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Emami Paper Mills LimitedAnnual Report 2016-17

Between the Covers

Management Discussion and Analysis 12

Directors’ Report 16Annexures to the Directors’ Report 22Report on Corporate Governance 42

Independent Auditors’ Report 60

Balance Sheet 66Statement of Profit & Loss 67Cash Flow Statement 68

Notes to Financial Statements 70

Corporate Informa�on 1About Emami paper 2Journey of Emami Paper 4Highlights 2016-17 5Our Key Recogni�ons 6Pu�ng Humanity First 7Board of Directors 8Management Team 10

Cover Photo : Overview of Mul�layer Coated Board Plant

Corporate Information

BOARD OF DIRECTORS

Mr. A. V. Agarwal, Execu�ve Chairman

Mr. Manish Goenka, Whole Time Director

Mr. P. S. Patwari, Execu�ve Director

Mr. M. B. S. Nair, Director - Opera�ons

Mr. J. N. Godbole, Independent Director

Mr. H. M. Marda, Independent Director

Mr. J. K. Khetawat, Independent Director

Mr. S. Balasubramanian, Independent Director

Mr. U. G. Bhat, Independent Director

Mrs. Richa Agarwal, Director

SENIOR PRESIDENT

Mr. S. K. Jain

PRESIDENT (FINANCE) & CFO

Mr. S. K. Khetan

VICE PRESIDENT (FINANCE) AND SECRETARY

Mr. G. Saraf

AUDITORS

M/s S. K. Agrawal & Co.

Chartered Accountants

Suite Nos. 606-608, The Chambers

(Opposite Gitanjali Stadium)

1865, Rajdanga Main Road

Kolkata - 700 107

UNIT AUDITORS

M/s Salarpuria Jajodia & Co.

Chartered Accountants

7, C. R. Avenue

Kolkata - 700 072

BANKERS

State Bank of India

ICICI Bank Limited

DBS Bank Limited

Yes Bank Limited

IDBI Bank Limited

Axis Bank

HDFC Bank

Allahabad Bank

Export Import Bank of India

RBL Bank Limited

DCB Bank Limited

IDFC Bank Limited

WORKS

Balgopalpur,

Balasore - 756020 (Odisha)

R. N. Tagore Road, Dakshineswar

Kolkata - 700035

(West Bengal)

REGISTERED OFFICE

Unit No. 1, 15th Floor, ACROPOLIS

1858/1, Rajdanga Main Road

Kasba, Kolkata - 700107

Phone : +91-33-6627 1301

Fax : +91-33-6627 1338

Email: [email protected]/

[email protected]

Website: www.emamipaper.in

Emami Paper – a true story of industry leadership and forward vision.

OUR CALLING CARD

Our Company was incorporated in 1981. It is a part of Shri R S Agarwal and Shri R S Goenka - led Emami Group with interests in FMCG, edible oil, cement, wri�ng instruments, healthcare, retail and pharmacy stores and real estate.

The Company is an a�rac�ve symbol for the significant growth emerging from India's wri�ng and prin�ng, packaging and newsprint sector.

The Company's newly setup mul�layer coated board mill caters to India's growing FMCG, pharmaceu�cal, healthcare, consumer durables and food based industries packaging requirements besides the remarkable presence in the cultural segment.

OUR DESTINATION

We aspire to maintain a leading posi�on in virgin grade paperboard segment with increase in capacity up to 1,000 TPD.

We aim to become one of the major players in virgin grade wri�ng & prin�ng paper segment; focusing to manufacture copier and maplitho paper to the tune of 500 TPD.

We strive to be known widely for our governance prac�ces and financial success.

We endeavour to become a premier place to work, where our employees can construct dis�nc�ve careers.

Emami Paper – a true story of industry leadership and forward vision.

2

OUR LOCATIONAL SPREAD

We are one of the largest paper manufacturers in India. Head-quartered at Kolkata, we have 2 (Two) manufacturing facili�es - Balasore (Odisha) and Kolkata (West Bengal) and 3 (Three) regional offices – Delhi, Mumbai and Hyderabad. Our dealers network is spread on PAN INDIA basis.

Our plant opera�onal facili�es includes: Mul�-layer coated high end paperboard with 1,80,000 TPA capacity, Newsprint with 95,000 TPA capacity, Wri�ng & Prin�ng (W&P) Paper with 60,000 TPA capacity and Cap�ve Power genera�on of 33.5 MW.

OUR CLIENTELE

Paper Board: All major mul�-na�onal companies and Indian conglomerates.

Newsprint: The Economic Times, The Times of India, Hindustan Times, Anandabazar Patrika, The Telegraph, The Hindu, Dainik Bhaskar, Dainik Jagran, etc.

ACCREDITATIONS

Integrated management system (IMS) as cer�fied by DNV, Netherlands

n ISO 9001:2015 - Quality Management System.

n ISO 14001:2015 - Environment Management System.

n OHSAS 18001:2007 - Occupa�onal Health & Safety Management System.

n Prac�cing TPM with an objec�ve to achieve zero defect, zero breakdown, zero pollu�on and zero loss.

n Credit ra�ng of A1+ for short term & A for long term from CARE.

3

Capacity increased to 100TPD with successful

commissioning of PM#2

Merged with Gulmohar Paper Mill, Kolkata

Ini�al Commissioning with 15 TPD capacity at

Balasore facility

5 MW Power Plant commissioned

Expansion of capaci�es to 135 TPD at Balasore

Commissioning of Power Plant-15MW, DIP-300TPD, Paper Machine-III-250TPD

One of the Largest Manufacturer of Newsprint & Market Leader in the Country

Listed on BSE

Paper Board Plant of 132,000 TPA with 10.5 MW power plant commissioned

Capacity of Board Plant increased to 180,000 TPA, PM-II Newsprint machine is being converted into

wri�ng & prin�ng grade & 15MW Power Plant upgraded to 18MW

1983

2017

2015

2010

1998

2000

2001

2005

2007

2008

Journey of Emami paper

4

IN FINANCIAL TERMS

n Opera�onal Income grew by 111% from a mere ̀ 538.80 crores in 2015-16 to a whopping ̀ 1,138.35 crores in 2016-17.

n Profit before Tax increased by 205% from ̀ 10.81 crores in 2015-16 to ̀ 32.99 crores in 2016-17.

n Cash Profits jumped by 134% from ` 37.49 crores in 2015-16 to ` 87.84 crores in 2016-17.

n Dividend doubled to 60% on Equity Shares and 8% on Preference Shares.

ON THE SHOP FLOOR

n With 100% capacity u�liza�on, combined produc�on stood at 2,78,489 MT during the year 2016-17.

n Over 100% capacity u�liza�on, the board plant achieved 1,36,691 MT produc�on thereby contribu�ng to 55% of the overall sales.

n Quality of finished paper & paperboard improved significantly through con�nuous online monitoring and automa�on.

n Installa�on of SAP ECC6 – EPH7 HANA CLOUD for con�nuous monitoring of real �me data.

n Strong employee support and not a single hour interrup�on in produc�on.

Highlights - 2016-17

5

ACCOLADES1 US FDA & FSC Cer�fica�on for MaxoFold (Folding Box Board), GlamKot (Coated Bleached

Board) and Eco Strong Virgin (Top Coated Grey Back Board).

2 Best CSR Ac�vi�es award at Balasore Mahotsav, Pallishree Mela & EXPO Odisha, 2016.

3 Greentech Environmental Award, 2014 (GOLD CATEGORY).

4 Greentech CSR Award, 2014 (GOLD CATEGORY).

Our Key RecognitionsOur main objec�ve is to be recognised as “quality enablers”. We always remain focused to deliver the highest quality of products at minimum cost. Our quality implementa�on efforts are all pervasive, beginning with a stated goal – customer sa�sfac�on and con�nuous quality improvement through the engagement of every associate.

The guidelines and protocols laid down by our management ensure that every batch of the products delivered by us is of right quality. Over the years, these ini�a�ves have earned as several laurels and accolades.

6

PuttingHumanity First

EMAMI PAPER MILLS LIMITED

CSR GOALSAt Emami paper, we are fully commi�ed towards our responsibili�es and contribu�on in an effec�ve manner to facilitate value-crea�on in various programmes of community developments.

Balvikash Kendra Organising mass marriage

Exercise notebook distribu�on in local schools Health Check-up Camp

7

Infrastructural development at Remuna college and local schools

Execu�ve ChairmanWell known Industrialist.

Rich and varied experience of 19 years in Marke�ng,

Corporate Planning, Business Development, Strategy

Formula�on and Overall Management.

Mr. A. V. Agarwal

Mr. Manish Goenka

Whole-�me DirectorIndustrialist with extensive business experience of 19

years, exper�se in Marke�ng, Corporate Planning, Business

Development, Strategy Formula�on and Overall

Management.

Board of

Shri R S Goenka (Standing)

Shri R S Agarwal (Si�ng)

Our Founders

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Independent DirectorFormer Chairman of

Company Law Board, has rich and varied experience in the Corporate Law. He is a well known personality

for his valuable contribu�on to the

Corporate world. He was also former member of

Indian Postal Service and having senior level

experience in public sector.

Mr. S. Balasubramanian

Execu�ve Director and CEOChartered Accountant,

extensive experience of 37 years in the area of Corporate Planning,

Business Development, Strategy Formula�on and

Overall Management.

Mr. P. S. Patwari Mr. J. Godbole

Independent DirectorFormer Chairman of IDBI,

having extensive experience in the area of

Finance, in par�cular Bank Finance, Corporate

Planning and Strategy formula�on.

Directors

Independent DirectorWell known Technocrat

and reputed project consultant in paper

industry with rich and varied experience in se�ng up of project.

Mr. U. G. Bhat

Director (Opera�ons)Renowned paper

technologist with rich and varied experience of 43

years in Paper Industry. He is opera�onal head of both the units at Balasore and

Kolkata. Having varied experience in se�ng up of

paper mill project.

Independent DirectorAn Industrialist with extensive business

experience over 3 decades. Rich and varied experience in

the area of Corporate Planning, Strategy

Formula�on and Overall Management.

Independent DirectorAn Industrialist with extensive business

experience in the area of Corporate Planning,

Strategy Formula�on and Overall Management.

Mr. H. M. Marda Mr. M. B. S. NairMr. J. K. Khetawat

DirectorExtensive experience in the area of Corporate

Planning, Business Development, Marke�ng

and Overall Business Management.

Mrs. Richa Agarwal

9

Sr. G.M. (Automa�on)

A.V.P. (Board Produc�on)

Vice President (Engineering)

Asst. Vice President(Kolkata Works)

Sr. G.M. (Works)

Sr. President

Sr. G.M. (Finance)A.V.P. (Marke�ng & Sales)

President (Finance) & CFO Vice President (Finance)& Secretary

Sr. G.M. (Civil)

G.M. (Project & Maint)(l) G.M. (Elect)G.M. (Commercial)

Mr. Shyam Patwari Mr. G. Mishra Mr. M. S. Yadav

Mr. G. SarafMr. S. K. KhetanMr. S. K. Jain Mr. B. Choudhury

Mr. S. Chakraborty

Mr. A. K. Singh

Mr. Kajol Roy Choudhury

Mr. Mukesh AgarwalMr. Soumyajit MukherjeeMr. H. K. Mohanty

Mr. Ranjan Kumar Jena

G.M. (HR & IR)

Mr. R. Mi�al

Management Team

Sr. G.M. (Purchase)

Mr. Anil Khemka

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G.M. (Power Plant)

D.G.M. (DIP)

Sr. D.G.M. (Paper)

D.G.M. (HR) D.G.M. (Elect) D.G.M. (Admin &Co-Ordina�on)

G.M. (Board Plant)G.M. (Import & Insurance)

D.G.M. (IT)

G.M. (Marke�ng)

Mr. Nirakar Panda

D.G.M. (Power Plant)

Mr. Chintamani Samal

D.G.M. (Automa�on)

Mr. Ganesh Pujari

D.G.M. (Q.A.)

Mr. Mukesh Agarwal

Mr. Ramesh Khun�a

Mr. N. C. Pa�naik

Mr. S. K. Brahma

Mr. K. S. V. Ravi Kumar

Mr. Pramod Jain

Mr. D. Hota

Mr. Chandan Mukherjee Mr. Sandeep JhaMr. B V K S S Prasad

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GLOBAL SCENARIO

Paper is one of the core industries and is linked to the basic human needs. Paper is the pre-requisite for educa on and literacy and its use is an index of advancement in these two fields as well as the overall well being of the society.

The global paper industry experienced stable growth during the last five years and is expected to con nue its growth momentum, reaching approximately US $256 billion in 2017 with a CAGR of 3%. The industry has been benefited from significant growth in paper and pulp output across developing economies, recovering aggregate consump on and rising demand for paperboard packaging products. Over the next five years, revenue growth is an cipated to remain strong for the industry. Economic growth in the BRICS na ons (Brazil, Russia, India, China and South Africa) will drive the industry’s steady growth.

The largest consumers are the USA, Canada, many Western European countries and Japan, with consump ons well in excess of 200 kg per person, compared with the global average of 60 kg per person. Paper and paperboard produc on has been expanding rapidly world-wide for over half a century and is expected to reach at a record level of 490 million tons by the end of 2020. According to recent paper demand study by global consul ng group POYRY the demand is expected to increase along with global economy, which is expected to grow at a pace of 3.0% per annum. Paper is now one of the most globalized commodi es in the world, with high volumes of produc on exported and imported. Global paper consump on is at a record high level and it will con nue to grow. The global paper industry has witnessed single digit growth in past few years with major growth impetus coming from emerging economies such as India and China. Asian markets are becoming large consump on centres on account of their high consump on base with low penetra on.

INDIAN PAPER INDUSTRY

The paper industry plays crucial role for the country’s social strength, as use of paper is supposed to be an index of cultural growth. The Indian paper industry accounts for about 3% of the world’s produc on of paper. Despite the con nued focus on digitalisa on, India’s demand for paper is expected to rise 53% in the next six years, primarily due to a sustained increase in the number of school-going children in rural areas. Growing consumerism, modern retailing, rising literacy (con nued government spending on educa on through the Sarva Shiksha Abhiyan) and the increasing use of documenta on will keep demand for wri ng and prin ng paper buoyant. Though India’s per capita consump on is quite low compared to global peers, things are looking up and demand is set to rise from the current 13 million ton to an es mated 20 million ton by 2023.

An India Ra ngs report es mates India’s per capita paper consump on at 9 Kg against 22 kg in Indonesia, 25 kg in Malaysia and 42 kg in China. The global average stands at 60 kg. This indicates there is a lot of headroom for growth in India. From a demand point of view, every one kg incremental per capita consump on results in addi onal demand of more than 1 million ton a year. The government’s sustained focus on literacy and expansion in organized retail are expected to posi vely affect paper consump on and demand in India. The paper industry has, thus, a cataly c role to play not only for the overall growth of the industry but also for the living standards of the people.

Management Discussion and Analysis

Emam

i Paper Mills Ltd.

Statutory ReportFinancial Report

13

NEWSPRINT SECTOR:

India’s Rs.30,000 crores ($4.48 billion) print media industry is set to grow by 8% annually for the next three years. The growth driver, though, isn’t English language dailies. It is regional media. Vernacular or local language print media will grow at 10-12% in fiscal 2017. Only 10% of the 1.2 billion Indians speak English. That leaves an overwhelming majority to rely on regional media. So there is s ll a huge untapped market. Addi onally, literacy rates in the country’s villages are improving. The figure for rural areas jumped from about 45% in 1991 to 69% in 2011, according to the latest Census of India.

A total of 5,423 new publica ons were registered during the year, taking the total count of registered publica ons to 110,851 from 105,443 in the previous year, according to a report, “Press in India 2015-16”, prepared by the Registrar of Newspapers of India (RNI). The rapid expansion of the Internet was accompanied by a newspaper revolu on. Growth in technology and the impor ng of new prin ng equipment meant that it was becoming commercially viable for newspapers to be printed in a variety of regional languages rather than predominantly either in Hindi or English. Increasing literacy rates across India has driven the localiza on of newspapers, made possible by the changes in prin ng technology.

Underwri ng the localiza on of India’s newspapers is media adver sing, which has grown alongside newspaper circula ons. The growth of media adver sing meant that Indian newspapers began to receive investment and this made the decentraliza on of news possible. Incen ves are o en offered in order to increase circula on.

However, the lower growth in GDP and decrease in the number of pages per newspaper due to lower adver sing spend, has resulted in a sharp decline for the demand of newsprint. The used newspaper being the main raw material for newsprint has a cascading impact on its availability and consequently the price of waste paper has started moving upwards. The impact was more severe on newsprint industry due to lower sales realiza on on account of cheaper imports coupled with rupee apprecia on. The newsprint industry is also expected to witness a decline in demand in long-term primarily on account of increasing adop on of digital media and prolifera on of smartphone usage.

PACKAGING BOARD SECTOR:

Packaging is among the high growth industries in India

and developing @11% per annum and becoming a preferred hub for packaging industry. Currently the 5th largest sector of India’s economy, the industry has reported steady growth over past several years and shows high poten al for much expansion, par cularly in the export market. Over the last few years Packaging Industry is an important sector driving technology and innova on growth in the country. The global packaging industry is developing and expanding day by day and Indian packaging industry is also growing at rapidly. This growth is primarily driven by factors like growing pharmaceu cal, food processing, manufacturing industry. FMCG, healthcare sector and ancillary in the emerging economies like China, India, Brazil, Russia and few other East European countries.

Domes c packaging board markets of various grades are exhibited in the Pie Chart below:

EMAMI’S INDUSTRY PRESENCE

Emami Paper Mills Limited, part of the Emami Group of Industries has paper mills located at Balasore (Odisha) and Dakshineswar (W.B.,Kolkata), is one of the most environment friendly paper mills in Eastern India. We manufacture interna onally benchmarked newsprint with the largest market share in India. The company also manufactures white creamwove, ledger and maplitho paper. Your company has gained a pres gious posi on in the market of Mul -Layer Coated Packaging Board products with focus on high-end segment of virgin fibre board with its brands “Emami Maxo Fold” & “Emami Glamkot” and also developed “Emami Eco Strong” for recycled board and established itself as a preferred quality manufacturer in the country catering wide range of customer needs.

Management Discussion and Analysis (Contd.)

Domes c Packaging Board Market

VirginGrade, 800,000

Coated Grey BackA, 130,000

Coated Grey BackB+, 800,000

Coated Grey BackB+, 750,000

Coated Grey Back B+Uncoated Grey Back

Coated Grey Back B+White Back B

Coated Grey Back AWhite Back B+

Uncoated GreyBack, 120,000

White BackB, 150,000

White BackB+, 250,000

(Qty. in M.T.)

14

STRENGTH AND OPPORTUNITIES

Strategic loca on – proximity to raw materials and nearness to the market.Large and growing domes c paper market and poten al for export for its productsPan India presenceClose proximity to Mahanadi Coal (MCL) fields for Balasore plant and Raniganj-Asansol (ECL) belt for Kolkata unit for procurement of coal and also proximity to Haldia port for import of pulp, waste paper, chemicals, spares & machineries.Availability of qualified technical personnel to ensure produc on of world class quality products.Strong customer base and dealers/distributors network.Governments thrust for improving educa on and literacy in the country.Sufficient land and other infrastructure available with the Company for future expansion and growth.Well established Research and Development (R&D) facili es/ac vi es encouraging innova on, product development and cost saving plan.Steady increase in disposable income, preference to branded products by consumers and healthy growth in organized sector with an cipated robust demand for paper and paperboard.Lowest cost manufacturer with advanced technology for manufacturing of wri ng & prin ng, newsprint and Mul layer Coated Board with self-sufficient cap ve power plants.

THREATS

Increasing coal and logis c costNumerous Regional Trade scheme (RTs)/Free Trade Agreement (FTAs) without adequate safeguard to the domes c industries.Cheap dumping of newsprint from abroad.Increasing compe on from electronic media and digitaliza on.Small and unorganized industry players

an internal control and checking system for security of its IT assets, which efficaciously operates to protect IT assets. Your Company has successfully migrated its total IT support system in SAP ECC6 – EPH7 HANA CLOUD during the year.RISK AND CONCERNSYour Company iden fied various risks and implemented its Mi ga on Plans. Risk Policy and monitored frame works has been approved by the Audit Commi ee and the Board of Directors of the Company. Risk repor ng and monitoring is being conducted regularly by Governance Risk and Compliance Commi ee (GRCC) at all the opera on levels and repor ng directly to the Audit Commi ee and the Board on half-yearly basis.HUMAN RESOURCES AND TRADE RELATIONSYour Company considers people as its biggest asset and takes con nuous efforts to improve the working environment with focus on employees’ well-being and capability-building to enable them to perform at their best for the Company. Your Company has qualified and


IT SUPPORTTo use informa on technology (IT) extensively in its opera ons and to achieve greater produc vity and efficiency, the Company has deployed a customized SAP solu on for its various spheres of diverse ac vi es. SAP supports the Company’s complex business process and strengthens internal financial control policy and procedures adopted by the company.Enterprise wide IT and ERP infrastructure is monitored and supported by a dedicated in-house IT team in areas such as SAP support, Data Centre Management, Networking, So ware development and systems administra on, Hardware Capacity Planning ac vi es etc. SAP supports the Company’s complex business process and strengthens internal financial control policy and procedures adopted by the company. Firewalls, an -virus and end-point security measures adopted by the company to enforce strict security prac ces in all nodes to mi gate network security risks and to protect company’s data and other IT resources from all external threats and vulnerabili es. The company has developed

Emam

i Paper Mills Ltd.


15

talented human resources at all levels of opera ons. People are our real strength and as such the Company is significantly increasing its investment in its employees with training and development in order to align employees with requirement of safety, customer support, market needs, opera onal excellence, technology upgrada on, process improvements, innova on and behavioral competencies. With regular communica on and consistent efforts by the management, it is ensured that the employees are aligned at common objec ves and have the right opinion on business evolu on. Your Company strongly believes in fostering a culture of trust and mutual respect amongst all its employees and seeks to ensure that Emami Paper Mills Limited (EPM) values and principles are understood by all. The Company has a Policy on Prohibi on, Preven on and Redressal of Sexual Harassment of Women at Workplace and ma ers connected therewith or incidental thereto covering all the aspects as contained under the “The Sexual Harassment of Women at Workplace (Prohibi on and Redressal) Act, 2013”.SAFETYYour Company has adopted an Integrated Policy which clearly defined Occupa onal Health, Safety and Working Environment. Suitable Personal Protec ve Equipment (PPE) is provided to all the concerned employees and efforts are being taken to educate and mo vate the employees as well as communicate to interested par es to foster team spirit and contribute towards implementa on of Safety Policy of the Company. Periodical Training Programms are conducted on handling hazardous chemicals, Material handling, Usage of PPEs, firefigh ng etc. to improve safety awareness among the employees and contract workmen. Mill side Safety Audit, HAZOP study and Risk Analysis are carried out periodically through experts for industrial safety and their recommenda ons are implemented. Material Safety Data Sheets (MSDS) are displayed at all the hazardous chemical storage areas. Tes ng of Pressure Vessels, Li ing tackles, Safety belts, Conveyor Systems, Building Stability, Chemical stored FRP tanks etc., are carried out through competent persons. An updated Onsite Emergency Plan (OEP) and Off-site Emergency Plan are available to properly address emergencies. Periodic mock drills on hazardous chemical leakages and fire incident are conducted to ensure the effec veness of emergency preparedness. The en re mill is covered with fire hydrant points with pressurized water mains firefigh ng. Also fire ex nguishers are provided to strategic points. In addi on, one mobile fire tender is available to tackle any emergency. Since incep on, EPM has maintained excellent safety record.

INTERNAL CONTROL SYSTEMYour Company has an adequate and effec ve Internal Control Mechanism in place to ensure efficient conduct of its opera ons, security of assets, preven on and detec on of frauds/errors, accuracy and completeness of accoun ng records and the mely prepara on of reliable financial informa on as per its Management Informa on System (MIS).Your Company has well planned procedures for ensuring Internal Financial Controls and has also appointed external & independent Audit Firms as its Internal Auditor for periodical checking and monitoring the Internal Control Measures for both its plants at Balasore and Kolkata as well as at the business and corporate levels at Head Office.Internal Auditors are present at the Audit Commi ee Mee ngs where Internal Audit Reports are discussed alongside of management comments and the findings and observa on of the Internal Auditors. The Terms of Reference of the Audit Commi ee inter alia includes reviewing the adequacy of the internal control environment, monitoring implementa on of the ac on plans emerging out of Internal Audit findings including those rela ng to strengthening Company’s Risk Management Systems and discharge of statutory mandates.Your Company has a Comprehensive Budgetary Control System in opera on and its’ Key Performance Indicators (KPI) are set for all important opera onal parameters. These are monitored and reviewed regularly by the management in Management Commi ee Mee ngs, which is chaired by the Execu ve Director of the Company and par cipated by all departmental heads and necessary correc ve and preven ve ac ons are being ini ated.CAUTIONARY STATEMENTStatements in the Management Discussion and Analysis describing the Company’s objec ves, projec ons, es mates, expecta ons or predic ons may be forward-looking statements’ within the meaning of applicable securi es, laws and regula ons. Actual results could differ materially from those expressed or implied. The important factors that could make a difference to the Company’s opera ons include global and Indian demand and supply condi ons, finished goods prices, raw material availability and prices, cyclical demand, changes in government regula ons, environmental laws, tax regimes, economic developments within India and the world, as well as other factors such as li ga on and industrial rela ons.


16

Dear ShareholdersYour Directors take pleasure in presen ng their Thirty Fi h Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2017.

*Your Company has not accounted for proposed dividend as a liability as at March 31, 2017 as per revised Accoun ng Standard (AS) 4 ‘Con ngencies and Events occurring a er the Balance Sheet date’. Proposed Dividend was however accounted for as a liability as at March 31, 2016 in line with the exis ng Accoun ng Standard applicable at that me.

FINANCIAL SUMMARY

Par culars 2016-17 2015-16Opera onal Income 113835.48 53880.49Profit before interest and deprecia on 14485.35 5363.11Less: Interest 5701.73 1613.78Profit Before Deprecia on & Tax 8783.62 3749.33Deprecia on 5484.67 2668.05Profit Before Taxa on 3298.95 1081.28Less : Provision for Current taxa on (MAT) 695.40 MAT Credit en tlement (695.40)Income Tax for earlier year -Provision for deferred tax 705.44 705.44 (1710.63)Profit a er Tax 2593.51 2791.91Add : Surplus brought forward 3351.51 1586.25Balance available for appropria on 5945.02 4378.16Appropria onsProposed Dividend on Equity Shares* - 363.00Proposed Dividend on Preference Shares* - 490.00Tax on Dividend* - 173.65Transfer to General Reserve - -Balance carried forward 5945.02 3351.51

5945.02 4378.16

(` in Lacs)

PERFORMANCE HIGHLIGHT

This year has been very encouraging for your Company con nuing to report impressive topline growth. Your Company delivered record earnings during the year and achieved its highest ever revenue of Rs. 1138.35 Crores as compared to `538.80 crores in 2015-16 registering a jump of 111%. Earnings before Interest and Tax (EBIDTA) increased by 170% to `144.85 crores as against ` 53.63 crores in 2015-16. During the year under review, the combined produc on from newsprint, wri ng & prin ng paper and packaging board stood at 2,78,489 MT and the capacity u lisa on stood at 100%. Your Company was able to capitalize on the market condi ons through its opera onal excellence and higher efficiency.

Your Company has gained pres gious posi on in the high end packaging product segment through its newly installed ‘Mul -Layer Coated Board’ plant. Your Company

also con nued to enjoy dominant posi on being one of the preferred suppliers of Newsprint in India being world class quality manufacturer of Newsprint.

OPERATIONS AND OUTLOOK

The year witnessed remarkable performance with all-round growth coming from the newly setup Mul -Layer Coated Board plant. The newly commissioned plant is designed to produce 132,000 TPA of high grade paperboard which finds its usage in pharmaceu cal, healthcare, food, cosme cs and other consumer product industries in various sizes and gsms ranging from 170-450. The board plant has recorded 136691 MT of produc on thereby contribu ng 55% to overall sales and has achieved over 100% of capacity u lisa on in the very first year of its commercial produc on.

The demand for Value Added Paperboards (VAP) is expected to grow at a CAGR of around 11-12% during

Directors' Report

Emam

i Paper Mills Ltd.


17

Directors' Report (Contd.)

the next 5 years. The faster rate of growth in VAP is expected to be driven by the increased demand for branded packaged products; growth in organised retail; increasing awareness on food safety & hygienic packaging and use of packaging as a key differen ator specially in the FMCG sector, food, pharmaceu cal, garments and beverages.

Despite heightened compe ve intensity, your Company established its leading posi on in the VAP segment during the year. This was achieved through focus on product quality, process innova on, improved manufacturing efficiencies and enhanced service delivery level with be er logis c arrangements.

The year 2016-17 was very challenging for the domes c newsprint industry par cularly during the last two quarters. The lower growth in GDP and decrease in the number of pages per newspaper due to lower adver sing spend, has resulted in a sharp decline for the demand of newsprint. The used newspaper being the main raw material for newsprint has a cascading impact on its availability and consequently the price of waste paper has started moving upwards. The impact was more severe on newsprint industry due to lower sales realiza on on account of cheaper imports coupled with rupee apprecia on. The newsprint industry is also expected to witness a decline in demand going forward primarily on account of increasing adop on of digital media and prolifera on of smartphone usage.

Wri ng & Prin ng segment par cularly branded copier paper is expected to grow at a CAGR of 9.7%. Growth in this segment is primarily a ributed to con nued government support towards increase in literacy rate and corporate spending. Considering the sluggish newsprint demand and to capitalize the opportunity in wri ng & prin ng segment, your Company has decided to convert its exis ng Paper Machine (PM) 2 towards more demand & profit driven wri ng & prin ng paper.

Despite challenges like erra c demand due to demone sa on and compe ve market scenario your Company has been able to put forth a remarkable performance. During the year, various measures were undertaken by your Company to enhance product efficiency and reduce costs. To mi gate the risk of increase in the prices of raw material your Company went ahead to keep sufficient stock of waste paper & other raw material and forward booking of raw materials. Your Directors believe that these ini a ves will be beneficial for the Company in the long-run.

Your Directors believe that the performance of the Company has been sa sfactory despite varied economic

and industry challenges. With the long awaited strategic and economical reforms on the anvil the paper industry is poised to grow further. Emami Paper being a catalyst and pioneer in the paper industry is a rac vely posi oned to take benefit of this growing opportunity and looks to the future with op mism and confidence.

DIVIDEND

Your Directors are pleased to recommend dividend of 60% (` 1.20 per share) on Equity shares to ` 2/- each and 8% p.a. dividend on Preference shares of ` 100/- each for the financial year ended 31st March, 2017. The Dividend, if approved by the shareholders, will absorb ` 1,463.55 Lacs (Including the dividend tax of ` 247.55 Lacs).

ENVIRONMENT MANAGEMENT

Your company’s approach towards environmental protec on is guided by Environmental Policy, commitment towards a sustainable planet and a clean environment as well as a healthy workplace for employees. The Company focuses on environmental management not only to comply with the applicable regulatory regime but also strives to contribute posi vely to the communi es around its opera ons through varied community ini a ves, encouraging biodiversity and natural resource conserva on

To meet its environmental objec ves, the Company adopts:

• Compliance with all relevant legisla ve requirements.

• Minimum Pollu on Load in terms of Liquid Discharge and Air Emission.

• S mulate ra onal use of resources through behavioural and technological improvements.

• Minimizing waste and maximizing recycling/ reuse.

• Crea ng Human Awareness in Environment, Safety and Health.

• Promo ng comprehensive programs for con nual improvement of Environmental performance.

• Reduce specific energy consump on and associated greenhouse gas emission.

Your Company has adopted one of the best Integrated Management Systems (IMS) cer fied by DNV (Det Norske Veritas AS, the Netherlands) through their rigorous surveillance and recer fica on audits, encompassing the following:

ISO 9001:2015 - Quality Management System

18


Financial year

DividendID No.

Last date of Payment of dividend

Total Amount of Dividend

Unclaimed Dividend as on 31.03.2017

Last date for transfer to I.E.P.F. on

2009-10 28th 28/08/2010 363.00 0.66 02/09/20172010-11 29th 09/09/2011 363.00 0.73 14/09/20182011-12 30th 11/09/2012 363.00 0.68 16/09/20192012-13 31st 11/09/2013 363.00 1.05 16/09/20202013-14 32nd 09/09/2014 363.00 0.89 14/09/20212014-15 33rd 09/09/2015 363.00 0.98 14/09/20222015-16 34th 08/09/2016 363.00 0.99 13/09/2023

Total : 2541.00 5.98DETAILS OF SUBSIDIARY/ JOINT VENTURES/ ASSOCIATE COMPANIES

The Company does not have any Subsidiary or Joint Venture/ Associate Companies.

DETAILS OF DEPOSITS

The Company has neither accepted nor renewed any deposits under sec on 73 of the Companies Act, 2013 during the year under review.

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

The informa on pertaining to Conserva on of Energy,

Technology Absorp on and Foreign Exchange Earnings and Outgo as required under Sec on 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure I and is a ached to this Report.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return in form MGT – 9 is given in Annexure II to the Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

The company has formulated the policy for development and implementa on of Corporate Social Responsibility as also required under Sec on 135 of the Companies Act, 2013.

ISO 14001:2015 - Environment Management System

OHSAS 18001:2007 - Occupa onal Health & Safety Management System.

Prac cing TPM with an objec ve to achieve zero defect, zero breakdown, zero pollu on, and zero loss.

At Emami Paper, there has been substan al development in energy conserva on by installing energy efficient equipment. Key environmental control equipments, mechanism and monitoring instruments maintained by the company are as below:

• Online Ambient air quality monitoring system (3 nos)

• Online stack emission monitoring system (3 nos)

• State-of-the-art effluent treatment plant (ETP)

• Use of ETP final water for agricultural and planta on purpose

• 100% sludge used as co-fuel in the power boiler in Balasore Plant

• Decanter for secondary sludge dewatering

• Rainwater harves ng through 17 nos of recharge well

• Air pollu on control through ESP, Ash conveying system pneuma cally through close pipe line, Dust Suppression System, Water Sprinkling System

• Fly ash is used in making fly ash bricks.

• Green belt development

These systems and assets have enabled the Company to safeguard the environment by mee ng all statutory norms. As a measure of sustainable growth policy of the company, it con nuously gears up its resources to provide be er protec on to environment and natural resource conserva on.

SHARE CAPITAL

The company has neither issued shares with differen al vo ng rights nor granted stock op ons or sweat equity.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of sec on 125 of the Companies Act, 2013, the unclaimed or unpaid Dividend is due for remi ance to the Investor Educa on and Protec on Fund established by the Central Government in accordance with the schedule given below:-

(` in Lacs)

Emam

i Paper Mills Ltd.


19


informa on. The Audit Commi ee evaluates the internal financial control system periodically.

AUDITORS AND AUDITORS REPORT

1. STATUTORY AUDITORS

As per sec on 139 and other applicable provisions of the Companies Act, 2013 the Company has appointed M/s. Agrawal Subodh & Co. Chartered Accountants (Registra on No. 319260E) as the Statutory Auditors of the Company, for a period of five years ll the conclusion of 40th Annual General Mee ng of the Company, subject to ra fica on by the shareholders in every AGM of the company on the remunera on and other terms and condi ons as may be fixed by the Board of Directors. The Board recommends the approval by the shareholders regarding the appointment of M/s Agrawal Subodh & Co, Chartered Accountants as Statutory Auditors of the Company

The present Statutory Auditors, M/s S. K. Agrawal & Co., Chartered Accountants and M/s Salarpuria Jajodia & Co., Chartered Accountants, Unit Auditors (Kolkata Unit) will con nue their office ll the conclusion of ensuing 35th Annual General Mee ng of the Company.

2. COST AUDIT

Your Company has appointed M/s. V. K. Jain & Co. Cost Accountant as Cost Auditors of the Company for the Financial Year 2016-17 for both the units at Balasore and Kolkata under sec on 148 of the Companies Act, 2013, at the Board Mee ng held on 24th May, 2016 to audit cost accoun ng records as may be applicable to the Company for the financial year 2016-17 and their remunera on was approved at the last Annual General Mee ng.

In terms of Sec on 148 of the Companies Act, 2013 read with the Companies (Audit & Auditors) Rules, 2014, M/s V.K.Jain & Co. Cost Accountant, have been reappointed as Cost Auditor for the year 2017-18 as required under the Companies Act, 2013, the remunera on payable to Cost Auditor is required to be placed before the members in General Mee ng for their ra fica on. As such, a resolu on seeking members’ ra fica on for the remunera on payable to them is included in the No ce convening the Annual General Mee ng.

3. SECRETARIAL AUDIT

Pursuant to the provisions of sec on 204(1) of the Companies Act, 2013, read with the Companies (Appointment and Remunera on of Managerial

Further, the informa on pursuant to Sec on 134(3)(o) of the Companies Act, 2013 and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 are given in Annexure III outlining the main ini a ves during the year under review.

GROWTH WITH SOCIAL RESPONSIBILITY:

Emami Paper Mills Limited through its CSR ac vi es takes up programs that benefit the communi es in & around its place of work and ensure over a period of

me, enhancement in the quality of life & economic well-being of the local people and thereby establishing its presence as a good corporate ci zen.

EPML is commi ed to help the inhabitants of the surrounding villages by taking part in drinking water supply schemes, laying and improving roads, culverts, providing ligh ng facili es, development of parks, supply of equipment and instruments to Fair Price Shops, improving infrastructure facili es in Government Schools, conduc ng medical camps, providing financial assistance to needy people, contribu ng for cultural programmes, sports ac vi es, construc on / renova on works in the place of worship etc. This has paved the way for establishing a harmonious rela onship with the surrounding neighborhood.

EPML undertakes Community Development ac vi es by categorizing the needs of the community under various heads, viz., Infrastructure and basic ameni es, providing drinking water supply, educa on, medical camps and environment, promo on of Oriya literature, Art & Culture, assistance for the differently – abled, training of unemployed youth, Organizing sports and talent compe ons etc.

The company takes pride for its sense of responsibility towards the community and environment and the way it is duty bound for enrichment of the life of less privileged people and protec on of the environment around its area of opera on. The company has taken its social responsibility as a part of its opera ng policy and gearing its social ac vi es to promote inclusive and sustained growth.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

Your Company has laid down internal financial controls to be followed by the Company and such policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the preven on and detec on of frauds and errors, the accuracy and completeness of the accoun ng records, and the mey prepara on of reliable financial

20


Personnel) Rules, 2014 the company has appointed M/s MKB & Associates, Company Secretary in prac ce for the financial year 2016-17 to undertake the Secretarial Audit of the company. The Secretarial Audit Report is annexed herewith as Annexure IV.

AUDITORS’ REPORT/ SECRETARIAL AUDIT REPORTThe observa ons made in the Auditors’ Report read together with relevant notes thereon are self-explanatory and hence do not call for any further explana ons or comments by the Board under Sec on 134 of the Companies Act, 2013.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 20131) The company has not given Inter Corporate loan to

any Body corporates covered under the provisions of sec on 186 of the Companies Act, 2013 during year ended 31st March, 2017.

2) The loan and advances given to employees are covered under the remunera on policy of the company. Hence sec on 186 of the Companies Act, 2013 is not applicable.

3) The company has not provided any guarantee.4) The details of the investments made by the company

are given in the notes to the financial statements

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIESAll related party transac ons that were entered into during the financial year were on arm’s length basis and were in the ordinary course of the business. There are no materially significant related party transac ons made by the company with promoters, Key managerial personnel or other designated persons which may have poten al conflict with interest of the company at large.

Necessary disclosure regarding transac ons with related par es has been made in the Notes to the Audited Accounts.

The related party transac ons policy has been given on the website of the company under the head Investors-Corporate Governance.

Web link: h p://www.emamipaper.in/downloads related-party-policy-tr.pdf

COMPOSITION OF AUDIT COMMITTEEThe composi on of Audit Commi ee of the company is men oned in the Corporate Governance Report a ached to this report.DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM As per requirement of sec on 177 (9) of the Companies

Act, 2013, the company has established a Vigil mechanism for the directors and employees to report genuine concerns, as recommended by the Audit Commi ee and approved by the Board of Directors in their mee ng held on 21st January, 2014. The Company’s Whistleblower Policy encourages Directors and employees to bring to the Company’s a en on, instances of unethical behavior, actual or suspected incidents of fraud or viola on of the Code of Conduct that could adversely impact the Company’s opera ons, business performance and / or reputa on. The Policy provides that the Company inves gates such incidents, when reported, in an impar al manner and takes appropriate ac on to ensure that the requisite standards of professional and ethical conduct are always upheld. It is the Company’s Policy to ensure that no employee is vic mized or harassed for bringing such incidents to the a en on of the Company. The prac ce of the Whistleblower Policy is overseen by the Audit Commi ee of the Board and no employee has been denied access to the Commi ee. The Whistleblower Policy is available on the Company’s corporate website www.emamipaper.in STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICYPursuant to sec on 134(3)(n) of the Companies Act, 2013 and relevant regula ons of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015, the company has adopted Risk Management policy for iden fica on and implementa on of Risk Mi ga on Plan which is reviewed by the Management, Audit Commi ee and the Board on half yearly basis. In the opinion of the Board there is no such risk which may threaten the existence of the company.DIRECTORS & KEY MANAGERIAL PERSONNELA) Directors re rement by rota on Shri M.B.S.Nair, Director (Opera ons) and Smt. Richa

Agarwal (Director) would re re by rota on and, being eligible, offer themselves for re-appointment.

B) Declara on by an Independent director(s) and re-appointment, if any

All Independent directors have given declara ons that they meet the criteria of independence as laid down under sec on 149(6) of the Companies Act, 2013 and relevant regula ons of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 (as amended from me to me).

C) Key Managerial Personnel During the year there was no change in the Key

Managerial Personnel of your Company.

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i Paper Mills Ltd.


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POLICY ON DIRECTORS APPOINTMENT AND REMUNERATIONPursuant to sec on 178 of the Companies Act, 2013, the Board of the directors of the company has approved the revised Nomina on and Remunera on policy as recommended by the Nomina on and Remunera on Commi ee in their mee ng held on 27th January, 2015.The policy is disclosed in the Corporate Governance Report.ANNUAL EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORSPursuant to the provisions of sec on 134(3)(p) of the Companies Act, 2013 and relevant regula ons of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 (as amended from me to me), the Board has carried out the annual performance evalua on of its own performance, its commi ees and individual directors on 16th May, 2017, on the basis of agreed norms for evalua on.Further, the independent directors have evaluated the performance of non-independent directors at a separate mee ng held on 31st January, 2017.The manner in which the evalua on carried out has been explained in the Corporate Governance Report.Mee ngs of the Board and Commi ee thereofThe details have been covered in the Corporate Governance Report.MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEESThe informa on required pursuant to Sec on 197 read with Rule 5 of the Companies (Appointment and Remunera on of Managerial Personnel) Rules, 2014 in respect of managerial personnel and employees of the company is a ached herewith in Annexure V.RECEIPT OF COMMISSION BY THE DIRECTOR FROM HOLDING OR SUBSIDIARY COMPANY UNDER SECTION 197(14)Not Applicable CORPORATE GOVERNANCEThe Corporate Governance Report and Management’s Discussion & Analysis Report are set out as Annexure VI in this Report.DIRECTORS’ RESPONSIBILITY STATEMENTIn terms of sec on 134(5) of the Companies Act, 2013 the Directors would like to state that:-1. In the prepara on of annual accounts, the applicable

accoun ng standards had been followed along with proper explana on rela ng to material departures;

2. The Directors had selected such accoun ng policies and applied them consistently and made judgments and es mates 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 and loss of the company for that period;

3. The Directors had taken proper and sufficient care for the maintenance of adequate accoun ng records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preven ng and detec ng fraud and other irregulari es;

4. The Directors had prepared the annual accounts on a going concern basis;

5. The Directors had laid down internal financial controls to be followed by the company and such controls are adequate and opera ng effec vely; and

6. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and opera ng effec vely;

MISCELLANEOUS1. Industrial Rela ons: During the year under review,

the Company enjoyed cordial rela onship with the workers and employees at all levels.

2. Significant and material orders passed by the regulators or courts or tribunals impac ng the going concern status and company’s opera ons in future:

No such orders passed during the year under review.ACKNOWLEDGEMENTThe Board acknowledges the understanding and support shown by its lending financial ins tu ons, banks, distributors, customers, suppliers, employees and other business associates. Your Company operated efficiently due to a culture of professionalism, integrity and con nuous improvement leading to sustainable and profitable growth.

For and on behalf of theBoard of Directors

Place : Kolkata A.V. AGARWALDate : 16th May, 2017 Execu ve Chairman

22

ANNEXURE - I TO THE DIRECTORS’ REPORT

Informa on under sec on 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 and forming part of the Directors’ Report for the year ended March, 31, 2017.

A. CONSERVATION OF ENERGY :

i) Energy conserva on measures taken:

• Discarded water from top layer of Board Machine is u lized in filler layer street, instead of recycling the same in top layer loop with dedicated poly disc filter. Running of various pumps and recovered chest agitator engaged with poly disc filter are discon nued resul ng into reduc on of power consump on by 200 unit per hour.

• Variable Frequency Drives are installed for reduc on in power due to thro led opera on condi on in equipment like HD cleaners, centri-cleaners etc.

• In board mill v – belts are replaced by cogged flat belts in iden fied equipment, thereby reducing specific power consump on of those equipments.

• 85 TPH boiler is being run in Auto Combus on mode along with adop on of op miza on measures in maintaining primary air pressure, wind box pressure; bed height is also adjusted to reach op mum efficiency. Result is substan al reduc on in unburnt coal.

• Thorough audit of steam consump on pa ern and process return condensate is conducted. Steam consump on is op mized in that process.

ii) Addi onal investment and proposal for reduc on in energy consump on:

• Exis ng 15 MW (SST-150 model) turbine will be upgraded to SST-300 model which will generate 18 MW electricity with same steam inlet flow. This will increase heat rate of the turbine by 10%.

• Each 250 KW HT motors of two condenser cooling water pumps will be replaced with 110 KW LT motors, which will save 200 unit per hour.

Annexure to the Directors' Report • In effluent treatment plant present air

blowers will be replaced with energy efficient blowers having permanent magne c synchronous motor with air foil bearing, resultant saving 250 KW per hour.

• Steam and condensate system of PM # 1 and PM # 2 will be modified to reduce steam consump on per ton of paper.

• Electrical system study including harmonic study for improvement of plant availability and reliability.

B. TECHNOLOGICAL ABSORPTION

i) Research & Development ( R & D ):

a) Specific area in which in-house R&D projects are carried out by the company during 2016-17

• In top coat recipe tradi onal binder element is replaced with more effec ve alterna ve having different chemical composi on resul ng into increased printability, improved heat and light fastness.

• In pre and middle coat use of low TG binder gives be er binding strength which results in be er IGT and be er acceptable board for high speed prin ng machine.

• Alterna ve Op cal Brightness Agent (OBA) having high E value is introduced in order to maintain high and consistent brightness in paperboard.

• In produc on of SBS grade paperboard, use of uniform furnish mix in all four layers introduced instead of using separate furnish mix for top layer that used in other three layers. This makeover has contributed in op mized paper quality, efficient use of recovered fiber and resultant saving in cost.

• Fabric width in all layers is increased to stop fiber flushing from edges and consequen al reduc on in paper break.

• Clay par cles is increased in top coat recipe which contributes to be er prin ng result by increased surface smoothness and gloss.

• Change in process logic of auto pilot, which maintain uniform paperboard GSM.

Emam

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Annexure - I to the Directors' Report (Contd.)

• Steam pulse line modifica on for be er cylinder DP control

• Modifica on in pulper totalizer and break mer for be er analysis and record keeping.

• Modifica on of web break related logic with pre-dryer group stop and chopper to avoid jamming and to reduce me.

• Secondary sludge has been used in screw press along with primary sludge and be er dryness is achieved by using oxidizing bio side. Be er dryness increases usable heat value of sludge while u lized in boiler.

b) Benefits derived as a results of the above R & D

Efforts made towards in-house R & D ini a ves has derived following benefits:-

– Be er quality paper and paperboard with increased paper strength and improved printability.

– Saving in cost

– Decreased paper breaks

– Reduced consump on of energy and water

– Smoother and improved produc on process

c) Future ac on plan

• Condi on Monitoring System (CMS) will be installed to monitor bearings of cri cal rolls and cylinders of board mill. Regular monitoring will facilitate preven ve maintenance and trouble free opera on.

• Con nual improvement of yield.

• Con nual improvement of brightness, strength, bulk and other parameters of paper and paperboard.

• Reduc on of fresh water consump on by recycling and reuse of treated process water and effluent.

• Use of alterna ve chemicals for quality op miza on and cost saving.

• Con nual reduc on of power and steam consump on in produc on process.

• Maximize u liza on of treated effluent in green belt development.

d) Expenditure on R & D

No separate accoun ng for Research and Development ac vi es was made as the same was connected with process and product development.

ii) Technology absorp on:

Efforts made towards technology absorp on, adop on and innova on

• Tail Threading system installed in board mill, which helps in reducing feeding delay me and reduc on in broke genera on.

• Rotary type consistency transmi ers are installed at mixing chest in Board Mill, which facilitates uniform GSM in produced paperboard.

• Online PH-transmi er is installed at board machine wet end for online monitoring and control chemistry at wet end. By installing online PH-transmi er wet end breaks are be er controlled.

• Six break sensors are installed at iden fied units of the paperboard machine, which will facilitate the machine to resume produc on faster a er paper break, by reduc on of jamming during paper break.

• Control valve – feedback system is installed CCK for be er control over chemical consump on and uniform coa ng.

• Centralized lubrica on system is installed in wire and press sec on of board mill, which eliminates break down from human error in lubrica on.

• TC coated winder drum rolls and rider roll are upgraded to rubber coated rolls in paperboard manufacturing machine. Rubber rolls are best suited for paperboard produc on and will go long before it requires a change.

• Five web choppers are installed at iden fied sec ons of board machine to ensure that paper sheet is cut completely during paper breaks and no jamming occurs so that paper can be reeled faster a er a paper break.

24

• Fully automa c tail cu er is installed at wet end of the board machine, which will eliminate possibility of jamming at wet end in case of paper break, consequen ally me will be saved to start paper reeling a er a paper break.

• Five maxi flex blade with pneuma c loaded doctor has been installed to ensure that no paper get wrapped on the dryer cylinders even at a very high speed.

Benefits derived as result of above efforts

• Overall opera onal efficiency of the plants improved by adop on and absorp on of state-of-the art technologies.

• Quality of finished paper and paperboard improved by introduc on of con nuous online monitoring and automa on.

• Break downs are avoided and life of machinery and equipment are increased by installa on of various health checking measures along with preven ve maintenance.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

2016-17 2015-16Foreign exchange earnings

2,556.56 714.73

Foreign exchange outgo

46,381.64 31,302.94

Annexure - I to the Directors' Report (Contd.)

Emam

i Paper Mills Ltd.


25

Annexure - II to the Directors' Report (Contd.)

Form No. MGT-9

EXTRACT OF ANNUAL RETURNas on the financial year ended on 31.03.2017

[Pursuant to sec on 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administra on) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN L21019WB1981PLC034161

ii) Registra on Date 26/09/1981

iii) Name of the Company EMAMI PAPER MILLS LIMITED

iv) Category / Sub-Category of the Company

Company limited by shares/ Indian Non-Government Company

v) Address of the registered office and contact details

ACROPOLIS, Unit 1, 15th Floor, 1858/1, Rajdanga Main RoadKolkata -700107Phone: (033) 66271301, Fax: (033) 66271338Email id: [email protected]

vi) Whether listed company Yes

vii) Name, Address and Contact details of Registrar and Transfer Agent, if any

MAHESHWARI DATAMATICS PRIVATE LIMITED23, R. N. Mukherjee Road, 5th FloorKolkata - 700001Phone: 033-2243-5029/2248-2248Fax: 033-22484787Email: [email protected]

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business ac vi es contribu ng 10 % or more of the total turnover of the company shall be stated:-

SI.No.

Name and Description of main products / services

NIC Code of the Product/ service

% to total turnover of the company

1 Newsprint 17012 38.00%2 Wri ng and Prin ng Paper 17093 6.86%3 Paper Boards 17016 54.94%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

SI.No.

Name and Address of the Company

CIN/GLN Holding/ Subsidiary/ Associate

% of shares held

Applicable Sec on

1 Not Applicable – – – –

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IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity (i) Category-wise Share Holding

Category of Shareholders No. of Shares held at the beginning of the year (01.04.2016)

No. of Shares held at the end of the year (31.03.2017)

%Change during the

yearDemat Physical Total %of Total Share

Demat Physical Total % of Total Share

A. Promoter(1) Indiana) Individual/ HUF 5656976 0 5656976 9.3505 5656976 0 5656976 9.3505 NILb) Central/ State Government(s)c) Bodies Corp. 39576160 0 39576160 65.4162 39576160 0 39576160 65.4162 NILd) Banks / FI e) Any Other....Sub-total (A1) 45233136 0 45233136 74.7667 45233136 0 45233136 74.7667 NIL(2) Foreigna) Individual/ HUF 125000 0 125000 0.2066 125000 0 125000 0.2066 NILb) Bodies Corp.c) Ins tu onsd) Qualified Foreign Investor e) Any Other....Sub-total (A2) 125000 0 125000 0.2066 125000 0 125000 0.2066 NILTotal shareholding of Promoter and Promoter Group A = (A)(1) + (A)(2)

45358136 0 45358136 74.9733 45358136 0 74.9733 4.9733 NIL

B. Public Shareholding1. Ins tu onsa) Mutual Fundsb) Banks / FI 0 0 0 0 0 0 0 0 0c) Central/ State Government(s) 0 0 0 0 0 65352 65352 0.108 100d) Venture Capital Funds 0 0 0 0 0 0 0 0 0e) Insurance Companies 0 0 0 0 0 0 0 0 0f) FIIs 0 0 0 0 0 0 0 0 0g) Foreign Venture Capital Investorsh) Qualified Foreign Investor 0 0 0 0 0 0 0 0 0i) Any otherSub-total (B1) 0 0 0 0 0 65352 65352 0.108 1002. Non Ins tu onsa) Bodies Corp.i) Indian 10977401 109000 11086401 18.3249 7334274 103000 7437274 12.2932 -32.9150ii) Overseas 0 0 0 0 0 0 0 0 0b) Individualsi. Individual Shareholder’s holding: nominal share capital up to Rs.1 lakh

1425049 265204 1690253 2.7939 1400389 205127 1605516 2.6538 -5.0133


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Category of Shareholders No. of Shares held at the beginning of the year (01.04.2016)

No. of Shares held at the end of the year (31.03.2017)

%Change during the

yearDemat Physical Total %of Total Share

Demat Physical Total % of Total Share

ii. Nominal Share Capital in excess of Rs.1 lakh

347064 0 347064 0.5737 5994031 0 5994031 9.9076 1627.0679

c) Others (Specify)Non Resident Indians 10620 0 10620 0.0176 13561 0 13561 0.0226 28.5404Qualified Foreign InvestorCustodian of Enemy PropertyForeign Na onalsClearing Members 15926 0 15926 0.0263 22940 0.000 22940 0.0379 44.0412Trusts Foreign Bodies D RForeign Por olio InvestorsNBFCs registered with RBI 1990650 0 1990650 3.2904 2000 0 2000 0.0033 -99.8995Sub – total (B2) 14766710 374204 15140914 25.0268 14767285 308127 15075412 24.9184 -0.4326Total Public shareholding(B) = (B)(1)+(B)(2)

14766710 374204 15140914 25.0268 14767285 373479 15140764 25.0264 -0.0010

C. Shares held by Custodian for GDRs & ADRs

0 0 0 0 0 0 0 0 0

Grand Total (A + B + C) 60124846 374204 60499050 100.000 60125571 373479 60499050 100.000 0.0000

(ii) Shareholding of Promoters

SINo

Shareholder’s Name Shareholding at the beginning of the year 01.04.2016

Shareholding at the endof the year 31.03.2017

%Change in

Shareholding

During the year

No.of

Shares

% oftotal

Sharesof the

company

%ofShares

Pledged/encumbered

to totalshares

No.of

Shares

% oftotal

Sharesof the

company

%ofShares

Pledged /encumbered

to totalshares

1 Diwakar Viniyog Pvt Ltd 9469810 15.6528 NIL 9469810 15.6528 NIL NIL2 Emami Limited 7946000 13.1341 NIL 7946000 13.1341 NIL NIL3 Suntrack Commerce Pvt Ltd 7633900 12.6182 NIL 7633900 12.6182 NIL NIL4 Bhanu Vyapaar Pvt Ltd 6005250 9.9262 NIL 6005250 9.9262 NIL NIL5 Emami Enclave Makers Pvt Ltd 2906000 4.8034 NIL 2906000 4.8034 NIL NIL6 Emami High Rise Pvt Ltd. 2808000 4.6414 NIL 2808000 4.6414 NIL NIL7 Suraj Viniyog Pvt Ltd 2807200 4.6401 NIL 2807200 4.6401 NIL NIL8 Pri Sureka 1520926 2.5140 NIL 1520926 2.5140 NIL NIL9 Radheshyam Goenka 1161250 1.9195 NIL 1161250 1.9195 NIL NIL10 Sushil Kumar Goenka 726750 1.2013 NIL 726750 1.2013 NIL NIL11 Raj Kumar Goenka 530000 0.8760 NIL 530150 0.8763 NIL NIL12 Meena Goenka 289050 0.4778 NIL 289050 0.4778 NIL NIL13 Santosh Goenka 239550 0.3960 NIL 239550 0.3960 NIL NIL14 Saroj Goenka 137000 0.2264 NIL 137000 0.2264 NIL NIL


28

15 Amitabh Goenka 125000 0.2066 NIL 125000 0.2066 NIL NIL16 Ritu Goenka 0 NIL NIL 124813 0.2063 NIL 100.00017 Shru Goenka 0 NIL NIL 124813 0.2063 NIL 100.00018 Ashish Goenka(HUF) 0 NIL NIL 124812 0.2063 NIL 100.00019 Amitabh Goenka(HUF) 0 NIL NIL 124812 0.2063 NIL 100.00020 Indu Goenka 111400 0.1841 NIL 111400 0.1841 NIL NIL21 Mohan Goenka 102000 0.1686 NIL 102000 0.1686 NIL NIL22 Sushil Kumar Goenka (HUF) 100500 0.1661 NIL 100500 0.1661 NIL NIL23 Manish Goenka 87000 0.1438 NIL 87000 0.1438 NIL NIL24 Ashish Goenka 75000 0.1240 NIL 75000 0.1240 NIL NIL25 Dhiraj Agarwal 25000 0.0413 NIL 25000 0.0413 NIL NIL26 Aditya Vardhan Agarwal 12500 0.0207 NIL 12500 0.0207 NIL NIL27 Harsh Vardhan Agarwal 10750 0.0178 NIL 10750 0.0178 NIL NIL28 Puja Goenka 10500 0.0174 NIL 10500 0.0174 NIL NIL29 Usha Agarwal 8300 0.0137 NIL 8300 0.0137 NIL NIL30 Radheshyam Agarwal 3500 0.0058 NIL 3500 0.0058 NIL NIL31 Shan Devi Agarwal 1750 0.0029 NIL 1750 0.0029 NIL NIL32 Pramod Bajoria 1750 0.0029 NIL 1750 0.0029 NIL NIL33 Laxmi Devi Bajoria 1750 0.0029 NIL 1750 0.0029 NIL NIL34 Richa Agarwal 1500 0.0025 NIL 1500 0.0025 NIL NIL35 Suresh Kumar Goenka 499250 0.8252 NIL 0 0.0000 NIL -100.000

Total: 45358136 74.9733 NIL 45358286 74.9733 NIL 0.0003

(iii) Change in Promoters’ Shareholding (please specify, if there is no change)

Sl.No.

Par culars Shareholding at the beginning of the year

Cumula ve shareholding during the year

No.of Shares % of total shares of Company

No. of Shares Percentage of Total shares of Company

At the beginning of the year

There is no change to promoters’ shareholding during the period April 1, 2016 to March, 31, 2017 except inter – se transfer.

Datewise Increase/Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g.allotment/Transfer/bonus/sweat/equity etc.)At the End of the year (or on the date of separa on, if prepared during the year)


Emam

i Paper Mills Ltd.


29

(iv) Shareholding Pa ern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

SI. No

For Each of the Top 10 Shareholders Shareholding at the beginning of the year


No. of shares % of total shares of company


Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc.):

1. INDISTOCK PRIVATE LIMITED#As on 01-04-2016As on 30-09-2016- TransferAs on 7-10-2016- TransferAs on 31-03-2017

580000-500000

-800000

0.95870.82650.13220.0000

58000080000

00

0.95870.13220.00000.0000

2. BALJIT SECURITIES PVT.LTDAs on 01-04-2016As on 29-07-2016- TransferAs on 05-08-2016- TransferAs on 12-08-2016- TransferAs on 31-03-2017

0400000400000

-8000000

0.00000.66120.66121.32230.0000

0400000800000

00

0.00000.66121.32230.00000.0000

3. EAST INDIA SECURITIES LTDAs on 01-04-2016As on 31-03-2017

460000460000

0.76030.7603

460000460000

0.76030.7603

4 GYAN TRADERS LIMITED# As on 01-04-2016As on 07-10-2016 - Transfer As on 31-03-2017

300000-300000

0

0.49590.49590.0000

30000000

0.49590.00000.0000

5. MONET SECURITIES PRIVATE LTD.#As on 01-04-2016As on 23-09-2016 - Transfer As on 31-03-2017

775000-775000 0

1.28101.28100.0000

77500000

1.28100.00000.0000

6. PLACID LIMITED# As on 01-04-2016As on 29-07-2016 - Transfer As on 05-08-2016 - Transfer As on 12-08-2016 - Transfer As on 03-31-2017

1985150-400000

-1200000-385150

0

3.28130.66121.98350.63660.0000

19851501585150

38515000

3.28132.62010.63660.00000.0000

7. PENGUIN TRADING & AGENCIES LIMITED As on 01-04-2016As on 31-03-2017

10000001000000

1.65291.6529

10000001000000

1.65291.6529

8. ANAND RATHI GLOBAL FINANCE LIMITED As on 01-04-2016As on 31-03-2017

17100001710000

2.82652.8265

17100001710000

2.82652.8265


30

SI. No





9. JMS MINING SERVICES PRIVATE LIMITED#As on 01-04-2016As on 06-05-2016 - Transfer As on 31-03-2017

1842386-1842386

0

3.04533.04530.0000

184238600

3.04530.00000.0000

10. SPARK SECURITIES PRIVATE LTD As on 01-04-2016As on 30-09-2016 - Transfer As on 07-10-2016 - Transfer As on 31-03-2017

0500000

-5000000

0.00000.82650.82650.0000

0500000

00

0.00000.82650.00000.0000

11. SIMPLEX INFRASTRUCTURES LIMITED As on 01-04-2016As on 31-03-2017

370500370500

0.61240.6124

370500370500

0.61240.6124

12. SYSTEMATIX SHARES AND STOCKS (INDIA) LIMITED As on 01-04-2016As on 06-05-2016 - Transfer As on 13-05-2016 - Transfer As on 21-10-2016 - Transfer As on 28-10-2016 - Transfer As on 11-11-2016 - Transfer As on 18-11-2016 - Transfer As on 25-11-2016 - Transfer As on 02-12-2016 - Transfer As on 03-03-2017 - Transfer As on 24-03-2017 - Transfer As on 31-03-2017 - Transfer

01842386

-1842386500

-299300

-451-50700

50-537-213

0.00003.04533.04530.00080.00050.00050.00070.00010.00120.00010.00090.0004

01842386

0500201501

500

700750213

0

0.00003.04530.00000.00080.00030.00080.00010.00000.00120.00120.00040.0000

13. Avees Trading And Finance Private Limited As on 01-04-2016As on 31-03-2017

27699992769999

4.57864.5786

27699992769999

4.57864.5786

14. BHAGWATI PRASAD JALAN*As on 01-04-2016As on 05-08-2016 - Transfer As on 12-08-2016 - Transfer As on 31-03-2017

97000350000100000547000

0.16030.57850.16530.9041

97000447000547000547000

0.16030.73880.90410.9041

15. PANKAJ JALAN*As on 01-04-2016As on 05-08-2016 - Transfer As on 12-08-2016 - Transfer As on 23-09-2016 - Transfer As on 07-10-2016 - Transfer As on 31-03-2017

0125000400000100000255000880000

0.00000.20660.66120.16530.42151.4546

0125000525000625000880000880000

0.00000.20660.86781.03311.45461.4546


Emam

i Paper Mills Ltd.


31

SI. No





16. NIRAJ JALAN *As on 01-04-2016As on 05-08-2016 - Transfer As on 12-08-2016 - Transfer As on 23-09-2016 - Transfer As on 07-10-2016 - Transfer As on 31-03-2017

0125000450000200000200000975000

0.00000.20660.74380.33060.33061.6116

0125000575000775000975000975000

0.00000.20660.95041.28101.61161.6116

17. PARWATI DEVI JALAN *As on 01-04-2016As on 12-08-2016 - Transfer As on 23-09-2016 - Transfer As on 07-10-2016 - Transfer As on 14-10-2016 - Transfer As on 21-10-2016 - Transfer As on 31-03-2017

0435150100000396000

-146000146000931150

0.00000.71930.16530.65460.24130.24131.5391

0435150535150931150785150931150931150

0.00000.71930.88461.53911.29781.53911.5391

18. PRABHADEVI PAWANKUMAR SANGHAI *As on 01-04-2016As on 3-05-2016 - Transfer As on 31-03-2017

0345500345500

0.00000.57110.5711

0345500345500

0.00000.57110.5711

*Not in the list of Top 10 shareholders as on 01/04/2016. The same has been reflected above since the shareholder was one of the Top 10 shareholders as on 31/03/2017.

#Ceased to be in the list of Top 10 shareholders as on 31/03/2017. The same is reflected above since the shareholder was one of the Top 10 shareholders as on 01/04/2016.

(v) Shareholding of Directors and Key Managerial Personnel(KMP):

SI.No

For Each of the Directors and KMP


Cumula ve Shareholdingduring the year

No. of shares

% of total shares

No. of shares

% of total shares

1. A.V. Agarwal At the beginning of the year Transfer/Bonus/ Purchase/SaleAt the end of the year

12500 Nil

0.0207Nil

12500Nil

12500

0.0207Nil

0.02072. Manish Goenka At the beginning of the year

Transfer/Bonus/ Purchase/SaleAt the end of the year

87000Nil

0.1438Nil

87000Nil

87000

0.1438Nil

0.14383.. P. S. Patwari At the beginning of the year

Transfer/Bonus/ Purchase/SaleAt the end of the year NIL

4.. J. Godbole At the beginning of the year Transfer/Bonus/ Purchase/SaleAt the end of the year

NIL


32

SI.No

For Each of the Directors and KMP


Cumula ve Shareholdingduring the year

No. of shares

% of total shares

No. of shares

% of total shares

5.. S. Balasubramanian At the beginning of the year Transfer/Bonus/ Purchase/SaleAt the end of the year

NIL

6. U.G.Bhat At the beginning of the year Transfer/Bonus/ Purchase/SaleAt the end of the year

NIL

7. J. K. Khetawat At the beginning of the year Transfer/Bonus/ Purchase/SaleAt the end of the year

NIL

8. H. M. Marda At the beginning of the year Transfer/Bonus/ Purchase/SaleAt the end of the year

2150Nil

0.0036Nil

2150Nil

2150

0.0036Nil

0.0036

9. M.B.S.Nair At the beginning of the year Transfer/Bonus/ Purchase/SaleAt the end of the year

1000Nil

0.0017Nil

1000Nil

1000

0.0017Nil

0.001710. Richa Agarwal At the beginning of the year


1500Nil

0.0025Nil

1500Nil

1500

0.0025Nil

0.002511. S. K. Khetan At the beginning of the year


NIL

12. G. Saraf At the beginning of the year Transfer/Bonus/ Purchase/SaleAt the end of the year

NIL

V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment

Secured Loansexcluding deposits

Unsecured Loans

Deposits(Trade)

Total Indebtedness

Indebtedness at the beginning of the financial yeari) Principal Amount ii) Interest due but not paidiii) Interest accrued but not due

1,07,412.35

514.58

449.53

31.10

1,07,861.88

545.68

Total (i+ii+iii) 1,07,926.93 480.63 1,08,407.56Change in Indebtedness during the financial year• Addi on • Reduc on

8151.93 2590.80

63.6637.38

8215.592628.18

Net Change 5561.13 26.28 5587.41 Indebtedness at the end of the financial yeari) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due

1,12,836.13

651.93

471.75

35.16

1,13,307.88

687.09Total (i+ii+iii) 1,13,488.06 506.91 1,13,994.97


Emam

i Paper Mills Ltd.


33

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remunera on to Managing Director, Whole- me Directors and/or Manager:

SI.No.

Par culars of Remunera on Name of MD/WTD/ Manager Total AmountShri P. S.

PatwariShri A.V. Agarwal

Shri Manish Goenka

Shri M.B.S. Nair

1. Gross salary (a) Salary as per provisions contained in sec on 17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961

(c) Profits in lieu of salary under sec on 17(3) of the Income-tax Act, 1961

1,35,94,800

20,77,050

60,10,080

2,69,603

60,10,080

52,253

86,06,422

10,01,910

3,42,21,382

34,00,816

2. Stock Op on NIL NIL NIL NIL NIL3. Sweat Equity NIL NIL NIL NIL NIL4. Commission

- as % of profit - Others, specify….

NIL NIL NIL NIL NIL

5. Others, please specify NIL NIL NIL NIL NILTotal (A) 1,56,71,850 62,79,683 60,62,333 96,08,332 3,76,22,198Ceiling as per the Act 1,71,20,000 77,20,000 77,20,000 1,03,44,995 4,29,04,995

B. Remunera on to other Directors:

SI. No.

Par culars of Remunera on Name of Directors Total AmountShri J.N.

GodboleShri H.M.

MardaShri S.

BalasubramanianShri J.K.

KhetawatShri U.G.

BhatSmt.Richa

Agarwal1. Independent Directors

• Fee for attending board/committee meetings• Commission • Others, please specify

2,20,000NILNIL

2,50,000NILNIL

1,50,000NILNIL

2,05,000NILNIL

1,15,000NILNIL

NILNILNIL

9,40,000NILNIL

Total (1) 2,20,000 2,50,000 1,50,000 2,05,000 1,15,000 NIL 9,40,0002. Other Non-Executive

Directors• Fee for attending board/committee meetings • Commission• Others, please specify

NIL

NILNIL

NIL

NILNIL

NIL

NILNIL

NIL

NILNIL

NIL

NILNIL

1,30,000

NILNIL

1,30,000

NILNIL

Total (2) NIL NIL NIL NIL NIL 1,30,000 1,30,000Total (B) = (1 + 2) 2,20,000 2,50,000 1,50,000 2,05,000 1,15,000 1,30,000 10,70,000Total Managerial Remunera onOverall Ceiling as per the Act 12,00,000 14,00,000 8,00,000 11,00,000 5,00,000 6,00,000 56,00,000


34

A. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/ MANAGER/ WTD

SI.No.

Par culars of Remunera on Key Managerial Personnel

C.F.O.Shri S. K. Khetan

Company SecretaryShri G. Saraf

Total

1. Gross salary (a) Salary as per provisions contained in sec on 17(1) of the Income-tax Act, 1961(b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961(c) Profits in lieu of salary under sec on 17(3) of the Income-tax Act, 1961

72,96,070

7,72,050

-

39,88,310

5,31,533

-

1,12,84,380

13,03,583

-

2. Stock Op on - - -3. Sweat Equity - - -4. Commission - as % of profit - others, specify... - - -5. Others, please specify - - -

Total 80,68,120 45,19,843 1,25,87,963Ceiling as per the Act N.A. N.A. N.A.

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Sec on of theCompanies Act

BriefDescrip on

Details of Penalty /Punishment/Compoundingfees imposed

Authority[RD / NCLT/

NCLAT COURT]

Appeal made, if any (give Details)

A. COMPANYPenalty NIL NIL NIL NIL NILPunishment NIL NIL NIL NIL NILCompounding NIL NIL NIL NIL NILB. DIRECTORSPenalty NIL NIL NIL NIL NILPunishment NIL NIL NIL NIL NILCompounding NIL NIL NIL NIL NILC. OTHER OFFICERS IN DEFAULTPenalty NIL NIL NIL NIL NILPunishment NIL NIL NIL NIL NILCompounding NIL NIL NIL NIL NIL


Emam

i Paper Mills Ltd.


35

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES1. A brief outline of the company’s CSR Policy is stated herein below: Our aim is to undertake proac ve engagement with stakeholders to ac vely contribute to the socio-economic

development of the periphery/ community in which it operates. We shall create a posi ve footprint within the society by crea ng inclusive and enabling infrastructure/ environment for livable communi es. We shall emphasize on providing basic nutri on/ health care facili es with special focus on establishing health centers for the mother and child as well as the elderly.

To pursue these objec ves we will con nue to: i) Work ac vely in areas of eradica on of hunger and poverty, including preven ve health care and sanita on

and making available safe drinking water. ii) Provide opportunity and financial assistance for the promo on of educa on. iii) Provide medical aid to the needy and down trodden. Web link : h p://www.emamipaper.in/downloads/csr-policy.pdf2. Composi on of CSR Commi ee:

Name of the Member Designa onShri A.V. Agarwal, Execu ve Chairman ChairmanShri J Godbole, Independent Director MemberShri P.S.Patwari, Execu ve Director MemberShri Manish Goenka, Whole me Director MemberShri H.M. Marda, Independent Director MemberSmt. Richa Agarwal, Woman Director Member

3. Average net profit of the company for last three financial years: Rs.1675.60 lacs4. Prescribed CSR Expenditure (2% of the amount as in item 3 above): Rs.33.51 lacs 5. Details of CSR spend for the financial year 2016-17: a) Total amount spent for the financial year: Rs.191.91 lacs b) Amount unspent, if any: c) Manner in which the amount spent during the financial year is detailed below:

Sl.No.

Projects/ Ac vi es Sector Loca on Amount outlay

(Budget) project or program

wise

Amount spent on the

project or program

Cumula ve expenditure

up to repor ng period

Amount spent: Direct or through

implemen ng agency

1 Eradica ng hunger, poverty and malnutri on, promo ng preven ve health care and sanita on and making available safe drinking water.

Eradica on of hunger & health care

Balasore (Odisha) & Dakshineswar (Kolkata)

70.00 68.40 68.40 68.40(Direct)

2 Promo ng educa on, including special educa on and employment enhancing voca on skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects.

Literacy Balasore (Odisha) & Dakshineswar (Kolkata)

30.00 36.86 36.86 36.86(Direct)

Annexure - III to the Directors' Report (Contd.)

36

Annexure - III to the Directors' Report (Contd.)

Sl.No.

Projects/ Ac vi es Sector Loca on Amount outlay

(Budget) project or program

wise

Amount spent on the

project or program

Cumula ve expenditure

up to repor ng period

Amount spent: Direct or through

implemen ng agency

3 Promo ng gender equality, empowering women and measures for reducing inequali es faced by socially and economically backward groups.

Gender equality & women empowerment


15.00 9.62 9.62 9.62(Direct)

4 Ensuring environmental sustainability, ecological balance, animal welfare, agroforestry, conserva on of natural resources.

Environment Balasore (Odisha) & Dakshineswar (Kolkata)

37.00 34.32 34.32 34.32(Direct)

5 Protec on of na onal heritage, art and culture including restora on of buildings and sites of historical importance and works of art.

Protec on of Historical importance and na onal heritage


16.00 15.06 15.06 15.06(Direct)

6 Contribu on to Prime Ministers Na onal Relief Fund or any other fund setup by the Central Government for socio economic development and relief

Dona on Balasore (Odisha) & Dakshineswar (Kolkata)

5.00 -- -- --

7 Rural Development Development Balasore (Odisha) & Dakshineswar (Kolkata)

25.00 27.27 27.27 27.27 (Direct)

8 Building CSR ac vi es as per Rule 4(6)

Employee service


2.00 0.38 0.38 0.38(Direct)

200.00 191.91 191.91 191.91

Emam

i Paper Mills Ltd.


37

Annexure - IV to the Directors' Report (Contd.)

FORM NO. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2017

[Pursuant to sec on 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remunera on of Managerial Personnel) Rules, 2014]

ToThe Members,EMAMI PAPER MILLS LIMITED

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate prac ces by EMAMI PAPER MILLS LIMITED (hereina er called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evalua ng the corporate conducts/statutory compliances and expressing our opinion thereon.

The Company’s Management is responsible for prepara on and maintenance of secretarial and other records and for devising proper systems to ensure compliance with the provisions of applicable laws and Regula ons.

Based on our verifica on of the books, papers, minute books, forms and returns filed and other records maintained by the Company and also the informa on provided by the Company, its officers, agents and authorized representa ves during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2017 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the repor ng made hereina er:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2017, to the extent applicable, according to the provisions of:

i) The Companies Act, 2013 (the Act) and the rules made thereunder;

ii) The Securi es Contracts (Regula on) Act, 1956 and Rules made thereunder;

iii) The Depositories Act, 1996 and Regula ons and Bye-laws framed thereunder;

iv) Foreign Exchange Management Act, 1999 and the Rules and Regula ons made thereunder to the extent of Foreign Direct Investment, Overseas Direct investment and External Commercial Borrowings;

v) The Regula ons and Guidelines prescribed under the Securi es & Exchange Board of India Act, 1992 (“SEBI Act”) or by SEBI, to the extent applicable:

a) The Securi es & Exchange Board of India (Substan al Acquisi on of Shares and Takeover) Regula ons, 2011

b) The Securi es & Exchange Board of India (Prohibi on of Insider Trading) Regula ons, 2015

c) The Securi es & Exchange Board of India (Issue of Capital and Disclosure Requirements) Regula ons, 2009

d) The Securi es & Exchange Board of India (Employee Stock Op on Scheme and Employee Stock Purchase Scheme) Guidelines, 1999

e) The Securi es & Exchange Board of India (Issue and lis ng of Debt securi es) Regula ons, 2008

f) The Securi es & Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regula ons, 1993

g) The Securi es & Exchange Board of India (Delis ng of Equity Shares) Regula ons, 2009

h) The Securi es & Exchange Board of India (Buyback of Securi es) Regula ons, 1998

38

vi) Other than fiscal, labour and environmental laws which are generally applicable to all manufacturing/trading companies, the following laws/acts are also, inter alia, applicable to the Company:

a) The Environment Protec on Act 1986

b) The Water ( Preven on and Control of Pollu on ) Act, 1974

c) The Air ( Preven on and Control of Pollu on ) Act 1981

d) Hazardous Waste (Management, Handling, and Transboundary Movement) Rules 2008, as amended from me to me.

e) The Indian Boilers Act 1923

We have also examined compliance with the applicable clauses of the following:

a) Secretarial Standards issued by The Ins tute of Company Secretaries of India. [Applicable from 1st July, 2015]

b) The Lis ng Agreements entered into by the Company with the BSE Limited and the provisions of the Securi es and Exchange Board of India (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015. [Applicable from 1st December, 2015]

During the period under review the Company has generally complied with the provisions of the Act, Rules, Regula ons, Guidelines, Standards, etc. men oned above.

We further report that

a) The Board of Directors of the Company is duly cons tuted with proper balance of Execu ve Directors, Non-Execu ve Directors and Independent Directors. The changes in the composi on of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

b) Adequate no ce is given to all directors to schedule the Board Mee ngs, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further informa on and clarifica ons on the agenda items before the mee ng and for meaningful par cipa on at the mee ng.

c) None of the directors in any mee ng dissented on any resolu on and hence there was no instance of recording any dissen ng member’s view in the minutes.

We further report that subject to our observa on above there are adequate systems and processes in the Company commensurate with the size and opera ons of the Company to monitor and ensure compliance with applicable laws, rules, regula ons and guidelines.

We further report that during the audit period there are no specific events/ac ons which have any major bearing on the Company’s affairs.

This report is to be read with my le er of even date which is annexed as Annexure – 1 which forms an integral part of this report.

For MKB & Associates Company Secretaries

Manoj Kumar BanthiaPartner

Date: 16th May, 2017 ACS no. 11470Place: Kolkata COP no. 7596

Annexure - IV to the Directors' Report (Contd.)

Emam

i Paper Mills Ltd.


39

Annexure – 1

To,The Members,EMAMI PAPER MILLS LIMITED

My report of even date is to be read along with this le er.

1. It is management’s responsibility to iden fy the Laws, Rules, Regula ons, Guidelines and Direc ons which are applicable to the Company depending upon the industry in which it operates and to comply and maintain those records with same in le er and in spirit. My responsibility is to express an opinion on those records based on our audit.

2. I have followed the audit prac ces and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verifica on was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the process and prac ces I followed provide a reasonable basis for our opinion.

3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Wherever required, I have obtained the Management’s Representa on about the compliance of Laws, Rules, Regula ons, Guidelines and Direc ons and happening events, etc.

5. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effec veness with which the management has conducted the affairs of the Company.

For MKB & Associates Company Secretaries

Manoj Kumar BanthiaPartner

Date: 16th May, 2017 ACS no. 11470Place: Kolkata COP no. 7596

40

Annexure - V to the Directors' ReportMANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES

A) Details of every employee of the company as required under Rule 5(1) of Companies (Appointment and Remunera on of Managerial Personnel) Rules, 2014 as amended vide No fica on dated 30th June, 2016 by Ministry of Corporate Affairs for the year ended 31st March, 2017:

i) Percentage increase in remunera on of each director, CEO, CFO, CS or manager and ra o of the remunera on of each Director to the median remunera on of the employees of the Company for the financial year 2016-17:

Name Designa on Percentage increase (%) Ra o

Shri A. V. Agarwal Execu ve Chairman 25.32 34:1Shri Manish Goenka Whole me Director 9.13 33:1Shri P. S. Patwari Execu ve Director (CEO) 15.48 85:1Shri M. B. S. Nair Whole me Director 18.41 51:1Shri J. Godbole Non-Execu ve, Independent Director NA 1:1Shri H. M. Marda Non-Execu ve, Independent Director 13.64 1:1Shri U. G. Bhat Non-Execu ve, Independent Director NA 1:1Shri S. Balasubramanian Non-Execu ve, Independent Director NA 1:1Shri J. K. Khetawat Non-Execu ve, Independent Director NA 1:1Smt. Richa Agarwal Non-Execu ve,(Woman Director) NA 1:1Shri S. K. Khetan President (Finance) & CFO 13.87 42:1Shri G. Saraf Vice President (Finance)& CS 9.95 24:1

ii) Percentage increase in the median remunera on of employees in the financial year: 24.49% iii) Number of permanent employees on the rolls of company: 1486 iv) Explana on on:

Average percen le increase already made in the salaries of employees other than the managerial personnel in the last financial year

13.59%

Percen le increase in the managerial remunera on 13.89%Jus fica on for increase in the managerial remunera on

Reten on of talented technical and managerial personnel as per Remunera on Policy of the Company.

Excep onal circumstances for increase in the managerial remunera on, if any

N.A.

v) Affirma on that the remunera on is as per the remunera on policy of the company: Yes, the remunera on has been paid as per the remunera on policy of the company.

B) I) Details of every employee of the Company who as required under Rule 5(2) of Companies (Appointment and Remunera on of Managerial Personnel )Rules, 2014 for the year ended 31st March, 2017 :

Sl.No

Name and Age Qualifica on& Experience (in years)

Designa on Date of Joining

% of equity shareheld

Remunera on Previous employment

Employment throughout the year1. P. S. Patwari

(62 years)B.Com, FCA(37 years)

Execu ve Director (CEO)

28.11.1994 NIL 1,71,19,080/- Hindusthan Motors Ltd.

2. Shri M.B.S. Nair(66 years)

B.Sc (Che) Paper Technology from IPT, Saharanpur(43 years)

Whole TimeDirector(Director Operations)

16.11.1999 0.0017 1,03,44,995/- Sri Venkatasa Paper & Boards

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i Paper Mills Ltd.


41

Annexure - V to the Directors' Report (Contd.)

II) Details of Top Ten employees of the company as required under Rule 5(2) of Companies (Appointment and Remunera on of Managerial Personnel) Rules, 2014 as amended vide No fica on dated 30th June, 2016 by Ministry of Corporate Affairs for the year ended 31st March, 2017:

Sl.No

Name and Age Qualifica on& Experience(in years)

Designa on Date of Joining % of equity shareheld

Remunera on Previous employment

(i) Employment throughout the year1. Shri A.V.

Agarwal(42 years)

B.Com(19 years)

Execu ve Chairman 23.10.2000 0.0207 70,14,683/- Gulmohar Paper Ltd.

2. Shri Manish Goenka(43 years)

MBA (19 years)

Whole TimeDirector

01.02.2000 0.1438 67,97,333/- Gulmohar Paper Ltd.

3. Shri P. S. Patwari (62 years)

B.Com, FCA(37 years)

Execu ve Director (CEO)

28.11.1994 NIL 1,71,19,080/- Hindusthan Motors Ltd.

4. Shri M.B.S. Nair(66 years)

B.Sc (Che)Paper Technology from IPT Saharanpur(43 years)

Whole me Director (Director- Opera ons)

16.11.1999 0.0017 1,03,44,995/- Sri Venkatesa Paper & Boards.

5. Shri S.K.Jain(61 years)

B.Sc, MBA (R&A),PG in Paper Industry(39 years)

Senior President 08.11.2005 NIL 94,94,707/- Khanna Paper Mills Ltd.

6. Shri S. K.Khetan(52 years)

ACA, ACS,(28 years)

President (Finance) & C.F.O.

11.10.1999 NIL 86,27,819/- Titagarh Industries Ltd.

7. Shri G.Saraf(60 years)

FCS, LLB(42 years)

Vice President (Finance) & Secretary

30.03.1994 NIL 48,67,584/- Polar Latex Ltd.

8. Shri SoumajitMukherjee(42 years)

P.G. in Economics Senior G.M.(Marke ng & Sales)

15.04.2014 NIL 37,35,280/- J K Paper Limited

9. Shri Anil Kr.Singh(51 years)

B.Sc.PG Diploma in Paper & Paper Technology (27 years)

Senior G.M.(Board Produc on)

15.10.2012 NIL 34,34,778/- J K Paper Limited

10. Shri Mukesh KumarAgarwal(44 years)

B.Com (Hons)ACA,C.S.(Inter)(20 years)

Senior G.M. (Finance) 17.04.1997 NIL 33,66,453/- Indian Oil Corpora on Ltd.

Note: Shri P. S. Patwari, Shri M. B. S. Nair, Shri S. K. Jain, Shri Manish Goenka, Shri S. K. Khetan, Shri G. Saraf, Shri Soumajit Mukherjee, Shri Mukesh Kumar Agarwal, Shri Anil Kr.Singh are not rela ve of any other Director, Key Managerial Personnel and Manager of the company. Shri A. V. Agarwal is the husband of Smt.Richa Agarwal, Non-Execu ve, Non-Independent Director of the Company.

42

Report on Corporate GovernanceANNEXURE - VI TO THE DIRECTORS' REPORT

1. COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE

The Company’s philosophy on Corporate Governance refers to a Professional System of management leading to the efficient conduct of business. This comprises transparency and accountability with the objec ve of serving the best interest of all the stakeholders – shareholders, customers, lenders, employees, government and society.

2. BOARD OF DIRECTORS

• Composi on

The Board of Directors (“Board”) comprises of 10(Ten) Directors out of which 6 (Six) Directors are Non-Execu ve Directors.

The Composi on of the Board of Directors is in conformity with Regula on 17 of the Securi es and Exchange Board of India (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015.

The composi on and category of Board of Directors and other details are as under:

SlNo

Name of the Director

DIN Execu ve/ Independent/ Non execu ve

No. of Board

Mee ngs a ended

A endance at previous

AGM on 10.08.2016

No. of outside

Director-ship held in other

PublicLimited

Companies

No. of membership/ chairmanship in other

Board/ Commi ee

Chairman Member

01 Mr. A. V. Agarwal 00149717 Chairman,Execu ve

4 Yes 3 - -

02 Mr. Manish Goenka 00363093 Execu ve 4 Yes 2 - -03 Mr. P. S. Patwari 00363356 Execu ve 4 Yes 1 - -04 Mr. U. G. Bhat 00353361 Non-Execu ve,

Independent4 Yes 2 - -

05 Mr. J. Godbole 00056830 Non-Execu ve,Independent

4 Yes 8 3 5

06 Mr. H. M. Marda 00855466 Non-Execu ve,Independent

4 Yes 8 2 1

07 Mr. S. Balasubramanian

02849971 Non-Execu ve,Independent

3 No * 8 2 7

08 Mr. J.K Khetawat 00920819 Non-Execu ve,Independent

4 Yes 3 - -

09 Mr. M.B.S. Nair 03086056 Execu ve 3 Yes - - -

10 Mrs.Richa Agarwal 01505726 Non-Execu ve 4 Yes - - -

* Mr. S. Balasubramanian could not a end Annual General Mee ng held on 10th August, 2016 due to preoccupa on.

3. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR

During the year Four Board Mee ngs were held on 24th May, 2016, 10th August, 2016, 26th October, 2016, and 31st January, 2017.

4. DISCLOSURE OF RELATIONSHIP BETWEEN DIRECTORS INTER-SE

Mrs. Richa Agarwal, Non-Execu ve Director of the Company is wife of Mr. Aditya Vardhan Agarwal, Execu ve Chairman of the Company.

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i Paper Mills Ltd.


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Report on Corporate Governance (Contd.)

5. INFORMATION PLACED BEFORE THE BOARD OF DIRECTORS

As required under the Regula on 17(7) read with Part – A of Schedule-II of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 the informa ons which were placed before the Board are as follows:

A. Annual Opera ng Plans and Budgets and any updates.

B. Capital Budgets and any updates.

C. Quarterly results for the listed en ty and its opera ng divisions or business segments.

D. Minutes of Mee ngs of Audit Commi ee and other Commi ees of the Board of Directors.

E. The Informa on on recruitment and remunera on of Senior Officers just below the level of Board of Directors, including appointment or removal of Chief Financial Officer and the Company Secretary.

F. Show cause, demand, prosecu on no ces and penalty no ces, which are materially important.

G. Fatal or serious accidents, dangerous occurrences, any material effluent or pollu on problems.

H. Any material default in financial obliga ons to and by the listed en ty, or substan al non-payment for goods sold by the listed en ty.

I. Any issue, which involves possible public or product liability claims of substan al nature.

J. Details of any joint venture or collabora on agreement.

K. Transac ons that involve substan al payment towards goodwill, brand equity, or intellectual property.

L. Significant labour problems and their proposed solu ons. Any significant development in Human Resources/Industrial Rela ons front like signing of Wage Agreement, implementa on of Voluntary Re rement Scheme etc.

M. Sale of investments, subsidiaries, assets which are material in nature and not in normal course of business.

N. Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material.

O. Non-compliance of any regulatory, statutory or lis ng requirements and shareholders service such as non-payment of dividend, delay in share transfer etc.

6. CODE OF CONDUCT

The Board has framed Code of Conduct for the Company. The Board designated the Execu ve Director as Chief Execu ve Officer (CEO) and President (Finance) as Chief Financial Officer (CFO) for the purpose of Corporate Governance. The Company Secretary is the Compliance Officer.

As per the provision of Regula on 17(8) read with Part-B of Schedule II, a cer ficate is also annexed to this Report by C.E.O. & C.F.O. that all members of the Board, its Commi ee members and all employees working at level of Execu ve and above including Senior Management Personnel have affirmed compliance with the Code of Conduct of the Company for the current year.

Code for preven on of Insider-Trading prac ces and Fair Disclosures

As per SEBI (Prohibi on of Insider Trading) Regula ons 2015, the Company Secretary is the Compliance Officer and is responsible for se ng forth policies, procedures, monitoring adherence to the rules for the preserva on of price sensi ve informa on, preclearance of trade, monitoring of trades and implementa on of the Code of Conduct for trading in Company’s securi es under the overall supervision of the Board.

Further in terms of Amended Regula on, 2015 of SEBI vide its No fica on No. LAD-NRO/GN/2014-15/21/85 dated 15.01.2015 the Company also adopted a Code of Conduct for Preven on of Insider Trading 2015 under SEBI (Prohibi on of Insider Trading) Regula on, 2015 as well as a Code of Corporate Fair Disclosures Prac ces. All the Directors on the Board, Officers, designated employees at Senior Management and connected persons at all loca ons who could be privy to unpublished price sensi ve informa on of the Company are governed by this Code. This amended code was approved by the Board of Directors in their mee ng held on 27th January, 2015.

The Code of Corporate Fair Disclosures Prac ces is also displayed on the Website of the Company as:

Website: www.emamipaper.in

44

7. NUMBER OF SHARES AND CONVERTIBLE INSTRUMENTS HELD BY THE NON-EXECUTIVE DIRECTORS AS ON MARCH, 31, 2017.

Sl. No Name of Directors Category No. of Equity Shares01 Mr. U. G. Bhat Non-Execu ve, Independent NIL02 Mr. J. Godbole Non-Execu ve, Independent NIL03 Mr. H. M. Marda Non-Execu ve, Independent 215004 Mr. S. Balasubramanian Non-Execu ve, Independent NIL05 Mr. J. K. Khetawat Non-Execu ve, Independent NIL06 Mrs. Richa Agarwal Non-Execu ve, Promoter 1500

8. SHIFTING OF REGISTERED OFFICE The Registered Office of the Company has been

shi ed from 687, Anandapur, E. M. Bypass, Kolkata -700107 to ACROPOLIS, Unit -1, 15th Floor, 1858/1 Rajdanga Main Road, Kolkata -700107 w.e.f 1st February, 2017.

A Public No ce regarding the shi ing of the Registered Office was published in Business Standard (English Newspaper) and Ekdin (Bengali Newspaper) on 8th February, 2017 and the same has also been uploaded in the website of the Company.

9. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS AND FACTORY VISIT CUM AWARENESS PROGRAM AT BALASORE PLANT.

The Company has adopted familiariza on programs for the Independent Directors by way of Presenta ons at the quarterly Board Mee ng which covers their roles, rights, responsibili es in the Company and also visit of the Plants to see the opera ons in which the Company operates. Involvement of the experts is also made for be er awareness and training of all the Directors. Factory Visit is also organized from me to me.

Such Familiariza on Programs are disclosed in the following weblink: h p://www.emamipaper.in/downloads/deta i l s_of_fami l iar i za on_programme_29112015.pdf.

10. AUDIT COMMITTEE The Audit Commi ee presently consists of Mr.

J. Godbole, as Chairman, Mr. H. M. Marda, Mr.J. K. Khetawat and Mr. S. Balasubramanian as other members. All of them are Non-Execu ve Independent Directors.

a) Brief Descrip on of Terms of Reference of the Audit Commi ee:

A. The Audit Commi ee shall act in accordance with the terms of reference specified under Sec on

177 of the Companies Act, 2013 and as per the provisions of Regula on 18(3) read with Schedule-II, Part-C of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015, which shall inter alia include:

1. Oversight of the listed en ty’s financial repor ng process and the disclosure of its financial informa on to ensure that the financial statement is correct, sufficient and credible;

2. Recommenda on for appointment, remunera-on and terms of appointment of auditors of

the listed en ty; 3. Approval of payment to statutory auditors for

any other services rendered by the statutory auditors;

4. Reviewing, with the management, the annual financial statements and auditor’s report thereon before submission to the board for approval, with par cular reference to:

a) Ma ers required to be included in the director’s responsibility statement to be included in the board’s report in terms of clause (c) of sub-sec on (3) of Sec on 134 of the Companies Act, 2013;

b) Changes, if any, in accoun ng policies and prac ces and reasons for the same;

c) Major accoun ng entries involving es mates based on the exercise of judgment by management;

d) Significant adjustments made in the financial statements arising out of audit findings;

e) Compliance with lis ng and other legal requirements rela ng to financial statements;

f) Disclosure of any Related Party Transac ons;


Emam

i Paper Mills Ltd.


45

g) Modified opinion(s) in the dra audit report;

5. Reviewing with the management, the quarterly financial statements before submission to the Board for approval;

6. Reviewing with the management, the state-ment of users/applica on of funds raised through an issue (public issue, rights issue, preferen al issue, etc.), the statement of funds u lized for purposes other than those stated in the offer document / prospectus/ no ce and the report submi ed by the monitoring agency monitoring the u liza on of proceeds of a public or rights issue, and making appropriate recommenda ons to the board to take up steps in this ma er;

7. Reviewing and monitoring the auditor’s independence and performance, and effec veness of audit process;

8. Approval or any subsequent modifica on of transac ons of the listed en ty with Related Par es;

9. Scru ny of inter-corporate loans and investments;

10. Valua on of undertakings or assets of the listed en ty, wherever it is necessary;

11. Evalua on of interna onal financial controls and risk management systems;

12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;

13. Reviewing the adequacy of internal audit func on, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, repor ng structure coverage and frequency of internal audit;

14. Discussion with internal auditors of any significant findings and follow up there on;

15. Reviewing the findings of any internal inves ga ons by the internal auditors into ma ers where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and repor ng the ma er to the Board;

16. Discussion with Statutory Auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

17. To look into the reasons for substan al defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;

18. To review the func oning of the whistle blower mechanism;

19. Approval of appointment of Chief Financial Officer a er assessing the qualifica ons, experience and background, etc. of candidate;

20. Carrying out any other func on as is men oned in the terms of reference of audit commi ee.

B. The audit commi ee shall mandatorily review the following informa on:

1) Management Discussion and Analysis of financial condi on and results of opera ons;

2) Statement of significant Related Party Transac ons (as defined by the audit commi ee), submi ed by management;

3) Management le ers / le ers of internal control weaknesses issued by the statutory auditors;

4) Internal Audit Reports rela ng to internal control weaknesses; and

5) The appointment, removal and terms of remunera on of the Chief internal auditor shall be subject to review by the audit commi ee.

6) Statement of devia ons: (a) Quarterly statement of devia on(s)

including report of monitoring agency, if applicable, submi ed to stock exchange(s) in terms of Regula on 32(1).

(b) Annual Statement of funds u lized for purposes other than those stated in the offer document / prospectus / no ce in terms of Regula on 32(7).

b) Composi on, Name of Members and Chairman The Audit Commi ee presently consists with the

following Non-Execu ve Independent Director as members:

Mr. J. Godbole ChairmanMr. H. M. Marda MemberMr. J. K. Khetawat MemberMr. S. Balasubramanian Member

The composi on of the Audit Commi ee meets the requirement of sec on 177 of the Companies Act, 2013 and Regula on 18(1) of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015. Shri G. Saraf, Company Secretary acts as the Secretary to the Commi ee.


46

The a endance of each member director at the Audit Commi ee Mee ng held during the Financial Year 2016-17 is furnished below:

Sl. No. Name of Director Posi on Audit Commi ee Mee ngHeld A ended

01. Mr. J. Godbole ChairmanNon-Execu ve Independent Director

4 4

02. Mr. H. M. Marda MemberNon-Execu ve Independent Director

4 4

03. Mr. J. K. Khetawat MemberNon-Execu ve Independent Director

4 4

04. Mr. S. Balasubramanian MemberNon-Execu ve Independent Director

4 3

The above mee ngs were held on 24th May, 2016, 10th August, 2016, 26th October, 2016 and 31st January, 2017.

The Internal Auditors are permanent invitees of the Audit Commi ee. The Statutory Auditors are also invited to a end the mee ngs.

Mr. J. Godbole, Chairman of the Audit Commi ee was present in the Annual General Mee ng of the Company held on 10th August, 2016.

11. NOMINATION AND REMUNERATION COMMITTEE & POLICY

In compliance of sec on 178(3) of the Companies Act, 2013 a Nomina on and Remunera on Commi ee for appointment and remunera on of Execu ve Director and other Key Managerial Personnel (KMPs) and Senior Managerial Personnel (SMPs) was cons tuted on 25th April, 2014.

a. Brief Descrip on of Terms of Reference of Nomina on and Remunera on Commi ee as per Regula on 19(4) read with Part-D of Schedule-II of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 are as under:

1) Formula on of the criteria for determining qualifica ons, posi ve a ributes and independence of a director and recommend to the Board of Directors a policy rela ng to, the remunera on of the Directors, Key Managerial Personnel and other employees;

2) Formula on of criteria for evalua on of performance of independent directors and the board of directors;

3) Devising a policy on diversity of board of directors;

4) Iden fying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board of Directors their appointment and removal.

5) Whether to extend or con nue the term of appointment of the independent director, on the basis of the report of performance evalua on of independent directors.

b) Composi on, Name of Members and Chairman The Nomina on and Remunera on Commi ee

presently consists with the following Non-Execu ve Independent Directors:

Mr. J. Godbole ChairmanMr. H. M. Marda MemberMr. J. K. Khetawat MemberMr. S. Balasubramanian Member

The composi on of Nomina on and Remu-nera on Commi ee meets the requirement of Regula on 19(1) of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015.


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47

c. Mee ng and a endance during the year The a endance of each member director at the Remunera on Commi ee Mee ng held during the Financial

Year 2016-17 is furnished below:

Sl. No.

Name of Director Posi on Remunera on Commi ee Mee ngHeld A ended

01. Mr. J. Godbole ChairmanNon-Execu ve Independent Director

1 1

02. Mr. H. M. Marda MemberNon-Execu ve Independent Director

1 1

03. Mr. J. K. Khetawat MemberNon-Execu ve Independent Director

1 1

04. Mr. S. Balasubramanian MemberNon-Execu ve Independent Director

1 1

During the year one mee ng of the Nomina on and Remunera on Commi ee was held on 31st January, 2017.

d. Performance Evalua on criteria for independent directors.

The Company had adopted a Performance Evalua on Policy at the Mee ng of the Board of Directors held on 27th January, 2015.

The Performance Evalua on Policy was further

revised as per the Guidance Note on Board Evalua on as issued by the Securi es Exchange Board of India vide Circular No:SEBI/H.O./CFD/CMD/CIR/P/2017/004 DATED 5th January, 2017 and approved by the Board of Directors at their Mee ng held on 31st January, 2017.

The revised Criteria for Performance Evalua on of the Independent Directors as per the abovemen oned Policy are as follows:

Sl. No

Evalua on Criteria

I. a) Knowledge and Competency: How the person fares across different competencies as iden fied for effec ve func oning of the en ty and the Board

b) Whether the person has sufficient understanding and knowledge of the en ty and the sector in which it operates

II. Fulfillment of Func ons: Whether the person understands and fulfills the func ons to him/her as assigned by the Board and the law

III. Ability to func on as a team: Whether the person is able to func on as an effec ve team- member IV. Ini a ve: Whether the person ac vely takes ini a ve with respect to various areas V. Availability and a endance: Whether the person is available for mee ngs of the Board and

a ends the mee ng regularly and mely, without delay VI. Commitment: Whether the person is adequately commi ed to the Board and the en ty VII. Contribu on: Whether the person contributed effec vely to the en ty and in the Board mee ngs VIII. Integrity: Whether the person demonstrates highest level of integrity (including conflict of

interest disclosures, maintenance of confiden ality, etc.) IX. Independence: Whether the person is independent from the Company and other directors and

there is no conflict of InterestX. Independent views and judgement: Whether the person exercises his/ her own judgement and

voices opinion freely


48

e) Policy for Selec on and Appointment of Directors and their Remunera on:

The Nomina on and Remunera on Commi ee has adopted a Policy approved by the Board which inter alia, deals with the manner of selec on of Board of Directors, other KMPs and SMPs as under:

i. The objec ve is to have a Board with diverse background and experience in business, government, academics, technology and in areas that are relevant for the Company’s opera ons.

ii. In evalua ng the suitability of individual Board members, the Commi ee takes into account many factors, including general understanding of the Company’s business dynamics, global business and social perspec ve, educa onal and professional background and personal achievements.

iii. Director should possess the highest personal and professional ethics, integrity and values. They should be able to balance the legi mate interest and concerns of all the Company’s stakeholders in arriving at decisions.

iv. In addi on, Directors must be willing to devote sufficient me and energy in carrying out their du es and responsibili es effec vely

Remunera on to Non-Execu ve Directors: The Non-execu ve Directors of the Company are

paid remunera on by way of si ng fees only for a ending the mee ngs of the Board of Directors

and its Commi ees. The said si ng fees paid to the Non-execu ve Directors are fixed by the Board and reviewed from me to me.

Remunera on to Execu ve Directors, Key Mana-gerial Personnel (KMPs) & Senior Managerial Personnel (SMPs) :

The Company has a credible and transparent framework in determining and accoun ng for the remunera on of the Managing Director / Whole Time Directors (MD/WTDs), Execu ve Directors (EDs), Key Managerial Personnel(s) (KMPs) and Senior Managerial Personnel(s) (SMPs). Their remunera on are governed by the external compe ve environment, track record, poten al, individual performance and performance of the company as well as industry standards.

The remunera on determined for Execu ve Directors are approved by the Nomina on and Remunera on Commi ee, Board of Directors and members at the next general mee ng of the Company and by the Central Government in case such appointment is at variance to the condi ons specified in Schedule V. As a policy, the Execu ve Directors are neither paid si ng fee nor any commission.

The remunera on for other KMPs, SMPs and Unit heads is determined by the Execu ve Director of the company based on their performance and other relevant factors.

The Nomina on and Remunera on Commi ee ensure that the candidate iden fied for appointment as a Director is not disqualified for appointment under sec on 164 of the Companies Act, 2013.

f) Remunera on paid to the Directors of the company for the year ended 31-03-2017: (Amount in `)

Name of Directors Salary & Allowances (Fixed component)*

OtherPerquisites **

Provident Fund

Total Service Contract No ce Period

Mr. A. V. Agarwal 60,10,080.00 2,84,603.00 7,20,000.00 70,14,683.00 3 Years(w.e.f. 08.11.2015)

3 Months

Mr. Manish Goenka 60,10,080.00 67,253.00 7,20,000.00 67,97,333.00 3 Years (w.e.f. 01.07.2015)

3 Months

Mr. P. S. Patwari 1,35,94,800.00 20,49,000.00 14,75,280.00 1,71,19,080.00 3 Years(w.e.f. 01.04.2017)

3 Months

Mr. M. B. S. Nair 86,06,422.00 10,16,910.00 7,21,663.00 1,03,44,995.00 3 Years(w.e.f. 25.04.2017)

3 Months

Total : 34,22,13,812.00 34,17,766.00 36,36,943.00 4,12,76,091.00 * Fixed component includes Basic Salary and Fixed allowances **Other Perquisites include Leave Travel Assistance, Reimbursement of Medical Expenses, Cost of Accommoda on including Rent,

Maintenance, Electricity etc. Note: i. None of the Directors were paid performance linked incen ves. ii. Severance Fees - There is no such fees paid to any of the Director.


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49

Remunera on to Non-Execu ve Directors:

i. They are paid only si ng fees for a ending Board/Commi ee mee ngs.

ii. Directors who are in whole me employment of the Company, are not paid any si ng fees.

Si ng fees paid to each of them for a ending Board/Commi ee Mee ngs are as follows:

Name of the Directors Total RupeesMr. J. Godbole 2,20,000Mr. H. M. Marda 2,50,000Mr. U. G. Bhat 1,15,000Mr. S. Balasubramanian 1,50,000Mr. J. K. Khetawat 2,05,000Mrs. Richa Agarwal 1,30,000Total : 10,70,000

Note: The Non-Execu ve Director have been paid the above men oned si ng fees and reimbursement of expenses only.

i) During the year, the Company has paid Rs.18,25,343/- as professional fees to M/s SPB Projects & Consultancy Ltd; a Company in which Mr. U. G. Bhat is interested as Deputy Managing Director.

ii) Except these, there was no other pecuniary rela onship or transac ons of the Non-Execu ve Directors vis-à-vis the Company.

12. PERFORMANCE EVALUATION OF BOARD :

Pursuant to the provisions of the Companies Act, 2013 and as per requirement of Regula on 17(10) of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015, the Board has adopted the criteria for evalua on of its own performance, its commi ees and individual directors and carried out the required annual evalua on.

The Evalu on Criteria was further revised as per the Guidance Note on Board Evalua on as issued by the Securi es Exchange Board of India vide Circular No.: SEBI/H.O./CFD/CMD/CIR/P/2017/004 DATED 5th January, 2017 and approved by the Board of Directors at their Mee ng held on 31st January, 2017.

The various broad criteria applicable for the Performance Evalua on of the Board as per the new Performance Evalua on Policy are as follows :

I. Structure of the Board II. Mee ngs of the Board III. Func ons of the Board IV. Board and Management V. Professional Development

In respect of each of the evalua on factors, various aspects covering general parameters in respect of all the directors and its commi ees have been considered and set out in the Performance Evalua on Policy in accordance with their respec ve func ons and du es.

Self-appraisal by the directors, based on their delegated specific responsibili es has also been carried out.

Further, the Independent directors have evaluated the performance of Execu ve Chairman, Non-Independent Directors and the Board of Directors as a whole at a separate mee ng held on 31st January, 2017 as per requirement of Regula on 25 (3) & (4) of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015.

Nomina on and Remunera on Commi ee had also evaluated performance of each of the Directors based on the aforesaid evalua on factors, in their mee ng held on 31st January, 2017.

13. STAKEHOLDERS’ RELATIONSHIP COMMITTEE :

The Stakeholders’ Rela onship Commi ee was cons tuted on 25th April, 2014, as per requirement of Sec on 178(5) of the Companies Act, 2013 and entrusted the responsibili es to deal with ma ers rela ng to transfers / transmissions of shares and monitor redressal of complaints from shareholders with respect to transfer of shares, non-receipt of Annual Report, non-receipt of Dividend etc.

The Stakeholders’ Rela onship Commi ee was further re-cons tuted on 26th October, 2016, when Mr. J. Godbole resigned from the Chairmanship of the Commi ee.


50

The Commi ee presently consists with the following members:-

a. Mr. H. M. Marda Chairmanb. Mr. P. S. Patwari Memberc. Mr. Manish Goenka Member

Mr. G. Saraf, Vice President (Finance) & Secretary is the Compliance Officer of the Company.

During the year one mee ng of the Stakeholders Rela onship Commi ee was held on 31st January, 2017.

There was one complaint received from one of the Shareholders so far which have been resolved and no complaint remains pending as on date.

14. RISK MANAGEMENT SYSTEM

The monitoring of Risk Management con nued under Audit Commi ee and Board of Directors. Presenta on of progress and implementa on status of mi ga on plans were made by the Execu ve Management Team periodically.

15. PREFERENCE SHARE COMMITTEE:

The Preference Share Commi ee has been discon nued w.e.f.24th May, 2016 as the purpose of the Commi ee for which it was formed has been accomplished.

16. CORPORATE SOCIAL RESPONSIBILITIES COMMITTEE:

As per Sec on 135 of the Companies Act, 2013 the Commi ee was cons tuted on 21st January, 2014 to monitor and review the C.S.R. ac vi es of the company from me to me. Corporate Social Responsibility is strongly connected with the principles of sustainability; an organiza on should make decisions based not only on financial factors, but also on the social and environmental aspects.

Therefore, it is the core corporate responsibility of EPML to prac ce its corporate values through its commitment to grow in a socially and environmentally responsible way, while mee ng the interests of its stakeholders.

The Commi ee presently consist the following members:

a. Mr. A.V. Agarwal Chairmanb. Mr. J. Godbole Memberc. Mr. P. S. Patwari Memberd. Mr. Manish Goenka Membere. Mr. H. M. Marda Memberf. Mrs. Richa Agarwal Member

During the year two mee ngs of the Corporate Social Responsibility Commi ee were on 24th May, 2016 and 26th October, 2016.

17. FINANCE COMMITTEE:

The Finance Commi ee was cons tuted by the Board in its mee ng held on 6th May, 2015 to deal with expedi ng financial decisions including the transac ons and dealing with various Banks for long term and short term financial requirements of the Company.

The Commi ee presently consist the following members:

a. Mr. H. M. Marda Chairmanb. Mr.J. K. Khetawat Memberc. Mr. Manish Goenka Memberd. Mr. P. S. Patwari Member

During the year one mee ng of the Finance Commi ee was held on 11th Janauary, 2017.

GENERAL BODY MEETING :

Loca on and me where the last three Annual General Mee ngs were held:

Financial Year Venue Date Time2013 – 14 687, Anandapur, E.M. Bypass, Kolkata – 700 107 11.08.2014 10.00 a.m.2014 – 15 -do- 11.08.2015 11.00 a.m.2015 - 16 -do- 10.08.2016 11.00 a.m.

Whether special Resolu ons were passed in previous three AGMs: Yes


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The following Special Resolu ons were passed in previous three AGMs:

• YEAR 2015-16:

To approve varia on of the remunera on of Mr. M. B. S. Nair, (DIN.03086056) as Whole-Time Director designated as Director (Opera ons) w.e.f 18th November 2015 to 25th April,2017

• YEAR 2014-15:

1) Approval for re-appointment of Mr. A. V. Agarwal, as Whole Time Director designated as Execu ve Chairman for a period of 3 years including payment of remunera on for that period.

2) Approval for re-appointment of Mr. Manish Goenka as Whole Time Director for a period of 3 years including payment of remunera on for that period.

• YEAR 2013-14:

1) Approval for appointment of Mr. M. B. S. Nair as Whole-Time Director, designated as Director (Opera ons) for a period of 3 years including payment of remunera on for that period.

2) Approval for re-appointment of Mr. P. S. Patwari as Execu ve Director for a further period of 3 years, including payment of remunera on for that period, subject to the approval of the Central Government.

3) Increase in the Share Capital of the Company and Altera on of Memorandum of Associa on of the Company.

4) Issue of 8% Cumula ve Redeemable Non-Conver ble Preference Shares of Rs.100/- each to the Promoters on Preferen al basis.

5) Borrowing Powers of the Board of Directors pursuant to Sec on 180(1)(c) of the Companies Act, 2013.

6) Approval for Addi onal Mortgage and on Hypotheca on of the Assets of the Company pursuant to Sec on 180(1)(a) of the Companies Act, 2013.

7) Adop on of New Ar cles of Associa on of the Company containing regula on in conformity with Companies Act, 2013.

Whether Special Resolu ons passed last year through Postal Ballot – NO

18. GREEN INITIATIVES DRIVE BY THE MINISTRY OF CORPORATE AFFAIRS, GOVERNMENT OF INDIA

The Company, as a responsible corporate ci zen welcomes and supports the green ini a ves taken by the Ministry of Corporate Affairs, Government of India by circular, enabling electronic delivery of documents to the shareholders. The Company sends the communica on to the shareholders through electronic mode at their e-mail addresses registered with the Depository/Registrar & Share Transfer Agent and all such communica ons are immediately uploaded on Company’s website also.

19. SUBSIDIARY COMPANY

The Company does not have any subsidiary Company.

20. DISCLOSURES

Related party transac ons:

The Company has not entered into any transac on of material nature with the promoters, directors or the management, the subsidiaries or rela ves, etc. that may have poten al conflict with the interest of the Company.

Compliances by the Company:

There have been no cases of non-compliance by the Company or penal es/ strictures imposed on the Company by the Stock Exchanges or SEBI or any other authority on any ma er rela ng to capital markets during the last three years.

Accoun ng treatment in prepara on of financial statement:

The Company has followed the applicable guidelines of Accoun ng Standards as specified under sec on 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

21. MANAGEMENT DISCUSSION & ANALYSIS REPORT

This Annual Report contains a separate and detailed Management Discussion and Analysis sec on.

22. DETAILS OF APPOINTMENT/REAPPOINTMENT OF NON-EXECUTIVE/ INDEPENDENT DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Mr. M. B. S. Nair will re re by rota on at the ensuing Annual General Mee ng and being eligible, offer himself for re-appointment

Mrs. Richa Agarwal will re re by rota on at the ensuing Annual General Mee ng and being eligible, offer herself for re-appointment


52

The informa on pertaining to these Directors are as follows:

Name of Director Mr. M. B. S. Nair Mrs. Richa AgarwalAge About 66 years About 40 yearsDate of Appointment 25.04.2014 27.01.2015Exper se in SpecificFunc onal areas

Renowned paper technologist with rich and varied experience of 43 years in Paper Industry. He is the opera onal head and unit in charge of Balasore Unit, varied experience in se ng up of paper mill project.

Extensive experience in the area of Corporate Planning, Business Development, Marke ng and Overall Business Management.

Qualifica on Bsc(Che),Paper Technology from IPT, Saharanpur

B.Com.

Chairman/Directorof other Companies.

NIL Emami Centre for Crea vity Private Ltd

Membership/Chairmanship in Other Board/Commi ee

NIL NIL

Equity Shares held in the Company

1000 1500

CEO/CFO Cer fica on

The CEO and CFO cer fica on as required under Regula on 17(8) read with Schedule-II, Part B of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015 is enclosed at the end of the Report.

22. COMPLIANCE REPORT

The details of compliance with mandatory requirements and adop on of the non-mandatory requirements of this clause are given below:

Audit Qualifica on:

There is no Audit Qualifica on given in the Auditors’ Report.

Training of Board Members:

All Board members are experienced and professionals, acquainted with business knowledge, obvia ng the need for formal training. However, with respect to Execu ve Directors, other KMPs and SMPs the Company arranged need-based training to help them discharge their responsibili es in the most effec ve way.

Mechanism for the Evalua on of Non-Execu ve Directors:

The role of Non-Execu ve Directors of the Company is important; the peer group comprising the en re Board, except the Director being evaluated, evaluates his/her performance. On the basis of such evalua on, it is decided as to whether his/her appointment should be extended or con nued.

Whistle Blower Policy:

Any employee may report unethical a tude at the work place without fear and reach the Chairman of the Audit Commi ee or alterna vely may report to the Head-HR.

Vigil Mechanism Policy:

The Vigil Mechanism Policy was approved by the Board of Directors on 21st January, 2014:

• To provide for adequate safeguards against vic miza on of Employees and Directors who avail of the mechanism and also provide for direct access to the chairperson of the Audit Commi ee or the Director nominated to play the role of Audit Commi ee, as the case may be, in excep onal cases.


Emam

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53

• The existence of the mechanism will be appropriately communicated within the organiza on a er its establishments.

• In case of repeated frivolous complaints being filed by a Director or an employee, the Audit Commi ee or the Director nominated to play the role of Audit Commi ee may take suitable ac on against the concerned Director or Employee including reprimand.

• The Company encourages an open door policy where employees have access to the Head of the Business/Func on. Any Employee may report unethical a tude at the workplace without fear and reach the Chairman of the Audit Commi ee.

Policy for Preserva on of Records/Documents of the Company:

The Company has adopted the policy for Preserva on of Records /Documents of the Company and was approved by the Board of Directors in their mee ng held on 29th November, 2015.

The purpose of this policy is to provide guidance to the execu ves working in the Company regarding the preserva on of the documents in accordance with the provisions of the Companies Act, 2013 and as mandated by the provisions of Regula on 9 of Chapter III of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015.

Policy for Determina on of Materiality of any Events /Informa on:

The Company has adopted the policy for Determina on of Materiality of any Events/informa on of the Company and was approved by the Board of Directors in their mee ng held on 29th November, 2015.

The purpose of this Policy is to determine materiality of events and informa on based on criteria specified under Clause (i) of Sub Regula on (4) of Regula on 30 of the SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons 2015 and to disclose of events / informa on to the Stock Exchanges. The policy is available at the website of the Company i.e. www.emamipaper.in

Policy for Archiving of Documents which are hosted on the website of the Company:

The Company has adopted the policy for Archiving of Documents which are hosted on the website of

the Company and was approved by the Board of Directors in their mee ng held on 29th November, 2015.

This policy is framed for the purpose of archiving of the documents which are hosted in the Company’s Website in accordance with the provisions of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015.

Performance Evalua on Policy

The Company had adopted a Performance Evalua-on Policy which was approved by the Board

of Directors at the Board Mee ng held on 27th January, 2015.

The Securi es and Board of India vide their Circular No.: SEBI/H.O./CFD/CMD/CIR/P/2017/004 DATED 5th January, 2017, issued a guidance Note on Board Evalua on. The Company revised its Performance Evalua on Policy inline with the said Guidance note.

The Revised Performance Evalua on Policy was approved by the Board of Directors at their mee ng held on 31st Jnauary, 2017

Secretarial Audit:

Secretarial Audit from an Independent Prac cing Company Secretary M/s. M. K. B. & Associates, Company Secretary for the financial year ended 31st March, 2017 has been completed and Secretarial Audit for the year forms part of this Annual Report.

Shareholder’s Rights and Means of Communica on

The quarterly, half-yearly and audited financial results are generally published in The Economic Times/Business Standard/The Times of India, Kolkata (English) and The Dainik Statesman/Ekdin/Ei-Samai (Bengali) and are also displayed on company’s website www.emamipaper.in. Hence, these are not individually sent to the shareholders.

The Company make arrangements for display at its website all the ma ers required to be displayed under the Companies Act, 2013 and Regula on 46 of SEBI (Lis ng Obliga ons and Disclosure Require-ments) Regula ons, 2015, which includes:

a) Details of its business;

b) Terms and condi ons of appointment of Independent Directors;

c) Composi on of various commi ees of Board of Directors;


54

d) Code of conduct of Board of Directors and senior management personnel;

e) Details of establishment of Vigil mechanism/Whistle Blower policy;

f) Policy on dealing with Related Party Transac ons;

g) Details of Familiariza on Programmes imparted to Independent Directors

h) The email address for grievance redressal i) Contact informa on of the designated officials

for assis ng and handling investor grievances; j) Financial informa on including : i. No ce of mee ng of the Board of Directors

where Financial Results shall be discussed; ii. Financial Results, on conclusion of the

mee ng of the Board of Directors where financial results were approved.

iii. Complete copy of the annual report including Balance Sheet, Profit and Loss Account, Directors Report, Corporate Governance Report etc;

k) Shareholding Pa ern Management’s Discussion and Analysis Management’s Discussion and Analysis is a part of

Directors’ Report to the shareholders.

22. Shareholders Informa on a) Unclaimed Dividend Unclaimed dividend for the year prior to and

including the financial year 2008-09 have been transferred to the General Revenue Account of the Central Government / the Investor Educa on and Protec on Fund established by the Central Government (IEPF), as applicable.

Shareholders who have not encashed their dividend warrants to financial year(s) up to and including 2008-09 may claim such dividend (transferred to the General Revenue Account) from the Registrar of Companies, West Bengal, Government of India, Nizam Palace, II MSO Building, 2nd Floor, 234/4 A. J. C. Bose Road, Kolkata-700 020 by applying in the prescribed form.

The dividend for the undernoted years, if remaining unclaimed for 7 years, will be statutorily transferred by the Company to I.E.P.F. in accordance with the schedule given below. Communica on has been sent by the Company to the concerned Shareholders advising them to write to the Company with respect to their unclaimed dividend. (A en on is drawn that the unclaimed dividend for the financial year 2009-10 is due for transfer to IEPF on 02/09/2017).

Once unclaimed dividend is transferred to IEPF, no claim shall lie in respect thereof.(` in Lacs)

Financial year

DividendID No.

Last date of Payment of dividend

Total Amount of Dividend

Unclaimed Dividend as on 31.03.2017

Last date for transfer to I.E.P.F. on

2009-10 28th 28/08/2010 363.00 0.66 02/09/20172010-11 29th 09/09/2011 363.00 0.73 14/09/20182011-12 30th 11/09/2012 363.00 0.68 16/09/20192012-13 31st 11/09/2013 363.00 1.05 16/09/20202013-14 32nd 09/09/2014 363.00 0.89 14/09/20212014-15 33rd 09/09/2015 363.00 0.98 14/09/20222015-16 34th 08/09/2016 363.00 0.99 13/09/2023

Total : 2541.00 5.98

Details of Un-claimed Dividend is available in the Company’s website: www.emamipaper.in

b) Transfer of Unclaimed Shares to the Investor Protec on Fund (IEPF) Account as per Sec on 124(6) of Companies Act, 2013

The Ministry of Corporate Affairs vide its Circular No: G.S.R. 854(E) dated 5th September, 2016, no fied Investor Educa on and Protec on

Fund Authority (Accoun ng, Audit, Transfer and Refund) Rules, 2016, subsequently modified on 28th February, 2017.

In terms of the provisions of Sec on 124(6) of the Companies Act, 2013 read with IEPF Rules, in addi on to the Unpaid or Unclaimed Dividend


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required to be transferred by the Company to the Investor Educa on and Protec on Fund Authority , Equity shares rela ng to such unclaimed/unpaid Dividend and lying unpaid or unclaimed for 7 consecu ve years or more were also required to be transferred to the Investor Educa on and Protec on Fund Suspense Account (IEPF SUSPENSE ACCOUNT).

Accordingly the Company have transferred 65,352 shares in respect of which Dividends have not been claimed for the consecu ve period of 7 years from 2008-2009. The Total amount of Unclaimed /unpaid Dividend transferred to the IEPF suspense Account is ` 1,30,704/- on 07/12/2016.

Each of the shareholders were sent personal No ces at their latest Address on behalf of the Company regarding transfer of their shares and also show how to claim those shares and unclaimed dividend amount. A Public No ce was also published in an English and Bengali Newspaper and the same was uploaded in the Website of the Company along with the details of those shareholders.

In terms of Rule 6(3) of the Investor Educa on and Fund Authority (Accoun ng Audit, Transfer and Refund) Rules, 2016, the Statement containing the details of Name, Folio No. and Number of Shares transferred to IEPF Suspense Account is made available in our Website www.emamipaper.in

b) 35th Annual General Mee ng :

Date : 14th August, 2017.

Time : 11.00 a.m.

Venue : 687, Anandapur, E.M. Bypass, Kolkata - 700107

c) Date of Book Closure :

7th August, 2017 to 14th August, 2017 (both days inclusive) for the shareholders holding shares in physical form. The Shareholders holding shares in demat form are eligible for dividend for their holding as on 7th August, 2017.

f) Dividend :

The Board of Directors has recommended a dividend at the rate of 60% i.e. ` 1.20 (Rupees One & Twenty paise only) per Equity Share of

` 2/- each and at the rate of 8% on Preference Share of ` 100/-. This is subject to the approval of the Members at the ensuing Annual General Mee ng. The dividend, if approved by the Members at the ensuing Annual General Mee ng, will be paid / credited on and from 30th August, 2017.

g) Financial Calendar of the Company :

i. April to March

ii. First Quarter Results – 2nd week of August

iii. Half-yearly Results – 2nd week of November

iv. Third Quarter Results – 2nd week of February

v. Results for the year ending 31st March – by May.

h) Lis ng of Equity Shares on Stock Exchange :

The Company’s shares are listed at Bombay Stock Exchange only.

The relevant Lis ng Fees for the year was paid.

i) Stock Code :

The Bombay Stock Exchange Ltd. - 533208

The ISIN Number of Company’s Equity Shares (of face value ` 2/- per share) for NSDL & CDSL: INE 830CO1026.

j) Stock Price Data :

Market Price Data on the Bombay Stock Exchange Ltd. (BSE), Mumbai is given hereunder:

Market Price Data: High/Low in each month in the Financial Year 2016-17:

BSEMonth High Price (`) Low Price (`)April, 2016 48.00 42.10May, 2016 53.00 42.50June,2016 62.80 47.50July,2016 81.00 54.00August,2016 77.60 64.00September,2016 79.80 65.00October, 2016 120.40 73.25November,2016 152.20 97.05December, 2016 128.90 106.60January, 2017 131.55 107.15February, 2017 124.65 105.20March, 2017 122.50 100.05


56

k) Registrars & Transfer Agents (Physical & Demat) :

Maheshwari Datama cs Pvt. Ltd. 23, R. N. Mukherjee Road, 5th Floor Kolkata - 700001 Phone : 033-2243-5029/2248-2248 Fax : 033-2248 4787 Email : [email protected]

l) Share Transfer System : The shares of the Company are eligible for

trading in the demat mode also. The shares received for transfers in physical form are first registered normally within three weeks (if in order and complete in all respects) and a demat op on form is sent to the shareholders for exercising the op on to receive the shares in demat form within 30 days of receipt unless the shareholders desires to get back the physical share cer ficate. Therea er shares are confirmed to the respec ve accounts.

m) Distribu on of Shareholding and Shareholding Pa ern as on 31.03.2017 (Equity):

Category Number of shares held % of ShareholdingA. Promoters’ holding Promoters

- Indian promoters Individuals 5657126 9.35 Corporate 39576160 65.41- Foreign Promoters 125000 0.21

Sub-total 45358286 74.97B. Non-promoters’ holding 1. Ins tu onal investorsa. Mutual Funds and UTI b. Banks, financial ins tu ons and Insurance companiesc. Central Govt./State Govt.d. Foreign Ins tu onal Investors

--

65352-

--

0.11-

Sub-total 65352 0.11 2. Others a. Private corporate bodiesb. Indian publicc. NRI / OCBsd. NBFCs registered with RBId. Others(Clearing Member)

74372747601547

13651-

22940

12.3012.560.02

-0.04

Sub-total 15075412 24.92Grand-total 60499050 100.00

Analysis of Shareholding:

Category No. of Shareholders Number of Shares held % of Shareholding1 – 50 731 11697 0.019351 – 100 327 30765 0.0508101- 150 77 10498 0.0173151 – 250 226 48296 0.0798251 – 500 281 119008 0.1966501 – 5000 445 732863 1.21135001 and above 142 59545923 98.4245Total : 2229 60499050 100.00


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n) Dematerialisa on of Shares 99.38 percent of the Company’s Paid up Equity

Share Capital are held in dematerialized form, out of which 88.32 percent are held with Na onal Securi es Depository Limited (NSDL) and 16.16 percent are held with Central Depository Services Limited(CDSL) as on 31st March, 2017.

o) Outstanding GDRs/ADRs/Warrants or any conver ble instruments, conversion date and likely impact on equity.

The Company has not issued any of the aforesaid instruments.

p) Plant Loca ons: 1. Vill – Balgopalpur Balasore – 756 020, Odisha Phone : (91) (6782) 275723/26/79 Fax : (91) (6782) 275778 Email :[email protected]

2. R. N. Tagore Road, Alambazar Kolkata –700 035, West Bengal Phone: (91)(33) 6622-3100, 6540-9610 Fax: (91)(033) 2564-6926 Email: [email protected]

q) Address for correspondence: EMAMI PAPER MILLS LIMITED Acropolis, Unit 1, 15th Floor 1858/1, Rajdanga Main Road, Kolkata -700107 Phone No. (033) 66271301 Fax (033) 66271338 Email : [email protected]; [email protected] Website : www.emamipaper.in

r) Electronic Clearing Service (ECS):

The Company is availing of the ECS facili es to distribute dividend in main ci es to those members who have opted for it.

For and on behalf of the Board

Place : Kolkata A. V. AGARWALDate : 16th May, 2017 Execu ve Chairman


58

COMPLIANCE CERTIFICATE

[Under Regula on 17(8) read with Part B of Schedule II of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula on, 2015]

We P. S. Patwari, Execu ve Director, C.E.O. and S. K. Khetan, President (Finance), C.F.O. cer fy that:

1. We have reviewed financial statements and the cash flow statement for the year ended 31st March, 2017 to the best of our knowledge and belief:

a. these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

b. these statements together present a true and fair view of the Company’s affairs and are in compliance with exis ng accoun ng standards, applicable laws and regula ons;

2. We also cer fy that based on our knowledge and belief, no transac ons entered into by the Company during the year which are fraudulent, illegal or violate the Company’s code of conduct.

3. We accept responsibility for establishing and maintaining internal controls for financial repor ng and we have evaluated the effec veness of internal control systems of the company pertaining to financial repor ng and we have disclosed to the auditors and the audit commi ee, deficiencies in the design or opera on of such internal controls, if any, of which we are aware and the steps we have taken or proposed to be taken to rec fy these deficiencies.

4. We have indicated to the auditors and the Audit Commi ee :

a. significant changes in internal control during the year over financial repor ng during the year;

b. significant changes in the accoun ng policies during the year and that the same has been disclosed in the notes to the financial statements; and

c. instances of significant fraud of which we have become aware and the involvement there in, if any, of the management or an employee having a significant role in the company’s internal control system over financial repor ng.

For Emami Paper Mills Limited

Place : Kolkata S. K. KHETAN P. S. PATWARIDate : 16th May, 2017 President (Finance) (CFO) Execu ve Director (CEO)

DECLARATION BY CHIEF EXECUTIVE OFFICER (C.E.O.) OF THE COMPANY

[Under Regula on 34(3) read with Clause D of Schedule V of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015]

As per requirement of Regula on 34(3) read with Clause D of Schedule V of SEBI (Lis ng Obliga ons and Disclosure Requirements) Regula ons, 2015, I, P. S. Patwari, Execu ve Director and Chief Execu ve Officer (C.E.O.) of Emami Paper Mills Limited hereby declare that:

All members of Board, its Commi ees and all employees working at level of Execu ve and above including Senior Managerial Personnel have affirmed compliance with the Code of Conduct of the Company for the year 2016-17.

For Emami Paper Mills Limited

Place : Kolkata P. S. PatwariDate : 16th May, 2017 Execu ve Director (Chief Execu ve Officer)


Emam

i Paper Mills Ltd.


59

To,The members ofEMAMI PAPER MILLS LIMITED

We have examined the compliance of condi ons of Corporate Governance by Emami Paper Mills Limited for the year ended on 31.03.2017 as s pulated in Securi es Exchange Board of India (Lis ng Obliga ons and Disclosure Requirements) Regula ons,2015 (herein a er called as “SEBI (LODR) Regula ons,2015”).

The compliance of condi ons of Corporate Governance is the responsibility of the management. Our examina on was limited to procedures and implementa on thereof, adopted by the company for ensuring the compliance of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statement of the company.

In our opinion, and to the best of our informa on and according to the explana on given to us, we cer fy that the company has complied with the condi ons of corporate governance as s pulated in the above men oned Regula ons.

We further state that such compliance is neither an assurance as to future viability of the Company nor of the efficiency or effec veness with which the management has conducted the affairs of the Company.

For, S. K. AGRAWAL & CO.Chartered Accountants

Firm’s registra on number: 306033E S. K. AgrawalPlace: Kolkata PartnerDate: 16th May, 2017 Membership No. 9067


60

To the Members of EMAMI PAPER MILLS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of EMAMI PAPER MILLS LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accoun ng policies and other explanatory informa on, in which are incorporated the returns for the year ended on that date audited by the branch auditors of the Company’s branch at Gulmohar.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the ma ers stated in Sec on 134(5) of the Companies Act, 2013 (“the Act”) with respect to the prepara on of these financial statements that give a true and fair view of the financial posi on, financial performance and cash flows of the Company in accordance with the accoun ng principles generally accepted in India, including the Accoun ng Standards specified under Sec on 133 of the Act, read with relevant rules issued thereunder. This responsibility also includes maintenance of adequate accoun ng records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preven ng and detec ng frauds and other irregulari es; selec on and applica on of appropriate accoun ng policies; making judgments and es mates that are reasonable and prudent; and design, implementa on and maintenance of adequate internal financial controls, that were opera ng effec vely for ensuring the accuracy and completeness of the accoun ng records, relevant to the prepara on and presenta on of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accoun ng and audi ng standards and ma ers which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Audi ng specified under Sec on 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s prepara on of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evalua ng the appropriateness of the accoun ng policies used and the reasonableness of the accoun ng es mates made by the Company’s Directors, as well as evalua ng the overall presenta on of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our informa on and according to the explana ons given to us, the aforesaid financial statements give the informa on required by the Act in the manner so required and give a true and fair view in conformity with the accoun ng principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2017, and its profit and its cashflows for the year ended on that date.

Other Ma er

We did not audit the financial statements of Gulmohar branch included in these financial statements of the Company whose financial statements reflect total assets of Rs. 2494.03 lacs as at 31st March, 2017 and total revenues of Rs. 6199.72 lacs for the year ended on that date, as considered in these financial statements. The financial statements of this branch have been audited by the branch auditor whose reports have been furnished to us, and

Independent Auditors' Report

61

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i Paper Mills Ltd.


our opinion in so far as it relates to the amounts and disclosures included in respect of the branch, is based solely on the report of such branch auditor.

Our opinion is not modified in respect of this ma er.

Report on Other Legal and Regulatory Requirements I. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government

of India in terms of sub-sec on (11) of sec on 143 of the Act, we give in the Annexure A, a statement on the ma ers specified in paragraphs 3 and 4 of the Order, to the extent applicable.

II. As required by Sec on 143 (3) of the Act, we report that: a. We have sought and obtained all the informa on and explana ons which to the best of our knowledge and

belief were necessary for the purposes of our audit. b. In our opinion, proper books of accounts as required by law have been kept by the Company so far as it

appears from our examina on of those books and proper returns adequate for the purpose of our audit have been received from Gulmohar Branch not visited by us.

c. The reports on the accounts of the branch of the Company audited under Sec on 143 (8) of the Act by branch auditor have been sent to us and have been properly dealt with by us in preparing this report.

d. The Balance Sheet, the Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

e. In our opinion, the aforesaid financial statements comply with the Accoun ng Standards specified under Sec on 133 of the Act, read with relevant rules issued thereunder.

f. On the basis of the wri en representa ons received from the Directors as on 31st March, 2017 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Sec on 164 (2) of the Act.

g. With respect to the adequacy of the internal financial controls over financial repor ng of the Company and the opera ng effec veness of such controls, refer to our separate report in “Annexure B”;

h. With respect to the other ma ers to be included in the Auditor’s Report in accordance with the amended Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our informa on and according to the explana ons given to us:

i. The Company has disclosed the impact of pending li ga ons on its Financial Posi on in its financial statements (Refer Note No. 2.28 to the financial statements).

ii. The Company did not have any long-term contracts including deriva ve contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, which were required to be transferred to the Investor Educa on and Protec on Fund by the Company.

iv. The Company has provided requisite disclosure in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 08th November, 2016 to 30th December, 2016. Based on audit procedures and on the basis of management representa on we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management. (Refer Note No. 2.45 to the financial statements).

For S. K. AGRAWAL & CO.Chartered Accountants

Firm’s Registra on Number- 306033ES. K. Agrawal

Place: Kolkata PartnerDated: 16th May, 2017 Membership No: 9067

Independent Auditors' Report (Contd.)

62

The Annexure referred to in our Independent Auditor's Report to the members of EMAMI PAPER MILLS LIMITED (the Company’) on the financial statements for the year ended on 31st March 2017. We report that:i. (a) The Company has maintained proper records showing full par culars, including quan ta ve details and

situa on of fixed assets. (b) The Company has a regular programme of physical verifica on of its fixed assets by which fixed assets are

verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were no ced on such verifica on. In our opinion, this periodicity of physical verifica on is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to informa on and explana ons given to us and on the basis of our examina on of the records produced before us, tle deeds of five plots of leasehold land are in the process of being registered in the name of the Company. The gross block and net block of said plots amounts to Rs 99.20 lacs and Rs. 94.10 lacs respec vely.

ii. According to the informa on and explana ons given to us the inventories have been physically verified during the year by the management. In our opinion, the frequency of verifica on is reasonable and no material discrepancies were no ced on physical verifica on.

iii. The Company has granted loans to two companies listed in the register maintained under sec on 189 of the Companies Act, 2013.

(a) In our opinion, the terms and condi ons on which the loans had been granted to bodies corporate listed in the register maintained under sec on 189 of the Act were not, prima facia, prejudicial to the interest of the company.

(b) In the case of loans granted to the bodies corporate listed in the register maintained under sec on 189 of the Act, the borrowers have been regular in the payment of principal and interest as s pulated.

(c) There are no overdue amounts for more than 90 days from the due date in respect of the loan granted to a body corporate listed in the register maintained under sec on 189 of the Act.

iv In our opinion and according to the informa on and explana ons given to us, the Company has complied with the provisions of sec ons 185 and 186 of the Companies Act, 2013 in respect of loans and investments made.

v. The Company has not accepted any deposits from the public during the year.vi. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by

the Central Government for maintenance of cost records under sec on 148 (1) of the Act, and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

vii. According to the informa on and explana ons given to us in respect of statutory dues: (a) The Company has been regular in deposi ng undisputed statutory dues, including Provident Fund, Employees

State Insurance, Income Tax, Service Tax, Sales Tax, Value Added Tax, duty of Custom, duty of Excise, Cess and other statutory dues with the appropriate authori es during the year. According to the informa on and explana ons given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2017 for a period of more than six months from the date they became payable.

(b) According to the informa on and explana ons given to us, there are no material dues of duty of customs and service tax which have not been deposited with the appropriate authori es on account of any dispute. However, according to informa on and explana ons given to us, the following dues of income tax, sales tax, duty of excise and value added tax have not been deposited by the Company on account of disputes:

Par cular Financial Year to which the ma er

pertains

Forum where ma er is pending

Amount(` In Lacs)

The Central Excise Act, 1994 & Service Tax (Finance Act, 1994)

1994-952002-03 to 2006-07

2006-072006-072011-122016-17

ACCEACCE

TribunalComm. Appeals Comm. AppealsComm. Appeals

0.871.10

74.810.903.95

11.02

Annexure - A to the Independent Auditors' Report

63

Emam

i Paper Mills Ltd.


Par cular Financial Year to which the ma er

pertains

Forum where ma er is pending

Amount(` In Lacs)

Central Sales Tax 1993-942004-052006-072009-102010-11

2012-13 to 2013-14

TribunalDCCT

TribunalComm. AppealsComm. AppealsComm. Appeals

16.260.533.82

17.127.34

74.01Value Added Tax Act, (Orissa) 2006-07

2009-102010-11

TribunalComm. AppealsComm. Appeals

0.5910.8925.48

Entry Tax Act (Orissa) 2006-072007-082008-092009-102010-11

2012-13 to 2013-14

Addl. Comm.Addl. Comm.Addl. Comm.Addl. Comm.Addl. Comm.Addl. Comm.

1.300.11

32.0032.0542.36

205.71Orissa Sales Tax 1989-90 High Court 0.79ESIC 1996-97 ESIC Court 0.22Entry Tax Act(West Bengal)

2013-142014-152015-162016-17

High CourtHigh CourtHigh CourtHigh Court

3.275.755.745.26

viii. On the basis of records examined by us and the informa on and explana ons given to us, the company has not defaulted in repayment of dues to Banks and financial ins tu ons.

ix. The Company did not raise any money by way of ini al public offer and further public offer (including debt instrument). To the best of our knowledge and belief and according to the informa on and explana ons given to us, term loans availed by the company were applied for the purpose for which the loans were obtained.

x. According to the informa on and explana ons given to us, no material fraud by the Company or on the Company by its officers or employees has been no ced or reported during the course of our audit.

xi. According to the informa on and explana ons given to us, the Company has paid/provided for managerial remunera ons in accordance with the requisite approvals mandated by the provisions of Sec 197 read with Schedule V to the Act.

xii. In our opinion and according to the informa on and explana ons given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii. According to the informa on and explana ons given to us and based on our examina on of the records of the Company, transac ons with the related par es are in compliance with sec ons 177 and 188 of the Act where applicable and details of such transac ons have been disclosed in the financial statements as required by the applicable accoun ng standards.

xiv. According to the informa on and explana ons given to us and based on our examina on of the records, the Company has not made any preferen al allotment or private placement of shares or fully or partly conver ble debentures during the year.

xv. According to the informa on and explana ons given to us and based on our examina on of the records of the Company, the Company has not entered into non-cash transac ons with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi. The Company is not required to be registered under sec on 45-IA of the Reserve Bank of India Act 1934.




Annexure - A to the Independent Auditors' Report (Contd.)

64

Report on the Internal Financial Controls under Clause (i) of Sub-sec on 3 of Sec on 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial repor ng of Emami Paper Mills Limited to the extent records available with us in conjunc on with our audit of the financial statements of the company as of and for the year ended 31st March, 2017.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls. These responsibili es include the design, implementa on and maintenance of adequate internal financial controls that were opera ng effec vely for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the preven on and detec on of frauds and errors, the accuracy and completeness of the accoun ng records, and the mely prepara on of reliable financial informa on, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial repor ng based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Repor ng (the “Guidance Note”) and the Standards on Audi ng, issued by ICAI and deemed to be prescribed under sec on 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Ins tute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial repor ng was established and maintained and if such controls operated effec vely in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial repor ng and their opera ng effec veness. Our audit of internal financial controls over financial repor ng included obtaining an understanding of internal financial controls over financial repor ng, assessing the risk that a material weakness exists, and tes ng and evalua ng the design and opera ng effec veness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial repor ng.

Meaning of Internal Financial Controls over Financial Repor ng

A company's internal financial control over financial repor ng is a process designed to provide reasonable assurance regarding the reliability of financial repor ng and the prepara on of financial statements for external purposes in accordance with generally accepted accoun ng principles. A company's internal financial control over financial repor ng includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transac ons and disposi ons of the assets of the company; (2) provide reasonable assurance that transac ons are recorded as necessary to permit prepara on of financial statements in accordance with generally accepted accoun ng principles, and that receipts and expenditures of the company are being made only in accordance with authorisa ons of management and directors of the company; and (3) provide reasonable assurance regarding preven on or mely detec on of unauthorised acquisi on, use, or disposi on of the company's assets that could have a material effect on the financial statements.

Inherent Limita ons of Internal Financial Controls over Financial Repor ng

Because of the inherent limita ons of internal financial controls over financial repor ng, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projec ons of any evalua on of the internal financial controls over financial repor ng to future periods are subject to the risk that the internal financial control over financial repor ng may become inadequate because of changes in condi ons, or that the degree of compliance with the policies or procedures may deteriorate.

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Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial repor ng and such internal financial controls over financial repor ng were opera ng effec vely as at 31 March 2017, based on the internal control over financial repor ng criteria established by the Company.




Annexure - B to the Independent Auditors' Report (Contd.)

66

Par culars Note No. As at31st March, 2017

As at 31st March, 2016

EQUITY AND LIABILITIESShareholders’ fundsShare capital 2.1 7,334.98 7,334.98 Reserves and surplus 2.2 40,213.09 37,619.58 Non-current liabili esLong-term borrowings 2.3 65,435.12 70,707.51 Deferred tax liabili es (net) 2.4 3,545.57 2,840.14 Other long-term liabili es 2.5 486.26 463.80 Long-term provisions 2.6 437.94 332.15 Current liabili esShort-term borrowings 2.7 35,774.98 26,908.98 Trade payables 2.8 8,211.86 7,520.32 Other current liabili es 2.9 13,286.18 11,056.39 Short-term provisions 2.10 234.04 1,026.65 Total 1,74,960.02 1,65,810.50 ASSETSNon-current assetsFixed assets 2.11Tangible assets (Property, plant and equipment) 1,18,600.53 1,19,500.91 Intangible assets 24.61 35.49 Capital work in progress 535.70 457.83 Non-current investments 2.12 56.75 56.75 Long-term loans and advances 2.13 6,195.19 4,925.07 Current assetsCurrent investments 2.14 - 0.80 Inventories 2.15 22,901.11 17,279.75 Trade receivables 2.16 14,949.68 10,266.48 Cash and bank balances 2.17 3,387.77 8,052.20 Short-term loans and advances 2.18 8,211.47 5,172.38 Other current assets 2.19 97.21 62.84 Total 1,74,960.02 1,65,810.50 Significant accoun ng policies 1Notes forming part of the financial statements 2

A. V. AgarwalManish GoenkaP. S. PatwariDirectors

In terms of our a ached report of even dateFor S. K. AGRAWAL & CO.Chartered AccountantsFirm's Registra on Number : 306033ES. K. AgrawalPartnerMembership No. 9067Place : KolkataDate : 16th May, 2017

S. K. KhetanPresident (Finance) & CFOG. SarafV. P. (Finance) & Secretary

Balance Sheet as at 31st March, 2017(` in Lacs)

67

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i Paper Mills Ltd.


Par culars Note No. Year ended 31st March, 2017

Year ended 31st March, 2016

REVENUES:Revenue from opera ons 2.20 1,13,835.48 53,880.49 Other income 2.21 1,846.45 638.44 Total Revenue 1,15,681.93 54,518.93 EXPENSES:Cost of materials consumed 2.22 73,505.89 31,797.51 Changes in inventories of finished goods & work-in-progress

2.23 (2,204.87) 1,031.69

Employee benefits expense 2.24 5,791.12 3,406.82 Finance costs (net) 2.25 5,701.73 1,613.78 Deprecia on and amor sa on expenses 2.26 5,484.67 2,668.05 Other expenses 2.27 24,104.44 12,919.80 Total expenses 1,12,382.98 53,437.65 Profit before tax 3,298.95 1,081.28 Tax expense:Current tax 695.40 227.84 Income tax for earlier years - 0.85 Deferred tax 705.44 (1,711.48)MAT credit en tlement (695.40) (227.84)Profit a er tax 2,593.51 2,791.91 Earnings per equity share: 2.38(1) Basic 3.31 3.64 (2) Diluted 3.31 3.64 Significant accoun ng policies 1Notes forming part of the financial statements 2

Statement of Profit and Loss for the year ended 31st March, 2017




(` in Lacs)

68

Descrip on 2016-17 2015-16 A. CASH FLOW FROM OPERATING ACTIVITIES :

Net profit before tax 3,298.95 1,081.28 Adjustment for :Deprecia on and amor sa on expenses 5,484.67 2,668.05 No onal foreign exchange loss/(gain) (1,206.86) (222.92)Provision for employees benefits 105.79 65.08 Finance Costs 5,701.73 1,613.78 Dividend Received (40.82) (14.00)Profit on sale of current investements (240.11) (535.89)(Profit) / loss on sale of fixed assets (1.31) 15.03 Opera ng profit before working capital changes : 13,102.04 4,670.41 Add: Decrease / increase in working capital(Increase)/decrease in trade and other receivables (7,512.55) (7,647.96)(Increase)/decrease in bank balances (other than cash/cash equivalent)

113.05 132.07

(Increase)/decrease in inventories (5,621.36) (5,717.04)Increase/(decrease) in trade and other payables 1,078.57 852.29 Cash generated / (used) from opera ons 1,159.75 (7,710.23)Taxes paid (455.31) (261.58)Cash flow before extraordinary items 704.44 (7,971.81)Net cash generated / (used) from opera ng ac vi es (A) 704.44 (7,971.81)

B. CASH FLOW FROM INVESTING ACTIVITIES :Investment in fixed assets and capital work in progress (6,338.20) (11,686.86)(Increase) / decrease in capital advances (876.97) 306.68 Sale of fixed assets 15.70 (6.61)Dividend received 40.82 14.00 Interest received 445.77 652.93 Profit on sale of current investements 240.11 535.89 (Increase) / Decrease in Investment 0.80 - Net Cash generated / (used) in inves ng ac vi es (B) (6,471.97) (10,183.97)

C. CASH FLOW FROM FINANCING ACTIVITIES :Net proceeds from / (repayment of) long term borrowings (1,769.70) 3,706.26 Increase/(decrease) in short term borrowings 9,967.46 15,847.09 Interest and other borrowing cost paid (5,954.96) (1,853.12)Dividend and dividend tax paid (1,026.65) (952.36)Net cash generated / (used) in financing ac vi es (C) 1,216.15 16,747.87 Net increase/(Decrease) in cash & cash equivalents (A+B+C) (4,551.38) (1,407.91)* Cash & cash equivalents (opening balance) 7,537.13 8,945.04 * Cash & cash equivalents (closing balance) 2,985.75 7,537.13

Cash Flow Statement for the year ended 31st March, 2017(` in Lacs)

69

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i Paper Mills Ltd.


* Represents cash and bank balances as indicated in Note 2.17.Note: Cash & Cash Equivalents represents “Cash and Bank Balances” except Rs.5.80 lacs (Rs. 5.56 lacs) lying in designated account with Scheduled Banks on account of unclaimed dividend and Rs.396.22 lacs (Rs.509.50 lacs) lying as Fixed Deposit with Banks that are being pledged as security, which are not readily available for use by the Company.

Cash Flow Statement for the year ended 31st March, 2017




(` in Lacs)

70

1. SIGNIFICANT ACCOUNTING POLICIES

1.1 General

The financial statements are prepared under the historical cost conven on on the accrual basis of accoun ng and in accordance with Accoun ng principles generally accepted in India and comply with the Accoun ng Standards no fied by the Central Government of India and relevant provisions of the Companies Act, 2013.

1.2 Use of es mates

The prepara on of the financial statements in conformity with Indian GAAP requires the Management to make es mates and assump ons that affect the reported amounts of assets and liabili es, the disclosure of con ngent liabili es on the date of the financial statements and reported amounts of revenues and expenses for the year. The Management believes that the es mates used in prepara on of the financial statements are prudent and reasonable. Future results could differ due to these es mates and the differences between the actual results and the es mates are recognized in the periods in which the results are known/materialize.

1.3 Opera ng Cycle

Based on the nature of products/ac vi es of the Company and the normal me between acquisi on of assets and their realiza on in cash or cash equivalents, the Company has determined its opera ng cycle as 12 months for the purpose of classifica on of its assets and liabili es as current and non-current.

1.4 Property, Plant & Equipment

a) Property, plant & equipment are carried at cost, less accumulated deprecia on and accumulated impairment losses. Direct costs are capitalized un l such assets are ready for use. Capital work-in-progress comprises the cost of fixed assets that are not ready for their intended use at the repor ng date.

b) Property, plant and equipment includes spare parts, stand-by equipment and servicing equipment which are expected to be used for a period more than twelve months and meets the recogni on criteria of plant, property and equipment.

c) Deprecia on -Deprecia on on property, plant and equipment is provided to the extent of depreciable amount on pro-rata basis over the useful life of respec ve assets as prescribed under schedule-II to the Companies Act, 2013.

a. On straight-line method in respect of

i) Buildings of Paper machine-II, III, IV, ETP-II, Power Genera on Unit-II & III at Balasore.

ii) Plant & machinery of Paper Machine III, IV, ETP-II, Power Genera on unit-II & III at Balasore.

b. On wri en down value method in respect of other assets.

c. Leasehold land is amor sed over the period of lease.

d. So ware licenses are amor sed over a period of six years.

Addi on to an asset, is depreciated over the remaining useful life of that asset, except when such addi on retains a separate iden ty and is capable of being used a er the asset is disposed of, such addi ons are depreciated independently over its own useful life.

Depreciable value of fixed asset is its cost of acquisi on as reduced by residual value of five percent of the cost of acquisi on of the asset.

1.5 Investments

Long term investments are stated at cost. Diminu on in value of non-current investments other than temporary in nature is provided for in the accounts. Current Investments are stated at cost or net realisable value, whichever is lower.

Notes to financial statements for the year ended 31st March, 2017

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i Paper Mills Ltd.


1.6 Inventories

a) Finished goods, stock-in-process, raw materials, stores, chemicals and spare parts are valued at lower of cost or net realisable value.

b) Valua on of inventory is done under weighted average cost formula.

c) Inventories do not include items of spare parts which meets the recogni on criteria of plant, property and equipment and be treated as such.

1.7 Re rement benefits

a) Contribu on to provident fund is made at a pre-determined rate and charged to revenue on accrual basis.

b) Company’s liability towards gratuity and leave encashment is actuarially determined at each balance sheet date using the projected unit credit method. Actuarial gains and losses are recognized in revenue. The contribu on towards Gratuity and Leave Encashment liability are funded with the LIC.

1.8 Foreign currency transac ons

a) Transac ons in foreign exchange covered by forward contracts are accounted for at the contracted rates.

b) Transac ons other than those covered by forward contracts are recognised at the exchange rates prevailing on the date of their occurrence.

c) Monetary assets & liabili es in foreign currency that are outstanding at the year end and not covered by forward contracts are translated at the year end exchange rates.

d) The exchange differences arising from long term foreign currency monetary items rela ng to the acquisi on of a depreciable asset are added to or deducted from the cost of the depreciable capital assets. Other exchange differences arising from long-term foreign currency monetary items are transferred to “Foreign currency monetary item transla on difference account” to be amor sed over the life of such monetary items but not beyond 31st March 2020. Other exchange differences are recognized as income or expense in the profit &loss account.

1.9 Revenue Recogni on

Revenue from sale of goods is recognized when significant risks and rewards in respect of ownership of products are transferred to customers. Revenue from sale of goods is inclusive of excise duty and net of returns, sales tax and applicable trade discounts and allowances.

Dividend income is recognized when the uncondi onal right to receive the income is established. Income from interest on deposits, loans and interest bearing securi es is recognized on a me propor onate method using underlying interest rates.

Insurance and other claims/refunds are accounted for as and when admi ed.

1.10 Con ngent liabili es and provisions:

Con ngent liabili es are disclosed a er a careful evalua on of facts and legal aspects of the ma er involved. Provisions are recognized when the company has legal / construc ve obliga on, as a result of a past event, for which it is probable that a cash ou low may be required and a reliable es mate can be made for the amount of the obliga on.

1.11 Borrowing cost:

Borrowings cost that are a ributable to the acquisi on or construc on of qualifying assets is capitalized as part of the cost of such assets. All other borrowing costs are charged to revenue. Exchange difference on the principal amount of the foreign currency borrowings to the extent that they are regarded as an adjustment to the interest cost as mandated by paragraph 4(e) of Accoun ng Standard – 16 are treated as Borrowing Cost.

Notes to financial statements for the year ended 31st March, 2017 (Contd.)

72

1.12 Taxa on

Provision for tax is made for both current and deferred taxes. Provision for current tax is made at the current tax rates based on assessable income.

Deferred taxes reflect the impact of current year’s ming differences between taxable income and accoun ng income for the year and reversal of ming differences of earlier years. The deferred tax in respect of ming differences that originate during the tax holiday period and reverse during the tax holiday period is not recognized.Deferred tax assets are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.Deferred tax assets and liabili es are measured using the tax rates and tax laws that have been enacted.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

1.13 Government subsidy/grant:

Capital subsidy granted by the government is treated as capital reserve and interest subsidy is treated as a revenue receipt except to the extent it is adjusted towards pre-opera ve cost for the specified assets.

1.14 Earnings per share:

Basic earnings per share are calculated by dividing the net profit/loss for the period a ributable to equity shareholders (a er deduc ng preference dividends and a ributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average numbers of equity shares outstanding during the period are adjusted for the events of bonus issue and share split.

For the purpose of calcula ng diluted earnings per share, the net profit or loss for the period a ributable to equity shareholders and the weighted average number of equity shares outstanding during the period are adjusted for the effects for all dilu ve poten al equity shares.

1.15 Impairment of assets

The company iden fies impairable assets at the year-end in accordance with the guiding principles of Accoun ng Standard 28, no fied by the Central Government of India, for the purpose of arriving at impairment loss thereon being the difference between the book value and recoverable value of relevant assets. Impairment loss, when crystallizes, are charged against revenues for the year.

1.16 Segment repor ng

Segments have been iden fied and reported taking into account nature of products, the differing risks and returns associated with opera ons.

1.17 Opera ng lease

Leases where the lessor effec vely retains substan ally all the risks and benefits of ownership over the leased term are classified as opera ng leases. Opera ng lease payments are recognised as an expense in the profit and loss account on a straight-line basis over the lease term.

1.18 Cash and cash equivalents

In the cash flow statement, cash and cash equivalents includes cash in hand, demand deposits with banks, other short term highly liquid investments with original maturi es of three months or less.

1.19 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transac ons of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from opera ng, inves ng and financing ac vi es of the Company are segregated based on the available informa on.


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2.1 SHARE CAPITALPar culars As at

31st March, 2017 As at

31st March, 2016Authorised6,20,00,000 Equity shares of ` 2/- each 1,240.00 1,240.0061,25,000 (61,25,000) Preference shares of ` 100/- each 6,125.00 6,125.00Issued, subscribed & paid up604,99,050 (604,99,050) Equity shares of ` 2/- each fully paid 1,209.98 1,209.9861,25,000 (61,25,000) 8% Cumula ve redeemable non-conver ble preference shares (CRNPS) of Rs. 100/- each fully paid up

6,125.00 6,125.00

Total 7,334.98 7,334.98

a) Reconcilia on of the shares outstanding at the beginning and at the end of the repor ng year

Par culars 2016-17 2015-16 Number Amount Number Amount

(i) Equity sharesAt the beginning of the year 6,04,99,050 1,209.98 6,04,99,050 1,209.98 At the end of the year 6,04,99,050 1,209.98 6,04,99,050 1,209.98 (ii) Preference sharesAt the beginning of the year 61,25,000 6,125.00 61,25,000 6,125.00 At the end of the year 61,25,000 6,125.00 61,25,000 6,125.00

b) Terms / rights a ached to shares (i) Equity shares The Company has only one class of equity shares having a par value of ` 2/- per share. Each holder of

equity shares is en tled to one vote per share. 65,352 numbers of shares, which have been transferred to Investor Educa on and Protec on Fund Suspense Account pursuant to sec on 124(6) of Companies Act, 2013 does not carry any vo ng right. The Company declares and pay dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Mee ng.

In the event of liquida on of the Company, the holders of equity shares will be en tled to receive remaining assets of the Company, a er distribu on of all preferen al amounts. The distribu on will be in propor on to the number of equity shares held by the shareholders.

(ii) Preference shares The Cumula ve Redeemable Non-Conver ble Preference Shares (CRNPS) of ` 100/- each fully paid up

carry cumula ve dividend @8% p.a. The Company declares and pay dividends in Indian rupees on pro-rata basis from the date of allotment. The

dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Mee ng. Holders of CRNPS have vo ng rights on ma ers pertaining to CRNPS.

In the event of liquida on of the Company before redemp on of CRNPS, the holders of CRNPS will have priority over equity shares in the repayment of capital. 50,00,000 CRNPS are redeemable at a premium of ` 500 per share and 11,25,000 CRNPS are redeemable at a premium of ` 600 per share on the expiry of 12 years from the date of issue, with an op on to redeem it earlier at a premium to be decided mutually between the Company and the CRNPS holders at a mee ng of CRNPS holders called for this purpose.

Notes to financial statements for the year ended 31st March, 2017 (Contd.)(` in Lacs)

74

c) Shareholders holding more than 5% shares in the Company

Name of shareholder 2016-17 2015-16 Number % of

Holding Number % of

Holding (i) Equity sharesDiwakar Viniyog Private Limited 94,69,810 15.65% 94,69,810 15.65%Emami Limited 79,46,000 13.13% 79,46,000 13.13%Suntrack Commerce Private Limited 76,33,900 12.62% 76,33,900 12.62%Bhanu Vyapaar Private Limited 60,05,250 9.93% 60,05,250 9.93%

(ii) Preference sharesEmami Estates Private Limited 3,75,000 6.12% 3,75,000 6.12%Zandu Realty Limited 12,80,000 20.90% 12,80,000 20.90%Oriental Sales Agencies (India) Private Limited 6,75,000 11.02% 6,75,000 11.02%Sneha Niketan Private Limited 4,05,500 6.62% 4,05,500 6.62%Zen Business Private Limited 3,17,000 5.18% 3,17,000 5.18%Sneha Abasan Private Limited 7,29,000 11.90% 7,29,000 11.90%Karan Business Private Limited 6,77,000 11.05% 6,77,000 11.05%Sneha Enclave Private Limited 5,52,000 9.01% 5,52,000 9.01%Sneha Gardens Private Limited 5,64,500 9.22% 5,64,500 9.22%

2.2 RESERVES AND SURPLUS (` in Lacs)

Par culars As at 31st March, 2017


a. Capital reserve 133.50 133.50 b. Securi es premium account 20,134.57 20,134.57 c. General reserve 14,000.00 14,000.00 d. SurplusOpening balance 3,351.51 1,586.25 Add: Net profit / (net loss) for the current year 2,593.51 2,791.91 Less: Appropria ons

Proposed dividend on equity shares - 363.00 Proposed dividend on preference shares - 490.00 Corporate dividend tax - equity dividend - 73.90 Corporate dividend tax - preference dividend - 99.75 Total appropria ons - 1,026.65

Net surplus in the statement of profit & loss 5,945.02 3,351.51 Total 40,213.09 37,619.58

The Company, a er the balance sheet date has proposed final dividend of Re.1.20 (Re. 0.60) per equity share and dividend of ` 8.00 (` 8.00) per cumula ve redeemable non-conver ble preference share. In 2016-17, no liability is recognized on this account pursuant to para 8.5 of Accoun ng Standard – 4 ‘Con ngencies and events occurring a er Balance Sheet’ as no fied by Ministry of Corporate Affairs through Companies (Accoun ng Standards) Amendment Rules, 2016 dated 30.03.2016.


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2.3 LONG TERM BORROWINGS



Term Loans (Secured)From Banks 77,061.14 80,503.37 Less: Current maturi es of long term debt * 11,626.02 9,795.86

Total 65,435.12 70,707.51 Nature of Security :Term loans of ̀ 77,061.14 lacs (` 80,503.37 lacs) are secured by deposit of tle deeds in respect of present and future immovable proper es and hypotheca on of present and future movable fixed assets on a pari-passu basis and second charge on current assets on pari-passu basis.

Terms of Repayment of Term Loans :

Bank Name Terms of repayment Rate of Interest Outstanding in FC ($ in Million)

Outstanding in INR

Allahabad Bank ECB Repayable in 19 (20) quarterly instalments.

6 month LIBOR plus 4.5% p.a.

9.04 (10.00)

5,862.43 (6,625.00)

Exim Bank ECB Repayable in 28 quarterly instalments commencing from June, 2017.


14.00 (14.00)

9,079.00 (9,275.00)

IDBI Bank ECB Repayable in 23 (24) quarterly instalments.

6 month LIBOR plus 5% p.a.

12.46 (13.00)

8,079.23 (8,612.50)

Axis Bank ECB Repayable in 19 (20) quarterly instalments.


14.80 (15.00)

9,597.80 (9,937.50)

Axis Bank ECB Repayable in 20 quarterly instalments commencing from April,2018.


10.00 (10.00)

6,485.00 (6,625.00)

Axis Bank FCNR (B) Repayable in (18) 21 quarterly instalments.


13.02 (14.88)

8,443.75 (9,855.00)

State Bank of India

FCNR (B) Repayable in 12 (16) quarterly instalments.

6 month LIBOR + applicable spread p.a.

8.22 (10.40)

5,329.37 (6,890.00)

State Bank of India

FCNR (B) Repayable in 20 (24) quarterly instalments.

6 month LIBOR + applicable spread p.a.

8.12 (9.02)

5,266.73 (5,975.75)

RBL Bank FCNR (B) Repayable in 22 (24) quarterly instalments.


7.43 (7.62)

4,815.23 (5,045.31)

ICICI Bank FCNR (B) Repayable in 20 quarterly instalments commencing from June,2019.


11.54 -

7,481.54 -

State Bank of Hyderabad

RTL repaid in full during the year. SBH Base Rate + 3% p.a.

- (3.73)

- (2,472.36)

ICICI Bank RTL Repayable in 10 (14) quarterly instalments. The Company has entered into principal swap in USD.

ICICI Bank Base rate + applicable spread p.a.

5.64 (7.89)

3,655.70 (5,228.47)


76

Bank Name Terms of repayment Rate of Interest Outstanding in FC ($ in Million)

Outstanding in INR

ICICI Bank RTL Repayable in 13 (17) quarterly instalments. The Company has entered into principal swap in USD.

ICICI Bank Base rate + applicable spread p.a.

4.57 (5.98)

2,965.36 (3,961.48)

Total 118.83 77,061.14 (121.52) (80,503.37)

* The amount repayable within next 12 month for the above loans has been classified as “Current Maturi es” in Note No. 2.9.

2.4 DEFERRED TAX LIABILITIES NET



Deferred tax liabili esTax impact due to difference between tax deprecia on and book deprecia on

11,629.39 7,883.93

11,629.39 7,883.93 Deferred tax assetsTax Impact of unabsorbed deprecia on 7,543.49 4,538.63 Tax Impact of carry forward of business losses 429.18 429.18 Tax Impact of expenses charged off in financial statements but allowance under tax law deferred

111.15 75.98

8,083.82 5,043.79 Total 3,545.57 2,840.14

2.5 OTHER LONG TERM LIABILITIESTrade deposits 471.75 449.53 Reten on money 14.51 14.27

Total 486.26 463.80

2.6 LONG TERM PROVISIONSProvision for employees benefits - Gratuity 423.99 321.87 - Earned leave 13.95 10.28

Total 437.94 332.15

2.7 SHORT TERM BORROWINGSSecured Working capital borrowings from banks 33,389.62 25,201.39 Buyers credit for capital goods 2,385.36 1,707.59

Total 35,774.98 26,908.98

Nature of Security :Short term borrowings are secured by hypotheca on of present and future stock of materials, stock-in-process, finished goods, stores and spares, book debts, outstanding money, claims receivable and further secured by way of second charge on all immovable and movable proper es/fixed assets both present and future on a pari passu basis.


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2.8 TRADE PAYABLES (` in Lacs)



Other than micro, small and medium enterprisesTrade payables

For goods 6,148.70 5,035.25 For services 1,247.32 882.59 For capital goods 756.50 1,561.24

Micro, small and medium enterprises Trade payables

For goods 59.34 39.76 For services - 1.48

Total 8,211.86 7,520.32

2.9 OTHER CURRENT LIABILITIESCurrent maturi es of long term debt 11,626.02 9,795.86 Interest accrued but not due on borrowings 651.93 514.58 Unpaid dividend 5.80 5.56 Statutory dues 300.32 228.04 Advance from customers 121.48 105.36 Interest payable on trade deposits 35.16 31.10 Liabili es for expenses 545.47 375.89

Total 13,286.18 11,056.39

2.10 SHORT TERM PROVISIONS Current Tax (net of tax payment) 234.04 - Dividend on equity shares - 363.00 Dividend on preference shares - 490.00 Tax on equity dividend - 73.90 Tax on preference dividend - 99.75

Total 234.04 1,026.65


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2.11 FIXED ASSETS (` in Lacs)(a) Current year

Fixed assets Gross block Accumulated deprecia on and amor sa on Net block As at

31.3.2017 As at

01.04.2016 Addi ons Disposals /

Adjustment As at

31.3.2017 As at

01.04.2016 For the

year Disposals / Adjustment

As at 31.3.2017

Tangible assetsLandFree hold 724.98 - - 724.98 - - - - 724.98 Lease hold 1,282.48 - - 1,282.48 64.32 20.39 - 84.71 1,197.77 BuildingsFactory 17,041.46 7.36 303.15 16,745.67 1,539.78 531.31 - 2,071.09 14,674.58 Non factory 9,132.51 1,786.62 94.41 10,824.72 597.02 297.65 - 894.67 9,930.05 Plant and equipments 1,19,234.90 4,323.86 1,342.58 1,22,216.18 26,207.37 4,407.97 0.30 30,615.04 91,601.14Furniture and fixtures 1,165.07 53.75 1.25 1,217.57 857.24 97.79 0.99 954.04 263.53 Vehicles 301.20 85.88 47.50 339.58 229.49 28.49 39.13 218.85 120.73 Office equipments 99.54 22.83 - 122.37 67.71 19.87 - 87.58 34.79 Computers 267.82 37.15 0.80 304.17 186.12 65.86 0.77 251.21 52.96 Total 1,49,249.96 6,317.45 1,789.69 1,53,777.72 29,749.05 5,469.33 41.19 35,177.19 1,18,600.53 Intangible assetsComputer so ware 154.96 4.46 - 159.42 119.47 15.34 - 134.81 24.61 Total 154.96 4.46 - 159.42 119.47 15.34 - 134.81 24.61 Capital work in progress 457.83 3,603.57 3,525.70 535.70 - - - - 535.70 Total 457.83 3,603.57 3,525.70 535.70 - - - - 535.70


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2.11 FIXED ASSETS (` in Lacs)(a) Previous year

Fixed assets Gross block Accumulated deprecia on and amor sa on Net blockAs at

31.3.2016 As at

01.04.2015 Addi ons Disposals /

Adjustment As at

31.3.2016 As at

01.04.2015 For the

year Disposals / Adjustment

As at 31.3.2016

Tangible assets Land Free hold 724.98 - - 724.98 - - - - 724.98 Lease hold 1,222.21 60.27 - 1,282.48 49.73 14.59 - 64.32 1,218.16 Buildings Factory 3,471.25 13,570.21 - 17,041.46 1,426.76 113.02 - 1,539.78 15,501.68 Non factory 3,114.17 6,018.34 - 9,132.51 496.13 100.89 - 597.02 8,535.49 Plant and equipments 61,693.21 57,566.70 25.01 1,19,234.90 23,993.94 2,230.40 16.97 26,207.37 93,027.53 Furniture and fixtures 1,069.50 97.38 1.81 1,165.07 752.60 106.09 1.45 857.24 307.83 Vehicles 288.44 12.76 - 301.20 196.10 33.39 - 229.49 71.71 Office equipments 69.68 29.86 - 99.54 56.32 11.39 - 67.71 31.83 Computers 186.58 82.49 1.25 267.82 152.10 35.25 1.23 186.12 81.70 Total 71,840.02 77,438.01 28.07 1,49,249.96 27,123.68 2,645.02 19.65 29,749.05 1,19,500.91 Intangible assets Computer so ware 140.81 14.15 - 154.96 96.44 23.03 - 119.47 35.49 Total 140.81 14.15 - 154.96 96.44 23.03 - 119.47 35.49 Capital work in progress

61,993.48 13,290.31 74,825.96 457.83 - - - - 457.83

Total 61,993.48 13,290.31 74,825.96 457.83 - - - - 457.83

2.12 NON CURRENT INVESTMENTSPar culars As at


31st March, 2016 (Long term, at cost)Non trade(a) Investment in equity instruments :Unquoted3,07,300 (3,07,300) Equity shares of ` 10/- each fully paid up of Pan Emami Cosmed Ltd.

0.62 0.62

Quoted833 (833) Equity shares of ` 2/- each fully paid up of Emami Infrastructure Ltd.

0.09 0.09

4,66,500 (4,66,500) Equity shares of Re.1/- each fully paid up of Emami Ltd. 55.41 55.41 (b) Investment in government securities :(lodged with government authorities)5 years national saving certificates 0.60 0.60 6 years national saving certificates 0.02 0.02 7 years national saving certificates 0.01 0.01 Total 56.75 56.75 Market value of quoted investment 4,965.89 4,347.47 Aggregate book value of quoted investment 55.50 55.50 Aggregate book value of unquoted investment 1.25 1.25


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2.13 LONG TERM LOANS AND ADVANCES (` in Lacs)Par culars As at


31st March, 2016 Secured, considered good

Capital advances - 1.85 Unsecured, considered good

Capital advances 1,543.56 664.73 Deposits 1,192.23 1,222.47 Loans and advances to employees 27.83 28.42 Other loans and advances

Cenvat credit receivable 342.60 342.60 Prepaid expenses 2.09 1.52 Service tax refundable 21.19 21.19 MAT credit entitlement 3,065.69 2,370.29 Inter corporate deposits - 272.00

Total 6,195.19 4,925.07

2.14 CURRENT INVESTMENTSNon tradeGovernment securities(lodged with government authorities)6 years na onal saving cer ficates - 0.80

Total - 0.80

2.15 INVENTORIESRaw materials 14,361.73 11,420.10 Work-in-progress 1,085.93 603.00 Finished goods 3,936.98 2,215.04 Stores and spares 3,516.47 3,041.61

Total 22,901.11 17,279.75 Inventory includes following inventories in transit :Raw materials 3,573.53 2,266.59 Stores and spares 61.31 9.46

3,634.84 2,276.05

2.16 TRADE RECEIVABLESUnsecured, considered goodOutstanding for a period exceeding six months from the date they are due for payment

352.18 29.81

Others 14,597.50 10,236.67 Total 14,949.68 10,266.48


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2.17 CASH AND BANK BALANCES (` in Lacs)Par culars As at


31st March, 2016 Cash & cash equivalents

Balances with banksCurrent account 521.57 308.38 Fixed deposit with banks (Original maturity of less than 3 months)

2,450.00 7,214.08

Cash in hand 13.57 14.28 Cheques in hand 0.61 0.39

Other bank balancesBalances with banks in unpaid dividend accounts 5.80 5.56 Fixed deposit with banks for margin

Original maturity of more than 12 months - 92.94 Others 396.22 416.57

Total 3,387.77 8,052.20

2.18 SHORT TERM LOANS AND ADVANCESUnsecured, considered good

Advance for supply of goods and for rendering services 2,631.10 1,507.29 Advance Income Tax (net of provision) - 6.05 Deposits 368.51 147.61 Other loans and advances

Prepaid expenses 149.65 137.66 Cenvat credit receivable 4,965.35 3,258.32 Receivable from sales tax authorities 27.61 30.88 Advances to employees 69.25 84.57

Total 8,211.47 5,172.38

2.19 OTHER CURRENT ASSETSInterest receivable 16.91 62.84 Export incen ve receivable 80.30 -

Total 97.21 62.84

2.20 REVENUE FROM OPERATIONSSale of paper and paperboard 1,18,082.65 54,291.58 Other operating revenues 225.21 198.19

1,18,307.86 54,489.77 Less: Excise duty 4,472.38 609.28

Total 1,13,835.48 53,880.49


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2.21 OTHER INCOME (` in Lacs)Par culars As at


31st March, 2016 Insurance claims 44.12 17.79 Dividend from long-term investments 40.82 14.00 Profit on sale of current investments 240.11 535.89 Profit on sale of fixed assets 1.31 0.05 Export incentives 111.26 - Foreign exchange fluctuation 1,293.63 52.19 Others 115.20 18.52

Total 1,846.45 638.44

2.22 COST OF MATERIALS CONSUMEDPulp and waste paper 63,702.80 28,027.77 Chemicals 9,803.09 3,769.74

Total 73,505.89 31,797.51

2.23 CHANGES IN INVENTORIES OF FINISHED GOODS & WORKIN PROGRESSOpening stock

Finished goods 2,215.04 1,680.19 Work-in-progress 603.00 294.74

2,818.04 1,974.93 Closing stock

Finished goods 3,936.98 2,215.04 Work-in-progress 1,085.93 603.00

5,022.91 2,818.04 (2,204.87) (843.11)

Less: Changes in Inventories of finished goods and work-in-progress for the trial run periodOpening stock

Finished goods - - Work-in-progress - 103.84

- 103.84 Closing stock

Finished goods - 1,384.28 Work-in-progress - 594.36

- 1,978.64 - (1,874.80)

Total (2,204.87) 1,031.69


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2.24 EMPLOYEE BENEFITS EXPENSES (` in Lacs)Par culars As at


31st March, 2016 Salaries and wages 4,912.90 2,864.82 Contribution to provident and other funds 382.29 252.65 Workmen and staff welfare expense 495.93 289.35

Total 5,791.12 3,406.82

2.25 FINANCE COSTSInterest expense 5,453.75 1,695.63 Loss on foreign currency transaction and translation 268.14 499.92 Other borrowing costs 379.68 66.05

6,101.57 2,261.60 Less: Interest received 399.84 647.82

Total 5,701.73 1,613.78

2.26 DEPRECIATION AND AMORTISATION EXPENSESOn Tangible assets 5,469.33 2,645.02 On Intangible assets 15.34 23.03

Total 5,484.67 2,668.05

2.27 OTHER EXPENSESConsump on of stores and spare parts 4,961.81 2,420.38 Power and fuel 10,833.35 5,832.61 Manufacturing expenses 2,126.47 1,046.00 Rent 88.04 31.11 Repairs to building 61.95 109.45 Repairs to machinery 393.98 186.62 Repairs to others 96.89 93.10 Insurance 130.54 87.97 Rates and taxes 1,278.71 945.17 Donation 31.48 13.58 Directors' sitting fees 10.70 12.00 Freight outward 1,148.85 817.09 Selling expenses 1,625.25 585.54 Loss on sale of fixed assets - 15.08 Miscellaneous expenses 1,316.42 724.10

Total 24,104.44 12,919.80


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2.28 CONTINGENT LIABILITIES AND COMMITMENTSa) Con ngent liabili es not provided for in respect of:

i) Outstanding guarantees and le ers of credit furnished by the bankers on behalf of the Company amoun ng to ` 5,651.14 lacs (` 4,178.45 lacs) are secured by hypotheca on of current assets, as specified in Note 2.7 and those amoun ng to Nil (` 1,062.09 lacs) are secured by deposit of tle deeds of immovable proper es and hypotheca on of movable fixed assets, as specified in Note 2.3.

ii) Sales tax /VAT/entry tax / central excise du es/service tax/ESI contribu on and other taxes under appeal / review – ` 453.95 lacs net of advances of ` 158.48 lacs (` 466.99 lacs net of advances of ` 169.76lacs).

iii) Bonds / undertakings given under EPCG scheme to custom authority – ` 5,601.02 lacs (` 5,565.02 lacs).

iv) Withdrawal of incen ve tariff of electricity by NESCO ` 41.53 lacs net of deposit of ` 61.93 lacs (` 46.26 lacs net of deposit of ` 61.93 lacs).

b) Capital and other commitments:Es mated amounts of capital contracts remaining to be executed and not provided for (net of advances) ` 2,886.78 lacs (` 1,583.93 lacs).

2.29 ENTRY TAXAs per the interim order of Honourable Supreme Court of India dated 03.02.2010 and 09.04.2013 the Company is directed to deposit 1/3rd and 50% respectively of the entry tax on goods imported from outside and not manufactured within the state of Orissa. In pursuance to the said orders the Company has deposited a sum of ` 649.52 lacs (` 506.93 lacs) as against total amount of ` 1,347.29 lacs (` 1,026.98 lacs) for the financial year from 2008-09 to 2016-17.

2.30 DEFERRAL/CAPITALIZATION OF EXCHANGE DIFFERENCESThe Company has exercised the option permitted by Accounting Standard Amendment Rule, 2009 under the transitional provisions contained in Para 46 of Accounting Standard (AS) 11 (vide GOI Notification No.GSR 225(E) dated 31st March 2009 as amended by Notifications No. GSR 378(E) dated 11th May, 2011 and GSR 913 (E) dated 29th December, 2011). Accordingly, a sum of ` 1,632.25 lacs being the exchange gain for the year (` 1,462.45 lacs being the exchange loss for the previous year) arising on reporting of Long-Term Foreign Currency Monetary Items has been deducted from (added to) the cost of depreciable capital asset as at 31st March 2017. The net exchange loss of ` 12,013.61 lacs (` 13,645.86 lacs) in the carrying amount of the depreciable capital asset(s) as on the Balance Sheet date would be depreciated over the remaining useful life of the assets.

2.31 The Company has incurred during the year a sum of ` 191.91 lacs (` 177.29 lacs) towards Corporate Social Responsibility within the purview of CSR expenditure as specified in Schedule-VII to the Companies Act,2013.

2.32 DISCLOSURES REQUIRED UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT.Delayed payment made during the year on account of principal - Nil (Previous Year - NIL) and delayed payment due as at the end of the year on account of principal - Nil (Previous Year NIL); hence, no interest is paid / payable under MSMED Act, 2006.


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2.33 CAPITAL WORK IN PROGRESS INCLUDES THE FOLLOWING PRE OPERATIVE AND TRIAL RUN EXPENSES PENDING ALLOCATION/CAPITALIZATION:

(` in Lacs)

Par culars 2016-17 2015-16Interest and financial charges 2,969.99 Foreign exchange fluctuation 3,549.70 Pre-operative expenses 463.06 Trial run expenses (net) - Revenue 30,797.69 Other Income 63.62 30,861.31 Expenses Cost of Materials Consumed 25,164.57 Changes in Inventories of finished goods and work-in-progress (1,874.79) Employees Benefits Expenses 1,648.93 Finance Cost 1,149.95 Consumption of Stores and Spare Parts 1,309.63 Power and Fuel 3,592.68 Manufacturing Expenses 519.89 Rates and Taxes 298.21 Foreign Exchange Fluctuation Loss /(Gain) 258.02 Other Overhead Expenses 703.45 32,770.54 1,909.23 Add : Expenditure incurred upto Previous Year 12,672.38 Total 21,564.36 Less : Alloca on to Fixed Assets 21,564.36

Total - -

2.34 VALUE OF IMPORT ON CIF BASIS DURING THE YEAR (including trial opera ons)Par culars As at


31st March, 2016 a) Raw material and chemicals 39,732.52 25,817.02b) Stores and spares 817.14 484.65c) Capital goods 1,209.95 689.58d) Others 480.84 403.24


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2.35 EXPENDITURE INCURRED IN FOREIGN CURRENCY DURING THE YEAR (including trial opera ons)

(` in Lacs)



a) Interest and financial charges 3,852.99 3,545.84b) Other interest 95.84 92.17c) Travelling expenses 17.07 43.09d) Professional fees 128.11 247.00e) Commission 47.18 -

2.36 IMPORTED AND INDEGENOUS RAW MATERIALS, STORESAND SPARE PARTS CONSUMED DURING THE YEARPar culars 31st March 2017 31st March 2016

(` in lacs) % (` in lacs) %a. Consump on of raw materials and chemicals (including trial opera ons)Indigenous 35,264.70 47.98 35,631.99 62.55Imported 38,241.19 52.02 21,330.10 37.45

Total 73,505.89 100.00 56,962.09 100.00b. Consumption of stores and spares (including trial operations) Indigenous 3,834.71 92.04 3,176.03 85.15 Imported 1,127.10 7.96 553.98 14.85

Total 4,961.81 100.00 3,730.01 100.00

2.37 EARNINGS IN FOREIGN CURRENCY (including trial opera ons)Par culars As at


31st March, 2016 Export of goods on FOB basis 2,556.56 714.73

2.38 EARNINGS PER SHARE (EPS)Net Profits a er tax (` In lacs) 2,593.51 2,791.91Less :Dividend on Preference Share 490.00 490.00Tax on Preference Dividend 99.75 99.75Net Profit available for Equity Share Holders 2,003.75 2,202.16Number of equity shares (Nos. in lacs) 604.99 604.99Basic and diluted earnings per share (`) 3.31 3.64Nominal Value per share (`) 2.00 2.00

Proposed preference dividend and dividend distribu on tax thereon, has not been recognized as liability as on 31.03.2017 (refer to Note 2.46), but the same has been considered in determina on of earning per share pursuant to paragraph 13 of Accoun ng Standard 20 ‘Earning per Share’.


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2.39 RELATED PARTY DISCLOSURES

a. Key management personnel Shri A.V. Agarwal, Execu ve Chairman Shri Manish Goenka, Whole me director Shri P.S. Patwari, Execu ve Director Shri M.B.S. Nair, Director Opera ons Shri S.K. Khetan, President (Finance) & CFO Shri G.Saraf, VP (Finance) & Secretary Other Directors Shri J.N. Godbole, Independent Director Shri S.Balasubramanian, Independent Director Shri H.M. Marda, Independent Director Shri J.K. Khetawat, Independent Director Shri U.G. Bhat, Independent Director Smt Richa Agarwal, Non-Execu ve Director b. Rela ves of key management personnel Shri R. S. Agarwal Smt. Usha Agarwal Shri Harsh Vardhan Agarwal Smt. Pree Sureka Shri Shyam Patwari c. Enterprises where key management personnel and their rela ves are able to exercise significant

influence Emami Limited Emami Cement Limited Emami Capital Market Limited AMRI Hospitals Limited Oriental Sales Agencies (India) Private Limited Suntrack Commerce (P) Ltd. Sneha Enclave Private Limited Sneha Gardens Private Limited Emami Estates Private Limited Bhanu Vyapaar Private Limited Auto Hi-Tech Private Limited Diwakar Viniyog Private Limited Pan Emami Cosmed Ltd TMT Viniyogan Limited


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Disclosure of transac ons between the Company and related par es (` in Lacs)

Par culars

Key Management Personnel

Rela ves of Key Management

Personnel

Enterprise described in ( c ) above

Total

31st March 2017

31st March 2016

31st March 2017

31st March 2016

31st March 2017

31st March 2016

31st March 2017

31st March 2016

Remunera on to Key Management Personnel

545.64 485.74 - 545.64 480.27

Rent, Maintenance and Other Charges Payable

0.53 0.53 1.44 1.44 88.43 100.46 90.40 102.27

Salary Paid - 26.16 24.34 - 26.16 24.34Reimbursement for SAP maintenance

- - 61.47 42.35 61.47 42.35

Interest received - - 286.67 550.35 286.67 550.35Dividend Received - - 40.82 13.99 40.82 13.99Balance as on 31st March- Investments - - 55.41 55.41 55.41 55.41- Security Deposit Given - - - 25.83 - 25.83- Inter Corporate Deposit - - - 272.00 - 272.00- Interest receivable on ICD - - - 34.68 - 34.68

2.40 GRATUITY AND OTHER POST EMPLOYMENT BENEFITThe Company‘s obliga on towards the gratuity fund and leave encashment fund are defined Benefit Plans. The details of actuarial valua on are given below

Par culars

2016-17 2015-16

Gratuity Leave encashment Gratuity Leave

encashment Funded Funded Funded Funded A Components of employer expenses

1. Current service cost 94.13 35.07 77.43 40.042. Interest cost 75.82 20.71 73.03 17.553. Expected return on plan assets (47.85) (19.80) (52.35) (20.67)4. Actuarial losses/(gains) 40.06 (30.99) (40.81) 33.855. Total expenses recognized in the statement of profit and loss. 162.16 4.99 57.30 70.77

B Net asset/(liability) recognized in balance sheet1. Present value of defined benefit obliga on 1,080.53 288.40 941.26 263.862. Fair value of plan assets 656.54 274.45 619.39 253.583. Net asset/(liability) recognized in balance sheet (423.99) (13.95) (321.87) (10.28)

C Change in defined benefit obliga on during the year1. Present value of Defined Benefit Obliga on at the beginning of period 941.26 263.86 879.52 173.77


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Par culars

2016-17 2015-16

Gratuity Leave encashment Gratuity Leave

encashment Funded Funded Funded Funded

2. Current service cost 94.13 35.07 77.43 40.043. Interest cost 75.82 20.71 73.03 17.554. Actuarial (gains)/losses 41.77 (30.50) (43.01) 33.095. Benefits paid (72.45) (0.74) (45.71) (0.59)6. Present value of Defined Benefit Obliga on at the end of period 1,080.53 288.40 941.26 263.867. Actual Return on plan assets 49.55 20.29 50.16 19.91

D Change in fair value of assets1. Plan assets at beginning of period 619.39 253.58 612.45 232.762. Expected return on plan assets 47.85 19.80 52.35 20.673. Actuarial gains/(loss) 1.70 0.49 (2.20) (0.76)4. Actual Company contribu ons 60.05 1.33 2.50 1.505. Benefits paid (72.45) (0.74) (45.71) (0.59)6. Plan assets at the end of period 656.54 274.46 619.39 253.58

E Actuarial assump ons 1. Mortality table (LIC) 2006-08

(Ul mate)2006-08

(Ul mate)2006-08

(Ul mate)2006-08

(Ul mate)2. Discount rate (%) 7.50% 7.50% 8.00% 8.00%3. Expected return on plan assets (%) 7.50% 7.50% 8.50% 8.50%4. Rate of escala on in salary (per annum) 6.00% 6.00% 6.00% 6.00%

Present value of the defined benefit obliga on and fair value of the plan assets

Posi on at year end As at 31.03.2017 As at 31.03.2016 As at 31.03.2015 As at 31.03.2014 As at 31.03.2013Gratuity Leave Gratuity Leave Gratuity Leave Gratuity Leave Gratuity Leave

Obliga ons 1,080.53 288.40 941.26 263.86 879.52 173.77 716.14 158.56 601.72 138.05Fair value of plan assets 656.54 274.45 619.39 253.58 612.45 232.76 573.27 197.08 516.39 174.98Surplus/ (deficit) in the plan

(423.99) (13.95) (321.87) (10.28) (267.07) 58.99 (142.87) 38.52 (85.33) 36.93

Experience adjustment percentage

Par culars For the year ending31.03.2017 31.03.2016 31.03.2015 31.03.2014 31.03.2013

Gratuity Leave Gratuity Leave Gratuity Leave Gratuity Leave Gratuity Leave% of Opening Plan Liabili es

4.61% 3.71% 7.90% 10.38% 4.45% 3.28% -8.00% -2.66% - -

% of Opening Plan Assets

0.28% 0.19% -0.36% -0.33% -0.45% -0.17% -0.41% -0.41% - -


(` in Lacs)

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2.41 PAYMENT TO AUDITORS (` in Lacs)



As auditorsAudit fee 13.80 13.74Tax audit fees 2.07 1.17Branch auditors 1.60 1.83

In other capacityFor certification and consultancyTo statutory auditors 14.65 4.75Out of pocket expenses to branch auditors 0.37 0.32

Total 32.49 21.81

2.42 EXPOSURE TOWARDS FOREIGN CURRENCY BORROWINGS NOT HEDGED BY A DERIVATIVE INSTRUMENT OR OTHERWISE:The newsprint prices generally move in tandem with landed cost of imported newsprint and also carry a risk of rupee appreciation. To mitigate this risk of rupee appreciation, the Company has availed foreign currency borrowings which are unhedged. The Company is having natural hedging for its’ foreign currency borrowings from direct export and from sale of newsprint, being an import substitute product. Unhedged foreign currency exposure by a derivative instrument or otherwise are given below:–

Par culars Currency Foreign Currency(in Million)

Amount(` in lacs)

31.03.17 31.03.16 31.03.17 31.03.16

Amounts payable in foreign currency

USD 159.70 157.89 1,08,754.04 1,04,605.02

EURO 3.49 2.30 2,417.23 1,731.34

GBP 0.50 0.50 404.75 477.601,11,576.02 1,06,813.96

2.43 The Company’s business activity falls within a single primary business segment which is “Manufacture of Paper and Paper Board” and the Company primarily operates in India and thus the disclosure requirements of AS- 17 “Segment Reporting”, notified in the Companies (Accounting Standard) Rules, 2006 are not applicable.

2.44 The Company has entered into operating lease agreements for office space, godowns, and guest house. The total charge to statement of profit and loss for the year on account of operating lease is ` 65.34 lacs. (` 35.42 lacs).Lease rental are charged on the basis of agreed terms. No significant restrictions have been imposed by the lessor on the leases. The leases can be renewed after completion of the lease term by mutually discussing the renewal terms with the lessor.

2.45 DISCLOSURE ON SPECIFIED BANK NOTES (SBNs)During the year, the Company had specified bank notes or other denomination notes as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December, 30 2016, the denomination wise SBNs and other notes as per the notification is given below:


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Par culars SBNs (`) Other denomina on

notes (`)

Total (`)

Closing cash in hand as on 8-11-16 16,07,000.00 5,34,982.41 21,41,982.41

(+) Permi ed receipts - 38,57,377.00 38,57,377.00

(-) Permi ed payments - 30,31,490.06 30,31,490.06

(-) Amount deposited in Banks 16,07,000.00 2,940.00 16,09,940.00

Closing cash in hand as on 30-12-16 - 13,57,929.35 13,57,929.35

* For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the no fica on of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.

2.46 The Board of Directors has recommended final dividend of ` 1.20 per equity share of ` 2/- each and a final dividend of ` 8.00 per preference share of ` 100/- each subject to approval of shareholders in ensuing Annual General Meeting. Proposed dividend as above amounting to ` 1,215.98 lac for the year 2016-17 and dividend distribution tax thereon, has not been recognized as liability as on 31.03.2017 in terms of revised Accounting Standard – 4 ‘Contingencies and events occurring after Balance Sheet’ as notified by Ministry of Corporate Affairs through Companies (Accounting Standards) Amendment Rules, 2016 dated 30.03.2016.

2.47 Previous year’s figures have been reclassified/ regrouped / rearranged wherever necessary.





Glimpse of the 34th Annual General Meetingheld on 10th August, 2016

CAUTIONARY STATEMENT

Statements in the Directors’ Report describing the Company's objec�ves, expecta�ons or forecasts may be forward-looking within the meaning of applicable securi�es laws and regula�ons. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's opera�ons include global and domes�c demand and supply condi�ons affec�ng selling prices of finished goods, input availability and prices, changes in government regula�ons, tax laws, economic developments within the country and other factors such as li�ga�on and industrial rela�ons.

�is Annual Report is available online at www.emamipaper.in

print@m

anjari.netThe cover of this Report is printed on Emami GlamKot (Coated Bleached Board)

Emami Paper Mills LimitedCIN : L21019WB1981PLC034161

Glimpse of the Shree Shree Jagannath Temple atEmami Nagar, Balgopalpur, Balasore, Odisha

Unit No. 1, 15th Floor, ACROPOLIS1858/1, Rajdanga Main Road, Kasba, Kolkata - 700107