On April 1, 2025, Emami Paper Mills Limited received cautionary letters from both BSE (Bombay Stock Exchange) and NSE (National Stock Exchange). This was in response to a significant regulatory breach concerning the delayed submission of a required disclosure related to an order from the Superintendent, CGST & Central Excise, Balasore, Odisha, which had been received in August 2024.

As per Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR), listed companies are obligated to disclose any material regulatory actions, orders, or judgments within 24 hours of receiving such communications. This ensures transparency and provides investors with timely and relevant information regarding the company's regulatory compliance status.

The Nature of the Compliance Issue
The cautionary letters from both exchanges were issued due to Emami Paper Mills' failure to adhere to the prescribed timeline for disclosing the aforementioned order. The company was expected to notify both exchanges within 24 hours of receipt, as stipulated in Para A (20) of Schedule III of SEBI LODR. This regulatory violation led to the cautionary action, advising the company to take corrective measures to ensure future compliance.

The cautionary emails pointed out that such delays in disclosure can undermine the trust placed in the company by regulators and investors alike. SEBI Circular No. SEBI/HO/CFD/CFD-PoD1/P/CIR/2023/123, issued on July 13, 2023, emphasizes the need for timely disclosures on any action(s) taken or orders passed by regulatory bodies like the CGST & Central Excise.

Details of the Order and the Violation
The order in question was related to taxation issues and was formally received by the company on August 23, 2024. However, the disclosure regarding this order was not made in the mandatory time frame, which led to the violation being flagged by both BSE and NSE.

While the company maintains that the delay was inadvertent, the exchanges have stressed that such non-compliance is viewed seriously and that future lapses may lead to more severe regulatory actions. Both BSE and NSE have advised the company to exercise greater diligence in the future and to ensure that all necessary filings are made within the specified deadlines.

Impact on Company Operations
According to Emami Paper Mills, the non-compliance has not had a material financial impact on the company’s operations or other activities. The company has assured stakeholders that corrective measures are being implemented to avoid any recurrence of such delays in disclosure compliance.

As part of the company's corrective action, it has formally requested both BSE and NSE to withdraw the cautionary letters, highlighting the steps being taken to prevent future issues.

Steps to Prevent Future Violations
In light of the cautionary letters, Emami Paper Mills is committed to strengthening its internal controls for regulatory compliance. The company has reiterated that it will ensure adherence to SEBI LODR regulations in the future and is placing the cautionary notices before the Board of Directors as part of their ongoing efforts to improve corporate governance and compliance practices.

Additionally, the company has assured that it will improve communication channels between management and regulatory bodies to prevent such lapses moving forward. The management is focused on reinforcing internal procedures for timely filings with stock exchanges.

Conclusion
While Emami Paper Mills has faced a regulatory setback due to delayed disclosures, it is taking the necessary corrective actions to ensure full compliance with SEBI regulations in the future. The company remains committed to maintaining high standards of corporate governance and compliance, recognizing the importance of transparency for the trust and confidence of its investors.

The cautionary letters issued by BSE and NSE serve as a reminder of the crucial need for listed companies to comply with disclosure timelines under the SEBI LODR regulations. Emami Paper Mills assures investors that it is dedicated to avoiding such compliance issues in the future.

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