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Shree Karthik Papers Ltd.

BSE: 516106 Sector: Industrials
NSE: N.A. ISIN Code: INE538D01015
BSE 00:00 | 09 Apr 3.69 0
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NSE 05:30 | 01 Jan Shree Karthik Papers Ltd
OPEN 3.69
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VOLUME 37
52-Week high 11.70
52-Week low 3.04
P/E
Mkt Cap.(Rs cr) 7
Buy Price 3.52
Buy Qty 21.00
Sell Price 3.69
Sell Qty 163.00
OPEN 3.69
CLOSE 3.69
VOLUME 37
52-Week high 11.70
52-Week low 3.04
P/E
Mkt Cap.(Rs cr) 7
Buy Price 3.52
Buy Qty 21.00
Sell Price 3.69
Sell Qty 163.00

Shree Karthik Papers Ltd. (SHKARTHIKPAP) - Director Report

Company director report

Dear Shareholders

The Directors of your company take pleasure in presenting you the Twenty Eighth AnnualReport and the Audited Accounts for the year ended 31st March 2019.

FINANCIAL RESULTS AT A GLANCE ( Rs. in lacs)

Particulars 2018-19 2017-18
Revenue from operations 6244.88 5722.03
Other Income 14.45 2.34
Total Income 6259.33 5724.37
Profit from operations before Finance cost
Depreciation and Amortization Expenses and Exceptional items 1073.43 580.73
Less: Finance Cost 134.26 105.51
Depreciation Expenses 100.02
Profit/(Loss) before Exceptional items and tax (1207.69) 375.20
Exceptional items
Profit/(Loss) before Tax (1207.69) 375.20
Less: Current tax 76.50
Less: Deferred Tax 89.35
Less: Mat 26.29 (162.09)
Earlier years 2.67
Profit/(Loss) after tax (1233.98) 368.77

ACCOUNTING STANDARDS

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 of theCompanies (Accounts) Rules 2014 for such class of companies. The company has adopted IndAS 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.

DIVIDEND

Your Directors do not recommend to pay a Dividend for the year ended 31st March 2019 inview of losses occurred.

OPERATIONS

During the year under review the company has achieved a turnover of Rs. 6244.88 lakhsas against Rs. 5722.03 lakhs for the previous year. The Net Loss after tax was Rs. 1233.98lakhs as against the profit after tax of Rs. 368.77 lakhs during the previous year.

During the year under review the turnover has increased by 9.13% over the previous yearbut the total expenses has also increased by 39.59% over the previous year and theCompany's Net loss after tax is Rs.1233.98 lakhs.

There was no change in the nature of business of the company during the financial yearended 31st March 2019.

FUTURE OUTLOOK

1. Newsprint is being imported at "Nil" duty at very low rates due to dumpingby foreign manufacturers and this has depressed the demand and prices of newsprintmanufactured by Indian Paper Mills thereby also affecting the demand of writing andprinting paper as newsprint capacities are being diverted to writing and printing papermanufacture.

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 losses incurred during the Financial Year 2018-19 the Board of Directorshas decided not to transfer any amount to Reserves during the year under review.

SHARE CAPITAL

The paid up Equity Share Capital as on 31st March 2019 was Rs. 95550000/-. Duringthe year under review the Company has not issued any further shares.

CREDIT RATING

During the year under review the Rating Agency of "Care Rating Limited"maintained the "BB+" rating for the company's long term and short term fundbased facilities of Rs. 12.75 crores.

PUBLIC DEPOSITS

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 2018-19. 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. Theprovisions of the Companies Act 2013 and listing agreement were adhered to whileconsidering the time gap between two meetings.

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.

BOARD EVALUATION

Pursuant to the provisions of Sections 134(3)(p) 149(8) and Schedule IV of the Act andRegulation 17(10) of SEBI Listing Regulations and in accordance with the Guidance Note onBoard Evaluation issued by Securities and Exchange Board of India the Board has carriedout 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. TheIndependent 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.

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

There is no material change or commitments after closure of the financial year till thedate of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There are no significant and material orders passed by the Regulators/Courts/Tribunalswhich would impact the going concern status and the company's operations in future.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Your Company has adopted appropriate 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 forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

The provision of Corporate Social Responsibility under sec 135 of the Companies Act2013is not applicable to this company during the financial year in view of heavy lossesoccurred.

NOMINATION AND REMUNERATION COMMITTEE POLICY

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:

1. Sri P. Kanagavadivelu Chairman (Non-Executive -Independent)

2. Sri P. C. Narendran Member (Non-Executive - Independent)

3. Sri R. Uma Shankar Member (Non-Executive - Independent)

The said committee has been empowered and authorised to exercise widest power asentrusted under the provisions of Section 178 of the Companies Act 2013. The Company hasa policy on directors' appointment and remuneration including criteria for determiningqualification positive attributes independence of a director and other matters providedunder sub-section (3) of section 178.

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

The Company follows a comprehensive and integrated risk appraisal mitigation andmanagement process. The risk management process of the company is being periodicallyreviewed for improvement.. None of the identified risk elements have any threat on thesustainability of 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

EXTRACTS OF ANNUAL RETURN

As per requirements of provisions of the Companies Act 2013 the extract of annualreturn in the prescribed Form MGT 9 is annexed hereto as Annexure 3 forming part of thereport.

INTERNAL FINANCIAL CONTROLS

Your company has in place adequate internal financial controls with reference tofinancial statements.

The accounting transactions and operations are audited by the Internal Auditorvis.a.vis Internal controls policies procedures and deviations if any are reported andcorrective actions are taken appropriately. During the year under review no reportablematerial weakness were observed.

VIGIL MECHANISM

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 at www.skpl@yahoo.com

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 M.S. Velu holding DIN No. 0168208 was appointed as Chairman and Managing Directorof the company for a period of 5 years with effect from 31.03.2019 subject to the approvalof the shareholders vide their Board Meeting held on 29th March 2019. Board recommends hisappointment as Chairman and Managing Director. Suitable resolution is included in thisNotice of the Annual General Meeting for appointing him as Chairman and Managing Director.

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 P.C. Narendran and

3) Sri R. Uma Shankar

The notice convening forthcoming Annual General Meeting includes the proposal forappointment/reappointment of Directors . A brief resume of the Directors seekingappointment/ re-appointment at the forthcoming Annual General Meeting and other details asrequired to be disclosed in terms of Regulation 36(3) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 forms part of the Notice.

None of the Directors are disqualified for appointment/re-appointment under section 164of the Companies Act 2013.

None of the Directors of the company have resigned during the year.

None of the Directors are related inter-se to each other save and except Sri M.S. VeluSmt. S.S. Velu and Sri Vignesh Velu.

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 2019.

Sri M.S. Velu Chief Executive Officer Smt. Muthulakshmi Chief Financial Officer andSri V. Rajan Company Secretary are the Key Managerial Personnel (KMP) of the company asper section 203 of the Companies Act 2013.

DECLARATION 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

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 2018-19 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.

AUDITORS

M/s. K S P V & Co. Chartered Accountants Coimbatore registered with the Instituteof Chartered Accountants of India (Firm Registration No. 015520S) due to their internalrestructuring consequent to which they are unable to continue as Statutory Auditors of thecompany resigned with effect from 21st August 2019. The Board of Directors in theirmeeting held on 30th August 2019 appointed M/s T.M. Jeyachandran & Co. (FirmRegistration No. 012309S) Chartered Accountants Chennai as Statutory Auditors in placeof casual vacancy caused due to the resignation of M/s. K S P V & Co. from 21st August2019 to the conclusion of the 28th Annual General Meeting subject to the approval of theshareholders.

M/s. T.M. Jeyahcandran & Co. (Firm Registration No. 012309S)Chartered AccountantsChennai are eligible for appointment and have confirmed that their appointment ifapproved will be in compliance with section 141 of the Companies Act 2013.

Your Board recommends the appointment of M/s. T.M. Jeyachandran & Co. (FirmRegistration No. 012309S) Chartered Accountants Coimbatore (as Statutory Auditors for aterm of 5 years from the conclusion of 28th Annual General Meeting until the 33rd AnnualGeneral Meeting to be held in the calendar year 2022.

AUDITOR'S REPORT

The notes on financial statements referred to in the Auditor's Report areself-explanatory and do not call for any further 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.

SECRETARIAL AUDIT

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 2018-19. The Report of the Secretarial Audit Report isannexed herewith as Annexure 5.

SECRETARIAL AUDITOR'S OBSERVATION IN SECRETARIAL AUDIT REPORT AND DIRECTORS EXPLANATIONTHERETO

During the year under review the Company's Share Capital is Rs. 95550000 and theshares are listed with BSE. During the year under review the Company has appointed theKey Managerial Personnel both full time Company Secretary and Chief Finance Officer undersection 203 of the Companies Act 2013.

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 6

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 Managerial Personnel ) Rules 2014.

Company is not paying any commission to its Directors/Whole time Director and ManagingDirector of the company.

LISTING

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

DISCLOSURE UNDER SEXUAL HARASSMENT 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.

INDUSTRIAL RELATIONS

Relationship with employees was cordial throughout the financial year.

ACKNOWLEDGEMENTS

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
(Sd./-) M.S. Velu
Chairman and
Place : Coimbatore Managing Director
Date : 30.08.2019 DIN : 0168208