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Chairman's Speech

Dear Shareholders,


Good Morning,


It gives me immense pleasure to welcome you all at the Annual General Meeting of your Company.

PERFORMANCE HIGHLIGHT FOR THE YEAR 2017-18:.


Moving ahead, I feel delighted to share with you the performance of your Company for the financial year 2017-18. The year has been encouraging as 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 as one of the preferred suppliers of Newsprint in India being world class quality manufacturer of Newsprint.


Your company is open for further acquisition in the field of high end packaging Board.


The country is passing through a challenging but interesting phase of economy. While the governance and transparency are improving, ways of working are being changed which is temporarily adding stress for unlocking future growth potential. During the year, domestic market was significantly impacted by demonetization, GST implementation, lower industrial growth and marked with many disruptions.


Your Company has achieved remarkable performance with all-round growth of Multi-layer Coated Board plant and recorded 1,63,313 MT of Board production. This was clocked through focus on product quality, process innovation, improved manufacturing efficiencies and enhanced service level with better logistic arrangements. The packaging board plant capacity increased from 1,32,000 TPA to 1,80,000 TPA during the year and will be further augmented to 2,00,000 TPA during 2018-19 by adding balancing equipment.


The Indian Newsprint industry witnessed yet another year of challenges due to lower growth in GDP, higher volume of imports at cheap rates (dumping), decrease in the number of pages per newspaper, cascading impact on availability of used newspaper and rising prices of raw material and coal.


However, Newsprint industry scenario has improved since beginning of 2018 with increase in prices of Newsprint by about 25%-30% and increase in demand of quality Newsprint from domestic manufacturers. Demand of Newsprint has grown at a CAGR of 4% during last 5 years to 2.6 Million tonnes in 2017-18. With 1,50,000 TPA Newsprint capacity and focus on operational excellence and quality, your Company is well placed.


As a part of the growth plan, your Company has embarked on a new Greenfield project at Bharuch, Gujarat for manufacturing of 2,00,000 MT per annum Consumer Packaging Board by way of installing a stateof-the-art Board Machine, Co-generation Power Plant and other auxiliaries.


With the implementation of the Gujarat project, the overall packaging board, Newsprint and paper production capacity of three units of your Company will be increased to 5,50,000 MT per annum and creating new infrastructure for adding more capacities to cater increasing demand of domestic and export market.


Company diversification into paperboard segment is now most discussed success story in the paper industry because of the tremendous performance of its board machine. Its paperboard has also a good reputation in export market and about 10%-15% of its recycle grade paperboard is exported to overseas market.


During the year, various measures were undertaken by your Company to enhance product efficiency and reduce costs. This was achieved through focus on product quality, process innovation, improved manufacturing efficiencies and enhanced service delivery level with better logistic arrangements. Your Directors believe that these initiatives will be beneficial for the Company in the long run.


Your Directors are pleased to recommend dividend of 60% (Rs.1.20 per share) on Equity shares to Rs.2.00 each and 8% p.a. dividend on Preference shares of Rs. 100.00 each for the financial year ended 31st March, 2018 in view of the remarkable performance of the Company.


Overall, the performance has been satisfactory despite economic and industry challenges. With the implementation of GST and regularization of formal economy coupled with initiatives taken by the government to improve infrastructure, agriculture and industry across all segments, significant industrial growth is expected in times to come. Your company is attractively positioned to take benefit of this growing opportunity and therefore looks to the future with optimism and confidence.


Your company’s approach towards environmental protection is guided by its Environmental Policy, commitment towards a sustainable planet and a clean environment as well as a healthy workplace for employees. It is a matter of great pride that Company’s endeavor and commitment to achieve higher level of operational performance and environmental excellence has been recognized at various forums. During the year under review, your Company won various awards and honors for Safety, Environment protection, serving the community as good corporate citizen and for the outstanding contribution in the field of large scale industry sector.


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.


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.


The Company’s philosophy is to achieve long term value to serve the best interest of all stakeholders - shareholders, customers, employees, Government and the society at large.


I appreciate the confidence and faith reposed by the shareholders in the Board and the Management team which has, in my view, geared up to take on more challenges. I can say with confidence the Company will improve its performance further in the coming years. This is however only possible through tireless efforts; dedication and commitment of our team who have helped us reach where we are now and look forward to their continued commitment in the journey forward.


Thank you,


ADITYA VARDHAN AGARWAL,
EXECUTIVE CHAIRMAN

Date: 10th August, 2018