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Seshasayee Paper & Boards Ltd.

BSE: 502450 Sector: Industrials
NSE: SESHAPAPER ISIN Code: INE630A01024
BSE 12:38 | 03 Aug 204.40 0.25
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OPEN

201.65

HIGH

208.25

LOW

201.45

NSE 12:29 | 03 Aug 204.55 0.90
(0.44%)
OPEN

202.85

HIGH

208.65

LOW

201.95

OPEN 201.65
PREVIOUS CLOSE 204.15
VOLUME 15901
52-Week high 230.00
52-Week low 126.00
P/E 12.77
Mkt Cap.(Rs cr) 1,289
Buy Price 204.05
Buy Qty 1.00
Sell Price 204.35
Sell Qty 1.00
OPEN 201.65
CLOSE 204.15
VOLUME 15901
52-Week high 230.00
52-Week low 126.00
P/E 12.77
Mkt Cap.(Rs cr) 1,289
Buy Price 204.05
Buy Qty 1.00
Sell Price 204.35
Sell Qty 1.00

Seshasayee Paper & Boards Ltd. (SESHAPAPER) - Director Report

Company director report

he Directors hereby present their Sixty First T Annual Report and the AuditedAccounts for the year ended March 31 2021.

The Company has adopted the Indian Accounting Standards (IndAS) from Financial Year2017-18 as mandated. Accordingly the financial statements for current year includingcomparative figures of previous year are based on IndAS and in accordance with therecognition and measurement principles stated therein as well as other accountingprinciples generally accepted in India. While this has no major impact for the

Statement of Profit and Loss there is and there will be periodical impact for"Other Comprehensive Income" in measuring and restating investments at fairvalue.

WORKING RESULTS

2020-21 2019-20
(in tonnes) (in tonnes)
Production 1 70 138 1 97 547
Sales 1 39 005 1 87 271
(Rs crores) (Rs crores)
Revenue from
Operations 781.79 1183.98
Other Income 19.32 22.73
Total Income 801.11 1206.71
Profit before
interest
depreciation
exceptional item
and tax 126.87 289.57
Finance Cost 2.91 6.89
Depreciation 37.60 35.00
Profit before tax 86.36 247.68
2020-21 2019-20
(Rs crores) (Rs crores)
Profit before tax 86.36 247.68
Provision for
current tax 18.44 45.17
Transfer to / (from)
Deferred Tax (-) 32.35 29.05
Net Profit 100.27 173.46

DIVIDEND

The Board of Directors recommend payment of Dividend at Rs 2.50 (Rupees Two and Fiftypaise) per Equity Share of Rs 2 each absorbing a sum of

Rs 15.77 crores.

As per the provisions of the Income tax Act 1961 as amended by the Finance Act 2020Dividend Distribution Tax is not applicable in respect of Dividends declared distributedor paid by the Company after March 31 2020. The same will be taxed in the hands of theShareholders. As per Ind AS 10 Events after the reporting period Proposed Dividend onEquity Shares being a non-adjusting event at the Balance Sheet date is not recognised asa liability in the accounts for the year ended March 31 2021. The same will be recognisedin the year of payment viz. year ending March 31 2022.

APPROPRIATIONS

2020-21
(Rs crores)
Net profit for the year 100.27
Add:
Income from SPB Equity Shares
Trust 0.74
Carried over 101.01
2020-21
(Rs crores)
Brought forward 101.01
Add:
Surplus brought forward from the
previous year 199.77
Add:
Re-measurement of defined
benefit Plans (net of tax) 1.34
302.12
Less:
Dividend paid during the year (For
Financial Year 2019-20) 25.23
Tax on Dividend distribution --
Transfer to General Reserve 100.00
Balance carried forward 176.89

OPERATIONS

The lockdown imposed in multiple phases to contain the spread of COVID-19 pandemic hadaffected the normal functioning of commercial establishments schools colleges andeducational institutions. Slowdown in the Indian economy coupled with poor offtake inexport markets due to the pandemic situation had resulted in significant reduction indemand for Printing and Writing Paper key segment in which the Company operates. Due tothese factors Company witnessed significant drop in Revenue and profits during the yearended March 31 2021.

PRODUCTION

During the FY 2020-21 the production at Unit : Erode was 1 12 489 tonnes of paper ascompared to 1 25 313 tonnes produced in the previous year. The production during the yearincludes 16 226 tonnes of Pulp Board produced during the year (Previous Year - Nil).Accordingly paper production at Unit : Erode was lower by

29 050 tonnes compared to the previous year Reduction was mainly due to (i) the poormarket conditions on account of the Covid-19 pandemic related lockdowns and the consequentmarket related intermittent shuts that the Company had to avail in its Paper Machines and(ii) the shuts availed by the Company for upgradation works in its Paper Machines duringthe year under Mill Development Plan - III.

Unit : Erode also produced 32 569 tonnes of Wet Lap Pulp (Previous Year 35 083 tonnes)to augment the Pulp requirements of Unit : Tirunelveli.

Unit : Tirunelveli produced 57 649 tonnes of Paper during the FY 2020-21 as comparedto 72 234 tonnes produced in the previous year. The production was lower by 14 585tonnes compared to the previous year. Reduction was mainly due to the poor marketconditions and the consequent market related intermittent shuts.

Overall Production for the Company was 170 318 tonnes of Paper and Boards forthe year as compared to 1 97 547 tonnes produced in the previous year.

SALES

During the FY 2020-21 Company registered overall sales of 1 39 005 tonnes of Paper(Previous year : 1 87 271 tonnes). Unit : Erode registered Sales of 86 309 tonnes of paperin FY 2020-21 (Previous year : 117 576 tonnes). The Company's unit in Tirunelveliregistered sales of 52 696 tonnes of Paper during FY 2020-21 (Previous Year : 69695 tonnes).

In addition as part of its trading activity the Company had sold during FY 2020-21petroleum products valued at Rs 21.75 crores (Previous Year:

Rs 25.62 crores) and 367 tonnes of Note Books valued at Rs 3.61 crores (Previous Year :365 tonnes valued at Rs 3.81 crores).

The overall Inventory of Paper and Boards stood at 35 225 tonnes as on March 31 2021(As on March 31 2020 - 9 831 tonnes). Closing Stock of Notebook was 459 tonnes as onMarch 31 2021 (Stock of Notebook as on March 31 2020 : 458 tonnes).

PROFITABILITY

The Revenue from Operations of the Company for the year was Rs 781.79 crores asagainst Rs 1183.98 crores in the previous year. Profit before interest depreciationexceptional item and tax was Rs 126.87 crores for the Company as a whole compared to Rs289.57 crores in the previous year.

After absorbing interest and depreciation of Rs 2.91 crores and Rs 37.60 croresrespectively the Profit before tax (PBT) was Rs 86.36 crores in FY 2020-21 as comparedto Rs 247.68 crores in the previous year.

The Company registered a lower PBT compared to previous year mainly due to lower salesvolumes and drop in net sales realisations in the current year attributable in entiretyto the significant reduction in demand for Printing and Writing Paper caused by lockdownimposed in multiple phases by Central / State Governments in India to contain the spreadof COVID-19 pandemic.

For the year ended 31st March 2021 current tax liability works out to Rs 18.44 croresas against a liability of Rs 45.17 crores in the previous year. Considering theadvantages the Company plans to opt for the reduced tax rate of 25.17% (includingsurcharge and Cess) under Section 115BAA of the Income Tax Act from the FY 2021-22.Accordingly the deferred tax assets and liabilities as on March 31 2021 have beenmeasured at the effective income tax rate of 25.17% which is expected to be applied tothe period when the asset is realised or the liability is settled based on tax rates andtax laws that have been enacted or substantively enacted by the end of the reportingperiod. The restatement at effective tax rate of 25.17% involved a reversal of NetDeferred Tax Liability Rs 43.67 crores and the Deferred Tax Expense for Q4/FY 2020-21 isnet of the aforesaid amount.

As a result profit after tax for the year ended March 31 2021 was Rs 100.27 croresas compared to Rs 173.46 crores in the previous year.

FINANCE

The Company did not have any instalments of Term Loans and interest (on Term Loans andWorking Capital borrowings) due for payment during the year.

The Company reports NIL debt position as on March 31 2021 (Debt Position as on March31 2020 was also NIL).

INTEREST FREE SALES TAX DEFERRAL LOAN

The Company repaid Rs 3.35 crores during the year and the balance outstanding as onMarch 31 2021 was Rs 8.40 crores.

MARKET CONDITIONS

Both the units of the Company (Units in Erode and Tirunelveli) had closed downoperations from midnight of March 24 2020 in response to the nation-wide lockdown tocurb the spread of Covid-19 Virus.

Subsequently in response to our representation dated April 10 2020 the Collector ofNamakkal District had given permission on same day to the Company to recommence itsoperations in Unit : Erode with minimum employees following all precautions in everyshift and after ensuring full hygenic care and protection of the employees.

Accordingly the Company recommenced its operations in its Unit : Erode on April13 2020. Based on Collector's (Tirunelveli District) permission to recommence operationsUnit:Tirunelveli recommenced operations on April 27 2020.

The Company has taken all necessary precautions in both the units and has arranged forrequired Masks Hand Sanitisers etc. to ensure protection for all its employees. TheCompany in its Unit : Erode as well as in Unit : Tirunelveli has Doctor in attendanceto attend to the health issues of the employees.

The paper market reached a trough in the last week of March 2020 amidst the Lockdownof key markets in India and across most parts of the Globe due to Covid-19 pandemic. Thisadverse situation continued in the first half FY 2020-21 significantly affecting therevenue and profitability during the first 2 quarters of the FY 2020-21. The gradualrelaxation of lock down initiated by the Government in Q2 was widely expected to trigger apickup in demand for the paper industry in Q3. This unfortunately did not materialise forthe printing and writing segment. Demand for Maplitho and Creamwove grades the segmentswhich represent major share of the Company's revenue continued to remain low in Q3 mainlydue to large sections of educational sector still remaining closed dearth of orders frompublishing industry and most institutions skipping printing of calendars / diaries for thecurrent year.

The last quarter of FY 2020-21 witnessed favourable market conditions with increase indemand for most varieties of Printing and Writing paper. This resulted in increase insales volumes and selling prices in Q4-2020-21. However the net sales realisations fromthe Export Markets continued to be under pressure mainly on account of scarcity ofcontainers resulting in higher logistics costs.

However with a strong second wave of Covid-19 pandemic and consequent staggeredlockdowns in place the sustainability of the demand recovery is a challenge in the shortterm. Until Financial Year 2018-19 the Company had achieved Zero Stock of Finished Goodsat the end of Financial Year in 21 years out of the last 25 years. On account of themarket and the supply chain disruptions caused by Covid-19 and consequent lockdowns theCompany could not achieve Zero Stock of Finished Goods in the FY 2019-20 and FY 2020-21.

EXPORT PERFORMANCE

Unit : Erode exported 11802 tonnes of paper during the year as compared to 15324tonnes exported during FY 2019-20. The export proceeds in Foreign Currency for the year2020-21 amounted to US $ 7793716 (Previous Year Exports - US $ 12852220 and AED1312846). For Unit : Erode in Rupee terms the value of exports amounted to Rs 55.38crores (Previous Year Rs 88.40 crores). For Unit : Erode by volume exports constitutedaround 14.38% of the Production as against the 12.23% in the previous year. Unit : Erodealso sold 73 tonnes during the year under deemed exports whose proceeds amounted to Rs0.46 crores. (Previous Year : 63 tonnes valued at Rs 0.41 crores). Unit : Tirunelveliexported 16181 tonnes of Paper during the year as against 21089 tonnes exported during2019-20. The export proceeds in Foreign Currency amounted to US $ 11200798 (PreviousYear Exports - US $ 16673504 and EURO 1383280). For Unit : Tirunelveli in Rupeeterms the value of exports amounted to Rs 75.32 crores (Previous Year Rs 120.51 crores).For Unit: Tirunelveli Exports by volume constituted around 28.06% of the Production asagainst 29.20% in the previous year. Unit : Tirunelveli did not have deemed exports salesduring the year (Previous Year : 33 tonnes valued at Rs 0.19 crores).

TREE FARMING ACTIVITY

The Company continues to provide quality Clonal Seedlings of Eucalyptus as well asbare-rooted Casuarina Seedlings at subsidised rates to interested farmers and assistthem with technical help to achieve higher yields.

In addition the Company had provided clones of Melia-Dubia a high yielding fastgrowing species suitable for Pulp production to interested farmers.

Technical Support to the farmers for this initiative is being provided in associationwith the Department of Tree Breeding of Forest College and Research Institute attached toTamil Nadu Agricultural University Coimbatore through a Collaborative Research Project.

In accordance with the Company's vision to achieve wood positive status over sixteencrore Seedlings (Clonal Eucalyptus Seedlings bare-rooted Casuarina Seedlings andMelia Dubia Clones) were made available during the year to farmers at subsidised ratesfor planting in about 19015 acres of land. (Previous Year : 16801 acres).

ISO 9001 / ISO 14001 ACCREDITATION

The Company's Quality Management Systems and Environment Management Systems continue tobe covered under ISO 9001 and ISO 14001 Accreditations.

Both ISO 9001 and ISO 14001 Standard have undergone revision to 2015 Standards whichlays emphasis on role of top management adoption of risk management and changemanagement. All these changes are to facilitate sustainability in business performance.

OHSAS 18001 CERTIFICATION

The Company continues to enjoy certification under Occupational Health and SafetyAssessment Series 18001 (OHSAS) which is an international standard that facilitatesmanagement of Occupational Health and Safety risks associated with the business of theorganisation.

FOREST STEWARDSHIP COUNCIL (FSC) CERTIFICATION

The Company has been certified under four Standards of FSC viz. FSC-STD-40-004FSC-STD-40-005 FSC-STD-40-003 and FSC-STD-50-001. By this the Company assures itsstakeholders that the wood and wood fibre (pulp) purchased by it are traceable toresponsibly managed plantations and that adequate document controls are in place to ensureidentification and traceability throughout the Chain of Custody. This also means that theCompany is capable of manufacturing and selling FSC 100% and FSC Mix Products in thedomestic and international markets.

AWARDS

The Company won the following Awards and recognitions during the year : CII SR EHSExcellence Awards for the year 2020 - Company secured 3-Star Rating from CII inappreciation of the EHS Practices of the Company.

Tamil Nadu State Safety Award.

EXPORT HOUSE STATUS

TheCompanycontinuestobeaccreditedwith "Star Export House" Status by theGovernment of India Ministry of Commerce Directorate General of Foreign Trade inrecognition of its export performance.

DEPOSITORY SYSTEM

As on March 31 2021 12 938 Shareholders are holding Shares in Demat form and 4 99 52295 shares have been dematerialised representing 79.20% of the total Equity ShareCapital.

SUBSIDIARY

M/s Esvi International (Engineers & Exporters) Limited (Esvin) is a wholly ownedsubsidiary of the Company. Currently Esvin holds properties and derives property income.

MILL DEVELOPMENT PLAN

In the FY 2020-21 the Company had embarked on a Mill Development Plan - III (MDP- III) at Unit : Erode at a Cost of Rs 315 crores.

The MDP - III at Unit : Erode consists of :

Upgradation and Modernisation of the Paper Machines to increase the Capacity from 1 32000 tonnes per annum to 1 65 000 tonnes per annum.

Upgradation and Modernisation of the RDH Pulp Mill to increase the Capacity to 154 000 tonnes per annum.

Conversion of one Paper Machine to manufacture high end varieties of multilayer boards.

Upgradation of the Recovery Island and Augmentation of Waste Water Treatment Plant.

The execution of the Project (MDP-III) had commenced with July 01 2019 as the ZeroDate with an originally planned project execution period of 21 months. However with someof the major suppliers and service providers both globally and in India located inCovid-19-lockdown areas the project has seen delays and the Company expects to completethe Project in entirety in FY 2021-22.

Some of the major components of the project namely (a) upgradation of Paper MachineNo. 5 (b) upgradation of Paper Machine No. 1 (c) conversion of Paper Machine No. 2 formanufactureofsingle layerandmulti-layer boards have been completed. Other criticalcomponents of the project namely (a) the upgradation of Paper Machine No. 3 (b)upgradation of Paper Machine No. 4 (c) upgradation of Recovery Island and RDH Pulp Millare expected to be completed in phases in the FY 2021-22.

In the matter of acquisition of M/s Servalakshmi Papers Limited (underliquidation) the company has since advised the liquidator that it would not be interestedin pursuing the proposal.

CURRENT YEAR (2021-22)

A strong second wave of Covid-19 pandemic and consequent staggered lockdowns in placehave affected and halted the demand up-tick that was witnessed in the last quarter of FY2020-21.

Order inflow has once again been impacted due to the consequences of 2nd wave withschools and colleges continuing to remain closed and work-from-home trend continuing inoffices. Outlook for 1st quarter of FY 2021-22 doesn't look promising with stricterlockdowns looming with rapid spread of the virus.

In Unit : Erode the Production during April 2021 was 10863 tonnes as compared to

5 715 tonnes produced during April 2020. In

Unit : Tirunelveli the Production was 6003 tonnes in April 2021 as against 337 tonnesin

April 2020. The overall Production for the Company for the month of April 2021was 16866 tonnes. Total Value of Production during April 2021 amounted to only Rs 77.75crores compared to Rs 26.15 crores during April 2020.

During April 2021 3006 tonnes of paper valued at Rs 14.38 crores were exported.

ENVIRONMENTAL PROTECTION

The Company continues to provide utmost attention to the conservation and improvementof the environment. In Unit: Erode the Power Boilers Lime kiln and Recovery Boilers areequipped with Electro Static Precipitators to arrest dust emissions. The Company operatesan Anaerobic Lagoon for high BOD liquid effluents and a Secondary Treatment System fortotal Mill effluent. These facilities are operating efficiently enabling the Company tocomply with the Pollution Control norms on a sustained basis. The treated effluent watercontinues to be utilised for irrigating nearby sugar cane fields.

Additional treatment facilities have been proposed for waste water under the MillDevelopment Plan - III.

Unit: Tirunelveli is well equipped with efficient Electro Static Precipitator for thePower Boiler and has an extensive green cover. Its treated waste water after recyclingis used to irrigate the Company owned lands. As part of the Mill Expansion Plan the WasteWater Treatment

Plant has been augmented with a Dissolved Air Floatation Cell and Anaerobic Digester.

MANAGEMENT'S DISCUSSIONS AND ANALYSIS REPORT

The Report on Management's Discussion and Analysis as required under Clause49(VIII)(D) of the Listing Agreement with Stock Exchanges covering industry structure anddevelopments opportunities and threats outlook discussion on financial performanceetc. is contained in "Management Discussion and Analysis Report" that forms anintegral part of this Report and annexed as Annexure - I.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 and Schedule V to the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Corporate Governance Report together with theCertificate from the Company's Auditors confirming the compliance of conditions onCorporate Governance is given in Annexure - II.

BUSINESS RESPONSIBILITY REPORT

Regulation 34(2) of the SEBI (LODR) Regulations requires the listed entities toinclude a Business Responsibility Report (BRR) in their Annual Report describing theinitiatives taken by the Company from Environmental Social and Governance perspective inthe format as specified by SEBI from time to time. Originally this regulation / reportingrequirement was applicable only for the top 500 listed Companies based on MarketCapitalisation (calculated as on March 31 of every financial year).

However SEBI vide their amendment to LODR dated December 26 2019 has extended thisto Top 1000 Companies and this Regulation is applicable to our Company with effect fromFinancial Year 2019-20.

The Company has drafted the Business Responsibility Report for FY 2020-21 in line withthe format prescribed by SEBI which is given in

Annexure - III to the Directors' Report.

DISCLOSURE REQUIREMENTS UNDER SECTION 134(3) OF THE COMPANIES ACT 2013

Section 134(3) of the Companies Act 2013 requires the Board's Report to includeseveral additional contents and disclosures compared to the earlier law. Most of them haveaccordingly been made in the Corporate Governance Report at appropriate places that formsan integral part of this Report.

EXTRACT OF THE ANNUAL RETURN

The details forming part of the Extract of the Annual Return in Form MGT - 9 is givenin Annexure - IV.

DIRECTORS'RESPONSIBILITY STATEMENT

While preparing the annual accounts the Company has adhered to the following:Applicable Accounting Standards referred to in Section 133 of the Companies Act 2013have been followed.

The Directors have selected such accounting policies and applied them consistently andmade judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2021 and of the profit ofthe Company for the said period. The Directors have taken proper and sufficient care forthe maintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.

The Directors have prepared the annual accounts on a "going concern" basis.The Directors have laid down internal financial controls to be followed by the

Company and that such internal financial controls are adequate and were operatingeffectively.

The Directors have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF LOAN GUARANTEES OR INVESTMENTS

During the year High Energy Batteries (India) Limited (HEB) repaid the Inter CorporateLoan of Rs 4.40 crores along with interest. There is no principal or interest due fromHEB to the Company as on March 31 2021.

During the year the Company did not extend any Loan or Guarantee or provided anysecurity or make investment covered under Section 186 of the Companies Act 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY

The Corporate Governance Report contains relevant details on the nature of RelatedParty Transactions (RPTs) and the policy formulated by the Board on Material RPTs.Particulars of Contracts or Arrangements with Related Parties referred to in Section188(1) of the Companies Act 2013 is furnished in accordance with Rule 8(2) of theCompanies (Accounts) Rules 2014 in Form AOC - 2 as Annexure - V.

MATERIAL CHANGES AND COMMITMENTS

There was no change in the nature of business of the Company during the year.Commencing from the last week of the financial year ended March 31 2020 and continuing into the first-half of financial year 2020-21 the Company's operations were materiallyimpacted by lower production lower sales higher Inventory and negative cash generationdue to the lockdown consequent to Covid-19 pandemic.

There are no other material changes and commitments in the business operations of theCompany since the close of the financial year on 31st March 2021 to the date of thisReport.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information relating to Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo as required under Section 134(3)(m) of the Companies Act2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is given in Annexure - VI.

CORPORATE SOCIAL RESPONSIBILITY

Section 135 of the Companies Act 2013 mandates every Company having minimum thresholdlimit of net worth turnover or net profit as prescribed to constitute a Corporate SocialResponsibility Committee of the Board formulation of a Corporate Social ResponsibilityPolicy that shall indicate the activities to be undertaken by the Company as specified inSchedule VII to the Companies Act 2013 and duly approved by the Board fix the amount ofexpenditure to be incurred on the activities and monitor the CSR Policy from time to time.Since your Company falls within the minimum threshold limits constituted a CSR Committeeof the Board and formulated a CSR Policy. The CSR Report forming part of this Report isfurnished in Annexure - VII.

COVID-19 RELIEF ACTIVITIES

Our Company undertook a series of initiatives throughout the year to help ouremployees their families and those living around our Units to combat Covid-19 pandemic.While re-commencing operations of the Plant a detailed Standard Operating Procedures(SOP) was put in place and Awareness Programmes were conducted for all employees.

The Company provided face masks gloves and other protection materials free of cost toall employees and nearby residents. In line with the Guidelines of Govt. of TamilnaduKabasura Kudineer (a herb based medicinal drink) was distributed free of cost to all ouremployees and residents regularly. Hand sanitizers were provided at mill entrance alldepartments and also in public places around the Mill. Packets containing rice grocerycooking oil etc. were distributed to those residing in containment areas as requested byDistrict Collector Namakkal. Disinfectant was sprayed every day using a dedicated tractorall over the Plant Residential Colony and nearby Villages. The Company also assistedinstallation of Key Medical Equipment Oxygen Storage System etc. in nearby Govt.Hospitals.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Management Personnel) Rules 2014 is furnished in Annexure- VIII.

CASH FLOW STATEMENT

As required under Regulation 53 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a Cash Flow Statement is attached to the Balance Sheet.

INDUSTRIAL RELATIONS

Relations between the Management and Employees were cordial throughout the year underreview. The five year wage / salary agreement with labour unions / staff associationexpired on March 31 2019. Negotiations are underway for a new agreement which will beeffective from April 01 2019.

DIRECTORS

During the FY 2020-21 Tamilnadu Industrial Investment Corporation (TIIC) withdrew thenomination of Tmt. E Sundaravalli IAS and in her place nominated Tmt. Sigy ThomasVaidhyan IAS (Managing Director TIIC) as its Nominee Director on the Board of ourCompany. Tmt. Sigy Thomas Vaidhyan IAS was appointed as an Additional Director on theBoard of the Company on November 07 2020. She was later appointed by the Shareholders ofthe Company vide Postal Ballot on December 22 2020 as Nominee Director not liable toretire by rotation.

Also during the year Tamilnadu Government withdrew the nomination of SriDeepak Srivatsava IFS and in his place nominated Dr. Shekhar Kumar Niraj IFS theSpecial Secretary to Government Environment and Forests Department as its NomineeDirector on the Board of our Company. Dr. Shekhar Kumar Niraj IFS was appointed as anAdditional Director on the Board of the Company on November 07 2020. He was laterappointed by the Shareholders of the Company vide Postal Ballot on December 22 2020 asNominee Director liable to retire by rotation.

Your Directors place on record the valuable services rendered by Tmt. E SundaravalliIAS and Sri Deepak Srivatsava IFS during their tenure as Directors of the Company.

All the Independent Directors have given the declaration that they meet the criteria onindependence as laid down under Section 149(6) of the Companies Act 2013. Theperformance evaluation of Independent Directors has been done by the entire Board ofDirectors excluding the Director being evaluated at the Board Meeting held on March 262020. The Board on the basis of such performance evaluation determined to continue theterm of appointment of all Independent Directors.

AUDITORS

M/s Maharaj N R Suresh & Co LLP (renamed during the year from M/s Maharaj N RSuresh

& Co. to M/s Maharaj N R Suresh & Co LLP on conversion of thepartnership firm into LLP) and M/s R Subramanian and Company LLP Chartered Accountantscontinue to be the Statutory Auditors of the Company.

Particulars of Statutory Auditors Cost Auditors Internal Auditors and the SecretarialAuditors have been given in the Corporate Governance Report that forms an integral part ofthis report. Secretarial Audit Report as required by Section 204(1) of the Companies Act2013 is attached in Annexure - IX.

ACKNOWLEDGEMENT

The Directors place on record their great appreciation of the tireless efforts of allthe

Executives and Employees of the Company for their commendable performance in achievingexcellent financial results in a year of great challenges. The Directors also expresstheir sincere thanks to the Government of India Government of Tamilnadu and CommercialBanks for their understanding guidance and assistance and Indentors Customers FarmersSuppliers and Shareholders for their excellent support at all times.

On behalf of the Board
N GOPALARATNAM
Chairman
Erode
May 08 2021

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