme Court from 1st Nov., 2017 led to steep rise in fuel costs. Challenges such as increased imports from ASEAN under FTAs, upward trend in input costs etc may affect the business.
4. ANNUAL-RETURN EXTRACTS
Extracts of the Annual Return as provided in Section 92(3) of the Companies Act, 2013 in MGT-9 is attached as Annexure-I.
5. BOARD MEETINGS/AUDIT COMMITTEE
a) During the financial year 2017-18 four (4) meetings of the Board of Directors were held on 25th May, 2017, 14th Sept., 2017, 23rd Nov., 2017 and 8th Feb., 2018.
b) Audit & Risk Management Committee-The Company has constituted the Audit & Risk Management Committee of the Board pursuant to Section 177 of the Companies Act, 2013 and its terms of reference are in conformity with SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The composition of Committee is mentioned in the Corporate Governance Report.
6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review is presented in a separate section forming part of the Annual Report for 2017-18.
7. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES
Pursuant to Section 177 of the Companies Act, 2013, the company has established a Vigil Mechanism for directors and employees to report their genuine concerns to the company. The company oversees this Vigil Mechanism through the Audit & Risk Management Committee of the Board.
8. ENVIRONMENT, POLLUTION CONTROL AND SAFETY
STAR is committed to provide safe working conditions and healthy environment to all the stakeholders. Your company is accredited with ISO 14001: 2015,
ISO 9001 : 2015 and ISO 18001 :2007 which signifies adoption of integrated quality, environment and safety management systems to harmonize Industrial activities with environmental preservation with letter and spirit. Your company has all required environmental approvals from the Government authorities. Your company has been awarded Gold Award in paper sector for outstanding achievement in safety management by Greentech Foundation in its 16th Annual Safety Award-2017.
9. SOCIAL FARM FORESTRY
As in the past, your company continues to promote pulpwood plantations with active co-operation of the farmers. A total of 315 lacs (last year 318 lacs)seedlings were distributed during the FY 2017-18, covering an area of 12581 hectare. Social Farm forestry program not only helps in supplementing rural income but also augmenting raw material supply to the company.
10. FIXED DEPOSITS
The company has not invited any fixed deposits during the year and as such there has been no default in repayment of deposit or payment of interest thereon during the year. There were no outstanding fixed deposits as on 31st March, 2018. (Rs. Nil as on 31st March, 2017).
The company is in compliance with provisions of the Companies Act, 2013 and rules made thereunder in respect of deposits.
11. INTERNAL CONTROLS
The company has adequate internal control systems in place on the basis of which financial accounting is done and periodically financial statements are prepared. Such Internal control systems are adequate and operating effectively.
12. REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your company has a policy on Corporate Social Responsibility (CSR) which indicates potential CSR activities. The CSR Policy may be accessed on the Companys website at http://www.starpapers.com. The key philosophy of the Companys CSR initiative is to promote development through social and economic transformation. The composition of Committee is mentioned in the Corporate Governance Report.
The Report on CSR activities undertaken during the year 2017-18 is annexed herewith marked as Annexure II.
13. DIRECTORS/KEY MANAGERIAL PERSONNEL
Pursuant to Section 152 of the Companies Act, 2013, Mr. Shrivardhan Goenka (DIN-00030375) shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
The Board of Directors has re-appointed Mr. G.P. Goenka (DIN-00030302) as Executive Director of the company designated as Executive Chairman w.e.f. 20th May, 2018 for a period of three (3) years subject to approval of the shareholders at the ensuing AGM.
The Company has received declarations from all the Independent Directors of the Company confirmingthat they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI Listing Regulations, 2015. The companys familiarization program for Independent Directors is posted on the website of the company and can be accessed at http://www.starpapers.com/familarisation_prog.pdf. During the year, there was no change in Key Managerial Personnel (KMP) of your company.
14. NOMINATION AND REMUNERATION COMMITTEE/POLICY
The Board of Directors has constituted a Nomination & Remuneration Committee which follows the companys policy on directors appointment and remuneration including criteria for determining qualification, positive attitudes, independence of a director and other matters provided under section 178 (3) of the Companies
The gist of companys policy on nomination and remuneration is as under:
The Committee shall consider ethical standards of integrity, qualification, expertise and experience for appointment of Directors/KMP etc. and recommend to the Board of Directors. Directors/ KMP etc shall be appointed as per the procedure laid down in applicable laws. The Committee will recommend the remuneration to be paid to Directors/KMP etc requiring Committee approval as per statutory provisions. The level and composition of remuneration so determined by the Committee shall be reasonable and sufficientto attract, retain and motivate the appointee(s). Nomination and
Remuneration Policy of the company can be accessed from the company website -www.starpapers.com.
15. LOAN, GUARANTEE, INVESTMENTS ETC.
The company has not given any loan or guarantee or provided security in connection with any loan to any other body corporate during the year.
16. SUBSIDIARY/JOINT VENTUE/ASSOCIATE COMPANIES
No company has become or ceased to be your companys subsidiary/joint venture/associate company during the year.
17. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Particulars regarding energy conservation, technology absorption and foreign exchange earnings/outgo pursuant to Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are furnished as Annexure-III to this Report.
18. PARTICULARS OF EMPLOYEES AND REMUNERATION
Information in accordance with the provisions of Section 134(3)(q) and Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 regarding employees remuneration are given hereunder:
i) Name of the employee who is in receipt of remuneration of Rs. 102 lacs or more/ top ten employees of the company in terms of remuneration drawn for FY 2017-18:
|Name & Designation||Remuneration* recd.-(lacs)||Nature of employment||Qualification & experience||Date of commencement of employment||Age||Last employment held||% of equity shares held||Whether relative to director|
|1 Mr. G.P Goenka, Executive Chairman||234.07||Contractual||B. Sc., 56 years||20/05/2015||77 Y||Executive Director- Duncan Industries Ltd.||Nil||Yes, Father of Mr. Shrivardhan Goenka|
|2 Mr. Madhukar Mishra, Managing Director||210.07||-do-||B. Sc., DMS (Mgt.) 39 years||01/07/2001||61 Y||Sr. VP(Corporate Planning) -Dail Consultants Ltd.||Nil||No|
|3 Mr. P.K. Agrawal,Chief Financial Officer||28.41||-do-||Chartered Accountants 29 years||19/01/2007||58Y||Cheema Spintex Ltd.||Nil||No|
|4 Mr. Puneet Verma, GM-HR & Admin.||25.86||-do-||M.A; PGD (MSW) 23 years||11/04/2017||50Y||JCT Ltd., Phagwara||Nil||No|
|5 Mr. A.P. Garg GM-IT||24.65||-do-||M. Sc; PGD (Computer Sc.) 33 years||21/08/1991||54Y||Modi Ind. Ltd.||200 shares held||No|
|6 Mr. Dipak Vij GM- Mktg.||21.99||-do-||MBA-Mktg. 26 years||01/08/2004||48Y||Degussa A.G Germany.||Nil||No|
|7 Mr. .N.S. KhattraSr. Manager-Admin. (resigned on 14.04.18)||13.88||-do-||B. Sc., MBA 31 years||21/09/2017||56Y||-||Nil||No|
|8 Mr. G.K. Mishra AGM- Project & Development||13.44||-do-||M. Sc. (Chem.); M.S-Pulp & Paper Tech. 22 years||29/12/2014||51Y||NOR Group, Germany.||Nil||No|
|9 Mr. Pradeep Kumar, DGM-Paper Machine||13.16||-do-||B.Sc., PGD (Pulp & Paper); M.Tech. (Pulp & Paper) 25 years||22/06/1993||49Y||Star Paper Mills Ltd.||Nil||No|
|10 Mr. Amandeep Singh Manager-Purchase||12.82||-do-||BA., Diploma in Paper Tech., MBA 18 years||13/04/2017||42Y||West Coast Paper Mills Ltd.||Nil||No|
*including employers provident fund contribution.
a) Ratio of remuneration of each director to the median remuneration of employees
|Director||Director remuneration (DR) - Rs||Median remuneration (MR) of employee - Rs||Ratio (DR/MR)|
|Mr. G.P. Goenka||2,34,06,784||3,52,517||66.4|
|Mr. Shrivardhan Goenka||40000||3,52,517||0.11|
|Mr. Shiromani Sharma||3,00,000||3,52,517||0.85|
|Mr. C.M. Vasudev||1,80,000||3,52,517||0.51|
|Mr. M.P. Pinto||1,60,000||3,52,517||0.45|
|Ms. Savita L. Acharya||1,80,000||3,52,517||0.51|
|Mr. Madhukar Mishra||2,10,70,288||3,52,517||59.77|
b) % increase in remuneration of each director, CEO, CFO, CS in the financial year 2017-18
|Official Name||Year 2017-18 Remuneration- Rs In lacs||% increase in remuneration|
Directors are receiving only sitting fees for attending meetings.
|Chief Financial Officer||28.41||13%|
c) % increase in median remuneration of employees in the financial year 2017-18 was: 14% d) Number of permanent employees on the rolls of the company as on 31.03.18 was 564. e) Average increase in remuneration inter-alia depends upon the inflation, individuals performance, company policy, human resource demand-supply position, negotiations with trade unions, company performance etc. h) Average percentage increase in salaries of employees vis-a-vis managerial personnel - Average percentage increase in salaries of employees was 11.24% vis-a-vis 4 % increase in salary of managerial personnel for FY 2017-18. i) No director is getting any variable component of remuneration except commission to Executive Chairman and performance pay to the Managing Director are decided by the Board of Directors every year based on performance of the company, terms of appointment and applicable statutory provision. Remuneration is paid as per remuneration policy of the company.
19. PERFORMANCE EVALUATION
The company has a Policy on Nomination & Remuneration and Evaluation of directors etc. The Board of Directors evaluates its own performance, that of Committee(s) and individual director(s) on annual basis in the manner envisaged by the Nomination & Remuneration Committee (NRC) of the Board. Nomination & Remuneration Committee (NRC) also ensures that evaluation process is carried out by the Board every year as per the prescribed method.
20. HUMAN RESOURCES AND WELFARE
Your company has a structured approach to manage its human resources in line with changing needs of the organisation. Industrial relations remained harmonious during the year.
Your Directors further state that during the year under review, there was no case reported under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
21. DIRECTORS RESPONSIBILITY STATEMENT
As required under the provisions of Section 134(3)(c) Directors Responsibility Statement on preparation and presentation of these accounts is as per Annexure-IV to this Report.
22. CORPORATE GOVERNANCE
A separate report on corporate governance, along with a certificate from the statutory auditors confirming the compliance with corporate governance requirements has been annexed as Annexure-V to Directors Report.
The members at the last Annual General Meeting held on 14th Sept., 2017 appointed M/s Jain Pramod Jain & Co., Chartered Accountants, New Delhi as statutory auditors of the company to hold office from 78th AGM till the conclusion of 83rd AGM of the company.
24. COST AUDITORS
Pursuant to Section 148(3) of the Companies Act, 2013 read with the Rules made thereunder, the Board of Directors on the recommendation of Audit & Risk
Management Committee has appointed M/s K.B. Saxena & Associates, Cost Accountants, as the Cost Auditors of the Company for the financial year 2017-18.
25. AUDITORS REPORT
i) Statutory Audit:
There is no observation, qualification or adverse remark in the Audit Report for the year 2017-18.
ii) Secretarial Audit:
M/s D. Dutt & Co., company secretary in practice, secretarial auditor of the company has competed secretarial audit for FY 2017-18. Secretarial audit report is attached as Annexure-VI.
26. TRANSACTIONS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the company during the financial year with related parties were in the ordinary course of business and on arms length basis. During the year, the company had not entered into any contract / arrangement / transaction with related parties which could be considered material. Information pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies(Accounts) Rules, 2014 are given in Annexure-VII in Form AOC-2 and the same forms part of this report.
27. RISK MANAGEMENT
The Company is having Risk Management framework covering identification, evaluation and control measures to mitigate the identified business risks.
28. LISTING ON STOCK EXCHANGES
Your companys equity shares are listed on National Stock Exchange of India Ltd. (NSE) and The Stock Exchange, Mumbai (BSE). The company has paid the listing fees to the stock exchanges for the financial year 2017-18.
The Board of Directors place on record their gratitude for the excellent support and efforts put in by all the Stakeholders viz., employees, bankers, investors, dealers, suppliers and Government authorities.
|For and on behalf of the Board|
|Place : Kolkata||G. P. Goenka|
|Date : 21st May, 2018||Executive Chairman|