West Coast Paper Mills Ltd

<dhhead>DIRECTORS’ REPORT</dhhead>

Your Directors are pleased to present the 69th Annual Report of your Company, together with the audited financial statements for the year ended 31st March 2024.

FINANCIAL RESULTS:

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

DIVIDEND:

Your Directors are pleased to recommend a dividend of Rs 8 per equity share (400%) for the financial year 2023-24, subject to shareholder’s approval at the forthcoming Annual General Meeting.

PERFORMANCE:

The performance of the Company during the year under review got marginally impacted compared to the previous year mainly on account of significant increase in wood cost, drop in paper prices due to market conditions and also major breakdown in one of the TG at Dandeli in Q3.

The Company shall continue to focus on improving its operating efficiencies with better product mix and minimizing manufacturing cost to improve financial performance.

PAPER AND PAPERBOARD DIVISION, DANDELI

The production of Paper and Paperboard was 303766 MT (95 % capacity utilization) during the year against 314919 MT in the last year (98% capacity utilization) i.e., lower by 11153 MT. The Sale of Paper and Paperboard was 304950 MT during the year against 310349 MT in the last year i.e., lower by 5399 MT. Turnover during the year was Rs 2427 Crores as against Rs 2605 Crores in the last year, i.e., lower by Rs 178 Crores. The Operating EBITDA margin was 25.91 % during the year.

CABLE DIVISION, MYSORE

The Production of Optical Fibre Cable was 84719 Kms during the year against 72246 Kms in last year, thereby higher production by 12473 Kms. The Sale of Optical Fibre Cable was 79387 Kms during the year as against 81388 Kms in the last year i.e. lower by 2001 Kms. The Turnover was Rs 188 Crores during the year as against Rs 186 Crores in the last year i.e., higher by Rs 2 Crores. The Operating EBITDA margin was 12.94 % during the year.

EXPORTS:

Export of Paper and Paperboard during the year was 2297 MT worth Rs 18 Crores (FOB) as against 2204 MT worth Rs 18 Crores (FOB) in the last year. Similarly, Export of Cable during the year was Rs 5 Crores (FOB) against Rs 10 Crores (FOB) in the last year.

FUTURE PLAN:

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

Additionally, the Company’s Cable Division has doubled its manufacturing capacity for Optical Fiber Cable by setting up a new manufacturing unit at Rangareddy, Hyderabad, Telangana, which is in operation now. The Cable division is also in the process of setting up its own Optical Fiber Draw Towers factory on the same premise and construction activities are underway. This plant would be operational in the current Financial Year. This Optical Fiber Plant will ensure seamless availability of Optical Fibers, a key raw material for optical fiber cable factories at Mysore and Hyderabad.

MEETINGS OF THE BOARD:

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

POLICY ON APPOINTMENT OF DIRECTORS, KMP, SENIOR EXECUTIVES AND REMUNERATION :

The Company has formulated a policy for appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-section (3) of Section 178 for Directors, Key Managerial Personnel (KMP) and Senior Executives of the Company. The Policy is available at the Company’s website and can be accessed at: https://www.westcoastpaper.com/policies/

PERFORMANCE EVALUATION OF INDEPENDENT DIRECTORS:

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

MANAGERIAL REMUNERATION:

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

DIRECTORS’ RESPONSIBILITY STATEMENT:

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

DIRECTORS AND KMP: Retirement

Shri Sudarshan Somani (DIN:00137568), Independent Director of the Company was retired from the services of the Company after completing of his second terms on 09.11.2023.

Retirement by Rotation

Smt. Shashi Bangur (DIN: 00053300) will retire from the office by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment.

Appointment

Shri Prakash Kacholia (DIN: 00002626) has been appointed as Additional Independent Director of the Company at the meeting of the Board of Directors, held on 9th November, 2023 and approved by the Shareholders through postal ballot on 9th January, 2024.

Re-appointment

Shri Shiv Ratan Goenka (DIN:00225734) has been re-appointed as Independent Director for second terms at the meeting of the Board of Directors, held on 9th November, 2023 and approved by the shareholders through postal ballot on 9th January, 2024.

DECLARATION BY INDEPENDENT DIRECTORS:

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

BOARD EVALUATION:

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

FAMILIARIZATION POLICY:

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

RELATED PARTY DISCLOSURE AND TRANSACTIONS:

All related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business in the compliance of applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons. The Details of related party disclosure and transaction as required by the Accounting Standards read with Section 134(3)(h) have been made in the notes to the Financial Statements.

The Policy on related party transaction and its materiality as approved by the Board is uploaded on the Company’s website and can be accessed at: https://www.westcoastpaper.com/policies/

ANNUAL RETURN:

Pursuant to the provisions of Section 92(3) of the Companies Act, 2013 a copy of Annual Return is available at the Company’s website and can be accessed at: https://www.westcoastpaper.com/investors/.

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

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

CORPORATE SOCIAL RESPONSIBILITY:

The Company has framed a Corporate Social Responsibility (CSR) Policy as required under Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, to oversee the CSR activities initiated by the Company and the policy may be accessed on the Company’s website.

Annual Report on CSR activities undertaken by the Company during the financial year ended on 31st March, 2024 in the prescribed format is annexed herewith forms a part of this report.

MANAGEMENT’S DISCUSSION AND ANALYSIS :

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

CORPORATE GOVERNANCE:

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

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

The Company is complying with Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with regard to Corporate Governance and reports to that effect are being regularly filed with the Stock Exchanges. The Company has obtained declaration from the Directors and Senior Management Personnel of the Company for compliance of Code of Conduct and the Certificate from CEO/CFO was placed before the Board of Directors at the meeting held on 27th May, 2024.

COMPLIANCE WITH SECRETARIAL STANDARD:

The Company has complied applicable Secretarial Standards issued by the ICSI under Section 118 of the Companies Act , 2013.

REPORTING OF FRAUDS:

Auditors of the Company have not reported any offence involving fraud is being or has been committed against the company by the officers or employees of the company, under section 143(12) of the Companies Act, 2013.

SHARE CAPITAL:

The paid-up Equity Share Capital as on 31st March, 2024 was Rs. 1320.98 lakhs comprising of 6,60,48,908 Equity Shares of Rs. 2/-each. During the year under review, the Company has not issued any further shares to the members or general public.

PUBLIC DEPOSITS

Your’s Company has not invited or accepted any deposits during the financial year ended on 31st March, 2024 under Section 73 of the Companies Act, 2013 and Rules made thereunder.

CONVERTIBLE/NON-CONVERTIBLE SECURITIES

Your Company has not issued any Convertible/Non-Convertible securities during the year ended March 31, 2024

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

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

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR):

Pursuant to Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility and Sustainability Report for the financial year ended on 31st March, 2024 is annexed herewith forms a part of this report.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Vigil Mechanism of the Company incorporates a policy under Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Rule 7 of the Companies (Meetings of the Board and its Powers) Rules 2014, provide the mechanism for Employees and Directors of the Company to approach the Executive Director and the Chairman of the Audit Committee of the Board. Protected disclosures can be made by a Whistle Blower by means of e-mail or telephone or letter to the Executive Director or to the Chairman of the Audit Committee. The policy on Vigil Mechanism/Whistle Blower is available on the Company’s website and can be accessed at: https://www. westcoastpaper.com/policies/

RISKS MANAGEMENT:

Pursuant to provisions of Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) & 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted the Risk Management Committee and laid down a framework to inform the Board about the particulars of Risks Identification, Assessment and Minimization Procedures. In the opinion of the Board, there is no such risk, which may threaten the existence of the Company.

DISCLOSURE PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

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

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT:

During the financial year ended on 31st March, 2024, there were no significant and material orders passed by the Regulators or Courts, which would impact the status of the Company and its future operations.

AUDITORS’ REPORT:

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

AUDITORS: a. Statutory Auditors and their Report

M/s Singhi & Co. Chartered Accountants, Kolkata re-appointed as Statutory Auditors at the 67th Annual General Meeting of the Company pursuant to the provision of rotation under Section 139 and 141 of the Companies Act, 2013 and Rule 7 of the Companies (Audit and Auditors) Rules, 2014, for a period of 5 consecutive years till the conclusion of 72nd Annual General Meeting, without any further ratification by the shareholders, pursuant to the amended provisions of Section 139 of the Companies Act, 2013 and Rules made there under, notified by Ministry of Corporate Affairs as on 07.05.2018. The observations of the Auditors in their report for the financial year 2023-24 on Accounts and the Financial Statements, read with the relevant notes are self-explanatory.

b. Secretarial Auditor and Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Board of Directors appointed Shri Naman Joshi, Bangalore practicing Company Secretary as Secretarial Auditor to carry out Secretarial Audit of the records maintained by the Company for the financial year 2023-24. The Report given by him for the said financial year in the prescribed Form No: MR 3 is annexed to this report.

c. Cost Auditor and Cost Audit Report

Pursuant to the provisions of Section 148(1) of the Act, 2013 and revised order of the Central Government dated 31.12.2014, the company has maintained cost accounts and records. The Cost Audit for the financial year ended on 31st March, 2023 was conducted by Shri Umesh Kini, Cost Accountant, Sirsi and as required Cost Audit Report was duly filed with Ministry of Corporate Affairs, Government of India. The Audit of the Cost Records for the financial year ended on 31st March, 2024 is being conducted by the said Cost Auditor and Report will also be filed with the Ministry of Corporate Affairs , Government of India.

INTERNAL CONTROL SYSTEM:

There are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of inputs, availing of services, fixed assets, for the sale of goods and providing of services. Full-fledged

Internal Audit department carries out pre and post audit of all significant transactions throughout the year. Company has also appointed M/s S.S.Kothari Mehta & Co., Chartered Accountants, New Delhi (outsourced) as Internal Auditor. Based on the Annual Internal Audit programme as approved by Audit Committee of Board, regular internal audits are conducted. Findings are placed before Audit Committee, which reviews and discuss the actions taken with the Management.

INDUSTRIAL RELATIONS:

Industrial Relations remained peaceful and cordial throughout the year under review. Your company value the long association of employees including contractors and their workmen to sustain industrial harmony and create a positive work environment. The process of renewal of tripartite long-term wage revision settlement with Joint Negotiation Committee of the Unions from 01.01.2023 is going on. Your Directors acknowledge the support and co-operation from employees.

CONSOLIDATED FINANCIAL STATEMENTS:

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

A Report on the performance and financial position of unlisted wholly owned subsidiaries and listed subsidiary company (Andhra Paper Limited) for the financial year ended 31.03.2024 included in the Consolidated Financial Statements is presented in the separate section AOC-1, forms a part of this report.

Pursuant to the provisions under Section 136 of the Companies Act, 2013 the financial statements including consolidated financial statements along with relevant documents and separate Audited Accounts of the subsidiary companies are available at the Company’s website.

ACKNOWLEDGEMENT:

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

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