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Seshasayee Paper & Boards Ltd.

BSE: 502450 Sector: Industrials
NSE: SESHAPAPER ISIN Code: INE630A01024
BSE 00:00 | 18 Jun 171.20 0.20
(0.12%)
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172.10

HIGH

172.95

LOW

164.15

NSE 00:00 | 18 Jun 171.75 1.05
(0.62%)
OPEN

171.60

HIGH

174.55

LOW

165.00

OPEN 172.10
PREVIOUS CLOSE 171.00
VOLUME 11949
52-Week high 192.95
52-Week low 126.00
P/E 10.77
Mkt Cap.(Rs cr) 1,079
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 172.10
CLOSE 171.00
VOLUME 11949
52-Week high 192.95
52-Week low 126.00
P/E 10.77
Mkt Cap.(Rs cr) 1,079
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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

Company director report

The Directors hereby present their Sixtieth Annual Report and the Audited Accounts forthe year ended March 31 2020.

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 Statementof Profit and Loss there is and would be periodical impact for "Other ComprehensiveIncome" in measuring and restating investments at fair value.

WORKING RESULTS

2019-20 2018-19
(in tonnes) (in tonnes)
Production 1 97 547 2 09 015
Sales 1 87 271 2 07 971
(Rs. in crores) (Rs. in crores)
Revenue from
1183.98 1325.24
Operations
Other Income 23.87 23.06
Total Revenue 1207.85 1348.30
Profit before interest depreciation exceptional item and tax 290.71 318.90
Finance Cost 6.89 13.81
Depreciation 35.00 33.78
Exceptional Item -- --
Profit before tax 248.82 271.31
Profit before tax 248.82 271.31
Provision for current tax 45.17 58.20
Transfer to / (from) Deferred Tax 29.05 23.11
Net Profit 174.60 190.00

DIVIDEND

The Board of Directors has recommended payment of Dividend of Rs. 3.50 plus a DiamondJubilee Special Dividend of Rs. 0.50 totalling to a Dividend of Rs. 4.00 per Equity Shareof face value of Rs. 2 each for the financial year 2019-20 absorbing a sum of Rs. 25.23crores. As per the provisions of the Income tax Act 1961 as amended by the Finance Act2020 Dividend Distribution Tax is not applicable in respect of Dividends declareddistributed or paid by the Company after March 31 2020. The same will be taxed in thehands of the Shareholders. As per Ind AS 10 Events after the reporting period ProposedDividend on Equity Shares being a non-adjusting event at the Balance Sheet date is notrecognised as a liability in the accounts for the year ended March 31 2020. The same willbe recognised in the year of payment viz. year ending March 31 2021.

APPROPRIATIONS

2019-20
(Rs. in crores)
Net profit for the year 174.60
Add:
Surplus brought forward from the previous year 156.38
Carried over 330.98
Brought forward 330.98
Less:
Re-measurement of Defined
Benefit Plans 0.80
Dividend paid during the year (For Financial Year 2018-19) 25.23
Tax on Dividend distribution 5.18
Transfer to General Reserve 100.00
Balance carried forward 199.77

OPERATIONS PRODUCTION

During the year the production at Unit : Erode was 1 25 313 tonnes of paper ascompared to 1 32 379 tonnes produced in the previous year. Production was lower by7 066 tonnes compared to the previous year. Reduction was mainly due to shuts availed inthe Paper Machine during the year for upgradation works poor market conditions and alsoon account of plant operations being shut down in the last week of March 2020 due toCovid-19 lockdown.

Unit : Erode also produced 35 083 tonnes of Wet Lap Pulp to augment the Pulprequirements of Unit : Tirunelveli.

Unit : Tirunelveli produced 72 234 tonnes of Paper during the year as compared to 76636 tonnes produced in the previous year. The production was lower by 4 402 tonnescompared to the previous year. The reduction was mainly due to planned shuts formaintenance activities and also on account of plant operations being shut down in the lastweek of March 2020 due to Covid-19 lockdown.

Overall Production for the Company was 1 97 547 tonnes of Paper and Boards forthe year as compared to 2 09 015 tonnes produced in the previous year.

SALES

After taking into account 443 tonnes towards in-house consumption Unit : Erode sold1 17 576 tonnes against the production of 1 25 313 tonnes. The Finished GoodsInventory as at March 31 2020 was 7 294 tonnes (As on March 31 2019 -Nil).

In addition Unit : Erode as part of its trading activity had sold petroleum productsvalued at Rs. 25.62 crores and 27 tonnes of Note Books. Closing Stock of TradedGoods was 6 tonnes as on March 31 2020.

Unit : Tirunelveli sold 69 695 tonnes after taking into account 2 tonnes towardsin-house consumption. The Finished Goods Inventory as at March 31 2020 was 2 537 tonnes(As on March 31 2019 -Nil).

In addition Unit : Tirunelveli as part of its trading activities had sold 338 tonnesof Note Books. Closing stock of traded goods was 452 tonnes as on March 31 2020.

The overall sale of Paper and Paper Boards effected by the Company during the year was1 87 271 tonnes compared to 2 07 971 tonnes sold during the previous year.

PROFITABILITY

The Revenue from Operations of the Company for the year was Rs. 1183.98 crores asagainst Rs. 1325.24 crores in the previous year. Profit before interest depreciationexceptional item and tax was Rs. 290.71 crores for the Company as a whole compared toRs. 318.90 crores in the previous year.

After absorbing interest and depreciation of Rs. 6.89 crores and Rs. 35.00 croresrespectively the Profit before tax (PBT) was Rs. 248.82 crores as compared to Rs. 271.31crores in the previous year. The Company registered a lower PBT by 8.3% compared toprevious year mainly due to :

Lower Sales volumes.

Drop in Net Sales Realisations in the current year.

Nationwide lockdown disrupting plant operations and resulting in higher goodsinventory of Paper as on March 31 2020 with domestic markets and markets outside ofIndia getting closed down during the last week of March 2020 amidst Covid-19 pandemic.

For the year ended 31st March 2020 current tax liability works out to Rs.45.17 crores as against a liability of Rs. 58.20 crores in the previous year. TheDeferred Tax liability net of MAT Credit Entitlement utilisation amounted to Rs. 29.05crores for the year ended 31st March 2020 as against a charge of Rs. 23.11crores in the previous year.

As a result profitafter tax for the year ended March 31 2020 was Rs. 174.60 croresas compared to Rs. 190.00 crores in the previous year.

FINANCE

Instalments of Term Loans and interest dues on Term Loans and Working Capitalborrowings were paid on or before the respective due dates. During the year the Companyhad repaid all its Term Loans borrowed from banks and became a Debt free company with NILoutstanding to Banks / Financial Institutions from December 2019 onwards. The Companyreports NIL debt position as on March 31 2020.

INTEREST FREE SALES TAX DEFERRAL LOAN

The Company repaid Rs. the lockdown announced3.10 crores during the year and thebalance outstanding as on March 31 2020 was Rs. 11.75 crores.

MARKET CONDITIONS

The year began on a strong note for the Paper Industry continuing with the strongmarket sentiments witnessed during the earlier year. Realisations in Domestic andInternational Markets continued to be favourable in Q1 of 2019-20.

The weakening of demand and the consequent pressure on the selling prices commenced inthe latter half of the 2nd Quarter and continued thro' to the subsequent 2quarters mainly due to following factors : finished

Deceleration in the growth of Indian Economy with falling GDP growth month aftermonth.

Huge increase in imports of paper by Traders from ASEAN countries China Korea etctaking advantage of Import Duty concessions available for such imports.

Reduction in prices of pulp and consequent reduction in prices of paper in the overseasmarkets triggering larger imports into India and creating price-war with domesticsuppliers.

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.

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.

Until Financial Year 2018-19 the Company had achieved Zero Stock of Finished Goods atthe end of Financial Year in 21 years out of the last 25 years. Though the Company hadput in place plans to reach this feat again as on March 31 2020 the poor marketconditions that prevailed from February 2020 onwards non-availability oftrucks with the drivers fearing the on virus effect and finally March 24 2020 resulted inthe Company holding a Finished Goods inventory of 9831 tonnes at the close of March 312020.

EXPORT PERFORMANCE

Unit : Erode exported 15 324 tonnes of paper during the year as compared to 16 993tonnes exported during 2018-19. The export proceeds in Foreign Currency for the year 2019-20amounted to US $ 12 852 220 and AED 1 312 846 (Previous Year Exports -US $ 15 211167 and Euro 160 056). For Unit : Erode in Rupee terms the value of exportsamounted to Rs. 88.40 crores (Previous Year Rs. 107.03 crores). For Unit : Erodeby volumes exports constituted around 12.23% of the Production as against the 12.84% inthe previous year. Unit : Erode also sold 63 tonnes during the year under deemed exportswhose proceeds amounted to Rs. 0.41 crores.

Unit : Tirunelveli exported 21 089 tonnes of Paper during the year as against 17 825tonnes exported during 2018-19. The export proceeds in Foreign Currency amounted to US$16673504andEURO1383280(PreviousYearExports -US $ 15 541 015 and Euro 204 930). For Unit : Tirunelveli in Rupee termsthe value of exports amounted to Rs. 120.51 crores (Previous Year Rs. 111.01 crores). ForUnit: Tirunelveli Exports by volumes constituted around 29.20% of the Production asagainst 23.26% in the previous year. Unit : Tirunelveli also sold 33 tonnes during theyear under deemed exports whose proceeds amounted to Rs. 0.19 crores.

TREE FARMING ACTIVITY

The Company continues to provide quality Clonal Seedlings of Eucalyptus as well as bare-rootedCasuarina Seedlings at subsidised rates to interested farmers and assist them withtechnical 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 fourteencrore Seedlings (Clonal Eucalyptus Seedlings bare-rooted Casuarina Seedlings and MeliaDubia Clones) were made available during the year to farmers at subsidised rates forplanting in about 16801 acres of land.

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 14001Standards have undergone revision to 2015 Standards which lays emphasis on role of topmanagement adoption of risk management and change management. All these changes are tofacilitate 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.

F O R E S T S T E W A R D S H I P C O U N C I L FSC-CERTIFICATION

The Company has been certified under four Standards of FSC viz. FSC-STD-40-004 FSC-STD-40-005FSC-SSTD-40-003 and FSC-STD-50-001. By this the Company assures its stakeholdersthat the wood and wood fibre (pulp) purchased by it are traceable to responsibly managedplantations and that adequate document controls are in place to ensure identification andtraceability throughout the Chain of Custody. This also means that the Company is capableof manufacturing and selling FSC 100% and FSC Mix Products in the domestic andinternational markets.

AWARDS

The Company won the following Awards and recognitions during the year :

"CII Excellent Energy Efficiency Unit Award" & "CII InnovativeProject Award" at the CII's 20th National Award for Excellence in EnergyManagement. Tamil Nadu State Safety Award.

"Star Award" from National Safety Council in Occupational Health Safety andEnvironment Awards 2018.

EXPORT HOUSE STATUS

The Company continues to be accredited with "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 2020 11 101 Shareholders are holding Shares in Demat form and 4 98 71055 shares have been dematerialised representing 79.07% of the total Equity ShareCapital.

SUBSIDIARY

M/s Esvi International (Engineers & Exporters) stressed Limited (Esvin) is a whollyowned subsidiary of the Company. Currently Esvin holds properties and derives propertyincome.

MILL DEVELOPMENT PLAN

After successful completion of the Mill Development Plan -II (Phase -I and II) at Unit: Erode and Mill Expansion Plan in Unit : Tirunelveli in Financial Years 2017-18and 2018-19 the Company has now embarked on a Mill Development Plan -III (MDP -III) atUnit : Erode at a Cost of Rs. 315 crores.

The MDP -III at Unit : Erode will consist 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 1 54 000tonnes per annum.

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

The execution of the Project MDP-III has commenced with July 01 2020 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 Company expects delay in execution of the project. Also during theFinancial Year 2019-20 the Company had submitted a Composite Scheme of Compromise /Arrangement with the Creditors Shareholders and other Stakeholders of M/s ServalakshmiPapers Limited (SPL) (Under Liquidation) and subsequent amalgamation of SPL withour Company. The matter is pending before NCLAT.

CURRENT YEAR (2020-21)

The month of April 2020 continued to register financially with most key Markets inIndia and around the world remaining closed amidst Covid-19 Pandemic.

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 has 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. Accordinglythe company recommenced its operations in its Unit : Erode on April 13 2020.Subsequently Collector Tirunelveli District also gave permission to recommenceoperations in our Unit :Tirunelveli and the operations recommenced 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 has a Doctor in attendance to attend to any health issuesof the employees. In Unit : Erode the Production during April 2020 was 5 715tonnes as compared to 10 611 tonnes produced during April 2019. In Unit :Tirunelveli the Production was 337 tonnes in April 2020 as against 5 355 tonnes in April2019. The overall Production for the Company for the month of April 2020 was 6052 tonnes. Total Value of Production during April 2020 amounted to only Rs.26.15 crores compared to Rs. 88.67 crores during April 2019. During April 2020 113tonnes of paper valued at Rs. 0.59 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 and Recovery Boilers are equippedwith Electro Static Precipitators to arrest dust emissions. The Company has installed andoperates an Anaerobic Lagoon for high BOD liquid effluents and a Secondary TreatmentSystem for total Mill effluent. These facilities are operating enabling the Company tocomply with the Pollution Control Authorities on a sustained basis. The treated effluentwater continues to be utilised for irrigating nearby sugar cane fields.

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

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 andAnaerobic Digester.

MANAGEMENT'S DISCUSSIONS AND ANALYSIS REPORT

The Report on Management's Discussion and Analysis as required under Clause 49(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 efficiently specified by SEBI from time to time. Originally thisregulation / reporting requirement was applicable only for the top 500 listed Companiesbased on Market Capitalisation (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. Our Company was in 678th position (Market Capitalisationin BSE) as on March 31 2019. Hence this Regulation on BRR will now be applicable to theCompany with effect from Financial Year 2019-20.

The Company has drafted the Business Responsibility Report in line with the formatprescribed 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 129(1) of the Companies Act2013 have been followed.

The Directors have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31 2020 and of the profitof the Company for the said period.

The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

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 Companyand that such internal financial controls are adequate and were operating effectively.

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 SPB Projects and Consultancy Limited repaid the short term InterCorporate Loan of Rs. 0.60 crores along with interest which was extended in theFinancial Year 2018-19.

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. Witheffect from the last week of the financial year ended on March 31 2020 the Company'soperations were materially impacted by lower production lower sales higher Inventory andnegative cash generation due 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 2020 to the date ofthis Report.

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 of expenditure to be incurred on the activities and monitor theCSR Policy from time to time.

Since your Company falls within the minimum threshold limits the Company hasconstituted a CSR Committee of the Board and has formulated a CSR Policy. The CSR Reportforming part of this Report is furnished in Annexure -VII.

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 inAnnexure -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 witheffect from April 01 2019.

DIRECTORS

During the year Tamilnadu Government withdrew the nomination of Sri Shambu KallolikarIAS and in his place nominated Sri Deepak Srivatsava IFS the Special Secretaryto Government Environment and Forests Department as its Nominee Director on the Board ofour Company. Sri Deepak Srivatsava IFS was appointed as an Additional Director on theBoard of the Company on July 27 2019. He was later appointed by the Shareholders of theCompany vide Postal Ballot on September 18 2020 as Nominee Director liable to retire byrotation. Your Directors place on record the valuable services rendered by Sri ShambuKallolikar IAS during his tenure as Director of the Company. The Board of Directors attheir meeting held on July 27 2019 based on the performance evaluation and based on therecommendations of the Nomination-cum-Remuneration Committee formed the opinion that SriA L Somayaji and Dr Nanditha Krishna (whose first term as

Independent Directors expired on September 28 2019) are persons of integrity andpossess relevant expertise and experience and hence could be re-appointed as IndependentDirectors of the Company. The Board thereupon decided to re-appoint them for a second termas Independent Directors not liable to retire by rotation subject to approval byShareholders of the Company by a Special Resolution.

Approval of the Shareholders by way of Special Resolution through Postal Ballot wasobtained on September 18 2019 for the Re-appointment of Independent Directors SriA L Somayaji and Dr Nanditha Krishna for another term of five years from September 292019 to September 28 2024.

Dr. (Tmt) M Aarthi holding office as a Nominee Director (nominated to the Board by theTamil Nadu Industrial Investment Corporation Limited) had vacated office of NomineeDirector under Section 167(1)(b) of Companies Act 2013 with effect from February 12020. She was re-appointed as Additional Director by the Board on March 28 2020on receipt of fresh nomination from the Tamil Nadu Industrial Investment CorporationLimited. All the Independent Directors have given the declaration that they meet thecriteria on independence as laid down under Section 149(6) of the Companies Act 2013.The performance evaluation of Independent Directors has been done by the entire Board ofDirectors excluding the Director being evaluated at the Board Meeting held on 30thMay 2020. The Board on the basis of such performance evaluation determined to continuethe term of appointment of all Independent Directors.

AUDITORS

M/s Maharaj N R Suresh & Co. and M/s R Subramanian and Company LLPChartered Accountants continue to be the Statutory Auditors of the Company. Particulars ofStatutory Auditors Cost Auditors Internal Auditors and the Secretarial Auditors havebeen given in the Corporate Governance Report that forms an integral part of this report.Secretarial Audit Report as required by Section 204(1) of the Companies Act 2013 isattached 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. The Directors also express their sincere thanks to theGovernment of India Government of Tamilnadu and Commercial Banks for theirunderstanding guidance and assistance and Dealers Customers Suppliers and Shareholdersfor their excellent support at all times.