The Directors of your company take pleasure in presenting you the Thirtieth AnnualReport and the Audited Accounts for the year ended 31st March 2021
FINANCIAL RESULTS AT A GLANCE
| || ||(Rs. In lacs) |
|Particulars ||2020-21 ||2019-20 |
|Revenue from operations ||1873.85 ||4420.86 |
|Other Income ||8.57 ||23.86 |
|Total Income ||1882.42 ||4444.72 |
|Profit from operations before Finance cost Depreciation and Amortization Expenses and Exceptional items ||100.74 ||328.82 |
|Less: Finance Cost ||116.90 ||194.42 |
|Depreciation and Amortization Expenses ||111.47 ||121.08 |
|Profit/(Loss) before Exceptional items and tax ||(121.63) ||13.32 |
|Exceptional items || || |
|Profit/(Loss) before Tax ||(127 63) ||13.32 |
|Less: current tax || || |
|Deferred Tax ||8.39 ||12.37 |
|Mat || || |
|Earlier years || || |
|Profit/(Loss) after Tax ||(136.03) ||0.95 |
The Ministry of Corporate Affairs (MCA) has notified the Indian Accounting Standards(Ind AS) applicable to certain classes of companies and Ind AS has replaced the existingIndian GAAP prescribed under section 133 of the Companies Act 2013 read with Rule 7 ofthe Companies (Accounts) Rules 2014 for such class of companies The company has adoptedInd AS format with effect from April 1 2016.
In accordance with the provisions of the Companies Act 2013 read with the Companies(Accounts) Rules 2014 applicable accounting standards prescribed by the Institute ofChartered Accountants of India and the provisions of SEBI (LODR) Regulations 2015 theaudited financial results are provided in this Annual report.
Your Directors do not recommend to pay a Dividend for the year ended 31 st March 2021.
The total lockdown announced by the Government in the first month of the year underreview impacted the resumption of economic activities throughout the first half of theyear. However the better performance of the Paper industry in the second half resulted ingood demand in the market
The scenario has continued until the sudden spurt of second wave of covid-19. Theconsequent restrictions and lockdowns are affecting the demand and price of the papersstarted nosediving. However an early resumption of activities is expected and theperformance in the second half of the year will be much better. The fast phase ofvaccination is a strong indication towards this.
The domestic demand may also improve Hence the performance will improve in the laterpart of the year.
During the year under review the company has achieved a turnover of Rs. 1873.85 lakhsas against Rs. 442086 lakhs for the previous year. The short fall in turnover is due toCovid-19 and lockdown announced by the Government during the year. During the year underreview the turnover has decreased by 57.61% over the previous year.
The Net Loss for the year was Rs 136.03 lakhs as against the Net Profit of Rs. 0.95lakhs during the previous year.
There was no change in the nature of business of the company during the financial yearended 31st March 2021.
1. Newsprint is being imported at 5% duty and very low rates due to dumping by foreignmanufacturers and this has depressed the demand and prices of newsprint manufactured byIndian Paper Mills thereby also affecting the demand of writing and printing paper asnewsprint capacities are being diverted to wnting and printing paper manufacture.
2. The installed capacity for writing and printing paper has increased significantly inthe last four years thereby affecting the demand as well as prices of the papermanufactured by your company.
3. Measures are being taken to save costs and rationalize operations they are likelyto yield positive results
TRANSFER TO RESERVES:
In view of heavy loss during the Financial Year 2020-21 the Board of Directors hasdecided not to transfer any amount to Reserves during the year under review.
The paid up Equity Share Capital as on 31st March 2021 was Rs.955.50000/-. Duringthe year under review the Company has not issued any further shares.
Your company has not accepted any deposits from the public within the meaning ofSection 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014and hence there are no unpaid/unclaimed deposits nor there is any default in repaymentthereof
NUMBER OF MEETINGS OF THE BOARD
The Board of Directors met 4 (Four) times during the financial year 2020-21. Details ofnumber of meetings of Board of Directors and committees thereof and the attendance of theDirectors in such meetings are provided under the Corporate Governance Report
COMMITTEES OF THE BOARD OF DIRECTORS
During the year under review all recommendations made by the Audit Committee wereaccepted by the Board. There were no instances where the Board has not accepted anyrecommendations of the Audit Committee.
Details of Committees of Board of Directors along with their terms of referencecomposition and meetings held during the year are provided separately in the CorporateGovernance Report which forms part of the Annual Report.
Pursuant to the provisions of Sections 134(3) (p) 149(8) and Schedule IV of the Actand Regulation 17(10) of SEBI Listing Regulations and in accordance with the Guidance Noteon Board Evaluation issued by Securities and Exchange Board of India the Board has earnedout an annual performance evaluation of its own Performance the directors individually aswell as the evaluation of the working of all Board Committees and the Chairman of theBoard. The performance evaluation was carried out on the basis of inputs received from allthe Directors/ Members of the Committees as the case may be. Further the Board'sperformance was evaluated based on the criteria like structure Governance Dynamicsfunctioning approval and review of operations financials internal control etc.
The Independent Directors of the company have also convened a separate meeting for thispurpose. All the results of evaluation have been communicated to the Chairman of the Boardof Directors.
DECLATION BY INDEPENDENT DIRECTORS
The Independent Directors have submitted their disclosures to the Board that theyfulfil all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY COMPANY
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
MATERIAL CHANGES AND COMMITMENTS BETWEEN THE END OF FINANCIAL YEAR (MARCH 31 2021) TOWHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THIS DIRECTORS' REPORT
The state Government (the Government of Tamilnadu) has imposed some restrictions from10th May 2021 to 24th May 2021 in view of the sudden spurt of second wave of COVID-19. Therestrictions on movement of people and spread of COVID among local communities hasaffected the availability of manpower. The Company is closely monitoring the situation andtrying to maintain the operations
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Your Company believes that the fundamental objective of corporate governance is toenhance the interests of all stakeholders. The Company's corporate governance practicesemanate from its commitment towards discipline accountability transparency and fairness.Key elements in corporate governance are timely and adequate disclosure establishment ofinternal controls and high standards of accounting fidelity product and service quality.
Your Company has adopted appropnate standards for good Corporate Governance. All themandatory provisions of Corporate Governance as prescribed under the amended ListingAgreements of the Stock Exchange with which the Company is listed are complied with. Thecompany complies with Corporate Governance requirements specified in regulation 34 readwith Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
A report on Corporate Governance as required under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 in Annexure 7 forms part of this Annual Report.
NOMINATION AND REMUNERATION COMMITTEE POLICY
Pursuant to Section 178 (3) of the Companies Act 2013 the Nomination and RemunerationCommittee of the Board of the Company has formulated the criteria for Board nominations aswell as policy on remuneration for Directors and employees of the Company.
The Remuneration policy provides the framework for remunerating the members of theBoard Key Managerial Personnel and other employees of the Company. This policy is guidedby the principles and objectives enumerated in Section 178 (4) of the Companies Act 2013and reflects the remuneration philosophy and principles of the company to ensurereasonableness and sufficiency of remuneration to attract retain and motivate competentresources a clear relationship of remuneration to performance and a balance betweenrewarding short and longterm performance of the Company. The policy lays down broadguidelines for payment of remuneration to Executive and Non-Executive Directors within thelimits approved by the shareholders. The Company has a policy on directors' appointmentand remuneration including criteria for determining qualification positive attnbutesindependence of a director and other matters provided under subsection (3) of section 178.
As per the requirements of the provisions of the Companies Act 2013 a Nomination andRemuneration Committee of directors was formed by the Board of Directors consisting of: 1Sri P. Kanagavadivelu Chairman (Non-Executive - Independent) 2. Sri C.P. NarendranMember (NonExecutive - Independent) 3. Sri R. Uma Shankar Member(Non-Executive-Independent) The said committee has been empowered and authorised toexercise widest power as entrusted under the provisions of Section 178 of the CompaniesAct 2013.
Remuneration Policy is annexed hereto as Annexure 6 forming part of the report.
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The required details in accordance with section 134 (3)(m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 are given in Annexure-1 formingpart of the report
RISK MANAGEMENT COMMITTEE
The Company formulated a Risk Management Committee aligned with the requirements of theCompanies Act 2013 and Listing Regulations. The details of the Committee and its terms ofreference are set out in the Corporate Governance Report forming part of this Report.
The Company has established a nsk management frame work to identify evaluate thebusiness risks and opportunities. The main object of the framework is to minimise theadverse impact of the risks by taking effective mitigating measures to retain the businessadvantages. The identified risks and mitigation measures are reviewed by the concernedHeads and all the risks identified and mitigation measures are placed before the Board.
Board is of the opinion that there is no risk which affects the existence of theCompany.
The risk management process of the company is being periodically reviewed forimprovement.. None of the identified risk elements have any threat on the sustainabilityof the business.
MANAGEMENT DISCUSSION AND ANALYSIS
In accordance with the Companies Act 2013 and Regulation 34 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the details of the Managementanalysis and datas are given in Annexure 2.
Pursuant to section 92(3) read with section 134(3) (a) of the Companies Act 2013 theAnnual return as on 31 March 2021 is available on the company's Websitelink-www.shreekarthikpapers.in
INTERNAL FINANCIAL CONTROLS
Your company has in place adequate internal financial controls with reference tofinancial statements The accounting transactions and operations are audited by theInternal Auditor vis.a.vis Internal controls policies procedures and deviations if anyare reported and corrective actions are taken appropriately. During the year under reviewno reportable material weakness were observed
In compliance with the provisions of Section 177 of the Companies Act 2013 andRegulation 22 of SEBI Listing Regulations the company has established a vigil mechanismto provide a frame work to promote responsible and secure whistle blowing and to provide achannel to the employees and Directors for reporting to the management concerns aboutunethical behaviour actual or suspected fraud or violation of the code of conduct orpolicy of the company as adopted/framed from time to time The details of Vigil Mechanismis given in Corporate Governance Report which forms part of this Annual Report. TheWhistle Blower Policy is available in the website of the company atwww.shreekarthikpapers.in
SIGNIFICANT AND MATRIAL ORDERS PASSED BY THE RGULATORS OR COURTS OR TRIBUNALS
There is no significant material orders passed by the regulators or courts or tribunalswhich affects the going concern status or operations in future
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any joint venture subsidiary or associate company.
DIRECTORS' RESPONSIBILITY STATEMENT
In compliance of Section 134 (5) of the Companies Act 2013 your Directors wish toconfirm that:-
i) In the preparation of the annual accounts the applicable Accounting Standards havebeen followed
ii) the Directors have selected 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 at the end of the financial year and of theProfit/(Loss) of the Company for that period.
iii) The Directors have taken proper and sufficient care as warranted for themaintenance of adequate accounting records in accordance with the provisions of this Actin safeguarding the assets of the Company and for preventing/ detecting any incidence offrauds and other irregularities
iv) The Annual Accounts have been prepared on a going concern basis.
v) The Directors had laid down internal financial controls to be followed by thecompany and that such internal controls are adequate and were operating effectively
vi) The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In terms of the provisions of the Companies Act 2013 Smt. Selvambal Sengottu Veluholding DIN No.01740974 retire from the Board of Directors of the company by rotation atthe ensuing Annual General Meeting and being eligible has offered herself forre-appointment.
Sri Vignesh Velu holding DIN No 03505424 was appointed as a Whole time Director for aperiod of 5 years with effect from 01.092016 and his tenure of office expires on31.082021 on the terms and conditions approved by the shareholders at the 25th AnnualGeneral Meeting of the company held on 28th September 2016 The Board of Directors intheir meeting held on 26th June 2021 had re-appointed Sri Vignesh Velu as Whole timeDirector for a period of three years with effect from 01092021 to 31.08.2024 subject tothe approval of the shareholders in the ensuing Annual General Meeting of the company. Theterms of appointment are detailed in the AGM Notice.
The Company has received individual declaration from following Independent Director(s)of the Company stating that they meet the criteria of independence as provided underSub-section (6) of Section 149 of the Act and Regulation 16(1)(b) of the SEBI ListingRegulations:
1 .Sri P. Kanagavadivelu
2) Sri C.P. Narendran and
3) Sri R. Uma Shankar
The company has received individual affirmation from all the Directors and SeniorManagement Personnel of the company stating that they have fully complied with theprovisions of the Code of Conduct for the Board of Directors and Senior ManagementPersonnel of the company during the Financial Year ended 31st March 2021.
Sri M.S. Velu Managing Director and Chief Executive Officer Sri Vignesh Velu Wholetime Director Ms. Rani Chief Financial Officer and Sri V. Rajan Company Secretary arethe Key Managerial Personnel (KMP) of the company as per section 203 of the Companies Act2013.
RELATED PARTY TRANSACTIONS
All the related party transactions are entered on arm's length basis and are incompliance with the applicable provisions of the Act and the Listing Agreement. Thedisclosure is being made as a matter of prudence. All the transactions have been done inthe ordinary course of business.
The transactions entered by the company with the related parties during the financialyear 2020-21 are in the ordinary course of business and at arm's length basis. Theparticulars of related party transactions is provided in the Form AOC2 and annexed to theBoard's Report as Annexure 4.
The Statutory Auditors M/s. T.M. Jeyachandran & Co. Chartered Accountants Chennaiwere appointed as Statutory Auditors for a term of five years commencing from thefinancial year 2020-21 who will retire at the conclusion of the Annual General Meeting tobe held in the year 2024 and the shareholders have authorized the Board to fix theremuneration payable to the auditors from time to time.
The first proviso to Section 139 of the Companies Act 2013 which mandated theratification of the appointment of Statutory Auditors at every subsequent Annual GeneralMeeting has been omitted by the Companies (Amendment) Act 2017 and the same was notifiedvide notification dated 07th May 2018. Accordingly no resolution is being proposed forratification of appointment of statutory auditors at the thirtieth AGM.
The notes on financial statements referred to in the Auditor's Report areself-explanatory and do not call for any fu rther comments and explanations. The Auditor'sReport does not contain any qualification reservation or adverse remark.
NO FRAUDS REPORTED BY THE AUDITORS
There is no instance of frauds reported by the Statutory Auditors of the company forthe Financial Year under review under section 143(12) of the Companies Act 2013.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Sri S Rengasamy Company Secretary in practice to undertake the SecretarialAudit of the company for the year 2020-21 The Report of the Secretanal Audit Report inform MR3 obtained pursuant to Companies Act 2013 and 24A of SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 for the financial year 2020-21 is annexedherewith as Annexure 4.
PARTICULARS OF EMPLOYEES
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of theemployees of the company is annexed herewith "Annexure 5
None of the employees of the company were in receipt of monthly or yearly remunerationin excess of the limits specified under the Companies Act 2013 and Rule 5(2) and Rule 5(3)of the Companies (Appointment and Remuneration of Managenal Personnel) Rules 2014.
Company is not paying any commission to its Directors/Whole time Director and ManagingDirector of the company.
Your company's shares are listed in BSE Limited. The listing fee to BSE Limited hasbeen duly paid. The shares are regularly traded in BSE Ltd. and were not suspended at anytime during the year.
DISCLSOURE UNDER SEXUAL HARASSMNT OF WOMEN AT WORK PLACE
As per the provisions of the Sexual Harassment of Women at work place (PreventionProhibition and Redressal act 2013 no cases of sexual harassment of women at work placewere neither reported nor redressed for the relevant year
Relationship with employees was cordial throughout the financial year.
Your Directors record with a deep sense of gratitude to the working capital bankers forthe excellent support and cooperation rendered by them to the company. Your Directors arethankful to its valuable customers esteemed stakeholders and business associates fortheir continued support and the confidence reposed in the Company and its Management.
| ||For and on behalf of the Board of Directors |
| ||M.S. Velu |
| ||DIN No. 01682508 |
|Place: Coimbatore ||Chairman and Managing Director |
|Date: 26.06.2021 || |