Seshasayee Paper & Boards Ltd. — Call Transcript 2022

Jul 25, 2022

Regd Office & Works : Pallipalayam, Namakkal District, Erode - 638 007, Tamilnadu, India, Ph : 91 - 4288 - 240221 to 240228 Fax: 91 - 4288 - 240229 email : edoff@spbltd.com Web : www.spbltd.com CIN : L21012TZ1960PLC000364

Ref: SH/ S-6/ 382 202207 25

National Stock Exchange of India Limited Exchange Plaza, 5 th Floor Plot No C/1, G Block Bandra - Kurla Complex, Bandra (E) Mumbai 400 051

BSE Limited Floor 25 P J Towers Dalal Street Mumbai 400 001

Stock Code: SESHAPAPER

Stock Code : 502450

Dear Sir,

Sub: Transcript of 62nd Annual General Meeting of Seshasayee Paper and Boards Limited

Please find enclosed the transcript of the 62nd Annual General Meeting of the Company held on Saturday, July 23, 2022 at 11:00 AM, through Video Conference (VC).

You may kindly take the same on record.

Thanking you,

Yours faithfully For Seshasayee i?aperand Boards Limited

< } C2- -aRINIV S)

00\nd Secretary

Encl: as above

Transcript of the

62 nd Annual General Meeting of the Company

held on July 23, 2022 at 11:00 AM

AGM – JULY 2022 - TRANSCRIPT

1 Welcome Address – Sri N Gopalaratnam, Chairman

Dear Shareholders

Good morning to all of you. I hope the shareholders are able to hear us and the audio and video are clear. I am N. Gopalaratnam, Chairman of Seshasayee Paper and Boards Limited and by virtue of the Articles of the Association of the Company, I am therefore the Chairman for this meeting. I have joined this AGM from our Corporate Office in Erode, Tamil Nadu.

I hope all of you and your family are in good health and keeping safe. I extend a very warm welcome to all of you for this 62nd Annual General Meeting of the Company.

We had originally planned to have this AGM as a Hybrid Meeting, wherein we will have the opportunity to meet our Shareholders in person and also reach out to shareholders from far off geographical locations. However the re-emergence of Covid variant, has forced the company to Video Conference mode. Looking forward to meeting our shareholders in person in the next year's AGM.

Before we get in to the proceedings of this AGM, I, on behalf of all the Directors, Employees and shareholders of the Company, would like to pay homage to Sri V Pichai, who passed away on May 3, 2022. Sri V Pichai was the Deputy Managing Director & Secretary of the Company and he played a significant role in the revival, development and growth of the Company for over the past 4 decades.

2 Introduction:

For safety reasons, each of us is in a different location. I am joining this AGM from the Corporate Office of the Company, at Erode. Before we start the main proceedings of the meeting, I request the other Board members, on the video conference, to introduce themselves.

Dr. S. Narayan :

I am Narayan. Independent Director of the Company. I am joining this meeting from my residence in Chennai.

Mr. A L Somayaji :

I am Somayaji. Independent Director of the Company. I am joining this meeting from my office in Raja Annamalaipuram, Chennai.

V. Sridar :

I am Sridar. Independent Director of the Company, participating from my residence in Bangalore.

Dr. Nanditha Krishna :

I am Dr. Nanditha Krishna. Independent Director of the Company, participating from my office in Chennai.

Mr. Mohan Verghese Chunkath :

I am Mohan Chunkath. Independent Director of the Company, participating from my residence in Chennai.

Mr. K Rajkumar, IFS, Special Secretary, Environment and Forests Department, Govt. of Tamil Nadu :

I am Rajkumar. Rotational Director of the Company, participating from my office in Secretariat, Chennai.

Mr. K S Kasi Viswanathan, Managing Director of the Company :

I am Kasi Viswanathan. Managing Director of the Company. I am participating from our Corporate Office in Erode.

Mr. Ganesh Balakrishna Bhadti, Director (Operations) :

I am Ganesh Bhadti. Director (Operations) of the Company. I am participating from our Office in Erode.

Mr. Arun Bijur, Special Invitee :

I am Arun Bijur. Special Invitee. I am participating from my residence in Bangalore.

Mr. Srinivas, CFO & Secretary :

I am Srinivas, Company Secretary. I am joining this meeting from our corporate office in Erode.

Auditors :

Mr. N.R.Suresh, Statutory Auditor

I am N.R.Suresh, Partner, Maharaj N.R.Suresh & Co LLP. I have with me Mr. N.R.Jeyadevan, signing partner. We are joining this meeting from our office in Chennai.

Mr. N. Krishnamoorthy, Statutory Auditor

I am N. Krishnamoorthy, Partner, R.Subramanian & Co LLP. I am joining this meeting from our office in Chennai.

Mr. Sanjeev Aditya, Internal Auditor

I am Sanjeev Aditya, Partner, Suri & Co. I am joining this meeting from my office in Chennai.

Chairman

There seem to be some technical issue for Mrs. Meena Ramji, Cost Auditor to record her attendance. She is attending the meeting from Coimbatore.

Mr. Shankar Subramaniam, Scrutiniser

I am Shankar Subramaniam, Practising Company Secretary. I am joining this meeting from my office in Trichy.

3 QUORUM

186 shareholders have now joined the meeting thro' video conference.

Hence, we have the requisite quorum present through video conference to conduct the proceedings of this meeting. Participation of members through video conference is being reckoned for the purpose of quorum as per the circulars issued by MCA and Section 103 of the Companies Act, 2013. The quorum being present, I call this meeting to order.

I now request Mr. Srinivas, CFO & Secretary of the Company, to provide general instructions to the members regarding participation in this meeting.

4 INSTRUCTION TO MEMBERS:

Sri S Srinivas, CFO & Secretary :

Good Morning to our Directors and to our Shareholders. Members may note that the 62nd Annual General Meeting is being held through video conference in accordance with the provisions of the Companies Act 2013 and circulars issued by the Ministry of Corporate Affairs and SEBI. Facility for joining this meeting through video conference or other audio-visual means is made available for the members on a first-come-first-served basis. The Register of Directors and Key Managerial Personnel, the Register of Contracts or Arrangements, has been made available electronically for inspection by the members during the AGM.

Members seeking to inspect such documents can send their requests to investors@spbltd.com.

As the AGM is being held through video conference, the facility for appointment of proxies by the members was not applicable and hence the proxy register for inspection is not available.

The Company has received requests from a few members to register them as speakers at the meeting. Accordingly, the floor will be open for these members to ask questions or express their views. The moderator will facilitate this session once the Chairman opens the floor for questions and answers. Members can also post their views or questions on the "Ask a question" tab on their video conference screens before 12.00 Noon IST. It may be noted that the Company reserves the right to limit the number of members asking questions depending on the availability of time at the AGM.

The Company had provided the facility to cast the votes electronically, on all resolutions set forth in the Notice. Members who have not cast their votes yet electronically and who are participating in this meeting cast their votes during the meeting through the e-voting system provided by NSDL, between 12:00 Noon and 01:00 PM.

Members are requested to refer to the Instructions provided in the notice or appearing on the video conference page, for a seamless participation through video conference. In case members face any difficulty, they may reach out on the helpline numbers of NSDL mentioned in the notice to this AGM.

Thank you Chairman.

5 VIDEO PRESENTATION:

Chairman

I thank all the members, colleagues on the Board and Auditors for joining this meeting over video conference. Before I go ahead with my address to the shareholders, for the benefit of the shareholders who have joined the AGM of the Company for the first time, I would like to play you a Short Video presentation, capturing the Genesis and the Growth Story of SPB, over more than 6 decades.

[Corporate Video to be played to all the participants.]

I hope that the Video was visible as well as audible and also hope that the video helped the Shareholders of the Company to understand and appreciate the Growth story of SPB and the continuous work done by SPB team in the areas of Efficient operations, development of New products, Greening the neighbourhood and massive tree farming.

With that, I would like to move on to the customary Chairman's address to the shareholders.

6 CHAIRMAN'S ADDRESS:

I once again extend a warm welcome to all the Shareholders, Auditors, my colleagues on the Board and other stakeholders of the Company to this 62nd Annual General Meeting.

I was keenly looking forward to the AGM being held in the hybrid mode which will facilitate warm face-to-face interaction with shareholders simultaneously providing an opportunity to reach out to shareholders, in far off destinations. This is not to be so. Reemergence of Covid-19 variant has thwarted our plans and we are forced to meet only on video conference mode.

Be that as it may, let us make the best of this opportunity.

ECONOMY

Global Economy

Global outlook: following more than two years of pandemic, spillovers from the Russian Federation's invasion of Ukraine are set to sharply hasten the deceleration of global economic activity, which is now expected to slow to 2.9 percent in 2022. The war in Ukraine is leading to high commodity prices, adding to supply disruptions, increasing food insecurity and poverty, exacerbating inflation, contributing to tighter financial conditions, magnifying financial vulnerability, and heightening policy uncertainty.

Growth in emerging market and developing economies (EMDEs) this year has been downgraded to 3.4 percent, as negative spillovers from the invasion of Ukraine more than offset any near-term boost to some commodity exporters from higher energy prices. Despite the negative shock to global activity in 2022, there is essentially no rebound projected next year: global growth is forecast to edge up only slightly to a still-subdued 3 percent in 2023, as many headwinds—in particular, high commodity prices and continued monetary tightening—are expected to persist. Moreover, the outlook is subject to various downside risks, including intensifying geopolitical tensions, growing stagflationary headwinds, rising financial instability, continuing supply strains, and worsening food insecurity.

Indian Economy

Amidst global economy's gloomy outlook, it is good comfort that our Indian economy shows great resilience and good promise. As per World Economic Outlook April '22, Indian GDP growth in FY 2023 would be the highest, notably above China. Indeed, India offers foreign investors the brightest bet till FY 2027 with its GDP growth projected to be markedly higher than every other country. The current decade doubtless belongs to India that is fast emerging as the fastest growing economy in the world with an average of 7-8% (in real terms) per annum.

India has also successfully demonstrated to the world that its management of the economy under Covid adversity is the most adroit and altruist model. While several of the advanced economies loftily advocated loosening the purse strings to bolster demand, India consciously chose the conservative and cautious path. It hence endeavoured to address the supply side bottlenecks, besides free food supply for elongated period to those in lower strata suffering under job loss. India further won world acclaim for its fast-tracking the vaccine production from indigenous technology and vast coverage of its populace under State sponsored immunisation programme.

No doubt, India has no escape from the contagion of global inflation; nonetheless, it hasn't gone out of bounds. RBI expectedly tweaked the policy rates upwards in June '22 with prime focus on taming the inflation. With normal south-west monsoon outlook and improved agricultural prospects, rural consumption would benefit from higher income. Going forward, urban consumption should improve with a rebound in contact-intensive services. Investment activity would get supported by improving capacity utilization, Government capex boost and strengthening bank credit. Accounting for the negatives, RBI has retained the real GDP growth projection for 2022-23 at 7.2% that under extant environment is creditable.

Year under Review (2021-22)

When I addressed you last year in July 2021, we were gradually coming out of Covid-19, but we still had our fears. Fear of Omicron later turned true. We, in the Paper Industry, had one more challenging year.

The year started on a positive note. Good Market conditions and demand helped the Paper Mills to announce price increases in April 2021. However this did not last long, due to the onset of Covid 2nd wave from May 2021 and the consequent closure of Schools and educational institutions. In May'21, paper mills withdrew the price increases announced in April'21.

Market conditions showed signs of improvement from August 2021 as the schools and colleges were reopened. Though the market was not buoyant, the fear of price increase in the subsequent months forced the customers to buy the material in advance.

Q3 witnessed unprecedented increase in the cost of all input materials. Coal Prices, in particular, had moved up to 300% of precovid level. Q3 also witnessed sluggishness in demand, particularly for Printing and Writing Paper, owing to various uncertainties in the market and fear of Omicron.

By Q4, the market sentiments improved as the fear of Omicron started fading. The demand for Printing and Writing grades of paper started improving significantly especially from the educational sector, as the schools and colleges were reopened for conducting physical classes. This helped the Paper Mills to announce further round of price increases to pass the cost push on account of continued rise in the cost of most key input materials at least in part.

Shareholders are aware that over the last 3 years, the Company has taken a lot of strategic initiatives with focus to realign the Company's focus to emerging global and regional trends.

Some of the key initiatives are:

• 1. Increasing the product range with capabilities to manufacture single-layer and multi-layer boards.
• 1. Upgradation of key equipment to improve the quality of paper and the efficiency of operations besides augmenting production capacity
• 1. Increasing the proportion of green power, by increased usage Bio-fuel in place of Coal.

The project Mill Development Plan – III (MDP-III) at Unit:Erode has been the key driver in accomplishing most of the above said strategic initiatives.

With our vast background of experience, we could achieve the above objectives despite the intervening Covid-19 lock downs on multiple occasions.

Gradually coming out of Covid-19 lockdowns and restrictions, the Company registered some key landmarks in FY 2021-22.

Highest ever annual production and sales at 2.12 lakh tonnes and 2.20 lakh tonnes respectively. Highest ever Total Income of Rs.1372 crores and highest ever annual exports at 57010 t representing over 25% of the volumes in the year.

The Annual Report and Audited Accounts for the year under review, have been with you for some time now. I trust you would have reviewed the same by now and you are happy with the results posted by the Company, amidst a challenging social and economic background, both in India and globally.

The Company had a one-time deferred tax provision reversal of Rs.36.4 crores in FY 2020-21, due to restatement of the liability to effective tax rate of 25.17%.

Hence the comparative Profit after tax stood at Rs 103 crores in the FY 2021-22 as against Rs 100 crores in the previous year.

The Company had prepaid all its Term Loans to Banks that it availed for Project MDP-III and had surrendered the unavailed portion of the Term Loan. The Company reports NIL Debt position, both on Term Loan and Working Capital Borrowings, as on March 31, 2022.

The strong Cash Flows and the Balance Sheet of the Company has allowed the Board of Directors to recommend a Dividend of 125% on face value, to maintain almost the same Dividend Payout Ratio as the previous year.

Mr. Kasi Viswanathan, Managing Director will make a short, slide presentation to you on the Company's performance and Key highlights during the Financial Year 2021-22, immediately after my address.

Indian Paper Industry - 2022 and beyond:

Paper consumption in India is likely to witness 6 to 7 per cent annual growth and will reach 30 million tonnes by FY 2026-27, largely driven by emphasis on education and literacy coupled with growth in organised retail trade, according to industry body IPMA. The paper Industry holds immense potential for growth in India as the per capita consumption globally is one of the lowest. Around 15 per cent of the world population lives in India but consumes only 5 per cent of the total paper produced in the world. Paper Industry in the country has undergone a transformation in the last few years. The industry has gone up the sustainability curve and has become far more technologically advanced. In the last five to seven years, an amount of over Rs 25,000 crores has been invested in new efficient capacities and induction of clean and green technologies.

Paper Industry, over the next few years, is expected to be driven by following key trends :

• 1. Anti-plastic sentiments
• 1. Higher Packaging Demand
• 1. Recyclable products
• 1. Hygiene Products and Food Packaging
• 1. Thermal Market Growth
• 1. Industry 4 initiatives
• 1. Digital Revolution
• 1. Lightweight Packaging

Pulp and paper will continue to play a major role in the world. Despite the changes that have occurred because of technological advancements, this is an industry that has thrived and will continue to do so in future. In fact, the digital revolution of recent years has led to an expansion in the pulp and paper industry. As the world continues to evolve, so will the industry.

Current Year

Now coming to the current year…

1st quarter of FY 2022-23, turned out to be positive with continued higher pent-up demand for printing and writing grade papers. Demand for Boards is expected to remain strong throughout the financial year. However, the global political situations, macroeconomic indicators and global supply Chain constraints will have a strong bearing on the healthy order inflow, both from Domestic and Global Markets.

The unaudited financial results for the 1st quarter of this FY was approved and reported to Stock Exchanges yesterday. The results briefly, are:

	Units	Q1 21-22	Q1 20-21
Production	Tonnes	60581	52299
Revenue from operations	Rs (Crores)	430.84	217.99
PBT	Rs (Crores)	80.10	25.17
PAT	Rs (Crores)	59.66	18.56

Outlook for 2nd quarter is also positive.

I am pleased to welcome Sri Ganesh Bhadti, who has been appointed by the Board as Director (Operations).

Mr.Ganesh Bhadti, is a seasoned Pulp and Paper professional with over 35 years of experience in various reputed paper companies of India. He had joined SPB as Vice President (Technical) 5 years ago and brings to bear considerable expertise in Pulp & paper manufacture including development of new products.

His appointment is before the Shareholders for approval at this meeting and has been tabled as Item 4 of the resolutions.

Directorate

During the FY 2021-22, Tamilnadu Industrial Investment Corporation (TIIC) withdrew the nomination of Mrs. Sigy Thomas Vaidhyan, IAS and in her place nominated Sri Hans Raj Verma, IAS (Chairman and Managing Director, TIIC) as its Nominee Director on the Board of our Company. Sri Hans Raj Verma, IAS, was appointed as an Additional Director on the Board of the Company on June 15, 2021. He was later appointed by the Shareholders of the Company in the AGM held on July 24, 2021, as Nominee Director not liable to retire by rotation.

Also, during the year, Tamilnadu Government withdrew the nomination of Dr. Shekhar Kumar Niraj, IFS and in his place nominated Sri K Rajkumar, IFS, the Special Secretary to Government, Environment and Forests Department, as its Nominee Director on the Board of our Company.

Your Directors place on record the valuable services rendered by Mrs. Sigy Thomas Vaidhyan, IAS and Dr. Shekhar Kumar Niraj, IFS during their tenure as Directors of the Company.

Auditors :

M/s Maharaj N R Suresh & Co LLP, and M/s R Subramanian and Company LLP, Chartered Accountants were the joint Statutory Auditors of the Company for FY 2021-22. The term of appointment of M/s R.Subramanian & Co LLP is ending today and the Board of Directors has approved continuation of M/s Maharaj N R Suresh & Co LLP as the sole statutory auditor of the Company for FY 2022- 23. A proposal in this regard has been placed as Subject No . 5 of this AGM Notice.

Acknowledgement :

My whole-hearted thanks are due to all the Shareholders for their sustained support to the Company. Shareholders strength has now swelled to 19,000 +.

I am extremely grateful to my colleagues on the Board for their guidance, support and wise counsel which helped us to steer the Company safely during challenging times.

Executives and employees of all ranks of the Company have put in creditable performance which enabled the Company to turn-out impressive performance. My thanks are due to them.

My special word of thanks to the supporting Lift Irrigation Scheme farmers and the participating farmers in our Tree Farming program.

I am grateful to all our Shareholders, Customers, Indentors, Stockists, Overseas Agents, Suppliers and Service Providers for their whole-hearted support and co-operation.

My thanks are equally due to various departments of Central and State Governments and Banks.

Thank you Ladies and Gentlemen for your patient hearing.

*********

7 MD'S PRESENTATION:

I now request Mr.Kasi Viswanathan, Managing Director to make a short slide presentation on the performance review of the year 2021-22.

Sri K S Kasi Viswanathan, Managing Director.

Thank you Chairman and good afternoon to all the shareholders. I will now take you thro' key highlights of our performance in in FY 2021-22.

The power point presentation made by Managing Director is enclosed as Annexure – 1 to this transcript.

8 AUDITORS REPORTS

Chairman

I now request Mr. Srinivas, CFO & Secretary of the Company, to provide a summary of the Auditors' Report.

Mr. S.Srinivas, CFO & Secretary :

The Statutory Auditors' report on standalone financial statements and consolidated financial statements are available in Page numbers 121 and 197 of the annual report, respectively. Secretarial Auditor report is enclosed as Annexure 8 to the Board's report on Page number 114 of the annual report.

The Statutory Auditors, Maharaj N.R.Suresh & Co LLP and R.Subramanian & Company LLP and the Secretarial Auditor, B.K.Sundaram and Associates, have expressed unqualified opinion in their respective audit reports for the financial year 2021-2022. There were no qualifications, observations or adverse comments on financial statements and matters.

Thank you.

9 Resolution:

Chairman

As the Notice is already circulated to all the members, I take the Notice convening the meeting as read.

Before we proceed, I am pleased to bring to your notice that, as required under the Companies Act, 2013, the Company had provided you all the facility to cast your vote electronically, on all Resolutions set forth in the Notice. The period for 'Remote E-voting' has concluded by 5:00 PM yesterday.

Members who have not cast their vote electronically and who are participating in this meeting will have an opportunity to cast their votes through the e-voting system provided by NSDL. Members may please note that there will be no voting by show of hands.

We now take up the 7 Resolutions as set forth in the Notice. We will open the floor for any questions by members after all the Resolutions are tabled.

Item No. 1 of the Notice – Adoption of Financial Statements.

The Financial Statements of the Company including the consolidated financial statements for the financial year ended March 31, 2022 including the reports of Board of Directors and Auditors have already been provided to the members.

Item No. 2 of the Notice - Declaration of Dividend.

The Board of Directors has recommended payment of Dividend of Rs. 2.50 per Equity Share of face value of Rs. 2 each, for the financial year 2021-22.

Item No. 3 of the Notice – Re-appointment of Sri N Gopalaratnam, director retiring by rotation in this meeting, as Director, by a Special Resolution

Item No. 4 of the Notice – Appointment of Sri Ganesh Balakrishna Bhadti as Director (Operations), liable to retire by rotation.

Mr. Ganesh Balakrishna Bhadti is an accomplished Pulp and Paper Industry Professional with over 35 years of industry experience. He has wide experience in Pulp and Paper Industry serving top companies. He joined SPB in November 2016 as Vice President (Technical) and has been responsible for operations, safety and training of manpower. The Board of Directors, in their meeting held on June 13, 2022, had appointed Mr. Ganesh Bhadti as an Additional Director. His tenure as an Additional Director expires in this meeting and the approval of the shareholders of the company is being sought for his appointment as a wholetime director for a period of 3 years from today, designated as Director (Operations) and liable to retire by rotation.

Item No. 5 of the Notice – Continuation of M/s Maharaj N.R.Suresh & Co LLP as the Sole Statutory Auditor of the Company for FY 2022-23.

Item No. 6 of the Notice – Remuneration to Cost Auditor for FY 2022-23.

Item No. 7 of the Notice – Approval of the request received from Mrs.P.Suganthi, wife of late Sri V Pichai and registered nominee for the shares held by him, for reclassification of 42695 Equity Shares held by her husband from "Promoter Category" to "Non-Promoter Category."

The text of the Resolutions along with explanatory statement is provided in the Notice circulated to the members.

Members who have not cast their vote thro' "Remote E-voting", may cast their votes now through the e-voting system provided by NSDL. The platform is already open to the shareholders to cast their vote.

We have received requests from 8 shareholders to be "Speaker Shareholders". I will now call out their names one-by-one. The Speaker shareholders are requested to restrict their queries to the accounts for the FY 2021-22 and confine their observations / comments to preferably about 5 minutes. I need your co-operation.

Before we go live with the Q&A, here are some points to note for your convenience. Kindly turn on your video when you are projected on the broadcast screen, kindly unmute yourself, and proceed to ask the question. Please mention your name, Folio Number, and the location from where you are joining.

10 Queries & Answers

Chairman

Now, I am opening the floor for Q&A.

• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Now I request Mr. Kirti Shah, speaker shareholder no. 1 to unmute himself and kindly proceed with his question. Mr. Shah, how are you?

Mr. Kirti Shah – Shareholder:

Fine sir. Good morning. It's afternoon now. Your presentation was very good. Your company too is very good. Why don't you want to create its valuation? The valuation should be solid. Your company is selling goods worth Rs. 100 for Rs. 100 itself. Price to book value is the same, more of less. This should be atleast 5 times the book value.

Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:

Sir, the valuation is in your hands.

Mr. Kirti Shah – Shareholder:

Mr. Chairman, why don't you want to increase your promotor holding of such a good company which is asset rich and cash rich? As per you investment on pg. 206, you have cash of 116 crores, cash equivalent, and you have 214 crores in bank and other balance. You have such a huge balance, but the capital is only 12 crores. Inspite of having such a huge balance, you're not using it properly and not using it to promote the image of the company. The company's image should be showcased. You should take all the distressed assets from the market and increase our assets. Our land investment/investment in property is very less at Rs. 1 crore when your property plant and equipment is 800 crores. So please ensure the money is used well. Last year you invested 23 crores, and this year it shows as 42 crores in High Energy. What is the reason for that and what is our association, please enlighten us. There are many good investment opportunities in the market, so please think about investing in other companies too. We have huge cash balance, so we have to invest in such a manner. Other Income and Extraordinary Income is also very very good, so you have to see on those grounds too. Mr. Chairman, you have given a dividend of 125% and earlier you used to give 200% dividend. In such COVID times and with such a huge cash balance, you have to give higher dividend to the shareholders. The promoter can take less dividend and distribute higher dividend to the public; there's a new SEBI clause/permission to that effect. What do you think about this? Mr. Chairman, on 117 crores of investment, how much returns are we getting every year? What is our Return on Investment, please tell us. Mr. Chairman, when we will get the results of our expand, how will the next 2 years be, what will the capacity utilisation be, please let us know. I have sent you an email, please reply to that. I would like to thank your Secretarial team for their follow up and good service to the shareholders. I request you to reply to my email. Your 1st and last page of the Annual Report are blank. I'd suggest you put up photographs there of the plant or products or our exporting countries, that would be good. Wish you all the best, thank you very much.

Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:

Thank you Mr. Shah, I think you've asked some 100 questions in 5 minutes. I will answer them all, but just to give you some idea, I think last year our production was better, our sales was better, that's why our profits were better. I have given you details of our CSR spend on pg. 107 to 111 of our Annual Report. Our EPS as on 31st March is 17.12 per share, and our book value is about Rs. 200. Our PE ratio stood at 10.2 times. In domestic institutional investors, about whom you're worried, is nothing but our Tamil Nadu Investment Corporation Ltd. This has a company which has really helped us to set up this project originally 60 years ago, and they have remained one of the major shareholders in the last 60 years, and they will continue to do so as long as we do well. So, have no worry about them. I think, the details of the directors and KMP I have given on pg. 1. I think, originally we availed around 11.2 crores out of the sanctioned 82.5 crores for the project MDP III. But then half way through, we decided that we will fund it with our own funds. Therefore, we have returned this 11.2 crores also. As of 31st March therefore I think we are debt-free both for long term as well as working capital. We continue to be debt free for some time. And HEB (High Energy Batteries) you mentioned, this is an associate company. You can also consider that company for investment. It's a very small, specialised company for making batteries for defence services, and I think hardly it's 10 lakh… Rs. 10 share today is selling for more than Rs. 2,000 or so. It's such an invaluable company! It's a great R&D company for the Government of India. It has won the R&D ward at the national level two times.

Mr. Kirti Shah – Shareholder:

Very good sir.

Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:

Okay? On the benefit of expansion for MDP III, I have already told you, our production will go up, our production of pulp will go up. I think, you will see some of these benefits in this year itself, okay… Thank you Mr. Shah. I hope I've answered all…

Mr. Kirti Shah – Shareholder:

• When I visit Chennai, I will take an appointment and visit you'll. I've already written to kindly give me appointment also.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• I am most of the times here.

• Mr. Kirti Shah – Shareholder:

• I am from Mumbai.

• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Mumbai is not very far off. You take a flight to Coimbatore, we will come and pick you.
• Mr. Kirti Shah – Shareholder:
• I will come, there is no issue.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Just come to Coimbatore. From there our plant is only 1.5 hours away.
• Mr. Kirti Shah – Shareholder:
• Okay sir.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Thank you. I think I will move on to speaker shareholder no. 2, Mr. Santosh Kumar Saraf from Kolkata. Mr. Saraf, are you there on the line? Oh, good morning. Are you better now, Saraf?
• Mr. Santosh Kumar Saraf – Shareholder:
• Now I'm feeling better and in a good position. Your wishes helped me recover at the earliest.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Mr. Saraf, you were supposed to help your wife. She was unwell.
• Mr. Santosh Kumar Saraf – Shareholder:
• Tomorrow my son will come from Bangalore to attend to her, because on Monday or Tuesday I took her to the hospital to remove an instrument which was fitted on her left shoulder. They have fitted that on one side because it doesn't hold properly and always slips. So, I hope that on Monday-Tuesday we'll admit her and the doctor will remove the instrument.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• All our good wishes.
• Mr. Santosh Kumar Saraf – Shareholder:
• Sir, your good wishes are always with us. And, I always try to attend your meetings under any circumstance. This year you called your meetings earlier, last year it was in August. You asked me how many meetings do I attend? This is my 126th meeting this year. Last year I totally attended 390 meetings.

• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Okay good.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• 390 meetings!
• Mr. Santosh Kumar Saraf – Shareholder:
• Yes sir. First, I would like to thank you for your nice quarterly results. I am thankful to you and your team for presenting such nice quarterly results. Since my English is weak, I want to speak in Hindi, but one day you mentioned that you prefer English.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• No, your English is good, please continue in English.

Mr. Santosh Kumar Saraf – Shareholder:

I thank you, your team and all the employees for nice quarterly results and 225% growth is nice. Sir, your presentation was very nice. But sir, one thing, in the last 3 years, the margin of profit is down by 7%, what is the reason for that? It has been falling for the last 3 consecutive years. Sir, I also request you to kindly increase the number of female employees. Out of 1307 you have only 22 female employees across the country. I want the females to be empowered because they work very well. Even the Indian President is now a female, so is our Finance Minister and many females win gold medal for India. Also, there's very nice work done by Indian women in the world. I hope you will help them to showcase their abilities sir. Sir, thank you for the 125% dividend, it's very nice. Rs. 216 is a good price. It's the highest price in 52 weeks, and is an alltime high price. The shares are split in five, therefore when I calculated, it is more than 1,000 of a Rs. 10 share. Sir, there are so many disputed cases pending since 2000 for customs duty, etc. I request you to clean the book and settle out of court, if possible. When we read 'disputed', it doesn't look good under your leadership sir. Sir, in one place you mentioned unpaid dividends. Sir, this word is to be replaced by 'unclaimed, because you paid the dividend, I have not claimed it. So, it's unclaimed. It means the company was able to pay the dividend.

Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:

Yeah, thank you.

Mr. Santosh Kumar Saraf – Shareholder:

Next time please correct this. Last year Other Expenses increased due to fuel charges. I ask you to please control this in the current year. Sir, your exports are very good, for which you have received many awards. I thank you, you staff, workers and team for their hard work that we received so many awards which has increased our company standing in the market. I will take another 2-3 minutes because this could be my last meeting with you. If the government permits VC, then I might meet you next year too, otherwise, this is my last meeting with you. It's not possible to go to Coimbatore and other places to attend a meeting when you're in Kolkata. Sir, I want to know whether all our employees are covered under health insurance, accident insurance, maternity benefits, paternity benefits and day care? Are they all covered or not? If not, please provide this facility to them. You've also stopped single-use plastic, I thank you for this decision. Sir, also rainwater harvesting is 70%, so I thank you and your team for that. Sir last but one, next year if there's a physical meeting, it's not possible to go to Coimbatore to attend the meeting. So, I'd request you to change your meeting system to a dual system. Hold a physical meeting and also a video conference meeting at the same time. Mr. Kirti can attend from Mumbai, I can attend from Kolkata and some people can attend from Chennai. So, if possible if you try. There's no government ban on this. Sir, lastly, I sent a letter to your sister concern High Energy. They have not sent any dividend last year to any of my accounts; I have 7-8 accounts. This is not related to this company, but is related to your leadership. They say that it was sent, but they're not able to show when this was credited in my account. As per rules, if dividend lies unclaimed, my share goes to IPF. So this is my tension. The Income Tax department shows that I've received dividend from High Energy, but it's not credited in my account. Sir, please instruct your High Energy department to check when it's credited in my account and all details regarding it. I wish you and your family and all directly all the best, and hope you will consider a video cum physical meeting for the current year. If not possible, then hopefully, I'll try to visit Coimbatore to meet you physically when I go to Bangalore. Manisundaram from Selam is my friend and also Abhishek from Chennai is my friend.

Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:

• Oh, good.
• Mr. Santosh Kumar Saraf – Shareholder:
• I know them very well. We all are good friends sir. Thank you sir and your wishes for my health. I wish you and your family and all the directors and others good health. Thank you sir. Please excuse me for any mistake in my English.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Briefly, I would say that, that we are trying to employ as many female employees as possible. Because we are a continuous industry and the work during the day and night, we are not able to immediately employ a lot of females. But, I take your suggestion and will see how to improve that number. I will also try to see how to clean lot of disputes. We have contingent liabilites that we have provided. I'll have to see how to clean up and how to seek out of court settlements. I also take your point regarding unclaimed dividend, and not unpaid dividends. I think, all employees are covered under insurance, there's no doubt about it. We have insurance for all the employees. As far as the next meeting is concerned, I will try to see whether this technique is possible and I

will have it as a hybrid or dual meeting i.e. physical and I will also give an opportunity for people like you to participate also. Okay?

Mr. Santosh Kumar Saraf – Shareholder:

• Thank you sir.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• I will also talk to High Energy Batteries, okay?
• Mr. Santosh Kumar Saraf – Shareholder:
• Okay, thank you sir.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Thank you for your participation.
• Mr. Santosh Kumar Saraf – Shareholder:
• My good wishes to you sir.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Thank you. We move on to the 3rd shareholder, Mr. Pavan Nahar. Nahar, are you able to hear us?
• Mr. Pavan Nahar – Shareholder:
• Thank you Mr. Chairman, thank you Mr. MD, thank you Mr. CMO and thank you to all the gentlemen here for this event. I have 4 broad points. First, I want to congratulate you and the management team, and particularly the Finance Team. I mean, your results came yesterday. Ponni Sugars came on the 19th. So basically, within 3 weeks, you're beginning to delivery your results. And, in Mumbai and amongst investors, there is this perception, feeling and rightly so, that companies that actually care about minority shareholders, generally speaking, have a good MIS and are proactive, tend to report early. For eg. I'm sure you know that Infosys, TCS, Reliance, HDFC Bank, Dmart, all of them come in the first 3 weeks. So, I really want to thank the Finance Team and I hope you will continue to do this. Heartiest congratulations! Likewise, I'd also like to congratulate the Project Management team for the timely completion, that too during COVID, and broadly within the budgeted cost. So really, again, hats off for that. First was just the congratulatory point. Second was, and pardon me for asking this, but, if you could share some light about the management succession plan, and how do you deal with the cross-holdings? Nothing wrong about that, but how do you deal with it? Do you plan to untangle it, do you plan to do a merger, or it just remains like this, if you could answer that. The third point -- is this profit is sustainable.. Is the spread sustainable? Or, in your opinion, what is the kind of payback you would expect from any new project going ahead. So here, in the third I'm actually asking you two points – sustainability of the current spreads, and whenever you take up a project,

generally what kind of a payback do you look at? And the fourth is, I'm sure somebody else too will ask you this, how do you see your business mix changing in a couple of years? Like, everybody would want to hear if it's going to be more packaging. So, something around those future plans as well. Thank you so much.

• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Thank you, thank you Mr. Nahar. I have taken down your points. I will get back to you once I finish with other speakers as well, and then answer your points today itself. Thank you. If you could please be on the line.
• Mr. Pavan Nahar – Shareholder:
• Thank you.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Mr. Badjatya, shareholder no. 4.
• Mr. Vaibhav Badjatia – Shareholder:
• Hi sir. Hope I'm audible?
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Yes sir, how are you?
• Mr. Vaibhav Badjatia – Shareholder:
• I'm all well sir, how are you?
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Fine sir.
• Mr. Vaibhav Badjatia – Shareholder:
• I hope you board members, senior management team all are safe. As the times continue to be tough as COVID is again increasing, I wish all of you good health. I will not take much of your time, I think I have already submitted my list of questions, which was shared with you.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Yes.
• Mr. Vaibhav Badjatia – Shareholder:
• I just wanted to make sure that you have the questions ready.

Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:

• I have the questions and to the best of my ability, I will respond today itself in this meeting.
• Mr. Vaibhav Badjatia – Shareholder:
• Sure sure, that would be great sir, if you could respond point by point. That's it from my side. I will not take much of your time.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Okay, thank you.
• Mr. Vaibhav Badjatia – Shareholder:
• Yeah, thank you.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Then we have Mr. Govindlal Hilada.
• Mr. Govindlal Hilada – Shareholder:
• Dear board members, this is the first AGM I'm attending. I'm a new shareholder to the company. Thanks for very good numbers for the 1st quarter sir. Good presentation! I have got few questions. We have got sufficient cash, almost 330 crores cash and some 100 crores investments are there, almost 400 crores, plus we are going to generate very good cash flow this year going forward also in this case. So, what is your plan sir? How will you reward the shareholders about this cash – by way of some buyback or extra dividend or some capex? What's your plan sir? That's because, we are already debt free and have so much cash. So, this is one thing. The second thing - why 5,000 tonnes inventory we have built up in Q1? There is a good demand scenario in the market in domestic and export as well. So, why are we not able to sell total 60,000? That is one thing. Third thing is, why are we not conducting concalls sir? Even small companies with 400-500 crores market cap conduct quarterly concalls… now our market cap is touching 1,400 crores. So, why we should not conduct quarterly concalls post result? That would be helpful to get clarification every quarter on the company prospects and clear any doubts if any. Otherwise, we have to wait one whole year to interact with you. As you know, the first shareholder also mentioned that the intrinsic value of our company is much more than what it is today. So, we should put efforts to increase the value of the company. So, we should bring it to actual value; it is very undervalued. And, what is our view regarding the paper scenario, demand scenario going forward about paper and pulp? Have we taken any price increase in July, that I want to understand sir. And, we hope these prices will sustain for the next 2-3 quarters, or do you see that they can fall seeing the current demand scenario? We have made an upgradation/investment in MDP III. So, in this 1st quarter has the total benefit come, or can we still hope to get some extra benefit in the 2nd quarter? Other peers of ours like J.K. Paper are utilising capacity more than 100%. In one plant we have utilised 100% and in another 90%. Seeing the demand

scenario, can we also utilise more than 100% or are there some constraints? One more important thing I wanted to understand was, how much of our raw material is captive? Is it almost 100% or are we procuring some raw material pulp or fibre from outside, or are we totally 100% captive? And what will the tax rate be for the full year sir? We can even consider a bonus since we've got good book value and reserves. So, these are my questions sir, thank you very much. All the best.

• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Thank you. You have asked some 20-25 questions in 2 minutes. I will try to answer them to the best of my ability today, okay? The next speaker is Mr. Ramasundaram. Ramasundaram, are you there on the line?
• Speaker:
• He has not come.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Okay. Then we go to Mr. Saket Kapoor.
• Mr. Saket Kapoor – Shareholder:
• Namaskar sir.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Namaskar. Where are you calling me from?
• Mr. Saket Kapoor – Shareholder:
• Sir, I'm from Kolkata.
• Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:
• Kolkata, okay.
• Mr. Saket Kapoor – Shareholder:
• Thank you for this opportunity sir, firstly. Sir, I will try not to repeat the points spoken by the earlier speakers Mr. Nahar and also the gentleman who spoke just earlier to me. They have covered almost all the operational parameters and what investors generally look for as industry and also for company specific. Sir first, the earlier speaker informed about the merit of holding regular concalls. Sir, I think this is the first time that your Chairman statement has been accompanied by the results, which we requested in the last AGM. I'm very grateful that that was considered and now has been implemented. It makes lot of sense to have the results along with your statement, the volume data and a brief about the quarter. Sir but, I also second his point, that conference call and investor presentation should be the order of the day going forward. That will create more awareness among your existing investors, and also will provide an opportunity for other analysts and the investing community to participate in the growth

story. This is one of the pioneer companies, and the way you people conduct AGMs, is an example of how things can be deliberated at the management's end. So kudos to you and to the team! Please accept my condolences for Mr. V. Pichai, the man who used to answer us investors earlier. I think I interacted with him a year ago and last year at the time of the AGM he did call me up. he was not in good health for a prolonged period of time. Anyways, it's was God's wish. Coming to the points to understanding our results and all, sir, firstly, about the raw material part, if you could give us some more understanding how the integration currently works. With the Mill Development Plant III commercialised, what is our raw material security currently and how much are we dependent upon the external sources? Even sir, I think the other raw material, other than the coal, I think the chemical prices have also gone up. So, do we have any long term arrangement in terms of this caustic soda requirement? I think if I'm not wrong, it's one of the chemicals that is required for paper manufacturing – caustic soda flakes/lye, as may be the case. Sir, looking at your numbers, even for this quarter, when we compare your numbers from Quarter 4 of the last financial year with Quarter 1, even though there has been an escalation on cost front on all sides, the numbers look better. So, have the realisations gone up considerably, because the margins are higher than Quarter 4 even on a lower revenue? So, if you could explain that dynamics to us… because all the cost components, whether it is fuel, whether it is the other expenses, all has gone up, even in proportion to what the sales number were for Quarter 4. So, if you explain on the same actually, these parameters can be discussed in length when we come up in a concall; since this is the only opportunity for us to interact with you. However, our CFO has also told me that you send me the questions and I will be answering them. But, one on one interaction gives a proper platform not only for the investors to have points, but also get points from other people. See, I would have never heard Mr. Nahar, I would have never heard the earlier gentleman (I'm forgetting his name). So, we will also be getting knowledge about other people too sir. So, please look into the merit of it and try for an experiment on what kind of response you generally get. Sir, I'll just take another 2-3 minutes. When you spoke about the Chairman's part of your statement, I think the investor presentation can be uploaded in 3-4 pages, the PPT can also be uploaded in the same press release, so that the other aspects are also done away with one go. And also sir, that will suffice everything. Sir, about the inventory part, as the speaker also mentioned earlier, sir, if you could explain to me to us how the dynamics have changed, this post COVID part and also for the paper industry in particular about this import, how are our imports playing out for the sectors in which we dominate? Because, paper as a segment is also very huge. So wherever we are operating, how does the import dynamic play for us? How are the global capacities outage helping us going forward? As the earlier speaker said, how sustainable are these numbers? However, we are doing the best sir and it's very much seen in your numbers. About the succession plan, I too second the view of the speaker. We know that the management must be having something on the background. Sir, on the export part, this one was outlined by you, not only in the quarter 1 numbers, but also the MD spoke about the exports. So, what opportunities does the export now open up? And out of the total volume… I think last time it was 20% or something, correct me if I'm wrong. Where can we scale it up, depending upon the product mix also what we can actually export which is already mentioned in the presentation? So, if you could give us some graph of what are we targeting 5 years from now, export mix of the total production? How much can it be or how much are you trying to reach over a period of time? Also sir, going further, what kind of capex or value added product augmentations are we looking into, if you could give some more colour? And sir, the MD sir mentioned in the presentation about that the percentage of plastic cup sales (the cups which are covered with plastic in the outer layer) will get affected because of the plastic ban. So, what percentage of our shares are there? Is it meaningful for us in terms of the total sale number, or not? Sir, you mentioned about this High Energy price part also, High Energy shares; I think it's an associate company for Seshasayee Paper. But, post February, these stock prices have corrected by half. So sir, since we are the promoters, why has the stock corrected? Has there been any corporate benefit? Why has the stock fallen from 2,900 to 1,300? If the dynamic is pure market understanding, then as you told, there's a good opportunity for new investors. Since I'm not a shareholder, and since I got the message from the horse's mouth, you only told us that it's a good proposition to invest, I will dwell more into the story and come up with more understanding of the company. So, if you could just second us with a view that there is no change in the business dynamic for the company and it is just the market dynamics that have played, if you could explain that to us, then that could be a good opportunity for us to invest in that. Other than that, sir, this is a superb way of conducting it……

Mr. N. Gopalaratnam - Chairman, Seshasayee Paper and Boards Ltd:

Thank you. I think we lost connection, but I think he has completed his observations. Then we go to shareholder no. 8, Manisundaram. Manisundaram, are you there on the line?

Mr. Manisundaram – Shareholder:

Sir, good morning. I'm Manisundaram. Dear board of directors, Chairman, Company Secretary and my fellow shareholders, on the 62nd Annual General Body of Seshasayee Paper and Boards Ltd. First of all, I'm very happy to express my feelings, because even in COVID period, we have done production and managed the paper mill very well. You have a special capacity to extract work from labour with love and affection. First of all, on pg. 5, 10 year financial highlights at a glance. All of them are very fantastic, very good results have been printed on pg. 5. And dividends, before 10 years, in 2012-13 and this year 2021-22, 125%. This is 3 times before 10 years that you have declared. I'm very happy sir. And the total income also rose from last year by more than 500 crores. EBITDA also rose, I'm very happy sir. The EPS (Earnings per share) is 17.12. The book value also 200. But, every year you have given very good results and also given the best results in the paper industry. Also, the Whistle Blower policy is very good. The total expenditure last year 2020-21 was 801 crores, and this year it is 1,317 crores. What is the reason for the rise, please explain sir. Pg. 129, 9 dues you have with the government department's Excise, Customs and also Sales Tax Department. Can you take necessary steps to solve that dispute, otherwise the company has to pay or face a loss. Please plan a settlement with the company and Value Added Tax, Customs Duty and also. What is the future plan? Is there any expansion or is there any new plant to be installed also, do you have any plans sir?

And also you have declared in the 62nd Annual General Meeting, very happy to attend the meeting by video conference. I would like to meet you physically in the plant premises of Pallipalayam, so in future you can conduct physical AGM next year by God's grace and also with the government guidance, I will be happy to see our Managing Director. And also I want to visit the Pallipalayam Erode plant and also Tirenelvelli plant, please make arrangements I send you a request. Split up share from Rs. 2 to 1 - 2019 what is the reason? And also physical AGM expenses and what is the video conference meeting expenses? What is the market share of our products which are the main products has value of sale. Thank you sir, thanks a lot, we meet next year physically in Erode plant Seshasayee Paper & Boards Auditorium. Thank you.

Mr.N. Gopalaratnam – Chairman, Seshasayee Paper and Boards Ltd:

• Thank you, sir. With this we complete the list of shareholders who had intimated their desire to speak. Now I would like to answer formally the queries raised by our various speakers.
• Mr. Vaibhav Badjatya had sent me his questions even earlier. I want to take it up first. He has observed that company has seen sharp growth in exports. Exports are substantially higher even higher as to pre-Covid level, can you please explain the tailwinds. Actually we have always been putting our 15 to 20% of our products in the export market as a policy and as a strategy for a long time. In fact we were one the of earliest to export paper from India. Last year I think we saw a good opportunity, demand was better, realizations were also quite good when compared with our domestic market. Therefore we could do something like 25% of our production in the export market. Our export will always depend on domestic scenario, how the market is, how the realizations are when compared with our export market. But this year, I think at the moment it is a bit scaled down and frankly I think we also have a fairly good demand in the domestic market which we would like to sell. We will alter, we will enhance our exports as the year goes by depending on the demand in the local market as well as the relative realizations.
• Second question you asked is that Indonesia has a policy of providing coal to domestic industry at discounted prices. The gap between prices on the imported coal in India with the domestic coal in India in Indonesia has increased over the last 3 years. This enables Indonesian paper mills to have significantly lower cost hence we would expect paper imports to Indonesia to increase significantly. Mr. Badjatya, I think Indonesia has a significant presence in the pulp market. In Indonesia, in fact, huge plantations have been developed over a period of time and is known for some of the world class world size pulp mills in Indonesia. And they are very big and very active as exporters of pulp. At the moment they continue to be strong in their export market of pulp which is their traditional strength rather than paper. In India we do see some imports from Indonesia especially in the cut size that is the copier grades. But at the moment we are not

seeing any huge volumes of paper coming to India but we continue to see a lot of pulp coming to India and therefore at the moment their paper presence does not seem to be a big competition to us.

• No. 3 is can you please provide your estimate of capacity expansion expected in domestic P&W. Sir, pulp and paper Mills - there are two different types. One is integrated where you start from wood, you make your pulp and then you make your paper. This is most difficult, that is what we do in Erode. It is most difficult because you have to get environment clearances and we have to have wood. That means about 3-4 years prior to your paper coming out you have to ready with some plantation of wood and then be ready. But I don't see at the moment any greenfield mill in pulp and paper going along on the integrated route. The other route is what the B-Grade mills do. They buy waste paper and they make paper out of it. But I don't see any significant increase in P&W production. And also there is a view especially what we all observed during the Corona times, the lockdowns, the work-from-homes had somewhat brought down the demand for P&W paper. In fact everybody including me have worked on introducing some capacity for packaging grades only to insulate ourselves from such contingencies of demand for P&W going down. Personally I don't think printing and writing paper is going to drastically exit the Indian market because I think our dynamics is different, our population growth is different, our education needs are different, and our literacy rates are different and consumption is also very low.
• What are the capex plans in the company post MDP3… should we expect more investments in packaging grade? Capex plans are under discussion internally and it has not yet been finalized but certainly we are looking for some value addition products at Erode and some volume addition products in Tirunelveli. Certainly we will be addressing the need to step up our presence in packaging sector which will probably be addressed at the Tirunelvelli Plant. You will come to know as soon as we have made up our mind. There will be certainly capex plans, addition of capacity, addition of products adding additional values also.
• Due to the rise in global gas and coal prices, how we expect relative strength Indian paper mills in future. The fact the energy cost increases or you see European governments turning uncooperative and shutting operations…. No, sir, European mills are very strong, they are extremely strong in raw material base in terms of soft wood. And they are significantly good in the recovery rates from waste paper, meaning waste paper recovery rates are very high in Europe. These are their strengths. Over the last period of a year I think they have been reducing presence in the printing and writing market but they continue to be strong in the packaging grade. And I feel they will play a significant role in the future as well. Sure the energy costs are high, I suppose energy costs are not going to stay high at this level forever. And when energy costs are high, relatively energy costs in Asia are also going to be high and for North America is also going to be high. Considering all this Europe can hold its own in terms of its presence and its contribution to the paper industry of the world.
• What is your assessment of relative components of various raw material used in paper production as of today? Based on total variable cost for paper including

chemical cost it should be cheapest as of now out of waste paper, domestic wood, you know when you include waste paper also in this list, you are talking of pulps of different qualities….. Certainly I think as of now domestic wood, chemical pulp made from domestic wood would be the cheapest, closely, I think, along with the chemical pulp made from agro residues like bagasse.. it also depends on what rate you buy this agro residue. These are the two pulps which will be the lowest cost among various pulps. Imported pulp especially wood pulp is going to be very expensive. Waste paper yes, we can produce some pulp from waste paper but the application of this waste paper pulp will be different from the chemical pulp that we are talking about.

• I think I have covered the set of questions that you have raised, Mr. Badjatya, and if you have any other queries you may address to us and we will be very happy to give you the clarifications, thank you.
• Mr. Nahar, thanks for your compliments, and you wanted to know any management succession plan. Yes, sir, we have a succession plan and you will get to see them as we go by, in this coming year. We have seen a new induction into our board now; similar things will happen also probably next year or I think we have a succession plan in mind and we are implementing them in stages. Is this profit sustainable? A difficult question to immediately answer, Mr. Nahar, there are a lot of imponderables. People are talking about commodity prices continuing to remain high, people are talking about consequent drop in consumption levels. Therefore I do expect that this spread will be sustainable for a limited period of time but not for long; I think at least that's my view. On the product landscape over two years, I think we are well entrenched in both printing and writing paper segment. We are also getting our volumes in packaging segment. I expect that our company will continue to do well in the next two years. We are also thinking in terms of how to expand our capacity and I think, our future, I expect to be very positive. New projects, see it is capital intensive industry, if you are getting a payback of say 4 years I think it is a good project, 5 years is also a good project. Therefore it is not like you will get a payback within 1 year and 2 years in pulp and paper industry.
• Then we move on to Mr. Hilada. He is talking about you seem to have cash and what is the plan for deployment. Deployment can be- I mean is mostly capex, and at appropriate time, if it is required then we can also do buyback of shares. And certainly our dividend payout has been good. We have a high dividend declaration in the past also payout about 200%, 150%. But I think most of our cash will be used for capex. Inventory increase in Q1, 3000 tons increased from March, this is only mostly logistic issues, almost all these are covered by orders, all these inventories is covered by orders, and we have some difficulty in shipment, we have some difficulty in getting containers, we have some difficulty in getting shipping space, that is the reason why it had got increased. I expect all this will be cleared in the next one or two months; so have no worry. How to improve value of the company….. I can improve my operations, I can improve my visibility, I can reach out to you; but I think improving the value in the market is in the hands of people like you I think, Mr. Hilada. Use of pulp and paper and pulp scenario, paper has been growing for the last 40 years, sometimes accelerated growth, sometimes muted growth. But it has been

growing. There is a popular perception that because of digitalization paper will disappear. No. Paper has got a very strong future, more so in a country like India where the per capita is hardly about 15 kgs or so, when the world average is about 55 kgs. Therefore I think there is enough scope for both printing and writing varieties as well as for packaging grades, India will continue to do reasonably well. Any well managed company with a good product mix will certainly be able to deliver goods. Price increase in July… yes there was a price increase in July. marginally I think. I don't know about August, but there was a price increase in July. Then we have, okay, some marginal benefits can come from MDP3 to Q2 also; volumes can perhaps increase; also cost perhaps can come down. Capacity is lower at Tirunelvelli… Tirunelvelli is, like you know, a standalone mill; meaning depends on various pulps to come from outside, including pulp from our unit at Erode. It is based on some waste paper. This in the past, I think, there has been some disturbance in the logistics of imports when things were not available, ships were not available, pulps was also not available. This is the reason why it is operating at 90%. Certainly the capacity can be 100% or more over a period of time; How much pulp is captive? In Erode, nearly 100% is captive. We don't require much imported pulp; we may require some waste paper to augment some of / to supplement some of our furnish mix. As far as the story of the Tirunelveli unit, it is different. In Tirunelvelli unit, nearly 40-50% has to come from either imported pulp or imported waste paper; that's how it has been structured right from the beginning. Estimate for this year - as I told you I think I am not very sure about what is going to happen in the next 4 months and 5 months and people are talking about disruptions and people are talking about stagflation, talking about commodity prices crashing. I expect barring very, very strange things happening we will continue to produce, good results and our efforts will be to repeat this performance in the next quarters as well.

M. Kapoor, you wanted a concall. Sir, we need to think about it and we will see how to respond to you. You want to receive more understanding on the raw material security? As far as our Erode unit is concerned I think we depend nearly 80% for wood for the raw material, another about 15-20% as only in bagasse and some waste paper. Uur mill helps a lot of farmers to grow trees in their marginal lands; these are all small farmers only about 2 acres of land or 3 acres of land. We have a tree planting program where we develop clones for eucalyptus and casuarinas wood, and we also have, what we call as naked/barerooted seedlings. And then they actually buy it from us at a very reduced rate then they plant. And grow trees, there are two types of trees; eucalyptus takes about 4 to 5 years and casuarinas takes about 3 to 4 years, for sufficient height and girth for the paper industry to make use of it. These marginal farmers are free to sell to anybody including SPB, and then we buy it from them at the market rate. The most significant part is what we call we are wood positive which means that we help farmers to grow more wood than what we consume in our process. They are always positive. Therefore we are reasonably well secured with respect to availability of wood in Tamil Nadu, we have some cyclones; we have some monsoons, this really disrupts availability of wood and prices go up. These things happen. But by and large volumes have been available to us from Tamil Nadu and nearby states itself. And as far as coal is concerned for the last 20-25 years we have been importing coal; 100% of our coal from Indonesia, but then the last year or so the prices have shot up 3 times. Therefore with a view to curtail we have introduced a lot of biofuel in our units along with coal. So far in stages we have reduced our requirement of coal by 1/3rd. Further work will be done and we hope to step up this biofuel Well, we are far away from mines and we don't have a linkage with any mine, and we also don't have linkage for railways. Under these circumstances we find that the quality of coal from outside.. though the price is high but the quality is also good, we will continue to do so. We have good sources for chemicals so we don't expect any problem of its availability or security of availability. And you said long term arrangement of caustic soda, we enter into probably 3 months contract, or 6 months contracts not anything more than that because the prices do fluctuate and they also come down. Therefore a lot of advantages are there in having a 3 months or 6 months contract. I don't think we ever enter into annual contract for most of these chemicals. Q4 to Q1 better profits…. Yes. our production has also improved, Q1 prices are better. Exports…We explore all other opportunities to scale up. Last year we did some 25% which is a substantially high amount, we can continue to do so as long as the market outside of India gives us a better price. At the same time I will have to protect my domestic market also, I just cannot exit my domestic market and put all my paper in export, just because in one year I get better realization from export. Export market in the past if you see out of 4 years in a row probably you make more money in export only in one year. Other 3 years you get better realization in domestic market. It is going to be very, very, very necessary that you have your foot well planted in the domestic market. That is our strategy, but we can step up and scale up exports if it is really warranted. Projects under consideration – I think either I told or previous speaker that we are looking at projects where we can add some value to the paper that we make. We are also looking at projects that will add volume especially in the packaging segment. Certainly we are working on capex there is no doubt about it.

• Plastic ban coated, how much of this will affect us– I think we have a very wide plastic product mix; we are very much there in the printing and writing paper, we are there in the packing paper, we also make products which are light weight of 20 GSM, 30GSM etc, etc. We are in the multilayer, we are in the single layer. Ban will not affect us to large extent. In any case I think some of the converters who are in the business, they are looking for alternate coating material which will be acceptable from the environment point of view; therefore it is a question of another 4-5 months; again this product will pick up momentum. As far as the HEB share price is concerned, Mr. Kapoor, I think it is purely market related.
• Mr. Mani Sundaram said expenses have increased. Mr. Mani Sundaram, because our production has gone up, our sales have gone up therefore naturally expenditure will also go up. Expansion plans will be there as I explained to the other shareholder. Mr. Mani Sundaram, we will expand, both in Erode and in Tirunelvelli.
• Physical versus VC expenditure, certainly I think this VC AGM is far less expensive than physical. I suppose you are not indicating that we should have future AGMs also in VC. The government of India will decide as to whether

what kind of AGM we will have. I think you are most welcome to visit us anytime, you be in touch with our office we will make proper arrangements.

Then I have also a question on the chat from Mr. Prajesh. Thank you for the opportunity, what about your sales quantity of the first quarter of the current financial year. Mr. Prajesh, sales, as against 35,893 of last year, in first quarter, the same is 55,189 tonnes. Second question is alteration of two machines to manufacture paper board.. how much paper board we can produce now at 100% utilization. Out of 2 lakh tons I think we can make about 42000 tons of paper board if we really desire to make the product. I think I have answered your questions.

I think I have answered various queries raised by the shareholders to the best of my ability. If you have any supplementary or any clarifications etc. please mail us we will certainly respond to you quickly. I think that concludes the question and answer session and we move on to with the concluding session.

11 Concluding Remarks

Members may note that the voting on the NSDL platform will continue to be open for 15 more minutes after the closure of the meeting. As of now, about 198 shareholders are present or participating in this meeting and have remained so in most part of this meeting. I am thankful to the shareholders for their sustained interests.

Members who have not cast their vote yet are requested to do so. The Board of Directors has appointed Mr. Sankarasubramanian, Practicing Company Secretary, as the scrutinizer to supervise the evoting process.

I also hereby authorise Mr. S.Srinivas, CFO & Secretary, to declare the result of the voting and place the results on the website of the Company at the earliest.

The Resolutions, as set forth in the Notice, shall be deemed to be passed today subject to receipt of requisite number of votes.

We had 198 members participating today in this 62nd Annual General Meeting. We are grateful to all our shareholders from across the country who have participated in this AGM, thro' video conferencing. Thank you all for attending the meeting and I hereby declare the proceedings as closed. Beware of Covid-19 and Kindly Take Care for your health and Stay Safe. Thank you for your sustained support to the Company.

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	Production and sales (t)
Particulars	2021-22 Actual	2020-21 Actual	CY vs PY
PRODUCTION (t)	212086	170138	25 %
- Erode	141707	112489	26 %
- TVL	70379	57649	22 %
SALES (t)	220344	139005	59 %
- - Erode	142500	86309	65 %
- - Tirunelveli	77844	52696	48 %

Sales and Closing stock (t)
Particulars	2021-22 Actual	2020-21 Actual	CY vs PY
SALES (t)	220344	139005	59 %
- - Domestic	163334	111022	47 %
- - Exports	57010	27983	104 %
- CLOSING STOCK (t)	2337	35225	(-) 93 %
- - Erode	2337	27735	(-) 92 %
- - Tirunelveli	--	7490	(-)100 %

Summarised P&L (Rs. Crores)
Particulars	2021-22 Actual	2020-21 Actual	CY vs PY
Revenue from Operations	1354.9	781.8	+ 73 %
EBIDTA	182.2	126.9	+ 44 %
Finance Costs	2.9	2.9	--
Depreciation	40.8	37.6	+ 9 %
PBT	138.5	86.4	+ 60 %
Current Tax	34.6	18.4	+ 88 %
Deferred Tax	0.9	(-) 32.4	--
PAT	103.1	100.3	+ 3 %

Domestic Market

• v In Q1, domestic Order flow was poor due to 2nd wave of Covid-19
• v Price Increase effected in April'21 had to be withdrawn in May'21.
• v In early Q2, demand improved from mid August, 2021 on reopening of educational institutions.
• v Logistics issues restricted import of Paper into India. It also helped for demand to pick up.

Domestic Market (Contd.)

• v The adverse impact of lockdowns and tight demand position seen until Jan'22.
• v High cost / shortage of waste paper ensured strong demand for Paper from A-Grade integrated mills.
• v "ZERO STOCK" achieved in Unit : Tirunelveli;
• v In Erode, we had 2337 t of stock as on 31.03.2022

Domestic Market (Contd.)

• Ø Govt. ban on Single use plastics w.e.f July 1, 2022 – Key impact area for the Paper Industry
• Ø Plastic ban is expected to give fillip to Packaging Paper / Paper bags
• Ø However, demand for plastic coated cups / paper plates is expected to suffer in the short term, until an alternate coating is developed.

SPB

Exports Market

• v Significant growth in Exports in Current year compared to previous year – 104% by volume & 140% by value
• v Container availability & freight rates - a concern.
• v US Market – Copier Segment – Continues to be stable.
• v New products in Board Segments – well accepted in International markets

9

Mill development plan (MDP-III)

• ❖ Mill Development project III undertaken to improve production of paper / pulp, improve quality, widen the product range etc
• ❖ Revised Project Cost Estimate - Rs 288 crores
• ❖ Project is nearing completion - Most upgradation works in Chemical Recovery Plant, Wood Pulp Mill, paper machines 1 to 5 - successfully completed.

❖ Benefits being realised.

SPB 31

Operations

• ❖ Installed Capacity for the Company now stands at 2.55 lakh tonnes [1.65 lakh tonnes in Unit : Erode & 0.90 lakh tonnes in Unit : Tirunelveli]
• ❖ Operations are currently running @ 100% of the increased Capacity in Erode and about 90% in Tirunelveli.
• ❖ Significant increase in cost of input materials - a key concern.
• -- Coal - Rs 5200/t (Mar'21) to Rs 14,200/t (Apr'22)
• -- Wood - Rs 8000/BD t (Mar'21) to Rs 8800/BD t (Apr'22)
• -- HW Pulp - US \$ 705/t (Mar'21) to 870/ t (Apr'22)
• -- WSOP - US \$ 400/t (Mar'21) to 500/ t (Apr'22)

Operations (Contd.)

• ❖ Bio-fuel usage increased from 0% (Mar'21) to over 30% (Jun'22) in CPP in Erode.
• ❖ In Unit Erode, more than 70 % of the Energy requirement is met thro' Green Fuel
• ❖ Continues to be NIL Debt Company

33

SPB

Tree Farming

• ❖ Tree Farming Activity is progressing well.
• ❖ In line with vision to remain wood positive, over 17 crore seedlings were made available in FY 2021-22 at subsidised rates, for planting in over 20000 acres of land.
• ❖ The Company continue to be certified under FSC.
• ❖ By FSC Certification, the Company assures its stakeholders that the wood and wood fibre (pulp) purchased by it are traceable to responsibly managed plantations.

ISO

Company continues to be certified under

• ❖ ISO 9001 : 2015 (Quality Management Systems)
• ❖ ISO : 14001 : 2015 (Environment Management Systems)
• ❖ ISO 45001 : 2018 (Occupational Health & Safety Management System)

	Profitability - Q1 of 2022-23
	Particulars	Q1-CY Actual	Q1-PY Actual	CY vs PY
	(In Tonnage)
	Production (t)	60581	52299	+ 16 %
	Sales (t)	55189	35893	+ 54 %
	Closing Stock (t)	6619	46850	(-) 86 %
(Values in Rs. Crs.)
	Revenue from Operations	430.8	218.0	+ 98 %
	EBIDTA	92.5	35.7	+ 159 %
	PBT	80.1	25.2	+ 218 %
	PAT	59.7	18.6	+ 221 %