West Coast Paper Mills Ltd Directors Report.

Your Directors are pleased to present the 65th Annual Report of your Company, together with the audited financial statements for the year ended 31st March 2020.

FINANCIAL RESULTS:

Financial Results of the Company for the year under review along with the figures for previous year are as follows:

Particulars 31st March, 2020 31st March, 2019
(RS in Crores)
Profit Before Finance Cost, Depreciation and Tax (PBIDT) 528.79 529.92
Finance Cost 72.04 29.24
Profit Before Depreciation and Tax 456.75 500.68
Depreciation 166.37 175.26
Tax Expenses (Including Deferred Tax) 13.98 29.36
Profit After Tax (PAT) 276.40 296.06
Other Comprehensive Income (Net of Tax) (4.71) 0.25
Total Comprehensive Income 271.69 296.31

DIVIDEND:

Interim Dividend of 5.00 per equity share (250%) for the financial year 2019-20 has been paid on 26.03.2020. Through Notice of 65th Annual General Meeting for the year ended 31st March, 2020, seeks shareholders approval for treating the same as final dividend.

PERFORMANCE:

The performance of the Company during the year under review has been satisfactory. The production & working during this year got impacted due to planned shut of ENMAS Recovery Boiler for 19 days in Oct. Finance Cost was higher due to NCDs /Loan taken for APL acquisition. Due to COVID 19 in March 2020, production of 5924 MT and Sales of 10136 MT got impacted.

Due to COVID 19 full plant was stopped from 26.03.2020. Based on Govt. approval for continuous process plant, plant was restarted on 04.04.2020. Since then plant is running at partial capacity due to low demand. It is expected to improve in Q2 FY 21.

DIVISION WISE PERFORMANCE:

PAPER AND PAPERBOARD DIVISION, DANDELI

The production of Paper and Paperboard was 313876 MT (98% capacity utilization) during the year against 304957 MT in the last year (95% capacity utilization) i.e., higher by 8919 MT. The sale of Paper and Paperboard was 304762 MT during the year against 301931 MT in the last year i.e., higher by 2831 MT. Turnover during the year was 1866 Crores as against 1851 Crores in the last year, i.e., higher by 15 Crores. The EBITDA margin was 24.56% during the year.

CABLE DIVISION, MYSORE

The production of Optical Fibre Cable was 37392 Kms during the year against 40097 Kms in last year, thereby lower production by 2705 Kms due to loss of operations in March, 2020. The sale of Optical Fibre Cable was 37510 Kms during the year as against 37930 Kms in the last year i.e. lower by 420 Kms. The turnover was 107 Crores during the year as against 117 Crores in the last year i.e., lower by 10 Crores. The EBITDA margin was 19.32% during the year.

EXPORTS:

Export of Paper and Paperboard in foreign currency during the year was 3588 MT worth 21 Crores (FOB) as against 2530 MT worth 17 Crores (FOB) in the last year. Similarly Cable worth 8 Crores (FOB) was exported during the year as against 4 Crores in the last year.

FUTURE PLAN:

Company is continuously working by phase wise investment at Paper Division, Dandeli for improving paper quality, produce new speciality products and reduction of usage of steam, power, chemical, water and also minimize the breakdown of machines.

Additionally, the Companys Cable Division is also working on Green field expansion in Telangana for backwards integration of raw material required for Optical Fibre Cable which will be commissioned on approvals from M-Sips. The Land has already been acquired from the Government of Telangana.

ANDHRA PAPER LIMITED ACQUISITION AS SUBSIDIARY COMPANY:

In line with growth plan, the Company carried out strategic acquisition of International Paper APPM Limited (IPAPPM). The share purchase agreement was signed on 29.05.2019.

On 29.10.2019 the Company acquired 55% of the paid up share capital of IPAPPM by 13902025 equity shares of 10/- each from International Paper Investments (Luxembourg) S.a.rl and 7971496 equity shares of 10/- each from IP International Holding Inc. In terms of Letter of Offer dated 30.08.2019, the Company acquired on 11.10.2019,6839879 equity shares of 10/- each representing 17.20% of the paid up share capital of IPAPPM from public shareholders. Consequently IPAPPM Limited has become a subsidiary of the Company having total share holding of 72.20%. The name of IPAPPM Limited has been changed to Andhra Paper Limited (APL) w.e.f. 09.01.2020. The acquisition has been carried out from internal accrual, borrowing from Banks and NCDs. The working of APL for the year ended 31st March, 2020 has been satisfactory.

RELATED PARTY DISCLOSURE AND TRANSACTIONS:

All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons.

All related party transactions are placed before the Audit Committee as also the Board for approval. The Details of related party disclosure and transactions as required by the Accounting Standards (Ind AS 24) and AOC-2 have been made in the notes to the Financial Statements.

The Company has developed a policy on related party transaction and its materiality for the purpose of identification and monitoring of such transactions. The Policy on related party transaction and its materiality as approved by the Board is uploaded on the Companys website: www.westcoastpaper.com.

ANNUAL RETURN:

As per the Companies (Amendment) Act, 2017 dated 3rd January,2018 read with notification dated 9th February, 2018 a copy of Annual Return is available at the weblink : http://www.westcoastpaper.com/investors/.

CORPORATE SOCIAL RESPONSIBILITY:

The Company has framed a Corporate Social Responsibility (CSR) Policy as required under Section 135 of the Companies Act, 2013. CSR Committee has been framed pursuant to Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, to oversee the CSR activities initiated by the Company during the financial year under review. Annual Report on CSR in the prescribed format is attached and forms a part of this report & policy may be accessed on the Companys website.

MEETINGS OF THE BOARD:

During the year under review, Seven Board Meetings were held and details thereof are mentioned in the Report on Corporate Governance forms a part of this report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

The Companys policy on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 is as below :

Appointment policy for Independent Directors, Key Managerial Personnel & Senior Executives is as under-

(A) Independent Directors:

Independent Directors are appointed based on the criteria mentioned under section 149(6) of the Companies Act, 2013 and in accordance with other applicable provisions of the Companies Act, 2013, Rules made there under & Listing Agreements entered with Stock Exchanges.

(B) Key Managerial Personnel (KMP):

KMP are appointed by the resolution of the Board of Directors of the Company, based on the qualification, experience and exposure in the prescribed fields. Removal of the KMP is done by the resolution of the Board of Directors of the Company. Appointment/Removal is in accordance with provisions of the Companies Act, 2013, Rules made there under & Listing Agreements entered with Stock Exchanges.

(C) Senior Executives:

Senior Executives are appointed by the Chairman & Managing Director and/or Executive Director of the Company based on their qualification, experience & exposure. Removal of the Senior Executives is also done by Chairman & Managing Director and/or Executive Director. Further, appointment & removal are noted by the Board as required under clause 8(3) of Companies (Meetings of the Board and its Powers) Rules, 2014.

PERFORMANCE EVALUATION OF INDEPENDENT DIRECTORS:

Criteria for performance evaluation of Independent Directors as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed herewith forms a part of this report.

MANAGERIAL REMUNERATION:

The requisite details as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith forms a part of this report.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING/ OUTGO:

The information required under Section 134(3)(m) of the Companies Act, 2013 is annexed herewith forms a part of this report.

MANAGEMENTS DISCUSSION AND ANALYSIS :

A comprehensive Managements Discussion and Analysis Report, as required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed herewith forms a part of this report.

CORPORATE GOVERNANCE:

Pursuant to Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a Corporate Governance Report is annexed herewith forms a part of this report.

A certificate from the auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached herewith, forms a part of this report.

The Company is complying with Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with regard to Corporate Governance and reports to that effect are being regularly filed with the Stock Exchanges. The Company has obtained declaration from the Directors and Senior Management Personnel of the Company for compliance of Code of Conduct and the Certificate from CEO/CFO was placed before the Board of Directors at the meeting held on 26.06.2020.

DIRECTORS RESPONSIBILITY STATEMENT:

The Directors Responsibility Statement, as required under Section 134(5) of the Companies Act, 2013, is annexed herewith forms a part of this report.

DIRECTORS AND KMP:

Retirement by Rotation

Shri Saurabh Bangur (DIN:00236894) will retire from the office by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Appointment

Shri Virendraa Bangur (DIN:00237043) has been appointed as Additional Director of the Company at the meeting of the Board held on 12th November, 2019 and re-designated as Joint Managing Director at the meeting of the Board held on 26th June, 2020. Notice of ensuing Annual General Meeting includes the proposal for appointment as Director and appointment/re-designation as Joint Managing Director.

Smt. Arpita Vinay (DIN: 06940663) has been appointed as Additional Independent Woman Director of the Company at the meeting of the Board held on 26th June, 2020 and Notice of ensuing Annual General Meeting includes the proposal for appointment as Director.

Re-appointment

There was no re-appointment of Director during the year.

DECLARATION BY DIRECTORS:

The Company has received declaration from all the Independent Directors under Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of meeting the criteria of independence provided under Section 149(6) of the Companies Act, 2013 and clause (b) of sub-regulation (1) of the Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

REPORTING OF FRAUDS:

Auditors of the Company have not reported any fraud as specified under the 2nd provision to Section 143(12) of the Companies Act, 2013.

BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Board Committees. The manner of evaluation has been explained in the Corporate Governance Report.

SHARE CAPITAL:

The paid up Equity Share Capital as on 31st March, 2020 was 1320.98 lakhs comprising of 6,60,48,908 Equity Shares of 2/-each. During the year under review, the Company has not issued any further shares to the members or general public.

NON-CONVERTIBLE DEBENTURES:

During the year ended on 31.03.2020, Company has allotted Nos.1980, 10.30%, Secured, Rated, Listed, Redeemable NonConvertible Debentures of face value of 10,00,000/- each aggregating to 198.00 Crores for the acquisition of Andhra Paper Limited (formerly known as International Paper APPM Limited). ICRA Limited assigned the credit rating as: ICRA AA- Stable for Non-Convertible Debentures.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

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

BUSINESS RESPONSIBILITY REPORT (BRR):

SEBI (Listing Obligations and Disclosure Requirements) (Fifth Amendment) Regulations, 2019, notified on 26.12.2019, amended the Regulation 34(2)(f), which requires, Annual Report of top one thousand listed entities based on market capitalization, shall contain BRR. BRR is annexed herewith forms a part of this report.

FAMILIARIZATION POLICY:

Pursuant to Regulation 25(7) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has framed a policy to familiarize the Independent Directors about the Company. The Policy is available on the website of the Company: www.westcoastpaper.com.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The vigil mechanism of the Company incorporates a policy under Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Rule 7 of the Companies (Meeting of the Board and its Power) Rules 2014, provide the mechanism for Employees and Directors of the Company to approach the Executive Director and the Chairman of the Audit Committee of the Board. Protected disclosures can be made by a Whistle Blower by means of e-mail or telephone or letter to the Executive Director or to the Chairman of the Audit Committee. The policy on Vigil Mechanism may be accessed on the Companys website.

BUSINESS RISKS MANAGEMENT:

Pursuant to Regulation 17(9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has laid down a framework to inform the Board about the particulars of Risks Assessment and Minimization Procedures (Risks Management) Plan. The Risks Management Plan is available on the website of the Company.

DISCLOSURE PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

Details required under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the Companies (Accounts) Amendment Rules, 2018 covered in the report of Corporate Governance forms a part of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT:

There are no significant and material orders passed by the Regulators or Courts, which would impacts the status of the Company and its future operations.

AUDITORS REPORT:

The Notes on Accounts and the observations of the Auditors in their report on the Accounts of the Company are self explanatory and in the opinion of the Directors, do not call for any clarifications.

AUDITORS:

a. Statutory Auditors and their Report

M/s Singhi & Co. Chartered Accountants, Kolkata appointed as Statutory Auditors at the 62nd Annual General Meeting of the Company pursuant to the provision of rotation under section 139 and 141 of the Companies Act, 2013 and rule 7 of the Companies (Audit and Auditors) Rules, 2014, for a period of 5 consecutive years ending on 31.03.2022 and consent of the members accorded at the 63rd Annual General Meeting held on 22nd August, 2018 to continue the appointment thereof, as the Auditors of the Company for the remaining term without any further ratification by the shareholders, pursuant to the amended provisions of Section 139 of the Companies Act, 2013 and Rules made there under, notified by Ministry of Corporate Affairs as on 07.05.2018. The observations of the Auditors in their report for the financial year 2019-20 on Accounts and the Financial Statements, read with the relevant notes are self explanatory.

b. Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors appointed Shri Naman Joshi, Bangalore practicing Company Secretary as Secretarial Auditor to carry out Secretarial Audit of the records maintained by the Company for the financial year 2019-20. The report given by him for the said financial year in the prescribed form No: MR 3 is annexed to this report.

c. Cost Auditor and Cost Audit Report

Pursuant to revised order of the Central Government dated 31.12.2014 Cost Audit of the Cost Records of the Company is mandatory from the financial year starting 1st April 2015 and Shri Umesh Kini, Cost Accountant, Sirsi has been appointed as Cost Auditor of the Company to conduct Cost Audit of Cost Records maintained by the Company for the financial year 2020-21. Accordingly matter relating to the appointment will be placed in next Annual General Meeting.

INTERNAL CONTROL SYSTEM:

There are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inputs, availing of services, fixed assets, for the sale of goods and providing of services. Full-fledged Internal Audit department carries out pre and post audit of all significant transactions throughout the year. Company has also appointed M/s S.S.Kothari Mehta & Co., Chartered Accountants, New Delhi (outsourced) as Internal Auditor. Based on the Annual Internal Audit programme as approved by Audit Committee of Board, regular internal audits are conducted. Findings are placed before Audit Committee, which reviews and discuss the actions taken with the Management.

INDUSTRIAL RELATIONS:

Industrial Relations remained cordial throughout the year under review. The Company has entered into a tripartite longterm wage revision settlement with Joint Negotiation Committee of Unions on 04.05.2016 for the period from 01.01.2015 to 31.12.2018. The process of renewal of tripartite long-term wage revision settlement with Joint Negotiation Committee of Unions from 01.01.2019 is going on. Your Directors acknowledge the support and co-operation from employees at all levels.

AWARDS AND RECOGNITION:

In recognition of good management systems and safety performance during 2017 & 2018, National Safety Council, Karnataka Chapter awarded us with Uthama Suraksha Puraskara Trophy & Certificate.

CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards. The Audited Consolidated Financial Statements together with Auditors Report forms a part of this report.

A Report on the performance and financial position of wholly owned subsidiary company (West Coast Opticable Limited) and listed subsidiary Company Andhra Paper Limited for the financial year ended 31.03.2020 included in the Consolidated Financial Statements is presented in the separate section AOC-1, forms a part of this report.

Pursuant to the provisions under Section 136 of the Companies Act, 2013 the financial statements including consolidated

financial statements along with relevant documents and separate Audited Accounts of the subsidiary companies are available at the Companys website.

ACKNOWLEDGEMENT:

Your Directors would like to express their sincere appreciation and thanks to the Central and State Governments, Banks, Financial Institutions, Customers, Suppliers and Shareholders for their continued support and co-operations.

Your Directors take the opportunity to place on record their deep appreciation of the committed services rendered by the employees of the Company, who have contributed significantly towards Companys performance and growth.

For and on behalf of the Board
Place : Dandeli S. K. Bangur
Date : June 26, 2020 Chairman & Managing Director
DIN:00053237