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Tamil Nadu Newsprint and Papers Directors Report, Tamil Newsprint Reports by Directors
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Tamil Nadu Newsprint and Papers

BSE: 531426|NSE: TNPL|ISIN: INE107A01015|SECTOR: Paper
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Directors Report Year End : Mar '17    Mar 16

TO THE MEMBERS

The Company’s Directors are pleased to present the 37th Annual Report of the Company along with Audited Accounts for the financial year ended 31st March, 2017.

1. FINANCIAL RESULTS

The Financial Results for the year under review are summarized below:

(Rs. in Crore)

Particulars

2016-17

2015-16

Revenue from operations (including Excise Duty)

3093.97

2531.51

Other Income

36.95

22.32

Operating Profit (PBIDT/ EBIDTA)

765.91

589.18

Finance cost

252.02

121.84

Gross Profit (PBDT)

513.89

467.34

Depreciation & Amortization expense

207.68

143.77

Profit before tax (PBT)

306.20

323.57

Tax Expense

41.64

63.76

Profit after tax (PAT)

264.56

259.81

Other Comprehensive Income

(7.03)

36.14

Total Comprehensive Income (Net of Taxes)

257.53

295.95

Transfer to General Reserve

190.00

190.00

Dividend including Taxes

62.47

62.47

Surplus carried to Balance Sheet

109.32

97.24

Tamil Nadu where the Company’s production facilities are located, has witnessed severe drought and water shortage during the year. The water shortage became acute since February 2017. As paper production is highly water intensive, water shortage has affected production since February 2017. The Company lost 25 machine days of paper production, 34 days of Hard Wood Pulp production and 10 days of Chemical Bagasse Pulp production leading to production losses equivalent to 10557 MT of paper, 9180 MT of Hard Wood Pulp and 4700 MT of Chemical Bagasse Pulp during February and March 2017. Your Company has managed the serious unforeseen setback to a larger extent by reducing the fresh water consumption through extensive recycling of process water and implementing contingency plans on time. But for the proactive measures taken by the company, the production loss would have been much higher. Despite the severe hardship, your Company has delivered good results. The Management deserves commendation for their performance.

2. DIVIDEND

The Board of Directors of the Company had approved the Dividend Distribution Policy in line with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Policy is uploaded on the Company’s website at http://www.tnpl.com/web_pdf_files/Dividend-Distribution-Policy-TNPL.pdf. Your Directors recommend a dividend of 75% (i.e. Rs 7.50/-per share) for the year ended 31st March, 2017. The Dividend, if approved by the shareholders at the AGM, will be paid to the equity shareholders whose names appear in the Register of Members as on 19th September, 2017. The cash outgo on the proposed dividend, will be Rs. 62.47 crore.

3. TRANSFER TO RESERVES

The Company has transferred Rs 190.00 crore to General Reserves out of the amount available for appropriation. Rs 109.32 crore is proposed to be retained in the Profit & Loss Account.

4. PERFORMANCE HIGHLIGHTS OF THE YEAR

a) Operations

1. Sales crossed Rs. 3000 crore mark which is the highest in the Company’s history.

2. Profit after tax (PAT) of Rs. 264.56 crore exceeded the PAT achieved in 2015-16 by Rs. 4.75 crore (1.8%).

3. During the year the Paper production was 403261 MT.

4. Achieved Highest Paper sales of 415,683 MT during the FY 2016-17 since inception of the company Domestic Sales accounts for 80% and Exports at 20%.

5. The packaging paper board plant commenced commercial production on 1st May, 2016. Board production during the 11 month period was 83,742 MT, equivalent to 53% of capacity.

6. 312,530 tonnes of Hardwood, chemical Bagasse Pulp and Deinked Pulp were produced during the year.

7. Generated 7128.94 lakh units of power , of which 6923.67 lakh units were internally consumed and 205.27 lakh units exported to the state grid. Power consumed from the State Grid constitutes only 1.61% of total power consumed.

8. The bio-methanation plants have generated methane gas of 68.52 lakh m3 during 2016-17. The methane gas was consumed in lime kiln and power boilers in replacement of furnace oil 3864 KL and imported coal 330 MT.

9. The wind farms with an installed capacity of 35.5MW capacity have generated 512.65 lakh Kwh Units of ‘Green Power’ during the year.

10. The Paper & pulp mill have implemented various water conservation projects and reduced the overall consumption of water to about 40 KL Per ton of paper which is one of the lowest in paper industry.

11. TNPL is the First and only company in the Indian Paper Industry to have established a cement manufacturing factory to convert the mill wastes limesledge and flyash into high grade cement as part of its solid waste management system. During the year, the Company has manufactured 234,676 MT of cement.

12. The company has repaid Term Loans amounting to Rs. 154.19 crore during the financial year 2016-17 as per schedule.

13. Market Capitalization crossed Rs. 2716.17 Cr. mark first time during the year on 13.10.2016. Market Capitalization as on 31.03.2017 was Rs. 2179.44 Cr.

b) New Projects Implemented:

1) TNPL Unit II - Multilayer double coated Paper Board project

Your Company has set up a Multi Layer Coated Board Plant of a capacity of 2 Lakhs MT per annum during the financial year 2015-16 and commenced the commercial production from 1st May 2016. The initial teething problems faced in the Board machine have been attended and the Board production has been stabilized. Your company is poised to achieve higher board production from 2017-18 onwards.

2) Conversion Centre of Paper and Packaging Board (CCPPB)

Your Company has established a “Conversion Centre of Paper and Packaging Board (CCPPB) Unit” at Mayanur in Karur District. During the financial year 2016-17, your Company has set upon a Core manufacturing unit for manufacturing Core pipes required for our plants viz. Unit I and Unit II. In addition, an entrepreneur has set up a poly coating unit in the Centre.

Your Company is taking steps to set up few more small sized manufacturing units in this campus.

PROJECTS UNDER IMPLEMENTATION

Capacity Expansion of TNPL Unit II

As part of the growth plan, TNPL has embarked on a Mill Expansion Plan (MEP) in Unit II for producing 1,65,000 MT of paper per annum by way of installing a state-of- the art Paper Machine, a 400 tpd chemical hardwood pulp mill with chemical recovery boiler, augmentation of Captive power plant and Waste water treatment plant and other auxiliaries at a total capital outlay of Rs.2,100 crores.

TNPL has filed an application with Ministry of Environment. Forest and Climate Change (MOEFCC), for obtaining Environment Clearance(EC). MOEFCC has approved the Terms of Reference for conducting Environment Impact Assessment study. The study has been commenced. The EC for the project is expected to be secured by March 2018. The project will be taken up for implementation during April 2018 and completed by June 2020.

With the implementation of the expansion plant, the overall paper and packaging board production capacity in Unit I and Unit II of your company will be increased to 7,65,000 MT per annum from the current capacity of 6,00,000 MT per annum along with pulping facililties.

Installation of Roll grinding machine in TNPL Unit II

A new Roll grinding machine is being installed in TNPL Unit II, at a capital outlay of Rs.25 Crore. Civil works are in progress. The Roll Grinding Machine will be commissioned by October 2017.

Installation of additional Electrostatic Precipitator for Recovery Boiler in TNPL - Unit I

The recovery boiler is currently provided with a twin chamber Electrostatic precipitator (ESP) to control the particulate emissions to less than 50 mg/NM3. An additional ESP chamber, is being installed to improve the overall operational efficiency of the Recovery Boiler. Civil works are in progress. The project will be completed by November 2017.

c) Contribution to Environment

1) During the year 2016-17, M/s TuV India Limited, a subsidiary of TuV NORD, Germany carried out a Surveillance Audit of TNPL’s Environmental/ Quality Management System and awarded a certificate valid till Feb’ 2020

2) The Company has received a “Green-Co Gold Rating” from Confederation of Indian Industry -Godrej Green Business Centre (CII - Godrej GBC), Hyderabad. TNPL is the 2nd Paper manufacturing unit and 1st Agro based Paper Manufacturing Company in India” to have undergone Green Co Rating System and received the prestigious “Green-Co Gold rating”.

3) Production of 1.61 Lakh MT of bagasse pulp and 68,700 MT of Deinked pulp during the year has facilitated conservation of 10.56 Lakh MT of pulpwood.

4) The “World Environment Day” was celebrated on 05/06/16 in both the units involving school children in planting trees.

5) 7180 MT of carbon dioxide content in the Flue gas generated in the cement mill has been consumed in the PCC plant for producing 16319 MT of PCC.

6) The treated effluent water of Unit I is used for irrigation of around 1700 acres of land under TNPL Treated Effluent Water Lift Irrigation Scheme (TEWLIS) and 306 acres of land under Captive Plantation scheme.

7) About 6,80,000 tree saplings of various species have been planted in 570 acres of land in Unit II and the surrounding areas of the factory. The treated effluent water of Unit II is used for irrigation of these saplings through drip irrigation system. The massive plantation has become an excellent green cover in the area.

8) The Company has generated about 512.65 Lakh KWH Wind energy during 2016-17.

9) 68.52 Lakh m3 methane generated in the Bio-methanation plant was consumed in lime kiln and Power Boilers saving 3864 KL of Furnace oil and 330 Mt of imported coal.

d. Corporate Social Responsibility(CSR)

The Company has undertaken CSR activities as per the CSR policy (available on your company’s website www.tnpl. com) The details are contained in the Annual Report on CSR activities vide Annexure - I, forming part of this Report.

The “Corporate Social Responsibility Committee” comprises of four Independent Directors who monitor the CSR activities. TNPL’s CSR activities are implemented mostly in the villages / Town Panchayats located in the vicinity of TNPL plants. TNPL spends 2% of the average net profit of the previous three years for CSR initiatives. The CSR activities are mainly focused on Education, Health care, Socio-economic development, Environmental sustainability and Culture & Heritage promotion. The Company has spent Rs.505.00 lakhs for CSR activities during the year 2016-17.

e. Contribution to Innovation and New knowledge development

1. The company nurtures creativity and innovation through its R&D activities which are carried out largely in-house. A few activities are outsourced when warranted.

2. The R&D activities focus on product development, process improvement, raw material substitution, development of new products and protection of the environment.

3. The company has spent Rs. 9.35 Crore on R & D activities during the year.

f. Awards

- TNPL has bagged the “IPMA Paper Mill of the Year award” for the year 2015-16 from Indian Paper Manufacturers’ Association (IPMA), New Delhi. This award is given once in two years for the overall best performance in Industry. TNPL has received this prestigious award five times out of seven occasions and three times in a row.

- Dun & Bradstreet Mumbai has selected TNPL as the “Top Indian Company under the sector Paper & Pulp for “Dun & Bradstreet Corporate Awards 2017”, sixth time in a row.

- TNPL’s project “Lime Sludge and Fly ash Management (LSFM) System” has been selected and awarded “Most Innovative Project” award for the “Best Practices in Waste Management during GreenCo Best Practices Award 2016 competition conducted by CII-Sohrabji Godrej Green Business Centre, Hyderabad on 15th June, 2016 at Hyderabad.

- During the year, the company received the Top Export Award for the year 2014-15 from CAPEXIL (Chemicals & Allied Products Export Promotion Council of India). in recognition of the company’s export achievement in respect of Paper, Paper Board & Paper Products Panel.

5. MARKET TRENDS

a) General

Total installed capacity of Indian Paper Industry is approximately 13.5 Million Metric Tonnes and average capacity utilization is 90%. Overall consumption inclusive of imports and net of exports is about 14.70 million metric tonnes.

The average per capita consumption in India is around 11 kgs against the global average consumption of 56 kgs. The growth rate of paper across the globe is around 1.5%. With the consistent economic growth and greater emphasis for education, the demand growth is estimated at 6%, consisting of 4% in Printing and Writing paper, 12% in Industrial and Packaging Board, 3-4 % in newsprint and specialty papers. Excise duty on paper remains at 6%. Basic Customs duty is levied at 10% for printing and writing paper & Boards. Imports from countries covered under Free Trade Agreements (FTA), are levied basic customs duty at zero percent.

b) Printing & Writing Paper

During 2010 and 2011, many mills in the country had added capacity. Supplies exceeded demand and prices dropped. Paper Industry faced acute shortage of pulpwood during 2013. Few mills resorted to importing pulpwood at higher prices. With the steep increase in input costs, paper prices rose during 2013. However, with the paper prices softening in the international market and import of paper in large volume under Free Trade Agreements (FTA), paper prices dropped sharply during 2014 and 2015. The Indian paper industry faced unprecedented challenges both on cost front and market front for two consecutive years 2014 & 2015. The market recovered and stabilised during 2016-17 due to consistent growth in demand and sudden drop in supplies. The shortage in supplies was met through imports mainly from Indonesia and China.

c) Packaging Boards

The market for Packaging Board is estimated at 3.00 Million tonnes. Grey-Back Board account for 1.35 Million tonnes (45%), White-back and other high-end varieties (FBB, SBS, Cup Stock.) account for the remaining 1.65 million tonnes (55%). The demand growth for packaging boards is estimated at 12% per annum.

d) Outlook

At the current estimated demand growth at 6% per annum, the domestic consumption is expected to reach 25.30 million metric tonnes per annum by 2024-25. This offers a good opportunity for capacity addition.

e) TNPL’s response to Market Trends

TNPL has always been in the forefront matching its capability, capacity and performance with the overall trends in the industry. TNPL has been increasing its production capacity consistently. With the commissioning of board plant, the total production capacity of the company has been increased to 6 lakh MT. Now your company is taking steps to increase the capacity from 6 Lakhs MT per annum to 7.65 Lakhs MT per annum to cope up with the growth in the Industry.

6. DIRECTORS & KEY MANAGERIAL PERSONNEL

The Board of Directors have extended the service of Thiru A Velliangiri as Deputy Managing Director on contract basis from 01.04.2017 to 31.03.2018 and his appointment is subject to approval of shareholders in the forthcoming Annual General Meeting.

On completion of the first term ended on 31.03.2017, the Board re-appointed the following Directors as Independent Director for the second term with effect from 01.04.2017 to 31.03.2020. Their appointment is subject to approval of shareholders in the forthcoming Annual General Meeting:

1. Thiru V. Narayanan

2. Thiru N Kumaravelu

3. Thiru M R Kumar

4. Thiru V Nagappan

Tmt. Sarada Jagan, Independent Director has ceased to be Director of the company from 01.04.2017 on completion of her tenure as she did not offer herself for re-appointment.

Thiru V. Kumaravelu re-appointed as mentioned above for three years has resigned from directorship and his resignation was accepted by the Board w.e.f. 19.04.2017.

Pursuant to order of the Government of Tamil Nadu the Board co-opted Thiru Atulya Misra, IAS as Additional Director and designated him as Chairman of the Company. Thiru Atulya Misra, IAS will hold the office upto the date of forthcoming Annual General Meeting and he is eligible for appointment as a Director of the Company.

The Govt. vide same order appointed Dr. R. Selvaraj, IAS as Managing Director of TNPL in place of Thiru Vikram Kapur, IAS with effect from 20th April 2017. Accordingly, Thiru Vikram Kapur, IAS ceased to be Director of the Company w.e.f 20th April 2017. Dr. R. Selvaraj, IAS, was co-opted as Additional Director on the Board of the Company who holds office upto the date of the ensuing Annual General Meeting and his appointment is subject to the approval of the Shareholders in the Annual General Meeting.

In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Thiru K. Shanmugam, IAS, Director retires by rotation at the forthcoming Annual General Meeting. He is eligible for reappointment as Director.

6.1 Declaration from Independent Directors on Annual Basis

The Independent directors have submitted their disclosure to the Board confirming that they fulfill all the requirements as to qualify for their appointment as an Independent Director under the provisions of Section 149 of the Companies Act, 2013 as well as SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, hereinafter referred to as SEBI Regulations. The Board confirms that the said independent directors meet the criteria as laid down under the Companies Act, 2013 as well as SEBI Regulations.

6.2 Remuneration Policy

The Board, on the recommendation of the Nomination & Remuneration Committee has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The details of policy are provided in the Corporate Governance Report forming part of this report.

6.3 Meetings

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year, eight meetings of each Board and Audit Committee were convened and held, the details are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Regulation 17(2) of the SEBI Regulations.

6.4 Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of the SEBI Regulations, the Board has internally carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit and Nomination & Remuneration Committees for the financial year ended 31st March, 2017. The guidance note dated January 5, 2017 as suggested by SEBI was referred to while carrying out the annual performance evaluation. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board on the following broad criteria i.e. attendance and level of participation at meetings of the Board/Committees, independence of judgement exercised by Independent Directors, interpersonal relationship etc.

The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors in their meeting held on 24.03.2017. The Directors expressed their satisfaction with the evaluation process.

7. INTERNAL COMPLAINTS COMMITTEE

As per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 & Rules made thereunder, the Company has constituted an Internal Complaints Committee (ICC) and following are the members :-

(i) Tmt. R.S.Tamilarasy, Manager (Lab) - Presiding Officer

(ii) Thiru. P.Sundaram, Manager - HR (Member)

(iii) Tmt. M.PemilaBeham, Assistant Officer - HR (Member)

(iv) Thiru. M.Velliangiri, President, Kanmani Trust, Karur -Member representing NGO

The above members are committed to the cause of women and they possess experience in social work and legal knowledge. During the year under review there were no complaints referred to the Committee.

8. AUDITORS

a) Statutory Auditors The Comptroller and Auditor General of India appointed M/s. Raman Associate, Chartered Accountants, Chennai, as the Statutory Auditors of the Company for the financial year 2016-17

b) Cost Auditors Pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the company in respect of its paper, cement and energy activities are required to be audited. Your Directors had, on the recommendation of the Audit Committee, appointed M/s Raman & Associates, to audit the cost accounts of the company for the year 2016-17. The cost audit report for the year 2016-17 will be submitted to the Central Government before the due date. Cost Audit report for the financial year 2015-16 was filed in scheduled time.

c) Secretarial Auditor 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 M/s R. Sridharan & Associates, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the company. The Report of the secretarial audit is annexed herewith as “Annexure II”.

9. NON- CONVERTIBLE DEBENTURES

No Non-Convertible Debentures is outstanding as on 31.03.2017.

10. FIXED DEPOSITS

The company has stopped accepting fresh deposits from 1st June, 2002 and renewals from 1st August, 2005. During the year under review, the Company has not accepted deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

11. RISK MANAGEMENT FRAMEWORK

TNPL has established a Risk Management Framework under which the risks covering the entire operation have been identified and categorized as high, medium and low.

All the risks are discussed periodically in the Senior Management Committee meetings and appropriate actions are taken pro-actively.

The risk details and mitigation plans are placed before the Audit Committee and the Board, bi-annually.

12. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

TNPL has instituted adequate internal control procedures commensurate with the size of its operations. TNPL has also prepared an ‘Internal Control Procedure Manual’ to ensure that the control procedures are followed by all departments. The departments concerned in the company are complying with the stipulations in the manual without deviating the procedures. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company.

Internal controls are supported by internal audit and management reviews. The Audit Committee meets periodically the Management, External-Internal auditors, Internal auditors, Statutory Auditors and reviews the Annual Audit plans and internal controls. All significant observations of the Auditors are acted upon. The Audit Committee met 8 times during the financial year. The review of Management Response to Audit Observations constitutes an important aspect of the Agenda for each meeting.

13. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The company has framed a Vigil Mechanism / Whistle Blower Policy, the details of such Policy are explained in the Corporate Governance Report and also posted on the website of the Company at www.tnpl.com.

14. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

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

15. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year, the company has transferred Rs. 7,59,605/-being the Dividend amount which was due and payable and remained unclaimed and unpaid for a period of seven years, to the Investor Education and Protection Fund, as required under Section 205A (5) of the Companies Act , 1956.

16. UNPAID DIVIDEND STATUS

Dividend was remaining unpaid due to non-confirmation of their new addresses by the concerned shareholders. The unpaid dividend warrants were returned by the postal authorities. Effective follow-up by the Company has resulted in Unpaid Dividend being consistently below 0.5% of the total dividend. As and when the shareholders communicate the new address, the dividend is sent to the shareholders. At the end of seven years, the unpaid dividend is transferred to Investor Education & Protection Fund. The table and graph given below summarize the status of Unpaid Dividend.

DIVIDEND STATUS FOR THE LAST 7 YEARS

(Rs. In lakhs)

SL No.

YEAR

SHARE CAPITAL

DIVIDEND %

DIVIDEND AMOUNT

DIVIDEND PAID

DIVIDEND UNPAID AS ON 31.3.2017

% OF PAID DIVIDEND

% OF UNPAID DIVIDEND

1.

2009-10

6921.06

45

3114.48

3103.68

10.80

99.65

0.35

2.

2010-11

6921.06

50

3460.53

3449.61

10.92

99.68

0.32

3.

2011-12

6921.06

50

3460.53

3449.09

11.44

99.67

0.33

4.

2012-13

6921.06

50

3460.53

3447.48

13.05

99.62

0.38

5.

2013-14

6921.06

60

4152.63

4135.91

16.72

99.60

0.40

6.

2014-15

6921.06

60

4152.63

4135.88

16.75

99.60

0.40

7.

2015-16

6921.06

75

5190.80

5170.88

19.92

99.62

0.38


17. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars required under Sec. 134(3) (m) of the Companies Act 2013, read with the Rule 8 of The Companies (Accounts) Rules, 2014, is furnished in Annexure III to this Report.

18. HEALTH

TNPL is committed to take care of the health of its employees. An Occupational Health Centre is functioning in both the units. In addition, every week, one specialist Doctor in cardiology, General Medicines, Ortho, Skin, Eye, Dental, ENT, etc., visit the occupational Health centre. Entire medical expenses of employees for 7 Serious Ailments viz. Heart ailment, Cancer, Kidney Transplantation, Paralysis, Leprosy, Tuberculosis and Brain Surgery is borne by the Company. A Comprehensive Master health Check-up is done for employees four times at age of 40, 50, 56 and 59. Every year, Audiometry test is conducted to those employees, who are exposed to High noise areas.

19. SAFETY

TNPL has adopted a clearly defined Occupational Health and Safety Policy. Suitable Personal Protective Equipments (PPE) are provided to all employees. Periodical Training Programs are conducted on handling of hazardous chemicals, Material handling, Usage of PPEs, Electrical safety, Road safety, First aid, fire fighting etc. to improve safety awareness among the employees including contract workmen. Caution boards, posters, slogans, Do’s and Don’ts etc. are displayed at prominent places to promote safety at work places. Safety Committee with representatives from Management and Workmen has been constituted. Safety Committee meetings are conducted periodically and suggestions given to improve safety aspects are implemented.

Accidents and incidents are investigated and preventive / corrective actions are taken to avoid recurrence. Mill wide Safety Audit, HAZOP study and Risk Analysis are carried out periodically through experts in industrial safety and the recommendations are implemented. An updated on-site Emergency Plan (OEP) and Off-site Emergency Plan are available to mitigate emergencies. Periodic mock drills for hazardous chemical leakages and fire incident are conducted to ensure the effectiveness of emergency preparedness. The entire Mill is covered with fire hydrant points with pressurized water ring mains for fire fighting. Also different types of fire extinguishers according to the nature of fire are provided at strategic points since inception, TNPL has maintained an excellent safety record.

20. PARTICULARS OF EMPLOYEES

None of the employees of the company was in receipt of remuneration in excess of the limits prescribed under the Companies Act, 2013 and the rules framed thereunder. The information as required under Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the company, is annexed as Annexure IV.

21. CASH FLOW STATEMENT

As required under Regulation 34(2) (c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a Cash Flow Statement prepared in accordance with the Indian Accounting Standard 7 (IND AS-7) is attached to the Balance Sheet.

22. EXPORT HOUSE STATUS

TNPL has been awarded status of “Three Star Export House” by DGFT -Government of India in accordance with Foreign Trade Policy. This status is valid till 11/10/2020.

23. INDUSTRIAL AND PERSONNEL RELATIONS

The Company continues to have healthy industrial and employee relations at all levels. Despite severe competition, the enthusiasm and unstinting efforts of the employees have enabled the company to remain at the forefront of the Industry.

Your Company continued to receive co-operation and unstinted support from the distributors, retailers, stockists, suppliers and others associated with the Company as its trading partners. The Directors wish to place on record their appreciation for the same and your Company will continue in its endeavor to build and nurture strong links with trade, based on mutuality, respect and co-operation with each other and consistent with consumer interest.

24. ENHANCING SHAREHOLDERS’ VALUE

Your Company believes in the importance of its Members who are among its most important stakeholders. Accordingly, your Company’s operations are committed to the goal of achieving high levels of performance and cost effectiveness, growth building , enhancing the productive asset and resource base and nurturing overall corporate reputation. Your Company is also committed to creating value for its stakeholders by ensuring that its corporate actions have positive impact on the socio-economic and environmental growth and development.

25. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

1. in the preparation of the annual accounts for the year ended 31st March, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2. the directors had selected 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 profit of the company for that period;

3. 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;

4. the Annual Accounts were prepared for the financial year ended 31st March, 2017 on a going concern basis;

5. the directors have laid down proper internal financial controls to be followed by the company and that such internal financial controls are adequate and are operating effectively;

6. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and are operating effectively.

26. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as “Annexure V”

27. CORPORATE GOVERNANCE

The Report on Management Discussion and Analysis and the Report on Corporate Governance forming part of Directors’ Report are enclosed as “Annexures VI and VII”.

As required by the SEBI Regulations, an Auditor’s Certificate on Corporate Governance and a Declaration by the Chairman & Managing Director with regard to Code of Conduct are attached to the Report on Corporate Governance.

28. BUSINESS RESPONSIBILITY REPORT

The ‘Business Responsibility Report’ (BRR) of the Company for the year 2016-17 forms part of the Annual Report as required under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as “Annexure VIII”

29. RELATED PARTY TRANSACTIONS

There are no materially significant transactions with related parties during the year with Promoters, Directors, Key Managerial Personnel or other designated persons which are potentially conflicting with the interest of the Company at large.

The Board of Directors have framed the policy on Related Party Transactions and the same is uploaded on the Company’s website.

None of the Directors or Key Managerial Personnel have any pecuniary relationships or transactions vis-a-vis the Company.

Accordingly, the disclosures of Related Party Transactions required under section 134 (3) (h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

30. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

31. MATERIAL CHANGES OCCURRED AFTER END OF FINANCIAL YEAR

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company’s financial position have occurred between the end of the financial year and date of this report.

32. CEO/CFO CERTIFICATION

As required by Regulation 17(8) of the SEBI Regulation, a Certificate on the Financial Statements and Cash Flow statement of the company for the year ended March 31, 2017 duly signed by the Chairman & Managing Director and Deputy Managing Director was submitted to the Board of Directors at their meeting held on May 29, 2017.

33. ACKNOWLEDGEMENT

The Board has pleasure in recording its appreciation for the assistance, co-operation and support extended to the company by the Govt. of Tamil Nadu, Commercial Banks, Financial Institutions, Sugar Mills and Dealers.

The Board also places on record its sincere appreciation of the positive response received from the Company’s valued customers and thanks them for their continued support.

The company is grateful to all employees for their exemplary co-operation during the year. Their contribution has been truly outstanding. The Directors place on record their appreciation of the excellent effort made by every employee to enhance the company’s performance in adverse market conditions.

Finally, the Board of Directors sincerely thanks the shareholding community for their solid support and for the confidence they have reposed in the Company.

34. CAUTIONARY STATEMENT

Statements in the Board’s Report and the Management Discussion & Analysis describing the Company’s objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. The Company cannot guarantee the accuracy of assumptions and the projected future performance of the Company. The actual results may materially differ from those expressed or implied in this report. Important factors that could influence the Company’s operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

Date: 29th May, 2017 For and on behalf of the Board

Place: Chennai ATULYA MISRA IAS

CHAIRMAN

Source : Dion Global Solutions Limited
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