Directors’ Report

The Directors take pleasure in presenting their Thirty Sixth Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2018.

FINANCIAL SUMMARY

PERFORMANCE HIGHLIGHT

Your Company registered another commendable performance with impressive top line growth despite a challenging economy. Your Company delivered record earnings during the year and achieved its highest ever revenue of RS,1366.37 crores as compared to RS,1185.08 crores in 2016-17 registering a growth of 15.3%. Earnings Before Interest and Tax (EBIDTA) increased by 13% to RS,171.87 crores as against RS,152.10 crores in 2016-17. During the year under review, the combined production from Packaging Board, Newsprint and Writing & Printing paper stood at 2,90,778 MT and the capacity utilization stood at 100%. The Company is continuously focusing on improving operating efficiencies and minimizing cost for better financial performance.

Your Company has gained leadership position in the high end packaging board segment and continued to enjoy dominant position being one of the preferred suppliers of Newsprint in India being world class quality manufacturer of Newsprint.

- Minimizing waste and maximizing recycling/ reuse.

- Creating Human Awareness in Environment, Safety and Health.

- Promoting comprehensive programs for continual improvement of Environmental performance.

- Reduce specific energy consumption and associated greenhouse gas emission.

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

- ISO 9001:2015 - Quality Management System

- ISO 14001:2015 - Environment Management System

- OHSAS 18001:2007 - Occupational Health & Safety Management System.

- Practicing TPM with an objective to achieve zero defect, zero breakdown, zero pollution, and zero loss.

At Emami Paper, there has been substantial development in energy conservation by installing energy efficient equipment. Key environmental control equipment, 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)

- Online monitoring system for final discharge water at ETP

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of section 125 of the Companies Act, 2013, the unclaimed or unpaid Dividend is due for remittance to the Investor Education and Protection Fund established by the Central Government in accordance with the schedule given below:-

- State-of-the-art effluent treatment plant (ETP)-Augmented further to meet the stringent standards being proposed by CPCB. Additional features include: Equalization tank, Flash tank and Flocculation tank before primary clarifier, Up flow Anaerobic Sludge Blanket Reactor(UASBR) before aerobic system, Online DO monitoring device in the aeration basin,Bio-gas scrubber with flaring unit and Multi Grade Filter(MGF)

- Use of ETP final water for agricultural and plantation purpose

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

- Decanter for secondary sludge dewatering

- Rainwater harvesting through 17 Nos of recharge well

- Air pollution control through ESP, Ash conveying system pneumatically through close pipe line, Dust Suppression System, Water Sprinkling System

- 100% fly ash is used for fly ash bricks manufacturing.

- Green belt development

These systems and assets have enabled the Company to safeguard the environment by meeting all statutory norms. As a measure of sustainable growth policy of the Company, it continuously gears up its resources to provide better protection to environment and natural resource conservation.

SHARE CAPITAL

The company has neither issued shares with differential voting rights nor granted stock options or sweat equity.

DETAILS 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 section 73 of the Companies Act, 2013 during the year under review.

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

The information pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 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 attached 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 implementation of Corporate Social Responsibility as also required under Section 135 of the Companies Act, 2013.

Further, the information pursuant to Section 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 initiatives during the year under review.

GROWTH WITH SOCIAL RESPONSIBILITY:

Emami Paper Mills Limited through its CSR activities takes up programs that benefit the communities in & around its place of work and ensure over a period of time, enhancement in the quality of life & economic well being of the local people and thereby establishing its presence as a good corporate citizen.

EPML is committed to help the inhabitants of the surrounding villages by taking part in drinking water supply schemes, laying and improving roads, culverts, providing lighting facilities, development of parks, supply of equipment and instruments to Fair Price Shops, improving infrastructure facilities in Government Schools, conducting medical camps, providing financial assistance to needy people, contributing for cultural programmes, sports activities, construction / renovation works in the place of worship etc. This has paved the way for establishing a harmonious relationship with the surrounding neighborhood.

EPML undertakes Community Development activities by categorizing the needs of the community under various heads, viz., Infrastructure and basic amenities, providing drinking water supply, education, medical camps and environment, promotion of Oriya literature, Art & Culture, assistance for the differently - abled, training of unemployed youth, Organizing sports and talent competitions 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 protection of the environment around its area of operation. The company has taken its social responsibility as a part of its operating policy and gearing its social activities to promote inclusive and sustained growth.

AWARDS & RECOGNITION:

Our commitment towards Safety & Environment, Quality & Operational Excellence and HR practices continue to garner appreciation from various industry chambers and social bodies. Some of the accolades and awards received during the year are as follows:

1. Corporate Excellence, Best Paper Industry 2017 by Odisha Cultural Foundation for excellent performance with outstanding contribution and dedication to the society.

2. CII, Eastern Region conferred with 2nd Runner up Award in the large scale category of Energy Conservation.

3. State Safety Award for Best performance in Safety, Health & Environment and Best Environment Management.

4. Accolade of Appreciation by Ishani, Balasore in Baisskhi Mahotsav for infrastructure development and employment generation.

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 prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timey preparation of reliable financial information. The Audit Committee evaluates the internal financial control system periodically.

AUDITORS AND AUDITORS REPORT

1. STATUTORY AUDITORS

As per section 139 and other applicable provisions of the Companies Act, 2013 the Company has appointed M/s. Agrawal Subodh & Co. Chartered Accountants (Registration No. 319260E) as the Statutory Auditors of the Company, for a period of five years till the conclusion of 40th Annual General Meeting (AGM) of the Company, subject to ratification by the shareholders in every AGM of the Company on the remuneration and other terms and conditions 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 Agrawal Subodh & Co., Chartered Accountants for both the units will continue their office till the conclusion of ensuing 40th Annual General Meeting 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 2017-18 for both the units at Balasore and Kolkata under section 148 of the Companies Act, 2013, at the Board Meeting held on 16th May, 2017 to audit cost accounting records as may be applicable to the Company for the financial year 2017-18 and their remuneration was approved at the last Annual General Meeting.

In terms of Section 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 2018-19 as required under the Companies Act, 2013, the remuneration payable to Cost Auditor is required to be placed before the members in General Meeting for their ratification. As such, a resolution seeking members' ratification for the remuneration payable to them is included in the Notice convening the Annual General Meeting.

3. SECRETARIAL AUDIT

Pursuant to the provisions of section 204(1) of the Companies Act, 2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed M/s MKB & Associates, Company Secretary in practice for the financial year 2017-18 to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure IV.

AUDITORS’ REPORT/ SECRETARIAL AUDIT REPORT

The observations made in the Auditors' Report read together with relevant notes thereon are self-explanatory and hence do not call for any further explanations or comments by the Board under Section 134 of the Companies Act, 2013.

DISCLOSURE ON COMPLIANCES OF APPLICABLE SECRETARIAL STANDARD

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively. The above statement is intended to align the disclosure requirement with the provisions of section 134(5) (f) of the Act, which requires the directors to state in the Directors' Responsibility statement that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

1) The company has not given Inter Corporate loan to any Body corporates covered under the provisions of section 186 of the Companies Act, 2013 during year ended 31st March, 2018

2) The loan and advances given to employees are covered under the remuneration policy of the Company. Hence section 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 PARTIES

All related party transactions 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 transactions made by the Company with promoters, Key managerial personnel or other designated persons which may have potential conflict with interest of the Company at large.

Necessary disclosure regarding transactions with related parties has been made in the Notes to the Audited Accounts.

The related party transactions policy has been given on the website of the Company under the head Investors-Corporate Governance.

Web link: http://www.emamipaper.in/compliances. php

COMPOSITION OF AUDIT COMMITTEE

The composition of Audit Committee of the Company is mentioned in the Corporate Governance Report attached to this report.

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM

As per requirement of section 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 Committee and approved by the Board of Directors in their meeting held on 21st January, 2014.

The Company's Whistleblower Policy encourages Directors and employees to bring to the Company's attention, instances of unethical behavior, actual or suspected incidents of fraud or violation of the Code of Conduct that could adversely impact the Company's operations, business performance and / or reputation. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and takes appropriate action 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 victimized or harassed for bringing such incidents to the attention of the Company.

The practice of the Whistleblower Policy is overseen by the Audit Committee of the Board and no employee has been denied access to the Committee. The Whistleblower Policy is available on the Company's corporate website www.emamipaper.in

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY

Pursuant to section 134(3)(n) of the Companies Act, 2013 and relevant regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted Risk Management policy for identification and implementation of Risk Mitigation Plan which is reviewed by the Management, Audit Committee 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 PERSONNEL

A) Directors retirement by rotation and their reappointment

Shri Manish Goenka, Whole Time Director and Shri P. S. Patwari, Executive Director & CEO, would retire by rotation and, being eligible, offer themselves for re-appointment as recommended by Nomination and Remuneration Committee. Further, Shri A.V.Agarwal was re-appointed as Executive Chairman by the Board of Directors as recommended by Nomination and Remuneration Committee for a further period of three years (approx.) from 8th November, 2018 to 31st March, 2021, subject to the approval of the Members at the ensuing Annual General Meeting of the Company.

Shri Manish Goenka has expressed his inability to act as Whole-Time Director with effect from 14th May, 2018, but agreeable to continue as Non Executive Director of the Company.

Shri Ashish De was appointed as a Whole Time Director of the Company with effect from 13th April, 2018 for a period of 3 years (approx.) from 13th April, 2018 to 31st March, 2021 as recommended by Nomination and Remuneration Committee and also as an Additional Director as recommended by Nomination and Remuneration Committee under Section 161 of the Companies Act, 2013 to hold office till the conclusion of the ensuing Annual General Meeting of the Company.

B) Declaration by an Independent director(s) and their re-appointment, if any

All Independent Directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and relevant regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended from time to time).

Further, as per the provisions of Section 149 of the Companies Act, 2013, and as recommended by the Nomination and Remuneration Committee, the Board further recommends for the reappointment of all the Independent Directors of the Company namely - Shri J. Godbole, Shri

S. Balasubramanian, Shri H.M. Marda, Shri J. K. Khetawat, Shri U. G. Bhat whose present terms of appointment will expire on 31st March, 2019 for another term of consecutive 5 years, not liable to retire by rotation, commencing from 1st April, 2019 and seek approval by the members of the Company in the ensuing Annual General Meeting. Notices under Section 160 of the Companies Act, 2013 was received by the Company from members signifying their intention to propose the aforesaid directors as candidate for the Office of Directors.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

Pursuant to section 178 of the Companies Act, 2013, the Board of the directors of the Company has approved the revised Nomination and Remuneration policy as recommended by the Nomination and Remuneration Committee in their meeting held on 27th January, 2015.

The Performance Evaluation Policy was revised as per the Guidance Note on Board Evaluation as issued by the Securities 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 Meeting held on 31st January, 2017.

The Performance Evaluation Policy was further revised as per the amendment of Section 178(2) of the Companies Act, 2013, which was approved by the Board of Directors at their meeting held on 13th February, 2018.

The policy is disclosed in the Corporate Governance Report.

ANNUAL EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of section 134(3)(p) of the Companies Act, 2013 and relevant regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended from time to time), the Board has carried out the annual performance evaluation of its own performance, its committees and individual directors on 2nd May, 2018, on the basis of agreed norms for evaluation.

Further, the independent directors have evaluated the performance of non-independent directors at a separate meeting held on 13th February, 2018.

The manner in which the evaluation carried out has been explained in the Corporate Governance Report.

MEETINGS OF THE BOARD AND COMMITTEE THEREOF

The details have been covered in the Corporate Governance Report.

MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of managerial personnel and employees of the Company is attached herewith in Annexure V.

RECEIPT OF COMMISSION BY THE DIRECTOR FROM HOLDING OR SUBSIDIARY COMPANY UNDER SECTION 197(14)

Not Applicable

CORPORATE GOVERNANCE

The Corporate Governance Report and Management's

Discussion & Analysis Report are set out as

Annexure VI in this Report.

DIRECTORS’ RESPONSIBILITY STATEMENT

In terms of section 134(5) of the Companies Act,

2013 the Directors would like to state that:-

1. In the preparation of annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

2. The Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. The 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 operating effectively; 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 operating effectively;

MISCELLANEOUS

1. Industrial Relations: During the year under review, the Company enjoyed cordial relationship with the workers and employees at all levels.

2. Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future:

No such orders passed during the year under review.

ACKNOWLEDGEMENT

The Board acknowledges the understanding and support shown by its lending financial institutions, banks, distributors, customers, suppliers, employees and other business associates. Your Company operated efficiently due to a culture of professionalism, integrity and continuous improvement leading to sustainable and profitable growth.

For and on behalf of the Board of Directors

A. V. AGARWAL

Place: Kolkata Executive Chairman

Date: 02nd May, 2018 DIN : 00149717